Good afternoon, ladies and gentlemen. We’re starting off a new week that promises to be busy and bring us a very full pipeline of news, which most of us were anticipating after an eventful weekend.
THE BIG STORY TODAY
EGX falls 5%: The EGX30 fell 5.0% at the close of trading today, according to market data, after news of Abu Dhabi wealth fund ADQ’s planned USD 35 bn investment in Egypt for development rights to Ras El Hekma on the North Coast over the weekend.
REMEMBER- The EGP strengthened in the parallel and derivatives markets following the investment announcement, with the FX rate cooling to somewhere between EGP 49.50 and EGP 52.00 against the greenback, while the official rate remained unchanged. The EGP also strengthened in the market for twelve-month non-deliverable forwards, with traders putting the USD-EGP rate at the high 50s, down from a January peak of 66.7.
THE BIG STORY ABROAD
The Donald continues to dominate the Republican primaries and international headlines.Most recently, the former POTUS defeated Nikki Haley in her home state of South Carolina, with 60% to her 39%, only further solidifying his run for president. Haley still vows to stay in the running until at least the Super Tuesday primaries despite her losses, arguing that many Republicans are wary of Trump serving another term, but her performance has many questioning how long she can stay in the race. (Financial Times | Associated Press | Washington Post | Reuters | New York Times)
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The Madbouly government has inked a USD 35 bn agreement with ADQ, giving the Abu Dhabi wealth fund and longtime investor in Egypt the development rights to Ras El Hekma on the North Coast.
News of the ADQ’s USD 35 bn investment in Egypt saw the EGP strengthen immediately in the parallel and derivatives markets. It remains unchanged at 30.95 to the USD in the official market ahead of banks opening today, with speculation now that we could see a “modest” devaluation as early as this Thursday.
*** It’s Inside Industry day —your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.
In today’s issue: The high interest environment has been challenging for businesses, particularly manufacturers and industry players, as financing for capital expenditure is prohibitively expensive.
?️ TOMORROW’S WEATHER- Expect a warmer and sunnier day tomorrow that will bring us a high of 25°C in the daytime and a low of 12ºC at night, according to our favorite weather app.
New tech wizardry: OpenAI launched Sora, a new AI tool that transforms voice commands into uncannily realistic movie clips last week, catching the tech and media industries slightly off guard, Axios reports. Although similar technologies are out there — including ImagenVideo, Phenaki, and Lumiere, among others — OpenAI’s iteration cranks things up a notch by using a few sentences from a user and the software magically creates a convincing hyperrealistic, Hollywood-quality minute-long video clip (runtime: 10:23).
How does Sora do it? According to OpenAI, they’re teaching the model to comprehend and simulate the dynamic physical world, teaching it the ABCs of motion (as a growing infant would be experiencing it), movement, gravity, time, cause, and effect. As a result, it will learn how things maneuver, walk, and fall to execute human and objects’ complex movements. This coincides with OpenAI’s objective of training the tech about the real world.
Just as with most AI breakthroughs, there are some concerns, including how Sora will generate its content. Industry watchers have flagged risks of the technology stealing ideas or spreading wrong information, which is why OpenAI has opened Sora to only creatives in the field in a trial and error phase to develop the correct understanding on how to generate visuals. Its website indicates that they are working with “red teamers”: A team brought together for their expertise to battle “misinformation, hateful content, and bias” through their experimentation with the software.
What about the movie industry? Sora could have the potential to upend how the movie industry approaches special effects, offering significant shortcuts, and potentially reshaping the very foundation of Tinseltown. It also questions the value of our spark of artistic creation, the role of human performers and storytellers on screen, and what audiences will want to see down the line, Axios says.
Reactions are split: While some, like AI creator and ex-Googler Bilawal Sidhu, think the new tech is the cat’s whiskers, others, such as filmmaker Justine Bateman, view the software as “AI garbage” that relies on stolen work.
Women may be able to reap greater benefits with less exercise compared to men, suggests a recent study on adults in the US. Men who dedicated around five hours weekly to moderate to vigorous exercise cut their mortality rate by 18% in comparison to their sofa-glued counterparts. Meanwhile, women achieved the same health benefits with just 2.5 hours of comparable exercise per week, the study showed.
There are some limitations to this study. The data on physical activity from the 400k US adult participants was self-reported, and the data was observational without taking into account other lifestyle aspects such as smoking and eating habits, among others. Presently, it isn’t clear why women seem to have a leg up, but the main message is the importance of regular exercise to reduce cardiovascular mortality, CNBC quotes a cardiologist as saying.
Suncoast, a story inspired by the director’s childhood turmoil: Laura Chinn’s directorial debut drew inspiration from her own experiences, mirroring Chinn’s emotional journey as her brother battled cancer and was unexpectedly relocated to Suncoast, a nursing facility infamous for its association with Terri Schiavo’s case.
The film, set in 2005, revolves around Doris (Nico Parker), torn between the responsibilities of caring for her terminally ill brother and the desire for a normal teenage life. Living modestly with her distraught mother, Kristine (Laura Linney), Doris grapples with the burden of her brother’s condition, which prompts his relocation to Suncoast.
As Kristine becomes increasingly consumed by her son’s care, Doris finds solace in an unexpected friendship with Paul Warren (Woody Harrelson), a grieving protestor outside the facility.
Meanwhile, Doris navigates the complexities of adolescence, hosting parties and even experiencing first love with Nate (Amarr). However, her attempts to find independence are shattered when Kristine unexpectedly returns home, leading to a confrontation that alters Doris’s life course.
While anchored in real-life events, Chinn’s narrative takes artistic liberties, crafting a fictionalized account that centers on Doris who embodies Chinn’s emotional turmoil amidst the backdrop of grief and uncertainty — which is why some news outlets were not impressed per se, but they collectively agreed that even when it had “ no chance of basking in the theatrical sunshine, but deserves to be seen.”
WHERE TO WATCH- You can watch the semi-autobiography on Disney+.
Related
⚽ The CAF Confederation Cup is underway, with Zamalek meeting the Libyan Abu Salem team on the pitch today at 6pm in the fifth round of the group stages. Zamalek currently sits at the top of the group with 10 points, and while it is the favorite to qualify for the next round, the Libyan team is close behind in second place, only needing one point to close the gap.
The Carabao Cup is coming to a close today at Wembley Stadium, with Liverpool and Chelsea battling it out for the crown this evening at 5pm.
It’s not déjà vu — the Reds and the Blues were in the same situation back in 2022 when Liverpool earned the title at the Blues’ expense. Having nine titles under their belt, the Reds currently stand as the club most familiar with the English League Cup’s first place, while Chelsea aim to secure their sixth.
Wolverhampton and Sheffield United are currently on the pitch.The 26th round of the English Premier League kicked off yesterday, and will see The Wolves and The Blades on the pitch at 3:30pm.
En España: Real Madrid is going head to head with Sevilla to mark matchday 26 of La Liga at 10pm. The Merengue stand at the top of the league with 62 points, followed by Barcelona at 57 points, and Girona at 55 points. Keep in mind that Barcelona is one match ahead, meaning that Girona may be able to overtake them once the playoffs even out.
Here are the most important European League matches we’ll be keeping an eye out for tonight:
Cagliari vs Napoli (Serie A, 4pm)
Lecce vs Inter Milan (Serie A, 7pm)
Milan vs Atalanta (Serie A, 9:45pm)
Dortmund vs Hoffenheim (Bundesliga, 6:30pm)
PSG vs Rennes (Ligue 1, 6:05pm)
Today in the Egyptian Premier League:
Pharco vs El Gaish (4pm)
Al Ittihad vs National Bank (7pm)
Related
? OUT AND ABOUT- (all times CLT)
ARTS-
Catch a glimpse of Egyptian cinema through Mohamed Bakr’s lens at Photopia in FiftyYears of Cinematic Portraits. This exhibition opens tomorrow and continues until Saturday, 9 March (except for Sunday) you’ll get to see a selection of portraits taken from his extensive collection of over 2000 artistic works captured since 1956. The exhibition showcases around 100 images from 80 films, covering various genres including literature, cinema, performance, comedy, and realism.
Bibliothek Art Gallery is hosting an artist talk featuring Amani Mousa, Eman Hussin, and Yasmine Shawn, moderated by Ismail Fayed, to discuss their Lines of Intimacy Exhibition which continues until on Saturday, 2 March. You can find the catalog here.
MUSIC-
ROOM New Cairo is hosting Hardcase and Divine, two bands hot on the Egyptian rock scene. Hardcase will perform covers from legendary artists such as Beth Hart to Guns & Roses. Divine will be providing tunes by Black Sabbath and Dio. Doors open at 8:30pm this Tuesday, February 27. You can snag your tickets for EGP 200, but they don’t include the required minimum order per person.
Get ready to be mesmerized as Aziz Maraka takes the Cairo Jazz Club 610 stage this Wednesday, 28 February. Get your tickets today to book your seat to hear him sing in an unforgettable performance from CJC 610’s Facebook page.
Ali El Haggar is also taking the stage at ElsawyCulturewheel this Wednesday, 28 February. The performance will begin at 8pm at the Zamalek venue. Keep in mind that photos and video recordings are not allowed, as are children under six years of age. Tickets are sold out.
ENTERTAINMENT-
Like comedy and want to get in on the fun? Presented by Al Mothalas, El Khatba is an interactive comedy experience at Rawabet Art Space this Friday, 1 March at 8pm.
SPORTS-
The Cairo Half Marathon is this weekend.Start stretching now as Cairo Runners is bringing back a fan favorite, offering 5km, 10km, and 21km runs as well as a Family Run. Tickets are still available, register now.
The TriFactory’s Tough Mudder Egypt is also on this Friday, 1 March. The obstacle course challenge will take place at Belle Vie Club in New Zayed. Today is your last chance to register for the event, click here for registration.
FILM-
Gaza Mon Amour will be screened at Qahrawya this Thursday, 29 February from 8pm till 11pm. Find out how to get your tickets here, but before you do, keep in mind that the Qahrawya studio is home to a few friendly cats. Tickets can be purchased at the door, but seating is limited, so don’t take any chances.
EVENTS-.
Bibliothek Egypt is hosting yet another book signing for Reem Basyuni’s two latest works, Mario Abu al-Abbas and In Search of Happiness, this Friday, 1 March at 6:30pm. Along with the book signing will be a seminar titled Architecture and Impact.
Fancy yourself a detective? Murder-mystery fans can pull out their magnifying glasses to crack this case. Cluedupp and Crime Scene Investigator are staging a hard-boiled outdoor event on Saturday, 2 March where you have to solve four murders around the city by solving puzzles, interrogating witnesses, and hunting for clues. Find more details here.
For all the mothers who need a break — or a bit of fun — Rahet Bally is collaborating withEl Malahy to give mums a day of fun with their children on Saturday, 2 March. All you have to do is download the Rahet Bally app, sign up for free entry for you and your kids, and buy your playing credit — at a discounted price — for you to play all day alongside endless competitions and prizes.
Dust off your tote bags: The Cairo Flea Market is back at the Zamalek Fish Garden on Saturday, 2 March. You’ll have a day of second-hand shopping where you can browse the products of over 250 local vendors selling handmade products, antiques, secondhand items, and more. It only happens once a month so be sure not to miss it. The market runs from 11am to 7pm but we’d recommend getting there early to avoid the crowds.
Statistics are thrown around pretty casually these days — and with the internet, it’s easy for an impressive number to gain traction, but can we count on them as fact? More or Less: Behind the Stats by BBC aims to answer that question. Each episode takes on one of these clickbait-worthy numbers, with alternating hosts unpacking the validity behind them.
Since 2020, the five richest men in the world have seen their fortunes more than double, while almost five bn people have seen their wealth fall, says Oxfam, but how true is that statement? Host Tim Harford goes into a discussion of the relationship between the wealthy and global financial markets.
Is wealth discourse not your thing? You could find an episode that better suits your preferences. From proving the existence of aliens using the Drake Equation to how much of the English language is actually French, they cover all the bases and you’ll be smarter for it.
It’s educational in a fun way. You won’t feel like you’re being lectured but it will hit the same spot a fun fact does. It makes almost any topic accessible to an average listener which is why we enjoy it.
The EGX30 plummeted by 5.0% at today’s close on turnover of EGP 9.2 bn (127.1% above the 90-day average). Local investors were net buyers. The index is up 11.8% YTD.
In the green: Orascom Construction (+20.0%), Talaat Moustafa Group (+20.0%) and Edita (+20.0%).
In the red: Alexandria Containers and Cargo Handling (-20.0%), Abu Qir Fertilizers (-19.9%) and Sidi Kerir Petrochemicals (-19.5%).
How are industry players managing their financing needs amid a persistently high interest rate environment? Over the past two years, the Central Bank of Egypt (CBE) has consistently been raising interest rates in a bid to tamp down inflation that shot up following the EGP devaluation of March 2022. Since then, many businesses — particularly manufacturers and other industry players — have been holding off on investments as high interest rates on financing made debt prohibitively expensive. Industry sources Enterprise spoke with also pointed to a dearth of financing initiatives to help the private sector to secure financing for fresh investments, which is standing in the way of growth.
Don’t take it from us: The interest rate environment is a significant concern for all of you:In our 2022 Fall Reader Survey, nearly half of readers said that high interest rates were holding back decisions to deploy capex spending. At the time — when the overnight deposit rate stood at 11.25% — one-third of you (36%) said you need to see interest rates go down to somewhere between 8.25-10.25%, while 12% of you wanted to see rates go down even lower to allow for new investments.
A look at current demand for bank financing: Total bank loans for private sector players (in both local and foreign currency) came in at EGP 1.757 tn at the end of October 2023, compared to EGP 1.482 tn at the end of December 2022, according to recent figures from the CBE. EGP-denominated loans accounted for the lion’s share of the figure (EGP 1.376 tn at the end of October 2023, compared to EGP 1.182 tn at the end of December 2022). Foreign currency-denominated loans saw a smaller increase over the nine-month period, rising to EGP 381 bn from EGP 300 bn.
How do banks calculate the price of business lending? Lending rates to the private sector and companies vary between banks depending on the sector and nature of the project, but are set higher than the CBE’s corridor rate, a banking source explained to Enterprise.
Industry has been struggling with a lack of subsidized lending: In 2022, the CBE moved toscrap a program that granted industry, agriculture, and construction players subsidized loans at a preferential rate of 8%. A few months later, the government decided to roll out a fresh subsidized loan program set at an 11% interest rate. Manufacturers were concerned at the time that the jump in interest rates would be untenable for them and force some factories to slash production or hike consumer prices.
Manufacturers really need financing support from the government as interest rates remain too high to afford to take on debt, Egyptian Businessmen’s Association member Ahmed El Zayat told Enterprise. For businesses with more than EGP 50 mn in revenue, interest rates on loans range anywhere between 22-25%, which is a major obstacle for these companies to take on debt to develop their businesses, El Zayat said. For manufacturers to be able to afford debt at these rates, they would be forced to raise the prices of their products so steeply that they would no longer be competitive, he said. El Zayat suggested that policymakers should create a fresh subsidized loan initiative for manufacturers and real estate players, considering these two sectors contribute some 35% of the country’s GDP.
The 11% loan program exists — it’s just not the best fit: Several sources Enterprise spoke with pointed to the difficulty of the program’s eligibility requirements. While some businesses are able to benefit from the program, the vast majority struggle to meet all of the program’s multiple conditions and requirements, reinforcing the business community’s desire for a fresh initiative with more flexible conditions, El Zayat said.
As costs run high, the whirring of machinery continues to grow quieter: Manufacturers who are forced to take on debt at high interest rates will inevitably be force to either hike prices or cut down on productivity, which has knock-on effects on other players and corners of the industry, said Federation of Egyptian Industries member Mohamed El Bahey told Enterprise. This is particularly problematic as manufacturers already face a wealth of challenges, including raw material shortages and difficulties securing FX to import production inputs, components, and machinery.
Meanwhile, banks are reluctant: Some banks are hedging against dishing out industrial financing, as they’re concerned about the perceived high risk of default due to a slowdown in imports amid ongoing FX pressures and high inflation rates, SMEs Union head Alaa El Saqty told us. Difficulties securing financing from banks, coupled with the ongoing foreign currency crunch, are causing serious continuity issues for several businesses, including export-oriented manufacturers, El Saqty and El Bahey both agreed.
Your top industrial development stories for the week:
IDA extends deadline to bid for land plots: The Industrial Development Authority (IDA) has extended the deadlines for buying any of the 456 plots of land it put up for grabs earlier this month, pushing the deadline for purchasing the conditions booklet to 7 March and online reservation requests to 28 March, it said in a statement.
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