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Monday, 31 January 2022

THIS EVENING: Egypt joins JPMorgan bond index + Egypt ups 2021-2022 growth forecast to 6% + ALSO: Qatar could play superhero to Europe’s energy crisis

Welcome to a surprisingly busy Monday afternoon as we wind down the last day of this first month of the year, ladies and gentlemen. We have plenty going on today, so let’s get right to it.

THE BIG STORIES TODAY-

#1- Egypt joins JPMorgan bond index: We’re officially back on JPMorgan’s GBI-EM Global Diversified Index, where 14 Egyptian bonds worth a combined USD 26 bn have now been added, giving Egypt a weight of around 1.85%, Finance Minister Mohamed Maait said today (watch, runtime: 1:51). The bonds have also been added to the GBI-EM Broad Diversified Index, the GBI-AGG Diversified Index, and the JESG suite, making us one of only two countries in the Middle East and Africa to join the green bond index (alongside South Africa), Maait noted. Our addition to the index is a strong reflection of international investor confidence in Egypt and its fundamentals, with 90% of surveyed investors voting for our inclusion, the minister said.

The inclusion is a “milestone” for Egypt’s debt management efforts and debt strategy, which focuses on “elongating and extending our debt profile,” Vice Minister of Finance Ahmed Kouchouk said (watch, runtime: 2:07). Having our bonds on the index will also attract more international investors, driving up demand for government securities and helping Egypt secure the lowest costs, Kouchouk said.

Our inclusion, which comes after three years of consultations with JPMorgan, was contingent on us meeting several requirements, including reshaping the yield curve, increasing the average issuance size to USD 7 bn, and streamlining some processes related to taxation, Advisor to the Vice Minister of Finance Nevine Mansour said (watch, runtime: 1:46).

#2- Egypt ups 2021-2022 growth forecast to 6%: The Planning Ministry has revised upwards its FY2021-2022 growth forecast for the Egyptian economy to 6%, from 5.6% previously, Minister Hala El Said tells Bloomberg Asharq.

#3- Social commerce startup Brimore closed a USD 25 mn series A round led by the International Finance Corporation and Silicon Valley VC Endure Capital, the company said in a statement (pdf). Brimore plans to use the funding to grow its network of sellers and tap into two new markets next year.

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

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

  • Privatization program to resume in March -Maait: We can expect more state-owned companies to offer shares on the EGX in the coming weeks, according to Finance Minister Mohamed Maait, who said yesterday that the state privatization program will resume in March.
  • Another round of green bonds: The Finance Ministry is looking to take to the green bond market for a second time with another USD 750 mn issuance, with consultations still ongoing regarding the timing of the sale.
  • Is it about to get easier to register your home? The House Legislative Committee yesterday gave the nod to amendments to the Real Estate Registry Act, which aim to streamline registry procedures by significantly reducing the number of required documents, digitizing parts of the procedure, and putting a time ceiling on the entire process.

Rejoice, commuters — your Uber ride is getting cheaper: Uber will change its pricing in Cairo starting today for UberX rides, lowering the app’s fees to EGP 2.80 per km traveled, from EGP 3.05, while its time fees are now going to be set at EGP 0.42 per minute from the previous EGP 0.45, according to an email sent out to users. The base fare will remain fixed at EGP 8 while the minimum fare will also remain at EGP 13. The ride-hailing company said the decrease in prices comes as part of its mission of “facilitating access to convenient, reliable and affordable rides for anyone, anywhere, and at any time.” The move comes shortly after Chinese ride-sharing app DiDi started operating in Cairo earlier this month.

HAPPENING NOW- The possibility of Qatar stepping in to resolve the looming energy crisis in Europe is making headway today as Qatar’s Emir Sheikh Tamim bin Hamad al-Thani sits down with US President Joe Biden at the White House, according to a statement. Doha — the world’s second-biggest exporter of liquefied natural gas — has previously signaled it would not be able to ramp up its output, given it’s already producing at full capacity under contract to Asia, Bloomberg notes. Europe receives almost 40% of its natural gas from Russia, which reduced its exports to Europe by 25% in 4Q2021, and could further limit or entirely suspend its gas supplies should an open conflict with Ukraine and ensuing sanctions materialize.

The energy crisis and falling natural gas demand in Europe is putting a serious dent in global demand, with the International Energy Agency predicting in its quarterly gas report that global demand for gas will slow to 0.9% after rising 4.7% last year. Demand in Europe is expected to fall as users switch to coal, expand the use of renewables, or cut back on fuel use altogether.

THE BIG STORY ABROAD- You guessed it — it’s still the Ukraine standoff. The US is now considering personal sanctions on Russian President Vladimir Putin’s “inner circle,” including family members and individuals who “play a role in government decision making or are at a minimum complicit in the Kremlin’s destabilizing behavior,” the Financial Times reports, citing senior Biden administration officials. This comes as the US and Russia are due for somewhat of a showdown at the UN Security Council today over Moscow’s threatened invasion of Ukraine. The Wall Street Journal and New York Times have the story.

🗓 CIRCLE YOUR CALENDAR-

OPEC+ will meet this Wednesday, 2 February, when the cartel is expected to agree to another gradual oil production increase. Planned production increases by the cartel have so far failed to meet the recovery in demand as several member countries struggle to up their output. The tightening of the oil market has pushed prices to a seven-year high this month.

The Central Bank of Egypt will hold its first policy meeting of 2022 on Thursday, where it is widely expected to hold rates steady, according to our regular interest rate poll. All analysts we surveyed expect Egypt to maintain the current rates for a while longer, as they anticipate our rates continuing to attract portfolio inflows even amid Fed tightening and global inflationary pressures.

January PMI figures for Egypt, Saudi Arabia, and the UAE are also due out on Thursday.

The US embassy in Cairo is now accepting applications for Cultural Property Agreement Implementation projects that would help Egypt protect its cultural property from looting, theft, and illicit trafficking. The guidelines state that concept notes should be sent in by this Thursday, 3 February, while shortlisted applicants will need to submit full applications by 4 May. Each project will receive USD 50-100k, with around USD 500k earmarked for the entire program.

Also from the embassy: Women can now apply to join Fortune Global Women's Mentoring Program which will take place from 8-28 May 2022. The program aims to bring emerging women leaders from around the world to the US to meet and learn from the Fortune Most Powerful Women community which includes executive women mentors from companies such as Accenture, Johnson & Johnson, and Aetna. The deadline to apply for the program is 8 February. You can begin your application by signing up here.

The Cairo International Book Fair continues today at the Egypt International Exhibition Center. The event runs through to 7 February.

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

☀️ TOMORROW’S WEATHER- It’s getting a touch warmer: The mercury will rise to 18°C during the day tomorrow before falling to 9°C at night, according to our favorite weather app.

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