PM — Energy price caps are coming for the UK + EU

Happy Tuesday, wonderful people. We have an interesting — albeit not-crazy-busy — hump day on the home front today.

THE BIG STORY TODAY

Gov’t is on board for more FX flexibility, El Said says: “We as a government do agree that a flexible exchange rate is definitely good for the economy," Planning Minister Hala El Said told BloombergTV today (watch, runtime: 6:40). The government would back further EGP depreciation the minister said, following weeks of speculation that CBE Governor Hassan Abdalla will gradually allow for more flexibility in the EGP exchange rate in a bid to secure new IMF assistance

THE BIG STORY ABROAD

Newly-minted UK Prime Minister Liz Truss’ first day in office and ongoing energy woes across Europe are leading the conversation in the international business press this afternoon. Truss is currently “finalizing” a GBP 100 bn package that would place a ceiling on energy prices for households and businesses in a bid to address soaring costs, Reuters and the Financial Times report. The EU appears to be considering following in Truss’ footsteps, with Brussels reportedly lobbying to impose similar caps on gas prices across the EU, according to the Financial Times. Why is this all so significant? Energy bills in Europe could rise by as much as EUR 2 tn “at their peak early next year,” Goldman Sachs said in a note this week, according to Bloomberg.

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

• Could Telecom Egypt’s stake in Vodafone Egypt be in play? The Qatar Investment Authority (QIA), Saudi Arabia’s Public Investment Fund, and Abu Dhabi’s ADQ are all eyeing part of state-owned landline monopoly Telecom Egypt’s stake in Vodafone Egypt.
• Activity in Egypt’s non-oil private sector contracted at a slower pace in August on a relative easing of inflationary pressures, with the purchasing managers’ index rising for the second consecutive month.
• EGX-listed private sector giant CIB is planning a multi-bn EGP capital increase that would raise its capital by around a third.

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FOR TOMORROW-

US climate envoy John Kerry will be in town tomorrow for the Egypt-International Cooperation Forum (Egypt-ICF), which runs 7-9 September at Almasa Convention Center in the new administrative capital. The three-day event will bring together global policymakers, ministers, development partners and other participants ahead of COP27 to discuss climate action and green transition, food security, and others with a focus on Africa. Check the full agenda here (pdf).

Tourism expo starts tomorrow: The four-day Gate Travel Expo 2022 starts tomorrow at El Qubba Palace.

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Our monthly list of data points to keep your eye on over the next few days and weeks:

• Foreign reserves figures for August should be out during the first week of the month.
• Inflation figures: Inflation data for August from Capmas will land on Saturday, 10 September. Expect the Central Bank of Egypt to follow up on Sunday, 11 September with its inflation report.
• Interest rates: The Central Bank of Egypt’s Monetary Policy Committee meets on Thursday, 22 September to review interest rates.

We’re expecting some sort of announcement from the government on how it plans to proceed with its privatization program, according to media comments Finance Minister Mohamed Maait gave last week. This came on the same day as Prime Minister Moustafa Madbouy met with the heads of the EGX and the Financial Regulatory Authority to discuss plans to sell stakes in state-owned enterprises on the bourse.

Support measures coming for local commercial ships? Transport Minister Kamel El Wazir will hold a meeting this week with the maritime transport sector and private shipping companies to discuss ways to boost the commercial fleet, Al Mal reports, citing an unnamed source.

GECF to meet ahead of COP: The Gas Exporting Countries Forum (GECF) will hold a virtual coordination meeting in the run-up to COP27 next Thursday, 15 September, it said in a statement. The meeting will cover the developments regarding the UN climate change negotiations, it will also see all 19 members exchange views regarding the matter.

☀️ TOMORROW’S WEATHER- Expect temperatures to rise to 36°C during the day tomorrow before falling to 24°C at night, our favorite weather app tells us.

KSA wants more tourists to visit — and form their own opinions about the kingdom: Saudi Arabia is looking to attract some 55 mn tourists a year by 2030 — a major leap from the 3.5 mn (without accounting for religious tourists) who visited the country last year — as part of Crown Prince Mohammed bin Salman’s push to diversify its economy. To that end, the kingdom plans to spend USD 1 tn over the coming decade to help turn itself into a mass-market tourist destination, with projects underway to build resorts and eco-lodges on its Red Sea coast, Wall Street Journal writes. The plans also include the USD 40 bn Diriyah development project “that has echoes of Colonial Williamsburg plus luxury hotels and Michelin-starred restaurants,” the WSJ says. The kingdom has some work to do to change public perception of its culture and rules, but hopes that by relaxing some of its strictest rules, it can reel in a wider segment of tourists who can, in turn, help drive a change in that perspective. “Saudi has one of the largest gaps between public perception and reality,” Diriyah CEO Jerry Anzarilla said. “We will welcome people and allow them to make up their own mind.”

Move over Bill Gates, India’s Gautam Adani is now the world’s third richest man: After his net worth nearly doubled to USD 141.4 bn over the past year, the founder of Indian industrial conglomerate Adani Group is now ranked as the third-wealthiest person on the planet, according to the Bloomberg B’naire Index, surpassing Bill Gates and Warren Buffet, and closing in on a level of fortune shared by only Amazon’s Jeff Bezos and Tesla’s Elon Musk. During a year when many capital markets around the world fell apart, Adani Group shares saw a phenomenal increase, with shares of several of Adai’s companies rising by more than 1000% since 2020, according to Bloomberg. The 60-year-old college dropout first tried his luck in the diamond trade in Mumbai in the early 1980s, before switching to coal and ports. He continued to build and expand his empire, which now includes cement, media, data centers, and airports.

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Al Layla wa Elly Feeha brings suspense and an unlikely duo: The new Shahid original production is an eerie thriller that brings together Egyptian actress Zeina and rapper Abyusif in his first acting role — an odd pairing that was enough to pique our interest. The story centers on Rasha (Zeina), an unhappily-married interior designer, who attends group therapy to work through some mental health issues, where she meets Hatem (Abyusif). Without giving away any spoilers, let’s just say that Rasha’s life suddenly gets turned upside down when a man dies in her home, prompting her to hide the body from her husband, and take actions that put her in danger. The Hany Khalifa-directed miniseries gets props for originality and for keeping us on our toes. A new episode drops every Thursday (watch trailer, runtime 1:00).

⚽ The Champions’ anthem is back: The UEFA Champions League round of 32 kicks off this evening at 6:45pm, with Borussia Dortmund facing FC Copenhagen, and Dinamo Zagreb playing against Chelsea. At 9pm, six more games will kick off: Paris Saint-Germain v Juventus, Sevilla v Man City, Celtic v Real Madrid, Salzburg v Milan, Leipzig v Shakhtar Donetsk, and Benfica v Maccabi Haifa.

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Break bread and butter at Toastable: This one’s for fellow carb lovers — a new spot at New Cairo’s Mivida Compound is upping the city’s bakery game with an outdoor seating area that gives an all-round fresh experience. You can make your own sandwich from a selection of ingredients and your choice of bread (sourdough, ciabatta, or bagels). Their homey Spanish omelet is an ideal breakfast choice and their salmon bouquet offers a unique and tasty salad experience with a fresh zesty dressing. If you’re looking to satisfy your sweet tooth, look no further than their buttery pain perdu, dripping in sauce and served with ice cream.

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Grab your popcorn and head to Zamalek Cinema for a special screening of Where The Crawdads Sing at 7pm: The movie is based on the 2018 international best-selling novel by the same name, and it follows the story of a woman who raised herself in the deep South who becomes a suspect in the murder of a man she was formerly involved with.

Egyptian rap fans, you don’t want to miss Room Art Space’s Rap Night tonight: The New Cairo venue will host performances by up and coming artists from Mcm records starting at 8:30pm.

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A quantum physicist invites us to go through life “scientifically” in The Joy of Science: BBC host Jim Al-Khalili makes a fascinating and illuminating case for why a scientific perspective has helped us grasp the world as it truly is, and how its fundamental ideas may help us all make sense of modern life. By discussing the nature of truth and uncertainty, the role of doubt, the pros and cons of simplification, the value of guarding against bias, and the importance of evidence-based thinking, Al-Khalili demonstrates how the concepts at the heart of the scientific method can help us through the difficult choices we face. In eight brief chapters, this book serves as a mini textbook on critical thinking. Whether you were a physics prodigy in high school or not, this book will make you fall in love with science, acquire a more reasonable viewpoint, and break through the fog of your own preconceptions.

The EGX30 rose 1.5% at today’s close on turnover of EGP 1.90 bn (53.6% above the 90-day average). Local investors were net buyers. The index is down 13.6% YTD.

In the green: Fawry (+7.6%), Elsewedy Electric (+5.0%) and Heliopolis Housing (+4.0%).

In the red: Eastern Company (-1.3%), Rameda (-1.1%) and Telecom Egypt (-1.0%).

OUR FOUNDER OF THE WEEK- Every Tuesday, Founder of the Week looks at how a successful member of Egypt’s startup community got their big break, asks about their experiences running a business, and gets their advice for budding entrepreneurs. Speaking to us this week is Ahmed Abouelenin (LinkedIn), co-founder of Survv and Takery.

We started Survv in 2017 with the goal of digitizing the F&B market in Egypt. We saw that globally there was a huge trend for people ordering at home instead of dining out. This trend has always existed in Egypt — not just in the F&B sector. From around 1999, you could have anything delivered; groceries delivered from your local store or your laundry.

Delivery was originally an Eastern trend. It started in the East, where employing people isn’t as expensive as in Western countries. It was pretty hard to find someone in 2006-2007 in the US that you can pay to deliver products. We have that need in Egypt and it’s already a consumer habit. When Uber Eats and Postmates appeared in the West they made a dramatic change, disrupting the market.

We had an easier job than those companies: We didn’t have to create a delivery market because it already existed. All we had to do was digitize what was being done, which is a completely different philosophy from most Western companies that entered the Egyptian market.

We started by digitizing the fleet that was on ground. Survv built connections with restaurants, created its own fleet, then started operating as a B2B company. We went to local players that already offered delivery services and we provided them with technology, logistics, and software to help them do what they were already doing, but better.

We didn’t have much competition and we helped fill a gap in the market. We grew dramatically in the first three years without really burning money and scaled up to around 3 mn orders in a very short period of time.

Simultaneously, we were launching Takery, which was the first company specialized in establishing and managing cloud hubs in Egypt. We realized that the last mile problem is not just about a rider delivering something from point A to point B. Most of the vendors we work for need to deliver their orders within 30-40 minutes and they want to be present all around Cairo. And suddenly having a branch or two wasn’t enough, especially after the outbreak of covid-19.

The best part of the job is getting to work with a broad spectrum of different people, from delivery riders to F&B CEOs and multiregional F&B firms and seeing how you could easily give them a tool that could fix lack of communication through a simple application. The idea of being the middleman and knowing that a very easily implemented feature could solve a huge problem for them is always exciting.

The most important KPIs we look at are how much we are growing, how much added value we’re adding on a daily basis to all our partners and profitability.

In the past three months, Takery has raised USD 3 mn from angel investors and Washington-based VC Openner. Survv received funding from my own pocket, along with funding from angel investors and Openner. We’re looking to raise more funding for both startups over the coming year or so.

We are currently working to make sure we cover all local needs, but it’s not just about growth, the aim is to have profitable growth. Until we fulfill the local need, I don’t think we have any reason to expand geographically. I believe our product is best suited for Egypt, and I don’t think we’ll be seeing any expansion abroad for the next three years.

My very first startup was a UK-based company called Coin Court. It was a blockchain company and enabled users to buy and sell cryptocurrencies online. I started the company in 2014, scaled it to around 1k-2k orders on a daily basis and then moved back to Egypt.

I was always very attracted to the tech business sector and have always been a tech enthusiast. Ever since the age of 8, I used to make my own platforms, websites and apps.

Being a startup founder may appear to be a lonely journey but I don’t think anyone who’s actually on that journey feels lonely. You’re too deep into what you’re doing, and to me it felt like more of an adventure.

The last book I read was The Big Red Book by Rumi. I enjoy poetry, and my main enjoyment is reading. I’m always reading whether it’s news or books.

I always turn to my father when in need of inspiration. He managed to build his own business from the ground up. I also look at successful founders that are in a similar position as I am.