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Wednesday, 8 January 2020

What we’re tracking on 8 January 2020

…and we’re back. Happy New Year and Merry Christmas, everyone. We hope you enjoyed the past week as much as we did as we took our annual publication break from 1-7 January. We’re delighted to be back — and we’ve got a full issue for you today, so let’s get straight to it: There’s plenty of business news here at home to keep us all busy, but sentiment in the community is being shaped by the brewing conflict between the US and Iran.

The US-Iran show took a sharp turn overnight as Iran launched missiles at US military bases in our region. Iran fired more than a dozen missiles at two US bases in the early hours of Wednesday. The attack sent S&P futures down as much as 1.5% and the Japanese market nosedived 2.2% as investors fled to safe-haven assets. The story dominates front pages of all major global media outlets today as journalists openly fret about the idea of a wider regional war: Financial Times | Wall Street Journal | New York Times | Reuters | Bloomberg.

The Donald has tweeted that he will make a statement today, while Iran’s foreign minister said (also on Twitter) that Iran has “concluded” its response and does not “seek escalation or war,” according to the Times.

Adding to the tension: A Boeing 737 with 180 people on board has reportedly crashed in Iran shortly after take off, CNBC reports. Iran’s state news agency says the Ukrainian Arlines flight crashed due to “technical difficulties.” There were no details at dispatch time this morning about casualties.

Egypt, meanwhile, is grappling with Turkey’s decision to send forces into Libya, among them non-Turkish fighters from Syria. Journalists in our Twitter feeds suggest many of them are combat veterans offered higher pay and a chance at citizenship for enlisting.

Foreign Minister Sameh Shoukry is meeting with Egypt’s European allies to discuss the unfolding situation in Libya, sitting down at the table with his French, Italian, Greek and Cypriot counterparts, according to a Foreign Ministry statement. We have more in this morning’s Speed Round, below.

Whatever happens on the foreign policy front in the coming weeks, we’re going to feel a bit of a squeeze: Yields on Egyptian USD-denominated Eurobonds rose by as much as 649 bps amid tensions Egyptian-Turkish tension, according to the local press. The Eurobonds due in 2047 was hit hardest, with yields rising 8.28%. ING Markets has warned in a research note to clients that any escalation in regional tensions may sap investor appetite for Mideast and EM debt (and, naturally enough, equities).

UK tabloids can’t resist a chance to sound the alarm about Egypt: The UK’s Foreign Office changed its travel advice for 14 countries in the region, including Egypt, the UAE, Lebanon, Israel, Oman, Bahrain, Qatar and Saudi Arabia, telling visitors to remain vigilant, but stopping short of advising them against travel there. Tabloids, including Britain’s the Sun and the Daily Mail, naturally couldn’t resist posing the perennial “is Egypt safe to visit?” question, speculating that British tourists could be “soft” targets for terror groups sympathetic to Iran.


So, what’s setting the news agenda for the first days of 2020 here at home?

The House will review the Banking Act in two weeks’ time, sources told the local press. The Central Bank and Banking Act will go first to committee before it comes up for discussion by the House sitting in plenary session. The Madbouly cabinet had approved the 242-article final draft of the act in October.

MPs will likely vote on the Data Protection Act in plenary session this coming Sunday, House ICT Committee member Ahmed Badawy said. The bill would, among other things, regulate how businesses use personal information collected online and has already received committee-level approval, according to Badawy. You can check out our comprehensive breakdown for a refresher on the legislation and how it may affect you and your business.

It’s clutch time on GERD talks: Egypt, Sudan, and Ethiopia will meet again in Addis Ababa on Wednesday to resume talks on the Grand Ethiopian Renaissance Dam (GERD), according to Egypt Today, before heading back to Washington for a second round of mediation on 13 January. Sudan’s prime minister said in an interview with Al Ahram last week that Khartoum is backing Cairo in the talks, Ahram Online reports.

Chinese Foreign Minister Wang Yi and arrived in Cairo last night for a three-day visit as part of an African tour that will also include stops in Djibouti, Eritrea, Burundi, and Zimbabwe, according to Shorouk.

World Bank delegation coming to town: International Cooperation Minister Rania Al Mashat expects a high-level delegation from the World Bank to visit sometime this month, according to Al Mal. The visit will presumably pave the way for a non-financial agreement with the World Bank going forward.

War drums and … a plague of locusts? A desert locust outbreak moving north from Central Eastern Africa could be the worst in 25 years, according to Bloomberg, which notes that “a potentially threatening situation is developing along both sides of the Red Sea with locust numbers increasing on the coasts of Egypt, Sudan, Eritrea, Saudi Arabia and Yemen.” UN data suggests that a square-kilometer swarm of 40 mn locusts can eat the same amount of food as 35,000 people, 20 camels, and six elephants in one day. For more information, tune into Locust Watch.

Our favourite business story of 2020 so far, though, has to be the escape from Japan of Carlos Ghosn. The former Nissan and Renault boss’ flight has captured the imaginations of business scribes like nothing we’ve seen before. The Wall Street Journal has the inside story of how it appears to have gone down.

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