{"id":548268,"date":"2022-08-02T03:45:02","date_gmt":"2022-08-02T03:45:02","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/08\/02\/this-morning-fdi-up-in-3q-2021-2022-us-china-relations-could-hit-a-new-low-today-after-pelosi-confirms-shes-heading-to-taiwan\/"},"modified":"2022-08-02T03:45:02","modified_gmt":"2022-08-02T03:45:02","slug":"this-morning-fdi-up-in-3q-2021-2022-us-china-relations-could-hit-a-new-low-today-after-pelosi-confirms-shes-heading-to-taiwan","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/08\/02\/this-morning-fdi-up-in-3q-2021-2022-us-china-relations-could-hit-a-new-low-today-after-pelosi-confirms-shes-heading-to-taiwan\/","title":{"rendered":"THIS MORNING: FDI up in 3Q 2021-2022 + US-China relations could hit a new low today after Pelosi confirms she\u2019s heading to Taiwan"},"content":{"rendered":"

Happy hump day, wonderful people. <\/strong>It\u2019s a busy news day today \u2014 and just a little bit tense as we warily look eastward to see what comes of US House of Representatives Speaker Nancy Pelosi\u2019s visit to Taiwan. Beijing is furious at the prospect of Pelosi visiting Taipei to meet with Taiwan\u2019s president.<\/p>\n

THE BIG STORY HERE AT HOME is Finance Minister Mohamed Maait shooting down <\/strong>the notion that we\u2019re seeking USD 15 bn in financing from the IMF. <\/strong>We have the rundown on all of this and more, below.<\/p>\n

<\/a> DATA POINT #1- Net FDI inflows to Egypt almost tripled to USD 4.1 <\/strong>bn<\/strong> in the three months ending 31 March<\/strong>, up from USD 1.4 bn in the same period last year, which corresponds to the third quarter of the state\u2019s fiscal year. That marks the strongest single quarter of FDI inflows since 2018, according to central bank data picked up by the local press<\/a> yesterday.<\/p>\n

Where is the BOP?<\/strong> We\u2019re still waiting for the central bank to publish full balance of payments figures for 3Q 2021-2022, which will give us a look at how the spillover effects from the war in Ukraine has affected the flow of goods, services and capital in and out of the country.<\/p>\n

DATA POINT #2- We\u2019re reproducing (a little) slower than we used to be: <\/strong>Egypt succeeded in lowering the birth rate to 21.2 per 1k in 2021, down from 30.2 per 1k in 2015, Education and Acting Health Minister Khaled Abdul Ghaffar said in a speech<\/a> to mark national population<\/a>day<\/a>.<\/p>\n

HAPPENING TODAY-<\/strong><\/p>\n

The Madbouly government\u2019s public consultations on its state ownership policy <\/strong>continue today<\/strong>, with a workshop for representatives from the textiles sector. Every Sunday, Tuesday, and Thursday see workshops on how privatization plans will affect specific industries. You can find more details on the schedule of the meetings here<\/a>.<\/p>\n

Egypt and the UN will today convene the first in a series of <\/strong>regional climate<\/a><\/strong>roundtables<\/a><\/strong> in the lead-up to COP27 in November<\/strong>. African climate negotiators are in Addis Ababa, Ethiopia for the next three days to discuss climate financing mechanisms. COP27 President Sameh Shoukry, Mark Carney, UN climate envoy and co-chair of the Glasgow Financial Alliance for Net Zero, and UN Deputy Secretary-General Amina Mohamed will be among those in attendance.<\/p>\n

TOMORROW-<\/strong><\/p>\n

Our friends at Chimera should find out tomorrow how much of Beltone Financial they <\/strong>have acquired <\/strong>via a mandatory tender offer. Shareholders have until Wednesday, 3 August, to subscribe to Chimera Investment\u2019s MTO for the financial services firm. The Abu Dhabi-based outfit has already locked in a 56% stake in Beltone after Orascom Financial last week agreed to sell its shares<\/a>. Chimera is offering to pay EGP 1.485 per share<\/a> for up to 90% of Beltone, valuing it at around EGP 690 mn.<\/p>\n

PMI figures are out tomorrow: <\/strong>We\u2019ll get an idea of how the private sector fared in July when S&P Global releases its latest purchasing managers\u2019 index (PMI) tomorrow. The index fell to its lowest level in two years in June<\/a> as surging inflation hit demand and output.<\/p>\n

National Dialogue board will talk about the economy:<\/strong> The board of trustees overseeing preparations for the National Dialogue will meet tomorrow to discuss the economic agenda.<\/p>\n

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THE BIG STORY ABROAD-<\/strong><\/p>\n

<\/a> BECAUSE ONE GLOBAL POLITICAL CRISIS JUST ISN\u2019T ENOUGH\u2026 <\/strong>Washington and Beijing<\/strong> appear to be on a collision course after sources confirmed yesterday that House Speaker Nancy Pelosi will travel to Taipei on Tuesday and will reportedly meet with Taiwan\u2019s president, defying warnings from China that her visit could provoke a military response. Beijing said yesterday<\/a> that its military will \u201cnot sit idly by\u201d if Pelosi visits the island and its president, Xi Jinping, last week warned Joe Biden<\/a> not to \u201cplay with fire\u201d and said that China would \u201cresolutely\u201d defend its territorial claims over Taiwan. Beijing, which claims Taiwan as part of China, has been holding military exercises<\/a> in the South China Sea this week ahead of Pelosi\u2019s trip to the region.<\/p>\n

Asian markets are down sharply this morning <\/strong>\u2014 traders aren\u2019t welcoming the news any more than is the editorial board of the Financial Times, which is calling Pelosi\u2019s visit \u201cill-conceived and ill-timed\u201d<\/a>. The salmon-coloured paper urged both sides to show restraint if the visit does prompt a furious reaction from Beijing. Markets in Europe look set to come under selling pressure at the opening bell<\/strong>, and futures also suggest Wall Street and Bay Street will open lower today.<\/p>\n

The news is everywhere in the foreign press: <\/strong>Bloomberg<\/a> | Reuters<\/a> | Financial Times<\/a> | CNBC<\/a> | WSJ<\/a> | NYT<\/a> | Washington Post<\/a>.<\/p>\n

ALSO GETTING PLAY in the global business press this morning:<\/strong> The US securities regulator has charged (pdf)<\/a> 11 people with allegedly operating a huge crypto pyramid scheme that fraudulently raised USD 300 mn from investors. Reuters<\/a>, CNBC<\/a>and the Financial Times<\/a> have more.<\/p>\n

IN NON-BUSINESS NEWS- A US drone strike has killed Ayman El Zawahiri<\/strong>, a top leader of Al Qaeda, US President Joe Biden announced overnight. The story is getting prominent billing on the front pages from the New York Times<\/a> to the Wall Street Journal<\/a> and beyond. The terrorist leader, 71, was an Egyptian national.<\/p>\n

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ICYMI #1- <\/strong>Ukraine is officially a wheat exporter again\u2026<\/strong> A vessel left the port of Odesa<\/a> for Lebanon yesterday, becoming the first ship to carry grain out of Ukraine via the Black Sea since Russia invaded the country in February. The ship is carrying 26k tons of corn and is expected to arrive at the inspection location in Turkey\u2019s territorial waters tomorrow before taking its cargo to Lebanon.<\/p>\n

\u2026but things aren\u2019t back to normal just yet: <\/strong>Ukrainian exports are still in a \u201ctrial period,\u201d with a limit of three ships a day traversing the new safe-passage corridors established as part of the country\u2019s pact with Russia and Turkey, Ukraine\u2019s Infrastructure Minister Oleksandr Kubrakov told Bloomberg TV yesterday (watch, runtime: 4:53<\/a>). \u201cIt\u2019s important for us to make it clear that this route is safe, and then we\u2019ll start increasing the number of vessels,\u201d Kubrakov said.<\/p>\n

Exports could rise to as much as 3 mn tons a month in the next four to six weeks<\/strong> if all goes well, Kubrakov added.<\/p>\n

ICYMI #2- The women\u2019s Euro 2022 wrapped on Sunday night:<\/strong> England won their first major tournament with a 2-1 victory against Germany at Wembley. The tournament hosts were drawn 1-1- with the eight-time champions heading into extra time \u2014 and got the deciding goal with 10 minutes left on the clock when substitute Chloe Kelly scored at close range. The BBC has the highlights here (watch, runtime: 3:50<\/a>).<\/p>\n

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** CORRECTION- Toyota has sold a 50% stake in the Egyptian Offshore Drilling <\/strong>Company: <\/strong>In an article<\/a> last week, we reproduced an error in the domestic press<\/a> that claimed Toyota had sold a 30% stake in the company to EGAS; the story cited Shawkat Elmaraghy, the managing director of transaction broker Prime Securities. We got on the phone with Elmaraghy yesterday, who confirmed information published in an Oil Ministry statement<\/a> yesterday that Toyota had actually sold half of the company. EGAS now owns 85% of Egyptian Offshore Drilling Company, while Ganope (South Valley Egyptian Petroleum Holding Company) holds the remaining 15%.<\/p>\n

CIRCLE YOUR CALENDAR-<\/strong><\/p>\n

We\u2019re on the lookout for a number of key macro figures <\/strong>this week and next:<\/p>\n