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Thursday, 18 February 2021

Credit Agricole and NBK Egypt plan capital raises + it looks like Banque Misr is upping its bid for CI Capital

The EGX30 fell 0.3% at today’s close on turnover of EGP 1.3 bn (9.8% below the 90-day average). Local investors were net buyers. The benchmark index is down 1.1% for the week, but up 4.9% year-to-date.

In the green: Orascom Investment Holding (+4.3%), Abou Kir Fertilizers (+3.3%) and Sidi Kerir Petrochemicals (+3.2%).

In the red: Orascom Financial Holding ( -6.2%), Palm Hills Development (-3.2%) and ElSewedy Electric (-2.7%).

MARKET NEWS WORTH KNOWING-

Credit Agricole and NBK Egypt plan capital raises this year to meet CBE requirements: Credit Agricole Egypt will hike its capital by mid-September to meet the Central Bank of Egypt’s (CBE) EGP 5 bn minimum capital requirement, which is part of the Banking Act that was passed late in 2019, Managing Director Jean Pierre Trinelle told Al Mal. Credit Agricole Egypt had increased their authorized capital to EGP 6 bn last March, Trinelle added. Meanwhile, NBK Egypt’s board approved a capital raise of EGP 3.5 bn to comply with the CBE requirement as well as increase the authorized capital from EGP 2.5 bn to EGP 10 bn, according to an EGX filing (pdf).

EARNINGS WATCH- CI Capital’s net profits fell 12% y-o-y in 2020 to EGP 475 mn, with NBFS contributing 90% of the company’s bottom line, according to the company’s earnings release (pdf). Consolidated revenues dipped 10% y-o-y to EGP 2.4 bn, with NBFS activity contributing 84% of the top line. The firm’s total on-balance-sheet financing portfolio grew 10% y-o-y in 2020 to reach EGP 10.3 bn. Commenting on the year’s performance, the report said that CI Capital demonstrated resilient performance in 2020, despite an unprecedented challenging year, fueled by the strong performance of its NBFS platform and solid balance sheet. CI is optimistic that it is in a solid position to capitalize on the ongoing recovery in business activity and capital markets in 2021.

Banque Misr isn’t going to up its offer for CI Capital shares, according to a bulletin out just now from the Financial Regulatory Authority. Trading in CI Capital shares was suspended earlier today amid speculation that Banque Misr intended to change its offer price. Banque Misr will pay EGP 4.70 per share and is seeking to take up to 90% of CI. The financial services firm’s shares closed today at EGP 4.65.

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