Korra Energi retail tranche closes 31.35x oversubscribed

Good morning, wonderful people, and welcome back. We hope you all had a restful, well-deserved Eid Al Adha break. It is never easy getting back into gear after a long holiday.

Leading our issue today is a new World Bank survey that shows local businesses are bypassing traditional bank loans to fund expansion straight from their own pockets — showing remarkable resilience despite taking a hit from shrinking sales.

On the energy front, we are taking a deep dive into our natural gas sector, which is leaning heavily on LNG imports to bridge the widening gap between declining domestic production and rising local demand.

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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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Retail runs hot for Korra IPO

The retail tranche of Korra Energi’s IPO closed 31.35x oversubscribed before the Eid El Adha break, according to EGX data seen by EnterpriseAM. Retail buyers placed initial orders for 3.1 bn shares, targeting just 99 mn shares earmarked for the public.

REMEMBER- The public offering follows a strong institutional private placement that was 5.7x oversubscribed after drawing orders for 845 mn shares against the 148.5 mn on offer to institutional investors. In total, Korra is floating a 11% stake — 247.5 mn existing shares — at EGP 2.97 apiece, targeting up to EGP 735 mn in proceeds.

Why it matters: Korra’s IPO is the EGX’s second private-sector main-market listing this year, following Gourmet’s blockbuster offering. The oversubscription across both tranches signals that local institutions and retail investors are willing to back new listings despite macro and regional uncertainties.

Deep tech gets subsidized

Advanced tech services are joining the government’s export subsidy program, after the Export Development Fund signed a seven-year agreement last week with the Information Technology Industry Development Agency (Itida), according to a statement from the authority. The program will offer cashback export rebates to companies specializing in electronics design, semiconductors, embedded systems, and mobile services, starting FY 2025/26.

Why it matters: The government is moving the global capabilities centers — what we called outsourcing a generation ago — up the value chain to capitalize on its value-added margins exceeding 90%. The new subsidy program, which will bring on 86 deep-tech firms, builds on a record 2025 that saw digital exports more than double to USD 7.4 bn, with outsourcing comprising USD 4.8 bn of the total.

MEANWHILE- Global customer experience giant Concentrix plans to open five new centers across the Delta and Upper Egypt, adding 11k new jobs over the next two years to bring its local headcount to 35k by 2028, according to a statement from the Communications Ministry. The expansion builds on a USD 1 bn MoU Concentrix signed with Itida in January last year to scale its multi-lingual export operations.

Checking the AI bill

Corporate leaders are increasingly skeptical that the bns of USD poured into artificial intelligence are actually paying off, Axios reports. Nearly 90% of executives say AI has had zero impact on employment or productivity over the past three years, according to a recent study from the US National Bureau of Economic Research (pdf). Some major players are starting to hit the brakes — Microsoft recently canceled most of its Claude Code licenses over costs.

The big problem is “AI brain fry.” Overusing the technology intensifies workloads, triggering cognitive overwhelm that causes frequent minor mistakes that cost businesses mns of USD, Fortune reports, citing a study from UC Berkeley. Productivity only improves when workers use three or fewer AI tools — performance plummets for those using four or more. The study’s takeaway is that AI remains effective for targeted tasks like coding, but managers must actively train employees to prioritize their usage to avoid widespread burnout.

Debt watch

Sovereign debt ins. costs fall to pre-war levels: Five-year credit default swaps (CDS) for government debt inched down to 295.90 bps yesterday, returning to pre-war levels not seen since late February. The figure tracks the cost of insuring debt against a default, with the decline signaling that investors are no longer pricing an elevated default risk.

The regional war had pushed up the cost of insuring our sovereign debt, with five-year CDS rising to 344.7 bps in early March, marking a three-month high at the time.

PSA-

WEATHER- It’s another mild day in Cairo today, with a high of 34°C and a low of 22°C, according to our favorite weather app.

It’s more springy in Alexandria, with a high of 28°C and a low of 20°C.

Earning well is not the same as investing well — and for most mid-level executives and entrepreneurs, the gap between the two is wider than they’d like to admit. The financial landscape has shifted. Regional markets are opening up, AI is rewriting how portfolios get managed, and Real Estate Investment Trusts (REITs) are entering the conversation.

And the questions that used to feel straightforward — buy or rent, fund the startup or play it safe, finance the car now or wait it out — are harder to answer than ever.

In Issue 2 of EnterpriseAM Money Matters, we get into the decisions that don’t have easy answers, because at this stage, playing it safe is the riskiest move you can make.

Coming straight to your inbox — Wednesday, June 3.

The big story abroad

The US-Iran diplomatic stalemate persists, despite both sides spending the weekend exchanging revisions to a draft pact that would keep a ceasefire in place. Regime-affiliated Iranian media has indicated that Washington and Tehran may wind up scrapping the potential resolution and that no definite result has been reached.

Meanwhile, on Wall Street: US investors seem unconvinced that an AI bubble is about to burst, wagering heavily on AI-related equities they believe still have untapped potential. The optimism is fueled by expected AI advances and big-ticket pledges on chips and data centers — investments expected to boost tech companies’ bottom lines.

And in business news: Berkshire Hathaway has made a USD 6.8 bn housing play, agreeing to acquire US homebuilder Taylor Morrison, marking the first multi-USD-bn acquisition under the helm of newly minted CEO Greg Abel. The move deepens the firm’s housing portfolio and puts it on its way to “unify [its] site-built homebuilding operations into a combined platform,” Abel said.

And in the tech world: Dell has premiered the XPS 13, its new low-cost offering whose prices start at USD 699. It is expected to butt heads with Apple’s MacBook Neo, another laptop marketed for its affordability.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We explore why a massive chunk of female graduates are missing from formal employment data, and whether they are truly stranded talent or simply working off the books.