Archive for the 'Egypt' Category
February 28th, 2011 by Tom Minney
The Egyptian Exchange (www.egyptse.com) is set to reopen tomorrow (1 March) after it closed on 27 Jan. in the popular uprising that saw President Hosni Mubarak resign on 11 Feb. It was due to open earlier, but delayed because strikes were devastating the banks on which it relies for clearing and settlement. Some selling is anticipated.
An announcement by Egypt’s Cabinet yesterday (27 Feb.) confirmed the opening and also that Ziad Bahaa El-Din, chairman of Egypt’s Financial Supervisory Authority, resigned yesterday. On 19 Feb. the FSA had announced that new trading rules will be in place to prevent exchange volatility. Daily share price movement will be limited to 1%, trading sessions are cut from 4 to 3 hours, and the cash reserve requirement for brokerages is cut from 10% to 5% of their capital.
According to a report on Bloomberg, market participants expect selling pressure. Walaa Hazem, who helps manage $1 billion in Egyptian equities and fixed income as vice president for asset management at HC Securities & Investment in Cairo, is quoted as saying: “The market should have opened much earlier. Locking people’s money is something very bad. This will put selling pressure on the market, in addition to the regional turmoil and the economic slowdown.”
Shares in the Middle East and worldwide continue under pressure as unrest sweeps across North Africa and the Middle East including Bahrain, Algeria, Yemen, Iraq, Oman, Morocco and Jordan. High oil prices may dampen hopes for a global economic recovery. According to Bloomberg today: “Saudi Arabia’s benchmark Tadawul All Share Index plunged 5% yesterday, to the lowest since June 6, on concern soaring oil prices, triggered by the Libyan clashes, may stall the global economic recovery. However, share indices moved slightly upwards in Sunday trading in Kuwait, Abu Dhabi and Jordan.
The Bloomberg GCC200 Index of companies in the Persian Gulf has tumbled 9.5% since Jan. 27, the last day shares in Egypt traded. Global depository receipts of Orascom Construction Industries also slid.”
Egypt’s unrest and resulting impact on tourism, business and investment could slow economic growth this fiscal year to about 4%, down from an earlier estimate of 6%, according to Finance Minister Samir Radwan.
However, many investors see there can be better outcomes from long-term stability and democracy. Global Depository Receipts of Orascom Construction Industries, Egypt’s biggest publicly traded builder, rose 3% in London on 25 Feb, so they have only fallen by 10% since 27 Jan. Orascom Telecom Holding SAE gained 0.9% in London since 27 Jan, says Bloomberg. It also quotes Walaa Hazem saying that some industries, including food and telecommunications, will be in a “better position” than others when the market opens. “People are still going to eat and talk on the telephone,” he said, singling out fixed-line operator Telecom Egypt. He says that key banks “won’t have good growth stories but they have strong balance sheets.”
Ahmed Ezz (chairman of Egypt’s biggest producer of steel) and Yasseen Mansour, (chief executive officer of Cairo-based real-estate developer Palm Hills Development SAE) who were both seen as close to former president Mubarak, are among executives referred by Public Prosecutors for trial on corruption charges. Both companies said their operations are run independently of the chairmen.
Bond yields are also higher than before the unrest, although there have been fluctuations. According to Bloomberg data, the yield on Egypt’s 5.75% dollar bond due 2020 has dropped 29 basis points to 6.92% percent after reaching a high of 7.21% on 31 January, compared to 5.16% at the start of the year. Yields on treasury bills have reached 2-year highs since 11Feb.
On 27 Feb, Egypt sold 2 billion pounds ($340 million) in 91-day bills and LE 3 bn in 273-day notes in an auction, falling short of its target of raising LE3.5 bn.
Bloomberg quotes Moustafa Assal, MD of Cairo-based Beltone Financial’s fixed income unit: “The high yields, especially on the longer-term notes, are a big concern because the Government is becoming unable to cover its intended issuances. They will not come down unless there’s political stability.”
Bloomberg also quotes Amro Halwani, senior equity sales trader at Shuaa Capital PSC in Saudi Arabia: “With no clear end to the geo-political turmoil in the region, local investors are erring on the side of caution. The regional uncertainty, with Libya this week’s reason to sell, has pushed fundamentals out of the picture. The surge in oil is an ongoing threat of a possible derailing in the global economic recovery, and gave investors a reason to move away from riskier assets.”
February 21st, 2011 by Tom Minney
A leading African private equity firm, Citadel Capital (www.citadelcapital.com) based in Cairo, says change in Egypt in brings “very compelling opportunities for long-term private equity investors in Egypt and beyond.” However it warned in a press release on 3 February: “The situation on the ground in Egypt remains fluid. Events of the past week may have a short-term impact on both our investment and divestiture plans.”
Citadel Capital (CCAP.CA on the Egyptian Exchange www.egyptse.com), has US$ 8.6 billion in investments under control, according to its website. It also has offices in Algeria. It confirmed that none of the staff in Egypt or 13 other nations where it invests had come to harm during the disturbances. It was due to resume full operations in Egypt from 6 February and operations in other nations were not interrupted.
According to the release: “In the long term, however, Citadel Capital believes that this difficult period will result in a more stable and faster-growing Egypt and region. These opportunities are underpinned by a large, young and increasingly talented workforce; by cost-factor advantages in energy and labor; by an abundance of raw materials; by proximity to major global export markets; and, not least, by consumer markets that include some 400 million Arabs and more than 1 billion Africans.
“We hope, going forward, that these opportunities will be further underpinned by greater democracy and accelerated reforms.
The company builds regional platforms in select industries through acquisitions, turnarounds, and greenfields investments executed via Opportunity-Specific Funds. It has 19 OSFs which control “platform companies” with investments worth more than US$ 8.6 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. According to its website, Citadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million) since 2004, more than any other private equity firm in the region. It is the largest private equity firm in Africa by private equity assets under management (2005-2010, as ranked by Private Equity International).
February 16th, 2011 by Tom Minney
The Egyptian Exchange (EGX – www.egyptse.com) has again postponed its reopening and says it will only open when the strike-hit banking system gets back to normal. Dates mentioned now include Sunday (20 Feb) or Tuesday next week. The bourse closed on 27 Jan after a 16% fall in its EGX30 Index, including a dramatic 11% fall on the last day.
The exchange will wait 2 days after the banks open, according to media reports. The banks will not open until after the weekly Friday Muslim prayer day.
EGX Chairman Khaled Seyam told Bloomberg today (16 Feb): “Our market is directly tied to the banks because they are our custodians… We need to make sure they are back to normal operations because we cannot afford to start and stop again.”
The exchange has also outlined steps to limit potential losses from investors who are may be rushing to get funds out. These could include rules to halt trading for 30 minutes of the EGX 100 Index (which closed at an eight-month low of 884.79 on 27 Jan) rises or falls more than 5%. The exchange will shut for the day if the EGX 100 moves more than 10% percent, he said.
Bloomberg also reports that representatives of private investors were meeting exchange officials and some had asked for suspension of trading of 13 companies associated with the regime of former President Hosni Mubarak. These include Ezz Steel, Egypt’s biggest producer of the metal, Ezz Aldekhela Steel Co. and Ezz Ceramics & Porcelain Tiles Co., affiliated with Ahmed Ezz, a member of Mubarak’s former ruling party whom the public prosecutor is investigating for corruption. Some investors called for more regulation to prevent insider trading and improve disclosure and for new management at the Egyptian Financial Services Authority which regulates the securities market.
Shares in the Market Vectors ETF have climbed 12% since 27 Jan, but dipped 0.7% on 16 Feb, although the fund closed to new money after investors sought to pour in funds on 28 Jan. Global depositary receipts (GDRs) of Orascom Construction Industries (Egypt’s biggest publicly traded builder) and Commercial International Bank Egypt SAE (the biggest publicly traded bank), both slid more than 4% on trade today on the London Stock Exchange.
Egypt is also seeking to issue EGP 4.5 bn ($765 mn) in 91- and 273-day T-bills as scheduled on 20 Feb, while EGP 5.5 bn ($935 mn) Egyptian pounds in 182- and 364-day bills has been postponed from 17 to 21 Feb. No foreigners tendered for a record EGP 15 bn issue of T-bills on 7 Feb, but local banks oversubscribed 1.35 times.
Selling pressure seems to have built up with the market closure. Associated Press quotes Wael Ziada, head of Egypt research at the Cairo-based investment bank EFG-Hermes: “The market is going to decline. There is no doubt that there is some pressure, and it’s been building up ever since the market has been closed.”
Tens of thousands of Egyptians are on strike over very low salaries, and poverty. World food prices are at record highs. The cost of protests and slowdowns in the economy is huge, including major disruption to tourism. However most large businesses said operations were almost back to normal from 7 Feb.
February 14th, 2011 by Tom Minney
The Egyptian Exchange (www.egyptse.com) has decided to postpone its reopening until Wednesday 16 February. The stock exchange, based in Cairo, closed on 27 Jan after the main EGX 30 Index fell 16% in a week, and was due to open again yesterday (Sunday 13 Feb). The decision to delay the opening comes on the back of talks with regulators, stockbrokers and the Misr for Central Clearing, Depository and Registry (MCDR, www.mcsd.com.eg).
When the exchange reopens steps are expected to be in place to stop precipitous falls and price fluctuations. Many foreigners had sought to take out money and it is not yet clear how sentiment will shape up following the resignation of former President Hosni Mubarak on 11 Feb and the army take over pending democratic elections scheduled for six months time. The EGX says it is working on technical requirements needed to start trading as well as procedures to be used as soon as the trading begins. Telecommunications and Internet services may also have been disrupted.
The Wall Street Journal reported yesterday (13 Feb) that late yesterday the Central Bank of Egypt (www.cbe.org.eg) said that banks in Egypt will close on Monday and Tuesday due to workers’ strikes and the birth of Prophet Mohammad. Its emailed statement reads: “Amidst the strikes of worker in some authorities, including public banks … the central bank has decided to close banks on Monday Feb. 14 and Tuesday Feb. 15 on the occasion” of Prophet Mohammad’s birth.
Meanwhile schools and universities were reported to be reopening over the past weekend and many industries had said they were back and working close to normal by 7 Feb.
February 3rd, 2011 by Tom Minney
Bulls seem to be waiting for a positive outcome from widespread pro-democracy unrest in Egypt, one of Africa’s biggest stock markets. The Egyptian Exchange (EGX, www.egyptse.com, formerly known as the Cairo and Alexandria Stock Exchange), has been closed for several days as unrest intensified. Investors seem to believe that the outcome of political change will be good for asset values and prices have climbed for depository receipts of Egyptian companies and an Egypt exchange-traded fund available internationally.
Leading emerging markets investor Mark Mobius has told an interviewer on Citywire on 31 Jan that a change to the regime of President Hosni Mubarak could provide a “tremendous boost not only to Egypt but to the Middle East”. He added: “We’re looking to buy in at the right price”. However, he is waiting for the stock market to drop another 10%-15% on the political instability.
Mobius is reported to be excited by the potential of Egypt’s young well-educated population, leading the uprising: “Let these guys loose and the place could go wild. I’m optimistic.” His investments in Egypt include banks, telecoms and construction companies.
Popular protests began on 25 January and news reports say 1 million Egyptians answered calls to join demonstrations in major centres on 1 February. Today there are reports of clashes with supporters of Mubarak, although the army has declared it will not fire on peaceful protestors and has moved to keep the sides apart. The UN estimates that as many as 300 people may have died.
Banks and the EGX are closed for a fifth day today (3 Feb) and most of the rest of the economy has been closed amongst unprecedented peaceful and popular protest. Banks are expecting to open on 6 February and the stock exchange possibly the next day, according to the Financial Times.
The EGX 30 Index fell by 16% last week before the market closed, reports Bloomberg news, including 11% last Thursday (27 Jan) when the market closed. Debt rating agency Moody’s cut its rating on sovereign debt from Ba1 to Ba2. It is the second agency to downgrade i the light of concerns grow over public finances.
However, the Financial Times reports that investors are betting the market will rebound. An exchange-traded fund, the Market Vectors Egypt Index ETF, run by Van Eck, has seen its price climbing and stopped buy orders on Monday. However, it says money had been flowing in, and more than doubled its existing $11.6 million assets with a $12 mln cash inflow last Friday, pushing up its price by 10% and leaving a big 12.5% premium to the underlying assets, although valuing these will not be possible until the market reopens. Bloomberg says today the premium is 11%, the second largest of 1,400 ETFs it tracks.
The FT quotes Ed Lopez, director of marketing at Van Eck as saying sell orders are still possible: “We did not want to put any gates up to prevent investors from withdrawing their cash if they wanted to.” Creation and redemption orders are done for large institutional investors or market makers and “Individual investors have been able to buy or sell the Egypt ETF in the secondary market as they want,” said Mr Lopez.
Egyptian assets listed in London and Canada have are also climbed, including Orascom Construction Industries, Orascom Telecom Holding, Centamin Egypt (gold mining), and Transglobe Energy. According to Bloomberg today, London-traded global depositary receipts of Orascom Construction Industries SAE, the country’s biggest publicly traded building company, gained 16% from a 1.5-year low on 31 Jan and Egypt’s 10-year dollar bonds rallied 1.1% this week, down from yesterday’s figure.
December 20th, 2010 by Tom Minney
Two African stock exchanges are among leaders in requesting companies to report on Environmental, Social and Governance (ESG) issues, including South Africa’s JSE Ltd (www.jse.co.za) which this year became the first exchange in the world to require listed companies to move towards integrated reporting which includes ESG reports along with profit figures, as reported on this blog in June. The Egyptian Exchange (www.egyptse.com), Brazil, China, Indonesia and Malaysia are other exchanges discussing with the United Nations Principles for Responsible Investment initiative (www.unpri.org) through its sustainable stock exchanges dialogue.
According to an article in the Financial Times (www.ft.com) today (20 Dec), many investors are still slow to understand how to value the ESG reporting companies are giving them. Both Unilever and Rio Tinto have complained that investors are still only interested in short-term performance. Investors’ reasons for not taking interest could include because their holdings are very short-term, because they only work quantitatively, or because they believe that ESG is about imposing one’s own politics on the investee company. The article quotes John Wilcox, of corporate governance consultancy Sodali (www.sodali.com), as saying: “In the US, in particular, ESG is very politicized. Wall Street is not that comfortable with non-numerical issues, so it tends to focus on the financial results. Because these are half-yearly or quarterly, it tends to reinforce short-termism. Yet long-term success is a function of many things that do not lend themselves to quantification such as culture, long-term planning, environmental and social responsibility, human rights and even human resources issues.”
In general, it is more visible when investors penalize companies for poor ESG, such as when Deepwater Horizon, a BP oil rig, exploded. Some investors in India’s mining group Vedanta have publicly sold out their shares over concerns about the company’s human rights record (see for instance this article in the Guardian newspaper).
Wilcox is quoted that it is the wrong question if investors ask whether good corporate governance increases economic performance: “The real question is: does poor performance on governance increase risk – and the answer is clearly yes.”
However, there are cases where good governance is rewarded by investors. The example given is Brazil’s Novo Mercado of the Bovespa exchange (www.bmfbovespa.com.br), which demands higher governance standards than the main market. Wilcox says “Companies voluntarily agreed to higher governance standards to list on a more exclusive exchange on the basis that this would attract more capital. It worked extraordinarily well and is the best example we have that good governance is equted with better performance – companies listed on the Novo Mercado have tended to outperform their peers.”
In addition to ESG reporting to investors, there is also a requirement to be accountable where companies are stepping up sustainable procurement policies – the article cites governments, Tesco and Wal-Mart as examples.
Stock exchange and fund management investors are starting to believe that if they take more notice of ESG reporting, they will have a better understanding of how the company is run. Some funds believe there is a way to quantify ESG and Risk reporting as a contributor to excess returns, future competitiveness and long-term increase in relative value.
October 7th, 2010 by Tom Minney
Renaissance Capital (www.rencap.com), the Russian emerging-markets bank with operations in Africa, plans to expand next year into Egypt and at least 3 other African countries, according to a 5 October interview published on Bloomberg. Rencap says on its website that its core businesses areas are Mergers & Acquisitions, equity and debt capital markets, securities sales and trading, research, and derivatives. It says it is building “market-leading practices across emerging markets globally in metals & mining, oil & gas and agriculture.”.
Clifford Sacks, CEO of the South African unit and head of Pan-African Equities, told Bloomberg from Johannesburg the bank may buy or start a brokerage in Egypt that would also cover Morocco and Tunisia. Hasnen Varawalla, global head of corporate finance, added that it also plans to move into Angola, Uganda and Rwanda. Rencap is bsed in Moscow, and currently operates in African nations including Ghana, Kenya, Nigeria, South Africa Zambia and Zimbabwe. Bloomberg quotes Varawalla: “Each of these countries will see a huge development in their capital markets. We are looking to expand into another 5 or 6 countries in Africa.”
The bank is half-owned by billionaire Mikhail Prokhorov. It started its African business in 2007. According to Bloomberg last year it participated in 24 transactions across 13 African countries, including the $955 million sale of Central African Mining & Exploration Co. to Eurasian Natural Resources Corp. Africa accounts for a quarter of RenCap’s investment-banking business. Varawalla told Bloomberg that Non-Russian activities will generate more than 50% of revenue within 2 to 3 years.
In July, it paid ZAR207 million (then US$27.3 million) to acquire BJM Securities, the brokerage business of South Africa’s Barnard Jacobs Mellet (BJM) Group. A press release by Rencap describes BJM: “Founded in 1985, BJM Securities is the leading independent full service broker-dealer in South Africa. The firm is known for its outstanding research franchise, having been ranked No.1 in South African research surveys.
The Firm entered South Africa in February 2010 and appointed Clifford Sacks. The press release quotes him: “The combination of a leading independent brokerage in South Africa with award-winning research franchise and Renaissance Capital’s unparalleled expertise in capital markets and M&A, complemented by our unique access to global emerging markets creates a powerful platform across research, sales and trading in Africa’s largest economy.”
July 15th, 2010 by Tom Minney
Leading African private equity house Citadel Capital (www.citadelcapital.com) has this week announced 2 cement deals. Citadel was recently named “African Business of the Year” at a gala awards ceremony organized by “African Business” magazine. It is based in Cairo and listed on the Egyptian Stock Exchange (ticker CCAP.CA). It has been expanding into Africa and, according to a press release, has US$ 8.3 billion in investments covering 15 industries and spanning 14 countries.
On 15 July Citadel announced that ASEC Engineering and Management, a portfolio company of its investment platform company ASEC Holding, has signed a 3-year renewable contract to provide technical management services to Alsalam Cement Production Company (ACPC) to manage a cement plant near Atbara, Sudan.
The Atbara plant produces clinker, which is then ground with gypsum to make cement. The plant has a production capacity of approximately 2,000 tons of clinker per day. ASEC Engineering will receive a fixed fee for every ton of clinker produced in return for a guaranteed minimum annual production and a pledge to reduce the plant’s consumption of electrical power and fuel. ACPC was established in 2003 and is owned by the Ahmad Osman Abdulsalam Group. The plant near Atbara is currently ACPC’s sole operation, although it is in initial planning stages for the construction of a second plant.
According to a press release ASEC Engineering Chief Executive Officer Mohamed Galal Yakout says: “We look forward to developing a strategy that optimizes the efficiency of Alsalam’s production process.”
ASEC Engineering has long provided market-leading management and consultancy services in Egypt, where in 2009 the company managed 7 plants with a total production capacity of about 15 million tons per annum (MTPA), or more than 30% of total cement production capacity in the country. In 2010, the company has already delivered 3 major cement plant consultancy projects. In addition to its expansion into Sudan, ASEC Engineering played a vital role in the turnaround of the Zahana cement plant in Algeria and is currently exploring opportunities in other regional markets.
In related news, ASEC Engineering will also be responsible for the technical management of ASEC Cement’s nearby Takamol plant, which is in advanced stages of operational testing. Scheduled to open later this month, the plant will have a production capacity of 1.45 MTPA of clinker and 1.6 MTPA of cement, reducing Sudan’s national cement deficit of 3 MTPA by more than half.
Another subsidiary of ASEC Holding, called ASEC for Manufacturing and Industrial Projects (ARESCO), announced on 12 July that it has signed a US$ 130 million contract to construct a new cement plant for the Building Materials Industry Company (BMIC) in the Upper Egyptian governorate of Assiut. ARESCO is a turnkey contractor serving the cement, energy, petrochemicals, petroleum and general industrial sectors. According to the prss release, ARESCO has “state-of-the-art engineering, steel fabrication and construction units that fabricate quality products including boilers, cement mills, preheaters, tanks, condensers and pressure vessels. With over 4,000 employees, ARESCO is a rapidly growing business that has undertaken turnkey projects in Egypt, Iraq, Jordan, Qatar, Sudan, Algeria and Libya.”
ARESCO is to provide all the civil, electrical and mechanical works for the 1.5 MTPA cement plant, which is projected to be complete in 22 months. The company will also carry out all steel fabrication as well as testing and commissioning for BMIC on a turnkey lump sum basis.
Tarek Salah, a Managing Director at Citadel Capital, says in the press release: “The integration of ARESCO’s in-house design and manufacturing capabilities — which include its own workshops and fleet of cranes — have made the company a strong competitor in both the cement and general industrial sectors.”
Citadel Capital is also a lead investor in Rift Valley Railways which holds a 25-year concession to operate the Kenya-Uganda railway.
June 30th, 2010 by Tom Minney
Private equity firm Citadel Capital has won the title of “African Business of the Year” at a gala awards ceremony organized by “African Business” magazine (www.africasia.com/africanbusiness) in London on 21 June. Other finalists included South Africa’s De Beers, Kenya’s Safaricom, pan-African bank Ecobank and Kenya’s Bidco Oil Refineries.
Citadel (www.citadelcapital.com) is based in Cairo and listed on the Egyptian Stock Exchange (ticker CCAP.CA). It has been expanding into Africa.
According to a press release, the company has US$ 8.3 billion in investments covering 15 industries and spanning 14 countries through (see Strategy below). It is independently ranked by Private Equity International (www.peimedia.com) as the continent’s largest private equity firm in terms of assets under management (2005-2010). Since its founding in 2004, Citadel has generated US$ 2.5 billion in cash returns for shareholders and co-investors on investments of US$ 650 million.
Citadel Capital Chairman and Founder Dr. Ahmed Heikal says: “It is truly an honour to have been chosen as African Business of the Year from such a distinguished group of nominees. Founded little more than 5 years ago with an initial investment of just US$400,000, we are very proud of the growth that we have achieved. Citadel Capital continues to pursue investment opportunities throughout the continent that will allow us to transform promising national companies into regional champions.”
The 2010 African Business Awards were organized by IC Publications (publishers of Africa Business) and the Commonwealth Business Council. They provide a platform to celebrate excellence and best practices in African business, recognizing those who have driven Africa’s rapidly transforming economy. This year’s awards ceremony included more than 500 attendees including African ministers, senior government and business officials and diplomats.
The African Business of the Year award is given annually to a company that has demonstrated outstanding financial performance and significant development of new market segments, together with “innovative working techniques and employment of staff from the communities in which it operates.” Winners must have high standards of good corporate citizenship and have contributed significantly to changing the perceptions of Africa in global markets.
“Citadel Capital seeks out national companies with the potential to become regional champions, then deploys the human and monetary capital needed to make that transformation happen,” said Citadel Capital Managing Director and Co-Founder Hisham El-Khazindar. “Over the past 12 months, the firm has closed a significant number of transactions in what we believe will be an excellent vintage year for private equity investing.”
In reaching its decision, the awards committee took note of several recent developments by Citadel, including
• acquiring a controlling stake in Rift Valley Railways of Kenya and Uganda,
• building an environmentally friendly river transportation network stretching from the Mediterranean port of Alexandria to southern Sudan,
• the construction of Sudan’s most technologically advanced and environmentally friendly cement plant,
• the acquisition of the nuclei of a solid waste management platform, and
• substantial fundraising progress on its MENA and Africa Joint Investment Funds.
Omar Ben Yedder, Associate Group Publisher of African Business magazine, the organiser of the event, said: “The Awards are even more significant this year, as it takes place during the World Cup season, and thus resonates with the new optimism of Africa as a continent capable of realising the opportunities that abound there.”
The African Business of the Year award follows Citadel Capital’s earlier 2010 achievements, including Infrastructure Investor magazine’s African Infrastructure Deal of the Year and recognition by emeaFinance as Africa’s Best Private Equity House.
Strategy (from the company website) :
“Citadel Capital’s strategy is to acquire or create national companies that can serve as platforms for regional expansion in specific industries. For each deal, the firm raises an Opportunity-Specific Fund (OSF) to control a single platform investment. To date, Citadel Capital has raised 18 OSFs that control Platform Companies in 15 industries with investments worth more than US$ 8.3 billion. The firm has long pursued an incremental approach to investment that is serving it well during the current economic climate.
Citadel Capital is a control investor and is majority owned by its senior management and staff. It is also a principal investor in its own transactions, with equity of more than US$ 735 million committed to its own deals. While the firm is primarily focused on opportunities in the Middle East and Africa, it has a strong interest in proximal African nations. Going forward, Citadel Capital plans to open offices in South Sudan and Ethiopia to support its growing investment presence in those regions.
The firm focuses on opportunities supported by two primary themes:
Natural Advantages: Opportunities that arise from the Middle East and Africa region’s numerous advantages, including lower labor, raw material and energy costs, as well as its favorable geographic location and climate.
Inefficiencies: Markets that have suffered from a lack of private investment, where the existing participants lack the necessary scale and sophistication to compete effectively, or where state control and subsidies have left a legacy of inefficiencies.
Among the industries on which the firm currently focuses are cement, mining, energy, food transportation and logistics and metallurgy.
Depending on the investment cycle, Citadel Capital is flexible in regards to the entry point it uses to pursue deals and is open to consolidation plays / industry roll-ups, leveraged buyouts, distressed deals and even greenfield investments.”
June 7th, 2010 by Tom Minney
The brand new Nile Stock Exchange (NILEX – http://www.nilex.com.eg/en/px) saw strong trading appetite on 3 June, its first day of trading. NILEX is an initiative of the Egyptian Exchange (EGX – www.egyptse.com) and aims to support growing medium and small enterprises in the Middle East and North Africa region.
The Chairman of EGX, Maged Shawky, said that 4 companies were traded on 3 June for a total trading volume of 1.4 million shares, worth LE 10 million (US$1.8 mln). Shares had launched at par value and prices registered significant increases in the first trading session from this.
The biggest value traded was in El-Barbary Investment Group (BIG), recording LE 7 mln ($1.2 mln), followed by El Bader Plastic, registering a trading value of LE 2.6 mln.
The NILEX trading runs daily from 11am-noon. Brokerage firms operating in the main market can place Bids and Asks. The EGX supervises the trading in NILEX and listed companies must meet the same disclosure rules as companies on the main market. NILEX had taken 4 years of research, planning and preparation and had its first listings approved in mid-2008.
A total of 10 companies are listed on NILEX, covering industry, information technology, retail, mining and the agriculture, chemicals and medical. They are: El Badr Plastic, Masria Card, TN Holdings for Investment, Kato Agriculture Development Co., Utopia Real Estate Investment and Tourism, Ameco Medical Industries, International Company for Fertilizers and Chemicals, Al Oroba Trading Mining and Supplying, AL Moasher for Programming and Information Dissemination and El-Barbary Investment Group (B.I.G). The last two were only allowed to join in the last few days.
Trading will follow an auction system style like the discovery session applied on the main market. Brokers can enter investors’ bid and ask offers any time during the last ten minutes in the session, and the transaction will be completed based on the price that ensures the highest volume traded. If more than one price matches the criteria, some other criteria is taken to choose from among the prices. The price which ensures that the least amount will be left unexecuted is to be chosen. If 2 prices are equated, in this case the average of the two prices is to be chosen. After the end of the session the orders that match the price are executed (from the orders given during the session). This criterion has been chosen due to the small size of these companies, as the auction system provides a better mechanism for trading and pricing these companies.
Dr. Mohamed Mustafa Omran, EGX Vice Chairman, had been appointed chairman of the NILEX Advisory Committee in terms of a decree issued by Dr. Mahmoud Mohieldin, the Minister of Investment.