AM — Nafeza trial for air freight coming in Jan

Good morning, friends, and welcome to a pleasantly brisk news morning. Brace yourselves for a possible sand storm — and do everyone a favor: Wear a mask for the next little while if you’re doing face-to-face meetings. Anecdotal evidence suggests it is getting a bit hairy on the covid-19 front. We have more on both stories in this section, below.

It’s inflation day: The Central Bank of Egypt (CBE) and Capmas will release inflation figures for December later today. Annual urban inflation slowed for the second month running in November, dipping to its lowest since July as pressure on food prices continued to ease.

What now? With an unfavorable base effect heading into 2022, don’t be surprised to see inflation rise in the coming months, particularly if global commodity prices continue their upwards trajectory. Analysts were split over the medium-term outlook following the central bank’s final policy meeting last year, with Capital Economics forecasting below-target range inflation by the middle of 2022, while HC Securities expects it to average 8% through the year. The CBE is targeting inflation of 7% (±2%) by 4Q2022.

The World Youth Forum gets underway in Sharm El Sheikh today. The forum will run for four days, wrapping on Thursday, 13 January. Palestinian President Mahmoud Abbas arrived in Sharm yesterday for a meeting with President Abdel Fattah El Sisi ahead of his participation in the forum, Palestinian news agency WAFA reported. Jordan’s Crown Prince Hussein is also set to attend, according to MENA.

SMART POLICY- You may soon be able to renew your car license on-the-go. Around 40 tech-equipped mobile traffic vans will soon be roaming the country to issue licenses and inspect vehicles, under a protocol the Planning Ministry signed with traffic authorities yesterday.

PSA- There is a chance of high winds and a dust storm today, according to the national weather service. Our favorite weather app is forecasting a high today of 18°C in the capital city.

Journalist Wael Elebrashy has died at age 58 due to complications caused by covid-19, Masaa DMC (watch, runtime: 1:24) and Al Hayah Al Youm (watch, runtime: 6:54) reported. The veteran reporter spent decades in the industry, writing for Rose El Youssef newspaper and presenting several talk shows. News of Elebrashy’s death came on the same day that Tahani El Gibali, Egypt’s first female judge, passed away, also due to complications from covid-19.

Local and international media are reporting this morning that Foreign Minister Sameh Shoukry has contracted covid-19. Al Masry Al Youm and Masrawy are reporting that the minister is not suffering severe symptoms and is currently working remotely, citing sources familiar with the matter. Bloomberg Asharq and Sputnik are also reporting the story.

If the report about Shoukry is confirmed, he would be the latest of a number of public figures to have contracted the virus in recent days, including talk show hosts Lamees El Hadidi and Amr Adib and at least eight players and staff members of the Egyptian national football team.

The Health Ministry reported 912 new covid-19 infections yesterday, up from 830 the day before. Egypt has now disclosed a total of 392,857 confirmed cases of covid-19. The ministry also reported 26 new deaths, bringing the country’s total death toll to 21,964.

THE BIG STORIES ABROAD- Little sign of compromise as the US and Russia gear up for high-stakes talks in Geneva: US, Russia and Nato officials are going into today’s talks, nominally aimed at reducing tensions over Ukraine, by ramping up the rhetoric and downplaying the chances of a breakthrough. Russia said it would refuse to compromise under pressure from Washington, US Secretary of State Anthony Blinken accused Moscow of holding “a gun to the head” of Ukraine, while Nato chief Jens Stoltenberg threatened “a new armed conflict in Europe” if Moscow refuses to play ball. The build-up to the talks is getting coverage in the Financial Times, Reuters and the Associated Press, among others.

The UAE is on track to see growth double to 4.2% in 2022, according to its central bank’s quarterly economic review (pdf), as its economy rebounds from the pandemic. The bank’s forecast came in higher than the IMF’s prediction of 3% GDP growth for the year. The strong forecast comes as the UAE’s non-oil private sector registered another month of solid growth in December, thanks partially to Expo 2020 and easing travel restrictions, according to the latest PMI survey (pdf).

ALSO- Turkey sells more USD: Turkey’s central bank sold a record amount of USD from its reserves to support its state gas company Botas in December, adding to what looked like aggressive intervention to prop up its crashing currency, Bloomberg reported.

Getting wide coverage in the US press: A fire in a New York apartment building has killed at least 19 people, including nine children. The cause? A space heater, it seems. The story is everywhere from the Washington Post and New York Times to the Wall Street Journal.

MARKET WATCH- US earnings season kicks off this week, giving investors their first insight into how companies performed in the final quarter of 2021, the Wall Street Journal reports. Analysts expect the financial industry to post record annual earnings, which will be put to the test later this week when JPMorgan Chase, Citigroup, and Wells Fargo declare earnings. Delta Air Lines will post its results on Thursday, providing an indication of how the travel industry responded to omicron and the tightening of border restrictions.

REMINDER- We still have six weeks to wait for Egyptian companies to report 4Q earnings, which should start rolling in around the beginning of March. EGX-listed companies have 90 days from the end of their fiscal year to report their full-year results.

THE MARKETS TODAY- Asian shares are down in early trading this morning. Shares in Shanghai, South Korea and Australia are in the red and the Nikkei is treading water as traders await inflation data out of the US this week. Shares in the US and Europe are on course to open lower according to the futures markets.

CIRCLE YOUR CALENDAR-

First interest day of 2022 next month: The Central Bank of Egypt (CBE)’s monetary policy committee will hold its first policy meeting of 2022 on Thursday, 3 February.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: Egypt’s academic research landscape has been improving in recent years, with our academics making more significant contributions to research. The push to improve our research output has also received policy backing. Today, we look at the current landscape for academic research.

ACI for air freight trials start this month ahead of planned April launch: The Customs Authority will in January begin a three-month trial extending its Advance Cargo Information (ACI) system to air freight, ahead of a full launch planned for April, a source familiar with the matter told Enterprise, confirming a report from Al Shorouk.

Early take-off? Meetings with customs agents and air freight firms are ongoing to discuss how to implement the digital cargo tracking system — which was originally introduced for maritime shipments — for air freight. The Finance Ministry began looking into adapting ACI for airborne cargo last year, Khaled Nassef, technology advisor for Egyptian Company for E-commerce Technology (MTS) — which set up the ACI system — told Enterprise in December. Those studies were expected to be completed sometime during the first quarter of this year, he said at the time.

The challenge: Planes go fast. Turnaround time for planes on runways is significantly shorter than for ships at port, with repercussions for how the airborne ACI system would be run, Nassef told us last month.

The move would digitize another big chunk of our logistics industry: Air freight makes up around 30% of Egypt’s cargo movement, according to our source.

What’s ACI? It’s a World Customs Organization (WCO) protocol that provides real-time information on shipments of incoming goods to shipping lines, port operators and governments. ACI is a key part of the Finance Ministry’s digital customs system known as Nafeza, which went live in October. All maritime importers must be registered to Nafeza, through which they file shipping paperwork and cargo data. As of December, north of 85% of active importers (around 24k companies) were looped into the system. The plan is to fully digitize all customs-related procedures — including the banking side of things — by June, Nassef previously told us.

For more on ACI and Nafeza, head to our in-depth explainer here.

MNT-Halan is looking at cross-border expansion this year, with plans to tap markets where “there are large unbanked populations that need serving,” CEO and co-founder Mounir Nakhla told the Banker magazine. The fintech firm — which last year raised USD 120 mn in what remains the region’s largest-ever fintech round — is looking at “several” countries in Africa and elsewhere, according to Nakhla.

The firm could also look to grow its service menu in Egypt in the short-term to include cards and supply chain financing, Nakhla said. The company currently offers buy-now-pay-later (BNPL) loans, microfinance solutions, P2P transfers, bill payments, and remittances through its recently-launched core banking system, Neuron.

The new banking software is off to a solid start: “The current monthly throughput via Neuron [the company’s in-house core banking software] is over USD 125 mn,” Nakhla said, including USD 15 mn processed on the consumer-facing app. “One of our most successful use cases is P2P transfers, which have been gaining tremendous traction, with double and sometimes triple month-on-month growth rates.”

Premium Card is looking to tap the securitized bond market again this year with a two-tranche, EGP 500 mn issuance, in the final round of a securitization program it launched in 2020, Al Mal quoted Managing Director Osama Farid as saying.

Premium Card’s securitization program was initially slated to total EGP 2 bn, but has been reduced “under pressure of several factors,” Farid was quoted as saying, without providing further details. The program has seen six issuances worth a combined EGP 1.05 bn so far, including an EGP 170 mn short-term securitized bond sale consisting of a single 10-month tranche that closed last week.

Egyptian issuers have sold EGP 6.9 bn worth of securitized bonds since the start of 2021, by our count, while a total of 19 securitized bond issuances with a combined value of EGP 15.8 bn went to market last year.

Also in the pipeline: Cairo Housing and Development’s maiden issuance to the tune of EGP 146 mn, while its sister companies are slated to take a EGP 190 mn issuance to market after receiving regulatory approval.

SODIC East to see MENA’s first Finnish-British school: Upmarket real estate developer SODIC has signed an agreement to set up a Finnish-British school in its SODIC East project with Finnish British Consortium for Investment (FBC) and Finnish Global Education Solutions (FGES), SODIC announced in a press release (pdf).

The school is slated to begin operating in 2023, following the planned launch of the first phases of SODIC’s East Cairo mixed-use development this year.

About the school: The English-language Finnish British School (FBS) will teach the British curriculum and IB, using the Finnish system of holistic, phenomenon-based learning (where students learn through interdisciplinary projects rather than subject by subject). The “sports-focused” school will be associated with Finland’s Espoo International School for exchange programs and mentorship on implementing the IB curriculum. The principals will be Finnish, while the teaching staff will be international.

The project comes as part of Finland’s education diplomacy: FGES was launched with support of the Finnish education ministry as part of the country’s drive to export its education system, according to the statement. The school will be run under the supervision of a Finnish government body linked to its education ministry. The agreement with SODIC was inked in Helsinki in the presence of Egypt’s ambassador to Finland and Finland’s dedicated education ambassador. The signing coincided with Education Minister Tarek Shawki’s first visit to Finland, where he met with FGES representatives, the press release said.

More to come? FBC aims to establish six Finnish-British schools and an international university in Egypt over the next decade, at an initial investment cost of EGP 1.2 bn, CEO Karim El Safty said.

This is the first big announcement out of Sodic since Aldar Properties and Abu Dhabi sovereign wealth fund ADQ in December acquired 85.5% of the company in an all-cash, EGP 6.1 bn transaction. SODIC shareholders will vote on the company’s new board of directors at an extraordinary general meeting on Sunday, 16 January.

State-owned Misr Fertilizers Production Company (Mopco) has appointed Ibrahim Mahgoub as its new chairman and managing director to replace Hesham Nour El Din (LinkedIn), effective immediately, the company announced in an EGX disclosure (pdf). The decision was made at a board of directors’ meeting last Wednesday.

Mopco is in the chute to tap the EGX before the end of the current fiscal year, Al Borsa cited Public Enterprises Minister Hisham Tawfik as saying in November.

Another Amr Adib / Lamees-less night meant another quiet night on the airwaves. Both El Hekaya and Kelma Akhira are home for the duration after the couple contracted covid-19 over the weekend.

The World Youth Forum got attention: Preparations for the event — which starts today in Sharm El Sheikh — received coverage from Al Hayah Al Youm (watch, runtime: 2:35) and Masaa DMC (watch, runtime: 36:26), which featured an interview with South Sinai governor Khaled Fouda.

Morocco, Egypt resolve auto import disagreement -Moroccan media: Morocco and Egypt have reached an agreement to exempt Renault cars produced in Tangiers from import fees, Moroccan outlet Hespress reported Industry and Trade Minister Ryad Mezzour as saying during a parliamentary session in Rabat. Following negotiations, the imported cars will be exempt from all customs duties as per the Agadir agreement, Mezzour said – resolving “a major point of contention” in the trade liberalization agreement between the two sides, according to Hespress. Mezzour added that our customs authorities are also set to accept certificates issued by a Moroccan government body assuring quality control in the country’s companies and factories.

What’s the Agadir agreement? Moroccan-produced cars are exempt from import duties under the trade pact, which was signed by Egypt, Morocco, Jordan, and Tunisia in 2004.

The Egyptian and American navies held a joint exercise in the the Red Sea yesterday, the Armed Forces said in a statement.

The Armed Forces also began a joint exercise with Saudi Arabia, Tabuk 5, which got underway in Saudi, the Armed Forces said in a statement.