PM — 27.70 ➡ 32.20 ➡ 29.76

Good afternoon, friends, and welcome to a roller-coaster of a day.

THE BIG NEWS THIS AFTERNOON- There are indications that we found this afternoon a market-clearing rate for the USD.

And the magic number was … EGP 32.20 / USD. Today’s interbank auction saw the EGP fall in steady increments from an opening rate of 27.70 to the greenback to 32.20 / USD at around 1 pm CLT. In less than an hour, the EGP rallied back — to 31.85, then 31.75, 30.85, 30.05…

The EGP closed the day at 29.76 to the greenback, according to the Central Bank of Egypt’s website. That means the EGP had lost as much as 16.4% at its peak before clawing back losses to close down 7.7% for the day.

Where will it settle? We’re probably in the right ballpark.

• HSBC said in a research note out earlier this week that it sees it in the 30-35 band, with 32.50 “as a tentative midpoint” (up from its previous midpoint of 26);
• Goldman Sachs thinks we’re looking at EGP 33-35 to the greenback, as we reported this morning;
• BNP Paribas said in a note to clients this afternoon that it is “reiterating its view” that the EGP will hit 37 in 1Q 2023.

Why is there room for a bit of optimism? The fall from 32.20 to the greenback came as trading quickly accelerated in the interbank market — the key word here is “trading.” The end of the EGP’s slide against the USD suggests that some folks holding USD were willing to start selling them for local currency starting at 32.20. This implies that a measure of liquidity may have been restored to the FX market.

Where did the money come from? Bankers have been mum on the subject so far today. Pundits will be looking for signs of how much of the liquidity came from savers selling USD holdings as they tried to time the top of the market (and flip over into high-yield instruments at the National Bank of Egypt, Banque Misr, and CIB) and how much was injected by state banks.

SMART POLICY? As we noted on Monday, an unconfirmed report suggested that the NBE and Banque Misr had lined up some USD 705 mn in hard currency facilities from global lenders including African Development Bank, Mashreq Bank, and other lends from the GCC and Asia.

How much changed hands today? The Central Bank of Egypt does not release liquidity figures that would give us a sense of how many greenbacks were bought and sold today. We’re hoping that top banking execs will hit the talk show circuit tonight to give us all more color. And the big things to look for will be January figures for both reserves and remittances.

What should we look for tomorrow? Some healthy volatility in the rate, for certain.

Does a market-clearing rate mean that 29.70 is the “new value” of the USD here in Omm El Donia? No. The central bank has promised the IMF that it has moved to a “durably flexible” exchange rate — a commitment the IMF highlighted at a press conference earlier this week. That means we’ve committed to seeing the EGP move in response to market forces. There’s a chance (as Goldman Sachs has noted) that we’ve overshot the fair value of the EGP. And in the absence of new inflows of hot money, foreign investment in public equities, FDI, or exports? The EGP could head back the other way.

In other words: Gone are the days when there was a “rate” for the USD / EGP exchange rate. In a flexible regime, the EGP is worth whatever it is worth on the day a transaction closes. That’s going to take all of us some getting used to — it’s also the hallmark of a real economy.

THE BIG STORY ABROAD

Leading the conversation in the international business press this afternoon: A system outage from the US’ Federal Aviation Administration, which affected the administration’s ability to communicate safety information to pilots, led all domestic flights in the US to be temporarily grounded. The outage has affected at least 1,200 flights. The story is on the front pages of CNBC, Reuters, the Financial Times, and the Wall Street Journal

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• All the details on the give and take of our USD 3 bn IMF loan package: The IMF yesterday published a package of documents on our USD 3 bn loan agreement, shedding light on the disbursal timeline as well as separate external financing it expects us to receive on the back of the program — and the long laundry list of policy changes that we’ve agreed to in return for the helping hand.
• Inflation hits new high on weaker EGP: Figures released yesterday by state statistics agency Capmas showed annual urban inflation jumped to 21.3% in December, up from 18.7% the month before, driven by surging food costs.
• ADQ-owned Abu Dhabi Ports Company is in talks with the Madbouly government to take over the development and management of the Suez Port under a usufruct agreement.

???? CIRCLE YOUR CALENDAR-

The national dialogue will kick off on Saturday, 14 January.

Davos 2023: The usual suspects will descend on the Swiss town for the annual meetings of the World Economic Forum on 16-20 January.

Egyptian expats have until 14 March to import cars for cheap: The expat car import scheme will conclude on Tuesday, 14 March with no wiggle room for extensions or exemptions, Finance Minister Mohamed Maait said during a presser yesterday, according to a Finance Ministry statement. The deadline was initially set for 15 February but was pushed after the ministry introduced amendments to make it easier for Egyptians abroad to take advantage of the scheme. Some 34k accounts have been created on the system for the scheme, though it’s not clear how many of those have submitted applications so far (the number of applications stood at just 4k toward the end of December.)

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

☀️ TOMORROW’S WEATHER- We’re in for a mostly sunny day tomorrow, with temperatures expected to hit 19°C during the day before falling to a low of 10°C at night, our favorite weather app tells us.

ENTERPRISE IS LOOKING FOR SMART, TALENTED PEOPLE of all backgrounds to help us build some very cool new things. Enterprise — the essential daily read on what’s happening in business, finance, economics and policy in Egypt and the wider region — is looking for writers, reporters, and editors to help us build new publications. We're looking for gifted story-tellers from all walks of life and across all professions, as long as they show a keen interest in learning to write about the stories, topics, businesses, and ideas moving markets. Egyptian and foreign nationals alike are welcome to apply.

NEVER WORKED IN A NEWSROOM BEFORE? We have the Enterprise Business Writing Development Program. The four-month program will see full-time, paid participants take part in workshops and lectures from veteran business journalists, while also working on and filing stories that will run in our publications. Those who successfully complete the program will then be offered full-time positions on staff.

During the program you will learn:

• The key news stories and trends shaping business and the economy in Egypt and the region, across various sectors;
• Business and finance for non-finance people: Whether it's industry jargon, key concepts, or simply how to read a an income statement;
• How to construct an Enterprise story: From idea formulation down to the structure, style, and tone of writing;
• The ins and outs of a newsroom, including how to develop sources that will give you the key insights needed to tell a complete story;
• How to communicate these stories with the confidence and language of an insider.

Apply directly to jobs@enterprisemea.com and mention “writing development program” in your subject line.

With World Cup revenues in its pockets, Qatar has its eyes on buying more football clubs: Qatar Sports Investments (QSI) is reportedly looking to buy “at least” one football club in the English Premier League and is in conversations with top clubs including Manchester United, Liverpool, and Tottenham Hotspur, Bloomberg reports, citing sources close to the matter. Spokespeople from the three clubs either declined to comment on or denied the talks. Manchester United and Liverpool have each said recently that they are willing to look at potential stake or complete sales of the club. Tottenham has not publicly expressed interest in a potential sale, although the Athletic recently quoted a source it says has knowledge of the matter as saying the English National Investment Company, which owns the club, has been “building [Tottenham] to sell it” at the right price.

It wouldn’t be Qatar’s (or the GCC’s) first foray into the world of European football: Qatar currently owns Paris Saint-Germain and owns 21.67% stake in Portugal’s SC Braga. Saudi Arabia and the UAE have also entered the space, with its sovereign wealth fund, the Public Investment Fund, purchasing Newcastle United, while City Football Group — co-founded by Mansour bin Zayed Al Nahyan and Khaldoon Al Mubarak — owns Manchester City.

A return to full strength for the ozone layer could be seen within decades, as efforts to eliminate the use of destructive chlorofluorocarbons are helping the upper atmosphere holes on their way to recovery, the UN said on Monday, citing scientists. Despite some rogue production of the chemicals, if international policies adopted under the Montreal Protocol remain in place, the ozone is on track to fully recover to 1980 status by 2066 — which could help reduce global warming by 0.5°C. The story got ink in several international outlets: New York Times | Deutsche Welle | Washington Post | Wall Street Journal | Guardian.

Covid trips up China in the semiconductor race to power: The world’s second largest economy is pausing its costly investment-led and subsidy-heavy approach to building a chip industry that rivals the US as it grapples with the financial pressure of renewed covid-19 outbreaks, Bloomberg reports, citing people familiar with the matter. Beijing’s top officials are considering alternative ways to support local chip manufacturers in lieu of the subsidies that have encouraged corruption and generated weak outcomes, looking into options like reducing the prices of semiconductor materials or redirecting funds from other areas to the chip industry.

This is a stark change of plans: In December, China was cooking up a USD 143 bn support package, composed primarily of subsidies and tax credits aimed at encouraging semiconductor production and research, with plans to roll out the program by 1Q 2023, Reuters reported.

REMEMBER- The US is a top competitor and has been imposing several policies and restrictions (here, here, and here) on the exports of semiconductors and chip-making materials to China in a bid to retain its technological supremacy in the semiconductor war. The chip industry is a geopolitical hot button, playing a critical role in both military systems and the data-processing capacities that fuel our modern global economic system.

???? ON THE TUBE TONIGHT-
(all times CLT)

Netflix’s All Quiet on the Western Front adaptation does Erich Maria Remarque's classic anti-war novel justice. The movie, which is the the first German-language adaptation of the book opens with a young soldier, Heinrich Gerber, being killed in the trenches; his uniform is returned to Germany and is washed and repaired to be reused. In a later scene, actor Felix Kammerer in his first screen role plays Paul, a German teenage boy who enthusiastically enlists with his friends along with his friends in 1917 towards the end World War I. The boys clutch their new uniforms eager to march into Paris, the exhilaration cut short when Paul discovers a name tag left in the collar of his uniform: Heinrich Gerber. The boys are in for a rude awakening when they arrive in Paris to discover chaos and gore the harsh realities of war.

⚽ Spanish Super Cup: Saudi Arabia is hosting the Spanish Super Cup from 11-15 January. The four most successful Spanish clubs from last season's domestic competitions: Real Madrid, Barcelona, Valencia, and Real Betis will take part in the mini four-team tournament. Tonight current league champions Real Madrid will play Valencia at 9pm.

As for Omm El Donia: The El Dakhlia v National Bank match kicked off at 2:45pm, but so far neither team has scored any goals. Smouha is also currently on the pitch with El Gaish that also began at 2:45pm. The score is currently 1-0, as we dispatch.

Carabao Cup quarter-finals: Nottingham Forest face Wolverhampton at 9:45pm and

Southampton play Manchester City at 10pm.

Messi makes his post-World Cup victory comeback: Paris Saint-Germain play Angers in Ligue 1 at 10pm.

Coppa Italia: Milan faces off against Torino at 10pm.

???? 2023 World Men’s Handball Championship: The 28th edition of championship, hosted by Poland and Sweden, kicks off today, with 32 teams battling it out to become world champions. The teams are divided into eight groups. Egypt is in Group G, along with Morocco, the US and Croatia. The top three teams from each group qualify for the next round. France and Poland face off in the opening match tonight at 10pm. You can catch the live broadcast of the matches on the International Handball Federation YouTube channel.

???? OUT AND ABOUT-
(all times CLT)

Don’t miss a performance of Verdi’s classic opera, Rigoletto, at the Cairo Opera House from 11-13 January in the Main Hall at 8pm.

Art Corner Zamalek is hosting Cairo is My Address: The event features Selections from Cairo, an exhibition of paintings by artist Reda Khalil that offer glimpses of the city from 1990 to 2023. The exhibition, which starts at 6pm, is running through 31 January.

Saudi artist Nour Hisham Al-Saif’s exhibition I Forgot to Grow Up is running at the Nile Gallery starting tonight at 6pm through 25 January.

???? UNDER THE LAMPLIGHT-

Financial Times journalist Gillian Tett argues that anthropology can help us better understand modern business in Anthro-Vision. Having earned her PhD in Anthropology from Cambridge University studying wedding rituals in Soviet-era Tajikistan in 1990, Tett is well qualified to look at the meaning behind behaviors in the work space through an anthropological lens. She observes financiers gathered at a European Securitization Forum and notices that they use rituals (exchanging business cards and jokes and playing golf) to “reinforce their social ties and worldview” and to bond much like people did in Tajikistan through elaborate wedding ceremonies. She reveals insights, undetectable through surveys and computer generated metrics that could help professionals gain some “lateral vision” to see “what is hidden in plain sight” and help them stop making avoidable mistakes.

The EGX30 rose 0.4% at today’s close on turnover of EGP 4.4 bn (171% above the 90-day average). Local investors were net sellers. The index is up 6.4% YTD.

In the green: Orascom Construction (+8.2%), Cleopatra Hospitals (+7.4%) and e-Finance (+7.3%).

In the red: CIB (-3.9%), Palm Hills Development (-3.5%) and Alexandria Containers and Cargo Handling (-2.6%).

Goodbye to the GOAT: 2022 saw the retirement of several of the world’s Greatest Of All Time (GOAT) athletes. Roger Federer left tennis in September, following Serena Williams’ departure in September after competing in the US Open. Sebastian Vettel spun doughnuts on his way out after the November Abu Dhabi Grand Prix. Shaun White got out of competitive snowboarding. And Tom Brady left the NFL early in the year — only to return a few months later. And Argentinian star Lionel Messi stirred rumors of retiring from international football after leading Argentina to a legendary World Cup victory at the end of last year, but signaled he will retire before the next World Cup.

Athletes that earn the GOAT title are like walking gods to their fans. Their posters adorn walls and their names alone can sell out matches. As audiences, we often mark our lives by their sporting triumphs and losses and feel genuine sadness when they hang up their boots/rackets/bats.

GOATs seemed to jump on the Great Resignation trend in 2022: Much fuss was made over an apparent mass exit from the workforce in 2021, as some workers reevaluated their priorities post-pandemic. Close to 47 mn individuals are believed to have voluntarily left their jobs in the US in 2021, according to the US Bureau of Labor Statistics. Could it be that following periods of lockdown and time away from their sports and the limelight, athletes also found the desire to follow new paths in their lives, away from the field? Did they postpone their retirements in the pandemic years so they could go out on a high note when the sporting world reopened? That, or it’s just pure coincidence.

Sport isn’t known for its lengthy careers: The typical retirement age for a professional athlete is between 28 and 32, writes Gary Brickley, senior sports lecturer at the University of Brighton, in The Conversation. This is the age when injuries and illness tend to set in, fitness levels decline, or family takes precedence.

And yet many of the latest wave of departing GOATs continued to compete (and win) well beyond what was once considered their “prime.” Federer and Williams both called time on their grand-slam careers aged 41, while Vettel, Messi, and White are all in their mid-30s. NFL star Brady is a GOAT Snr, retiring (and then returning to play) at the age of 45. Among the more notable older GOATs is American surfer Kelly Slater, who’s still hanging ten at the age of 50. So what’s this generation of GOATs’ secret to staying at the top of their game for longer?

#1- GOATs these days are far from the rockstar athletes of the past. The wild child persona athletes of the past may have cultivated is no longer associated with GOATs. British F1 champion James Hunt drank heavily, smoked, and partied — often just before getting into his racecar. He died from a heart attack at the age of 45. Less than a decade later, 38-year-old seven-time F1 Championship champion Lewis Hamilton follows a strictly plant-based diet, does daily pilates, and turns his phone off by 6pm.

#2- It’s a tech thing. “Today’s athletes have faster skis, more aerodynamic bikes, lighter shoes, high-performance swimsuits and so much more,” says David Epstein, author of The Sports Gene. He compares Olympic runner Jesse Owens, who set the 100m world record in 1936, to Usain Bolt, who beat Owens’ record by 14 feet in 2009. Tech advances meant that Bolt was running on carpet specifically designed to help the sprinters to go as fast as possible. Owens, on the other hand, “ran on cinders and had to dig a hole with a trowel” for starting blocks. Take away the tech and Bolt and Owens would have been within a single stride of each other, says Epstein.

#3- Approaches to training have changed. Athletes once focused on high-intensity training designed to push them to their limits in the most time-efficient manner. Today, the emphasis is on strength and endurance, targeting specific weaknesses in moderate-intensity sessions, writes sports academic Brickley. Better recovery techniques, nutrition, and mental health care also help maintain performance and peak health.

This is all good news for the GOATs: Innovation and changing attitudes have allowed some of sport’s all-time greats to continue their careers well into their later years, becoming revered veterans with a wealth of knowledge and experience to show for it. To those who hung up their caps in 2022, we salute you for pushing the limits of sporting achievement — and entertaining and inspiring us in the process.