We’re getting millions of doses of Pfizer and Moderna from the US this month

Good afternoon, everyone, and welcome to a crazy-busy news day, with plenty of investment, M&A and taxation news. There’s a lot, so let’s jump right in:

THE BIG STORY OF THE DAY: We’re getting another 6.4 mn doses of mRNA vaccines against covid-19 this month thanks to our friends in the United States. The 1.6 mn doses of the Pfizer / BioNTech covid-19 vaccine we received last week as a gift from the US was the first of a total of 8 mn doses of mRNA vaccines inbound from the United States. Health Minister Hala Zayed and American Ambassador to Egypt Jonathan Cohen made the announcement at a joint presser today. The US will be sending the shipments of both Pfizer and Moderna’s jabs our way this month. Cohen and Zayed both said the donation underscores the strong, decades-long partnership between the two countries.

THE OTHER BIG STORIES OF THE DAY so far-

#1– DPI’s USD 900 mn PE fund is the biggest ever in Africa: Including an additional USD 250 mn in dedicated co-investment capital, the Africa-focused private equity firm’s third fund is set to hit a final close with USD 1.15 bn to invest across the continent. Some of that capital has already been deployed in Egypt as part of fintech player MNT-Halan’s record-breaking USD 120 mn round and the acquisition of pharma firm Adwia. The success of DPI’s existing Egyptian investments was among the keys to fundraising in the latest round, a senior exec at the fund told Enterprise.

#2- EFG announces Ignis Energia investment: EFG Hermes’ energy investment platform Vortex Energy has acquired an undisclosed stake in Spanish solar firm Ignis Energia for EUR 625 mn, it announced in a statement (pdf) this morning.

#3- Capital gains tax won’t affect privatization program -Tawfik: The state privatization program won’t be delayed by the introduction of the 10% capital gains tax on EGX transactions in January, Public Enterprise Minister Hisham Tawfik told CNBC Arabia. Tawfik downplayed concerns held by many in the finance industry that the tax could impact trading volumes and derail the EGX’s recovery, suggesting that new listings will bolster the EGX’s performance and boost trading.

#4- Is the state stepping up regulatory scrutiny of healthcare M&A? The government has set up a committee consisting of officials from a number of ministries, the EGX, the Financial Regulatory Authority, the Egyptian Competition Authority and GAFI to regulate merger and acquisition activity in the nation’s red-hot healthcare industry, Al Mal reports, citing unnamed sources. The body will reportedly decide the requirements for investment in the sector and will have the authority to approve acquisition bids.

^^ We’ll have the full rundown on all of these stories and more in tomorrow's edition of EnterpriseAM.

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HAPPENING NOW-

Oil hits new three-year high as OPEC+ meets: Oil prices are hitting highs not seen since September 2018 this afternoon as the OPEC+ alliance of oil producers meets to discuss whether to further increase production amid fears of a global energy crisis. Having held steady for much of the day, the price of Brent crude rose 1.7% to USD 80.6 per barrel at the time of dispatch, though there remained no news coming out of the meeting. Three sources told Reuters earlier that the cartel will likely maintain the current agreement to add another 400k barrels per day to the market in November, rather than increase output as some reports have suggested.

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

• A USD 500 mn sovereign sukuk issuance in the works? This is according to Finance Minister Mohamed Maait, who suggested yesterday that the issuance would be “similar in size” to Egypt’s first sovereign green bond issuance last year.
• Auto sales up again: Passenger car sales continued to strengthen in August, rising 15% y-o-y during the month.
• Telecom Egypt to return to the debt markets: The state-owned company is looking to borrow USD 500 mn from a syndicate of international banks.

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THE BIG STORY ABROAD-

Everyone’s talking about the Pandora Papers this afternoon: the first wave of headlines to emerge from the massive data dump concerns the secret assets and offshore tax wranglings of global political leaders — but expect much more to come. Over 600 journalists from 150 media outlets spent 18 months combing through the leak’s 11.9 mn files, according to the Guardian, and will be publishing what they found out about the dealings of more than 100 global b’naires, among others, in the coming days. World leaders including Vladimir Putin, Jordan’s King Abdullah, Imran Khan and Boris Johnson have been responding to allegations of nefarious tax dealings arising from the leak.

The global financial press is, so far, giving this story a pass: AP | Reuters | Washington Post | BBC | Miami Herald — they all have (prominent) wall-to-wall coverage. The Financial Times and Wall Street Journal? Not so much.

As you read, do so with a discerning eye: Sometimes, offshore structures are tax dodges. Or criminal attempts to launder money or keep assets out of the reach of a partner, former spouse or court. Oftentimes, though, they’re just the price of doing business in an emerging market. Just about every single USD of capital that’s been committed to an Egyptian startup, for example, by a global venture capital outfit has gone through an offshore structure. Same with any just about money invested here by an international private equity firm.

Why? For starters, because foreign investors have confidence in the courts of countries such as Mauritius and The Netherlands — which also happen to allow full enforcement of shareholder agreements as written. Easy avoidance of double taxation (not avoidance of taxation) and the easy movement of capital, and enforceability of agreements on share transfer and weighted voting rights are among the many other considerations that make special purpose vehicles (and the like) attractive.

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US lawmakers are sitting on their hands as the country edges towards default: There remain few signs of compromise between Democrats and Republicans over raising the US debt ceiling, moving the country closer to a potential debt default later this month, writes Bloomberg. The Senate will vote on a measure passed by the House to suspend the federal government’s debt limit until December 2022, but the Republican Senate minority leader Mitch McConnell is set on blocking the attempt for a third time.

The US has until around 18 October before they really run into trouble, according to Treasury Department Secretary Janet Yellen, who said that this is the date at which the Treasury will be unable to meet its financial obligations unless the debt ceiling is lifted. Others have said that Washington may be able to last another week or two.

Few people genuinely think that Congress is crazy enough to drive the country into default (though with Mitch McConnell leading negotiations, anything is possible): “The worry has already begun, to be quite honest,” said one US strategist. “I think the market would get very worried” if Congress hasn’t charted a legislative path forward by the end of this week, he added.

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Sense scientists awarded Nobel Prize: American scientists David Julius and Ardem Patapoutian have been awarded the Nobel Prize for Medicine for their work on how nervous system receptors allow us to perceive heat and touch, according to a press release (pdf). The two scientists’ independent discoveries are being used to develop treatments for chronic pain, including new types of painkillers. The two 2021 Nobel laureates will split the USD 1.15 mn prize.

MEANWHILE- A massive restructuring looks increasingly likely for China’s teetering property giant Evergrande, whose debt crisis caused global markets to sink for a time in September and threatened to cause a meltdown in the Chinese property market. Chinese English-language daily Global Times reported this morning that the company will raise more than USD 5 bn by offloading a majority stake in its property management arm, part of a huge restructuring effort to unwind the USD 305 bn debt mountain accumulated by the company. First in line to be made whole in the restructuring are construction workers and homebuyers, one Chinese fund manager told Bloomberg. Foreign bondholders are on their own: “It’s highly likely that Evergrande’s offshore bondholders will be wiped out,” he said.

???? CIRCLE YOUR CALENDAR-

PSA- It’s official: You have a short workweek. The nation will take Thursday, 7 October off in observance of Armed Forces Day, the cabinet said yesterday in a statement. We can also expect to have a Thursday off later in the month thanks to the Prophet Muhammad’s Birthday, which is formally observed on Monday, 18 October.

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☀️ TOMORROW’S WEATHER- The midweek tomorrow seems to be the chilliest day of the week with the mercury maxing out at 31°C and dropping to 19°C at night, our favorite weather app tells us.

???? ​​From the dumpster fires that are our social media feeds, we offer you the following gems this afternoon for your kind consideration:

• Even if you don’t love Paris as much as we love Paris, you need to see the City of Light in this colorized film originally shot in c. 1900 (watch, runtime: 0:55).
• Was this your desk in the 1980s? One of us had the computer. And, God help us, the pants. And the printer, floppies, binder, TV… But not the shirt. Never the shirt. (Twitter)
• Thinking of a career change? Let this be an inspiration. It’s really never too late. (Twitter)
• Are you tired, struggling with inflammation, depressed? Is your asthma or arthritis acting up? Maybe you need to ask yourself whether chronic magnesium deficiency is at play? (QJM)

FMCG giants P&G and Unilever are turning to streaming and gaming to reach young consumers. Two of the world’s top advertisers, the two are reallocating spending to video games, streaming services, and media programs operated by retailers like Walmart and Tesco, according to Reuters. As users increasingly convene around gaming consoles and streaming services rather than linear TV, the companies, which have traditionally invested in TV ads, are reallocating budgets to games like Fortnite and Animal Crossing, as well as sponsoring top gamers. With an estimated 2.7 bn gamers worldwide, and the video game market projected to exceed USD 200 bn by 2023, the trend to move away from TV is likely just beginning.

Okay, it’s still an epidemiological study (they stink when it comes to nutrition), but: One of the most rigorous studies ever of low-carb diets found that study participants who “ate fewer carbohydrates and increased their fat intake had significant improvements in their cardiovascular disease risk factors,” Anahad O’Connor writes for the New York Times. The key: Cutting out junk food as well as “bread, rice and fruit spreads and sugary yogurts.” The low-carb group showed improvements in key blood markers associated with heart disease and diabetes after just six months. Don’t be afraid of saturated fat.

Remember when we were bleating a few months ago about the odds of a new Cold War, this time between the US and China? It may be out of the headlines, but remains very much on the minds of regional policymakers. Anwar Gargash, a top foreign policy official in the UAE, is the latest to sound a warning, saying at a conference in Abu Dhabi that “We’re all worried, very much, by a looming Cold War. That is bad news for all of us because the idea of choosing is problematic in the international system, and I think this is not going to be an easy ride.” Bloomberg has the story in full.

It’s been about a month since the kid went to college. You’re done celebrating and “rediscovering” your spouse. And now reality settles in, and you need to ask yourself: Do you know how to survive an empty nest?

Remember how we told you we were excited to (re)watch The Sopranos before the prequel — The Many Saints of Newark (trailer | review) — came out? Well, it seems we’re not alone, according to Why is every young person in America watching The Sopranos? in the New York Times Magazine. It may have something to do with the notion that “the show’s new audience is also seeing something different in it: a parable about a country in terminal decline.”

We could be waiting longer than usual for the iPhone 13 to land at Apple resellers in Egypt — and you can blame covid in Vietnam: Delivery times for the new iPhone 13 have been delayed due to constrained supplies of camera components, people familiar with the matter told Nikkei Asia, according to the Financial Times. Apple has added it’s sensor-shift optical image stabilisation (OIS) feature to all four of the new phone models, but the modules are manufactured in Vietnam, which has been grappling with a surge in cases that has lowered production for the tech giant’s supplier and affected supply chains. It’s not an emergency yet, but inventories are quickly running low, Nikkei reports.

???? ON THE TUBE TONIGHT-

(all times CLT)

You’ll never look at 911 call operators the same again: Often the first point of communication in any emergency (in developed economies, at least), 911 operators are tasked with the hard job of getting enough information to send in the necessary authorities. In Netflix’s new original movie, The Guilty, a former police officer turned operator (played by none other than Jake Gyllenhaal) is put to the test after he gets a call from a woman in trouble. The kidnapped woman is beside her assailant in most of the calls and tries to communicate her emergency by talking to her daughter while the police are on the phone. The one-man-show movie sees Gyllenhaal try and piece together the events and location to save the woman in a psychological thriller that is driven by a series of harrowing phone calls. The film is the American version of Gustav Moller’s Danish award-winning film Den skyldige. Polygon is out with a review.

???? OUT AND ABOUT-

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Award-winning theater writer and director Jesper Pedersen and Egyptian theater director and playwright Ahmed El Attar are giving a talk on sustainability in the performing arts entitled Time to Change tonight at 7pm at Rawabet Art Space in Downtown. This is a part of a campaign called The Art of Sharing under Downtown Contemporary Arts Festival launched by D-CAF in partnership with Bassita, which sheds light on the contemporary art scene.

???? UNDER THE LAMPLIGHT-

How organizations can implement an anti-burnout strategy for their employees: Self-care in the form of yoga and breathing techniques are all well and good, but wellbeing expert Jennifer Moss argues that these are just a band-aid applied to a bigger problem that often emanates from the workplace. In The Burnout Epidemic, she argues that workplaces should take the lead in developing strategies that reduce burnout among their workforce by finding ways to measure it and combat it on a case-by-case basis. With fascinating research, new studies conducted during the pandemic, and interviews with international business leaders, The Burnout Epidemic offers actionable advice for a phenomenon that should be on every manager’s radar.

The EGX30 rose 0.6% at today’s close on turnover of EGP 963 mn (38.4% below the 90-day average). Regional investors were net buyers. The index is down 3.9% YTD.

In the green: Pioneers Holding (+5.0%), MM Group (+3.8%) and Fawry (+2.6%).

In the red: Orascom Development Egypt (-3.3%), Rameda (-2.0%) and GB Auto (-1.9%).

Just when we thought everything that could be digitized had been, digital fashion proves us wrong: Fashion that can only be worn digitally is gaining traction, with several companies now offering digital versions of everything from workout clothes to gravity-defying avant garde fashion, often in the form of NFTs. Digital fashion can be worn in a few ways: either through an augmented reality filter similar to those in Snapchat — as in the case of digital sneaker company RTFTK — or by taking a picture and sending it to a digital fashion retailer such as DressX who will then Photoshop it onto your body.

Ummm… What? Yes, you read that correctly. Digital clothes are not meant to actually be worn but are items that cater to “an audience looking to fulfill a different type of need—constant fashion newness for their online persona, divorced from physical clothing,” according to Forbes. Some digital fashion sites have also teamed up with video gaming firms to allow their clothing to be displayed through avatars in their games.

The digital fashion space has been booming, if DressX’s USD 2 mn seed round from the Artemis Fund and RTFKT’s USD 3.1 mn digital sneaker release are anything to go on. Big brands are getting in on it too, with a digital version of Gucci’s Dionysus bag selling on Roblox for about USD 4.1k, more than the price of the physical item. Taking things a step further, Balenciaga presented its Fall 2021 collection within a playable video game.

And it only looks set to get bigger: In July, Snapchat parent company Snap Inc. acquired Vertebrae, a company that allows high-end brands to create 3D versions of their projects, as the social media app moves to further its AR shopping and AR apparel plans, The Verge reported. Other brands such as Nike and Louis Vuitton are also actively investing in blockchain technology to roll out their own “digital twins” of real-life products.

Why is this a thing? The digitisation of fashion can reduce clothing waste while making luxury items more affordable and size inclusive. Keeping fashion in the metaverse eliminates the need to produce fabric, run factories or ship materials all over the world, Simone Berry, a team member at digital fashion site BNV, told the Financial Times. For the fashion-wearers, buying digital fashion eliminates the worry you get when you’re afraid to physically wear something valuable or expensive, while also keeping up with the trendiness of the NFT craze.

It’s cool in theory, but the ESG aspect might be another case of greenwashing: Digital fashion NFTs run on blockchains that consume massive amounts of energy. While a polyester t-shirt might have a carbon footprint of 5.5 kg, data scientists estimate that the emissions impact of a simple NFT garment could be closer to 600 kg of CO2. Plus, an NFT generates more emissions every time it’s bought or re-sold.

It’s all about preparing for a future where we spend more time in the metaverse: The average amount of time spent online doubled during pandemic-filled 2020 and the world has continued to work, ship, play, and even fall in love online. The increase of online participation will fuel a new kind of self-image that is expressed virtually that offers more creativity and elaborate aesthetics that can’t be achieved comfortably in the real world, head of content and strategy at digital fashion house The Fabricant Michaela Larosse told Bloomberg Wealth. The fashion house sold a shimmering blockchain dress for USD 9.5k back in 2019.

The next step: Integrating digital spaces together. An outfit you can wear on Fortnite won’t be available in League of Legends or as a Snapchat filter. But expect firms to move towards making a truly immersive metaverse possible as demand grows for digital fashion over time.

Interested in more? Check out highlights from Gary James McQueen’s (Alexander McQueen’s nephew) digital fashion show (watch, runtime: 03:51), hear from DressX co-founder Daria Shapovalova, (watch, runtime: 08:12), or watch YouTuber Safiya Nygaard try on seven different digital fashion outfits and really put the trend to the test (watch, runtime: 28:16).

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

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

2-4 October (Saturday-Monday): Techne Summit, Bibliotheca Alexandrina, Alexandria, Egypt.

3-5 October (Sunday-Tuesday): Pharmaconex, Egypt International Exhibition Center, Cairo, Egypt.

4 October (Monday): Union for the Mediterranean ministerial climate conference, Cairo, Egypt.

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

5 October (Tuesday): Afreximbank will host a preparatory conference (pdf) for the intra-African Trade Fair 2021 at the Westin Cairo Golf Resort & Spa.

6 October (Wednesday): Armed Forces Day.

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

9 October (Saturday): Public schools and universities 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.

15-21 October (Friday-Thursday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

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.

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.

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.