Good morning, all. We bid farewell to October today and prepare to enter the last months of 2024. Today’s issue leaves us with a lot to look forward to in the days and weeks to come, from IMF boss Kristalina Georgieva landing in Egypt next week to promises of custom facilities and a revision to the privatization program.

PSA-

We’re all getting an extra hour in bed tonight: Daylight saving time comes to an end at midnight tonight so don’t forget to turn back your clocks and enjoy that extra hour of sleep tomorrow morning.

WEATHER- It’s another cool day in Cairo, with a high of 26°C and a low of 19°C, according to our favorite weather app.

It’s equally as cool in Alexandria, with a high of 26°C and a low of 19°C.

And over the weekend, expect to see a high of 25°C in the capital and a low of 18°C in the capital.

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HAPPENING NEXT WEEK-

IMF boss will be in Egypt next week: The IMF’s Managing Director Kristalina Georgieva will be in Egypt next week to discuss our USD 8 bn loan program, Prime Minister Moustafa Madbouly said during his weekly press conference. A delegation from the Fund will arrive directly following her visit in preparation for the program’s fourth review, Madbouly added.

It’s not about securing more funds, Madbouly said — rather, the talks are aimed at extending the timeline for implementing measures called for under our loan program with the Fund. The talks will include a review of our commitments and targets, as well as our timeline for achieving them based on citizens’ needs and developments in the region, he added.

Int’l investors think we’re on the right track: Madbouly noted that the Egyptian delegation to last week’s World Bank-IMF annual meetings received a very positive response from foreign investors and international institutions, particularly with regards to the country’s structural reform program and current economic indicators.

Remember: President Abdel Fattah El Sisi earlier this month stated that the country might need to revisit the IMF agreement in light of the economic pressures the country is facing as it undergoes agreed-upon reforms. The IMF has expressed willingness to revisit the terms of the agreement, with Georgieva saying last week that the Fund has “been very open to adjust the Egyptian program or any other program to what is best to serve people.”

WATCH THIS SPACE-

#1- Our privatization program is getting another review: The Madbouly government will be taking another look at its plan to sell off stakes in state-owned companies and assets, Madbouly said, according to Bloomberg. The sectors and sizes of the stakes of offered companies may be re-evaluated, he said.

Constant reviews: Madbouly also noted that “current circumstances require us to review it continuously,” rather than once every three years per the policy’s initial guidelines.

Timing is everything: The news comes as the government prepares for the fourth review of our IMF program, slated to take place in the coming weeks. The review is expected to focus on revising the timeline for structural reforms agreed upon — with privatization among the structural reforms stipulated by the fund. Privatization has previously been a key focus area for the Fund, with the IMF noting in its third review of our loan program”m that “greater efforts are needed to implement the State Ownership Policy,” including accelerating the state’s privatization program.

We have been sitting tight waiting for privatization news: Earlier this month, Madboulysaid that the government will soon announce “important news” regarding the privatization of a number of banks and airports. The news was quickly followed by the central bank-owned United Bank temporarily listing its shares on the EGX and announcing its intention to float. The government is looking to raise USD 2-2.5 bn through the privatization of state-owned companies in FY 2024-2025.

#2- Another med price hike: The Egyptian Drug Authority gave pharma companies the final greenlight to hike the prices of 3.5k drugs, an official at the authority told AlMal. Around 1k products have seen their prices rise and the rest will see their prices rise over the coming few days, the source added.

How big of a hike? While the source didn’t disclose the size of the price increase, they explained that it was only half the hike pharma companies were after.

Remember:Some med prices were hiked an average of 25% in July. Pharma players have been calling for the government to green light hiking prices in response to inflationary pressures and the new EGP exchange rate against the greenback following the float in March cranking up the cost of raw materials, which are 90% imported.

#3- PIF to cut international investments: Saudi Arabia’s Public Investment Fund (PIF) plans to cut its overseas investments by about a third as it shifts its focus to diversifying the Kingdom’s domestic economy, PIF Governor Yasir Al Rumayyan told the Future Investment Initiative forum. The fund aims to reduce its international investments from 30% to between 18-20% of its portfolio.

REMEMBER- Egypt has long been on PIF’s radar: Saudi Crown Prince Mohammed bin Salman previously directed the fund to pour USD 5 bn into Egypt as the “first phase” of a larger investment push, with recent unconfirmed reports hinting at the fund’s interest in a stake in state-owned Egypt Gas.

#4- A fully integrated education platform in the making: The Education Ministry is working on an integrated education platform that utilizes AI and features educational content as part of its efforts to wean students off using external sources, Education Minister Mohamed Abdellatif said during a presser.

AND- Artificial intelligence and programming will become a mandatory subject for high school students in public schools starting next academic year to ensure they have basic programming skills when they graduate, the minister added.

CIRCLE YOUR CALENDAR-

#1- The Madbouly government will announce amendments to the real estate tax and simplifications to the Customs Law within two weeks, Prime Minister Moustafa Madbouly said during his weekly presser (watch, runtime: 15:42)

More details: The government is readying another tax relief package, this time for the real estate sector, Finance Minister Ahmed Kouchouk said when he joined Madbouly’s weekly presser yesterday. Kouchouk also noted that the government is planning to announce several customs relief measures as part of the state’s broader overhaul of the tax system.

#2- One for the software geeks: JobStack is holding its Software Industry Summit, a virtual event that will take place between 16-18 November. The event will bring together industry movers and shakers with a focus on “bridging the gap between cutting-edge technologies and top-tier tech talent, startups, and investors from around the MEA region.” Secure your spot at no cost via the link available on the event's website.

THE BIG STORY ABROAD-

For the first time in a while, business news is making it to the top of the foreign press’ front pages as Big Tech continue to report their 3Q earnings — with Meta and Microsoft both out with their figures for the quarter. Plus: The latest US economy figures are out, and Israel and Lebanon could be approaching a ceasefire.

Concerns among investors that AI investments will not translate into tangible returns anytime soon continue this quarter, with only Google owner Alphabet seeming to prove that the payoff is real so far.

#1- Microsoft’s shares fell in overnight trading after the tech giant forecast constricted growth in its Azure business due to a lack of data center capacity, bringing jitters back to investors who have been waiting for tech firms’ AI investments to pay off. The otherwise upbeat results saw a 16% y-o-y increase in revenues and net income come in higher than expected. (Bloomberg | Financial Times | Wall Street Journal | CNBC)

#2- Meta’s earnings came in slightly lower than expected, pushing shares to decline in after hours trading, on slower-than-expected growth in daily active users. CEO Mark Zuckerberg warned that more AI investments will come as the company continues to prioritize projects like the metaverse and AI-powered glasses. (Bloomberg | Reuters)

IN MACRO NEWS- The US economy grew at a 2.8% clip in 3Q 2024, slightly short of economists’ expectations of 3% growth. The results come just a few days before elections begin, and a week before the Federal Reserve meets to decide on interest rates. (FT | CNBC | New York Times)

CLOSER TO HOME- Israel is in talks for a potential ceasefire in Lebanon, with a draft proposal carried by Israeli media yesterday suggesting a potential agreement that could see a 60-day pause in fighting. Lebanese Prime Minister Najib Mikati said talks with the US envoys suggest an agreement could be reached before the end of the month and before 5 November.

US envoys for the Middle East Amos Hochstein and Brett McGurk are due to land in the Middle East today to discuss the potential agreement with Israeli Prime Minister Benjamin Netanyahu. (Bloomberg | Reuters | FT)

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