Sunday, 10 October 2021

EnterprisePM — Annual urban inflation here hits a 20-month high, while policymakers and investors see lingering inflation globally.

TL;DR

🔎 WHAT WE’RE TRACKING TONIGHT

Good afternoon, ladies and gentlemen. Today’s issue was brought to you by the letter “i” for inflation, inflation, inflation.

THE BIG STORIES TODAY-

#1- Annual urban inflation continued its upward trend in September, hitting a 20-month high on the back of increasing food, healthcare and education costs, according to Capmas figures released this morning. Headline urban inflation saw a significant rise to 6.6% last month, up from 5.7% in August. This is the highest annual inflation rate since January 2020, when it recorded 7.2%. On a monthly basis, headline inflation rose by 1.1% following August’s 0.1% rise.

#2- The World Bank is more optimistic about Egypt’s GDP this FY: Egypt’s economy is expected to grow 5.0% in FY2021-2022, up from the 3.3% registered in FY2020-2021, according to the World Bank’s October 2021 MENA economic update (pdf). The World Bank’s forecast marks an upward revision from its April economic update, when it said Egypt’s GDP would grow at a 4.5% clip during the current fiscal year.

The region’s GDP per capita is expected to inch up by a mere 1.1% — a rebound from the 5.4% contraction registered in 2020 and an upward revision from the 0.6% the World Bank had penciled in back in April.

#3- MIH could IPO in 2H2022: Misr Ins. Holding (MIH) is looking to offer 25% of its subsidiary Misr Life Ins. in an EGX IPO during the second half of 2022, depending on market conditions, MIH Chairman Basel El Hini told Al Mal. El Hini had previously said that the IPO would happen by the end of this year or early next year. Enterprise is currently trying to reach out to MIH or Misr Life Ins. to confirm the news.

^^We’ll cover these stories and more in tomorrow’s EnterpriseAM.

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

  • Fuel prices are up by as much as 3.7%: The government’s fuel pricing committee raised the price at the nation’s pumps by EGP 0.25 on Friday as global oil and gas prices spike.
  • Retail subscription period for e-Finance’s IPO kicks off: The subscription period for the retail offering of 1.61% of e-Finance (25.78 mn shares) will run until the close of the trading session on 17 October. The company could announce on Tuesday how it will price the offering.
  • MPs are pushing back against the capital gains tax: House Planning and Budgeting Committee Secretary Abdelmoneim Emam has handed a briefing request to the house speaker in a bid to sway lawmakers away from reintroducing capital gains tax on the EGX with the argument that it would be tantamount to dual taxation.

THE BIG STORY ABROAD- As with Egypt, inflation continues to be the big worry abroad as continued supply chain disruptions are driving policy makers and analysts to conclude that inflation is set to continue. Bloomberg Economics is forecasting that central banks in Brazil, Norway, South Korea and New Zealand (who have all raised rates this year) will likely continue to do so well into 2022 as inflation is expected to linger on. High on the list of countries likely to raise rates is the UK, which is reeling from an energy crisis.

Some, including the Fed, could take the long view and simply not move at all. The US Fed might have its hands tied as it scrambles to fight high inflation, as tightening isn’t likely to help this time around, co-chief investment officer at Bridgewater Associates, the world’s largest hedge fund, told the Financial Times. “If there is inflation, the Fed is in a box because the tightening won’t really do much to reduce inflation unless they do a lot of it, because it is supply driven,” Prince told the salmon-colored paper. Excessive tightening isn’t the preferred route as it tends to drive down financial markets, he added. This means policymakers will be more likely to tolerate inflation.

In addition to supply chain worries, the Fed also has to contend with a sluggish growth in US jobs, which had lagged for the second consecutive month, according to the latest jobs report.

Let’s hope that’s the case as bond yields in the states are already on the rise: A more accommodative Fed is good news for our debt market. This time around, however, we’re yet to see how this plays out as ten-year US treasury yields have actually climbed up over the weekend and crossed the 1.6%-mark for the first time since June.


These concerns will likely impact how markets open tomorrow, as inflation and supply chain concerns have been wreaking havoc on markets last week with European and US equities closing in the red.

And earnings season might not save equities this time: Inflation, supply chain worries, shortages and the energy crisis are leading analysts to forecast weaker earnings this quarter, writes Bloomberg. Citigroup’s Global Earnings Revision Index is sliding dangerously close to negative territory, a steep plunge considering May of this year saw it rise to an all-time high. Meanwhile, Bloomberg Intelligence data is projecting S&P 500 firms’ earnings to climb 28% in the third quarter — down from 94% in the previous quarter, according to Bloomberg.

Strong earnings have rescued equities six times in a row, with stocks rising in response to companies’ strong results. “Almost all segments of the economy that are not pure service or pure technology driven will be struggling with supply-chain issues for a long time,” one investment firm head told Bloomberg.

Not even banks are immune from the earnings storm, the FT reports. Most Wall Street lenders are also facing a margins squeeze, having spent the summer raising wages as they fight each other for talent, and hiking tech costs as they fight the fintech sector for the future of banking.

But hey, there’s a silver lining as there’s some good news on the global chip shortage: The price of semiconductors raw materials, mainly silicon, is expected to fall as chip manufacturing hubs, including Malaysia, restart production, writes Bloomberg. In a sign that investors are seeing a light at the end of the tunnel for the chip shortage, chipmaking giants Samsung Electronics, Micron Technology, and Intel have seen their shares fall at least 20% compared to recent peaks while 12-month forward earnings estimates have also slumped.

FOR TOMORROW-

ACWA Power shares will start trading on the Tadawul tomorrow: Trading on Saudi Arabia’s first USD 1 bn IPO since Aramco will begin tomorrow, according to a Tadawul bourse statement. The renewable energy giant, which is half-owned by the kingdom’s sovereign wealth fund, is set to raise USD 1.2 bn through an 11.1% stake offering. Last week’s institutional allocation was nearly 248x oversubscribed, as investors fought for a piece of what is seen as a crucial business in Saudi’s move away from oil, according to Bloomberg. The company has a significant presence in Egypt, including minority stakes in three plants in Benban, its 200 MW Kom Ombo solar power plant, and an upcoming project with the EETC to convert an electricity plant in Luxor to renewable energy.

The IMF and World Bank annual meetings kick off tomorrow: The gatherings run from Monday, 11 October to Sunday, 17 October. The odds are that embattled IMF chief Kristalina Georgieva will at least make it to the first day, though it might also be her last: Georgieva’s fate still hangs in the balance as the IMF continues its investigation of allegations that she pressured staff to manipulate data and make China look more business-friendly than it is in the World Bank’s now-defunct Doing Business rankings. Reuters reported that talks are ongoing today, with a decision on Georgieva’s future expected Monday at the earliest.

🗓 CIRCLE YOUR CALENDAR-

Conference season ratchets up this month, with a number of exhibitions and business events here and throughout the region taking place this week, including:

  • The Turathna Exhibition kicked off yesterday at the Egypt International Exhibition Center and will run until Friday, 15 October.
  • The two-day Mediterranean Offshore Conference will take place in Alexandria on Tuesday.
  • Further down the road: The Middle East Angel Investment Network is hosting its Angel Oasis in El Gouna on 27-29 October, with separate pricing for in-person and virtual attendance.

PSA- We have another long weekend coming up — the Prophet Muhammad’s birthday falls on Monday, 18 October. We expect a three-day weekend starting Thursday, 21 October. Look for confirmation from the cabinet toward the end of this week.

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

☀️ TOMORROW’S WEATHER- We’ve been feeling lost while standing in front of our wardrobe these days: Our favorite weather app forecasts 34°C weather tomorrow, with nighttime lows of 21°C.

🚙 FOR YOUR COMMUTE

Give cows garlic, save the planet: As tackling methane emissions becomes an increasing focus point in the fight against climate change, farmers and biotech companies are messing with the diets of one of the planet’s biggest emitters — cows. Swiss biotechnology start-up Mootral, for instance, has developed garlic-infused pellets which work by disrupting methane-producing enzymes in cows’ guts. The milk did not end up tasting like garlic, they reassured the FT. Other potential solutions include new feed supplements, face masks worn by cows, or slaughtering cows earlier.

Cows contribute 60% of total livestock emissions, with 40% of those being methane. As a whole, the agriculture sector is the leading polluter when it comes to methane, responsible for 40% of global emissions of the greenhouse gas. Cows build up methane in their stomachs during the digestion process and emit the gas into the environment, mostly through burps and manure. Domesticated animals emit 5% of all human-caused greenhouse gas emissions, with the figure rising to 14.5% when taking into account factors such as feed production and transport, according to the UN Food and Agricultural Organization.

Methane is expected to be one of the big topics of discussions in the upcoming COP26 summit as scientists argue it is a highly plausible way to combat the climate crisis. Methane is 28 times more potent than CO2.


Rich people problems to the Nth degree: The wife and children of the late Samsung chairman Lee Kun-hee are each selling off shares in the tech company to pay inheritance tax bills that total over USD 10 bn, according to Bloomberg. The widow, Hong Ra-hee, will sell a 0.33% stake Samsung Electronics for over USD 1 bn, while children Lee Boo-jin and Lee Seo-hyun will each dispose of 1.95% stakes in Samsung SDS worth approximately USD 200 mn a piece. Seo-hyun will also sell a 1.73% stake in Samsung Life Ins. for around USD 206 mn. Business titan Kun-hee died last year after years of struggling with illness until he finally retired from the public eye in 2014 after falling into a coma, reported CNN Business.

Or did he really die last year? Kun-hee’s death has been the subject of conspiracy theories claiming that he has been dead all this time but the family had been covering it up to avoid paying the inheritance tax right away while others say that the heirs were keeping him alive as long as possible so that they maintain power in the company.

👌 ENTERPRISE RECOMMENDS

Check out Netflix’s new series Maid + Big Ramy is Mr. Olympia for second year running.

📺 ON THE TUBE TONIGHT-

(all times CLT)

Netflix’s new series Maid is a story about abuse, family, and asking for help: The show follows Alex, a single mother who leaves an abusive relationship and ventures off to start a life for her and her three-year-old daughter. The journey proves difficult, with her mother being her initial go-to for help as she lands a job as a maid to provide for herself. As you can imagine, the job is less than lucrative and Alex faces daily struggles with her clients and, more importantly, her wallet — viewers share the sense of financial urgency as the young mother’s dwindling bank account balance displayed on the screen as she buys supplies, food, or gas. Throughout this, Alex is fighting a custody battle with her ex-boyfriend and the show explores her relationship with him, her father, and a man who likes her as a way to show how each figure impacted her life and decisions. With amazing acting, a relatable story-line, and plot twists throughout, the show is a must-watch for its depiction of the real-life difficulties of independently building a future.

The UEFA Nations League draws to a close tonight: Spain will play against France in the league’s final at 9:15pm, preceded by the third place match between Italy and Belgium at 3pm.

We also recommend this World Cup qualifiers match: Colombia and Brazil will hit the field tonight at 11pm.

💪🏽 KUDOS- Mamdouh Elssbiay (aka Big Ramy) took home the Mr. Olympia trophy for the second time in a row this weekend, according to Barbend.

🥪EAT THIS TONIGHT-

Shawarma and hawawshy lovers will revel in this hidden New Cairo gem. Caizo is located in Platz, the open-air food court behind Petrosport Club, and is an aromatic experience even before you get a hold of your food. The food truck has become known for their shawarma — which can be likened to that of the famous Abo Haidar — and their deliciously-spiced hawawshy. We recommend getting a container of their pickles and a mango juice for an ultimate Egyptian comfort food experience. The food court itself is a great place to visit: With various food and drink vendors, from Starbucks to a pizza place, you can sit on benches in a green space that reminded us of a picnic spot more than the common brick-and-mortar retail spaces popping up everywhere.

🎤 OUT AND ABOUT-

(all times CLT)

It’s rock night at El Sawy Culturewheel: Musician Ali Arafa and rock band Hardcase will take over the culturewheel’s River Hall in Zamalek tonight at 10pm and perform covers of your favorite artists including Slash, Eagles and many more, in addition to playing original songs by Ali Arafa.

The Cairo Opera House is celebrating its 33rd anniversary with a gala concert that includes duets from famous operas tonight at 8pm. You can buy tickets from here.

Today is your last day to catch D-CAF’s New Media Arts exhibitions at Consoleya. The exhibitions, which include one on X-Ray fashion from Denmark, a VR experience from France, and a third titled “Embraces” from Denmark, close tonight.

Tomorrow, D-CAF hosts two performances from France: Akzak (8pm) and Ko Shin Moon (9:30pm). Akzak, which refers to the irregular cadences in Balkan music, is a choreography piece that will be performed at the Tahrir Cultural Center’s Falaki Theater at 8pm. Ko Shin Moon, which first came to life in 2017, is a musical performance that combines traditional Indian string music and electronic music. Ko Shin Moon will be performed at the newly-renovated Rawabet Art Space at 9:30pm.

💡 UNDER THE LAMPLIGHT-

Poking fun at workplace emails using wit and humor, Per My Last Email by Stephanie K. Wright gathers and breaks down commonly used corporate email terms and phrases. Many originate from the dot com era, while others came after with the rollout of new technologies. Regardless of when these phrases originated, the common thread is their ability to make you sound like a robot that lives in an email inbox, she argues. The book will make you laugh (and give you advice and ideas for new ways to phrase “let’s circle back” along the way), but has a hidden depth and raises questions about the acceptable communication methods society has integrated into their life throughout the years.

🌊 GO WITH THE FLOW

The market on 10 October 2021

The EGX30 rose 1.2% at today’s close on turnover of EGP 939 mn (39.3% below the 90-day average). Foreign investors were net sellers. The index is down 1.7% YTD.

In the green: Egyptian Kuwait Holding-EGP (+5.6%), AMOC (+2.8%) and Mopco (+2.8%).

In the red: Rameda (-2.4%), GB Auto (-2.0%) and Orascom Development Egypt (-1.4%).

💻TECH

On today’s episode of Black Mirror: The Reality TV version

Attack of the Voice Clones? Voice cloning — using a computer program to create a synthetic, adaptable version of a real person’s voice — has become notably more sophisticated in the last few years. And with this, a handful of tech companies are racing to develop new products that will let people replicate — and often monetize — their voices. But as voice cloning software becomes more widely used, we’re likely to see more Black Mirror-type questions arise about consent and the appropriation of personal data.

Recently, voice-cloning tech has come on in leaps and bounds: There’s a stark difference between the tech used just four or five years ago and that used today, digital voice company VocaliD’s founder Rupal Patel tells Radio New Zealand (listen, runtime: 07:23). “The main thing is the cloned voices are actually modelling phrasing and intonation — these things are key to the believability of a voice.”

Ever dreamed about just sending a clone to do your work for you? “While celebrity Y is sleeping, their voice might be out and about, recording radio spots, reading audiobooks, and much more,” the president of AI company Veritone tells tech news outlet The Verge. One American voiceover artist and actor sees voice cloning as a way to “future proof” his career, he tells the BBC. He imagines generating passive income by sending the voice clone off to do jobs for him — especially if he finds himself double booked, he says.

Celebrities are also gaining back lost voices: Hollywood actor Val Kilmer, who lost his voice after surgery for throat cancer in 2015, had it digitally restored last year by UK-based software firm Sonantic. “Val’s team wanted to give him his voice back so that he could continue creating,” says Sonantic’s CEO Zeena Qureshi.

So how exactly do you clone a voice? Recorded audio material of the person is fed into the voice cloning program, along with a transcript of what they’re saying, says Patel. The program’s neural network can then map the way the person pronounces different sounds, learning how that particular person speaks, she adds. Programs like the one used by VocaliD usually use a “base model” of speech production, which can then be adapted using the audio data fed to them. The more data the program is fed, the more the cloned voice will sound like the original subject, says Patel. “You can build a voice with as little as a few minutes or seconds of audio,” she adds.

And how’s it being used? Cloning specific voices goes a step beyond the speech synthesis — or artificial production of human speech — responsible for creating Siri or Alexa. Veritone’s recently-launched platform, Marvel.AI, lets people generate voice clones, which they can then license as they like, The Verge reports. The idea is for cloned voices to be stored on Veritone’s systems, available to generate audio material whenever the customer wants. There’s even the chance that one day people could submit requests to buy and use the cloned voices. Veritone anticipates a huge market for this service — especially among digital influencers, athletes, celebrities, and actors.

But these new developments come with their own set of ethical questions, like whether it’s okay (or a bit too much like a Black Mirror episode) to clone the voice of someone who’s passed away. Earlier this year, news that a documentary about the late chef Anthony Bourdain made use of voice cloning tech to create a snippet of dialogue prompted widespread criticism, AP reports. Director Morgan Neville appeared to dismiss any ethical concerns about his not having consent from Bourdain to clone his voice. And Bourdain’s widow flatly denied Neville’s claims that he had obtained her approval to do so.

And they could open the door to more cybercrime: the rise of voice clones could also make certain kinds of cybercrime easier to commit and harder to detect, the BBC notes. Verbal conversations have long been seen as an almost foolproof way to verify a person’s identity, in contrast to email or text messages. Voice cloning now represents a substantial threat to this, with one 2019 high-profile incident of fraud seeing a UK manager tricked into transferring EUR 220k to fraudsters who used a cloned copy of his boss’ voice. Increasingly, companies are being advised to monitor audio to assess whether it could be fake, while Europol is urging EU states to invest significantly in tech designed to detect deepfakes.

📆 CALENDAR

October: Romanian President Klaus Iohannis could visit Egypt mid this month to discuss ways to boost tourism cooperation between the two countries.

9-15 October (Saturday-Friday): Turathna Exhibition, Egypt International Exhibition Center, Cairo, Egypt.

11-17 October (Monday-Sunday): IMF + World Bank Annual Meetings.

12-14 October (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

13 October (Wednesday): Meeting of G20 Finance Ministers and Central Bank Governors, Washington DC, US.

Mid-October: The Egyptian Banking Institute, the Financial Services Institute, and I-Score will begin airing in mid-October the Digital Credit Scoring Webinar Series, a line-up of webinars on the banking sector and banking regulations.

18 October (Monday): E-Finance begins trading on EGX.

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

24-28 October (Sunday-Thursday) Cairo Water Week, Cairo, Egypt.

27-28 October (Wednesday-Thursday) Intelligent Cities Exhibition & Conference, Royal Maxim Palace Kempinski, Cairo, Egypt.

28 October (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

28 October (Thursday): Second tranche of overdue subsidy payouts will be handed to eligible exporters.

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

30-31 October (Saturday-Sunday): G20 Leaders’ Summit, Rome, Italy.

31 October (Saturday): World Cities Day, Luxor, Egypt.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt.

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

15-21 November (Monday-Sunday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

29 November-2 December (Monday-Thursday): Egypt Defense Expo, Egypt International Exhibition Centre.

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

8-10 December (Wednesday-Thursday): Global Forum for Higher Education and Scientific Research (GFHS), Cairo, Egypt.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

16 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

1Q2022: Launch of the Egyptian Commodities Exchange.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

19 February 2022 (Saturday): Public universities begin the second term of the 2021-2022 academic year.

1H2022: The World Economic Forum annual meeting, location TBD.

22-24 April 2022: World Bank-IMF spring meeting, Washington D.C.

May 2022: Investment in Logistics Conference, Cairo, Egypt

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

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