Thursday, 22 September 2022

AM — Central Bank of Egypt to decide on interest rates following huge Fed rate hike

TL;DR

WHAT WE’RE TRACKING TODAY

The question on everyone’s lips this morning: Will the Central Bank of Egypt go through with its third rate hike of 2022? Seven of eight analysts and economists we’ve talked to expect the Monetary Policy Committee to raise rates during its meeting today as inflation rises and the EGP continues to weaken.

Yesterday’s rate-hike by the Federal Reserve (more on that below) puts Egypt under “mounting pressure,” Hany Geneina, a long-time market watcher who is now an adjunct professor of business administration at AUC, told Bloomberg Asharq yesterday (watch, runtime: 6:34). Tighter US monetary policy makes it more difficult for Egypt to attract foreign investors back to the country and could compel us to raise interest rates by 2-3 percentage points by 1Q 2023.

EGP WATCH- The EGP eased further against the greenback to hit EGP 19.54 yesterday from 19.49 a day earlier. The currency has now fallen almost 24% against the USD since the devaluation in March and is closing in on the record low of 19.56 set in December 2016, when it overshot against the greenback following that fall’s sharp devaluation. The currency has fallen 1.8% since Hassan Abdalla was appointed to head up the central bank on 18 August.

Expect the EGP to fall against the greenback further amid “external and internal pressure,” Geneina said, estimating a plunge of 10% to 15% to reach EGP 22-23 per USD 1. “This is a difficult phase for Egypt and is close to 2016’s [deval conditions],” he said.

It’s not all a gloomy outlook: A diversification of FX sources through the sought IMF loan, a powerful recovery in the tourism sector and the government’s sale of stakes in major companies would help overcome the crisis, he said.

Africa’s biggest economies jump on the tightening train: The central banks of Nigeria and South Africa are also likely to tighten monetary policy this week to ease spiraling prices, Bloomberg reports. The South African Reserve Bank holds its policy meeting later today and Nigeria’s central bank is up tomorrow.

PSA- Clock ticking for ClimaTech Run: Tech entrepreneurs that address climate and environmental issues have until today to apply for the ClimaTech Run competition, which offers startups a top award of USD 100k and the chance to pitch their product at COP27. Ten startups will be shortlisted in October to pitch at the global climate summit in November.


THE BIG STORY ABROAD-

Fed delivers third successive jumbo rate hike: The Federal Reserve raised interest rates by 75 bps for the third successive meeting and indicated that it would continue its aggressive stance in coming meetings as it battles to curb inflation. Fed officials unanimously chose to raise the central bank’s policy rate to a range of 3-3.25% ⁠— its highest level since January 2008 — and almost all forecast rates to hit 4-4.5% by the end of the year.

For first time, Powell admits chance of recession: “No one knows whether this process will lead to a recession or if so, how significant that recession would be,” Fed Chairman Jerome Powell said during his post-meeting presser. “The chances of a soft landing are likely to diminish” because policy needs to be “more restrictive or restrictive for longer.” Powell also spoke openly about the need for a “correction” in the housing market and warned that rising unemployment in the months ahead would cause “pain.”

Markets got the message: US stocks whipsawed following the announcement, with the S&P 500 climbing as high as 1.3% before crashing back to end the session 1.7% in the red. Yields on US two-years surpassed 4% for the first time since 2007 while another part of the yield curve inverted, an indicator of a coming recession. Oil fell below USD 90 a barrel, the USD hit a fresh two-decade high, and BTC came close to falling below USD 18k for the first time since 2020.

It’s a sea of red in Asia this morning, with the Hang Seng (-2.1%) and the Kospi (-1.4%) leading the declines. The sell-off looks set to continue in Europe and the US later today, according to stock futures.

The story is dominating the front pages of the global business press: AP | Reuters | Bloomberg | WSJ | FT | CNBC.

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COUNTDOWN TO COP-

Climate change remains the most serious existential challenge faced by humanity, President Abdel Fattah El Sisi told a climate roundtable on the sidelines of the UN General Assembly yesterday (watch, runtime: 7:25). In a pre-recorded speech, the president said that the repercussions of climate change are worsening by the day as temperatures soar globally, noting the recent devastating floods in Pakistan and the forest fires in Europe over the summer. El Sisi reiterated his call for the international community to meet the pledge to provide USD 100 bn in funding every year to help developing countries mitigate and adapt to the effects of climate change.

Denmark just became the rich nation to pledge loss + damage funds to countries in the Global South — but is it enough? Denmark has earmarked DKK 100 mn (USD 13.3 mn) in loss and damage aid to countries most impacted by climate change, with a focus on Africa’s Sahel region, it said in a statement. The move marks the first time a developed nation has offered compensation for the impact of emissions on poorer countries — but activists say the sum pales in comparison to the real price tag of the damage sustained by developing countries, the Washington Post writes.

Major Wall Street banks are threatening to ditch Mark Carney’s green alliance: JPMorgan, Morgan Stanley and Bank of America are among those who could pull out of the former Bank of England governor’s Glasgow Financial Alliance for Net Zero (GFANZ) due to what they say are legal risks associated with meeting strict decarbonization rules, the Financial Times reports, citing top execs. “I am close to taking us out of these global green commitments,” one senior exec said. “I’m not going to allow third parties to create legal liabilities for us and our shareholders. It is immoral and irresponsible.” GFANZ seeks to tackle climate change from within the financial system by getting members to decarbonize their combined USD 130 tn in assets.

CIRCLE YOUR CALENDAR-

Our friends at HSBC are hosting an energy transition webinar series next Tuesday-Thursday, 27-29 September. The series will look at the “latest climate analysis in relation to the global energy market and transition to net zero” in six different sessions covering energy security, what is required to ensure the success of COP27, financing and investment needs for the energy transition, and the scaling up of renewables in the region, among other topics. You can register for the series here.

WANT MORE on the region’s energy transition? Catch this op-ed in EnterpriseAM by HSBC’s Group Head, Center of Sustainable Finance and Head of Climate Change Middle East, North Africa and Turkey, Zoe Knight on to the capital that’s needed to help drive that shift.

A Spanish business delegation will be in town next Tuesday and Wednesday (27-28 September) for the Egypt-Spain Multilateral Partnership Forum, organized by the Spanish Institute for Export and Investment, according to a press release (pdf). The two-day conference will include seminars and panel discussions on trade and investment in transport, energy, and water with Egyptian ministers and representatives from government bodies, alongside officials from international financing institutions and Spanish Secretary of State for Trade Xiana Méndez Bértolo. The agenda for the conference is available here (pdf).

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

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WE’RE LOOKING FOR A SMART, TALENTED HEAD OF PEOPLE to help us develop and deliver a comprehensive people strategy to help grow Enterprise and our sister company, Inktank Communications. Attracting and retaining top talent is the lifeblood of our business — are you the right person to help us do it?

WHO YOU ARE- Our Head of People is responsible for aligning HR practices with business objectives and works alongside some very smart people, including our C-level and leadership teams, to design and develop HR strategies and monitor their effectiveness. Candidates should have at least 10 years of experience in human resources, with extensive knowledge of key HR disciplines including performance and talent. We are looking for someone who isn’t afraid to challenge, innovate, experiment, and move at a fast pace — not to mention creating some very cool new things to drive people engagement and improve a high-performance culture.

INTERESTED IN APPLYING? To apply for the Head of People, drop us a line at jobs@enterprisemea.com and mention “Noha” in your subject line — she’s our outgoing Head of People and the first person who’s going to be reading your application. Please send a solid cover letter telling us a bit about who you are and why you’re a good fit for our team. We want to see your CV, but the most important thing is a cover letter that makes us want to pick up the phone and give you a call.
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The Somabay Endurance Festival, organized by The TriFactory, returns this month for the fourth time. Featuring four different races that combine swimming, cycling, and running, as well as the 1K Kids Race (ages 5-10) and the 10K Race, the Somabay Endurance Festival has got something for everyone. Taking place from 29 September though 1 October, spots are running out for Egypt’s favorite multi-sport event. To find out more and sign up, head to www.thetrifactory.com/somabay.

ENTERPRISE ON THE ROAD

There are two ways forward for Egypt’s IPO market, says EFG Hermes investment banking boss

We have a handful of traditions at the EFG Hermes One on One — one is eating a lot of red meat. Another is checking in with Mostafa Gad for a glimpse into what his crystal ball says about the IPO and M&A outlooks for Egypt in the year ahead. Gad is co-head of investment banking for Egypt at EFG Hermes.

KEY TAKEAWAYS from our conversation in Dubai yesterday:

  • Policymakers have three paths open to them as they look to get serious about the asset side of their balance sheet. Two routes lead to IPOs, the third runs through an M&A pathway.
  • IPO activity could return in 2Q and 3Q 2023. You can safely expect international institutions that invest in public equities to hold back until they feel they have clarity on the foreign exchange regime.
  • 2022 has been a record year for M&A activity and there’s momentum in the market to see this carry through to 2023.
  • Strategic investors will commit to M&A where public markets folks are holding back from taking a position because strategics can choose to take a longer-term view.
  • Breathing new life into the stock market just doesn’t help day traders — it reprices every single corporate asset in Egypt by raising comparables for everyone.

In finance, it’s all about pricing. Every consumer loves a good deal — on a car, a computer or a new pair of shoes. It’s no different for investors. Whether you want to take a position in a company through an initial public offering (IPO) or buy one outright in the private market, it’s all about valuation — and valuation decisions are benchmarked and priced on the basis of comparables in public markets. That’s finance-nerd-speak for “the stock exchange.”

That simple fact of life leaves policymakers with two options if they want to go the IPO route, says Gad.

OPTION #1- Look to the example of Abu Dhabi. Regular readers of Enterprise know that Abu Dhabi has transformed itself from a reasonably sleepy IPO backwater into one of the region’s hottest markets (+18.9% year to date) thanks to a run of successful IPOs. How did it pull off the transformation? “They accepted that less-than-optimal valuations were the price that needed to be paid to revive the market — that in the early days, it’s worth going to market with IPOs priced even below fair value because the comps in the market are low. Taking attractively priced transactions to market is how you grow your market cap,” Gad says, pointing to the recent IPOs of companies with “great fundamentals, great cashflows, and good dividends,” including Adnoc Drilling, Adnoc Distribution, and Fertiglobe.

That approach is paying dividends (forgive the pun): In June, Borouge, a joint venture between Adnoc and Borealis, became the ADX’s largest-ever IPO and the largest-ever petchems listing in MENA, raising USD 2 bn in an offering that was c.42x oversubscribed. Borouge expects to pay a dividend of nearly USD 1 bn for FY 2022 — and of at least USD 1.3 bn in 2023, good for a 6.5% dividend yield based on the offer price.

OPTION #2- Get highly liquid state institutions to invest in the stock market, including folks managing assets for the pension and social ins. system. “It’s not altruism for them to invest in the market — it’s part of their mandate,” Gad notes.

“You cannot escape the comparables in an IPO,” Gad says. “The stock market prices every company in Egypt. Every single Egyptian asset. ‘Comps’ are the starting point for discussion before you can start arguing for a premium.”

Breathing new life into the EGX will “reprice everything from banks to petrochemicals, and not just IPOs — for private market transactions, too,” Gad says. “Look at Saudi Arabia and the multiples there. It is not that these are vastly better companies. It’s that the benchmark for valuation is much higher because they have a vibrant, effective capital market.”

Wait, Enterprise: You said policymakers had three paths. That’s just two. Correct.

OPTION #3- Sell stakes (or entire companies) on the private market. “If you sell an asset directly in a private sale to a strategic, the seller has more room in which to talk valuations without reference to comparables in the EGX. There is a very good chance you can get fair value for an asset this way,” Gad suggests. The sale of a large stake now to a strategic investor also leaves the door open to an IPO down the road — a process that would see the state sell another piece of its holdings at a higher valuation when the market is back.

Regional sovereign funds including Abu Dhabi’s ADQ and Saudi Arabia’s PIF will be big players here, as will ambitious outfits such as DPI.

The best route? It depends on objectives, Gad suggests. Do you want to maximize cash in? Private sales to strategics is the way to go. Do you want to revive the market? Play a role in getting it back into shape? Then accept the fact that you’ll be selling a bit below fair value and follow Abu Dhabi’s example by taking good assets to market.

What about the private sector? It generally has the luxury of time on its side when it comes to mulling the timing of an IPO, Gad says: “It’s easier for them to time transactions because they are not in a rush — generally speaking, they have cash and they can hold back so they don’t compromise on valuation.”

The next big trigger market watchers are waiting for: Clarity in the foreign exchange regime. “We need to see the FX overhang addressed so international investors — who think in USD terms — can price the assets. And we need to see inflation come down a little bit,” Gad notes.

And remember, friends: We’ve been here before. This moment feels, in capital market terms, similar in many ways to where we were in 2016.

So when could we see a return of activity in the IPO market? Possibly in 2Q or 3Q 2023, Gad says.

THE M&A OUTLOOK IS DIFFERENT

…at least if you’re talking about strategic investors. “They can absorb shorter-term turbulence because they look long-term. Look at ADQ and PIF. Look at AD Ports’ acquisition of Transmar,” Gad says. “AD Ports knows that regional lines are often under-served by major operators in times of turbulence and there is a lot of room for a sharp regional operator such as Transmar to connect Egypt to the GCC and East Africa. Look at Agthia and Abu Auf. Agthia knows it is a great brand and that the transaction will definitely be accretive on a multi-year timeline.” EFG Hermes was exclusive sell-side advisor in the Transmar and Abu Auf sales.

The M&A outlook is solid for the rest of this year and heading into 2023. “We have a healthy pipeline as EFG Hermes and we see there is a lot of M&A momentum in the market. 2022 will be a record year for transaction count in Egypt, and though much of that is being driven by PIF and ADQ, there is a lot of activity and a good pipeline outside of them.”

M&A WATCH

Bids for Alex Medical aren’t adding up + B Investments approves fair value study ahead of Giza Systems sale

A tale of two fair value studies: Things are not looking up for the Tawasol Holdings-LimeVest consortium’s bid to acquire Alex Medical, as a fair value study from Andersen adds weight to the board’s suggestion that the bid undervalues the company. Meanwhile, B Investments could close the sale of its stake in Giza Systems to a Saudi Telecom subsidiary within weeks, after giving its thumbs up to a fair value study from BDO.

ALEXMED VALUED ABOVE TAWASOL-LIMEVEST OFFER-

Andersen values Alex Medical some 8% higher than Tawasol-LimeVest’s acquisition bid: A fair value study has valued Alexandria Medical Services above the two recent offers for the company submitted by the Tawasol Holdings-LimeVest consortium and Yas Holdings, the company said in a disclosure (pdf) to the bourse. The study, conducted by Alex Medical’s financial advisor Andersen, has put the company’s per-share price EGP 52.80, 7.8% higher than the EGP 49.00 offered in Tawasol-LimeVest’s ongoing mandatory tender offer and 8.6% above Yas’s competing bid of EGP 48.62 per share. Andersen values the company at EGP 821.8 mn.

Alex Medical’s board has made its views on the Tawasol-LimeVest bid clear: The valuation come a day after the Alex Medical board signaled a thumbs down on the consortium’s bid to acquire up to 74% of the company, saying the offer doesn’t reflect the average share price of the company for the six months preceding the launch of the MTO. The board has yet to discuss the Yas offer, which is pending healthcare-sector specific approvals and the greenlight from the Financial Regulatory Authority.

The Tawasol-LimeVest MTO is ongoing until 27 September. It is unknown how many shareholders have agreed to sell their shares to the consortium. Abu Dhabi Commercial Bank owns a 51.5% stake in Alex Medical and had reportedly been interested in making an exit last year, when more than eight companies (including Tawasol-LimeVest and Yas) joined a bidding war for the company that ultimately ended without a sale. Given ADCB’s board representation, it might not be looking good for the consortium’s bid.

Advisors: Prime Holding are the brokers on the Tawasol-LimeVest offer and Zaki Hashem and Partners are acting as the consortium’s counsel. Al Ahly Pharos is reportedly Yas’ financial advisor on the transaction.

B INVESTMENTS OK’S GIZA SYSTEMS FAIR VALUE STUDY-

B Investments approves Giza Systems fair value study ahead of exit: B Investments has given a thumbs up to a fair value study (pdf) of Giza Systems it commissioned from financial advisor BDO ahead of selling its stake in the company a subsidiary of Saudi Telecom (STC), according to a statement (pdf) to the EGX yesterday. The study puts Giza Systems’ equity value at around EGP 1.8 bn (USD 93 mn), or EGP 202.10 per share.

Close approaching: The final equity value of the transaction will be determined when it closes, which should be within three weeks, B Investments IR head Omar El Labban told Enterprise.

B Investments is making a full exit from Giza Systems, after in April accepting an undisclosed binding offer for its 44.7% stake from Solutions by STC. The offer puts an enterprise value (the total worth of the company including debt and cash balance) on Giza Systems of USD 145 mn.

REFRESHER- Solutions by STC is on course to take an 89.5% stake in Giza Systems from SPV Inergia Technologies, in which B Investments is the majority shareholder. Inergia holds a 65.7% stake in Giza Systems (including B Investments’ stake). It’s not known who the other sellers are.

M&A WATCH

SODIC kills bid for MNHD

SODIC is no longer interested in acquiring MNHD: SODIC has called off its takeover bid for Madinet Nasr Housing and Development (MNHD) and is currently reviewing other alternatives, our friend SODIC Managing Director Magued Sherif told Bloomberg Asharq.

MNHD shareholders rejected SODIC’s bid last month, saying its EGP 6.36 bn valuation was too low. The upmarket developer had offered to pay EGP 3.20-3.40 per share to purchase up to 100% of the company, which the board said did not match its “real value.”

What now for SODIC? SODIC is looking into several alternatives to the MNHD bid, Sherif told the business news site. These include various partnerships or acquiring new land in cooperation with governmental bodies such as New Urban Communities Authority, he said, without disclosing further information.

POLICY

Intellectual Property Authority to launch in 2024 under new five-year IP strategy

The Madbouly government will establish a National Intellectual Property Authority in the coming two years as part of a five-year IP strategy (pdf). Launched by Prime Minister Moustafa Madbouly at a ceremony yesterday, the strategy provides a roadmap for putting into place an institutional framework for governing intellectual property rights and streamlining policymaking.

The National IP Authority is at the center of things: Intellectual property governance is currently managed by nine disparate and overlapping government agencies that operate independently of each other under different ministries. From 2024, the IP Authority will step in to coordinate policymaking and work with other areas of government. The strategy will also see policymakers review legislation related to intellectual property, link IP to the country’s sustainable development goals, and raise public awareness about the subject.

We’ve known this was in the works for a while: Madbouly announced plans to establish the authority earlier this year.

INVESTMENT WATCH

Taiwanese A/C manufacturer, Elaraby to build USD 33 mn factory

Taiwanese manufacturer Rechi and Elaraby Group will partner to build a USD 33 mn A/C compressor factory with an eventual annual production capacity of 6 mn units, cabinet said in a statement yesterday. The factory is expected to start production in 2024 with an annual production capacity of 2 mn units. This will rise to 6 mn within five years.

All part of the localization push: Local components will make up 50% of the product in a first stage, with more local parts to be incorporated later, the statement read. Around half of the factory’s output has been earmarked for export to regional and international markets.

STARTUP WATCH

Local fintech investment startup Exits raises USD 1 mn in pre-seed round

Local fintech investment platform Exits has raised USD 1 mn in a pre-seed round from its UK-based investment arm of the same name, as well as Baseeta Investments Holding and Mawelni Holding, the startup said in a press release (pdf). Exits will use the capital to help it switch from its current beta website to a bigger platform, co-founder Ahella El Saban (LinkedIn) told Enterprise.

British investment arm? UK-based Exits “is a company that has been created in the UK to house our Egyptian angel investors all in one place and it will only invest in Exits.me,” company co-founder Mohamed Aboulnaga told us. It’s also unclear who is behind Baseeta and Mawelni: We were unable to find any record of these companies online.

About Exits: Founded earlier this year by El Saban, Aboulnaga (LinkedIn), and Ayman El Tanbouly (LinkedIn), the company offers investment banking and M&A services for startups and SMEs across MENA, both through its online investment marketplace and offline. Aboulnaga also this year launched Cairo-based M&A advisory outfit Pie Consulting, which acquired Exits for an undisclosed sum in April.

What they said: “Startups and SMEs are severely overlooked when it comes to investment banking services from traditional investment banking entities, who offer either a too high retainer for them to afford or they don’t look at them because of their small size,” El Saban said. “We want Exits to be the go-to investment marketplace in MENA for any type of investment and for anyone that wants to invest regardless of their background.”

KUDOS

The Grand Egyptian Museum received a “Green Building Award” from the Arab Water Council at the government’s Environment and Development Forum earlier this month, state news agency MENA reported.

CIB and Visa honoured women entrepreneurs in the first edition of the payments company’s She’s Next grant program, according to a press release (pdf). Five entrepreneurs were chosen from over 150 applications, receiving a USD 10k grant and a year of business coaching from IFundWomen.

Who was recognized?

EDITOR’S NOTE- This story was amended on 22 September, 2022 to correct the name of Bellies En Route co-founder Mariam Nezar. An earlier version of this story incorrectly said her name is Mariam El Nahas.

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LAST NIGHT’S TALK SHOWS

It was something of a slow night on the airwaves last night, with talking heads focusing on the Federal Reserve’s latest interest rate hike and how it would impact our central bank’s decision when its monetary policy committee meets today to decide on interest rates.

Some want the CBE to keep rates unchanged: Bassim Youssef, a member of the Federation of Egyptian Industries (FEI), told Salet El Tahrir (watch, runtime: 13:56) that he believes that keeping rates steady would be a better alternative to raising rates. “We need to find other ways to obtain USD,” Youssef said, stressing the necessity of resolving the USD shortage to release shipments stuck at ports. Banking expert Sahar El Damaty told Yahduth Fi Masr (watch, runtime: 6:38) that she expects the EGP to weaken further against the USD in the coming weeks.

Gold deposits at banks? Businessman Ahmed Abo Hashima told Yahduth Fi Masr’s Sherif Amer (watch, runtime: 3:54) that he wants the public to be able to deposit gold in banks and earn interest, a move he said would help bring prices down and strengthen the EGP against the greenback.

EGYPT IN THE NEWS

“The Björk of food:” Egyptian artist, chef, and designer Laila Gohar gets a profile in the New Yorker.

ALSO- Egypt’s national human rights strategy again comes under criticism in a report from Amnesty International ahead of COP27, which accuses the government of covering up rights violations. (Associated Press)

ALSO ON OUR RADAR

Domty acquisition finalized: A consortium of investors led by Expedition Investments received a 32.9% stake (93.0 mn shares) for EGP 511.6 mn, according to a notice on the EGX yesterday. Their mandatory tender offer for up to 34% of the cheesemaker closed last week.

CFC Group project gets cabinet approval: Cabinet approved setting up a freezone for CFC Group’s proposed USD 400 mn fertilizer complex in Qena Governorate during its weekly meeting yesterday, according to a statement. The Emirati company will establish the facility in Al Haw industrial zone, producing 200k tons of fertilizers, 400k tons of animal feed and 700k tons of phosphoric acid each year.

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

PLANET FINANCE

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There is plenty of M&A news out of the region this morning:

  • Emirati firm International Holdings Co. is offering to pay up to USD 2.15 bn for 25-31.25% of Colombian foodmaker Nutresa, as it looks to invest bns of USD in emerging markets. (Disclosure, pdf | Bloomberg)
  • Abu Dhabi energy giant Adnoc is in early talks to acquire all or part of energy trader Gunvor. Gunvor is one of the world’s largest traders of crude and oil products, and has a large footprint in the global LNG trade. (Bloomberg)

And a little further afield: Schneider Electric is acquiring 100% of IT consultant Aveva Group, buying out its minority shareholders in a GBP 9.5 bn (USD 10.8 bn) transaction. Schneider will pay GBP 31.00 a share, a 41% premium to Aveva’s trading price before news of the sale broke. (Statement, pdf | Reuters)

ALSO- Germany is spending EUR 8 bn to nationalize struggling gas giant Uniper in a move that could help shield Europe’s largest economy from blackouts and rationing in the winter. The country’s largest gas importer suffered a EUR 12 bn loss in 1H 2022 on soaring gas prices after Russia limited flows to Europe, and losses are expected to exceed EUR 18 bn by the end of the year. (Bloomberg)

Down

EGX30

9,956

-0.6% (YTD: -16.7%)

Up

USD (CBE)

Buy 19.43

Sell 19.54

Up

USD at CIB

Buy 19.46

Sell 19.52

None

Interest rates CBE

11.25% deposit

12.25% lending

Down

Tadawul

11,461

-0.4% (YTD: +1.6%)

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ADX

10,094

-0.4% (YTD: +18.9%)

Down

DFM

3,461

-1.1% (YTD: +8.3%)

Down

S&P 500

3,790

-1.7% (YTD: -20.5%)

Up

FTSE 100

7,238

+0.6% (YTD: -2.0%)

Up

Euro Stoxx 50

3,492

+0.7% (YTD: -18.8%)

Down

Brent crude

USD 89.83

-0.9%

Up

Natural gas (Nymex)

USD 7.76

+0.6%

Up

Gold

USD 1,682.30

+0.7%

Down

BTC

USD 18,315

-3.3% (YTD: -60.0%)

THE CLOSING BELL-

The EGX30 fell 0.55% at yesterday’s close on turnover of EGP 999.8 mn (4.9% above the 90-day average). International investors were net buyers. The index is down 16.7% YTD.

In the green: Alexandria Containers (+1.7%), CIB (+1.2%) and e-Finance (+0.9%).

In the red: Madinet Nasr for Housing and Development (-6.9%), Fawry (-6.1%) and Rameda (-2.8%).

DIPLOMACY

Foreign Minister Sameh Shoukry emphasized Egypt’s efforts to export more natural gas to Europe amid the global energy crisis during a dinner with world leaders hosted by French President Emmanuel Macron on the sidelines of the UN General Assembly in New York, according to a cabinet statement. Shoukry also talked about the impact of high food and energy prices on emerging markets during the dinner, which he attended on behalf of President Abdel Fattah El Sisi.

Also on Shoukry’s agenda: The foreign minister attended UN and African climate talks, and held meetings with EU foreign policy chief Josep Borrell and Hungarian Foreign Affairs and Trade Minister Péter Szijjártó.

MY MORNING ROUTINE

Malak Shenouda, head of art and events at AlDau Development’s ADD Art: 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 Malak Shenouda, head of art and events at AlDau Development (LinkedIn). Edited excerpts from our conversation:

My name is Malak Shenouda, and I am a cultural producer / practitioner. I’m currently the Head of Art and Events at AlDau Development. I’ve recently established within the holding company an art subsidiary, ADD Art. My responsibility is to ensure that, through ongoing art-related initiatives, we add value through art to our properties, clients, company, local art scene, and community.

ADD Art came about because AlDau Chairman, Bassel Sami Saad, is a great admirer and supporter of art. He decided to take that interest to a more professional level and establish ADD Art, within the existing corporate structure of ALDAU Development. This is groundbreaking for the local art scene. Internationally, many big brands and banks have established art departments with the aim of playing an active role in the art scene, and offer their different facilities as a resource to artists. This is the first time in Egypt where a private entity doesn’t just support art through sponsoring an exhibition or buying an artwork. By establishing ADD Art, ALDAU Development is offering the numerous hotels and establishments it owns, to host artworks, artist retreats, exhibitions, cultural events, collaborative projects and more.

The worlds of art and hospitality are intersecting more and more. Worldwide, and recently in Egypt as well, restaurants and hotels have realized the huge importance that art plays in the creation of a successful guest experience. Our age is a very visual one that constantly seeks attractive moments and monuments to enjoy or post about. Mass-produced decorative items are being replaced by more valuable artworks by young or established artists. Iconic artworks are transforming the visual identity of the spaces as well as the brand image, and artists are having an ever-expanding platform to showcase their art after having been limited to white-cube gallery spaces for years.

I only joined ALDAU Development around 3 months ago so I look forward to growing here and establishing something solid that will truly have an impact on the company as well as the art-scene. I feel like the possibilities are endless when it comes to art and hospitality and I already have a couple of exciting projects in the pipeline.

I wake up and head directly to the office. Upon arrival I have my cup of coffee while I do some readings, including Enterprise and the Art newspaper. Once I’m all caught up on what’s happening in Egypt and the art world, I get on to my to-do list.

I start the day by reading the emails I received and prioritize them in order of urgency and importance, then do follow-ups on any pending things I have on my to do list. After that I might have internal meetings, or do calls headhunting for artists for upcoming projects, developing project proposals and pitches for the different hotels, finalizing any upcoming event logistics. It is important for us to have an on-going calendar that maintains consistency.

I went to a German school so organization is part of my DNA. The number of analog and digital to-do lists, reminders, and sheets that I keep to track the progress of my tasks is ridiculous. This is hard to adapt in an industry like art, that is very casual and informal, but over the years I’ve learned to adapt my system to that type of work. Even though it’s quite uncommon, I have found that artists do appreciate the organized and professional approach.

When you work in a field you love, and on projects that are very exciting for you, it’s very difficult to establish limits. After failing to do that for several years and being affected on a personal level, I now take a daily conscious decision to disconnect once I leave the office, and just write any thoughts that pop into my mind later, so that I can remember to deal with them the next day.

One of the constants in my day now is winding down and relaxing at the end of the day and doing something I enjoy — even for 15 minutes before the day ends to be able to face the next day with new energy. I also like to switch off by reading art books that include essays by scholars in the field, watching TV shows, attending exhibition openings or open-studios, and catching up with my family and friends.

I’ve recently come across a local bookstore that sells incredible art books. My favorite find is New Vision: Arab Contemporary Art in the 21st Century. I’ve been looking for it for a while because it is such an important resource that creates a proper framework and academic discourse for regional art, that I think everyone should read.

The best piece of advice I’ve received is as long as you do something you love, and you do your absolute best at it, it’s very unlikely that you will fail, regardless of any obstacles. Hard work and perseverance prevail.

CALENDAR

OUR CALENDAR 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.

SEPTEMBER

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 50 fintech startups.

September: Egyptian-German Joint Economic Committee.

September: A delegation from Germany’s Aldi will visit Egypt to look at potential investments.

September: Government to launch an international promotional campaign for Egyptian tourism.

13-27 September (Tuesday-Tuesday): UN General Assembly, New York.

19-22 September (Monday-Thursday): EFG Hermes One on One Conference, Dubai.

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

22 September (Thursday): Deadline to submit prequalification applications for companies interested in submitting a proposal for sea water desalination projects.

25-27 September (Sunday-Tuesday) A delegation of executives at Egyptian real estate companies visit Saudi Arabia to present developers with potential investments in Egypt’s real estate sector.

25-29 September (Sunday-Thursday) FRANEGYPT will hold its first virtual expo on franchises in the country.

26–27 September (Monday-Tuesday): The Africa Women Innovation and Entrepreneurship Forum (AWIEF) at the Cairo Marriott Hotel.

27-28 September (Tuesday-Wednesday): Egypt-Spain Multilateral Partnership Forum, Sofitel Gezira, Cairo, Egypt.

27-29 September (Tuesday-Thursday): Africa Renewables Investment Summit (ARIS), Cape Town, South Africa.

27-29 September (Tuesday-Thursday): HSBC Energy Transition Webinar series.

28-29 September (Wednesday-Thursday): The sixth edition of Arab Pensions and Social Ins. Conference in Sharm El Sheikh.

30 September (Friday): Winter opening hours for shops and restaurants begin.

OCTOBER

October: House of Representatives reconvenes after summer recess

October: Air Sphinx, EgyptAir’s low-cost subsidiary to commence operations.

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

1 October (Saturday): Start of 2022-2023 public school year.

1 October (Saturday): 2022- 2023 academic year begins for public universities.

4-8 October (Tuesday-Saturday): The Chemical and Fertilizers Export Council of the Trade and Industry Ministry is organizing a trade mission to Kenya.

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

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

10 October (Monday): The CEO Women Conference.

10-14 October (Monday-Friday): Gitex Global, Dubai International Convention and Exhibition Centre, Dubai, UAE.

10-16 October (Monday-Sunday): World Bank and IMF annual meetings, Washington, DC.

15 October (Saturday): Cairo Metro will launch a global tender for maintenance work on the power stations and overhead catenary system of Line 1.

16-19 October (Sunday-Wednesday): Cairo Water Week 2022, Nile Ritz Carlton, Cairo.

17 October (Monday): Fifth Egypt and UN-led regional climate roundtable ahead of COP27, Geneva, Switzerland.

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

27-30 October (Thursday-Sunday): Cairo ICT, Egypt International Exhibition Center, New Cairo.

Late October-14 November: 3Q2022 earnings season.

Late October: First Abu Dhabi Bank to complete full integration with Bank Audi’s Egyptian operations after merger.

NOVEMBER

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

1-2 November (Tuesday-Wednesday): Arab League annual summit, Algiers, Algeria.

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

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): Autotech auto exhibition, Cairo International Exhibition and Convention Center.

6-18 November (Sunday-Friday): Egypt will host COP27 in Sharm El Sheikh.

7 November (Monday): The inauguration of the first line of the high-speed rail.

7-13 November (Mon-Sun): The International University Sports Federation (FISU) World University Squash Championships, New Giza.

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

DECEMBER

3 December (Saturday): Dior Men’s pre-fall collection show in Giza.

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

13-15 December (Tuesday-Thursday): US-Africa Leaders Summit.

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

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

December: The Sixth of October dry port will begin operations.

December: Egypt to expand Sudan electricity link capacity to 300 MW.

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.

1 January (Sunday): Use of Nafeza becomes compulsory for air freight.

1 January (Sunday): Residential electricity bills are set to rise as per the government’s six-year roadmap (pdf) to restructure electricity prices by 2025.

7 January (Saturday): Coptic Christmas.

24 January-6 February: The 54th Cairo International Book Fair, Egypt International Exhibition Center

25 January (Wednesday): 25 January revolution anniversary / Police Day.

26 January (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

FEBRUARY 2023

11 February (Saturday): Second semester of 2022-2023 academic year begins for public universities.

13-15 February (Monday-Wednesday): The Egypt Petroleum Show (Egyps), Egypt International Exhibition Center, Cairo.

MARCH 2023

March: 4Q2022 earnings season.

23 March (Wednesday) — First day of Ramadan (TBC). Maghreb will be at 6:08pm CLT.

APRIL 2023

17 April (Monday): Sham El Nessim.

22 April (Saturday): Eid El Fitr (TBC).

25 April (Tuesday): Sinai Liberation Day.

27 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

Late April – 15 May: 1Q2023 earnings season.

MAY 2023

1 May (Monday): Labor Day.

4 May (Thursday) National holiday in observance of Labor Day (TBC).

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

JUNE 2023

19-21 June (Monday-Wednesday) Egypt Infrastructure and Water Expo debuts at the Egypt International Exhibition Center.

28 June-2 July (Wednesday-Sunday): Eid El Adha (TBC).

30 June (Friday): June 30 Revolution Day.

JULY 2023

18 July (Tuesday): Islamic New Year.

20 July (Thursday): National holiday in observance of Islamic New Year (TBC).

23 July (Sunday): Revolution Day.

27 July (Thursday): National holiday in observance of Revolution Day.

Late July-14 August: 2Q2023 earnings season.

SEPTEMBER 2023

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

OCTOBER 2023

6 October (Friday): Armed Forces Day.

Late October-14 November: 3Q2023 earnings season.

EVENTS WITH NO SET DATE

2H 2022: The inauguration of the Grand Egyptian Museum.

2H 2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H 2022: The government will have vaccinated 70% of the population.

3Q 2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

3Q 2022: Swvl to close acquisition of Urbvan Mobility.

4Q 2022: Infinity + Africa Finance Corporation to close acquisition of Lekela Power.

4Q 2022: Electricity Ministry to tender six solar projects in Aswan Governorate.

4Q2022: Raya Holding subsidiary Aman and Qalaa Holdings’ Taqa Arabia to launch their fintech company.

End of 2022: Decent Life first phase scheduled for completion.

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.

1Q 2023: Adnoc Distribution’s acquisition of 50% of TotalEnergies Egypt to close.

**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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