{"id":582768,"date":"2023-03-17T00:00:00","date_gmt":"2023-03-17T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/17\/it-was-all-about-the-fallout-of-the-svb-crash-an-israel-palestine-summit-is-happening-in-egypt-next-week\/"},"modified":"2023-03-17T00:00:00","modified_gmt":"2023-03-17T00:00:00","slug":"it-was-all-about-the-fallout-of-the-svb-crash-an-israel-palestine-summit-is-happening-in-egypt-next-week","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/17\/it-was-all-about-the-fallout-of-the-svb-crash-an-israel-palestine-summit-is-happening-in-egypt-next-week\/","title":{"rendered":"It was all about the fallout of the SVB crash + an Israel-Palestine summit is happening in Egypt next week"},"content":{"rendered":"

Good morning, wonderful people<\/span>, <\/span>and welcome to the final Enterprise Weekend Edition <\/span>before Ramadan. W<\/span>e\u2019ve<\/span> lined up a few essential pre-Ramadan reads for you \u2014 including a guide to the biggest mosalsalat of the month this year and a recommendation for an early Iftar outing (that, dare we say, might rival your grandma\u2019s cooking.) <\/span><\/p>\n

ALSO- Happy St. Patrick\u2019s Day to those of you celebrating the occasion today<\/span>, and happy <\/span>birthday to The Colonel. We\u2019re all thinking of you, Papa, today as every day.<\/span><\/p>\n

The Enterprise Weekend Edition comes out each Friday at 9am CLT.<\/span> We\u2019ll be back on Sunday at 6am with EnterpriseAM. Until then: Enjoy the weekend.<\/span><\/p>\n

LAST WEEK IN 3 MINS-<\/span><\/p>\n

<\/span> Last week\u2019s news was dominated by the fallout from the <\/span>Silicon Valley Bank<\/a><\/span>crash<\/a><\/span>, <\/span>from how local startups were affected to the global sell-off that sent the EGX to its biggest single-day loss in three years.<\/span><\/p>\n

ON PLANET STARTUP- As many as 46 local startups and two VC firms (one of them <\/span>global) <\/span>have been said<\/a><\/span> to have been banked by US-based SVB, <\/span>which was shuttered by regulators after a frantic two-day bank run<\/span>.<\/span> Two of Acasia Ventures\u2019 10 portfolio firms across the MEA region were affected, while fintech fund Nclude\u2019s Basil Moftah told us that one of the VC\u2019s eight portfolio companies banked with SVB.<\/span><\/p>\n

THINGS HAVE (SO FAR) BEEN CONTAINED- At least five local and regional startups <\/span>were<\/a><\/span>able to regain access<\/a><\/span>to their deposits at<\/span> the <\/span>collapsed bank, <\/span>Enterprise learned. Others have kept their deposits put, as US bank regulators continue to control the bank after they moved to <\/span>guarantee<\/a><\/span> all deposits held at SVB in a bid to prevent contagion and a wider crisis in the banking sector. Others moved their deposits to neo-banks or digital-only banks of the likes of <\/span>Mercury Bank<\/a><\/span>, several sources told us, with one neo-bank, <\/span>Tribal Credit<\/a><\/span>, <\/span>launching an initiative offering accounts to SVB-exposed businesses in MENA, Mexico and the US. <\/span><\/p>\n

IN EGX LAND- <\/span>The global banking turmoil saw the EGX30 <\/span>hit its biggest single-day drop<\/a><\/span>in three years on Wednesday. <\/span>The benchmark index slipped 4.2% during trading, its worst day since 18 March 2020 at the height of the covid-triggered market panic, and<\/span> fell 11%<\/span> over the course of the week, almost erasing all of its 2023 gains.<\/span><\/p>\n

What gives? The EGX was hit by a wave of selling in a wider risk-off <\/span>as investors in Europe gave in to jitters about the global banking system. A selling wave that hit bank stocks in the US (triggered by SVB) spread to Europe, where already-embattled Credit Suisse lost nearly 30% of its value in a single day. That, in turn, prompted investors to sell down positions in big-name European financial institutions. Credit Suisse shares <\/span>roared back at the opening bell today<\/a><\/span>, rising more than 30% before settling around +<\/span>20% at dispatch time today<\/span>, after Swiss National Bank said it would loan as much as USD 54 bn to Credit Suisse.<\/span><\/p>\n

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MOMENTUM ON PRIVATIZATION-<\/span><\/p>\n

Mark April on your calendars:<\/span> The Madbouly government <\/span>will take to market<\/a><\/span> some of the <\/span>state-owned companies earmarked for privatization in its rebooted offering program in April. <\/span><\/p>\n

More than 32 stake sales?<\/span> The government could add another eight names \u2014 including banks <\/span>\u2014 to its list of companies destined for privatization, Finance Minister Mohamed Maait signaled last week. Prime Minister Moustafa Madbouly said last month that the government plans to partially privatize 32 companies by March 2024 via public offerings on the EGX, sales to strategic investors, or a mix of both. <\/span><\/p>\n

A roadshow for military firms has begun:<\/span> CI Capital <\/span>has reportedly started<\/a><\/span> marketing <\/span>military-owned firms Safi and Wataniya to strategic investors, and is looking to sell at 10% of each company.<\/span><\/p>\n

Our friends at the SFE have taken possession of Misr Ins. Holding.<\/span>Two of the company\u2019s subsidiaries \u2014 Misr Life Ins. and Misr Ins. \u2014 had already been named among the government\u2019s list of <\/span>32 companies<\/a><\/span> up for stake sales to strategic investors, via the EGX, or a mix of both.<\/span><\/p>\n

ADQ may be eyeing a piece of Delta Sugar Company:<\/span> Abu Dhabi sovereign wealth fund <\/span>ADQ is <\/span>reportedly in early talks<\/a><\/span> with the government to snap up a 10-15% stake in the state-owned <\/span>Delta Sugar Company<\/a><\/span>. ADQ would buy shares owned by an existing shareholder. <\/span><\/p>\n

IT WAS ALSO A BIG WEEK FOR INVESTMENT IN LOGISTICS-<\/span><\/p>\n

Our friends at <\/span>Hassan Allam Utilities<\/span>formed a joint venture<\/a><\/span> \u2014 dubbed Yanmu \u2014 with Kuwaiti <\/span>warehousing and industrial developer <\/span>Agility <\/span>to set up and operate <\/span>logistics parks<\/span> in Egypt. <\/span><\/p>\n

New container terminals in Sokhna and Dekheila:<\/span>The Madbouly government <\/span>signed two<\/a><\/span>agreements<\/a><\/span> worth USD 1.6 bn with two international consortiums to develop new container terminals at the Ain Sokhna and Dekheila ports. <\/span><\/p>\n

ON THE ECON SIDE OF THINGS- <\/span><\/p>\n

Egypt\u2019s economy <\/span>grew 3.9% y-o-y<\/a><\/span> in 2Q FY 2022-2023 <\/span>despite ongoing global economic <\/span>challenges and geopolitical uncertainty<\/span>, according to preliminary data from the Planning Ministry. <\/span><\/p>\n

More FX saving measures:<\/span>Egypt will withdraw from the multinational <\/span>Grains Trade<\/a><\/span>Convention<\/a><\/span> (GTC) in less than four months. The government will <\/span>save<\/a><\/span>USD 58k a year<\/a><\/span> on the move, which officials said makes sense because it was felt that no benefits have been garnered from membership. <\/span><\/p>\n

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WHAT\u2019S HAPPENING NEXT WEEK-<\/span><\/p>\n

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<\/span> Will the CBE call an unscheduled emergency meeting? <\/span>Several <\/span>analysts are <\/span>expecting the Central Bank of Egypt (CBE) to deliver a huge interest rate hike \u2014 possibly as much as 300 bps \u2014 in response to last week\u2019s <\/span>red-hot inflation data<\/a><\/span>, with Naeem Brokerage even expecting it to call an \u201cemergency meeting\u201d ahead of its decision. The monetary policy meeting is currently scheduled for Thursday, 30 March. <\/span><\/p>\n

We could be getting our largest-ever export subsidy program next week<\/span>, according to <\/span>reports<\/a><\/span>in the local press quoting Trade and Industry Minister Ahmed Samir. The government had <\/span>wrapped the fifth phase<\/a><\/span> of the program in December, which saw the Export Development Fund disburse some EGP 2.5 bn, putting the total of overdue subsidy payments at EGP 42.5 bn.<\/span><\/p>\n

Israel-Palestine summit to take place in Sharm El Sheikh on Sunday:<\/span> Palestinian and <\/span>Israeli officials are meeting in Sharm El Sheikh on Sunday as part of a five-party meeting with representatives from Egypt, Jordan and the US, Palestinian Authority Civil Affairs Minister Hussein El Sheikh said in a <\/span>tweet<\/a><\/span>. An agreement made during a first round of talks in Jordan last month failed to calm escalating violence in the West Bank.<\/span><\/p>\n

The Finance Ministry will host the <\/span>Public-Private Partnerships MENA Forum<\/a><\/span> on 19-20 <\/span>March at the Nile Ritz-Carlton, according to a <\/span>Finance Ministry statement<\/a><\/span>.<\/span><\/p>\n

Check out our full business calendar on the web<\/a><\/span> for a comprehensive listing of upcoming news events, national holidays and news triggers.<\/span><\/p>\n

? YOUR MOST CLICKED LINKS-<\/span><\/p>\n