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Monday, 25 March 2019

What we’re tracking on 25 March 2019

Let’s kick off the day with some doom and gloom, shall we? Sentiment is a bit glum this morning as global markets face their first trading day of the week. The expectation is that key economic data due this week from the US and “other wealthy nations” including the UK, France and Canada could “enlighten the debate over whether the global economy is in the midst of a temporary dip or headed toward a more serious downturn,” the Wall Street Journal writes.

Asian markets aren’t waiting. They largely sat out Friday’s selldown (which saw the S&P 500, Euro Stoxx and MSCI EM all close down just shy of 2%), but they’re making up for it today: The Nikkei is down more than 3% this morning and shares in Australia and South Korea are also in the red, CNBC reports.

Closer to home: The House of Representatives will hold its final round of consultations on the proposed constitutional amendments today and Thursday, according to Ahram Online. The final amendments should be voted on within the House and ready for a national referendum by mid-April, Speaker Ali Abdel Aal said.

Foreign Minister Sameh Shoukry heads to Washington today to meet with his American counterpart Mike Pompeo, picking talks up where they left off during Pompeo’s January visit to Egypt, according to a ministry statement.

It’s day two of the World Tourism Organization’s regional meeting in Cairo. Tourism Minister Rania Al Mashat spoke yesterday on the need for the industry to modernize, empower women and embrace sustainability, Ahram Online reports. Al Mashat also confirmed that the ministry would abide with a court ruling that overturned a recent government decision to increase umrah fees.

The Cityscape Egypt real estate conference continues today. The associated expo runs Wednesday-Saturday.

Swiss Foreign Minister Ignazio Cassis is in town for talks as he delivers a speech at an event marking 110 years of Swiss-Egyptian trade, Egypt Independent reports.

Also happening this week:

  • It’s interest rate week as the central bank decides on Thursday what to do with interest rates. Our poll this month has six of 10 economists projecting a rate cut of 50-100 bps. The CBE’s overnight deposit rate is 15.75%, while its overnight lending rate is 16.75%.

Uber’s USD 3.1 bn Careem takeover is imminent: Uber is about to buy regional rival Careem with a final agreement expected today or tomorrow, the FT reports. Two sources told the paper that Uber would buy out its Dubai-based competitor for USD 3.1 bn — a substantially larger sum than the USD 2 bn valuation bandied about last year. Bloomberg also has the story.

Look for comment today from the Egyptian Competition Authority, which has threatened fines of EGP 500 mn for each of the two companies if they go ahead with the merger, claiming it would be anti-competitive. Fines equivalent 1.9% of the value of a USD 3.1 bn merger for a multinational that’s faced challenges getting traction in many EM? Not a bad price to pay, as one of the smartest PE guys we know suggested recently. ECA chief had a colorful no-comment for Al-Mal yesterday.

Dominating headlines in the west this morning: The verdict of the Mueller investigation is out. The two-year investigation into The Donald’s links to Russia has found that neither the president nor his campaign colluded with Russia in order to sway the 2016 presidential election, the New York Times says. He “did not find that the Trump campaign or anyone associated with it conspired or co-ordinated with Russia in its efforts to influence the 2016 US presidential election,” US attorney-general William Barr wrote in a letter to Congress. Trump was ecstatic. Democrats weren’t.

Every international outlet you can name is picking this up: The FT, the WSJ and The WaPo.

Also worth knowing about this morning:

  • Erdogan is promising to go after bankers including JP Morgan for allegedly having tanked the TRY, promising they will “pay a heavy price” after upcoming elections. Bloomberg and the FT have the story.
  • Ambitious economic reforms in Saudi Arabia are taking a toll, with big names including Almarai and Fawaz Abdulaziz Alhokair facing challenges on the back of slowing demand and increased costs, the WSJ says.
  • The outlook for Britain’s financial sector is the worst since the 2008 crisis, according to a survey that found business falling off a cliff at the country’s 84 top financial firms, Reuters reports.

Apple is holding an event at 7pm CLT at which it’s expected to unveil its streaming service. Watch it here.

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