Tuesday, 28 March 2017

Retailers are bullish on Egypt

TL;DR

What We’re Tracking Today

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Central bank governor Tarek Amer made an appearance at a conference yesterday, his first since returning from Germany after his surgery, Al Mal reported. Amer said the banking sector is doing its best to serve the economy, but it cannot do everything on its own. He says that now, the central bank managed to clear around USD 5 bn in imported goods that had been held in ports and stressed that foreign reserves will continue to rise. Amer also noted that the business environment after the float of the EGP has improved — and that the banking sector is now stronger because of it and could handle shocks. He also said there are no concerns about Egypt’s ability to repay its debt obligations in 2018. Amer passed the buck to the government when he was asked about the timing of Banque du Caire and AAIB’s scheduled IPOs, saying the Ismail government holds the reins on the projects.

AmCham’s investment conference is today from 9am-4pm at the Cairo Marriott. Investment Minister Sahar Nasr will give a keynote, and there panels on investing in consumer sectors, private equity and real estate. Ahmed Kouchouk, deputy minister of finance, is also due to speak.

If you were hoping for the UK to come to its senses on the electronics ban soon,we have bad news for you: UK Home Secretary Amber Rudd did not rule out expanding the ban on laptops and iPads on flight cabins to include all inbound flights coming into the UK, and not just the six Middle Eastern countries including Egypt. “It’s difficult to say how far this will go, whether we may at some stage arrive at that place,” she told BBC One’s Andrew Marr Show on Sunday.

…They may take our laptops, but they’ll never take our sense of humorrr: France 24 dives into some rather funny trolling by regional airlines into Trump’s laptop ban. Royal Jordanian in particular is on fire.

Three more for you tech nerds out there this morning: Apple has released updates to iOS (for iPads and iPhones) and to macOS and watchOS. There’s not much in the way of ‘obvious’ new features, but the iOS update to iOS is pretty key to future-proof your device, it seems (it’s all about a new file system and takes a long time to run. Samsung will official unveil its Galaxy S8 tomorrow. Business Insider has a roundup of the leaks and expectations. And whether you’re a skeptic or a true believer, hard core nerds will have an opinion on Android co-founder Andy Rubin’s rumored first smart phone. It’s near-bezel-less.

“Fearless Girl” gets to stay on Wall Street, and the sculptor of the Bull is not happy at all. The statue, commissioned by fund manager State Street Global Advisors (press release) as part of its campaign to get more women on corporate boards and unveiled on International Women’s Day, was due to be removed on 2 April. The bozo who made the bull (a talented artist in his own right) was quite vexed yesterday at the prospect of Fearless Girl staying before New York City official said at a presser that she could stay for a year. We think the resident nine-year-old will agree when she wakes shortly.

What We’re Tracking This Week

Market sees CBE keeping rates on hold: The central bank’s Monetary Policy Committee (MPC) meets on Thursday to decide on the basic interest rates. 14 out of 15 economists surveyed by Reuters expects the bank will hold overnight deposit rates at 14.75% and overnight lending rates at 15.75%. The lone dissenter expects a hike. Pharos Holding also expects the MPC to keep the rates unchanged (pdf) as financial conditions in March “continue to depict tightness that is close to February’s level, another interest rate hike is not needed. On another hand, we reckon that an interest rate cut is not appropriate due to the aforementioned inflation level and outlook. Therefore, we believe that the CBE’s Monetary Policy Committee will hold interest rates unchanged in March.”

The Egyptian Private Equity Association’s seminar on “first-time SME equity fund managers in Egypt” will run tomorrow from 9:30am-1:30pm at the Cairo Marriott. RSVP to dalia.tadros@epea-eg.org. You can find additional details here.

Enterprise+: Last Night’s Talk Shows

The spat between the judiciary and House of Representatives over controversial amendments to the judicial code dominated the airwaves last night, after the House’s Legislative Committee signed off on the proposed changes, incurring the wrath of the judiciary.

Some background on what may be a politically charged issue in the weeks ahead: The amendments, among other things, would give the president the power to appoint the head of the Court of Cassation and the head of the Supreme Judicial Council, a power that currently rests with the judiciary. The Judges’ Club (effectively the union of Egypt’s judges) objected to the amendments and called for a meeting on Wednesday with members of the Supreme Judicial Council to discuss the matter. The Judges Club also intends to propose its own amendments to the code, according to Al Shorouk.

Judges to ask El Sisi to intervene: The Judges Club plan to meet with President Abdel Fattah El Sisi “as soon as possible” to discuss the amendments, which they perceived as “insulting” for stripping the judiciary from the right to elect its own leaders, Club head Mohamed Abdel Mohsen told Yahduth fi Masr’s Sherif Amer. The Club intends to propose its own amendments to the legislation, Abdel Mohsen confirmed.

Kol Youm’s Amr Adib also spoke to Abdel Mohsen, who said that the draft proposal is seen as a threat to the independence of the judiciary and risks creating a rift between state’s executive and judicial branches of government. (watch, runtime 8:00).

On Hona Al Asema, Lamees El Hadidi was also on the case. The host spoke to MP Alaa Abdel Moneim, who had objected to the amendments during the day’s vote “because the judiciary was not consulted first about them” and so they’re in violation of the constitution. Legislative Committee chair Mohamed Helmy El Sherif however told Lamees that the House is in touch with the Supreme Judicial Council (watch, runtime 5:08).

For the rest of her episode, Lamees hosted Pope Tawadros II, who revisited the plight of the Coptic citizens who have been displaced from their homes in North Sinai due to Islamist terror, calling it an attempt to “divide Egypt.” He went on to praise the state for its swift action to aid the families (watch, runtime 3:10).

Meanwhile on Masaa DMC, host Eman El Hossary spoke to Deputy Housing Minister Ahmed Adel Darwish on the issue of the Maspero Triangle, where around 4,500 families currently reside. Darwish told El Hossary that 15% of these families completed their paperwork for an anticipated move from the slum over the last three days, while others should be finalizing their forms over the coming three weeks (watch, runtime 6:59).

Speed Round

Speed Round is presented in association with

Retailers remain bullish on Egypt:Majid Al Futtaim (MAF) is doubling down on investments in Egypt, Tamim Elyan writes for Bloomberg. “I’m not worried about falling disposable income because for a number of years Egypt has had an official economy that was sustained by a gray one … The current situation is beginning to look positive compared to where things were,” MAF CEO Alain Bejjani tells Elyan. The under-served population creates a chance for exponential growth, Yasser Abdul Malak, CEO of Nestle’s Northeast Africa unit, adds. Bejjani suggests that the “official numbers” might not always match “reality;” he says “the Egyptian market is deep. We have seen a lot of conversion into the official economy and this has helped the market to sustain itself." Data from Fawaz Alhokair’s Egyptian unit, Marakez, supports that. The unit’s CEO (and friend of Enterprise), Ahmed Badrawi, told Elyan that “the first two months sales figures of our retailers are better than last year; this is positive because you could potentially expect sales to fall to the ground … This is a period of adjustment and people are adapting."

Forgive us for feeling it’s a bit anticlimactic, but: The House of Representatives voted in a plenary session yesterday to approve Egypt’s USD 12 bn bailout agreement with the International Monetary Fund, Ahram Gate reports. Our elected representatives grabbed what might be their last opportunity to bellyache about what they claim is the unconstitutionality of the government signing the agreement before getting House signoff, according to the newspaper. Finance Minister Amr El Garhy threw cold water on the claim, stressing that the agreement is part and parcel of the state’s economic reform plan, which the House had approved. House Speaker Ali Abdel Aal had said that the Honorable Members signing off on the agreement meant there was no need for a national referendum on the pact.

The Finance Ministry has settled on an exchange rate of EGP 16.00 per greenback and sees oil price at USD 55 / bbl for the FY2017-18 budget, Finance Minister Amr El Garhy told Youm7 after the cabinet economic group’s budget talks on Monday. The budget should head to the House of Representatives in the coming weeks, and the grandstanding has already begun, with Rep. Amr El Gohary describing the as-yet un-released budget as “disastrous,” Al Mal reports. A trenchant critique with deep insight we should all consider, clearly.

Meanwhile, the Supply Ministry is working with bakery owners to review what they’re paid to produce subsidized bread, with the new prices coming into effect in the upcoming fiscal year, Supply Minister Ali El Moselhy tells Al Borsa. The Federation of Egyptian Chambers of Commerce’s bakeries division is expected the figure to rise to EGP 176 per 100 kg of bread, up from EGP 165, according to head of the Federation of Egyptian Industries’ bakeries division Hassan El Mohamady. El Moselhy had said that state spending on bread subsidies will reach EGP 60 bn in the FY2017-18 state budget.

Electricity regulator to recommend hiking electricity prices 15-40%? A committee from the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) is ready to recommend new prices for electricity under the FY2017-18 budget, a source from the agency tells Al Shorouk. The committee is reportedly suggesting hiking tariffs for the lowest consumption tier by 15%, rather than 30%, and for top consumption tiers by 40%. Meanwhile, the newspaper quotes an unnamed Electricity Ministry source as saying the seven residential consumption tiers will see the following price hikes:

  • 0-50 kWh: 20%
  • 51-100 kWh: 25%
  • 101-200 kWh: 30%
  • 201-350 kWh: 35%
  • 351-650 kWh: 30%
  • 651-1000 kWh: 30%
  • Above 1,000 kWh (totally unsubsidized tier): 20%

Argentina, Egypt, charting comparable economic reform paths, but Egypt enjoys more international support: Argentina and Venezuela are two emerging markets that, in order to cope with the downturn in the commodity price cycle and the recession that followed, “are following two diametrically opposed macroeconomic management strategies,” according to a BNP Paribas report. “Argentina succeeded in clearing its external debt arrears while Venezuela is close to default,” the report notes. Youssef Beshay, senior banker at BNP Paribas, tells Enterprise that Argentina and Egypt are charting comparable economic paths. He says that while Argentina has much lower fiscal and current account deficits than Egypt, Argentina and Egypt have similar credit ratings and economic reform trajectories. They are also vulnerable to global commodity price shocks because of high export concentration on oil, in the case of Egypt, and soya beans in Argentina. But, “unlike Argentina, Egypt enjoys broad-based international support heralded by the IMF support programme as well as clean repayment track record because Egypt, unlike Argentina, never defaulted on any international debt in the past 30 years, which boosts investor confidence and facilitates access to international capital markets.” Beshay says the key internal indicators to watch are the m-o-m inflation figures, rather than the y-o-y ones. He says the Argentinian experience shows that inflation peaked at 46% y-o-y in 1H2016 after the peso as floated, but the m-o-m figures dropped from 4% in 1H2016 to 1.3% in 2H2016.

BP has begun trial operations at its North Alexandria offshore concession and is expected to bring the well to commercial production levels this year, Oil Minister Tarek El Molla said yesterday, Al Borsa reports. As we noted earlier this month, BP is expecting to produce 600 mcf/d of natural gas and will process it at Shell’s Burullus gas treatment plant. El Molla also had nice things to say about BP, particularly its work on the West Nile Delta concession, in an interview with Your Oil and Gas News on Monday.

El Molla’s statement came after President Abdel Fattah El Sisi met with the CEOs of BP, Rosneft, and Eni to discuss the progress on the companies’ projects in Egypt, Al Masry Al Youm reports. Rosneft’s CEO Igor Sechin told El Sisi that the Russian company expects to complete the acquisition of its 30% stake in the Zohr field in 2Q2017, according to a statement. El Sisi told the IOC heads that Egypt is looking to self-sufficiency in energy by 2018, and is committed “to providing a climate conducive to attract new investment,” according to an emailed statement.

The IFC announced providing the Arab African International Bank (AAIB) with a USD 100 mn loan to help it scale up lending to SMEs “and build its sustainable energy finance portfolio in response to increased energy bills for many companies and SMEs.” About half of the loan is earmarked for increasing SME loans. The other half will go towards “introducing credit lines that support energy efficiency, helping businesses that need to make capital investments to refurbish or renovate existing operations to reduce energy costs.” Mouayed Makhlouf, IFC Regional Director for MENA says “this loan will help a strong bank increase its reach to smaller businesses and encourage other financial institutions to follow suit, while also helping to boost energy efficiency in Egypt.” You can read the press release here (pdf).

Orascom Construction and Smart International Schools have allegedly withdrawn frombidding on a state tender to develop 200 schools under a public-private partnership framework, sources tell Al Borsa. The government is expected to announce next week which of 43 bidders will move forward, and the newspaper claims that the Emirates’ Al Madaen and Britain’s Carillion are among the winning companies. The final contracts for the project, which has an investment value of EGP 3 bn, are expected to be signed in May.

Is Air France-KLM having a change of heart about Egypt? While he did not directly say it, that’s the impression we got from Executive Vice President of Air France-KLM Group Patrick Alexandre, who sat down for an interview with Ahram Online. KLM had announced last year that it would suspend flights to Cairo due to FX issues and the suspension of profit repatriation prior to the EGP float. Beyond the platitudes of the airline’s support for Egypt, Alexandre noted the improvements in the repatriation of the company’s profits, saying, “We had a very positive discussion with the government trying to solve this issue. They have explained how they are trying to recover, to create a better, more efficient foreign currency regime.” Problems with the exchange rate and repatriation of profits appeared to be his one main concern. Beyond them, Alexandre noted the slow improvement in the prospects of the tourism industry, which coincided with a drop in tourism in France as a result of recent terrorist attacks.

Israel urged its citizens yesterday to leave Sinai immediately, Reuters says. Tel Avivintensified its warning against citizens traveling to Sinai “for fear of an imminent terror attack” by Daesh, according to Times of Israel. Eitan Ben-David, the head of Israel’s Counter-Terrorism Bureau, said that in light of the threat in Sinai, Israel “has considered the possibility of closing the Taba border with Egypt, but right now we have no intention of doing so.” Ben-David’s warnings point to a “concrete threat,” with the travel advisory warning against a “serious and current threat of terror attacks being carried out against tourists, notably Israelis, in the immediate future.” Sinai already bears the highest warning level from the Bureau.

Irish rock star Bob Geldof’s 8 Miles private equity fund announced it acquired a minority stake in UK-incorporated Blue Skies, a fresh-cut tropical fruit producer with operations in several African countries, according to Reuters. Blue Skies has “plans to expand its core fresh-cut fruit business, increase production capacity in South Africa, launch a fresh juice operation in Egypt and develop new product lines for some of its markets in Africa.” The company’s portfolio includes Ethiopian wine producer Awash Wines, Ethiopian feedlot operator Verde Beef Processing, Uganda’s Biyinzika Poultry and Nigerian biscuit-maker Beloxxi Industries, the newswire reports.

EARNINGS WATCH – GB Auto reported a net loss of EGP 865.7 mn in 2016, compared with a netprofit of EGP 233.1 mn in 2015, the company said in its earnings filing. The primarily non-cash loss came despite 24.6% y-o-y growth in revenues to EGP 15.3 bn as the company booked FX charges of some EGP 1.2 bn following the float of the EGP. GB Auto says it would have delivered a normalised net profit of EGP 345.9 mn in 2016, down from a comparable EGP 364.2 mn in 2015, if it were not for the FX losses charged directly to COGS and the increases in borrowing rates. “Nearly five months into a new economic reality in Egypt that sucked the oxygen out of the passenger car market, we are now seeing very clear signs that Egyptian consumers will remain enthusiastic buyers,” said GB Auto CEO Raouf Ghabbour.

EFG Hermes reported an almost eightfold increase in net profits in 2016 to reach EGP 1.6 bn, according to the company’s earnings filing, its best-ever profit performance. Revenues grew 279% during the year to EGP 4 bn. EFG Hermes also says it realized EGP 2.7 bn in foreign exchange gains in FY2016 following the EGP float. CEO Karim Awad says the company implemented “cost restructuring initiatives” in 4Q2016 and is investing in growth this year: “Three months into 2017, we continue to develop our merchant banking platform, have expanded our brokerage execution capabilities to include frontier Asian exchanges and are now in the final stages of opening our New York office.”

MOVES- Francesco Monaco succeeded Don Smith as CEO of Fiat Chrysler Automobiles Egypt (FCA) on 1 March, according to a company statement picked up by Al Mal. FCA is looking to expand its investments in Egypt, the newspaper reports.

Sources at Telecom Egypt (TE) denied that CEO Tamer Gadalla has resigned from his post, according to Al Mal.

Vodafone Egypt Chairman Ian Gray has been made an Officer of the Most Excellent Order of the British Empire (OBE) on Monday, The Peninsula reports. Gray has served as a Vodafone Egypt’s board for 17 years and is the CEO of Vodafone Qatar, in addition to his duties as the UK co-chair of the Egyptian British Business Council. We’re not much for English honors, but Ian is one of life’s good guys.

Survey on Ramadan spending habits: Food is expected to account for the lion’s share of Egyptians’ expenditures during the month of Ramadan at 55% of total spending for the month, followed by clothing at 15%, according to the results of an Ipsos poll announced at a press conference on Monday, Al Borsa reports. Spending on charity (13%), social outings (6%) and cigarettes (3%) are the next most significant categories. The results were released at an Ipsos conference yesterday on how inflation has affected consumer behavior ahead of Ramadan. Some advertising industry type (we’re being polite here) used the occasion to suggest we need an advertising industry regulator to make sure that no advert harmful to industry or society gets made, according to Al Mal.

That happens, we’re going to build an advertising agency and ask some of the meaner, funnier corporate lawyers we know to join us as partners.

Speaking of Ramadan: There are something around 58 days left until the start of the Holy Month.

Saudi Arabia issued a royal decree slashing taxes payable by Aramco to 50% from 85%, Bloomberg reports. Aramco currently pays a 20% royalty on its revenue and an 85% tax on income. “The royal decree falls in line with an earlier promise that Saudi Arabia will reduce the overall tax rate paid by its national oil company to make its 2018 initial public offering … more appealing to investors,” economic research director at the Gulf Research Center Foundation, John Sfakianakis. Saudi Arabia also set a range of income tax rates for producers of oil and hydrocarbons, according to Reuters.

The Macro Picture

“It is perhaps odd that despite gloomy news stories about the risks to growth the world economy is recovering,” Deloitte Chief Economist Ian Stewart wrote in his Monday Briefing. “This is a rare thing, a synchronised global recovery with activity strengthening in developed and emerging markets for the first time since 2010.” Stewart says leading growth indicators are flashing green globally: “Singaporean export growth, a barometer of global demand, has hit a two-year high. Chinese electricity consumption has rebounded. Arguably Europe’s most important economic indicator, Germany’s Ifo business confidence index, is near a three-year high. In the UK, optimism among manufacturing companies has reached its highest level since 1995. Surging North American rail freight volumes point to growing demand. Across the world the regular economic data are coming in on the strong side of expectations.” However, Stewart tempers this optimism by suggesting that the pace of recovery is unlikely to match pre-crisis growth rates due to decline in advances in productivity. He traces this decline to a reduction in investment in education, training, and capital spending.

Egypt in the News

On a pleasantly quiet news morning for Egypt in the international press, we note the following stories:

  • Islamist former detainee Mohamed Soltan is protesting (in his own way) a decision by Washington’s Metro to reject his advertising campaign on human rights in Egypt, The Washington Post reports. Soltan hired a truck to park in front of the Metro headquarters and display the rejected ads.
  • Egypt’s Mohamed El Shorbagy was unseated as the world’s top squash player by France’s Gregory Gaultier, who won the 2017 Allam British open, Eurosport reports.
  • Cross-dressing was a big draw for urbane Egyptians a century ago, On Barak writes in Haaretz. Barack says Umm Kulthum used to dress as a boy in her early performances.
  • This month, an Australian, major general Simon Stuart, took charge of the MFO forces stationed in Sinai, The Australian reported.
  • The Financial Times’ Siona Jenkins reviewed HA Hellyer’s book, A Revolution Undone, in which he says that from the 2011 protests “Egypt showed that it was not ready for those alternatives but that does not mean that Egyptians are forever doomed to be stuck with the choices they made.”
  • Leader of the Houthi movement in Yemen Abdel-Malik Al-Houthi praised Egypt for its “honorable” positions, and said that Saudi Arabia “abuses Cairo when it disobeys Riyadh,” Middle East Monitor reports, citing Anadolu Agency.

On Deadline

Is the Bahraini king’s visit to Egypt meant to pave the way for our rapprochement with Saudi? Mohamed Amin seems to think so, taking to the pages of Al Masry Al Youm to say that the timing of the visit — one day before the Arab League Summit kicks off in Jordan — suggests it is the latest in a string of efforts from GCC countries to reconcile Cairo and Riyadh. The spotlight at the summit today is certain to be focused on the long-awaited mini-summit bringing together President Abdel Fattah El Sisi and King Salman, and allowing for the resumption of “brotherly” relations.

Worth Watching

As promised, we give you the Rumble in the Parliament Jungle: Okay, so it’s no Mayweather vs. Pacquiao (which was equally disappointing), but it will have to do (watch, runtime: 1:52). As we noted yesterday, the scuffle (more like after school at the mall) was caused over a clause in the National Elections Act which mandates judicial supervision of the new national elections regulator. As cooler heads clearly could not prevail, the article was sent back to the House Legislative Committee, Ahram Gate reports. We apologize for the bad quality of the video, but House Speaker Ali Abdel Aal’s phobia of the media was behind this. As he was only but a toddler when the wheel was invented, he didn’t think someone would have a smartphone handy during the closed session.

Diplomacy + Foreign Trade

President Abdel Fattah held a closed-door meeting with Bahrain’s King Hamad bin Isa Al Khalifa in Cairo yesterday ahead of the Arab League Summit kicking off in Jordan on Wednesday, according to a presidency statement. The meeting centered largely on security issues.

Investment and International Cooperation Minister Sahar Nasr signed four agreements worth EUR 259 mn with the French Development Agency (AFD) yesterday, according to a press release backing projects in energy, wastewater and healthcare. In other France-related news, a signing ceremony for a EUR 100 mn agreement between the Investment and International Cooperation Ministry and AFD for the Alexandria tram development project, scheduled to take place yesterday, was postponed, Al Shorouk reports. It has yet to be rescheduled.

Meanwhile, Nasr is heading to Germany on Friday to complete negotiations for EUR 250 mn worth of budgetary support loans, according to Al Mal.

Finland wants to invest in renewable energy projects and possibly electrical equipment manufacturing in Egypt, Finland’s ambassador in Egypt Laura Kansikas-Debraise says, according to Al Mal. The comments were made during a meeting between Kansikas-Debraise and Electricity Minister Mohamed Shaker.

Egypt is attending the Nile Basin Initiative’s council of ministers meeting that kicked off yesterday in Uganda’s Entebbe according to Ahram Online. Egypt will likely unfreeze its membership in the initiative, after having suspended it for seven years, sources tell Al Shorouk.

Energy

PetroZenima to link wells to production platforms

PetroZenima is currently connecting drilled wells in its Gulf of Suez concession to production platforms, a source told Egypt Oil & Gas. There are eight wells drilled in the concession, two of which are already connected and producing a total of 1,300 bpd. Two more wells are being connected to production platforms with the remaining ones to follow “soon.” PetroZenima is also conducting seismic surveys on a new exploratory well near the Mozhel field with investments of USD 17 mn.

State will not reprice contracts under FiT program

The government still has no intention of repricing contracts signed under the feed-in tariff program, as many renewable energy companies have been urging, New and Renewable Energy Authority (NREA) chief Mousa Omran, tells Al Mal in an interview. NREA is planning projects worth USD 440 mn in FY2017-18 compared to USD 220 mn this year, he adds.

Health + Education

Batterjee to establish EGP 10 bn medical city in Alexandria

The Batterjee Holding Company will establish a new EGP 10 bn medical city complex in Alexandria that includes eight hospitals, Vice President Makarem Batterjee says, Ahram Gate reports. The announcement was made as International Cooperation Minister Sahar Nasr visited the Saudi German Hospital in Cairo, which is owned by the company.

Tourism

ARCO signs contract with AccorHotels to manage Fairmont hotel in Sun City

ARCO will have AccorHotels to manage Fairmont Pyramids Hotel and Residence in Sun City in Giza near the pyramids (not the mall in Heliopolis), Al Borsa reports. The opening is scheduled for 2022. The new Sun City project is set to include three hotels, a medical center, a school, two universities, an open museum, housing units, and malls, Al Masry Al Youm reports. We had noted last November ARCO is investing EGP 32 bn in several projects over the next five years.

Telecoms + ICT

ICT Minister meets Google Middle East MD

ICT Minister Yasser El Kady met with Google’s MENA Managing Director Lino Cattaruzzi yesterday to discuss the company’s potential investment opportunities in Egypt, Youm7 reports.

Automotive + Transportation

Electricity Ministry refuses to drop Cairo Metro debts

Electricity Ministry officials are refusing to drop debts owed by Cairo Metro, officials tell Al Mal. Despite the debts reaching EGP 230 mn by 2016’s end, the Ministry reiterated that it would not cut Cairo Metro’s power supplies off.

FAMCO to introduce IVECO heavy trucks to Egyptian market in early April

Al-Futtaim Group’s automotive subsidiary FAMCO will be introducing IVECO-branded heavy trucks to the Egyptian market in early April and should be announcing new investment and expansion plans in two weeks’ time, unnamed company officials tell Al Mal.

Banking + Finance

HDBK settles pre-float debts worth EGP 700 mn

The Housing and Development Bank has settled pre-float letters of credit worth EGP 700 mn under the terms of the settlement agreement that the Central Bank had reached with the Union of Egyptian Investors Association in February, bank President Fathy El Sebai said on Monday, according to Al Mal.

NBE looks for further funding through EBRD green investments facility

The National Bank of Egypt (NBE) is seeking new funding through the EUR 140 mn Green Economy Financing Facility launched by the European Bank for Reconstruction and Development, the French Development Agency, the European Investment Bank, and the EU. NBE has already secured a EUR 30 mn tranche of the facility, a senior source from the bank tells Amwal Al Ghad.

Other Business News of Note

IDSC to launch governorate competitiveness index to guide decisionmaking

Cabinet’s Information and Decision Support Center (IDSC) is finalizing a governorate competitiveness index that is expected to be launched across all governorates “within days,” IDSC head Hossam El Gamal tells Al Borsa. The index was inspired by the World Economic Forum’s Global Competitiveness Report.

House looking into Environment Ministry allocating land in Nabq protectorate to investors

The House Environment Committee is looking into the Environment Ministry’s decision to allocate and sell a 1.2 km strip of land in the Nabq protectorate to a foreign investor at EGP 5 per square meter, Al Borsa reports.

Legislation + Policy

Executive regulations for Industrial Permits Act to be issued in one month

The executive regulations for the newly-approved Industrial Permits Act will be released within a month, Trade Minister Tarek Kabil said on Monday, Al Borsa reports. The regulations are expected to outline the wait time and regulations for licenses in each type of industry. According to Kabil, around 70-80% of activities are classified as low-risk and will be issued licenses within a week of applying, while the other 20% (high-risk) will be issued licenses after 30 days at most.

House approves protest law amendments, vote postponed to a later session

The House of Representatives’ general assembly approved amendments to the protest law on Monday, AMAY reports, but postponed the vote to a later session when the full assembly is present.

National Security

South Korea’s vice defense minister to visit Egypt, attempts to isolate DPRK

South Korea’s Vice Defense Minister Hwang In-moo will visit Egypt and Angola this week to discuss strengthening defense cooperation with the countries, according to Korea Times. The visit is part of South Korea’s efforts to “isolate Pyongyang further in line with tougher sanctions imposed by the United Nations Security Council,” the paper suggests. “Hwang will meet with Egyptian Defense Minister Sedki Sobhy Tuesday and sign a memorandum of understanding on institutional strategy for defense cooperation which will include increasing high-level exchanges and expanding defense industry cooperation.”

UAE showing military preparedness through joint exercises with Egypt

Joint military exercises with Egypt are a prime example of the UAE’s preparedness to defend its homeland and interests, The National’s editorial board argues.

Egypt to receive 46 Ka-52 Alligators before the end of the year

Russian arms exporter Rostec has confirmed that it will deliver 46 Ka-52 Alligator attack helicopters to Egypt before the end of 2017, TASS reports.

On Your Way Out

The Prosecutor General has reopened an investigation into Zamalek chairman Mortada Mansour for his alleged role in the death of 20 Zamalek fans in a stampede in 2015. Mansour was acquitted last July, but a court had accepted a suit brought by families of the victims, King Fut reports.

By The Numbers

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EGP / USD CBE market average: Buy 18.0806 | Sell 18.1853
EGP / USD at CIB: Buy 18.10 | Sell 18.20
EGP / USD at NBE: Buy 18.00 | Sell 18.10

EGX30 (Monday): 12,970 (-1.1%)
Turnover: EGP 1.1 bn (144% above the 90-day average)
EGX 30 year-to-date: +5.1%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 1.1%. CIB, the index heaviest constituent ended 0.8% down. EGX30’s top performing constituents were: Arab Cotton Ginning up 3.2%, Egyptian Iron & Steel up 2.2%, and Credit Agricole up 0.6%. Yesterday’s worst performing stocks included Oriental Weavers down 4.2%, Amer Group down 3.1%, and Ezz Steel down 2.7%. The market turnover was EGP 1.1 billion, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP + 117.1 mn
Regional: Net Short | EGP – 38.8 mn
Domestic: Net Short | EGP – 78.3 mn

Retail: 71.4% of total trades | 69.9% of buyers | 72.9% of sellers
Institutions: 28.6% of total trades | 30.1% of buyers | 27.1% of sellers

Foreign: 17.9% of total | 23.4% of buyers | 12.4% of sellers
Regional: 6.0% of total | 4.2% of buyers | 7.8% of sellers
Domestic: 76.1% of total | 72.4% of buyers | 79.8% of sellers

WTI: USD 47.98 (+0.52%)
Brent: USD 50.96 (+0.39%)
Natural Gas (Nymex, futures prices) USD 3.04 MMBtu, (-0.52%, April 2017 contract)
Gold: USD 1,256.80 / troy ounce (-0.16%)TASI: 6,852.1 (-0.3%) (YTD: -5.0%)
ADX: 4,465.3 (0.0%) (YTD: -1.8%)
DFM: 3,454.4 (-0.4%) (YTD: -2.2%)
KSE Weighted Index: 421.4 (-0.2%) (YTD: +10.9%)
QE: 10,428.5 (+0.2%) (YTD: -0.1%)
MSM: 5,603.8 (-0.9%) (YTD: -3.1%)
BB: 1,382.71 (+0.3%) (YTD: +13.3%)

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Calendar

29 March (Wednesday): First Time SME Equity Fund Managers in Egypt Opportunities and Challenges seminar, Marriott Zamalek Hotel, Cairo.

29-30 March (Wednesday-Thursday): Cityscape Egypt Conference, Nile Ritz-Carlton, Cairo.

29-31 March (Wednesday-Friday): Balanced Development of Siwa Oasis International Tourism Conference, Siwa Oasis.

30 March (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

31 March – 03 April (Friday-Monday): Cityscape Egypt Exhibition, Cairo International Convention Center, Cairo. Register here.

03-06 April (Monday-Thursday): Agri & Foodex Africa, Khartoum International Fair Ground, Khartoum, Sudan.

04 April (Tuesday): Emirates NBD Egypt PMI reading for March announced. The report will be available here.

08-10 April (Saturday-Monday): Pharmaconex, Cairo International Convention Center, Cairo.

16 April (Sunday): Coptic Easter Sunday.

17 April (Monday): Sham El Nessim, national holiday.

20 April (Thursday): Closing date for the Egyptian Mineral Resources Authority bid round number 1 for 2017 for gold and associated minerals.

22-24 April (Wednesday-Friday): Food Africa, Cairo International Convention Center, Cairo.

24-25 April (Monday-Tuesday): Renaissance Capital’s Egypt Investor Conference, Cape Town, South Africa.

25 April (Tuesday): Sinai Liberation Day, national holiday.

25-26 April (Tuesday-Wednesday): MENA New Energy conference, Hyatt Regency, Dubai.

28 April – 08 May (Friday-Monday): IMF delegation visit to Egypt to assess economic reforms.

30 April – 03 May (Sunday-Wednesday): Cement & Concrete 2017, Riyadh International Convention & Exhibition Center, Saudi Arabia.

01 May (Monday): Labor Day, national holiday.

08-09 May (Monday-Tuesday): Third Egypt CSR Forum, Intercontinental Citystars Hotel, Cairo.

16 May (Tuesday): Official expiry date for the decision to suspend capital gains taxes on stock market transactions.

22-23 May (Monday-Tuesday): North Africa Mobile Network Optimisation Conference, Cairo.

27 May (Saturday): First day of Ramadan (TBC).

26-28 June (Monday-Wednesday): Eid Al-Fitr (TBC).

30 June (Friday): 30 June, national holiday.

23 July (Sunday): Revolution Day, national holiday.

02-05 September (Saturday-Tuesday): Eid Al-Adha, national holiday (TBC).

17-19 September (Sunday-Tuesday): Pipeline-Pipe-Sewer-Technology Conference & Exhibition, Intercontinental Citystars Hotel, Cairo.

20-23 September (Wednesday-Saturday): 2017 Automech Formula car expo, Cairo International Convention Center, Nasr City, Cairo.

22 September (Friday): Islamic New Year, national holiday (TBC).

06 October (Friday): Armed Forces Day, national holiday.

01 December (Friday): Prophet’s Birthday, national holiday.

08-10 December (Friday-Sunday): RiseUp Summit, Downtown Cairo.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594). Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2016 Enterprise Ventures LLC.