Thursday, 23 September 2021

From a capital gains taxes on the EGX starting in 1 January to a clampdown on retail tax evasion, the taxman will get his due

TL;DR

WHAT WE’RE TRACKING TODAY

Well, friends, we’ve nearly made it through another workweek together, and our reward is another very busy news morning, with everything from M&A to taxation in the spotlight — and the promise of very nice weekend weather ahead.

Tax: Domestic investors in the EGX (international shareholders are exempt) will want to pay really close attention to our story on the capital gains tax — it’s coming into effect on 1 January. Also big is news that the state is piloting its business-to-consumer e-invoicing system, which will eventually require all retailers to report sales in real-time to the taxman.

M&A: A so-far unconfirmed report suggests Saudi’s STC is lining up financing to make another run at Vodafone Egypt. Vodafone and (large) minority shareholder Telecom Egypt deny talks are back on.

We have chapter and verse on all of this and more below.

Fed taper in November + rate hikes in 2022: Federal Reserve boss Jerome Powell said that the central bank could begin unwinding its huge bond-buying programme in November, while policymakers signalled that they could move to raise interest rates next year. Speaking at the end of the central bank’s two-day policy meeting yesterday, Powell said that an announcement “could come as soon as the next meeting,” which will take place on 2-3 November.

This is what most economists were forecasting: Recent polls have shown a majority of economists think the Fed will start to reduce its USD 120 bn a month in asset purchases before the end of the year, and start to raise interest rates next year.

Any rate hikes will be gradual: With its benchmark overnight rate currently at near-zero, the Fed is not expected to raise rates to 1% until 2023 and then 1.8% in 2014.

Markets celebrate: The Fed meeting boosted shares in the US, where all three major indexes saw gains following several days of Evergrande-fuelled volatility. The S&P 500, Nasdaq and Dow Jones all gained 1% during yesterday’s trading session, despite the hawkish tone. “Given the recent volatility, it’s likely that investors are viewing the taper projection and potential 2022 rate hikes as a vote of confidence that the recovery is on track,” one strategist told Bloomberg.

And the good news over at Evergrande yesterday is fuelling a rebound in commodities: A Bloomberg index of 23 commodities ended four days of declines to rise 1.4% yesterday as investors’ concerns about a default at China’s second-largest real estate firm abated, Bloomberg says.

The story is everywhere in the global business press this morning: Reuters | Bloomberg | FT | Wall Street Journal.

Evergrande avoided default yesterday after striking an agreement with its creditors to delay an interest payment, and its shares surged in trading earlier today as the company’s chairman tried to reassure investors. But the FT is warning that it’s not done and dusted, writing that “deepening worries over Evergrande have ignited selling in a USD 428 bn corner of the Asian debt market, underscoring how the crisis at the Chinese property developer is spreading to other assets.” The salmon-colored paper says to keep an eye on a “crucial payment deadline” later today.


French envoy to return to Washington after Biden call smooths over submarine row: French President Emmanuel Macron will send his US ambassador back to Washington, according to a joint French-US statement, after US President Joe Biden on Wednesday called to soothe French anger over the signing of the Indo-Pacific “Aukus” pact between the US, Australia and the UK. Biden struck a conciliatory tone in the statement, appearing to admit that Paris should have been kept in the loop on the pact, which earlier this week saw Australia dump a longstanding agreement to buy French submarines in favor of new nuclear subs from the US and UK.

WHAT’S HAPPENING TODAY-

Egypt will host the 2022 Ministerial Gas Forum: Organized by the International Energy Forum and the International Gas Union (IEF-IGU), the event will take place in Egypt during the second half of 2022, and will have on its agenda the post-covid economic recovery, the current surge in natgas prices, and climate change, the IEF said in a statement yesterday.

And we will also play host to the AfdDB’s annual meeting in 2023: The African Development Bank’s board has agreed that its five-day annual meeting will be held in Sharm El-Sheikh from 22 to 26 May 2023, the Central Bank of Egypt said in a statement (pdf) yesterday

It’s Day 2 of the Cityscape real estate investment conference at the Egypt International Exhibition Center. The event runs until 25 September.

** IN CASE YOU MISSED IT — top stories from yesterday’s edition of EnterprisePM:

  • Egypt has infrastructure ready to store up to 4 mn doses of Pfizer’s covid-19 jab, according to Health Minister Hala Zayed, who noted that the country is prepared to receive a batch of Pfizer over the weekend.
  • The EGX30 snapped a five-day losing streak, ending the session up 0.9% at the closing bell at the same time as global markets sighed in (muted?) relief after China Evergrande appeared to have negotiated an agreement with its bondholders.
  • How are Egypt and global business leaders coping with the stresses of 2021? Let’s just say that it’s not as well as we’d like.

CIRCLE YOUR CALENDAR-

In town next week: White House National Security adviser Jake Sullivan will visit Cairo next week as part of a brief Middle East tour that will take him to Saudi Arabia and the UAE, sources with knowledge of the matter tell Axios.

Conference season continues next week with ITIDA’s DevOpsDays Cairo 2021, which is being organized together with Software Engineering Competence Center, DXC Technology, IBM Egypt and Orange Labs. The event will take place on Wednesday, 29 September. Other events include:

  • Egypt Projects 2021 construction expo, which will take place at the Egypt International Exhibition Center on 30 September-2 October.
  • The Cairo International Fair, which will take place on 30 September-8 October at the Cairo International Conference Center.
  • The deadline to register for the AUC Business School’s Private Equity Diploma is coming up on 28 September.

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

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.

M&A WATCH

Is Vodafone Egypt back in play?

Is Saudi’s STC making another run at Vodafone Egypt? Saudi Telecom (STC) may be resurrecting its bid to acquire a majority stake in Vodafone Egypt, nine months after talks broke down with its parent company. Banking sources tell CNBC Arabia that the Saudi company is looking to secure a USD 1.1 bn soft loan to help finance the acquisition.

Back from the dead? STC was in talks with Vodafone Plc for most of last year to acquire its 55% stake in its local subsidiary. The Saudi firm initially valued the company at USD 4.4 bn after submitting a USD 2.39 bn non-binding offer for the stake, but later tried to negotiate a lower price after the onset of covid-19. After a series of delays and expired deadlines, Vodafone announced in December that talks had collapsed, but didn’t provide a reason.

CNBC claims that the two companies are back in talks, saying unnamed sources tell it there are “ongoing negotiations.”

Vodafone and Telecom Egypt denied there are talks: A company official told Youm7 that there are no ongoing talks with STC. Telecom Egypt, which owns 45% of Vodafone Egypt, denied knowledge of the news in a statement (pdf).

STC is coming off a successful IPO in Saudi Arabia: STC has just raised almost USD 1 bn after selling 20% of its solutions subsidiary in an IPO on the Tadawul, it announced yesterday.

CAPITAL GAINS TAX

The capital gains tax is definitely coming to the EGX on 1 Jan

The EGX capital gains tax will come into force in Jan after all: Finance Minister Mohamed Maait confirmed in an interview with CNBC Arabia earlier this week that a 10% tax on the gains investors make on EGX transactions will be coming into effect on 1 January, putting an end to speculation on whether the long-planned levy would be implemented, postponed or axed come 2022.

We’ve been aware since last year that the CGT could make a comeback: As part of a raft of measures to support investment in Egyptian equities during the pandemic, the government last year postponed the reintroduction of a capital gains tax on EGX transactions until 1 January 2022.

But things were thrown into confusion earlier this month when the Finance Ministry seemed to indicate that it would not be introducing new taxes on shares. Tax regulations published by local media suggested that the 10% tax would come into force on 1 January as expected, which the ministry quickly denied, saying the regs had been issued to clarify pre-existing rules and were not an indicator of a new tax on shares.

So who will be taxed, and on what basis? The 10% CGT will be imposed on net portfolio earnings at the end of the tax year, after deducting brokerage fees. Foreign investors in the bourse won’t pay a dime, as the new rules apply only to people and companies residing in Egypt. The Tax Authority has said that institutional investors with portfolios exceeding EGP 5 mn will likely be required to open a tax file to pay the tax, Prime Holdings CEO and Egyptian Capital Market Association (ECMA) President Mohamed Maher told Al Arabiya. The EGX’s smaller retail investors — who account for 80% of EGX traders — won’t need to do so as the tax will be deducted by Misr for Central Clearing and Depository.

Wait — it’s based on your portfolio gains, and not on a per-stock basis? That’s according to a copy of the executive regulations published earlier this month by El Balad, which says the CGT will be calculated based on the “net realized capital gains of [the investor’s] portfolio of securities as of the end of the tax year.” Industry watchers were concerned earlier this month that the tax would be levied on a per-stock and not portfolio basis — an approach that flies in the face of global practice. We’re reaching out to the Tax Authority for clarification on this point and will report back when we have news.

Plans to slap a tax on EGX investors have been in the works since 2015. They were first postponed until 2017 after retail investors howled, before being replaced by 0.125% stamp tax as the CGT was put on hold for three years. Talks were reportedly held in 2019 on plans to revive the CGT for 2020, before the pandemic arrived and the government postponed its reintroduction until 1 January 2022, as part of a raft of measures to support investment in Egyptian equities.

Realized gains on investments in privately held companies will still be taxed at a 20% rate under the regulations — a figure that we think is ridiculous and should be cut to match the 10% CGT on investments in listed companies.

But is the timing right? (And will it ever be right, in the eyes of retail investors?) The ECMA should point out that this is not the appropriate time to introduce the capital gains tax, Maher told the newspaper, stating that the EGX is still in recovery. The benchmark EGX30 is again in the red for the year to date after briefly crawling into positive territory. Egypt’s benchmark index is down 2.3% YTD, while regional competitors for global capital are all handily in the green: ADX is up 54% as of this morning, while Tadawul is ahead nearly 30% for the year and DFM has gained a comparatively anemic 14% YTD. Trading volumes have been reasonable in 2021 (by the standards of recent years), but have been dominated by retail investors (first and foremost), followed by local institutions. Foreign investors are yet to return to the EGX.

The move will please the IMF, if not local investors: The International Monetary Fund (IMF) has been critical about the lack of a CGT in Egypt, which it has said would leave poorer Egyptians shouldering a disproportionate tax burden. It’s yet to be seen whether policymakers have been justified in their fear that the levy would have a dampening effect on local investment in the bourse.

TAX

And so it begins…

A pilot program for B2C e-invoicing has kicked off: The Finance Ministry has announced the rollout of electronic invoicing for business-to-consumer transactions, marking a new phase of the government’s efforts to bring more Egyptian businesses into the formal economy and and make it more difficult to avoid giving the taxman his due.

Some 100 companies are taking part in a six-month trial phase during which they will need to record all transactions via a real-time electronic system, Finance Minister Mohamed Maait announced at a presser yesterday, kicking off a process that will eventually see all of the country’s B2C sales logged with the Tax Authority.

Say goodbye to the days of having two sets of books: All sales will be logged in a central database using sales data controller (SDC) devices installed in traders’ point-of-sale (POS) machines, enabling the Tax Authority to monitor and verify transactions. SDCs should be compatible with most POS machines used by retailers and service providers, meaning implementation should be relatively simple — and, of course, that your friendly neighborhood systems integrator is going to be laughing all the way to the bank.

Who’s on board? Among the 100 companies taking part in the pilot are consumer electronics giant El Araby, hypermarket Carrefour, retailer Awlad Ragab and auto distributor Kia. The government is in the process of distributing the devices to the participating companies, after which they will be expected to immediately begin logging transactions.

The timetable: Retailers will be the first companies to join the system followed by the services industry in a later phase, according to Maait. Hypermarkets, grocers, pharmacies and auto distributors will be included in the first phase, though e-commerce companies will be on-boarded at a later date. Unlike for B2B transactions, the ministry has not set any target dates for completion, and expects the process of integrating all shops, businesses, and service providers into the scheme to take years.

The idea is to cut down on tax evasion and integrate informal businesses into the formal economy, Maait said. The ministry believes the system could eventually double the government’s tax revenues from EGP 1 tn to around EGP 2 tn.

B2B e-invoicing is already well under way: All 2.8k of the country’s large taxpayers are now issuing e-invoices via the ministry’s digital tax platform, and they are set to be joined later this year by Cairo-based joint stock companies, investment companies, public sector businesses and government agencies. The ministry is expecting to have all of the country’s taxpayers filing B2B e-invoices for transactions by April 2023.

COVID WATCH

We’ve received 2.9 mn doses of AstraZeneca this week, by our count

Egypt received 1.5 mn doses of AstraZeneca vaccines yesterday, the Health Ministry announced, without citing the origin of the shipment.

We also received 851k doses of AstraZeneca vaccines on Monday, supplied by Germany under the Gavi / Covax program, Unicef announced on Tuesday. That’s in addition to 546k AstraZeneca vaccine doses received from the French government on Sunday, for a total of 2.9 mn doses of AstraZeneca so far this week. Health Minister spokesperson Khaled Megahed on Monday said Egypt is expecting to receive around 3.5-4 mn doses of AstraZeneca this week from France, Germany, Greece and Poland, after Health Minister Hala Zayed last week said we were expecting only 100-250k doses of AstraZeneca by an undetermined date.

The Health Ministry reported 692 new covid-19 infections yesterday, up from 688 the day before. Egypt has now disclosed a total of 298,988 confirmed cases of covid-19. The ministry also reported 27 new deaths, bringing the country’s total death toll to 17,043.

IN GLOBAL COVID NEWS-

The US has pledged to donate another 500 mn doses of the Pfizer vaccine through Covax starting in January, according to Reuters. The new doses for low and middle-income countries will bring the number of jabs donated by the US to over 1.1 bn.

Global health experts welcomed the donation — but said it was still insufficient, estimating that 5-9 bn shots are needed to vaccinate the world’s population. They also noted that the Pfizer vaccine poses difficulties for developing nations, which often lack the necessary shipping and storage infrastructure. Biden said USD 750 mn in total would be allocated to help distribute and administer the jabs.

The UK will accept vaccination certificates issued in the UAE starting 4 October, the British embassy said on Twitter yesterday, opening one of the busiest flight routes in the world between two major business hubs. The UK will only accept certificates of people who have received the AstraZeneca, Pfizer, Moderna or Johnson Johnson vaccines. The easing of restrictions comes as Dubai prepares to open its doors for the Expo 2020 which begins on 1 October.

When will it be Egypt’s turn? “We are now working with the Egyptian government to come up with a mechanism that will make vaccination certificates, for those who received the vaccine in Egypt, recognized in the UK,” the British embassy said Tuesday, without providing further details.

DEBT WATCH

CIRA to borrow EGP 260 mn to fund capex

CIRA will borrow EGP 260 mn from an undisclosed Egyptian bank to fund upcoming projects, it announced in a bourse filing (pdf) yesterday after the board greenlit the decision. The statement doesn’t provide further information and a company spokesperson was not immediately available for comment.

What we know about the CIRA’s borrowing plans: The company has been in talks with a syndicate of international banks to obtain financing for its planned applied tech university, negotiating with three banks for a credit facility that would cover 40-50% of the EGP 2 bn project.

The education company and its subsidiary Eduhive are eyeing major expansion: CIRA will invest EGP 500 mn to set up four language schools in Qena, New Assiut, New Rashid and El Alamein by 2022. It expects to launch Egypt’s first private sector technical college in September 2023, while Cairo Egypt for Education (CEE) — a JV between CIRA and Elsewedy Capital Holding — is planning to build and run a EGP 2.5 bn university on a 58-feddan plot in New Damietta.

IN OTHER CIRA NEWS- The company will distribute EGP 100 mn in dividends to shareholders for the fiscal year 2019-20, paying out around EGP 0.17 per share, the company said in a separate disclosure (pdf) to the EGX yesterday.


MEANWHILE- State banks to lend EUR 152 mn to Wotech for green MDF factory: Banque du Caire, the National Bank of Egypt (NBE) and Banque Misr will lend EUR 152 mn to state-owned woodmaker Wotech to establish a factory producing MDF wood from rice straw, NBE said in a statement (pdf). The project aims to reduce air pollution caused by the burning of rice straw, a widespread agricultural practice at the end of the harvest season.

EDUCATION

Egypt Education Platform expands to Alexandria, adding AIA International School to its portfolio

The Egypt Education Platform (EEP) has signed an agreement to add Alexandria’s AIA International School to its portfolio, it announced in a statement (pdf) yesterday, without disclosing a value for the transaction or how it would be financed. The campus was developed on a built-to-lease basis and can accommodate up to 1k students, according to the statement.

This marks EEP’s fifth investment in Egypt — and its first outside of Cairo: This is an important step in EEP’s geographical expansion plans, allowing the platform to diversify by offering the International Baccalaureate (IB) for the first time, the statement says. “AIA is an ideal partner to be our first venture in Alexandria, which strongly complements our geographical expansion plan,” said EEP’s CEO Ahmed Wahby. Bringing AIA onto the EEP portfolio will help to establish a strong IB base within the platform and fast track AIA’s growth, he added.

AIA will join several other schools in the EEP’s international school stream: These include Hayah International Academy, GEMS British International School Madinaty and GEMS British School Rehab. It also has two other international schools under development: GEMS International School Cairo is scheduled to open in New Cairo in September 2022, while GEMS International School Soma Bay is set to open in September 2023.

The EEP is the management company managing the assets of the Egypt Education Fund, and it’s growing rapidly. It has added seven schools to its portfolio since it was established in 2018, and currently serves more than 8k students.

SUSTAINABILITY

EBRD pledges nearly USD 1 bn increase in Green Cities investments worldwide

The European Bank for Reconstruction and Development (EBRD) will nearly double its “priority investments” in its Green Cities program to around EUR 1.9 bn by end-2023, up from EUR 1.01 bn as of this August, according to a statement. Under the newly announced Green Cities Compact, the European development bank will also increase the number of action plans in place for the cities in its flagship urban greening program to 50 in the same period, up from a current 19.

Does this mean more green funding for Egypt? The statement gave few details on exactly how and where the funding will be allocated, but in theory this could mean additional money for sustainable infrastructure in Cairo, Alexandria and Sixth of October, all of which are members of the Green Cities initiative. Cairo and Alexandria joined the initiative in 2019 and both have Green City Action Plans (GCAPs) in place, while the Sixth of October GCAP is still in development after the city signed up earlier this year.

Two projects in Egypt are currently in line for Green Cities funding: The bank recently signed off on the EUR 25 mn loan that will help finance the construction of the Sixth of October Dry Port, while a EUR 250 mn facility to fund the upgrade and electrification of the Abu Qir metro in Alexandria is pending approval.

This is the second Green Cities funding pledge this month: Earlier this month, the EBRD said it would add an additional EUR 2 bn to its Green Cities Framework 2 Window 2, bringing the program’s total funds to EUR 3.65 bn.

IN OTHER EBRD NEWS- CI Capital’s microfinance arm Reefy has secured EGP 80 mn in development finance from an EBRD program for women in business, International Cooperation Minister Rania Al Mashat said in a cabinet statement. The lender will allocate the money to Egyptian women-led MSMEs, who will also receive technical and business support through the scheme, the statement read.

IN OTHER CLIMATE NEWS- Egypt is planning to produce a report on how climate change is impacting the country, and the international cooperation and environment ministries are in talks with the World Bank to help with the data collection and research process, according to a cabinet statement.

STARTUP WATCH

Silicon Valley-based Plug and Play to invest in Egypt’s startup ecosystem

Plug and Play to partner with ITIDA to develop Egyptian startups: Silicon Valley-based early-stage investor and accelerator Plug and Play will launch a new startup accelerator and an incubator in Egypt in partnership with the Information Technology Industry Development Agency (ITIDA), the Communications Ministry said in a statement yesterday. Under the three-year agreement signed yesterday, Plug and Play will launch a new accelerator program that will run two cycles each year, targeting a total of 60 companies. The incubator will provide support to 60 early-stage startups each year split into two cycles. These will be run by a new company to be set up in Cairo by Plug and Play and ITIDA.

The program aims to help its startups attract USD 20 mn in investments over the three-year period, in addition to creating at least 500 jobs.

ALSO FROM PLANET STARTUP-

Egyptian fintech startup Paynas will provide digital financial services to clients of E3lany after inking an agreement with the state-owned mobile and digital advertising firm yesterday, according to a cabinet statement. Under the partnership, E3lany will provide a range of financial services to taxi drivers, including allowing them to process fares digitally, apply for loans to buy spare parts, and advertise their services online. The statement claims the agreement will helo generate more than EGP 1 bn worth of business in the first year.

MOVES

France appoints new ambassador to Egypt: Marc Baréty will replace Stéphane Romatet as France’s ambassador to Egypt, the French embassy said in a statement announcing his appointment. Baréty has worked for the French foreign affairs ministry in various MENA-related positions stretching back to 1986, most recently as ambassador to Baghdad and then Islamabad. He holds a PhD in French literature and speaks both English and Arabic. There’s no word on when Baréty will take over from Romatet in Cairo.

KUDOS

CIB will represent Africa on the steering committee of the UN’s Net-Zero Banking Alliance, a group of 55 financial institutions set up earlier this year that aim to reduce emissions of their lending and investment portfolio, the bank has announced in a statement (pdf). The 12-member steering group will oversee decision-making and strategy for the alliance, which wants to reach net-zero emissions by 2050.


Matouk Bassiouny has been shortlisted for local and frontier advisor of the year in the 2021 Private Equity Africa Awards, it said in a press release (pdf). It has also been shortlisted for the single transaction advisor of the year for its work advising Alta Semper Capital, Tana Africa Capital, and Ezdehar Management.


The National Bank of Egypt and Banque Misr have been named two of the safest banks in Africa by Global Finance (pdf), coming in ninth and tenth place respectively in the list of 10 financial institutions.

The list was dominated by South African banks which took up five of the 10 spots, while the top three places went to Moroccan banks, with Attijariwafa Bank coming top of the list, Groupe Banque Centrale Populaire in second, and Bank of Africa in third.

The selection criteria was based on an evaluation of banks’ long-term foreign currency ratings from three credit rating firms, Moody’s, Standard & Poor’s and Fitch.

enterprise

ENTERPRISE+: LAST NIGHT’S TALK SHOWS

It was a quiet night on the airwaves: Speaking to Yahduth Fi Masr (watch, runtime: 5:36), MP Sanaa Al-Saeed called on the Education Ministry to reconcile the status of 36k teachers who were hired before having their contracts terminated, rather than opening the door to volunteers. Schools around the country are currently facing a shortage of teachers, leading to the Education Ministry calling on people to volunteer as teaching assistants when the new public school year begins next month. Education Minister Tarek Shawki told El Hekaya’s Amr Adib earlier this week that there is currently a 250k shortfall in teachers and that the ministry would pay volunteers EGP 20 a class to fill the gap (watch, runtime: 4:15). The education and finance ministers said yesterday that the statuses of the 36k teachers is under discussion and will be resolved shortly, according to Al-Saeed.

What’s with the huge teacher shortage? Shawki said that budget limitations mean that the government does not have the capacity to hire new teachers.

Where did this come from? Readers will recall that austerity measures implemented last year by the Madbouly cabinet included a freeze on hires at any government body — including replacements for folks who quit or retire. Replacements are only hired now after a governorate flags a shortage of teachers and gets one-off approval from the Education Ministry to hire replacements or new positions.

Also on the airwaves last night: Developments in the ‘Decent Life’ initiative, which were followed up on in a cabinet meeting: Yahduth Fi Masr (watch, runtime: 5:49) and Al Hayah Al Youm (watch, runtime: 1:12).

EGYPT IN THE NEWS

It’s another super-quiet morning in the foreign press: The lone piece of note is brought to us by Reuters, which says that Al Azhar scholars returning from Afghanistan are hoping that their tolerant teachings on Islam will survive hardline Taliban rule.

PLANET FINANCE

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Saudi Arabia's sovereign wealth fund will soon announce its first green debt issuance, with borrowing linked to sustainability, according to Reuters. This will be the first issuance of its kind done by a sovereign fund, Yasir Al Rumayyan, governor of the Public Investment Fund, said during a virtual conference.

Green debt issuance is on the rise in MENA after the value of green and sustainability-linked debt sales in the MENA region rose by 38% y-o-y in the first six months of 2021. Egypt became the first country in the region to issue sovereign green bonds last year, raising USD 750 mn.

Up

EGX30

10,596

+0.9% (YTD: -2.3%)

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USD (CBE)

Buy 15.66

Sell 15.76

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USD at CIB

Buy 15.66

Sell 15.76

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Interest rates CBE

8.25% deposit

9.25% lending

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Tadawul

11,270

-0.4% (YTD: +29.7%)

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ADX

7,781

+0.4% (YTD: +54.2%)

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DFM

2,843

+0.2% (YTD: +14.1%)

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S&P 500

4,395

+1.0% (YTD: +17.0%)

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FTSE 100

7,083

+1.5% (YTD: +9.6%)

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Brent crude

USD 76.19

+2.5%

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Natural gas (Nymex)

USD 4.77

-0.7%

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Gold

USD 1,769.10

-0.6%

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BTC

USD 43,341

+4.7% (as of midnight)

THE CLOSING BELL-

The EGX30 rose 0.9% at yesterday’s close on turnover of EGP 1.2 bn (23.9% below the 90-day average). Regional investors were net buyers. The index is down 2.3% YTD.

In the green: Pioneers Holding (+7.6%), Raya (+6.5%) and Cleopatra Hospitals (+4.7%).

In the red: Credit Agricole (-0.9%), Fawry (-0.5%) and CIRA (-0.2%).

Asian markets are mixed this morning, with the Nikkei and Kospi both in the red while shares in Hong Kong and Shanghai are in the green. Futures suggest shares in Paris, London, Frankfurt will open in the green later this morning — and that both Bay Street and Wall Street will follow suit later today.

DIPLOMACY

Turkey is taking action against TV hosts as it looks to warm ties with Cairo: Turkey-based Egyptian pro-Ikhwan TV channel El Sharq will no longer allow Haytham Abu Khaleel to appear on its network, after Turkish authorities told the broadcaster to ban the presenter for violating instructions to abstain from criticizing Egypt, sources told Al Arabiya. According to the sources, Abu Khalil has been warned by Ankara not to make any more appearances on Turkish public media, whether broadcast, print or social media. Turkish officials also warned four other Ikhwani broadcasters not to criticize Egypt in their content.

The move comes as Turkey attempts to mend an almost decade-long rift with Egypt, which has said that Ankara must fulfil certain requirements — including withdrawing from Libya and handing over members of the Ikhwan — before diplomatic ties can be restored. Al Sharq, which is run by former Egyptian MP Ayman Nour, is one of three broadcasters that were told by Turkish authorities in March to refrain from criticizing the Egyptian government so as not to affect ongoing talks.

Shoukry has been doing the rounds at the UN: According to a number of foreign ministry statements, Shoukry yesterday held bilateral talks with the foreign ministers of Ireland, France, and Vietnam, participated in a meeting of members of the Berlin Conference process on Libya, and gave a speech at a meeting to commemorate the 20th anniversary of the signing of the Durban Declaration against racial discrimination and xenophobia.

MY MORNING ROUTINE

Hussein Momtaz, co-founder and CEO of Koinz: Each week, My Morning 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 Hussein Momtaz, co-founder and CEO of Koinz (LinkedIn), used by more than 1.5k restaurants to collect and manage data, attract and retain customers, and promote their businesses.

Edited excerpts from our conversation:

My name is Hussein Momtaz, I am the co-founder and CEO of Koinz. After graduating from computer engineering from Al Azhar University, I decided to build a software house with one of my friends. In the three years that followed, we experimented with different ideas and did a few projects in the Gulf region until we found something promising enough to give it our full attention. This is when we launched Koinz in 2018 and shut down our software house.

Koinz aims to reinvent food platforms: We designed an experience that allows walk-in customers to become online users through Koinz. Ever since I was a kid, I became passionate about design; you feel these two backgrounds collide at Koinz, from the tech perspective of the product to the psychology of the UX design. We used a lot of psychology in order for this experience to become successful.

I have two morning routines: One that I have control over and one that I don’t. In my normal routine I wake up at 8 am to finish some chores during my golden hour or what I call “focus hours.” This is the time when I get everything that requires a lot of focus done. I also get things done during my commute because I do a lot of reading and catching up.

Then there’s the other, more chaotic. Routine. I sometimes stay up until 4-5 am working, which means that I won’t wake up until 10 am. I do my best to keep to my normal routine and avoid late nights though. Sleep deprivation is never in anyone’s interest and inevitably affects performance.

When I’m close to burning out, I try to head to Sahel even for just one day to switch off. I don’t do it very often though, maybe once every 5-6 months. But it’s something that I definitely want to do more often because it helps keep me sane.

Since the onset of the pandemic, people are being expected to be available 24/7. The concept of going back home and just switching off no longer exists. I think there are many distractions at the office and WFH is a great way to boost your concentration. On the other hand, it is hard for people to connect on a personal level from home and struggle to get to know each other. Therefore, I really believe in the hybrid model because I just don’t think working remotely full time is suitable for our culture.

Keeping a structured schedule as a CEO can be a challenge and this is something I learned the hard way. You need to work somewhere that is not entirely accessible, somewhere you can work on your own otherwise you’ll have so many distractions and you’ll struggle to keep a structured schedule and a proper work-life balance. The worst scenario is when you’re not concentrating 100% and you’re not giving yourself a break either. You can work for 14 hours straight, while the quality hours that you’ve actually worked could be only five hours.

I watch the most dim-witted TV shows to completely switch off when I get home. I am a big fan of anime, I am currently watching Psychic. My favorite is Hunter X Hunter. I am also watching Monk, The Simpsons. I’m also into epic fantasies such as The Lord of the Rings and The Hobbit. My favorite movie is About Time. I am currently reading The Five Dysfunctions of a Team and Hard Things About Hard Things.

The biggest challenge the Egyptian tech industry is facing is finding talent. There’s a serious skills shortage in the country, and this is a major problem for the sector and for our company. We’re trying to level up our hiring process big time. We’ve improved our salaries’ to be more competitive, with more stock options and incentives, and we’re even trying to attract foreign talent.

Startups are dead by default not alive, so you have to do everything in your power to make it work, because statistically, startups fail by default. So if there’s someone a little out of budget for the company but will transform your business, you need to go out there and hire them.

Sometimes we lose the meaning in what we do and we need to remind ourselves of our goals. I wouldn’t want to be Steve Jobs if I don't have a good influence on others. There’s a great quote by Elon Musk that really resonates with me. “Do your dishes.”

CALENDAR

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

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.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

**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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

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