Good afternoon, friends. This new workweek is bringing what is shaping up to be a busy news day both at home and in the region.
THE BIG STORY TODAY
Tax breaks incoming? The government has formed a committee to look into simplifying and reducing the number of taxes and fees on goods and services in a bid to incentivize local industries, boost exports, attract new investments and curb inflation, a senior government source told Enterprise. The committee will begin reviewing a list of taxes and fees during its first meeting this week, the source added.
There’s much room for improvement: The proposed tax breaks seek to eliminate double taxation and redundant fees that see some goods taxed at up to 45%, the source explained.
THE BIG STORY ABROAD
US and UK-led attacks on Houthi militants in Yemen continue to lead the conversation in the international press today. Aircraft aboard the USS Eisenhower conducted the attacks last night while sailors aboard the USS Mason fired missiles at the Houthis, who have been attacking passing vessels in solidarity with Gaza, building up fears of widespread regional escalation. Just a day earlier, the US had struck 85 targets in Iraq and Syria in response to the Iran-backed attack that killed three of their own in Jordan. As a result of the turmoil, the global oil market is turning to local supply to avoid any trouble amidst Houthi promises of retaliation. (CNBC | Bloomberg | Financial Times | Associated Press | Reuters)
** CATCH UP QUICKon the top stories from today’s EnterpriseAM:
The Central Bank of Egypt (CBE) hiked interest rates by 200 basis points at its first Monetary Policy Committee meeting of the year on Thursday.
Want to support relief efforts in Gaza, but don’t know how? We’ve got you. More than 1 mn people in Gaza have been thrown from their homes and every human being there lacks access to food, water, and fuel amid the most intense bombardment any population has endured this century.
The folks at Talabat are processing donations for a range of Gaza relief appeals by charities including the Egyptian Food Bank and Misr El Kheir. Pay in EGP using your credit card.
Or check out our list of charities to which you can make direct donations via bank deposit and / or Fawry.
*** 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: As most manufacturers struggle to keep up with pressures from rising FX costs and difficulties securing imports of raw materials and other production inputs, pharma players say their sector is faring worse than most others. In addition to these burdens, pharma players are bound by mandatory pricing from the Egyptian Drug Authority, which makes it difficult for them to raise prices in tandem with increasing costs.
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⛅️ TOMORROW’S WEATHER- Expect some clouds to roll back in with the mercury rising to a high of 19°C and a low of 11°C in the evening, according to our favorite weather app.
It might be time to log out of your friends’ Disney+ streaming account, as Disney+ and Hulu are following in Netflix’s password crackdown footsteps. Starting 14 March, both Disney+ and Hulu — which is partially owned by Disney — will “ add limitations ” to stop users from sharing login information with people outside of their household. These limitations will be rolling out in the US and UK first before making their way over to the Middle East.
What is a household?Hulu and Disney+’s US subscriber agreements, which were updated on 25 January to include this change, define a household as a collection of devices located at a single address, used by people who consider it their primary personal residence.
Before you try: You can’t outsmart it. The streaming services might resort to shady methods to “analyze” your account use. While the companies chose not to comment on how they plan to do that, we expect them to follow suit with Netflix and collect your IP addresses, device IDs, and account activity to determine whether you’re breaking their terms of service, although Netflix denied collecting GPS data from devices.
The password-sharing issue can make a big difference for streaming giants: Netflix spearheaded the move to crack down on password sharing back in May 2023 due to high operation costs that made streaming unprofitable. Forcing users to create their own accounts helped Netflix add 8.8 mn subscribers and USD 8.5 bn in revenue. Disney lost some USD 11 bn over the course of three years since launching Disney+ in 2019, according to the New York Times. Disney CEO Bob Iger told shareholders that the company plans to make its streaming service business profitable by the end of 2024, moving first to increase prices.
While Hulu isn’t available in Om El Donia, Disney willlaunch a combined Disney+ and Hulu app, Iger said, once the company completes its ownership of the streaming service.
Tech companies are keeping things lean — and shareholders are happy: Tech giants like Meta and Amazon have been ramping up layoffs to increase efficiency, even as they’re both seeing record revenues, according to CNBC. The moves have helped drive their stocks upwards, signaling to investors that they’re able “to do more with less, an alluring equation for shareholders,” CNBC says.
Investors are reaping the benefits: Meta is introducing dividends for the first time, announcing last week on its 4Q earnings call that it will distribute a quarterly dividend of USD 0.5 per share, after reporting bumper earnings for the quarter. Amazon, Alphabet, and Microsoft have yet to follow suit — but have been hopping on the downsizing trend along with multiple other companies— Microsoft let go of 1.9k roles just last month, says layoffs.fyi.
Hiring isn’t completely halted — it’s just more intentional. New hires will be “relatively minimal compared to what we would have done historically,” signifying a new movement in the “maturing” tech industry, Meta CEO Mark Zuckerberg said on the call. They’re still looking for talent, especially for AI, but will keep it minimal with heightened consideration of the cost / benefit — hiring means cutting back somewhere else.
A new era for the tech industry: Companies are going against the traditional route of reinvesting in growth and hiring. Capital preservation is now the new thing, Daniel Flax, an analyst at Neuberger Berman described it as “continu[ing] to invest for the future and play offense while at the same time manage expenses in this tough environment.” Projections of slowed growth late this year suggest even more oncoming capital allocation changes. Having a smaller headcount also means more control, allowing for growth while staying lean and limber.
The Wonder is a strange but captivating tale of religious pandemonium meets psychological drama set in 1862. An English nurse named Lib (Florence Pugh) is brought to a remote Irish village to observe a young girl, Anna, who is said to have survived without food for months. Anna becomes a saintly figure, with believers constantly visiting her home to witness the miracle of her piety for themselves. As commissioned by a committee of priests and village leaders, Lib must investigate how Anna has managed to survive her four-month fast while alternating shifts with a nun in a battle between medicine and faith.
Faith, Famine, and Family: The movie starts with Pugh breaking the fourth wall to urge viewers to embrace storytelling: “We are nothing without stories, so we invite you to believe in this one.” That message runs throughout the film, asking us to confront our beliefs while being wary of blind faith. Lib starts as a harsh skeptic but must quickly grapple with her confidence in herself and her devotion to Anna. But, by the end, The Wonder is driven by passion, belief, and human sympathy.
Hunger can manifest itself in many ways. Aside from the nod to faith, the movie addresses the consequences of colonialism. Set in a time when the effects of the Great Famine still linger, and centering around hunger and survival, The Wonder manages to confront themes of control and oppression.
It’s no surprise that Pugh delivers another phenomenal performance, but the true star of the film is newcomer Kila Lord Cassidy, who plays Anna. At just 13 years old, not even old enough to watch the movie, Cassidy delivers the dark subject matter like a pro. She embraces the character completely, rightfully earning her her first nomination for best breakthrough at the British Independent Film Awards.
⚽ The Gunners and the Reds face off: Gameweek 23 of the Premier League will see Liverpool at Emirates Stadium facing off against Arsenal tonight at 6:30pm. The home team’s Gunners are currently in third place with a total of 46 points — the same as Man City, who have played one less match. The Reds are leading the scoreboard with 51 points.
A derby at the Spanish capital: Real Madrid is hosting Atletico in the Madrid derby tonight at 10pm in gameweek 23 of La Liga. The Merengues have a chance to widen the gap between them and second-place Girona, who lost two points yesterday by tying with Real Sociedad, while the Rojiblancos desperately chase third place, currently held by Barcelona.
The top Italian teams battle for first place: Inter Milan, currently dominating Serie A, is facing Juventus in gameweek 23 of the Italian league in hopes of securing their top spot in the race to the title. The championship has been eluding La Vecchia Signora since 2020, and they are currently one point away from Inter Milan’s throne. The battle for first place is taking place tonight at 9:45pm.
These are the major European league matches we’re tracking today:
Chelsea vs Wolverhampton (4pm, Premier League)
Manchester United vs West Ham (4pm, Premier League)
Bournemouth vs Nottingham Forest (4pm, Premier League)
Real Betis vs Getafe (7:30pm, La Liga)
Napoli vs Hellas Verona (4pm, Serie A)
Leipzig vs Union Berlin (6:30pm, Bundesliga)
Lyon vs Marseille (9:45pm, Ligue 1)
The Afcon top four: The semi-finalists for the African Cup of Nations was determined yesterday after Côte d’Ivoire came out on top in their match against Mali and after Cape Verde was ousted by South Africa. Following these results, South Africa will be going head to head against Nigeria as Côte d’Ivoire dukes it out with the Democratic Republic of Congo.
Related
? OUT AND ABOUT- (all times CLT)
TODAY-
PHOTOGRAPHY-
TheFujifilm Festival ends today. The event’s last day will be full of activities, meetups, and talks, as well as a photography contest and an exhibition that you can partake in. You can bring your camera along to get a gratuitous CMOS and lens cleaning and check out the GFX 100 ii Studio on-site. Fujifilm X-Photographers and creators will be there too — don’t miss out on the networking potential. Check out their Facebook page for more information.
THIS WEEK-
ART-
Motion Art Gallery’s posthumous exhibition for artist Mahmoud Moussa is a must-visit. The artist’s iconic sculptures are on display in the gallery in Zamalek until tomorrow.
SPORTS-
Watch the African Cup on the big screen: Mivida is hosting The Stadium, screening Afcon matches. The Lake District is within arm’s reach in case you need to fuel up before or after the matches. More of a doer? The Stadium is also hosting sports activities you can partake in. You can book your tickets through Ticketsmarche.
ART-
Go to Bibliothek’s Art Gallery to attend Inside the Corner Pink House, an exhibition and book launch by visual artist Reem AlJeally. The artwork and illustrated book depict the ongoing war in Khartoum, blending nostalgic memories of life, events, and childhood as the artist adjusts to a new life abroad. The exhibition is open to the public until this Tuesday, 6 February from 10am to 10pm.
THEATER-
Ebni is back at Rawabet Art Space. The play is an adaptation of God of Carnage by Yasmina Reza and it demonstrates how two different families react when their children get into a fight,and as the play unfolds their true colors are revealed. Catch the performance starting this Friday, 9, Tuesday, 13, and Wednesday, 14 February at 8pm and on Saturday, 10 February at 5pm. Book your tickets here.
Get your salsa groove on at Cairo Jazz Club 610’s Salsa night with Soul Motion Studio tomorrow. Just send them a message on Facebook to reserve your spot.
MUSIC-
The Grand Egyptian Museum will be hosting Tunisian songstress Emel Mathlouthi this Friday, 9 February, so hurry and grab a ticket. The Voices of Hope concert will start promptly at 9pm.
Hamza Namira will be dropping his album at a concert hosted by ZED parkthis Friday, 9 February at 8pm. The park’s gates will open at 2pm but the concert gates will open later at 6pm. You can get your tickets here, with the option of regular standing, VIP standing, or VIP seated.
Egyptian independent artist and multi-instrumentalist ASH will be performing at Le LacDu Caire this Friday, 9 February. Hosted by CRCL, the event will start at 1pm and doors will close at 4pm. Get your tickets here.
LATER-
MUSIC-
Don't miss out on Mohamed Mounir, Ramy Sabry, and Sharmoofers taking the stageat Family Park.The event will take place on Friday, 16 February with gates opening at 1pm and performances starting at 7pm. Get your tickets through Tazkarti.
Amr Diab is back on stage for the first time in Egypt this year. El Hadaba’s concert is taking place in Manara Arena on Friday, 16 February. Grab your tickets while you can.
Oud player Saad Al Oud and his band will be playing at Theatro Arkan, on Saturday, 17 February. The night of classical Egyptian music will open its doors from 7:30pm and begin at 8pm. You can get your tickets at Ticketsmarche.
Renowned musician and composer Omar Khairat will be gracing the stage again at the Egyptian Opera House for two nights starting Wednesday, 21 February, and Thursday, 22 February at the Grand Theatre at 8pm. Get your ticket for the first night here and the second night here.
POETRY-
Amr Hassan will be performing at El Sawy Culturewheel for their annual end-of-winter show. Alongside his band, he will perform two concerts on Friday, 16 February, one at 3:30pm and one at 7pm. Find out more here.
THEATER-
In another of Mahmoud Saad’s live interviews, Ashraf Abdelbaki will be featured on stage on Saturday, 17 February. Accompanying entertainment will be provided by Mai Farouk. Before you grab a ticket, keep in mind that this is a phone-free, filmed experience, meaning that you should expect to hand your phone over at the gate and be seen by friends and family on their TV screens at home.
SPORTS-
The Cairo Half Marathon is taking place in just over a month: Mark your calendars for Friday, 1 March, and start stretching. Cairo Runners is bringing back a fan favorite, offering 5km, 10km, and 21km runs as well as a Family Run. Tickets are still available, giving you ample time to convince seven of your friends to join, which will get a 10% reduction in price when you register.
Serial is a pioneer of podcasts as we know them. Hosted by Sarah Koenig, the journalistic podcasts tell stories that might be hard to hear. The weekly episodes cover a murder case and go into the details of the tragedy, even using first-hand accounts from some of the people involved.
It goes way back: Season one (from back in 2014) explores the case of Hae Min Lee who went missing in 1999 and her ex-boyfriend, Adnan Syed, was deemed the culprit but never backed down on claims of innocence. Koenig had been in touch with Syed and even recorded their conversations to supplement her own investigation. For the rest of the episodes, Koenig uses the evidence she has gathered to try and decide whether or not he is innocent.
The way it’s structured makes you feel like you’re cracking the case open with her. When things don’t add up, you’ll be just as frustrated and at the edge of your seat for more clues. We have to warn you — it won’t flow with a satisfying arc like a Criminal Minds or CSI plot, but it will show you all the messy details that a scripted show would leave out to streamline the story.
The EGX30 fell 3.0% at today’s close on turnover of EGP 5.1 bn (46.4% above the 90-day average). Local investors were net buyers. The index is up 10.8% YTD.
In the green: Ibnsina Pharma (+11.0%), Juhayna (+10.1%) and Palm Hills Development (+7.5%).
In the red: Alex Containers and Cargo Handling (-11.2%), Oriental Weavers (-9.6%) and Sidi Kerir Petrochemicals (-9.5%).
Most industries in Egypt are struggling right now, but pharma players say they have it worse than most. Like other industries, the pharma industry is severely impacted by the ongoing FX crunch, which is hampering the industry’s ability to import raw materials and active ingredients for a number of meds and products, according to industry players Enterprise spoke with. Several producers have had to resort to sourcing these ingredients from the black market, according to our sources, while other players are shifting towards manufacturing cosmetics, nutritional supplements, and vitamins instead of medications.
By the numbers: Egypt currently has 170 factories producing pharma products, in addition to another 40 factories currently under construction, head of the Federation of Egyptian Industries’ pharma chamber Gamal El Leithy told Enterprise. There are also around 500 cosmetics factories, along with some 300 factories producing medical equipment, according to El Leithy. We have around 191 licensed factories with a combined 799 production lines, head of the Egyptian Drug Authority Tamer Essam. That’s a notable leap from where we were a decade ago, when Egypt had 130 pharma factories with some 500 production lines, according to Essam.
Pharma has big FX needs because it’s extremely import-reliant, considering manufacturers import around 90% of raw materials, head of the pharma division in the Federation of Egyptian Chamber of Commerce Ali Ouf told Enterprise. That reliance on imports should grant the sector special treatment in at least some regards, Ouf suggested. “We’re facing a crisis due to the inability to compensate for jumps in the cost differences of USD sourcing by pricing it into the products because the sector is regulated by mandatory pricing that can’t be changed without the approval of the Egyptian Drug Authority,” Ouf previously told us. This formula puts the sector under the pressure of facing “huge” cost differences, he said.
The sector has had only a partial solution: While costs jumped 50% last year, the EDA allowed for a 20% increase in prices. The EDA also abides by pricing according to the official exchange rate (EGP 30.96 / USD 1), which is far below the parallel market pricing, further widening the gap between the EDA’s pricing guidelines and the reality for many of these companies. Companies are forced to source FX from the parallel market to ensure operational continuity, which exposes them to sharper cost increases.
But the government isn’t blind to the problems: Cabinet is currently working on ensuring the availability of pharma products and medical equipment, particularly as there is a shortage of certain products, Prime Minister Moustafa Madbouly said in a statement today. Madbouly called for an increase in reserves and stockpiles of critical meds, with Health Minister Khaled Abdel Ghaffar confirming that certain products — particularly those that are imported — have been in short supply in the past period.
More tax deductions are needed, sector says: Pharma companies in Egypt are facing net losses as a result of high fees, taxes, and currency differences, in addition to foreign companies being legally prohibited from purchasing FX from the black market, Ouf said. Authorities should be more lenient with the sector when it comes to imposing fines for delays in production, Ouf suggested, while there should also be a comprehensive view on the sector as a whole, including taxes, incentives, pricing, and FX transactions.
A unified and flexible registration system + fair pricing: The solution for industry obstacles including introducing a new system for registering pharma products, which takes time and lots of money and therefore limits companies’ ability to allocate these resources towards deepening the local product, El Leithy suggests. He also believes that introducing flexibility in pricing will allow factories to improve operational continuity.
The sector has lots of potential — if its problems are addressed: Pharma could export as much as USD 5 bn worth of products by 2030, thanks to the active ingredients we have access to and the range of products we produce, but the sector needs a shot in the arm, Chairman of the Egyptian Federation of Investors’ Association’s Health and Medicine Committee Mohie Hafez said. Introducing flexible pricing, ensuring the availability of active ingredients, and correctly enforcing regulations on the meds market (by preventing the over-the-counter sale of antibiotics and other meds without a doctor’s prescription) would help get the sector in order, Hafez said.
This is all without accounting for external pressures, including the global shipping as a result of tensions in the Red Sea. The crisis — leading many shipping companies to change routes away from the Suez Canal and around the Cape of Good Hope — has left Egypt’s consumer market, including pharma products, particularly vulnerable, Fitch said in a recent risk report. With China and India being the primary suppliers of [chemical] materials to Egypt and the wider MENA region, we predict that Egypt-based drugmakers will face adverse effects due to supply disruptions, potentially hindering their production capabilities and ultimately impacting the stability of Egypt’s pharma sector,” Fitch said.
Your top industrial development stories for the week:
IDA offers more land for investors: The Industrial Development Authority (IDA) has listed 456 fully serviced plots on its digital platform for interested investors, in a bid to boost industry localization, and bridge imports/exports gaps, according to an IDA statement. The lands span over 1 mn sqm in 10 governorates, with areas ranging between 200 sqm to 10k sqm. They can be bought through regular ownership contracts, or usufruct agreements with 5% of the plot’s value paid annually. Starting today, Interested investors can head over to the IDA website to buy the plots booklets, which will be available until 22 February.
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