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Monday, 27 September 2021

TONIGHT: Sisi inaugurates world’s largest wastewater plant + Flat6labs raises USD 7 mn in second close of Anava

The EGX30 is down 1.4% today as global energy shortages and supply chain disruption dominate the conversation in the local business press and market watchers sound the alarm. Foreigners were naturally net sellers, while regional investors were net buyers.

We can only be thankful for other local headlines that were a ray of sunshine compared to what’s happening abroad.

THE BIG STORIES TODAY-

#1- President Abdel Fattah El Sisi inaugurated what Guinness World Records says is the world’s largest wastewater plant. Bahr El Baqar wastewater treatment plant, built by our friends at Orascom Construction and Arab Contractors, will treat around 5.6 mn cbm/d of water, which then will be used to irrigate agricultural land in Sinai. The plant will contribute to the reclamation of 400k acres as part of the national project to develop Sinai and to make the most use of the state’s water resources.

^^We’ll have more on the story in this week’s Hardhat Project Profile.

#2- Flat6Labs announced the second close of its Tunisia-based Anava Seed Fund, during which it raised USD 7 mn with VC Sawari Ventures participating, the company announced (pdf). The fund was launched in 2017 with the aim to invest in 75 Tunisian early-startups in a five-year period. Since its launch, the fund invested in over 50 startups in Tunisia operating in 22 sectors between fintech, education, delivery services and aeronautics, which have created over 500 jobs.

#3- The National Bank of Egypt, Banque Misr and Banque du Caire are launching a EGP 1 bn fund that will invest in fintech startups next month, according to a statement (pdf). The fund will target Egyptian and regional startups, with the statement implying investments in MENA and Africa. The three largest state-owned banks are calling for other banks to participate in the fund.

^^We’ll have more on those two stories in tomorrow’s EnterpriseAM.


THE BIG STORY ABROADThe UK is readying to deploy the army as people panic buy petrol causing up to 90% of stations to run out of fuel. Hundreds of soldiers will be deployed to drive oil tankers under a contingency plan called Operation Escalin, the Financial Times reports, citing government insiders. However, the military may not have the necessary skills to do the job, especially in processes such as unloading, Brian Madderson, chair of the Petrol Retailers Association said.

What’s happening? Beyond the energy crisis that has been plaguing Europe these past few weeks due to Russians turning the spigot, there appears to be a shortage of truck drivers post-Brexit, writes Reuters. The combination appears to be driving panic buying at the pump.

Europe’s energy crisis could expand to the rest of the world, warns Stephen Stapczynski for Bloomberg Businessweek. “In China, industrial users including makers of ceramics, glass, and cement may respond by raising prices; households in Brazil will face expensive power bills. Economies that can’t afford the fuel—such as Pakistan or Bangladesh—could simply grind to a halt,” he notes.

Electricity crisis in China excallates: As we noted yesterday, China itself may be running into an electricity crisis of its own as provinces have begun enforcing electricity cuts on industries. The shortages would force companies to raise prices of goods for Chinese consumers and quicken inflation, the People’s Daily, the official newspaper of the Chinese Communist Party, said in an editorial published on Sunday, according to Bloomberg. The crisis has now reportedly hit residences who are seeing power cuts with the northern provinces of Liaoning, Jilin and Heilongjiang having suffered blackouts over the weekend.

Expect the word ‘contagion’ to be thrown around more and more these days: This has raised fears over a global financial meltdown that could rival the one that came with the China Evergrande. The specter of a worsening global supply chain that is already reeling from the impact of covid is also weighing high on analysts.

Nymex natgas futures for October contracts jumped 4.82% today to USD 5.39 per MMBtu, as of dispatch. November Brent Crude contracts rose 1.69% to USD 79.4/bbl, while West Texas Intermediate topped USD 75 a barrel after a run of five weekly gains.

We should really be paying attention to this: Goldman Sachs raised its forecast for year-end Brent crude oil prices to USD 90 per barrel from USD 80 as the global fuel demand recovery surpasses expectations, according to Reuters, citing a note published yesterday. “While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected,” the note said.


** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

  • Ezdehar to reach first close on second fund by November: The private equity firm expects its Ezdehar Egypt Mid-Cap Fund II to reach first close with USD 100-120 mn in commitments from limited partners.
  • CBE to launch mobile contactless payment: Merchants will soon be able to accept contactless payments through their mobile devices as the Central Bank of Egypt will begin issuing licenses allowing mobile contactless payments.
  • Amanat is on the lookout for Egyptian education, healthcare firms: Dubai-listed firm Amanat could invest around AED 1 bn (EGP 4.3 bn) to acquire controlling shares in Egyptian, Saudi, and Emirati firms.

FOR TOMORROW- The deadline to register for the AUC Business School’s Private Equity Diploma.

🗓 CIRCLE YOUR CALENDAR-

Winter retail opening hours in effect this week: Shops and restaurants will have to close a little earlier from the end of this week when winter opening hours come into effect this coming Thursday. Shops and malls will close one hour earlier at 10pm (11pm on Thursdays, Fridays and national holidays) while cafes and restaurants will shutter at midnight rather than 1am. As during the summer, essential services such as grocery stories, supermarkets and pharmacies are exempt from the rules and can open and close their doors when they want.

White House National Security adviser Jake Sullivan will visit Cairo this week as part of a brief Middle East tour that will take him to Saudi Arabia and the UAE, sources with knowledge of the matter tell Axios.

Conference season continues this week:

  • ITIDA’s DevOpsDays Cairo 2021, will take place on Wednesday, 29 September.
  • The Cairo International Fair opens on Thursday, 30 September at the Cairo International Conference Center. It runs through 8 October.
  • The Egypt Projects 2021 construction expo also opens on Thursday at the Egypt International Exhibition Center and wraps on Saturday, 2 October.
  • Dubai’s Expo 2020 opens on Friday, 1 October. The event, which takes place somewhere on the planet once every five years, runs for six months and will be open seven days a week. You can learn more here.

YOUR FALL CALENDAR-

PSA #1- Next week is a short work week. You can expect to have a three-day weekend 7-9 October in observance of Armed Forces Day, which is on 6 October. Folks whose workdays are tied to banks and the market can expect confirmation from the Central Bank of Egypt and EGX early next week.

We’re inching closer to the end of 3Q2021 and the beginning of another month. Here are some of the key dates coming up in October:

  • MPs and senators are returning from recess to start the new legislative session: The House of Representatives will reconvene on Saturday, 2 October and the Senate will be back in session Tuesday, 5 October.
  • PMI: September’s purchasing managers’ indexes for Egypt, Saudi Arabia and the UAE will land on Tuesday, 5 October.
  • Foreign reserves: September’s foreign reserves figures will be out sometime during the first week of October.
  • Inflation: Inflation figures for September will be released on Sunday, 10 October.
  • IMF + World Bank meetings: The IMF and the World Bank will hold their annual meetings during the week beginning 11 October.
  • Interest rates: The Central Bank of Egypt will meet to review interest rates on Thursday, 28 October.

PSA #2- Your commute is going to get worse at the end of next week. Public schools are back in session for the fall term on Saturday, 9 October.

A little further out: The Middle East Angel Investment Network is hosting its Angel Oasis in El Gouna on 27-29 October, with separate pricing for in-person and virtual attendance.

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

☀️ TOMORROW’S WEATHER- The midweek will pretty much be the same as the rest of the week, with highs of 33°C and lows of 22°C.

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