Home > Insights > STC, Vodafone Group vow to continue acquisition talks after deadline expires without agreement
Monday, 14 Sep 2020

STC, Vodafone Group vow to continue acquisition talks after deadline expires without agreement


Insights MENA

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Economic Outlook

Economic Outlook

  • Egypt annual urban inflation decreased to 4% in August compared to 4.2% in July, its lowest level since October 2019, according to Central Bank of Egypt (CBE). Moreover, Pharos Holding expects the annual inflation rate to stabilize at 4.5% in September and October.
  • Egypt is targeting a tax-to-GDP ratio increase of 5% over the next five years, to rise from 14% to 16.5%, according to Minister of Finance Mohamed Maait. Maait added that the country’s tax administration system is witnessing its largest “development revolution” under President Abdel Fattah Al-Sisi.
  • Egypt total investments will grow 5% in 2020/2021 and 10% in 2021/2022, according to a FocusEconomics Consensus Forecast for MENA. The report highlighted that Egypt Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, inched down to 49.4 in August from 49.6 in July.
  • The outlook for Saudi Arabia economy remains uncertain as the kingdom's central bank governor stated, as the oil exporter navigates the effects of low oil prices and the coronavirus pandemic. The International Monetary Fund (IMF) has estimated the Saudi economy could contract by 8% in 2020. However, Saudi officials have previously reported their own projections that were less "pessimistic" than that.
  • The Saudi Food and Drug Authority (SFDA) seized more than 40 million packages of illegal cosmetic products during inspection visits carried out throughout the country in H1-2020. The SFDA conducted 7,284 checks on cosmetic facilities over the six-month period that uncovered 1,105 breaches of rules and regulations surrounding the items.
  • The Islamic economy is estimated to be worth 2 TR USD by 2024, according to a halal guidebook published by the Dubai Airport Freezone Authority (DAFZA). Ranking first in the guidebook is the food and beverage (F&B) industry, with a total estimated value of around 1.4 TR USD. The sector is expected to grow to near 2 TR USD by 2021.
  • The Covid-19 pandemic has resulted in a unique ecosystem where the growth in digital payments and financial services will be a key contributor to the UAE economic recovery, experts said at the DigiPay 2020: The Future of Digital Payments Summit.
  • Kuwait banking sector will continue to face pressure in terms of profitability and asset quality for the rest of the year. According to Kuwait Financial Centre’s recent report, profitability for 2020 is expected to fall, with net income reducing from 202 BN KWD (3.92 BN USD) in 2019 to 592 MM KWD (1.93 BN USD) in 2020, due to lower operating income consequent to contracting Net Interest Margins and lower non-interest income due to subdued business activity.
Political Events

Political Events

  • A two-phase elections in the House of Representatives will start by late October and wrap by mid-November for voters at home and abroad. The first phase of voting will run 24 and 25 October for voters in 14 governorates while the second round of voting will take place 7 and 8 November in the remaining 13 governorates.
  • Lebanese firefighters and army helicopters last Friday put out the remains of a huge fire at Beirut's port that had flared up a day earlier, barely a month after a massive blast devastated the port and the surrounding area. Thursday's fire, which officials said was sparked by welding during repair work after last month's port explosion, covered several districts of Beirut in a huge cloud of black, acrid smoke, causing panic in a city still on edge after the blast.
Stock Market

Stock Market

  • The Egyptian Exchange (EGX) closed Thursday’s trading session on a positive note on the back of Arab purchases with the main EGX30 index rising by 08% to 11,462 points. The small- and mid-cap EGX70 EWI climbed by 2.01% to 1,820 points, while the EGX100 EWI added 1.5% to 2,731 points. Likewise, the EGX50 index went up 0.57% to close at 2,038 points. The market cap value increased by 1.7 BN EGP (107.13 MM USD) to stand at 630.52 BN EGP (39.73 MM USD).
  • Goldman Sachs Saudi Arabia has completed all regulatory and technical requirements to become a member of the Saudi Stock Exchange (Tadawul). Goldman Sachs will have the right to conduct brokerage services for derivatives trading and as a principal and agent in Tadawul for the new market launch. Yesterday, Tadawul is launching the derivatives market to offer investors a comprehensive and diversified range of investment products and services.

Note: All values are calculated by last Thursday.

Companies Transactions

Companies Transactions

  • Orascom Construction and Hassan Allam have won contracts from the New Urban Communities Authority (NUCA) to build five towers in New Alamein. Hassan Allam won contracts for three towers while Orascom took home agreements to build two. The towers will cost an almost 9 MM EGP (2 BN EGP) each to construct and are expected to be completed in 2021.
  • Saudi Telecom Company (STC) has failed to reach an agreement with Vodafone Group to acquire its 55% stake in Vodafone Egypt after the deadline set by an MoU signed in January expired yesterday. The two companies had reached a preliminary agreement on a reduced valuation, but STC yesterday said that negotiations failed to find a breakthrough “due to misalignment with relevant parties.” Vodafone initially received 39 BN USD non-binding offer for the majority stake, valuing the company at 4.4 BN USD.
  • Credit Agricole is leading 9 BN EUR loan to finance the Cairo-new administrative capital monorail. (Al Shorouk) Orascom Construction, Bombardier and Arab Contractors broke ground on the 96-km, 4.5 BN EUR monorail in May.
  • Canal Sugar Company is reportedly seeking 18 MM USD (1.5 BN EGP) loan from a consortium of six banks as an extension to 184.02 MM USD (2.9 BN EGP) facility it received in March 2019. NBE, QNB, Alexbank and the Suez Canal Bank are among those reportedly participating.
  • Saudi Arabian supermarket retailer BinDawood Holding set an indicative price for its initial public offering, seeking to raise as much as 19 BN SAR (585 MM USD) in a Riyadh listing. The company plans to offer 22.86 million existing shares at an indicative pricing of between 84 riyals to 96 riyals per share in the planned IPO. It will sell 20% of the company through the sale of existing shares.
  • Saudi mall operator Arabian Centres Company has divested all of its shares in Al Bawarij International for Development and Real Estate Investment Co. The company stated that the sale was valued at 4 SAR and was completed on September 10, 2020 adding that the transaction included its “entire remaining shares” in Al Bawarij.
  • TARGET Engineering Construction Company, a wholly-owned subsidiary of Arabtec Holding, has been awarded a 20-month contract worth 8 MM AED (110 MM USD) in Abu Dhabi. The contract was granted by Abu Dhabi Company for Onshore Petroleum Operations LTD (ADNOC ONSHORE).
  • The Abu Dhabi Investment Authority (ADIA) was ranked third among the top 89 sovereign wealth funds in September, with 6 BN USD assets, according to a report by the Sovereign Wealth Fund Institute (SWFI). The ADIA was followed by the Kuwait Investment Authority (KIA) with 533.7 BN USD assets.
  • The Capital Markets Authority (CMA) has decided to delist Ithmaar Holding from Boursa Kuwait, according to the company's disclosure to Boursa Kuwait on Thursday. It is noteworthy to mention that in H1-2020, the company reported net losses attributable to the equity holders of 29 MM USD compared to net profits of 8.37 MM USD in H1-2019.
Sports and Culture

Sports and Culture

  • UAE Pro League’s strategic retreat set to be held along with Japan’s J-League, Sweden’s Allsvenskan, Spanish La Liga, and the English Football League will kick off today and will continue until 17th September. The retreat aims to explore best practices and identify areas where experiences can be exchanged to develop and strengthen the Pro League’s ability to build strategic initiatives.
  • Egypt have discovered their group opponents in the 2021 World Men’s Handball Championship as the draw was held on Saturday. The tournament will consist of 32 teams and is set to take place in Egypt next year, starting from 14 to 31 January. The draw on Saturday revealed a challenging group for Egypt, who are set to host the competition for the second time in their history.

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