PM — POLL- The market is reacting positively to the package of incentives planned for the rollout of the CGT, analysts tell us.

It isn’t an altogether slow Sunday, ladies and gentlemen, but it is looking kind of dry when compared to last week’s flurry of news. We have the FRA communicating further on their capital gains tax incentives, updates on our EV plans and the House is working on some laws today. But before we dive into the top stories today…

It’s that time of year: 3Q2021 earnings season here at home is in full swing — and is making its presence known with a torrent of releases out today. We have a rundown in this afternoon’s Go With the Flow, below.

PSA- If you’re traveling outside the country, you may have to still get a hard copy of your QR passport: Make sure to get a paper copy of your QR code-bearing vaccination certificate before you head to the airport, as the QR code available from the Health Ministry’s covid passport app is not yet being accepted as proof of vaccination at Cairo International Airport, according to EgyptAir customer service representatives Enterprise spoke with. In our experience, the paper certificates are straightforward to get from the ministry’s vaccination centers and shouldn’t take too long. We are currently still reaching out to the Civil Aviation Ministry for information on when the app QR passport will be accepted at airports.

THE BIG STORIES TODAY-

#1- POLL- The market is, by and large, reacting positively to the planned EGX incentive package the Madbouly government announced last week. Analysts we’ve spoken to are signaling that the incentives package will be good for the market, but point out that the less-obvious message behind the package is that the capital gains tax is going to be our new reality come January: no ifs, no buts, and no more delays.

FACT CHECK- No, there isn’t an official decision on the exact percentages of cuts to EGX trading costs yet. Local press reports were out today claiming to have the exact percentages of the tax and fee cuts investors would be getting as part of the incentives structure being rolled out with the capital gains tax. A Financial Regulatory Authority (FRA) official we spoke with under condition of anonymity tells us that these were figures suggested by stakeholders and were not necessarily the numbers the FRA plans to make official.

#2- BrightSkies joins state automaker to manufacture EVs domestically: State-owned Engineering Automotive Manufacturing Company has signed a cooperation agreement with private Egyptian tech firm BrightSkies that will see the two firms manufacture key components for Egypt’s first locally-assembled electric microbuses, according to a Public Enterprise Ministry statement (pdf). The plan is to supply the control systems, power units and engines for the 80% locally sourced microbuses, which are set to be prototyped within a year.

The news comes days after the wheels came off a plan for El Nasr Automotive to locally assemble Chinese firm Dongfeng’s E70 electric vehicles. Talks came to a halt due to an import pricing dispute with the automaker—the kind of problem you just don’t have if you can make your own EVs from scratch here at home.

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

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

• Egypt officially confirmed as COP27 host: We will be hosting next year’s iteration of the climate summit, which will be held in Sharm El Sheikh in November 2022.
• Banque Misr in line for more EBRD climate financing: The European Bank for Reconstruction and Development could soon sign off on a USD 100 mn facility to the bank to finance local SMEs working on green projects.
• Ora plans USD 1 bn Africa expansion + Sawiris pivots to battery metals: Naguib Sawiris’ Ora Developers is planning to invest at least USD 1 bn over the next five years to increase its footprint in Africa, while Sawiris’ La Mancha gold fund will offload its controlling stake in Canadian miner Golden Star Resources and reinvest the proceeds into metals used to make batteries.

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HAPPENING NOW- Foreign Minister Sameh Shoukry is in the UAE to participate in the Sir Bani Yas Forum, according to a cabinet statement. The four-day event is organized by the UAE’s Foreign Ministry and brings together senior decision makers from across the Middle East to discuss issues facing the region, with this year’s edition to focus on peace, security, and stability.

ALSO HAPPENING NOW- A handful of draft laws and proposed amendments are currently up for committee-level discussion at the House of Representatives, according to Al Ahram. Among the bills are a draft bill governing ministerial “slush funds,” which was passed to the House Planning and Budgeting and House Economics committees for discussion. The Madbouly Cabinet had signed off on new regulations for the funds last year, after previously agreeing to channel 15-20% of the funds’ surpluses into state coffers. A new draft law governing licensing rules for hotels and tourism companies the government drafted in September is also on the docket for a joint tourism and civil aviation, local administration, planning and budgeting, and constitutional affairs committee.

THE BIG STORY ABROAD-

The COP26 autopsy has continued into the afternoon in the international press, and the overall tenor is that global leaders talked a big talk on net-zero targets and political urgency at the meeting, but their final pledge left much to be desired.

The fallout from the disappointing final agreement is ongoing: John Kerry insisted that it reflected “a very aggressive increasing of ambition,” while COP26 President Alok Sharma (i.e. the man whose job was to make a success of the summit) placed the blame elsewhere. “China and India will have to explain themselves and what they did to the most climate-vulnerable countries in the world,” he told the BBC, after the two nations fought during negotiations to weaken the language of pledges to phase out coal use.

Did Greta say it best? “The #COP26 is over,” the climate activist said on Twitter. “Here’s a brief summary: Blah, blah, blah. But the real work continues outside these halls. And we will never give up, ever.”

ICYMI: We have chapter and verse on what went down in Glasgow in this morning’s AM, including a first look at what it will mean for us to host the summit’s next iteration in Sharm El Sheikh in 2023.

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FOR TOMORROW-

Starting from tomorrow, auto dealerships will have to comply with new consumer protection rules requiring price stickers to be displayed on vehicles. Companies that could be fined up to EGP 2 mn if they don’t comply with the rules.

ALSO TOMORROW- All unvaccinated public sector workers won’t be allowed into their workplaces. If you still haven’t been jabbed, you’ll be required to take a PCR test every week in order to get access to your place of work. University students will also be unable to access campuses without proof of vaccination.

???? CIRCLE YOUR CALENDAR-

Prince Charles and the Duchess of Cornwall will be in Cairo on Thursday and Friday (18-19 November). It’s the heir to the British crown’s first visit here since 2006 — and the first overseas jaunt by a member of the royal family since the pandemic hit. Charles will meet with President Abdel Fattah El Sisi and Al Azhar’s Grand Imam, Ahmed El Tayyeb, among other government officials. Expect climate change to be high on the prince’s agenda given his personal interest in the topic and Egypt’s selection as host of COP27 next year.

Follow Charles and Camilla during their visit: You can check out the prince’s Clarence House website or Twitter feed or check in on UK Ambassador to Egypt Gareth Bayley’s Twitter.

The two-day Africa Fintech summit kicks off this Tuesday, 16 November. The summit looks at innovation in the fintech ecosystem, venture capital and other forms of investing, and will also discuss the rise of healthtech.

The International Finance Corporation is hosting an invite-only forum in Cairo on Wednesday with a focus on sustainable finance in Africa. Egyptian speakers include Central Bank of Egypt First Sub-Governor May Abulnaga, the Financial Regulatory Authority’s Sina Hbous and CIB’s Dalia Abdel Kader.

Comesa summit next week in Sharm: Egypt will host the 2021 Common Market for Eastern and Southern Africa (Comesa) summit on 23 November in Sharm El Sheikh.

KfW is launching a call for green projects: Companies and public bodies working on projects related to the green economy transformation will be able to submit proposals to the KfW Development Bank’s Investing for Employment facility, which will see co-financing grants ranging from 1 mn to 10 mn EUR awarded to to each project, the German development bank said in a press release (pdf). The facility will award grants to projects that contribute towards job creation. You can find out more about the facility and the application process 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- This weekend’s cold front was short-lived as temperatures once again rise to 27°C tomorrow during the day and fall to 17°C at night, our favorite weather app tells us.

EDITOR’S NOTE: This story was amended on 17 January, 2021 to reflect that Engineering Automotive Manufacturing Company (EAMCO) is no longer a subsidiary of El Nasr Automotive.

Crypto’s latest aberration: Himalaya Coin, which could have a market cap of around USD 28.9 bn — roughly equivalent to that of dog-themed meme coin Shiba Inu — after its value skyrocketed since it started trading at the start of the month, Bloomberg reports. One HCoin has gone from being worth USD 10 cents to USD 28.88 in the past two weeks. Its launch was marked with the release of “HCoin to the Moon,” a bizarre music video featuring exiled Chinese b’naire and Communist Party critic Wengui Guo. Set to a montage of mansions, sports cars and suitcases bursting with USD bills, the song promises a world where “No one can take your wealth away from you.”

Anti-China politics seem to be at the core of HCoin: Guo is joined in his support for the currency by far-right talking head and former Donald Trump adviser Steve Bannon. “If you look at the institutionalization of the counteroffensive to the Chinese Communist Party, it’s pretty impressive,” Bannon said in an interview about HCoin with GTV, the anti-Chinese government media company he co-founded with Guo last year. China recently banned crypto trading as part of a wider crackdown on private tech firms in recent months.

It’s still unclear how legit HCoin is: The currency currently only trades on the Himalaya Exchange, a crypto platform with business links to Guo, and isn’t listed by CoinMarketCap in its definitive list of global cryptocurrencies, though a Himalaya Cat Coin (not the same thing) is 4.7% down today.

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We’d be pretty embarrassed if we were the FBI right now: Hackers managed to compromise one of the FBI’s email systems on Saturday, sending fake emails to tens of thousands of recipients, according to an FBI statement. The emails warned of a possible cyberattack and ended with a sign-off from the Department of Homeland Security, reports KrebsonSecurity. The hacker that claimed responsibility for the attack, known on the cyberwebs as Pompompurin, said they were able to send the messages by abusing poor coding on an FBI portal, and had carried out the hack in order to point out vulnerabilities in the FBI’s system.

FOR ALL YOU MILLENIALS WHO CARE- Britney’s conservatorship is officially over: Britney Spears has won a legal battle against the conservatorship that saw a team led by her father control her finances, career and personal life for nearly 14 years. Fans of the early-noughties pop icon celebrated outside the Los Angeles court where a judge ruled to cancel the conservatorship on Friday, in the culmination of a months-long campaign by supporters, some media, and most recently Britney herself against the unusual arrangement.

The star’s case drew renewed attention earlier this year in the wake of the release of two documentaries, “The New York Times Presents: Framing Britney Spears” and Netflix’s “Britney vs. Spears.” The media storm appears to have prompted Spears to petition for the conservatorship’s cancellation, appearing in court earlier this summer, where she called the arrangement abusive. For the first time in nearly 14 years, Spears will now be able to live, work and spend as she chooses. (Washington Post | The Guardian | BBC | New York Times | CNN).

???? ON THE TUBE TONIGHT-

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Star-studded action comedy flick Red Notice is out on Netflix: Dwayne Johnson and Ryan Reynolds are a great on-screen duo, both bringing their comedic abilities to full force in the newly released film. Johnson plays an FBI agent who is forced to team up with Reynolds — an expert art thief — after he is framed by Gal Gadot’s femme fatale character and given a ‘red notice.’ What ensues is a heist for the ages, with Gadot continuing to snag priceless art pieces from museums around the world while Johnson and Reynolds attempt to stop her. Critics didn’t water down their not so flattering opinion of the film, but we think they’re being just a tad too harsh. It’s not the actors’ fault that the action film genre has become saturated and every idea has already been played out. There can only be so many car chase scenes. Or can there?

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⚽ Matches to check out in the European qualifiers for World Cup Qatar 2022: Armenia faces Germany at 7pm, while Portugal plays against Serbia and Spain competes against Sweden, both at 9:45pm.

EAT THIS TONIGHT-

???? Seafood and messes go hand in hand: New Cairo’s O1 Mall has welcomed new seafood-forward restaurant Sailor’s Catch, which we’re sure will become a favorite for the shellfish lovers among you. The joint’s main offering is their seafood filled bags where you can choose a selection of shrimp, lobster, crab, mussels, and clams by weight. Next you choose your heat level and flavor from a variety that includes herbed mustard, garlic and mixed pepper, and cajun sauce and proceed to shake, shake, shake all the deliciousness together. It’s a great experience that necessitates the plastic gloves offered. Sailor’s Catch doesn’t stop there, offering a great paella and a ton of sauce-laden appetizers such as dynamite shrimp and fish and chips.

???? OUT AND ABOUT-

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Zawya Cinema’s Panorama of the European Film is kicking off this Wednesday, with a long queue of foreign films from all over the continent to be shown including narrative, documentary, and avante-garde flicks. The Panorama will run until 26 November with films running from 1-10pm everyday. You can check out the full schedule here and tickets went on sale today.

It’s your last chance to catch the play Clôture De L'amour today. Translating to ‘the end of love’, the play features only two actors, Mohamed Hatem and Nanda Mohammad, as they end their relationship in an emotional and captivating performance. The play is directed by Pascal Rambert and starts at 8pm at Rawabet Art Space.

For the art lovers: Almashrabia Gallery has on Unity — a women-centric exhibit that aims to navigate the artists’ collective experiences. Meanwhile, the Nile Art Gallery is showcasing Stillness by the sculptor Reem Osama.

???? UNDER THE LAMPLIGHT-

A book to debunk all you’ve known to be true: The Dawn of Everything: A New History of Humanity by David Graeber and David Wengrow poses new theories of social evolution by exploring lesser-known findings in archeology and anthropology. Our understanding of the rise of agriculture, the formation of cities, and the evolution of social hierarchies are actually riddled with inconsistencies, the pair argue. With Graeber’s background in anthropology and Wengrow’s skills as an archaeologist, the two authors draw on new findings to show that the theory of a linear historical progression towards “civilization” came about as a reaction to indigenous critiques of European society. By rewriting human history, we get a better sense of social and economic organization of the past and how that could factor into new forms of freedom and new ways of organizing society in the future.

Graeber is no stranger to upending our historical conceptions: His seminal work of economic anthropology — Debt: The First 5,000 years — argues that debts existence predates other forms of trade such as barter. Graeber’s strength is his ability to pull in the social dimensions of concepts, illustrating how debt underpins everything from our contemporary economic system, to colonialism, the slave trade, and even interpersonal relationships. For the cynics among you, Graeber’s acerbically funny and scarily shrewd [Redacted] Jobs will have you questioning the real contribution of your 9-5.

Abu Qir Fertilizers reported an 88% y-o-y increase in its bottom line to EGP 1.3 bn in 1Q2021-2022, according to the company’s quarterly financials (pdf). The company’s top line grew 52% y-o-y to EGP 2.7 bn during the first quarter of its fiscal year, which begins in July. Abu Qir Fertilizers attributed the sharp growth to surging global demand for fertilizers and hikes in chemical prices.

Real estate developer Amer Group reversed its losses in 3Q2021, posting a bottom line of EGP 11.9 mn, compared with losses of EGP 17.6 mn in the same quarter a year before, according to the company’s quarterly financials (pdf). Amer Group posted a 75% y-o-y increase in its third-quarter revenues to EGP 363.3 mn.

Abu Dhabi Islamic Bank’s net income rose 23% y-o-y in 3Q2021 to EGP 1 bn, according to the bank’s financials (pdf). The bank’s net interest income rose 9% y-o-y to EGP 2.6 mn in 3Q2021.

Oriental Weavers’ bottom line fell 14.9% y-o-y to EGP 290 mn in 3Q2021, according to the company’s latest financials (pdf). The company reported revenues of EGP 2.7 bn in 3Q2021, down 6.9% y-o-y.

Talaat Moustafa Group reported net earnings after tax of EGP 1.7 bn in 9M2021, up 8% y-o-y, according to its quarterly financials (pdf). The group reported a 9% y-o-y increase in net revenues to EGP 11.3 bn.

Alexandria New Medical Center’s net income dipped 31.5% y-o-y in 3Q2021, clocking in at EGP 7.4 mn, according to its quarterly financials (pdf). The company’s revenues grew 12% y-o-y to EGP 67.6 mn. This comes as the bidding war for its parent company Alex Medical begins to cool off, with TAT Medical Services pulling out soon after Speed Medical also pulled its offer.

Arabia Investments Holding (AIH) saw its net income fall 51.2% y-o-y to EGP 15.2 mn in 3Q2021. AIH’s revenues also fell 34% y-o-y to EGP 420 mn during the quarter, according to their latest financials (pdf).

Arab Dairy’s losses widened in 3Q2021 to EGP 15 mn from EGP 8.4 mn in losses during the same period last year, according to the Panda cheese manufacturer’s quarterly financials (pdf). Sales fell 9.5% y-o-y to EGP 287 mn during 3Q2021.

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MARKET ROUNDUP-

The EGX30 rose 0.8% at today’s close on turnover of EGP 938 mn (36.7% below the 90-day average). Foreign investors were net sellers. The index is up 7.5% YTD.

In the green: Abou Kir Fertilizers (+5.8%), Speed Medical (+5.1%) and Oriental Weavers (+2.2%).

In the red: Ezz Steel (-6.5%), GB Auto (-2.8%) and AMOC (-2.8%).

How green are the “eco-friendly” products we all use, actually? With the rise of climate-conscious consumers in the wake of worsening climate change, single-use plastic — and other products and services with a bad environmental rep — have fallen out of favor around the world. Egypt was no exception to the rule, with the Red Sea governorate banning single-use plastic products in 2019, while the Environment Ministry announced last March a USD 3 mn project to expand that policy countrywide. As awareness about the environmental impact of single-use plastic has increased, the cotton tote became the poster child of a new age of eco-friendly personal habits.

But the cotton tote is a classic example of how the unintended drawbacks of climate-conscious choices may outweigh their benefits, the New York Times writes. A 2018 study by the Danish Environment and Food Ministry found that, to offset the carbon footprint of its production, one cotton tote would need to be used daily for 54 years. The environmental cost of growing the crop is particularly relevant to Egypt, which is long-famed for its luxurious (but water-intensive) cotton and is working to combat water scarcity with a USD 50 bn water-saving plan.

Totes are not the only culprit: The findings raise a flag concerning greenwashed products and services that have a hidden environmental consequence. We take a look at some others:

#1- Fast fashion — yes, even the green labels. In a classic case of greenwashing, most fast fashion brands now have a “climate conscious” line made of recycled textiles or materials. But no matter how green those labels are, one-tenth of industrial water use goes towards fashion, with one cotton shirt taking approximately 3k liters of water to manufacture. Producing one pair of jeans is estimated to take about 7.5-10k liters of water — the equivalent of 10 years of drinking water for one person. Some 10% of global carbon emissions and almost 20% of wastewater can be attributed to the fashion industry.

Fashion is “currently responsible for more annual carbon emissions than all international flights and maritime shipping combined,” portending a 50% increase in greenhouse gas emissions in the coming decade, according to a Princeton University study. And with fast-changing trends (and low-quality products) resulting in higher turnover, people are discarding clothes faster. An estimated 57% of discarded clothes end up in landfills, only to later be incinerated, exposing nearby communities to dangerous gases.

Local brands are adapting to cater to the conscious consumer: Home-grown labels have sought to capture the attention of environmentally conscious consumers, with labels like local artisan-produced Thaat, ethical streetwear brand Scarabaeus Sacer, plastic upcycling brands UpFuse and Reform Studio raising awareness about waste in fashion with their products.

#2- Going paperless, which we’ve been told time and again is better for the environment, also has a hidden price tag. We are just starting to gauge the true environmental impact of going digital, as we factor the carbon footprint of manufacturing electronic products and the energy needed to power them. As a study by the Institute for Applied Ecology puts it, “a lack of data … does not imply a lack of impact.” The study points to the direct impact of the digital transformation on biodiversity and land use, ranging from pollutants produced in resource extraction and hardware production, to power generation and the effect on underwater species due to data transmission, as well as e-waste. With global electronic waste growing by 38% from 53.6 mn metric tons (mt) in 2019 to a whopping 74.7 mn mt in 2030, e-waste is the world’s fastest growing domestic waste stream.

Egypt was one of Africa’s top e-waste producers in 2019, generating 585.8 kilotons (kt) of e-waste, according to a 2020 report by the Global E-Waste Monitor. Recent figures provided by Environment Minister Yasmine Fouad put Egypt’s e-waste production at a significantly lower 90 kt annually, with 58% produced by the private sector, 23% by households, and 19% by the public sector.

On the upside, there have been government and citizen-based drives to help with e-waste recycling, which the CIT Ministry said in 2014, is an industry worth USD 2.2 bn in Egypt. That same year, the ministry adopted the Green ICT Strategy, which “aims at reducing the adverse environmental impacts resulting from the expansion of using ICT devices.” A host of e-waste management startups have also cropped up to dispose of unwanted electronics, including student-launched RecycloBekia, and E-Tadweer, which the CIT and environment ministries launched this year. In 2017, the Sustainable Recycling Industries (SRI) also launched E-khorda, an e-waste recycling entrepreneurship support program.

#3- “Deadheading” undermines ridesharing’s green-ness: Ridesharing, once considered a climate-friendly alternative to owning or driving a car, has quickly proven to not be as efficient as initially thought. Data shows that ride-hailing trips pollute about 69% more than trips that they are replacing. One of the main reasons for this is deadheading (the miles driven between dropping off one passenger and picking up another), which produces up to 50% more carbon emissions than the same trip in a private vehicle. Ride hailing and ride sharing are also increasingly replacing low carbon modes of transport such as walking, biking and transit.

Do we need to tell you that Cairo has a big air pollution problem? As many as two mn people seek treatment for respiratory problems each year due to poor air quality. According to a 2021 report by the World Bank, switching from private vehicles to public transport is the single most effective way to reduce air pollution in the nation’s capital. Uber and Careem launched bus services in 2018, placing them as competitors with ride-sharing bus app Swvl.

The bottom line: Climate-consciousness isn’t about a single product or way of life, but about understanding that how we use products and services is as important as the choice of products and services themselves.