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Sunday, 13 December 2020

What we’re tracking on Sunday, 13 December 2020

We’ve got 19 days left until the end of 2020, and the end-of-year the news slowdown isn’t anywhere in sight as a dearth of corporate news over the weekend was more than made up for by news on the covid front and a looming deadline for a Brexit trade agreement that’s keeping things interesting with two of our largest trade and tourism partners.

Egypt became the first African nation with a ready-to-go vaccine for covid-19 after receiving the first shipment of China’s top jab late Thursday night, the Health Ministry announced. Egypt was among the countries participating in clinical trials for Sinopharm entry, which has shown to be 86% effective in fighting the disease. We have chapter and verse in this morning’s Covid Watch, below.

And it’s decision day for Brexit as both European Commission chief Ursula von der Leyen and UK PM Boris Johnson said it was unlikely the two would agree on a trade pact by today’s deadline. Business competition rules and fishing rights are the main sticking points.

CIRCLE YOUR CALENDAR- The legislative branch of government will wake from its slumber this week.

Up first: The final results for parliamentary elections held in Cairo and 11 other governorates will be announced tomorrow.

The current crop of MPs meets again on Tuesday when the House of Representatives reconvenes from its fall recess.

Also on Tuesday: The US Federal Open Market Committee kicks off its two-day policy meeting to review interest rates. Here at home, the Central Bank of Egypt will meet to do the same on Christmas Eve.

PSA- The weather is probably going to suck this week. There’s no more polite word for it. Look for sand and blowing dust across Cairo today and tomorrow, the Egyptian Meteorological Authority said, according to a cabinet statement, and for scattered rain along the North Coast.

Our favorite weather app is predicting a high today of 29°C in the capital city before the mercury eases to 20-21°C for much of the rest of the week. Look for a chance of a shower on Tuesday and up to 3mm of rain in Cairo on Wednesday.

ON THE GLOBAL FRONT, EM sage Mark Mobius sees good things for emerging markets in 2021: Developing countries are expected to outperform developed nations in 2021 as vaccines become more widely distributed early next year, veteran fund manager and EM investment guru Mark Mobius said at the Reuters Global Markets Forum in Dubai late last month. This will be the outcome of the positive knock-on effects of the vaccine, while developed markets are expected to continue to struggle to prop up their economies in 2021 as they had been in 2020, he said.

What’s top of mind for the man who literally invented EMs as an asset class?

  • Top countries: “India and China are the big ones for us now, but a lot of these other countries like South Korea and Taiwan are very significant; and then if you go to Turkey and South Africa, prospects are very good in a year or two from now.”
  • Top sectors: “Sectors, including healthcare and education, that use technology effectively will be among the best performing in 2021.”
  • ESG investing to shine in 2021: Sustainable investing, especially corporate governance, will become even more critical in the context of a post-pandemic recovery.

Planet Startup saw its most lucrative year on record for IPOs. More than USD 157 bn has been raised in 2020 as of Thursday, with a third of that coming in the past 11 weeks, according to the Wall Street Journal. By number of listings, it was the biggest IPO year since 2000.

But wait, it’s 2020 — things could always take a turn for the worse. That’s the take-home message from the FT in Wall Street IPO bonanza stirs uneasy memories of 90s dotcom mania. The salmon-coloured paper thinks things are looking a bit frothy, but the head of global internet investment banking at Goldman Sachs thinks “the super cycle will continue,” saying there are more than 70 companies waiting in the wings that could be worth at least USD 5 bn apiece.

Extreme pops in first-day trading of DoorDash and Airbnb appear to have prompted at least two companies to postpone their IPOs, the WSJ reports, saying that point-of-sale lender Affirm and videogame outfit Roblox have both put their listings on hold.

Will 2021 be a boom year for IPOs on the EGX?

We hope just a tiny bit of that frothiness spills over into Egypt to fuel the resurgence of our IPO market in 2021. Among others, potential listings next year include CI Capital’s education platform Taaleem, NBFS player Ebtikar, and state-owned football club Ghazl El Mahalla, all of which could sell shares as early as 1Q2021. Perennial IPO candidates Banque du Caire and E-Finance are also waiting in the wings, and LSE-listed consumer healthcare company Integrated Diagnostics Holdings (IDH) said last month it is considering a dual listing of ordinary shares on the EGX. Agri outfit Galina Holding and Arabia Investment Holding’s financial services arm are also said to be considering tapping the market.

A new entrant in the IPO sweepstakes: Cottonil is considering going public next year, Chairman Basil Samakia told Masrawy, without disclosing any further details on the size or expected value of the offering. Samakia added that the company plans to open 50 new branches this coming year.

Not heading to IPO soon: Qalaa Holdings energy play TAQA Arabia, which had previously planned to list 30-40% of its shares. Qalaa is also unlikely to go ahead with its plan to take public ARC, the parent company of its Egyptian Refining Company, given where oil prices are right now.

Now THAT’S how you do a start-of-trading ad: A subtle entry from Airbnb to mark the debut of its shares (watch, runtime: 1:11).

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