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Thursday, 13 February 2020

What we’re tracking on 13 February 2020

We have a passel of M&A news to accompany the top story of the day: The suggestion that the CBE may ease off on interest rate cuts this year to bolster the carry trade in a challenging global environment.

It’s the final day of the Egypt Petroleum Show, which made its mark on an already busy news cycle yesterday. The three-day event saw several agreements signed yesterday, including a contract between ECHEM and an English consortium to set up a USD 8.5 bn petrochem facility. We have the full story in this morning’s Speed Round, below.

Will Egypt, Ethiopia and Sudan finally seal a GERD agreement today? Officials are set to wrap up this evening another round of US-sponsored talks in Washington, DC. The three countries are ostensibly close to shaking hands on a timetable for filling and operating the dam, having committed in January to finally putting pen to paper at the end of this month.

Cabinet will likely discuss amendments to the Public Enterprises Act today, Public Enterprises Minister Hisham Tawfik said yesterday, according to Al Mal

Global VC group Kauffman Fellows kicks off its three-day visit to the capital today with an evening at the pyramids; the event will be co-hosted by EFG Hermes, Swvl, Marakez, and Vezeeta. Our near-neighbors Elves will host a BBQ tomorrow for the visitors and local startups, while AmCham will co-host a breakfast on Saturday.

The Central Bank of Egypt will meet to review interest rates a week from today.

The Oil Ministry is going to Canada: The ministry will hold a session at the Prospectors & Developers Association of Canada Convention on 1 March to discuss its legislative agenda to attract foreign companies to the Egyptian mining sector.

Big Global Story of the day #1- The number of coronavirus cases has surged after a change in reporting methodology in China saw Hubei province alone reporting 15k new cases yesterday. 242 people died yesterday alone.

Closer to home: Africa has no cases, the UAE now has eight, and London reported its first yesterday. You can track the latest on the rolling coverage blogs rolled out by the Financial Times and the New York Times.

Business groups are taking note: Mobile World Congress has been canceled. The event, which draws 100k people annually to Barcelona, is the global telecom industry’s premier annual event (Reuters | CNBC).

Egypt’s trade and supply chain could be hit hard if the coronavirus outbreak continues, local trade representatives tell Zawya. Agricultural goods — which account for some 20% of our exports to China — have been hit by cancelations and delays recently on concerns from Chinese importers about port closures, while tourism and business visits have been negatively impacted by the outbreak, representatives say.

Big Global Story of the day #2- Bernie Sanders won the Democratic Party’s New Hampshire presidential primary, narrowly beating Pete Buttigieg, and that has centrists in the Democratic party in a freakout. The vote highlights the generational divide and competing visions for America’s future within the party, Reuters argues. Amy Klobuchar landed in third place, which the newswire suggests split a vote that initially favored Buttigieg. Elizabeth Warren and Joe Biden trailed behind in fourth and fifth place.


Egypt is once again marking its territory as an emerging-market darling, this time in an editorial by the Financial Times, which argues that investors need to look outside the developed world for better returns in an era of potential deglobalization. Today’s EM investor can’t apply a one-size-fits-all approach, but needs to look for less obvious, undervalued markets (such as Egypt) in search of returns. This is in stark contrast to the dominant narrative of the last two decades, in which many EM investors saw exposure to China and India as sufficient given their fast-growing economies and populations.

There are still reasons to be optimistic about EMs, with financial conditions being supportive of investment. Monetary policy is just right, and low inflation in particular will offer strong prospects for poorer countries. Better still: EM valuations are lower than those in developed markets, so there are gems to be scooped up.

The FT’s message to our readers, whether you’re in business or government: “Countries [need] a specific story about why they, in particular, will do well out of the new world order.” Communications is everything in the scramble for global capital.

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