Thndr Claps - Updates everywhere

A weekly wrap-up of the most prominent news in the U.S. & Egyptian markets.?

Egypt Claps

?? Updates on Egypt’s privatization program

CEO of Egypt’s sovereign fund Ayman Soliman said there’s no limit to the offered stakes in “Safi” and “Wataniya”, while other sources say “Egyptian Linear Alkyl Benzene Company (ELAB)” could offer a stake in the EGX soon.

Soliman added that investors interested in stakes in “Safi” and “Wataniya” aren’t limited to the region, with international interest being expressed.

Egypt’s sovereign fund’s willingness to potentially sell majority stakes (50% or more) could prove to be an accelerator to finalizing these deals according to Asharq.

?? New short selling mechanism could be introduced

A new central lending pool to facilitate short selling, which is the borrowing of a security in order to sell it & buy it back later for less, could be introduced in an effort to resuscitate the practice, according to FRA Chairman Dr. Mohamed Farid.

Currently, investors wishing to “short sell” a security must go through several parties to do so. The lending pool would allow investors to directly short sell the stock without going through these parties.

Although short selling allows investors to profit in the event a security’s price falls, it is a risky practice that can potentially result in a loss that exceeds 100% of the total investment, because there’s no limit to how high a security’s price can rise, & therefore no limit to the losses one can incur.

?? Egyptian inflation at 5? year-high

Inflation in Egyptian cities recorded rose 31.9% in February 2023 from the same month a year before, & significantly higher than the month before rate of 25.8%.

One financial analyst at Naeem Holding attributed the jump to the ongoing EGP devaluation, which in turn increased production costs & therefore overall prices, especially for food.

It’s unlikely that inflation has peaked, as a recent hike in fuel prices & increased demand during Ramadan could see prices inch up further.

Eyes will be on the Central Bank of Egypt to raise interest rates during its next meeting on March 30th 2023, with analysts expecting a 2% raise.

US Claps

?? FedEx boosts its forecast

FedEx (NYSE:FDX) has raised its profit forecast for fiscal 2023 despite weak market conditions.

The biggest driver behind the boosted forecast is the progress made by the company in its efforts to cut $3.7 billion in costs by closing down offices, reducing travel expenses, cutting jobs, and more.

Despite the improved forecast, weak market conditions may continue to impact revenue and operating profit in the current quarter negatively.

?? Snap & Meta shares jump on back of possible TikTok ban

Snap and Meta’s shares rose in after-hours trading after reports that the Biden administration is considering banning TikTok in the U.S. unless ByteDance divests its stake.

Both Snap and Meta face stiff competition from TikTok and have introduced their own short-form video products to compete. The White House supports a Senate bill that would allow a TikTok ban in the U.S. due to concerns about national security.

If a TikTok ban occurs, it could potentially benefit Snap and Meta by reducing competition for user attention. However, ByteDance has argued that divestment won’t solve national security issues, and the best way to address them is with transparent, U.S.-based protection of user data and systems.

?? CPI rises in line with expectations in February

The CPI increased by 0.4% in February compared to the?previous month , and 6% YoY, in line with analysts’ expectations.

Markets reacted positively to the CPI report, with the?Dow Jones,?NASDAQ, and?S&P 500?all up more than 1% in yesterday’s session.

Despite the current crisis in the?banking sector , the Fed is still expected to hike interest rates for March when they meet next week.