Good morning, friends. We are kicking off the week with an issue packed with good news: our budget deficit has narrowed, the net foreign asset surplus is rising again, Fitch Ratings upgrades our credit rating, and the IMF is optimistic about our medium-term growth.

More good news coming our way? We could be in line for more good news this week with the IMF boss in town for meetings with key stakeholders.

WATCH THIS SPACE-

#1- IMF managing director is in Cairo: The IMF’s Managing Director Kristalina Georgieva kicked off talks with Egyptian officials, including Prime Minister Moustafa Madbouly and CBE governor Hassan Abdalla yesterday after landing in Egypt. Georgieva’s visit comes as the state seeks to renegotiate the terms of our USD 8 bn loan agreement and precedes a visit from a delegation from the Fund in preparation for the program’s fourth review.

Watch out for: Georgieva will join Madbouly and Abdalla for a presser at the new capital later today.

On the agenda: Georgieva will be meeting with President Abdel Fattah El Sisi and key stakeholders “about maintaining Egypt's economic stability and fostering inclusive growth that will create opportunities for all Egyptians.”

Remember: President Abdel Fattah El Sisi last 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. Prime Minister Moustafa Madbouly last week noted that the state is focused on extending the timeline for implementing measures, in light of local and regional developments since the agreement’s drafting. The IMF has expressed willingness to revisit the terms of the agreement, with Georgieva saying that the Fund has “been very open to adjust the Egyptian program or any other program to what is best to serve people.”

#2- The EGP dips against the greenback: The USD rose more than 0.4% against the EGP on Thursday to reach EGP 48.94 to the greenback, marking its highest level since August’s global market meltdown, Asharq Business reports.

Questions are being asked about the EGP’s recent stability: The news coincides with investors reportedly pressing the IMF for an explanation regarding the EGP’s stability amid regional shocks and in light of Egypt’s pledges to maintain a flexible exchange rate, Bloomberg writes citing sources familiar with the matter. Maintaining exchange rate flexibility has been a key focus area of our IMF agreement.

Expect the topic to be brought up during upcoming meetings: Fund officials will discuss the flexibility of the EGP with authorities, Bloomberg writes without providing further details.

SIGN OF THE TIMES-

Coca-Cola continued to feel the heat of local boycotts in 3Q 2024, as Egyptian consumers continued to reject the soda giant amid key US ally Israel’s continuing war on Gaza, Reuters reports. “Like many other international brands, we have seen an impact from the boycott in Q3 in Egypt. Volumes of Coca-Cola are most affected, however, many of our other brands are less affected or not at all,” the company told the newswire.

Remember: Volumes of Coke sold in Egypt reportedly declined by double-digit percentage points in the first six months of 2024.

HAPPENING TODAY-

#1- The House is back in session: MPs will reconvene today through Tuesday to discuss and vote on three draft bills regulating criminal procedures, the Police Authority’s performance, and extending tax dispute settlements.

Taxpayers could have a looser deadline: The House will discuss and vote on amendments to the law regulating the tax dispute settlement on Tuesday, which will see the deadline for settlements pushed to 30 June 2025. The House's Budget Committee and the Senate approved the amendment last week.

Remember: The cabinet last week approved a draft law to settle the status of taxpayers and end existing tax disputes — part of its wider drive to ease the burden on taxpayers and unify and improve tax services. Cabinet spokesperson Mohamed El Homsani previously said that all tax disputes predating the announcement will be settled as part of wider efforts to build trust with taxpayers.

#2- The Iraq Investment Forum 2024 wraps up: A delegation from the Contractors Union is in Baghdad today for the second and final day of the Iraq Investment Forum, where the Iraqi government is showcasing available project offerings across various sectors, including infrastructure, education, healthcare, and water waste. The union is expected to land agreements between local contracting companies and Iraqi entities to carry out construction projects there in the upcoming period.

Local construction firms have been loving the Iraqi market, which has become one of a number of key markets local firms have been expanding to as domestic opportunities shrink. The Iraqi construction market is expected to grow significantly over the coming ten years, our sources said, adding that they expect demand to exceed the USD 500 bn market over the next decade. We dove into the full story in a HardHat published last in September.

HAPPENING THIS WEEK-

#1- The World Urban Forum to kick off Monday: The UN’s World Urban Forum will run from Monday to Friday in Cairo, and will bring together a global array of policymakers, urban planners, academics, business leaders, and community representatives to address today’s critical urban challenges. Co-organized by the Egyptian government, the forum will feature discussions and workshops aimed at reshaping urban policies and fostering sustainable, inclusive cities for the future. Check out the agenda or register to attend via the links available on the event’s official website.

#2- The three-day FinExpo Conference and Exhibition will begin on Thursday, 7 November at the Cairo International Convention Centre. The conference will bring together top banks, tech firms, and financial service providers for in-depth discussions on economic forecasts, stock market trends, and digital trading platforms. The event will feature over 50 speakers, and 25 talks and panel discussions. Register to attend on the event’s website.

#3- The annual Carerha Summit is set to begin on Friday: Female-focused edtech platform Carerha will kick off its annual two-day summit on 8 November in Sheikh Zayed’s Capital Business Park. The USAID- and DAI-backed event is expected to host 5k attendees and feature “engaging panels, talks, and fireside chats on topics such as empowering women in fintech, success stories of Egyptian brands, leveraging various platforms for business growth, and building businesses at a young age.” Find the link to register on the platform’s Facebook page.

NEWS TRIGGERS-

It’s the first week of November — here are the key news triggers to keep your eyes on this month:

  • Non-oil private sector activity to fall again? S&P Global will publish Egypt’s PMI figures for October on Tuesday, 5 November, measuring the country’s non-oil private sector activity. Last month’s reading saw non-oil private sector activity contract just one month after expanding for the first time in three years amid heightened cost inflation.
  • Fresh inflation figures: Capmas and the CBE are expected to publish October’s inflation data on Sunday, 10 November. Data for September saw annual headline urban inflation rise for the second month in a row on the back of rising energy costs.
  • Interest rates: The central bank’s Monetary Policy Committee will meet on 21 November to review interest rates. The CBE left rates unchanged when it last met in October.

DATA POINT-

#1- Egypt’s population reached 107 mn yesterday, marking an increase of 1 mn in 268 days, according to CAPMAS data. The fertility rate has declined from 3.5 children per woman in 2014 to 2.54 in 2023. Director of the Planning Ministry’s demographic center Amira Tawadros told EnterpriseAM that the drop reflects the government’s successful family planning efforts through the National Family Development Program, which works across all state entities and utilizes digital tools to lower birth rates.

We’re slowing down: The population reached the 106 mn milestone in February 2024, increasing by 1 mn in 250 days.

#2- Egypt is aiming for 120 GW of total electrical capacity by 2040, with 60% set to come from renewable sources, according to an Electricity Ministry statement. Key targets for 2040 include 65 GW of our capacity coming from wind and solar power, 2.4 GW from pumped storage, and reducing fossil fuel reliance to 49 GW.

PSA-

WEATHER- The weather in Cairo continues to cool today, with the capital in for a high of 26°C and a low of 19°C, according to our favorite weather app.

It’s almost the same in Alexandria, with a high of 25°C and a low of 19°C.

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THE BIG STORY ABROAD-

There are two stories vying for your attention this morning in the international press, including the latest from the US presidential elections as early voting gets underway and Berkshire Hathaway’s latest earnings.

#1- Kamala Harris is three percentage points ahead of Donald Trump among likely US voters in Iowa, a traditionally Republican-leaning state where Trump secured an eight-point victory over incumbent Joe Biden in 2020. Trump had also secured Iowa’s vote in the 2016 elections. The latest Des Moines Register/Mediacom Iowa Poll released overnight indicates that women voters are driving the unexpected outcome, with 57% independent women voters likely to vote for Harris — compared to 29% in favor of Trump. Among all independent voters, Harris maintained a 13-point lead over Trump. (Wall Street Journal | Financial Times | Reuters)

#2- Berkshire Hathaway’s cashpile has grown to USD 325.5 bn, after the conglomerate moved to sell off its holdings in Apple down to USD 69.95 bn in 3Q 2024 — equivalent to around one-quarter of its shares in the company, according to Berkshire’s 3Q 2024 earnings report (pdf). The selldown of its Apple position — part of a USD 34.6 bn sale of shareholdings in the three months ending in September — also saw Warren Buffet’s firm selling some USD 36.1 bn of its position in Bank of America during the quarter. (Bloomberg | Financial Times | Reuters | CNBC)

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