The Financial Supervisory Authority will allow, within two weeks, the issuance of new financial instruments such as “sustainability bonds” and “carbon emissions certificates" | Zilla Capital

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01 Aug 2022

The Financial Supervisory Authority will allow, within two weeks, the issuance of new financial instruments such as “sustainability bonds” and “carbon emissions certificates”

The Financial Supervisory Authority will allow, within two weeks, the issuance of new financial instruments such as “sustainability bonds” and “carbon emissions certificates.” Mohammad Omran, the Executive Chairman of The Financial Regulatory Authority (FRA), stated that the FRA’s goal is to triple the companies’ offerings for bonds to 80 billion EGP within 4 years. Offering the administrative capital to the public will add a trillion pounds to the market value of the stock exchange. Increasing the minimum investment for private insurance funds to 5% will pump 4 billion EGP into the stock market. In a related context, Omran pointed out that “investors from the United States are seeking to establish an agricultural investment fund, with a size ranging between 750 million and one billion EGP. (Bloomberg Asharq)

The Egyptian authority in charge of regulating the capital market has hinted at the possibility of using its authority to compel companies listed on the stock exchange to increase the percentage of free-trading shares, according to the strategy of the Financial Supervisory Authority to develop the capital market.
However, for the authority, this procedure is not a priority, as the strategy confirmed that the work to attract new companies for listing on the Egyptian Stock Exchange, in addition to accelerating the program to expand the ownership base of state-owned companies, is the decisive and positively affecting element on increasing the market depth. (Bloomberg Asharq)
Mohammad Omran added that the minimum percentage of free-traded shares is 5%, "and this number needs to be reviewed greatly, especially since financial institutions own 548 billion EGP of market capital for the shares of companies traded on the stock exchange.
He noted that the financial control will adjust the allowed limit for private insurance funds to invest in the stock market, as the minimum will become 5% of their total investments. This measure will add about 4 billion EGP to the EGX." Noting that the number of these funds is 627, and their current total investments are about 103 billion EGP, less than 1% of them are invested in the stock exchange. (Bloomberg Asharq)
The Emirati fuel distributor giant ADNOC Distribution has reached an agreement with TotalEnergies Marketing Afrique SAS to acquire 50% of TotalEnergies Marketing Egypt LLC for around 186 million USD, in addition to, an earn-out of 17.3 million USD.
The takeover is expected to be completed in the first quarter (Q1) of 2023. The deal is pending customary regulatory approvals as well as fulfillment of other conditions. The acquisition is projected to accelerate ADNOC Distribution’s international growth after its regional expansion in Saudi Arabia in 2018. It is worth noting that Egypt’s fuel retail market is highly attractive with exciting potential for future growth. Due to its young and expanding population, alongside a series of progressive economic reforms, Egypt has recorded positive GDP growth with a strong outlook. (Hapi Journal)
Moreover, B Investments Holding (BINV), along with an affiliated company, has received a transfer notice from TotalEnergies Marketing Afrique (TEMA), in which TEMA stated it received a “bona fide written offer” from Abu Dhabi’s ADNOC Distribution.
TEMA has informed B Investments and its affiliate that ADNOC seeks to buy 34.62% of TEMA’s share in TotalEnergies Marketing Egypt (TE), in addition to, the stake owned by B Investments. It is worth noting that B Investments holds a stake of 6.38% in TE, and its stake together with its affiliate in TE amounts to 9%. On July 28th, the Emirati fuel distributor giant ADNOC Distribution reached an agreement with TEMA to acquire 50% of TE for around 186 million USD, in addition to, an earn-out of 17.3 million USD. (Hapi Journal)
Egyptian ride-hailing giant Swvl Holdings has canceled an acquisition transaction of the B2B transport services provider Zeelo.
The deal has been terminated upon the decision of both companies due to financial market volatility. It is worth noting that the acquisition deal was previously announced on April 28th and was expected to be finalized on May 24th. Swvl Global, a subsidiary of Swvl, provided Zeelo with 5 million USD in funding in a convertible promissory note. Following the cancellation of the deal, the note was terminated and Swvl Global forgave the 5 million USD balance. (EGX)
The non-banking financial services provider GlobalCorp is considering the issuance of EGP 1.5 billion securitized bonds in three tranches by the end of 2022.
Proceeds from the issuance will be used to expand the company’s business volume, Samir revealed, adding that the selection of a financial advisor for the issuance is underway. The top executive noted that the accumulated portfolio of the company since incorporation exceeded around 12 billion EGP. GlobalCorp is seeking to pump 2.5 billion EGP worth of investments into around 20 contracts during the second half (H1) of 2022. (Al-Borsa News)
The Egyptian Group for Multipurpose Terminals (EGMPT) has signed a 15-year Terminal Operating Agreement with CMATCH and a five-year Terminal Service Agreement with France’s container transportation and shipping company CMA CGM.
The first agreement has been signed for the operation of the multi-purpose Trans Misr Terminal (TMT), owned by EGMPT in Alexandria, by guaranteeing adherence to the international standards of terminal operations and maintaining the efficiency of the Egyptian side’s equipment. Meanwhile, the second agreement aims to provide shipping and unloading services for containers at the TMT, including a group of clauses regulating the commitments of each party, which ensures the provision of services at the highest levels of technical performance. (Arab Finance)
The Financial Regulatory Authority (FRA) Cairo for Investment and Real Estate Development (CIRA) has approved a three-year securitization program worth 2 billion EGP, under which the first issuance amounts to 800 million EGP.
CIRA has purchased the necessary land plots for the planned expansions and is seeking various sources of finance for the capital expenditure plan. Moreover, HC expected the average annual capital expenditure to reach 940 million EGP throughout the next five years. CIRA is also planning to allocate capital expenditure of 4.55 billion EGP for the period from 2022 to 2026. (Arab Finance)
Egyptian Financial and Industrial (EFIC) reported a 562% year-on-year (YoY) hike in standalone net profit after tax for the first half (H1) of 2022.
The company recorded a net profit after tax of 247.425 million EGP in H1 2022, compared to 37.394 million EGP in the same period of 2021. Revenues amounted to 847.520 million EGP in the six-month period ended June 30th, surging by 114% YoY from 396.11 million EGP. In the first quarter (Q1) of 2020, the company recorded a standalone net profit after tax of 98.364 million EGP in Q1 2022, compared to a profit of 20.296 million EGP in Q1 2021. (EGX)
Moving to our economics and markets talks, Sales of passenger cars in the Egyptian market fell by 8.3% year-on-year (YoY) to 92,621 cars during the first half (H1) of 2022.
In June alone, passenger car sales tumbled by 35.2% to 12,346 from 19,054 during the same month a year earlier. On a quarterly basis, sales of passenger cars declined by 26.2% to 37,089 in the second quarter (Q2) of 2022 from 60,288 in Q2 2021. (Amwal Al-Ghad)