PM — A slow news day to round out the week

Well, friends, we made it through the first full workweek of Ramadan. We can’t say it was a breeze, but here’s to hoping our routine will help us push through the rest of the month.

Proof that we haven’t quite adjusted to our lack of caffeine in the morning: We incorrectly said in this morning’s EnterpriseAM that Eid Al Fitr will fall on 3-5 May. Depending on whether Ramadan is 29 or 30 days long this year, Eid will be either 1-3 or 2-4 May. H/t Davide C.

SO, WHEN DO WE EAT? You’ll be breaking your fast at 6:17pm CLT this evening in the capital city. Fajr prayers are at 4:08am tomorrow morning.

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PSA: Your data might have been compromised through some Google Play Store apps: Google has removed dozens of apps from its Play store after researchers discovered they hold spyware that collects user data, the Wall Street Journal reports, citing findings from a Panama-based company with ties to US national security agencies, which wrote the code. The data harvesting software has been found in over a dozen apps, including Muslim prayer apps Al-Moazin Lite and Qibla Compass. It was downloaded on at least 60 mn mobile phones, according to researchers. A Google spokesman said the apps were removed for collecting data outside the rules of Google, adding that the apps could return to the app store if the software was removed.

THE BIG(ish) STORY TODAY

How slow of a news day is it? Slow enough that the biggest story on the homefront so far is the US delivering 1.5 mn Pfizer vaccines to Egypt, bringing Washington’s total vaccine shipments to Cairo to 25 mn doses, according to a statement from the US Embassy in Egypt. Over 32.5 mn people have been fully vaccinated in the country, and more than 2 mn have had their boosters, according to the most recent Health Ministry data.

THE BIG STORY ABROAD

The global press is focused today on the diplomacy side of the Russia-Ukraine war, as Ukraine continues to lobby the West to impose harsher sanctions and supply Kyiv with more weapons. Ukrainian Volodymyr Zelensky issued new pleas to the international community ahead of a NATO meeting in Brussels today, which Ukraine will attend. Meanwhile, US Treasury Secretary Janet Yellen urged expelling Russia from the G20, saying that Washington would skip the G20’s upcoming meeting of finance ministers and central bank governors on 20 April if Moscow officials attend, according to Reuters.

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

• A cooperation protocol signed yesterday could be a first step toward making it more attractive for VC firms to directly invest in Egypt: Three key regulators have agreed to work together to make it easier for both local and international VCs to invest in Egyptian startups. On board are the General Authority for Investment and Freezones, the Financial Regulatory Authority, and the Information Technology Industry Development Agency.
• Coffee with Shift EV: Electric mobility startup Shift EV has closed a total of USD 9 mn in funding, putting it on the road to transform the EV landscape not just in Egypt, but across emerging markets with home-grown battery technology. Cairo-based Shift’s series A round was joined by existing investors Union Square Ventures, Algebra Ventures, and Wamda as well as first-time investor Oman Technology Fund.
• GLT Express steps into Egypt with local acquisition: Saudi logistics company GLT Express has made Egypt its first expansion destination outside the Kingdom, acquiring Gallop Express for an undisclosed sum.

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???? CIRCLE YOUR CALENDAR-

Last chance for brokerages to join the new securities federation: The Financial Regulatory Authority is again extending the deadline for brokerage firms, asset managers and financial advisors to sign up to the Egyptian Securities Federation to 18 September, ahead of the convening of its first general assembly, according to Al Borsa. The regulator said this would be the last time the deadline is extended. The federation has struggled to attract members since it was launched in 2019. Membership is mandatory only for new firms.

Expect movement on fuel prices this week or the next: The government’s fuel pricing committee is due to have its quarterly meeting at the beginning of this month, when it will likely opt to hike prices in 2Q. If it does so, it would be the fifth time in less than a year. The committee increased prices of 80, 92 and 95-octane by EGP 0.25 when it last met in February in response to rising international prices, and since then, the war in Ukraine has sent Brent up yet again, with a barrel of the stuff going for almost USD 103 at dispatch time this morning. Prices at the pump have risen by up to 16% since April last year.

ALSO THIS WEEK AND NEXT-

• Foreign reserves: March’s foreign reserves figures will be announced in the next few days;
• Inflation figures for March are expected on Sunday, 10 April.

Companies have just under 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 20 April, the Financial Regulatory Authority (FRA) announced last week. The regulator is making it mandatory for corporates to publicly disclose their performance on key environmental, social and governance metrics each year when they submit their annual financial statements, starting 2023. Reach out to Moustafa Taalab at InkankIR, our parent company, if you need some help.

☀️ TOMORROW’S WEATHER- The temperature is going down to more tolerable levels this weekend: Expect daytime highs of 30-32°C over the weekend while nighttime lows will reach 14°C, our favorite weather app tells us.

Will VCs soon be expected to shoulder the cost of crypto hacks and scams? As startups venturing into crypto become more susceptible to cyber attacks that can siphon USD mns in a matter of minutes, they often turn to their wealthy investors to bail them out, writes Bloomberg, citing VC and trading group leaders. This happened most recently with Sky Mavis — the developer of popular game Axie Infinity — raising USD 150 mn from the likes of Binance, Andreessen Horowitz and Paradigm to reimburse customers after a hack. With this in mind, VCs should set aside contingency funding to bail out victims of hacks as a core part of the agreement, players in the space now recommend. This comes as around USD 4.7 bn has been poured into crypto startups globally in 1Q2022 as the crypto trend continues to gain traction.

Meta wants to tap into finance with products such as (the horribly-named) “Zuck Bucks”: As its advertisement business receives hits worldwide from competition and new regulations, the Facebook and Instagram parent company is searching for new revenue streams. The company’s financial arm, Meta Financial Technologies, is considering a number of new products such as “Zuck Bucks” — a cryptocurrency for the metaverse, the Financial Times reports, citing sources with knowledge of the matter. Meta could also launch “social tokens” or “reputation tokens,” (hi, Black Mirror) which could be sent as reward for meaningful posts or comments as well as “creator coins” that could be purchased for influencers. Mark Zuckerberg could also try his hand at more traditional finance solutions such as offering low-interest loans to small businesses on his platform. Most of the efforts are in the early stages of being discussed and might not necessarily be brought to life, the sources said.

???? ON THE TUBE TONIGHT-

(all times CLT)

Sitcom staple El Kbeer Awy Season 6 is standing out among its peers on TV screens, as the new season introduces new characters while maintaining recurring (and staple) characters El Kbeer, Johnny and Hazal’om (all played by Ahmed Mekki) but with a change in personalities and influence: El Kbeer has become lonely after his wife Hadeya (previously played by Donia Samir Ghanem) leaves, leaving him in mayhem with his twin children while losing status as “El Kbeer” in his village Al-Mazarita. Johnny is also still there but only now as an unemployed and depressed man, which is much of a change from the cheerful character he captured in previous seasons.

Yesterday’s episode was probably this season’s hit, as El Kbeer gets remarried to Marbouha (Rahma Ahmed), with the episode going viral on social media. We’re not ones to publish spoilers, but suffice to say she wears a tiger costume. The wedding episode also just made us all the more excited for the episode in which the sitcom mocks South Korean thriller Squid Game. El Kbeer is available on Watch It.

⚽ Brace yourself for a weekend full of football, starting with the UEFA Europa League: RB Leipzig will play against Atalanta at 6:45pm, followed by three games at 9pm: Eintracht Frankfurt v Barcelona, Sporting Braga v Rangers, and West Ham United v Olympique Lyonnais.

We’ve got some nice English Premier League games over the weekend, with Newcastle United playing against Wolverhampton Wanderers at 9pm on Friday. More EPL games are set for kickoff on Saturday, with Manchester United v Everton at 1:30 pm, Arsenal v Brighton at 4pm, Southampton v Chelsea at 4pm, Watford v Leeds United at 4pm, and Aston Villa v Tottenham Hotspur at 6:30pm.

Moving to La Liga, Sevilla will play against Granada at 9pm on Friday, while Saturday will see games between Cadiz v Real Betis at 2pm, Mallorca v Atletico Madrid at 4:15pm, Villarreal v Athletic Club at 6:30pm, and Real Madrid v Getafe at 9pm.

In the Serie A on Saturday, Empoli will play against Spezia at 3pm, while Inter Milan will clash against Hellas Verona at 6pm and Cagliari will meet Juventus on the field at 8:45pm.

We’ll have some Egyptian football on Saturday, with Pyramids against Ghazl Al Mahallah, Al Ahly v Al Masry, and Zamalek v Misr Lel Makkasa. All three games will kick off at 9:30pm.

???? EAT THIS TONIGHT-

What happens when a popular Middle Eastern dessert meets with a popular Western dessert? An explosion of flavors — and that’s why we’re recommending Coppermelt’s Baklava with Blueberry Cheesecake for a satisfying dessert post-fitar. The crunch from the baklava on top accompanied with the softness of the cheesecake and the tanginess of the blueberry ensures a blast of flavors in your mouth.

???? OUT AND ABOUT-

(all times CLT)

Places to do get some artistic creativity into your Ramadan routine:

New Cairo’s Rustic Gallery is holding a series of art classes this month. You can join their wood slice painting workshop tomorrow at 7pm and take home your artwork.

On Saturday, That Really Cool Studio in Zamalek will offer a pop art workshop with Shadden Fahim that will teach you all about the mass-culture, mass-media, mass-production art movement that is pop art. Participants will also create a “Cairo-fied pop art painting that you can proudly show your mama.” The studio is also offering workshops all month as part of their 1001 Paint Nights series.

Nozhout El Nofous is an “audiovisual exploration of musical freedom through the lens of century-old archival recordings.” The performance is created by Nancy Mounir and features Youssra El Hawary (on accordion), Nadia Safwat (trumpet), Ahmed Amin (double bass), Mounir Maher (piano), Felipe Simonsen (trombone) and Nancy Mounir (violin & theremin), alongside more musicians. Catch the performance at Rawabet Art Space tomorrow at 9:30pm.

Instagram-famous comedian Mohamed Moula is headlining a standup comedy show at The Room New Cairo on Saturday at 9pm. The show will be hosted by Ahmed El-Hareedy and Mohamed Gamal El-Din.

Egyptian/German photographer Malak Kabbani is giving a talk titled “Finding a Way” where she will share some insights on her journey with photography in Egypt and the UK. The event will take place on Saturday at Photopia at 8:30pm.

Visit the L’ Immeuble Building before fitar for a session of stretching and breathwork exercises — or as they call it The Ramadan Routine. Cocoon Cultural Center will lead these sessions from 3-5pm on Tuesdays and Saturdays.

Meanwhile, sweat that fitar off with a “Ramadan Run” at Cairo Sporting Club tomorrow at 8pm.

MARKET NEWS-

EFG Hermes will increase its issued capital by over EGP 973 mn by distributing bonus shares at a rate of one bonus share per every five existing shares, according to an EGX disclosure (pdf).

MARKET ROUNDUP-

The EGX30 fell 2.2% at today’s close on turnover of EGP 992.89 mn (2.5% above the 90-day average). Foreign investors were net sellers. The index is down 7.1% YTD.

In the green: Rameda (+3.1%), CIRA (+1.2%) and Orascom Development Egypt (+0.7%).

In the red: Mopco (-10.3%), Fawry (-6.0%) and MM Group (-5.4%).

UNCTAD trims global economic growth to 2.6% in 2022: The United Nations Conference on Trade and Development (UNCTAD) has revised downward its global economic growth forecast for 2022 to 2.6%, down from 3.6%, due to the war in Ukraine and the changes countries are making to their macroeconomic policies as a result, according to its updated report (pdf). Developed countries are expected to “reinforce” monetary tightening in light of the war, with significant slowdowns in growth expected in parts of Western Europe and Central, South and Southeast Asia.

Developing countries to bear the brunt of the damage: Developing countries face the threat of a “combination of weakening global demand, insufficient policy coordination at the international level and elevated debt levels from the pandemic” that could push them into a “downward spiral of insolvency, recession and arrested development,” UNCTAD wrote.

External debt has been exploding over the past decade: External debt in developing countries almost doubled from USD 6.5 tn to USD 11.7 tn between 2011 and 2020 which accounts for a rise from 41 to 69.5 percent of GDP. These countries are projected to require USD 310 bn to meet external public debt service requirements in 2022 but their ability to service their debt “deteriorated during the first year of the pandemic,” the report said. The external debt-to-export ratio increased in 121 out of 127 developing countries between 2019 and 2020, while 51 countries stood above 250% in 2020.

Egypt name-checked as potentially exposed to growth slowdown: Countries like Egypt, Pakistan, Mongolia, Sri Lanka, and Angola that face “large rollover pressures and a large debt service to export ratio” could face a downward pressure on their growth rates, UNCTAD says. The government had been planning to bring down our debt service bill to 30% of total state expenditure next fiscal year, compared to 31.5% penciled in for FY2021-2022. Our debt-to-GDP ratio was also set to fall below 90% in FY2022-2023.

Could the government revise our debt targets? With revisions made to the budget, including trimmed GDP growth and a narrowed primary surplus, the government could announce changes to its debt targets on the back of the implications of war.

The policy response is no easy feat, with limited maneuverability: Balance of payments constraints and macroeconomic tightening in richer countries are making policy responses even more difficult to maneuver. While “deepening financial integration widens the socio-economic scope of the impact from the dynamics of the global financial cycle,” the report says.

Developing countries are banking on interest rate hikes to facilitate higher financial returns than in richer economies. “Policy makers in developing economies will be placed under pressure to tighten domestic policy in an attempt to prevent capital outflow,” the report says. That’s the case in Egypt, where the Central Bank of Egypt enacted a surprise 100 bps interest rate hike last month to contain inflation. State-owned Banque Misr and the National Bank of Egypt followed up by offering high-yielding 18% certificates of deposit, which have attracted some EGP 423 bn of savings from Egyptians as of Tuesday.

Interest rate hikes in richer countries affect monetary policy elsewhere: As rich countries raise interest rates to combat inflation,” (read: The Fed’s expected 250 bps-worth of hikes this year) people in the developing world will be forced to take on a disproportionate share of the adjustment to the post-pandemic global economy,” the report says. What developing countries need is “a financial system that enables developing countries to invest for the long term, to introduce the changes needed to mitigate the enormous costs of climate change,” according to the report.