Good morning, everyone, and welcome to what is (on the home front at least) one of the slowest news days of the year.

WATCH THIS SPACE-

There have been more huddles between IMF and Egyptian officials ahead of the anticipated currency devaluation after this month’s presidential election. This time it was IMF head Kristalina Georgieva and Central Bank of Egypt Governor Hassan Abdalla, who met on the sidelines of the COP28 summit in Dubai on Tuesday, according to local media. This came a few days after President Abdel Fattah El Sisi held talks with the IMF head.

What you need to know:

  • Delay: The IMF has postponed two reviews of our USD 3 bn loan program this year after authorities failed to meet several of the key commitments, including transitioning to a fully flexible exchange rate.
  • Liftoff: Egypt is widely expected to devalue the EGP for a fourth time following this month’s ballot, a move which should lead to the IMF signing off on the reviews and disbursing almost USD 700 mn in loan tranches.
  • Plot twist: In an interview this week, the IMF head indicated that another devaluation may not be in the cards for the immediate future, telling Asharq Business that the Fund is currently prioritizing getting inflation under control over exchange-rate reform.

#2- Wataniya could be sold as late as February: The government is looking to wrap up the Wataniya stake sale “within a month or two maximum,” Planning Minister Hala El Said said in an interview yesterday (watch, runtime: 7:00). The government had originally indicated that the sale would wrap in December at the latest.

WAR ECONOMICS-

  • The good: Tourist bookings to Egypt will return to growth after the holiday season as “confidence returns and customers seek what is a value winter sun destination,” travel agency TUI CEO Sebastian Ebel told Reuters. His comments come following the company’s latest earnings release (pdf), which reported a “temporary slight slowing of bookings to Egypt” due to the ongoing war in Gaza.
  • The bad: Egypt may see a “little pause in investment” as investors wait and see how the war on Gaza unfolds, El Said said in the interview.

HAPPENING TODAY-

#1- Shoukry meets Blinken in DC to talk Gaza: Foreign Minister Sameh Shoukry will join other Arab and Islamic ministers for a meeting with US Secretary of State Anthony Blinken amid ongoing efforts to put an end to Israeli aggression. Shoukry has been in DC since Tuesday for meetings with senior lawmakers and foreign policy officials to talk Gaza and other regional issues.

  • Tomorrow- UAE to push for ceasefire: The UAE will reportedly submit a resolution to the UN Security Council tomorrow calling for an immediate ceasefire. This came in response to UN Secretary-General Antonio Guterres yesterday invoking a rarely-used article of the UN charter to push the Security Council to revisit the situation in Gaza.
  • Standing in the way: The US will likely continue to allow Israel to wage war on Gaza and block the adoption of a resolution that calls for a ceasefire.

#2- COP28, Day 8: It’s a relatively quiet day in COP Land today. A panel organized by Fertiglobe will discuss how to promote the use of sustainable marine fuels — as they’ve been doing here — and there are discussions elsewhere on food waste and textile circularity. There’s also a ‘mindful origami’ workshop, for those inclined.

Want to go deeper on everything happening over at COP28?Enterprise Climate knows what’s what.

#3- The Egypt Defence Expo (EDEX) wraps today: The four-day event at the Egypt International Exhibition Center in Cairo saw discussions on regional stability and peacekeeping in light of the war on Gaza.

HAPPENING THIS WEEK-

#1- Counting the greenback stacks: The Central Bank of Egypt should be out with November’s foreign reserves figures this week.

  • Where we stand: FX reserves edged up to USD 35.1 bn in October from USD 34.97 bn the month before. The stockpile has been gradually on the up since the middle of 2022 after the war in Ukraine triggered drastic capital outflows.

#2- A trade mission to Saudi: The Engineering Export Council of Egypt starts a weeklong trade mission to Saudi Arabia — the largest importer for our engineering sector — on Saturday. The delegation is hoping to drum up orders and investments from the kingdom for pumps, car parts, boilers, and everything in between.

HAPPENING NEXT WEEK-

#1- It’s nearly time to vote: Polling stations will open this Sunday and close on Tuesday for those here at home to cast their votes in the presidential election. You can check your nearest polling station online if you haven’t already. We should hear the first round of results by 18 December.

#2- More inflation relief? New figures released on Sunday could show that inflation continued to slow in November on the back of easing food costs and a favorable base effect, according to a poll of six analysts conducted by Reuters.

  • Where we stand: Annual urban inflation eased from September’s record high to 35.8%y-o-y in October thanks to slowing food costs. Core CPI eased to 38.1% from 39.7%.
  • Where we could be heading: The poll’s median projection has core inflation slowing to 37.2% in November.
  • Caveat: Lower figures or not, businesses aren’t feeling optimistic about how sharply higher prices are going to impact the economy over the next year, according to PMI survey data out this week.

#3- There’s an app for that: E-payments, telemedicine, smart farming… Looks like the digital turn is in full force across pretty much all sectors. Business leaders will head to the St. Regis Almasa Hotel in the new capital this Sunday and Monday to discuss how to make industries a little smarter at the e-Globe Expo.

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

OIL BEARS- Oil sinks to six-month low: Oil prices fell for the fifth day running yesterday, as bearish market sentiment continued despite some OPEC+ members agreeing to voluntarily reduce output last week. Brent futures tumbled almost 4% to USD 74.24 a barrel — its lowest level since June — in a fresh bout of selling attributed by Reuters to renewed concerns about global demand.

Sound smart: A market is said to be in bearish territory when it falls 20% or more below its most recent peak. Brent is now 23% below its September peak.

DIPLOMATIC ENERGY- It was against this backdrop that Russian President Vladimir Putin made a rare overseas trip yesterday, making official state visits to the UAE and Saudi Arabia to bolster ties with the oil producers. The Russian leader discussed deepening ties on oil policy with Saudi Crown Prince Mohamed bin Salman, Kremlin spokesperson Dmitry Peskov was quoted by Russian news agencies as saying. In Abu Dhabi, Putin described Russia-UAE ties as reaching “an unprecedented high” during talks with UAE President Sheikh Mohamed bin Zayed, which included discussions about the wars in Ukraine and Gaza. (Reuters | Bloomberg | WSJ | Financial Times)

Remember: The three countries were among the OPEC+ members that agreed to extend supply cuts into the new year in a bid to stabilize prices.

Also getting attention in the business press:

THE BIG STORIES ABROAD- No one story is dominating the international front pages this morning: US media are covering last night’s Republican presidential debate and the GOP’s latest middle finger to the Ukrainian war effort. Meanwhile, Bloomberg reports that Elon Musk’s SpaceX has attracted a USD 175 bn valuation, while Reuters says that Saudi Arabia is warning the US to not do anything stupid in response to Houthi attacks on ships in the Red Sea.

Introducing Google’s most powerful AI model: Google introduced its “most capable” AI model thus far — dubbed Gemini — which it claims processes more sophisticated reasoning and understanding of information. Google’s chatbot Bard will use Gemini to help the chatbot out with advanced reasoning, planning, and understanding. The company will release the most advanced version of Gemini early next year. (Reuters | CNBC | New York Times | CNN)

HELP GAZA-

Want to support relief efforts in Gaza, but don’t know how? We’ve got you. More than 1 mn people in Gaza have been thrown from their homes and every human being there lacks access to food, water, and fuel amid the most intense bombardment any population has endured this century.

The folks at Talabat are processing donations for a range of Gaza relief appeals by charities including the Egyptian Food Bank and Misr El Kheir. Pay in EGP using your credit card.

Or check out our list of charities to which you can make direct donations via bank deposit and / or Fawry.

COUNTING COSTS- How much are we really spending on fuel subsidies this year? We’re getting mixed messages…

More than first thought, says one official: Asharq Business reported yesterday that the government has upped its fuel subsidies allocation for FY 2023-2024. According to an official who spoke to the news outlet, we’re now looking at spending around EGP 130 bn this year, up 9% from previous calculations.

Slow down there, says another: It’s too early to determine whether the subsidy spend will increase this year, a Finance Ministry official told us yesterday when we reached out for comment on Asharq’s reporting. Fuel hedging contracts signed this year should mean that the government doesn’t have to cough more than expected on fuel subsidies, they said.

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