PM — We’re getting a whole lot of vacations

Happy Monday, friends, and welcome to what’s shaping up to be another unusually quiet Ramadan afternoon.

IT’S HOLIDAY SEASON- Next Monday, 25 April will be a national holiday in observance of Sinai Liberation Day and Sham El Nessim, the Madbouly Cabinet confirmed in a statement.

The entirety of the following week will be off: Cabinet also confirmed that the public sector will be off from Saturday, 30 April through Thursday, 5 May in observance of Labor Day and Eid Al Fitr, according to a statement. Labor Day falls on Sunday, 1 May and Eid is typically a three-day holiday.

What’s next: Look for separate announcements from the Central Bank of Egypt (CBE), the EGX, and the Manpower Ministry confirming these holidays for the nation’s banks, the bourse, and the private sector. Coptic Easter — which is typically a banking holiday — falls on Sunday, 24 April. Expect the CBE to confirm the day will be off just for the banking sector in the coming days.

SO, WHEN DO WE EAT? You’ll be breaking your fast at 6:24pm CLT this evening in the capital city, and fajr prayers are at 3:54am.

THE BIG STORIES TODAY

Our friends at renewable energy industry leader Infinity have rolled out seven new electric vehicle charging stations in the Delta region, according to a press release (pdf). This marks the company’s first entry into the Delta, and makes Infinity the only company to have rolled out charging stations in the region. The charging stations include a total of 20 charging points across Shebin El Kom, Mansoura, and Damietta.

Southeast Asian non-banking financial institution LOLC Group has acquired 100% of nonprofit Aga Khan Development Network’s The First Microfinance in an EGP 80.25 mn transaction last week, company CEO Ahmed Kamal El Din told Enterprise, confirming a report from Al Mal. The acquisition, which marks LOLC Group’s first entry into Egypt, will see the firm introduce new services — including microins., micro-leasing and consumer finance — starting 2023, Kamal El Din told us. Our friends at EFG Hermes managed the acquisition.

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

THE BIG STORY ABROAD

Ukraine has completed a questionnaire as a starting point for its EU membership process, deputy head of President Volodymyr Zelensky’s office, Ihor Zhokva, told Ukraine’s public broadcaster yesterday evening, Reuters reports. The country now expects to be qualified as a candidate in June. “We expect the recommendation … to be positive, and then the ball will be on the side of the EU member states,” Zhokva is quoted as saying. The European Council is set to meet June 23-24th. European Commission President Ursula von der Leyen had earlier this month sent the questionnaire to Ukraine, promising to “accelerate” the process for Ukraine’s bid to become a member of the EU.

This comes as the fighting on the ground continues, as Russian forces attacked Ukrainian military targets and separate areas in Lviv in Ukraine’s west. The attacks in Lviv have left seven dead, according to the Associated Press.

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

• House Planning Committee to review 2022-2023 draft budget: The House of Representatives voted in plenary session yesterday to send the draft FY 2022-2023 budget to the budget and planning committee.
• Saudi tech firm Brmaja moves to consolidate its presence here: Brmaja IT, an Egyptian subsidiary of Saudi Arabian tech firm Brmaja Group, has signed an MoU to acquire Brmaja Commercial, one of the group’s KSA subsidiaries.
• Exporters to receive more of their overdue subsidies: Exporters in the fourth phase of the government’s program to repay overdue subsidies will see only 8% deducted from subsidies on shipments made from July last year, down from a previous 15% haircut.

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FOR TOMORROW- Higher Education Minister Khaled Abdel Ghaffar will address AmCham’s pre-annual general meeting and iftar tomorrow at 6-8pm at the Nile Ritz Carlton. Abdel Ghaffar will speak on investment in the nation’s healthcare and pharma sectors.

???? CIRCLE YOUR CALENDAR-

PSA- You only have three days left to file your ESG report: EGX-listed companies and all non-bank financial services outfits regardless of listing status need to submit their first quarterly ESG questionnaire by this Wednesday, 20 April. 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.

Entrepreneurs from across Africa have until 6 June to apply to startup competition Africa’s Business Heroes, which is backed by the Jack Ma foundation, according to a press release (pdf). The top 10 businesses in the competition will earn a shared pot of USD 1.5 mn.

☀️ TOMORROW’S WEATHER- Expect a daytime high of 30°C and a nighttime low of 14°C, our favorite weather app tells us.

TikTok in Russia has become a major platform for pro-war content: TikTok’s attempt to restrict Russian propaganda in response to Moscow’s war on Ukraine appears to have backfired somewhat. The platform’s ban on Russian users from seeing posts from outside the country — meant to protect its users and employees from Russia’s draconian “fake news” law — ended up “effectively creating a second, censored version of its platform,” writes the Washington Post, citing research from nonprofit Tracking Exposed. Pro-war and pro-Putin hashtags and contents became prevalent on the application while anti-war content all but vanished, creating an uncontested message being sent to Russian users of the platform.

Can crypto be Sharia compliant? That’s what digital payment gateway Fasset is trying to push in Islamic countries with suspicions towards the unconventional digital currency. The global startup closed a USD 22 mn series A funding round led by Liberty City Ventures and Fatima Gobi Ventures, with plans to use the funding for expansions in Muslim countries like Indonesia and Pakistan. “We have been working with some of the most prolific and well known Islamic finance jurists and thought-leaders to educate the masses on how Muslims can interact with this emerging asset class in a Sharia compliant manner,” Mohammad Raafi Hossain, the company’s co-founder and CEO, told Bloomberg. Cryptocurrencies can be used for zakat, and are already being championed by Islamic charities in Europe, the startup argues.

The world’s largest chip manufacturer warns of a prolonged semiconductor shortage: Taiwan Semiconductor Manufacturing Company (TSMC) signaled that the global chip shortage is likely to continue as production capacity remains tight, CEO C.C. Wei said on a quarterly earnings call, reports the Wall Street Journal. The company expects manufacturers to stock up on chips while TSMC’s suppliers are grappling with labor, component and chip constraints due to the pandemic, the war in Russia, and supply chain disruptions. This will lead to production not being enough to meet customer demand for the coming period, Wei explained.

The tight chip market has significantly impacted several Egyptian industries, as we noted in Inside Industry, our manufacturing-focused weekly vertical.

But the shortage has definitely been a boon for TSMC’s balance sheet: TSMC expects its revenue to rise around 30% y-oy in 2022 following record quarterly revenue and bottomline performance in the first quarter.

???? ON THE TUBE TONIGHT-

(all times CLT)

Akram Hosny’s Ramadan series Maktoob 3alaya is gaining a lot of attention as a light, entertaining and funny mosalsal. The series follows Akram Hosny’s character who suddenly wakes up and realizes that something is being written on his arm every morning. He doesn’t know how it gets there or what it means, but eventually realizes that every written message foreshadows something in the day ahead in a cryptic way that leaves little to go on. The messages allude to anything from spilling his coffee to a potentially disastrous encounter, and it’s up to Hosny to put two and two together to get through the days ahead while trying to understand the strange phenomenon. You can watch Maktoob 3alaya on Shahid.

⚽ Catch the three matches in Egypt’s Premier League tonight: Eastern Company will play against Al Ismaily, Pharco will face Al Mokawloon, and Misr Lel Makassa will compete with Ghazl El Mahalla. All three games are scheduled for 9:30pm.

Barcelona will play against Cadiz in the most anticipated match of the day. The two La Liga teams will hit the field at 9pm.

Serie A: Napoli is playing against Roma at 7pm and Atalanta will face Verona at 9pm.

???? OUT AND ABOUT-

(all times CLT)

Join a spiritual meditation class by the Nile today at 9pm. The class is organized by Ahimsa and will see participants try various forms of spiritual meditation from the Islamic Sufi tradition. The class will also take place on Friday at 4:30pm.

Register now for The Darkroom Cairo’s Cyanotype Workshop. Cyanotype is a way to print images using alternative mediums. The two-day technical workshop lasts 6 hours with all equipment provided. Participants will meet on Friday from 8-10pm and then on Saturday from 12pm.

???? UNDER THE LAMPLIGHT-

Why it’s important to document your life through the written word: Anna Quindlen’s Write for Your Life urges everyone to write and gives reasons why it’s important to jot your thoughts and experiences down in a way that makes you more human. The New York Times bestselling author, journalist, and opinion columnist has been hailed as one of the “most astute chroniclers of modern life” having written multiple books that explore her relationship with growing older as well as the stories of everyday people trying to get by. In her new book, Quindlen looks at icons such as Anne Frank to Toni Morrison, and love letters written after World War II to journal reflections from nurses and doctors today to underline how writing can be an illuminating experience for yourself and for others in the future.

MARKET NEWS-

Alexandria Mineral Oils Company’s (AMOC) bottom line rose 638% y-o-y to EGP 761.98 mn in the first nine months of FY2021-2022, according to an EGX disclosure (pdf) . This came on the back of a 73% y-o-y increase in sales to EGP 12.26 bn.

Al Baraka Bank Egypt will increase its issued capital to EGP 5.09 bn by issuing bonus shares worth EGP 2.12 bn, representing over 71% of the bank’s capital, according to an EGX disclosure (pdf). The bonus shares will be distributed at a rate of 0.714 per existing share.

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MARKET ROUNDUP-

The EGX30 rose 0.2% at today’s close on turnover of EGP 601.34 mn (36% below the 90-day average). Foreign investors were net sellers. The index is down 10.3% YTD.

In the green: AMOC (+8.8%), Sidi Kerir Petrochemicals (+5.3%) and Credit Agricole (+4.4%).

In the red: EFG Hermes (-4.5%), Housing and Development Bank (-4.4%) and CIRA (-2.6%).

Crypto carbon credits: What are they, and can they do any good? Eagle-eyed readers will remember that we yesterday noted a Financial Times piece on the boom in carbon-linked crypto tokens — and the doubts harbored by analysts on whether they do what they say on the tin. Which got us thinking: How exactly do these things work, and is there an environmental and financial case to be made for them?

A refresher on carbon credits: Your bog-standard carbon credit is a tradeable certificate that represents a certain amount of carbon emitted into the atmosphere. It can work in several ways, but the essential idea is to put a price on carbon, setting up a market where firms are rewarded for cutting their emissions and have to pay if they want to bump them up.

Crypto-based carbon credit schemes look to bring that market to the blockchain. They tap into both the retail craze for digital tokens and big firms’ desire to offset their polluting, in hopes of both raising the price of carbon and directing funds to emissions-reduction projects. Crypto carbon schemes fall under the broad umbrella of regenerative finance (ReFi), which you can think of as the social justice movement’s answer to decentralized finance (DeFi).

Carbon offsetting is plagued by its own issues. Add in the murky world of crypto, and we may be heading nowhere good: Plain old carbon credits already face their fair share of criticism, with research suggesting that they are typically less ecologically sound than advertised and face widespread issues with double counting and fraud. Crypto trading has faced a similar set of issues, chief among them a lack of regulation that has lent itself to fraud.

Unless one can fix the other: Some crypto carbon advocates insist that the transparency built into the blockchain can clean up the carbon market, since the price of credits in every transaction is public (though not who bought them), and carbon could in theory be “locked on the blockchain” forever.

Some crypto carbon offsetting schemes look iffy from the off: Canadian carbon-capture firm Delta CleanTech was swiftly accused of greenwashing after it last month announced a blockchain carbon credit initiative that it claimed was in partnership with First Nations communities. The scheme would see Fortune 500 companies buy credits from indigineous Canadian communities — but the company was able to give no specifics on how that would benefit the environment or the communities it claimed to serve.

Others start with the best of intentions… Within months of its launch, crypto platform Toucan accounted for more than a quarter of all purchases of carbon credits verified by Verra, the world’s largest verifier of carbon offsets, Bloomberg reports. The aim of Toucan’s developers was to allow retail investors to “sweep the floor”: in other words, buy up low-quality carbon credits issued for projects that weren’t really helping reduce emissions, thereby driving up market prices and leaving only impactful credits available for big polluters to buy.

…But then quickly backfire: Analysts say Toucan is exacerbating the issue it set out to solve. Rather than getting rid of cheap credits, its users are driving demand for them. The fresh demand is incentivizing bad actors to sell more useless tokens — particularly for so-called “zombie” projects that are decades old, don’t need funds, and don’t make an impact.

Green NFTs are also facing accountability issues: UK-based initiative Save Planet Earth has sold over 1k limited edition carbon credit NFTs at an average price of USD 1.8k — with one token going for USD 70k. The firm hopes to channel crypto enthusiasm to plant over 1 bn trees in Pakistan, Sri Lanka and the Maldives that could then be turned into carbon credits. But there’s no evidence the company has secured any agreements with governments and landowners in the countries where it hopes to plant, a Climate Home investigation found.

Cleaning up this messy market will take some serious regulation: For crypto carbon trading to have any significant positive impact, the market needs standardization and oversight. The good news is that both the carbon trade and the crypto world are nascent sectors with promising signs of regulation in the pipeline. As central banks move to issue their own digital currencies, and governments seek to create a framework to fairly price and trade carbon assets, crypto carbon credits could develop into a useful tool of the green economy. Until then, though, it’s the Wild West out there.