Thursday, 15 November 2018

Good marks for Egypt from EBRD on everything except transparency of policymaking

TL;DR

What We’re Tracking Today

We’ve done this 1,000 times now: You’re reading the 1000th issue of Enterprise this morning. We’re not going to make a lot of hoopla over it, but want each and every one of you to know how deeply we value your trust and the fact that you choose to begin your business day with us every morning. We hope you all enjoy what we have in the pipeline over the course of our next 1,000 issues.

It’s interest rate day: The central bank’s Monetary Policy Committee (MPC) meets today to decide on interest rates. All 10 analysts and economists in our poll see the CBE keeping interest rates on hold as it attempts to stem the tide of portfolio outflows in a turbulent emerging markets climate. Foreign holdings in Egypt’s treasuries fell to USD 13.1 bn by the end of September, from a high of USD 21.5 bn in March, said Pharos Holding head of research Radwa El Swaify.

The House discussion of the proposed E-commerce Act originally scheduled for today has been postponed, Rep. Youssef El Shazly told Al Mal. The act is a “top priority” for the House CIT Committee, he said.

EBRD’s conference on opportunities for consultancies in digitalization ends today at the Marriott Mena House Hotel.

The US embassy and Injaz Egypt have kicked off this year’s round of Startup Egypt, the embassy said in a statement yesterday. The program has graduated 65 startups since its 2011 launch, and provides seed funding of up to EGP 120k. Startups looking to join the program can apply here.

The UN Biodiversity Conference headlined “investing in biodiversity for people and the planet” kicked off yesterday, through to Thursday, 29 November in Sharm El Sheikh. We have more on the conference in Diplomacy + Foreign Trade, below.

Active fund managers, take heart: You can still beat the passive funds if you can get your head around the notion of secular risk. Set aside for a moment the fact that nobody knows how the market will cope (or what glitches will appear) when exchange-traded funds sell some USD 7.4 tn in securities during the next downturn, as JPMorgan predicts. Passive strategies are here to stay, in one form or another, whether we like it or not. But human fund managers can get ahead by embracing secular risk as “new competitive forces, technological advances and changing consumer habits” re-shape industries across the map and present “powerful challenges to passive investing over the next 5-10 years,” says T. Rowe Price. Get the rundown at Business Insider.

In miscellany this morning:

Israeli Defense Minister Avigdor Lieberman resigned yesterday in protest of the Gaza ceasefire agreement recently signed between Israel and Palestinian factions, Reuters reported.

For football fans and biz nerds: The English Premier League has tapped a new chief executive to take over when Richard Scudamore steps down next year after a two-decade run. Susanna Dinnage (above) will take over the league, joining from Discovery’s Animal Planet. (WSJ | Reuters)

Levi Strauss is going to list again, having tapped JPMorgan Chase and Goldman Sachs for a USD 600-800 mn offering that would value it at as much as USD 5 bn. The jeans maker went public in 1971, but was later taken private by members of the founding family. (FT | Bloomberg | CNBC)

Speaking of JPMorgan: Warren Buffett wants a bit more of that. The Oracle of Omaha just bought more shares of JPM as he increases Berkshire Hathaway’s exposure to major US financial institutions.

You can’t remember much of your childhood because your brain needs to forget if it is going to grow. Read: Why you can’t remember being a kid on Nautilus, a lovely meditation on childhood and neuroscience.

Weekend reading: We’re a motley crew here when it comes to national / cultural / social identity, so we’re looking forward to getting caught up this weekend on the FT’s Expat Identities series, wherein the salmon-colored paper “relates, in alternating parts, the experiences of a British woman in Hong Kong and a French woman in the UK” as they come to grips with what it means to be immigrants (or expats, depending on your point of view). The latest installment in the series is here, and you can go back to square one by hitting the link stack at the bottom of the page.

PSA- This coming Tuesday is a national holiday. Prime Minister Moustafa Madbouly has declared it a public-sector holiday, and both the central bank and the Egyptian Exchange have confirmed they’re closed for the day.

Enterprise+: Last Night’s Talk Shows

Making use of untapped state-owned assets and the establishment of Egypt’s sovereign wealth fund were of much interest to the talking heads last night after the topics featured in a meeting between President Abdel Fattah El Sisi, Prime Minister Moustafa Madbouly, and Planning Minister Hala El Said. Political analyst Kamal Rayan told Al Hayah Al Youm that El Sisi stressed the importance of setting up the fund as soon as possible to put these assets to good use (watch, runtime: 3:55). Yahduth fi Masr’s Sherif Amer was more concerned with El Sisi’s instructions to speed up construction at the New Alamein City (watch, runtime: 2:53).

The effect of slashing tariffs on EU-imported cars to zero at the beginning of next year will only be evident 3-6 months after implementation, Rep. Mohamed Badrawy told Masaa DMC’s Osama Kamal. Badrawy also shook his head at the lack of progress the domestic automotive industry has made over the past several years (watch, runtime: 5:04). The head of the Federation of Egyptian Industries’ Taxes and Customs Committee, Mohamed El Bahy, who seemed unaware of the long-stalled automotive directive, called on the House of Representatives and government to draft a strategy to encourage domestic manufacturing (watch, runtime: 5:01).

A Kuwaiti MP launched a broadside at Egypt’s Immigration Minister,Nabila Makram Ebeid, for (doing her job and) defending an Egyptian citizen who was assaulted in Kuwait. Speaker of the Kuwaiti National Assembly Marzouq Al-Ghanim phoned in to Masaa DMC to ease the tension by hailing Egypt and Kuwait’s long-standing and strong relations, and noted that the case is making its way through the Kuwaiti judiciary (watch, runtime: 8:14).

Elsewhere last night: Menoufiya residents say they have no access to potable water, according to Yahduth fi Masr (watch, runtime: 5:16); Dakahlia Governor Kamal Sharobiem discussed his province’s woes on Al Hayah Al Youm (watch, runtime: 4:05); and Masaa DMC’s Osama Kamal mourned the death of a colonel who was injured during the events of 2013 (watch, runtime: 10:11).

Speed Round

Speed Round is presented in association with

Egypt’s perceived transparency in government policymaking has “notably” declined over the past year, the EBRD said in its annual Transition Report. Egypt’s governance transition score declined to 4.7 from 4.8 in the 2017-18 report.

But, but, but:  The Egyptian economy has also become more competitive, greener, more inclusive, more resilient and more integrated in the past year. We got marked down on the governance score because a risk here of inadequate compliance with AML and CFT frameworks designed to clamp down on money laundering and terrorist financing. Morocco, Tunisia, Serbia, Hungary also got lower scores on this front.

Egypt fared well in terms of financial and energy resilience, the report says. “Banks have weathered the aftermath of the currency depreciation seen at the end of 2016,” and Egypt’s foreign currency shortage has “largely been resolved.” An improved legal framework for the energy sector, particularly when it comes to deregulating the gas industry, has also contributed to Egypt’s score improvement. The report also gave a hat tip to Egypt’s efforts to lift electricity subsidies, “which are being pushed through against an inflationary backdrop, although there remains uncertainty as to when cost reflectivity and market pricing will be achieved.”

Egypt needs to create around 750k new jobs each year to absorb all new entrants to the labor market, but Egypt is among several countries with a mismatch between the skills of recent graduates and the demands of the job market.

Our macroeconomic performance has improved as growth continued to accelerate for the fifth consecutive quarter, real interest rates turned positive in January for the first time in two years as inflation decelerated, and fiscal and external positions have improved, the bank says in its country profile. These improvements come on the back of “major” structural reforms and the enactment of key pieces of legislation, including the bankruptcy, natural gas, railway, and companies acts.

Moving forward with the state privatization program is among the “key priorities” for Egypt in 2019, the EBRD says. “There is a need to prioritise the sale of well-performing, bankable and profitable companies, to rebuild confidence and attract international investors, even from unconventional destinations.” The bank also stresses the importance of remaining committed to the economic reform program — coupled with the enactment of further legislation “needed to strengthen the [macroeconomic and business climate] recovery, including land registration reform” — and keeping our debt levels in check.

You can read the full report here (pdf) or check out the country profile on Egypt here (pdf).

M&A WATCH- Thailand’s Indorama acquires 74% of Medco Plast in EGP 843 mn transaction: Thailand’s Indorama Ventures bought 74% of Egypt Medco Plast for Packing and Packaging Systems for EGP 843 mn, it said in a statement.

What does Medco do? Medco makes some 70k metric tons of polymer PET preform containers each year on 11 production lines. It sells to “all the multinational soft drink and water manufacturers operating in Egypt” and estimates it has a 25% market share. “Medco’s strong presence in the domestic market and a longstanding customer relationship with all beverage majors operating in Egypt will enable the company to support growing local customers’ demand and provide a platform for further growth in the Middle East and African regions,” said IVL CEO Aloke Lohia.

Who’s selling? The selling shareholders include Middle East Glass Manufacturing (MEG) and the Samaha family. MEG will hold 16% share once the transaction is executed, while the Samahas will retain a 10% stake. MEG had signed a non-binding agreement to divest 74% of its shareholding in the company last year.

Advisors: HC Securities and Investment acted as the sole financial advisor to MEG and the Samaha family (its fifth M&A with MEG, it said in a statement). Matouk Bassiouny was counsel to MEG and Shehata Law Firm was counsel to the Samaha family. Baker & McKenzie was legal counsel to Indorama Ventures.

M&A WATCH- Medhat Khalil said to seek up to EGP 800 mn in bank finance for Raya take-private bid: Raya Holding for Financial Investments founder Medhat Khalil is in talks with several banks over a potential EGP 700-800 mn facility to finance his bid to take to take Raya private, Khalil said yesterday, according to Amwal Al Ghad. Khalil had previously estimated he would need EGP 500 mn to acquire the outstanding 58% of Raya, noting that he would be forced to acquire the remaining stake at a premium. He had also said earlier this month that he is considering bringing together a group of investors for the take-private bid.

Background: The Financial Regulatory Authority (FRA) had ordered that Khalil launch an MTO or sell off shares in Raya after declaring he triggered the MTO requirement with an effective stake of more than 33%. Khalil says he and his family members control 32% of shares, but the FRA is counting the 10% stake owned separately by his brother-in-law as a related party, bringing the Khalil group’s total stake to 42%. Khalil has appealed the date and price set by the FRA for the MTO, he said earlier this month.

This comes as Raya Holding reported yesterday a net profit of EGP 41.53 mn in 3Q2018, up 28.6% from EGP 32.28 mn in the same period last year, according to a disclosure to the EGX (pdf). Revenues were up 25.8% y-o-y to EGP 2.19 bn from EGP 1.74 bn.

FinMin, Trade Ministry deny plans to impose new 10-20% tax on car sales: Trade Ministry advisor Hossam Abdel Aziz denied our report from Wednesday morning that the Finance and Trade ministries considering a plan that could impose a 10-20% “development fee” on all car sales. Trade Minister Amr Nassar also denied he or Finance Minister Mohamed Maait had spoken to the press about the plan, according to Al Mal. Two senior government officials had told us that the plan, still on the drawing board, would offset the development fee for locally assembled or manufactured vehicles through discounts or waivers of other fees. The sources told us that the government was eyeing finalizing the plan by 1 January, 2019 — which is when Egypt will bring import duties on European cars to zero as planned under a trade agreement.

INVESTMENT WATCH- GB Auto aims to hike capex by 10-15% next year: GB Auto is hiking its capex spending by 10-15% next year, CEO Raouf Ghabbour told Al Mal. The firm plans to invest up to EGP 500 mn next year in aftersales and other facilities, with the company set to launch five new maintenance centers in the coming period. Crucial to the decision, is Ghabbour’s prediction that interest rates are likely to come down next year, which would help spur consumer spending and drive up auto sales. Ghabbour sees passenger car sales growing 15-20% industry-wide next year as a result.

Lack of coherent policy for the sector behind current stagnation: Ghabbour sees the lack of a coherent government policy for the automotive sector as contributing to the stagnation of the sector. He noted that the continued stalling of the automotive directive — legislation that would give incentives to local assemblers to move up the value chain to manufacturing in return for tax breaks that would give them an ongoing price edge against EU, Turkish and Moroccan-made imports — has hurt local assemblers. He also reiterated that customs on EU-made cars falling to 0% next year would not make cars cheaper.

Industry standards can’t be dropped on the sector like bag of bricks: Ghabbour also noted that the government’s decision to impose some 20 new quality control standards on the auto industry in one fell swoop would prove difficult for local assemblers. The Trade and Industry Ministry’s Organization for Standardization & Quality (EOS) is planning to enforce around 400 new quality standards across several industries before the year is out.

EARNINGS WATCH- Investment company Egypt Kuwait Holding (EKH) saw its 3Q2018 revenues rise 37% y-o-y to USD 118.6 mn, the company announced yesterday (pdf). Revenue growth was driven by strong operational performance in the fertilizers and petrochemicals segment, as well as healthy growth in the energy sector. Bottom line for the quarter declined 19% y-o-y to USD 33.6 mn when factoring in the USD 18.3 mn “in non-recurring income related to capital gains on the sale of Egyptian Hydrocarbons Company. Factoring out this gain from the comparable quarter’s results, net income for Q3 2018 would record a 44% y-o-y increase.” Commenting on the results, Chairman Moataz Al Alfi said they “reflect EKH’s ability to consistently deliver year-on-year growth whether driven by on-the-ground strategic initiatives or by capitalizing on favorable economic policies [in Egypt].”

Private equity firm B Investments posted a 50% y-o-y increase in consolidated net profit of EGP 147 mn in 9M2018, according to the company’s earnings release (pdf). Revenues for the period climbed 59% y-o-y to EGP 187 mn, from EGP 118 mn during the same period last year, with the growth mainly “derived from dividend declaration and share of profits from portfolio companies, in addition to finance income.” Chairman Hazem Barakat said in a statement that the company expects its recent acquisition of a majority stake in high-end food retailer Gourmet Group to “deliver solid growth in the coming period.”

Real estate developer Talaat Moustafa Group Holdings (TMG) reported a 12.5% increase in net profit to EGP 1.25 bn in 9M2018, up from EGP 1.1 bn in the same period last year, according to an EGX disclosure (pdf). TMG’s revenues jumped to EGP 6.8 bn in 9M2018, a 21% increase y-o-y from EGP 5.6 bn.

State-owned fixed-line monopoly Telecom Egypt reported a net profit after tax of EGP 1.48 bn in 3Q2018, up 50% y-o-y from EGP 960 mn in 3Q2017, according to the company’s earnings release (pdf). Revenues for the period were up 65% y-o-y to EGP 7.23 bn from EGP 4.39 bn in 3Q2017, driven by spiraling demand for data services and the company’s recent agreement to allow Bharti to use part of its MENA and TE North cable systems was among its top revenue drivers, it notes.

Did the IFC just get into the collection agency business? We’re oversimplifying, but… The International Finance Corporation (IFC) and Omni Bridgeway, which bills itself as a specialist in resolving non-performing loans, have “jointly made available USD 100 mn to establish a new investment vehicle” that will take on non-performing loans from financial institutions across MENA. The for-profit company will be managed by Omni Bridgeway out of Dubai, according to a statement (pdf) released yesterday.

What is this, exactly? Omni Bridgeway makes money in distressed situations as a provider of litigation finance as a player in the “high value claims monetisation industry.” Now, under the IFC’s distressed assets program, it will look to acquire portfolios of NPLs from financial institutions in Egypt, Morocco, Tunisia, Pakistan, Lebanon and Greece and then make a buck by turning them around. The result is that the banks will be able to “unlock their capital and encouraging new lending” by offloading bad debt. The aim is to help banks de-risk their balance sheets as well as to “rehabilitate rehabilitate and re-integrate defaulted debtors into the formal credit markets and to create a secondary market in NPLs.”

REGULATION WATCH- FRA to complete market regs for short-selling next month: The Financial Regulatory Authority finish regulations governing short-selling next month with an eye to rolling out shorts early in 2019, deputy chairman Khaled El Nashar told Amwal Al Ghad. El Nashar said the authority plans to consult with the industry on the regs. He had previously said that short-selling regs will ensure that only brokerages with strong balance sheets will be allowed to offer shorts to their clients under a new license to be created by the regulations. The rules are expected to place limits on the number of shares a short-seller can borrow for a short position and also force borrowers to pay a cash security deposit equivalent to 50% of the securities they’re borrowing.

LEGISLATION WATCH- FRA to finalize consumer credit and insurance acts in 2019: Also coming from the FRA, the authority plans to finalize next year drafting the Consumer Credit Act and the Insurance Act, FRAboss Mohamed Omran said at a presser, according to Amwal Al Ghad. The Consumer Credit Act bill, which the FRA revealed was in the works back in September, will introduce laws governing retail financing and consumer credit. While the Insurance Act, which was supposed to have been approved and finalized in September, will make the FRA the chief regulator of and govern the entire insurance sector.

LEGISLATION WATCH- Is the CBE done preparing its revised banking act? CBE Governor Tarek Amer discussed with President Abdel Fattah El Sisi yesterday the long-planned overhaul of the Central bank and Banking Act, Ittihadiya said. A source familiar with the matter had said earlier this year that the central bank could present the legislation to the Madbouly Cabinet in 4Q2018. Once approved by cabinet, the bill would move to the House of Representatives for committee review and a vote in the general assembly.

More extensive law? The final draft of the act could be much more extensive than the first draft, which came out last year and caused a stir in the banking sector. Industry players objected at the time to term limits for bank MDs, a proposed tithe on industry profits to endow an industry development fund, and provisions that would give the central bank expanded powers over the daily affairs of banks.

The SME Development Authority expects to receive EUR 120 mn in loans and grants before year-end that will be used to develop infrastructure in five governorates and combat illegal migration in 11 others, the authority’s head of human and social development sector Medhat Massoud told Al Mal. The authority is currently in talks with the European Union, the European Investment Bank and the French Development Agency for the funding, Massoud said. The FDA loan is earmarked for developing four inner-city areas in Cairo and Giza. We previously reported that the authority is in talks with the EU and the EIB for a combined EUR 87 mn in loans and with the World Bank for a USD 200 mn loan to finance projects. Massoud said that Egypt is approaching signing a final agreement for the WB loan, which would be focused on youth- and women-led SMEs.

Illegal migration: Massoud did not get into how the European loans and grants would be used, but you can expect the argument that financing SMEs in struggling areas will create jobs and keep at home people who would otherwise illegally migrate abroad. Germany and Austria have been pushing for a pact with North African countries, including Egypt, to help it curb the increased inflow of illegal migrants to it in exchange for economic support. The pact could see Egypt’s navy patrol the Mediterranean.

CORRECTION- Lamya Youssef is the head of the studies and design sector at the Egyptian Electricity Transmission Company (EETC), not the head of Egyptera as we had reported on Tuesday. The story has since been corrected on our website. Thank you to those who wrote to us pointing out our error.

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Egypt in the News

It’s another quiet morning for Egypt in the international press. Human Rights Watch says US policymakers should not be “fooled” by Egypt’s pledge to amend the NGOs Act, while the Washington Post has picked up an Associated Press story on an Egyptian man in Los Angeles who allegedly killed his two sons to collect on an insurance policy.

Sector Spotlight

Could hydroponic farming save Egypt? Hydroponic (or soilless) farming could be the answer to Egypt’s growing water shortage as well as the continuously shrinking size of the country’s arable land base, Agritech startups told Enterprise. There are now at least 25 companies in the industry in Egypt — a sector, we note, that was virgin territory just seven years ago.

Why is hydroponic farming perfect for Egypt? We have sun all year round, enjoy a perfect geographical location for exports, and hydroponic farming uses 95% less water than traditional agriculture, said Adel Shentenawy, CEO of Hydrofarms. Founded seven years ago, Hydrofarms provides turnkey projects, training programs as well as marketing services. Unlike traditional farming, hydroponic farming also makes it possible to grow a larger variety of produce and is not reliant on seasons, Shentenawy said. The produce is also pesticide-free, he noted.

Gov’t enthusiastic, but moving slowly: Successive governments have shown enthusiasm for hydroponic farming, industry players tell us, seeing it as part of a food security drive and as a potential export powerhouse. But key government projects have stalled, including the 100k greenhouses projects (a component of the 1.5 mn feddans megaproject). Industry insiders put it down to a lack of know-how, which the private sector is stepping in to fill. They are looking forward to working with the government on creating an “expert committee” to regulate the sector and collect data, they told us.

Changing the mindset of traditional agriculture will grow the industry: Training and education programs can go a long way in creating a culture where hydroponic farming is embraced and practiced outside of commercial use. Organizing school workshops to teach children the method and benefits of hydroponic farming is one of the ways Al Bustani has adopted to spread the culture, said CEO and co-founder Houssam Aboul Fotouh. The company, which has worked on projects in cooperation with Food and Agriculture Organization and the Operational Unit for Development Assistance, is currently working on developing an app to monitor hydroponic systems by using sensors.

Diplomacy + Foreign Trade

Shoukry, EU’s migration commissioner talk cooperation on illegal migration: Foreign Minister Sameh Shoukry and European Commissioner for Migration and Home Affairs Dimitris Avramopoulos discussed yesterday potential strategies to combat illegal migration in the region, according to a ministry statement. The EU is pushing for an EU-North Africa partnership that would see Egypt stem the flow of migrants from Africa and the Middle East.

Energy

ACWA, Hassan Allam to sell electricity to gov’t at USD 0.018/kwh from Luxor plant

The Electricity Ministry, Saudi’s ACWA Power, and Hassan Allam Holding have agreed to set the final price for electricity generated from the USD 2.3 bn, 2.3 GW Luxor power plant at USD 0.018/kwh, ministry officials tell /Al Mal. The ministry will cover part of the cost of supplying the plant with natural gas in exchange for a lower-than-market-price for the energy produced. The three signed last week the power purchase agreement for the 2.3 GW plant, which is expected to reach full capacity by 2023.

Egypt pays Dana Gas USD 111 mn in arrears in 9M2018

Egypt paid Dana Gas USD 111 mn in arrears owed in 9M2018, the company said in its earnings release on Wednesday (pdf). The story comes as Egypt has been stepping up payments to international oil companies (IOCs), with arrears to oil producers have fallen to their lowest levels yet, coming in at USD 1.2 bn at the end of FY2017-18. The company noted that its production output in Egypt fell to 34,500 boepd in 9M2018, from 39,600 boepd in 9M2017.

Enara Group, CleanMax Solar Company partner up to build solar power projects

Enara Group signed yesterday a partnership agreement with India’s CleanMax Solar to build 200 MW-worth of solar power projects over the next three years under a JV, according to a company release (pdf). The projects will include on site/rooftop panels and solar farms. No details on the investment value or the locations of the projects were disclosed.

Automotive + Transportation

Uber tests minibus service in Egypt ahead of potential rollout in Kenya

Uber Technologies has begun testing a new service in Cairo and Mexico’s Monterrey to book seats on minibuses, according to Reuters. If successful, Uber may roll out the new service in Kenya.

Banking + Finance

China UnionPay to expand into Egypt as demand increases

ATM card company China UnionPay is planning to expand into Egypt, sources close to the matter said, according to Al Mal. The company’s planned expansion comes as it expects demand for its products to increase following the upcoming rollout of the national debit card, Meeza.

Aman to issue EGP 250-300 mn securities, to establish securitization firm, considers financial leasing

Raya Holding subsidiary Aman is planning to issue EGP 250-300 mn-worth of asset-backed securities, pending Financial Regulatory Authority (FRA) approval of the company’s bid to establish a securitization arm, Raya CEO and founder Medhat Khalil tells Al Mal. CIB will run the bookbuilding process for the issuance and El Derini and Partners will act as legal advisors. Aman is also considering offering financial leasing services, for which it has a license, Raya CFO Hossam Hussein announced.

FRA approves request from Mubasher to suspend advisory branch

The Financial Regulatory Authority approved Mubasher International’s request to temporarily suspend activities at its financial advisory armfor a year, CEO Ayman Sadek tells Al Mal. Mubasher’s EGM had signed off on the suspension on the back of a slowdown in EGX activity. The company will undergo a restructuring program in the meantime, and keep an eye on the market until conditions show signs of improvement, Sadek added.

Fawry to invest EGP 400 to improve operations and meet rising demand

E-payments provider Fawry will invest EGP 400 mn to improve the company’s infrastructure and customer service, founder and CEO Ashraf Sabry told Amwal Al Ghad. The self-financed investment will go towards improving the company’s operations to meet rising demand and higher levels of financial inclusion in Egypt.

My Morning Routine

Bahaa Ali El Dean, managing partner, ALC and lecturer of law

My Morning Routine looks each week at how a successful member of the community starts their day — and then throws in a couple of random business questions because we simply can’t help ourselves. Extracts from our conversation this week with Bahaa Ali El Dean, one of our favorite lawyers:

Who am I? I’m Bahaa Ali El Dean, lecturer of law and managing partner of ALC, a Cairo-based law firm. I’m a graduate of Cairo University and earned my masters and PhD at King’s College London. The teaching and practice of law are my passions in life.

ALC is a corporate law firm. We’re six partners and another 40 lawyers and support staff. Our focus is on providing counsel to C-suite clients whose engagements largely involve sophisticated transactions — from national megaprojects, cross-border acquisitions, and regulatory affairs to securitized offerings, syndicated facilities, and complex litigation and arbitration cases.

We’re very proud to represent New Administrative Capital for Urban Developments Company, which is building what is likely to prove the largest construction project in Egypt’s modern history. We have served as legal adviser on one of the largest new-build nuclear power construction projects in the world: The El Dabaa project in Egypt, worth more than USD 30 bn. And we have served since 2007 as legal counsel to the USD 4.2 bn Egyptian Refining Company.

My morning routine starts with my first wake-up call at 4am. That’s when I check on my younger daughter, who’s studying in Canada. Then I go back to sleep and wake up again at 6am to start the day. I read Enterprise in bed (with one eye open) and forward interesting items to clients and colleagues at work. Then I take a 45-minute walk in the streets of Maadi. The only coffee I have is at 7:30am — it’s green tea the rest of the day.

I try to avoid any news on TV or the internet — it raises one’s blood pressure too early in the day. Netflix is a blessing … The only thing I read while having breakfast is the print edition of Al-Ahram. The hour-long journey to the office is mainly about work calls and emails.

The best thing I’ve watched lately on Netflix? Fauda, The Crown and Imposters were really interesting, each in its own way. I find shows about lawyers and law firms of special interest — take something like Suits: Mr. Harvey Specter and Mr. Mike Ross make the job look so fun and elegant. Look at them nicely dressed with their buttoned jackets sitting on their shining desks — I wish the job were like this. Some of my law students think that this is the life we’re living…

The biggest challenge of the day is how to stick to a schedule while still having the ability to attend to unforeseen matters our clients face. Doing that and finding time to live outside the office alchemy.

How is the market changing? Most of us at the top corporate law firms have training in (or have been exposed to) European and North American universities, law offices and clients. But today, we’re seeing more Russian, Indian and Chinese investors becoming active in major projects. They bring with them cultures and ways of doing things that are totally new to us. I suppose it’s too late to learn Mandarin or Russian now … All of us at the major firms are learning in our own ways the art of dealing with clients and government agencies from these three countries and how best to present Egyptian law to them. Having a translator in meeting rooms takes getting used-to. I think new graduates should be considering doing post graduate studies or legal training in these countries.

Investment law is definitely changing. New laws are being introduced, and some very well-rooted legal principles are changing. Who would have thought that we could have a charge or mortgage on moveable property with the debtor still in possession of the asset? I was taught in law school that a single-shareholder company was impossible — a company had to have at least two shareholders, otherwise it could not logically exist and be a corporate body. An updated and modern legal regulation on bankruptcy is again something worth celebrating. These developments are why I spend so much time reading on weekends..

The business of corporate law has changed in Egypt over the past few years. There is a lot of talent in the Egyptian legal market. New corporate law firms are growing and all are doing well. Unfortunately, some very talented lawyers have decided to work abroad or have moved to business.

I think the market is ready for mergers between some firms and that we are approaching the time where Egyptian firms will have regional presences. Legal services will become an Egyptian export.

What am I proud of? It’s fantastic to see greenfield projects we helped bring to life become operational, but I think the most satisfying thing is probably seeing students I taught start to come into their own as professionals after the graduate.

I collect Egyptian art when I’m not on the clock. Egyptian artists, past and present, are amazing and are not getting the local or global recognition they deserve.

I have works by Ragheb Ayad, Bekar and Seif Wanly from the older generation. Among more recent artists, I have collected Abdel Fattah El Badry, Sayed Saad El-Din, George Bahgoury and Gehan Raouf. Mohsen Aboul Azem has lovely work on the daily life of Egyptians — at school, work, before the court and at the doctor. I have gotten to know some of these artists over the years, and each one has a very interesting story to tell. And as with all artistic work, you sometimes find that the art is more interesting than the artist.

The best piece of business advice I’ve been given?  Every industry has its role models — the people you want to emulate when you start out. I think this is wrong. Oscar Wilde had the best advice in this regard when he said, “Be yourself — everyone else is taken.”

The Market Yesterday

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EGP / USD CBE market average: Buy 17.86 | Sell 17.95
EGP / USD at CIB:
Buy 17.86 | Sell 17.96
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Wednesday): 13,487 (-0.4%)
Turnover: EGP 916 mn (23% above the 90-day average)
EGX 30 year-to-date: -10.2%

THE MARKET ON WEDNESDAY: The EGX30 ended yesterday’s session down 0.4%. CIB, the index heaviest constituent ended up 0.4%. EGX30’s top performing constituents were Egyptian Iron & Steel up 5.1%, and Qalaa Holdings up 2.6%, and Ibnsina Pharma up 1.7%. Yesterday’s worst performing stocks were Pioneers Holding down 5.1%, Palm Hills down 3.7% and Heliopolis Housing down 2.8%. The market turnover was EGP 916 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +57.9 mn
Regional: Net Short | EGP -158.8 mn
Domestic: Net Long | EGP +100.9 mn

Retail: 53.7% of total trades | 55.8% of buyers | 51.6% of sellers
Institutions: 46.3% of total trades | 44.2% of buyers | 48.4% of sellers

WTI: USD 55.93 (-0.57%)
Brent: USD 66.12 (+0.99%)

Natural Gas (Nymex, futures prices) USD 4.66 MMBtu, (-3.64%, December 2018 contract)
Gold: USD 1,211.70/ troy ounce (+0.13%)

TASI: 7,659.88 (-1.17%) (YTD: +6.00%)
ADX: 5,021.18 (+1.10%) (YTD: +14.16%)
DFM: 2,776.38 (+0.03%) (YTD: -17.62%)
KSE Premier Market: 5,297.04 (+0.13%)
QE: 10,199.08 (-1.12%) (YTD: +19.66%)
MSM: 4,459.57 (-0.17%) (YTD: -12.55%)
BB: 1,310.51 (+0.43%) (YTD: -1.59%)

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Calendar

14-15 November (Wednesday-Thursday) Digitalisation: opportunities for innovation in consultancy, Marriott Mena House Hotel, Cairo, Egypt

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

15 November (Thursday):  The T20 Invest in Healthcare Conference 2018, Nile Ritz Carlton Hotel, Cairo, Egypt.

17-19 November (Saturday-Monday): ElectricX-Energizing The Industry, Egypt International Exhibition Center, Cairo, Egypt.

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

22 November (Thursday): US Thanksgiving.

End of November: A delegation from the Egypt-Greece Business Council will visit Athens at the end of November to promote investment, the council’s chairman, Hani Berzi, said.

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.

04 December (Tuesday): Egypt’s Emirates NBD PMI for November released.

08-09 December (Saturday-Sunday): Business for Africa and the World: The Africa 2018 Forum, Maritim Jolie Ville International Congress Center, Sharm El Sheikh.

09-10 December (Sunday-Monday): Cairo Regional Centre for International Commercial Arbitration’s Sharm El Sheikh VII conference, Egypt Hall, SOHO Square, Sharm El Sheikh

12 December (Wednesday): Banking and Finance Congress 2018, Cairo, venue TBD.

13-15 December (Thursday-Saturday): Forum on “ The Role of Digital Financial Communication and Solutions in Enhancing Financial Inclusion,” Sharm El Sheikh, venue TBD.

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.

22-25 January 2019 (Tuesday-Friday): World Economic Forum (WEF) Annual Meeting, Davos-Klosters, Switzerland.

23 January 2019 (Wednesday) 50th Cairo International Book Fair.

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

20-22 April 2019 (Friday-Sunday): Spring meetings of the World Bank and International Monetary Fund, Washington, DC.

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).

June 2019: International Forum for small and medium enterprises (SMEs).

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.