Eni inks agreement with EGAS to boost LNG exports to Europe

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What We're Tracking Today

THIS MORNING: Everyone must register for VAT + happy holidays, y’all

Well, friends, we’ve made it through another workweek together and are fast-approaching

the midpoint of Ramadan. We hope the week was good to you and that you’re looking forward to a relaxing weekend.

It’s another very heavy morning for news:

Energy and commodities top the headlines today — and it’s all very pertinent to the turmoil taking place on the global stage. Italy’s Eni will be taking a leading role in helping us to ramp up our LNG exports to Europe as it looks to wean itself off Russian energy. And state grain buyer GASC has concluded its first successful tender since war broke out in Ukraine, amid a very tight market that saw prices at their highest in nearly six years.

Meanwhile, our Emirati friends at ADQ have confirmed that they were behind the massive purchases in EGX-listed stakes yesterday meant to help shore up our economy. On a related note, rumor has it that healthy foods outfit Abu Auf could be on an ADQ subsidiary’s shopping list.

^^ We have all of this and more in this morning’s news well, below.

Need something to do in that last hour before iftar? May we immodestly suggest you check out our podcast on the future of fintech in Egypt (Apple Podcasts | Google Podcasts | Spotify | our website) — part two drops on Sunday. Or learn about Shift EV, a remarkable startup that’s developed proprietary battery technology it’s using to retrofit our nation’s delivery fleets into electric vehicles.

PSA- All businesses now have to register for VAT — even if their revenues are beneath the VAT registration threshold, Tax Authority head Reda Abdelkader said in a statement to Enterprise yesterday. Businesses making less than EGP 500k in revenues a year still aren’t required to charge and remit VAT on their sales, but they do need to register with the authority via the unified tax platform.

HAPPY HOLIDAYS: We wish a very happy Passover, which starts tomorrow evening (Friday, April 15) to all our readers who observe — and a happy Easter in advance to those of our readers who follow the Western Christian calendar. Good Friday is tomorrow, while Easter is this coming Sunday. (Coptic Easter will be observed this year on Sunday, 24 April.)

SO, WHEN DO WE EAT? You’ll be breaking your fast at 6:22pm CLT this evening in the capital city, and fajr prayers are at 3:59am.

NEXT WEEK-

EgyptAir will operate daily direct flights between Cairo and the eastern Libyan city of Benghazi starting 18 April, Youm7 reports. This comes as Egypt and Libya work to strengthen ties, with Egypt just yesterday playing host to talks to help Libya find a solution for its ongoing political crisis (find more on that in the Diplomacy section in this morning’s news well, below).

Early pensions ahead of Eid: Gov’t will disburse pensions for retired public sector workers early this month, on 22 April, ahead of Eid El Fitr and Coptic Easter, the National Authority for Social Ins. announced yesterday.

Global finance chiefs to convene food security summit: US Treasury Secretary Janet Yellen will next week convene a summit to discuss emergency financing for countries struggling with rising food prices, Bloomberg reports. The heads of the IMF and the World Bank, and reps from G7 and G20 countries are set to attend the meeting, where they will “try and think about how we can stave off starvation around the world” as the war in Ukraine sends commodities prices spiraling, Yellen said.

Int’l policymakers are sounding the alarm on food: The meeting was announced as the heads of the IMF, the WB, the World Food Programme, and the World Trade Organization issued a joint statement calling for “urgent coordinated action on food security.” They said steps could include providing hardest-hit countries with emergency grants to help balance their books, sending food supplies, upping agricultural production, and keeping trade flows open.

RECOMMENDED READING- For more on how the World Bank sees the Ukraine crisis impacting food and climate issues — as well as wise words on how to steer a country through a crisis — check out our recent interview with Mari Pangestu, the WB’s managing director of development policy and partnerships.

SPEAKING OF THE WB + IMF: The two international lenders’ spring meetings are taking place in Washington next Monday, 18 April, and will run until Saturday, 23 April.

THE BIG STORY ABROAD = WAR WATCH. Most of the international press has its eyes glued to Ukraine this morning. Here’s your Reader’s Digest version of the latest developments:

Annual inflation in Russia hit 17.5% last week, its highest since February 2002. (Reuters)
It’s official: The Biden administration is sending Ukraine an additional USD 800 mn in military aid. (Statement)
Some 1k Ukrainian marines have surrendered to Russian forces in the besieged eastern Ukrainian city of Mariupol. (Reuters)
Regional allies head to Ukraine in show of support: The presidents of Poland, Lithuania, Latvia and Estonia landed in Kyiv yesterday to express their support for President Zelensky. (AP)
Russia has said the flagship vessel in its Black Sea fleet was severely damaged in what Ukraine is claiming as a missile strike on its part. (Reuters)

MARKET WATCH-

Don't expect moderate rate hikes to be enough to tame inflation: The Federal Reserve is going to need to curb economic growth to rein in inflation and it's a “fantasy” to think otherwise, a top Fed official told the Financial Times. James Bullard, president and CEO of the Federal Reserve Bank of St Louis, said the bank needs to be more aggressive to reverse the US’s highest inflation in 40 years.

The UK also saw inflation a hitting multi-decade high in March: Official figures out yesterday showed inflation rising to 7% in March from 6.2% the month prior, its highest level since March 1992.

Across the pond, the Bank of Canada hiked its benchmark interest rate to 1%, with the 50 bps hike being the single largest jump in rates since 2000. Inflation is running at a 30-year high.

SIGN OF THE TIMES- Turkish exporters may be forced to convert more of their hard currency revenues into TRY as part of government plans to boost reserves, Bloomberg reported, citing sources in the know. The government currently requires companies to convert 25% of their income into local currency, but under plans being discussed at the central bank this could rise to 40%. The TRY has been one of the worst-performing EM currencies of 2022.

CIRCLE YOUR CALENDAR-

Companies have less than a week to file their first quarterly ESG compliance report: Listed firms and non-bank financial services companies need to submit their first quarterly ESG report by 20 April, the Financial Regulatory Authority (FRA) announced last week. The regulator is making it mandatory for corporates to publicly disclose their performance on key environmental, social and governance metrics each year when they submit their annual financial statements, starting 2023. Reach out to Moustafa Taalab at InkankIR, our parent company, if you need some help.

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

Egypt to increase LNG exports to Europe with Eni

Eni signs agreement to supply more of our LNG to Italy, Europe: The Italian energy firm yesterday signed an agreement in Cairo with the state-owned Egyptian Natural Gas Holding Company (EGAS) designed to “maximize” Egyptian LNG exports to Europe and boost Eni’s gas production here, according to a cabinet statement.

“The agreement aims to promote Egyptian gas export to Europe, and specifically to Italy, in the context of the transition to a low carbon economy,” Eni said in a statement.

The details: The agreement will see production increase at the two companies’ gas joint ventures; redouble Eni’s exploration efforts in its newly-acquired concessions in the Western Desert, the Nile Delta and Mediterranean; and “identify [how to] to maximize short-term gas production,” Eni said. Along with the reopening of the Damietta LNG plant last year — which Eni runs and in which it holds a 50% stake — yesterday’s agreement will boost the Italian firm’s LNG exports to Italy and elsewhere in Europe to 3 bn cubic meters this year.

We had an inkling this was coming: Eni in March pledged to bring more than 14 trn cubic feet of additional gas to the global market and mitigate Europe’s energy crisis by “leveraging established alliances with producing countries,” including Egypt.

Why now? Europe is looking to wean itself off Russian energy amid the fallout from war in Ukraine, which may soon see the bloc ban Russian oil altogether. We’re a strong option given our prime location just across the Med; our 2018 discovery of the largest gas field in the region; two operating liquefaction plants; and a pact to bring in Israeli gas from our neighbours’ massive offshore fields. Egyptian gas is usually snapped up by Asian buyers, but shipments to Europe rocketed last year to more than 2 mn metric tons, up from just 270k the year before. And discussions on accelerating that trend have intensified with the war’s outbreak — top EU official Frans Timmermans just days ago told Prime Minister Mostafa Madbouly that the bloc is looking to up its imports of liquefied natural gas (LNG) from Egypt in the short term.

Italy is also tapping our neighbors in the region for more gas: The country’s prime minister was in Algeria on Tuesday to sign an agreement upping its purchases of Algerian fuel, Bloomberg reports. Eni — which is majority state-owned — is also trying to ramp up production in Libya, as well as in several African and Southeast Asian countries in which it operates.

This may be easier said than done: Ramping up production has proved difficult for some of our oil-producing neighbors in the OPEC+ cartel amid snarled supply chains and staffing issues. Meanwhile, Oil Minister Tarek El Molla said late last year that Egypt’s LNG terminals were running at maximum capacity, as the country tries to capitalize on the surge in natural gas prices overseas.

But Eni is well placed to help: The company has been operating in Egypt for decades, and its involvement in both gas production and liquefaction, combined with its European ties, means it can work to both up supply and facilitate exports.

And the firm has been very active in our energy sector lately: It was awarded fresh gas exploration blocks in the 2021 bid round, has committed to spend at least USD 1 bn to develop some of its local concessions, and could also partner with us on carbon capture and green hydrogen projects in the run up to COP 27. Eni also today announced fresh discoveries totaling 8.5k barrels of oil-equivalent per day in its Meleiha concessions in the Western Desert.

The news received attention from the foreign press: Reuters and Bloomberg both covered the story.

GASC concludes latest tender, with offers roughly 50% above pre-war prices

GASC has pulled off its first successful wheat tender since Russia invaded Ukraine — but it didn’t come cheap. The General Authority for Supply Commodities (GASC), Egypt’s state grain buyer, bought 350k tons of wheat from France, Russia, and Bulgaria in its first successful tender since war broke out in Europe’s breadbasket, Bloomberg reports. The average price (accounting for freight) stood at nearly USD 490 per ton — the highest in nearly six years, and up by around half what GASC paid in its last international purchase in mid-February, says the business newswire.

We knew that wheat purchases would be pricier — but not this pricey: The government in early March said rising wheat prices would cost it an additional EGP 15 bn this fiscal year, penciling the cost in at USD 350 per ton. Paris wheat futures rose to close near an all-time high of USD 445 per ton yesterday.

GASC tried a different tack to secure supply: This was GASC’s first limited tender in years, with offers only open to European nations among the 16 countries accredited to supply the state. Six European companies made offers, Bloomberg says citing unnamed traders — around half the number GASC is accustomed to receiving in normal circumstances.

France made good on its pledge to “stand by Egypt” on wheat and make sure we get what we need, leading the purchases. GASC also secured one shipment of Russian wheat — which is less surprising than you might think given that Russian supply to private and public buyers has continued uninterrupted (and even grown) since the war began. Bulgaria also sold us a single cargo.

Look for the grain to be shipped in late May or the first half of June.

The tender was a test of the wartime wheat market. GASC put tenders on hold in early March after being forced to cancel two in a row, as the war blocked Ukrainian exports and sent ins. and shipping costs skyrocketing, upending the global market. We typically source north of 80% of our wheat imports from Russia and Ukraine.

GASC is working on diversifying its options after reserves dipped, having recently held talks with India, Argentina, France and the United States on potential supply. We had about 2.6 months of wheat on hand as of last week, down from the four-month figure the government announced in early March.

The government remains focused on the local harvest: The government will spend around EGP 36 bn to purchase 6 mn tons of local wheat this year, roughly doubling its purchase budget from last year.

Meanwhile, Ukrainian wheat apparently remains blocked by the war: Ukrainian authorities have accused Russia of continuing to block one ship that had been loaded for wheat to Egypt from leaving a Russian-occupied port on the Black Sea, Al Monitor reported. Our imports of Ukrainian wheat plunged 42% y-o-y last month, to record 124.5k tonnes.

IN OTHER COMMODITIES- Our soybean imports are set to rise for marketing year 2022-2023: Egypt’s soybean imports will rise 11% in the October 2022-September 2023 marketing year on the back of our increasing domestic crush capacity, the US Agriculture Department has said in a report (pdf). We’ll import around 4 mn metric tonnes (MMT) in the coming year, up from 3.6 MMT in MY 2021-2022, after the two companies responsible for soybean crushing in Egypt — Soyven and Alex Seeds Company — raised capacity by more than 6%.

Our consumption is also on the rise: Our forecasted soybean consumption for the upcoming marketing year is up 6.6% from the current year to sit at around 4.05 MMT. Local production will rise by more than a third to 34k MMT.

US-origin soybeans are leading our imports: Our US-origin soybean imports make up 72.2% of our imports, with the report citing a dramatic increase between MY2016-2017 and MY2020-21.

What do we need all these beans for? Soybeans form the basis of poultry feed, among several other uses.

Abu Dhabi sovereign fund confirms blockbuster EGX stake buys + Could Abu Auf be next in line for ADX investment?

ADQ speaks on EGX acquisitions: Abu Dhabi wealth fund ADQ has confirmed its acquisition of stakes in five EGX-listed companies this week, saying in a statement yesterday that the move reflects its “continued confidence in Egypt’s strong economic potential.” The fund acquired shares in CIB, Fawry, Abu Qir Fertilizers, Mopco, and Alexandria Container & Cargo Handling for around USD 1.8 bn as part of an agreement reached last month to provide Egypt with emergency liquidity in response to the fallout from the Ukraine conflict.

ADVISORY- Matouk Bassiouny & Hennawy acted as legal counsel to ADQ in the transaction, the law firm said (pdf) yesterday.

WATCH THIS SPACE- Is Abu Auf next in line? Agthia, the ADQ food subsidiary that acquired Ismailia, is in talks with Abu Auf’s parent company AUF on a potential stake sale, Al Borsa reports, citing unnamed sources. The potential transaction is connected with AUF’splans to list as much as 49% of its shares on the EGX — which we had been expecting sometime this quarter — in an IPO quarterbacked by EFG Hermes, the newspaper claims. We know that ADQ is also targeting unlisted firms as part of its USD 2 bn investment push. Agthia in early March reiterated that it is pursuing further acquisitions in Egypt’s frozen meat and fast food industries.

Our friends at Abu Auf are tight-lipped: “The company is continuously studying growth options to offer the best possible experience for our loyal clients, ensure our strong brand reaches the widest possible base of consumers in Egypt and the MENA region, and maximize value for our shareholders,” CEO Ahmed Auf told Enterprise in a statement. “The company intends to maintain its policy of not commenting on market rumors or speculation and will disclose any relevant corporate action as and when necessary.”

And IPO plans aren’t set in stone: Abu Auf’s IPO plans are one of “a number of value creation alternatives” under study, none of which has reached an advanced stage, Auf said, adding that he could not comment on the timing of any potential listing as board-level discussions are ongoing.

Rasmala sees 15% inflation, 2x rate hikes by July — and really likes our carry trade

15% inflation + two more rate hikes by July? That’s the prognosis given by Doug Bitcon, head of credit strategies at Dubai-based investment bank Rasmala, who told Bloomberg TV (watch, runtime: 4:25) yesterday that rising food prices are a “big issue” for Egypt as we look to simultaneouly shore up our external position and secure new supplies of wheat. “We’re going to see inflation top out at around 15%,” he said, adding that the EGP devaluation is going to compound upward pressures on prices.

Reminder #1- Annual urban inflation rose to 10.5% in March — its highest level in almost three years — as spillover effects from the conflict in Ukraine continued to hit the Egyptian economy. The headline rate was driven by food prices, which accelerated at their quickest rate since October 2018, reaching 19.8% from 17.6% in February. Analysts differ on when inflation will likely peak, with CI Capital forecasting a peak near 12.5% in April, while Al Ahly Pharos expects price hikes to continue into the summer, peaking near 12% in August.

Reminder #2- Russia and Ukraine before the war accounted for more than 80% of our wheat supplies. We have lots more on that in the Commodities section, above.

More rate hikes coming: “We expect at least another 1% increase in interest rates in May, and another 1% in July,” Bitcon said, adding that Egypt’s all-important carry trade has been “very [lucrative]” in the past, and that there still is hope. “If you’re thinking to convert into EGP at the higher exchange rate, you don't have that exchange risk and you get that positive carry,” he noted.

The Central Bank of Egypt raised rates by 100 bps in March and simultaneously allowed the EGP to fall against the USD, a move Bitcon said was designed to get the “portfolio flows flowing back in.” FX reserves fell by USD 4 bn last month as the central bank moved to cover what it called “substantial foreign investor outflows” and purchase strategic goods. The CBE will next meet to review interest rates on 19 May.

Health startup Rology raises undisclosed pre-series A funding + Kemitt launches B2B marketplace

Teleradiology platform Rology has raised pre-series A funding round, it said in a press release (pdf yesterday. The round was led by Egypt Ventures, and featured participation from Sequence Ventures, Saudi Arabia’s Waseel and Tawaref, and Kenya’s Viktoria Ventures. Egypt Ventures did not respond to two requests that it specify the size of the round.

About Rology: Founded in 2017, Rology is a teleradiology platform that connects healthcare providers and hospitals with radiologists, matching them with cases based on expertise and availability. The platform automatically matches scans with the relevant radiologist, enabling diagnosis within 24 hours of the scan, which under normal circumstances could take up to three weeks. It was among our healthtech startups to watch last year.

How the funding will be deployed: Rology will use the money to support its expansion strategy in the Middle East and Africa, it said.

This isn’t the company’s first funding round: Rology raised USD 860k from HIMangel, Dubai Angel Investors, Asia Africa Investment & Consulting, and Saudi’s Athaal Group in a pre-series A round in 2020. The company has also received investment from Cubit Ventures.

Egypt-based e-commerce startup Kemitt has launched a new B2B marketplace selling furniture, home accessories, and raw materials to interior designers, contractors and other businesses, it said in a press release (pdf) this week. The online platform connects businesses with over 400 suppliers, and allows businesses to request quotations as well as access flexible payment plans, according to the statement.

About the company: Founded in 2017, Kemitt operates an online B2C furniture marketplace featuring more than 30k products. The company raised undisclosed investment from Saudi Angels in 2021.

ALSO FROM PLANET STARTUP-

Cairo-based e-commerce platform El Dokan was among the two startups chosen in P&G Egypt’s MEA Innovation Challenge, Unbox, according to a press release (pdf). The Egyptian app and India’s carpooling network QuickRide were named victors of the competition after being selected out of 52 startups. They will now work with P&G Egypt to solve some of its key operational challenges in Egypt. Passing the evaluation phase will see the companies awarded a pilot project to test their solutions.

OPay lands CBE approval to issue pre-paid cards

CBE gives OPay greenlight to issue pre-paid cards: China-backed fintech player OPay has received preliminary approval from the Central Bank of Egypt (CBE) to issue pre-paid cards in partnership with Masria Digital Payments (MDP), the company said in a press release (pdf). OPay expects to issue some 200k cards in the first phase of its rollout, the company’s director of business development and partnership for Egypt and North Africa, Mahmoud Khedr, told Enterprise recently.

OPay launched in Egypt last year and currently has tens of thousands of points of sale (POS) across the country, processing mns of transactions per month. It was backed by SoftBank’s Vision 2 fund in a USD 400 mn funding round that valued it at USD 2 bn.

OPay has big plans for Egypt: The fintech outfit plans to join the CBE’s new digital payment app, InstaPay, and is also in talks with an unnamed local bank for a new payment facilitator license. The company is also gearing up to launch a new service in Egypt in 3Q2022, which would be a “first for the MENA region.” This will come as part of its wider expansion in Egypt, which will include opening more branches and using the country as a “center” for its service operations in the MENA region.

EDITOR'S NOTE- This story was amended on 14 April, 2022, to reflect that OPay is China-backed. The story originally said the fintech player is based in Nigeria.

IN OTHER FINTECH NEWS-

NBE gets a PayFac license to partner with Geidea on e-payments: State-owned National Bank of Egypt (NBE) has received a payments facilitator license allowing it to partner with Saudi SME fintech player Geidea to launch digital payments services including contactless and QR-code enabled payments, according to a press release (pdf). Geidea has reportedly signed a similar agreement with Banque Misr, we noted previously.

What’s PayFac? Payment facilitators say they offer businesses an easier route to accepting card payments by including them under a “master merchant account” — saving them the time and effort of having to get approvals for an individual account. Payfacs help get merchants ready to process payments in hours — as opposed to days or weeks for the traditional route, which goes through banks directly on a 1:1 basis. Payfacs say this spares their clients from dealing with harder-to-navigate bank bureaucracies.

Gov’t to offer 19 desalination projects to private-sector partners

Nineteen water desalination projects will soon be up for grabs: The government will offer nineteen water desalination projects with a combined production capacity of 3.3 mn cubic meters/day for the private sector to bid on soon, Assem Shukr, vice-president of the state-owned Holding Company for Drinking Water and Sanitation, told Enterprise.

The combined investment outlay on the plants is EGP 72 bn, Shukr said. They are set to be implemented through public-private partnerships (PPPs) and the government is currently working on developing the condition booklets for the projects.

In detail: The Housing Ministry, the New Urban Communities Authority (NUCA) and the Armed Forces Engineering Authority will offer the projects in three stages, prioritizing those in coastal governorates. The tenders will be launched after the authorities finalize the legal procedures allocating the land for the plants, Shukr said, adding that the process would be conducted in a fully transparent manner.

About 70 foreign and local companies have expressed interest in taking part in the state’s desalination strategy, Shukr said, adding that the government will prioritize companies that help localize manufacturing for desalination plant parts. He added that the list includes local companies with previous experience in establishing desalination plants, in addition to European, American, Japanese, and Korean firms.

We’ve already seen signs of high demand from the private sector: Eleven companies, including Metito Holdings, ACWA Power, Al Nowais, Schneider Electric, and Orascom Construction, are reportedly planning to bid on PPP desalination projects worth a combined USD 2.8 bn.

Water security is a key priority for Egypt: Threats posed to our water supply by Ethiopia’s Grand Ethiopian Renaissance Dam and by climate change have prompted the government to put water at the forefront of its development plans. Egypt last year inaugurated the world’s largest wastewater treatment plant — the EGP 18 bn Bahr El Baqar wastewater treatment plant — while the El Hammam agricultural wastewater plant is currently in the works.

Real estate brokers, prepare for regulatory scrutiny

Real estate brokers are now set to face more regulatory scrutiny after President Abdel Fattah El Sisi ratified amendments to the law regulating commercial and real estate brokerage, according to a decree published in the Official Gazette (pdf) yesterday. The changes would see an electronic registry set up for licensed brokers, set rules for their activities, and regulate the fees they charge (as well as how those fees are collected). The amendments come as part of government efforts to regulate a sector that often flies below the radar of the formal economy, and to clamp down on fraud and money laundering.

Brokers that violate the regulations will face penalties under the new amendments, including fines ranging anywhere between EGP 50k and EGP 1 mn, jail terms of up to two years, and a two-year suspension of their practice.

AND HERE’S AN IDEA- How about also making it illegal for brokers to robocall us all 6.02x10^23 per day asking if we want to buy real estate?

El Sisi signed a number of other bills into law:

A law amending provisions of the NGO Law which gives civil society organizations another year to comply with the legislation’s requirements;
A law amending some articles in the illegal migration act that toughen jail terms and increase fines for human traffickers;
A law regulating the use and handling of ships.

Tourism ministry campaign gets traction, companies do good during Ramadan

The new national tourism campaign #FollowTheSun is generating results: In the two weeks after its mid-March release, the campaign has driven a 102% increase in Google searches for vacations to Egypt and reached more than 26 mn users in target markets including the United Kingdom, the United States, Germany, Italy, and France, according to a Tourism Ministry statement (pdf). The campaign is also in heavy rotation on CNN International. The government is targeting high-value tourism markets after the collapse of the Red Sea package tour market on the back of Russia’s invasion of Ukraine. Ukrainian and Russian tourists were mainstays of that market prior to the war. You can watch the main campaign copy here(runtime: 1:48).

Adrère Amellal, an eco-lodge in the Siwa Oasis, was named among Travel + Leisure’s four sustainable architecture and infrastructure projects worth planning a trip around. The sustainable compound is a project backed by Environment Quality International, a business investing in sustainable developments, founded by conservationist Mounir Neamatalla.

The Sixth of October dry port has been named the best transport agreement of the year in MENA by infrastructure journal IJGlobal. DP6 will be the first inland port in the country and is Egypt’s first PPP project in the sector. It received EUR 25 mn in funding from the European Bank for Reconstruction and Development (EBRD) under its Green Cities programme.

Coca-Cola linked up with the Egyptian Food Bank for its “bites and beats food festival” to distribute excess meals to those in need, according to a press release (pdf).

Electronics retailer B.TECH is working with the charity to distribute 10k Ramadan food boxes, according to a press release (pdf)

A number of AUC’s student clubs and organizations have been giving back to the community this Ramadan: The student-led initiatives include organizing a shopping day for orphans to get Eid outfits, setting up a water system for a community, and distributing Ramadan packs, according to a press release (pdf).

Uber and AXA are giving out helmets to scooter drivers: Uber and insurer AXA Egypt will distribute thousands of helmets to the app’s active scooter drivers without charge, to help reduce motorcycle-related injuries, the companies announced in a statement (pdf).

Last Night’s Talk Shows: Soaring steel prices aren’t “fair” -Cairo Chamber of Commerce

What’s a fair price for steel? A “fair” price for steel would be between EGP 15k-17k per tonne rather than the current EGP 21k/tonne, head of the Cairo Chamber of Commerce’s Building Materials Division Ahmed El Zeiny told Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 8:06). He blamed a lack of regulation for the price hikes, claiming that four steel producers have a “monopoly” on the market. Head of parliament’s industry committee Moataz Mahmoud gave Yahdoth Fi Masr his two cents on the issue (watch, runtime: 6:35).

Why were the talking heads talking steel prices? Prime Minister Mostafa Madbouly stressed the need to maintain fair prices in a meeting with iron, steel and cement manufacturers yesterday, according to a statement. The government is eyeing more support for contractors as the war in Ukraine paired with the EGP devaluation sends materials prices soaring, squeezing developers’ margins and threatening project completion timelines.

Egypt In The News: Aswan road crash kills ten people

Ten people were killed in a road crash yesterday near Aswan, including four French tourists and one Belgian national when a truck collided with a tourist bus on a highway. Fourteen other tourists were taken to the hospital following the accident, the Health Ministry said in a statement. All those injured are in a stable condition, Health Ministry Spokesperson Hossam Abdel Gaffar told Ala Mas’ouleety (watch, runtime: 3:46). The incident comes just days after several Polish tourists lost their lives in a road accident on the Red Sea highway. The story is all over the international press, including: AP | Reuters | AFP | The National | CBS | Xinhua.

Trucking startup Naqla gets a shoutout for its plans to “drive digital change In Egypt’s road freight sector.” (Forbes Middle East)

Also making headlines:

NFTs save Egyptian Gharemaat from jail: Advertising firm Horizon FCB Dubai created an NFT collection, entitled Breakchains with Blockchain, and used the sales to free Egyptian women imprisoned for not being able to pay their debts. Artists designed 16 NFTs that tell each woman's story. (Muse by Clio)
Banque Misr has partnered with software company Finastra in efforts to digitize its trade finance services.
Swiss prosecutors have dropped an 11-year-old probe into alleged money laundering by the Mubarak family. The attorney general’s office said they had been unable to substantiate the allegations and would release USD 429 mn in frozen assets. Reuters and the AP have the story.

Speed Medical’s FRA lawsuits suspended as it mounts appeal

Speed Medical (SPMD) appeals FRA lawsuits, to be reviewed on 11 June: Speed Medical said (pdf) yesterday that a Cairo court’s ruling — issued on April 12 — on two lawsuits brought against it by the Financial Regulatory Authority (FRA) will be suspended will it appeals the judgment. While SPMD did not disclose the court’s ruling, Al Mal claims the company was ordered to pay EGP 20 mn to the Financial Regulatory Authority. The regulator launched legal proceedings against the healthcare company last year for undisclosed reasons.

IEA says global oil demand set to slump + JPMorgan kicks off a turbulent earnings season

IEA cuts forecast for global oil demand — again: The International Energy Agency (IEA) has revised downwards its oil demand projections for 2022 to 99.4 mn bpd, down 260k bpd from its previous forecast in March, it said in its monthly report yesterday. This comes as lockdowns in China dampen demand and contribute to a “balance” in the market, aided by the US’ release of emergency oil reserves.

The loss of Russian crude won’t be as bad as previously thought: The IEA expects Russian output to be 1.5 mn bpd lower in April than in March — around half the decrease previously forecast — though it did still warn that losses could double to 3 mn bpd in May.

JPMorgan’s bottom line drops 42% y–o-y in Q1: The bank posted earnings of USD 8.3 bn for the quarter, as the sharp drop in dealmaking and Russia-related losses hit its bottom line. Chief exec Jamie Dimon warned in an investor call that a recession could be brewing on the back of high inflation and the war in Ukraine, the WSJ reports. The bank is preparing for just that – it set aside some USD 900 mn last quarter in case of a coming spike in loan defaults and to cover its exposure to Russian assets.

EGX30	10,847	-0.5% (YTD: -9.2%)
USD (CBE)	Buy 18.36	Sell 18.46
USD at CIB	Buy 18.36	Sell 18.46
Interest rates CBE	9.25% deposit	10.25% lending
Tadawul	13,540	-0.8% (YTD: +20%)
ADX	10,093	-0.1% (YTD: +18.9%)
DFM	3,582	+0.4% (YTD: +39.4%)
S&P 500	4,447	+1.1% (YTD: +6.7%)
FTSE 100	7,581	+0.1% (YTD: +9.2%)
Euro Stoxx 50	3,828	-0.1% (YTD: -3.7%)
Brent crude	USD 108.35	-0.4%
Natural gas (Nymex)	USD 7.04	+0.6%
Gold	USD 1,978	-0.4%
BTC	USD 41,195	+3.2% (as of midnight)

THE CLOSING BELL-

The EGX30 fell 0.5% at yesterday’s close on turnover of EGP 765 mn (19.7% below the 90-day average). Foreign investors were net sellers. The index is down 9.2% YTD.

In the green: Mopco (+2.5%), EFG Hermes (+1.3%) and ADIB Egypt (+1.2%).

In the red: Fawry (-3.9%), Heliopolis Housing (-3.6%) and Ezz Steel (-2.5%).

Asian markets are up almost across the board in early trading this morning and futures suggest — for the first time in a long time — that both Wall Street and the major European indices will be opening in the green later today.

FM Shoukry holds talks with US’ Blinken in Washington + Egypt plays host to UN-backed Libya talks

FM Shoukry meets with US Secretary of State Blinken: Foreign Minister Sameh Shoukry and his US counterpart Antony J. Blinken held talks in Washington yesterday, according to a Foreign Ministry statement. On the agenda, according to a readout from the State Department: The “Negev Process” that has seen Egypt and other Arab countries shore up relations with Israel; the war in Ukraine; fears about global food security; and the peace process in Libya.

The two also discussed human rights, the statement read — a day after Blinken was quoted by the New York Times as criticizing Egypt’s record on political imprisonment as he launched his department’s latest human rights reports. Shoukry and Blinken also expressed their pride in marking the hundredth anniversary of diplomatic relations between the two countries, stressing the strength of the Egypt-US relationship.

Egypt hosts UN-sponsored Libya talks: A Libyan delegation representing the parliament and another representing the High Council of State (HCS) yesterday began a round of talks in Cairo aimed at finding a solution for Libya’s ongoing political crisis, Reuters reports. The parliamentary delegation represents the new government, while the HCS is against removing the incumbent government and its prime minister Abdul Hamid Dbeibah, whose mandate expired in December.

My Morning Routine: Tarek Taha, director, CBE Fintech and Innovation Hub

Tarek Taha, director, CBE Fintech and Innovation Hub: 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. Speaking to us this week is Tarek Taha (LinkedIn), director of the CBE’s Fintech and Innovation Hub.

My name is Tarek Taha, and I'm the director of the Central Bank of Egypt’s (CBE) Fintech Hub, which is an innovation hub in downtown Cairo. Generally, I've always been working at the intersection of real estate, technology, and entrepreneurship, but I’m super excited about this role.

My current role is building the hub. It’s in the foundation phase, and we want to make sure we become the flag bearer for fintech in Egypt by bringing all stakeholders together, from startups to corporates, banks, regulators, investors, and mentors. Once they're all together in one physical space, we believe there are a lot of synergies and partnerships that can be created to drive the growth of Egypt’s fintech sector. So, my role is to make sure that we can bring all of those components together to work and function from the hub, which is a very unique undertaking.

Since we’re in the building phase, my normal workday consists of a lot of meetings. Meetings with possible partners, which comprise fintech startups, banks, organizations like the UNDP that can help us design programs and so on. I’m also following up on the physical progress on the hub itself because it’s undergoing renovation and refitting to the new purpose of having the CBE as an innovation hub. We’re also talking to international companies to set up fintech innovation labs in Cairo with state-of-the-art technology, which is super exciting.

There are also a lot of internal conversations about how we plan to have access to the Sandbox. The Sandbox, in technical development terms, is a place where you can develop code in a closed, monitored environment. Globally, regulators turn to building sandboxes to be able to regulate apps and technology before it gets introduced to the market. This is not new to Egypt and it’s becoming a common practice in a lot of other countries as well. It’s an environment where regulators can monitor and evaluate apps, understand how they work, and decide if their features are compliant with central bank regulations.

I'm an avid reader — I spend 1-3 hours each morning listening to audiobooks. I have a big reading target this year, which is 220 books, like my target last year. It is not the target itself that drives me, but I enjoy the ability to listen to books. It also helps me switch off after work because it mentally transforms me to different worlds. I also built a daily habit of adding reviews on Goodreads on the books I read.

I’m also currently taking my MBA, via the Quantic model, which I’m super happy with. I usually take a couple of classes for half an hour in the morning at least twice a week. The Quantic model is very interactive and takes place online in small doses, with monitors keeping an eye on whether or not you’re on track.

I’m failing miserably at building the habit of writing daily, but I’ve actually started writing my own book. Last December, I earned the iRead award for best short story called Ninety-One Minutes, which revolves around the end of the world. Ironically, I landed the award around the same time the movie Don’t Look Up came out on Netflix, which focuses on the same theme. The award got me excited about writing my own book, so I’m trying to make it a weekly habit. I’m trying to move from inspiration to actual dedication.

Keeping my inbox at zero unread emails is how I stay focused and organized. This helps me avoid a pileup of tasks. I reply to the ones I can answer immediately, and the rest I either categorize or turn into tasks. These email features are a life-saver. I also try to consistently and instantly note the outcomes of each of my meetings.

By nature, it has become very difficult to maintain a life-work balance. If you consciously try to achieve it, culture may not allow you. Of course, you have to allow a balance, but it doesn’t necessarily work in a clean-cut way like people imagine. It usually happens in a non-structured way.

The latest book I enjoyed reading was Still Life with Woodpecker by Tom Robbins. It’s a crazy, fictional book that takes place inside a pack of Camel cigarettes. I also truly enjoyed Ayn Rand’s Atlas Shrugged.

I'm still a big fan of the Game of Thrones TV series. I think the amount of creativity and the ability to create a world in such a way makes it a great show to watch. Sometimes creating a world you believe can be the hardest part, so creating something so believable and unbelievable at the same time makes it a beautiful piece of fiction.

I truly enjoy The USD 100 MBA podcast. It's short and to the point. The host Omar Zenhom has good energy and I've learned a couple of things from it.

The best piece of advice I’ve been given was from my mother, who always told me to pay attention to detail. She always focused on the details and I picked it up from her.

CALENDAR

OUR CALENDAR NOW APPEARS in two sections:

Events with specific dates or months are right here up top
Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

APRIL

April: Fuel pricing committee meets to decide quarterly fuel prices.

April: Ghazl El Mahalla shares will begin trading on the EGX.

April: A delegation from a major Belgian shipping company will arrive for talks on building an international shipping supply center in Egypt.

14 April (Thursday): European Central Bank monetary policy meeting.

15 April (Friday): E-receipt system pilot to kick off.

18-24 April (Monday-Sunday): World Bank-IMF Spring Meetings, Washington D.C.

20 April (Wednesday): Deadline for listed companies and NBFIs to submit quarterly ESG reports.

Mid-April: Trading on the Egyptian Commodity Exchange to start.

21 April (Thursday): EGX-listed Taaleem will hold an extraordinary general assembly to discuss the mechanism to build and own nonprofit and private universities.

24 April (Sunday): Coptic Easter Sunday (holiday for Coptic Christians).

25 April (Monday): Sham El Nessim.

25 April (Monday): Sinai Liberation Day.

28 April (Thursday): National Holiday in observance of Sham El Nessim.

30 April (Saturday): Deadline for submitting corporate tax returns for companies whose financial year ends 31 December.

30 April (Saturday): Fixed customs exchange rate lifted.

Late April through 15 May: 1Q2022 earnings season

MAY

May: Investment in Logistics Conference, Cairo, Egypt.

1 May (Sunday): Labor Day.

1 May (Sunday): Suez Canal Authority raises tolls for different vessels.

3-4 May (Tuesday-Wednesday): Federal Reserve interest rate meeting.

4 May (Wednesday): 3 February (Thursday): Deadline to send in applications for Cultural Property Agreement Implementation projects to the US Embassy in Cairo.

5 May (Thursday): National Holiday in observance of Labor Day.

2 May (Monday): Eid El Fitr (TBC).

15 May (Sunday): Last day for EGX-listed companies to file 1Q2022 earnings

19 May (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

JUNE

5-7 June (Sunday-Tuesday): Africa Health ExCon, Al Manara International Conference Center, Egypt International Exhibitions Center, and the St. Regis Almasa Hotel, New Administrative Capital.

9 June (Thursday): European Central Bank monetary policy meeting.

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

16 June (Thursday): End of 2021-2022 academic year for public schools.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

27 June-3 July (Monday-Sunday): World University Squash Championships, New Giza.

30 June (Thursday): June 30 Revolution Day, national holiday.

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

JULY

July: A law governing ins. for seasonal contractors will come into effect.

July: Fuel pricing committee meets to decide quarterly fuel prices.

Early July: Polish President to visit Egypt.

1 July (Friday): FY 2022-2023 begins.

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July - 14 August: 2Q2022 earnings season.

AUGUST

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

SEPTEMBER

September: Egypt will display its first naval exhibition with the title Naval Power.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

OCTOBER

October: World Bank and IMF annual meetings in Washington, DC

October: Fuel pricing committee meets to decide quarterly fuel prices.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

18-20 October(Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

27 October (Thursday): European Central Bank monetary policy meeting.

Late October - 14 November: 3Q2022 earnings season.

NOVEMBER

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

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

4-6 November: The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

7-18 November (Monday-Friday): Egypt will host COP 27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.

DECEMBER

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

JANUARY 2023

January EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

EVENTS WITH NO SET DATE

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

14 March-30 June: The “Escape to Egypt” exhibition at the Coptic Museum, in celebration of its 112th anniversary.

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release first financing product.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish above between the actual holiday and its observance.

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