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Thursday, 15 July 2021

THIS MORNING: EGX election results announced; Powell settles fears on inflation, stimulus.

Good morning, ladies and gentlemen — and that’s a wrap on EnterpriseAM until we return from the Eid break, when we’ll be back in your inboxes on Sunday, 25 July. Stay tuned this afternoon for the final EnterprisePM issue before the holiday.

We have two big M&A stories for you this morning: Abu Dhabi sovereign fund ADQ’s mandatory tender offer for Amoun Pharma saw it snag a 99% stake in the Bausch Health subsidiary during the subscription period, which wrapped up yesterday. And in a major piece of startup news, Egyptian events management company Eventtus has been snapped up by Cali-based Bevy. We have more on both these stories in the news well, below.

EGX election results announced: The EGX has announced the results of yesterday’s election, which was held to decide who will sit on its board of directors for the 2021-2025 term, Youm7 reports. Twelve candidates were competing for five seats on the board, three of whom will represent brokerages and asset managers, one will represent companies listed on the main exchange, and one for Nilex-listed firms. The victors are as follows:

  • 3Way Finance Chair Rania Yacoub (LinkedIn) and Prime Securities Brokerage Managing Director Shawkat El Maraghy (LinkedIn) will represent brokerage companies after receiving 145 votes and 133 votes respectively;
  • Azimut Egypt Asset Management Managing Director Ahmed Abou El Saad (LinkedIn) won 169 votes and will represent asset managers;
  • Odin Investments CEO Hashem El Sayed (bio) ran unopposed and will represent EGX-listed companies;
  • Integrated Engineering Group Managing Director Dalia Al Sawah (bio) will represent Nilex-listed companies.

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

  • Nine Egyptian companies to manage and operate national rail system: Private-sector players will manage all of the country’s under-construction “modern means of transportation,” under a cooperation protocol signed with the National Railways Authority.
  • Cabinet approves EV tariffs: Proposed energy tariffs for EV charging stations won the cabinet’s signoff yesterday, covering both the cost of electricity sold to charging stations as well as charging costs to end users.
  • Miami based Aleph Holding acquires 86% of Connect Ads: The latter company is a subsidiary of tech investor A15, which divested its controlling 86% stake in a cash and share swap agreement of an undisclosed value.

MARKET WATCH- Powell stays dovish as inflation rises: Federal Reserve Chair Jay Powell yesterday downplayed the likelihood that the central bank could tighten monetary policy earlier than expected in response to rising inflation, and reiterated his belief that price growth will soon temper as the post-pandemic global economy normalizes. Data this week showed that US inflation surpassed all forecasts in June to accelerate at its fastest pace since 2008, increasing concerns that prices will rise still further in the months ahead and calling into question the Fed’s “transitory” hypothesis.

A policy change is “a ways off”: Speaking during a congressional hearing, Powell said that the Fed won’t taper its bond-buying programme or raise interest rates until it sees “substantial further progress” in the US inflation and employment targets, which he said remains “a ways off.” US interest rates are currently at near-zero and the Fed is buying bonds worth USD 120 bn each month to support the economy (and asset prices) through the pandemic — a huge stimulus program some worry is causing the economy to overheat.

A slight change of script on inflation: Powell said that he expects inflation to “remain elevated in coming months before moderating.” Earlier this year Fed officials were briefing that heightened inflation could last for a few months.

The markets seem satisfied that the dove isn’t about to turn hawk: US stocks made slight gains and bond yields fell during trading yesterday as investor concerns about how the Fed might react to rising inflation eased. The 10-year yields fell back below 1.4% while tech companies led the benchmark S&P 500 index higher, in a reversal from Tuesday that saw both stocks and bonds suffer losses in reaction to the Juen inflation data.

The story dominated front pages in the global press: Reuters | The Wall Street Journal | Bloomberg | CNBC | FT.


Expect a decision on fuel prices in the coming days: The government’s fuel pricing committee has been in talks since the beginning of the month over whether to raise, cut or leave on hold fuel prices during 3Q2021. We were expecting to hear something yesterday but a government official had suggested that a decision could instead be made later in the month.

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

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