Good morning, fellow Popsicles. We hope you are warm and looking forward to the weekend as much as we are on this very chilly morning.

Before we get underway: If we’re cold, imagine how folks in Gaza feel today. It’s a good time to remember that while we all face limits on USD use, there are good people doing good work for Gazans to whom you can donate in EGP, including the Egyptian Food Bank and Misr El Kheir.

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

ICYMI- EnterpriseAM KSA and Enterprise UAE have joined the growing Enterprise family of publications. Our two newest additions to the Enterprise suite are written for business leaders in Saudi Arabia and the United Arab Emirates as well as investors, and others doing business or deploying capital there. You can check out EnterpriseAM KSA here and EnterpriseAM UAE here.

And for the climate and logistics professionals out there, check out Enterprise Climate and Enterprise Logistics for a daily regional rundown of your industry.

THE BIG STORY HERE AT HOME-

Erdogan is coming to town in two weeks: Turkish President Reccep Tayyip Erdogan is reportedly coming to Egypt on 14 February to meet with President Abdel Fattah El Sisi, Bloomberg reports, citing Turkish officials it says are familiar with the matter. The two leaders will discuss the war on Gaza, ways to boost trade exchange, and the possibility of redrawing maritime borders between Egypt and Turkey to allow Ankara to look for more energy sources in the Mediterranean.

Mending broken ties: Erdogan’s visit will mark his first in over 10 years as the two sides work to mend a decade of tense relations triggered by a host of issues including Erdogan’s support for the Muslim Brotherhood, competing interests in Libya, and tensions over gas resources in the Eastern Mediterranean. The two countries restored diplomatic ties and reappointed ambassadors last summer after a decade of severed diplomatic ties.

HAPPENING TODAY-

#1- It’s interest rate day: The Central Bank of Egypt’s Monetary Policy Committee is meeting for the first time this year later today to review rates.

Analysts were split on what the central bank’s next move would be in a poll Enterprise ran this week. Four of the nine predicted that rates will be left unchanged as inflation cools, while other analysts told us that we could see hikes between 150-200 bps.

But this could all change if chatter about an agreement with the IMF is more than just rumors, with a number of analysts we spoke to telling us that updates on the future of the IMF package will play a big role in the CBE’s next move. An IMF delegation has been in Cairo for two weeks to work out an agreement, and while the rumor mill went into overdrive with suggestions that we’re in for a bigger package and soon, we are yet to hear anything official.

Speaking of the IMF- “There are negotiations between the IMf team and Egyptian authorities and they are making progress,” Jihad Azour, the IMF director for the Middle East, North Africa, said during a press briefing yesterday (watch, runtime: 36:27). “The first and second revisions are being looked into. The goals of the program approved in October 2022 remain the same and that’s the base of the discussions now,” he explained.

** Read more: Yesterday’s issue of EnterpriseAM had a deep dive into everything you need to know about our imminent IMF package and EGP devaluation.

#2- OPEC+ members will review the oil cartel’s ongoing production cuts during a Joint Ministerial Monitoring Committee today, Reuters reports. But don’t expect any breaking news from the meeting, as several OPEC+ sources told the newswire that they expect any decisions regarding extending production cuts into April to come later in the month.

TODAY IS ALSO THE START OF A NEW MONTH- Here are the key news triggers on which to keep your eyes on during the first few weeks of February.

  • PMI: S&P Global will publish Egypt’s PMI figures for January on Monday.
  • Inflation: Capmas and the CBE will publish the latest inflation data on Saturday, 10 February.
  • Foreign reserves: The central bank should release January’s foreign reserves figures at some point next week.

EGX WATCH-

EGX30 nosedived by 6.8% at today’s close amid heavy selloff from local investors. CIB was the best performer on the index for falling only by 1%. This came one day after a 3.8% increase saw the market achieve a historical high surpassing the 30,000 points level for the first time ever. The index is up 13.6% YTD.

Blame the impending devaluation: Investors have taken a “sell the fact” stance, offloading equities as the EGP devaluation appears to be inching closer and closer, East Capital International’s Emre Akcakmak told Bloomberg. The EGX30 has been on a months-long rally as investors looked to stocks as a hedge against high inflation and a weakening EGP.

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THE BIG STORY ABROAD-

Fed leaves rates unchanged: The US Federal Reserve left interest rates unchanged for the fourth consecutive meeting yesterday, it said in a statement. Interest rates will stay at a 22-year high of 5.25%-5.50% following an aggressive monetary tightening cycle, which has pushed rates to their highest level since 2001.

Everyone saw it coming: Traders, investors, and economists alike, were expecting the Fed to leave the current policy rate as is. However they can’t seem to agree about when the Fed may move forwards with its long-awaited rate cut.

March cuts seem unlikely: Despite the Fed officials saying that “the risks to achieving their employment and inflation goals are moving into better balance,” Fed chair Jerome Powell made it clear that rate cuts are further down the line than many had hoped. “Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting,” he said.

The story is on every front page this morning: Reuters | FT | CNBC | WSJ | Associated Press | NYT | Bloomberg.

On the issue of regional tensions and the Red Sea:

  • Iran has threatened a “decisive response” if the US strikes its “territory, or its interests or citizens abroad,” Iran’s UN Ambassador Amir Saeid Iravani said, according to Iranian state media. The statement came as the US Navy launched another attack against Houthi infrastructure in Yemen.
  • The European Union is set to send ships into the Red Sea by mid-February, Reuters writes, in a bid to help deter Houthi attacks on shipping. EU forces will not participate in attacks on Houthi positions, the bloc’s foreign policy chief added.

AND IN BUSINESS NEWS- Judge quashes Elon Musk’s “unfathomable” USD 56 bn Tesla pay package, arguing that the package — set to be the biggest in US corporate history — was excessive and unfair to shareholders. (Reuters)

CIRCLE YOUR CALENDAR-

#1- The National Dialogue 2.0 wants to hear your thoughts on the economy: Organizations and individuals have until Sunday, 11 February to submit proposals to be discussed during the second round of the National Dialogue, which is set to be focussed on economic issues, the dialogue’s general coordinator Diaa Rashwan told Hadith El Akhbar (watch, runtime: 3:43). The dialogue’s board of trustees will meet and set its timetable shortly after the proposal submission deadline.

What can we expect from this round of talks? The second round of the dialogue is set to address the exchange rate, monetary policy, soaring commodities prices, and the economic impact of geopolitical tensions, the dialogue’s Samir Sabry told local media last week..

#2- The Egypt Energy Show will take place from 19 February to 21 February in the Egypt International Exhibition Center. The event — centered around the year’s theme of Driving Energy Transition, Security, and Decarbonization — will gather 35k energy industry professionals and host over 80 conferences. You can sign up to attend here.

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

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