Thursday, 24 September 2020

WFH Survey: More of you are spending time in the office under hybrid work policies


What We’re Tracking Today

Good morning, friends, and welcome to interest rate day, where the consensus is that the Central Bank of Egypt will leave rates on hold when its Monetary Policy Committee meets later today. All 11 economists and analysts surveyed in our poll said rates will likely remain unchanged as the central bank looks to support the EGP and protect the carry trade. A subsequent Reuters poll suggested much the same.

The IMF will be back in town at the end of the year: An IMF delegation will visit Egypt in December to conduct the first of two reviews ahead of disbursing the second USD 3.2 bn second tranche of the one-year, emergency USD 5.2 bn stand-by loan agreed earlier this year, Finance Minister Mohamed Maait told Al Shorouk. Egypt onboarded the first, USD 2 bn tranche of the loan in July to help cushion the economic fallout of covid-19.

EFG Hermes’ virtual investor conference is on its fourth day, with more than 650 institutional investors with aggregate AUM north of USD 17 tn connecting with top listed companies to chew over how things look in frontier and emerging markets. The conference runs until next Thursday, 1 October. You can visit the conference website here.

US stocks plunged yesterday for the fifth time in six sessions amid signs business activity is cooling and that lawmakers aren’t going to roll out more stimulus. The S&P and the Nasdaq both fell more than 2%. Asian shares are down in early trading this morning, and futures point to more of the same in Europe later this morning.

VACCINE WATCH- We’ll learn more about Russia’s Sputnik V vaccine in the coming days when Russia’s sovereign wealth fund holds a conference on the vaccine, the date of which was not specified, Al Mal reports. Egypt is in talks with Moscow to get its hands on the vaccine and is among the countries expected to take part in phase 3 clinical trials. Pfizer is about to start phase three trials of its vaccine, applying more extensive data analysis, perhaps paving the way for regulatory approval soon after October, Reuters reports. And phase three trials of Johnson & Johnson’s single-shot vaccine started yesterday, the company said in a statement.

There’s one big caveat to all of this talk of phase three trials: Kids aren’t covered, according to the New York Times, which writes that a vaccine for children may not arrive before fall 2021, saying that “no trials have yet begun in the United States to determine whether these vaccines are safe and effective for children.” The best primer on covid vaccines: How close is a coronavirus vaccine?

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The Health Ministry reported 121 new covid-19 infections yesterday, up from 113 the day before. Egypt has now disclosed a total of 102,375 confirmed cases of covid-19. The ministry also reported 16 new deaths, bringing the country’s total death toll to 5,822. We now have a total of 91,843 confirmed cases that have fully recovered.

Egypt’s tourism rebound is outperforming its regional peers and the country has contained covid-19 cases among foreign visitors “quite well,” Tourism Minister Khaled El Enany said in an interview with Business Media Georgia (watch, runtime 6:01). Egypt has seen some 250k tourists visit Sharm El Sheikh and Hurghada since resuming flights in July, and as of late August, only a single suspected case of the virus had been detected among foreign tourists.

France will allow flights to Egypt’s coastal cities to resume in October, El Enany said in a statement yesterday.

The Education Ministry has extended until 1 October the deadline for students to transfer between schools, Youm7 reports, citing a ministry statement. The new academic year for public schools begins on 17 October and runs until 24 June 2021, with the mid-year break from 6-18 February 2021. The ministry has also distributed safety plans to some 60k schools, in collaboration with the health ministry, with guidelines on classroom capacity and distancing, Mubasher reports, citing Education Minister Tarek Shawki, who spoke during a virtual session of the MENA Innovation and Technology Transfer (MITT) Summit.

A resurgence in covid-19 cases is threatening to dent the Eurozone’s economic recovery, with the block’s flash PMI data (pdf) for September falling to 50.1, down from 51.9 in August. The EU’s composite purchasing managers index aggregates activity in the services and manufacturing sectors. The reading — which remains in expansionary territory despite the dip — suggests the “initial rebound” after the lifting of lockdown measures is not here to stay, says Bloomberg. Governments have reintroduced some lockdown measures after cases began rising in recent weeks.

The world’s poorest countries could be getting tailored debt restructuring plans from large private lenders to resolve “fundamental solvency concerns,” Reuters reported, citing a letter sent by the Institute of International (IIF) to G20 governments. A one-size-fits-all debt relief package would make it harder for riskier borrowers to access capital markets, making a case-by-case review more appropriate, the group said. This comes as creditors from around the world are expected to extend a debt relief initiative first announced in April, and from which north of 70 of the poorest countries have benefited.

Around our region:

  • The UAE is facing a deeper-than-expected economic contraction this year: The country’s central bank now projects GDP to shrink 5.2%, down from its previous 3.6% forecast, Bloomberg reports.
  • Kuwait downgraded: A worsening liquidity crunch in Kuwait and a delay in legal authorization to issue new debt led to the country’s first-ever credit rating downgrade from Moody’s, the ratings agency said in a statement.
  • Abu Dhabi-based KBBO Group — previously the largest shareholder in embattled NMC Healthcare — has a USD 2 bn debt pile it’s looking to restructure. The group has tapped Bruno Navarro as its chief restructuring officer to get the job done, Bloomberg reports, citing unnamed sources.


US ELECTION WATCH- Donald Trump refused to commit to a peaceful transfer of power in the event he loses the 3 November election to Joe Biden, telling reporters at the White House “We’re going to have to see what happens. The story is front-page news for the Financial Times and Reuters. Little wonder the election is being priced as “the worst event risk” in the history of the US volatility index as traders increasingly expect “some pretty incredible fireworks” in the aftermath, Bloomberg writes.

Enterprise+: Last Night’s Talk Shows

President Abdel Fattah El-Sisi’s meeting with eastern Libyan leader Khalifa Haftar dominated the coverage last night. Al Hayah Al Youm’s Mohamed Sherdy phoned advisor to the Tobruk-based House of Representatives Fathi Al Marimi, who said that the meeting with Haftar and House Speaker Aguila Saleh came ahead of upcoming negotiations between the UN-recognized government in Tripoli and Haftar’s eastern forces. Top of the priority list in the upcoming talks is dismantling armed militias and expelling foreign fighters from the country, Al Marimi said. The talks are expected to lead to a political agreement, creating a unified government, a presidential council and a national Libyan army, prior to nationwide elections, he said (watch, runtime: 6:02). Masaa DMC’s Ramy Radwan also covered the story (watch, runtime: 4:42).

Election authority to announce parliamentary candidates Sunday: Radwan highlighted that the National Election Authority would announce on Sunday the candidates standing in upcoming parliamentary elections. Radwan noted that the deadline for submitting applications is Saturday (watch, runtime: 4:09). Sherdy, meanwhile, reviewed the final names of the Youth Parties and Politicians Coordination Committee who will be on the ballot as part of the pro-government National List for Egypt (watch, runtime: 2:33).

Attempted Tora prison break: Yahduth Fi Misr's Sherif Amer highlighted the attempted prison break by several inmates at Tora prison yesterday. Four prisoners and three members of the police service were killed during the attempt, security forces said (watch, runtime: 1:30). Radwan also covered the story (watch, runtime: 1:48).

Flood victims could be in for compensation: Ala Mas’ouleety’s Ahmed Moussa phoned Local Development Ministry spokesperson Khaled Qassem, who said that the ministry is discussing with the Social Solidarity Ministry and local governors handing out compensation to those who have been affected by the floods. Of course, Qassem couldn’t resist talking about building violations, telling Moussa that there have been almost 1.4 mn requests to settle building violations, 210k of which have been settled. At 161k, Menoufia Governorate has the largest number of reconciliation requests, while Cairo has collected the most in fines at more than EGP 930 mn, Qassem said (watch, runtime: 9:47).

Could the gov’t agree to extend the reconciliation deadline? Moussa phoned the head of the parliamentary Local Development Committee, Ahmed Al Sigini, who said that there have been 1.2 mn settlement requests since the cabinet decided to slash the fines. He raised the possibility of the government agreeing to extend the deadline past 30 September if the number of requests doesn’t reach 2 mn (watch, runtime: 12:10).

Speed Round

SURVEY- More of Egypt’s private sector is implementing a hybrid work policy — but most don’t have a concrete expectation of when that could change again. We surveyed EGX-listed companies, multinationals, and small businesses to gauge how their work from home policies have shifted over the past few months. We also wanted to get a feel for whether these policies could change again in the coming weeks and months with the potential of a second wave of covid-19.

Over the past two months, most have begun shifting to more days spent at the office. In our last survey in June, the majority of those we spoke with were still relying as much as possible on remote work. Now, most businesses are either ramping up the number of employees allowed at the office — or having all staff spend more days together in the workplace.

Of the 12 companies we surveyed, only three said they are not requiring their employees to work from the office. Some who have a hybrid work policy in place to give their employees the option of working from the office if they want. Procter & Gamble recommends that their employees remain at home, but has now opened the office for whoever wants to go in. Nestlé says its offices have reopened in the past few days and a schedule has been put in place for a rotation. The schedule doesn’t require employees to go in, but is meant to prevent too many employees from opting to go to the office at the same time. Meanwhile, data analytics startup Arqam has set two days a week for its team to work from the office but also says these days are optional.

As lockdown measures have eased, workplace capacity limits are also up: One of the country’s largest banks (which spoke on condition it not be named) has slightly increased the percentage of employees at its offices, but still has limites on footfall at branches and the number of branch staff who need to show up each day; those measures are unchanged from July. At UNDP, senior staff members are now on a two-week rotation schedule, while the rest of the staff are called into the office on an as-needed basis.

For others with a hybrid system, staff have no option but to be at their desks on in-office days. This is the case for boutique business development firm Ahead of the Curve, whose employees are now at their desks in the office three days per week.

A handful of businesses have made a complete return to the office mandatory for its employees. Among them: Al Ismaelia for Real Estate Development, where its relatively small team now works at full capacity from their office five days a week; Rameda Pharma, where its entire team returned to the office last month; and Al Tamimi & Co., which said earlier this month it is also back to working from the office at full capacity.

The outlook on whether businesses will have to change these policies again is largely unclear. Nestlé, EFG Hermes, and P&G said they are largely in “wait and see” mode and don’t yet have a plan for a potential second wave of cases or what that would mean for their work policies. They do, however, review their policies on a regular basis to adjust them as the situation unfolds.

INTERNATIONAL CONTEXT- Wall Street is also trickling back to the office, the New York Times reports in Dust off desks and boot up terminals, writing that the transition back to the office has been “shambolic” for the financial industry.

We’re edging toward clarity on what a national charging network for EVs will look like — and how much it will cost you to power up your new electric vehicle. Regulations that set the licensing and pricing framework for electric bus and vehicle charging and prevent electricity distributors from selling directly to EV users are currently under review by cabinet, according to documents obtained by the domestic press. Under the regs, only licensed operators and investors will be allowed to run charging stations, provided they sign long-term contracts with electricity companies. Those contracts will specify the price at which the operators can purchase electricity from distributors, as well as set profit margins when stations sell to customers. Operators looking to sign contracts will also need to specify the number and specifications of charging stations and docks they’re looking to supply.

The prices for charging EVs will be set each year by the Egyptian Electricity Utility and Consumer Protection Regulatory Agency (Egyptera), which will also be in charge of handing out licenses for charging stations. Egyptera will be giving one-year licenses to interested operators as part of an early “transitional” period. When the provisional licenses expire, the operator will be eligible for five-year licenses that will renew automatically upon expiry, and are expected to cost EGP 50k, the press said without clarifying if this amount is for the provisional or full license. A senior Egyptera official declined Enterprise’s request to comment on the tariff structure.

The preliminary tariff framework Egyptera has proposed for the first year of their rollout is as follows, according to the press:

  • The Cairo and Alexandria public transport authorities will get a special tariff to encourage the use of electric buses: EGP 1 per kWh for medium-voltage charging and EGP 1.21 for low-voltage.
  • Commercial EV station operators will be charged EGP 1.21 per kWh. Those in areas exempt from land use fees will then be allowed to sell to customers at EGP 1.69, while those who pay land use fees will sell to customers at up to EGP 1.89.
  • Operators using faster charges will be allowed to charge a higher premium. Those operators will also pay distributors EGP 1.21 per kWh, but be permitted to price a kWh of charging at EGP 3.75 when selling to end-users.
  • Personal EV owners charging at home will pay typical electricity costs for household consumption.

Background: A new regulatory framework designed to steer investment into EVs has been in the works since last year. The most recent innovation came last week, when a presidential decree expanded the list of importers eligible for customs breaks to include companies involved in the manufacture and assembly of EVs. Public Enterprises Minister Hisham Tawfik earlier this year said the government hopes to build 1k fast charging stations over the next three years, adding that the private sector will be given the chance to build more. Infinity Solar subsidiary Infinity-E and EV specialized outfit Revolta Egypt are among the private sector players that have either already set up or expressed interest in setting EV charging docks.

We took a close look at whether Egypt is ready for EVs in a recent edition of Hardhat, our weekly probe into all things infrastructure.

INTERNATIONAL CONTEXT- California has banned the sale of petrol-powered cars starting in 2035, at which time any new car sold needs to be a zero-emission vehicle, the Wall Street Journal reports.


Egypt has healthy M&A and IPO pipelines that could materialize once markets stabilize post-covid, Renaissance Capital said yesterday. The main source of planned IPOs is the state privatization program, which includes two dozen candidates that are slated either for IPOs or stake sales by already-listed companies. Banque du Caire and e-Finance’s planned EGX debuts are “two of the most anticipated” IPOs currently in the pipeline, RenCap notes. Private sector companies, including Ebtikar, Raya’s NBFS arm Aman, and Galina Holding, are also looking at listing on the bourse in early 2021.

Why we’re seeing an M&A wave in the banking sector: The Central Bank of Egypt hasn’t been issuing new banking licenses for years, which means the only way into the sector is by acquiring existing licensed banks, RenCap notes. Recently, there have been more windows for acquisitions as international banks, particularly Lebanese lenders such as Bank Audi and Blom Bank, have been looking to exit the country because of issues in their home countries. These windows have proven particularly attractive to GCC banks, which are looking to “enter or scale up in Egypt.” For example, Bahrain’s Bank ABC is currently in early talks to acquire Blom. RenCap also points to government entities, such as the National Investment Bank, selling off their stakes in banks and “a long tail off sub-scale private banks” as other primary factors for the uptick in the sector’s M&A activity.

M&A WATCH- IFC offloads 9.75% stake in Alexbank: The International Finance Corporation has sold its 9.75% stake in Bank of Alexandria (Alexbank) to the bank’s parent, Italian banking group Intesa Sanpaolo, in a USD 161 mn transaction, the local press reports, quoting unnamed sources. The agreement brings Intesa’s stake in Alexbank back to 80% — the same stake it had bought in a 2006 transaction that made it Alexbank’s largest shareholder as the institution was privatized. Intesa had later sold a 9.75% stake to the IFC, which it is now buying back.

M&A WATCH- EBRD, CDC also in the running to acquire Egypt’s Adwia? Pharma manufacturer Adwia is still up for grabs, as the European Bank for Reconstruction and Development (EBRD) and the UK development finance institution CDC have reportedly expressed interest in taking a stake, reports Al Mal. An EBRD representative declined Enterprise’s request for comment, saying the bank does not comment on investments still under discussion.Chairman Hossam taher told the local press yesterday that UK private equity outfit DPI had finalized an agreement to acquire Adwia for USD 200 mn. The two restarted talks and now “see eye-to-eye” on the valuation after Adwia rejected DPI’s original offer to acquire the company for USD 150 mn, he said. Adwia Chairman had said that DPI’s acquisition could be complete within three weeks.

Advisors: Zaki Hashem & Partners is acting as legal counsel to Adwia, while Matouk Bassiouny & Hennawy is advising DPI.

Orascom Financial still working on plans for subsidiaries + investments, including potential sell-down of stake in Sarwa: Newly formed Orascom Financial Holding (OFH) is planning to bring to its shareholders a strategy for its subsidiaries and holdings within a few months’ time, but has not yet made any concrete decisions, Onsi Naguib Sawiris told Enterprise yesterday. A Hapi Journal article out yesterday had suggested that OFH is inclined to only have one EGX-listed company in its portfolio. After its horizontal demerger from Orascom Investment Holding (OIH), OFH’s portfolio will include a 74.5% stake in Beltone Financial and a 28.8% non-controlling stake in Sarwa Capital. “For now it’s status quo and we’re not making any changes yet,” Sawiris told us.

One option on the table (among many): OFH is considering a sell-down of its stake in consumer- and structured-finance player Sarwa to raise the percentage of freefloat shares. The company is looking at other options to “reduce inefficiencies” in its portfolio, Sawiris said, without giving further details. OFH’s key priority is to complete its demerger from OIH, which Sawiris says should wrap by the end of the year. OIH’s general assembly is set to vote on the demerger on 19 October, according to a disclosure to the bourse (pdf).

Background: Orascom Investment Holding’s board of directors signed off in June on the horizontal demerger with the aim of separating the company’s financial services operations to allow shareholders to make more targeted investments. The split was made official by the FRA earlier this month. OIH will remain listed on the EGX and will retain all of its investments in its eight subsidiaries, including Orascom Telecom Ventures, O Capital, and Orascom Pyramids, along with its sister Cheo Joint Venture Technology company.

A blockbuster gold discovery may have killed Sawiris’ chances of acquiring Shalateen Mining: Naguib Sawiris’ interest in a majority stake in state-owned Shalateen Mining have reportedly hit a roadblock after the company made a blockbuster gold discovery in the Eastern Desert. Oil Ministry sources told Cairo24 that some of Shalateen’s shareholders rejected the La Mancha owner’s advances after finding gold reserves potentially holding more than 1 mn ounces, bringing talks with the government to a standstill. More than USD 1 bn could be invested in the deposit over the next 10 years.

Apparently the decision to end the talks was mutual: A source from La Mancha said the decision to end the talks was mutual, saying only, “We are now studying some options and other investment [openings] in African countries. Naguib sounded a similar note, telling Al Arabiya that he intends to increase his investments in gold mining.

La Mancha among bidders in Egypt’s gold mining tender: La Mancha, along with Canadian mining firm Barrick Gold and Egypt-focused Centamin, were among the companies to submit bids in the government’s gold exploration tender, which closed last week. The Egyptian Mineral Resources Authority’s (EMRA) had launched in March the bid for the rights to mine 56k sqkm in the Eastern Desert. Barrick, La Mancha, Centamin, and several other companies are bidding on two-year renewable exploration licenses for 320 blocks under the block-based concession system.

TMG sukuk to be listed on EGX on Sunday: Talaat Moustafa Group’s EGP 2 bn sukuk issuance will be listed on the EGX after the exchange’s securities registration committee yesterday gave its approval, the bourse said in a disclosure on Wednesday. The sukuk will be listed on the exchange to be publicly-traded on Sunday, 27 September, it said.

About the offering: The first of its kind in Egypt, the offering was issued in April by TMG subsidiary the Arab Company for Projects and Urban Development, and was 2.5x oversubscribed during the private placement, with Banque Misr, Banque du Caire and Suez Canal Bank snapping up 97.25% of the issuance. Certificates carry a 57-month tenor, maturing at the end of 2024, and each will have a nominal value of EGP 100. TMG had announced plans earlier this year to launch a three-year EGP 4.5-5 bn sukuk program to finance the company’s real estate leasing projects.

IN OTHER INDUSTRY NEWS- Amendments to the Sukuk Act have been completed by the Finance Ministry and sent to the cabinet for approval, Finance Minister Mohamed Maait said on Tuesday, without elaborating. The legislation is on track to be sent to parliament in November, Maait said. The bill, which when passed will enable the government to begin issuing sovereign sukuk, was drafted back in February.

LEGISLATION WATCH- The private sector’s role in the new universal healthcare system will be clarified in a new bill: The role of the private sector in the Sisi administration’s new universal healthcare system will be clarified in legislative amendments to be submitted to the cabinet by the Health Ministry, head of the advisory committee for the Universal Healthcare Act Ehab Aboul Magd said yesterday, Amwal Al Ghad reports. Proposals to amend 40 articles in the Universal Healthcare Act would clarify how private sector players price their services and settle with the government under the universal healthcare system being rolled out across the country over the next 12 years. Ministry officials said last year that private insurers would have to abide by a government pricing scheme but stopped short of announcing what prices providers would be able to charge.

New accounting standards pushed to next year: The introduction of three Egyptian Accounting Standards (EAS) to bring parts of the EAS in line with international reporting standards and new Egyptian legislation has been postponed until 1 January 2021, the Financial Regulatory Authority said in an EGX filing (pdf) earlier this week. EAS 47 (which affects how accountants treat financial instruments), EAS 48 (which addresses revenue sharing contracts) and EAS 49 (which governs leasing contracts) were supposed to have been implemented this year, but have been delayed due to the covid-19 pandemic, he said.

A stranded oil tanker off the coast of Yemen poses an existential threat to the Red Sea: An environmental catastrophe could be imminent if a stranded oil tanker off Yemen’s Red Sea coast remains neglected, the Council of Arab Ministers for Environmental Affairs warned in a meeting earlier this week, according to an Environment Ministry statement. The Red Sea’s marine ecosystems would be seriously affected if the Safer tanker were to leak its 1.1 mn tonnes of oil, said Environment Minister Yasmine Fouad. The minister has called on the UN and the International Maritime Organization to secure the inspection and maintenance of the decaying tanker, which has been cut off from regular maintenance work since 2015 due to Yemen’s civil war.

MOVES- CIB has asked Jay-Michael Baslow (LinkedIn) to join its board of directors as a non-executive, independent member, the bank said. Baslow, a veteran executive with 30 years’ experience, joined JPMorgan in 2003 where he became a managing director in 2012. He served as head of MENA, head of EMEA emerging markets and chief risk officer between 2012 and 2019.


Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Egypt in the News

Leading the conversation on Egypt this morning: Three Egyptian police officers were killed during an attempted prison break by four men sentenced to death in terror-related cases. All four convicts were killed during their attempt to flee (Associated Press | Reuters).


  • The Carnegie Endowment argues that the government’s economic policies are transferring wealth from the lower and middle classes to the business elite, driving almost 10 mn Egyptians into poverty over the past five years.
  • Mada Masr editor-in-chief Lina Attalah has made Time’s 100 most influential people 2020 list.
  • GERD in cyberspace: Foreign Policy reports that the tussle over the Grand Ethiopian Renaissance Dam is spilling over into cyberspace
  • Al Monitor reports on the call by MP John Talaat to censor Netflix over the controversial film “Cuties.”
  • Reuters reports that the Nour Wal Amal chamber orchestra returns on Sunday with its first performance since the covid outbreak began; the ensemble is made up entirely of visually-impaired women.

Diplomacy + Foreign Trade

Topping diplomatic coverage this morning: Fourteen new ambassadors — including from Israel, Sudan, and Ethiopia — are now officially accredited in Egypt after presenting their credentials to President Abdel Fattah El Sisi yesterday, Ittihadiya said. Israel’s Amira Oron — who was tapped for the position in 2018 but only got approval from Prime Minister Benjamin Netanyahu earlier this year — is the first full-time envoy to Cairo in more than 18 months. Meanwhile, the appointment of Markos Tekle Rike, Ethiopia’s new ambassador, and Mohamed Elias Mohamed as Sudan’s new envoy comes as ongoing negotiations over the Grand Ethiopian Renaissance Dam remain at an impasse.

Elsewhere on the diplomatic front: President Abdel Fattah El Sisi has been invited to attend the signing in October of a historic peace accord between the Sudanese government and coalition of rebel groups; Foreign Minister Sameh Shoukry met with his Jordanian counterpart Ayman Safadi in Amman to discuss Palestine; and Egypt and Italy are discussing establishing a roll on/roll off shipping route for Egyptian agricultural exports heading to Europe.


Jaz to inaugurate EGP 700 mn Steigenberger hotel in Soma Bay by December

Travco subsidiary Jaz is inaugurating a EGP 700 mn Steigenberger-branded hotel in Soma Bay by December, Chairman Alaa Akel told Al Mal. The hotel was initially slated to open in September.

Banking + Finance

GB Auto’s Drive gets FRA nod for consumer finance license

GB Auto’s car finance arm Drive has received preliminary approval from the Financial Regulatory Authority for a full consumer financing license, according to an emailed press release (pdf). The license will allow Drive to offer consumer finance services beyond the core car finance business for which it is known. GB Auto also has players in non-banking financial services segments including factoring, microfinance, securitization, fleet leasing and e-payments.

Italian bank seeks gov’t guarantee for railway loan

An unnamed Italian bank has requested that the oil or transport ministry issue a letter of guarantee for a potential USD 300 mn loan for a consortium working on the Abu Tartour-Qena freight railway line, Al Mal reports, citing unnamed sources in the know. The cabinet will look into the bank’s request at an upcoming meeting, the sources said. Elsewedy Electric, Saipem and Salcef, have been contracted for the project, which involves reconstructing the railway cargo line and adding a passenger extension from Hurghada to Safaga.

Legislation + Policy

FinMIn to set up department to manage tax processes for e-commerce

A department dedicated to overseeing the tax treatment of e-commerce firms will be set up by the Finance Ministry and begin operating next year, minister Mohamed Maait told CNBC Arabia, without elaborating.

My Morning Routine

Karim Khashaba, CEO of Yodawy: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions for fun. Speaking to us this week is Karim Khashaba, CEO of Yodawy, Egypt’s largest pharmacy delivery app.

I'm Karim Khashaba, CEO of Yodawy, a pharmacy benefits platform that launched in 2018 aiming to restructure the medication supply chain in Egypt. We work on 1) building a medication ordering and delivery experience for our customers; and 2) rewiring the medical ecosystem by connecting medical providers and insurance companies.

I’m a family man. My morning routine has always involved waking around 6am. Before covid-19, I would start the day by making breakfast and taking my five-year-old son to the bus. Now his schedule has shifted and he’s doing online classes, so I take care of him until his classes begin while my wife looks after our newborn.

But in the mornings I also take some time for myself, doing some light, news-focused reading over a coffee … or two or three. I start with Enterprise and the BBC, and then Crunchbase and other startup forums. I usually do an hour of sport every morning as well. During lockdown I went running and lifted weights, but now that things are opening up I usually play squash. Then my workday usually starts between 9 and 10am.

My family and I spent a lot of the covid-19 lockdown period in a family home outside Cairo. I used to go cycling during the day, and we were all able to spend lots of time outdoors. In the house, I created a work space by setting up a room with a desk.

Yodawy shifted to work from home (WFH) two weeks before lockdown. We made a checklist of everything that had to be in order for us to work efficiently, and then distributed it to the team. We had to rethink some of our internal processes and how to reinforce certain roles to help streamline work, but it was a good step.

And WFH turned out to be a really good development for us. Our product development and tech team actually performed better during WFH, so they’ll continue remote work permanently and just come to the office once every week or two. From a rent perspective, this is beneficial because we grew significantly in the last six months and would have needed extra office space if we hadn’t learned that they could work very efficiently from home. With the operations team, we gave them autonomy rather than trying to enforce anything, so they could come to the office if they needed to be here. They did come quite often — even during lockdown — but they tried to optimize their work time without much management involvement.

We’re lucky enough to have a team that operates well autonomously. But with this dynamic and hardworking culture, people sometimes ended up overworked because they never switched off. I think the way to overcome this is better general planning. There will always be spikes in a work environment, but we don't have to overload people by design.

I agree with Enterprise that a company’s culture is ultimately made in the office. The toughest thing about WFH has been figuring out how to onboard new recruits. That informal office culture is so important for a team.

Now I’m back in the office three or four days a week. I enjoy it, and it’s a chance for me to catch up with different people who may need to sit with me to get things done. On the days where the product and development team are in, the office is about 60% full, and on other days it’s probably 10-15% full. Each team can decide for itself whether it needs to be there or not.

Yodawy saw huge growth because of covid-19. From the consumer side, there was a clear multiplied effect, so we almost reached our end-of-year targets during lockdown. But the most interesting thing was to see the awareness raised among our B2B stakeholders. We work with a lot of payers and insurance companies, and many are historically very traditional, risk-averse, and resistant to change. Now when we meet new clients, there’s no debate over the value of digital service. This marks a very positive shift in Egypt’s healthcare sector, which will accelerate the rate of change and open people up to new strategies.

Now I’m anticipating very interesting developments, especially in medtech and digitization. Medtech will start to become more prominent in the startup ecosystem. I’d expect to see 5-10 new medtech startups each year delivering something new and interesting. We’ll see more digitization among medical providers, and digitizing medical records will gain traction, opening up new services that weren’t possible when everything was paper-based. Insurance companies are starting to have a more customer-centric approach, and we can see that being implemented. I’m even seeing healthcare brands and pharma companies starting to restructure internally for this change, bringing more sales online. So the change has really been ignited.

As a new parent, there isn’t much time to disconnect and unwind — but when I do, I like to watch Netflix with my wife. I recently watched Cobra Kai, the sequel to The Karate Kid, and found it really entertaining. Sometimes you just need to watch something not too serious. I’m also a big fan of going to the beach and just spending the day there enjoying nature.

What have the last six months taught me? If you give people some space and autonomy, you’ll often be positively surprised by what they can do. I saw this with my team. It was really fun to watch and I’m very proud of what they achieved.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.70 | Sell 15.80
EGP / USD at CIB: Buy 15.71 | Sell 15.81
EGP / USD at NBE: Buy 15.70 | Sell 15.80

EGX30 (Wednesday): 10,979 (+0.2%)
Turnover: EGP 1.3 bn (16% above the 90-day average)
EGX 30 year-to-date: -21.4%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 0.2%. CIB, the index’s heaviest constituent, ended down 0.2%. EGX30’s top performing constituents were Ezz Steel up 4.9%, EFG Hermes up 2.5%, and Qalaa Holding up 2.4%. Yesterday’s worst performing stocks were Juhayna down 2.3%, Heliopolis Housing down 1.0% and Elsewedy Electric down 1.0%. The market turnover was EGP 1.3 bn, and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -37.2 mn
Regional: Net long | EGP +34.3 mn
Domestic: Net long | EGP +3.0 mn

Retail: 76.9% of total trades | 78.3% of buyers | 75.5% of sellers
Institutions: 23.1% of total trades | 21.7% of buyers | 24.5% of sellers

WTI: USD 39.52 (-0.70%)
Brent: USD 41.42 (-0.72%)

Natural Gas: (Nymex, futures prices) USD 2.19 MMBtu, (+0.66%, November 2020 contract)
Gold: USD 1,866.00 / troy ounce (-2.18%)

TASI: 8,244 (-0.56%) (YTD: -1.72%)
ADX: 4,490 (-0.18%) (YTD: -11.54%)
DFM: 2,285 (+0.94%) (YTD: -17.34%)
KSE Premier Market: 6,240 (+1.0%)
QE: 9,787 (-0.55%) (YTD: -6.12%)
MSM: 3,621 (-0.14%) (YTD: -9.03%)
BB: 1,450 (+0.56%) (YTD: -9.89%)

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September: The Egyptian Federation for Securities will hold elections for its board of directors after they were postponed in March due to the lockdown.

September: The General Authority for Investment (GAFI) will host a virtual meeting with the Arab-German Chamber of Commerce and Industry and some 120 German companies to discuss investment prospects in Egypt.

20 September (Sunday): A Cairo administrative court is due to issue a ruling in a third-party lawsuit demanding the government block YouTube in Egypt for carrying an allegedly sacreligious video. The case is an infamous 2012-vintage lawsuit still wending its way through the courts.

21 September-1 October (Monday-Thursday): EFG Hermes’ second Virtual Investors Conference.

24 September (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24-25 September (Thursday-Friday): The European Union will discuss imposing sanctions on Turkey to limit the country’s ability to expand its search for oil and gas in contested eastern Mediterranean waters.

27 September (Sunday): Former Finance Minister Youssef Boutros Ghali to be retried on charges he squandered public funds in a case related to the printing of coupons for butane canisters.

28 September-3 October (Monday-Saturday): CIB PSA World Tour Finals, Cairo, Egypt.

End of September: Last chance to settle building code violations for illegal buildings.

1 October (Thursday): House of Representatives reconvenes for its sixth and final legislative session before elections for the house later in October or November.

1 October (Thursday): Deadline for students to transfer between schools.

1-10 October (Thursday-Saturday): Alexandria Book Fair, Kouta, Alexandria.

4 October (Sunday): Senate convenes for its first session.

6 October (Tuesday): Armed Forces Day.

8 October (Thursday): National holiday in observance of Armed Forces Day.

12 October (Monday): The Egyptian Iron and Steel company general assembly would discuss demerging its mining and quarrying unit and restructure the company’s board of directors

10-17 October (Saturday-Saturday): CIB Egyptian Squash Open, New Giza Sporting Club/ Pyramids of Giza

17 October (Saturday): 2020-2021 academic year begins for K-12 students at state schools and students in public universities.

18-22 October (Sunday-Thursday): The annual Cairo Water Week event — which will be semi- virtual this year — will be held under the slogan “Water Security for Peace and Development in Arid Regions”

21-23 October (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

23-31 October (Friday-Saturday): El Gouna Film Festival, El Gouna, Egypt.

24-25 October (Saturday – Sunday) Polls open for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

29 October (Thursday): Prophet Mohamed’s birthday (TBC), national holiday.

November: Egypt will host simultaneously the International Capital Market Association’s emerging market, and Africa and Middle East meetings.

November: An Egyptian-Russian ministerial committee will meet to discuss trade and investment in Moscow.

2 November: Former Civil Aviation Minister Ahmed Shafik faces retrial at Cairo Court of Appeals in the so-called Aviation Ministry corruption case.

4-5 November (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

4-6 November (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

4-7 November (Wednesday-Saturday): Cityscape Egypt Expo, International Exhibition Center, Cairo

7-8 November (Saturday-Sunday): Polls open for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

12 November (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

15 November (Sunday): Egyptian Tax Authority’s online intro seminar on new electronic invoice system for first tranche of companies transitioning to e-filing program.

19-28 November (Thursday-Sunday): Cairo International Film Festival, Cairo Opera House, Egypt.

23-24 November (Monday-Tuesday): Reruns for Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

30 November (Monday): Final results will be announced for Parliamentary elections held in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

December: The 110th regular session of the Egyptian-Iraqi Joint Higher Committee will be held under the chairmanship of the prime ministers of the two countries.

December: IMF delegation visits Egypt to in first of two reviews ahead of disbursement of second tranche of USD 5.2 bn SBA.

1 December (Tuesday): The IMF will conduct a first review of targets set under the USD 5.2 bn standby loan approved in June (proposed date).

7-8 December (Monday-Tuesday): Reruns for Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

9-10 December (Wednesday-Thursday): BiznEx, the international business expo in Egypt, venue TBD.

14 December (Monday): Final results will be announced for Parliamentary elections held in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

15-16 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

24 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

25 December (Friday): Western Christmas.

1 January 2021 (Friday): New Year’s Day, national holiday.

7 January 2021 (Thursday): Coptic Christmas, national holiday.

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship at the Giza Pyramids

25 January 2021 (Monday): 25 January revolution anniversary / Police Day.

26-28 January (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia

28 January 2021 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

4 February 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

6-18 February (Saturday-Thursday): Mid-year school break.

18 March 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

12 April 2021 (Monday): First day of Ramadan (TBC).

25 April 2021 (Sunday): Sinai Liberation Day.

29 April 2021 (Thursday): National holiday in observance of Sinai Liberation Day.

29 April 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

3 May 2021 (Monday): Sham El Nessim.

6 May 2021 (Thursday): National holiday in observance of Sham El Nessim.

12-15 May 2021 (Wednesday-Saturday): Eid El Fitr (TBC).

31 May-2 June 2021 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

1 June 2021 (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

10 June 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24 June 2021 (Thursday): End of the 2020-2021 academic year.

26-29 June 2021 (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center

22 July 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 July-3 August 2021 (Thursday-Monday): Eid Al Adha, national holiday (TBC).

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