Egyptian soldiers and riot police were locked in a tense standoff with protesters in Cairo’s Tahrir Square on Sunday that threatens to derail elections after the security forces failed to disperse thousands demonstrating against the country’s ruling military council, reports the FT. The dramatic flare-up of violence comes less than 10 days before the country is due to elect its first democratic parliament after the ousting of Hosni Mubarak as president. The poll is set to be watched closely across the world and is seen as a critical test of the hopes for a democratic transformation aroused by the Arab Spring. Read more
Odd story in the Guardian on Friday:
Under its acting chief, the American John Lipsky, the IMF has taken a more hardline stance. The fund warned the Germans in recent weeks that it would withhold urgently needed funds and trigger a Greek sovereign default unless Berlin stopped delaying and pledged firmly that it would come to Greece’s rescue… Read more
Zhou Enlai famously advised Henry Kissinger it was too early to conclude on the outcome of the French Revolution. Little wonder, then, that the economic contours of the new Egypt are still fuzzy two months after Hosni Mubarak was topppled.
Citigroup’s Egypt economics team argue in a report out Monday that while democracy should be a boon for the country in the long run, political recriminations and economic populism put it at risk of stagflation in the short run. Investors should be wary of the newly reopened EGX and be underweight Egypt in GEM portfolios. Read more
Bern has frozen SFr830m ($960m) of assets of former heads of state from north Africa’s since the start of popular uprisings earlier this year, the FT reports, citing Micheline Calmy-Rey, Switzerland’s foreign minister. Calmy-Rey’s spokesman told Swiss news wires that the biggest single source, amounting to some SFr410m, stemmed from Hosni Mubarak, his family and immediate circle. A further SFr360m was identified as stemming from the Gaddafi regime in Libya. A further SFr60m in frozen funds were from Tunisia’s ex-president Zein al-Abidine Ben Ali and his family and immediate circle. Genevalunch, citing the WSJ, says that the Qadaffi assets in Switzerland are far smaller than the $30bn frozen by the US. Read more
The Egyptian stock exchange has reopened for business on Wednesday morning but not without a hiccup or two.
Seconds after trading commenced the circuit breakers kicked in and the exchange was forced to suspend business. Read more
Tick tock, tick tock.
Egypt faces another problem. Read more
Most of the world’s focus is on Libya-related contagion spreading into other Middle Eastern countries and kingdoms.
But, suggests a report from Standard & Poor’s research arm on Tuesday, it may be time to start looking a little further afield. Read more
Every country in the Middle East and north Africa is vulnerable to contagion from the unrest that has hit countries such as Libya, Tunisia and Egypt, credit rating agency S&P warns in a new report, says the FT. The spread of protests from oil importers such as Tunisia, Egypt and Jordan to oil exporters such as Bahrain, Libya and Oman showed that oil wealth alone could not contain intense political pressures, S&P analysts said. The analysts also highlighted concerns about Iran’s threat to regional stability, in a report that followed ratings downgrades through the region. S&P cut its ratings on Tunisia, Egypt, Jordan, Bahrain and Libya this year citing heightened risks and placed all under review for further downgrades. Read more
For the commute home, or while marking your over/under on tomorrow’s payrolls number,
- Banks’ litigation losses in tabular form. Read more
In responding to the direct action of protestors, investors (indirectly) may never before have attached so much weight to democratic credentials, and we suspect there have been few such moments in history when a small number of institutional characteristics can explain so much variation in bond prices.
That’s in a new paper by frontier market investment shop Exotix (full paper in the usual place; hat tip Sid Verma at FT Tilt), which has applied “a model-based approach that focuses only on variables directly related to the underpinnings of unrest” and found that “democratic credentials have been a key determinant of relative frontier bond performance so far in 2011.” Read more
On a less than glorious day for MENA sovereign wealth funds…
FT Alphaville’s Cairo agent sends this newspaper clipping our way: Read more
Egypt’s main exchange was preparing to resume trading on Tuesday even as unrest in Libya and Oman continued to cause stocks to tumble in the region on Monday, Bloomberg reports. The Egyptian bourse has now been shut for almost a month due to the popular uprising which ousted President Hosni Mubarak. According to the FT, thousands of Omani youths confronted police in the industrial port of Sohar on Sunday after witnesses reported that two protesters had been killed in clashes with the security forces. In Libya, meanwhile, Muammer Gaddafi’s grip continued to weaken as protesters against his regime maintained control of a city west of Tripoli, fought off government troops in another city and consolidated a council set up in the east to give a political face to the revolution sweeping the oil-rich north African country. The FT reports that international journalists invited into the country were taken to Zawiya, 40km west of the capital Tripoli, only to find the centre of the town in rebel hands. Dubai’s DFM General index plunged 4.5 per cent on Monday. The index — an important regional benchmark — is now at its lowest intraday level since June 2004. Read more
It’s the perfect season to roll out what TheSource calls a “revolting index”. As the blog’s Alen Mattich remarks, investors — not just autocrats — are also spending “a lot more time these days looking over their shoulders”, amid the wave of rebellion and revolution sweeping North Africa and the Middle East.
The Economist came out with a “who’s next” index of the Middle East and North Africa in early February, concluding that the next leader to go could be Yemeni president Ali Abdullah Saleh. Indeed, although Muammer Gaddafi is looking very precarious right now, Saleh is neck-to-neck with the Libyan leader in a race towards the political precipice. In fact, on Sunday Saleh even borrowed the good Colonel’s words, vowing to fight “with every drop of blood” to stay in power. Read more
Remittances are a fascinating and oft neglected slither of global capital markets.
Flows are inherently difficult to measure but the World Bank estimates ‘developing’ countries received in excess of $300bn in 2009 and 2010 — around three times more than official aid flows. Read more
Two Iranian navy ships entered the eastern Mediterranean after passing through the Suez Canal on Tuesday, the first such voyage since 1979 and one that has raised sharp concerns in Israel, reports the FT. Egyptian officials told Reuters news agency that the two vessels – one frigate and one supply ship – had entered the Suez Canal at 5.45am. They entered the Mediterranean Sea in the late afternoon, according to several reports citing Egyptian authorities. Read more
In the first comments by a member of the Libyan regime since security forces fired on thousands of mourners in Benghazi, the oil-rich nation’s second city, Seif al-Islam Gaddafi, the influential younger son of Muammer Gaddafi, blamed the crisis on a foreign “plot against Libya” and warned that if the violence continued the country would descend into civil war, the FT says. Bloomberg reports that violence has flared in Yemen, Djibouti and Bahrain as governments have sought to crack down on calls for reform. According to the Wall Street Journal thousands of protesters also took to the streets in Morocco on Sunday to demand changes to the nation’s constitution. Read more
Ructions in Centamin Egypt shares at pixel time (via Reuters):
Oil and gas companies working in Egypt and elsewhere in the Middle East said they did not expect operations to be stopped by the ousting of Egyptian leader Hosni Mubarak at the weekend, reports the FT. But analysts warned that political volatility in the region could still lead to disruption to energy supplies. Egypt is not a big oil producer, with output of about 740,000 barrels per day, and has no net oil exports, but has boosted gas exports in recent years. Some Western companies including BP and BG Group of the UK, Eni of Italy and Apache of the US, have operations there. Bloomberg reports that Middle East shares gained on Sunday, sending Abu Dhabi’s stock index to the highest in a month, as Mubarak’s exit fanned optimism. Egypt’s stock exchange delayed its re-opening until Feb 16 to allow companies to disclose the effects of the protests on operations. The benchmark EGX 30 Index slid 16% in the week ended Jan 27. Read more
Egypt’s ruling army council said on Sunday night it would aim to hand power to a democratically elected government within six months, after almost three weeks of popular unrest ended 30 years of autocratic rule by President Hosni Mubarak, who ceded power at the weekend and took refuge in his residence at the Red Sea resort of Sharm el-Sheikh, reports Bloomberg. The Supreme Council of the Armed Forces on Sunday dissolved parliament, suspended the constitution and said it would rule until general elections take place. The council also formed a committee to introduce constitutional changes, it said on state television. In a news analysis, the FT examines the military’s leading role in the emerging new order, while a separate report charts the “evolution of an uprising”. Read more
In the name of God the merciful, the compassionate, citizens, during these very difficult circumstances Egypt is going through, President Hosni Mubarak has decided to step down from the office of president of the republic and has charged the high council of the armed forces to administer the affairs of the country. May God help everybody.
RTRS-PROTESTERS CELEBRATE IN CAIRO AFTER MUBARAK STEPS DOWN Read more
Egypt’s higher council of the armed forces was due to issue “an important statement in a short while”, the country’s state news agency reported on Friday, following the president’s refusal to resign, the FT says. Enraged by President Hosni Mubarak’s defiance, massive demonstrations are expected across Egyptian cities later, the FT reports. The meetings by the military high command appear to be pointing to a split between officers over Mr Mubarak’s fate, the NYT says. Crowds have begun massing outside the presidential palace and other locations, reports BBC News, which also has the full text of Mr Mubarak’s statement. Read more
Egypt’s President Hosni Mubarak gave a defiant speech to his nation on television on Thursday night, saying he would remain in office until the September election while pledging to delegate authority to his vice president Omar Suleiman until then, reports the FT. Protestors rejected his promises, although it was unclear what responsibilities he would pass on or when. In an editorial comment, the FT says that it is already clear that “his era – disfigured by stagnation and political degradation – is over”. The army looks to be easing Mubarak aside, it added, in a transition that could “change the face of the Arab world”. Meanwhile Bloomberg reports that Egyptian dollar bonds and stocks gained on Mubarak’s pledge while the Egyptian pound held steady against the dollar at E£5.88 . Read more
Mohamed El-Erian, the PIMCO chief executive and quite possibly the best known Egyptian in finance, has been in touch. He’s not impressed by Hosni Mubarak’s refusal to resign.
As he told FT Alphaville late on Thursday: Read more
Update: A snap from Reuters — CABINET SPOKESMAN TELLS REUTERS DECISION ABOUT EGYPT’S PRESIDENT STAYING OR LEAVING DUE IN HOURS
Breaking at pixel time — the Egyptian army appears to be levering the country’s president out of power: Read more
Egypt was hit by fresh strikes and protests on Wednesday as more than two weeks of demonstrations against Hosni Mubarak, the president, emboldened Egyptians to vent their frustrations, reports the FT. At least three people were reported killed during clashes between security forces and several thousand protesters in New Valley, a western province. It was believed to be first significant protest in that area and the first deadly use of force by security forces since Friday. Read more
Noted at pixel time — direct (and rather impressive) intervention by Egypt’s central bank in the Egyptian pound, just two days after banks reopened:
As the regime in Egypt seeks to enhance its credibility in the face of a popular uprising threatening its survival, it has turned against ministers and ruling party officials who were seen, until two weeks ago, as unshakeable pillars of the system, according to the FT. In what many see as a cynical move aimed at appeasing an angry public without making political concessions, the state prosecutor announced he is investigating for corruption four ministers and a former senior official of the ruling National Democratic party, most of whom have business backgrounds. NDTV has more on one of the men, Egyptian steel magnate Ahmed Ezz, or the man “Egypt loves to hate.” Read more
Egypt unveiled a 15% pay rise for government workers on Monday, as embattled president Hosni Mubarak tried to quell popular discontent and restore confidence in the economy, reports the FT. The Muslim Brotherhood on Monday said it was reconsidering its decision to join talks with Omar Suleiman, Egypt’s vice-president, as the banned opposition group and others complained that Mubarak’s regime had no intention of reform. However, Bloomberg reports that Suleiman’s tightening grip coincides with Egypt’s retreat from the brink of anarchy. Banks re-opened on Monday and the government completed most of a record treasury bill sale. Meanwhile, warns the NYT, the US is playing a “tricky hand” with its support for Suleiman. Read more
Egypt unveiled a 15 per cent pay rise for government workers on Monday, in a sign of the struggle President Hosni Mubarak’s regime faces as it tries to soothe popular discontent while restoring confidence in the economy, reports the FT. The Muslim Brotherhood on Monday said it was reconsidering its participation in talks with Omar Suleiman, Egypt’s vice-president, as the banned opposition group and others complained that the beleaguered regime was showing no intention to reform. Read more
Egypt will try to raise as much as E£15bn ($2.6bn) in a record sale of Treasury bills with bankers predicting yields will rise as foreign investors avoid the auction, reports Bloomberg, citing an interview with Hisham Ramez, deputy governor of the country’s central bank. Local banks have enough funds to buy all the debt, he said. A lack of international investor participation may mean higher bond yields and could further weaken the pound, which fell yesterday to the lowest level since January 2005. Read more