{"id":613912,"date":"2024-01-23T00:00:00","date_gmt":"2024-01-23T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/01\/23\/shoukry-in-brussels\/"},"modified":"2024-01-23T00:00:00","modified_gmt":"2024-01-23T00:00:00","slug":"shoukry-in-brussels","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/01\/23\/shoukry-in-brussels\/","title":{"rendered":"Shoukry in Brussels"},"content":{"rendered":"

Good morning, wonderful people. <\/strong>There\u2019s good news today for football fans, as Egypt has secured a place in Afcon\u2019s round of 16 after a thrilling 2-2 draw with Cape Verde last night. And there\u2019s also plenty of exciting economy, business, and finance news that we\u2019ve got for you today.<\/p>\n

We\u2019ve got a pretty jam-packed issue today<\/strong>, so let\u2019s jump into it.<\/p>\n

PSA- Just two more work days to go until the long weekend: <\/strong>In case no one\u2019s told you, the public and private sectors<\/a>, along with the banks<\/a> will be off this Thursday in observance of Police Day and the 25 January revolution.<\/p>\n

** EnterpriseAM Egypt will also take a break from your inbox this Thursday, <\/strong>but we will be back bright and early on Sunday with all the business and finance news from the long weekend.<\/p>\n

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THE BIG STORY HERE AT HOME- <\/p>\n

<\/a> Standard Chartered receives license to set up shop in Egypt:<\/strong> The Central Bank ofEgypt (CBE) has approved British multinational lender Standard Chartered\u2019s request for a license to set up a branch in the country, according to a decision published in the Official Gazette yesterday. The lender, which received its full banking license<\/a> from the CBE in November 2022, was operating in the country as a representative office \u2014 a limited form of business establishment. That makes 37 banks registered (pdf)<\/a> with the CBE.<\/p>\n

This is very welcome. <\/strong>Yes, we have a lot of banks. Yes, we\u2019ve mumbled something about the need for consolidation in the past. But, the entry to Egypt of a new foreign institution is a positive signal to other investors (foreign and domestic alike) that it is worth committing capital here. And StanChart is no spendthrift: The bank has proven over the years entirely willing to cut non-core markets and was reported last year to be trimming<\/a> as many as 100 jobs across its footprint as it looked to cut c. USD 1.3 bn in expenses. <\/p>\n

WATCH THIS SPACE- <\/p>\n

What will the CBE\u2019s next move be? Possibly an<\/strong> increase in the reserve requirement for banks<\/strong>, pushing it to 24%, from its current 18% in efforts to reduce the amount of cash in circulation and tamp down inflation, a number of analysts and bankers have expected in a survey conducted by Asharq Business<\/a>. The last time the central bank did this was in September 2022, when the reserve ratio climbed to 18%<\/a>, from 14%. <\/p>\n

The CBE could play all its cards: <\/strong>Some of the analysts expect the move to be accompanied by an interest rate hike, either during the bank\u2019s next Monetary Policy Committee meeting \u2014 scheduled for Thursday, 1 February \u2014 or during an unscheduled meeting. <\/p>\n

** Brush up on monetary policy<\/strong>: We ran an explainer<\/a> on the measures a central bank can take to control the money supply in a country and how this relates to inflation.<\/p>\n

HAPPENING TODAY- <\/p>\n

<\/a> #1- The EU-Egypt Association Council will meet in Brussels: <\/strong>Foreign Minister Sameh Shoukry will lead the Egyptian delegation for the meeting<\/a>, which is chaired by the EU foreign policy chief Josep Borrell. The talks are set to discuss cooperation under the Egypt-EU partnership priorities 2021-2027 framework and address \u201chuman rights, security, counter-terrorism, and migration \u2013 as well as cooperation in economic and social issues \u2013 ranging from investments to environment and energy,\u201d the EU statement adds.<\/p>\n

We might be hoping for something more though: <\/strong>The EU has been rumored to be putting together a plan to mobilize as much as EUR 10 bn of investment<\/a> alongside debt relief measures to help stabilize the economy and curb migration across the Mediterranean. However, it\u2019s still unclear how much of this figure is already in the pipeline from the private sector and how much can be understood as \u201cnew\u201d money.<\/p>\n

Shoukry has already had a few busy days in Brussels: <\/strong>Shoukry landed in Brussels<\/a> on Sunday and has already joined his Saudi and Jordanian counterparts along with Arab League Secretary-General Ahmed Aboul Gheit to meet face-to-face with EU member states to tell them how relentless deliberate Israeli targeting of civilians and attacks on infrastructure are putting \u201cthe entire region\u201d at risk, according to a Foreign Ministry statement<\/a>. <\/p>\n

<\/a> #2- Putin to attend 4th Dabaa power plant ceremony virtually:<\/strong> Russian President Vladimir Putin is joining President Abdel Fattah El Sisi today via a video call to attend the concrete pouring ceremony for the fourth reactor of the Dabaa Nuclear Power Plant<\/a> being built by the Russian state nuclear firm Rosatom, according to Ahram Online<\/a>.<\/p>\n

CORRECTION- We thought he was coming in person: <\/strong>We reported yesterday<\/a> that the Russian president will be landing in Cairo in person to attend the ceremony, as the Kremlin spokesperson\u2019s statement we cited was not clear on how or when Putin will take part in the ceremony. The story on our website has been amended.<\/p>\n

CYBERSECURITY-<\/p>\n

<\/a> BEBA reminds us why its important to take cybersecurity seriously: <\/strong>Enterprise joined cybersecurity and ins. experts at the Conrad Hotel yesterday morning for the British Egyptian Business Association\u2019s (BEBA) panel discussion on how to mitigate growing digital risks in Egypt.<\/p>\n

The key takeaways: <\/strong>The experts agreed that the nation\u2019s digital transformation comes with agreater risk of cyber attacks. \u201cWe have more startups, more e-wallets, more online banking and shopping. So the customer\u2019s life is now online,\u201d Vodafone Egypt Cybersecurity and Tech Strategy Head Samah Khamis said, adding that it\u2019s no longer about \u201cif\u201d an attack happens but rather \u201cwhen\u201d it will happen. They also pointed to the need to increase ins. awareness in Egypt and the need for authorities to do more on the regulatory front of it all \u2014 requiring companies to implement cybersecurity policies<\/p>\n

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The roundup of news and trends that move your markets and shape corporate agendas delivered straight to your inbox.<\/p>\n

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DATA POINT-<\/p>\n

<\/a> #1- Egypt\u2019s digital exports <\/strong>brought<\/strong> in USD 6.2 bn in 2023, <\/strong>up 26.5% y-o-y from 2022, according to a Communications Ministry statement<\/a>. The figure includes outsourcing exports \u2014 think call centers and human resource centers \u2014 which accounted for over half of the digital exports in 2023, standing at USD 3.7 bn, up 54% y-o-y, the statement added.<\/p>\n

#2- Egyptians brought 3.8 tons of gold from abroad in the eight months<\/strong> following the government\u2019s decision in May to allow imports of up to 150 grams of gold<\/a> without any customs charges, Customs Authority head El Shahat Ghatwary told Asharq Business<\/a>. That\u2019s up 15.2% from November<\/a>.<\/p>\n

ICYMI:<\/strong> Prime Minister Moustafa Madbouly decided in November to extend zero-customs exemption for gold imports until 10 May 2024.<\/p>\n

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WAR WATCH- <\/p>\n

The EU is cranking up pressure on Israel to accept a two-state solution,<\/strong> urging itsmember states to enforce \u201cconsequences\u201d if Prime Minister Benjamin Netenyahu continues to oppose Palestinian statehood, the Financial Times<\/a> reported, citing a document an EU document being circulated throughout the bloc.<\/p>\n

Egypt debunked Israeli weapons smuggling allegations <\/strong>by senior Israeli officials in a statement<\/a> yesterday by State Information Service head Diaa Rashwan. Rashwan lambasted allegations that weapons are being smuggled in aid deliveries into the enclave as \u201cutter nonsense\u201d and pointed towards the state\u2019s efforts to clamp down on cross-border smuggling. \u201cThe true essence of Israel's claims is to justify its continuation of the process of collective punishment, killing, and starvation of more than two million Palestinians inside the Gaza Strip, which it has practiced for 17 years,\u201d the statement adds.<\/p>\n

Israeli forces storm Khan Younis hospital, begin siege of another, and arrest<\/strong> medical staff <\/strong>during another deadly day of fighting and strikes, which residents told Reuters<\/a> was the most intense the south of the enclave has seen since the war began.<\/p>\n

MARKET WATCH- <\/p>\n

Persisten<\/strong>t<\/strong>ly low gas prices in Europe may mean that our LNG export ambitions<\/strong> may not be as profitable as hoped: <\/strong>Gas prices have remained low in Europe despite ongoing unrest in the Red Sea<\/a>, thanks to record high gas reserves in Europe and a reliance on renewable energy, Bloomberg<\/a> wrote yesterday. Low gas prices in Europe would spell out smaller export receipts for Egypt as the country looks to export more liquefied natural gas (LNG). LNG exports \u2014 which hold potential as a much-needed source of FX for cash-strapped Egypt, but have been on pause for over half a year \u2014 are set to resume<\/a> this month with a target of 1 bn cubic feet of gas per day. <\/p>\n

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THE BIG STORIES ABROAD-<\/p>\n

#1- US and British forces launched another round of attacks last night against Houthi <\/strong>targets in Yemen<\/strong>, hitting what they said were the Tehran-backed group\u2019s missile capabilities as well as underground storage sites. The two struck eight sites, with unspecified support from Australia, Bahrain, Canada, and the Netherlands. <\/p>\n

It\u2019s the second major strike <\/strong>aimed at stopping Houthi attacks on Red Sea shipping. The story is leading the front pages of the Wall Street Journal<\/a> and Reuters<\/a>. It\u2019s also getting plenty of ink from others including the Financial Times<\/a> and the New York Times<\/a>.<\/p>\n

#2- It\u2019s a big day in US politics as voters in New Hampshire head to the polls in a primary <\/strong>that the media are almost uniformly positioning as challenger Nikki Haley\u2019s last chance to stop Donald Trump from cruising to the Republican nomination. Trump foe Ron Desantis has already dropped out of the race.<\/p>\n

Uh, Enterprise? Isn\u2019t this the first primary? <\/strong>It is, for the GOP, at least<\/a>. Haley is hoping to upset Trump, who has a commanding lead in the polls<\/a>, and US and UK media seem convinced that it\u2019s all over for the former UN ambassador and South Carolina governor if she doesn\u2019t beat him tonight. <\/p>\n

Need more? <\/strong>Head over to Politico (here<\/a> and here<\/a>), the Associated Press<\/a>, New York Times<\/a>, or Financial Times<\/a>. <\/p>\n

ALSO worth knowing about this morning:<\/strong><\/p>\n