PM — Back in the green

Good afternoon, friends. We have a relatively calmer start to the week — with some good news to boot.

THE BIG STORY TODAY

The EGX is back in the green YTD for the first time in 10 months: The benchmark EGX30 index is up 0.3% year-to-date after rising 1.9% in today’s trading, marking the first time since 13 January the index is in the green on a YTD basis. The EGX30 has been rallying in the past couple of weeks, since Egypt announced it reached a staff-level agreement with the IMF for a USD 3 bn, 46-month loan and moved to a “durably flexible” exchange rate regime.

THE BIG STORY ABROAD

Picking up where we left off this morning, the US midterm elections are still leading coverage in the international business press this afternoon, with Reuters, the Financial Times, the Wall Street Journal, and CNBC all taking note of the Democrats’ narrow victory in the US Senate.

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

• The US, Germany and other European countries have pledged to provide more than USD 550 mn to help Egypt decarbonize its power infrastructure and install new renewable energy capacity.
• Urban annual inflation rose to 16.2% in October, its highest level in four years, on the back of surging food prices.
• Egypt can cover USD 16 bn financing gap, says Maait: Egypt expects to see more FDI and more funding inflows, including from the Gulf and “other sources,” after reaching a staff-level agreement with the IMF for a USD 3 bn, 46-month loan, Finance Minister Mohamed Maait told Bloomberg on Thursday.

The Enterprise Climate X Forum, our first industry-specific conference, is taking place on Tuesday, 6 December. The Enterprise Climate X Forum will give insiders and newcomers alike the chance to talk about how to build a climate-centered business — and how to make sure your business continues to have access to the funds it needs to grow. Expect it to be heavy on lessons learned in Egypt and other global growth markets — and lots of success stories.

Stay tuned very soon when we reveal the venue. You’ll love it, we promise.

Some of the biggest names in business and finance are on board — are you? The Enterprise Climate X Forum is taking place with the generous support of our friends, including:

• Banking partners: HSBC | Mashreq | Attijariwafa Bank
• Telecom partner: Etisalat by e&
• Event partners: Hassan Allam Utilities | Infinity

DO YOU WANT TO ATTEND? The first wave of invites is going out now. If you’re a C-suite exec, business owner, climate professional, DFI staff, investor or banker, please email us at climatexrsvp@enterprisemea.com to signal your interest, letting us know your name, title and where you work.

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Five to seven agreements will be signed with companies to export renewable energy at the SCZone, Planning Minister Hala El Said told Bloomberg Asharq (watch, runtime: 1:36). The SCZone has long been expected to sign agreements with international companies to establish green hydrogen and ammonia plants at COP27. Initial agreements worth bns of USD have been signed this year, the most recent of which was with Maersk for a huge USD 15 bn facility capable of producing 3 mn tons of fuel a year.

PSA- If you’re self-employed, you have to register in the Tax Authority’s e-invoice system by 15 December. This includes self-employed doctors, engineers, lawyers, and artists, the Egyptian Tax Authority said in a statement. Only e-invoices will be considered for VAT deduction or refund as of 1 April, 2023.

What e-invoicing system? In late 2020, the Tax Authority launched a pilot program for B2B e-invoicing with 134 companies, before expanding the system to all large taxpayers in July 2021. All B2B and B2C invoices across the country should be fully automated by December. We have a primer on the system, its purpose, the timeline of implementation along with a list of phase one companies here.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

☀️ TOMORROW’S WEATHER- Expect temperatures to rise to 27°C during the day tomorrow in the capital city before dipping to 16°C at night, our favorite weather app tells us.

US stocks had their best day since 2020 on Thursday in the wake of weaker-than-expected inflation data that could allow the Federal Reserve to begin to slow the pace of its interest rate hikes.

By the numbers: The tech-heavy Nasdaq surged 7.4% while the S&P 500 closed 5.5% higher. The Nasdaq finished the week 8.1% higher and the S&P was up 5.9%.

Price pressures eased in October: Inflation data published Thursday showed that consumer prices grew by 7.7% in October, down from 8.2% the month before. This is the lowest rate since January and came 0.3 percentage points below expectations.

Not so fast: Not joining in with the optimism are some of Wall Street’s biggest fund managers, who are maintaining a level of caution about how inflation will play out in the months ahead. JPMorgan and UBS are among a group of asset managers who believe that high inflation is here to stay and are holding onto their defensive positions, according to Bloomberg.

Beauty product sales are booming, distinguishing the beauty industry from other industries facing diminishing demand due to inflation-cautious consumers, The Wall Street Journal reports. Coty Inc. — maker of Bourjois makeup and Hugo Boss cologne — saw 9% y-oy growth in organic sales in 3Q 2022, marking the company’s sixth consecutive significant quarterly sales rise, after sales plummeted during the pandemic. E.l.f. Beauty Inc., which makes low-cost makeup, reported a 33% y-o-y sales increase last quarter, while L’Oréal’s rose 9% y-o-y during the quarter.

Demand for luxury goods is unfaltering — but drugstore products are flying off the shelves: Coty’s luxury fragrances and cosmetics are seeing strong demand, reaffirming that luxury goods remain robust despite a looming recession. But mass-market products are also seeing strong sales growth, as consumers with smaller disposable incomes continue to buy lower-priced cosmetics and skin products. This trend comes as beauty products are a (small) luxury that most people can afford even on a limited budget, which mentally limits their feeling of cost-cutting, analysts say.

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A classic on Netflix: 1997’s As Good As It Gets is always a great watch: This awardwinning movie starring Jack Nicholson and Helen Hunt is what every rom com-drama aspires to be, with a lot to say about overcoming adversity. It follows Melvin Udall (Nicholson), a grumpy yet successful author who is rigid about any change to his routine. He shows clear symptoms of obsessive compulsive disorder throughout the movie, including having a breakfast ritual every morning and an insistence on being served by the same waitress, Carol (Hunt). Udall’s life all comes tumbling down as his neighbor gets into an accident, leaving his dog in Udall’s care, while Carol’s son — his typical waitress at breakfast who is the only one able to endure his constant harsh comments — falls ill, forcing her to quit her job. Despite Udall’s unlikeable and shrewd personality at first, he does remarkable and compassionate things for others as he searches for Carol to restore order back into his life.

⚽ The Premier League’s 16th week is drawing to a close. The final matches before the World Cup are Brighton v Aston Villa today at 4:30pm and Fulham v Manchester United at 6:30pm.

When is the following round? The first matches of the 17th round will take place on 26 December.

Reminder: You can keep up with the action with the Enterprise Fantasy League by clicking here or entering the code 8o4sut.

Today’s most important matches in Serie A:

Roma v Torino (4pm)

Milan v Fiorentina (7pm)

Juventus v Lazio (9:45pm)

⛳ IN THE GOLF WORLD- The US’ Andy Ogletree walked away with the International Series Egypt title this afternoon. Austria’s Bernd Wiesberger came in second place, followed by South Korea’s Jeunghun Wang, according to the championship’s scoreboard.

Correction: 13 November 2022

A previous version of this story incorrectly stated that Andy Ogletree was awarded a USD 1.5 mn prize after winning the tournament.

???? EAT THIS TONIGHT-

Are you a sucker for sweets? Kez Basque Cheesecake is hands down the best cheesecake we ever tried. With a “beautiful burnt exterior, super creamy interior,” it’s the type of dessert that will be devoured in a matter of seconds, and leave you wanting more. Kez Cheesecake was a big hit last Ramadan, and it’s still going strong. Kez outgrew his New Giza home kitchen, and opened two new pickup locations — Zayed and New Cairo — in less than a year of operating. Make sure to put in your orders 24 hours in advance of pickup.

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Don’t miss out on today’s jazz and pop hits performance by the Samer George Quartet and vocalist Monica Roshdy at Cairo Jazz Club in Agouza at 9pm.

ROOM Art Space is hosting The Comedy Bunch’s stand up comedy open-mic night at 9pm. If you think you have what it takes to make a crowd giggle, register through this link.

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Letters to a Young Poet by Rainer Maria Rilke is an amazing archive of poetry that delves into Rilke’s exceptional insights and striking ideas as he responds to a 1903 military academy student who submitted some of his lines for assessment. It’s a collective of ten poems, which the artist has said contains some of his creative genius — making it a must-read for academics, poetry enthusiasts and anyone with a creative mind.

The EGX30 rose 1.9% at today’s close on turnover of EGP 1.2 bn (7.4% above the 90-day average). International investors were net buyers. The index is up 0.3% YTD.

In the green: e-Finance (+6.4%), Fawry (+5.0%) and Egypt Kuwait Holding-EGP (+4.7%).

In the red: Rameda Pharma (-1.8%), Telecom Egypt (-1.4%) and QNB Al Ahli (-1.3%).

Worker productivity is at different levels around the world: In the US, productivity is slumping after witnessing a surge during pandemic lockdowns, although there remains no consensus thus far as to why this is occurring. Meanwhile, in a vastly different economic climate in India, productivity has yet to recover from a dip caused by the pandemic, but relatively lower levels of tech integrations and bad management practices have been identified as two main factors behind the initial plunge.

The jury’s still out on why employees in the US have become less productive: In the first half of the year, productivity — the measure of how much output employees can produce per hour — plummeted by the sharpest rate ever recorded in more than 70 years, the Washington Post reports, citing data from the Bureau of Labor Statistics. The decline in productivity is puzzling as it follows a surge in productivity to levels not witnessed in decades after pandemic-induced lockdowns forced an immediate shift to remote work, prompting some economists to suppose that the pandemic may spur longer-term growth.

While productivity is high in the manufacturing industry, it’s on the decline among white collar occupations, according to an economics professor at Dartmouth College, although knowledge workers’ contributions are harder to quantify, making it more difficult to measure their productivity.

Employees have argued that flexibility aids their efficiency, raising new questions regarding the transition to hybrid models and remote work. This also coincides with a time when quiet quitting has grown increasingly popular, particularly among younger employees, leading to some speculation that it is behind the drop. While the term “quiet quitting” may have recently been added to our lexicon, the practice itself is not new, so it is unlikely to be behind the drop in productivity in the US, Business Insider suggests.

Productivity is also down in India — but on a different trajectory: Data from the Centre for Monitoring Indian Economy (CMIE) indicates that revenue per employee (RPE) — which is used as a proxy for productivity — fell in 2020 during the pandemic. The fall was expected, but what wasn’t anticipated is the decline carrying through in 2021 even though the country’s real GDP grew at an 8% clip, The Print reports. Average RPE fell between 2019-2021 across the wholesale, manufacturing, construction and retail sectors, with the most prominent decline in the manufacturing sector (28%), in stark contrast to the trend in the US.

What’s behind India’s drop in productivity? Poor management practices could be a factor, suggests a report published in Harvard University’s Quarterly Journal of Economics, which looks into whether differences in management practices across firms can explain differences in productivity. The study, which compared management practices at large Indian textile firms, found that adopting better management practices raised productivity by 17% in the first year compared with control group firms that did not change their practices.

Relative lack of technology is another factor: A 2018 report, published in the American Economic Journal, demonstrates that low-income nations had lower productivity compared to high-income countries not because they did not adopt key technologies, but because they utilize these technologies at a lower intensity, relative to countries with high incomes. An Organization for Economic Co-operation and Development (OECD) report explains that digital technologies fall short in counteracting a decline in productivity due to the fact that they go hand-in-hand intangible assets, such as ICT-related competencies, organizational capital and data and software, which are sometimes difficult and expensive to obtain.