Back to the complete issue
Wednesday, 17 August 2022

THIS EVENING: Tarek Amer resigns as CBE governor + Tansik minimum grades are out

Good afternoon, wonderful people. The uncharacteristically busy August news day we spoke of this morning has only gathered steam.

THE BIG STORIES TODAY

Tarek Amer stepped down as governor of the Central Bank of Egypt (CBE), ending his almost-seven-year tenure at the bank more than a year early. President Abdel Fattah El Sisi accepted Amer’s resignation this morning, Extra News reported (watch, runtime: 0:29). Amer, who was appointed as CBE governor in November 2015, was set to see his second and final term expire in November 2023. As recently as last week, a senior CBE official denied Amer had any plans to step down, dismissing talk of it on social media as “fake news.”

Amer’s resignation comes one day before the CBE’s Monetary Policy Committee convenes tomorrow to review interest rates. Six of eight analysts and economists we surveyed in our interest rate poll see the CBE going for a rate hike: Four are calling a 100-bps hike, one is forecasting a 200-bps rise and another a more modest 50-bps increase. A Reuters poll is also forecasting a rate hike.

Cairo’s favorite parlor game this afternoon: Who could take over? A new governor has yet to be officially announced, but it would be unusual for the MPC to meet tomorrow without at least an acting governor having been appointed.

Among the names making the rounds from sources close to the matter include United Media Services Chairman and former Arab African International Bank CEO Hassan Abdalla, CBE Deputy Governor Gamal Negm, former CIB Chairman and MD Hisham Ezz Al Arab, Banque Misr Chairman Mohamed El Etreby, Planning Minister Hala El Said, and International Cooperation Minister Rania Al Mashat.

What to watch for: An economist or a banker? The norm in many countries is to see central bank governors being trained economists rather than bankers. We’ve seen the opposite here for most of the 2000s: The central bank brought on bankers to clean up the fallout from a bad debt crisis of the late 1990s that threatened the stability of the system. The CBE is widely credited for having cleaned up the system, driving consolidation in the industry, the imposition of new capital adequacy rules and credit quality requirements and more. Every central bank governor appointed in the past two decades, starting with Farouk El Okdah in 2003, has been a banker, not an economist.


ALSO- The Higher Education Ministry announced minimum grades required for acceptance in public universities under the ministry’s first phase of the public university enrollment (tansik) system, according to a statement. Minimum grades for medicine were set at 91.6%, dental medicine at 91.34%, pharmacy at 90%, and engineering at 83.65%, while non-scientific majoring, including economics and political science and El Alsun (languages) would have a minimum acceptance rate of 82.92% and 80.24%, respectively.

THE BIG STORIES ABROAD

The international press’ focus is split this afternoon between record-high inflation figures coming out of the UK and Liz Cheney conceding her loss in primary elections. Inflation in the UK rose 0.6 percentage points m-o-m in July to record 8.8%, spurred by higher prices of housing and household services (including utilities), transport, and food and beverages, according to the Office for National Statistics. Reuters and the Wall Street Journal also have the story. Also contending for front-page real estate placement is US House Republican Liz Cheney conceding defeat to former US President Donald Trump-backed Harriet Hageman in Republican primary elections in Wyoming. The story is getting ink in the New York Times and Reuters.


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

  • Egypt is in talks with Chinese officials to issue CNY-denominated bonds in the world’s second-largest bond market, Finance Minister Mohamed Maait told Enterprise.
  • MNHD shareholders back board, say offer price was too low: Madinet Nasr Housing and Development (MNHD) shareholders meeting in a general assembly yesterday rejected a takeover bid from SODIC, saying the offer price was too low.
  • Auf Group makes its first acquisition of the ADQ era: Egyptian food outfit Auf Group has acquired a 75.5% stake in Modern International Confectionery Co.

FOR TOMORROW-

The Madbouly government will hold another round of consultations on its privatization strategy: Tomorrow it’s the turn of mining companies to voice their thoughts on the state ownership document. Every Sunday, Tuesday, and Thursday see workshops on how privatization plans will affect specific industries. You can find more details on the schedule of the meetings here.

What’s being said at the meetings? Broadly speaking, we think attendees are using the meetings more to discuss current industry conditions and problems than they are the state’s current involvement in their industry. Still: The government officials are due credit for staying the course with the consultations. We have roundups in our weekly Inside Industry vertical (presented in association with IDG) covering consultations with the FMCG, pharma, engineering and printing and packaging industries.

🗓 CIRCLE YOUR CALENDAR-

Prequalification deadline for sea water desalination project proposal: Companies and consortiums have until 3pm CLT on 22 September 2022 to submit a prequalification application for sea water desalination projects, according to a statement (pdf) out yesterday. Folks who are interested should email desalrfq@sovfundegypt.com to request details on the documentation you’ll need to submit.

☀️ TOMORROW’S WEATHER- Don’t forget your sun hats tomorrow — the mercury will rise to 40°C in the morning before falling to 24°C in the evening.

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.