{"id":543626,"date":"2022-02-10T03:53:22","date_gmt":"2022-02-10T03:53:22","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/02\/10\/this-morning-macro-groups-egx-debut-its-inflation-day\/"},"modified":"2022-02-10T03:53:22","modified_gmt":"2022-02-10T03:53:22","slug":"this-morning-macro-groups-egx-debut-its-inflation-day","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/02\/10\/this-morning-macro-groups-egx-debut-its-inflation-day\/","title":{"rendered":"THIS MORNING: Macro Group\u2019s EGX debut + It\u2019s inflation day"},"content":{"rendered":"

Good<\/strong> morning, wonderful people. We\u2019ve made it through another workweek together, and <\/strong>our reward is what can only be called one hell of a news day <\/strong>\u2014 a news day that reinforces what we think is fast becoming one of the dominant themes of 2022.<\/p>\n

With just a bit more than 10% of the year behind us, it\u2019s clear that we have very good <\/strong>friends in the Emirates. <\/strong>FAB is making a play for our friends at EFG Hermes not even two months after real estate giant Aldar and Abu Dhabi sovereign wealth fund ADQ acquired our friends at SODIC. And just as FAB made its announcement yesterday, Aldar \u2014 a high-metabolism outfit \u2014 made clear it intends to continue growing in Egypt through acquisition.<\/p>\n

This is bns of EGP worth of foreign investment pouring into the country from <\/strong>well-managed, well-governed, high-quality strategic investors <\/strong>who can literally choose to invest anywhere in the world. Their choice to come here is not just a ringing endorsement of what the teams at EFG Hermes and SODIC have built \u2014 it emphasizes Egypt\u2019s position as an exceptionally promising place to build and grow a business. For all of the things (in the business world and outside) that we need to fix or improve, our macro, business and other fundamentals are very compelling \u2014 and the opportunities to grow are immense.<\/p>\n

EFG\u2019s own growth story underscores that: <\/strong>A flagship Egyptian multinational, EFG was born as a two-person consultancy back in the 1980s and has grown into a universal bank that encompasses the top emerging markets investment bank, a fast-growing non-bank financial services house, a commercial bank, and fintech properties all under the same roof. The offer is a ringing endorsement of the vision and hard work that Karim Awad and his team have put in over a sustained (and challenging) period.<\/p>\n

Karim <\/strong>spoke with us about<\/strong> how he and his team have built out the institution <\/strong>in the first season of Making It, our seasonal podcast on how to build a great business here in Egypt (listen, runtime: 34:07)<\/a>.<\/p>\n

And the icing on the cake: <\/strong>EFG Hermes\u2019 investment bankers and brokerage team could be in for a really busy year (provided global investor sentiment holds).<\/p>\n

Consider this:<\/strong><\/p>\n

<\/a> IT\u2019S A BIG DAY FOR CAPITAL MARKETS- Macro Group\u2019s shares will <\/strong>begin trading on the EGX today <\/strong>under the ticker MCRO.CA. Macro raised EGP 1.3 bn in its IPO, which saw it sell 264.5 mn shares at EGP 4.85 apiece, valuing the cosmeceutical company at around EGP 2.8 bn. The institutional offering \u2014 which was allocated 95% of the shares \u2014 was 1.8x oversubscribed<\/a>, while the retail component saw stronger demand, closing on Monday 102x oversubscribed<\/a>. The crew at EFG Hermes quarterbacked the transaction.<\/strong><\/p>\n

Speaking of IPOs:<\/strong> NI Capital CEO Mohamed Metwally expects \u201ca minimum of two, <\/strong>but up to four government-related public offerings this year,\" <\/strong>he told Reuters,<\/a> saying that those are the transactions in which NI Capital is involved. \u201cThere are other entities that are involved in other transactions,\u201d he added.<\/p>\n

Officials have been talking a lot about the state\u2019s listing pipeline lately.<\/strong> Last week, Finance Minister Mohamed Maait said the government plans to sell shares in up to 10 state-owned companies<\/a> on the EGX this year. Maait also pledged to restart the privatization program<\/a> in March, a few days after Minister Hala El Said said that the government could sell stakes every month or two<\/a>. Prime Minister Moustafa Madbouly, meanwhile, said the government is looking to list \u201cas many state companies as possible\u201d<\/a> on the EGX in 2022.<\/p>\n

First up: <\/strong>Ghazl El Mahalla FC<\/strong> is set to offer a 67.5% stake in its IPO around about now, which is expected to raise a total of EGP 135 mn after attracting EGP 37 mn from institutional investors during the private placement. Further out, Heliopolis Housing and Development<\/strong> is eyeing a secondary offering, and state fertilizer producer Mopco<\/strong> also wants to tap the EGX. Misr Ins. Holding subsidiary Misr Life Ins.<\/strong> is looking at an IPO, while perennial candidate Banque du Caire<\/strong> could also make its EGX debut.<\/p>\n

ALSO TODAY-<\/strong><\/p>\n

Inflation figures are due out today:<\/strong> Annual urban inflation rose to 5.9%<\/a>in December<\/a> from 5.6% in November. Prices are expected to continue to rise in the short term due to an unfavorable base effect along with a global increase in consumer prices \u2014 but look set to stay within the central bank\u2019s target range of 7% (\u00b12%) by 4Q2022. The Central Bank of Egypt expects price stability in the medium term, it said last week following its monetary policy committee meeting<\/a>. The government\u2019s fuel pricing committee\u2019s decision to raise fuel prices over the weekend is expected to have only a limited impact on inflation, analysts said<\/a>.<\/p>\n

Keep an eye on the US, which will release its own CPI data just a few hours later.<\/strong> The data, which will be released at 3:30pm CLT (8:30am EET), is expected to show another jump in inflation figures last month, with the consumer price index expected to rise 7.2% in January after rising to a 40-year record 7% in December<\/a>. Any reading above the projected 7.2% could push the US Federal Reserve to tighten policy faster by implementing its first half-percentage-point rate hike in over two decades when it meets in March, where it is expected to kick-off a series of interest rate rises to bring inflation under control, Bloomberg<\/a> reports. The Fed more customarily moves rate a quarter point at a time.<\/p>\n

Budget consultations resume today:<\/strong> The Finance Ministry will begin the next round of public consultations on the draft FY 2022-2023 budget<\/a> today.<\/p>\n

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PSA- Expect cooler weather today and tomorrow<\/strong> with the mercury peaking at 17\u00b0C both days and falling into the single digits overnight. That\u2019s probably the last gasp of winter <\/strong>as the mercury looks set to return to the 21-24\u00b0C range for the following 10 days, our favourite weather app suggests.<\/p>\n

The <\/strong>national weather service forecasts<\/a><\/strong> a chance of rain<\/strong> along the North Coast, in Cairo and other parts of the country today.<\/p>\n

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THE BIG STORY ABROAD-<\/strong><\/p>\n

The crisis in Ukraine is on a slow simmer<\/strong> as it drops further down the front pages of the international press. US officials continue to brief that Russia has not stopped building up its military presence on its border with Ukraine, the Financial Times<\/a> reports, while the US is sending troop reinforcements to Romania in case of \u201cpotential spillover\u201d from the crisis, according to Reuters<\/a>. All in all, while it's still too soon to call \u201cstorm-in-a-teacup\u201d on this latest geopolitical kerfuffle, there is at least no new significant escalation to report.<\/p>\n

The US papers, meanwhile, are squarely focused on \u2014 dare we say it? \u2014 the end of the pandemic.<\/strong> Several states including New York dropped blanket mask mandates on Wednesday, citing lower daily case numbers and hospitalizations, while covid-19 oracle and US chief medical adviser Dr. Anthony Fauci spurred further optimism when he said that the country was firmly \u201con the road to approaching normality.\u201d The Washington Post<\/a>, the New York Times<\/a>, and the Wall Street Journal<\/a> all have coverage.<\/p>\n

CIRCLE YOUR CALENDAR-<\/strong><\/p>\n

There are two conferences taking place in Cairo next week:<\/strong><\/p>\n