Sunday, 3 January 2021

Egypt green-lights Sinopharm vax + schools ordered online until mid-Feb

TL;DR

What we’re tracking today

Good morning, wonderful people. It’s officially no longer 2020.

Since we last wrote to you, the UK’s tumultuous breakup with the EU after a 48-year union finally came to a close. After months of delays and highwire negotiations, the two sides managed to scrape together a last-minute trade pact, preventing a disorderly British exit. In what Reuters is calling the “most significant geopolitical shift since the loss of empire,” the UK has finally left more than 4.5 years after voting to do so, leaving the country divided.

With the completion of Brexit, Egypt’s new trade agreement with the UK came into effect. President Abdel Fattah El Sisi ratified last month the agreement, which UK Trade Envoy to Egypt Sir Jeffery Donaldson said previously could unlock a spate of fresh British investments in Egypt.

Here at home, the Finance Ministry launched the pilot phase of its unified tax platform on Friday. 11k of the country’s largest taxpayers must now file returns and pay taxes through the platform, which will also allow businesses to register for tax, settle unpaid taxes, and make enquiries to the Tax Authority. The move to an electronic platform will help the state ensure better oversight and put an end to tax evasion, the ministry said this weekend.

Abroad, all of that worry about a stock market bubble? New Year’s bubbly didn’t make it go away, Bloomberg reports. Look for this to be a recurring theme in the first months of the year, as we suggested in our 2020 in Review features last week.

DID YOU MISS OUR 2020 IN REVIEW ISSUES? Have a look at:

WHAT’S HAPPENING TODAY-

As of today, you will be subject to a EGP 50 fine on the spot if you’re caught in violation of a covid restriction, including not wearing a mask in a public venue such as the bank or on public transport.

New year, new GERD talks… Egypt, Sudan, and Ethiopia will be meeting with the African Union today to reopen discussions about the Grand Ethiopian Renaissance Dam after Sudan walked away from the last round of talks in November and called on more involvement from the AU in the negotiation process, according to Youm7.

…but with last year’s tensions? The Foreign Ministry summoned Ethiopia’s envoy to Cairo on Wednesday over comments made by the spokesman of the Ethiopian foreign ministry. While it wasn’t specified what comments they were referring to, Reuters writes it might be Dina Mufti, the Ethiopian foreign ministry spokesperson, saying that Cairo is criticizing the dam to cover several internal problems.

CIRCLE YOUR CALENDAR-

It’s a new a month — and you know what that means:

  • PMI: Purchasing managers’ index figures for December will land this coming Tuesday at 6:15 CLT.
  • Foreign reserves: Foreign reserves data for last month should also be out later this week.
  • Inflation: Inflation figures for December are due out on Sunday, 10 January.

US Treasury Secretary Steven Mnuchin is reportedly set to visit Egypt sometime this week as part of a brief regional tour that will be his last overseas trip as a White House official. We haven’t heard any details since last month, when Bloomberg reported Mnuchin will also make stops in Sudan, the UAE, Israel, and Qatar.

The expo for the government’s multi-year natural gas transition plan — the Go Green Exhibition — will start tomorrow and run until Wednesday at the National Exhibition Center on the Mosheer El Tantawy Road. The details of the government’s campaign to convert existing vehicles to natural gas engines will be announced at the expo, with plans to cover 70k cars that have been on the road for over 20 years in 2021— including 55k taxis and passenger cars and 15k microbuses. You can read more about the initiative here.

PSA #1- You now have a little more breathing room on the following deadlines:

  • Vehicle owners need to get their cars fitted with RFID stickers by 31 March, after the deadline was pushed for three months from the original 31 December 2020 date.
  • Property owners in violation of the building code also have until the end of March to settle with the government, which has granted the fifth extension since originally setting an end-of-August deadline.

PSA #2- It’s a short workweek as we head into a holiday weekend in observance of Coptic Christmas. A very Merry Christmas to everyone who will be celebrating on Thursday.

enterprise

COMPETITION WATCH

CHG-Alameda merger faces antitrust headwinds

Is the healthcare industry’s mega-merger facing a regulatory hurdle? Cleopatra Hospital Group’s (CHG) acquisition of 100% of Alameda Healthcare Group has not received the Egyptian Competition Authority’s (ECA) blessing, which said in a statement (pdf) last week that its preliminary decision is to not approve the merger. CHG had announced the sale and purchase agreement last week, with an eye to close the transaction in 1H2021, pending regulatory approvals.

So, what’s the ECA’s problem here? The competition watchdog suggests there are “indicators” the merger could have a negative impact on Egypt’s healthcare industry, saying an initial study of the country’s private hospital landscape found that the merged entity would monopolize services in the Cairo-Giza area. The ECA also suggests that this scenario could give the company more power over the labor market and allow it to lower wages.

But how big would the company really be? The merger would give Cleopatra control of some 1,450 beds, equating to around 15% of beds in private sector hospitals in Greater Cairo and 4% nationwide.

Then there’s just the small fact that the ECA doesn’t have a binding say on the matter (yet). The regulator doesn’t have the power to block mergers and acquisitions from taking place, and can only challenge agreements after they’ve been made. Proposed mendments to the Antitrust Act would change this, requiring companies to seek the authority’s approval before finalizing M&As. The changes are still making their way down the legislative pipeline, having received the green light from the cabinet in November. The amendments still require approval from the House of Representatives and ratification by President Abdel Fattah El Sisi before coming into effect — a process we doubt will wrap before the CHG-Alameda merger does.

CHG nonetheless acknowledged that the transaction is pending approvals, including from the Health Ministry, Financial Regulatory Authority, ECA, and shareholders, according to a bourse disclosure on Thursday (pdf). The company also said it has yet to submit a “complete application” to the ECA, which it is currently preparing and will address the ECA’s concerns.

ALSO FROM THE ECA-

Al Ahram Beverages Company has been engaging in monopolistic practices that violate the antitrust law, including forcing its clients not to do business with its competitors and offering loyalty markdowns, the ECA alleged in a statement (pdf). The company uses its market power to control prices and supply, which has forced some retailers out of business, prevented market competition and stunted investment in the sector, the ECA claimed. The statement made no mention of consequences or sanctions for the nation’s largest producer and distributor of alcoholic beverages.

MOVES- The ECA has appointed Mahmoud Momtaz (LinkedIn) as its new chairman, the Trade Ministry said in a statement. Momtaz holds a PhD in competition law and economics from the University of Hamburg, and has been a specialist on the private sector and competition expert at the World Bank since 2018. He’s also an ECA veteran, having worked at the authority between 2008 and 2018.

M&A WATCH

A spate of M&As to end the year

Abu Dhabi Commercial Bank (ADCB) has acquired a 51.5% stake in Alexandria Medical in a AED 64 mn (EGP 275 mn) transaction, Hapi Journal reported. The acquisition is part of a settlement owed to the bank by Emirati healthcare company NMC Health, which was brought to the edge of collapse last year after hedge fund Muddy Waters questioned its financial reporting that ultimately forced the company into administration. The company began selling off assets in May to raise funds to repay its creditors. The stake in Alex Medical — which was held by NMC’s former chairman and CEO BR Shetty — was used as collateral for Shetty’s loans from ADCB. The Indian b’naire, who had previously held 87.6% of Alex Medical’s shares, quit Alex Medical’s board last year after the results of the investigation came to light.

Advisors: Prime Securities Brokerage executed the transaction, while Zulficar & Partners provided counsel to the brokerage firm.

The National Bank of Egypt (NBE) acquired a 24% stake in Raya subsidiary Aman Holding in a EGP 480 mn transaction, the bank said in a bourse filing (pdf) on Wednesday. The acquisition will help the bank expand its non-banking financial services and micro-project financing, NBE Chairperson Hisham Okasha said. The bank was competing with 11 other bidders for the shares in the NBFS player and was expected to acquire 20-25% stake. Raya established Aman Holding last January as a parent for its three non-banking financial services arms: Aman Financial Services, Aman E-Payments, and Aman Microfinance.

Advisors: The NBE tapped Grant Thornton as financial advisor and Matouk Bassiouny & Hennawy as counsel.

State-owned investment bank NI Capital closed on Thursday its EGP 75.2 mn acquisition of Bank Audi’s Arabeya Online Brokerage, the local press reports. NI Capital and Bank Audi had signed the sale and purchase agreement in November, saying at the time the transaction was subject to regulatory clearance. Bank Audi had signaled in February it was looking to offload the entirety of its 100% stake in Arabeya Online shortly after announcing it was looking to sell its Egypt unit to First Abu Dhabi Bank amid the ongoing Lebanese financial crisis. Arabeya Online was founded in 2006 by current Public Enterprises Minister Hisham Tawfik and his brother, Hany.

Advisors: NI Capital appointed Shahid Law Firm as counsel and Mazars Mostafa Shawki as tax advisor, while Ernst & Young consulted on digital transactions. Bank Audi tapped Zulficar & Partners as advisor and Broadgate Advisers as financial advisor.

Beltone Financial is on track to finalize the sale of its 60% stake in New York-based brokerage Auerbach Grayson after earning approval from the US Financial Industry Regulatory Authority (Finra) last week, the investment bank said in a disclosure (pdf). The proceeds from the sale, which is valued at USD 2.8 mn (EGP 45 mn), will be earmarked for the expansion of Beltone’s non-banking financial services platforms and to support its other services, the statement says. Beltone had signed the stake over to a group of unnamed investors back in April after announcing last January its intention to offload its stake as a result of “large losses” it incurred since its purchase in 2016.

B Investments Holding is moving ahead with the sale of its entire 60% stake in tableware manufacturer Béard in a EGP 19 mn transaction after the decision was approved by B Investment’s board of directors on Wednesday, according to a bourse disclosure (pdf). Shahid Law Firm is buyer’s counsel on the transaction, we’re told.

COVID WATCH

Sinopharm vax gets OK, AstraZeneca here in weeks + schools ordered online until late February

Regulators approved the emergency use of China’s Sinopharm vaccine yesterday, Health Minister Hala Zayed told El Hekaya’s Amr Adib last night (watch, runtime: 1:25). The jab was green-lit last week by the ministry, but had to go through testing by the country’s pharma regulator.

The news comes as sinopharm has finally released interim data from final-stage trials showing the vaccine to be 79% effective against the virus. The effectiveness rate is getting wide play in the international press, from the Financial Times and Wall Street Journal to Bloomberg and CNN.

Vaccinations could begin sometime between the second and third weeks of January, Zayed said (watch, runtime: 1:37). The vaccination program was initially expected to kick off before the end of December but Zayed acknowledged that the rollout has been facing “challenges” (watch, runtime: 0:53). Reports late last month had suggested we faced delays stocking the first 500k doses because of supply chain issues in China.

The approval comes as covid-19 cases are surging: Daily cases have more than doubled over the past two weeks, reaching a recent peak of 1,418 on New Year’s Eve. The Health Ministry reported 1,407 new infections yesterday, on par with 1,409 on Friday. The ministry also reported 54 new deaths, bringing the country’s total death toll to 7,741. Egypt has now disclosed a total of 140,878 confirmed cases of covid-19.

Officials are working to expedite the shipment of Sinopharm shots. Zayed discussed the matter with China’s ambassador to Egypt after signing an MoU to cooperate more closely on vaccine distribution, according to a ministry statement.

The first shipment of AstraZeneca / Oxford vaccines will arrive by the third or fourth week of this month, Zayed also told Adib last night (watch, runtime: 3:06). The UK last week approved the jab for use, with the first shots arriving at hospitals yesterday, and India followed suit a few days later.

Overall, the government is presently looking to secure 100 mn doses, which is enough to cover 50 mn people, Zayed said (watch, runtime: 43:42). Those include 40 mn doses from Sinopharm, 40 mn from Gavi, the Vaccine Alliance, and 20 mn from AstraZeneca, she said. Also important: We’re in talks to begin local manufacturing at Vacsera’s highly regarded facilities.

The ministry will charge for vaccinations, but the Tahya Misr Fund will be tapped to cover the cost for healthcare workers, senior citizens, and vulnerable individuals with chronic medical conditions, Ittihadiya said in a statement.

SCHOOL + UNIVERSITY HAVE BEEN ORDERED TO GO ONLINE (again) and push their exams. The education and higher education ministries each issued directives to schools and universities across the country to take their classes online as of yesterday until 20 February. These institutions are also under instructions to administer exams after their mid-year break, which for state schools will run from 16 January through 20 February.

What does this mean for you and your kids? The Education Ministry statement says the directives apply to “all types of schools,” which we — industry insiders at top private-sector schools with whom we spoke yesterday — are taking to mean that international and private schools are also required to comply. The Higher Education Ministry outright says that all government, private, and national universities and higher education institutions are subject to the same regulations.

Heads of local government were granted powers of arrest to enforce the tighter covid-19 restrictions, especially the recent ban on parties and large gatherings, cabinet said yesterday.

Former Arab League Secretary-General Amr Moussa has tested positive for covid-19, his PR office said. The 84-year-old diplomat, who served as a Mubarak-era foreign minister and was a two-time presidential candidate, is in a stable condition, the statement says. Moussa was initially in isolation at home, but was later moved to a hospital on the advice of his doctors.

EgyptAir reportedly operated 10 repatriation flights to bring home Egyptian nationals who were stuck in Saudi Arabia after the kingdom issued a decision allowing foreign nationals to fly out following the suspension of international air travel to and from Saudi, RT reports.

TOURISM

Tourist arrivals plunge in pandemic year

The number of tourists to visit Egypt fell more than 70% y-o-y in 2020 to 3.6 mn, down from 13 mn in 2019, according to the Tourism Ministry’s annual newsletter. Tourism revenues plunged to EGP 4 bn during the year, down from EGP 13 bn in 2019, as average monthly receipts declined 85-92% due to covid. The majority of tourists (2.5 mn) visited the country in January and February before the pandemic ground the industry to a complete halt between March and July. Just 1.1 mn tourists visited the country in the second half of the year after authorities lifted travel restrictions.

In a parallel universe, tourism is booming: Tourist numbers were to have reached new record highs last year, possibly attracting some 15 mn people during the 12-month period. Then covid happened.

DEBT WATCH

Securitized bonds galore

CI Capital’s Corplease has closed a EGP 2.7 bn securitized bond issuance, the largest of its kind by a private sector company, investment bank Misr Capital said in a statement (pdf) over the weekend. The four-tranche sale was backed by EGP 3.4 bn in receivables from leasing contracts. The bonds pay out floating coupon rates that vary with the central bank’s overnight rate. Corplease, one of Egypt’s largest leasing companies, had completed a similar EGP 2.2 bn bond issuance roughly around the same time last year. Its latest sale comes as the securitized bond market has heated up amid the pandemic.

Who bought in? Banque Misr, Banque du Caire, Suez Canal Bank, Ahli United Bank, Abu Dhabi Commercial Bank, Bank ABC and the United Bank all got a piece of the issuance.

Advisors: Misr Capital acted as the financial advisor, lead manager, and underwriter. Its parent Banque Misr was an arranger, co-underwriter, and custodian. CI Capital acted as an arranger for Corplease, while Suez Canal Bank and Banque du Caire were co-underwriters. Law firm Zaki Hashem & Partners acted as counsel.

Who else sold securitized bonds? GB Auto subsidiary GB Lease took to market EGP 2 bn of bonds backed by EGP 2.7 bn in leasing receivables, Misr Capital said in a separate statement (pdf). The sale included three tranches, and also carried yields tied to the overnight lending rate.

Advisors: Banque Misr acted as arranger and underwriter, while Misr Capital was financial advisor, lead manager, and underwriter. BdC and Suez Canal Bank were co-underwriters. Dreny and Partners Law Firm provided advice.

CORRECTION- 3 January 2021: A previous version of this story incorrectly stated the roles of some advisors.

Drive Finance, also a GB Auto portfolio company, closed a triple-tranche EGP 892 mn securitized bond issuance, the proceeds of which will be used to trim its debt and expand in the market, the company announced (pdf) on Thursday. The bond tranches are divided as follows: A EGP 414.8 mn tranche with a 13-month tenor and AA+ rating; a EGP 407.6 mn tranche with a 36-month maturity and AA rating; and a third tranche worth EGP 69.6 mn carrying a 48-month tenory and rated A. The Middle East Credit Rating and Investors Services (Meris) rated the issuance.

Advisors: CIB acted as primary lead manager, arranger, and underwriter, and Dreny and Partners Law Firm as counsel.

Mortgage lender Qasatli issued securitized bonds worth EGP 700 mn last week, Managing Director Mohamed Youssef has said. The issuance is part of a larger plan to sell EGP 6 bn of asset-backed securities over the next few years.

Advisors: Qasatli signed a five-year securitization bond issuance contract with EFG Hermes to act as the sole financial advisor for issuances. Dreny and Partners Law Firm are acting as counsel.

Four subsidiaries of Amer Group Holding will sell EGP 607 mn of securitized bonds in a triple-tranche issuance after tapping the Financial Group for Securitization to manage the issuance, according to a bourse filing (pdf). The three tranches were rated AA+, AA, and A by Meris. The issuance will go to market once the necessary procedures and approvals are obtained, the company said without specifying a timeframe.

OTHER DEBT NEWS- The European Investment Bank (EIB) is providing Banque Misr with a EUR 425 mn credit line to support Egyptian SMEs and mid-cap firms that have been impacted by the pandemic by financing investment projects and working capital needs, it said in a statement. The initiative aims to boost private sector growth and employment in the country. The financing comes as part of the EIB contribution to the so-called Team Europe response to the covid-19 crisis that was launched last April to aid EU partner countries.

WHO’S IN THE MARKET FOR DEBT?

  • Gharably Integrated Engineering Co. (GIECO) has signed a EGP 3.8 bn syndicated loan agreement with the National Bank of Egypt, Bank of Alexandria, Suez Canal Bank, and Export Development Bank Of Egypt to upgrade the new Abu Qir Port, reports the local press.
  • The Alexandria Port Authority landed a EGP 1.8 bn syndicated loan from the National Bank of Egypt, Banque Misr, and Banque du Caire to develop internal railways and tracks and link them to the Sixth of October Dry Port with a cargo line, Al Mal reports, citing unnamed sources.
  • CIB picked up EGP 500 mn of Sarwa Capital‘s most recent EGP 1.6 bn securitized bond issuance that was backed by the portfolios of Sarwa subsidiary Contact Credit and its affiliate companies, Al Mal reports.
  • Albatros Holding is in talks with South African fund manager Vantage Capital for a USD 40 mn convertible loan to finance three planned hotels, the local press reports.

CAPITAL MARKETS

EGX to help brokerages offer short selling

The EGX could move to slash the cost of the electronic system needed to short sell on the bourse if brokerages request a lower price tag, EGX Chairman Mohamed Farid said at a virtual presser on Thursday, according to Al Mal. The EGX has not, however, received any complaints from brokerages about the cost of the system, Farid said at the presser, in which he recapped the bourse’s year-end report (pdf). Reports in the local press in 2019 had suggested that brokerage firms voiced concerns to the Financial Regulatory Authority that they would be unable to fork out the USD 9,500 (EGP 153k) required for the system. The reports had indicated that EGX officials were working with their software developers at the time to reduce the price.

Background: Short selling was launched on the EGX at the end of 2019 but has had a lackluster year since. In the first four months of 2020, the bourse only saw “a handful” of short selling transactions worth EGP 100k, which Misr for Central Clearing, Depository, and Registry Managing Director Tarek Abdel Bari said at the time is anemic. Abdel Bari had suggested the pandemic-induced equity sell-off at the beginning of last year was a golden chance for investors to book gains, but few took advantage. Some analysts had previously speculated that brokerages simply don’t understand how the short selling system operates.

ON THE IPO PIPELINE: Covid-19 killed or postponed 4-5 IPOs that were expected to hit the EGX in 2020, Farid said, without naming the listings. By our count, Banque du Caire’s hotly anticipated IPO was postponed and the state’s stake sale program was kicked back again, while the pandemic may have permanently shelved the IPOs of Nile Air as well as Qalaa Holding’s TAQA Arabia and Arab Refining Company. Separately, Farid reiterated that any military-affiliated companies that list on the EGX — including Wataniya Petroleum and bottled water brand Safi — will abide by all listing and disclosure rules.

AND IPO DREAMS: The bourse is in talks with 88 companies about listing on the exchange, Farid said. Our super-secret IPO tracker counts 85 companies that have indicated in recent years an interest in IPOing, with 15 of them carrying an Enterprise Realness Rating of three or more on a scale of five.

ALSO FROM THE BOURSE: The EGX wrapped the third round of its training program to increase financial literacy among young people and equip them with the knowledge and skills to be executives, according to an emailed statement (pdf). The training is part of an agreement the EGX signed in 2019 with the National Training Academy.

EGX LEAGUE TABLE FOR 2020- EFG Hermes once again sits at the top, holding a market share of 20%, according to Al Mal. CI Capital came in second with 7.7%, followed by Beltone with 5.9%, Pioneers with 5.6%, and Pharos with 5.4%.

ENERGY

Oil + gas news steps up a gear

The Oil Ministry signed nine oil and gas exploration agreements worth more than USD 1 bn with six international and Egyptian companies — ExxonMobil, Chevron, BP, Total, Royal Dutch Shell, and South Valley Egyptian Petroleum Holding Company — to drill 17 new wells in parts of the Mediterranean and Red Sea, according to a ministry statement. The nine agreements will see a minimum combined investment of USD 1 bn, and another three pending agreements will add another USD 400 mn of investments, the statement says. Bloomberg also picked up the statement.

MORE ON THE ENERGY FRONT: Egypt has renewed its agreement with Iraq to import 12 mn bbl of crude oil in 2021, according to Al Mal.

enterprise

CABINET WATCH

GASC could be creating its own shipping company

GASC looking to ship commodities for itself? The General Authority for Supply Commodities (GASC) will be allowed to contribute to the establishment of a shipping company to transport commodities under a draft law the Madbouly Cabinet approved during its weekly meeting on Thursday, according to a statement. The bill would allow the state grain buyer to ship commodities in and out of the country and own a fleet of commercial ships. The company would be named Atlantic Pacific Shipping and Trade Co. As it currently stands, GASC often taps the state-owned National Navigation Company to transport the commodities it buys in tenders, according to Reuters.

Why the shift? The statement doesn’t spell out why GASC could be looking to handle commodity shipments on its own, but the state grain buyer had reportedly been mulling asking commodity suppliers to offer their prices on a cost and freight basis, rather than the traditional [redacted]-on-board (FOB). While cost and freight agreements make the seller responsible for arranging and paying for shipping or freight, FOB agreements only require the seller to own and be responsible until it is loaded onto the shipping vessel. Since FOB agreements put the responsibility and cost of any loss or damage to the goods on the buyer, GASC could be looking to cut costs or losses by relying on its own shipping.

Also approved during the meeting: A government committee recommendation to regularize the status of 62 churches and their affiliated buildings and a presidential decree to restructure the Supreme Ports Council, headed by the prime minister.

YEAR IN REVIEW

What happened internationally in 2020

2020 in review on the global fronts — rethinking portfolios, Fed stimulus, tech, and ESG: Bloomberg recapped the trends of one of the most interesting years in global investing that challenged the relationship between stocks and bonds, and the resilience of tech and ESG. The business information service cites several key 2020 takeaways from global asset allocators including BlackRock and JPMorgan Asset Management.

The most exciting part of the story began in March, when both debt and equity markets tumbled almost overnight, challenging a long-held view that a negative correlation exists between stocks and bonds. Then, as governments and central banks flooded markets with liquidity, few expected such a speedy turnaround, recounts the business information service. “Normally you get more time to position your portfolio in a correction … [but] markets [were] moving so fast,” Mumbai-based co-chief investment officer Mahesh Patil said.

And nothing this year rallied faster than tech: The top 10 US stocks that led the post-March rally were all tech-related. Investors need to adopt valuation methods for tech stocks that take into account intangible factors such as goodwill and intellectual property, and not just traditional methods, Hong Kong-based Principal Global Investors’ Alan Wang says.

Assets linked to ESG also outperformed, the Financial Times says, proving wrong many sustainability doubters. An FTSE gauge of stocks involved in clean energy, climate change, and ESG is up 35% so far into the year due to large inflows by funds shifting their strategies toward impact investing. Those funds increase their ESG-linked assets under management by some 32% this year to a record USD 1.82 tn, data compiled by Bloomberg showed.

If it’s one thing market volatility has shown us, it’s the power of bottom-up portfolio building, or selective investing in strong companies able to withstand rough patches. “The resilience of stocks in a year like this helps to prove their worth and justify their higher valuation multiples in a low rate world,” BlackRock chief investment officer of US active equity Tony DeSpirito says.

Another defining factor for 2020: It was a boom for actively managed hedge funds, which posted their best performance since 2010, according to figures by data provider HFR cited by the Wall Street Journal. Hedgies outperformed relative to the S&P 500, making an average return of 11.9% between January and November. Their performance was described as something of a comeback after years of trailing behind a portfolio of grouped stocks and bonds, the WSJ cited Goldman Sachs as saying.

Egypt in the News

Egypt’s #MeToo movement is leading coverage in the international press this morning: Haaretz reports on accusations being levelled at film director Islam El Azzazi while Reuters discusses the recent detentions of witnesses to the 2014 Nile Fairmont attack.

Also making headlines: The latest in the case of murdered grad student Giulio Regini (Reuters), Voice of America on press freedom, snake massages (Reuters) and the Gray Lady on rowing the Nile (New York Times).

Also on our radar

Other business news from the weekend that we’re keeping an eye on:

  • Orascom Construction is distributing an interim dividend of USD 0.21 per share later this month.
  • The first public auction to sell stores in the new administrative capital’s third residential neighborhood (R3) launched last week, with 18 shops sold. The second auction will take place on 7 February.
  • Egyptian Chemical Industries (Kima) has completed its EGP 11.6 bn Kima 2 ammonia factory in Aswan which will have a production capacity of 1.2 tonnes per day of ammonia and 1.5k tonnes of granular urea.
  • Tenders to set up three commercial + logistics parks in Qalyubia will be offered to investors by the Supply Ministry’s Internal Trade Development Authority in 2021.

Planet Finance

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The New York Stock Exchange is moving to delist three Chinese telecom companies with ties to the Chinese army, it said in a statement on Thursday. The move to take the shares of China Mobile, China Unicom, and China Telecom off the NYSE comes after US President Donald Trump blocked American investments in 31 Chinese firms that he claimed are connected to the military. China plans to take “necessary measures” to protect its companies from what it called an “abuse of national security and state power to suppress Chinese firms.”

Oil exporters need to decide in 2021 if they can continue relaxing supply curbs while keeping prices stable, Bloomberg says. OPEC+, the Saudi- and Russia-led alliance of producers, faces a “delicate balancing act” when it meets tomorrow as it weighs whether to lift production restrictions imposed last year to arrest the market collapse caused by the coronavirus and Riyadh’s price war.

Down

EGX30

10,845

-0.2% (YTD: -)

Down

USD (CBE)

Buy 15.68

Sell 15.78

Down

USD at CIB

Buy 15.68

Sell 15.78

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

8,689

-0.8% (YTD: -)

Down

ADX

5,045

-0.8% (YTD: -)

Down

DFM

2,491

-1.0% (YTD: -)

Up

S&P 500

3,756

+0.6% (YTD: -)

Down

FTSE 100

6,460

-1.5% (YTD: -)

Up

Brent crude

USD 51.80

+0.3%

Up

Natural gas (Nymex)

USD 2.54

+4.8%

Up

Gold

USD 1,895.10

+0.1%

Up

BTC

USD 32,601.98

+11.4%

The EGX30 fell 0.2% on 31 December — closing the year down 22.3% on turnover of EGP 1.2 bn (10.5% below the 90-day average). Foreign investors were net sellers. The index finished 2020 down 22.3% YTD.

In the green: Pioneers Holding (+2.8%), Palm Hills (+2.2%) and Beltone Financial Holding (+2.0%).

In the red: Ezz Steel (-3.4%), Ibnsina Pharma (-2.9%) and Sidi Kerir Petrochemicals (-2.4%).

Around the world

IN DIPLOMACY: Reconciliation with Qatar was the topic of a letter from Kuwait’s new emir, Nawaf Al Ahmad Al Jaber Al Sabah to President Abdel Fattah El Sisi. The letter was handed over in a meeting in Cairo yesterday between El Sisi and Kuwaiti Foreign Minister Ahmad Nasser Al Sabah to discuss the Gulf nation’s efforts to find a breakthrough in the 3.5-year diplomatic spat. Kuwait has been leading mediation efforts to end the embargo on Qatar by the Arab Quartet, which include Egypt, Bahrain, the UAE, and Saudi Arabia, and reestablish diplomatic relations.

Meanwhile, El Sisi and the chairman of Sudan’s ruling council Abdel Fattah Al Burhan discussed cooperation and regional developments over the phone yesterday.

On Your Way Out

Veteran Egyptian screenwriter Wahid Hamed passes away, aged 76

Veteran Egyptian screenwriter Wahid Hamed passed away at age 76 after suffering from health problems, his son and film director Marwan Hamed said on Facebook. Hamed wrote over 80 films in his lifetime including Toyor Al Zalam and Omarat Yacoubian.

Hamed’s death received plenty coverage on the airwaves last night: Al Hayah Al Youm (watch: runtime: 1:53), Kelma Akhira (runtime: 1:59), Masaa DMC (runtime: 3:29), and El Hekaya (runtime: 9:10).

Calendar

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

4-6 January: (Monday-Wednesday): The Go Green Exhibition will be held in The National Exhibition Center on the Mosheer El Tantawy Road. The expo is part of the government’s campaign to convert existing vehicles to natural gas engines.

7 January (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.

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

25-29 January (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 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

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

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

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

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

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

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

25 April (Sunday): Sinai Liberation Day.

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

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

3 May (Monday): Sham El Nessim.

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

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

18-21 May (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 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

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

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

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

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

30 June- 15 July: National Book Fair.

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

1 July (Thursday): Large taxpayers that have not yet signed on on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

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

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

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

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

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

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

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

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