Not a Barbie world

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WHAT WE’RE TRACKING TONIGHT

THIS EVENING: Eurozone inflation is slowing down

Good afternoon, friends, and a very happy THURSDAY. We hope you enjoy the final day of the week, month, and probably Sahel season.

THE BIG STORY ABROAD

The Eurozone’s latest core inflation figures cooling off is leading the conversation in the international business press. This drop puts pressure on the European Central Bank to decide whether to proceed with more interest rate hikes since the Euro was in use. The EU’s statistical officedisclosed that overall inflationremained at 5.3% to date, but energy and food prices edged down further . (Financial Times | CNBC)

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

A second samurai bond issuance is in the pipeline: Ministers have given the green light to the Finance Ministry to take a fresh USD 500 mn issuance of JPY-denominated bonds to market.
The future Sohag wind hub just got bigger: An Orascom Construction-consortium has signed a land allocation agreement with the Electricity Ministry for its planned 3-G W wind farm.
Fertilizer finance from Afreximbank: The African Export-Import Bank (Afreximbank) has agreed to extend a USD 400 mn loan to the state-owned Chemical Industries Holding Company (CIHC) for a USD 1.2 bn phosphate fertilizers complex in El Wadi El Gedid governorate.

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.

☀️ TOMORROW’S WEATHER- Expect more sunny skies as the temperature will hit 39°C at its peak in the daytime and drop to a cooler 23°C in the evening, according to our favorite weather app.

Lego is leading in a sluggish toy market + Could Saudi’s deep pockets get them into the Champion’s League?

Not really a Barbie World: The toy market is slumping, with the majority of big-name companies — such as Mattel, Hasbro, Funko, and Jacks Pacific — seeing their sales and revenues figures falling in 1H 2023, the Financial Times reports. The slowed performance comes after a pandemic-fueled boom back in 2020, when children and adults alike were spending more time at home and e-commerce was on the rise.

The one company that’s doing okay: Lego. The plastic building-block maker saw its revenues rise 1% y-o-y in 1H 2023 — a modest increase, but significantly better than its competitors, whose revenues have all fallen at double-digit rates during the first six months of the year, according to CNBC. Lego’s performance comes after several years of outperforming its market competitors by around 10%, CEO Niels Christiansen tells CNBC. The company is also pushing through with further expansions, with plans to open 89 new stores around the world to expand its international market, with the lion’s share (54 stores) opening in China, where Lego has been gaining popularity. As its footprint grows, Lego is also looking to expand more efficiently, with plans including building more factories to cut down on shipping costs, Christiansen said.

The Saudi Pro League (SPL) recently coughed up over USD 650 mn to purchase players as it eyes joining Europe’s Champions League, Bloomberg reported. Purchasing players like Christianity Ronaldo, Karim Benzema, and Neymar are all part of a drive to “[do] whatever it takes to have those players coming to Saudi Arabia,” SPL COO Carlo Nohra tels the business information service.

Defying geography? If the Kingdom does join the Champion’s League, it wouldn’t exactly be a first. Some non-European countries, like Kazakhstan, are members of UEFA and compete in the tournament. But that remains to be seen for KSA since Chief of Football Zvonimir Boban reportedly stated that the SPL’s participation in the 2025 Champions League is merely a "fabrication."

It’s not just about football: The recent Saudi splurge and attempts to attract players like Messi and rumors to pursue Mo Salah are enshrined within a larger ambition. As the Kingdom seeks to “[make] the clubs and the league an investable asset,” as Nohra puts it, this is but one of many industries where Saudi Arabia's plan to diversify from oil is on display. And it seems the hefty spending has been paying off: Since Portugal's Ronaldo came to Al Nassr from Manchester United late last year, broadcast income has surged by 650%.

Da 5 Bloods: A deftly crafted story commenting on questions of racial equality and justice

? ON THE TUBE TONIGHT-
(all times CLT)

Spike Lee’s Da 5 Bloods is a cinematic exploration of brotherhood, trauma, and racial injustice. Released amid protests against racially motivated police brutality, this masterpiece reflects war — both in a literal and figurative sense. It follows a group of Black American veterans who return to Vietnam decades after the war to retrieve the remains of their fallen commander, Stormin’ Norman, but also to find the treasure they buried during their service at the instruction of their former commanding officer. They had claimed the misplaced gold as overdue reparations for the oppression endured by Black Americans. While occasional moments of predictability plague the otherwise masterful script, any faults are overshadowed by the powerful performances of the cast, which includes Chadwick Boseman in his penultimate role before his passing, Delroy Lindo, Isaiah Whitlock Jr., and then-rising star Jonathan Majors. Unsurprisingly, Spike Lee deftly creates a self-contained story that provides unflinching commentary about the perennial struggle for racial equality and justice.

⚽ It’s another quiet day in the football world, but it’s not going to last much longer: Gameweek 4 of the Premier League kicks off tomorrow with a single game between Luton Town and West Ham at 10pm. After a light appetizer, we’re going to be served up a heavy main course of matches on Saturday:

Sheffield United v Everton (2:30pm)
Manchester City v Fulham (5pm)
Chelsea v Nottingham Forest (5pm)
Burnley v Tottenham (5pm)
Brentford v Bournemouth (5pm)
Brighton v Newcastle (7:30pm)

The competition has been exciting from the get-go in the Enterprise Fantasy League. Join us by clicking on this link or entering the code abd0f7.

The most important matches in the major European leagues this weekend:

Roma v Milan (Serie A — 9:45pm Friday)
Cadiz v Villareal (La Liga — 8:30pm Friday)
Dortmund v Heidenheim (Bundesliga — 9:30pm Friday)
Nantes v Marseille (Ligue 1 — 10pm Friday)
Real Madrid v Getafe (La Liga — 10pm Friday)
Alavés v Valencia (La Liga — 7:30pm)
Napoli v Lazio (Serie A — 9:45pm)
Mönchengladbach v Bayern Munich (Bundesliga — 7:30pm Saturday)

? Meanwhile in the basketball world: Egypt and Jordan were just beginning their match in the FIBA Basketball World Cup as we hit “send” on this afternoon’s edition. After landing in the third spot in its group, the Egyptian team is playing the third- and fourth-place teams in Group C to determine the 17-32nd rankings in the championship. Egypt’s second match will be against New Zealand at 11:45pm on Saturday. The pharaohs need to come out on top in both games to secure their qualification to the 2024 Paris Olympics — as long as no other African team secures a higher ranking in the World Cup.

El Morabba3 is coming to Egypt. Jordanian rockband El Morabba3 will be performing at three concerts, the first of which will be at the closing ceremony of the International Summer Festival at Bibliotheca Alexandrina tomorrow. The second will be at El Sawy Culturewheel on Sunday, 3 September. The third will be at Cairo Jazz 610, Sheikh Zayed branch, the band will be sharing the stage with the singer and songwriter Samar Tarek on Wednesday, 6 September.

Tickets are available here for Bibliotheca Alexandrina, here for El Sawy CultureWheel and reservation for the CJC 610 will be through their Facebook page.

The Elite Stand Up Comedy will be performing their show at Cairo Festival City’s The Marquee this Saturday, 9 September at 9:00pm. Get your tickets with Ticketsmarche.

AUC’s Tahrir Cultural Center is hosting the Medfest Cinematic Film Forum from Thursday, 14 to Sunday, 17 September. Get your tickets with Ticketsmarche.

Tamino is coming back to Egypt to perform on Friday, 22 September at 8pm at AUC’s New Cairo campus. The early bird tickets for his Sahar Tour are on sale on Ticketsmarche starting today.

DJs Kygo , Tiësto, Kungs and Frank Walker are performing on Saturday, 28 October at the Giza Pyramids. The concert will be part of the next edition of the four-day Palm Tree Music Festival (PTMF) which will be held from Thursday, 26 October until Sunday, 29 October.

Get your running shoes ready for the 2023 edition of the El Gouna Half Marathon, which is scheduled to take place on Saturday, 11 November. You can sign up for the marathon from here — and catch the lowest registration price with the early bird special which starts today and ends Saturday, 30 September.

Jim Gaffigan’s Barely Alive Tour will be landing on the stage of The Marquee at Cairo Festival City on Thursday, 16 November. Get your tickets with Ticketsmarche.

Stuff They Don’t Want You To Know is a podcast for rational conspiracy theorists. Since 2008, hosts Ben Bowlin, Matt Frederick, and Noel Brown have been delving into the world of popular conspiracy theories to analyze them rationally and uncover the disturbing grains of truth at the heart of paranoia. In addition to prevalent conspiracy theories, the hosts delve into cultural topics like the dubious history of tipping. They reveal that its origins lie in European feudalism, and that the cultural phenomenon made its way to the US after the Civil War as Americans tried to imitate the European bureaucrats they observed while traveling the continent. Interestingly, though not surprisingly, emancipated slaves were hired without actual wages and forced to rely on tips as their main source of income. This is unfortunately an abused system to this day, as since tipping is not enforced by law, only cultural practice, some institutions take advantage of this unspoken rule to avoid paying their employees a livable wage, forcing the consumer to shoulder the burden and the blame of providing workers with enough money to make it through the month. You can also listen to the full episode on iHeartRadio, Spotify, and Audible.

Material World : A Substantial Story of Our Past and Future. Have you ever paused and wondered what goes into your mobile phone and laptop batteries, USB flash drive, or computer microchips? This book will tell you how sand, salt, iron, copper, oil and lithium are the backbone of our modern civilization, driving economic growth, efficiency, and connectivity. Ed Conway, an economics editor at Sky News and the author of the book, jumps back and forth through time delving into the history, present and future of these elements, highlighting its uniqueness. He explains how they are extracted as raw materials, then processed and manufactured to become part of our daily lives. These elements have become more affordable and widely used due to advancements in manufacturing and experience gained over time —giving us powerful computers, communication networks, renewable energy systems, modern infrastructure, and much more. However, the extraction, production, and disposal of these materials have environmental drawbacks, such as greenhouse gas emissions, habitat destruction, and pollution, which he also highlights. Pick up your copy on Amazon to learn more.

What the markets are doing on 31 August, 2023

The EGX30 rose 0.3% at today’s close on turnover of EGP 2.1 bn. Local investors were net sellers. The index is up 29.3% YTD.

In the green: Abu Qir Fertilizers (+2.4%), B Investments Holding (+2.1%) and CIB (+2.0%).

In the red: Orascom Construction (-2.9%), Beltone Financial Holding (-2.2%) and E-Finance(-2.1%).

Money supply 101. PLUS: The implications of fluctuations in money supply on Egypt

Enterprise Explains: Money supply. The primary function of central bankers across the globe is to regulate money supply, the most essential lever in economic governance. To comprehend this function, it’s imperative to grasp the intricate relationship between money supply, inflation, and interest rates. The disruption of global supply chains as a result of the Russian war on Ukraine in early 2022, and the pandemic before that, has sent shockwaves through global economies, leaving central bankers to grapple with money supply issues and their primary byproduct, inflation.

For the uninitiated: What is money supply? It’s the total quantity of money circulating within an economy. It encompasses various forms of money, including physical currency, coins, demand deposits, and liquid assets that can readily be converted to banknotes.

Consumers spend more when there’s a high level of money circulating in the economy, driving up t he prices of goods and services —which is referred to as high inflation. An unpopular economic challenge, inflation can spiral when left unaddressed and lead to hyperinflation, a situation where the value of the local currency is so eroded and corrective measures become way less effective.

How does one tamp down inflation? The mainstream economic wisdom is to tighten monetary policy. Central banks tend to raise interest rates or enact other measures (such as raising banks reserve ratio requirements) when inflation is above target levels in a bid to reel in liquidity, discourage consumer spending, and ultimately tamp down inflation. And when the economy is nearing or in recession, central bankers loosen their monetary policy by lowering interest rates to encourage people to borrow and spend, ultimately propelling the economy.

Monetary tightening has its own challenges: Due to increased interest rates globally and the reduction of central banks’ balance sheets, the market is experiencing a reduction in liquidity, according to Bloomberg. This means that there is less available money, making it harder for individuals and businesses to secure financing, according to the business information service.

The global outlook: The IMF revised upwards its 2023 global growth outlook by 0.2 percentage points to 3.0% from the 2.8% April forecast in July. Despite the revised figures, the forecast is significantly below 2022’s 3.5% growth rate. The fund is now forecasting global headline inflation to fall to 6.8% in 2023 from 8.7% in 2022.

In Egypt’s context: Egypt wasn’t spared from these global economic headwinds, leaving it to wrestle with two economic challenges: High inflation and a hard currency shortage. Egypt’s 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 in July from 35.7% in Juneon the back ofexcess money supply circulating in the local market and rising prices in global markets.

Egypt’s money supply increased 24.6% y-o-y to EGP 8.2 trn in June 2023, according to central bank figures. The Central Bank of Egypt (CBE) has been heavily contributing to increasing the level of money supply in the economy mainly by purchasing government bonds, Reuters reports. This money has been used to finance government expenses, including “infrastructure projects including new cities and a vast expansion of roads while seeking to sustain some subsidies in order to prop up sliding living standards,” according to the newswire.

Global conditions are affecting the local dynamics: Much of Egypt’s inflation“ is imported and a lot of it is due to supply problems,” CBE Governor Hassan Abdalla said in April. “Not only supply prices but supply issues including a backlog that has resulted from some previous regulations. And this in itself is not and will not be addressed by interest rates.” This has led local food and beverage prices to rise 68.4% y-o-y in July, faster than the 65.9% rate the month before.

Imports have become all the more expensive on the back of the recent EGP devaluation and ashortage of hard currency poses a significant challenge for Egypt’s economy. This shortage stems from a variety of sources, including a deficit in local FX generating streams, and market turmoil leading to a selloff in government debt instruments. These challenges have resulted in the rise of a parallel market that is currently valuing the EGP at around 20% lower than the official rate.

THE ENTERPRISE ENTERTAINMENT CALENDAR

AUGUST

31 August (Thursday):Ali El Haggar concert, Citadel Festival for Music and Singing, Citadel Salah El Din, Cairo.

31 August (Thursday): Double Zuksh, Omar Kamal, El Sawareekh concert, New Alamein Festival, New Alamein.

31 August (Thursday): Les Miserables theatrical production in Arabic at Arkan Plaza.

SEPTEMBER

1-2 September (Friday-Saturday): Les Miserables theatrical production in Arabic at Arkan Plaza.

2 September (Saturday): Stand Up Comedy Open Mic hosted by Hashem El Garhy at Makan.

7-9 September (Thursday-Saturday): Animatex4th Edition at AUC Tahrir Cultural Center.

9 September (Saturday): The Elite Stand Up Comedy show at The Marquee, Cairo Festival City.

14-17 September (Thursday-Sunday): Medfest Cinematic Film Forum at AUC Tahrir Cultural Center.

21-23 September (Thursday-Saturday): L’Etape Egypt by Tour de France, Sharm El Sheikh.

22-23 September (Friday-Saturday): Tamino Sahar Tour concert in AUC Tahrir Cultural Center.

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

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

OCTOBER

6 October (Friday): Armed Forces Day.

13-20 October (Friday-Friday): El Gouna Film Festival (GFF).

28 October (Saturday): Djs Kygo, Tiësto, Kung and Frank Walker concert, Giza Pyramids.

NOVEMBER

11 November (Saturday): El Gouna Half Marathon 2023, El Gouna.

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

16 November (Thursday): Jim Gaffigan’s Barely Alive Tour at The Marquee, Cairo Festival City.

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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