EM specialist Renaissance Capital opens office in Egypt, hires Younis from CI Capital as country boss: Emerging markets investment bank Renaissance Capital is planning an expansion of its M&A and IPO pipeline in Egypt after officially opening Renaissance Capital Egypt SAE last week, the company said yesterday. “The firm is already working with several companies planning to raise debt in USD, with one expected to sell notes in the next three months,” said our friend Ahmed Badr, MENA CEO at Renaissance Capital. “RenCap has been mandated to work on an IPO set for pricing in 3Q2018. The firm is also in conversation with Egyptian companies targeting M&A opportunities outside the country, mostly in eastern Africa,” he added. RenCap Egypt is applying for an investment banking license, which it hopes to receive in the next four to six weeks. RenCap doesn’t intend to apply for a brokerage license, a market that’s already saturated, said Badr.

MOVES- To that end, RenCap has hired former CI Capital banker Mohamed Younis as the new CEO of investment banking operations in Egypt. He will report to will report to Badr, who will be chairman of the board, and to RenCap’s global head of investment banking James Friel. Abdalla ElEbiary, chairman of the Egyptian Private Equity Association, and Amr Helal, head of corporate private equity at Capstone Group and formerly of the Abraaj Group, will serve as non-executive members of the bank’s board. “The firm is in discussions to hire four investment bankers and potentially four analysts for its Egyptian team. Mohamed Zein, RenCap’s Dubai-based head of consumer research, will relocate to Cairo, where he will keep the same position,” Bloomberg quotes Badr as having said.

Subsidy cuts, interest rates, commodity prices will impact the CBE’s inflation targets – Badr: Speaking to Bloomberg TV in an interview on Monday, Badr said that further subsidy cuts will be the biggest determining factor on whether inflation will drop below the CBE’s target of under 30% this year. The big question on everyone’s mind is whether the CBE will move interest rates in November or January. If they do, we can expect a flurry of investments in companies that could not pass the cost of inflation to consumers, said Badr. Another factor to watch out for is the increase in commodity prices, which is likely to impact a net-importer such as Egypt. “This is why I am not as bullish,” said Badr.

On the bull market in Egypt’s fixed income, Badr expects the rally to continue so long as interest rates stay high — Egypt is the most attractive emerging market in terms of the “hot money.” Other factors to look for include the EGP staying cheap, which Badr expects to continue to at least mid-2018, and other global market factors. Other sectors which seem attractive include the consumer market, which has proven resilient, and tobacco, says Badr.

You can catch the Bloomberg show here(scroll forward to 1:28:30 for Badr’s interview)