Deutsche Bank Holds Call On Egypt Chaos

Deutsche Bank is holding a call right now on Egypt, and we’re eavesdropping.

Mostly right now they’re going through headlines:

  • Several members of Muslim Brotherhood detained.
  • At least 1000 detained overall.
  • There are reports of security forces having disobeyed the regime in Alexandria.

Options for the government:

  • NPD convention in May might allow for Mubarak to announce that neither he nor his son will continue.
  • Government may try increasing the minimum wage.
  • Government may revise the existing subsidy scheme.
  • It’s not all that obvious that we could have permanent calm.

Now talking markets:

  • Currency markets not moved wildly. Very much so on equities.
  • The optimistic economic story derived from a few sources: 1) favourable demographics. 2) Egyptian economic can achieve high growth rates, with a relatively low current account deficit.
  • Economic weakness: Ugly deficit situations. Obviously high inflation.
  • This crisis may have a “silver lining” and lay the groundwork for advance and reforms.

Q&A time:

Q: If we do get regime change, what would the new government look like, and would existing business relationships last.

A: Difficult questions to answer. With respect to commercial transactions, analyst is highly confident that they would remain in place.

Q: When was the last comparable event?

A: Nothing like this in ages.

Q: What per cent of the population does this involve?

A: A lot.

Q: What role does the Muslim Brotherhood play in all this?

A: Not clear.

Q: What’s the status of the army?

A: No guidance. I think the army is very loyal to the current regime, especially in the senior ranks. The Chief of Staff is a longtime supporter of Mr. Mubarak.

And the call concludes.

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