{"id":585739,"date":"2023-04-28T00:00:00","date_gmt":"2023-04-28T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/04\/28\/today-have-you-turned-your-clocks-forward-yet-sp-global-downgrades-our-debt-outlook-to-negative\/"},"modified":"2023-04-28T00:00:00","modified_gmt":"2023-04-28T00:00:00","slug":"today-have-you-turned-your-clocks-forward-yet-sp-global-downgrades-our-debt-outlook-to-negative","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/04\/28\/today-have-you-turned-your-clocks-forward-yet-sp-global-downgrades-our-debt-outlook-to-negative\/","title":{"rendered":"TODAY: Have you turned your clocks forward yet? + S&P Global downgrades our debt outlook to negative"},"content":{"rendered":"

Good morning, friends, and welcome to the first day of the return of daylight saving time.<\/span>Don\u2019t forget to turn your clocks forward today as the country makes a collective jump into a longer day and shorter evening \u2014 much to our dismay. Daylight savings will remain in effect until 11:59pm on Thursday, 26 October, Cabinet said in <\/span>a statement<\/a><\/span>.<\/span><\/p>\n

The good news is:<\/span>We\u2019re getting yet another long weekend next week after Prime Minister Moustafa Madbouly made Thursday, 4 May a holiday for the public and private sector to mark Labor Day, which falls on 1 May. Banks will also be closed next Thursday, the Central Bank of Egypt said in a statement yesterday. <\/span><\/p>\n

Enterprise Weekend comes out each Friday at 9:00am 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

With Eid prompting another shortened workweek, the newsflow managed to give us a bit<\/span> of a breather <\/span>\u2014 with just a few less-than-ideal updates on the macro front from S&P Global and some good news for our tourism sector. And there were also some key developments in the world of diplomacy. Let\u2019s dive in.<\/span><\/p>\n

<\/span>THE BIG STORY OF THE WEEK- S&P Global <\/span>downgraded<\/a><\/span> our debt outlook to negative<\/span> due to concerns over the progress of economic reforms and whether they are sufficient enough to help us cover our external funding needs, <\/span>stabilize the exchange rate and attract foreign currency inflows. It also expects the EGP <\/span>to end FY 2022-23 having declined 53% y-o-y. <\/span>Despite the downgrade, the ratings agency held the country\u2019s rating at B and said it expects most of our funding needs to be met by GCC investments, portfolio flows, and fresh borrowing. <\/span><\/p>\n

BUDGET WATCH- We\u2019re also <\/span>upping social safety spending<\/a><\/span>in FY 2023-24<\/span>, with the<\/span> Madbouly government planning to raise allocations by 50% y-o-y to EGP 529.7 bn as<\/span> it looks to offset the impact of soaring inflation on household budgets. A bulk of the money will go towards food and fuel subsidies.<\/span><\/p>\n

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ON THE TOURISM FRONT- Tourism players got a boost after the Madbouly government<\/span> expanded its subsidized loan program<\/span> to include the sector. The government <\/span>is now offering<\/a><\/span> EGP 10 bn worth of loans at a subsidized 11% interest rate to tourism players, pushing the total value of its subsidized loan program to EGP 160 bn.<\/span><\/p>\n

This coincided with news that our hotel occupancy rose 20-25% y-o-y in 1Q 2023<\/span> thanks<\/span> to tourist inflows from new markets and the <\/span>depreciation of the EGP<\/a><\/span>. <\/span><\/p>\n

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Egyptian officials \u2014 including President Abdel Fattah El Sisi \u2014 were also busy trying to<\/span> put out political fires in Sudan.<\/span> El Sisi held talks with leaders of the <\/span>UAE<\/a><\/span>, the <\/span>UK<\/a><\/span> and<\/span> the <\/span>European Council<\/a><\/span> to discuss how to bring the fighting to an end. <\/span><\/p>\n

We managed to evacuate our troops and citizens:<\/span>Over 5.3k Egyptian citizens were<\/span>evacuated<\/a><\/span> from Khartoum as of yesterday<\/span>, while some 177 Egyptian troops <\/span>returned safely<\/a><\/span> to Cairo after being airlifted from Sudan in three separate flights. Twenty-seven Egyptian soldiers detained by the RSF at the Meroe air base earlier this month have also been freed following mediation by the UAE. <\/span><\/p>\n

But not before we experienced a tragic loss: <\/span>An assistant administrative attache in Egypt\u2019s<\/span> embassy in Khartoum, Muhammad El Gharrawi, was killed during the clashes between different military factions in the Sudanese capital. El Gharrawi was en route to the embassy to oversee the evacuation of Egyptians when he was killed.<\/span><\/p>\n

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

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<\/span>It\u2019s going to be the start of a new month \u2014 which means we\u2019re looking at a few new key<\/span> figures. <\/span><\/p>\n

S&P Global should publish Egypt\u2019s PMI this Tuesday, 3 May.<\/span> Remember: We saw<\/span>continuing contraction<\/a><\/span> in non-oil private sector activity last month due to high inflation, depreciation of the EGP, and import restrictions suppressing demand in Egypt. <\/span><\/p>\n

The central bank should also release April\u2019s foreign reserves figures<\/span> next week.<\/span><\/p>\n

Expect more updates on the state privatization program: <\/span>We expect some progress on the<\/span> privatization program following the lull in Ramadan and the Eid break, especially after <\/span>indications<\/a><\/span> last week that progress on stake sales will pick up.<\/span><\/p>\n

Could we also see another EGP devaluation?<\/span> Jefferies International\u2019s Alia Moubayed is <\/span>expecting <\/span>greater exchange-rate flexibility, which she says could work alongside recent rate hikes to boost investor confidence in the local market.<\/span><\/p>\n

The House of Representatives will reconvene on Sunday<\/span> for the first time since Eid break. <\/span><\/p>\n

There are also a few key deadlines coming up: <\/span><\/p>\n