** #1 More good news: Egypt is among the most-improved countries in the World Bank’s latest Ease of Doing Business report: Egypt jumped eight spots to rank 120th out of 190 countries in the World Bank Group’s 2019 Ease of Doing Business report (pdf). The country made it to the report’s list of top performers in 2017-18 thanks to the implementation of regulatory reforms that facilitated doing business in three or more of the 10 topics included in the report compared to last year. Here’s where we did well:

Starting a business: The process of starting a new business became easier over the past year with the introduction ofa “one-stop shop” for investors that doesn’t require a bank certificate, which helped reduce “regulatory complexity” in 2017-18. According to the report, it now takes an average of 11 days and 6.5 steps to start a business.

Making it easier to access credit: Egypt also worked on strengthening the legal rights of borrowers and lenders “by introducing the possibility of granting a non-possessory security right in a single category of movable assets without requiring a specific description of the collateral. Secured creditors are now given absolute priority over other claims, such as labor and tax, both outside and within bankruptcy proceedings,” the report said.

Egypt also stepped up protections for minority investors by expanding shareholders’ role in company management and “increasing corporate transparency.”

We can actually restructure with bankruptcy protection rather than go to jail: Under the subhed “resolving bankruptcy,” the World Bank notes that Egypt “introduced a new restructuring procedure, which included training programs on solvency law and allowed debtors to initiate the reorganization procedure and granted creditors greater participation in the proceedings.”

Paying taxes has also been made easier by improving the VAT refund process, extending it to refunds to manufacturers in case of a capital investment.

How did we fare in comparison to others? New Zealand remains at the top of the global ranking, followed by Singapore and Denmark. Somalia also retained its spot at the bottom of the chart, despite its score improving slightly y-o-y. The UAE was the highest ranked MENA country, climbing to the 11th spot from 21 last year. Morocco ranked 60 and Saudi Arabia ranked 92.

Other recent good news: Smart government policy helped virtually eliminate the “black cloud” that previously plagued the nation’s capital every fall and a World Bank report found the white cab taxi replacement program slashed Egypt’s carbon dioxide emissions by 310k tonnes in 2013-2017.

** #3 M&A WATCH- Sawiris’ Orascom Investment wants at least 25% of Sarwa Capital: Orascom Investment Holding (OIH)is looking to acquire a non-controlling stake of c. 216 mn shares in consumer and structured finance player Sarwa Capital at EGP 7.36 a share, the company said in a bourse statement (pdf). The company has filed for regulatory approval on the voluntary offer and has also expressed willingness to buy a smaller stake of 144-216 mn shares, but only at EGP 6.62 per share — a 10% discount to its price at the opening bell in its EGX debut last month, according to a statement from the FRA (pdf), which is studying OIH’s bid. OIH CEO Tamer El Mahdi told Bloomberg that “we’re looking to have something more than 25%,” adding that “we believe the price which is currently in the market is very attractive for OIH.”

The move is in line with OIH’s strategy to expand in the retail finance sector, which the firm sees growing as the economy continues to improve, El Mahdi also said. “The company fundamentals are very strong, and we have no concerns in terms of the stock’s performance since the IPO.”

The market reacts: Sarwa Capital’s shares jumped 10% after OIH’s announcement, closing at EGP 6.17 on Wednesday. The company’s shares had closed down more than 11% in their EGX debut amid the same Emerging Markets Zombie Apocalypse that shortly after prompted the government to delay its own share-sale plans. The EGX decided yesterday to raise the price limit on Sarwa’s shares to EGP 7.36 / share for a five-day window starting today. Reuters also has the story.

M&A WATCH- Banque Misr has sold its 2% stake in Saudi Arabia’s Samba Financial Group for USD 370 mn, Vice Chairman Akef El Maghraby told Reuters, without naming the buyer. El Maghraby told Sky News that the divestment came amid plans to sell stakes in entities in which the bank does not participate in management or in the decision-making process (watch, runtime 01:15). El Maghraby also said Banque Misr would not be selling its stake in Cairo-Amman Bank.

** #4 Egypt reaches staff-level agreement with IMF on fifth loan tranche: Egypt reached a staff-level agreement with the IMF yesterday on the fifth USD 2 bn tranche of its USD 12 bn extended fund facility after a delegation led by Egypt Mission Chief Subir Lall completed its fourth review of the government’s economic reform program. The delegation found that “the Egyptian economy continued to perform well, despite less favorable global conditions, supported by the authorities’ strong implementation of the reform program,” Lall said in a statement issued yesterday. The amount, which brings total payments under the program to USD 10 bn, will be disbursed after the IMF’s executive board signs off on the agreement. Finance Minister Mohamed Maait had previously said to expect that to happen in early 2019.

What’s going right: Driving the delegation’s decision are strong indicators of a promising outlook, including:

• improvements in GDP growth levels;
• a narrower current account deficit;
• lower unemployment rates;
• lower government debt levels relative to GDP.

The central bank’s tight monetary policy and flexible exchange rate regime are also expected to help “cushion [Egypt] against external shocks,” while the government’s fiscal policy is seen “keeping general government debt on a clearly declining path” to achieve a primary surplus for the first time in years. The delegation also took note of authorities’ commitment to energy subsidy reform and expanding social welfare coverage, as well as efforts to combat corruption and boost transparency.