AM — Export, Suez Canal revenues hit record highs in 2021

Good morning, friends, and welcome to a pleasantly brisk news day in which our economic record in 2021 leads is the big story. Expect corporate news to stage a comeback in a few days’ time — much of corporate Egypt seems to be dreaming of a three-day weekend before “really” getting back to work next week. At least if the autoreplies clogging our inboxes are anything to go by…

PSA #1- Today is your last chance to take our annual reader poll — and join us for breakfast. Every year, we ask our readers to weigh in on what you expect for the year ahead in our Enterprise Reader Poll. Take a few minutes to give us your take on the outlook for your business and industry, whether you’re planning fresh investments and new hires, and how your business fared in the year past. We’ll share the results with the entire community next week to help shape your view of the year — and will invite eight of you to break bread with us. Another dozen of you who complete the poll will also get special Enterprise mugs to enjoy your morning beverage of choice.

^^ The poll closes at midnight CLT tonight.

PSA #2- Banks and civil servants are getting this Thursday off, with a cabinet statement and the Central Bank of Egypt (pdf) announcing yesterday that 6 January will be off in observance of Coptic Christmas, which falls on Friday. We’re still waiting on confirmation from the EGX and the Manpower Ministry that the stock market will be closed and the private sector will be off on that day, but we’re optimistic.

PSA #3- Resident investors are no longer paying stamp tax on EGX transactions as of yesterday, when it was replaced by the 10% capital gains tax, the Financial Regulatory Authority (FRA) confirmed in a statement. The CGT will be imposed on net portfolio earnings at the end of the tax year after deducting brokerage fees.

PSA #4- Your BlackBerry is probably going to die tomorrow — if you’re one of the three people reading Enterprise with an OG BB operating system on your vintage hardware. If you’re on BlackBerry 10 or earlier, don’t expect to be able to make calls, send an SMS or get on the interwebs as early as tomorrow morning. BlackBerry-branded handsets running Android will be just fine. The company has a press release out and you can get some of the back story from the Verge.

THE BIG STORIES ABROAD-

Sudanese Prime Minister Abdalla Hamdok has resigned, saying that he had been unable to fix the country’s widening political divide. He stepped down just a few weeks after signing a pact with the military to restore him to office following a coup in October. Hamdok headed the post-Bashir civilian-military administration that was supposed to lead the country to democratic elections this year, but was placed under house arrest by military leader Abdel Fattah Al Burhan in October during the army’s seizure of power. Hamdok’s pact with Burhan was widely rejected by protestors, who have continued to demonstrate against the return of military rule. The story is everywhere from Reuters and AP to France24, Bloomberg and the BBC.

It’s a relatively quiet morning in the international business press. The Financial Times has an interesting look at who’s up and who’s down in the corporate world thanks to the pandemic, while the Wall Street Journal jumps in its hot tub time machine to lead with the shocking revelation that “early-stage venture capitalists are now investing mns of USD in companies before they even have a coherent business plan” (shocking, we know) “while a growing number of VCs are saying that we are likely in a bubble.”

ALSO- Covid cases are continuing to surge in the US as the more virulent — though potentially less severe — omicron variant spreads, leading to disruptions in travel, retail and other sectors amid staff shortages. Almost 4k flights were cancelled worldwide and more than 8.8k were delayed on Sunday due to omicron and poor weather, according to stats from airline tracking site FlightAware.com picked up by Reuters — prolonging the holiday-season travel chaos seen last week.

CIRCLE YOUR CALENDAR-

Key news triggers to keep your eye on:

• PMI: Purchasing managers’ index figures for December for Egypt, Saudi Arabia, and Qatar will be released tomorrow. Figures for the UAE will be released on Wednesday.
• Foreign reserves: December’s foreign reserves figures will be announced before the week is out.
• Inflation: Inflation figures for December will be released on Monday, 10 January.
• Interest rates: The Central Bank of Egypt (CBE) will hold its first policy meeting of 2022 later this month. The CBE hasn’t yet published its meeting schedule for the year so we’re still waiting on an exact date.

OPEC+ is meeting this Tuesday, 4 January to decide whether to go ahead with plans to add another 400k barrels per day to the market in February. The cartel agreed in December to continue ramping up oil production despite concerns that omicron could dent demand. Pundits see it sticking to its planned monthly production increases at this week’s meeting.

The alliance of oil producers is remaining upbeat regarding the impact of omicron on the global oil market, according to a technical report seen by Reuters that predicts a “mild and short-lived” impact from the variant currently spreading around the world.

OPEC will discuss today who should be its next leader as Mohammad Barkindo of Nigeria prepares to wrap up his second and final term by mid-year. Barkindo has been the cartel’s secretary-general since August 2016.

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

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: We ask several of Egypt’s leading education players what 2022 may bring for the sector. They say strong demand for quality education will continue, with the private sector playing an increasingly important role in filling market gaps. But focus is likely to shift towards education provision for middle-income families, particularly as continued inflationary pressures keep hitting disposable incomes. High inflation and cost crunches will also be a key challenge for operators, and could potentially slow the ramp up of investments. But at both the K-12 and university levels, we should expect construction and geographical expansion to remain key sector trends, they add.

Non-oil export revenues reached a record USD 31 bn in 2021, Prime Minister Moustafa Madbouly said yesterday. Government efforts to support exporters with subsidies and pay off arrears helped to drive the increase in revenues, a cabinet statement cited Trade Minister Nevine Gamea as saying.

This is a significant increase on 2020, when proceeds from exports came in at USD 25 bn, according to official balance of payments data from the Central Bank of Egypt (CBE). Revenues during the first half of 2021 totalled USD 15.8 bn, according to CBE figures.

The volume of our agricultural exports rose 9.5% to a record 5.6 mn tons last year, the Agriculture Ministry said in a statement yesterday. Citrus fruits were by far the most exported product by tonnage at 1.8 mn tons, followed by beets at 650k tons and potatoes at 614k.

Suez Canal revenues were up 12.2% in 2021, hitting a record USD 6.3 bn, Suez Canal Authority (SCA) boss Osama Rabie said, according to a cabinet statement. The record-breaking revenues last year followed a modest 3% y-o-y dip in 2020 to USD 5.61 bn, the result of the pandemic slowdown.

Last year’s performance came on the back of an all-time high net tonnage passing through the waterway, which increased 8.5% y-o-y to 1.27 bn tons, beating the previous all-time high set in 2020. The number of transiting ships was up 10% y-o-y to record 20.7k vessels, despite the Ever Given crisis that blocked the canal for almost a week in March.

The SCA worked to boost traffic through the canal last year, extending a range of incentives and reductions introduced in 2020 to counter the global trade slowdown due to covid-19.

Reminder: One of the principal threats to the canal looks to have been spiked by the Israeli government. The proposed oil transport corridor between the UAE and Israel that could have undermined the Suez Canal’s status as a major trade artery appears to have been blocked by the Israeli government last week.

CI Capital’s leasing arm Corplease has closed a four-tranche EGP 2.4 bn securitized bond issuance, investment bank Misr Capital said in a statement (pdf). The four tranches were rated AA+, AA, AA- and BBB by MERIS.

Who took part? Banque Misr, Banque du Caire, National Bank of Egypt, CIB, AAIB, Attijariwafa Egypt, Ahli United Bank, ADCB and Al Ahli Bank of Kuwait all got a piece of the issuance.

Advisors: Misr Capital was the lead manager, coordinator, and financial advisor. Misr Capital and Banque du Caire acted as promoters and arrangers for the issuance. Misr Capital, Banque du Caire, Banque Misr, National Bank of Egypt, CIB and AAIB were co-underwriters. Law firm Zaki Hashem & Partners acted as counsel, while Grant Thornton was the auditor.

Corplease last tapped the debt markets at the beginning of 2021 with a EGP 2.7 bn issuance, which was the largest of its kind by a private sector company.

The pipeline of other transactions is growing: The Financial Regulatory Authority (FRA) said late last month (pdf) it would approve 11 sales worth a combined EGP 11.5 bn before the end of 2021. The latest: The regulator has okayed Cairo Housing and Development making its first securitized bond issuance to the tune of EGP 146 mn, and its sister companies making an EGP 190 mn issuance, according to a regulatory filing (pdf). EFG Hermes is financial advisor, lead manager, promoter and underwriter for the program.

A total of 19 securitized bond issuances with a combined value of EGP 15.8 bn went to market last year by our count. Three of those issuances, together worth nearly EGP 1.75 bn, took place last week as the market saw a flurry of activity to close out 2021.

Ebtikar ups stake in subsidiary Bee to 99.9% through share swap: Non-bank financial services player Ebtikar Financial Investments Holding has upped its stake in e-payments platform Bee to 99.9% from 60% via a share swap, its parent companies MM Group and B Investments said in EGX filings (here, pdf and here, pdf) last week.

The swap: Bee shareholders will acquire new shares issued by Ebtikar in return for handing over the 39.9% stake. This will see MM Group’s stake in Ebtikar diluted from 49.9% to 40.5% and B Investment’s holdings reduced from 20.3% to 16.5%.

The shareholders: The swap is based on an agreement (pdf) signed in February with Bee’s former owner Technobiz Equipment (TBE), which agreed to hand over a 20% stake in the company in return for equity in Ebtikar. The remaining 19.9% of the shares were swapped with a second unidentified investor.

Where’s Vodafone in all of this? Last February Vodafone Egypt signed a MoU with Ebtikar to acquire a 20% stake in Bee and its other e-payments company, Masary, but nothing has been heard about the transaction since the summer.

Ebtikar has plans to go public: Back in February, MM Group framed the Bee takeover as part of its plans to IPO Ebtikar on the EGX, writing in the statement that the transaction was a prelude to a listing. Ebtikar said in June it was planning to sell shares in 4Q2021 but has not recently spoken of the transaction. Shareholders have yet to say how much of the company they may offer in a sale.

Dubai-based tech startup CorporateStack plans to list on the EGX sometime in 2023 or 2024, Egypt General Manager Ahmed El-Haddad told Enterprise. The software company hasn’t decided on an exact timeline for the IPO or how much of the company it will offer for sale, but is currently working with consultants to lay out the roadmap to go public in two to three years, El-Haddad said.

Why opt for the EGX instead of, say, the DFM or ADX? The company decided to go public on Egypt’s bourse because it has six Egyptian shareholders, El-Haddad told us. The shareholding structure was the main reason behind choosing the EGX rather than a UAE-based stock exchange, he said.

It’s uncommon, but not unheard of: Saudi tech firm Brmaja said last year that it is also looking to raise EGP 400 mn by listing 20% of its shares on the EGX this coming March, as part of its plan to go through a series of acquisitions that will make Egypt its central hub.

What is CorporateStack? The tech firm develops software for SMEs and larger businesses to manage operations including HR, customer services, and asset and project management. The company recently established a partnership with Vodafone Egypt to provide e-invoicing solutions to SMEs through Vodafone’s V-HUB platform. CorporateStack was founded in Dubai in 2016 and entered the Egyptian market in October 2020.

What’s next? The software company hopes to raise EGP 80 mn ahead of going public, Haddad said, with plans to increase their employee headcount in Cairo and move to bigger premises. CorporateStack plans to expand to Saudi Arabia soon, as well as North America, where it is planning an initial investment of USD 1 mn in partnership with a major existing company, Haddad said in a roundtable held by the company last Monday.

Passenger car sales dipped in November, falling 3.9% y-o-y, according to industry figures released yesterday. Data from the Automotive Information Council (AMIC) showed that 19.7k units were sold during the month, down from 20.5k during November of 2020 and 19.3k units in October.

The chip shortage is making itself felt: November’s sales drop suggests that the global shortage in semiconductor chips has begun to more significantly impact car sales. Passenger car sales were essentially flat y-o-y in October after months of sustained y-o-y growth. November’s dip could herald worse to come, with many in the industry telling us they expect this year to bring a more serious supply crunch, including potential price hikes and local production cuts.

Buses bucked the falling sales trend: Over 3k buses were sold during the month, up 45.4% y-o-y and up 24.6% from October. Truck sales also rose 11.5% y-o-y to 3.9k, though sales were down slightly from October. The strong performance in bus and truck sales led total vehicle sales to rise 2.1% y-o-y to 26.7k units in November.

AMIC data is self-reported by member distributors, who include the majority of (but not all) industry participants.

Leading the conversation on the airwaves last night: Pfizer’s covid pill is coming to Egypt. Egypt has agreed with Pfizer to purchase its Paxlovid oral anti-coronavirus med, interim health minister Khaled Abdel Ghaffar said in an interview on El Hekaya last night (watch, runtime: 2:45). Under the agreement, the US pharma giant will provide enough medication to treat 20k people, the minister said, adding that the pills will arrive in the “coming weeks.”

A handful of countries have approved the experimental antiviral med for use: A UK regulator last week approved it to treat mild to moderate covid symptoms in people aged 18 and above who are at risk of developing severe illness, following the US, which gave the go-ahead late last year for high-risk covid patients aged 12.

Egypt isn’t one of them: The Egyptian Meds. Authority is yet to approve Paxlovid for use in Egypt.

What is Paxlovid? It’s an experimental med created by Pfizer to treat mild-to-moderate covid-19. It consists of two separate pills — nirmatrelvir and ritonavir— that are taken twice daily for five days.

More than 21.6 mn Egyptians are now fully vaccinated against covid-19, while another 13.6 mn people have received their first dose, according to figures provided by Abdel Ghaffar (watch, runtime: 2:07).

The damage left by last week’s bad weather also got a lot of attention: Kelma Akhira’s Lamees El Hadidi (watch, runtime: 3:23), El Hekaya’s Amr Adib (watch, runtime: 6:45) and Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 1:17:16) all had coverage.

It’s a mixed bag in the foreign press this morning: The National writes that green energy advocates are calling on Egypt to do more to reduce carbon emissions. Meanwhile, Egyptian authorities have released the daughter of exiled Ikhwani spiritual leader Youssef El Qaradawi, who had been held in pre-trial detention since 2017, according to AFP.

Egypt wants to host the Olympics: Egypt plans to submit an official bid to host the 2036 Summer Olympics, according to Sports Minister Ashraf Sobhi, who told Sky News Arabia the government is working on a “comprehensive file” to submit to the International Olympic Committee.

This time for Africa: Sobhi added that he earlier this week met with and secured the support of the president of the Association of National Olympic Committees of Africa for Egypt to make the bid as a representative of the continent.

It’s early days in the bidding process and we don’t yet know which countries will emerge as serious competitors to host the games: India, Russia and the UK are among those to have registered interest in following Brisbane to host the 2036 games, but the host likely won’t be decided until sometime in the middle of the decade. Let’s aim to avoid another FIFA sifr?

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

• Mountain View will co-develop Heliopolis Housing and Development’s (HHD) Heliopark in New Cairo, after HHD’s board of directors approved Mountain View’s partnership offer, according to a press release (pdf).
• Elsewedy Electric’s Egytech Cables signed an EGP 440 mn contract for the supply, installation and maintenance of 132 kV ground cables for the Kuwaiti El Mutlaa Residential city, according to a company release (pdf).
• Some 27k Egyptian importers and 68k foreign companies have registered with Nafeza in the three months since its launch, according to Finance Minister Mohamed Maait.
• Egypt Post has launched a digital AI-driven shipping service, Wassalha.
• MPs are appealing the government’s decision to liquidate state-owned El Nasr for Coke and Chemicals: The House Industry Committee has asked the cabinet to rethink plans to liquidate the financially-stricken company, and will meet with Public Enterprises Minister Hisham Tawfik later this month to discuss alternatives.

The Health Ministry reported 801 new covid-19 infections yesterday, up from 783 the day before. Egypt has now disclosed a total of 387,159 confirmed cases of covid-19. The ministry also reported 29 new deaths, bringing the country’s total death toll to 21,797.

More Pfizer shots from the US: Egypt received an additional 1.5 mn Pfizer shots from the US, the US Embassy in Cairo said on Saturday. This pushes the total number of Pfizer vaccines we’ve gotten from the US to 16.5 mn by our count. The US has also given us 3.5 mn doses of Moderna and more than 1.3 mn of Johnson & Johnson’s vaccine.

Egyptian officials have urged Israel and Hamas fighters in the Gaza Strip to end fresh hostilities that threaten to collapse the ceasefire that ended the war between the two sides in May, the Associated Press reports. The flare-up in tensions comes after Palestinian forces fired rockets into Mediterranean Sea off the Israeli coast, prompting Israel to carry out airstrikes in Gaza.