Egypt among six countries invited to join Brics as bloc expands

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What We're Tracking Today

An election timeline is on the way

Good morning, wonderful people, and welcome to the last workweek of August. We hope you make the most out of it — the 2024 budget planning season that so many of us will kick off in a few days or weeks’ time isn’t going to be an easy one.

There’s no single BIG STORY HERE AT HOME, though we do have plenty of news, from a new head of the EGX (veteran regulator Ahmed El Sheikh), to our admission to the newly-expanded Brics, and soaring hotel prices as we gear up for the winter season.

WATCH THIS SPACE-

#1- The timeline for Election 2024 is on its way: The National Election Authority will soon hold what it is calling an “international press conference” to announce the timeline for the 2024 presidential election, including details of logistics, polling stations, voter lists, and judicial supervision, the NEA’s chairman, Walid Hamza, said yesterday, without providing a date. “The NEA will allow the largest possible number of local and foreign civil society organizations and media outlets to monitor and cover the election,” Hamza said.

#2- Cyprus just turned down Chevron’s plan for the massive Aphrodite natural gas field: Chevron’s proposal to develop the Aphrodite gas field has been rejected by Cyprus, leaving both parties 30 days to reach a new agreement. Cypriot Energy Minister Giorgos Papanastasiou, who spoke with Bloomberg, did not provide any comment regarding why the plan was rejected. Chevron plans to exploit the Aphrodite field with its partners (Shell and Israel’s NewMed Energy), including exporting much of that gas to Egypt for liquefaction.

Aphrodite is important for Egypt: Egypt and Cyprus are planning to lay a pipeline connecting the Aphrodite field to Egypt’s LNG facilities, allowing the gas to be liquefied and exported to Europe. Egypt is currently the only country with LNG facilities in the Eastern Mediterranean, putting us in pole position to fill Europe’s conventional energy supply gap as it rapidly transitions away from Russian fossil fuels.

DATA POINT- #2- Car sales haven’t been this low since the start of the millennium: Car sales are currently at their lowest levels in 25 years, head of the Car Dealers Association, Osama Abul Majd, reportedly told Al Shorouk.

Remember: Dealers sold just 6,331 vehicles in June, down two-thirds from the same month in 2022.

HAPPENING THIS WEEK-

Flat6Labs’ Makers accelerator starts tomorrow: Flat6Labs’ 12-week construction tech accelerator program begins on Monday, 28 August. The program, dubbed Makers, is designed to provide support to construction technology startups in Egypt in partnership with SIAC and Dar Al-Handasah. Selected start-ups from the program will receive up to USD 100k per venture in addition to mentorship, business training, and access to networking events.

Deadline day for the Smart Green Projects initiative: Submissions for the second phase of the Smart Green Projects initiative will be due on Friday, 1 September. The second iteration of the government-led initiative is accepting applications for projects working on addressing issues like energy, emissions reduction, sustainable agriculture and green buildings. Shortlisted projects will get the chance to present their vision during COP28. The top three contenders in six categories are also awarded prizes between EGP 250k and EGP 750k.

THE BIG STORIES ABROAD-

The US business press are still focused on Fed chair Jerome Powell’s speech at Jackson Hole at the weekend. More on that in Planet Finance below. (Bloomberg | Wall Street Journal | CNBC)

ALSO- India’s food protectionism continues with rice tax: The Indian government has imposed a 20% export tax on parboiled rice with immediate effect as the country seeks to cover local demand and tamp down on food inflation, writes A sharq Busin ess, citing a notification from the Indian Finance Ministry on Friday. The most recent protectionist measures will have knock-on effects for global prices that will need to be absorbed by buyers and result in contract renegotiations, said president of the Rice Exporters Association B V Krishna Rao.

The latest on the Women’s World Cup controversy is getting a lot of attention around the world after Fifa yesterday suspended Spain’s football association chief Luis Rubiales, a week after he provoked outrage by kissing one of the players following their victory against England in the final. This came a few hours after the Spanish football association threatened to sue the player, Jennifer Hermoso, accusing her of lying about the incident. (Associated Press | Reuters | Bloomberg | Financial Times | New York Times | Wall Street Journal)

The EU’s Big Tech crackdown is here: As of Friday, 19 major online platforms including Meta’s Facebook and Instagram as well as certain Google services must adhere to the EU’s stringent Digital Services Act, placing them under unprecedented scrutiny over harmful content, privacy, and transparency, Reuters reports. Companies that fail to comply with the sweeping legislation — which forces Big Tech to do more to combat bad behavior online and to share more data with regulators — face fines of up to 6% of their global turnover, or even a ban on operating in EU countries if they repeatedly breach the law.

CHECK OUT OUR AGENDA-

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.

This is our first two-day event,which should give us plenty of time to dive into the nitty gritty of this industry we love. Our panels will see CEOs, bankers, investors and founders gather to discuss the future and trends shaping banking, finance, fintech and NBFS.

Our full agenda will be out at month’s end. Among the topics we’ll be discussing:

Looking into the crystal ball: Top industry CEOs will join us on stage to answer tough questions on where we are as an industry, the forces that will shape all of our businesses going forward, and their views on dealflow in the year ahead.

Surviving nuclear winter: We discuss how private equity and venture capital players are tackling challenges including fundraising and deployment in an environment in which it’s awfully difficult to price your local asset in USD terms.
The robots are coming: We explore what the coming AI and big data means for the industry in our part of the world and what can bankers, NBFI, and fintech players do to capitalize on them.
What do you do when nobody wants to be a banker — and when those who are already (investment or commercial) bankers are either (a) dreaming of doing their own startup or (b) moving to Dubai (or, increasingly, Riyadh)? We go deep into the weeds with industry leaders on how they’re building talent for tomorrow.
NBFIs are a bubble. Prove me wrong: We chart the explosive rise of NBFIs and ask whether the industry is ready for a wave of consolidation. We’ll dive into whether consumer finance is starting to mature as a segment — and ask which sector is next.
What does 2024 hold in store for fintech: We dive deep into which categories are getting traction, which segments will account for the lion’s share of future growth, what business they would start today if they could, and what we can expect of the sector in the year ahead.
What’s a bank, anyway? Wherein we talk challenger and neobanks with the players looking to shake up the brick-and-mortar industry.

** NEW: MORE NETWORKING TIME- Our agenda includes expanded networking time, including an expanded coffee break and a post-event networking room for you to interact with your peers and speak one-on-one with the team at Enterprise.

STAY TUNED for more detail about our exciting agenda in the weeks to come.

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.

CIRCLE YOUR CALENDAR-

Our friends at Sodic will hold their annual charity run on Friday, 15 September at Sodic West, according to a company press release (pdf). The event will feature 3-km, 5-km and 10-km races and is organized in partnership with the TriFactory to support the Magdi Yacoub Heart Foundation. Register here.

AIIB heads to Sharm in September: The Asian Infrastructure Investment Bank(AIIB) will hold its annual meeting in Sharm El Sheikh over the 25-26 of September. The Beijing-backed institution’s gathering will bring together AIIB stakeholders, partner institutions, business leaders and members of civil society, to discuss investment and sustainable economic development. Registration can be completed here.

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

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.

Egypt among six countries invited to join Brics

Egypt is joining Brics next year: Egypt was among the six countries invited to join the bloc of emerging economies known as the Brics during the organization’s annual summit in South Africa last week. Capping three days of talks, the leaders of Brazil, Russia, India, China and South Africa a nnounc ed an agreement on a framework for expanding the bloc and said six new members would join in 2024.

Who’s in? Egypt will join Saudi Arabia, the UAE, Iran, Ethiopia, and Argentina as new members of the group. This will increase the bloc’s share of global GDP to almost 30% from 26% currently, while the inclusion of Saudi Arabia, Iran and the UAE will mean that Brics members control 43% of global oil production, up from 20% currently.

The expansion also introduces a measure of geopolitical tension into the group: Relations are still chilly between Egypt and Iran as well as Egypt and Ethiopia. Saudi and Iran are only now making up. And Argentina and Egypt are two of the IMF’s most active borrowers.

We already had a foot in the door: Egypt joined the Brics’ USD 100 bn multilateral lender, theNew Development Bank (NDB), in April, allowing Egypt to access finance from the bank for development projects.

Could Brics be (in the longer term) part of a solution to our economic woes? Joining Brics will boost FDI and exports, deepening economic cooperation and trade exchange between Egypt and other member states, Finance Minister Mohamed Maait said in a statement at the weekend. Membership could also help the country reduce its dependence on the USD for international trade, which would “help Egypt rationalize its hard currency spending on imports, relieving pressure on the budget,” Maait said, pointing to the hefty cost of USD-denominated wheat and fuel imports.

REMEMBER- The government is already in talks with three Brics countries — India, Russia, and China — to trade in local currencies, though no agreements have yet been finalized.

A thumbs up from market-watchers: “It's positive for Egypt to be included. Whilst in the near term the impact is expected to be limited, it could help strengthen its relationships with key EM economies,” ADCB’s Monica Malik told Reuters. FIM Partners’ Charles Robertson agreed, telling the newswire that “Egypt has two deep needs — FDI and a cheaper debt burden — and Brics membership can help with both.”

Brics x Africa: Prime Minister Moustafa Madbouly pointed towards the need to strengthen cooperation between Brics and Africa, he said during his participation in the summit. He said he hoped to see the bloc support the sustainable debt alliance Egypt is setting up to regulate sustainable debt transactions and lift debt burdens for emerging markets. Madbouly also called for the bloc to pursue non-USD trade with developing countries and those on the African continent.

POLITICIANS SPEAK-

Brics isn’t done expanding: The five countries suggested that more countries could be invited to join the bloc at a later date. Brazil's President Luiz Inacio Lula da Silva said his government would support Nigeria, Angola, Mozambique and the Democratic Republic of Congo joining the organization, adding that countries would be chosen based on their geopolitical importance rather than the ideology of their governments.

Xi pledges deeper Africa ties: In a meeting with African leaders at the summit, Chinese President Xi Jinping said that Beijing will launch new initiatives to promote industrialization and food self-sufficiency in Africa, according to Reuters. A top Chinese foreign ministry official said last week that African leaders want China to pivot from infrastructure financing towards developing countries’ manufacturing sectors.

El Sisi reax: “We appreciate the confidence of all Brics member states with whom we share robust relations. We look forward to cooperating and coordinating with them, and with the other countries invited to join the bloc, to achieve its goals toward strengthening economic cooperation among us and raise the voice of the Global South,” President Abdel Fattah El Sisi said following the announcement.

Hotel prices in Egypt are soaring

Hotel prices soar amid tourism spike: The prices of hotel and resort accommodation are expected to rise by at least 35% y-o-y in 2023, with a 30% increase forecast for 2024, a government official involved with the industry reportedly told Asharq Business. Egypt’s growing popularity as a tourist destination has already pushed up the rate of room prices by 45% in some destinations, according to the news outlet.

Looking ahead: Hotel room prices in coastal areas will see another increase of no less than 10% from the start of 2024, said our friend Ibrahim El Messiri, CEO of Abu Soma Tourism Development Company, the developer and operator of Somabay. Rates in Nuweiba and Taba are expected to range between USD 120-150 by the end of the year, compared to USD 70-100 in the 1H 2023, thinks head of the region’s Tourist Investors Association Sami Suleiman. Mohamed Othman, board member of the Upper Egypt Hotel Chamber, predicts that room rates in Upper Egypt will grow by at least 50% from October. “The price increase will continue if demand continues to grow,” Othman said.

REMEMBER- Egypt welcomed a record 7 mn tourists in 1H 2023, up more than 40% y-o-y. Hotel occupancy rates across the country also jumped during the first half of the year, climbing to 80% from 65% during the same period last year.

AND- This comes after a summer in which Gulf visitors helped drive up prices for North Coast rentals to never-before-seen levels.

Egypt signs contract with a subsidiary of Italy’s MSC to establish Tenth Ramadan dry port

Italian firm to buil and operate a the new Tenth of Ramadan dry port: Medlog, the cargo subsidiary of Italy’s Mediterranean Shipping Company(MSC), has inked a contract with the government to design, construct, operate, maintain, and finance the new Tenth of Ramadan dry port and logistics center, according to an Transport Ministry statement on Thursday. The project will be carried out under a 30-year public-private partnership (PPP) contract.

ICYMI- A consortium led by MSC was chosen in June from four bidders to establish and operate the 250-feddan dry port. The dry port aims to serve the industrial area in Badr, Ain Sokhna, East Port Said, the New Capital, and the Tenth of Ramadan.

AND- Ocean Express is onboard for the Borg El Arab dry port: Egyptian company Ocean Express Shipping signed an MoU with the General Authority for Land and Dry Ports to study, establish, manage and operate the planned dry port at Borg El Arab, according to the same ministry statement. A first EGP 780 mn phase of the project is set to be completed within 12 months, with the entire dry port planned to be up and running within two years, the statement reads. The port will process some 4.2 mn tons of goods every year.

What happened to the tender? Last we heard, a consortium led by Alpha Capital was reported to be among bidders looking to compete for the Borg El Arab dry port project in a tender that was slated for last October.

Egypt’s Financial Regulatory Authority hands down new rules on valuation to help startups access capital

The Financial Regulatory Authority (FRA) has issued new rules for valuating startups in what it says is a bid to help them secure financing, it said in a statement (pdf). The regulations will require independent financial advisors registered with the FRA to adhere to new methods for valuing startups at different stages, including for initial public offerings (IPOs) and investor exits, Enterprise understands.

What’s new? The FRA has introduced new venture capital valuation methods that factor in a number of variables to determine a startup’s value in the pre-revenue stage, according to the statement. These include the company’s value at the investor’s planned time of exit, the expected return on investment (ROI), and the projected exit value. The statement outlines methods for calculating some of these variables. The valuation rules also include sectoral considerations and draw on SWOT analysis — an assessment of a company’s strengths, weaknesses, opportunities, and threats — among other factors.

Startups are a different animal: Before the FRA’s decision, local standards for valuation only regulated the way “traditional companies” already in operation are valued, our source told us. New rules were needed for startups because they operate under a different model. While well-established firms have financial statements and historical data that can be used in company valuations, new startups mostly draw on forecasts. Startups also typically have higher expenses, lower revenues, and the potential for exponential growth, our source added.

The venture capital industry has created a range of loosely-but-broadly applied standards for valuing startups. Read more at the Corporate Finance Institute or Investopedia.

Elsewedy Electric net income more than doubles in 2Q 2023

Elsewedy Electric’s net income after minority interest more than doubled y-o -y to EGP 2.7 bn in 2Q 2023, according to its earnings release ( pdf ). Its top line rose 78% y-o-y to EGP 36.3 bn as the company “capitalized on higher exports and sales outside Egypt … and continued to penetrate regional markets,” said CEO Ahmed El Sewedy. In the first half of 2023, the company’s net income nearly tripled to EGP 5.6 bn, while revenues climbed 79% to EGP 69.6 bn.

Revenues from the company’s wires and cables segment more than doubled to EGP 20.0 bn in 2Q, accounting for 55% of the company’s revenues during the quarter. Revenues from turnkey projects came in at EGP 11.8 bn, up 37% y-o-y and accounting for 33% of revenues.

What they said: “Our dynamic business model has once again proven its ability to overcome challenges in the local and global economy, closing the first half of 2023 with a solid performance. Building on our highly diverse portfolio and expansive geographic footprint, as well as operational efficiency, has enabled us to cement Elsewedy Electric’s position across our core markets,” Elsewedy said.

Egypt PM appoints Ahmed El Sheikh is the new head of the EGX

Ahmed Abdelrahman El Sheikh (LinkedIn) has been named head of the Egyptian Exchange (EGX) for a one-year term starting 26 August, a cabinet statement said on Thursday. El Sheikh succeeds Ramy El Dokany, who had been named to a one-year term in August 2022.

About El Sheikh: El Sheikh is an EGX veteran, having first joined the bourse 30 years ago in 1993, according to the EGX website. He has been serving as its vice chairman since 2018 and sits on the boards of several bourse-affiliated entities, including EGID and the Egyptian Investor Protection Fund. El Sheikh was also at the Financial Regulatory Authority (FRA) for six years from 2005-2011 and briefly worked at Misr for Central Clearing, Depository, and Registry (MCDR) in the ‘90s. He holds an MBA from the Arab Academy for Management, Banking and Financial Sciences and an BSc in accounting from Ain Shams University.

The head of the EGX is appointed by the prime minister. The news received wide coverage in the domestic press: Al Mal | Al Borsa | Asharq Business.

A number of key economic appointments have since last year been for only one 12-month term, including head of Financial Regulatory Authority (where Mohamed Farid was just reappointed) and of the Central Bank of Egypt (where Hassan Abdalla’s tenure as acting governor was recently extended for another 12 months).

A new public prosecutor: Mohamed Shawky Ayad, the president of the Alexandria Court of Appeal, is set to replace Hamada El Sawy as the public prosecutor on 19 September, Ittihadiya said Thursday. El Sawy has held the position since September 2019.

Egypt’s talk shows focus on Brics summit + upcoming presidential election

Last night on the airwaves: The latest from Brics, the 2024 presidential election and more covid-19 coverage.

We’re joining Brics: Egypt’s invitation to join the Brics bloc along with five other countries on Thursday, dominated coverage last night.

Expectations are perhaps a bit too high in some quarters: Egypt’s acceptance into the group is expected to significantly reduce demand for the USD in the local market, as the alliance looks to use local currencies in intra-country trade, the head of the Trade Ministry’s Commercial Representation Sector, Yahya Al Wathiq Billah, told Ahmed Mousa on Ala Masouleety (watch, runtime: 13:31). Al Wathiq Billah urged the Central Bank of Egypt to develop an appropriate plan that benefits from Egypt’s membership of the alliance.

Joining the alliance will also provide new financing opportunities for Egypt, and enhance cross-trade with other Brics countries, thereby attracting more foreign investments, Assistant Supply Minister Ibrahim Ashmawy told Ala Masouleety (watch, runtime: 3:38). Egypt’s position as a key commercial gateway boosted its acceptance to the group, Ashmawy added, plus it is the largest market in the Arab world (watch, runtime: 3:49). Ashmawy is also head of both the EMX mercantile exchange and the Internal Trade Development Authority (ITDA). We have the full story in this morning’s news well, above.

Also giving the summit coverage: Masaa DMC (watch, runtime: 3:55), Ala Masouleety (watch, runtime: 5:55), Al Hayah Al Youm (watch, runtime: 18:59) all dedicated airtime to the summit.

Election 2024: Several parties have announced their support for President Abdel Fattah El Sisi’s expected bid to secure a third term in office, with pro-government party Mostaqbal Watan and the Free Egyptians Party leading the way. Ala Masouleety’s Ahmed Moussa discussed the reasons behind the two parties’ support for the president’s candidacy with Mostaqbal Watan Rep. Ashraf Rashad and Essam Khalil, head of the Free Egyptians Party, (watch, runtime: 2:00 | watch, runtime: 10:05). Meanwhile, Masaa DMC covered the Free Egyptians Party’s new pro-El Sisi campaign for the upcoming election (watch, runtime: 5:33).

Also on the airwaves last night:

Covid-19: Al Hayah Al Youm and Masaa DMC continued the covid chatter discussing the first two cases of the Eris variant recorded in Egypt (watch, runtime: 15:16 | 7:10).
US-Egypt military drills: Ala Masouleety gave coverage to the Bright Star 2023 joint military exercises, which the US and Egypt will lead starting from 31 August. More than 8k soldiers from 34 countries will participate in the activities, which will continue until 14 September, a military spokesman for the Egyptian Armed Forces said (watch, runtime: 2:44).

Egypt in the news: Infrastructure drive + Hisham Kassem arrest

No single story is driving the narrative on Egypt in the international press this morning. The New York Times is out with a piece looking at the destruction of historic tombs and green spaces in Cairo, while the Washington Post becomes the latest international newspaper to pick up on last week’s arrest of intellectual and storied publisher Hisham Kassem.

Meanwhile: CNN reports that local campaigners are fighting the stigma of HPV to help boost vaccination and protect women against cervical cancer.

And: Karm Architecture Lab ’s Breathing House avoids Marsa Alam’s extreme desert climate through passive design strategies and natural materials coral limestone and bamboo, writes DesignBoom.

The Egyptian Securities Federation is finally a thing. PLUS: Direct wheat talks fall through, Air Cairo expansion, Madbouly in South Africa, Fawry and Neptune Energy

CAPITAL MARKETS-

The Egyptian Securities Federation has landed: The Financial Regulatory Authority (FRA) has completed procedures to establish the first Egyptian Securities Federation, almost five years after the original decree establishing the federation was issued, it said in a statemen t on Thursday.

What it does: The federation’s remit is to improve standards and promote accountability in the sector. It functions as a union of non-banking financial services that have acknowledged the FRA as their central governing authority.

A new board was the first order of business: The federation on Wednesday elected former investment minister Ashraf Salman as its chairman and Ahmed Ikram Mostafa as its vice chairman. It also appointed 13 members to its board.

COMMODITIES-

Direct wheat talks come to nought: State grains buyer GASC reportedly made no purchase after direct talks to buy wheat with international trading houses on Friday, traders told Reuters. The lowest bid was reportedly submitted by Buildcom, which offered to sell 50k tons of Bulgarian wheat at USD 263.77 per metric ton on a free-on-board (FOB) basis.

Remember: GASC last week bought 60k metric tons of Romanian wheat at USD 270.25 FOB in an international tender funded by the International Islamic Trade Finance Corporation (ITFC). The shipment is scheduled for delivery between 5-20 October.

ENERGY-

Neptune kicks off Egyptian drilling operations: Independent oil and gas company Neptune Energy has started exploratory drilling at the Yakoot well in its North West El Amal offshore concession in the Gulf of Suez, it said Wednesday. It is the first well Neptune will drill in Egypt and falls under a USD 35 mn oil and gas exploration agreement the company signed with Egypt in 2020 to drill three exploration wells in the concession.

Who’s Neptune? The UK-headquartered company focuses on the North Sea, North Africa and Asia-Pacific. The company will shed its “independent” moniker once its acquisition by Italy’s Eni goes through: The Italian major said in June it is buying Neptune from its private equity backers in a USD 4.9 bn transaction that the Financial Times characterized as “the largest cash [transaction] in the European oil and gas sector for almost a decade.”

STARTUPS-

Endeavor Egypt has launched its XceleRise green accelerator in partnership with the German development agency GIZ, a press release said. The 15-month program will provide entrepreneurs with “industry knowledge, market insights and invaluable connections necessary to successfully scale their operations internationally and raise capital,” the statement reads. The accelerator is targeting sustainable startups in green buildings, waste management, renewable energy, sustainable transport, and agriculture and water management.

Who’s eligible? Startups looking to apply to the program must operate within the green and green-tech sector, generate a minimum annual revenue of USD 250k, have at least 10 employees, and be actively seeking international expansion opportunities within the MEA region and to raise capital. Applications can be made through Endeavor’s website.

FINTECH-

Fawry can now be used to book some train tickets: Passengers traveling between Lower Egypt and Upper Egypt will now be able to book third-class tickets via 320k Fawry e-payment system outlets, a statement from the Transport Ministry said. This comes a few days after the ministry launched a mobile app — ENR Tickets — that allows passengers to book tickets online.

AUTOMOTIVE-

Madbouly meets South Africa automotive bosses: Prime Minister Moustafa Madbouly held talks with business leaders in South Africa’s automotive industry and the Africa heads of global car manufacturers on the sidelines of the Brics summit in Johannesburg last week, according to a cabinet statement. He called for members of the African Automobile Manufacturers Association to provide the Egyptian government with a “roadmap that includes the required incentives to start establishing factories in Egypt, and a specific time plan for the implementation stages,” the statement said.

The South African model: Madbouly suggested that Egypt could look to replicate South Africa’s development model for the sector. The South African automotive sector has grown in recent decades to constitute almost 5% of GDP and contribute more than 12% of the country’s exports.

TRANSPORT-

Air Cairo adds new routes to the Gulf, West Africa: Low-cost air carrier Air Cairo will begin operating weekly flights to Sharjah, Ougadougou, Dakar and Tangier this year, Commercial Director Salah Kadri reportedly told Al Shorouk. Four flights a week will begin landing in Sharjah starting 1 November as will twice weekly flights to Tangier, while two weekly flights will take off for Ougadougo and Dakar as of the beginning of December. New routes to Germany, Italy, Saudi Arabia, Kuwait and Jordan could be on the cards for summer 2024, Kadri added

Air Cairo ALSO ON OUR RADAR automotive capital markets commodities Egypt-South Africa relations Egyptian Securities Federation Endeavor Egypt energy Fawry Financial Regulatory Authority Fintech food GASC GiZ Neptune Energy non-banking financial services oil and gas railways startups Transport Ministry wheat

11

PLANET FINANCE

Inflation still too high + more rate hikes could be needed -Fed chair

Powell’s Jackson Hole speech spurs uncertainty: US Federal Reserve Chairman Jerome Powell hinted that the Fed could be forced to continue its aggressive monetary tightening cycle, citing persistent inflation as the US economy continues to register strong growth. “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” Powell said in a much-anticipated speech on Friday at the central bank’s annual get-together in Jackson Hole, Wyoming (watch, runtime: 15:40). “Although inflation has moved down from its peak — a welcome development — it remains too high,” he added.

Many investors were expecting the Fed to go a different direction after July inflation came in slightly below analyst expectations, inching higher to 3.2% y-o-y from 3.0% a month earlier and suggesting the Fed would have room to press pause on rate hikes at its next meeting in September. “When it comes to another rate hike, the chair still very much has his finger on the trigger, even if it’s a bit less itchy than it was last year,” one economist told the Associated Press.

Can Instacart’s IPO revive US listings? Grocery delivery company Instacart has filed the paperwork to IPO on the Nasdaq, it said in a statement. If successful, the listing could help jumpstart a stagnant US IPO market that hasn’t seen any major VC-backed tech debuts since December 2021, CNBC writes. Instacart is yet to determine how many shares it will offer and at what price. Goldman Sachs and J.P. Morgan are acting as lead bookrunners.

ALSO WORTH NOTING-

Softbank’s Son on a spending spree: Arm Holdings’ anticipated Nasdaq IPO could almost double Softbank CEO Masayoshi Son’s cash pile, handing him a warchest of up to USD 65 bn for fresh acquisitions. (Financial Times)
Turkish central bank goes big: Turkey’s central bank opted for an unexpectedly large interest rate hike on Thursday, lifting its benchmark rates by 750 bps to 25%. The move sparked a rare TRY rally. (Reuters)
UN looking into Aramco operations: The UN is investigating Saudi Aramco for possible human rights violations linked to fossil-fuel induced climate change. The probe follows a request by environmental NGO ClientEarth to investigate the oil giant because it’s the largest corporate CO2 emitter in the world. (Bloomberg)

EGX30	18,208	+0.4% (YTD: +24.7%)
USD (CBE)	Buy 30.83	Sell 30.96
USD at CIB	Buy 30.85	Sell 30.95
Interest rates CBE	19.25% deposit	20.25% lending
Tadawul	11,405	+0.3% (YTD: +8.9%)
ADX	9,765	-0.1% (YTD: -4.4%)
DFM	4,099	-0.2% (YTD: +22.9%)
S&P 500	4,406	+0.7% (YTD: +14.8%)
FTSE 100	7,338	+0.1% (YTD: -1.5%)
Euro Stoxx 50	4,236	+0.1% (YTD: +11.7%)
Brent crude	USD 84.48	+1.3%
Natural gas (Nymex)	USD 2.54	+0.8%
Gold	USD 1,939.90	-0.4%
BTC	USD 26,019	-0.1% (YTD: +57.4%)

THE CLOSING BELL-

The EGX30 rose 0.4% at Thursday’s close on turnover of EGP 2.1 bn (2.6% above the 90-day average). Regional investors were net buyers. The index is up 24.7% YTD.

In the green: Ezz Steel (+7.4%), Elsewedy Electric (+4.9%) and Abu Qir fertilizers (+2.6%).

In the red: Beltone Financial Holding (-2.4%), Eastern Company (-2.2%) and Heliopolis Housing (-1.8%).

Niger to expel French ambassador; junta puts military on high alert amid Ecowas military threats

French ambassador expelled from Niger: Niger’s junta has expelled the French ambassador after refusing to respond to a summons, writes Bloomberg, citing a statement from the Nigerien foreign ministry. French ambassador Sylvain Itte — who was accredited by the foreign ministry under deposed President Mohamed Bazoum — rejected the order to leave within 48 hours, saying that the junta does not hold the authority to demand he leave the country. The military leadership had said that it was also expelling the US, German and Nigerian ambassadors, before a spokesperson retracted the orders.

Junta and Ecowas prepare for violence: Niger’s leadership has put its armed forces on highest alert, after an internal document issued by its defense chief said that “threats of aggression to the national territory are increasingly being felt,” reports Reuters. Ecowas has threatened military action to overturn the July 26 coup and restore constitutional order if diplomatic dialogues fail. Alieu Touray clarified on Friday that the group is "determined to bend backwards to accommodate diplomatic efforts,” although an intervention remains an option.

Also worth knowing this morning:

Saudi considering other offers to build nuclear capability: Companies from China, France and Russia are reportedly bidding to establish a nuclear plant in Saudi Arabia, giving Riyadh leverage over the US, which has so far refused to agree to allow the kingdom to enrich uranium without restrictions. (Financial Times)
China’s taking no chances with three-eyed fish: China has suspended imports of all Japanese seafood, effective immediately, in response to Japan’s decision on Thursday to release treated radioactive water from the Fukushima nuclear plant into the Pacific Ocean. (Xinhua)

CALENDAR

AUGUST

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

SEPTEMBER

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

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 (Sunday-Tuesday): Pharmaconex, Egypt International Exhibition Centre, Cairo.

4-6 (Monday-Wednesday): Africa Climate Summit, Nairobi, Kenya.

7-8 (Thursday-Friday): Regional Forum for Sustainability & Development, 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.

13 September (Wednesday): Deadline for settling outstanding military service in FX.

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.

20-23 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

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).

27 September (Wednesday): Deadline for bidding in the fifth phase of the investment map offered by the Industrial Development Authority (IDA).

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.

1-3 October (Sunday-Tuesday) International Expotec for water economics management, Egypt International Exhibition Center, Fifth Settlement, Cairo.

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.

10-12 October ( Tuesday-Thursday) Ceramica Expo, Cairo International Convention Center.

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.

End of 2024: The launch of the high-speed train line linking Ain Sokhna with Al Alamein City.

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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