Good afternoon, friends. We have yet another busy week in the making. Topping the headlines is the announcement of a new financing initiative hitting the industrial block, as is the perpetual Trump Tariff cycle, with semiconductor taxes squashing the temporary reprieve felt by smartphone and computer manufacturers.

THE BIG STORY TODAY

Gov’t kicks off EGP 30 bn financing initiative for industrial players: The Industry Ministry has launched the first phase of a new EGP 30 bn financing initiative offering reduced 15% interest rates to seven priority industrial sectors, according to a ministry statement. Phase one will target private sector manufacturers in the pharma, food, engineering, chemicals, textiles, mining, and building materials industries.

ICYMI- The government last year suspended a EGP 120 bn program for industrial and agricultural players that it had approved in March after the initiative ran into difficulties and benefitted only a few industrial players. The state also launched a EGP 50 bn program offering subsidized loans at a 12% interest rate to tourism players in October.

The details: The initiative — which covers machinery, equipment, and production lines — will offer an additional 2% cut for projects that boost local added value or introduce new industrial activities that could replace imports.

How to apply: Manufacturers interested in the funding can submit their applications to the Industrial Development Authority’s head office in Cairo’s Fifth Settlement or branches in other governorates. Complete applications will be processed within two weeks of submission.

What are the requirements? To qualify for the funds, applicants must provide documentary proof of construction, building permits, readiness to install equipment, financing needs, production line specifications, and tax invoices or letters of credit for machinery purchases.

The EGP rose against the greenback at the beginning of trading today, as foreign investors continue their return into our local debt market. The exchange rate against the USD traded at an average of EGP 50.99 this morning, with the buying rate in some banks slipping below the EGP 51 mark for the first time since last week’s trading.

Interbank trading is expected to exceed USD 1 bn today, amid strong indicators of foreign investment inflows, a banking source told EnterpriseAM, adding that concerns over a potential interest rate cut in the upcoming Monetary Policy Committee (MPC) meeting could be a driver for these inflows, as investors look to lock in the highest possible yields before a potential cut.

The MPC’s cutting cycle is largely expected to begin this week: Almost all analysts surveyed by EnterpriseAM earlier this week expect the Central Bank of Egypt (CBE) to cut interest rates when the MPC meets on Thursday. Most of the analysts we spoke to predict the MPC will cut rates by at least 200 bps, while others gave a more conservative estimate of a 100 bps cut as the CBE continues to monitor inflationary pressures.

THE BIG STORY ABROAD

Trump tariffs to hit semiconductors soon: US President Donald Trump is set to announcenew tariffs on imported semiconductors within the coming week, days after he had pledged to exclude smartphones and computers from his wave of tariffs. “We wanted to uncomplicate it from a lot of other companies, because we want to make our chips and semiconductors and other things in our country,” Trump told reporters. While he declined to say whether exemptions would still apply to consumer electronics, he noted that “You have to show a certain flexibility. Nobody should be so rigid.”

ICYMI- Trump dealt another blow to Big Tech after giving them a brief respite for a day by exempting consumer electronics from his new tariff regime. He later signaled that smartphones, chips, and other consumer electronics will be subject to separate levies following a national security probe into the sector.

Meanwhile, European stock saw broad gains this morning after investors reacted positively to Trump’s exemption of tariffs for certain tech products, CNBC reports. The pan-European Stoxx 600 index climbed significantly by 2.2%, with technology stocks leading the rally as the primary drivers of the upward momentum.

☀️ TOMORROW’S WEATHER- We’re expecting a cloudier day tomorrow while temperatures remain stable, with the mercury landing at a mild 25°C throughout the day before cooling to 15°C at night, according to our favorite weather app.