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Egypt targets 16% tax-to-GDP ratio with sweeping new reform package

1

WHAT WE’RE TRACKING TODAY

The Mediterranean prepares for its most aggressive drilling cycle yet

Good morning — but more importantly, kul sana wento taybeen. Kicking off today’s issue is news that the Finance Ministry is readying a 49-reform tax package aimed at boosting the tax-to-GDP ratio to 16%.

Also catching our attention this morning is banks officially beginning carbon mapping under CBE orders to tie future lending to climate compliance, a move essential for exporters to survive the EU’s looming carbon barriers. Meanwhile, the state is successfully de-risking infrastructure debt by tapping China Exim Bank for a CNY-denominated loan for the LRT and DPI, and Alameda finalized the sector’s largest-ever private equity transaction, providing the war chest for a regional expansion into the Gulf.

Our first issue this Ramadan also features the first in a special series of holy-month-themed My Morning Routines. We’re catching up with Red Bull Egypt General Manager Hesham Sewilam to see how the man behind the energy drink keeps his own wings flapping during the fast.

So, when do we eat? Maghrib prayers are at 5:47pm in the capital, and you’ll have until 5:03am tomorrow to hydrate and caffeinate ahead of fajr.

***

WISH THIS MORNING’S ISSUE was a podcast? We’ve got you. Tap or click here to listen to Morning Drive, a 10-minute version of today’s issue crafted for you to enjoy with your morning coffee, while getting the kids ready for school, or while stomping around the house wondering where the [redacted] you left your [redacted] reading glasses.***

Watch this space

ENERGY — This year will see the largest gas well-drilling program ever conducted in the Mediterranean, executed in partnership with international oil companies, according to a statement from the Oil Ministry. Record drilling is already underway across multiple production areas to test new gas reservoirs, according to the statement, including Shell’s West Mina gas field, which produces 160 mmcf/d.

Why this matters: Upstream activity is now the fastest lever the state has to stabilize supply, reduce the import bill, and lock in medium-term production. Against the backdrop of international energy players warning that old contracts don’t add up, the Oil Ministry started tightening the screws on upstream timelines, with a new use-it-or-lose-it contracting framework set to streamline approvals and push domestic output.


PORTS — Egypt’s ports and customs outlets will operate all year round, including on official holidays, as part of efforts to reduce total customs clearance time to just two days, according to a statement from the Finance and Investment Ministries. The move aims to significantly lower storage costs and increase inventory turnover for manufacturers. Ports and customs outlets will only take breaks on a total of four days, coinciding with Eid El Fitr and Eid El Adha.


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Happening today

Prime Minister Moustafa Madbouly and Foreign Minister Badr Abdelatty are in Washington for the inaugural meeting of the Board of Peace today, according to a cabinet statement. The meeting is set to push for the implementation of the second phase of the Gaza ceasefire agreement and to raise money for reconstruction efforts.



PSA-

About to jump on a flight in or out of Egypt? You’ll still need to remember to bring a pen to fill out a landing card. Despite Civil Aviation Minister Sameh Elhefny announcing early last month that the paper cards would be replaced by a digital system starting 1 February, several travelers have confirmed to EnterpriseAM that the old system is still in place.


WEATHER- It’s another coolish day in Cairo today, with a high of 21°C and a low of 12°C, according to our favorite weather app.

It’s a tad cooler still in Alexandria, with a high of 20°C and a low of 11°C.

And over the weekend, expect to see temperatures staying around the low twenties and sunny skies.

The big story abroad

Don’t hold your breath waiting for the Fed to continue its easing policy. Minutes from the Federal Reserve’s January meeting showed that policymakers anticipated “slower and more uneven than generally expected” progress toward its inflation target of 2%. That said, Fed members indicated that keeping rates steady would “likely be appropriate […] for some time as the committee carefully assesses incoming data.”

The greenback was slightly elevated by the news in early trading, maintaining earlier gains against the JPY and the EUR.

ALSO- Social media giant Meta is in hot water after its CEO Mark Zuckerberg testified incourt that the company no longer seeks to maximize the time spent by users on its platforms and bars kids under 13 from logging on. The CEO’s claims ran counter to internal emails and documents indicating otherwise.

Wishing you peace, joy, and endless blessings. Ramadan Kareem from Somabay.

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The Big Story Today

Government readies 49 reforms to bridge revenue gap

The Finance Ministry is preparing to roll out a sweeping package of 49 tax and customs reforms designed to catalyze capital markets and drive both foreign direct investment and portfolio inflows, five government sources tell EnterpriseAM. Set to take effect in the upcoming fiscal year, the package represents a fundamental pivot toward a more predictable and investment-friendly fiscal framework, we were told.

Why it matters: The government aims to boost tax revenues by 1-2% of GDP within three years by expanding the tax base rather than hiking rates, our sources tell us. The goal is to raise the tax-to-GDP ratio to 15-16%, bringing Egypt in line with middle-income peer averages from its current position of 12.5%.

Included in the package is a plan to overhaul the tax treatment of gains on unlisted shares during acquisitions to better reflect long-term acquisition costs. The new mechanism will calculate taxable gains as the difference between the current share price and the purchase price after deducting the impact of accumulated inflation over the holding period. The move is intended to incentivize investors to retain assets for longer periods and curb short-term speculation, a senior government official tells us.

The ministry also plans to unify the tax treatment for listed and unlisted shares by equalizing stamp duty across both while maintaining incentives for companies to list on the EGX to broaden the investor base, according to the sources.

The government is doubling down on its plan to introduce a 0.125% stamp tax on EGX transactions, which will apply to both buyers and sellers, whether they are residents or not. The mechanism is expected to bridge the EGP 10 bn revenue gap left by the state’s original capital gains tax projections, we were told.

Included in the 49 reforms are tax exemptions for real estate, gold, silver, and metals investment funds, in a move aimed at supporting the growth of these vehicles and deepening the market.

To address double taxation concerns, the ministry is set to overhaul the withholding tax regime to fast-track refunds, capping the repayment period at no more than 45 days.

Under the plan, the tax dispute settlement act will be extended through May, with the possibility of a one-time ministerial extension to clear backlogs and improve voluntary compliance, according to one of the sources.

What’s next? The government is preparing to submit the package of tax and legislative reforms to the parliament next week, paving the way for approval and implementation between May and June, our sources said.

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INVESTMENT WATCH

DPI wagers big on Egyptian healthcare with record Alameda investment

Our friends at Development Partners International (DPI) finalized their USD190 mn minority stake investment in Fahad Khater’s Alameda Healthcare, marking the largest private equity transaction in Egypt’s healthcare sector to date, EFG Hermes, the transaction’s financial advisor, said in a statement (pdf).

The details: The transaction, primarily a capital increase, was made through DPI’s fourth fund alongside a consortium of institutional investors and development finance institutions. DPI Partner Ziad Abaza, a longtime friend of EnterpriseAM, led the transaction, which keeps Khater, Alameda’s chairman, as the majority shareholder.

Why it matters: The investment gives Alameda gear to take its clinical model to Saudi Arabia and the UAE, where plans are in the final stages and a formal announcement is expected later this year. At home, Alameda will double down on hospital and clinical capacity and upgrade medical technologies and services across its list of household brands, including As-Salam International and Dar Al Fouad hospitals, the German Rehabilitation Center, and Tabibi 24/7, among others.

REMEMBER- Alameda has previously announced plans to invest USD 250 mn by 2028, along with adding 600 beds in three new hospitals and expanding in Saudi Arabia.

Alameda has accelerated its expansion strategy since announcing the agreement back in July, acquiring a majority stake in an Egyptian ophthalmology group and expanding into Sub-Saharan Africa by opening its first clinic in Kenya. It also unveiled a multi-year partnership with Houston Methodist in the US to enhance care standards at New Cairo’s Madinaty Hospital, and it is nearing an enterprise-wide affiliation with Guy’s and St Thomas’ in the UK.

What else is in the pipeline? “Local expansion projects include increasing capacity and number of beds in existing facilities, completion of new ongoing projects (mainly Madinaty Hospital), funding capex in existing assets, as well as a number of new greenfield and brownfield ventures that are currently being assessed by the management,” a DPI spokesperson tells us.

DPI has big plans for Egypt: London-based DPI has so far contributed over USD 1 bn out of its total assets under management to investments in Egyptian markets, DPI Venture Capital General Partner Mohamed Aladdin has previously told us. The private equity giant is currently building a pipeline of potential investments in Egypt across high-growth sectors, including manufacturing, fintech, financial services, FMCG, retail, and healthcare, a DPI executive has previously told us.

“Egypt remains a key market for us,” the spokesperson said. DPI is closely watching several sectors that show high growth potential, they added, explaining that the firm sees strong momentum from entrepreneurial founders and management teams who are ready to scale. “We’re always looking for the right long-term partners.”

ADVISORS- Our friends at EFG Hermes Investment Banking were the sole M&A financial advisors on the transaction. Addleshaw Goddard served as international counsel to Alameda Healthcare, with ALC Alieldean Weshahi & Partners and Matouk Bassiouny & Hennawy providing local juridical support. White & Case acted as both international and local counsel to DPI, whose advisory consortium also included PwC, Debevoise & Plimpton, and Rothschild.

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Transport

China’s rail loan keeps Egypt’s USD in the vault

Egypt is making progress in shielding its infrastructure projects from USD volatility with a new USD 200 mn concessional loan from China Exim Bank — earmarked for phase three of the light rail transit system — to be disbursed in CNY, a government official tells EnterpriseAM. The loan with a competitive 2% interest rate, a five-year grace period, and a 15-year repayment schedule will be used to purchase eight new trains and install electromechanical systems.

Why this matters: While much of Egypt’s infrastructure ambitions directly pressure the country’s USD reserves, this loan is a move toward diversifying debt sources for major state projects. Additionally, as the Suez Canal Authority collects CNY for transit tolls and Chinese manufacturers in the Teda zone increase their local footprint, the state is building a pool of CNY revenue that can be used to service this debt directly.

The loan isn’t just an FX hedge, with the funding set to accelerate the project’s completion, an MP told EnterpriseAM on the condition of anonymity.

But concessionality usually comes with strings. While the 2% rate is attractive, the loan is almost certainly tied to procuring those eight new trains from Chinese firms like AVIC or CREC. This is as much a subsidy for Chinese industry as it is a development loan for Egypt’s transport network.

The move is part of Egypt’s larger push to diversify its creditor base away from banks’ and Bretton Woods institutions’ USD-centric financing options, with the country having already issued a CNY 3.5 bn panda bond issuance in 2023 and liquidity swaps with the China Development Bank. Looking ahead, government officials have previously told us we may see more panda bond issuances, and there’s been talk of Chinese banks opening up shop in Egypt alongside talks on better facilitating local currency trade between the two nations.

What’s next? The loan agreements are currently with the House for ratification, our source tells us.

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Climate

Banks begin carbon mapping to tie credit to climate compliance

Four government entities and the banking sector began a comprehensive mapping of corporate carbon emissions to build a national database. The goal is to create the data infrastructure needed for Egyptian exports to meet tightening international environmental standards without imposing immediate fees on investors, four government and banking officials tell EnterpriseAM.

Why it matters: Egypt is racing against a 2027 deadline. Although there’s no formal agreement, the EU seems to be signaling a temporary exemption from the Carbon Border Adjustment Mechanism following a diplomatic push — but that grace period won’t last. By mapping emissions now, the state is doing the ground work to ensure they can prove their green credentials and aren’t taxed out of existence in European markets later this decade.

The Central Bank of Egypt has instructed banks to map clients in high-emission sectors as part of a move linking credit decisions to environmental compliance, two of our sources tell us. The move is part of a structural reform tied to Egypt’s IMF Resilience and Sustainability Facility and necessitates semiannual reports on corporate environmental commitments. The Financial Regulatory Authority is following suit by requiring non-banking financial institutions to disclose emissions and begin offsetting them.

What’s next? The government is working with German development agency GIZ to finalize the compliance framework. Once enough companies are mapped and certified, the path clears for the launch of a functional carbon market on the EGX, allowing firms to trade offsets and monetize their green transitions.

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ALSO ON OUR RADAR

General Electric eyes local radiology contrast dyes factory

US-based General Electric is mulling setting up a local factory for the production of radiology contrast dyes, according to a Health Ministry statement. The company plans to produce iodine-based contrast (used in CT scans and angiography) and gadolinium-based contrast (used in MRIs). The first phase of the project will cover 50% of local demand, before gradually expanding to meet all domestic needs.

Why this matters: Egypt currently imports all its radiology contrast agent needs, with annual consumption estimated at 2.3 mn ampoules worth about EGP 1.6 bn. The project will help foot the healthcare industry’s import bill for these radiology materials, ease pressure on FX, strengthen supply security for critical medical inputs, and stabilize local prices.

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PLANET FINANCE

Maybe the crowd is the smartest economist after all

Prediction markets are booming, evolving rapidly from novelty wagering sites into a serious financial infrastructure that is statistically embarrassing Wall Street, The New York Times reports. Trading volume on prediction platforms surpassed USD 26.2 bn in January, with platform Kalshi alone recording nearly USD 10 bn. While sports wagering drives much of this liquidity, a significant portion — over USD 60 mn on any given day — is now staked on serious economic and political questions, offering a real-time “truth” that professional forecasters are finding impossible to ignore.

This surge has revealed a startling trend: the crowd is often just as smart, if not smarter, than the highly paid professionals. A recent working paper published by the National Bureau of Economic Research found that over a five-year period, traders on Kalshi were as statistically accurate as professional economists in predicting economic indicators — and even more precise at forecasting inflation. Another study by researchers from the London Business School and Yale found that bettors on Polymarket forecast corporate earnings more accurately than the analysts paid to advise investors.

The reason is simple: incentives. Professional analysts often face structural conflicts, researchers argue. They may hesitate to publish an outlier forecast for fear of embarrassment or be influenced by their firm’s need to drive trading commissions. However, anonymous traders face no such social pressure. “The nice thing about prediction markets is that you have to put your money where your mouth is,” said Theis Jensen, a Yale professor who studied the phenomenon.

The rapid commoditization of real-world events has triggered a fierce legislative war that threatens to strangle the industry, The Guardian reports. Because platforms like Kalshi classify their products as “event derivatives,” they operate under the oversight of the Commodity Futures Trading Commission (CFTC), bypassing US state wagering laws.

This distinction has enraged US state regulators. At least 20 federal lawsuits have been filed against major platforms, with state attorneys general arguing they are operating illegal sportsbooks disguised as financial exchanges. Despite the backlash, CFTC Chair Michael Selig said the agency had filed court briefs defending its “exclusive jurisdiction” over prediction markets and vowed not to allow state governments to undermine federal authority.

As US courts decide whether these platforms are the future of finance or merely unregulated casinos, the economic implications are profound. Some economists, like Justin Wolfers at the University of Michigan, suggest that institutions like the Federal Reserve should formally incorporate this data. Yet, he notes a deep institutional resistance. “There’s a deep problem, which is, if you were to do this, you democratize decision making,” Wolfers said, adding that “right now the senior economist has a ton of power. Their view goes.”

MARKETS THIS MORNING-

Asia-Pacific markets are in the green in early trading this morning, mirroring gains seen on Wall Street as tech stocks rebound from earlier losses. With the Shanghai Composite and Hang Seng still closed in observance of the Lunar New Year, South Korea’s Kospi is leading gains.

EGX30

52,222

+0.8% (YTD: +24.9%)

USD (CBE)

Buy 46.94

Sell 47.08

USD (CIB)

Buy 46.96

Sell 47.06

Interest rates (CBE)

19.00% deposit

20.00% lending

Tadawul

11,155

+0.5% (YTD: +6.3%)

ADX

10,755

+1.2% (YTD: +7.6%)

DFM

6,765

+1.2% (YTD: +11.9%)

S&P 500

6,881

+0.6% (YTD: +0.5%)

FTSE 100

10,686

+1.2% (YTD: +7.6%)

Euro Stoxx 50

6,103

+1.4% (YTD: +5.4%)

Brent crude

USD 70.31

-0.1%

Natural gas (Nymex)

USD 3.07

+2.0%

Gold

USD 4,986

-0.5%

BTC

USD 66,701

-0.7% (YTD: -23.9%)

S&P Egypt Sovereign Bond Index

1,027

+0.2% (YTD: +3.5%)

S&P MENA Bond & Sukuk

153.59

+0.1% (YTD: +1.1%)

VIX (Volatility Index)

19.31

-4.8% (YTD: +34.0%)

THE CLOSING BELL-

The EGX30 rose 0.8% at yesterday’s close on turnover of EGP 8.8 bn (43.4% above the 90-day average). International investors were the sole net sellers. The index is up 24.9% YTD.

In the green: Raya Holding (+12.5%), Beltone Holding (+6.4%), and Misr Cement (+6.4%).

In the red: Oriental Weavers (-0.8%), Heliopolis Housing (-0.7%), and CIB (-0.7%).

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My Morning Routine

My Ramadan Routine: Hesham Sewilam, general manager of Red Bull Egypt

Hesham Sewilam, general manager of Red Bull Egypt: For a special Ramadan edition of our weekly My Morning Routine column, which we are running through the holy month, we spoke to Red Bull Egypt General Manager Hesham Sewilam (LinkedIn). We asked Sewilam the usual questions to find out how a successful member of the community starts their day and threw in a few more to find out how he adjusts to Ramadan and what he looks forward to in the holy month. Edited excerpts from our conversation:

My name is Hesham, and I’m currently the general manager of Red Bull Egypt. My career has been largely in consumer goods across Egypt, the Middle East, and in global roles, and I’ve worked exclusively with multinationals. About half of my career has been in general management and CEO roles, and the other half has been mostly sales, with some marketing as well. I’ve also held board positions, including with Azza Fahmy. And outside of work, I’m a father of three — Malak, who is 20, Amina, who is 12, and Hassan, who is 10.

Exercise is a constant in my routine, even if it’s just a one-hour walk. Supplements also play an important role in helping me maintain my energy and stamina. But the key thing I do is channel my energy based on how my mind performs throughout the day. I’m a morning person, so I reserve the morning — typically between 8am and 11am — for high-focus tasks like presentations, answering important emails, and strategic work. This is when I have the most stamina and mental clarity.

After that, I schedule meetings and interactions with people while my energy is still high. Later in the day, when my energy starts to decline, I shift to lower-intensity tasks like networking calls and stakeholder management. I’m very disciplined about this. I don’t schedule high-intensity meetings late in the day, and Sundays are sacred no-meeting days, so I can focus on strategic work.

During Ramadan, I maintain the same working hours, but I adjust my routine. Instead of exercising in the morning, I exercise before iftar. I also minimize meetings, especially later in the day, and focus more on individual work and stakeholder communication. Ramadan is a time when I focus much more on my spiritual, physical, and emotional well-being. I pray after iftar, sleep early, and prioritize family connection. My sleeping patterns actually improve during Ramadan because I maintain a consistent schedule and avoid late nights.

Staying focused and organized comes down to self-awareness. You need to understand when your energy and stamina are at their peak and plan your day accordingly. Exercise plays a big role in helping me stay focused, and protecting my time and energy is essential.

Family connection and spiritual well-being are constants in my life, especially during Ramadan. It’s also one of the few times I’m able to slow down and watch TV series, which I find meditative, along with prayer and spending time with family.

Work-life balance is something I’ve taken seriously for about 10 years now. Earlier in my career, I was operating at an unsustainable sprint. I realized that productivity — not working longer hours — is the key. I focus on being highly productive during my eight-hour workday, so I can dedicate time and energy afterward to my family, my physical well-being, and my spiritual and emotional well-being. Becoming a parent and reaching my 40s were important moments of realization that reinforced the importance of balance. Maintaining strong relationships, networking, and personal well-being has actually made me better at my job, not worse.

My job is really about people development. Developing my team — and developing people who can become stronger than me — occupies a lot of my time and energy. I also support them by bringing the external world into their world, so they’re not just focused on their day-to-day jobs internally. I make sure strategic priorities are aligned with market needs and with the global company, and I focus heavily on stakeholder management, both internally and externally. I try as much as possible not to get into the day-to-day, so I can dedicate my energy to the higher-level strategic part of my job.

At Red Bull, our mission is about giving wings to people. Giving wings internally to employees, and externally to artists, athletes, partners, and distributors. Giving wings could mean helping people focus when they’re studying, working, exercising, or driving — but it also means developing their talents and capabilities, so they can become the best version of themselves. The company started with a physical drink, but it evolved into something broader — including corporate projects like owning two Formula 1 teams, five football teams globally, and multiple partnerships that support talent and performance.

In consumer goods, the biggest trends right now are around healthier lifestyles and healthier consumption. Marketing is increasingly centered around content, and on the commercial side, e-commerce continues to grow in importance. Consumer goods is a very visible industry — you can walk into a supermarket and immediately see how companies position themselves, what their strategies are, and how they execute it.

Personally, I want to continue maintaining this balance and improving how I dedicate time to family, well-being, and personal growth. Professionally, I want to continue learning and developing within my role, while also expanding my investments across different asset classes on the side.

The best piece of advice I’ve been given came from my manager in my current role. He told me that to do my best in my job, I shouldn’t treat it as a job — I should treat it as a passion. That’s something I live by every day.


2026

FEBRUARY

19 February (Thursday): First day of Ramadan.

25 February (Wednesday): IMF’s Executive Board meeting for our sixth and seventh reviews

MARCH

15 March (Sunday): IMF to hold its seventh review of Egypt’s USD 8 bn EFF arrangement.

21 March: (Saturday): Eid El Fitr starts (TBC).

30 March – 1 April (Monday-Wednesday): Egypt International Energy Conference and Exhibition (EGYPES).

APRIL

2 April (Thursday): Monetary Policy Committee’s second meeting of 2026.

12 April (Sunday): Coptic Easter.

25 April (Saturday): Sinai Liberation Day.

MAY

1 May (Friday): Labor Day.

21 May (Thursday): Monetary Policy Committee’s third meeting of 2026.

27-29 May (Wednesday-Friday): Eid El Adha (TBC).

JUNE:

30 June (Tuesday): National holiday in observance of the June 30 Revolution (TBC).

JULY

9 July (Thursday): Monetary Policy Committee’s fourth meeting of 2026.

23 July (Thursday): National holiday in observance of Revolution Day (TBC).

AUGUST

20 August (Thursday): Monetary Policy Committee’s fifth meeting of 2026.

26 August (Wednesday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

SEPTEMBER

15 September (Tuesday): IMF to hold its eighth review of Egypt’s USD 8 bn EFF arrangement.

24 September (Thursday): Monetary Policy Committee’s sixth meeting of 2026.

27-29 September (Sunday-Tuesday): Global Conference on Population, Health, and Human Development.

OCTOBER

6 October (Tuesday): Armed Forces Day.

29 October (Thursday): Monetary Policy Committee’s seventh meeting of 2026.

DECEMBER

17 December (Thursday): Monetary Policy Committee’s eighth meeting of 2026.

EVENTS WITH NO SET DATE

Early 2026: Passenger operations on the New Administrative Capital-Nasr City monorail scheduled to begin.

Early 2026: The government will launch the second package of tax breaks.

1Q 2026: Trial operations for the Ain Sokhna-Sixth of October section of Egypt’s first high-speed rail line scheduled to begin.

1Q 2026: Turkish President Recep Tayyip Erdogan to visit Egypt.

May 2026: End of extension for developers on 15% interest rates for land installment payments.

2H 2026: Operations at Deli Glass Co’s new USD 70 mn glassware factory kick off.

2027

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

April 2027: Tenth of Ramadan dry port and logistics hub to begin operations.

EVENTS WITH NO SET DATE

2027: Egypt to host EBRD’s annual meetings.

2027: Egypt-EU Summit 2027.

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

September 2028: First unit of the Dabaa nuclear power plant begins operations.

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