Investors are increasingly bullish on Egypt.

It’s day two of the Tokyo International Conference on African Development (Ticad) today: The opening day saw President Abdel Fattah El Sisi meet with his Japanese counterpart Shinzo Abe, and discuss education initiatives with the Japanese International Cooperation Agency. The event, designed to facilitate Japanese investment on the African continent, will wrap up tomorrow. We have full coverage of the day’s events in this morning’s Speed Round, below.

The previous six iterations of Ticad haven’t done much for Japan, the FT notes. Tokyo has struggled to grow exports to the continent, foreign direct investment has expanded only marginally, and India and the UAE have overtaken it in terms of trade volumes.

This time, they’re not messing around: For this year’s Ticad, the Japanese government has set up a permanent council with corporations in a more determined effort to increase investment. This, as well as the dwindling investment options at home, has analysts optimistic that Japanese investors will finally begin stepping up their involvement in Africa.

The outlook on US corporate profits is taking a turn for the worse on the back of trade tensions with China, with analysts’ earnings expectations dropping to a three-year low, according to the Financial Times. Previous expectations that S&P 500 companies will see their earnings jump 7.7% have been scaled down to 2.4%. “With global growth slowing sharply, and domestic activity cooling, further profit weakness represents a risk for business investment and hiring — a key support to consumer spending,” says Oxford Economics senior economist Lydia Boussour.

Yield on 30-yr US treasuries hits record low: Investors continued to move into long-term US sovereign debt yesterday, sending the rate on 30-year US treasuries falling to record lows. The yield dropped to a historic low of 1.907% before recovering slightly to close at 1.933%. The falling yield comes despite the US and China sounding positive notes this week over trade talks, suggesting continued concern among investors over the US economy’s short-term prospects.

The tables are turning on high-yield EM debt: Anxiety over a looming economic slowdown has EM investors playing it safe, especially as US-China trade talks fall through and the Argentinian market dives, Bloomberg reports. High-yield USD-denominated debt in emerging markets is expected to lose 4% of its value this month after having recovered since the beginning of the year following a tough 2018, Bloomberg Barclays indexes showed. Winning though are the low-yield bonds, which are expected to reach their highest recorded gains this August.

We might be on the cusp of a rally in gold prices as investors are piling into the lower-risk assets, CitiGroup says, according to Bloomberg. UBS Group AG is also bullish on the metal, saying gold could hit USD 1,650 “as central-bank easing spurs flows into bullion-backed exchange-traded funds,” the news information service says. In Egypt, gold prices are expected to rise to EGP 800 per gram by the end of next month.

Bad news for natural gas producers — prices are at their lowest ever amid a supply glut mainly driven by the US, where exports have surged from around the 20 bcf mark in 2016 to around 130 bn this year. A widely used European price for LNG has dropped to nearly USD 3, from around USD 9 just a year ago. This is fairly disastrous for the US domestic market, the WSJ reports. And given our ambitious plans for LNG exports, it isn’t great news for us either.

Tadawul falls as Saudi stocks join MSCI: A sell-off in Saudi bank stocks caused the Tadawul to fall 1.4% yesterday after the second batch of shares were added to the MSCI EM Equity Index, Reuters says. The market has long priced in the effects of the upgrade, limiting the chances of an immediate post-inclusion boost in stocks. The Institute of International Finance said yesterday that joining the MSCI and FTSE indices has helped the Tadawul to attract USD 18 bn in foreign inflows this year. The second phase of inclusion will see another USD 5 bn of equity inflows, it said. The weighting of Saudi shares on the MSCI index rose to 2.8% from 1.45% after the second batch was added yesterday.

Trump’s Mideast peace plan delayed (again): The US will not unveil the political part of its Mideast peace plan before Israel’s elections in September, Trump’s Middle East envoy Jason Greenblatt has announced. Trump said on Monday that the long-delayed plan could be revealed prior to the elections, an idea that has received support within the Israeli government. But Greenblatt appears to have ruled that out, writing “We have decided that we will not be releasing the peace vision (or parts of it) prior to the Israeli election,” on Twitter yesterday.

Boris Johnson deploys the nuclear option: UK Prime Minister Boris Johnson has suspended parliament for five weeks in an attempt to block MPs from preventing a hard exit from the European Union. Brexiteer Jacob Rees-Mogg defended the controversial move as a “completely proper constitutional procedure,” but MPs from both sides of the political aisle denounced it as a “constitutional outrage” and a “coup”. The BBC has more.

The periodic table is 150 years old: To celebrate, Bloomberg is out with an incredibly long interactive page examining each and every element, and explaining how they’re applicable to businesses.

Talk shows look like they’re about ready for the weekend:

President Abdel Fattah El Sisi’s meeting with Japanese Prime Minister Shinzo Abe at the Tokyo International Conference on African Development (Ticad) was more or less the talk of the town last night (watch, runtime: 04:24) and (watch, runtime: 01:49). We have all you need to know about this in this morning’s Speed Round, below.

The cabinet’s greenlighting of 17 new oil and gas exploration and production agreements between EGPC, Ganope and Egas also earned some airtime with Masaa DMC’s Ramy Radwan (watch, runtime: 01:19). We also have more on this in the Speed Round, below.

Egyptian 10-year bonds to remain “extremely attractive” as interest rates come down -Goldman Sachs: Egyptian 10-year bonds are an “extremely attractive” option for investors looking for higher yields and duration return as the country begins to cut its short-term interest rates, Goldman Sachs Vice President for MENA economics research Farouk Soussa tells Bloomberg TV (watch, runtime: 4:58). Soussa tells the news information service that Egypt’s cooling inflation also means that real interest rates stand out among regional and emerging market peers. Investing in long-term bonds “tends to be a bit more sticky, but the liquidity in the Egyptian market has improved to the extent that our clients are now able to trade in and out of those trades and it makes it much more attractive,” he says.

10-year yields fall 87 bps: Average yields on 10-year treasuries fell to 14.682% in an auction yesterday, down from 15.551% in an auction earlier this month, CBE data shows. Yields on 10-years in the secondary market fell slightly to 15.36% yesterday, retaining Egypt’s position as offering the second highest return on 10-year bonds in the world, after Turkey.

Don’t expect a mass exodus of portfolio investments from Egypt: Soussa expects short-term interest rates to continue coming down, but says portfolio money is unlikely to “rush out of the Egyptian market.” Instead, portfolio investments will stick around and “may even build up going forward,” which will bode well for the EGP and could lead to further appreciation of the currency.

MENA fund managers are still bullish on Egypt, UAE: Six out of 10 MENA fund managers polled by Reuters said they plan on increasing their exposure to Egypt, and five said the same about the UAE. Both countries’ markets have performed well this year: The EGX rose 9.56% in 2019, outperforming most regional peers, while Dubai and Abu Dhabi’s benchmark indices have risen 8.76% and 4.39% this year, respectively. On the flipside, nearly two-thirds of the fund managers said they plan on decreasing their allocations in Saudi Arabia.

Egypt’s rate cuts, cooling inflation drive investor sentiment: The fund managers surveyed pointed to Egypt’s inflation figures dropping to a four-year low and the CBE’s decision to cut benchmark interest rates last week as positive indicators. “We believe [falling interest rates] could channel liquidity out of the fixed income market into the equity market as the carry trade of Egyptian treasuries becomes less attractive,” said Rasmala Investment Bank portfolio manager Vishal Gupta.

Global sukuk issuances set for continued steady growth as Egypt prepares to enter the market: Issuances of sukuk (sharia-compliant bonds) are expected to grow 6% to around USD 130 bn in 2019, Moody’s said in a report on Tuesday. The ratings agency sees this year’s surge driven primarily by Malaysia and GCC countries, with Saudi Arabia and Malaysia having already issued USD 87 bn-worth of the bonds in 1H2019. Moody’s also said it expects to see some African sovereigns entering the market soon, noting that Egypt is preparing its regulatory environment ahead of its USD 1 bn maiden sovereign sukuk issuance, which could take place early in 2020.

Background: The government is currently in talks with Arab banks to manage its maiden USD 1 bn sovereign sukuk issuance later this fiscal year, government sources told us earlier this month. A senior government official had told us in May that the government is hoping to appoint banks by September for the issuance to take place in early 2020, after initial plans to take the issuance to market last fiscal year were shelved to give the government more time to comply with Euroclear requirements.

EXCLUSIVE- FinMin taps economist Hesham El Hamawy to succeed El Monayer: Hesham El Hamawy has been appointed as vice minister of finance for tax policy, a position that has been empty since Amr El Monayer resigned in March 2018, two senior sources in government tell Enterprise. Government officials had previously told us that PepsiCo’s Middle East and Africa taxation boss, Khaled Abu Zahra, had been nominated for El Monayer’s job. El Hamawy is a professor of tax and accounting at Cairo University, and is set to be sworn in once President Abdel Fattah El Sisi returns from Japan, where he is attending the Tokyo International Conference on African Development.

Ramy Farag is also being tapped as assistant to the finance minister for taxation, our sources tell us. Farag was previously a tax partner at Ernst & Young Egypt.

We already have a RIZ and a CIZ — are we about to get a JIZ? Japanese investors attending the Tokyo International Conference on African Development (Ticad) have been urged to set up an industrial zone in the Suez Canal area, Ahram Online reports. Speaking at the Egyptian-Japanese Business Forum yesterday, deputy chairman of the Egyptian-Japanese Business Council Mohamed Abul Enein said the industrial zone would “bring about a big leap in relations” between the countries, and help Japan penetrate markets in Africa, Europe and the Middle East. The proposal was first floated by a Japanese business delegation during a visit to Cairo in March.

El Sisi meets Abe, JICA boss: President Abdel Fattah El Sisi met yesterday with Japanese Prime Minister Shinzo Abe on the sidelines of the conference, according to an Ittihadiya statement. The two leaders discussed Japan’s trade with and investments in Africa, including the projects it is financing in Egypt, as well as regional issues. The president also met with Japanese International Cooperation Agency (JICA) President Shinichi Kitaoka to discuss initiatives to benefit Egypt’s higher education system. JICA has recently stepped up its activity in Egypt, providing finance for a number of projects including the government’s universal healthcare scheme, a solar plant in Hurghada, and an expansion of a children’s hospital in Cairo.

El Sisi gave a speech at the conference about the importance of investing in Africa and driving development and technological advancements throughout the continent. He stressed that developing the content requires working on countries’ infrastructure, capitalizing on the continental freetrade zone, and creating more jobs, particularly for the youth. El Sisi, who is attending the summit both as the president of Egypt and as the chairman of the African Union, also called on international financial institutions to provide sustainable financing to support this development.

Elsewedy, Toyota sign agreement for Zambia solar plant: Separately, Elsewedy Electric and Toyota Tsusho Corporation signed an agreement yesterday to construct two photovoltaic power plants with a combined production capacity of 50 MW in Zambia, according to an Investment Ministry statement. The project, the cost of which was not disclosed, will be financed by the Japan Bank for International Cooperation.

Also at the conference: Investment Minister Sahar Nasr signed an MoU with Japan’s MUFG Bank to encourage investments between Egypt and Japan, according to a ministry statement. The agreement will see the two countries exchange investment and legislative information, in addition to organizing meetings between Egyptian and Japanese businessmen.

CABINET WATCH- The Madbouly Cabinet approved yesterday 17 oil and gas exploration and production agreements EGPC, Ganope, and Egas signed with unnamed international companies, according to an official statement. The E&P agreements cover concessions in west Fayoum, north Beni Suef, the Gulf of Suez, and the Western Desert, among others. Ministers also signed off on a presidential pardon for an undisclosed number of prisoners ahead of the 6 October holiday.

STARTUP WATCH- Egyptian fintech startup NowPay has raised USD 600k in seed funding from Silicon Valley’s Endure Capital and 500 Startups, Digital Boom reports. Launched early this year, the startup helps corporate employees in emerging markets access their salaries in advance at any point in the month and manage their finances through the app. Co-founder and CEO Mostafa Ashour says that NowPay is meant to employees better manage their budgets and avoid cash flow problems resulting from unexpected events.

On the rare occasion when a violent volcanic eruption triggers lightning, the result is absolutely breathtaking, Chilean freelance photographer Francisco Negroni shows us in a photo essay. We’ll say though — this feels more like the kind of thing you’d probably enjoy a lot more from the comfort and safety of your laptop screen. Standing beside an erupting volcano as hundreds of lightning bolts shoot from the sky is definitely something that could end in tears.

It’s another quiet morning in the foreign press: Kawa News takes note of Egyptian recycling and waste-management initiatives, including Bekia and Go Clean.

Russia’s nuclear-for-influence strategy in Africa is coming under fire: Russia’s provision of nuclear technology to countries throughout Africa, part of efforts to shore up its influence in the continent, has attracted criticism for being unsuitable and unlikely to benefit the continent’s poorest people, Jason Burke writes in the Guardian. The light-water technology used by companies like Rosatom, which is building Egypt’s USD 30 bn Dabaa nuclear power plant, typically generates more power than most African countries have the infrastructure to distribute. Critics argue that large projects designed to distribute electricity over national grids ― which are absent in many African countries ― will perpetuate the exclusion of those who already lack access to energy.

The Ruskies using energy for influence is not unlike China’s use of the Belt and Road Initiative in Africa and Asia for the same goal. Of Africa’s 54 countries, 39 have signed on to Beijing’s Belt and Road Initiative, including Egypt, which is partnering with China on massive infrastructure projects in construction, energy, transport, trade and industry. Meanwhile, thousands of Chinese entrepreneurs have poured into the continent, running some 10k companies and working in fields that include retail, factories and farming. As economic ties grow, so do military and diplomatic ones. The BRI has also been raising eyebrows for luring developing countries into debt traps, with some countries even going as far as describing the Chinese initiative as the “new version of colonialism.”

Some criticism is fair, but there’s a reason Moscow and Beijing are welcome in Africa. Russia and China clearly both want to make strategic and economic gains through their relationships in Africa. But while questioning their motives or the impact on Africa is justified, sometimes the criticism leveled smacks of hypocrisy. Washington’s recent panic about the growth of Chinese and Russian influence in Africa, for instance, stems from a threat to its own interests, and also shows wilful blindness to the appetite for rapid development initiatives on the continent that have allowed ties with Russia and China to strengthen so rapidly.

The Israeli military is churning out tech entrepreneurs: Israel’s booming tech startup scene is being driven by former army conscripts with experience with the military’s highly-advanced war tech, Bloomberg says (watch, runtime: 27:56). It’s a remarkable industry, but one that marginalizes Arab Israelis and Orthodox Jews.

Unido to provide USD 5.6 mn to finance solar thermal heating in factories: The United Nations Industrial Development Organization (Unido) has agreed to provide USD 5.6 mn in funding for solar thermal heating projects at Egyptian factories, the local press reported. The project targets using solar thermal heating in 100 industrial facilities in the chemical, food and textile sectors within for years. The first phase will cover 35 industrial facilities.

The Agriculture Ministry has issued a decision to reduce the amount of land used to cultivate sugar beets to 3.6k feddans from 5k feddans in the 2019-2020 season, according to Al Mal. The ministry’s decision comes in response to oversupply in the market, which has already resulted in several farmers cultivating less of the crop, head of the ministry’s sugar crops council Mostafa Abdel Gawad tells the newspaper.

Arab International Pharmaceuticals Group (AIG) plans to begin operating its new EGP 400 mn antibiotics factory in Badr City by the end of this year, according to local news. AIG had initially planned to inaugurate the factory last year, and had expected to invest EGP 200 mn in the facility. AIG raised its capital to finance the extra costs rather than taking out a loan.

Future Pharma is planning to invest USD 3 mn to set up three new production lines, two of which are to produce tablets and capsules, while the third will be a packaging line, the company’s head of sales Rafik Sayed tells the local press. The company plans to add the lines next year. Future Pharma is also looking to tap new export markets in Uganda, the Ivory Coast, and Saudi Arabia.

The New Urban Communities Authority (NUCA) has approved SODIC subsidiary Al Yosr for Projects and Agricultural Development’s master plan for The Estates, its planned new development in west Cairo, according to a statement (pdf). The 630k sqm development is expected to launch in 4Q2019, and will include 500 upscale homes.

Madinet Nasr Housing & Development (MNHD) has signed a EGP 300 mn short-term loan agreement with the Arab African International Bank, according to an EGX disclosure (pdf). MNHD plans to use the loan to finance its Sarai projects.

Nasser Social Bank (NSB) has tapped EFG Hermes and CI Capital Asset Management to manage its securities portfolio, NSB Managing Director and Vice Chairman Sherif Farouk told the local press.

It’s not just J-Lo and Rania Youssef — Egyptian lawyers want to regulate what male celebrities wear, too: Lawyers are petitioning the Musicians’ Syndicate to ban singer Mohamed Ramadan from performing at concerts due to his “provocative” outfits, according to Egyptian Streets. Ramadan’s clothing choices and dance routines at a recent concert in Sahel “were deemed ‘abusive’ and ‘incompatible with Egyptian values and principles.’”

Forbes recognizes Azza Fahmy: Prominent jewellery designer Azza Fahmy has once again made us proud, coming in fifth in Forbes’ top 10 list of “Women Behind Middle Eastern Brands.” Fahmy last year opened a store in London as part of global expansion efforts.