PM — Egypt is up tonight in Afcon

It’s the debt and macro hump day, ladies and gentlemen, with local headlines dominated by securitization news.

THE BIG STORIES TODAY-

The debt market is heating up with new securitization transactions: Madinet Nasr Housing and Development (MNHD) has closed its first EGP 300 mn issuance as part of a three-year EGP 3 bn securitization program, according to a press release (pdf) from our friends at EFG Hermes, who acted as sole advisors on the issuance. The three-tranche offering is backed by a receivables portfolio of EGP 373.9 mn.

Meanwhile, Al Oula is also looking to tap the securitization market with a EGP 900 mn issuance in 1H2022, Al Mal quotes Managing Director and Vice Chairperson Ayman Abdel Hamid as saying.

…And sukuks: Palm Hills Developments (PHD) is also looking to close a EGP 3 bn sukuk sale this quarter through Contact Financial Holdings’(formerly Sarwa Capital) sukuk arm, Sarwa Promoting and Underwriting head Ayman Elsawy tells Enterprise, confirming a story that came out today in Al Borsa.

FOR TONIGHT-

The World Bank will release its updated Egypt, MENA and global growth forecasts at 4:30pm Cairo time. The latest Global Economic Prospects report will primarily focus on the impact of Omicron to global growth. The World Bank previously upgraded Egypt’s growth outlook in October 2021, saying it expected our economy to grow 5.0% in FY2021-2022, up from the 3.3% in FY2020-2021.

Fed chairman Jerome Powell’s confirmation hearing in the US Senate’s banking committee will take place tonight. Powell will likely face a grilling on how the Fed plans to combat inflation, when the planned interest rate hikes are expected, as well as whether he should have acted faster to put a lid on surging US inflation, the Wall Street Journal reports.

^^We’ll have more on these stories and others in tomorrow’s EnterpriseAM.

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• Annual urban inflation rose to 5.9% in December: This compares to 5.6% in November, signaling the end of a two-month downward trend despite a slowdown in food price inflation.
• Gov’t wants to nearly double annual exports by 2025: Egypt aims to increase export revenues to USD 60 bn a year by the middle of the decade as part of plans to eventually reach USD 100 bn a year, Trade Minister Nevine Gamea said this week.
• UK tourists head to Egypt as covid test rules eased: The UK arm of travel agency TUI is reporting a rise in bookings to Egypt after the UK government relaxed covid testing requirements last week.

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HAPPENING NOW-

It’s day two of the World Youth Forum in Sharm El Sheikh, which got underway yesterday. President Abdel Fattah El Sisi and Prime Minister Mostafa Madbouly gave speeches on how Egypt plans to mitigate the impact of climate change. You can check out the full agenda for the forum here (pdf).

The Alexandria and Dekheila ports were reopened today after a one-day closure due to bad weather conditions, according to the Alexandria Port Authority.

???? CIRCLE YOUR CALENDAR-

PSA- Calling seed-stage fintech startups: You have until Tuesday, 15 February to apply to Orange Ventures’ seed challenge for a shot at EUR 500k. To qualify you need to have a seed-stage fintech business that has raised less than EUR 1 mn so far. You can apply here.

Abu Dhabi Sustainability Week looks ahead to COP27: The UAE will host heads of state, business leaders and policymakers at Abu Dhabi Sustainability Week (ADSW) from 15-19 January. ADSW will see 45k attendees from 175 countries meet to discuss climate action. Expectations for the UN’s COP27 summit in Sharm El-Sheikh in November will likely be high on the agenda. COP28 is set to be hosted by the UAE in 2023.

South Korean President Moon Jae-in is due in town from 20-21 January on an official visit, during which he will meet President Abdel Fattah El Sisi. Egypt is the last leg of a Middle East tour that will also take Moon to the UAE and Saudi Arabia.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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THE BIG STORY ABROAD- More omicron records from the US: The US recorded 1.35 mn new infections yesterday, in the biggest case count for any country since the start of the pandemic, reports Reuters. The US’s seven-day average doesn’t look much better, with new cases tripling in two weeks to over 700k new infections per day thanks to omicron. Preliminary findings from two South African clinical trials find that the new strain has a much higher rate of "asymptomatic carriage" than earlier variants, according to another Reuters article. The mean asymptomatic carriage rate rose to 16% during the period of omicron spread compared to 2.6% during the beta and delta outbreaks, one of the studies found.

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IN MEMORIAM- Mostafa El Ahwal, founder of International Associated Cargo Carrier (IACC) Holdings, passed away on Friday. El Ahwal founded IACC Holdings, a privately owned investment company focused on shipping and logistics, in 1979. Since then, IACC’s subsidiaries now include regional container line Transmar, marine services and ship agencies’ company Safina Shipping Services, stevedoring, warehousing and port services company Transcargo International, and integrated logistics services company IACC Logistics. El Ahwal was a member of the Egyptian Businessmen’s Association, chairman of Egypt East Africa Business Council, head of COMESA Business Council, head of EBA Transportation Committee and a member of the Saudi-Egyptian Businessmen’s Association.

☀️ TOMORROW’S WEATHER- There’s a very slight chance of rain along with cloudy skies tomorrow. The mercury will reach 19°C during the day and 10°C at night, our favorite weather app tells us.

A genetically-modified pig heart was transplanted into a Maryland man, in a historic first that has the potential to have larger implications for organ transplant surgery, reported the Wall Street Journal. The surgery was the first evidence that a human heart can be replaced with a genetically-modified animal heart without immediately being rejected by the human body, although the coming weeks will be critical to prove the success of the surgery. Pig heart valves are regularly used to replace human ones. Doctors at the University of Maryland Medical Center have called the transplant a breakthrough in a field called xenotransplantation, or successful animal-to-human transplants, that researchers have been working to advance for decades.

Like Kramer, PETA is worried about pig men: PETA VP spoke out against the surgery, calling it unethical and dangerous, particularly with the risk of viral transmission between animals and humans.

You’ve had color-changing accessories, but have you had a color-changing car?: The German car manufacturer unveiled last week a new concept vehicle called the iX Flow that comes with “E Ink” that can change colors through an application, according to a press release. The car’s paint uses electrophoretic technology which when stimulated by electrical signals brings different color pigments to the surface — similar to the tech used in the Amazon Kindle. At the moment, car owners will be able to choose between black, white, and gray, but more color options could be available in the future. The iX Flow will also come equipped with a 31-inch BMW Theatre Screen with Amazon Fire TV that has 5G connectivity, 8K resolution, and surround sound.

You can check out the transformation for yourself with this video from BMWBLOG (watch, runtime: 04:41).

???? ON THE TUBE TONIGHT-

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Final Scene is a dark (and often twisted) take on some of the region’s most controversial topics. The Shahid original pan-Arab anthology show consists of eight standalone episodes, starts with a nice hum-drum story before descending into darkness. Three episodes are from Egypt: One of the Egyptian episodes stars Nelly Karim and Eyad Nassar who were once lovers five years ago, but their meeting soon takes a less romantic turn as they instead plot a scheme together. In another, Salma Abu Deif and Karim Qassem start off as a love story for the ages (with Naguib Mahfouz recitations and all) but lies turn the relationship into a fight for revenge. Finally, Ahmed Dawood plays a husband who can’t keep up with his wife Bassant Shawky’s demands and soon gets himself into a lot of trouble with debt.

We noticed Netflix Games showing up on our mobile app this morning. You can choose the game you want from your Netflix app and it will redirect you to the App Store. There seem to be quite a few interesting offerings, especially the Stranger Things inspired game. Netflix Games come without charge with your normal streaming subscription.

⚽ Egypt is up tonight in Afcon: Egypt kicks off its Afcon 2021 campaign today, meeting Nigeria in the opening game of Group D at 6pm in Cameroon. The meetup of the Pharaohs and the Super Eagles is highly anticipated with both teams seemingly equally equipped, based on historical matches, writes Punch. As usual, Mohamed Salah is Egypt’s wild card, with the team depending on the Liverpool star to get a few balls past Nigeria’s goalie. However, the President of the Authentic Nigeria Football Supporters Club Abayomi Ogunjimi went out to say to Goal.com that Salah is “just one person” and that the Nigerian team also has players that can give out a competition.

Our team in Cameroon is (thankfully) sans covid, with all 25 players and the team staff testing negative for the virus, according to Youm7. The team is heading to Afcon a handful of men short, after eight covid cases were confirmed among staff and players a few days ago. Since then, goalkeeper Mohamed Abou Gabal, goalkeeping coach Essam el-Hadary, and physiotherapist Mostafa Sadek tested negative today after being among those who tested positive. Preparations are being made to have them catch up with the rest of the team “as soon as possible.”

Other Afcon matches today: Algeria and Sierra Leone are on the field as we dispatch in a match for Group E. Meanwhile, the other match in our Group D will see Sudan play Guinea-Bissau at 9pm.

English Premier League: Southampton will play against Brentford at 9:45pm.

Serie A: Cagliari will compete against Bologna at 9:45pm today.

???? EAT THIS TONIGHT-

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???? OUT AND ABOUT-

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D-Sync’s film series continues, with a screening of films by documentary filmmaker Saad Nadim as well as the renowned Shadi Abdel Salam. The event will take place at the Contemporary Image Collective tomorrow at 7pm and will include a group discussion with the attendees.

Cairo Jazz Club 610 has quite the trap scene lineup tomorrow: MousV and producer Gelba will jump-start the night playing songs from their new album together, Maqsoum. Later on rapper Shahyn will take the stage followed by DJ Kubbara.

???? UNDER THE LAMPLIGHT-

A Fed hatchet job ahead Jerome Powell’s confirmation: In The Lords of Easy Money, business journalist Christopher Leonard adds his name to the many critics of quantitative easing, with a particularly scathing look at the US Federal Reserve’s stimulus measures following the global financial crisis. He argues quadrupling the M2 supply in circulation had encouraged banks and other investors to extend more risky debt. Leonard uses this to attribute blame to quantitative easing for everything from wealth inequality to overvalued stocks. The book is a timely read to understand what could happen next through a thorough analysis of what this policy intervention looks like on the ground.

OUR ANALYST OF THE WEEK- Rawan Ali, associate at Beltone Financial (Linkedin).

My name is Rawan Ali and I’m an associate at Beltone on the macro and strategy team. I’m the primary analyst for the GCC region, mainly Kuwait, UAE, and Saudi Arabia. I’ve been working at Beltone for the past four years and it has really helped me grow on both a professional and personal standpoint. Prior to that I worked as a teaching assistant in economics at the Arab Academy for Science and Technology after I graduated in 2016. I then had a quick stint at a political party before moving to my current job. I’m currently studying for my masters in economics from Cairo University and after I finish it, I’m planning to also get my PhD from abroad… but I’ll probably take a break for a year or two first [laughs]. We’ll see where life will take me.

The best part of my job is being exposed to the market talk. You get to meet and discuss the market with the people who are actually investing into it. It often feeds into our view as we have an idea of how investors think and perceive things. Research in general allows a lot of room to expand your knowledge. The horizon is endless and I love all the winding roads you have to take to get to a conclusion.

The worst part of my job is the deadlines, especially if you’re working on something you haven’t been exposed to before and you’re tight on time. It’s a demanding job, but that’s not always a bad thing for me. I love my team a lot and the work environment is great, so even when we put in long hours, we enjoy each other’s company throughout.

Egypt and the GCC have some similarities on the macro front when it comes to private spending and energy. I think the past two years were very transitional when it comes to the macro picture. The huge stimulus packages that were offered helped boost private spending in both the GCC and Egypt. Another similarity is the push in the energy sector. In the GCC, this was in the form of oil exports while Egypt did well when it came to natural gas. Egypt’s trade surplus was supported by high natural gas exports and this was a really good feat as it was challenging to keep trade intact with the ongoing supply chain problems. It also contributed to a stable EGP.

We expect Egypt to grow at a 5.6% clip in FY2021-2022. That’s similar to the rest of the region, with Saudi Arabia expected to be up by 4.9% in 2022 and UAE by 5.3% in 2022. As for FY2022-23, we’re expecting a 5.9% growth for Egypt, but it really depends on a number of uncertainties that we could face such as lockdowns or more variants.

Global inflation rates will probably catch up to Egypt this year. We’re expecting a tightening of monetary policy in the coming two years as a result and we forecasted a hike of 100 basis points in interest rates in 2022.

The pandemic definitely changed the way I do my job as I learned that there are two sides to every coin and the one that is most likely to appear is the one with a more solid explanation. When it comes to things such as judging whether oil prices will increase or stay at the same level, you have to choose which of the scenarios is more probable, given a number of uncertainties. When I get things like this right, I feel very proud, but when I get them wrong, I research the subject a bit more to see what factors I might have overlooked to note them the next time. It’s a long process, but it helps me learn.

I used to be more conservative in my forecasts but now I’m more confident in identifying possible catalysts and upsides. Still, it’s important to keep things in proportion and I avoid hyping a stock up if I don’t think that it deserves so much attention. There has to be an actionable framework currently being implemented to confidently be bullish about an investment.

The last great thing I watched was The Queen’s Gambit. I actually just finished it last weekend [laughs]. I like to watch shows that have a personality that is so invested in something specific, like Stephen Hawkings in The Theory of Everything. I try to figure out where they get their inspiration from: Reading a lot? Marveling at the unknown? Following a mentor?

I’m currently reading The Only Game in Town by Mohamed El Erian. He talks about central banks and their role during times of crisis during the financial crisis. He also discusses how their role should be shaped going forward and the policy changes needed to ensure a sustainable financial system. Next on my shelf is definitely Blowout by Rachel Maddow where she talks about the dark side of the oil and gas industry and all the politics involved.

In my downtime, I like to spend time with my dog Jazz. He’s everything to me and any time I have, I try to allocate it to him. Otherwise, I like to watch movies or practice the guitar. I’m obsessed with jazz music (hence my dog’s name) and I enjoy listening to it whenever I can. I also like going for a cruise with my fiance or just spending time with him in general.

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MARKET NEWS-

Orascom Construction is paying out 2021 dividends to its shareholders of EGP 3.65 per share, the company said in an EGX disclosure (pdf).

The International Company for Medical Industries (ICMA) has listed new shares on the EGX as part of the company’s EGP 33.48 mn capital increase, the company said in a bourse filing (pdf).

MARKET ROUNDUP-

The EGX30 fell 0.2% at today’s close on turnover of EGP 986 mn (19.3% below the 90-day average). Foreign investors were net sellers. The index is up 0.4% YTD.

In the green: MM Group (+3.1%), TMG Holding (+1.1%) and Abu Qir Fertilizers (+1.1%).

In the red: Speed Medical (-3.1%), GB Auto (-2.8%) and Mopco (-2.4%).