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Thursday, 22 March 2018

What we’re tracking on 22 March 2018

The state IPO program unveiled this week is getting props from IMF Egypt Mission Chief Subir Lall, who tells Al Mal that the listing of state-owned companies will help boost the local capital market.

The US Federal Reserve’s Open Market Committee lifted its benchmark overnight lending rate 25 bps to a range of 1.50%-1.75%, the Fed said in a statement on Wednesday. In its first policy meeting under new chief Jerome Powell, the Fed indicated that inflation should finally move higher after years below its 2% target and that the economy had recently gained momentum. It also raised the estimated longer-term “neutral” rate, a sign the current gradual rate hike cycle could go on longer than previously thought, according to Reuters. The Fed projected US economic growth of 2.7% in 2018, up from the 2.5% forecast in December. Its preferred measure of inflation was expected to end 2018 at 1.9%, unchanged from the previous forecast, but it is seen rising a bit above the target next year.

Our own central bank’s Monetary Policy Committee is set to meet next Thursday to decide on interest rates. With annual urban inflation dropping to 14.4% — the lowest rate since October 2016 — the CBE hinted earlier this week at a possible rate cut by saying that inflation appears under control in the medium-term. Research houses have been unanimous in saying that the CBE might cut interest rates again this month, with differences on the magnitude of the cut ranging from 50-200 bps.

It’s the last weekend of campaigning in the presidential election, with voters due to go to the polls starting on Monday, 26 March. Balloting ends on Wednesday, 28 March, and companies are being asked to give staff sufficient time during the workday to make it to and from their polling station. Results are due to be announced on Monday, 2 April. Look for the poll to continue dominating coverage of Egypt in the international press in the meantime. The two campaigns go into a ‘quiet period’ on Saturday ahead of the start of voting.

No Egyptian universities made the Times Higher Education’s ranking of the top five universities in the Arab world. Egyptian universities took nine of the 32 slots in the ranking, with Beni Suef University topping them in tenth place, followed by AUC. The top five were:

  • King Abdulaziz University (KSA)
  • Khalifa University (UAE)
  • Qatar University
  • Jordan University of Science and Technology
  • United Arab Emirates University

Global M&A this year crossed the USD 1 tn mark on Tuesday, the fastest it has ever reached that level, according to the Financial Times. Announced transactions totalled USD 4.6 tn this year, up 50% y-o-y and 12% higher than 2007, according to data from Dealogic. Investment bankers have have cut a string of USD 10 bn-plus M&As in 2018. Activity in Japan and the UK has more than doubled from a year ago while German M&A volumes are up fourfold. The rise was buoyed by quickening economic growth and strong business confidence, particularly following the tax cuts passed in Washington last year. Notable transactions this year include: US health insurer Cigna’s USD 67 bn takeover of Express Scripts, German utility Eon’s acquisition of renewable energy group Innogy for EUR 43 bn, and Comcast’s GBP 22.1 bn bid for Sky.

Also in the headlines this morning:

Facebook engineers finished reprogramming the artificial remorse module for Mark Zuckerberg in time for him to say yesterday that “this was a major breach of trust. I’m really sorry this happened. We have a basic responsibility to protect people’s data.” The CEO bot squeezed out the short, declarative sentences after it was revealed earlier this week that data on some 50 mn Facebook users had been misused. The backlash from users and investors alike has been so bad that Zuckerberg sat for an interview with the New York Times yesterday.

ETFs are the flavour of the day in a bull market, but what happens when they get hit with a wave of redemptions in a downturn? That’s the question the Wall Street Journal is asking, taking the example of ETFs that buy securities such as high-yield debt. Read Could ETFs fall into a liquidity jam?

The UAE and Saudi have tried to influence the White House. Shocking? Apparently to the US press, because no US official has ever worked to influence an official in our part of the world. “A cooperating witness in the special counsel investigation worked for more than a year to turn a top Trump fundraiser into an instrument of influence at the White House for the rulers of Saudi Arabia and the United Arab Emirates, according to interviews and previously undisclosed documents,” the New York Times reports.

Sarko took Qaddafi’s coin? Former French President Nicolas Sarkozy was charged by prosecutors with accepting illegal campaign contributions from the Qaddafi regime in Libya in 2007, Bloomberg reports.

Workshop on blockchain in capital markets today: Fintech-focused accelerator Pride Capital is hosting a workshop today titled “A Bright Future for Blockchain in Capital Markets” at the Greek Campus. The workshop will feature a discussion with EGX Chairman Mohamed Farid and Henebry Blockchain Consulting CEO Bobby Henebry. To register for a spot in the workshop, tap here if you’re on your mobile and click here if you’re on a computer. You can check out the workshop’s Facebook page for more information on the event or Pride Capital’s LinkedIn page for more on the accelerator. Pride is affiliated with our friends at Pharos Holding, who along with CIB and SODIC we are proud to count as sponsors of Enterprise.

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.

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