Good morning, friends. The question on our community’s hive mind this morning: Is today the day that the Central Bank of Egypt will take long-awaited action on the exchange rate?

SPEAKING IN FAVOR-

  • The first payment from ADQ has arrived as part of its USD 24 bn acquisition of the development rights toRas El Hekma and parallel plan to invest an additional USD 11 bn in real estate and other sectors. President Abdel Fattah El Sisi made the announcement yesterday at a previously-scheduled event (watch,runtime: 30:06);
  • Officials are telegraphing that they’ve made significant progress on the state asset sale program, with the expectation being that we could shortly see news of who will buy a stake inWataniya, the military-built filling station chain since transferred to the Sovereign Fund of Egypt;
  • Cabinet is putting USD 41 bn worth of investment in green hydrogen and renewable back on the table, announcing a flurry of MoUs yesterday after months and months of silence on a file that had generated substantial excitement in the business community in late 2022 and early 2023;
  • We have more clarity on BP’s USD 1.5 bn investment program here in partnership with Adnoc.

Throw in word of a multi-bn USD Italian industrial complex and news China wants to set up an industrial zone on the Mediterranean, and the message is clear: Cabinet wants the world to know that Egypt is open for business.

The overhang: Uncertainty on the value of the EGP. Sovereign Fund of Egypt chief Ayman Soliman has long argued that our primary problem is one of sentiment, not the fundamentals. He’s right, in many respects. The market has been looking for catalysts — and only clear movement on asset sales, on hydrogen, and (above all else) on the EGP will be sufficient to restore confidence and start reframing the narrative on the country.

A clear move on FX policy is just what the doctor ordered to capitalize on a string of positive signals.

What the wags are saying: Al Arabiya Business’ Fahima Zayed told viewers that “there are strong rumors … that the float of the EGP will occur within hours” shortly after El Sisi finished his speech (watch, runtime: 5:53). Zayed suggested some in the market think the central bank is looking at something like EGP 38.50 to the greenback should it go ahead with a devaluation today. The EGP strengthened to 46-48 after El Sisi’s announcement from EGP 50 before the president spoke, she said.

SPEAKING AGAINST- We have yet to sign an agreement with the IMF. Is the lender waiting for devaluation (or a float) before closing a staff-level agreement? Or will the central bank wait for an agreement to be in place before moving ahead? We’re not yet on the IMF board’s public agenda.

^^ We have more on all of this in this morning’s news well.

WELCOMING A NEW PARTNER-

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WATCH THIS SPACE-

#1- Italian firm Danieli wants to build a USD 4 bn industrial complex here:TheMadbouly government is looking into a proposal from Italian industrial manufacturer Danieli to establish a USD 4 bn integrated industrial complex for the production of iron and steel products that will create 17k jobs, a cabinet statement said.

But that’s not all, folk: The project will also see Danieli establishing an international training center in Egypt for engineers and technicians and could also attract a further USD 2-3 bn in investments for a green hydrogen plant.

#2- The details of BP's plan to invest USD 1.5 bn have started to become a little clearer: The global energy giant’s plan to invest USD 1.5 bn — which we first heard about last week — will take place over the next three to four years, Bloomberg reports. The news follows BP’s announcement earlier this month that it had formed a JV with Adnoc to target the development of natural gas assets in the country, but the investment will come entirely from BP and the company will continue to hold 70% of its existing interests in Egypt outside of the JV., a BP spokesperson told the business news information service.

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