Back to the complete issue
Monday, 31 January 2022

THIS MORNING: We’re back in JPMorgan’s EM bond index + on to the Afcon semi-finals

Good morning, friends, and welcome to the very last day of January. The Colonel always told us that time accelerates as we get older, but really? The end of January? Already?

We’re a little bit bleary-eyed this morning after trying to work (and study with the resident 14-year-old) while keeping tabs on Rafael Nadal beating Daniil Medvedev to bag a record 21st grand slam title with a come-from-behind victory in the Australian Open — and Canada cruise to a 2-0 victory over the United States in World Cup qualifying (uh, sorry, American friends — or not).

Oh, and the Pharaohs played last night. The national team managed to eek out a 2:1 victory in last night’s Afcon quarter-final against Morocco, a match that was described as everything from “scrappy” to “dismal.” The prognosis was less than hopeful after Morocco scored a penalty within the first seven minutes — but Mohamed Salah’s second-half equalizer carried us into extra time, where a great run by the Liverpool star set Mahmoud Trezeguet up to clinch goal #2. What was a less than edifying spectacle from the football side of things was more than made up for by endless drama, with both sides racking up plenty of fouls. But hey, we’re through — and will now face hosts Cameroon in Thursday’s semi-final.

Thursday’s kickoff: 7pm CLT.

PSA- We’re looking at cold weather all week long: The national weather service is predicting another cold week ahead, with Cairo seeing highs between 15-18°C and overnight lows in the single digits all week long. Strong winds will make it feel colder still, it said.


We’re officially back in JPMorgan’s EM bond index today: Egypt is rejoining JPMorgan’s Emerging Markets Bond Index (EMBI) today, Finance Minister Mohamed Maait told CNBC Arabia (watch, runtime: 5:26), a move that could potentially bring bns of USD in new passive flows into EGP-denominated debt. Egyptian bonds will have an estimated weighting of 1.8% in the index, Maait said. Egypt will also become a constituent of JPMorgan’s green bond index with a weighting of 1.2%, he said.


Russia’s threatened invasion of Ukraine remains the focus of the international press this morning.

The UN Security Council will meet to discuss the crisis today — and the US is trying its best to pile on the pressure ahead of the talks, the Associated Press reports. US lawmakers yesterday promised Moscow will face “the mother of all sanctions” if it does invade its neighbor — and senators could pass legislation on the measures as soon as this week, according to Reuters and the Financial Times.

Potentially relevant to us here at home: The New York Times is warning that the sanctions could take a “wide toll,” noting that top US security officials have “been talking with executives from some of Wall Street’s largest banks, including Goldman Sachs, Citigroup, JPMorgan Chase and Bank of America, about the stability of the global financial system in the wake of potential sanctions.”

Meanwhile, Ukrainian leaders remain unflappable in the face of Russian grandstanding, says the Washington Post.

ALSO- Egypt gets plenty of mention in “Does the EBRD still finance freedom?in the Financial Times, which notes that we’re one of the institution’s most important markets. The EBRD does tons of good here, investing in people, small businesses and infrastructure, but the FT’s Big Read for today suggests EBRD isn’t doing enough to push us on democracy issues.


CEOs, CFOs and investor relations officers aren’t wrong to feel that something is a bit off in how ESG reporting is done today. At the center of the problem: So many would-be advisors are so hungry for a piece of a pie that could be worth bns of USD in fees globally that they’re trying to wear multiple hats. They want to advise you on what you need to report on when it comes to environmental, social and governance (ESG) issues. Come up with and abatement programs that make your business look more sustainable. Implement that program with you. Help you report to the constituencies who need to hear from you. And then audit and certify your progress on your “ESG journey” (depending on which of the 6.02×10^23 competing and confusing reporting standards you choose to follow).

In finance terms? It’s like your external auditor coming in and wanting to get a mandate that sees them re-factor your operations. Set up your finance and accounting systems. Build your financial statements. Help you move all the numbers move in the right direction. Choose whether to go with EAS or IFRS (or whatever). Communicate about numbers with those who matter. Oh, and be paid to audit and certify how well you’re doing in the process.

In other words: The folks who rate how we’ll you’re doing when it comes to ESG are also trying to sell you on services that will help you improve that rating — and it’s a conflict of interest. If you feel the burn (or care about doing better for both your people and our planet as you try to make a buck), you’ll want to read this story that got plenty of attention on the Wall Street Journal yesterday.


The US Federal Reserve could consider “supersize” interest rate increases of half a percentage point this year if inflation continues to run high, a Fed official told the Financial Times. Fed Atlanta head Raphael Bostic is calling for three quarter-point rate increases in 2022 — but said a more aggressive approach was also on the table if necessary. The Fed last week indicated that it will go ahead with its first rate hike in March.

Meanwhile in Europe: The Bank of England is set to announce further tightening for the second time in under two months in its meeting on Thursday, bringing its main rate up to 0.5% in a bid to curb inflation, which has reached a near-30-year high, Reuters reports. The European Central Bank, meanwhile, is continuing its asset purchases and will likely leave rates unchanged when it meets on the same day — marking a growing divergence among major economies in the transitory-vs-permanent debate raging over inflation, Bloomberg notes.

Permanent inflation could mean lower returns on stocks and bonds in the foreseeable future, Nicolai Tangen, who runs Norway’s sovereign wealth fund (the largest in the world), tells the Financial Times.

CLOSER TO HOME- The Central Bank of Egypt will also 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. “We have inflation readings looking tame so far, and the outlook for 2022 looks well within the CBE target,” Al Ahly Pharos’ Israa Ahmed told us. “The CBE succeeded to withstand similar pressures back in 2H2018 without rushing into rate hikes,” she added, noting that “raising interest rates is not a costfree decision. It has large implications particularly on the budget and public debt trajectory, let alone the private investment and the financial markets.”


January PMI figures for Egypt, Saudi Arabia, and the UAE are 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.

OPEC+ will meet this Wednesday, 2 February: 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. Some analysts say Brent could breach the USD 100 / bbl mark this year unless supply is increased.

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.


*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: Education management companies — which either own and operate schools in their portfolio or operate schools owned by other investors — are currently booming in Egypt, leading education players tell us. Today, we outline Egypt’s education management landscape and how these companies are growing in both scale and number.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.