Morning Round-Up

The most important business news from over the weekend and last week

Egypt’s new government to be announced Thursday, state media reports  – another box ticked for investors, now for the constitution…

Egypt Central bank keeps rates unchanged 

Yields fall on Egyptian treasury bills : Treasury yields have fallen from near-record highs in June after the central bank cut the local currency reserve requirement ratio for banks to 10 percent freeing more cash in the market and started selling repurchase agreements, a type of short-term borrowing for dealers in government securities (another instrument for the government to sell and make money).  The central bank has gone haywire selling treasury bills and bonds to domestic banks to try to plug its budget deficit.

EFG Hermes, the biggest investment bank in Egypt, to hold EGM “very soon” on deal with Qatari firm Qinvest: my story for free from Zawya Dow Jones

Some background on this deal: This looked like the most exciting business development for Egypt and the Middle East in a longtime, when a rival bidder, Planet Investment Banking (which has the backing of Naguib Sawiris and other rich Gulf businessmen), said it wanted to buy 100% of EFG Hermes pipping Qinvest to the post.  Planet IB appeared as if it wanted to conduct a hostile takeover, buying up EFG Hermes against the will of its board, but it turned out that the Planet’s investors would only participate if it got due diligence, which doesn’t really make it a hostile takeover.  Lo and behold, EFG Hermes wouldn’t open their books for Planet leaving the quite exciting investment outfit out in the cold.

Now the regulator has asked that EFG Hermes provide more information and details behind its deal with Qinvest to shareholders in another surprise turn in this deal.  EFG Hermes insists the deal will be done by the third quarter of this year.   Planet’s CEO Ahmed El Houssieny also sees no future with EFG Hermes unless due diligence is allowed. He told me: “as long as EFG’s management is adamant not to allow us to conduct due diligence then our position remains unchanged”.   Watch this space.

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