PM — It’s a brisk hump day

Today seemed like a slow day — until it became the exact opposite of that. We’re flush with news today, ladies and gentlemen, from a flurry of M&A activity to more indications from global markets that Egypt could have an opening to ramp up LNG exports to Europe.

But first, a couple of mea culpas: In yesterday’s edition of EnterpriseAM, we appear to have linked to the incorrect Visit Egypt website. The correct website is here. We also incorrectly said in yesterday’s EnterprisePM that the Arab African International Leasing is issuing USD 500-600 mn of securitized bonds next year. The correct figure is EGP 500-600 mn, not USD. The entry has since been updated on our website.

SO, WHEN DO WE EAT? You’ll be breaking your fast at 6:20pm CLT this evening in the capital city, and fajr prayers are at 4:02am.

THE BIG STORY TODAY

ADQ appears to have arrived: Leading private sector bank CIB, fintech player Fawry, and state-owned Abu Qir Fertilizers, Mopco, and Alexandria Container & Cargo Handling have each seen block transactions on their shares today, according to news bulletins from the EGX. Although the bulletins did not disclose the buyers, from what we know of the companies and Bloomberg Asharq citing sources it says have knowledge of the matter that the buyer is indeed Abu Dhabi wealth fund ADQ. The bulletins note that it has bought stakes in five EGX-listed companies for around USD 1.8 bn from state-owned Banque Misr and the National Bank of Egypt. ADQ has been looking at state-held stakes in EGX-listed companies as part of a USD 2 bn investment agreed last month.

ALSO: Egypt is looking to buy wheat outside of tenders, through direct offers made to the Supply Ministry, in a bid to maximize its supplies amid disruptions resulting from the Russia-Ukraine war, Bloomberg reports, citing ministry sources. GASC currently only books cargoes through official tenders, where Russia and Ukraine account for around 80% of our wheat supply.

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

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

• GASC is tendering again — but only for European wheat: State grain buyer the General Authority for Supply Commodities (GASC) issued yesterday a limited tender for an unspecified amount of European wheat, with the tender only open to European suppliers already accredited in GASC’s tender book.
• The Senate approved yesterday the Unified Ins. Act, which, once passed in the House of Representatives, would grant the Financial Regulatory Authority (FRA) broad new powers to regulate the sector and mandates economic courts with adjudicating disputes under the act.
• OPay is expanding in Egypt: Nigerian fintech player OPay is preparing to expand its footprint in Egypt, launching pre-paid cards and linking up with the central bank’s new digital payment app less than a year after it first entered the country.

---

THE BIG STORY ABROAD

It’s all about energy markets: The global business press is focused squarely this afternoon on how the markets and policymakers are looking to contain the fallout from the EU’s imminent embargo on Russian oil imports. US President Joe Biden is expected to announce later today a temporary measure easing restrictions on ethanol levels in petrol sold at the pump, the Financial Times reports, citing a senior administration official. The national emergency waiver, which will raise the maximum ethanol content in petrol by five percentage points for the summer season, is meant to help rein in inflation as fuel prices soared on the back of the Russia-Ukraine war.

Meanwhile, the International Group of Liquefied Natural Gas Importers is encouraging LNG producers to ramp up LNG developments to “stabilize” the global trade, as the EU is expected to shift to buy more LNG as a replacement for Russian oil, Reuters reports. As we noted previously, this shift could be a golden window for Egypt to begin exporting more liquefied natural gas to Europe, which was a topic of conversation between EU Executive Vice-President Frans Timmermans and several government officials during his visit to Cairo this week.

By the numbers: WTI crude futures for May delivery are up 4.1% to USD 98.15 per barrel, while Brent crude futures for June delivery are currently trading at USD 102.67 per barrel, up 4.3% today. Natural gas contracts for May are up 2.2% to USD 6.79.

Subscribe to Enterprise

???? CIRCLE YOUR CALENDAR-

Companies have a little over one week to file their first quarterly ESG compliance report: Listed firms and non-bank financial services companies need to submit their first quarterly ESG report by 20 April, the Financial Regulatory Authority (FRA) announced last week. The regulator is making it mandatory for corporates to publicly disclose their performance on key environmental, social and governance metrics each year when they submit their annual financial statements, starting 2023.

Reach out to Moustafa Taalab at InkankIR, our parent company, if you need some help.

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

☀️ TOMORROW’S WEATHER- Expect a daytime high of 27°C tomorrow while the mercury will fall to 12°C at night, according to our favorite weather app.

SIGN OF THE TIMES- Chile is rolling out a water rationing plan to face its yearslong drought: Chile is introducing an alert system that turns red and triggers public service announcements once a quota for water usage is passed, before restricting water pressure and rotating water cuts that could last up to 24 hours, its government said, according to Reuters. The alert system, which will be applied on some 1.7 mn residents in Santiago, tracks dwindling water reserves from the Maipo and Mapocho rivers, which supply the capital city with most of its water. Chile’s drought is now entering its 13th year, with the government estimating a 10% drop in water availability to 37%. “This is the first time in history that Santiago has a water rationing plan due to the severity of climate change,” Santiago governor Claudio Orrego said.

Epic Games advances in race towards “gaming metaverse”: The Fortnite-maker has secured USD 2 bn from Sony and Lego-maker Kirkbi to help accelerate its work to build a gaming metaverse, the company announced in a press release. The investment, which sees Sony snag a 4.9% stake in Epic, and Kirkbi own 3%, values the company at USD 31.5 bn. The metaverse in question will be a space “where players can have fun with friends, brands can build creative and immersive experiences and creators can build a community and thrive,” CEO and founder Tim Sweeney said. This comes after Microsoft announced its blockbuster acquisition of leading games publisher Activision in a move that it said would allow it to get a foothold in the metaverse.

???? ON THE TUBE TONIGHT-

(all times CLT)

Despite our initial reservations, we’re actually enjoying Suits Bel Araby, the Egyptian adaptation of the US hit TV show Suits. The Ramadan mosalsal sees Zein Thabet (played by Asser Yassin) in the role of the antihero (Harvey Specter in the original version), while Adam Mansour (Ahmed Dawood) is hired as an associate lawyer by Specter despite not holding a law degree after he was expelled from university. The first couple of episodes follow how Thabet and Mansour cross paths, as the latter finds himself suddenly in the middle of a job interview at a law firm where Thabet is a partner as he attempts to escape the police for delivering narcotics. Thabet is impressed by Mansour’s photographic memory and skills, and the two promise to keep a secret the fact that Mansour doesn’t have a degree. The episodes show Thabet testing Mansour, leading him through his first couple of cases, including one on [redacted] harassment, featuring actress Huda Al-Mufti. The show also features Saba Mubarak as Egypt’s equivalent of Jessica, Tara Emad as Rachel (played in the original by Meghan Markle), Mohamed Shahin as Louis and Reem Mostafa as Donna. Catch the show on CBC and OSN, or test the waters with the trailer (watch, runtime 0:38).

⚽ ‘Tis the night of the champions as the second leg of the quarter final of the UEFA Champions will be played tonight at 9pm with Real Madrid v Chelsea and Bayern Munich v Villarreal.

Chelsea will be trying to recover from a setback at home, after losing 3-1 to Real Madrid last week with an advance of an early wrap up of the quarter finals by the Los Blancos. Meanwhile, Villarreal will be eying a second victory against Bayern Munich in the second leg after beating them 1-0 last week.

Moving to Egypt, we have a single game between Zamalek and Pharco FC at 9:30pm.

????EAT THIS TONIGHT-

Back to the Ramadan classics: The best Om Ali we’ve ever had from the one and only Sedra. The dessert is simple, yet delicious as a mix of carby puff pastry or rokak, sweetened hot milk, and cream on top, broiled to perfection. The ingredients are the same as any other basic Om Ali out there, but Sedra’s just kicks the competition out of the park — and has been a star at every family gathering so far.

???? OUT AND ABOUT-

(all times CLT)

Curated lighting exhibit Spirituality and Perspectives runs from 13-17 April, according to a press release (pdf). The event will see 10 Egyptian creative entities explore the concept of lighting channeling “spirituality in all of its varying forms” by developing light installations inspired by their craft. The installations will then be lit by Enlighten — a lighting design studio founded by Noha Mohsen. You can check out the participating artists here (pdf).

Kayan Band, founded by popular Egyptian violinist Azmy Magdy Azmy, will play their English and oriental tunes tonight at Room Art Space and Cafe in New Cairo at 9pm.

???? UNDER THE LAMPLIGHT-

Are tangible rewards really the best way to incentivize behavior? Not really, argues academic Alfie Kohn in his famous book, “Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise and Other Bribes.” Kohen argues that using a carrot-and-stick approach — whether in raising children, setting academic goals, or encouraging better employee performance — is actually counterproductive, as it only has a short-term efficacy before ultimately tying the end goal to an extrinsic reward. The author suggests that a better approach to encouraging behaviors is to instill intrinsic motivation, such as explaining the merits of behaving a certain way, rather than promising a reward for it. The book’s final chapter provides step-by-step strategies for parents, teachers and others towards replacing incentive-for-performance plans.

MARKET NEWS-

QNB Alahli’s bottom line increased 12% y-o-y in 1Q2022 to EGP 2.21 bn, according to the bank’s earnings release (pdf).

Telecom Egypt will pay out dividends to its shareholders on 26 April at a price of EGP 1 per share, the company announced (pdf).

---

MARKET ROUNDUP-

The EGX30 rose 1.6% at today’s close on turnover of EGP 831 mn (13.8% below the 90-day average). Regional investors were net buyers. The index is down 8.8% YTD.

In the green: CIRA (+9.0%), Fawry (+4.9%) and Ibnsina Pharma (+4.4%).

In the red: ADIB Egypt (-4.2%), Eastern Company (-2.6%) and Rameda (-1.9%).

OUR FOUNDER OF THE WEEK- Mostafa Ashour, co-founder and CEO of NowPay (LinkedIn).

My name is Mostafa Ashour, and I’m the CEO and co-founder of NowPay. I started my professional career as a software engineer at IBM in 2005, and went on to work for Microsoft as a program manager for six years. I led an incubation team that was responsible for de-risking ideas, incubating them and making the business case for them, and then pushing them all the way into products. After Microsoft, I joined the family business, Taco Industrial Group, and learned a lot about the ins and outs of managing a manufacturing company.

My experience in tech and manufacturing opened my eyes to the importance of utilizing tech to ease financial pressure. In 2018, I started focusing on the idea of financial wellness and observed how companies abroad were tackling this issue to make a material difference to employees’ financial wellbeing.

Some studies show that most employees rank financial pressure as their main stressor in life. In 2019, we launched NowPay to help solve that problem. We look at financial wellness through four different verticals: savings, spending, borrowing, and budgeting. We believe that if you can save well and spend less, set a budget for your financial wellbeing, and borrow seamlessly and effectively, then you can become financially healthy.

Our core offering at NowPay enables employees to receive their salaries at any time, instantly settle payments, shop online, and transfer money through our app. To make this happen, we have corporate agreements with over 200 clients, including government entities, manufacturers, schools, and top companies like McDonalds, KraftHeinz, General Motors, Edita, and Americana.

We currently have a financing round in the works that we expect to raise a USD 8-figure sum. NowPay raised USD 600k in our pre-seed funding round in 2019, and then USD 2.1 mn in 2020, as well as additional financing in undisclosed rounds.

The caliber of our investors illustrates that Egypt is becoming a regional startup and tech hub, and speaks to the importance of the work we’re doing. We have attracted US investors including Y Combinator, 500 startups, Plug and Play, and 4DX ventures, as well global investors including China’s MSA Capital, and the UK’s Sturgeon Capital, among others. Our regional investors are BECO Capital and Global Ventures, and we also have local VCs like EFG-EV, Beltone Private Equity, Endure Capital, and Foundation Ventures, as well as a number of angel investors.

The most important KPIs I focus on include how our sales portfolio is performing, the number of agreements in the pipeline and the number we close, and how many employees and companies are using NowPay. We also keep track of our retention levels — we are very proud of the fact that we’ve never lost a single client.

Our short term goal at NowPay is to keep growing our company’s portfolio. Our long term goal is to build new products across our verticals.

The likely exit strategy for NowPay would be a SPAC. I think the SPAC mechanism is the least complicated exit strategy for startups. We’re considering that for our startup, and plan to go the SPAC route by 2024.

My advice for any would-be founder is to find a more experienced mentor who has been through their own entrepreneurial journey. They will help you navigate problems and challenges, because they will have gone through the same struggles. Amr Shady (LinkedIn), CEO and founder of Tribal Credit, is that person for me. Whenever I’m in need of advice, I call Amr.

Every entrepreneur needs a proper support system. If you bring in the right executive team and partner with qualified investors, you will never feel lonely. Founding a startup is like running a marathon: It’s a long game and you should be able to execute well for a long time. That means you need to factor in your personal wellbeing and surround yourself with the right people.

If I had to do it all over again, I would still go down the investor route early on. I believe that bringing in the right partners accelerates the business on so many levels. Investors obviously bring capital to the table, but they also bring strategic advice, market insights, emotional and professional support, and so much more. I have a lot of respect for entrepreneurs who choose to bootstrap their business all the way, because it is an arduous path — and not one I would advise would-be entrepreneurs to choose.

The biggest strength in the local startup scene is Egypt’s talent density. A lot of our successful entrepreneurs are second-time founders. They came back to the scene with the scars and experiences of their past endeavors, and now know how to get things done. I also love the fact that Egypt’s startup scene has dramatically progressed in terms of investments in recent years.

If I had the power to improve one thing in the local startup scene, I would focus on attracting more investors and funding. Funds create companies. We are noticing that the availability of capital is enticing seasoned, high caliber executives from the corporate world to start businesses of their own. This is a very healthy trend. The availability of funding makes the jump to the startup side of the fence safer than it was before.

A startup that I think is killing it is Breadfast. The quality of their work is outstanding: Their app, content, packaging, and delivery systems are all testaments to the team’s hard work.

The last great thing I read was The Messy Middle by Scott Belsky. The book brilliantly zeroes in on the fact that people often glorify the beginnings and endings of startups, forgetting the crucial middle stretch of the journey. Take the movies that focus on Apple’s success story — they initially show you Steve Jobs and Steve Wozniack starting Apple in a garage, then fast forward to them becoming tech moguls [laughs]. They virtually skip the years of hard work and uncertainty that come in between.