Rethinking office space

Sunday, 27 Aug 2023

Rethinking office space

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Today at a glance

The Big Story Today

Gov’t to launch oil exploration tender soon.

INSIDE INDUSTRY

Industrial stocks are mostly doing well — and match their financial performance.

FOR YOUR COMMUTE

Companies should probably rethink their office space.

ON THE TUBE TONIGHT

Idris Elba shows us how to perform under pressure in Hijack.

Sports

Keep up with the FIBA Basketball World Cup + Can ManCity do it?

Under the Lamplight

A playbook of investing advice for Gen Z — or the more clueless millennials.

WHAT WE’RE TRACKING TONIGHT

THIS EVENING: Gov’t to launch oil exploration tender soon

Happy Sunday, friends. It’s one of those surprisingly slow Sunday afternoons, but it’s still whizzing by as we recalibrate from what may (or may not) have been the last Sahel weekend of the season.

THE BIG STORY TODAY

New oil exploration bid round coming up soon? The Oil Ministry’s South Valley Egyptian Petroleum Holding Company (Ganope) is planning to kick off an international oil exploration bid round for at least 10 new concessions in the south, Al Mal reports, citing an unnamed government source.

THE BIG STORY ABROAD

China is leading the conversation in the international business news. The highlights:

The stamp duty on Chinese stock trades has decreased, along with slowing the tempo of IPOs among other moves to tempt investors back into its equities market. No details on how it would do so were given. (Bloomberg)
China’s rare earths could jeopardize US supply chains, as it highlights Beijing’s ability to easily dry out the flow of these elements that make up the components of mobile screens, micro chips and more. (CNBC)

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

Egypt is joining Brics next year: Egypt was among the six countries invited to join the bloc of emerging economies known as the Brics during the organization’s annual summit in South Africa last week. Capping three days of talks, the leaders of Brazil, Russia, India, China and South Africa announced an agreement on a framework for expanding the bloc and said six new members would join in 2024.
Hotel prices soar amid tourism spike: The prices of hotel and resort accommodation are expected to rise by at least 35% y-o-y in 2023, with a 30% increase forecast for 2024.
Italian firm to build and operate a the new Tenth of Ramadan dry port: Medlog, the cargo subsidiary of Italy’s Mediterranean Shipping Company(MSC), has inked a contract with the government to design, construct, operate, maintain, and finance the new Tenth of Ramadan dry port and logistics center.

CHECK OUT OUR AGENDA-

The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

This is our first two-day event,which should give us plenty of time to dive into the nitty gritty of this industry we love. Our panels will see CEOs, bankers, investors and founders gather to discuss the future and trends shaping banking, finance, fintech and NBFS.

Our full agenda will be out at month’s end. Among the topics we’ll be discussing:

Looking into the crystal ball: Top industry CEOs will join us on stage to answer tough questions on where we are as an industry, the forces that will shape all of our businesses going forward, and their views on dealflow in the year ahead.

Surviving nuclear winter: We discuss how private equity and venture capital players are tackling challenges including fundraising and deployment in an environment in which it’s awfully difficult to price your local asset in USD terms.
The robots are coming: We explore what the coming AI and big data means for the industry in our part of the world and what can bankers, NBFI, and fintech players do to capitalize on them.
What do you do when nobody wants to be a banker — and when those who are already (investment or commercial) bankers are either (a) dreaming of doing their own startup or (b) moving to Dubai (or, increasingly, Riyadh)? We go deep into the weeds with industry leaders on how they’re building talent for tomorrow.
NBFIs are a bubble. Prove me wrong: We chart the explosive rise of NBFIs and ask whether the industry is ready for a wave of consolidation. We’ll dive into whether consumer finance is starting to mature as a segment — and ask which sector is next.
What does 2024 hold in store for fintech: We dive deep into which categories are getting traction, which segments will account for the lion’s share of future growth, what business they would start today if they could, and what we can expect of the sector in the year ahead.
What’s a bank, anyway? Wherein we talk challenger and neobanks with the players looking to shake up the brick-and-mortar industry.

** NEW: MORE NETWORKING TIME- Our agenda includes expanded networking time, including an expanded coffee break and a post-event networking room for you to interact with your peers and speak one-on-one with the team at Enterprise.

STAY TUNED for more detail about our exciting agenda in the weeks to come.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial.

*** It’s Inside Industry day — your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

In today’s issue: Industrial companies’ share performances on the EGX30 on a year-to-date basis and in the past five months (since the beginning of 2Q 2023) are, for the most part, moving in the same direction as the gains reported in their earnings during the second quarter of the year. Three out of the four companies we’re looking at are in the green YTD, with the same companies reporting positive earnings in 2Q 2022.

☀️ TOMORROW’S WEATHER- The mercury will rise to a slightly less scorching 38°C at its peak in the daytime and drop to a cooler 24°C in the evening, our favorite weather app tells us.

Tags:

oil and gas WHAT WE’RE TRACKING TONIGHT

FOR YOUR COMMUTE

Companies should probably rethink their office space + China has been secretly working to cement its position in the global chip industry

Across the globe, over one third of office desks are unoccupied throughout the workweek, Bloomberg reports, citing a report by Australian workplace analytics platform XY Sense. A post-pandemic reassessment of office space needs suggests that a shift away from traditional desk-oriented setups to more flexible and collaborative office spaces would be most suitable to current conditions. The report points out that while meeting rooms and more open areas that invite contact and communication are usually 90% full, they only account for 20% of total floor space, leaving the lion’s share to individual unused workstations.

Fewer desks, more collaborative spaces: The shift towards a hybrid working environment has been the source of reevaluation for office space needs, and the lack of desk use has been driving employers to rethink the need for a physical office space altogether. More than half of the organizations polled in a survey by CBRE, an American commercial real estate firm, that they expect to reduce their real estate needs by 2026. The data seems to suggest that the issue isn’t the significance of physical office space, but how that space is utilized, encouraging employers to create environments that foster connection and accommodate the evolving needs of the workforce.

!_Insertline_!

Are you a scientist? China wants you to join its labor force to get around its chip industry restrictions: China has quietly revived its Thousand Talents Plan (TTP) to recruit foreign-trained scientists and engineers, as the US tightens restrictions on the exports of chips, according to three sources with knowledge of the matter and a Reuters review of over 500 government documents spanning 2019 to 2023. The program runs under a new name and format known as “High-End Foreign Experts Recruitment plan,” which offers generous financial perks, including bonuses of up to USD 700k and home purchase subsidies, the three sources told Reuters.

BACKGROUND: The TTP was launched in 2008 to attract top talent to help the country’s economy grow, Reuters reports. In 2018, the Chinese government suspended the TTP amid US investigations accusing it of stealing intellectual property and technology. Last year, the Biden administration cracked down on exports of semiconductors and advanced chips to China as they are becoming a critical role in both military systems and the data-processing capacities that fuel our modern global economic system.

Tags:

China FOR YOUR COMMUTE office life semiconductors

ENTERPRISE RECOMMENDS

Idris Elba shows us how to perform under pressure in Hijack

? ON THE TUBE TONIGHT-
(all times CLT)

Hijack : A thrilling new show starring our worst fear: During a flight from Dubai to London, the fates of some 200 passengers are unexpectedly threatened when a group of assailants announce they are taking over the aircraft. Lucky for everyone, Sam Nelson (Idris Elba) is a skilled business negotiator who will stop at nothing to return safely to his family. The seven-episode affair, filmed to follow the pace of the seven-hour flight in real-time, is exciting and builds suspense effectively. While it may not be what we realistically expect from a hijack, we like to think Elba can do anything. Besides, who are we to stand in his way as he attempts to single-handedly rescue tens of lives while showing evil people that what they’re doing is, in fact, not cool?

? We interrupt our regularly scheduled sports programming with a temporary guest with the FIBA Basketball World Cup, which kicked off on Friday and runs until 10 September. The pharaohs missed out on their chance to qualify past the group stage, after losing 67-93 against Lithuania on Friday (watch highlights, runtime: 3:06) and 74-89 against Montenegro today (watch highlights, runtime: 3:07). Egypt is currently in the third spot in its group — which includes Lithuania, Montenegro, and Mexico — with two points from the two losses.

Group stage matches are ongoing in Indonesia, the Philippines, and Japan, whose time zones are four, five, and six hours ahead of us, respectively. That means matches will be taking place in the morning and early afternoon, Cairo time. We’ll be bringing you the recap of each day’s matches, along with a preview of what to expect the following day.

On the schedule for tomorrow:

China v South Sudan (11am)
Venezuela v Cape Verde (11am)
New Zealand v Jordan (11:45am)
Cote d’Ivoire v Iran (12:45pm)
Georgia v Slovenia (2:30pm)
Puerto Rico v Serbia (3pm)
Greece v United States (3:40pm)
Brazil v Spain (4:30pm)

⚽ In the Premier League: Manchester City can lead the Premier League solely by defeating Sheffield United in the match that starts at 4pm today, making the club the only team to collect nine points from three matches so far. This comes after Arsenal’s draw and Brighton’s loss yesterday.

More matches to watch as the third week of the league concludes:

Burnley v Aston Villa (4pm)
Newcastle v Liverpool (6:30pm)

Matches to catch in the the European leagues:

Villarreal v Barcelona (La Liga, 6:30pm)
Bayern Munich v Augsburg (Bundesliga, 6:30pm)
Juventus v Bologna (Serie A, 7:30pm)
Napoli v Sassuolo (Serie A, 9:45pm)

? OUT AND ABOUT-
(all times CLT)

The Citadel Music and Singing Festival continues today and wraps up next Thursday, 7 September.The festival will be held at the Salah El Din Citadel with several acts lined up:

Hany Shaker will perform on Sunday, 27 August.
Hisham Abbas and Simone will perform on Monday, 28 August.
Mostafa Haggag will perform on Tuesday, 29 August.
Ali El Haggar will be performing on Thursday, 31 August.
Musician Hisham Kharma and the Tunsian singer Ghalia Benali will be performing on Sunday, 3 September.

After Dinner, or ‘ba’ad Al-a’sha’a’ is a performance by El Warsha Theatre groupin AUC Tahrir Square’s main garden tomorrow. Watch actor Hassan El-Geretly and his cast take you back in time to Cairo’s art scene in the 1920s. There tickets are on the house but seats are available on a first-come, first-serve basis.

Sonne, a film by Austrian-Kurdish Kurdin Ayubwill be screening in the Austrian Cultural Forum on Tuesday, 29 August starting from 7pm. The film discusses a Viennese teenager who wants to sing but has to face the challenges she faces from her muslim identity. Get your tickets by registering on this link.

Aziz Maraka x City Center Almaza. Jordanian singer Aziz Maraka will be performing at the opening of City Garage Hub at City Center Almaza Mall this Tuesday, 29 August. Tickets are available on Tazkarti.

El Morabba3 is coming to Egypt. Jordanian rockband El Morabba3 will be performing at two concerts, the first of which will be at the closing ceremony of the International Summer Festival at Bibliotheca Alexandrina this Friday, 1 September. The second will be at El Sawy Culturewheel on Sunday, 3 September. Tickets are available here for Bibliotheca Alexandrina and here for El Sawy CultureWheel.

DJs Kygo , Tiësto, Kungs and Frank Walker are performing on Saturday, 28 October at the Giza Pyramids. The concert will be part of the next edition of the four-day Palm Tree Music Festival (PTMF) which will be held from Thursday, 26 October until Sunday, 29 October.

Get your running shoes ready for the 2023 edition of the El Gouna Half Marathon, which is scheduled to take place on Saturday, 11 November. You can sign up for the marathon from here — and catch the lowest registration price with the early bird special which starts today and ends Saturday, 30 September.

? UNDER THE LAMPLIGHT-

The Simple Path to Wealth by JL Collins began as letters meant for his daughter and grew to a playbook to investing. Picture a financially successful business leader in their golden years trying to impart their wisdom as concisely as possible to their children who are about to come into money or want to build wealth. In the book, there is a focus on strong portfolio building and making proper investment choices in a simple, conversational manner. There’s plenty of advice on understanding and investing in the stock market, how the market always bounces back, and how to avoid losing on stocks.

Starting with the basics, Collins stresses on how crucial it is to understand money, as it is “the single most powerful tool we have for navigating this complex world we’ve created,” while offering life lessons and financial advice that can insure investment success in the long game. Collins also explains where and when traditional investing advice may not be as effective and provides valuable lessons he has learned along his path to wealth. It is important to note that the book provides interesting behavioral advice that may be useful for the young investor coming into the world of financial responsibility, but might not be an ideal read for a mature adult who has already taken on financial duties.

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GO WITH THE FLOW

What the markets are doing on 27 August, 2023

The EGX30 rose 1.7% at today’s close on turnover of EGP 2.1 bn (2.1% above the 90-day average). Regional investors were net sellers. The index is up 26.8% YTD.

In the green: Alexandria Containers and Cargo Handling (+5.6%), Credit Agricole (+4.0%) and E-Finance (+3.4%).

In the red: Heliopolis Housing (-0.7%), Palm Hills Development (-0.7%) and Abu Qir Fertilizers (-0.6%).

Tags:

EGX Go with the Flow

Our weekly look at the issues, trends, and policies that are shaping Egypt's manufacturing industries.

Published every Sunday in EnterprisePM.

Read Inside Industry

INSIDE INDUSTRY

Industrial stocks in Egypt are mostly doing well — and match their financial performance

What a difference a year makes: Industrial players are broadly seeing strong stock performances this year, although that momentum has lost a little bit of steam since the beginning of the second quarter. On both a year-to-date basis and when looking at the past five months (starting from 2Q 2023), most major industrial companies are in the green, and some are significantly outperforming the EGX30 this year so far.

Finally, it appears that share performances and earnings are actually on the same wavelength: All industrial companies — with the exception of Rameda Pharma — reported strong earnings during the second quarter of the year, even amid macroeconomic conditions of rising inflation and a persistent FX shortage. These companies’ financial performance is being reflected in their stock performance, with the general trajectory moving in the same direction.

WHERE WE WERE A YEAR AGO- In 2Q 2022, industrial stocks were continuing on a downward trajectory that had begun at the outset of the year, with only one EGX-listed major industrial company in the green as of September 2022. With most of these stocks falling throughout 2022, they were underperforming the EGX30, which had a YTD return of -13.3% and 5M return of -10.46% as of the beginning of September.

WHAT HAS HAPPENED SINCE- Successive devaluations of the EGP over the past several months made equities on the EGX significantly more attractively priced.

For the purpose of this analysis, we’ll look at the performance of a handful of heavyweight EGX30 stocks on a YTD basis and from the beginning of 2Q 2023 until now: GB Corp, Oriental Weavers, Elsewedy Electric, and Rameda Pharma.

Almost all the companies are outperforming the EGX30 on a YTD basis, although the comparison is more mixed when looking at the five-month period beginning in 2Q 2023, according to market data. The EGX30’s YTD return is 26.8%, while its 5M return is 10.9%.

GB Corp rose 6.7% YTD and 19.0% since 3 April to EGP 6.38;
Elsewedy Electric is up 73.3% YTD and 30.6% since 3 April to EGP 20.98;
Oriental Weavers is up 43.4% YTD and 4.6% since 3 April to EGP 15.08.

The only outlier: Rameda Pharma, which fell 31.7% YTD and 4.3% since 3 April to EGP 2.03. Last year, Rameda was the only major industrial company that was outperforming the EGX when the rest of its peers were underperforming.

Recapping the companies’ financial performance:

Elsewedy Electric’s net income after minority interest more than doubled y-o-y to EGP 2.7 bn in 2Q 2023, while its top line rose 78% y-o-y to EGP 36.3 bn.
GB Corp saw its net income inch up 2% y-o-y to EGP 500.5 mn, while revenues fell 14% y-o-y to EGP 5 bn.
Oriental Weavers reported EGP 290 mn in attributable net income in 2Q 2023, up 37% y-o-y, and its revenues rose 31% y-o-y to EGP 4.3 bn.
Rameda Pharma reported a 6% y-o-y drop in net income to EGP 119 mn in 1H 2023, while revenues rose 18% y-o-y to EGP 842.4 mn.

A weaker EGP + a focus on shoring up exports is doing good things for industrial players: There’s significant upside for industrial companies that have strong export activity, seeing as they’re able to price their products at import parity, said Arqaam Capital Associate Director Nour El Din Sherif. This means that these companies — such as Elsewedy Electric and Ezz Steel (which has yet to release its 2Q earnings) — have the benefit of raising local prices to offset rising input costs, while exporting in FX while the EGP is weaker, which results in revenue growth, Sherif explained. Ezz Steel, for example, is a “top pick since the beginning of the year, because of the EGP depreciation — it’s securing higher margins on the back of savings from overheads on labor, energy costs, and other expenses priced in EGP, while revenues are repriced at higher costs,” he told Enterprise.

But others are struggling with current macroeconomic conditions: For GB Corp, market conditions — most notably capital controls brought in last year that made it almost impossible for distributors to import cars and components — have weighed heavily on sales across the auto sector. The FX shortage and continued restrictions on imports led HSBC’s Nicholas Paton and Anup Kataria to trim their forecasts for the company’s revenues this year, although the bank sees significant upside for GB Corp’s share price. For Rameda Pharma, a solid rise in revenues failed to offset the impact of inflation and the depreciation of the EGP.

Your top industrial development stories for the week:

The Customized Power Technology Group plans to locally manufacture diesel engines in partnership with an unnamed Indian company under the National Initiative of Developing Egyptian Industry (Ebda). (Al Borsa)

Tags:

EGX Elsewedy Electric GB Corp INSIDE INDUSTRY Oriental Weavers Rameda Pharma

THE ENTERPRISE ENTERTAINMENT CALENDAR

AUGUST

27 August (Sunday): Hany Shaker concert, Citadel Festival for Music and Singing, Citadel Salah El Din, Cairo.

28 August (Monday): Hisham Abbas and Simone concert, Citadel Festival for Music and Singing, Citadel Salah El Din, Cairo.

28 August (Monday): Guaraní film screening, Instituto Cervantes, Giza

29 August (Tuesday): Aziz Maraka concert, City Center Almaza Mall, Cairo.

29 August (Tuesday): Sonne film screening, Austrian Cultural Forum Cairo, Qasr El Nil, Cairo

29 August (Tuesday): Jewish Synagogues from the Land of Lost to the Land of Dispersion Lecture, Sawy Culturewheel, El Zamalek, Cairo

31 August (Thursday): Ali El Haggar concert, Citadel Festival for Music and Singing, Citadel Salah El Din, Cairo.

SEPTEMBER

1 September (Friday): El Morabba3 band concert, Summer International Festival, Bibliotheca Alexandrina, Alexandria.

3 September (Sunday): El Morabba3 band concert, El Sawy Culturalwheel, El Zamalek, Cairo

3 September (Sunday): Hisham Kharma and Ghalia Benali concert, Citadel Festival for Music and Singing, Citadel Salah El Din, Cairo.

4 September (Monday): Improv for All! With Radwan, The Greek Campus, Downtown Cairo

6 September (Wednesday): Improv for All! With Radwan, The Greek Campus, Downtown Cairo

7 September (Thursday): Um Kalthoum puppet show, Sawy Culturewheel, El Zamalek, Cairo

7-9 September (Thursday-Saturday): Handicrafts market, Sawy Culturewheel, El Zamalek, Cairo

9 September (Saturday): Badya SuperCycle, Badya, 6th of October

11 September (Monday): Improv for All! With Radwan, The Greek Campus, Downtown Cairo

18 September (Monday): Retro Concert at Sawy Culturewheel, El Zamalek, Cairo

21-23 September (Thursday-Saturday) L’Etape Egypt by Tour de France, Sharm El Sheikh

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

OCTOBER

6 October (Friday): Armed Forces Day.

13-20 October (Friday-Friday): El Gouna Film Festival (GFF).

28 October (Saturday): Djs Kygo, Tiësto, Kung and Frank Walker concert, Giza Pyramids.

NOVEMBER

11 November (Saturday): El Gouna Half Marathon 2023, El Gouna.

15-24 November (Wednesday-Friday): Cairo International Film Festival (CIFF).

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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