Thursday, 14 October 2021

EnterpriseِAM — We go one on one with the Finance Ministry’s Ahmed Kouchouk. In part 1, it’s all about debt.

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, everyone, and welcome to the final workday of week 41 in this crazy year. We have an exceptionally busy issue for you this morning, so let’s jump right in:

IPO WATCH- An unnamed strategic investor is after 10% of the shares e-Finance is offering on the EGX and has formally made an offer to the lead manager, Al Borsa reported, citing sources it says are close to the matter. The state-owned company kicked off the subscription period for the retail offering of its IPO on Sunday and is pricing it EGP 13.98 per share, the top end of the EGP 12.50-13.98 range on which it had guided. The subscription period for the retail offering — which is due to wrap up next Sunday, 17 October — is already 4.5x oversubscribed, the sources said. e-Finance has already bumped up the size of the offering, apparently in response to significant demand from institutional investors.

Egypt’s banks will adopt the Tax Authority’s e-invoicing system, the Finance Ministry said in a statement yesterday. The system has been up and running since November 2020, when its first phase started, with 134 companies logging their invoices electronically to the Finance Ministry’s platform as part of the ministry’s efforts to clamp down on tax evasion and compel companies that have not registered with the Tax Authority to do so. We were previously told that all tax-paying companies would be enrolled in the system by April 2023.

PSA #1- We’re getting a long weekend next week. The prime minister’s office has confirmed the public sector officially off on Thursday, 21 October off in observance of Prophet Muhammad’s Birthday, which falls on Monday, 18 October. That means you can expect word from the EGX and the Central Bank of Egypt in the coming couple of days declaring that next Thursday is a holiday for Planet Finance, too.

PSA #2- Exporters using CargoX to ship goods into Egypt will now pay a flat fee of USD 150 to upload ACI shipping documents after the Egyptian government reached an agreement with the platform, which had been mulling raising the minimum fee to USD 400. CargoX is the sole blockchain document transfer gateway service provider for the newly-implemented Advance Cargo Information (ACI) system, which became mandatory for importers to use at the beginning of the month.

CONGRATS to our friends at Dawi Clinics, which has just opened its first branch in Suez. That makes it the fifth governorate and thirteenth branch for the fast-growing primary care company. Dawi’s CEO is Magda Habib (LinkedIn), who gave us our start in business back in the day.

HAPPENING TODAY-

Shoukry to hold talks with US Senator Menendez, UN Syria envoy: Foreign Minister Sameh Shoukry will sit down with Bob Menendez, the chairman of the powerful US Senate Foreign Relations Committee, and United Nations Special Envoy for Syria Geir Otto Pedersen, who are both in town today. Expect Egypt-US relations and regional political affairs to feature heavily on the agenda.

El Gouna Film Festival kicks off later today and will run until 22 October, despite a fire that broke out in a section of the Gouna Film Festival Plaza yesterday in which there were no fatalities. At least eight people were hospitalized to be treated for smoke inhalation. Only one section of the festival plaza was damaged, and that the event should proceed as planned, . festival organizers said. This edition of the event promises to bring together a selection of international narrative, documentary, and avante garde films. You can check out the full program here.

** CATCH UP QUICK with the top stories from yesterday’s edition of EnterprisePM:

  • The benchmark EGX30 is back in the green for 2021 YTD after gaining 0.9% yesterday, marking the seventh consecutive session in which the benchmark index posted gains.
  • US inflation accelerated in September to 5.4% as both supply and labour shortages continued to drive up prices.
  • The green energy transition is gaining pace — but not enough to avert catastrophic warming, according to the International Energy Agency.

THE BIG STORY ABROAD- It’s a dog’s breakfast in the global business press. CNBC is leading with the US Fed’s latest meeting minutes, released yesterday, which say that the central bank could start tapering its stimulus program as early as next month. The Financial Times explains that China Evergrande’s meltdown is locking other Chinese developers out of the global debt market, and the Wall Street Journal is still leading with yesterday’s September inflation numbers in the US. Reuters, meanwhile, has more on US President Joe Biden’s bid to debottleneck part of the supply chain by having big retailers and logistics companies work 24/7 in ports to clear backlogs.

PSA #3- For Trekkies: William Shatner survived becoming the oldest person to ever reach the final frontier after Jeff Bezos shot him to to the edge of space on Blue Origin’s latest tourism flight.

MARKET WATCH-

US earnings season has kicked off with signs that banks may be immune to the storm: JPMorgan Chase brushed off talk of an earnings squeeze in the banking sector as it posted a bumper USD 11.7 bn bottom line, well exceeding analysts’ forecast of USD 9.4 bn, the FT reports. The strong start to 3Q earnings season in Amreeka suggests banks may have so far escaped the worst of the supply-chain disruption and price rises that have dented other sectors. “Underlying everything, we’re still seeing a strong consumer, strong businesses, a lot of capital, a lot of credit,” JP Morgan chief exec Jamie Dimon told reporters.

Expect to learn more today and tomorrow. Bank of America, Citigroup, and Morgan Stanley are up today, while Goldman Sachs is due to release its financials tomorrow.

CLOSER TO HOME- Erdogan issued a decree overnight sacking three members of the central bank’s interest rate committee after meeting with captive bank governor Sahap Kavcioglu last night. “The changes rid the committee of members who disagreed with Erdogan’s calls to continue cutting interest rates,” Bloomberg notes, reminding us all that the nutter in Ankara has declared himself an “enemy” of interest rates. The news pushed the TRY to a a new record low overnight against the USD.

Also not helping: Currency exchange bureaus in Turkey will now be required to record their clients’ personal information. Erdogan’s Finance Ministry claims the rules, which previously only applied to amounts over USD 3k, are not a sign he’s meddling in the FX market.

enterprise

ECONOMY

The Egyptian government to look at markets again in Feb, March

EXCLUSIVE- How 2022 could be a big year for Egyptian debt, according to FinMin’s Ahmed Kouchouk: Through a mixture of stimulus funding, tax breaks, high interest rates, timely eurobond issuances, and the adoption of new debt instruments (namely, green bonds), Egypt was largely shielded from from the heaviest macroeconomic blows of the pandemic last year. While GDP growth came in at just 3.6% in 2020 according to the IMF (pdf, see page 40), we outpaced the global economy (where growth came in at negative 3.1% in 2020) and our emerging market peers (where GDP contracted 2.1% in 2020), according to data from the IMF (pdf).

The landscape in 2021 is changing, however, as the world attempts a post-pandemic recovery. High inflation globally and here at home is adding new impetus to policymakers’ push to taper stimulus and raise interest rates. The most prominent of which is the Fed, which hinted last month that it could start to wind down its asset-purchase program in November and raise interest rates as soon as next year. This puts emerging-market debt — including ours — at risk of becoming less attractive to foreign investors.

In Part 1 of our exclusive interview with Vice Minister of Finance Ahmed Kouchouk we take a look at how Egypt’s debt policy is adapting to the times. Below are edited excerpts of our conversation:

Look to 1Q2022 for our next eurobond sale: Egypt will be looking to tap international debt markets again in February or March 2022, Kouchouk tells us. This comes on the back of Egypt’s successful USD 3 bn eurobond sale last month, which was 3x oversubscribed. Egypt’s previous eurobond sale saw us net USD 3.75 bn and was 4x oversubscribed.

…and 2Q2022 for our maiden sovereign sukuk sale? While Kouchouk did not outright reveal the exact timing of when Egypt will kick off our first sovereign sukuk sale, he did state that we should be “procedurally” ready to go some time in 2Q2022. The government is currently on track to complete the procedures required to issue sovereign sukuks under the new Sovereign Sukuk Act, which include setting up the Sovereign Sukuk Company, a joint stock company to execute and manage sales.

Size of the issuance is still a mystery: Kouchouk did not disclose how big our sovereign sukuk issuance would be, but Finance Minister Mohamed Maait had hinted earlier this month that it could be in the range of USD 500 mn.

Green bonds are so last year. Hello, development bonds: “We are currently in talks with banks and international institutions to expand the framework of our sovereign green bonds into more comprehensive development bonds,” Kouchouk tells us. They include social bonds (bonds used to fund social infrastructure) and blue bonds (for water projects) and others. “We were encouraged to expand the framework after our success in the green debt market,” which has grown globally to USD 300-400 bn, he noted.

2022 could also likely be the year of the Fed’s stimulus tapering. What can we expect? Should the Fed decide to raise interest rates, it could trigger some volatility in global markets in the medium term, Kouchouk said.

Stay calm, and borrow on: Fiscally, we are in a good position to adapt to a decision by the US Federal Reserve and we should withstand any emerging market shocks and sellofs that could result from such a decision, Kouchouk noted. Our successful bond issuances, which have garnered plenty of interest from investors, have drawn enough inflows to cushion us from these shocks.

But we must remain vigilant: “We’re also constantly monitoring the potential effects of rising US rates on Egypt’s borrowing costs as well as any indicators on when the Fed might proceed with its tapering,” Kouchouk says. That is evident from the timing of last month’s eurobond issuance, which followed the Fed’s statement that it could wind down its asset-purchase program in November, he noted.

How strong is this cushion? Foreign holdings of Egypt’s debt currently sits at around USD 30 bn, Kouchouk tells us.

And we can look forward to more inflows as a result of our inclusion in the JP Morgan and FTSE Russell indices, he noted. (More on that below.)

When should we expect our debt to become ‘Euroclearable’? There is no specific date yet on when our bonds can be Euroclearable, Kouchouk says. Travel restrictions to Egypt had been the reason behind the hold up in the process. “For our part, we have completed all the procedures,” Kouchouk continued. Last month, it was reported that the Finance Ministry will likely miss its target of making local Egyptian debt “Euroclearable” by November. The government was originally expecting to have wrapped up technical discussions with Euroclear between September and November but according to statements made by Finance Minister Mohamed Maait yesterday it may now have to wait until 2022.

So, with all this borrowing, what does this mean for our debt reduction strategy? “We remain steadfast in reducing our debt service burden to 32% of our expenditures in the coming years from a current 38%,” Kouchouk notes.

IN PART 2, Kouchouk reveals what the Finance Ministry has in store for the private sector, from taxation policies, to export subsidies, to incentives and the Economic Reform Program 2.0. Be sure not to miss it.

DEBT WATCH

Our sovereign debt should finally be back on JPMorgan EMs gov’t debt index in January 2022

Egypt is expected to make it back onto JPMorgan’s emerging-market sovereign bond index by the end of January 2022, the US investment bank said in a research note picked up by Reuters. The country is eligible for a weight of close to 1.85%, with 14 government bonds with a combined value of USD 26 bn due to join, it added. This wouldn’t be the first time Egypt has been a part of the index, having been booted off in the wake of the economic turmoil that followed the 25 January Revolution in 2011.

About time: The US investment bank said in April it had placed Egypt, along with Ukraine, under review and that it will make a decision on inclusion in six months’ time. This came on the back of both countries’ steady improvement in liquidity and access to onshore sovereign debt.

The potential benefits: Inclusion is expected to generate USD 1.4-2.2 bn in passive inflows by index-tracking funds into EGP-denominated debt, research analysts at the investment bank previously said. Finance Minister Mohamed Maait at the time put the figure higher at USD 4.4 bn, while an economist at South African financial services company RMB Holdings estimated USD 4.8 bn. Authorities have been working towards this goal for over two years in a bid to cut borrowing costs and boost inflows.

Why we’re eligible now: Egypt now has a combined nominal USD 28.2 bn in longer-term bonds maturing in over 2.5 years, which is the minimum maturity for inclusion in the index. Egypt’s strong performance since completing the IMF reform program has paved the way for a compression of its debt to GDP ratio, and improved liquidity as well as improved access for foreign investors to sovereign debt will have also played a role.

Egypt made it onto FTSE Russell’s new frontier-market sovereign bond index launched in June, which the Finance Ministry believes should attract another USD 4 bn in inflows.

Foreign holdings have rebounded to new record highs this year following the emerging-market sell-off that accompanied the first wave of the coronavirus in March. Foreign investment in bills and bonds rose to a record USD 33 bn at the start of August, after having fallen to a nadir of USD 10.4 bn in May 2020.

ECONOMY

Egypt’s budget deficit is expected to narrow to 6.3% of GDP –IMF

Egypt’s budget deficit is still expected to narrow by the end of the current fiscal year, but will shrink at a slower pace over the next several years than previously expected, the IMF said in its latest Fiscal Monitor Report (pdf).

The IMF now sees the budget deficit narrowing to 6.3% of GDP by the end of the current fiscal year, compared to 7.3% in FY2020-2021. Although that may seem promising, the 6.3% figure is up 0.5 percentage points from the fund’s previous forecast for the FY2021-2022.

Looking further ahead: The fund’s October projections see the deficit continue to drop until it hits 4.4% of GDP in the FY2025-2026. A slight increase from the 4.2% figure forecasted in the fund’s April report and a bigger increase from last year’s forecast of 3.8%.

The report is expecting the primary surplus to see a slight improvement than previously thought, coming in at 1.7% of GDP at the end of the current fiscal year which will end on 30 July, 2022, from the previously forecasted 1%.

The fund is anticipating a slight increase of 0.2 percentage points in public spending: It now sees spending rising to 27.4% of GDP in FY2021-2022 from the 27.2% recorded during the last fiscal year, which was down from the fund’s 27.9% forecast. The Egyptian government will soon be subject to new budget regulation after the Senate gave its preliminary approval of the Unified Budget Act, which would govern the state’s annual budget and government accountability into an updated bill that accounts for modern budget preparation processes and erases overlap between different pieces of legislation.

Although the country’s debt is lower than expected: The current fiscal year’s gross debt saw a slight drop to 89.5% from the 88.9% predicted during the fund’s last report in April and a significant drop from last year’s debt, which recorded 91.4%. Debt will continue on its downward trend until FY2025-2026, when it reaches 74.1% and gross financial needs for the current fiscal year will take up 36.9% of the GDP.

With debt decreasing and revenues on the rise, things are looking up for the Egyptian economy as its financial gap becomes smaller and smaller: Revenues are forecasted to rise to 21% in FY2021-2022 from the 19.9% during the last fiscal year and will slowly tick up to reach 21.6% by FY2025-2026.

Additional indicators: Healthcare spending will see a 0.2% rise from 2020-2030. The report is projecting a 2.1% drop in interest rate growth from 2021 to 2026, which comes in line with the Central Bank of Egypt leaving interest rates unchanged for a seventh consecutive meeting last month.

The report’s fiscal projections for Egypt are mainly based on budget sector operations and they are based on the budget for the fiscal year 2021-22 and the fund’s macroeconomic outlook.

These projections come shortly after the IMF slightly downgraded its projection for global growth in 2021 to 5.9% in its October World Economic Outlook report (pdf) — down a slim 0.1 percentage points from 6% in its last update in July.

ENERGY

Egypt-Greece electricity linkage will make headway with MoU signing today

Egypt and Greece are set to agree on building an undersea cable through which Egypt will export surplus electricity to Greece, with the two countries set to sign an MoU in Athens later today, a Greek Energy Ministry official tells Reuters. The subsea cable comes as part of the USD 4 bn EuroAfrica Interconnector project, which will connect the electrical grids of Egypt, Greece, and Cyprus. The project comes as part of Egypt’s ambitions to become a regional energy hub and exporter of green energy to Europe. Egypt, which has committed to producing 42% of its electricity from renewables by 2035, produces an excess of solar energy, which is notoriously hard to store.

What’s the progress on the linkage so far? The first, EUR 2.5 bn phase of the project will connect the three countries’ grids and is set for commissioning by December 2023 with an initial capacity of 1 GW. The project has been in the works for a while, as Cairo, Athens, and Nicosia signed the framework agreement back in 2019. The project comes at a time when Europe is experiencing the first (but certainly not last) renewable energy crisis in the renewable energy transition.


OTHER ENERGY NEWS- Egypt’s LNG exports are set to rise this month compared to September, as shipments from the Idku liquefaction plant and the recently-revived Damietta plant ramp up, industry insiders told Reuters yesterday. Five shipments have already sailed so far into the month, with a vessel currently loading at the Idku plant, and another due on 16 October, according to data intelligence firm Kpler. The intelligence firm expects three shipments to leave each of the Idku and Damietta plants in the first half of October, compared to a total of five during the entire month of September. The increase also owed to a sell tender recently launched by state-owned EGAS for shipment on 31 October.

The numbers: The country exported a record 4.3 mn tonnes of LNG in 9M2021, up from only 0.45 mn tonnes a year earlier, thanks to an improvement in local supplies and in the pricing environment, a Kpler analyst told Reuters. Egypt exported 1.4 bn tonnes in 2Q2021, compared to none over the same period last year.

Egypt became a net exporter of LNG in 2018 after the discovery of the supergiant Zohr gas field — the Mediterranean’s largest — allowed us to pull the plug on LNG imports. While Egypt was the Middle East’s biggest LNG importer in 2016 and 2017, it made the largest contribution to the growth of Arab countries’ LNG exports in 2Q2021, according to a report by the Organization of Arab Petroleum Exporting Countries (OAPEC) issued in August.

Egypt’s LNG exports also picked up steam after we brought the Damietta liquefied natural gas (LNG) plant online earlier in the year following an eight-year hiatus. The revival of the plant was expected to boost Egyptian natgas supplies to Europe, at least 30 LNG shipments have made their way out of the revived plant and the Idku facility since then.

INFRASTRUCTURE WATCH

The buildout of our fastest-ever rail line is on the fast track

Our first high-speed rail line is “on the fast track” — but it’s unclear exactly when it will be operational: The first high-speed rail line in Egypt, which will connect the Red Sea to the Mediterranean, could take as long as 10 years to complete, but the project is “on the fast track,” Siemens Mobility Middle East and Africa CEO Leon Soulier tells Bloomberg (watch, runtime: 6:02). The government earlier this year signed a USD 4.5 bn agreement with Siemens Mobility, Orascom Construction and Arab Contractors to install and maintain the first 660 km line of the high-speed railway. Cabinet had said in January that the first line should be completed within two years after signing contracts.

Soulier refrained from providing specific timelines but explained that building out high-speed railway systems in other countries typically takes about the same amount of time. They will be working “as fast as possible alongside the Egyptian government and local partners,” to complete the project, he added. The Siemens Mobility regional boss suggested the consortium is still in talks with the government on exactly how to develop the project.

This is just the first leg of a larger USD 23 bn project that will stretch for some 1.8k km across Egypt, linking Cairo, Aswan, the North Coast and the Red Sea. The Sokhna-Matrouh connection will feature a double-decker passenger line able to carry more than 30 mn people a year as well as a freight line, which has once again been described as “a Suez Canal on Tracks,” capable of handling “mns in tonnage” every year, Soulier said.

We could be looking at cross border high-speed rail connections too: While there are no active talks about expanding the rail network internationally — particularly to Sudan or Libya — Soulier said that the government is likely “going in that direction.”

STARTUP WATCH

Efreshli raises USD 550k seed round from angel investor Tarek Sakr, Marakez

Egyptian online interior design firm Efreshli has raised a USD 550k seed round led by angel investor Tarek Sakr and property developer Marakez, founder and CEO Heba El Gabaly tells Enterprise. The startup aims to offer a new and accessible way to furnish homes, offices, or any other space through their virtual decor tool that allows customers to visualize how room setups will look before they make a purchase. Efreshli works with furniture and decor brands to curate rooms based on customers’ personal aesthetic style and budget while also assisting with the purchase of the items.

The funding will be used to finance Efreshli’s geographical expansion and develop their tech infrastructure, El Gabaly said. The firm is aiming to expand across the region and has plans to launch in the UAE in the coming year, she added.

EARNINGS WATCH

Swvl reported revenues of USD 16 mn in the third quarter of 2021, up nearly 263% y-o-y from USD 4.4 mn in 3Q2020 and almost 14x from the same quarter three years ago, the mass transport app said in an earnings release (pdf). The company’s net margin also improved noticeably from to -12.5% in 3Q2021 from -53.8% in 3Q2018. The release came as Swvl is expected to be the first Egyptian company to IPO on the Nasdaq later this year via a merger with US special purpose acquisition company (SPAC) Queen’s Gambit Growth Capital.

KUDOS

KUDOS-

We said earlier this week that it is never too late to start something new — or even start over. In that vein: Big kudos to reader Ehab Mikhael from ADM, who wrote in to let us know that he agreed, having earned his MBA just a few days earlier at the age of 44.

EFG Hermes’ consumer finance arm valU was named fintech company of the year at the Tech Innovation Awards 2021 — hosted by BNC Publishing’s Entrepreneur Middle East in Dubai on 6 October, the company said in a press release (pdf). “We are honored to be named ‘Fintech Company of the Year’ by Entrepreneur Middle East and to be nominated among some of the strongest names in the fintech industry,” valU CEO Walid Hassouna said.

Fintech startup Khazna was selected to compete in the first iteration of the Last Mile Money Accelerator, a program founded by the Bill & Melinda Gates Foundation and managed by design company IDEO. “The four-month programme aims to supercharge startups with grant capital, world class design support from IDEO and IDEO.org, and connections to key strategic ecosystem partners,” according to Disrupt Africa.

Hassan Allam Holding took home the Technology Initiative of the Year prize at the CW Egypt Awards 2021. The company was noted for implementing SAP across all its business divisions, employing the system for “document creation approval with different strategies, as well as reviewing and monitoring all transactions.”

enterprise

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

It was another quiet night on the airwaves yesterday, with power couple Amr Adib and Lamees El Hadidi taking the night off, making it quieter than usual. The talking heads were still on President Abdel Fattah El Sisi’s visit to Budapest, with Al Hayah Al Youm’s Mohamed Sherdy showing clips from El Sisi’s speech following a sit-down between the president and Hungarian PM Viktor Orbán after this week’s Visegrád (V4) summit (watch, runtime: 3:05). El Sherdy also had commentary on El Sisi’s bilateral talks following the summit (watch, runtime: 5:23). We have more in Diplomacy, below.

EGYPT IN THE NEWS

It’s another human rights-focused morning with a driveby from the VOA on the concerns of journalists and analysts about Egypt’s recently-announced human rights strategy. The story draws a direct line between the appearance of the strategy and the earlier decision by the Biden administration to withhold part of the US’ annual military aid to Egypt.

ALSO ON OUR RADAR

The global rise in commodity prices is hitting local aluminium, as Egypt Aluminum has raised the price at which it sells to factories and distributors to EGP 55-66k per tonne, up by nearly EGP 4-5k from last month.

Suez Canal Revenues were up 12.4% y-o-y between January and 12 October this year, Suez Canal Authority boss Osama Rabie said on the airwaves yesterday (watch, runtime: 11:21). The canal’s receipts reached USD 4.86 bn up until this point, with 13.3k vessels carrying 7% more cargo on an annual basis.

Other things we’re keeping an eye on this morning:

  • Civil aircraft leasing agreements could eventually be exempted from the VAT after the Madbouly cabinet greenlit a decision to amend some provisions of the VAT Act.
  • The Suez Canal Authority signed a cooperation protocol with Siemens that will see the latter train engineers and technicians working for the SCA. The two sides are also studying a potential maintenance and spare parts supply contract.
  • Raya Holding’s Aman has obtained an SME lending license from the Financial Regulatory Authority.
  • The tender to establish the Tenth of Ramadan City dry port and logistics hub has received offers from six unnamed consortiums after having been launched last June.

COVID WATCH

The Health Ministry reported 861 new covid-19 infections yesterday, up from 857 the day before. Egypt has now disclosed a total of 314,997 confirmed cases of covid-19. The ministry also reported 41 new deaths, bringing the country’s total death toll to 17,806.

Sinovac is supplying state-owned vaccine maker Vacsera with raw materials for 250 mn covid jabs in 2023, Health Minister Hala Zayed said in yesterday’s cabinet meeting, according to a statement. The agreement will also see the dispatch of technical teams from both companies to the other’s factories for training purposes. Under the two firms’ existing agreement, Vacsera’s daily capacity stood at around 300k Sinovac shots per day in September, giving it a monthly production capacity of some 9 mn doses by our math. The company eventually expects to raise capacity to produce 15-18.5 mn doses each month after the opening of its new facility in Sixth of October in November.

New Africa + Middle East export hub? The ministry is also considering offering Sinovac a building in Vacsera’s new plant to produce vaccines for export across Africa and the Middle East. The factory aims to position Egypt as a vaccine-making hub for export to the rest of Africa, the Health Ministry has said previously.

A plan is being drawn up to establish vaccination clinics in all government hospitals, Zayed said, bringing the total number of centers to 2k clinics, up from 850 at last count. The plan aims to make vaccination mandatory for entry to all state-run hospitals and buildings affiliated with the Health Ministry, she added.

PLANET FINANCE

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Subscription period for Sawiris-backed Fertiglobe IPO kicks off: Nitrogen fertilizer company Fertiglobe — a joint venture between Abu Dhabi National Oil Co. and Nassef Sawiris’ OCI — kicked off the subscription period for its forthcoming IPO yesterday, according to CNBC Arabia. The company is offering a 13.8% stake (1.1 mn shares), with an indicative price range set at AED 2.45-2.65 per share, putting its initial valuation at somewhere between USD 5.5 bn to USD 6 bn. Banking sources said that Fertiglobe aims to raise around USD 750 mn in its bourse debut, which is expected to be one of Abu Dhabi’s largest ever IPOs. Fertiglobe first announced plans to offer a 13.8% stake in the joint venture on the ADX earlier this month, and early estimates have valued the company around USD 7 bn.

Advisors: Citigroup, First Abu Dhabi Bank, HSBC Bank Middle East and Morgan Stanley have been appointed as joint global coordinators. EFG Hermes UAE, Goldman Sachs and International Securities have been appointed as joint bookrunners.

The US Is now the world’s largest cryptocurrency mining hub, after Chinese authorities banned the practice in their country earlier this year due to environmental and risk concerns, data from the Cambridge Centre for Alternative Finance shows, according to the Financial Times. China’s share of the global hashrate — a term for the computing power required to mine crypto — fell from 44% to 0% between May and July, while the US’ spiralled to 35% from only 17% before the ban.

Up

EGX30

10881

+0.9% (YTD: +0.3%)

None

USD (CBE)

Buy 15.66

Sell 15.76

None

USD at CIB

Buy 15.66

Sell 15.76

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

11,625

+0.7% (YTD: +33.8%)

Down

ADX

7,786

-0.01% (YTD: +54.3%)

Up

DFM

2,789

+0.06% (YTD: +11.9%)

Up

S&P 500

4,364

+0.3% (YTD: 16.2%)

Up

FTSE 100

7,142

+0.2% (YTD: 10.6%)

Down

Brent crude

USD 83.34

-0.1%

Up

Natural gas (Nymex)

USD 5.59

+1.5%

Up

Gold

USD 1,794.70

+2%

Up

BTC

USD 57,558.46

+3% (as of midnight)

THE CLOSING BELL-

The EGX30 rose 0.9% yesterday on turnover of EGP 1.13 bn (25% below the 90-day average). Foreign investors were net sellers. The index is up 0.3% YTD.

In the green: Fawry (+6.4%), AMOC (+5.1%) and Mopco (+2.8%).

In the red: Aspire Capital (-9.5%), Pioneers Properties (-6.3%) and Gadwa Industrial Development (-6.3%).

Asian markets are largely in the green this morning after shares on Wall Street snapped yesterday a three-day losing streak. Futures suggest both US and European shares should open in the green later today.

DIPLOMACY

President Abdel Fattah El Sisi discussed bilateral relations, FDI and increasing trade between Egypt and Hungary with Hungarian PM Viktor Orbán at a meeting during Visegrád (V4) Group’s summit yesterday, according to an Ittihadiya statement. The meeting saw the two leaders discuss trade, cooperation to counter terrorism, illegal immigration, and regional and international security, with Orbán lauding Egypt’s peacekeeping efforts in the region. El Sisi reiterated the role of the international community in safeguarding Egypt’s water security in light of stalled negotiations over the Grand Ethiopian Renaissance Dam. In a joint press conference (watch, runtime: 4:32), El Sisi thanked Orbán for his invitation to the V4 and for his continued support and confidence in Egypt — and extended an invitation to Orbán to the yet-to-be announced inauguration of the new administrative capital.

IN OTHER DIPLO NEWS- El Sisi phoned his Tunisian counterpart, Kais Saied, to congratulate him on forming a new government, Ittihadiya said.

MY MORNING ROUTINE

Hesham Sallam, founder of Mansoura University Vertebrate Paleontology Center: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Hesham Sallam, founder of Mansoura University Vertebrate Paleontology Center (MUVP), and associate professor at the American University in Cairo (AUC) and Mansoura University (bio). Edited excerpts from our conversation:

My name is Hesham Sallam; I’m the founder of MUVP and an associate professor at AUC and Mansoura University. My work is focused on prehistoric discoveries and paleontological research on the vertebrate fossils of Afro-Arabia.

Geology began to grow on me when I was a university student, as it made me understand the evolution of vertebrates. I found my passion during these years and after many following years of study and pursuing my master’s degree, my story began with vertebrate fossils and dinosaur fossils. I really struggled at first and was on the verge of quitting multiple times — until I received a scholarship to pursue my PhD at the University of Oxford. My first experience in field work in Egypt was while I was an Oxford student and was only considered for the work alongside a team of foreigners because, ironically, Egyptians were prohibited from that kind of work.

With time, my goal became to bring a new discipline to Egypt. In the early 2000s, Egypt didn’t have anyone specializing in vertebrate fossils, meaning that this wasn’t something that was even taught at universities despite the fact that Egypt is one of the countries in the region that is richest with vertebrate fossils and attracts foreign scientists around the world who end up taking our fossils because no one else in Egypt was interested in doing that.

I received my PhD and came back with a big dream. During the second year of my undergrad, I listed six goals that I worked on one by one in the following years: To find outstanding talents in Egypt in the field; to establish a lab within Mansoura University; to organize regular fossil hunting expeditions; establish and teach this course in different universities across Egypt; to become an open source in academia; and to help in creating a natural history museum. I accomplished five out of six — the remaining one is a very big dream that should become a national project.

I always had big ambitions in Egypt. I started Mansoura University Vertebrate Paleontology Center (MUVP) with a single desk and a chair. The young generations love natural history and dinosaurs but don’t even know that dinosaurs walked this country a mn years ago. They have no role models in this field, and I’m afraid deprivation breeds ignorance.

Mansourasaurus turned the tables: In 2014, I selected three of my top tier female students to attend a lecture at the New Valley University. While we were heading back, we randomly stopped at a new paved road carved out of the mountains, and that’s when we found the skeleton of Mansourasaurus. Since 2008, I had been searching for it with an international team as someone long ago recorded that they saw dinosaur bones in this area. It is this one sentence in a research paper that kept us hopeful even though there wasn't even any other evidence that this is in fact true.

The center wouldn't have become what it is today if it weren’t for the Mansourasaurus discovery in 2018. It was only after the discovery that people began to take us seriously; I was given a huge space for a lab that I never dreamed of and was also awarded a huge funding for our research projects, excavation trips and to get new equipment. The center was then transformed into what is known today as Sallam Lab. MUVP and the AUC lab are under the umbrella of Sallam Lab.

We’re eyeing regional expansion and to begin exploring different Arab and African countries to have projects outside of Egypt. Until now, we published 30 international research papers of 13 entirely new prehistoric species. We made many other discoveries between Mansourasaurus and the four legged whale Phiomicetus; I was the senior author of the research that was just published.

The first thing I do when I get up in the morning is to have my cup of coffee. I always dedicate some time to get in touch with my students; we talk about science more than anything else. I then go to the university. My life is summed up in research writing, reviewing my students’ projects, presenting new discoveries, supervising master’s or PhD thesis. This is pretty much how the rest of my day looks like. I can go on trips with my students and spend weeks in the field either looking for or collecting a new discovery.

I am responsible for documenting the prehistoric life of Egypt — I never collect anything from my discoveries.

I don’t really “switch off” from work: When I’m not working I’m contemplating my next move at work and future plans. Even when the rest of the world was confined to their homes during the lockdown, the desert was our quarantine while we worked in isolation. We find our joy in science. Our lab is our escape from the mess of the outside world. I love watching scientific documentaries to give me inspiration and push me to pursue international standards in everything I do.

“What you speak is what you read”: My master’s degree supervisor used to tell me that and it really clicked because I think it is true that the more you read, your linguistic and scientific skills will only make you talk more eloquently.

CALENDAR

October: Romanian President Klaus Iohannis could visit Egypt mid this month to discuss ways to boost tourism cooperation between the two countries.

14-22 October (Thursday- Friday): El Gouna Film Festival.

9-15 October (Saturday-Friday): Turathna Exhibition, Egypt International Exhibition Center, Cairo, Egypt.

11-17 October (Monday-Sunday): IMF + World Bank Annual Meetings.

13 October (Wednesday): Meeting of G20 Finance Ministers and Central Bank Governors, Washington DC.

14-15 October (Thursday-Friday): The Ordinary Session of the Executive Council of the African Union, African Union Headquarters, Addis Ababa, Ethiopia.

Mid-October: The Egyptian Banking Institute, the Financial Services Institute, and I-Score will begin airing in mid-October the Digital Credit Scoring Webinar Series, a line-up of webinars on the banking sector and banking regulations.

18 October (Monday): E-Finance begins trading on EGX.

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

24-28 October (Sunday-Thursday) Cairo Water Week, Cairo, Egypt.

27-28 October (Wednesday-Thursday) Intelligent Cities Exhibition & Conference, Royal Maxim Palace Kempinski, Cairo, Egypt.

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

28 October (Thursday): Second tranche of overdue subsidy payouts will be handed to eligible exporters.

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

30-31 October (Saturday-Sunday): G20 Leaders’ Summit, Rome, Italy.

31 October (Saturday): World Cities Day, Luxor, Egypt.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt.

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

15-21 November (Monday-Sunday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

29 November-2 December (Monday-Thursday): Egypt Defense Expo, Egypt International Exhibition Centre.

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

8-10 December (Wednesday-Thursday): Global Forum for Higher Education and Scientific Research (GFHS), Cairo, Egypt.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

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

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

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

1Q2022: Launch of the Egyptian Commodities Exchange.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

19 February 2022 (Saturday): Public universities begin the second term of the 2021-2022 academic year.

1H2022: The World Economic Forum annual meeting, location TBD.

22-24 April 2022: World Bank-IMF spring meeting, Washington D.C.

May 2022: Investment in Logistics Conference, Cairo, Egypt

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

18-20 October 2022 (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.

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