Good morning, friends, and happy hump day. We have a really packed issue for you today, so let’s jump right in:

THE BIG STORY EVERYWHERE THIS MORNING- The global market sell-off looks like it is getting serious. Global equities suffered their heaviest one-day losses since June 2020 yesterday. Investors are worried that some of the world’s largest economies are heading towards recession at the same time as when central banks are raising interest rates to curb soaring inflation. The FTSE gauge of global stocks fell 3% yesterday, hitting its lowest level since December 2020 as ominous economic data from China and Germany intensified the sell-off triggered last week by the Federal Reserve’s 50-bps rate hike. The Financial Times has more.

The EGX30 fell at a slower pace yesterday than the FTSE’s global gauge, losing 1.8% by the closing bell. The index is now down 8.7% year-to-date.

Other emerging market indexes also took a hit yesterday: Emerging-market stocks hit their lowest level in nearly two years yesterday, and have fallen 29% from their peak in February 2021.

US stocks picked up where they left off last week: US equities fell yesterday to their lowest level in 13 months as last week’s broad-based sell-off continued. The S&P 500 tumbled 3.2% during trading. Tech stocks continued to see the heaviest losses though, with the Nasdaq closing 4.3% in the red.

What are folks worried about? Risk of a global recession is increasing due to an oncoming economic downturn in Europe, covid-19 lockdowns in China, and rising bond yields in the US which are putting pressure on emerging markets, Institute for International Finance (IFF) chief economist Robin Brooks said yesterday.

None of this is good for emerging markets: The greenback hit its highest level in almost 20 years yesterday as investors respond to both rising yields and the darkening clouds by turning to safe haven assets, Reuters reports. The USD index, which measures the greenback against a basket of currencies, has risen almost 9% this year, its highest since late 2002, the newswire says.

And other asset classes are also suffering:

BTC dropped to its lowest level in almost a year, Reuters reported. The world’s largest digital currency fell below USD 30k yesterday for the first time since July 2021. It has tumbled 13% so far in May and is down nearly 33% year-to-date..

Oil also fell yesterday, with Brent crude losing almost 6% as traders worried about China’s lockdowns and the possibility of a global recession.

Same again today? Asian shares are down sharply in heavy trading so far today, although shares in Shanghai have clawed back losses and were mounting a rally at dispatch time. Futures suggest major European benchmarks will face selling pressure at the opening bell later this morning — but imply that Wall Street could see the Nasdaq, Dow and S&P open in the green.

YOUR COP27 WARNING of the morning: The world is on track to break the 1.5°C warming threshold within five years because of record greenhouse gas levels, the FT writes, suggesting we’re nearing a critical point in the battle to not cook ourselves off planet. The salmon color paper warns that with “scant policy action” on net zero targets coming out of COP26 last year, there has now been “little progress toward improved national targets ahead of the next big summit in the Egyptian resort of Sharm El Sheikh later this year.”

HAPPENING TODAY-

IT’S INFLATION DAY: Figures for April are due out today. Consumer prices accelerated at their fastest rate in almost three years in March as the spillover effects from the war in Ukraine fed through to the Egyptian economy. With commodity prices still feeling the effects of the conflict, the devaluation of the EGP, and the traditional Ramadan inflationary hit, we’re not expecting the figures to have been any better in April. We’ll have the rundown for you in tomorrow’s EnterpriseAM.

WATCH THIS SPACE- Where’s that policy statement? We’re still waiting for Prime Minister Moustafa Madbouly to unveil his government’s plans to boost private sector involvement in the economy. Cabinet said Saturday that the PM would hold a presser “at the beginning of next week” to announce new details on how the government intends to attract more FDI and private-sector investment in Egypt, but so far there has been radio silence.

MEANWHILE- Yesterday was budget day: Monday might not have been the perfect day to deliver a major policy announcement, given that all eyes were fully trained on the House of Representatives, where Finance Minister Mohamed Maait was unveiling the details of the draft FY 2022-2023 budget. We have the key details of the budget in the news well, below.

Whether or not we get word of the state’s privatization plans this week, we now have a rough idea of what it wants to achieve in the coming fiscal year: The draft budget shows that the government wants to raise EGP 6 bn from selling shares in state-owned companies in the coming fiscal year. Which companies and how many shares will be up for grabs, we still don’t know. But the government has sought to convey its seriousness about privatizing state assets in recent days, pledging to resume its privatization program in September and offer shares in several military-owned firms by the end of the year.

ALSO TODAY- The EBRD’s annual meeting and business forum get underway in Marrakech and will wrap up on Thursday. Among the day-one highlights:

• EBRD’s regional economic prospects will be released at 12 noon CLT.
• A panel discussion headlined “Egypt: A development story of a green and resilient economy” will feature International Cooperation Minister Rania Mashat, EBRD SEMED chief Heike Harmgart, and SCZone chairman Yehia Zaki.

The full program is online here.

EBRD also said yesterday that it will lend up to USD 4.8 mn to Intro Sustainable Resources (Intro-SR) and Intro Solar to back Egypt’s green transition. EBRD has now invested more than EUR 8.5 bn in 144 across Egypt since it started working here in 2012.

IN OTHER INTERNATIONAL NEWS-

Vladimir Putin’s Victory Day speech is front page news in the global press this morning. Western media note that the Russian president’s address gave little away about his government’s intentions in Ukraine as the conflict enters its 11th week. Reuters, the AP, the New York Times and the Washington Post have the story.

Meanwhile, the EU is seeing mixed results as its presses for a ban on imports of Russian oil. Negotiations between the EU and Hungary, which has refused to agree to the ban, have apparently made “some progress,” though the bloc dropped proposals to prevent European shipping companies from carrying Russian crude due to pushback from Malta and Greece. The Financial Times and Bloomberg have more.

And Germany may not be able to look to Qatar as it searches for alternative sources of natural gas: Talks between the two countries have reportedly hit a snag after Berlin expressed reluctance to agree to Qatar’s demand for a minimum 20-year supply agreement, Reuters says.

SOUND SMART- Meet the Arab backers of Elon’s bid for Twitter. Alwaleed bin Talal is kicking in a stake worth USD 1.9 bn, Qatar’s SWF has committed USD 375 mn, and the UAE’s Binance (the world’s largest crypto exchange) has pledged USD 500 mn.

FOOD FOR THOUGHT- Does having power (at a job, in life — not of the electric power variety) cause brain damage? The Atlantic writes that a new study out of Canada suggests that accumulating power sees some leaders “lose mental capacities — most notably for reading other people — that were essential to their rise.”

For our fellow media nerds: The Pulitzer prizes were announced yesterday, with the New York Times, Washington Post and Reuters being among those to take home big gongs. You can check out the full list here and explore more here.

CIRCLE YOUR CALENDAR-

A huge US “GreenTech business mission” is inbound next week. More than 40 US companies will be in Egypt during 15-17 May to kick the tires on green investment and potential business partnerships in sectors ranging from energy to healthcare, agriculture, aviation, construction and water resource management. The high-level delegation will meet with members of the business community and senior government officials.

The Central Bank of Egypt will meet to review interest rates on Thursday, 19 May.

The PSA world squash championships get underway in Cairo this Friday, 13 May. The men’s and women’s finals will be played on 22 May. There is USD 550k at stake for each of the men’s and women’s championships, making this the biggest purse on record for a squash tourney. The CIB-sponsored championships will play out at SODIC’s Club S Allegria and at the National Museum of Egyptian Civilisation

The last of this season’s earnings releases will drop by 31 May after the Financial Regulatory Authority granted listed companies a two-week deadline extension.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: Egypt recently announced plans to set up a local carbon trading market that would allow institutions to issue carbon credits in exchange for implementing carbon sequestration projects. While details about the platform are so far scant, Enterprise got a sense of what the market could look like, Egypt’s previous history with carbon trading, and the challenges the country faces to roll out a local carbon market.