Monday, 16 August 2021

EnterprisePM — Egypt plans to vaccinate a third of the population in three months.

TL;DR

WHAT WE’RE TRACKING TONIGHT

Welcome to the accidental covid watch issue, ladies and gentlemen, as a number of positive Egypt-related pandemic news led the conversation today.

THE BIG STORY TODAY- The Health Ministry appears to be planning a massive vaccination campaign, announcing plans to dole out at least one dose of a vaccine to more than a third of the population in under three months. Some 35 mn people would receive a shot in just 88 days, under the plan.

MORE GOOD NEWS on that front, as Russia’s covid committee has deemed us safe enough to raise the number of direct flights to Egypt’s resorts to 15 flights. We have both stories in today’s Speed Round.

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

  • Unemployment rates remain flat: Unemployment rates for 2Q2021 only fell by 0.1 percentage points relative to last quarter reaching 7.3%. However, it is nowhere near where we were last year with an unemployment rate of 9.6% for 2Q2020.
  • New sanctions to Securities companies: The companies could face sanctions if they don’t join the Egyptian Securities Federation (ESF). The news comes after the ESF submitted a proposal to the Financial Regulatory Authority (FRA). Specifics are yet to be determined.
  • Geely cars will now be sold by Abou Ghali Motors: The chinese carmaker announced the deal with Abou Ghali Motors in a statement (pdf). The new agreement comes less than two weeks after GB Auto refused to renew its contract with Geely.

THE BIG STORY ABROAD- A number of countries have evacuated their citizens and closed their embassies in Kabul, including Saudi Arabia, the UK and Finland, following the Taliban’s seizure of the capital city. Governments are continuing to organize flights to evacuate their citizens despite the shuttering of Hamid Karzai International Airport and the suspension of international flights, according to CNN.

Escaping is becoming dire over there: While the international press is playing up the Saigon comparison to death, it’s hard not to draw comparisons when a number of Afghan men fell to their death after clinging to the exterior of the aircraft. Videos circulating on social media showed people running after planes as they take off, in hopes of fleeing the country.

Meanwhile, an Afghan plane crashed today in Uzbekistan, Sky News Arabia reports. Sources told Russian news agency TASS that the reason behind the crash is still unknown and is currently being studied.

🗓 CIRCLE YOUR CALENDAR-

The annual gathering of central bankers and monetary policymakers at Jackson Hole will kick off on Thursday, 26 August. In a sign that worries about covid might have subsided, the event will be held in “a modified, in-person program” this year, after it went fully-virtual last year for the first time. This year’s symposium will focus on “Macroeconomic Policy in an Uneven Economy," though very little detail has been made public on what that actually entails. We expect inflation and worries over the Delta variant will also feature heavily during the discussions. This is only major event macro policy watchers need to keep keeping an eye, with August generally lacking in business-related events.

🚙 FOR YOUR COMMUTE-

Stagflation—when inflation rises even as economic growth and employment rates stagnate or decline—could become the new reality for EM economies. Rising commodity prices, the pandemic, governments’ limited scope for spending, the knock-on effects of developed economies’ fiscal policies, and climate change are combining to create a perfect stagflation storm in the developing world, Indian economist Jayati Ghosh writes in Foreign Policy. She says stagflation is already apparent in countries like Saudi Arabia, Mexico, South Africa, the Philippines and Brazil.

Global monetary tightening could make things worse: Adding to the pressure on EMs is the likelihood of monetary policy tightening as the commodities boom drives inflationary pressures. And when the Fed does eventually tighten policy, the negative effect on EMs is “inevitable,” Ghosh writes.

We’re inflating but not stagnating: Egypt has so far managed to dodge stagflation. Inflation did hit a year-to-date high in July and expectations are that it will continue to rise on the back of the hike in global commodities as well as domestic price increases. That said, the IMF is projecting a “strong rebound” for Egypt in FY2021-2022, with GDP coming in at 5.2%.


Africa’s huge new internet cable is going to be bigger than we thought: The 2Africa subsea cable being installed by a consortium of global telecoms firms — among them, Telecom Egypt — will be bigger than planned, according to a statement (pdf) out this morning which announced new connections to the Seycelles, the Comoros, Angola and Nigeria. The 37k-km cable, which is being installed by companies including Facebook, Orange, Vodafone, and China Mobile International, will run along the entire African coast, connecting the continent with several European countries and the Arabian Peninsula. It is expected to significantly expand broadband and mobile networks across Africa when it comes online in 2023-2024.

TE is ahead of schedule laying its section of the cable, announcing in December that it had connected the landing sites on the Mediterranean and the Red Sea via a terrestrial link. The company will now lay a sub-sea cable to diversify the connection

📺 ON THE TUBE TONIGHT-

Oscar-winning documentary Icarus explores the dark side of athletics: The documentary was first meant to follow Bryan Fogel as he explores doping in sports. However, a chance encounter with a Russian scientist leads him to discover a conspiracy that turns the documentary into more of a geopolitical thriller. The two-hour film explores the 2014 revelations that Russian authorities had engaged in systematic doping at the Sochi Winter Olympics, a story that became one of the biggest scandals in modern sporting history and saw Russia banned from competing in international athletics events.

Tonight in La Liga: Villareal kick off the new season by hosting Granada in a game that kicks off at 8pm. Later on, Elche and Athletic Club kick off at 10pm.

Matchday 2 of the Premier League and Matchday 3 of France’s Ligue 1 (attention Messi watchers) will resume this weekend, while Italy’s Serie A will kick off on Saturday, 21 August.

🎤 OUT AND ABOUT-

Good news for film lovers: Zawya arthouse cinema in Downtown Cairo announced yesterday it’s kicking off September with a retrospective of legendary director Stanley Kubrick. The seven films being screened include Dr. Strangelove, 2001: A Space Odyssey, and The Shining — with some being shown for the first time on Cairo’s big screen.

Rock and blues group Hardcase are playing at Room New Cairo at 9pm this evening, with tickets going for EGP 150.

And it’s Afrolatin night over at the Sheraton in Dokki, with salsa, bachata and kizomba tunes playing from 8pm. Entry price after registration is EGP 150, and details on how to register are on the event Facebook page.

💡 UNDER THE LAMPLIGHT-

Feeling sad could be part of the evolutionary process: Good Reasons for Bad Feelings is written by Dr. Randolph Nesse who helped to establish the field of evolutionary medicine. In his book, Nesse attempts to reexamine how we think of mental disorders by asking why natural selection has left us all with fragile minds. Negative emotions such as anxiety can be beneficial in certain situations, causing us to make better decisions or protect us from harm, which can be explained from an evolutionary standpoint. Other conditions such as addiction and anorexia result from the mismatch between modern environment and our ancient human past, Nesse argues, while the persistence of disorders such as schizophrenia have evolutionary explanations.

☀️ TOMORROW’S WEATHER- … is the same as today’s: Expect daytime highs of 39°C and nighttime lows of 25°C in Cairo tomorrow, our favorite weather app tells us. Sahel will see daytime temperatures of 31°C and nighttime lows of 22°C.

COVID WATCH

Egypt’s vaccination targets are only getting more ambitious

Egypt aims to hand out at least one dose of a vaccine to more than a third of the population in under three months, the Health Ministry said in a statement today. Under the government’s new plans, some 35 mn people would receive a shot in just 88 days.

This is slightly more ambitious than previous targets: Prime Minister Moustafa Madbouly said in July that the government is aiming to inoculate 40% of the population by the end of the year.

This is going to require a serious step-up: Health centers across the country managed to vaccinate 155k people on Sunday, up from 100k on Thursday. The government will need to increase this to around 800k each day if it is going to hit the new target.

And a lot more vaccines: The country is expecting new doses of Sinovac and Pfizer to arrive in August. The 2.5 mn-dose batch of Pfizer jabs, slated for mid-July, could arrive in the coming days. The country was expected to receive 1 mn doses of the Sinovac vaccine in late July. This is in addition to a second 700k dose batch of the Johnson & Johnson vaccine.

The current count: Egypt has so far imported almost 8.8 mn shots, according to Enterprise’s vaccine tracker. State-owned vaccine maker Vacsera has also produced some 10 mn Sinovac shots, and aims to manufacture 15 mn each month starting August.

More vaccination centers are going to help: The country now has 580 vaccination centers administering shots nationwide, compared to a previous 539, the ministry said.

The story so far: As of earlier this month, some 6 mn people had received at least one dose of a covid vaccine, up from the 4.5 mn at the beginning of July. The government was initially hoping to vaccinate 20% of the population by this month.

Some 90% of eldery residents in nursing homes are vaccinated, the statement read. The elderly and those with chronic conditions started to get their vaccines in early March. Teachers and school staff are now being made a priority ahead of the start of the new academic year next month.

SPEED ROUND: TOURISM

Russia triples flights to Hurghada, Sharm El Sheikh

Russia will triple the number of weekly flights from Moscow to Sharm El Sheikh and Hurghada starting 27 August, RT reports, citing a statement from Russia’s covid advisory panel. The committee named Egypt as one of five countries to see an increase in Russian passenger flights, with each of the two Red Sea resorts now set to welcome 15 planes carrying Russian tourists weekly.

The news comes just a week after Egypt welcomed the first direct flights between Moscow and its Red Sea resorts in six years as Russia’s flight ban finally came to an end. Russia completed health checks on Red Sea airports and hotels at the start of August, and now appears to be making good on its promise that if the checks went well, weekly flights to the tourist hotspots would increase.

CATCH UP QUICK-

ADVISOR WATCH: HC Securities and UK financial services firm Nomura International advised MAC Beverages in the recent sale of its 52.7% stake in Coca-Cola Bottling Company of Egypt (CCBCE) to Coca-Cola Hellenic Bottling Company (HBC), Enterprise learned today. Coca-Cola HBC last week agreed to buy approximately 94.7% of the company for USD 427 mn. Matouk Bassiouny & Hennawy and Clifford Chance LLP acted as legal counsel to CCBCE, while Zulficar and Partners, Mena Associates – Amereller, and Sullivan & Cromwell LLP acted as counsel to the buyer.

Odin Investments is studying the potential launch of an EGP 200 mn fund in partnership with Eastern Company and EgyptAir next year, Odin senior financial analyst Karim Hashem confirmed to us. The fund would make consumer finance and microfinance loans available to Eastern Company and EgyptAir employees. New Odin acquisition Alpha Capital would manage the fund, which is targeting AUM of EGP 500 mn by the end of next year.

GO WITH THE FLOW

Fawry, MM Group, ODE all report stellar earnings in 2Q2021

EARNINGS WATCH- Fawry’s net income rose 7% to EGP 51.4 mn in 2Q2021, up from EGP 47.9 mn in the same period last year, according to its financials (pdf). Revenues jumped 35% to EGP 393.6 mn in the April-June period, up from EGP 291.3 mn last year. The modest earnings increase follows a bumper first quarter for the e-payments giant, which more than doubled its bottom line to EGP 76.1 mn.

MM Group’s net income rose 11% to EGP 114 mn in 2Q2021, up from EGP 103 mn in the same period last year, according to the company’s earnings release (pdf). Revenues rose slightly during the quarter, hitting EGP 1.43 bn from EGP 1.4 bn last year.

B Investments’ net income fell almost 75% to EGP 21.9 mn in 2Q2021 from EGP 85.3 mn last year, according to the company’s financial results (pdf). Revenues suffered a 60% drop, reaching EGP 37.6 mn from EGP 93.3 mn in 2Q2020.

Orascom Development Egypt saw its bottom line quadruple to EGP 306.1 mn in 2Q2021, up from EGP 76.5 mn in the same period last year, according to the company’s earnings release (pdf). Revenues jumped by over 50% to reach EGP 1.5 bn in 2Q2021, compared to EGP 1 bn last year. Top line growth was driven by a strong performance in the company’s real estate segment, which saw revenues grow 80% to EGP 1.1 bn, as well as a slight recovery in its hotel’s business.

Diagnostics and healthcare firm Speed Medical’s bottomline jumped to EGP 67.2 mn in 2Q2021, compared to EGP 14.1 mn last year, according to the company’s financial results (pdf). Revenues also rose to EGP 109.7 mn in 2Q2021, compared to EGP 34 mn in 2Q2020.

Porto Group reported a net income of EGP 52.9 mn after posting a EGP 8.4 mn loss in the same period last year, according to the company’s financial results (pdf). Revenues jumped to over EGP 397 mn in 2Q2021, compared to EGP 129.5 mn in the same period of 2020.


MARKET WATCH-

The EGX30 rose 0.1% at today’s close on turnover of EGP 2 bn (33.2% above the 90-day average). Local investors were net sellers. The index is up 1.9% YTD.

In the green: Egyptian for Tourism Resorts (+5.7%), Credit Agricole (+2.8%), and Orascom Development (+2.0%).

In the red: CIRA (-2.6%), GB Auto (-2.2%), and AMOC (-2.1%).

LIFE

There is such a thing as watching too much Disney: A growing number of people are treating their pets as humans and entire industries are springing up to cater to this niche market. From human names and gourmet cuisine to pet hotels and beauticians, the occasionally absurd trend towards pet anthropomorphism is bringing new meaning to the phrase “creature comforts.”

Why have a kid when you can have a pet? According to the Economist, millennials are delaying getting married and having children, as they now channel their time and emotional energy to their pets instead of a child. Long working hours are easier to navigate with a pet than with a child as young people are opting for flexible work rather than the typical 9-to-5 jobs, especially as some companies including Google now allow dogs in the office, while others offer doggie daycare.

People spend bns of USD every year on pet food alone: Pet owners spent almost USD 97 bn on food last year, and the global industry is expected to grow by 4.8% each year by 2026.

The Egyptian market is still in its infancy, but it’s growing: Recent market research estimated the value of Egypt’s pet food market at USD 273 mn in 2019, and this is expected to increase by 3.8% each year during the first half of this decade as the popularity of pet ownership grows among the wealthier segments of society.

Naming your pet in 2021: Why name your cat Fluffy and your dog Rex when you can plump for a human name like Moshira, Shalaby, or Abdo?

Pet treats for everyone: Apparently some pet food has become so luxurious that it is fit for human consumption. We highly recommend that our readers try Ben & Jerry’s dog ice cream. And this home recipe for dog doughnuts will have your mouths watering.

Your cat needs to go on a diet: Of course we need to watch what — and how much — our pets eat. And if your cat has put on a few pounds, there’s nothing wrong with seeking professional help. But when we start hearing about people putting their pets on paleo and Atkins diets designed for humans, the trend towards animal diet planning might have gone too far.

Struggling to connect with your cat on a deeper emotional level? There’s an app for that. Tably uses machine learning and the feline grimace scale to help cat owners better understand their emotions.

Want to mollycoddle your animal? Here are some products you probably don’t need. Just as parents worry about their children’s health, pet owners are investing more than ever in the wellbeing of their pets. You can spend hundreds of USD on a memory foam mattress for your dog or a shampoo to keep the dandruff away.

The pet pampering industry is also growing here in Egypt: From a dog school, dog boarding in Sahel to physiotherapy, fitness and spas, the Egyptian market for five-star pet grooming and professional rehabilitation centers is expanding. Celebrating your pets birthday is now a thing in Egypt with these custom made bone-shaped cakes.

Want to go out with your dog? Check Ampersand’s pet menu on Instagram, where you can buy your dog some ice cream and peanut butter. Airbnb for pets? Pet shelters have evolved into being pet hotels where you can find caretakers to look after them while you’re on your travels. And Pettech is also a thing: Fluffy Sitters is an online platform that allows pet owners to search for and connect with pet sitters.

CALENDAR

26-28 August (Thursday-Saturday): Jackson Hole Economic Symposium.

September: Delegation of Russian companies to visit Russian Industrial Zone.

1-3 September (Wednesday-Friday): Digi Sign Africa, Cairo International Convention Centre, Cairo, Egypt.

2 September (Thursday): The new EGX mechanism for calculating closing share prices will come into effect.

3-5 September (Friday-Sunday): The World Karate Federation will hold the third competition of the 2021 Karate 1-Premier League in Cairo.

5-7 September (Sunday-Tuesday): The Arab Security Conference, The Nile Ritz-Carlton, Cairo, Egypt.

7-8 September (Tuesday-Wednesday): Euromoney Conferences will host the GlobalCapital Sustainable and Responsible Capital Markets Forum 2021, featuring Vice Minister of Finance Minister Ahmed Kouchouk.

7-9 September (Tuesday-Thursday): Egy Health Expo, Al Manara International Conference, Cairo, Egypt.

9 September (Thursday): DevOpsDays Cairo 2021 is being organized by ITIDA and the Software Engineering Competence Center in cooperation with DXC Technology, IBM Egypt and Orange Labs.

12 September (Sunday): International schools begin 2021-2022 academic year

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

15 September (Wednesday): The CFO Leadership & Strategy Summit is taking place in Egypt.

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

21-22 September (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

22-25 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo, Egypt.

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

30 September-8 October (Thursday-Friday): The Cairo International Fair, Cairo International Conference Center, Cairo, Egypt.

30 September: Closing of 2021’s first oil and gas tender in the Gulf of Suez, Western Desert, and the Mediterranean.

October: New legislative session begins.

1 October (Friday): Businesses importing goods at seaports will need to file shipping documents and cargo data digitally to the Advance Cargo Information (ACI) system.

1 October (Friday): Expo 2020 Dubai opens.

1 October (Friday): State-owned companies and government service bodies selling goods and services to customers that have not yet signed on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

6 October (Wednesday): Armed Forces Day.

7 October (Thursday): National holiday in observance of Armed Forces Day.

9 October (Saturday): Public schools begin 2021-2022 academic year

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

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

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.

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

31 October – 12 November (Sunday-Friday): The 26th UN Climate Change Conference, Glasgow, UK.

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.

29 November-2 December (Monday-Thursday): Egypt Defense Expo.

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

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.

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

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

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

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.

**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. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.