PM — Going into 2022 with 2020 problems: The supply chain edition

Good afternoon, wonderful people. It’s a relatively calm but not dull Monday afternoon as we get back in the swing of things after the holiday season.

THE BIG STORY TODAY

Annual urban inflation rose to 5.9% in December on the back of food and beverage costs rising y-o-y, according to official figures released by statistics agency CAPMAS (pdf). Last month’s reading rose from 5.6% in November, breaking a two-month downtrend. Despite the rise, the headline rate remained below analyst expectations and within the central bank’s target range of 5-9% for 4Q2022. On a monthly basis, consumer prices eased 0.1%, the first time in 11 months they declined. Consumer prices had risen 0.1% in November.

First interest rate day is next month: This comes as the Central Bank of Egypt (CBE)’s monetary policy committee plans to hold its first policy meeting of 2022 on Thursday, 3 February.

Meanwhile, the CBE issued rules (pdf) under which it could, in the future, provide emergency liquidity to banks if they cannot get it from the interbank market. Analysts and insiders speaking to state media outlets and the foreign press said the circular simply makes formal a standard preventative measure.

^^ We’ll have more on this story and more in tomorrow’s EnterpriseAM.

HAPPENING NOW-

The first day of the World Youth Forum is wrapping up in Sharm El Sheikh, as the opening session on covid-19 is in its final minutes as we hit send on this afternoon’s edition. The forum will run for four days, wrapping on Thursday, 13 January. You can check out the full agenda for the forum here (pdf).

Attending the forum: Jordanian Crown Prince Hussein bin Abdullah II, Lebanese Prime Minister Najib Mikati, and Palestinian President Mahmoud Abbas, all of whom President Abdel Fattah El Sisi met on arrival, according to a state information service statement.

Plastics exhibition Plastex is on its second day, with some 340 local and international plastics and petrochems industry players taking part. The exhibition runs until this Wednesday, 12 January.

Authorities closed the Alexandria and Dekheila ports earlier this morning due to bad weather conditions, the Alexandria Port Authority said in a statement, explaining that both ports will reopen after the weather improves.

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

• Nafeza trials coming for air freight landing: The Customs Authority will begin this month a three-month trial extending its Advance Cargo Information (ACI) system to air freight, ahead of a full launch planned for April.
• MNT-Halan is looking at cross-border expansion this year, with plans to tap markets where “there are large unbanked populations that need serving,” CEO and co-founder Mounir Nakhla said.
• Premium Card is looking to tap the securitized bond market again this year with a two-tranche, EGP 500 mn issuance, in the final round of a securitization program it launched in 2020, Managing Director Osama Farid said.

THE BIG STORY ABROAD- Picking up where we left off this morning, the US and Russia’s talks on Ukraine in Geneva are leading the conversation in the international press, after getting underway earlier today. Ahead of the sit-down, the Kremlin’s lead negotiator threatened that the US and NATO could face “a worsening situation in their own security” if they don’t show “flexibility” in the negotiations. The story is getting coverage from the Financial Times, Reuters, and the Wall Street Journal.

Coming in second place: The coup that didn’t happen in Kazakhstan, which Kazakh President Kassym-Jomart Tokayev said came “under the guise of spontaneous protests” that broke out in the country last week. Russian President Vladimir Putin took credit for Moscow’s interference to quell the protests and “restore order.” (Financial Times | Reuters)

IN MEMORIAM- There has been a string of notable celebrity deaths over the past several days. Full House actor Bob Saget passed away in the wee hours of this morning at age 65. The cause of death remains unconfirmed, but authorities in Orlando, Florida — where he was found unresponsive in his hotel room — confirmed there were no signs of substance abuse, according to the New York Times. Saget’s passing comes just a few days after legendary actor Sidney Poitier died at age 94. Poitier’s rise to fame as a serious Black actor coincided with the civil rights movement in the US, giving his career a symbolic parallel with the progression of racial dynamics.

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South Korean President Moon Jae-in is due in town from 20-21 January on an official visit, during which he will meet President Abdel Fattah El Sisi to discuss how to enhance cooperation in environmentally-friendly business, according to Youm7 and the Korean press. Egypt is the last leg of Jae-in’s diplomatic tour of the Middle East, which will also take him to the UAE and Saudi Arabia.

PSA- Calling seed-stage fintech startups: You have until Tuesday, 15 February to apply to Orange Ventures’ Seed Challenge for a chance to be awarded EUR 500k (c.USD 570k) if you have a seed-stage fintech business that has raised less than EUR 1 mn (USD 1.14 mn / EGP 17.8 mn) to-date). Startups can apply 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 a daytime high of 20°C tomorrow and a nighttime low of 10°C, our favorite weather app tells us.

It’s clear the Great Supply Chain Snarl of 2020 is continuing well into 2022 and will push up global inflation, but industry players remain divided on just how long it will last, reports the Financial Times. One of the biggest challenges this year will be unclogging traffic jams to bring down the cost of freight and make space on cargo ships. Two key factors will be how China, which houses seven of the top 10 container ports, copes with bottlenecks that will likely pop up during the upcoming Winter Olympics and Chinese new year, and whether US consumer spending will fall to pre-pandemic levels. Another key factor is dealing with backlogs at US ports, which have outdated infrastructure compared to their Asian counterparts and do not operate 24/7.

What does that mean for international trade? It’s unlikely that the industry will go back to the way it was before the outbreak of the pandemic, insiders tell the salmon-colored paper. Some experts predicted that one medium- to long-term consequence of the current crisis may be manufacturers moving production of complex goods closer to home to offset high transport costs and the absence of cheap Chinese labor. They also warn that fewer direct connections with African nations are raising the cost of trade for these countries — an alarming trend that, if it continues, could exclude those countries from ongoing globalization.

Kuwait’s sovereign wealth fund is jumping on the ESG train: The Kuwait Investment Authority (KIA) — one of the world’s biggest wealth funds — is looking to make its entire USD 700 bn portfolio fully compliant with environmental, social and governance standards, with a current focus on “the E part of ESG,” Managing Director Ghanem Al-Ghunaiman told Bloomberg. The Kuwaiti economy is one of many Gulf economies that mainly rely on crude, making the authority’s move towards more sustainable financing a significant step as the country prepares for a post-oil future. Currently, over two-thirds of the authority’s assets are ESG compliant, an unnamed source said.

MIT’s Technology Review is calling out the worst tech that came out in 2021: First off on the five-entry list is Biogen's Alzheimer's med, which was given FDA approval in June despite its ineffectiveness in treating the condition as well as its huge pricetag of USD 54k a year. Next up was Zillow’s house-buying algorithm, which it was using to buy and flip houses. With time, it was discovered that it didn’t correctly forecast changes in housing prices and Zillow was forced to shutter its iBuying unit, cut 2k jobs, and take a USD 500 mn write-off. Space tourism got a nod on the list as cool, but largely unessential technology after Richard Branson and Jeff Bezos both jetted off into space this year. Bezos has also unveiled plans to launch a commercial space station “Orbital Reef” as a “mixed-use business park.” Finally, ransomware and social media beauty filters were also on the tailend of a wagging finger.

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A terrific Ben Affleck performance and George Clooney directorial come together in The Tender Bar: The film follows teenager JR after his parents’ divorce, which forces him and his mom to go back to living with his grandfather. The house is full of aunts, uncles, and cousins and JR quickly finds a haven in his uncle’s bar The Dickens which is full of books and puzzles. His uncle, Charlie (played by Ben Affleck), takes JR under his wing and teaches him what he calls "the male sciences" which includes lessons on how to treat women and financial savings. Meanwhile, JR is dead set on attending an Ivy League university and he uses his experiences at the eccentric bar to inspire his writings. The film is based on a 2005 memoir of the same name by JR Moehringer, a Pulitzer Prize-decorated journalist and novelist. You can watch The Tender Bar on Amazon Prime.

The Golden Globes took place yesterday amid controversy about the lack of diversity, voting procedures, and finances after an exposé was published in the Los Angeles Times. The Hollywood Foreign Press Association (HFPA) opted out of livestreaming the event, instead keeping it closed to an exclusive bunch in attendance. Here are some of the most notable awards handed out during the event:

• The Power of the Dog was named best motion picture in the drama category. The film also saw Jane Campion take home the best director title while the title of best supporting actor went to Kodi Smit-McPhee.
• Steven Spielberg's musical West Side Story also gained three awards: Best picture (musical or comedy), best actress in a motion picture (musical or comedy) for Rachel Zegler and best supporting actress in a motion picture for Ariana Debose.
• Will Smith was named best actor in a motion picture (drama) for his role as Richard Williams in the film King Richard.
• Nicole Kidman was given a nod as best actress for her role as Lucille Ball in Being the Ricardos.
• Andrew Garfield scored the best actor in a motion picture (musical or comedy) win for Tick, Tick… Boom.
• Japanese film Drive My Car was awarded as the best motion picture in non-English language.
• A fan favorite here in Egypt, Succession, had a good night yesterday with three awards to its name. The show was named best TV series (drama) and saw acting trophies for Sarah Snook (best supporting actress in a TV role) and Jeremy Strong (best actor in a TV series, drama).
• Hacks was named best TV series (musical or comedy) while Jean Smart was given the award for best actress in a TV series (musical or comedy) for her role on the show.
• Jason Sudeikis was given the award for best actor in a TV series (musical or comedy) for his role as coach in Ted Lasso.
• O Yeong-Su was named best supporting actor in a TV role for his role of Player 001 in Squid Game.
• Han Zimmer’s soundtrack for the film Dune was given a nod for the best original score, (motion picture).
• The song No Time to Die by Billie Eilish for the film No Time to Die was named best original song (motion picture).

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⚽ Afcon continues today, with Senegal and Zimbabwe taking the field as we dispatch. Later at 6pm, Guinea will face Malawi and Morocco will face Ghana. The match day will end with Comoros and Gabon, who will play at 9pm.

The Pharaohs’ first match in the championship against Nigeria takes place tomorrow at 6pm.

Man United and Aston Villa will compete today in the FA Cup at 9:55pm.

La Liga: Espanyol will host Elche in a match taking place at 10pm.

Serie A: Torino and Fiorentina will go head-to-head at 6pm today.

???? A victory for anti-vaxxers: An Australian court ruled in favor of tennis world number one champion Novak Djokovic’s appeal against his deportation from Australia, saying the country’s border authorities acted “unreasonably” when canceling his visa, the Financial Times reports. The judge backed Djokovic’s claim that he provided sufficient evidence to justify a medical exemption from getting the covid-19 vaccine, which rested on testing positive for covid-19 a few weeks ago and recovering since then. Australia’s Immigration Minister could still interfere and cancel his visa on new grounds, the FT notes, but the Serbian athlete is now cleared to head to the Australian Open to defend his title and earn his 21st Grand Slam.

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Pareidolia — The Soundtrack of Real Life by artist Marwan Sabra is on at Arcade Gallery, depicting what Sabra calls the “ancient magic,” which is still preserved in the unnoticed details of our world.

Liwan Gallery is hosting art exhibition The Ab Surd by Yasser Nabaiel, which features paintings inspired by Albert Camus’s The Myth of Sissyphus.

Join the Lamba Art Tour on Wednesday and get a glimpse of the best of Garden City’s art scene.

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Influence Is Your Superpower by Zoe Chance aims to strengthen your negotiation skills by getting rid of common misconceptions around getting what you want. The book explains how to cultivate charisma, negotiate comfortably and creatively, and spot manipulators. Chance brings in a multitude of stories from alligators (yes, seriously), skydivers, a mind reader in a gorilla costume, Jennifer Lawrence, and Genghis Khan. The Yale Professor argues that the key is not being afraid of asking for more or refusing what doesn’t suit you — and doing this in a way that is both convincing and charming.

The EGX30 rose 0.4% at today’s close on turnover of EGP 959 mn (22% below the 90-day average). Foreign investors were net sellers. The index is up 0.6% YTD.

In the green: Raya Holding (+4.4%), EFG Hermes (+2.9%) and AMOC (+1.8%).

In the red: Egyptian Resorts Company (-2.9%), Heliopolis Housing (-2.2%) and Credit Agricole Egypt (-2.0%).

So you’re up to date on all the buzzwords of 2021. Now, it’s time to familiarize yourself with what’s next in 2022 — Web 3.0: Last year brought with it a host of buzzwords that promise to redefine the future of tech, art and finance, namely, NFTs, crypto, the metaverse, and BTC (here and here). We’ve been dipping our toes in the metaverse and what that means for us on an individual level, and what it means for our businesses. Next up on your to-learn list of buzzwords: Web 3.0.

First thing’s first: The metaverse and Web 3.0 are not the same thing: Although both concepts are far from fully formulated, Web3 or Web 3.0 is a vision of the internet of the future, while the metaverse is a vision of how the internet will seamlessly integrate into our daily lives.

The metaverse is still a vague term that can sometimes be pretty misleading, because, as one columnist put it, what we mean when we talk about the metaverse is still being formulated. What we do know so far is that the metaverse will rely heavily (but not exclusively) on technologies like virtual reality (VR), augmented reality (AR) and mixed reality (MR) to allow users to have real-virtual experiences. These technologies must become ubiquitous in our lives to achieve the vision of the metaverse in which everything from work to play to socializing to gaming can be done in a mixed reality setting where we can use crypto and non-fungible tokens (NFTs) to accumulate unique assets.

VR, AR and MR are the basic building blocks of metaverse integration: VR and AR are both technologies that require users to have a piece of hardware in the form of glasses or a headset to alter or take over their reality. VR headsets typically block out your surroundings, immersing you in a fully virtual world while AR glasses or headsets allow you to overlay digital information on top of the real world, creating seamless integration between virtual and real objects (think Iron Man or Pokémon Go).

So, what does Web 3.0 or the internet of the future look like? If Web 2.0 referred to a version of the internet that was built on participatory, user-generated content which came to be regulated by Big Tech, think of Web 3.0 as the internet built on blockchain. In a perfect world, Web 3.0 would bring complete privacy and decentralization far from the tech giants. According to Annie Zhang, host of the podcast Hello Metaverse, it means an internet without tightly controlled content, data extraction, or privacy breaches. Check out this (very) utopian vision of Web 3.0 for an idea of what it could be if all ends well.

Will it replace Web 2.0 (i.e. the internet as we know it today)? Not necessarily. Experts suggest that it will exist alongside Web 2.0, but not replace it entirely. This would mean that the Googles and Facebooks of the world will definitely feel the burn of users jumping off, but will not completely disappear. Some of those companies already have dedicated Web 3.0 teams that aim to make the platforms more future-friendly and add Web 3.0 features to the existing products.

So how will it work? In theory, social media platforms and search engines will no longer be owned and controlled by massive tech companies, but built on blockchain technology, which decentralizes systems and gives power to the people. Some skeptics doubt that Web 3.0 can live up to the hype of securing privacy and decentralization.

But didn’t Facebook/Meta already monopolize the metaverse? Technically, no company can monopolize the metaverse (although that doesn’t mean they aren’t going to try), because the technology to actualize the vision of the metaverse still needs to be made accessible, which will only happen once more tech players get in the game. This means developing hardware (headsets, glasses, data gloves, etc) and web infrastructure. It will also need actual users to build for the metaverse, which means getting as many users on board as possible. So far, Meta, Microsoft, NVIDIA, Unity and Snapchat are all trying to build for the metaverse, although it’s not clear whether and to what extent their efforts will be coordinated. South Korea has also announced a five-year plan to enter the space with Metaverse Seoul.

But there are still a lot of challenges to overcome before this becomes mainstream. For one, the metaverse is exhausting — and we’re not just talking about getting your head around the idea. Zoom fatigue pales by comparison to VR motion sickness — which is basically motion sickness combined with disorientation — that many people experience wearing VR headsets. Doctors have also warned that VR headsets can adversely affect eyesight. And there’s the mental health repercussions of the metaverse, not to mention the price of headsets, which retail from USD 300.

Are we positive this is happening? Although we talk about it like there are sharp divisions between one phase of the web and the next, in reality, the internet and how we integrate it into our daily lives is constantly evolving. It’s also true that industries beyond gaming and concerts stand to benefit from the evolution of these technologies. For more on that, see our piece Welcome to the (very-near) future: How the metaverse will change business.