PM — It looks like the FRA is endorsing SPACs in Egypt, and looking at new regs to allow for them.

To quote Bone-Thugs-N-Harmony: “Wake up, wake up. It’s the first of the month.” And already it’s looking very busy, with some major finance news at home, while the world seems occupied with COP26 and Fed day.

Before we dive into them, here are dates for some key news triggers as we enter November:

• PMI: November’s purchasing managers’ indexes for Egypt, Saudi Arabia and the UAE will land this Wednesday, November 3;
• Foreign reserves: October’s foreign reserves figures will be out sometime this week;
• Inflation: Inflation figures for October will be released next Wednesday, 10 November;
• There’s no MPC meeting this month — the central bank will next meet on 16 December to review interest rates for the final time this year. The CBE has yet to issue its MPC calendar for 2022.

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THE BIG STORIES TODAY-

FRA is endorsing SPACs in Egypt: The Financial Regulatory Authority has given the green light to a proposal to allow the establishment and licensing in Egypt of companies created with the sole purpose of raising capital through an IPO to acquire or merge with another company (SPACs), the FRA announced in a statement today. This appears for now to simply be an official endorsement, with the FRA looking to issue regulations that allow them at some point down the line, the statement reads. Egyptian SPACs would be subject to the Capital Markets Act, and the authority will later issue new listing rules governing securities related to these companies, FRA head Mohamed Omran said.

Over in startup land, last mile delivery startup ShipBlue has raised USD 2.4 mn in a seed round led by Saudi Arabia’s Nama Ventures, TechCrunch reports. Though the founders did not specify how the funds would be deployed, one of the company’s founders Ali Nasser says he wants ShipBlu’s network and infrastructure to span 99% of Egypt within the next couple of months.

^^ We’ll have more on these stories and others in tomorrow’s EnterpriseAM.

ALSO HAPPENING TODAY- Gov’t stipulated minimum charges at the nation’s hotels came into effect: All five-star hotels must now charge a minimum of USD 40 per night, while four-star establishments must charge at least USD 28 per night, according to minimum rates set by the government in April. Putting a floor under pricing has been on policymakers’ agendas since 2017 as part of a series of measures to help boost the then-suffering industry.

Egypt will take over the chairmanship of the African Union’s Peace and Security Council today, succeeding Mozambique, the Foreign Ministry said yesterday. Egypt will chair the committee for the month of November and will focus on the fight against extremism and terrorism, the statement said.

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• Saudi Arabia provided Egypt with a USD 3 bn deposit at the CBE to help it overcome the effects of the pandemic and shore up its foreign reserves.
• Liberalized natgas market? The government is considering implementing an automatic pricing mechanism on natural gas, which would see the price of natgas supplied to industry changed every 3-4 months.
• Zilla acquires two firms, eyes two more acquisitions: Investment firm Zilla Capital has acquired Naeem Holdings subsidiary Naeem Capital Investment, alongside a second unnamed financial leasing company, and is currently eyeing two more acquisitions.

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FOR TOMORROW-

It’s Fed day tomorrow: The US Federal Reserve begins its two-day meeting tomorrow, in which it is widely expected to announce the winding down of its USD 120 bn a month asset purchase program instituted at the start of the pandemic to stimulate the economy. All eyes will be on the Fed’s Open Market Committee’s decision on whether it will pull the trigger on scaling back its program, which Fed chief Jay Powell has previously said could happen in November.

The Fed has mostly been saying that inflation in the US is “transitory,” but warned in September that the unexpected persistence of supply-side disruptions amid strong demand across several sectors is driving up prices.

Inflation who? The Fed meets a week after fears of sustained inflation took a back seat in the European Central Bank and the Central Bank of Egypt’s decisions to keep rates on hold. The CBE’s move to leave rates unchanged was partially grounded in the importance of protecting Egypt’s portfolio inflows by maintaining Egypt’s position as the provider of one of the world’s highest real interest rates. Portfolio inflows will be all the more important should the Fed decide to raise rates or if local inflation rises again — each of which could translate into volatility here at home. Rising US rates could spell challenges for emerging markets as investors are tempted to sell-down riskier assets in favor of higher-yielding US treasuries.

That said, investors appear to not be buying policymakers’ “transitory inflation” narrative anymore, with many banking on an earlier than anticipated hike in interest rates as energy prices and supply bottlenecks continue to keep the economy in a chokehold, the Financial Times reports. As a result, bond buyers are positioning themselves for a potential earlier tapering and a rise in borrowing costs, ramping up their purchases of short-dated debt. Short-dated bonds have already seen their yields rising, with yields on the US two-year benchmark hitting 0.55% over the weekend, up from 0.21% last month.

But penciling in a sooner hike could end up acting as a self-fulfilling prophecy, with one analyst telling the Financial Times that “investors are testing central banks’ resolve that all this is temporary and forcing their hands.” This comes as the US Federal Reserve and the Reserve Bank of Australia are both expected to announce a dial-back of their quantitative easing programs when they meet this week, while the Bank of England is expected to hike rates from record lows.

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THE BIG STORY ABROAD- The COP26 climate summit in Glasgow opened with a sober warning from the UK’s Boris Johnson, that drastic action would need to be taken by world leaders “if we are going to prevent COP26 from being a failure.” His statements come after a disappointing G20 summit in Rome directly preceding the conference, in which the world’s 20 largest economies were unable to reach a consensus about how to limit global warming to 1.5°C — one of the goals set out in the landmark 2015 Paris Climate conference.

So far the US has already pointed the finger at China, the world’s largest emitter of greenhouse gases, with US National Security Advisor Jake Sullivan telling reporters the country must commit to more drastic cuts in its emissions. China’s Xi Jinping will not be attending the summit, and is due to send a written message instead, while Russia’s Vladimir Putin is also sitting out the conference, and will send a recorded video message.

President Abdel Fattah El Sisi is among the world leaders in Glasgow today, where he is expected to highlight Egypt’s readiness to host the COP27 in 2022, according to an official statement. Egypt was officially selected as the nominee to host next year’s climate conference — which must be hosted by an African country in 2022 based on a regional rotation system — earlier this year.

COP26 coverage is leading the front pages of all the major outlets: BBC | The Financial Times | Bloomberg | CNBC | The Washington Post | Reuters.

???? CIRCLE YOUR CALENDAR-

The Egypt Energy exhibition on power and renewable energy kicked off today. The three-day event will include speeches and discussions on the global energy outlook, the future of clean energy, financing green economy projects, and the future of connectivity with network management capabilities.

☀️ TOMORROW’S WEATHER- Expect an afternoon high of 29°C tomorrow with the mercury falling to 19°C at night, according to our favorite weather app.

Is it reasonable for bn’aires to actually end world hunger? As a bn’aire of course Elon Musk would say no. However, he did say on Twitter he is willing to sell Tesla stock worth as much as USD 6 bn “right now” if the World Food Program (WFP) can prove how this sum would resolve the issue using “open source accounting.” Musk’s tweets come in response to WFP Director David Beasley singling out Musk and Amazon’s Jeff Bezos — the world’s richest people — and pushing them to donate a fraction of their wealth. After Tesla’s valuation surpassed USD 1 tn last week, Beasley suggested that a USD 6 bn donation from Musk (i.e. 1.9% of his overall wealth of USD 311 bn) could save 42 mn people from starvation.

Barclays chief executive Jes Staley is stepping down, after the bank received preliminary conclusions from a probe by the UK’s Financial Conduct Authority and Prudential Regulation Authority into Staley’s relationship with disgraced [redacted] offender Jeffrey Epstein, the bank said in a statement. Staley, who will be replaced by his right-hand man, CS Venkatakrishnan, is the latest in a string of high-profile figures to get the fall for ties to the late Epstein, who took his own life in 2019 while awaiting trial charges of trafficking minors.

???? ON THE TUBE TONIGHT-

(all times CLT)

F is for Family is our comedy hero Bill Burr’s foray into animation. And it’s sooo worth it: The Netflix series follows members of a family in the 70s who often fall into comic mishaps and, oddly, never find a normal way to fix them. Inspired by the life of stand-up comedian Bill Burr — who is a co-creator, executive producer, and voices the character of the father in the series — the show follows Frank, who lives in the suburbs with his wife Sue and their three children. Frank has a knack for profanity-filled rants which act as a nostalgic commentary on the lifestyle, music, and popular culture of the 1970s. The animation is somewhat raunchy and filled with f-bombs, so keep the kids away from the screen.

⚽ It’s a light football day ahead of tomorrow’s Champions League battle: Wolves will play against Everton at 10pm tonight in the last match of the English Premier League’s gameweek 10.

In La Liga, Rayo Vallecano faces Celta Vigo at 7:30pm, while Levante plays against Granada at 10pm.

The Egyptian Premier League continues as well: Al Masry is preparing to face Smouha at 5:30pm, while Eastern Company is up against Ghazl El Mahalla at 8:00pm.

???? OUT AND ABOUT-

(all times CLT)

TAM Gallery’s newest exhibition Solos In Parallel is ongoing, featuring the works of artists Ihab Lotfy and Yassin Harraz. The exhibit will run until 13 November.

Cover band Mixtape is performing at The Room New Cairo tonight at 9pm.

Zar ensemble Mazaher is holding a show on Wednesday at the Egyptian Center For Culture and Arts (aka Makan) at 8pm.

???? UNDER THE LAMPLIGHT-

The women in Greek mythology are sidelined no more: Natalie Haynes has a history of writing books that rescue the women of the ancient world from obscurity or cliche, wirtes The Guardian. In her latest book, Pandora’s Jar, she combines her skills as a broadcaster, writer, stand-up comedian, and passionate classicist to create a compelling retelling of Greek myths from a female perspective. Haynes argues women are portrayed as monstrous, vengeful or just plain evil, as was the case with Pandora, who was blamed for causing all the world’s suffering and wickedness when she opened a forbidden box. Her book looks at the stories of women such as Jocasta, Helen of Troy, Medea, and Medusa — all of whom have been either vilified or reduced to a helpless damsel — asking why people are so quick to believe the worst of these mythical women.

MARKET NEWS- State-owned fintech firm e-Finance’s board of directors greenlit a EGP 2.49 bn capital increase through a rights issue to shareholders, according to the company’s disclosure to the EGX (pdf). The increase would be used in part to finance an employee incentive program. The decision requires sign-off from the company’s general assembly. e-Finance debuted on the EGX in a blockbuster IPO that saw the firm raise EGP 5.8 bn.

THE MARKET ROUNDUP-

The EGX30 rose 1.3% at today’s close on turnover of EGP 1.3 bn (15.1% below the 90-day average). Foreign investors were net sellers. The index is up 6.7% YTD.

In the green: Raya Holding (+6.4%), Qalaa Holding (+6%) and EKH-EGP (+3.9%).

In the red: Pioneers Properties (-3.5%), Egyptian Resorts Company (-3.2%) and Mopco (-3%).

Squid Game can (not) make you rich: New cryptocurrency Squid Game (ticker: SQUID) surged uncontrollably to hit a peak of USD 2.9k this morning, up more than 300k times its value of USD 0.01 on Tuesday and putting its fully diluted market cap at a staggering USD 2.3 tn — more than Bitcoin and Etherum combined. Then SQUID developers pulled out the funds, and disappeared, taking with them USD 2.1 mn, according to Gizmodo.

Wait, so was this a scam? Apparently. Just before noon today, the cryptocurrency flatlined, losing more or less 100% of its peak value in seconds and ending up worth less than when it started. Then CoinMarketCap, which was already warning potential buyers that some were having technical difficulties trying to resell SQUID, updated its warning to note that the developers’ website and social media are no longer functional and the currency cannot now be sold on Pancakeswap.

What is/was this thing anyway? The currency was launched in mid-October as the exclusive coin of the play-to-earn Squid Game platform, which was set to offer players the chance to compete in a virtual version of the deadly tournament at the center of Netflix’s standout Korean hit. The currency and online game are not affiliated to the show or its producers.

How did it work? Starting this month, gamers could supposedly pay in SQUID to enter successive rounds of online Squid Games, with 90% of the proceeds going to the prize pot and 10% to the developers. “The more people join, the larger the reward pool will be,” according to the currency’s now-deleted white paper. “More importantly, we do not provide deadly consequences apparently.”

The story was still developing as of dispatch time, but the alleged currency is part of a growing GameFi phenomenon that has upped stakes for gamers, by translating their earnings into cryptocurrency.

What is GameFi? Mash the decentralized finance (DeFi) and gaming communities together, and this is the result. On GameFi or play-to-earn platforms, users play to earn, and exchange blockchain-protected cryptocurrencies or non-fungible tokens (NFTs) like digital avatars, objects and outfits. In Axie Infinity, one of the best known such games, players battle using monsters they built out of NFTs and earn Ethereum as they play. These can be spent or exchanged for fiat currency, making GameFi a potentially lucrative niche for players, and reviving many’s childhood dream of a chance to make a living wage from home by playing video games. Axie Infinity now has 1 mn users in its home country of Vietnam.

Play-to-earn is taking off in developing markets: After cryptocurrency exchange Huobi found itself unable to operate in the country where it was founded after China banned crypto trading, it set up a USD 10 mn fund to back GameFi projects across South East Asia, including India, Vietnam and Turkey. Countries with a pre-existing gaming culture, high crypto trading uptake and a large number of retail traders are ripe for GameFi investment, Huobi global strategy exec Jeff Mei told Markets Insider. Meanwhile, US-based startup Playdough last month raised USD 2 mn to widen access to play-to-earn in Western markets.

But there’s a catch: you have to pay in before you can get paid. As the popularity of a game increases, the initial buy-in required will also go up. In the case of Axie Infinity, your NFT monsters will now set you back around USD 3k, one GameFi platform exec told Forbes.

Sometimes GameFi products are straightforwardly fraudulent: Crypto scams come in many shapes and sizes, all with silly jargon attached. “Pump and dump” is when investors get into a new currency early, drum up excitement to inflate its value, and then exit at the peak. Developers raise investment for projects that turn out never to have existed in “vaporware” or “rug pull” scams, which seems to be the case with SQUID. And then there are the straightforward, OneCoin-style Ponzi schemes.

Some insiders say it's all just fun and games: Established investors and banking regulators tend to frown upon meme-stocks, volatile crypto trading and strange new DeFi schemes. But some say that most buyers understand that the currencies they are buying are (like the memes they are based on) just a joke, or there to make a point rather than to hold value. “It's also a way of expression for many,” one crypto-exchange exec told Bloomberg Quint. “The rise of meme coins shows how humour is being leveraged to endorse the larger crypto ecosystem.”

But when you gamble, you should be prepared to lose it all: Even without fraud to contend with, crypto speculation comes with its own risks: Squid Game “joins a long and growing list of digital coins and tokens that piggyback on random memes or cultural phenomena,” Cornell University economist Eswar Prasad told the BBC. “Remarkably, many such coins rapidly catch investors' fancy, leading to wildly inflated valuations. Naïve retail investors who get caught up in such speculative frenzies face the risk of substantial losses.”

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt.

31 October -12 November (Sunday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

3-5 November (Wednesday-Friday): Africa Early Stage Investor Summit.

6 November (Saturday): Deadline to apply to Nahdet El Mahrousa’s Rabeha, a women entrepreneurship accelerator program.

7-10 November (Sunday-Wednesday): Cairo ICT 2021, Egypt International Exhibition Center, New Cairo.

8 November (Monday): Egypt CSR Forum, International Citystars, Cairo.

15-21 November (Monday-Sunday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

18-19 November (Thursday-Friday) British royal family members Prince Charles and the Duchess of Cornwall visit Cairo.

25-27 November (Thursday-Saturday): RiseUp Summit, Cairo, Egypt.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

29 November-2 December (Monday-Thursday): Egypt Defense Expo, Egypt International Exhibition Centre.

30 November (Tuesday): Launch of open call by GIZ and KfW for green project proposals in Egypt as part of their Investing for Employment facility (pdf).

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

8-10 December (Wednesday-Thursday): Global Forum for Higher Education and Scientific Research (GFHS), Cairo, Egypt.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

16 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1Q2022: Launch of the Egyptian Commodities Exchange.

7 January 2022 (Friday): Coptic Christmas.

27 January 2022 (Tuesday): National holiday in observance of 25 January revolution anniversary / Police Day.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

19 February 2022 (Saturday): Public universities begin the second term of the 2021-2022 academic year.

1H2022: The World Economic Forum annual meeting, location TBD.

2 April 2022 (Saturday): First day of Ramadan (TBC).

22-24 April 2022 (Friday-Sunday): World Bank-IMF spring meeting, Washington D.C.

24 April 2022 (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April 2022 (Monday): Sham El Nessim.

25 April 2022 (Monday): Sinai Liberation Day.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

2 May 2022 (Monday): Eid El Fitr (TBC).

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools.

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

30 June 2022 (Thursday): June 30 Revolution Day, national holiday.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

30 July (Saturday): Islamic New Year.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday.

18-20 October 2022 (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.