Good morning, friends, and welcome to the wait-and-see issue of EnterpriseAM.

As of 5:30am CLT, we’re waiting for:

  • Word on what’s happening in Dubai at COP28, where radio silence prevails;
  • The results of the 2023 presidential election here at home, in anticipation that we’ll see a float of the EGP (or a series of devaluations — a much less welcome approach) once the results are in;
  • What the US Federal Reserve decides today on interest rates — and what the CBE will do when it meets a week from tomorrow.

COP28 has run into overtime: Countries remain at loggerheads over the wording of a draft agreement that circulated on Monday, kicking the conference into marathon negotiations on a final text.

The issue: The draft agreement which called for the “reduction of fossil fuel production and consumption” in a “just, orderly, and equitable manner” to achieve net zero “by, before or around 2050.” Calls for the “phasing out” of oil and gas don’t appear in the draft agreement, and it makes a tripling of global renewable energy capacity just a recommendation, not a commitment.

In the first corner: Saudi Arabia leads a group of (mostly Arab) oil and gas producers that fiercely oppose the use of “phase out” or “phase down” in any final agreement. Saudi has signaled for more than a week now that it simply won’t sign an agreement that talks about the end of hydrocarbons, which account for as much as 45% of its GDP.

In the other: The European Union and small island nations, who have variously called the Arab world’s stance “disgusting,” “deeply disappointing,” and “out-of-step.”

Why it matters: A single “no” vote from the nearly 200 countries participating means there’s no agreement.

The kingmaker? Saudi Energy Minister Abdulaziz bin Salman arrived at the COP28 presidency last night in what observers think is a sign that talks are getting down to brass tacks.

The timeline: The COP28 presidency had committed to a 4am CLT release of a new draft agreement, but there’s no sign of that as we slide toward dispatch time. As of this morning, delegates are set to meet in a plenary session in Dubai at 6:30am CLT.

Want to go deeper?Enterprise Climate has you covered on all things COP28 with its latest issue set to go live on the website and straight into your inbox at 9am CLT.

HAPPENING TODAY-

#1- All eyes are on Washington as the US Federal Reserve is expected to announce its decision on interest rates today.The Fed currently seems set on keeping rates unchanged, and with inflation nearing the coveted 2% target, investors are now speculating how early into 2024 policymakers will begin cutting rates.

Ahead of the decision, a mixed inflation print (pdf):

  • Headline inflation inched down to 3.1% y-o-y in November from 3.2% the month prior.
  • Core prices — which exclude volatile items including food and energy — were 0.3% higher, indicating persistent inflationary pressures.

Higher for longer? Don’t be surprised for the hawkish tone to remain at Powell’s press conference later this evening:

  • “[Tuesday’s] CPI report is a little bit of a ‘mood dampener’,” a strategist told Bloomberg. “This isn’t enough inflation deceleration to reassert or justify the market’s policy-easing expectations.”
  • “The Fed keeps telling us they don’t have confidence that they can say with certainty that inflation is going to [its target of] 2% anytime soon,” one analyst told the Financial Times. “I don’t think that confidence can be there after today’s numbers.”

Some areas of the market are recalibrating, some aren’t: With the market waiting on today’s decision, US stocks continued to rally despite the figures, with the S&P 500 clocking its highest close in almost two years, while US treasuries saw slight gains. Meanwhile, gold continued to fall and BTC traded lower following a dramatic plunge earlier this week.

Oil’s bear market continues to deepen: Oil prices plummeted as much as 4% yesterday on the back of the CPI data and continued concerns about oversupply, Reuters says. Brent futures closed 3.7% lower at USD 73.24 — the lowest level in six months.

FYI- It’s decision time for us soon: The Central Bank of Egypt will hold its final monetary policy meeting of the year next Thursday, 21 December.

#2- It’s day two of the Food Africa Expo where food and beverage businesses are showcasing tasters of their products to wholesalers, distributors, and retailers from 30 countries at the Egypt International Exhibition Center in a bid to cook up more trade with the Middle East and Africa.

#3- A trade mission to Saudi is well underway: A flurry of meetings and factory visits are taking place in Jeddah between sixteen Egyptian manufacturers and Saudi buyers, as part of a weeklong trade run organized by the Engineering Export Council of Egypt. Egyptian businesses are looking to secure orders and investments from the kingdom — the largest importer for our engineering sector — for pumps, car parts, boilers, kitchenware, and more, until the visit ends this Friday.

HAPPENING THIS WEEK-

#1- Deadline day for brownfield gold mining bid round: Companies have until 12 pm tomorrow to bid for five brownfield gold concessions in the Eastern Desert from the state-owned Shalateen Mining Resources Company. Another 13 exploration concessions will also soon be up for grabs at the start of next year, a government source recently told Enterprise.

Last minute rush?No offers have been submitted yet, though 10 companies have shown interest and bought the tender conditions booklet, a source at the Oil Ministry told us.

Another extension could be in the cards: Government will wait until the end of submissions to determine whether to extend the deadline for a third time, our source said.

#2- Negotiators are giving GERD talks another go: Efforts to find a breakthrough in the so far intractable GERD dispute will resume in the Ethiopian capital on 16-18 December.

THE BIG STORIES ABROAD-

#1- The United States is (slightly) changing its tone on Israel’s war on Gaza with President Joe Biden warning that its ally is “losing support” for its war. Biden called Benjamin Netanyahu’s bombing campaign in Gaza “indiscriminate” and said the Israeli leader needs to accept a two-state solution.

You can feel the worm turning: NYT foreign affairs columnist Thomas Friedman, meanwhile, suggests that Israel can’t bank on money or boots on the ground from the Arab world to rebuild Gaza when it’s done turning the enclave into rubble. Israel must have a “legitimate, effective Palestinian partner and commits to one day negotiating a two-state solution,” he says, suggesting after a visit to Riyadh that Saudi officials are still open to normalizing ties with Israel.

Wait, Thomas Friedman? Isn’t he, uhm … spent? Scoff at his orientalism, his simplistic (often jingoistic) takes (we do), but even his critics admit the guy is having something of a renaissance of late — and is once again being read in western capitals.

#2- Pundits are taking stock of what Google’s Epic app store loss in court means for the future of its Play Store and Apple’s App store. Increasing scrutiny from regulators could “derail profits” for both stores, the Wall Street Journal warns. But don’t expect changes anytime soon — for years, perhaps, CNBC warns: Google is likely to appeal the ruling (which we covered yesterday).

What they’re are missing: The app stores may (or may not — antitrust law, like copyright law, is so often in the eye of the beholder) be anti-competitive, but their existence created a largely safe, multi-bn USD economy. App stores keep users safe from malicious (and just plain bad) third-party apps and are the first line of defense against mobile fraud and predatory practices. Tech enthusiasts and dev nerds alike will want to watch this space closely.

#3- Apple aims to make your iPhone even safer with “stolen device protection,” a feature set to roll out in iOS 17.3 that would “require authentication through Face ID or Touch ID to perform certain actions.” The changes come after fantastic reporting by Wall Street Journal tech columnist Joanna Stern about how easy it was for thieves to take over your digital life if they managed to snag your device and passcode. Not a WSJ subscriber? Head over to the Verge for the rundown.

THE CRYSTAL BALL-

The prognostications about what awaits the global economy in 2024 are beginning to roll in:

#1- Geopolitics is the no.1 thing investors are freaking out about: Geopolitical uncertainty will be the biggest economic risk in 2024, according to a poll of 500 global institutional investors. Almost half of respondents (49%) cited “geopolitical bad actors” as a key concern, while 51% think that recession will be inevitable next year.

#2- Big banks see slower growth, mild recession at worst: Major global banks including Goldman Sachs, JPMorgan, and Morgan Stanley are forecasting a slowdown in global economic growth but say the likelihood of recession is diminishing, Reuters reports.

#3- US cuts oil price outlook: The US Energy Information Administration (EIA) sees Brent crude oil prices averaging USD 83 per barrel in 2024 — a USD 10 drop from its previous forecast last month, according to Reuters.

CIRCLE YOUR CALENDAR-

El Gouna Film Festival kicks off tomorrow, after having been postponed from its original October date. In response to the catastrophe unfolding in Gaza, this year’s edition will also feature a program of Palestinian cinema in collaboration with the Palestine Film Institute.

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

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.

In today’s issue: We take a look at what real estate developers want to see from the Madbouly government’s proposed real-estate-for-FX scheme.

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