PM — Jordan PM covid positive following business meeting in Cairo; talks with El Sisi shelved

We really can’t seem to a catch a break from the barrage of news that 2022 is throwing our way: We have another update on the potentially huge acquisition of EFG Hermes by First Abu Dhabi bank while more pieces are falling into place ahead of this year’s COP27 summit in Sharm El Sheikh.

Meanwhile, US business leaders are warning that 2022 might be even tougher for corporates than 2020 as labor problems cause headaches for CEOs and have them fear for their jobs. And another reminder of the potential for covid to interrupt business-as-usual landed just a few hours before dispatch time when the Jordanian prime minister tested positive for the virus following today’s Egyptian-Jordanian Joint Higher Committee meeting.

THE BIG STORIES TODAY-

EFG Hermes greenlights FAB due diligence + appoints Goldman Sachs to advise on acquisition bid: EFG Hermes has appointed US investment bank Goldman Sachs to advise it on First Abu Dhabi Bank’s bid to purchase a minimum 51% stake, it announced (pdf) this morning. Per the disclosure, the board has also given the Emirati lender the green light to conduct due diligence ahead of a potential acquisition that values EFG at around EGP 18.5 bn. White & Case was also named as EFG’s legal advisor on the transaction.

The Egyptian-Jordanian Joint Higher Committee meeting didn’t go quite according to plan: Jordanian Prime Minister Bisher Al Khasawneh has tested positive for covid-19 during his visit to Egypt to co-head today’s Egyptian-Jordanian Joint Higher Committee meeting alongside PM Moustafa Madbouly. The announcement was made by Jordan’s information minister several hours ago, who said in a statement picked up by the country’s state news agency Petra that the prime minister had tested positive following the meeting during which several bilateral agreements were signed.

So far, no spread: The Egyptian delegation all tested negative following the meeting, Madbouly said in a statement following the meeting.

Meeting with El Sisi canceled: Al Khasawneh was due to meet with President Abdel Fattah El Sisi for talks during his visit but the meeting has now been canceled.

US climate envoy John Kerry is also wrapping up his visit to Egypt today during which he held talks with Foreign Minister and COP27 President Sameh Shoukry. The two sides have agreed to set up a joint working group to coordinate climate policies ahead of this year’s COP27 summit which will be held in Sharm El Sheikh in November.

^^ We’ll have more on all of these stories in tomorrow’s EnterpriseAM.

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THE BIG STORY ABROAD-

Another day, another Credit Suisse scandal: A whistleblower from the Swiss bank has leaked data on more than 18k accounts that allegedly show its business ties to human rights abusers, narcotics traffickers, sanctioned businessmen, and people with questionable backgrounds. The accounts were opened from the 1940s to the 2010s, and they collectively held more than USD 10 bn.

Credit Suisse denies any wrongdoing: Scrambling to contain the fallout, the bank said that around 90% of accounts in question have been closed, and that the reports are based on “partial, inaccurate or selective information taken out of context,” in a statement released yesterday. Credit Suisse is already under pressure after it became the first-ever Swiss bank to answer criminal charges in an ongoing money-laundering trial. The bank’s shares fell as much as 3% on the Swiss Exchange as of dispatch time.

The leak has launched one of the world’s largest investigations into the mysterious world of Swiss banking. Dubbed the #SuisseSecrets, at least 47 news organizations around the world are dissecting the data, which is getting ink everywhere, including: New York Times | Reuters | Bloomberg | BBC | The Guardian.

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

• More moves from the central bank to ease in new import rules: The Central Bank of Egypt (CBE) is launching an initiative with the Credit Guarantee Company (CGC) to help “cover the risks associated with issuing letters of credit from banks,” the CBE wrote in a letter.
• Interested in an acquisition in the non-bank sector? Get FRA sign-off for DD first: Anyone looking to invest in a non-bank lender will need the green light from the Financial Regulatory Authority or its board before accessing the company’s internal documents and data for due diligence, according to a new decision (pdf) from the authority.
• Real estate brokers could face tighter regulation: The House of Representatives’ Economic Affairs Committee gave preliminary approval to amendments to the law regulating real estate brokerage, Al Mal reports. The changes would set up a registry for licensed brokers and regulate their fees, among other moves to professionalize the largely informal sector.

CORRECTION- In our coverage of Compass Capital-owned real estate developer Bonyan for Development and Trade’s acquisition of six office buildings in this morning’s edition of EnterpriseAM, we linked to the wrong website for Bonyan. The developer does not currently have a website. The story has been amended on our website, or you can check out the full press release here (pdf).

???? CIRCLE YOUR CALENDAR-

A call for tech startups: The Information Technology Industry Development Agency (ITIDA) and US-based VC firm Plug and Play have launched an incubator and accelerator program for digital transformation-focused startups in partnership with our friends at USAID. The newly launched “Smart Cities” innovation hub will select 20-30 Egypt-based companies for its inaugural three-month program, which starts in March. Startups can apply here before applications close on 28 February.

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 23°C tomorrow and a nighttime low of 13°C, our favorite weather app tells us.

Think it was difficult to run a company in 2020? Well think again, as corporate heads and analysts in the US tell Axios that 2022 is turning out to be one of the hardest years ever to run a business. Uncertainty remains at high, as labor shortages, surging inflation, latent pandemic disruption and increasing demands from employees for new benefits and flexible working arrangements are raising expenses and creating new complications.

Workforce challenges are creating new headaches for CEOs: "They're struggling to find their way,” especially when it comes to workforce challenges, said Ted Bililies, managing director at consulting firm AlixPartners. The so-called “Great Resignation” has seen record numbers of people quit their jobs over the past year, and with 11 mn job vacancies the number of applicants remains low. This is forcing companies in some sectors to aggressively up their salaries to attract and retain talent.

But it’s more trouble for smaller businesses, who neither have the resources to increase salaries or have customers endure their higher costs of doing business this year unlike bigger companies. They too have difficulties recruiting the right talent.

Trouble in doing business is not only limited to the workforce, as inflation and supply chain issues are leading to the higher cost of doing business. The annual change in costs for S&P 500 companies is at its highest in a decade at 13.4%.

All of this has CEOs fearing the future: Almost three-quarters of CEOs told an AlixPartners survey at the end of last year that they’re worried about being left jobless due to the disruption.

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The EU’s climate disclosure rules are facing more pushback from industry: The EU’s controversial green taxonomy is coming under fire from financial industry trade group ICMA, reports the Financial Times. The ICMA released a paper questioning the taxonomy’s usability, arguing that the alignment regulations require too many details from fund managers which would push up costs to the extent that smaller firms would not be able to comply. The group is also pushing for more country-focused standards that take into account local conditions as opposed to applying the European framework to assets all over the world.

The taxonomy is no stranger to backlash, having been the subject of global outcry for its designation of nuclear power and natural gas as “green investments”. The rules are currently under review and could become law by the summer unless a supermajority of EU countries or the bloc’s parliament moves to block it.

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Siri and Alexa have entered the group chat: Several of the world’s biggest tech companies are teaming up to create a common language to allow the increasing number of smart home devices to better communicate and help users integrate tech made by different companies into their setup, writes the Wall Street Journal. While companies such as Apple, Amazon and Google all sell products that allow users to turn off the lights, change the thermostat, or open the blinds with a touch of a button, introducing Siri to Alexa doesn’t usually go so well due to compatibility issues and setup complexity, slowing down the adoption of IoT tech in the home.

Introducing Matter: To make the smart home tech market more accessible, Apple, Amazon, Google and Samsung have joined forces to roll out a new standard this year called Matter, which will act as a common language spoken by most new — and many older — smart home products. Along with the tech giants, over 220 other companies will also create Matter-compliant smart-home devices — meaning they can interact together seamlessly while users can choose whichever voice assistant they desire. That also means that supporting products (such as blinds or light switches) will be compatible with all products to easily switch between systems.

???? ON THE TUBE TONIGHT-

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How corporate greed played into the Boeing airplane crashes: Netflix’s new documentary Downfall: The Case Against Boeing retells the decisions and events that ultimately led to the two notorious Boeing crashes in 2018 and 2019, which together killed 346 people. The doc finds that the world's largest aircraft manufacturer took shortcuts when it came to developing its 737 Max aircraft, in a classic case of prioritizing its bottom line over safety. The unraveling of it all by gobsmacked pilots, grieving families, diligent journalism, and congressional investigations are all brought together in Rory Kennedy’s documentary, where she weaves together facts, emotions and historical context at the pace of a thriller, writes the LA Times. The documentary has a ton of revelations that show how the potential for corporate greed can translate into tragic events for everyday people on the ground.

⚽ It’s a slow day for football, with only a few games in major European leagues today. Football fans will be rewarded for their patience with the resumption of the Uefa Champions League round of 16 tomorrow.

In Spain + Italy: Celta Vigo will play Levante in the sole La Liga game of the day at 10pm, while the Serie A will see Napoli v Cagliari at 8pm and Bologna v Spezia at 10pm.

Here at home: Al Mokawloon will face Smouha at 5:30pm, followed by Tala'ea El-Gaish v Pharco at 8pm.

???? OUT AND ABOUT-

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Pink Floyd tribute band Gravy Train is performing tonight at The Room New Cairo at 8:30pm.

I-Do-Mind is setting up an expressive writing workshop tomorrow at 6:30pm at U1st Co-working space in Mokattam.

Join another edition of the Lamba Art Tour which takes you across the most interesting artistic sites of Garden City (plus food, of course). The tour will take place on Wednesday from 10am-4pm.

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Effortless ≠ lazy: Greg McKeown’s book Effortless takes on the exhaustion that seems to have affected the vast majority of us since the onset of the pandemic, speaking specifically to those who are on the edge of burnout, lacking the energy and effort to succeed in their goals. However, this perpetual exhaustion isn’t necessarily the path to success. Instead, he argues that people need to find an easier path, one that tackles challenges and obstacles in a more practical way that will set your mind at ease. In Effortless, McKeown lines out a number of ways to approach your professional and personal life that simplify your tasks, turn them into rituals, problem solve in advance, and set a sustainable pace for yourself. “The effortless way isn't the lazy way. It's the smart way,” he says.

EARNINGS WATCH-

Al Tawfeek for Financial Lease (AT Lease) reported a 80% y-o-y jump in its net income to EGP 134.1 mn in 2021, according to the company’s financial statement (pdf). Revenues rose 19% last year to EGP 611.5 mn.

Egypt Dutyfree Shops’ net income rose 12% y-o-y in 4Q2021 to EGP 49.2 mn, according to the company’s financial statement (pdf). The company recorded revenues of EGP 230.9 mn for the quarter, up 9% from last year.

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MARKET ROUNDUP-

The EGX30 rose 1.2% at today’s close on turnover of EGP 625 mn (39% below the 90-day average). Regional investors were net buyers. The index is down 3.7% YTD.

In the green: Ezz Steel (+7.6%), Credit Agricole (+4.8%) and Fawry (+3.7%).

In the red: Mopco (-2.3%), Ibnsina Pharma (-2.2%) and Egypt Kuwait Holding-EGP (-2.1%).

BYOD (Bring Your Own Device): Could employees be expected to use their own devices for work? Lower operating costs, greater flexibility and increased productivity are a few reasons some business leaders have been touting to argue for why companies should stop purchasing workplace devices and make employees use their own instead. Although BYOD started making headlines about a decade ago, the concept has recently gained new momentum as work from home (WFH) policies upended many companies' ways of doing business — and the rigid safety protocols that undergird their operations — in favor of more flexible working arrangements. While the issue is certainly not yet settled, an ongoing debate in the world of IT and business strategy over the future of remote and hybrid work continues.

Proponents of BYOD emphasize the potential for productivity gains: Though there is little research into how personal devices affect workplace behaviors, advocates of BYOD anticipate improvements in productivity among employees who get to choose the technology that best suits their style of work as a huge draw for asking employees to provide their own work devices. "By enabling employees to securely and easily access corporate data on their own device, productivity levels will naturally increase,” Mark Coates, EMEA VP at Good Technology told TechRadar in 2020. Others believe that offering flexibility over the use of devices will improve staff motivation.

Company-issued devices often aren’t at the cutting edge: The rapid evolution of tech and the reportedly strong preference of employees towards the devices they use for work is making requirements to stick to standard-issue corporate devices “a losing battle,” Joe Donnici, VP of Core IT at Quintiles, writes for Network World. This is because regularly delivering top-tier equipment to staff may be difficult for most companies, he says.

But at the root of this movement is cost-cutting strategies for business: Companies that adopt BYOD policies might be able to cut out some of the huge costs associated with hardware purchases and software licensing for company-issued devices. “Apart from productivity gains, Comprehensive BYOD can pay for itself in hard cost savings—primarily in hardware, support, and telecommunications costs,” Joseph Bradely, Cisco’s VP of digital and IoT services, wrote in a blog post in 2013. The tech giant estimated in 2016 that companies could on average save some USD 350 annually for every employee hired using their own device.

Employees in rich countries seem to (generally) be on board: A US Census Bureau Gallup survey from 2015 found that 72% of smartphone and tablet owners in the US would be willing to use their devices to send work-related emails and many were open to using personal devices for other work-related tasks as well.

But this figure falls dramatically when the question is framed differently: Less than a quarter of respondents were positive about companies using their devices to collect data when it was framed as a cost-cutting measure for businesses.

The question of security is crucial: Protecting sensitive corporate and personal data, ensuring legal compliance and maintaining support for a wider range of devices are among the many challenges the UK’s National Cyber Security Center (NCSC) lists in its guidance on BYOD strategies. Leaked data, malware and unsafe downloads have also been listed among the top concerns cyber security professionals associate with current BYOD arrangements. Some 22% of organizations polled in a survey (pdf) by cybersecurity firm Bitglass last year said that employees using personal devices had downloaded malware over the previous 12 months, and almost half said they were unable to monitor whether malware had been downloaded, a problem the report described as potentially “fatal.”

And personal privacy is a big concern too: Encroaching on personal privacy is also a concern that might arise when employees begin to rely primarily on their personal devices for work, according to the NCSC. This is an especially difficult challenge to overcome when employees are plugged into private networks and have company-provided security software installed on their computers designed to protect critical business information. This was a common concern in the Gallup survey, where many respondents expressed unease at their employers being able to access personal content on their devices.

Is it actually cost-effective? When it comes to protecting important data it might actually cost more to provide IT support for a wider range of devices and operating systems, especially if the company is committing to shoulder the costs for hardware repairs, according to the NCSC.

For some of us, BYOD is already here: If you think about how often you use your personal phone for work-related purposes, you already have a foot in the door of BYOD. Some 82% of companies polled in Bitglass’ report permitted BYOD to “some extent.” Whether the concept will become more widely adopted by companies will depend largely on whether solutions can be found to address security concerns.