AM — Misr Italia issues EGP 794 mn securitized bond + Raya could make an EGP 2 bn securitization this year

Good morning, friends, and welcome to a Monday on the move. We come bearing a truck / train / planeload of news, from fresh securitizations and loans to all things import / export.

The Central Bank of Egypt is paving the way for banks to help importers with the letters of credit they’ll need from tomorrow. Meanwhile, ACI trials for air freight are soon to take flight, the local manufacture of electric locomotives should be chugging along by the end of the year, and our first-ever exports of locally-made Sinovac jabs are on their way to the Gaza Strip as we push forward on ambitions to become a regional vaccine making-hub.

Slotting nicely into our “moving” theme: The House of Representatives will today discuss a bill that would regulate real estate brokers, as well as the so-called “old rent” law. We have more on all of these stories in today’s newswell, below.

We’re also happy to see an old neighbor move back: The Hyatt brand has officially returned to Cairo with the grand opening of the Hyatt Regency Cairo West hotel at Pyramids Heights yesterday. The 250-room hotel opened its doors last year in a soft launch, a little over two years after Hyatt signed a franchise agreement with ALDAU Development to set up the hotel overlooking the Giza Pyramids. The EBRD provided financing for the project with a USD 12 mn loan to ALDAU last year.

The luxury hotel brand exited Egypt some ten years ago — and its return today is a testament to our tourism industry’s impressive comeback in the years since. If nothing else, it’s a positive signal from a big investor that Egypt is the market to be in right now, and that it’s a market to have confidence in.

WHAT’S HAPPENING TODAY-

We should be signing agreements on everything from electricity to education with Jordan today at the Egyptian-Jordanian Joint Higher Committee meeting. An agreement will be signed on efforts to double the capacity of the electricity link between the two countries to 1 GW, according to an Electricity Ministry statement, while we’re also set to ink agreements on higher education, scientific research, and logistics. Prime Minister Moustafa Madbouly yesterday discussed bilateral ties and regional issues with Jordanian PM Bisher Al-Khasawneh ahead of today’s meeting,a cabinet statement read.

Facebook is going to need to up its game if it is to retain its position as the number one source of misinformation: You’ll be able to get the most alternative of alternative facts straight from Trump’s mouth to your brain as King Cheeto’s very own social media platform debuts on the App Store. In a series of online posts seen by Reuters, an executive involved in the rollout of Truth Social said the app will be available for download from today.

This will officially mark the end of The Donald’s internet blackout: Twitter, Facebook and YouTube all banned the former US president from their platforms after his supporters stormed the US Capitol in January last year following the disputed 2020 election.

They just couldn’t help themselves: As well as the very Facebook-esque logo, screenshots show Truth Social to be an almost carbon-copy of Twitter. Add the obvious barbs aimed at its founder and ex-CEO Jack Dorsey, and Trumpworld is firmly positioning its new social venture as the anti-Twitter.

THE BIG STORY ABROAD-

Macron gets Biden, Putin to meet for a last-ditch summit to avoid war in Ukraine: French President Emmanuel Macron’s recent diplomatic outreach to Russia appeared to pay dividends yesterday, as he managed to get the US and Russian presidents to agree in principle to sit down for talks over the Ukraine crisis. The two countries’ top diplomats are set to meet Thursday to work out the summit’s details, which are scant so far.

Settle in for a cliffhanger: France and the US have said the summit won’t take place if Ukraine is invaded, meaning Putin could put the brakes on any invasion plans until the meeting. But now we’re left dangling on the precipice — Russian troops in Belarus and on the border with Ukraine are going nowhere, while the US’ finger is still hovering over the big red “sanctions” button. The Financial Times, Reuters, the Associated Press, the Washington Post and the Wall Street Journal all have more.

SIGN OF THE TIMES- Abu Dhabi’s sovereign wealth fund is turning to data nerds to advise on its investments. The Abu Dhabi Investment Authority (Adia) has assembled a more than 50-strong crack-team of physicists, academics and data analysts to help it identify and capitalize on market trends, the Financial Times reports. One of the world’s largest wealth funds with some USD 700 bn under management, Adia has also historically been viewed as one of the most conservative. But as global financial markets become ever more connected and fast-moving, and new AI- and data-based approaches emerge to read the financial tea leaves, Adia is hoping its new “research and development lab and factory” will give it the edge on innovation.

CIRCLE YOUR CALENDAR-

A call for tech startups: The Information Technology Industry Development Agency (ITIDA) and US-based VC firm Plug and Play have launched an incubator and accelerator program for digital transformation-focused startups in partnership with our friends at USAID. The newly launched “Smart Cities” innovation hub will select 20-30 Egypt-based companies for its inaugural three-month program, which starts in March. Startups can apply here before applications close on 28 February.

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: As public schools suffer a huge shortfall in teachers, Egypt’s need for more accessible educational training is clear. Part of the problem is that most private sector players don’t see a market for offering teacher training as a standalone service. We look at why appetite remains low — with one notable exception — and where some leaders in the field believe the private sector can play a more active role.

Misr Italia Properties has closed its first EGP 794 mn issuance as part of an EGP 2.5 bn securitization program, according to a statement (pdf) yesterday from EFG Hermes, which advised on the transaction. The bond is backed by a receivables portfolio of around EGP 1 bn by two of the real estate developer’s subsidiaries, the statement said.

Who’s buying? The sale received “widespread interest” from investors, EFG investment banking co-head Mostafa Gad was quoted as saying in the release. Arab Investment Bank — which was acquired by EFG and the Sovereign Fund of Egypt last year — participated in the transaction along with CIB, Banque du Caire, the National Bank of Egypt, and Suez Canal Bank, EFG said.

The issuance will help Misr Italia ensure that its units are delivered to customers on time, said CEO and Managing Director Mohamed Hany El Assal. The real estate developer signed an EGP 750 leaseback agreement with EFG Hermes Corp Solutions in October to refinance its Garden 8 Mall in New Cairo.

ADVISORS: EFG acted as the sole financial advisor, transaction manager, book-runner, underwriter, and arranger on the issuance.

MEANWHILE- Raya Holding could issue securitized bonds worth a total of EGP 2 bn this year for several of its subsidiaries, Hapi Journal quotes CFO Hossam Hussein as saying in yesterday’s print edition. The company is currently in talks with several banks to manage the securitization process, Hussein said, declining to name them.

Raya aims to go ahead with the first issuance during 1Q2022, Hussein said, without providing details on the size of the transaction. The company is in the process of setting up a new special purpose vehicle, Aman Securitization, specifically for bond issuances, for which it is currently finalizing procedures with the Financial Regulatory Authority, he said. The proceeds from the sale will be channeled into Raya’s working capital, he added.

Raya subsidiary Aman issued EGP 585 mn worth of securitized bonds in August last year.

OTHER DEBT NEWS-

Banque Misr has obtained a USD 250 mn three-year loan led by a Gulf banking syndicate that includes Saudi National Bank, Abu Dhabi Commercial Bank, Emirates NBD and Qatar’s Khaleeji Commercial Bank, Al Arabiya reports, citing sources it says are familiar with the matter. The bank will use the funding for general financing purposes. Banque Misr last September obtained a separate USD 1 bn three-year syndicated loan from international banks to refinance its debt and expand its lending portfolio.

Advisors: Doha Bank and the National Bank of Egypt (UK) worked as managers for the transaction.

Electro Cable Egypt has signed an EGP 450 mn financing agreement with Housing and Development Bank to help the company meet increased demand for electrical infrastructure from government projects and initiatives, including the Decent Life initiative, the company announced in an EGX disclosure (pdf).

CBE teams up with Credit Guarantee Company to help banks cover risk when issuing letters of credit to importers: The Central Bank of Egypt (CBE) is launching an initiative with the Credit Guarantee Company (CGC) to help “cover the risks associated with issuing letters of credit from banks,” the CBE wrote in a letter seen by Enterprise and circulating widely in the local press. The move comes to encourage banks to issue new letters of credit (L/Cs) for importers who had previously facilitated their purchases through documentary collection.

The details: CGC will waive fees to guarantee the L/Cs for banks for six months from the initiative’s launch. The company is set to brief banks on the parameters of the initiative.

What new import rules? Starting tomorrow, banks will only accept L/Cs to facilitate the purchase of imports, and will no longer accept documentary collection. The central bank has announced exemptions and other measures to facilitate the move, which has drawn criticism from trade and industry organizations, who said it would drive up the price of goods in the local market and hurt the competitiveness of Egyptian exports.

ALSO IN TRADE- A trial to extend the Advance Cargo Information (ACI) system to air freight will begin “soon,” according to a Finance Ministry statement. Once the trial period is complete, only shipments that are registered through the system will be allowed to enter the country through airports, according to the statement. A three-month trial of the system for air cargo had previously been tipped to begin in January for an April launch.

What’s ACI? It’s a key part of the Finance Ministry’s digital customs system known as Nafeza, which went live for maritime importers in October. For more on ACI and Nafeza, head to our latest in-depth look at the initiative here.

You will soon need to get regulatory approval before conducting due diligence on non-banking financial institutions, according to a decision (pdf) announced by the Financial Regulatory Authority (FRA) yesterday. Anyone looking to invest in a non-bank lender will need the greenlight from the authority or its board before accessing the company’s internal documents and data, according to the new rule.

The requirement will come into effect when it’s published in the Official Gazette: The FRA said only that it will happen “soon,” when we asked them yesterday.

The regulator denied that there is a specific reason for the new rule, telling us that the FRA board continuously works on adding new regulations it believes would improve the process.

Two new dispute resolution committees for non-bank financial firms will be set up by the FRA to settle conflicts between companies and clients, the regulator also announced. The first committee will look into complaints within companies working in securities, while the second will handle issues across firms working in non-bank financing, including financial leasing and factoring, SME financing, and real estate financing.

The committees will decide on disputes referred to them by the FRA within one month, and will inform the concerned parties within 15 days of issuing their decision, according to the new regulations. Committee members will be appointed by FRA chief Mohamed Omran.

The FRA is giving the non-banking field lots of attention lately: Earlier this month, the regulator set out responsible lending principles for non-bank SME financing products, and made it easier for credit rating companies to get licenses, in moves meant to boost our non-banking financial sector.

The next time you move, it could be through a registered simsar — with set fees: The House of Representatives’ Economic Affairs Committee has given preliminary approval to amendments to the law regulating real estate brokerage, Al Mal reports. The changes would set up a registry for licensed brokers and regulate their fees, among other moves to professionalize the largely informal sector.

The changes: The proposed amendments would require brokerages to register their businesses electronically, and set rules for their activities, the fees they charge and how those fees are collected, Al Bawaba quoted Trade Minister Nevine Gamea as saying during the session. Brokers that violate the regulations could face penalties.

Next steps: The House will continue discussions of the bill in today’s plenary session, Youm7 reports. The amendments will need to get final approval from the House before making their way to President Abdel Fattah El Sisi to be ratified into law.

Also on today’s docket: The so-called “old rent law,” according to Al Shorouk. The bill, which was signed off on by the House Housing Committee last month, would — if passed — allow landlords to evict government agencies, public and private companies, embassies, and other entities leasing properties under the old rent system within five years of its being signed into law.

Egypt is in talks with Libya to export locally made Sinovac jabs, Bloomberg quotes Heba Wali, head of state-owned jab-maker Vacsera, as saying in an interview, as plans to make Egypt into a vaccine export hub for the African continent move forward. Other African countries have also requested shipments of the jabs, Wali said, without naming them.

A Chinese delegation will visit at the end of February to discuss export plans with local authorities, Wali said, adding that exports to African countries could be made through the Gavi / Covax global donations program or via direct payments.

Our first overseas shipment of vaccines is heading to the Gaza Strip: Egypt and China are donating 500k Sinovac jabs to the Palestinian Authority, marking our first exports of the jab, according to a health ministry statement. China provided the raw materials for the doses, which were produced in Egypt by Vacsera.

Egypt has so far manufactured more than 30 mn Sinovac doses, according to the statement. We have capacity to make 100 mn doses this year, Bloomberg quoted Acting Health Minister Khaled Abdul Ghaffar as saying. Sinovac is supplying Vacsera with raw materials for 250 mn covid jabs in 2023.

And other jabs are in the pipeline for local production: The World Health Organization is giving us the tech to make our own Moderna-like mRNA vaccines, it announced earlier this week. Meanwhile, Abdel Ghaffar has also held talks with AstraZeneca’s Middle East and Africa head to discuss obtaining the company’s (non-mRNA) vaccine technology.

We received nearly 2.2 mn Pfizer jabs from the US yesterday, as part of Gavi / Covax, the health ministry announced in a statement.

From sending jabs abroad to getting them in arms at home: UNICEF and the Japanese embassy in Cairo yesterday signed a USD 3.5 mn MoU and grant agreement to help increase local vaccination rates, according to an International Cooperation Ministry statement. The funding will be used to establish new vaccination centers, install cooling systems in 500 existing centers, and train around 2k Health Ministry staff.

The Health Ministry reported 2,009 new covid-19 infections yesterday, down from 2,025 the day before. Egypt has now disclosed a total of 469,457 confirmed cases of covid-19. The ministry also reported 58 new deaths, bringing the country’s total death toll to 23,752.

NERIC to begin electric locomotive production by year-end: The National Egyptian Railway Industries Company (NERIC) will begin manufacturing electric locomotives at its East Port Said factory by the end of 2022, Samcrete Chief Business Development Officer Refky Kamel said, according to Hapi Journal’s print edition. NERIC is currently still building the factory, according to Kamel.

This is later than previously expected: Previous reports had suggested NERIC’s factory would come online and begin production by mid-2022.

Refresher: NERIC was set up in late 2020 as a JV between the Sovereign Fund of Egypt, the Suez Canal Economic Zone, the Transport Ministry, East Port Said Development, Hassan Allam, Samcrete, and Orascom Construction. The company was established as part of a state-led bid to localize the rail industry and specializes in producing and refurbishing locomotives. South Korea’s Hyundai Rotem has now reportedly joined the JV, Kamel said, without providing further details.

MEANWHILE- Spanish train manufacturer Talgo and the Transport Ministry are considering setting up a railway manufacturing facility, according to an Ittihadiya statement following President Abdel Fattah El Sisi’s sit-down with Talgo Chairman Carlos Oriol. Talgo recently signed an MoU with Egyptian National Railways to supply Egypt with seven sleeper trains as part of the country’s railway overhaul, and is also supplying us with six new passenger trains.

Compass Capital-owned real estate developer Bonyan for Development and Trade has acquired six office buildings in East Cairo to expand its portfolio of commercial real estate assets, Compass announced in a press release (pdf), without mentioning the value of the transaction or whom it acquired the units from.

The acquisition brings the value of Bonyan’s assets to EGP 5.5 bn, according to the release. The office buildings are already fully leased out to multinationals and large Egyptian companies.

More acquisitions planned: The developer intends to continue “acquiring other yielding commercial and logistics real estate assets” as it vies to become the leading real estate platform focused on rented commercial properties.

About the firm: Bonyan secured EGP 700 mn in Islamic financing from Banque Misr and BM Lease last year, which will be used to complete the company’s Walk of Cairo outdoor complex in Sheikh Zayed. Its portfolio is split between retail assets and office buildings in East and West Cairo.

Egypt climbed eight spots in Speedtest’s January Monthly Global Index of mobile internet speed. Median download speeds of 19.34 megabits per second (Mbps) put us 88th out of 140 countries.

We slipped two spots in fixed broadband speed, recording median speeds of 35.67 Mbps to rank 86th out of 179 countries in January. Despite the small drop in the ranking, Egypt has the highest broadband speed across Africa, a cabinet statement noted.

The demand for high-speed internet is on the rise: The number of Egyptians paying for high-speed home internet is on the up and up, rising 15% y-o-y to nearly 10 mn by November 2021, while mobile broadband subscribers increased by around 19% to 65.1 mn, according to Capmas (pdf). The government has been working on replacing our traditional copper based internet cables with a more exhaustive high-speed fiber optic network to increase internet speeds.

The number of Ukrainian visitors to Egypt has declined about 20-25% since the start of the year, Tourism and Civil Aviation Committee head Nora Ali told El Hekaya (watch, runtime: 3:26). Ali attributed the decline to seasonal lows and the local Omicron wave rather than increasing tensions in Ukraine — though she added that a Russian invasion of Ukraine would inevitably lead to further decreases. Ukrainian visitors account for around 30% of Egypt’s tourism market, Ali said.

Nafeza also got some airtime last night: Preparations to extend the Advance Cargo Information (ACI) system to air freight are underway, with trials to begin “soon,” FinMin Advisor Mona Nasser told Al Hayah Al Youm (watch, runtime: 5:55). We have more on the story in this morning’s Trade section, above.

And GERD, of course: Ethiopia’s powering up of the Grand Ethiopian Renaissance Dam (GERD) yesterday, and Egypt’s response that the milestone was a “further breach of obligations” under the 2015 Declaration of Principles, featured on Al Hayah Al Youm (watch, runtime: 1:31).

Saad El Din Group has restarted operations at the Spanish Egyptian Cement factory (Spegyco) after a three-year hiatus, the group’s media spokesperson told Enterprise, confirming reports from the local press. The factory had been taken offline due to the crippling supply glut dogging the industry, but production quotas introduced last year to ease the crisis factored into the group’s decision to bring it back online, CEO Mohamed Saad El Din was quoted as saying by Al Borsa. Saad El Din Group now holds an 85% stake in the factory, worth EGP 250 mn, after purchasing 72% from Shoura Group in 2019 and then 13% from an unnamed foreign partner last year.

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

• US infrastructure giant Bechtel will evaluate one of Egyptalum’s factories for possible rehabilitation (pdf).
• The Transport Ministry will next month sign an agreement with a consortium made up of COSCO, Hutchison Ports, Hapag-Lloyd and CMA CMG to manage and operate the new multi-purpose stations in Dekheila port and Ain Sokhna port.
• Insulation manufacturer ThermoNour will invest EGP 250 mn in a ceramic fiber factory, which it says is the first of its kind in Egypt, in the Ain Sokhna industrial zone.
• Prime Minister Mostafa Madbouly held a meeting to review the final draft of Egypt’s national climate change strategy 2050, which the Environment Ministry launched in November.