Iron and Steel Mining and Quarries makes EGX debut

It’s one of those “hurry up and wait” afternoons, with no single story dominating the news agenda as we wait to see what’s going on with everything from the Ever Given to Egypt’s push to turn a ceasefire in Gaza into a longer-term peace agreement.

HAPPENING NOW- The Suez Canal Authority has just started a presser at which it said it will answer questions about its quest to force the owners of the MV Ever Given to pay up for having blocked the Suez Canal for nearly a week. The meeting with reporters comes one day after lawyers for the SCA and the Ever Given’s owners together asked Ismailia Economic Court to postpone until late June a ruling in a related case over the size of Egypt’s compensation demand.

We’re reading the tea leaves as suggesting a settlement is in the works as the SCA has so far said that there are “signs” a resolution could soon be reached as the vessels’s owners have been negotiating “in good faith.” Not coincidentally, the SCA also reminded reporters that Egypt’s case for compensation is “strong.”

WE’RE ALSO STILL WAITING ON the government’s covid-19 committee to announce whether they’re extending restrictions or reverting back to normal summer retail hours. The committee had extended until the end of May restrictions originally imposed for two weeks on 6 May, which mandated a 9 pm closing time for shops, restaurants and malls. Public parks and beaches were also ordered closed during the Eid break in an attempt to curb the rise in covid-19 cases. The committee is set to make an announcement on the possible extension today.

MEANWHILE- Foreign Minister Sameh Shoukry is in a meeting with his Israeli counterpart, Gabi Ashkenazi, who arrived in Cairo this morning. The two are set to discuss a permanent truce between Israel and Hamas in the first visit to Cairo by an Israeli FM in 13 years, Bloomberg reported. They’re meeting here at the same time as intelligence chief Abbas Kamel is in Tel Aviv for parallel talks with Israeli PM Benjamin Netanyahu and his national security adviser Meir Ben Shabbat as Egypt serves as go-between in talks between Hamas and the Israeli government. Kamel will then make his way to Ramallah, heading an Egyptian delegation to meet with Palestinian Authority President Mahmoud Abbas. Egyptian officials are leading the drive to convert a ceasefire into a longer-term agreement that includes the reconstruction of Gaza, a resumption of peace talks between Israel and Palestine, and a prisoner swap.

Too soon to say bye bye to Bibi? Benjamin Netanyahu could soon be removed from office after a 12-year run as Israeli PM, with sources saying opposition leader Yair Lapid is close to forming a coalition government by the deadline next Wednesday, Reuters reports. Lapid is said to be forming a coalition with right-wing party leader Naftali Bennett, but the minority government would be fragile. To succeed, it would still need outside support from Arab members of the Knesset, whose political stance differs dramatically from Bennett’s. If Lapid fails to form a government by Wednesday, Israel could hold yet another round of elections — its fifth since April 2019.

The United Media Services Company (UMS) has inked a memorandum of understanding with MBC Group that will see the two co-produce scripted dramas, according to Youm7. Under the agreement, MBC will also obtain distribution rights for UMS productions. UMS has also signed an MoU with Saudi’s Al Arabia Outdoor Advertising to work together on outdoor ads. This comes one day after UMS shuffled its board of directors, naming veteran banker Hassan Abdalla as chairman, and announced plans to sell a 20-30% stake on the EGX by 2024. UMS’ holdings range from public relations outfit POD to ad industry staple Synergy as well as newspapers Youm7 and Al Watan and broadcasters On, ExtraNews, CBC, MegaFM and Nagham FM, among others.

SUPERCYCLE WATCH- Subsidized seed oils will be 23.5% more expensive starting Tuesday after the Supply Ministry said this morning it would raise the price per liter to EGP 21 from EGP 17. The move comes on the back of a global commodities rally, minister Aly El Moselhy said in a statement. The ministry will review the price of subsidized one-liter bottles of blended soybean and sunflower oil on a quarterly basis. Data from GASC, the state’s commodities buyer, which helps the country import 95% of its edible oil needs, shows that Egypt currently has a strategic reserves sufficient to cover five months of consumption, the minister said.

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

• Misr Life will debut 25% stake on EGX in late 2021 / early 2022. Look for parent company Misr Insr. Holding to choose an external financial advisor for the transaction in June.
• Hotel occupancy rates declined in 1Q2021 thanks to a high base effect. Rates in Sharm El Sheikh fell 33% y-o-y while Hurghada saw a 26% drop and Cairo 22%, but a bounceback is expected for the rest of the year. 1Q2020 figures included two full months of normal activity in the tourism industry before the bottom dropped out of the global market in March.
• Bechtel could help fund Cairo Metro Line 6 with USD 2 bn loan: The loan would finance nearly half of the new metro line’s construction, and the company should hand its financial proposal to authorities by early July.

THE BIG STORY ABROAD on this first business day of the week is … nada. Zilch. Nothing. Crickets. All thanks to Memorial Day weekend in the United States and the spring bank holiday in the United Kingdom.

Subscribe to Enterprise

???? CIRCLE YOUR CALENDAR-

OPEC+ will likely decide to continue oil output hikes when it holds its monthly meeting on Tuesday, especially as other producers have been increasing supply at a slower pace than the coalition had penciled in, Bloomberg reports. Oil companies for once have not rushed to increase output to capitalise on Brent crude price highs of USD 70, in part due to pressure on drilling companies over climate change. Though non-OPEC countries are expected to increase production by some 620 barrels per day, the increase in supply “comes nowhere close to matching” the expected spike in demand as industries the world over recover from the covid slump, according to the International Energy Agency.

The FIG World Challenge Cup in Artistic Gymnastics for men and women will take place in Egypt on 3-6 June.

???? FOR YOUR COMMUTE-

Tired of corporate life and thinking about binning it all to start your own company? Go read Justin Kan’s epic Twitter thread first. Kan sold Twitch, his first startup, to Amazon in a transaction that valued every gamer’s favourite streaming platform at nearly USD 1 bn. Then he started a legaltech venture called Atrium to “scratch his own itch.” It burned through USD 75 mn in three years before shutting down in March 2020 and throwing 100 people out of work. Read this thread about why it did not end well and the lessons he learned along the way.

Wait — you mean we can’t just go back to the way it was before? The never-ending conversation about the future of the workplace drags on. The latest installments worth reading: Wired thinks workers are “calling BS on leaders about returning to the office,” saying they are “feeling burned over broken work-from-home promises and corporate culture ‘BS.’” The Wall Street Journal, meanwhile, takes a more pragmatic look at things, writing that CEOs are trying to balance “mandatory Mondays and Fridays and unused desks and crowded conference rooms” as they plot a return to corporate … normalcy.

Want more? Today’s Office Life is all about how CEOs think they made WFH … work.

How bad is our collective ennui? Even the influencers are burnt out, Vox tells us.

For our fellow iSheep and lovers of iPads Pro: WWDC is just a little more than a week out. If you’re a Mac user but wish you could do (lots, lots) more on your iPad, you’ll be joining us in paying close attention to what’s announced for iPadOS 15. The hardware is awesome, but the operating system is still holding it back. While you wait, check out Jason Snell’s review of the 2021 iPad Pro (All systems go, but where?) and then go read his very well considered iPadOS approaches the edge of desktop computing. His takeaway: Watch closely for signs of how Apple will address pain points on iPadOS without turning the iPad into a touch-screen Mac. Tap or click here to watch the keynote on Monday, 7 June.

Still hungering for more Friends after watching the reunion special on OSN over the weekend? Hollywood Reporter has got you covered with content that includes an interview with the show’s creators and with the director of the reunion show.

America is, by all appearances, tiptoeing into a “new political era,” writes the New Yorker, and the question is whether the neoliberal world order is going to be swept away by the fascist right or by progressive populism. No matter where you stand on America, wokeism or political change, this week’s American Chronicles is worth a read.

Also in the New Yorker: First it was spooks and dips in Havana. Now, the magazine writes, it has spread to the White House, with more than 130 cases worldwide. What is it, exactly? “A senior official on the National Security Council sat at his desk … on the White House grounds. … At the end of the day, he left the building and headed toward his car, which was parked a few hundred yards away, along the Ellipse, between the White House and the Washington Monument. As he walked, he began to hear a ringing in his ears. His body went numb, and he had trouble controlling the movement of his legs and his fingers. Trying to speak to a passerby, he had difficulty forming words. ‘It came on very suddenly,’ the official recalled later, while describing the experience to a colleague. ‘In a matter of about seven minutes, I went from feeling completely fine to thinking, Oh, something’s not right, to being very, very worried and actually thinking I was going to die.’” Go read: Are US officials under silent attack?

Ah, the perils of celebrity endorsements. The most recent to learn the lesson that a celebrity may not be a paragon of ethics? That would be Nike, which has split with footballer Neymar Jr. after a [redacted]-assault probe.

???? ON THE TUBE TONIGHT-

Money, Explained is a must-see for all finance geeks: The five-episode series from Netflix and Vox tackles a bunch of very cool topics that, if put in a sentence here, will see the algorithms send us to bad folders for a few days. So maybe go check out the trailer (watch, runtime: 01:23) or just trust us that each 22-ish-minute episode is a great overview of some really interesting ideas.

⚽ El Zamalek play El Gouna tonight at 9pm in the Egyptian Premier League. You can also check out the earlier 5pm games featuring a match between Semouha and Al Mokawloon and another between Enppi and El Entag El Harby.

????EAT THIS TONIGHT-

Sample one of our guilty pleasures, Ezz El Mnofy. If you want a good meal without breaking the bank. Ezz El Mnofy is a good bet. We’ve tried a bunch of kebda and sogo2 places around Cairo and Alexandria, but in our opinion, nothing compares. With branches nationwide, we’re sure you’ll find one that delivers nearby. Their menu is humble but hearty, with only a few variations on the sandwiches. We recommend their classic kebda and sogo2 as well as their sogo2 modakhan. If you don’t mind the unadulterated calories, treat yourself to their sakalans sandwich that combines cream, honey, jam, and halawa.

???? UNDER THE LAMPLIGHT-

Being smarter might not necessarily entail using your brain, science writer Annie Murphy Paul argues in The Extended Mind: The Power of Thinking Outside the Brain. She argues that the trick is to start to think “externally” using extra-neural resources that help us focus and foster creativity. These include the movements of our bodies, the physical spaces in which we learn and work, and the spoken thoughts of those around us. Using these external tools creates cognitive loops which help us work out and inspire ideas. Paul doesn’t hold back with the science, giving ample evidence and citing multiple studies for her claims. The end goal of the book is to motivate readers to change their surroundings to assist their minds in comprehension and cognition, argues the Wall Street Journal.

---

???? TOMORROW’S WEATHER- Stinkin’ hot. Monday is set to be the hottest day of the week, with the mercury set to hit 40°C during the day before cooling to 22°C overnight, according to our favorite weather app. Daytime highs will trend down over the course of the week to hit 34°C on Thursday, Friday and Saturday.

Don’t forget to pack a light sweater if you’re working from Sahel — look for overnight lows in the 18°C range near El Alamein.

Shares of state-owned Egyptian Iron and Steel’s mining spinoff started trading this morning, the exchange said. The spinout, inventively named Iron and Steel Mines and Quarries, listed c. 978 mn shares after it received the all-clear from the EGX’s securities registration committee last week. Its shares are now trading separately from Egyptian Iron and Steel under the ticker ISMQ and closed the day at EGP 1.81 a piece, giving the company a market cap of nearly EGP 1.79 bn.

Meanwhile, Egyptian Iron and Steel is moving ahead with its liquidation process, saying in a regulatory filing (pdf) that it will appoint a liquidator tomorrow and update its commercial registration in the following three days. The liquidation procedures should then be completed within two years.

Background: Egyptian Iron and Steel announced earlier this year that it would spin off its mining operations at the same time as the troubled state company sells its steel plant in Helwan. Public Enterprises Minister Hisham Tawfik previously said that the perennial lossmaker will have to sell off 6 mn sqm of its land assets to be able to pay off its EGP 9 bn in outstanding debts before liquidating.

Speed Medical is no longer part of a consortium bidding for 100% of Alexandria Medical Services, the EGX-listed medical diagnostics firm said in a statement (pdf), adding that it would instead be looking for new investments that it could consolidate on its balance sheet. Speed was after a 10% stake in Alex Medical, which it planned to buy as part of a larger transaction with partners including Saudi’s Tawasol Holdings (already a 26% shareholder in Alex Medical) and Sherif El Akhdar’s LimeVest.

Tawasol and LimeVest are still bidding, with the latter apparently doing so in concert with an affiliate named Maternity and Pediatrics Holding, according to a separate statement (pdf). When we reached out this afternoon, LimeVest confirmed that Maternity and Pediatrics Holding is an affiliate, but declined to say more about the bid.

Bidders had until last Thursday to submit their final offers for Abu Dhabi Commercial Bank’s 51.4% stake in Alexandria Medical. Cleopatra Hospitals Group had offered in mid May to buy shares at EGP 38.53 apiece, below the average EGP 51.70 per share other bidders had indicated they were willing to pay, leading Nile Scan to downgrade its own offer. Other bidders include Alexandria for Medical Investment Company (the majority shareholder of Mabaret Al Asafra Hospitals Group), healthcare investment firm Seha Capital, and the UAE’s Global One Healthcare Holding.

Meanwhile, Speed Medical subsidiary Speed Hospitals will up its offer for New Al Safwa Specialized Hospital after sellers complained the slowness with which regulatory approvals are coming could put the transaction at risk, the statement read. Speed Hospitals will raise its offer for New Al Safwa hospital by an amount equivalent to the interest rate on the EGP 185 mn offer value, during the period from 1 March until the completion date of the transaction, the listed company said. Speed Hospitals itself wants at least 50% plus one share of Al Safwa, as well as management rights, with the rest of the equity to be owned by other investors including a 4.4% stake for sister company Prime Speed Medical Services.

Orascom Investment Holding (OIH) subsidiary Orascom Pyramids will invest EGP 200 mn in the early stage of the Giza sound and light show revamp, which is expected to cost EGP 350 mn when completed, chairman and CEO Hesham Gadallah told Hapi Journal. The company plans to self-finance part of the project and is lining up bank finance for the rest. Orascom Pyramids will soon finalize contracts with the government and plans to kick off a trial run of the show within two years of signing the final contract, Gadallah said.

A new, improved sound and light experience? The project, part of the company’s larger development plan to revamp the area around the Giza Pyramids, involves installing new equipment to modernize and improve the 40-year-old landmark spectacle, as well as build office spaces for its workers and open restaurants and retail outlets, Gadallah said.

Orascom Pyramids emerged as the sole bidder to snag the redevelopment contract last year, after the show’s legacy operator, the Sound and Light Cinema Company, issued a second tender seeking a private sector developer. The original tender, launched back in 2018 and also awarded to OIH, broke down and saw OIH agree to pay an EGP 6 mn settlement.

EARNINGS WATCH- Eastern Company posted a 47% increase in its bottom line in 3Q2020-2021, reporting earnings of EGP 1.35 bn from EGP 914.19 mn in the same period a year earlier, the company said in an earnings filing (pdf). Revenues rose in the company’s third quarter to EGP 16.1 bn from EGP 14.1 bn.

Oriental Weavers’s net income after tax and minority interest came in at EGP 300 mn in 1Q2021, up 72% y-o-y from the same quarter last year, according to its quarterly financials (pdf). Sales rose 22% y-o-y to EGP 2.76 bn during the quarter.

MARKET ROUNDUP-

The EGX30 rose 0.6% at today’s close on turnover of EGP 1.37 bn (5% above the 90-day average). Regional investors were net sellers. The index is down 5% YTD.

In the green: CI Capital (+8.4%), Pioneers Holding (+7.2%) and Palm Hills Development (+3.9%).

In the red: Ibnsina Pharma (-2.1%), Export Development Bank of Egypt (-2.1%) and MM Group (-2.1%).

FROM THE REGION- Stock exchanges elsewhere in the Middle East are closing the month of May in the green as major economies in the region rebound thanks to rising vaccination rates, higher oil prices, private sector growth and the lifting of restrictions, Abu Dhabi-based International Securities head of research Harshjit Oza said, according to Bloomberg.

Geopolitics, however, continue to weigh on Egyptian shares, Oza said, without offering further context. The UAE’s blue-chip indices are leading gains, with benchmark gauges in Dubai and Abu Dhabi en-route to end the month up 8.4% and 7.8%. The UAE is followed by Israel, another global leader in the vaccine rollout, whose main market gauge is on track to finish 4% higher, shows Bloomberg data.

CEOs on how they made remote work a success: Remote work might be here to stay even after the pandemic subsides, so how can companies manage the pros and cons? Angela Cretu, CEO of global cosmetics firm Avon International, told the Financial Times that the pandemic accelerated the rollout and adoption of digital tools within the company. Avon prioritized staying connected with employees by utilizing virtual webcasts and forums. “We’ve also conducted employee opinion surveys and digital focus groups to understand how our people are feeling.”

Other firms had already been well versed in gathering virtually, as was the case with entrepreneurship impact and innovation company SecondMuse, co-CEO Carrie Freeman said. Grappling with the complete shift to remote work required three key elements: allowing employees to create flexible work schedules, providing various wellness services, and creating policies to ensure a work-life balance for workers.

And some were forced to quickly create a digital infrastructure: The time to adapt to the golden age of hybrid working came quick and hard and Sanuj Kohli, founder and CEO of LEME Group had to hustle to roll out change. The laser and electronics holding group set out by holding one-on-one meetings with employees to get a better picture of what was needed for the workflow and for the team’s comfort. HR policies were changed to reflect flexible working hours and investment was poured into the needed technology. The last step was to re-evaluate staff to make sure they were able to thrive in a hybrid work system. “We want a corporate culture that breeds flexibility and innovation across the organisation,” Kohli says.

Finally, some firms put trust in their employees and took it from there: Giving remote teams the freedom to prioritize their workflow and just checking in to evaluate progress is the way to manage work from home, Dropbox’s global head of media technologies Andy Wilson told TechRepublic. This includes learning how and when to communicate with teams, while “cutting down on external noise, and endless notifications means learning to prioritize and organize effectively," he says. Leaders communicating trust in employees’ dedication helps produce optimal output, Wilson says.

Strategies for streamlining operations while working from home have been the subject of many articles: Forbes identifies 13 critical factors in a successful long-term remote work plan, which started with making sure the plan is flexible enough to be able to pivot in case of sudden changes. Other factors include incentivizing employees, having clear communication channels, focusing on workers’ work-life balance and psychological health, and putting in place the right guidelines, tech, and systems. Meanwhile, the Harvard Business Review looks at how to put new employees on the right track when they arrive into a remote workspace. Having a comprehensive onboarding plan is essential, as is making them feel like part of the team, communicating the company culture, and finding the best role for the new hire based on their experience and passion.

5G is exactly what the esports industry has been waiting for: Esports — where experienced gamers battle before live and online audiences — is set to undergo a massive improvement, with fast 5G networks promising a world of difference in game realism and speed, Yang Jie writes for the Wall Street Journal. The fifth-generation network will allow players to better respond to each other by speeding up data transfer. It could also bring more players from different venues into a single game or competition — and give gamers on all platforms uninterrupted gameplay. Major tech companies, from Intel to Ericsson, have said they see esports as a natural application for 5G.

Virtual reality gaming in particular is in line for a boost: Virtual reality gamers need mobility to play, so are forced to literally carry around their computing power in backpacks. The heavy equipment handles the large amounts of data transfers and ensures gameplay runs smoothly. But this emerging esports niche is set to change with 5G allowing much vaster computing power in a smaller package.

VR esports are a fast growing entertainment industry in China, where the government in Beijing's Haidan district has allocated USD 1.55 mn in subsidies for companies hosting VR and esports events. And big tech companies are getting in on the action: Chinese startup Sky Limit Entertainment obtained USD mns in investment from Intel to co-host a series of VR competitions using 5G in China, Thailand, South Korea, and Singapore.

And cloud mobile gaming is another 5G friendly industry on the rise: Cloud gaming stands to benefit tremendously from 5G, and is set to grow into a USD 6.4 bn industry in 2024, from only USD 640 mn last year, New York-based ABI Research estimates. The Asia-Pacific region is expected to take the largest slice of the cloud-gaming market, accounting for 45%, followed by North America with 26%.

30 May (Sunday): Al Mal GTM is organizing the Portfolio Egypt conference under the theme ‘Growth under the weight of the pandemic.’

31 May (Monday): Egypt is hosting Trescon Global’s World AI Show with the support of ITIDA.

7 June (Monday): British Egyptian Business Association hosts an event featuring Oil Minister Tarek El Molla.

3-6 June (Thursday-Monday): Egypt is hosting the FIG World Challenge Cup in Artistic Gymnastics.

14 June (Monday): Egypt's Green Economy Forum.

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.

20 June (Sunday): Ismailia Economic Court to hold hearing on Ever Given compensation case.

22-27 June (Tuesday-Sunday): The CIB PSA World Tour Finals for 2020-2021 will take place in Cairo.

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

30 June (Wednesday): 30 June Revolution Day.

30 June- 15 July: National Book Fair.

July + August: Thanaweya Amma exams take place.

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

1 July (Thursday): Large taxpayers 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.

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

15 June (Saturday): EGX-listed will have to complete filing their financial disclosures for the period ended 31 March.

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 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.

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.

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.