THIS MORNING: The global energy crisis is driving prices up at the pumps in Egypt + UK to recognize our vaccination certificates
Good morning, everyone. We hope you enjoyed your three-day weekend , because it’s looking like a busy week ahead. Let’s jump straight in.
WHAT’S HAPPENING TODAY-
Inflation figures are due out today: State statistics agency Capmas is expected to release data on inflation in September. Annual urban inflation hit its highest level in nine months in August on the back of rising food, fuel and transportation costs, with headline urban inflation rising slightly to 5.7%, from 5.4% in July.
So far, annual headline inflation is well within the CBE’s inflation target of 7%( ±2%) on average by 4Q2022 — and is consistent with price stability over the medium term, which has allowed the central bank to keep interest rates on hold for seven consecutive meetings. That said, It is unclear how the CBE’s Monetary Policy Committee will react in light of the government raising fuel prices over the weekend. The committee is set to next meet on 28 October to decide on interest rates.
ALSO HAPPENING TODAY- Public schools and traffic (a lot of it): Expect your commutes to be a little extra painful starting today, as public schools and universities are both back in session.
REMINDER- Covid-19 vaccination is now mandatory for all 18+ year-old students, educators and staff at private and public schools and universities, according to a government directive issued in late August. 18+ year-old students can receive their vaccines through their schools, health officials said at the time. Education Minister Tarek Shawky instructed officials to inspect schools to ensure that all covid protocols are being followed, Shawky said at a meeting with parents and teachers on Wednesday to mark the start of the academic year.
Want to know how private schools and universities are coping with the mandates? Read our poll of education operators here.
SOME GOOD NEWS- The UK will now recognize Egyptian covid vaccination certificates starting tomorrow, UK Ambassador to Egypt Gareth Bayley announced on Twitter. Travelers arriving to the UK from Egypt will no longer have to quarantine if they’re fully vaccinated with the Oxford / AstraZeneca, Pfizer / BioNTEch, Moderna or Johnson & Johnson jabs at least 14 days before you arrive in the UK. A PCR test before traveling will not be required, he added.
After arrival: Travelers must fill out a passenger locator form 48 hours before their flights and take a day-two PCR test after arrival to the UK.
ON A RELATED NOTE- Sharm El Sheikh welcomed its first direct flight from London yesterday after Egypt’s removal from the UK’s red list of countries which travelling to from the UK is banned, Al Borsa reports. Cairo also received its first Libyan Airlines flight from Tripoli in over seven years yesterday, after flights had been suspended due to political turmoil in the country, Masrawy reported.
THE BIG STORY OVER THE WEEKEND- Is the global energy crisis hitting home? The Oil Ministry announced that it was raising fuel prices by around EGP 0.25 per liter on Friday amidst a global energy crisis that drove energy prices sky-high last week. We break down the new prices in this morning’s Energy section. That same energy crisis, combined with kinks in the global supply chain and poor harvests in some key countries, saw equity markets plummet last week and bond yields rise.
What’s shaping up to be a global energy crisis topped headlines abroad over the weekend as well, as US crude futures crossed the USD 80 per barrel line for the first time since November 2014, Bloomberg reports. Futures for December Brent crude contracts rose 0.54% on Friday to USD 82.39 / bbl (Brent is the global standard energy price).
Meanwhile, the UK is still running on fumes as a shortage of petrol lingers. 16% of filling stations in London and the Southeast of England are without fuel, the UK’s Petrol Retailers Association said in a statement noted by Bloomberg. It was at 12% on Thursday. Meanwhile, analysts are forecasting a rise in UK households’ energy bills by at least 30% early next year as wholesale natural gas prices continue to surge, according to the FT.
On another note: The crisis, which is gripping Europe the strongest, may have placed Vladimir Putin’s Russia in a prime position to push forward its ambitions to emerge as a great energy power, but it could just be a “once-off” event as the world undergoes an “energy transition” to greener power, Meghan L. O’Sullivan writes for Bloomberg.
Markets closed in the red last week: US and European equities rode last week’s energy crisis-induced downward streak all the way to the weekend. The Dow Jones and the S&P500 were down 0.71% and 0.06% respectively. Adding pressure to US equities heading into Monday is a US Labor Department jobs report showing that new jobs saw the smallest gain since December 2020, the WSJ reports. Over in Europe, the CAC fell 0.43%, while the FTSE 100 dropped 0.07% on Friday. The DAX, and Asian markets, were largely spared and closed in the green.
SOUND SMART- It’s a big day for watchers of European politics, where Austrian Chancellor Sebastian Kurz has resigned after being named as a suspect in an investigation into the alleged misuse of public funds. Foregn Minister Alexander Schallenberg will take over as Chancellor. Also: The Czech Republic is going to be run by Pirates. We kid you not: The rightwing Together coalition and the centrist PirStan coalition of the Pirate Party and the Mayors and Independents is on track to take power.
SOME GOOD NEWS- Egypt moved to the top of Group F of the FIFA 2022 World Cup qualifiers after beating Libya 1-0 on Friday.
In Karate: Egyptian Olympic gold medalist Feryal AbdelAziz and Ali El Sawy were among the players to be awarded the 2021 Grand awards by the World Karate Federation, marking them as some of the best players of the season on an international level.
***CATCH UP QUICK with some of the other top stories from Wednesday’s edition of EnterprisePM:
- IMF urges EM policymakers to get a grip on cryptocurrencies: The IMF is warning EMs not to get sucked into the unregulated, Wild-West-style ecosystem that has sprung up around the cryptos, as their adoption increases there.
- Ditto greenwashing: The IMF is calling on governments to protect investors from greenwashing in the sustainable investment industry.
- Developed countries are shirking their climate duties: Developed economies, who pledged USD 100 bn in climate change funding, have missed their mark by around USD 10 bn.
MORNING MUST READ- 136 countries (including Egypt) have now signed up to a landmark international tax agreement following a “make or break” meeting hosted by the Organisation for Economic Co-operation and Development (OECD) on Friday, according to an OECD statement. Formerly hesitant nations Estonia, Ireland and Hungary were persuaded to sign up to the 15% minimum rate, after 133 countries agreed to the pact over the summer. Under the agreement, companies with revenue of more than USD 125 bn will be subject to a minimum 15% corporate tax rate that is expected to generate new global tax revenues of USD 150 bn annually.
One quarter of big multinationals’ earnings will be taxed in subsidiary markets: the OECD said that “the winners of globalization” — huge multinationals with revenues of more than EUR 20 bn — will see 25% of earnings over a 10% cap reallocated to the countries where they operate, regardless of whether they have a physical presence there. The 25% limit, which was advocated by France in discussions between G20 ministers over the summer, will confer taxing rights on USD 125 bn in earnings to countries where multinationals currently pay little or no tax. The move stands to benefit emerging markets including Egypt, which signed on to the agreement in July.
The agreement is set to be formally endorsed at the G20 meeting of finance ministers in Washington DC on 13 October, before being finalized at the G20 leaders’ summit in Rome at the end of the month, according to the OECD.
Nobel Peace Prize awarded to two journalists from the Philippines, Russia: The Nobel committee said Maria Ressa and Dmitry Andreyevich Muratov were recognized for “their efforts to safeguard freedom of expression” amid a crackdown on journalistic freedom in the two countries. Ressa, who is facing a number of court cases in the Philippines over her investigative work on the government’s war on drugs, told the Associated Press that she hoped the award would “remind the authorities in the Philippines, Russia and around the world of the need to respect journalists and journalism.”
And the Nobel Prize in Literature was awarded to Tanzanian novelist Abdulrazak Gurnah, for what the committee described as his “uncompromising” work depicting the violence, racism, and exile faced by refugees. Gurnah arrived in the UK as a refugee himself in the late 1960s. His latest book, Afterlives, was described by the Guardian as “a compelling novel, one that gathers close all those who were meant to be forgotten, and refuses their erasure.”
CIRCLE YOUR CALENDAR-
The IMF and World Bank annual meetings kick off tomorrow: The gatherings run from Monday, 11 October to Sunday, 17 October. Expect Kristalina Georgieva’s continued presence at the head of the IMF to be … awkward: Georgieva’s fate still hangs in the balance after the IMF deferred its final decision in its investigation of her. The organization said it needs more information to rule on allegations that Georgieva pressured staff to manipulate data and make China look more business-friendly than it is in the organization’s now-defunct Doing Business rankings.
Conference season ratchets up this month, with a number of exhibitions and business events here and throughout the region taking place this week, including:
- The Turathna Exhibition, which kicks off today at the Egypt International Exhibition Center, Cairo, and will run until Friday, 15 October.
- The two-day Mediterranean Offshore Conference will take place in Alexandria on Tuesday.
- The Intra-African Trade Fair 2021 will begin on Friday, 15 October and run for six days. The event is being held at Durban, KwaZulu-Natal, South Africa.
- Further down the road: The Middle East Angel Investment Network is hosting its Angel Oasis in El Gouna on 27-29 October, with separate pricing for in-person and virtual attendance.
PSA- We have another long weekend coming up — the Prophet Muhammad’s birthday falls on Monday, 18 October. We expect a three-day weekend starting Thursday, 21 October. Look for confirmation from cabinet toward the end of this week.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.