Good morning folks, welcome to the last day of the work week here in the region and to day four Davos for those attending.

For you today, we have news of market speculation that the devaluation — supposedly just around the corner — could be smaller than we expect and happen much later on than we first thought. We’ve also got the low-down on Alshaya Group’s decision to reduce its operations in the country on the back of economic challengesand so much more — so let’s jump right into it.

And in case you missed it, we welcomed a new publication to the Enterprise family this week — EnterpriseAM UAE. Think of it as the UAE analogue to your morning read in Egypt — your essential report on business, finance, the economy, and regulation in one of the world’s most vibrant and exciting economies. You can sign up to have the newsletter delivered fresh to your inbox here.

** You can also stay tuned for the launch later this month of EnterpriseAM KSA. Tap or clickhere if you’d like to be added to our list for launch day.

THE BIG STORY HERE AT HOME-

Traders’ wager of a big devaluation around the corner begins to dissipate: While everyone is agreed that a devaluation is on its way, traders appear to be convinced that it’s going to be smaller than expected and further down the line than we first thought, Bloomberg reports.

The why: The EGP has been regaining value in the three-month non-deliverable forwards (NDF) market, suggesting traders are pulling back from wagers of a severe devaluation in the short term after IMF officials indicated that a full float of the EGP may not be in the cards for the immediate future, saying that the Fund is prioritizing getting inflation under control over exchange-rate reform. Three-month NDFs had the USD-EGP rate below 40 yesterday, from a record high of 45 at the end of December, according to the outlet.

But some aren’t convinced: “A potential upsizing of the IMF loan will likely be accompanied by an FX adjustment sooner rather than later amid additional pressures on the balance of payments due to the Gaza conflict,” Morgan Stanley economist Hande Kucuk said in a note cited by Bloomberg.

WATCH THIS SPACE-

#1- EFG Holding mulling swapping its PayTabs Egypt stake for a slice of its Saudi parent company: EFG Finance — the non-bank financial services arm of EFG Holding — might look into acquiring a stake in Saudi’s PayTabs, EFG Finance CEO Aladdin El Afifi told Asharq Business. EFG Finance would consider the option of giving up its 50% stake in PayTabs Egypt — a joint venture between EFG Holding and PayTabs — for a minority stake in the Saudi parent company, El Afifi said. EFG Finance “would like to have a seat at the table” to help accelerate cross-border expansions, he added.

#2- Egypt looks to hedge against rising commodity prices: The government isconsidering purchasing hedging contracts to guard against expected volatility in the price of certain commodities following disruption in the Red Sea that has upended global supply chains, Assistant Supply Minister Ibrahim Ashmawy told CNBC Arabia in an interview yesterday.

HAPPENING TODAY-

A high-stakes game against Ghana: The Pharaohs face a tense Afcon clash against Ghana today at 10:00pm CLT after a not-so promising start to the tournament that saw the team nearly losing 2-1 to Mozambique until a last-gasp penalty from Mohamed Salah. A poor showing could put Egypt’s tournament fate in jeopardy as it risks getting kicked out at the group stages.

FROM DAVOS-

It’s Davos day four: It’s a quieter day at Davos after yesterday’s headline speechesfrom US State Secretary Anthony Blinken and UN Secretary-General Antonio Guterres with sessions delving into the AI boom, green transitions, and the global startup scene, in addition to appearances from regional heavyweights you should tune into.

Rania Al Mashat will be taking the stage twice today: The international cooperation minister will kick off the day by speaking ata session on Building Equitable Transitions: Green and Fair at 11:15am CLT. Later on, Al Mashat is penciled in to take to the stage alongside Saudi Planning Minister Faisal Al Ibrahim, Moroccan Finance Minister Nadia Fettah Alaoui, Hikma Pharma Chairman Mazen Darwazeh, Dubai Future Foundation CEO Khalfan Belhoul, DAMAC Chairman Hussain Sajwani, and others for a session on MENA's Economic Dilemma: Reforming amid Uncertainty at 2:15pm CLT.

ALSO- MNT Halan CEO Mounir Nakhla is in Davos as part of the WEF’s Innovator Forum and will speak today on a panel on financial inclusion moderated by the Queen of the Netherlands.

** You can watch the live session here and check out the full program here.

ON THE SIDELINES- Al Fanar’s investments in Egypt could reach USD 1.5 bn this year asthe Saudi company expects its Egyptian operations to “take up a larger space in 2024,” company VP Sabah Almutlaq told Asharq Business at Davos (watch, runtime: 0:57). Al Fanar is a regional and global powerhouse in the construction of renewable energy systems and made the headlines in the local business press after inking an MoU to build a USD 3.5 bn green hydrogen and ammonia facility. Al Fanar has also supported our solar ambitions and runs a 50-MW section of the Benban Solar Park.

THE BIG STORY ABROAD-

It’s a busy morning in business news, with three stories capturing the attention of journalists around the world.

#1- Stocks and bonds retreated yesterday around the world. Investors are digesting signs that the United States, the European Union, and the UK will not move quickly to slash interest rates. European Central Bank Christine Lagarde set off the selldown as she joined peers around the world in signaling that rates are unlikely to start coming down until summertime, rather than this spring.

Bankers speaking in Davos are singing from the same hymnal on that front, writes Bloomberg, noting, “Everyone from JPMorgan’s Daniel Pinto to Standard Chartered’s Bill Winters to Cantor Fitzgerald’s Howard Lutnick have said they expect monetary policy to ease slower than anticipated by the market.”

The result: The S&P 500, Nasdaq Composite, EuroStoxx 600 and FTSE 100 all fell yesterday, and Asian markets are mixed this morning. Futures suggest mixed openings for major European benchmarks later this morning and a weak open on Wall Street. Notably, Chinese shares are touching a five-year low. (Financial Times | CNBC | Bloomberg)

#2- Iran is opening fire on its neighbors, claiming to fight “anti-Iran terror groups”: Iran has fired missiles and launched drones against targets in Syria, Iraq, and Pakistan in the span of 24 hours, openly claiming responsibility for the operations. It says the missile attacks underscore that it will be “tough and decisive” with its foes, the New York Times reports.

In other regional tensions: The US listed the Houthis as a terror group on the same day that they hit another US-operated ship.

#3- Samsung’s new Galaxy S24 lineup looks set to be a hit thanks to heavy integration of generative AI tech and modest tweaks to its popular designs. The launch of the new handsets is all over the front pages of the global business press, but gadget nerds will want to start with the Verge’s hands-on with the flagship S24 Ultra. (FT | CNBC | Reuters)

ALSO-

  • Kuwait has new ministers of oil and finance after the new emir shuffled his cabinet, leaving just three members of the previous cabinet in office. (Bloomberg)
  • A lab in China sequenced the virus that causes Covid two weeks before Beijing told the world about the deadly bug, the Wall Street Journal reports in an exclusive.

MORNING MUST READ-

OpenAI wants to ensure ChatGPT won’t be misused during election season. Thecreators of ChatGPT are strengthening their policies and tools to address and tackle the flow of misinformation and abuse as they “prepare for elections in 2024 across the world’s largest democracies,” the company said in a statement. Using ChatGPT to build applications for political campaigning and lobbying will be off-limits, alongside letting chatbots pretend to be real people, or using the software for voter suppression.

2024 is one of the biggest election years with over 50 countries heading to the polls — including the coming Trump vs. Biden showdown. We have the full rundown of everything 2024 elections in our Enterprise Explains published last month.

DATA POINT-

#1- The budget deficit clocked in at 4.95% during the six months to December 2023, while the primary surplus jumped six fold y-o-y to EGP 150 bn during the same period, according to the cabinet readout out yesterday. Revenues also jumped some 41.6% y-o-y, but public spending increased by 56% y-o-y in the same timeframe.

#2- A record 14.9 mn tourists visited Egypt in 2023, in line with the state’s target toreel in 15 mn tourists during the year, despite the headwinds that the industry has been facing, Tourism Minister Ahmed Issa said at a cabinet meeting yesterday. That’s up 27.4% from the 11.7 mn tourists that the country welcomed in 2022.

CLARIFICATION #1-Representatives from Emirates NBD and EGBank have reached out to us to let us know that their limits on international transactions have not changed. Instead, clients must contact each bank’s customer service department to specifically activate their limits before traveling abroad. Our previous coverage has been removed from our website.

CLARIFICATION #2- In yesterday’s issue of EnterpriseAM Egypt, we reported that OrascomConstruction signed an EGP 4.2 bn agreement with Arab Bank to help fund the fourth phase of Cairo Metro Line 4. The agreement inked between the two sides is not a loan, but for bank guarantees to the National Tunnels Authority, a representative of Orascom Construction told us. The story has been updated on our website to clarify this.

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