Good morning, friends. We have a hefty issue to unpack with a slew of updates cutting across the regional logistics industry, from M&A happenings to new PMI readings to port projects to aviation updates. Let’s dive right in.

HAPPENING THIS WEEK-

The Turkish Foreign Minister is in Egypt: Turkish Foreign Minister Hakan Fidan landed in Egypt yesterday for a two-day visit to discuss bilateral relations as well as regional and international developments with state officials, the Turkish Foreign Ministry said in a statement.

What can we expect? Some 20 agreements are expected to be signed during Fidan’s visit — which will mark his first official meeting with newly-appointed Foreign Minister Badr Abdelatty — Turkish state broadcaster TRT World reports. The two countries will also discuss preparations for the Egypt-Turkey high-level Strategic Cooperation Council meeting set to take place during President Abdel Fattah El Sisi’s upcoming visit to Turkey. Potential cooperation in the energy, health, tourism, and defense sectors are reportedly on the agenda.

WATCH THIS SPACE-

#1- Egypt’s Civil Aviation Ministry has denied rumors that the government plans to sell airports to international parties, according to a statement. The ministry stressed that the airports will remain fully owned by the Egyptian state, but that the government plans to enhance the role of the private sector in airport management to improve services.

Managed, not owned: Studies are underway to determine which airports will be offered for management by the private sector to enhance traveler service and achieve profitability, Minister of Civil Aviation Sameh El Hefny said in the statement. This move is intended to benefit the Egyptian state and upgrade the quality of service at various airports, the minister said, adding that involving the private sector in management will help alleviate the burden on the Egyptian government.

REFRESHER- The government is in the process of bringing private sector firms to manage and operate Egypt’s airports, which will enhance services and boost revenues. The government is also planning on adding a new terminal at Cairo International Airport that will accommodate an additional 30 mn passengers per year.

IN OTHER EGYPT NEWS- Egypt lines up another round of LNG imports: The Egyptian government is reportedly planning to import up to 17 shipments of LNG in 4Q 2024 to ensure the lights stay on after an extended period of power cuts, Asharq Business reported on Friday, citing government sources. The government last week announced that it had secured five LNG shipments for the months of August and September.

Eni’s LNG export ambitions seem to be on hold: “We cannot rule out that a few cargoes [of LNG] may be exported next winter. But for sure, it is not very likely,” Eni COO Guido Brusco said during an earnings call last week, according to a report from industry publication Mees. The Italian oil and gas giant and major player in Egypt’s energy ecosystem has received no assurances it will be able to soon restart exporting LNG, according to the report.

IN OTHER LNG EXPORT UPDATES- Israel’s neighbors could get more gas: Israel’s Leviathan offshore gas project is receiving a USD 429 mn investment to boost production and expand the field, Reuters reported on Thursday, citing a statement from the group. The plan involves expanding projection to 21 bn bcm per year, with the investment being plugged into front-end engineering design. The deep-sea field produces some 12 bn bcm of gas annually, and sells to Israel, Jordan, and Egypt.

#2- Iraq has inked a preliminary agreement with the UK’s BP for the development of the northern Kirkuk oil and gas fields, Reuters reports on Thursday. BP will establish four oil and gas fields in Kirkuk as part of the agreement. The pair initially signed a letter of intent to evaluate the development of the oilfield back in 2013. Negotiations regarding the preliminary agreement are slated to be finished by 2025.

#3- Tunisia is looking for a partner on its TND 1 mn Enfidha deep-water port project, and has already received three offers to finance the project, TAP reported last week. Tunisian authorities have not accepted the offers, however, due to financial shortcomings.

DISRUPTION WATCH-

#1- Disruptions to global trade caused by tensions in the Red Sea will not be resolved this year, shipping giant Maersk said in a statement on Thursday. Trading conditions continue to experience above-average volatility due to Red Sea disruptions and an unstable supply and demand outlook for 4Q. The global container market volume is expected to rise for the full year by 4% to 6%, up from previous estimates of 2.5% to 4.5%, Maersk said. The number of container ships passing through the Suez Canal is down some 77% from last year, according to Bloomberg.

#2- A number of international airlines have suspended flights to Beirut, with Kuwait Airways being the latest to indefinitely halt trips to the Lebanese capital, Kuna reported on Saturday. The flight cancellations come amid escalating tensions between Israel and Lebanon’s Hezbollah.

ICYMI: Several international airlines canceled or pushed back flights to and from Beirut airport last week, with many saying that they are continuing to monitor the situation. Germany’s Lufthansa Group and Air France have suspended flights to Beirut, as have Jordan’s Royal Jordanian, Middle East Airlines, Turkey’s SunExpress, AJet, Greece’s Aegean Airlines, and Ethiopian Airline.

But others are still on schedule: Qatar Airways has denied reports that it had suspended flights to or from Beirut, Amman, and Baghdad, according to a statement on X posted on Saturday.

MARKET WATCH-

#1- Oil prices slide to eight-month lows in early morning trading on the back of US recession fears offsetting concerns of Middle East tensions, Reuters reports. Brent crude futures settled at USD 76.77 a barrel by 00.35 GMT, while US West Texas Intermediate (WTI) traded at USD 73.39 a barrel. Despite worries about escalating tensions in the Middle East, Brent and WTI prices slid over 3% to settle at their lowest since January on Friday.

#2- Opec+ kept its oil policy unchanged during an online meeting on Thursday, according to a statement. The cartel left in place current production cuts of 3.66 mn barrels per day (bbl / d) until the end of this September, before beginning to phase out the cuts of 2.2 mn bbl / d over the course of a year from October 2024 to September 2025.

Opec oil output inched up in July following a rebound in Saudi Arabian supply and slim increase elsewhere countered the voluntary supply cuts efforts, Reuters reported on Friday, citing a Reuters survey. Opec pumped 26.7 mn barrels bpd last month, up 100k bpd from June. Saudi Arabia contributed to the largest supply boost in July, up to 70k bpd, with production reaching 9 mn bpd.

A price adjustment? The Kingdom has increased the price of its flagship crude oil, Arab Light, for Asian markets for the first time in three months, Bloomberg reports, citing a price list it had seen. The September official selling price was raised by USD 0.2 to USD 2 / bbl above the regional Oman-Dubai benchmark. The story also got ink in Reuters.

What gives? This increase, although less than the USD 0.5 rise anticipated by a Bloomberg survey of traders and refiners, indicates Riyadh’s confidence in the demand from Asia, the world’s largest importer of crude.

Selling at a markdown to others: The price for Arab Light crude in Europe was reduced by USD 2.75, marking the biggest cut since the pandemic. Similarly, the price for the US decreased by the most significant amount since February.

#3- Baltic index breaks 10-session decline streak: The Baltic Exchange’s Dry Bulk Index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 0.4% to 1,675 points on the back of gains in capesize rates, Reuters reports. Capesize inched up 1.7% to 2,327 points, while the panamax index was down 0.5% to 1,705 points. The smaller supramax index fell 0.7% to 1,342 points.

DATA POINTS-

#1- The Qatari port authority (Mwani) handled over 146k TEUs in July 2024, a 46% y-o-y increase due to a 132% boost in transshipments, according to a statement. The port operator processed 131.9k tons of cargo, 12.2k roro units, and 20k heads of livestock.

#2- The UAE’s Ajman Freezones Authority reported an 18% y-o-y increase in net income in 1H 2024 and a 70% growth in the number of companies operating in Ajman emirate, Wam reported. The authority attributes the boost in income to high occupancy rates for land, warehouses, and offices in the first six months of 2024.

#3- Digital customs transactions at Abu Dhabi’s border points grew 27% y-o-y in 1H 2024, according to an Abu Dhabi Media Office statement, citing Abu Dhabi Customs. Proactive and automated transactions increased 28% y-o-y during the period, making up a “significant portion” of total customs transactions.

Customs declarations grew 2% y-o-y during the first six months of the year, with pre-arrival customs clearance transactions comprising 71% of the total, up 46% y-o-y.

THE ENTERPRISE FINANCE FORUM-

Are you planning to be in Egypt on 24 September? You may be interested in attending our 2024 Enterprise Finance Forum. Seating is strictly limited at our flagship, invitation-only forum for C-suite executives and other senior leaders.

Why attend? We’re in the early days of a generational realignment of power in our industry — in our region and beyond — and on the cusp of the biggest intergenerational transfer of wealth the world has ever seen. With that as the backdrop, we’re going to take stock of where we stand six months after the float of the EGP and ask what’s next for finance in Egypt and the wider region. Among the questions we’ll be asking:

  • What roles will Egypt, Saudi and the UAE play in the regional industry going forward?
  • What are foreign investors looking for right now?
  • Is real estate the only asset class in Egypt?
  • What does the next generation of leaders think as they take over established family businesses?

Do you want to request an invitation? Tap or click the image below.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Warehousing and Logistics Expo on Monday, 2 September to Wednesday, 4 September in Riyadh. The event will bring together leaders in the supply chain, warehousing, and logistics industry from across the Kingdom to discuss investments, trade, geopolitical risks, and localized manufacturing.

Egypt will host the Egypt International Airshow on Tuesday, 3 September to Thursday, 5 September in El Alamein. The event will host a range of discussions touching on industrialization, digitalization, and globalization in the regional commercial aviation sector. During the event, aircrafts and innovative aerospace products, and services will be showcased.

Saudi Arabia will host SkyMove MENA on Tuesday, 10 September and Wednesday, 11 September in Riyadh. The event will gather global industry stakeholders, experts, and service providers to discuss challenges in the regional aviation industry.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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