PM — Happy birthday to EnterprisePM

Happy Tuesday afternoon, ladies and gentlemen. The news is back in full swing on this hump day, with big news and interesting stories to keep us busy.

We’re taking the pickup in pace as the news cycle’s birthday present to us, as we celebrate EnterprisePM’s first full year around the sun. It is an honor to write to each and every one of you, and doubly so to write to you twice each day.

THE BIG STORY TODAY

The EGX has executed the sale of shares to investors who subscribed to Macro Group’s IPO, which saw it offer a 45.8% stake to institutional and retail investors over the past week, the bourse said today. Macro raised EGP 1.3 bn in the IPO, which saw it sell 264.5 mn shares at EGP 4.85 apiece, valuing the company at around EGP 2.8 bn. The institutional offering — which was allocated 95% of the shares — was 1.8x oversubscribed,

while the retail component saw stronger demand, closing on Monday 102x oversubscribed.

Shares will start trading Thursday under the ticker MCRO.CA at EGP 4.85 each, the EGX confirmed.

HAPPENING NOW- The World Bank is unveiling its updated outlook for the Egyptian economy at an event being attended by International Cooperation Minister Rania Al Mashat, Communications Minister Amr Talaat, and the World Bank’s country director for Egypt, Yemen and Djibouti, Marina Wes. We’ll have coverage in tomorrow’s EnterpriseAM.

Meanwhile, it’s a busy day at the House of Representatives, where several important bills are up for discussion at the general assembly and within House committees. On the docket for today:

• Changes to the Real Estate Registry Act that aim to simplify property registration procedures, which received the green light from the House’s Legislative Committee last week (general assembly);
• Amendments to the Income Tax Act (House Planning and Budgeting Committee);
• Amendments to the Capital Markets Act that would introduce future flow securitization to the Egyptian market (House Planning and Budgeting + Constitutional and Legislative committees).

The House struck down proposed amendments to the Education Act in its plenary session today for being unconstitutional, Ahram Gate reports. The amendments proposed imposing a EGP 500-1k fine on parents whose children miss school without sufficient reason, among other things. The House Education Committee had struck down the amendments last week, saying in its report (pdf) that the bill had several unconstitutional clauses.

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TODAY is your last day to apply to join the Fortune Global Women's Mentoring Program, which will take place from 8-28 May 2022. The program aims to bring emerging women leaders from around the world to the US to meet and learn from the Fortune Most Powerful Women community, which includes executive women mentors from companies such as Accenture, Johnson & Johnson, and Aetna. The deadline to apply for the program is 8 February. You can begin your application by signing up here via our friends at the US Embassy in Egypt.

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

• Orange Egypt snapped up 30 MHz of new bandwidth for USD 440 mn from the National Telecommunications Regulatory Authority, as a continuation of the 2020 government tender that saw 80 MHz in new frequencies sold to mobile operators for almost USD 1.2 bn.
• MM Group for Industry and International Trade will sell Apple products in Egypt from 3Q2022 after signing an agreement with Apple Trading Egypt.
• More ITFC financing: The Madbouly government plans to finalize as early as this month a new financing program for 2022 with the International Islamic Trade Finance Corporation, with part of the funding earmarked for supporting MSMEs.

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THE BIG STORY ABROAD- Ukraine is back in the spotlight this afternoon, albeit with few material developments to speak of. The country’s eastern border is seeing yet more military build-up, with the Financial Times saying Ukraine is invoking former UK Prime Minister Winston Churchill’s “blitz spirit” as it deploys more forces on its border with Russia, while the Kremlin is denying that Russian President Vladimir Putin promised French President Emmanuel Macron there would be no further military action on the border, according to Reuters.

Also getting some digital ink: Chinese tennis star Peng Shuai walking back on her previous allegations that a former Chinese official [redacted] assaulted her, after allegedly disappearing for several weeks. Her denial coincides with the Beijing Winter Olympics. The Financial Times has the story.

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???? CIRCLE YOUR CALENDAR-

Inflation figures are due out this Thursday, 10 February. Annual urban inflation rose to 5.9% in December from 5.6% in November. While analysts we spoke with expect prices to continue rising, they don’t see them going outside the central bank’s target range of 7% (±2%) by 4Q2022.

The Finance Ministry has begun holding public consultations on the draft budget for next fiscal year with the next round due to take place on Thursday, 10 February at 5pm CLT.

German Foreign Minister Annalena Baerbock will be in town this Friday, 11 February for a two-day visit that will see her meet with Foreign Minister Sameh Shoukry and other officials for bilateral talks, the German Embassy in Cairo said in a statement. Baerbock is also expected to discuss potential collaboration between the two countries on the COP27 climate summit in Sharm El Sheikh this November.

Egypt will host the Arab League’s Arab Sustainable Development Week from Sunday, 13 February to Tuesday, 15 February. Held at Arab League headquarters in Tahrir Square and the Nile Ritz-Carlton, the forum will bring together ministers, senior officials, policymakers and private sector players from across the region to discuss ways to strengthen sustainable development. Arab League Secretary General Ahmed Aboul Gheit, Planning Minister Hala El Said, and IMF Executive Director Mahmoud Mohieldin are among those set to speak at the conference.

☀️ TOMORROW’S WEATHER- It’s going to be a slightly cooler (albeit still sunny) Wednesday afternoon, with the mercury peaking at 18°C during the day before falling to a nighttime low of 11°C, according to our favorite weather app.

Green startups stocks tumble following last year’s meteoric rise: Electric vehicle startups and several other green tech firms boomed in 2021, but warning signals that they were wobbling just months after going public have now developed into a full-fledged equity sell-off. A barrage of investigations into these companies — many of which went public via SPACs last year — and missed business targets have sent stocks down 75% or more, the Wall Street Journal reports. The about-face from investors is partially because of how they bought into these companies in the first place: The 2021 SPAC boom encouraged “frenzied buying” from small investors who were looking to buy into green companies they thought would help address climate change, the journal says. But it’s also fueled by shifting market dynamics as the US Federal Reserve’s hawkish turn, which the WSJ previously noted is causing a “turnaround in investor attitude” as they look to safer investments to brace against the imminence of tighter monetary policy.

Dreams of ever returning to an entirely in-person work week have all but disappeared among some of the world’s largest companies. JPMorgan Chase, Standard Chartered and Volkswagen are among some of Europe’s largest employers embracing hybrid working arrangements over the long term, according to Bloomberg. With some 68% of knowledge workers in rich countries preferring a hybrid work setup and some 95% indicating a desire for greater flexibility in work hours, according to a Future Forum survey, companies are finding it increasingly difficult to draw workers back to the office without an “impact upon motivation, [and it] will eventually lead to people leaving,” an official at the UK’s Chartered Institute of Personnel and Development says. Still, financial services companies like Goldman Sachs are sticking to their policy of working the full week in-person, which is expected to succeed because of the significant pay incentives these companies have to offer employees.

???? ON THE TUBE TONIGHT-

(all times CLT)

Catch Incendies while it’s still on Netflix: This gripping war-time drama from 2010 starring Lubna Azabal and directed by the great Denis Villeneuve left us an emotional wreck. Set in a fictional Middle Eastern company going through a civil war (with heavy parallels to Lebanon), the film tells the tale of Canadian emigree Nawal and her harrowing journey to flee war and sectarian violence in her home country. In parallel, the film is also a mystery charting her children’s trip back to find out who their father is and what the war did to their mother. The plot twist in the end is utterly gut-wrenching.

⚽ Al Ahly FC is hoping to make history tonight as it looks to qualify for the FIFA Club World Cup final match by beating Brazil’s Palmeiras in the semi-final at 6:30pm. Al Ahly has competed in the championship several times, but has never made it past the semi-final round. The club took home the bronze medal in the 2006 and 2020 editions of the championship (although the 2020 tournament was postponed to 2021 because of the pandemic). No African club has taken home the title since the championship first began in 2000, and only two have made it to the final round: Congo’s Tout Puissant Mazembe (2010) and Morocco’s Raja FC (2013).

If Al Ahly makes it to the final, it would be up against either Chelsea or Saudi’s Al Hilal SFC, which are battling it out in their own semi-final tomorrow at 6:30pm.

Meanwhile, it’s a new week in the Premier League: Newcastle and Everton meet at 9:45pm, while West Ham v Watford also kicks off at the same time. Burnley and Manchester United also play tonight at 10pm.

Don’t forget to update your Premier League Fantasy — the cutoff is 8:15pm today.

Finally, Roma and Inter go head-to-head at 10pm in Coppa Italia’s round of eight.

???? EAT THIS TONIGHT-

Feeling snackish but want to stick to something healthy? Foya offers a range of dried fruits and vegetables that promise to satisfy your peckish cravings for something crunchy or sweet, without the guilt of grabbing a pack of chips. The brand currently has dried apples, strawberries, broccoli, and — our personal favorite — pineapples, all of which have no added sugar or preservatives. Foya is sold at Blooms and Beans in Arkan, CSA and Lokali in Maadi, and 220 in Alexandria, or you can order online through their Instagram page.

???? OUT AND ABOUT-

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Zamalek Art Gallery kicks off three exhibitions today: Willpower and Nothing Else by Nathan Doss, When Magnolias Bloom by Neamat El Diwany, and Myself + Me by Hossam Dirar. All three exhibitions will be open every day except Fridays from 11am-8pm until Thursday, 3 March.

Violinist Ziad Yasser is performing at El Sawy Culturewheel in Zamalek tonight from 7:30-9:30pm. Tickets are available online here.

???? UNDER THE LAMPLIGHT-

The Last Slave Ship tells the story of 110 slaves brought to America half a century after the slave trade was outlawed. The book by Ben Raines starts out in 1860, just one year before the civil war broke out in the US, with the voyage of the Clotilda ship carrying 110 slaves trafficked from what is now Benin. It depicts the now-authenticated story of how these slaves who were brought to Alabama eventually established their own community at the end of the civil war, but their heritage and story were denied. The Guardian and the New York Times are each out with a review.

OUR ANALYST OF THE WEEK- Heba Monir, banking and financial services sector head at Arab African International Securities (LinkedIn).

My name is Heba Monir and I’m the head of the banking and financial services sector at Arab African International Securities. I studied economics and minored in political science at Cairo University, and got my first job in the field at Prime Holdings. I wasn’t an analyst when I first joined — I worked on the database until I proved my mettle, and then when I became a junior I would help our macroeconomic analyst with the data spread, which really helped me learn where to find the data I needed. In 2011, I started working with Monette Doss, who is now chief economist at HC Securities. In 2015, I had the chance to go to Ostoul Brokerage, where I became a research manager, and then I jumped to AAIS in 2018.

I mainly cover the banking sector but I also cover other finance stocks, such as EFG and CI Capital. Over time, I’m moving towards also covering fintech players, like e-Finance and Fawry.

The best part of my job is being able to correlate and link seemingly unrelated data points with each other to form the bigger picture. The nature of my focus area means that I look very in-depth at macroeconomic data to form a holistic view of the sector I cover. This really meshes well with how I like to think; I enjoy being able to sit down and really delve into the information at hand and then work my way up by finding connections and seeing the big picture.

The hardest part of my job is that I have to be up to date all the time. It can be really difficult because sometimes, you can miss an update, or there’s a development that you’ve never seen before, which requires a lot of research into comparable events in similar countries to understand what just happened and what it means. A lot of the time, you might not be able to find the information you need to fully understand the issue. But that’s the nature of the job — the upside to this is that it keeps you knowledgeable and widens your horizons.

My theory of investment is that where to invest depends on how much you want to invest in the first place. For example, if you’re looking to put your money in equities, it needs to be a substantial amount of investment to really feel the return. Bank certificates, by contrast, don’t really require as much capital because interest rates are high and they’re fixed for set periods of time, so the return feels more tangible.

The most important factor I look at before recommending an equity investment is the company or bank’s growth potential — all within the context of the bigger picture. The upside or downside potential is a reflection of the connections and correlations that exist in the overall environment, which I take into consideration in my estimates and fair value decisions.

I think the short-term outlook for the EGX is positive, even though trading volumes over the past several sessions have been relatively thin. But looking at the longer term and forming a solid outlook is difficult right now, because there are a lot of challenges and questions. One of the questions on analysts’ minds right now is whether we’re going to see monetary tightening from the Central Bank of Egypt this year as the global interest rate environment rises, which would be negative for the market.

The state privatization program will be very positive for markets, especially with the government’s recently announced plan to offer stakes in as many as 10 state-owned companies this year, at a rate of one offering every one to two months. Potentially the most positive impact from this plan would be the government making the announcement and then investors seeing the plan materializing, which would bolster confidence.

To be honest, I haven’t really had a lot of time to watch or read anything recently [laughs]. But when I do get a chance to read something, I prefer shorter reads that provide depth and get me thinking critically.

My time is usually split between my work and spending time with family and friends. I really enjoy working with my hands — I like to draw and work on handicrafts. I also love animals, so I take care of my dog and I like to take the time to feed stray dogs and cats whenever I can.

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The EGX30 fell 0.2% at today’s close on turnover of EGP 369 mn (65% below the 90-day average). Foreign investors were net sellers. The index is down 3.5% YTD.

In the green: Rameda (+2.5%), EFG Hermes (+2.2%) and GB Auto (+2.2%).

In the red: Fawry (-2.2%), Medinet Nasr Housing (-2.1%) and AMOC (-1.6%).