Monday, 28 December 2020

Cleopatra to buy Alameda in healthcare mega merger.
Plus: The year in covid + debt



It’s t-minus four days until 2021 and New Year-itis is in full effect if the unprecedented volume of out-of-office replies we’re receiving after we dispatch each morning’s edition is anything to go by.

The big news at home this morning: The merger of two of the nation’s largest healthcare players — EGX-listed and Actis-backed Cleopatra Hospitals Group and privately-held Alameda Healthcare Group. We have the details in an epic M&A Watch, below.

Also: The Madbouly government is stepping up restrictions to try to tamp down the second wave of covid-19 and is in advanced talks to both secure stocks of read-made vaccine and the right to manufacture at least one domestically. We have the rundown in this morning's Covid Watch, below.

We’re one step closer to a post-Brexit trade agreement with the UK: President Abdel Fattah El Sisi ratified yesterday a trade agreement with the UK that could unlock new UK investment in Egypt, including in the Suez Canal Economic Zone, oil and gas, manufacturing, agribusiness, healthcare and education sectors, UK Trade Envoy to Egypt Sir Jeffery Donaldson said last month. The agreement goes into effect on New Year’s Eve.

The move follows last Thursday’s historic UK-EU Brexit agreement, which should receive a “provisionally” approval from the European Parliament when they meet today. Meanwhile, Boris Johnson has had to concede that the agreement “perhaps does not go as far as we would like” over access to EU markets for financial services, the Guardian reports.


EGX-listed companies must have at least one woman member of their board of directors by 31 December “to avoid any action by the FRA.” It is unclear what those actions may be, but we suspect we may find out soon enough, as almost half of EGX30 companies still had all-male boards when we checked earlier this month. The FRA’s decree is here if you need to catch up.

Will Thursday be a day off? We should be hearing any day now from the central bank (and the EGX) if Thursday is a banking holiday, as New Year’s Day falls on a Friday. Banks with December-January fiscal years are typically shuttered on 1 January to close their books.

Speaking of banks: A reminder that transaction fees on withdrawals from ATMs outside your bank’s network will be hit with transaction fees as of Friday. The levies had been suspended earlier during the pandemic.

We find ourselves agreeing with Amr Adib twice in one issue (see below). So maybe we haven’t had enough coffee yet? Still, the voluble talkshow host hit the nail on the head last night in calling on the Interior Minister to extended 31 December deadline for all cars to be fitted with RFID stickers. Amr says our usual last-minute-itis will see El Moroor packed to the gills, spreading covid in the process, if there’s no extension (watch, runtime: 8:25)

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


Looking for something to work your brain cells while on vacation this week? We suggest:

** We’re kicking off our special Year-in-Review editions this morning, where we’re going to have abbreviated issues that cover the top three or so stories each day followed by a rundown on the year that was in covid, debt capital markets, startups, macro, investment, M&A and equity capital markets.

In today’s issue: We begin with the outbreak of the covid-19 pandemic (the most appropriate place to start) and how Egypt handled it on the policy front. We follow that with a look at the borrowing the government has had to do to fight the pandemic and break down the state of debt capital markets in 2020.

Did you miss parts 1 and 2 of our Blackboard Year-in-Review, our look back on the state of education in this really nutty year? We have recaps below.

In the mood to listen to something instead? We also have links to short teasers from season one of Making It



New restrictions + details on vaccine rollout

The Madbouly government has announced new measures designed to contain the spread of covid as daily infection figure continues to grow. Cabinet invoked the Emergency Law to impose the restrictions, which include:

Kiss any NYE parties goodbye: Al parties, events and large gatherings are banned and all gathering halls and receptions be closed, according to a cabinet statement out yesterday. These include all New Year’s Eve celebrations, the statement made sure to point out. The statement did not state how long the ban would remain in place.

A new list of fines have been put in place for covid restriction violators. Individuals not wearing masks in public venues can get slapped with a EGP 50 fine starting from next Sunday, while restaurants and cafes that break the 50% capacity limit will face an immediate EGP 4,000 fine and a one-week closure. The government will begin collecting these fines starting from next Sunday, according to the statement.

Cabinet spokesman Nader Saad was all over the airwaves last night talking up the restrictions, noting that hotels that don’t play ball could be shuttered for a month or lose their licenses.

But don’t worry, you can still have a “small” wedding — outdoor wedding parties are allowed with a cap on attendance set at 300 people, whether they’re held in hotels or on the streets.

VACCINE WATCH- We’re definitely negotiating with major players for the rights to locally manufacture a covid vaccine, Saad told Lamees El Hadidi, the queen of late night talk. Health Minister Hala Zayed has met with reps from global pharma companies to talk about production rights and will have an announcement as soon as there is an agreement, he said.

We’re also in talks with AstraZeneca and Pfizer for adequate stocks of a covid jab, but don’t expect to receive some 20 mn shots from Gavi — the global vaccine alliance — until some time in May 2021. Saad’s remarks come as Egypt faces a delay stocking some 500k doses of the Sinopharm jab as Beijing sorts out export plans.

Catch Saad’s full chat with Lamees here (watch, runtime: 27:56) or go tune in to Al Hayah Al Youm’s Lobna Assal (watch, runtime: 16:53) or Masaa DMC’s Eman El Hosary (watch, runtime: 8:54).

It is unclear whether the government plans to push ahead with allowing attendance at the Men’s Handball World Championship 2021, which is scheduled to take place in Egypt 13-31 January 2021. The Health Ministry had declared that no more than 30% of seats can be filled at the event, which will be organized in an NBA-style bubble system. We’re 100% with late-night screamer-in-chief Amr Adib, who last night suggested that spectators should not be allowed in the bleachers. Handball organizing committee Hisham Nasr countered that boosters in the stands will need to put on masks and keep a distance from one another (watch, runtime: 6:06).

The Health Ministry reported 1,226 new covid-19 infections last night, up from 1,189 the day before. The ministry also reported 53 new deaths, bringing the country’s total death toll to 7,405. We now have a total of 110,015 confirmed cases that have fully recovered.

A bit further afield, the mutated coronavirus variant that’s been spreading in the UK has been shown to be 56% more transmissible than other strains, according to a study from a top infectious diseases institute. While this is less than the 70% estimate put forth by the government, it does indicate that the UK will see levels of hospitalizations and deaths next year, the study notes, according to Bloomberg.

The news comes as Europe begins an ambitious campaign to vaccinate hundreds of mns of people, the Financial Times notes.

PSA- Airlines will be allowed to fly foreign nationals out of Saudi Arabia, but nationals are stuck at home as flights into and out of the kingdom remain grounded for an extra week everyone else, Reuters reports. Flights will not be allowed to countries “dealing with the new variant of covid-19,” Bloomberg added.


Healthcare mega-merger

Cleopatra Hospitals Group (CHG) has acquired 100% of Alameda Healthcare Group’s Egypt assets in a sale and purchase agreement that would see the two healthcare service providers merge their operations in Egypt, CHG announced (pdf) yesterday morning. The transaction will see CHG control and operate Alameda’s facilities, including Dar El Fouad 6 of October, Dar El Fouad Nasr City, As-Salam International Hospital in addition to As-Salam International Hospital Katameya in New Cairo, which is expected to commence operations in 1H2021. Dar El Fouad and As-Salam hospitals will continue to operate under their existing names following the transaction. Alameda’s management will report to CHG’s CEO Ahmed Ezzeldin when the transaction closes in 1H2021.

The merger would bring the combined entity’s capacity to around 1,450 beds, CHG Chairman Ahmed Badreldin said, giving the group c.15% of the commercial bed capacity in Greater Cairo and about 4% of private-sector beds on a national scale.

The transaction will double CHG’s EBITDA post-closing, Ezzeldin said, while allowing the group to “invest in and introduce new therapies and services needed in Egypt while continuing to scale up our bed capacity in future projects across the country.” Emerging markets private equity giant Actis has been an anchor shareholder of Cleopatra since 2019. “We are proud to be partners in the creation of this national champion that will benefit all stakeholders, and we look forward to the continued success of the Group under the leadership of Dr. Ahmed Ezzeldin and his team,” said Actis partner Sherif El Kholy, who also serves on Cleo’s board.

CHG will fund the transaction through the issuance of loan notes to Alameda’s shareholders, which will be mandatorily convertible into new CHG shares, the company said. “The new shares (which will be issued upon conversion of the convertible loan notes) will have a lock-up period of 12 months from conversion date,” reads the statement.

CHG’s shares closed 2.41% higher yesterday at EGP 4.74 per share.

MOVES- The transaction will see Alameda Chairman Fahad Khater become “a key and strategic shareholder in CHG and will take on the role of Vice Chairman of CHG,” the statement reads. “As they were when my father founded As-Salam, the delivery of world-class patient care, innovation and career advancement for all of our people will be at the top of our priority list as we come together,” Khater said.

But Enterprise, how much is the transaction worth? And who will own what post-transaction? The short answer: We dunno. Neither Cleopatra nor Alameda would specify a transaction value, but Bloomberg puts it at USD 450-500 mn, citing unnamed sources it says have direct knowledge of the agreement. The business information service also says Khater will own 25% of Cleo after the transaction.

A source with first-hand knowledge of the transaction tells us this talk is premature, noting final percentages will be sorted out after both parties receive final fair value reports from an independent advisor. Either way, Khater will be a large, strategic shareholder of Cleopatra.

Merger still needs the regulatory approvals: The transaction will require the approval of the Financial Regulatory Authority (FRA), the Health Ministry, and the Egyptian Competition Authority (ECA). Reports had emerged back in February that the latter thought the transaction could be anticompetitive — that’s a tough argument to make when the group would have just 4% of the private market in Cairo. Execution is also subject to the usual due diligence and conditions precedent.

Advisers: EFG Hermes is acting as financial advisor to CHG while Zulficar & Partners and Freshfields Bruckhaus Deringer are counsel. ALC Alieldean, Weshahi & Partners, Matouk Bassiouny & Hennawy, White & Case and Dechert LLP are counsel to Alameda Healthcare Group, while CI Capital is financial advisor.

THAT WASN’T THE ONLY M&A ANNOUNCEMENT YESTERDAY as B Investments has agreed to sell 20% of its stake in Total Egypt to Total Outre-Mer for EGP 146 mn, B Investments said in a statement (pdf). The sale would bring B Investments ownership stake in Total Egypt to 6.38% from 7.97% before the sale. The move is in line with exit terms pre-agreed with Total at the time of B Investments Holding investment in Total Egypt back in 2013, the company noted.


  • Industrial outfit MB Group’s subsidiary MB Engineering has finalized talks to acquire as an of yet unnamed competitor, MB Engineering said in a bourse filing (pdf) on Sunday. The low-voltage electrical parts supplier has said its competitor holds a 12% market share and that the merged entity would have annual revenues of c. EGP 700 mn.
  • Abu Dhabi Islamic Bank (ADIB) has received an offer to acquire its full 85% stake in the Alexandria National Company for Financial Investment (ANFI) from a consortium of investors, the bank said in a bourse filing (pdf) on Sunday. ADIB had received an offer last week from Kayan Sustainable Development to acquire ANFI.



India’s TCI Sanmar to invest USD 200 mn here next year

Indian industrial chemical manufacturer TCI Sanmar Chemicals is planning to resume its USD 200 mn investment in its Egyptian operations next year, the company’s Egypt CEO Sherif El Manoufi said, according to Al Mal. The investment will likely go towards expanding its production capacity of polyvinyl chloride and calcium chloride, with El Manoufi expecting a spike in demand of these chemicals on the back of infrastructure and national projects being greenlit and as Egypt looks to boost manufacturing of sanitizers. He anticipates that the company will “significantly grow” its market share in 1H2021.

TCI Sanmar had planned to invest USD 200 mn in 2020, but it appears that these have been put on hold due to limited demand caused by the covid-19 lockdown. El Manoufi noted that demand for products made by the company, including caustic soda, polyvinyl chloride, and calcium chloride had declined 30-50% in 2020.


Sign up for e-invoicing system — or else

The Finance Ministry is instituting a zero-tolerance policy on all large taxpayers that do not join the e-invoicing system by 1 July 2021, with plans in place to punish them and deny them basic services, benefits and incentives, Finance Minister Mohamed Maait said in a statement yesterday. The government had planned to have all large taxpayers join the e-invoicing system, which is currently running a trial phase of 134 companies, by May 2021, Mohamed Keshk, who heads an internal audit department at the Tax Authority’s large taxpayers’ division told us. New penalties facing large taxpayers (which number at around 2,800 companies) include:

#1- No longer being classified as a large taxpayer: The classification holds a number of distinct advantages that include expedited tax procedures, settlements, and less frequent auditing. These privileges will be taken away.

#2- Inclusion in Tax Authority’s black list: Part of the purpose of the system is to establish a black list of companies based on their level of compliance. These companies could face more frequent tax audits, and will become the focus of the ministry’s enforcement efforts.

#3- Cut off by the state: Government bodies and state-owned companies may cease all services and payments to these companies until they sign up for the e-invoicing system, the statement reads. This could include the company being barred from participating in state tenders and auctions.

#4- Kiss export subsidies goodbye: Large taxpayers will not be eligible to receive export subsidies until they sign up for the e-invoicing system.

What is this e-invoicing system, you ask? We have a primer on the system, it’s purpose, the timeline of implementation along with a list of phase one companies here.


Learning to love WtE

The government is planning to generate 300 MW of electricity from waste-to-energy (WtE) projects by 2025, Electricity Ministry officials reportedly told Al Mal. This new capacity will largely be built and operated by the private sector as the electricity and environment ministries plan to issue tenders for WtE plants under a Build-Own-Operate (BOO) framework to spur private sector interest in the field, the source added. Officials expect 4.2 mn tonnes of solid waste will be used to generate the targeted 300 MW.

Reversing lackluster interest of the private sector: WtE has been touted by the government as a big win for private sector companies looking to enter the space, particularly after approving a high energy tariff of EGP 1.40/ kWh. But despite the initial interest of some 92 companies, only 13 MW of electricity is currently being produced through five WtE companies, officials told the newspaper. The last news of private sector interest to come out of the sector were reports that Empower was considering a EGP 350 mn plant, but we’ve yet to hear of any developments.

The electricity glut coming home to roost: As we noted in our series on how the renewable energy sector is faring amid covid-19, Egypt now has too much generation capacity, producing 58 GW largely from hydrocarbons, while peak summer demand is in the range of 30-32 GW. This is threatening to temporarily halt investment in renewables and alternative energy. Particularly at risk is WtE, which has to also compete with wind and solar, WtE players told us back in July.

This has spurred the government to attempt to push the sector along, as the international cooperation, environment, and local development ministries formed a committee in September to request funding for such projects from international development partners.

IN OTHER ENERGY NEWS- EGAS is planning to raise domestic production of natural gas to 7.5 bn cubic feet (bcm) per day in FY2020-21, up from 6.5 bcm/day in FY2019-20, according to an EGAS report picked up by Al Shorouk.


Of lockdowns, stimulus, and vaccines

THE YEAR IN COVID- At the beginning of February, Egypt suspended flights to China and began to evacuate its citizens from Wuhan — the point of origin for the coronavirus — as the number of cases began to rise. Covid-19 then hit Egypt around two weeks later, when the first confirmed case of covid-19 was detected. Relative to regional and global peers, Egypt’s outbreak and the economic fallout have been, to a great extent, contained. This is thanks in no small part to a raft of medical, fiscal, and monetary measures that were introduced early on and in quick succession, helping to curb the spread of the virus that causes covid-19 and keep the economy — and Egyptians — afloat.

The Great Lockdown: After Egypt breached the 100-case mark, the Madbouly Cabinet decided in mid-March to ban large gatherings and ordered the closure of all schools and universities for an initial two-week period. Shortly thereafter, the cabinet announced it would suspend all inbound and outbound flights for two weeks, giving people wanting to return home a 2.5-day window to do so. The government spent the following weeks bringing stranded citizens home from all corners of the globe.

And then came the curfew: Cabinet imposed a strict 11-hour curfew, which entailed the complete closure of cafes, bars, gyms, and sporting clubs, and allowed shops to remain open for a portion of the day, while restaurants were only allowed to operate delivery services. The curfew was only lifted at the end of June — a few short days before Egypt reopened its airports to international commercial flights.

In the midst of all this was a whole lot of stimulus — both on the fiscal and monetary policy fronts. The Central Bank of Egypt (CBE) moved swiftly to protect the economy from the effects of covid-19 with a 300 bps preemptive interest rate cut in March — its largest on record — and announced it would allow borrowers a six-month payment holiday. The CBE then followed up with another two unexpected rate cuts of 50 bps apiece in September and November, bringing the grand total for 2020 to 400 bps. The rationale for the rate cuts was to continue supporting economic activity, particularly as inflation remained muted thanks to low consumer spending levels. The CBE also slashed interest rates for its financing initiatives for factories, homebuyers, and tourism companies to 8% from 10%.

The November rate cut was also designed to set the scene for a ramp-up in corporate borrowing going into 2021, especially after years of businesses keeping their capex borrowing on ice until interest rates come down to pre-float levels. Now, some 87% of businesses in Egypt say they plan to increase their investments in 2021, according to an HSBC survey.

The CBE separately rolled out debt relief initiative for individuals, with a decision to drop lawsuits against individuals at risk of default with debt under EGP 1 mn and scrub their names from i-Score’s blacklist as long as they pay 50% of the loan’s principal. The Financial Regulatory Authority also ordered mortgage lenders, and factoring and leasing companies to give a six-month grace period to any client who asks.

Other measures from the CBE designed to simultaneously simplify the flow of money and push digitization during the early days of the pandemic in March: Raising the ceiling on ATM withdrawals, scrapping fees on all EGP transfers between local banks and withdrawals from out-of-network ATMs, as well as adjusting the limit on mobile wallets and prepaid cards.

The government also acted fast with a package of fiscal measures to help support the economy and financial markets, including slashing taxes on EGX transactions, granting a three-month real estate tax holiday to companies in the industrial and tourism sectors, and lowering the cost of natural gas for the entire industrial sector. That payment holiday was extended until the end of 2020 before getting extended for a second time last week, with the Madbouly Cabinet deciding to exempt airlines, hotels, and other tourism establishments from paying real estate taxes from 1 January until 30 April 2021. These businesses are also being allowed to restructure utility debts.

The stimulus kept on coming… Just a few days after the first round of fiscal support measures, President Abdel Fattah El Sisi announced a stimulus and bailout package worth EGP 100 bn, which included a two-year suspension of the tax on agricultural land, hiking annual raises for pensioners to 14% as of FY2020-2021 and allowing pensioners to add the previous five raises to their pensionable pay at 80% of their basic wages (amounting to some EGP 27.6 bn disbursed to 2.4 mn families), and the CBE’s EGP 50 bn tourism bailout fund for impacted hotels. El Sisi announced the stimulus package included EGP 20 bn the CBE would allocate to support the EGX, which a senior official at the central bank told Enterprise would be used to directly purchase equities to support asset prices and stem market volatility caused by a covid-induced sell-off. Businesses in several affected industries were also given a breather with a two-month extension on the deadline to pay income taxes and a three-month extension on the deadline to pay corporate real estate taxes, without interest, fines, or late fees.

… and we could see yet more: Finance Minister Mohamed Maait said last month the government is prepared to roll out a fresh stimulus package if a second wave of covid-19 takes hold — but noted that the availability of a vaccine would change things.

The stimulus — and the lifting of the lockdown — helped the private sector get back on track into expansion territory in September as consumer demand picked up and business activity strengthened. The expansion momentum has so far carried through to October and November, albeit at a slower pace in November as fears over the second wave dimmed business’ outlook for business activity over the next 12 months.

Then there was the vaccine rush: Scientists and companies the world over jumped to develop a vaccine for the disease, and have managed to break all sorts of records in pushing out the inoculations with emergency approvals. Just two weeks ago, the UK became the first Western country to roll out a nationwide vaccination program, administering the Pfizer / BioNTech inoculation to its citizens based on risk-based priority. Egypt is securing its vaccine needs from several sources, including AstraZeneca, Pfizer, Russia, and China’s Sinopharm. Egypt was among the countries participating in clinical trials for Sinopharm’s vaccine, while Russia has signed an agreement with Egyptian drugmaker Pharco to distribute 25 mn doses of its Sputnik V vaccine.

So, what should we expect going into 2021?

The vaccines: Egypt had planned to begin the rollout of its vaccination program in the next couple of days, just in time for the new year, with the Health Ministry planning to distribute doses of the Sinopharm vaccine — which is 86% effective — last week. The government had announced it secured a total of 500k doses of the Chinese jab, with a plan to receive another 20 mn vaccination doses in 1Q2021. Hiccups in Beijing’s supply chain have delayed our receipt of the full shipment of the first 500k jabs, Cabinet spokesperson Nader Saad said yesterday, suggesting the kick-off of the vaccinations could be later than expected. Once it does begin, the vaccination program will prioritize frontline healthcare workers and citizens with chronic conditions, but we’re so far not clear on how long this stage is expected to take before healthy, younger citizens who opt into the vaccine can get their first dose. It is also still unclear how long the government expects it will take for us to secure our entire stock of required vaccine doses and administer those to the wider population. Egypt is also in talks to manufacture a vaccine locally, where Vacsera could export surplus production once local needs are met.

Economic recovery: With the vaccines, the global economy is expected to register 2-3% growth if the jabs that are administered are 85-95% effective, but these numbers will vary significantly between countries and individual industries, IMF executive board member Mahmoud Mohieldin said. Even before the vaccination program, Egypt was already widely expected to be the only country in the region to eke out growth in FY2020-2021. The EBRD has penciled in 5% growth for calendar year 2021, while the IMF expects our economy to expand only 2.8% in 2021, while Renaissance Capital most recently predicted 2.8% growth in 2021, followed by a resurgence to 5% growth in 2022.

These institutions all pointed to our years-long economic reform program as the key to helping Egypt come into the pandemic on solid footing, which has helped drive expectations that our economy will bounce back in the short and medium terms: The World Bank says Egypt’s economy will return to pre-pandemic growth levels as of FY2021-2022, while Fitch Solutions thinks we’re on track to grow at an average 4% clip over each of the coming four years.


Loans, green bonds, sukuks, and securitization were all the rage in the covid era

How heavy borrowing and new debt instruments sustained us during the pandemic: As the covid-19 crisis took hold, the government and the private sector were scrambling to secure funding. To keep economic activity going, the government launched a far reaching stimulus package that included a EGP 100 bn in fiscal spending and over 400 bps cuts in interest rates. Taking advantage of the cheaper debt domestically, and internationally (as a result of similar stimulus programs by the US Federal Reserve), both the government and corporations had to engage in heavy borrowing to sustain them through the crisis.

For the government, that took the form of new fiscal and development loans, while companies relied on securitized bond issuances. In keeping with our debt diversification strategy, both have had to turn to new instruments to expand their borrowing options, including sukuks and green bonds.

A little help from our friends in 2020: As in previous crises, the government turned to international development partners and lenders to secure emergency funding. By our count, Egypt signed for USD 25.6 bn in new fiscal assistance loans, development loans, eurobond, and green bond issuances in 2020.

USD 15.75 bn of these went towards fiscal stimulus and covid emergency funding. This included a USD 2.8 bn rapid financing instrument (RFI) in May from the IMF to help support its balance of payments as Egypt grappled with fallout from covid-19. The IMF followed that up a month later by approving a one-year USD 5.2 bn standby loan of which we’ve received USD 3.6 bn, to date. Egypt then closed a USD 2 bn financing package with regional and international banks to plug budget shortfalls resulting from the covid-19 crisis in late August.

The government also tapped the bond market with a USD 5 bn Eurobond issuance in May, which was 4.4x oversubscribed, having attracted bids for around USD 22 bn worth of bonds. It then tapped bond markets again in September with the region’s first ever green bond issuance, securing USD 750 mn in green bonds.

Egypt secured USD 9.8 bn in development financing from a variety of partners, including the World Bank, the European Bank for Reconstruction and Development, the African Development Bank and others, the International Cooperation Ministry said in its annual report. That funding went primarily towards meeting Egypt’s 2030 development goals and saw loans doled out for green projects, healthcare, women empowerment, and SME financing. USD 6.7 bn would go towards financing national projects, while USD 3.1 bn would go towards supporting the private sector.

Where does that leave our foreign debt position? External debt has more than doubled in the past five years reaching 30% of total debt, according to Pharos. Our foreign debt is expected to rise to USD 139.4 bn in FY2020-21, up from USD 123.5 bn in FY2019-20. That said, our external debt-to-GDP ratio remains fairly stable, hovering at around 35% for the past two years, and is expected to increase marginally to 36% by 2023, the investment bank notes (pdf).

CORPORATIONS ALSO TAPPED THE DEBT MARKET at an accelerated pace in 2020 as businesses looked to turn receivables into cold, hard cash. Bond issuances remained the mainstay of domestic debt in 2020, particularly for real estate players and non-banking financial services with receivables on hand. Our tracker suggests the market saw 12 securitized bond issuances and one unsecuritized issuance, raising some EGP 20.1 bn in 2020. By our count, this is down slightly from 18 securitized bond offerings last year worth some EGP 22 bn — a solid performance that speaks to confidence in consumers’ continued abilities to pay as well as to subscribers’ appetite for new venues to generate returns.

The most recent issuance came in last night, with Sarwa Capital issuing EGP 1.6 bn in securitized bonds backed by the portfolios of Sarwa subsidiary Contact Credit and its affiliate companies, the company said in a statement (pdf). By our count, that’s EGP 6 bn raised from the capital market by Sarwa in a challenging year as the company marks bond number 34.

Unlike last year, however, NBFS took a bigger slice of the pie, raking in EGP 8 bn in liquidity, with Corplease’s EGP 2.2 bn issue in January being both the single largest NBFS issue and the single largest private sector bond issuance. Real estate ultimately won out in large part due to NUCA’s EGP 10 bn issuance in July.

A number of big issuances are expected in 2021. In a statement (pdf) earlier this month, the FRA said that five companies were planning seven securitized bond issuances worth a combined EGP 9.3 bn in the near future, though the names of the companies were not disclosed. These will likely include a record EGP 2.5 bn offering by Corplease, expected to take place some time in 1Q2021. Meanwhile, AT Lease is looking at a EGP 1 bn offering, while property developer City Edge is looking at a EGP 600 mn offering in 2Q2021. TMG subsidiary Al Rehab Securitization also plans to issue EGP 885 mn in securitized bonds to finance the development of TMG’s real estate projects, though no clear timeline has been offered.

2020 saw the (quiet) debut of corporate sukuks and green bonds: Years in the making and after multiple legislative amendments, 2020 was supposed to be the year sukuks and green bonds take off. Covid ate into momentum, but we still close the year with the making of a market for corporate sukuk.

Out of an estimated four companies expected to issue sukuks this year, only TMG subsidiary the Arab Company for Projects and Urban Development and Sarwa Capital closed on sukuk issuance. These, however, did rake in a combined EGP 4.5 bn, falling marginally short of the EGP 5 bn in offering from the initial four companies. A third EGP 600 mn offering by education outfit CIRA is expected to close this week.

The picture is more dim with green bonds, as despite a successful sovereign green bond issuance, CIB did not move ahead with its USD 65 mn offering in collaboration with the International Finance Corporation (IFC) in 3Q2020.

The landscape for sukuks is expected to change in 2021, as the House of Representatives is expected to finally approve legislation for the issuance of sovereign sukuks in January. But even without sovereign sukuks, a total of EGP 10 bn-worth of sukuk will have hit the market by the end of 2021, Financial Regulatory Authority officials said last month.

Green bond issuances may remain heavily skewed towards the sovereign variety next year, as the government has made it clear that it plans to use green bonds as a major source of funding for key infrastructure projects. It is yet unclear whether CIB’s offering will go ahead in 2021 and the only other corporate offering we’re hearing of is Raya’s recycling unit BariQ, which is expected to take its green bonds to market in early 2021.

Also on our radar for 2020: Prospects for an active secondary market in corporate debt — and the prospect of new waves of corporate borrowing from the banking system to fund growth plans after borrowing by large corporations slowed this year on the back of the pandemic.


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The EGX30 fell 0.9% yesterday on turnover of EGP 808 mn (40.1% below the 90-day average). Foreign investors were net sellers. The index is down 24.2% YTD.

In the green: Dice (+4.7%), Cleopatra Hospital (+4.0%) and Ezz Steel (+3.5%).

In the red: Beltone Financial Holding (-3.2%), GB Auto (-3.1%) and Palm Hills (-2.6%).

It’s green as far as the eye can see this morning: Asian markets are up and futures suggest Wall Street and Europe will follow suit later in the day.




-0.9% (YTD: -24.2%)



Buy 15.66

Sell 15.76



Buy 15.65

Sell 15.75


Interest rates CBE

8.25% deposit

9.25% lending




+0.4% (YTD: +7.8%)




-0.6% (YTD: +6.9%)




-0.5% (YTD: -4.1%)


S&P 500


+0.4% (YTD: +16.4%)


FTSE 100


+0.1% (YTD: -12.1%)


Brent crude

USD 51.29



Natural gas (Nymex)

USD 2.52




USD 1,883.20




USD 27,174.13



After a weekend of high-stakes brinksmanship, mns of US citizens will get extended covid relief benefits and the Federal government will stay open past today. The news came overnight as Agent Orange finally signed a covid relief bill that he had refused to touch all weekend, tweeting, “Good news on Covid Relief Bill. Information to follow.” The story is getting serious play in the NYT and WSJ.

Closer to home, Egyptian security officials are in Libya’s capital for the first time since 2014 for talks with the Government of National Accord, rivals to the Egypt and UAE-backed forces of Haftar Khalifa in the east. The report also suggests security officials will also have a look at Egypt’s embassy in Tripoli, which has been closed since 2014. Their visit comes one week after intelligence chief Abbas Kamel was in Libya to meet with the GNA.


Making It Season One: A world before Covid

Remember a world before Covid? In season one of Making It, we spoke to a diverse group of founders and CEOs about what it took to successfully build great businesses in Egypt. These interviews took place shortly before Covid-19, but the stories about building resilient companies throughout devaluation and other economic hardships in the last decade remain insightful and relevant.

Not sure if you’re ready to take the leap? Try these one-minute trailers — look for the podcast player in the strip at the bottom of the page:

Or listen to full episodes on Apple Podcasts | Google Podcasts | Omny | Anghami.


As we look to close out Blackboard’s first full year, we thought it would be appropriate to run a recap of our Year in Review issues.

In part 1, we look at how covid-19 drove changes in the sector in a fundamental way and disrupted everything from where lessons are taught to how education is paid for. We also look at how despite this, education proved a defensive sector, with equities staging a rapid comeback and CAPEX investment remaining strong.

Part 2 looks at how internationalizing higher education became the major policy initiative of 2020. We explore the objectives of the policy, what steps took place this year to bring it about, and what is the likelihood of it improving quality and driving private sector investment and FDI.

Your top education stories for the week:

  • The Higher Education Ministry is launching a UCAS-style platform for private universities to accept incoming students this coming Spring semester. The platform will become mandatory for all universities starting from the Fall semester of the 2021-22 academic year.
  • International private school outfit El Rabwa Network is planning to invest EGP 1.2 bn next year on developing four schools in Future City, the local press reports.
  • The Egyptian Japanese University will launch 14 new departments in an EGP 10 mn expansion, Mubasher reports.
  • Beni Suef University inaugurated its New Technological College as well as 14 ICT focused labs, according to a statement.
  • Mid-year exams will be spread out between 10 January and 5 February to limit the number of students who are present in testing centers on any given day, , Education Minister Tarek Shawki said on Tuesday.


31 December (Thursday): Egypt-UK post-Brexit trade agreement to take effect.

31 December (Thursday): Deadline for car owners to comply with traffic regulations to install a RFID electronic sticker on their cars.

31 December (Thursday): Deadline for EGX-listed companies to comply with regulations requiring at least one member of their boards of directors be a woman.

1Q2021: The Annual Egypt Automotive Summit will be held.

January 2021: US Treasury Secretary Steven Mnuchin is set to visit Egypt.

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

5 January 2021 (Saturday): The annual GCC summit will be held in Riyadh, Saudi Arabia. The agenda includes potential resolution of the three-year-old spat with Qatar.

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

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship in four venues in Alexandria, Cairo, Giza and the New Capital.

Mid-January: Local expo to display natural gas-powered and dual-engine vehicles for Egypt’s car replacement program.

17 January 2021 (Sunday): A court will hold a postponed hearing to look into an appeal by Syria’s Anataradous against an arbitration ruling in favor of Amer Group and Amer Syria in case 445 of 2019.

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

25-29 January 2021 (Monday-Friday): The World Economic Forum’s “Davos Dialogues” will take place virtually.

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 2021 (Saturday-Thursday): Mid-year school break.

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

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).

18-21 May 2021 (Tuesday-Friday): The World Economic Forum’s annual meeting will be held under the theme of “The Great Reset” in Lucerne-Bürgenstock, Switzerland

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

30 May-15 June 2021 (Wednesday-Thursday): Cairo International Book Fair.

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).

17 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

30 June- 15 July 2021: National Book Fair.

2H2021: Egypt’s Commodities Exchange (Egycomex) will begin trading.

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

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

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

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

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

13-17 December 2021: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

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

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