Abou Hashima looks to list media co + Eurobond issuance rumored at USD 5 bn

Markit Emirates NBD PMIs for Egypt, Saudi Arabia, UAE will be released today at 6:15am CLT.

The EFG Hermes London MENA and Frontier Conference begins today and runs through Thursday (5-8 September) at the Emirates Arsenal Stadium in London.

El Sisi meets heads of state today at G20, Day 2: President Abdel Fattah El Sisi is set to meet with Russian President Vladimir Putin, French President Francois Hollande, and German Chancellor Angela Merkel today, the second day of the G20 Summit.

Egypt announced yesterday the indefinite postponement of the contract signing for impact studies on the Grand Ethiopian Renaissance Dam (GERD), Al Mal reported, citing Irrigation Ministry spokesperson Walid Haqiqi. The agreements, with French firms Artelia and BRL, were to have been signed in Khartoum today and tomorrow. The delay is due to “outstanding issues between the consultancy firms conducting the technical studies and the legal firm wording the contracts,” according to a statement by Haqiqi. Haqiqi also said the consulting firms were not granted entry visas for Sudan. Talks are taking place to determine a new date. As has often been noted, the dam is currently 70% complete, and even if the signing had taken place as scheduled, the impact studies would be finished long after the completion of the dam’s construction.

1.5 mn feddan reclamation project land up for tender this week? As much as 250K feddans of the 1.5 mn feddan desert reclamation project will be tendered to the private sector sometime this week as part of the first phase of the project, according to a report last week.

The Eid Al Adha vacation begins on Sunday, 11 September with the waqfa, according to a statement released Saturday by Dar Al-Ifta There’s no word yet from officialdom as to what the official back-to-work date may be. Enterprise is on holiday the whole week, resuming publication on Sunday, 18 September.

The Russian security committee due to arrive in Egypt this week has postponed its trip until later this month, Ahram Gatereports, citing sources at Hurghada International Airport. The delegation was due to have arrived in Egypt on 28 August to inspect airports in Cairo, Sharm El Sheikh and Hurghada; the delegation then postponed its arrival to 5 September.

Own a piece of Abou Hashima, Inc? Ahmed Abou Hashima’s Egyptian Media has said it will restructure and is exploring a list on the Egyptian Exchange. The company has appointed FEP Capital as advisors for the process, Reuters’ Arabic service reported. FEP Capital says it will restructure Egyptian Media and its subsidiaries with a focus on ensuring they generate sufficient cash flows ahead of a potential listing on the EGX. Egyptian Media is also planning on raising its capital to EGP 1 bn before the end of the year, from EGP 882 mn today, to fund acquisitions and expansion, FEP Capital’s managing director Omar El Maghawry tells Al Borsa. As we noted yesterday, Abou Hashima unveiled a new lineup of channels at Egyptian Media’s subsidiary ON network, where sports channel ON Sport is expected to launch on 13 September, Al Mal reports.

Egyptian Media has this year acquired ONTV from Naguib Sawiris (and recruited veteran talkshow host Amr Adib to boot), taken a 50% stake in Kamal Abu Ali’s Misr Cinema and taken 51% of presentation sports, which owns the rights to broadcast Egyptian Premier League matches. Abu Hashima also owns a stake in the influential tabloid Youm7 in partnership with others.

And while we’re on IPOs, the Suez Company for Fertilizer Production will have a preliminary valuation of EGP 1 bn, says parent company Egyptian Financial and Industrial Company (EFIC). EFIC adds that it has accepted the offer presented by Banque Misr and Pharos Holding to revalue the company and manage the issuance of a 40% stake, according to Al Mal. The stake could also be sold to a strategic investor directly, Al Masry Al Youm suggests.

Net foreign reserves rose just over USD 1 bn to USD 16.56 bn in August, up from USD 15.54 bn a month before, according to a “preliminary notice” on the Central Bank of Egypt’s website released yesterday. The CBE offered no explanation for the uptick, but the USD 1 bn deposit by the UAE a few weeks back likely played a role The CBE had reported a USD 2 bn drop for July to USD 17.55 bn as the country repaid foreign debt and other obligations.

This comes as the EGP weakened slightly on the parallel market yesterday,with greenbacks changing hands at EGP 12.80 per USD 1, Al Mal reports. The EGP had steadily weakening throughout last week to reach EGP 12.70-12.75. An unnamed FX trader told the news source that EGP typically sags against foreign currencies in the run-up to the Eid holiday due to heightened demand; back-to-school season also plays a role.

The Finance Ministry will meet with advisors BNP Paribas, JPMorgan, Citi and Natixis on Thursday to determine the size of the upcoming eurobond issuance, the interest rate on the bonds, and the roadshow strategy for the issuance, said Deputy Finance Minister Ahmed Kouchouk. While the issuance was initially sized at USD 3 bn, that could increase with market conditions, Kouchouk tells Youm7, saying the issuance will take place in late September. Meanwhile, an unnamed CBE official tells AMAY that the offering will be in the USD 5 bn range. That, coupled with the USD 1 bn deposit from the Emiratis, would give Egypt the USD 5-6 bn in funding it needs to raise as a condition of the three-year, USD 12-bn IMF extended fund facility.

MNOs take a hardline against Telecom Egypt in talks to use their networks: Vodafone Egypt, Orange Egypt and Etisalat Misr are reportedly looking to set a mandatory minimum for the share of revenue Telecom Egypt will have to pay for piggybacking on their 2G and 4G network — and they’re refusing to give ground on the issue, sources tell Al Borsa. The infrastructure sharing pact is a feature of the 4G license agreement TE signed last Wednesday. The newspaper is positing that the hardline MNOs are taking with TE is payback for the grief the state-owned fixed-line monopoly has caused them over its refusal to lower the high prices it has set for using its internet infrastructure to deliver ADSL services.

TE hiding behind NTRA? Whatever the end game, TE has a large buffer in the talks, being cushioned by the National Telecommunication Regulatory Authority’s notice that it will step in and set infrastructure sharing rates itself if the parties fail to reach an agreement. TE chief executive Tamer Gadallah said as much, telling Youm7 that they have three months at the latest to reach an agreement before the NTRA intervenes, something the MNOs have decried as undue intervention by the regulator in the market. TE is due to launch 4G services within six months.

In other 4G news, TE has borrowed EGP 5 bn to finance its acquisition of a 4G licence from a syndicate that includes the National Bank of Egypt, QNB Al Ahli, and CIB as well as two unnamed “international banks,” a source told Al Mal. On the day of the agreement’s signing, it was made public that NBE and QNB Al Ahli were arranging the syndicated loan. A source said TE used EGP 2-3 bn in “credit facilities” to pay for the first tranche of EGP 5.2 bn of the 4G licence fees as it awaits final arrangement of the facility. The story did not break down the terms or the amount covered by each participating member of the syndicate.

The House of Representative’s ICT committee appears to have pushed Careem to incorporate taxi drivers into its database of drivers. The company announced yesterday that 42,000 “white taxi” drivers will be added to the ride-hailing app’s roster of drivers after the Eid Al Adha holidays, Al Borsa reports. Users will apparently be able choose whether to be picked up by a private car or by a taxi. At hearings meant to develop a framework for ride-hailing platforms, the House of Representative’s ICT Committee had been pushing Uber and Careem to incorporate taxi drivers into their business as part of a series of “recommendations” MPs are pushing.

Careem hires Google vet Fakharany as MD Egypt, SVP gov’t relations: With the ongoing threat of regulatory interference in Egypt and amid a crackdown on Careem and Uber drivers in the UAE, it’s not surprising that Careem has brought former regional Google boss Wael Fakharany in as MD for Egypt and senior vice president for government relations. Fakharany, who appears to have joined on 1 September, said incorporating white cab drivers into the app will help Careem better address the needs of the local market, according to Al Mal.

MNHD announces best-ever one-month sales figure: Madinet Nasr Housing and Development (MNHD) said yesterday (pdf) that contracted sales for the eight-month period ending 31 August 2016 grew 221% y-o-y to EGP 1.41 bn, with sales in August surging 520% y-o-y to EGP 519.1 mn. That made August the company’s best-ever single month of sales, largely on the back of the Tag Sultan and Taj City projects. CEO Ahmed El Hitamy attributed the pace of sales to the company’s investment in its sales department.

The Prosecutor General ordered the arrest of 30 people including officials from the Supply Ministry and the Agriculture Ministry in Fayoum for their alleged involvement in widespread fraud during the domestic wheat collection harvest, Al Shorouk reports. The officials and private sector silos owners are reportedly accused of conspiring to defraud the government of EGP 64 mn in subsidized wheat and replacing it with imported wheat. The move is the largest single sweep of arrests in the case, which to date has seen around 19 people arrested, two of whom were subsequently released on bail. The Prosecutor General has also put in a request to the court system to impose asset freezes and travel bans on suspects, Youm7 reports. While the full scope of the corruption scandal remains unknown, the Interior Ministry reportedly says the state may have paid as much as EGP 1.5 bn for wheat that didn’t exist, according to Assistant Interior Minister Hosny Zaky, Al Borsa reports.

Is former Supply Minister Khaled Hanafy headed to the clink? Al Borsa reported on Saturday that the Illicit Gains Authority had placed former Supply Minister Khaled Hanafy and 37 other ministry officials on a travel ban as part of the investigation, something judiciary sources speaking to Al Shorouk deny. Meanwhile, Prime Minister Sherif Ismail said that Hanafy’s replacement will be named within the week, according to Al Masry Al Youm. No criminal charges have been pressed against the former minister.

Supply Ministry tempting fate again? On a related note, the General Company for Silos and Storage, which has caught a lot of flak from Parliament for contracting the private sector during the wheat harvest and fumbling the launch of the Blumberg Grain shounas, has contracted 45 local private sector silos to store wheat. This time, however, the GCSS included clauses in the contract which hold these silo owners liable if the numbers don’t add up, AMAY reports.

State moving back into cement, steel industries? The government is considering granting “a sovereign entity” cement and steel licenses to “create balance in the market,” government sources tell Al Masry Al Youm. This entity is looking to develop two steel plants and a cement factory and has presented a plan to the cabinet that could see the issuance of four new steel licenses, two of which will go to the private sector, and two to the public sector. President El Sisi had ordered the Engineering Authority of the Armed Forces in April to step in and open a steel factory to “stabilise the price of steel,” which authority head Gen. Kamel El Wazeer had said at the time was influenced by “monopolistic practices.”

The Engineering Authority may see an opportunity in the cement market as only six companies are believed to have bid on eight of the 14 licenses tendered last May. The government has delayed the auction for the cement licenses as it has yet to determine the minimum bidding price, something the Ismail cabinet was supposed to do last month, Al Borsa reports. Sources added that one of the companies had not completed it paperwork to operate yet and is also looking for an extension.

The Consumer Protection Agency is asking Samsung to recall 1,200 Samsung Galaxy Note 7 devices sold in the Egyptian market, Al Mal reported, picking up on Samsung’s global recall of the device amid reports of at least 35 instances in which the device’s battery has exploded. A Samsung representative in Egypt said the company will announce procedures to replace faulty devices at authorized resellers. As we noted yesterday, Samsung ordered the device recalled in North America, the Middle East, and Asia. A Samsung Egypt customer service rep said over the weekend that only devices made in China were affected, despite China being one of the only markets not subject to recall as devices there use batteries from a different supplier.

El Sisi meets with world leaders; China’s Jinping warns that globaleconomy is at risk: President Abdel Fattah El Sisi attended the first day of meetings at the G20 Summit in Hangzhou, China, according to a statement from Ittihadiya. The first session reportedly focused on ways to strengthen coordination between states to facilitate global economic growth. Following the first day’s sessions, El Sisi attended a banquet hosted by Chinese President Xi Jinping. El Sisi also met with a number of world leaders, including German Chancellor Angela Merkel, Russian President Vladimir Putin and Saudi Deputy Crown Prince Mohammed bin Salman, among others.

Meanwhile, Foreign Minister Sameh Shoukry addressed the meeting of G20 foreignministers yesterday, where he reportedly “underlined the necessity of strengthening cooperation between the world’s largest economies and developing countries to help the latter achieve sustainable development and tackle challenges such as climate change,” according to Ahram Online.

“We should make the G20 an action team instead of a talk shop,” Chinese President Xi Jinping said at the opening ceremony, according to German news outlet DW, whose journalists were barred from reporting on the summit. Jinping also echoed statements made by IMF Managing Director Christine Lagarde made a day earlier over the dangers over protectionist resistance to global trade. “Growth drivers from the previous round of technological progress are gradually fading, while a new round of technological and industrial revolution has yet to gain momentum,” Jinping warned, Reuters reported.

Mohamed Omran wants you to file your financials on time. In addition to recently imposed measures that could see shares suspended from trading if a company is more than 45 days late in filing their quarterly financials, late filers will face fines of EGP 2k a day, Al Mal reports.

Worse-than expected US jobs report signals that Fed may not hike rates in September: US nonfarm payrolls rose by 151k jobs in August, as reported by the US Bureau of Labor Statistics on Friday, lower than the expected increase of 180k jobs and a sharp decrease from the growth of 275k jobs in July. Some analysts see the jobs report as prompting the Fed to hold off on rate hikes, with BNY Mellon senior global markets strategist Marvin Loh saying he expected the Fed to wait at least until December for any potential rate hike, “when they can factor in three additional jobs reports as well as the US third-quarter growth report,” according to Reuters’ Lisa Twaronite.

Driving the conversation about Egypt in the international press this morning… The Associated Press’ wonderful Hamza Hendawi wins the day: His “New Billboards Across Egypt’s Capital Extol Austerity” from the weekend continues to get pickup, and to that he’s added “Sculpture honoring fallen soldiers scandalizes Egyptians.” There’s little better than when someone with chops as an investigative journalist and a sense of humor turns his hand to do mundane.

MP’s crass joke on FGM reported on globally: MP Elhamy Agina — yes, that is his actual name — insulted the country and its men by joking that women should submit to FGM because Egypt’s “men suffer from [redacted] weakness, which is evident because Egypt is among the biggest consumers of [redacted] stimulants that only the weak will consume,” Parlmany reported Agina as saying, as noted by RT and the Times (paywall). Agina is no stranger to controversy, having previously said female MPs should wear more modest clothing, and having previously insulted House Speaker Ali Abdel Aal.

Worth reading this morning: Rod Nordland’s New York Times piece on Muslim-Christian relations in Minya, where one Mahmoud Gomaa, the Muslim cleric tasked by the state with mending fences with Christians, says “Everything is good.” Hours later, the local bishop tells Nordland, “I have nothing to do with Mahmoud Gomaa.” It’s the kind of well-reported piece that sticks in the minds of Washington types.

News of the flap over the shortage of subsidized infant formula earned a mention by Farid Farid writing for Vice News’ Motherboard, who also noted that the “response from Egyptian authorities had been confusing, with the health ministry advising that mothers resort to breastfeeding and buy the milk from new outlets.” Farid also notes: “Earlier this year, Ahmed El Awadi, a member of parliament, foreshadowed the current crisis, noting that Egypt’s armed forces were importing massive amounts of baby formula. The controversy escalated when an open letter from last year by the state-run pharmaceutical firm urging Egypt’s president Abdel Fattah El Sisi to intervene in a dispute with the [health] ministry began circulating online overnight.”

Does Turkey want better relations with Egypt? Reuters thinks so, running a piece over the weekend that quotes Prime Minister Binali Yildirim as telling a “televised briefing with ministers” that “God willing, there will be normalization with Egypt and Syria. Turkey has started a serious attempt to normalize ties with Egypt and Syria.”

Straight from the Department of Duh: El Watan columnist Emad El Din Adib writes that “the way the wheat scandal has unraveled confirms, beyond doubt, that corruption is ingrained in the public and private sectors alike.” Corruption scandal confirms corruption? Deep thinking.

Also in El Watan, Mahmoud Khalil takes on the disappearance of infant formula from shelves. He notes that “the poor and the middle class have been through a lot in recent years” and the current economic climate is likely to soon lead to an “explosion.”

Al Ahram columnist Makram Mohamed Ahmed says Daesh will likely retaliate to the death of senior member Abu Muhammad Al Adnani with terrorist attacks in the West.Daesh has lost ground in Syria and Iraq, and will have to retaliate externally, he says. Adnani was the terror outfit’s head of operations and was killed by a US drone attack last Tuesday.

Eye of the beholder: Following a social media backlash, the governor of Sohag ordered changes to the pictured sculpture “Mother of the Martyr,” where the depicted peasant woman is a representation of the Egyptian nation. “Some critics of the Sohag statue… said… the sculpture portrayed [redacted] harassment,” notes the AP’s Hamza Hendawi, to whom the photo is credited.

The needs of the many outweigh the needs of the few, or the one: Fans of the absurdist trolley meme ethical dilemma which has gripped the internet may see a bit of themselves in this two-year old’s solution to this classic philosophical question. (Watch, running time: 26 seconds)

House speaker Ali Abdel Aaal and other MPs met with a French parliamentary delegation yesterday afternoon on the outset of their four-day visit to Cairo, Al Shorouk reports. Regional issues were on the agenda, alongside parliamentary cooperation and economic issues.

Egypt’s natural gas production rate has increased to 4.17 bcf /d as of last week, while the daily decline in the maturity of gas fields reached its lowest point since in 2012, an unnamed source from EGAS told Al Borsa. 140 mcf/d of gas from Eni’s Nooros field among other fields was the main driver for this improved performance, the source noted

China’s Dongfang is once again studying the project to upgrade the railroad between Abu Qir and the Alexandria train station after withdrawing from the project previously, sources at the company told Al Shorouk. The Transportation Ministry has restarted negotiations on the project, which were frozen by former Transport Minister Saad El Geyoushi, the source added. Dongfang is now set to arrange financing with favorable conditions, the source said.

The General Company for Disposal in Alexandria is planning an EGP 270 mn expansion of a sewage plant located east of Borg El Arab, with the company currently in the process of choosing engineering firms to take on the project, Al Borsa reported on Sunday. The company wants to increase capacity by 70% to c. 100k m3 of wastewater per day.

The Egyptian Cotton Association, the entity grants the “Egyptian Cotton” seal of approval, has begun an investigation with officials from India’s Welspun over cotton products mislabelled as Egyptian, Al Masry Al Youm reported. As we had previously reported, Welspun was selling cotton mislabelled as “Egyptian” to US retailers. Welspun had received rights to use the logo after presenting samples and documentation, said association CEO Khaled Shuman, and incidents involving the US chain Target are now under investigation.

The Eastern Company for Tobacco approved a capital hike of EGP 750 mn yesterday through the distribution of one free share for every existing original share, Reuters reports. This increased the company’s issued capital to EGP 1.5 bn from EGP 750 mn, which Eastern announced it was considering last week.

The General Authority for Supply Commodities (GASC) has bought 50k tons of Brazilian raw sugar at a price of USD 491.50 per ton at a total cost of USD 24.58 mn, a senior GSAC official told, Reuters yesterday. The move comes as part of the government’s plan to buy 450k-550k tons of sugar from the local and global markets to lock in supplies through February, a supply ministry source told the newswire.

The Military Production Ministry has entered negotiations with the China Machinery Engineering Corporation to build four factories that produce components for the power-generation industry, CMEC representative Effat El Sadat told Al Shorouk. Separately, CMEC is also in negotiations with the Electricity Ministry to build solar power plants with a combined output of 1,000 MW, he added.

The Health Ministry has been studying the feasibility of opening a baby formula factory in Egypt in conjunction with the armed forces for the past four months, said Health Ministry spokesperson Khaled Megahed in an interview on Ten TV (runtime: 2:04). Four consultants have been commissioned to conduct the study, he added. Back in May, the Health Minister had announced plans to develop an infant formula production line, but had not presented details on how the plan had progressed, while Lacto-Misr Company had announced in April that was also studying building a EGP 200 mn factory. Pressure is mounting on the ministry to increase supply of subsidized formula as supplies contract as a result of the FX crunch and amid allegations of corruption in the distribution system.

The Industrial Development Authority is set to tender 2 mn sqm of land for industrial use in Badr and Al Sadat cities in September, an unnamed authority source said, Al Borsa reported on Sunday.

The founder of the Domina Coral Bay resort in Sharm El Sheikh, Ernesto Preatoni, launched an initiative to re-attract tourists to Sharm El Sheikh, Al Shorouk reported. Preatoni, who calls himself the “inventor of Sharm” (we kid you not) is arranging eight flights, each carrying 180 people, from four Italian cities to visit Sharm El Sheikh for a week at his expense.

Irish firm Anam Technologies has expressed interest in investing in Egypt, particularly in projects in the new technology zones, during a meeting with the Information Technology Industry Development Agency, Al Borsa reported on Sunday.

The Immigration Ministry proposed exempting Egyptian expatriates from customs tariffs on cars belonging to them on their return to Egypt. In return, the Ministry said the expatriates could deposit an amount ranging from USD 10,000 to USD 20,000 for five years at the central bank, free of interest, and in foreign currency. “High-ranking government officials said that this recommendation is currently being studied by the customs department and will be finalised in the next few days,” Daily News Egypt said.

A delegation from China’s BYD is set to meet with the Engineering Automotive Manufacturing Company next month to discuss assembling cars at the company’s production lines domestically, sources told Al Shorouk. Additionally, the company is looking to implement an MoU signed in June to assemble 1,200 car and bus parts as part of a strategy to become an export hub to Arab and African markets, the source added.

As many as seven banks are offering education loans for tuition at K-12 schools and universities, Al Borsa reports, providing an overview of who has what on offer. Institutions covered include AAIB, Emirates NBD, Blom Bank, SAIB, United Bank, Baraka Bank and HDB.

The crew of Air Cairo flight number SM462 headed to Alexandria from Riyadh were able to detain an unarmed passenger who attempted to storm the cockpit, Al Borsa reported. A security officer on board detained passenger. The incident prompted the Civil Aviation Ministry to launch a probe into the matter, with EgyptAir publishing a statement correcting several international media outlets who incorrectly identified them as the airline carrier, Arabian Aerospace reported. Air Cairo is a low-fare airline owned by EgyptAir, NBE, and Banque Misr.

President Abdel Fattah El Sisi approved the construction of a new orthodox church in New Cairo, according to Al Shorouk citing the Official Gazette, marking the first such move since the House passed the Church Construction Act.

Defence Minister Sedky Sobhi is in Russia for the third meeting of the Egyptian-Russian Military Committee, Ahram Online reported. Sobhi is accompanied by Military Production Minister Mohamed El Assar and are expected to discuss boosting military cooperation.

An Egyptian internet of things startup: Wamda’s Rachel Williamson reviewed Spimesense Labs, a software platform that allows businesses to manage many devices through the internet of things. Spimesense markets its platform globally and is already talking to potential customers from the Czech Republic, Australia, and Mexico.

Best New York Times story we’ve ever read, reproduced in full: Headline: “When I’m Mistakenly Put on an Email Chain, Should I Hit ‘Reply All’ Asking to be Removed?” Body Copy: “No.” Footnote: “The New York Times’ internal email system contributed to this report.” BuzzFeed has the inside story of what’s being called Replyallpocalypse (with screenshots of replies to the thread as it unfolded).