PM — Roaring ‘20s for cinema?

Good afternoon, wonderful people. It’s nearly the end of this workweek that has felt like an entire month on its own. Our almost-weekend reward: A healthy news cycle that’s keeping us on our toes.

THE BIG STORY TODAY-

FAB makes a play for EFG Hermes: The UAE’s First Abu Dhabi Bank (FAB) has presented a non-binding offer to buy a majority stake in Egypt’s largest investment bank, EFG Hermes, in a potential allcash acquisition, EFG said in a bourse disclosure (pdf). FAB is looking to acquire at least 51% of the leading financial services corporation in frontier emerging markets, preliminarily pricing EFG’s shares at EGP 19.00 apiece — marking a 21% premium on EFG’s closing price yesterday. FAB’s offer gives EFG a market value of around EGP 18.5 bn, the ADX-listed bank said in a regulatory disclosure (pdf).

EFG’s shares ended the day up 9.3%, closing at EGP 17.20. The investment bank’s shares had hit an intraday high of EGP 18.80 following the news of FAB’s acquisition offer.

^^We’ll have more on this story and others in tomorrow’s edition of EnterpriseAM.

HAPPENING NOW-

The House of Representatives is discussing amendments to the law governing non-residential rent in a plenary session. The bill would, if passed, allow landlords to eventually evict government agencies, public and private companies, embassies, clubs, associations and other entities leasing properties under the old rent system. The proposed amendments would do away with a system that currently protects non-residential renters from paying open-market rates on properties. The House Housing Committee had signed off on the bill last month.

The remaining amendments to the Real Estate Registry Act are also on the agenda for the House general assembly. Parliament had approved a portion of the proposed changes yesterday, including changes that place a 37-day time ceiling on the home registry process.

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

• Please lend responsibly: The Financial Regulatory Authority set out responsible lending principles for non-bank SME financing products, offering guidance on how to act in borrowers’ best interests by making sure they are offered the most affordable and suitable options.
• WB sees growth underpinned by tourism rebound + gas exports: The World Bank expects a recovery in the tourism sector and rising gas exports will be the main drivers for its January prediction that our economy will grow 5.5% in FY2021-2022.
• Our first eco-friendly plastic alternatives factory? US environmental safety firm Okyanus Group and local infrastructure agent Income International unveiled a proposal to build a local plastics alternatives factory in a meeting with Prime Minister Moustafa Madbouly yesterday.

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THE BIG STORY ABROAD- It’s a thoroughly mixed bag in the foreign press, which is (for once) not fixated on Ukraine tensions. The apparent shift towards living with covid-19 is getting ink on the front page of the New York Times and Reuters, which report on New York’s decision to drop mask mandates, while US medical chief Anthony Fauci tells the Financial Times that the worst of the pandemic is pretty much over in the US..

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FOR TOMORROW-

Macro Group’s shares will begin trading on the EGX tomorrow under the ticker MCRO.CA at EGP 4.85 each. Macro raised EGP 1.3 bn in the IPO, which saw it sell 264.5 mn shares at EGP 4.85 apiece, valuing the company at around EGP 2.8 bn. The institutional offering — which was allocated 95% of the shares — was 1.8x oversubscribed, while the retail component saw stronger demand, closing on Monday 102x oversubscribed.

Inflation figures are due: The Central Bank of Egypt and state census bureau Capmas are set to release January inflation data tomorrow. Annual urban inflation rose to 5.9% in December from 5.6% in November. While analysts we spoke with expect prices to continue rising, they don’t see them going outside the central bank’s target range of 7% (±2%) by 4Q2022.

Keep an eye on the US, which will release its own CPI data just a few hours later. The data, which will be released at 3:30pm CLT (8:30am EET), is expected to show another jump in inflation figures last month, with the consumer price index expected to rise 7.3% in January after rising to a 40-year record 7% in December

???? CIRCLE YOUR CALENDAR-

German Foreign Minister Annalena Baerbock will be in town this Friday, 11 February for a two-day visit that will see her meet with Foreign Minister Sameh Shoukry and other officials for bilateral talks, the German Embassy in Cairo said in a statement. Baerbock is also expected to discuss potential collaboration between the two countries on the COP27 climate summit in Sharm El Sheikh this November.

Egypt will host the Arab League’s Arab Sustainable Development Week from Sunday, 13 February to Tuesday, 15 February. Held at Arab League headquarters in Tahrir Square and the Nile Ritz-Carlton, the forum will bring together ministers, senior officials, policymakers and private sector players from across the region to discuss ways to strengthen sustainable development. Arab League Secretary General Ahmed Aboul Gheit, Planning Minister Hala El Said, and IMF Executive Director Mahmoud Mohieldin are among those set to speak at the conference.

Catch an art exhibition for a good cause: The Sawiris Foundation for Social Development and AlexBank are organizing (pdf) the first art exhibition by marginalized children in partnership with Townhouse Gallery, Al Ismaelia for Real Estate Investment, and Ubuntu Art Gallery. The exhibition will showcase work from art workshops attended by 250 children from institutions such as Banati Foundation, Samusocial International, Association for the Protection of the Environment, Educate Me Foundation, the UNHCR, and Save the Children International. The opening of the exhibition is slated for 13 February before opening its doors to the public at Townhouse Gallery from 14-19 February.

⛅ TOMORROW’S WEATHER- We’re going to be winding down the week with weather similar to today’s, with a daytime high of 18°C and a nighttime low of 10°C. Tomorrow will be less sunny: Our favorite weather app tells us to expect a partly cloudy day.

Banks are bracing for possible Russian cyberattacks: The European Central Bank (ECB) has become the latest regulator warning banks of a possible cyber-attack from Russia as tensions continue to mount between Moscow and the west, Reuters reports, citing people it says have knowledge of the matter. The ECB, which oversees Europe’s biggest lenders, is questioning banks about their defenses in case of a cyberattack, mirroring a warning from the New York Department of Financial Services last month. European business leaders fear that a Russian invasion of Ukraine would have a ripple effect on financial markets across the region. Earlier this week, French President Emmanuel Macron shuttled between Moscow and Kiev in an effort to defuse tensions.

Can a universal vaccine protect against all covid strains? New research says it might, reports the Financial Times. Scientists are racing to develop a vaccine that could prove effective against all coronavirus strains, including SARS, MERS and covid, which, if the past 20 years are any indication, are likely here to stay. Some universal vaccines are targeting pieces of protein called epitopes in all coronaviruses or other structures on the sars group that don’t mutate to prompt an immune response, rather than targeting the spike protein, like current covid vaccines do. Scientists are also using computational predictive modeling to understand and predict how the structure of these viruses will respond.

Who is developing these vaccines? Variations of a universal vaccine are being developed by US military’s Walter Reed Army Institute of Research, Massachusetts’ VBI Vaccines and the Human Vaccine Institute at Duke University’s School of Medicine in the US and Cambridge University’s biotech spinout DIOSynVax in the UK. Although some research facilities have begun initial testing, it is unlikely that they will be rolled out anytime before 2023-2025, and they will likely require a booster every five to ten years.

Meanwhile, the EU is pushing for a global pandemic treaty that would ban wildlife markets and reward countries for reporting new viruses, an EU official tells Reuters. The talks, which will include international negotiators from six regions, among them Egypt representing the Middle East, will begin meetings this week with the aim of reaching a preliminary agreement by August of this year and signing a treaty in May 2024. Many major countries, including the US and Brazil, have requested that the treaty be non-binding. The EU has called for measures that include the gradual closure of wildlife markets and incentives for countries that report new viruses to avoid coverups. South Africa, among other southern African countries, was hit with severe travel restrictions after flagging the omicron variant last year. Incentives may include ensured access to medicines and vaccines as well as immediate support in the form of medical equipment for countries that detect and report new viruses.

???? ON THE TUBE TONIGHT-

(all times CLT)

Get started on binge-watching the Best Picture Oscar nominees with the beautifully-made CODA. Available on AppleTV, the comedy-drama film follows 17-year-old Ruby — a child of deaf adults (CODA) — as she navigates the coming-of-age challenges of choosing between her future and personal passion, and her obligations towards her family. As the only hearing person in her family, Ruby (played by Emilia Jones) is responsible for being her family’s interpreter and works on her family’s fishing boat. She joins her school’s choir club, where she discovers her “latent passion” for singing and is encouraged to pursue musical education. The film “offers few surprises, but strong representation and a terrific cast,” Rotten Tomatoes says.

⚽ It’s a busy night in the Premier League, where three separate matches kick off at 9:45pm: Manchester City v Brentford, Tottenham v Southampton, and Norwich City v. Crystal Palace. Aston Villa and Leeds United will also hit the field at 10pm.

The Egyptian Premier League also has a few matches today, with El Makassa going head to head against Enppi at 5:30pm, while El Gaish v El Gouna has an 8pm kickoff.

Chelsea and Saudi Arabia’s Al Hilal are battling it out at 6:30pm for a spot in the FIFA Club World Cup final match. The victor of tonight’s semi-final will meet Brazil’s Palmeiras, while the loser will be up against Al Ahly FC to determine the third and fourth spot finishers.

The Coppa Italia quarter-final match between Milan and Lazio kicks off at 10pm.

Over in the Coupe de France, Nice and Marseille will meet at 10:15pm in the championship’s quarter-final.

Last but not least, Spain’s Copa del Rey will see Rayo Vallecano and Real Betis meet in the semi-final at 10pm.

???? OUT AND ABOUT-

(all times CLT)

Gezira Art Center kicks off four art exhibitions today, including a retrospective exhibition of artwork by the late Elghoul Ahmed, Nagat Farouk’s When I Was Little, Legends from Beirut by Shayma Kamel, and Towards a New Primitivity by Emad Abuzeid. The exhibitions open at 7pm at the Zamalek center today and will wrap on Thursday, 24 February.

The Contemporary Image Collective in downtown is hosting Cairo University arts and culture professor Salma Mubarak for a talk about how Egyptian cinema transcended the country’s borders and played a political role as a form of soft diplomacy in the mid-1900s.

It’s shaaby night at Cairo Jazz Club 610 in Sheikh Zayed, with DJ Totti, 3enab, and Abo Sahar each set to take the stage from 7-10pm. Reservations are required.

???? UNDER THE LAMPLIGHT-

The Girl With the Braided Hair: A tale of parallel love stories in contemporary and Napoleonic era Egypt: Originally titled Shaghaf and penned in Arabic by Rasha Adly, the novel follows the lives of two women centuries apart. Yasmine, an art historian living in post-2011 Egypt, attempts to discover the identity of the subject of a painting from the French occupation. Her story becomes intertwined with that of Zeinab, who became the subject of a love triangle during the Napoleonic occupation. The novel’s translation by Sara Enany was awarded the Saif Ghobash Banipal Prize for Arabic Literary Translation.

The EGX30 rose 0.6% at today’s close on turnover of EGP 1.24 bn (14.8% above the 90-day average). Local investors were net buyers. The index is down 2.95% YTD.

In the green: EFG Hermes (+9.3%), GB Auto (+5.1%) and TMG Holding (+5.0%).

In the red: Fawry (-3.9%), MM Group (-2.8%) and Credit Agricole Egypt (-1.4%).

How cinema in Egypt is getting back on its feet: Against all odds and with omicron on the rise, Sony / Marvel Studios’ Spider-Man: No Way Home shattered box office records by scoring USD 587.2 mn globally in its opening weekend at the end of last year, making it the highest grossing film of 2021 and the third-highest opening of any film of all time. 12 days later, it raked in USD 1 bn globally, ensuring its spot with top earners Marvel’s Avengers: Endgame and Infinity War, the top two box office openers. This was following a year when the final installment of Daniel Craig’s James Bond: No Time to Die was postponed three times and blockbusters like The Batman, Black Widow and Eternals were pushed back to avoid bad box office runs.

The blockbuster opening only goes to confirm that going out is “in” again. Just as pandemic-induced lockdowns have increased our dependence on technology, they have also driven more people to attempt to reclaim the lost pandemic year, with some researchers (already) comparing post-pandemic life to the post-Spanish Influenza decade of the Roaring ‘20s. Cinema — the experience of watching a film with strangers in a dark room and sharing in the collective gasps, chuckles and annoyances — is certainly one of those experiences, although the current zeitgeist might not keep the ailing industry alive indefinitely.

And Egypt is no exception: Spidey made ripples in Egypt, achieving some EGP 57 mn (USD 3.6 mn) in box office sales. But so have Egyptian movies, as film buffs make their way back to theaters following almost two years of Netflix-and-chilling. Local films have been achieving good box office runs as well, with the past year seeing a renewed appetite for cinema-going in Egypt. This comes after a year when movie theaters racked up losses due to peak pandemic closures that saw them shutter their doors from March to June 2020 and then reopen with 25% caps to enforce social distancing. Cinema closures between March and May 2020 led to the loss of EGP 270 mn by the movie sector, according to figures published by The Egyptian Center for Economic Studies (ECES).

In Egypt, cinema revenues are split roughly 50/50 between Egyptian films and Hollywood, varying slightly from year to year, according to ECES, which charted ticket sales from 2015 to 2019. In 2019, cinemas generated EGP 1.2 bn in revenue, up from EGP 843 mn the previous year. However, the report attributes the leap to the increase in ticket costs, rather than an increase in ticket sales.

The local industry wasn’t exactly churning out dozens of films pre-pandemic. In 2019, 33 Egyptian films were made, raking in USD 72 mn (c. EGP 1.1 bn) — a modest number compared to say, 2k Bollywood films in 2018 and 660 Hollywood films in 2017). It is, however, still the highest in the Middle East, according to ECES. In 2020, that number plummeted to EGP 143 mn (USD 9.1 mn).

But it is getting some much-needed interest from investors. “We are at an intersection where we either build on the talent pool that we have or we become consumers of content that is created and controlled by other global and regional entities,” says Gamal Guemeih, Investment Manager at Ergo, Media Ventures, which entered into a definitive agreement with Film Clinic (Feathers, Netflix’s Paranormal and Perfect Strangers) in September of last year, giving Ergo a 49% stake in Film Clinic. “Today, the whole concept of content production is no longer just a cultural undertaking. Governments are looking at it as a driver of economic growth because it reflects on so many different aspects. It can be a source of employment, FDI, tourism, it helps in many different ways,” Guemeih tells Enterprise.

And we can see that from the effort being done with festivals: The Gouna Film Festival, (GFF), which has also jolted back to life the longstanding Cairo International Film Festival (CIFF), has brought pizazz back to the industry. GFF has served the dual role of building the organizational capabilities of event organizers and maintaining healthy competition with CIFF, with many Egyptian organizers working on last year’s Red Sea Film Festival in Jeddah.

There is a palate for Egyptian cinema in the Kingdom. As the “Hollywood of the Middle East,” Egypt exports cinema to other countries in the Arab world, making it dependent on cinema sales in the UAE, Lebanon, Tunisia, Morocco, Algeria and, recently, Saudi Arabia. The opening of Saudi Arabia’s movie theaters was lauded by film critics as good news for the Egyptian cinema industry given the kingdom’s preference for Egyptian films (mostly comedy). In fact, an Egyptian remake of American comedy Last Vegas — Wa2fet Regala which grossed EGP 25.8 mn in the domestic box office (USD 1.6 mn) and was later released on regional streaming platform Shahid — was the highest grossing film in Saudi Arabia in 2021.

Egypt needs to beware the sleeping Saudi giant: The Kingdom recently announced plans to invest USD 64 bn in its entertainment industry, positioning itself as a filming location for Hollywood blockbusters and signing an eight feature film agreement with Netflix to produce regional content. The launch of the Red Sea Film Festival in December of last year with 27 Saudi film screenings was a clear indication that it is looking to bring some glitz home as it invests in growing the local industry. Saudi Arabia has the potential to absorb as many as 2.6 k screens by 2030 and is expected to hit USD 180 mn in box office revenues by 2024, a report by PwC estimates.

…but Egypt has the potential to remain king: “Egypt still has an advantage because of its huge talent pool both on-screen and off-screen, and the rise of different platforms represents both an opportunity and a threat,” Guemeih tells us, adding that changing consumption habits are driving investment decisions in the industry.