PM — All eyes on the slide

Happy Sunday, friends. We’re wary of calling out slow news days after our Thursday prophecy went in the polar opposite direction, but it so far appears to be a calm-ish start to the week, as most have their gaze fixed firmly on where the EGP is headed.

THE BIG STORY TODAY

EGP WATCH- The EGP is currently sitting at 24 against the greenback: The EGP continued its slide against the USD today, dropping an additional 4% to 24, according to data from state-owned Banque Misr and the National Bank of Egypt. The EGP was trading at 23.03 on Thursday after the central bank pledged a “durably flexible” exchange rate as we reached a staff-level agreement with the IMF.

The EGP was trading at 19.75 on Wednesday before the latest devaluation. The EGP has so far dropped 34.5% against the USD this year.

It could go further: Analysts are penciling in anywhere between EGP 22-25 by the end of next year, with some expecting the EGP to jump to anywhere between 25-27 against the greenback and ultimately settling at EGP 25 / USD 1 by the end of 2022.

THE BIG STORY ABROAD

It’s a toss-up in the international business press this afternoon between Elon Musk’s Twitter takeover (CNBC), the disintegration of the Turkey-brokered wheat pact (Financial Times), and a stampede in South Korea that has killed more than 150 people (Reuters and the Wall Street Journal).

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

• What happened on Thursday? The Central Bank of Egypt (CBE) at the end of last week went ahead with a series of measures to restore liquidity to the FX market and revive investor confidence in the economy — and topped it off by announcing a USD 3 bn loan agreement from the IMF.
• Chimera snaps up c.22% of MNT Investments: Netherlands-based MNT Investments — which is majority-owned by GB Auto subsidiary GB Capital — agreed to sell a 21.7% stake to a unit of Chimera Investments.
• The expat car import scheme is on its way: President Abdel Fattah El Sisi has signed into law a bill that will allow Egyptian expats to import cars and get customs and tax exemptions after paying upfront in FX.

*** It’s Inside Industry day — your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

In today’s issue: We profile a national initiative to help accelerate the localization of industrial production and lower the country’s reliance on imported goods.

???? CIRCLE YOUR CALENDAR-

It’s almost at the start of a new month- The key news triggers as we slide towards November:

• PMI: We’ll know how Egypt’s private sector fared in October on Wednesday when S&P Global releases the purchasing managers’ index. A 22-month contraction in private sector activity didn’t show signs of abating in September as high inflation continued to weigh on demand and output.
• Foreign reserves figures for October will be released next week.
• Inflation: Capmas and the central bank will release October’s inflation figures on Thursday, 10 November.

Importers, exporters and customs agents have two days left to register to join the Finance Ministry’s digital customs system Nafeza before they can no longer clear goods out of customs at seaports. (Statement | Al Mal)

The Federal Reserve will hold its penultimate policy meeting of 2022 on Tuesday and Wednesday: The folks over at the Fed aren’t expected to take their feet off the gas when they meet this week to review interest rates. The market is pricing in a fourth consecutive 75-bps rate hike on the back of another disappointing inflation release which showed core inflation reaching a new 40-year high in September despite the central bank embarking on its most aggressive tightening cycle in decades. And in reports yesterday, two other indexes closely watched by the Fed provided additional evidence that inflationary pressures continued unabated in September.

The Fingerprint Summit: A forum connecting corporations, investors, entrepreneurs, and government officials to promote potential investments for the private and public sectors will be held at the Nile Ritz Carlton Hotel from 22-23 November.

☀️ TOMORROW’S WEATHER- Expect temperatures to rise to 28°C during the day tomorrow before falling to 18°C at night, our favorite weather app tells us.

Over 300 businesses are pressuring governments to make nature impact disclosures mandatory by 2030, Enterprise Climate reports. H&M, Sainsbury’s and Nestle are among those petitioning for a call to action in the run up to COP15, the UN biodiversity conference being held in Montreal this December. The companies issued an open letter to world leaders explaining that “business and financial status quo was economically shortsighted and will destroy value over the long term.”

If passed, the pledge would apply to all major corporations operating in the 196 countries participating in the conference. It would be mandatory for companies to assess their impact on nature and disclose nature-related information by 2030 in a bid to increase accountability, encourage fairer competition, and push for a more responsible sourcing of materials. A report released by Business for Nature, the Capitals Coalition, and CDP indicates that companies are ready to transform their business to become eco-friendly because “there can be no business on a dead planet.”

Only 24 climate plans were submitted by the 193 countries who pledged to increase their climate commitments, according to a UN climate report released last week. UN climate chief Simon Stiell says “the statistics are rather disappointing,” and calls for governments to take serious action toward global greenhouse gas emissions as the planet faces 2.5°C of warming, far higher than the 1.5°C submitted under the Paris Agreement of 2015. The report suggests that current commitments will see a 10.6% increase in emissions by 2030, which is an improvement from last year’s 13.7% compared to 2010 levels.

The global energy crisis is pushing people back to the office: Nearly a quarter of UK employees and two-fifths of US employees are planning to work from the office or other workspaces outside home this winter to save energy, according to an Infogrid survey. 74% of Americans and 70% of Brits are beginning to see an increase in their energy bills as a result of the energy crisis, the survey says. Now, employees are more environmentally conscious and eager to take “personal action to improve sustainability in the workplace,” with 40% of US and UK respondents believing that their companies should do more to curb environmental impact, according to the survey.

Commuting remains a problem area: While working less from home appears to be a good solution to rising energy prices, the fuel expenses can offset this — 61% of UK commuters are concerned commuting is more expensive than before, Financial Times reports, citing a Mobilityways survey.

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

Burying the past — literally: The death of their abusive father brings together estranged half brothers Raymond and Ray (played by Ewan McGregor and Ethan Hawke) to carry out his final wishes. Their father’s lawyer informs them that they were left money in his will, subject to the condition that they dig his grave using specific shovels he allocated for the job. As they embark on a road trip back to Virginia, they seek closure and grieve the loss of a man that remained popular and well-liked despite making their childhood miserable. The movie is available to stream on AppleTV+ (watch trailer, runtime 2:20).

⚽ Gameweek 14 of the English Premier League wraps up today: Arsenal hosts Nottingham Forest at 4pm, while Manchester United plays against West Ham at 6:15pm.

Have you joined our inaugural Enterprise Fantasy League yet? You can get in on the action by clicking here or using the code 8o4sut.

In Spain’s La Liga, Real Madrid faces Girona at 5:15pm to reclaim the Spanish League lead, which Barcelona temporarily took yesterday. Athletic Bilbao will face Villarreal at 7:30pm, then Real Sociedad will play against Real Betis at 10pm.

????EAT THIS TONIGHT-

A great spot for mall brunching: Julia’s Kitchen in Cairo Festival City offers an extensive selection of local and international dishes in a whimsical space — complete with an eccentric huge yellow elephant. If you’re craving an elevated Middle Eastern breakfast, this is the place for you. Their menu includes everything from a sausage shakshuka skillet to eggs and pastrami — complete with a hint of fusion thanks to the truffle oil. You can also pick from a range of their Neapolitan pizza or indulge with an innovative turn on the classic cordon bleu with jalapeños and smoky cheddar.

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

D-CAF is ending with a bang: The multi-disciplinary contemporary arts festival Downtown Contemporary Arts Festival (D-CAF) is closing today with a number of interesting events. For Downtown Cairo connoisseurs, check out Endangered Species, an interactive Augmented Reality exhibition spread across town that explores our own role in the future of humanity. Your mission is to take a walk across downtown’s iconic buildings and try to find 10 painted butterflies using the clues listed here.

Younes Atbane’s Untitled 14KM examines how Arab identity is conceived in modern art in a multidisciplinary performance at AUC’s Falaki theater from 8.30 pm. An Arab-Andalusian poet, the director of a museum of contemporary art, a curator, and a contemporary artist join forces to talk about the issue of Arab identity.

Beyond Locality: The Thatcher Effect looks at how the neoliberal policies of former UK Prime Minister Margaret Thatcher affected societies all over the world. Abdalla Daif and Lucy Ellinson's performance use the parallel experiences of a family in North Wales and a family in Northern Egypt to emphasize the universality of these interventions. The one-hour show starts at 10pm at Rawabet Art Space.

???? UNDER THE LAMPLIGHT-

Demystifying Economics: Former Greek Finance Minister and left-wing economist Yanis Varoufakis explains capitalism in the form of a letter addressed to his daughter Xenia in his book Talking to My Daughter about the Economy. The book, which he wrote in just nine days, ditches the complex economic terms for layman’s terms, making it accessible to anyone regardless of their level of economic knowledge. He believes that every citizen should have a basic understanding necessary to talk about the economy as a prerequisite to authentic democracy.

Varoufakis explains how modern finance works using various stories including, for example, how German camps in World War II used cigarettes as currency to explain supply and demand, inflation, deflation and the role of banking. The Red Cross would send packages with goods and every once in a while the package would contain more cigarettes, meaning they were worth less, so more would be required to purchase the same amount of goods — inflation — and conversely after a raid when supplies were short cigarettes they were worth more — deflation.

The EGX30 rose 0.3% at today’s close on turnover of EGP 1.3 bn (9.2% above the 90-day average). Foreign investors were net buyers. The index is down 7.1% YTD.

In the green: Alexandria Containers and Cargo Handling (+7.7%), Egypt Kuwait Holding-EGP (+4.4%) and Juhayna (+4.1%).

In the red: Qalaa Holdings (-3.3%), Ezz Steel (-2.5%) and Housing and Development Bank (-2.3%).