TONIGHT: IMF thinks Egyptian economy will rebound. + Are traditional banks going extinct? ALSO: Save Maadi.
Good afternoon, wonderful people — we hope you’re all looking forward to a week off as much as we are. It literally could not have come a moment too soon.
REMINDER- Sunday is technically a workday (good luck finding anyone at their desks), but banks and the stock exchange are closed Monday-Thursday in observance of Eid El Adha. Saturday, 24 July, is a holiday for government folks and the private sector alike in observance of the 23 July Revolution. We’re bridging, so you can next expect Enterprise in your inbox at 6am on Sunday, 25 July.
THE BIG STORY TODAY- The IMF thinks our economy is in line for a strong rebound in FY2021-22, saying that solid fiscal and monetary policies over the past twelve months will help propel us to a 5.2% GDP growth in the current fiscal year from 2.8% in the last one. We have the full rundown in this afternoon’s Speed Round, below.
THERE’S LOTS HAPPENING NOW-
GOOD NEWS- The World Health Organization (WHO) says Egypt is now “low-risk” for the continued spread of covid-19 spread, Health Minister Hala Zayed said, according to a cabinet statement. Egypt has so far administered 4.85 mn doses of covid-19 vaccines to citizens, according to the WHO country dashboard. Egypt was not one of the countries mentioned in WHO’s MENA report this week that pointed to the “catastrophic” surge of cases in the region.
So maybe you can take us off that red list now, ya Engleez?
Maadi folks are not going gently into that good night as opposition mounts to the Transport Ministry’s plan to blast a highway through the middle of the historic neighborhood. Your recommended reading on that front today is Nadine Khaled’s piece in Egyptian Streets, which includes pointers to a new Instagram feed for people objecting to the plan.
What can you do? The folks behind the Save Maadi Instagram feed are suggesting people file complaints with shakwa.eg (the government’s official “unified complaints” portal) or the state’s hotline: 16528. We’ve also heard that there’s an anti-highway marathon in the works.
Two rays of hope: MPs have picked up on the unpopularity of the highway (watch, runtime: 8:07) and a Change.org page we noted yesterday continues to rack up signatures.
More GERD talks today: South Sudan’s Irrigation Minister Manawa Peter Gatkuoth is in Cairo today for talks about the Grand Ethiopian Renaissance Dam (GERD), according to El Shorouk. Egypt has been stepping up GERD talks, with Foreign Minister Sameh Shoukry holding meetings with his European counterparts following Egypt’s unsuccessful bid to get the spineless buggers at the UN Security Council to intervene in the dispute.
The prospect of a water shortage has Egypt putting desalination on the front burner — a development that’s attracting plenty of foreign interest. Among those sniffing around: Prime Minister Mostafa Madbouly met with the CEO of Norwegien renewable power producer Scatec, Raymond Carlsen, according to a cabinet statement. The two were joined by officials from Orascom Construction and Metito — the pair that recently delivered a USD 130 mn seawater desalination plant in East Port Said. No concrete announcement came out of the meeting, but Madbouly is pushing the government and businesses alike to push ahead with new projects.
** CATCH UP QUICK on the top stories from today’s EnterpriseAM:
- ADQ snags 99.9% of Amoun Pharma in MTO: Amoun Pharma shareholders have agreed to sell a 99.9% stake in the company to Abu Dhabi sovereign fund ADQ in a mandatory tender offer with shares at EGP 37.8 a piece.
- Egyptian events startup Eventtus acquired by US’ Bevy: Bevy will integrate Eventtus’ technology into its services and bring its 20 staff members, including founders Mai Medhat and Nihal Fares, onto the Bevy team.
- Russia still seems wary about direct flights to the Red Sea: Russia is proposing to set up a Russian-Egyptian group that will conduct “round-the-clock monitoring” of the situation in Egypt to protect Russian tourists.
THE BIG STORY ABROAD- As big a news day as it is for us here in Egypt, things are slow internationally. China’s warning of “economic uncertainty” despite relatively strong growth in 2Q dominates headlines everywhere from the Financial Times to the Wall Street Journal. Reuters, meanwhile, notes that more than 20 are dead and dozens missing in Western Europe “as record rainfall in western Europe caused rivers to burst their banks, swept away homes and inundated cellars.” You have climate change to thank.
What’s the issue with China? The country’s post-pandemic recovery slowed down in the quarter that ended 30 June. GDP grew 7.9% y-o-y in the second quarter, according to the state’s National Bureau of Statistics, down sharply from the first quarter of this year, where 18.3% y-o-y growth was in no small part thanks to a low base effect. The warning bell: On a quarterly basis, China’s economy grew 1.3% in 2Q2021 — down from 5% q-o-q in the first quarter. Even the National Bureau of Statistics has said that while the economy had continued to “recover steadily,” the rebound was “unbalanced,” according to the FT.
Our friends at CIB were named Egypt’s best bank in the 2021 Euromoney awards. CIB is “a powerhouse in its market and, increasingly, the wider region,” Euromoney’s website notes, dubbing the bank as “integral” to Egypt’s economy. The bank’s quick reaction to the pandemic and support to its retail and corporate clients was also acknowledged, along with its acquisition of a 51% stake in Nairobi’s Mayfair Bank.
HSBC was named Egypt’s best investment bank. Euromoney specifically noted two transactions in the past year in which HSBC was involved, namely Egypt’s USD 750 mn green bond facility and a triple tranche bond of USD 3.75 bn issued by the Finance Ministry, which attracted USD 13.7 bn in orders.
Emirates NBD took home the gong for best bank in the Middle East while Citi was dubbed the region’s best investment bank. You can find Euromoney’s full awards list for the Middle East here.
???? CIRCLE YOUR CALENDAR-
China’s foreign minister is due in town on Saturday for a three-day visit, according to an exclusive from Al Ain newspaper. Neither Cairo nor Beijing have said much about the agenda, but expect GERD, GERD and GERD to be on the agenda alongside trade and development finance.
Expect a decision on fuel prices in the coming days: The government’s fuel pricing committee has been in talks since the beginning of the month over whether to raise, cut or leave on hold fuel prices during 3Q2021. We were expecting to hear something yesterday but a government official had suggested that a decision could instead be made later in the month.
Today is your last chance to visit the Cairo International Book Fair at the Egypt International Exhibition Center. The event will run through 15 July and the fair’s committee has now allowed the exhibition ground to operate at 70% capacity.
The Clean Energy Business Council’s webinar Women Entrepreneurs in Canada and the Middle East is taking place on 28 July at 3pm, showcasing female entrepreneurs working in climate tech in the two regions, and highlighting the challenges they face.
???? FOR YOUR COMMUTE-
Inflows into exchange traded funds are on track to surpass 2020 figures, clocking in at USD 659 bn in 1H2021, according to the Financial Times, citing data from independent ETF and ETP research and consultancy firm ETFGI. To put it into perspective, ETFs raked in USD 767 bn in inflows in all of 2020. Equity-based ETFs alone in 1H2021 managed to outpace inflows from both last year and the year before, bringing in USD 459 bn, up from USD 366 bn in all of 2020. They even outperformed pre-pandemic years, with 2019 equity ETFs scoring USD 283 bn.
What’s driving the appetite? For one, there’s the rebound of asset prices following the lows of the pandemic. Then, there’s an increased adoption of them across the board. This is particularly the case when it comes to traders who initially had been looking to beat the market, said Todd Rosenbluth, head of mutual fund and ETF research at CFRA. Adoption is also increasing among insurance companies and other institutional investors, he notes. We also noted earlier this month that US retail investors bought nearly USD 28 bn of stocks and ETFs in June, the highest figure since at least 2014.
Guess what else is drawing investors into ETFs? The popularity of ESG investing appears to be a major development as investors increasingly push forward ESG mandates on asset managers, the salmon-colored paper notes.
???? ON THE TUBE TONIGHT-
Is it even Eid if you don’t watch a classic play with the family? You can watch all your favorites on Netflix during the holiday. The streaming platform added some of the biggest classics last year including Madraset el Moshaghbin, Shahid Mashafsh Haga, Al Motzawgoon, and El Wad Sayed El Shaghal.
Egyptian filmmaker Omar El Zohairy’s Feathers was awarded the Nespresso Grand Prize at the Cannes Film Festival and is still in the running for the Camera d’Or award, according to Deadline. The surrealist film sees a strict father turned into a chicken after a magic trick goes wrong at a children’s birthday party. The prominent festival will run until Saturday night. Feathers made its debut at Cannes, but you can check out the trailer for the film here (watch, runtime: 01:50).
⚽ The CAF Champions League final is this Saturday at 9pm, where Al Ahly and South Africa’s Kaizer Chiefs will go head-to-head for the trophy at Stade Mohamed V in Casablanca.
???? The Suns and The Bucks will compete three more times before we come back from the holiday, with matches to take place on Sunday at 3am, Wednesday at 3am, and Friday, 23 July at 3am. The two are currently tied 2-2 in the NBA finals after the Bucks snagged a win yesterday.
???? The Tokyo Olympics opening ceremony is taking place on Friday, 23 July. Egypt is set to compete in 23 sports from football and archery to cycling and gymnastics, according to Kingfut. We wrote all about the past, present, and future of the Olympics in June’s issue of Your Wealth.
???? OUT AND ABOUT-
The Sinatra Show by Gaby Bishara will be on at The Room in Garden City tonight at 9pm.
☀️ THIS WEEK’S WEATHER- Cairo will be an open-air oven for most of the break, with temperatures in the range of 39-42°C, our favorite weather app tells us. Are you heading to Sahel along with the other half of Cairo? You can expect daytime highs of 31-34°C through Thursday.