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Sunday, 6 June 2021

THIS MORNING: G7 agrees global corporate tax pact; USD 34 bn healthcare LBO in the US; Thanaweya Amma details announced.

Good morning, wonderful people, and welcome to the first full workweek of June. We have a busy news morning for you as the nation looks forward to the start of the summer tourism season — and to next week’s meeting of the central bank’s monetary policy committee.

THE BIG STORY INTERNATIONALLY- The G7 backed an agreement for a minimum global corporate tax rate of 15% that would oblige large corporations to pay tax in every country they operate in, according to a G7 statement. The aim is to block large firms from dodging tax by booking profits in low-tax jurisdictions, making tax havens a thing of the past. The agreement could generate hundreds of bns of USD for governments.

Just because the G7 thinks it’s a good idea doesn’t mean it’s done: Look for more talks to take place at the G20 meeting in July.

Wait, but what about FAANG? The big five tech companies (Facebook, Amazon, Apple, Netflix and Google) are not being hit with an explicit digital services tax just yet, though the new agreement is expected to lengthen their tax bills by virtue of their size, Bloomberg reports. Technical details on how exactly tech companies could be taxed are expected to be on the G-20’s agenda this summer.

The global business press don’t have many negative things to say about the news: The Financial Times calls it “an historic agreement,” Bloomberg a “landmark [pact],” and CNBC a “a significant development in global taxation.”

Other international stories that should probably be on your radar:

  • A mega LBO stateside: A consortium of private equity firms will purchase a majority stake in medical supplier Medline Industries in a transaction that values the company at more than USD 30 bn, making it one of the biggest leveraged buyouts since the global financial crisis, the Wall Street Journal reported last night. The story is everywhere this morning, from the Financial Times to CNBC.
  • Google plans to make it harder for advertisers to track Android users, following a move by rival Apple, which recently strengthened privacy protections in response to increasing consumer concerns over how tech companies use our data, CNBC reports. Users will be able to opt out of sharing their “Advertising ID” when the change comes into effect later this year.
  • The Donald is off El Face for two years, the company said in a statement.

***CATCH UP QUICK with the top stories from Thursday’s edition of EnterprisePM:

  • PMI outlook brightens, but the gauge remained in contraction territory last month: The PMI rose to 48.6 in May from 47.7 in April, remaining below the 50.0 mark which separates expansion from contraction, due to a drop in output and new business.
  • Juhayna won’t yet confirm it’s in talks to sell a stake to ADQ: Juhayna said it had yet to receive an official offer from ADQ, following a Bloomberg report that claimed the Abu Dhabi wealth fund was looking to snap up a stake in the dairy producer.
  • Saudi industrial oils giant Petromin wants a stake in Wataniya Petroleum: The company threw its hat in the ring along with TAQA Arabia, Emirates National Oil Company, and a consortium of ADQ and Abu Dhabi National Oil Company (Adnoc) for a majority stake in the army-owned gas stations operator.

HAPPENING THIS WEEK-

French Finance Minister Bruno Le Maire is expected to visit Cairo shortly, French Ambassador Stéphane Romatet tells Enterprise. Le Maire’s visit comes after discussions about potential investments in transport, energy, water management and healthcare projects in Egypt with President Abdel Fatah El Sisi during Sisi’s mid-May visit to Paris, and less than a month since the two countries concluded a multi-bn USD arms sale that will see Egypt buy 30 Rafale fighter jets. Le Maire had been scheduled to visit Egypt in February.

We’ll be sitting down with Ambassador Romatet to discuss France’s support for Egypt’s green economy in this week’s Going Green, on Tuesday.

The House of Representatives will begin discussing the Sovereign Sukuk Act during today’s plenary session, according to the House agenda. The bill, which would pave the way for the government to begin issuing sharia-compliant bonds, received approval from the House Economic Committee last month.

May inflation data will be released this week.

Benjamin Netanyahu’s fate is going to be decided over the next week: The motley crew of political parties bidding to unseat Israeli PM Benjamin Netanyau has a week to gather parliamentary support ahead of a vote of confidence likely to take place on 14 June, the Times of Israel reports. A loose coalition of ultra-nationalists, liberals and Islamists struck a last-minute agreement to form a government last week, which would hand far-right settler Naftali Bennett and liberal leader Yair Lapid the keys to the prime minister’s office.

CIRCLE YOUR CALENDAR-

Interest rates: The Central Bank of Egypt will meet Thursday, 17 June to review rates.

The price of your smokes is going up next month: Prices of all cigarette brands will rise as much as EGP 0.50 as of 1 July, The rise comes under new ceilings on the taxable price brackets introduced two years ago to allow tobacco companies to increase prices without their brands moving into a higher bracket, Eastern Company CEO Hani Amani said in an interview on El Hekaya last night (watch, runtime: 4:47).

Thanaweya Amma exams will start on 10 July and continue through to 2 August, Education Minister Tarek Shawki announced yesterday. Students who have received tablets will be required to record their answers digitally and on paper in case of any technical malfunctions, and students without tablets will receive paper exams only. This year’s tests will be aimed at comprehension and understanding and will test students via multiple-choice bubble sheets, Shawki said, emphasizing the ministry’s shift away from rote memorization.

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