EGP continues to strengthen against the greenback
Plus: Voting continues on constitutional amendments

It’s the slowest Sunday morning we’ve had in just about forever. We blame the confluence of the constitutional referendum here at home, the release of the Mueller report in the United States, and the Western Easter holiday weekend everywhere from Canada and the US to Italy and the UK.

Speaking of holiday weekends: It is a short work week here in Cairo, too, with the country shutting down on Thursday for a very long weekend. The holiday calendar:

• Thursday, 25 April — Markets and banks closed in observance of Sinai Liberation day
• Sunday, 28 April — Markets and banks closed in observance of Coptic Easter
• Monday, 29 April — Markets and banks closed in observance of Sham El Nessim (traditional spring holiday)
• Tuesday, 30 April — Normal workday. (But we here at Enterprise are bridging)
• Wednesday, 1 May — Markets and banks closed in observance of labor day
• Thursday, 2 May — Normal workday. (We’ll be back in your inboxes by 6am)

The EGX confirmed on Thursday it will be closed from 25-29 April (Thursday-Monday) as well as 1 May.

That leads us straight into Ramadan, which the National Astronomy Institute says will start on Monday, 6 May. Look for banks and the EGX to move to shortened Ramadan hours.

Holiday weather: Look for the mercury to slowly rise from a daytime high of 23°C today to 33*C by Thursday, where it will remain for the following week. Summer, it seems, is nearly upon us after a gorgeous and unseasonably cool spring.

Voters at home and abroad cast ballots on a package of constitutional amendments over the weekend. Polls will close for expats today, while voters here in Egypt have until tomorrow evening to head to the polling stations. You can read the statement by the National Elections Authority here. As expected, the vote led the conversation on Egypt in the foreign press over the weekend. We have more in this morning’s Egypt in the News section, below.

Things to which you can go today: A forum for young Arab and African entrepreneurs kicked off yesterday in Cairo, Al Shorouk reports. The week-long event aims to “encourage the exchange of entrepreneurial expertise and raise awareness of volunteering work” among youth from 16 Arabic speaking countries joined by Zambia, Uganda, Ghana, Nigeria, Benin and Malawi. Also taking place: The two-day Egypt CSR Summit also gets underway this morning, as does the RT Imaging Summit & Expo-EMEA.

Also this week:

• If it wasn’t a short week, we would definitely be attending the SME Governance Workshophosted by the Egyptian Private Equity Association and IFC on 23-24 April. If you run an SME, you should try to attend.
• President Abdel Fattah El Sisi is due to head to Beijing for China’s Belt and Road Forum. The gathering takes place on 25 April.

Trump actively tried to derail Mueller’s Russia probe, report shows: US President Donald Trump instructed several of his aides to end Special Counsel Robert Mueller’s investigation on Russian meddling in the 2016 US elections, according to the report, which was released with some redactions on Thursday. “Among those who did not comply with Mr Trump were James Comey, the FBI director who continued the investigation of national security adviser Michael Flynn, and Don McGahn, the White House counsel who refused demands to tell Rod Rosenstein, acting as attorney-general in the Russia investigation, to remove Mr Mueller,” the Financial Times says.

Don’t hold your breath for impeachment, but it’s going to be a rough ride for The Donald: Since the report’s release, Democrats have moved to subpoena the full report, while presidential contender Elizabeth Warren has already begun sounding the impeachment sirens, according to the NYT. The Gray Lady has a helpful crash course that breaks down the 448-page report into seven key things you should know.

Zoom and Pinterest share prices pop in public trading debut: Pinterest and Zoom saw their share prices jump 28% and 72%, respectively, signaling that investors have a healthy appetite for tech companies, the Wall Street Journal reports. Zoom’s performance was “the best first-day pop since Twitter Inc.’s 2013 debut, and only eight other companies that raised at least USD 500 mn in their public offerings have closed with higher gains on their first day of trading.” The successful IPOs are also a bellwether of sentiment ahead of forthcoming offerings, including that of Uber, which should come to market in a few short weeks.

But the real takeaway: Business software firms are soaring ahead of their sexier consumer-focused counterparts, the Journal adds. Nearly 50 business-focused software firms have gone public since 2016, compared with just 13 consumer-focused companies. The business-focused outfits have seen their shares rise 126% since going public, while the consumer tech companies that went public have seen a median increase of just 15% in that period.

In other IPO news: Lyft is facing two class-action lawsuits filed by investors who claim that the ride-hailing company inflated its IPO price. The claimants argue that Lyft overstated claims to a 39% market share in its prospectus. The company again closed in the red on Friday, and has now fallen almost USD 14 from its initial offering price of USD 72 since the company listed on 28 March. Bloomberg has more.

Stories making the rounds over the weekend and worth a moment of your time:

• 15 months of fresh hell inside Facebook, Wired’s epic takedown of the nearly ubiquitous social network.
• Tacos. Tequila. Telenovelas. Nairobi embraces its Mexican soul, by the New York Times, reinforces our long-held theory that all of us who dwell in ‘emerging markets’ share snippets of cultural affinity.
• ‘Partly alive’: Scientists revive cells in brains from dead pigs is both fascinating and terrifying — and has us wondering whether we understand death at all. Maybe the zombie apocalypse isn’t such a far-fetched notion?

Factoid of the morning: 25%. That’s the percentage of US 16-year-olds who have their driver’s licenses, down from nearly 50% in 1983. Ride hailing services, messaging services and social media are to blame, the WSJ suggests.

Bendgate has nothing on Samsung: Tech media have been hyping foldable devices as the next big innovation in the smartphone market. Reality set in last week, though, as reviewers finally got their hands on the new USD 2,000 Samsung Galaxy Fold. Cue a string of broken devices after just days of use. The Verge and the WSJ aren’t happy.

PSA- BBM is shutting down on 31 May. Remember the days, folks?

The ongoing constitutional referendum dominated the airwaves last night. Al Hekaya took note of almost every senior figure who voted in the referendum, including President Abdel Fattah El Sisi, First Lady Intissar Amer, Prime Minister Moustafa Madbouly and Interior Minister Mahmoud Tawfik (watch, runtime: 6:21).

Talking heads claim high voter turnout on first day: Masaa DMC’s Eman El Hosary spoke about the high voter turnout on the first day of voting (watch, runtime: 0:35) Nearly 61.34 mn citizens are eligible to vote in 368 constituencies and 10,878 polling stations across Egypt, El Hosary said. El Hekaya’s Amr Adib claimed that our history of staying home on voting day may be coming to an end (watch, runtime: 4:04).

Amr Adib thinks we’re a bunch of lazy [redacted]: Adib hammered the country for bridging holidays, saying that while India is looking at China’s so-called “9-9-6” (work 9am until 9pm, six days a week) to push growth to the next level, “you’re bridging holidays from 25 April to Eid Al Adha” (watch, runtime: 2:38)

EGP continues to strengthen against the USD: The EGP has extended its 11-week rally against the greenback, gaining another EGP 0.11 in the past week, according to central bank data. The exchange rate hit EGP 17.25 to the USD on Thursday, the strongest showing for the EGP since March 2017.

Look for a ‘correction’ when if the EGP hits 17.10 to the greenback: The currency gains have nothing to do with Moody’s upgrade of Egypt’s credit rating, EFG Hermes’ Mohamed Abu Basha told the local press. As he explains, the market is sensitive to investors’ activity in the debt market, where a recent spur in buying is propping up the EGP. However, the gains will likely be temporary, as investors will eventually sell off their holdings. Investors may also be scared off if the USD hits EGP 17.10, at which point Abu Basha says they might see the currency as too risky.

The EGP rally had been attributed in March to Egypt’s improving hard currency position, with CI Capital’s Hany Farahat pointing at the time to “tourism, exports, substitution of natural gas imports with domestic production,” peaking remittances, slightly improving FDI, and the central bank’s decision to end the FX foreign repatriation mechanism in December.

Banque du Caire plans to raise up to USD 400 mn in IPO, eyes potential dual listing: Banque du Caire is expecting to raise between USD 300 mn and USD 400 mn when it sells a 20-30% stake on the EGX in its planned IPO, Chairman and CEO Tarek Fayed told reporters, according to Reuters. The state-owned lender is discussing with IPO managers EFG Hermes and HSBC on possibly going ahead with a dual listing, Fayed said, according to Masrawy. The roadshow for the forthcoming listing will focus mostly on the Gulf, US, and Europe as the majority of the IPO will be a private placement targeting Gulf and international lenders. Fayed declined to specify a timeline for when the offering will go to market, but Central Bank of Egypt Governor Tarek Amer had said last week that the IPO would take place by year-end.

CBE gives regulatory greenlight for BdC’s internet banking: The central bank has also granted Banque du Caire a license to offer internet banking for its customers, Fayed said, according to Masrawy. The bank also expects to begin offering mobile banking services within three weeks. Mobile and internet banking services are part of the bank’s turnaround strategy, which will see BdC become a digital acquirer bank through a QR code, pending license from the CBE, Fayed told Enterprise in a wide-ranging interview we published last week.

Uber will pay 15% less for Careem if the two fail to get regulatory approval in jurisdictions including Egypt. Uber could get a USD 470 mn break on the USD 3.1 bn price tag it put on its acquisition of Careem if the transaction fails to obtain regulatory approvals in certain markets, according Uber’s prospectus for its listing on the New York Stock Exchange. Careem agreed that the maximum price break of 15% will be dependent on the value “ascribed to Careem’s operations in such markets.” A further 10% will be withheld temporarily as assurance against potential indemnification claims. Careem shareholders will receive 75% of the total sale price when agreement concludes around January 2020. This will include the USD 1.4 bn cash portion of the transaction.

Egypt presents a challenge on regulatory approval. The Egyptian Competition Authority (ECA) has been outwardly vocal against the move. The regulator voiced concerns that the agreement would reduce market competition, and announced that it would be investigating the acquisition upon which a decision would be made within 60 working days. An internet poll was launched shortly after to assess its effects on the ground. Prior to the agreement the ECA threatened both companies with fines of up to EGP 500 mn apiece if they went through with the merger.

Does the ECA really have the power to block the transaction? Not really, according to an opinion piece written for us earlier this month by Zulficar & Partners founding partner Firas El Samad,

Other Careem-related things items in Uber’s prospectus include:

• Careem will exit Sudan, where it began operating in September last year.
• Uber and Careem share consumer demand and driver availability despite keeping each of their platforms independent and operating as separate brands. MENA Bytes suggests that this will lead to subsidies and discounts (i.e. promo codes, driver incentives) being reduced.
• Uber parent would also take in certain “general and administrative functions,” but Careem’s engineering, HR and operations departments will remain independent.

The World Bank has given final approval to a USD 200 mn loan to support entrepreneurship and SMEs in Egypt, the Investment and International Cooperation Ministry said in a statement. Egypt agreed on the loan with the World Bank during the IMF and World Bank Spring Meetings earlier this month. The funding includes “USD 145 mn mainly through non-bank financial institutions offering loans to small businesses,” the World Bank said in a statement.

Look for more money flowing into the venture capital world, too: The facility includes USD 50 mn earmarked for angel funds and venture capital funds, among others.

EXCLUSIVE: MOVES- Elakhdar joins Intro Group as MD: Intro Group, the private Egyptian conglomerate with holdings including oil and gas driller Ades Investment, exploration and production company NPC, real estate developer M2 Developments, and bakery chain TBS, has announced that Mohamed Elakhdar has joined as managing director for the Group. Elakhdar was previously MD at Beltone Investment Banking, where his tombstones included the private placement of Ibn Sina Pharma to EBRD, the IPOs of Ibn Sina Pharma, MM Group and Sarwa Capital, and the merger of Groupe Seb and Zahran Group. Elakhdar earlier spent over six years in Washington, DC, as a strategy and management consultant with Booz Allen Hamilton and in 2011 moved to the UAE to help set up Booz Allen's international operations in the Middle East. He is also a veteran of Bechtel and Parsons Corporation and holds a BS in construction engineering from AUC and a MS in finance from George Washington University School of Business.

Qalaa’s USD 4.3 bn Egyptian Refining Company facility will begin commercial production in June, running at 60% capacity and ramping up to full production by September, Qalaa Holdings Chairman Ahmed Heikal told Al Masry Al Youm. Qalaa, the company leading the project, successfully completed trial runs for the CCR and VDU units of ERC last month, and has already supplied the EGPC — which will purchase ERC’s total production of 4.7 mn tonnes of refined oil a year — with some 100k tonnes of low-sulfur petroleum products. Heikal previously said the refinery will satisfy about 14% of Egypt’s annual need for liquid petroleum products. ERC will sell its full output to EGPC on a 25-year offtake agreement at international prices.

The foreign press was squarely focused over the weekend on the referendum on proposed constitutional amendments. The Wall Street Journal, the AP, Reuters, and the Washington Post shone the spotlight on opposition to the amendments, with the WaPo running with an opinion piece from Cairo Institute for Human Rights Studies Director Bahey Eldin Hassan. The Guardian’s Ruth Michaelson was also particularly concerned with the lack of international observers. The BBC’s Sally Nabil, meanwhile, looked at the increasing number of banners in town urging voters to vote in favor, while the AP ran regular updates of what’s been going on at the polling stations. Voice of America also recapped the course of events that led to the amendments with a brief video report (watch, runtime: 2:50). The Financial Times, AFP, and CBS News also took note. Human Rights Watch criticized the amendments, claiming that they will “entrench repression”.

Other headlines worth a skim this morning:

• Conde Nast Traveler gives our fair city some love with a list of basic tips for first-time visitors to Cairo.
• Economists are divided on whether Egypt’s fiscal targets for the next three years are “overly ambitious” given the size of public debt, economic "adjustment fatigue," and the difficulty of attracting FDI, Al Monitor says.
• Egypt is concerned over Turkey and Qatar’s backing of militia in Libya, The Arab Weekly reports.
• The 120th anniversary of Egyptian cartoonist Alexander Saroukhan was celebrated at an international competition organized by the Egyptian Caricature Association, reports The Arab Weekly.

Crowds began voting on the first day of the referendum on the proposed constitutional amendments, all three government-owned dailies say this morning (Al Ahram | Al Gomhuria | Al Akhbar).

Can AI really write as eloquently as humans? (Read: Is everyone here at Enterprise that replaceable?) Engineers have managed to program artificial intelligence to produce written works that are difficult to discern from human-produced pieces, Marcus du Sautoy writes for the Financial Times. One woman from the University of Oxford’s Mathematical Institute actually programmed a computer to read and learn thousands of library books, digest their content, and produce “fast-paced literary novels.” This advancement calls into question whether human creativity, which is arguably the driving force behind writing, will remain uniquely human. “Roald Dahl had already conjured up this nightmarish scenario for authors in one of his unnerving short stories in Someone Like You (1953). It tells the tale of the Great Automatic Grammatizator, a mammoth machine able to write prizewinning novels based on the works of living authors in 15 minutes flat … Dahl died before such a machine was within the realm of possibility. Today it no longer seems such a crazy idea.”

This new reality is upon us thanks to the way code-writing is changing. “Instead of writing code in a top-down manner, where the coder has to programme all the scenarios the code will encounter in advance, we can allow the machine to roam this digital landscape and learn just as a child does.” Much like a child whose reading and writing comprehension remains rudimentary, text-generating algorithms are yet unable to create long-form text (such as novels) that follow a theme, plot, or narrative arc. But, again like a child, it is probably not far-fetched that machines will, at some point in the future, be able to learn those skills and become just as adept at storytelling as humans.

The Trump administration has denied it intends to carve out a chunk of Sinai to create a “new Palestinian state” as part of its new peace plan for the region. US Middle East special envoy Jason Greenblatt said in a tweet the reports were made up by “people who don’t know what’s in the plan.” The peace plan, which “will be rolled out after the new Israeli government is sworn in” and after Ramadan ends in June, “will require concessions from both sides but won’t jeopardize the security of Israel,” White House adviser Jared Kushner reportedly told 100 foreign diplomats on Wednesday, according to Times of Israel.

Saudi lifts ban on Egyptian onions: Saudi Arabian authorities have lifted their temporary ban imposed on Egyptian onion imports last January, an Agriculture Ministry official told Al Shorouk. An Egyptian delegation presented evidence to the Saudi government proving that Egyptian onions do not contain harmful amounts of residual pesticides.

The Egyptian Electricity Transmission Company signed an agreement with the International Finance Corporation that will see the latter provide consulting services for establishing a 600 MW solar energy station West of the Nile under a build-own-operate (BOO) scheme, the local press reports.

EETC has received the details of a new route for the USD 2.5 bn Egypt-Saudi interconnection project, head Sabah Mashaly said. The original route for the power transmission lines had to be redrawn by the Saudis to avoid conflict with their USD 500 bn Neom city megaproject. Egypt’s government was waiting for construction to start after having already launched the power line tenders. The Saudi government, meanwhile, will reportedly issue its tender in June. Authorities from both sides have previously agreed to finalize preparations in December, and begin construction by no later than 1Q2020.

Indian energy utilities giant NTPC is exploring investment opportunities in the Egyptian solar energy market according to statements from commercial director Ananda Kumar Gupta reported by the local press. NTPC also signed an MoU with Egypt-based energy project management company Kahromika to carry out all maintenance activities on behalf of the company.

Al Canal Sugar is expected to sign three MoUs with ElSewedy Electric, Saudi’s Alkhorayef Group and China’s Sinoma International Engineering to facilitate new projects worth USD 1 bn, reports Al Mal. Agreements with Al Kharafi will be in the area of irrigation, while Sinoma will oversee development of a new Minya factory and ElSewedy is expected to provide high-pressure water lines.

Correction: 21 April, 2019

An earlier version of this article incorrectly referred to Alkhorayef Group as Al Kharafi Group. 

Environment Minister Yasmine Fouad inaugurated on Thursday Lafarge Group subsidiary Geocycle’s EGP 200 mn alternative fuel factory in Suez, Al Masry Al Youm reports. The facility is estimated to be the largest of its kind in the MENA region and is able to produce 400k tonnes of alternative fuel a year. The output will be directed to LaFarge’s cement factory in Ain Sokhna. LaFarge has already developed a EUR 8 mn alternative fuel feeding system in its Ain Sokhna plant, Egypt CEO Hussein Mansy separately said, according to Al Mal.

The Trade Ministry has excluded steel nail and wire producers from anti-dumping duties imposed on steel rebar and pellet raw materials, head of the Federation of Egyptian Industries’ steel processing division Ayman El Negooli said. This came after the division approached the ministry to inquire about the temporary, 180-day tariffs imposed on steel rebars (25%) and pellets (15%) last week. The ministry, which is planning to make the duties permanent as soon as it completes a study of their implications, sent a memoir to the Finance Ministry clarifying that steel rebars imported for domestic processing will not be subject to the tariffs.

Pharma manufacturer El Arabeya expects to invest EGP 40 mn in FY2019-20 to develop and digitize production lines, according to statements from investor relations manager Mohsen Omar seen by Al Mal.

Heliopolis Company for Housing and Development will begin auctioning 44 of its land plots in Sheraton, Heliopolis on 2 May, Managing Director for Financial Affairs Sahar El Damati told reporters, according to the local press. El Damat did not offer further details on the expected profits from the auction. The company had said in a press release last week that the auction would be postponed due to recent government amendments on building regulations. El Damaty had said earlier that the company’s planned 32.25% stake sale on the EGX this year would follow planned land plot sales.

A new saff tomb, the biggest of its kind, has been discovered on the West Bank of Luxor, Ahram Online reports. The discovery was announced on Thursday, when a newly-restored 50-ton statue of Ramses II was unveiled at Luxor Temple.

CIB has inaugurated a representative office in the Ethiopian capital Addis Ababa as part of its expansion plans in Africa, the bank said in a bourse filing (pdf). The office aims at strengthening relationships with Ethiopian banks, promoting Egyptian exports, and gaining market insight.

Majid Al-Futtaim Group (MAF) is planning to invest EGP 700 mn in Egypt this year to open 20 new Carrefour outlets, Carrefour Egypt Country Manager Jean Luc Montague told reporters on Thursday, according to the local press. Executive Regional Manager Herve Majidier had previously said MAF will invest USD 500 mn in Egypt this year.

The board of directors for the Egyptian sovereign wealth fund will be decided early next monthafter the fund’s CEO has been selected, according to statements from Planning Minister Hala Said cited by the local press. Four candidates are currently under consideration for the chief executive role, with three of the four residing outside Egypt.

The Cairo Criminal Court acquitted former Mubarak-era Tourism Minister Zuhair Garana of corruption charges on Wednesday, Al Masry Al Youm reports. The charges, which included granting illegal licenses to tourism companies and making illicit earnings, were leveled against him in a case dating back to 2011. Garana was also acquitted in 2017 of two other corruption cases, and faces no more pending charges.

An Egyptian UN peacekeeper was killed in Mali last week after an improvised landmine hit a convoy traveling through the country’s central region, according to a UN statement. UN Secretary-General Antonio Guterres said the bombing may constitute a war crime and called on the Malian government to bring those responsible to justice.

Shocker: Unhealthy eating habits are finally catching up with us: A poor quality diet is contributing to stunted growth in children and obesity among mothers in Egypt, academics and UNICEF specialists say, according to All Africa. Malnutrition represents 35% of the disease burden for children under five, but the problem is an increased reliance on convenience food that has little nutritional value, and not food availability. Experts say that policy efforts to tackle endemic nutritional problems undertaken by the government in collaboration with civil society are virtually meaningless unless people change their eating habits.