What we’re tracking on 9 July 2017
By now, you must have heard that the Central Bank’s Monetary Policy committee raised interest rates another 200 bps last Thursday. The move has caused quite a bit of consternation among the private sector, not unlike last May’s interest rate hike (we have more in the Speed Round). We will be keeping an eye on how this will impact the EGX this morning, how banks will respond, business — considering some have already started saying that CAPEX will be cut — and inflation. We are expecting word from the CBE on inflation rates for June sometime this week.
On that note, more price hikes have come after the Electricity Ministry announced last Thursday that it was raising electricity prices around 42% across the board. This coupled with fuel hikes late last month and an expected increase in metro ticket prices (more in Speed Round) is sure to see inflation grow this month. The question is, will it surpass the government’s target of a 4.5% inflation rate increase.
Supply Minister Ali El Moselhy is scheduled to discuss the cost of producing subsidized bread at a meeting today with representative from the Federation of Egyptian Chambers of Commerce’s bakeries division, Al Mal reports. There are divergent opinions on the amount the government subsidizes, with the Supply Ministry, and the bakeries divided on the issue. The three sides are also expected to discuss the price of diesel provided to bakeries, after the government moved to raise fuel prices late last month. El Moselhy had said the government would ensure the price hikes would not affect the cost of bread or other subsidized food staples.
When companies get tangled in regional political beefs: Vodafone Egypt is facing backlash domestically due to the network’s branch in Qatar took sycophancy to a whole new level by changing its name to “Glorious Tamim,” which Egyptians have perceived as the British company taking a stance against Egypt and the GCC countries, Al Arabiya reports. The company has been forced to deny that this was company policy and that this was the decision of Vodafone’s Qatar subsidiary (more in Last Night’s Talk Shows). The latter should taken a lesson from France’s Total, which has made it clear it is not taking sides in the issue, with its CEO stressing that the company’s business is not affected by the politics of the region, according to Reuters.
…Meanwhile, Egypt, Saudi Arabia, the UAE, and Bahrain vowed to step up their punitive measures against Qatar, saying that Doha’s rejection of their 13 demands is reflective of its commitment to destabilize the region, according to a joint statement carried by the Saudi Press Agency. US Secretary of State Rex Tillerson and UK Foreign Secretary Boris Johnson are currently playing shuttle diplomacy, Reuters reports.
UK’s diplomacy since Brexit has certainly gone downhill. This is what its ambassador to Cairo John Casson told Al Mal about our airports: Egypt has not yet fulfilled the necessary security procedures at airports to resume flights. He adds that there is progress and increased cooperation in intelligence between the two countries. So all the platitudes of friendship and improving ties and ending travel restrictions “soon” have yet to amount to anything more than haggis. A delegation is set to visit Egypt to follow up on airport safety measures within the next two weeks. UK tourists know better, with 1H17 seeing a 61% y-o-y increase in the number of nights spent by British tourists in Egypt, the ambassador said.
The 4th Annual Mashable Social Media Day kicked off yesterday and is running till tomorrow at the Greek Campus, according to a press release. Representatives from Facebook, Instagram, IBM Watson, Social Bakers, and Quintly are attending. Social Media Day is also providing participants with job opportunities through a partnership with Wuzzuf where they can apply for vacancies presented in an exhibition.