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Wednesday, 30 January 2019

What we’re tracking on 30 January 2019

Is anyone else a just a little surprised that January is almost over? As The Colonel hammered into us eons ago: Time accelerates as you age.

Foreigners are back to loving our debt: Foreign investors bought 100% of the EGP 1.16 bn worth of five-year treasury bonds offered in a Monday auction. “After pulling out about USD 10 bn from Egypt during a global selloff last year, foreign investors are back to capture the highest yields in emerging markets after Argentina,” Bloomberg notes. That appetite is quite likely one of the big reasons the EGP has been gaining strength against the greenback this week. We break it all down in this morning’s Speed Round, below.

Is there an Egyptian link to the global Huawei scandal? It’s just a single line in a story by the Financial Times, but the paper notes the US Department of Justice is alleging that the global telecoms company “sold equipment to a third party in Egypt which then sold it to Iran.” Huawei faces criminal charge in the US and its CFO is under arrest in Canada, accused of trying to circumvent sanctions on Iran. Huawei itself has significant business in Egypt, as we noted yesterday, but moved its MENA headquarters out of Cairo to Morocco back in early 2017. You can read more about the US case against Huawei in the Wall Street Journal.

Egyptian parliamentarians are in Addis Ababa today and will meet with the speaker of the Ethiopian house, reports Al Mal. Expect the Grand Ethiopian Renaissance Dam, which threatens to fundamentally change Egypt’s water supply, to be on the agenda.

Dominating front pages in the global business press: Investors sent Apple shares up 5.5% in after-hours trading overnight after Apple reported slightly better results than Wall Street had feared after Apple’s surprise warning earlier this month. Apple’s revenues were down 5% for the holiday quarter just ended, while profits were off 0.5%. “We see great upside by continuing to focus on then things that we can control … We wouldn't change our position for anyone’s,” Apple CEO Tim Cook said on his results call as he promised “some exciting announcements later this year. … Apple innovates like no other company on earth and we are not taking our foot off the gas.” See: FT | WSJ | Bloomberg | Reuters | CNBC.

The US is “narrowing its list of potential nominees to lead the World Bank,” the FT reports. The leading contenders include:

  • Ray Washburne, who heads the Overseas Private Investment Corporation, which we’ve previously noted has long backed Egyptian companies and projects;
  • Indra Nooyi, the former CEO of PepsiCo, who now chairs the company’s board;
  • David Malpass, a senior Treasury official who has struck a “sceptical tone” on multilateral institutions.

Put politics aside: The World Bank’s staff association has warned directors that they need to “put politics aside” as they choose a successor to Jim Yong Kim, who leaves office on 1 February to become a private equity guy.

Worth reading: Kim’s farewell note, which he penned as a piece for LinkedIn.

In miscellany worth knowing about this morning:

  • Three-way bank merger in UAE: Abu Dhabi banks ADCB and UNB will merge via a share swap and then acquire Al Hilal Bank to create an entity worth USD 114 bn. (Bloomberg)
  • Saudi stimulus spending: Saudi Arabia unveiled a USD 426 bn industry and infrastructure development plan. (Bloomberg)
  • Palestinian gov’t resigns: Palestinian Prime Minister Rami Al-Hamdallah and his government have tendered their resignations. (Reuters)
  • Brexit neverending: “Theresa May was locked on a collision course with Brussels on Tuesday after the House of Commons backed her efforts to rewrite her own draft Brexit treaty.” (FT)
  • America freezes as Australia burns: The US Midwest is going to see some of its coldest temperatures ever this week and wildfires are sweeping Australia. Because climate change isn’t real. (NYT)

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