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Thursday, 11 November 2021

TONIGHT: Traders give thumbs up to new EGX tax cuts + El Sisi in Paris for Libya conference + our EV assembly plans with Dongfeng just hit a wall

We’ve come to the end of one busy week, ladies and gentlemen, where a number of major M&As, potential IPOs, major regulatory changes to the EGX and more are keeping us busy. Tomorrow is also the final day of COP26 where Egypt signed on to a number of climate change agreements and targets. Before we close out the week with today’s main headlines, we have updates…

MARKET WATCH- The market appears to have taken kindly to the package of EGX tax cuts and fee reductions the Madbouly cabinet rolled out yesterday, closing the trading day today up 0.8% after a mixed week. The EGX30 is now up 6.7% YTD.

What’s in the package, again? The new measures were unveiled in a bid to encourage trading on the bourse ahead of the introduction of the (so far not-popular) capital gains tax on resident investors at the beginning of next year. Investors are set to pay reduced trading and clearance fees, all of which will be tax-deductible, while taxes on share swap transactions will be slashed by more than half and new measures will be put in place to mitigate the tax implications of capital increases, among a raft of other incentives.

Further afield, Anghami now has until 11 February, 2022 to pull the trigger on its merger with blank-check firm Vistas Media Acquisition Company and list on the Nasdaq, after Vistas’ sponsor made a USD 1 mn extension payment, according to an SEC filing. This is the second time the streaming platform’s SPAC merger deadline has been extended, after the company previously pushed the deadline from August.

Tuk-tuk parts import ban is now the law of the land: The import ban on basic components for the local assembly of tuk-tuks came into effect today, as Trade Minister Nevine Gamea’s decision was published in the Official Gazette (pdf). Local auto player GB Auto, whose larger motorcycles and three-wheelers segment made up roughly 16% of its revenue, told us that they have seen the writing on the wall and are actively exploring alternatives. You can catch the highlights of what they told us here.

THE BIG STORIES TODAY

Our EV assembly plans with Dongfeng just hit a wall: Talks with China’s Dongfeng to locally assemble its E70 electric vehicles have come to a halt due to an import pricing dispute with the automaker, as per a Public Enterprises Ministry statement (pdf) today. State-owned El Nasr Automotive had signed an agreement with Dongfeng in January to locally assemble electric vehicles in El Nasr’s factory through one of the Chinese group’s subsidiaries. Dongfeng and El Nasr were unable to agree on a suitable price point for imported materials, causing negotiations to falter, the ministry said.

El Nasr is currently seeking out another partner for the project, and is expected to reach a decision before the end of November, the statement says.

Another EV missed chance? Egypt did not sign on to a new COP26 agreement between 24 governments and leading car manufacturers committing them to selling only zero-emission new vehicles by 2040 “or earlier.” Some of the world’s largest auto players and biggest markets were also strikingly absent from the agreement, notes the FT. These include China, the US and Germany, and four out of the five largest global carmakers — Volkswagen, Toyota, the Renault-Nissan alliance, and Hyundai-Kia.

Our regional auto rivals, including Morocco and Turkey, were among the nine EMs committed to accelerating the adoption of zero-emission vehicles. Just saying, it’s not a good look.


Naguib Sawiris is having a press field day, talking about everything from his outlook on Egypt’s gold prospects and “green” mining to BTC, Ora Developers’ expansion and a possible exit from Euronews. Key takeaways so far: Sawiris is looking to diversify his La Mancha gold fund to also look at battery materials (such as nickel and lithium), run his gold concession sites on solar energy and set Ora Developers on a USD 1 bn path to expand in Africa.

^^ We’ll have these stories and more in Sunday’s edition of EnterpriseAM.

HAPPENING NOW- President Abdel Fattah El Sisi is in Paris ahead of tomorrow’s conference on Libya, where he’s set to chat with French President Emmanuel Macron, according to an Ittihadiya statement. The UN-sponsored conference will be paving way for Libya’s planned elections on December 24. El Sisi spoke with the chair of Libya’s presidential council Mohamed El Menfi earlier this week ahead of the conference, which is meant to lay the groundwork for next month’s crucial presidential elections. El Sisi is also scheduled to hold meetings with senior French officials to discuss economic, commercial, investment and security cooperation, says the statement.

OBITUARYIconic Egyptian painter Gazbia Sirry died last night at the age of 96. Sirry, who was a professor at Helwan University’s Faculty of Arts and at AUC, led a 50-year career in art that was featured paintings characterized by strong female unity, polygamy and fertility and the reproductive power of women.

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

  • Saudi’s Brmaja could debut on the EGX as it eyes a new home base in Cairo: Saudi tech firm Brmaja is looking to list 20% of its shares on the EGX next March, as part of its plan to go through a series of acquisitions that will make Egypt its central hub before the end of 1H2022.
  • Annual inflation cools from 20-month high: Annual urban inflation fell back from its 20-month high to 6.3% in October as the rate of increase in food prices dipped from the month prior.
  • More sectors angling for private sector minimum wage exemption: Business leaders want to exempt companies in eight more sectors from complying with the new private sector minimum wage, which will take effect at the beginning of 2022.

THE BIG STORY ABROAD- Topping headlines abroad today is the story of migrants stranded on the Polish-Belarus border clashing with Polish border guards overnight, reports Reuters. The EU, which had already imposed sanctions on Russian-backed Belarus president Alexander Lukashenko in response to his crackdown on protests, has threatened additional sanctions against Belarus in response to the latest outbreak of violence at the border.

OVER TO COP26- In a surprise turnaround, China and the US have agreed to increase climate collaboration, reduce emissions and better meet the goals of the 2015 Paris Agreement, climate envoys Xie Zhenhua and John Kerry announced at COP26 news conferences yesterday. China also committed for the first time to reduce the greenhouse gas methane. With tensions having recently ratcheted up between the two countries on issues like trade and human rights, this new agreement marks a major step forward, says AP, quoting an expert on US-China climate talks.

As usual, the joint agreement was short on specifics — with no timeframe given from China on when it would bring down emissions or phase out coal, the New York Times notes.

How credible are all the COP26 “net zero” plans, really? Private sector buy-in is crucial to cut emissions and reduce global heating, leaders have reiterated at COP26. But critics — including environmental activists and regulators — tell the Financial Times that many companies’ emission-cutting pledges won’t force the drastic, immediate behavior change or accountability needed to actually avert climate disaster.

Corporate greenwashing can actually reduce government momentum to enact badly-needed policy interventions. For both business and political leaders in Glasgow, “their main goal at COP is to emerge as undisrupted as possible,” says alternative protein start-up Impossible Foods founder Pat Brown. And in some cases, big business is actively engaged in lobbying for causes that undermine the climate action they claim to want to see, says Austin Whitman, CEO of Climate Neutral, a NGO that helps brands cut their emissions.

Tomorrow is the final day of the marathon COP26 summit.

📅 CIRCLE YOUR CALENDAR-

The two-day Africa Fintech summit kicks off next Tuesday, 16 November. The summit looks at innovation in the fintech ecosystem, venture capital and other forms of investing, and will also discuss the rise of healthtech.

Calling all Egyptian entrepreneurs aged 23-35: You have exactly two weeks to apply for the acceleration exchange program Meet Silicon Valley for a chance to travel to California for a 10-day program to meet with tech executives and investors. The program is being implemented by Injaz Egypt and TechWadi with the support of the US Embassy in Egypt, and the deadline for applications is 23 November.

☀️ TOMORROW’S WEATHER- We’re looking at a comfortably warm weekend, with a daytime high of 25°C and nighttime low of 17°C tomorrow. The mercury will inch back up to 28°C on a sunny Saturday before cooling off to 18°C in the evening, our favorite weather app tells us.

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