Monday, 30 November 2020

It’s a workaday Monday as we get ready for December

TL;DR

What we’re tracking today

Good morning, everyone, and welcome to the last day of November. We’re simultaneously a bit freaked out that the year is ending and anxiously awaiting the end of 2020.

Thank you to each and every one of you who wrote in yesterday about our new look. We’re delighted you’re happy — and please let us know on editorial@enterprise.press if you run into any technical problems.

THE BIG STORY this morning here at home: We’re in the middle of a second wave, but there’s no need to panic. As we report below this morning, new figures suggest 2.3 mn people lost their jobs earlier this year thanks to covid (most of them in manufacturing, construction and food service), underscoring why the Madbouly government is being careful in its response this winter. The Health Ministry is on the record as saying they don’t think a second lockdown is coming, and officials signaled last week that a second wave of stimulus is ready to roll. The education minister added his voice to the chorus on Last Night’s Talk Shows, saying schools aren’t about to be cancelled.

Final election results for Giza and 13 other governorates should be announced today. The runoffs for the rest of the country will take place on 7-8 December, and results are expected on 14 December, the day before the current crop of MPs reconvenes for its final session.

ALSO- GAFI is brokering a sit-down tomorrow between shippers and the Customs Authority after a tussle over recent regulatory changes and the Medusa 2020 military exercises kick off today, with forces from Egypt, Greece, France, Cyprus and the UAE participating.

A bit more clarity on “winter hours” for retail: Restaurants and shops will be allowed to open 10am through midnight this winter, but state-owned outlets catering to ration card owners will work 9am to 9pm, Cabinet said yesterday

REGIONALLY, that faint whiff of halitosis? It’s Jared’s last gasp. The Donald’s son-in-law and would-be dealmaker is heading to KSA and Qatar this week to try to wrest a final diplomatic victory for Agent Orange in a trip that’s getting wide play in the global press, from the WSJ to Reuters. As we said yesterday, we don’t expect a breakthrough: MbS will bring Qatar back in from the cold and / or recognize Israel when Joe Biden is firmly in the White House.

Keep your eye on: The OPEC+ alliance is expected to press pause on its planned supply hike as it begins a two-meeting today to nail down its production quota for the coming months, CNBC reports.

AROUND THE WORLD- The Wall Street Journal has the rundown on who it thinks Biden is about to appoint to run his economic team and the EU is getting read to pitch Biden on a post-Trump alliance centered on tech, covid-19 and countering the influence of China.

IT’S A BIG LOSS FOR ESG activistsSwiss voters failed yesterday to pass a referendum that would have held companies headquartered there “legally liable for whatever environment wreckage and human rights abuses [that] occur as a result of their operations, no matter where” in the world they take place. Fortune has the rundown on what the Responsible Business Initiative proposed.

WE HAVE HIT PEAK 2020 FINANCE- Boutique investment bank Perella Weinberg is closing in on a merger with banking tycoon’s Spac. But Enterprise, what’s a Spac? We’ve got you covered.

enterprise

MARKET WATCH- Investment banks are going long on EM in 2021: Vaccine hopes, ultra-low interest rates and a post-Trump future are fuelling a rally in emerging markets that has some investment banks to predict a so-called “goldilocks” year in 2021, Bloomberg reports. The gathering tailwinds are positioning the MSCI gauge of EM stocks to have its best month since March 2016 in November while currencies are on track for their strongest month since January 2019 and bonds have erased their year-to-date losses. The surge in inflows has Goldman Sachs, JPMorgan and UBS bullish on an economic recovery in the emerging world next year, while a Deutsche Bank analyst is calling 2021 a goldilocks (a.k.a. not too hot, not too cold) year for the asset class.

enterprise

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: Education franchising has the potential to spur Egypt’s drive to internationalize its education system, but so far its growth has been slow. Today, we look at the regulatory hurdles that may be preventing it from being widely adopted, and what can be done to give it a push in the right direction.

enterprise

ECONOMY

2.3 mn jobs were lost during lockdown

Some 2.3 mn jobs were lost during the lockdown in 4Q2019-2020, according to statistics in the Finance Ministry report (pdf) we picked up yesterday. The retail industry sustained the largest number of cutbacks, shedding 624k jobs lost compared to the same period in the previous fiscal year. Manufacturing came in second with 569k lost jobs, followed by the food and beverage and hospitality industry (469k), transport and storage (309k), and construction (288k).

Employment is picking up again after the lifting of restrictions: Recent Capmas figures showed that the unemployment rate fell to pre-pandemic levels of 7.3% in 1Q FY2020-2021 after the government eased lockdown restrictions. Joblessness hit a near two-year high of 9.6% during the height of the outbreak in 4Q FY2019-2020. .

MEANWHILE- Public spending on fuel subsidies continues to fall in FY2020-2021: The government continued to cut back on fuel subsidies in 1Q FY2020-2021, reducing spending by 46% to EGP 3.9 bn from EGP 7.25 bn in the same period a year earlier, Oil Minister Tarek El Molla told Reuters, according to Sky News. The minister’s statements came a day after the Finance Ministry revealed that the total subsidy spend last year fell 77% to just EGP 18.6 bn. This is far below the EGP 52.96 bn the government had originally envisioned spending during the year, helped no doubt by the collapse in oil prices due to the pandemic earlier this year.

Since 2014, the government has gradually reduced fuel subsidies as part of its drive to rein in spending and put its finances on a sustainable path. Some EGP 28.1 bn has been allocated towards fuel subsidies in the FY2020-2021 budget, almost EGP 10 bn higher than the government spent last year.

DEBT WATCH

Palm Hills closes EGP 1.25 bn securitized bond sale + more corporate sukuk issuance on the way

Palm Hills (PHD) has closed a triple-tranche EGP 1.25 bn securitized bond issuance, in a transaction handled by CI Capital Investment Banking (CIIB) and the Arab African Bank, Palm Hills (pdf) and CI Capital (pdf) said in EGX filings. The issuance, backed by a receivables portfolio worth EGP 1.5 bn, is the company’s largest to date and was issued in tranches carrying maturities of 13, 36, and 61 months that received AA+, AA, and A ratings, respectively, from ratings agency MERIS.

Advisors: AAIB and CI Capital Investment Banking acted as the financial advisor, promoter and manager, while CIB and Al Ahli United Bank underwrote the issuance. ALC Alieldean Weshahi & Partners acted as counsel and Grant Thornton Mohamed Hilal as financial auditor.

ALSO FROM THE DEBT MARKET- An unnamed financial services company is working on a EGP 500 mn mudaraba sukuk issuance, with an eye to hit the market in 1Q2021, Sayed Abdel Fadeel, head of the Financial Regulatory Authority’s (FRA) corporate finance department told Hapi Journal. The company plans to use the proceeds to fund its subsidiaries, and list up to 10% of the sukuk in a retail offering on the EGX. Abdel Fadeel gave no indication of who the issuer might be, noting only that it’s a holding company.

Also in the pipeline: A company in the agricultural sector could take EGP 250 mn-worth of sharia-compliant bonds to market in 1Q2021, Abdel Fadeel said. The sukuk, known as “istizraa,” fund agricultural projects. News of both potential issuances comes after Sarwa Capital closed its EGP 2.5 bn sukuk sale last week. Sarwa’s issuance was only the second corporate sukuk issuance in Egypt, following Talaat Moustafa’s EGP 2 bn sale in April.

A total of EGP 10 bn-worth of sukuk will have hit the market by the end of 2021, Abdel Fadeel said. The FRA is working to stimulate the sukuk market, with plans to identify companies likely to need sukuk financing, drum up interest for sukuk, and reduce the cost of issuing the debt instrument, he added. Capital market regulations issued in 2018 opened the door for new financial instruments including futures, sukuk, and green bonds.

Who’s in the market for debt? Ora Developers expects to sign a EGP 1.5 bn loan agreement this month with a syndicate of banks led by Banque Misr to fund the company’s ZED project in Sheikh Zayed, Hapi Journal reports, quoting Ora Developers CEO Haitham Abdel Azeem. The real estate developer plans to spend EGP 3 bn on construction in 2021, said Abdel Azeem. Ora had already obtained an EGP 1 bn loan for ZED through Banque Misr earlier this year.

 

CORRECTED ON 21 December 2020

An estimated EGP 10 bn-worth of sukuks are expected to hit the market in 2021, not EGP 10-mn as previously written.

REGULATION WATCH

EGX to make it easier for non-Egyptian companies to list — provided they do a lot of business here

Non-Egyptian companies can now list shares in Egypt without meeting high capital requirements, provided they fulfil other conditions, according to changes to the Financial Regulatory Authority’s (FRA) listing rules (pdf). The rules previously only allowed companies domiciled abroad to list on the EGX if their capital exceeds USD 100 mn, or is between USD 10-100 mn for smaller caps looking to list on Nilex. For comparison, capital requirements for resident companies on the EGX are EGP 100 mn and between EGP 1-100 mn on small cap Nilex.

To be exempt from the minimum capital requirement for foreign companies, these entities must have more than 50% of their shareholders’ equity, revenues, and assets attributable to subsidiaries they registered in Egypt. They also cannot be listed elsewhere before coming to Egypt. Companies that meet these requirements will be subject to the same capital requirements that apply to their homegrown counterparts.

ENERGY

Israel-Egypt gas pipeline faces ownership change as Delek Drilling plans LSE spin-off

Israeli gas company to transfer ownership in Egypt pipeline to new company as part of LSE spin-off plan: Delek Drilling, one of the main operators of Israel’s large offshore gas fields, is planning to spin off most of its assets into a new company it will IPO on the London Stock Exchange, according to a regulatory filing on the Israeli exchange cited by Reuters. Delek will transfer some of its assets, including its partial ownership of the EMG pipeline that runs between Israel’s Ashkelon and Egypt’s Arish, to the new company.

The two fields from which Delek ships natural gas to Egypt won’t be held by the same company anymore: Delek will transfer its 45.3% share of the Israeli Leviathan gas field and 30% stake in Cyprus’ Aphrodite field to the new company, but retain its 22% stake in the Tamar field, which the Israeli government has ordered it to sell next year as part of its plan to prevent concentration in the gas market. Delek exports gas from Leviathan and Tamar to Egypt under a landmark USD 19.5 bn agreement signed with Alaa Arafa’s Dolphinus Holding in 2018.

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LEGISLATION WATCH

Senate bylaws receive final approval

A bill laying out the newly-reconstituted Senate’s bylaws and outlining its mandate passed the upper chamber in a final vote yesterday and will now be submitted to the president for approval, according to Youm7, which carries the legislation in full. Under the bylaws, the Senate’s advisory role covers voting on any future constitutional amendments and any bills referred to it by the House of Representatives or the president, approving government policy, and ratifying international treaties.

ALSO ON THE LEGISLATIVE FRONT- We’re one step close to seeing the creation of an emergency medical response fund after the House Health Committee approved yesterday the draft law given the green light by the cabinet in August, Al Shorouk reports. The fund will replace family health centers around the country and provide financial support during major emergencies and finance services provided by the Health Ministry to reduce waiting lists. The law will now be referred to a plenary session for approval.

STARTUP WATCH

Swvl expands to Jordan with new product targeting businesses

Ride-hailing app Swvl is expanding to Jordan with Swvl Business, a new product that offers tailored bus routes and schedules for businesses, according to MenaBytes. Swvl appears to also be gearing up to launch its regular bus-hailing services in Amman, which is currently listed as one of the cities where the service is available despite no routes being operational. The Cairo-born startup is also experimenting with other services in its markets such as carpooling in Kenya and intercity bus rides in Pakistan, and is currently working to expand into other Middle East markets.

SPORTS

Mortada Mansour, Zamalek SC board suspended on allegations of financial misconduct

Zamalek SC chairman Mortada Mansour and the rest of the board have been temporarily suspended by the Sports Ministry on allegations that the club had committed “financial violations,” the ministry said in a statement yesterday. The ministry said it has referred evidence of misconduct to the prosecutor’s office and will wait for the investigation to finish before taking a final decision on whether to restore the board. The statement did not provide details on the ministry’s allegations. The Directorate of Youth and Sports in Giza will manage the club in the interim and has set up a temporary governing committee.

MOVES

Simon-Kucher & Partners names new Egypt, regional managing director

Simon-Kucher & Partners has tapped Maha Rashad (LinkedIn) as the general manager of its Cairo-based regional office, the global strategy consultant said. Rashad joined the firm in 2019. She was the former acting CEO of the Communications Ministry’s ITIDA during a time in which she was also an associate minister for marketing strategy.

EARNINGS WATCH

Elsewedy Electric NP fall 1.4% in 3Q2020

Elsewedy Electric reported a 1.4% y-o-y dip in 3Q2020 NP to EGP 817 mn from EGP 829 mn the year before, according to a company earnings release (pdf). Revenues during the three-month period fell 12.6% to EGP 11.3 bn from EGP 12.9 bn last year. On a nine-month basis, Elsewedy recorded NP of EGP 1.73 bn, down 36.3% y-o-y, while the company’s 9M2020 revenues fell 8.9% to EGP 31.47 mn thanks largely to covid-19. The company’s topline continued to be supported by growth in turnkey projects, which rose 10% y-o-y in 9M2020 to EGP 14.6 bn.

Looking forward: “Following the national and global disruptions associated with covid-19 during 1H2020, the third quarter has seen a strong recovery,” said CEO Ahmed Elsewedy. The growth was attributed in part to sustainable revenues generated by the company’s turnkey projects. Elsewedy also noted the potential of one of the company’s major projects, Tanzania’s Rufiji Dam 2.1 GW hydropower plant, which is on schedule as planned, adding “the works Elsewedy has executed to date have been more than up to international standards, while the associated collections have been solid.”

MAKING IT

Catch up on season three of Making It ahead of the finale this Thursday

This Thursday is the season three finale of Making It — our podcast about building a great business right here in Egypt. We’ve talked to founders and CEOs from companies of different sizes, stages, and specializations to ask how they’ve shouldered the pandemic and what’s next for their growth stories and industries. Catch up on season three:

You can also listen on: Apple Podcasts | Google Podcasts | Anghami | Omny. We’re also available on Spotify, but only for non-MENA accounts. Subscribe to Making It on your podcatcher of choice here.

Enterprise+: Last Night’s Talk Shows

It was wall-to-wall football on the talk shows last night:

Mansour + Zamalek board suspended: Masaa DMC's Eman El Hosary (watch, runtime: 2:50) and Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 6:04) highlighted the Sports Ministry's decision to suspend the Zamalek SC’s board amid investigations into its financial affairs. El Hekaya’s Amr Adib phoned Ashraf Sobhy, the sport Minister to comment on the decision (watch, runtime: 2:54).

Racism in football: Social media racism directed at Zamalek’s Shikabala in the aftermath of the club’s 2-1 loss to Al Ahly on Friday received attention from Al Hayah Al Youm’s Lobna Assal (watch, runtime: 7:46), Masaa DMC’s Eman El Hosary (watch, runtime: 10:42) and Kelma Akhira’s Lamees El Hadidi (watch, runtime: 5:14).

Gezira Sporting Club wants to expand: Naguib Sawiris dropped into Kelma Akhira (watch, runtime: 5:58) to speak in favor of real estate developers establishing branches of Gezira Sporting Club in their residential compounds. This came as club head Amr Jazzarin explained the plan to host Lamees El Hadidi (watch, runtime: 5:29).

Elsewhere: Executive director of the UN’s (and former minister) ODC Ghada Waly announced that Egypt would host an international conference on corruption in December 2021 during a wide-ranging interview with Lamees that tackled gendered violence, money laundering and international trafficking (watch, runtime: 33:42).

Egypt in the News

It’s an intensely slow morning for Egypt in the international press today.

ALSO ON OUR RADAR

Egypt’s drive for commodities self-sufficiency continues: A ban on white and raw sugar import will remain in place for an additional three months starting December, Supply Minister Aly El Moselhy said yesterday, according to Al Mal. Egypt’s strategic reserves of the white stuff is enough to cover 3.7 months of consumption and sugar beet companies have enough stockpiled to cover another two months ahead of the domestic sugar cane and sugar beet harvest which starts in January. The government decided in September to extend the import ban, which was originally imposed in June, through to the final month of the year.

Other things we’re keeping an eye on this morning:

  • Hassan Allam Construction holds a 25% share in a construction contract for the first phase of Cairo Metro Line 4 that they secured last week (pdf) alongside Arab Contractors, Petrojet, and Concord.
  • Arabia Investments Holding is planning to invest up to EGP 200 mn next year in its non-banking financial services subsidiaries, and is mulling a split into two separate companies: One for NBFS and another to manage its portfolio companies.

Covid watch

The Health Ministry reported 358 new covid-19 infections yesterday, up from 351 the day before. The ministry also reported 15 new deaths, bringing the country’s total death toll to 6,636.

Education Minister Tarek Shawki was on Amr Adib’s El Hekaya to reiterate that the school year will not be disrupted by the pandemic, and that contingency measures will be put in place if it is not possible for students to attend school to sit the Thanawiya Amma exams.

Egypt will produce plasma-derived meds in a USD 300 mn project with Spanish pharma manufacturer Grifols, according to an emailed statement from Shalakany Law, which acted as local legal counsel for Grifols. The Spanish company signed an agreement with the National Service Projects Organization (NSPO) to develop and operate plasma collection centers and manufacturing facilities, with plans to bring them online by the end of 2025. Helmy, Hamza & Partners and Baker McKenzie Cairo acted as legal advisors for NSPO.

Menoufia governor Ibrahim Abu Laymoun has tested positive for covid-19, he said in a statement to Ahram Gate. Four of his aides have also contracted the virus, he said.

Saudi Arabia has signed a non-binding MoU with Germany’s CureVac for the company’s covid-19 vaccine, Bloomberg reports. Advanced clinical trials of the vaccine are set to start by the end of the year, with KSA looking to distribute it across the GCC.

Relax, Westerners: Sputnik V won’t turn you Commie. With new data released by Russia’s Sputnik V vaccine, Western sceptics of the low-cost vaccine are starting to come around, Canada’s CBC reports. Trials have been extended to cover a wider sample and efficacy scores have only gone up, allaying the fears of Western vaccine experts who previously criticized the trials for a lack of transparency.

Planet Finance

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The EGX30 rose 0.3% yesterday on turnover of EGP 1.2 bn (7% above the 90-day average) as foreign investors were net sellers. The index is down 21.2% YTD.

In the green: Qalaa Holdings (+3.1%), Orascom Investment Holding (+2.7%) and Ezz Steel (+2.7%).

In the red: Juhayna (-1.9%), Telecom Egypt (-1.4%) and SODIC (-1.1%).

Asian markets are marginally in the green in early trading this morning while futures in the US, UK and Germany suggest the markets could open in the red later today as traders book gains after an awesome November.

Up

EGX30

11,009

+0.3% (YTD: -21.2%)

None

USD (CBE)

Buy 15.60

Sell 15.70

None

USD at CIB

Buy 15.61

Sell 15.71

None

Interest rates CBE

8.25% deposit

9.25% lending

Up

Tadawul

8,708

+0.17% (YTD: 3.81%)

Up

ADX

4,985

+0.28% (YTD: -1.77%)

Down

DFM

2,399

-0.83% (YTD: -13.20%)

Up

S&P 500

3,638

+0.24% (YTD: +12.62%)

Up

FTSE 100

6,367

+0.07% (YTD: -15.58%)

Up

Brent crude

USD 48.18

+0.80%

Down

Natural gas (Nymex)

USD 2.84

-3.99%

Down

Gold

USD 1,788.10

-1.28%

Up

BTC

USD 18,075.80

+2.57%

GLOBAL M&A- Salesforce is in talks to acquire workplace app Slack in what could be one of the industry’s biggest-ever acquisitions, Reuters reports, citing sources close to the matter. This comes as Slack Technologies — currently valued at USD 21 bn — has been struggling to capitalize amid fierce competition from Microsoft Teams. An agreement could be announced as soon as the coming week, says CNBC.

MOVES- Saudi Telecom CEO Nasser Al Nasser has resigned from the region’s largest telecom operator after two years in the role, Bloomberg reports. This comes as STC and Vodafone Group continue negotiations over STC’s potential purchase of a 55% stake in Vodafone Egypt, but it is unclear whether Al Nasser’s resignation will have any effect on the pace of the talks. Reports have suggested that the STC wants to break the deadlock over the valuation of the company and have a final agreement by the end of the year.

Bond investors are piling into corporate junk debt in what the Financial Times attributes to optimism that the companies hardest hit by the pandemic can avoid insolvency. Prices of bonds issued by CCC-rated US companies have accelerated at their quickest pace in more than four years this month while European junk bond yields have fallen from 8% in March to almost 3%.

One caveat: While we can’t deny that recent vaccine news and the Biden victory have definitely stoked bullish sentiment, there does seem to be a giant quantitative easing-shaped hole in the FT’s analysis here, which ignores the tns of USD in liquidity sloshing around the financial system that has incentivized investors to take on absurd levels of risk given the global economic crisis.

Around the world

Iran has suggested that it will not escalate regional tensions after its chief nuclear scientist was assassinated at the weekend, Bloomberg reports. In a sign that the government wants to leave the door open to negotiations with the incoming Biden administration, a government spokesperson said that Tehran “shouldn’t fall into the trap of linking the assassination to past nuclear negotiations,” while Foreign Minister Mohammad Javad Zarif said it was “unnecessary” to carry Trump-era tensions into the new administration.

IN DIPLOMACY: Tech and vocational education could get new funding under an EUR 80 mn “debt-for development” swap agreement with Germany that’s now being discussed, according to a cabinet statement. The first two tranches of the EUR 240 mn agreement went toward projects in education, clean water, energy, and infrastructure.

President Abdel Fattah El Sisi spoke by phone with Jordan’s King Adallah yesterday, an Ittihadiya statement said. Regional peace initiatives and bilateral ties were on the agenda.

WHO’S TALKING?

  • Foreign Minister Sameh Shoukry had separate talks yesterday EBRD regional boss Heike Harmgart and Palestinian president Mahmoud Abbas yesterday.
  • Minister of Military Production Mohamed A. Morsi toured military factories on Sunday with his Iraqi counterpart Jumah Saadoun in the latest example of how we’re cozying up with Iraq.
blackboard

What is it going to take to spur education franchising in Egypt? Last week, we looked at how education franchising could be an effective way to import knowledge and expertise that would lend itself well to Egypt’s drive to internationalize its education. Franchising isn’t just a cost-effective way for international schools to enter new markets — in 2014 it was named the fastest growing method of transnational education used by global players. But education franchising in Egypt is growing relatively slowly. Though our first international school franchise was established in 2004, only a handful of K-12 schools and one university have followed its lead, multiple sources confirm. Today, we look at which regulatory hurdles have impeded it and what policies would help push this model of education along.

As things stand today, there is no regulatory framework governing franchises in Egypt. Currently, establishing a franchise in Egypt is relatively straightforward, essentially just drawing up a contract, says Mahmoud Bassiouny, Managing Partner at Matouk Bassiouny. But it’s sector-driven. Franchising a fast-food chain is much more straightforward than a franchise model involving something more complex, like the transfer of technology and intellectual property. So franchisors, especially those with sophisticated models involving technology transfer or a powerful brand, need to see greater regulatory clarity to feel protected, he adds.

This is particularly important to education franchisors coming to Egypt, who must ensure that their brand reputation will be protected, says Islam Saeed, Partner at Matouk Bassiouny. Education franchisors are generally urged to value brand reputation above every other consideration, and guard against local providers who use a school’s name to do business but compromise quality and reputation, this ISC Research report (pdf) shows.

Enter the Franchise Act: The government and stakeholders have been working on drafting a Franchise Act, now under final review by the legislative department of the Trade and Industry Ministry, says Hatem Zaki, Executive Board Member of the Egyptian Franchise Development Association (EFDA). The act should cover how and where to register franchises, how to disclose information, what the commitments of franchisor and franchisee are, and what a court would consider binding and non-binding in a franchise agreement, says Zaki. It will hopefully reassure franchisors that their contractual arrangements will be upheld in Egyptian courts, says Bassiouny.

But would such an act be enough to spur education franchising? On its own, probably not. For one thing, the Franchise Act doesn’t appear to address education directly, sources close to the matter tell us.

And neither does the Education Ministry’s regulations: The establishment of any international school needs approval from the Education Ministry under the Education Act of 1981 (pdf), Deputy Education Minister Mohammad Megahed tells Enterprise. However, the Education Act doesn’t include specific provisions on franchising schools, both Megahed and Saeed tell us. Franchisors might see theoretical protection of their names and trademarks (including logos) in local Egyptian law and international agreements that Egypt’s party to, but there’s no practical protection in terms of case law, verdicts issued by Egyptian courts or arbitral precedents. “We haven’t seen precedents where the Education Ministry intervened in disputes or authorized the franchisee and franchisor structure,” Saeed adds.

Amending regulatory conditions related to licensing and trademarks could help: Currently the Education Ministry doesn’t require local operators to prove they have the rights to use an international school’s name and trademarks when applying for the license to use them, says Saeed. As long as the name isn’t being used by another local school, the license could be granted. This needs to be changed so that local operators have to provide proof by international schools that they’re authorized to use their names, trademarks and intellectual property, Saeed believes.

As the regulatory body, the Education Ministry should take the lead in registering and monitoring franchises: It should register education brands, and have a record of both franchisees and franchisors so that in the event of any dispute, franchisors can apply to the ministry to get their licenses revoked, rather than going to the police or Egyptian courts, argues Saeed.

In many ways, conditions are ripe for education franchising to grow in Egypt: Generally, franchising has the potential to grow significantly in Egypt, and a good franchise law could encourage more franchisors to set up here, says Bassiouny. Egypt remains an attractive destination for private schools seeking overseas expansion through franchising, as evidenced by Malvern College operating and Haileybury planning to open, says Nalini Cook, ISC’s Head of EMEA Research.

But for it to flourish, a clearer regulatory framework tailored to education is still needed: Education franchising should be encouraged, but with clear conditions, says Saeed, and international schools must remember that the sector is still under development in Egypt. “If I were an international school, I wouldn’t adopt a typical franchise agreement in Egypt, the kind that issues a license and educational material in exchange for periodic supervision. I would want more control — not management control, but control when it comes to monitoring service quality — without taking on the liability of the operation,” he adds.

Your top education stories for the week:

  • The Madbouly Cabinet approved a decision to lower tuition fees for international students by up to 35% at several public universities outside Cairo and Alexandria.
  • CI Capital is planning to list 40% of its education arm Taaleem Consulting and Educational Services in an IPO in 1Q2021.
  • Leading private education outfit CIRA is considering a EGP 600 mn sukuk issuance.
  • The Communications Ministry has signed a MoU with the University of Ottawa to offer a masters degree in Computer Science with a specialization in AI, data science, the Internet of Things and robotics.

ON YOUR WAY OUT

What the fugg? Denying English-speakers the selfie of a lifetime, the townsfolk of an Austrian village have opted to rename their town ‘Fugging’ after finally tiring of the memes. We presume they will also now refer to themselves as Fuggingers (instead of, well, you know). The Guardian has the story.

CALENDAR

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 (date TBC): Egypt Economic Summit, Cairo, Egypt, venue TBD.

December: Fifth round of Egypt-US Trade and Investment Framework Agreement (TIFA) talks.

December: A meeting to finalize membership and trading rules governing Egypt’s Commodities Exchange (Egycomex).

December: The Egyptian-Iraqi Joint Higher Committee will meet.

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).

2 December (Wednesday): The Egypt Economic Summit will be held at the St. Regis Hotel in Cairo

4 December (Friday): Cairo Art Fair kicks off and runs through 31 January 2021.

7 December: Former Civil Aviation Minister Ahmed Shafik faces trial over embezzlement allegations.

7-8 December (Monday-Tuesday): Runoffs 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, Nile Ritz Carlton Hotel, Cairo, Egypt.

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 December (Tuesday): House of Representatives reconvenes from recess.

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.

31 December (Thursday): Egypt-UK post-Brexit trade agreement to take effect.

31 December (Thursday): Deadline for car owners to comply with traffic regulations to install a RFID electronic sticker on their cars.

1Q2021: The Seventh Annual Egypt Automotive Summit will be held

1H2021: Egypt’s Commodities Exchange (Egycomex) will begin trading.

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.

17 January 2021 (Sunday): A court will hold a postponed hearing to look into an appeal by Syria’s Anataradous against an arbitration ruling in favor of Amer Group and Amer Syria in case 445 of 2019.

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

25-29 January 2021 (Monday-Friday): The World Economic Forum’s “Davos Dialogues” will take place virtually.

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).

18-21 May 2021 (Tuesday-Friday): The World Economic Forum’s annual meeting will be held under the theme of “The Great Reset” in Lucerne-Bürgenstock, Switzerland

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

30 May-15 June 2021 (Wednesday-Thursday): Cairo International Book Fair.

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

30 June- 15 July 2021: National Book Fair.

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).

1 October 2021-31 March 2022 (Friday-Thursday): Postponed Expo 2020 Dubai.

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