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Wednesday, 11 September 2019

What we’re tracking on 11 September 2019

We have good news to start your Wednesday with, and it’s not just that the weekend is within arm’s reach. Egypt’s headline inflation rate in August fell to its lowest in years, defying expectations of a spike on the back of July’s fuel subsidy cuts. We have chapter and verse on the pleasant surprise in this morning’s Speed Round, below.

The penultimate day of EFG Hermes’ annual investor conference in London gets underway today at the Arsenal Emirates Stadium. The event provides a forum for investors, company executives, and fund managers from Egypt and other frontier and emerging markets to network and discuss investment options with London-based investors.

The Sahara agricultural expo also enters its third day today at the Egypt International Exhibition Center. The event wraps up tomorrow.

The latest edition of the National Youth Conference will kick off on Saturday at Al Manara conference center in New Cairo, according to the official Facebook page. The one-day event will feature the usual the “Ask the President” Q&A session.

Other events coming up this month:

US President Donald Trump sacked National Security Adviser John Bolton, who wasn’t particularly supportive of Trump’s approach to “major foreign policy challenges like Iran, North Korea and most recently Afghanistan,” the New York Times says. Trump, naturally, announced the decision on Twitter yesterday, saying that he had “asked John for his resignation,” but says he offered to resign willingly.

Softbank wants to pull WeWork’s IPO: WeWork’s biggest outside shareholder, SoftBank, is opposing the loss-making property group’s IPO after unenthusiastic responses from investors, sources tell the Financial Times. Softbank and its Saudi-backed Vision Fund have invested more than USD 10 bn into WeWork, but their eagerness has dwindled as the company’s valuation was slashed from USD 47 bn to USD 15-20 bn. The venture has even been called “the most ridiculous IPO of 2019.”

Rival New York bourses NYSE and Nasdaq are keeping a close eye: The New York Stock Exchange and Nasdaq are in a “knife fight” for IPOs, and both are watching WeWork’s movements closely to capitalize on a potential listing, the FT says. But if Softbank gets its way and the stake sale falls through, the battle between the two is expected to intensify as they fight to attract the next corporate listing.

It’s Groundhog Day: Aramco IPO to take place “very soon.” Yes, we’ve heard this before — but this time there might be some substance to it. Sources tell the FT that the company is looking to offer a 1% stake on the Tadawul as a means of proving the feasibility of a larger listing on a foreign exchange. Banks believe the IPO could take place before the end of 2019, while Aramco CEO Amin Nasser said it could take place “very soon.” The shift in strategy comes just a week after the ouster of Khalid Al Faleh from the Energy Ministry. The FT reckons it was his cautious approach to the IPO that proved to be his downfall.

Not to be outdone, Kuwait is also keen for its state-owned oil companies to list on the domestic stock market. While nearly half of the country’s GDP came from oil and gas companies last year, they account for less than 1% of Boursa Kuwait’s market cap. But now, spurred by the prospect of an Aramco IPO, Kuwait is one of several GCC countries looking at offering stakes in state-owned enterprises to relieve cash flow pressures.

Uber pushes ahead with more job cuts: Ride-hailing giant Uber is letting go of 435 of its 2.7k employees in its second major staff cut this summer amid losses and a falling stock price, according to Bloomberg. The employees, all of whom are from the product and engineering departments, are being laid off as the stock is trading 25% below its IPO price since Uber went public four months ago, but CEO Dara Khosrowshahi maintains the IPO flop is unrelated.

BlackRock now holds a 15% stake in Centamin: BlackRock, the world’s largest asset manager, has purchased a 15% stake in London-listed gold miner Centamin, according to a Centamin disclosure. The transaction, which closed on Monday, involves 80 different BlackRock entities, including the asset manager’s subsidiaries in Canada, Australia, Japan, Hong Kong, Singapore, and the Netherlands, among a host of others.

Party time for goldbugs as Citi predicts record gold highs: Gold prices may exceed their previous 2011 record to rise to over USD 2k per ounce in the next two years, Citigroup analysts wrote in a recent note picked up by Bloomberg. Risks of a global recession, falling interest rates, and an increase in trade and geopolitical tensions will all drive flows into the safe haven asset.

Fighting climate change isn’t enough — we need to adapt to it: Adaptation to climate change is as essential as attempts to mitigate it, and could significantly benefit economies, experts from the Global Commission on Adaptation say in a new report picked up by the AP. The researchers call for USD 1.8 tn investment in climate change adaptation between 2020 and 2030 in a report released yesterday in advance of this month’s UN climate change summit.

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