Thursday, 18 March 2021

Misr Capital won’t merge with CI Capital (for now)

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, everyone. We hope you’re looking forward to a fantastic Thursday as we wrap up week 11 of 2021. That means we have just a week and a half until the end of 1Q — and 26 days until the start of Ramadan. The Colonel was right: Time accelerates as you get older.

It’s interest rate day — and all signs point to a hold: All 12 people we surveyed last week forecast the central bank would leave rates unchanged when it meets later today, citing the possible impact of heightened commodity prices on domestic inflation, and the potential for rising bond yields in the US to hit our all-important carry trade. In a similar Reuters poll, 15 analysts expected rates to be left on hold and one penciled in a 50 bps cut.

Where rates stand currently: The CBE’s overnight deposit rate is at 8.25% and the lending rate is 9.25%, while the main operation and discount rates are at 8.75%. The central bank slashed rates by 400 bps last year, including an emergency 300-bps cut in March to protect the economy from the fallout from covid-19, and two 50-bps cuts in September and November.

IT’S A BIG DAY FOR: The AstraZeneca / Oxford jab, with a top European Union regulator set to announce the results of its investigation into blood clots in a vanishing small number of recipients of the jab. Both the head of the European Commission and the World Health Organization said late yesterday that they trust the AstraZeneca jab. “I trust AstraZeneca, I trust the vaccines,” EC boss Ursula von der Leyen said. In a collective freakout, EU countries including France, Germany, Ireland and more pulled the jab. Canada continues to use it, and Ireland, France and Italy have all signaled they’re ready to quickly resume using the AstraZeneca jab if today’s report allows it.

*** CATCH UP QUICK from Wednesday’s edition of EnterprisePM:

  • Anyone living in Egypt who is 18 or older can register now to be vaccinated against covid-19 as registration through the Health Ministry’s online portal is no longer limited to senior citizens, healthcare workers, and individuals with chronic conditions.
  • The sale of an 80-90% stake in military-owned Wataniya Petroleum has been pushed back to 2H2021 from the first half of the year as was previously expected.
  • EFG Hermes’ 2020 grew for the third year in a row as the company’s buy-side, non-bank lending, and capital markets businesses performed solidly throughout the year.

YOUR WEEKEND READING assignment: The Biden administration doesn’t seem to like freetrade any more than Agent Orange did, the New York Times writes. The idea that trade liberalization “like the spread of democracy and market capitalism … is a universal and worthy goal” is no longer “gospel” in DC, the Gray Lady suggests. Kathering Tai, Biden’s nominee to run the Office of the United States Trade Representative, is “promising to focus more on ensuring that trade [agreements] that protect the rights and interests of American workers, rather than exporters or consumers.”

PSA #1- The Tax Authority isn’t planning to extend the 31 March deadline for real estate tax filing, director of taxpayer services at the Egyptian Tax Authority Mohsen El Gayar told Yahduth fi Misr’s Sherif Amer (watch, runtime: 2:52).

PSA #2- But do you know who has given you more time to file your taxes? Your good old Uncle Sam. US citizens and dual nationals will have until 17 May to file their individual tax returns, the IRS said in a statement out overnight. You can also file something called Form 4868 to ask to have until 15 October to make your filing, but you’d still need to pay whatever taxes you think you owe by the May deadline. CNBC has more.

** EDITOR’S NOTE- EnterprisePM will not publish this afternoon. Longtime readers know we take occasional publication holidays to tool up for something new (and sometimes even take a breather). Today is one such day for EnterprisePM. Both our Morning and Afternoon Editions will be back in your inbox on Sunday morning at the appointed hour.

MARKET WATCH-

The US Federal Reserve reinforced its dovish stance, deciding yesterday to keep interest rates near zero in a unanimous vote. Fed officials expect to hold rates where they are until at least 2023, despite their projections (pdf) for economic growth and inflation indicating a more positive outlook than a few months ago, thanks to the Biden administration’s USD 1.9 tn stimulus program and the rollout of the vaccination program.

The Fed is now looking to bring inflation “moderately above 2% for some time” to compensate for the current shortfall and maintain the long-term average rate at 2%. It will only consider raising interest rates once inflation is “well anchored” at this target, the statement says. Bloomberg and the Wall Street Journal have more.

A stock market crash? That’s nothing to worry about, says veteran FT commentator Martin Wolf in a piece that calls for calm if and when stocks suffer a serious pullback after a record-breaking bull run. With interest rates rising in anticipation of a strong economic recovery and heightened inflation, a stock market accustomed to cheap debt may well suffer a correction. Equities do not equal the real economy though, and while a crash will certainly hurt investors, it would only produce a wider economic crisis if badly handled by policymakers, Wolf argues.

That’s all well and good if you’re in the US, but in EM? Emerging markets were concerned about potentially being faced with a situation similar to the 1980s debt crisis due to the aggressive stimulus measures in the US and what they thought might be sooner-than-expected tightening, Wolf writes. The asset class got a taste of that scenario earlier this month, when the bond sell-off in the US ricocheted into emerging markets, producing the first day of outflows in more than five months.

Investors are certainly worried: Rising inflation and interest rates have overtaken covid-19 as the #1 investment threat, according to a Bank of America survey of investors, the FT reports. Respondents, who collectively manage over USD 579 bn worth of assets, voiced concerns that a strong economic recovery will combine with the historic volumes of fiscal and monetary stimulus to send prices rising uncontrollably higher, and about a possible 2013-esque spike in interest rates.

Between a rock and a hard place: “The Fed’s challenge is to manage the transition from a low to a high interest rates regime without causing market mayhem,” said analysts for financial services group ING. That’s likely to be easier said than done though. “It’s a catch-22 for the Fed,” said Jim Caron, portfolio manager at Morgan Stanley Investment Management. “They want to communicate that they are going to be patient but the more patient they are, the more people will worry about inflation.”

The treasury sell-off is spreading to corporate bonds: Borrowing costs for US companies are rising as the sell-off in US treasuries seeps into the corporate bond market, the FT says. The average yield on investment-grade debt rose to 2.28% last week, up 0.17 percentage points in March and 0.5 points in 2021, according to data provider ICE Data Services. The average price of high-rated corporate debt is now at its weakest since 2Q2020.

The stock market mania may still have a while to run though, as the Biden administration prepares to dole out its USD 1.9 tn stimulus package. Analysts at Vanda Research predict that retail investors will buy almost USD 3 bn worth of stocks when stimulus checks are paid out this week, according to the FT. This would be some USD 1.5 bn higher than the average daily inflow over the past month, and set a new record for single-day retail buying activity.

CIRCLE YOUR CALENDAR-

Talking sustainable manufacturing with BEBA: The British-Egyptian Business Association (BEBA) will host a virtual conference on how Egyptian and UK firms can work together on sustainable manufacturing projects in Africa in the post-Brexit environment on Tuesday, 23 March. Check out the agenda here (pdf).

The second edition of the Egypt Retail Summit takes place at the Nile Ritz Carlton hotel next Tuesday 23 March, bringing together retail brands in Egypt and the region.

Our friends at the French Chamber of Commerce and Industry in Egypt are organizing a working breakfast with Sovereign Fund of Egypt CEO Ayman Soliman on Tuesday, 6 April at the residence of French ambassador Stéphane Romatet. Contact azza.adel@ccfe.org.eg if you would like to attend.

BEBA is holding a webinar on digital banking and fintech on Wednesday, 7 April, it announced yesterday. Register here.

enterprise

Call us to book a heartfelt coastal celebration full of pampering and love at Somabay.

M&A WATCH

Misr Capital won’t merge with CI Capital (for now)

Banque Misr is likely keeping its investment arm, Misr Capital, separate from CI Capital, in which it now holds a 90% stake, Deputy Chairman Akef El Maghraby told Al Arabiya yesterday. The state-owned lender could “integrate” the activities of the two investment arms and will likely combine some operations, including their asset management operations, with an eye to diversify Banque Misr’s non-banking financial products and underpin its growth in the sector, Maghraby said. Misr Capital has some EGP 27 bn in assets under management, while CI’s AUM currently stands at EGP 8 bn, according to Maghraby.

Watch this space: Misr Capital has been active and aggressive in going after new business since it brought on an experienced management team at the end of 2018. Khalil Bawab moved over after a 10-year run with EFG Hermes to become Misr Capital’s CEO and MD, while Omar Radwan joined as chief operating officer after a long run at HC Securities. The firm has since been busy planting its flags in the asset management and securitization segments, among others, and is pressing into investment banking. Misr Capital today offers asset management, fixed-income brokerage, private equity and investment banking services and manages a portfolio of largely state-owned assets.

The final steps of the acquisition: Three of CI Capital’s biggest stakeholders — CIB, Ismail Ali Al Tourki and the Mahmoud El Gammal Charity Foundation (pdfs) — transferred their combined 24.8% stake in CI Capital to Banque Misr, rounding out the EGP 3.06 bn transaction.

SEPARATELY- Banque Misr could contribute EGP 25 bn to the Central Bank of Egypt’s new mortgage finance initiative, which will provide EGP 100 bn-worth of subsidized mortgages to low- and middle-income earners, El Maghraby said. The new initiative will allow would-be homeowners to tap mortgage finance at a subsidized rate of 3% and will offer a 30-year repayment period. The CBE has yet to announce which banks will dole out the funding. Subsidized mortgages, which will be offered on houses valued at up to EGP 350k, will cost the state treasury a total of EGP 120 bn, provided interest rates remain unchanged, Deputy Governor Gamal Negm told Ala Mas’ouleety’s Ahmed Moussa last night (watch, runtime: 25:50). Middle-income borrows — classified as individuals earning up to EGP 10k per month or families with a collective monthly income of up to EGP 14k — will repay the mortgages in monthly installments of up to EGP 1.7k.

M&A WATCH

Sovereign fund eyeing a piece of Atyab? Plus: The latest on the Mogamma.

Sovereign fund looking to get in on ADQ’s acquisition of Atyab? The Sovereign Fund of Egypt (SFE) is reportedly mulling investing alongside Abu Dhabi sovereign wealth fund ADQ in the latter’s bid to acquire a majority stake in frozen meats and poultry company Atyab, according to a report in Al Mal’s print edition, which cites unnamed sources with knowledge of the transaction.

Where do things stand? Last we heard, ADQ’s food subsidiary Agthia was expected to wrap up its due diligence on Atyab this month, with an eye to close the acquisition of at least 75% of the Egyptian meat and poultry company no later than the end of the first half of 2021. EFG Hermes has been tapped as financial advisor on the transaction.

ALSO FROM THE SFE- The conditions booklet for the planned overhaul of the Mogamma El Tahrir will be made available next month, Planning Minister Hala El Said told Yahduth fi Misr’s Sherif Amer (watch, runtime: 2:18). The fund will give prospective private-sector partners a four-month window to purchase the booklet and present their bids on the project. Feasibility studies on the revamp are still underway, and will likely see the iconic building transformed into a multi-purpose building, with a portion turned into an apartment hotel and others used for commercial purposes, according to the minister.

TRADE

Hop on board

Egypt could join in a new USD 1 bn continental transit [assurance] scheme from AfreximBank, which is designed to encourage trade across Africa by improving tax collection and cutting back on trade costs. The new scheme will “help remove bottlenecks” in implementing the new African Continental Freetrade Zone (AfCFTA) and could be a boon for trade through the Cairo-Cape Town highway, AfreximBank’s Managing Director for Intra-African Trade Kanayo Awani tells The Africa Report. AfreximBank recently launched the scheme with a pilot USD 200 mn agreement to cover the COMESA region, which includes Egypt. Afreximbank aims to issue the first transit bonds in 3Q2021

What is the scheme? The plan will see AfreximBank act as a regional and continent-wide guarantor for trade by providing transit bonds covering the full range of borders that goods are required to cross, Awani said. Transit bonds are a kind of ins. given to freight shippers to protect against the risk of goods being disposed of in transit countries.

What’s the benefit? Without regional transit assurance schemes, traders are required to obtain national bonds for each border they cross, driving up transit costs. Africa currently has no regional transit framework, pushing transit costs in African countries such as Egypt to be more than 150% higher than the average in Europe. Transit assurance provided by the African lender would enable businesses to release working capital otherwise tied up as collateral against transit bonds, while also accelerating the movement of trade exports. The scheme will also ensure that when goods make a U-turn, the duties and taxes due would still be settled.

DEVELOPMENT FINANCE

Banque du Caire gets USD 100 mn EBRD loan for SMEs + trade finance

Egyptian MSMEs will have access to USD 50 mn worth of financing through Banque du Caire, which is getting a USD 100 mn loan from the European Bank for Reconstruction and Development (EBRD) to support the Egyptian economy, the bank said in a press release (pdf). USD 50 mn of the package is earmarked for on-lending to private sector small businesses which the EBRD says “remain an underserved segment of the real economy.”

The other half of the facility is earmarked for trade finance under the EBRD’s Trade Facilitation Program, which aims to boost foreign trade between EBRD countries by underwriting international trade transactions made by banks. The loan will help BdC meet demand for import and export transactions, including issuing bank assurance and providing monetary advances to bankroll private sector companies’ pre-export and post-import trade-related loans, the statement said.

ECOMMERCE

EFG Hermes, Universal Group to launch new ecommerce site

EFG Hermes and Universal Group are collaborating on a new ecommerce website that will allow the home appliance company to sell directly to its customers, the investment bank said in a statement (pdf) yesterday after signing the agreement. EFG subsidiary PayTabs Egypt will handle payments on the platform while its consumer finance arm Valu will offer payment plans. Business Boomers, a fintech startup owned by EFG, will host Universal’s online store on its platform. “Signing this partnership today with Universal Group is a key milestone in our journey to develop a full-fledged non-bank financial services ecosystem that leverages the synergies inherent in our business model throughout the group,” said Walid Hassouna, EFG Hermes Finance CEO and head of debt capital markets.

POLICY

Pay us to stop reproducing like rabbits?

SMART POLICY- Families could be in line for financial incentives if they have fewer children under a new plan announced by the government this week as part of its family planning strategy. The scheme would see the government set up a new online portal through which families can access services provided by a state-backed fund that would reward those that stick to certain “criteria to [better] control population growth,” Planning Minister Hala El Said said on Tuesday in a meeting with a number of cabinet ministers. Cabinet is due to discuss the planned fund in its weekly meeting next Wednesday.

What we know so far: Details are scant, but Financial Regulatory Authority boss Mohamed Omran signaled in a separate meeting with cabinet members yesterday that proposals are already on the table for “an execution mechanism.” There will be specific eligibility criteria for families to obtain the incentives, Omran added, without disclosing further information.

The government’s family planning strategy will also involve providing contraceptives and other family planning tools at no cost, the planning minister said. The government will also broaden the participation of NGOs that work to curb population control, El Said added.

Running in parallel to the family planning initiative is a plan to increase women’s labor market participation through vocational training programs and direct jobs. The plan will target up to 1 mn women aged 18-45 by setting up workshops and micro-enterprises for women, in addition to providing another 2 mn women with training on project management as well as financial literacy and inclusion, the minister added.

The government is working multiple fronts to get our population growth under control: El Said had said on the airwaves last month that the government is looking at offering family planning financial incentives as part of a bid announced late last year to bring Egypt’s birth rate down from 3.4 to 2.4 children per woman by 2030, though President Abdel Fattah El Sisi said at the time that the government isn’t yet looking to introduce “aggressive” family planning measures. Family planning programs, including the Two is Enough initiative, are aiming to get 20 mn families on board by mid-2021, while MPs are also working on the overpopulation problem by legislating new family planning rules, though we’re yet to hear more about the proposed bill.

ALSO FROM CABINET-

A USD 50 mn loan that was recently approved by the Arab Fund for Economic and Social Development to fund Egyptian SMEs was greenlit in the cabinet’s weekly meeting.

FINANCIAL INCLUSION

We still ♥ banknotes

Egypt is the world’s second most banknote-reliant country — and has the third highest percentage of unbanked citizens. Only 45% of payments in Egypt are cashless transactions and the credit card penetration rate currently stands at a measly 3%, Merchant Machine said in a report. At least 67% of the Egyptian population remains unbanked, with only Morocco (71%) and Vietnam (69%) with a higher rate of unbanked adults, according to the report. We also have the third-lowest number of ATMs per capita (20 per 100k adults), coming in just above Kenya and Nigeria.

Led by the Central Bank of Egypt and with the active participation of the Tax Authority, policymakers have for several years now been aggressively pushing to phase out cash and enhance financial inclusion. The drive has seen several key decisions to nudge the country towards a paperless future, including the National Payments Council’s 2017 decision to ban government entities using paper cheques or cash payments to private sector businesses for amounts above EGP 20k. The Government Accounting Act later stipulated that all government transactions worth more than EGP 500 must be electronic. The pandemic has also helped push e-payment activities, with the number of mobile wallets in Egypt jumping at least 17% between March and October of last year, and the central bank has offered a wide range of incentives to get more merchants onto point-of-sale machines while ordering fee holidays on digital banking transactions.

COVID WATCH

A third wave is neither inevitable — nor is it unlikely

The third wave of covid-19 infections hasn’t yet hit Egypt — and it’s neither inevitable nor unlikely, presidential health advisor Mohamed Awad Tag Eldin told Yahduth fi Misr’s Sherif Amer (watch, runtime: 2:10). The Health Ministry is also keeping a close eye on the outcome of countries’ reports on their review of the AstraZeneca vaccine, after the jab was temporarily suspended in a handful of places over blood clotting incidents, Tag Eldin said (watch, runtime: 3:13).

Egypt is set to receive the first 5 mn does batch of an 8.6 mn dose order of the AstraZeneca vaccine by the end of the month, Noha Assem, advisor to the health minister reminder Al Hayah Al Youm’s Mohamed Sherdy (watch, runtime: 7:03). Officials have in recent days put the size of the AstraZeneca order variously at 5 mn and 6 mn doses — enough for 2.5-3 mn people. The news comes as the ministry’s vaccination portal now allows registration of everyone in Egypt over the age of 18, including citizens, foreign residents and refugees.

The Health Ministry reported 645 new covid-19 infections yesterday, up from 640 the day before. The ministry also reported 47 new deaths, bringing the country’s total death toll to 11,431. Egypt has now disclosed a total of 192,840 confirmed cases of covid-19.

It’s official: The EU is looking to introduce its “digital green certificate” — a covid passport of sorts that would act as documented proof of “vaccination, a negative test result, or a documented recovery from the virus,” the New York Times reports. While the certificate is not meant to be a “precondition” for European residents to travel across the bloc, each government will be allowed to set its own set of guidelines for what restrictions would be waived for certificate holders.

Not an EU resident? Don’t make summer vacation plans too quickly: The proposed certificate would not change the rules for travelers from outside the EU. The bloc could, however, grant certificates to travelers coming from the few countries exempted from its ban on nonessential travel.

Taking notes from its ex, the UK is considering introducing its own vaccine certificates that would allow people to travel and access non-essential services, business minister Kwasi Kwarteng said yesterday, according to Reuters.

enterprise

KUDOS

Finance: Nineteen Kenyan and Ugandan analysts have graduated from CIB’s flagship 10-month credit analysis training program, the bank said in a statement (pdf) yesterday. Twenty-four candidates were selected for the program, more than 50% of which were women. Participants were enrolled in the 500-hour course as part of the bank’s strategy to expand into Africa. CIB opened a representative office in Ethiopia in 2019, and acquired a 51% stake in Kenyan bank Mayfair a year later.

Sport: The Egyptian national rowing team bagged 17 medals at the 2021 World Rowing Virtual Indoor Championships, team sponsor the National Bank of Egypt said in a statement (pdf) yesterday.

Arts: Sensory friendly screenings of the Tom and Jerry Movie — designed specifically for children with autismwill be held at Mall of Egypt and City Centre Almaza’s Vox Cinemas everyday.

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

The government’s family planning strategy and women’s role in the economy were in the limelight on last night’s talk shows, as the women in cabinet blanketed the airwaves to recap and explain the key tenets of the strategy. Planning Minister Hala El Said had a chat with Yahduth fi Misr’s Sherif Amer (watch, runtime: 3:11) and Al Hayah Al Youm’s Mohamed Sherdy (watch, runtime: 3:15), while Environment Minister Yasmine Fouad also spoke with Sherdy about the sustainability and environmental component of the plan (watch, runtime: 7:00).

Also getting attention: The government’s natgas vehicle switch program, the procedures for which spokesperson of the Finance Ministry’s Automobile Financing Fund Tarek Awad broke down for Amer (watch, runtime: 3:54). Sherdy, meanwhile, had a more extensive chat about the strategy and the logic behind it with the initiative’s spokesperson, Ahmed Abdel Razek, and industry leader Alaa El Saba (watch, runtime: 24:58)

EGYPT IN THE NEWS

Leading coverage of Egypt in the foreign press this morning is activist Sanaa Seif receiving an 18-month prison sentence for “spreading false information” and defaming a public official. Amnesty International criticized the ruling and the story is getting digital ink in the Associated Press, Reuters, and BBC.

Coming in at a close second is pickups of Reuters’ look at the new administrative capital’s high-tech ambitions ahead of its planned inauguration this summer. The city is 60% complete, according to New Administrative Capital Company for Urban Development spokesperson Khaled El Husseiny.

ALSO ON OUR RADAR

Egypt will spend EGP 320 mn to establish a water treatment plant in Fayoum’s New Azab, Housing Minister Assem El Gazzar said in a statement yesterday without specifying a date. The project will process 60k cubic meters of water per day, he added. The plant is part of a larger project to upgrade the city’s wastewater infrastructure that will see the construction of four new treatment plants, as well as seven being expanded and 10 repaired.

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

PLANET FINANCE

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SUPERCYCLE WATCH- Oil prices are unlikely to surge dramatically this year despite vaccines boosting demand, with plenty of global supplies to prevent any potential new supercycle and OPEC+ at the ready to quickly deploy backup supply, the International Energy Agency (IEA) said in a report. Brent staged a rally since the oil market crash at the onset of the pandemic, reaching close to USD 70 a barrel last week for the first time in over a year, thanks to major producers surprising traders by deciding to keep a lid on supply. Still, a shortfall isn’t a likely scenario as inventories are at historically high levels, and have held up well despite the “steady decline,” the IEA said. OPEC+, the 23-nation coalition of oil producers led by Saudi Arabia and Russia, also have 9.3 mn barrels-per-day of spare capacity at hand as a result of the pandemic-induced cuts, and could use it to keep the market supplied, it added.

Oil erased its gains yesterday following the IEA report, with New York futures dropping 0.3% earlier today after having gained 0.8%, Bloomberg reported.

Mixed messages on a fresh boost of IMF funding for emerging economies: G7 countries have not yet agreed to proposals to boost the IMF’s firepower to provide more pandemic relief to the developing world, Reuters quoted unnamed sources as saying, a few hours after Japan’s Kyodo news agency reported that they had agreed to increase its reserves of Special Drawing Rights (SDRs) by USD 650 bn. This would be higher than the USD 500 bn proposed by the IMF. The seven countries are expected to sign off on the agreement Friday.

What are SDRs, and why do they matter for EMs post-pandemic? We had more on this in our PM edition earlier this week.

Putting the 2021 SPAC craze into perspective: The value of IPOs by special purpose acquisition companies in the first three months of 2021 has exceeded the USD 83.4 bn raised by SPACs in all of 2020, as well as the USD 29.5 bn generated by traditional IPOs, Reuters reports. Blank check companies are becoming an increasingly popular alternative to normal IPOs due to more lax regulations, and everyone from the US’ Build Acquisition Corp — whose USD 200 mn IPO pushed 2021 SPACs above their 2020 levels — to our very own Nassef Sawiris seems to be riding this investment trend.

But what’s a SPAC, you ask? We’ve got you covered with this explainer.

Down

EGX30

11,068

-1.1% (YTD: +2.1%)

None

USD (CBE)

Buy 15.66

Sell 15.76

None

USD at CIB

Buy 15.66

Sell 15.76

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

9,602

-0.6% (YTD: +10.5%)

Down

ADX

5,746

-0.1% (YTD: +13.9%)

Down

DFM

2,601

-0.8% (YTD: +4.4%)

Up

S&P 500

3,974

+0.3% (YTD: +5.8%)

Down

FTSE 100

6,763

-0.6% (YTD: +4.7%)

Down

Brent crude

USD 64.27

-0.51%

Down

Natural gas (Nymex)

USD 2.51

-0.8%

Up

Gold

USD 1,750.30

+1.3%

Up

BTC

USD 59,127.69

+5.5%

The EGX30 fell 1.1% yesterday on turnover of EGP 997 mn (32.6% below the 90-day average). Local investors were net sellers. The index is up 2.1% YTD.

In the green: Orascom Investment (+2.7%), Palm Hills Development (+1.9%) and Sidi Kerir (+1.6%).

In the red: CI Capital (-9.6%), Cleopatra (-3.0%) and Fawry (-3.0%).

AROUND THE WORLD

Ethiopia has no plans to delay the second filling of the Grand Ethiopian Renaissance Dam, which will go ahead as planned during the rainy season in July, Ethiopia’s Water Minister Seleshi Bekele told the press yesterday on the 10-year anniversary of the dam’s construction. Ethiopia began filling the reservoir last year without an agreement with Egypt and Sudan on a timetable for filling and operating the dam. Negotiations on the dam have continued to stall after Ethiopia rejected Sudan and Egypt’s proposal for mediation through an international quartet, with Ethiopian Foreign Minister Demke Mekonnen this week saying that an agreement can be reached through tripartite negotiations. Egypt and Sudan are reportedly aiming for a 15 April deadline to reach a binding agreement.

Egypt is taking its water problems to the UN with a statement — signed by 155 countries — on the recommendations to address these challenges ahead of the General Assembly meeting today on the water-related goals and targets of the 2030 agenda, Egypt’s permanent representative to the UN Mohamed Idris said in a statement. The statement stresses on the necessity of mediation efforts and effective water negotiations to avoid conflicts and achieve water security and regional stability.

WHO’S TALKING- On the foreign diplomacy front, President Abdel Fattah El Sisi and Greek Prime Minister Kyriakos Mitsotakis discussed EastMed developments, while Foreign Minister Sameh Shouky and his Swedish counterpart Ann Linde talked strengthening cooperation between the two countries. On the development front, Prime Minister Moustafa Madbouly and UN Resident Coordinator for Egypt Elena Panova looked at the EGP 500 bn Decent Life initiative.

MY MORNING / WFH ROUTINE

Karim Wissa, managing director of the French Chamber of Commerce and Industry in Egypt: Each week, my Morning / WFH Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Karim Wissa (LinkedIn), managing director of the French Chamber of Commerce and Industry in Egypt.

My name is Karim Wissa and I’ve been an Egyptian diplomat for 30 years. Currently, I’m the managing director of the French Chamber of Commerce and Industry in Egypt, which is a new role I took on starting January 2021. I also teach on the MBA program at the French ESLSCA Business School. Previously, I introduced the French law firm Gide Loyrette Nouel to Egypt in 2018, and the year after I joined their team as a senior consultant. By March 2020, when the pandemic broke out, I left Gide and stayed home for a solid six months.

The French Chamber of Commerce is mainly concerned with promoting French and Egyptian business ties. The chamber has been functioning in Egypt since 1992, bringing together members of the French business community, French companies with a presence in Egypt and Egyptian companies looking for business in France. Locally, we organize partnerships through a series of roundtables where we invite Egyptian officials, CEOs and notable personalities in the business community to talk about recent legislation or room to do new business in the country. We’ve had people like the chairman of the Suez Canal Authority and the chairman of the Sovereign Fund of Egypt talk to French investors about projects in Egypt. In the near future we’re planning to publish a public advocacy document that we hope to present to the Egyptian government with French companies’ recommendations on how to improve doing business in Egypt.

My day usually starts at 6 am, with my morning coffee and Enterprise, which has been crucial to my work — particularly the coverage of upcoming IPOs and bond issuances which helped me scout out opportunities where Gide could offer legal consultancy.

After the morning news it's usually Zoom calls and meetings with our partners in France like the Federation of French Industries, the International Chambers of Commerce or the Arab-French Chambers of Commerce with whom we work closely. I go to lunch at around 1 pm with potential business partners and new companies we’re looking to have join the chamber. We sustain our work through membership and sponsorships.

Between lunch and early evenings I’m always meeting people to explore partnerships and bring on board new members to the chamber. I usually go out for dinner, both socially and for business, every night and go to sleep at around 10 pm.

On the weekends I teach an MBA course on cultural differences in doing business at ESLSCA on the Cairo-Alexandria road. It's been a very enriching experience for me because you get first-hand accounts of how relationships work between young Egyptian students / workers and foreign employers. But when classes went online, it was a nightmare for me. Teaching an interactive class through Zoom was not easy and I can’t say I really liked the experience.

This WFH period has been challenging but full of potential. Although I’m not technologically savvy it has been a very exciting time because of the magnitude of opportunities the digital age is offering us today. We organized a virtual conference in January about the Universal Health Ins. Act that was designed in a way where you could see a conference hall on your screen with separate doors that would lead to different discussions and lectures. The sky's the limit with new technologies.

We’ve started bringing together smaller groups of people at in-person roundtables. We’ve so far organized two roundtables at the French embassy this year with the chairman of the Egyptian Competition Authority and the chairman of Misr Ins. Holding. The meetings were capped at 20 people and we were distanced about a meter apart. Once international travel returns to normal, we will also continue to organize missions to France where Egyptian businesses can get the chance to meet with potential partners and participate in fairs.

During lockdown, I caught up on a lot of reading and fixed my diet. I'm proud to have finally read Marcel Proust’s seven-volume series In Search of Lost Time, which I’ve been meaning to get around to for nearly 20 years and it has been pure bliss. It's an amazing work written in the early twentieth century and remains relevant today.

I’m ashamed to admit it but I’m also a big fan of television. I recently finished watching The Loudest Voice, which is a fantastic series about one of the founders of Fox News, Roger Ailes, that really gives you a sense of what was going on with the Trump presidency and how he got there. I also listen to France Culture Radio which usually has good analysis of current cultural events or philosophical debates.

A favorite quote? Mine is from John Steinbeck, whose Grapes of Wrath was one of the first works of literature I read in English: “If it is right, it happens. The main thing is not to hurry. Nothing good gets away.” This quote makes you realize that life is full of coincidences and opportunities. Every one of us has regrets, but the world out there is large, and there are other opportunities waiting for you.

CALENDAR

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

11-20 March (Thursday-Saturday): Photopia’s Cairo Photo Week 2021 will take place with this year’s theme being Depth OFF Field.

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.

23 March (Tuesday): The British-Egyptian Business Association (BEBA) virtual conference on sustainable manufacturing in Africa.

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

29-30 March (Monday-Tuesday): Arab Federation of Exchanges Annual Conference 2021.

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.

31 March (Wednesday): Income tax deadline for individuals. Real estate tax deadline.

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

7 April (Wednesday): British-Egyptian Business Association (BEBA) webinar on digital banking and fintech.

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.

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