US ambassador nominee pressed on Gaza aid, human rights

Good morning, friends. We have a reasonably compact issue for you this morning dominated largely by Israel’s war against Gaza. There are no new developments to report on the economy front, leaving us with a smattering of corporate stories on what is (war aside) a reasonably quiet Monday morning for business news.

WATCH THIS SPACE-

#1- Biden’s nominee for Egypt ambassador faces questions on Gaza aid and human rights at Senate hearing:Herro Mustafa Garg was pressed on how she would respond to the humanitarian crisis in Gaza and Egypt’s human rights record as Washington’s ambassador in Cairo during her Senate confirmation hearing on Thursday. Politico has more.

TL;DR: In her statement (pdf), Garg pledged to support the Madbouly government’s IMF-backed reform program, maintain Washington’s close relationship with the Egyptian military, and push for improvements in the country’s human rights record.

Remember: Egypt’s relationship with US lawmakers has been placed under the microscope in recent weeks following the federal indictment of former Senate Foreign Relations Committee chair Robert Menendez. Menendez’s resignation led to the appointment of a new committee chair: Egypt-skeptic Democratic senator Ben Cardin, who promptly withheld all USD 320 mn of Egypt’s human rights-conditioned military aid.

#2- Another bidder for Safi? A unit of privately held Al SafyGroup is interested in acquiring military-owned bottled water company Safi and will submit its bid in the next few weeks, reports Al Borsa, citing sources it says are in the know. The Al Safy Group — which has no connection to the military-owned firm despite its similar name — was among the 30 companies that previously expressed their interest in the stake sale, the local outlet added.

One in and one out: Agthia has withdrawn its own bid, Al Borsa reported, adding to rumors in August that the ADQ-owned food company had lost interest. This leaves newcomer Al Safi Group competing with Mansour Group, which was named alongside Agthia by local media as being the two unnamed Safi suitors mentioned in the updated state ownership policy document published in August.

What’s Al Safy? Directly and through partnerships, the company is a major distributor for foreign brands including Apple and BMW. We spoke with CEO Reem Safy for our My Morning Routine column last December.

ICYMI- The Sovereign Fund of Egypt has been working to sell at least 10% — and potentially asmuch as 100% — of Safi under the state’s privatization program.

#3- Heliopolis Housing to study bids for EGP 1 bn Granada building redevelopment: State-owned real estate developer Heliopolis Housing and Development (HHD) plans to announce within two weeks who it will choose to redevelop the historic Granada building in Heliopolis, a company official told Al Borsa. Companies were invited to apply to redevelop the building to accommodate cultural and tourism activities, exhibitions, and events, and establish a restaurant back in April.

#4-EGX IR digital registry is in the pipeline: The EGX has begun setting up a digital registry for investor relations officers at listed companies on the bourse, it said in a statement yesterday. The registry is designed to raise the quality of disclosures in terms of timing, content, and improving the communications with market stakeholders. Investor relations officers will be registered on the database after they pass interviews, tests, and training programs conducted by the EGX and the Egyptian Directors Center of the Financial Regulatory Authority, the statement reads.

What’s next: Interviews will begin from 23 October in time for training to commence in mid-November and all EGX-listed firms are encouraged to submit at least one candidate for the training.

HAPPENING TODAY-

Pachin’s delisting kicks off: Minority stakeholders can start selling their shares in Paint and Chemical Industries (Pachin) today after the company launched a bid to buy back its publicly-traded shares for EGP 39.80 apiece, according to an EGX news bulletin yesterday. Shareholders will have until Thursday, 2 November to respond to the offer. Dubai-based National Paints Holding’s (NPH) acquired more than 80% of the formerly state-owned company for around EGP 770.5 mn in a mandatory tender offer in May. Pachin’s shares remained unchanged during yesterday’s trading to close at EGP 39.18 apiece.

HAPPENING THIS WEEK-

#1- “Davos in the Desert”: Global investors, business leaders and bankers will be in Riyadh for the Future Investment Initiative (FII) from tomorrow. The event wraps on Thursday.

#2- The clocks are going back: Daylight savings time will end in Egypt on Thursday 26 October.

#3- French President Emmanuel Macron is expected to visit Cairo “soon” to talk about Israel’s war on Gaza. Macron, together with Dutch Prime Minister Mark Rutte will be in Israel today to meet Netanyahu, according to a statement from the Israeli PM’s office picked up by Reuters. Rutte held a phone call with President Abdel Fattah El Sisi yesterday.

MORNING MUST READS-

A handful of stories worth looking at as we all wrap our heads around what’s going on in the world around us this morning:

• Western credibility is taking serious damage: “We have definitely lost the battle in the Global South … They won’t ever listen to us again,” one senior G7 diplomat tells the FT. (Financial Times)
• Diplomatic manoeuvering in the Gulf: The Economist has what it claims is the inside scoop on how Abu Dhabi, Doha, and Riyadh are hedging their bets in uncertain times. (The Economist)
• A once-in-a-lifetime problem: The US is facing the greatest number of overseas crises this side of the Second World WAr, according to former defense secretary Robert Gates. (Axios)

In the markets: Rising yields and heightened geopolitical risk are a toxic combination for capital markets:

Exhibit A: The private equity boom is well and truly over.Private equity firms are resorting to unconventional strategies to raise funds amid what is looking like the worst year in a decade for exits, says the Financial Times.

Exhibit B: The recent hype about an Arm-fuelled rebirth in the IPO market has fallen flat.“A string of underwhelming initial public offerings has only exacerbated skepticism on Wall Street as a dearth of new issuance nears a second full year,” Bloomberg writes.

It’s not just geopolitics moving the market: Gold is a haven asset for people looking to protect savings from the weakening EGP. Prices have almost tripled since the initial devaluation in March 2022 and we can expect prices to keep moving upwards ahead of the anticipated float later this year.

ICYMI- Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at the expansion of industrial zones in Egypt.

CIRCLE YOUR CALENDAR-

The Egyptian Trilogy comedy tour is in London on Wednesday, 25 October. Catch Fady RIzk, Ahmed Ahmed, and Mohamed Salem at the Leicester Square Theater, brought to you by our friends at Somabay.

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

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: Tuition fees at private universities remain unchanged as Egypt’s new academic year begins