Will BMW stop assembling in Egypt? U.S. funds scholarships for 1,900 Egyptians. El-Sisi in Cyprus tomorrow for tripartite meeting. KSA to mediate Egypt’s reconciliation with Turkey, Qatar? Electricity Min says coal power is “completely safe.”

WHAT WE’RE TRACKING TODAY

We’re paying close attention today to the fate of the domestic automotive assembly industry and the hundreds of thousands of jobs it supports amid new details on Mercedes-Benz Exit from Egypt and news thatanother domestic assembler will be reviewing the feasibility of its assembly operations.

The Egyptian German Automotive Group, the exclusive assembler of Mercedes-Benz automobiles in Egypt, said in a company statement that assembling automobiles is not feasible in the long-term, Al-Borsa reported yesterday The company, which will stop domestic assembly of the C, E, S and GLK class vehicles in May, will continue to export brake systems to Daimler AG. EGA also confirmed that Daimler AG will be selling its minority stake in the company to National Automotive Company (NATCO), the general agent and distribution partner of Mercedes Benz Egypt. Mercedes-Benz’s decision to halt it vehicle assembly activities in Egypt was brought about by the government’s implementation of the EU-Egypt Association Agreement, which requires that Egypt gradually eliminate tariffs and customs duties on Eurozone manufactured goods by 2020.

On a related note, Bavarian Auto Group, the exclusive manufacturer and distributor of BMW automobiles in Egypt, will undertake a feasibility study on its manufacturing activities in Egypt.

Meanwhile: The next session in the retrial of Al Jazeera English journalists Mohamed Fahmy and Baher Mohamed, reportedly with an English-to-Arabic translator in place. Also today, the Middle East Solar Industry Association’s Renewable Energy Trade Mission gets underway at the Marriott Palace Hotel in Zamalek.

LAST NIGHT’S TALK SHOWS

Ramadan is Coming (say that in your best Jon Snow voice) and Amr Adeeb was preoccupied with all things bovine last night — cows, meat, milk and the prices thereof in the consumer market.

“The meat industry in Egypt is a mafia. We have been talking about importing meat from Sudan and Ethiopia for some time now, but of course they want to stand against it. They are a monopoly that wants to have control over prices,” said Adeeb, who complained incessantly about the high cost of, basically, everything in Egypt. “Have you ever heard of the price of anything going down in Egypt? We never have real sales and it is actually illegal to advertise and say directly that your product or service is cheaper than a competitor’s. If the price of a commodity goes down abroad, why doesn’t it go down here?”

“Mercedes has announced that it will stop manufacturing in Egypt. It is no longer cost effective for them to produce cars in Egypt with the tariff reductions on cars coming in from the EU. I suspect that BMW will follow suit shortly,” said Adeeb.

Lamees El Hadidy led an interesting discussion about the work ethic in Egypt — or the lack thereof, whichEl Hadidy called the “tuktuk culture.” Her studio guests included Magdy Tolba, the Chairman and Managing Director of Cairo Cotton Center, a leading Egyptian ready-made garment exporter, and Abdel Wahab El Ghandour, Professor of Engineering at Ain Shams University.

“If you can’t find a job or are too lazy to work, then go and drive a tuktuk. It pays better, you are your own boss, and you need not abide by any kind of regulation. People are now giving up manufacturing jobs to go drive Tuktuks. It’s a dream job,” said El Hadidy who once again unleashed her hatred of the three-wheelers. “Other than the company that manufactures them, I really fail to understand who benefits from these vehicles.

Both of her studio guests addressed issues such as vocational training and working to bridge the gap between what the market needs in terms of skills and what is being taught in government schools and vocational training centers. Guests and callers alike agreed that Egyptian labor suffers from extreme laziness.

“Egypt doesn’t have an unemployment problem, it has a laziness problem. Workers get paid on Thursday, they take off on Friday and then disappear until the money runs out. Nobody wants to work, but they all want money,” said one caller, a factory owner who claimed that he has an ongoing recruitment problem with both skilled and unskilled labor.

“Today a country like Bangladesh is doing much better than we are in the garment industry. This shouldn’t be the case. All closed factories have to be opened. The problem is that approximately 20% of our factories are struggling financially; no less than 7,000 factories are in this position and the banks are not willing to help,” said Tolba.

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SPEED ROUND

President Abdelfattah El Sisi confirmed statements made by Parliamentary Affairs Minister Ibrahim El-Heneidy last Wednesday that parliamentary elections will not take place until after Ramadan, asreported by DNE. The president also noted in a Labor Day speech at the Police Academy that it would take “two years … [for Egypt] to get back on its feet.”

Egypt locked out of IDB funding until it starts repaying loans: The Islamic Development Bank (IDB) will not be able to lend Egypt more money unless Egypt begins completing projects and start to repay loans. “Unless we’re able to expedite completion of the projects, we won’t be able to approve additional ones this year,” Walid Abdelwahab, the IDB’s director of infrastructure told Bloomberg. Implementing projects on time creates “headroom for exposure limit.” The IDB has a self-imposed limit on how much it can lend and has already lent Egypt USD 12.2 bn. For now the only way for IDB to resume financing in Egypt is to wait for projects to mature, Abdelwahab told Bloomberg. (Read)

Water treatment plant supplying Agamy and West Alexandria shut down: The Holding Company for Water and Wastewater (HCWW) announced a state of emergency yesterday after an oil pipeline passing to a creek that feeds six water-treatment plants in Alexandria and Beheira exploded. The explosion led to leakage into the water stream, and the HCWW is monitoring the situation closely. The Mansheya 2 water treatment plant was shut down as a result of the incident, but a source told Al Mal that it should resume operations shortly. The holding company has since said it suspects terrorism may be involved.

GDF Suez has asked the Egyptian government to raise the purchase price of the natural gas it produces to USD 4.5 per mmBtu from USD 3 per mmBtu. GDF Suez cites the increases in production cost at its West Borrollos concession in the Mediterranean as the main driver for its request for the price change. The company currently produces 50 mcf of gas per day from the concession and said drilling new wells hinges on approving the price revision. A source at the Ministry of Petroleum said negotiations between the two parties are currently underway and that no conclusion has been reached yet. In other news, GDF Suez is changing its name to “Engie” to “reflect a changing energy industry,” according to Market Watch. You can check out their new website here. (What’s next? Shell changing its name to ‘Wael’?)

EFSA is sending its review of the Egyptian Accounting Standards to the Investment Ministry for review this week, Sherif Samy said. The final amendments are being made currently to ensure that the domestic regulations are in line with international standards, according to Al Mal.

Following the crash of a Cairo Metro train in Abbassiya on Sunday, drivers on the Cairo Metro’s third line went on strike, shutting the line down completely. They reject the notion that their colleague could be blamed for the incident, which may have caused some EGP 41 mn in damages, after a leaked reported suggested the driver could be at fault for speeding. The drivers have filed a police report accusing the transport minister and the head of Cairo Metro of negligence and claiming trains on the third line are faulty.

The Tarabin Bedouin tribe of the Northern Sinai has attacked Ansar Beit El Maqdis south of Rafah, reports Youm7, reportedly in retaliation for ABM’s killing of a Bedouin boy on Monday morning. A source from El-Tarabin told Al-Mal that about 300 heavily armed gunmen from the tribe have brought under siege the village of Al Berth, a reported stronghold of ABM, or Wilayet Sina, as the group has been calling itself since declaring itself a franchise of Daesh. The source told Al-Mal that firefights were ongoing and that El-Tarabin have a duty to avenge the death of their fallen tribesmen.

1,900 Egyptians to study in America on scholarship under U.S.-Egypt Higher Education Initiative: In partnership with the Egyptian Ministries of International Cooperation and Higher Education, the U.S. has launched the U.S.-Egypt Higher Education Initiative, according to a release by the U.S. Embassy in Cairo on Sunday. The program will provide university scholarships in the United States to 1,900 Egyptian students at a total cost of USD 250 mn. Read the statement.

INTERVIEW- Co-CEO of Palm Hills Development Tarek Abdel Rahman speaks to Worldfolio on the real estate sector in Egypt. The initial comments on the expectations regarding the EEDC imply the interview took place before the conference, but the focus of the interview is on the real estate sector in Egypt and the projects which Palm Hills is currently pursuing. (Read)

Government in negotiations to reimburse Omar Effendi investor, possible further privatization in the works: In the latest development regarding a re-nationalization case which took place following the 20111 revolt, AMAY is reporting that the ministers of investment and finance are currently in negotiations to reimburse Saudi investor Gamil al-Qanbeet his estimated EGP 589.4 mn investment in retailer Omar Effendi. Once the situation becomes more clear, some branches of the chain will be offered for privatization, according to Effendi’s head Ezzat Mahmoud. (Read in Arabic)

Egypt has lost control of EgyptSat 2, an expert from the Russian Federal Space Agency claims, and attempts to regain control have so far failed. Egyptian authorities have consistently denied these claims. The satellite’s mission is believed to be the provision of high-resolution views of Earth for scientific, environmental and security use.

New standards and rules governing the use of coal in the cement industry and power plantscame out yesterday, Environment Minister Khaled Fahmy said, noting that the regulations are amendments to the Environmental Affairs Law (law 4 for 1994), which Fahmy noted had been approved by Cabinet and published in local newspapers on 19 April. (Read in Arabic)

Cabinet to discuss anti-illegal immigration draft law on Wednesday: The Cabinet will debate on Wednesday a draft law governing irregular migration, as reported by Daily News Egypt. Intended to help stem the flow of irregular migrants trying to come in boats across the Mediterranean attempting to reach southern Europe, the draft law seeks to introduce stiff new penalties for those who organize or even participate in such attempts with punishments ranging from prison to the death penalty.

Commentary: This draft law operates on the logic that a desperate migrant who is already risking death at the sea is going to be deterred by the death penalty. If passed, what would this law say about us as human beings? That we will go to the trouble of rescuing migrants at sea just so that we can kill them ourselves? While we’re on the topic, may we please note that the death penalty, in all countries, in all time periods past present and future, for any reason whatsoever, does not serve as an effective deterrent, is forever prone to human error, and in the context of Egypt, has done nothing to improve our national security?

Emerging markets regulators hold annual conference in Cairo: Egypt played host for the first time to 40 regulators from the Growth and Emerging Markets division of the International Organization for Securities Commissions (IOSCO). The three-day meeting, which got underway yesterday, will discuss means of developing capital EM capital markets.

President El Sisi is in Cyprus on Wednesday for a tripartite summit with Nicos Anastasiades, the Cypriot President and the PM of Greece, Alexis Tsipras. They will discuss the demarcation of the maritime borders between the three countries and cooperation on regional security, according to Al Ahram.

Britain’s outgoing government said it will oppose attempts to acquire BP, wanting it “to remain a British industrial champion,” Reuters reports citing the FT. The government’s clear opposition to any potential acquisition may deter bidders, despite the few formal powers to block an actual bid. A perceived weakness following the sale of assets to pay for damages caused by BP’s oil spill in the U.S. gulf sparked speculation of a potential takeover, but large liabilities and an exposure to Russia could act as a deterrent of a hostile takeover. BP denies it has been approached by any company.

The winners of the 2015 Webby Awards have been announced, and the less said about them, the better. The Young Turks won the People’s Voice for best online News & Information Channel. ‘Nuff said. (Read)

Turkey-watch: Turkish Ziraat Bank opened its doors in Ethiopia on Monday, becoming the first foreign bank to operate in the country, as reported by Daily Sabah.

Humanitarian situation in Yemen is now catastrophic -relief officials: Reuters reports on Monday that relief workers are saying that the situation has become dire in Yemen due to the airstrikes campaign, with widespread shortages of food and medicine being reported following 40% price increases in bread since Friday and 300% price increases in medicine, according to the UN. “The war and its results have turned Yemen back 100 years, due to the destruction of infrastructure … especially in the provinces of Aden, Dhalea and Taiz,” Yemeni Human Rights Minister Izzedine al-Asbahi said in a news conference in the Saudi capital Riyadh.

Meanwhile, the commander of Iran’s Revolutionary Guard General Mohammad Ali Jafari was quoted by Iranian news outlet IRNA (Islamic Republic News Agency) as saying that “the Saudi regime is on the verge of collapse and elimination.” (Read)

WORTH READING

Why is Qatar buying into Shell’s bid for BG? Investments in BG Group by sovereign wealth funds following the announcement of Royal Dutch Shell’s deal to acquire the oil and gas player have gone largely unnoticed by the media, according to Institutional Investor’s Sovereign Wealth Center. Both the Norwegian and Chinese sovereign wealth funds have both made relatively large recent transactions buying and selling stakes in BG and Shell. Sovereign Wealth Center states, however, that the Qatari Investment Authority has purchased 67 mn shares in Shell and 12 mn in BG at a total cost of USD 2.3 bn. The piece explores the QIA’s possible rationale behind the deal in What’s behind Qatar’s USD 2.3 bn bet on Shell’s BG takeover?(Read)

Ann Marlowe, visiting fellow at the Hudson Institute and a consultant to a branch of the Libyan state, writes ascathing critique of U.S. foreign policy toward Libya in World Affairs Journal: “As Obama’s statement Friday suggests, our Libya policy since the death of Muammar Qaddafi in October 2011 has been, at best, one of attempted benign neglect. But at worst, we have been foisting Islamists upon an electorate who rejected them twice. Even our superficially innocuous support for international efforts to name a “unity government” have involved a betrayal of Libya’s democratic aspirations. The talks have drawn a false moral equivalence between the elected Libyan government and the Islamist militias that drove it out of Tripoli in August 2014 by violence.” (Read Obama’s Murky Libya Policy)

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WORTH WATCHING

Turkey-based Ikhwan satellite television channel Masr Al’An’s Mohamed Nassar expounds on how deeply and strongly Pope Tawadros, the Coptic Church and Christian Egyptians support President Abdelfattah El Sisi. (Watch in Arabic, running time: 0:51)

DIPLOMACY

Riyadh to mediate reconciliation between Egypt, Qatar and Turkey -Hamas official: Ahmed Yousef, senior adviser to Hamas’ Prime Minister, is quoted by Palestinian Ma’an news agency as saying that Saudi Arabia is currently attempting to broker a broad-based reconciliation between Turkey and Qatar on side and Egypt on the other, as reported by Ahram Online. Yousef hopes that such a reconciliation will help repair relations between Cairo and Gaza.

Commentary: Even if reports of such a reconciliation are true, and assuming that such talks bear fruit, it’s inconceivable that Turkey or Qatar will hold to their commitments. Their populist rhetoric for their own populations’ domestic consumption, in addition to their flailing attempts at regional leadership, will necessarily work to constantly undermine any hand extended in friendship from Egypt, as has been the case time again. The summation of our response to the news is best expressed here: (Watch in Arabic, running time: 5 seconds)

EGYPT IN THE NEWS

Stating security concerns, Egypt gags media (Al Jazeera America): “‘The situation is worse than it has ever been — worse than the era of Hosni Mubarak, worse than the time of Morsi,’ said Sherif Mansour, Middle East North Africa Coordinator at CPJ. ‘Authorities go after anyone with a political opinion that is independent from the government’s line.’ Mubarak, Egypt’s president for three decades, stepped down amid massive protests in 2011.” (Read)

Quartz has some belated coverage of Mwazna [Budget] a website enabling citizens to view where tax revenue and public spending are going, which we had previously mentioned back on 9 April. Again, the coverage is a bit sensationalist, with the piece titled ‘Egypt’s revolution will get a shot in the arm with data to show how the government spends its money.’ Really? Hopefully it will give Egyptians a shot in the somewhere lower in the anatomy by seeing how desperately the government tries to subsidize our every need, breaking the bank in the process. (Read)

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Coal-fired power stations “completely safe” – electricity ministry
Al Ahram | 27 April 2015
Coal-fired power stations are completely safe, Mohamed Omran, the deputy minister at the Ministry of Electricity said, adding that they are even safer than some stations that use other conventional fuels. Omran noted the quality of the Japanese and Indonesian power generation technologies using clean coal technology. The deputy minister is on a visit to Jakarta with two delegates from the Ministry of Environmental Affairs and will also visit Japan. (Read in Arabic)

OIL & GAS

EGPC to complete the Beni Suef-Minya pipeline in weeks
Al Mal | 27 April 2015
The 140 km long Beni-Suef-Minya pipeline will be ready for operation in weeks, according to a source at EGPC. The EGP 450 mn pipeline will transfer oil products to Upper Egypt. EGPC said it hopes the pipeline can sustain supplies through peak demand times and deliver fuel to power stations as well. (Read in Arabic)

FSRUs a cost-effective to receive LNG, the EIA suggest
EIA | 27 April 2015
“Floating regasification is a flexible, cost-effective way to receive and process” shipments of LNG, the U.S. Energy Information Agency writes noting Egypt’s plans to use an FSRU to import LNG cargoes. “Faced with domestic supply shortages because of rapid growth in natural gas consumption for power generation, Egypt suspended exports and scheduled all natural gas production for domestic consumption. Egypt began building infrastructure for an offshore regasification terminal in 2012, and recently contracted an FSRU.” the EIA says. The EIA praises FSRUs saying they can “serve as a temporary solution while permanent onshore facilities are constructed, and an FSRU can be redeployed elsewhere once construction is completed.” (Read)

MANUFACTURING

Fresh Home Appliances building a packaging plant in Ethiopia
Al Borsa | 27 April 2015
Fresh Home Appliances is investing USD 1 bn building a packaging plant in Ethiopia this year. The new plant’s output will go towards Fresh’s existing production in Ethiopia as it plans to begin marketing its first line of refrigerators there in 2H2015. Besides its factory in Ethiopia and 13 in Egypt, Fresh has a production plant in Georgia, according to Al Borsa. (Read in Arabic)

FEI says more support is needed for Egyptian manufacturers
Amwal Al Ghad | 26 April 2015
The industrial sector is suffering from a multitude of challenges, the head of the Federation of Egyptian Industries, Mohamed El Sewedy said. El Sewedy noted he has requested a meeting with CBE executives to discuss measures to support domestic producers, but the CBE has not accepted. He believes domestic banks need to revisit their lending policies, increase support to the industrial sector, and to take into consideration the performance of the economy overall when making decisions about clients in arrears. (Read in Arabic)

HEALTHCARE

Only 12% of Egypt’s demand for cochlear implants is met, says MED-EL
Al Borsa | 27 April 2015
Only 12% of Egypt’s demand for cochlear implants is supplied each year, according to an executive at MED-EL. Actual demand is over 11,000 devices annually, but the Ministry of Health on supplies 1,300. MED-EL, a leading manufacturer of cochlear implants, says it has a 50% market share in Egypt. 90% of the cost of cochlear implant devices is covered by the Health Insurance Organisation of Egypt, with the remainder borne by private sector. (Read in Arabic)

REAL ESTATE & HOUSING

El Baraka Bank studying possibility of establishing real estate fund
Al Borsa | 27 April 2015
El Baraka Bank is considering establishing EGP 500 mn real estate investment fund, according to the company CEO. In addition to real estate projects, the bank would like to continue it financing of large-scale state-sponsored projects, added the CEO. El Baraka agreed to finance four government-led renewable energy projects worth EGP 3 bn at the EEDC. (Read in Arabic)

TELECOMS & ICT

ISPs presented their new reduced prices to NTRA
Al Shorouk | 27 April 2015
NTRA has received the new internet service plans with reduced prices from the ISPs, according to the NTRA’s Chairman Hisham Elayly. Elayly refused to give any details about the plans presented, but said they are currently being assessed. Khaled Negm, the CIT minister, denied any disagreements with ISPs following handing them a request to reduce prices. Negm ensured that Telecom Egypt’s installation of MSAN cabinets will not delay the implementation of the new plans. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

EgyptAir looks to add eight new planes to its fleet
Al Mal | 27 April 2015
Throughout this week, EgyptAir will be receiving financial and technical proposals pertaining to the its procurement of eight new airplanes, according to Al Mal. EgyptAir will not purchase the planes, but rather plans to lease them. The Egyptian airline will choose the winning proposal within 1-month’s time. (Read in Arabic)

REGIONAL

Production from Gaza Marine could be feasible
Middle East Eye | 27 April 2015
Gaza Marine has not produced since it was discovered in 1999, Ikhwan mouthpiece Middle East Eye says. Gaza Marine, for which BG Group has the exploration rights, is back in the spotlight after a deal to supply Israeli gas to Palestinian power stations was shelved. MEE lists the reasons behind the delay in exploration as financial and territorial put up by Israel as its need for gas, since it was assumed to be the main buyer of the production, diminished. Other reasons listed included more political consideration. However, a journalist at Globes is quoted as saying that production is now becoming feasible at the price of USD 5 per mmBtu given that Israel pays USD 5.7 per mmBtu for Tamar’s gas. (Read in Arabic)

High-speed train to connect Morocco and Tunisia through Algeria planned
Echorouk | 27 April 2015
Algeria unveiled plans to develop a high-speed train connecting Morocco, Algeria, and Tunisia, according to the manager of the Algerian National Company for Rail Transportation. He added that project assessments are already underway in Algeria and that approximately USD 1.3 bn have been allocated for the project that aims to increase Algerian rail usage from 4,000 km at present to 12,500 km. (Read in Arabic)

ON YOUR WAY OUT

1.2 mn tons of fertilisers will be imported to cover the shortage expected during the summer planting season, the Minister of Agriculture told Al Shorouk, noting that the ministry currently has enough supplies to last until the end of May.

The Cairo court of appeals upheld a decision banning mobile phone numbers that are not registered officially with complete user data, according to Amwal Al Ghad.

Al-Mal reports that the Egyptian Drug Authority issued a recall of four drugs that are currently available at local pharmacies:

• Zantac Injections produced by Sigmatec under license from Glaxosmithkline
• Vita Royal Capsules produced by SPI under license from Roxel Egypt
• Oyster Shell Calcium Film Coated Tablets produced by Sigma Pharmaceutical Industries under license by Ibn Sina Pharmaceutical Trading
• Femrose Capsules produced by Al Dinky Pharmaceuticals under license by Advocure.

In Pictures: Street vendors removed from Ramsis Square. (Daily News Egypt)

The death toll from Nepal’s 7.8-magnitude earthquake has climbed to over 4,000, with the near entirety of the country’s police and armed forces engaged in rescue efforts. The Guardian has live updates of the latest developments.

BY THE NUMBERS

USD CBE auction (Monday, 27 April): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Monday, 27 April): 7.69 (-0.02 from Sunday, 26 April)

EGX30 (Wednesday): 8,493.68 (-1.62%)
Turnover: EGP 465.8 mn (17% below the 90-day average)

WTI: USD 56.55 (-0.77%)
Brent: USD 64.46 (-0.57%)

TASI: 9,710.9 (+0.1%)
ADX: 4,674.2 (+0.2%)
DFM: 4,151.9 (-0.5%)
KSE Weighted Index: 434.9 (flat, +0.03%)
QE: 12,192.2 (+1.3%)
MSM: 6,330.5 (-0.3%)