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Tuesday, 3 December 2019

What we’re tracking on 3 December 2019

Industry incentives announcement coming tomorrow, Amer says: Prime Minister Moustafa Madbouly will unveil tomorrow a package of measures designed to support the state’s development plans, Central Bank of Egypt Governor Tarek Amer said yesterday during the African Economic Conference in Sharm El Sheikh. He also said that supporting private-sector companies in the industrial sector will be one of the central bank’s top priorities going forward. Amer and Investment Minister Sahar Nasr yesterday inaugurated the three-day conference, which brings together 500 African youth representatives, business leaders, policymakers and media professionals.

Speaking of incentives: Exporters are combing through copies of executive regulations governing how the government will give out some EGP 6 bn in export subsidies this fiscal year. It is, as you would expect, a bit of a moving target (one industry wants the head of the export subsidy fund to make clear in the next few days), but the regulations contain a number of good ideas. We have chapter and verse in this morning’s Speed Round, below.

It’s the next to last day for retail investors to subscribe to Rameda Pharma’s IPO, the retail component of which was 3.3x oversubscribed at the end of the third day of subscription yesterday, Al Mal reports. The company’s shares will debut on the EGX under the ticker RMDA on 11 December — that’s one week from tomorrow.

It’s the third and penultimate day of Cairo ICT. Yesterday saw several agreements signed at the conference, including an MoU that will see Tamweely Microfinance’s financing services available through Egypt Post. Other agreements from yesterday include one on providing WiFi at bus stops in Smart Village between Orange Egypt and the Smart Villages Development and Management Company, and another MoU between the Information Technology Industry Development Agency and NEC.

A forum on the use of nuclear power also got underway yesterday: Madbouly yesterday inaugurated the three-day forum, which looks at how nuclear energy can be used for power generation and desalination. Jordan is looking to sign an agreement with Egypt on extracting and exploiting uranium for energy production and the peaceful use of nuclear energy, Jordan Atomic Energy Commission Chairman Khaled Toukan told the local press on the sidelines of the forum.

Committee of Fifteen Ministers of Finance (F15) takes place in Sharm on Friday: The Finance Ministry and the African Union Commission are holding two days’ of preparatory meetings ahead of Friday’s F15 meeting, which will see ministers discuss the financial regulations and the African Union’s budget.

Stuff you can go to this week:

News triggers to keep your eye on in the coming days:

  • The purchasing managers’ index for Egypt, Saudi Arabia and the UAE is out this morning at 6:15am CLT.
  • Foreign reserves figures for November will be released tomorrow.
  • Inflation figures for November are out next Tuesday, 10 December.

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Risky frontier-market debt is booming thanks to low interest rates in advanced economies: Investors are buying big into high-yielding frontier-market debt, indicating an increasing recklessness fueled by historically low interest rates in advanced economies and raising concerns about the debt load of developing countries, the FT says.

Meanwhile: Is the solution to fight fire with fire? Bloomberg notes the growing calls by finance chiefs for governments everywhere to ramp up deficit spending as a means to reverse the global slowdown — a problem caused, at least in part, by an economic system awash with debt.

Even if global growth does pick up next year, investors shouldn’t expect high returns, JPMorgan says. Bonds, currencies and commodities will not generate the kind of gains normally expected during a recovering economy, the US investment bank says, forecasting single-digit returns in investment-grade bonds — and most surprisingly — a 6% loss on commodities.

Bond ETFs aren’t doing too badly right now, though: In a sharp reversal of the norm, exchange traded funds linked to bond markets are proving more popular than their equity-linked equivalents as the costs of trading individual bonds increase, the Financial Times reports. In the first 10 months of the year, bond ETFs saw USD 191 bn of inflows, compared to less than USD 158 bn for stock ETFs, one London-based consultancy found.

Tax my tech? I’ll tax your wine … and your handbags. The Trump administration is threatening to impose 100% tariffs on French handbags, champagne and wine in retaliation for France’s tax on digital services, which the Financial Times says Washington believes “unfairly discriminates against American technology companies.” France has imposed a 3% levy on the revenues of digital companies that sell primarily online. See more in the Wall Street Journal and New York Times.

In global miscellany:

  • The Donald has declined to take part in an impeachment hearing on Wednesday at the House Judiciary Committee, although his lawyer has indicated he might be represented at future sessions. (Bloomberg)
  • Trump is attending a two-day NATO summit in London amid tensions in the military alliance. (Associated Press)
  • At least 180 people have been killed in Iran as the government has moved to “smother” the country’s largest bout of political unrest in 40 years. (New York Times)
  • Gulf monarchies are dialing down the rhetoric against Tehran, with indications coming from several quarters that direct communication is increasing and conciliatory gestures are being made. (Bloomberg)

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2020 Enterprise Ventures LLC.