Sunday, 4 October 2020

Tons of investment news — is there a better way to start the week?

TL;DR

What We’re Tracking Today

Good morning, friends, and welcome to the first full workweek of October. It’s going to be a short one, as we’re all off on Thursday in observance of Armed Forces Day, the government confirmed — sensibly not giving in to nighttime talkshow host Ahmed Moussa’s suggestion that we backtrack on the new policy of moving midweek holidays to the weekend. Armed Forces Day is formally 6 October.

The best news of the morning: Egypt is on track to be the only country in the EBRD’s footprint to grow this year — and we should see the economy expand at a 5% clip in 2021. That and a pile of investment news dominate this morning’s Speed Round.

You heard it here first: We suggested a couple of weeks back that “Spacs” would soon be on the regional investment menu, and Nassef Sawiris has made it official, as we note in Speed Round, below. We’re aware of two other investors kicking the tires on Spacs, so watch this space.

Analysts expect the government to leave fuel prices on hold for 4Q when the fuel pricing committee holds its quarterly meeting this week, Masrawy reports. Although global prices remain well below the USD 61/bbl benchmark used in the FY2020-2021 budget, the increase in public spending necessitated by the pandemic means that the government will prioritize revenues over handing consumers a discount on their fuel, said Mona Bedier, senior economist at Prime Holding. The committee kept prices on hold when it last met in July, leaving 95-octane at EGP 8.50 per liter, 92-octane at EGP 7.50, and 80-octane at EGP 6.25.

Factories could yet see their gas bills cut, though: MPs sitting on the House Industrial Committee last week called on the government to reduce utility costs for industries. And last month, government sources suggested gas prices could be lowered to at least USD 4/mmBtu from USD 4.50/mmBtu. The government has reduced prices twice in the past year: once last October and once in March as part of its stimulus measures to protect industry through the covid lockdown.

Our newly-elected Senate will sit for its inaugural session two weeks from today, on 18 October, after President Abdel Fattah El Sisi issued a decree calling for the upper chamber of parliament to convene.

Key news triggers over the coming weeks:

  • PMI figures for September are due out for Egypt, Saudi Arabia, and the UAE tomorrow.
  • Foreign reserve figures for September should be out this week.
  • Inflation data for September will land on Saturday, 10 October.
  • Voters go to the polls to elect a new House of Representatives in a multi-stage process starting 21 October (voters abroad) and 24 October (in Egypt).

The Health Ministry reported 109 new covid-19 infections yesterday, down from 149 the day before. Egypt has now disclosed a total of 103,575 confirmed cases of covid-19. The ministry also reported 14 new deaths, bringing the country’s total death toll to 5,970. We now have a total of 97,274 confirmed cases that have fully recovered.

Our regularly scheduled reminder that covid-19 is not canceled (no matter how much Egyptians want to believe it’s over) came courtesy of Higher Education Minister Khaled Abdel Ghaffar, who stressed that social distancing and other precautionary measures remain important. Abdel Ghaffar also told El Hekaya’s Amr Adib that the government currently has 113 university hospitals with 36k beds that are ready to handle the anticipated second wave of covid-19 cases (watch, runtime: 4:01). The minister also gave Adib the latest updates on Egypt’s covid-19 vaccine development efforts, which have so far been successful when tested on animals and should soon move to the pre-trial phase (watch, runtime: 4:29). Elsewhere on the covid-19 front, presidential health advisor Mohamed Awad Tag Eldin urged Adib’s viewers to get the seasonal flu vaccine (watch, runtime: 3:03).

Two charter flights landed yesterday in Marsa Alam Airport from Kiev and Paris for the first time since commercial flights were temporarily suspended in March. The first flight brought in 128 tourists from the Ukrainian capital, while the second 97 from France.

enterpriseAs a first-class leading golfing destination, Somabay will be hosting a 2020 edition golf tournament on its world renowned golf courses, upgraded with new innovative tweaks, driving ranges and floodlights.

Somabay’s golf course stands out when it comes to sustainability as solar energy is used for seawater desalination, in addition to applying smart irrigation systems to ensure minimum water consumption and cost of sand.

This weekend in the EastMed:

  • Greece and Turkey have agreed to set up a “military deconfliction mechanism” to avoid future military escalations, in a step towards cooling tensions over East-Mediterranean territory disputes between the two countries, Reuters says.
  • Libya has tripled its oil production in the weeks since eastern Libyan forces lifted the oil blockade that was in effect for eight months prior, according to Reuters. Talks are expected to be held this week between Libya’s warring factions — the Tripoli-based Government of National Accord and the eastern Libyan National Army.
  • Lebanon and Israel are ready for US-mediated talks aimed at solving their long-standing maritime border dispute, Reuters reports.

Could the EUR go digital? The European Central Bank is considering the possibility of introducing a digital version of the EUR “should the need arise,” the Associated Press reports. ECB’s Christine Lagarde said the currency would complement rather than replace cash, and would respond to an increased demand for cashless payment services amplified by covid-19. The digital currency — which would still be “official central bank money” — would be more trustable, have essentially zero risk, and be less expensive to use than cashless payment systems on offer from the private sector, the newswire notes.

Airbnb could clinch a USD 30 bn valuation from its upcoming IPO if the company secures its USD 3 bn target from the offering, CNBC reports, citing unnamed sources familiar with the plan. Airbnb, which filed for the offering in August, expects to go public next month. The most recent assessment of the home sharing giant valued the company at USD 21 bn after the company raised USD 2 bn from investors in April.

In international miscellany:

  • Brexit talks enter “decisive phase”: The UK and EU will go back to the negotiating table for Brexit trade talks in London this week in an attempt to iron out persisting disagreements on fishing rights and state aid ahead of the summit of EU leaders on 15-16 October, the Financial Times reports.
  • Google has agreed to pay 200 publishers USD 1 bn over the next three years in an effort to quieten criticism of its power over the troubled news industry, writes the Associated Press.

US ELECTION WATCH- Trump just sprang the quickest October Surprise of all time: Conflicting reports have emerged on US President Donald Trump’s condition since being hospitalized on Friday after testing positive for covid-19. Trump’s contraction of the virus that causes covid-19 is a plot twist that threatens to upend his presidential campaign as the election enters its final stretch. The president was said to have been experiencing coughing, congestion, and fever, prompting officials to fly him to hospital for emergency treatment. Aides said he would remain in the hospital for a few days, forcing the campaign to cancel several upcoming rallies. The story is leading the front pages this morning: NYT | Washington Post | WSJ | Bloomberg | FT

Enterprise+: Last Night’s Talk Shows

*** Lamees El Hadidi returns to the airwaves tonight with her new show, Kelma Akhira, on ON TV. You can catch the promo for the show — which promises to feature plenty of debates and discussion — here (runtime: 1:16).

The talking heads had a rather busy night, but the discovery yesterday of 59 sarcophagi at Saqqara was the belle of the ball. The recently-ratified Banking and Central Bank Act, King Cheeto’s health updates, and the regional diplomatic landscape also earned plenty of airtime.

Aside from yesterday’s findings, work is currently underway to uncover more coffins in the Saqqara Necropolis, Tourism and Antiquities Minister Khaled El Enany told El Hekaya’s Amr Adib. El Enany also made sure to note that the discovery was led by a team of Egyptian archaeologists from the Supreme Council of Antiquities (watch, runtime: 1:23). The minister also touched on Egypt’s efforts to stop the smuggling and sale of artifacts, particularly after Christie’s auction house sold off a Tutankhamun sculpture last year that Egypt said was stolen in the 1970s (watch, runtime: 2:28). Archaeologists believe there are another 1 mn coffins and mummies in the Saqqara Necropolis, Egyptologist Zahi Hawass estimated in a phone-in with Masaa DMC’s Eman El Hosary (watch, runtime: 8:50).

The economic fallout from the pandemic also got some airtime on Al Hayah Al Youm, with former IMF advisor Fakhry El Fiqi noting that Egypt was one of only 18 economies expected to avoid contraction in the IMF’s most recent economic outlook. El Fiqi piled on praise for the Central Bank of Egypt’s quick maneuvering and its monetary policy as a whole for supporting the economy throughout the pandemic. Banque Misr Deputy Chairman Akef El Maghraby also gave Sherdy the lowdown on the key features of the recently passed Banking and Central Bank Act (watch, runtime: 21:33).

We’re not out of the woods yet with the Libyan conflict, as regional powers could still put boots on the ground in Libya despite the recent deescalation Egypt led with the Cairo Declaration, Arab League Secretary General Ahmed Aboul Gheit told Ala Mas’ouleety’s Ahmed Moussa in an extensive interview (watch, runtime: 1:48:51).

The conflicting reports on US President Donald Trump’s health after testing positive for covid-19 were also on Amr Adib’s radar, who had a chat with Al Arabiya’s Washington correspondent Nadia Belbisi. She noted that there is also a bit of confusion on when Trump contracted the virus that causes covid-19, all of which is undermining the White House’s credibility and transparency (watch, runtime: 7:21).

Speed Round

Egypt on track to be only country in EBRD’s footprint to grow this year, investor sees economy expanding at a 5% clip next year. Covid-19 pushed up unemployment and forced many family businesses to close at least temporarily, but Egypt’s economy is still on track to grow at a 2% clip in 2020 and rebound to 5% growth next year. That makes Egypt “the only economy across all of the EBRD regions likely to escape recession in the 2020 calendar year … supported partly by large public construction projects and a boom in the telecommunications sector,” the European Bank for Reconstruction and Development said in a statement announcing it has revised its projections through 2021.

Egypt had been growing at 5.4% pace heading into covid, but the economy was hobbled by a partial lockdown and now faces challenges including “weak outlook in the tourism sector, disruptions in global value chains, weaker demand from trading partners, and the slowdown in foreign direct investment.”

Egypt is bouncing back from covid-induced unemployment and the closure of family businesses, EBRD says, based on a survey of 40k adults and nearly 2k SMEs in more than a dozen countries across its footprint. Some 23% of Egyptians who responded to the survey reported having lost their jobs during the pandemic while a third of family businesses closed at least temporarily. Government figures show unemployment rose to a two-year high of 9.6% in the second quarter as the government’s lockdown measures forced businesses across the country to shutter. Analysts have argued that national megaprojects helped cushion the blow of covid-19 on the Egyptian economy, helped by a stimulus program coordinated between the CBE and the Madbouly government.

IN OTHER NEWS FROM EM: The threat of sovereign bankruptcies in emerging economies will continue to mount unless the G20 extends its debt relief measures for low-income countries introduced earlier this year into 2021, IMF Managing Director Kristalina Georgieva said in a blog post on Thursday. Some nations are beginning to feel the crunch, with crisis-stricken Lebanon initiating a restructuring process, Argentina and Ecuador already reaching restructuring agreements with their bondholders, and Zambia and Rwanda warning that they may not be able to meet obligations to their international creditors.

INVESTMENT WATCH- Foreign investors will soon be able to apply for five-year renewable residence permits under amended regulations from the General Authority for Investment and Free Zones (GAFI). The permits will be issued using a points-based system that gives weight to “the project’s scope of activities (20%), the amount of paid-in capital (30%), the number of employees (30%), and the location of the project (20%),” according to a backgrounder prepared by law firm Mazghouny & Co.

Who gets priority? Investors in renewable energy, heavy industry, K-12 education, healthcare, oil and desalination, among others.

It’s smart policy — but smarter policy would be to also give points to industries that have high demand for trained, white-collar labor such as software development, financial services, and consultancies that hire primarily Egyptians rather than parachuting in foreigners. We’re a nation of >100 mn people — it’s time to get serious about a service economy that pays living wages and that serves as an engine of long-term growth.

Egypt has already taken steps to outline a path to citizenship for select foreign investors: Legislative amendments approved by the House of Representatives and ratified by President Abdel Fattah El Sisi last year allow foreigners who hold assets in Egypt to apply for citizenship. Under the new rules, foreigners can acquire the citizenship if they purchase state-owned property worth at least USD 500k, invest more than USD 400k in a minimum 40% stake in an investment project, make a non-refundable USD 250k deposit that goes directly to the government, or deposit USD 750k – 1 mn into a zero-interest local account, which can then be refunded after 3-5 years.

PRIVATE EQUITY WATCH- Lorax Capital raises USD 142 mn from international limited partners (LPs) for new USD 250 mn private equity fund: Egyptian private equity outfit Lorax Capital Partners has secured commitments of c. USD 142 mn for its SME-focused PE fund, LCP II. Limited partners in LCP II include the Egyptian-American Enterprise Fund and the European Bank for Reconstruction and Development, each of which have committed USD 50 mn to the fund, while the European Investment Bank has kicked in USD 22 mn. The International Finance Corporation (IFC) and the French Development Agency’s Proparco have also made investments, the EAEF said in a statement (pdf) that did not break down how much IFC and Proparco had put in.

We have previously noted that Lorax is targeting a USD 250 mn final close for LCP II, which will primarily focus on long-term investments in Egyptian SMEs.

Separately, the EBRD is investing USD 10 mn in an Egypt and North Africa-focused fund that targets SMEs and small mid-cap firms primarily in Egypt, Tunisia, Morocco, and Jordan, the bank said in a statement. Swicorp-affiliate SPE Capital Partners manages the SPE AIF I LP fund, which focuses on the manufacturing, healthcare, and education sectors. SPE currently holds a 30% stake in Future Pharma Industries (FPI). This latest funding comes after the EBRD invested USD 20 mn into the fund last year and the IFC committed USD 20 mn in April in response to the pandemic.

PRIVATE EQUITY WATCH- PE giant Actis is pivoting towards longer-term investments in assets such as real estate, energy, and infrastructure as it moves away from the traditional PE model, Torbjorn Caesar, a senior partner at the London-based firm said, according to Bloomberg. Actis is currently looking to raise USD 4 bn for a new fund to target the renewable energy sector, people familiar with the matter said.

The firm is planning to close an investment in Egypt’s renewables sector by the end of 2020. “Hard assets” give emerging markets-focused Actis, which has AUM of close to USD 10 bn, a chance to scale and ensure a steady flow of yields, said Caesar. The shift comes at a time when other high-profile firms are moving away from PE in emerging markets. It’s also becoming increasingly difficult to attract investors to Middle Eastern transactions after the collapse of Abraaj.

Look for a new PE player to spin out of Actis: “Several Actis private equity [players] have been considering splitting off to start their own firm,” Bloomberg reports, noting that “they have held discussions about taking over management of some legacy investments from Actis.” The news comes as Actis’ chief investment officer is “set to depart in the coming months after spearheading a major expansion over the past five years.”

Actis has a long track record in Egypt, where it is a major investor in London-listed labs business IDH and where it has previously invested in companies ranging from CIB to Edita.

M&A WATCH- Ezdehar Egypt Mid-Cap Fund is looking to sell its stake in customer loyalty card company Dsquares within the next six months, founding partner Emad Barsoum told Al Mal. Barsoum said the fund also plans to exit two other companies within the same period, and to make one last significant investment before the fund closes at the end of the year. Ezdehar acquired its “significant” minority stake in Dsquares in 2018, and invested again in 2019.

New fund to be launched before the end of 2020: Ezdehar will launch a new USD 200 mn fund before the end of the year and is expected to make its first investment in 1Q2021, Barsoum said. The new fund will target medium-sized companies operating in manufacturing, services, education, healthcare, non-banking financial services, investing USD 10-30 mn per transaction, he said in August.

Meanwhile, portfolio company Al Tayseer Healthcare Group will invest EGP 500-600 mn into its operations over the next five years and increase the number of beds in its international hospital to 240 from 160, Barsoum said. The fund last month acquired a minority stake in the health firm and said at the time that it was planning to invest in its hospitals and labs.

INVESTMENT WATCH- Investors can subscribe to Italy-headquartered asset manager Azimut’s new Egypt-focused fixed income fund AZ-Savings as of next Sunday, 11 October, Azimut Managing Director Ahmed Aboul Saad said, according to the local press. Azimut tapped state-owned Banque du Caire and Ahli United Bank Kuwait to sell the investment certificates and has contracted brokerage firms Mubasher, Naeem, Global Invest Securities, and Misr Capital to market and sell shares in the fund. There were no details on how much the fund is looking to secure when the subscription period ends. Azimut earlier this year launched a Luxembourg-headquartered fund to invest in Egyptian equities, which was looking to secure USD 50 mn in AUM “as a first stage,” Abul Saad said then.

INVESTMENT WATCH- Nassef Sawiris is getting on the SPAC train: Bn’aire Nassef Sawiris’ special purpose acquisition company (SPAC), Avanti Acquisition Corp, priced its initial public offering at USD 600 mn on Friday ahead of listing on the New York Stock Exchange, according to BusinessWire. The blank-check company will sell 60 mn units at USD 10 each during the listing, which is expected to close on 6 October. Avanti owner NNS Group — made up of Sawiris’ family office and Sienna Capital, a subsidiary of USD-bn European investment holding company Groupe Bruxelles Lambert — will invest another USD 100 mn on top of what is raised during the listing, Bloomberg reports, citing sources familiar with the matter.

Avanti will focus on high-growth family- and founder-led European businesses and will become the largest US-listed SPAC to focus on European acquisitions.

What’s a SPAC again? Special-purpose acquisition companies are listed entities focused solely on acquiring companies. They exist just to allow the creator to raise money in an IPO on a stock exchange, and don’t actually have commercial operations. Owners drum up interest among institutional investors as they would do ahead of an IPO and then float the SPAC on a stock exchange. After going public, the founders get to work finding companies to acquire. We broke down the whole process in our first Enterprise Explains section last month.

Other SPAC news from the region: Israeli SPAC ION Acquisition Corp raised USD 225 mn when it listed on the NYSE on Friday, becoming the only blank-check company focusing only on targets in the Middle East, Reuters reports.

enterprise

Orange Egypt and Etisalat Misr are competing for another 20 MHz of bandwidth on offer from the National Telecommunications Regulatory Authority (NTRA), Masrawy reports, citing an unnamed NTRA official. The authority called an auction on Thursday for the bandwidth that includes two 10 MHz bands for USD 150 mn each. Orange and Etisalat had sat out an auction last month, which saw Vodafone Egypt and Telecom Egypt’s WE bid for 60 MHz of bandwidth, offered as one 40-MHz bundle for USD 600 mn and another 20-MHz for USD 300 mn. The results of the first sale have not yet been announced.

Background: Mobile network operators in Egypt have repeatedly asked the NTRA to provide access to more spectrum since 2017 when the regulator first launched 4G in the country. State-owned WE received 15 MHz, Orange and Etisalat receiving 10 MHz, and Vodafone getting 5 MHz.

Lower stamp tax on EGX transactions is now in effect: Amendments to the Stamp Tax Act that lower the stamp tax on EGX transactions and the withholding tax on dividends are now the law of the land following President Abdel Fattah El Sisi’s sign-off, according to a Financial Regulatory Authority statement (pdf). The amendments, which the House of Representatives had approved in July, set a tax rate on EGX trades of 0.125% for foreign investors and 0.075% for residents, both of which were previously set at 0.15%. Intraday transactions are still exempt from the stamp tax, according to the statement. The tax on dividends has been cut in half to 5% for foreign and resident investors alike.

MOVES- Mohamed Abdallah (Linkedin) has been appointed CEO of Vodafone Egypt effective 1 November, succeeding Alexandre Froment-Curtil, who is now the CEO of Vodafone Turkey, according to a company statement (pdf). Abdallah has been with Vodafone Egypt since 1998 and currently heads up its consumer business unit and sits on the executive committee. The move comes a few weeks after acquisition talks launched by Saudi Telecom for a 55% stake in Vodafone Egypt stalled.

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The Macro Picture

Africa’s mobile network operators are using the pandemic as a chance to (literally) bank on the continent’s huge growth potential. Despite mobile operators’ revenues shrinking since the onset of the coronavirus, companies are looking to a new source of income as mobile payments increase: banking. Mobile operators are perfectly positioned to be bankers as mobile phone penetration is much higher than access to traditional banks. They have a wealth of data and are able to reach customers at a low cost, says Reuters. “We are … using the opportunity that the crisis is offering us to really accelerate,” said Serigne Dioum, who heads the mobile financial services division of MTN, Africa’s largest operator.

MNOs want to lend: Orange, which has operations in at least 18 African countries, recently launched a full-scale digital bank, Orange Bank. The launch came after the French giant added 5 mn customers from Africa to its mobile money platforms. Orange’s new bank went live last month in Abidjan, with plans to launch in Mali, Burkina Faso, and Senegal. MTN and Telkom, meanwhile, are getting ready to launch micro-lending programs in South Africa, while Vodacom is venturing out of the continent’s largest economy with expanded lending, insurance, and payment solutions.

Egypt’s population is similarly unbanked and relies heavily on cash transactions. The government used the pandemic to give an extra push for its bid to encourage digital payments, with the central bank and commercial banks recently launching a nationwide awareness initiative on the benefits of e-payments. The initiative allows vendors to obtain PoS machines and QR code payment systems at no charge through local banks. Two of Egypt’s largest banks — CIB and NBE — have also been reporting large upticks or interest in internet and mobile banking transactions and the use of fintech services. There’s also now more room for non-traditional players to penetrate the sector under the recently enacted Banking Act, which governs licensing for smaller lenders and digital banks that can launch with lower capital requirements.

Egypt in the News

Leading coverage of Egypt in the foreign press over the weekend and into this morning: The discovery of at least 59 sarcophagi near the Step Pyramid of Djoser in Saqqara. The coffins were buried in wells dating back to at least 2,500 years ago, and most contained mummies. (AP | Reuters | AFP | Arab News).

Also making the rounds: The New York Times profiles Nadeen Ashraf, the founder of the Assault Police Instagram page that has helped uncover incidents of [redacted] assault in Egypt. Elsewhere, Amnesty International released a report suggesting that 500 people were detained for participating in scattered protests against housing demolitions. A separate report from Human Rights Watch discusses the detention of LGBTQ+ people. The Associated Press also took note.

Worth Watching

Will sustainability-linked loan agreements be the future of the post-pandemic food system? Sustainability-linked loan agreements are becoming increasingly popular as banking institutions use their financial resources to give incentives to companies to become more environmentally-friendly, explains Netherlands-based Rabobank’s Head of Sustainable Capital Markets Maarten Biermans in this Financial Times video (watch, runtime: 03:24).

Sounds great, but how does it work? Banks and companies agree on sustainability targets when inking loan agreements. Once the targets are reached, the interest rate on the loan decreases. In many cases, the borrower gets penalized if they fail to meet their targets, resulting in the interest rate increasing. These targets often include reducing water usage and CO2 emissions, improving energy efficiency, and introducing electric vehicles.

Diplomacy + Foreign Trade

It was a busy weekend on the foreign trade front: The Hungarian Import and Export Bank has earmarked some EUR 100 mn to finance unspecified industrial projects with Egyptian local partners, while Hungary is mulling setting up an industrial zone in Egypt, Hungarian Foreign Affairs and Trade Minister Peter Szijjarto told Trade Minister Nevine Gamea last week, according to a cabinet statement. An unnamed Hungarian lightbulb manufacturer has also expressed preliminary interest in setting up shop in Egypt, Szijjarto said, without providing further details.

The Trade Ministry is due to decide before next Sunday 11 October whether to cut import tariffs imposed on steel rebar and iron billets, the local press reports, quoting government sources. The 25% duty on steel rebars and 16% on iron billets were originally introduced provisionally in April 2019, with an eye to gradually taper off the rates over a three year period from the date of rolling out the tariffs, but authorities postponed the reductions twice, the latest of which was in April.

Meanwhile, exporters have lodged complaints with the Trade Ministry that customs offices were refusing to allow exports of medical masks, lentils and beans, even after the export bans were suspended last month, according to Al Mal.

On the diplomatic front: Prime Minister Moustafa Madbouly lauded the formal signing of a peace agreement between Sudan’s power-sharing government and rebel groups in the country, cabinet said. Separately, Foreign Minister Sameh Shoukry called for the “total elimination” of nuclear weapons in a recorded speech to the UN General Assembly on Friday.

Infrastructure

Three state-owned companies eye USD 200 mn Damietta Dry Port

A consortium of three state-owned entities has expressed interest in building the USD 200 mn Damietta Dry Port, reports Al Mal, citing an unnamed Transport Ministry source.

Chinese consortium to build EGP 250 mn electricity substation in Alexandria

A Chinese consortium has signed a EGP 250 mn contract with the Egyptian Electricity Transmission Company to construct a 66/220 kW electric substation in Alexandria’s Hosh Eissa neighborhood, Al Mal reports. The Chinese consortium — consisting of Energya Power and Telecom Solutions, Xian Electric Engineering Company and XD-EGEMAC — is expected to finish construction within a year of signing the contract.

Basic Materials + Commodities

Centamin gold production to fall 42% on Sukkari mine delays

Australian gold miner Centamin expects production to drop 42% in the final quarter, after extraction plans slated for this year at Egypt’s Sukkari mine were postponed for safety reasons, according to an operational update released on Friday. The company expects to produce only 70k ounces of gold in 4Q2020 compared to 148.4k y-o-y, and down from 120k in 3Q2020. Centamin was among the bidders in this year’s six-month gold exploration tender.

IMEX acquires 94% of Nile Cotton Ginning

IMEX International acquired 93.9% of Nile Cotton Ginning on Thursday for EGP 2.48 bn, buying 49.76 mn shares at EGP 50 apiece, Al Mal reports, citing a disclosure to the EGX on Thursday. EgyTrend is acting as IMEX’s financial advisor on the transaction.

Banking + Finance

Fiber Misr mulls sukuk issuance

Fiber Misr is considering a sukuk issuance to finance ongoing projects, the local press reports, citing unnamed sources familiar with the matter. Encouraged by the success of Talaat Moustafa Group’s issuance, the fiber optics cable company’s large-scale projects give it confidence that there will be demand for its issuance, the sources said, without providing further details.

Egypt’s NUCA signs EGP 50 bn syndicated loan agreement

The New Urban Communities Authority (NUCA) has borrowed EGP 50 bn from a consortium of local banks headed by the National Bank of Egypt and Banque Misr to finance developments in new cities, Al Mal reports, citing sources familiar with the matter. The loan will carry an interest rate of 7.25% — 2.5% lower than the Central Bank of Egypt’s overnight lending rate — to reduce the financial burden on the authority.

Education

Tender for phase two PPP schools program launches next week

The government is launching a tender for the second phase of the ongoing public-private partnership (PPP) schools program next week, which is expected to see 60-70 new schools built and operated by private sector companies, Al Mal reports. Ater Hanoura, head of the Finance Ministry’s Private Partnership Unit, said competing joint ventures will be shortlisted based on financial, technical and operational suitability, before they submit their final applications. This second phase of the tender was originally slated for March of this year, but was postponed because of the pandemic.

On Your Way Out

Government-supported accelerator Falak Startups has launched a new digital platform to digitize the physical “demo day” process, where founders showcase their new companies, according to a press release (pdf). The platform will allow investors interactive access to recorded pitches and pitch decks and obtain the contact details of founders.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.70 | Sell 15.80
EGP / USD at CIB: Buy 15.69 | Sell 15.79
EGP / USD at NBE: Buy 15.70 | Sell 15.80

EGX30 (Thursday): 11,051 (+0.6%)
Turnover: EGP 1.0 bn (11% below the 90-day average)
EGX 30 year-to-date: -20.8%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 0.6%. CIB, the index’s heaviest constituent, ended down 0.1%. EGX30’s top performing constituents were Madinet Nasr Housing up 5.0%, Ezz Steel up 3.6%, and GB Auto up 2.9%. Thursday’s worst performing stocks were Egyptian Resorts down 0.7%, Juhayna down 0.6% and Dice down 0.4%. The market turnover was EGP 1.0 bn, and domestic investors were the sole net buyers.

Foreigners: Net Short | EGP -106.3 mn
Regional: Net Short | EGP -358.2 mn
Domestic: Net Long | EGP +464.3 mn

Retail: 55.5% of total trades | 24.6% of buyers | 86.5% of sellers
Institutions: 44.5% of total trades | 75.4% of buyers | 13.5% of sellers

WTI: USD 37.05 (-4.31%)
Brent: USD 39.27 (-4.06%)

Natural Gas: (Nymex, futures prices) USD 2.44 MMBtu, (-3.52%, November 2020 contract)
Gold: USD 1,907.60 / troy ounce (-0.45%)

TASI: 8,295.05 (-0.05%) (YTD: -1.12%)
ADX: 4,492.02 (-0.58%) (YTD: -11.50%)
DFM: 2,265.70 (-0.34%) (YTD: -18.05%)
KSE Premier Market: closed
QE: 10,005.90 (+0.16%) (YTD: -4.02%)
MSM: 3,614.64 (-0.19%) (YTD: -9.21%)
BB: 1,432.46 (-0.14%) (YTD: -11.04%)

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Calendar

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

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

5 October (Monday): Libyan peace talks in Hurghada bringing together political figures and tribal representatives from the Libyan National Army (LNA) and Government of National Accord (GNA).

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

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.

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

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).

1 October 2021-31 March 2022 (Friday-Thursday): Postponed Expo 2020 Dubai.

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