Are you or your firm in the “Panama Files”? Alaa Mubarak is, along with half of the Gulf’s rulers past and present.

SUBJECT LINE

Panama files target Alaa Mubarak, Gulf rulers. Foreign fund managers have appetite for Egypt. Prosecutor probes FX offices. State settles with Hussein Salem.

TL;DR

Are you or your firm in the “Panama Files”? Alaa Mubarak is, along with half of the Gulf’s rulers past and present.

Foreign fund managers have new appetite for Egypt, Reuters poll finds. (Speed Round)

Prosecutor investigates 15 FX bureaux on charges of hoarding. (Speed Round)

State reportedly settles with Hussein Salem. (Speed Round)

BG wants to export 150 mcf daily as a condition of resuming operations on Phase 9B. (Speed Round)

Italian tourism associations threatens to halt activities to Egypt if Regeni murder not solved. (Speed Round)

US Senator Lindsey Graham wants to see increased military aid to Egypt. (Diplomacy + Foreign Trade)

SUMED seeks over USD 100 mn in financing despite Saudi objections. (Energy)

Juhayna subsidiary sells stake in milk producer. (Basic Materials + Commodities)

By the Numbers

WHAT WE’RE TRACKING TODAY

Are you or your firm in the “Panama Files”? The International Consortium of Investigative journalists, an activist-journalist outfit, has partnered with the Guardian, the BBC and Germany’s Süddeutsche Zeitung on a series headlined “A new ICIJ Investigation Exposes a Rogue Offshore Industry.” The introduction to the story promises to reveal how “mns of documents show heads of state, criminals and celebrities using secret hideaways in tax havens,” among them, they claim are Alaa Mubarak (the son of former president Hosni Mubarak), King Salman of Saudi Arabia, the UAE’s Khalifa bin Zayed Al Nahyan, Qatar’s Hamad bin Jassim bin Jaber Al Thani and Hamad bin Khalifa Al Thani. (Start here if you want to view by person the packages released so far.) The stories are based on what’s allegedly a leaked trove of 11.5 mn documents from the Panamanian law firm of Mossack Fonseca. The documents and stories are still trickling out, but we’ll be sifting what’s available now for stories of regional interest after tripping across this nugget: “The firm has serviced enough Middle East royalty to fill a palace. It’s helped two kings, Mohammed VI of Morocco and King Salman of Saudi Arabia, take to the sea on luxury yachts.” Tap here to go to the landing page for the series. The Guardian’s scene-setter is here, including a helpful Q&A noting “Are all people who use offshore structures crooks? No. Are some people who use offshore structures crooks? Yes.” The story has already crossed over into the domestic press, with Al Borsa picking it up.

Several readers asked yesterday why we ignore special transactions in our monthly tabulation of the EGX league table, saying the transactions generate significant income. While the list without specials is our tradition given it represents organic trading through a firm’s platform, we’re going to report the results without specials and, separately, the league table for special transactions going forward. For the month of March, the EGX’s table for “traded deals” is headed by EFG Hermes, followed by Pharos, HC Securities, Beltone, and the Egyptian Arabian Company (Themar). The overall ranking (specials plus normal trading activity) sees EFG Hermes at the head of the list, followed by CI Capital, Pharos Holding, HC Securities and Beltone.

Arabian Cement is holding its 4Q2015 results conference call today at 3 pm CLT. Joining the call are CEO Jose Maria Magrina, CFO Allan Hestbech, and IR Manager Haitham El Shaarawy.

WHAT WE’RE TRACKING THIS WEEK

The Purchasing Managers’ Indexes for Egypt, Saudi Arabia and the United Arab Emirates will be out tomorrow by 7:30am CLT.

Saudi Arabia’s King Salman will visit Cairo on Thursday for talks with senior Egyptian officials including President Abdel Fattah El Sisi. Chatter in the local press is that we can expect to hear announcements of new Saudi companies investing in manufacturing, agriculture, tourism, and real estate.

ON THE HORIZON

Al Borsa reported yesterday that Egypt will begin exploring the possibility of an International Monetary Fund facility at the upcoming spring meetings of the IMF and World Bank for 15-17 April in Washington, DC. The story adds little new to chatter in the business community and cites unnamed sources. Due to attend: Finance Minister Amr El Garhy, International Cooperation Minister Sahar Nasr and Central Bank of Egypt Governor Tarek Amer. The website for the meetings is here. Or tap here to check out the tentative list of seminars for both institutions.

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SPEED ROUND
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FX bureau crackdown: The Prosecutor General is investigating 15 FX bureaux after the Central Bank of Egypt reported them for hoarding USD, sources tell Reuters. CBE Governor Tarek Amer met the Prosecutor General on Saturday, as we reported yesterday, and requested an investigation amid accusations that some FX traders are fuelling a USD crisis by refusing to sell their stock of USD. “Based on his request the prosecution … requested from the unit in charge of public funds to investigate these [bureaux],” a source told the newswire. Sources tell Al Masry Al Youm that the number of bureaux being investigated stands at 14 and that they are being managed with the committee tasked with overseeing sequestered Ikhwani assets. Amer reportedly said he does not want to shut them down, but wants to force them to abide by market regulations.

Meanwhile, the EGP rallied slightly against the USD on the parallel market, with EGP changing hands at 10.05 to the USD, Al Mal reports.

Foreign fund managers have new appetite for Egypt in the wake of devaluation, according to Reuters’ monthly poll of 14 leading fund managers. Thirty-six percent expect to raise their allocations to Egyptian equities in the coming quarter in what Reuters calls “the most positive balance toward Egypt since December. Last month, 21 percent expected to cut their exposure there and 7 percent to raise it.” The newswire quotes the head of asset management at Abu Dhabi’s The National Investor as saying, “Investors are more confident to allocate money to the country,” but cautions that the FX crunch continues and that more devaluation could be on the way. Investors have also turned negative on Qatar as stocks go ex-dividend and on balance feel that the rally in the GCC equities market lacks a catalyst.

BG wants an agreement to export 150 mcf daily if it’s going to resume work on Phase 9B and wants to amend the price of gas and reschedule the company’s receivables from EGPC. While the oil minister agreed to the exports, he said amending the exploration agreement and gas price are for the House of Representatives to decide, sources tell Al Borsa.

The non-profit Italian Association for Responsible Tourism is halting all of its travel activities to Egypt “until the murder of Italian student Giulio Regeni is solved,” Ahram Online reports. The association explained in a statement that “Egypt is a wonderful country that offers great cultural attractions…but a vacation is not possible in the context of pain and indignation.” The group provides links to tours organised by accredited partners and promotes responsible tourism. The suspension of AITR’s activities will double the losses of the Egyptian tourism sector, according to head of the Federation of Egyptian Chambers of Tourism Elhamy El-Zayat, Daily News Egypt reports. “The sector has no means of curtailing losses in these conditions. The issue is now connected to politics in every aspect,” he said. Meanwhile, Al Shorouk is reporting that the first Italian flights to Matrouh are scheduled in mid-June, with sector workers expecting a slow summer season.

An Egyptian security team will reportedly be sent to Rome on Tuesday to provide Italian authorities with the complete case file on the Regeni murder, Lamees Al Hadidi talk show host announced, basing her information on sources close to the case, Al Mal reports.

The government has settled with fugitive businessman and East Mediterranean Gas owner Hussein Salem for EGP 5.8 bn and 95% of his non-liquid assets, announced Justice Minister Hussam Abdel Rahim. The settlement, which was agreed upon in conjunction with the Prosecutor General, will be sent to the cabinet for approval, he tells Al Ahram. Abdel Rahim’s predecessor, Ahmed El Zend, had announced right before his sacking that a settlement had been reached with Salem but had not announced the terms. El Zend had long been an advocate for settling with businessmen accused of corruption for a fee, and it would appear his successor favors the policy as well.

House committee expects to complete review on cabinet’s program on Wednesday: The parliamentary committee on the cabinet’s national program will complete its review of the program by Wednesday, Ahram Gate reports. As we noted yesterday, the committee was supposed to submit its full report to the House today, but delayed it as the subcommittees on economics, administrative reform, and democracy have yet to complete their reports. Finance Minister Amr El Garhy was reportedly asked to discuss in more detail the financing projects on the agenda.

EGYPT IN THE NEWS

Ahram editor sends warning on Regeni case: The Associated Press has taken note of a front-page opinion piece written by Al Ahram editor in chief Mohamed Abdel Hady Allam that warns if authorities don’t swiftly deal with the Giulio Regeni issue, Italian-Egyptian relations will be on the line. In the wake of the Italian Association for Responsible Tourism halting activities to Egypt, Allam warned that a “moment of truth” between Egypt and Italy over Regeni may be “fast approaching.”

The Jerusalem Post is carrying a piece pegged “Egypt asks Hamas about status of four Israeli prisoners of war” following the announcement last week that Hamas was in possession of the remains of two IDF soldiers, and two Israeli nationals who went missing in the Gaza Strip. A Hamas delegation was in Cairo last week to rebuild relations with the Egyptian government.

THE MACRO PICTURE

An oil-driven surge has put Russia on the bull track with several strategists but investors aren’t quite feeling the love, according to Bloomberg. “There were a lot of short positions in oil which were closed, and an advance in oil prices helped Russian stocks rally, but I am still rather skeptical about oil prices and I don’t think the rally in Russian stocks is sustainable,” according to Hermes Investment Management fund manager Gary Greenberg. “A tactical short-term trade on the back of a commodity rally is one thing. It has nothing to do with fundamental investment.”

The FT (paywall) reports that several banks are inching their way back to Iran, with Belgium’s KBC and Germany’s DZ Bank both confirming they began handling transactions on for European clients doing business in Iran after the lift on sanctions. But the shift isn’t happening as fast as some would like, with “growing political pressure on European banks to support corporate clients seeking to do business in Iran.” The chairman of one of Europe’s biggest banks told the paper: “All the lawyers’ reports I get continue to say there are still many sanctions left on Iran. It is difficult to know who you are dealing with as it has become uncharted territory.”

DIPLOMACY + FOREIGN TRADE

US Senator Lindsey Graham wants to see increased military aid to Egypt: A US congressional delegation met with President Abdel Fattah El Sisi yesterday to discuss security and stability, Ahram Online reports. Egypt’s stability “is more important than [at] any other time,” said US Senator Lindsey Graham. The delegation met a day earlier with Defense Minister Sedki Sobhi to “exchange visions on the the development of the situation in the region.” During a press conference following the meeting, Senator Graham said he wants to see an increase in US military aid to Egypt, the Associated Press reported on Sunday.

Foreign Minister Sameh Shoukry meets with France’s Mideast peace talks envoy, Pierre Vimont, on Sunday, Al Wafd reports. Former French Foreign Minister Laurent Fabius proposed the international conference to revive peace talks, and said France would “recognize a Palestinian state” if the talks failed, the French Foreign Minister Jean-Marc Ayrault said, according to Ahram Online. “Nothing is ever automatic. France will present its initiative to its partners.”

The Agadir Agreement has been expanded to include Lebanon and Palestine, Trade and Industry Minister Tarek Kabil announced. Al Masry Al Youm reports that member states Egypt, Morocco, Tunisia, and Jordan believe an even closer economic cooperation is achievable. Trade and Industry Minister Tarek Kabil signed five agreements with governments of Jordan, Tunisia and Morocco, which hopes to curb dumping of goods in each other’s markets, and coordinating policies on cutting subsidies, competition, arbitration, and trademark rights, Al Mal reports. Kabil also announced that a delegation of some of Morocco’s leading private sector companies are scheduled to arrive on 25 April to discuss private sector investments, AMAY  reports.

Egypt signs six agreements and MoUs with Mauritania, during Mauritanian President Mohamed Abdel Aziz’s visit to Cairo, according to an Ittihadiya statement. The agreements include MoUs on cooperation in health, oil and gas and minerals as well as housing, utilities and urban development. The two sides also inked agreements on cooperation in maritime transport and livestock.

ENERGY

SUMED seeks over USD 100 mn in financing despite Saudi objections
SUMED is looking to borrow USD 100-120 mn to finance expansions, Al Shorouk reported. Saudi shareholders are reportedly opposed to the idea of borrowing, preferring, instead, to rely on equity financing. Source say the expansion will go towards increasing the pipeline capacity and is estimated to cost around USD 200 mn in total. (Read in Arabic)

El Sewedy submits proposal on Hamriyah plant bid in UAE
El Sewedy Electric submitted its technical and financial proposals for the USD 600 mn Hamriyah power plant in the UAE. Elsewedy is competing against seven international companies, including General Electric, Korea’s Doosan Group, China’s SIPCO, and Turkey’s GAMA. The project is located in the Sharjah emirate and includes shifting the plant’s current four gas turbines from a simple cycle to a combined cycle, while also adding a combined-cycle station. This bid makes El Sewedy Electric the first Egyptian company to qualify as a general contractor for energy projects in the UAE. (Read in Arabic)

Heliopolis Housing to build EGP 228 mn electrical transmission network in Heliopolis
Heliopolis Housing and Development signed a EGP 228 mn agreement with a certain National Company for General Contracting — an armed-forces-owned company — to design and build electrical substations and transmission lines in Heliopolis connecting the city with the Shorouk and Badr power plants, Al Borsa reports. (Read in Arabic)

More delays expected in implementing the fuel smart card system
Not enough fuel smart cards being distributed was behind the delay in implementing the fuel smart cards system, said EGPC deputy head Amr Moustafa. The system — a cornerstone policy aimed at slashing fuel subsidies — cannot come online until enough fuel smart cards have been distributed, Moustafa added, stopping short of specifying when that might happen. The statements come after reports in January that the system was nearing completion. President Abdel Fattah El Sisi indefinitely postponed the rollout in May 2015. (Read in Arabic)

INFRASTRUCTURE

EGP 4.1 bn in planned road development projects, says Housing Ministry
The Housing Ministry is studying EGP 4.1 bn in planned road development projects set to begin in the coming period, it announced on Sunday . This includes EGP 2.1 bn for developments to existing transport corridors to Sixth of October, and EGP 1.5 bn for developing the road to the Western Desert, the Southern Dahshour Road, and the entrance to Fayoum. The developments also include expansions to existing roads in residential and industrial neighbourhoods totalling over EGP 500 mn. (Read)

BASIC MATERIALS + COMMODITIES

Juhayna subsidiary sells stake in milk producer
Al-Enmaa for Agricultural Development, a subsidiary of Juhayna, is selling its stake in Milky’s for Milk Production. Al-Enmaa controlled 40% of the company and sold it for total consideration of EGP 56.5 mn. Juhayna says the “divestment is in line with the company’s strategy to divest indirect investments in milk production to focus on investment in focal sectors in agriculture and livestock production.” The sales proceeds will be used to finance operational expansions and increase the milking cow herd to 4,000 cows, according to a Juhayna statement to the EGX.  (Read)

Are we back to the Mines and Quarries Act?
Prime Minister Sherif Ismail called for the immediate implementation of the Mines and Quarries Act across all governorates in Egypt at a cabinet meeting held to prioritize and set their timelines for projects announced in the government program. The government’s Mineral Resources Act was shot down by the House back in January. The legislation was unpopular for setting what industry insiders claim were high royalties and rents in quarries. The cabinet’s national program had stated that it would develop the mining sector by skewing toward value-added projects rather than the sale of raw minerals. (Read in Arabic)

HEALTH + EDUCATION

No waiting list for Hepatitis C treatment by August, says Health Minister
Health Minister Ahmed Rady pledged there would be no waiting lists for hepatitis C treatments by August, fueled by donations collected by the Religious Endowments Ministry as well as the Tahya Misr Fund. The former donated EGP 2 mn and six new ambulances, while the latter has “contributed to the treatment of 150,000 patients.” (Read)

REAL ESTATE + HOUSING

Housing and Development Bank receives proposal from Acumen-Beltone to manage its real estate fund
Housing and Development Bank has received a proposal from Acumen-Beltone to manage the real estate fund the bank will launch in the coming period, sources tell Al Mal. The bank’s Chairman Fathy El Sebaei announced last week the intent to establish a real estate fund with a capital of EGP 200-500 mn, but the fund’s capital has not been determined, the sources added. The bank is still waiting on proposals from EFG Hermes and Pioneers, the source said. (Read in Arabic)

TOURISM

Sunrise Resorts will invest EGP 8 bn over three years
The Sunrise Resorts and Cruises group is looking to invest EGP 8 bn into the domestic market through late-2018, said Chairman Hossam El Shaer. The group, along with a Saudi investor, is currently building an EGP 7 bn compound in Ain Sokhna that will include three five-star hotels as well as entertainment and commercial complexes, he added. Sunrise Resorts are also building three five-star hotels in Sharm El Sheikh with a total capacity of 800 rooms at a total cost of EGP 1 bn, added El Shaer. The group operates 12 hotels, three of which it has temporarily closed in Hurghada and Sharm El Sheikh due to occupancy rates as low as 40% and 25%, respectively. (Read in Arabic)

TELECOMS + ICT

Mobile phone traders threaten to close shops amid reported security crackdown
Security crackdowns have eased up on mobile phone traders, Al Mal reports, after they threatened to strike between 5-6 April in light of a clampdown on shop owners along Abdul Aziz Street last week over a lack of customs clearance documents, according to DNE. “[After meeting with the head of the Cairo police investigations unit head], we agreed that mobile traders will not be locked up, but instead will be called upon legally if a violation transpires,” said VP of the Cairo’s Chamber of Commerce’s ICT Division Walid Ramadan on Sunday. Ramadan will meet the public funds chief and representatives of the Central Administration for Combating Customs Evasions to put forth a legal framework to organize mobile trading market in Egypt. A number of mobile shops have faced security crackdowns due to the lack of customs clearance documentation for the devices they sell.

AUTOMOTIVE + TRANSPORTATION

Thirteen companies bid for Egyptian National Railways consulting tender
Thirteen international companies have presented bids for the tender issued by Egyptian National Railways to overhaul the authority’s administration and increase its efficiency. The World Bank will finance the consulting, has conducted studies, and will review all official bids for the position of consultant, sources told Al Borsa. The studies are expected to take eight months to be completed and will begin in June, the source added. (Read in Arabic)

Nissan leads sales of locally assembled cars with 34.4% market share; bus sales down 16%
Nissan has grown its market share in sales of passenger cars assembled in Egypt to 34.4% in January and February, up from 16.5% during the same two-month period in 2015, according the auto market’s information council (AMIC). Hyundai came in second with a 29.8% market share of sales of locally assembled vehicles, followed by Chevrolet, which held a 12.4% market share, Al Mal reports. Meanwhile, bus sales in February fell 16% year-on-year 2,738 units, AMIC figures show, Al Mal reports in a separate story. Amr Nassar, executive director of commercial vehicle outfit MCV, blamed the FX crunch for the decline.

BANKING + FINANCE

EFSA to include provisions for SME insurance in the draft Insurance Supervisory Act
The Egyptian Financial Supervisory Authority (EFSA) plans to include special provisions that establish guidelines for the insurance of SMEs in the draft Insurance Supervision Act, said EFSA head Sherif Samy. His statements come at workshop on SME insurance hosted in cooperation with the German Agency for International Development. The move is part of EFSA’s  policy to promote greater financial inclusion of SMEs. (Read in Arabic)

CBE adopts EFSA’s bancassurance regulations
The CBE has adopted bancassurance regulations allowing commercial banks to contract to sell for up to four insurance companies, according to a CBE statement released on Sunday and picked up by Al Shorouk. As we noted last week, these regulations were adopted and approved by EFSA.

OTHER BUSINESS NEWS OF NOTE

Eastern Company projects EGP 1.35 bn in net profit after tax in FY2016-17
Eastern Company is expecting to increase its output to around 84 bn cigarettes in FY2016-17 to generate a net profit after tax of EGP 1.35 bn. Chairman Mohamed Othman expects the company to transfer EGP 34 bn to the state, up from EGP 31 bn in FY2015-16, as the company continues to be one of the biggest financiers of the treasury. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Khorshid picks up where Salman left off
Investment Minister Dalia Khorshid promised to better the investment climate through — get ready for it — a better approach to the one-stop investment shop program and by resolving outstanding investor disputes. Khorshid will also work on enhancing coordination between the cabinet’s economic group and the CBE. While her press conference is getting wide play in the national business press, the only specifics she had to add on bringing this investment climate is replace subordinates in the ministry and adapt a slicker PR approach. Khorshid is set to meet with a number of Saudi investors to settle all disputes with them before and prepare for the Saudi King Salman’s visit on Thursday, DNE reports.

ON YOUR WAY OUT

Finance Ministry advisor on tax policies Mahmoud Aly has submitted his resignation, sources told Al Masry Al Youm. Aly had assumed the role at the ministry around a year ago. He reportedly believes Finance Minister Amr El Garhy has a sufficient support team with sufficient experience.

And in the twilight zone that is Cairo’s justice system, a criminal court referred on Sunday TV host Ahmed Moussa and former Justice Minister Ahmed El Zend to trial for insulting former head of the Central Auditing Organization (CAO) Hisham Geneina, Ahram Online writes. The trial is set to start on 4 June. In a January interview on Sada El-Balad with Moussa, El Zend attacked Geneina and ex-head of the Judges Club Zakaria Abdel-Aziz, calling them tools of the Muslim Brotherhood and “working for them like gang members.”

Oriental Weavers is issuing an EGP 0.50 dividend per share, Reuters reported, as per a bourse statement. The ex-dividend date has not been announced yet.

A gas tanker overturned in the Gharb District of Alexandria on Sunday causing multiple injuries, Al Shorouk reports. Gharb District Chief Mohammed Fahim told Dream TV on Sunday night that poor road conditions caused the tanker to overturn, while claiming that the driver acted “stupidly”. (Read in Arabic)

CALENDAR

31 March-22 April (Thursday-Friday): The Downtown Contemporary Arts Festival (D-CAF), various locations, Cairo.

04 April 2016: Saudi Arabia’s King Salman visits Cairo.

07-10 April 2016 (Thursday-Sunday): Cityscape Egypt Conference, Cairo International Convention Centre, Cairo

13-16 April 2016 (Wednesday-Saturday): Cafex, Cairo.

17 April 2016: German economic delegation visits Cairo.

25 April 2016 (Monday): Sinai Liberation Day (national holiday)

26-28 April (Tuesday-Thursday): Arabian Hotel Investment Conference, The Madinat Jumeirah, Dubai.

01 May (Sunday): Easter Holiday / Labour Day (national holiday)

02 May (Monday): Sham El Nessim (national holiday)

02-03 May (Monday-Tuesday): The Middle East Investment Summit 2016, Ritz-Carlton DIFC, Dubai.

10 May (Tuesday): Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development, InterContinental Hotel Citystars Cairo. Register here.

16-17 May (Monday-Tuesday): Egyptian-Bahraini committee meets, Cairo.

25-26 May (Wednesday-Thursday): The Middle East and North Africa Solar Conference and Expo MENASOL 2016, Hyatt Regency, Dubai.

06 October (Thursday): Armed Forces Day (national holiday)

27 November 2016 (Sunday): 2016 Cairo ICT Conference Group

04-06 December 2016 (Sunday-Tuesday): Solar-Tec Conference, Cairo International Convention Centre, Cairo