WHAT WE’RE TRACKING TODAY

The Holy Month is upon us. Iftar will be at 6:59pm CLT today for those of you who observe and are based in Cairo. For those of you who stay up — or tumble out to the kitchen — for sohour: Fajr is at 3:08am CLT tonight / tomorrow morning. (All times are per our favorite prayer time calculator. It’s old-school, but it works.) Banks are open to the public 9:30-1:30pm, the EGX trading session will run 10-1:30pm.

Oh, and if you’re complaining about how long the fasting day lasts in Cairo, give thanks you’re not inReykjavik, where the faithful will apparently be going without food or drink for 21 hours a dayif they don’t opt to follow the same hours as Mecca.

And in all cases: Ramadan karim to all of our readers who are celebrating the month.

We’re still waiting for any form of concrete news about the 2014-15 budget, on which the Mahlab government was silent despite a promise on Tuesday that Cabinet would finalize discussion of the document yesterday. More on this and other pending legislation and regulations in our special spotlight, below.

Are Egypt, Turkey and Qatar helping broker a truce between Israel and Hamas that could already involve indirect talks? We round up the evidence in today’s Diplomacy section.

Trade and Industry Minister Mounir Fakhry Abdel Nour leaves for the St. Petersburg International Economic Forum, which begins today. Abdel Nour is expected to discuss investment opportunities and new avenues for cooperation between Russia and the Middle East. Among the high-ranking officials with whom Abdel Nour will meet during his three-day excursion is the chief of the Eurasian Economic Union (EEU); the two are to discuss a potential free-trade agreement between Egypt and the EEU.

Today is the final day for applicants submitting their candidacy posts in the Dostour Party’s internal elections, with their general election set to take place on 26 June.

WHAT WE’RE TRACKING NEXT WEEK

The World Bank will release its amended report on Egypt this coming Sunday, announced Ahmed Kojak, economic analyst at the MENA Financial Policy Division of the World Bank. The amended report will explore changes to Egypt’s economic indices in light of the EEDC projects being implemented. In an interview in Al Mal, he predicted that the report would put Egypt’s budget deficit for the 2014/2015 at 11.3%-11.5%, outpacing the government prediction of 10%.

LAST NIGHT’S TALK SHOWS

Wednesday being the worst night of the week for Egyptian talk shows was only amplified by yesterday night being the eve of Ramadan, with all the major hosts taking the night off.

Youssef El Houssieny’s program on ONTV ran a rerun, while Lamees El Hadidy on CBC Egypt had Khairy Ramadan filling-in as is usual on Wednesdays, accompanied by an unidentifiable female co-host with short bleach-blond hair. Please, no emails saying “I can’t believe you didn’t recognize who so and so was” because this reviewer doesn’t know and doesn’t want to know.

Khairy Ramadan and his co-host interviewed Sherif Abdel Azim, the head and founder of the charity organization Resala. Very early on into the conversation, Abdel Azim was asked about media rumors regarding Resala’s ties to Islamists in general and the Brotherhood in particular. Abdel Azim categorically denied any such ties, but said that 200,000 people pass through their doors every year, and it is likely that some of their members do belong to the Brotherhood. Resala has never allowed political activity or discussion since its founding in 1999, according to Abdel Azim. He said that the number of possible Brotherhood members in Resala would be proportional to their relative number in the general population, as he said that Resala’s membership come from all religious, political and social walks of life in Egypt. He further stated, in response to follow up questions, that the entirety of their charitable work comes exclusively from Egyptian donations.

In the second half of the program, Ramadan and his co-host sat with a panel of actors and writers in the studio, namely: veteran television and film actor Ahmed Rateb, actress Riham Haddad, screenwriter Amr Samir Atef and writer Tamer Habib. The panel spoke about Egyptian television drama in general, without going into the new programs set to air this season. The panel attempted to answer the segment’s broad question: ‘Does television drama reflect reality?’ When asked to respond why television drama is perceived to be more overtly focused on the negative aspects of Egypt rather than the positive, Ahmed Rateb rejected the notion that television dramas were under any obligation to do so. “Peace and tranquility? Where’s the drama in that?”

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SPEED ROUND

Valeant Pharmaceuticals is in the final stages of a bid to acquire Egypt’s Amoun Pharmaceuticals in a transaction worth USD 700-800 mn. The move comes as part of the Canadian company’s expansion into emerging markets and, if successful, would mark Valeant’s third major acquisition after a failed hostile takeover bid for Allergan last November and the successful acquisition of Salix for USD 11.1 bn. Al Borsa is overplaying the report in the domestic press, presenting it as a done deal and as having been announced by Valeant, while Bloomberg broke the story globally, citing unnamed sources. Valeant refused to comment on the transaction, while Amoun’s spokesperson was unavailable. This follows news we reported in May that the two sides were in talks on a potential transaction. Reports Bloomberg: “Amoun’s shareholders include emerging market-focused private-equity arms of Capital Group, Concord International Investments, and the Rohatyn Group, the New York-based fund that agreed to acquire Citigroup Inc.’s buyout business in 2013. The investors bought Amoun for about USD 450 mn in 2006.” Amount’s corporate website is here

Egypt has no option but to buy Israeli gas, Israel’s Energy Minister –Egyptian media: The statement attributed to Yuval Steinitz, Israeli Minister of National Infrastructure, Energy and Water Resources, was picked up by both Al Watan and Youm7. According to the two Egyptian media outlets, Steinitz said that Cairo had previously decided what the export prices were, but now Egypt will have to accept buying gas from Israel at USD 7-8 per mmBtu. A source at the Oil Ministry rejected the statement, saying that Egypt has multiple options and could just continue to rely on LNG imports. Further, the source said that Egypt is Israel’s only viable buyer and that it will need to find a market for its gas production,Youm7 reports.

Is this actually what Steinitz said? No. On Tuesday, Steinitz was quoted in a Hebrew-language article in Israeli business news site Globes whose title roughly translates to: “Steinitz: ‘I will not allow our gas to turn out like the Egyptian gas field.’” At a news conference on Tuesday, Steinitz is quoted as arguing against what he described as the populist position taken by some Israeli politicians that Israeli gas should not be exported. “We [Israel] are limiting exports, as well as restricting the gas price in one form or another, although Western countries do not. So we should be careful not to scare away investors, and to not hinder the development of Leviathan or the development of other reserves. The fact is that, in the last five years, we have not reached any agreement for an oil and gas company to invest in Israel. It concerns me very much” With regard to the quote attributed to Steinitz in Al Watan and Youm7, the actual statement from the Globes article reads as follows:“Egypt has restricted exports and prices, and now Israel has to buy gas at a price of USD 7-8 per mmBtu, despite Israel’s huge gas reserves.” (Read in Globes in Hebrew)

EFG Hermes, Akanar to advise on Domty listing: The Arabian Food Industry Co., best known for owning the Domty brand of dairy products, will IPO on the EGX later this year or early next, deputy CEO Mohamed El Damaty told Reuters yesterday, saying the company was encouraged by Edita’s very successful listing late this past spring. El Damaty declined to size the offering, but said it would include a capital increase and some sale of shares by existing shareholders. In addition to its extensive lineup of cheese products, Domty produces juices and plans to diversify into yoghurt and packaged milk. EFG Hermes and Akanar are advising on the transaction.

The Wall Street Journal gave Egypt a pat on the back in an interview with Supply and Domestic Trade Minister Khaled Hanafy headlined ‘Egypt Reduces Dependence on Foreign Wheat.’ Notes the Journal: “Egypt’s efforts to reduce its reliance on overseas purchases of wheat are starting to pay off, and will accelerate in the next fiscal year starting in July … the government has sought to tackle both supply and demand. It has bought more wheat from local farmers to try to curb its foreign exchange requirements, and has modified the subsidy program to trim waste and lower demand.”

Pharos Investment Banking has received three offers from Arab and international investors interested in building a greenfield petroleum refinery in Assiut, Managing Director Sherif Abdel Aal said. The project is set to attract USD 2.1 bn in investments and was offered at the EEDC. The investment banksaid at the time that the Assiut Oil Refinery would “have a production capacity of c.1.5 MTPA of much-needed diesel fuel in addition to 840 KTPA of gasoline” and had a roughly three-year construction timeline. The same interview with Abdel Aal covers other recent transactions on which the firm’s investment banking division has or is advising.

“Egypt’s equity market could weaken further as economic activity slows alongside rising price measures,” Andrew Sachais writes from Seeking Alpha. He adds that rising inflation and sporadic lending rates have led to slowing economic activity in recent months. Sachais anticipates a fall in the purchase power and that would couple with a trade deficit to slow economic activity down, pulling the equity market down with it.

Pensioners to get a bit more each month? Social Solidarity Minister Ghada Wali announced yesterday that Cabinet will decide that same day whether to approve a 10% hike in pension benefits to retirees, saying the measure would cost state coffers some EGP 10 bn and benefit 9 mn citizens. Not included in Wali’s figure is a scheduled 10% rise in pension benefits for state employees; that measure is due to kick-in this July at a cost of EGP 3 bn, Youm7 reports. As with a ream of economic policies, there was no confirmation at dispatch time that ministers had made a decision (see more in Spotlight, below, in the Case of the Missing Legislation).

Mahlab has approved extending rations and quotas for newborns as part of the supplies smart card program for Ramadan, Supply and Domestic Trade Minister Khaled Al Hanafy announced.

Two Egyptian business partners are among 20 entrepreneurs representing 15 companies from 10 countries who were chosen to join the Endeavor Network at its fifty-ninth international selection panel in Amman, which ran 9-11 June. Mai Medhat and Nihal Fares are co-founders of Eventtus, which gives event organizers an “Eventtus-branded mobile app to … sell tickets and provide a tool for attendees to plan their agenda, network with other participants, and collaborate through interactive forums, surveys, and polls,” according to the Endeavor blog post announcing the selection. Eventtus has been used by TEDx events, Vodafone, Mercycorps as well as Startup Weekend events in five different cities.

The French business delegation to Egypt led by Gras Savoye Chairman Patrick Lucas continues to make headlines, this time with a long-ish profile by Ahram Online. French ambassador André Parant joined Lucas in noting compelling opportunities in Egypt for French companies, pointing to the recent opening in Egypt of L’Oréal’s first production facility in the MENA region.

Some 165 prisoners arrested for having broken the protest law were granted pardons by President Abdel Fattah El Sisi yesterday. The traditional Ramadan pardons did not include any of the high-profile youth activists presently in prison or pre-trial detention, so far as we can tell. Al-Masry Al-Youm also has the story, along with photos of the former detainees leaving prison gates.

Egyptian militants pledge allegiance to Daesh during Cairo trial on Tuesday: “I announce my allegiance, along with Adel Habara, to Abu-Bakr El-Baghdadi, the Islamic State leader,” cried Ammar Ali Ramadan, a defendant in the case. “Soon we will see him ruling this country,” he added. (Read)

The United States Federal Trade Commission has given Shell the green light to acquire BG Group, “the first clearance for the biggest deal in the energy sector in over a decade,” Reuters reported. The deal still requires further regulatory clearances from all the countries BG operates in, including the European Union, China, Australia, and Brazil. Shell’s CEO said the acquisition remains on track for completion in early 2016.

If you’re following the drama, the FT has a nice roundup of “key dates on the road to a possible Grexit,” the first of which is today, which the paper terms “best chance for a deal.” The next stop on a timeline that stretches until nearly the end of July: tomorrow.

US private equity giant TPG is looking to invest up to USD 1 bn in African opportunities in partnership with Sudanese bn’aire Mo Ibrahim’s Satya Capital. It would be TPG’s first venture into Africa. TheFT adds that Ibrahim is looking at deals in retail, healthcare and education. Ibrahim is best known for establishing the Mo Ibrahim prize for African leaders who don’t take the state treasury with them as they step down when their terms in office end, rather than appointing themselves Grand Exalted Defender of the Realm for Life. (A modest effort, we must admit, compared with that of Idi Amin, who eventually styled himself: “His Excellency, President for Life, Field Marshal Al Hadji Doctor Idi Amin Dada, VC, DSO, MC, Lord of All the Beasts of the Earth and Fishes of the Seas and Conqueror of the British Empire in Africa in General and Uganda in Particular”. We kid you not. For more, check out the Guardian’s ‘You call yourself the People’s Horse Breeder? The strange titles world rulers give themselves‘)

U.S. rate hike is inevitable: The U.S. Federal Reserve will raise short-term interest rates before the end of this year, but slower than previously thought as the agonizingly slow rate hike unfolds. That’s the only real takeaway from Fed Chair Janet Yellen’s presser yesterday. See more in the WSJ or Reuters, as you prefer, or Reuters’ solid roundup of key Yellen quotes.

CORRECTION: In yesterday’s issue, we misstated the name of the company establishing an agricultural export plant. It is Blumberg Grain, not Bloomberg Green.

SPOTLIGHT ON: Cabinet meeting, laws, decisions and regulations

A flurry of new regulatory changes, amendments and decisions has emerged from meetings of Cabinet and key regulatory bodies in the past two days, but the business community will be disappointed by the lack of information on key pieces of policy and / or legislation. As we finalized this morning’s edition of Enterprise, there was no news on core issues about which the Mahlab government had promised news by week’s end, including:

• Formalizing the delayed implementation of the capital gains tax
• Enshrining the reduction of the maximum tax rate to 22.5% under the as-yet not approved unified income tax law
• Executive regulations for the civil service law, which are key as they set salary levels for the 2015-16 budget year;
• The draft Suez Canal development law;
• Executive regulations of investment law;
• And last, by certainly not least, the 2015-16 budget itself, which must be approved by Cabinet and then President Abdel Fattah El Sisi in less than two weeks’ time. The document was discussed by Cabinet on Tuesday and again yesterday; no news of their discussions has emerged.

What has emerged? The Finance Ministry held a high-level meeting on Wednesday to coordinate implementation the Civil Service Law, the executive regulations for which are pending. The law sets salary levels, outlines an early retirement program, centralizes the process of recruiting public servants, provides them with new categorization and a clearer promotion system. (Read in Arabic)

More detail was forthcoming yesterday on the amendment of the Sinai Development Law, which we noted in yesterday’s edition and which aims to spur growth on the peninsula by eliminating sources of investor disputes, according to Cabinet spokesperson Hossam Al-Qawish (Read in Arabic and English). These amendments include:

• Extending the usufruct clause from 30 to 50 years, with a possibility of extension for 75 years with provision for these rights to be inherited;
• Restricting ownership of property in Sinai to full natural Egyptian citizens and Egyptian owned enterprises and organizations;
• Ownership of real estate acquired by foreigners under the previous legislation must be transferred to an Egyptian within six months, while retaining the usufruct rights. The government would then redeem the buyer and purchase the land after six months;
• Heirs of Egyptians of dual nationalities are allowed to own property, even if they are dual nationals as well;
• The president retains the right to allow foreigners to own more than 45% a of company’s shares, provided the company implements integrated development projects;
• The president may exempt cities, parts of cities, coastal areas, New Suez Canal development projects and special economic zones from the provisions of the Sinai Development Law;
• The power of the state authorities must be separate from that of the Sinai Development Authority so as to avoid conflict;
• State authorities issue all permits, licenses and contracts, while the role of the Sinai Development Authority is limited to follow-up, supervision and assistance.

Cabinet also approved a draft Movable Guarantees Law proposed by President Abdel Fattah El Sisi. The law seeks to extend avenues for credit by making it possible to grant liens on intangible future or movable assets. The law mandates EFSA with establishing the executive regulations for the law and gives the economic court system jurisdiction over any disputes arising from the law or contracts under it. (Read in Arabic)

The Egyptian Electricity Holding Company will be granted all of the resources it may require to fulfill its and its local partners’ contractual obligations to Siemens in regards to three power plants producing 14.4 GW in Beni Suef, Burollos and the new administrative capital. These include providing the allotted natural gas supplies of 22 mn m3 per day for each site. The government also approved allocating land on which to dump waste cement and other toxic waste. (Read in Arabic)

The Legislative Reform Committee met on Wednesday to review draft laws and amendments proposed by the Office of the President, Al Shorouk reports. Transitional Justice Minister Ibrahim El-Heneidi, who chairs the committee, offered little in the way of detail. Among the legislation discussed:

• Amendments to the Prisons Administration Law
• Approving a draft “Private security of facilities and money” law
• Approving a draft Nature Reserves Law
• Approving amendments to the Antiquities Protection law
• Approving a draft Youth Law
• Approving a draft Sports Law

On Tuesday, El-Heneidi said the committee agreed to reduce the number of parliamentary constituencies in the elections law from 205 from 206, in line with the view of the State Council, as reported by Ahram Online.

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A MESSAGE FROM PHAROS HOLDING

Alex Containers Beats Expectations with Impressive Set of Results in 11M FY15

Alexandria Containers and Cargo Handling recorded a net profit of EGP 775.1 mn in the 11 months ending May 2015, an impressive 64.2% y-o-y surge, mainly on the back of improvements in core operations and partially due to capital and FX Gains. The firm handled 932,559 containers at an average revenue of EGP 1,203 per container during the period, showing volume and revenue growth of 14.8% and 22.8% respectively and surpassing initial projections.

According to Pharos Research, the company is trading at an exceptionally low earnings multiple of 6.7x – based on 11M FY15 earnings and Tuesday’s closing price. As a result, Pharos believes a material upgrade in the company’s FV estimate is warranted. For more details click here.
***

EGYPT IN THE NEWS

The lead story on Egypt in the international press continues to be reaction to the death sentence handed to former president Mohamed Morsi and other members of the Muslim Brotherhood. That story seems on the verge of being supplanted, though, by a well-reported AP story by Sarah El Deeb headlined ‘Secret police detentions of activists on the rise in Egypt.’ The story was making its way across major U.S. news sites at time of dispatch.

Emad Shahin published on Tuesday in The Conversation: You think there is no alternative to Sisi’s regime in Egypt? Think again. His thesis: “There are plenty of public figures in Egyptian jails or in foreign exile that are capable of forming governments and providing an alternative to Sisi’s regime. Some important names, including Mohamed ElBaradei, Ayman Nour, Bassem Ouda, Mohamed Mahsoub, Mohamed El-Beltagi, Abul El Ela Madi, Isam Sultan, and Ahmed Maher, among others, immediately come to mind.”

In his weekly column on Egyptian economic affairs for the UAE’s The National, veteran finance writer Patrick Werr veers into history, looking for historical parallels one would not want to see occur between the comingAugust inauguration of the New Suez Canal and the 1869 opening of the original passage: “Within 13 years of the first opening, the government was bankrupt, its ruler had been deposed and, finally, a foreign army invaded and conquered the nation.”

WORTH READING

Dictatorships and Obama Standards: Congressman Dana Rohrabacher (R) and chairman of the House Foreign Affairs Subcommittee on Europe, Eurasia and Emerging Threats, published an op-ed in the Wall Street Journal on Wednesday calling on US President Obama to support President Abdel Fattah El Sisi: “The elevation of Mr. Sisi has to be seen as a historic confrontation that gave Egypt and perhaps the whole Middle East a chance to avert the calamity of radical Islamic dictatorship.” (Read, paywall)

How a death sentence in Egypt feeds paranoia in Turkey: Why is Erdogan obsessed with Egypt? One of the obvious reasons that Ishaan Tharoor argues in the Washington Post is that Erdogan fears Morsi’s fate, or at least, plays up those fears in his rhetoric: “Fear-mongering over foreign and domestic threats inflamed the AKP’s election campaign last month, with pro-AKP newspapers blaring headlines that warned of a “crusader alliance” plotting Turkey’s downfall. There was an implication that, just as the West and its regional proxies had tacitly allowed the coup against Morsi, they would now conspire to undermine the AKP’s position of dominance.” (Read)

WORTH WATCHING

Some of our readership may rise up in disagreement, but there is a real argument to be made for cultural stagnation facing mainstream Egyptian comedy in terms of film and television. A large part of this is that everything is referential — especially to about three plays in particular (Egyptian readers will be able to list them off without us ever mentioning their titles), and that referential humor in Egypt (both on and off screen) is largely made up of people simply retelling each other scenes from old plays or old movies without building anything upon them, in pretty much the same manner as the late Chris Farley in the SNL skit: The Chris Farley Show.

Chris Farley: “Remember when you were doing your movie, and Mia Farrow was watching, and then you came down from the screen and talked to her. And you were in black and white on the screen but when you talked to her you were in color?”

Jeff Daniels: “Yeah, what about it?”

Farley: “… You remember that?” (Watch, running time: 4:49)

DIPLOMACY

Rumored 5-year truce between Hamas and Israel in the works? Deal said to include possible seaport for Gaza: There have been a number of regional diplomatic moves in the region over the past few weeks that don’t immediately lend themselves to meaning on their own, but when put into the context of recent reports that Hamas and Israel are holding indirect talks through intermediaries including Egypt, Qatar and Turkey, these events paint a larger picture.

Reuters notes that a factor that could be contributing as an impetus for talks is the recent emergence of a Daesh offshoot in Gaza that is opposed to both Hamas and Israel and has launched rocket attacks into Israel in recent weeks. Nothing can be confirmed with certainty as to the possibility of a deal being clinched, especially with Wednesday’s news that the Palestinian unity government was about to dissolved (again? It’s surprising to learn that it was still around). Another possible spoiler to any such deal is news that Mahmoud Abbas was caught off-guard upon learning of the alleged indirect talks, but the brief timeline we’ve assembled below points to how a possible deal could be coming together:

6 June: Egypt court annuls previous ruling designating Hamas as a terrorist organization
8 June: Tony Blair arrives in Cairo to discuss regional issues
13 June: Egypt opens Rafah crossing, allows first commercial shipment into Gaza since 2007
14 June: Hamas leader Moussa Abu Marzouq leaves Cairo through the Rafah crossing for Doha
15 June: Egypt extends Rafah crossing into Gaza for two additional days
16 June: AFP cites an unnamed Israeli source saying indirect talks are ongoing for a long truce
16 June: Israel eases travel restrictions on Gaza in place since the second intifada

You could read the call President Abdel Fattah El Sisi received on the occasion of Ramadan from the emir of Qatar in the context of this initiative. Or you could see it as two-faced pandering after the statelet  — not known for its love of “interference” in how it runs its domestic slave-labor camps — called on Wednesday for the release of former President Mohamed Morsi, with the official Qatar News Agency saying it had “deep concerns” and noting that “Doha adds its voice to the countries calling for the verdict to be quashed and Morsi released.”

El Sisi also received a call on the occasion of the Holy Month from Mohamed Bin Zayed Al Nahyan, the crown prince of Abu Dhabi.

Also yesterday, El Sisi had his second telephone call in as many weeks with Cypriot President Nicos Anastasiades. The two discussed “engaging at the European level to work toward a settlement to the Palestinian issue,” according to a very brief readout circulated by Ittihadiya.

For further reading on the possible Hamas-Egypt-Israel talks, see the analysis pieces put out byReuters and The Jerusalem Post.

Mahlab tasked Environment Minister Mohamed Fahmy with forming and heading up a Committee charged with establishing a unified African vision and strategy to combat climate change in coordination with the African Committee on Climate Change and the African Environment Ministers Committee. Fahmy’s committee, which include government officials from relevant ministries, will then translate these efforts into a unified continental policy. (Read in Arabic)

President Abdel Fattah El Sisi and Prime Minister Ibrahim Mahlab met with Lebanese PM Tammam Salam to discuss regional cooperation. A statement from the cabinet said the President reiterated Egypt’s commitment to preserving Lebanon’s security; Salam is looking to deepen ties in tourism and energy. The meeting is apparently of some importance to the government: It occupies two boxes on the digital edition of Al-Ahram’s homepage, covering both Prime Minister Ibrahim Mahlab‘s views as well as those of El Sisi on the subject.

Cameron invites El Sisi for tea. Kim Darroch, the veteran diplomat turned national security advisor to British Prime Minister David Cameron, was back at Ittihadiya yesterday to invite the president to visit the United Kingdom. El Sisi and Darroch also discussed deepening cooperation on files including Mideast security and the war on terror, according to a meeting readout provided to the local press by Ittihadiya. The presidency did not suggest when El Sisi might visit the UK. Also on the agenda at the Darroch meeting — at which National Security Advisor Fayza Aboul Naga was present — was support for the Libyan National Army.

ENERGY

Axens to provide technologies for the production of high octane gasoline in Upper Egypt
Axens press release | 16 June 2015
In an agreement originally announced back on 30 March, Assiut Oil Refining Company (ASORC) selected Axens to “supply technologies for its project of refinery upgrading, which consist of a new complex for the production of high octane gasoline. This project aims to satisfying domestic market needs for high quality gasoline.” The new statement confirms that the capacity of the project is 660,000 tons per year of naphtha processed. (Read)

ABB to sign six agreements for transformer stations
Al Mal | 17 June 2015
ABB announced it is going to sign six agreements with the Egyptian Electricity Transport Company to build transformer stations. In total, the projects are expected to cost USD 20 mn and will be self-financed, ABB said. The company is also in talks with 13 companies operating in solar energy and others operating under the new feed-in-tariff agreement, to deliver them ABB products. (Read in Arabic)

Government running security checks on renewable energy companies
Al Borsa | 17 June 2015
The government is running security checks on companies seeking to operate in Egypt’s renewable energy sector, sources told Al Borsa. Passing a security check is one of the requirements to allow foreign companies entry to Egypt. The sources said that security authorities have already barred the Electricity Ministry from dealing with two companies. (Read in Arabic)

Alstom offers to invest USD 700 mn in power stations
Al Mal | 17 June 2015
Alstom is offering to invest USD 700 mn in power stations with a capacity of 1,000 MW in Egypt. A source said the offer was discussed between the Electricity Minister and the French business delegation that visited Egypt. The source added that the delegation had submitted queries about Egypt’s nuclear power plans. (Read in Arabic)

Siemens requests letters of credit worth EUR 1.2 bn
Amwal Al Ghad | 17 June 2015
German industrial group Siemens are seeking EUR 1.2 bn in letters of credit in order to finance establishing three power plants in Kafr El Sheikh, Beni Suef, and the new administrative capital, according to sources speaking to Amwal Al Ghad. Each power plant is capable of outputting 4,400 MW of power. Egypt’s Minister of Electricity Mohamed Shaker credited Siemens for their role in the emergency power plan in the upcoming phase. Shaker added that the ministry was preparing to sign an MoU with Siemens to boost future cooperation. (Read in Arabic)

EETC begins operating four new transformers
Al Borsa | 17 June 2015
The Egyptian Electricity Transport Company announced the beginning of operations at four transformer stations. The stations are in Upper Egypt, Cairo, and the Suez Canal area. Four other transformers will be built to respond to the increases in demand. (Read in Arabic)

GE increases Damietta Power Plants production capacity by 250 MW
Al Mal | 17 June 2015
General Electric has completed its work on two 125 MW electrical units which will be connected to the Damietta Power Plant before the end of June, increasing the power plants production capacity by 250 MW. The two electrical units comprise the first half of GE’s USD 350 mn project to deliver four electrical units to the Damietta Power Station. This project is part of the government’s electricity emergency plan for 2015. (Read in Arabic)

NREA and CTIP set to ink MOU for 50 MW solar energy project
Al Mal | 17 June 2015
Egypt’s New & Renewable Energies Authority (NREA) will sign an MOU with Italy’s CTIP for the establishment of 50 MW solar energy project, said authority President Mohamed Sobky. The estimated CAPEX of the project is USD 75 mn, added the president. CTIP will be allocated a square kilometer of land for the project. (Read in Arabic)

INFRASTRUCTURE

Government to establish Irrigation and Drainage Holding Company
Al Mal | 17 June 2015
Prime Minister Ibrahim Mehleb ordered the establishment of an irrigation and drainage holding company to be based in Cairo and is subject to the public sector companies law number 203 of year 1991. The holding company is to operate as an umbrella for the Egyptian Dredging Company, the Egyptian Company for Irrigation, Drainage and Civil Construction, and the Irrigation Public Works company. The company will be responsible for administering and maintaining irrigation canals, drainage installations and networks. The holding company will also be in charge of contracting, partnering and allocating works, with the private sector, in effect turning it into a public works authority with a specific brief on irrigation and drainage. (Read in Arabic)

Arab Contractors to complete EGP 450 mn expansion of Ain Shams sewage plant
Al Borsa | 17 June 2015
The Arab Contractors are set to complete an EGP 450 mn expansion of the Ain Shams sewage plant within days, according to Housing Minister Mostafa Madbouly. The expansion, which increased the capacity of the plant from 300,000 cubic meters per day to 600,000 cubic meters per day. The expansion will be completed three months before its due date, and will service 1.8 mn people in the areas of Heliopolis, Ain Shams, El Ameriyaa, El Marg and El Matariya. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

Supplies Minister, Blumberg Grain execs visit the Shouna Development Project site
PR Newswire | 16 June 2015
Supplies Minister Khaled Hanafy and executives from Blumberg Grain held an official visit to the first site of the Shouna Development Project. According to a press release, “the Shouna Development Project will see the implementation of the Middle East and North Africa’s largest integrated food security network for grain storage” to reduce post-harvest losses. The first stage of the project will modernize 105 shouna that are expected to save USD 200 mn annually. A second phase of the project would see an additional 207 Shouna modernized, bringing the total up to 300 sites. (Read)

MANUFACTURING

Cabinet to approve final mechanisms of cement licenses
Al Borsa | 17 June 2015
The meeting between Minister of Trade and Industry and the Industrial Development Authority (IDA) is set to decide the final proceedings of issuing the cement licenses. The IDA is looking to issue 14-16 licenses with an annual output rate of 22 mn tons, according to Ismael Gaber, head of the IDA. The price of the license will be determined in the meeting. Gaber added that the strategic plan the state is following involves increasing the production of cement to 35 mn tons by 2020. (Read in Arabic)

HEALTH & EDUCATION

Insurance Federation considers signing cooperation protocols with MoH
Al Mal | 17 May 2015
The Insurance Federation of Egypt is considering signing a Protocol for Cooperation agreement with the Ministry of Health, whereby the ministry will provide insurance companies with autopsy and cause of death reports. According to Hassan Abdel Baky of Misr Insurance, the move will facilitate claims investigations and allow insurance providers to make accurate assessments on payouts. The proposed deal will open hospital records to claims investigators, a development about which any reasonable person should have concerns on privacy grounds if such access isn’t specified in the original policy agreed to by the deceased. (Read in Arabic)

EU Funds school nutrition program
Al Mal | 17 June 2015
The Ambassador of the European Union (EU) and the United Nations World Food Program (WFP) Representative in Egypt made a field trip to Beni Suef to see firsthand the effects their joint school nutrition program. The project encourages provides 100,000 former child laborers with a daily nutritious snack in class as well as take-home food rations for their families in order to encourage their attendance in local schools instead of working. The EUR 60 mn program was funded by the EU. (Read in Arabic and English)

REAL ESTATE & HOUSING

Cairo Contracting & Real Estate Investment Co seeks EGP 13 mn in dues
Amwal Al Ghad | 17 June 2015
The CCREI is in negotiations with several government bodies over late financial dues worth EGP 13 mn, said Ahmed Moustafa, Chairman of CCREI. He added that his company was working closely with the Egyptian Federation for Construction & Building Contractors to standardize their paperwork and interactions with the government bodies. He also added that the company was studying the merger offer put forth by the National Co. for Construction & Development in order to remain competitive in the local market.

TOURISM

Minimum rate on hotel rooms by 2016
Al Borsa | 17 June 2015
The Ministry of Tourism met with hotel and resort owners to establish a mechanism to apply a minimum rate on hotel rooms. The ministry expects the application to be complete by 2016 because of currents hotel booking obligations. The decision to place a minimum rate on hotel rooms by tourism minister Khalid Ramy comes after reports of slashed prices at hotels causing a down spiral of decreased service levels that mimic the descending prices. (Read in Arabic)

TELECOMS & ICT

MCIT still mediating between ISPs and TE over cost of using TE’s infrastructure
Al Borsa | 17 June 2015
Telecom Egypt and MCIT’s Universal Service Fund could split the cost of lowering the price internet service providers use to access TE’s internet infrastructure. ISPs had said they were looking for a 75% rate cut, a demand TE soundly refused. MCIT is studying whether to have TE and MCIT split the cost of a 50% rate cut for a six-month period until Telecom Egypt and ISPs reach a long-term agreement. (Read in Arabic)

Raya to increase capital to EGP 504.6 mn
EGX Press Release | 17 June 2015
Raya Holding decided to increase its capital by EGP 84.1 mn to EGP 504.6 mn in an EGM. The increase will be done through issuing bonus shares to existing shareholders at a book value of EGP 5 per share. For every five shares held, Raya stockholders will be given an extra share. (Read in Arabic)

BANKING & FINANCE

EFSA calls on IOSCO to provide global cross-listing requirements
Al Borsa | 17 June 2015
The Egyptian Financial Supervisory Authority (EFSA) has requested that the International Organization of Securities Commissions (IOSCO) issue international guidelines pertaining to the cross listing of companies shares across equity markets. Doing so, according to the EFSA, will minimize differences in listing requirements between securities markets, thereby increasing the cross-listing activities of companies. In related new, the EFSA expressed its reservation with regard to a suggestion that capital market supervisory authorities increase cooperation on matter related to the questioning interrogation of individuals suspected of illicit activity.(Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

10,000 head of cattle imported from Uruguay and Ethiopia
Al Mal | 17 June 2015
10,000 head of cattle are being imported from Uruguay and Ethiopia within ten days. The shipments are all being made to the private sector. The veterinary quarantine services authority said stocks for Ramadan are already present and existing stocks amount to 68 thousand head of cattle. Egypt is also nearing agreements to import Somali cattle. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Lack of transparency on national budget is undemocratic, says Sadat
Al Mal | 17 June 2015
The national budget currently in its final phases of discussion in the Cabinet should have been reviewed by financial experts in the political parties, says Mohamed Anwar El Sadat, president of the Restoration and Development Party. (Read in Arabic)

ON YOUR WAY OUT

The Cairo Criminal Court acquitted Anas El Fiqi, the former minister of information, and Abdel Latif Meniawy, the head of the news sector on state TV, of charges they squandered public funds. El Fiqi’s lawyer, Tarek Abdel Aziz, says the charges were “of the previous prosecutor general’s making.” In other Maspero news, former ERTU security chief Nabil Ismail was acquitted of charges he destroyed sensitive footage of the 25 January Revolution.

Price gouge, sell subsidized goods out the back door or otherwise mess with the poor during Ramadan, and you’ll have Local Development Minister Adel Labib to answer to. The former general has ordered his ministry to establish a 24-hour operations room to take complaints from citizens nationwide to clamp down on the black market, “fight the greed of merchants and identify mosques at which taraweeh prayers will be held,” Al-Masry Al-Youm reports.

Policeman killed, 3 recruits injured in Arish: One of several bombs that went off in the north Sinai city of Arish on Wednesday resulted in the death of a police officer and the injuries of three recruits. The roadside bomb was detonated remotely when the police’s armored vehicle was passing, Egypt Independent reports.

In regards to the issue of not arresting Sudan’s President Omar Al Bashir, South Africa made it clear that “Africa comes first, and legal niceties such as the authority of domestic courts or international statutes a distant second,” Ed Cropley writes for Reuters. A Western diplomat told the newswire that moral foreign policy is gone and South Africa was prioritising stability over values.

Former Turkish President Suleyman Demiral died at age 90 of heart failure in Ankara’s Guven Hospital.

Vanity Fair has a Buzzfeedish piece titled ‘5 Amazing Stories About Ancient Egypt That Deserve to Be Movies,’ all of which sound horrible, except for a movie about Hatshepsut and we’d probably watch their idea for Law & Order: Ancient Egypt.

BY THE NUMBERS

USD CBE auction (Tuesday, 16 June): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Tuesday, 16 June): 7.68 (unchanged from Sunday, 07 June, Reuters)

EGX30 (Wednesday): 8,556.55 (+0.01%)
Turnover: EGP 418.4 mn (12% below the 90-day average)

WTI: USD 59.74 (-0.30%)
Brent: USD 63.73 (-0.22%)

TASI: 9,543.3 (flat)
ADX: 4,580.1 (+0.8%)
DFM: 4,088.0 (+0.2%)
KSE Weighted Index: 423.8 (-0.2%)
QE: 11,884.3 (+0.1%)
MSM: 6,468.5 (-0.4%)