Wednesday, 15 June 2022

PM — Retail investors think something is fishy with ESG funds.

TL;DR

🔎 WHAT WE’RE TRACKING TONIGHT

The downpour of news continues today, ladies and gentlemen, and its good news on the domestic front. Apprehension over policymakers and their rate decisions, meanwhile, continue to guide the conversation abroad.

THE BIG STORIES TODAY-

#1- It’s official We’re exporting more gas to Europe: Egypt, Israel and the EU have signed a memorandum of understanding (MoU) to ramp up LNG exports to Europe, as the continent looks to phase out its reliance on Russian gas, according to an Oil Ministry statement. The agreement will see Israel send more gas via a pipeline to Egypt’s LNG facilities before exporting it on tankers to European shores. There were no details on how much gas we will be exporting to the continent.

As for funding the expansion of our LNG infrastructure: The EU will also help Egypt and Israel increase gas production and exploration in their territorial waters, the Associated Press reports, without providing further details.

#2- Is the UAE’s Aldar eyeing an MNHD acquisition? The UAE’s Aldar Properties is reportedly eyeing an acquisition of a majority stake in EGX-listed real estate developer Madinet Nasr Housing and Development (MNHD), Bloomberg reports, citing sources familiar with the matter. Discussions are still at an early stage, the sources said.

Madinet Nasr has yet to receive any formal offers on the matter, it said in a disclosure to the EGX (pdf) today. Madinet Nasr declined to comment when we reached out today.

Shares in the company rose 7.3% to EGP 2.5 per share at the close of trading today.

THE BIG STORIES ABROAD-

ECB holds emergency meeting as Fed decision looms: The European Central Bank is holding an emergency meeting right now to discuss sellofs of Southern European sovereign bonds on statements that it will take a more hawkish stance in subsequent monetary policy meetings. “The Governing Council will have an ad hoc meeting on Wednesday to discuss current market conditions,” an ECB spokesman said ahead of the meeting. The spread between yields on 10-year Italian government bonds and those of German bonds (a widely followed metric to Eurozone watchers) fell to 2.2 percentage points today. The Wall Street Journal (paywall) has the story.

The move appears to have stabilized European stocks with the FTSE 100 gaining 1.31% and the DAX rising 1.29% as of dispatch.

And all that before we hear word from the Fed on how it will raise rates: The US Federal Reserve’s Federal Open Market Committee is planning to announce later today on whether it would move rates by 50 bps or 75 bps, with the market pricing in the latter. As we noted this morning, US stocks fell further into a bear market yesterday and the bond sell-off continued as traders awaited the Fed’s decision. The S&P 500 saw its fifth-straight day of losses, ending the day 0.4% in the red and extending its descent further into bear territory.

Our own central bank is due to meet next Thursday, 23 June to discuss rates. Stay tuned for Sunday’s EnterpriseAM to hear what our poll of economists has to say on where the wind will blow.

Meanwhile, BTC is continuing its downward spiral today, falling to a new 18-month low: BTC fell by as much 7.8% today to reach USD 20.3k — its lowest level since December 2020, reports Reuters. BTC’s performance this year has been disappointing to say the least, having lost over half of its value YTD. However, this week has seen a particularly bad sell-off for the crypto world, with BTC losing around 28% since Friday and dragging down several other digital currencies with it. Crypto funds saw outflows of USD 102 mn this past week as investors worry over tighter central bank policy. Meanwhile, crypto companies such as Coinbase, Binance, and Celsius have taken exaggerated steps to try and weather the storm.

Bill Gates once again gave cryptocurrencies and NFTs his stamp of disapproval, basically saying that they’re nothing but a speculative asset with no real value during a climate conference yesterday (watch, runtime: 00:48). “Obviously, expensive digital images of monkeys are going to improve the world immensely,” Gates said sarcastically, adding that he isn’t involved with cryptos. This isn’t the first time Gates voices his concerns against cryptos, last year he warned against BTC volatility’s effect on smaller investors, as well as the environmental impact of energy-intensive bitcoin mining.


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

  • Egypt saw foreign direct investment inflows fall 12% in 2021 but remained the second-largest recipient of FDI in Africa after South Africa.
  • Sawiris-backed Altus Strategies is merging with Toronto-listed gold royalty company Elemental Royalties in an all-stock transaction.
  • SODIC subsidiary to borrow EGP 600 mn from Ahli United Bank: Ahli United Bank has agreed to provide SODIC subsidiary Six of October For Development & Real Estate Projects (SOREAL) with a EGP 600 mn discounting facility.

FOR TOMORROW- The EU-Egypt Sustainable Food Value Chain conference takes place at Grand Nile Tower Hotel tomorrow.

🗓 CIRCLE YOUR CALENDAR-

The first workshop in the government’s public consultations on its ambitious state ownership policy document begins next Sunday, according to the online platform for the consultations. Every Sunday and Tuesday will see workshops on specific industries, starting with an agriculture-focused workshop next Sunday and a food industries-focused workshop on Tuesday. Each Thursday is reserved for workshops with the House of Representatives or the Senate, along with think tanks.

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 38°C tomorrow and a nighttime low of 22°C, our favorite tells us.

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enterprise

🚙 FOR YOUR COMMUTE

Are Apple and Samsung finally getting a competitor on the same level? A consumer electronics startup weirdly called Nothing is emerging in the tech world, promising to deliver a new mobile phone that can compete with the two powerhouses that are Apple and Samsung.

Nothing has so far gathered USD 200 mn in investments from the likes of Alphabet’s venture capital arm, EQT Ventures, and former Apple designer Tony Fadell, reports the Financial Times. Nothing’s CEO Carl Pei previously co-founded Chinese smartphone brand OnePlus and now believes “people are yearning for something new.” The new company’s first smartphone will be called Phone (1) — again with the weird naming — was revealed for the first today. The device has a transparent back to reveal its inner electronics components and runs on the Android operating system.

Retail investors aren’t buying into ESG funds anymore. You can thank greenwashing: ESG funds are not appealing as they once were, with flows significantly slowing. Investments into ESG funds dropped 36% during 1Q2022 and then again in April, Bloomberg writes, citing data provided by Morningstar Inc. “It's the worst showing since before the pandemic began and was followed by another decline in April,” Bank of America analysts reportedly said.

Stretching the definition of ESG is putting them off: While, sure, in the midst of current bear market investments are slowing in general, investors in ESG are losing faith that asset managers are really investing ethically.. “I felt like I’d almost been had because I thought I was buying into the more ethical side of this… And then you start looking, you’re thinking, why is Facebook in there?” one investor told Bloomberg.

This comes as the SEC looks to crackdown on greenwashing: Last month, it was reported that the US Securities and Exchange Commission (SEC) is preparing to crack down on investment funds that claim to be “ESG,” “sustainable,” or “low-carbon.”

👌 ENTERPRISE RECOMMENDS

📺 ON THE TUBE TONIGHT-
(all times CLT)

The surrealist comedy of Donald Glover’s Atlanta: One thing we’ve always appreciated about Donald Glover (aka Childish Gambino) is that he doesn’t try to turn a blind eye to important issues while growing his career. Combine that with a genuine talent for surrealist, dark humor and you have Atlanta — which you can find on Disney+. In the show, Earn is a manager to his cousin Alfred (played by Brian Tyree Henry) and tries to bring him to fame in Atlanta’s rap scene. As Alfred’s name (Paperboi) rises in the world, so do the issues the pair (and their crew) face. The supporting characters add a ton to this show and give it an extra depth that is uncommon in many TV shows.

The show channels the absurdity of trying to succeed in a society that pits black people against one another through stigma and economics, with the rap game of Atlanta being the perfect backdrop for this. Atlanta is definitely worth a watch as it seamlessly transitions between heartbreaking and hilarious. There are currently three seasons out and you can watch the trailer for the third season here (watch, runtime: 01:33).

With the addition of Costa Rica yesterday, the full list of qualified teams for the 2022 World Cup is finally here:

  • Group A:

Qatar – Ecuador – Senegal – The Netherlands

  • Group B:

England – Iran – United States – Wales

  • Group C:

Argentina – Saudi Arabia – Mexico – Poland

  • Group D:

France – Australia – Denmark – Tunisia

  • Group E (already nicknamed the Group of Death):

Spain – Costa Rica – Germany – Japan

  • Group F:

Belgium – Canada – Morocco – Croatia

  • Group G:

Brazil – Serbia – Switzerland – Cameroon

  • Group H:

Portugal – Uruguay – Ghana – South Korea

The first match of the world cup will be Senegal vs. The Netherlands on 21 November at 12pm.

A single match tonight for Al Ahly fans: The red-clad team will face Eastern Company tonight at 9pm in the Egyptian Premier League.

🎤 OUT AND ABOUT-
(all times CLT)

Zar ensemble Mazaher are doing things differently tonight, performing alongside Luis Gimenez and creating a new mystical collection of sounds. Gimenez is a lecturer and musician who has studied topics such as musical circulation within an Afro-Asian context. The event will take place at Makan Art Space at 8pm.

A puppet performance of Abdel Halim Hafez and Shadia will be on stage tomorrow at El Sawy Culturewheel from 7-9pm.

💡 UNDER THE LAMPLIGHT-

If you’re a fan of The Da Vinci Code, pick up Steve Berry’s The Omega Factor: The book follows UNESCO investigator, Nicholas Lee, as he tracks the history of a piece of art called the Ghent Altarpiece which has been vandalized, dismantled, or stolen 13 times. This leads Lee to wonder what hidden value this art has that makes it such a common target. This line of questioning soon sees him stumble into a bitter conflict that has lasted 2k years. On one side is a secret order of nuns and the guardians of a great truth and on the other is the Vatican, which has wanted for centuries to possess what the nuns guard. When the two sides catch wind of Lee, they try to use his digging to their advantage and he soon is put right in the middle of a modern-day religious crusade.

🌊 GO WITH THE FLOW

EARNINGS WATCH-

Arab Dairy saw their bottom line fall 61.9% y-o-y in 1Q2022 to EGP 3.19 mn, according to their financials (pdf). The Panda cheese makers also saw their sales decline 23.6% y-o-y during the quarter to EGP 292.8 mn.

MARKET ROUNDUP-

The EGX30 fell 0.1% at today’s close on turnover of EGP 813 mn (3.2% above the 90-day average). Foreign investors were net sellers. The index is down 16.6% YTD.

In the green: Madinet Nasr Housing (+7.3%), Qalaa Holdings (+4.2%) and Heliopolis Housing (+3.5%).

In the red: Cleopatra Hospitals (-4.8%), EFG Hermes (-2.2%) and Eastern Company (-2.0%).

📆 CALENDAR

OUR CALENDAR APPEARS in two sections:

  • Events with specific dates or months are right here up top
  • Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

JUNE

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday- Saturday): Afreximbank annual meetings, St. Regis Almasa Hotel, new capital, Egypt.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

16 June (Thursday): EU-Egypt Sustainable Food Value Chain conference, Grand Nile Tower Hotel, Cairo.

16 June (Thursday): End of 2021-2022 academic year for public schools.

21-22 June (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo.

21-23 June (Tuesday-Thursday): Commonwealth Business Forum, Kigali, Rwanda.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

25-27 June (Saturday-Monday): Big 5 Construct, Egypt International Exhibition Center.

26 June (Sunday): The deadline for private companies to pre-register ahead of bidding for the second phase of the PPP national project to establish and operate 1k language schools.

27 June-3 July (Monday-Sunday): World University Squash Championships, New Giza.

30 June (Thursday): June 30 Revolution Day, national holiday.

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

June: Egypt will launch a unified ticketing system for all means of transport at the Adly Mansour Interchange Station.

June: Egypt and Israel will sign an agreement with the EU to increase LNG exports.

JULY

July: A law governing ins. for seasonal contractors will come into effect.

July: Fuel pricing committee meets to decide quarterly fuel prices.

July: Actis’ expected sale of its majority stake in Lekela to Infinity and Masdar’s Infinity Power.

First week of July: The national dialogue called for by President Abdel Fattah El Sisi kicks off.

1 July (Friday): FY 2022-2023 begins.

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.

AUGUST

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

SEPTEMBER

September: Egypt will display its first naval exhibition with the title Naval Power.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

6-9 September (Tuesday-Friday): Gate Travel Expo 2022, El Kobba Palace, Cairo.

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

26–27 September (Monday-Tuesday): The Africa Women Innovation and Entrepreneurship Forum (AWIEF) at the Cairo Marriott Hotel.

OCTOBER

October: Fuel pricing committee meets to decide quarterly fuel prices.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

10-16 October (Monday-Sunday): World Bank and IMF annual meetings chaired by CBE Governor Tarek Amer, Washington, DC.

18-20 October(Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

27 October (Thursday): European Central Bank monetary policy meeting.

Late October – 14 November: 3Q2022 earnings season.

NOVEMBER

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

7-18 November (Monday-Friday): Egypt will host COP27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.

DECEMBER

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

JANUARY 2023

January EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

MAY 2023

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

EVENTS WITH NO SET DATE

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish above between the actual holiday and its observance.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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