Monday, 27 September 2021

EnterprisePM — El Sisi inaugurates Bahr El Baqar — the world’s largest wastewater plant.

TL;DR

🔎 WHAT WE’RE TRACKING TONIGHT

The EGX30 is down 1.4% today as global energy shortages and supply chain disruption dominate the conversation in the local business press and market watchers sound the alarm. Foreigners were naturally net sellers, while regional investors were net buyers.

We can only be thankful for other local headlines that were a ray of sunshine compared to what’s happening abroad.

THE BIG STORIES TODAY-

#1- President Abdel Fattah El Sisi inaugurated what Guinness World Records says is the world’s largest wastewater plant. Bahr El Baqar wastewater treatment plant, built by our friends at Orascom Construction and Arab Contractors, will treat around 5.6 mn cbm/d of water, which then will be used to irrigate agricultural land in Sinai. The plant will contribute to the reclamation of 400k acres as part of the national project to develop Sinai and to make the most use of the state’s water resources.

^^We’ll have more on the story in this week’s Hardhat Project Profile.

#2- Flat6Labs announced the second close of its Tunisia-based Anava Seed Fund, during which it raised USD 7 mn with VC Sawari Ventures participating, the company announced (pdf). The fund was launched in 2017 with the aim to invest in 75 Tunisian early-startups in a five-year period. Since its launch, the fund invested in over 50 startups in Tunisia operating in 22 sectors between fintech, education, delivery services and aeronautics, which have created over 500 jobs.

#3- The National Bank of Egypt, Banque Misr and Banque du Caire are launching a EGP 1 bn fund that will invest in fintech startups next month, according to a statement (pdf). The fund will target Egyptian and regional startups, with the statement implying investments in MENA and Africa. The three largest state-owned banks are calling for other banks to participate in the fund.

^^We’ll have more on those two stories in tomorrow’s EnterpriseAM.


THE BIG STORY ABROADThe UK is readying to deploy the army as people panic buy petrol causing up to 90% of stations to run out of fuel. Hundreds of soldiers will be deployed to drive oil tankers under a contingency plan called Operation Escalin, the Financial Times reports, citing government insiders. However, the military may not have the necessary skills to do the job, especially in processes such as unloading, Brian Madderson, chair of the Petrol Retailers Association said.

What’s happening? Beyond the energy crisis that has been plaguing Europe these past few weeks due to Russians turning the spigot, there appears to be a shortage of truck drivers post-Brexit, writes Reuters. The combination appears to be driving panic buying at the pump.

Europe’s energy crisis could expand to the rest of the world, warns Stephen Stapczynski for Bloomberg Businessweek. “In China, industrial users including makers of ceramics, glass, and cement may respond by raising prices; households in Brazil will face expensive power bills. Economies that can’t afford the fuel—such as Pakistan or Bangladesh—could simply grind to a halt,” he notes.

Electricity crisis in China excallates: As we noted yesterday, China itself may be running into an electricity crisis of its own as provinces have begun enforcing electricity cuts on industries. The shortages would force companies to raise prices of goods for Chinese consumers and quicken inflation, the People’s Daily, the official newspaper of the Chinese Communist Party, said in an editorial published on Sunday, according to Bloomberg. The crisis has now reportedly hit residences who are seeing power cuts with the northern provinces of Liaoning, Jilin and Heilongjiang having suffered blackouts over the weekend.

Expect the word ‘contagion’ to be thrown around more and more these days: This has raised fears over a global financial meltdown that could rival the one that came with the China Evergrande. The specter of a worsening global supply chain that is already reeling from the impact of covid is also weighing high on analysts.

Nymex natgas futures for October contracts jumped 4.82% today to USD 5.39 per MMBtu, as of dispatch. November Brent Crude contracts rose 1.69% to USD 79.4/bbl, while West Texas Intermediate topped USD 75 a barrel after a run of five weekly gains.

We should really be paying attention to this: Goldman Sachs raised its forecast for year-end Brent crude oil prices to USD 90 per barrel from USD 80 as the global fuel demand recovery surpasses expectations, according to Reuters, citing a note published yesterday. “While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected,” the note said.


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

  • Ezdehar to reach first close on second fund by November: The private equity firm expects its Ezdehar Egypt Mid-Cap Fund II to reach first close with USD 100-120 mn in commitments from limited partners.
  • CBE to launch mobile contactless payment: Merchants will soon be able to accept contactless payments through their mobile devices as the Central Bank of Egypt will begin issuing licenses allowing mobile contactless payments.
  • Amanat is on the lookout for Egyptian education, healthcare firms: Dubai-listed firm Amanat could invest around AED 1 bn (EGP 4.3 bn) to acquire controlling shares in Egyptian, Saudi, and Emirati firms.

FOR TOMORROW- The deadline to register for the AUC Business School’s Private Equity Diploma.

🗓 CIRCLE YOUR CALENDAR-

Winter retail opening hours in effect this week: Shops and restaurants will have to close a little earlier from the end of this week when winter opening hours come into effect this coming Thursday. Shops and malls will close one hour earlier at 10pm (11pm on Thursdays, Fridays and national holidays) while cafes and restaurants will shutter at midnight rather than 1am. As during the summer, essential services such as grocery stories, supermarkets and pharmacies are exempt from the rules and can open and close their doors when they want.

White House National Security adviser Jake Sullivan will visit Cairo this week as part of a brief Middle East tour that will take him to Saudi Arabia and the UAE, sources with knowledge of the matter tell Axios.

Conference season continues this week:

  • ITIDA’s DevOpsDays Cairo 2021, will take place on Wednesday, 29 September.
  • The Cairo International Fair opens on Thursday, 30 September at the Cairo International Conference Center. It runs through 8 October.
  • The Egypt Projects 2021 construction expo also opens on Thursday at the Egypt International Exhibition Center and wraps on Saturday, 2 October.
  • Dubai’s Expo 2020 opens on Friday, 1 October. The event, which takes place somewhere on the planet once every five years, runs for six months and will be open seven days a week. You can learn more here.

YOUR FALL CALENDAR-

PSA #1- Next week is a short work week. You can expect to have a three-day weekend 7-9 October in observance of Armed Forces Day, which is on 6 October. Folks whose workdays are tied to banks and the market can expect confirmation from the Central Bank of Egypt and EGX early next week.

We’re inching closer to the end of 3Q2021 and the beginning of another month. Here are some of the key dates coming up in October:

  • MPs and senators are returning from recess to start the new legislative session: The House of Representatives will reconvene on Saturday, 2 October and the Senate will be back in session Tuesday, 5 October.
  • PMI: September’s purchasing managers’ indexes for Egypt, Saudi Arabia and the UAE will land on Tuesday, 5 October.
  • Foreign reserves: September’s foreign reserves figures will be out sometime during the first week of October.
  • Inflation: Inflation figures for September will be released on Sunday, 10 October.
  • IMF + World Bank meetings: The IMF and the World Bank will hold their annual meetings during the week beginning 11 October.
  • Interest rates: The Central Bank of Egypt will meet to review interest rates on Thursday, 28 October.

PSA #2- Your commute is going to get worse at the end of next week. Public schools are back in session for the fall term on Saturday, 9 October.

A little further out: 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.

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

☀️ TOMORROW’S WEATHER- The midweek will pretty much be the same as the rest of the week, with highs of 33°C and lows of 22°C.

🚙 FOR YOUR COMMUTE

With a significant rise in investor redemptions, SPACs are losing their appeal, according to the Financial Times. Listed SPACs are usually placed on a trust that pools investor funding ahead of a merger. Those investors appear to be pulling out, with 52.4% of investors redeeming their funding in 3Q2021, up from only 10% in 1Q2021 and 21.9% in the second quarter, according to Dealogic data cited by the salmon-colored paper. Earlier this year, about USD 100 bn worth of SPACs were listed, something we’ll likely never see again, according to an unnamed Wall Street banker.

Why the retreat? The companies choosing to merge with SPACs are not getting what they thought they would. Startup eFFECTOR Therapeutics, for example, which raised USD 175 mn ended up with USD 5.2 mn after 97% of shareholders decided to redeem their shares.

This declining popularity comes as a number of EMs (including Egypt) want to codify the use of SPACs. EGX boss Mohamed Farid suggested amendments to listing rules that would allow for SPACs. Dubai-based Shuaa Capital had plans to establish three SPACs worth USD 200 mn, Bloomberg noted earlier this summer. Meanwhile, the Singapore Stock Exchange amended its listing framework earlier this month to allow listings through SPACs.


Working women are experiencing more burnout than their male counterparts, according to an annual Women in the Workplace study by McKinsey and LeanIn. Around 42% said they felt burnt out often or always, compared to 35% of men. The exhaustion felt by women lessened as they climbed the ranks, with entry level employees feeling the sting more acutely than C-suite executives. One third of women considered abandoning or downshifting their career in the past year while 27% of men said the same. Parents had it harder, with the US seeing a 4.6% decline in working mothers with children under the age of 18.

This has paved the way for more women to find alternative career routes: A silver lining is apparent, with women rushing to launch businesses during the pandemic as they decided to funnel their creativity and motivation in something they were more passionate about. Around 50% of new businesses opened in the US during 2020 were female-run, compared to 27% in recent years, according to a study by Gusto. Of those, 47% were owned by minorities.

The study found that the desire for work from home is strong: Post-pandemic, two-thirds of women said they want to work remotely at least three days a week.

The sentiment is just as great in Egypt: An Enterprise and Bupa Egypt Insurance poll that looked at women’s health in the workplace found that 77% of respondents would like for work from home policies to extend beyond the pandemic. WFH continued to be one of the main benefits that could be offered at a workplace, with 67% suggesting that having the option of remote work when needed would help retain employees.


Even Apple can’t get workers to jump back into the office willingly: A fight is brewing inside Apple as the tech giant orders its workers back to the office for three days a week, a Vox Recode piece details. The normally heads-down Apple employees pushed back at the requirement with petitions and, in some cases, resignations. Over 7k Apple employees participate in an internal “remote work advocacy,” corporate Slack group where they air out their frustrations with management work from the office, and how other companies are offering more flexible arrangements.

Apple won’t lose much, but other companies will: The company’s hard-to-beat pay, benefits, and prestige will likely see it retain most of its workforce, or at least easily replace the dropouts. However, other companies who follow in Apple’s footsteps around the remote work policy won’t be as lucky.

👌 ENTERPRISE RECOMMENDS

📺 ON THE TUBE TONIGHT-

(all times CLT)

It’s a light day today ahead of an epic day in UEFA Champions League tomorrow: The Premier League is wrapping up its sixth week with Crystal Palace and Brighton hitting the field at 9 pm, with the latter might leading the league with a single point over Liverpool in case the team wins.

Meanwhile, Celta Vigo and Granada face each other in La Liga at 9 pm tonight.

🎤 OUT AND ABOUT-

(all times CLT)

Performance art theatre irtigalia is celebrating its third anniversary tonight at 9 pm at the Tap West in Sheikh Zayed with an improv comedy performance by Ramsi Lehner. After that, DJ Nakhla will take on the decks for the rest of the night.

It’s afrobeats and reggaeton night at Cairo Jazz Club in Agouza with music band BubbleGum Kollectiv taking on stage at 8 pm.

💡 UNDER THE LAMPLIGHT-

Remember when Google’s motto was “Don’t be Evil''? With Google celebrating its 23rd birthday this week (thanks Doodle), we thought it would be a good idea to catch up on the early years of the tech giant with The Google Story by David A Vise. This biography of the company charts its early history and the trials and tribulations of founders Sergei Brin and Larry Page and how the world’s most reliable was born out of a simple solution to the chaos of the emerging web.

This is a story of a different era in tech, back when tech founders and corporations were hailed as a force of positive change with altruism being the primary motive. It really makes a point to remind the reader of the company’s old motto and the founders’ roots as Burning Man enthusiasts. While it does touch on some of its later controversies (the privacy backlash of Gmail), it presents these as necessary problems that can be solved through engineering — a far cry from their current reputations as all-powerful, anti-competitive, invasive, advertising revenue pursuing machines whose algorithms are basically destroying human culture.

🌊 GO WITH THE FLOW

The EGX30 fell 1.4% at today’s close on turnover of EGP 1.27 bn (20% below the 90-day average). Regional investors were net buyers. The index is down 3.2% YTD.

In the green: GB Auto (+1.0%).

In the red: Ezz Steel (-9.9%), MM Group (-6.2%) and Egyptian Resorts Company (-5.9%).

🏠 ARCHITECTURE

As the world gets warmer, architects are designing homes to be cooler: The effects of climate change can be found far and wide. July was Earth’s hottest month since records began, Europe recorded its highest temperature in history with 48.8°C in Sicily, and the annual number of days reaching 50°C around the planet has nearly doubled since the 1980s, according to the Financial Times. So it only makes sense that the demand for air-conditioning units nearly quadrupled between 1990 and 2016 — now consuming more power than all of the electricity used in Africa and therefore adding to the climate change crisis. Architects around the world are trying to combat the wicked cycle, instead introducing new building techniques that lower temperatures indoors without using ACs.

They need to be quick about it: Increased use of ACs in homes and offices around the world will be one of the main drivers of global electricity demand over the next 30 years, wrote the International Energy Agency (IEA) in a 2018 report. Energy demand from ACs is expected to triple by 2050 with the stock of the units in building to grow to 5.6 bn, up from 1.6 bn in 2018. This would mean that 10 new ACs are sold every second for the next 30 years.

The emergence of ACs made architects disregard climate in their designs in the past decades, argues Eleni Myrivili, chief heat and resilience officer for the city of Athens, told the FT. We’ve lost centuries of home building wisdom, she argues.

Turning to the past may be the way forward: In the Iranian deserts, they utilized wind catchers and cooling channels of mountain water to decrease heat. In India, multistorey palaces boasted shady courtyards and “thermal masses” of bricks and marble that slowly absorb heat energy. Building houses back then depended on the kind of environment and materials available to create a marriage between architecture and the world around you. It was this kind of thinking that inspired the house of Architect Sue Roaf, an Emeritus Professor of architectural engineering at Edinburgh’s Heriot-Watt University. Her approach is “designing for survival” so that when the power goes off, the house’s design renders it liveable or even comfortable.

How to build a house that stays cool without AC: It all starts with figuring out which way the summer breeze blows to plan how the house will be oriented and where entrances and windows will be placed, according to Popular Science. From there, it’s important to direct the airflow inside the house by using what designers call the stack effect. By having high ceilings and windows or creating spaces like atriums, hot air rises above and the cool air remains lower as it is less dense. Other approaches from the exterior of the house include planting large trees that provide shade, insulating and painting your roof a reflective color, and having thick walls that include materials that have a lot of thermal mass, which allows them to store excess heat during the day.

Egypt is no stranger to these building techniques: Architecture firm ECOnsult was founded by Sarah El Battouty in 2013 with the aim of designing green architecture that reduces energy, water and material waste in existing buildings as well as creating new buildings that use shading, natural ventilation, interior thermal mass and solar-powered ceiling fans to make them more sustainable. ECOnsult worked on accommodation for 120 employees on a farm in the western desert oasis of Bahariya to create homes that maintained 19-26°C temperatures inside while outside was a scorching 50°C. Earlier this year, the company signed a cooperation protocol with the Planning Ministry to create sustainable housing in rural areas that take into consideration the United Nations SDGs.

However, this isn’t applicable everywhere: In urban areas, concerns such as noise, pollution, and security means people aren’t receptive to having their windows open all day, explains Michael Swainson to the FT. Swaison chairs a government-appointed working group reviewing a proposed new building regulation on overheating in dwellings for England, where new buildings are suffering from an overheating problem that kills thousands every year amidst heat waves. A big factor that adds to overheating is the grand city view that many UK houses boast.

📆 CALENDAR

14-30 September (Tuesday-Thursday): 76th session of the UN General Assembly, New York.

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

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 (Thursday): Winter opening hours for shops and restaurants begins.

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

30 September (Thursday): First tranche of overdue subsidy payouts will be handed to eligible exporters.

30 September (Thursday): Direct flights between Egypt and three Libyan airports resume.

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

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): Deadline for state-owned companies and government agencies to sign up to e-invoicing platform.

2 October (Saturday): House returns from recess; new legislative session begins.

5 October (Tuesday): Senate returns from recess; new legislative session begins.

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.

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.

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.

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.

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.

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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