SWVL makes history as largest African unicorn listed in the U.S. at debut!👏🦄

Last Week’s Market Summary

EGX 30: 10,742 (+0.9%) weekly change, YTD (-1.0%

Traded Value 1W Avg: EGP 429M, (-1.2%) 90D Avg. 

EGP:USD: 15.70 (+0.1%) weekly change

Local Pick-up

SWVL makes history, valued at $1.5billion!🏆

Egypt-born ride-sharing startup SWVL is going public in the U.S. after it merged with special purpose acquisition company (SPAC) Queen’s Gambit Growth Capital. A deal that will see SWVL’s valuation soar to a whopping $1.5bn!😲 The company is set to become the largest African unicorn debut in any U.S-listed exchange.

Founded in 2017, SWVL has since expanded out of Egypt and currently has operations in Saudi Arabia, Kenya, Jordan, and Pakistan. The company plans to further expand to 20 countries by 2025.

So, who’s in and who’s out of EGX30?🤔

The EGX announced the results of their bi-yearly rebalancing of the EGX30 last week. The new EGX30 inclusion criteria saw seven companies exit the index and six companies enter. Why are the substitutions uneven, you ask? OFH was listed on the EGX30 immediately after its demerger from OIH last February, increasing the index constituents from 30 to 31 companies.

The real estate sector saw SODIC (OCDI), and Emaar (EMFD) exit the index. The financial services sector saw Orascom Financial Holding (OFH), Orascom Investment Holding (OIH), Export Development Bank (EXPA), and CI Capital (CICH) exit the index. Edita Food Industries (EFID) concluded the list of exits.

The six new EGX30 entrants are Raya Holding (RAYA), Speed Medical (SPMD), RAMEDA (RMDA), Egyptian for Tourism Resorts (EGTS), Cairo for Investment & Real Estate Development (CIRA), and Misr Fertilizers Production Company (MFPC).

The latest rebalancing aims to stabilize the index and increase its attractiveness to investors. The rebalancing should also better distribute the relative company weights in the index to be in line with international best practices, according to EGX chairman Mohamed Farid. (EGX)

Islamic banks stocks rise after parliament approves Sukuk law🏦

Islamic bank’s stocks were on the rise last week following parliament approval of new Sukuk law.

Abu Dhabi Islamic Bank (ADIB) was up 6.3% last week, while both Faisal Islamic Bank of Egypt’s EGP & U.S. Dollar stocks rose by 4.77% and 8.23%, respectively. It’s worth noting that other banks’ stocks tumbled last week, including Commercial International Bank (COMI), National Bank of Kuwait (NBKE), Qatar National Bank (QNBA), and Export Development Bank of Egypt (EXPA).

Egypt is entering the $2.7trn Islamic finance market for the first time. Sukuk should attract investors interested in investments compliant with Islamic Shariah, and act as a new means to finance the state’s budget deficit and diversify funding sources. (Al Ahram)

Other Local Headlines

  • CIB submits request to list EGP 4.9bn capital raise shares
  • Moody’s keeps Egypt’s credit rating at “B2” with Stable Outlook
  • Compass raises RAMEDA stakes to 15.4%
  • National Bank of Kuwait (NBKE) considers delisting from EGX
  • Nasr Company for Civil Works get FRA approval for capital raise

Global Pick-up

Robinhood IPOs at $31.8 billion valuation💸

Robinhood’s IPO took place on Thursday, July 29th, in one of the most hotly anticipated stock listings of the year.

The company that set out to “democratize finance for all” has gone public at a valuation of $31.8billion ($38/share). Robinhood’s stock started trading under the ticker ‘HOOD’. In one of the biggest-ever retail allocations in an IPO, Robinhood set aside as much as 35% for Robinhood traders.

Robinhood also chose to live-stream its investor roadshow – a rather unorthodox decision. Buying shares of a company before its IPO debut has traditionally been institution-dominated, but Robinhood has allowed its users to buy shares at the IPO price through its app – it’s what dreams are made of!😍

Word of the week – SPAC

SPAC stands for Special Purpose Acquisition Company, also known as “Blank check companies”, which is a company with no commercial operations. SPACs are formed by investors or sponsors to raise capital through an IPO (initial public offering) for the purpose of acquiring an existing company. SPACs became more attractive recently as a faster and simpler methodology to get companies public. Some companies are choosing to skip the IPO process by merging with SPACs instead.

Book of the month- Black Swan

Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb focuses on the effect of uncertainty, or as he describes it “The Black Swan.” Taleb argues that an event may be seen as a Black Swan from one point of view but not another. Taleb covers areas ranging from psychology, philosophy, business, and science to get his message across in this eye-opening book.

Earnings Call:

  • Egypt’s Delta Sugar reports net profit EGP 343.9M in H1 2021, a 560% YoY increase.
  • Alexandria Containers posts net profit EGP 1.4B, a 6% YoY decrease.
  • South Cairo Mills reported net losses of EGP 54.2M, up by 57.8% YoY.
  • Alexandria Flour Mills posted net profits of EGP 17.578M, a 117.5% increase YoY.