TL;DR

• Fear of heights: Is the EGP next in the EM currency race to the bottom?
• JWT wins international tourism promotion mandate
• Gas from Jordan? Not so fast, says EGAS.
• Labor unions plan 12 September protest of Civil Service Act
• Dimian nixes merger of Tax, Customs authorities

WHAT WE’RE TRACKING THIS WEEK

It’s shaping up to be a very busy news week, ladies and gentlemen:

In the wake of what the western financial press is calling the largest one-week withdrawal of funds from emerging markets since January 2014, it has once more become vogue to talk about dark days ahead for emerging markets. It’s easy to see why the outlook is so grim: the prospect of the U.S. Federal Reserve hiking rates next month; the ongoing economic slowdown in China, Brazil, Russia, Turkey; low commodity prices — to say nothing of the usual thin market volumes in the second half of August as fund managers hit the beach. Developed markets followed EM in the race for bottom last week. Reuters has a solid wrap up (as does the New York Times) after U.S. markets entered technical corrections on Friday, but one of the better pieces we read this weekend was Mohamed El-Erian’s Bloomberg View piece A Brutal Week in Markets, But What Comes Next? His conclusion: “Prices need to fall a lot more before wary investors get off the sidelines.” Also worth reading is the WSJ’s “Economic Risk of Stock Plunge Varies Around Globe,” which concludes that that risk is perhaps greatest in EM.

Oh, and did we mention that on Friday oil was trading below USD 40 for the first time since the start of the global financial crisis in 2009?

It’s confirmed: President Abdel Fattah El Sisi will be on a state visit to Russia this week, from 25 to 27 August. Al Masry Al Youm says El Sisi is set to meet with Vladimir Putin during the trip. Topping the agenda: mapping out a number of economic cooperation agreements, said Investment Minister Mounir Abdel Nour, including laying the groundwork for a free trade agreement, establishing a Russian economic zone (in either the Suez Canal area or El Fayoum), a tariffs agreement, and forming joint ventures with Rosneft and Gazprom. High-level government sources also report that the Daba’a nuclear plant and the nuclear aid program will also be a cornerstone of El-Sisi’s trip. The president’s next foreign trip is expected to be on 3 September, when he attends China’s Second World War commemoration and, we expect, will look to ink a number of economic agreements. MoFA is yet to confirm the final dates of the president’s China trip, which we understand will also include a swing through Southeast Asia.

We’re still waiting for a prosecutor-general to be sworn-in after a report last week said President Abdel Fattah El Sisi will choose from a short list of three drawn up by the Supreme Judicial Council. The nominees are Aly Omran (acting prosecutor general), Nabil Sadek (vice president of the Court of Appeals) and Adel El Saeed (deputy minister of justice).

The Environment Ministry has postponed it meeting with 19 cement companies applying for licenses to use coal to an unspecified time this week. The gathering was to address problems the companies faced in applying in the application process.

The Electricity Ministry will complete Phase Four of the urgent capacity buildup this week, a move that will add an additional 410 MW to the national grid, reports Al Borsa.

The U.S. Federal Reserve Bank of Kansas City will host its annual three-day symposium starting this coming Thursday. Fed chief Janet Yellen is due to skip this year’s gathering (theme: inflation dynamics and monetary policy), but that isn’t going to stop readers of the tea leaves from parsing every utterance for a sign of what language might be used about a rate hike at the 16-17 September FOMC meeting.

ON THE HORIZON

Heading into the last full week of August, we’re reminded that not only is summer limping to a close (some of us have had our kids head back to school already; more do so this week) — we’re also heading into fall conference season.

No month is busier than September, and at least three are worth your attention in the first week of the month: The Future of Energy in Egypt, organized by Future Energy Corporation, runs 31 August and 1 September for those of you with an interest in being part of making Egypt a top energy exporter in the foreseeable future. Listed companies will be making their annual fall pilgrimage to the fifth annual EFG Hermes London MENA Conference to sit down with top buy-side investors from 7-9 September. In parallel, the 20th anniversary Euromoney Egypt conference is due to take place 7-8 September in Cairo.

LAST NIGHT’S TALK SHOWS

Magdy El Galad filled in for the perpetually Lamees El Hadidy on Saturday night’s episode of Hona El-Assema. El Galad kicked-off the episode with a random-yet-interesting conversation on Egypt’s “Fireworks Mafia”, a nefarious criminal entity that has allegedly generated mns of pounds in profits by exploiting loopholes in the country’s import regulations. “Experts estimate that Egypt’s unregulated fireworks industry is worth upwards of EGP 24 bn,” said a baffled El Galad.

After barraging viewers with an array of factoids on the industry, El Galad proceeded to introduce viewers to Islam Adel, a young boy who suffered severe injuries as a result of his unsafe use of fireworks during this month’s Suez Canal celebration. “I lost my fingers when a rocket [a firecracker] I ignited blew-up in my hand,” the boy said.

A businessman involved in the import-export trade later provided insight on the matter: “The problem is the result of corrupt customs authority officials. … A corrupt customs officer can make upwards of EGP 500k for each illegal container he allowed to be smuggled in.”

Meanwhile, Diaa Rashwan played lead host at Al Qahera Al Youm. Saturday night’s program was entirely devoted to a discussion of the anti-terror law. The night’s guests were Tarek Nagida, a member of the Egyptian Popular Current’s legal committee, and Hafez Abousaada, a member of the National Human Rights Council. Nagida began his commentary by describing the legislation as “entirely unconstitutional,” alleging that “the anti-terror law infringes upon fundamental human rights and is another iteration of the Emergency law.”

Abousaada, while agreeing with Nagida’s sentiment, adopted a less doctrinaire approach: “There are certain articles within the law that are unconstitutional. One article, for instance, allows the President to impose a curfew without announcing a state of emergency beforehand. This type of action is prohibited under our current constitution.”

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SPEED ROUND

Bloomberg asks “Who’s Next in the Currency Market’s Race to the Bottom?“ and finds Egypt on the list in the wake of an interview with John-Paul Smith, “the ex-Deutsche Bank AG strategist who predicted Russia’s 1998 crisis and this year’s China’s rout.” After a recap of the Central Bank of Egypt’s bid to control the EGP’s devaluation, the authors note that Egypt may not be able to count on further GCC assistance. “Saudi Arabia, Qatar and the United Arab Emirates probably will be ‘forced eventually to adjust or abandon their dollar pegs,’ said Smith. ‘But any movement is unlikely over the short term.’” Smith recommends “being ‘very underweight’ in emerging-market stocks.”

JWT will promote Egyptian tourism opportunities in 27 global markets over the next the three years. The marketing agency was awarded the USD 68 mn Tourism Ministry contract, the Tourism Development Authority announced on Thursday. Seven firms had submitted bids for the contract, which comes as part of the government’s attempts to increase the tourist arrival numbers to 20 mn annually by 2020. Tourism Minister Khaled Ramy will hold a press conference tonight to discuss the details of the promotional campaign.

EGAS denies media reports that it is seeking LNG imports from Jordan: Khaled Abdel Badie, head of the Egyptian Natural Gas Holding Company (EGAS) said no tenders had been put up for the importing of LNG. “I am not sure what the source of those reports was,” he Al-Masry Al-Youm, as reported by Egypt Independent. Reuters had reported on Friday that Egypt was seeking LNG via Jordan, according to three unnamed traders. “The Egyptians need gas now and Ain Sokhna is not able to handle it all,” a ship broker said. “Much of the demand for Jordan is expected to flow to Egypt.” We reported last Monday on an Al-Mal story noting that Jordan’s deputy energy minister had said the Hashemite Kingdom was looking to export up to 200 mcf per day to Egypt.

Labor unions prepare 12 September protests over civil service act: Independent labor unions are preparing for protests on 12 September to demand the Civil Service Act be abandoned, according to a report published by AMAY on Thursday. The protest is set to take place at Fustat Park in Old Cairo on 12 September. The calls for protest have mounted despite the Cabinet’s assertion on Wednesday that there was no going back with regard to reforming the public sector.

Well, it’s Groundhog Day… again: Arabtec denies it is withdrawing from the planned project to build one mn houses in Egypt. “The company…reaffirms that it’s still discussing some related details with concerned Egyptian parties,” Arabtec told the DFM (pdf) without giving details, as reported by Reuters. The agreement for the project was announced officially more than a year ago.

EFG Hermes, NBK Capital tip Ezz as ‘buy’ despite weak global industry outlook: Leading regional investment bank EFG Hermes reiterated its “Buy” on Ezz Steel as the manufacturer reported an EGP 136 mn loss in its 1Q2015 results, saying the bottom line was an improvement on the EGP 235 mn loss booked in 4Q2014 and beat both EFG Hermes’ expectations and the consensus forecast. While noting that FX gains played a role in the beat, EFG Hermes noted “we think that fully diverting LNG imports to industrial players to operate at full rates offers substantial upside, and given the company’s high operating leverage to DRI integration, we estimate that the stock could be trading a 2016e P/E multiple as low as c4.5x; hence, we remain Buyers of Ezz Steel and believe the stock has been overly discounted at current levels.” In an earlier initiation of coverage, NBK Capital rated both Ezz Steel and Ezz Dekheila Steel Company “Buys.” NBK also notes that the “stock price correction [on Ezz Steel] translates into [an] unwarranted valuation discount.” Both EFG and NBK agree that Ezz will continue to face challenges due to oversupply in the global steel market. “China, which now accounts for around 48% of global steel demand, registered a decline of 3% in its steel demand in 2014 – the first annual decline since 1981,” NBK Capital notes, adding thatLocal prices could fall by c. 6% this year, “compared to a benchmark decline of 20%.” With possible solutions to Ezz’s chronic natural gas shortage now on the horizon, NBK Capital is estimating that Egypt’s largest steel producer will see its loss continue to narrow this year and move back into the black in 2016, “with 2016F net profit being highest since 2008.”

The amendments lowering Egypt’s top tax rate to 22.5% are expected within “one or two weeks at the most,” Finance Minister Hany Dimian told Reuters. The country will also freeze the 10% tax on capital gains as part of the effort “to attract investors and boost the economy.”

The Egyptian Financial Supervisory Authority wants the Mahlab government to rescind the sukuk law issued in May 2013, Al Shorouk reported. Financial experts at EFSA have some technical reservations regarding some of the law’s clauses and believe sukuk regulations should be included within the Financial Markets law.

Safwan Thabet, Juhayna’s Chairman and CEO, has been barred from trading on the EGX, sources told Reuters. This followed the decision to freeze his assets on allegations of ties to the Ikhwan. “The bourse received a letter [from the authorities] requesting the suspension of Safwan Thabet’s [trading] codes and the codes were indeed suspended during Wednesday’s trading session … He will not be able to buy or sell any shares on the bourse after his codes were suspended,” a source said. Meanwhile, JUFO got a shot in the arm as Aberdeen Asset Management increased its stake in the dairy company to 5.1% to 4.8%, the firm reported. Juhayna’s shares had dropped by over 7% last week as its Chairman’s assets were frozen on alleged links to the government. Aberdeen said it bought 1.407 mn of Juhayna’s stocks at EGP 8.1 per share. (Read)

“Antitrust Authority Chief: Oriental Weavers controls 90% of the market”: Egypt Independentcarries a translation into English of a brief interview with Egyptian Competition Authority chief Mona El-Garf, who makes clear that she doesn’t buy OW’s market share statistics and feels a fine is in order even if any alleged past violation of the competition act has since been rectified: “Correcting a violation does not mean we should waive it because competitors have already suffered losses.”

Draft local administration bill a “tool to combat corruption”: The Mahlab government is billing a draft local administration bill as a tool to fight corruption, saying the proposed legislation will grant officials at the governorate and district levels greater supervisory authority and internal oversight in investigating corruption. The bill is now in play and sponsored by Minister of State for Local Development Adel Labib. It would mandate governorates to set up independent investigation committees that answer to the Local Development Ministry, said Labib.

On your marks, get set…: Political parties are now in overdrive, or as Al Ahram calls it “a panicked rush,” in anticipation of the Supreme Elections Committee’s announcement of the election timeline and opening the door for candidates to throw their hats into the ring. Parties are rushing to form coalitions and choosing electable candidates to fill both independent and coalition-list seats. Meetings between the Egyptian Front Coalition (which thinks it has be best chance at dominating the House of Representatives) and the “For the Love of Egypt” electoral list will hold meetings to see if they can form a single coalition, said EFC executive committee member Yahiya Kadry. EFC’s strongest component, the Egyptian National Movement Party, held meetings with leading members from across the governorates to devise a comprehensive election strategy.

Apple has not been exempted from UAE ownership laws and will not be allowed 100% ownership of Apple stores in the Emirates, Ahmad Al Hosani, the Director of Trade Registration Department at the Economy Ministry, told Gulf News. “Apple was licenced in the UAE through the Ministry of Economy according to the requirements of, and in compliance with the Commercial Companies Law, as well as the ministerial resolution on foreign company branches. Within this mandate, branches of foreign companies in the UAE have full management rights provided they work through an Emirati service agent,” Al Hosani added. The comments came after media in the UAE widely reported that Apple would have 100% foreign ownership of any local presence, as we reported last week.

In-depth look at return of militancy in Egypt, and the rift between Al Qaeda and Daesh: The prolific Samuel Tadros returns, writing with Mokhtar Awad, with another long read (c.4,300 words) on the history of both Daesh and its Sinai affiliate Wilayat Sina in Egypt. The authors point out that with regard toboth the Italian Consulate bombing and that of Thursday morning’s attack on the state security building in Shubra El Kheima: “Instead of a claim by Wilayat Sinai, the Islamic State mother organization itself took the credit.” The authors argue that Wilayat Sina’s pledge of allegiance to Daesh has led to an outflow of its members to other jihadi groups in Egypt aligned with Al Qaeda. (Read Bay’a Remorse? Wilayat Sinai and the Nile Valley by Samuel Tadros and Mokhtar Awad).

Erdogan hopes to hold snap elections on 1 November: The Turkish president made his remarks on Friday, following his rejection of the request of the CHP, the main opposition party, to form a coalition government. “Erdogan’s decision to call snap polls is a high-stakes gamble,” said Wolfango Piccoli, managing director at New York-based political risk consultancy Teneo Intelligence. “Despite the urgency of the current environment, particularly given the inevitability of further terrorist attacks, elections are unlikely to yield either a viable coalition arrangement or an outright AKP majority.” (WSJ, paywall)

UAE’s KBBO Group plans USD 1 bn-plus IPO of merged subsidiaries –sources: Abu Dhabi-based KBBO Group is said to be planning the merger of two of its investment firms, Centurion Investment and Infinite Investment LLC, followed by raising more than USD 1 bn in a listing of the merged entity, according to two sources with knowledge of the matter speaking to Reuters. “In March, KBBO said it plans to invest USD 2 bn in key sectors of Egypt,” Reuters notes.

ICYMI: Inside Amazon: Wrestling Big Ideas in a Bruising Workplace, by Jodi Kantor and David Streitfeld, published on 15 August, has gone on to become the most-commented on article on The New York Times, raising larger questions about work-life balance beyond its focus on the online retailer. The piece also calls into question Amazon’s principles, arguing they lead to a hostile and paranoid workplace. The article itself has already generated its own blowback: The Columbia Journalism Review has offered a critique of the piece, saying that “even 100 voices [the number of former and current Amazon employees interviewed for the story] offer little more than a whisper within a company of many thousands, and certainly not a random sample.” Diginomica repeats CJR’s criticism, pointing to other pieces which show that according to many statistics, Amazon is not out of place in its industry with regard to employee turnover and other metrics. David Heinemeier Hansson, creator of Ruby on Rails and outspoken co-founder of Basecamp(formerly 37Signals), weighs in, writing that when it comes to problems within a company’s culture, ‘CEOs are often the last to know.’

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A MESSAGE FROM PHAROS HOLDING

A possible ‘perfect storm’ for emerging markets means a tactical underweight is the preferred course of action on CIB

CIB has witnessed a significant decline in its share price over the past few sessions. Notably, the share price has plunged 13.7% since our most recent CIB valuation update published on 29 July 2015 and is trading at its lowest levels in 2015YTD. As we pointed out in our most recent valuation update on CIB, Egypt’s largest private lender is the largest constituent of the MSCI Egypt EM Index and, thus, any capital outflows from EM would whole-heartedly be felt at CIB. As noted last week by the FT, nearly USD 1tn have been pulled out of EM financial markets over the last 13 months, which largely explains the current performance of CIB shares.

The bank remains well positioned in Egypt with strong underlying fundamentals to sustain its profitability and market share for the share price to rebound close to our FV estimate. That said: We believe a tactical underweight is the preferred course of action in the short-term, given what seems to be an upcoming perfect storm for EM and given that the bank trades at only 6.9% below our FV estimate. This perfect storm, which could be triggered by a rate hike in the US in September, significantly raises the risk of a steep EGP devaluation (or depreciation) versus the USD in the very short-term, which may deter foreign investors from building aggressive long positions in Egyptian equities. Click here to read more.
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EGYPT IN THE NEWS

Yair Rosenborg, writing for Tabletmag, sheds a light on the life of Haitham Hassan, Tel Aviv University’s first Egyptian Valedictorian. “Haisam Hassanein was born and raised in rural Egypt, probably the last place one would expect an Israeli university’s valedictorian to hail from.” A video of Hassan’s valedictorian address is available here, (running time: 7:09).

Reuters writes on the string of “enforced disappearances” of Egyptian activists, focusing on the reported abduction of Suhayb Saad to shed light on allegations that security forces are kidnapping activists to force them “to confess on television to crimes they never committed”. The government’s response to its domestic critics is described as “one of the toughest security crackdowns in Egypt’s history” and likely in leading to further radicalisation. (Read)

WHAT YOU CLICKED ON LAST WEEK

The most-clicked links in Enterprise last week were:

• How much more expensive can homes in Cairo get? (SODIC)
• Photo of the year: A pigeon’s opinion of Erdogan (jpeg image)
• The Brotherhood Divided (Hudson Institute)
• Amr Helal joins Duet – CI Capital to lead Egypt Opportunities Fund (company statement, pdf)
• Top Model of the World comes to El Gouna (company website)

WORTH READING

An extensive public debate over the clauses of the new Civil Service Law has been taking place on the pages of Al Shorouk. Socialist activist, lawyer and former presidential candidate Khaled Ali penned an op-ed suggesting the law harms pension and social insurance funds. Ali takes particular issue with article 67 of the law that allows employees aged 50 and above to cash in their pensions and enter early retirement. He says that this clause effectively deprives the national pension fund pool of the government’s future contributions if employees trigger the early retirement clause. Ali counters with a number of possible solutions to the issue. On Thursday, Social Solidarity Minister Ghada Waly replied to Ali’s op-ed, saying article 67 was included to reduce the size of the bloated public sector. The cost of government labour constitutes over a quarter of annual public expenditures, Waly says, and public sector employees have low productivity levels. This disguised unemployment leads to increased social discontent with government services. Waly couples this rationale along with presenting an article noting that the state’s budget will cover any contribution shortages to the public pension’s fund to dispel Ali’s fears and guarantee the safety of the pensions system and the soundness of article 67.

DIPLOMACY

Al-Qassam Brigades vow action over abducted Palestinians in Egypt: Al-Qassam Brigades, the military wing of Hamas, issued a statement on Friday warning that Wednesday’s “abduction” of four Palestinians from a bus on its way to Cairo from the Rafah border crossing “will not be tolerated,” Daily News Egypt reports. The statement further read that the incident “breaks all diplomatic and security norms of the Egyptian state”.

Palestinian President Mahmoud Abbas announced his resignation as the head of Palestinian Liberation Organization, (PLO) along with nine other members, on 22 August, Al Arabiya reported. PLO Executive Committee member Wasel Abo Yousef said that an emergency meeting will be held to elect a new executive committee. PLO official Saab Erakat, however, denied Abbas’ resignation to the Jerusalem Post. The Jerusalem Post is the only newspaper to report denial of Abbas’ resignation.

Debrief: 8th tripartite summit on the Grand Ethiopian Renaissance Dam: The tripartite summit issued directives calling for consultants to submit their amended technical specs to a panel of experts commissioned by Egypt, Sudan and Ethiopia, with a deadline of no less than seven days, reports Al Ahram. However, the Water Resources Minister said that the deadline for submission will be 5 September. The next tripartite summit will take place in Cairo following review of studies on the GERD.

Egypt released 37 Sudanese prisoners on Friday, following an order from President El Sisi earlier this month. Despite this, Sudanese authorities arrested another group of Egyptian fishermen on Saturday for trespassing in Sudanese territorial waters. The families of the fishermen have demanded El Sisi and MoFA intervene. Meanwhile, 15 Egyptian fishermen were released from Tunisia on Friday, where they had been held in detention for a over a month. The men had been charged with fishing in Tunisian territorial waters without a license.

Cairo will host a high-level meeting of the Eurasian Economic Commission (EEC) high-level meeting from 14-17 September, according to Minister of Foreign Trade and Industry, Mounir Fakhry Abdel Nour on Saturday, DNE reported. “The meeting will discuss the feasibility study conducted by both sides on the establishment of a free trade zone between Egypt and the Eurasian Economic Union (EEU) states, which are Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.”

**Further reading in Diplomacy: Gilad Wenig and Eric Trager argue in The Hill’s Congress Blog: ‘Bring back Bright Star.’ “… Despite the dialogue’s failure to change popular Egyptian perceptions of U.S. policy, Kerry … acknowledged Washington’s readiness to restart Bright Star. This bi-annual military exercise … was the centerpiece of the U.S.-Egypt strategic relationship, and its resumption in 2016 should be a no-brainer … “

ENERGY

Egypt signs USD 1.4 bn oil agreement with Aramco
Reuters | 20 Aug 2015
Egypt signed a three-month oil product agreement with Saudi Arabia’s Aramco worth USD 1.4 bn. The agreement will come into effect in September and stipulates that Egypt will pay Aramco within a year, Oil Minister Sherif Ismail said. The agreement “includes 500k tonnes of diesel fuel, 220k tonnes of heating oil and 150k tonnes of gasoline per month,” according to Reuters. (Read)

GANOPE says companies working on reducing flaring
Al Mal | 19 Aug 2015
Oil companies working on GANOPE’s concession areas are working to reduce flaring, GANOPE’s Chairman Abu Bakr Ibrahim said. Magapetco and Dana Petroleum’s JV Zeitco are leading the way in reducing flaring and adding extra output to the national grid, Ibrahim added. Ibrahim pointed out specifically that Zeitco is preparing an assessment to utilize around 6 mcf of associated petroleum gas. (Read in Arabic)

Beltone Capital, Total negotiating USD 80 mn in funding from international institutions
Al Mal | 20 Aug 2015
Beltone Capital and Total are negotiating USD 80 mn in funding from unnamed international institutions, Al Mal reported. The money will be used to finance the building of a solar power station in Gouna and the companies are currently working on finalizing technical and financial assessments for the project. The solar power station has been agreed to with Orascom Development to produce 50 MW of electricity at an estimated cost of USD 100 mn. (Read in Arabic)

INFRASTRUCTURE

Alexandria Port issues five liquid bulk projects
Al Mal | 19 Aug 2015
Not satisfied with being the leading domestic port in traditional imports and exports, the Alexandria Port Authority is issuing a plot of land in the Dekheila port for a 15-year BOT contract to expand into liquid bulk and chemicals trading. The land plot is divided into five parts and totals at 64k sqm. The expansion is built on demands from companies operating in the respective fields, most notable of which is the Samir Fahmy Group which asked for 50k sqm for itself. (Read in Arabic)

EGP 180 mn allocated for Western Desert Road developments in Aswan
Al Mal | 21 August 2015
The General Authority for Roads and Bridges was allocated EGP 180 mn from the Aswan Governorate for development works on the Western Desert Road in Aswan. The project involves repaving a 70 km stretch of road between Kom Ombo and Edfu, according to Aswan Governorate Secretary General Mohamed Mostafa. An engineering council from the University of Aswan has been tasked with surveying faults with the road, and installing road signs to minimize accidents. (Read in Arabic)

MANUFACTURING

Zeina for Paper Products to open new EGP 160 mn factory in 2016
Amwal Al Ghad | 22 Aug 2015
The Egyptian Company for Paper Products (Zeina) will open a new EGP 160 mn factory in the 10th of Ramadan City in 2016. The factory’s output should reach 2.5k tons monthly, said Abdel Kareem El Natout, Zeina President. The company has EGP 1 bn in investments in the local market and has a month output of 23k tons. (Read in Arabic)

HEALTH & EDUCATION

Minister of Education appoints 24.7k teachers as part of the 30k Teachers Contest
Youm7 | 22 Aug 2015
The Minister of Education approved a ministerial decree that the appoints 24.7k teachers and assistant teachers as part of the 30k Teachers Contest on 22 August. Nearly 5k teachers were not included in the ministerial decision. Additionally, the Ministry of Education approved nearly 2k teacher requests to serve at or near their home governorate. In a statement, the Ministry of Education announced that appointed teachers and teacher assistants will officially sign their contracts on 26 August in their designated district of work. (Read in Arabic)

TOURISM

Boat sinks in Red Sea after hitting coral reefs, all passengers on board rescued
Reuters | 20 Aug 2015
A boat carrying 26 French tourists and 10 Egyptians sank in the Red Sea on Thursday. All those on board were rescued, Reuters reported. There were no further details available on the incident, which occurred near Marsa Alam, but the boat is believed to have sunk after hitting some coral reefs. (Read)

Damage reported at the Mohamed Ali Palace in Shubra following bombing
Al Shorouk | 20 Aug 2015
The Mohamed Ali Palace in Shubra was damaged following the bombing that targeted the nearby state security building on Thursday. There are some noted damage to the palace, Antiquities Minister Mamdouh El Damaty said. El Damaty has called for forming a committee to assess the extent of the damages and begin the restoration works. (Read in Arabic)

Ministry of Antiquities picks between four contractors to develop Khan El Khalili
Al Mal | 20 Aug 2015
The Ministry of Antiquities is currently deciding between four offers from contracting companies, out of 13 that were submitted in a public tender recently to develop the Khan El Khalili area, according to Deputy Minister of Antiquities Mohamed Abdel Aziz. The winning offer will be announced next week, he added, noting that the Khan El Khalili development project involves restoration jobs for the floors, tiling and shop facades. (Read in Arabic)

South Sinai investors recommend 2-year halt to property tax
Youm7, Egypt Independent | 22 Aug 2015
Atef Abdel-Latif, a member of the South Sinai and Marsa Alam Investors Association, has called for the real estate tax to be halted for two years on South Sinai investors, saying that the tourist industry is “already shackled with several taxes,” according to Youm7 and Egypt Independent. The devaluation of the Russian ruble, the reduced inflow of tourists and security concerns have all had a negative impact on resorts from sufficiently meeting their obligations, he said.

AUTOMOTIVE & TRANSPORTATION

Dongfang Electric Corporation offers to modernize Alexandria-Abu Qir rail line
Al Borsa | 20 Aug 2015
China’s Dongfang Electric Corporation (DEC) has offered to develop the Alexandria-Abu Qir rail line, substituting the line’s diesel locomotives with modern electrical engines. The Chinese company plans to finance the project with a USD 700 mn credit facility from Exim Bank of China. The terms of the facility include a 20 year payment plan and five year grace period. (Read in Arabic)

BANKING & FINANCE

EFSA approves ABK’s acquisition of Piraeus Egypt
Reuters | 20 Aug 2015
The Egyptian Financial Supervisory Authority (EFSA) approved of Al Ahli Bank of Kuwait’s (ABK) acquisition of Piraeus Bank’s Egypt unit, Reuters reported. The approval gives ABK the green light to move forward with its plan to buy 98.5% of the Piraeus Egypt’s shares for USD 150 mn in cash. ABK had already received regulatory approvals from central banks in Egypt and Kuwait to move forward with the agreement. (Read)

EGYPT POLITICS + ECONOMICS

Dimian won’t merge tax and customs authorities, employees refuse his incentive scheme
Al Masry Al Youm | 19 Aug 2015
Finance Minister Hany Dimian refused a proposal to merge the tax and customs authority, Al Masry Al Youm reported. The proposition called for merging the two authorities to form an entity called “Sovereign Resources Authority.” In turn, the tax and customs employees’ representatives refused the incentive scheme proposed by Dimian. A source told the newspaper that Dimian is not inclined to yield to the protesting employees’ demands. Shocking, we know. (Read in Arabic)

Export councils submit official request to have dollar deposit limit removed
Al Shorouk | 20 Aug 2015
Egypt’s export councils sent the Prime Minister an official request calling for removing the cap placed by the CBE on dollar deposits. The request followed a series of meetings held by various Egyptian export councils, a source told Al Shorouk. Industry and Trade Minister Mounir Fakhry promised the exporters that he will discuss the issue with the CBE. An anonymous source, however, said that the CBE would not consider lifting the limits imposed until the exchange rate reaches a fair value that he did not specify. (Read in Arabic)

NATIONAL SECURITY

Army chief of staff Lt Gen Mahmoud Hegazy meets with former British diplomat: Lieutenant General Mahmoud Hegazy met with retired British diplomat Sir John Jenkins in Cairo on Thursday, along with a British delegation, as reported by Ahram Gate and Ahram Online, (although the individual pictured and cited in the photo caption is not Jenkins). The meeting was attended by senior military officials and discussed mutual interests and regional security concerns such as the war on terror. Jenkins was formerly the UK’s ambassador to Saudi Arabia, and was previously appointed to investigate the activities of the Ikhwan in the United Kingdom.

Former supreme guide to the Ikhwan Mohamed Badie received his sixth life sentence on Saturday: The sentence was handed down by Port Said Criminal Court in a session held at the Police Institute of Tora on Saturday. Badie was charged with breaking into Al-Arab police station. Other defendants in the case, who also received life sentences, include Mohamed El-Beltagy, Safwat Hegazy, and other prominent members of the banned group, according to DNE. Badie has already received life and death sentences in other cases.

Installing surveillance cameras a ‘must’ before commercial licensing in Cairo -Deputy Cairo Governor: Installing surveillance cameras at shops in Egypt’s capital is a prerequisite for the issue or renewal of a commercial license, per a decision by the Cairo governorate, according to Youm7 and the Cairo Post. According to Cairo Post, several militants have later been apprehended thanks to surveillance footage from nearby banks and public institutions.

A wildcat strike in Sharqiya by low-ranking members of the security forces is being blamed on Ikhwan organizers, Ahram Online reports, writing, “The protesting policemen are demanding financial incentives for the months of June and July, along with being provided medical treatment in police hospitals, a health service currently exclusive to police officers.”

More mosques requisitioned by Ministry of Religious Endowments: The Ministry of Awqaf announced it has requisitioned two mosques in Fayoum on Monday, as they were alleged to belong to Al-Jamia Al-Shariya, “an NGO accused of having links to the Muslim Brotherhood, and the Salafi Call, the religious arm of the Salafi Nour Party,” DNE reported. “Al-Jamia Al-Shariya had its funds and assets in 138 local branches confiscated by the Ministry of Justice’s committee entitled to review Muslim Brotherhood assets and funds.”

ON YOUR WAY OUT

The Cairo Governorate will begin the Nile Corniche development project next week, Cairo Governor Galal Mostafa told Al Mal. The governorate has complete coordination between the ministries of Water Resources, Housing, and Environment. The developments include cleaning, planting trees and pedestrian crossings, as well as repaving the Kasr El Nil and Galaa bridges, said Mohamed Ayman Abdel Tawab, deputy governor for West Cairo,

The Cairo Cleaning and Beautification Authority has contracted for some 2,000 dumpsters that will be distributed around Cairo governorate as part of the local administration’s ongoing bid to address the capital city’s perennial garbage crisis, according to reports in the domestic press. The dumpsters will be supplied by the Ministry of Military Production.

Giza moves to clear street vendors: Giza governorate began rousting unlicensed street vendors and fining stores whose displays spill out onto sidewalks on Friday, Ahram Gate reports. The campaign follows in the footsteps of Cairo governorate’s similar initiatives in April to clear downtown Cairo of vendors. Giza Governor Khaled Zakariya said that security forces will keep a watchful eye to ensure transgressors transgress no more.

Thousands of Lebanese protest against government in Beirut: Thousands of protesters calling for “The people want the overthrow of the regime” were met with tear gas and water cannon by security forces in Beirut on Saturday, Reuters reported. Demonstrators demanded the government step down following uncollected garbage reaching crisis levels over the past few weeks. Lebanese prime minister Tammam Salam is expected to give a speech on Sunday to address the issue. Lebanon’s presidency has been vacant for more than a year.

Koreas hold talks on Saturday aimed at preventing larger conflict: The Koreas held high-level talks on Saturday evening aimed at defusing an escalating conflict which reached the exchange of artillery fire on Thursday. The latest flare-up followed South Korea blaring propaganda out of loudspeakers near the border, in response to the maiming of two South Korean border guards by land mines that the South accused the North of planting, according to the NYT. North Korea had issued a 48-hour ultimatum ahead of the talks for South Korea to cease broadcasts.

BY THE NUMBERS

USD CBE auction (Thursday, 20 August): 7.7301 (unchanged since Sunday, 05 July)
USD parallel market (Thursday, 20 August): 7.93 (+0.02 from Tuesday, 18 August)

EGX30 (Thursday): 7,172.63 (-0.94%)
Turnover: EGP 459.2 mn (2% below the 90-day average)

WTI: USD 40.45 (-2.11%)
Brent: USD 45.46 (-2.49%)

TASI: 8,012.8 (+ 0.3%)
ADX: 4,512.5 (-1.4%)
DFM: 3,709.8 (-3.2%)
KSE Weighted Index: 402.8 (-1.6%)
QE: 11,345.5 (-2.5%)
MSM: 6,089.9 (-1.0%)

CALENDAR

24 August (Monday): Indian Minister of External Affairs Sushma Swaraj to visit Egypt.

25-27 August (Tuesday-Thursday): President Abdel Fattah El Sisi on a state visit to Moscow.

29 August (Saturday): Next session in the retrial of former Al Jazeera journalists Mohamed Fahmy, Baher Mohamed and Peter Greste.

01-03 September (Thursday-Friday): Cairo Energy, Cairo International Convention Center. View the conference website here.

02-03 September (Wednesday-Thursday): Cashless Forum, Dusit Thani, New Cairo

03 September: (Thursday): President Abdel Fattah El Sisi is due to visit Beijing for China’s commemoration of the end of the Second World War.

07-08 September (Monday-Tuesday) Euromoney Egypt, 20th anniversary conference.

07-09 September (Monday-Wednesday): Fifth Annual EFG Hermes London MENA Conference

08 September (Wednesday): Rift Valley Railways: An Integrated Logistics Solution in East Africa, hosted by Qalaa Holdings at the Federation of Egyptian Industries.

08-10 September (Tuesday-Thursday): Egypt Cyber Security Summit, Novotel Cairo Airport.

12 September (Saturday): Labor union demonstrations planned in protest of the Civil Service Act, Fustat Park, Old Cairo.

14-15 September (Monday-Tuesday): Egypt Real Estate Summit, Four Seasons at Nile Plaza Hotel, Cairo. Visit the official website here.

14-16 September (Monday-Wednesday): SPE North Africa Technical Conference and Exhibition, Fairmont Heliopolis, Cairo. View the official event page here.

14-17 September (Monday-Thursday): Eurasian Economic Commission (EEC) high-level meeting, Cairo.

16 September (Wednesday): Post-Summit Retail Development Forum / Cityscape Awards for Real Estate in Egypt, Four Seasons at Nile Plaza Hotel, Cairo. Official website for the forum here and awards page here.

16-19 September (Wednesday-Saturday): Cityscape Egypt Exhibition, Cairo International Convention Centre. Visit the official website here.

22-24 September (Tuesday-Thursday): Eid Al Adha. Date is tentative and subject to change. (National Holiday)

29-30 September (Tuesday-Wednesday): Intelligent Cities Exhibition & Conference, Fairmont Heliopolis, Cairo. View the conference website here.

06 October (Tuesday): Armed Forces Day (National Holiday)

14 / 15 October (Wednesday): Muslim New Year (Hegria 1437). Date is tentative and subject to change. (National Holiday)

18-21 October (Sunday-Wednesday): Wind Power North Africa, focusing on Egypt, Morocco, Libya and Tunisia.

27-28 October (Tuesday-Wednesday): Solar Projects Egypt.

27-28 October (Tuesday-Wednesday): Housing Egypt Summit, Novotel Cairo Airport. Preceded by a one-day event focusing on financing and mortgages.

29-31 October (Thursday-Saturday): Africa Investment & Trade Summit in Sharm El-Sheikh

13-16 December (Sunday-Wednesday): Cairo ICT 2015, Cairo International Conference Center.

23 December 2015 (Wednesday): Prophet Muhammad’s Birthday (National Holiday)

03-05 February 2016 (Wednesday-Friday): FRUIT LOGISTICA fresh produce exhibition, Berlin. Egypt is the official partner country of the event, where it aims to raise its profile of agricultural exports to Europe. View the exhibition page here and register online here.