Sunday, 15 July 2018

IMF likes our EM Zombie Apocalypse survival skills, Maait to tweak Egypt’s funding mix

TL;DR

What We’re Tracking Today

The Emerging Markets Zombie Apocalypse has put the squeeze on Egypt, with outflows from debt instruments in the USD 4-5 bn range, according to a Reuters report. But we’re not about to become walker-bait, Finance Minister Mohamed Maait told us in conversation this weekend (admittedly, he didn’t use those exact words). Maait acknowledged that global headwinds in EM have hit Egypt and suggested the government will focus less on tapping the bond market this year and instead line-up longer term facilities.

Notably not freaked out is the IMF, which released on Thursday its third review of Egypt’s economic reform program. Among the highlights of the report is its assessment that Egypt is reasonably well positioned to handle external stress such as the EM Zombie Apocalypse and higher oil prices.

Still, you’ll want to keep an eye on the global debt market, suggests the FT’s Jonathan Wheatley, who notes debt is piling up globally — and that comparatively under-leveraged EM had been slapping it on faster than are developed markets. “The big issue this [increase in debt] raises is the importance of emerging markets growing sustainably [to reduce the burden of debt],” he quotes Mohamed El Erian as saying.

EM have already seen two of the three stages of a crisis this year, El Erian notes: “First, the reversal of flows; second, the contagion between currencies seen in the Argentina peso, Turkish lira and others. ‘In the third,’ he said, ‘either the strong names reassert with their fundamentals while the weak names succumb to their fragilities, which is what is happening now; or, you get one bad outcome leading to another.’ As to which of those outcomes will predominate, he said, the jury is still out.”

We have chapter and verse in Speed Round, below.

EXCLUSIVE- The first wave of the privatization program will include stake sales by five companies, Finance Minister Mohamed Maait told Enterprise. The announcement of program timeline will take place either this week or next, said Maait, who noted that the timeline announcement was delayed as some ministries were not ready. The Madbouly Cabinet would likely then sign off on the program at the meeting following the announcement, he added.

It’s going to be a wild ride in the House today as our fearless representatives try to push through as much legislation as possible and thus earn themselves their summer recess. Some in the local press had expected the House to go into recess today, but with 43 meetings and hearings still scheduled and a pile of bills on the agenda (see Speed Round, below), we think we’re looking at recess later in the week.

The centerpiece: MPs will begin today debate in plenary session of the Madbouly cabinet’s policy program, which emphasizes continuity with his predecessor’s agenda on key points including economic policy, shoring up the social safety net, the rollout of a universal health insurance program, improvements to education, and the war on terror. You can catch our recap of the program here.

Don’t expect a final vote on the program before Tuesday, Deputy House Speaker Soliman Wahdan said on CBC’s Hona Al Asema last night. He lauded the “ambitious” program despite its lack of a detailed time frame for social protection measures and economic reforms and noted that the House is widely expected to give the incoming cabinet its vote of confidence (watch, runtime: 7:04).

Also on the House’s docket: The three bills that comprise the Press and Media Act, part two are due to be discussed today, sources tell Ahram Online. The Council of State (Maglis El Dawla) had said in its review of the law that some of its core articles are unconstitutional and infringe on press freedoms — and called for 33 of its 55 articles to be amended. The Public Contracts Act will also be discussed in committee this week, according to Al Shorouk, and could have a first reading in the House as a whole.

You now have an extra month to settle your real estate taxes: Maait signed off yesterday on extending the deadline for the payment of real estate taxes to 15 August, from 15 July, according to a statement picked up by Al Masry Al Youm. The minister said the deadline would not be pushed a second time.

Further afield this morning: Donald Trump says he plans to run again in 2020 because there’s no Democrat out there who can unseat him. Trump’s remarks came as he heads off to a meeting in Finland with Russian President Vladimir Putin. Saudi and the UAE are throwing South Africa a lifeline as the Emirates pledged USD 10 bn worth of investment, largely in tourism and mining, matching Saudi Arabia’s offer made earlier in the week.

Croatia and France face off at 5pm CLT today in the World Cup final. We don’t know who to cheer, frankly, but will probably settle on Croatia — we love the underdog.

Enterprise+: Last Night’s Talk Shows

The derailment of a train in Giza that left 58 people injured on Friday was the most popular talking point on the airwaves last night.

Preliminary results of the investigation suggest the train derailed because the track required maintenance, Assistant Transport Minister Amr Shaat said on Masaa DMC. Shaat also noted that the railway signals at the station responsible for the derailment are outdated; investigators are still trying to determine whether human error played a role in the incident (watch, runtime: 3:30 and runtime: 2:18).

The abysmal state of Egypt’s railways demands quick action, Rep. Saeed Taema told Hona Al Asema’s Lama Gebril, adding that the government’s promise to overhaul the rail system by 2022 leaves us with four years of its current condition (watch, runtime: 7:08). Al Hayah fi Masr’s Kamal Mady also had similar things to say on the issue (watch, runtime: 3:14).

Former national football team coach Hector Cuper threw just about every player under the bus for Egypt’s disappointing World Cup showing in a technical report to the EFA. Included on the list was star Mohamed Salah, who Cuper said in his report “insisted” on playing at the championship despite not having fully recovered from a shoulder injury. Sports critic Essam Shaltout slammed the Argentine’s report for laying the blame at others’ feet rather than offering a clear, technical explanation (watch, runtime: 4:38).

People (understandably) still aren’t over the Health Ministry’s decision to play the national anthem in state hospitals. Former Doctors’ Syndicate member Khaled Samir (watch, runtime: 5:27) and Rep. Nadia Henry were among those taking to the airwaves to criticize the move last night (watch, runtime: 6:08).

Speed Round

Speed Round is presented in association with

EXCLUSIVE- Maait says global macro headwinds and outlfows from Egyptian debt instruments push gov’t to seek long-term facilities: The Madbouly government is in talks with international finance institutions line up longer-term facilities that will help plug Egypt’s financing gap, Finance Minister Mohamed Maait told Enterprise over the weekend.

Who are we going to borrow from? Maait singled out the World Bank, the African Development Bank, the French Development Agency, and the Japan International Cooperation Agency, but stopped short of specifying how much Egypt was looking to borrow, noting the talks are ongoing. Maait is looking for tenors of up to 30 years with interest rates of 1-2%. Maait confirmed that long-term, lower cost facilities will be the main borrowing instruments for the government during the current fiscal year.

Unstable global macro environment behind the move: Maait intimated that the changing global macro climate had played a significant role in the decision. He said government borrowing costs were at risk of rising thanks to portfolio outflows from emerging market (the EM zombie apocalypse), EM contagion from Argentina, as well as the US Federal Reserve’s plan to continue raising interest rates. He also noted that higher oil prices remained a threat to meeting this year’s budget targets.

No eurobonds this year? As a result of higher interest rates in the US, “it would be inappropriate for us to issue foreign-denominated bonds,” Maait said. We will continue to observe the market and make a decision in the future. Government officials have previously stated that the Egypt would look to borrow USD 6-7 bn in international bond offerings in FY2018-19.

How bad are outflows from Egyptian debt instruments? USD 4-5 bn, say bankers: Egypt saw up to USD 5 bn in outflows from its debt market as a result of the broader emerging market selloff, several banking sources told Reuters. “This is part of a general concern among investors in emerging markets and not anything specific to Egypt. There is less demand than usual and portfolio managers are giving emerging markets lower limits,” a Cairo-based banker said. Yields on Egyptian treasuries cooled on Thursday, after 10-year treasuries peaked last week to 17.859%. “The high yields are a reflection of tighter liquidity dynamics, especially within emerging markets in which Egypt is a part,” CI Capital’s Hany Farahat tells Reuters.

But this was all expected, right? Enter the always-on-point Mohamed El-Erian, who told the Financial Times yesterday that “technical” investors in EM “would be a driving factor behind the performance of EM assets in [the] coming months. ‘This is a technically unbalanced asset class,’ he said. ‘The dedicated players are much smaller than the crossover players, and the capital allocated on the debt side is much more flighty than in other markets.’”

EXCLUSIVE- Maait will get a bit of help from foreign institutions that have pledged nearly USD 3bn in fresh(ish) financing:

USD 1.53 bn from the World Bank: Maait told us this weekend that the World Bank agreed last week to extend some USD 1.53 bn in new loans to Egypt during meetings in Cairo last week. The funding includes USD 500 mn for education, USD 530 mn for healthcare programs, and another USD 500 mn for Sinai. More could follow: Investment and International Cooperation Minister Sahar Nasr is in New York today for meetings with World Bank officials, according to a ministry statement. The minister is looking to get the bank to pledge some USD 1 bn to support Egypt’s development offers in Sinai, as well as a separate USD 500 mn package for the second phase of the government’s social housing project. A senior government official had told us last week that the Madbouly government is looking to borrow a total of USD 2 bn from the bank.

USD 1.2 bn from the Chinese: Egypt’s share of a USD 20 bn regional development aid package announced by Chinese President Xi Jingping at the China-Arab Cooperation Forum will be USD 1.2 bn, a senior government source told us. The funding will go towards Alamein-Ain Sokhna electric rail link. This comes as the Transportation Ministry confirmed to Al Shorouk that it is in talks with the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), and French Development Agency (AFD) to secure financing for the planned EGP 32 bn overhaul of the Cairo Metro Line 1. The ministry had been expected to sign in May a EUR 600 mn loan agreement with the lenders for infrastructure development works for Line 1.

That’s in addition to USD 3(ish) bn already earmarked by Afreximbank: The African Bank for Export and Import (Afreximbank) has allocated USD 3 bn in new funding for Egyptian companies “in the coming period,” bank president Benedict Oramah told Al Mal on Thursday. Afreximbank deputy head Ame Kamel told Ahram Online on Saturday that the bank has earmarked USD 2.3 bn for Egypt this year, of USD 1.7 bn has already been disbursed.

The IMF released on Thursday its third review of Egypt’s economic reform program, praising it for having “played a key role in stabilizing conditions, with external and fiscal deficit narrowing, inflation and unemployment declining, and growth accelerating.” The outlook for growth remains favorable in the medium-term, especially as the government presses ahead with planned reforms and focuses its efforts on mitigating the impact of risks including higher global oil prices and capital outflows from emerging markets.

Key in light of our hand-wringing about the EM Zombie Apocalypse: The IMF sees Egypt is well-positioned to handle external shocks thanks to a comfortable level of foreign currency reserves (USD 44.26 bn in June 2018), our strong banking system, and a stable macroeconomic policy. The country’s ability to meets its foreign debt obligations also remains “adequate,” but “risks remain,” the IMF warns, saying, “Additional risks include a deterioration of the security situation that would disrupt the emerging recovery in tourism supporting the improved growth outlook, and adjustment fatigue that weakens structural reform momentum.”

Read the report: Tap or click here for the landing page or download the report directly here (pdf).

Driving growth for the coming year is an expected rebound in tourism as well as rising natural gas production. Based on that, the IMF’s Executive board, which approved the disbursement of a fourth USD 2 bn tranche of Egypt’s USD 12 bn extended fund facility last month, sees:

  • GDP growing at 5.5% in FY2018-19 and reaching 6% in the medium-term, “supported by a recovery in tourism and rising natural gas production”;
  • Average inflation rising to 14.4% in the current fiscal year and dropping to single digits by mid-2020. Inflation levels in June accelerated for the first in almost a year as the government slashed energy subsidies further and hiked prices for public transportation, measures the IMF views as key to the reform agenda;
  • The current account deficit dropping to 2.6% of GDP in FY2018-19 and is projected to narrow further to 2% in the medium-term.
  • Egypt achieving its target primary budget surplus of 0.2% for the fiscal year just ended. The country targets a 2% surplus in FY2018-19, which would reduce the budget deficit to 8.1% of GDP.

Key highlights from the IMF’s policy review:

On fiscal policy, the IMF nodded to the central bank’s current approach in maintaining a flexible FX regime and key interest rates, agreeing that “monetary policy should remain cautious to contain second-round effects from the recent increases in energy prices, and that further policy changes should be guided by inflation expectations and demand pressures.” The new Banking Act should “establish price stability as the primary objective of monetary policy, strengthen the CBE’s institutional and operational autonomy, and improve the early intervention and resolution framework (MEFP 9).”

Energy subsidy reform is still key to fiscal consolidation. The report notes that the government must continue to phase-out subsidies to achieve full-cost recovery, with the fuel subsidy bill set to decline to 1.8% of GDP in FY2018-19 from a projected 2.7% in FY2017-18 and 3.3% in the year before. Electricity subsidies are also expected to fall to 0.3% of GDP this fiscal year, from a projected 0.7% in FY2017-18, before they are eliminated entirely by FY2020-21. The government’s plans to modernize the tax system are “essential to create fiscal space for investments in health and education, infrastructure and a sustainable social safety net.”

Structural reforms are necessary to “reorient Egypt toward private sector and export-led growth,” as well as reduce state intervention in the economy. This will include the state’s privatization program, which should see at least four public companies offer stakes on the EGX in 2018. A new system for allocating land to industry — which the report highlights as one of the main challenges to private sector growth — will also be issued in March 2019 and should facilitate the process. The report also cheered initiatives including an overhaul of the public procurement system and ongoing efforts to fight corruption.

Local banks stand to benefit from the central bank’s hold on interest rates, Beltone Financial bank analyst Nancy Fahmy told Bloomberg in an interview (watch, runtime: 4:16). Fahmy explained that the central bank’s decision to keep rates on hold at its last three meetings — to counter what policymakers see as a transient spike in inflation — has caused treasury yields to rise by 200-250 bps since May, which is actually in “Egyptian banks’ favor.”

Emerging consensus: No further interest rate cuts this year? With inflation likely to rise throughout 3Q2018 before cooling again thereafter, Fahmy says it’s likely that the two rate cuts we saw earlier this year were “it for 2018.” She pointed out, however, that June inflation figures took the biggest hit we’re likely to see, as it reflected recent hikes to the costs of fuel, power, and transportation. (Annual headline inflation had accelerated in June for the first time in almost year to a rate of 14.4%, from 11.6% in May). A number of analysts said at the time they expect the CBE to keep overnight deposit and lending rates unchanged at 16.75% and 17.75%, respectively, until year’s end.

Beltone sees loan growth accelerating this year as banks recover from a 2017 base effect that saw a lot of foreign currency outflows directed towards loan repayment, “This year we’re seeing recovery and also foreign currency lending,” she said, noting that while larger banks have provisioning coverage ratios above 200%, smaller players “might be a little tight on provisioning, especially with the implementation of the IFRS 9 next year.”

EFG Hermes concludes advisory on GBP 125 mn London Stock Exchange IPO of world’s largest microfinance lender: Our friends at EFG Hermes announced on Friday (pdf) took microfinance lender ASA International (ASAI) public on Friday with a GBP 125 mn initial public offering on the LSE. EFG Hermes, Citigroup, Investec and Keefe, Bruyette & Woods were advisors on the transaction, the LSE noted in a statement. The transaction saw ASAI shareholder Catalyst Microfinance Investors sell 40% of the company to institutional investors at GBP 3.13 per share. “This is a milestone transaction for EFG Hermes and one that marks the firm’s first investment banking foray in frontier markets following the launch of our frontier strategy in early 2017,” said EFG Hermes Frontier CEO Ali Khalpey (at left in photo, above). “In just over 18 months since we began building our frontier platform, we have directly entered three new frontier markets; established distribution and sales capabilities in New York, London, Pakistan, Kenya, and Bangladesh; expanded our execution to cover 95% of the MSCI Emerging & Frontier Markets Index.”

The EGPC has reportedly tapped HSBC to arrange a USD 1 bn syndicated facility, banking sources told Reuters over the weekend. The loan, which the sources said is being syndicated to other banks, will have a five-year maturity and will be used partially “to pre-pay EGPC cargo deliveries.“ The facility is “being requested by Petroleum Export Limited (PEL), a special purpose vehicle used by EGPC… to raise several loans in the past.” Like other PEL transactions, the loan is expected to be a “structured finance [transaction],” the sources added. Oil Ministry spokesperson Hamdi Abdel Aziz denied the claim, saying no agreement has yet been reached, according to the newswire. Back in May, sources claimed the EGPC had been seeking two loans from a local banking consortium worth a combined USD 850 mn in order to repay arrears to international oil companies, which are currently at their lowest levels yet.

The Oil Ministry is looking to reduce fuel imports to 12% of total energy imports by 2021, down from a current 30%, ministry sources tell Youm7. The government plans to increase its crude oil production in the comings months to achieve this target and plans to have fuel production cover 88% of local demand, they said. This came days after the Oil Ministry signed three new agreements for oil and gas exploration in the Gulf of Suez and North Sinai. Egypt is positioning itself as a regional hub for energy exports.

CIB sets the record straight on alleged fraud case: Our friends at CIB put out a statement over the weekend after allegations surfaced on social media this past Thursday that a bank employee had defrauded a retail client in the coastal city of Alexandria. An exhaustive review of transactions on the client’s account found “no discrepancies,” leading the bank to note that the apparent dispute is “unrelated to the Bank,” according to a CIB statement. “CIB will share the results of our exhaustive investigation with the relevant regulatory bodies and will avail all the needed documents for the regulators to verify that the client’s complaint is unfounded,” the statement added.

CABINET WATCH- Thursday’s meeting of the Madbouly cabinet was particularly packed. Among the highlights:

Going after slush funds: The state budget will get a shot in the arm after Cabinet ordered last week that a portion of ministerial slush funds will be earmarked to support the general budget, according to a cabinet statement. Ministries’ so-called “private accounts” are typically maintained outside the budget system and have for years been the subject of scrutiny by both the domestic press and corruption watchdogs. The central bank will collect a monthly tithe from the funds. Ministers exempted the unspent portions of education and research grants as well as social insurance funds and funds set aside social housing and university hospitals, among others. (Keep an eye on a bill now before the House Budget Committee that could regulate these private funds.)

Thursday’s decision also lays claim to 25% of any annual surplus funds generated by government agencies, which will also be collected by the central bank on the last day of every fiscal year. The prime minister will be allowed to exempt certain agencies that provide “economic or national services” from paying the duty.

Also at Cabinet’s Thursday meeting, ministers approved:

  • Launching a drive to settle overdue stamp, income tax and social insurance payments by offering relief from fines, Finance Minister Mohamed Maait said during a press conference after the meeting, according to Ahram Gate. The measures will be included in a bill now in the drafdting phase;
  • The criteria that will determine how EGP 45 mn in emergency reserves will be allocated in the FY2018-19 budget.
  • A decision to allocate additional land to the dry bulk terminal projectbeing established at the Adabiya Port;
  • The renewal of an agreement between Telecom Egypt and the New and Urban Communities Authority for another three years, during which TE will carry out EGP 3.5 bn-worth of landline installation works at new developments;
  • Amendments to the Police Authority Act related to the establishment of disciplinary committees;
  • Amendments to the executive regulations of the Universities Act, as well as a decision to establish state universities in the governorates of Marsa Matrouh and New Valley;
  • A presidential pardon for some prisoners in commemoration of the 23 July revolution.

Gov’t, House committee approve amended Sovereign Wealth Fund Act: The Planning Ministry and the House Planning and Budget Committee agreed yesterday on the final text of the legislation establishing the EGP 200 bn sovereign wealth fund, Al Mal reports. The amendments include exempting the fund from taxes for a renewable period of four years, in addition to clarifying what the state would consider an under-utilized asset. The committee, which had approved the legislation last week, had also requested that Cabinet add a minimum threshold for the fund’s dividends. It remains unclear when the legislation will be put up for debate at the House general assembly. Planning Minister Hala El Said had said the fund would launch by year’s end.

Vice Minister of Finance for Public Revenues Amr El Kholy was appointed interim head of the Customs Authority on Thursday, according to a Finance Ministry statement picked up by Al Mal. El Kholy replaces Gamal Abdel Azim, who was arrested last week on charges of accepting bribes worth EGP 1 mn in exchange for facilitating the clearance of goods from customs. There’s no word on the timeline for the appointment of a permanent head of the authority. Sources had said that former Customs Authority boss Magdy Abdel Aziz is the likely candidate to replace Abdel Azim.

MOVES- DEA Deutsche Erdoel AG has appointed Sameh Sabry as the new general manager of DEA Egypt effective 1 August, succeeding Thomas Radwitz, DEA said in a press release. Sabry joined DEA Deutsche Erdoel AG ten years ago and was most recently deputy of the General Manager of DEA’s Egypt branch.

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Up Next

The deadline for companies bidding to operate stores at the Grand Egyptian Museum (GEM) has been extended to 21 August, according to GEM supervisor Tarek Tawfik, Youm7 reports. The extension decision was approved following several requests from investors interested to run the facilities.

Image of the Day

Since its inception in 1998, Egypt’s Townhouse Gallery has been a key witness to the arts and culture scene’s “tumultuous journeyof social and political upheavals, Rachel Spence writes for the Financial Times. Founded by Canadian expat William Wells and artist and writer Yasser Gerab, the gallery had seen the wrath of governments going back to the Mubarak administration. “Today, the gallery is back on its feet with exhibitions, workshops and residencies unfolding continuously. Artists who disappeared are coming back,” Wells says.

Egypt in the News

Topping the foreign press’ coverage of Egypt this morning was the discovery of an ancient mummification workshop in Saqqara.  The find, which included five mummies, provides” a wealth of new knowledge about the mummification process,” archeologists tell the Guardian.

Egypt’s handling of the Flight 804 French investigation is business as usual, says Economist: “Egypt has form for covering up air-crash investigations when it does not like where the facts are leading,” the Economist says. The country’s rejection of a French report on crashed Flight 804 follows that same pattern of attempting to push a narrative that exonerates its institutions. The piece cites official rejections of investigations into EgyptAir Flight 990 20 years ago and the Metrojet attack.

Other stories worth noting in brief:

Worth Reading

Goldman Sachs’ sophisticated statistical model to predict the outcomes of the World Cup “did not even come close” to hitting the mark, Leonid Bershidsky writes for Bloomberg. Just to give some perspective: The model thought that Egypt had a 34.4% chance of making it out of the group stage, and that Croatia’s chance of making it to the final match was no higher than 2.1%.

“The failure to accurately predict the outcome of soccer games is a good opportunity to laugh at the hubris of elite bankers, who use similar complex models for investment decisions.” The investment bank continued to update the model as new outcomes continued to emerge, but the model continued to crank out predictions that were completely off, which goes to show that real life and a game like soccer are “infinitely more complex” than any model based on past data and statistics.

Diplomacy + Foreign Trade

Egypt, Saudi in talks to ease KSA’s regulations on Egypt agro imports: Egypt’s Food Safety Authority is in talks with its Saudi counterpart (SFDA) to ease some of the kingdom’s regulations on imports of Egyptian agricultural products, Amwal Al Ghad reports. The regulations, which came into effect on Friday, include limiting KSA’s imports to Egyptian suppliers approved by and registered with the SFDA,.

Investment Minister Sahar Nasr inked on Thursday a USD 170 mn loan from the Kuwait Fund for Arab Economic Development (KFAED) to construct a sewage water treatment facility in North Sinai, according to a Cabinet statement.

Energy

El Molla meets with Engie Global LNG CEO

Oil Minister Tarek El Molla met yesterday with CEO of Engie Global LNG, Philip Olivier, to discuss the company’s operations and Egypt’s efforts to become a regional energy hub, according to a ministry statement. El Molla called for the company to expand its investments in Egypt.

Real Estate + Housing

OUD spending EGP 6.2 bn on new residential projects this year

Oriental Weavers subsidiary Orientals for Urban Development (OUD) is spending EGP 6.2 bn this year on the development of new residential projects, according to statements by Chairman Mohamed Khamis on Thursday carried by Al Mal. These include a EGP 3.9 bn residential development at the new administrative capital.

Telecoms + ICT

TE to connect Cairo to Liquid Telecom’s fiber optic cable network in southern Africa

State-owned operator Telecom Egypt (TE) signed on Friday an MoU with the Mauritius-based Liquid Telecom that will see them collaborate on completing the company’s cross-border fiber optic network cable linking southern Africa to the rest of the world. The two companies will extend the network from Sudan through Cairo, according to a TE statement. Once complete, the project will allow TE to connect users to Liquid Telecom’s high-speed fiber optic network. No details on cost or timeline were provided.

Automotive + Transportation

Bavarian Auto to launch new EUR 3 mn BMW assembly line in August

Bavarian Automotive expects to begin assembling the third generation of the BMW X3 model its 6 October plant in August, Marketing Director Yahia Kodouss told Al Mal. The company had announced back in 2017 that it was investing EUR 3 mn to launch a new assembly line at its 6 October city factory, where it is already locally assembling the BMW 3-, 5- and 7-series, as well as the X1, X4, X5, and X6 models.

BIG plans to launch truck assembly line in Egypt

Barbary Investment Group (BIG) is conducting feasibility studies for a planned truck assembly facility in Egypt, the company said in a bourse statement. No details on the project’s cost were disclosed.

Other Business News of Note

Nibulon secures USD 80 mn loan ahead of starting USD 2 bn Egypt silos project

Ukrainian grains and oilseeds producer Nibulon is set to receive an USD 80 mn loan from the European Bank for Reconstruction and Development and ING Bank to finance “working capital needs,” World Grain reports, noting that the news “comes shortly after Nibulon announced its plan to invest USD 2 bn in new grain silos and barges in Egypt’s Nile Delta region.“ The Supply Ministry announced earlier this month that Nibulon would be investing the amount over four stages, with the first — which involves building state-of-the-art silos along the banks of the Nile — set to start during FY2018-19. Nibulon execs are expected to visit Egypt this month to start setting up a local branch for the company and hiring a team to oversee the first phase of the project.

MAF to kick off Egypt expansion plans with new Carrefour in Ismailia

Majid Al Futtaim (MAF) is planning to kick off its Egypt expansion plans with a new Carrefour store in Ismailia, MAF Chief Operating Officer Herve Majidier said without noting when the store will be opened. MAF signed a cooperation protocol with the Investment Ministry and the National Service Projects Organization in February to open 100 Carrefour stores across Egypt.

Legislation + Policy

Finance Ministry to draft legislation regulating accounting, auditing professions

The Finance Ministry is working on drafting new legislation to regulate the work of auditors and accountants, head of the ministry’s government accounting department Emad Awad said yesterday, Al Mal reports. “The law would bring the regulation of these professions up to speed with regional best practices,” Awad said. He did not provide any further details on the legislation or when it is expected to see the light.

National Security

Egypt, UK navies carry out joint exercise in Mediterranean Sea

Egyptian and UK naval forces carried out a joint training exercise in the Mediterranean Sea on Friday, Ahram Online reports.

On Your Way Out

Emirates Airlines opened its new USD 3.6 mn lounge at Cairo Airport on Thursday.  Located in Cairo Airport’s Terminal 2, the lounge caters to first- and business-class, as well as platinum- and gold-level members of Emirates’ loyalty program, and can accommodate up to 152 passengers at a time according to Arabian Business.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.84 | Sell 17.94
EGP / USD at CIB:
Buy 17.84 | Sell 17.94
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Thursday): 15,880 (-0.5%)
Turnover: EGP 589 mn (40% below the 90-day average)
EGX 30 year-to-date: +5.7%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 0.5%. CIB, the index heaviest constituent ended down 1.3%. EGX30’s top performing constituents were GB Auto up 5.2%, Pioneers Holding up 2.9%, and Egyptian Iron & Steel up 1.4%. Thursday’s worst performing stocks were TMG Holding down 1.8%, Telecom Egypt down 1.3%, and CIB down 1.3%. The market turnover was EGP 589 mn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +17.7 mn
Regional: Net Short | EGP -2.3 mn
Domestic: Net Short | EGP -15.5 mn

Retail: 75.0% of total trades | 73.5% of buyers | 76.6% of sellers
Institutions: 25.0% of total trades | 26.5% of buyers | 23.4% of sellers

Foreign: 13.4% of total | 14.9% of buyers | 11.9% of sellers
Regional: 8.4% of total | 8.2% of buyers | 8.6% of sellers
Domestic: 78.2% of total | 76.9% of buyers | 79.5% of sellers

WTI: USD 71.01 (+0.97%)
Brent: USD 75.33 (+1.18%)

Natural Gas (Nymex, futures prices) USD 2.75 MMBtu, (-1.61%, August 2018 contract)
Gold: USD 1,241.20 / troy ounce (-0.43%)

TASI: 8,362.41 (-0.31%) (YTD: +15.72%)
ADX: 4,687.01 (-0.10%) (YTD: +6.56%)
DFM: 2,884.22 (-0.28%) (YTD: -14.42%)
KSE Premier Market: 5,344.48 (-0.61%)
QE: 9,318.53 (-0.39%) (YTD: +9.33%)
MSM: 4,440.80 (-0.33%) (YTD: -12.91%)
BB: 1,342.51 (-0.18%) (YTD: +0.81%)

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Calendar

16 July (Monday): Cairo Court of Appeals to issue ruling on EGP 5.6 bn antitrust case against pharma companies including Ibnsina.

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

26-28 July (Thursday-Saturday): Green Banking: The Road to Sustainable Development, Baron Palace, Sahl Hasheesh, Hurghada.

05 August (Sunday): Egypt’s PMI reading for July released.

16 August (Thursday): CBE’s Monetary Policy Committee meeting.

21-25 August (Tuesday-Saturday): Eid Al Adha (TBC), national holiday.

28-29 August (Tuesday-Wednesday): CI Capital’s 5th Annual Egypt Equities Conference, Cape Town, South Africa.

04-05 September (Tuesday-Wednesday): Euromoney Egypt Conference 2018, Cairo.

10-13 September (Monday-Thursday): EFG Hermes’ 8th Annual London Conference, Emirates Arsenal Stadium, London.

11 September (Tuesday): Islamic New Year (TBC), national holiday.

20-23 September (Thursday-Sunday): 2018 Automech Formula car expo, Cairo International Convention Center, Nasr City, Cairo.

22 September (Saturday): New academic year begins for public schools, universities.

24-25 September (Monday-Tuesday): Arqaam Capital MENA Investors Conference 2018, Four Seasons Resorts, Dubai.

24-25 September (Monday-Tuesday): Egypt Water Desalination Forum, venue TBD.

27 September (Thursday): CBE’s Monetary Policy Committee meeting.

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

23-24 October (Tuesday-Wednesday): Intelligent Cities Exhibition & Conference 2018, Fairmont Towers Heliopolis, Cairo.

15 November (Thursday): CBE’s Monetary Policy Committee meeting.

20 November (Tuesday): Prophet’s Birthday (TBC), national holiday.

22 November (Thursday): US Thanksgiving.

25-28 November (Sunday-Wednesday): 22nd Cairo ICT, Cairo Convention Center, Nasr City, Cairo.

03-05 December (Monday-Wednesday): First Egypt Defense Expo, Egyptian International Exhibition Center, Cairo.

25 December (Tuesday): Western Christmas.

27 December (Thursday): CBE’s Monetary Policy Committee meeting.

01 January 2019 (Tuesday): New Year’s Day, national holiday.

07 January 2019 (Monday): Coptic Christmas.

25 January 2019 (Friday): Police Day, national holiday.

25 April 2019 (Thursday): Sinai Liberation day, national holiday.

28 April 2019 (Sunday): Easter Sunday, national holiday.

29 April 2019 (Monday): Easter Monday, national holiday.

01 May 2019 (Wednesday): Labor Day, national holiday.

06 May 2019 (Monday): First day of Ramadan (TBC).

05-06 June 2019 (Wednesday-Thursday): Eid El Fitr (TBC).

10-13 October 2019 (Tuesday-Sunday) Big Industrial Week Arabia 2019, Egypt International Exhibition Center.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. 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. © 2018 Enterprise Ventures LLC.