PM — It’s a really good news day

It’s another day of outstanding news, ladies and gentlemen, as we head to the pre-Ramadan sprint, with the positive signals being sent by both the Madbouly Cabinet and our regional allies on the economic front.

THE BIG STORIES TODAY

Gov’t has an outline of its long-term policy strategy to encourage private sector involvement in select sectors: The Madbouly Cabinet discussed today the broad strokes of its planned strategy to guide its decisions on how the state can back out of select sectors of the economy to open the door for private sector activity, while maintaining a foothold in sectors it deems necessary, according to a statement. The statement, which does not provide specific details on which sectors are expected to fall under each category, notes that the government is working on putting together a “comprehensive view” of which sectors the state will be involved in for the next three years. It outlines a “gradual exit” plan for the state from certain activities, which would be implemented in phases, while it will remain active in other sectors. Once the strategy is announced, the government will run an assessment of all state-held assets in the sectors it plans to exit and put in place a mechanism for these exits, the statement says.

On that front, Fawry sold a 6% stake in a EGP 1.05 bn block transaction, according to an announcement displayed on EGX screens today. The announcement does not specify the buyer, but the local press — including Hapi Journal, Al Mal, and Al Shorouk — appears to be in agreement that the unnamed entity is state-owned National Bank of Egypt (NBE). The transaction, which reportedly saw NBE purchasing the stake from foreign sellers, would raise its total stake in the fintech giant to 12.25%.

More good news today: It looks like we are getting deposits from the GCC after all. Saudi Arabia deposited USD 5 bn with the Central Bank of Egypt, on directives from King Salman and Crown Prince Mohammed bin Salman, state-run Saudi Press Agency (SPA) said. The move, which the statement says “reinforces the bilateral relations between the two countries” and Riyadh’s efforts to continue supporting Cairo, is the latest show of support from our GCC friends since last week’s EGP depreciation and interest rate hike and the first to come in deposit form. Other allies have been showing their support through USD 7 bn in investments, with Abu Dhabi’s ADQ pledging USD 2 bn and Qatar pledging USD 5 bn.

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

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

• Lots of investment news: Qatar has agreed to invest USD 5 bn here “in the coming period,” as we grapple with the impact of surging food and energy prices on the back of Russia’s war in Ukraine. Qatar Energy also announced that it had agreed to acquire a 40% working interest in an Exxon–owned exploration block in the Mediterranean.
• Our wheat imports could hit a nine-year low: Egypt’s wheat imports in the marketing year 2022-2023 are expected to drop 8.3% y-o-y to 11 mn metric tonnes as the war cuts two of our biggest suppliers off from the export market.
• E-receipt system pilot to kick off in April: The Finance Ministry will launch its e-receipt system for B2C transactions this Friday, 1 April, to complement the ongoing rollout of its wider e-invoicing program.

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THE BIG STORY ABROAD

Russian forces are making a u-turn amid heavy losses, with Moscow pulling back from certain areas in Ukraine after making a promise to de-escalate its military operations. But the forces are only retreating from areas where they have failed to make progress, and are now being “forced to return to Belarus and Russia to reorganize and resupply,” Britain's Defense Ministry said.

At the same time, Russian forces bombed Chernihiv, the besieged city in northern Ukraine, Reuters reported. The fresh attack came after Ukrainian President Volodymyr Zelensky warned his country against letting down their guard, saying that “the scale of the challenges has not diminished.”

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FOR TOMORROW- All individual taxpayers have until tomorrow to submit their 2021 tax returns to the Tax Authority. The deadline for companies with January-December fiscal years is 30 April.

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You can now apply to the Tatweer Misr Innovation Competition: This year’s edition of the competition is targeting innovators and entrepreneurs who have sustainable solutions that would benefit the real estate sector. This includes solutions tackling issues with the built environment, smart solutions that have a positive impact on resident’s livability, and solutions affecting wellness and recreation. Applicants, as individuals or teams, have until the end of April to apply for the competition.

Companies have a little less than two weeks to file their first quarterly ESG compliance report: Listed firms and non-bank financial services companies need to submit their first quarterly ESG report by 10 April, the FRA said (pdf) on Sunday. The regulator is making it mandatory for corporates to publicly disclose their performance on key environmental, social and governance (ESG) metrics each year when they submit their annual financial statements, starting 2023.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

☀️ TOMORROW’S WEATHER- We’re hitting the 30s tomorrow: The mercury will rise to 30°C during the day tomorrow in the first bout of hot weather that promises to propel us into summer-like weather, our favorite weather app tells us. At night, temperatures will cool to 16°C.

Climate change is affecting the Middle East and Central Asia more than anywhere else in the world, leading to dire economic, financial, and social consequences for the regions, the IMF warned in a new report. Climate disasters pose a “major threat” to growth and prosperity, IMF Managing Director Kristalina Georgieva said. These include droughts in North Africa, Somalia and Iran, epidemics and locust infestations in the Horn of Africa, and severe floods in the Caucasus and Central Asia.

The numbers are frightening: Climate disasters in the regions injured and displaced 7 mn people in an average year and caused more than 2.6k deaths and USD 2 bn in physical damage.

The solution? The world needs to cut global emissions by one half by 2030 to avoid further consequences, Georgieva added. This should be done through climate adaptation policies on a domestic and international level as well as through investments in resilient infrastructure and better flood protection. Reuters has the story.

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The Halo TV series brings the video game to life, using the same weapons and character design and giving gamer fans the chance to experience the scenes from a first-person perspective. The show depicts humanity’s struggle against an alien collective of religious zealots dedicated to wiping them out, with cyborg supersoldier Master Chief being their best hope of survival. Master Chief — a beloved character in the game — drew controversy when he took his helmet off, with diehard fans saying that it was disrespectful to the character, while others brushed it off. It seems the show in general has cultivated a following of either superfans or haters with the writing style pushing audiences to opposite sides of the fence. What is really good about the show, however, are its action sequences which are a great combination of intensity and suspense. You can check out the trailer here (watch, runtime: 02:10).

⚽ Egypt’s national team coach and manager Carlos Queiroz has left his post, after the Pharaohs’ dreams of qualifying for the World Cup was shattered last night on the back of their loss to Senegal in a devastating penalty shootout. The match ended with the same sequence of events as our loss against the Lions of Teranga in the African Cup of Nations final two months ago. The loss is the second in a penalty knockout against Senegal in nearly two months after Egypt lost the Africa Cup of Nations against the Lions of Teranga in the final in Cameroon. “Dream is over. We try [sic] our best but today was not enough,” the Portuguese coach said in a goodbye message to fans on Twitter.

It won’t undo last night’s events, but the Egyptian Football Federation (EFA) has submitted an official complaint to FIFA and the Confederation of African Football for what it described as an “assault on the team and racism” by Senegalese fans in Dakar, a statement by the EFA read. The federation alleged that Senegalese spectators held up “racist signs” during the game, targeting Liverpool forward and national star Mo Salah in particular. Fans also reportedly “intimidated players during warm up,” after separately attacking Egypt’s team bus and causing injuries among the fans, the EFA said.

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Artist Bassem Yousri will take art lovers on an exhibition walkthrough today for his work that is on display at Gypsum Gallery. The exhibit, How to Build a City with Two Nails and a Wire, is a joint showing of Yousri’s and Ahmed Badry’s paintings and sculptures which draw inspiration from the aesthetic of public spaces in Cairo.

El Waili, Donia Wael, and Zaid Khaled are taking the stage today at Cairo Jazz Club 610 at 9pm.

Mashrabia Gallery is opening a new exhibition today titled Quartets Salah Jahin, which is created by Youssef Abdelke. The Syrian artist is inspired by the poems of Egyptian poet Salah Jahin and let the words guide him in creating his art.

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A physics book that could make you cry — in a good way: Renowned theoretical physicist Carlo Rovelli’s book, Seven Brief Lessons on Physics, delves into seven important theories of physics which he explains alongside the story of how they were discovered and the impact they have on the world. Just 78 pages long, Rovelli doesn’t try to venture too deep into the specifics of things, instead creating a book that will give you enough to understand and enough to be touched. The author uses his penchant for words to illustrate physics in a way that can only be described as beautiful. “Here, on the edge of what we know, in contact with the ocean of the unknown, shines the mystery and the beauty of the world,” Rovelli writes. “And it’s breathtaking.” The book has made our fellow colleagues in Enterprise cry, and not because they don’t understand physics, but because of the celebration of discovery that it entails. The Guardian is out with a great review.

EARNINGS WATCH-

MM Group’s bottom line rose 1.3% y-o-y to EGP 375.46 mn in 2021, according to the company’s financials (pdf). Total sales hit EGP 9.00 bn in 2021, up 3.7% y-o-y.

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MARKET ROUNDUP-

The EGX30 fell 1.4% at today’s close on turnover of EGP 751 mn (22.7% below the 90-day average). Foreign investors were net sellers. The index is down 5.9% YTD.

In the green: Qalaa Holdings (+1.4%), Orascom Construction (+1.3%) and Oriental Weavers (+1.3%).

In the red: GB Auto (-3.8%), Rameda (-3.1%) and MM Group (-2.6%).

New cryptocurrency, ApeCoin, is raising concerns about power imbalances in the crypto world: ApeCoin is coming under scrutiny for revealing the growing influence a small group of insiders — particularly VCs — are beginning to amass in what many hoped would become a decentralized online space, according to Bloomberg.

Who’s got their hands on ApeCoin? Early-access to the new digital coin was offered via an “airdrop.” This is where certain crypto holders are awarded tokens at no cost, and is a common tactic used by up-and-coming cryptocurrencies to encourage adoption. Members of the highly coveted NFT collection, the Bored Ape Yacht Club, for example, received some 15% of the 1 bn ApeCoins released last week, and the Jane Goodall Legacy Foundation was allocated 1% of the tokens.

Coins are supposed to be as democratic and decentralized as possible: Coin holdings determine influence over the ApeCoin decentralized autonomous organization (DAO) — which is responsible for taking decisions on how the community is run. The ethos behind DAOs is this idea that online organizations can be collectively owned and managed by a group of members, with all of its decisions autonomously encoded in blockchain. The decentralized nature of these organizations means they avoid power-based hierarchical structures, and don’t fall under the influence of a central authority or government.

But concerns are mounting about how the rest are being allocated: Yuga Labs, the creator of the Bored Ape Yacht Club, received about 15% of the coins and all four of Yuga’s founders received 8% between them. The VC investors that provided financial backing for the coin’s launch — Andreessen Horowitz and Animoca Brands — received a combined 14%. This concentration of coins among investors is raising alarm bells that the balance of power in the crypto space is tilting in the favor of venture capitalists.

This ownership structure is beginning to highlight the cracks in Web 3.0’s central philosophy: The problem critics have raised here is that Andreessen Horowitz, Yuga Labs and Animoca currently hold considerable say over how the ApeCoin DAO will run and falls in line with the broader concern that VCs are already accumulating too much power over the formation of Web 3.0.

Could we soon be looking at Big Crypto? Andreessen Horowitz is apparently considering making an investment in Yuga Labs that would value it at USD 4-5 bn. The company also recently purchased the intellectual property of the CryptoPunks and Meebits collections from Larva Labs earlier this week. It’s no wonder then why CoinDesk has anointed it “the first major NFT monopoly.”

Or a new, slightly dubious way to raise capital? The ApeCoin DAO is looking like “a placeholder attempt to capture future potential business under the Bored Ape brand name,” one crypto investor suggests to Bloomberg, pointing to the similarities of the “airdrop” to a company publicly listing on a stock exchange. “It’s closer to a SPAC — money raised today for some possible business to be named later — without the legal protections around real SPACs,” he said.