Laptop ban could end today?

Could it be, will the laptop ban on Egypt be lifted today? US authorities have finally seen fit to remove the three-month old laptop ban on EgyptAir flights heading to the US, according to a statement by the company. The ban’s lifting will be effective today and will be provisional for a year or until another emergency amendment is introduced, said EgyptAir CEO and Chairman Safwat Musallam, according to Reuters. He added, however, the ban remains in place for flights to the UK. Civil Aviation Minister Sherif Fathi welcomed the move, adding that the ministry has been working in coordination with the “entities” and bodies at Cairo International Airport to implement new security measures on flights to New York. Entities here is probably a reference to a security delegation from the US Department of Homeland Security (DHS) which arrived today to inspect Cairo’s airport.

Hold your horses, the lifting of the ban for Egypt, Saudi Arabia and Morocco is pending an assessment by the DHS in the coming weeks, its spokesman David Lapan said, according to Reuters. Lapan said DHS would confirm the removal of the measures for EgyptAir after they verified the airline’s security procedures. We’ll have to wait for today to see when exactly the ban will be lifted and hopefully try to reconcile these two contradictory statements.

More banks have started to move interest rates in response to the CBE’s 200 bps interest rate hikes last Thursday. By Al Borsa’s tally, 11 banks have moved monthly interest rates on deposit certificates with variable interest rates to between 14.75-19.25% yesterday. These include Kuwait National Bank and United Bank. From what we can tell, Banque Du Caire was the first among the top three state-owned banks to move interest rates. State-owned banks reportedly held had their Alco (assets and liabilities committees) meetings yesterday, but nothing has yet emerged from Banque Misr or the National Bank of Egypt on how they will move.

Did the interest rate cuts wipe out gains from the fuel and electricity subsidy budget cuts? Beltone Financial seems to think so in a research note it put out yesterday. The investment bank sees the rate hike as having tacked on an additional EGP 50 bn in debt service, essentially wiping the gains made from a near EGP 51 bn in savings from subsidy cuts. This appears to go against the wisdom of Finance Minister Amr El Garhy who denied the impact on the hikes on the budget.

The embattled automotive sector may be among some of the hardest hit industries by the hike, with the Egyptian Automotive Manufacturers Association saying through its CEO Hussein Moustafa that move may compact declines in sales by another 5-10%. Beltone also sees that the some of the biggest beneficiaries of the rate hikes include commercial banks, real estate developers, petrochemical and fertilizer manufacturers due to their low debt and land assets.

Meanwhile, the Support Egypt Coalition — Parliament’s largest electoral bloc — is looking to hold a meeting to discuss the impact interest rate hikes on investment with the heads of four House of Representative committees some time this week or the next, Al Borsa reports.

The new electricity prices came into effect when it was published in the Official Gazette on Monday, according to Youm7. The hardship raises for state bureaucrats (covered and not covered by the Civil Service Act), which President Abdel Fattah El Sisi ratified last month, was also published in the Gazette on Tuesday.

Egypt, KSA, the UAE, and Bahrain’s foreign ministers are scheduled to meet with US State Secretary Rex Tillerson in Jeddah today to relay their stance on their boycott of Qatar, Egypt’s Foreign Ministry said in a statement yesterday. Tillerson, who is engaging in shuttle diplomacy, signed an agreement with his Qatari counterpart yesterday to combat financing terrorism, Reuters reports. This comes as Qatar announced the arrival of more Turkish troops at its military base in Doha, according to the newswire.

This comes as France’s Total will invest USD 3.5 bn over five years in Qatar’s offshore Al Shaheen oilfield and expects to keep production running at 300,000 barrels per day in future, French and Qatari executives said on Tuesday.

No investment road map out yet on the Investment and International Cooperation Ministry’s website. We’ll check again later in the week.

Investment Act’s exec regs on track for August delivery: The Sherif Ismail cabinet is on track with plans to issue the executive regulations to the Investment Act in August, Ismail said on Tuesday, according to Ahram Gate. The cabinet will be sending the regulations over to the Egyptian Council of State once it concludes its review and incorporates remarks from the finance and housing ministries during its coming meetings this month. The Union of Egyptian Investors’ Association will also be sending their remarks on the regulations for consideration and will lobby the cabinet to allow tobacco production at private freezones, AMAY says. As we noted yesterday, they are also not happy about that foreign labor can make up 20% of a company’s hiring, not to mention their ludicrous proposal that passing the regs require their approval.

The Union (a fitting name considering their confused leanings) will also be meeting with CBE officials in two weeks’ time to devise a solution for companies who have rejected the CBE’s settlement of a spike in importer debt from letters of credit following the EGP float, Al Borsa reports.

Cairo and Moscow will be signing the contracts for a Russian industrial zone in east Port Said by September, Russia’s Deputy Industry and Trade Minister Georgy Kalamanov said on Tuesday, according to TASS.

The airwaves offered us a random assortment of topics last night, between private sector wage raises, a new traffic law, and Qatar’s anti-terror agreement with the US.

On Hona Al Asema, Lamees Al Hadidi spoke to Labor Minister Mohamed Saafan about the private sector raise agreement that he’ll be signing on Sunday with the Support Egypt Coalition (majority bloc). The ministry explained that the raise will range from a minimum of EGP 165 to a maximum of EGP 330 per month.

The agreement will not oblige employers to pay the raise, the minister clarified, saying that “they are asked to do it under the umbrella of corporate social responsibility (watch, runtime 4:25).

The raise will come into effect starting July, Support Egypt Coalition head MP Mohamed Elsewedy told Lamees. He explained that the decision was studied first by four House committees and was coordinated with the Federation of Egyptian Chambers of Commerce and other business associations (watch, runtime 4:13).

The agreement will set the terms and conditions for the raise, Federation of Egyptian Chambers of Commerce chief Ahmed El Wakil also told Lamees, explaining that companies that have already increased salaries this year, for example, will not be asked to take part in the initiative (watch, runtime 4:27).

Over on Yahduth fi Misr, Sherif Amer covered the new draft Traffic Law that the Interior Ministry plans on sending to cabinet now that it has finished drafting it. The legislation is expected to introduce new clauses and amendments to the old law to help improve overall traffic conditions across the country, according to AMAY, such as regulations and licenses for tuk-tuks and their drivers, more stringent driving tests, a point system for driver’s’ licenses, and drug tests for professional drivers.

On Kol Youm, Amr Adib naturally took up verbal arms against the US for inking an anti-terror agreement with Qatar on Tuesday, loudly accusing ‘Murca of trying to “benefit from the crisis through arms sales. Adib then went on to say that “it’s a known fact” that the US is involved in terrorism and has used Qatar to overthrow the Egyptian regime under Barack Obama’s rule (watch, runtime: 9:15). Why not jump on their throats for the current heat wave Adib.

Meanwhile on Masaa DMC, Osama Kamal hosted CIB Chairman Hisham Ezz Al Arab to talk about CIB winning Euromoney’s World’s Best Bank in the Emerging Markets. Ezz Al Arab explained that it was CIB’s role in supporting the economy during the difficult years of 2011 onwards that allowed it to win the award (watch, runtime 10:04).

Ezz Al Arab also told Kamal about CIB’s journey and long history, as well as the new policies he began implementing once he took office in 2000, changing the bank’s overall outlook and dynamics (watch, runtime 3:56).

INVESTMENT WATCH – China Fortune Land Development Company (CFLD) is at it again and looking to invest USD 4 bn in developments in the New Administrative Capital over the next five years, according to an Ittihadiya statement picked up by Al Borsa. This latest wave of mega investments from CFLD will be geared towards developing industrial parks in the new capital, a specialty for the company.

So what exactly is going on with CFLD’s investments? The offer, which was discussed at a meeting between the ministers of investment and housing with President Abdel Fattah El Sisi on Tuesday, will supposedly bring CFLD’s investments in the new capital to USD 13.5 bn over the next ten years. This would essentially mean that the company may have lowered its projected 10-year investment from USD 20 bn, as we have heard numerous times since the first pledge was announced last year. We’ve heard, as recently as last May, that the company was still looking to invest the USD 20 bn — geared towards developing 14,000 feddans in phase 1 of the new capital — and that it would sign a contract soon.

NTA signs USD 4 bn MoU with Bombardier for development of Metro’s Line 6: The National Tunnels Authority (NTA) signed an MoU on Tuesday with Canada’s Bombardier to begin conducting feasibility studies and preparing designs ahead of constructing the Cairo Metro Line 6, a Transport Ministry statement says. The agreement, which sets the project’s initial investment value at USD 4 bn, also covered the supply of locomotives and equipment necessary for the line’s operations and maintenance. The two sides agreed that local components will make up 40% of the project’s total input. Bombardier is expected to arrange financing for the project once designs are set by the end of July. The 24-stop Line 6 will cut across Cairo and should be operational by 2022, as we noted yesterday.

In a sign that we may be heading towards becoming an energy hub by 2018, the Oil Ministry is letting go of one of its FSRUs next year, just as production from the Eni’s Zohr field comes online later this year, Oil Minister Tarek El Molla tells Al Borsa. He tells the newspaper that Egypt will stop importing natural gas by 2018, and will begin exporting gas by 2019. The oil ministry had said on Monday that its deadline for gas independence was moved forward to 2018.

The Supply Ministry is looking to revert back to an old wheat milling system that would allow it to give companies a set price for their milling services, Al Borsa reports. Under the new system, the Supply Ministry would also have to acquire wheat bran for the Agriculture Ministry’s livestock projects. The ministry is currently in talks with wheat mill owners to determine a fair price per tonne of milled wheat, with the Federation of Egyptian Industries lobbying for EGP 540 per tonne in exchange for the ministry collecting the wheat bran, Supply Ministry spokesperson Mohamed Sewid said. The ministry plans to reach a final agreement by the end of the month and bring the new system into effect the month after that.

Contractors want state to include new fuel and electricity price hikes under Contractors Compensation Act: Contractors are requesting that the state factor in the effects of the latest fuel and energy price hikes when repricing their contracts under the Contractors’ Compensation Act, New Urban Communities Authority (NUCA) chief Zein Al Abidin Mohamed tells Al Borsa. Companies are blaming the rise in the costs of building materials on “the instability of the government’s fiscal policies.” The Housing Ministry has already started revising contracts that came into effect in 2016 and is waiting for the legislation — which will compensate state contractors for losses incurred after the EGP float — to determine the exact price differentials, unnamed government officials tell the newspaper. NUCA’s initial estimates had reportedly set the compensation value at 7% of the original value of the contract, they add. The Sherif Ismail cabinet had approved this month a six-month extension on all contracts with the private sector signed between 1 March and 31 December 2016 to make them eligible for compensation. The bill, however, has been in the works for several months, with rumors even suggesting that the House of Representatives was studying alternatives, claiming the act would cost state coffers EGP 10 bn that it simply can’t afford. Maybe contractors should just be thankful they have that much.

Belarus’s MAZ bids on EUR 9 mn auto factory in Egypt: Belarusian automaker MAZ could be launching a new factory in Egypt under a EUR 9 mn contract if it wins a tender issued by the ministries of defense and military production, the Belarusian Telegraph Agency reports. The fate of the project, which would produce around 2,000 vehicles a year, will be determined after the company is done testing a custom-made chassis for Egypt in the Sinai deserts.

Belarusian utility vehicles maker Amkodor is also in talks with Egyptian partners to establish a manufacturing project in Cairo and is set to begin selling loaders in the Egyptian market in 2H2017. Amkodor is also bidding on a USD 3 mn contract to supply grain-dryers.

M&A Watch- The Egyptian Financial Supervisory Authority (EFSA) has approved a mandatory tender offer by Saudi outfit NAD Development & Investment Company to acquire the remaining to acquire 100% of Egypt for Poultry (Egypco) at a share price of EGP 2.57, according to an EFSA notice. NAD, which already owns a 38% stake in the company, is estimated to pay c.EGP 75 mn for the remaining 62%. NAD is chaired by Nawaf Abdullah bin Dayel, who had reportedly invested in three Egyptian agrifood companies between May 2011 and 2012.

Several new British companies are looking to enter the Egyptian market with new investments, having been encouraged by the country’s recent economic reforms and improvements to the business climate, according to UK Ambassador John Casson. Casson did not provide details on the companies or the expected size of investments. According to the ambassador, the companies are eyeing investments in renewable energy, basic commodities, telecoms, infrastructure, banking, education, and wastewater systems. Casson also pointed to the 61% increase in British tourists’ overnight stays in Egypt (no thanks to the UK government) as evidence of British companies’ commitment to Egypt.

Cairo’s hotel market appears to be on track to achieving pre-2011 occupancy levels, says Colliers International’s latest MENA Hotel Forecasts report for June-August 2017. Occupancy levels in Cairo are seen rising to a 72% average, despite a 17% year-on-year drop in revenues per available room due to the exchange rate. Occupancy rates for Sharm El Sheikh and Hurghada are also expected to stand at 41% and 42%, respectively, while Alexandria is seen reaching a 75% average occupancy.

This comes as the number of tourist visiting Egypt grew 68.4% year-on-year in April to 716K, according to CAPMAS figures which ran in Al Mal. Visitors from the EU increased 101.5% y-o-y to 270K. German tourists made up the bulk of EU arrivals, with their numbers increasing 40.7% followed by visitors from the UK, whose numbers grew 10.4%, while tourists from Italy increased 9%.

EARNINGS WATCH- Qatar National Bank Alahly reported a consolidated net profit of EGP 2.73 bn in 1H2017, up from EGP 1.97 bn in the same period last year, according to Reuters.

MOVES – The CBE’s board of directors approved the promotion of five CBE Assistant Sub Governors on Tuesday. Rami Aboul Naga has been bumped up to Deputy Governor for the monetary markets sector and reserve management, while Mai Aboul Naga is now Deputy Governor for Observing and Supervising banks. Ayman Hussein is now Deputy Governor for the Payment Systems and IT and Mohamed Ali became Deputy Governor for the Internal Auditing. Hany Omar has been promoted to Deputy Governor for Security, according to Al Mal.

CORRECTIONs – A couple of Mia Culpas this morning with our apologies. First, a grave typo went out yesterday in our coverage of inflation report. Monthly inflation recorded 0.8% in June 2017 for both core and urban inflation and not 1.8% as we have said in the story. We would also like to clarify in our story on university tuition increasing 10%, we had said that the American University in Cairo collects half of its fees in USD or EGP equivalent, which is not the case anymore. AUC had amended its tuition payment policy in March to cope with the EGP float, whereby Egyptian students pay their tuition in EGP. We don’t like making excuses for ourselves, but if we had to, we pick the heat. h/t SE and DR

Abu Dhabi National Oil Co (ADNOC) is reportedly planning an IPO of its service stations unit, with a value of as much as USD 14 bn, Bloomberg reports. ADNOC is expected to tap investment banks for the listing as early as this week. Sources tell Bloomberg, however, that the IPO is not certain, and the plans may be scrapped. The company had said earlier this week it was considering selling minority stakes in some of its service units, and was looking to accelerate its growth in cooperation with international partners.

Flat6Labs has made its first closing on its EGP 100 mn Flat6Labs Accelerator Company (FAC) fund, which will allow it to accelerate more than 100 Egyptian early stage startups over the next five years, the company said in a statement. The fund will provide each startup with EGP 1 mn in seed funding, in addition to training and mentorship services. FAC’s first closing comes as Egypt Ventures signed an agreement to invest EGP 10 mn in Flat6Labs. “Today’s announcement marks a significant step forward for Egyptian entrepreneurs and startups and we’re thrilled to be spearheading it with our flagship accelerator program in Cairo,” Flat6Labs founder Ahmed El Alfi said. Investment and International Cooperation Minister Sahar Nasr signed the agreement with Flat6Labs, Egypt Ventures, and NI Capital, the ministry announced yesterday. The agreement is in cooperation with the Egyptian American Enterprise Fund and the International Finance Corporation.

Separately, Egypt Ventures wants to increase its capital to EGP 1 bn from EGP 451 mn, according to Deputy Investment and International Cooperation Shehab Marzban who is also the company’s CEO. Egypt Ventures was established by the ministry, the Saudi Fund for Development, and NI Capital last March.

In other startup news, MENA on-demand video streaming service STARZ PLAY raised a total of USD 125 mn since its launch in 2015, the company announced. New investments in 2017 include those from Lionsgate’s Starz, asset manager State Street Global Advisors, and media and tech investment firms SEQ Capital Partners and Delta Partners. The funds will go towards enhancing customer experience and acquiring new programs. STARZ PLAY has 700,000 paying subscribers.

Three Islamic monuments were restored in the iconic Moez Street (above) as part of a 2015 restoration campaign launched by the Antiquities Ministry, according to Egyptian Streets. The monuments of Sabil Kuttab of Khusro Pasha, Qubbet Nagm El Din Ayyub, and Moheb El Din El Tayeb Hall are part of the first EGP 9 mn phase to restore nine monuments. The campaign targets restoring a total of 100 monuments.

Leading the conversation on Egypt in the international press this morning is the removal of the electronics ban on Egypt-US flights. Reuters notes that Egypt was one of the last country to be given a reprieve from the ban, after airlines in Turkey, the UAE, Jordan, Kuwait, Morocco, Saudi Arabia, and Qatar all announced they were granted exemptions.

Is Egypt’s al-Azhar moving to ‘secularize’ its non-theological schools? By admitting a Christian student for the first time in its history, Al Azhar University looks like it has taken its “first step towards a long-awaited reform” that would see it open its non-theological school to non-Muslims, Sonia Farid says on Al Arabiya. The story of Abanoub Girgis Naeim, the first Christian resident at Al Azhar University’s School of Dentistry in Asyut, might have provided the institution with “ an opportunity to refute claims of its intolerance” and silence critics who accuse “Al Azhar of inciting violence against Christians through material taught to its students.”

Egypt’s Coptic identity is at risk from Daesh and the “prevailing culture”: Heba Saleh took to the pages of the Financial Times to talk about how Egypt’s Copts are “keeping their faith” in the fight against Daesh, even though the militant group has made a target of the religious minority. But terrorism isn’t the only risk to identity, warns Ashraf Ramelah in a piece for Canada Free Press, as “the indigenous Copts are under threat of being swallowed up by the prevailing culture’s aims to absorb every single person under the umbrella of Arab-Muslim.”

Here he is, now let them be: We don’t usually engage in tabloid fodder. But since Egyptian social media, and now even Fortune Middle East, can’t shut up about Nayel Nasser — the Egyptian dating Bill Gate’s daughter Jennifer Gates — here he is. We don’t get why an entire nation is now laying claim to this poor guy’s dating life. Must be our patriotic fervor. Jokes are pouring about how much Gates will be giving to Egypt. We wonder what will happen when they realize a chunk of his fortune is going to charity after he dies.

Egypt is committed to cooperating with Italy on the investigation of Italian student Giulio Regeni’s murder last year, President Abdel Fattah El Sisi told an Italian parliamentary delegation visiting Cairo yesterday, according to an emailed Ittihadiya statement (pdf). El Sisi’s statement comes amid complaints that Cairo has been stalling the investigation, causing Rome to withdraw its ambassador in Cairo, Reuters notes. Meanwhile, Italy recently passed a new law on torture, but Human Rights Watch says the legislation’s loopholes reduce its credibility in demanding justice for Regeni.

Egypt has reportedly agreed to open the Rafah border crossing with Gaza only in the presence of Palestinian Authority (PA) forces, Fatah leader Azzam Al-Ahmad announced on Monday, Haaretz reports (paywall). The move, which shows Egypt is trying to maintain a balance in its relations with the PA and rival faction Hamas, conflicts with recent news reports suggesting that Egypt would reopen the border crossing normally come September. Egypt and Hamas’ relations have been warmer lately, with Egypt sending fuel shipments to Gaza and agreeing to supply Hamas with security equipment.

Polish President Andrzej Duda will visit Egypt by the end of 2017, at the head of a delegation of 150 investors, Trade and Industry Minister Tarek Kabil told the press on Tuesday, according to Al Masry Al Youm. The announcement came at the minister’s meeting with a delegation from Poland’s Pomeranian Special Economic Zone, where talks focused on the Polish industrial zone that will be established in the Suez Canal Economic Zone, with investments in automotive, food production, petrochemicals, and renewable energy.

The government be paying more for cotton it purchases from local farmers, Al Borsa reports. Prime Minister Sherif Ismail will be meeting with the ministers of agriculture and manpower to set a final price, according to Agriculture Ministry spokesman Hamed Abdel Dayem. As it stands, the proposed price increases would have the government buying long-staple cotton from the Delta for EGP 3,000 per qintar, up from EGP 1,250 before. Short- and medium-staple cotton from Upper Egypt would be priced at EGP 2,500 per qintar, up from EGP 1,100 before. The government is also looking to cultivate 220k feddans of cotton next year, Ismail told the press. This season’s cotton harvest season had fallen far below the government’s targets, reaching only 127k feddans of the planned 250k feddans. This was also 3% lower than the 131k feddans planted last year. The state is also planning to double long-staple cotton production and exports in FY2017-18.

The Supply Ministry is looking to double the country’s rice production this harvest season to 6.5 mn tonnes, up from 5.1 mn tonnes last year, Reuters reports. Strategic rice reserves are also expected to increase over the next 10 days to fulfill domestic needs for 12 months, up from four months currently, an unnamed ministry source says. El Moselhy had said on Monday that the Sherif Ismail government will maintain the ban on rice exports until local needs are covered and also allow rice prices for the coming marketing season to float freely and be determined by market forces.

German pharma manufacturer Boehringer Ingelheim is planning to increase its investments in Egypt by 15-20% in 2018, Al Mal reports. The company invests around EGP 20 mn in Egypt each year and is eyeing new investments during the coming period in light of improving business conditions,Marketing Director Mohamed Dababy tells the newspaper.

Telecom Egypt (TE) signed an agreement with the National Bank of Egypt to arrange a EGP 13 bn loan from a consortium of banks to upgrade its infrastructure and mobile internet services, Al Mal reports. CIB, QNB Al Ahli Bank, Banque Misr, and Credit Agricole will contribute to the loan. The state-owned landline monopoly is racking up expenditures on launching its 4G network, which may drive it to consider exiting its 45% stake in Vodafone Egypt, Beltone Financial predicts, according to Al Borsa. The investment bank expects TE to direct the funds towards funding the EGP 7 bn it must pay by 2021 for its 4G network license. Beltone also sees TE as being the mobile network operator most negatively affected by last week’s interest rate hikes, as it has relied on credit facilities to finance its 4G license and infrastructure.

Arabian Cement Company signed a seven-year EGP 231 mn loan agreement with the National Bank of Egypt on Tuesday, according to an EGX filing. The loan will be used to finance the purchase of a new coal mill. It will also be used to finance a mechanical, energy-saving bucket elevator and to establish a new system for feeding cement mills that will improve output quality.

Express shipping companies verbally informed e-commerce platforms last week that they would be raising their prices for customer deliveries by 50% after the recent fuel prices increases, Jumia CEO Hesham Safwat tells Al Mal. Official notice should be sent in a few days’ time, but Jumia will not be passing the full increase onto customers. DHL Egypt General Manager Ahmed El Fangari said increases were not officially approved, as the company is still studying the impact of fuel price increases.

Congratulations, Misr. We’re up to 93.332 mn citizens according to a CAPMAS statement commemorating World Population Day. This compares to 92.1 mn citizens in the beginning of 2017 and 72.8 mn in 2006, when the last census took place. 51% of the Egyptian population is male and 31.3% of Egyptians are younger than 15 years old, while only 4.3% are aged 65 or older as of January 2017. Cairo is also the most populated governorate, with 9.6 mn residents. We certainly don’t doubt that.

A number of passengers fainted on an Air Cairo plane with no ventilation or air conditioning, a video posted on Twitter shows (runtime 0:28). The flight was heading from Kuwait to Borg El Arab airport in Alexandria.