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Thursday, 20 September 2018

What we’re tracking on 20 September 2018

**#2 The EGX fell yesterday to its lowest close this year, marking its sharpest one-day drop since mid-2016, according to Reuters. The EGX fell 3.8% on Wednesday only a few days after the benchmark EGX30 closed down 3.6%, at the time its lowest level since January 2017.

What’s going on? Local retail and institutional investors are selling — they’re spooked by fears of face another round of devaluation, lack of liquidity in the market, worries about interest rates and general “emerging market jitters,” Reuters said after speaking with analysts in Dubai and Cairo.

SANITY CHECK- Emerging markets whack-a-mole is a distraction. If the EM Zombie Apocalypse has you freaked out, read nothing else this morning until you digest Fidelity PM Paul Greer’s piece for the FT, which cogently argues that “The longer-term strategic case for EM is still very much in place. EM debt gives you access to a high growth, portfolio diversification and generous real yields. With 50 percent of global GDP now coming from EM, and healthy Sharpe ratios over the cycle, it is clear the asset class cannot be ignored over the long term.”

STAT OF THE MORNING: There are only 14 mn insurance policies in the market today. This in a nation of >100 mn people. Source: Financial Regulatory Authority deputy head Reda Abdel Moaty in a panel discussion last night moderated by Masaa DMC host Osama Kamal (watch, runtime: 4:11).

An IMF delegation will arrive in Cairo at the end of October for its fourth review of the Madbouly government’s economic reform program ahead of unlocking another tranche of the USD 12 bn extended fund facility, Finance Minister Mohamed Maait said at a luncheon hosted by our friends at the American Chambers of Commerce. Maait spoke on a host of issues during the talk, including on the new tax code, which he said would not impact tax rates this year. The highlight of his talk, however, was Egypt’s plan to tap the global debt market next year and the impact on Egypt of the ongoing turmoil in EM. We have more in Speed Round, below.

AWB defendants out on bail today? Defendants including Alaa and Gamal Mubarak and former EFG Hermes co-CEO Yasser El Mallawany will be appearing in court today for a hearing that could determine if they will be released on bail pending a court review of an expert committee review that had suggested charges against them could be dropped. Word on the street is that a settlement agreement is in the works. The defendants have also filed a motion for the court’s judges to recuse themselves, according to Youm7.

The Electricity Ministry will sign today EGP 6.3 bn worth of contracts with Siemens to manage the three combined-cycle plants in Burullus, Beni Suef and the new capital, said ministry sources. Payment for the right-year operations and maintenance contract will be split into an EUR 176 mn foreign-currency tranche and a EGP 2.6 bn LCY-denominated component. Payment will begin in four years and will be disbursed over an eight year period. The contracts were initially to be signed back in July.

Goldman Sachs has a new co-head of investment banking. Dan Dees replaces John Waldron, who was last week promoted to president, Bloomberg reports. New York-based co-head Gregg Lemkau and London-based Marc Nachmann remain in place, the Financial Times adds. The shifting of execs around like pieces on a chessboard comes as Lloyd Blankfein prepares to hand over the reins of power at month’s end. The appointment came as Goldman “vaulted past Citigroup” to become the second-largest global investment bank by revenue. JPMorgan remains in the pole position.

In miscellany today:

  • If you’re lifting to failure, will just one set do? Yes, if you’re really lifting to failure, a new study suggests. (New York Times)
  • Canadian cannabis company’s shares pop 38% in a day, making it the most valuable company of its kind in the world amid a frenzy in the fast-emerging sector. (Globe & Mail)
  • Do you miss classic PlayStation games? Sony is hopping on the bandwagon that Nintendo created: The console maker is set to release in December its PlayStation Classic, complete with two controllers and 20 “genre-defining” games (among them Final Fantasy VII, Tekken 3, and Ridge Racer Type 4). (The Verge)
  • Apple is preparing to announce a new iPad Pro, according to code buried in the beta of iOS 12.1. (9to5Mac)

PSA- Is Evernote going the way of the dodo? If you, like us, rely on Evernote to store copies of your passport, random musings, meeting notes, your kid’s KG art, etc, you may want to have a look at rival offerings. The company’s obit has been written so often it’s virtually a meme in the tech press, but it (a) lost senior execs including its CFO, CTO, CPO and head of HR a few weeks back and (b) slashed this week 15% of its workforce.

Alternatives for the Mac heads among us are probably some combination of Apple Notes (learn how to import to Notes from Evernote) and Microsoft’s Onenote (Microsoft has built an importer). Both run on macOS and iOS. Yeah, Bear is cooler — but we’re willing to wager Onenote and Apple Notes will be around a little bit longer. And who the hell (among non-coders) needs markdown support, anyway?

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