IMF chief warns of economic toll of Gaza war, humanitarian crisis deepens as fuel supplies run out

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What We're Tracking Today

Countries force emergency session on Gaza at the UN General Assembly as US blocks ceasefire

Good morning, folks: A bit of good news to open the issue before the inevitable war talk…

We’ll all get an extra hour in bed tonight: Daylight saving time comes to an end at midnight tonight so don’t forget to turn back your clocks and enjoy that extra hour of sleep tomorrow morning.

The UN General Assembly is holding an emergency meeting today: With the United States and the UK continuing to block calls for an immediate ceasefire at the UN Security Council, other countries will try to force the issue with a vote at the UN General Assembly today.

Jordan and Mauritania are among 14 countries to have requested an emergency session“as rapidly as possible” to address the crisis in Gaza. “In light of the gravity of the situation, due in particular to the siege and military aggression by Israel … that has killed thousands of civilians … and inflicted catastrophic humanitarian conditions, risking further dangerous destabilization of the situation,” the two countries wrote in a letter to the chairman.

Remember: The US has twice voted down Security Council resolutions that would have called for an immediate ceasefire. Russia and Brazil have both put forward resolutions to bring an end to the fighting, though the US will only countenance a “pause” in the fighting and has insisted that the council recognize Israel’s right to self-defense.

Just symbolism, or…? The plight of the Palestinians has historically found huge support in the General Assembly, and while any vote is non-binding, any outpouring of global opposition to the conflict will be an embarrassment for the US-Israel axis and could increase the heat on Washington to push for a sustained ceasefire.

It goes without saying, but the conflict is still dominating the global conversation this morning:Bloomberg, the New York Times and the Washington Post are all covering the increasingly vocal global opposition to the war with varying degrees of surprise.

Also getting attention in the US press: The parallel universe that is the US House of Representatives, where the right wing of the Republican Party got their guy in the speaker’s chair. Outspoken Trumpist Mike Johnson is the man tasked with bringing together a divided Republican caucus just as lawmakers resume the seemingly intractable negotiations over the budget, with a government shutdown just weeks away. Smooth sailing ahead then. (CNN | Washington Post | Bloomberg | Reuters | NYT | Wall Street Journal)

WATCH THIS SPACE-

#1-Investors are doing DD on United Bank, and could wrap it up by December:Strategic investors interested in acquiring shares in Central Bank of Egypt-owned lender United Bank have begun due diligence, Chairman Ashraf El Kady told CNBC Arabia (watch, runtime: 3:04). The bank expects them to complete due diligence before the end of the year, he said.

Who’s interested? A number of international financial institutions are reportedly interested in acquiring shares in the lender, including the local units of Mashreq, Crédit Agricole, and the National Bank of Kuwait as well as international financial investors. El Kady did not provide any further information on interested investors.

Remember: United Bank attracted interest from Saudi Arabia’s sovereign wealth fund before talks collapsed over differences over the valuation amid uncertainty over the exchange rate. The CBE owns 99.99% of the bank.

#2-BRICS eyes its first-ever syndicated loan and we may get a slice: The New Development Bank, established by the BRICS group of emerging economies, is seeking its inaugural syndicated loan of USD 1.25 bn with a three-year tenor, writes Bloomberg, citing sources familiar with the matter. The Shanghai-based lender aims to use the loan for infrastructure and renewable energy financing in member states Brazil, India, China, and South Africa, as well as Egypt and Bangladesh, the people said. Interested Asian and Middle Eastern banks have until the end of November to submit their commitments.

Remember: Egypt, alongside Saudi Arabia, the UAE, Iran, Ethiopia, and Argentina, were recently invited to join BRICS and are expected to become members next year.

#3- Egypt’s securitization pipeline is looking healthy, with at least EGP 2.3 bn worth of issuances in the pipeline for next month if reports in the local press yesterday are to be believed:

Al Ahly Financial Leasing Company will issue bonds worth EGP 1.1 bn next month. (Al Borsa)
GB Auto’s Drive Finance will reportedly close a EGP 600 mn issuance, while One Finance is planning a EGP 530 mn sale. (Al Borsa)

HAPPENING TODAY-

And the next batch of golden licenses go to…: The General Authority for Investment and Freezones (GAFI) will sign contracts with Samsung, EnviroProcess, Gasco, and Fayoum Company for Storage and Warehouses to receive golden licenses tomorrow, a GAFI source told Enterprise yesterday. The companies have all received approval from the Madbouly government to receive the single-approval licenses.

#1-South Korean electronics giant Samsung intends to invest USD 50 mn in its new mobile phone factory at its industrial complex in Beni Suef. The company started manufacturing smartphones here last year at its USD 270-mn TV and tablet factory.
#2-Local company Fayoum Company for Storage and Warehouses will re ceiv e a license to work on a EGP 1.3 bn project to establish new strategic warehouses in Fayoum, providing 600 jobs during construction and 250 jobs at the operational stage.
#3- Local EV manufacturer EgyptSat Auto is getting a golden license to build a EGP 300 mn factory with an monthly production capacity of 5k cars.
#4- Thestate-owned Egyptian Natural Gas Company (GASCO) will invest USD 380 mn to expand its gas c omplex i n Alexandria. The company wants to add a fourth production line with a capacity of 600 mn cubic feet a day.
#5- EnviroProcess will establish a EGP 73.5 mn recycling plant for alternative fuels and fibers in Minya, creating some 170 jobs.

#1- Day two of Madbouly in Brussels: Prime Minister Moustafa Madbouly is in the Belgian capital today to participate in the EU’s Global Gateway Forum on behalf of President Abdel Fattah El Sisi. Held under the theme “Stronger Together through Sustainable Investment,” more than 40 high-level government representatives from the EU and its partner countries are attending the two-day event, as will representatives of financial institutions, businesses and international organizations.

On day one: Madbouly met with Jan De Nul senior officials to discuss exporting renewable energy of at least 2 GW from Egypt to Europe via a Mediterranean link, according to a cabinet statement yesterday. The prime minister also sat down with EU trade commissioner Valdis Dombrovski to discuss bringing Egyptian agricultural food products to the European market, a second statement said.

#2- It’s the final day of “Davos in the Desert”: Saudi Arabia's Future Investment Initiative (FII) is wrapping up today. Conference organizers wanted to focus on highlighting the kingdom as an investment hotspot to the world’s financial elite and the ways we can use AI to build a better future, but there was always one issue looming in the background — Israel’s brutal war on Gaza. (Bloomberg | Reuters | CNN | Times of Israel | Financial Times | Wall Street Journal)

War casts a shadow: World Bank President Ajay Banga warned the conference that the economic impact of Israel’s war on Gaza may be “even more serious” than we currently think, reports the Times of Israel. Many Wall Street CEOs mirrored Banga’s gloomy predictions, including BlackRock CEO Larry Fink who said that in the midst of war “when there’s less hope, we see contractions in our economies.”

Saudi open for business: Despite senior bankers, investors, and policymakers telling journalists on the sidelines of the conference how geopolitical turmoil might disrupt the global economy and Middle East investments, the conference’s message was clear — its business as usual in the kingdom, reports the Financial Times.

** What about the economic impact in our neck of the woods? IMF head Kristalina Georgieva spoke on that yesterday, which we cover in detail in the news well, below.

Meanwhile, Citi CEO Jane Fraser had this to say: “There’s a new S in ESG, which is security.” If anyone knows what that means, please let us know.

PSA for iSheep- Apple looks set to launch something new and “scary fast”. The tech giant sent invitations for a livestream event in which it is expected to announce the rollout of new Mac laptops, reports CNBC. The tagline on the Halloween-esque invite reads “scary fast”, leading to speculation that Apple is going to release faster M3 chips. The event will be held at 8pm ET on 30 October.

Back with a splash: Shark Tank Egypt’s second season kicked off last night, as local entrepreneurs pitched their projects and products to a panel of accomplished investors. Season two will air every Wednesday night on CBC and WATCH IT.

MARKET WATCH-

Oil demand to peak this decade: Global demand for oil, coal, and natural gas will peakthis decade as the shift towards renewables and electric vehicles helps wean the world off fossil fuels, the International Energy Agency (IEA) said in its annual World Energy Outlook report (pdf). The IEA expects global oil demand to peak at around 102 mn barrels per day in the late 2020s, before dropping to 97 mn b/d by 2050 if governments maintain their current energy policies.

But, we could do better: The agency says that demand could drop to 93 mn b/d in 2030 if governments commit to their national energy and climate targets and even 77 mn b/d if they carry out further policy changes to reach net zero by 2050. “The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of if, it’s just a matter of how soon,” IEA Executive Director Fatih Birol said in a statement accompanying the report.

This may be too optimistic of an outlook: The IEA’s optimistic outlook comes shortly afterOPEC published its 2023 World Oil Outlook (pdf), where it upped its long-term oil demand outlook to 116 mn b/d by 2045, a 5% jump from its 2022 forecast. The figure has “potential to be even higher,” the alliance of oil producers said. Chevron CEO Mike Wirth told the Financial Times that the IEA’s forecast is not even “remotely right.”

IMF chief warns of economic toll of Gaza war, humanitarian crisis deepens as fuel supplies run out

We lead this morning’s War Watch with a look at how Israel’s assault on Gaza could impact our economy here at home.

#1- IMF chief Kristalina Georgieva thinks Egypt and the region will suffer an economic hit if there is a prolonged conflict in Gaza. “Investors are going to be shy to go to [these countries]. The cost of ins., if you want to move goods, they go up. Risks of even more refugees in countries that are already accepting more,” Ahram Online quotes her as saying at the Future Investment Initiative in Riyadh yesterday.

Another spoke in the wheel: “What is happening in the Middle East is happening at a time when growth is slow, interest rates are high, and the cost of servicing debt has gone up because of covid and the war,” Reuters and Bloomberg quoted her as saying.

#2- Keep an eye on our tourism targets: Flight bookings to Egypt, Jordan and Lebanon have plunged since the start of the conflict, according to analysis by travel research firm ForwardKeys picked up by Reuters. Air tickets to Egypt have fallen by 26% y-o-y, to Jordan by 49%, and to Lebanon by 74%. The number of people visiting Egypt has boomed this year, with the Tourism Ministry reporting a 40% y-o-y rise in arrivals during the first seven months of the year. The government is aiming to attract 15 mn tourists in 2023.

#3- Pundits think the EGP is being squeezed in the parallel market:The conflict is driving up the price of greenbacks on the parallel market, said Fitch’s regional country risk head Ramona Moubarak in response to a question from Ahram Online. Moubarak told the state-owned newspaper that “negative sentiment because of the war has weighed on the parallel market,” saying she thinks the EGP is at about 46. A separate report from Sky News Arabia puts the figure at EGP 47.

Before you take media reports of parallel-market figures seriously: The parallel market is illiquid and opaque, and so more than a little prone to swings and exaggerations.

Remember: The IMF earlier this month downgraded its outlooks for the Egyptian economy and the wider MENA region:

Egypt: The Fund downgraded its FY 2023-24 growth outlook for Egypt to 3.6% from 4.1% previously. This was the second time it had downgraded its outlook this year, having cut it from 5.0% in July due to the FX crunch and lower investor confidence.
MENA: The IMF lowered its 2023 MENA growth outlook by 0.5 percentage points to 2.0%.

DIPLOMACY-

El Sisi emphasizes the need for caution in how it responds to Israel: President Abdel Fattah El Sisi yesterday said that military force is only for defending the country’s national security, and cautioned that it should be used “wisely.” “It's very important when you have this kind of power that you use it reasonably, wisely, and maturely, and you don't overstep and have illusions about your own strength,” he said at a military exercise in the Sinai (watch, runtime: 1:36). “You have this capability to defend yourself … never let anger or fervor cause you to overstep.”

This came amid calls in some quarters for Egypt to adopt a more aggressive posture towards Israel in response to calls from some of its officials to displace Gazans into the Sinai. Israel’s shelling of a border post earlier this week that injured nine Egyptian soldiers has inflamed public outrage about Israel’s conduct of the war. Both the IDF and Egyptian military said the attack was an accident, and Israel issued an apology.

El Sisi x Macron: El Sisi and his French counterpart Emmanuel Macron said they agreed on the need to avoid escalating the conflict and accelerate the delivery of aid to Gaza at a joint press conference yesterday (watch, runtime: 21:45). El Sisi said that the French president agreed that attempts to displace the Palestinians in the Sinai would be “extremely dangerous,” while Macron called for Israel to allow fuel supplies to reach hospitals. He said France would send a plane carrying medical supplies to Egypt, and a navy ship to provide support to Gazan hospitals. Neither the Egyptian or the French sides released readouts of the conversation.

Deadlock at the Security Council: Competing draft resolutions put forward by Russia and the US were voted down by members of the UN Security Council yesterday.

The US resolutioncalled for a humanitarian “pause” rather than a ceasefire, and included a reference to Israel’s right to self-defense. Ten countries on the 15-member council voted in favor, and the UAE, China and Russia all voted against it.
The Russian resolutioncalled for a full ceasefire and the cancellation of Israel’s demand for residents of north Gaza to flee south. The UAE, China and Russia voted in favor, and the US and UK voted against it. The rest abstained.

ISRAEL VS. THE UN-

Israel doesn’t have many allies in its war against Guterres: Some of Israel’s European allies offered a defense of UN Secretary-General Antonio Guterres yesterday after senior officials demanded his resignation for criticizing the occupation and accusing the IDF of breaching international law. The German government, and the Portuguese and Spanish prime ministers were among the European countries to support him amid the attacks from Israel, which accused him of committing blood libel and being a terrorist sympathizer. The head of the Arab League, Ahmed Aboul Gheit, also defended Guterres from what he described as “fascist” attacks by the Israelis.

ICYMI- In a statement to the UN Security Council on Tuesday, Guterres condemned Hamas’ “appalling” massacre of Israelis on 7 October but urged world leaders to put it in the context of Israel’s 56-year occupation of Palestinian lands. He also accused Israel of committing “clear violations” of international humanitarian law.

A rebuke: “I am shocked at the misrepresentations by some of my statements,” a visibly angry Guterres told reporters yesterday (watch, runtime: 1:32). “As if I was justifying acts of terror by Hamas. This is false. It was the opposite,” he said, reiterating his condemnation of Hamas

Israel doubles down: Israel’s UN ambassador, Gilad Erdan, yesterday threatened to “teach [the UN] a lesson,” and reiterated his call for Guterres’ resignation. “It is a disgrace to the UN that the secretary-general does not retract his words and is not even able to apologize for what he said yesterday. He must resign,” he said. Israel said it would now block all visas for UN officials, including its humanitarian chief Martin Griffiths.

ON THE GROUND-

Fuel blockade hits aid efforts: The UN’s agency for Palestinian refugees (UNRWA) said it would be forced to begin curtailing its humanitarian relief operations from last night if fuel is not delivered to Gaza. “Fuel is urgently needed to continue the UNRWA life-saving humanitarian operations. If fuel is not received into Gaza, UNRWA will be forced to significantly reduce and in some cases bring its humanitarian operations across the Gaza Strip to a halt,” it said.

No new aid deliveries made it into Gaza yesterday: Since the start of the conflict 17 days ago, just 62 trucks carrying food, water, medicine and humanitarian aid have entered the territory. Israel agreed to slightly ease its total blockade last week but is still preventing fuel from entering, leaving the strip almost entirely without power. The UN said yesterday that a third of hospitals and almost two-thirds of primary healthcare clinics have had to close due to fuel shortages and airstrikes.

Almost 1,500 people, more than 600 children dead in just two days: Yesterday was the deadliest day of the conflict so far, with the ministry reporting that another 756 people had been killed in Israeli airstrikes. This takes the death toll on Tuesday and Wednesday alone to 1,460, including 649 children.

The death toll: More than 6,500 people have now been killed by Israel over the past 18 days, according to the latest figures from the Gaza Health Ministry. Almost 17,500 have been injured.

Biden accuses Palestinians of inflating the death count: “I have no notion that the Palestinians are telling the truth about how many people are killed,” the US president told reporters yesterday. “I’m sure innocents have been killed, and it’s a price of waging war. But I have no confidence in the number that the Palestinians are using.”

S&P cuts three local banks credit rating days after downgrading sovereign rating

S&P Global has downgraded the long-term credit ratings of three local banks, a few days after it cut its rating on Egypt’s sovereign debt deeper into junk, it said on Tuesday.

Who was on the cutting block? State-owned lenders National Bank of Egyptand Banque du Caire as well as the country’s largest private-sector bank CIB, all had their credit ratings downgraded to B- from B. The rating agency also revised its outlook to stable from negative, pointing to the possibility of the government delivering on structural reforms.

This shouldn’t come as a surprise: The rating agency does ”not rate financial institutions in Egypt above the foreign currency sovereign ratings,” it said. S&P downgraded our sovereign credit rating earlier this week, lowering its long-term rating to B- from B on the back of the FX shortage and rising uncertainties about debt sustainability.

The rationale: All three of the banks have high exposure to sovereign debt in turn exposing them to the government’s risky credit profile, the rating agency said.

ICYMI- Moody’s downgraded the same three banks credit ratings to Caa1 from B3 earlier this month.

Egypt targets USD 25 bn in annual FDI in 5 years -GAFI head

Egypt has ambitious FDI targets:The government plans to increase annual foreign direct investment (FDI) to USD 25 bn within the next five years, General Authority for Investment and Freezones (GAFI) head Hossam Heiba said in an interview with Asharq Business. That’s 150% higher than the USD 10 bn of inflows (pdf) achieved in FY 2022-23.

Our green energy industry in particular should be getting an FDI boost: The green energy sector in Egypt is expected to receive more than USD 50 bn over the coming 10 years, Heiba added.

SPEAKING OF FDI…

Locally-manufactured electrolyzers could be on the cards: Belgium-based mechanical engineering group Joh n Cockerill E nergy (JCE) is partnering with a “major” Gulf firm to study manufacturing electrolyzers critical for green hydrogen production in the Suez Canal region, CEO Francois Michel told Prime Minister Moustafa Madbouly on the sidelines of the Global Gateway Forum in Brussels yesterday, a ca binet stateme nt said. The statement did not provide the name of the Gulf partner, a proposed timeline, or further details about the project.

Remember:The government has signed 10 framework agreements with international companies to build green hydrogen and ammonia plants over the past 12 months. That includes nine at last years COP27 summit and one with China Energy last week. Egypt also approved incentives in May to boost the country’s green hydrogen sector and attract much-needed FX inflows.

Other firms are interested:China’s Peric Hydrogen Technologies is exploring manufacturing electrolyzers in Egypt.

ALSO- Madbouly met with the CEO of Belgian dredging and offshore energy contractor DEME, which is working on the Orascom-Scatec-Fertiglobe green hydrogen plant currently under construction at Ain Sokhna. The project is forecast to cost USD 3 bn to implement, according to the statement. The companies are expected to make a final investment decision on the project this year.

EBRD could invest USD 40 mn in SPE Capital’s new North Africa-focused fund

The EBRD could become an LP in SPE’s new fund: The European Bank for Reconstruction and Development (EBRD) is considering making a USD 40 mn equity investment in a new USD 350 mn North Africa-focused fund set up by SPE Capital, the bank said on its website. The private equity firm’s SPE PEF III fund will invest in midcap companies in Egypt, Morocco, and Tunisia, according to the disclosure. The lender is expected to approve the investment on 28 November.

EBRD + SPE know each other well: The two partnered with Amethis last year to acquire a 90% stake in Egyptian non-banking financial services firm GlobalCorp. SPE also owns a stake in Future Pharma. Both investments were made via its SPE AIF I fund, which the EBRD invested USD 10 mn into.

ALSO- Banque Misr is in line for up to USD 50 mn in funding from the EBRD: Up to USD 40 mn for on-lending to MSMEs and USD 10 mn to support women-led small firms. The former is set for board approval on 13 December and the latter on 28 November.

Methanex invests USD 2 mn in youth employment program

Methanex invests big in youth employment initiative with UN: Our friends at Methanex Egypt are committing USD 2 mn to the second iteration of the Decent Jobs for Egypt's Young People program — a joint initiative with the UN’s International Labor Organization (ILO) — the methanol producer said in a statement (pdf) on Monday. The new partnership that will run until 2028 aims to boost youth employment in Damietta by creating 1k jobs, promoting entrepreneurship, and helping young people find work. The program “will have an increased focus on women in the labor market, the promotion of green jobs, and the inclusion of people with disabilities,” the statement reads.

Round one: The first iteration of the program, which ran from 2019 through 2023, created 725 new jobs and over 2.3k training opportunities, according to the statement.

Egrobots takes second place at regional startup awards: Egyptian agritech startup Egrobots won second prize in the Middle East and Africa finals of the Orange Social Venture Prize in Africa and the Middle East, a p ress release (pdf) said. Egrobots utilizes robotics and AI analytics to provide digital solutions for farmers to improve crop productivity, reduce resource consumption, and promote sustainable practices.

Gaza, presidential elections, parallel market got air on last night’s talk shows

Not one story dominated last night’s talk show coverage, as presenters touched on the meeting between El Sisi and French President Emmanuel Macron on Gaza, El Sisi’s inspection of an armed forces division, the upcoming presidential elections, and the soaring parallel market currency rates.

El Sisi x Macron: The meeting hosted in Cairo yesterday between President El Sisi and his French counterpart Emmanuel Macron received extensive coverage from the nation’s talking heads. Masaa DMC (watch, runtime: 10:38) and Al Hayah Al Youm (watch, runtime: 2:05) both had coverage. Al Qahera News also aired Macron’s comments to the press (watch, runtime: 16:41).

The war on Gaza:Ahmed Moussa scolded the US draft resolution in the UN Security Council that “grants Israel all powers to kill the Palestinian people” (watch, runtime: 10:15). Al Qahera News covered the Arab Group’s preparations for their own UN resolution with Arab League representative to the UN Maged Abdel Fattah (watch, runtime: 8:21). Developments in the war-stricken enclave also received coverage from Masaa DMC (watch, runtime: 4:05 | 11:19) and Al Qahera News reported that a fifth convoy of aid trucks had made it into Gaza (watch, runtime: 8:16).

Last night’s hosts analyzed El Sisi’s inspection of armed forces division: President Abdel Fattah El Sisi’s inspection of a military division was a “political message from the land of military power” at home and abroad, strategist Samir Farag said on Ala Masouleety (watch, runtime: 1:36:40). Most of last night’s hosts echoed the same message, including Masaa DMC (watch, runtime: 5:16 | 5:53) and Al Hayah Al Youm (watch, runtime: 3:38 | 3:36).

Presidential elections 2023: Hadith fi Misr hosted presidential candidate Hazem Omar to discuss his election pledges to remove taxes and fees from food and medicine, focus on productive investment, and reduce wasteful state spending. Omar also touched on national security issues and told Sherif Amer “Egypt seeks good and balanced relations with all countries, especially the Nile Basin countries…Egyptian water security is a red line and Ethiopia knows that well” (watch, runtime: 4:23 | 4:25 | 3:50).

Also on the airwaves last night: The parallel market for the USD is on fire, according toformer deputy supply minister Medhat Nafei on Hadith fi Misr, who called in to discuss the reasons for the soaring exchange rate on the parallel market for greenbacks. Nafei pointed to recent restrictions imposed by the Central Bank of Egypt on the use of credit cards and other factors as driving up the exchange rate. (watch, runtime: 3:08 | 3:21).

Emaar eyeing up state-owned New Alamein towers. Plus: PFI-owned Red Sea global looks toward Egypt

REAL ESTATE-

#1- Emaar Misr eyes New Alamein towers: Emirati real estate developer Emaar is in talks with the Egyptian government to buy high-rises along the North Coast in the New Alamein, Emaar chairman Mohamed Alabbar told Asharq Business. Alabbar didn’t disclose which towers Emaar is interested in, but an unconfirmed press report in September claimed that his Eagle Hills real estate investment firm is eyeing a takeover of state-owned developer City Edge, which has several residential and commercial tower projects in the city.

Alabbar says he’s sticking with Egypt through times good and bad: “Egypt is going through critical times, but they will end,” Alabbar told the regional news outlet. The Emaar chairman also stated that Emaar Misr is not planning to delist any of its shares from the EGX and is committed to making further investments in the country.

#2- Red Sea Global looks to Egypt as it expands outside KSA: Saudi Arabia’s global multi-project developer Red Sea Global considers Egypt “an important market” and among key markets for the company outside of Saudi, CEO John Pagano told Asharq in an interview. The company, which is wholly-owned by the Saudi Public Investment Fund, rebranded last year from Red Sea Development as it plans to “export what it does abroad…and seeks to benefit from experiences and opportunities in Europe and beyond.”

Country Garden USD bond default marks milepost in China’s real estate crisis

Country Garden defaults on USD bond: Chinese developer Country Garden has been deemed to be in default on a USD bond payment for the first time, reports Bloomberg. The developer failed to pay USD 15.4 mn of interest on a USD bond within the grace period that ended last week. China’s property market accounts for 20% of GDP and news of Country Garden’s default could send shockwaves through the national economy.

Country Garden saw this coming: The missed payment follows a warning note the developer issued earlier this month saying it expects to miss the payment. It is expected that the company will undergo the country’s largest-ever corporate debt restructuring program. (Bloomberg | Reuters | Financial Times)

Another Gulf IPO in the works: Bahrain-based asset manager Investcorp Holding is looking to raise some USD 321.5 mn from listing its investment vehicle Investcorp Capital on the ADX in a statement. The subscription period will take place between 2-9 November, with trading expected to start on 17 November. Investcorp was initially looking to raise some USD 600 mn from the listing.

EGX30	23,132	+3.4% (YTD: +58.5%)
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	10,505	+1.2% (YTD: +0.3%)
ADX	9,325	+0.6% (YTD: -8.7%)
DFM	3,841	+2.7% (YTD: +15.1%)
S&P 500	4,187	-1.4% (YTD: +9.0%)
FTSE 100	7,414	+0.3% (YTD: -0.5%)
Euro Stoxx 50	4,073	-0.2% (YTD: +7.4%)
Brent crude	USD 90.13	+2.3%
Natural gas (Nymex)	USD 3.01	+1.3%
Gold	USD 1,995	+0.4%
BTC	USD 34,661	+3.1% (YTD: +110.1%)

THE CLOSING BELL-

The EGX30 rose 3.4% at yesterday’s close on turnover of EGP 5.1 bn (125.4% above the 90-day average). Regional investors were net sellers. The index is up 58.5% YTD.

In the green: TMG Holding (+20.0%), Oriental Weavers (+13.9%) and Egypt Kuwait Holding (+10.6%).

In the red: Mopco (-6.2%), Orascom Construction (-2.0%) and AMOC (-0.7%).

My Morning Routine: Hussein Mesharafa, founder of Seasplit

Hussein Mesharafa, founder of Seasplit: Each week, My Morning Routine looks at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Hussein Mesharafa (LinkedIn), the founder of robotics company Seasplit and UAE-based offshore wind farm developer Seasplit Wind. Edited excerpts from our conversation:

My name is Hussein Mesharafa. I studied engineering and I’ve always worked as an entrepreneur. I built my business from scratch without any formal business training. My career has taken me down a winding road, starting with environmental safety and occupational health before moving on to the oil and gas industry. Now I’m investing in robotics and artificial intelligence for the offshore industry.

I founded Seasplit in 2021 after the industry started shifting towards AI, robotics, and renewables. Robots that operate in subsea oil and gas fields are limited by several constraints in terms of design and function, so I started thinking of new modules that can be fitted on to enhance their performance. These ideas eventually yielded our ADSCOM and Remora software systems. The former enables robotics to communicate subsea acoustically, while the latter enables certain types of robotics to recharge others underwater. We’ve secured an intellectual property patent and will begin trials with two prototypes in November to prove our concepts.

I was lucky enough to find a group of brilliant, young Egyptian engineers to bring these inventions to life. There is a team of six people, all in their 20s and 30s, who produced the prototypes. The project was spearheaded by engineer Aya Hallouda, the robotics and mechatronics team was led by Dr. Abdel Rahman El Maradni, and the embedded systems team was led by engineer Ibrahim Habib. These kids are self-made and self-educated and that is what makes them really innovative.

My kids and I discovered a sunken Greek vessel, with the help of a local fisherman, while vacationing in Sahel in 2019. We reported it to the Antiquities Ministry and started thinking of ways the company could help out. We’re now signing a protocol with the ministry that will see Seasplit debut its first trials on the vessel. We'll use our technology to scan the area and provide the ministry with a digital 3D model of the vessel as a gift. The model can then be showcased for recreational diving at the site.

I usually try to get eight hours of sleep. I wake up around 7:30 am and have to be out of the house by 8 am, which is when my wife kicks me out. That gives me about half an hour to do everything: brush my teeth, have breakfast, get dressed, and leave. After that, I work from wherever; in a coffee shop, at the office, or even in the car sometimes. I try to keep my work schedule as digital and flexible as possible. I read Enterprise every morning. When I banked with CIB many years ago, I asked them whether they had a business briefing, and they recommended Enterprise.

My day is governed by a few milestones, the most important of which is the three o'clock milestone: Work has to be wrapped up and I have to be home for lunch with my family. Around 7 pm, I do sports. I did triathlon training over the past 10 years but I'm taking a break now.

I'm currently reading a book about negotiation called Never Split the Difference by Chris Voss, who is a former FBI hostage negotiator. It's a really good book that explores new approaches to negotiation that underscore the importance of empathy. The premise is that whoever you're negotiating with is just another human being. My next read is I ntelligent Decarbonisation, which explores how AI can be leveraged to decarbonise the energy sector and reduce carbon emissions.

The most important self-management tip I could give is something I learned from a character called Zorba. He’s the protagonist in the movie Zorba the Greek, and he kept a black notebook in which he wrote all his musings. I don’t remember; I write. Ever since I was 19, I’ve been writing everything down in a notebook; I have hundreds of them at this point. Every evening, I spend 15 minutes jotting down my plan for the next day. I set my weekly plan on Sundays and plan for the year ahead on my annual two-month period of remote work in Sahel. If I’m worried about something, I write it down and go on about my life.

CALENDAR

OCTOBER

Late October-14 November: 3Q2023 earnings season.

24-26 October (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia.

26 October (Thursday): Daylight saving time ends.

27 October (Friday): Deadline for bidding in tender for five solar plants on north coast.

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, American University of Cairo.

31 October-1 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

Signposted to happen some time in October:

Deadline for ins. providers to link their databases with the FRA
Egyptian-Jordanian Business Council, Amman, Jordan
Gov’t expects to finalize sale of Gabal El Zeit wind plant
Saudi and Egyptian officials will meet to follow up on the project to connect the national power grids of Egypt and Saudi Arabia

NOVEMBER

November: Egypt to issue Samurai bonds.

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

3 November (Friday): Fitch to review Egypt’s sovereign credit rating.

5 November (Sunday): Senate back in session.

8 November (Wednesday): Turkish-Arab Economic Forum 2023, Istanbul.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo.

12 November (Sunday): Deadline for technical and financial offers for Misr Aluminium Company rehabilitation project (extended from 12 October)

14-15 November (Tuesday-Wednesday): Destination Africa, Royal Maxim Palace Kempinski Hotel.

14-15 November (Tuesday-Wednesday): Egypt VC Summit, Conrad Hotel.

15 November (Wednesday): Deadline for MTO to buyback Dice Sports and Casual Wear’s 46.9% Stake.

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

19-22 November (Sunday-Wednesday): Cairo ICT, Egypt International Exhibition Center.

22 November (Wednesday): Deadline to apply to FRA for credit rating license.

23 November (Thursday): Worldview Education Fair, Cairo. (Register here)

30 November-12 December (Thursday-Tuesday): COP28, Dubai.

November: Bidding deadline for 5 gold mine concessions in the Eastern Desert (TBC).

DECEMBER

December: Kenyan trade conference in Egypt.

December: Gov’t expects to finalize stake sale for military-owned fuel retailer Wataniya.

1-3 December (Friday-Sunday): Egyptian expats vote in the presidential election.

4-7 December (Monday-Thursday): Egypt Defence Expo, Egypt International Exhibition Center.

9-15 December (Saturday-Friday) :The Engineering Export Council of Egypt’strade mission to Saudi Arabia.

10-11 December (Sunday-Monday): eGlobe Expo, St. Regis Almasa Hotel, Cairo.

10-12 December (Sunday-Tuesday): Voting in presidential election takes place in Egypt.

12-13 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

12-14 December (Tuesday-Thursday): Food Africa Expo, Egypt International Exhibition Center.

20 December (Wednesday): End of sugar export ban.

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

Signposted to happen sometime in December:

Gov’t expects to finalize sale of a stake in military-owned bottled drinks company Safi
Gov’t expects to finalize sale of Zafarana wind farm

EVENTS WITH NO SET DATE

2023: The inauguration of the Grand Egyptian Museum.

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.

4Q 2023: EGX to launch a shariah-compliant index.

End of 2023: A Developments’ first phase of the Lazoghly development completed.

2024: Standard Chartered Bank to open a branch in Egypt.

25 February 2024 (Sunday): Deadline for bidders for oil and gas expansion in the 23 new regions.

Q1 2024: Opening of the new developed Pyramids Plateau in Giza.

June 2024: Gov’t expects to finalize sale of Beni Suef combined-cycle power plant.

1H 2024: Gov’t expects to finalize sale of four water desalination plants.

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

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 start operations.

2024

JANUARY

7 January (Sunday): Coptic Christmas.

25 January (Thursday): Revolution day.

APRIL

9 April (Tuesday): Eid El Fitr (TBC).

25 April (Thursday): National holiday in observance of Sinai Liberation Day (TBC).

MAY

1 May (Wednesday): National holiday in observance of Labor Day (TBC).

5 May (Sunday): Coptic Easter.

6 May (Monday): Sham El Nessim (TBC).

JUNE

15-19 June (Saturday-Wednesday): Eid El Adha (TBC).

30 June (Sunday): June 30 Revolution Day.

JULY

7 July (Sunday): National holiday in observance of Islamic New Year (TBC).

23 July (Tuesday): Revolution Day.

SEPTEMBER

2-5 September (Monday-Thursday): Egypt International Airshow, El Alamein International Airport.

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

OCTOBER

6 October (Sunday): Armed Forces Day.

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