THIS MORNING: Big OPEC+ meeting today; Shoukry in NY ahead of GERD meeting; China dunks on Didi.
Good morning, friends — We open today’s issue with good news: Wednesday is looking like the last time we will have to utter the words ’Ever Given’ after the Suez Canal Authority said yesterday it will finally unshackle the container ship this week following an agreement with its owners.
Though the news seems to be dominating the conversation on Egypt internationally this morning, of greater importance to us here at home is the news that from tomorrow covid restrictions on hotels and other non-essential businesses will be loosened, allowing them to operate at up to 70% capacity. All that and more in this morning’s news well, below.
THE BIG STORY THIS MORNING-
It’s the UAE vs the world as high stakes OPEC+ meetings resume today to hash out an agreement on raising oil production. “Accept our terms or blow up the OPEC+ alliance” appears to be Abu Dhabi’s negotiating tactic, which was the only country to refuse to sign onto an agreement to ramp up production last week. The UAE is demanding that it be allowed to produce more oil and argues that the quotas negotiated by Saudi Arabia and Russia are unfair.
The core of the disagreement: baselines. Under the current supply-cut regime, baseline production figures are used to calculate how much each country is allowed to produce. The UAE’s current baseline is 3.2 mn barrels per day, which it claims is too low and should be 3.8 mn. Abu Dhabi is also frustrated seeing the bns of USD it has invested in expanding capacity going to waste, and wants to ramp up production.
A clash between allies: Neither the UAE and Saudi Arabia have signalled that a pact is around the corner, with energy ministers from both countries taking uncompromising public stances.
Stakes are high: Failure to find an agreement would do one of two things. Oil prices — already surging due to rising demand and tightening supply — are sent even higher as output fails to meet demand. Or the fractious meetings cause a disintegration of the loose alliance of oil producers, triggering another race-to-the-bottom price war of the kind we saw last year. Bloomberg and CNBC have the info.
THE BIG STORY ABROAD- The global business press is zoning in on the latest regulatory crackdown in China, which yesterday pulled the plug on ride-hailing giant Didi just days after it listed on the Nasdaq. The country’s cyber security regulator has ordered Didi removed from domestic app stores, alleging that the company has illegally collected customer data and violated antitrust rules. The decision comes days after the ride-hailing giant raised USD 4.4 bn in the biggest Chinese IPO in the US since 2014. The story is leading the front pages of the Financial Times and Bloomberg, the Wall Street Journal and CNBC.
***CATCH UP QUICK on the top stories from yesterday’s edition of EnterprisePM:
- Leasing provider GlobalCorp’s owners want out: Unnamed Europe-based investors are looking to snap up 90% of Ezdehar and Sanad Fund’s leasing and non-banking financial services portfolio company GlobalCorp.
- Tourism staging (somewhat) of a comeback: Tourism revenues clocked in at nearly USD 4 bn in 1H2021, almost as much as they were in the whole of 2020.
Shoukry is in New York today ahead of the UN Security Council meeting on GERD: Foreign Minister Sameh Shoukry flew to New York yesterday to prepare for the UN Security Council meeting on the Grand Ethiopian Renaissance Dam (GERD) crisis that is due to take place later this week, according to a statement by Foreign Ministry spokesperson Ahmed Hafez. Shoukry is set to meet with a number of officials from the council to press Egypt’s position on Ethiopia unilaterally resuming the second filling of the dam.
The council could meet this Thursday to discuss the crisis, the Sudanese government said last week. Cairo and Khartoum are also cooking up a draft resolution to hand to the council that would set a six-month deadline for the three countries to wrap up negotiations and draft a binding agreement on filling and operating the dam.
Will anything come of it? While Egypt and Sudan are pushing hard for the matter to be resolved at the meeting (and Ethiopia pushing in the opposite direction), French UN Ambassador and council president Nicolas de Riviere told reporters last week that the meeting will likely not amount to much.
The British Egyptian Business Association’s (BEBA) virtual education week starts today: Three seminars will take place today and tomorrow, starting with a talk about skills-based learning at 10am this morning. A session focusing on the future of education investment will follow at 12:30pm, before tomorrow’s talk on the digitalization of education in Egypt, which will be held at 12pm.
Among the handful of dates you should keep an eye on at the start of the month:
- PMI out tomorrow: Egypt’s purchasing managers’ index for June lands tomorrow morning at 6.15 CLT. PMIs for Saudi Arabia and the UAE are out today.
- Foreign reserves figures for June will be out early next week.
- Inflation data for June will be released next week.
CIRCLE YOUR CALENDAR-
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.