Back to the complete issue
Tuesday, 5 July 2022

THIS MORNING: EGX falls to lowest level since November 2016; MPs break for recess tomorrow

It’s hump day on the last week before Eid, ladies and gentlemen. That may just be enough to make up for news coming out of the region’s capital markets.

A week off for the public sector: Public sector workers will be off from 9-14 July in observance of Eid El Adha, the Madbouly cabinet announced yesterday.

Could the private sector follow suit? We’re still waiting to hear from the Manpower Ministry — as well as from the central bank and the EGX — on their plans for the Eid vacation.

No matter how many days off we get, let’s vacation responsibly, as the Health Ministry is saying that covid cases are up 7% this week. We have more in Last Night’s Talk Shows.

enterprise

** BEFORE WE CONTINUE, we’re very excited to announce our first official event. Longtime readers will know we often hold lunches and breakfasts with small groups of readers. We’re going much bigger later this year.

This fall, we’re gathering an exclusive group of CEOs, C-suite officers, finance folks and more to talk about how we’ll finance green projects in Egypt in the wake of COP27. The idea is to keep the conversation going post-COP and dive into the nitty gritty of the financing tools, laws, projects, problems and ideas that will be necessary to drive a fundamental shift in our economy.

Want to learn more? Drop us a line. Whether you’re interested in attending or want to discuss how to put your brand front and center, reach out to us on climatex@enterprisemea.com.

Stay tuned for more details…


THE BIG STORIES at home this morning-

#1 Preliminary budget figures for FY 2021-2022 are in: The government smashed its budget deficit target last year, narrowing the gap to 6.1% of GDP from 7.4% the year before. The Finance Ministry originally set out to achieve a 6.7% deficit by the end of the fiscal year in June.

#2 The EGX30 hit its lowest level since November 2016 yesterday as a sell-off among foreign investors caused by worries over soaring global inflation, rising interest rates and a possible recession in the US pushed the market deeper into bear territory. The benchmark index fell 3.6% during trading, marking the biggest single day loss since February and leaving it down 28% from its recent peak in January. The sell-off was widespread, with every company on the EGX30 ending the session in the red.

It’s not just us: The intensity of the sell-off on the EGX has coincided with a reversal of fortunes for bourses in the Gulf, which up until May had been shielded from the turmoil gripping global equities by surging oil prices. Following a strong start to the year, shares in Saudi Arabia, the UAE and Qatar have fallen back dramatically over the past two months as concerns over the global economic outlook overshadow the oil revenues flowing into the Gulf.

#3- Our honey industry is at risk thanks to climate change. We break down the hows and whys in today’s Going Green.

WHAT’S HAPPENING TODAY-

It’s last day of the House before the summer break tomorrow: The House will wrap up any unfinished business during today’s session before breaking for the summer on Wednesday, according to Youm7. Typically, the end of the legislative cycle coincides with the end of the fiscal year, but this year’s session has dragged on into July. We break down some of what done yesterday — which did not include the Competition Act amendments — in today’s Legislation Watch below.

UP IN THE HOUSE TODAY- Government-drafted amendments to the Consumer Finance Act aimed at providing greater fraud protections to consumers, according to a note seen by Enterprise. We have more on the

Public consultations on the state’s privatization plan resume today with the transport sector players discussing the state ownership policy document that outlines its privatization plans for the industry.

Sunday’s session saw automotive players and other engineering industry reps lay out their feedback and recommendations. Among the key suggestions was for the government to replicate the recently launched automotive strategy for other industries and granting more “golden licenses” to investors. Other recommendations made include the state ramp up its investments in EV manufacturing, EV batteries, wind turbines and solar panels, and raw materials, while others suggested that the state exits from services like car licensing inspection, export certificate accreditation labs, and car recycling.

REMEMBER- Every Sunday and Tuesday see workshops on how privatization plans will affect specific industries. You can find more details on the schedule of the meetings here.


The national dialogue kicks off today when Diaa Rashwan, the general coordinator of the dialogue, convenes the first meeting of the 19-member board of trustees running the process, according to the State Information Service. Board members include lawmakers, journalists, and political and economic experts. President El Sisi also signaled the beginning of the dialogue in a report picked up by Al Oula (watch, runtime: 2:18).

Need a refresher on the national dialogue? You can read our explainer here.


THE BIG STORY ABROAD- Another mass shooting in the US is front page news across much of the global media this morning. Six died and 30 were injured after a gunman opened fire on an Independence Day parade in Chicago yesterday (AP | Reuters | NYT | Washington Post | WSJ)

A shooting in the Danish capital is also getting a lot of attention: A gunman killed three and wounded several others at a mall in Copenhagen on Sunday. A 22-year-old Danish has been arrested following the incident. (Reuters | NYT | BBC | CNN)

Also worth noting:

  • Crisis in Germany: The German government is preparing legislation to bail out the country’s struggling energy companies as it looks to avert a crisis caused by surging gas prices. (FT)
  • The crypto collapse continues: Another crypto lender — Vauld — is preventing investors from withdrawing funds in a bid to stay afloat amid the crypto market meltdown. (CNBC)

CIRCLE YOUR CALENDAR-

The fuel pricing committee could meet this week to review fuel prices for the third quarter.

Other news triggers to keep an eye on this month:

  • PMI: Data measuring activity in Egypt’s non-oil private sector will drop tomorrow, Wednesday, 6 July.
  • Foreign reserves: Foreign reserves figures will be out sometime this week.
  • Inflation: Inflation data for June will likely land as early as this week.

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

enterprise

*** It’s Going Green day — your weekly briefing of all things green in Egypt: Enterprise’s green economy vertical focuses each Tuesday on the business of renewable energy and sustainable practices in Egypt, everything from solar and wind energy through to water, waste management, sustainable building practices and how you can make your business greener, whatever the sector.

In today’s issue: Climate change is putting Egypt’s honey industry under threat. Egypt’s production of honey, a food that has been deeply rooted in local culture for thousands of years, is coming under increasing threat. The country is an exporter, but faced with the existential challenge of climate change and rising economic problems at home, production is on the decline, industry sources tell Enterprise.

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; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.