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Y Combinator-backed Thndr receives first new brokerage license of Egypt in ten years for its Robinhood-like stock trading platform

Thndr, a Cairo-based investment platform that wants to make it easy for people to invest in stock, bonds, and funds, without charging them any commission, has received a brokerage license to operate in Egypt, it announced in a statement today to MENAbytes. Thndr claims that it is the first new license issued by Egypt’s Financial…

Thndr, a Cairo-based investment platform that wants to make it easy for people to invest in stock, bonds, and funds, without charging them any commission, has received a brokerage license to operate in Egypt, it announced in a statement today to MENAbytes. Thndr claims that it is the first new license issued by Egypt’s Financial Regulatory Authority since 2008.

“Issuing a license to a tech company is a testament to the regulator’s strong commitment to seek modern methodologies to enhance the investment landscape in Egypt,” said the startup in a statement provided to MENAbytes.

Founded in 2019 by Uber Egypt’s former General Manager Ahmad Hammouda, Thndr is starting with a Robinhood-like mobile-first equities trading platform that enables people to invest in stocks in The Egyptian Exchange. Thndr’s mobile app has been live on Play Store and App Store for a few months but it previously only offered a virtual environment for the users to learn how to use the app. They were offered with virtual money to experience what investing in stocks would like through the app.

Ahmad Hammouda, the co-founder and CEO of Thndr, said, “Our vision is to put wealth in the hands of everyday individuals. With the rise of technology, and the foresight of a very supportive Financial Regulatory Authority, we can make this vision come to life — Egypt is expected to be the 7th largest economy by 2030 and has more than 100 mn people, most of which are young and are looking for a convenient and digital way to invest their money. That’s why we are excited to bring a new breed of young investors to the market.”

After receiving the license last week, Thndr has finally opened up for real trading accounts. The users can sign up for a trading account using the app and receive a notification whenever it is approved. Once the account is approved, they can use different methods to start investing in stocks.

We’ve played with the app in the last few weeks and it is very easy to use. The users can see different types of data including the recent news about any particular stock (from The Egyptian Exchange) without leaving the app. The account opening form also looks super intuitive and the stocks can be purchased or sold in a few taps.

The startup currently offers three plans for investors with the first one being free, and the paid plans starting from EGP 15 (about a dollar) per month. Just like Robinhood, the trades on all plans of Thndr (including the free tier) are commission-free. It said that it is pioneering the concept of commission-free trading with no account minimums in the region.

Seif Amr, the co-founder of Thndr, said, “Through Thndr, we are looking to remove all barriers and friction that users face throughout their investment journey – whether it relates to accounting opening, associated costs, access to resources or ease of use. We are starting with Egyptian equities, but we intend to quickly introduce alternative investment options to suit different risk/reward and involvement preferences.”

Pre-Seed Investment

Thndr today also broke its silence about its pre-seed round that it had closed in December last year. It also confirmed that it is part of Y Combinator’s S20 batch and will present at their demo day later this month. Thndr’s pre-seed round included Y-Combinator, 4DX
Ventures, Endure Capital, The Raba Partnership, and MSA Capital as investors. It also had participation of individual investors including Tom Stafford who is a managing partner at DST Global.

The Egyptian fintech did not disclose the size of investment.

Peter Orth, co-founder and Managing Partner at 4DX Ventures, said, “Savings and investing is a critical part of building wealth and economic development, and Egypt’s youth needs a mobile first platform like Thndr to open the floodgates of investing in the coming decades. Platforms like Thndr have seen great success in other markets across the world, and Thndr is built with keen attention to the local nuances and preferences of the Egyptian investor in mind.”

“We believe that Hammouda and the rest of the team at Thndr are the ideal group to build this business in the region, and we’re very excited to partner with them in achieving their important mission,” he added.

Robinhood, the American commission-free trading platform has revolutionized stock trading in the United States. It has raised $200 million in fresh funds earlier this week in a round that valued the company at $11.2 billion, making it a member of the exclusive decacorn club. Founded in 2013, Robinhood has raised $1.7 billion in total funding to date.

Egypt is obviously a completely different market but we’ve seen similar investment platforms do well in some other parts of the world as well, including some in India. And Thndr is just starting with Egyptian equities. As the founders said, they want to introduce different alternative investment options in the future.

Zubair Naeem Paracha

Zubair Naeem Paracha

Founder at MENAbytes
A tech and startup enthusiast based in Lahore, Pakistan. Zubair apart from leading MENAbytes is also building Qraar, a career discovery and development platform for millennials in MENA. He can be reached on Linkedin, Twitter or zubair [at] menabytes [dot] com.
Zubair Naeem Paracha

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Don’t Count On JPY Correction; Staying Long GBP/JPY

The path of the potential pace of the JPY decline may still be underestimated by markets, which continue trading the JPY long.

While the 10% USDJPY advance from September lows looks impressive from a momentum point of view, it may no thave been driven by Japan’s institutional investors reducing their hedging ratios or Japan’s household sector reestablishing carry trades.

Instead, investors seemed to have been caught on the wrong foot, concerned about a sudden decline of risk appetite or the incoming US administration being focused on trade issues and not on spending. Spending requires funding and indeed the President-elect Trump’s team appears to be focused on funding. Here are a few examples: Reducing corporate taxation may pave the way for US corporates repatriating some of their USD2.6trn accumulated foreign profits. Cutting bank regulation could increase the risk-absorbing capacity within bank balance sheets. Hence, funding conditions – including for the sovereign – might generally ease. De-regulating the oil sector would help the trade balance, slowing the anticipated increase in the US current account deficit. The US current account deficit presently runs at 2.6% of GDP, which is below worrisome levels. Should the incoming government push for early trade restrictions, reaction (including Asian sovereigns reducing their holdings) could increase US funding costs, which runs against the interest of the Trump team.

Instead of counting on risk aversion to stop the JPY depreciation, we expect nominal yield differentials and the Fed moderately hiking rates to unleash capital outflows from Japan.The yield differential argumenthas become more compelling with the BoJ turning into yield curve managers. Via this policy move, rising inflation rates push JPY real rates and yields lower, which will weaken the JPY. Exhibit 12 shows how much Japan’s labor market conditions have tightened. A minor surge in corporate profitability may now be sufficient, pushing Japan wages up and implicity real yields lower.

JPY dynamics are diametrical to last year . Last year, the JGB’s “exhausted”yield curve left the BoJ without a tool to push real yields low enough to adequately address the weakened nominal GDP outlook. JPY remained artificially high at a time when the US opted for sharply lower real yields. USDJPY had to decline, triggering JPY bullish secondround effects via JPY-based financial institutions increasing their FX hedge ratios and Japan’s retail sector cutting its carry trade exposures. Now the opposite seems to be happening. The managed JGB curve suggests rising inflation expectations are driving Japan’s real yield lower. The Fed reluctantly hiking rates may keep risk appetite supported but increase USD hedging costs.Financial institutions reducinghedge ratios and Japan’s household sector piling back into the carry trade could provide secondround JPY weakening effects

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Daily Financial News

Mexico raises interest rates, cites Trump as risk

The head of Mexico’s central bank says U.S. Republican candidate Donald Trump represents a “hurricane” sized threat to Mexico.

Banco de Mexico Gov. Agustin Carstens told the Radio Formula network Friday that a Trump presidency “would be a hurricane and a particularly intense one if he fulfills what he has been saying in his campaign.”

Trump has proposed building a wall along the border and re-negotiating the North American Free Trade Agreement.

Mexico’s central bank raised its prime lending rate by half a percent to 4.75 percent Thursday, citing “nervousness surrounding the possible consequences of the U.S. elections, whose implications for Mexico could be particularly significant.”

Mexico’s peso had lost about 6 percent in value against the dollar since mid-August. It recovered slightly after the rate hike

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Africa’s first Fairtrade certified gold co-operative offers hope to gold miners living in poverty

Syanyonja Artisan Miners’ Alliance (SAMA) has become the first artisanal small scale mining co-operative in Africa to become Fairtrade certified, bringing much needed hope to impoverished communities who risk their lives to mine the rich gold seam that runs around Lake Victoria.

SAMA is one of nine previously informal groups from Uganda, Kenya and Tanzania which has benefitted from a pilot project launched by Fairtrade in 2013. This innovative program aims to extend the benefits of Fairtrade gold to artisanal miners across East Africa.

In that short time, SAMA has undergone training in business and entrepreneurship, as well as safe use of mercury, internal control systems, labour rights and better working conditions, health and safety and more. Previously, daily contact with toxic chemicals used to process gold meant members risked disease, premature births and even death.  Fairtrade gold was first launched in 2011, and SAMA now joins Fairtrade certified gold mines MACDESA, AURELSA and SOTRAMI in Peru.

The co-operative produces just 5 kg gold per year, but nevertheless has the potential to significantly benefit many people in the local community through better conditions through certification. It is expected that Fairtrade and organizations like Cred Jewellery will support the miners, ensuring their gold can be refined and made available to jewellers in the UK and other markets.

Gonzaga Mungai, Gold Manager at Fairtrade Africa said: “This is a truly momentous and historical achievement and the realisation of a dream that is many years in the making. Gold production is an important source of income for people in rural economies. Congratulations to SAMA, it sets a precedent which shows that if groups like this can achieve certification, then it can work for others right across the African continent.”

The Fairtrade Gold Standard encourages better practice and changes to come in line with international regulation around the production and trade of so-called ‘conflict minerals’. Under the Standard, miners are required to:

  • Uphold a human rights policy preventing war crimes, bribery, money laundering and child labour
  • Clearly represent where the minerals were mined
  • Minimise the risks of conflict minerals through robust risk assessments and collaboration across supply chains
  • Report to buyers and trading partners regarding the risks of conflict minerals

Now in its second phase, the programme will focus on supporting other mining groups in the region to access affordable loans and explore a phased approach to accessing the Fairtrade market, allowing more mining co-operatives across Africa to participate in the programme.

Gonzaga added: “Sourcing African metals from smallscale miners in the Great Lakes Region is the responsible thing to do. For a long time companies have avoided buying gold from this region, with devastating consequences for impoverished communities who were already struggling. It has driven trade deeper underground, as unscrupulous buyers pay lower prices and launder illegal gold into legitimate supply chains. That’s why we have chosen to work with these groups to help them earn more from their gold within a robust compliance system that offers social, environmental, and economic protections.”

The Fairtrade gold programme offers a small but scalable solution to sustainable sourcing of gold from the region in line with Section 1502 of the Dodd-Frank Act in the US, OECD Due Diligence Guidance and recent EU Supply-Chain Due Diligence proposals which could come into effect in 2016. This means that up to 880,000 EU firms that use tin, tungsten, tantalum and gold in manufacturing consumer products could be obliged to provide information on steps they have taken to identify and address risks in their supply chains for so-called ‘conflict minerals’.

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