Monday, 25 July 2022

PM — Could a spike in labor protests further exacerbate supply chain woes?

TL;DR

???? WHAT WE’RE TRACKING TONIGHT

Good afternoon, ladies and gentlemen, and welcome to another macro-heavy Monday. Here at home, we have major trade and diplo news, while abroad, the world is eagerly anticipating how the Fed plans to move on inflation, which is fueling a potential global labor protest movement (more on that in today’s For Your Commute).

But first, the Islamic New Year teasing continues: The private sector will be off on Saturday in observance of the Islamic New Year, a statement by the Manpower Ministry read. The news follows an announcement by the Madbouly cabinet yesterday that Saturday will be a national holiday in observance of Islamic New Year. It is highly unlikely we’ll be getting a weekday replacement day.

Your next national holiday is not likely to be before October when we observe Armed Forces Day. 6 October will, in turn, be our last holiday until New Year’s Day 2023 (which is typically a day off for the banking sector).

THIS IS WHAT THE FUTURE LOOKS LIKE: With holidays tied to the lunar calendar coming up 10 days earlier each year, we’re going to be frontloading our holiday schedule in the first half of the year for some time to come. It’ll be interesting to see how we all space out our vacation days in response.

THE BIG STORY TODAY

Egypt, Jordan, and the UAE identified USD 3.4 bn-worth of joint investment projects to implement in the first phase of the three countries’ USD 10 bn industrial partnership, according to a Trade and Industry Ministry statement (pdf). A high-level committee bringing together the three countries’ trade ministers identified these projects as being qualified for feasibility studies, the statement says. The investments, which cover 12 separate projects, are in the food and agriculture, fertilizers, and pharma sectors. The next phase of the partnership will focus on chemicals, textiles, clothing, plastics, and metals manufacturing.

The three countries also announced today that Bahrain will be joining the partnership, making it the first country outside the three founding nations to do so. Prime Minister Moustafa Madbouly had previously invited “our brothers from Arab states” to enter the partnership alongside Egypt, Jordan, and the UAE.

THE BIG STORY ABROAD-

The global business press has its eyes squarely fixed on the Federal Reserve’s interest rate meeting tomorrow, with analysts and investors consulting their magic eight-balls on how far the Fed will go with its tightening cycle. While the consensus is that the Fed will go ahead with a second consecutive 75-bps rate hike to tamp down on inflation, some investors are hopeful that this marks the peak of its tightening cycle, spurring a stock rally that saw everything from oil to European stocks and the S&P 500 and Nasdaq rise, Bloomberg reports.

But many analysts think it’s premature to assume the Fed will take its foot off the pedal: Morgan Stanley analysts and analysts at Barclays say the Fed will continue to raise rates as inflation remains entrenched in the economy, estimating that it could be months before the Fed is comfortable enough with inflation to pivot its stance. Some are even projecting that the Fed will make a rare U-turn by raising rates aggressively through the end of the year before cutting them next year as the economy moves into recession, the Wall Street Journal reports.

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

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

  • Shipments of Russian wheat are safe, Lavrov tells Egypt: Russian Foreign Minister Sergey Lavrov sought to ease Egyptian fears of a shortage of wheat and other grains during talks with President Abdel Fattah El Sisi and Foreign Minister Sameh Shoukry in Cairo yesterday.
  • Major port investments coming: The Suez Canal Container Terminal wants to invest USD 500 mn to expand the capacity of East Port Said port, company representatives confirmed to Enterprise.
  • O West lands EGP 1.5 bn in funding from CIB: Orascom Development Egypt subsidiary Orascom for Real Estate has signed a EGP 1.5 bn facility agreement with CIB to partially finance and fast-track construction at its flagship O West project in west Cairo.

HAPPENING NOW- El Sisi brings Somalia into the fold on GERD: President Abdel Fattah El Sisi and Somali President Hassan Sheikh Mohamud agreed on the gravity of “unilateral policies” in the dispute over the Grand Ethiopian Renaissance Dam (GERD), El Sisi said at a press conference today following their meeting (watch, runtime: 5:16). He said both leaders exchanged viewpoints on conditions in the Horn of Africa, and agreed on the necessity of “consolidating peace and stability in the region that is of strategic importance to our continent”.

FOR TOMORROW-

The IMF’s updated World Economic Outlook is out tomorrow: The Fund has warned that it will “substantially” downgrade its 2022 global growth forecast as the war in Ukraine, surging global inflation and rising interest rates weigh on the global economy.

???? CIRCLE YOUR CALENDAR-

Leaders from across Africa are scheduled to convene in Washington for the US-Africa Leaders Summit from 13-15 December. The summit will bring together leaders to discuss pressing matters including food security and climate change, according to a White House statement.

☀️ TOMORROW’S WEATHER- Temperatures in Cairo will hit 41°C tomorrow during the day before falling to 24°C at night, our favorite weather app tells us.

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???? FOR YOUR COMMUTE

WATCH THIS SPACE- Could a spike in labor protests further exacerbate supply chain woes? Surging inflation is turbocharging labor strikes and protests across the world, especially in the transportation and logistics sector, Bloomberg reports. From natural-gas field workers in Australia and truck drivers in Peru to railway and port workers in the US, employees across the world are demanding better wages to combat inflation.Train drivers in the UK are planning a strike on July 30, and two other transportation unions in the UK set plans for 24-hour walkouts next week.

Workers in most countries lost income during the pandemic: Workers from low-income countries on average lost 3.9% in 2020 and 1.6% in 2021, according to data from the International Labor Organization (pdf). Lower-middle income countries saw their workers lose 7.4% in 2020 and 2.7% in 2021, while workers from upper-middle income countries lost 7.1% in 2020 and 3.7 % in 2021, and high income countries saw their workers’ paychecks shrink 2.5 % in 2020 and 0.8% in 2021.

Why transport workers in particular? They know they’ll be heard: Planned actions would cause “significant disruption” to the movement of freight, Maersk said in a statement last month. Workers in the transportation sector know how crucial their jobs are to the global economy and are aware that any labor disputes may lead to global shortages, higher prices, and would ultimately trigger recessions. The knowledge of their impact is emboldening them to bargain for better pay, Katy Fox-Hodess, a lecturer in employment relations at Sheffield University Management School, told Bloomberg.


The forgotten art of outdoor sleeping is making a comeback…in architecture form: As we wrestle with extreme shifts in temperature and an airborne respiratory disease, sleeping outdoors is slowly regaining popularity, Edwin Heathcote writes for the Financial Times. In the west, Berkeley-based Fernau + Hartman and Australian architect Glenn Murcutt are on the small list of architects designing homes with outdoor sleeping areas. This adoption of architecture in the developed world takes inspiration from the many households in the warmer parts of the world where sleeping outdoors at night is the norm, including from places like India and Sudan.

Sleeping outside as a public health service is not a novel idea. Outdoor bedrooms were a prevalent feature in the early 20th century, in part to escape the summer heat (1911 saw one of the hottest summers on record), and partly as a social distancing method in response to pandemics like the Spanish Flu.

Remember that Google engineer who claims the company’s AI gained human consciousness? Well, Google fired him: Blake Lemoine, the Google AI software engineer who made news earlier in June after claiming the company's artificially intelligent chatbot generator, LaMDA became sentient, was fired by the search giant. Google says they have investigated LaMDA’s sentience, and have found that Lemoine’s assertions are “wholly unfounded”. Google had initially put Lemoine on leave last month, but ultimately sacked the engineer for “persistently violating employment and data security policies,” a Google spokesperson told Reuters.

???? ENTERPRISE RECOMMENDS

???? ON THE TUBE TONIGHT-
(all times CLT)

Nocturnal Animals, available on Amazon Prime, is a 2016 dark psychological thriller, directed by famed fashion designer Tom Ford. The movie stars Jake Gyllenhaal and hollywood doppelgängers Amy Adams and Isla Fisher, with Michael Sheen in a supporting role. Susan (played by Adams), is a successful art-gallery owner who is unhappily married to a man that is always traveling. She receives a novel manuscript from her ex-husband, (played by Gyllenhaal) that she has not been in contact with for twenty years, the novel tells the story of a teacher who takes a trip with his family that turns into a violent nightmare, leading him to seek revenge. As Susan reads the book, she is forced to come to terms with her own past choices. Nocturnal Animals explores the themes of classism, vengeance, and imperfect humanity through its stunning visuals that amplify the movie’s tense mood.

⚽ No football today, folks.

???? OUT AND ABOUT-
(all times CLT)

A whole lot of standup is going on in the city tonight: First up, comedian Ali Quandil aka "The Last Man Standing" is making his Cairo Jazz Club 610 stage debut tonight at 9 pm!

While DownTown Comedy will be returning to the Tap West’s stage at 9 pm, with a line up of Egyptian comedians featuring: Mohamed Kamtcho, Islam Amin, Hamza Bahaa and Esraa Elzare.

For those of you not looking for a laugh tonight:

Indie Filmmaker Dina Abdel-Salam’s film "Cream of the Crop" is screening at AUC Tahrir at 8 pm, followed by a discussion with the director. The critically acclaimed feature follows the adventures of employees at a failing jam factory as they try to make ends meet.

Billie Eilish fans rejoice! It’s the Bad Guy singer’s Tribute Night at Room Art Space New Cairo at 9 pm!

???? UNDER THE LAMPLIGHT-

You should definitely pick up Fiasco: The Inside Story of a Wall Street Trader, Frank Partnoy’s funny, yet disturbing story of the world of high finance at Morgan Stanley in the 90s, and the twilight of the Gordon Gecko, “greed is good” era. The book explored the early emergence of the derivatives trading industry and details a few of the notable high-stake transactions the firm was involved in.

Reminiscing on a bygone era of pre-financial crisis investment banking: As a derivative salesman, Partnoy was part of a group of “rocket scientists” (clever salesmen who convinced unwitting buyers to buy derivatives) that was helping structure transactions so complex that even the traders themselves did not understand them. The group proves to be very profitable but is also breeding ground for overly assertive macho behavior that today would be considered “toxic.” That reached its pinnacle at the annual drunken skeet shooting competition, F.I.A.S.C.O — the Fixed Income Annual Sporting Clays Outing — where Partnoy and his co-workers are encouraged to refine their killer instincts to use against their competitors, clients and each other.

???? GO WITH THE FLOW

The EGX30 fell 0.4% at today’s close on turnover of EGP 842 mn (2% above the 90-day average). Foreign investors were net sellers. The index is down 22.7% YTD.

In the green: MM Group (+13.8%), Ibn Sina Pharma (+6.5%) and Abu Dhabi Islamic Bank Egypt (+2.9%).

In the red: CIRA (-3.9%), GB Auto (-3.3%) and Ezz Steel (-2.9%).

???? WHAT’S NEXT

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Crypto’s latest fad, “Move-to-Earn” (M2E), entices you with the promise of earning back money by exercising, but seldom delivers: A wave of Web3 fitness-focused metaverse companies called “Move to Earn,” emerged this spring, ushered by an app called Stepn, a blockchain-powered platform that pays you to walk in real life. The concept behind the app is simple in theory: The app tracks your movements and you get paid in in-game currency for walking. The currency can be used to upgrade equipment and avatars in the games and be converted into cash. The catch? To participate in Stepn, users need to buy a non-fungible-token (NFT) “sneaker.”

Getting your hands on an NFT Sneaker is easy (sort of): NFT sneakers are necessary to begin earning Green Satoshi Tokens, Stepn’s cryptocurrency. To do this, you’ll need to purchase Solana cryptocurrency to purchase the sneakers, which means you need a crypto wallet, such as Metamask. There are different kinds of NFT sneakers with various “attributes” including efficiency, luck, and comfort, that determine how much money you can make.

But it’s going to cost you: The cheapest tokens cost a couple of hundred USDs and only allow you to earn money very slowly. The high-end versions can cost up to tens of thousands of USDs. And that’s not all: sneakers require constant repairs that, yes, require you to part with more of your money.

It doesn’t matter how far you run: You’re probably not getting your money back. After they began walking, users soon realized that they were only making pennies back on their original spend, Forkast reports. Cheaper, low-performance sneakers can only make users more money if they invest more money in improving their attributes. There is also a 10-minute cap on how long you can run with using a “common” shoe; to run for up to 100 minutes a day users need to either buy 10 common sneakers, or a more expensive (“epic” or “legendary”) model. With all the hidden fees and unclear instructions, many players found themselves unable to earn back the price of the sneakers they purchased.

Then there’s the hit on the currency: Users have been hurt by the crypto crash this year, which has seen the value of Solana and Stepn tokens plunge. A falling user base and the company’s exit from China didn’t help matters. Solana has plummeted more than 77% so far this year while the Green Satoshi Token has lost almost all of its value in just the past three months.

It sounds too good to be true, so why did people fall for it? Stepn was launched in the wake of the GameFi phenomenon, which saw the rise of popular play-to-earn games like Axie Infinity which allowed gamers to play to earn cryptocurrency. M2E games became popular in the spring right before the crypto bubble burst, New York Magzine’s Intelligencer reports. Stepn also had the added advantage of being backed by Sequoia Capital, one of the most respected VC firms in Silicon Valley (which invested in some of the biggest players in the startup world, from Apple to Instacart), and by the venture-funding arm of Binance, the world’s largest crypto exchange.

Stepn insists that it is not a Ponzi scheme: M2E companies are facing allegations similar to those that followed play-to-earn companies. Critics point to the app’s high entry cost, and constant need for new users to join and old users to not simultaneously cash out, to avoid crashing the token price, Vice reports. The app’s unsustainable model has been likened to Ponzi schemes, prompting Stepn’s creators to acknowledge their model’s similarity to Ponzi schemes but insist they are different and perfectly ethical.

???? 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.

JULY

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

23-25 July (Saturday-Monday): Egypt, UAE and Jordan discuss industrial partnership in Cairo.

26 July (Tuesday): The government hosts public consultations on its state ownership policy document with pharma players.

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

28 July (Thursday): The government hosts public consultations on its state ownership policy document with experts and think tanks.

29 July (Friday): Aleph Commodities shareholder meeting to vote on potential merger with Tenaz Energy Corp.

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.

August: Sharm El Sheikh will host the African Sumo Championship.

14 August (Sunday): Conference of Egyptian entities abroad.

16 August (Tuesday): MNHD’s general assembly meeting to decide whether to allow SODIC to go ahead with due diligence on its takeover bid.

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

SEPTEMBER

September: Naval Power, Egypt’s first naval defense expo

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

September: Egyptian-German Joint Economic Committee.

September: A delegation from Germany’s Aldi will visit Egypt to look at potential investments.

September: Government to launch an international promotional campaign for Egyptian tourism.

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

7-9 September (Wednesday-Friday): African Finance Ministers to meet in Cairo to coordinate an African-led position during COP27.

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

11-13 September (Tuesday-Thursday): Environment and Development Forum (EDF), InterContinental City Stars, Cairo.

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: Air Sphinx, EgyptAir’s low-cost subsidiary to commence operations.

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.

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): Autotech auto exhibition, Cairo International Exhibition and Convention Center.

6-18 November (Sunday-Friday): Egypt will host COP27 in Sharm El Sheikh.

7-13 November (Mon-Sun): The International University Sports Federation (FISU) World University Squash Championships, New Giza.

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

DECEMBER

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

13-15 December (Tuesday-Thursday): US-Africa Leaders Summit.

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

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

December: The Sixth of October dry port will begin operations.

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

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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