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Monday, 2 April 2018

What we’re tracking on 01 April 2018

Could the Ride-Hailing Apps Act pass the House today? The House of Representatives is expected to discuss the Ride-Hailing Apps Act today in its first plenary session after a 25-day recess, according to Youm7. It remains unclear whether the discussion will culminate in a vote on the legislation, which has been fast-tracked through Cabinet and House committees after the Administrative Court ordered last month that Uber and Careem be shut down. The law has rubbed most stakeholders the wrong way, and the Council of State (Maglis El Dawla) is also now calling the legislation’s constitutionality into question. We have the full story in Speed Round, below.

Parliament could receive the FY2018-19 state budget today, with House Speaker Ali Abdel Aal expected to refer it to the House Planning and Budgeting Committee during today’s session, Youm7 reports. Discussions on the budget will only officially begin following Finance Minister Amr El Garhy address to the assembly, the date for which has yet to be set. Last we heard, Cabinet was awaiting sign-off from President Abdel Fattah El Sisi before shipping the budget to the House of Representatives.

The House general assembly will also discuss today a draft law establishing the Supreme Anti-Terrorism and Anti-Extremism Committee, which Cabinet approved in January, as well as reports from various House committees on the Consumer Protection Act and a draft law that would regulate food trucks and carts.

Also on the docket for today: Holding final plenary session votes on legislation regulating the National Women’s Council, a bill that would give incentives for innovation and scientific research, and amendments to the law on reclaiming state-owned land.

After today’s flurry of votes, the House will then go back into recess for the remainder of the week in observance of Easter.

The results of the presidential elections are due to be announced today at 3:00 pm. Preliminary results showed President Abdel Fattah El Sisi won 92% of the vote with a turnout just north of 40%.

Pharos Holdings will be holding a two-day investor conference headlined ‘In Search of Egypt Alpha’ today and tomorrow. The event, set to see a number of senior government officials in attendance, is expected to host around 40 companies from a range of industries, Chairman and CEO Elwy Taymour said in a statement (pdf). The opening day will see panel discussions on the energy and petrochemicals, while the second day will see meetings between fund managers and company reps.

And the yields keep tumbling down: Average yields on Egypt’s three- and nine-month treasury bills fell at an auction on Sunday, CBE data showed. Yields on three-month bills fell to 17.63% from 17.99% at the last similar sale a week earlier, while yields on nine-month bills decreased to 16.88% from 17.33%. Dropping yields have raised concerns that Egyptian treasuries will be less attractive to portfolio investors and carry traders, especially after the central bank cut interest rates on Thursday by 100 bps. But as we noted yesterday, few analysts see the carry trade losing momentum any time soon, with Egypt still looking like the hot EM trade.

Falling yields come amid concerns that interest in emerging market debt is tapering off. “Emerging market funds are not seeing the inflows that they saw last year, investors are becoming more selective and issuers are making concessions on pricing,” executive director of fixed income syndicate at JPMorgan Nick Darrant tells the Financial Times. Inflows into EM debt funds are slowing, while higher bond yields have driven returns for the sector into negative territory. The JPMorgan global EM bond index has fallen 2.3% so far in 2018 after a 9.1% total return gain for 2017. Last month, we noted that EM debt has been underperforming compared to EM equities.

If history is a gauge, Saudi may not want to loudly celebrate its recent FTSE upgrade to EM status. “Qatar and the UAE, saw stock rallies fade after MSCI upgrades in May 2014, suggesting that Saudi Arabia could also see a slowdown of the flows,” writes Filipe Pacheco for Bloomberg. Pakistan’s main index lost 15% last year, even after MSCI gave it an EM upgrade last June. MSCI will make a decision on classifying Saudi Arabia in June.

Other headlines of note this morning:

MUST READ for fintech types: Investment in fintech for capital markets fell by more than half in 2017 compared to each of the previous two years, according to Boston Consulting Group, which says that USD 570 mn was invested in capital markets fintech companies last year against nearly USD 1.2 bn in each of 2015 and 2016. Companies focused on pre-trade activities won 39% of total investment in capital markets fintech companies, while those concussed on execution landed 35%. Just 4% went into the “‘primary’ area of issuing stocks and bonds, where bankers say technology has had almost no impact on their working practices in the past decade.” (Financial Times)

An idea for the EGX to consider? Kuwait’s stock exchange has launched a “premier market” segment that groups together 16 of the nation’s largest and most liquid companies. Premier segment members include NBK, Zain and Agility. Its “main market,” comprising smaller and less-liquid companies, will have 148 members, while a third layer of illiquid names will be classified as the “auction market.” (Bloomberg)

Bahrain’s biggest oil find since 1932 dwarfs its present-day reserves, the nation’s state-owned news service said, without giving figures. (Bloomberg)

Have you shopped at Saks or Lord & Taylor in Canada or the United States? You’ll want to keep an eye on your credit card statement. Canadian retailer Hudson’s Bay, which owns the two iconic brands, said yesterday that “mns” of credit cards may have been stolen, making it one of the largest breaches involving payment cards in the past year. (Reuters)

Continent of snitches: It looks like our fake-news snitch hotline inspired the European Commission, which is gearing up to crack down on social media platforms that play a role in online “disinformation,” the Financial Times reports. The move comes ahead of elections to the European Parliament, which the commission is concerned could see repeated patterns of social media algorithms driving content that would have an impact on voter opinion.

PSA- The Easter and Sham El Nessim long weekend is coming up: The two holidays fall on 8 and 9 April, respectively. We hope you’re looking forward to a four-day weekend as much as we are. Enterprise will be off next Sunday and Monday in observance of the holidays.

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