AM — Grand Egyptian Museum could open its doors in 2H2022

Good morning, wonderful people, and welcome to what’s shaping up to be a very busy news week. Let’s jump right in:

The Central Bank of Egypt will allow banks to launch digital lending services via mobile wallets this year, the bank announced in its financial stability report (pdf). The regulations on the decision, which will allow loans to be approved immediately with reliance in part on an online credit rating, were issued in April last year. The rules are part of the CBE’s drive to improve financial inclusion.

PSA #1- It’s going to be another cold week: Temperatures will remain low across the country and there could be moderate rainfall today and tomorrow from Cairo through the Delta and along the North Coast. Expect winds to be elevated all week. In the capital, look for daytime highs of 15-17°C and overnight lows of 8-9° this week.

PSA #2- First, every Egyptian guy of a certain age had to say he was reading Yuval Harari’s Sapiens. Then it was investor Ray Dalio’s Principles. Is Dalio’s follow-on book, Principles for Dealing with the Changing World Order, up next? It’s flooding our social media.

ALSO- The Financial Times would like you to understand how the world got hooked on Wordle. If you haven’t yet played the fun / frustrating once-per-day word game, try it out here.

There are plenty of BIG STORIES ABROAD that you need to know about on this chilly midwinter morning. Among them:

US-Russia tensions over Ukraine spiral after high-stakes talks collapse: Officials from all sides of the battle for Ukraine’s future are openly warning of conflict in Europe after last week’s talks failed to overcome differences between the US and Russia. Moscow declined to pull back its troops deployed on the Ukrainian border, while Washington and Europe have refused to discuss ending Nato expansion, a red line for Russian president Vladimir Putin. The AP and Reuters have more.

Rhetoric is hardening and tensions are rising on the ground: The White House over the weekend accused Moscow of planning a false-flag attack in Ukraine, a day after Kiev was hit by a cyberattack.

The US is preparing for the worst and is drawing up contingency plans with several energy companies over supplying gas to Europe in the event that conflict hits Russian supplies to the continent, Reuters reports. European gas prices jumped on Friday after the breakdown in talks, with the benchmark European gas contract climbing almost 25% to reach EUR 90 per megawatt hour.

Also worth noting this morning:

• El Sisi calls for dialogue in Sudan: President Abdel Fattah El Sisi has urged dialogue in Sudan to end the political deadlock as demonstrators continue to protest against the military coup that overthrew the civilian leaders in October, the Associated Press reports.
• COP26 president Alok Sharma has pledged to give the UK’s “full support” to Egypt during talks with Foreign Minister Sameh Shoukry, as the country gears up to host the COP27 climate conference in November. (Joint Statement)
• GSK rejects Unilever’s USD 50 mn offer for Pfizer JV: GlaxoSmithKline has turned down Unilever’s USD 50 mn bid for GSK’s consumer healthcare JV with Pfizer, calling the offer “fundamentally undervalued.” (Financial Times | Bloomberg)

When does covid stop being a pandemic and start being endemic? This is the debate currently playing out among scientists across the world and in the global media. Last week Team Endemic was all over the front pages, arguing that the omicron variant represents the end-game for covid as a deadly virus and the beginning of its transition into a more benign illness easily fought off by a more immune population.

This morning we’re seeing the counterpoint, with the Associated Press and newspapers including the Washington Post relaying the thoughts of some epidemiologists who warn that the virus could continue to evolve into more transmissible, more harmful variants. “People have wondered whether the virus will evolve to mildness. But there’s no particular reason for it to do so,” one disease expert told the AP. “I don’t think we can be confident that the virus will become less lethal over time.”

^^ Expect to see this debate pick up steam in the weeks and months ahead as health authorities deliberate policy responses to the virus, post-omicron.

WHAT’S HAPPENING TODAY-

The Senate is holding plenary sessions today and tomorrow to finish discussing a bill that would create a new Labor Act, to which it gave a preliminary thumbs up earlier this month, Al Borsa reports. The Senate will then pass the legislation back to the House of Representatives for final approval. If passed, the bill would dictate how employees can be dismissed, making it harder for employers to fire staff for illnesses but allowing workers to lose their jobs if convicted of a felony. The bill would also set a minimum annual raise requirement equal to 3% of the amount covered by social ins, according to local media. It is unclear to us where the dividing line is between the private and public sectors as regards the amendments.

SODIC shareholders will vote on the company’s new board of directors at an extraordinary general meeting today. The formation of the new board comes after an Emirati consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ in December acquired 85.5% of SODIC in an EGP 6.1 bn all-cash transaction.

PSA #3- Today is the last chance for property and land owners to make good on overdue real estate dues without facing late fees, so long as they pay the full overdue amount, Housing Minister Assem El Gazzar said in a statement.

MARKET WATCH-

Wall Street earnings season kicks off: Did banks peak in 2021? Bulge bracket stalwart JPMorgan Chase reported record net income for the year on a larger number of transactions, according to its earnings release (pdf) — but warnings from the bank’s CFO of a rocky few years ahead sent its shares down by over 5% on Friday, the Financial Times reported. Citigroup’s net income doubled (pdf) from the year before, but weak fourth-quarter earnings also saw the bank’s shares slide more than 1% on the announcement, according to CNBC.

What’s next: On the banking front, Goldman Sachs reports on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday. Tech firms will start reporting by midweek, with Intel up on Wednesday and Netflix publishing its results on Thursday. We’ll get our first glimpse of how the US airline industry weathered omicron disruption when United Airlines reports on Wednesday.

AFCON 2021: Mohamed Salah was the difference in the Pharaoh’s match last night with Guinea-Bissau, with Egypt closing out the engagement 1-0 to claim a vital victory that keeps our hope of qualification alive. Salah volleyed the Pharaohs into the lead in the 68th minute, latching onto a chipped cross to bag his first goal in six appearances for the national team.

Elsewhere in the group: After beating Egypt in the opening game of the tournament, Nigeria sealed qualification to the next round after seeing off Sudan 3-1, leaving our southern neighbor bottom of the group.

The pathway out of the group: The top two teams in each group are automatically sent through to the knockout stage of the competition, meaning that Egypt need to beat Sudan when they meet on Wednesday in order to guarantee a place in the next round. Should Guinea-Bissau beat Nigeria and Egypt draw or lose to Sudan, the Pharaohs still have a possibility of going through, courtesy of rules that see the four highest-ranked third-placed teams progress.

CIRCLE YOUR CALENDAR-

The World Art Forum is ongoing at Cairo’s National Museum of Egyptian Civilization until Wednesday, 19 January. The inaugural edition of the forum, which kicked off yesterday, will see artists from around the world participating.

National flag carrier EgyptAir will operate a flight from Casablanca to Cairo this Wednesday, 19 January, to bring home Egyptian expats stranded in Morocco following border closures.

South Korean President Moon Jae-in is due in town from 20-21 January on an official visit, during which he will meet President Abdel Fattah El Sisi.

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

*** It’s What’s Next day: We have our weekly deep-dive into what makes and shapes pre-listed companies and startups in Egypt, the UAE and KSA, touching on investment trends, future sector insights and growth journeys.

In today’s issue: After looking at the trends that drove the conversation in Planet Startup last year (here and here), we’re looking at What’s Next for up-and-coming businesses this year. In a nutshell, it’s more of the same: More funding, more international players, more exits, more M&A, and more fintech.

The Grand Egyptian Museum (GEM) could open its doors to the public in 2H2022, Tourism Minister Khaled El Anany told ABC News on the sidelines of the World Youth Forum last week. The opening of the state-of-the art museum is contingent on the stability of “coronavirus-related conditions,” the minister said

The GEM is near completion and will be ready by mid-year, “but we want to make sure that our guests can arrive in large numbers,” El Anany said, adding that the aim is to invite heads of state from around the world to the museum’s inauguration. As a globally significant attraction, the museum is widely expected to help tourism rebound post-pandemic.

Happy discovery day, King Tut: Opening the GEM would be the best way to celebrate the centennial of the discovery of King Tutankhamun’s tomb, El Anany said. The museum will hold more than 100k artifacts, among them the c. 5k treasures belonging to the boy king that will be displayed in full for the first time. His world-famous tomb was discovered in November 1922 by British archeologist Howard Carter.

The GEM’s grand opening was delayed by the pandemic: President Abdel Fattah El Sisi postponed the inauguration of the GEM, initially set for June 2020, at the pandemic’s outset. Toward the end of 2020, El-Enany said that the opening could happen in 2H2021 if covid conditions allowed. Construction has been at least 98% complete since early last year.

The GEM is set to be the largest museum in the world dedicated to a single civilization. Part of the Giza Vision 2030, the museum is the centerpiece of the EGP 30 bn development of the Giza plateau area, accounting for around two-thirds of the project’s costs. Check out our two-part series on the Giza Plateau revamp here and here.

EXCLUSIVE- Orcas raises USD 2.1 mn pre-series A round: Egyptian edtech startup Orcas raised USD 2.1 mn in a pre-series A round co-led by our friends at CIRA’s NFX Ventures, and Access Bridge Ventures, according to a statement (pdf). Algebra Ventures, Launch Africa Ventures, Cairo Angels Syndicate Fund (CASF), and Seedstars International also participated.

Next steps: Orcas aims to use the funding to develop its technology, hire new talent and expand into new markets in MENAP. Its tech needs to be customizable but also scalable to smoothly operate in different markets, co-founder and CEO Hossam Taher tells us. Operations started in Pakistan’s Lahore in early 2022 and Orcas is planning to expand into the KSA next, he adds. “We’re looking to expand in markets that have a large young population and high out-of-pocket tutoring expenses.”

What does Orcas do? Founded in 2019, the platform offers online and in-person tutoring and courses for K-12 students as well as personalized learning plans, learning-style assessments, and practice assignments.

This marks CASF’s first investment after launching last month as a micro-VC fund to fill the “missing middle” between post-seed and pre-series A investments.

Orcas and CIRA are becoming firm friends: The two firms teamed up last year on a JV to co-develop an online social learning platform for after-hours support to students. The hybrid platform, which makes use of Orcas’ online tools as well as CIRA’s 21-strong school network, is now available in governorates including Cairo, Assiut and Suez.

Edtech startups raised eight investment rounds in 2021, up three from the year before, putting edtech among the most popular sectors for investment. Read our What’s Next story recapping investment in Egypt’s startup scene last year.

IN OTHER STARTUP NEWS-

• El Sisi wants the WYF to set up an incubator: President Abdel Fattah El Sisi has directed the World Youth Forum’s management to establish a global incubator for startups and SMEs, involving private sector firms, international lenders and development organizations.
• Foodtech startup 3attar raised an undisclosed seed round from AUC Angels, UI Investment and individual angel investors, according to a statement picked up by Wamda. The B2C health foods platform aims to expand its customer base and develop its tech with the funding.

Apicorp and IsDB launch USD 1 bn Infra Initiative: Arab Petroleum Investments Corporation (Apicorp) and the Islamic Development Bank (IsDB) have launched a three-year, USD 1 bn initiative for private-sector focused infrastructure financing in countries including Egypt, according to a statement.

Who’s in line for funding? The Infra Initiative will finance renewable projects in electricity generation and transmission, water, and waste management in APICORP’s ten member countries, all of whom are also IsDB members: Egypt, Kuwait, Libya, Saudi Arabia, Qatar, Algeria, Iraq, Bahrain, Syria and the UAE. Projects with private-sector involvement will be at the top of the priority list. Projects elsewhere within the 57 Organization of Islamic Cooperation countries will also be considered, if they are sponsored by a company headquartered in one of these ten countries.

The initiative aims to drive PPPs in energy projects. Infra is designed “to address low private sector participation in funding energy projects by incentivizing public-private partnerships (PPPs),” the statement reads. The initiative also hopes to mobilize financing for PPP projects from commercial and multilateral banks, development agencies and capital markets.

Background: Egypt holds a 3% stake in APICORP, which is a multilateral development institution targeting the development of renewable energy in oil-exporting nations, and a USD 3.6 bn capital subscription in IsDB, equivalent to nearly 7.1% of the bank’s total capital.

Egyptian prosthetics company Orthomedics will not sell a 20% stake to Ottobock after ending talks with the German firm, Al Borsa cited Orthomedics Chairman Khaled El Deeb as saying, without disclosing further information. Negotiations between the two firms had been ongoing since early 2020.

IPO still in the cards: El Deeb reiterated the company’s intention to go public on the EGX, first announced back in 2020. He said at the time that the firm could sell a 49% stake in an IPO.

Egypt’s official daily covid tally is back in four figures: The Health Ministry reported 1,101 new covid-19 infections yesterday, up from 1,079 the day before. Egypt has now disclosed a total of 398,879 confirmed cases of covid-19. The ministry also reported 26 new deaths, bringing the country’s total death toll to 22,123.

Egypt received 1 mn AstraZeneca jabs as a gift from Argentina on Thursday, a gesture to celebrate the countries’ 75th anniversary of diplomatic relations, according to a statement (pdf) from the Argentinian embassy. Our friend Eduardo Varela, Argentina’s ambassador to Egypt, met several local officials at Cairo International Airport as the vaccines arrived.

Omicron was the likely cause of an 89% spike in covid cases during the first week of January across the Eastern Mediterranean, the WHO’s Regional Director for the Eastern Mediterranean, Ahmed Al Mandhari, said at a media briefing. Al Mandhari noted that the rise in cases coincided with a 13% drop in deaths in the region, but added that while the omicron variant appears to cause less severe disease than its predecessor delta, “this certainly does not mean it should be underestimated.”

EGX-listed Taaleem saw a 23.7% y-o-y increase in its bottom line in 1Q2021-2022 to EGP 71.9 mn, the company said in an earnings release (pdf). Revenues also rose 27.3% y-o-y to EGP 171.7 mn for the September-November 2021 period, the company said. The strong performance came on the back of higher operating revenues as operational conditions continue to normalize post-pandemic, which outstripped growth in operating costs and expenses by 20.4 percentage points.

Enrolment at Nahda University in Beni Suef was down 48% y-o-y, with 916 new students admitted during 1Q2021-22. The decrease followed a decline in the pool of eligible applicants after the Thanaweya Amma examination system was updated, the company said. That said, average tuition revenue per student was up 30.5% y-o-y at EGP 27k. Progress continues on the company’s second higher education institution, Badya University in West Cairo.

The higher ed outfit expects the growth to continue going forward: Taaleem built “a strong platform for further growth during the rest of the year” in the first quarter, said Managing Director Mohamed El Rashidi. The company will continue to focus on growth and cost-level efficiencies to yield strong profitability, he added.

GERD returned to the nation’s talk shows last night after the Ethiopian government announced plans to clear 17k hectares of forest in preparation for the third filling of the dam this summer. The process will take two months to complete and the government wants to start the work in February. Addis Ababa began unilaterally filling the dam’s reservoir in 2020 without an agreement with Egypt and Sudan over how to allocate the Nile’s water between the three countries, inflaming tensions with Cairo. Negotiations have been on ice since last summer, when Ethiopia completed the second filling of the dam and Egypt failed to get the backing of the international community to intervene in the dispute. El Hekaya’s Amr Adib covered the story (watch, runtime: 3:55).

The death of veteran journalist Wael Elebrashy is being investigated by the public prosecutor after his wife accused doctors of negligence that caused his death. Elebrashy died last week due complications resulting from covid-19. The Doctors’ Syndicate is also conducting an investigation into the physicians who treated him and the medication he was told to take, syndicate member Ibrahim El Zayat said on Ala Mas’ouleety last night (watch, runtime: 3:22). The story was also given attention by Al Hayah Al Youm, (watch, runtime: 2:06), El Hekaya (watch, runtime: 11:11), and Ala Mas’ouleety (watch, runtime: 9:40).

Also on the airwaves last night:

• Egypt has entered the fifth wave of covid-19, the former dean of the Heart Institute said on Ala Mas’ouleety (watch, runtime: 5:07)
• IMF executive director Mahmoud Mohieldin has called on the government to increase public investment by at least 20% to support the economy in an interview with Extra News (watch, runtime: 4:38). Mohieldin said that private investment needs to triple to make up for the declines seen in recent years.
• The conclusion of the World Youth Forum got airtime on Al Hayah Al Youm (watch, runtime: 22:15) and El Hekaya (watch, runtime: 1:02).

It’s a mixed bag in the pages of the foreign press this morning: The trafficking and assault allegations against former CBC owner Mohamed El Amin are getting ink in the Guardian after a local court extended his pre-trial detention for a further 15 days. Meanwhile, the Financial Times reports that thousands of mausoleums in Cairo’s historic City of the Dead could be destroyed to make way for a new road, as the government continues with its huge infrastructure drive to ease traffic congestion in the nation’s capital. Lastly, Canada’s CBC reports that Canadian-Egyptian citizen Joseph Attar has returned to Canada after 15 years of imprisonment in Egypt. Attar was arrested in Cairo in 2007 on spying charges.