Gov’t unveils new tax measures aimed to simplify procedures, encourage investment, and broaden tax base

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What We're Tracking Today

It’s blackout decision time for the oil, electricity ministries

Good morning, wonderful people. We’ve made it through another week together. Before we dive into this morning’s top stories, we’re going to take the lid off the agenda for this year’s EnterpriseAM Finance Forum, coming up on Tuesday, 24 September.

Headlining the EnterpriseAM Finance Forum: We’ll be joined for the first time on stage by a senior government official, who’s joining us to outline a vision for where we’re going as a community and as an economy. The keynote interview will get underway at 9am sharp, and you won’t want to miss our exclusive networking breakfast from 8am.

Among the topics on the agenda:

Welcome to the hot seat — top industry CEOs set the tone by addressing the biggest (and toughest) questions of the day.
Looking from the outside in — what foreign investors and strategics think about Egypt right now.
The only asset class in town — It’s real estate or nothing. We’ll get into the ins and outs of the industry, how it’s financing itself, which areas (and price points) are next, and more.
Gazing into that crystal ball — The outlook for dealflow in 2025, from M&A and IPOs to securitization, FX and more.
A once in a generation opportunity? — A deep dive into the promise and pitfalls of the emerging energy economy.
Do we really love banking SMEs? — With NBFIs and fintech players staking their claims, banks are starting to take the SME market seriously.
The NBFI panel — The resilience of the Egyptian consumer is the business story of the decade. How are banks and NBFS players building sustainable businesses? What are the opportunities — and credit worries — in the B2B space?

^^ Check out EnterprisePM this afternoon for a link to the agenda with detailed panel descriptions.

Haven’t requested an invitation yet? Do it today — space is limited. Tap or click hereto let us know you’re interested.

** IMPORTANT NOTE — If you’ve already received your invitation on email, you *must* click through to confirm you’re attending.

PSA-

#1- The long weekend is nearly upon us, with the private and public sectors joining the EGX and also now the banks — as per a central bank statement out yesterday — in getting Sunday off as a paid holiday in observance of Prophet Mohammed’s birthday.

That also includes us here at EnterpriseAM, so our daily newsletter will be taking a break from your inbox Sunday. But worry not, we will be back bright and early on Monday to help you catch up on everything that happened over the long weekend.

#2- Foreigners get more time to sort out residency permits: The cab inet ye sterday extended the period for foreign residents who do not have residency permits to legalize their stay in the country, granting them another year to sort their documentation out.

Remember: This is the third time the cabinet pushed back the deadline to settle the USD 1k fine and arrange an Egyptian host — it was initially set for December 2023, before being pushed to March and then again to mid-August.

WEATHER- The heatwave is not yet over in Cairo today, with an unseasonably warm high of 37°C and a low of 27°C, according to our favorite weather app.

It’s a fair bit cooler in Alexandria, with a high of 32°C and a low of 24°C.

And over the weekend, expect to see temperatures steadily decline in the capital and remain pretty much where they are for our friends on the Mediterranean.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

WATCH THIS SPACE-

#1- It’s blackout decision time for the oil, electricity ministries: The Oil Ministry and Electricity Ministry are awaiting consumption reports and supply data from the relevant authorities ahead of a meeting next week to make a decision on the resumption of power cuts, a government source told Enterprise. Following the meeting, the two ministries will present a plan — or potentially a set of options — to the cabinet to make the final call.

We knew this was coming: Prime Minister Moustafa Madbouly specified in a mid-July presser that the summer respite from blackouts would come to an end in mid-September.

We’ve been told there’s three options on the table, with the ministries trying to figure out whether to bring back two-hour outages, one-hour outages, or — fingers crossed — no cuts at all.

#2- Turkey has expressed interest in purveying Egyptian offshore natural gas via its floating storage units and gasification ships, A sharq Business reported based on comments from Turkish Energy Minister Alparslan Bayraktar. Turkey and Egypt could cooperate in the oil and gas sector as relations between the two countries warm, Bayrakter added.

HAPPENING TODAY-

#1- It’s the fourth and final day of the 10th EFG Hermes Annual London Investor Conference, which has throughout been devling “into the profound potential emerging in key sectors across the global economy, offering participants unparalleled insights and connections in a rapidly evolving landscape.”

Wish you were there? We’ve got a rundown of Saudi Exchange CEO Mohammed Al Rumaih and Capital Market Authority Board Commissioner Abdulaziz Abdulmohsen Bin Hassan’s discussion from day two on how Saudi capital markets have grown and developed over the years into a global leader to be reckoned with. Check out the story in the news well, below.

#2- The government’s mega LNG tender to see us through to December is set to close today, with the government hoping to secure 20 shipments to be delivered between October and the last month of the year, a government source told us earlier this week.

HAPPENING NEXT WEEK-

The Egypt-UK investment conference is nearly upon us: Our friends at HSBC, together with UK Export Finance and Egyptian-British Chamber of Commerce, are hosting the Egypt-UK Investment and Opportunities Forum in London on Monday, 16 September. The conference will showcase investment opportunities in Egypt across different sectors — including renewable energy, water, automotive, food processing, IT, and AI — to potential investors from the UK. It will also facilitate matchmaking between institutions of both countries, bringing together government representatives, business leaders, and senior executives.

On the agenda: The event will feature presentations by GAFI head Hossam Heiba on supporting a sustainable investment climate, SCZone head Walid Gamal El Din on the economic zone’s investment proposition, and Advisor to the Vice Finance Minister Nevine Mansour on economic reform. The presentations will be followed by two panel discussions with large local and international companies — the first of which will discuss Egypt's growth potential and infrastructure and the second focusing on investment opportunities and success stories. The event will also offer three hours for one-on-one meetings (which must be scheduled in advance) and networking.

Tempted to jet off to London to attend the conference? Register your interest here.

FROM THE HOUSE-

The newly amended Criminal Procedures Law received approval from the House of Representatives’ legislative and constitutional affairs committee yesterday following three weeks of discussions, with participation from stakeholders including the justice and interior ministries, the Egyptian Bar Association, the National Council for Human Rights, and the National Dialogue.

Shorter terms for pretrial detention: The amended law reduces the maximum length of pretrial detention from six to four months for misdemeanors, from 18 to 12 months for felonies, and from 24 to 18 months for crimes that carry the penalties of death or life imprisonment.

The amended law also touches on strengthening constitutional guarantees for defendants, including assuring that defendants cannot be questioned without a lawyer, providing further regulations around financial compensation for the wrongly detained, travel bans, and asset freezes.

What’s next? The bill is set to be reviewed by the House when it reconvenes during the first week of October.

THE BIG STORY ABROAD-

Two days on and the US presidential debate is still dominating the digital front pages of the international press, with just a spattering of business and tech news trying to fight for ink with an avalanche post-debate analysis and thought pieces from the commentariat.

Now the dust has settled, pundits are trying to figure out who came on top, with the consensus in the international media being that while Kamala Harris had largely come out on top, the debate had not substantially moved the needle in a very close race between the two candidates. Trump campaign donors and Republican strategists are reportedly frustrated with the former president’s “uneven performance,” with one strategist calling the debate “a missed opportunity.” The former president’s claim that immigrants in Springfield, Ohio were eating residents’ pets was one of a number of diversions that drew hand-wringing from some Republican strategists and donors, who lamented the former president’s failure to double down on issues like inflation or the state of the US economy under Joe Biden.

WHILE IN GLOBAL INTEREST RATE SPECULATION- US inflation cooled to 2.5% inAugust, inching toward the 2% inflation rate targeted by the US Federal Reserve. The release of the new inflation data has seen analysts consolidate behind expectations that the Fed will make only a 25-basis point cut at the central bank’s rate-setting meeting next week.

OVER IN TECH NEWS- OpenAI wants to nearly double its valuation to USD 150 bn in new financing round to raise USD 5 bn from investors in order to fund AI development that it hopes will give it an edge over competitors including Google and Meta.

AND IN OUR NECK OF THE WOODS- The prime minister of Libya’s Government of National Accord, Abdul Hamid Dbeibeh, has pledged to end the country’s central bank standoff that saw its oil output cut in half.

Beauty unveiled amidst ancient wonders: Celebrate the beauty, nature, and cultural legacy of 30 nations as Miss Elite 2024 returns to the enchanting shores of Somabay from 2-14 September. For the fourth consecutive year, Somabay is hosting this prestigious international beauty pageant, celebrating women’s beauty and intelligence on a global scale. Experience the fusion of antiquity and modern elegance by attending the Grand Finale on 13 September at Mazeej Soma Beach Platform.

New tax incentives seek to ease burdens for taxpayers, resolve disputes, and incorporate more taxpayers into the system

Our new tax incentive package is out: The government yesterday announced its first batch of new amendments to the tax system, which aim to ease the burden on taxpayers and build greater trust in the tax system, from filing tax returns to resolving disputes and integrating the informal economy, Finance Minister Ahmed Kouchouk said during a press conference (watch, runtime: 1:27:43) along with Prime Minister Mostafa Madbouly.

The new tax rules represent a business-tax authority reset: The amendments signal a new chapter in the relationship between the Egyptian Tax Authority (ETA) and the business community, Kouchouk said, — one based on “partnership, support, and certainty” that will see the ETA focus on providing excellent service and expanding the tax base to benefit both the state and investors, alongside improving support and services for citizens.

The details:

Launching a central clearing system to settle taxpayers’ obligations and dues to government entities, including non-tax and customs entities. This was one of the recommendations from the Supreme Council for Investment.
Putting a cap on late payment penalties such that the penalty does not exceed the original amount of tax due. Taxpayers will be allowed to submit or amend tax returns for the period between 2021 and 2023 without penalties.
Simplifying tax returns to ease the process for taxpayers, including by shortening the currently 60-page tax form and introducing graduated penalties for failing to file that are based on business size. Meanwhile, the ETA will work to fairly resolve old disputes, taking care to ensure that the taxpayer does not shoulder the burden of delays in the authority’s review of tax files.
Standardizing treatment across tax offices and jurisdictions based on clear yearly guidance, as well as the establishment of designated areas to answer taxpayer inquiries and the expansion of a sample inspection system to include all tax centers, relying on risk management systems for taxpayers across all offices and regions.
Establishing a pre-inquiry service for both local and foreign investors that would provide them with information on the taxes and fees relevant to their targeted activities, allowing them to make a more realistic assessment of the competitive landscape in the market, in addition to pricing mechanisms and cost calculations down to help resolve disputes, exits, and other issues.
Raising the exemption threshold for submitting a transfer pricing study for international companies to EGP 30 mn, instead of the previous EGP 8 mn stipulated in the Unified Tax Procedures Law, following the separation of transfer pricing examinations from income tax audits.
A simplified and integrated tax system for businesses with annual revenues not exceeding EGP 15 mn, including small businesses, startups, and freelancers. This system will cover income tax, VAT, dividends, and stamp tax to ease the burden on these businesses and encourage others to join the formal sector.
Simplifying the procedures for refunding VAT on purchases by foreign visitors, which will help establish a competitive and investor-friendly business environment, supporting the state’s efforts to maximize productive and export capacities.

The authority is investing in training and enhancing its cadres in order to prepare them for the new tax measures, Kouchouk explained. An employee incentive system will be implemented in parallel with a mechanism to monitor and follow up on the services provided to taxpayers and measure taxpayers’ satisfaction with employees, Kouchouk explained. He added that the incentive package includes contracting with an independent third party to conduct periodic evaluations that determine how much the taxpayer benefits from the new relief measures and address any gaps if they exist.

Madbouly also weighed in on the privatization program’s progress: The prime minister affirmed that despite recent economic and geopolitical hurdles that saw the government rearrange its priorities for certain companies included in its privatization offering, the state remains committed to attracting investments in a way that maximizes the benefits of privatization for the state.

More incentives are coming our way next week: The government is set to announce further investment incentives, including a new export rebate program, Madbouly said at the press conference. The Finance Ministry aims to quadruple or quintuple VAT rebates to taxpayers, which reached EGP 3 bn last year, according to Kouchouk.

WHAT TO EXPECT IN SECOND ROUND OF INCENTIVES-

More tax amnesty to incorporate informal economy: A senior government source speaking to Enterprise added that the government is preparing substantial incentives to incorporate thousands of new taxpayers into the system, including a comprehensive tax amnesty covering VAT, stamp tax, and other tax obligations in addition to income tax, which had previously been the only category covered under the 2020 SMEs law.

More businesses are set to qualify for the lump-sum tax category: The source also confirmed that the maximum limits for sales turnover for inclusion under the lump-sum tax category will be raised 40-50% without affecting the value of the lump-sum tax itself. This will allow entrepreneurs and small businesses to fall under the lump-sum tax category without the need for keeping regular accounts.

And two potential scenarios for the long-postponed capital gains tax: The source mentioned that there are two options for an alternative simplified collection mechanism for the capital gains tax: either the return of the stamp tax — confirming what another government source told Enterprise yesterday — or a fixed tax of 2% at the time of sale, which would be deducted immediately and collected by the ETA.

But why can’t we completely exempt capital gains from taxes? Exempting capital gains from taxation would contradict existing tax agreements and would turn Egypt into a tax haven. Egypt is committed to the regulations of the OECD in this regard, the source added.

And on resolving tax disputes: The source added that all tax disputes before 2020 will see interest higher than the value of the original due tax waived. He pointed out that interest in these cases has ranged from 230% to 600%, making this one of the most important incentives for resolving past disputes.

Also from the presser:

The government is negotiating with two Chinese companies to establish factories for electric and hybrid cars in Egypt during the coming year, Madbouly said, adding that the market will see around 4 mn cars produced annually from the companies’ factories.
The government is continuing to work with gold miner Centamin to exploit the Sukari mine in line with the state’s existing contract, Madbouly said in comments on global mining company AngloGold Ashanti’s acquisition of Centamin for USD 2.5 bn. Egypt’s share is “undisputed and may even increase,” Madbouly added.

US-based Sultan Ventures acquires homegrown startup investor Acasia Group

Sultan Ventures makes a play for MENA with Acasia takeover: US-based and also US-focussed — at least until now — venture firm Sultan Ventures has fully acquired local venture capital firm Acasia Group, formerly Cairo Angels, according to a joint statement (pdf). The size of the transaction was not disclosed.

They say it’s a mutually beneficial move: The move will enable Acasia to amplify its impact in “scaling early-stage ventures and deep-tech commercialization,” Acasia Group Chairman Hossam Allam said. It will also support Sultan Ventures’ commitment to global expansion, the statement reads, without providing any details on the expansion plans.

The acquisition also “creates a new US-MENA bridge, and opens a door for thousands of founders seeking to bring ideas to market,” Sultan Ventures Managing Partner Omar Sultan.

Egyptian fintech player Paymob secures USD 22 mn in funding

Paymob secures USD 22 mn in funding: Local fintech startup Paymob has closed a USD 22 mn series B extension round, bringing its total series B funding to USD 72 mn, according to a state ment (p df).

Who chipped in? The round was led by EBRD Venture Capital, with participation from Endeavor Catalyst and existing investors PayPal Ventures, British International Investment (BII), FMO, A15, Nclude, and Helios Digital Ventures.

Where’s the money going? The fresh capital will be used to expand Paymob's market lead in Egypt and accelerate its growth across the region — the company kicked off operations in the UAE in 2022 and got the regulatory greenlight to launch in Saudi Arabia and Oman last year, becoming the first international fintech player to receive the Payment Service Provider license from the Central Bank of Oman.

What they said: “We are very excited by our strong prospects in Egypt — where we hold a market-leading position — and the significant traction experienced in the UAE since launching operations there," co-founder and CEO Islam Shawky said. “This funding will help Paymob fully capitalize on the momentum in our established markets, as we accelerate our GCC roll-out.”

Tadawul’s Al Rumaih + CMA’s Bin Hassan on the growth story of Saudi capital markets

How the Tadawul and Capital Market Authority are positioning Saudi capital markets as a global leader: Over the past several years, the MENA region’s capital markets “have transformed quite significantly — from small, locally driven outfits to major global hubs that are becoming a growing constituent of the MSCI Emerging Market Index,” EFG Holding CEO Karim Awad said at the EFG Hermes Annual Conference in London earlier this week. This transformation has been most apparent in Saudi and the UAE, Awad noted, “where even amid global and regional turmoil, their capital markets have shown remarkable resilience with the recent IPO flow that is among the most active globally.”

Saudi capital markets in particular have seen marked growth underpinned by a growth and regulatory strategy geared towards placing the Kingdom as a leading global capital market, Saudi Exchange CEO Mohammed Al Rumaih and Capital Market Authority (CMA) Board Commissioner Abdulaziz Abdulmohsen Bin Hassan said in a fireside chat at the conference.

“You name the metric, it’s seen double- or triple-digit growth in the past five years,” Bin Hassan says, pointing to qualified financial investors (QFIs), asset management, the debt market, and the number of financial institutions.

It was about finding out what investors were lacking in terms of incentives — and delivering on that, said Bin Hassan. “When the first QFI started back in 2017, there was a big constraint on the QFIs themselves. Since then, the CMA worked on relaxing the regulations itself to have more QFIs. So, for example, now you don't have to be a financial institution,” he said. Instead, regulators now allow any institution that meets the minimum requirement of USD 500 mn in assets under management to access the Saudi market. Regulators also made it easier for non-resident foreign investors to enter Tadawul’s parallel market, Nomu, without meeting QFI requirements, Bin Hassan noted.

“We continue to think about and work on how we can make it easier for investors,” Bin Hassan said.

The same rationale applied to encouraging new paper in the market, according to Al Rumaih, who looked at the growth in the volume of listings on the Tadawul over the past several years. “Last year, we had 35 listings. As of today, we’ve had 35 listings year-to-date, and we expect that figure to surpass 50 by the end of 2024. That’s compared to 2018, when we had maybe five listings over the course of the year,” Al Rumaih said.

In addition to the growth in volume, listings today also have much more diversification in terms of industries, sizes, and markets, as well as instruments such as ETFs, close-ended funds, and REITs, Al Rumaih noted. The growth in listing activity came on the back of the CMA-led Financial Sector Development Program, which focused on growing the number of listings in Saudi.

“If you look back to 2017, we had around 100 listed companies. For an economy like Saudi Arabia, that’s a very small figure,” Al Rumaih said.

The program focused first and foremost on addressing why companies were disinterested in going public, Al Rumaih said. “They had a valid reason — a lot of disclosure without a lot of benefits. Although the liquidity was always there, there were no tools for companies to get the liquidity they needed to grow their businesses.” Back in 2017, Saudi capital markets lacked the diversified investor base it currently has. Fast forward to today, most companies that previously had zero foreign investors now have 5-10% of their shares in the market held by foreign investors.

Then there was the creation of Nomu: Some companies did want to list, but wanted fewer requirements, which is why regulators set up Nomu and also looked at different ways to enter the market, such as introducing direct listings — which cut down on listing time and costs, Al Rumaih noted.

It’s been half a decade of substantial growth, but there’s still more potential to tap into: So far this year, there are more than 50 listing applications under review, “so this pipeline is very healthy and will continue to grow as we are opening up more ways for companies to become listed,” Al Rumaih said. Moving forward, regulators “continue to think about and work on how we can make it easier for investors,” Bin Hassan said. “We’re aiming to not just be one of the financial centers of the world, but also to be one of the most important ones.”

The CMA is set to announce today a fresh strategy for the next three years outlining plans to further develop the country’s capital markets, Bin Hassan said. Among the priorities moving forward as regulators work on “continuously improving and developing the market” is increasing efficiency, adopting the best international practices, and improving infrastructure, Bin Hassan and Al Rumaih said.

That potential also lies in debt capital markets, which remains underdeveloped: “If we talk about equity markets — ETFs, asset management, etc — we’re relatively mature there, but the most important thing we’re working on at the CMA with our partners in the financial sector is the debt capital market (DCM),” Bin Hassan said. By developing the country’s debt market, the value of becoming a listed company will also grow, Al Rumaih noted. “So by being a listed company, you would have more — or better — access to funding, which is essential to a company in a growth stage,” Al Rumaih said.

The Saudi debt market, valued at around SAR 700 bn, is very big — “but similar to the equity markets a few years ago, we are way below the benchmark when comparing the market to the size of the economy,” Al Rumaih said. Whereas G20 countries see their debt markets representing 30-40% of GDP, Saudi’s debt market represents 18% of the Kingdom’s total GDP, leaving “room to grow,” he noted.

What’s holding companies back from tapping debt markets to finance growth plans? Regulations are a core factor, Al Rumaih said, noting that these regulations are being revamped “to reduce the requirements and redundant information, especially if you are a listed company, which should provide the advantage of being known to the investors.” Regulations should allow access to the debt market to be a short, easy, and cost-effective process, he said. “The debt market is very important to us because it is very important to the economy.”

In addition to regulatory changes, there are also new systems being introduced: “Coupled with the revamp of the offering and listing rules, we are planning to introduce the capital management system, which we’ve tested in the parallel market to great success. What we expect is that the companies using the CMS can access a good pool of liquidity in a very cost-efficient way,” Al Rumaih said. Officials expect that these changes will help companies “look at the debt market as the main source of funding and maybe replicate the success that we are having in the equity market” within the next 2-3 years, he said.

Meanwhile, regulators are also pushing forward with ESG performance standards: While the CMA has been supporting the implementation of ESG regulations, but “it’s still the beginning,” Bin Hassan said. The CMA is working with the Supreme Committee for Investments on putting together standardized ESG regulations that would provide investors with greater clarity, he said. “We think in the next few years you’re going to see a more developed ESG landscape in the Kingdom itself as part of its overall vision,” Bin Hassan said.

Vision 2030 — which encompasses sustainability as a key pillar — was an important driver for the Tadawul to also push for sustainability among companies, Al Rumaih said. “We found that the majority of companies are already sustainable — they are already following the corporate governance code, which is one of the best in the world, and they’re working towards more environmentally-friendly ways of doing business.” After publishing guidelines on ESG reporting two years ago, some 8% of listed companies disclosed their ESG practices, while that number has grown to 30% this year, Al Rumaih said. The surrounding ecosystem has also developed to encourage more ESG reporting, with more consultants now available to support in implementing ESG practices and reporting on them, Al Rumaih said. “We are very optimistic about the future of the economy being more sustainable and how our companies are reacting to it.”

US releases full USD 1.3 bn in military aid to Egypt, above Congress objections

The US State Department’s approval of USD 1.3 bn in military aid yesterday is in the international headlines, as news outlets noted the administration’s decision to provide Egypt the full package over the objections of some on Capitol Hill. (Wall Street Journal | Bloomberg | Reuters | CNN)

The decision comes amid calls from some members of the US Congress to withhold the USD 320 mn of Egypt’s military aid that is conditional upon the country adhering to certain human rights conditions. The USD 225 mn of funding linked to broad democratization and human rights protection has been waived by the State Department, while an additional USD 95 mn conditional on Egypt having made sufficient progress on releasing political prisoners has also been greenlit.

The State Department justified its decision to provide Egypt with its full package as “important to advancing regional peace and Egypt’s specific and ongoing contributions to U.S. national security priorities, particularly to finalize a cease-fire agreement for Gaza,” according to a State Department spokesperson.

Remember: Last year saw USD 235 mn in human rights-linked aid blocked by the US Senate Foreign Relations Committee.

Gov’t to invite bids for USD 3 bn worth of PPP infrastructure projects by the end of the year. PLUS: Beltone to launch two new venture funds

INFRASTRUCTURE-

Some USD 3.2 bn worth of PPP infrastructure projects on offer by the end of year: The government plans to invite bids for over USD 3.2 bn worth of projects before the end of the year, Zawya quotes Director of the Finance Ministry's public-private partnership (PPP) unit Atter Hannoura as saying at the PPP MENA Forum in Dubai on Tuesday (here and here).

The details: The projects include 15 desalination plants with combined investments of USD 3 bn — the unit will open the bidding door for two of the plants, one in Dabaa and one in El Hamam with investments of USD 210 mn in the fourth quarter of the year. The government will also be opening the bidding door for a PPP for a USD 95 mn wastewater treatment plant in Sixth of October City next week, a USD 10 mn investor service center, and 22 schools across the country worth USD 60 mn before the end of the year.

VENTURE CAPITAL-

Two new venture funds for Beltone Venture Capital? Beltone Holding’s venture capital arm Beltone Venture Capital is looking into establishing two startup-focused investment funds with a targeted investment volume of USD 50 mn, subsidiary CEO Ali Mokhtar told Asharq Business, with one fund to target acquisitions in Africa and the second to target investments in the MENA region.

US Fed may reconsider larger rate cut as inflation persists

US Fed looks more likely to go for a smaller rate cut as inflation persists: US consumer prices rose 0.2% in August, matching July's increase, while the annual CPI advanced 2.5%, the smallest rise since February 2021, according to Bureau of Labor Statistics figures (pdf). The index grew 0.3% without counting volatile items like food and energy — the most in four months.

The persistent growth points to the likelihood of a smaller rate cut at the Fed’s meeting next week, analysts say. Traders now see an 85% chance of a quarter-point cut next week, according to CME Group’s FedWatch.

Start slow, and upsize later? “The Fed may start rate cuts a lot like how they started the hikes: 25 bps at first and then have the option to upsize the cuts as necessary,” chief economist at Annex Wealth Management Brian Jacobsen told Reuters.

ALSO WORTH KNOWING-

UK-based private equity group Intermediate Capital Group closed a EUR 15.2 bn (USD 16.8 bn) European direct-lending fund, the largest of its kind in Europe, providing loans to private-equity backed companies. (Bloomberg)

The UK economy stagnated in July, with no growth for the second consecutive month as construction and manufacturing sectors declined. The Bank of England is anticipated to keep interest rates steady at 5% next week, with a potential cut in November. (Financial Times)

THE MARKETS THIS MORNING-

Asian markets tracked Wall Street’s gains, with the Nikkei up 3% and Topix up 2.48% this morning. South Korea’s Kospi also opened up 1.2%, while the small-cap Kosdaq gained 2.5%. Meanwhile, Wall Street futures opened lower.

EGX30	30,486	+1.3% (YTD: +22.5%)
USD (CBE)	Buy 48.31	Sell 48.45
USD (CIB)	Buy 48.32	Sell 48.42
Interest rates (CBE)	27.25% deposit	28.25% lending
Tadawul	11,766	-1.8% (YTD: -1.7%)
ADX	9,323	-0.9% (YTD: -2.7%)
DFM	4,346	-0.9% (YTD: +7.1%)
S&P 500	5,554	+1.1% (YTD: +16.4%)
FTSE 100	8,194	-0.2% (YTD: +6.0%)
Euro Stoxx 50	4,764	+0.3% (YTD: +5.4%)
Brent crude	USD 70.61	+2.1%
Natural gas (Nymex)	USD 2.28	+0.4%
Gold	USD 2,542.40	-0.03%
BTC	USD 57,360.4	-0.4% (YTD: +36.1%)

THE CLOSING BELL-

The EGX30 rose 1.3% at yesterday’s close on turnover of EGP 3.6 bn (8.3% below the 90-day average). Local investors were the sole net sellers. The index is up 22.5% YTD.

In the green: Egypt Kuwait Holding - USD (+8.8%), Fawry (+5.4%), and Emaar Misr (+5.0%).

In the red: AMOC (-2.1%), GB Corp (-1.5%), and Sidi Kerir Petrochemicals (-1.3%).

Germany’s president lands in Cairo in the first of kind visit in 25 years

President Abdel Fattah El Sisi welcomed German President Frank-Walter Steinmeier in Cairo yesterday, in the first visit by a German head of state to Egypt in nearly 25 years, according to an Ittihadeya statement. The two heads of state touched on several mutual interest files, including development, investment, and cooperation in many areas such as energy, immigration, transport, counterterrorism, and other efforts made to maintain regional stability.

Gaza was rightly top of the agenda, with both presidents emphasizing the need for an immediate end to the hostilities in a joint presser yesterday (watch, runtime: 31:05. Stienmeier made particular reference to Egypt’s diplomatic efforts to work towards a ceasefire and its facilitation of aid flows into the besieged enclave.

Education was presented as an important area of cooperation, with the German head of state discussing the plans to build 93 accredited German schools in Egypt to bring the total number to 100. A higher education agreement is also set to be signed during his visit, Stienmeier added, without providing any concrete details.

Transport also got a prominent mention, with the German president giving an overview of the numerous projects that German companies are currently working on in Egypt, before revealing that another agreement will be signed during his visit in regards to the railways operation and training.

My Morning Routine: Catalin Buliga, CTO of Vodafone Egypt

Catalin Buliga, CTO of Vodafone Egypt: Each week, My Morning Routine looks at how a successful member of the community starts their day, and then throws in a couple of random business questions just for fun. This week, we’re speaking with Catalin Buliga (LinkedIn), CTO of Vodafone Egypt.

My name is Catalin Buliga and I am a 55-year-old Romanian engineer. I have 35 years of experience in the technology industry, 26 of which were leadership roles. Technology has been my passion since childhood

My responsibility is mostly linked to how technology can improve people's lives — either through communication or digital life or just bringing joy to our lives. I always try to find an angle whenever a new technology comes out for how we can use it for a better life, rather than just for the technological benefit.

I’ve spent my entire career in Europe, with the exception of the last two years, which I have been greatly enjoying in Egypt. I started in Romania, then I worked at a different multinational company between Romania and Hungary, and later I was in charge of what we called a cluster, where I was the head for eight countries — Egypt was actually one of them, but I never thought I would end up here.

As CTO, I’m responsible for anything that relates to technology. From mobile and fixed services to financial services and cybersecurity, anything that is technical is with us. Ultimately, my responsibility is ensuring customer satisfaction with the services we provide.

The most interesting trend in the technology industry right now is AI. It’s not only impacting our industry, but all industries. We use it to improve what we do, to make it faster, and just better. We used it recently for a summer campaign on Ana Vodafone. Users could personalize a song by adding their name or a loved one’s name using the singer’s voice. We used generative AI technology in this case. We had a mn people use it within the first 16 days.

When it comes to my morning routine, I read EnterpriseAM every single day. I’m glad it’s dispatched at around 6am, because if it was any later, I probably wouldn't have time to read it. I have my coffee and read before heading to work to become familiar with what’s happening in Egypt. By the time I’m done I start getting my kids ready for school, I leave to drop them off and head to the office.

I spend 90% of my work day discussing things with my colleagues. I prefer not to use the word “meetings” because the format of these conversations differs greatly. Some of them jump into my office or I could meet with my team around a table, but we just collaborate a lot throughout the day.

I spend a lot of time raising people. I'm not here to stay forever and I want to leave something behind. So, I spend a lot of time teaching and coaching my team. And I'm proud of some of the results so far — one of my direct reports has become a chief technology officer in Congo, which fills me with pride.

It might sound like a political answer, but the one constant in all my days is the customer. As CTO, you might be tempted to work on things just for pure technology, but if it cannot be translated to benefit the customer then it lacks real value. It always comes down to the customer. If I have an issue in the network, we ask how many customers were affected and how we can solve it fast. If I’m discussing a new or existing program with the data intelligence team, I will ask how it made the customer feel. Regardless of the conversation we’re having, it’s always from the customer’s benefit angle.

Staying focused is easy. As chief of technology, I have a team of more than 2k people, mostly engineers, software developers, and trained technological professionals. I can’t manage everything alone, so I trust my teams, managers, and directors. If we agree to do something, I trust that it will get done and I don't check on them. I avoid micromanaging.

In terms of where I see myself next — I'm already 55 — I don't have to prove anything much to myself because my career went from technician to engineer to manager. When I say technician, I mean a field technician where I was looking at wires and things, and I climbed all the steps until I became CTO. I don't know when my current posting in Egypt will end, but I’m here until my role is fulfilled.

I’ve gotten better at a work-life balance. When I was younger, at the director level, and I was handling two countries at the same time, I was on a plane every other day for about three years, which was killing me and, of course, completely destroyed my personal life. My kids were not even talking to me. So I learned the hard way that if you are too ambitious, you’ll lose that balance. I had to stop abruptly and refocus on regaining that balance. Now, I tell everyone to ensure they have a work-life balance.

Weekend is for the family. Unless we have an emergency or something that requires me to jump in, then the weekend is for family. When I was young I was working even if nobody asked me, just to be competitive and to progress in my career. But when you get burnt once, you avoid touching the fire again.

I switch off work at the end of the day, but I don’t switch off my passion for technology. I spend time with my daughter, which by default takes me out of work mode. AI algorithms keep giving me things that I would find interesting. Things are moving and evolving faster. If I don’t keep up and read, I’ll miss new things within a week. So, I must stay updated and keep up with the trends and changes. I'm passionate about it — I like it and not just because it's my job.

The greatest piece of advice I’ve ever received came during a leadership training for my first managerial role in 2008. The instructor said “If you like it, enjoy it, it's gonna change.” This prepared my mindset to always be ready for change. Others are sometimes lost when things start changing, because they build their aspirations on the current situation. This is now the mantra of my career. It taught me to be adaptable when things change outside of my control.

CALENDAR

2024

SEPTEMBER

9-12 September (Monday-Thursday): The annual EFG Hermes London Conference.

12 September (Thursday): Egypt’s tender for 20 LNG cargoes is set to close.

15 September (Sunday): National holiday in observance of Prophet Muhammad’s birthday.

16 September (Monday): Egypt-UK Investment and Opportunities Forum, London.

18-20 September (Wednesday-Friday): BEBA mission to the UK, London.

24 September (Tuesday): Enterprise Finance Forum, Cairo, Egypt.

25-26 September (Wednesday-Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

25-28 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

29 September (Sunday): AmCham Egypt Real Estate Conference.

30 September (Monday): Ban on sugar exports expiration.

30 September (Monday): Portfolio Egypt 2024, Nile Ritz-Carlton, Cairo.

30 September (Monday): Egypt Business Forum, Paris.

OCTOBER

1 October (Tuesday): Egypt Business Forum, Marseille.

1-3 October (Tuesday-Thursday): Cairo Sustainable Energy Week, Cairo, Egypt.

5-8 October (Saturday- Tuesday): Techne Summit Alexandria, Biblioteca, Alexandria.

6 October (Sunday): Armed Forces Day.

10-12 October (Thursday-Saturday): Egy Health Expo, Egypt International Exhibition Center, Cairo.

10-12 October (Thursday-Saturday): The FinExpo Conference and Exhibition, Cairo.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

13-17 October (Sunday-Thursday): Cairo Water Week, Water and Climate: Building Resilient Communities, Cairo, Egypt.

20-22 October (Sunday-Tuesday): Mediterranean Offshore Conference (MOC), Alexandria, Egypt.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

NOVEMBER

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

12-15 November (Tuesday-Friday): Arab African Investment and International Cooperation Summit, Aswan, Egypt.

21 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

30 November (Saturday): Deadline to apply for renewable energy projects under the peer-to-peer (P2P) system.

DECEMBER

26 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

EVENTS WITH NO SET DATE

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

3Q 2024: Egyptian-Armenian Joint Committee.

September 2024: Turkish-Egyptian Business Council meeting in Turkey.

End of September: The Suez Canal Economic Zone (SCZone) roadshows in Paris and Marseille, France.

First week of November: Egypt-Turkey high-level trade consultation mechanism.

November 2024: Egypt to host the World Urban Forum (WUF12).

End of 2024: The launch of the high-speed train line linking Ain Sokhna with Al Alamein City.

2025

May 2025: Egyptian Exporters Association (Expolink) exhibition, Italy.

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

20 January-7 February: Egypt to host the African Games

EVENTS WITH NO SET DATE

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place.

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