{"id":608515,"date":"2023-10-22T00:00:00","date_gmt":"2023-10-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/22\/egypt-israel-relations-at-boiling-point-as-tensions-over-gaza-war-escalate\/"},"modified":"2023-10-22T00:00:00","modified_gmt":"2023-10-22T00:00:00","slug":"egypt-israel-relations-at-boiling-point-as-tensions-over-gaza-war-escalate","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/10\/22\/egypt-israel-relations-at-boiling-point-as-tensions-over-gaza-war-escalate\/","title":{"rendered":"Egypt, Israel relations at \u201cboiling point\u201d as tensions over Gaza war escalate"},"content":{"rendered":"

Good morning, friends. <\/strong>Before we get underway this morning, a kind reminder that we have at least one thing to look forward to this week: An extra hour of sleep. Daylight saving time comes to an end this Thursday, meaning we\u2019ll all have to turn our clocks back an hour.<\/p>\n

The conflict in Gaza continues to dominate the attention of everyone in Egypt, the region <\/strong>and the world:<\/strong> The slight sense of optimism we got yesterday with the delivery of 20 (yes, 20) trucks of aid to Gaza has been replaced with dread as Israel says it will step up the pace of its indiscriminate bombing campaign from today.<\/strong><\/p>\n

For context:<\/strong> The Israeli military boasted one week into the war that it had dropped almost 1k<\/a>bombs per day<\/a> on the tiny enclave.<\/p>\n

<\/a> DIPLOMACY- An insight into the state of Egypt-Israel relations:<\/strong> Israel\u2019s push to resettle Palestinians in Egypt isn\u2019t doing wonders for bilateral relations, with the Associated Press<\/a> describing tensions between the two countries as \u201creaching the boiling point.\u201d <\/p>\n

Egypt-Israel ties at risk:<\/strong> Former Israeli defense official Amos Gilad said that Israel is risking blowing up its relations with Egypt over the matter, and said that Prime Minister Benjamin Netanyahu needs to speak with the leaders of Egypt and Jordan and publicly disavow the idea of resettling Palestinians in either country. <\/p>\n

But the cheerleading continues in many quarters of the west for what would amount to ethnic cleansing. <\/strong>How else to describe a podcast (Planet Money\u2019s The Indicator, no less) bluntly asking how to turn our current economic challenges into a lever to force us to let Palestinians into Sinai? (Listen, runtime: 9:00<\/a>)<\/p>\n

ENERGY SECURITY- A reminder of how the conflict is disrupting our energy sector:<\/strong>There are signs that the closure of the Tamar gas field and the suspension of the EMG gas pipeline between Israel and Egypt is now disrupting our LNG exports. A tanker waiting to load up on the liquefied fuel at the Idku LNG terminal was forced to head instead to Algeria due to the reduced production, Reuters<\/a> reports, citing shipping data and analysts.<\/p>\n

Remember:<\/strong> Egypt\u2019s gas imports from Israel have fallen by around 20%<\/a> since Chevron was told to halt production at the Tamar gas field in the Mediterranean. The US company also halted gas flows through the EMG pipeline and instead began shipping gas via the Arab Gas Pipeline which runs via Jordan.<\/p>\n

And at least one major energy investment is looking shaky: <\/strong>Adnoc and BP\u2019s USD 2 bn bid for Israel\u2019s NewMed Energy may be on ice thanks to the conflict, Bloomberg<\/a> reports.<\/p>\n

THE GLOBAL ECONOMY- Geopolitics is the new boogeyman for the glo<\/strong>bal financi<\/strong>al <\/strong>system<\/strong>, according to the US Federal Reserve, which warned on Friday that the eruption of the conflicts in Gaza and Ukraine could trigger \u201cbroad adverse spillovers to global markets.\u201d \u201cEscalation of these conflicts or a worsening in other geopolitical tensions could reduce economic activity and boost inflation worldwide, particularly in the event of prolonged disruptions to supply chains and interruptions in production,\u201d the central bank wrote in its biannual Financial Stability Report (pdf)<\/a>.<\/p>\n

^^ Head down to the news well for the updates on the weekend\u2019s events<\/strong>, including yesterday\u2019s summit in the new capital and the delivery of food and medical aid to the besieged enclave.<\/p>\n

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Really, Cairo?<\/strong> As if we didn\u2019t have enough going on right now, yesterday we were treated to the sight of one of the city's tallest buildings, the abandoned hotel in Zamalek (aka: Zamalek\u2019s Tower of Shame<\/a>), going up in flames. Thankfully, the emergency services got to it before it got out of control but not before it blanketed nearby residents with thick plumes of smoke.<\/p>\n

WATCH THIS SPACE-<\/strong><\/p>\n

<\/a> #1- Has TMG bought an additional stake in a portfolio of iconic, <\/strong>state-owned hotels? <\/strong>A<\/a>sharq<\/a>Business<\/a> is out with a report saying the EGX-listed real estate and hotels giant has upped its stake in the portfolio to 51%. Icon Investments, a TMG unit, led a group of investors back in July in taking a 37% stake in a USD 700 mn<\/a> transaction. The portfolio includes properties including the Cairo Marriott, Marriott Mena House, the Winter Palace, and the Cecil. We\u2019ll have more on the story tomorrow.<\/p>\n

<\/a> #2- Amoun Pharma might soon no longer be Amoun Pharma: <\/strong>Abu Dhabi sovereign wealth fund ADQ is planning to merge Amoun Pharma and its other pharma companies to create what would be one of the largest companies of its kind in the region, Bloomberg<\/a> reports, citing sources it says are in the know. The fund is planning to combine Amoun with Emirati firm Pharmax Pharma, Switzerland\u2019s Acino, and Turkey\u2019s Birgi Mefar Group into a single company within the next 12-18 months ahead of a potential IPO, the people said.<\/p>\n

<\/a> #3- EGP for TRY next year?<\/strong> Egypt and Turkey will likely finalize an agreement to use local currencies for bilateral trade in 2024, according to Al Shorouk<\/a>, which cites a single anonymous government source. The countries\u2019 trade ministries have come to an agreement over the use of the EGP and TRY for trade and the central banks are now in discussions, which according to the source will likely wrap up next year.<\/p>\n

The two countries could use local currencies to settle 25-30% of bilateral trade<\/strong> following an agreement, an Egyptian government official said<\/a> earlier this month. Central bank officials began their discussions last week.<\/p>\n

Dedollarization:<\/strong> Egypt is looking to reduce its exposure to the greenback, and since last year has held talks with a number of countries including China, Russia and India about reducing its use in bilateral trade.<\/p>\n

#4- Netflix to hike prices in Om El Donia?<\/strong> The streaming service just raised prices on some of its subscription plans for users in the US, UK and France following strong subscriber growth, according to Reuters<\/a>.<\/p>\n

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

This is what we\u2019re spending the <\/strong>USD 500 mn in Panda bond<\/a><\/strong> proceeds on<\/strong>, according to the Asian Infrastructure Investment Bank<\/a>, which covered more than half of the issuance:<\/p>\n