Wednesday, 15 June 2022

THIS EVENING: Gas agreement with Europe signed + Fed decision day amid crypto crash. ALSO: ECB holds emergency meeting.

The downpour of news continues today, ladies and gentlemen, and its good news on the domestic front. Apprehension over policymakers and their rate decisions, meanwhile, continue to guide the conversation abroad.

THE BIG STORIES TODAY-

#1- It’s official We’re exporting more gas to Europe: Egypt, Israel and the EU have signed a memorandum of understanding (MoU) to ramp up LNG exports to Europe, as the continent looks to phase out its reliance on Russian gas, according to an Oil Ministry statement. The agreement will see Israel send more gas via a pipeline to Egypt’s LNG facilities before exporting it on tankers to European shores. There were no details on how much gas we will be exporting to the continent.

As for funding the expansion of our LNG infrastructure: The EU will also help Egypt and Israel increase gas production and exploration in their territorial waters, the Associated Press reports, without providing further details.

#2- Is the UAE’s Aldar eyeing an MNHD acquisition? The UAE’s Aldar Properties is reportedly eyeing an acquisition of a majority stake in EGX-listed real estate developer Madinet Nasr Housing and Development (MNHD), Bloomberg reports, citing sources familiar with the matter. Discussions are still at an early stage, the sources said.

Madinet Nasr has yet to receive any formal offers on the matter, it said in a disclosure to the EGX (pdf) today. Madinet Nasr declined to comment when we reached out today.

Shares in the company rose 7.3% to EGP 2.5 per share at the close of trading today.

THE BIG STORIES ABROAD-

ECB holds emergency meeting as Fed decision looms: The European Central Bank is holding an emergency meeting right now to discuss sellofs of Southern European sovereign bonds on statements that it will take a more hawkish stance in subsequent monetary policy meetings. “The Governing Council will have an ad hoc meeting on Wednesday to discuss current market conditions,” an ECB spokesman said ahead of the meeting. The spread between yields on 10-year Italian government bonds and those of German bonds (a widely followed metric to Eurozone watchers) fell to 2.2 percentage points today. The Wall Street Journal (paywall) has the story.

The move appears to have stabilized European stocks with the FTSE 100 gaining 1.31% and the DAX rising 1.29% as of dispatch.

And all that before we hear word from the Fed on how it will raise rates: The US Federal Reserve’s Federal Open Market Committee is planning to announce later today on whether it would move rates by 50 bps or 75 bps, with the market pricing in the latter. As we noted this morning, US stocks fell further into a bear market yesterday and the bond sell-off continued as traders awaited the Fed’s decision. The S&P 500 saw its fifth-straight day of losses, ending the day 0.4% in the red and extending its descent further into bear territory.

Our own central bank is due to meet next Thursday, 23 June to discuss rates. Stay tuned for Sunday’s EnterpriseAM to hear what our poll of economists has to say on where the wind will blow.

Meanwhile, BTC is continuing its downward spiral today, falling to a new 18-month low: BTC fell by as much 7.8% today to reach USD 20.3k — its lowest level since December 2020, reports Reuters. BTC’s performance this year has been disappointing to say the least, having lost over half of its value YTD. However, this week has seen a particularly bad sell-off for the crypto world, with BTC losing around 28% since Friday and dragging down several other digital currencies with it. Crypto funds saw outflows of USD 102 mn this past week as investors worry over tighter central bank policy. Meanwhile, crypto companies such as Coinbase, Binance, and Celsius have taken exaggerated steps to try and weather the storm.

Bill Gates once again gave cryptocurrencies and NFTs his stamp of disapproval, basically saying that they’re nothing but a speculative asset with no real value during a climate conference yesterday (watch, runtime: 00:48). “Obviously, expensive digital images of monkeys are going to improve the world immensely,” Gates said sarcastically, adding that he isn’t involved with cryptos. This isn’t the first time Gates voices his concerns against cryptos, last year he warned against BTC volatility’s effect on smaller investors, as well as the environmental impact of energy-intensive bitcoin mining.


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

  • Egypt saw foreign direct investment inflows fall 12% in 2021 but remained the second-largest recipient of FDI in Africa after South Africa.
  • Sawiris-backed Altus Strategies is merging with Toronto-listed gold royalty company Elemental Royalties in an all-stock transaction.
  • SODIC subsidiary to borrow EGP 600 mn from Ahli United Bank: Ahli United Bank has agreed to provide SODIC subsidiary Six of October For Development & Real Estate Projects (SOREAL) with a EGP 600 mn discounting facility.

FOR TOMORROW- The EU-Egypt Sustainable Food Value Chain conference takes place at Grand Nile Tower Hotel tomorrow.

🗓 CIRCLE YOUR CALENDAR-

The first workshop in the government’s public consultations on its ambitious state ownership policy document begins next Sunday, according to the online platform for the consultations. Every Sunday and Tuesday will see workshops on specific industries, starting with an agriculture-focused workshop next Sunday and a food industries-focused workshop on Tuesday. Each Thursday is reserved for workshops with the House of Representatives or the Senate, along with think tanks.

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

☀️ TOMORROW’S WEATHER- Expect a daytime high of 38°C tomorrow and a nighttime low of 22°C, our favorite tells us.

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