It’s interest rate day. Plus: Egypt debuts near bottom of Deutsche Bank’s living standards index.

It’s interest rate day and the consensus among 12 economists we polled is that the central bank will leave rates on hold, while three of the 14 Reuters polled are calling rate cuts of 50-100 bps. The central bank left rates unchanged at its last meeting in March, after cutting the overnight deposit and lending rates to 15.75% and 16.75% in February.

Across the pond, the Fed is looking set to hold off on easing “for some time,” according to minutes released yesterday of the last meeting of the FOMC, Reuters reports. That position could come under pressure if The Donald appoints Judy Shelton to US Federal Reserve’s board. Shelton is a conservative economist and former Trump campaign advisor who has been a consistent critic of the Fed. The WSJ and the New York Times have the story.

President Abdel Fattah El Sisi is embarking on a tour of several African countries tomorrow, Al Ahram reports. The president is set to visit South Africa, Zambia, Angola, and the Democratic Republic of the Congo.

KUDOS #1- Lifesaving healthcare tech. UNAIDS has recognized Retrago, a needle made locally by the Arab Medical Equipment Company, as a top 20 global healthcare innovation. AMECO CEO Omar El Fata presented Retrago in Geneva yesterday to 100 ministers of health meeting for the World Health Organization’s assembly. After a single use, Retrago automatically retracts the exposed needle to prevent re-usage and the spread of diseases like HIV-AIDS and hepatitis C. See it in action here.

KUDOS #2- CIB is the top Egyptian company on African Business’ list of top 250 companies, which ranks the continent’s publicly listed businesses by market capitalization. CIB was 27th on the list this year, up from 35th last year. In total, 39 Egyptian companies made the 2019 list, five more than last year. Among the Egyptian companies new to the list this year include Cleopatra Hospitals (#161), Samcrete (184), MM Group (244) and Egypt Chemical Industries (or Kima, as it’s better known, 248). A snapshot of CIB’s ranking is here (jpg).

KUDOS #3- The Egyptian Junior Business Association recognized 33 members of the business community at its annual suhour on Monday night. Among those honored were our friends Qalaa Holdings Managing Director Hisham El Khazindar, Edita Chairman Hani Berzi and Elsewedy Electric Chairman Ahmed Elsewedy as well as Al Ahly Real Estate Development Chairman Hussein Sabbour and Bishara Textile Company Founding Partner and designer Marie-Louis Bishara. Also in the spotlight were the founders of startups including Halan, Vezeeta and Wuzzuf, among others. Full details in this emailed statement (pdf).

RANDOM NOTE- “Egyptian-born and Canada-raised actor Mena Massoud” has the as Aladdin in the eponymous Disney live action flick starring Will Smith as Genie. The film opens today in Egypt and tomorrow in the United States. Catch the trailer here (watch, runtime: 2:15).

Artificial intelligence could destroy almost a fifth of jobs across global capital markets as AI, data analytics and automation render them obsolete, research by Opimas has found. The consultancy firm expects the sector’s employee headcount to fall by around 400k to 1.7 mn by 2030. Fund managers will be among the hardest-hit companies, Opimas says, predicting that a third of jobs will be lost in the industry.

Trade-war refugees could find a haven in emerging markets: It wasn’t this way the last time blood ran in the streets, Bloomberg Opinion’s Nir Kaissar argues, but emerging markets could outperform US equities during the next downturn. Why? “The longer-term outlook favors emerging markets … The drivers of future stock returns — earnings growth, dividend yield and change in valuation — all point to higher returns from emerging markets than the US.”

Do boutique firms have it in them to challenge the bulge bracket for tech IPOs? There’s blood in the water and opportunity in the air as tech companies (a) opt for direct listings (see Slack, Spotify) and (b) question, along with their VC backers, the basic competence of the big boys at Goldman Sachs, Morgan Stanley and JPMorgan. What’s prompted the handwringing? IPO flops from Uber and Lyft. The Financial Times has more on the shifting sands.

Want more? Go read one of the most-clicked links in Enterprise this week as Vanity Fair argues that the underwriters were the only ones who made out like bandits on Uber's IPO flop.

What We’re Tracking Today, the Ramadan edition:

A pre-iftar reading list to kill time between your post-workout shower and the breaking of the fast:

• “Why high-class people get away with incompetence,” wherein then “unmerited overconfidence” of the wealthy, privileged and white is interpreted by strangers as competence.
• The Muslims of early America in Aeon argues that Muslims came to America more than a century before Protestants did — “and in great numbers. How was their history forgotten?”
• Get to know the founder of Chobani. The CEO of the US yoghurt giant is an immigrant, the son of semi-nomadic Turkish shepherds and “the anti-CEO,” argues the Financial Times in a Leadership profile. See also his Ted talk from last month The anti-CEO playbook(watch, runtime: 17:17).
• Think Jeff Bezos is rich? Bloomberg does the math and discovers that oil magnate and industrialist John D. Rockefeller, who died in 1937, was almost three times wealthier.

Emerging market investors flee Westeros: “KING’S LANDING — Emerging market investors in the Free Cities of Essos reacted negatively to the appointment of a drunk, whoring hitman as Master of Coin on Monday, sending yields on the Six Kingdom’s debt up sharply ahead of a crucial Iron Bank mission visit.” Hit the link for the follow-on tweets, all by the apparently brilliant Max Seddon, the FT’s Moscow correspondent. H/t to Maram K.

Worse: Bronn is advising a real-life vegan crypto startup. Or at least Jerome Flynn, the actor who portrays him, is. Coindesk has the sordid details.

The most-clicked stories in Enterprise this past week:

• Electricity prices to rise an average of 15% from 1 July, a bit less than expected. (Enterprise)
• Here's how to get stronger after 50. (Outside magazine)
• I raised 2 successful CEOs and a doctor—here’s one of the biggest mistakes I see parents making. (CNBC)
• Why you really shouldn't make important decisions about life or business after 3pm (or visit your doctor at the “Egyptian equivalent” time of, say, after 10pm). (New York Times)
• The resurgent EGP continued to hold its ground against the USD this week. We looked in January at why it was happening. (Enterprise)

RAMADAN PSA- Bank hours are at 9am-2pm for employees; doors are open from 9:30am until 1:30pm for customers. The trading day at the EGX runs 10:00am until 1:30pm.

So, when do we eat? Maghrib is at 6:46pm CLT today in Cairo. You’ll have until 3:16am tomorrow morning to caffeinate / finish your sohour.

WEATHER- It’s going to be really, really hot today. Like 45°C hot, “cooling” to 42°C on Friday and 38°C on Saturday. The mercury is set to be in the 38-40°C all next week, the last full week of Ramadan.

Habemus SWF board members: The Planning Ministry announced yesterday the formation of the board of directors for the planned EGP 200 bn sovereign wealth fund (watch, runtime: 0:58). The board will be headed by Planning Minister Hala El Said as a non-executive chairman and includes representatives from the planning, finance, and investment ministries as well as five independent members with relevant experience. The current lineup of independent members includes:

• Hassan El Khatib, MD for equities at the European Bank for Reconstruction and Development;
• Tarek Tawfik, president of the American Chamber of Commerce in Egypt and deputy chief of the Egyptian Federation of Industries;
• Abbas Fayed, CEO and MD at Bank Audi;
• Neveen El-Tahri, chairwoman of Delta Inspire;
• Yehia Zaki, CEO and director of operations at Dar Al Handasah.

Boss remains unnamed: The ministry has yet to name the fund’s chief executive, which reports earlier this week had indicated will be made public by the end of next month. El Said had said in February that the search committee had sent a shortlist of four candidates to the prime minister’s office for review.

LEGISLATION WATCH- Banks now know how they’ll calculate the cost of investment in treasuries under changes to the tax code: The Official Gazette published yesterday (pdf) two additions to the executive regulations of the Income Tax Act that outline some of the mechanics of the recently-changed accounting treatment for bank and corporate earnings from holdings of government debt. The new articles set an equation for how the “cost of investment” in treasuries is to be calculated. We have been told that the cost of investment will be tax-deductible under the treatment.

Why does it matter? The new treatment required said banks and companies to separately account for their earnings from their holdings of government debt, seeing their effective tax rates rise. Analysts initially said that the new mechanism will result in a c. 37% effective tax rate for a model bank. As a result, the Tax Authority began working with Egyptian banks to look at ways to ease the implementation after reaching an earlier compromise with the Federation of Egyptian Banks to apply the new treatment only on treasuries bought after the amendments were signed into law by President Abdel Fattah El Sisi.

LEGISLATION WATCH- FRA to bring SME financing under 2014 microfinance law: Dedicated SME lenders including finance companies and NGOs could be governed under the 2014 microfinance law (pdf) after the Financial Regulatory Authority’s (FRA) board of directors approved amendments to the legislation, the regulator said in a statement (pdf). The proposed changes would see the inclusion of SMEs in the law’s name and make the necessary amendments to its articles to reflect the addition. This would mean all stipulations aimed at regulating microfinance activity — including articles pertaining to lenders’ technical and risk management capabilities — would apply to SME lenders. The changes will now make their way to the Madbouly Cabinet for review.

What else is new? The draft amendments would introduce a EGP 20 mn capital requirement for SME lenders, and keep the requirement for their microfinance counterparts at EGP 5 mn. They would also allow SME finance providers to be members of a rebranded Egyptian Microfinance Federation. Those providers will be allowed to provide financial leasing services in accordance to the recently-ratified Leasing and Factoring Act.

LEGISLATION WATCH- Market regulator’s board to review draft Insurance Act after Eid break: The Financial Regulatory Authority’s (FRA) board of directors will review the draft Insurance Act following the Eid El Fitr break, FRA boss Mohamed Omran said yesterday, according to Al Mal. The market regulator had completed drafting the new bill in February. Insurance companies that caught a glimpse of the legislation had previously criticized its provisions on minimum capital requirements and reportedly sent comments to the FRA.

Government expects EGP 17 bn revenues from higher electricity prices: The government is expecting to take in some EGP 17 bn worth of additional revenues from raising electricity prices in the fiscal year starting 1 July, local press reported. The Finance Ministry will still support the electricity sector in FY2019-2020 to the tune of EGP 16.5 bn.

If you haven’t heard yet: New electricity prices were announced yesterday, with prices set to rise an average of 15%. Prices for ultra-high voltage electricity used by steel and iron factories will increase by 10% on average in the coming fiscal year, while low voltage prices paid by households, stores, and small and micro businesses will increase by 19% on average. Tap or click here for the full price breakdown for households or here (pdf) for a review of the Sisi administration’s plan to phase out electricity subsidies entirely.

CABINET WATCH- Cabinet has selected the winning consortium for the 6 October-new capital monorail, but hasn’t said who: The Madbouly Cabinet has chosen the winning consortium in a government tender to build two high-speed monorail lines that will link the new administrative capital to 6 October, according to a statement out following cabinet’s weekly meeting. The statement did not announce the name of the winning consortium. As we noted last December, the bidders are believed to have included:

• Military Production Ministry, bidding with Malaysia’s Scomi Group and the UAE’s Arabtec;
• Orascom Construction, bidding with Arab Contractors and Canada’s Bombardier;
• China Railway Construction Corporation (CRCC), bidding with CRRC Corp and local contractors Concorde and Samco.

More news from yesterday’s meeting:

• Reparations for families displaced by the Aswan High Dam: The government has allocated two land plots of a combined size of 13.8k feddans in Aswan to the governorate for allocation to families that have received no reparations since the construction of the Aswan High Dam during the 1960s. Many Nubian families were dislodged from their ancestral land on the banks of Lake Nasser following the dam’s construction.
• Compromise on Sinai’s Nuweiba-Taba coastal strip: The cabinet has allowed the General Authority for Tourism Development to ink 63 usufruct contracts as part of “appropriate legal solutions” for land unlawfully claimed by tourism project operators in the coastal strip between Nuweiba and Taba in Sinai.
• Guidelines for electronic gov’t payments: The cabinet has greenlit a Finance Ministry request to publish a circular to government service providers regarding a recent decision to mandate all government transactions exceeding EGP 500 to be electronic.
• EGP 300 mn for “Decent Life” education support: Religious Endowments Minister Mohamed Gomaa announced allocating EGP 200 mn to “impoverished villages” as part of President Abdel Fattah El Sisi’s Decent Life initiative, as well as EGP 100 mn in funding to the Education Support Fund.

STARTUP WATCH- Cairo-based “foodtech” startup Yumamia has raised USD 1.5 mn in a pre-series A round from Saudi boutique consulting firm Pure Consulting, MENAbytes reports. Proceeds from the round will be used to expand the company’s operations to Saudi and accelerate its growth in Egypt, CEO Belal El Borno said. Starting out as a food delivery platform, Yumamia — which was founded in 2014 — has recently expanded its services to include corporate catering.

EARNINGS WATCH- Orascom Construction’s attributable profit dipped 5% y-o-y in 1Q2019 to USD 30.2 mn compared to USD 31.9 mn a year earlier, the company said in its earnings release (pdf). The bottom line was impacted by increased financing costs, the company said. Revenues decreased by about 7% during the quarter to USD 705.6 mn. Orascom reported a net debt position of USD 78.6 mn as of the end of the quarter “mainly driven by peak execution at several large infrastructure and commercial projects in Egypt.” As of 30 April 2019, net debt decreased to about USD 40 mn though after applying “strict” cash and debt management. Shareholders approved a dividend distribution of USD 0.30 per share (totaling USD 35 million) that will be paid in July 2019.

Backlog: Consolidated backlog excluding its global services arm Besix stood at USD 4.3 bn by end of 1Q2019, in-line with figures from last year. Consolidated new awards increased 44.4% to USD 480.7 mn in 1Q2019. Pro forma backlog including Orascom’s 50% share in Besix increased 9.8% y-o-y in 1Q2019 to USD 7 bn while pro forma new awards totaled USD 857.2 mn during the quarter. “We remain focused on quality new opportunities across our core markets in Egypt, the Middle East and the United States where we continue to see an attractive project pipeline,” said CEO Osama Bishai.

Egypt is ranked 49th out of 55 countries in Deutsche Bank’s survey of global prices and living standards. The index aggregates different “sub-indices that measure certain broad factors that affect overall quality of life in a given location,” including purchasing power, crime and safety, healthcare quality and availability, cost of living, traffic congestion, pollution, and the affordability of housing relative to average income. This is the first year Egypt has been included in the index.

Egypt falls at the bottom of the ranking for purchasing power, healthcare, and pollution, but fares quite well in terms of cost of living, coming in 4th overall. Our notorious commutes are ranked 44th overall, while we are listed as 39th in terms of safety. When it comes to income and expenses, the average monthly salary in Egypt has grown 16% y-o-y to USD 206, which is around 4% of the average in New York City. Egypt has the lowest average monthly income in the index.

What’s cheaper in Cairo than New York? Most things: Renting a mid-range two-bedroom apartment will cost you 10% of the amount it would in New York, and monthly public transport tickets are less than a third of what they cost across the pond. A liter of gas in Cairo costs around half of what it does in the Big Apple, despite that figure rising a cumulative 92% over the past five years, relative to New York. Basic taxi tariffs, cinema tickets, monthly gym memberships, men’s haircuts, Marlboro cigarettes, and — unsurprisingly — some forms of labor are all also cheaper. Even outings are significantly less costly here, whether it’s for ethanolic beverages or an average dinner at neighborhood pubs (although, to be fair, we’re not entirely sure what qualifies in Cairo as a “neighborhood pub”).

What’s more expensive in our fair city? Bourgeois things. Clothing at foreign outlets such as Zara, an annual subscription to the Economist, weekend getaways, and the iPhone X are all a fair bit pricier in our neck of the woods.

Trade tensions are starting to take their toll on emerging markets: Emerging markets are beginning to feel the strain as escalating trade tensions cause global demand to weaken further, Hung Tran, non-resident senior fellow at the Atlantic Council, writes in the Financial Times. Many EM economies are dependent on exporting commodities and low-end manufacturing products to places like China — which becomes a problem when a major buyer such as China starts to reduce its orders. As the weight of Trump’s tariffs cause China’s exports to the US to slide, the falling Chinese demand for EM goods and commodities has accelerated. “Increasingly, EM countries are suffering the collateral damage of the trade war,” Tran says, cautioning that the current headwinds are unlikely to dissipate any time soon.

Funds are beginning to dump EM assets: Since the collapse of US-China trade talks earlier this month, EM equities have fallen more than 8%, while EM equity exchange-traded funds have seen outflows of USD 10 bn over the past two weeks. Major investment banks such as Goldman Sachs and JPMorgan have scaled back their exposure to EM assets as uncertainties over global trade continue to mount.

But it could be worse: The IMF is currently forecasting emerging markets to grow by 4.4% and emerging Asian economies by 6.3% this year. While these rates are the slowest since 2015 and 2001 respectively, Institute of International Finance economist Sergi Lanau, who predicts “roughly stable growth” for EMs this year, reminds us this is still an improvement on what economists were predicting earlier this year. “It is very different from what people were contemplating a couple of months ago, when the stories sounded a lot like the risk of global recession,” he told the FT.

The news slowdown is still hitting the foreign press, leaving Egypt with scant digital ink. A few stories worth a quick read nonetheless:

• Ancient Egyptians were the inspiration for a certain kind of ethanolic beverage Israeli scientists are reproducing 5,000 years later, Bloomberg reports.
• Ramadan vibes: Communal iftars in Ramadan bring together neighborhoods and villages across Egypt, reports Arab News.

Egypt’s three main state-run dailies are all giving us different headlines this morning. Al Ahram’s front page is all about Egypt fighting security threats, while Al Gomhuria highlights state efforts to support vulnerable communities and education. Al Akhbar is more concerned with diplomatic issues, highlighting President Abdel Fattah El Sisi’s planned tour of African countries, which kicks off tomorrow.

Entrepreneurs do a bad job at diversifying their investment portfolios: The same qualities that helped successful entrepreneurs build their businesses seem to prevent them from structuring a diversified investment portfolio, Lucy Warwick-Ching writes in the FT. The tenacity of entrepreneurs who believe in “making” their own luck through persistence and risk management in the face of overwhelming odds often find it hard to trust others with their hard-earned wealth — and they too often fail to embrace diversification as a risk-management tool, opting instead to remain invested in the assets and sectors with which they’re already familiar.

Egypt has signed a cooperation framework agreement with Cyprus and Greece for the planned power linkage project between the three countries through the Greek island of Crete, according to a Cabinet statement. The linkage will see the three countries exchange up to 2 GW of power. Feasibility studies are currently underway and could take up to one year to complete, according to Electricity Minister Mohamed Shaker.

The National Food Safety Authority (NFSA) has compiled a whitelist of 112 food and dietary supplement manufacturers and suppliers under its supervision to ensure they meet food safety guidelines, authority head Hussein Mansour said, according to Al Mal. The list comprises 71 exporting food companies, including high-profile manufacturers Edita, Juhayna, Domty, Nestle, Greenland, Hero, and Halwani Bros. It also greenlights 20 dietary supplements producers — including Eva Pharma, Memphis Pharma and EIPICO — as well as 21 accredited commodity suppliers. The NFSA was established after a parliamentary vote in 2017, and assumed the role of 17 formerly existing agencies overseeing food safety in the country.

The EU has lifted additional import controls it placed on Egyptian guavas, according to an Agriculture Ministry statement. The move came at the recommendation of the European Commission, following efforts from the Egyptian government to improve the quality of produce exports.

The Public Enterprises Ministry announced a new shipping line from Ain Sokhna to East Africa that would serve six unspecified countries, according to a ministry statement. The line will go into service in October 2020 and focus on transporting goods and providing logistical services for importers and exporters. The ministry is also reconsidering establishing a trade route to Europe via Turkey.

Telecom Egypt is only studying setting up a real estate arm and has not made a decision yet, the company said in an EGX disclosure (pdf). CEO Adel Hamed told Youm7 earlier this week that the company has hired a firm to complete a study on the company’s land portfolio to potentially set up a real estate arm.

Shell Egypt signed yesterday eight cooperation agreements with the Egyptian General Petroleum Corporation (EGPC) to launch an HR development program at Badr Petroleum Company, according to an Oil Ministry statement (pdf).

National football team coach Javier Aguirre has named his 25-man provisional squad representing Egypt at the 2019 African Cup of Nations, reports King Fut. AFCON will kick off with Egypt vs Zimbabwe on 21 June.

My Morning Routine looks each week at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Ayman Ismail, founder and director of the AUC Venture Lab, Egypt’s first university-based startup incubator and accelerator.

My name is Ayman Ismail. I’m an academic, educator, entrepreneur, consultant, researcher, news junkie and mentor. Maybe the thing that really defines me is that I’ve never been able to do just one single thing. I’m passionate about working with people who get things done on the ground, or who are interested in learning or doing things.

I have several day jobs. I teach entrepreneurship and entrepreneurial finance at AUC. In that capacity, I’m often asked whether you can really teach people to be entrepreneurs. My answer is that being an entrepreneur is a mixture of knowledge, skills and behavior. I can teach things that require knowledge — such as how to start and manage a business — and I can teach new skills. Behavior can’t be taught, but I can raise people’s awareness about their own behavior.

I also do a lot of research on entrepreneurship, social entrepreneurship, economic development, and the policies that enable these things. I led the creation of the Global Entrepreneurship Monitor (GEM) report, for example. I’m currently working with the Planning Ministry on an input paper for Egypt’s sustainable development strategy, trying to incorporate some ideas about entrepreneurship.

My hands-on work with entrepreneurs takes place through the AUC Venture Lab. Much of my work involves leading, developing and designing the program, but a lot of it is also about mentoring, discussion, networking and providing support to individual entrepreneurs and startups. I also work a lot with the social entrepreneurs of Nahdat El Mahrousa, who run businesses driven by social issues.

I’m not a morning person. My brain is more wired and alert at night, so that’s when most of my new ideas come to me. When I’m at AUC, if I’m not teaching, I’m talking with students or entrepreneurs, bouncing ideas around with them — the chance to engage with someone and brainstorm is the most exciting time of the day. That joint learning and exploration is probably the thing I love the most about what I do.

So when I’m working on anything that requires a lot of quiet focus, it’s usually late at night. The best time for me to do my long, reflective thinking is when I walk my dog late at night, when we’re moving and the dog decides where we’re going. It’s a good chance to just think and reflect.

I spend a lot of time following the news. There are two big stories that I’ve been following and thinking about a lot for the past few years and days, respectively: Trump and Huawei. I see the story of Trump as epitomizing the wave of populism currently sweeping the world, and our future in the next few decades will depend on how this wave continues moving. Similarly, the Huawei story may turn out to be a key milestone in the whole globalization narrative. It could change the course of our development, away from the global platforms we’ve been working so hard to create, with implications for technology and industrial policy.

The AUC Venture Lab has been running for six years, and in that time we’ve supported over 150 companies. When I came to AUC in 2011, entrepreneurship was really nascent in Egypt, and my mandate was to expand the entrepreneurship footprint.

Half of the companies we’ve supported have been funded through angel investment or venture capital, with the total investments approaching EGP 1 bn. That figure is admittedly skewed by the success of a star: Swvl. But this is typical in the world of startups. We’ve also mobilized hundreds of mentors, faculty members, students and partners to be engaged with us and learn more about entrepreneurship. And we’ve established a program — the first of its kind in the region — specifically to support fintech. It’s currently in its fourth year.

What do I do in my free time? Honestly, I’m not sure what free time means. I love reading, and I used to read a lot, but nowadays I read a lot of different things in a slightly fragmented way. The luxury of reading a long novel doesn’t really exist anymore.

One person I find very inspiring on a business and a personal level is Jack Ma, co-founder of Alibaba. He’s very interesting, grounded, with quite a bit of sarcasm in the way he speaks. He’s passionate about what he does and he knows which values he cares about. At the same time, he’s very adaptive.

Staying organized and on top of things is a challenge. We have a serious communication overload, and with that comes fragmentation. You get hundreds of messages every day on lots of different channels, and just managing all of these could be a full time job. The challenge and the most important thing is to figure out what your absolutely essential priorities are, and to focus on them, even if there are other things you would also really like to be involved in. Perhaps the most difficult thing to master is not feeling guilty about the things you aren’t able to do. You need to accept that you just won’t be able to do everything.