Good morning, friends. We have a big issue for you this morning — and it’s just the prelude to what we think could be an even bigger day ahead.
Two stories everyone will want to keep an eye on, regardless of the industry in which you work:
#1- FROM THE DEPT. OF GOOD NEWS- Get ready for Madbouly’s big privatization presser today: Prime Minister Moustafa Madbouly is today expected to unveil the list of 20+ state-owned companies in which the government plans to offer stakes to strategic investors and / or on the EGX this year. Look out for a press conference after the weekly cabinet meeting.
EGX chief Rami Dokany is feeling positive about the plans: “I think the [state offering program] will play a big role in making things happen,” El Dokany told the National.
“This is a cashflow situation…once the cash flow has been resolved, we’re going to see more interest and more inflows happening… Any policy is only as good as its execution plan … but I think the government is quite serious about it.”
We have plenty of questions, but the big three to watch out for:
- How many of the companies are marked for IPO, how many are listed companies in which the state will sell down positions, and how many for sale to strategic investors?
- How many of the names are “new” and of those, how “high quality” are they?
- Is the state willing to sell 51% or more of an attractive company to a strategic investor, which by definition will want management control and the ability to consolidate the results of whatever they’re buying?
Our take: Selldowns of state positions in already-listed companies as well as direct stake sales to strategics can happen anytime. But don’t expect IPOs before May / June at the absolute earliest — September is a more likely timeframe.
#2- FROM THE DEPT. OF LET’S SEE… After 13 years, people might be about to start using Bing: Microsoft will today unveil new versions of its search engine Bing and Edge web browser integrated with OpenAI's powerful ChatGPT artificial intelligence software. It has scheduled a press event starting 8pm CLT / 1pm EST. The changes will reportedly see the company introduce a more advanced version of ChatGPT into its search ecosystem.
Everyone is talking about this in the business press: Having tried out the tech, WSJ is firmly on board the Microsoft hype train: “Search will never be the same,” gushes a front-page headline. The Financial Times, Bloomberg and CNBC all have front-page stories on the unveil.
The big question: Can we use this in Egypt? OpenAI is yet to make ChatGPT available to Egyptian users (and though you can make an account with a VPN, you’ll need a mobile number in a supported country to complete your registration). We’re hoping to get an indication today on whether this will change when the technology is embedded into Microsoft’s native browser and when it will roll out to other countries.
MEANWHILE- Google is also seeding its first GPT rival / AI search helper to the market, but has yet to announce plans to make it available to more than a small handful of beta testers. You can read more about its Bard in a blog post here.
#1- Non-oil exports rose more than 50% in 2022. That’s according to figures released yesterday by the cabinet, which put the total value of non-oil exports at USD 35.6 bn last year. That’s up 51% from USD 23.5 bn in 2021.
Driving growth: Chemicals and building materials, followed by textiles, engineering products (think: all of the stuff Samsung and friends assemble here) and agricultural products, according to the statement.
#2- The value of Egypt’s automotive imports plunged by nearly 70% y-o-y in November 2022 to USD 97.5 mn, down from USD 324.3 mn a year earlier, according to Capmas data picked up by Youm7.
REMEMBER– Car sales nosedived in 2022 on the back of global supply constraints and Egyptian import restrictions (thank you, FX crunch). Industry data out last week showed that total vehicle sales fell more than a third during the year. Sales are expected to pick up later this year after the central bank revoked import restrictions brought in last spring to conserve hard currency.
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Latest round of Libya talks continue in Cairo: Two days of UN-sponsored talks with the 5+5 Libyan Joint Military Commission — which brings together representatives from Libya’s two rival governments — kicked off in Cairo yesterday, according to state news agency MENA. This round of talks will address the removal of mercenaries and foreign forces from the country.
Inflation: The CBE and Capmas are expected to publish inflation data for January on Thursday.
The damage? The median projection in a Reuters poll of analysts is 23.75%, up 21.3% in December. This would be the highest rate since November 2018. Five analysts expect core inflation, which strips out volatile items such as food, to rise to 26.6% in January from 24.4% a month earlier, the highest since October 2018.
President Abdel Fattah El Sisi will be in Dubai next week to attend the World Government Summit, which runs 13-15 February. Twenty heads of state will be in town for the Davos-like gathering, which will see policymakers from around the world discuss global trends, according to Emirati state news agency WAM.
Petro-show next week: Oil and gas industry figures from Egypt and the region will congregate at the Egypt International Exhibition Center for the Egypt Petroleum Show (Egyps) starting next Monday. The three-day conference runs 13-15 February.
THE BIG STORIES ABROAD-
The latest on the earthquake in Turkey and Syria continues to dominate the global conversation: The death toll from the earthquake that hit southern Turkey on Monday is nearing 8k, making it one of the deadliest natural disasters of the 21st century. The figure is expected to rise further in the coming days as rescue workers continue to search for survivors amid freezing winter conditions. (AP | Reuters | NYT | Washington Post | Bloomberg | FT | WSJ)
Egypt sends aid: President El Sisi offered his condolences during phone calls with Turkish leader Recep Tayyip Erdogan and Syrian President Bashar Al Assad yesterday, according to Ittihadiya. Five planes of emergency military aid are en route to the area to assist in recovery efforts, the state-run MENA news agency reported.
Two Egyptians among the dead: Two Egyptians were among victims of the earthquake, the Foreign Ministry said yesterday. The ministry didn’t disclose their identities or any other details.
Leading the conversation in the business press this morning:
US rates could rise higher than expected: The Federal Reserve might continue to go strong on interest rates on the back of strong US labor data, central bank chair Jerome Powell said yesterday. “The reality is if we continue to get strong labor market reports or higher inflation reports, it might be the case that we have to raise rates more” than is forecast, Powell said in statements to the Economic Club of Washington. He forecast a “significant” drop in inflation this year, yet warned that the Federal Reserve is seeing only “the very early stages of disinflation.” (FT | Bloomberg | WSJ | AP | Reuters | CNBC)
COME TO OUR NEXT ENTERPRISE FORUM-
We’re excited to unveil our next C-level event: The Enterprise Exports & FDI Forum, where we will take a deep dive into two of the most critical topics affecting our community.
Exports and foreign direct investment (FDI) have never been more important to our economy — or our businesses — than in the wake of the float of the EGP. We think we have a once-in-a-lifetime chance to build an export-led economy that makes us a magnet for FDI and all the benefits that will come with it for our nation.
Want to join the conversation? Drop us a line on email@example.com.
CIRCLE YOUR CALENDAR-
Hey, agri-tech startups: The European Bank for Reconstruction and Development (EBRD) has launched its AgVenture challenge, offering startups operating in the agri-tech sector the chance to snag up up to EUR 80k worth of advisory services and additional grants worth EUR 10k. Eligible startups have until 1 March to apply.
Who’s eligible? Startups that have been operating in the agri-tech sector for less than 5 years, have an annual turnover of less than EUR 1 mn, and who operate primarily in countries where EBRD has a presence.
Fuel price announcement when? We’re still waiting to hear what the government plans to do with fuel prices this quarter. Its fuel pricing committee was supposed to meet at the beginning of January to set prices for 1Q. The government has increased prices at the pump by 23-28% since April 2021, and decided on a rare fuel oil price hike last July.
Expect prices to rise: The government has committed to changing local fuel prices in line with movements in the global markets under the USD 3 bn loan agreement with the IMF.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, and urban development, as well as social infrastructure such as health and education.
In today’s issue: Contractors are coming out in opposition to requirements that they join the government’s e-invoicing system, saying the sector has unique challenges that make it difficult to comply with the system’s requirements.