Tuesday, 21 September 2021

EnterpriseAM — 5 state companies could offer shares on EGX before end of the state’s current fiscal year

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, wonderful people, and welcome to a very busy news morning here at home — and abroad. So let’s jump right in:

HAPPENING NOW- Votes are being counted in Canada’s federal election, with broadcaster CBC now calling the result for Justin Trudeau’s governing Liberals, who appear to have beaten back a heavy challenge from the Conservatives. The questions right now (again, it’s early): Will Trudeau get another minority government (likely) and how much of the vote will the nutters from the People’s Party pick up.

ALSO- The US will finally allow some vaccinated travelers to enter the country in November. The Biden administration will re-open US borders in early November to vaccinated non-US citizens from some countries, White House coronavirus response coordinator Jeff Zients told reporters on Monday.

It doesn’t appear that Egypt is on the list though: Vaccinated travelers from European countries in the Schengen zone, as well as the UK, Ireland, China, India, South Africa, Iran and Brazil will be able to visit the US, reversing pandemic-related restrictions first imposed at the start of last year.

THE BIG STORY OF THE DAY- Will the brewing Evergrande crisis drag down stocks for a second day? US shares had their worst day in four months yesterday after a sell-off in Asia appeared to spook investors. We can all blame property developer China Evergrande, billed as the “world’s most indebted company” for the headache. We have chapter and verse in this morning’s Planet Finance, below.

Why are we so concerned about Evergrande? Because the bears — the folks expecting the unprecedented bull run for global equities to come to an end — have been salivating at the thought of something like this for at least a couple of years now. The words “contagion” and “meltdown” and “crisis” are all being used by a generation of market watchers who haven’t had a crisis about which to fulminate since 2007-2008.

Better still: Pundits think the market’s Evergrande freakout makes the US Federal Reserve’s policy meeting today and tomorrow all the more important.

PSA #1- iOS 15 and iPadOS 15 were both out yesterday and there are very few bug reports circulating this morning, suggesting you can probably start thinking about upgrading. The developer betas of iPadOS 15 we’ve been running on our work iPad have been rock solid for the past month. Tentpole features for iPadOS include widgets on your homescreen, a revamped Notes app with hashtags and system-wide quick notes, and a more intuitive approach to multitasking. You can read all about the OS for your phone and iPad in Federico Viticci’s annual (epic) review here.

How do I upgrade? Tap Settings and then General > Software Update. Is the option not at the top of your screen? Look down and tap “Also available.”

PSA #2- It’s going to be hot today at 39°C, but the mercury will then ease to a much more seasonal 30°C by Friday and stay at 30-33°C through all of next week. Fall weather is coming, friends.

SIGN OF THE TIMES- Everybody thinks everybody else is WFH — but they’re not. While most people think most other people are working from home, the numbers (in the US of A) show a starkly different picture. Some 73% of Americans who worked remotely during the pandemic figured at least half of the country had done the same. In fact, only 35% had — at the peak. Respondents to a poll by the Atlantic thought at least 40% of Americans were working from home last month. In fact, less than 14% of folks here WFH.

HAPPENING TODAY-

President Abdel Fattah El Sisi will address the UN General Assembly later today, according to a schedule published yesterday.

El Sisi officially proposed that Egypt hold next year’s UN COP summit during climate talks yesterday, suggesting that it would represent a “fundamental turning point” in global efforts to tackle climate change. We have more on yesterday’s climate talks in Last Night’s Talk Shows, below.

Given that he attended yesterday’s climate meeting via video link, we think it’s pretty safe to say that the president will not be giving his address in person today. At least 83 world leaders are expected to attend in person, despite being encouraged by the UN to send in pre-recorded videos of their speeches instead.

EFG Hermes’ fourth Virtual Investor Conference wraps up today.

The Egyptian Ins. Federation’s Rendezvous conference continues today in Sharm El Sheikh. The event wraps tomorrow.

TOMORROW-

IMF + EBRD webinar: Public Enterprises Minister Hisham Tawfik will speak during a webinar hosted by the IMF and the European Bank for Reconstruction and Development (EBRD) on Wednesday, 22 September at 3pm CLT. The gathering is running under title of “State-owned enterprises in the Middle East, North Africa and Central Asia,” with Tawfik set to speak on the role of the state in the economy alongside five other panelists including the IMF’s Middle East and Central Asia head Jihad Azour and the EBRD’s head of external relations Alan Rousso. Check out the agenda here.

The Cityscape real estate investment conference gets underway this week at the Egypt International Exhibition Center. The event runs from Wednesday, 22 September through Saturday.

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


*** IN CASE YOU MISSED IT-

  • How safe is Cairo? Not very, according to the Economist.
  • Netflix sits on Emmys throne: Netflix took home major awards in drama and limited series, with the streaming giant nabbing a total of 44 trophies.
  • Earnings: Alexandria Container and Cargo Handling Company’s bottom line dropped 6% in FY2020-21 to EGP 1.4 bn.

enterprise

*** 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: Climate change is hitting Egypt’s mango and olive farmers. The Mediterranean and North Africa region is among the most vulnerable to the impact of climate change, with summer temperatures rising, rainfall dwindling, and extreme temperatures becoming more pronounced. Last month, we broadly explored how vulnerable Egypt is — by virtue of its geography, climate and dependence on agriculture — to these changes in our climate. Today, we look at examples of how this is being observed on the ground: namely our mango and olive crops, which took a beating this year.

enterprise

We can’t wait to see the endurance sports community back at Somabay Redsea, taking on the Supersprint, Sprint, Olympic, Youth, & Kids Races at a destination that’s truly outstanding by nature.

PRIVATIZATION WATCH

5 state companies could offer shares on the EGX by June 2022

Five state companies could offer shares on the EGX during the state’s current fiscal year, which ends in June 2022, Finance Minister Mohamed Maait told CNBC Arabia. The ministry has identified the five companies that would list shares via IPO or stake sale, he said, without disclosing further information.

Remember there’s a difference between IPO candidates (look at e-Finance, Banque du Caire and, more distantly, Ghazl El Mahalla) and stake sales by already listed companies as part of the state’s plan to sell-down its holdings of publicly traded companies (Alexandria Containers, Abu Qir Fertilizers and Sidi Kerir Petrochemicals were all said to have been on deck).

The first out of the gate is E-Finance, which on Sunday announced its intention to debut on the EGX in 4Q2021 with a 14.5% stake sale. The state-owned payment infrastructure and fintech firm is planning to offer almost 258 mn shares to investors. The company has been looking to IPO since 2019, but had plans kicked down the road thanks to the covid-19 pandemic.

Among the other contenders are Banque du Caire, which had planned to debut 20-30% of its shares on the EGX in April 2020 but shelved plans due to the pandemic. State-owned Ghazl El Mahalla FC is also looking to make an EGP 200 mn EGX debut.

A program to sell stakes in already-listed companies is moving slowly thanks in large part to poor market conditions since before covid-19 kicked off. Tobacco monopoly Eastern Company’s 4.5% secondary stake sale in March 2019 was the first out of the gate, but subsequent bids to take others (above) to market have not gotten off the ground. The stake sale program launched in 2018, and FRA boss Mohamed Omran had said this past June that we could see 2-3 state-owned companies offer shares on the EGX by year’s end.

Egypt’s IPO market has been quiet lately with only a single sizable debut since December 2019 when higher education platform Taaleem went to market this past April. LSE-listed consumer healthcare giant IDH also offered shares on the EGX earlier in a technical listing intended to facilitate easier access to its shares for local investors.

But it’s been crickets elsewhere in MENA: Egypt was the only country in the MENA region to see an IPO during 2Q2021.

The regional IPO market has been lackluster so far this year: Proceeds from MENA IPOs were down almost 50% y-o-y during the first six months of the year, E&Y said in a recent report (pdf). Despite there not being any IPOs in 2Q2020 due to the pandemic, the value of 1H2020 listings was still roughly double that of this year, coming in at USD 814 mn compared to 1H2021’s USD 425.8 mn,

This is changing though: Adnoc Drilling has seen huge investor demand for its ongoing IPO, which could raise around USD 1 bn, while ACWA Power’s plans to debut on the Saudi exchange next month could bring up to USD 1.2 bn in proceeds.


The Finance Ministry could sell around USD 1 bn in sovereign green bonds this fiscal year, Maait told CNBC. This would be Egypt’s second issuance of the climate-linked securities after it sold USD 750 mn of five-year notes last September.

No final decision has been taken on the timing and the size of the issuance, the minister said, adding that the ministry is consulting with the cabinet, the Central Bank of Egypt and participating banks.

M&A WATCH

Fawry acquires minority stake in social commerce startup Brimore

Egyptian e-payments giant Fawry has acquired a minority stake in social commerce company Brimore for EGP 15.7 mn, Fawry said in a statement to the bourse (pdf), without disclosing what that sake represents in percentage terms. The investment was made as part of an upcoming series A funding round by Brimore.

What will Fawry bring to Brimore? The acquisition will see Fawry introduce its 230k-strong network of merchants to Brimore’s distribution platform, while Brimore clients will be able to access Fawry’s digital payments and financial services. “Moving forward, we aim to offer Fawry’s full suite of financial solutions to our partners at Brimore, their network of distributors, and their customer base,” said Fawry CEO Ashraf Sabry, adding that the transaction comes in line with the company’s strategy to expand its digital services and gain a foothold in e-commerce. Further cooperation is also planned between Brimore and Fawry verticals working in commerce and fast-moving consumer goods.

Brimore has probably been on Fawry’s radar for a while: Disruptech, a USD 25 mn fintech fund set up by former Fawry top exec Mohamed Okasha invested in Brimore in 2020, marking the fund’s first investment. The transaction was part of Brimore’s USD 3.5 mn pre-series A round led by Algebra Ventures. A year earlier, Brimore secured USD 800k in seed funding in a round led by Algebra and Endure Capital.

What does Brimore do? The company’s social platform connects independent sellers with SME manufacturers to help suppliers streamline distribution and access new markets. Its freelance distributors order products direct from SME suppliers in bulk to sell to the local community out of their homes.

*** Tap / click here to read our interview with Brimore CEO and cofounder Mohamed Abdelaziz back in March when he told us how the company is working to solve Egypt’s supply-chain challenges.

INVESTMENT WATCH

Bidayat, SFE partner on innovation zone in Islamic Cairo

Islamic Cairo could host the region’s first “innovation zone”? Rachid Mohmaed Rachid’s Bidayat will study the possibility of developing the historic Bab Al Azab area in the vicinity of the Cairo Citadel into an innovation zone that will support SMEs in the fields of architecture, furniture, jewelry, and other design, under the terms of an MoU signed with the Sovereign Fund of Egypt, Rachid told Bloomberg Alsharq.

What’s an “innovation zone,” exactly? Bidayat’s development of the area would work on three pillars: education, providing workspaces, and investing in small projects, Rachid said. The project aims to give craftsmen in the area the necessary know-how to upgrade their products to a standard where they can compete in export markets, according to a Planning Ministry statement. The ministry will also work in tandem to restore the historic buildings in the area.

What next? The two partners will now prepare a development plan and carry out feasibility studies, which will then be presented to the Supreme Council of Antiquities, under whose purview the area falls. Planning Minister Hala El Said noted the importance of public-private partnerships, saying that the SFE would seek to carry out further partnerships with the private sector in future.

Before Bidayat… Samih Sawiris was initially in talks with the SFE to invest EGP 2 bn to redevelop the site, but talks reportedly broke down last year for unknown reasons.

Bidayat invests in creative brands in the Mediterranean region and is a sub-fund of the Swiss-based Alsara Investment Group. It recently acquired an undisclosed stake in homegrown designer handbag brand Okhtein.

Egypt has focused on developing industry and craft-specific zones in past years, establishing the Robeki leather city to increase Egypt’s leather exports.

Advisors: Alliance Law Firm provided counsel to Bidayat.

FINANCE

There was a bunch of news on the non-bank lending front yesterday

A lot of news related to non-bank lending landed yesterday. Here’s a snapshot:

  • The Central Bank of Egypt (CBE) and the Financial Regulatory Authority will collaborate to issue licenses for consumer finance companies, under the terms of an partnership agreement signed by both parties (pdf).
  • EFG Hermes Corp-Solutions will provide Arkan Mall tenants with financing services backed by their KarmSolar contracts, according to a statement (pdf).
  • The FRA is studying the possibility of expanding its ins. offerings to include marine ins. and comprehensive ins. for new vehicles it announced in a statement (pdf).

MOVES

Arafa Holding has appointed former Mediobanca MD Maria Luisa Cicognani (bio) as its new non-executive chair while Edita CEO Hani Berzi (bio) has been made an independent board member, the company said in a bourse filing (pdf) yesterday. Cicognani was a non-exec member of Arafa’s board from 2018 and 2020 and has chaired Mobius Investment Trust since 2018.

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ENTERPRISE+: LAST NIGHT’S TALK SHOWS

Last night’s talk shows focused on President Abdel Fattah El Sisi’s participation in UN climate talks yesterday. Hosted by UN Secretary-General António Guterres and UK Prime Minister Boris Johnson ahead of the general debate, the Informal Roundtable on Climate Action brought together representatives from 25 nations representing developed countries, emerging economies and low-income nations to discuss global efforts to tackle climate change.

El Sisi steered the conversation towards GERD: Attending the session via video link, El Sisi spoke of the need to tackle factors that are intensifying the negative effects of climate change on Egypt. Without naming names, the president called on countries to prevent countries from building dams on international rivers, and aggravating water scarcity, drought, land desertification and food insecurity.

He also formally threw Egypt’s hat in the ring to host the 2022 climate summit: El Sisi announced that Egypt would bid to host the 2022 UN Climate Change Conference (COP27) in what he said would be a “fundamental turning point” in international efforts to fight climate change.

Also from the meeting: Johnson urged developed countries to meet their commitment to provide USD 100 bn in climate finance annually, ahead of the Glasgow COP26 climate summit in November.

Covering the meeting on the airwaves last night: Kelma Akhira (watch, runtime: 1:47 | 2:26), Al Hayah Al Youm (watch, runtime: 23:42 | 5:31) and Ala Mas’ouleety (watch, runtime: 10:26 | 4:32).

Also on the talk shows last night: The first optional ins. policy for Egyptians living and working abroad, announced by Emigration Minister Nabila Makram, caught the attention of Al Hayah Al Youm (watch, runtime: 1:54) and Al Hadath Al Youm (watch, runtime: 4:36). The initiative is being implemented in cooperation with the Ins. Federation of Egypt, the Financial Regulatory Authority (FRA), and the Interior Ministry. The final details of the policy will be announced this week or early next week, Makram said in a phone interview with Al Tase’a’s Youssef El Husseiny (watch, runtime: 4:15).

EGYPT IN THE NEWS

It’s another slow morning in the foreign press. Among the few stories circulating:

  • Fewer kids, please: Egypt’s spiralling population will pose one of its greatest challenges in the years ahead, but the government so far is stopping short of imposing laws on birth control. (The Times)
  • Going up: Downtown Cairo’s fin-de-siècle elevators conjure feelings of pride and fear in equal measure. (New York Times)

ALSO ON OUR RADAR

Charges have been dropped against another four NGOs accused in the foreign funding of civil society case on the grounds of insufficient evidence, Al Masry Al Youm reports, citing a statement issued by the Cairo Court of Appeals. Human rights lawyer and former presidential candidate Khaled Ali was among the NGO heads to be acquitted in the ruling. A total of 71 organizations and 200 individuals have now been cleared of wrongdoing in the case, according to the statement, after investigations into six other NGO workers were also dropped earlier this month.

The move could help make the US (and other countries concerned with human rights here) happy: The court decision comes less than a week after the Biden administration said it would withhold USD 130 mn in military aid due to human rights concerns. Conditions for disbursing the aid include closing the NGOs case, one US official said.

New Alamein Airport could be the difference for Sahel hoteliers: Domestic tourists currently account for the bulk of North Coast hotel occupants, but this could change with the opening of the New Alamein Airport later this year, Colliers has said in a report (pdf) on the Mediterranean resort spot. The property research firm says that 70% of occupied room nights are booked by local tourists and only 30% by international guests, making the Sahel hotel business heavily seasonal. The New Alamein Airport is expected to open later this year and could change the game for Sahel hotels, raising annual occupancy rates, which are currently low due to it being a seasonal destination. Colliers predicts hotel occupancy rates to increase from a current 35% to 57% by 2025, driven by new upscale entrants to the North Sea hospitality market.

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

  • Nine local companies are reportedly competing to implement the smart transport system for internal transit at the new administrative capital. Those in the running include ElSewedy Electric, Arkan, Tatweer Misr, Orange, and Etisalat Egypt.
  • The Industrial Development Authority (IDA) will not offer any more industrial land for sale during the current year, Trade Minister Nevine Gamea told Al Borsa (pdf). Last year, the IDA offered 645 plots of industrial land spanning 1.5 mn sqm, and the year before 1.7k plots were sold totalling 4.2 mn sqm.

COVID WATCH

Daily covid cases up almost 150% in September

Covid cases rise again: The Health Ministry reported 679 new covid-19 infections yesterday, up from 653 the day before. Egypt has now disclosed a total of 297,608 confirmed cases of covid-19. The ministry also reported 22 new deaths, bringing the country’s total death toll to 16,992.

Daily cases have now risen almost 150% from the beginning of the month. The daily death toll has risen at a slower pace, increasing from single-digits at the end of August.

PLANET FINANCE

Powered by
EFG Hermes - https://efghermes.com/

China’s brewing Evergrande crisis is being blamed for a global equity sell-off: Stocks fell in Asia, Europe and the US yesterday amid fears that Chinese property giant Evergrande could default on the more than USD 300 bn it owes to creditors and other firms.

US stocks suffered their worst day in four months, despite late-session dip-buyers helping the market to recover some of its losses. The S&P 500 fell as much as 2.9% before closing 1.7% in the red, while the tech-focused Nasdaq lost 2.1% and the Europe-wide Stoxx 600 closed down 1.7%.

At the epicenter of the crisis: Hong Kong’s Hang Seng index closed at its lowest in almost a year, while the Hang Seng Property index, which includes a dozen big developers, fell almost 7% to lows not seen since 2016. Hong Kong-traded Evergrande shares, meanwhile, closed down more than 10%, while the price of one of the company’s bonds dropped below USD 0.25 on the USD. Chinese markets were mercifully closed for a public holiday.

Contagion in China? Yesterday’s poor market performance adds weight to fears that liquidity troubles at the world’s most-indebted property developer will spread to the wider Chinese property market and beyond. “Evergrande is just the tip of the iceberg,” the managing director of one Hong Kong-based brokerage told the Financial Times, adding that Chinese developers are under pressure to repay USD-denominated bonds amid a potentially hostile regulatory environment that could see them forced to cut housing costs, which in turn would affect bank mortgage revenues. “It has a chain effect.”

And beyond: The sell-off among US social media stocks — assets that are far removed from the Chinese property market — may signal wider market contagion and the spread of risk-off sentiment. “You’ve got a whole basket of things to be concerned about — throw this headline into the mix and that throws everything askew. So there’s going to be irrational de-risking taking place that doesn’t connect logically,” one strategist told Bloomberg.

Fixed-income + commodity markets react: Low-rated, high-yield US corporate bonds slumped on the news, while the cost of insuring high-yield debt spiked. True to their safe-haven reputation, yields on 10-year US treasury bonds — which generally fall in tandem with rising demand — dropped 0.05 percentage points to 1.324%, with a similar drop seen in German Bund yields. The move away from riskier assets was evident globally, with oil and BTC dropping. Commodities with big exposure to the Chinese economy, like metal, also saw big declines, in turn negatively affecting mining shares. Energy and financial companies were also losers at close on Monday.

Here at home, the EGX30 is back in the red year-to-date after falling 1.6% yesterday. Real estate firms led the sell-off, with the Egyptian Resorts Company falling 6.2%, Heliopolis Housing losing 5.6% and Madinet Nasr Housing & Development shedding 4.4%. The benchmark index is now down 1.2% YTD.

The day ahead: Asian markets were stable ahead of dispatch with Chinese stocks in the green as of 5am CLT. Stock futures have US markets rebounding in early trading today, while the picture is more mixed in Europe.

All of this could be setting us up for a high-stakes Fed meeting today: The US Federal Reserve will hold its two-day policy meeting today and tomorrow, during which it is expected to announce more details on when it will begin to unwind its covid-era bond-buying programme.

The key question: With the markets appearing rattled, will policymakers play it safe and hold off announcing a taper timetable? Under pressure from rising inflation, the majority of economists are expecting the bank to begin reducing stimulus before the end of the year, but Fed officials are likely going to tread carefully to avoid further inflaming the escalating Evergrande sell-off. Chairman Jay Powell will announce the central bank’s decision on the taper and interest rates at a presser after the meeting ends tomorrow.

Down

EGX30

10,711

-1.6% (YTD: -1.2%)

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

11,328

-0.6% (YTD: +30.4%)

Down

ADX

7,745

-0.8% (YTD: +53.5%)

Down

DFM

2,872

-1.2% (YTD: +15.3%)

Down

S&P 500

4,357

-1.7% (YTD: +16.0%)

Down

FTSE 100

6,903

-0.9% (YTD: +6.9%)

Down

Brent crude

USD 74.26

-1.4%

Down

Natural gas (Nymex)

USD 4.99

-2.4%

Up

Gold

USD 1,763.80

+0.7%

Down

BTC

USD 43,560

-8.5% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 1.6% at yesterday’s close on turnover of EGP 1.2 bn (23.3% below the 90-day average). Local investors were net sellers. The index is down 1.2% YTD.

In the green: Abou Kir Fertilizers (+0.2%).

In the red: Egyptian Resorts Company (-6.2%), Heliopolis Housing (-5.6%) and MM Group (-4.6%).

AROUND THE WORLD

Progress in Lebanon: Lebanon’s new government has won a vote of confidence for a raft of emergency measures designed to drag the country out of a prolonged economic crisis, compounded by severe fuel shortages — after the vote was delayed when the parliament building was hit by a power cut. The policies drawn up by Prime Minister Najib Mikati's newly-appointed government are designed to re-open talks with the IMF and other international lenders to unlock emergency assistance.

The 10-year anniversary of the US debt-ceiling crisis may well be marked with another debt ceiling crisis: Democrats are running out of options to raise the debt ceiling after Republicans refused to allow the government to borrow more money, heaping pressure on the Biden administration to avert a government shutdown and a default sometime in October, the Washington Post reports.

greenEconomy

How climate change is hitting agriculture in Egypt: The Mediterranean and North Africa region is among the most vulnerable to the impact of climate change, with summer temperatures rising, rainfall dwindling, and extreme temperatures becoming more pronounced, this year’s landmark climate report from the Intergovernmental Panel on Climate Change (IPCC) found. Last month, we broadly explored how vulnerable Egypt is — by virtue of its geography, climate and dependence on agriculture — to these changes in our climate. Today, we look at examples of how this is being observed on the ground: namely our mango and olive crops, which took a beating this year.

Sounding the alarm: Productivity on olive groves and mango farms has seen a significant decrease in the first half of 2021, according to multiple sources who spoke to Enterprise. And while the full scale of the damage is still being tallied, all farmers and climatologists we spoke with tell us that this year has been among the worst they’ve observed in decades.

Olive production fell by around 60-80% during this year’s harvest season, head of the agrometeorological department at the Central Laboratory for Agriculture Climate Shaker Abou El Maaty told Enterprise. With local olive crop yield in 2020 standing at 497k tonnes in the 2019-2020 year, this year’s yield is between around 100-200k tonnes so far. Egypt’s 2020-2021 yield was forecast last year to come in at 690k tonnes.

This is particularly significant given Egypt’s leading position in the global olive market: Industry figures show that Egypt was the largest exporter of table olives in the world in the 2019-2020 season, producing almost a quarter of the global total.

It’s not just us that are decrying falling olive production: Major exporters such as Italy and Greece as well as Portugal, Morocco, and Tunisia all experienced significant drops in olive production this year.

So, what happened to the olives in Egypt? Olives succumb easily to climatic fluctuations and Egypt’s weather this year was very prone to sudden shifts, Mohamed Fahim, head of the Central Lab for Agriculture Climate, explained to Enterprise. Olive crops are greatly affected by warm winters and the warm khamaseen winds, both of which took place this year. He explains that the winter season this year was unusually warm and began in the middle of February — which otherwise is the time when Egypt’s rainy season begins to prepare for the spring. “Olives need the temperature to drop to 10°C for a certain number of hours throughout the winter in order for the tree to be ready for the next growing season,” he said.

Our favorite kunafa topping is also in trouble: Mango production fell 20-25% in this year’s harvest, a source at the Agriculture Ministry tells us. Enterprise spoke with local farmers to judge the impact on the mango crops. For Mohamed Adam, a mango farm owner and wholesaler in Ismailia governorate, his crop saw only one or two trees bear mangos this year, meaning his production was almost zero. Abdel Hafez Al Ahmadi, another owner of an Ismailia mango farm, told Enterprise that he estimates that weather-related factors contributed to a 40% decrease in production compared to last year.

Mango crops succumbed to high temperatures in an unprecedented way, with Adam attributing the fall in his production to the heatwave that hit Egypt in Ramadan, he told us. Meanwhile, Al Ahmadi relates it back to a more long-term inconsistency in weather, particularly during February and March of this year. The fluctuations did not help the pollination process of mangoes and led to "embryo death" in many cases, he added. Heading into the end of the season, it’s evident that quantity will remain down, Al Ahmadi said.

A look at the numbers: Average mango production last agricultural year amounted to 5 tonnes per feddan, our source at the ministry told us. Production data will be released when the season ends in mid-October, but by his estimated percentage we calculate that they should be around 3.75-4 tonnes per feddan. Egypt's agricultural exports amounted to around 4 mn tonnes in the period between January 2021 to June 29, 2021, with mangos contributing the least of all agricultural products with a total of 768 tonnes, according to the Agriculture Ministry.

Egypt’s climate changes are apparent: The summer of 2021 is the hottest in five years, with temperatures recording 3-4°C above normal rates, a study published last August by the Egyptian Meteorological Authority said. This has been a long time in the making, with Abou El Maaty explaining that Egypt’s climate changed in the past 20 years by 1.5-2°C, which caused an increase in temperatures from an average of 28°C at the end of the 1970s to 45°C now.

Major swings in weather are a major part of Egypt’s climate change crisis and could lead to an irreversible change in the environment, Fahim warns. “Egypt's geographical location and the fragility of the country's climate exacerbate the impact of slight changes in weather conditions,” he says. Fahim’s lab monitored the change in the climate between 2006 and 2018, finding that “summer” now extends to most of the year. As a result of this change, agricultural crops that are not accustomed to the new year-long climate are wilting away. Olives and mangoes are two of the most susceptible crops to weather changes and their impact this year is a warning that Egypt should take seriously.


Your top climate stories for the week:

  • A joint ministerial climate agreement: Egypt will embark on a climate change project in Greater Cairo as per a ministerial agreement between the health, development and transport ministries.
  • Possible climate agreement with the World Bank: Officials from the international cooperation and environment ministries discussed with World Bank representatives ways to cooperate on developing new policies to combat climate change.
  • Five new factories for recycling: E-Tadweer could establish five new factories for recycling.

CALENDAR

13-21 September (Monday-Tuesday): EFG Hermes’ fourth Virtual Investor Conference.

14-30 September (Tuesday-Thursday): 76th session of the UN General Assembly, New York.

19-22 September (Sunday-Wednesday): Insurance Federation of Egypt’s Rendezvous conference, Sharm El Sheikh.

21-22 September (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

22 September (Wednesday): IMF + EBRD “State-owned enterprises in the Middle East, North Africa and Central Asia” webinar.

22-25 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo, Egypt.

29 September (Wednesday): DevOpsDays Cairo 2021 is being organized by ITIDA and the Software Engineering Competence Center in cooperation with DXC Technology, IBM Egypt and Orange Labs.

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.

30 September: Closing of 2021’s first oil and gas tender in the Gulf of Suez, Western Desert, and the Mediterranean.

30 September (Thursday): First tranche of overdue subsidy payouts will be handed to eligible exporters.

30 September (Thursday): Direct flights between Egypt and three Libyan airports resume.

October: New legislative session begins — must be held by the first Thursday of October.

October: Romanian President Klaus Iohannis could visit Egypt in mid this month to discuss ways to boost tourism cooperation between the two countries.

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

1 October (Friday): Expo 2020 Dubai opens.

1 October (Friday): Deadline for state-owned companies and government agencies to sign up to e-invoicing platform.

6 October (Wednesday): Armed Forces Day.

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

9 October (Saturday): Public schools begin 2021-2022 academic year

11-17 October (Monday-Sunday): IMF + World Bank Annual Meetings.

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.

24-28 October (Sunday-Thursday) Cairo Water Week, Cairo, Egypt.

27-28 October (Wednesday-Thursday) Intelligent Cities Exhibition & Conference, Royal Maxim Palace Kempinski, Cairo, Egypt.

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

28 October (Thursday): Second tranche of overdue subsidy payouts will be handed to eligible exporters.

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

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

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

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

16-17 November (Tuesday-Wednesday): Africa fintech summit, Cairo.

26 November-5 December (Friday-Sunday): The 43rd Cairo International Film Festival.

29 November-2 December (Monday-Thursday): Egypt Defense Expo, Egypt International Exhibition Centre.

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

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

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

15 December (Wednesday): Deadline for joint stock companies and investment companies in Cairo to join e-invoicing platform.

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.

22-24 April 2022: World Bank-IMF spring meeting, Washington D.C.

May 2022: Investment in Logistics Conference, Cairo, Egypt

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools

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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