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Thursday, 23 September 2021

TONIGHT: Egypt began selling USD-dominated bonds today. + Is Mercedes-Benz resuming assembling in Egypt? ALSO: US pushes Egypt to improve human rights record.

Well, wonderful people, that’s a wrap on another workweek. We hope this second day of fall has been good to you — and we’ll leave it at that, because we have tons of news to dive into before we can suggest (below) what you may want to watch tonight or where you may want to go this weekend.


#1- Egypt has tapped the global bond market: Egypt has begun selling USD-denominated bonds today, with 6-, 12-, and 30-year tenors, Finance Minister Mohamed Maait tells us, confirming a story broken by Reuters this morning that has since been widely picked up. Egypt is offering the 6-year bonds at a yield of 6.125%, while the 12- and 30-year bonds carry yields of 7.625% and 8.875%, respectively. Maait did not say how big the offering is.

Piggybacking off the Fed: Maait hinted that the US Federal Reserve’s decision yesterday to push its expected tapering of its stimulus program to November made it the right time to go to the markets now before US bonds become more competitive.

Advisers: HSBC, FAB, Citibank, Standard Chartered, and JP Morgan are advising on the sale.

^^We’ll have updates on demand for the bonds in Sunday’s EnterpriseAM.

#2- Is Mercedes-Benz one step closer to resuming assembling in Egypt? Mercedes-Benz received a 20k sqm plot of land in the Suez Canal Economic Zone (SCZone), which will be used as a logistics base that will distribute cars locally and for re-export, SCZone head Yehia Zaki tells us, confirming a story that first ran this morning in Al Borsa. The logistics hub will also see the company warehouse and distribute components and spare parts, says Zaki. The company had signed the agreement for the logistics base back in 2019.

Does that mean assembly is back on the table? That’s not clear yet, and Zaki would not comment on when it may actually happen. The company got our hopes up back in September 2019, when it said it expected to produce its first locally assembled vehicle in years by the second half of 2020. Government sources told us last year that local assembly would resume “soon.” The pandemic and the subsequent global chip shortage have created havoc for the global auto industry, and we haven’t heard news of the company’s plans to resume assembly in the months since.

Background: The luxury carmaker shut down its local assembly in Egypt in mid-2015, saying at the time that Egypt’s trade agreement with the EU — which saw tariffs on European cars to zero as of 1 January 2019 — would make it economically infeasible to continue its local assembly operations here long-term.

IN OTHER AUTO NEWS- Prime Minister Moustafa Madbouly met with the regional heads of Nissan, Skoda, and other big brand cars today with a view to enticing them to assemble vehicles here, according to a cabinet statement.

#3- Egypt and the US are looking forward to strengthening bilateral ties, Egyptian Foreign Minister Sameh Shoukry and US Secretary of State Antony J. Blinken said in a meeting yesterday in New York City on the margins of the UN General Assembly, according to a statement by the US embassy in Egypt. The pair discussed regional issues including Israeli-Palestinian relations, Libya, and Egypt’s leadership of the fledgling Eastern Mediterranean Gas Forum.

The US is pushing for Egypt to improve its record on human rights to “facilitate” a “strengthened partnership,” including through implementing measures arising from the country’s first national human rights strategy, announced earlier this month.

More to come: Blinken and Shoukry agreed to meet again to discuss regional issues, human rights, security cooperation, and economic relations, the statement said without specifying a date.

IN OTHER DIPLOMACY NEWS- Sweden wants to help our green transition. Swedish Trade Minister Ann Hallberg is town for meetings with cabinet ministers. She noted that a number of institutions are willing to fund Egyptian companies in the green economy during her meeting with Electricity Minister Mohamed Shaker, according to a cabinet statement. She also discussed support for smart city tech in Egypt’s cities with Deputy Housing Minister Khaled Abbas, according to a cabinet statement.

THE BIG STORY ABROAD- With Xi Jinping’s ruling party reluctant to bail out China Evergrande, Beijing is telling local officials to make preparations for a “possible storm,” the Wall Street Journal reports in an exclusive. Traders’ attention has been split between the Fed and Evergrande all week, and pundits who have suggested that we need not worry about a collapse of Evergrande may be mistaken. Beijing is now bracing for “social and economic fallout” in the event Evergrande collapses. “Local governments have been tasked with preventing unrest and mitigating the ripple effect on home buyers and the broader economy, for example by limiting job losses” in the event the country’s second-largest home builder fails.

What to watch for next: The world’s most-indebted company has a big interest payment due today on its offshore debt, and regulators have “asked” it to “avoid a near-term default,” Reuters notes.

HAPPENING NOW- Global markets have (for the most part) taken in stride the Fed’s signals on the tapering of stimulus this fall and an interest rate hike as early as next year, which we covered earlier today in EnterpriseAM. European markets are all handily in the green this morning. Futures show North American markets following suit later today. The Dow and S&P both snapped four-day losing streaks yesterday after the Fed suggested it would start tapering before year’s end and could hike interest rates next year.

SIGN OF THE TIMES- The UK is begging consumers not to “panic buy” amid supply chain kinks that are being made worse by soaring natural gas prices. Officials are trying to reassure the public that the UK ‘s not heading into a “1970s-style ‘winter of discontent’ of strikes and power shortages” and empty store shelves.

IS THERE LIGHT AT THE END OF THE TUNNEL in the Emirates? Dubai’s jobs market is the hottest it has been in nearly two years, adding thousands of jobs thanks to employers including Amazon, Emirates Airlines and the hotel industry.

Get your gadget freak on with the new iPad Mini. It’s not an iPad Pro Mini and there’s no separate keyboard for it (yet). But the updated design, crisp screen and blazingly fast processor is getting really solid reviews everywhere from the Wall Street Journal to John Gruber’s Daring Fireball. Want to watch rather than read? Rene Ritchie and MKBHD have got you covered.

Does your taste run more to Windows? You’ll definitely want to check out Microsoft’s powerful new Surface Laptop Studio, which The Verge tells us is being billed as the successor to the Surface Book. It features three pretty cool “modes” for how you can use the screen and a nice new Surface Slim Pen 2, sold separately. CNBC has a rundown on other announcements from yesterday’s event, including a Surface Duo 2 smartphone that we have a hard time getting excited about.

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

  • The capital gains tax is definitely coming to the EGX on 1 Jan: Finance Minister Mohamed Maait confirmed in an interview with CNBC Arabia earlier this week that a 10% tax on the gains investors make on EGX transactions will be coming into effect on 1 January.
  • A pilot program for B2C e-invoicing has kicked off: The Finance Ministry has announced the rollout of electronic invoicing for business-to-consumer transactions, with 100 companies taking part in a six-month trial phase by recording all transactions via a real-time electronic system.
  • Is Vodafone Egypt back in play?: Saudi Telecom (STC) may be resurrecting its bid to acquire a majority stake in Vodafone Egypt, nine months after talks broke down with its parent company. Both Vodafone Egypt and minority shareholder Telecom Egypt denied yesterday that talks had restarted.


In town next week: White House National Security adviser Jake Sullivan will visit Cairo next week as part of a brief Middle East tour that will take him to Saudi Arabia and the UAE, sources with knowledge of the matter tell Axios.

Conference season continues next week with ITIDA’s DevOpsDays Cairo 2021, which is being organized together with Software Engineering Competence Center, DXC Technology, IBM Egypt and Orange Labs. The event will take place on Wednesday, 29 September. Other events include:

  • Egypt Projects 2021 construction expo, which will take place at the Egypt International Exhibition Center on 30 September-2 October.
  • The Cairo International Fair, which will take place on 30 September-8 October at the Cairo International Conference Center.

ALSO NEXT WEEK- The deadline to register for the AUC Business School’s Private Equity Diploma is coming up on 28 September.

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

☀️ TOMORROW’S WEATHER- Friday and Saturday promise gorgeous fall weather, with daytime highs of 31°C and nighttime lows of 20°C, our favorite weather app tells us.

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