Tuesday, 29 September 2020

Egypt could take its inaugural sovereign green bond issuance to market as soon as today

TL;DR

What We’re Tracking Today

Happy hump day, friends. Two more to go until we hit the weekend. In the hurly burly of business (to say nothing of the nuttiness that is covid and the travel restrictions that have accompanied it), it is easy to forget to be grateful. Grateful that covid-19 genuinely seems to have spared Egypt the ravages it has brought to other countries. Grateful, as we approach the four-year anniversary of the float of the EGP, that we have a functioning market for foreign exchange. Grateful that remittances are holding up remarkably after the doomsday predictions of this past spring — and grateful that rolling electricity blackouts have gone the way of the black market for FX.

We have miles to go before we sleep, as Mr. Frost told us nearly 100 years ago, but it helps to keep things in context as you slog through that 2021 strategy presentation or the budget figures that back it.


Global stocks surged yesterday after weeks of nervy trading: European shares had their best session since June, with the pan-European Euro Stoxx closing 2.2% higher and the German DAX finishing 3.2% in the green. Across the Atlantic, bank shares led the S&P 500 to gain 1.6% in it’s best day of trading in two weeks.

But El Erian is here to tell us not to get too excited: The recent volatility in the stock markets should serve as a reminder to investors that record valuations are not indicators of a global economy achieving escape velocity from its historic contraction earlier this year, Mohamed El Erian writes in the Financial Times. The stimulus high is wearing off, governments are reluctant to step in with new fiscal support, and the “deeply distorted” nature of the markets makes it difficult to protect portfolios should another major sell-off occur.

Either way, markets look interesting with the US on track for the biggest 3Q IPO wave since the height of the dot-com boom: Some 81 companies will have listed on US stock exchanges by the end of this month, raising around USD 28.5 bn and making 3Q2020 the biggest third quarter since 2000, MarketWatch writes, citing RenCap’s CEO Bill Smith. Secretive data mining firm Palantir and workplace collaboration software company Asana will both go public tomorrow in the first direct listings of the year.

Asian shares are mixed in early trading this morning, while futures suggest Europe and Wall Street are on track to open in the green later today.


So, what’s on the agenda for the rest of the week?

The country’s mobile network operators are set to find out in the coming days who will be awarded new cellular frequencies in the wake of the auction organized by the National Telecommunications Regulatory Authority (NTRA) earlier this month, Al Mal reports, citing unnamed NTRA sources. The regulator earlier this month opened bidding for 40 MHz of bandwidth for USD 600 mn and another 20-MHz band for USD 300 mn. Vodafone Egypt and Telecom Egypt both submitted offers in the sale, while Etisalat Misr and Orange Egypt sat it out.

EFG Hermes’ virtual investor conference will wrap up on Thursday. You can visit the conference website here.

Key news triggers as we approach the beginning of a new month — Thursday is the first day of October.

  • September PMI reports for Egypt, Saudi Arabia, and the UAE are due out next Monday, 5 October.
  • Foreign reserve figures for September should be out next week.
  • Inflation data for September will land on Saturday, 10 October (the next meeting of the CBE’s monetary policy committee isn’t until mid-November).

Also: Our readers in Egypt are set for a three-day long weekend starting Thursday, 8 October as we observe Armed Forces Day. The holiday is officially 6 October, but will be observed on the Thursday under the Madbouly government’s (eminently sensible) plan of moving mid-week holidays other than Eids to fall on Thursdays. Having said that, Ala Mas’ouleety’s Ahmed Moussa took to the airwaves to plead with Madbouly not to give in to common sense and instead leave the holiday on 6 October (watch, runtime: 6:15).


SIGN OF THE TIMES #1- Top execs in Egypt and France top the list of those most likely to make lasting lifestyle changes that will include more exercise, a better diet and maintaining a WFH component to their schedule, according to a Reuters poll. That’s the moral of the WFH story for management: permanently reducing work hours and spending more time with family after remote work and a forced slowdown forcibly brought many to reassess what a healthy work-life balance should look like as some eight out of 10 corporate executives reported poor mental health during lockdown.

SIGN OF THE TIMES #2- The number of e-payment cards in use rose 7% in the first six months of 2020, rising to 39.6 mn from 36.7 mn at the end of December, according to official data (pdf). The figure includes credit cards, debit cards and prepaid cards. There were 18.28 mn prepaid cards in use by the end of June.

SIGN OF THE TIMES #3- Saudi Arabia has confirmed this year’s G20 summit will be held online. The summit will take place 21-22 November and was originally due to be hosted in Riyadh.


The Health Ministry reported 115 new covid-19 infections yesterday, up from 104 the day before. Egypt has now disclosed a total of 102,955 confirmed cases of covid-19. The ministry also reported 18 new deaths, bringing the country’s total death toll to 5,901. We now have a total of 95,586 confirmed cases that have fully recovered.

Egypt is first in line among African countries to receive a Chinese vaccine against covid-19, China’s ambassador in Cairo Liao Liqiang said during an online seminar earlier this week, the local press reports. A Chinese-developed covid-19 vaccine is currently in phase three clinical trials in Egypt. Production is set to begin after results from the two month long trials have been processed and a one year “follow up period” completed. We have the latest on the clinical trials in Egypt in this morning’s talk show coverage, below.

The global death toll breached the 1 mn mark overnight and currently stands at 1,000,555, according to Johns Hopkins University’s global tally. The WHO believes the actual death toll is significantly higher, CNBC reports, pointing to an earlier study by Yale University that found US covid-19 deaths had possibly been undercounted by as much as 28%.

The World Health Organization will roll out 120 mn affordable covid-19 antigen tests to help developing nations bridge the testing gap with richer countries, the organization said yesterday, according to the Associated Press.

enterprise

Siemens Energy IPO wobbles on Frankfurt debut: Siemens spin-off Siemens Energy saw its shares dip by 13% on the first day of trading on the Frankfurt stock exchange before recouping some of its losses to close 3.6% lower than its opening price of EUR 22, Bloomberg reports. The IPO, which saw the largest corporate spinoff in Germany’s history, comes at a time when economies are transitioning toward “greener energy sources,” affecting coal and gas-turbine businesses, the business information service suggests. Siemens recently decided to execute the spinoff in a bid to grow its separate smart buildings, mobility and factory automation businesses, selling more than 55% of Siemens Energy’s shares on the stock exchange.

The Siemens IPO has a big Egypt link: In Egypt, Siemens is involved in several energy projects, including three giant combined-cycle power plants it built and operates. The ownership of the mother company’s Egypt assets will be transferred to the spinoff arm, but this process is yet to be completed, Siemens Energy said in its IPO prospectus (pdf). All of Siemens Energy’s operations abroad were already carved out from the parent company in March through the setup of new country-specific companies or through empty shell companies, reads the prospectus. The actual transfer of those businesses, however, is still pending local registration procedures and approval of several third parties, it adds.

Emerging markets have piled up a collective USD 100 bn of debt from pandemic-induced borrowing that is fueling an “unsustainable” situation, after governments skirted short-term fiscal catastrophe in exchange for long term debt unsustainability, the Financial Times says. Already straddled with debt obligations before the pandemic, EMs turned to more borrowing — and found plenty of investors willing to bite. Analysts are now concerned that the lasting impact of the pandemic will begin to “really sink in” and make repayment more difficult for EMs.


US Secretary of State Mike Pompeo is in Greece for a two-day trip aimed at cooling EastMed tensions, reports Reuters. Pompeo and his Greek counterpart Nikos Dendias called for a peaceful resolution to Athens’ conflict with Ankara, according to a joint statement. Turkey and Greece’s relationship is on the mends with both countries agreeing to restart talks in Istanbul soon.

A war is brewing in the Caucasus: Border clashes between Azerbaijan and Armenia in the disputed Nagorno-Karabakh region is threatening to escalate into an all-out war, NPR says.


US ELECTION WATCH- Joe Biden has attacked President Donald Trump as a tax dodger, after the New York Times released information on the president’s tax returns it was able to obtain that showed, among other revelations, that he paid no taxes for 11 years and only a paltry USD 750 in 2016-2017. The Biden campaign released an ad comparing the average annual taxes paid by various professionals compared to those made by the White House occupant (watch, runtime: 0:31).

It’s the first battle of the septuagenarians tonight: Live from Cleveland and moderated by Fox News, the first bout between King Cheeto and Sleepy Joe promises to feature plenty of discussions on Trump’s tax affairs, the tussle over the Supreme Court, and the government’s response to the pandemic. You can stream it online at CBS and CNN.

 

Enterprise+: Last Night’s Talk Shows

*** Fans of Lamees El Hadidi rejoice: She’ll be back on air soon with ON TV’s “The Last Word” airing Tuesdays-Saturdays at 9pm.

It was a packed night on the airwaves last night: The Libya conference in Hurghada, covid-19 vaccine trials, the upcoming parliamentary elections, and the cabinet’s decision to relax some of the restrictions on construction all got attention.

Libyan security delegation convenes in Hurghada: Al Hayah Al Youm’s Mohamed Sherdy covered the meeting in Hurghada of a delegation of security officials from Libya held under the auspices of the United Nations (watch, runtime: 0:47). The talks brought together representatives from the Tripoli-based Government of National Accord and the General Khalifa Haftar-led Libyan National Army to lay the groundwork for upcoming peace talks in Geneva. Ala Mas'ouleety's Ahmed Moussa also covered the meeting, speaking with Khaled Al Mahjoub, the spokesman for the Tripoli operations room of the Libyan National Army. He said that holding the talks in Egypt is a positive step as they will focus on Egypt’s roadmap to peace dubbed the Cairo Declaration (watch, runtime: 11:00).

Health minister joins vaccine trials: Sherdy spoke with Health Minister Hala Zayed after she enrolled herself in a covid-19 vaccine trials. Zayed said that, of the 40k total volunteers, none had shown side effects. Zayed some 6k participants from Egypt have been enrolled in the trial in which she’s participating, wirth 1k of them having so far taken the vaccine (watch, runtime: 2:57). El Hekaya’s Amr Adib spoke by phone with Zayed, congratulating her on her participation in the trials. Zayed said the data on side effects was reassuring, and went on to discuss safety measures at schools ahead of the academic year. She also reminded citizens to get their flu shots ahead of the winter season (watch, runtime: 21:25). Moussa also covered the trials (watch: runtime: 3:07).

Election authority releases initial list of candidates standing in parliamentary elections: Sherdy covered the news that the National Elections Authority published an initial list of candidates ahead of next month’s parliamentary elections. The authority has accepted 4,006 individual candidates and eight lists and will announce the final list on 5 October after giving time for candidates to lodge appeals (watch, runtime: 3:31). Dozens of candidates failed to make the ballot for reasons including incomplete applications and unresolved military statuses (watch, runtime: 4:23). Masaa DMC’s Eman El Hosary also covered the topic (watch, runtime: 0:56).

How do you buy a bank? Adib discussed the process by which banks are acquired, Naguib Sawiris suggested that Orascom Financial Holding could make a play for United Bank. (watch, runtime: 2:40). He spoke with Prime Holding’s head of research Amr El Alfy, who ran through the relevant articles in the newly issued Banking Act. El Alfy said that any individual could own up to 10% of a bank provided the central bank agrees they’re a fit owner. He added that there are no foreign ownership limits on banks, although any foreign entity taking a significant stake in an Egyptian bank needs to demonstrate experience in the industry (watch, runtime: 3:19).

(Amr used an Enterprise story on the subject to illustrate his segment, which made us smile.)

New railway fees: Moussa spoke with Ashraf Raslan, the head of the Railways Authority, who discussed the 25% increase in fees for transporting goods, which will be calculated according to the weight of goods and distance travelled. He stressed that they would not apply to passengers’ personal luggage (watch, runtime: 13:03). The Egyptian National Railway does not move a significant volume of freight, so the fee hike should not have a significant impact on businesses or prices.

Construction restrictions relaxed: Cabinet Spokesman Nader Saad phoned in to Masaa DMC (watch: runtime: 8:03) and Ala Mas'ouleety (watch, runtime: 23:25) to discuss the government’s decision to lift some of the restrictions on construction permits. He said that the decision to stop construction for six months helped the government improve urban planning. Saad pointed out that, starting from today, citizens who have obtained a valid license will be allowed to finish construction provided the building is no more than four storeys high.

NGOs to help paying reconciliation fees: Salet Al-Tahrir’s Azza Moustafa phoned Talaat Abdel Qawi, the head of the General Union of Non-Governmental Associations and Institutions, who said that the associations are keen to help the neediest citizens to pay their reconciliation fees, but said that NGOs have not set a specific amount to contribute (watch, runtime: 8:51).

Speed Round

Egypt could take its debut sovereign green bond issuance to market as soon as today, Bloomberg reported yesterday. The USD 500 mn offering of five-year bills will take place depending on market conditions, the business information service says, citing a person familiar with the matter. This comes a day after the Finance Minister Mohamed Maait said the ministry was “preparing to launch” the offering, which would be the first sovereign green bond issuance in both Egypt and the region. Egypt currently has a USD 1.9 bn portfolio of green projects as it looks to capitalize on growing investor appetite for climate-friendly securities.

FinMin confirms investment banks managing the offering: A Finance Ministry document picked up by Reuters said that Credit Agricole, HSBC, Citibank, and Deutsche Bank — who were tapped earlier this year to manage and market the offering — will organize calls with investors ahead of the sale.

The government is offering green bonds as part of its broader debt diversification strategy, which will also see it offer sukuk, eurobonds, and potentially zero-coupon bonds to capture a wider investor base. The strategy also entails a shift towards longer-term borrowing, in order to reduce our reliance on short-term debt instruments, plug fiscal deficits, and help reduce the annual debt servicing bill to 20% of GDP. The goal is for long-term debt to constitute some 52% of borrowing by June 2022.

Car sales continued to rebound in August from a slump in sales during the second-quarter covid-19 lockdown, according to industry data released yesterday. Figures from the Automotive Information Council (AMIC) show that vehicle sales rose 13% to 20.8k, up from 18.3k in July. Sales were up more than 40% on an annual basis from 14.6k in August last year.

Passenger cars lead the recovery: Sales of passenger cars surged more than 25% last month to almost 16k vehicles from 12.5k in July and 10.7k in August 2019. Sales volumes of passenger cars fell by as much as 26% during the Madbouly government’s partial lockdown of the economy, which caused dealerships to close and consumer demand to fall.

Bus, truck sales fall: Bus sales were down by a third to 1.6k units compared to July on seasonal factors, but rose 11.1% on an annual basis. Truck sales also slipped to 3.2k vehicles from 3.3k in July, but were up 29.5% from August last year.

M&A WATCH- Al Tayseer Healthcare Group is seeking full ownership of Mansoura Medical Center, in which it currently holds a 20% stake, Al Mal reports, citing unnamed sources. Al Tayseer is now reportedly looking to buy the remaining 80% stake, which is owned by two unnamed private investors. The acquisition comes as part of the healthcare group’s EGP 700 mn expansion drive announced early this year, which includes the acquisition of an unnamed hospital in Northern Egypt and a EGP 200 mn expansion of their Zagazig hospital. Ezdehar Egypt Mid-Cap fund acquired a minority stake in Al Tayseer earlier this month, saying that the acquisition is meant to support the group’s investments in hospitals and labs.

INVESTMENT WATCH- Lab outfit Speed Medical (SPMD) plans to invest some EGP 330 mn in expansions and acquisitions through 2022, Chairman Mahmoud Lasheen tells Al Mal. The company has earmarked EGP 200 mn to more than double its network of branch labs to 200 by the end of 2022, and another EGP 50 mn to acquire existing labs. SPMD is investing another EGP 52 mn to complete its new hospital in Obour, while another EGP 30 mn is earmarked for specialized clinics, Lasheen said, without specifying whether that was to expand capacity or add new offerings. The company had planned to invest EGP 160 mn in 2020.

Where will the financing come from? The Nilex-listed company plans to raise EGP 150 mn through a capital increase (pdf), which began yesterday and runs until 29 October. This capital increase — the second of two planned increases — should allow SPMD to make its long awaited move to the EGX from the small-cap Nilex, where it is currently listed. The remaining EGP 180 mn will be self-financed from its profits as of this year.

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Construction ban partially relaxed: Contractors and real estate developers will now be permitted to resume construction on buildings that are no higher than four storeys after the government yesterday relaxed some of the construction restrictions introduced in May. The exemption applies only to companies that have already obtained the required building permits, Prime Minister Moustafa Madbouly said following a meeting with local governors and the local development minister. The decision comes a day after President Abdel Fattah El Sisi called on the government to end the six-month ban and introduce new building regulations as soon as possible.

Steel companies are complaining: The ban has caused demand for steel billets and building materials to plummet 40-50%, an industry figure tells the local press.

Background: The government imposed in May a six-month ban on construction permits in urban centers, including Greater Cairo and Alexandria, after President Abdel Fattah El Sisi ordered the government to halt construction in response to ongoing building code violations. All ongoing construction of private housing was also halted until owners present plans that meet legal requirements, such as allowing for enough parking spots. The decision came after parliament approved in March the Unified Building Code, a long-awaited piece of legislation that gave the government sharper teeth to clamp down on illegal construction

REGULATION WATCH- Mortgage finance companies can now lend up to 15% of their capital base to an individual household, up from 10% previously, Financial Regulatory Authority (FRA) boss Mohamed Omran said in a statement (pdf). Data has shown that most families opt for mortgages to purchase larger homes in state-sanctioned social housing projects, but smaller mortgage finance players were unable to hand out loans for these purchases without exceeding the original limit. Mortgage finance players will also be able to dole out up to 30% of their capital to households seeking mortgages for non-residential properties, up from a previous 20%, Omran added. The authority decided to scale back the restrictions on portfolio concentration for mortgage providers after reviewing this data and the regulations with the Egyptian Mortgage Federation.

Other restrictions for mortgage lenders: Under the executive regulations of the Mortgage Finance Act, mortgage lenders are only allowed to take on debt up to 25x their equity base as a risk management precaution, and maintain a capital adequacy ratio of 12% and a level of liquidity of no less than 10% of current liabilities, Omran said.

The FRA also approved in principle the creation of a “real estate guarantee registry” through an amendment to the Mortgage Finance Act, Omran announced. The registry will be administered by the regulator and will contain information on real estate transactions, including data on guarantee providers and any write-offs made by financiers, to better protect all parties involved.

In other mortgage finance news: Heirs can now claim ownership of social housing applications submitted by deceased individuals before their death, under new Housing Ministry rules cited by Al Shorouk. This is a new service introduced through the Mortgage Finance Fund’s online portal, which also now allows homebuyers to submit proof they’ve paid installments in case their lenders suspend credit due to outstanding payments.

enterprise

STARTUP WATCH- Online fashion rental service La Reina raised an undisclosed six figure seed funding round from Algebra Ventures, 500 Startups, and unnamed angel investors, according to a press release (pdf). The funds will be used to finance the launch of the company’s new fashion subscription service “The Box” — a weekly package of clothes to be worn and returned the next week, which La Reina co-founder Ghada Eltanawy says will decrease each subscriber’s fashion footprint by up to 85%. La Reina had previously raised USD 1 mn in series A funding from Algebra Ventures and 500 Startups in 2018. La Reina’s sustainable approach to retail fashion and innovative business model saw Eltanawy named one of Forbes’ most influential women behind online brands in the Middle East in 2020.

EARNINGS WATCH- Al Ezz Dekheila Steel (EZDK) reported consolidated net losses of EGP 1.2 bn in 2Q2020, compared to EGP 648 mn in 2Q2019, according to its latest earnings (pdf). The company reported losses of EGP 1.1 bn in 1Q2020.

CORRECTION- 27 September 2020 

An earlier version of this story incorrectly reported these financials as belonging to Ezz Steel instead of Al Ezz Dekheila Steel. 

Egyptians abroad have until 10 October to register to vote in the upcoming parliamentary elections. Expats from 14 governorates will go to the polls on 21-23 October in the first phase of voting while the remaining governorates will vote on 4-6 November. Voters abroad will need to register via the National Election Authority’s (NEC) website to cast a ballot. Check out our calendar below for a reminder on which governorates vote when.

The election authority released a preliminary list of candidates yesterday, featuring 4,006 individual candidates and eight lists. Those who have failed to make the list have three days to appeal, before the Administrative Court deliberates for another three days. The final list of candidates will be announced on 5 October.

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Enterprise Explains

Enterprise Explains: PIPEs. After debuting our weekly Explainer series last week with a dissection of the SPAC (if you still don’t know what that means, go read our piece here), a look at the PIPE seemed like a natural follow-up. PIPEs and SPACs are in many ways kindred spirits, and not just because both are obscure to those unfamiliar with the nitty-gritty of the financial markets: Each provides a (very different) shortcut for businesses wanting to raise money and investors eyeing faster returns. For this reason, both SPACs and PIPEs have turned out to be appealing options during these economically troubled times.

So what’s a PIPE? Standing for private investment in public equity, PIPEs do exactly that. Large institutional investors — think private equity groups, hedge funds, sovereign wealth funds, and other asset managers — acquire common or preferred stock in publicly-traded companies, not by purchasing listed shares but via a private placement. It’s not just shares we’re talking about here either. Equity-linked derivatives, such as options and convertible equity, can also be bought in a private placement.

Businesses like them because they get quick, easy access to capital: Compared to secondary share offerings, there are fewer regulatory hoops businesses have to jump through before they can sell equity to private investors. This makes them cheaper and less time-intensive than more traditional avenues, allowing them to access capital typically within two to three weeks.

This makes them particularly popular with smaller or distressed firms: Research (pdf) has found that 90% of companies opting for private investment in equity have a sub-USD 1 bn market cap and a median book asset value of just USD 51 mn. Moreover, the majority of firms have junk-rated credit and operate at a loss.

It wasn’t hard to see the appeal of PIPEs earlier this year: Think back to March. Stock markets were in freefall, the credit markets froze and companies desperate for liquidity found themselves with few options. No sane company would sanction secondary share offerings amid historic declines in the global equity markets, and few investors were in the mood to gamble on risky corporate debt. That’s when PIPEs become an attractive option for businesses in western markets. Unable to raise capital via bond issuance or share offerings and reliant on existing credit lines, some companies turned to private investment to access the funding they needed to see them through the crisis. Before the middle of the year, PIPE investments had already exceeded the USD 35-40 bn that is invested on average in a full calendar year.

Investors like them because they get to snap up equities at a discount rate. Stakes are usually sold at a discount to the market price as a sweetener to investors facing a lock-up period preventing them from immediately selling their shares.

Image of the Day

Electric automaker Xpeng unveiled a prototype for a flying car at the Beijing Auto Show on Saturday, CNBC reports. Still in the concept phase, the Ali Baba-backed company displayed the drone-looking vehicle, which can carry two passengers and fly at an altitude of 5-25 metres.

Egypt in the News

The 50th anniversary of Nasser’s death is topping coverage in the foreign press this morning: Jacobin calls him a “towering figure who left an ambiguous legacy,” AFP looks back at his funeral, and Gulf News carries a photo gallery of some of the most pivotal moments during his presidency. Meanwhile, Reuters has picked up a report on arrests since self-exiled contractor Mohamed Ali called for protests on 20 September.

Why are Egypt and Ethiopia not making progress on GERD? “Egypt is pursuing an agreement based on a simple and mutually beneficial quid pro quo … Ethiopia’s objective, however, is to exploit these negotiations to assert control over the Blue Nile … and to reconfigure the political topography of the Nile Basin,” Foreign Policy suggests in its latest piece on the dispute.

Diplomacy + Foreign Trade

The Libya peace conference that took place in Hurghada yesterday is topping diplomatic coverage this morning. We have coverage in Last Night’s Talk Shows, above.

Elsewhere: Foreign Minister Sameh Shoukry held talks with senior Palestinian Authority figures in Cairo yesterday, days after rival factions Fatah and Hamas agreed to hold elections for the first time in 15 years. The two sides discussed recent efforts to resolve the longstanding dispute between Fatah and Hamas, and Shoukry reiterated Egypt’s support for a Palestinian state, the Foreign Ministry said, without providing further details.

Energy

Emirati consortium eyes USD 500 mn wind farm in Egypt’s Gulf of Suez

A consortium of unnamed Emirati companies is planning to set up a USD 500 mn, 500 MW wind farm in Gulf of Suez, Al Mal reports, citing Electricity Ministry sources. The New and Renewable Energy Authority (NREA) has allocated the land for the station, which will be constructed under a build-own-operate (BOO) framework. The consortium is currently working on feasibility studies for the project, which will take two years to complete before work begins.

Infrastructure

Egypt to soon inaugurate first 230 km of new Cairo-Aswan highway

Egypt will soon inaugurate the first 230-km phase of a new EGP 26 bn, 1150-km Cairo-Aswan highway, head of the Roads and Bridges Administration Hossam Moustafa told Extra News (watch, runtime: 3:58).The first phase passes through Fayoum and stretches nearly 100 km further south, Moustafa said. Work on further phases, including the stretch between Edfu and Aswan, has already started.

Manufacturing

Distributors of electric motors have six months to comply with new efficiency standards

Importers and assemblers of electric motors will be required to adhere to new energy efficiency and testing standards under guidelines issued yesterday by the Trade and Industry Ministry. Companies will have six months to meet the new requirements. The decision is designed to “increase reliance on the use of energy-saving electric motors and to stimulate investment,” Trade Minister Nevine Gamea said.

Banking + Finance

FAB Egypt signs financial inclusion MoU with postal service

First Abu Dhabi Bank (FAB) Egypt will work with the postal service to provide financial services after signing an MoU with the National Postal Authority, Al Shorouk reports. The services include using post office branches to disburse remittances from Egyptians working abroad, the collection of dues owed to the bank’s clients through the post office’s prepaid cards, and making credit card payments at post office branches, the authority’s chairman, Sherif Farouk, said. With more than 24 mn clients, EGP 220 bn in deposits and branches all around the country, the postal service is one of the nation’s largest providers of financial services and a potentially lucrative opportunity for private-sector players.

CIAF could bring back its EGP 50 mn sukuk issuance in 1Q2021

Aviation leasing company CIAF could move ahead with its EGP 50 mn sukuk issuance in 1Q2021 if air travel recovers and a second wave of covid-19 cases remains contained, the local press reports, citing unnamed sources with knowledge of the matter. CIAF had put the issuance on ice earlier this year as the pandemic effectively grounded the airline industry. The company had initially planned to revisit the issuance in 4Q2020.

NBE provides Ibn Sina Pharma with a EGP 250 mn short-term credit facility

The National Bank of Egypt will increase the size of Ibnsina Pharma’s short-term credit facility to EGP 250 mn to fund working capital, according to an EGX filing (pdf).

Egypt Politics + Economics

El Wafd Party chairman resigns amid party rifts ahead of parliamentary elections

El Wafd Party chairman Bahaa Abu Shouka has resigned his post amid rifts in the party ahead of this year’s parliamentary elections, Youm7 reports, carrying a copy of his resignation letter. Abu Shouka wrote that his resignation is designed to help unify the party ahead of the elections, which kick off on 21 October. Al Wafd members are currently split over whether the party should contest the election as part of a coalition.

Sports

Ali Farag, Nouran Gohar lead draws for CIB Egyptian Squash Open

World champions Ali Farag and Nouran Gohar lead the draws for the men and women’s divisions of the CIB Egyptian Squash Open, according to PSA World Tour. Also competing in the championship are Egypt’s Karim Abdel Gawad, Mazen Hesham, Tarek Momen, and Marwan ElShorbagy on the men’s side, and Nour El Sherbini, Nour El Tayeb, and Zeina Mickawy on the women’s side. The competition by the pyramids will take place on 10-17 October.

On Your Way Out

Small businesses in Egypt and the wider MENA region are getting a boost from a campaign Facebook launched under the hashtag #LoveLocal (watch, runtime 1:01). The campaign, which features a number of homegrown businesses in Egypt and the region, encourages users to support their local economies to offset the impact of covid-19. Some 41% of businesses in the MENA region have slashed their workforce, according to data gathered in July 2020 for the Future of Business survey (pdf). On the flipside, 20% of regional businesses reported a shift to online marketing and sales to make up for lost revenue.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.70 | Sell 15.80
EGP / USD at CIB: Buy 15.71 | Sell 15.81
EGP / USD at NBE: Buy 15.70 | Sell 15.80

EGX30 (Monday): 10,967 (+0.6%)
Turnover: EGP 1.2 bn (7% above the 90-day average)
EGX 30 year-to-date: -21.4%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session up 0.6%. CIB, the index’s heaviest constituent, ended down 0.2%. EGX30’s top performing constituents were Eastern Company up 4.4%, Egyptian Resorts up 3.6%, and SODIC up 2.5%. Yesterday’s worst performing stocks were KIMA down 1.8%, Ezz Steel down 1.7% and Sidi Kerir Petrochemicals down 1.6%. The market turnover was EGP 1.2 bn, and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -61.2 mn
Regional: Net long | EGP +50.5 mn
Domestic: Net long | EGP +10.7 mn

Retail: 76.8% of total trades | 77.9% of buyers | 75.7% of sellers
Institutions: 23.2% of total trades | 22.1% of buyers | 24.3% of sellers

WTI: USD 40.57 (-0.07%)
Brent: USD 42.43 (+1.22%)

Natural Gas: (Nymex, futures prices) USD 2.10 MMBtu, (-1.78%, November 2020 contract)
Gold: USD 1,885.20 / troy ounce (+0.15%)

TASI: 8,334 (+0.49%) (YTD: -0.65%)
ADX: 4,492 (+0.14%) (YTD: -11.50%)
DFM: 2,261 (+0.74%) (YTD: -18.21%)
KSE Premier Market: 6,155 (-0.45%)
QE: 9,883 (+0.70%) (YTD: -5.20%)
MSM: 3,621 (+0.01%) (YTD: -9.04%)
BB: 1,449 (-0.14%) (YTD: -10.00%)

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Calendar

September: The Egyptian Federation for Securities will hold elections for its board of directors after they were postponed in March due to the lockdown.

September: The General Authority for Investment (GAFI) will host a virtual meeting with the Arab-German Chamber of Commerce and Industry and some 120 German companies to discuss investment prospects in Egypt.

21 September-1 October (Monday-Thursday): EFG Hermes’ second Virtual Investors Conference.

28 September-3 October (Monday-Saturday): CIB PSA World Tour Finals, The Park, Mall of Arabia, Egypt.

End of September: Last chance to settle building code violations for illegal buildings.

October: Trade and Industry Ministry allocates SMEs seven industrial complexes.

1 October (Thursday): House of Representatives reconvenes for its sixth and final legislative session before elections for the house later in October or November.

1 October (Thursday): Deadline for students to transfer between schools.

1-10 October (Thursday-Saturday): Alexandria Book Fair, Kouta, Alexandria.

4 October (Sunday): Senate convenes for its first session.

6 October (Tuesday): Armed Forces Day.

8 October (Thursday): National holiday in observance of Armed Forces Day.

12 October (Monday): The Egyptian Iron and Steel company general assembly would discuss demerging its mining and quarrying unit and restructure the company’s board of directors

10-17 October (Saturday-Saturday): CIB Egyptian Squash Open, New Giza Sporting Club / Pyramids of Giza.

17 October (Saturday): 2020-2021 academic year begins for K-12 students at state schools and students in public universities.

18-22 October (Sunday-Thursday): The annual Cairo Water Week event — which will be semi- virtual this year — will be held under the slogan “Water Security for Peace and Development in Arid Regions”

21-23 October (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

23-31 October (Friday-Saturday): El Gouna Film Festival, El Gouna, Egypt.

24-25 October (Saturday – Sunday) Polls open for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

29 October (Thursday): Prophet Mohamed’s birthday (TBC), national holiday.

November: Egypt will host simultaneously the International Capital Market Association’s emerging market, and Africa and Middle East meetings.

November: An Egyptian-Russian ministerial committee will meet to discuss trade and investment in Moscow.

2 November: Former Civil Aviation Minister Ahmed Shafik faces retrial at Cairo Court of Appeals in the so-called Aviation Ministry corruption case.

4-5 November (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

4-6 November (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

4-7 November (Wednesday-Saturday): Cityscape Egypt Expo, International Exhibition Center, Cairo

7-8 November (Saturday-Sunday): Polls open for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

12 November (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

15 November (Sunday): Egyptian Tax Authority’s online intro seminar on new electronic invoice system for first tranche of companies transitioning to e-filing program.

19-28 November (Thursday-Sunday): Cairo International Film Festival, Cairo Opera House, Egypt.

23-24 November (Monday-Tuesday): Reruns for Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

30 November (Monday): Final results will be announced for Parliamentary elections held in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

December: The 110th regular session of the Egyptian-Iraqi Joint Higher Committee will be held under the chairmanship of the prime ministers of the two countries.

December: IMF delegation visits Egypt to in first of two reviews ahead of disbursement of second tranche of USD 5.2 bn SBA.

1 December (Tuesday): The IMF will conduct a first review of targets set under the USD 5.2 bn standby loan approved in June (proposed date).

7-8 December (Monday-Tuesday): Reruns for Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

9-10 December (Wednesday-Thursday): BiznEx, the international business expo in Egypt, venue TBD.

14 December (Monday): Final results will be announced for Parliamentary elections held in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

15-16 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

24 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

25 December (Friday): Western Christmas.

1 January 2021 (Friday): New Year’s Day, national holiday.

7 January 2021 (Thursday): Coptic Christmas, national holiday.

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship at the Giza Pyramids

25 January 2021 (Monday): 25 January revolution anniversary / Police Day.

26-28 January (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia

28 January 2021 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

4 February 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

6-18 February (Saturday-Thursday): Mid-year school break.

18 March 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

12 April 2021 (Monday): First day of Ramadan (TBC).

25 April 2021 (Sunday): Sinai Liberation Day.

29 April 2021 (Thursday): National holiday in observance of Sinai Liberation Day.

29 April 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

3 May 2021 (Monday): Sham El Nessim.

6 May 2021 (Thursday): National holiday in observance of Sham El Nessim.

12-15 May 2021 (Wednesday-Saturday): Eid El Fitr (TBC).

31 May-2 June 2021 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

1 June 2021 (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

10 June 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24 June 2021 (Thursday): End of the 2020-2021 academic year.

26-29 June 2021 (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center

22 July 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 July-3 August 2021 (Thursday-Monday): Eid Al Adha, national holiday (TBC).

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