Thursday, 16 November 2017

It’s interest rate day, and 9 of 10 analysts expect MPC to leave rates on hold.

TL;DR

What We’re Tracking Today

The central bank’s Monetary Policy Committee convenes today to review key interest rates. Nine out of ten economists polled by Reuters are expecting the MPC to leave rates on hold at 18.75% for deposits and 19.75% for lending until December at least, explaining that while inflation has cooled, it is not yet at a level that would warrant a rate change.

Across the pond, the president of the Federal Reserve Bank of Dallas Bob Kaplan said he was considering backing another increase in short-term interest rates at the central bank’s meeting next month. Kaplan, who is considered a dove, said that “despite stubbornly low inflation in the US, he was increasingly concerned that historically low unemployment rates — which this month hit a 17-year record — required heightened vigilance,” the FT reports.

The House of Representatives’ ICT Committee will discuss today the Ride-hailing Apps Act, which is meant to regulate work for Uber, Careem and others. MPs began debate yesterday by reviewing first recommendations and input from the companies themselves to better understand their needs when revising the bill, committee chair Nidal Al Said tells Al Borsa. It is yet unclear if the companies had agreed to alleged provisions in the bill that mandate they submit data on customers to the authorities.

Will there be a wave of IPO announcements as listed companies scramble to meet the new regulation setting a deadline for IPOs: A number of companies will have to scramble to meet listing regulations which came into effect on Tuesday, according to Al Borsa. Among other things, the regulations give companies one month to finish an IPO from the time they get approval to list their shares. Extensions for some could be in the works, EGX chief Mohamed Farid suggested. According to Farid, some 11 listed companies whose shares have not yet begun trading are now working to meet the regulations.

EGX releases list of possible companies who are at least intending to follow through: After Farid’s comments, the EGX put out a press release listing four companies that have recently complied with one aspect of the regs or another, including DICE Sport and Casual Wear and Obourland. The release also names 19 companies which have announced they have begun procedures to comply, including QNB Al Ahly, Orange Egypt, and Arab Dairy. You can view the full list here (pdf).

Separately, the EGX’s deputy head said the bourse was in talks with 70 companies inviting them to list.

The US embassy’s Global Entrepreneur Week continues today and until 19 November, with activities taking place at main headquarters in Cairo and the consulate in Alexandria.

Sudan is learning a thing or two from Egypt — on the FX front: Sudan will be taking steps to close the gap between the parallel and official currency rates with an eye to ending the former by the end of 2019, Sudan’s Minister of State for Finance Magdi Hassan Yassin told Reuters on Tuesday. The move comes as a bid to win over foreign investment after the US ended 20 years of sanctions.

Is Hariri getting exiled to France? France’s President Emmanuel Macron has invited Lebanon’s former prime minister Saad Al Hariri and his family to France, the Élysée Palace said in a statement on Wednesday. Al Hariri, who has been holed up in Riyadh since he announced his surprise resignation last week, will arrive in France “in the coming days.” a source at the French presidency told AFP. Macron later clarified that the invitation was not an offer of political exile, France 24 reports.

MbS still has the international press’ attention: A Mubarak-era official makes a surprise appearance with a walk-on part as an alleged advisor to Saudi Crown Prince Mohamed bin Salman in this take from Cairo veterans Ben Hubbard and David Kirkpatrick for the New York Times. And on the subject of MbS, Thomas Friedman’s Attention: Saudi Prince in a Hurry is still being forwarded to us by folks at home and abroad.

The most expensive painting ever sold: “Christie’s sold Leonardo da Vinci’s rediscovered portrait of Jesus Christ as ‘Salvator Mundi,’ or the savior of the world, for USD 450.3 mn, making it the most expensive work of art ever sold,” the Wall Street Journal reports. The Financial Times also has the story of the painting, which dates to about 1500. It’s one of about 15 surviving works by Da Vinci, the FT tells us.

On The Horizon

Bringing visual and performing arts together in Cairo: Arts-Mart Gallery is holding its first “Orchestra in Art” event, A Night of Musicals, on 24 November. A Night of Musicals is being held under the patronage of our friends at SODIC Art and promises to be a captivating artistic and cultural experience, featuring a full orchestra performing selections from popular musicals including Phantom of the Opera, West Side Story, Cats, and Les Miserables, led by conductor Nader Abbassi and the international award-winning soloists Fatma Said and Gala El Hadidi. Along with the music, there will be a specially curated exhibition of Egyptian contemporary art. More information can be found here.

The Investment Ministry’s investment map of some 600 projects will officially be unveiledat the Business for Africa and the World Forum that will be held in Sharm El Sheikh on 7-9 December, General Authority for Freezones and Investment head Mona Zobaa tells Al Borsa.

Egypt plans to launch its first electronic visa in December at the Cairo ICT expo running from 3-6 December.

Enterprise+: Last Night’s Talk Shows

On another night packed only with miscellany, we were happy to see the Grand Ethiopian Renaissance Dam (GERD) talks given some airtime.

Yahduth fi Masr’s Sherif Amer zeroed in on amendments to the Unified Building Codes, which Cabinet signed off on yesterday. Senior housing ministry official Nefisa Hashem told Amer that the amendments require building licenses to be issued within one month, a process that had previously dragged on for up to two years. If the licensing authority happens to miss the one-month deadline, it is obligated to explain the delay within one week (how reassuring).

Amer also had a chat with Ismail cabinet spokesperson Ashraf Sultan about alternativescenarios in case GERD talks completely fall through. Sultan said that Egypt’s strategy will remain grounded in its framework agreement with Ethiopia and Sudan, and that Egypt remains keen on communication and flexibility, but warned that “all options are on the table.”

Sultan also phoned in to Al Hayah Al Youm to tell host Tamer Amin that the government isestablishing a human rights unit within each ministry to ensure citizens’ rights are protected. The government’s human rights strategy will also require cooperation with NGOs and communication with international organizations to keep them abreast of the state’s efforts to promote human rights. Completing the legislative foundation for human rights is also a top priority, Sultan said (watch, runtime: 4:20).

In keeping with the theme of miscellany, Kol Youm’s Amr Adib talked about everything from singer Sherine Abdel Wahab’s “mockery” of the Nile to the latest on former Lebanese Prime Minister Saad Al Hariri. Adib noted that French President Emmanuel Macron has invited Al Hariri to visit Paris, but said that it would be best for Al Hariri to return to Lebanon, even if only temporarily (watch, runtime: 4:43).

Supreme Media Council head Makram Mohamed Ahmed told Masaa DMC’s Osama Kamalthat the council coordinated with Al Azhar and Dar Al Iftaa to compile a list of 50 Muslim scholars who have been licensed to issue religious edicts (fatwas). The list will be circulated among various media outlets to ensure unlicensed edicts are no longer broadcasted (watch, runtime: 8:13). There are no words.

Speed Round

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IPO WATCH- EFG Hermes to take Unionaire, Oriental Petrochemicals public in 2018: EFG Hermes will reportedly manage the initial public offering for Unionaire Group in 1H2018 and Oriental Petrochemicals Company in 2H018, sources close to the matter tell Al Mal. The firm is also quarterbacking the IPO of the state-owned Banque du Caire in the first half of the new year, sharing top duties with HSBC. EGX Chairman Mohamed Farid had said recently to expect a “very strong” current of IPOs in 2018, with transactions slated in the chemicals, pharma, and real estate sectors. State energy company Enppi is also expected to list on the EGX in 2018.

M&A WATCH- Cairo Three A submits higher offer for NCMP, ADM to petition FRA: Cairo Three A submitted yesterday a higher offer of EGP 51 per share for the acquisition of 100% of the National Company for Maize Products (NCMP), the Financial Regulatory Authority (FRA) announced yesterday (pdf). This comes one day after the FRA rejected Archer Daniels Midland’s (ADM) bid of EGP 50 per share, which in turn had come to counter Cairo Three A’s initial offer of EGP 45 per share. The FRA had also turned down ADM’s first offer of EGP 35.56 per share, to the surprise of company executives, who said the acquisition was discussed with Investment Minister Sahar Nasr and meant to mark the launch of ADM’s expansion plans in Egypt. ADM has asked its legal consultant to petition the FRA to understand more about why their bid for NCMP was rejected, says Salah Tawfik, CEO of ADM subsidiary Medsofts.

The Agriculture Ministry is awaiting instructions from cabinet after a court ruling reinstating the zero-tolerance policy for ergot in wheat, Reuters reports. “The ruling was against a decision that was issued by the cabinet so we have to await directions from there to know whether it will affect our process … Until then it is business as usual,” Minister Spokesman Hamid Abdel Dayem says. He added that the court ruling, if implemented, would be retroactive, potentially impacting cargoes that have already been contracted. “If implemented, the court order would restore a strict import rule that suppliers have said is impossible to guarantee and which has them led them to add hefty premiums to their tender bids to account for the added risk of cargo rejection,” Reuters notes. “This will take us back to the zero point, which will lead to zero offers in tenders and a lack of supply for the private sector,” said Hesham Soliman, president of grain traders Med Star.

Natural gas market to be fully deregulated by 2022: The Oil Ministry is reportedly planning to fully implement the Natural Gas Act, which deregulated the market, by 2022, ministry sources tell Al Shorouk. The state will complete its transition to a regulator in five years, leaving the sector wide open for private operators to import and distribute gas to the national grid, the source added. Last month, Prime Minister Sherif Ismail had appointed Karem Mahmoud to head the new regulatory body. The starting gun for the law will be when the executive regulations are ratified, which Oil Minister Tarek El Molla said was coming any day now.

House signs off on Dabaa contracts, moves them along to El Sisi to set a signing date: The House of Representatives’ general assembly signed off on the contracts for the USD 30 bn Dabaa nuclear power plant yesterday, Al Borsa reports. The four contracts with Russia’s Rosatom have been sent to President Abdel Fattah El Sisi to review and set a date for the signing, which Electricity Minister Mohamed Shaker had announced last month would happen before the end of the year after a series of mismatched reports surfaced. Under the agreement, the Russian government will offer Egypt a USD 25 bn loan, to finance development work at the 4800 MW plant, with an annual interest of 3%. The remainder of the amount will be sourced locally, according to House Energy Committee deputy Essam Abdallah. Russian President Vladimir Putin is expected to visit Egypt to attend the signing ceremony.

No link to Egypt flights: President Abdel Fattah El Sisi pointed out in Sharm El Sheikh last week that there is no relationship between Dabaa and Cairo’s bid to get Moscow to restore flights to Egypt that were suspended after the Metrojet terror attack.

Abdallah said we can expect the House to start debate in about two weeks’ time on legislation that will establish an authority to oversee nuclear power projects. Disagreements in the House are currently over tax exemptions and customs breaks awarded to the authority under the proposed law, which the Ismail Cabinet approved in September.

House will not endorse GERD until Egypt’s share of Nile water is secure: Leading MPs said yesterday they would refrain from voting on the 2015 agreement on the Grand Ethiopian Renaissance Dam (GERD) until Egypt’s share of the Nile water is secured in writing, African Affairs Committee deputy Maged Abo El Kheir tells Al Mal. Discussions over GERD had reached a stalemate earlier this week, but El Sisi is expected to meet with Ethiopia’s prime minister in Cairo in December to attempt a work-around the impasse.

LEGISLATION WATCH- Universal Healthcare Act will impose fees on healthcare, pharma sectors: It appears that tobacco isn’t the only sector which is paying into the Universal Healthcare Act. The EGP 600 bn healthcare plan mandates a series of fees on the healthcare sector that range from EGP 10,000 to EGP 500,000 for various licenses and administrative filings. Companies looking to open hospitals, clinics and pharmacies must pay a fee which will go into funding the system. Establishing a pharma factory will also require companies to pay into the system, according to Al Mal. The House of Representatives’ Healthcare Committee, which is currently deliberating on the law, is seeking revenues of up to EGP 40 bn from these fees to fund the healthcare system, according to the committee’s deputy chair Ayman Aboul Ela.

LEGISLATION WATCH- The Ismail Cabinet approved amendments to the Unified Building Code during its weekly meeting yesterday and referred the bill to the Council of State (Maglis Al Dawla) for review, according to an official statement. The amendments focus on facilitating the process of issuing licenses, tightening safety codes, and better enforcement of the legislation. The bill will also establish a supreme council for urban planning and development that will be mandated with setting policy nationwide.

The final draft of the Social Welfare Act also received Cabinet’s stamp of approval yesterday. It will go to the House of Representatives for review at the beginning of next week, unidentified government sources tell Al Borsa. The draft law sets a minimum pension rate, will index annual pension increases to inflation, and will establish a new pensions fund. According to the source, the government wants to finalize all procedures for the legislation by the end of March 2018 and bring it into effect before the start of the new fiscal year in July.

The ministers also discussed a report from the Irrigation Minister on the latest developments in the Grand Ethiopian Renaissance Dam negotiations. Foreign Minister Sameh Shoukry also outlined the political dimensions of the situation.

Other key decisions taken during yesterday’s meeting include:

  • Approving a EGP 2.8 bn direct order agreement with pharma companies producing cancer treatment medications;
  • Signing off on a KWD 200,000 grant from the Arab Fund for Social and Economic Development to finance technical and economic feasibility studies for the 100 feddans project;
  • Ratifying a presidential decree to extend the borders of Al Shorouk City to use the additional land for residential development projects;
  • Approving and sent to the Council of State a draft law to restructure the National Council of Women;
  • Approving amendments to the Prisons Organization Law that will allow prisoners to be eligible for parole after completing half of their prison sentence, instead of two-thirds;
  • Agreeing to set up a committee headed by the Military Production Ministry to manage negotiations for the establishment of a factory to produce solar panels from silica sand.

Separately, Transport Minister Hisham Arafat signed a USD 150 mn agreement with Thales Spain to supply an automated railway signaling system, Al Masry Al Youm reports. The agreement will be funded through a World Bank loan carrying an interest rate of less than 1%, Arafat told reporters after the signing ceremony. The new signaling system will be used for the 180 km Assiut-Naga Hamady rail line and will allow trains to travel at 160 km/hr, up from 120 km/hr currently, Cabinet said in a statement. The system will take three years to be installed.

EARNINGS WATCH- A number of our friends were among those reporting earnings yesterday as the 3Q results season eases to a close. Among those with results out yesterday or overnight:

SODIC reported a 54% y-o-y jump in net profit to EGP 166.2 mn in 3Q2017. Revenues increased 10% y-o-y to EGP 584 mn for the period, driven mainly by deliveries, which remained on track with 297 units delivered compared to 287 in 3Q2016. Eastown Residences made up the bulk of the quarter’s deliveries at 63% of the total. “With gross margins for the quarter hitting the 40% mark in such an inflationary backdrop we are once again demonstrating our ability to generate superior profitability on our developments,” MD Magued Sherif said. “Our sales performance was very much in line with our expectations, given the limited inventory on the Mediterranean north coast and we remain on track to meet our 2017 financial and operational goals.” The company delivered the first units in its Courtyards developments in SODIC West during the quarter and plans to launch its New Cairo project SODIC East over the coming months, with expectations seeing it making significant contributions to profitability in 4Q2017.

Egypt Kuwait Holding Company grew its bottom line threefold during 3Q2017, posting net income of USD 41.7 mn on revenues that were 13% higher y-o-y at USD 86.5 mn. The quarter saw the company make “new headway in our efforts to streamline our portfolio by divesting from legacy businesses and affording our balance additional strength and liquidity that will usher in a new growth phase and continued value creation,” Chairman Moataz Al-Alfi said. EKH completed divestments worth over USD 200 mn during the quarter, in addition to funneling “proceeds from share sell-downs in non-operational platforms to the reduction of our debt exposure in the tune of USD 75 mn.” Management is optimistic about future prospects, especially given developments in natural gas with the Offshore North Sinai concession, and as the company “continues to push forward with other growth initiatives across our portfolio that target import substitute plays.”

Elsewedy Electric posted bottom-line growth of 116% y-o-y for 3Q2017, which came in at EGP 1.56 bn compared to EGP 720.7 mn in 3Q2016. Revenues also increased by 135.2% y-o-y to EGP 11.46 bn, driven largely by growth in the turnkey projects and wires and cables segments. Going forward, Elsewedy intends to remain focused on “the continued creation of sustainable, long-term value for stakeholders,” which has the company “actively seeking new avenues for growth in existing and new MENA markets.” The company is also squarely focused on internal strengthening as it does so, with CEO Ahmed El Sewedy noting that, “We are strengthening our organisation through the standardization of our internal procedures, adopting world-class corporate governance frameworks and developing our human resources as our key success pillar.”

Madinet Nasr Housing and Development posted a net profit after tax of EGP 246 mn in 3Q2017, a drop of 20% y-o-y. Top line was 3% lower y-o-y at EGP 560 mn, despite an increase in contracted sales and deliveries during the three-month period. The company attributed the drop largely to lower contributions from its Capital Gardens project, which is being co-developed with Palm Hills. On a nine-month basis, net profit grew 60% y-o-y to EGP 757 mn as the company continued to push forward with new launches at Taj City and new contracts at Sarai. CEO Ahmed El Hitamy noted that, “As we gear up for an accelerated deliveries and sales performance during the final months of the year, we remain confident in our ability to meet year-end targets, having already generated some EGP 3.6 billion in contracted sales during the nine-month period.”

Also reporting earnings yesterday:

  • Orascom Development’s net profit for 3Q2017 reached EGP 92.5 mn, compared to a loss of EGP 46.0 mn in the same period last year. A pick up in unit deliveries led the turnaround. The company also noted it’s preparing to launch phase two of its business hub G-Space in El Gouna by mid-December.
  • Oriental Weavers reported an 18% y-o-y drop in net profit after tax to EGP 109 mn in 3Q2017. This came despite a 64% y-o-y increase in sales revenues, which came in at EGP 2.6 bn.

US Congressional committee passes bill that could sanction Qatar: Qatar got a slap from the US Congress on Wednesday when the House Foreign Affairs Committee passed a bill that would sanction countries which finance terrorism, the Associated Press reports. In an apparent show of support to the Arab Quartet blockading Qatar, the Republican-led committee issued a scathing rebuke of the pariah state, particularly its support of Hamas. The legislation cited a March 2014 Treasury Department report that said Qatar "has for many years openly financed Hamas." What a waste of lobbying money.

Zimbabwe’s Mugabe joins ranks of ousted state heads? Zimbabwean President Robert Mugabe became the latest state head to be taken into custody when military forces seized him and his wife in what is being perceived as a potential military coup, the Associated Press reports. The whereabouts of the 93 year-old and his wife are currently unknown, but army Major General Sibusiso Moyo confirmed they were in custody. “The Mugabes have joined the ranks of world leaders who were removed from power and taken into custody as a result of developments in their own countries.” Reuters also has the story.

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Image of the Day

The first Israeli settlement from lands captured in 1967 was Yamit in the Sinai, according to an archival piece from The Guardian. The town was set up on the Mediterranean side of the Sinai near Rafah and was thought of at the time as a potential barrier between Egypt and Israel in the case that the Sinai would be returned. The prefabricated buildings were supposed to house 350 settler families by the spring of 1976 and expectations were that Yamit could one day house a deep sea port for Israel. Jewish families were, to say the least, recalcitrant when the handover back to Egypt took place. Israeli authorities had to resort to forced evacuations before razing the settlement.

Egypt in the News

Egypt, a country renowned for its sense of humor, makes headlines for losing it: Topping coverage of Egypt in the international press is pop singer Sherine Abdel Wahab being banned from performing in Egypt — and possible facing trial. Her crime? A joke she made during a performance of the song “Have You Drunk From the Nile?” during which she warned a fan against the health hazards involved in literally drinking from it, AP reports. She was banned by the Egyptian Munchkins …er… Musicians Syndicate, headed by former singer and professional wet mop Hany Shaker, who would give the Consumer Protection Authority’s Atef “Smiley Face” Yakoub a run for his money. Judicial officials announced she was due to stand trial in December on charges of spreading “false or tenacious rumours,” the Guardian reports (we have yet to see environmental data which qualifies her joke as a false rumor). DISCLAIMER: There are exactly zero fans of Sherine at Enterprise.

Also worth a skim this morning:

  • French arms sales to Egypt are raising concerns both in Egypt and in France, Albaraa Abdullah writes for Al-Monitor. Er, really?
  • The government has temporarily stopped issuing new licenses for outdoor advertisements in an effort to “beautify” Cairo streets, Menna Farouk writes for Al-Monitor, picking up on a story from earlier this month.
  • Egypt has the fundamentals and vision to become an export hub, according to a piece of ‘advertorial’ fluff run in the regional edition of Bloomberg’s Businessweek. (We don’t disagree with the sentiment — just don’t take a paid-for supplement as editorial coverage.)
  • The four Arab teams in the World Cup are providing a welcome distraction to their citizens from increasing regional problems, Bloomberg reports.
  • Islamist Ayat Oraby is taking advantage of US free speech laws and preaching hate against the government and Coptic Christians from New Jersey, according to the Algemeiner.
  • The plight of the LGBT community in Egypt is once again being explored in this write up by ABC News.

Diplomacy + Foreign Trade

Egypt, Tunisia, and Algeria’s foreign ministers stressed yesterday the importance of reaching a breakthrough in the political reconciliation process in Libya as soon as possible, according to a Foreign Ministry statement. The three countries also reaffirmed their support for reaching a political solution to the crisis, and their rejection of any military actions or foreign intervention. The statement came after Minister Sameh Shoukry met with his Tunisian and Algerian counterparts, Khemaies Jhinaoui and Abdelkader Messahel in Cairo to discuss efforts to reconcile the various factions in Libya.

South Sinai Governor Khalid Fouda and a delegation of executives met with Azerbaijan’s Foreign Minister Elmar Mammadyarov during the week, Azerbaijani news sources reported. Fouda spoke with Mammadyarov about restoring direct flights between the two countries and other aspects of bilateral cooperation.

Energy

ADES to form JV with Vantage Drilling to offer deepwater drilling services

LSE-listed oil and gas services firm ADES is forming a joint venture with a subsidiary of Vantage Drilling International to provide deepwater drilling services in Egypt’s Mediterranean basin, World Oil reports. “The JV will operate Vantage’s deepwater drilling units in Egyptian waters on a bareboat charter agreement basis and discussions are underway with regional operators as the JV aims to capture opportunities amid significant discoveries and prospective drilling programs in Egypt’s Mediterranean basin.” ADES will be granted exclusive marketing rights within Egypt.

Maridive & Oil Services signs USD 20 mn agreement to provide services at Zohr

Maridive & Oil Services signed a USD 20 mn agreement with an unnamed Egyptian company to lease three maritime units to provide maritime and oil services at the Zohr gas field, Al Mal reports. No further details were provided.

Basic Materials + Commodities

Supply Ministry considering raising monetary value of bread points

The Supply Ministry is studying a proposal to raise the bread subsidy points to EGP 0.30 from EGP 0.10, an unidentified government source tells Al Mal. The ministry had floated a similar idea in July that would have doubled the points subsidy card holders receive for every loaf of bread not bought, to EGP 0.20. The points on the card are then tallied and allow the cardholder to buy other commodities. Sources had said at the time the move was meant to reduce bakers’ manipulation of the system.

Dairy sales down 20% this year

Dairy consumption has been down this year, as industry sales fell 20% in 2017, Juhayna CEO Saif Thabet said, according to Al Borsa. Thabet blamed low consumer purchasing power as a result of the EGP float in addition to inflation. He did state that a recovery is at hand, and he expects the dairy industry to return to 2015 levels by 2019.

Egypt to export cherimoyas following EGP devaluation, Vietnam now open to Citrus Exports

Egyptian producers have started being able to export cherimoyas following the EGP devaluation, according to Fresh Plaza. “We could not export any significant amount of cherimoya before because of the high prices they reached … after the liberalization of exchange rates, international markets returned to an acceptable price,” George Barsoum of producer La Tulipe Company said. In other fruit export news, the Agriculture Ministry announced that the Vietnamese market is now open to Egyptian citrus exports, according to Al Mal. This comes on the back of improvements in Egypt’s quality control measures.

Egypt steps up imports of Ukrainian wheat bran

Egypt imported 5,500 tonnes of Ukrainian wheat bran in the first quarter of FY2017-18 after a hiatus that saw it purchase a total 600 tonnes from the country for the whole FY2016-17, according to UKRAgroConsult.

Health + Education

Nahdet Misr Publishing launches new Edtech incubator

Nahdet Misr Publishing Group launched EdVentures, Egypt’s first corporate venture capital arm specializing in edtech, Wamda reports. “EdVentures incubates, accelerates, and further invests in startups specializing in education and learning.”

Tourism

Hilton to increase its hotel rooms in Egypt by 40% by 2022

Hilton Worldwide is looking to increase the number of hotel rooms it manages in Egypt by 40% by 2022’s end, North Africa VP Mohab Ghali said, according to Reuters. Hilton manages 17 hotels in Egypt currently and aims to take on seven more projects and add 2,500 rooms by 2022. Ghali says the average occupancy rates at Hilton hotels in Egypt increased by 20-25% y-o-y and 40% of hotel reservations are being made by locals currently. “As long as there is economic and political stability, you’ll see the numbers of tourists improving,” Ghali noted. Reuters notes that tourism revenues have increased by 210% y-o-y in 9M2017.

Unseen treasures of King Tut go on display

The Egyptian Museum in Cairo displayed previously unseen treasures from King Tut’s tomb,The AP reports. 55 pieces of fabric decorated with gold will go on display for the first time since their discovery by Howard Carter in 1922. The pieces have been in storage of 95 years and now go on display as part of the commemoration marking 115 years for the museum.

Telecoms + ICT

Orange Egypt looking to convert parent company loan to equity

Orange Egypt said it is working closely with the EGX and the Financial Regulatory Authority (FRA) to complete a capital increases through converting a EUR 750 mn loan from its parent company to capital, according to a bourse disclosure. The company’s EGM will meet on 4 December to approve the move. The company says it aims to expand its shareholder base and abide by bourse listing regulations regarding the minimum number of shares that need to be in free float.

Automotive + Transportation

EgyptAir to lease six Dreamliners, first Bombardier jets arriving in 1H2018

EgyptAir will lease six Boeing 787-9 Dreamliners from Dublin-based AerCap under a long-term operating lease, Boeing announced. The Dreamliners are from AerCap’s order book with Boeing and are scheduled to be delivered in 2019. “We look forward to the 787 becoming an integral part of EgyptAir’s fleet as we progress our modernization and network expansion plans,” EgyptAir CEO Safwat Musallam said. The value of the transaction was not disclosed. This comes as EgyptAir will receive the first C-Series plane from its USD 1.1 bn agreement with Canada’s Bombardier in 1H2018, an unnamed source from EgyptAir tells Al Mal. The remaining 11 airliners will be shipped to Egypt over two years at a rate of one plane every two months. As we noted yesterday, EgyptAir Holding Company and Bombardier signed a letter of intent for as many as 24 CS300 airliners.

Banking + Finance

NI Capital launches NI Consulting

NI Capital launched a financial consulting subsidiary called NI Consulting on Wednesday,according to a company statement picked up by AMAY.

Egypt Politics + Economics

Unemployment rate drops to 11.9%

The unemployment rate dropped to 11.9% in 3Q2017, Reuters reported, citing CAPMAS. The rate fell from 12.6% in 3Q2016.

Egypt plans to issue annual report on human rights status to respond to international claims

The Egyptian government plans to issue an annual report on the state of human rights in the country, Parliamentary Affairs Minister Omar Marwan said yesterday, Ahram Online reports. “Reports by international entities with which Egypt has signed agreements will receive sufficient attention and care from the government,” Marwan said. “We will also respond to reports by these groups to refute their claims about Egypt.”

Priest killer sentenced to death

A man has received the death sentence for the murder of a priest in Cairo in October,MENA news reported. The sentence now gets passed to the Grand Mufti for review.

Badie death sentence upheld

The Court of Cassation rejected Ikhwan Leader Mohamed Badie’s appeal of a death sentence on Wednesday, Reuters reports. His case goes back to his role in violent clashes in Ismailia, and the original sentence was handed out in 2016.

Court releases 24 Nubians pending trial for protest

The State Security Court has ordered the release of 24 Nubians pending trial on charges they took part in an illegal protest in Aswan, sources told The Associated Press. “The Nubian protest demanded they be allowed to return to their ancestral land around the lake formed by the Aswan High Dam.”

On Your Way Out

19 African startups were picked to join the third edition of international non-profit accelerator BigBooster in Lyon, France, according to Disrupt Africa. Accident detection and notification app BlinkApp was the only Egyptian company who made the list.

ON THIS DAY- On this day in 1988, Benazir Bhutto was elected prime minister of Pakistan, to become the first woman in modern history to lead a Muslim country. Bhutto served as prime minister from 1988 to 1990 and again from 1993 to 1996.The Constitution of UNESCO was signed on this day in 1945, and came into force on 4 November 1946 after ratification by twenty countries. The founders set up the organization to establish the “intellectual and moral solidarity of mankind” and, in so doing, prevent the outbreak of another world war. Nobel laureate Milton Friedman died on this day in 2006. Friedman was awarded the Nobel Prize in economics for “his achievements in the field of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.” Egypt was starting to get a lot of love from international bond investors this time last year. In 2015, we were reporting on Valeant’s acquisition of Valeant and in 2014 we were starting to see a new direction on electricity policy.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.5929 | Sell 17.6929
EGP / USD at CIB: Buy 17.56 | Sell 17.66
EGP / USD at NBE: Buy 17.58 | Sell 17.68

EGX30 (Wednesday): 14,025 (-0.8%)
Turnover: EGP 1.1 bn (11% above the 90-day average)
EGX 30 year-to-date: +13.6%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session down 0.8%. CIB, the index heaviest constituent closed down 1.6%. EGX30’s top performing constituents were: AMOC up 3.4%; Abu Dhabi Islamic Bank up 2.8%; and Elsewedy Electric up 2.4%. Yesterday’s worst performing stocks were: Porto Group and Domty both closed down 2.7%; and Egyptian Iron & Steel down 2.3%. The market turnover was EGP 1.1 bn, and foreign investors were the sole net sellers.

Foreigners: Net Short | EGP -185.8 mn
Regional: Net Long | EGP +49.6 mn
Domestic: Net Long | EGP +136.2 mn

Retail: 66.2% of total trades | 71.7% of buyers | 60.8% of sellers
Institutions: 33.8% of total trades | 28.3% of buyers | 39.2% of sellers

Foreign: 20.9% of total | 12.4% of buyers | 29.3% of sellers
Regional: 9.4% of total | 11.7% of buyers | 7.2% of sellers
Domestic: 69.7% of total | 75.9% of buyers | 63.5% of sellers

WTI: USD 55.28 (-0.75%)
Brent: USD 61.85 (-0.58%)
Natural Gas (Nymex, futures prices) USD 3.08 MMBtu, (-0.71%, December 2017 contract)
Gold: USD 1,278.00 / troy ounce (-0.38%)

TASI: 6,912.35 (-0.96%) (YTD: -4.13%)
ADX: 4,337.09 (-4.6%) (YTD: -0.67%)
DFM: 3,467.56 (-0.61%) (YTD: -1.79%)
KSE Weighted Index: 402.26 (+0.6%) (YTD: +5.83%)
QE: 7,761.25 (-1.43%) (YTD: -25.64%)
MSM: 5,111.41 (-0.06%) (YTD: -11.61%)
BB: 1,265.08 (+0.41%) (YTD: +3.66%)

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Calendar

16 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

19-21 November (Sunday-Tuesday): 11th Annual INJAZ Young Entrepreneurs Competition, Four Seasons Nile Plaza, Cairo.

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

01-03 December (Friday-Sunday): RiseUp Summit, Downtown Cairo.

03-05 December (Sunday-Tuesday): Solar-Tec, Cairo International Exhibition & Convention Center.

03-05 December (Sunday-Tuesday): Electrix, Cairo International Exhibition & Convention Center.

05 December (Tuesday): Egypt’s Emirates NBD PMI reading for November to be announced.

03-06 December (Sunday-Wednesday): 21st Cairo ICT, Cairo International Convention Center, Nasr City, Cairo.

07-09 December (Thursday-Saturday): The Africa 2017 forum: “Business for Africa, Egypt and the World” Conference, Sharm El Sheikh.

19 December (Tuesday): Village Capital’s Financial Health Competition: Middle East and Egypt (applications close 3 November)

28 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

12-14 February 2018 (Monday-Wednesday): Egypt Petroleum Show 2018 (EGYPS), New Cairo Exhibition Center.

17-21 February 2018 (Saturday-Wednesday): Women For Success – Women SME’s "World of Possibilities" Conference, Cairo/Luxor.

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