Good afternoon friends, and welcome to the start of another busy work week. Between the G7 meetings and the heads of African investment promotion agencies meeting, there was plenty for us to pick out.
THE BIG STORY TODAY- French-Egyptian ties took a big boost today with the two countries signing around EUR 4 bn in infrastructure funding agreements. The biggest chunk of the funding will go towards the Cairo Metro, with around EUR 2 bn in credit facilities going towards its expansion. Agreements for development aid in the areas of energy, food security, railway and wastewater treatment were also signed. French Finance Minister Bruno Le Maire, who signed the agreements with President Abdel Fattah El Sisi, sat down with us to discuss details of the agreement and much more. Don’t miss it in today’s Speed Round.
HAPPENING NOW- The House is discussing today and tomorrow a report on the state’s draft budget for the upcoming fiscal year by the Planning and Budget Committee, as well as the draft social and economic development plan for FY2021-2022, according to the parliament’s agenda. The report also covers budget allocations for public economic authorities and the National Organization for Military Production. Recommendations include increased budget allocations worth EGP 4.56 bn for state-funded medical treatment, healthcare and education, local press reports.
FACT CHECK- Tobacco monopoly Eastern Company doesn’t look like it’s planning to sell securitized bonds. That’s according to the company’s CEO, Hany Aman, who told us this morning that securitized bonds aren't on the menu, though the company has the ability to raise debt from many sources including banks. Aman denied a report by Al Shorouk we noted in EnterpriseAM this morning. The report claimed Eastern is looking at a securitized bond sale to tune of EGP 3 bn to expand its product line. “We don’t understand why this was reported, and what the [newspaper’s] sources are … even though this is a good idea,” Aman said.
THE BIG STORY ABROAD- The three-day G7 summit in Cornwall is drawing to a close. BBC has live updates as UK Prime Minister and host Boris Johnson delivers a press conference on all the latest. Leaders of Canada, France, Germany, Italy, Japan, the UK, the US and the EU were expected to announce a raft of new plans including a program to help low-income countries cope with climate change and an infrastructure investment plan to counter China’s road and belt programs.
We have yet to hear any further details on the ambitious plan to tax multinationals, which is supposed to be the big focus of the meeting. On the table are proposals for a mandatory minimum global corporate tax rate of 15%.
Developing country infrastructure in line for a boost: G7 leaders have agreed to increase climate financing to meet the cumulative USD 100 bn per-year through 2025 to help less developed countries curb emissions, reports Reuters. This pledge, which G7 members were supposed to have begun doling out last year under a 2009 agreement with the UN, comes alongside plans the leaders say would help fund renewable energy and sustainable technology spending in less developed nations, according to a draft communique seen by the newswire.
The G7 members are still due to decide on the size of the increases, a spokesman for UK Prime Minister Boris Johnson said.
China doesn’t like what’s going on: China has warned G7 leaders that a “small” group of countries can no longer decide what happens to the rest of the world, Reuters reports, quoting a spokesman for the Chinese embassy in London. “We always believe that countries, big or small, strong or weak, poor or rich, are equals, and that world affairs should be handled through consultation by all countries,” the spokesman added. The comments come as G7 nations seek to reach a unified position over China's growing power during the summit ending today, including a plan to offer low-income nations an infrastructure plan that could counter China’s tn-USD Belt and Road Initiative.
** CATCH UP QUICK on the top stories from today’s EnterpriseAM:
- CBE to leave rates on hold at upcoming meeting: The Central Bank of Egypt (CBE) will likely leave interest rates on hold when its Monetary Policy Committee meets on Thursday,with all 11 analysts surveyed in our poll predicting a hold in response to rising inflation last month.
- First vial of Made-in-Egypt Sinovac coming this week: Prime Minister Moustafa Mabdouly confirmed that the first vaccines should be produced this week, after Health Minister Hala Zayed earlier said that the vaccines expected to be ready for dispatch to clinics in August.
- BdC and at least three other companies must IPO before year’s end: The FRA has given listed companies that have not yet offered shares for sale till 31 December to do so under a new deadline extension, while Reuters reports that the companies in question include Banque du Caire (BdC), Sky Light Touristic Development, New Castle Sports Investment and City Trade Securities and Brokerage.
The Egypt Green Economy Forum (pdf) kicks off tomorrow.
🗓 CIRCLE YOUR CALENDAR-
Entrepreneurs in the tourism sector have until 20 June to apply for the six-month Tourism Recovery Program launched by Enpact and the TUI Care Foundation and supported by GIZ, according to a press release (pdf). Some 100 startups will be eligible for direct support to the tune of EUR 9k each. The program also aims to create an international network of tourism business to expand cooperation between Egypt, Germany, and other European countries. You can apply here.
🚙 FOR YOUR COMMUTE-
SUPPLY CHAIN WATCH- Bottlenecks in the construction sector could impede the European Union’s EUR 800 bn recovery program, with industry executives sounding the alarm amidst rising prices and building material shortages, according to the Financial Times. Steel, wood, concrete, and copper are among the materials whose price has gone up in recent weeks, with industry experts estimating that as much as 30-40% of the EU’s dispersed funds could be wasted on covering higher material costs. The bottleneck has been attributed to the sharp global rebound in materials demand, pandemic-related disruption to supply chains, and continued trade tensions.
Another blow to Big Tech: Members of the US House of Representatives have submitted five bills aimed at limiting the power of the world's largest big tech companies including Facebook, Apple, Amazon and Google, Reuters reports. The bills, if passed, would prevent companies manipulating search results to boost their own products, as well as make it harder for big companies to kill off their competitors either through takeovers or mergers. To become law, bills must pass through the Republican majority Senate, which could pose a hurdle to the legislation.
Bitcoin’s first makeover in four years could help it compete with Ethereum: The upgrade, called Taproot, is expected to boost privacy and efficiency when it takes effect in November, industry insiders tell CNBC. The update involves major improvements in code and opens up the potential for “smart contracts,” an important feature in blockchain technology, that would eliminate middlemen from transactions.
Job resignations in the US have reached the highest level since 2000 as many employees are choosing to quit over going back to the office, according to the Wall Street Journal. Some 2.7% of US workers left their jobs in April, up from 1.6% in 2020, possibly pushing back an economic recovery as firms struggle with high turnover. Labor economists are saying that the high quit rate signals a healthy labor market with individuals choosing to take on roles more in-line with their needs, wants, and skills. The shift also spells good news for employees, with many US businesses raising salaries and adding benefits to retain their workforce and minimize disruptions.
Do we need more oversight on plastic producers? Five major companies are responsible for producing almost a quarter of the world’s single use plastics, according to recent research cited by the Financial Times. ExxonMobil, chemicals group Dow, Chinese oil refiner Sinopec, chemicals company Indorama and Saudi Arabia’s Aramco collectively generated almost 26 bn kg of plastic waste in 2019, with almost half of that being consumed by the US and China. One plastics researcher said, “on this trajectory, we will have more plastics in our ocean by weight than fish by 2050.”
📺 ON THE TUBE TONIGHT-
Manifest is a massively underrated sci-fi TV show, in our opinion: When passengers on flight 626 experience heavy turbulence, they’re relieved to safely land home. But as the plane doors open, they’re met with a new reality… five years have passed since the plane took off. While they look the same as they did hours ago, children have grown, parents have passed away, and life has moved on without them. To make it even crazier, most of the passengers come back with a voice in their head that in some cases helps them solve crime or predict the future. Add to that the inevitable American intelligence agencies that want to kidnap the passengers or play 4D chess with their lives, and you’ve got an amazing TV show that will blow your mind every episode. Manifest is available on Amazon Prime, and for those of you outside of Umm el Donia the first two seasons are now out on Netflix.
⚽ The UEFA EURO 2020 matches were off to quite a start this weekend. The biggest incident out of the tournament is Denmark’s Christian Eriksen being rushed to the hospital yesterday after he collapsed on the pitch. Eriksen is now stable and awake, reports CNN. The Denmark-Finland match was later resumed upon both side’s request, ending with Finland beating Denmark 1-0. Otherwise, Italy came out on top against Turkey 3-0, Belgium took the lead versus Russia 3-0, while Wales and Switzerland tied 1-1.
Today’s matches are not to be missed, with England and Croatia currently on the field as we dispatch, in a match that could determine who takes the Group D lead. Meanwhile, Austria and North Macedonia will play at 6pm and Netherlands will go up against Ukraine at 9pm.
🥙 EAT THIS TONIGHT-
Now if we can get a decent Egyptian vegan restaurant here: A new Egyptian vegan restaurant in Toronto boasts falafel, koshari, cauliflower, eggplant, and a vegan take on shawarma. Eat Nabati, which has opened at Kensington Market, delivers on an Egyptian feel and aesthetic through their cutlery (including tea pots reminiscent of Khan El Khalili creations), Ramadan-esque tiling, and murals on the walls of Egyptian idols such as Umm Kalthoum. The plant-based menu and colorful offerings celebrate the myriad of flavorful and delicious dishes sans meats and dairy that Egyptian cuisine has to offer.
🎤 OUT AND ABOUT-
It’s rockers night at ElSawy Culturewheel featuring Jiggy Band and 404 Band at 6pm.
The Room New Cairo will host the Comedy Bunch tonight at 9pm, while their Garden City venue is featuring a karaoke night at 8pm.
💡 UNDER THE LAMPLIGHT-
For any entrepreneur, strategizing how to grow your business is crucial. Enter Hacking Growth by Sean Ellis and Morgan Brown. The two authors argue that behind the success of companies such as Airbnb, Uber, Pinterest, Facebook and LinkedIn is a business methodology called Growth Hacking. The methodology calls for cross-functional teams and rapid-tempo testing and iteration that focuses on clients, users, or customers and how to attain, retain, and engage them with the brand so that they end up spending more. Instead of a one size fits all approach, Ellis and Brown offer a step-by-step guide for readers, to enable them to design a custom growth hacking technique that will best suit their firm. The duo have also created a website for business leaders to discuss common topics or challenges that impact their business.
🌤 TOMORROW’S WEATHER- This weekend’s heatwave is coming to an end tomorrow with the mercury dropping to 35°C during the day and 20°C at night, according to our favorite weather app.