Tuesday, 7 December 2021

THIS EVENING: Aldar / ADQ acquire 86% of SODIC; Green stimulus package coming March 2022; UAE employees get 4.5-day work week.

Good afternoon, ladies and gents: We have a brisk news flow to bring you today following the closure of Aldar / ADQ’s mandatory tender offer to acquire SODIC, and more signals that the green economy is going to be occupying a larger place in Egyptian policymaking in 2022 ahead of the COP27 climate summit in November.

THE BIG STORIES TODAY-

Aldar / ADQ’s SODIC takeover is definitely going through: The Aldar-ADQ consortium bidding to acquire SODIC has obtained 85.5% of the company’s shares at the end of the mandatory tender offer, which closed at the end of today’s trading session, Enterprise has learned.

FinMin prepares green stimulus package: The Finance Ministry is working on a package of measures to stimulate the green economy, Vice Minister of Finance Ahmed Kouchouk told a conference today. A program of targeted financial incentives to encourage economic activity that reduces carbon emissions will be announced ahead of budget season in March, he said.

SFE jumping on the green bond bandwagon? We also have news that the Sovereign Fund of Egypt may turn to the debt markets next year and issue green bonds. This comes from fund CEO Ayman Soliman who told the conference that the fund is considering selling the climate-linked securities in collaboration with “partners.”

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

Egypt’s foreign currency reserves inched up slightly in November, reaching USD 40.909 bn from USD 40.849 bn in October, according to official figures released today. Reserves have been on the rise since June 2020, getting closer to their pre-covid peak of USD 45.5 bn in February 2020 after dropping almost USD 10 bn on the impact of the pandemic.

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

  • SODIC is getting Emirati owners: SODIC shareholders have so far agreed to sell shares equivalent to a 77.26% stake (275.2 mn shares) in the company to a consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ in a mandatory tender offer.
  • US consortium gets EGP 3.5 bn Mogamma revamp contract: A US-UAE consortium signed yesterday a EGP 3.5 bn (c.USD 200 mn) contract to redevelop Tahrir Square’s Mogamma yesterday with the Sovereign Fund of Egypt.
  • The tobacco tender is back on: The Industrial Development Authority (IDA) has relaunched a tender for a license to manufacture cigarettes, potentially ending the historical monopoly by state-owned Eastern Company.

THE BIG STORY ABROAD-

Fancy a Monday-midday Friday workweek? Head to the UAE, where workers will enjoy a 4.5-day work week starting January 2022. All government workers will shift from a Friday-Saturday to a Saturday-Sunday weekend, with the last day of the work week ending at 12pm to allow employees to attend Friday prayers. The move comes to align the country’s financial sector with global markets and boost work-life balance among employees, according to the state-owned Emirates News Agency.

We’d love to see this spread: There have been plenty of calls lately for a shortened work week, with research showing that it could increase employees’ happiness, reduce stress and result in fewer sick days off. And while a number of companies have taken up the shorter work week, the UAE is the first government to implement the decision. Here’s to hoping it kickstarts a global trend in the process. (Bloomberg | Reuters | CNBC | The Guardian | AP)

OMICRON WATCH- The new variant may spread fast, but it doesn’t seem to hit as hard: Data coming out of hospitals at the center of South Africa’s latest covid outbreak suggests that while Omicron may be more transmissible than earlier covid variants, it has also resulted in milder cases. Just 2% of covid patients in hospitals in the country’s Gauteng province are on ventilators, compared with 11% during the Delta wave, offering hope to medics and scientists over the severity of the new variant, the Financial Times reports.

And GSK says Omicron is not, in fact, an untreatable super-mutant: Initial research suggests GlaxoSmithKline’s covid-19 antibody treatment is effective against the spike mutations in the Omicron variant, the drugmaker said in a statement today.

The markets are starting to think that perhaps it’s not doomsday after all: MSCI’s broadest Asia Pacific index was on track for its biggest jump in two months as Asian stocks staged a recovery today, after the index fell to its lowest level in a year on Monday, according to Reuters. The Europe-wide Stoxx 600 bounced back to gain 1.8%, largely on the back of a boost for tech stocks, signaling a correction after last week’s Omicron-induced panic selloff. The UK FTSE 100 gained 1.1%.

An extra USD 188 bn for China’s economy didn’t hurt: The rise in Chinese and Hong Kong markets (and Europe-listed mining stocks) was partly down to a second round of easing measures from China’s central bank, which will see USD 188 bn in long-term liquidity released into the economy. The move is meant to shore up China’s recovery amid a recent slowdown in manufacturing, Evergrande-related property-sector wobbles, and covid outbreaks, Reuters reports.

Speaking of which, Evergrande apparently failed to meet another payment deadline: The Chinese real estate giant sailed on by the expiration date of a 30-day grace period on a USD 82.5 mn repayment deadline yesterday, Reuters reports citing informed sources. At the risk of sounding like a broken record, failure to pay could trigger cross-default for the troubled property giant, putting the company at risk of becoming China’s biggest defaulter. The group had warned over the weekend that it couldn’t be certain it would meet its financial obligations.

CLARIFICATION- In our coverage of the Mogamma development agreement this morning we noted that Alliance Law Firm advised on the transaction. It has since come to our attention that Adsero – Ragy Soliman & Partners provided counsel to the Sovereign Fund of Egypt and Alliance advised to the consortium of US investors. Colliers International conducted the market study to help advise the decision.

🗓 CIRCLE YOUR CALENDAR-

The two-day North Africa Trade Finance Summit kicked off today, bringing together business leaders, people from the financial industry, logistics experts and policymakers to discuss trade finance.

Global Forum for Higher Education and Scientific Research runs tomorrow through to Friday at the St. Regis Al Masa Convention Center.

The Cairo Woodshow kicks off on Thursday at the Cairo International Convention Center

Booster shot registration: The Health Ministry will begin allowing senior citizens with chronic medical conditions, as well as all medical staff, to register for a booster covid-19 vaccine as of next Sunday, 12 December.

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

🌧 TOMORROW’S WEATHER- Tomorrow promises the coldest day of winter so far, with the mercury falling below the 20°C mark for the first time during the day to 19°C, while nighttime lows are at 11°C, our favorite weather app tells us. Meanwhile, we could have a rainy week ahead of us, with nearly every day boasting a chance of rain.

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