What we’re tracking on 2 February 2020
The business community is mourning Khaled Bichara, who tragically passed away on Friday in a car accident on the Ring Road near El Remaya Square. Bichara was an iconic startup founder who went on to become CEO of Orascom Development Holding and co-founder and CEO of tech-focused investment firm Accelero Capital.
Bichara, 48, kicked off a storied career when he founded internet service provider Link Company a few years after graduating from AUC with a BSc in computer science. The company launched MSN Arabia in partnership with Microsoft at a time when “web portals” were cutting edge and went on the first tech-flavoured M&A rollup in Egypt before later becoming Mobinil’s ADSL arm.
A fixture in the Orascom empire and close associate of Naguib Sawiris, Bichara went on to lead the fixed line and portal business unit at Italy’s at Wind Telecomunicazioni, a subsidiary company of Sawiris’ Wind Telecom, where he later served as COO. Bichara was later CEO of Orascom Telecom and helped lead the USD 6.6 bn merger of Wind and VimpelCom, which created what was at the time the world’s fifth-largest mobile operator with some 174 mn subscribers.
Members of the community wishing to pay their respects may do so at a funeral service scheduled for tomorrow (Monday) at St. Mark’s Cathedral, Heliopolis, at 12pm CLT. The family will receive condolences on the same day at the Virgin Mary Church, Zamalek, from 6pm CLT. He is survived by his wife Marianne and sons Sherif and Galal.
International stories dominate the headlines this morning, with news of a GERD agreement between Cairo and Addis Ababa, the global spread of a novel coronavirus and The Donald’s latest on the Israel-Palestine conflict dominating headlines. We have the rundown on all three stories in this morning’s Speed Round, below.
Investors’ federation to meet Maait this week to lobby for tax changes: Top representatives from the the Egyptian Federation of Investors Associations will be sitting down with Finance Minister Mohamed Maait this week to air their grievances about the country’s tax system, which is expected to be getting a face-lift soon with a new income tax law. The federation is looking to abolish real estate taxes on industrial land, which businesses have for years been lobbying for, as well as ending the practice of freezing investor bank accounts for late tax payments. The investors will also bring up the 0.25% levy on company toplines to fund the government’s new universal healthcare system. Members of the association say the fee should only be paid by businesses operating in governorates where the system has been rolled out.
News triggers to keep your eye on over the coming weeks:
- The purchasing managers’ index for Egypt, Saudi Arabia and the UAE is due out this Tuesday 4 February;
- Foreign reserves figures for January will be released on Tuesday 4 February;
- Inflation figures for January are out next Monday, 10 February;
- Look for plenty of international interest at the Egypt Petroleum Show, running 11-13 February;
- The CBE will meet on Thursday, 20 February to discuss interest rates.
DEBT WATCH- Yields on short-term bonds rise: Yields on short-term government debt rose slightly during an auction on Thursday, according to CBE data. A EGP 10 bn tranche of 6-month bonds generated an average yield of 14.496%, up from 14.335% earlier last week. A second EGP 10.5 bn issuance of 12-month bonds had an average yield of 14.28%, up from 13.737% during an auction on 21 January.
Oh and … it’s Groundhog Day, meaning we have lots more winter in store if some overgrown rat somewhere sees its shadow. Still, it’s an excuse to direct our readers to the Bill Murray classic — thank us later if you haven’t seen it (catch the trailer here, runtime: 2:39).
The UK finally leaves the EU (sort of): The UK has officially separated from the European Union after 47 years of membership and more than three years since the Brexit referendum, the BBC reports. The country will continue to follow EU rules while it negotiates a bilateral trade agreement, which the government claims could be finalized by the end of this year. Brexit would see the UK abandon a trade pact that saw Egypt and the European Union ease trade barriers on agricultural and manufactured products.
Egypt’s trade councils are pushing trade officials to speed up talks with UK officials to ink a post-Brexit agreement to replace the EU-linked pact before the year is out, head of the Textile Export Council Magdy Tolba said. The officials began early talks in late 2018 over a new agreement, at which time the UK was said to be looking to negotiate terms similar to those in the EU pact. Egypt has been angling for terms that would increase exports.
Desperate for foreign currency, Lebanese banks are dumping gov’t bonds: Lebanon’s March Eurobond sank to record lows last week as local banks sold sovereign debt to overseas investors amid a race for foreign currency, the Financial Times reports. The USD 1.2 bn Eurobond due on 9 March has fallen 5 cents to 77 cents on the USD as fears grow that the government may default on its repayments. Analysts are now concerned that the government will face harsh restructuring terms imposed by the new foreign holders of Lebanese debt, and lose its ability to work with local banks to ease its debt burden.
In international miscellany:
- Trump on verge of impeachment acquittal: Republicans look to have secured President Donald Trump a swift acquittal from his impeachment trial after the senate narrowly voted to block witness testimony, the New York Times reports. A final vote is scheduled to take place on Wednesday.
- The US ramps up its travel ban: The Trump administration has added Nigeria, Eritrea, Kyrgyzstan, Myanmar, Tanzania, and Sudan to its travel ban, preventing citizens from these countries from applying for immigration visas, Reuters reports. US security officials said the governments had failed to comply with US information-sharing and security requirements. Nationals from Nigeria, Eritrea, Kyrgyzstan, Myanmar will still be able to apply for temporary visas for tourists, business travelers, students, and workers.
PSA- WhatsApp is no longer working on smartphones using legacy operating systems, including Android 2.3.7, iPhone iOS 8, and all older systems, the BBC reports. WhatsApp has said the move is necessary to ensure user security. Most users have no need to worry: Simply updating your operating system should mean you can continue using the service. But iPhone 4 users face a challenge, as their phones only support the iOS 7 system.