Korra Energi’s institutional IPO tranche 2.7x covered on day one

Good morning, friends. Today’s issue is packed with energy news — showing that we are slowly, but surely, advancing our Mediterranean energy hub ambitions. The latest news includes a new Cypriot gas export route by 2028, a planned Mediterranean refined products pipeline, and a fresh USD 208 mn drilling agreement in the Western Desert.

Also on the Mediterranean, a QNB Egypt-led banking consortium arranged an EGP 12 bn syndicated loan to build deep-water marine berths at East Port Said Port.

On the monetary front, the Finance Ministry is gearing up to launch its third Citizen Bond tranche in early June, and is currently studying letting fintechs distribute the bonds alongside post offices.

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WISH THIS MORNING’S ISSUE was a podcast? We’ve got you. Tap or click here to listen to Morning Drive, a 10-minute version of today’s issue crafted for you to enjoy with your morning coffee, while getting the kids ready for school, or while stomping around the house wondering where the [redacted] you left your [redacted] reading glasses.

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Institutions pile into Korra IPO

The institutional tranche of Korra Energi’s IPO was 2.7x covered on the first day of bookbuilding, according to a bourse filing (pdf). Korra is floating roughly 247.5 existing shares on the EGX — an 11% stake — of which 60% are being offered exclusively to institutional investors until 24 May.

The remaining 40% of shares goes to retail subscriptions, which opened yesterday and will run until 25 May. Individual investors can book up to 2 mn shares each and no less than 1k.

The private offering reflects strong investor appetite for the energy solutions firm, suggesting that local institutions and high-net-worth individuals are ready to look past local macro jitters and regional geopolitical volatility.

REFRESHER- The founding family is looking to raise EGP 735 mn in gross proceeds from what would be the EGX’s second private-sector IPO of the year, following Gourmet’s listing in February.

Concerns over consumer credit reach parliament

Scrutiny toward non-bank financial institutions (NBFIs) is escalating as the brewing consumer credit debate reaches parliament. Member of the House Committee on Economic Affairs MP Hassan Ammar has filed an official briefing request for an urgent committee hearing to address what he described as “unregulated expansion” of consumer finance and installment firms.

IN CONTEXT- The move marks the second parliamentary intervention in days, following a similar request for a briefing. It builds on recent warnings from CIB CEO Hisham Ezz Al Arab about market-based finance risks and potential contagion in the formal banking sector.

MEANWHILE- The Central Bank of Egypt moved to de-risk the sector by tightening underwriting terms and barring commercial banks from funding NBFIs unless they are coded with the central bank and plugged into I-Score.

Third time’s the charm?

The Finance Ministry will launch its third Citizen Bond issuance in early June, with the yield to be set after the Central Bank’s Monetary Policy Committee meeting tomorrow, a senior government source tells EnterpriseAM. The ministry is also considering letting fintechs sell the bonds alongside post offices — a distribution expansion that would lean on digital procedures the ministry has been working through.

The first two tranches told different stories. Issuance one raised EGP 5.7 bn, and issuance two raised EGP 2 bn — a roughly 65% drop. The timing of the issuance, along with the availability of competing investment instruments, was behind the decline, our source tells us. The ministry plans to issue every two weeks from now on, with no fixed total target, they add.

The 17.75% fixed return is still attractive against competing retail products, the source says — particularly the fixed-rate structure against variable-yield alternatives.

What to watch: The MPC decision sets the yield, which will set the demand. If the ministry comes in materially above what banks are paying on deposits, you could see a recovery in subscription.

The proximity premium

The government wants a slice of the gains to property values driven by new infrastructure projects, with the Transport Ministry mulling over imposing betterment levies on real estate developments located near the state’s new sustainable electric transit networks, a senior government official told EnterpriseAM.

How it works: Under a new agreement with the Housing Ministry, a fixed percentage of land sale revenues generated along the routes of the Monorail, the Light Rail Transit (LRT), the High-Speed Rail, and the upcoming Alexandria Metro will be diverted directly to the National Authority for Tunnels (NAT). The mechanism aims to monetize the massive appreciation in land and property value triggered by proximity to public infrastructure.

SOUND SMART- Betterment fees, also called land value capture, are charges levied on property owners whose land appreciates because of public infrastructure investment. The logic? If a metro stop adds 20% to nearby land values, some of that uplift belongs to the public purse that built the stop. Hong Kong, Tokyo, São Paulo, and several US cities have used variants of the mechanism to part-finance transit for decades.

Arab Monetary Fund contribution bump

Egypt is raising its contribution to the Arab Monetary Fund (AMF) from XAD 88 mn (USD 359 mn) to XAD 210 mn (USD 856 mn), according to a House committee report seen by EnterpriseAM. The government will settle its new obligation from 2026 to 2035 via 20 bi-annual installments of USD 24.9 mn each.

A long relationship: Since 1978, Egypt has received 19 loans from the fund and financing facilities worth almost USD 4 bn, making it the largest Arab beneficiary among the member states, according to the report.

PSA-

Happy Eid El Adha: Prime Minister Mostafa Madbouly says the country will enjoy asix-day paid holiday for public sector employees in observance of Eid El Adha, running from Tuesday, 26 May to Sunday, 31 May. The Central Bank of Egypt will be closed on those same days, and we will be waiting for word from the Labor Ministry. EnterpriseAM will also be taking a break from your inbox starting Tuesday, 26 May, and we’ll be back at our usual time on Monday, 1 June.

WEATHER- The weather is kinder in Cairo today, with a high of 31°C and a low of 18°C, according to our favorite weather app.

It’s breezier in Alexandria, with a high of 23°C and a low of 17°C.

In a market defined by geopolitical risk, inflation, currency volatility, and declining interest rates, knowing how to manage your money has never been more important, and yet few people are really good at it.

The default in Egypt has traditionally been to dollarize, buy real estate, or stash your extra cash in a high-yield certificate of deposit, but that playbook is dying.

With an illiquid real estate market, the era of ultra-high-yield deposits coming to an end, and a rapidly expanding ecosystem of digital investment options, investors are looking for new, smarter opportunities.

In this four-part series, EnterpriseAM Money Matters will walk you through smart personal finance decisions regardless of your age, income, or starting point.

Coming straight to your inbox — today, at 11 AM Egypt.

The big story abroad

With Kevin Warsh poised to take the helm of the Federal Reserve this Friday, business headlines are focusing on rising treasury yields that could complicate his expected dovish agenda. Investors may demand higher returns for long-term debt, especially amid rising energy prices, a resilient economy, and the highest yield on treasuries in almost 20 years.

Meanwhile, in the tech world: Google is further integrating AI in its search function while introducing what it calls Gemini Spark, an AI “agent” that is designed to function independently and act on a user’s behalf. The tech giant is also rolling out smart glasses that will include a camera and speaker in a bid to challenge moves made by its rival Meta.

And speaking of AI: Standard Chartered is looking to slash some 8k jobs in favor of relying more heavily on AI, with cuts affecting its human resources and risk and compliance functions. The company’s CEO Bill Winters has characterized the move as a shift away from “lower-value human capital.”

ALSO: Elon Musk’s SpaceX has reportedly tapped Goldman Sachs to lead its highly anticipated IPO, with the bank set to assume the most prominent spot among the underwriters involved. Goldman and Morgan Stanley will reportedly be serving as lead bankers.

Good news for Arsenal fans: For the first time in 22 years, Arsenal FC took home the Premier League championship after Manchester City tied in yesterday’s showdown with Bournemouth. The Gunners, under the leadership of Mikel Arteta, have secured a total of 82 points.

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: EnterpriseAM’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’re unpacking how soaring electricity tariffs are pushing commercial and industrial operators to ditch cheap infrastructure in favor of full-system electrical engineering to protect thinning margins.