Tuesday, 30 March 2021

What we’re tracking on 30 March 2021

The torrent of news continues, everyone, at home and abroad as we speed toward the end of the first quarter. (And, incidentally, as we have exactly 14 days left until the start of Ramadan.)

THE BIG STORY AT HOME as we head toward the end of the workday: The investigation into what caused the Ever Given to wedge itself across the Suez Canal. President Abdel Fattah El Sisi paid a visit to the Suez Canal Authority this morning following the refloating of the Ever Given, Ittihadiya said. The visit comes as an investigation has begun into what exactly caused the giant ship to choke one of the world’s most important waterways. We have chapter and verse on the ongoing probe — which could potentially lead to an endless flow of ins. claims and lawsuits — in the news well, below.

The House will decide today when they will question Information Minister Osama Heikal about his use of public funds. The minister was censured by MPs in February over the ministry’s slow progress on major projects, as well as several public comments they say were “exploited by foreign media.” To be clear: The questioning is about efficiency, not corruption. MPs are not alleging that Heikal misappropriated funds or used them for his personal benefit.

CATCH UP QUICK on the top stories from this morning’s issue of EnterpriseAM:

  • CI Capital has priced the IPO of multi-brand higher education player Taaleem Management Services at EGP 5.75 per share.
  • Consumer healthcare giant IDH is kicking off its roadshow this afternoon in support of its local listing on the Egyptian Exchange, CEO Dr. Hend El Sherbini tells us. The transaction will see existing shareholders transfer at least 5% of the company’s shares to the EGX.
  • The Suez Canal has reopened and at least 113 container ships are traveling in both directions now that the MV Ever Given has been unstuck. The vessel is sitting in the Great Bitter Lake as an investigation continues into what caused it to wedge itself across the canal.

THE BIG STORY ABROAD is the still-smouldering crater caused by a forced sale foist upon Bill Hwang’s Archegos Capital Management, the family office that Bulge Bracket banks pushed into a fire sale of some USD 19 bn worth of equities that shaved USD 33 bn off the companies involved.

Okay, so what really happened? Archegos is said to have bought derivatives called “total return swaps,” which Reuters explains “allow investors to [wager which way shares are moving] without owning the underlying securities. Archegos had assets of around USD 10 bn, but held positions worth more than USD 50 bn,” it says. Its trading partners forced it to sell off assets (to cover their own risk) when the derivatives moved against Archegos.

Why does the story have legs? Some Bulge Bracket banks are going to take a hit.

Why should you care here in Egypt? The bears are hoping this is the big one. Let’s unpack it:

Some Bulge Bracket biggies dodged losses, while others took it behind the ear, the FT reports, saying that, “before the troubles at the family office burst into public view at the end of the week, representatives from its trading partners Goldman Sachs, Morgan Stanley, Credit Suisse, UBS and Nomura held a meeting with Archegos to discuss an orderly wind-down of troubled trades.”

Who got whacked? Reuters claims that Credit Suisse and Nomura will take the worst hits. Goldman Sachs and Morgan Stanley got out of the firing line really quickly, according to the FT. The WSJ also has the story.

Is this the trigger of a global correction in equities? Talk of risk is in the air as investors and the press get their heads around “highly leveraged” Archegos’ “downfall,” Reuters notes in an opinion piece that openly wondering whether this gets us one step closer to the something that will put a smile on the face of the bears among us.

Also happening in global markets:

Long-term US borrowing costs have hit new record highs, with the 10-year Treasury yield reaching 1.77% this morning, its highest level since January 2020, reports the Financial Times. Investors dumped more government bonds amid a burst of economic optimism on the back of a vaccine recovery and government stimulus package, fueling expectations of high inflation and lower bond prices.

The rally in treasuries will continue putting pressure on EM bonds, making it more expensive for sovereigns to borrow and making EM debt less attractive as developed markets pay increasing returns to lenders. Tap / click here for our recent look into what it means for Egypt and the rest of the EM-verse.

China to give EMs a pick-me-up this week? PMI data from China due tomorrow could buoy EMs from their slump last week, as manufacturing and non-manufacturing industries are expected to show a strong rebound, Bloomberg reports. EM equities entered their longest losing streak in six months last week under pressure from rising US bond yields and a strengthening greenback, but the pullback is encouraging investors to look for bargains in some emerging economies and strong data from the world’s second-largest economy tomorrow will raise expectations of a faster global recovery, analysts tell the business news information service.

FOR TOMORROW- The Egyptian-Croatian Business Forum meets tomorrow for the first time since 2010. On the table: Giving a nudge to both trade and investment, a FEDCOC statement says. Croatian Foreign Minister Gordan Grlić-Radman and Foreign Minister Sameh Shoukry are expected to attend.

🗓 CIRCLE YOUR CALENDAR-

The HVAC-R Egypt Expo will run Thursday through Saturday at the Egypt International Exhibition Center in New Cairo. The fifth annual expo for heating, ventilation, air conditioning, refrigeration, and energy and brings together more than 170 national and international operators with different suppliers.

The National Museum of Egyptian Civilization will open on Saturday, 3 April, in El Fustat. Local and international visitors alike will pay less for admission for the first two weeks to explore the museum’s central hall, according to a cabinet statement. Meanwhile, the Royal Mummies Hall will be ready for visitors starting 18 April.

The Mohamed Mahmoud Khalil Museum will reopen after 10 years of closure on Sunday, 4 April, according to a statement (pdf) by the Culture Ministry. The museum is located in Mohamed Mahmoud Khalil’s palace built in the early 20th century and houses the family’s expansive collection of masterpieces by great artists such as Paul Gauguin, Auguste Renoir, Vincent van Gogh, Claude Monet, John Jongkind and Charles Francois Daubigny.

The Spring Meetings of the IMF and the World Bank Group are set to take place from 5-11 April. This year’s virtual meetings will bring together central bankers, ministers of finance and development, private sector executives, representatives from civil society organizations and academics. The topics up for discussion include the world economic outlook, poverty eradication, economic development, aid effectiveness, and the global financial system. Some events will be open to the public and can be streamed live from the World Bank’s platform.

The Spring Flowers Exhibit (Ma3rad El Zohoor) is currently taking place at Orman Botanical Garden in Giza. More than 200 exhibitors have set up shop to sell flowers, plants, agricultural products, and gardening equipment. The exhibit runs through 13 April.

🚙 FOR YOUR COMMUTE-

Say bye-bye to jobs in Amazon “fulfillment centers”? US robotics company Boston Dynamics unveiled a new single-purpose robot designed to move boxes at warehouses, Reuters reports. Stretch is equipped with smart-grips, an extendable arm, and advanced vision and sensing capabilities.

Deliveroo has cut the target share price range for its IPO in London following investors’ concern over its shareholder structure and workers’ rights, CNBC reports, slashing up to GBP 1 bn from its post-IPO market cap. The company said the decision was a reaction to market conditions after a series of tech IPOs last week priced in the bottom third of their ranges. The announcement came after some of the UK’s largest fund managers raised doubts about how the company treats its couriers as well as concerns over CEO Will Shu’s over 50% voting rights.

PayPal has launched a crypto checkout service allowing US users to use crypto to pay online merchants globally, a new service that could significantly boost use of digital assets in everyday commerce, writes Reuters. The checkout will convert Bitcoin and other cryptos into fiat currencies and will be applicable for all 29 mn of its vendors in the coming months. PayPal’s announcement comes a day after Visa said it would support payments in USD Coin as part of a pilot program with payment platform Crypto.com.

Turkey has appointed Morgan Stanley executive Mustafa Duman as deputy governor to the country’s central bank, the latest in a shake-up at the monetary authority, reports Bloomberg. Duman is replacing Murat Cetinkaya, who was sacked last week by Turkish President Recep Tayyip Erdogan, the third such move in less than two years, shocking investors and sending the currency tumbling 15%. The lira has fallen an additional 0.6% since the replacement was announced, reports Business Recorder.

📺 ON THE TUBE TONIGHT-

The Boys on Amazon Prime is a two-season twist on usual superhero TV shows, depicting a group of vigilantes out on a quest to expose Vought International, a multi-mn corporation that markets and monetizes heroes. However, outside of their heroic personas, most of the heroes in the corporation are going rogue and abusing their powers ― with Vaughn International helping with the cover up. In the most realistic visualization of what could happen if people get superpowers (lots of corruption), you get to know the eclectic and hilarious Billy Butcher and his team who are trying to keep superheroes in check and protect the non-super humans. Rotten Tomatoes crowned The Boys as the top-rated superhero show of 2020, awarding the series its Golden Tomato award.

⚽️ It’s a really big day for football: Eighteen matches across three continents are ongoing today in the FIFA World Cup Qatar 2022 qualifiers. Among those to look out for at 8:45pm: Luxembourg will play versus Portugal, Belgium kicks off against Belarus and Gibraltar will take on the Netherlands.

FOOTBALL UPDATE- Egypt qualified for the 2021 African Cup of Nations (Afcon) after beating Comoros 4-0 yesterday, putting them at the top of Group G. (See On Your Way Out, below, for more.)

Today is the last day of the Afcon qualifiers, with Ivory Coast currently on the field with Ethiopia. Other matches to note include Nigeria playing against Lesotho at 6pm, Cameroon against Rwanda at 9pm and Morocco against Burundi at 9pm.

🥐 EAT THIS TONIGHT-

Eat seafood everything at Maine: After winning over stomachs with their rolls and buns, Maine is putting seafood sandwiches on our list of gastroporn loves. We love their avocado chimichurri shrimp roll, wasabi crab roll, and angus and shrimp burger. They also have burgers that don’t have seafood in case a friend tagged along that’s not a fan of all things from the sea (we all have them). Also worth trying: Lots of different mac and cheese combos. You can find Maine at The Drive by The Waterway on the Ring Road near New Cairo. Bonus points: While lobster rolls are absent from the menu (think of the cost…) their shrimp roll is on the closest approximation we’ve seen to a proper New England / Maritimes hot dog bun.

🎤 OUT AND ABOUT-

The second session of RDNA Salon: Economy of Love is taking place today at 6:30 at KMT House in Maadi. The series is exploring how we can create a global commercial system that allows us to care for each other, the planet and meet everyone’s needs.

The Sinatras are performing at 9pm tonight at The Room Art Space in New Cairo alongside Farida Tamer.

💡 UNDER THE LAMPLIGHT-

A guide to building an “unshakeable” corporate culture: Kevin Oakes, head of HR research firm the Institute for Corporate Productivity (i4cp), has put his ideas and insights onto the page, writing the newly released Culture Renovation: 18 Leadership Actions to Build an Unshakeable Company. Oakes identifies actions management can take to turn any culture into an agile, resilient, and innovative high-performance organization all while setting a new cultural path for decades to come.


🌤 TOMORROW’S WEATHER- It’s a windy day tomorrow. Expect daytime highs of 22°C and nighttime lows of 11°C tomorrow amidst high winds, our favorite weather app tells us.

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.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.