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Sunday, 3 March 2019

What we’re tracking on 3 March 2019

It is shaping up to be a busy few days here at home and in the region as we grapple with the fact that we are already on the third month of 2019. Among the highlights we’re keeping an eye on:

EFG Hermes One on One kicks off: The EFG Hermes One on One conference in Dubai gets underway today and wraps up on Wednesday. The outlook for markets undergoing economic reform, including Egypt and Pakistan, sill be among the top themes this year at world’s largest frontier and emerging markets investor conference. The 2018 event saw more than 500 fund and portfolio managers with aggregate AUM north of USD 8 tn meet face-to-face with C-suite execs from 173 companies spanning 26 countries. Keep an eye out for media coverage starting tomorrow.

The Egypt Investment Forum is on its second day today, where the discussion is focused on Africa, with an emphasis on trilateral cooperation between Egyptian companies, GCC-based investors and suppliers based in developed economies.

The EGX has introduced in its latest monthly (pdf) and weekly (pdf) reports a section tracking corporate actions taken by publicly-traded companies. Aggregates of capital increases, cash dividends and stock splits are provided on pages 9 and 10 of each of the newly formatted periodicals.

Is Kamel El Wazir going to be Egypt’s new transport minister? There have been murmurs around town that Armed Forces Engineering Authority Chief Kamel El Wazir will succeed Hisham Arafat as transport minister following the latter’s resignation after last week’s Ramsis train disaster. Talk show host Amr Adib said on Friday that El Wazir is a “strong candidate” for the appointment (watch, runtime: 9:09), while unconfirmed reports from RT claim that the authority’s chief of staff, Ehab El Far, has been tapped to take El Wazir’s position at the helm of the authority.

The shuffle comes as Prosecutor General Nabil Sadek ordered the detention of six people over the train crash, pending investigation, Reuters reported. The train’s driver, his assistant, another train driver and three railway workers will be detained for four days. The death toll of last week’s deadly accident has risen to 22, Health Minister Hala Zayed said. In the aftermath of the incident, MP John Talaat is preparing a draft amendment to the Penal Code to tighten the punishment of gross negligence to execution instead of prison, Youm7 reported.

On the brighter side of things, CNN turns the spotlight to the hero of the incident: Using water bottles and blankets, Mohamed Abdel Rahman rushed from his kiosk at the station to save as many people as he could from the fire that broke out from the collision.

Famed investor Warren Buffett’s annual letter to shareholders was published last week, in which the Oracle of Omaha attributed the wild fluctuations in Berkshire Hathaway’s 2018 results, including final-quarter losses of USD 25.4 bn to a new accounting rule that requires it to mark its investment securities to current market prices.

The American Tailwind: A highlight of this year’s letter was Buffett’s retrospective look at his 77-year career, in which he attributes many of his achievements to the resoluteness of the American economy. In a riposte to the doomsayers, he reminds us that, despite all the crises the country has faced through its history, it has endured and continued to bring prosperity to those who invest in it.

What everyone else is saying: Much of the global press focuses on Berkshire’s financial losses, including the New York Times, the WSJ and Forbes, while MarketWatch described the results as “one of his worst years ever.” Bloomberg leads with Buffett’s hopes for an “elephant-sized acquisition” in 2019, while The Observer think the letter reveals the probable successors to the 88-year-old investor: Berkshire’s head of insurance, Ajit Jain, and Berkshire Energy chairman, Greg Abel. Read the letter in full here (pdf).

US companies are running for the doors in China over fears of an “endless” tariff saga, Reuters reports. The newswire focuses on how US companies are shifting their business out of China to sidestep potential repercussions from the ongoing trade war, despite the potential for an agreement being reached.

Staying on China, Canada is proceeding with the extradition hearing for Huawei’s Chief Financial Officer Meng Wanzhou, whom US prosecutors have accused of violating US sanctions on Iran, the Wall Street Journal reported.

MSCI is quadrupling the weight of Chinese home-based shares in its global benchmarks later this year, which could draw more than USD 80 bn of inflows to the economy, Reuters reported.

Eurobond prices are on the rise in emerging markets as February sales dwindled despite rushes by Egypt and other “less prolific” issuers to tap the market, according to Bloomberg. The scarcity of issuances during the month, with just USD 104.5 worth of eurobond sales — the lowest recorded figure since December 2016 — “suggests overall supply will remain limited.”

The San Francisco tech IPO race is heating up as car-booking app Lyft posted IPO documents showing a steep increase in revenue, user base, and losses. According to the Financial Times, Lyft has indicated that it will go public with a dual-class share structure to give its founders greater control, and will also allow some of its drivers to buy shares in the IPO, along with more traditional investors.

Saudi Aramco is looking to issue a USD 10 bn debut bond that the FT predicts “could be well received.” Nevertheless, questions linger over the anticipated USD 100 bn proceeds, which are reportedly due to be funnelled into the acquisition of a 70% stake in domestic petrochemicals group Sabic, leading some bankers to characterize the sale as “moving cash from one government pocket to another.”

Another day, another EastMed giant gas discovery: ExxonMobil and Qatar Petroleum have discovered a reservoir off Cyprus’ shores estimated to hold five to eight tcf of gas, Reuters reported. The new gas field is the biggest in Cyprus and one of the biggest finds in the world over the past two years, Cypriot Energy Minister Yiorgos Lakkotrypis said. Disputes with Turkey over the right for exploration and limited network capacities might hold up production.

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