THIS MORNING: The FinMin took its debut sukuk issuance to market yesterday
Good morning, everyone, and welcome to a fairly brisk news morning.
THE BIG STORY here at home: The Finance Ministry’s USD 1.5 bn sukuk went to market yesterday — and met heavy investor appetite, with the offering reportedly coming in c. 3.5x oversubscribed. We have chapter and verse in this morning’s news well, below. Our friends at HSBC are lead managers and bookrunners on the transaction.
Why this matters: Beyond it representing a fresh inflow of FX, this is the first tangible (and sizeable) sign of international investor confidence in Egypt since the move to a “durably flexible” exchange rate regime and Central Bank of Egypt Governor Hassan Abdalla’s decision to allow the currency to slide. We’re hoping the next big signal to the community (domestic business leaders and foreign investors alike) involves equity, not debt — likely the sale of the state’s 20% stake in Alexbank to Italy’s Intesa Sanpaolo.
ALSO: EFG Hermes’ Vortex invests in UK EV charging firm: Vortex Energy — the clean energy investment platform from our friends at EFG Hermes Holding — and London-based private equity and infrastructure fund manager Zouk Capital are making an USD 80 mn equity investment in British EV charging outfit EO Charging. Read the full story in this morning’s edition of Enterprise Climate.
SOUND SMART- Enterprise Climate has been banging the drum about growing appetite in the GCC for renewable energy investments in developed markets. That trend started with EFG Hermes and Vortex, which launched in 2014 to go after renewable energy (and, more recently, clean energy technologies) in Europe and the United Kingdom.
SPEAKING OF HSBC: The bank is marking its 40th anniversary in Egypt by announcing a new program to help women entrepreneurs start their own businesses. The program is launching in partnership with the Global Fund for Widows, which has worked in Egypt since 2012.
The program will help some 1k women widows start businesses in the next two years, targeting people in Alexandria, Minya and Luxor through the launch of what HSBC is calling “Widows Savings and Loans Associations,” or WISALA for short. The bank unveiled the initiative at a reception for clients, investors, and other stakeholders at the Grand Egyptian Museum.
What they said: “It is fitting that our 40th anniversary of doing business here provides an opportunity to launch a programme that brings innovative community banking solutions to a segment of society that really needs additional support and, by providing it, helps Egyptian widows take their first steps to becoming entrepreneurs,” said HSBC Egypt CEO Todd Wilcox.
HSBC by the numbers: From one branch at launch, HSBC now employs more than 3k people, has a nationwide footprint, and supports the bank’s global operations from its fast-growing global service center in the Greater Cairo Area. You can read more about the program and the bank’s anniversary here (pdf).
EGP WATCH- The EGP slipped 2 piasters against the greenback yesterday, with the USD changing hands at 30.65 from 30.63 on Monday, according to data by the central bank. The currency hit the 30 mark at the end of January following a sharper devaluation that has begun to bring FX back to the country, alleviating a severe currency shortage. The currency has lost nearly half its value against the greenback over the past year due to headwinds caused by the war in Ukraine and rising interest rates.
SMART POLICY- USAID-backed reproductive awareness program launches: US NGO Pathfinder International launched yesterday a USD 39 mn health program funded by our friends at USAID to improve access to information about family planning and reproductive health, according to a press release (pdf). The five-year initiative will target 10.6 mn people in 10 governorates, and will be run in partnership with the Health Ministry. Our large population is a double-edged sword, folks — a little slowdown in population growth would be a very good thing.
PSA- Long commutes on the metro could get more expensive from October: The government will raise metro fares on tickets for more than 25 stops to EGP 12 from EGP 10, Transport Minister Kamel El Wazir said in a press conference yesterday (watch, runtime: 40:48). The hike will likely come into effect in October when more stations on Line 3 are opened, he said in a televised interview (watch, runtime: 4:59). There are no plans to raise the prices of other fares, he said. The government hinted last summer at the possibility of hiking metro fares but the plan never materialized despite rising expenses to keep the underground system running.
CORRECTION- A four-hour working week? We wish. Some companies in the UK are currently trialing a four-day workweek, not a four-hour week as we incorrectly said yesterday. The story has been updated on our website.
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WATCH THIS SPACE- Israel’s NewMed is spending USD 100 mn to up production from Leviathan by 75%: Israel’s NewMed Energy has earmarked nearly USD 100 mn to ramp up production at the country’s Leviathan gas field, the company said in a statement (pdf). The investments are set to up total production from Leviathan to 21 bcm annually, up from 12 bcm.
That means more gas for us down the line: It will take roughly three years from a final investment decision for the increased flows to hit our LNG terminals, an industry source told Reuters. Gas from Leviathan flows to the domestic Israel market and to neighbors Egypt and Jordan.
Though not as much more as we had hoped: Over half of the money will go towards plans to build a floating LNG terminal to process gas from Leviathan for export to Europe. NewMed had been deliberating between the floating terminal and a pipeline linking Israeli fields to our LNG terminals.
REMEMBER- Egypt and Israel signed an MoU in June to ramp up gas exports to the EU, under which Israel is set to send more gas to Egypt’s LNG facilities before exporting it to Europe.
ALSO- NewMed-Capricorn merger officially dead: NewMed’s big plans come nearly a week after a planned tie-up between NewMed and British firm Capricorn Energy was terminated on the back of shareholder opposition, they announced in separate statements. The termination comes less than a month after five of Capricorn’s board members resigned under pressure from activist investors led by Palliser Capital, who were vigorously opposed to the merger.
THE BIG STORY ABROAD-
US-Russia saber-rattling is dominating the global front pages this morning, following Vladimir Putin’s decision yesterday to suspend Russia’s nuclear pact with the US, and Joe Biden’s framing of the war in Ukraine as a global fight for democracy. In a speech in Warsaw, the US president accused Putin of committing crimes against humanity and cast the invasion as an attack on freedoms across the world. A few hours earlier, Putin accused Washington of provoking the conflict and announced that Russia would withdraw from the START treaty — a landmark post-Cold War agreement between the two powers designed to limit the proliferation of nuclear weapons.
The dueling speeches are all over front pages in the international press: AP | Reuters | WSJ | Washington Post | NYT | Bloomberg | CNN.
A Chinese peace play? The Wall Street Journal is reporting this morning that Xi Jinping could visit Russia in the coming months, citing people familiar with the matter who say that the Chinese president could push for a resumption of formal peace talks.
COME TO OUR NEXT ENTERPRISE FORUM-
We’re excited to unveil our next C-level event: The Enterprise Exports & FDI Forum, where we will take a deep dive into two of the most critical topics affecting our community.
Exports and foreign direct investment (FDI) have never been more important to our economy — or our businesses — than in the wake of the float of the EGP. We think we have a once-in-a-lifetime chance to build an export-led economy that makes us a magnet for FDI and all the benefits that will come with it for our nation.
CIRCLE YOUR CALENDAR-
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.
In today’s issue: We break down the government’s vision for the Universal Healthcare Ins. scheme and how the project will pan out — including how individuals will navigate the system and how private ins. companies will be looped in.