THIS EVENING: EGX30 closes down 5% after ADQ investment cools off parallel market + NDFs

Good afternoon, ladies and gentlemen. We’re starting off a new week that promises to be busy and bring us a very full pipeline of news, which most of us were anticipating after an eventful weekend.

THE BIG STORY TODAY

EGX falls 5%: The EGX30 fell 5.0% at the close of trading today, according to market data, after news of Abu Dhabi wealth fund ADQ’s planned USD 35 bn investment in Egypt for development rights to Ras El Hekma on the North Coast over the weekend.

REMEMBER- The EGP strengthened in the parallel and derivatives markets following the investment announcement, with the FX rate cooling to somewhere between EGP 49.50 and EGP 52.00 against the greenback, while the official rate remained unchanged. The EGP also strengthened in the market for twelve-month non-deliverable forwards, with traders putting the USD-EGP rate at the high 50s, down from a January peak of 66.7.

THE BIG STORY ABROAD

The Donald continues to dominate the Republican primaries and international headlines.Most recently, the former POTUS defeated Nikki Haley in her home state of South Carolina, with 60% to her 39%, only further solidifying his run for president. Haley still vows to stay in the running until at least the Super Tuesday primaries despite her losses, arguing that many Republicans are wary of Trump serving another term, but her performance has many questioning how long she can stay in the race. (Financial Times | Associated Press | Washington Post | Reuters | New York Times)

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• The Madbouly government has inked a USD 35 bn agreement with ADQ, giving the Abu Dhabi wealth fund and longtime investor in Egypt the development rights to Ras El Hekma on the North Coast.
• The Madbouly government is still looking at how it will use the proceeds from the sale, but a top government official told us yesterday that addressing the import backlog and paying arrears owed to foreign partners are among cabinet’s top priorities.
• News of the ADQ’s USD 35 bn investment in Egypt saw the EGP strengthen immediately in the parallel and derivatives markets. It remains unchanged at 30.95 to the USD in the official market ahead of banks opening today, with speculation now that we could see a “modest” devaluation as early as this Thursday.

*** It’s Inside Industry day —your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

In today’s issue: The high interest environment has been challenging for businesses, particularly manufacturers and industry players, as financing for capital expenditure is prohibitively expensive.

?️ TOMORROW’S WEATHER- Expect a warmer and sunnier day tomorrow that will bring us a high of 25°C in the daytime and a low of 12ºC at night, according to our favorite weather app.