PM — Hump day ≠ news dump day

Good afternoon, wonderful people. It’s not quite a news dump day — as hump days tend to be — but it’s not what we would describe as a quiet day, either.

THE BIG STORIES TODAY

#1- East Port Said is getting a USD 3 bn green hydrogen hub: The Suez Canal Economic Zone has given H2 Industries, a German-based energy storage company, preliminary approval to develop a USD 3 bn waste-to-hydrogen plant in East Port Said, executive chairman Michael Stusch told the National. The plant will consume 4 mn tonnes of waste a year, between organic waste and non-recyclable plastic and in return will produce 300k tonnes of green hydrogen annually.

#2- Affirma Capital and StonePine are now minority owners of Nerhadou: Emerging markets private equity firm Affirma Capital and StonePine have purchased a “significant minority” stake in Egyptian pharma player Nerhadou International in a USD 20 mn transaction, according to a press release (pdf). The transaction is still subject to regulatory approvals, as well as meeting “certain conditions agreed between the parties.”

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

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

• Egypt will sell USD 5 bn in foreign currency bonds in FY2022-2023, in what will be our first bond issuance in international debt markets since September, Vice Minister of Finance Ahmed Kouchouk said yesterday.
• Ezdehar reaches USD 168 mn first close of EMF II fund: Private equity firm Ezdehar Management has reached the first close of its Mid-Cap Fund II (EMF II), overshooting its USD 100-120 mn target to book commitments totalling USD 168 mn.
• Qalaa Holdings’ Taqa Arabia is looking to make its EGX debut next year, depending on market conditions, CEO Pakinam Kafafi said. The offering would be a revival of Taqa’s initial plans to IPO back in 2020, which covid derailed.

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HAPPENING NOW- The House Local Administration Committee is looking into the effects that implementing the law regulating parking attendants (sayess) has had on improving traffic flow and creating revenue streams for state coffers.

THE BIG STORY ABROAD- Everybody’s gaze is fixed firmly on Ukraine, where a slew of foreign leaders are scheduled to arrive over the next several days in a show of support for Kiev in the face of what increasingly appears to be an imminent invasion from Russia. UK Prime Minister Boris Johnson, Turkish President Recep Tayyip Erdogan, and the foreign ministers of Germany and France are among those flying to the Ukrainian capital in the “flurry of diplomatic activity” in a bid to reach a detente, the Wall Street Journal reports. Meanwhile, Ukrainian President Volodymyr Zelenskiy signed off on a decree earlier today to bolster the country’s military over the next three years, according to Reuters.

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First look at this year’s Nobel Peace Prize nominees: A few names have been thrown in the hat for the Nobel Peace Prize this year from Norwegian lawmakers — whose nominees often end up being laureates, according to Reuters. British nature broadcaster David Attenborough and Greta Thunburg are nominated for their contributions to environmental movements while the World Health Organization is getting a nod for its work during the pandemic. On the political front, nominees include: Jailed Russian dissident Alexei Navalny and the Myanmar National Unity Government formed by opponents of last year's coup, among others. Other nominations include Pope Francis, the International Criminal Court in the Hague, WikiLeaks and whistleblower Chelsea Manning, NATO, aid organization CARE, and the Arctic Council. The 2021 Laureate will be announced in October.

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FOR TOMORROW- OPEC+ will meet tomorrow, when the cartel is expected to agree to another gradual oil production increase of 400k barrels per day — continuing a strategy that has so far failed to meet the recovery in demand as several member countries struggle to up their output.

???? CIRCLE YOUR CALENDAR-

Key news triggers to keep your eye on:

• Interest rates: The Central Bank of Egypt will hold its first policy meeting of 2022 on Thursday. All analysts surveyed in our regular interest rate poll expect the CBE to keep rates on hold, as they anticipate our rates continuing to attract portfolio inflows even amid Fed tightening and global inflationary pressures.
• PMI: January PMI figures for Egypt, Saudi Arabia, and the UAE are also due out on Thursday.
• Foreign reserves figures for January should be out from the Central Bank of Egypt before the week is out.
• Inflation: Inflation figures for January will be released next Thursday, 10 February.

From our friends at the US embassy: Women can now apply to join 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.

ALSO- The embassy is now accepting applications for Cultural Property Agreement Implementation projects that would help Egypt protect cultural property from looting, theft, and illicit trafficking. The guidelines state that concept notes should be sent in by this Thursday, 3 February, while shortlisted applicants will need to submit full applications by 4 May. Each project will receive USD 50-100k, with around USD 500k earmarked for the entire program.

The Cairo International Book Fair continues today at the Egypt International Exhibition Center. The event runs through to next Monday, 7 February.

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

☀️ TOMORROW’S WEATHER- Expect a daytime high of 20°C and a nighttime low of 10°C tomorrow, our favorite weather app tells us.

Omicron is slowing down the resolution of the global supply chain crunch, which World Trade Organization head Ngozi Okonjo-Iweala still sees as temporary, despite the anticipated recovery taking longer than expected, according to the Financial Times. The new variant has halted some production and transport in China, and impacted global travel, Okonjo-Iweala said. The path to recovery will resume this year as global demand for goods will be hit by inflation and the widespread easing of pandemic-driven fiscal support, while shipping companies are investing more in supply capacity, she says.

Higher costs may squeeze developing economies: Countries with smaller volumes of trade are at risk of being cut out of long supply chains if transport costs remain high, Okonjo-Iweala says, noting that some structural issues in global supply chains may also persist. The WTO will hold a summit in March bringing together shipping, logistics and trading companies, ministers and trade experts at a meeting in March to discuss how to ease persistent blockages, she adds.

Egypt has felt the supply chain crunch acutely, as the hit to goods has ranged from microchip shortages weighing on our automotive industry, to soaring wheat prices delivering steep import bills, to cost crunches hitting our renewables.

But inflation remains under control, with analysts and economists expecting it to remain within the Central Bank of Egypt’s 7% (+/- 2%) target range, even as it is anticipated to accelerate over the next few months as rising oil and food prices filter through to the local economy.

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Against a backdrop of lockdowns, and a diplomatic boycott, Beijing’s Winter Olympics will kick off this Friday. With an opening ceremony at Beijing’s National Stadium, the games begin as covid infection rates in China continue to surge, while at least eight countries — including the US, UK, Australia, and Canada — are boycotting the games over accusations of abuses in China’s Xinjiang region and tennis star Peng Shuai’s alleged disappearance. Other countries have opted to have their diplomats sit out the Olympics because of covid.

The games will coincide with Chinese New Year, which begins today, and will run through February 20, followed by the Paralympic Games, which will run from March 4 to March 13.

The games will feature 109 events in seven winter sports, including the biathlon, bobsledding, curling, ice hockey, luge, skating, and skiing. It will also feature seven new winter Olympic events.

The opening and closing ceremonies will be held in central Beijing. Beijing is also set to host all Alpine skiing and sliding events, while skiing destination Zhangjiakou’s Chongli district will play host to the rest of the snow events.

???? ON THE TUBE TONIGHT-

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Football stars (and their girlfriends) are getting a ton of shows on Netflix: Neymar — quintessential football star who has lent his skills to top clubs such as Barcelona and PSG, and the Brazilian national team — reveals his story in a three-part Netflix series titled Neymar: The Perfect Chaos. The docuseries looks at Neymar, who is often in the limelight for his flamboyant clothing and bad boy attitude (and the always-interesting hairstyles, of course), through interviews with him and his teammates to delve into his personality off the pitch. Meanwhile, I Am Georgina takes a different approach, following Georgina Rodriguez — the girlfriend of legendary footballer Christiano Ronaldo. The six-part series takes on a reality TV show vibe, displaying her luxurious life, mansions and jets included. Rodriguez herself is a model and influencer and the show captures her lifestyle, traveling, shopping, family and some guest appearances from Ronaldo to show off their relationship.

⚽ Today marks the end of the first round of the Egyptian League Cup and we will soon know the four teams that qualify for the semifinals. There are three matches in the third group, all of which start at 5pm: El Zamalek meets Al Gaish in a match whose outcome does not matter to both teams, who are too far from the top to qualify. Ghazl El Mahalla, the leader of the group, meets Ceramica Cleopatra, while Pharco and Enppi (who shares the lead, but with fewer goals) also go head to head.

There’s a lot of competition from the three groups to snag the fourth qualifying spot: The way the league works is the first team in each group qualifies directly to the semi-finals, along with the club with the most points after the top three. For Ghazl El Mahalla and Enppi, the victory of one of the teams and a tie or defeat of the other qualifies the team directly to this fourth spot, while the victory of the two teams could still qualify one of them for the next round. This would come at the expense of Al Ittihad who are awaiting today’s results after beating Future yesterday and raising their score to 11 points (the highest scoring team so far). A ‘W’ from Ghazl El Mahalla or Enppi — with 8 points each — will raise their score to 11 points as well.

???? EAT THIS TONIGHT-

Sheikh Zayed residents, we found your next favorite breakfast spot: Cult is a haven for bagel lovers, serving sweet and savory bagels with a myriad of spreads. Their savory bagel offerings include plain, cheese, and jalapeno and cheese, while their cinnamon sugar bagel is a bestseller. You can stick to the classic cream cheese spread, or you could go for turkey or salmon with arugula and vegetables. Cult also has sandwiches such as tuna salad, caprese, and roast beef with blue cheese. You can also get an açai bowl or build your own stack of pancakes for a sweet and delicious breakfast. Finally, as all breakfast places must, Cult has a ton of drinks from coffee to matcha and hot chocolate.

???? OUT AND ABOUT-

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Egyptian Project is taking the stage tomorrow at Cairo Jazz Club 610, playing their mystical folk tunes at 9pm.

Mahraganat singer 3enaba is performing tomorrow at 7pm at Zamalek Theater.

???? UNDER THE LAMPLIGHT-

How to use scenario planning to make important business decisions: Using Scenarios: Scenario Planning for Improving Organizations by Thomas Chermack looks at how execs can implement scenario planning — which he argues can be used in everything from strategic planning and financial modeling to crisis response — in their own businesses. Chermack goes beyond theory and uses solid examples and guidelines to map out how scenario planning can be used to adjust strategies and action plans across different industries. This kind of managerial thinking will help businesses react quickly, anticipate major changes, and identify potential growth, he argues.

OUR ANALYST OF THE WEEK- Salma Gemiei, investment banking analyst at CI Capital (LinkedIn).

My name is Salma Gemiei and I’m an investment banking analyst at CI Capital. I studied actuarial science at AUC because I was always into numbers, business, and economics so it seemed like the perfect major that combined everything. After I graduated I realized that I didn’t want to go into the ins. field — which is the path most actuarial graduates follow — so I tried out investment banking instead during an internship. I really found myself in that line of work and I began my career at Beltone as an analyst and then a senior analyst before moving to my current position at CI Capital.

The best part of my job is that it’s dynamic. You do something different every week, even if you’re working on the same sector. There are so many different aspects you look at, from the company’s business operations and legalities all the way to how you would IPO or sell it. It really encompasses so many different things that you might not have gotten access to otherwise.

The worst part of my job is the long hours and stress. Long hours really do go hand in hand with investment banking [laughs]. It's also very fast-paced in the sense that a lot of requests are short notice and you just have to crank it out. However, I guess that’s part of what makes the job dynamic and fun in the first place.

I think non-banking financial services and healthcare are going to be attractive sectors this year. In general, there’s a lot of interest in NBFS, whether it’s in fintech, leasing, or microfinance. Meanwhile, in healthcare we’re still seeing a gap between supply and demand in the market. Seeing this, I think there’s a lot more room for these sectors to grow in 2022.

Covid has made us assess sectors differently. It differs from sector to sector, but there are factors and scenarios that we wouldn’t have posed before the pandemic. For example, while healthcare has always been defensive, covid actually had a negative impact on the sector at the beginning of the pandemic as the volume of visitors decreased, but it has since rebounded of course. The same happened with the education sector where we had to look at how the spread would impact teacher and student attendance or force teaching to go online.

My theory of investment is that there has to be a balanced risk appetite. The saying is true, “the greater the risk, the greater the reward,” but you also have to be comfortable with your investment. That comes by understanding the company and its fundamentals really well and making sure that your investment is well-founded.

The most important factor I look at before deciding on an investment is the management. Management really drives everything in the end. The business plan is only as good as the management that is able to implement it. We also pay a lot of attention to the internal rate of returns.

I’m hopeful about the EGX’s performance this year given the IPO and equity capital market momentum generated in 2021 and the strong market demand the offerings CI Capital worked on generated despite less-than-favorable market conditions. This, coupled with the fact that the market has yet to price in the resilient earning performance of Egyptian companies and the current low trading valuations, are supporting a possible EGX recovery in 2022.

I think the introduction of SPACs and the new bonds will be positive for the financial markets. The market is looking for more activity and liquidity and these new rollouts can generate excitement around the EGX. From a marketing standpoint, having the inclusion of more innovative products could also attract more funds to the bourse.

The last great thing I watched is Legally Blonde. I feel it depicts a woman successfully overcoming being in a male-dominated industry. That is something I’ve personally dealt with during my professional career. There are more women in the financial industry now and CI Capital has a lot of women in top management positions, which is something I really like about the firm. However, we still go to a lot of meetings with companies from different sectors and often you can be the only woman in the room.

I’m currently reading Bn USD Whale. It talks about a man who managed to steal bns from an investment fund over the span of years without regulatory bodies taking notice. It’s really good so far.

During my downtime, I like to destress [laughs]. I usually go out with family or friends and just try to immerse myself in something that isn’t work-related.

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MARKET ROUNDUP-

The EGX30 rose 1.0% at today’s close on turnover of EGP 782 mn (28.4% below the 90-day average). Local investors were net buyers. The index is down 2.9% YTD.

In the green: Orascom Development Egypt (+5.8%), Qalaa Holdings (+5.2%) and Palm Hills Development (+3.6%).

In the red: CIRA (-2.9%), TMG Holding (-2.0%) and Egypt Kuwait Holding-EGP (-1.2%).