TL;DR

• Cabinet back on message with Civil Service Act
• Oriental Weavers may still be liable to a (smaller) fine even if it meets ECA demands
• Electricity Ministry looks to funding from Chinese banks for energy projects
• Car market hit by FX shortage
• Google to roll-out low-price smartphone in Egypt
• Alphabet soup: UAE, GCC mull VAT
• “Ikhwan’s war is no longer about Morsi and the coup: It’s between Islam and apostasy, between right and wrong”

WHAT WE’RE TRACKING TODAY

State security apparatus appears to have been targeted by overnight blast: An explosion in Shubra El-Kheima early Thursday morning in Cairo resulted in at least six confirmed injuries, according to the head of the ambulance authority as quoted by ONTV as well as Dream TV satellite channels. A security source told Youm7 (in an article that has an archival image of a mushroom cloud, one of many news sources that made confusing use of stock imagery) that an explosion occurred in the area near a national security installation and courthouse in Shubra Al Kheima. Al-Masry Al-Youm cites a security source as saying at least 20 people including police officers and civilians were injured in a “powerful bomb blast.” The explosion was heard shortly before 2 am CLT across at least several neighborhoods, including Nasr City, Maadi and Mohandiseen. El Badil News tweeted images purporting to be of the blast site, which can be viewed on their timeline.

The winner of the pitch to run Egypt’s international tourism promotion campaign should be announced later today, Tourism Minister Khaled Ramy told ONTV’s Youssef El-Housseiny last night.

Are meat prices going to rise when the “heat dome” is finally lifted? That seems to be the suggestion by at least one industry expert amid reports that mortality rates for livestock are up 5% due to the ongoing heat wave. (It’s unclear, as is usually the case, whether they mean 5% or 5 ppt.) The rising mortality rate and an already tight supply will likely see prices rise 10% in the run-up to the Eid Al-Adha high-season. Eid Al-Adha is due to begin on or about Wednesday, 23 September this year.

And once more, ladies and gentlemen: Egypt is not experiencing a measles outbreak, said the Information and Decision Support Center on Wednesday, Al Mal reports. IDSC’s statement served to rubbish claims that the 92 heat stroke related deaths that occurred in the period spanning August 1 to 18 had actually taken place as a result of the spread of some unknown disease.

The 2-day 8th tripartite summit on Ethiopia’s GERD is set to begin today in Addis Ababa. Former Egyptian irrigation minister Mohamed Nasr Allam sat down with Ahram Hebdo for an interviewtranslated by Ahram Online to discuss what he sees are the possible scenarios and pitfalls awaiting the technical studies of the GERD.

ON THE HORIZON

31 August-01 September:  The Future of Energy in Egypt, organized by Future Energy Corporation.

07-09 September: Fifth Annual EFG Hermes London MENA Conference.

9 September: Qalaa Holdings will hold a one-day conference titled “Rift Valley Railways: An Integrated Logistics Solution in East Africa,” at the Federation of Egyptian Industries.

LAST NIGHT’S TALK SHOWS

Khairy Ramadan kicked off CBC’s Momkin with a discussion on the controversial anti-terror law. Several individuals called-in with opinions.

Yehia Qalash, head of the Journalists’ syndicate, spoke critically of the act, saying, “The national press should play a role in fighting terrorism; it is our duty. Unfortunately, this new law restricts are ability to undertake this role and instead provides a platform for terror-affiliated media outlets to disseminate their extremism.”

Foreign Ministry spokesman Ahmed Abu Zeid was next, saying, “This new law does not restrict freedom of expression. The Anti-Terror Act upholds international standards in fighting terrorism. … The United States has similar laws in place,” he said in reference to the US Patriot Act.

Rania Badawi, filling-in for Amr Adeeb, devoted the majority of Wednesday night’s episode of Al Qahera Al Youm to a discussion of the General Authority for the North-West Gulf of Suez Economic Zone(GASEC), the body established by Cabinet on Wednesday to spearhead the industrial development of the Suez Canal Corridor.

Badawi: “After completing our expansion of the Suez Canal, it is time for us to focus on our most important project yet: the industrial development of the area surrounding the canal. Once completed, the benefits of the Suez Canal Corridor to the Egyptian economy will exceed those of the canal itself.”

Badawi proceeded to explain the purpose of GASEC to viewers. “There are some who are claiming that the establishment of GASEC will lead to the establishment of a jurisdiction that is completely independent from the rest of Egypt. This is simply not true. By establishing GASEC, the government merely aims to provide investors with the most attractive investment climate possible — one that avoids the bureaucracy that we often find throughout the rest of Egypt.”

Yehia Zaki of Dar El Handasah, one of the companies commissioned to develop the Suez Canal Corridor, noted that “phase one of the project will be completed within two years and will be built in the area of East Port Said.”

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A MESSAGE FROM SODIC

SODIC sees net margin nearly double in 1H2015

SODIC has delivered a strong set of financial and operating results in the first half of the year, putting us well on track to achieve our targets for 2015. Our projects in East Cairo continue to see strong demand, as reflected in our net contracted sales growing by 32% year-on-year to reach EGP 2 bn. In parallel, our deliveries are on schedule across eight projects.

2Q15 witnessed Westown Hub come on stream as our first fully leasable asset, adding value to our SODIC West developments through its diversified retail offering. With a successful launch event in May and almost 40% of the units operational, the Hub is on target to reaching 60% occupancy by year-end. The project will begin contributing to our top line in 2016 and is expected to generate an estimated EGP 30 mn in recurring income once it reaches full occupancy. Click here to read more about the launch of Caesar on the North Coast and the doubling of our net profit margin in the period. Or read our full earnings release (pdf).
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SPEED ROUND

Cabinet back on-message — the Civil Service Act will not change. The nightmare that is (the cabinet’s handling of) the Civil Service Law continues to confound us. Prime Minister Ibrahim Mahlab struck a conciliatory tone on Tuesday following a meeting with aggrieved civil servants and the Finance Minister, stating that he will definitely take public servants’ demands for changes to the act under advisement. He added that bureaucrats are the first line of defense for the economy, Al Ahram reported, as we noted in yesterday’s edition. Cabinet, however, was back on message yesterday, announcing after their weekly meeting that the executive regulations to the Civil Service Act will be released within days — and there is no going back. The act, it said, is a cornerstone of the government’s administrative reform agenda, Al Masry Al Youm reports.

The Cabinet held its weekly meeting on Wednesday. The agenda looked into healthcare and education,said Prime Minister Mahlab, a refrain that has cropped up in each of the past three cabinet meetings — with no concrete outcomes. Cabinet also announced that there Is no turning back from the Civil Service Law, despite rumors to the contrary and promises from Mahlab that he will take protestors’ request under consideration. Key decisions taken yesterday included signing-off on a presidential decree formingthe “General Authority for the North-West Gulf of Suez Economic Zone” (formerly General Authority for the Suez Canal Economic Zone). The agency would own, administer and manage development in and around the New Suez Canal. Other decisions are below. All four Cabinet releases on yesterday’s meeting are here for your reading pleasure (pdf download, Arabic).

Economy Policy:

• Low-income taxpayers will get a an EGP 1,500 break whether they’re in the public or private sector as Cabinet raised a component of the personal income tax exemption, leaving a few more piasters in the pockets of those who pay the state its due (Read in Arabic)
• Approving a EUR 1.5 bn long-term maintenance contract awarded to Siemens by the Egyptian Electricity Holding Company for the three power plants (Read in Arabic)
• Approving the Agriculture Ministry’s request authorize legal action to evict squatters from unlawfully occupied land zoned for intensive agricultural use (Read in Arabic)
• Allowing the governorates of Ismailia and Port Said to issue tenders for organic waste management projects (Read in Arabic)
• The Ministers of Housing, Investment, Industry and the government of Damietta signed protocols which will establish a furniture manufacturing industrial zone (Read in Arabic)
• Granting lands across multiple governorates for infrastructure development projects.

Foreign Policy:

• Ratifying the economic cooperation agreement with Uruguay signed on 2 July, which facilitates trade in multiple sectors and knowledge transfer (Read in Arabic)

Social Policy:

• Approving the drafting of law that would re-organize the National Women’s Council, granting it a wider scope to influence policy related to women’s issues (Read in Arabic)
• Approved president’s decision to establish and develop a technical university (Read in Arabic)

Oriental Weavers is not running a monopoly, the company said in a statement sent to the EGX. The company cited the existence of Turkish and Chinese carpets on the market as a sign of competitiveness, but did concede that some distributors are carrying its name for a 2-4% commission. The company re-signed in January 2012 contracts eliminating the exclusivity clauses. It is also working on annulling exclusivity clauses with its machine-woven carpets’ distributors within 15 days, as per the Egyptian Competition Authority’s (ECA) guidelines. The ECA said Oriental Weavers has the right to submit a request stopping the case from moving forward to prosecution if the problems pointed out are rectified within the allotted period. Even then, the company will still be liable to a fine — albeit a reduced one. In other company news, the company’s founder, Mohamed Farid Khamis, has reportedly left Cairo to Germany. Al Ahram says he was not restricted by any travel bans.

Electricity Ministry in talks with Chinese banks to fund energy projects: The Electricity Ministry isopening negotiations with a number of Chinese banks to finance projects with an investment value of close to USD 10 bn signed between the Egyptian government and Chinese energy companies at the EEDC this past March. An Electricity Ministry delegation has already begun a nine-day trip to China to finalize funding agreements in preparation for President Abdel Fattah El Sisi’s visit to Beijing on 3 September, at which time the agreements are set to be signed. The news comes after the ministry reportedly suspended a number of EPC-plus-finance contracts in the belief they were weighing down efforts to close the budget deficit. With about 25 GW of new generation capacity now under contract, the ministry has reportedly delayed contracts with GE and Alstom. Some USD 2.1 bn in contracts for this year’s emergency plan to add capacity as well as the EUR 8 bn mega-contract with Siemens remain in place.

Sea Dragon Energy and Madison PetroGas announced a ‘strategic business combination’ and the creation of a new entity called SDX Energy. Or what we old-fashioned types will call a merger in tough times. “The Transaction would create a larger company with stronger balance sheet and a greater ability to achieve economies of scale through operational efficiencies. The company would be poised for strong growth in oil production and reserves from development in its onshore core Egypt basins and high impact exploration in both Egypt and Cameroon,” the companies’ press release read. The agreement allows Sea Dragon to acquire all of the issued and outstanding Madison shares at a ratio of 16.7 Sea Dragon common shares for each of Madison’s.

Car market paralyzed by hard currency shortage, CBE restrictions, say distributors. The nation’s automotive market has been “paralyzed,” agents and distributors told Daily News Egypt. The dollar shortage is expanding the reservation lists for cars and lengthening their delivery periods as in-demand units remain in short supply, a dealership added. The CBE is not prioritizing the automotive sector when it comes to providing trade finance or providing hard currency, with one distributor complaining that this drove up rates on his letters of credit to 4% from a previous 2.5%. (Read)

Google to introduce low-priced mobile phone in Egypt: Google is introducing an entry-level smartphone in six African countries, including Egypt and Morocco, where it will be manufactured by Chinese company Infinix. Infinix will produce the Hot 2 phone as part of Google’s project Android One, whose aim is to push for lower priced phones in less developed countries. The device will have a 5-inch screen, 720p resolution, 16GB internal storage and will cost around EGP 690, running the Lollipop variant of Android (presumably 5.1.1). The announcement has made waves in the domestic press. You can also catch more coverage in the global tech press, read Google’s announcement or learn more about the Android One program.

At the other end of the price scale: Apple has been granted an exemption from foreign ownership laws in the UAE, allowing it to control 100% of its operations there, sources told Bloomberg. The exemption now means that “Apple will open its first Middle East store in Dubai this year and then Abu Dhabi after securing the privileges, according to the people.” Local regulation stipulate that all business operating in the UAE must be at least 51% owned by Emiratis, unless they operate in free zones.

The Times (of London) fired a second volley at Amnesty International on Wednesday, following their report earlier this week, (paywall) of an alleged conflict of interest between one of their senior staff and her undisclosed private meetings with Islamists in Egypt. The Times drives home the point that Amnesty’s commitment to defending women’s rights, as well as freedom of expression and religion, are simplyincompatible with their working alongside organizations seeking to impose sharia. The organization in question is Cage, a UK-based Islamist advocacy group, as described by the Times. Internal disputes within Amnesty over continued advocacy work with Cage led to the suspension of the head of Amnesty’s gender unit Gita Sahgal, after she called Cage “apologists for jihadists.” Sahgal later left AI. The Times then notes that a spokesperson for Cage described Daesh executioner ‘Jihadi John’ as a “beautiful young man.” Further, “The Times has learnt that as recently as March this year an Amnesty employee defended such partnerships and voiced sympathy for those whose ‘only crime is to be soft on Islamic militants’.” (Read Campaign allies on the wrong side of human rights)

The UAE and its GCC neighbours are still looking to reach consensus on imposing VAT, Reutersreported. The problem is that the six oil exporting states of the GCC differ over how VAT would be applied to economic sectors: “… One country is keen not to impose VAT on food and beverages, especially children’s food. Some countries are more hesitant on the services sector and whether there will be an impact on the financial sector, especially in the UAE.” A technical committee is set to discuss the pending issues in Saudi Arabia next week and report by October.

Qatar still negligent on terror finance: David Weinberg reports for The Long War Journal on the US Treasury Department imposing sanctions earlier this month on two Qatari nationals, Sa’d bin Sa’d Ka’bi and ‘Abd al-Latif bin ‘Abdallah al-Kawari, who are accused of financing Al Qaeda in Pakistan, extremists in Sudan, and and Al Nusra Front in Syria. This morning’s Al Mal has picked up a brief version of the story as well. While Weinberg notes that Qatar has apparently shut down a terror financing network related to one of the men in question, “a closer examination of how Qatar dealt with the case of Ka’bi and … al-Kawari provides new confirmation that Doha has been inexcusably negligent when it comes to cracking down on private terror finance … a senior Obama administration official reportedly indicated this month that ‘Qatar has not arrested the two men.’” Further, “Kawari is physically in Qatar, according to biographical information released by Treasury on August 5 — in the same district of Doha as the US Embassy.” (Read)

Anyone else think the U.S. Fed is being a little bit of a drama queen on interest rates? At this point in time, we almost wish they would just pull the trigger rather than face another month of  this endless “maybe, maybe not” ramp-up to an interest rate hike. The release of the minutes from the U.S. Federal Reserve’s last policy meeting were out yesterday, prompting the WSJ to note: “The Federal Reserve’s next policy meeting is four weeks away and officials show no clear sign of having settled on a decision about whether to raise short-term interest rates at that time. Minutes of the Fed’s July policy meeting left mixed markers about whether central bank officials are leaning toward or against a rate increase at their next meeting after months of signaling that they intend to move away from the near-zero interest-rate policy before year-end.” Check out the WSJ‘s coverage, get a paper-thin analysis of what a rate hike might mean for emerging markets courtesy of the FT, or read the FOMC’s minutes for yourself.

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A MESSAGE FROM PHAROS HOLDING

Steel prices, energy shortage see Ezz Steel on watch list for FV downgrade

Faced with an amalgamation of less-than-fortunate trends, Al Ezz Dekhela Steel Company (EZDK) — typically Ezz Steel’s most profitable subsidiary — turned an attributable net loss of EGP 49.7 mn in 1Q 2015. Although its consolidated revenues came in line with our projections, continued upward pressure on the company’s COGS owing to increased natural gas and electricity costs, coupled with a lower than expected selling price per ton, saw the steel giant’s gross profit margin narrow significantly. And while iron ore, freight costs and scrap prices declined, the EGP’s depreciation against the USD by some 9%. This, coupled with a diversion to low-margin-scrap based-operations to offset natural gas shortages, left the company little room to breathe.

In our view, the likeliness of EZDK’s valuation downgrade rests on whether or not steel prices recover. With Chinese rebar at USD 367 / ton (EGP 2,874 / ton) and the Yuan undergoing a surprise devaluation, the prospects are becoming increasingly in the red. To find out more, click here.
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EGYPT IN THE NEWS

The narrative adds little, but the WSJ’s “Egypt’s New Challenge: An ISIS Insurgency in Sinai“ is a nearly-2-minute video montage of brazen attacks by Daesh terrorists on Egyptian forces in Sinai. The financial daily uses the recap to set the stage for its note that the Sisi administration enacted new anti-terror legislation earlier this week.

Has it already been a fortnight? A New York Times editorial questions the legality of U.S. military aid to Egypt, noting that Senator Patrick Leahy is now “raising alarm about human rights abuses Egyptian security forces have committed as they battle militants in the Sinai Peninsula. He recently asked Secretary of State John Kerry in a letter whether Egypt had run afoul of a federal law he sponsored that bars military units that have committed human rights abuses with impunity from receiving American aid.” We could go on, but the highlights include: “enable a despotic government … keep the evidence of its scorched-earth approach to fighting militants hidden … el-Sisi of Egypt granted his government sweeping powers to continue cracking down on the Muslim Brotherhood, a political movement, and other opponents under the guise of fighting terrorism. …  harsh and counterproductive approach …  new tools to stifle dissent. … make getting credible news about Egypt even harder. … the law is being flouted in Egypt…” (Read)

U.S. uneasy with its own Sinai peacekeepers: Echoing the August 11 New York Times piece that describes the vulnerable state of US troops in Sinai as part of the Multilateral Force and Observers mission in the peninsula, AP reports on the American “interagency review” of the U.S. commitment of “lightly equipped peacekeepers” which are threatened by the growing strength of militants in the area. State Department spokesman Mark Toner announced that the “US is concerned over deteriorating security conditions” and the possibility of bringing such soldiers home was debated. However, one senior official claims that even if such a move was to go ahead, the ‘US would prefer not to make changes to its posture unilaterally’ due to its ‘close relationships both Egypt and Israel.’” (Read)

‘Egypt’s Anti-Terrorism Laws Deconstructed:’ BBC’s ‘Click’ podcast discusses how the anti-terror law enacted on Sunday will impact news channels, bloggers and other online platforms. “We cannot say that there is freedom of expression on social media now. However, this law will worsen the situation. It will increase the iron grip of the government on social media and other electronic means to express their right to freedom of expression,” said Amnesty International’s Mohamed El Messiry. (Listen; the Egypt segment ends at 6:15)

WORTH READING

The Brotherhood Divided, by Samuel Tadros: Tadros’ c.7,300 word essay for the Hudson Institute serves as one of the more comprehensive and balanced records of Egypt’s recent history, starting from the formation of the Rabaa and Nahda sit-ins up to the present day. It also helps to paint the larger picture of just how the fragmentation and (further) radicalisation of the Ikhwan took place. Tadros’ essay sheds light on the often overlooked point that “Rab’a became a melting pot, where ideas flowed freely and bonds were created. Given the Brotherhood’s lack of a deep ideological foundation, it is no surprise that ideas flowed only in one direction: from Salafists to Brotherhood.” Tadros also stakes a stance on a point which has become depressingly obvious to Egyptians from across the political spectrum, but to which some corners of the outside world are still in denial: “Their [the Ikhwan’s] war with the regime is no longer about Morsi and the coup; in fact, Sisi’s removal would solve nothing for them. Instead, the struggle is an ideological one between Islam and apostasy, between right and wrong, between them and the ‘Army of Camp David’ and its ‘Zionist masters.’ Such a struggle stems from a worldview that allows no compromise.” (Read The Brotherhood Divided)

WORTH WATCHING

‘Women in Ancient Egypt Had Same Legal Rights as Men’: A Bloomberg TV report reveals that prenuptial agreements have existed 2,480 years ago in Ancient Egypt. The Oriental Institute of the University of Chicago has discovered a very detailed eight-foot long marital document that further proves signs of progressive society in Egypt. The “economic contract” states that a divorced woman would get 12 pieces of silver and 36 bags of grain every year for the rest of her life, if this was agreed upon with the husband upon marriage. Women were also allowed to file lawsuits and be sued, buy property and serve as jurors and witnesses. (Watch)

DIPLOMACY

The Foreign Affairs Ministry is defending the newly issued anti-terror law online in Arabic andEnglish. The primary points the Ministry is hammering in its statement are that: Egypt is facing an unprecedented wave of terrorism, the law conforms to UN Security Council resolutions, and Egypt is committed to human rights preservation but is keen on providing swift justice.

Social Solidarity Minister Ghada Waly met with Denmark’s Ambassador in Cairo on Wednesday. The two discussed government efforts to improve social justice, empower women, and create jobs, Al Ahramreported.

Indian Minister of External Affairs Sushma Swaraj to visit Egypt on 24 August. In a statement on 19 August, the Embassy of India in Cairo announced that Swaraj will meet with President Abdel Fattah El Sisi and Secretary General of the Arab League Nabil Elaraby.

ENERGY

Crescent Petroleum to invest USD 250-300 mn in Egypt
Al Mal | 18 Aug 2015
Crescent Petroleum is preparing to pump USD 250-300 mn in E&P investments into Egypt, sources told Al Mal. It is unclear as yet whether the funds will flow through Crescent’s subsidiary, Dana Gas, or through a separate entity without specifying a timeline for the investment. A company source told the newspaper that Crescent is aware of the risks involved with operating in Egypt, but it is still looking to expand its investments, especially as the government remains committed to fulfil its obligations towards IOCs. (Read in Arabic)

EGPC to issue a new E&P tender in September
Al Borsa | 19 Aug 2015
EGPC will be tendering a number of concession areas for oil and gas in September, Chairman Tarek El Molla said. EGPC is currently finalising obtaining the necessary security approvals for the concessions, which Al Borsa hinted will be in the Western Desert and the Gulf of Suez. (Read in Arabic)

Fichtner to present its review of FiT within weeks
Al Borsa | 18 Aug 2015
German consulting house Fichtner will present its review of Egypt’s proposed feed-in-tariff scheme to the New and Renewable Energy Authority (NREA) “within weeks,” according to Mohamed El Sobky, NREA’s head. The scheme will be presented to investors and used to finalize agreements reached with companies that completed their projects’ financial assessments. El Sobky also reiterated the news that ten international financial institutions are reviewing the feed-in-tariff scheme and will send Fichtner any concerns they have over it. (Read in Arabic)

All households to have smart electricity meters within 10 years
Al Shorouk | 19 Aug 2015
All households will have smart electricity metres within the next 10 years, the Electricity Ministry said. The Ministry’s spokesperson announced a tender to deliver 3 mn metres as part of the first phase of the metre replacement project. Another tender is being issued to deliver 50k metres in Sixth of October. The smart electronic metres should help with electricity consumption reduction and end the problems households face from the current billing system, the spokesperson said. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

Supplies Ministry looking to import Ethiopian cattle, export food to Togo
Ahram Gate | 19 Aug 2015
Supplies Minister Khaled Hanafy conducted meetings with Egypt’s ambassadors to Ethiopia and Togo to discuss food imports and exports. Hanafy is looking into importing cattle from Ethiopia and selling it through the Ministry’s outlets while exporting Food Industries Holding Company’s (FIHC) products to West African countries through Togo. FIHC is preparing to participate in a food exhibition in Lomé, Togo from 20 November to 7 December. This follows news we reported early last week that the ministry was also looking to import cattle from Sudan, an evergreen story so far as the ministry is concerned. (Read in Arabic)

EGP 200 mn Zad Hard Discount sales last fiscal year, says General Company for Wholesale Trade
Amwal Al Ghad | 19 Aug 2015
Zad Hard Discount made EGP 200 mn in sales in FY 2014/15 with a growth rate of 20% from FY 2013/14, according to Ayman Salem, President of the General Company for Wholesale Trade, a subsidiary of the Holding Company for Food Industries. Zad, owned by leading Muslim Brotherhood figure Khairat El Shater, was confiscated by the committee tasked with sequestering and managing Muslim Brotherhood funds and assets and is now run by the General Company for Wholesale Trade. (Read in Arabic)

MANUFACTURING

Industrial Control Authority developments to better quality control, says Abdel Nour
Amwal Al Ghad | 19 Aug 2015
Trade and Industry Minister Mounir Fakhry Abdel Nour assured his ministry is working on developing the industrial control system to meet international standard. The Industrial Control Authority will become a cornerstone of meeting quality control standards in different commodities. The ministry has intensified monitoring of the domestic market to combat cheating, smuggling, and subpar products, to ensure a safer consumer experience. (Read in Arabic)

Alexandria Chamber of Commerce warns of Plastic City in Merghem failing
Al Mal | 19 Aug 2015
Despite efforts from different government authorities and ministries in Alexandria to make use of the foundry complex in Merghem, dubbed Plastic City, the Alexandria Chamber of Commerce warns of a potential collapse. The Federation of Egyptian Industries (FEI) has made requirements for the foundry complex that are inappropriate for smaller producers, according to the division of plastic head Nader Abdel Hadi. The division filed a memo through the FEI to Trade and Industry Minister Mounir Fakhry Abdel Nour pointing out the flaws with the requirements, including the original purpose of Plastic City, which was to move factories and foundries out of the populated areas in Alexandria. (Read in Arabic)

South Valley Cement Company signs EGP 300 mn contract to build grinding mill
Al Borsa | 19 Aug 2015
South Valley Cement Company has signed a contract with Chinese company Sinoma to construct a grinding mill that will cost EGP 300 mn. In November 2014, South Valley announced it had arranged an EGP 1.273 bn syndicated facility with CIB, Arab African Bank, Qatar National Bank, Banque Misr and Ahli United Bank to finance the expansion of its milling and storage capacities and to secure alternative energy supplies. Its net profit for 1Q15 was EGP 32.25 mn, a 3% increase from the same period last year. (Read in Arabic)

HEALTH & EDUCATION

EIPICO completes test production of Sovaldi biosimilar
Al Mal | 19 Aug 2015
The Egyptian International Pharmaceutical Industries Company (EIPICO) has sent final samples of locally produced, generic version of Hepatitis-C cure Sovaldi to the Ministry of Health, according to EIPICO Commercial Director Osama Rostom. EIPICO is pending approval from the ministry to register the product ahead of its release on the market. The drug will be sold at EGP 2.4k per unit, the price set by the MoH. (Read in Arabic)

NEST studies 3 alternatives to Qatameya Medical Center after investing USD 50 mn
Al Borsa | 18 Aug 2015
After investing nearly USD 50 mn in the project, the North Africa Company for Real Estate (NEST) is choosing between three investment alternatives to the Qatameya Medical Center, according to Director of Investor Relations Helmy Fouad. Its first alternative includes selling the hospital at a price determined by an independent financial consultant. The second alternative considers either managing the hospital in partnership with a company specializing in medical management, offering it as an  IPO in the stock market, or keeping the hospital due to expected USD 100 mn in revenues in the next 10 years. Its third alternative entails hiring a company specializing in hospital management to operate and maintain the medical center. Fouad said that NEST already hired FAG, a financial consultancy specializing in management and feasibility studies, to evaluate the Qatameya Medical Center based on anticipated future revenues. The hospital, which will be built on 5.8 k square meters, is in its final phase of construction. (Read in Arabic)

REAL ESTATE & HOUSING

Mahlab allocates EGP 37 mn to complete youth housing project in Luxor
Al Mal | 19 Aug 2015
Prime Minister Ibrahim Mahlab allocated EGP 37 mn to complete a youth housing project in Al-Tud, south of Luxor. This sum is separate from that of the EGP 30 mn previously allocated to connecting the project to the sewage grid by no later than 31 December, said Luxor Governor Mohamed Badr. (Read in Arabic)

NUCA to issue 10 tenders in six cities for civil works and infrastructure
Al Mal | 19 Aug 2015
The New Urban Communities Authority will, within the coming two days, issue 10 public tenders in six new cities, to build schools, road works, paving, curbs, and a fire station. The six cities include Six October, Shorouk, Sadat City, New Tiba, New Assiut and New Salhiya. (Read in Arabic)

TOURISM

Tourist arrivals up 4.4% in June 2015
Al Mal | 19 Aug 2015
The number of tourists coming to Egypt from around the world rose 4.4% year-on-year in June 2014, according to the monthly tourism report issued by the Central Agency for Public Mobilization and Statistics (CAPMAS). A total of 820k tourists came to Egypt in June 2015, with Eastern Europeans making up 44.7% of all arrivals; Russians accounted for nearly  68% of all Eastern European tourists. (Read in Arabic)

First digital documentation centre to be established, says Ministry of Antiquities
Al Mal | 19 Aug 2015
Antiquities Minister Mamdouh El Damaty met with Director of the American Research Center in Egypt (ARCE) Gerry Scott to talk antiquities documentation. They reached a preliminary agreement to build the first digital documentation center for all of Egypt’s museums, with its headquarters in the National Museum of Egyptian Civilization. ARCE will train ministry archaeologists in internationally-recognized methods and techniques of documentation. (Read in Arabic)

** Further reading in Tourism: Samar Al-Mogren, op-ed writer for the Saudi Gazette, calls for pricing parity for GCC tourists in Egypt at tourist sites and hotels, saying the issue is not in the cost itself but in the principle of making Gulf Arabs feeling welcome in Egypt, especially in light of the Egyptian Ministry of Tourism’s stated target of 7 mn GCC tourists by 2020. (Read We are not foreigners, Egypt)

TELECOMS & ICT

Mobile services improved in the last four months, NTRA says
Al Masry Al Youm | 19 Aug 2015
Domestic telecommunications services provided by the mobile network operators has improved over the last four months, NTRA said. NTRA noted the investments the operators have made to improve network infrastructure, saying it will continue to enhance its assessment mechanisms to ensure optimal service is being provided. (Read in Arabic)

TE, ISPs fail to agree on infrastructure price reduction
Al Borsa | 19 Aug 2015
Negotiations between private ISPs and TE  to reduce infrastructure rent price, set by the latter, have hit a snag, reports Al Borsa. According to an unnamed ISP executive, TE is moving very slowly with negotiations and is not offering rental fees that would allow ISPs to substantially reduce internet service costs to consumers. Moreover, TE is offering a uniform reduction to each of the ISPs, failing to take into consideration that the companies service varying socioeconomic segments. (Read in Arabic)

BANKING & FINANCE

NBE boasts EGP 18 bn SME portfolio
Al Mal | 19 Aug 2015
The National Bank of Egypt (NBE) will pump additional loans of EGP 2 bn into SMEs before the end of next June, with the current total SMEs portfolio at an estimated EGP 18 bn. EGP 16 bn of this amount are directly invested, says NBE board member Yehia Abou El Fetouh. There are a total of 42k SME clients at NBE, 13k of which were added only in the last fiscal year, receiving loans amounting to a total of EGP 5.8 mn, Abou El Fetouh added. (Read in Arabic)

Blom Bank Egypt receives 170 applicants for real estate loans, accepts 50
Amwal Al Ghad | 19 Aug 2015
Blom Bank Egypt received 170 applicants for mortgages under a CBE initiative to support medium- and low-income applicants. Blom distributed loans totalling EGP 200 mn to 50 approved applicants, and is currently studying the rest, sources within Blom Bank told Amwal Al Ghad. Why is this news? Our view is that 50 loans being ‘newsworthy’ should remind us all of how embryonic Egypt’s mortgage market really is. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

CBE to repay Qatar USD 1.5 bn in 4Q2015
Al Borsa | 19 Aug 2015
Egypt will repay USD 1.5 bn to Qatar in 4Q2015, a source at the CBE told Al Borsa. The repayment will be made from CBE reserves. In total, Qatar had extended USD 7.5 bn to Egypt in financial assistance. CBE reserves stood at USD 18.5 bn by July’s end. (Read in Arabic)

Egypt’s Wasat Party denies political reconciliation initiative
Ahram Online | 18 Aug 2015
“The leader of the party did not propose any political initiatives, nor did he issue any recent political statement since his release as he did not follow the latest political developments in Egypt during his detention,” said Al-Wasat Islamist Party in a statement on Tuesday, as reported by Ahram Online. Despite media claims that he proposed such an initiative following his release on bail last week following two years of imprisonment, the party denied all such reports and said that party leader Abu Ela Mady is not speaking to the media at this time. (Read)

ON YOUR WAY OUT

TV host Tawfik Okasha released on bail pending appeal… Okasha’s six-month prison sentence was suspended on Wednesday, pending appeal, as reported by Ahram Online. One of several rulings against him, as we mentioned on Sunday, was for the beating of his ex-wife, for which he received a two-week prison sentence and an EGP 100 fine.

…125 detainees were also released on Wednesday, allegedly including individuals suffering from medical conditions as well as people arrested during demonstrations. The prosecution has yet to provide the names of any of those released.

Egypt is issuing a one-year EUR 600 mn treasury bill on 25 August, the CBE said, as reported by Reuters.

BY THE NUMBERS

USD CBE auction (Tuesday, 18 August): 7.7301 (unchanged since Sunday, 05 July)
USD parallel market (Tuesday, 18 August): 7.91 (unchanged from Sunday, 16 August)

EGX30 (Wednesday): 7,240.77 (-2.13%)
Turnover: EGP 486.8 mn (4% above the 90-day average)

WTI: USD 40.53 (-4.90%)
Brent: USD 46.85 (-4.02%)

TASI: 7,991.3 (-2.5%)
ADX: 4,575.0 (+0.8%)
DFM: 3,833.3 (+0.2%)
KSE Weighted Index: 409.3 (+0.8%)
QE: 11,635.0 (-0.3%)
MSM: 6,152.3 (-0.6%)