Monday, 14 November 2022

AM — Our Enterprise Climate X Forum will take place at the Grand Egyptian Museum

TL;DR

WHAT WE’RE TRACKING TODAY

Good morning, friends. Before we get started on a very busy news day, we have an announcement to make:

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Our Enterprise Climate X Forum is happening at the brand new Grand Egyptian Museum: We are delighted to let you all know that the Enterprise Climate X Forum is taking place at the Grand Egyptian Museum on Tuesday, 6 December 2022. We can think no better place to discuss the world’s most important industry than in a world-class museum that stands as a testament to our nation’s ability to persevere (and innovate) for seven millennia.

What’s the Enterprise Climate X Forum? It’s our first industry-specific conference, where CEOs, top execs, investors, bankers and development finance folks have the chance to talk about how to build a climate-centered business — and how to make sure your business continues to have access to the funds it needs to grow. You can learn more on our conference website here.

Some of the biggest names in business and finance are on board — are you? If you’re a C-suite exec, business owner, climate professional, DFI staff, investor or banker, please email us at climatexrsvp@enterprisemea.com to signal your interest, letting us know your name, title and where you work.

Who’s on board? The Enterprise Climate X Forum is taking place with the generous support of our friends, including:

  • Banking partners: HSBC | Mashreq | Attijariwafa Bank
  • Telecom partner: Etisalat by e&
  • Event partners: Hassan Allam Utilities | Infinity

IT’S A GREAT MORNING FOR: Market nerds, as the EGX30 is finally in the black for the year. The benchmark index is in positive territory year-to-date for the first time since mid-January after gaining 1.9% during trading yesterday. That means the EGX30 is now 0.3% in the green for the year and is at its highest level since 13 January.

Staging a comeback? Buoyed by optimism about an IMF assistance package, the EGX30 has soared more than 38% since early July after tumbling to its lowest level since November 2016.

The EGX has gained further momentum in the past few weeks, rising 8.2% since Egypt and the IMF reached a staff-level agreement for a USD 3 bn loan program and the central bank moved to a flexible exchange rate.


WATCH THIS SPACE #1- The Madbouly government’s state ownership policy document could go into effect at the end of this year, Vice Minister of Finance Ahmed Kouchouk told the Senate yesterday. The government has finalized the document, which would be ratified at the end of the year to go into effect, the minister said.

REMEMBER– The document is supposed to be a roadmap to more than doubling the private sector’s role in the economy and attract bns of USD in fresh investment. The document will lay out the industries which the government plans to open up to private companies and the ringfenced strategic sectors that will continue to see heavy state involvement.

When are we going to see it? We were expecting to get a first glimpse of the final document during last month’s economic conference, but instead were told that the document was “nearly” finished and that we’d need to wait. Little has been said about the document in the three weeks since the conference ended.

Maybe during the National Dialogue? The document is expected to be discussed before the National Dialogue, which could kick off any time after COP27. The document will be discussed by a dedicated subcommittee which will have the power to amend it.


WATCH THIS SPACE #2- Al Mansour Automotive hopes to start assembling electric vehicles in Egypt within the coming year and is close to finishing feasibility studies, our friend Ankush Arora, CEO of Al Mansour Automotive, told Bloomberg Asharq yesterday. This comes a few days after Mohamed Mansour told Bloomberg that he intends to produce 15k EVs over the next three years.

But they’re asking for government support: An Egyptian EV industry “cannot succeed or [be] adopted at an appropriate pace commercially without participation and support by the government,” Arora said, expressing hopes that the incentives included in the long-awaited automotive strategy will be announced in the next 3-4 weeks.

It’s also preparing to import electric Cadillacs: Al Mansour Auto will partner with GM to import electric Cadillacs to Egypt by the end of 2023. The two companies want to have five models available on the Egyptian market by 2025.

IN SHARM TODAY-

It’s crunch time at COP as the second and final week of negotiations gets underway. With the headline-grabbing speeches of the first week out of the way, it’s week two when state delegates really get down to brass tacks and push towards draft agreements.

But will Friday, 18 November be a day of joy or sorry? At the end of week one, delegates aren’t painting an optimistic picture. A Reuters report suggests an atmosphere of frustration as negotiators fail to make progress on key aspects of the talks.

As expected, trust between developed and developing nations is low amid an impasse on loss and damage: Developing countries are continuing to push for an agreement on new financing mechanisms but these are being blocked by rich nations, negotiators tell the newswire. “We haven’t seen huge solidarity between the developed and developing countries,” one policy analyst said. Instead there have been “disappointing commitments and action this year, which has dented trust.”

It’s Water Day at COP27: Sessions will focus on sustainable water resource management, water scarcity, drought, cross boundary cooperation, and the improvement of early warning systems. We’re expecting the official launch of the AWARE (Action for Water Adaptation and Resilience) initiative, in partnership with the World Meteorological Organization.

BACK IN CAIRO-

On the legislative agenda: The Senate will discuss and give a final vote to amendments to the 1982 law related to the performance of the country’s diplomatic and consular corps.

It’s day 2 of the Cairo International Film Festival (CIFF) today. The CIFF is set to run until Tuesday 22 November.

HAPPENING THIS WEEK-

Five to seven agreements will be signed with companies to export renewable energy via the SCZone, Planning Minister Hala El Said told Bloomberg Asharq (watch, runtime: 1:36). The SCZone has long been expected to sign agreements with international companies to establish green hydrogen and ammonia plants at COP27. Initial agreements worth bns of USD have been signed this year, the most recent of which was with Maersk for a huge USD 15 bn facility capable of producing 3 mn tons of fuel a year.

The G20 summit starts tomorrow: G20 leaders are heading to Indonesia for the 2022 summit which takes place in Bali on Tuesday and Wednesday. US president Joe Biden is already in the country for high-stakes talks with Chinese Premier Xi Jinping. The two leaders will meet face-to-face for the first time today and are expected to discuss a wide range of issues including tensions over Taiwan, the war in Ukraine, climate, and the global food and energy crises, Reuters writes.

THE BIG STORIES ABROAD-

The results from the US midterms continues to be the big story on US front pages, with many speculating about the likelihood of Biden 2024 as well as the future direction of the Republican Party after it failed to capture the Senate: Reuters | NYT | Washington Post | WSJ.

A dark day for Turkey: At least six people were killed and 81 were injured yesterday in a bombing in central Istanbul. The country’s interior minister has said that a person has been arrested in connection with the explosion, which the Turkish government is treating as a terror attack. The Egyptian Foreign Ministry condemned the attack in a statement yesterday evening. (Reuters | AFP | BBC | Bloomberg | CNN | The Guardian)

PSA #1- The LRT has (again) extended its hours: The new light rail transit system (LRT) has extended its operating hours to 7:30am until 12am starting today, operator RATP Dev said yesterday.

SOUND SMART- The all-electric LRT links Cairo to the new administrative Capital and will ultimately go all the way to 10th of Ramadan City. The line starts at the Adly Mansour transport hub near Cairo International Airport, which serves as an exchange for the LRT, Cairo Metro line three, the Cairo-Suez railway line, and two bus lines. The first branch linking Adly Mansour to Badr City by way of El Obour and El Shorouk has been open since July. Two stations on the branch to 10 Ramadan and four on the NAC branch are also open.

PSA #2- If you’re self-employed, you have to register in the Tax Authority’s e-invoice system by 15 December. This includes self-employed doctors, engineers, lawyers, and artists, the Egyptian Tax Authority said in a statement. Only e-invoices will be considered for VAT deduction or refunds as of 1 April, 2023.

What e-invoicing system? In late 2020, the Tax Authority launched a pilot program for B2B e-invoicing with 134 companies, before expanding the system to all large taxpayers in July 2021. All B2B and B2C invoices across the country should be fully automated by December. We have a primer on the system, its purpose, the timeline of implementation along with a list of phase one companies here.

PSA #3- Good news for Upper Egypt startups: Applications for a Uplift4UpperEgypt — startup program run by Orascom’s Gemini Enterprises Africa, in partnership with the Sawiris Foundation, aimed at businesses in Upper Egypt, will open on 17 November, according to Al Mal.

CORRECTIONWe incorrectly wrote in yesterday’s EnterprisePM that Andy Ogletree won USD 1.5 mn after claiming victory in the International Series Egypt golf tournament in Madinaty. The USD 1.5 mn purse is actually divided between all of the participants, with the first-placed player taking 18% of the winnings (equivalent to USD 270k). We have since updated the story on our website.

DIPLOMACY WATCH-

The US and Russia will hold nuclear talks in Cairo in a few weeks — but don’t expect a breakthrough, Reuters reports. Washington and Moscow will discuss resuming mutual nuclear inspections in late November or early December in Cairo, Russian Deputy Foreign Minister Sergei Ryabkov told Russian news agencies, though he downplayed expectations of reaching an agreement. Russia halted Inspections under the treaty in August, blaming travel curbs imposed by the US and Western allies on the back of the war in Ukraine.

Xi is visiting Saudi Arabia next month: Chinese President Xi Jinping will make a rare trip overseas next month with a visit to Saudi Arabia for talks with Crown Prince Mohamed bin Salman. Saudi Minister of State for Foreign Affairs Adel Al Jubeir told Reuters that talks will focus on boosting trade and regional security.

It’s hard to understate the significance of this trip: Washington won’t be pleased about the trip which comes amid growing cooperation between China and US allies in the Gulf. Xi’s decision to visit Riyadh comes as the US-Saudi relationship hits its lowest point in years, and as Washington takes a more assertive stance against China.

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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2CELLOS — LIVE AT SOMABAY on 18 November, 2022: Mark your calendars — world-renowned and wildly popular cellist duo, 2CELLOS will be performing at Somabay on 18 November, 2022. Having racked up a bn-plus audio streams, countless sold-out concerts, and mns of fans across the globe in their 10 years together as 2CELLOS, the Croatian duo of Luka Šulić and HAUSER will be visiting Egypt in their long-awaited 2022 Dedicated World Tour. Book your ticket now: https://www.ticketsmarche.com/tickets/buy-tickets-2-cellos.html. Call us 16390.

ENERGY

Masdar-Infinity-Hassan Allam consortium could ink agreements on 10-GW wind farm by year’s end

Like the wind: Final contracts for the 10 GW Masdar-Infinity-Hassan Allam wind farm announced last week at COP27 could be signed before the end of the year, Hesham El Gamal, general manager at Infinity, told Bloomberg Asharq.

The timeline: The consortium aims to complete studies and reach financial close within 18 months of signing the contracts, El Gamal said. Construction will then begin on the first phase of the project, which will produce some 1.5-2 GW of wind power. The entire project could be completed within three years of breaking ground on Phase 1, El Gamal said.

The location: The wind farm will be located in southern Egypt, either in Luxor or Aswan, El Gamal said. The land will be provided by government authorities under a usufruct framework, he added.

Refresher: Our friends at Infinity Power and Hassan Allam Utilities together with long-time partner Masdar signed an agreement last week to build a 10-GW onshore wind farm in Egypt, which is set to be one of the largest in the world. The plant — which will cost at least USD 10-12 bn — will have the capacity to produce nearly 48k GWh of clean energy a year.

Infinity Power is also about to sign an agreement after COP27 for a separate 320 MW wind project in the Gabal El Zeit farm south of Ras Ghareb, El Gamal said. The company will invest at least USD 320 mn in the project, he added.

Egypt has lined up a 28-GW pipeline of wind projects in recent days: Saudi renewable energy developer ACWA Power has signed up to build a 10-GW facility, Orascom Construction, Engie and Toyota Tsusho will build a 3-GW farm, and Norwegian renewable energy developer Scatec is looking at installing up to 5 GW of fresh wind capacity.

That’s a lot of wind: The combined 28 GW amounts to nearly half of the country’s current installed energy generation capacity and is more than 8x the country’s total renewables generation capacity.

ALL THREE IN ON GREEN H2?

WATCH THIS SPACE- Masdar, Hassan Allam Utilities and Infinity will sign a MoU with the government for a USD 2 bn, 2-GW green hydrogen project at COP27 this Wednesday, Hesham El Gamal, general manager at Infinity, told Bloomberg Asharq yesterday.

BACKGROUND- Masdar and HAU announced plans to establish green hydrogen plants in Egypt back in April. Hassan Allam Holding CEO Amr Allam said last month that the two companies will invest USD 10 bn in the project, which is expected to produce up to 480k tons of green hydrogen a year.

DEVELOPMENT FINANCE

EIB could commit USD 1.5 bn in new financing to Egypt

EIB could invest in water projects in Egypt: The European Investment Bank (EIB) plans to commit USD 1.5 bn in new financing to Egypt, primarily focusing on water treatment, the bank’s VP, Gelsomina Vigliotti, told Bloomberg Asharq on the sidelines of the COP27 summit. Vigliotti didn’t provide further information about which projects the bank could target or when the funding might be disbursed.

EIB interest in water projects became clear earlier this year when a bank consultant told state news agency MENA that it could invest in desalination plants in Egypt.

That’s not all: Vigliotti said that the bank will work with the government to reduce emissions in the transport and energy sectors, the two biggest contributors to Egypt’s emissions. She didn’t disclose further details.

It’s not clear whether these projects are part of the NWFE program: Several development finance institutions including the European Bank for Reconstruction and Development have committed money to Nexus on Water, Food and Energy (NWFE) program, an initiative launched by the Egyptian government in July to channel finance into green projects. Agreements signed last week are expected to unlock USD 15 bn from private investors and DFIs to help Egypt decarbonize its power infrastructure, and strengthen its food and water security.

SME FINANCE COURTESY OF AFDB-

The African Development Bank (AfDB) will lend USD 160 mn to state-owned Banque Misr to finance SMEs in priority industries, the multilateral lender said Thursday. The loan will comprise a USD 130 mn line of credit from the bank and an additional USD 30 mn from the China-backed Africa Growing Together Fund. It will have a 10-year tenor, the bank said.

Who’s getting the money: The loan will “offer Banque Misr long-term liquidity so it can extend loans to small and medium-sized enterprises and corporates operating in industry, information and communications technology and agriculture/agribusiness,” AfDB said.

COP WATCH

EBRD to help out some of our most promising local green startups

Our friends at the EBRD are taking six Smart Green Governorates startups under their wing: The European Bank for Reconstruction and Development (EBRD) will ink an agreement with the Planning Ministry to provide technical support to six of the eighteen startups showcased in the ministry’s Smart Green Governorates initiative, project coordinator Hisham Badr confirmed to Enterprise, following a Planning Ministry statement.

The selected startups: E-scooter startup Rabbit Mobility; renewable energy player NoorNation; solar and water firm Engazaat; plastics-alternatives company Banlastic; Kadet El Mostakbal; and Archtech.

The six companies will get technical support, training, and business advisory services, including access to the EBRD’s pool of more than 400 local business consultants and 1.5k international experts, the statement read.

The chosen projects could also be in line for financing from the EBRD under case-by-case agreements with the lender after the necessary studies have been completed, Badr told Enterprise.

Smart Green Governorates awardees are getting attention at COP: Organizations including the International Finance Corporation, the World Food Programme, and the UN Food and Agriculture Organization expressed interest in supporting the companies, Badr told us. “We held a few meetings to discuss potential collaboration interventions with representatives from the IFC, FAO, and WFP, where they expressed interest in some of the projects relevant to their mandates,” he said.

What’s next? The initiative will be back for COP28 next year in the UAE with a larger number of smart and green Egyptian projects, Badr added.

REFRESHER- The 18 projects were chosen from more than 6k applicants to be put in front of investors at COP and help them attract finance from global lenders. We sat down with Badr to learn more about the initiative in the run-up to COP.

OTHER HIGHLIGHTS FROM COP27-

The US is providing USD 10 mn for an Africa-wide climate adaptation center in Cairo, part of more than USD 150 mn in fresh adaptation support pledged by US President Joe Biden to the continent, according to a cabinet statement. The Biden administration is also contributing USD 25 mn to the African Union’s Africa Adaptation Initiative (AAI) as part of the fresh pot of funding, cabinet said. .

Morocco and Egypt signed an MoU to strengthen cooperation on sustainable development and environmental protection, according to a cabinet statement. The agreement covers sectors including renewable energy, climate change adaptation and mitigation, coastal zone management, marine pollution control, waste management, biodiversity conservation, environmental education and technology.

WATCH THIS SPACE- Egypt will launch a program, dubbed Green Star, that will favor low-carbon products for government purchases, Trade and Industry Ministry Ahmed Samir said during Decarbonization Day. (Statement)

Other headlines worth knowing about:

  • Prime Minister Moustafa Madbouly established a business council for sustainable development to pool funding and support for green economy projects. (Statement)
  • Egypt’s Engazaat has partnered up with Swedish cleantech firm Azelio and French water solutions provider Mascara NT to set up water desalination systems for off-grid desert farmers across Africa, starting in Egypt’s Moghra oasis. (Press release)
  • COP27 President and Foreign Minister Sameh Shoukry discussed food security and the US-UAE led AIM for Climate agriculture investment platform with US Agriculture Secretary Tom Vilsack. (Statement)
  • Egyptian and Australian authorities discussed upping cooperation on mining and green hydrogen in a meeting between Oil Minister Tarek El Molla and Australian Environment and Climate Action Minister Reece Whitby. (Oil Ministry statement)

A MESSAGE FROM HSBC

Banks can play an important role in the transition journey of SMEs

By Natalie Blyth

If the world is to meet its net zero targets by 2050, businesses must contribute by innovating quickly and at scale. Large firms are already in the spotlight in this regard, and many are making good progress. But the role that SMEs need to play in the net zero transition is critical, and needs to be more closely addressed.

SMEs are the backbone of most economies. They make up 90% of global supply chains, which themselves account for nearly 80% of total carbon emissions. Of the USD 100 tn investment required to reach a net zero economy by 2050, USD 25-50 tn must be directed to SMEs. These figures are stark, and show that SMEs’ ability to address sustainability is critical to the outcome of climate change.

Yet, compared to large companies and multinationals, SMEs are poorly equipped to make the changes necessary to transition. Unlike larger peers, they often lack the data, resources and know-how to map out detailed ESG plans. And as they navigate an environment shaped by pandemic aftershocks, energy crises, soaring inflation, and volatile geopolitics, SMEs the world over are simply operating in survival mode. They might be forgiven therefore, for focusing on the short term, but if we are to avert the worst impacts of climate change, it is critical that the challenges they face on their transition journey are significantly reduced.

How can this be achieved given the backdrop? While there is no silver bullet, banks are becoming an increasingly significant enabler, because they can play an important role in three key areas — facilitation, financing, and absorbing risk.

On facilitation, banks can help SMEs take the first step — developing transparency around their emissions, by providing inexpensive (and sometimes no-cost) tools like carbon calculators and ESG scorers to help identify individual footprints, highlight emissions hotspots, and suggest high-impact reduction measures. They can also provide a range of guidance, thought leadership, and vetted solutions to help customers on their transition journeys.

Bank financing, arguably the most well-known solution, allows for the provision of a range of options, from mechanisms to tie the cost of lending to ESG performance, through to ring-fenced finance such as SME funds for funding green companies, or where proceeds are earmarked for green purposes. At HSBC we worked with a waste management company to provide financing to restructure its capex. The business was able to invest in modern machinery to recycle materials to sell back to the industry (capitalizing on a revenue stream), establish lower landfill costs, reduce emissions, and thus create a circular economy.

With regards to mitigating risk, banks have acted as intermediaries between trade buyers and sellers for centuries, absorbing the risk and / or acting as guarantor, allowing companies to trade with confidence. In the case of supply chain finance, suppliers gain the reassurance of receiving early payment, and when counterparties are new to trading with each other, the intermediation of banks can provide more certainty that the quality or specifications of goods sold are as they should be. This need will grow as businesses look to trade or source more sustainably.

Expecting SMEs to transition in isolation is unfair and unrealistic, and misses how hugely complex and multifaceted solving the climate problem is. It will take collaboration — not just with banks, but with peers to share knowledge and approach across sectors; buyers to understand their requirements, and the public sector to understand policy and enable access to skills development programs, to name but a few.

The road ahead may look daunting, but tackling this challenge is not beyond SMEs’ reach. Seized now, the transition to net zero can be a huge growth opportunity for small businesses and help increase the pace of change required for the world to achieve net zero targets.

Natalie Blyth (LinkedIn) is global head of commercial banking sustainability at HSBC. HSBC’s column on Enterprise appears every second Monday.

CLIMATE CEO POLL

The Enterprise Climate CEO Poll: Orascom Construction’s Osama Bishai

Enterprise Climate CEO Poll- Osama Bishai, Orascom Construction: As COP27 rolls on, so does the inaugural Climate CEO Poll from Enterprise Climate and EnterpriseAM. In this series of interviews, we discuss key issues with top CEOs including climate finance, regulation, and the move towards a green economy.

Osama Bishai (LinkedIn) is CEO of Orascom Construction (OC). One of the world’s largest contractors with operations both here and in the US (as well as through its Belgium-based, 50%-owned subsidiary BESIX), OC is among firms leading the push to upscale Egypt’s renewable energy capacity, electrify its transport network, and transform it into a regional hub for green hydrogen.

OC is taking “a very aggressive focus on renewables” with a view to both domestic needs and export, Bishai tells us. The company’s consortium with Toyota Tsusho and Engie now has some 3.8 GW of installed and planned wind capacity here, after announcing plans to build a fresh 3 GW wind farm and breaking ground on their 500 MW Ras Ghareb facility, both last week during COP. Looking long-term, “renewables and particularly wind will be a major source of electricity for Egyptians and hopefully we are able to export,” he says.

Transport projects including the high-speed electric rail network contribute to the government’s decarbonization efforts, Bishai says. “As far as the pipeline in Egypt goes, we continue to be involved in heavy infrastructure and construction, whether it’s roads or transportation. Transportation is beginning to be a major part of our portfolio, and most of those projects are driven by electric energy, which is a major step forward for the Transport Ministry to be able to decarbonise or decrease the carbon footprint in their portfolio.”

The company has a first-mover advantage when it comes to green hydrogen: “The hydrogen projects that we are involved in, we have created a skillset that I believe is unique in this part of the world,” Bishai says. OC is part of the consortium with Scatec, Fertiglobe and the Sovereign Fund of Egypt that is building Egypt’s first green hydrogen plant, the first phase of which went into commissioning last week.

Water is another focus for OC and a key challenge for the country, Bishai adds. OC will look to grow its already “sizable portfolio” of water treatment projects, and is “working on a treatment plant in the middle of the desert to manage and optimize the use of irrigation and the water wasted from irrigation,” he says.

Sustainable buildings including the Grand Egyptian Museum are another component of the company’s green portfolio, Bishai adds.

Bishai is optimistic about the potential that the green transition creates for contractors — and thinks there’s no need to wait for fresh policies out of COP to get the ball rolling. “Our business is unlike some of the businesses that will be affected by policies. There is a great pipeline in renewables for developers and contractors like us,” he says. “There are several opportunities to get into new technologies that could put contractors at the forefront.”

LEGISLATION WATCH

FX-for-tax cuts plan earns Senate approval

Senators approve FX-for-tax cuts incentives: The Senate has approved legal amendments that would grant income tax breaks to investors who use FX to finance at least half of the cost of their projects. Under the proposed amendments to the 2017 Investment Act, companies would receive a tax cut of up to 55% on income generated by projects funded by FX. The changes are part of a package of measures designed to stimulate private investment and bring more FX into the country.

What’s next: The bill will be referred to the House of Representatives for discussion.

FROM THE HOUSE-

The government is one step closer to covering contractors’ losses: The House Housing Committee yesterday gave initial approval to amendments that would see the government pay compensation to contractors who have suffered losses on the back of recent economic reforms such as the EGP float. The Senate green-lit the move at the end of October.

What’s next: The bill will make its way to the plenary session of the House of Representatives for a vote.

More to come: Housing Committee Chairman Emad Hammouda said the committee would discuss a raft of new construction bills in the coming period, including new government-drafted amendments to the Unified Building Law.

EARNINGS WATCH

Raya CX net income falls 61% in 9M 2022

Raya Customer Experience (Raya CX) saw its net income decline 61% y-o-y to EGP 7.8 mn in 9M 2022, thanks to rising wages and technology costs as the firm expands, according to its latest earnings release (pdf). The company’s top line grew 51% y-o-y to EGP 848.3 mn in the nine-month period, led by the firm’s outsourcing business and offshore revenues, including its growing call center firm Gulf Customer Experience (Gulf CX), CEO Ahmed Refky said.

Raya CX's main source of revenue generation is still contact center outsourcing, which brought in EGP 445.1 mn in the first nine months of the year, or almost 53% of the company's total revenue. The company’s insourcing business came in second place with 30% of total revenue, followed by hosting, which made up the remaining 18%.

Still growing in the Gulf: While the firm’s Egyptian operations continue to account for the bulk of its business (some 80.8%), Raya CX’s Gulf operations saw revenues grow nearly eight-fold y-o-y to EGP 147.7 mn in 9M 2022 as a result of its 2021 acquisition of Gulf CX.

MOVES

Business France gets new Egypt director

Romain Guizard (LinkedIn) has been appointed Business France’s Egypt director and commercial counselor of the French Embassy in Cairo, the organization said in a statement (pdf) last week. Guizard will help French companies expand in Egypt via an export development strategy and will draw up a strategy to help Egypt-based investors do business in France. Guizard has more than 20 years of experience in international trade and investment, and has been at Business France for more than five years. He enters his new role after heading up the organization’s industry department for more than a year.

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LAST NIGHT’S TALK SHOWS

Luckily for everyone (including us), yesterday was (mostly) a COP-less night, with the nation’s talking heads focusing on the deadly explosion in Turkey and several domestic topics.

Remember that law regulating shops that was passed way back in 2019? That’s apparently coming into force in a matter of days, Rep. Ahmed El Seginy, who heads the House Local Administration Committee, told Kelma Akhira’s Lamis El Hadid (watch, runtime: 13:19).

Flashback to 2019: The bill, passed by the House in the summer of 2019, aims to bring shops operating without licenses into the formal economy by establishing new licensing requirements, introducing an inspection regime, and specifying ins. requirements among other things.

This is going to impact the vast majority of shops in Egypt, according to El Seginy, who told El Hadidi that 80-90% of stores operate without licenses.

The deadly attack in Istanbul yesterday was discussed everywhere, including on Ala Mas’ouleety (watch, runtime: 11:32), El Hekaya (watch, runtime: 9:09), Kelma Akhira (watch, runtime: 2:12) and Al Hayah Al Youm, which covered Egypt’s condemnation of the attack (watch, runtime: 1:19).

Also on the airwaves last night:

  • El Sisi talks green hydrogen: President El Sisi held a meeting with ministers to follow up on green hydrogen and ammonia projects being implemented in the Suez Canal Economic Zone with foreign companies (Ala Mas’ouleety | watch, runtime: 2:22 | Al Hayah Al Youm | watch, runtime: 3:39)
  • Saturday’s deadly bus crash that killed at least 21 people and injured eight others was still getting coverage. (Kelma Akhira | watch, runtime: 5:32)
  • Scenes of a heavy rainfall hitting Alexandria received a mention. (Kelma Akhira | watch, runtime: 4:57)

EGYPT IN THE NEWS

COP27 might have taken a day off yesterday, but climate is still leading the conversation on Egypt in the foreign press this morning. Environment Minister Yasmine Fouad talks to the Associated Press about Egypt’s aims for the negotiations, the New York Times writes that our antiquities are under threat from the effects of climate change and mass tourism, while the AP writes about Egypt’s renewable energy ambitions.

The latest on Alaa Abdel Fattah: AFP reports that the lawyer of jailed activist Alaa Abdel Fattah has been denied access to visit him for the second time in recent days. Abdel Fattah began a full hunger- and water-strike last week, raising fears for his health. Meanwhile, Germany and the UN have expressed concerns about alleged surveillance and misconduct at COP27. The German Foreign Ministry called on Egyptian authorities to allow conference delegates to work under safe conditions after a number of attendees at the German pavilion alleged they had been filmed and photographed by unknown people after it hosted a press event last week featuring Sanaa Seif, Abdel Fattah’s sister. (Associated Press | Reuters | Washington Post | Deutsche Welle).

There are more two-star ratings: AFP and Bloomberg are the latest outlets with pieces on attendees griping about “scarce drinking water, USD 15 sandwiches and hotel price-gouging.”

ALSO ON OUR RADAR

M&A Watch: The Financial Regulatory Authority is examining a voluntary tender offer by Vodacom to acquire 0.05% of Vodafone Egypt for EUR 17.92 a share, it said in a statement (pdf) yesterday. The transaction would see the South African subsidiary acquire 124,600 shares in Vodafone Egypt for almost EUR 2.5 mn.

Vodacom is in the process of acquiring Vodafone’s majority stake in its Egypt unit: Earlier this year Vodafone Plc shareholders approved plans to sell its 55% stake in Vodafone Egypt to the South African company. Vodacom was said in late spring to be in the process of raising money to fund the transaction, which is yet to be approved by Egyptian regulators.

This Turkish company wants to invest in Egypt’s auto sector: Turkey’s largest industrial group, Koç Holding, is considering investing in Egypt’s automotive sector, the CEO of its subsidiary company, Arçelik, told Trade and Industry Minister Ahmed Samir during a meeting at COP27, the ministry said in a statement. The company is interested in producing vehicles in Egypt and manufacturing electric-vehicle chargers, Hakan Bulgurlu told the minister.

Arçelik is already investing more in Egypt: Arçelik is the parent of retailer Beko, which has spent USD 100 mn to build a new factory in Tenth of Ramadan City that will produce household appliances.

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

  • South Korea’s Doosan Enerbility was awarded a USD 1.2 bn contract from Korea Hydro and Nuclear Power (KHNP) to build a turbine island at the Dabaa nuclear plant. (Company statement)
  • The Communications Ministry signed an agreement with Honeywell Egypt to install smart technology in government buildings. (Cabinet statement)
  • Fawry subsidiary Fawry Microfinance has launched Tamweelak Fawry, an app for MSMEs to apply for loans. (Company statement, pdf)

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The fallout from the collapse of FTX continues to dominate the news flow in the business press: Once the world’s third-largest crypto exchange, FTX filed for bankruptcy over the weekend, and state investigators in the Bahamas are probing for signs of criminality. Analysts said that hundreds of mns of USD vanished from the exchange in the hours before its collapse, which was triggered after a report last week revealed a multi-bn USD hole in its balance sheet.

FTX users can kiss their deposits goodbye: Sources who viewed a limited copy of the balance sheet said FTX held USD 900 mn in liquid assets a day before it filed for bankruptcy against USD 9 bn in liabilities.

Maybe Magic Internet Money isn’t a store of value after all: Exchanges are scrambling to reassure their users that their money is safe as the implosion of FTX shakes investors’ faith in the stability of crypto firms. Binance and others have pledged to go public with their reserves to prove they do have enough liquidity on hand to meet withdrawals. And we’re not just talking about retail investors: the episode may be the death knell for crypto’s mainstream adoption in institutional portfolios, investors tell Bloomberg.

The story is everywhere in the business press: Reuters | Financial Times | Bloomberg | CNBC.

Up

EGX30

11,981

+1.9% (YTD: +0.3%)

Up

USD (CBE)

Buy 24.38

Sell 24.46

None

USD at CIB

Buy 24.39

Sell 24.44

None

Interest rates CBE

13.25% deposit

13.25% lending

Up

Tadawul

11,247

+0.3% (YTD: -0.3%)

Up

ADX

10,630

+0.1% (YTD: +25.2%)

Up

DFM

3,407

+0.7% (YTD: +6.6%)

Up

S&P 500

3,993

+0.9% (YTD: -16.2%)

Down

FTSE 100

7,318

-0.8% (YTD: -0.9%)

Up

Euro Stoxx 50

3,869

+0.6% (YTD: -10.7%)

Up

Brent crude

USD 95.99

+2.5%

Down

Natural gas (Nymex)

USD 5.88

-5.8%

Up

Gold

USD 1,769.40

+0.9%

Down

BTC

USD 16,323

-2.8% (YTD: -64.6%)

THE CLOSING BELL-

The EGX30 rose 1.9% at yesterday’s close on turnover of EGP 1.2 bn (7.4% above the 90-day average). International investors were net buyers. The index is up 0.3% YTD.

In the green: e-Finance (+6.4%), Fawry (+5.0%) and Egypt Kuwait Holding-EGP (+4.7%).

In the red: Rameda Pharma (-1.8%), Telecom Egypt (-1.4%) and QNB Al Ahli (-1.3%).

CALENDAR

NOVEMBER

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

13-22 November (Sunday-Tuesday): Cairo International Film Festival (CIFF).

15-16 November (Tuesday-Wednesday): G20 summit, Bali, Indonesia.

20 November (Sunday): House of Representatives is back in session.

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

22 November- 23 November (Tuesday-Wednesday): The Fingerprint Summit will be held at the Nile Ritz Carlton Hotel.

27-28 November (Thursday-Friday): The first edition of the Egypt Media Forum.

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

Late November or early December: US and Russia to hold talks on resuming mutual nuclear inspections in Cairo.

DECEMBER

1 December (Thursday): Sphinx International Airport will begin operating international flights.

1 December (Thursday): Contractors to break ground on Egypt-Saudi interconnection project.

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

5-8 December (Monday-Thursday): QS Reimagine Education Awards and Conference, multiple locations.

10 December (Saturday): The TriFactory’s Pyramids Half Marathon.

10-12 December (Saturday-Monday): The 2nd edition of the Nebu Expo for Gold and Jewelry kicks off.

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: Egyptian Automotive Summit.

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

December: Chinese President Xi Jinping visit to Saudi Arabia

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.

30 January-1 February (Monday-Wednesday): CI Capital’s Annual MENA Investor Conference 2023, Cairo, Egypt.

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.

23-27 February (Thursday-Monday): Annual Business Women of Egypt’s Women for Success conference.

MARCH 2023

March: 4Q2022 earnings season.

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

APRIL 2023

1 April (Saturday): Deadline for banks to establish sustainability unit.

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.

End of November: SFE’s pre-IPO fund to kick off roadshow.

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.

4Q 2022: Saudi Arabia’s Jamjoom Pharma to inaugurate its EGP 1 bn pharma factory in El Obour.

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.

1Q2023: Internal trade database to launch.

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