China’s gift shipment of Sinopharm jabs is here

Happy hump day, everyone. It may be a relatively slow news day, but we’re still very happy that the weekend is within arm’s reach.

THE BIG STORY AT HOME: The shipment of 300k Sinopharm vaccines we’ve been waiting on from China landed in Cairo in the wee hours of the morning. We have all the details in this morning’s Covid Watch, below.

THE BIG STORY INTERNATIONALLY: The US just crossed the very grim milestone of having half a mn deaths from covid-19. That’s more deaths than the US sustained in World War I, World War I, and the Vietnam War combined, President Joe Biden said last night. The milestone comes just a little over a year after the US recorded its first covid-19 death in California last year, and means the US now accounts for around 19% of all deaths caused by the disease globally. The story is front-page news pretty much everywhere: The Wall Street Journal | Bloomberg | Reuters.

A CLOSE SECOND- Agent Orange’s financial wrongdoings could finally see the light of day after the US Supreme Court blocked former president Donald Trump’s lawyers’ last ditch attempts to shield his tax returns and related documents from an investigation, the New York Times reports. The scope of the inquiry is still unclear, but could be related to tax and ins. fraud, and to alleged payoffs to women who said they had had affairs with Trump. The story is also getting play in Reuters, CNN, and the Associated Press, among others.

A taste of what’s to come: Dive into the Gray Lady’s investigation from last year looking at two decades worth of Trump’s tax data, which show he avoided paying federal income taxes for 11 years, and paid just USD 750 (no, we’re not missing a mn or bn there) in each of 2016 and 2017.

Expect an SMS if you just used a prepaid mobile scratch card: The National Telecommunications Regulatory Authority (NTRA) has issued new guidelines for mobile network operators that requires them to send a text message notifying their customers of new activity or changes to their mobile accounts when using prepaid cards. This means you will get a text alert if you just topped up your mobile phone, or if you were charged any service fees or tax.

*** CATCH UP QUICK on the top stories from yesterday’s edition of EnterprisePM:

• Nassef Sawiris is backing a USD 4.7 bn takeover offer for his 7.41% stake in private jet operator Signature Aviation after a months-long bidding battle.
• MENA startups received capital from 256 active investors, with Egypt making up almost a quarter of the region’s venture capital transactions.

All large taxpayers in the country will be required to log their invoices electronically on the Tax Authority’s new e-invoicing system as of 15 May, the authority said (pdf). This will mark the third phase of the new system, which the authority piloted with 134 companies last November. The second phase went live earlier this month with another 347 companies added to the list.

No idea what e-invoicing system we’re talking about? We’ve got you covered with our primer on the system, its purpose, and the timeline for its implementation here.

Informal laborers will receive the final instalment of their EGP 500 monthly stipend on 7 March, the Planning Ministry announced in a statement. The stipend was introduced last year to support day laborers through the economic fallout from covid-19.

Egyptian students living abroad will be able to register to sit the Thanaweya Amma exam online starting 14 March, the Education Ministry announced.

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CIRCLE YOUR CALENDAR-

HAPPENING TODAY- US ambassador to Egypt Jonathan Cohen is speaking about US-Egypt relations in a webinar hosted by AmCham Egypt today at 3pm CLT. The webinar, titled “The US-Egypt Partnership and Outlook for 2021,” will see Cohen cover bilateral relations between the countries and share his outlook for this year.

Calling all exporters: Learn how to navigate the new Nafeza pre-registration customs system at this webinar hosted by the Food Export Council and the Customs Authority. The event takes place this Wednesday, 24 February, at 12pm CLT. Tap or click here to register.

The Afro Future Summit is taking place this Thursday, 25 February. The summit will be held virtually.

The Egypt International Art Fair also kicks off this Thursday at Dusit Thani Lakeview Cairo, and is set to wrap on Saturday, 28 February.

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

Our vaccination program got a shot in the arm (pun intended) as Egypt took receipt overnight of 300k doses of the Sinopharm vaccine, delivered to us from China as a gift (watch, runtime: 6:21). The shipment couldn’t have arrived at a better time, as the Health Ministry plans to allow Egyptians to register to take a covid-19 vaccine next week. Priority will be given to elderly citizens and those with chronic illnesses. We should be getting a batch of the Oxford-AstraZeneca vaccine next week, Health Minister Hala Zayed said at a presser on Sunday.

The Sinopharm jabs arrived hours after President Abdel Fattah El Sisi discussed cooperation on fighting covid-19 with Chinese President Xi Jinping, according to an Ittihadiya statement. The two also discussed attracting Chinese investments in tech, and Egypt’s key participation in China’s global infrastructure development strategy, the Belt and Road Initiative.

The Health Ministry reported 623 new covid-19 infections yesterday, up from 608 the day before. Egypt has now disclosed a total of 178,744 confirmed cases of covid-19. The ministry also reported 51 new deaths, bringing the country’s total death toll to 10,404.

High income countries are hogging the world’s supply of vaccines and not leaving enough for poorer countries, World Health Organization (WHO) head Tedros Ghebreyesus at a press briefing yesterday. Despite USD bns in donations from countries like Germany, France, and the UK to get jabs to developing countries through the WHO’s Covax facility, some countries’ requests for extra doses from vaccine manufacturers could strain supplies and affect Covax’s efficacy.

Abu Dhabi Islamic Bank (ADIB) looks to be on the way out from Assiut Islamic Trading after its board approved (pdf) a mandatory tender offer (MTO) submitted by a group of shareholders earlier this month for a 76% stake in the company. The investors — led by Amr Ibrahim Selim and Mohamed Ahmed Shalaby — offered to buy the 5+ mn shares at EGP 28.5 apiece, valuing the stake at close to EGP 145 mn. ADIB owns 66% of the company, 40% of which it owns directly and the other 26% through its subsidiaries including Cairo National Company Investments, in which it holds a 74.75% stake.

This isn’t the only subsidiary ADIB may be exiting: The bank confirmed this month that Hong Kong-based Zeta Investments has submitted an offer to purchase 90% of brokerage house Alexandria National Company for Financial Investments (ANFI) for EGP 5.51 per share. The Gulf lender’s total holdings in the brokerage are 84.99%, including a 9% direct stake, a 34.99% indirect stake through its subsidiary ADI Lease, and 40% through Cairo National Company Investments.

Why the sales? The bank is looking to restructure and sell some of its non-core businesses, CEO and Managing Director Mohamed Aly told Enterprise, without disclosing further information.

The board also approved raising the bank’s capital to EGP 7 bn instead of the current EGP 4 bn.

ADIB expands into Egypt’s NBFS sector: The bank will establish two new companies in the microfinance and consumer finance sectors, according to the bank’s governance report (pdf). The first subsidiary will have a total capital of EGP 25 mn, while the other will have EGP 10 mn of starting capital. The bank will own a 98% stake in each of the two units.

IN OTHER M&A NEWS-

Al Manara’s Merit University may be getting new shareholders: Real estate investment firm Al Manara is considering selling stakes in its wholly owned Merit University to investors, a source familiar with the matter told Enterprise. The company has appointed Compass Capital as its financial advisor to study requests by individual investors and equity funds, the person said. The university recently opened faculties of medicine and physical therapy and is working on setting up two new faculties for dentistry and pharmacy, and has plans to establish a new hospital.

Franchisers are now on the list of potential buyers for 80-90% of military-owned Wataniya Petroleum, Sovereign Fund of Egypt (SFE) CEO Ayman Soliman told Reuters. The inclusion of franchising as a potential model for the sale came after the fund saw that some markets, including Europe, follow that model. The SFE, which is managing the sale on behalf of the Defense Ministry’s National Service Products Organization (NSPO), will retain a 10-20% stake in Wataniya, with the remainder going to a private sector buyer on a long-term leasehold basis, Soliman tells the newswire.

Where we are in the selling process: The SFE has “done the initial work on the asset,” including producing a teaser and completing the process letter “to engage potential partners,” according to the SFE boss. The sale is on track to go through by the end of 1H2021, he said.

Soliman confirmed that Wataniya has seen interest from a number of GCC buyers, including the Abu Dhabi National Oil Company. Unconfirmed press reports had previously suggested that other potential buyers include state-owned Emirates National Oil Company and Saudi Aldrees Petroleum and Transport Services Co., along with Qalaa Holdings’ TAQA Arabia.

Background: Wataniya’s sale comes as part of a wider effort to privatize military-affiliated companies in 2021 which will include at least three other — as yet, unnamed — companies alongside Wataniya and water bottling company Safi. The SFE and NSPO had signed a cooperation agreement early last year authorizing the fund to market subsidiaries of military-affiliated companies to private investors with the ultimate goal of listing their shares on the EGX.

The Pharmacists Syndicate is still fighting tech advancements in the industry and is now filing a lawsuit against Vezeeta, accusing the digital healthcare platform of illegally selling meds directly to consumers through its newly launched e-pharmacy, the syndicate said in a statement. The syndicate maintains that any sale of meds outside of brick and mortar pharmacies (owned by an individual, licensed pharmacist) is illegal, and claims the app also violates a law governing the advertising of medicines by employing social media and television ads. Vezeeta founder Amir Barsoum will also be under investigation as an individual for his role in enabling the alleged breaches of the law. The syndicate had also previously reported Vezeeta to the Consumer Protection Authority and the Interior Ministry’s IT crimes department, the statement said.

The case is the latest in a series of complaints by the syndicate against digital healthcare and medicines platforms: The syndicate filed a lawsuit against digital pharmacy platform 3elagi under the same premise late last year, and called on pharmacists to boycott Ibnsina Pharma after the company announced it planned to acquire a stake in 3elagi’s mother company. Presumably in an effort to avoid irking its core customers, Ibnsina then walked away from the purchase.

SMART POLICY- Banks are now required to increase micro, small, and medium enterprises’ share of their loan portfolios by five percentage points to 25%, under a Central Bank of Egypt (CBE) directive (pdf). The move is expected to translate into an extra EGP 117 bn in funding for 120k MSMEs by the end of 2022, the CBE said. Small enterprises alone will be allocated 10% of banks’ lending portfolios — or around EGP 55 bn. Banks will be required to set a plan to achieve these levels of funding distribution, and report their progress on a quarterly basis. The directive is part of the CBE’s financial inclusion strategy, launched in 2019, which outlines SME support as one of its key pillars.

MSMEs’ credit scores will also be evaluated and assigned using behavioral scoring models, rather than financial statements, under the CBE’s instructions. Banks will be required to devise their own behavioral scoring system, which should factor in risk, be adaptable to businesses providing different products and services, and be reviewed regularly. This model can only be used for businesses whose total annual sales are less than EGP 20 mn. Loans should also only be provided in EGP.

OTHER REGULATORY CHANGES FOR LENDING TO MSMEs: The CBE also decided to up the relative risk weight of banks’ investments in funds of funds and SME-focused funds to 20% from 0%, Hapi Journal reports. Under the new regulations, banks will only be allowed to invest up to 10% of their capital in a single fund. In the event that limit is exceeded, the excess must be deducted from its Tier 1 capital when calculating its capital adequacy ratio. Banks’ investments in SME-focused equity funds count toward fulfilling their quota of SME support, according to a 2019 decision.

Egypt’s answer to Robin Hood just rolled out a mutual fund on its platform: Users of zero-commission stock trading app Thndr can now invest in Azimut Egypt’s AZ-Savings mutual fund (pdf), Thndr said in a press release (pdf) yesterday. This is the first fund Thndr has offered on its platform since it launched last year, and will allow retail traders to invest in a variety of fixed-income instruments. Investors can buy into the fund daily and take their returns weekly, the company said.

About the fund: AZ-Savings — launched by the European asset manager in October — has so far seen EGP 650 mn of inflows, said Azimut Egypt MD Ahmed Abou El Saad. It is a fixed-income vehicle, focusing on low-risk and mostly short-term instruments such as treasury bills, corporate bonds and sukuk, as well as longer-term bonds.

About Thndr: Thndr became the first company to be awarded a brokerage license since 2008 when it launched last year. The app offers three zero-commission plans, including one unpaid scheme and two plans priced at EGP 15 and EGP 55 per month. The company has received an undisclosed amount of pre-seed funding from Y-Combinator, 4DX Ventures, Endure Capital, the Raba Partnership, and MSA Capital.

ALSO FROM PLANET STARTUP-

Pre-seed and seed stage startups in Egypt are eligible for a USD 100k investment from a MENA fund set up by 500 Startups and Saudi’s Sanabil Investments, according to Business Wire. 500 Startups is a Silicon Valley-based global VC fund and Sanabil Investments is a Riyadh-based investment fund owned by Saudi’s sovereign wealth fund. The Sanabil 500 MENA Seed Accelerator Fund will invest in startups chosen to participate in their accelerator program, in addition to investing “opportunistically in other pre-seed and seed stage startups throughout MENA,” with an eye to invest in a total of 100 startups. Applications for the accelerator opened yesterday, with business owners from across the MENA region eligible to apply.

The Suez Canal recorded revenues of USD 496 mn in January, dipping a negligible 0.5% y-o-y compared to January 2020, Al Mal reports. The number of ships passing through the canal dipped 3.1% y-o-y to 1,596 ships, compared to 1,645 during the same month last year.

Recently passed amendments Real Estate Registry Act were the biggest talking point on the airwaves last night as the talking heads began to dissect what the legislative changes mean on the ground.

The main takeaway: Judges are now the ones mandated with validating real estate sale and purchase agreements, according to the Real Estate Registry and Notarization’s Gamal Yaqout, who sat down for a discussion of the matter on Al Hayah Al Youm. The amendments do not scrap the “signature validation” route — a relatively cheap and fast method to register real estate by filing a case to prove that the signatures on the sale and purchase contract are valid and belong to the right buyer and seller, Court of Cassation lawyer Wissam Ismail explained to host Mohamed Sherdy (watch, runtime: 23:06).

Not registering your property will mean not having access to basic utilities like electricity and water, Justice Minister Omar Marwan warned Ala Mas’ouleety’s Ahmed Moussa. The actual fees for real estate registry are capped at EGP 2k, regardless of the property size, Marwan said (watch, runtime: 16:05). Some 95% of the country’s properties are not registered, Kelma Akhira’s Lamees El Hadidi pointed out as she encouraged policymakers to consider slashing the registration fees to push for greater compliance (watch, runtime: 2:26).

CBE initiatives + policies get airtime: Banque Misr Chairman Mohamed El Etreby had a chat with Masaa DMC’s Eman El Hosary on the Central Bank of Egypt’s (CBE) regulations on banks’ lending portfolios to MSMEs, which he said are part of the country push to bring the informal economy into the formal economy (watch, runtime: 6:08). (We have chapter and verse on the new regs in the news well, above.) Meanwhile, Deputy CBE Governor Mai Aboul Naga recapped parts of the central bank’s monetary stimulus package, including its tourism support initiative and a decision to scrub financially distressed companies from the CBE and i-Score’s blacklist. Aboul Naga also covered the CBE’s decision to allow those aged 16-21 to open bank accounts without their guardians’ consent (watch, runtime: 31:16).

Also on the airwaves last night:

• Cabinet’s Information and Decision Support Center now has a mobile app to keep users informed and dispel rumors. (Mohamed Sherdy on Al Hayah Al Youm | watch, runtime: 12:34)
• The Environment Ministry is organizing a marathon with adventurer Omar Samra in Fayoum’s Qarun to promote tourism in the governorate, Minister Yasmine Fouad said. (Mohamed Sherdy on Al Hayah Al Youm | watch, runtime: 03:07)

Fawry intends to double its authorized capital to EGP 1 bn, according to documents submitted to the EGX picked up by the local press. The company also plans to raise its issued capital by EGP 100 mn to EGP 453.65 mn through the issuance of 200 mn freeshares as a benefit-in-kind at a nominal value of EGP 0.5 apiece.

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

• Al Sharif Group (ASG) has reportedly agreed with Mandarin Oriental Hotel Group to manage downtown’s long dormant Shepheard Hotel, according to Holding Company for Tourism and Hotels Chairman Mervat Hataba. ASG is working on refurbishing the hotel.
• People caught dumping garbage in the country’s sewage system could face fines of up to EGP 10k and a formal investigation by the public prosecution.

The back-and-forth between Washington and Beijing over sanctions shows no signs of abating, with Chinese Foreign Minister Wang Yi saying yesterday that the US must lift its sanctions against China and stop “sabotaging” its tech sector, the Financial Times reports. The minister also warned the US against continued meddling in “domestic issues,” presumably in reference to US President Joe Biden’s statement on holding China accountable for civil and human rights breaches, including its persecution of 1 mn Uighur Muslims.

The EU plans to impose travel bans and asset freezes on at least four Russian officials in response to the jailing of activist Alexei Navalny, Euro News reports.

IN DIPLOMACY:

Continued military cooperation between the US and Egypt and anti-terrorism efforts were on the agenda for a meeting between President Abdel Fattah El Sisi and Centcom commander Kenneth McKenzie Jr. in Cairo yesterday, according to an Ittihadeya statement. The US last week approved a USD 197 mn arms sale to Egypt, contingent on Congress approval.

The International Handball Federation (IHF) has suspended Egyptian Handball Federation head Hesham Nasr from his position for one year, the organization decided during a meeting last week, state newspaper Ahram Gate reports. The suspension came as a result of Nasr entering and leaving the Egyptian handball team’s isolation area several times throughout the Men’s Handball World Championships held in Egypt last month, which organizers say put the team at risk of contracting covid-19 during a critical time.

February: France’s finance minister, Bruno Le Maire, is set to visit Egypt.

21-25 February (Sunday-Thursday): Gulfood 2021 — the world’s largest food and beverage exhibition — takes place at the Dubai World Trade Center.

21-25 February (Sunday-Thursday): Russian nuclear energy company Rosatom is hosting a Science Festival Week that will take place at the Russian Centre for Science and Culture in both Cairo and Alexandria.

22-24 February (Monday-Wednesday): Second Arab Land Conference on land management, efficient land use, among other topics.

22 February- 5 March (Monday-Friday) Egypt will host the World Shooting Championship in 6 October’s Shooting Club, with 31 countries set to participate

26 February (Thursday): The Afro Future Summit will take place virtually.

26-28 February (Thursday-Saturday): The second edition of the Egypt International Art Fair will be held at Dusit Thani Lakeview Cairo.

27 February (Saturday): Mid-year school break ends for public schools and universities.

28 February (Sunday): Deadline for businesses, sole traders, and those generating income from sources other than their day job to file wage tax returns through the electronic filing system.

March: Potential visit to Cairo by Russian President Vladimir Putin.

March: CBE / FRA fintech “innovation sprint.”

1 March: Eastern Mediterranean Gas Forum comes into effect.

1-5 March (Monday-Friday): Aswan Forum for Peace and Development will take place virtually.

4 March (Thursday): OPEC+ meeting.

4-6 March (Thursday-Saturday): Cairo Fashion & Tex trade show, Cairo International Convention Centre, Cairo, Egypt

8 March (Monday): The IDC Future of Work Egypt conference will be held virtually featuring experts from Egypt and Jordan.

9-11 March (Tuesday-Thursday): EduGate 2021 – Enter The Future conference, Kempinski Royal Maxim Hotel, Cairo, Egypt.

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

23 March (Tuesday): The second edition of the Egypt Retail Summit takes place at the Nile Ritz Carlton hotel.

25-27 March (Thursday-Saturday): The Union of Arab Banks holds a forum on compliance and combating financial crime, Sharm El Sheikh.

25-27 March (Thursday-Saturday): The Real Gate real estate exhibition, Egyptian International Exhibition Center, Cairo.

31 March (Wednesday): Deadline to visit the moroor and get an RFID sticker affixed to your car’s windshield — or run afoul of the Traffic Police.

1-3 April (Thursday-Saturday): HVAC-R Egypt Expo.

8-10 April (Thursday-Saturday): The TriFactory’s Endurance Festival at Somabay.

13 April (Monday): First day of Ramadan (TBC).

25 April (Sunday): Sinai Liberation Day.

29 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC),

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

1 May (Saturday): Labor Day (national holiday).

2 May (Sunday): Easter Sunday.

3 May (Monday): Sham El Nessim.

13-15 May (Thursday-Saturday): Eid El Fitr (TBC).

25-28 May (Tuesday-Friday): The World Economic Forum annual meeting, Singapore.

1 June (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).

7 June-9 June (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

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

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

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

30 June (Wednesday): 30 June Revolution Day.

1 July: (Thursday): National holiday in observance of 30 June Revolution.

30 June- 15 July: National Book Fair.

1 July (Thursday): Large taxpayers that have not yet signed on on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

19 July (Monday): Arafat Day (national holiday).

20-23 July (Tuesday-Friday): Eid Al Adha (national holiday)

23 July (Friday): Revolution Day (national holiday).

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

9 August (Monday): Islamic New Year.

12 August (Thursday): National holiday in observance of the Islamic New Year.

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

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

1 October (Friday): Expo 2020 Dubai opens.

6 October (Wednesday): Armed Forces Day.

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

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

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

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

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

27 June – 3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.