PM — The lost art of mediocrity

Happy Monday, wonderful people. We have another brisk news day here in Omm El Donia — and we’re not even halfway through the week.

THE BIG STORY TODAY-

We’ll get more details on the state’s plans for the resumption of the state privatization program in four weeks: The Sovereign Fund of Egypt’s (SFE) newly established pre-IPO fund is currently working on an initial batch of strategic stake sales worth USD 2.5-3 bn, Planning Minister Hala El Said told Bloomberg Asharq (watch, runtime: 2:50), adding that the government will announce the companies that are up for grabs and other details within four weeks. A second phase of stake sales also worth USD 2.5-3 bn will follow later, El Said added, without disclosing an exact timeline.

THE BIG STORY ABROAD

The international press is broadly focused this afternoon on Ukraine pushing back Russian forces in Ukraine’s southeast as Kyiv works to retake Kharkiv. The story is on the front pages of the Financial Times, the Wall Street Journal, Reuters, Bloomberg, and CNBC.

Also getting ink: Britain’s economy grew at a slower pace than expected in July, increasing the possibility that the country could already be in a recession, according to fresh data from the Office for National Statistics. GDP increased by 0.2% from June, which was less than the median estimate of 0.4%, Reuters reported. The slower-than-anticipated expansion was caused by a combination of factors, including labor shortage and rising costs: UK inflation is currently at a 40-year high.

HAPPENING NOW-

IMF member countries (including Egypt) could have access to an additional 50% top-up of their quotas from the lender if the institution approves a proposal it is reportedly discussing at an informal board session today, Reuters reports, citing sources with knowledge of the matter. The potential extra funding, which would be unconditional and would not permanently change countries’ borrowing quotas, is designed to weather the impact of spiraling global food prices. Global food shortages and supply chain disturbances on the back of Russia’s war in Ukraine, drove the food price index to rise by 10 points y-o-y in August, according to recent data from the UN Food and Agriculture Organization (FAO).

The proposal comes as we’re in talks for additional funding from the IMF, but aren’t expecting a super-sized package. Finance Minister Mohamed Maait and other officials dialed back expectations since Egypt has exhausted its funding quota.

Our friend Dr. Mahmoud Mohieldin is with the good folks at AmCham for a luncheon from 1-4pm CLT. Dr. Mahmoud is speaking in his capacity as UN climate change high-level champion for Egypt. The special luncheon meeting at the Nile Ritz Carlton is open to AmCham members and their guests. Non-members can register to watch here.

Consoleya and Cairo Angels are hosting a business meet-up focusing on Nigeria’s tech ecosystem and how it compares with Egypt’s startup scene. Tarek Shahin (CI Capital’s chief investment officer), Biola Alabi Media CEO Biola Alabi, and Ibrahim Sagna (Afreximbank’s global head of advisory and capital markets) and take part in a panel discussion moderated by Aly El Shalakany, CEO of the Cairo Angels Syndicate Fund.

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

• The European Bank for Reconstruction and Development will provide USD 300 mn in funding to Egypt to help it decommission 5 GW of gas-fired power plants from 2023.
• EGX-listed fintech operator e-Finance will buy back 5% of its shares over the next nine months in a bid to support its share price and boost investor confidence.
• AMOC responds to PIF rumors: Alexandria Mineral Oil Company (AMOC) has not received any information on the Saudi sovereign wealth fund’s reported intention to acquire a minority stake in the company.

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???? CIRCLE YOUR CALENDAR-

Domty deadline day: Shareholders in cheesemaker Domty have until Wednesday to sell their shares to Expedition Investments, as part of its mandatory tender offer for 34% of the company. Expedition sweetened the deal by upping its offer price by 10% last week, which we cover in more detail in this morning’s news well, below.

B Investments is going to have to make up its mind over TotalEnergies Egypt by Thursday: The private equity player has the right to preempt a bid by Abu Dhabi energy giant Adnoc to acquire a 50% stake in the company, which expires on Thursday.

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 temperatures to rise to 37°C during the day tomorrow before falling to 22°C in the evening, our favorite weather app tells us.

Why are we so terrible at being terrible? Many of us don't realize how rewarding it is to be just mediocre at something, the Wall Street Journal writes, citing psychology and behavioral science professor Thomas Curran. With highly competitive jobs, social media feeding us inaccurate “images of perfection,” and targeted marketing campaigns telling us that a specific product is going to help us excel in life, everyone is under tremendous pressure to always be brilliant or risk being shunned by society, Curran notes. The average level of social perfectionism — or the need to prove your flawlessness to others — rose by roughly a third between 1989 and 2016 among more than 41k college students, according to a study Curran led. But sometimes, “it's such a relief not to have to be good,” one publishing executive and admittedly terrible surfer says. Other laymen the Journal spoke with also cited a sense of “joy” in allowing themselves to be mediocre at different things, particularly hobbies.

Self-driving cars may not be possible without some help from humans after all: Startups in the autonomous vehicle industry have been found to frequently use human remote supervisors and human safety drivers, Reuters reports, citing consultancy firms and industry players. This indicates that fully autonomous vehicles may never be a reality — a premise that challenges the core idea promoted by AV startups that computers and artificial intelligence would drastically minimize accidents caused by human error. Robots need a helping hand from humans to face special circumstances, such as unexpected lane restrictions due to construction, or unanticipated actions of pedestrians or other drivers.

Eventually, humans’ role could be similar to air traffic controllers, supervising from hundreds of miles away, watching video feeds from several AVs and, in some cases, even equipped with a steering wheel, ready to intervene and get trapped robot drivers back on the road, according to the news wire. “I can provide my customers peace of mind knowing there is always a human there to help if needed,” said Kyle Vogt, CEO of Cruise, a General Motors-backed self-driving startup. “I don't know why I’d ever want to get rid of that.”

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To upgrade or not to upgrade: Apple unveiled two iPhone 14 models and two 14 Pro models last week. If you’re wondering whether you should splurge for a new phone or stick to your old one, here’s a quick recap of the key features in the new models, whose price points are (shockingly) staying the same, despite soaring inflation, the Washington Post notes. The new models are getting a couple of new safety features including automatic car-crash alerts and SOS satellite services.

Say goodbye to the iPhone mini: Apple killed the least expensive iPhone model, which only lasted two generations and is instead releasing the iPhone14 Plus, which offers a larger screen and better battery life without the iPhone 14 Pro’s heftier price tag. It however looks pretty much the same as the iPhone 12 and 13.

A new design element: Both the 6.1 inch iPhone 14 Pro and the 6.7-inch iPhone 14 Pro Max are ditching the notch on the top of the screen for a new pill-shaped cutout, dubbed the Dynamic Island. But what exactly does it do? It makes use of the space around the front cameras and grows or shrinks as it gets filled up with new notifications or other information such as what song is currently playing.

Better cameras: All four models’ front-facing selfie cameras are getting autofocus, while only the pro models are getting a 48-megapixel sensor, up from the 12-megapixel sensor. Although you’re probably not going to be using that special mode very often as it generates huge files.

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

Netflix’s The Anthrax Attacks looks back at the 2001 spate of attacks targeting US media offices and senators using the deadly poison: Just a week after the events of September 11 2001, another wave of terrorist attacks began that saw letters containing anthrax spores mailed to news offices in New York and Democratic senators in Washington. The attacks went on for several weeks, leaving five people dead and infecting 17 others. Anthrax is a serious, potentially lethal infectious disease caused by Bacillus anthracis, a bacteria that commonly affects animals. The letters included messages such as “Death to America,” which led investigators to initially suspect international perpetrators but they eventually shifted to domestic suspects. The Anthrax Attacks takes a quasi-documentary approach to the incident and the nearly seven-year FBI investigation that followed, using interviews and archival news footage but with the addition of Clark Gregg playing Bruce Ivins, a microbiologist who offered his help with the investigation — and later became a lead suspect. You can watch the trailer here (runtime:1:39).

⚽ Just two matches tonight folks: In Serie A, Empoli plays Roma at 8:45pm and in LaLiga, Almeria plays Osasuna at 9pm.

???? Carlos Alcaraz became the youngest World No. 1 in tennis after earning the US Open championship title yesterday. The 19-year-old Spaniard defeated Norway’s Casper Ruud in four sets to secure his first Grand Slam trophy and the Number 1 Pepperstone ATP Ranking. Alcaraz is the youngest man to earn a Grand Slam title since Rafael Nadal won the 2005 French Open as a 19-year-old, the New York Times notes.

???? OUT AND ABOUT-
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Egyptian singer-songwriter Nadya Shanab is performing a few original songs and putting her twist on some old classics at Room New Cairo at 9pm. Shanab is currently experimenting with an Afro-Egyptian sound and ways to connect Egypt with the rest of Africa musically.

Head to the Tap West, where Beit El Comedy will be serving up some punch lines at 9pm, courtesy of its lineup of Egyptian comedians featuring: Alaa Yassin, Mohamed Moula, Abdelrahman Mohamed and Abdelrahman Magdy.

???? UNDER THE LAMPLIGHT-

Is it better to be a generalist or specialist? David Epstein’s book Range argues that success in the modern world in the majority of fields has seldom lent itself to those that specialize early. Through a close look at research on successful performers, Nobel Prize winning scientists, and top performing athletes, Epstein concludes that generalists are better primed to thrive in most of the domains that are relevant to the modern economy. Epstein contrasts professional golf player Tiger Woods, who specialized early in his life, with professional tennis player Roger Federer, who explored a few different sports before finding his groove (and a record-breaking career) in tennis. While both have amassed great success and there is not just one path to success, Epstein argues that those with knowledge in different fields are better equipped to succeed in modern work, with a few exceptions he notes where specialization works better (many of which are fields based on pattern repetition, which Epstein points out is are more easily automatable). He argues that there are actually more options today for generalists who accumulate skills from various domains.

The EGX30 rose 0.8% at today’s close on turnover of EGP 1.64 bn (44% above the 90-day average). Local investors were net buyers. The index is down 12.7% YTD.

In the green: Fawry (+3.5%), Telecom Egypt (+3.0%) and Eastern Company (+2.8%).

In the red: Rameda (-4.6%), Orascom Construction (-2.4%) and Abu Qir Fertilizers (-1.6%).

Ethereum could finally unveil a game-changing, greener technology this month: Ethereum, the world’s second most popular cryptocurrency, is gearing up to bring its long-awaited software upgrade to light on 15 September. The upgrade — known as the Merge — aims to shift the platform to a more energy-efficient infrastructure, which could be a game changer for an industry plagued by concerns about the detrimental impacts it has on the environment. A change this big has not come easy: The Merge has experienced years of delays and is still facing skepticism from thousands in the industry.

Why crypto has desperately needed this for years: Every year, BTC mining — where thousands of computers compete with each other to append transactions in a system known as “proof-of-work” — consumes more energy than Belgium, according to the University of Cambridge’s Bitcoin Electricity Consumption Index. Ethereum’s consumption is estimated to be roughly a third of Bitcoin’s, according to Wired.

How will The Merge cut energy consumption? This rests on the shift from a “proof-to-work” system to a “proof-of-stake” system. The proof-of-work system relies on using computers to run software that solves complex puzzles to confirm transactions. The owner of the computer that solves the puzzle is rewarded with new coins in the digital currency they are verifying. The proof-of-stake system, on the other hand, will see limited groups of crypto investors deposit at least 32 ether (ETH) — which is about USD 61k at current market prices — in a shared pool, with each exchange picking a random one of the investors — also referred to as validators — to verify the transaction and reap the rewards. It essentially acts like a lottery, and does not require electricity or high-powered computers.

Why is it so expensive? The 32 ETH sum acts as an incentive for participants to have a stake in the success of the network — ensuring they use up-to-date, secure software, Fortune writes. It also provides financial incentives for users to stake their ETH and cash in on its yields.

Why “The Merge”? Ethereum programmers have already taken a big step towards making proof-of-stake work, after releasing a proof-of-stake crypto platform called the Beacon Chain in 2020. The platform has been undergoing testing for the past two years, and is now finally ready to merge with the main public Ethereum blockchain. The Beacon Chain currently has over 415,000 validators.

It’s not just about energy — the upgrade will help lay foundations for much more affordable transactions: The transition to proof of stake is a “critical precursor” to realizing another layer of technology that can help bring “gas fees” — transaction fees that can hit highs of up to USD 200 when there’s a lot of demand on the platform, which has limited capacity — down by nearly 100%, the Ethereum Foundation says. Ethereum creator Vitalik Buterin predicts these fees could drop to as low as USD 0.002-0.05 with the help of a technology that processes transactions on a separate chain, and then records a compressed version on the main Ethereum blockchain to help relieve some of the pressure on the blockchain.

The Merge can also push Ethereum up the ranks of cryptocurrencies: The system upgrade will relieve miners of intense “selling pressure,” which in turn will reduce the “inflation rate of supply,” research firm FSInsight said in a report cited by CoinDesk. This will cut Ether’s issuances by 87%, allowing Ethereum to potentially eclipse BTC in market cap over the next year. Ethereum’s current market cap of around USD 226 bn is nearly half of BTC’s USD 461 bn, according to CoinDesk data.

The upgrade is not without its controversy: While most in the industry are supportive of the shift, some — mostly miners lamenting the losses they might sustain from the shift — are critical. Some are also concerned that proof-of-stake could make Ethereum more centralized and less secure, a concern that has threatened cryptocurrencies for a while now. In the proof-of-stake system, so-called “validators” will come from a pool of entities holding large amounts of staked Ether (Ether deposited on the Beacon Chain). These include Lido Finance, which controls a whopping 31.2%, Coinbase, which controls 14.7% and Kraken with 8.5%, according data compiled by Messari. It will become inherently easier for these large organizations to become validators since they already hold large stakes in the coin and are able to make the large deposits required, as opposed to a regular run-of-the-mill owner of the coin.

Disclaimer: These organizations also act as custodians for smaller holders of Ether, which means they don’t actually own most of what they hold. Still, concerns of cryptocurrency becoming more centralized — and at times, even, monopolized — are prevalent in the crypto community, and the proof-to-stake framework threatens to exacerbate these issues.