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Tuesday, 12 October 2021

TONIGHT: The IMF’s latest WEO sees a relatively steady global economic recovery + Ain Sokhna is getting more DP World investments

It’s all downhill from here, friends — two more days and we slide into the weekend, and hump day has been kind to us after the pyrotechnics in the wee hours of this morning. Still, we have plenty of news:

THE BIG STORIES TODAY so far-

#1- The global economic recovery is holding steady — but increasingly at risk. That’s the main takeaway from the IMF’s latest World Economic Outlook report (pdf), in which the lender marginally downgraded its projection for global growth in 2021. The report warns that vaccine inequality and economic divergence between developed and developing nations will exacerbate three big risks: Health concerns, supply disruptions, and price pressures.

#2- Ain Sokhna Port is getting fresh investments from DP World and CDC Group: Emirati port giant DP World and the UK’s development finance arm CDC Group are setting up a new USD 1.7 bn platform to invest in African ports and logistics infrastructure, DP World announced in a statement. Up for a slice of the investments so far: Egypt’s Ain Sokhna Port, Senegal’s Port of Dakar, and Somaliland’s Berbera Port.

#3- Fawry makes its first investment away from home: Egyptian e-payments giant Fawry just finalized its first overseas investment, participating in a USD 5 mn funding round for Sudanese classifieds platform and marketplace, alsoug.com.

#4- The size of the retail tranche of e-Finance’s retail offering will be unchanged at 1.6%, we’re told by a source close to the transaction. We had done math in EnterpriseAM, based on a Reuters report, that suggested the size of the retail offering was expanding. The FRA said in a statement out yesterday that the company could increase the total size of the offering to 417.8 mn shares (against nearly 258 mn shares originally), or 26.1% of e-Finance’s shares. If the company were to price the offering at the top of the range it has communicated, the transaction could be worth more than EGP 5.8 bn, making it one of the largest Egyptian IPOs in recent memory.

^^ We’ll have the full rundown on these stories and more in tomorrow’s edition of EnterpriseAM.

HAPPENING NOW- European markets are mixed this afternoon, with the DAX 30, FTSE 100 and CAC 40 all in the red at dispatch time, but the Stoxx 600 (just barely) in the green. European benchmarks have largely followed the tone set in Asia earlier today, where shares in Hong Kong, Seoul, Tokyo and Shanghai all closed in the red. The big surprise: Wall Street looks set to open in the green, a flip from earlier today. The EGX30 closed up 0.7% today on weak volumes.

Two top US brokerages think the US shares are looking good. Goldman Sachs and JPMorgan say rising inflation is transitory and now would be a good time to buy the dip, Bloomberg reports. Analysts from the investment banks say the 5% drop in the S&P 500 is as much of a correction as we’re going to get. And those rising energy prices? UBS Global Wealth Management strategists acquiesce that they will slow down growth, but don’t think they’re “sufficient to cause recession.”

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

  • State-owned e-Finance boosted the size of its IPO amid strong demand from institutional investors.
  • Egypt’s debt is growing, but the pace of growth is slowing, the World Bank says.
  • Global Ventures wants to do more here: The Dubai-based VC fund plans to invest some USD 15 mn in Egypt before the year is out, with another USD 20-30 mn in the pipeline for 2022.

THE BIG STORY ABROAD- No single story has captured the imagination of the global business press. Reuters is leading with how inflation fueled by what is now clearly a global energy crunch could threaten the world’s economic recovery. The Financial Times, meanwhile, is still talking about the reprieve handed to IMF boss Kristalina Georgieva, who now has the backing of the organization’s executive board after charges she helped cook data to curry favor with China.

This one sent chills down our backs: The WSJ is out with an exclusive on the latest in Xi Jinping’s Great Capitalist Smackdown, which sees the nation’s state-owned banks and financial firms facing probes about their business with the private sector.

From the Dept. of This Should (and Could) Have Been Us: Morocco is now Africa’s largest exporter of passenger cars, having surpassed South Africa — an ambition we here at home once harbored. How did Morocco manage it? Policy consistency, good infrastructure and far (far) less red tape — along with a basket of interlocking trade agreements that look a heck of a lot like ours. The Financial Times has the story in How Morocco transformed itself into a carmaking hub.

HAPPENING TOMORROW-

The G20 Meeting of Finance Ministers and Central Bank Governors gets underway tomorrow in Washington, DC. Look for the landmark OECD international tax agreement to get a formal endorsement at the meeting, ahead of the G20 leaders’ summit in Rome at the end of the month. Egypt signed on to the agreement — which would see the introduction of a minimum global corporate tax rate of 15% — back in July. The G20 sitdown comes as the IMF and World Bank annual meetings continue, also in DC.

Cultural diplomacy will be the main talking point at Gouna Culture No. 7, which takes place tomorrow at the Dawar El Omda Hotel in the seaside city. Among those leading the discussion are Mexican Ambassador to Egypt Octavio Tripp, Asociación de Amigos de la Biblioteca de Alejandría México Gloria Pérez, and UN International Liaison Chapter San Francisco Count Federico di Wardal.

🗓 CIRCLE YOUR CALENDAR-

PSA- Our next long weekend is 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 the cabinet toward the end of the week.

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 at the Egypt International Exhibition Center, Cairo, which will run until Friday, 15 October.
  • The International Conference on Climate Change in the Eastern Mediterranean and the Middle East kicks off in Nicosia tomorrow. The conference brings together 65 of leading policymakers, scientists and diplomats from Egypt, Israel, Jordan, Iraq and Greece to advocate for a move away from fossils toward renewables in the region. You can check out its website here.
  • The GITEX Global is being held in the Dubai World Trade Center from 17-21 October. The event brings together players in Big Tech to discuss what’s next in areas such as AI, cloud, 5G, cybersecurity, blockchain, and more.
  • 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.

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


☀️ TOMORROW’S WEATHER- The overnight thunderstorm threw us for a loop, but temperatures are back to this winter’s new normal with a daytime high of 34°C and nighttime low of 20°C in the forecast, our favorite weather app tells us.

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