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Thursday, 20 May 2021

THIS MORNING: It’s a big day for capital markets as EFG gets AIB acquisition nod, IDH starts trading and global shares slump

Good morning, friends, and welcome to a pleasantly busy news morning to start this last business day of the week.

THE BIG STORY HERE AT HOME is that EGX-listed EFG Hermes has just taken a major step toward becoming a universal bank after cabinet approved yesterday the firm’s acquisition of a controlling stake in Arab Investment Bank in partnership with the Sovereign Fund of Egypt. The acquisition, when concluded, would be a most welcome landmark for the SFE, establishing it as a broker of meaningful options for public-private partnership. We have the rundown in this morning’s news well, below, and expect to have more details on the multi-bn transaction in this afternoon’s edition of EnterprisePM.

It’s also a big day for the EGX as shares of LSE-listed Integrated Diagnostics Holding (IDH) begin trading under the ticker IDHC. The consumer healthcare giant’s technical listing is the first of its kind in Egypt and makes it the second company to debut on the Egyptian bourse this year, after higher education outfit Taaleem, which ended nearly two-year-long IPO drought.

Also worth knowing about: Most of the government’s covid-19 restriction measures have been extended until the end of the month — and the decision will require all schools to go back online at the beginning of June. The announcement comes as daily infections have been inching down slightly over the past three days, but remain above 1k. We have chapter and verse in this morning’s news well, below.

Flights from Riyadh are back on: The first two commercial Saudi Airways flights from Riyadh and Jeddah to Egypt since Saudi lifted its covid-19 travel ban landed in Sharm El Sheikh yesterday.

MARKET WATCH-

Global markets are looking a bit choppy this morning after US shares extended losses to a third straight day on Wednesday. The tech-fueled selloff followed slumps in Asia and Europe earlier in the day and was accelerated as “the latest minutes from the Federal Reserve reinforced fears of a potential pullback of crisis-era support measures should the economic recovery continue,” the Financial Times reports. Futures suggest the Nasdaq, Dow and S&P will all open in the red this afternoon, and major Asian indices are solidly in the red right now, from the Kospi and Hang Seng to Shanghai and the Nikkei. Look for a mixed open in Europe. The Wall Street Journal has more.

BTC has taken traders on a “wild ride” over the past 24 hours: The cryptocurrency rallied 33% yesterday afternoon after plummeting 31% earlier in the day, only to fall again this morning in an extension of the turbulence since China’s clampdown on crypto and Elon Musk’s tweet on BTC triggered a sell-off, Bloomberg reports. Although crypto is known for being volatile, it’s rare for this level of volatility to be seen “in a single session,” the business information service says. BTC was trading at just under USD 38k at dispatch time, and CNBC has a look at what’s fuelling the rollercoaster — and what could be next.

It’s the final day of Renaissance Capital’s annual MENA Investor Conference and HC Securities’ virtual event on Egyptian equities (pdf).

HAPPENING TODAY-

Greek Foreign Minister Nikos Dendias is in Cairo today for talks with FM Sameh Shoukry. This is the last step of a regional tour that has seen Dendias visit Israel, Palestine and Jordan in the past two days. The talks come as Egypt continues to lead an international effort to broker a ceasefire between Hamas and Israel.

Second Egypt-France-Jordan meeting on Gaza coming up: President Abdel Fattah El Sisi, French President Emmanuel Macron and Jordan’s King Abdullah will hold a second meeting “in the coming days” to discuss events in Gaza, according to a joint statement. The three leaders met yesterday to focus on bringing Israel and Hamas to the negotiating table and end the current conflict, the statement said. El Sisi pledged on Tuesday USD 500 mn in reconstruction aid to the residents of Gaza during his visit to Paris.

CIRCLE YOUR CALENDAR-

An updated version of the government’s Egypt sustainable development strategy, Egypt Vision 2030, will be published next month, Planning Minister Hala El Said said. The strategy will be updated to account for the effects of covid-19, the minister said, without providing further details.

The IMF will complete by the end of June a second review of targets set under Egypt’s USD 5.2 bn standby facility. The facility was approved in June 2020.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.


** CATCH UP QUICK with the top stories from yesterday’s edition of EnterprisePM:

  • Push for Gaza ceasefire: Egypt’s efforts to bring about a ceasefire in Gaza have received support from the US and EU, sources told Al Arabiya.
  • Raya looks to the Gulf: Raya Contact Center is on course to acquire 100% of an unnamed call center company based in the Gulf after its USD 14.2 mn offer was accepted by the firm.
  • More help for the tourism industry: Subsidized loans designed to help tourism companies fund capex can now cover up to 90% of a project’s renovation costs, up from 75% under the ongoing EGP 50 bn tourism support program.

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