Wednesday, 10 November 2021

PM — Annual urban inflation unexpectedly slid in October to 6.3% from its 20-month high of 6.6% in September.

TL;DR

🔎 WHAT WE’RE TRACKING TONIGHT

It’s a sprint to the weekend, ladies and gentlemen, with inflation cooling down, updates on the Vodafone subsidiary shuffle and new regulation approved by cabinet.

But first, some good news…

Our stocks are among Goldman Sachs’ top picks for 2022, Bloomberg reports, with strategists at the investment bank recommending going long on Egyptian equities. EGX30 stocks — like those of many emerging markets — are widely seen as undervalued right now, creating the potential for gains in the mid-term.

The EGX30 fell 0.9% today on turnover of EGP 821.2 mn (45% below the 90-day average). Regional investors were net buyers. The index is up 5.9% YTD.

Elsewhere in emerging markets, Goldman strategists tip USD-denominated Mexican and Russian shares, on the back of attractive valuations and the fact that the two countries are well-insulated from macro trends.

The big picture, per Goldman: Globally, demand will continue to outstrip supply, inflation is set to keep accelerating, and China’s growth could slow further. Equities and hard liquidity are currently preferable to bonds, which are “struggling.”

THE BIG STORIES TODAY-

Inflation unexpectedly cooled: Annual urban inflation slid in October to 6.3% from its 20-month high of 6.6% in September, as the rate of inflation in food and beverage prices and education dipped from the month prior, according to figures released by Capmas today. The decrease went against analysts’ expectations of inflation continuing its upward trend through 4Q2021 on the back of the recent hike in fuel prices and a 28% rise in factories’ gas bills, compounded by a surge in global commodity prices.

Vodafone Global nods to Vodacom buying out its stake in Vodafone Egypt: Vodafone Group has agreed to transfer its 55% stake in Vodafone Egypt to Vodacom Group, its sub-Saharan African subsidiary, in a EUR 2.72 bn transaction, according to a company statement. The move will “simplify” the management of its African holdings, according to the UK-based mother company. The acquisition is expected to conclude before 31 March 2022.

The Madbouly cabinet just made it easier for home owners to register their properties under amendments to the Real Estate Registry and the Income Tax Act approved at its weekly meeting today. Under the changes registration will no longer need lengthy on-ground inspections by notaries and pain-staking documentation that trace provenance. Instead, notaries will accept official documents submitted by the homeowners and skip the pre-approval phase.

The registration process will also no longer be linked to pre-paying the 2.5% property disposal tax or a flat-tax rate on older contracts.

^^We’ll have more details in tomorrow’s AM Edition.

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

  • The US and Egypt wrapped up their two-day strategic talks with the two sides agreeing on “deepening” cooperation, but without Washington giving Egypt formal public backing on the Grand Ethiopian Renaissance Dam.
  • OTO Courses nets investment worth USD 400k from EdVentures: Egyptian edtech platform OTO Courses has secured an investment worth USD 400k (c. EGP 6.3 mn) from Nahdet Misr for Publishing’s VC arm, Edventures.
  • South Africa and London-based fintech company JUMO is considering an expansion into Egypt, after raising USD 120 mn in its latest funding round.

HAPPENING NOW- Tanzania’s President Samia Suluhu Hassan is in town for a three-day visit, according to an Ittihadiya statement. She is scheduled to hold talks with President Abdel Fattah El Sisi on strengthening economic links between Egypt and Tanzania, the East African reports. Hassan is also set to witness the signing of eight unspecified agreements, including one contract.

It’s the last day of the TransMea transport conference. The first two days of the exhibition saw Egypt sign a total of 21 new transport infrastructure agreements, with the Cairo Metro taking the spotlight and accounting for the majority of the big contracts signed at the conference. Want to catch up? We had a detailed breakdown of all the agreements and what they each entail in this morning’s edition of Hardhat, our weekly infrastructure vertical.

Cairo ICT is also on its final day today. A number of companies have been unveiling their most recent technologies at the expo, including Visa, which presented its digital payments technology earlier today (pdf) and Banque Misr, which showcased its online banking system (pdf).

FOR TOMORROW-

Anghami SPAC merger deadline is almost here: Tomorrow is Anghami’s deadline to pull the trigger on a merger with blank-check firm Vista Media Acquisition Company and list on the Nasdaq. The company had previously extended the deadline in August.

🗓 CIRCLE YOUR CALENDAR-

The two-day Africa Fintech summit kicks off next Tuesday, 16 November. The summit looks at innovation in the fintech ecosystem, venture capital and other forms of investing, and will also discuss the rise of healthtech.

Calling all Egyptian entrepreneurs aged 23-35: You have exactly two weeks to apply for the acceleration exchange program Meet Silicon Valley for a chance to travel to California for a 10-day program to meet with tech executives and investors.

☀️ TOMORROW’S WEATHER- Temps look set to remain well below the 30s: Look for a daytime high of 26°C and a nighttime low of 18°C tomorrow.

THE BIG STORY ABROAD-

The biggest ever sell-off in Chinese international junk bonds intensified this week, the Wall Street Journal reports, with yields topping 25% as prices bottom out. The historic selloff has eradicated a third of bondholders’ wealth in six months. Most of China’s high-yield or “junk” bonds are concentrated in its property market, which is struggling to emerge from turmoil sparked by the Evergrande crisis, compounded by regulatory restrictions on borrowing and a slowdown in house sales. Many of the country’s property developers have defaulted on bond payments in recent weeks.

Where do things stand with Evergrande? The crumbling property giant has been hanging by a thread for weeks, but the dramatic default that was prophesied has not yet come to pass. Most recently, Evergrande managed to raise USD 145 mn by selling a 5.7% stake in media firm HengTen Networks Group in an attempt to meet USD 148 mn in overdue payments this week.

Crackdown of some of the “biggest companies” in the US coming in weeks: Over in the US, the Department of Justice appears to be looking at a crackdown within weeks that will involve “some of the biggest companies” operating in the US, senior law official John Carlin told the Financial Times. Potential targets include companies that had violated the terms of deferred prosecution agreements, which postpone criminal charges for a set period of time to allow a business to prove that it could remedy the wrongdoing in exchange for a financial penalty, Carlin says. He says the move comes as part of the Biden administration’s pledge to crackdown on corporate wrongdoing.

Draft of final COP26 pledge asks countries to try again next year: The first draft (pdf) of a conclusive COP26 agreement, released earlier this morning, has asked countries to “revisit and strengthen the 2030 targets in their nationally determined contributions,” by the end of 2022 — when Egypt is expected to host COP27 in Sharm El-Sheikh. The draft proposal does not specify whether the pledges should be improved on an annual basis going forward, potentially leaving that decision to the next conference. The proposal urges richer countries to “scale up” financing for low income countries that will suffer the worst effects from a warming planet but remains disappointingly light on details outlining when and by how much they are expected to do so. The World leaders from the nearly 200 countries in attendance are expected to continue negotiating the final text of a conclusive COP26 agreement before the Glasgow summit ends this weekend, Reuters reports.

Observers aren’t taking this as a good sign: Environmental watchdog Greenpeace has already called the draft “an agreement that we’ll all cross our fingers and hope for the best.” Research group Climate Action Tracker (CAT) has said that current national pledges fail to cut greenhouse gas emissions as significantly as is needed to reach the 1.5 degree celsius cap on warming outlined in the Paris Agreement in 2015. Commitments so far put us on track to reach an average 2.4 degrees celsius of warming above pre-industrial levels by 2100, the group said.

🚙 FOR YOUR COMMUTE

Municipal metaverse: South Korea will be entering the metaverse with a five-year plan to build a virtual platform for public services and cultural events, tentatively christened Metaverse Seoul, according to a municipal press release. The capital city’s government will invest USD 3.3 bn next year alone to build its self-developed virtual platform, envisioned as “a new continent … where public demand and private technologies are combined,” according to its smart cities director.

When can we visit? South Korea’s capital will ring in the coming new year with a ceremony in the virtual city. By 2026, Metaverse Seoul will host a city hall where residents can make enquiries and file paperwork, a mayoral office, a business hub and co-working spaces, a fintech lab meant to attract foreign investment, networking and conference facilities, and virtual versions of the city’s main tourist attractions.

The public sector enters the Matrix: The fight to build the metaverse is set to raise a whole lot of thorny questions about territory, ownership, accessibility, and the distinction between public and private space in the digital sphere. Signs abound that Mark Zuckerberg’s recent rebrand of Facebook to Meta was merely the opening play in a coming corporate turf war over the new frontier. Seoul’s announcement brings government into the fray, and may set the tone for private-public collaboration in the space. Expect interest in any coming announcements about which private firms and technologies are brought in to help develop Metaverse Seoul.


How not to manage your wealth: A memoir by Elon Musk. The Tesla CEO’s net worth plunged USD 50 bn in two days — the biggest drop in the history of the Bloomberg B’naires Index — after he set up a Twitter poll asking if he should sell 10% of his shares in the automaker. Apparently, selling USD 21 bn of Tesla stock was “the only way” for Elon to “pay taxes personally.” The poll, now branded “the most expensive tweet in history,” drove down Tesla’s share price by 16% this week, with more than half of the respondents voting yes. Also not helping the company’s share performance: Elon’s brother sold some USD 109 mn-worth of his shares just one day before the poll.

Don’t set up a GoFundMe for Musk just yet: All that being said, Tesla is still up by a whopping 45% this year and Musk is still the richest man on earth.

👌 ENTERPRISE RECOMMENDS

📺 ON THE TUBE TONIGHT-

(all times CLT)

Empowering stories of women who refuse to give up: The women-focused show Ela Ana made waves with the release of its first season last year, and the show has had a subsequent seven installments since. Each 10-episode installment tells the story of a woman or a group of women who face challenges — often related to the patriarchy — in Egyptian society, with the series being praised for its frank portrayal of thorny issues, from narcotics use, to [redacted] assault, to inheritance laws. The installments feature some big name stars, with Jamila Awad playing a young woman living with vitiligo who hides her condition from her fiancé in one series, and Yosra El Lozy playing a woman who unknowingly has her life exposed on social media in another.

The most controversial and hard hitting is the “Banat Moussa” installment, which shows how far the patriarchs of an upper Egyptian family will go to prevent their deceased brother’s daughters from receiving their rightful inheritance. The series is available to stream on WatchiT.

It’s the international break, so there are no league games going on.

🎤 OUT AND ABOUT-

(all times CLT)

For electronic music fans, Cairo Jazz Club 610 has its latest Impulse Thursday night coming up tomorrow at 8pm. Copenhagen-based DJ Denis Horvat will play back to back with Amsterdam’s Colyn, after a warm up set from Egypt’s Aly Goede. Info on how to reserve is on the event’s Facebook page.

Striking a very different musical note, Makan is holding a concert at 8pm tonight featuring the Mawaweel band, and folklore singers Abd El Rahman Balalh and Sayed Emam.

The “Back to Egypt: A Brazilian Collection of Photographs” exhibition is running at Zamalek’s Gezira Art Center from 3-30 November, from 10am-2pm and 5pm-9pm (except Friday). The exhibition features 19th Century photos of Egypt from Brazilian Emperor Dom Pedro II’s private collection.

💡 UNDER THE LAMPLIGHT-

Sherlock, but make it Masry: Modern adaptations of Arthur Conan Doyle’s beloved Sherlock Holmes stories have boomed in recent years. Among the earliest pretenders to the author’s throne is Nicholas Meyer, whose Holmes-inspired novel and film The Seven-Per-Cent Solution was a hit in the seventies (as were the two eighties-era Star Trek films he directed.) Now Meyer is back on the case with the genius crime-solver and his physician sidekick—this time in Egypt, no less—in his latest novel The Return of the Pharaoh, released yesterday.

Egyptology, my dear Watson: Set in the era of British occupation, colonial cliches abound in this murder-mystery-meets-Mummy-Returns romp. Complete with disappearing English dukes, exotic dancers who moonlight as spies, sandstorms, and a cameo from the real-life British Egyptologist who discovered Tutankhamun’s tomb, Meyer’s jam-packed plot promises kitsch if nothing else. “Meyer paints a vivid picture of a former and less established Egypt, acknowledging the pillaging of artifacts by Western countries like Britain and France,” according to the Associated Press. Gold-standard reviewer Kirkus is less kind: “A rousing adventure that has little in common with the Holmes canon except for some proper names.”

🌊 GO WITH THE FLOW

EARNINGS WATCH- CI Capital reported a net income of EGP 241 mn in 3Q2021, up 122% y-o-y, the investment bank said in its earnings release (pdf). Total revenues were also up 36% to EGP 773 mn.

MARKET WATCH-

The EGX30 fell 0.9% today on turnover of EGP 821.2 mn (45% below the 90-day average). Regional investors were net buyers. The index is up 5.9% YTD.

In the green: Medinet Nasr Housing (+3.1%), Mopco (+2.2%) and Abou Kir Fertilizers (+0.8%).

In the red: Gadwa for Industrial Development (-5.1%), Aspire Capital (-3.9%) and AMOC (-3.3%).

📆 CALENDAR

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.

31 October – 12 November (Sunday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

7-10 November (Sunday-Wednesday): Cairo ICT 2021, Egypt International Exhibition Center, New Cairo.

7-10 November (Sunday-Wednesday): TransMea 2021, Egypt International Exhibition Center, New Cairo.

11 November (Thursday): Deadline for Anghami SPAC merger.

15 November (Monday): Unvaccinated public sector workers won’t be allowed into their workplaces.

15 November (Monday): Car dealerships must comply with new consumer protection rules requiring price stickers to be attached to vehicles.

15-21 November (Monday-Sunday): Intra-African Trade Fair 2021, Durban, KwaZulu-Natal, South Africa.

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

17 November (Wednesday): The International Finance Corporation hosts the Sustainable Finance Forum.

18-19 November (Thursday-Friday): British royal family members Prince Charles and the Duchess of Cornwall visit Cairo.

25 November (Thursday): Rameda Pharma’s annual general meeting (pdf), at which it will decide on the sale of a 5% stake in the company from an individual shareholder to an unnamed institutional investor.

25-27 November (Thursday-Saturday): RiseUp Summit, Cairo, Egypt.

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.

30 November (Tuesday): Launch of open call by GIZ and KfW for green project proposals in Egypt as part of their Investing for Employment facility (pdf).

1 December (Wednesday): Unvaccinated members of the public will be banned from government buildings from this date; unvaccinated students will be prevented from accessing university campuses.

1 December (Wednesday): Government departments will begin moving to offices in the new capital.

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.

7 January 2022 (Friday): Coptic Christmas.

27 January 2022 (Tuesday): National holiday in observance of 25 January revolution anniversary / Police Day.

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.

2 April 2022 (Saturday): First day of Ramadan (TBC).

22-24 April 2022 (Friday-Sunday): World Bank-IMF spring meeting, Washington D.C.

24 April 2022 (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April 2022 (Monday): Sham El Nessim.

25 April 2022 (Monday): Sinai Liberation Day.

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

2 May 2022 (Monday): Eid El Fitr (TBC).

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.

30 June 2022 (Thursday): June 30 Revolution Day, national holiday.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

30 July (Saturday): Islamic New Year.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday.

18-20 October 2022 (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

**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.

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