HC Research reported today that:

Prime Minister Ahmed Nazif announced the beginning of the implementation of the new energy prices, which will be applicable for energy intensive industries (cement,fertilizers, petrochemicals, and steel). New natural gas prices are set at USD3 per MBTU for energy intensive industries. Other industries will witness an increase in natural gas prices from USD1.25 per MBTU to USD2.65 per mbtu over three years with an increase of USD0.46 per MBTU per year.  (Al Masry Al Yom)

 Although the gap between energy prices in Egypt and the rest of the world remains a large one (It is about $14 mBTU in Spain, $22 mBTU in Japan), but this is a step in the right direction. The government needs to set the stage for industry growth through subsidies to remain competitive but it has to be relatively close to not waste our wealth.

Just a couple of weeks, I wrote about Pioneers Holdings Co getting a LE2,750 Bn valuation. I wrote then, that my hat is off for the effort they made in turning this company around. Pioneers Holdings (PIOH.CA) is now trading at LE9.5Bn. Ok, something is really wrong here.

 First, how did we move from LE2.5 Bn to LE9.5Bn in less than one month. They do have their own investment banking, which conducted their own valuation, could they have been wrong by 5x! Private placement pricing is usually 20 to 25% different than the IPO price, this is not 50% different, this is 400% off!  read more »

From HC Morning News quoting Zawya Dow Jones

Kuwait's Public Institution for Social Security, or Pifss, has acquired a 4%stake in Pioneers Holding Company for EGP110 million which constitutes 20 million shares at EGP5.5 each. (Zawya Dow Jones)

The Pfiss (what a weird name, I am sure they could have thought of a better name!) has valued Pioneers Hol Co for LE2.750B ($500M) First, it is an amazing feat that a brokerage company that was not on the radar 10 years ago and nearly bankrupt can command such a turnaround. My hat is off to them. Second, it shows the wide gap that (understandbly) EFG-Hermes has pulled from them. EFG's market cap is about LE 25Bn, 10x larger than Pioneers. Obviously, the experience, the breadth of investments, and the aggrevisness in conducting business has resulted in that wide gap.

All in all, this is a good news to the Egyptian investment industry in general.

Today the Egyptian government has (finally) increased its prices on, mainly, oil and cigarettes. Flamable situation if you ask me (pun intended). This is not a surprise when we all know that the government subsidies have reached a level that is unbearable. On the other hand, although I am not discussing the paradox of increasing wages by 30% on the President's 80th birthday, and then let people face a 20 to 35% price hikes!

Anyways, I am trying to look at the point from a strategy perspective in handing issues like these.   read more »

Think about the name very well, come on, think hard. Ok, give up , there is no way you can guess this piece of deep Egyptiantis!

This was sent to my very good dear friend Gianpiero Coppola. So, let's repeat this one again, Gamp Yoro Cobla is Gianpiero Coppola.

Nice.