More Chinese jabs, coffee with France’s ambassador + kicking microbuses from the Ring Road

Good morning, everyone, and welcome to another brisk news morning. What appears to be a continued strong rollout of our vaccination program leads today. If you’re thinking long-term, suggest having a good read through our Going Green interview with French Ambassador Stéphane Romatet as well as the piece on Russia’s wannabe alternative to the Suez Canal.

EDITOR’S NOTE: EnterprisePM will be taking a publication holiday this afternoon so we can attend to some housekeeping and plug away at some long-term stuff about which we’re really excited. EnterpriseAM and EnterprisePM will be back in your inboxes at their customary times tomorrow.

THE BIG STORY INTERNATIONALLY- Jeff Bezos is going to space, announcing yesterday that he will be hopping aboard his company Blue Origin’s first mission next month. The 20 July flight will feature an 11-minute trip to suborbital space that will reach an altitude of about 100 kms. Bids for a seat on the flight have gone as high as USD 2.8 mn. The story is everywhere in the foreign press from Bloomberg and the Associated Press to CNN, the Financial Times and CNBC.

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

• We talked to Openner’s Ahmed Elsherif about what the VC firm has up its sleeve for Egypt. The VC is on the lookout for stakes in as many as 50 tech startups, with USD 5 mn earmarked for Egypt at an initial stage
• UAE’s Opontia will soon set up shop in Egypt and has USD 20 mn to invest. Egypt could receive some of the USD 20 mn Riyadh-based consumer holding startup Opontia has earmarked for regional acquisitions.
• JUFO signals to the market that its financials are sound: Juhayna Food Industries has released a snapshot of its unaudited FY2020 earnings in a move likely meant to reassure investors after the company was placed on the EGX’ ‘D-list’ of non-compliant companies last week for missing the 1 June deadline to report FY2020 results.

WHAT’S HAPPENING TODAY-

A delegation of 18 French companies are currently in town to meet Egyptian private sector firms and international financial institutions in an event organized by Business France. The visit wraps up tomorrow.

The long-awaited Sovereign Sukuk Act could get a final nod by the House as early as today, paving the way for the issuance of our maiden sharia-compliant bonds on local and international debt markets, Rep. Yasser Omar told Reuters.

The worst case scenario: A final vote on the bill, which earned preliminary approval from the House on Sunday, could be held later this month before the start of the new fiscal year, Omar said. It would then be handed over to the president to be signed into law. Once ratified, the executive regulations for the bill are expected to be issued within three months.

The ministry is eager to get the ball rolling, saying in a statement yesterday that it will start working on its first issuance as soon as the legislation takes effect. The exact timing and size of the planned offering remains unknown.

The bill sets a framework for regulating Egypt’s sovereign sukuk issuances, including/ governing how sharia-compliant debt is securitized and traded.

Need a refresher on how sukuk work? We’ve got you covered.

Don’t celebrate (or gnash your teeth over) the global corporate tax agreement just yet: There’s a long way to go. An agreement by G7 nations to introduce a 15% global minimum corporate tax rate still has a “long road” ahead of it, according to experts speaking to CNBC. Finance ministers are already facing criticism that the proposal isn’t ambitious enough and that more countries will need to come on board if the proposal is going to make a difference.

The critics have a point: Amazon, one of the largest companies in the world, could avoid having to pay more tax thanks to a part of the agreement that forces only companies with a 10%+ NP margin to comply, according to the Guardian. Some campaigners say that a minimum rate would have to be higher to make a difference, while others have criticized the agreement for allowing the continued existence of tax havens.

Then there’s the problem of implementation: The plan, agreed in principle last weekend, only involves Canada, France, Germany, Italy, Japan, the UK, the US and the EU, and would require more countries and closer coordination to properly close tax loopholes enjoyed by multinationals.

The long road: The G7-backed agreement will need confirmation at a meeting of G20 members in July. It will then require even broader negotiations at the OECD, a process French Finance Minister Bruno le Maire said might take two to three years.

CIRCLE YOUR CALENDAR-

Inflation data for May will be released this week.

Egypt is hosting the Africa Investment Promotion Agency Network’s first forum at the end of this week. The four-day event kicks off on Friday.

The Egypt Green Economy Forum takes place next Monday, 14 June.

The Central Bank of Egypt will meet Thursday, 17 June to review rates.

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

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: We sit down with Stéphane Romatet, French ambassador to Egypt, to discuss France’s support for Egypt’s green energy plans. French investment in Egypt has grown from an estimated EUR 3 bn in 2017 to EUR 5 bn today. And renewables investment — currently comprising some EUR 500 mn — is becoming an increasingly important focus. Our conversation tackles France’s ambitions to partner with Egypt on green hydrogen — where French companies are eyeing more renewables investment in Egypt — and the importance of resolving the feed-in tariff issue.

Egypt took receipt yesterday of a 500k-dose shipment of China’s Sinovac vaccines, coming almost a week before our first batch of locally-manufactured Sinovac shots is finished on 15 June, the Health Ministry said in a statement. Minister Hala Zayed had said last week that this shipment will be followed by a separate 500k dose batch on 16 June. Sinovac is one of two vaccines Egypt will manufacture, aiming to produce the first 3 mn doses as early as this month through state-owned Vacsera.

A 1 mn-dose shipment of Sinopharm jabs will arrive in the country on Sunday, 13 June, Health Ministry spokesperson Khaled Megahed told Al Hayah TV last night (watch, runtime: 11:11).

As many as 4 mn shots of other covid vaccines are set to land here at home before the month is out, including a 1.9 mn doses of Oxford / AstraZeneca through the Gavi / Covax scheme that was expected to arrive in the first week of June. Johnson & Johnson is also sending 20 mn doses of its single-shot jab. These doses would be separate from the shots we could be receiving through Covax and from the 4 mn doses that are said to be delivered in 4Q2021, which will likely be received through the African Union.

Next up on Egypt’s vaccination priority list: Tourism workers in Luxor + Aswan. The ministry plans to begin administering covid-19 shots to tourism workers in the tourist hotspots on 1 July, Zayed said in a phone interview with El Hekaya (watch, runtime: 1:28). This comes after the government concluded the vaccination of all Red Sea tourism workers in the last week of May.

The Health Ministry reported 782 new covid-19 infections yesterday, down from 801 the day before. Egypt has now disclosed a total of 268,754 confirmed cases of covid-19. The ministry also reported 47 new deaths, bringing the country’s total death toll to 15,399.

Perhaps this is why the UK put us on its red list: According to the UK government, British health authorities are investigating a variant of the coronavirus that originated in Thailand but entered the country from Egypt. The idea was strongly denied by a member of the Health Ministry’s covid committee on Kelma Akhira last night, who claimed that Egypt has so far not detected any of the more transmissible and virulent covid variants.

Vodafone Egypt will make a one-off EGP 10 bn dividend payout this year as part of a modified shareholder agreement signed by Vodafone Group and Telecom Egypt (TE) yesterday, TE said in a statement. This includes the EGP 2 bn cash dividend Vodafone Egypt made earlier in the year, EGP 900 mn of which went to TE. The remaining EGP 8 bn will be paid out later in 2021.

And there are permanent changes to dividends going forward: Vodafone Egypt will pay out a minimum 60% of its cashflow in dividends in the future, according to the new terms of the agreement.

What else is changing? Vodafone Group now has the right to transfer its 55% stake in Vodafone Egypt within the wider group, while TE has received “certain enhanced minority rights including access to information.”

Advisors: Al Tamimi & Company advised TE in its negotiations with Vodafone Group, the law firm said (pdf).

What’s going on here? The law firm said that the agreement has been three years’ in the making, and aims to promote “mutual protection … and exit rights” for both shareholders. Vodafone, TE and Al Tamimi were all unavailable for comment on the new agreement.

This comes six months after Saudi Telecom’s (STC) bid to buy Vodafone Group’s stake ended in failure. Vodafone Egypt was the subject of a drawn-out acquisition bid from STC, which was in talks with Vodafone Group to acquire its majority stake for USD 2.4 bn for most of last year. Negotiations ended without an agreement in December for unknown reasons.

Ahmed Ezz now directly owns a controlling stake in Ezz Steel after purchasing a 33.4% stake in the company from El Ezz Group Holding for Industry and Investment, according to an EGX disclosure (pdf). The steel magnate, who owns almost 100% of Ezz Holding, now directly holds a 65.7% stake in Ezz Steel after purchasing almost 182 mn global depository receipts from the affiliated company. This comes less than a month after Ezz purchased a 5.6% stake in Ezz Steel, again from Ezz Holding.

The National Bank of Egypt (NBE), Banque Misr and Talaat Moustafa Group (TMG) have established a new real estate joint venture, dubbed Rawasi, with paid-in capital of EGP 200 mn, NBE Deputy Chairman Yehia Abou El Fettouh told Masrawy.

What’s in the pipeline? The new company obtained a EGP 9 bn joint loan from both banks to develop assets in TMG’s Madinaty compound, Abou El Fettouh said.

This is the second real estate JV TMG has set up with NBE and Banque Misr: In late 2020, TMG established its first JV with both state-owned banks to develop the pair's residential lands worth EGP 5 bn in TMG’s Madinaty and Rehab compounds. Four other banks later bought into the JV, including Suez Canal Bank, Export Development Bank of Egypt, United Bank and the Egyptian Gulf Bank. CIB and TMG also established in 1Q2021 a real estate SPV, dubbed TCA Properties, to acquire, sell and lease commercial properties.

Russia could be mainstreaming its Suez Canal-alternative shipping route in 2024. Russian energy firm Rosneft is looking to start shipping oil products from its planned megaproject, Vostok Oil, through the Northern Sea Route in three years’ time, Reuters reports. The energy project, which would have an average 6.2 bn tonnes of oil in resources, would challenge the Suez Canal by cutting travel distances between Europe and Asia. Vostok Oil is one of Russia's biggest oil projects, comparable in size with the exploration of West Siberia in the 1970s and the US Bakken oil region over the past decade.

Moscow has already tried to capitalize on the Ever Given debacle, claiming that the six-day blockage in March demonstrated that the Northern Sea Route is more reliable and safe than Suez. Russia said previously that it plans to make the route viable year-round (rather than only between July and October) by 2030, and that it could cover ins. for commercial shippers taking on risks of possible supply disruptions.

Russia isn’t our only competitor: Israel and the UAE are in talks to create a land bridge between the two countries to ship Emirati oil through Israel to Europe, bypassing the Suez Canal. Chairman of the Suez Canal Authority Osama Rabie has suggested that the project poses a national security risk to Egypt. Nearly 66% of oil sent from the GCC to western countries is shipped through the Suez Canal or the Sumed pipeline linking Alexandria to the Red Sea.

Are Arctic routes really competitors? The Northern Sea Route (NSR) and the Northwest Passage both promise faster shipping times, but face a range of limitations compared to the Suez Canal. The largest ships that can run through the NSR — so-called Arcticmax ships — can carry less than a fifth of the 25k shipping containers that the biggest ships to transit the Suez Canal can carry. The weather can be very challenging, the challenges to navigation numerous, and there’s a lot less infrastructure when things go wrong, from rescue infrastructure to recovery services. Check out The drawbacks of Arctic shipping in Global Risk Insights, Challenges and [upsides] of the Northern Sea Route in the Maritime Executive and this piece from 2015 in the Journal of Transportation Security as starting points.

Suez Canal revenues are an important source of hard currency for Egypt, bringing in USD 5.8 bn in FY2019-2020.

The Ring Road is going to become slightly less chaotic: Microbuses will be banned from driving the Ring Road later this year when work to expand the capital’s most important freeway wraps up this December, head of the General Authority for Roads and Bridges Hossam El Din Moustafa said Sunday in a phone-in to Al Hadath Al Youm (watch, runtime: 5:05).

Hello BRT: Buses that will eventually operate under the proposed bus rapid transit (BRT) system will replace microbuses as the main mode of public transport on the Ring Road, which will see buses run regular routes with designated stops at intersections, Moustafa said. The system is hoped to ease traffic congestion as well as reduce the use of private cars and on-road parking of microbuses.

But what about intercity travel? Moustafa didn’t disclose whether the microbus ban would extend to vehicles making trips outside of Cairo.

A BRT is more than just buses: A consortium of local and international firms — led by French public transport company TransDev and including Orascom, Mwasalat Misr and MCV Group — last month agreed to study the proposed system, which would include the buses, an electronic ticketing system, pedestrian crossings, bus stops, and information services. BRTs in other countries allocate designated lanes for buses, allow commuters to purchase tickets ahead of the trip, and feature platform-level boarding for ease of access.

Marsa Alam Tourism Development has appointed Shahinaz Salem as its new chairperson and managing director, the company announced in a statement (pdf). Salem previously served as the chair of Al Ahram for Printing and Packaging.

Memphis Pharma and Chemical Industries has appointed Essam Sadek as its non-executive chairman to replace Abla Hassan, who will now act as the company’s executive director, the company said in a statement (pdf).

Covid once again dominated proceedings on the nation’s talk shows last night: We have coverage on the night’s events in this morning’s Covid Watch, above.

The big business-relevant stories of the night:

The introduction of VAT on online delivery services got attention. All restaurants and businesses with more than EGP 500k in annual revenues are now charging and remitting VAT on online delivery services, under amendments to the executive regulations on the VAT Act, effective since last Thursday. Kelma Akhira’s Lamees El Hadidi wondered whether small businesses that don’t have to file VAT returns could charge customers the 14% duty and keep the money for themselves (watch, runtime: 4:54). Director of taxpayer services at the Egyptian Tax Authority Mohsen El Gayar, however, said that the changes will only impact individual shops and traders who were previously not required to collect and remit VAT on delivery services under the original VAT Act.

Elsewhere: Finance Minister Mohamed Maait told Ala Mas’ouleety in an extended, policy-light interview how Egypt has recovered from potential bankruptcy in 2014 to being an economically prosperous country today. You can watch the entire interview here (watch, runtime: 35:32).

Politics is the flavour of the morning in the foreign press: The Hill says that Egypt is emerging as an influential powerbroker in the region, coming off diplomatic achievements in Gaza, Libya and Syria. Sputnik suggests that Egyptian diplomats are looking at political developments in Israel with pessimism, expecting a government led by far-right leader Naftali Bennett to make resolving the conflict with Palestine even more difficult.

Also getting attention:

• An anti-Qatar hashtag was trending on Twitter in Egypt last Saturday — on the fourth anniversary of the 2017 blockade — with users criticizing the Gulf country. (Doha News)
• Bedouins find peace in Sinai's solitude: Bedouins have held tight to their land across Sinai in the face of the 20th century Israeli occupation, poor infrastructure, and myriad of other challenges. (National Geographic)

A money market fund recently launched by Misr Life Ins. was almost 5x oversubscribed at close this week, attracting more EGP 470 mn in inflows, Misr Capital said in a statement (pdf). The Misr Life Ins. Investment Fund had a target closing of EGP 100 mn. Managed by Misr Capital, the fund will invest in high-liquidity assets such as treasury bills and short-term corporate debt. Misr Capital is also managing a similar type of fund launched by Sarwa Life Ins. earlier this year.

UAE turns to culture in latest move to diversify away from oil: Abu Dhabi plans to pump USD 6 bn into cultural and creative industries over the next five years, in the emirate’s latest strategy to shift away from its reliance on oil and gas, a senior tourism official tells the Financial Times. Having already invested USD 2.3 bn into industry-related projects, the emirate will ramp up spending on cultural heritage, the arts, media, and architecture as it looks to boost cultural industries’ contributions to GDP.

7-9 June (Monday-Wednesday): A delegation of 18 French companies will meet with international financial institutions and Egyptian private partners in an event organized by Business France The event will take place at Sofitel Gezirah.

11-14 June (Friday-Monday): Egypt is hosting the first forum of the heads of African investment promotion agencies from under the theme Integration for Growth.

14 June (Monday): Egypt Green Economy Forum.

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.

20 June (Sunday): Ismailia Economic Court to hold hearing on Ever Given compensation case.

22-27 June (Tuesday-Sunday): The CIB PSA World Tour Finals for 2020-2021 will take place in Cairo.

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. The Big 5 Egypt Impact Awards will also be taking place at the event on 27 June.

30 June (Wednesday): The IMF will complete a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

30 June (Wednesday): 30 June Revolution Day.

30 June- 15 July: National Book Fair.

July + August: Thanaweya Amma exams take place.

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

1 July (Thursday): Large taxpayers that have not yet signed 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.

1 July (Thursday): Businesses importing goods at seaports will need to file shipping documents and cargo data digitally to the Advance Cargo Information (ACI) system.

15 June (Saturday): EGX-listed will have to complete filing their financial disclosures for the period ended 31 March.

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

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

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

2-4 August (Monday-Wednesday): Egypt is hosting the Africa Food Manufacturing exhibition at the Egypt International Exhibition Center.

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.

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

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.

30 September-8 October (Thursday-Friday): The Cairo International Fair, Cairo International Conference 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.

12-14 October (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

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.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt.

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

29 November-2 December (Monday-Thursday): Egypt Defense Expo.

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.

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

1H2022: The World Economic Forum annual meeting, location TBD.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

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.