State banks bid to keep government borrowing costs low.

TL;DR

State banks bid to keep government borrowing costs low. (Speed Round)

Is Adly Mansour about to become Speaker of the House? (Speed Round)

A clampdown on exchange bureaux may be in the offing. (Speed Round)

Three-quarters of Egyptian villages have no sewage systems. (Speed Round)

KSA hikes price of some fuel products by 50% this morning as it grapples with “huge” budget deficit; oil prices hit nearly 11-year low. (Speed Round)

Year in review, part 3: Egypt’s future as an energy hub, the outlook for FX, and who moved where

By the Numbers + Fingers Crossed: Floatation in Sight

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WHAT AM I READING?

Enterprise is on something of a break this week, as we mentioned yesterday. It’s a chance for us to get caught up on sleep, spend time with family, and lay the ground for a new product we’re aiming to launch early in the new year.

As we do so, we’re looking back this week on the year that was — in business, economics and politics. Throughout this week, we’ll have brief issues of Enterprise at the usual time including both our first “year in review” (in five installments) and a brief recap of what happened yesterday. We hope you find them useful as you prepare your 2015 reports and / or your 2016 strategy.

SPEED ROUND

State banks bid to keep state borrowing costs low at yesterday’s treasury bill auction, Reuters reports, confounding expectations that yields could rise as much as 50 bps and “potentially attract much-needed hard currency from foreign investors.” The financial news service quotes Beltone’s Ziad Waleed as noting, “treasury yields are not increasing as much as people expect due to direct intervention from state-owned banks. Maintaining the present t-bill yields as is, or raising them only slightly, is unsustainable.” Investors will not flock to bonds to treasury bills “as long as the pound is not devalued and as long as treasury yields don’t rise enough,” he concludes.

Will Adly Mansour never be allowed to rest? Politicos were chattering yesterday after word emerged again that the former interim president and current chief justice of the Supreme Constitutional Court Adly Mansour might accept appointment to the House of Representatives on the list of 28 candidates President Abdel Fattah El Sisi is constitutionally mandated to name. Speculation is that the move would pave the way for Mansour to be elected speaker of the house, and MBC talkshow host Sherif Amer reported overnight that Mansour is likely to resign today from the Supreme Court during a planned meeting with his number two. Other names being bandied about on ONTV last night included former foreign minister Amr Moussa, national security adviser Fayza Aboul Naga, and football legend Mahmoud El-Khateeb. And speaking of the house: Yesterday was 28 December, the date on which government sources originally suggested the House of Representatives would convene for its first session. There is still no visibility on when that might come to pass.

Clampdown on exchange bureaux in the offing? The Central Bank of Egypt is reportedly mulling new, unspecified measures to regulate the nation’s foreign exchange offices, including a potential tightening of sanctions on companies that break the rules, according to a vague story in Al Masry Al Youm. Elsewhere, the newspaper quotes an unnamed “senior banker” as saying that the CBE has “taken no new decision to close exchange companies provided they remain committed to operating within the system.” In other news, the CBE is again denying it has plans to resume the printing of EGP 1 banknotes.

The Cabinet economic group reviewed unspecified “special measures” to curb imports by encouraging consumers and businesses alike to buy Egyptian, according to an emailed statement from the Council of Ministers. Notably, the meeting was attended not just by the usual cabinet-level suspects (trade, finance, investment, planning, housing, electricity, et cetera), but also by central bank governor Tarek Amer. Ministers also approved the sale of land owned by the Holding Company for Maritime and Land Transport to support the latter’s ongoing restructuring bid, including the overhaul and upgrade of the aging bus fleets held by its subsidiaries. Ministers later endorsed a plan to see Egypt allocate more land to corn farmers to keep pace with rising demand from the animal husbandry and poultry industries that has pushed imports of the staple to more than USD 1.6 bn annually. Al Mal has the statement in full here.

Federation of Egyptian Industries chief Mohamed El Sewedy spoke in favor yesterday of the Central Bank of Egypt’s push to encourage banks to increase lending to small and medium-sized businesses, Al Masry Al Youm reports. His remarks came in the wake of Central Bank of Egypt Governor Tarek Amer’s suggestion on Thursday that the CBE is supporting the extension of EGP 100 bn in credit to the SME sector over a seven-year period. Amer announced the target as the central bank released guidelines for segmenting the SME sector into four ranges: micro, very-small enterprises, small businesses and medium-sized enterprises. El Sewedy also is also calling for more support to the development of industrial clusters outside of Cairo, welcomed suggestions the Trade and Industry Ministry is looking to streamline licensing procedures for manufacturers, and called on the Finance Ministry to fast-track measures designed to expedite the movement of imports through ports.

Total lease contracts surged 183% in the 11M2015 to EGP 17 bn compared to the same period last year, according to Egyptian Financial Supervisory Authority chief Sherif Samy.

North Cairo Court is expected to rule today on an appeal by a state agency against a Tax Authority settlement with Orascom Construction Industries in a years-old case about taxes on the sale of its cement holdings to Lafarge. The tax dispute, which began during the Morsi interregnum and was widely seen by the business community as politically motivated, saw OCI slapped with a massive tax bill, but the company was cleared in 2014. OCI noted at the time: “Following the change in government, the Egyptian Public Prosecutor thoroughly investigated the entire tax file over a six months period and fully exonerated OCI S.A.E. of any tax evasion in a final written opinion published on 18 February 2014. Subsequently, OCI S.A.E. relaunched its legal right to appeal the tax settlement and the case was referred to the Independent Appeals Committee.” Background on the case is here, courtesy the Financial Times.

Egypt Expects to finalize with Russia the technical, technology transfer and financial agreements for the Dabaa nuclear power plant next month, Electricity Minister Mohamed Shaker said yesterday at a press conference. Shaker recapped how negotiations led to the choice of Russian technology over competing offers from countries including France and South Korea, noting that there are 96 Russian-built nuclear power plants running “safely and efficiently” today in 14 countries. Russia’s official TASS news agency has additional background. The minister also briefed reporters on Siemens’ progress on its power generation contracts and noted once more that while the model feed-in-tariff contract for renewable energy producers has been signed off by its advisors, the law firm of Zulficar & Partners, it still awaits approval by the State Council.

Oil Minister Tarek El Molla outlined late yesterday the shape of what appears to be an interim agreement with KSA to cover Egypt’s fuel needs for January. With demand rising as temperatures fall, EGPC also detailed yesterday how it plans to ensure LPG remains widely available in the local market, stressing that the state now has a three-month strategic reserve on hand. The remarks come one week after speculation began that EGPC had insufficient FX liquidity to cover petroleum imports. EGAS, meanwhile, is reportedly chasing industrial producers — whose natural gas supplies were only restored on 1 November, and who are facing this month a 15% reduction in volumes — for overdue tax bills, Al Borsa reports.

Three-quarters of Egyptian villages have no sewage systems, according to a survey of 4,655 settlements by state-run statistics agency CAPMAS, Ahram Online reports, and nearly half of all villages with sewer systems regularly experience blockages. The report also found that nearly 40% of villages surveyed suffer power outages “every two or three days.”

Weather Alert: Much of northern Egypt including Cairo, Alexandria, the North Coast and northern and central Sinai will experience low temperatures, rain and high winds during a spell of inclement weather expected to start today and last until Saturday, Ahram Online reports, citing the national meteorological service.

MOVES- Prime Minister Sherif Ismail named Hossam Reda Hamid El Gamal as the new head of the Cabinet Information and Decision Support Center (IDSC).

After a delay to make sure they had quorum, members of the Egyptian Capital Markets Association elected their new board yesterday. Al Borsa has a full rundown on who will guide the industry association for the coming year. On ECMA’s agenda for the coming year: A sit-down with central bank governor Tarek Amer to urge him to support the development of a secondary market for bonds, Al Mal notes.

The Ministry of Communications and IT is pushing forward with plans to open new tech zones outside of Cairo, beginning with Borg El Arab and New Assiut, Ittihadiya said in an emailed readout of a meeting yesterday between CIT Minister Yasser Elkady and President Abdel Fattah El Sisi.

How slow a news day was Monday? Bad enough that Al-Mal was reduced to running a front-page story recapping every single loan and assistance package International Cooperation Minister Sahar Nasr and other cabinet members have ever landed. The list is, however, a valuable tracking tool for those of you keeping score at home. Meanwhile, the Union of Arab Banks named Nasr the “most influential woman in the Arab world“ at their 20th annual gathering in Lebanon.

Other domestic stories making headlines:

• President Abdel Fattah El Sisi is expected to inaugurate the 1.5 mn feddan land reclamation megaproject “within days.”
• The Egyptian Businessmen’s Association has prepared a policy paper on trade ties with China in advance of Chinese President Xi Jinping’s expected visit to Cairo next month.
• “Ethiopia began diverting the Nile River towards the disputed Grand Renaissance Dam 36 days ago, Sudan’s Foreign Minister Ibrahim al-Ghandour,” Egypt Independent reports. The news comes as next session in talks between Egypt, Ethiopia and Sudan is due to take place in two weeks’ time in Khartoum.
• A wildcat strike by several dozen Egyptian National Railway employees at Cairo Station delayed trains to Alexandria yesterday, Al Mal reports. The workers were demanding bonus pay.
• The Ismail government continues to work to bring down the cost of hepatitis-c treatments including Daklinza and Sovaldi, Al Masry Al Youm reports.

Saudi Arabia plans unpopular spending cuts to tame a “huge” budget deficit in the 2016, according to a budget outline unveiled yesterday. The budget, Reuters reports, “marked the biggest shake-up to economic policy in the world’s top crude exporter for over a decade, and includes politically sensitive reforms from which authorities previously shied away.” The kingdom will cut spending by 14% to SAR 840 bn as it looks to reduce the budget deficit by about 11% to SAR 326 bn. Defense spending accounted for nearly 22% of the state’s SAR 975 in spending last year. Spending cuts will come in part through reductions in subsidies for water, electricity and petroleum products over the coming five years. “The budget comes in light of lower oil prices and economic and financial challenges on regional and international levels…our economy, with the help of God, has what it takes to overcome the challenges,” King Salman said in a nationally televised address prior to a press conference by key economic ministers. Oil, which accounted for 73% of state revenues in 2015, according to Bloomberg, has fallen 50% since the last budget was tabled. Prices of some fuel products rose 50% this morning in the kingdom, AFP reports. The Financial Times’ Simeon Kerr has a take on the story here (paywall).

In other international news making headline this morning:

• The Financial Times reports on an activist-investor shakeup of sportswear giant Adidas led in part by Nassef Sawiris.
• Oil is now trading a nearly 11-year low, Reuters reports.
• “The next financial crisis will be played out in indexes and exchange traded funds,” the FT’s John Authers in his latest column, adding: “What is less clear, and deeply controversial, is whether the structure of ETFs will itself contribute to the next crisis, or even cause it.”

Egypt in the News: The killing of a 28-year-old Palestinian man by Egyptian border security forces, captured on a graphic video seen worldwide, has made it to the New York Times, with Kareem Fahim sharing a byline on a nuanced story of human tragedy. Meanwhile, an AFP story on the arrest of four leaders of April 6 on Sunday night / Monday morning is getting wide pickup, Canadian journalist Mohamed Fahmy, the former Cairo bureau chief for Al-Jazeera English, is petitioning to have his Egyptian citizenship restored “as a matter of principle.”

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2015: THE YEAR IN REVIEW, PART 3

As we wrote in Sunday’s introduction to our year in review package, two actors actors had the largest impact on the economy in 2015: Governors of the Central Bank of Egypt (old and new) on the one hand, and Eni CEO Claudio Descalzi on the other.

Together, they were key players in the three events that shaped 2015, two of which will be features of our landscape heading into the new year: The promise of a new energy future thanks to the discovery of the Zohr gas field; the foreign currency shortage and the CBE’s steps to counter it; and the inaugural Egypt Economic Development Conference.

Today, we’re digging deeper into Egypt’s suddenly very good prospects for emerging as a regional energy hub and the FX question. We’ll also recap high-profile job changers and promotions during the year and, finally have a look at capital markets.

Tomorrow, we’ll look at promises made, kept and bent in a recap of the EEDC and the legacy of policy flip-flops that the Mahlab cabinet passed on to the government of Sherif Ismail. And Thursday, we’ll recap the year in domestic and foreign affairs.

EGYPT AS A REGIONAL ENERGY HUB

Eni’s Zohr steals the show

In a year marred by domestic economic challenges, external shocks and terrorism at home and abroad, the most pleasant surprise came from the oil and gas sector. In August, Eni announced it discovered Zohr, a “supergiant” gas field in the Mediterranean. Zohr came with the promise of changing Egypt’s regional energy calculus, with it likely to be holding up 30 tcf of gas, making it the single “largest gas discovery ever made in Egypt and in the Mediterranean Sea.” By comparison, Israel, with its not-so-subtle name for Leviathan, only had its hands on a field that held 19 tcf of gas.

Preliminary estimates of the cost to develop Zohr are projected to be USD 3.5 bn; with full completion of the field’s development, the total investment could top USD 7 bn, EGAS projects. With a lot of pushing from the Egyptian side, production is slated to begin as early as 2017, but an advisor to the Oil Ministry puts a more realistic projection of first gas at 2018.

BP, Apache make headlines

2015 was not just about Eni. In March, BP upped its ante by pledging to invest USD 12 bn over the next five years to develop the West Nile Delta gas fields. The project targets producing 5 tcf of gas and 55 mn bbl of condensates, with first gas expected in 2017. The company also announced it is accelerating the development of the first phase of the Atoll field, discovered in March, to have it come on-stream by 2018.

BP also tied-in production from its Libra and Taurus fields with BG Group’s West Delta Deep Marine (WDDM) offshore infrastructure. The tie-in is planned to enable the increase of the supply of energy to the Egyptian domestic network through the utilization of BG Egypt’s infrastructure from mid-2017. On its own, BG Group announced at the EEDC plans to invest USD 4 bn that will go towards developing the WDDM wells.

Apache, while still the largest oil and gas producer domestically, partnered with Shell to explore whether unconventional gas is feasible in Egypt. Shell, along with its JV Bapetco, believe that “more oil and gas can be extracted through application of advanced horizontal wells, waterflood technology, new completion technologies and also ongoing investment in the maintenance and development of the processing facilities,” Shell Egypt’s MD Aidan Murphy said. While Shell and Apache are not quite exploring the prospects for shale, they are using horizontal drilling techniques at a site that could be holding 700 bcf of recoverable gas.
Changing the global LNG market

Egypt’s response to weaker gas production and surging demand in 2015 was to commission floating storage and regasification units (FSRUs). The first FSRU to arrive in Egypt was the Höegh Gallant, which commenced operations in April and has a capacity to regasify 500 mcf per day. The deal was followed with commissioning a 750 mcf per day vessel from BW Gas, and Egypt also signed an agreement with Jordan to supply it with excess gas produced from an FSRU docked at Aqaba.

Egypt emerged as a new LNG buyer globally, driving the MENA region to have the biggest growth in LNG demand during the year. This, most likely, is not a one-off: Egypt is gearing up to commission a third FSRU in 2016 to further increase its natural gas supply. The LNG bonanza should be on the wane come 2020, when Egypt is planning to halt imports.

The sector in 2016

For the Egyptian oil and gas sector, 2016 hinges on BG and its Phase 9B wells. The British producer is the only IOC with a major prospect that is scheduled to begin production during the year. BG, however, has already announced it is postponing production from Phase 9B to mid-2016, instead of the beginning of the year, citing the increased receivables due from Egypt. That is why we feel that there is a need to temper the expectations of the sector in 2016, particularly when it comes to output compared to 2015.

We are, however, keeping a very close eye on two smaller explorers in particular: Petroceltic and Edison, the biggest discovery in 2016 is likely to come from them. “Among the blocks to keep your eyes on,” Patrick Werr wrote, are “North Thekah, awarded in April 2013, and North Port Fouad, awarded in September last year, both to a joint venture between Italy’s Edison and Ireland’s Petroceltic. They contain extensive unexplored acreage smack in the middle of the massive Egyptian, Israeli and Cypriot finds.” The results of the experiment Shell and Apache are engaged in in the Western Desert are something we are interested in next year.

Regionally, Descalzi’s view of a transforming Egypt into an energy hub await the prospect of a production tie-in between Israel and Cyprus. If the two countries finalize an agreement to link their output from the Leviathan and Aphrodite fields, pumping the gas to Egyptian liquefaction plants will become likelier. Even then the issue is not that simple: While relations between Cyprus and Egypt have never been warmer, the issue of engaging with Israel remains tenuous and became even more complicated when an arbitrator awarded the Israel Electricity Company USD 1.76 bn in compensation from Egypt, driving the state to freeze talks with the Israelis. Despite Prime Minister Sherif Ismail imposing a moratorium on imports, Israel has since given the green light to exports to Egypt from Leviathan field, and Israeli PM Benjamin Netanyahu has sent a ‘gas envoy’ to Egypt to try to work things out.

2016 is likely going to be the year when the issues of gas between the two countries is resolved. Israel will either come to terms that cooperation with Egypt is worth significantly more than the value of the compensation — or will look for a feasible alternative market, possibly Turkey. The prospects of cooperation with Cyprus remain strong, and we could even see the beginning of operations to link a pipeline from the Aphrodite field to Egypt.

What could lie ahead for Zohr? Egypt has already drafted a production sharing agreement for the field with Eni, but there are still two concerns that could hinder the expedited development of the supergiant field. One is the large cost of development, an issue that is already making Descalzi consider selling a stake of the field. The other issue that could slow Eni down is concerns over Egypt’s willingness and ability to honor its payment obligations. EGPC and EGAS do not have the best record in paying IOCs in full or on time. By the end of 2015, IOCs were still owed USD 2.9 bn, 80% of which is due to BG, BP, Shell, and Eni. But again, almost all major prospects will depend on the ability of EGPC and EGAS to make timely payments to IOCs, not a small feat given the shortage of USD and the challenges the central bank faces in proving FX.

Privatization, renewables and nuclear power

The year saw the government adopt a number of strategies to keep up with energy demands. The most significant of these was the prioritization of natural gas supplies to the consumer power grid — at the expense of cutting off industry. The choice brought heavy industry, manufacturing and exports to a trickle, but resulted in the miracle that was the summer of 2015: Relatively few power cuts, after a 2014 in which one or more cuts daily was the norm. Egypt continued signing new power plant agreements and landed fuel supply aid from the GCC while adopting new strategies (which we will focus on here) including developing nuclear and renewable energy sources in addition to formulating plans to deregulate the natural gas and electricity markets.

The biggest impact going forward will come from the deregulation of the electricity and natural gas markets, which will essentially see the government regulating the pipelines and transmission lines while leaving the market to the private sector.

The Mahlab cabinet approved a new law governing electricity production and distribution in February that, if enacted, would see private companies take an increased role in directly managing power facilities, with the government retaining responsibility for overall policy-making, organization and monitoring of the industry. The law aims to increase generation efficiency by promoting market competitiveness and attract foreign investment to the sector, while still including safeguards for consumers. “Initially, there will be two markets: one competitive and one in which prices are set by the state. But with the gradual liberalization of electricity prices over the coming five years, the competitive market will expand to include more consumer segments,” the state said at the time.

Talk of the new system died down in the second half of 2015, leaving this as an obvious agenda item for the Ismail government and parliament in 2016.

A similar plan is in the works for the natural gas sector, with reports of a new law under development emerging in November. The law, originally promised at EEDC when Sherif Ismail was still oil minister, would see the state’s role reduced to that of a market regulator, with private sector players allowed to directly trade gas using the existing pipeline and network infrastructure. The law will also apply to dealings in compressed natural gas (CNG) and liquefied natural gas (LNG). The act would also establish a new authority that will regulate the gas market and work on securing connectivity to the grid for third parties, with the sector as a whole falling under the oil minister. This new natural gas regulator will be operational from mid-next year, Tarek El Molla said earlier this year. The entity will not price the gas directly, but rather price the service of providing and transporting the gas. If serious about the deadline, we should hope to see the law passed by parliament early in 2016.

Egypt finally began implementing a feed-in tariff system for the renewable energy sector in 2015, as part of a plan to increase renewable energy projects with the private sector to where 20% of Egypt’s power needs will be met by renewable resources by 2022 — and to 65% by 2050.

Wind and solar power plants began to rapidly expand in 2015, especially with the Gabal El Zeit wind farm and the 1.9 GW solar energy park in Benban Aswan. Eleven companies signed wind power MoUs, while 39 received land in Aswan for solar power plants. The government is currently fine-tuning feed-in tariff agreements to meet investors’ needs. The year also saw the government adopt a pricing scheme for waste-to-energy projects under a feed-in tariff system. We hope to see more solar, wind, waste-to-energy projects increase in 2016.

On a somewhat less renewable note, Egypt signed the Daba’a nuclear power plant agreement with Russia in November. Russia’s Rosatom will build a four-reactor nuclear power facility in Dabaa with a total generation capacity of 4.8 GW. Egyptian companies are guaranteed c. 20% of the construction program for the facility. Moscow will provide finance for the construction, with repayment coming through a share of revenues over a 35-year period. The first two reactors are expected to be completed within nine years from the start of the construction.

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A CBE THAT IS MORE ACTIVE THAN EVER

Hisham Ramez came into 2015 as an in-control CBE governor who the business community expected to make the tough decision to reduce the state’s grip over the exchange rate. Seeing a managed devaluation in the offing, the IMF welcomed “a more flexible exchange rate, reflecting supply and demand and consistent with an adequate level of reserves, as a way to improve the availability of foreign exchange for households and businesses, strengthen competitiveness, support the current account, and attract foreign direct investment.”

To devalue, or not to devalue

By September, pressure was mounting on Ramez’s CBE as the market continued to expect a significant devaluation after the imposition of caps on USD deposits brought the FX market to a standstill rather than choking parallel trade. Forward contracts implied that the EGP was set to lose 20% of its value in the 12 months that followed, Bloomberg reported, adding that “traders are convinced Egypt won’t resist the pressure to weaken the pound for long” after China’s shock yuan devaluation.

The main challenge that continues to face the CBE is its ability to continue to support the pound is hovering near zero with reserves hovering around USD 16 bn, barely a three-month import cover, and stability on reserve figures in the last two months is broadly believed to have been supported by “window dressing.” Prospects for reserves in 2016 are mixed. The government is expecting an injection of foreign funding, with African Development Bank and World Bank loans in the offing and a reiterated commitment of financial support from Saudi Arabia made before the end of the year.

The CBE has had a tendency to use the end of year holiday period, and the first week of the new year, to make significant market changes, as was the case in 2012.

Squeezing the parallel market

In February, the CBE had placed caps on the amounts of USD that could be deposited. Banks were instructed not to accept more than USD 10,000 in deposits a day, with a total of USD 50,000 per month. The action was aimed at combating money laundering as well as “the final elimination of currency trading and an end to the parallel market’s dealings,” a CBE source explained to Reuters.

Throughout most of the year, the CBE presented an unwavering stance on the issue of caps on deposits, with Ramez being the target of attacks from importers. It was not until October that banks were ordered to relax their restrictions and accept larger deposits from business that export to Libya, Syria, Sudan, Palestine, Iraq, and Yemen — counties either locked out of the global financial system, or at war. The news was made on the same day that Tarek Amer was announced as the next governor of the CBE.

Macroeconomic uncertainty aside, Ramez was already beginning to lose friends domestically. He was vilified by manufacturers as his actions were seen to have starved industry of much-needed liquidity, while not providing the sector with a suitable alternative. Their concerns were exacerbated by the government’s move to prioritize natural gas supply to electricity production and to households instead of factories, a move that disrupted industrial operations further still.

Liquidity tightening instead of interest rate action

Another marked feature of the CBE’s actions in 2015, or lack thereof in that case, was keeping its interest rates unchanged throughout almost the whole year, ignoring the first and last MPC meetings of the year. 2015’s first Monetary Policy Committee meeting cut the basic rates by 50 bps to 8.75% for overnight deposits and 9.75% for overnight lending, and kept them there since until that move was reversed at the last meeting of the year.

Instead, we saw the CBE using its influence over state-owned banks to suck in liquidity from the market through non-interest rate actions. In November, National Bank of Egypt and Banque Misr issued certificates of deposits carrying a 12.5% interest, a 1.75-point premium over other banks’ products at the time. The move did not resonate with most private banks, but it served the purpose of sucking in liquidity without raising the CBE rates, which would have been reflected in a higher borrowing cost for the government.

Tarek Amer assumed the CBE’s governorship in the last week of November with a market presumption that he is a bold leader who succeeded in bringing meaningful change to the National Bank of Egypt before his tenure was cut short. The market wanted him to undo Ramez’s moves by removing capital controls and floating the EGP.

The CBE in 2016

A week into his four-year term, Amer had cleared a USD 547.2 mn backlog owed to foreign investors, a figure it said represented “all the pending backlog to date,” Bloomberg reported. He also told the Federation of Egyptian Industries’ Chairman, Mohamed El Sewedy, that the CBE will be injecting USD 4 bn to importers to clear import backlogs gradually.

The CBE is coming into 2016 with more support to the industrial sector and also a commitment to new transparency. Amer revived the Coordination Council, which is dedicated to setting monetary policy goals in liaison with the government. He appointed former governor Farouk El Okda and reappointment investment guru Mohamed El-Erian to the committee. Showing that there will likely be plenty of “firsts” during his tenure, Amer instructed the Council to meet on the same day as the MPC. On that day, what we thought would be the last MPC meeting of 2015, the CBE, for the first time in its history, decided not make a decision on interest rates, deciding, instead, to reconvene the following week, when they ended up raising the rates by 50 bps.

Amer is already moving forward with measures to improve the transparency in the CBE’s decision making. There are reports that the CBE is appointing a full time spokesperson, a positive development, in our view. One thing we are sure of in 2016: Egypt’s monetary policy developments will not be a dull affair. Amer appears set to work with the government, arguably beyond his mandate, to restore Egypt’s economic growth.

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THE MARKET IN 2015

What a difference a year makes: After closing 2014 as the top-performing bourse in the world, we’re on track to close as among the worst performers on the planet this year, with the benchmark EGX30 down a bit more than 24% YTD. But take heart: There were several days this year on which we were the worst-performing market globally, but we close the year somewhere in the middle of the pack among the worst performers.

Among the worst performers in 2015 year-to-date:

• Ukraine: -37%
• Peru: -35%
• Greece: -28%
• Columbia: -25%
• Egypt: -24%
• Nigeria -22
• UAE: -21%
• KSA: -21%

Among the best performers in 2015 year-to-date:

• Venezuela: +283%
• Jamaica: +93%
• Hungary: +43%
• Latvia: +41%
• Denmark: +27%

What was new on the EGX in 2015?

• T+1 trading launched: Next-day settlement regulations went into effect on Thursday, 11 June. Adoption was optional as T+2 clearance remained in effect.
• We got a new, probably better gauge of market performance in the EGX50 — but everyone continues to benchmark against the EGX30. The EGX50, an equal weighted index, launched on 2 August at the same time as the bourse tweaked conditions for inclusion in the EGX30.
• The first exchange-traded fund went live on 14 January. Beltone’s XT-MISR was the first to launch, tracking the EGX30.

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MOVES

Ahmed “Dasha” Badrawi stepped down as CEO of SODIC in September, going on to become CEO for Egypt at Fawaz AlHokair Group.

Amr Helal left EM private equity leader Abraaj to take the helm of the USD 300 mn Duet-CI Capital Egypt Opportunities Fund, the company announced in August.

Arshad Sufi retired from BG Egypt as chairman in December 2015, having been the company’s president until July.

Ayman Waked returned to Sigma Capital as director of sales and equity investments, joining from Beltone Asset Management, where he became head of trading in 2008.

David Kirkpatrick was replaced as Egypt bureau chief of the New York Times by Declan Walsh. Kirkpatrick is on book leave.

Deutsche Bank appointed Javeed Ameen as Middle East and Africa COO in April, replacing Phillippe Vollot, who moved to Frankfurt to become global head of regulatory relationships. Ameen had been COO in Saudi Arabia since 2008.

Essam Mohamed El Sagheer was appointed chairman of Egypt Post in May.

Farag Abdel Hameed was appointed acting chairman of the United Bank of Egypt until year’s end after Mohamed Ashmawy stepped down to join Tahya Masr.

Hafez Ghanem re-joined the World Bank as the vice president for the Middle East and North Africa in March following a stint as a senior fellow at the Brookings Institution.

Haitham Abdou was appointed as managing director of Xerox Egypt in November, succeeding Ashraf Al Arman.

Hassan Younes, the former minister of electricity, joined PGESCo as chairman in May.

Hazem Metwally was promoted CEO of Etisalat Misr, where he was previously chief commercial officer. He succeeded Saeed Al Hamli.

Hisham Ramez stepped down as governor of the Central Bank of Egypt just weeks before the end of his term in November.

Ian Gray returned home to Egypt — at least for quarterly board meetings — as the former CEO of Vodafone Egypt was named the company’s new chairman in October.

Khaled Bichara will become CEO of Orascom Development Holding on 1 January.

Khaled Kacem was named president of BG Egypt in July, succeeding Arshad Sufi, who became chairman until his retirement in December 2015.

Khalid Othman and Bassem El Shawy joined Emaar in August as chief development officer and director of investor relations, respectively.

Magdy Hassan was promoted to General Manager for Egypt and North Africa at MasterCard in December.

Magued Sherif took the held of SODIC as CEO in October, joining the board of directors at the same time.

Maha Baligh joined Sigma Capital as chief executive officer in March following runs as CEO of Arab African Investments Holding Company and EFG Hermes Asset Management.

Mahmoud Abdellatif, the former chairman of the Bank of Alexandria, was appointed chairman of Tahya Masr in April.

Mohamed El Nawawy stepped down as CEO of Telecom Egypt in May.

Radi El Helw and Cherif Hechmat moved to Arqaam Capital in April. El Helw, a former head of brokerage at Beltone, was most recently founding partner of WealthProtect SA in Geneva; Hechmat was executive director at Pharos Holdings’ brokerage shop.

Rodney J. Eichler, who served for more than 12 years in Egypt with the Apache Corporation, including a high-profile run as country manager, retired in June as executive vice president and executive advisor to the CEO.

Sadiq Hussein joined EFG Hermes Asset Management as head of business development. He was most recently head of MENA Equities and Global Frontier Markets at J.P. Morgan Securities in Dubai.

Sameh El Mallah became managing director of Intel for Egypt and the Levant in September, succeeding Karim El Fateh.

Sherif Fathy was appointed chairman of national flag carrier EgyptAir in August, succeeding Sameh El Hefny.

Soha El-Turky was named head of business development at Barclays Egypt, returning to the bank after a three-year stint at the UK head office.

Stephen Murphy was named executive deputy chairman of London-listed Obtala Resources. Murphy continues to serve as special advisor at Qalaa Holdings.

Tarek Amer, the former chairman of the National Bank of Egypt, became governor of the Central Bank of Egypt in November.

Tarek Tantawi became Chief Operating Officer at CI Capital in March and was subsequently tapped to become Deputy CEO in July. He joined from IDJ, the local JV of Pepsi and Almarai, where he was CFO.

Wael Amin joined venture capital outfit Sawari Ventures as a partner in February, leaving ITWorx, which he founded at age 18.

Waleed Gad was appointed Chairman of Telecom Egypt in September, replacing Mohamed Salem.

Walid El Hindi and Ahmed Fathallah resident as chief development officer and chief investment officer, respectively, at Emaar Misr in August.