Good morning, wonderful people. The news flow is showing no sign of slowing down with the Emirati president in town and Act Financial’s shares expected to hit the EGX any day now. We are also sitting tight waiting for the third USD 820 mn tranche of our IMF loan to land in the state coffers after the IMF Executive Board completed its third review of our loan program during the early hours of today.

AND IN CASE YOU HAVEN’T HEARD– Do you want to attend our 2024 Enterprise Finance Forum on 24 September? Seating is strictly limited at our flagship, invitation-only forum for C-suite executives and other senior leaders.

Why attend? We’re in the early days of a generational realignment of power in our industry — in our region and beyond — and on the cusp of the biggest intergenerational transfer of wealth that the world has ever seen. With that as the backdrop, we’re going to take stock of where we stand six months after the float of the EGP and ask what’s next for finance in our country and the wider region. Among the questions we’ll be asking:

  • What’s Egypt’s role in the regional industry?
  • What are foreign investors looking for right now?
  • Is real estate the only asset class in Egypt?
  • What does the next generation of leaders think as they take over established family businesses?

Do you want to request an invitation? Tap or click the image below.

HAPPENING TODAY-

UAE President Sheikh Mohamed bin Zayed Al Nahyan is in Egypt for a multi-day visit, where he is set to hold discussions with President Abdel Fattah El Sisi and other officials, Extra News reported (watch, runtime: 1:32). Discussions will likely cover “economic investments, regional stability, and security concerns, as well as exploring new avenues for cooperation,” according to the State Information Service.

WATCH THIS SPACE-

#1- Act Financial’s shares to hit the EGX this week, a source from the company told Enterprise. The subscription period wrapped up last Tuesday — the retail tranche of the IPO was 54.8x covered, while the institutional tranche was 20.2x oversubscribed.

Remember: Act Financial offered some 32% of the company — 360 mn shares — at EGP 2.90 a pop in the first IPO the EGX has seen in a year.

#2- The pharma industry wants to hike med prices another 1% in light of rising fuel costs: Several pharma companies have asked the Egyptian Drug Authority to approve another 1% increase in med prices to compensate for rising fuel prices, head of the Federation of Egyptian Chambers of Commerce’s pharma division Ali Auf told Hapi Journal.

Meds just got pricier: Some med prices were hiked an average of 25% earlier this month as per requests from local pharma companies in response to the USD / EGP exchange rate moving from 31 pre float to close to 50 post float.

#3- Gov’t to double down on industrial development this fiscal year: The government is planning to devote 37% of its investments to industrial development and infrastructure this fiscal year, Planning and Economic Development Minister Rania Al Mashat said at the second meeting of the cabinet’s Industrial Development Group, according to a statement. The group also discussed plans to launch a digital investment platform and ways to cut down on red tape that hamper industrial development.

SOUND SMART-

Foreign investors are exiting the local debt market, but it’s a “common and healthy” practice as they usually cash out their t-bills at the end of every quarter to take advantage of the high returns on debt instruments, two government sources told Enterprise.

Foreign investments in Egypt’s debt currently stands at USD 32-33 bn after the exit of some USD 4 bn in June, one of the sources told us. Foreign investments in Egypt’s t-bills stood at USD 35.2 bn by the end of April, up from USD 32.0 bn in March, according to central bank data.

Why would investors exit our local debt market? Foreign investors are concerned about an impending cycle of rate cuts both in Egypt and the US, one source said. Another source pointed to the weakening of the EGP against the greenback in June.

Appetite for our local debt persists, our sources said, adding that “Egypt is among the top countries where foreign investors make huge returns on their investments due to its high interest rate.”

ALSO IN DEBT NEWS- Don’t expect Egypt to tap the international debt market this year, one of the sources said, adding that the state is focusing on the local market to meet its financing needs for the time being. The government had jotted down USD 1.5 bn in foreign bond issuance for the fiscal year 2024-2025.

DATA POINTS-

#1- Our exports of medical supplies hit USD 320 mn in 2023, up 15% y-o-y, Mohamed Ismail Abdo, head of the Medical Supplies Division at the Cairo Chamber of Commerce told Al Arabiya. The division wants to ramp up medical supply exports to USD 1 bn annually, Abdo said.

#2- Value of M&As in the region on the rise: The total value of M&A transactions throughout the MENA region reached USD 46.6 bn during the first half of the year, up 48% y-o-y, according to LSEG data cited by Zawya. The number of transactions saw a 5% decrease compared to the same period last year.

SIGN OF THE TIMES-

McDonald’s global sales see first decline in over three years: McDonald’s reported its first decline in global sales since 2020, with the company’s sales falling 1% y-o-y in 2Q 2024 after having expected growth of 0.5%, the company said in its latest earnings release (pdf). The decline comes as lower-income consumers become more cost conscious amid rising inflation, Reuters reports. The fast food giant also attributed the decline to “the continued impact of the war in the Middle East,” as well as low comparable sales in China offsetting positive sales in Latin America and Japan.

Remember:McDonald’s is one of several Western goods and brands that have been subject to boycotts in the Middle East due to its perceived support for Israel.

PSA-

WEATHER- It’s another summery day in Cairo today, with a high of 36°C and a low of 27°C, according to our favorite weather app.

It’s only a little cooler over in Alexandria and the North Coast, with a high of 33°C and a low of 24°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

THE BIG STORY ABROAD-

It’s another day dominated by politics, with little business news of which to take note.

Venezuela is getting prominent play on front pages this morning after longtime president Nicolás Maduro claimed victory despite the opposition candidate Edmundo González having had the lead in most polls and exit surveys. Venezuelans took to the streets in protest and a number of countries are expressing concern, the Financial Times reports.

The US is cautioning Israel against striking Lebanon’s capital or any major infrastructure following the strike on Golan Heights, Reuters reports. Airlines including Lufthansa, Aegean, and Air France have stopped flights to Lebanon, Bloomberg.

In business news, a single AI story and the first slump in Mcdonald’s sales since 2020 are getting attention.

The AI story in question? Apple revealed in a research paper that it has been using Google’s chips to build and train its new AI software infrastructure, the first real dent in the armor of Nvidia, which has an 80% share of the AI chip market, Reuters reports.

OLYMPICS-

It’s a relatively quiet day in the Olympics, with the highlight being rowing, tennis, and lots of rugby sevens. The men’s triathlon is also scheduled to take place today.

In tennis yesterday: Spain’s Rafael Nadal exited the tournament, losing to Serbia’s Novak Djokovic. The Olympics’ website has the rundown on the big names that have made it through to the third round of the men’s and women’s singles.

Surfing also made headlines in Tahiti’s Teahupo’o — also known as the End of the Road, as it is seen as one of the most deadly surfing spots in the world due to the size of its waves and the large, shallow reef at its bottom. The third round of surfing saw favorites exit the competition after a brutal set of eight heats in which two riders went head-to-head, with only one advancing from each run.

The medal standings now at the Paris Olympics:

  • Japan (6 gold, 12 overall)
  • France (5 gold, 16 overall)
  • China (5 gold, 12 overall)
  • Australia (5 gold, 9 overall)
  • South Korea (5 gold, 9 overall)

But Enterprise, US media says Amreeka is at the top of the table… US athletes have so far taken home more hardware (20 medals overall vs 16 for France), but the Olympics themselves ranks countries by the number of golds a country has picked up — not by total medal count.

TEAM EGYPT has a number of matches scheduled for today including:

  • Volleyball: Egypt vs. Italy (10:00 am)
  • Shooting: Maggie Ashmawy, Trap Women’s qualifiers (10:55 am)
  • Judo: Abdelrahman Abdelghany, Men’s 81 kg Table of 64 (11:00 am)
  • Beach Volleyball: Doaa El Ghobashy and Marwa Magdy vs. Italy’s duo (12:00 pm)
  • Football: Egypt vs. Spain. (4:00 pm)

You can follow Team Egypt through this schedule or by heading over to our Paris 2024 Guide.

Want to see when your favorite sport is on? Check out the official schedule here.

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: We dive into Egypt’s green hydrogen storage infrastructure, which is set to play a vital role in our green transition.

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