PM — Bye, Twitter Blue

Good afternoon, wonderful people. We have a relatively calm day on the local news front, after COP27 took a mandatory day off yesterday.

THE BIG STORY TODAY

Cabinet is out with the rules and regulations for the expat car import scheme: The cabinet has published a detailed list of the rules, regulations and criteria for Egyptian expats looking to import new cars and get a rebate in exchange for upfront FX. The criteria details the taxes and fees that expats must pay — customs fees, VAT, schedule tax, and development fees — and where to pay them. The rules also clarify that expats need only carry a residency permit abroad or a non-Egyptian passport to become eligible, though they must have a valid bank account in the country of residence that has been open for at least three months.

Our Enterprise Climate X Forum is happening at the brand new Grand Egyptian Museum: We’re happy to announce that the Enterprise Climate X Forum is taking place at the Grand Egyptian Museum on Tuesday, 6 December 2022. We can think of no better place to discuss the world’s most important industry than in a world-class museum that stands as a testament to our nation’s ability to persevere (and innovate) for seven millennia.

What’s the Enterprise Climate X Forum? It’s our first industry-specific conference, where CEOs, top execs, investors, bankers and development finance folks have 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. You can learn more on our conference website here.

Some of the biggest names in business and finance are on board — are you? 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.

Who’s on board? 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

THE BIG STORY ABROAD

US President Joe Biden and Chinese President Xi Jinping’s meeting in Bali is leading the conversation in the international business press this afternoon. The two heads of state signaled their intention to reset — or at least improve — relations between Washington and Beijing, with Xi saying, “we need to find the right direction for the bilateral relationship going forward and elevate the relationship.” The story is on the front pages of Reuters, CNBC, the Wall Street Journal, the Financial Times, and Bloomberg.

ALSO- Amazon’s Jeff Bezos plans to give away the majority of his USD 124 bn wealth during his life, the bulk of which he plans to donate to fighting climate change and addressing “social and political divisions,” Bezos and his partner Lauren Sánchez told CNN in an exclusive interview.

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

• The Madbouly government’s state ownership policy document could go into effect at the end of this year, Vice Minister of Finance Ahmed Kouchouk told the Senate yesterday.
• Final contracts for the 10 GW Masdar-Infinity-Hassan Allam wind farm announced last week at COP27 could be signed before the end of the year, according to Hesham El Gamal, general manager at Infinity.
• EIB could invest in water projects in Egypt: The European Investment Bank (EIB) plans to commit USD 1.5 bn in new financing to Egypt, primarily focusing on water treatment, said the bank’s VP, Gelsomina Vigliotti.

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PSA #2- 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 refunds 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.

PSA #3- Good news for Upper Egypt startups: Applications for a Uplift4UpperEgypt — startup program run by Orascom’s Gemini Enterprises Africa, in partnership with the Sawiris Foundation, aimed at businesses in Upper Egypt, will open on 17 November, according to Al Mal.

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 a daytime high of 24°C tomorrow and a nighttime low of 14°C, according to our favorite weather app.

SIGN OF THE TIMES #1- Elon Musk ordered the end of remote work in his first email to Twitter employees, warning of “difficult times ahead.” In an email seen by Bloomberg last week, Musk claimed there was “no way to sugarcoat the message” about the economic outlook and how it will affect a company that relies on advertising like Twitter. Effective immediately, Twitter employees must work at least 40 hours per week in the office. Musk also said he wants subscriptions to account for half of Twitter’s revenue, which might not be going so great considering…

Twitter has suspended its Twitter Blue subscription service after several parody accounts took advantage of the USD 8 charge to get the coveted blue check mark that previously represented verified accounts and wreaked havoc, the WSJ reports. Among the parody tweets causing confusion: George W. Bush bashing Iraqis, LeBron James requesting a trade from the LA Lakers, and Eli Lilly announcing it will be selling insulin without charge.

SIGNS OF THE TIMES #2- Disney the latest to go into austerity mode: Walt Disney will implement a package of cost-cutting measures, including a company-wide hiring freeze and potential layoffs, as it looks to boost revenues following a disappointing earnings report. (WSJ | Reuters)

Business travelers are ditching one-day trips, leading airlines to revamp their flight schedules to accommodate the pandemic-driven trend, Reuters reports. A CWT report revealed that same-day travel’s share of domestic business trips dropped one percentage point to 3% from 2019 the percentage of same day travels is declining worldwide. The trend began as flight tickets were on the rise and online video calls, rather than in-person meetings, ousted the “industry standard” of booking quick trips, United Airlines CCO Andrew Nocella said on an earnings call last month.

The busiest business routes are also showing less traffic as crowds are cramming into more leisure-oriented routes. The Las Vegas-Los Angeles and Honolulu-Maui routes are now leading North America’s flight charts, instead of the corporate route of Los Angeles-San Francisco. Business-focused Sydney-Melbourne is also down to the fifth route instead of the second in 2019, according to Reuters.

Speaking of travel: Your trip of a lifetime can be just that — viable only for you and not for future generations. The number of long-haul trips exceeding 16k km need to remain at 2019 levels through to 2050 to allow the tourism industry to achieve net zero by that time, according to a report from the Travel Foundation. This needs to happen while flights switch to relying 100% on sustainable aviation fuels, while simultaneously promoting other modes of transport such as electric cars, high-speed trains and hydrogen buses, Bloomberg reports. The tourism industry is currently responsible for 11% of global greenhouse gas emissions, and this number is predicted to more than double by 2050 — the year forecasted as “the tipping point for all sorts of ecological disasters” by scientists.

Far-fetched, but entirely necessary: If we are able to make these changes until at least 2050, we might be able to stave off climate disaster and no longer be concerned about our ecological impact from jetting around the world. Countries like the Netherlands are already plugging in data to determine the effects of long-haul flights and encourage their tour operators to push for overnight train trips instead of short-haul routes in Europe. New Zealand is also providing “consumer-facing labeling to show clients what their emissions would be when selecting from competing zipline tours.” In addition, Booking.com will start showing carbon emission listings on flights and hotel searches, enabling customers to filter lower carbon emission results, according to the CEO of Chooose.

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Isn’t it strange to create something that hates you? Ex Machina is a suspenseful and dramatic science fiction film that follows Caleb Smith, a programmer at the world’s largest internet company. He wins an office competition to spend a week with the company’s CEO, Nathan Bateman, at his lavish (but isolated) mansion. When Caleb arrives, he discovers that the competition was actually a selection process for an employee to participate in a strange experiment to assess the human qualities of Ava, the world’s first designed AI humanoid robot. The assessment is meant to determine if she can communicate with people, and more importantly, if he would be able to accept dealing with her despite knowing she’s a machine. The movie is directed by Alex Garland and stars Domhnall Gleeson, Alicia Vikander, Sonoya Mizuno and Oscar Isaac. You can watch it on Amazon Prime.

⚽ With the exception of a few sporadic matches, it’s a fairly quiet week for football, with the main leagues pausing to gear up for the start of the Qatar 2022 World Cup.

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ABBA fans, get your 70s costumes ready and head to Room Art Space tonight at 9pm to dance the night away to the band’s beloved hits.

It’s a jam packed night at the Tap East with HOH: Hany Adel, Ousso Lotfy, and Hany El Dakkak will perform each other’s songs with new musical arrangements tonight at 9pm.

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Jamie Fiore Higgins recounts her lucrative yet harrowing experience as a woman, working at Goldman Sachs for nearly two decades in Bully Market. The book offers a rare insider’s account of a sales trader who climbed the ranks, becoming one of the rare senior female bankers at the firm amid “racist, sexist, and intolerant environment.” She details some what she witnessed over the 17 years she worked at the firm from substance use, workplace affairs, and the discriminatory culture that led to women and people of color being bullied and excluded. Some of the incidents she details include her co-workers mooing at her while she pumped for her fourth child, being told that she was only promoted because she was a woman, and coworkers using racial slurs in front of her and facing no consequences. The book ends in the aftermath of the #MeToo movement, which Higgins believes spurred enough change that some of the treatment she endured would have been unacceptable today. Nonetheless, she does not think the investment bank has changed, “just that people are more careful and better at keeping the dark side under wraps.”

EARNINGS WATCH-

Credit Agricole Egypt’s net income after tax rose 37.4% y-o-y in 9M 2022 to EGP 1.6 bn, according to its financial statement (pdf). The bank’s net interest income rose 15% y-o-y to EGP 4.4 bn during the period.

Abu Dhabi Islamic Bank Egypt’s (ADIB) net income rose 49% to EGP 1.5 bn in 9M 2022, according to its financial statement (pdf). The bank’s revenues rose 35% y-o-y to EGP 4.07 bn, while its net interest income rose 32% to EGP 3.43 bn.

Telecom Egypt’s 9M 2022 net income was essentially flat y-o-y at EGP 6.2 bn, while its normalized bottom line for the period (excluding one-offs — Vodafone reversals, provisions, and FX impacts) rose 25% y-o-y to EGP 7.1 bn, according to its earnings release (pdf). The company’s consolidated revenues rose to EGP 32.3 bn, up 22% y-o-y.

Abu Qir Fertilizers and Chemical Industries’ net income rose to EGP 2.8 bn in 3Q 2022, up 115% y-o-y, according to its financial statements (pdf). The company’s revenues surged to 80% y-o-y to EGP 4.8 bn.

Alexandria Mineral Oil Company’s (AMOC) bottom line rose 74% y-o-y in 3Q 2022 to register EGP 398.6 mn, according to its financial statement (pdf). The company’s top line rose 60% y-o-y to EGP 6.0 bn.

Talaat Moustafa Holding’s bottom line rose 15% y-o-y in 9M2022 to register EGP 1.97 bn, according to its earnings release (pdf). The company’s top line rose 23% y-o-y to EGP 13.9 bn.

MARKET ROUNDUP-

The EGX30 rose 1.3% at today’s close on turnover of EGP 3.05 bn (63.3% above the 90-day average). Local investors were net buyers. The index is up 1.6% YTD.

In the green: Fawry (+6.6%), Eastern Company (+3.6%) and Palm Hills Development (+3.6%).

In the red: Oriental Weavers (-5.3%), CIRA (-3.4%) and GB Auto (-2.7%).

Thrifting is becoming more commonplace in Egypt: Second hand clothing has long been shrouded in stigma in Egypt, but it now seems that attitudes towards pre-owned clothing are starting to change. More and more people in Egypt are now opting for purchasing second hand garments — owing to the fact that they are cheaper and less environmentally taxing alternatives to buying new clothes. And this isn’t an unprecedented shift in consumer behavior: Elsewhere around the world buying second hand or “thrifting” has long been en vogue.

Buying second-hand is undeniably better for the environment than purchasing new: Increasing the share of pre-worn clothing in our closets is among the best ways to drive down our carbon footprint and to help scale back fashion industry related greenhouse gas emissions — which already make up some 10% of global emissions and are set to rise by over 50% by 2030, according to the World Bank.

The second-hand market worldwide is expected to eclipse fashion giants in terms of value by the end of the decade: The total value of the second-hand clothing market was estimated to be around USD 96 bn in 2021, according to figures compiled by US-based second hand online retailer ThredUp. By 2026, the second-hand clothing market around the world is projected to reach some USD 218 bn, on track to grow by some 127% in five years.

Even fast-fashion giants are scrambling to keep pace with the emerging trend: Spanish fast-fashion retailer Zara — which faces accusations of causing immense environmental harm — recently announced that it would be dipping its toes into the resale market to reportedly make up for some of the environmental damage it has caused. The company is helping UK shoppers resell, repair, or donate their Zara clothing. This comes after fast-fashion rival H&M last year launched its own resale platform that allows users to buy and sell second-hand clothing of all stripes.

This is all thanks to the youth: Most of the growth in the second-hand clothing industry worldwide is mostly thanks to the changing preferences of younger consumers. Gen Z and Millennial shoppers are the most likely to be buying second-hand and it's because of cost and environmental concerns, the ThredUp report found. Some 62% of Gen Z and Millennials report that they look for an item secondhand first before looking to purchase it new.

Egypt is a net-importer of second-hand clothing: In 2019, Egypt imported some 5.3k tons of used clothing worth USD 6.6 mn. During 2020, that figure fell considerably to some 2.8k tons, worth USD 2.3 mn at the time, according to CAPMAS in 2020 and 2021.

Most of this clothing ends up in one place: Wekalet El Balah is by far the most popular market for second-hand clothing in the country. But there are a bunch of other options: Facebook groups, garage sales and second-hand resellers.

Younger generations are the ones leading the charge on second-hand: People used to buy pre-owned clothes in secret but now young people no longer experience the kind of shame that plagued older generations, and instead brag about their finds, Heba El Desouky, founder of As Good As New, tells Enterprise.

Which is in line with broader generational concern for the state of the world: “People are starting to rethink their consumer decisions so that they don't harm the environment,” El Desouky says. Younger generations also seem to value being “real over being fashionable,” she explains.

Fast fashion can be prohibitively expensive anyway: Fast fashion in Egypt has become significantly more expensive in recent years and outright unaffordable to even middle class shoppers, she explained.

And its quality is often subpar: “The world already has too many second hand clothes for all of us to use, and this is a good chance to wear good quality clothes at a low price,” fashion designer and blogger Bassant Maximus says.

Online resellers are trying hard to communicate this message to shoppers: Platforms like As Good As New allow individual users to buy and sell mid- to high-end and luxury garments at way more affordable prices than retail. Designer handbags are among their most popular offerings, El Desouky says.

Equilibrium in the second-hand market: In the past year there’s been a surge in interest in second-hand clothing, Samar Selim, founder of online second-hand market place and showroom, Esaki, tells us. “There used to be more sellers than buyers but I think they’re about the same now,” Selim says.

Upcyclers are working on a similar yet distinct segment of this industry: Companies like Green Fashion produce sustainable clothing and products from garment industry waste and leftover fabric. To turn what would otherwise be sent to a landfill, Green Fashion collects discarded denim and cotton textiles from factories and employs women from marginalized communities to transform them into wearable clothing.

But there are some cultural hurdles that still need to be overcome: Unwritten social codes like never wearing a dress more than once need to be reassessed, says El Desouky. For many, buying “pre-loved” clothing is falsely considered unhygienic and that newly manufactured garments are the only way to go, Maximus explains.