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Monday, 23 September 2019

What we’re tracking on 23 September 2019

Let’s get the bad news out of the way: It wasn’t pretty on the EGX yesterday. The EGX30 had its worst day since 2016, closing down 5.3% after tripping circuit breakers earlier in the day, as traders and investors reacted to protests over the weekend. The wider EGX100 fell nearly 5.7% during the day, its sharpest decline since 2012. We have chapter and verse in this morning’s Speed Round, below.

The protests also hit the radars of the talking heads (see Last Night’s Talk Shows, below) and continue to dominate coverage of Egypt in the international press (Egypt in the News, also below).

The central bank’s Monetary Policy Committee will meet on Thursday to review key interest rates. Our poll showed on Sunday that seven of the eight economists we surveyed expect the CBE will cut interest rates on the back of unexpectedly low inflation figures in August. EFG Hermes expects a 50 bps cut, while Pharos, Beltone, HC, and Shuaa expect rates to go down by 100 bps. CI Capital sees room for a more aggressive 150 bps rate cut. Renaissance Capital was the sole dissenting voice, saying the CBE could hold off over a potential rise in September inflation figures. The MPC cut rates 150 bps at its last meeting in August, bringing the overnight deposit and lending rates to 14.25% and 15.25%, respectively.

A handful of other emerging market central banks could also cut rates in the next few days, including in the Philippines and Mexico, according to Bloomberg. Brazil could also follow suit after its central bank suggested it could pursue “a longer and deeper monetary easing cycle,” while Colombia, Kenya, and Angola are not expected to join in on the global rate-cutting parade.

EMs have fared well despite market volatility in recent weeks: The outlook for emerging markets is looking good so far as “global central bank accommodation” is expected to override concerns that growth is lagging globally, says the news information service. Developing nations have managed to more or less weather the storm over the past few weeks caused by trade tensions, soaring oil prices, and the “the US Federal Reserve having possibly reached the limits of its dovishness.”

President Abdel Fattah El Sisi is still in New York for the United Nations General Assembly high-level meetings, which get underway tomorrow and wrap a week from today. We have a rundown the talks he has held so far in this morning’s Diplomacy + Foreign Trade section, below.

CIT Minister Amr Talaat is in Paris today, where he will talk with French officials about cooperation on artificial intelligence, the ministry said in a statement. The visit wraps up on Wednesday, 25 September.

Conference season continues this week:

If you have excess liquidity sloshing around, where should you invest it? In anything related to sustainability and the green economy, if this Bloomberg survey of six experts is anything to go by. “Our panel shares the belief that investing in a more sustainable global economy can be a great investment, but differ in estimations of just how competitive those returns may be.” At the top of the menu: The electric vehicle industry (whether it’s the vehicles themselves or companies lower on the value chain), renewable energy, plant gene-editing technology to protect against environmental risks, or basically any legitimate company in the circular economy.

Tough time for Bibi: A coalition of Arab parties in the Israeli Knesset, the Joint List, has recommended that Benny Gantz, Israel’s former army chief-of-staff, form a government instead of Prime Minister Benjamin Netanyahu, reports the New York Times. Bibi didn’t take the endorsement too well. He reacted “furiously” in a video on Twitter, saying he will work hard “to form a broad national unity government.” Neither Netanyahu’s Likud — which won 55 seats in last week’s national elections — nor Gantz Blue and White party — which secured 57 — has reached the 61-seat majority seats needed to form a government, putting the Arab Joint List in a powerful position.

The 71st annual Emmys wrapped up just minutes before dispatch, and we’re a little bit offended that not one of the leading ladies from Game of Thrones landed the accolade for Supporting Actress in a Drama Series. We are, however, very pleased that Chernobyl snagged the Emmy for Outstanding Limited Series. Vulture has the full rundown of the winners here.

** Soundtrack for this morning’s issue: Wake me up when September ends.

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