Banque du Caire’s retail book closed 27x covered, days before trading

Good morning, friends, and happy almost-weekend. We’ve all been wondering lately: where does the money go from here? Today’s issue gives you some ideas: our funds are past EGP 500 bn, AI is creeping into lending decisions, and the Central Bank of Egypt answers on rates later today.

BUT FIRST- Don’t forget to turn your clocks back an hour before you go to sleep tonight, as daylight saving time ends at midnight, meaning 12am on Friday becomes 11pm on Thursday. Daylight saving time is a headache for some, but whatever your opinion, we can all enjoy that one extra hour of sleep tomorrow.

And keep half an eye on your banking apps overnight, as some local banks pause internet banking, e-wallets, mobile apps, and ATMs around midnight to upgrade their systems before the change.

Starting with funds, the industry crossed EGP 500 bn in 3Q, and individuals now hold just under 80% of the certificates. The index funds riding the EGX70 and EGX100 returned 13% for the quarter, then watched the EGX70 give back 11% in a single session on Sunday. Azimut Egypt’s Ahmed Abou El Saad tells us why he reads that as a problem in how those indices are built.

MEANWHILE- We are set to import about 15 mn barrels of crude this quarter, 8% more than a year earlier, and pay for it on supplier credit. The shipments, sourced from Saudi Arabia, Libya, and Greece, will cost USD 1.4-1.5 bn, with EGPC paying through short- and medium-term credit.

AI now has a role in finance: From April 2027, consumer finance companies will have to check an I-Score credit score before approving financing, under a new FRA rule. That score runs on the kind of alternative data that AI lending models use, and we’re seeing a growing pattern: fintechs are increasingly letting software make calls. Banks are moving more slowly, though, held back partly by the central bank’s rules that keep customer data off cloud AI services, according to two bank CEOs we talked to.

Over in energy, two of our biggest solar-and-battery projects are at very different stages. Nefer Minya has closed its USD 566 mn in debt and is in full construction, while Scatec’s Dandara, which will supply EgyptAlum’s smelter, has only signed preliminary financing terms.

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It’s mail time! Who writes EnterpriseAM’s subject lines? Why are our podcasts audio only? How do we preserve the craft of writing while integrating AI policies across the newsroom?

These are some of the questions readers and listeners have sent us over the years, so on an upcoming episode of Making It, Patrick and the team will answer them along with anything else you’re curious about: whether it’s about the business, our coverage, how the newsroom is run, or why we do things the way we do.

Have a question for us? Record it as a voice memo (30-45 seconds), tell us your name at the top, and send it to [email protected] by Saturday, 7 November. We’ll also take written questions, but since we’re an audio show, we’d love to play yours in your own voice.

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27x and done

Banque du Caire’s (BdC) retail book closed 27x oversubscribed yesterday, with the IPO set to execute today. Retail investors had ordered some 9.29 bn shares by the close, against the 343.1 mn shares in the upsized public tranche, Al Arabiya reports, citing a bourse statement. That’s roughly EGP 49.2 bn (c. USD 921 mn) chasing EGP 1.8 bn (c. USD 34 mn) of stock at the EGP 5.30 final price, by our math, using the circular’s EGP 53.46 rate against the USD. The book is allocated pro rata and without discretion, so applicants get about 3.7% of what they asked for.

BdC has also cleared the last approval standing between it and the EGX: The lender told the bourse in a letter (pdf) that it had received the Cabinet’s notification approving the sale of a 30-45% stake. The shares are expected to start trading on Monday, 2 November.

Retail buyers hold a cushion the institutions do not: Under the circular, retail investors can lodge sell orders at the EGP 5.30 offer price during the 30 days after trading starts, and CI Capital (the stabilization manager, 92.95% owned by Banque Misr) matches them from a fund holding the retail tranche’s EGP 1.8 bn of proceeds. The buyback is settled at the end of the period, and the balance returns to the seller.

REMEMBER- Banque Misr upsized the offering to 45% from 30%, with the International Finance Corporation and the European Bank for Reconstruction and Development signing on to buy in. The two development lenders joined the transaction after BdC had already lined up cornerstone investments from four foreign funds for an aggregate of up to USD 256 mn at the offer price: UK hedge fund Helikon, London-based Redwheel, Africa-focused Sustainable Capital, and the UAE’s Waha Investments.

Now, it’s listing

Alamal Alsharif for Plastics filed to list its shares on the EGX’s main market, the first formal step toward a debut for a company 54.5% owned by state banks. The exchange said it received the request on Tuesday and is reviewing the company’s listing documents before sending them to the listing committee. The notice covers issued capital of EGP 796.3 mn — divided into 7.96 mn shares at a par value of EGP 100 — and will be published for five working days through 2 November.

The filing comes as a year-end deadline approaches: Alamal Alsharif was among the names under consideration when the government moved in March to finalize a timeline to IPO or sell stakes in at least 20 state-owned companies, part of a push for USD 3-4 bn in inflows before year-end and a broader plan to raise USD 6 bn to support reserves. This is among the requirements of the IMF program, which concludes in December.

It joins a queue the state is racing to clear: The number of companies temporarily listed under the offerings program has risen to 29, with a 30th being selected, Asharq Business reports, citing Hashem El Sayed, assistant prime minister and CEO of the Cabinet’s state-owned companies unit. Four are meant to start trading before year-end: Banque du Caire within days, Misr Life Ins. in late November or early December, and El Nasr Glass and Spring & Transport Needs Manufacturing (Yayat) in December.

BACKGROUND- The state was looking to sell 30% of Alamal Alsharif to a single strategic investor by 1Q 2024 at a c. EGP 7 bn valuation that put the stake at some EGP 2.1 bn. By April 2024, it was preparing to exit in full, selling its entire holding to a strategic investor paying in USD, with EFG Hermes and Al Ahly Pharos tapped to manage the sale. However, neither transaction went through. The state holds its stake through the National Investment Bank (34.26%), the National Bank of Egypt (13.56%), United Bank (6.10%), and Suez Canal Bank (0.59%), with individual shareholders holding the rest.

License to wind

The Cabinet approved golden licenses for two 900 MW wind projects at its weekly meeting yesterday, clearing 1.8 GW combined. Shadwan, Scatec’s project company, will build at Ras Shokeir on the Red Sea with completion set for 31 March 2028. Shokeir Wind Energy — Engie (35%), Aeolus-Toyota Tsusho (40%), and Orascom Construction (25%) — will build its farm in the Gulf of Suez, with completion set for 1 November 2028. Both will sell power to the Egyptian Electricity Transmission Company (EETC).

IN CONTEXT- Both projects had already signed their power purchase agreements: Shadwan with a 25-year USD-denominated PPA in 2025, and Shokeir with a 25-year build-own-operate PPA with EETC in March 2026. Engie said the first 300 MW would come online in December 2027 and the full 900 MW by mid-2028. The golden license is the single approval covering establishment and operation, following earlier grants to Scatec’s Obelisk solar plant and Amea Power’s Benban project. Shadwan’s cost is put at about USD 1 bn, with the European Bank for Reconstruction and Development earmarking USD 192 mn in August; Shokeir is the consortium’s third Egyptian wind farm, taking its local portfolio to about 1.8 GW.

Happening today

The Central Bank of Egypt’s Monetary Policy Committee meets later today, and most of the analysts we spoke to earlier this week expect it to leave the overnight deposit rate at 19%. Fuel prices are frozen through December, which they think keeps inflation contained for now, and the real-rate cushion is still around 5.1 percentage points over September’s 13.9% urban headline inflation.

Only one analyst expects a hike: Maged Fahmy, the former Industrial Development Bank chairman, argues a hike would keep foreign money in. The rest think a hike costs more than it buys: Al Ahly Pharos’ Hany Genena calls it “a luxury Egypt cannot afford.” What keeps the question open at all is the EGP: it is past EGP 56 against the greenback, foreign and regional investors sold USD 1.13 bn of local debt in three sessions last week, and Deutsche Bank says the currency is the main risk to its own hold call. Nobody we spoke to expects a cut this year; the next hike — if it comes — is a December question.

PSA-

WEATHER- Cairo is seeing slightly cooler temperatures today, with a high of 28°C and a low of 18°C, a single degree down at both ends from yesterday, according to our favorite weather app.

It’s a touch cooler on the coast in Alexandria too, with a high of 27°C and a low of 18°C.

And over the weekend, expect to see colder weather in the capital, with a high of 26°C on Friday and as low as 18°C for our friends on the Mediterranean.

The big story abroad

Families, companies, and governments across Europe are under growing strain as gas prices climb back above EUR 100 a megawatt-hour for the first time since 2022. The anger over living costs is spilling into unrest in several parts of the continent. Gas prices are now more than three times what they were before the Iran war. The latest jump comes from higher demand for heating, unusually small gas reserves across Europe, and concern that a wider conflict could squeeze global supplies even more. The impact is also reaching beyond gas, as rising oil, diesel, and electricity costs push up energy inflation across Europe.

China is scrambling to prop up its stock market as its AI stocks struggle. China’s CSI 300 blue-chip index has fallen about 20% from its June peak, and the slide has spread to Hong Kong. Weak consumer demand, a long property slump, and shrinking government spending are behind the drop. Beijing has sent state-backed funds to buy shares, but analysts say a lasting rebound needs stronger demand at home. Investors are watching this week’s Communist Party plenum for signs of bigger stimulus.

Oracle says it will start generating more funds than it uses in the second half of fiscal 2028, as it tries to ease concerns about the cost of its AI expansion. Much of Oracle’s growth depends on ChatGPT maker OpenAI, and building data centers for that deal has led the company to take on large amounts of debt and issue new shares. Oracle has capped any new fundraising at USD 20 bn through fiscal 2030.