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Sunday, 16 January 2022

THIS MORNING: Banks given green light to lend via mobile wallets; Pandemic vs. Endemic; US-Russia tensions rise

Good morning, wonderful people, and welcome to what’s shaping up to be a very busy news week. Let’s jump right in:

The Central Bank of Egypt will allow banks to launch digital lending services via mobile wallets this year, the bank announced in its financial stability report (pdf). The regulations on the decision, which will allow loans to be approved immediately with reliance in part on an online credit rating, were issued in April last year. The rules are part of the CBE’s drive to improve financial inclusion.

PSA #1- It’s going to be another cold week: Temperatures will remain low across the country and there could be moderate rainfall today and tomorrow from Cairo through the Delta and along the North Coast. Expect winds to be elevated all week. In the capital, look for daytime highs of 15-17°C and overnight lows of 8-9° this week.

PSA #2- First, every Egyptian guy of a certain age had to say he was reading Yuval Harari’s Sapiens. Then it was investor Ray Dalio’s Principles. Is Dalio’s follow-on book, Principles for Dealing with the Changing World Order, up next? It’s flooding our social media.

ALSO- The Financial Times would like you to understand how the world got hooked on Wordle. If you haven’t yet played the fun / frustrating once-per-day word game, try it out here.

There are plenty of BIG STORIES ABROAD that you need to know about on this chilly midwinter morning. Among them:

US-Russia tensions over Ukraine spiral after high-stakes talks collapse: Officials from all sides of the battle for Ukraine’s future are openly warning of conflict in Europe after last week’s talks failed to overcome differences between the US and Russia. Moscow declined to pull back its troops deployed on the Ukrainian border, while Washington and Europe have refused to discuss ending Nato expansion, a red line for Russian president Vladimir Putin. The AP and Reuters have more.

Rhetoric is hardening and tensions are rising on the ground: The White House over the weekend accused Moscow of planning a false-flag attack in Ukraine, a day after Kiev was hit by a cyberattack.

The US is preparing for the worst and is drawing up contingency plans with several energy companies over supplying gas to Europe in the event that conflict hits Russian supplies to the continent, Reuters reports. European gas prices jumped on Friday after the breakdown in talks, with the benchmark European gas contract climbing almost 25% to reach EUR 90 per megawatt hour.

Also worth noting this morning:

  • El Sisi calls for dialogue in Sudan: President Abdel Fattah El Sisi has urged dialogue in Sudan to end the political deadlock as demonstrators continue to protest against the military coup that overthrew the civilian leaders in October, the Associated Press reports.
  • COP26 president Alok Sharma has pledged to give the UK’s “full support” to Egypt during talks with Foreign Minister Sameh Shoukry, as the country gears up to host the COP27 climate conference in November. (Joint Statement)
  • GSK rejects Unilever’s USD 50 mn offer for Pfizer JV: GlaxoSmithKline has turned down Unilever’s USD 50 mn bid for GSK’s consumer healthcare JV with Pfizer, calling the offer “fundamentally undervalued.” (Financial Times | Bloomberg)

When does covid stop being a pandemic and start being endemic? This is the debate currently playing out among scientists across the world and in the global media. Last week Team Endemic was all over the front pages, arguing that the omicron variant represents the end-game for covid as a deadly virus and the beginning of its transition into a more benign illness easily fought off by a more immune population.

This morning we’re seeing the counterpoint, with the Associated Press and newspapers including the Washington Post relaying the thoughts of some epidemiologists who warn that the virus could continue to evolve into more transmissible, more harmful variants. “People have wondered whether the virus will evolve to mildness. But there’s no particular reason for it to do so,” one disease expert told the AP. “I don’t think we can be confident that the virus will become less lethal over time.”

^^ Expect to see this debate pick up steam in the weeks and months ahead as health authorities deliberate policy responses to the virus, post-omicron.


The Senate is holding plenary sessions today and tomorrow to finish discussing a bill that would create a new Labor Act, to which it gave a preliminary thumbs up earlier this month, Al Borsa reports. The Senate will then pass the legislation back to the House of Representatives for final approval. If passed, the bill would dictate how employees can be dismissed, making it harder for employers to fire staff for illnesses but allowing workers to lose their jobs if convicted of a felony. The bill would also set a minimum annual raise requirement equal to 3% of the amount covered by social ins, according to local media. It is unclear to us where the dividing line is between the private and public sectors as regards the amendments.

SODIC shareholders will vote on the company’s new board of directors at an extraordinary general meeting today. The formation of the new board comes after an Emirati consortium of real estate giant Aldar Properties and Abu Dhabi sovereign wealth fund ADQ in December acquired 85.5% of SODIC in an EGP 6.1 bn all-cash transaction.

PSA #3- Today is the last chance for property and land owners to make good on overdue real estate dues without facing late fees, so long as they pay the full overdue amount, Housing Minister Assem El Gazzar said in a statement.


Wall Street earnings season kicks off: Did banks peak in 2021? Bulge bracket stalwart JPMorgan Chase reported record net income for the year on a larger number of transactions, according to its earnings release (pdf) — but warnings from the bank’s CFO of a rocky few years ahead sent its shares down by over 5% on Friday, the Financial Times reported. Citigroup’s net income doubled (pdf) from the year before, but weak fourth-quarter earnings also saw the bank’s shares slide more than 1% on the announcement, according to CNBC.

What’s next: On the banking front, Goldman Sachs reports on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday. Tech firms will start reporting by midweek, with Intel up on Wednesday and Netflix publishing its results on Thursday. We’ll get our first glimpse of how the US airline industry weathered omicron disruption when United Airlines reports on Wednesday.

AFCON 2021: Mohamed Salah was the difference in the Pharaoh’s match last night with Guinea-Bissau, with Egypt closing out the engagement 1-0 to claim a vital victory that keeps our hope of qualification alive. Salah volleyed the Pharaohs into the lead in the 68th minute, latching onto a chipped cross to bag his first goal in six appearances for the national team.

Elsewhere in the group: After beating Egypt in the opening game of the tournament, Nigeria sealed qualification to the next round after seeing off Sudan 3-1, leaving our southern neighbor bottom of the group.

The pathway out of the group: The top two teams in each group are automatically sent through to the knockout stage of the competition, meaning that Egypt need to beat Sudan when they meet on Wednesday in order to guarantee a place in the next round. Should Guinea-Bissau beat Nigeria and Egypt draw or lose to Sudan, the Pharaohs still have a possibility of going through, courtesy of rules that see the four highest-ranked third-placed teams progress.


The World Art Forum is ongoing at Cairo’s National Museum of Egyptian Civilization until Wednesday, 19 January. The inaugural edition of the forum, which kicked off yesterday, will see artists from around the world participating.

National flag carrier EgyptAir will operate a flight from Casablanca to Cairo this Wednesday, 19 January, to bring home Egyptian expats stranded in Morocco following border closures.

South Korean President Moon Jae-in is due in town from 20-21 January on an official visit, during which he will meet President Abdel Fattah El Sisi.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.


*** It’s What’s Next day: We have our weekly deep-dive into what makes and shapes pre-listed companies and startups in Egypt, the UAE and KSA, touching on investment trends, future sector insights and growth journeys.

In today’s issue: After looking at the trends that drove the conversation in Planet Startup last year (here and here), we’re looking at What’s Next for up-and-coming businesses this year. In a nutshell, it’s more of the same: More funding, more international players, more exits, more M&A, and more fintech.

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 HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; 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; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.