Back to the complete issue
Sunday, 1 April 2018

What we’re tracking on 1 April 2018

Egyptian stocks have posted their best month since the EGP float in March, with the EGX30 rising for four straight sessions as of Thursday and extending its gain this month to 13%, write Filipe Pacheco and Tamim Elyan for Bloomberg. The benchmark, which has risen 41% since the beginning of 2017, has now climbed for seven weeks in a row, the longest streak of weekly gains since August 2014.

The election effect? The stellar performance this month was buoyed by investor expectations that the successor to the Ismail government would press ahead with sweeping economic reforms following Abdel Fattah El Sisi’s expected re-election as president, Bloomberg writes. This comes as business leaders ranging from Naguib Sawiris to Raouf Ghabbour said a second term for El Sisi would be good for the economy, telling Reuters’ Arwa Gaballa that reforms, investment in infrastructure and the float of the EGP have re-set the economy.

Footnote: These are the only positive stories on the elections we’re seeing from the foreign press.

State media are calling the election for El Sisi with 92% of the vote, based on preliminary figures. Contender Moussa “Something” Moussa got an estimated of 3% of the vote, Ahram Gate reports, coming in third in the two man race. Some 25 mn of the 59 mn eligible voters turned out to vote, which puts the turnout at around 42%.

The National Elections Authority (NEA) will announce the final results tomorrow at a 6:00 pm press conference, according to Youm7.

The government is pricing the USD at EGP 17.25 and sees oil at USD 67 a barrel in its FY2018-19 budget, Prime Minister Sherif Ismail told reporters on Thursday, according to Reuters. Economist Reham El Desoki tells Al Shorouk that the budget’s oil price forecast is very much in line with global energy expectations, as the price is expected to be volatile in light of regional and global instability. The budget, whose broad strokes were revealed on Wednesday, is assumed to be with President Abdel Fattah El Sisi for sign-off. The government had said it would present the budget to the House any day now.

Has the hunt for yield resurrected this financial WMD? Yield-hungry investors are increasingly turning to the mortgage backed security, widely blamed for the global financial crisis, Ben McLannahan and Joe Rennison write for the Financial Times. 2017 saw the issuance of USD 4.1 bn in “subprime” mortgage securities with the pace picking up in the latter half of the year, they say. “The momentum has continued into 2018, with [transactions] worth USD 1.3 bn in the first quarter — twice the USD 666 mn issued in the same period a year earlier. “[Investors] are definitely chasing yields. Whenever these deals come out, for the most part, they are oversubscribed,” says Jamshed Engineer, partner at New York hedge fund Axonic Capital.

Heading to the US with shady stuff on your social media accounts? A State Department proposal could require US visa applicants to detail their social media records and profiles, Reuters reports.

PSA #1- It’s April Fool’s Day. Also, the start of 2Q, meaning the year is a quarter of the way finished — and that the clock is ticking on your 1Q earnings release.

PSA #2- The Easter and Sham El Nessim long weekend is coming up: The two holidays fall on 8 and 9 April, respectively. We hope you’re looking forward to a four-day weekend as much as we are.

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.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.