Thndr Claps - Egypt's economic progress and Apple's WWDC

Egypt Claps

Sources speaking to CNBC Arabia stated that the government is preparing to sell a stake in ELAB, Egyptian Drilling Company, & is reopening negotiations over Qatar’s sovereign fund potential acquisition of Vodafone Egypt, with the latter coming from sources speaking to Almal newspaper.

What?

The government is negotiating with strategic investors to sell a 49% stake in Egyptian Drilling, which is a petroleum drilling contractor. Most of these investors are reportedly from the UAE.

In ELAB’s case, the government is reportedly looking to sell a 40% stake in the EGX & to strategic investors but didn’t specify how they will be divided among them.

As for Telecom Egypt’s stake in Vodafone Egypt, the former reportedly wants to hold on to its stake due to its significance to total revenues.

So What

Egypt is in a race against time, with the IMF’s review of Egypt’s reforms coming up & one of the reforms being the privatization of state-owned assets. Several reports have signaled that progress in the program has been slow so far.

Now What

The government wants to finalize the deal for the Egyptian Drilling Company by Q3-2023 and finalize the deals for Vodafone Egypt & ELAB within this month, as per the sources.

The government is reportedly exploring the possibility of offering additional stakes in EGX-listed companies such as Sidi Kerir Petrochemicals, Alexandria Mineral Oils, eFinance, & Eastern Company, sources speaking to Al Shorouk newspaper said.

What?

These additional stakes would be offered through an accelerated book-building process, which is a faster and more efficient way for companies to determine the price at which their shares will be sold to investors during an IPO or a follow-on offering, by gauging investor demand and setting a price based on that demand.

So What

Accelerated book building is the same process the government used to offer a 10%?stake in Telecom Egypt?recently. Despite the quick execution of the deal, the price may not necessarily reflect the best value for the company.

Now What

Sources stated that this plan is still in the initial stage, & is only one of many scenarios the government might take. If it is chosen, however, the stakes would range between 10%-15% of these companies’ capital.

A consortium including British private equity firm Actis Capital & Asian power producer Edra Power Holdings has reportedly expressed their interest in acquiring one of Siemens’ power plants in Beni Suef in a deal that could reach $2 billion, according to sources speaking to Asharq.

What?

Egypt has been looking to?offer all three of Siemens’ power plants?to strategic investors, & has been working to get approval for the offering from the German banks that initially helped finance the building of the plants.

So What

Foreign direct investment is one of the healthier ways for countries to get their hands on foreign currency, rather than relying on borrowing –?something the Minister of Finance?said?should decrease.

Now What

These sources did not identify a potential timing for the deal, but it’s worth noting that the IMF is set to review Egypt’s reforms sometime this month, one of them being the offering of state-owned assets to investors.

US Claps

Yesterday, Apple (NASDAQ:AAPL) held its annual Worldwide Developers Conference where it announced the release of multiple products and software updates.

What

Among the biggest releases, Apple is set to launch:

• A new 15-inch MacBook Air for $1,299
• Vision Pro headset for $3,499

In addition, Apple will launch several other software updates and new features for many of its existing products.

So What

Unlike other tech titans like Google and Microsoft, Apple had been very quiet regarding its plans for AI. During the conference, however, Apple revealed several significant AI features like a revamped autocorrect feature that is based on machine learning.

Now What

Many of these new products and features are set to be released throughout 2023 and early 2024.

Unity (NYSE:U) saw its shares surge more than 17% following Apple’s announcement that the two companies are working together ahead of the Vision Pro headset release.

What

Unity will work with Apple to bring in 3D apps created by developers to the Vision Pro headset.?

So What

The announcement led to the biggest jump in the stock price since the company’s IPO in 2020.

Now What

The Vision Pro headset is expected to be released in the US by early 2024.

Intel (NASDAQ:INTC) saw its shares fall after Apple (NASDAQ:AAPL) announced that its new Mac Pro computer will have an Apple-produced chip.

What

Apple’s new chip, the M2 Ultra, is expected to be up to 3x faster than the fastest Intel-based Mac Pro.

So What

Intel is under significant pressure as Nvidia takes the reigns of the AI chip market and AMD continues to increase its market share in PC and data center chips.

The impact of this increased pressure, coupled with Apple’s shift away from Intel’s chips, drove the company’s stock down around 5%.

Now What

Last month, Intel revealed its plan to produce?AI chips?by 2025.