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Thursday, 21 November 2019

What we’re tracking on 21 November 2019

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The question of the morning: Are we going to see a cabinet shuffle over the weekend? A change-up in cabinet that will see as many as 10 ministers exiting stage right is expected to be announced after President Abdel Fattah El Sisi returns from his trip to Berlin for the G20 Compact with Africa summit, well-connected MP Mostafa Bakry said, according to the local press. Bakry said the House of Representatives should be receiving the proposed changes to sign off before they are officially announced. House Speaker Ali Abdel Aal also said that parliament will likely hold an “extraordinary” meeting during its current recess, which many MPs suggest will be for the shuffle approval, according to Ahram Online. Masrawy, meanwhile, has a list of who’s allegedly in and out, citing an unnamed government official. Bakry said that Prime Minister Moustafa Madbouly will keep his job.

This is the latest in a drumbeat of rumors about a shuffle that we’ve noted this week, starting with discussions Sunday and Monday on the nation’s airwaves. And the rumblings come as the end-of-month deadline nears to make clear whether Tarek Amer is being reappointed or extended as governor of the Central Bank of Egypt or whether someone else will soon be signing Egypt’s banknotes.


The 2019 Investment for Africa Forum will take place this weekend at the new administrative capital. The conference will bring together African heads of state, investors, and global financial institutions to discuss investment initiatives on the continent.

The EBRD president will be in attendance on Saturday: President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti will be in town on Saturday to attend the conference, according to an emailed statement. Chakrabarti will hold talks with President Abdel Fattah El Sisi and Investment Minister Sahar Nasr during the day, and participate in a panel discussion.

Al Mashat in Beijing for Bloomberg New Economy Forum: Tourism Minister Rania Al Mashat will take part in three panel discussions and several meetings and interviews to talk tourism reform during her participation in the Bloomberg New Economy Forum, which kicks off today in Beijing, the cabinet said in a statement. Meetings with executives from China-based travel agency Ctrip are expected as the ministry gets ready to launch a campaign to promote Egypt as a destination through Chinese search engine Baidu, China’s WhatsApp equivalent Wechat, and Ctrip’s website.

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Talks between the US and China could reach a deadlock again due to disagreements over Beijing's demand that the US lift its tariffs on Chinese goods, while Washington won’t budge on its insistence that China make large purchases of American agricultural products, according to the Wall Street Journal. The Donald has threatened to ratchet up the tariffs even further if they fail to reach common ground for an agreement.

US markets turn red: The S&P 500 experienced its biggest loss in a month on the news, led by telecom firms and car manufacturers. Both the USD and oil rose. Bloomberg has more in its market wrap-up.

US investors are giddy over so-so earnings season: Businesses are getting more wiggle room from investors this year as investors cheer 3Q earnings that have fallen below expectations. Axios breaks down what this means.

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Yields on some of Lebanon’s USD bonds are now in “Venezuela territory,” rising to as much as 105% as a result of the ongoing political instability, according to Bloomberg. The yields rose 28 percentage points this week alone, and were as low as 13% prior to the protests that began five weeks ago. “With Lebanon viewed by many bond traders as a default waiting to happen, cash prices have become more important than yields as they factor in potential recovery rates. That’s inverted the government’s curve and distorted yields at the shorter end,” the news information service says.

Saudi financial regulators are monitoring credit flows to local investors after they relaxed lending limits to boost subscription for Aramco’s IPO, sources told Bloomberg. Riyal buyers are now able to borrow twice the amount to put towards Aramco shares, raising concerns that the private sector may be deprived of credit.

Saudi and Bahrain just completed their first blockchain transaction in a trade transaction between Saudi British Bank (SABB) and HSBC, Zawya reported. The blockchain-enabled process allowed the tracking and tracing of information as it moved between parties.

In other business miscellany:

  • Deutsche deploys robot army amid job cuts: Machine learning algorithms are being rolled out in Deutsche Bank as it cuts some 18k jobs over the next three years, Financial News reports.
  • US holds back on digital currency as China prepares to launch its digital yuan: The US is studying the idea of introducing a digital currency backed by the central bank but continues to hold back on actually developing one, Federal Reserve Chairman Jay Powell wrote in a letter to Congress this week. “While we are not currently developing a central bank digital currency, we have assessed and we continue to carefully analyze the costs and benefits of pursuing such an initiative in the US,” he wrote.
  • This might just become our new favorite unit of measurement: There are more “Davids” than there are women leading UK mutual funds: The UK has 108 men named David leading mutual funds, which is more than the total number of women occupying the same role, Bloomberg reports, citing data compiled by Morningstar. A total of 105 women hold the top leadership position in one of the UK’s 1,500 mutual funds, and account for a meager 17% of all people licensed to work in financial services.

Important things going on in the world:

  • Key impeachment witness points finger at Trump: The US ambassador to the EU Gordon Sondland has claimed that President Donald Trump tried to pressure the Ukrainian government into investigating Democratic politicians by holding up USD 400 mn in military aid. (The Associated Press)
  • Arab League to hold emergency summit on Israeli settlements: Arab League foreign ministers will gather for an emergency meeting on Monday to discuss the US position on Israeli settlements, which no longer considers them “inconsistent with international law.” (Reuters)
  • Israel might be heading into its third election since April: Benjamin Netanyahu’s main rival Benny Gantz has failed to assemble a government after four weeks of coalition talks, increasing the likelihood that the country will return to the polls for the third time since April (The Associated Press)

PSA- 500 Startups is launching the third edition of its Misk 500 Accelerator Program. The 14-week program will teach growth techniques and provide expertise to promising tech startups in the MENA region, along with seed-stage investment. You can find out more about the program here (pdf) and apply here.

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