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Sunday, 23 September 2018

What we’re tracking on 23 September 2018

It’s a busy news day here in Cairo, ladies and gentlemen.

But first, let’s start the morning with some good news: Leading private-sector schools outfit CIRA has priced its IPO — and the offering is more than 10x oversubscribed on the back of heavy demand from global institutional investors. It’s the first IPO of the fall season, and you can look for consumer and structured finance player Sarwa to go out next. We have chapter and verse in this morning’s Speed Round, below.

Also: There’s lots of international interest in our hydrocarbon industry at the moment. LSE-listed Soco has entered an agreement to acquire Merlon. SDX is talking to BP about buying a “significant package” of BP’s Egyptian assets. A German LNG import terminal is looking to Africa as a source of cargoes. We have the rundown in today’s Speed Round.

**#1 Three stories look set to dominate the news agenda this week, and two of them are closely linked:

  1. Will the sell-off on the EGX continue as foreign and domestic investors alike squirm in the face of the EM Zombie Apocalypse and this week’s interest rate decision? The EGX lost right around 8%, erasing its gains for the year. The benchmark index is now down -6.2% YTD.
  2. Central bank to decide interest rates: The central bank’s monetary policy committee meets on Thursday to review rates. The consensus among analysts is that it will leave rates on hold.
  3. Diplomacy will be all the rage with President Abdel Fattah El Sisi in New York for the United Nations’ annual fall love-in.

Turkey’s economic woes have raised concerns about whether Egypt can withstand the emerging market crisis, Jared Maslin writes in a piece for the Wall Street Journal. Maslin all but suggests that the situation for Cairo (and other EM) could get as bad as it did for Ankara. Vice Minister of Finance Ahmed Kouchouk tells him, however, that in addition to the ongoing economic reform agenda, authorities are taking “the right steps” to make sure that Egypt remains attractive for foreign investment throughout the EM selloff and beyond. “Imagine if this happened before our reform program,” he added. The EGX sell-off last week came after the sons of former president Hosni Mubarak and other high-profile execs were implicated in an insider trading case. The impact from the case compounded the effect of the wider EM selloff, which has seen currencies including Turkey’s and Argentina’s drop to record lows, the WSJ says.

(In other Turkey news: The Nutter to our North’s coast guard detained a number of Egyptian fishermen on a Cypriot boat in Cypriot waters claimed by Turkey, the Associated Press reports.)

El Sisi is looking to take relations with the United States to the next levelwhile in New York to attend the UN General Assembly, which opened on Tuesday last. The president’s remarks are expected to focus on security and economic challenges, Egypt Today reported. El Sisi is expected to sit down for a one-on-one with The Donald on the sidelines of the UNGA, Reuters reports, citing the White House. The meeting will be the first between the two presidents since El Sisi won a second term — and since the Trump administration normalized  annual military aid to Egypt, Ahram Online says, quoting state news agency MENA. The president is also expected to meet with US business leaders to pitch investment here.

Plenty more where that came from: We had previously reported that El Sisi will also hold talks in Washington with German Chancellor Angela Merkel and French President Emmanuel Macron. Look, too, for talks on the sidelines with the leaders of Israel, Britain, France, South Korea and Japan.

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