It’s another reasonably quiet morning, raising our suspicions that we’re approaching the end-of-year news slowdown, but two stories stand out:
- The EGP is at a (near) three-year high against the USD. Good news, when you consider that we’re a nation that imports inflation. Bad news, when you consider that we’d like to export a lot more, from manufacturing to tourism.
- GAFI is now requiring all companies with a foreign shareholder to report extra data every quarter, including key financial figures. We covered the story last month, and a primer from law firm Baker McKenzie out overnight will have people talking about it again today.
We have more on both stories in this morning’s Speed Round, below.
Driving the news agenda this morning:
In Egypt: The World Youth Forum will hold its closing ceremony in Sharm El Sheikh this evening, after delegates have gathered to present the conference’s recommendations.
Globally: The talking heads are wondering whether we may be seeing signs it is not the end times for the global economy. The weak spot? Europe: Our largest trade and investment partner. Go read Global economy shows signs of regained footing in the Wall Street Journal.
*** Tell us what you think will happen in 2020 and maybe we’ll send you an Enterprise mug and our very own coffee: Every year we ask you, our readers, to weigh in on what you expect for the year ahead: Are you investing? Do you plan to hire new staff in 2020? How do you think the EGP will perform? What’s your take on interest rates? Tell us, and we’ll share the results with the entire community in early January to help you shape your view of the year. The survey is quick, we promise.
You can take the Enterprise Reader Poll here.
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Egyptian-born British-American economist Dame Minouche Shafik is reportedly the frontrunner to lead the Bank of England (BoE) as of February 2020, succeeding current governor Mark Carney, Reuters reports, picking up where the Financial Times left off last week. If selected, she would become the first woman to take the helm of the bank in its 325-year history. Shafik, who is currently the director of the London School of Economics, previously served as deputy managing director at the IMF and also served as BoE deputy governor for three years.
We had the chance to have a chat with Dame Minouche back in March after her lecture at the American University in Cairo. Read it here.
Investors return to EM assets as uncertainties dissipate: Emerging market shares may be in for a “risk rally” during the final week of December despite concerns over the state of US-China trade, according to Bloomberg. Equities and currencies saw their biggest gains since June after the US and China agreed a preliminary trade pact, the Federal Reserve signalled it will keep rates on hold through 2020, and Boris Johnson won a parliamentary majority in the UK election.
But skepticism persists about how the world’s two largest economies will tackle the biggest sources of disagreement. “This is only a short-term solution,” said Luciano Jannelli, head of investment strategy at Abu Dhabi Commercial Bank. “If you look at the lack of progress on the issue of China’s industrial policy — its subsidizing of specific business lines — the big issues have not been tackled yet.”
Global stocks were high yesterday on the back of the US-China de-escalation, with the US’ S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closing yesterday “at the highest levels ever,” the Wall Street Journal says. Europe’s Stoxx Europe 600 index was also up yesterday, hitting a new record high for the first time in four years, according to the journal.
The outlook for the global economy isn’t suddenly rosy, though: Even with the cloud of uncertainty from the US and China, as well as Brexit, largely clearing, investors are still hesitant to give the all-clear for the global economy. Analysts point to US government bond yields remaining historically low despite rising slightly. “Since yields tend to rise and fall with the economic outlook, the fact that they are so low is signaling that any pickup in economic activity ‘is likely to remain muted,’ said Christopher Sullivan, chief investment officer at United Nations Federal Credit Union.
The Turkish lira took its biggest tumble in two months yesterday after President Recep Erdogan threatened to close two NATO bases if the US decides to impose sanctions on Ankara over its purchase of a Russian missile system, Bloomberg reports. Yesterday’s drop was the largest emerging market currency decline as Erdogan’s threats made markets uneasy, the business information service notes.
Meanwhile, Ankara also deployed military drones to northern Cyprus as tensions continue to rise in the Mediterranean over its recent maritime border demarcation agreement with Libya, according to the Guardian.
In other international news:
- Progress in Saudi-Qatar talks: Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani has told CNN that there has been “some progress” in talks with Saudi Arabia.
- Lebanon protests turn violent: Lebanese security forces fired tear gas and rubber bullets at protesters demonstrating against resigned Prime Minister Saad Hariri, who pundits expect will be back in office, the Associated Press reports.
*** Facing a lot of time in the car today on your way to work or to / from meetings? Let our new podcast keep you company.
What’s a podcast? Think of it like a radio show on demand. You tap a link — and listen to folks tell you a story. Our show is about building a great business in Egypt. But if you’re talking business podcasts, we also like Built to Sell Radio and Guy Raz’s How I Built This.
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Want to catch up on Making It? Our first four guests are below, and you can catch this week’s episode (runtime 29:27) on our website | Apple Podcast | Google Podcast.
Want to catch up on season one? Already in this first season, we’ve heard from: