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Thursday, 20 May 2021

Junk SPACs are becoming an issue of concern

Silicon Valley veteran is worried about the proliferation of “junk” SPACs: The meteoric growth in the number of blank check companies going public over the past year has drawn concern that acquired companies and SPAC investors will be harmed as the period of manic speculation comes to an end. The 50-year private equity veteran Sandy Robertson tells the Financial Times “time is running out” for SPACs, as the fundamentals catch up with the over inflated valuations. The SPAC market has already lost a lot of air, with April being the slowest month for new blank-check IPOs since June 2020. Shares in some companies are down 80% and two-thirds are now trading under the standard USD 10 a share IPO price. Need a refresher on SPACs? We’ve got you covered.

Up

EGX30

10,806

+0.2% (YTD: -0.4%)

None

USD (CBE)

Buy 15.63

Sell 15.73

None

USD at CIB

Buy 15.62

Sell 15.72

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

10,373

-0.5% (YTD: +19.4%)

Down

ADX

6,519

-0.2% (YTD: +29.2%)

Up

DFM

2,711

+0.2% (YTD: +8.8%)

Down

S&P 500

4,116

-0.3% (YTD: +9.6%)

Down

FTSE 100

6,950

-1.2% (YTD: +7.6%)

Down

Brent crude

USD 66.61

-0.1%

Down

Natural gas (Nymex)

USD 2.96

-0.2%

Down

Gold

USD 1,870.80

-0.6%

Down

BTC

USD 38,105.08

-6.74%

The EGX30 rose 0.2% at yesterday’s close on turnover of EGP 1.82 bn (31.5% above the 90-day average). Regional investors were net buyers. The index is down -0.4% YTD.

In the green: Qalaa Holdings (+3.4%), MM Group (+3.1%) and Edita (+3.1%).

In the red: Orascom Development Egypt (-2.7%), GB Auto (-2.2%) and Heliopolis Housing (-1.6%).

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 HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; 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; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.