Good morning, friends, and welcome to a very busy news day, with news on everything from privatization and infrastructure investment to the FX crunch and the ongoing competition to see who will take control of paintmaker Pachin.

HAPPENING TODAY-

#1- It’s deadline day for Pachin shareholders: Shareholders in EGX-listed paints company Pachin have until the end of today’s trading session to decide whether to sell their shares to National Paints Holding (NPH) or Eagle Chemicals.

The offers: In an ongoing mandatory tender offer, Dubai-based NPH is offering EGP 39.80 per share and Eagle Chemicals is offering EGP 39.00.

The state of play: As of last night, shareholders owning around 30% of the company — representing 7.28 mn shares — had agreed to sell their shares to NPH, according to Hapi Journal. None of the shareholders have responded to Eagle’s offer, according to the newspaper.

Remember: NPH or Eagle Chemicals need to acquire at least 75% of the company for the MTO to go through.

#2- The African Private Equity and Venture Capital Association’s annual summit:AVCA’s annual get-together and VC summit continues at the Four Seasons Nile Plaza today. Billing itself as the world’s largest Africa-focused private capital gathering, the five-day summit is bringing together investors with more than USD 1.5 tn in assets under management. Multilateral lenders and policymakers are also attending.

#3- It’s Fed week: The US Federal Reserve will hold its two-day policy meeting on Tuesday and Wednesday — and signs point to a 25-bps interest rate hike as the Fed works to contain soaring inflation, according to Bloomberg. A 25-bps hike will push the fed funds rate to 5-5.25% — the highest level since 2007 — and would be the tenth consecutive hike by the central bank since it started aggressively tightening policy to curb inflation last year.

USD direction hinges on Fed’s policy outlook: Hedge funds and investors wager that the greenback will erase all of the gains made last year as the Fed winds down its tightening cycle, according to the business information service writes. Traders widely expect the central bank to hike for the final time this week, before holding rates and starting to lower them towards the end of the year. Meanwhile, the UK and European central banks will continue their hawkish stances in the coming months, putting more pressure on the USD against major currencies.

PSA- Thursday is a national holiday in observance of Labor Day.

IN THE HOUSE TODAY- Religious Endowments Minister Mohamed Mokhtar Gomaa will answer questions from MPs on the ministry’s role in reforming religious discourse and improving the finances of mosque clerics.

In committee:

  • The Economic Affairs Committee will review the Egyptian Competition Authority’s role in shielding consumers from price gauging by retailers and others sellers amid the FX crunch.
  • The SMEs Committee will discuss measures taken by the Industrial Development Authority (IDA) to simplify licensing procedures for manufacturers. MPs also think that 13 industrial complexes failed to deliver on the IDA’s plans for 2023.
  • The Industrial Committee will look into issues facing investors at industrial zones in Minya and Borg Al Arab.

FX WATCH-

Net foreign liabilities hit a fresh high in March: Our net foreign assets position deteriorated again in March, falling to negative USD 24.5 bn from USD 23 bn in February, according to central bank figures, EFG Hermes said in a note to clients yesterday. Though central bank liabilities improved slightly during the month, net foreign assets were weighed down by the banking system, which saw liabilities widen to a record USD 15.5 bn on the back of a reduction of foreign assets.

CBE to consult staff: Net foreign liabilities have now grown by more than USD 3.8 bn over the past three months. The central bank is now expected to consult with IMF staff under our latestagreement (pdf) with the IMF, which says that the CBE will discuss NFAs if they fall by USD 2 bn or more in a three-month period (see page 11, pdf).

MEANWHILE- A successful t-bill auction: The central bank sold more than USD 1.0 bn of USD-denominated one-year treasury bills to investors yesterday at an average yield of 4.9%, according to central bank figures.

AND- Oil Ministry extends oil + gas tender until June: The Oil Ministry has extended its tender for 12 exploration blocks in the Mediterranean and Nile Delta until the beginning of June, Al Malreported yesterday, citing an unnamed government source. The tender was originally set to conclude on 30 April, but was extended to give companies more time to study the blocks offered. The tender includes six onshore blocks and six offshore blocks.

HAPPENING THIS WEEK-

National Dialogue kicks off: The National Dialogue will hold its first session on Wednesday. The dialogue was initially set to kick off in January but was postponed after the political parties failed to name their representatives to the sessions on time.

THE BIG STORIES ABROAD-

US banks continue to face pressure following seizure of First Republic: An index of regional US banks fell almost 3% during trading yesterday following the collapse of First Republic Bank. JPMorgan agreed to acquire most of the troubled lender on Monday while the rest will be taken over by the Federal Deposit Insurance Corporation — an arrangement that makes the bank the fourth victim of the recent banking crisis. (Reuters | FT | CNBC)

ALSO RECEIVING ATTENTION- The game of chicken over the debt ceiling: US Treasury Secretary Janet Yellen has again urged Congress to raise or suspend the debt ceiling before 1 June or the country will face the risk of defaulting on its financial obligations. (Wall Street Journal | Washington Post)

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