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Wednesday, 13 June 2018

What we’re tracking on 13 June 2018

It’s a relatively quiet day in Egypt, but there’s plenty of global business and economic news to keep you on your toes as we slide into the last 48 hours of Ramadan.

Our good friends at Zooba have signed a franchise agreement that will see at least 20 branches of the capital city’s iconic casual dining chain open in the GCC. The agreement will see Khobar-based SADF Trading and Development Co. open 20 branches in Saudi Arabia and Bahrain over the next seven years, according to an emailed statement (pdf). “When we opened our first branch in Zamalek back in 2012, a Zooba in every major city in the world was the dream; today marks the first step towards making that dream a reality,” the statement reads. No further details were provided on the agreement or when and where the first branch outside of Egypt will be inaugurated.

We look forward to the end of Ramadan so that we may order Zooba’s hawawshi at 8am for a late breakfast. Yes, for breakfast. Zooba’s hawawshi, not Wheaties, is the breakfast of champions. Order it extra crispy (you may thank us later).

We’re still waiting for news of the incoming Madbouly cabinet. As of a few minutes before dispatch time, there was plenty of speculation in the domestic press on who was in and who was out, and absolutely nothing new to report. Government sources had primed the media to expect Prime Minister-designate Mostafa Madbouly to unveil the new Council of Ministers before the holiday long weekend.

Abraaj could file for provisional liquidation in the Cayman Islands as early as this week ahead of a court hearing for a liquidation petition filed by Kuwait’s Public Institution for Social Security and scheduled for 29 June. While the date for the filing is yet to be set, “a court-supervised provisional liquidation would allow Abraaj to restructure debt, negotiate with creditors and sell assets…[and] allow a moratorium on the holding company’s unsecured claims,” sources close to the matter tell Bloomberg. The company has been battling allegations it used investor funds for corporate purposes and is trying to restructure in a bid to settle debt obligations. Management had met with creditors last week, and there’s a USD 125 mn bid for the firm’s asset management arm in the works. The Financial Times quotes one person “close to the process” as suggesting that Abraaj has “no other option” but to file for provisional liquidation.

It’s not just the Kuwaitis who are gunning for Abraaj: The salmon-colored newspaper reports that Auctus Fund (probably this outfit) has also applied in the Cayman Islands for the winding up of Abraaj’s asset management arm. It is also claiming that a debt of just over USD 100 mn (about the same amount the Kuwaiti pension fund says it is owed) is yet to be repaid.

It’s Fed day: The US Federal Reserve’s Federal Open Market Committee will conclude its two day meeting today, wand the wags see an interest rate hike in the works in view of data showing inflation is still meeting Fed expectations and financial markets remaining calm despite rising global trade tensions. Emerging market central banks are keeping a close eye on what the Fed does; the Central Bank of Egypt next reviews rates on 28 June.

Trump and Kim Jong were in the same room and the world didn’t end. US President Donald Trump and North Korean leader Kim Jong Un met yesterday in Singapore in what the US State Department has described as an “epochal event of great significance in overcoming decades of tensions and hostilities.” The two leaders agreed to turn over a new leaf in their diplomatic relations, with Trump promising to suspend joint US military exercises with South Korea and Kim reaffirming his commitment to the “complete denuclearization of the Korean Peninsula.”

US State Secretary Mike Pompeo will take the lead on future talks, which will focus on implementing the outcomes of yesterday’s summit (The New York Times sums them up nicely here). The next meeting will be held “at the earliest possible date.” Egypt’s Foreign Ministry welcomed the positive developments from the summit in a statement yesterday, which was hailed as a step forward in defusing global tensions.

Emerging markets pioneer Mark Mobius is drooling over DPRK: The longtime Templeton boss, who has since gone on to found Mobius Capital Partners, is excited about investment prospects that would be opened up if North Korea became part of the global financial system. It’s not just a “build-from-the-ground-up” frontier play, he says: “The most exciting thing is the opportunity to have a bridge between South Korea, China and Russia. Because then you would be able to have railroads and roads going north through North Korea into these huge nations.” (CNBC)

Aramco wants to invest in global petchem projects, but does anyone want to invest in KSA infrastructure opportunities? State-owned oil giant Saudi Aramco is looking at downstream opportunities, Reuters reports in an exclusive, writing that the oil giant is moving ahead with multi-bn USD projects in China, India and Malaysia and “aims to finalize new partnerships this year.” But back at home, it’s looking less likely that foreign investors are salivating about the chance to invest in Saudi infrastructure — Blackstone is said to be offering discounts to convince investors to join its USD 40 bn infrastructure fund, an “initiative hailed as an early success for President Donald Trump’s mercantilist foreign policy.”

Ah, alphabet soup: Meet the ESG ETF. Goldman Sachs and hedgie Paul Tudor Jones are spinning up an exchange-traded fund focused on impact investing, saying it will invest in companies that are “driving positive change.” Please don’t get us started.

In other miscellany this morning:

  • Look for more mega-mergers in US media and telecoms after a judge ruled late yesterday that AT&T could go ahead with its “blockbuster” USD 80 bn acquisition of Time Warner. (WSJ and also WSJ)
  • Morgan Stanley is spending about USD 4 bn each year on tech, the company’s CEO says, or about 40% of its total expense budget excluding compensation. (Business Insider)
  • China really isn’t sure it wants Wall Street investment banks to come into the world’s second-largest economy, it seems, because its pledge to ease foreign ownership limits on securities firms comes with a very large catch. (Wall Street Journal)
  • Hacked press releases case goes to trial: Two men are standing trial in the US over claims they made USD 20 mn trading on insider information they picked up by hacking business information sites to get access to press releases that hadn’t already been made public. (Reuters)
  • FYROM has a new name: The Former Yugoslav Republic of Macedonia is now called North Macedonia after coming to a compromise with Greece that could see North Macedonia gain membership in NATO and join the European Union. (Bloomberg)
  • Meet the guys who tape Trump’s papers back together. The Donald rips up paper. The problem: He’s supposed to give almost every scrap of it to an archivist. (Politico)
  • Take time management advice from Ryan Seacrest, who is unapologetically one of the busiest people in media. (New York Times)

PSA- Get your blood pressure checked. Elevated blood pressure at age 50 is linked to an increased risk of dementia later in life, a new study reports.

It’s a four day weekend: Banks, the stock market and the government have all declared a four day weekend in observance of the Eid El Fitr break, which begins on Friday. Enterprise is off on Sunday and Monday, but we’ll be back in your inboxes on Tuesday morning.

So, when do we eat? For those of us observing, Maghrib is at 6:57 pm CLT today. You’ll have until 3:08 am tomorrow to finish your sohour.

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