Thursday, 9 June 2022

PM — Understanding the national dialogue taking place in July

TL;DR

๐Ÿ”Ž WHAT WE’RE TRACKING TONIGHT

Good afternoon, wonderful people. Pat yourselves on the back for making it through this week, which is going out with a bang with a rather busy Thursday afternoon news flow.

THE BIG STORIES TODAY

#1- Annual urban inflation accelerated to 13.5% in May, as rising global commodity prices and the recent EGP devaluation pushed consumer prices upwards for the sixth consecutive month. Annual urban inflation accelerated from 13.1% in April, according to figures (pdf) released today by statistics agency Capmas. While this is the highest level since May 2019, it falls short of analyst forecasts of a 14.2% median inflation rate.

#2- We’re getting closer to our first ever future flow issuance: EGX-listed private sector education outfit CIRA will issue EGP 2 bn worth of future flow securitized bonds over three years, the company confirmed in a statement to the EGX (pdf) this morning. The first issuance will be worth EGP 800 mn, with the bonds sold at EGP 100 a pop, the statement notes. The EGP 2 bn program will cover CIRA’s debt needs for the coming three years, funding its expansion plans for new universities and K-12 schools, CIRA CEO Mohamed El Kalla tells Enterprise. “This first future flow issuance is a really important step, and a reflection of how education is being seen more and more as a key industry in the country,” adds El Kalla.

Want a refresher on how exactly future flow securitization works? We’ve got you covered.

#3- Savola closes acquisition of Ole bakery: Saudi food conglomerate Savola has signed the EGP 622.40 mn asset purchase agreement to acquire 100% of the Egyptian Belgian Company, which is best known for its Ole-branded baked goods, according to a statement (pdf). “The transaction included the acquisition of all tangible and intangible assets of the Egyptian Belgian Company,” the statement reads. Al Ahly Pharos was exclusive buy-side advisor to Savola on the acquisition.

THE BIG STORY ABROAD-

The European Central Bank (ECB) left interest rates on hold at its monetary policy meeting today, but plans to raise rates in July and September, the bank said in a statement today. The ECB expects to enact a 25 bps hike when it next meets on 21 July and expects to raise rates again in September. The exact increment “will depend on the updated medium-term inflation outlook,” the ECB said, noting that a persistent or deteriorating inflation outlook would mean “a larger increment will be appropriate.” Interest rates in the eurozone are currently at -0.5%.

The ECB is also winding down its asset purchase program as of 1 July and “intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates.”

Market reaction: The ECB’s plans to raise interest rates drove down European equities and spurred a sell-off in eurozone sovereign bonds, but analysts say that the markets had already expected monetary tightening to be the order of the day, according to the Financial Times.

The Fed is coming up next: The US Federal Reserve is “all but certain” to hike interest rates by another 50 bps when it meets next week, Bloomberg writes, continuing the tightening cycle that the central bank embarked on in May with a 50-bps hike (its biggest since 2000).

The Central Bank of Egypt holds its policy meeting on Thursday, 23 June.


The situation with Ukraine’s grain exports is also still getting plenty of attention this afternoon, as Kremlin spokesperson Dmitry Peskov told reporters that there is still no agreement between Russia, Ukraine, and Turkey on a way to resume wheat exports through Ukrainian ports, according to Reuters.


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

  • Could household electricity bills rise from 1 July? Households could see their electricity bills rise by as much as 21% from 1 July, according to the government’s 2020 schedule (pdf) to phase out subsidies by 2025.
  • No staple food exports for another three months as we look to raise local harvests: The Trade Ministry has extended by three months its March ban on exports of wheat, flour, corn, lentils, pasta, fava beans, and vegetable oils. Meanwhile,the agriculture ministry is looking at new incentives to boost wheat production.
  • We’ve officially been passed the COP baton: Foreign Minister COP27 President-Designate Sameh Shoukry signed the COP27 Host Country Agreement with UN climate executive secretary Patricia Espinosa while attending meetings with members of the Group of 77 developing countries and China at a UN climate conference in Bonn.

๐Ÿ—“ CIRCLE YOUR CALENDAR-

A handful of conferences coming up this month:

โ˜€๏ธ TOMORROW’S WEATHER- That sweltering summer heat really isn’t going anywhere. Expect highs of 41°C and 43°C tomorrow and Saturday, with the evening only offering a slight reprieve with lows of 26°C and 27°C, our favorite weather app tells us.

enterprise

๐Ÿš™ FOR YOUR COMMUTE

Get a glimpse of EGP banknotes from the late 19th and mid-20th century: The National Bank of Egypt (NBE) will be displaying the very first EGP banknotes issued in the country, which date back to the year 1899, at the grand opening of the NBE exhibition of 21 June, according to a statement (pdf). The exhibition, which will be held at the NBE’s headquarters in downtown Cairo, will coincide with the 124th anniversary of the NBE’s establishment. The exhibition will also include historic documents that weave the story of the bank’s past in an effort to spotlight the bank’s longstanding legacy in the country.

Cosmic puzzles: Astronomers have detected fast, “mysterious” radio signals emanating from a dwarf galaxy 3 bn light-years away from our blue planet, CNN reports. The 13 signals, known as fast radio bursts (FRBs), or repeaters, were picked up by a telescope in Canada. The nature and source of the radio signals remain unknown. Unlike most radio waves that have been detected by researchers before, FRBs are short, recurring energetic pulses stemming from a single source. FRBs have only been observed by astronomers once before. The discovery is significant for astronomers, who say this new source will make studying repeaters an easier feat, and will enable us to understand the nature and origin of these cosmic mysteries.

๐Ÿ‘Œ ENTERPRISE RECOMMENDS

๐Ÿ“บ ON THE TUBE TONIGHT-
(all times CLT)

El Beit Beity is a new Egyptian horror show on Shahid that combines drama with tons of “efehat”: Starring Karim Mahmoud Abdelaziz and Mostafa Khater, the show follows Bino (played by Khater) who inherits an old mansion when his father dies. You can tell early on that Bino was the black sheep of the family and his siblings seem to have given him as little of the inheritance as possible. However, Bino is excited about the prospect of having the property but soon begins to experience abnormal events. The concept of a haunted house has been squeezed dry, but El Beit Beity makes sure to add a humorous Egyptian twist to it, such as bringing in Abdelaziz as a young taxi driver who comes to stay with Bino after his vehicle was stolen outside of his mansion. The unlikely duo team up to uncover the secrets behind “el beit.” The show is currently on Shahid with four episodes out and two more to be released every Thursday.

โšฝ It’s Egypt v Ethiopia game day — and the Pharaohs are Salah-less: The Egyptian national team will play their second match in the 2023 AFCON qualifiers today, playing against Ethiopia at 6pm in Malawi. Our team will be down several key players due to injuries, including Liverpool star Mohamed Salah and Arsenal midfielder Mohamed Elneny. Egypt currently shares the top spot in the group with Malawi, with three points each, while Ethiopia and Guinea are in third and fourth place. The top two teams will qualify directly for the tournament in Côte d’Ivoire next year. Guinea and Malawi will face off at 9pm.

UEFA Nations League games worth watching this weekend (all matches kick off at 8:45pm): Portugal v Czech Republic and Switzerland v Spain tonight; Austria v France and Denmark v Croatia tomorrow; and England v Italy, Hungary v Germany, Netherlands v Poland, and Wales v Belgium all on Saturday.

Today's AFCON qualifiers highlights:

  • Lesotho v Côte d'Ivoire (9pm)
  • Morocco v South Africa (9pm)
  • Nigeria v Sierra Leone (6pm)

๐Ÿฒ EAT THIS TONIGHT-

Head to Em Sherif for an oriental fine dining experience: The Lebanese restaurant brings quality, sophistication, and a homey atmosphere for an all-round pleasing meal. The restaurant has branches in Beirut, Kuwait, London, as well as two fresh locations in Cairo: Park St in Sheikh Zayed and White by the Waterway in New Cairo. The vast seating areas are usually packed during the weekend, so it may be best to make reservations in advance. Lebanese cuisine is famous for its fresh and healthy ingredients, and Em Sherif doesn’t disappoint — their dishes are satisfying yet light. Just about everything we tried off their menu was delicious, so we recommend you order a wide variety of mezzas and main dishes to share: We can vouch for their Fattoush, Hummus, Maqaneq, Shawarma sandwiches, the Burger with a special khalta, and last but certainly not least: Their Fatteh Eggplant & Chickpeas is not to be missed.

๐ŸŽค OUT AND ABOUT-
(all times CLT)

Dawar Arts is hosting ACT Theater Group’s play festival titled Love and Stranger Things with six plays on the roster. The performances take place tomorrow at 8pm.

Mazeek and Dina El Wedidi are performing at Cairo Jazz Club on Saturday at 9pm. Mazeek play upbeat African sounds while El Wedidi sings beautifully-written songs, including our personal favorite, El Koun.

Swing dancing and competitions are on the agenda tomorrow at 7pm at Zamalek’s Nลซn Center.

enterprise

๐Ÿ‘‚ EARS TO THE GROUND-

WHAT’S NEXT- We’ve heard of the four-day week. What’s this 4-Hour Workweek you speak of? Author, entrepreneur, and lifestyle guru Tim Ferriss challenged the status quo more than 12 years ago by penning the 4-Hour Workweek, which showed readers how to escape the rat race, and earn larger incomes by working fewer hours. Recently, bestselling author and professor Cal Newport explored how Ferriss’ manifesto “anticipated our current moment of professional upheaval,” in a New Yorker article. In a recent episode on Ferriss’ podcast, the two leading minds came together to discuss the book, and what unfolded is a mind-expanding conversation on the cult of productivity, burning out, unsustainable behaviors at work and how to find balance. We highly recommend you listen to this podcast episode (listen, runtime: 1:31:31) on your next commute (or two) — and while you’re at it, add The Tim Ferriss show to your favorites for captivating discussions with some of the world’s most brilliant thinkers and performers.

๐Ÿ’ก UNDER THE LAMPLIGHT-

Laugh out loud at a series of unexpected (but definitely improbable) turn of events as you flick the pages of Cult Classic. Sloane Crosley’s new book is a witty, original, fast-paced and masterfully crafted novel on love, memory, morality, and mind control. The premise: 37-year-old Lola — also the book’s narrator — is about to get married, but gets cold feet. At a work-reunion dinner, Lola excuses herself to buy a pack of cigarettes when an over-the-top fantastical story kicks off as she keeps bumping into former boyfriends on the streets of Manhattan. Crosley defies categorization with her latest book, penning a truly unique reading experience with hilarious pages and proper food for thought.

๐ŸŒŠ GO WITH THE FLOW

The EGX30 fell less than 0.1% at today’s close on turnover of EGP 653 mn (21.7% below the 90-day average). Foreign investors were net sellers. The index is down 14.3% YTD.

In the green: Eastern Company (+4.8%), MM Group (+2.9%) and GB Auto (+2.5%).

In the red: EFG Hermes (-1.9%), Palm Hills Development (-1.7%) and Fawry (-1.4%).

๐Ÿ“– ENTERPRISE EXPLAINS

Enterprise Explains: The national dialogue: In April, President Abdel Fattah El Sisi called for a national dialogue that would help set the country’s political roadmap and economic priorities moving forward. The dialogue will bring together political parties and factions across the spectrum (with the exception of the Ikhwan). To signal his seriousness about the dialogue being all-encompassing, the president vowed to consider releasing political activists currently held in pre-trial detention to allow their participation in the process.

The dialogue will start in the first week of July, according to a statement from the dialogue’s organizers. Journalists’ Syndicate Head Diaa Rashwan was named general coordinator of the dialogue, and will be tasked with negotiating with political and union powers and other participating parties to form a 15-member board of trustees for the initiative.

We’ve done this before — it’s just been a long time: Egypt’s last national dialogue was held nearly 30 years ago during Hosni Mubarak’s regime, in the aftermath of a wave of terrorist attacks in 1993. That dialogue was designed to move the country forward with political reforms and uprooting terrorism.

The aim this time around: The dialogue should focus on addressing Egypt’s political and economic priorities moving forward towards what is being dubbed as the “new republic,” El Sisi said. At the end of the process, a set of “recommendations” should be prepared and presented to the president. El Sisi has also said that he will personally attend the final stages of the dialogue.

Who’s joining: Registration is open for anyone who would like to participate in the national dialogue through its website (here). The registration form asks applicants to provide their full name, national ID number, contact information, the governorate they reside in, and (where applicable) the political party they belong to. Applicants are also asked to briefly write about their “vision” or proposed topics for the dialogue.

The agenda: The president’s announced scope appears to be a general parameter for the process, but the specific agenda will be determined by the National Training Academy (NTA), which is organizing the dialogue. A handful of political forces and research centers have already sent in proposals and ideas for how the dialogue should proceed and what the outcomes should be, the NTA said. The academy has set up a committee to compile and review these ideas into a comprehensive and unified roadmap for the dialogue.

Each group is coming to the table with their own set of priorities and issues they want to bring up: The Journalists’ Syndicate’s agenda is pushing for “greater press and media freedoms,” Rashwan said last month, while political party El Wafd is suggesting that the dialogue tackles amendments to the 2014 constitution and changing some laws, including the Political Parties Act and the National Elections Act, said party chairman Abdel Sanad Yamama.

The general sentiment about the dialogue is rather positive: Researchers such as Khaled Okasha, head of the Egyptian Center for Strategic Studies and Mohamed Fayez Farahat, head of the Ahram Center for Political and Strategic Studies, also came out in support of the initiative. Both Okasha and Farahat vowed to prepare and submit papers on different aspects of Egypt’s political and economic reforms, security challenges, and other important issues for the dialogue.

๐Ÿ“† CALENDAR

OUR CALENDAR APPEARS in two sections:

  • Events with specific dates or months are right here up top
  • Events happening in a quarter or other range of time with no specific date / month appear at the bottom of the calendar.

JUNE

9 June (Thursday): Digital Transformation Summit, The Nile Ritz-Carlton, Cairo

14-15 June (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15-18 June (Wednesday-Saturday): St. Petersburg International Economic Forum (SPIEF), St. Petersburg.

16 June (Thursday): EU-Egypt Sustainable Food Value Chain conference, Grand Nile Tower Hotel, Cairo.

16 June (Thursday): End of 2021-2022 academic year for public schools.

21-22 June (Tuesday-Wednesday): Aswan Forum for Sustainable Peace and Development, Cairo.

21-23 June (Tuesday-Thursday): Commonwealth Business Forum, Kigali, Rwanda.

23 June (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

25-27 June (Saturday-Monday): Big 5 Construct, Egypt International Exhibition Center.

26 June (Sunday): The deadline for private companies to pre-register ahead of bidding for the second phase of the PPP national project to establish and operate 1k language schools.

27 June-3 July (Monday-Sunday): World University Squash Championships, New Giza.

30 June (Thursday): June 30 Revolution Day, national holiday.

30 June (Thursday): Deadline for bids for National Democratic Party HQ redevelopment contract.

June: Egypt will launch a unified ticketing system for all means of transport at the Adly Mansour Interchange Station.

June: Egypt and Israel will sign an agreement with the EU to increase LNG exports.

JULY

July: A law governing ins. for seasonal contractors will come into effect.

July: Fuel pricing committee meets to decide quarterly fuel prices.

July: Actis’ expected sale of its majority stake in Lekela to Infinity and Masdar’s Infinity Power.

First week of July: The national dialogue called for by President Abdel Fattah El Sisi kicks off.

1 July (Friday): FY 2022-2023 begins.

1 July (Friday): Official rollout of e-receipt system begins.

8 July (Friday): Arafat Day.

9-13 July (Saturday-Wednesday): Eid Al Adha, national holiday.

21 July (Thursday): European Central Bank monetary policy meeting.

26-27 July (Tuesday-Wednesday): Federal Reserve interest rate meeting.

30 July (Saturday): Islamic New Year.

Late July – 14 August: 2Q2022 earnings season.

AUGUST

August: Work to extend the capacity of the Egypt-Sudan electricity interconnection to 600 MW to be completed.

18 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

SEPTEMBER

September: Egypt will display its first naval exhibition with the title Naval Power.

September: Central Bank of Egypt’s Innovation and Financial Technology Center to launch incubator for 25 fintech startups.

6-9 September (Tuesday-Friday): Gate Travel Expo 2022, El Kobba Palace, Cairo.

8 September (Thursday): European Central Bank monetary policy meeting.

18 September (Sunday): Deadline for brokerage firms, asset managers and financial advisors to register with the Egyptian Securities Federation.

20-21 September (Tuesday-Wednesday): Federal Reserve interest rate meeting.

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

26–27 September (Monday-Tuesday): The Africa Women Innovation and Entrepreneurship Forum (AWIEF) at the Cairo Marriott Hotel.

OCTOBER

October: Fuel pricing committee meets to decide quarterly fuel prices.

1 October (Saturday): Use of Nafeza becomes compulsory for air freight.

6 October (Thursday): Armed Forces Day, national holiday.

8 October (Saturday): Prophet Muhammad’s birthday, national holiday.

10-16 October (Monday-Sunday): World Bank and IMF annual meetings chaired by CBE Governor Tarek Amer, Washington, DC.

18-20 October(Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

27 October (Thursday): European Central Bank monetary policy meeting.

Late October – 14 November: 3Q2022 earnings season.

NOVEMBER

November: Cairo Water Week 2022.

1-2 November (Tuesday-Wednesday): Federal Reserve interest rate meeting.

3 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

3-5 November (Thursday-Saturday): Egypt Fashion Week.

4-6 November (Friday-Sunday): The Autotech auto exhibition kicks off at the Cairo International Exhibition and Convention Center.

7-18 November (Monday-Friday): Egypt will host COP27 in Sharm El Sheikh.

21 November-18 December (Monday-Sunday): 2022 Fifa World Cup, Qatar.

13-14 December (Tuesday-Wednesday): Federal Reserve interest rate meeting.

15 December (Thursday): European Central Bank monetary policy meeting.

DECEMBER

22 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

JANUARY 2023

January EGX-listed companies and non-bank lenders will submit ESG reports for the first time.

January: Fuel pricing committee meets to decide quarterly fuel prices.

MAY 2023

22-26 May (Monday-Friday): Egypt will host the African Development Bank (AfDB) annual meetings in Sharm El Sheikh.

EVENTS WITH NO SET DATE

2Q2022: The Sovereign Fund of Egypt will invest in two companies in the financial inclusion and non-banking financial services sectors.

End of 2Q2022: The Financial Regulatory Authority’s new Ins. Act should be approved.

End of 2Q2022: Door for bidding for the contract to redevelop the site of the former National Democratic Party HQ to close.

1H2022: Target date for IDH to close its acquisition of 50% of Islamabad Diagnostic Center.

1H2022: e-Finance’s digital healthcare service platform, eHealth, will launch its services.

1H2022: The government will respond to private companies’ bids to build desalination plants.

1H2022: Egypt’s second corporate green bond issuance expected to be announced.

End of 1H2022: Emirati industrial company M Glory Holding and the Military Production Ministry will begin the mass production of dual fuel pickup trucks that can run on natural gas.

2H2022: The inauguration of the Grand Egyptian Museum.

2H2022: IEF-IGU Ministerial Gas Forum, Egypt. Date + location TBA.

2H2022: The government will have vaccinated 70% of the population.

3Q2022: Ayady’s consumer financing arm, The Egyptian Company for Consumer Finance Services, to release its first financing product.

End of 2022: e-Aswaaq’s tourism platform will complete the roll out of its ticketing and online booking portal across Egypt.

2023: Egypt will host the Asian Infrastructure Investment Bank’s Annual Meeting of the Board of Governors in 2023.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish above between the actual holiday and its observance.

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