Good morning, wonderful people, and welcome to the first day of February. It’s another macro-heavy kind of news day here at home, with plenty on the state of our economy — and more speculation about the government’s privatization plans.

DRIVING THE CONVERSATION here at home this morning: The Madbouly government is teasing a big announcement on its privatization plans. Cabinet will “soon” hold a press conference to announce the details of the state-owned firms it plans to offer to strategic investors and on the EGX, Prime Minister Moustafa Madbouly said at a meeting yesterday.

Key words: “Strategic investors.” Madbouly noted that “a part of the offering will be on the EGX, and another part will be to strategic investors.” As Lamees El Hadidi noted on the airwaves last night, these words — and the makeup of yesterday’s meeting, which included Sovereign Fund of Egypt officials but no EGX reps — suggest that stake sales to strategic investors could be the first order of the day. We have more in Last Night’s Talk Shows, below.

When will we know more? Madbouly remained tightlipped on when the announcement would be made, but had earlier this week said to expect it in two weeks’ time.

A quick take: The talk in recent days about asset sales is very welcome. With no IPOs now in the market, cabinet should have a bias toward stake sales to strategics, retaining modest stakes that they could monetize in a later IPO after the new strategic partner improves corporate and financial performance at the asset. If the investment bankers get mandates soon, there will be a post-Ramadan window lasting until early June in which to go to market with IPOs before the summer slowdown. The next window would then be in September.

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EGX WRAP- The benchmark EGX30 fell for the second day in a row yesterday, ending the trading session 3.4% in the red. Foreign and institutional investors were net sellers on a high turnover of EGP 2 bn. CIB — the largest component of the index — lost 5.7%. The benchmark index has fallen 5.5% since Monday.

Only six companies saw gains yesterday, with Telecom Egypt leading the pack closing 5.4% up. Alexandria Containers was the worst performer, losing 7.9%.

Don’t panic, says EGX board member Rania Yacoub — this is a natural wave of profit-taking. The EGX30 was up nearly 20% YTD by the close of trading on Monday. “It’s natural for institutional investors in particular to close out profitable positions” Yacoub told us. She says yesterday’s dip is “nothing to worry about so long as it’s part of an upward trend and doesn’t coincide with negative announcements on macro indicators.”

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EGP WATCH- The EGP slipped 0.6% against the greenback yesterday to 30.23.

DATA POINT- Good news on NFAs: Egypt’s net foreign assets (NFAs) position improved for the second consecutive month, standing at a negative EGP 494.3 bn in December. That’s an EGP 47.3 bn narrowing of the gap from EGP 541.5 bn the month before, Reuters reports citing central bank data. The newswire puts the improvement down to the October devaluation. “Changes in the amount of NFAs represent net transactions of the banking system with the foreign sector, including those of the central bank,” Reuters says, citing the CBE.

DATA POINT- Good as gold: Gold purchases in Egypt surged 83% y-o-y in 2022 as Egyptians flocked to the metal amid the FX crunch, according to the World Gold Council’s full-year report. Egyptian investors bought 4.4 tons of gold during the year as the precious metal became the go-to asset to hedge against the falling EGP.

The Central Bank of Egypt is MENA’s biggest goldbug: The CBE bought 47 tons of gold during the year, above second-placed Qatar which purchased 37 tons. Both are dwarfed by Turkey’s central bank, which was the world’s biggest gold buyer among central banks at 148 tons, Bloomberg notes.

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It’s the start of a new month: Here are the key news triggers over the coming weeks.

• Interest rates: The Central Bank of Egypt will hold its policy meeting this Thursday. Most of the analysts we talked to last week expect the central bank to raise interest rates by 100-200 bps.
• PMI: S&P Global will publish January’s PMI on Sunday, 5 February.
• Foreign reserves: The central bank will release January’s foreign reserves figures next week.
• Inflation: The CBE and Capmas will publish inflation data for January the week after next.

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MORNING MUST READ-

Companies recognize the benefits of reaching net zero: More than 90% of 300 global companies surveyed by HSBC believe reaching net-zero emissions will play a significant role in growing their businesses. The bank’s survey (pdf) shows that more than half see it as “fundamentally important” while only 2% don’t consider it important at all.

More companies are deploying a chunk of their capex into going green: Some 31% of energy companies surveyed are already investing more than 10% of their capex into transitioning to net zero and almost half plan to do so in the coming 2-3 years.

SIGN OF THE TIMES– Uber Egypt has hiked its fares again. In Cairo, the UberX base rate is now up to EGP 12.00 from EGP 9.00, while the minimum fare has risen to EGP 20 from EGP 15. In Alexandria, the base rate has risen to EGP 10.00 from EGP 8.70, while the minimum fare is up to EGP 18.00 from EGP 13.00. The price increases come to “ease the pressures that drivers are facing,” the company said in an email to customers.

PSA #1- Fancy a stopover in Saudi? Travelers transiting through Saudi Arabia can now apply online through Saudia Airlines and Flynas for a stopover visa that allows them to stay in the country for up to four days, according to a tweet by the Saudi Foreign Affairs Ministry. The stopover visa permits travelers to make the Umrah pilgrimage and is valid for three months from the date of issuance.

PSA #2- Covid-era Ramadan measures dropped: Taraweeh prayers will no longer be limited to 30 minutes, and the practice of I’tikaf — seclusion inside mosques — will be allowed for the first time in three years this Ramadan, Religious Endowments Minister Mohamed Mokhtar Gomaa said (watch, runtime: 29:31.) The taraweeh prayer limit and I’tikaf ban were part of measures introduced to curb the spread of covid-19.

We have 49 days left until the first day of Ramadan, which will likely start on Thursday, 23 March.

HAPPENING TODAY-

Italian lawmakers in town: An Italian parliamentary delegation kicks off a two-day visit to Cairo today for a “constructive dialogue” with Egyptian officials, including meetings with counterparts at the Senate and House, and with Foreign Minister Sameh Shoukry. The delegation is led by Stefania Craxi, who heads the Italian senate’s defense and foreign affairs committee. “Our visit to Cairo aims to conduct a new constructive dialogue with Egyptian MPs and senators amid many political and economic challenges facing the Mediterranean region,” Craxi told Italy’s NOVA news agency, according to Ahram Online. The case of Italian student Guilio Regeni, who was killed in Egypt in 2016, is also set to be addressed during the talks, she said.

OPEC+ is meeting remotely today and delegates are expecting the committee to keep oil output unchanged as global demand picks up.

CIRCLE YOUR CALENDAR-

The House of Representatives will reconvene on Sunday, 12 February, having adjourned yesterday after three days of debate. We have all the details on yesterday’s votes in our Legislation Watch section, below.

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: What is the state doing to support the real estate sector through economic turbulence?