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Tuesday, 30 July 2019

What we’re tracking on 30 July 2019

We’re starting to see signs of renewed momentum in the state privatization program: State investment bank NI Capital is moving ahead with selecting private sector investment banks to quarterback the stake sales of e-Finance and Sidi Kerir Petrochemicals, and new details are emerging on the Alexandria Container and Cargo Handling Company’s secondary offering. We have chapter and verse in this morning’s Speed Round, below.

Do we have Fawry’s upcoming IPO to thank? E-payments platform Fawry is well on its way to its EGX debut, with the private placement and retail offering both currently underway. Fawry’s initial public offering, which will be Egypt’s first since last October, will be a litmus test for the country’s anemic IPO market ahead of other planned offerings.

Foreign Minister Sameh Shoukry is heading to Greece and Cyprus today for what appears to be a one-day visit to talk cooperation and regional issues with top officials, according to a ministry statement. Shoukry is scheduled to meet with Greek Prime Minister Kyriakos Mitsotakis and Foreign Minister Nikos Dendias, as well as Cypriot President Nicos Anastasiades and Foreign Minister Nikos Christodoulides.

The two-day National Youth Conference starts today at the new administrative capital.

It’s interest rate day in the US of A: All eyes will be on Washington today and tomorrow as the US Federal Reserve holds the meeting that could see the first interest rate cut since 2008. The chance of a surprise seems slim, with markets 99.99% certain that a 25 bps cut is in the cards. The USD maintained two-month highs against a basket of currencies yesterday in anticipation of the Fed meeting.

Central banks may have to resort to more drastic measures if governments fail to provide fiscal stimulus in the event of a severe economic slump, Simon Kennedy and Craig Stirling write in Bloomberg. Why? Restarting bond-buying programs is unlikely to have the effect that it did in 2008. Oxford Economics estimates that major central banks would have to buy up assets worth more than 20% of GDP to cope with just an average downturn.

What are the options? The Fed and the European Central Bank could take a leaf out of the Bank of Japan’s book and start buying up equities and exchange-traded funds — a radical and potentially dangerous policy experiment. Otherwise, negative interest rates — which bring a host of problems of their own — could become the new normal if governments continue to hold out on fiscal stimulus.

Three names remain in the race for top IMF job: World Bank CEO Kristalina Georgieva, former Dutch finance minister Jeroen Dijsselbloem, and Bank of Finland Governor Olli Rehn are the final three names competing for Christine Lagarde’s old job as IMF managing director, the FT reports. The job is likely to go to one of Dijsselbloem and Rehn, both of whom have support among Northern European countries. France has voiced support for Georgieva but IMF bylaws that prevent anyone over the age of 65 from getting the job would need to be changed for Paris to get its way.

Five banks face USD 1 bn currency-rigging lawsuit in UK: A group of five US and European banks are facing a USD 1 bn class-action lawsuit in the UK over allegations that they manipulated the global foreign-exchange market, Reuters reports. Investors claim that JPMorgan, RBS, UBS, Barclays, and Citi rigged the currency markets between 2007 and 2013, and should compensate pension funds, businesses, and hedge funds. Global regulators have so far handed out more than USD 12 bn in fines since 2013 to financial institutions found guilty of FX market manipulation.

China is running out of patience with Hong Kong protests, and has voiced strong support for Hong Kong leader Carrie Lam as anti-government protests continue to rock the territory. A spokesman for the Hong Kong and Macau Affairs office accused demonstrators of committing “evil and criminal acts,” while a spokeswoman described the violent clashes as “horrendous incidents.” The eight-week-old protests were sparked by an extradition bill that would have enabled Hong Kong citizens to be extradited to China to face trial. The BBC and the Guardian have more.

An unexpected pay gap: American mn’aire women are earning more than their male counterparts, recent Internal Revenue Service (IRS) data compiled by Bloomberg shows. IRS data from 144.2 mn tax returns showed that women with seven-figure salaries earned an average USD 2.506 mn, compared to USD 2.477 mn for men.

The latest ingenious solution for rising divorce rates? Get men home by midnight. The governor of Ismailia seems to have drawn a connection between his governorate’s increasing divorce rates and its male population’s attachment to street coffee shops (qahwas). Governor Hamdy Othman is now making it mandatory for Ismailia’s qahwa owners to close their doors at midnight during the winter, but will grant the Cinderella-men a one-hour curfew extension during the summer, reports Youm7. The newspaper made no mention of the grounds of Othman’s decision, but stated that the governorate has one of the nation’s highest per capita divorce rates.

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