Wednesday, 21 April 2021

EnterprisePM — Raya exits Ostool + 2 mn Egyptians could be heading to work in Libya

TL;DR

WHAT WE’RE TRACKING TONIGHT

Good afternoon, everyone. Just a few more hours to go and we’ve closed the books on day nine of Ramadan — and we’ll be one step closer to the weekend.

Do we have a long weekend? The Madbouly government has yet to make an announcement, and the Central Bank of Egypt and EGX are so far keeping their own counsel.

The question: Whether Sinai Liberation Day will be observed next week on Sunday or Thursday. A cabinet decree has said that most mid-week holidays will be celebrated on Thursdays, but it has left the window open to observing some on Sundays.

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

  • Aldar moves ahead with Sodic DD: The UAE property developer is expected to begin due diligence within days as it targets a majority stake in Sodic.
  • Education investment: Dubai-based Africa crest has earmarked EGP 900 mn to establish two schools in Egypt this year
  • Water treatment investments: The Sovereign Fund of Egypt could offer up water treatment projects to investors.

CORRECTION + UPDATE: In a story in EnterpriseAM today on Aldar starting due diligence on upmarket real estate developer SODIC, we said SODIC shareholders would have 60 working days to decide on Aldar’s offer. That was incorrect: Aldar has 60 days from its expression of interest last month to make an MTO, ask for an extension from the Financial Regulatory Authority, or walk away. Also: Our friends at SODIC denied a report in the domestic press this morning that they have appointed Goldman Sachs as their international investment bankers. They tell us that they will make an announcement on their choice of international advisors once an appointment has been made. They have selected an investment bank and are finalizing the letter of engagement.

THE BIG STORY ABROAD this afternoon remains the conviction yesterday of former policy offer Derek Chauvin in the United States for the on-camera murder of George Flyod. The story is at the top of front pages in the global business press.

FOR TOMORROW-

Climate will be the big story of the day as 40 world leaders gather in the United States for the Biden administration’s Leaders Summit on Climate. Climate Change News and CNBC have the rundown on what to expect, including a potential pledge from Biden to “help less wealthy countries combat climate change” and the possible unveiling of “a new emissions reduction target for the Paris climate accord.”

European lawmakers have reached a provisional agreement on the European Climate Law ahead of the summit, the European Commission said in a statement. The climate law is a key component of Europe’s pledge to hit climate neutrality by 2050. The law still needs approval from the European Parliament and Council.

What does it contain? The new climate law will increase 2030 ambitions to cut EU-wide emissions by 55% from 1990 levels from the previous 40% target. It will also set the stage for a series of regulations in June to cut emissions, impose tougher carbon dioxide standards on vehicles, and border tariffs on imports of polluting goods, Reuters reports.

YOUR STATUTORILY REQUIRED afternoon covid update: Despite the setbacks, vaccine rollouts are working: Recent data gathered by the Financial Times shows that rates of infections, hospitalisations and deaths have been on a downturn among older populations, while younger people now comprise most of global cases (which makes sense as they’re less likely to have been vaccinated). The data from the UK, France, the US, Chile, and India, among others points to a possible end in sight for countries that can effectively roll out the vaccine among their younger populations.

** So, when do we eat? Maghreb prayers will release us from our fast at 6:26 pm, and we’ll have until 3:49 am to eat and hydrate.

🗓 CIRCLE YOUR CALENDAR-

Renaissance Capital virtual conference titled RenCap ESG – a New Focus for EM will run until tomorrow. The conference will include three panel discussions exploring environmental, social and governance issues in investing. Panels will be live streamed.

The Gouna International Squash Open 2021, a PSA event, will run 20-28 May with 96 men and women competing. The event has the backing of our friends at CIB.

🚙 FOR YOUR COMMUTE-

European Super League (ESL) crumbles as nine teams drop out: Italy’s Inter Milan and AC Milan and Spain’s Atletico Madrid have joined all six Premier League teams involved in the 12-team Super League in withdrawing from the breakaway tournament following immense global backlash, the BBC reported.

Why are folks grumpy? Football fans worldwide, pundits, insiders, associations, leagues, teams — in essence, anyone who doesn’t hold shares in the clubs — simply felt that it smacked of outrageous greed on the part of owners. We have the full rundown here.

Who’s out? Within a few short hours of a protest outside Chelsea’s Stamford Bridge, six of the 12 founding clubs announced formal action to withdraw from the ESL group, including Manchester United, Liverpool and Arsenal. Liverpool principal owner John W Henry published an apology to fans. UEFA president Aleksander Ceferin welcomed the move and said they were “back in the fold,” the BBC reports.

Where does that leave the Super League? Juventus chairman and ESL founder Andrea Agnelli said that the league can no longer go ahead after the six English clubs withdrew, according to Sky Sports News (watch, runtime 1:12) The organization had earlier said that it is considering “the most appropriate steps” to reshape the project, in a statement seen by the BBC.

Instagram is getting serious about cyberbullying: The social media platform is rolling out a new tool to combat abusive messages in DMs by automatically filtering DM requests containing offensive words, phrases or emojis, the Facebook-owned company said in a press release. Instagram has worked with anti-discrimination and anti-bullying organizations to develop a predefined list of offensive terms, and will enable users able to add their own custom list. Other new features in the pipeline will include allowing only people you follow to add comments to your posts, as well as giving you the option to block a single account or block all accounts a user might create in future.

📺 ON THE TUBE TONIGHT-

Watch Oscar-nominated film Sound of Metal ahead of Monday’s award show: With the Oscars days away, we’re trying to watch as many of the nominated films as possible so we can confidently cheer, or yell at the screen, during the ceremony. A must watch before the show is Sound of Metal, which sees Riz Ahmed play a heavy metal drummer who is rapidly losing his hearing. With the support of a Paul Raci who runs a community of deaf recovering addicts, Ahmed paves a new life for himself in this well-acted tale of empathy and rebirth. The film is nominated for six Oscars in total, and Ahmed is the first Muslim to be up for a best actor award. Sound of Metal is also in the competition for best picture, best original screenplay, best editing, and best sound, while Raci is up for best supporting actor. You can watch the film on Amazon Prime. The Oscars will air on 26 April.

It’s been a long time since we’ve had this much football on:

The English Premier League will see Spurs play against Southampton at 7pm while Aston Villa will face off against Man City at 9:15pm.

Serie A is full swing ahead with seven matches today. Some games to look out for are Milan versus Sassuolo at 6:30pm, Spezia versus Inter Milan at 8:45pm, and Juventus against Parma at 8:45pm.

Among today’s six La Liga matches is Real Madrid’s game against Cadiz at 10pm.

Al Ahly is also up tonight, playing against Smouha in the Egyptian Premier League at 9:30pm.


COMING UP- Raya and Sekina are going global: Egyptian writer Mariam Naoum will team up with Oscar-winning director Terry George to co-write a serial killer series dubbed “The Alexandria Killings,” Dubai’s Front Row Filmed Entertainment announced in a statement. The Arabic-language show, produced by Front Row and London-based Rocket Science's Yalla Yalla, will be based on the story of the notorious real-life murderous sisters Raya and Sakina, who robbed and killed at least 17 women in the 1920s.

Want more MENA murder mysteries? Apparently this show will be the first in a MENA-based true crime anthology series “set in various periods and locations within the Arab world.”

Egypt’s Olympic football team has landed in Group C along with Argentina, Spain and Australia in the draw for the 2020 Tokyo Olympics that were postponed to this year, FIFA announced. Egypt plays Spain on July 22nd at 9:30AM, Argentina on July 25th at 9:30AM, and Australia on July 28th at 1:30PM.

💡 UNDER THE LAMPLIGHT-

How did SpaceX go from a shaky startup to signing agreements with NASA? The bumpy success of the rocket company and the early days of founder Elon Musk are the main focus of Liftoff by Eric Berger. Founded in 2002, SpaceX now has the largest constellation of commercial satellites in orbit and last year became the first private company to launch human beings into space. But it didn’t look so promising at the start, with little in the bank, fierce competition, and engineering challenges standing in the way. While many books have been written on Musk, nothing quite touches upon the desperation and then-possibility of failure quite like this one. You can read an excerpt on Space News.


🌤 TOMORROW’S WEATHER- Expect daytime highs of 31°C and nighttime lows of 14°C tomorrow, our favorite weather app says.

SPEED ROUND: TRANSPORT

Egypt’s rail network could be partially privatized

Private rail companies will be brought on board as operators of new trains the government is adding to Egypt’s existing railway network, Transport Minister Kamel El Wazir said in a statement. Ongoing plans include the purchase of six new passenger trains from Spain’s Talgo, which could be operated by a foreign or multinational company, and a contract with an unnamed foreign company to run overnight trains across the country, El Wazir said.

Cargo could also be semi-privatized: The government is separately looking to set up a JV with the private sector to own Egyptian National Railways’ cargo transport arm and set up companies to house several railway workshops in a bid to boost the efficiency and quality of rolling stock maintenance, the minister added. El Wazir’s statement comes following backlash in parliament and in the media after a string of deadly accidents, culminating in this week’s derailment near Qalyubia’s Toukh.

The minister also said authorities have a new approach to railway staff training. Part of this is the recent inauguration of a technical institute that will enrol students straight out of Thanaweya Amma and is due to graduate its first cohort this year. According to El Wazir, the institute’s new screening process ensures attracting better students.

Want more on why we need to fix the “human element” to improve Egypt’s ailing railway: We took a deep dive into why poorly trained staff is a major contributing factor to the recent rash of rail accidents in Egypt in this morning’s Hardhat, our weekly deep dive into infrastructure.

SPEED ROUND: DIPLOMACY

More than 2 mn Egyptians could be heading back to work in Libya

More than 2 mn Egyptians could return to work in Libya in the next three years as part of a reconstruction plan that aims to provide skilled Egyptian workers access to Libya’s labor market, Hamdy Imam, head of the Cairo Chamber of Commerce’s expat employment division, told Masrawy. There were more than 3 mn Egyptians working in Libya before the 2011 Libya revolt, according to Imam, but that figure plunged amid the ongoing tensions and political-military instability in the country.

A cabinet committee will outline a framework for the return of Egyptian workers to Libya and lay out measures to ease travel between the two countries, Prime Minister Moustafa Madbouly said during a meeting of the Council of Ministers today.

Background: The news follows Madbouly’s visit to Tripoli, along with 11 members of his cabinet, during which the two countries inked 11 MoUs covering transport, infrastructure, CIT, energy, health and education, as Libya winds down its decade-long civil war. The two sides also agreed to revive the Egyptian-Libyan Higher Committee, which had been suspended since 2009. The restoration of Egypt-Libya ties comes as part of Egypt’s push to exercise infrastructure diplomacy and cooperation in the region, which saw Egypt sign a raft of preliminary agreements with Iraq last October covering everything from oil and water resources to construction, housing and transportation.

SPEED ROUND: M&A WATCH

Raya exits transport subsidiary Ostool

Raya offloads stake in transport arm: Raya Holding has signed an agreement to sell its 62.3% stake in shipping subsidiary Ostool to Paradigm Logistics in a EGP 266.6 mn transaction, according to a regulatory filing (pdf). The acquisition should wrap up no later than 31 March 2022, according to the terms of the agreement.

Raya had previously been said to be looking to sell only half of its stake in Ostool to Paradigm, which a report last year said was incorporated in the British Virgin Islands. The disclosure does not name the beneficial owners of Paradigm. Sources last year said Raya wished to retain management rights for Ostool as a condition of the sale, but today’s filing made no mention of this condition. Ostool was created in 2010 by Raya and Qalaa Holding (then known as Citadel Capital).

GO WITH THE FLOW

The market on 21 April 2021

The EGX30 rose 0.2% at today’s close on turnover of EGP 906 mn (31.3% below the 90-day average). Local investors were net sellers. The index is down 1.9% YTD.

In the green: Ezz Steel (+3.2%), AMOC (+2.7%) and Orascom Development (+2.4%).

In the red: GB Auto (-5.0%), Palm Hills Development (-4.0%) and Pioneers (-2.5%).

WORTH WATCHING

How did we get here?

Piecing together the history of an increasingly fragmented world in one stellar docu-series: With the rise of right wing and populist movements, the ubiquity of “fake news,” and the increase of QAnon-style conspiracy theories, it can sometimes feel like the people writing human history have begun to lose the plot.

A new six-part documentary series, “Can’t Get You Out of My Head” is prolific filmmaker Adam Curtis’ attempt to find it, and put the fragments back together again. Available in full on YouTube (watch episode 1, runtime 1:14:15), the series describes itself as “an emotional history of the modern world” and tries to piece together 20th century events in the US, UK, China, Russia, and others in an ambitious telling of how we got to where we are today.

The series puts individuals and their feelings center-stage: Using Curtis’ trademark style of merging archival documentary footage and narration by Curtis himself throughout, the series ties together disparate ideas into a (sometimes) coherent and always gripping narrative that returns to Curtis’ key motif throughout his films: How the individual self (and how to control its desires) became the central focus of politics and consumerism in the 20th century. He also dives into how that process shaped the political and economic systems we take for granted as the only way things could ever have been. If there is one take-away from Curtis’ series it is that the systems and institutions that underpin our societies are not an inevitability, but are results of the choices made by very human people and the notions thought up by the very (flawed, emotional) human mind.

If these ideas seem disconnected and fragmented, that’s because they are: The essayistic documentary style adopted by Curtis naturally gravitates towards fragmentalism, but in doing so, allows him to tell multiple stories at once, resulting in films that truly capture the vibrant and chaotic sense of history unfolding. Even if you don’t agree with the underlying premise, “Can’t Get You Out of My Head” is worth watching for the sole feat of witnessing Curtis wrap up the threads of his ideas in a neat little package and tie a ribbon on top.

This doesn’t necessarily come through very well for some: The Telegraph’s Ed Power has described the series as “an entertaining ghost train-ride of a documentary that is addictive even when it doesn't make sense (which is often),” while other critics have gone so far as to call the series “incoherent.”

The decision to examine grand world events through interior lives of the activists, thinkers, and politicians Curtis spotlights gives the series its distinctive focus: “In the age of the individual,” Curtis writes in the synopsis, “what you felt and what you wanted and what you dreamed of were going to become the driving force across the world.” To tell a history of humanity in an age dominated by the individual and his/her feelings, “you've got to tell a history of what went on inside people's heads, as much as what went on outside,” Curtis told the BBC.

MACRO PICTURE

Shifting gears

Emerging market central banks waving goodbye to their easing cycles? Policymakers across 37 emerging markets delivered five net interest rate hikes in March, Reuters reports. Last month, the central banks of Ukraine, Georgia, Brazil, Turkey and Russia all decided to raise interest rates, with “many delivering bigger hikes than expected,” the newswire says.

This is a departure from a record easing run: The shift in gears signals a switch in direction from the monetary easing cycle that had gripped EMs since February 2019, when rising inflation necessitated rate cuts. According to Reuters calculations, “the tally between rate cuts and hikes across the group of 37 … has been negative or zero since February 2019,” making the past 24 months the “longest easing cycle” we’ve seen since the EUR crisis in 2010 or the global financial meltdown in 2008.

And the tightening is expected to continue: Rising inflation, fueled by spiraling global energy prices, “combined with stronger demand-side pressure on prices — and in some cases, weaker currencies” are all putting pressure on EM policymakers to move towards monetary tightening and abandon their “currently record-low interest rates,” S&P Global said in a recent report (pdf). There’s also the matter of rising US treasury yields, which could be “challenging” for some EMs to adjust to, particularly “those whose external and fiscal imbalances worsened recently,” including South Africa, Brazil, and Turkey. The report suggests that several Latin American countries will begin to tighten their monetary policies this year, while EM Asia is broadly expected to keep rates on hold in 2021.

Reminder: The Central Bank of Egypt’s (CBE) Monetary Policy Committee meets a week from tomorrow to review rates here at home. But if conventional wisdom holds up, there’s pretty much no chance the CBE will decide to hike interest rates again after pushing through its monetary easing cycle for the last several months. While Egypt’s inflation rate also cooled off significantly, stubbornly remaining below the CBE’s 9% (+/- 3%) target range last year, the CBE has since updated its target range to 7% (+/- 2%), and analysts we’ve spoken with have broadly been expecting the CBE to keep rates exactly where they are until at least the back half of the year.

Stay tuned: We’ll have our customary poll of economists and analysts in the first edition of EnterpriseAM next week.

PARTING SHOT

The mausoleum of Al Imam Al Shafei was inaugurated on Sunday, wrapping up preservation and restoration work that started in 2016, the Tourism and Antiquities Ministry said in a statement. Al Shafei, born in Gaza in 767 AH, is the founder of the Shafi'i Sunni Islamic school of jurisprudence. He came to Egypt in 813 AH to teach at Amr Ibn Al Aas Mosque before he died in 819 AH. After his death, his tomb became a popular site where people believed prayers would be more likely to be answered. The former mausoleum design is attributed to the Ayyubid Sultan al-Kamil, but Athar Lina — which carried out the conservation project — discovered remains of an earlier Fatimid shrine and the initiative saw the organization piece together information to create a more complete narrative of the site. The conservation project was funded by the US Ambassadors Fund for Cultural Preservation and is part of a two-phase US government-backed project worth USD 1.3 mn.

MORE READING- University of Texas at Austin professor Stephanie Mulder has a Twitter thread in which she takes a fantastic deep dive — and credits the excellent work of the team led by May al-Ibrashy. Photo by Ahmed Mansour.

CALENDAR

April: The government’s fuel pricing committee is scheduled to meet for its quarterly review of prices.

21 April: EBRD president Odile Renaud-Basso to visit Egypt.

20-22 April (Tuesday-Thursday): Renaissance Capital’s conference RenCap ESG – a New Focus for EM will take place virtually.

25 April (Sunday): Sinai Liberation Day.

29 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC — the holiday could be observed on a Sunday or a Thursday).

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

1 May (Saturday): Labor Day (national holiday).

2 May (Sunday): Coptic Easter Sunday.

3 May (Monday): Sham El Nessim.

13-15 May (Thursday-Saturday): Eid El Fitr (TBC).

16-19 May (Sunday-Wednesday): The Arabian Travel Market (ATM) is taking place in Dubai. ATM is an international travel and tourism event to promote the Middle East as a tourist destination.

25-28 May (Tuesday-Friday): The World Economic Forum annual meeting, Singapore.

1 June (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

7-9 June (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

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

17-20 June (Thursday-Sunday) : The International Exhibition of Materials and Technologies for Finishing and Construction (Turnkey Expo), Cairo International Conference Center.

24 June (Thursday): End of the 2020-2021 academic year (public schools).

26-29 June (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center, Cairo, Egypt.

30 June (Wednesday): 30 June Revolution Day.

30 June- 15 July: National Book Fair.

1 July: (Thursday): National holiday in observance of 30 June Revolution.

1 July (Thursday): Large taxpayers that have not yet signed on 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.

19 July (Monday): Arafat Day (national holiday).

20-23 July (Tuesday-Friday): Eid Al Adha (national holiday)

23 July (Friday): Revolution Day (national holiday).

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

9 August (Monday): Islamic New Year.

12 August (Thursday): National holiday in observance of the Islamic New Year.

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

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

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

30 September-8 October (Thursday-Friday): The 54th session of the Cairo International Fair, Cairo International Conference Center, Cairo, Egypt.

1 October (Friday): Expo 2020 Dubai opens.

6 October (Wednesday): Armed Forces Day.

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

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.

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

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

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

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

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

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

May 2022: Investment in Logistics Conference, Cairo, Egypt.

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.

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