Banking sector term limits coming back?

Rumors popped out yesterday that the amendments to the Central Bank and Banking sector acts could see the return of nine-year term limits for banking sector managing directors. The amendments to the acts were discussed quite heavily yesterday, with the government having to urge calm (we have more in the Speed Round). At this point, we would like to remind readers that none of what is claimed in the local press has been substantiated or confirmed.

We were reminded once again yesterday that agreement between the government and business associations to give private-sector employees a 10% hardship raise (set at a minimum EGP 165 and maximum EGP 330) is a non-binding one. This time by Federation of Egyptian Chambers of Commerce head Ahmed El Wakil who said that companies have already issued raises this year and should not feel obliged to do so again, according to AMAY. His comments probably come to reassure as the members of that esteemed body that is the House of Representatives suggested that the raise might be mandatory.

It is confirmed — laptops on planes to New York are allowed: We have the closest thing to a confirmation from the US Department of Homeland Security (DHS) that passengers on board flights from Cairo to New York can carry laptops. A DHS update from earlier in the week stated that only King Khalid International Airport in Saudi Arabia has yet to meet security requirements. This comes as a UN Counter-Terrorism Committee delegation inspected security measures at Cairo Airport’s Terminal 2 yesterday, an unnamed airport security official tells Ahram Gate.

For all you football buffs out there, former Brazilian star Roberto Carlos has landed in Cairo to promote tourism and play in a charity game, Ahram Online reports.

We’re heading into a three-day weekend with Sunday off to commemorate Revolution Day.

House Health Committee to meet in August to discuss med price increases: The House of Representatives’ Health Committee plans on convening next month to discuss whether or not med prices will be moved a second time this year, sources tell Al Borsa. The Health Ministry had promised in January — when it issued the first price increase — to consider a second hike in med prices in August, according to pharma companies, who said they were planning to lobby for their demands. Health Minister Ahmed Rady had said earlier this month though that med prices will not be rising again this year.

Nothing to see here, folks, as our talk shows coverage is back on hiatus.

Proposed amendments to the CBE and banking acts could reinstate term limits for bank MDs: Amendments to the CBE Act and the Banking Law will enshrine into law the CBE’s decree limiting the terms of banking sector managing directors to nine years which was issued in March of last year, according to statements attributed to an official reportedly involved in drafting the bill by Al Borsa. The source said that the term limits decree had been scrapped by court order as it had no legal basis with which to stand, something the new draft bill will seek to rectify. The Administrative Court ruled back in June of last year that the CBE Governor’s decision to limit terms violates the rights of bank executives to employment and also refused the retroactive application of the decision. The ruling followed a lawsuit filed by banking executives to scrap the highly unpopular decree, which was met by an uproar from the sector when it was first issued.

Leaked content from the proposed amendments are not final, a source told Al Masry Al Youm. The source said the proposed amendments have been passed to the Federation of Egyptian Banks and to legal experts to get their opinions.

The source also denied claims by Hona Al Asema host Lamees El Hadidi on Tuesday that the CBE governor is looking to expand his position’s authority and overreach into the jurisdictions of the president, prime minister, or bank shareholders. Amending the banking laws aims to accommodate developments in banking and finance and ensure adequate corporate governance measures are in place, the source explained.

“Don’t judge the law by its first draft,” Prime Minister Sherif Ismail urged during a Wednesday press conference, where he advised calm, especially since the cabinet has yet to receive the legislation for review, Al Shorouk says.

Misr Hotels Company is freezing expansion plans until the CBE decreases interest rates and inflation cools, according to chairman Amr Attia, Al Borsa reports. “As long as interest rates are at their current levels, we will not enter new investments,” Attia says. The company allocated EGP 183 mn in investments this fiscal year, including EGP 113 mn in debt services, for developments at Dahab Resort and Nile Ritz-Carlton. Construction work is set to start at Dahab resort’s extension before year-end, according to Attia. On tourism, he says occupancy rates at the Nile Ritz-Carlton increased to 75% last year, with Gulf nationals comprising 55% of hotel residents. Separately, Attia said the company is not intending on increasing prices.

IPO WATCH- The Egyptian Financial Supervisory Authority (EFSA) signed off yesterday on DBK Pharma’s fair value assessment of EGP 3.1 per share ahead of the company’s planned initial public offering of 35% of its shares, sources close to the matter tell Al Borsa. The report was prepared by financial consultancy firm FinCorp. We had last noted in May that DBK Pharma’s second attempt to list on the EGX had been running into roadblocks. DBK’s first attempt to IPO in 2015 had also failed when the company was unable to raise enough to cover its offering.

EARNINGS WATCH- CIB delivered another record top- and bottom-line performance during the first half of the year as it released its earnings late last night. The lender delivered 29% revenue growth to EGP 6.88 bn, while its bottom line grew 29% over the same period last year to EGP 3.56 bn. The bank’s management team noted in a statement that despite the ambiguity with regards to the CBE corridor rate movement decisions, the bank grew its loan portfolio, despite the backdrop of a shortage in local currency liquidity and subdued growth in lending. “ Bank’s balance sheet has become more lenient to accommodate any up- or down-moves in both interest rates and currency exchange rates,” CIB said. Download CIB’s full earnings release here (pdf).

In other CIB news, the bank’s shareholders approved increases to its issued and paid-up capital to EGP 14.52 bn from EGP 11.62 bn through bonus shares issuance, according to a bourse disclosure. Shareholders will be issued an extra share for every four shares they hold. The capital increase will be financed from CIB’s general reserves.

MOVES- Mohsen Adel was reportedly appointed vice chairman of the EGX, sources tell Reuters in reports that were also picked up by CNBC Arabia. If confirmed, Adel would assume the role for four years, after having served as EGX board member.

… Yet to be filled is the top job. The cabinet has not yet picked an EGX head and current Chairman Mohamed Omran’s term, along with Egyptian Financial Supervisory Authority (EFSA) boss Sherif Samy’s, expires on 6 August.

A USD 10.5 bn petrochemicals complex is being planned in Suez, writes Al Masry Al Youm. The governor of Suez met Wednesday with a delegation from an unnamed petrochemical company to discuss plans for establishing the complex. The plan aims to make Suez a petrochemical production hub in the region meeting domestic demand and exporting to foreign markets. Work on the complex is expected to start in 2018. Officials from the World Bank and the European Development Bank also attended the meeting.

The government had announced plans earlier this week to establish a USD 4 bn petrochemicals plant, according to Oil Minister Tarek El Molla. He had met with Toyota, which will be conducting feasibility studies over the next 28 weeks, AMAY reported.

The Investment and International Cooperation Ministry launched an online platform for investors to set up and register their companies through the General Authority for Investment (GAI)’s website, Minister Sahar Nasr announced. The ministry also launched a hotline (16035) to answer investors’ questions regarding the new process. Company establishment and registration procedures can then be completed at the investors services center, through accredited offices by the center, or through the standard procedures at the ministry, Nasr added.

The law allowing for the repossession of illegally occupied land seized by the government will come into effect next week, Prime Minister Sherif Ismail announced during a press conference yesterday. The legislation will set the legal terms and measures for the owners to buy back land seized under the state’s campaign. Violating the new law — which was already approved by the House of Representatives — could result in permanent land seizure, the Prime Minister warned, adding that the state will continue to clear unlicensed developments, as it has been doing for the last several months under President Abdel Fattah El Sisi’s orders.

Separately, Egypt plans to retain the same levels of international funding in FY2017-18 as the year before, the Prime Minister added.

Egypt’s agricultural exports increased by 12.1% year-on-year in 1H2017 to 3.5 mn tonnes, up from 3.1 mn tonnes last year, Agriculture Ministry spokesperson Hamdi Abdel Dayem said on Wednesday, according to Reuters. “Exports increased in citrus, potatoes, grapes, and strawberries, and fell only for onions,” he said, explaining that the EGP floatation last November is one of the main drivers of this growth.

President appoints head of Council of State to the chagrin of judiciary: President Abdel Fattah El Sisi issued a decree appointing Ahmed Aboul Azm as the head of Maglis Al Dawla (Council of State), according to Ahram Gate. El Sisi is using the powers granted to him through the controversial amendments of the Judicial Authorities Act that was signed into law in April. Maglis Al Dawla had attempted in May to protest the the amendments by presenting just one nominee, Yehia El Dakroury, to become its head, instead of presenting El Sisi a list of three nominees to choose from. El Sisi went against the judges and used a right enshrined by the amendments to pick a chief judge from one of the seven longest-serving deputies to the outgoing head of Maglis Al Dawla.

El Dakroury issued a statement thanking judges for nominating him, saying the act was proof of their independence, Al Masry Al Youm reports. Earlier, judicial sources told Al Shorouk that El Dakroury and other Maglis Al Dawla judges are reportedly looking to take legal action against the decree and plan to petition the Supreme Administrative Court in a bid to repeal Aboul Azm’s appointment.

The US State Department issued a travel warning for Americans traveling to Egypt, urging them to “consider the risks of travel … due to threats from terrorist and violent political opposition groups.” The State Department has prohibited diplomatic personnel from visiting the Western Desert and the Sinai Peninsula, with the exception of Sharm El Sheikh, as long as they travel by air. The warning also prohibits its diplomats from visiting religious sites outside greater Cairo, noting that “terrorists continue to threaten Egypt’s religious minorities and have attacked sites and people associated with the Egyptian Coptic Church.” The warning replaces a previous one from December 2016.

Russia still considers Egypt to be “unsafe” for Russian tourists, an unnamed source told Sputnik. It appears that Russia moved from pointing to airport security as the hurdle to restore flights to Egypt and is now, instead, pointing to its dissatisfaction with Egypt’s “unwillingness to duly investigate” the 2015 plane crash in Sinai. “They are determined to investigate the crash forever and punish no one. We are not satisfied with this position … The Egyptians do not want to link the investigation of the crash with the resumption of tourist flights from Russia… At present the sides do not have an understanding what happened to the plane, how the explosive device got on board, who brought it there. There are also no identified suspects and their accomplices from the airport staff,” the source explains.

… Still, cooperation with Russia in other areas continues to move ahead. The launch of Egypt’s satellite Egyptsat-A is scheduled for 2019, Deputy Chief Executive Officer of Russia’s RSC Energia corporation Alexander Derechin said, TASS reports. Egyptsat-A is designed to replace the EgyptSat-2 satellite, with which communication was lost in April 2015. TASS says Egyptsat-A “will have an improved optical-electronic system and onboard control package, a high speed onboard radio link and enhanced solar batteries.”

Have the demands submitted to Qatar been softened to “six principles”? The countries boycotting Qatar have set a list of “six principles” Qatar must abide by,Taimur Khan writes for The National. Diplomats from Egypt, Saudi Arabia, UAE, and Bahrain confirmed at the United Nations in New York that the six less specific principles, which do not have a deadline, had officially replaced the original demands, according to Khan. The new principles do not require the shutting down of Al Jazeera, but are set to serve as a framework for future talks to end the crisis. This comes amid mediation efforts by Kuwait, which are supported by the United States, United Nations, and European countries.

Egypt’s Foreign Ministry, however, rejects that the “Arab Quartet” had downgraded or dropped their original list of 13 demands, which includes shuttering Al Jazeera, according to statements by Foreign Ministry spokesman Ahmed Abu Zeid said yesterday picked up by Al Shorouk.

Meanwhile, the US and the UK have reportedly come up with a proposal to resolve the regional crisis by “laying the grounds for direct negotiations based on an accord that resolved a previous dispute between the Gulf nations, as well as counterterrorism measures,” Bloomberg reports. The roadmap is based on two agreements Qatar and the GCC countries signed in 2013 and 2014 which “included pledges ‘not to interfere in the internal affairs’ of other Gulf Cooperation Council members and not to harbor people engaged in activities damaging to those countries.”

Egypt’s Aly El Shafei was awarded the Grand Prize of the sixth Innovation Prize for Africa, according to Ventures Africa. El Shafei walked away with USD 100k for his development of Smart Electro-Mechanical Actuator Journal Integrated Bearing (SEMAJIB). SEMAJIB a “smart bearing that significantly improves turbine performance in single line combined cycle plants as well as conventional generator technology.” The device has been patented in the US since 2010, with another patent pending, and “is designed to be used to support energy generating turbines more efficiently and cost effectively in Africa. SEMAJIB is an innovation that does not currently exist in the West, and already Siemens’ has indicated interest in the device.”

8 civilians were killed dead and 4 wounded in Al Arish during in an attack on Wednesday, says Al Bawaba. A policeman was also killed in a separate attack where two soldiers were injured.

Freediving Mecca: Freedive world champion, record holder and instructor Alexey Molchanov showing Dahab some love on with an Instagram post of divers descending into the depth of the infamous Blue Hole. Dahab has long been one of the freediving capitals of the world and every year thousands of people come train in its ideal conditions. For those keeping track Dahab is also where our very own Ahmed Gabr broke the SCUBA world record a few years ago.

A report on death of 22 Egyptian workers while trying to cross the border into Libya for the promise of work by Reuterswas the most widely picked up story on Egypt in the foreign press this morning. “Many of them came from villages in Minya…where residents say poverty and unemployment have been driving villagers to put their lives at risk to find work of any kind, even if it means contending with the lawless chaos of Libya’s civil war,” the report says. The Egyptian Foreign Ministry had said earlier in the month that it was working on recovering and retrieving the bodies.

Foreign publications also took note of President Abdel Fattah El Sisi’s appointment of Ahmed Aboul Azm as the head of Maglis Al Dawla (Council of State), against the wishes of some of the nation’s top judges who had nominated Yehia El Dakroury for the job. The move risks a backlash from the judiciary says, the Associated Press, which notes that El Dakroury was the judge who issued the ruling revoking the Tiran and Sanafir island handover agreement with Saudi Arabia in 2016. Reuters also has the story.

It’s not just the judiciary that’s at odds with El Sisi, as a number of the president early supporters are now also criticizing his rule and method, Reuters’ Amina Ismail says, explaining that issues such as the handover of Tiran and Sanafir to Saudi and restriction of freedoms, are the main drivers behind the new stance ahead of 2018’s presidential elections.

Is the EU sweeping Egypt’s human rights issues under the rug to protect its own regional interests? Resuming annual “high-level” meetings with Egyptian Foreign Minister Sameh Shoukry in Brussels next week could mean that “the EU prioritizes security, migration and trade at the expense of human rights,” says Amnesty International in a new piece. Shoukry will be heading to Brussels on 25 July for the first of such meetings since the 2011 uprising. “With concerns over regional security and migration on the rise there are fears that EU member states are more willing to turn a blind eye to grave human rights violations in the country.”

Interviews with ambassadors in office are usually bland and void of any meaningful insights because of diplomatic considerations, which is why we found Pakistan Observer’s front-page interview with Egypt’s ambassador Sherif Kamal Eldin a bit odd. Asked about the “shared vision of the leadership of the two countries” Kamal Eldin said: “We take pride that the two countries are considered to be two of the most powerful armies in the Muslim Umma, and we both opt to improve the wellbeing of Muslims around the world.”

Thomas Cook had to urgently evacuate a plane that caught fire on Wednesday, according to a report in The Sun. The incident was thankfully a minor one, leaving no casualties or injuries, except for a few slight injuries sustained during the ensuing panic of evacuation. The story is being widely noted in the foreign press.

Also making headlines this morning:

• Canada needs to amend its laws to better protect its dual nationals, says former jailed Al Jazeera correspondent, Egyptian-Canadian Mohamed Fahmy in a piece for The Star.
• Egypt is helping China crackdown on the Uighur community, transferring detained students “to a massive prison complex in Cairo on Wednesday,” the Associated Press says.

President Abdel Fattah El Sisi’s choice of head for the Council of State is likely rooted in political considerations, Mohamed Amin writes for Al Masry Al Youm. Judge Yehia Dakroury, the council’s sole nominee for the position due to seniority, is likely paying the price for being the judge to annul the Tiran and Sanafir handover agreement, Amin says. El Sisi also likely rejected him because the Council refused to play by the rules and adhere to the contentious Judicial Authorities Act. The columnist gently hints that El Sisi was sending a message by appointing the fourth most senior judge to head the council, thereby skipping the top three judges whom the council would have likely nominated if it had played ball with the Act.

The economic woes of grilled corn seller: Standing on a street in Alexandria, the main character in the short film “Grilled Corn” tries to make a living selling corn to passersby, only to be hit with hard realities and difficult customers who seem oblivious to the young man’s struggle. Released in 2011, the film tackles the timeless issue of economic hardship (watch, runtime 4:52).

Egypt urged Israel to put a stop to the violence around Jerusalem’s Al Aqsa mosque, warning the country about the repercussions of a “security escalation,” the Egyptian Foreign Affairs Ministry said on Wednesday. Israel had closed the mosque on Friday after two Israeli policemen were killed by three armed men in the mosque’s vicinity, according to Reuters. Israeli forces reopened the mosque on Sunday but installed inspection and surveillance equipment at its entrances, prompting Palestinians to pray outside in protest.

This comes as Egypt is reportedly mediating prisoner exchange talks between Israel and Hamas, the Times of Israel reports. Israel “offered to release an undisclosed number of female prisoners, minors, and Hamas MPs” in exchange for three Israelis currently being held by Hamas, but the Palestinian group has reportedly rejected the offer.

Foreign Minister Sameh Shoukry discussed economic cooperation and regional matters with Iraqi President Fuad Masum in Baghdad, according to a ministry statement. Both officials agreed that the joint Egyptian-Iraqi Supreme Council will convene for the first time in Baghdad in August. Shoukry also talked counter terrorism with Iraqi Prime Minister Haidar Al Abadi, and told him during their meeting that Egypt is ready to support Iraq while it regains stability after Mosul’s liberation from the Daeshbags.

The Electricity Ministry signed agreements with contractors to begin civil engineering works at the West Cairo and Walidiya power station projects, Al Masry Al Youm reported. Hassan Allam Construction and Consolidated Contractors Company will provide the engineering works for the West Cairo station and Orascom Construction will work on the Walidiya project in Assiut. Both stations are set to use natural gas as their primary input and fuel oil as back-up. The contract value for both projects is set at a total of EGP 3.21 bn plus an additional 10% extra held in case any spare parts of extra work are needed.

Oil Minister Tarek El Molla discussed a potential partnership between Fluor Engineering and Enppi and Petrojet with Fluor’s EAME Region Energy and Chemicals President Al Collins on Wednesday, , Al Ahram reported. El Molla also talked cooperation and investments in the sector with Australian Ambassador Neil Hawkins and received an invitation to attend the International Conference on Minerals and Resources in Melbourne in the fall.

The Ismail government will not be implementing further increases to the prices of local cotton set by the Agriculture Ministry, Al Shorouk reports. An agreement between the manpower and agriculture ministries will see the government purchase the entire 1.5 mn qintars harvested during season if global cotton prices drop and pay more for its local cotton purchases if global prices rise. Meanwhile, the trade and agriculture ministries signed a EUR 1.5 mn cooperation agreement with the UN Industrial Development Organization (UNIDO) and the Italian Agency for Development and Cooperation to increase the added value of Egyptian cotton and improve cotton farmers’ productivity over a two-year timespan, Ahram Gate reports.

The Supply Ministry denied yesterday that it is raising the prices of any subsidized goods next month, Al Masry Al Youm reports. Each 1 kg bag of sugar is sold for EGP 10, while an 800 gm bottle of oil is priced at EGP 14, and one bag of rice at EGP 6.50. Subsidy card holders can spend their allotted EGP 50 a month on any of these items from government retail outlets.

Polaris International Industrial Parks and Construction Products Holding Company (CPC) will both be bidding on industrial park projects in Upper Egypt, according to Al Borsa. The contracts are for the management and development of three ready-made industrial parks that are part of an Industrial Development Authority initiative. Conditions for the tender should be set by Monday and companies will have two weeks to submit their offers.

Pharmaplast began work on the EGP 40 mn first phase of a new production facility in the Alexandria public free zone, Al Borsa said on Wednesday. The new plant will manufacture meds and equipment for the treatments of wounds and burns, according to CEO Mamdouh Attiya. The project will come online in mid-2018 and expects to make around EGP 100 mn a year. Pharmaplast has more investment plans in the pipeline.

Red Sea resort bookings were not affected by recent killings in Hurghada, Egyptian Travel Agencies Association VP Moudy Al Shaer tells Al Masry Al Youm. There were no significant cancellations either, he adds, noting that Hurghada’s occupancy rate currently stands at a 75% average. Separately, German tour operator FTI announced that the Hurghada attack will not be affecting its plans to increase traffic to Egypt, according to Al Borsa. The company will be sending 102 weekly flights to Hurghada starting November, and will launch 24 additional flights to Marsa Alam, 10 to Sharm El Sheikh, and 6 to Luxor. Belarus’ Vitebsk airport will also be running a charter flight program to Hurghada between 21 September and 9 January, the Belarus Telegraph Agency reports.

The Transport Ministry is looking to cut the execution period for the electric train linking 10th of Ramadan to the New Administrative Capital down to 24 from 30 months, sources tell Al Masry Al Youm.The ministry is currently in talks with the consortium handling the project, which is comprised of Petrojet, Arab Contractors, and Orascom Construction. A new pricing structure is also being discussed. Transport Minister Hisham Arafat also wants to add two other companies to the group to quicken the pace of civil engineering works and see them complete in 12 months’ time, allowing Chinese partners to then begin implementing electrical works. President Abdel Fattah El Sisi already agreed with representatives of the Chinese companies to complete the project within 24 months.

Private transport company Mowasalat Misr recently acquired Al Hiba and Cairo Transport and is currently in talks to acquire a third company, Al Borsa reports. Many of the total 150 buses acquired through both companies were sold off while others are being renovated, Mowasalat Misr CEO Hisham Taha says. The company will launch operations at the start of September and is planning to bring 500 buses into its fleet to cover the Greater Cairo area within two years at an expected cost of EGP 1 bn. An app for the service will be launched sometime during 3Q2017. According to Taha, Mowasalat Misr is eyeing revenues between EGP 800 mn and 1.2 bn in 2019, and is currently in talks with Egyptian and European banks and financial institutions for funding. Mowasalat Misr launched WiFi and AC equipped buses in Cairo last week.

The Egyptian Financial Supervisory Authority (EFSA) is looking into the prospect of issuing short-term debt instruments in cooperation with the European Bank for Reconstruction and Development (EBRD), EFSA boss Sherif Samy said on Wednesday. The move would facilitate financing of SMEs, particularly those whose products and services. The move would also help facilitate factoring operations in Egypt, he added. As it stands debt securities hold a 13-month limit, with the regulator looking to allow for the issuance of short-term bonds with a duration of less than a year.

LG inked an agreement with two unnamed state-owned banks that will see it receive a monthly USD 4 mn in letters of credit, an unnamed source tells Al Borsa. The LCs will be used to cover operational costs for LG’s new washing machines production line and purchase external components. Locally-manufactured components are expected to make up 65% of total production input in the coming period, up from a current 40%. The company also plans to produce 600k machines next year up from 300k this year, as LG is looking to increase exports to Gulf and COMESA countries, and hopes to make its way into new markets, the source adds.

German Chancellor Angela Merkel told Israel’s President Reuven Rivlin that a senior Israeli official “had given Germany permission” to sell Egypt four submarines and two anti-submarine ships, Ynet reports. The agreement got the greenlight despite objections from “top” Israeli defense officials. Unlike past agreements, this one “involved advanced submarines similar to those purchased by Israel,” Ynet says. Prime Minister Benjamin Netanyahu had kept defence officials and Rivlin “in the dark” about the agreement, according to the Times of Israel.

Egyptian authorities detained 3,000 would-be illegal migrants as they attempted to leave the country in 1H2017, the Armed Forces announced yesterday, according to Ahram Online. The announcement comes as Egypt works to hammer out a Turkey-style anti-migration agreement with the EU, a notion initially floated by Austrian Chancellor Christian Kern, and backed by German Chancellor Angela Merkel last year. The EU’s agreement with Turkey has seen Ankara take steps to stem the flow of illegal migrants to Europe in return for financial aid and the promise of visa-free travel to the EU.

The UN’s Food and Agriculture Organization (FAO) will launch a mobile app and website to alert small poultry producers about related diseases, such as the avian flu, Tony McDougal writes for Poultry World. The service will launch on 31 July and operate through a system of e-mail, mobile app, and SMS notifications. “It will provide a rapid, real time, efficient communication channel, allowing for an effective and immediate action during the occurrence of a poultry disease outbreak, from detection, reporting to response.”

Patron saint of tour guides Zahi Hawass and his team think they might have discovered the long-lost tomb of Tutankhamun’s wife Ankhesenamun under Luxor’s Valley of the Kings, Owen Jarus writes for Live Science. "We are sure there is a tomb hidden in that area because I found four foundation deposits," Hawass says. The man may be hanging out with dead pharaohs for too long, as he has certainly picked up their habits of shameless self-aggrandizement.