PM — Why is a week 7 days?

Good afternoon, friends. We’re just a few short hours away from the long weekend here in Egypt — we hope those of you getting time off enjoy it, considering we won’t get another holiday for a while.

THE BIG STORY TODAY

El Sisi signs cooperation MoUs with India during New Delhi trip: President Abdel Fattah El Sisi and Indian Prime Minister Narendra Modi signed today several MoUs for cooperation in tech, cybersecurity, youth, sports, and broadcasting, according to an Ittihadiya statement. The two leaders signed the agreements at the Hyderabad Palace in New Delhi as El Sisi on the second day of his three-day visit to India, where he is being honored as “chief guest” at celebrations to mark India's 74th Republic Day tomorrow. The two leaders discussed ways to enhance bilateral relations, boost investments in various sectors, and increase the volume of trade between the countries, as well as regional and international issues.

El Sisi also met with several Indian ministers, officials and businessmen to pitch economic and trade cooperation, including increasing Indian investments in Egypt, according to a separate statement. El Sisi pointed to the Suez Canal Economic Zone, which includes a number of industrial and logistical zones, as a promising opportunity for Indian companies wanting to benefit from Egypt’s strategic location and trade agreements with several nations. Indian officials expressed their interest in growing the two countries’ trade of agricultural products.

THE BIG STORY ABROAD

Germany has agreed to send battle tanks to Ukraine out of its own military stocks, after months of deliberation and hand-wringing that Germany’s decision to supply Ukraine with military tools would stoke the fire with Russia. The story is leading the conversation in the international business press this afternoon: Reuters | CNBC | Wall Street Journal | Financial Times

HAPPENING NOW-

Cairo Book Fair kicks off: Prime Minister Moustafa Madbouly inaugurated the Cairo International Book Fair earlier today, according to a statement. The fair opens to the public tomorrow at the Egypt International Exhibition Center and runs through 9 February.

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

• SFE + B Investments to co-invest in healthcare, pharma: The Sovereign Fund of Egypt (SFE) and B Investments will together invest in Egypt’s healthcare and pharma industries under two agreements that could channel more than EGP 2 bn into local businesses.
• Affirma Capital, StonePine close acquisition of minority stake in pharma player Nerhadou: A private equity consortium of Affirma Capital and StonePine has closed its acquisition of a “significant minority stake” in local pharma and nutraceutical player Nerhadou International in a USD 20 mn transaction.
• Merger with NewMed looks dead after Capricorn directors quit en masse: The chair, CEO, and three other directors of Capricorn Energy’s board have resigned, caving to pressure from shareholders led by activist investor Palliser Capital to overhaul the company’s management and block a proposed merger with Israeli energy firm NewMed Energy.

???? CIRCLE YOUR CALENDAR-

EBRD + EU + GCF green finance event next week: The European Bank for Reconstruction and Development, the EU, the Green Economic Financing Facility, and the Green Climate Fund will hold a green finance event on Tuesday, 31 January at the Nile Ritz Carlton Hotel.

The Senate is set to reconvene on Sunday, 5 February, having yesterday completed two days of plenary sessions that saw members discuss tourism promotion and education reform.

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

☀️ TOMORROW’S WEATHER- Expect a partially sunny long weekend with daytime highs of 22-27°C and nighttime lows of 12-15°C, our favorite weather app tells us.

Get back to work: Microsoft has fixed networking issues that took down Microsoft Outlook and Teams for users around the world, Bloomberg reports. Microsoft experienced issues with its online services today, including Teams, Outlook, and its cloud platform Azure, which the company attributed to a networking outage. “We've rolled back a network change that we believe is causing impact. We're monitoring the service as the rollback takes effect.” Microsoft said on Twitter.

How big of an issue was it? Users around the world began reporting issues accessing Microsoft 365 services earlier today at around 9am Cairo time, according to Bloomberg. Azure’s services across North and South America, Europe, Asia Pacific, Middle East, and Africa were affected, according to Azure’s status page. Only its services in China and its platform for governments were unaffected, Reuters reported. Almost all major global companies use Azure, so any disruption to the cloud computing platform can affect various services and “create a domino effect,” Reuters reports.

Ad spending for Twitter fell 71% y-o-y in December, as advertisers continue to pull content from the social media platform under Elon Musk’s leadership, Reuters reports, citing data from Standard Media Index. December is the second consecutive month Twitter saw significantly declining ad spending, leading the company’s 4Q 2022 revenue to slump around 35% y-o-y, the Information reported last week, citing a senior Twitter manager. Advertisements typically contribute around 90% of Twitter’s total revenues.

Fourteen of Twitter’s top 30 advertisers had already pulled their content from the platform in October, following CEO Elon Musk’s take over, while more were spurred by the release of paid account verification that led to scammers impersonating corporations. Musk doesn’t seem too worried about companies pausing their ads, saying that he understands if advertisers “want to give it a minute.” But Twitter is offering big concessions to try and bring back big spenders — offering ads at no cost, lifting bans on political content and giving advertisers more say over ad positioning.

Musk is already having a not-great time, as he is currently involved in a securities-fraud lawsuit brought against him by Tesla shareholders, who claim that they were misled by Musk who inflated the company’s share price off the back of tweets stating he would take Tesla and had funding secured. And yet, his wealth reportedly grew USD 10.6 bn to USD 145.2 bn, as he took the stand, reports Bloomberg.

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

Dark comedy horror film The Menu serves up some sweet revenge: Succession director Mark Mylod keeps his commentary on the obscenely wealthy running with his latest project, which spotlights the ostentatious world of fine dining. The film follows a group of guests, including three finance bros, a movie star and his assistant, a couple, a food critic and her editor, and a foodie (Nicholas Hoult) and his last-minute date (Anya Taylor-Joy) as they arrive to a secluded private island to dine at world renowned chef Julian Slowik’s (Ralph Fiennes) restaurant, Hawthorne. The multi-course dining experience at the exclusive spot, which seats just 12 people, sets back each guest a staggering USD 1250. The dinner kicks off with an amuse-bouche, followed by a “breadless bread course” before some more unexpected surprises are served. The film is available to stream on Disney+.

???? The Pharaohs face Sweden tonight in the quarter-finals of the World Handball Championship at 9:30pm. Egypt qualified for the quarter-finals after coming in second in its group, one point behind Denmark.

⚽ There are quite a few matches to tune into this weekend, across several leagues.

Carabao Cup: Nottingham Forest faces Manchester United in the first leg of the Carabao Cup semi-finals at 10pm tonight.

In the Bundesliga: Mainz faces Dortmund at 7:30pm and Augsburg plays Monchengladbach at 9:30pm tonight. Bayern Munich play Frankfurt at 7:30pm on Saturday.

Serie A: Cremonese play Inter Milan at 7pm.

Quarter-finals of the Copa del Rey:

Barcelona v Real Sociedad (10pm tonight)

Osasuna v Sevilla (11pm tonight)

Valencia v Athletic Club (9pm tomorrow)

Real Madrid v Atletico Madrid (10pm tomorrow)

Egyptian Premier League:

Aswan v El Gaish (2:45pm Friday)

Ismaili v Dakhleya (5pm Friday)

Al Mokawloon v Al Ittihad (7pm Friday)

Al Masry v Pharco (5pm Saturday)

La Liga:

Almeria v Espanyol (10pm Friday)

Cadiz v Mallorca (3pm Saturday)

Girona v Barcelona (5:15pm Saturday)

Sevilla v Elche (7:30pm Saturday)

Getafe v Real Betis (10pm Saturday)

FA Cup: Manchester City face Arsenal at 10 pm on Friday and Manchester United plays Reading at 10pm on Friday.

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

Don’t miss out on SodaLake’s sublime semi-acoustic performance tonight at The Tap East, coming to you with the best soul, RnB, and jazz beats.

It’s disco night with Club Boogie in OUTERSPACE Moenes & MotherFunkers taking over the stage at Cairo Jazz Club in Agouza at 9pm.

Mazaher ensemble (Zar) are playing tonight at the Egyptian Center For Culture & Arts – Makan at 8pm, bringing you an infusion of three different beats of Zar music.

ElSawy Culture Wheel is hosting a Fayrouz Night at 7pm, featuring vocalist Mariam Talaat.

Prepare yourself to sing your heart out tonight at Karaoke’s Room New Cairo, at 8pm.

???? UNDER THE LAMPLIGHT-

The Week dives into the evolution of the seven-day week and how it shapes our lives. The notion of a seven-day week has become so entrenched in our habitude that we rarely stop to question it. Why do we adhere to a seven-day system? Why not 12? David M. Henkin combed through American literature, restaurant menus, theater schedules, and other documents from as far back as the 17th century to uncover when America became devoted to the seven-day week. He explains that the seven-day week — which was first used in Mesopotamia and is mentioned in the Book of Genesis — became firmly established in the US in the 19th century and that soon after the rest of the world followed suit. Henkin demonstrates how much the week affects our perception of time, pointing to how disoriented people became when prolonged covid-19 lockdowns caused them to lose track of the days of the week, and consequently time. “Losing one’s handle on the week raises the specter of lost memory and lost time,” he writes.

EARNINGS WATCH-

Alexandria Mineral Oils Company (AMOC) reported net income after tax of EGP 850.7 mn in 1H 2022-23, up 146% y-o-y, according to the company’s unaudited earnings release (pdf). The company recorded EGP 10.6 bn in sales during the July-December period, up 51% y-o-y.

MARKET ROUNDUP-

The EGX30 rose 2.1% at today’s close on turnover of EGP 2.55 bn (47.8% above the 90-day average). Egyptian investors were net sellers. The index is up 15.0% YTD.

In the green: Credit Agricole Egypt (+9.1%), Oriental Weavers (+6.5%) and Juhayna (+5.8%).

In the red: Eastern Company (-3.3%), e-Finance (-0.5%) and CIRA Education (-0.4%).

China’s population decline could spell trouble for the global economy: The Chinese government last week announced that in 2022 the country recorded some 9.6 mn births and 10.4 mn deaths, marking the first time China has seen its population decline since the 1960s. Last year’s birth rate was the lowest since at least 1950, Bloomberg reports. Despite efforts in recent years to scale back the country’s one-child policy, officials in China have been unsuccessful in avoiding the population decline, which could have far reaching effects on the global economy and its prospects for growth.

The country’s manufacturing capabilities will be put to the test: As China’s working-age population continues to decline over the coming years — about 0.2% every year until 2030, according to S&P Global Ratings’ most recent estimates — economic growth is expected to come under strain.

The implications on the global economy are not insignificant: A shrinking labor force and less productive manufacturing sector could mean higher prices for goods sold in Western countries already reeling from high inflation.

A shrinking population brings with it a risk of slower consumption: While economic growth in China has long been driven by its position as a global manufacturing powerhouse, in recent years growing domestic consumption has also become a considerable growth engine that was expected to help carry much of the weight in the country’s future economic expansion. Now with a dwindling population, China’s consumption-led expectations of growth are also under threat.

This is all taking place far sooner than authorities expected: A shrinking population is fairly common in countries where a larger population of more affluent people starts to emerge, as seen elsewhere in the region, including in South Korea and Japan. The problem with China is that its population decline comes at a time when its economy is still solidly middle income.

And despite government efforts to curb this trend: The Chinese government has introduced incentives like tax cuts and stimulus packages for parents with newborn babies since it brought its one-child policy to an end in 2016, but these policies haven’t been successful, the New York Times reports.

The decline coincides with a low point for the Chinese economy: China’s economy last year grew at its second slowest pace in about four decades — only 3%, down from 8.1% in the previous year. Its poor performance in 2022 is only eclipsed by 2020 when the full force of covid lockdowns brought economic growth to some 2.4%

Lasting effects of the country’s one child policy have left a significant gender imbalance in the country’s demographic makeup. Currently there are about 722 mn men and 690 mn women living in China. The unusually deep gender imbalance is more pronounced in rural areas and has led to more young people staying single for longer.

The high cost of raising a kid is also partially behind this: Young people in China are increasingly finding they can’t afford to have kids thanks in part to rising childcare costs, the NYT reports. For others, the pandemic and the government's heavy-handed policies towards containing its spread have caused them to question whether it's the right time to be having children.

But China’s fate isn’t sealed just yet: Addressing underemployment among its working-age population in both urban centers and rural towns could help stymie the negative effects of a dwindling and aging population over the coming years. Plus, more automation and technology-assisted manufacturing could help patch up productivity slumps at factories. “Economic growth will have to depend more on productivity growth,” Zhiwei Zhang, chief economist at Pinpoint Asset Management told Reuters.