Thursday, 31 March 2022

AM — Lots of love for Egypt: USD 15 bn pledge from KSA + a shout-out from Georgieva as IMF talks continue

TL;DR

WHAT WE’RE TRACKING TODAY

Well, friends, we’ve made it through another workweek together — and we now have just two more days left until the start of Ramadan.

We continue to publish at 6am CLT Sunday-Thursday during the holy month. You can also look forward to our popular Your Wealth edition tomorrow morning. The theme (predictably enough) is Ramadan.

PSA #1- A weeklong heat wave hits us on Saturday, which we expect is the first day of Ramadan. The mercury will start its rise today (look for a high of 30°C in the capital city), hit 36°C on Saturday and peak at 44°C a week from today, according to our favourite weather app’s long-range forecast.

PSA #2- The EGX announced (pdf) yesterday shortened hours that will be in place for the holy month. The opening bell will be at 10am and last trades will take place at 1:30pm.

Banks are also keeping shorter hours for the month, with employees due in from 9am-2pm, while customers will have access to services from 9:30am-1:30pm, the central bank has said (pdf).

SO, WHEN DO WE EAT? You have until 4:16am CLT on Saturday to have sohour, while maghreb prayers will signal the breaking of the fast on the first day at 6:15pm.


WATCH THIS SPACE- The IMF is sending more kind words our way as negotiations continue on an assistance package: IMF head Kristalina Georgieva has welcomed Egypt’s swift response to “head off the balance of payment shock and impact of rising food prices” caused by Russia’s war in Ukraine. Speaking with Finance Minister Mohamed Maait yesterday on the sidelines of the World Government Summit in Dubai, Georgieva said the Fund will “support a program that helps to buttress reserves, protect the vulnerable, and strengthen private sector-led growth.”

The IMF is talking with Egyptian officials about a new program that would “support the structural reforms of the Egyptian economy,” a cabinet statement said, without providing further details. Last week, the Madbouly government confirmed it had requested support from the IMF to cushion the impact of the war in Ukraine on our economy.

Egypt’s investment in education, healthcare and irrigation also got shoutouts from the IMF chief: In her opening remarks at the summit, Georgieva commended Egypt for investing in modern irrigation techniques, education, and health care, citing these efforts as “positive examples of prioritizing high-value, ‘no-regrets’ risk management measures justified under all plausible future climate scenarios.”

WHAT’S HAPPENING TODAY-

It’s Swvl’s big day in NY: Homegrown mass transit app Swvl will debut on the Nasdaq today, merging with its SPAC, Queen’s Gambit Growth Capital. We have all the details in this morning’s Speed Round, below.

PSA #3- Today is the deadline for all individual taxpayers to submit their 2021 tax returns to the Tax Authority. The deadline for companies with January-December fiscal years is 30 April.

Cyprus Energy Minister Natasa Pilidou is wrapping up her four-day visit to Egypt today. The minister is heading a delegation of Cypriot companies to discuss business ties with ministers and Egyptian firms.

OPEC+ will likely boost production during its meeting today but the expected increase will likely fail to bridge the supply gap from Russia, according to analysts surveyed by Bloomberg. Earlier this week the Saudi and UAE energy ministers have made clear they won’t be heeding US-led calls to kick Russia out of the oil cartel over its war in Ukraine. “We won’t add resources if the market is balanced, and the resources are in the market,” the Emirati minister said.


DATA POINT- Investors have poured some EGP 300 bn into 18% CDs launched by Banque Misr and the National Bank of Egypt (NBE) following last week’s 100-bps interest rate hike, according to Hapi Journal.

MARKET WATCH-

Gas rationing coming to Europe? Germany and Austria have activated an “emergency plan” to manage gas supplies yesterday that falls just short of full on rationing as they prepare for possible disruptions to Russian fuel supplies. Russia is demanding that all “unfriendly” countries purchase its gas using RUB rather than EUR, and is threatening to suspend shipments to countries that don’t comply. European buyers have so far rejected the demands, raising the stakes ahead of today when Russia is expected to announce the RUB payment mechanism.

The German economy faces a serious hit should the government have to ration fuel: according to regulations, industry will be first made to cut usage, protecting households and critical infrastructure. German economic experts are forecasting the economy to enter recession should supplies see disruption. The story has received coverage from Reuters, CNBC, the Guardian, and the Financial Times.

This may just be the beginning: Russia has indicated that it could soon price all of its exports in RUB, potentially cutting off not just hydrocarbons, but metals, grains and rare earth minerals to everyone who refuses to transact in its own currency. The proposal was put forward yesterday by the speaker of the parliament, and was quickly hit upon by Kremlin spokesperson Dmity Peskov, who said that "this is an idea that should definitely be worked on," Reuters reports

CIRCLE YOUR CALENDAR-

It’s a new month tomorrow. The key news triggers to keep your eye on:

  • PMI: Purchasing managers’ index figures for March for Egypt, Saudi Arabia, the UAE, and Qatar will be released on Tuesday, 5 April.
  • Foreign reserves: March’s foreign reserves figures will be announced during the first week of the month.
  • Inflation: Inflation figures for February are expected on Sunday, 10 April.

Companies have a little less than two weeks to file their first quarterly ESG compliance report: Listed firms and non-bank financial services companies need to submit their first quarterly ESG report by 10 April, the FRA said (pdf) on Sunday. The regulator is making it mandatory for corporates to publicly disclose their performance on key environmental, social and governance (ESG) metrics each year when they submit their annual financial statements, starting 2023. Reach out to Moustafa Taalab at InkankIR, our parent company, if you need some help.

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

enterprise

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ECONOMY

Saudi Arabia pledges USD 15 bn to support Egypt through Ukraine crisis

Saudi Arabia has deposited USD 5 bn with the Central Bank of Egypt (CBE), state-run Saudi Press Agency reported yesterday, as our Gulf neighbors move to help shore up our finances amid global fallout from Russia’s war in Ukraine. The deposit has a one-year maturity and could be rolled over, Bloomberg Asharq reports, citing a source with knowledge of the transaction.

In parallel, the Saudi sovereign wealth fund is looking to invest USD 10 bn in Egypt’s healthcare, education, agriculture and financial services sectors, according to a cabinet statement. The readout gave no details about when the Public Investment Fund would deploy the capital and the agreement is pending “constitutional procedures,” Prime Minister Moustafa Madbouly said.

Riyadh joins the UAE and Qatar providing us with support: Doha has committed to investing USD 5 bn in Egyptian companies and projects, while Abu Dhabi wealth fund ADQ has earmarked USD 2 bn to buy state-owned stakes in public companies. ADQ is reportedly eyeing state-owned stakes held in EGX-listed CIB and Fawry — high-profile, private-sector financial services companies — as well as a number of state-owned, semi-privatized fertilizer companies.

This means our Gulf allies have lined up USD 22 bn in investment and funding for Egypt, most of it having been announced this week after ADQ led the way earlier in the month.

Is Kuwait next in line? BNP Paribas thinks so. In a research note published earlier this week, the bank predicted Saudi would make a deposit and said it thinks there is a “reasonable chance” that we’ll be getting USD 2 bn from Kuwait in the coming weeks. President Abdel Fattah El Sisi has made visits to both the KSA and Kuwait for high-level talks in recent weeks.

Does all of this pave the way for a fresh round of IMF funding? “The transfer helps alleviate short-term funding pressures and should help seal the IMF program as it covers part of the expected funding gap,” EFG Hermes’ head of macro research, Mohamed Abu Basha, told Bloomberg. In a note this week, BNP Paribas estimated Egypt’s total funding gap in FY 2021-2022 is around USD 17.6 bn.

Talks with the Fund are ongoing: We’re in talks with the IMF over another rescue package, though the jury remains out on how much the Fund will lend us and what conditions will be attached to the loan.

BACKGROUND- By our math, the new deposit roughly doubles Saudi funds at the CBE to more than USD 10 bn, after Riyadh in October provided Egypt with USD 3 bn to help us overcome the effects of the pandemic and shore up its foreign reserves and extended the maturity of another USD 2.3 bn of existing deposits.

The move comes as the state grapples with rising food and energy prices, lower tourism revenues and portfolio outflows that continue to pressure our balance of payments on the back of Russia’s war in Ukraine.

M&A WATCH

National Bank of Egypt ups stake in Fawry — is a stake sale to ADQ next?

Another state-owned bank appears to have just bought a chunk of Fawry, likely setting up the sale of the government-controlled stake to Abu Dhabi’s ADQ. The National Bank of Egypt (NBE) has upped its stake in Fawry, less than a week after Banque Misr more than doubled its holdings in the fintech firm. The EGX-listed company announced yesterday that stakes totalling 6% of the company’s shares had changed hands and been acquired by an unnamed investor. Consensus in the press is that the buyer was the National Bank of Egypt (see: Bloomberg Asharq, Hapi Journal, Al Mal, and Al Shorouk). A top NBE official declined to confirm or deny the news when we asked yesterday.

Running the numbers: The state-owned bank paid more than EGP 1 bn in a block transaction, handing it some 102.5 mn shares at EGP 10.25 apiece. This raised its total stake in the company to 12.25%, making it the second-biggest shareholder after Banque Misr.

Who’s selling? The sellers were international investors, including Link Holdco and Black Sparrow Long Term Investments (which Fawry has previously said was controlled by FIM Partners), Asharq reported, citing sources with knowledge of the matter.

This would be the second state-owned bank to purchase shares in the fintech darling in the past week: Banque Misr last week purchased an 8.85% stake in a EGP 1.47 bn transaction, upping its ownership to 15.8%. Between them, the banks now own more than 28% of the company, up from around 13.2%.

All the more to sell to ADQ, which will reportedly purchase an undisclosed stake in the company as part of a USD 2 bn investment agreed earlier this month to shore up Egypt’s finances as its balance of payments comes under pressure from rising commodity prices. The Abu Dhabi wealth fund will acquire government-owned stakes in five EGX-listed firms including leading private sector bank CIB, Abu Qir Fertilizers, Mopco, and Alexandria Container & Cargo Handling.

IPO WATCH

Swvl to debut on the Nasdaq today after SPAC merger approved

Swvl is making its landmark Nasdaq debut today: Shares in Egypt-born, UAE-based mass transit app Swvl will start trading on the Nasdaq today, Swvl CFO Youssef Salem confirmed to Enterprise, after shareholders in its SPAC Queen’s Gambit Growth Capital approved the move in a general assembly meeting yesterday. Swvl is the second Middle Eastern tech company to list on the Nasdaq via a SPAC merger, after Abu Dhabi-based music streaming platform Anghami made its debut earlier this year.

Swvl is listing 35% of its shares under the ticker SWVL. Nasdaq trading opens at 9:30am EST — or 3:30pm CLT, with the shares set to open at USD 10 per share, Salem told us. The company plans to invest USD 250-300 mn over the next three years to expand its global footprint after it goes public.

All eyes will be on Swvl’s performance today — and there may be some trepidation given the headwinds SPACs (and the Nasdaq) have recently faced. Redemption rates for US SPACs are soaring, more blank-check mergers are being canceled, and the Nasdaq has been battered by an extended sell-off in tech stocks amid global volatility. Anghami saw mass redemptions on its debut, as shareholders traded in 9.8 mn of the SPAC’s 10 mn shares for cash.

But Swvl is feeling confident: “We are not concerned because we have a pipeline of fully committed capital, between the PIPE investments we’ve received and non-redemption agreements that we’ve signed with Queen’s Gambit’s investors,” Salem told us previously.

Backing the listing: The SPAC has raised USD 121.5 mn in private investment in public equities (PIPE). Among those committing capital were the European Bank for Reconstruction and Development (EBRD), auto parts maker Teklas’ VC arm Teklas Ventures, our friends at Chimera, as well as Agility, Luxor Capital Group, and Zain Ventures

LOCAL ADVISORS: Law firm Ibrachy & Dermarkar is Swvl’s legal advisor on the merger, while Vinson & Elkins and Shahid Law Firm are acting as advisors for Queen’s Gambit.

Swvl is also investing USD 15 mn in Argentina over the next three years to scale operations, Salem told us earlier this month. Swvl entered Latin America for the first time late last year with its acquisition of a controlling stake in South American firm Viapool, following a soft entry a few months earlier with its acquisition of Spanish firm Shotl, which operates its on-demand SaaS platform in Brazil.

CABINET WATCH

Cabinet is working on a roadmap for reducing the state’s involvement in the economy

The government has an outline of its long-term strategy to encourage private sector involvement in the economy: The Madbouly Cabinet reviewed the broad strokes of its strategy to encourage private sector involvement in the economy at its weekly meeting yesterday, according to a statement. The framework will provide a roadmap for reducing the state’s economic activities, charting which industries it will withdraw from and when, as well as ring fencing strategic sectors where it wants to retain a presence.

There aren’t many details as yet, but here’s what we know so far: The government is working on putting together a “comprehensive view” of which sectors the state will be involved in for the next three years, the statement says, without providing further details. It will outline a “gradual exit” plan for the state from certain activities, which would be implemented in phases. Once the strategy is announced, the government will run an assessment of all state-held assets in the sectors it plans to exit and put in place a mechanism for these exits. The statement did not provide a timeline for when the strategy would be finalized.

Planning Minister Hala El Said had earlier likened the system to a traffic light: Green means “Go” for private investors, red would mean “hands off,” while amber would be “we can work together on this.”

Background: The Madbouly cabinet first announced the strategy late last year. The announcement came as the PPP Act cleared the House, with the act having been designed to make it easier for private companies to bid for public infrastructure projects in a range of industries. The law is expected to both help Egypt close its infrastructure funding gap while also helping to address concerns that the state’s growing involvement in the economy, especially through mega-projects, is crowding out parts of the private sector.

Also approved during yesterday’s meeting:

  • Extending the charter flight incentives program until 30 April, 2023. The cabinet last week extended it until 31 October, 2022. The program pays out between USD 1.5k and USD 3.5k per flight to charter airlines.
  • A draft presidential decree on the EUR 221 mn financing agreement signed with the European Investment Bank (EIB) to partially finance the modernization of the Tanta-Mansoura-Damietta railway.
  • A EUR 78 mn loan from the EIB to contribute to financing the Helwan Wastewater Treatment Plant.
  • The draft Senior Care Act, which would outlaw age discrimination against people aged 65 and above and legislate rights for senior citizens.
  • The Prime Minister’s draft decision to issue the executive regulations for the law establishing technological universities that was passed in 2019. The statement didn’t disclose when the exec regs would be out.

AUTOMOTIVE

Offers roll in for the management of EV charging station company

Fourteen firms are vying to manage the state’s planned EV charging firm, Al Mal quoted Public Enterprises Minister Hisham Tawfik as saying. Bidding for the project closed at the end of last week.

Who’s bidding? Our friends at renewable energy giant Infinity have submitted an offer, a company representative confirmed to Enterprise. A consortium of MB Engineering EV charging subsidiary Sha7en (which recently signed an agreement to manage and operate 30 EV charging stations owned by defunct Revolta Egypt) and an unnamed French company is also in the running, Al Mal claims, citing unnamed sources. Saudi’s AlSharif Group and an unnamed Emirati firm have also submitted bids, the local outlet reports.

What they’re signing up for: The private sector partner selected to manage and operate the company will be locked in with a medium-term contract for its services, in exchange for a portion of the company’s net income. The operator will also be required to put up 25% of the JV’s capital. The company will set up 3k charging stations within 18 months around the country including in Greater Cairo, Alexandria and Sharm El Sheikh.

The company will be majority-owned by the private sector: Another 30% of the company will be offered to private sector firms, in addition to the 25% stake owned by the operator.

SFE, El Nasr + other state entities to split the remainder: The Sovereign Fund of Egypt, the Public Enterprises Ministry (via El Nasr Auto) and two other state entities will share the remaining 45% of the company, according to Al Mal. Each stakeholder will put up a corresponding portion of the venture’s initial EGP 150 mn capital, with another EGP 300 mn to be raised from local banks.

What’s next? The Public Enterprises Ministry is examining the offers. It will give priority to firms that have experience managing similar projects.

STARTUP WATCH

Intella closes USD 1 mn seed round + online grocer ON Market raises USD 215k

Cairo-based market research firm Intella has secured USD 1 mn in a seed funding round led by Hala Ventures, with participation from Falak Startups, the International Cooperation Ministry’s venture capital arm, Egypt Ventures, and a number of angel investors, according to a statement (pdf). The startup bills itself as the region’s first real-time intelligence provider, and aims to make data and market research more accessible and reliable by enabling customers to conduct “direct to consumer” market research.

The funding will help the company expand the platform’s tech offerings, including launching a platform-as-a-service (PaaS) and developing new AI-based predictive analytic tools. These tools “will ultimately help Intella ramp up its capacity to capture 1.2 mn + data points per day, while growing its panelist engagement platform to reach 500K verified users,” CEO Nour Altaher said.

ALSO FROM PLANET STARTUP-

Online grocery marketplace ON Market has raised USD 215k in a pre-seed round from regional angel investors led by Saudi Arabia’s Yasser AlGhamdi (LinkedIn), the company said in a statement (pdf). The startup will use the funds to expand in its existing Tanta and Cairo markets, launch in Mansoura and Alexandria, and scale its tech solutions.

About ON Market: The startup is the first in the market to allow shoppers to combine purchases from multiple retailers in a single order basket, according to the release. Customers can purchase up to EGP 1.5k of goods per order for delivery within an hour through the app, which launched in Tanta in 2020 before expanding to Greater Cairo’s Nasr City and Heliopolis in February. ON Market graduated last year from AUC Venture Lab’s accelerator program.

We like the fact that ON Market started in a governorate before moving into Cairo. More of this, please.

Future plans: The company aims to launch operations in Mansoura in the third quarter of this year, and in Alexandria in 2Q2023.


SME-focused fintech startup PayMint has closed a seven-figure seed round from Aur Capital subsidiary Aur Fintech, according to a press release picked up by Wamda. The release does not specify the currency of the seed round.

About PayMint: Founded in 2019, the company provides fintech services to SMEs, including salary payments, working capital financing, and supplier payments.

Where is the money going? The funding will support the company’s expansion plans in Egypt, which include launching new payment services and microfinance products for small firms.

ADVISORS: Our friends at ALC Alieldean Weshahi & Partners were legal advisors to Aur Fintech on the transaction.


Paymob + GrubTech partnership to streamline payments for Egypt’s F&B industry: GrubTech, a restaurant platform, and payment gateway Paymob have signed a partnership agreement to incorporate digital payments for local restaurants, cafes, and cloud kitchens using GrubTech, according to a press release (pdf). Industry players that use GrubTech’s PoS and restaurant management system will automatically be included in Paymob’s network, which will see Paymob process consumer card payments through GrubTech’s PoS.

WAR WATCH

24 hours is a long time in politics

Competing narratives have emerged from the ongoing Russia-Ukraine peace talks: Russian and Ukrainian negotiators made “substantial progress” in peace talks in Istanbul, Russian Foreign Minister Sergei Lavrov told state media, the Financial Times reported yesterday. Ukraine’s non-nuclear, neutral status was confirmed during the talks, and that the issues of Crimea and the Donbas — two Ukrainian regions where Russia has annexed territory — have been “settled for good,” he said.

Ukrainian officials had a different interpretation of the talks: Kyiv officials denied that any progress had been made in the issue of territory, with a foreign ministry spokesperson saying that Kyiv is only willing to discuss the future of Crimea and the Donbas once Russia has handed the territories back to them.

Russia continued to bomb Ukrainian cities, despite a pledge to de-escalate: Ukrainian officials accused Moscow of lying during Tuesday’s peace talks and said that shelling continued all through the night. The Kremlin had said it would withdraw troops and scale back attacks on the Ukrainian capital and the northern city of Chernihiv to “increase mutual trust” during the negotiations, but reports yesterday suggested that shelling continued in the region.

COFFEE WITH

Coffee With: Contact Financial Holding CFO Ayman Elsawy

Coffee with Ayman Elsawy, CFO of Contact Financial Holding: Egypt’s debt market has matured at warp speed in recent years, and the domestic securitization market has hit its stride in 2022, with a stream of corporate issuances totaling some EGP 9.2 bn (by our count) hitting the market in 1Q — more than half what we saw throughout 2021. Newer types of debt are also gaining traction in the local market: CIB brought us our first corporate green bond issuance last year, while this March saw Palm Hills Developments (PHD) sell the first corporate sukuk of 2022 after a quiet few years.

Looking ahead, there’s plenty to be excited about — not least the chance that we could see our first future flow securitization, after President Abdel Fattah El Sisi last week ratified amendments to the Capital Markets Act that will allow the new product to come to market.

Leading some of the most significant debt issuances of late is Contact Financial Holding (formerly Sarwa Capital). Contact subsidiary Sarwa Capital managed and promoted PHD’s EGP 3.25 bn sukuk issuance, and is also hoping to become the first to bring a future flow securitization to market at some point in the second half of this year. We sat down for coffee with Contact CFO Ayman Elsawy (LinkedIn) to discuss what made the PHD issuance different, how future flow securitization could shake up the debt market, and what the financial services firm has planned for the rest of this year.

Edited excerpts from our conversation:

This week’s EGP 3.25 bn sukuk issuance for Palm Hills was a very unique transaction. It’s the first time an Egyptian developer has tapped the sukuk market for a project that has yet to be built. Most developers sell units in advance, and rely on the proceeds to fund project construction. This is not ideal, because it can cause issues related to the developer’s cashflow and ability to complete the construction process. But with these sukuk, we can raise money in advance of construction, accelerating the building process and mitigating risks.

After last week’s devaluation, most developers are facing cost overruns in their projects due to increases in the prices of raw materials. They’ve sold the units at a specific price, but on the construction side, prices increased. This will lower bottom lines or even lead to losses for some projects. But for sukuk-funded projects, the rate of return will be enhanced significantly, because the developer can offer built units, giving them flexibility on pricing. It also gives developers the flexibility to rent rather than sell units, which could help solve the problem of unsold units in our housing market.

We’re hoping to issue another EGP 5-6 bn in sukuk this year. Our next issuance will likely be for Wadi Degla Developments, hopefully in the second or third quarter of this year. We’re targeting an issuance size of around EGP 1.2-1.5 bn, to finance the developer’s Murano project in Ain Sokhna. ALC Alielden Weshahi & Partners are acting as legal advisors, and our strategic partner Misr Capital is working with us on the issuance.

We’re in talks with the Financial Regulatory Authority to launch a future flow securitization now that the legal framework is in place. We hope to make an issuance for one of the largest corporate firms in Egypt in the second half of 2022. We’re lucky to have the support of the FRA to introduce this product. There needs to be a market first, and then we can further regulate it.

There’s a huge potential market for future flow securitization, with opportunities in both the corporate and government sector. It’s simply discounting cashflow on expected revenues, and using the discounted cashflow to expand. It’s a very useful way for anyone who has a solid cashflow stream to raise capex funding. Future revenues from flight tickets, school and university fees, hospital fees, club memberships, renewable energy, utility bills, and more could all be securitized. Say a school provider wants to expand and build a new premises, they can use the discounted cashflow to do so. The Finance Ministry could even consider securitizing tax revenues. It’s a new idea, so we need to educate businesses about the potential benefits.

I believe this year is still the right time to introduce future flow securitization to the local market despite current global challenges. I can see the demand, and I don’t see any reason to wait. The macroeconomics is going well, and the problems we’re facing are a one-off issue. There’s demand from the corporate side and investors have a lot of liquidity. We can also structure future flow issuances in flexible ways to mitigate risk and cashflow volatility.

Recent crises like the pandemic actually help us make better predictions when it comes to structuring future flow issuances. We have a lot of experience now about what can happen in a crisis, allowing us to forecast cashflow volatility across sectors and companies.

For now, we’re targeting products like sukuk and securitizations at sophisticated local investors, but we’re looking to expand. Given the current circumstances, there’s been a bit of a delay, but once we have a stable market I think the GCC in particular will be interested in investing in Egyptian sukuk.

Our longer-term target is to offer these kinds of debt instruments to retail investors. We need to activate the secondary market as soon as possible, because I can see the demand. Sukuk and some kinds of funds are especially attractive because they’re sharia-compliant. Our challenge now is to create a market mechanism and demand to offer products like sukuk to retail investors, and I believe we’ll see this soon. Once there’s a secondary market for these instruments, I think it will encourage a lot of issuances. Accessing the retail market could be a game changer.

In terms of future trends in debt, we’re excited about moveable assets, money market and other types of funds. We’re hoping to soon launch a movable assets fund after clearing some final points with the FRA. [Editor’s note: Movable assets funds provide liquidity to businesses by using assets such as accounts receivables, inventories, and machinery as collateral. Unlike securitization, this doesn’t require issuing bonds or the setup of a special purpose vehicle.] It’s a very interesting tool for non-bank financial institutions, and a very lucrative product for the retail market. We’re also focusing on money market funds — Contact’s ins. arm, Sarwa Life Ins., successfully launched one in February last year. I believe such funds will solve the challenge of accessing retail investors directly.

KUDOS

Brand Finance has named Orascom Construction as Egypt’s most valuable brand, valuing it at USD 558 mn. Rounding out the top five of the country’s most valuable brands: National Bank of Egypt, Eastern Company, Banque Misr, and CIB. The leading private-sector bank was also named the strongest brand in the country.

Egypt joins the first wave of the GCCA’s Net Zero Accelerators Initiatives: Egypt was among emerging markets selected to be part of the first wave of the Global Cement and Concrete Association’s Net Zero Accelerator program, the association said in a statement. The initiative will help cement and concrete producers “decarbonize” their infrastructure and switch up their practices to line with the GCCA’s 2050 Net Zero Roadmap. Egypt joins India, Thailand and Colombia, which collectively make up 10% of global cement and concrete production, the statement said.

CIB is partnering with waste management startup Bekia to collect and recycle damaged bank cards, as part of the bank’s efforts to reduce its carbon footprint, said in a statement (pdf).

Food ordering app Talabat Egypt has partnered with Ibrahim Badran Foundation, which provides charitable medical services to remote communities, it said in a statement (pdf). Talabat users can use the app to donate to the foundation.

BonelliErede is moving into Libya in partnership with Zahaf & Partners, the law firm said (pdf), noting that it has also recently opened offices in Cairo, Addis Ababa and Dubai.

enterprise

LAST NIGHT’S TALK SHOWS

Last night’s talk shows were all about Saudi Arabia’s generous backing of our economy. ICYMI: Saudi has joined Qatar and the UAE and pledged around USD 15 bn to shore up our finances which have taken a hit due to the Ukraine war. Yahduth Fi Masr (watch, runtime: 1:00), Masaa DMC (watch, runtime: 1:18), and Al-Tasi’a (watch, runtime: 4:50) all had coverage, while Saudi Ambassador to Egypt Osama Naqli phoned in to Ala Mas’ouleety to discuss the news (watch, runtime: 4:52). You can read all the details in this morning’s Economy section, above.

Zelensky calls Sisi for the second time in a week: Ala Mas’ouleety covered the latest phone conversation between President Abdel Fattah El Sisi and Ukrainian President Volodymyr Zelensky, who called for the second time in less than a week yesterday (watch, runtime 2:19). El Sisi emphasized the need to reach a peaceful solution to the ongoing conflict with Russia, according to an Ittihadiya statement.

Finance Minister Mohamed Maait’s chat with IMF chief Kristalina Georgieva in Dubai yesterday also caught the talking heads’ attention, including Al Hayah Al Youm’s Mostafa Sherdy (watch, runtime 3:50). We have more in this morning’s What We’re Tracking Today section, above.

EGYPT IN THE NEWS

This morning in the foreign press: With foreign journalists having run out of things to say about Egypt + food prices, attention is still trained on the aftermath of our dismal showing in Tuesday’s World Cup qualifier against Senegal. The Pharaohs are blaming racism for their defeat and are lodging a formal complaint with the Confederation of African Football. (CNN | ESPN | BBC | Sky Sports)

PLANET FINANCE

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Has the bear-market rally run out of steam? US shares ended a five-day run of gains yesterday as hopes for an imminent peace agreement between Russia and Ukraine faded, Bloomberg says. After paring much of their YTD losses over the past week, the Nasdaq 100 and the S&P 500 both slid as analysts warned of continued market risk. “While we respect that the amount of liquidity that’s out there and the desire to ‘buy the dip’ after we saw a correction in the S&P 500 and a bear market in the Nasdaq, the reality is that risk has really fundamentally gone up, whether you’re talking about geopolitical risk,” or fundamentals, “ Lisa Shalett, CIO of Morgan Stanley Wealth Management, told Bloomberg TV. “We continue to caution folks about the vulnerability of earnings here.”

ALSO FROM PLANET FINANCE-

  • Dubai’s main utilities firm DEWA has nearly tripled the size of its IPO to as much as USD 5.7 bn, setting it up for the biggest listing in the Middle East and Europe in over two years. (Bloomberg)
  • BP looks to Asia to help its Russian exit: The UK energy giant has reached out to state-backed energy firms in China, the Middle East, and India in efforts to offload its Russian assets. (Bloomberg)
  • Hackers made off with some USD 600 mn of cryptocurrency from a blockchain network connected to a popular crypto gaming platform, in what could be one of the biggest crypto heists ever. (Bloomberg )

H/t to reader M. Moftah, who wrote to us yesterday to suggest that we start including European shares in our daily market table. Thank you for the suggestion, and you can consider it done — see below.

** WE LOVE HEARING FROM READERS: Got feedback for us? Want to send us some fan / hate mail? Get in touch at editorial@enterprisemea.com.

Down

EGX30

11,239

-1.4% (YTD: -5.9%)

Up

USD (CBE)

Buy 18.23

Sell 18.33

Up

USD at CIB

Buy 18.23

Sell 18.33

None

Interest rates CBE

9.25% deposit

10.25% lending

Down

Tadawul

13,038

-0.5% (YTD: +15.6%)

Down

ADX

9,846

-0.6% (YTD: +16.0%)

Up

DFM

3,527

+0.4% (YTD: +10.4%)

Down

S&P 500

4,602

-0.6% (YTD: -3.4%)

Up

FTSE 100

7,579

+0.6% (YTD: +2.6%)

Down

Euro Stoxx 50

3,959

-1.1% (YTD: -7.9%)

Up

Brent crude

USD 113.45

+2.9%

Down

Natural gas (Nymex)

USD 5.60

-0.2%

Down

Gold

USD 1,937.90

-0.1%

Down

BTC

USD 46,990

-0.6% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 1.4% at yesterday’s close on turnover of EGP 751 mn (22.7% below the 90-day average). Foreign investors were net sellers. The index is down 5.9% YTD.

In the green: Qalaa Holdings (+1.4%), Orascom Construction (+1.3%) and Oriental Weavers (+1.3%).

In the red: GB Auto (-3.8%), Rameda (-3.1%) and MM Group (-2.6%).

DIPLOMACY

President Abdel Fattah El Sisi held talks with Sudan’s military leader, Abdel Fattah Al Burhan, in Cairo yesterday, according to an Ittihadiya statement. The two leaders agreed to deepen military and security ties, as well as coordinate their responses to the Grand Ethiopian Renaissance Dam. Al Burhan has been the de facto leader of Sudan since October.

UN Sudan envoy in town: Al Burhan’s appearance in Cairo coincided with the visit of the UN’s Sudan envoy, Volker Perthes, who met with Foreign Minister Sameh Shoukry yesterday, according to a ministry statement. Perthes is spearheading efforts to end the political deadlock in the country, which he warned earlier this week is heading towards “economic and security collapse” unless a political settlement is found.

UK wraps up trade mission to Egypt: A delegation of UK businesses has wrapped up a three-day visit to Egypt, during which they discussed collaboration and investment with members of the Egyptian business community and several cabinet ministers. The visit was organized by the Egyptian-British Chamber of Commerce and took place 27-30 March.

Egypt’s Foreign Ministry has denounced a shooting in the Israeli capital Tel Aviv that killed five people, stressing in a statement its “complete rejection of all forms of violence and terrorism.” The ministry warned that “mutual escalation will only lead to tensions and frustration.”

AROUND THE WORLD

Lebanon is inching closer to an agreement with the IMF as it tries to claw its way out of a devastating financial and economic crisis, Bloomberg reports, citing a senior official. The Lebanese government is hoping a visit from an IMF delegation to Beirut this week will end in inking an economic memorandum on measures the country needs to implement for the international lender to disburse up to USD 5 bn in aid. The country is facing runaway inflation and a currency crisis after defaulting on over USD 30 bn worth of debt last year, but authorities are crossing their fingers for a liferaft from the international lender ahead of May elections.

Riyadh + Abu Dhabi want a formal security pact with the US: Saudi Arabia and the UAE are lobbying Washington to sign a formal security treaty that would provide them with military aid, Bloomberg reports. This comes following several fresh attacks on Saudi oil facilities by the Iran-backed Houthi rebel group in Yemen.

MY MORNING ROUTINE

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Marwa Abbas, general manager and technology leader, IBM Egypt: 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 Marwa Abbas (LinkedIn), the general manager of IBM.

My name is Marwa Abbas, and I’m the new general manager of IBM Egypt. I usually introduce myself very differently depending on whether I’m talking to colleagues or peers or to someone random outside of the realm of work. If it’s a professional context, I would always just give a simple “I’m Marwa Abbas from IBM.” I wouldn’t really go beyond that, and I find that many women provide simpler answers to that question, as opposed to men. Generally, in a professional context, it’s not even Marwa speaking — it’s the company; I become the voice of the company.

I wake up around 6am, and I pray. I sit with myself for a good hour, just to meditate and pray. This was always the case, whether it was when my kids went to school or now that they’re all grown up. My grandfather always used to say that God gives out blessings early in the day — I always remember that, so wake up early and work early.

Over the past two years, I began to do some stretching in the morning. I don’t do much sports so I try to incorporate this kind of movement into my day. I do this no matter what. Even if I have to leave my house at 7am, then I wake up at 5am, and devote at least two to three hours to my morning routine. Oh, and I never forget to call my mom [laughs]. That’s essential.

Then I get my coffee and plan my day — both on the personal side and on the professional side. Sometimes, I get requests early in the morning and people tell me to take a look at things but before I do any of that, I always have to plan my day first, then I kick off to work.

The calls start coming in right away. The moment I get into my car, that’s when the workday begins and I start getting back-to-back calls. Then from calls, I go to meetings, then back to calls, and so on and so forth. On a day-to-day basis, I get sucked into a lot of different logistical things.

The only way I can focus is by writing. I use a pen and paper, write down a to-do list, and that alone gives me a lot of satisfaction and a push to get things done.

Every week or weekend, I have to pause and look back on my week and ask, “Did I miss out on anything?” Usually, you won’t be able to see the strategic big picture in the day-to-day. Time flies by and you get sucked into different things, which is why you need to always stop and reassess.

During the week, I rarely have time to do any activities like connect with friends, although I do prioritize this type of connection both with friends and family. But every month or two, my husband and I always try to vacation together for a weekend, whether in Alexandria or Gouna, with friends or family. This really makes a difference for me, and helps me step out of my routine.

But I think there’s room for improvement for me when it comes to work-life balance. I think it’s mainly because I’m starting a new position, but normally, I have always been able to maintain a work-life balance to a great extent. I would attend my kids’ school activities, show up to parent meetings, go to sports days — and work while I’m doing all of it.

At the end of the day, I turn on the TV, and watch a super random old film. I even go for movies I’ve seen a mn times, but I focus and watch as though it’s the first. I’m never in the mood to watch something new, because I don’t want to concentrate. I just want to watch without really thinking about what I’m watching.

My go-to series for those days is Raafat El Haggan [laughs]. I’m really into shows and movies that are historical and about Egypt. Ayam El Sadat is another favorite of mine, and movies like Asal Eswid. You’ll notice that the common factor between all of those is a focus on Egypt.

On the personal side, I want to take care of my and my family’s health and well-being. On the professional side, I would hope to succeed to have an impact for Egypt with IBM and to continue building on its successes and accelerate this progress towards digital transformation. That’s the aspiration that I have for my team, and I think we have the assets, capabilities and skills to do this.

CALENDAR

1Q2022: Launch of the Egyptian Commodities Exchange.

1Q2022: Swvl acquisition of Viapool expected to close.

1Q2022: Rameda Pharma will begin selling its generic version of Merck’s oral antiviral covid-19 med.

1Q2022: Pharos Energy’s sale of a 55% stake in El Fayum, Beni Suef concessions to IPR Energy Group subsidiary IPR Lake Qarun expected to close.

Early 2022: Results to be announced for the second round of the state’s gold and precious metals auction.

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

1H2022: Transport Ministry to sign a memorandum of understanding with Abu Dhabi Ports to set up a transport route across the Nile to transport products from Al Canal’s Minya sugar factory.

15 February-15 June (Tuesday-Wednesday): ITIDA’s Technology Innovation and Entrepreneurship Center is organizing the first Metaverse Hackathon.

March: Rollout of the government financial management information system (GFMIS), a suite of electronic tools to automate the government’s financial management processes (pdf) that will replace the existing “closed” financial management system.

March: Contracts for last two phases of Egypt’s USD 4.5 bn high-speed rail line to be signed.

March: 4Q2021 earnings season.

March: Deadline for the World Health Organization’s intergovernmental negotiating body to meet to discuss binding treaty on future pandemic cooperation.

March: The government hopes to sign a final contract between El Nasr Automotive and a new partner for the local production of electric cars.

March: Egypt to host World Tourism Organization Middle East committee meeting.

March: The Salam – new administrative capital – 10th of Ramadan Light Rail Train (LRT) line will start operating.

March: The new multi-purpose station at Dekheila Port and the revamped Ain Sokhna Port will start operating.

March: General Authority for Land and Dry Ports to issue the condition booklets for the operations of the Tenth of Ramadan dry port.

Mid-March: Bidding for the construction of Anchorage Investments’ petrochemical complex in the Suez Canal Economic Zone starts.

14 March-30 June: The “Escape to Egypt” exhibition at the Coptic Museum, in celebration of its 112th anniversary.

24 March-1 April: Ahlan Ramadan Supermarket Expo, Cairo International Convention Center.

30 March (Wednesday): The Angola-Egypt Investment Roundtable discussion (pdf), the Hilton Cairo Heliopolis Hotel.

31 March (Thursday): Deadline for submitting tax returns for individual taxpayers.

31 March (Thursday): Vodacom purchase of Vodafone Group’s stake in Vodafone Egypt expected to be completed by this date.

31 March (Thursday): Supply Ministry expected to take final decision on bread subsidies by this date.

31 March (Thursday): OPEC+ meets to review a modest oil supply rise.

April: Fuel pricing committee meets to decide quarterly fuel prices.

April: Ghazl El Mahalla shares will begin trading on the EGX.

2 April (Saturday): First day of Ramadan (TBC).

3 April (Sunday): Bidding begins on the Industrial Development Authority’s license to manufacture tobacco products.

4 April (Monday): CDC Group will formally change its name to British International Investment.

10 April (Sunday): Deadline for listed companies and NBFIs to submit quarterly ESG report.

11 April (Monday): The deadline to submit bids for Chelsea FC.

14 April (Thursday): European Central Bank monetary policy meeting.

Mid-April: Trading on the Egyptian Commodity Exchange to start.

21 April (Thursday): EGX-listed Taaleem will hold an extraordinary general assembly to discuss the mechanism to build and own nonprofit and private universities.

22-24 April (Friday-Sunday): World Bank-IMF Spring Meetings, Washington D.C.

24 April (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April (Monday): Sham El Nessim.

25 April (Monday): Sinai Liberation Day.

28 April (Thursday): National Holiday in observance of Sham El Nessim.

30 April (Saturday): Deadline for submitting corporate tax returns for companies whose financial year ends 31 December.

30 April (Saturday): Deadline to apply to the Tatweer Misr Innovation Competition.

Late April – 15 May: 1Q2022 earnings season

May: Investment in Logistics Conference, Cairo, Egypt.

1 May (Sunday): Labor Day.

1 May (Sunday): Suez Canal Authority raises tolls for different vessels.

3-4 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

4 May (Wednesday): 3 February (Thursday): Deadline to send in applications for Cultural Property Agreement Implementation projects to the US Embassy in Cairo.

5 May (Thursday): National Holiday in observance of Labor Day.

2 May (Monday): Eid El Fitr (TBC).

19 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

5-7 June (Sunday-Tuesday): Africa Health ExCon, Al Manara International Conference Center, Egypt International Exhibitions Center, and the St. Regis Almasa Hotel, New Administrative Capital.

9 June (Thursday): European Central Bank monetary policy meeting.

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

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

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

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

30 June (Thursday): June 30 Revolution Day, national holiday.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

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

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release first financing product.

July: A law governing ins. for seasonal contractors will come into effect.

July: Fuel pricing committee meets to decide quarterly fuel prices.

Early July: Polish President to visit Egypt.

1 July (Friday): FY 2022-2023 begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 300 MW to be completed.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

September: Egypt will display its first naval exhibition with the title Naval Power.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

8 September (Thursday): European Central Bank monetary policy meeting.

20-21 September (Tuesday-Wednesday): Federal Reserve Finterest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

October: World Bank and IMF annual meetings in Washington, DC

October: Fuel pricing committee meets to decide quarterly fuel prices.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

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

27 October (Thursday): European Central Bank monetary policy meeting.

Late October – 14 November: 3Q2022 earnings season.

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

4-6 November: The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

7-18 November (Monday-Friday): Egypt will host COP27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

January 2023: EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

**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 above between the actual holiday and its observance.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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