What we’re tracking on 9 January 2019
Chances of a regional conflagration occurring in the first week-and-a-half of the new decade appeared to go down overnight as both sides took a breath. US President Donald Trump yesterday delivered a relatively conciliatory statement in response to Iran’s missile strikes. Although he opened declared that Iran will never have a nuclear weapon on his watch and announced “punishing” new sanctions on the Islamic Republic, The Donald called for diplomacy and an end to the conflict. “Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world … The United States is ready to embrace peace with all who seek it,” he said in a televised statement. The New York Times has more.
At least 176 people were killed yesterday after a Ukraine-bound Boeing 737 crashed shortly after taking off from Imam Khomeini International Airport in Tehran, CNBC says. Initial reports from Iranian media suggested that the Ukraine International Airlines flight suffered a technical malfunction. But conflicting and confusing accounts over the plane’s fate offered by Iran and Ukraine have shrouded the incident in uncertainty, and Iran’s refusal to hand the black box to Boeing isn’t doing much to ease the situation.
Some 136 of those on board were destined for Canada, where many were students and / or citizens and permanent residents returning after visiting family in Iran over the winter holiday, the Globe & Mail reports.
The EGP fell against the greenback for the first time in more than three weeks yesterday. The EGP-USD rate dropped slightly to EGP 16, having held steady at 15.99 for the previous 22 days.
Inflation figures for December are set to be released today. Annual urban inflation accelerated in November for the first time in six months as the favorable base effect began to wane.
Expect the inflation reading to play into the Central Bank of Egypt’s decision on key interest rates when its Monetary Policy Committee meets a week from today. The meeting was originally scheduled to take place on 26 December, but was postponed until a new CBE board and MPC are formed. We’re expecting the new committee to be announced in the coming days, after President Abdel Fattah El Sisi last week appointed the bank’s new board of directors. Economists we surveyed last month broadly expected the MPC to keep rates on hold during the meeting.
The House Economic Committee will begin discussing on Tuesday the new Banking and Central Bank Act that was approved by cabinet last October, the local press reports, citing unnamed parliament sources. Officials from the central bank will participate in discussions of the draft law with the committee. The act would, if passed, set aside the unpopular industry development tax and would introduce a number of licensing and regulation amendments.
It’s the second day of Chinese Foreign Minister Wang Yi’s three-day visit to Cairo today. Yi is in Egypt to follow up on recent agreements signed with China, he told Al Ahram in a long interview without going into further details. Egyptian and Chinese companies signed a number of financing, manufacturing, and communications agreements when President Abdel Fattah El Sisi attended the Belt and Road Forum in Beijing last April, including some USD 3 bn in Chinese financing for the new capital’s central business district. Yi hinted during the interview that major Chinese investments will continue to focus on the new capital and the Suez Canal.
Talks on the Grand Ethiopian Renaissance Dam continue in Addis Ababa today ahead of mediation-that-isn’t-mediation in Washington, DC, next week. The story is dominating headlines on Egypt in the international press, as we note in Egypt in the News this morning.
Ghosn is looking to the Lebanese legal system to get out of his mess: Former Nissan boss Carlos Ghosn is asking to be tried in Lebanon instead of Tokyo after fleeing from Japan in a big black box, claiming that Japan’s legal system is unjust and that he was victim of a plot to topple him, according to the Financial Times. Ghosn alleged in more than two-hour-long presser yesterday (watch on Youtube) that executives at Nissan wanted to prevent him from merging the Japanese car manufacturer and Renault. Ghosn’s Beirut-based lawyer said trying him in Lebanon would involve “either a handing over or co-operation” between the two countries’ justice ministries.
Goldman Sachs hopes more openness could drive up share price: NYSE-listed Goldman Sachs is planning to make more details in its quarterly reports available to the public as it looks to counter investor skepticism and build upward momentum for its share price, according to the Wall Street Journal.