Good morning, wonderful people. It’s a good-news, bad-news kind of morning as we all continue adapting to our new FX and inflationary realities.

GOOD NEWS- Officials are reportedly considering a delay in collecting taxes owed by domestic investors on capital gains they made trading on the EGX last year. We also have plenty of M&A and investment news for you this morning to keep things interesting.

AND- Foreign reserves inched up again, rising to USD 34.2 bn in January from USD 34 bn the previous month, according to central bank data out yesterday. Reserves have been on a gentle upward slope the past five months and are now up by more than USD 1 bn since the end of August. Reserves fell 20% last spring on the back of the war in Ukraine and tightening financial conditions globally.

BAD NEWS- The Finance Ministry has no intention of scrapping its plan to hike wage taxes, we’re told. The Finance Ministry last month proposed legislative amendments that would create a new 27.5% personal income tax rate on salaries of more than EGP 800k a year — a change that won’t be revised by policymakers, our sources tell us. Annual earnings over EGP 400k are currently taxed at a top rate of 25%.

Oh, and the monthly PMI reading? It was worse in January — hardly a surprise as we all adapt to our new FX reality following last month’s devaluation.

^^ We have the rundown on all of this and more in this morning’s news well, below.

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HAPPENING TODAY-

It’s a busy Monday in the Senate:

• The Financial and Economic Affairs Committee will review a study calling for the expansion of private and public freezones;
• Supply Minister Ali El Moselhi will brief the Industrial Committee on strategic commodities reserves and the ministry’s preparations for Ramadan;
• The Housing Committee will discuss the Housing Ministry's electricity rationing plan;
• The Education Committee will review the government's digital transformation policy;
• The Agriculture Committee will debate hurdles facing the poultry industry;
• The Culture Committee will go over policies to promote religious tourism;
• The Senate will continue debating a report on family violence.

REMINDER- The House is still on break, with MPs due to reconvene on Sunday, 12 February.

Operation Save Lebanon: Egyptian officials are attending an international meeting in Paris called by France to discuss how to end a political impasse in crisis-hit Lebanon, AFP reports, citing statements by the French Foreign Ministry’s spokesperson. Officials from Saudi Arabia, Qatar and the US will also be in attendance.

It’s the last day of the Cairo International Book Fair: Today is your last chance to attend this year’s fair at the Egypt International Exhibition Center.

THE BIG STORY ABROAD-

There’s a presidential election going on in one of our closest EastMed allies: Former Cypriot FM Nikos Christodoulides will face off against leftist-backed candidate and career diplomat Andreas Mavroyiannis in runoff elections on 12 February, according to Reuters. Christodoulides grabbed 32% of yesterday’s first-round vote while Mavroyiannis unexpectedly came second at 29.6%.

MEANWHILE- The global business press continues to be transfixed by the Chinese balloon shot down by the US on Saturday: Reuters | AP | Bloomberg | FT | WSJ | NYT | Washington Post.

AND- Former Pakistani president Pervez Musharraf dies in Dubai: Pervez Musharraf, the army general who seized power in Pakistan’s 1999 military coup and remained president until 2008, died on Sunday at a hospital in Dubai aged 79, following a prolonged illness and years in self-imposed exile, CNN reports.

CLOSER TO HOME- Egypt and Qatar held their first political consultations since patching things up in 2021. Senior officials from the countries’ foreign ministries discussed regional and international developments, including the situation in Palestine, during talks in Cairo. (Egypt Foreign Ministry statement | Qatar News Agency)

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For the iSheep ultras: Speculation is mounting that Apple could be gearing up to launch a new ultra-premium iPhone model carrying a higher spec than the Pro Max. Bloomberg’s Mark Gurman writes that the company has discussed debuting an “Ultra” version of the iPhone above both Pro models in time for the launch of the iPhone 16 in 2024. “It’s unclear how that top-of-the-line model would be different, but it will probably offer further camera improvements, a faster chip and perhaps an even larger display. There also may be more future-forward features, such as finally dropping the charging port,” Gurman wrote in his weekly Power On newsletter.

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COME TO OUR NEXT ENTERPRISE FORUM-

We’re excited to unveil our next C-level event: The Enterprise FDI + Exports 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 events@enterprisemea.com.

ICYMI-

Missed this week’s Inside Industry? In our weekly vertical exploring all things industry and manufacturing, we looked at the fertilizer industry in Egypt, which is broadly expected to have another strong year in 2023 — albeit with a slight slowdown as market dynamics shift.

CIRCLE YOUR CALENDAR-

Palestine talks in Cairo: Hamas leader Ismail Haniyeh is expected to fly into Cairo this week to hold talks with Egyptian intelligence chief Abbas Kamel and other security officials, a Hamas spokesperson said in a statement picked up by the Jerusalem Post. The secretary of Palestinian Islamic Jihad was in Cairo yesterday for talks, the Israeli newspaper reported. The invite came days after Kamel visited Ramallah for talks with Palestinian President Mahmoud Abbas and other officials in a bid to end the recent violence in the West Bank and Jerusalem.

Inflation: The CBE and Capmas will publish inflation data for January in a few days.

Unis go back this week: The second semester of the 2022-2023 academic year begins for public universities on 11 February.

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.

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

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed.

In today’s issue: We look at how edtech could be the perfect fix to address challenges in the Egyptian education sector in the second part of this Blackboard two-parter. Last week, we examined the prospect of the current edtech adoption in Egypt and why British companies want in.