Egypt makes Olympic history, becoming the first African nation to win gold in the men's modern pentathlon

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What We're Tracking Today

Egypt becomes the first African nation to win Olympic gold in the men's modern pentathlon

Good morning, friends. We are kicking off the week with a lot of good news — most notably Egypt made Olympic history last night, taking home Africa’s first Olympic gold in modern pentathlon. We also secured a silver medal in women's 81kg weightlifting. We also saw inflation ease for the fifth month in a row, a lot of fresh investments, and a message of reassurance from Prime Minister Moustafa Madbouly.

HAPPENING TOMORROW-

The CBE is putting EUR 600 mn worth of t-bills up for auction: The Central Bank of Egypt is looking to raise some EUR 600 mn from auctioning off one-year, EUR-denominated treasury bills, according to the CBE website. The submission deadline for the auction is tomorrow at 11am.

It’s been a while since the CBE last sold EUR-denominated bonds: There’s only been ten auctions of EUR-denominated t-bills in the last five years. The most recent auction saw the CBE raising EUR 657 mn before the float in November of last year at an average yield of 4%.

So, why now? The central bank is likely looking to raise EUR funds to pay off maturing debt, EGBank board member Mohamed Abdel Aal told Enterprise. “FX can help bridge any existing and expected cash gap,” he added.

Who’s buying? Despite the recent hot money outflows, investors are still interested in local debt instruments, they take advantage of the differences between exchange rates and interest rates, he continued.

WATCH THIS SPACE-

Tabreed signals it’s ready once again to invest in the Egyptian market: UAE-based district cooling firm Tabreed is in talks to expand its operations in Egypt following the launch of its project at Marakez’s Downtown Katameya Mall, CFO Adel Al Wahedi told Asharq Business.

You can partly thank the stability of the EGP: The company has been hesitant to invest in Egypt because it conducts its activities in local rather than foreign currency, Al Wahedi explained. However, the firm has taken note of the stability of the EGP over recent weeks

Remember: The firm terminated an EGP 1.6 bn contract with Egyptians for Healthcare Services at the start of the year for the CapitalMed medical complex in Badr City. The company’s CEO Khalid Al Marzooqi said that the pre-float FX crisis had made the project “financially unsustainable.”

Do you want to attend our 2024 Enterprise Finance Forum on 24 September? Seating is strictly limited at our flagship, invitation-only forum for C-suite executives and other senior leaders.

Why attend? We’re in the early days of a generational realignment of power in our industry — in our region and beyond — and on the cusp of the biggest intergenerational transfer of wealth that the world has ever seen. With that as the backdrop, we’re going to take stock of where we stand six months after the float of the EGP and ask what’s next for finance in our country and the wider region. Among the questions we’ll be asking:

What’s Egypt’s role in the regional industry?
What are foreign investors looking for right now?
Is real estate the only asset class in Egypt?
What does the next generation of leaders think as they take over established family businesses?

Do you want to request an invitation? Tap or click the image above.

PSA-

WEATHER- We’re in for another hot day in Cairo today, with a high of 37°C and a low of 27°C, according to our favorite weather app.

It’s a little cooler in Alexandria, with a high of 34°C and a low of 24°C.

** DID YOU KNOW that we now cover Saudi Arabia and the UAE?

** Were you forwarded this email? Tap or click here to get your own copy delivered every weekday before 7am Cairo time — without charge.

DATA POINT-

Food exports were up 25% y-o-y in 1H 2024 to record USD 3.2 bn, according to a statement from the Food Export Council. Exports to other Arab nations accounted for 52% of total food exports, while EU-bound exports accounted for 22%.

CIRCLE YOUR CALENDAR-

#1- Attention, climate startups: The Planning and International Development Ministry and World Food Programme (WFP) are offering grants to local startups focused on climate adaptation and food security under the Climate Adaptation Innovation Accelerator Programme. Successful applicants will receive up to USD 200k in grants alongside guidance, support, and the chance to participate in WFP operations. The accelerator program targets startups, companies, and NGOs in Egypt, Jordan, and Lebanon. The application deadline is Tuesday, 11pm local time. You can apply here.

#2- The summer break must come to an end: Public schools are back in session for the 2024/2025 academic year on Saturday, 21 September, according to an Education Ministry statement. The second semester will kick off on 8 February, 2025 and the year will draw to a close on 5 June, 2025.

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

THE BIG STORY ABROAD-

It’s another day of no single story leading the conversation in the international business press, leaving us with a patchwork of headlines to sift through this morning:

Donald Trump’s campaign said it was hacked yesterday, after Politico began receiving authentic internal communication documents late last month. The breach came from “foreign sources hostile to the United States, intended to interfere with the 2024 election and sow chaos throughout our Democratic process,” a Trump campaign spokesperson said, pointing a finger of blame at Iran. (Reuters | CNBC | Wall Street Journal)

US junk loan funds faced their largest withdrawals since early 2020 amid recent market declines, with USD 2.5 bn pulled out in a week due to concerns over a potential economic slowdown. Most of these withdrawals came from ETFs, the Financial Times writes.

Israel killed nearly 100 Palestinians when it launched an airstrike on a school compound that was used as a shelter for displaced children and women early on Saturday morning. The attack — which came as the victims were gathering for Fajr prayers — has so far claimed the lives of more than 93 Palestinians, including 11 children and six women, according to Palestine’s civil defense spokesperson. (Reuters | Washington Post | CNN | Washington Post | Guardian)

ALSO- Susan Wojcicki, former CEO of YoTube, died on Friday at the age of 56 due to lung cancer. (Financial Times | Wall Street Journal)

WAR WATCH-

Egypt, US, and Qatar call for urgent discussion over Gaza ceasefire on Thursday: The leaders of the three mediating countries called for renewed ceasefire discussions on Thursday, 15 August, in an effort to “close all remaining gaps and commence implementation of the [agreement] without further delay,” according to a joint statement from the countries. The statement said that the three nations would be willing to present a bridging proposal that would resolve remaining issues if necessary, emphasizing that there is “no further time to waste nor excuses from any party for further delay.”

Israel agreed to send a delegation to the talks, according to a statement from the Israeli prime minister’s office.

US officials say that an agreement is “closer than ever,” despite expectations of an Iranian attack on Israel in response to Hamas leader Ismail Haniyeh’s assassination in Tehran. However, the US doesn’t expect an agreement to be signed on 15 August, “as there’s still a significant amount of work to do, with both sides holding to firm positions,” a senior Biden administration official said on Thursday.

OLYMPICS-

It was a momentous day for team Egypt, which clinched its first gold and silver medals of the Paris Games. Our own 24-year-old Ahmed El Gendy took home Africa’s first Olympic gold medal in modern pentathlon after setting a world record of 1,555 points yesterday, just three years after he claimed silver at the Tokyo Games. In the meantime, weightlifter Sara Samir snagged silver in the women's 81kg final after lifting a total of 268kg — 117kg in the snatch and 151kg in the clean and jerk. The victory follows her bronze medal at the 2016 Rio Olympics.

Team Egypt has so far secured three medals at the 2024 Games — the first of which was claimed by Mohamed El Sayed when he picked up bronze in the men's épée individual two weeks ago.

One member of team Egypt has unfortunately caught the attention of the international press for all the wrong reasons: Wrestler Mohamed Ibrahim El Sayed was arrested on Friday on sexual assault charges for allegedly groping a woman outside a Paris cafe. El Sayed has since been released and deemed innocent due to lack of evidence.

Spain beat the hosts to take gold for men’s football: The Spanish men’s Olympic football team emerged on top of an 8-goal thriller against France to take the spoils, finishing the match 5-3. Morocco took home the bronze medal after thrashing Egypt 6-0.

Germany and Denmark are set to meet in the men’s handball final, after dispatching Spain and Slovenia, while the US and France are set to meet in both the men’s and the women’s basketball finals today as well after Friday’s events.

The medal table:

China (39 gold, 90 overall)
USA (38 gold, 122 overall)
Australia (18 gold, 50 overall)
Japan (18 gold, 43 overall)
France (16 gold, 62 overall)

It’s a pretty quiet last day for team Egypt, with only a few matches taking place:

Cycling track: Ebtissam Zayed will be participating in the women’s omnium scratch race at 12:00pm.
Weightlifting: Halima Abbas will take part in the women’s 81kg+ weightlifting competition at 12:30pm.
Modern pentathlon: Malak Ismail will be participating in the women’s individual final at 12:00pm.

You can follow Team Egypt through this schedule or by heading over to our Paris 2024 Guide.

Want to see when your favorite sport is on? Check out the official schedule here.

Egypt’s inflation falls to lowest level since December 2022, recording 25.7% in July

Annual inflation eased for the fifth consecutive month in July: Annual urban inflation cooled to 25.7% in July, down 1.8 percentage points from 27.5% in June, according to data from state statistics agency Capmas. This came despite recent hikes to the prices of subsidized bread and fuel. July’s inflation figure is the lowest recorded since December 2022, according to our internal tracker.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Food and beverage inflation was on the retreat after rising in June: Food and beverage prices — the largest component of the basket of goods and services used to calculate headline inflation — continued to rise but at a softer rate of 29.7% y-o-y in July, down 2.2 percentage points from a month prior. On a monthly basis, the rate of food and beverage inflation came in at only 0.3%, down 1.3 percentage points from the month before — this helped monthly inflation slow to 0.4% in July from 1.6% the month before.

Inflation came in lower than expectations: Analysts saw inflation cooling in July, but not as much as it did. A Reuters poll of 18 analysts forecasted annual urban inflation easing to 26.6% in July — a whole 0.9 percentage points higher than Capmas’ reading.

Core inflation also softened: Annual core inflation — which excludes volatile items such as food and fuel — slowed to 24.4%, down from 26.6% in June, according to data from the Central Bank of Egypt. While monthly core inflation was negative for the second time since August 2021, coming in at -0.5%, down from 1.3% in June.

Inflation is on a downward path, but August will have to deal with additional inflationary pressures: There seems to be a broad consensus that the rate of inflation will continue to fall throughout the year into the next, with Capital Economics forecasting that the country should be within reach of the Central Bank of Egypt’s target of 7% (±2%) in Q1 2025. However, Capital Economics points out that fuel price hikes in July only came in at the end of the month and that we will only fully see their impact in August. Economist Mona Bedair agrees and adds that the readings also do not take into account metro ticket price hikes that came into effect in the beginning of August.

Looking into August’s crystal ball: Economic analyst Dina El Wakkad said in a separate note that she expects headline inflation figures for August to come in between 25.3-25.6%. Bedair has a more optimistic forecast, seeing inflation figures for August falling between 25.1-25.6%.

Promising inflationary data are reigniting speculation on when the CBE will start cutting rates: While the CBE is expected to keep interest rates unchanged during its next meeting on 5 September, Pharos Holding sees a potential rate cut coming by 4Q 2024, Pharos Holding economist Esraa Ahmed said in a note. Capital Economics is a little more conservative, instead penciling in 1Q 2025 for a rate cut with the possibility of an earlier cut on the back of even more promising inflation data.

Egypt and UAE ink three project agreements worth bns of investments

A lot of Emirati investments incoming: A series of meetings between government officials and Emirati government and business figures yielded three new joint projects that are set to inject a whole lot of cash into our industrial sector.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

#1- A USD 3 bn oil logistics zone on the Mediterranean: Egypt and the UAE inked an MoU to build a USD 3 bn oil logistics zone at Al Hamra Port on the Mediterranean coast, according to a cabinet statement. The new zone will leverage the integrated system at the Fujairah Oil Industry Zone and its partnerships with international oil suppliers to streamline oil supply chain in Egypt.

Timeline: The construction of the zone is expected to take three years from the date construction kicks off in 1H 2025 and following the completion of technical studies, an Egyptian government official told Asharq Business. Additionally, an Egypt-UAE team has been put together to follow up on progress of the MoU and to resolve any hindrances, according to the cabinet statement.

We saw this coming: The government of UAE’s Fujairah discussed potential investments in our oil sector during a visit by Oil Minister Karim Badawi to the emirate at the end of July. The talks revolved around a partnership between Egypt and UAE to enhance petroleum storage and handling in Egypt, as well as cooperate on ship bunkering.

#2- An Emirati industrial zone in East Port Said? The two sides are also in talks over setting up an Emirati industrial zone in East Port Said, aimed at meeting local market needs and ramping up exports, according to a statement from the Industry and Transport Ministry. The zone would leverage the geographic advantages of the area and its access to railways linking the zone with ports on the Mediterranean.

A variety of projects are on offer: The zone would include solar and wind energy projects alongside wastewater treatment and seawater desalination plants and an aluminum manufacturing complex, the statement said. The statement also suggested the government was exploring the option of making the zone a freezone or special economic zone exempt from customs duties.

#3- Hisense inks agreement for USD 38 mn manufacturing facility: Chinese electronics and household appliance manufacturer Hisense and the UAE’s FBB Tech have inked a contract with Chinese industrial developer Egypt TEDA to establish a USD 38 mn electronic devices manufacturing facility in the China-Egypt TEDA trade zone in Ain Sokhna, according to a cabinet readout.

The details: The project will span 110k square meters and is poised to produce 2.5 mn units a year. The first phase of the project includes manufacturing TVs, monitors, and audio recorders, with 30% of production earmarked for the local market and 70% designated for exports to countries in the Middle East, East Africa, and Europe.

CHINA ALSO WANTS IN ON THE INVESTMENT SPREE-

Another Chinese project incoming? Chinese textile and garment manufacturer Jiangsu Lianfa Textile is looking to set up a USD 500 mn integrated complex for textile and ready-made garment production in Egypt, according to a statement.

The specs: Spanning 350k square meters, the planned facility is set to include several production lines. The Chinese company intends to export 90% of the facility’s production.

GAFI wants more: The investment authority has plans to organize forums and promotional tours to capture the attention of more emerging markets-focused Chinese investors, according to the General Authority for Investment and Freezones head Hossam Heiba.

Egyptian Prime Minister Moustafa Madbouly addresses last week’s global markets meltdown

A message of reassurance from Madbouly: The hot money outflows last week, triggered by the global markets meltdown, represented no more than 7-8% of foreign investors’ holdings of our debt instruments, Prime Minister Moustafa Madbouly told reporters (watch, runtime: 56:23) on Thursday.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

ICYMI- Fears of a US recession after the publishing of “alarming” US economic data threw equity markets into a tailspin last Monday, triggering a global sell-off that pushed Wall Street to its worst day in nearly two years and erasing USD 6.4 tn from global stock markets. The EGP was changing hands at an average of 49.2 to the greenback on Monday— its lowest level since March — while the benchmark EGX30 dropped 2.3% to close at 27.8k, before recovering.

What that meant for us: Foreign investors sold some USD 600 mn worth of local debt instruments during the days leading up to last Monday as they poured their capital into safe-haven assets.

How was it handled? Investors withdrew their funds at the higher greenback price and were paid from market liquidity rather than the central bank’s FX reserves, according to Madbouly. He added that the outflows’ impact on the EGP / USD exchange rate was manageable and mirrored those of other emerging market currencies.

Remember: Net foreign reserves edged up by USD 105 mn in July to hit a fresh high of USD 46.5 bn, surpassing the USD 46.4 bn recorded in June.

Geopolitical tension at play: Madbouly highlighted that the ongoing regional geopolitical turmoil, which could potentially worsen amid escalating tension between Israel and Iran, is compounding uncertainty in global markets, with Egypt no exception to these pressures.

The story was also picked up by Reuters.

ALSO FROM THE PRESSER- Subsidized industrial loans will live on: Madbouly said that he had asked the Finance Ministry and the central bank to renew the subsidized loan program that targets industrial activity.

Refresher: The PM announced in March that he had approved a new EGP 120 bn program of subsidized loans for manufacturers in freezones as well as agriculture and renewable energy companies. The program offers financing at an interest rate of 15%.

Egyptian gov’t could be restructuring income tax brackets to alleviate inflationary pressures

Gov’t mulls raising the tax exemption threshold: Raising the personal income tax exemption threshold is currently “under consideration” in light of recent economic changes, Deputy Finance Minister for Taxes Sherif Al Kilani reportedly told Al Arabiya last week.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Part of a bigger social support package: The move — which follows March’s increase of the threshold from EGP 45k to EGP 60k — could come as part of the government’s upcoming package of social protection measures, which will be aimed at mitigating the impact of inflationary pressures on Egypt’s most vulnerable, Finance Minister Ahmed Kouchouk said last week. The government is gearing up to announce the new social protection package in September, with plans to begin implementing it in October, two government sources told us last week.

That’s not all though — we may be headed toward a tax bracket overhaul: The government is also studying shifting tax brackets up in light of continued inflationary pressures, a government source tells Enterprise. Al Kilani told reporters last week that raising the tax exemption limit is being considered as part of a package of reform measures, without providing further details.

What would the new tax pyramid look like? The expected changes in income tax brackets would be progressive, with the tax exemption threshold and zero-tax bracket potentially rising by 20-25% to match inflation rates, our source said. This would be accompanied by upward adjustments to other brackets.

Expanding the tax base: To offset the tax losses from raising tax exemption limits and easing the burden on low earners, efforts are underway to increase the number of registered taxpayers, the source said.

GlobalCorp issues EGP 1.32 bn in securitized bonds

GlobalCorp takes fresh securitized bonds to market: Non-banking financial services firm GlobalCorp has raised EGP 1.32 bn in a securitized bond issuance, according to a statement (pdf). The three-tranche issuance carried tenors of 25, 37, and 48 months and received ratings of AA+, AA, and A.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Part of a wider program: This is the company’s sixth issuance and it comes as part of a wider EGP 10 bn securitization program. It follows the issuance of EGP 1.35 bn worth of securitized bonds in February under the same program.

Who bought in? CIB, the National Bank of Egypt (NBE), SAIB Bank, Industrial Development Bank, and Al Ahly Pharos acted as underwriters.

Advisors: CIB and Al Ahly Pharos acted as financial advisors, lead arrangers, and transaction managers. NBE was bookrunner, while Banque Misr served as custodian. Dreny and Partners served as legal counsel and Baker Tilly as auditor.

DATA POINT- The transaction brings the total value of securitized bonds issued in Egypt so far this year to EGP 17.4 bn, according to data tracked by Enterprise.

Abou Ghaly Motors secures EBRD funds to continue electrifying its London Cab fleet

London (Cab) calling: The European Bank for Reconstruction and Development (EBRD) will provide EGP 500 mn to Abou Ghaly Motors to expand its London Cab fleet of EVs, according to a statement (pdf). The tranche will fund the purchase of 100 electric cabs to add to its existing fleet of 250 electric London Cabs.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Remember: The EBRD provided a EUR 10 mn loan to Abou Ghaly Motors back in 2022 to fund the purchase of 250 electric vehicles for its taxi fleet. The loan was part of a drive to electrify the company’s entire cab stock.

What they said: “This new tranche to expand the London Cab fleet to serve Egyptian passengers and incoming tourists to the Arab Republic of Egypt is a testament to the technical and administrative performance of Abou Ghaly Motors Group in this project. It also reflects the financial strength and resilience of the group,” said CEO Mohamed Abou Ghaly. He added that, “collaboration with the EBRD is not just about financing but has a significant impact on the group's administrative and technical development and its leading role in community development.”

Egypt’s triad of Olympic medals at the Paris Games dominated the airwaves

Last night’s talk shows were abuzz with festive news from the Olympics, honing in on the victories of modern pentathlon athlete Ahmed El Gendy and weightlifter Sara Samir, who took home Egypt’s first gold and silver medals of the Paris 2024 Games.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

The nation’s talking heads showered the Olympians with praise, calling on the state to ramp up support for athletes to ensure similar successes in future competitions. Amongst these were Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 3:06 | 3:38) and El Hekaya’s Amr Adib (watch, runtime: 1:51 | 6:07).

President Abdel Fattah El Sisi personally congratulated Egypt’s medalists that have so far clinched gold, silver, and bronze in Paris — Mohamed El Sayed came in third in the men's épée individual earlier in the Games. Ala Mas’ouleety had coverage (watch, runtime: 0:36).

In contrast, the Egyptian football team faced harsh criticism following their 6-0 defeat to Morocco, which cost them the bronze medal. Moussa described the loss as a “disaster,” saying that the team “walked into the match already defeated” (watch, runtime: 2:43). The talk show host called on Prime Minister Moustafa Madbouly to hold the Egyptian Olympic delegation accountable, adding (watch, runtime: 3:43) that “the Egyptian people are outraged by the team's performance.”

The degreening of Cairo is catching the attention of the int’l press

Where did our trees go? In the three years leading up to 2020, Cairo lost some 911k sqm of green space as the government carried out projects to expand main roads, slashing the governorate’s trees in the process, Reuters writes. Cairo also witnessed a number of parks cleared to make room for shops and cafes, while other green spaces have been removed for no clear reason. This has left the country with 1.2 sqm of green space per capita — far below the World Health Organization’s recommended 9 sqm.

The loss of green space carries significant health implications: The loss of parks, gardens, and other green spaces can exacerbate what experts cited by Reuters call the “urban heat island effect,” in which natural land cover is replaced with dense concentrations of pavement, buildings, and other heat-absorbing and heat-retaining surfaces. Urban heat islands increase the likelihood of heat related illness, something that will only be exacerbated as heat waves become more frequent with climate change.

Egyptian government =pays back USD 21 mn of its dues to Dana Gas

ENERGY-

Emirati firm Dana Gas has collected USD 21 mn in receivables from Egypt in 1H 2024, receiving 64% of its dues for the period, it said in its latest earnings presentation (pdf). Its trade receivable balance in Egypt stood at USD 60 mn at the end of the period, up from USD 57 mn at the end of the first quarter.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Remember: The government had cleared USD 1.3 bn worth of arrears to foreign oil and gas companies operating in the country at the end of June.

RENEWABLES-

A new Masdar wind project may soon be in the works: The Electricity Ministry is close to inking an agreement with Emirati state-run renewables giant Masdar to build a 200 MW wind farm, a government source told Enterprise. The proposed project will cost USD 180 mn and be developed under a build-own-operate model with the Egyptian Electricity Transmission Company as the offtaker for all the electricity produced.

We might have heard of this project before: While it is not clear where the wind farm will be built, another wind farm with the exact same capacity that will also sell its power to the national grid is being planned by Masdar with Infinity Power in Ras Ghareb. That’s not where the similarities end, with our source telling us that negotiations with unnamed banks are ongoing, much like the Ras Ghareb project which is close to securing a USD 64.7 mn senior loan from the European Bank for Reconstruction and Development.

** Read the full story on EnterpriseAM UAE.

INFRASTRUCTURE-

We’re one step closer toward completing our power linkup with Saudi Arabia: The installation of the first transformer at a station that’s part of the Egypt-Saudi electricity interconnector has commenced, according to a statement by the Electricity Ministry. The transformer, which is being installed at a 500 kV station in Badr City, is reportedly “the first of its kind in the Middle East in terms of size, manufacturing technology, [and] operation,” the statement reads.

Remember: The USD 1.8 bn Egypt-Saudi electricity interconnection was reported to be 60%complete last month. The 3-GW project will reportedly be completed in two phases, with the first 1.5 GW phase set to go live in July 2025 before the second phase comes online in early 2026.

REAL ESTATE-

\#1- AlQamzi + Rebuillion: Engineering, construction, investments, and development firm Rebuillion is set to build the second and third phases of Egyptian-Emirati real estate firm AlQamzi Developments ’ Eastshire project in the Fifth Settlement under an EGP 700 mn contract inked by the two parties, Al Mal reports. Rebuillion is slated to deliver the two phases in a year’s time.

In detail: Rebuillion will build 178 buildings, including 10 standalone villas and nearly 168 townhouses.

#2- Real estate developer Nile Developments plans to invest EGP 2 bn this year on a number of projects in the new capital and New Cairo, Chairman Mohamed Taher told Al Mal.

The great unwinding: Global investors reverse three-quarters of the year’s carry trade

Three-quarters of global carry trades have been reversed, wiping out most of their gains for the year. Recent market shifts have eroded its gains by about 10% since May — a change that suggests that investors are pulling away from this strategy, which had been profitable since the end of 2022, according to JPMorgan stategists wrote in a note cited by Bloomberg.

(Tap or click the headline above to read this story with all of the links to our background and outside sources.)

Enterprise, what is a carry trade? Carry trade is a strategy where investors borrow money at low interest rates in one currency and invest it in another country in local currency with higher interest rates. This can potentially yield high returns when market conditions are favorable.

So what’s the problem? The global carry trade strategy is currently “not offering an attractive risk-reward,” the investment bank said. When market conditions change unexpectedly, the potential rewards may not be enough to justify the risks, especially with global events such as the US elections potentially influencing markets further.

With the instability of global markets, differences in interest rates have also become less reliable. For example, changes in monetary policy on the central bank level — such as unexpected interest rate changes made by the Federal Reserve and the Bank of Japan — influence global borrowing and lending conditions. Case in point: The historically popular JPY-USD carry trade lost its appeal to investors this week when BoJ’s interest rate hike fueled an increase in the value of the JPY.

Is recovery on the cards? While there might be a small chance for recovery in the carry trade this month, the overall strategy is currently not as appealing as it has been until recently due to heightened risks, JP Morgan analysts concur.

Last week’s global unwinding can also be credited in a large part to investors and macro funds unwinding their positions in carry trades, with tech stocks likely suffering the brunt due to carry trade-funded positions in the asset class, analysts told Reuters.

EGX30	28,751	+0.4% (YTD: +15.5%)
USD (CBE)	Buy 49.21	Sell 49.35
USD (CIB)	Buy 49.20	Sell 49.30
Interest rates (CBE)	27.25% deposit	28.25% lending
Tadawul	11,667	-0.5% (YTD: -2.5%)
ADX	9,306	+0.6% (YTD: -2.8%)
DFM	4,195	0.0% (YTD: +3.3%)
S&P 500	5,344	+0.5% (YTD: +12.0%)
FTSE 100	8,168	+0.3% (YTD: +5.6%)
Euro Stoxx 50	4,675	+0.1% (YTD: +3.4%)
Brent crude	USD 79.66	+0.6%
Natural gas (Nymex)	USD 2.14	+0.8%
Gold	USD 2,473.40	+0.4%
BTC	USD 61,062	+0.4% (YTD: +44.6%)

THE CLOSING BELL-

The EGX30 rose 0.4% at Thursday’s close on turnover of EGP 3.6 bn (equal to the 90-day average). Regional investors were the sole net sellers. The index is up 15.5% YTD.

In the green: Elsewedy Electric (+20.0%), ADIB (+2.6%), and Alexandria Containers and Cargo Handling (+2.2%).

In the red: Madinet Masr (-2.9%), Juhayna (-2.7%), and Ezz Steel (-2.3%).

CALENDAR

2024

SEPTEMBER

3-5 September (Tuesday-Thursday): Egypt International Airshow, El Alamein International Airport.

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

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

24 September (Tuesday): Enterprise Finance Forum, Cairo, Egypt

25-26 September (Wednesday-Thursday): The Asian Infrastructure Investment Bank’s (AIIB) 2024 annual meeting, Samarkand, Uzbekistan.

25-28 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo.

OCTOBER

1-3 October (Tuesday-Thursday): Cairo Sustainable Energy Week, Cairo, Egypt.

6 October (Sunday): Armed Forces Day.

17 October (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

13-17 October (Sunday-Thursday): Cairo Water Week, Water and Climate: Building Resilient Communities, Cairo, Egypt.

21-27 October (Monday-Sunday): The World Bank and IMF annual meetings.

30 September (Monday): Ban on sugar exports expiration.

NOVEMBER

4-8 November (Monday-Friday): World Urban Forum, Cairo, Egypt.

12-15 November (Tuesday-Friday): Arab African Investment and International Cooperation Summit, Aswan, Egypt.

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

26-28 November (Tuesday-Thursday): Egypt Energy Show, Cairo, Egypt.

DECEMBER

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

EVENTS WITH NO SET DATE

2H 2024: Gov’t to launch the Cairo Ring Road BRT buses.

3Q 2024: Egyptian-Armenian Joint Committee.

September 2024: Turkish-Egyptian Business Council meeting in Turkey.

September 2024: US-Egypt Strategic Dialogue, Cairo.

November 2024: Egypt to host the World Urban Forum (WUF12).

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

End of 2024: Shalateen Mining Company to launch a gold exploration tender in the Eastern Desert.

2025

July 2025: The first operational trail of Egypt-KSA electricity interconnection line.

EVENTS WITH NO SET DATE

2Q 2025: Safaga Terminal 2 to start operations.

2027

20 January-7 February: Egypt to host the African Games

EVENTS WITH NO SET DATE

End of 2027: Trial operations at the Dabaa nuclear power plant expected to take place.

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