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Monday, 12 Oct 2020

Beltone SME will launch 1 BN EGP investment fund by the end of 2021


Insights MENA

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Economic Outlook

Economic Outlook

  • Annual core inflation increased to 3% in September compared to 0.8% in August, while monthly core inflation increased to 0.1% compared to -2.3% the previous month, according to the Central Bank of Egypt (CBE). Core inflation strips out volatile items such as food and fuel.
  • Egypt Foreign reserves increased to 43 BN USD in September compared to 38.37 BN USD in August for the fourth consecutive month, according to the Central Bank of Egypt (CBE). The CBE has been consistently adding to its FX stockpile in the past four months, adding almost 2.5 BN USD after reserves dipped by 10 BN USD during the height of the coronavirus-driven market panic earlier this year.
  • In Egypt, the government’s fuel pricing committee decided to leave fuel prices unchanged for the remainder of 2020. The decision, made at the committee’s final quarterly meeting of the year, leaves 95-octane at 50 EGP per liter, 92-octane at 7.50 EGP, and 80-octane at 6.25 EGP.
  • Ratings agency S&P has affirmed Saudi Arabia sovereign ratings at A-/A-2 with a stable outlook, as it expects the kingdom to begin to bounce back from the slump caused by the coronavirus pandemic and low oil prices in 2021.
  • Dubai tenants are flocking into the real estate market and buying homes to take advantage of low interest rates and competitive prices. In a survey conducted by Colliers in Q2-2020, 82% of real estate professionals agreed that mortgage purchases in the emirate are increasing. Most of the buyers (91%) are first-time homeowners or end users, while only 9% are investors.
  • The value of foreign workers' remittances from UAE decreased by 3% to 38.2 BN AED (10.4 BN USD) in Q2-2020, compared to 42.6 BN AED (11.59 BN USD) in Q2-2019, according to the Central Bank of the UAE (CBUAE).
  • The international credit rating agency, Standard & Poor’s (S&P), reported that the rating risks related to the Kuwaiti economy is that Kuwait is completely dependent on oil revenue which is 90% of its exports. S&P’s expected the recovery of the Kuwaiti economy to gather momentum from 2022, in addition to real GDP growth on average to reach 7% during 2022 and 2023.
  • The IMF and World Bank’s (virtual) annual meetings kick off later today and run until Sunday 18 October. The meetings headlined “supporting a resilient recovery,” will also focus on human capital, digital development, and poverty.
  • The European Investment Bank (EIB) is planning to commit 10 MM USD in equity to Egypt- and Jordan-focused Badia Impact Fund II. The venture capital fund, which has 50 MM USD target size, will invest in “tech-oriented growth-stage” companies and SMEs across the EIB’s “Southern Neighborhood,” which includes Israel, Lebanon, Morocco, Palestine, and Tunisia.
Political Events

Political Events

  • Egyptian and Spanish naval forces on Saturday carried out transit maritime training in the Mediterranean Sea, as part of the Egyptian army’s plan to strengthen military cooperation and share expertise with friendly countries. The training covered the implementation of numerous activities, including sailing formations and air defense exercise, demonstrating the ability to efficiently take positions in the sea.
  • Egypt is set to host a new round of negotiations between members of Libya’s House of Representatives and Constitutional Authority for three days, under the auspices of the United Nations. The meetings will discuss the constitutional path following the success of the second round of Libyan dialogue, held in the Moroccan resort town of Bouznika.
Stock Market

Stock Market

  • The Egyptian Company for Construction Development (Lift Slab Misr) announced the appointment of Grant Thornton Financial Consulting to conduct a Fair Value (FV) study of the company’s shares. The FV assessment is needed by the Financial Regulatory Authority (FRA) as the company is looking to acquire 255% of El-Wafaa for Tourism Investment Co, and in exchange, Al Forsan Real Estate Development & Investments will be allowed to subscribe to the capital increase of Lift Slab Misr.
  • The value of shares owned by foreign investors on the Saudi Stock Exchange (Tadawul) reached 12 BN SAR (53.34 BN USD) over the week ended on 8 October 2020, up by 3.64 BN SAR (970.32 MM USD) weekly. The ownership represented 2.18% of issued shares and 12.56% of free shares, official data from Tadawul showed.

Note: All values are calculated by last Thursday.

Companies Transactions

Companies Transactions

  • El Saidy Tobacco has acquired Americana Egypt subsidiary International Tobacco, noting that Prime Holding is the one who managed the transaction and acted as Americana’s financial advisor. The value of the transaction was not disclosed.
  • Beltone SME will launch 1 BN EGP investment fund by the end of 2021. The fund will spend the next year lining up commitments from investors and has already logged interest from both local and international institutions. It is currently working on financing 3-4 SMEs operating in the agricultural and industrial sectors and aims to increase its capital to 100 MM EGP in the coming year.
  • Six buyers are reportedly bidding for a stake in Makkasa Sport, the owner of Misr Lel Makkasa Sporting Club. Makkasa Sport Chairman Amr Mostafa Kamel, whose resignation last week is still under consideration, has made an offer through his company I Friends Sport to buy 100% of the company for 100 MM EGP and take on its 80 MM EGP in debt.
  • Lab and diagnostic testing company Speed Medical (SPMD) and Prime Speed Medical Services — in which SPMD holds 30% stake — are setting up a new lab outfit, Masr Labs Company for Medical Services. The joint venture will invest 150 MM EGP to open 100 branches over the coming year, with an eye to increase its total branch count to 200 by 2022.
  • First Abu Dhabi Bank (FAB), UAE largest bank and one of the world's largest and safest financial institutions, has partnered with UAE-based fintech startup Tabby to enable acceptance of their Buy-Now-Pay-Later solution at FAB merchant partners. The very first roll-out of this solution has been at Al Futtaim-owned Toys R’ Us stores in UAE.
  • Exports of Dubai Chamber members exceeded a combined value of 45 BN AED (12.25 BN USD) between June and August 2020, marking a 4% increase compared to the March-May period during the same year. The average number of exporters over the three months ending in August stood at 4,630, increasing 14% from the 4,066 exporters accounted for between March and June 2020.
  • An unnamed Arab sovereign wealth fund is looking to acquire 75-100% of Ismailia Agricultural and Industrial Investments for around 3 BN EGP. The fund is reportedly in the midst of due diligence and expects the transaction to go through by the end of the year.
  • In Kuwait, Sidra Capital’s US dollar-denominated Mutajara Fund has been successfully achieving its targets and is on course to deliver returns in excess of 6% for 2020, with no payment defaults or delays despite the challenging market conditions created by the global Covid-19 pandemic.
Sports and Culture

Sports and Culture

  • Abu Dhabi Sports Council has issued coronavirus precautionary measures for community sports events in Abu Dhabi, including running, cycling, open-water swimming, marine and triathlon activities. Measures include registering for events through the Abu Dhabi Sports Council website, allocation of a separate event entrance and exit, and a designated area to collect medals. Children under 12, adults over 60, and people with chronic diseases may not participate.
  • Timea Babos and Kristina Mladenovic enjoyed some sweet revenge following their U.S. Open heartbreak as they retained their French Open doubles title to claim their fourth Grand Slam as a pair on Sunday.

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