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Wednesday, 2 January 2019

What we’re tracking on 02 January 2019

Happy New Year, friends, and welcome to 2019. We’re delighted to be back in your inboxes this morning after our end-of-year publication break the first half of this week.

Don’t expect a rush of news before the week of 13 January. It’s prime vacation time this week and well into next ahead of Coptic Christmas on Monday, 7 January.

That said: It’s business as usual at the House of Representatives with the exception of a day off on 7 January, so you can expect news on the legislative and regulatory front.

Custom duties on fully assembled cars imported from the European Union fell to 0% yesterday under a trade agreement with the European Union. Domestic assemblers had been angling for protection against the move, arguing that what they see as unfair competition from EU, Turkish and Moroccan vehicles endangers assembly jobs here.

Egypt assumes the rotating presidency of the African Union this year.

Where did the EGX end 2018? The benchmark index was down 13.2% for the year, sapped largely by the ravages of the Emerging Markets Zombie Apocalypse that was the story of 2018 on the equities front.

We were not the worst-performing regional market. The Dubai Financial Market was down more than 26%, while the Muscat Securities Market wrapped 2018 off 15%. Qatar was the region’s top gainer in 2018, rising more than 20% as the blockade became the new normal there. Saudi Arabia, the region’s largest market, was up nearly 7% for the year.

US indexes closed 2018 with their steepest annual declines since the global financial crisis, the Wall Street Journal notes.

Big gainers in the US of A last year: Merck (+36%) led the Dow while chipmaker AMD (+80%) topped the S&P 500.

Big losers in the US last year: Goldman Sachs led the Dow down as its shares shed more than a third of their value (General Electric would have claimed that honor had it not been kicked out of the index at mid-year, the Financial Times notes), while Coty shed more than 60% on the S&P.

So what does 2019 hold for companies and investors alike? Some of the best prognosticating we’ve read in the past few days:

  • Forecasting the world in 2019. (Financial Times)
  • Major themes set to shape markets in 2019. (Financial Times)
  • The future might not belong to China. (Financial Times)
  • Wall Street whiplash — five questions for investors. (Financial Times)
  • Investors on edge after stocks’ biggest yearly loss since 2008. (Wall Street Journal)
  • Money managers to watch in 2019. (Wall Street Journal)
  • Investors are still cautiously optimistic about 2019. But here’s what could go wrong. (New York Times)
  • Why 2019 could be very good for stocks, after the worst year in a decade. (CNBC)
  • UAE minister says he expects rift with Qatar to continue. (Bloomberg)

The FT thinks real estate prices in Egypt will be stable this year. In a look ahead at property prices in EMEA in 2019, the FT quotes an analyst who notes that “there is a huge amount of supply due to come to the market in 2019, but prices are likely to remain stable due to strong demand from a rapidly growing population and the fact that most purchases are in cash. Other factors likely to support the current prices are high inflation and rapid increases in petrol prices, leading to the rising cost of construction materials. The current oversupply is also likely to prevent the major developers from launching new projects, which will further support the current prices. Two areas expected to see plenty of activity over the next couple of years include the New Capital, to the east of Cairo, and the area surrounding the new Grand Egyptian Museum in Giza.”

In miscellany this morning:

Elizabeth Warren is the first Democrat to throw her hat into the race for the US presidency in 2020. Warren, who even critics / rivals including Michael Bloomberg admit is both a strong speaker and exceptionally intelligent, rose to prominence with a critique of capitalism and a loud call to clamp down on the ‘excesses’ of Wall Street through more regulation. A video launching her exploratory committee presents her as a champion of the beleaguered American middle class (watch, runtime: 4:20). The story is getting heavy play in the global business press: FT | WSJ | NYT. The Times, meanwhile, looks at “which Democrat matches the moment” as “2020 candidates line up.”

Yes, large chunks of the American federal government are still closed. US Democrats intend to try to end the shutdown when they take over the House of Representatives on Thursday, but face a battle in the Republican-controlled Senate.

Netflix pulled an episode of ‘Patriot Act with Hasan Minhaj” in Saudi Arabia after a complaint from Riyadh over an episode that criticized Crown Prince Mohamed bin Salman. The episode (the next-to-last in the season) remains available in Egypt.

The third season of Stranger Things will be out on 4 July, 2019. That’s a Thursday, for those of you looking for a great excuse to create a three-day weekend…

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