Thursday, 12 May 2022

AM — We just took another step towards sustainable development bonds

TL;DR

WHAT WE’RE TRACKING TODAY

It’s another heavy news day, wonderful people, with tons of investment news here at home and no sign that the macro clouds will soon part globally.

THE BIG STORY here at home: The (macro) weather outside may be frightful, but the investment news here at home is delightful as Total Energies and Ennara Capital became the latest players to say they’re going to build a large-scale green ammonia facility in the SCZone. Meanwhile, a German fiberboard maker is entering Egypt in a JV with EKH and logistics startup Mylers is planning expansion at home and abroad after raising a nearly USD 10 mn round.

WATCH THIS SPACE- The EGP unexpectedly strengthened against the greenback yesterday, jumping to EGP 18.42 / USD from EGP 18.53 on Tuesday, according to central bank data.

SIGN OF THE TIMES- The EU will no longer mandate facemasks on flights starting Monday, according to fresh official guidance, according to a statement out yesterday.


PASSING THE BATON at Orascom Development Holding: Yesterday was Naguib Samih Sawiris’ first day as chairman of SIX Swiss Exchange-listed Orascom Development Holding after his father, business icon Samih Sawiris, stepped down on Tuesday at the company’s annual general meeting in Altdorf (regulatory filing, pdf). Samih’s retirement was long-planned and had previously been communicated to shareholders.

Samih will continue to serve as an “unpaid consultant” to Naguib, the younger Sawiris joked in an email to the group’s more than 7k employees. Samih will be devoting his time to passions including education, healthcare, and marine preservation as Naguib pushes ahead with a strategy to “grow ODH into the category-defining destination development company.” You can read the full internal email here (pdf).

Any of us who have ever enjoyed a day in El Gouna — or anywhere else on the southern Red Sea coast — owes Samih a debt of gratitude. The purpose-built city, along with its emphasis on quality and building in harmony with the natural environment, transformed a barren piece of land served by one quiet road into a vibrant town. That town, in turn, catalyzed the transformation of the Red Sea coast into a world-class destination.

El Gouna has proven that you don’t need to reside in the capital to live, love and build a business in Egypt. Look no further than it having provided a safe haven to many in our community when covid-19 hit two years ago — plenty of us have simply chosen never to move back to Cairo.

Samih exported these ideas to Switzerland, the UAE, Oman, Morocco, the UK, and Montenegro, transforming his company into a multinational organization with deep Egyptian roots.

Samih is easy to admire even if Gouna isn’t your thing: The man built a company with more than 10 destinations, serving some 6 mn tourists, with some 10k homes, while staying true to his belief that “in life and business we can all win together — no one needs to lose for the other to win.” More of this, please.


WATCH THIS SPACE– Egypt plans the issuance of panda bonds in China, Finance Minister Mohamed Maait told Chinese Ambassador to Cairo Liao Liqiang, according to a ministry statement that did not provide a timeframe for the issuance.

The sale of CNY-denominated bonds in China, the world’s second-largest bond market, would contribute in “diversifying debt instruments, attracting new investors and lowering and diversifying funding sources for development investments,” he said. If the plan goes through, it would follow Egypt’s samurai bond debut in late March, which was taken to market despite the economic fallout from the Russian invasion of Ukraine.

WHAT’S HAPPENING TODAY-

Foreign Minister and COP27 President Sameh Shoukry is in Copenhagen today to co-chair a meeting of climate leaders to discuss progress meeting Paris climate targets. The two-day summit will be attended by UN climate change secretary Patricia Espinosa, while COP26 President Alok Sharma will chair the meeting alongside Shoukry.

We have our official COP logo: The Foreign Ministry yesterday unveiled the logo for the upcoming COP27 conference, which will take place in Sharm El Sheikh in November. Behold:

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MEANWHILE- The PSA world squash championships get underway tomorrow. The men’s and women’s finals will be played on 22 May. There is USD 550k at stake for each of the men’s and women’s championships, making this the biggest purse on record for a squash tourney. The CIB-sponsored championships will play out at SODIC’s Club S Allegria and at the National Museum of Egyptian Civilization.

NEXT WEEK-

Keep an eye out for Madbouly’s big presser at the start of next week: The promised press conference to announce new details of the state’s response to the economic turmoil fallout from Russia’s war in Ukraine will take place early next week, cabinet said in a statement yesterday following its weekly meeting. Cabinet is expected to reveal new details on how the government intends to attract more FDI and expand the private sector’s role in the economy. Catch all the details from yesterday’s meeting in our Cabinet Watch section, below.

A huge US “GreenTech business mission” is inbound next week. More than 40 US companies will be in Egypt during 15-17 May to kick the tires on green investment and potential business partnerships in sectors ranging from energy to healthcare, agriculture, aviation, construction and water resource management. The high-level delegation will meet with members of the business community and senior government officials, including Prime Minister Moustafa Madbouly and other members of cabinet. The mission is being organized by AmCham and the US Chamber of Commerce.

Saudi Crown Prince Mohamed bin Salman could be in town next week for talks with President Abdel Fattah El Sisi, Ala Mas’ouleety’s Ahmed Moussa said last night, without giving any details (watch, runtime: 3:01).

Saudi Arabia has been one of Egypt’s main backers amid the Ukrainian crisis, pledging some USD 15 bn to support Cairo in shoring up finances from the global fallout from the war. El Sisi and MbS have been in frequent contact since March, most recently speaking on the phone this week.

It’s interest rate week: The Central Bank of Egypt will meet to review interest rates on Thursday, 19 May. Our customary poll of analysts sees the central bank getting more aggressive with its tightening cycle, with five of seven respondents expecting rates to rise by as much as 200 bps on the back of rising inflation and emerging-market outflows.

THE BIG STORY ABROAD– US media are leading with the latest in the escalating political battle over abortion rights: Senate Republicans have blocked an attempt by Democrats to pass a federal law preserving the right to abortion as the conservative-dominated Supreme Court prepares to overturn the landmark Roe v Wade decision. (Bloomberg | NYT | Reuters | AP)

MARKET WATCH-

Fresh data suggests high US inflation is becoming more entrenched: US inflation fell to 8.3% in April, dropping for the first time since August 2021, according to the country’s latest consumer price index. Prices remained near 40-year highs in April and didn’t cool as much as expected, while core inflation rose above forecasts and prices in the services sector continued to accelerate. “This moves the balance of risks to more concern about inflation going forward,” one analyst told the Financial Times.

The markets certainly didn’t take many positives from the release: US equities continued to slide yesterday as investors fretted about whether the Federal Reserve could accelerate its tightening cycle in response to the figures. Tech once again bore the brunt of the sell-off, with the Nasdaq falling another 3.2% during the session. The S&P 500 lost 1.7%.

So much for that inflation hedge: Crypto assets continued to be hammered by the risk off, with BTC falling below USD 30k to its lowest level since December 2020. Shares in crypto exchange Coinbase dived more than 26%, leaving it down 85% since IPOing in April 2021. And TerraUSD, a stablecoin pegged to the USD, was in freefall yesterday after busting its peg and sending its linked cryptocurrency Luna down 98%.

Investors are throwing out junk bonds as market rout spreads: High-yield, high-risk bonds — known as “junk” — are the latest asset category to fall victim to the wider selloff in the markets, with US junk bonds now trading at their lowest prices since the start of the covid pandemic, the Wall Street Journal writes. Yields for the below investment-grade bonds have been climbing steadily since the Federal Reserve started gearing up for its tightening cycle, but this week’s selloff in equities has investors “spooked” and running for the exit amid talk of a brewing recession, portfolio managers said.

The equity sell-off is continuing in Asia this morning, with most exchanges in the red ahead of dispatch time. Futures indicate that European shares will follow them when markets open in a few hours, though on Wall Street shares are currently on course to rise in early trading.

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CABINET WATCH

Another step towards sustainable bonds

Cabinet backs sustainable development agenda: Ministers have approved a plan by the Finance Ministry to broaden its green financing framework to include sustainable development bonds, allowing the state to raise money for a wider array of social and environmental projects, cabinet said in a statement following its weekly meeting yesterday.

Wait, what exactly are sustainable development bonds? Think green bonds, but instead of financing energy efficiency and renewable energy initiatives, the money can be channeled into a wider range of projects that deliver socially-beneficial outcomes. Initiatives that help to reduce poverty, improve vital services like health and education, and promote gender equality are all examples of projects that can be funded via sustainable development bonds.

Another first for Egypt and the region: Egypt is considering issuing sustainable development bonds to finance the Decent Life initiative. This would be the first time the government has issued a bond of this type. Egypt sold the MENA region’s first-ever sovereign green bond in 2020.

DEBTOR’S PRISON

SME and consumer borrowers who fail to meet their repayments could face jail time and fines under amendments to the consumer finance and microfinance laws approved by ministers yesterday. Failing to meet the terms of a financing agreement or fraudulently obtaining finance will be met with fines as much as double the amount he borrowed, the statement said. The length of prison sentences was not disclosed.

The amendments also ban third parties from acting as mediators or paid sponsors between lenders, and SME and consumer borrowers without first registering with the Financial Regulatory Authority. Penalties for breaching the regulation include jail time and / or a fine of EGP 50-500k.

Agriculture land tax suspended for another year: Cabinet has extended the suspension of the 14% agricultural land tax (known informally as the “mud tax”) for another year. The tax was lifted in 2017 to support farmers and encourage them to increase production.

Also from the meeting:

  • A unit tasked with resolving issues facing investors will be established under the auspices of Madbouly, according to a separate statement;
  • The government is preparing to launch a climate strategy involving all of the green projects set to be announced in COP27;
  • Cabinet approved a USD 2.45 mn grant from the Kuwait Fund for Arab Economic Development to the International Cooperation Ministry to prepare feasibility studies for a rail connection between Egypt and Sudan;
  • Railway infrastructure: Cabinet approved a draft presidential decree on an agreement between the French Development Agency and the International Cooperation Ministry to implement upgrades to the Tanta-Mansoura-Damietta railway line;
  • The New Cairo “One Ninety” monorail stop will retain its name for 30 years under a EUR 5 mn agreement between the National Tunnels Authority and Landmark Developments.

ENERGY

Total Eren + Enara Capital to build green ammonia facility in SCZone

Another green ammonia project: Egypt inked a memorandum of understanding with an alliance that includes Total Eren and Africa-focused SME investor Enara Capital to build a green ammonia plant in the Suez Canal Economic Zone (SCZone), according to a cabinet statement. The facility will initially produce 300k tons of ammonia each year and this will increase to 1.5 mn at a later date, the statement said. Cabinet did not disclose the timeframe for the project or how much it will cost to build.

State institutions are on board: Total Eren and Enara signed the agreement with the Sovereign Fund of Egypt (SFE), the SCZone, the Egyptian Electricity Transmission Company (EETC), and the New and Renewable Energy Authority (NREA).

Green ammonia projects have been all the rage lately: In April, Egypt signed major agreements with international companies to produce green ammonia and hydrogen in the SCZone under government efforts to turn the area into a green energy hub. AlNowais’ AMEA Power is partnering with the SFE on an ammonia plant that will produce up to 390k tons a year, while Norwegian firm Scatec will build a 1 mn ton per year facility.

You can’t have green ammonia without green hydrogen: Green hydrogen is the crucial ingredient that puts the “green” in “green ammonia,” and large-scale investment in the energy source will be required if the spate of planned ammonia plants are going to be fed.

It’s a good thing, then, that a number of green hydro plants are also in the works: Several international consortiums have agreed to work on green hydrogen facilities in the SCZone. Emirati renewable energy company Masdar and Hassan Allam Utilities will build a plant that will produce 480k tons of hydrogen a year while Scatec, Nassef Sawiris-backed ammonia producer Fertiglobe and Orascom Construction are working on a separate project set to come online in 2024.

REFRESHER- Egypt is pushing a strategy to channel bns of USD of investment to create a local green energy industry amid a rising international interest in energy sources such as green hydrogen. Cairo’s plans have attracted major global players seeking investments in the sector in the country.

EDITOR’S NOTE- This story was updated on 12 May, 2022 to reflect that the MoU was signed between Enara Capital and Total Eren, not TotalEnergies. The spelling of Enara Capital was also corrected.

STARTUP WATCH

Logistics startup Mylerz plans Egypt + Africa expansion after raising USD 9.6 mn in funding

Cairo-based logistics startup Mylerz has raised USD 9.6 mn in equity funding from private equity outfit Lorax Capital Partners, the startup announced in a press release (pdf). E-payments giant Fawry participated in the round and will also provide payments services for the company.

About Mylerz: Founded in 2019 by Samer Gharaibeh, the firm offers same-day, last-mile delivery for e-commerce merchants. Mylerz currently operates 21 fulfillment centers across the country and plans to open its largest fulfillment hub yet in West Cairo by 4Q 2022. The startup delivered 2 mn packages within two years of its launch.

The funding will go towards helping the firm expand across Egypt and enter new North African markets, as well as to develop its platform, Gharaibeh, also the company’s CEO, told Enterprise. Gharaibeh remains the largest shareholder in his company following the funding round.

Mylerz plans to expand to Algeria, Tunisia and Moroccoin three months’ time,” Gharabeih said. The company is also eyeing Libya, Sudan, and East Africa’s growing e-commerce markets for potential expansion next year, he added. Fawry will provide payment services to Mylerz in all of its new markets.

This isn’t Fawry’s first partnership with Gharaibeh: The e-payments giant in February partnered with Gharaibeh, tech solutions firm Softec, and Confida Ventures Managing Partner Ammar Zawaideh to set up courier delivery platform Roaderz. The crowdsourcing platform connects couriers and small delivery firms with e-commerce merchants, while allowing sellers to request couriers on demand or schedule their services in advance.

M&A WATCH

German fiberboard maker enters Egypt through JV with Egypt Kuwait Holding

German fiberboard producer Homann Holzwerkstoffe is acquiring a 27% stake in Egypt Kuwait Holding (EKH)’s subsidiary Global MDF Industries, EKH announced in a statement (pdf) yesterday. The transaction is part of an agreement launching a new JV between Homann Holzwerkstoffe and EKH. A company representative we reached out to yesterday declined to disclose the value of the transaction.

How it will work: EKH will sell a 16.2% stake in Global MDF to the German firm when the agreement closes. The remaining 10.8% will change hands when production begins at Global MDF subsidiary Nile Wood’s factory in Sadat City (slated for 4Q 2022). The factory will produce up to 200k cubic meters of MDF, which will be sold to the local and overseas markets, EKH CEO Sherif El Zayat said in the statement.

Tree to table: The transaction gives Homann Holzwerkstoffe a stake in Global MDF’s two other fully-owned subsidiaries, which will supply the Nile Wood factory with raw materials. “The direct access to raw materials will be a key growth driver,” said Homann Holzwerkstaffe Managing Partner Fritz Homann.

ECONOMY

Remittances from Egyptians abroad to grow 8% in 2022, says World Bank

It’s not all dim on the macro front: Remittances from Egyptian expats are expected to grow at a faster pace in 2022, rising by 8% compared to 6.4% last year, according to the World Bank’s latest forecast (pdf). The lender says that flows will pick up due to an “altruistic response” by migrants to difficulties being faced at home and economic growth abroad, which although is expected to slow, should still be supportive of remittances.

Bucking the regional trend: The bank forecasts remittance flow growth into developing countries in the MENA region to slow to 6% from 7.6% last year amid an economic crunch from the war in Ukraine.

Egypt was one of the biggest recipients of remittances last year: Some USD 31.5 bn was sent to Egypt last year, making us the fifth-largest recipient in the world. The country “benefited from higher oil prices, remittance returns from expatriates in the Gulf, as well as healthy economic activity in Europe and the United States,” the World Bank said.

Remittances have become an increasingly important source of foreign currency for Egypt, particularly following the hit to tourist revenues caused by covid-19 and the subsequent blow to Russian and Ukrainian tourism. The value of remittances has picked up steadily since the pandemic, with inflows during the previous fiscal year reaching a record high last year.

All in all, remittances to low- and middle-income nations are set to grow by 4.2% to USD 630 bn this year, the World Bank said, following a growth of 8.6% last year when remittances hit USD 605 mn. Ukraine, the largest remittance recipient in Europe and Central Asia, will see inflows soar more than 20%.

COMMODITIES

Cimbria is building a silo complex in Port Said for imported wheat

Denmark’s Cimbria is building a wheat silo complex in Port Said for the General Company for Silos and Storage (GCSS), the company announced in a statement in March. The facility will have capacity to hold 100k tons of wheat — enough to cover more than 15% of Egypt’s current estimated storage shortfall. Construction began in February and is expected to be complete within two years. The complex will be co-funded by the OPEC Fund and the government.

Why is this needed? Our current storage capacity — with a total of 44 silos and other storage units, totaling a capacity of 5.4 mn tonnes — still leaves a gap of around 600k tonnes of the 6 mn tonnes the government plans to procure domestically this season. The system we currently have in place for storing grain involves toning down wheat imports around the harvest season to make space for increasing domestic supply. The government then restarts the import cycle once it dips into the local wheat reserves. Having a complex for imported wheat could allow us to import wheat year-round.

Cimbria is big in Egypt: The company says it has provided Egypt with 95% of its silo complexes. It received its biggest order in its history from Egypt last year when it was contracted to deliver 23 silos with a total capacity of almost 1.4 mn tons.

OTHER COMMODITIES NEWS- Egypt has turned away two Russian vessels allegedly carrying stolen Ukrainian wheat, Ruslan Nechai, Ukraine’s chargé d’affaires in Egypt, told the Wall Street Journal. The Ukrainian Ministry of Defense has accused Russia of hijacking cargoes of Ukrainian grain and shipping it to the Middle East.

KUDOS

KUDOS-

Karm Solar has been named as one of Africa’s 20 fastest-growing companies in the Financial Times’ inaugural Africa edition of its ‘fastest-growing’ lists. The solar energy player placed #19 in the ranking after more than tripling its revenues between 2017 and 2020, making it the second-fastest growing energy company on the continent. Also representing Egypt on the list are Alexandria Pharma (#40), Arab Contractors (#54), EFG Hermes (#55), MM Group (#71) and GB Auto (#72).

Our friends at EFG Hermes released a statement (pdf) following the publication of the list: CEO Karim Awad said the bank’s inclusion demonstrated its “agility” and “success in achieving business growth.” The survey period covers the years during which EFG Hermes completed its transformation from an Egyptian investment bank into a leading frontier emerging markets financial services powerhouse with operations around the globe and a thriving Egyptian NBFS arm.

Egypt isn’t well represented on the list, with only six firms making the grade. By comparison, 24 South African firms and 20 Nigerian companies are featured.

Take the list with a cup or two of salt: Plenty of Egyptian companies grew much faster than, say, #75, Morocco’s Hightech Payment, which posted a revenue CAGR of just 8% in the survey period. Take Fawry: The Egyptian payments giant posted a revenue CAGR in the same period of nearly 42%, which would have placed it in the top 25 (presuming there were no other changes to the list). Hell, little old Enterprise would (on the basis of our consolidated financials) handily make the list as it stands.

So why are so few Egyptian companies represented here? Because more South African and Nigerian companies applied. The FT’s partner reached out by “post and email” to companies to ask them to participate by registering on a website. Those companies make up the majority of the list. The FT has chosen to include only 27 “high profile” publicly traded companies that didn’t apply, but that met its screening criteria.

MEANWHILE- More Egyptian success in Malmo: From Cairo won the documentary film jury prize award at the Swedish Malmo Arab Film Festival. Actor Mohamed Mamdouh won best actor at the festival earlier this week for his role in the film Abu Saddam.

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LAST NIGHT’S TALK SHOWS

Leading airwaves on the airwaves last night: The shooting of Al Jazeera correspondent Shireen Abu Akleh, apparently by Israeli forces, as they raided a refugee camp in the West Bank city of Jenin dominated airwaves, with wide condemnation and outrage getting coverage from most talk shows at home, including Yahduth Fi Masr (watch, runtime: 4:37), Masaa DMC (watch, runtime: 2:11), Ala’ Mas’ouleety (watch, runtime: 1:13), Al Hayah Al Youm (watch, runtime: 3:09) and others.

The latest deadly attack in Sinai which killed five troops earlier yesterday also led airwaves at home, with Masaa DMC (watch, runtime: 0:30) and Ala Mas’ouleety (watch, runtime: 3:25) covering the fatal attack.

Otherwise, it was a policy-heavy evening:

ACT SMART- Economist and former deputy prime minister Ziad Bahaa El Din is calling on the government to hold an economic dialogue, alongside the planned national dialogue, as he stressed to Ala Mas’ouleety Ahmed Moussa (watch, runtime: 50:38) the importance of the government holding a conversation with the business community to remove constraints.

Qalaa Holdings Chairman Ahmed Heikal shared his policy prescriptions for getting us out of the economic crisis on Yahduth Fi Misr. “There is no simple fix for this crisis,” he told show host Sherif Amer last night (watch, runtime: 4:23). We have a problem, being a big importer of oil with 100 mn oil barrels annually and a net food importer, with our basket including wheat and production inputs.

What’s the solution? Slashing imports, boosting our exports, and finding a local alternative to imported production inputs is key to help Egypt during the crisis, Heikal noted (watch, runtime: 3:45). Egypt should use untapped assets, which include tens of shuttered factories, production lines and others, he said. Higher revenues for the Suez Canal, a reviving tourism and higher remittances from Egyptians abroad would also ease the pressure on the FX, he said.

Everyone is going to feel the pain: No-one will escape the impact of the current wave of global inflation, Heikal said, predicting that the crisis will create a new global map of economic relations in the coming years.

Let’s delay any austerity policy for four months at the very least, Bahaa El Din said “until conditions are straightened out” and efforts in investments, exports and production bear fruit. “This is not the period where we worry about the debt-to-GDP ratio and lowering it to 75% like [what was] addressed to the parliament. There are other priorities, mainly ensuring that there are no shortages of basic needs,” he said. Bahaa El Din has been a regular guest on talk shows this week, speaking on the global economic crisis and what Egypt could do to cushion the blow.

EGYPT IN THE NEWS

Leading the conversation on Egypt in the international press this morning: Five soldiers were killed and two injured after militants attacked a military checkpoint in Sinai, less than a week after a deadly attack east of the Suez Canal took the lives of 11 troops. Seven militants were killed in the encounter, the Armed Forces said in a statement. AFP, Reuters, the Associated Press and the National all covered the news.

Also making headlines:

  • Ikhwani mouthpieces in Turkey are facing pressure to zip it as Turkey tries to mend relations with Egypt. (Financial Times)
  • Egypt has threatened to drop its role as a mediator with Hamas if Israel assassinates its leader, Yahya Sinwar, warning that such a move will cause a new war to erupt. (Haaretz)
  • Egypt’s national dialogue will involve the “largest possible number” of representatives in a bid to boost inclusivity and “define the priorities of the new republic,” the National Training Academy and the dialogue’s organizers have said. (The National)
  • Al Ahly and the Egyptian Football Association are protesting the CAF’s decision to host the CAF Champions League final in Morocco, where Moroccan team Wydad could play if it wins its game on Friday, arguing that the final should be hosted in a neutral venue. (Arab News)

ALSO ON OUR RADAR

Dana oil output falls + Uh, which Gourmet was that, again?

Did we just say no to Brazil’s request for fertilizer? A meeting between Egyptian and Brazilian officials resulted in an agreement covering “agricultural research, livestock, capacity-building and trade exchange,” the Agriculture Ministry said in a statement. The chief aim of the Brazilian delegation was to seal an agreement for more Egyptian fertilizer but the statement makes no mention of the discussions.

Our friends at Etisalat Misr will provide the tech infrastructure for El Sewedy Industries’ U Venues mixed-use development in New Cairo. (Hapi Journal)

Wait, which Gourmet are you talking about? Retailer Carrefour has inaugurated its first Carrefour Gourmet store in Egypt in Downtown Katameya. The hyperchain’s name is eerily similar to that of Gourmet Egypt, the local chain that created and now leads the high-end grocery market. (Statement, pdf)

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

  • Dana Gas’ oil production in Egypt fell 7% to 27k barrels in 1Q 2022 due to natural field depletion. Dana collected AED 62 mn (USD 17 mn) in receivables from Egypt during the quarter, which the company called a “significant improvement.” (Earnings release, pdf)
  • Lafarge Egypt has signed a long-term contract worth USD 93 mn with AP Moller Capital’s Lumika Renewables Egypt to supply solar energy to its factory. The agreement will come into effect in 1Q 2024. (Statement, pdf)

PLANET FINANCE

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EFG Hermes - https://efghermes.com/

Saudi Aramco has dethroned Apple as the world’s most valuable company, as surging oil prices push its shares to near-record highs while the world’s most valuable tech company suffers at the hands of the ongoing US stock market rout, Bloomberg reported. The oil giant traded at its highest level on record yesterday with a market cap of USD 2.43 tn, surpassing that of Apple for the first time since 2020. Apple ended the day with a market cap of USD 2.37tn after its shares fell 5.2% amid a heavy sell-off in US tech stocks, while Aramco’s shares closed nearly 1% down by the end of trading.

Also worth noting this morning:

  • The risk of social unrest in Africa is rising as countries in the world struggle with soaring food prices: Two reports out yesterday — courtesy of Oxford Economics Africa and risk consultancy Verisk Maplecroft — flagged a risk of rising social unrest in the coming months as record food prices cause economic hardship.
  • Philip Morris will acquire rival Swedish Match for USD 16 bn, as part of Marlboro-maker’s push into smoke-free tobacco alternatives. Swedish Match is a market leader in Scandinavian tobacco product snus and oral nicotine pouches. (Financial Times)
  • Supply snags are hitting the diamond market hard, leading to costlier bling as the industry struggles to source stones after the US imposed an import ban on diamonds from Russia’s Alrosa, which produces a third of the world’s gems. (Bloomberg)

Up

EGX30

10,856

+0.4% (YTD: -9.2%)

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USD (CBE)

Buy 18.33

Sell 18.42

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USD at CIB

Buy 18.35

Sell 18.42

None

Interest rates CBE

9.25% deposit

10.25% lending

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13,379

-1.0% (YTD: +18.6%)

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9,795

-1.2% (YTD: +15.4%)

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DFM

3,528

-1.9% (YTD: +10.4%)

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3,935

-1.7% (YTD: -17.4%)

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FTSE 100

7,348

+1.4% (YTD: -0.5%)

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3,648

+2.6% (YTD: -15.1%)

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Brent crude

USD 107.39

+4.8%

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USD 7.64

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USD 1,853.70

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USD 28,813

-5.5% (YTD: -38.5%)

THE CLOSING BELL-

The EGX30 rose 0.4% at yesterday’s close on turnover of EGP 855 mn (2% below the 90-day average). Foreign investors were net sellers. The index is down 9.2% YTD.

In the green: MM Group (+7.0%), Abu Qir Fertilizers (+6.3%) and Mopco (+4.8%).

In the red: TMG Holding (-2.5%), Eastern Company (-1.8%) and Madinet Nasr Housing (-1.7%).

DIPLOMACY

Food and fuel support amid Ukraine war top agenda at El Sisi’s meeting with White House natsec chief: President Abdel Fattah El Sisi met with US national security adviser Jake Sullivan in Cairo yesterday, according to an Ittihadiya statement. The pair discussed the global effects of Russia’s war in Ukraine and “Washington’s support for Egypt’s security, food, and fuel needs,” according to a White House statement. The two also discussed regional issues including the latest Palestinian-Israeli developments and the Grand Ethiopian Renaissance Dam, as well as cooperation to fight terrorism, Ittihadiya said. They also spoke about “the importance of tangible and lasting human rights progress in Egypt,” according to the US statement.

Suez Canal Authority (SCA) head Osama Rabie signed an agreement to boost cooperation with International Chamber of Shipping (ICS) Chairman Esben Poulsson during Poulsson’s first official visit to the Suez Canal, according to an official statement. The agreement will see the two organizations hold an annual meeting to exchange experiences.

MY MORNING ROUTINE

Mohamed Khattab, chief transformation officer, B.TECH: 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 B.TECH Chief Transformation Officer Mohamed Khattab (LinkedIn). B.TECH landed investment in 2016 from the UK’s DPI and bills itself as Egypt’s largest retailer and distributor of home appliances and consumer electronics.

My name is Mohamed Khattab, and I’m B.TECH’s chief transformation officer. When I first started my tenure at B.TECH, my mandate was to build B.TECH’s e-commerce business — the first omnichannel retail offering in Egypt. We started off as a three-person team in the e-commerce department, now our team is 250 people strong, contributing more than 20% of B.TECH’s top-line.

For the past two years, I’ve been focusing on the transformation of the company. Part of my job is growing e-commerce even further through differentiated business models and through launching new e-commerce models. As CTO, I am also focused on the transformation of the company from a traditional retailer with an online presence to a tech platform with a physical presence, putting tech at the core of the company and the way we work.

My daily routine is extremely important to me: I’m the father of a three-year-old girl and one-year-old boy, so I haven’t had to set an alarm for the past three years [laughs]. My kids typically wake me up at 05:30 am for our usual hour of morning playtime. After playtime is over, I enjoy a cup of coffee, have breakfast, and get ready to head to the office. I typically get to the office by 8 or 8:30am. I us my commute to and from work to tune in to the All-In podcast.

The first thing I do when I get to work is read Enterprise. After I catch up on the news, I usually check my email for 15 to 30 minutes. Afterward, my daily “meetings marathon” starts from 9:30am till the day’s end. Given my scope of work, my daily meetings are very diverse. The meetings, on any given day, get into different fields including e-commerce, consumer finance, tech development, and retail transformation. The diversity is exciting but also very tiring [laughs].

I try to maintain a healthy work-life balance. I’m a big believer in the importance of mindfulness. When I’m at work, I’m 100% there, and when I’m home, I equally dedicate my attention to my family. This helps me maintain a healthy balance.

To relax and switch off from work I enjoy exploring new restaurants. I’m a foodie, and I love discovering new cuisines. The food scene in Egypt evolved dramatically in recent years. I have a lot of restaurants on my list that I haven’t checked out yet and look forward to trying them all out soon [laughs].

To stay focused, I like to play sports. Whether it’s tennis, volleyball, soccer, or just hitting the gym, physical activity definitely helps energize me for the next day of work.

The three things that I have to do every day are spending time with my kids, drinking lots of coffee, and interviewing potential candidates. Because we are constantly scaling and building new teams, I typically spend a third of my week interviewing people. I believe a manager’s most valuable asset is the team they hire. The quality of the team is directly proportionate to the quality of the business. That’s why I dedicate so much of my time to the recruitment side of the job.

I think the future of B.TECH is extremely exciting. On a professional level, my goal is to transform the organization, which has proven itself over the years, into a much larger and much more advanced company. On a personal level, I’m planning on getting into professional fishing. I’m an avid diver and like to travel every now and then to the Red Sea to escape the hustle and bustle of Cairo.

The last great thing I watched is WeCrashed. The show takes you through the rise and fall of WeWork, a startup that was once considered the world’s most valuable unicorn. The series brilliantly delves into the process of building a startup. WeCrashed also sheds light on how founders can mistakenly prioritize boosting the valuation of their startups at all costs, instead of focusing on building a sustainable business. I highly recommend WeCrashed to entrepreneurs who are thinking about starting a company of their own.

📆 CALENDAR

OUR CALENDAR NOW APPEARS in two sections:

  • Events with specific dates or months are right here up top
  • Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

MAY

10-12 May (Tuesday-Thursday): EBRD Annual Meeting and Business Forum, Marrakesh, Morocco.

12 May (Thursday): Financing sustainable development in Egypt virtual roundtable, Official Monetary and Financial Institutions Forum.

12-13 May (Thursday-Friday): Egypt and UK will organize the May Ministerial Meeting in Denmark to discuss climate ahead of COP27.

13-14 May (Friday-Saturday): Target Misr Expo, Dusit, New Cairo.

13-22 May (Friday-Sunday): PSA World Championships, Cairo.

Mid-May: The trial period to extend the Advance Cargo Information (ACI) system to air freight.

19 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

19 May (Thursday): EFG Hermes’ general shareholders’ meeting to discuss, among several things, a capital increase of EGP 973 mn to finance the distribution of bonus shares to the company’s minority shareholders.

23 May (Monday): Lynx Strategic Business Advisors are hosting a webinar titled “Introducing Egypt’s New E-Receipt System.”

25 May (Wednesday): The deadline for private companies to pre-register ahead of bidding for the second phase of the PPP national project to establish and operate 1k language schools.

30-31 May (Monday-Tuesday): Egypt Can with Industry, Cairo, Egypt.

31 May (Tuesday): Last day for EGX-listed companies to file 1Q2022 earnings

31 May (Tuesday): The application deadline for ITIDA’s annual Export IT program.

31 May (Tuesday): Extended deadline for EGX-listed companies to disclose 1Q 2021 earnings.

May: Investment in Logistics Conference, Cairo, Egypt.

May: General Authority for Land and Dry Ports to issue the conditions booklet for the tender to establish and operate the Tenth of Ramadan dry port.

JUNE

5-7 June (Sunday-Tuesday): Africa Health ExCon, Al Manara International Conference Center, Egypt International Exhibitions Center, and the St. Regis Almasa Hotel, New Administrative Capital.

5 June (Sunday): GB Auto is hosting an extraordinary general assembly meeting (pdf).

9 June (Thursday): European Central Bank monetary policy meeting.

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

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

21-22 June (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

27 June-3 July (Monday-Sunday): World University Squash Championships, New Giza.

30 June (Thursday): June 30 Revolution Day, national holiday.

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

June: Egypt will launch a unified ticketing system for all means of transport at the Adly Mansour Interchange Station.

June: Polish President Andrzej Duda will visit Egypt to coordinate ways to ship Ukrainian wheat to Egypt amid the war in Ukraine.

JULY

July: A law governing ins. for seasonal contractors will come into effect.

July: Fuel pricing committee meets to decide quarterly fuel prices.

1 July (Friday): FY 2022-2023 begins.

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.

AUGUST

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

SEPTEMBER

September: Egypt will display its first naval exhibition with the title Naval Power.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

OCTOBER

October: World Bank and IMF annual meetings in Washington, DC

October: Fuel pricing committee meets to decide quarterly fuel prices.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

18-20 October(Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

27 October (Thursday): European Central Bank monetary policy meeting.

Late October – 14 November: 3Q2022 earnings season.

NOVEMBER

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

4-6 November: The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

7-18 November (Monday-Friday): Egypt will host COP 27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.

DECEMBER

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

JANUARY 2023

January EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

EVENTS WITH NO SET DATE

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

14 March-30 June: The “Escape to Egypt” exhibition at the Coptic Museum, in celebration of its 112th anniversary.

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

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

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

**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 above 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. © 2022 Enterprise Ventures LLC.

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