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Egypt Claps

Egypt is currently launching many initiatives to increase its dollar supply, the most recent one is the cancellation of SOTO tickets, to minimize unnecessary costs.?

Claps Class

Sold outside, ticketed outside (SOTO) is a type of flight ticket that is purchased & issued by an entity outside of the departure location.?

What

In parallel goes President El Sisi’s latest statement: “We are flexible on the exchange rate, but not when it comes to Egypt’s national security and harming Egyptians.”?

Let’s take a step back–One of the key IMF requirements is for Egypt to shift to a more flexible foreign exchange (FX) regime.?

So What

Egypt is not a big fan of a flexible FX regime, since it’ll likely raise prices and put pressure on the country to provide a steady dollar supply to back up the EGP.?

Now What

El-Sisi’s comments confirm the insights shared by investment bank Goldman Sachs that Egyptian authorities are keen to sell state-owned assets before moving toward a more flexible FX rate to make sure they have some control over the EGP if it begins to slide sharply.

Interested in more Goldman insights? Check out?this article.

News of the state-owned assets set to be offered to investors keeps rolling in, this time it’s rumors on El Nasr Glass, Port Said Container & Cargo Handling (PSCCHC), & KIMA.

What

1) Minister of Public Enterprise Mahmoud Esmat stated that the Saudi-Egyptian Industrial Investment company, one of the Saudi sovereign fund’s investment arms, is close to acquiring a 70% stake in El Nasr Glass by subscribing to its?capital increase.

2) The Suez Canal Authority, PSCCHC’s biggest shareholder, has approved the sale of a 20% stake on the EGX.

3) As for KIMA, sources speaking to Alborsa newspaper stated that a subsidiary of the Abu Dhabi Holding company is interested in acquiring a stake between 20-25% in the chemicals manufacturing giant.

So What

El Nasr Glass exports its products to 32 countries, while PSCCHC had caught the eyes of the Qatari sovereign fund through its investment arm Maha Capital.

KIMA, on the other hand, is reportedly exploring selling a stake as a way of obtaining financing for its “KIMA 2” factory, which would have investments of up to $297 million.?

Now What

Sources claim that the offering of El Nasr Glass & PSCCHC will take place during the coming few weeks, while KIMA announced that it has not received any offers so far.

Sources to Al Mal hinted that there might be the issuance of an additional stake in Misr Fertilizers Production Company (MOPCO) soon.?

What

Sources say this came after significant interest from some Gulf investors.?

So What

The news comes amid hype on MOPCO’s stock after being in the green for the past 8 sessions, and its stock price reaching?EGP 264, an all-time high on Wednesday, compared to only?EGP 160.5?earlier this month.?

Now What

Sources said that the Sovereign Fund of Egypt (SFE) has the final say on the matter, and there’s no issued official statement yet.

US Claps

The Fed opted against an interest rate hike this month, ending a streak of 11 consecutive hikes.

What

Interest rates remained unchanged at the borrowing range of 5%-5.25% following the Fed’s decision.

Despite the decision to pause interest rate hikes this month, the Fed projected another two small 0.25% hikes before the end of 2023.

So What

The decision to hold interest rates came as no surprise to many, as the Fed was expected to take a hawkish pause, especially after May’s?CPI?reading came in cooler than expected.

Now What

The Fed will assess the impact of the decision over the next 6 weeks before meeting again before the end of July.

The?consumer price index (CPI)?for May came in cooler than expected, its lowest annual rate in more than 2 years.

What

The CPI increased by 4% YoY in May, a significant decline from the 4.9% increase in April. On a monthly basis, the CPI increased by 0.1% in May.

Core inflation, on the other hand, increased by 5.3% YoY and 0.4% on a monthly basis, showing that consumers are still not off the hook.

So What

This decline in this month’s inflation reading is set to influence the Fed’s interest rate decision, potentially giving them room to keep rates unchanged this month.

Now What

The Fed will meet later today to decide on interest rates for the month.

Cava (NYSE:CAVA) saw its stock surge nearly 100% after making its debut on the NYSE on Thursday.

What

The company priced its IPO at $22 per share on Wednesday but ended its first trading session on Thursday at $43.78.

This gives the company a market value of $4.88 billion.

So What

The IPO is considered the most successful IPO this year for companies worth more than $500 million.

Now What

Cava will use the proceeds from its IPO to open new location and for general corporate purposes.