Thndr Claps - EGP showing strength and AI driving growth

Egypt Claps

The EGP gained some ground against the USD last week on the parallel market, increasing by 12% on the back of decreased demand for the greenback according to Asharq.

What?

The EGP stood at 37/USD on Thursday, May 18, 2023, compared to 42/USD six days before on Friday, May 12, 2023.

So What

Asharq stated that one of the reasons for the sudden drop in demand for USD was that the Association Of Automobile Dealers In Egypt urged its members to stop buying USD from the parallel market.

Now What

One-month non-deliverable forward agreements for the EGP are up 2.4% & now stand at EGP 31.8/USD – the highest level since Mar 2, 2023.

Bloomberg’s Chief Emerging Market Economist “Ziad Daoud” said Egypt has made little progress in the reforms the IMF has asked for 1) adopting a flexible exchange rate & 2) selling state-owned assets.

What?

Daoud sees three possible scenarios for the IMF’s upcoming review, which is expected to be held next month:

1. Egypt continues to make little progress but the IMF conducts the review anyway.
2. Egypt continues to make little progress & the IMF delays the review to September 2023.
3. Egypt makes progress between now & June & the IMF conducts the review.

So What

A successful IMF review is needed to unlock the next tranche of the $3 billion loan, which is around $347 million.

Now What

According to Asharq, the IMF could potentially group this upcoming review with the one after it, which is scheduled on September 15, 2023, in case Egypt fails to make enough progress.

The African Development Bank has approved a $345 million credit guarantee for Egypt’s first issuance of Panda bonds, denominated in Chinese yuan, worth a total of $500 million.?

What?

According to the bank’s statement, the Panda bonds issued will be green bonds, which means they will be dedicated to finance green projects such as renewable energy, energy efficiency and water treatment.

So What

Mohamed El Azizi, Director General of the African Development Bank in North Africa, said that the bank’s approval of the partial credit guarantee will contribute to strengthening Egypt’s credit rating and allow Egypt to secure financing from international investors at competitive prices and terms.

Now What

The bank did not specify when the Ministry of Finance will issue these bonds, but according to an official in the Ministry of Finance, the offering will be at the beginning of the 2023/2024 fiscal year.

US Claps

Microsoft highlighted that the biggest threat that comes with AI is its ability to provide realistic-looking but false content.

What

Microsoft President Brad Smith stated that AI needs to be regulated and that there are ways to allow people to know the authenticity of a photo or video generated by AI.

So What

As big and small businesses scramble to commercialize AI, regulators have been debating for weeks what rules to approve to regulate AI.

Now What

Sam Altman, CEO of OpenAI, has advocated for international AI collaboration and incentives for safety compliance.

Nvidia (NASDAQ:NVDA) saw its shares surge more than 24% after market hours after providing a promising AI chip forecast.

What

Nvidia forecasted sales in Q2 will amount to around $11 billion, smashing analysts’ estimates of $7.18 billion.

So What

The promising forecast is a clear portrayal of how much Nvidia is benefiting and expects to benefit from the increasing popularity of AI.

The company has positioned itself as the top dog when it comes to designing and manufacturing AI chips.

The spike in Nvidia’s shares also drove an 8% increase in share prices for AMD after market hours.

Now What

Nvidia has become the world’s fifth-largest publicly traded company.

Intel (NASDAQ:INTC) has revealed its plans to produce AI chips in 2025 as it shifts its strategy to compete with Nvidia and AMD.

What

The new chip Intel plans to manufacture will have 288 gigabytes of memory and support 8-bit floating-point computation, both important specs as AI models grow in size.

So What

Intel is far behind its rivals in the race to manufacture AI chips as its initial chip manufactured to compete with Nvidia suffered years of delay.

Now What

Intel’s new chip will not hit the market before 2025, while Nvidia will likely have another AI chip of its own out by then.