EnterpriseAM — Cigarette distributors are reportedly calling for an antitrust probe

Good morning, friends. The big question on everyone’s mind this morning: Will investors step in today on the EGX to “buy the dip” after the EGX30 posted another day of losses yesterday. After spending the first quarter solidly in the green, a sharp two-day selloff has sent it down 3.5% YTD. We had chapter and verse in yesterday’s EnterprisePM on what happened.

One of the smartest market analysts we know says it’s not time to panic, suggesting domestic institutions will likely start picking up shares that are now very attractively priced. Still, he said, volumes could be a bit thinner in the coming weeks as we ease toward Ramadan, a time of high cash demand for the retail investors who presently account for c. 70% of daily activity on the exchange.

That process may have started yesterday, with institutional investors accounting for a bit over 33% of total trading on the EGX (up from 29%) as the bourse rallied from a sharper dip early in the session.

That seems to be the message from the regulator, too: The bourse took a tumble because retail traders were hit with margin calls yesterday (after the EGX30 slumped a sharp 2.5% on Monday and then a plunge in the EGX100 triggered a mandatory pause in trading early yesterday), member of the Financial Regulatory Authority’s advisory committee Rania Yacoub told Hadith Al Kahera’s Khairy Ramadan and Karima Awad. She expects institutional investors to come back into the market, giving it a chance to catch its breath and instilling a sense of long-term stability (watch, runtime: 7:45).

The EGX30 is now at its lowest level since October 2020, but up some 30% from the low it touched last March when global emerging market stocks cratered as investors pulled back in the early weeks of the pandemic.

HAPPENING NOW: Traffic in the Suez Canal is reportedly at a standstill after a “giant container ship ran aground” in the waterway yesterday morning, Bloomberg reports, citing ship brokers and mapping data. The container ship — from Taiwan’s Evergreen — was still stuck in the canal at 2am CLT, ship tracking data showed, according to the business information service. Vessels traveling in both directions are waiting for the container ship to be refloated.

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

• The EGX clawed back losses after a sharp plunge at the opening bell.
• Turkish stocks narrowly avoided their worst day in 20 years — but it’s not a sign of an EM rout.
• More and more people are going Ramadan shopping online thanks to covid-19.

The introverts among us are cheering: Self-checkout is coming to Egypt. Carrefour is launching an app that that will allow customers to scan items as they put them in their carts. They’ll then be able to chek out and pay by scanning a QR code

PSA #1- We have another day of ugly weather ahead of us. Expect strong winds kicking up more dust and sand in the capital city causing limited visibility in some areas. Folks in Alex and elsewhere on the Mediterranean coast could see rain. Mercury levels are dropping “significantly” across the country, according to the national weather service. It’s howling outside right now as we ease toward dispatch time and the mercury will peak at a high of 22°C, according to our favourite weather app.

PSA #2- You have until the end of the month to settle with the government on building code violations. Once the deadline passes, properties in violation of the building code won’t be cut off from utilities, but will be included in a sweep the Local Development and Housing ministries will conduct for Cabinet to decide how to handle these cases, Local Development Ministry spokesperson Khaled Kassem told 90 Minutes’ Osama Kamal. Some 88% of all violators have so far submitted their settlement requests, according to Kasem (watch, runtime: 8:05).

PSA #3- You also need to visit your local DMV before 31 March to get an RFID sticker installed in your car if you haven’t already done so — or risk running afoul of the Traffic Police.

WATCH THIS SPACE- Egypt and the UK will set up a new trade finance facility designed to stimulate bilateral trade, UK Trade Commissioner for Africa Emma Wade-Smith said yesterday, according to Ahram Online. Further details to be announced in the coming week, according to Wade-Smith. Egypt and the UK had signed a new trade agreement last year with the completion of Brexit, which UK Trade Envoy to Egypt Sir Jeffery Donaldson previously said could unlock fresh British investments in Egypt.

CIRCLE YOUR CALENDAR-

The Real Gate real estate exhibition will kick off tomorrow and run until Saturday at the Egyptian International Exhibition Center.

Head to Sharm for a startup gathering: Investors, entrepreneurs and policymakers will gather in Sharm El Sheikh for the Startup Festival on 28-29 March 2021. More than 80 startups will participate in the exhibition, which will feature panel discussions and workshops. The gathering will also unveil who is taking home hardware from the “Egypt Entrepreneurship Rally Competition.” The gathering is organized by the Arab Academy for Science, Technology & Maritime Transport, and companies that have graduated from AAST’s supply chain and logistics as well as youth incubators have the chance to pitch their ideas to investors.

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

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, urban development and as well as social infrastructure such as health and education.

In today’s issue: We continue our startup week by looking at the emergence of tech-based companies that are solving the dysfunctions of our supply chain management, especially in light of the rising demand in online delivery. Today, we look at B2B bulk delivery platform MaxAB, and how its combination of data-driven ordering, fulfilment centers, and fintech has been helping businesses ensure efficient supply deliveries.

The tender for a license to establish Egypt’s second major tobacco company could face an antitrust probe after several tobacco players filed a formal complaint with the Egyptian Competition Authority (ECA) on the sale conditions, Masrawy reports, citing unnamed sources it says are in the know. Four major tobacco distributors and brand owners — JTI-Nakhla Tobacco, British American Tobacco Egypt, Imperial Tobacco and Al Mansour International Distribution Company — were invited to bid on the new license. They now argue that the new company’s effective monopoly on e-cigarettes and heated tobacco would be a breach of the Competition Protection Act. The ECA has yet to confirm that it has received the complaint, let alone whether it will go ahead with an investigation.

Why the grumbling? The broad strokes of the tender would see current state-owned monopoly Eastern Company owning 24% of the new entrant, which would also be required to price its popular brands 50% higher than Eastern’s. Companies also argue that they are only getting a chance to leap-frog into new products such as e-cigarettes and, therefore, not getting a fair chance to compete against Eastern, especially with only one license put up for grabs.

Foreign players are lobbying for a two-month extension on the deadline for bids to allow time for technical and feasibility studies — and also wait for possible change to the tender’s terms, according to a report in Al Mal’s print edition, which cites sources the newspaper says have knowledge of the matter. The current deadline for bids is 4 April.

Background: The Industrial Development Authority issued last week a tender for the license, which would (sort of) end Eastern’s monopoly on the tobacco industry. The authority invited several local and international players to compete in the tender, the results of which will be based on a point-count system. So far, an unnamed Emirati bidder has reportedly expressed interest.

The first batch of dual-fuel vehicles under the state’s scheme to swap out old, gasoline-fueled cars will hit the road within a month, the initiative’s spokesperson Ahmed Abdel Razek told Enterprise. The number of cars to be delivered in the first batch will depend on the availability of the models selected by the customers, he said, adding that the trial batch would be “small” to minimize rollout errors.

The government expects to get 70k new dual-fuel cars on the road this year as part of its multi-year plan to increase the use of natural gas to power cars and microbuses across the country. By 2023, the government hopes to have converted 250k vehicles. The entire plan will swap out 1.8 mn cars over the course of a decade — a feat that is expected to cost some EGP 320 bn.

The program seems to be proving popular so far, with some 60k people submitting requests to replace their vehicles since it launched earlier this year. Of these, around 80% have been from passenger-car owners, Abdel Razek said. The Finance Ministry is offering vehicle owners a number of financial incentives to take part in the scheme, while some EGP 16.2 bn is being made available by the government and the central bank to provide subsidized loans through local banks.

IN OTHER AUTOMOTIVE NEWS-

China’s Dongfeng could invest USD 10 mn in a plan to locally assemble electric vehicles with state-owned El Nasr Automotive, which would be equivalent to around 20% of the capital needed for the assembly line, Public Enterprises Minister Hisham Tawfik told Masrawy. The two companies had agreed earlier this year to jointly assemble EVs in Egypt, with plans to install the assembly line by 2Q2021 at an expected cost of EGP 2.5 bn. The first El Nasr-Dongfeng EV should be ready to hit the road by the beginning of 2022.

Education outfit CIRA is giving parents whose children attend its schools tuition fee loans with a 12-month repayment period under a partnership agreement with Beltone’s consumer finance arm Belcash, the two companies said in a joint statement (pdf) yesterday. The pilot phase will be launched in seven schools with the rest to follow “shortly," CIRA CEO Mohamed El Kalla said.

Belcash will be “an optional method” added to the current payment models that CIRA provides, El Kalla added in the statement, adding that the move aims to “ease the burden of education tuition fees.” CIRA owns almost 21 schools in nine governorates in Egypt as well as a nursery outfit acquired in January, with plans for more this year.

More education finance in the pipeline? "Our agreement with CIRA is the first towards entering the education finance market whereby we will be pursuing several agreements with the biggest schools in Egypt,” Group CEO of Beltone Financial Holding Ibrahim Karam said.

GO DEEPER: Tuition loans have become increasingly popular among K-12 parents, and several banks have been working to push their products since the outbreak of the pandemic, as we found in a previous edition of our education vertical, Blackboard. The banking sector’s renewed drive to attract tuition loan customers followed the lead of e-payments and e-finance companies that are working directly with schools to facilitate tuition payments, a push that started with EFG Hermes’ valU and school operator GEMS.

SMART POLICY- Unbanked micro-businesses, freelancers, and craftsmen will be able to open accounts at the National Bank of Egypt come April with zero admin charges and minimal paperwork, Hala Wagih Helmy, the bank’s head of products and financial inclusion, told Masrawy. Freelancers or craftsmen will only need to provide their national IDs in order to open an account, while micro-business owners could also provide an official account of their income stream in the form of receipts, or other documents such as a rental contract or tax registration number, Helmy said. The state-owned bank will impose an EGP 100k monthly transaction ceiling on accounts set up by self-employed individuals, and an EGP 200k ceiling on micro-enterprise accounts.

The move comes under new KYC regulations introduced by the Central Bank of Egypt last October allowing small businesses and self-employed individuals to open bank accounts by declaring their occupation, instead of requiring proof of employment from a company or other documents proving income. The bid aims to encourage more individuals to join the formal economy, boost financial inclusion, and boost enterprise growth through access to credit.

The World Bank plans to focus on improved governance, private sector job creation and social inclusion in Egypt under its 2021-2025 Country Partnership Framework, which the bank is currently drawing up, Planning Minister Hala El Said said in a statement yesterday. The bank is also expected to make funding available for Egypt’s human capital development, El Said said. The World Bank’s current framework, which came into effect in 2015, covered 13 development projects worth USD 5.84 bn. The current framework expires this year.

Former Trade Minister Mounir Fakhry Abdel Nour (bio) is now Beltone Financial’s non-executive chairman, replacing Onsi Naguib Sawiris, who had temporarily held the position since the start of this month, the company said in a statement (pdf). Beltone’s former executive chairman Maged Shawky, who had taken up a position as a non-executive board member in the reshuffle earlier this month, also stepped down, along with fellow non-exec Ihab Saleh.

Who else is in? Amir Mishriky (LinkedIn) and Aladdin ElAfifi (LinkedIn) were appointed new independent board members, while Bassem Mohamed Youssef was chosen as a non-executive board member representing Orascom Financial Holding.

Beltone had reshuffled its board in early March following a horizontal demerger which saw its former parent company, Orascom Investment Holding, spin off its non-bank financial services holdings into Orascom Financial Holdings.

Egypt Post has appointed Ahmed Mansour (LinkedIn) as its secretary general, Hapi Journal reports. Mansour joins Egypt Post from Al Ahli Bank of Kuwait where he served as CIO for one year following an 11-year stint with the Central Bank of Egypt as head of digital channels and integration.

Diplomacy and foreign policy matters took center stage on the airwaves last night, as the talking heads fixated on the growing urgency to the Grand Ethiopian Renaissance Dam impasse. We have more on this in Around the World, below.

The consensus: Addis Ababa is buying time by dragging out the negotiations with Sudan and Egypt until it completes the dam’s second filling, which will essentially make the dam an unchallengeable fact on the ground for its downstream neighbors. Among those expressing this view: Political commentator Mostafa El Fekky in his weekly policy discussion with Yahduth fi Misr’s Sherif Amer (watch, runtime: 3:34).

Ethiopia is also conflating its tensions with Sudan over their border with the GERD negotiations and is trying to provoke Khartoum into an open conflict, which is a real possibility, El Fekky said (watch, runtime: 4:33). Ethiopian Prime Minister Abiy Ahmed claims he’s not looking for conflict with Sudan, says Al Hayah Al Youm’s Mohamed Sherdy (watch, runtime: 9:01). Sudan, meanwhile, has only recently shifted its position on the dam to align with Egypt, after previously taking Ethiopia’s side, head of the Nile Basin research division at Al‑Ahram Center for Political and Strategic Studies told Amer. Khartoum’s policy shift is largely because of Ethiopia’s recent moves to fill the dam unilaterally, which led Sudan to realize the magnitude of the dam’s threat (watch, runtime: 4:14).

Is Egypt looking to launch a media campaign on the matter? The Supreme Media Council hosted a roundtable discussion yesterday with Irrigation Minister Mohamed Abdel Aty and media representatives to reiterate that Egypt has been “flexible” with Ethiopia so far and does not want to stand in the way of its development plans. The two sides agreed to set up a permanent committee mandated with issuing statements on the dam and surrounding negotiations. Among those taking note: Ala Masouleety’s Ahmed Moussa (watch, runtime: 4:15), Mohamed Sherdy (watch, runtime: 2:35), and Masaa DMC’s Ramy Radwan (watch, runtime: 3:17).

It’s another mixed bag of nuts for Egypt in the foreign press this morning. American socialist magazine Jacobin (a fringe publication) suggests the preliminary approval of an arms sale to Egypt is evidence the Biden administration is walking back on its vow to take a hard line on Egypt over human rights concerns. Meanwhile, the woman who was allegedly thrown from her balcony to her death is getting attention from the Daily Mail, which described the incident as an “honor killing.” And here to remind us of the (kind of creepy) advancements in technology are African News and the Telegraph, which take note of an AI-powered robot created by an Egyptian mechatronics engineering graduate programmed to carry out medical tasks, including taking PCR swabs, to limit frontline workers’ exposure to the virus that causes covid-19.

Vaccines are now being administered at 138 medical units across the country as the Health Ministry looks to expand and speed up the rollout of covid-19 jabs, with an eye to inoculate as many as 250k individuals this week alone, Minister Hala Zayed said in a statement yesterday. The ministry set up an additional 90 centers to administer the vaccines to eligible citizens, foreign residents, diplomats, and refugees, after initially setting up 40 sites, Masaa DMC’s Ramy Radwan noted (watch, runtime: 1:36).

The capital city has the biggest share of the pie, with 33 sites available across Cairo, followed by another 24 units in Giza and 19 in Alexandria, Zayed said.

Anyone living in Egypt who is 18 or older is now eligible and can register for the jab through the ministry’s website. As of Monday morning, a total of 30k individuals had received a jab.

The Health Ministry reported 648 new covid-19 infections yesterday, up from 643 the day before. The ministry also reported 43 new deaths, bringing the country’s total death toll to 11,680. Egypt has now disclosed a total of 196,709 confirmed cases of covid-19.

AstraZeneca will release more up-to-date data from its US vaccine trial within the next two days after the independent monitoring board said the drugmaker’s analysis of the jab’s efficacy relied in part on old data, Reuters reported. AstraZeneca’s results on Monday said the shot has a 79% efficacy rate.

An anti-covid-19 pill is now in clinical testing in the US after Pfizer confirmed that the experimental antiviral med is a protease inhibitor that prevents the virus from replicating in cells.

A single-dose version of Russia’s Sputnik V is also in clinical trials in the UAE, Ghana and Russia. While it is less effective than the original two-shot jab, the one-and-done version could serve as a stopgap solution for countries facing a high covid-19 case count, Reuters reports, citing a Russian Direct Investment Fund official.

Vaccine nay-sayers in Canada are being lured to change their minds, with Manulife Financial rewarding clients who get jabs by handing out points that can be redeemed for Amazon gift cards, hotel discounts, and cheaper gym memberships. This comes after US donut chain Krispy Kreme said it would give anybody with a proof of vaccination a donut a day (without charge) for the rest of the year.

A syndicate of domestic banks has agreed to almost double the value of a loan taken on by the Saudi Egyptian Construction Company to fund several projects, mainly in New Damietta, according to CEO Mohamed Taher. The company will now borrow EGP 1.5 bn, up from EGP 800 mn previously, to allow it to complete construction, he said.

President Abdel Fattah El Sisi met with Alstom CEO Henri Poupart Lafarge on Monday, with the latter saying the company — which has several ongoing rail projects in Egypt — would be adding jobs here as it looks to “expand its activities,” including through participation in national megaprojects, Ittihadiya said (pdf).

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

• Utopia Pharma is slated to start production at its new EGP 550 mn plant in 10th of Ramadan City before year-end.
• The Middle East Oil Refinery plans to complete its USD 2.3 bn expansion project in 1Q2022, which will increase its refinery’s production capacity by 60%.
• Elsewedy Industrial Development, the Industrial Development Group and Polaris International Industrial Parks will upgrade five industrial areas in Cairo, Qena and Sohag in line with sustainable development principles after signing partnership agreements with German development agency GIZ.
• Dice has appointed the Economic Group for Financial Consulting to conduct a fair value assessment of the company by 20 April, after Dice’s shares plunged 55% between 22 February and 22 March.
• Egypt’s wheat imports are expected to rise 1.53% y-o-y to reach 13.2 mn metric tonnes in MY2021-2022 compared to the previous year, according to a report from the US Department of Agriculture.
• The Central Bank of Egypt has extended (pdf) the exclusion period for imports of some basic food commodities, namely rice, lentils and fava beans, from their 100% cash cover for one year until 15 March 2022.

Egypt and Jordan will work on telecoms, energy, trade, housing, and archaeology projects after signing seven agreements during Prime Minister Mostafa Madbouly’s visit to Amman yesterday to attend the Egyptian-Jordanian Joint Higher Committee meetings, according to a cabinet statement. Madbouly discussed with Jordanian Prime Minister Bisher Al Khasawneh the Grand Ethiopian Renaissance Dam and continued diplomatic efforts in reaching a two state solution to the Palestinian-Israeli conflict, according to a separate statement.

Ethiopia will continue with plans to fill the Grand Ethiopian Renaissance Dam in the upcoming rainy season, and “has absolutely no desire whatsoever to cause harm to Egypt nor to Sudan,” Ethiopian Prime Minister Abiy Ahmed said in an address to the Ethiopian House of Representatives Tuesday. In a separate statement, Ahmed said the country would lose USD 1 bn if it lets the rainy season pass without filling the dam, and that despite opposition, the dam “will be completed as promised.”

Meanwhile, Sudan is backing an initiative by the UAE to mediate the GERD impasse and other border disputes with Ethiopia, Information Minister Hamza Baloul said, according to Reuters. Ethiopia has expressed opposition to a plan put forward by Sudan and Egypt to involve international mediators in stalled talks on the filling and operation of the dam.

IN DIPLOMACY: The conflicts in Libya, Syria and Yemen, as well as the revival of Israeli‑Palestinian peace talks were on the agenda for Egyptian Deputy Foreign Minister Alaa Roushdi and Russian Deputy Foreign Minister Sergey Vershinin, according to a statement.

Saudi truce proposal rejected by Yemen rebels: Saudi-led coalition warplanes launched air raids on Houthi camps in Yemen’s capital Sana’a yesterday, hours after a Saudi peace proposal was rejected by the rebel group, according to Bloomberg.

The US and the EU may start working more closely to contain China’s rise: US Secretary of State Anthony Blinken will meet with EU foreign policy head Josep Borrell today to relaunch the US-EU China dialogue, a group set up last year to coordinate responses to China on security and human rights issues, the Financial Times reports, quoting people in the know.

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

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.

29-30 March (Monday-Tuesday): Arab Academy for Science, Technology & Maritime Transport Startup Festival, Sharm El Sheikh.

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 filing deadline.

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

6 April (Tuesday): French Chamber of Commerce and Industry in Egypt working breakfast with Sovereign Fund of Egypt CEO Ayman Soliman.

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).

7-9 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.

17-20 June (Thursday-Sunday) : The International Exhibition of Materials and Technologies for Finishing and Construction (Turnkey Expo), Cairo International Conference Center.

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.

30 June- 15 July: National Book Fair.

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

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.