TL;DR

Sawiris’ bid for CI Capital sets off bidding war, shakeup in the industry (What We’re Tracking Today)

Central Bank of Egypt defers interest rate decision to Christmas Eve (Speed Round)

Egypt lands fresh World Bank financing, bringing total aid and investment pledges in recent weeks from multiple sources to north of USD 20 bn (Speed Round)

On-again, off-again cement licenses are on-again as Salman says the state will issue 10-15 licenses to plug expected production gap (Speed Round)

U.S. Senate leaves military aid to Egypt in place (Speed Round)

UAE hypermarket operator Lulu to invest EGP 3 bn in Egypt over the next two years opening 10 stores (Basic Materials + Commodities)

Sawiris says his party was prevented from winning extra seats in Parliament to avoid forming strong opposition (Egypt Politics + Economics)

By the Numbers + CBE data confirms NIR “makeup” strategy

WHAT WE’RE TRACKING TODAY

Three stories will dominate discussion around the water cooler this morning: Interest rates (including the U.S. Fed’s rate hike for the first time since 2006 and a decision by the Central Bank of Egypt’s MPC to defer an interest rate decision to Christmas Eve); fresh loans from the World Bank that would appear to bring total financing and aid landed in the past couple of weeks to north of USD 20 bn; and a shakeup in the investment banking industry that’s still unfolding. The investment banking story is below, while we discuss loans and interest rates in today’s Speed Round.

Grab the popcorn, ladies and gentlemen: All [redacted] has broken loose in the finance industry. CIB’s board of directors agreed on Thursday to enter talks to sell investment banking subsidiary CI Capital to Naguib Sawiris’ Orascom Telecom Media and Technology Holding (OTMT), authorizing the start of due diligence on what is believed to be a transaction in the EGP 1 bn range. In a bourse statement, CIB said discussions between the two parties are still at a preliminary stage. OTMT told the EGX it aims to merge CI Capital with its most recent acquisition, Beltone. Beltone Financial is on board with the transaction, and told the EGX it fully supports OTMT’s bid for CI. CI Capital CEO Mahmoud Attalla told Reuters he expects due diligence to take a month and a half and that a final agreement could be reached in 1Q2016.

Despite the EGX disclosures, Al Ahram incorrectly reported that the acquisition was completed on Thursday.

Rasmala is planning a counter-offer: London-based Rasmala is preparing a counter-offer. The outfit’s board of directors reportedly met on Thursday to discuss outbidding Sawiris and is expected to table an offer today. Sources reportedly told Al Borsa that EIIB “will go to whatever lengths necessary to acquire CI Capital.” Al Borsa includes a comment from a source at CIB who says the offer price alone won’t determine the winner of the brewing bidding war. Future plans for CI Capital, plans to expand in the market and the background of the acquiring party will all be factors in the decision.

Who is Rasmala? Rasmala describes itself as an asset management and finance company and has only an asset management presence in Egypt. If offers asset management and investment banking services out of Dubai (at the DIFC) and investment banking in Oman, according to its website. Its management team is headed by Anwar Abu Sbaitan, a veteran of Merrill Lynch. Rasmala was known as the European Islamic Investment Bank before rebranding in November 2015 and shortly thereafter appointing a new chief financial officer, all while somewhat vaguely mentioning that it would release more information on the rebranding before year’s end.

A CI-Beltone lash-up appears to make sense for both parties — if they can get regulatory approval. Beltone brings a strong asset management franchise to the table and enough market share in brokerage to vault the merged entity past EFG Hermes in market share of executions here in Egypt. In November, EFG Hermes was the top-ranked broker in Egypt with a 22.9% market share; CI Capital was ranked second with 19.9%, while Beltone was in third place with a 5.7% share. On the asset management front, a combined CI-Beltone would hold about EGP 40 bn in AUM, compared with the equivalent of roughly EGP 23 bn for EFG Hermes.

Al Borsa has an exceptionally long looking at how EFG Hermes and CI-Beltone would stack up; the story is particularly notable for a quote from Atalla saying that the merged entity would expand to Saudi Arabia, Qatar, the UAE and Oman.

That’s not all: Sources are telling Al Mal that Pharos intends on making a move to acquire a “top 10” brokerage as well as an asset management firm. The source added that Pharos has recently explored acquiring a number of potential targets. Meanwhile, we’re hearing persistent rumbling that the nation’s top independent M&A shop is also a potential acquisition target for Sawiris, who we’re told is not just quarterbacking the M&A strategy for the industry rollup, but also deeply involved in hiring decisions.

Moves- Word on the street is that Pharos research chief Hany Genena is leaving to become head of equities at Beltone, not head of research as Al-Borsa reported on Thursday. Radwa El-Swaify continues to be head of research at the investment bank.

WHAT WE’RE TRACKING THIS WEEK

Egypt will release the name of the company appointed to review security at Egypt’s airports on Tuesday.

Wednesday is a national holiday in Egypt in observance of the Prophet Muhammad’s Birthday. Western Christmas is on Friday, so you can expect your European and North American to be off from mid-day on Thursday at the latest.

The CBE’s Monetary Policy Committee reconvenes on Thursday after having not reached a decision on interest rates last week. (More on this in Speed Round, below._

ON THE HORIZON

Saudi Arabia’s King Salman is expected to visit Egypt “soon,” Saudi Ambassador Ahmad Kattan said at a press conference.

President Abdel Fattah El Sisi is still to announce the 28 MPs he is constitutionally mandated to appoint to the House of Representatives. Parliament is expected to convene for the first time in three years by the end of December.

LAST NIGHT’S TALK SHOWS

The week’s economic news led CBC’s “Hona Al Assema” as host Lamis El Hadidy took note of the USD 500 mn loan from the African Development Bank (AfDB) and some USD 11 bn in World Bank funding for Egypt. El Hadidy said: “Are we going to continue to be an economy that relies on loans from one side and aid from the Gulf countries? This is a question the political leadership should answer.”

El Hadidy displayed statistics that showed that Egypt has received nearly USD 30 bn from loans and grants with foreign debt reaching just over USD 46 bn since 2013. “We have two choices: A reform program that will tighten things up, or to to stimulate investment,” she said, adding, “The third path we’re taking right now is not working. We need to fix investors’ problems. The president can’t meet every investor himself to fix things.”

El Hadidy then briefly discussed the ongoing war of words between parties in parliament as Naguib Sawiris described the Support the State Coalition as “sheep following the Morshed [supreme guide]” — terms that recall the time of the Ikhwan. Alaa Abdel Monem, a newly elected PM, phoned into the program and said: “We will file a lawsuit against Sawiris and his insulting comments.” Emad Gad of Al Ahram Center for Political & Strategic Studies, who has previously worked for Sawiris’ media empire, phoned-in and criticized the Support Egypt Coalition, claiming that it is “peculiar” that the coalition is acting like a party.

Amr Adeeb dedicated most Orbit’s “Al Qahera Al Youm” to name the ‘person of the year’: The Egyptian martyr. “We’re the only state in the world that chooses its president as the ‘person of the year every single year,” Adeeb said. “I do not see President Abdel Fattah El Sisi as the person of the year; I see that 2015 is the year of the Egyptian martyr.” On a separate note, Adeeb briefly commented on Esraa Al Taweel’s release from prison today: “A merciful judge decided that Esraa Al Taweel should go home,” Adeeb said.

The young activist has a bullet lodged in her spine from being shot in the back while photographing protests in 2014. The injury first left her in a wheelchair, but through physiotherapy she had progressed to being able to walk with the aid of crutches. After being forcibly disappeared in June and held in pretrial detention for six months, her family feared a deterioration in her health due to her reportedly being denied access to continued physiotherapy while in detention. While El Taweel was released, she is confined to house arrest, and the charges against her still stand, namely: that she is accused of plotting to assassinate a senior unnamed official.

On Al Kahera Wel Nas, Osama Kamal took note of the spat between “talk show host” Ahmed Moussa and director Khaled Youssef. Kamal said that Mortada Mansour mediated and convinced both to sit and talk it out. He then moved on to a complaint from an exporter who sells uniforms to a private security firm in the US: The man claims the Customs Authority blocked his exports, saying the uniforms were identical to an Egyptian police uniform. The head of the Customs Authority called in and said it is above his paygrade to decide if uniform exports should be resumed. When Kamal asked him jokingly “I have a pullover that looks the same, what should I do?” The head of customs authority told him, “Turn your pullover in immediately.”

** SHARE ENTERPRISE WITH A FRIEND **

Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

SPEED ROUND

World Bank scales up support for Egypt, approves at least USD 9 bn in assistance: The World Bank Group (WBG) announced it is endorsing a new Country Partnership Framework (CPF) to support Egypt worth USD 8 bn in addition to in USD 1 bn development policy finance assistance. The CPF covers the period 2015 through 2019 and includes a total of USD 8 bn of WBG financing — USD 6 bn of which will come from the International Bank for Reconstruction and Development and the rest from the International Finance Corporation. “The World Bank Group’s support is tailored to help Egypt address its economic and social challenges” and builds upon the government’s medium-term strategy, prioritising “measures to support fiscal consolidation, reorient public spending towards growth and social services, promote energy security, develop a targeted social safety net, strengthen institutional arrangements to improve service delivery in rural sanitation, and modernize public administration.” Additional funding is also in the pipeline for future years, as the World Bank’s statement on the assistance package to Egypt notes that the USD 1 bn in development policy finance is “the first in a programmatic series of three annual development finance loans to Egypt” and Egyptian policymakers have said the total development policy finance package is worth USD 3 bn.

International Cooperation Minister Sahar Nasr signed for the first USD 1 bn installment of what could be a three-year, USD 3 bn development policy finance package on Saturday. Nasr has announced on Thursday that the WBG’s Board of Executive Directors had approved a USD 3 bn facility. That announcement came at the signing of the USD 1.5 bn loan from the African Development Bank (AfDB). Al Mal says Egypt has landed aid and loans totaling USD 12 bn from the World Bank, AfDB, EU, and the GCC aid, but by our math that total is too low. We would break it down as:

• World Bank: USD 8 bn from the country partnership framework plus at least USD 1 bn in confirmed assistance in development policy finance (possibly more in the next two years), for a total of at least USD 9 bn
• African Development Bank: USD 1.5 bn loan
• Saudi Arabia: USD 8 bn in fresh investment, plus financing of oil cargoes for five years, follow-through on the USD 2 bn pledged at Sharm but not yet transferred, plus ongoing talks on either a Saudi deposit at the CBE or Saudi purchases of Egyptian debt

That’s a total of more than USD 20 bn, not including investments made by the European Bank for Reconstruction and Development, talks with Kuwait on assistance. Taken together with news that the Monetary Policy Committee did not reach a decision on interest rates this past Thursday, it’s enough to make you wonder whether our anonymous columnist was right…

---

The CBE postponed its interest rate decision to Christmas Eve. Although the Coordinating Council meeting did take place on Thursday, the Central Bank of Egypt issued a statement saying its Monetary Policy Committee decided to reconvene next Thursday. “The CBE is keen on fulfilling its mandate of price stability for the purpose of sustainable economic growth and job creation. This mandate is only achievable through full coordination and commitment on macroeconomic objectives with the government, including targets for fiscal consolidation, current account outturns and the implementation of urgent structural economic reforms,” a CBE statement said. Al Mal says this is the first time in history that the CBE delays making an interest rate decision. You might want to revisit your Christmas holiday plans now as the CBE has had a tendency to announce big moves during the holiday period as what with the devaluation in 2012-13.

The Coordinating Council’s meeting formed a policy coordination working group with representation from CBE, Finance, Trade, and Investment. It will meet this week, Al Borsa reports.

Banking community unfazed by U.S. Fed’s interest rate hike: The banking community at large downplayed the effect the US Federal Reserve raising interest rates will have on Egypt’s rates, Al Borsa reports. CI Capital’s Hany Farahat says the CBE’s interest rate decision will have far more to do with the government’s policy agenda in light of the FX crunch than with U.S. policy rates. Haitham Abdel Fettah, head of investments at the Industrial Development and Workers Bank of Egypt, doubts that CD returns will rise, saying rates here are already higher than global averages and are more costly to banks. Emirates NBD managing director Sahar Al Damaty presents a counterview, predicting that banks will raise rates, at least for USD-based loans.

GCC countries follow the Fed’s lead and hike rates: Saudi Arabia, Kuwait, and Bahrain all increased their interest rates following the move by the Federal Reserve, Bloomberg reported. Saudi Arabia, “in line with domestic and international financial market conditions,” increased its key reverse repurchase rate by 0.25% to 0.5% to match the Fed. Kuwait increased its interest rate to 2.25% and Bahrain increased its overnight deposit rate to 0.5%.

The Fed’s rate hike could threaten some African, EM businesses: Emerging market companies with USD-denominated debt and revenue in “sinking” local currencies could struggle following the Fed’s rate hike. Depreciating emerging market currencies, rising US interest rates, and a stronger USD “could create a ‘perfect storm’ of conditions to lead some emerging market companies to sell assets and others to default in 2016.” A large number of emerging market-based companies have borrowed in USD in recent years but have little to no revenue in USD. The currency mismatch “increases the likelihood of a company failing to service its debt” and also the pace of USD appreciation will dictate the ability of the companies to make their interest payments.

---

More bidders for Enjoy: UAE-based National Food Products Company has entered the bidding process for Qalaa Holdings dairy subsidiary Enjoy. Al Mal says a number of bidders presently finalising due diligence on the company, which is not presently producing. Pharos Holding is sell-side advisor on the transaction.

Fitch Ratings affirmed Egypt’s long-term foreign and local currency issuer default ratings (IDR) at ‘B’ with a stable outlook on Friday, according to a statement from Fitch, which Reuters carries in full. The decision suggests Egypt’s economy is resilient in face of global, regional and domestic challenges, said Finance Minister Hany Dimian in response to the rating.

Egypt expects to sign USD 200 mn grant from China next month -Minister: Egypt is expected to sign an agreement for a USD 200 mn grant from China during Chinese President Xi Jinping’s scheduled visit to Cairo next month, according to Minister of International Cooperation Sahar Nasr speaking to state news agency MENA, Ahram Online reported. The grant is reportedly set to go toward healthcare, infrastructure and Suez Canal development projects.
Russia will remove all restrictions on flights to Egypt “once reliable anti-terrorist measures were implemented,” President Vladimir Putin said. “As soon as we work out the mechanisms that would reliably ensure the safety of our people, we will remove all restrictions,” Putin said, according to Reuters. He added that Moscow’s conclusion that a bomb was the cause of the Metrojet plane crash does not mean that is lacked trust in the Egyptian government.

The Ismail government will issue new cement production licenses in the coming three months. Investment Minister Ashraf Salman said on Friday that Egypt will issue 10-15 production licenses to fill the market gap expected in the coming three years, according to Al Borsa. Two months ago, the IDA said the new licenses would be announced “in days.” Cement producers have been reporting a steady dip in market prices due to oversupply in the second half of this year.

Senate leaves military aid to Egypt in place: The US Senate retained the USD 1.3 bn allocated for military aid to Egypt in its FY2016 spending bill but set conditions for its release. The conditions could be waived by the Secretary of State for national security reasons, Al Monitor notes. “The final bill will require an updated assessment from Secretary Kerry on the state of democratic reform and human rights in the country before some of Egypt’s military aid can be delivered,” Cole Bockenfeld, deputy director for policy at the Project on Middle East Democracy, said. The Senate allocated larger than requested sums of aid to Tunisia and Jordan. In 2016, Tunisia is set to receive USD 142 mn whereas Jordan is getting USD 1.275 bn, 25% more than what the State Department had asked for.

From the Department of Duh: A UK government review found that membership in the Ikhwan is an indicator of extremism, Reuters reported. However, the review, which was commissioned in April 2014, said the organisation should not be banned. “Parts of the Muslim Brotherhood have a highly ambiguous relationship with violent extremism. Both as an ideology and as a network it has been a rite of passage for some individuals and groups who have gone on to engage in violence and terrorism … The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism,” Prime Minister David Cameron said. He added that the UK will continue to refuse visas to “members and associates the group who have made extremist comments.” The Ikhwan responded saying the review’s findings were politically motivated and are unacceptable. The MFA took the report and ran with it, saying it confirmed and was in line with Egypt’s stance on the Brotherhood, despite the UK not banning the group, declaring it a terrorist organization, or putting its members behind bars.

Daesh takes aim at Saudi Arabia with series of gory propaganda videos in revenge for new ‘Islamic alliance’: Daesh has released several propaganda videos vowing revenge against Saudi Arabia, the Independent reports, following its announcement of a 34-state Islamic coalition against terror, of which Egypt is a part. One video reportedly shows a man being shot dead at point blank range over allegations he was collaborating with the Saudis against the terror group, while another shows footage which purportedly shows an attack launched by Daesh on Saudi soil where a member of the terror group is shown executing his cousin in September, an attack which the Saudi interior ministry confirmed.

EGYPT IN THE NEWS

US President Barack Obama, responding to a reporter’s question on Republican criticism of his administration’s desire for regime-change in the region: “We did not depose Hosni Mubarak. [Mns] of Egyptians did because of their dissatisfaction with the corruption and authoritarianism of the regime. We had a working relationship with Mubarak. We didn’t trigger the Arab Spring, and the notion that somehow the U.S. was in a position to pull the strings on a country that is the largest in the Arab world, I think is — is mistaken. What is true is that at the point at which the choice becomes mowing down [mns] of people or trying to find some transition, we believed and I would still argue that it was more sensible for us to find a peaceful transition to the Egyptian situation.” (Read the full transcript of Obama’s end-of-year news conference here)

U.S. soldiers in Egypt face jihadist threats, deserve combat tax break -Editorial: Army Times, a publication not affiliated with the United States military, ran an editorial last week arguing that American troops serving as part of the Multinational Force & Observers (MFO) in the Sinai should receive tax breaks for serving in what the publication considers a combat zone. While the Sinai is not actually classified as a combat zone, the American troops stationed there had found a workaround by performing training exercises in the Red Sea, which does carry that classification, apparently. The editorial says that the closing of this loophole represents a misguided effort on the part of the military to cut costs when there are other, more appropriate areas from which cuts may be made.

WORTH READING

The psychology behind censorship | The third-person effect: Last week’s release by the Committee to Protect Journalists ranking Egypt as second only to China in numbers of jailed journalists demands our society’s full attention, as should its underlying drivers. PR and media professionals may already be aware of the third-person effect, but an understanding of this phenomena is something from which everyone can benefit, even if understanding alone is insufficient to overcome it. It is a strong motivating factor in the push for censorship not only in Egypt, but everywhere in the world.

First coined by sociologist W. Phillips Davison in his seminal 1983 study “The Third-Person Effect in Communication” (abstract) is a behavior observed and replicated in a number of studies whereby individuals believe they are less swayed by media messages than others. While this may seem simple, benign and perhaps obvious, it takes on a whole new dimension when that belief is held by those who have the power to censor the media. The concept has become a foundation of public opinion studies and has a number of profound implications for decision-makers in all fields.

Take an example Davison provides from World War II: “The Japanese dropped leaflets over U.S. locations in Iwo Jima, areas that had white officers and black troopers. The leaflets made statements that it was a ‘white man’s’ war, and tried to persuade blacks to give up or desert. The day after the leaflet drop, the troops pulled out, which Davison suggests could have been based on the perceptions of the white officers that black troops would desert.”

For a short and simple primer on the third-person effect, see an excerpt of David McRaney’s book You Are Not So Smart. For something more in-depth, including follow-up studies which replicated and expanded on Davison’s results, see Joan L. Conners “Understanding the Third-Person Effect” (pdf, first 15 pages).

WORTH WATCHING

Macaulay Culkin finally embraces his dark side just in time for Christmas: In what is currently the second top trending video on YouTube in the United States, Macaulay Culkin reprises his role from Home Alone in what is also a play on Culkin’s reputation as a washed-up child actor who turned to a life of partying and illegal substances. The most surprising thing to come out of this video is that Culkin actually has great comic timing. It’s too early to say if it’s a fluke or if he can manage to build on the momentum, but his talent is real. See if you can catch oblique references to the tragicomedy My Girl and Christopher Guest’s A Mighty Wind — and make sure to stick around after the credits roll. (Watch, running time: 5:11, profanity)

DIPLOMACY + FOREIGN TRADE

Saudi Arabia’s King Salman will visit Egypt “soon,” Ambassador Ahmad Kattan said (Arabic) in a press conference on Thursday. Kattan stressed on the strength of Saudi-Egyptian relations and said the Kingdom refuses any attempts to tarnish them. He also added that Saudi Arabia remains committed to supporting Egypt financially. Reuters quotes the ambassador as saying Saudi aid will help support Egypt as it moves to reform its energy subsidies.

Former Israeli FM Lieberman on Israeli rapprochement with Turkey: Turkey untrustworthy and agreement will hurt relations with Egypt, Cyprus and Greece: Former Israeli Foreign Minister Avigdor Lieberman criticized ongoing reconciliation talks between Israel and Turkey, hinted at earlier last week in comments by Erdogan and confirmed by unnamed sources at Israeli Prime Minister Benjamin Netanyahu’s office on Thursday. The talks are rumored to involve plans for the construction of a natural gas pipeline from Israel to Turkey. Lieberman said the thawing of ties with Turkey will worsen relations with Israel’s neighbors, calling the agreement “dangerous” for Israel. Lieberman said that while the agreement with Turkey “is not yet complete … the damage has already been done,” adding that the agreement “will also hurt relations with Egypt because I can’t see Erdogan waiving demands regarding Gaza, and any Turkish foothold in Gaza will come at Egypt’s expense.”

Egypt’s non-petroleum exports dropped 18.7% year-on-year in November to USD 1.4 bn, down from USD 1.7 bn last November, another indicator at the inability of exporters to source production inputs. Some sectors fared better than others, with agriculture exports growing to USD 135 mn, up from USD 120 mn last November, Al Mal reports. Trade Minister Tarek Kabil stated that this was not an indicator that government policies are failing, but that these policies need time to translate into positive outcomes.

ENERGY

Netanyahu bypasses Antitrust Authority, signs gas development agreement
Israeli Prime Minister Benjamin Netanyahu signed the natural gas development agreement, bypassing the country’s Antitrust Authority. The agreement came into effect on Thursday. Netanyahu said the agreement is part of his “vision” of an Israel where GDP per capita is USD 50,000, and for that, gas is needed. He added that a number of European countries, that he did not name, are interested in Israeli gas. (Read)

EGAS supplying full natural gas allocations to fertiliser plants -Source
Fertiliser plants are now back to receiving 100% of their natural gas allocations, a source at EGAS said. The supplies were lowered to 85% last week due to “pressure on the natural gas grid,” the source noted. A source at AlexFert said the company has been receiving its complete gas allocations since Monday after having been forced to halt operations for eight months. (Read in Arabic)

INFRASTRUCTURE

Cairo to spend EGP 1.5 bn building parking garages in Heliopolis and Abbassiya
The Cairo Governorate is planning to spend nearly EGP 1.5 bn in a project to develop two underground parking garages in the districts of Heliopolis and Abbassiya. A source said an unnamed foreign entity will provide the funding and that the governorate is finalising studies for the project. It aims to accelerate the development of the two garages as part of a plan to reduce traffic congestion in Cairo. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

UAE’s Lulu opens New Cairo branch, will invest EGP 3 bn in Egypt over the next two years.
Lulu, which owns 118 hypermarkets in the region, opened a new 170,000 square feet branch in New Cairo yesterday. Supply Minister Khalid Hanafy said the retailer will open another 10 branches in Egypt at a total investment cost of EGP 3 bn investment. Yusuff Ali, chairman of Lulu Group said that Lulu will also work on exporting Egyptian agricultural products to the Gulf countries, saying, “Currently we are exporting EGP 50 mn and this will go up to EGP 150 mn next year.” Lulu will focus on exporting fruit, vegetables, meat, fish, cheese and pickles. The hypermarket will set up a food processing plants to boost local food exports. The chain opened a store in Nasr City in 2010, but closed the outlet for undisclosed reasons.

FEI calls for a 20% increase in custom duties on sugar imports
The Federation of Egyptian Industries (FEI) is calling for the government to raise custom duties on imported raw sugar to 20%, a measure of protection aimed at protecting the domestic beet and sugarcane growers. The move will also shield domestic producers of sugar from losses which the FEI claim are caused by “unfair” competition with importers, according to a statement by FEI head Mohamed El Sewedy. Local manufacturers pledged to keep the prices of sugar unchanged if the customs duties were raised. Hassan Kamel, CEO of the Egyptian Sugar & Integrated Industries Co. (ESIIC) posited that since the government holds an 80% market share, it can easily guard against inflation if customs duties were increased. (Read in Arabic)

HEALTH + EDUCATION

Bayer begins marketing birth control pills in Egypt
Bayer Healthcare began marketing its Yaz birth control pills in Egypt with a launch event held Thursday. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Cairo Airport Terminal 2 expansion set for completion in 2H2016, to increase capacity by 8 mn passengers per year
The USD 436 mn Terminal 2 expansion at the Cairo Airport, of which USD 280 mn is funded by the World Bank and on which work began in 2010, is set to see completion by the middle of next year, the World Bank noted in a progress report / press release. The expansion will double the number of departure gates to 14, and will accommodate an increase of 8 mn passengers per year, to bring its total capacity to 26 mn passengers per year.

Bavarian Auto targets assembling 10k Brilliance cars in Egypt in 2016
Bavarian Auto Group (BAG) reached an agreement with Brilliance to assemble 10,000 vehicles in its Sixth of October plant in 2016, Al Borsa reported. BAG will be looking to expand its assembly plans to 20,000 in 2017, Khaled Saad, the manager at Brilliance Bavarian Automotive. He added that the brand’s prices are expected to drop significantly and become more competitive in the market for Chinese-manufactured cars. (Read in Arabic)

Customs Authority refusing to release VW, Audi models, agent says
The Customs Authority has been holding a number of VW and Audi vehicles for over two months, Karim El Naggar, the CEO of Egyptian Automotive & Trading Co, the two brands’ agent in Egypt, said. The Authority is questioning the authenticity of the agents’ documents, despite numerous confirmations from VW itself, El Naggar added. Audi’s sales manager in Egypt said over 100 vehicles are being held at ports in Alexandria. The newspaper notes that the Customs Authority is not releasing a number of imported vehicles on concerns that importers are “rigging” pricing to avoid paying duties. (Read in Arabic)

BANKING + FINANCE

HSBC Egypt finalising capital increase soon, CEO says
HSBC Egypt is finalising a capital increase financed using the bank’s retained earnings, CEO Jacques-Emmanuel Blanchet said. After injecting around EGP 717 mn, HSBC’s paid-in capital is expected to increase to EGP 2.795 bn. The bank is aiming to expand its credit portfolio for corporate and retail clients as well as support megaprojects being implemented in Egypt. HSBC Egypt also announced its will cooperate with the Misr El Kheir foundation to build 350 schools. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

High Elections Committee announces final results of parliamentary elections
The composition of the incoming House of Representatives reportedly consists of 57% of individual candidates and 43% party-affiliated candidates, according to the High Elections Committee during a press conference on Friday, Ahram Online reported. As we previously noted, the lead party was Free Egyptians with 65 members elected, followed by Mostaqbal Watan with 50 MPs.

Sawiris says Free Egyptians party targeted by unnamed “agencies”
Naguib Sawiris accuses unnamed “agencies” of blocking his Free Egyptians party from winning 100 seats and forming a more significant bench in the House of Representatives. “I believe that happened to prevent the party from forming a significant block in the house of representatives, and in my opinion, this is a big mistake that can destroy the democratic process,” Sawiris told Youm7. In a candid talk with the daily, Sawiris also attacked both Al Wafd and the Fi Hob Masr block. Arabic.

Former intelligence officer named head of pro-Sisi parliamentary bloc
The “For Supporting Egypt” pro-government parliamentary bloc has appointed former intelligence officer Sameh Saif El Yazel as their head following a meeting of the group on Friday. The group’s membership is largely made up of those same MPs who ran under the For Love of Egypt electoral bloc during elections, and seeks to “act as a back-up force for President El-Sisi,” according to El Yazel in a press conference earlier this month.

Saudi investments to be delivered over three years, will target infrastructure
Saudi Arabia’s USD 8 bn in planned investments in Egypt will arrive over the next three years and will focus on infrastructure projects, Abdallah bin Mahfouz, the deputy head of the Saudi-Egyptian Business Council told Reuters. He added that the investment will also be directed towards some logistical, industrial, and commercial projects that were announced at the EEDC. “The investments that the Saudi (king) ordered are all new government investments,” bin Mahfouz said. (Read)

NATIONAL SECURITY

Shakeup at the National Security Agency: Major General Mohamed Sharawy is replacing Major General Salah Hegazy as the head of the National Security Agency, Al Ahram reported on Saturday, along with a number of new security appointments.

Egypt plans to purchase two French-manufactured military satellites at a cost of about USD 1 bn -La Tribune: Egypt is rumored to be in talks to purchase two military satellites from Thales Alenia Space, Ahram Online reported citing a report in French newspaper La Tribune. The paper said that Minister of Military Production Brigadier-General Mohamed Saeed El-Assar is engaged in talks for the purchase of the satellites, and that an agreement could be signed either at the end of the month or early next year.

Minister of Defense Sedqi Sobhi meets with Canadian counterpart: Minister of Defense Sedqi Sobhi met with his Canadian counterpart Harjit Sajjan on Saturday, according to a statement in Arabic from the military and as reported by Ahram Online. The minister reportedly discussed terrorism and increasing military cooperation.

ON YOUR WAY OUT

The EBRD signed off to its first project to support the refugee crisis in the MENA region by providing a USD 14 mn loan to the Water Authority of Jordan to upgrade the sewage network.

The Finance Ministry is planning two Treasury bond issuances totaling USD 22 bn, as part of its strategy to reduce public debt to 80-85% of GDP by 2020, Al Borsa reports. These bond issuances will be USD 12 bn and USD 10 bn and will be released intermittently over the coming period. We should be looking at a USD 1.5-3 bn per year issuance over the coming three years.

The Ministry of Electricity will sign EGP 10 bn loan agreement with a consortium of banks today. The loan will be used to build the three electricity stations in Burullus, the new administrative capital, and Beni Suef, according to Al-Mal. The consortium of banks consists of the National Bank of Egypt, Banque Misr, CIB, QNB and Arab African International Bank, and each will pay an equal share of EGP 1.59 bn. National Bank of Abu Dhabi and Ahli United bank each will pay EGP 500 mn, and Bank of Alexandria, Audi Bank and Egyptian Gulf Bank will each pay EGP 350 mn.

CALENDAR

23 December (Wednesday): Prophet Muhammad’s Birthday (National Holiday)

18-19 January 2016 (Monday-Tuesday): Efma’s Banks of the Future in the Middle East conference, Dusit Thani Hotel, Dubai. Register online here.

18-21 January 2016 (Monday-Thursday): World Future Energy Summit, Abu Dhabi National Exhibition Centre, UAE.

21 January 2016 (Thursday): Egypt Energy Forum at the World Future Energy Summit, Abu Dhabi National Exhibition Centre, UAE. You can download the draft agenda here.

20-23 January 2016 (Wednesday-Saturday) World Economic Forum Annual Meeting: Mastering the Fourth Industrial Revolution, Davos.

26-27 January 2016 (Tuesday-Wednesday): U.S. Federal Reserve’s Federal Open Market Committee meets.

27-28 January 2016 (Wednesday-Thursday): Egypt Transport Infrastructure Summit, Cairo.

26-27 January 2016 (Tuesday-Wednesday): U.S. Federal Reserve’s Federal Open Market Committee meets. Fed chair will not hold press conference.

02-04 February 2016 (Tuesday-Thursday): Underground Infrastructure and Deep Foundations Egypt, Cairo.

03-05 February 2016 (Wednesday-Friday): FRUIT LOGISTICA fresh produce exhibition, Berlin. View the exhibition page here and register online here.

08-11 February 2016 (Monday-Thursday): 2016 Solar Power North Africa Conference, Cairo.

15-16 March 2016 (Tuesday-Wednesday): U.S. Federal Reserve’s Federal Open Market Committee meets. Fed chair will hold press conference.

20-21 February 2016 (Saturday-Sunday): Africa 2016: Business for Africa, Egypt, and the World conference, Sharm El Sheikh

23-24 March 2016 (Wednesday-Thursday): Microfinance Egypt, Nile Ritz-Carlton, Cairo.

29-31 March 2016 (Tuesday-Thursday): Future Rail and Metro Egypt, Cairo