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Thursday, 9 December 2021

State privatization program in full swing + Cairo hosts Lebanese, Israeli leaders + annual urban inflation falls to 5.6% in November

We close out a busy week, with a very busy Thursday that spells a boom for our capital markets, ladies and gentlemen, with Abu Qir Fertilizers completing its stake sale and CI Capital getting the nod for its acquisition bid on a quarter of Cleopatra Hospitals Group. We also have good news on the inflation front as well.

But before we dive into it, it’s the 200th issue of EnterprisePM. And while not many of you readers may be counting, it means a lot to us that you’ve kept reading us these ten months. We hope to keep you guys updated and entertained in the afternoon for many more to come.


Abu Qir Fertilizers completed the sale of 10% of its shares for EGP 2.25 bn to regional, international, and local institutional investors, according to a statement on the bourse today. The company’s second offering on the EGX was priced at EGP 17.8 per share. Abu Qir’s shares surged 20% on the news today, closing at EGP 22.11 and giving it a market cap of EGP 27.9 bn.

State privatization program revived: The sale, which follows the IPO of state e-payments giant e-finance, indicates that the long-dormant state privatization program is in full swing. Abu Qir had pushed back the secondary stake sale several times since first announcing it in 2018.

Next up is football club Ghazl El Mahalla is also set to make its debut on the EGX in a “micro-IPO” in two weeks.

Advisors: EFG Hermes acted as joint global coordinator and bookrunner on behalf of the selling shareholders: the National Investment Bank, Industrial Development Authority, Al Ahly Capital Holding, and Chemical Industries Holding Company. Renaissance Capital was joint financial advisor and bookrunner. CI Capital and Al Ahly Pharos were also tapped as underwriters on the transaction.

Also making a splash in capital markets is the Financial Regulatory Authority greenlighting CI Capital’s bid to acquire 26.21% of Cleopatra Hospitals Group, according to an FRA statement (pdf) to the bourse this morning. MCI Capital, the CI Capital subsidiary that’s executing the acquisition, has offered to purchase the shares at EGP 5 apiece. Cleopatra’s shares fell 1.1% to EGP 4.65 at closing time today.

Who’s selling: Creed Healthcare, which owns 37.9% of CHG through its subsidiary Care Healthcare, has agreed to sell an 8-12% stake in the company from its holdings (126 mn-192 mn shares) to MCI, CHG’s corporate strategy and IR director Hassan Fikry told us yesterday. Some 62% of the company’s shares are held by “others,” according to the company’s investor deck, which notes that key freefloat shareholders include Franklin Templeton Investments, VanEck, Norges Bank, Wasatch Funds, and Consilium Investment Management.MCI will likely acquire the rest of the shares through the EGX.

Annual urban inflation continued to decline in November, dipping to 5.6% from 6.3% in October, as prices of fruits, vegetables, meat and poultry dipped from the month prior, according to data released by Capmas today. On a monthly basis, headline inflation rose ever-so-slightly by 0.1%, following October’s 1.1% rise. The drop was expected, with analysts, including Al Ahly Pharos’ Radwa El Swaify telling us the drop was expected due to the base effect following months of rising prices. .

Interest rates under review next week: The Central Bank of Egypt’s Monetary Policy Committee will hold its final meeting for the year to review interest rates on Thursday, 16 December. Look to our poll of analysts and economists on Sunday’s EnterpriseAM.

^^We’ll have more details on these stories and others in Sunday’s EnterpriseAM.

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

  • Sumed’s oil shipments at their highest in November since May 2020: Oil shipments through Egypt’s Sumed pipeline hit an 18-month high in November, with north of 700k bbl/d of crude flowing out of the pipeline last month.
  • Minly acquires Emirati competitor Oulo: The Egypt-based customized celeb video platform acquired Oulo for an undisclosed amount. This comes six months after Minly closed a USD 3.6 mn seed round co-led by 4DX Ventures, B&Y Venture Partners, and Global Ventures.
  • Government takes steps to stop robot takeover: Egypt wants to upskill the labor market to stop robots stealing our jobs or in other words,tackle the issue of jobs at risk due to automation.

HAPPENING NOW- Egypt’s diplomacy is in full swing as Israeli Alternate Prime Minister Yair Lapid met with President Abdel Fattah El-Sisi in Cairo today, according to an Ittihadiya statement. The pair discussed updates on Egypt’s efforts to rebuild and help with the reconstruction of the Gaza strip. Not noted in the statement are reports in the Israeli press that the Israeli FM will return 100 stolen Egyptian antiquities that were confiscated in an attempt to smuggle them into Israel during the visit. Lapid also met with Foreign Minister Sameh Shoukry.

Lebanon’s Prime Minister Najib Mikati also landed in Cairo today for a one-day visit: El Sisi and Prime Minister Mostafa Madbouly also met with Lebanon’s Prime Minister, alongside Foreign Minister Sameh to discuss bilateral cooperation, regional issues, and Lebanon’s current political scene, according to an Ittihadiya statement. The visiting PM also met with the Secretary-General of the Arab League Ahmed Abu El Gheit at the Cairo headquarters, according to a Lebanese cabinet statement.

She’ll be coming round Hermoz when she comes: The Ever Given is fully loaded and making its way back to the Suez Canal next week, less than nine months after getting unlodged from the passageway, reports Bloomberg. The 400-meter-long container carrier reportedly agreed to pay the Suez Canal Authority (SCA) USD 540 mn in compensation for its six-day blockage of the vital trade artery in March of this year.

THE BIG STORIES ABROAD- China is once again front and center of global headlines for all the wrong reasons.

First up, Fitch has finally declared Evergrande to be in “restricted default”, lowering its rating from ‘C’ to ‘RD’ after the property developer failed to meet bond payment deadlines earlier this week, according to a Fitch Ratings statement. This is the first official recognition of a default by Evergrande, the world's most indebted real estate company. Following claims from the company that it could fail to meet its obligations, Fitch expects that Evergrande bondholders can likely expect to recover no more than 10% of their claims, if anything, in the case of default, the statement added.

Meanwhile, the possibility of Evergrande’s default could give way to other defaults from Chinese firms — which Fitch also downgraded — such as real estate developer Hengda and Evergrande subsidiary Tianji. Nikkei Asia has the story.

Then there’s the Winter Olympics, as China cracks the whip on the US, UK, Australia, and Canada over boycotting the games due to be held in Beijing. Beijing threatened boycotting countries, saying they would “pay the price for their mistaken acts” of political manipulation, according to Reuters. Foreign Ministry Spokesman Wang Wenbin also said that China had no plans to invite officials from Britain and Canada to the Games anyway and there was no fear that the countries’ absence could have a domino effect for other nations to opt out.


The Cairo Woodshow kicks off today at the Cairo International Convention Center

It’s the second day of the Global Forum for Higher Education and Scientific Research which runs through to tomorrow at the St. Regis Al Masa Convention Center.

The new round of Silicon Waha’s Startup Factory will kick off tomorrow at the Assiut Technology Zone. The program will offer marketing tips and tricks for startup founders, who can apply here.

Young professionals have until next Sunday to apply to the McKinsey Forward program which focuses on leadership, business, and the transition to digital, McKinsey announced in a press release (pdf). The six-month program aims to teach participants how their business can combat challenges and use them to their advantage, integrate tech, and be adaptable and resilient during times of change. Forward will be available without charge to those eligible to apply, and one of the requirements is having less than five years of work experience. You can apply via this link before the deadline.


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- Yesterday’s sandstorm has given way to warmer weather: The weekend will see daytime highs of 24°C on Friday and Saturday while the mercury will fall to 12°C at night, our favorite weather app tells us.

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