PM — War hits the cyber frontier

Good afternoon, wonderful people. We have another issue stacked with updates from Ukraine today, as well as a few pieces to get you thinking about the bigger picture on the conflict and its fallout. But first, on the home front…

THE BIG STORY TODAY

Uber subsidiary Careem is investing an undisclosed amount into Egyptian homegrown food ordering platform Elmenus, the Dubai-based company said in a statement cited by Bloomberg. The investment will “extend our reach in one of our largest ride-hailing markets,” Careem co-founder and CEO Mudassir Sheikha reportedly wrote in the statement, adding that the move also helps it take a further step towards launching its super app across the region. The service is currently available in cities across Saudi Arabia, the UAE, Jordan, Pakistan and Qatar. The company had flagged last month its plans to expand into food delivery — a market worth an estimated USD 2.8 bn in Egypt.

^^We’ll have more on this story and others in tomorrow’s edition of EnterpriseAM.

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

• War in Ukraine threatens GASC’s latest tender: Traders have warned GASC of supply difficulties ahead of today’s wheat tender as conflict rages between major growers Russia and Ukraine, with some saying they won’t be able to offer Black Sea wheat due to the turmoil.
• FinMin looks to roll out B2B e-invoicing for Cairo by June, fully digitize tax system by December: All B2B invoices issued by businesses based in the Greater Cairo Area will be automated by June and B2C invoices across the country will be fully automated by December, as will B2B invoices from firms in the Delta, Lower Egypt and Upper Egypt, director of taxpayer services at the Tax Authority Mohsen El Gayar told Enterprise.
• Plenty of interest in desalination projects: Eleven companies, including the familiar faces of Metito Holdings, ACWA Power, Al Nowais, Schneider Electric, and Orascom Construction, are reportedly planning to bid on desalination projects worth a combined USD 2.8 bn.

---

THE BIG STORY ABROAD

WAR WATCH- Talks between Russian and Ukrainian officials at the Belarusian border are currently underway, after kicking off a couple of hours ago, Reuters reports. Ukraine went in with the aim of reaching an immediate ceasefire and the withdrawal of Russian forces from the country, Ukraine’s interior ministry said, while the Kremlin has been more tight-lipped on what it’s angling for in the talks.

Not very conducive to a ceasefire: Russia’s defense ministry has placed its nuclear missile forces, its Northern and Pacific fleets, and long-range aviation on “enhanced combat duty” today, following Russian President Vladimir Putin’s orders yesterday to put the country’s nuclear forces on high alert, according to Russia’s Interfax news agency.

There are also reports of “strong shelling” in Kharkiv, Ukraine’s second-largest city, as the ceasefire talks are ongoing, Ukraine’s interior ministry said, according to Sky News. Ukrainian forces have so far repelled Russia’s attempts to take over the capital city of Kyiv and Kharkiv.

The talks began after Russian forces took over two small cities Berdyansk and Enerhodar in southeastern Ukraine and the Zaporizhzhya region and the area surrounding its nuclear power plant, Interfax reported. Operations at the plant are continuing normally, according to Interfax, which reported Ukraine refuting that Russia has seized the plant.

More sanctions from the UK: Foreign Secretary Liz Truss is due to make a statement to the UK House of Commons on further sanctions against Russia at 5:30pm CLT, Sky News reports. A statement on corporate transparency and economic crime measures will also be made by Business Secretary, Kwasi Kwarteng. Among the fresh sanctions London is slapping on Moscow: Banning any UK entities from doing business with the Russian central bank, finance ministry and wealth fund. Russian financial institutions and companies will be barred from issuing transferable securities and money market instruments in the UK per the new sanctions.

Russia clapped back with its own measures, blocking off its airspace from airlines from 36 countries, including Britain, Germany, Spain, Italy and Canada in response to sanctions, Reuters reports.

Meanwhile, on the economic front: The Bank of Russia hiked its interest rates to their highest since 2003 as it looks to contain the economic fallout from the invasion in Ukraine and ensuing Western sanctions, according to a statement. The bank raised key interest rates to 20% from 9.5%.

The Russian central bank also imposed some controls on capital flow, including temporarily barring brokers from selling orders of securities held by foreigners on the exchange. It also imposed mandatory hard-currency revenue sales for exporters. The emergency move comes after the US and the European Union approved penalizing Moscow through shutting off around USD 640 bn in international reserves of the Russian central bank and cutting off some Russian banks from the SWIFT global payment system.

The Russian-Ukrainian war has led the RUB to plunge to a record low, falling nearly 30% against the USD in offshore trading today. The currency dropped to almost 118 against the USD, according to Bloomberg data. The RUB had already suffered heavily last week, sliding to lows after the invasion and tough US and EU sanctions. The central bank called off this morning’s FX, money market, and repo trading session at the Moscow Exchange.

On the energy front, European natural gas futures jumped around 36% amid worries that the imposed sanctions could lead to energy shortages, Bloomberg reports.

On the humanitarian front: Some 500k people have fled Ukraine since the invasion began last week, the UN refugee agency UNHCR head Filippo Grandi announced on Twitter.

Ukrainians fleeing the war may be granted by the EU the right to stay for up to three years, Reuters reports, citing senior EU and French officials. The move would provide protection similar to one provided under the EU temporary protection directive, which has never been used so far. The protection directive provides a residence permit, jobs access, social welfare and medical treatment for 1-3 years in all EU states. EU ministers will meet on Thursday to agree on the details related to the protection.

Airbnb also wants in, offering to provide temporary housing for up to 100k Ukrainian refugees fleeing the war to neighboring states at no charge. The housing will be funded by the company, donors, and hosts on the app.

Subscribe to Enterprise

???? CIRCLE YOUR CALENDAR-

EFG Hermes’ 5th Virtual Investor Conference kicked off today under the headline Change and Opportunity in FEM. The online event will bring together executives from 226 companies representing 35 countries as well as over 750 investors representing 277 financial institutions. The conference will run until 8 March.

It’s your last day to apply for the incubator and accelerator program for digital transformation-focused startups from the Information Technology Industry Development Agency and US-based VC firm Plug and Play, in partnership with our friends at USAID. The “Smart Cities” innovation hub will select 20-30 Egypt-based companies for its inaugural three-month program, which starts in March.

The Future of Data Centers Summit takes place today and tomorrow at the InterContinental CityStars.

Contemporary art and culture center Darb1718 is hosting its 3031 Art Festival from 4-12 March on its premises in Fustat, Old Cairo. Unique collections of multidisciplinary art will be on display along with live music, dance, theater performances, and interactive workshops. Guest speakers Adsum Art Consultancy will be on hand to discuss investing in art. Catch a full day of activities from 1:00pm–9:30pm on weekends and weekdays from 4:00pm–10:00pm.

Consoleya is holding its second Women Meet-up this Wednesday, 2 March to discuss topics including inclusivity in investment. The agenda includes a panel discussion on gender-lens funding here in Egypt.

The Diarna Handicrafts Fair kicked off last Thursday and runs through 7 March at Cairo Festival City from 10am until 10pm daily.

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

☀️ TOMORROW’S WEATHER- You won’t get too cold tomorrow evening, as the nighttime low is at 15°C — higher than it has been in a while, our favorite weather app tells us. The day also promises to be warm, with the mercury rising to 25°C.

Latest commodity victim of the Russia-Ukraine war: Sunflower oil. Russia’s ongoing war on Ukraine has sent a slew of commodity prices surging, including wheat, natural gas, and sunflower oil, the Wall Street Journal reports. The two countries together account for 80% of the world’s supply of sunflower oil, which is now threatened by port closures in Ukraine, Western sanctions on Russia, and shipping disruptions, the newspaper reports. Egypt imported around 54.5% of its sunflower oil from Ukraine in 2020, according to the most recent data, with the price of the subsidized oil — which is now reviewed on a quarterly basis — surging 23.5% last May.

The automotive industry, which was already struggling with the global chip crisis, is now facing unexpected war-induced supply chain disruptions: Car factories across Europe have been shutting down since Russia’s invasion of Ukraine threatened to disrupt the supply of car components crucial to the production of semiconductors and batteries, among other crucial goods for the industry, the WSJ adds. “Ukraine is not central to our supply chain, but suddenly we discovered that when this part is missing, it is,” said a spokesman from Volkswagen, which was forced to halt production at its plants in Germany due to supply chain disruptions in Ukraine.

And ongoing cyberattacks aren’t helping: Toyota suspended all its Japan operations today after one of its component suppliers was the target of a suspected cyberattack, according to Reuters. The stoppage will lead to the foregone production output of 13k cars that would have been manufactured. The attack came just after Japan joined the West in sanctioning Russia, but it’s unclear if the two incidents are related.

The cyberattacks aren’t just targeting companies: Hackers are using Facebook to target individual Ukrainian officials. Over the past two days, Facebook parent company Meta uncovered around 40 fake accounts across Facebook and Instagram operating from Russia and Ukraine that have been targeting Ukrainian military officials and public figures, Meta Platforms said in a statement. Meta pointed the finger at Ghostwriter, a group which has been previously linked to “malicious cyber activities” targeting members of parliament, government officials, politicians, and members of the press and civil society in the EU. Facebook parent Meta called on those residing in Russia or Ukraine to ensure the security of their online accounts.

Speaking of which: Your choice of internet passwords are probably not exactly Fort Knox. As cybersecurity experts predict a global surge in cyberattacks amid the Russia-Ukraine war (as shown above), it may be time to review some of the passwords you use, as mobile security firm Lookout reports that leaked credentials on the dark web often have similar passwords. The list of passcodes includes basic numbers like “123456” and unsophisticated, memorable phrases like “Iloveyou”, CNBC reports.

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

Netflix has dropped a sequel to the popular Vikings series called Vikings: Valhalla. Set 100 years after the events of the History Channel original Vikings, Valhalla looks at the beginning of the end for the age of the Vikings. Many factors end up contributing to the downfall of the civilization such as religious differences, waning influence in Europe, and the iron (often bloody) fist they rule their empire with, writes Polygon. The series does a good job of mapping out the cultural shift over time and introduces a lot of depth in its characters and their understanding of morality and religion. Having said that, the spinoff is just as violent and viscerally intense as the original, with several fight scenes that will make you wince.

⚽ Eastern Company and Ceramica Cleopatra are currently on the field in The Egyptian Premier League as we dispatch the issue. Meanwhile, El Ittihad and Al Gaish will compete at 5:30pm.

There isn’t much going on in the European league tonight: Atalanta and Sampdoria are playing in Serie A at 9:50pm followed closely by the La Liga match between Granada and Cadiz at 10pm.

???? OUT AND ABOUT-

(all times CLT)

The vernacular aesthetic of public space in Cairo is the topic of focus in a panel discussion at Medrar featuring architect and urban planner Omar Nagati and urban researcher and designer Ahmed Zaazaa. The panel will be moderated by Lara El Gibaly and will take place tomorrow from 6-8pm.

The Arts’ Hub is hosting Omar Senada’s exhibition 7 Sins until 12 March.

???? UNDER THE LAMPLIGHT-

How did we get to the era of “Do you even lift, bro?” Sweat: A History of Exercise by Bill Hayes explores movement throughout the ages to trace back how exercise and fitness became a part of everyday life. Today’s fitness industry is valued at upwards of USD 100 bn and has become a modern day obsession that regularly factors into New Year’s Resolutions. While physical activity was always a component of daily human life, it isn’t regularly situated in the historical context and the main players in pushing physical wellness are often overlooked. For example, Girolamo Mercuriale, a Renaissance-era Italian physician aimed singlehandedly to revive the ancient Greek “art of exercising” by publishing his 1569 book De arte gymnastica. Hippocrates, Plato, Galen, Susan B. Anthony, Jack LaLanne, and Jane Fonda are other main characters in the history of fitness.

EARNINGS WATCH-

Prime Holdings widened its losses 132% y-o-y, achieving net losses of EGP 56.6 mn in 2021, compared to EGP 24.5 mn in 2020, according to a financial statement (pdf). The company’s revenues rose to EGP 100.4 mn in 2021, up 27.4% y-o-y.

Arabian Cement returned to the black in 2021, achieving a bottom line of EGP 34.2 mn during the year, compared to losses of EGP 122.8 mn in 2020, according to the company’s earnings (pdf). Sales revenues were essentially flat y-o-y, recording EGP 2.44 bn in 2021.

Egyptian Financial and Industrial (EFIC) saw its bottom line rise 139.5% y-o-y in 2021 to EGP 304.2 mn, according to the company’s financials (pdf). EFIC’s sales increased 100% y-o-y to EGP 2.8 bn.

MARKET ROUNDUP-

The EGX30 fell 0.3% at today’s close on turnover of EGP 799 mn (20.8% below the 90-day average). Foreign investors were net sellers. The index is down 6.8% YTD.

In the green: Fawry (+5.3%), Eastern Company (+2.9%) and e-Finance (+2.0%).

In the red: Orascom Development Egypt (-4.8%), Heliopolis Housing (-4.4%) and Palm Hills Development (-2.8%).

Will the metaverse make us say goodbye to traditional dress codes? As the metaverse continues to expand, and with it the possibilities of what can be done in the digital space, there appears to be a more radical transformation in how we view typical dress codes on the horizon. Just as the shift to WFH and more online meetings translated into more relaxed rules on what to wear while sitting at your desk, the proliferation of digital clothing taking hold could potentially mean never having to get out of your sweats as your more formally dressed avatar attends business meetings on your behalf.

The metaverse could be a space for creative expression — even at work: In the metaverse, where you’ll get to tinker with a whole lot more than choosing between standard button up shirts or dresses, more creative modes of expression than we are traditionally used to in the real world could become more of a norm. “Work has become very fluid. For me, there’s no point in replicating traditional office looks within this new space. With these new communication tools, we can level up our business identity expression too,” Croatian fashion designer Gala Marija Vrbanic tells Quartz.

Already, we’re seeing digital-only fashion brands: There are about 100 digital fashion brands already up and running on virtual fashion boutique DressX and the British Fashion Council last year announced the first ever Fashion Award for Metaverse Design as a category of its 2021 Fashion Awards.

What does this mean for the future of retail? In the future, virtual retail could make it possible for retailers to build one global hub in the metaverse serving mns of customers rather than a shop in every city, predicts the report. Launching goods in the metaverse before launching real-world products allows retailers to reduce costs, but also creates products for digital avatars, in some cases launching both as more customers look to “digital twinning” (matching their avatars to their real-world personas or vice versa). It also allows brands to find different ways to express themselves and for more people to access high fashion.

There’s even the claim that digital clothing could be a more sustainable alternative for designers, giving people greater access to tons of new cutting edge garments from fashion houses around the world, at practically no ecological cost. But these pronouncements don’t seem to hold much water mainly because “virtual clothes cannot be slotted into our closets as functional substitutes,” as Vox notes.

Plenty of clothing brands are already piling into the digital fashion space: Companies like fast fashion chain Forever21 and Nike are betting big on digital retail, creating multi-storey virtual world stores that you can visit with your avatar to buy digital clothing with virtual currency, with gaming platform Roblox acting as a host to many of these stores, reports the Financial Times. Retailers are hoping to get ahead in what JPMorgan estimates is a USD tns industry, with a recent report by the investment bank finding that USD 54 bn worth of virtual goods are sold every year — more than double what is spent on music.

BUT- Consumers don’t appear to be all that keen on the metaverse: Despite the hype circulating around what has been touted as the next logical phase of our online universe, it seems that people aren’t too excited about the metaverse just yet. In a 2021 Forrester survey of over 1k adults only 23% of respondents in the US said that they would “like to spend some time exploring the metaverse,” that figure was down to only 17% in the UK. Responses mostly indicated that people don’t yet understand what the Metaverse is about or that they felt no need for it in their lives — which 27% of US respondents and 36% of those surveyed in the UK said.

Want more on the virtual fashion market? Check out our explainer on digital fashion.