Food prices drive inflation to fresh record high in July

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What We're Tracking Today

Palestinian, Jordanian leaders in Alamein + Red Sea oil spill averted

Good morning, wonderful people, and welcome to a new workweek for those of you not enjoying the last days of summer in Sahel.

It’s the beginning of the end — of summer. Kids attending Cairo American College head back to school this week, with new students due in class on Tuesday, 15 August, and returning students the next day. Students at the British International School, Cairo, follow suit on Monday, 28 August. Other international schools go back a bit later: American International School students, for example, are due in their seats by Sunday, 3 September.

Enjoy the good commute while it lasts: The roads will get crowded once again on Saturday, 30 September, when the new academic year gets underway at state-owned schools.

THE BIG STORY here at home? That would be the economy, where we have fresh inflation data (up on the same time last year, but down from last month) and tons of opinion from the chattering class to brighten your Sunday morning.

BUT FIRST, some very, very good news: Red Sea oil spill averted: It’s a wrap on the UN-led salvage operation to remove over 1 mn barrels of crude oil from a rusting supertanker off Yemen at a cost of USD 140 mn, the UN said on Friday. The FSO Safer was abandoned off Yemen following the start of the country’s civil war in 2015, and has been at risk of leaking, breaking apart or exploding in what the UN said would have had “catastrophic environmental and humanitarian consequences.” A UN salvage team has been unloading the oil from the container since late July.

Or 98% averted: Less than 2% remains of the 1.1 mn barrels of oil that were on the tanker. Some USD 20 mn is required to complete the operation, the UN said.

PSA- You can lower your SPF a notch this week: The sweltering heat is forecast to dip a bit this week, with daytime highs of around 35-37°C, according to our favorite weather app. You can expect overnight lows hovering around 23°C. The (slightly) cooler weather comes courtesy of northwest winds that are expected to sweep across northern Egypt to Greater Cairo, according to the Egyptian Meteorological Authority (here and here).

HAPPENING TODAY-

El Sisi x Abbas x King Abdullah : Palestinian President Mahmoud Abbas and Jordan’s King Abdullah are in Alamein today for a three-way summit with President Abdel Fattah El Sisi, according to Palestinian news agency Wafa. The three leaders will discuss regional and international issues, it says, without providing further details.

This is Abbas’ second visit to Alamein this month: The head of the Palestinian Authority joined the leaders of Hamas and other Palestinian factions in the North Coast city earlier this month for a new round of Egypt-sponsored reconciliation talks.

HAPPENING THIS WEEK-

The National Dialogue: It’s another week of closed-door meetings at the National Dialogue this week as the dialogue’s rapporteurs work with selected pro-government and opposition figures to finalize recommendations to be presented to President Abdel Fattah El Sisi.

Investment recommendations in the bag: The dialogue’s investment committee has finalized a number of draft recommendations that include granting more incentives to investors, improving investment legislation, boosting SMEs, and integrating the informal sector into the economy. The president will need to approve the recommendations before they’re sent to the House for discussion.

CBE to hold EUR T-bill auction on Monday: The Central Bank of Egypt (CBE) will auction EUR 600 mn worth of one-year T-bills on 14 August with settlement scheduled for the next day, Reuters reports, citing the central bank. This will be the first EUR-denominated T-bill issuance since November, when the central bank sold EUR 699.2 mn worth of one-year bills at a 2.3% yield.

Bidding opens for new industrial land plots on Wednesday : Investors will be able to bid for industrial land from 16 August through to 27 September under a new phase of the Industrial Development Authority’s (IDA) investment map, according to the authority's website. Some 1.7 mn sqm of land across 14 governorates will be offered to industrial investors in what is the authority’s first land auction since December. The entire bidding process will take place on IDA’s website.

Export subsidy payouts this week: The Finance Ministry will pay out a third batch of export subsidies under the sixth of the program on Wednesday and Thursday this week. The ministry has so far paid out EGP 8 bn to over 800 companies during the current phase.

THE BIG STORIES ABROAD-

The devastating wildfires in Hawaii are dominating the world’s attention this morning : Some 80 people have lost their lives as a result of the wildfires that swept across Hawaii’s second largest island Maui on Friday. (Associated Press | Reuters | Bloomberg | Wall Street Journal | Washington Post | New York Times | BBC)

The big business news story of the morning: SBF in chains. Sam Bankman-Fried, the disgraced co-founder of the collapsed crypto exchange FTX, will await his fraud trial from behind bars after a judge revoked his bail, saying that he likely tried to tamper with two witnesses. (Bloomberg | Financial Times | Reuters | Wall Street Journal | New York Times)

AND- “The era of cheap streaming is ending.” So says the Financial Times in its headline piece this morning, which reports that American streaming services are drawing a line under years of profligate spending and hiking subscription prices to levels akin to cable TV.

CIRCLE YOUR CALENDAR-

The Enterprise Finance Forum is taking place on 18-19 September at the St. Regis Hotel in Cairo. This flagship forum is the latest in our must-attend series of invitation-only, C-suite-level gatherings that allow senior members of our community to openly and frankly discuss critical issues in key sectors of the economy.

TAP OR CLICK HERE if you want to express interest in attending. We’ll be sending out the first batch of invitations soon.

Do you want to become a commercial partner? Ping a note to Moustafa Taalab, our head of commercial, or fill out this form and we’ll be in touch.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

LISTEN TO OUR PODCAST-

MISSED OUR PREVIOUS FORUMS? The EnterprisePodcast has you covered : The Enterprise Podcast’s forum series has been bringing you audio recordings of what was said on stage at the Enterprise Exports and FDI Forum and Enterprise Climate Forum.

WANT TO LISTEN? Head to: Apple Podcast | Spotify | Google Podcast | Anghami.

IN THIS WEEK’S EPISODE- It’s the very first panel of the Enterprise Climate Forum: Egypt brought home major victories from COP27, signing framework agreements for about USD 85 bn worth of green hydrogen projects, and announcing more than USD 10 bn in funding for the Nexus for Food, Water and Energy (NWFE) program. While we have a long way to go before much of the wins from COP27 will be tangible to the private sector, the opportunities in green hydrogen and NWFE are “now.” Our panelists helped explain how these two can be made actionable. We were joined by Jorgo Chatzimarkakis, CEO of Hydrogen Europe, Khalid Hamza, Director and head of Egypt at the European Bank for Reconstruction and Development, and Khaled Naguib, CEO of Hydrogen Egypt.

Solasi Wellbeing Festival has been lovingly created by Yes Yoga and Osana Family Wellness and takes place at beautiful Somabay from 21-23 September. Solasi brings you sunrise yoga, sound healing, funky classes, morning runs, enlightening workshops, healing treatments, tai chi, meditation, kids’ activities, locally sourced food, and lots of dancing.

Don't miss your chance to take #ThreeDaysOff and flow with us at Solasi at Somabay. Head to solasifestival.com to find out more and book your pass today.

Egyptian inflation hits another record high in July 2023

Inflation accelerated at a record pace for the second month running in July , as surging food costs and the impact of a series of devaluations maintained upward pressure on prices. The annual urban rate of inflation inched up to 36.5% y-o-y during the month from 35.7% in June, according to figures released on Thursday by state statistics agency Capmas.

On a monthly basis, inflation slowed for a second consecutive month , coming in at 1.9% from against 2.1% in June.

Food remains the pain point: Food and beverage prices — the largest component of the basket of goods and services used to calculate inflation — rose 68.4% y-o-y in July, faster than the 65.9% rate the month before.

Analysts predicted this: HC Securities’ Heba Mounir had forecast inflation to rise to 36.6% y-o-y, while Capital Economics’ James Swanston was expecting inflation of 36.7%.

Core inflation remains elevated: Core inflation — which strips out volatile items such as food and fuel — dipped to 40.7% y-o-y in July from June’s record high of 41%, according to central bank data. Monthly core inflation fell to 1.3% in July from 1.7% in June. The central bank will publish its monthly note pointing at the causes behind the July inflation reading on 15 August.

A new commodities crunch? Hikes in the prices of commodities including tobacco and sugar were among the key drivers of inflation in July. Global factors — including the negative impact of El Niño’s hotter weather on sugar crops — were exacerbated by ongoing import difficulties and stockpiling by some traders, economic analyst Hany Geneina told Enterprise. The end of the Black Sea grain pact between Russia and Ukraine, and India’s decision to ban exports of non-basmati white rice, are expected to put pressure on local wheat and rice markets in the months to come, S&P Global’s Yasmine Ghozzi said in a LinkedIn post.

LOOKING AHEAD-

All eyes are still on the exchange rate: Some analysts expect the EGP will weaken this fall — a development that could drive inflation still higher. S&P Global is predicting an FX adjustment in September or October in tandem with the delayed IMF review of our USD 3 bn loan program. The financial services firm sees the EGP ending the year at 37 to the USD.

Price hikes to peak in 4Q? The expected further devaluation, “coupled with the expected electricity tariff hikes that the government has been pushing back,” means inflation will likely “continue its upward trajectory to peak in October,” said economist Mona Bedeir. S&P Global’s Ghozzi is also predicting a peak of “close to 39%” y-o-y in October, “ending the year at close to 35% in 2023 and 20% in 2024.” Geneina is forecasting price hikes to peak at around 45% annually by the end of this year, while banking veteran Hany Aboul Fotouh also thinks inflation won’t start to come down until 1Q 2024.

Pundits don’t see inflation disappearing after 4Q: Look for it to remain north of 30% next year after averaging 24.4% in 2023, the IMF said last month.

Where are interest rates headed next? Following its surprise 100-bps interest rate hike last week, the central bank will hike rates by another 200 bps before the end of 2023 in a bid to curb inflation, both Ghozzi and Geneina predict. The central bank has now hiked rates by 11% since March 2022 and is still targeting inflation of 7% (+/- 2 percentage points) on average by 4Q 2024.

The story got international coverage: Reuters | Associated Press | Bloomberg | Forbes Middle Eas t.

Moody’s extends review for potential downgrade of Egypt’s credit rating as Bloomberg’s chief economist says another devaluation is inevitable

The pundits were in overdrive late last week and into the weekend , with everyone from Moody’s (more threats of a downgrade) to Citi (no longer bullish on our debt) and Bloomberg (devaluation is inevitable) weighing in on where the Egyptian economy goes next. We read so you don’t have to:

UP FIRST- Moody’s is extending its review of a potential downgrade for our sovereign credit rating as it weighs progress on the government's reform agenda against evidence of weakening FX liquidity and the likelihood of further currency devaluation, the rating agency said in a statement (pdf) on Thursday. The review of Egypt's B3 long-term foreign-currency and local-currency issuer ratings will continue for another three months, the Finance Ministry said following the announcement.

Remember: Moody’s in May started a review to downgrade the country’s debt score, warning of growing risks to the country’s liquidity and debt affordability. The agency had cut our credit score to B3 back in February. Each of the big three rating agencies have revised their stance on Egyptian debt this year: Fitch Ratings in May cut its rating to B while S&P Global Ratings in April downgraded its outlook to negative.

Here’s what Moody’s is keeping an eye on:

#1- Declining FX liquidity: A persistent decline in FX liquidity could offset the proceeds of recently announced asset sales, Moody’s said, pointing to the widening deficit in net foreign assets. The deficit in net foreign assets widened to negative USD 27.1 bn in June from negative USD 24.4 bn in May, an amount that exceeds the US D 1.65 bn in FX expected from the sale of state assets. “If sustained, continued net outflows could potentially undermine the goal to sustainably replenish the economy’s FX liquidity buffers ahead of increased debt service payments in FY 2023-24 and FY 2024-25,” the rating agency wrote.

Remember: The government expects to sign the final contracts to sell the USD 1.9 bn ofstate-owned assets in September, an unnamed government official recently told CNN Arabic. Investors are currently conducting due diligence on the assets ahead of agreeing final terms.

#2- The threat of further devaluation: “The persistence of foreign exchange shortages, as reflected in a parallel exchange rate . . . increases the likelihood of renewed official currency devaluation that could further drive inflation, borrowing costs and the general government debt ratio to levels more consistent with a lower rating level,” Moody’s said. The parallel rate currently stands at EGP 38.00 against the USD, compared to the official rate of EGP 30.90.

#3- Progress with the IMF program: “Moody's would consider lack of progress with the IMF review over the remaining review period as an indication of a potential weakening of external financial support, which otherwise provides a key support to Egypt's credit profile at the current rating level,” according to the rating agency.

Remember: The IMF in April postponed its first review of the USD 3 bn loan program due to a lack of progress on privatization and exchange-rate flexibility. Initially scheduled for March, the review is now widely expected to take place in September.

On the bright side: The report acknowledges “significant progress” in selling state assets and business environment reforms, including the removal of preferential tax breaks for state firms.

What’s next? “The extended review period will focus on the extent to which the proceeds of the recently concluded asset sales help restore foreign currency liquidity buffers evident in foreign exchange reserves, the monetary system's net foreign asset position, FDI inflows, as well as exchange rate dynamics,” Moody’s said.

The story was picked up by the foreign press: Bloomberg.

CITIGROUP IS BEARISH ON OUR DEBT-

Strategists at Citigroup said they had reduced their overweight call on Egyptian debt because the privatization program is “increasingly falling behind targets,” according to a note picked up by Bloomberg. The downbeat sentiment reflects a shift from the US bank’s position in June, when Luis Costa, global head of emerging-market sovereign credit at Citigroup, said that the US bank has adopted “a more positive view” on the EGP and the country’s USD bonds in the short-term.

What they’re saying: “Idiosyncratic risks remain elevated in Egypt,” the strategists wrote in the note. “The prospect of a delayed IMF agreement is increasing as the pace of privatization appears insufficient to meet its quantitative performance criteria.”

FINMIN’S REAX-

Maait responds: Moody’s decision to extend its review “reflects a balanced view of the steps and reform measures” taken by the government during recent months as well as an “understanding of the external and internal difficulties” facing the Egyptian economy, the ministry statement quotes Finance Minister Mohamed Maait as saying in response to the Moody’s report.

Working on it: The government is “working on achieving more reforms and structural measures during the coming months” to address the challenges outlined by Moody’s as well as other economic headwinds, the minister said.

DEVAL WATCH-

Another deval is inevitable, says Daoud: The country’s low portfolio inflows, negative net foreign assets, and interest rates all mean that “another devaluation is a matter of when and how much rather than if,” Bloomberg chief EM economist Ziad Daoud said in an interview with Bloomberg TV (watch, runtime: 4:29).

#1- Inflows: “[Egypt] has a current account deficit of USD 10 bn. It's not getting much in terms of portfolio inflows . . . or foreign direct investment, which means you have lots of demand for external currency and that requires a weaker currency,” said Daoud.

#2- Foreign liabilities: “If you look at the net foreign assets of the central bank and the banking system as a whole, it's never been so negative,” said Daoud. “So all these entities are running liabilities that are much bigger than their assets, and their capacity to defend the pound going forward and keep it stable is no longer there.”

#3- Interest rates: “And if you look at the interest rates . . . Egypt offers a very low interest rate relative to where inflation is . . . it’s deeply negative . . . much lower than its emerging market peers,” said Daoud. “And that, again, that's not attracting capital into Egypt."

Egypt’s budget deficit unexpectedly narrows in FY 2022-2023 - Finance Ministry

The budget deficit came in lower than expected last FY: Egypt’s budget deficit narrowed to 6.0% in the 2022-2023 fiscal year that ended on 30 June, according to figures released by the Finance Ministry on Thursday.

The gov’t wasn’t expecting the budget deficit to narrow: The figure came in below last year’s 6.1%. Preliminary indicators released last month had suggested a deficit of 6.2%, while the ministry put the figure at 6.4% in a May estimate.

Remember: This deficit figure doesn’t account for borrowing in 4Q. The government forecast in May an “adjusted budget deficit” of 8.0% for the fiscal year. This figure includes the EGP 165 bn in fresh borrowing approved in March to cover debt service and wage and pension hikes in the final quarter of the year.

An improved primary surplus: In line with preliminary data, the country recorded a primary surplus of 1.6% (EGP 164.3 bn) in FY 2022-2023, up from 1.3% the year before.

Higher tax revenues + higher spending: Tax revenues rose 27% y-o-y, while spending rose almost 19%, the ministry said, without disclosing the raw figures. Preliminary data had suggested a 23% rise in tax revenues to EGP 1.2 tn and a 16% rise in spending to EGP 2.1 tn.

Debt / GDP increases: The weakening of the EGP against the USD and rising interest rates added another EGP 1.3 tn to the government’s debt bill, or 13.1% of GDP. As a result, the debt-to-GDP ratio rose to 95.6% by the end of FY 2022-23 from 87.4% the year before, in line with expectations.

Egypt’s gas output hits three-year low in 2Q 2023

Total gas output in Egypt fell by 5% in 2Q 2023 from the previous quarter to 5.88 bn cubic feet per day (cf/d), its lowest since 2Q 2020, Mees reports. Output was down 9% compared with the same period a year before, and nearly 1.2 bn cf/d below the record of 7.07 bn cf/d in 3Q 2021 as output in offshore and onshore fields fell.

Zohr is reportedly producing less: Eni’s giant Zohr field saw record output of 2.76 bn cf/d in 3Q 2021 but output has now been effectively capped at 2.3 bn cf/d on the back of “water infiltration issues,” the industry news site says. The Italian firm’s flagship field saw output drop by 11% y-o-y in 2022 to 2.5 bn cfd, Mees reported earlier. The government recently co nfirmed that the field is currently producing 2.3 bn cf/d.

Remember: Zohr, the Mediterranean’s largest-ever gas find, accounts for some 38% of Egypt’s gas output. The discovery of the field in 2018 allowed the country to pull the plug on gas imports and turned it into a net natural gas exporter.

Nile Delta output at its lowest in eight years: Gas output from onshore Nile Delta fields fell by 5% in 2Q 2023 to 485 mn cf/d, an 18% drop y-o-y and the lowest figure since 3Q 2015. Emirati firm Dana Gas, which derives all of its local output from the area, recently reported (pdf) a 14% y-o-y fall to 22.6k boe/d during the quarter “due to natural field decline and reduced investment activity.” Producers in the Nile Delta and the onshore Western Desert have “slashed gas-related investment,” according to Mees.

Not all is lost: Gas output in offshore Mediterranean projects fell by 5% q-o-q to 4.37 bn cf/d, the lowest quarterly figure since 4Q 2020. However, there could be an uptick soon thanks to fresh drilling campaigns from companies including BP and Shell, Mees says.

REMEMBER- We need more gas: In the immediate term, spiking demand for electricity amid a heatwave has led to shortages of gas that have forced the government to institute nationwide rolling blackouts. In the longer term, Egypt wants more gas to feed to its liquefaction facilities for re-export to Europe as it seeks to become a regional energy hub for the continent.

EGX to launch Islamic index in 4Q 2023. PLUS: Evolve Holding eyes future contracts backed by gold

Islamic index + futures exchange coming in 4Q 2023: The EGX is set to launch its inaugural futures exchange along with its maiden shariah-compliant index in 4Q 2023, Al Borsa reports, quoting EGX chairman Ramy El Dokany.

#1- The Islamic index: The shariah-compliant index will be launched in collaboration with Standard & Poor’s between October and November, El Dokany reportedly told the newspaper. Some 20-25 preliminary stocks comply with the guidelines of the new potential index, he added.

Remember: The Islamic index is being launched to replace the EGX50, which was terminated by the bourse last month due to inactivity.

#2- The futures exchange: The country’s first futures exchange is expected to go live in the final quarter of the year, El Dokany told the newspaper, without providing a more specific timeframe. Ten state-owned and private-sector banks are currently in talks with the bourse to become members of the exchange’s clearing company, four or five of which will be chosen initially, he said.

Remember: The FRA, EGX, and Misr for Central Clearing and Depository (MCDR) are working to launch the futures exchange. The plan is for the exchange to initially allow traders to buy and sell index futures contracts, before launching stock futures and stock and index options at a later date. The EGX has been in talks with Beltone Financial to become the market maker for the exchange since the financial services firm is currently the only licensed market maker in Egypt.

ALSO- One asset manager wants to launch gold futures on the exchange: Evolve Holding plans to launch gold futures contracts once the market is up and running,CEO Sameh El Torgoman reportedly told Al Borsa, without providing more information.

EFG Holding reports 20% profit growth in 2Q 2023

EFG Holding’s net income rose 20% y-o-y to EGP 405 mn in 2Q 2023 , according to a press release (pdf) on the company’s latest financial results. Revenue was up 51% during the quarter to reach almost EGP 3.1 bn “on the back of broad-based growth across the investment bank (EFG Hermes), the commercial bank (aiBANK), and the non-bank financial institutions (NBFIs) platform (EFG Finance), the release read. On a 1H basis, EFG Holding saw both net income and revenue rise 89% y-o-y, it said.

The breakdown:

Revenues at EFG Hermes’ investment bank rose 61% y-o-y to EGP 1.6 bn in 2Q, driven primarily by higher brokerage and treasury revenues.
aiBANK’s revenues rose 58% y-o-y to EGP 888 mn, driven by a 43% y-o-y increase in net interest income and a 181% y-o-y increase in net fees and commission income during the quarter.
NBFI platform EFG Finance reported revenues of EGP 620 mn in the quarter, up 23% y-o-y. This was driven by a near tripling in revenue at consumer finance arm valU to EGP 207 mn.

What they said: “Our divisions continue to deliver on our strategies on both the buy and sell-side at EFG Hermes,” group CEO Karim Awad said. “Moreover, I am also thrilled with the performance of EFG Finance and aiBank as they continue to reap the rewards of increased demand for their diverse suite of financial solutions and banking services,” he said.

Gold and cigarette prices get airtime on Egypt’s talk shows

It was a quiet night for the talking heads last night. With Lamees El Hadidi and Sherif Amer still on their summer breaks, and Amr Adib taking the night off, Al Hayah Al Youm’s Lobna Assal and Ala Mas’ouleety’s Ahmed Moussa provided the bulk of the coverage, covering a variety of topics including gold and food prices, the latest offering of industrial lands, and privatization.

GOLD PRICES-

Gold prices rise 12%: The price of 21-carat gold has surged 12% in recent days on renewed demand for gold coins and alloys, Supply Ministry Advisor Nagy Farag told Al Hayah Al Youm’s Lobna Assal (watch, runtime: 3:44).

Bullion prices surged last week: The price of 24-carat gold rose almost 8% to EGP 2.65k in the week to Saturday while 21-carat gold increased 7% to EGP 2.32k during the week.

Remember: Gold prices soared to record highs earlier this year as savers responded to the FX crunch and rising inflation by investing money in safe haven assets. Prices have dipped in recent months following efforts by the government to stabilize the market, which included relaxing customs rules in a bid to increase supply.

HOLY SMOKES-

Cigarette price volatility will continue through to next month: Cigarette prices aren’t expected to decline back to their normal prices for another 3-4 weeks, Eastern Company Managing Director and CEO Hany Aman told Akher El Nahar on Friday (watch, runtime: 1:13:26), amid shortages of some types of cigarettes and recent price hikes. Aman announced last week that his company will be increasing the daily quantity of cigarettes it delivers to the market starting this week. The Federation of Egyptian Industries’ (FEI) cigarettes division head Ibrahim Embaby suggested to the Supply Minister to consider re-offering confiscated cigarettes in Wataniya gas stations at the official prices, Masrawy reports, citing a federation statement.

ALSO ON THE AIRWAVES-

Privatization: GAFI boss Hossam Heiba was on with Akher El Nahar’s Mohamed El Baz to assure viewers about the impact of the government’s privatization strategy (watch, runtime: 10:40).
Industrial land auction: Industrial Development Authority (IDA) Mohamed Abdel Karim appeared on Ala Mas’ouleety to discuss the upcoming auction of industrial land that will launch this week. We have more on this in this morning’s What We’re Tracking Today, above (watch, runtime: 19:34).
Covid: The new sub-variant of the covid-19 virus, dubbed EG.5 / Eris, has not yet been detected in Egypt, Health Ministry spokesman Hossam Abdel Ghaffar told El Baz (watch, ru ntime: 1:23:00).

Egyptian researchers discover ancient mini whale in Wadi Al Hitan

A fresh prehistoric discovery in Fayoum is dominating the conversation on Egypt internationally this morning: The fossil of a miniature whale only 2.5 meters long has been unearthed by Egyptian paleontologists in Wadi Al Hitan. The fossil is “not something we usually see from that time period,” said professor Hashem Sallam, founder of the Mansoura University Vertebrate Palaeontology Center, referring to the Eocene period that lasted from about 55.8 mn to 33.9 mn years ago. The whale has been named Tutcetus rayanensis after the Egyptian pharaoh Tutankhamun. Read the researchers’ study in the open-access journal Communications Biology here. (AFP | The Guardian | CBS News | ABC News | The National | Business Insider | The Independent)

Also making headlines:

Egypt stays neutral in Russia-Ukraine war: Egypt is resisting requests from senior US leaders to send weapons to Ukraine, the Wall Street Journal reports, citing Egyptian and American officials. (WSJ)
The Rosetta Stone returns – sort of: The Rosetta Stone is being “digitally repatriated” to Fort Qaitbay in Rashid— the believed site of its discovery — by anti-looting arts collective Looty. Visitors will be able to see an augmented reality installation of the stone via a QR code. The stone was captured by the British in 1801 and has been displayed at the British Museum ever since. (New York Times)

Egypt’s investment authority is simplifying filing procedures. PLUS: News from SODIC, Compass Capital, Wizz Air

REGULATION-

GAFI continues its war on paperwork: The General Authority for Investment and Freezones (GAFI) has canceled some of the documents that it requires companies to provide for a number of post-incorporation services in a bid to “improve the investment environment” by simplifying procedures, it said in a statement. Among the papers companies no longer need to provide are those related to nominating board members, holding board meetings, appointing auditors, and reporting the death of partners or shareholders.

REMEMBER- The authority last week began operating its new digital platform, which provides investors with services to establish companies, authenticate contracts at notary offices, and register using electronic signatures among other services.

REAL ESTATE-

#1- SODIC is set to deliver the first units at its North Coast June project in 3Q 2023 , Al Mal reports, quoting the company’s general manager Ayman Amer. The upmarket real estate developer sold more than half (55%) of the units in the 281-feddan project, he said. The company reported net income of EGP 148 mn in 2Q 2023, up 126% y-o-y. The project accounted for 15% of the company’s gross contracted sales in the first six months of 2023, it said.

#2- Compass has a USD 100 mn real estate fund in the works: Private equity firm Compass Capital plans to set up a USD 100 mn real estate investment fund within a year, Asharq Busin ess reports, citing an interview with Managing Partner Tarek Abdel Rahman. The fund could invest in office and commercial projects in east and west Cairo, he added.

TOURISM-

London to Cairo on a budget: Hungarian budget airlineWizz Air is opening a new route connecting Cairo’s Sphinx International Airport to London’s Luton Airport, the airline said on its website. The airline will operate three flights a week starting 30 October, with fares from GBP 53.99 (EGP 2.1k) one way.

TRADE-

This Chinese shipping line is coming to Egypt: A new shipping line launched by Chinese logistics firm Torgmoll linking Chinese and Russian ports has begun servicing Egypt, Al Mal reports, quoting Walid El Saiedy, chairman of Royal Trade Agency and a member of the Damietta Shipping Chamber. The New New Shipping line began operating a regular container shipping service between Russia and China via the Arctic Ocean earlier this year, and according to El Saiedy recently made its first stop at Dekheila port. The service will link Egypt’s Dekheila and Damietta ports with ports in Russia and China, he said.

Global oil demand hits record high in June. PLUS: Threats to global LNG supply and fresh US inflation data.

Global demand for oil has never been higher: Global oil demand reached an all-time high in June and could break records again this month amid rising consumption in China, the International Energy Agency (IEA) said in a report last week. Global demand reached 103 mn barrels per day for the first time ever during the month, putting upwards pressure on prices as the market tightens on the back of reduced supply by oil producers.

Oil prices have been on the rise in recent weeks , with Brent futures up 10% since late July. The crude benchmark last week surpassed USD 88 per barrel for the first time since the end of January.

It’s looking like a record-breaking year, too: The IEA is now projecting global demand to rise to a record 102.2 mn barrels per day this year, up 2.2 mn b/d from 2022.

Impending strikes in Australia threaten global LNG supply: Industrial action at three major LNG terminals in Australia is threatening to deliver a fresh shock to the energy markets, potentially removing as much as 10% of global supply from the market, Bloomberg reports. Workers at Chevron and Woodside Energy Group last week voted to go on strike over pay and conditions and could begin walking out this week.

One analyst isn’t concerned: “This is all part of union negotiations,” Credit Suisse analyst Saul Kavonic told Reuters. “While there will be loud rhetoric threatening large production outages as the unions and LNG companies test their positions, it is unlikely global supply will actually be impacted materially.”

Europe is reckoning with a new world: The strike threat was enough to cause European gas prices to surge almost 40% on Wednesday in a bout of volatility that underscores the continent’s continued vulnerability as it tries to move beyond its old dependency on Russian gas.

US inflation figures unlikely to provoke another Fed hike: US inflation ended 12 consecutive months of declines in July, inching higher to 3.2% y-o-y from 3.0% a month earlier, according to figures released Thursday. This was slightly below the expectations of analysts, who had forecast a larger increase.

What they’re saying: “I’m encouraged by the data. This keeps the Fed on pause for September. The CPI, the jobs report last week and ECI data all suggest that the Fed can pause,” JPMorgan’s chief global strategist, David Kelly, told the Financial Times.

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ADX	9,880	-0.3% (YTD: -3.3%)
DFM	4,064	+0.4% (YTD: +21.8%)
S&P 500	4,464	-0.1% (YTD: +6.1%)
FTSE 100	7,524	-1.2% (YTD: +1.0%)
Euro Stoxx 50	4,321	-1.4% (YTD: +13.9%)
Brent crude	USD 86.81	+0.5%
Natural gas (Nymex)	USD 2.77	+0.3%
Gold	USD 1,946.60	-0.1%
BTC	USD 29,401	+0.1% (YTD: +78.3%)

THE CLOSING BELL-

The EGX30 fell 0.3% at Thursday’s close on turnover of EGP 1.73 bn (13% below the 90-day average). Foreign investors were net sellers. The index is up 21.3% YTD.

In the green: Mopco (+1.6%), CIRA Education (+0.6%) and Elsewedy Electric (+0.5%).

In the red: Credit Agricole (-2.3%), Alexandria Container and Cargo Handling (-2.2%) and Telecom Egypt (-2.0%).

West African nations to deploy “standby force” in response to Niger coup

West African nations aren’t invading Niger — yet: The ECOWAS group of West African nations agreed to “immediately” deploy a standby force in response to the recent coup in Niger to “restore constitutional order” in the country, the bloc said following an emergency meeting in Nigeria on Thursday. The group had threatened to launch a military intervention to topple the junta that seized power earlier this month, and handed it a one-week ultimatum to restore President Barzoum’s leadership. ECOWAS has not clarified where the standby force will be deployed or how large it will be.

CALENDAR

JULY

Late July-14 August: 2Q2023 earnings season.

AUGUST

August: Hassan Allam Utilities + Agility to open Yanmu East logistics park.

16-17 August (Wednesday-Thursday): Finance Ministry to pay out the third batch of the sixth phase of the export subsidies.

16 August - 27 September: The start of the bidding process for the fifth phase of the investment map offered by the Industrial Development Authority (IDA).

22-24 August (Tuesday-Thursday): BRICS summit, Johannesburg, South Africa.

28 August (Monday): The start of Flat6Labs’ inaugural 12-week contech accelerator program.

SEPTEMBER

September: Sustainable Debt Coalition Initiative agreed at COP27 to launch.

September: IDH to open first branch in Saudi Arabia.

September: The Egypt-Germany trade and investment joint conference in Cairo.

September: JETRO’s second delegation arrives in Cairo.

1 September (Friday): Application deadline for the Smart Green Projects initiative.

3-5 September (Thursday-Saturday): Pharmaconex, Egypt International Exhibition Centre, Cairo.

9-10 September (Saturday-Sunday): G20 summit, New Delhi, India.

10-12 September (Sunday-Tuesday): The International Agricultural Exhibition for Africa and the Middle East, Sahara.

13-14 September (Wednesday-Thursday): Hydrogen Egypt Summit, Nile Ritz Carlton, Cairo.

15 September (Friday): IMF to review USD 3 bn program.

15 September (Friday): Deadline for FX bureaus to comply with new capital requirements.

17-18 September (Sunday-Monday): Arab Security Conference and Exhibition, Nile Ritz Carlton, Cairo.

17-19 September (Sunday-Tuesday): Sharm Rendezvous, Rixos Premium Seagate, Sharm ElSheikh.

18-19 September (Monday-Tuesday): Enterprise Finance Forum, St. Regis Hotel, Cairo.

19-20 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

21 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

25 September (Monday): Nasdaq deadline for Swvl Holdings Corp to increase its market value of publicly held shares to a minimum of USD 15 mn.

25-26 September (Monday-Tuesday): Egypt to host the Asian Infrastructure Investment Bank’s annual board meeting, Sharm El Sheikh.

26 September (Tuesday): Prophet Muhammad’s birthday (TBC).

28 September (Thursday): National holiday in observance of Prophet Muhammad’s birthday (TBC).

28-29 September (Thursday-Friday): Medical Tourism Conference, Sharm ElSheikh.

30 September (Saturday): The start of the new academic year for Egyptian universities.

30 September (Saturday): The start of the new academic year for Egyptian schools.

OCTOBER

October: Deadline for ins. providers to link their databases with the FRA.

October: Egyptian-Jordanian Business Council, Amman, Jordan.

2-4 October (Monday-Wednesday): Sharm Rendezvous - Ins. Market, Rixos Premium Seagate, Sharm ElSheikh.

2-5 October (Monday-Thursday): ADIPEC 2023, Abu Dhabi National Exhibition Center.

6 October (Friday): Armed Forces Day.

9 October (Monday): The Narrative PR Summit, Somabay Red Sea.

9-11 October (Monday-Wednesday): Arabs Savings and Financial Literacy Conference, Four Seasons Hotel.

13 October- 20 October (Friday-Friday): The sixth edition of El Gouna Film Festival (GFF).

Late October-14 November: 3Q2023 earnings season.

15-17 October (Sunday-Tuesday): Egypt Automotive Aftermarket Exhibition, Cairo International Convention Center.

26 October (Thursday): Daylight saving time ends.

29-31 October (Sunday-Tuesday): Egypt Energy, Egypt International Exhibition Center.

29 October - 2 November (Sunday- Thursday): Cairo Water Week.

30-31 October (Monday-Tuesday): Intelligent Cities Exhibition and Conference, Dusit Thani LakeView, Cairo.

30-31 October (Monday-Tuesday): Global Business School Network (GBSN), American University of Cairo.

31 October - 1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

NOVEMBER

2 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

15-24 November (Wednesday-Friday): Cairo International Film Festival, Cairo.

19-22 November (Sunday-Wednesday): Cairo ICT, Egypt International Exhibition Center.

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

DECEMBER

10-11 December (Sunday-Monday): eGlobe Expo, St. Regis Almasa Hotel, Cairo.

12-13 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

12-14 December (Tuesday-Thursday): Food Africa Expo, Egypt International Exhibition Center.

21 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

Summer 2023: EGX to launch a shariah-compliant index.

1H 2023: GAFI roadshow set to launch to drum up foreign investment for golden licenses

1H 2023: Abu Dhabi Islamic Bank intends to launch a digital consumer finance company

2H 2023: Egyptian government expected to sign agreements with a consultant for the EuroAfrica electricity interconnector.

2H 2023: President Abdel Fattah El Sisi and Turkish President Recep Tayyip Erdogan expected to hold a summit.

3Q 2023: E-Finance to launch in Saudi Arabia.

4Q 2023: EGX to launch its new futures exchange.

End of 2023: A Developments’ first phase of the Lazoghly development completed.

2024: Standard Chartered Bank to open a branch in Egypt.

November 2024: Egypt to host the 12th session of the World Urban Forum (WUF12).

2Q 2025: Safaga Terminal 2 to initiate operations.

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