TONIGHT: Aldar and ADQ submit MTO for 90% of SODIC + Will Biden withhold some of our military aid?
Good afternoon, everyone, and welcome to the tail end of hump day. Another really busy news day has kept us occupied rather than gazing longingly at the clock as we count down the hours to Apple’s launch tonight of its new crop of iPhones.
THE BIG STORIES TODAY so far-
#1- A consortium of UAE’s Aldar Ventures and sovereign wealth fund ADQ has submitted a mandatory tender offer for 90% of upmarket real estate developer SODIC, according to an ADX disclosure (pdf). The all-cash offer saw the consortium — which is 70% owned by Al Dar and 30% owned by ADQ — up its offer to EGP 20 per share from a previous range of EGP 18-19, and values SODIC at EGP 7.1 bn. The MTO is awaiting approval by the Financial Regulatory Authority, after which company shareholders will have 10-30 working days to respond.
The transaction would be great news for Egypt and the industry if it goes through, marking as it does the entry of a respected foreign strategic investor with a high competitive metabolism and proven systems.
#2- Is the Biden administration about to withhold a portion of its military aid to Egypt? That’s the contention in a Politico story out this morning that quotes an unnamed US official as saying Secretary of State Anthony Blinken plans to take the “unprecedented step” of not signing a waiver that would have allowed some USD 300 mn in military assistance to be released despite “human rights concerns,” the political news outlet noted. The story claims “some — but not most” of the funding will be withheld and that “the money that is being sent will also have restrictions on its use,” positioning the move as a “compromise” that may still “disappoint some lawmakers and activists worried” about human rights here.
#3- The Suez Canal Bank and AAIB are looking to snap up almost 90% of an EGP 323 mn maiden securitized bond issuance by EFG Hermes buy-now-pay-later platform Valu, Suez Canal Bank Chairman Hussein Rifai tells us this afternoon. The two banks submitted offers worth EGP 145 mn each. ValU, EFG Hermes’ consumer finance subsidiary, kicked off its EGP 2 bn securitization program with an EGP 323 mn bond issuance, as we noted this morning.
#4- It’s the final afternoon for EK Holding shareholders to convert the trading currency of their shares to EGP from USD — while still being allowed to collect their dividends in USD. Word in the market is that the offering has been well-received.
^^ We’ll have more on all of these stories in tomorrow’s edition of Enterprise AM
HAPPENING NOW- The newly renovated tomb of King Djoser in Saqqara is open to the public as of today. After undergoing renovation and restoration work since 2006, the tourist site was inaugurated yesterday and opened its doors to visitors today.
SMART POLICY #1- We’re officially getting a private sector minimum wage next year, with the official gazette (pdf) earlier this week publishing a decision by planning minister Hala El Said mandating a 2.4k minimum monthly wage for private sector employees as of January 2022. This is in line with public sector wage hikes: The minimum wage for public sector employees will rise to EGP 2.4k from EGP 2k from the beginning of FY2021-2022.
The Caveat: Companies who claim they can’t afford to pay the minimum wage can apply for an exception. They’ll have until October to submit a request — we hope very, very few of them are granted.
SMART POLICY #2- The government plans to use AI to manage customs and tax procedures by the start of next year, the Finance Ministry said in a statement, in a bid to improve operational efficiency and crack down on tax evasion. The Oil Ministry has also said it is looking to digitize its petrol transport process, and has already begun implementing the SCADA system to oversee transport and distribution, it said in a statement.
THE BIG STORY ABROAD- No single story has captured the imagination of the global business press. The Financial Times is looking at Amazon’s push into the healthcare industry, while CNBC is leading with Boris Johnson’s “pandemic plan for fall and winter,” which will include booster shots for folks over the age of 50. Business Insider, meanwhile, notes that Apple wants you to “update your iPhone, Mac, and Apple Watch after it fixed a software flaw that let hackers spy without anyone clicking a link.”
WAIT, WHAT? SPYWARE? Yup. Apple has pushed out an emergency software update for iPhones after they uncovered a “zero-click” ransomware attack that runs through iMessage, according to a report by University of Toronto’s Citizen Lab seen by the FT. Pegasus, a spyware tool from Israel’s NSO Group, allegedly allows hackers to access iPhones remotely without the user clicking on a malicious link, with the infections taking place “since at least February 2021.” NSO sells its exploits to governments worldwide and was the topic of controversy after Pegasus helped authorities hack the mobile phones of heads of state, diplomats and military chiefs worldwide including in Egypt. The story is everywhere from Sky New to the New York Times and TechCrunch.
How do I update my iPhone? Update iOS 14.8 can be downloaded as normal from Settings > General > Software Update and it took us around 15 minutes to install.
AFTERNOON MUST-READ: Facebook knows Instagram is toxic for teen girls, company documents show, the latest in the Wall Street Journal’s deep dive into stuff El Face would rather you didn’t know.
** CATCH UP QUICK on the top stories from today’s EnterpriseAM:
- EGX could open the door for SPACs: Amendments to listing rules that would allow Egyptian companies to go to market by being acquired by or merging with another company are now with to the Financial Regulatory Authority (FRA) for consideration.
- Capiter raises big series A round: Cairo-based B2B e-commerce startup Capiter has raised USD 33 mn in a series A funding round co-led by Quona Capital and MSA Capital.
- Siemens could sign contracts for second, third high-speed rail lines within 2 months: The transport ministry has reportedly reached a preliminary agreement with the German conglomerate on the implementation of the second and third phases of the USD 26 bn megaproject, with Siemens expected to soon sign up to USD 6 bn in contracts.
HAPPENING TOMORROW- It’s the deadline for large taxpayers to sign up to the e-invoicing system, after which they could face punitive measures, Head of the Tax Authority Reda Abdel Kader told Al Borsa. Large taxpayers (which number at around 2.8k companies) who don’t join the system could face penalties that include inclusion in the Tax Authority’s black list and being denied basic government services.
🗓 CIRCLE YOUR CALENDAR-
The UN General Assembly starts today in New York and runs through to 30 September. The general debate will take place from 20-28 September. Leaders from at least 83 countries are expected to attend in person — in contrast to last year, when the meeting was almost 100% virtual. There’s no word yet on whether President Abdel Fattah El Sisi will attend in person or virtually.
ALSO- EFG Hermes’ fourth Virtual Investor Conference continues today, running through to 21 September with the theme of “After Reflation — FEMs in 2022.”
Sahara Expo: The five-day agricultural conference continues at the Egypt International Exhibition Center through Wednesday.
LATER THIS WEEK- It’s interest rate week and all 10 analysts we polled expect the central bank to leave rates on hold for a seventh consecutive meeting when the Monetary Policy Committee meets on Thursday. Analysts pointed to the uptick in inflation and the pressure to maintain foreign inflows into Egyptian debt. Participants in a Reuters poll also expect the MPC to leave rates unchanged.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
☀️ TOMORROW’S WEATHER- Temperatures will be dropping three more degrees, with a daytime high of 33°C and an overnight low of 22°C.