VAT subject to public consultations • CBE adds fourth weekly currency auction • duties on Euro cars to drop 10% in 2015 • manufacturing exports flat • real estate tax for tourism projects to be reviewed • Qalaa exits 2 foundries • US analyst PNG’ed

FX WATCH

The EGP held steady against the greenback on Thursday as the central bank sold USD 38.8 mn at 7.1401 to the dollar, unchanged from the day before. In the parallel market, the USD was going for about 7.74 Egyptian pounds, one piaster weaker than on Wednesday. The rate over the weekend for the USD was 7.73 in the parallel market according to a trader who spoke with Enterprise.

WHAT WE’RE TRACKING TODAY

The Central Bank of Egypt appears to be stepping up its efforts to nudge the economy along, adding a fourth weekly currency auction and restrictions on conversion of Arab currencies into greenbacks while trying to channel excess EGP liquidity into real economic growth by lowering the cap on the size of money market funds. Stories below.

Happening today: 2014 Egypt Automotive conference, Semiramis InterContinental, Corniche El Nil, under the auspices of Minister of Trade and Industry Mounir Fakhry Abdel Nour and Minister of Investment Ashraf Salman.

WHAT WE’RE TRACKING THIS WEEK

Minister of Irrigation Hossam Moghazi is due in South Sunday tomorrow for a two-day visit, state-run MENA is reporting. The wire service noted that the visit comes after South Sudanese President Salva Kiir was in Cairo last month for talks that resulted in an agreement on water-resource management. (Read)

There are barely three months left before the Sharm El-Sheikh investment summit (13-15 March), and multiple members of the business and diplomatic communities with whom we’ve spoken are waiting for clues from conference organizers as to the structure of the event, the invite list and potential requests for sponsorship and participation.

The US Federal Reserve’s Federal Open Markets Committee is set to hold its last meeting of 2014 on Tuesday and Wednesday, with a statement and forecasts due to be released by 2pm EST (9pm CLT). (Read)

LAST NIGHT’S TALK SHOWS

Saturday evening was a quiet night for Egyptian talk shows, which is a good thing (see Our Dumb Media below).

Ibrahim Eissa was off, somewhere, which meant there wasn’t as much in the way of unintentional laughs to be had.

Amr Adeeb had the best quotes, as always. Adeeb’s focus was both the apparent lack of ambition of some of Egypt’s youth and the lack of support given to those who are striving to make their marks.

“Kids these days,” he decried, saying they want to grow up to be Okkega and Ortega while their counterparts abroad want to grow up to be Gates and Buffett. As for activists such as Alaa Abdel Fattah, Adeeb said that if we could somehow find a way to harvest the energy that these young activists put into Twitter, we could light up all of Egypt.

Changing the channel to Lamees El Hadeedy, her guest for the evening was Minister of Planning and Administrative Reform Dr. Ashraf El-Araby. Their topic of discussion was what El Hadeedy called the necessary “revolution in public administration” in the form of the new Civil Service Act. Dr. Araby has been making the rounds of talk shows recently (see our Egypt Politics + Economics section below) to discuss the act. This proved rather dry after some time, punctuated only by the loud and complicated problems of viewers calling in to the program, which quickly grew tiresome and led to:

Switching the channel back over to Amr Adeeb, where he highlighted the plight of a group of undergraduate engineering students who have put together a fuel-efficient vehicle that they claimed can get 122 km / liter of gasoline. Adeeb deplored the lack of support the students were getting, but as the segment continued he informed the students and their professor — who were calling in to the program — that an unnamed Saudi investor first pledged EGP 1 mn, followed by another announcement that the investor would up that to EGP 1.5 mn. Ghabbour Auto also called in, stating they would pledge assistance to send two teams abroad to take part in an international competition which would put their model on display. The students then acknowledged that Ghabbour has already been providing financial assistance, and footage of the students in their workshop showed a GB Auto banner in the background. Adeeb thanked both the Saudi investor and Ghabbour for their efforts to help Egyptian youth.

Best moment of the night: Adeeb, despairing over the lack of Arab innovation, asked if anyone had ever heard of an Arab-made watch. He grew so quiet that this reviewer could actually hear the crickets outside his window at home. Adeeb continued: “Anyone ever heard of an Arab-made mobile phone?” Again, actual cricket sounds outside this viewer’s home. The sound design, intentional or not, was satisfying.

OUR DUMB MEDIA

CBC and TV host Khairy Ramadan are being praised in the Moroccan press for their broadcast last Friday of a program emphasizing the ties between Egypt and Morocco, highlighting archeological sites and tourism potential in the North African country. Khairy Ramadan’s special last Friday is being perceived in the Moroccan press as a form of belated damage control over comments made by ONTV’s Amany Khayat last July, at which time she stated on her program that the Moroccan economy is built on prostitution. (Read:Morocco: Egypt’s CBC channel fixes what Amany Al Khayat ruined)

SPEED ROUND

The EGX 30 extended its slump to a third day on Thursday, closing down 2.2% at just under 9,197 points on turnover of EGP 769 mn, 13% above the 90-day average. The EGX 30 lost 3.5% for the week.

Regional markets fared broadly worse than the EGX on Thursday. The Tadawul was down a modest 0.2%, while the ADX slid 4.7%, the DFM plunged 7.4%, Qatar lost 4.3% and Muscat was down 4.2%. Kuwait was down a more modest 2.0% for the day, while Saudi Arabia’s Tadawul fared best, closing the day down just 0.2%.

As for global markets? The Irish Times summed-up Friday’s trading best under the headline “All of 18 western European markets and US indices decline as oil prices slip.” Notable: The Dow Jones posted its worst weekly drop since September 2011, while the S&P 500 recorded its worst weekly loss in 2.5 years.

Oil continued its slump on Friday, with Brent and West Texas intermediateboth hitting five-year lows. WTI for 15 January delivery stood at USD 57.81 / bbl, while Brent was at USD 61.85.

The International Energy Agency cut its demand forecast for the fourth time in five months on Friday. Meanwhile, the US Energy Information Administration expects US crude oil production to grow by 700,000 bbl / day to 9.3 million bbl / day in 2015 despite the ongoing price drop.

Is the bottom in sight for oil? Respondents to a WSJ survey seem to think that after it plunged about 44% since mid-year, oil may soon be touching bottom: “The average forecast in the latest survey of economists expects oil to trade at USD 64.73 a barrel at the end of December 2014 (from USD 60.94 on 10 December). Prices will then edge up to USD 69.32 by mid-2015 and USD 72.10 by the end of next year, they say.” (Read)

Who will hurt most from low oil prices? Seems it’s not the Americans,but rather Canadian oil sands producers, followed by the Venezuelans, Russians, Brits and Nigerians, according to Business Insider channeling a Morgan Stanley report that claims it’s the cash cost per barrel of continuing production we should be focusing on, not the break-even points of various projects.

As for those US producers in Saudi’s cross hairs? They have room left to run, says the Wall Street Journal: “Oil prices would need to fall at least another USD 20 a barrel to choke off the U.S. energy boom … though some smaller American producers would face serious problems from a more modest decline.” Bloomberg Businessweek takes it even further, declaring: “The Relentless Production of Shale Oil Is Breaking OPEC’s Neck.”

84 sovereign wealth funds in the world currently control USD 5.9 tn in assets, according to the 2014 Sovereign Wealth Fund Report, released by ESADEgeo, KPMG Spain and ICEX–Invest. “The weight of the world economy is shifting from the advanced economies to the emerging economies. The rise of sovereign wealth funds is one of the main manifestations of the transformation that is currently underway,” said Fernando García Ferrer, Partner Responsible for Markets and Private Equity at KPMG Spain to Institutional Asset Manager (Download the report as a pdf)

MOVES

QNB has named Ali Ahmed Al Kuwari as its new CEO. (Read)

DIPLOMACY

Canadian, British embassies remain closed: Daily News Egypt reports that unspecified “security talks” are ongoing with the Egyptian Interior Ministry, according to a British Embassy press officer. The British Embassy’s official website still indicates that public services are closed indefinitely, while the Canadian Embassy’s telephone lines go unanswered. The report gives credence that the embassies are closed because of a court order on the removal of barricades in the neighborhood. Meanwhile, a police vehicle either exploded or caught fire in front of the British Embassy on Friday, depending on the news outlet reporting the incident. The incident has been consistently described as an accident. (Read)

President El Sisi visited Jordan on Thursday for talks with King Abdullah II in his first official visit to the Hashemite Kingdom, according to a statement released by the Office of the Presidency. The single-day visit witnessed the two leaders agreed “on the necessity of a political solution to the Syrian conflict and the resumption of peace talks between Israelis and Palestinians.” (Read)

THE ERDOGAN NEBULA: While [first name unpronounceable] Erdogan is busy consolidating his power, accelerating the Islamization of the secular Turkish state, and blaming Israel for his failings, his deputy prime minister is taking the foreign policy helm, saying that Turkey is “exerting all efforts to restore relations with countries in the region,” including Egypt. In the absence of any change in attitude, rhetoric or deed, we suspect the pledge holds as much water as the promise made back in July to Palestinian President Mahmoud Abbas to reconcile with Egypt. One should not mistake Deputy Prime Minister Bülent Arınç as a moderate voice of reason; other than co-founding the Justice and Development Party with Erdogan, Arınç is most notable for saying that women should not laugh in public.

Palestinian President Mahmoud Abbas said in an interview on Saturday that he supports Egypt’s recent actions to create a buffer zone in Rafah: “We have supported all the precautionary measures taken by the Egyptian authorities to close the tunnels and stop the trafficking of arms and the passage of people between Gaza and the Sinai.” (Read)

Bahraini Prime Minister Khalifa bin Salman Al-Khalifa met with Egyptian intelligence chief Mohammad Farid Al-Tohami on Thursday in Bahraini capital Manama. The minister subsequently emphasized Bahrain’s support to Egypt in its fight against terrorism. (Read)

Islamist militias attempted to seize an oil producing region in eastern Libya on Saturday in a three-pronged attack, but were repelled by the Libyan army, according to i24 News. Meanwhile, a senior member of Al-Qaeda in the Islamic Maghreb (AQIM) was killed in Libya by troops of General Khalifa Haftar, an Algerian security source told Xinhua on Saturday. Meanwhile, “unnamed” senior U.S. officials were attacking Egypt and the UAE in the press as recently as last week: “U.S. officials said Egypt, the United Arab Emirates and Qatar, all of which are U.S. allies, continue to encourage local factions to fight instead of compromise. ‘What is the objective? What is the plan for success here?’ asked a senior American official who declined to be identified.” (Read in i24, Global Timesand the comments made by unnamed U.S. officials to Reuters)

El-Sisi meets with the president of Equatorial Guinea: President Abdel Fattah El-Sisi met on Wednesday, 10 December with Equatorial Guinea’s president, Obiang Nguema, in Cairo. The two leaders discussed housing and infrastructure projects in Equatorial Guinea, Egypt’s potential seat on the UN Security Council, and Egypt’s dispatch of doctors and medical aid to help Equatorial Guinea contain Ebola. (Read in Arabic)

EGYPT IN THE NEWS

International news headlines on Egypt coming out of the weekend were dominated by the detention, denial of entry and deportation from Egypt of American scholar and former U.S. diplomat Michele Dunne, now an analyst at the Carnegie Endowment for International Peace.

The NYT’s David Kirkpatrick writes: “In a telephone interview on Saturday from the airport in Frankfurt, Germany, Ms. Dunne said that security officials at the Cairo airport had stopped her upon arrival late Friday night and held her for about six hours before putting her on a flight out of the country. When she asked why she had been detained, she said, a security official at the airport told her, ‘No reason, but, Madame, you cannot access Egypt any more.’” (Read in NYT, Ahram Online, Voice of America, Yahoo News via AFP and The Los Angeles Times)

The other lead headline on Egypt was news that 439 have been referred to military trials over the killing of three policemen last year. (Read)

Egypt singer who led 2011 protesters in song finds audience has thinned — Ramy Essam’s U.S. music tour isn’t finding an audience, threatening to throw Essam into the gen. pop. labor pool. (Read)

Egypt’s economy bouncing back after recent upheavals, but IMF urges caution — Nothing new here for anyone acquainted with Egypt. (Read)

The Venice of Egypt — and it’s not about Nasr City after a rainstorm or when a pipe bursts. This is a depressing Reuters Blog piece about how pollution has had a negative effect on the lives of fishermen in what they author sees as a Venice-like (Venice-like in terms of canals, not charm) district of Alexandria, El-Max. (Read)

Haaretz: “Syria has almost eliminated its declared chemical weapons, but Israel and Egypt retain chemical stockpiles, according to an official in the intergovernmental Organization for the Prohibition of Chemical Weapons.” (Read, paywalled)

A long AFP feature makes waves in the UK’s Daily Mail under the headline “Surging child abuse in Egypt overshadowed by strife.”

Telegraph (UK): “Egypt tourists told not to worry as Cairo embassy closed; Travellers heading to Cairo should continue with their plans even though the UK embassy in the city was closed this week.”

Writes the Guardian’s Patrick Kingsley: “No one in Egypt can agree on how many people live in Cairo, let alone the precise ratio of Muslims to Christians. But senior government clerics are quite sure of one thing: there are exactly 866 atheists in Egypt — roughly 0.00001% of the population.” (Read)

WHAT YOU CLICKED ON LAST WEEK

The five most-clicked links in the Enterprise Morning Meeting for the week of 7 November were:

• The Egyptian revolution isn’t dead because it never happened in the first place (Washington Post)
• An Investment Bank Revives Along With Egypt (New York Times)
• Spiderman ‘exhausted’ by Cairo (Ahram Online)
• Egyptian state banks lose talent to private sector over wage cap (Reuters)
• Egypt Has Only Begun to Tackle Subsidy Problem, World Bank Says(Bloomberg)

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Government to build electricity control center for EUR 60 mn
Al Mal | 11 Dec 2014
The Egyptian Electricity Holding Company is planning to build a 66 kVA electricity control center in the Nile delta region as part of the company’s expansion plans to build several centers to control electricity distribution. The project will cost around EUR 60 mn (EGP 570 mn) and will be financed by the French Development agency (Agence Française de Développement – AFD). The project is in the feasibility study phase in cooperation with the French agency, and the study is expected to be completed during 2015. (Read in Arabic)

OIL & GAS

Melrose Resources starts production from Egypt
Texas News | 11 Dec 2014
Melrose Resources began production from its West Dikirnis No.7 well in Egypt. The well is producing 3,000 bbl / day of oil and 4.4 mcf / day of gas. The company said that “The well’s flow rate is currently being restricted to gather well and reservoir performance data prior to potentially increasing the production rate.” (Read)

RASHPETCO intensifying operations to cope with the domestic gas demand
The Cairo Post | 10 Dec 2014
RASHPETCO Managing Director Mohamed El-Masr said that the company is intensifying its operations to cope with the government’s plan to meet local demand for gas. El-Masry noted that RASHPETCO has received USD 38 mn from BG Egypt to develop gas fields in Rashid and conducting 3D seismic surveys. After a scheduled period of maintenance at the Borollos fields, production is expected to return to normal on Tuesday to around 900-910 mcf / day. (Read)

BASIC MATERIALS & COMMODITIES

Confirmed orders from France, Russia ensure Egypt has wheat stocks sufficient to last through first week of April 2015
Ahram Online | 12 Dec 2014
Contracts signed for a combined 180k tons of wheat from Russia and France will ensure Egypt has stocks on hand sufficient to last through the first week of April, Minister of Supply Khaled Hanafi said. The Ahram Online story includes a recap of the smart-card system designed to clamp down on leakage from the subsidy system; the system is now in place in 27 governorates, including Cairo, Alexandria and Giza and notes that “earlier this month the government signed an agreement with Blumberg Grain to replace 93 local wheat [silos] with advanced food security technology and systems at a cost of USD 28 mn.” (Read)

Abu Qir warns gas shortage will reduce production
Al Mal | 11 Dec 2014
Abu Qir Fertilizers warned that its production will be hampered after state-owned GASCO cut
its supplies of gas to one of Abu Qir’s urea-based fertilizers factories. (Read in Arabic)

MANUFACTURING

Manufacturing exports up 0.22% y-o-y
Shorouk | 12 Dec 2014
Trade and Industry Minister Mounir Fakhry Abdelnour said that Egypt’s non-oil manufacturing exports have grown all of 0.22% YTD through November to EGP 142.9 bn.  The largest proportion of the exports went to Arab countries (42.0%) followed by the EU (29.4%) and the US (5.7%). (Read in Arabic)

Steel and iron companies reduce prices
Shorouk | 11 Dec 2014
Steel and iron companies nationwide have decreased prices in this month compared to the previous month, according to Dr. Khaled Hanafi, the Minister of Supply and Internal Trade.  Some companies have decreased prices by EGP 80 / ton, with others slashing by as much as EGP 250 / ton. Coming in with EGP 110 / ton price cuts were Ezz Steel and its sister companies (to EGP 5,110 / ton) Beshay Group (EGP 5,030), and Suez Steel (EGP 4,890). Companies such as Delta Steel have not changed their price and it remains an even EGP 5,000 / ton. On the upper limit of the price cut are Upper Egypt Steel and Maadi Steel, which have both reduced prices by EGP 250 to reach EGP 4,800 / ton. Delta for Industrial and Naval Investments chose to remain close to the median with an EGP 175 decrease to reach EGP 4,625 / ton. (Read in Arabic)

United Foundries signs sale and purchase agreements for c. EGP 260 mn exit of two metallurgy companies
Qalaa Holdings press release | 13 Dec 2014
United Foundries Company SAE, a non-core asset of Qalaa Holdings, announced on Saturday it has inked sale and purchase agreements for 100% of two metallurgy companies for a total deferred consideration of c. EGP 260 mn at the current rate of exchange. Under the terms of the transactions, a group of investors led by Mr. Ahmed Sid Ahmed — one of the original founders and shareholders of the two companies — will acquire 100% of the shares of Alexandria Automotive Casting SAE (AAC) for a deferred consideration of EUR 27 mn and 100% of the shares of Amreya Metal Company SAE (AMC) for deferred consideration of EGP 20 mn. Both companies produce cast parts and components for the local and global automotive assembly industry. The transactions are expected to close in January 2015 and are subject to conditions precedent.

REAL ESTATE

Talks between Orascom Housing Communities and Ministry of Housing reportedly collapse
Shorouk | 13 Dec 2014
Shorouk News reports that talks between the Ministry of Housing and Orascom Housing Communities are believed to have collapsed completely. The Ministry of Housing now appears to have ruled out returning land that was previously allocated to OHC to expand its affordable housing project, Haram City, and have instead allocated the plots to the military’s Dar Misr project. Shorouk reports that the housing ministry has refused to comment on the issue. (Read in Arabic)

Amer Group wins approval to start building resort in Jordan
Aswat Masriya | 11 Dec 2014
Amer Group said on Thursday that it had received approval to start building its USD 990 mn Porto Dead Sea resort in Jordan. The development will include four five-star hotels and three malls, among other amenities. (Read)

AUTOMOTIVE

Custom duties on European cars to drop 10% in 2015
Al Masry Al Youm | 13 Dec 2014
In accordance with bilateral trade agreements between Egypt and the EU, custom duties on European cars are set to decrease by 10% from January 2015. Domestic manufacturers are concerned by what they claim is a lack of preparation on the part of the government to absorb the shock — especially given that custom duties will be removed completely in 2019. However, a retailer tells AMAY that the reduction in duties might not be translated into cheaper retail prices due to pressure on the EGP. (Read in Arabic)

TOURISM

Working group formed to calculate real estate tax for tourism establishments
Egypt Independent, Daily News Egypt | 12 Dec 2014
Following a meeting on Thursday with Finance Minister Hany Qadry Dimian and Tourism Minister Hesham Zaazou, as well as representatives of the tourism industry, the government announced it has formed a working group to set up legal alternatives to identify the rental value of tourist establishments, despite the still nascent recovery in the sector, Egypt Independent reports. The delay in estimating the real estate tax value of so-called “special enterprises” (including hotels, schools and hospitals) will widen the budget deficit, said Tarek Farag, advisor to the Minister of Finance on real estate taxation: “The most prominent problems of Law 196/2008 is valuing and calculating the amount of tax, but we seek to evaluate these enterprises according to level of construction, geographical location and services provided.” (Read in Egypt Independent or read in the Daily News)

Holiday markets show positive signs of activity
Al Shorfa | 11 Dec 2014
Hotel occupancy rates have reached high occupancy rates in most governorates, according to Mahmoud al-Mohammed of the Ministry of Tourism’s Chamber of Tourism Agencies. In Cairo and Giza have witnessed occupancy rates of 65% up until the first week of December, while hotels and tourism villages in coastal tourism areas, occupancy rates have so far reached more than 50%, he said. The majority of current tourist inflows are from Europe, Russia and China, followed by Gulf and Arab countries, al-Mohammed said. (Read)

Egyptian Tourism Minister Tells USTOA Egypt is ready for business
Travel Pulse | 12 Dec 2014
Minister of Tourism Hisham Zaazou attended the U.S. Tour Operators Association Annual Conference and Marketplace in Florida last weekend, where he met with tour operators and the media, and was interviewed in an open forum before the general assembly of delegates. Zaazou said he is working with Egypt Air to ensure there is enough air lift available for tour operators to plan trips to Egypt. He also said the travel advisory system is not causing a large problem, but that it should be reviewed. (Read)

Pyramids are fourth on list of “16 most disappointing travel places of 2014”
Business Insider | 11 Dec 2014
In a recent Reddit thread that listed the “16 most disappointing travel places of 2014,” the Egyptian Pyramids came at number four, due to Pizza Hut being at close proximity to the Giza Plateau, as well the constant badgering and harassments of the workers on the plateau who are either guides or salesmen trying to offer their services or whatever really expensive artifacts they have. Casablanca topped the list, then Malé, the capital of Maldives, and Jamaica in third place. (Read)

TELECOMS

Vodafone lost over half a million subscribers in September
Al Borsa | 11 Dec 2014
Vodafone Egypt was the biggest loser from the most recent drop in mobile subscribers after losing more than 500,000 subscribers in September. Despite the plunge, it still leads the market in Egypt with 39.6 million subscribers. Mobinil and Etisalat lost about 300,000 and 400,000 subscribers, respectively. (Read in Arabic)

BANKING & FINANCE

EBRD, NBE to support women entrepreneurs, energy efficiency in Egypt with USD 50 mn in financing
EBRD Press release | 12 Dec 2014
The EBRD and National Bank of Egypt (NBE) announced they are partnering to provide two credit facilities: a USD 20 mn facility for the Women in Business Programme and a USD 30 mn facility for the Energy Efficiency program. The Women in Business Programme seeks to provide better outreach to women entrepreneurs and beyond offering financing will provide advice, training and networking for its participants. The energy efficiency facility is open to the private sector for investments in energy efficiency and renewable energy projects. To date, the EBRD has committed over EUR 680 mn to finance 20 projects in Egypt. (Read)

Beltone to hike capital
Al-Mal | 11 Dec 2014
The Egyptian Financial Supervisory Authority has approved Beltone Financial’s request to increase its authorized capital to EGP 1 bn and its paid in capital to EGP 125.483 mn. The capital hike will be financed through retained earnings. (Read in Arabic)

Cap on money market funds
As we reported last week, the CBE took action to cap the size of money market funds in an extension of Hisham Ramez’s decision in March 2013 that limited the size of money market funds.

Prior to this latest cap, MMFs were capped at either 50x 2% of the banks’ Tier 1 capital (calculated in accordance with Basel II) or 7.5% of the banks’ EGP deposits, whichever was lower. The latter part is now reduced to just 5% of deposits in EGP. The CBE’s new stipulations also require subscribers to MMFs to be existing clients with whom the bank has completed its “Know Your Client” protocols, and banks were given six months to ensure this step’s completion.

While officials stopped short of offering a rationale, the CBE is exerting more control over how domestic savings are being used — especially given the CBE’s already tight hold over banks and its preference to see more loans being given out to sustain the rebound in economic activity.

A rough calculation estimates that this move will resulting in around EGP 8 bn being pulled out of MMFs. This amount will not cascade at once, but will be withdrawn slowly out of the system as existing contributions are redeemed and fewer new ones are accepted until the funds reach the new regulatory requirement.

OTHER BUSINESS NEWS OF NOTE

AOI to contract Al Dahra to help develop agricultural megaproject
Al Mal News | 11 Dec 2014
According to an official within the Arab Organization for Industrialization (AOI), the organization plans to sign with UAE-based Al Dahra Agricultural Company to help develop the Toshka agricultural mega-project, in a deal worth EGP 170 mn. Phase 1 of the project will see Al Dahra develop an electrical grid to supply 30,000 feddans, while phase 2 will see the importation of water pumping stations. The government has allocated 100,000 feddans for Al dahra to develop, in a bid to resurrect the Mubarak era project, which had largely failed. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

CBE to sell more dollars by adding an extra weekly FX auction as EGP weakens in black market
Bloomberg, Yahoo News | 11 Dec 2014
Starting this week, the Central Bank of Egypt (CBE) will add a fourth weekly USD auction to its three present USD 40 mn auctions each week. The move follows statements by CBE Governor Hisham Ramez declaring his intent to eliminate the parallel market for hard currency. EFG Hermes’ Mohamed Abu Basha is quoted in the press as saying the recent shortage of dollars owes to rising economic activity. (Read here on Bloomberg or here on Reuters)

Central Bank of Egypt orders currency exchange companies to stop converting Arab currencies into US dollars
Al Borsa | 11 Dec 2014
Banks and currency exchange companies said they received orders from the Central Bank of Egypt (CBE) to stop exchanging Arab currencies into US dollars. Instead, banks and exchange companies are now required to convert Arab currencies into Egyptian pounds in accordance with advertised exchange rates. The CBE reportedly gave its orders “verbally”. Sources in the financial community said the new instructions were sudden and immediately resulted in a drop in the US dollar exchange rate by 3 piasters from EGP 7.76 to EGP 7.73 on the black market. CBE governor Hisham Ramez recently told a group of American businessmen that he will bring an end to the currency black market within 6-months, saying Egypt does not have a US dollar liquidity problem. Egypt’s foreign currency reserves dropped by USD 1.027 billion in November, falling to USD 15.882 billion, driven in large part by a USD 2.5 billion repayment to Qatar. (Read in Arabic)

Value-added tax still in drafting, will be subject to public consultations pre-implementation
Al-Borsa | 11 Dec 2015
The much-anticipated value-added tax is still being drafted, a senior Finance Ministry Official said on Thursday, and will be subject to public consultations before its implementation. Salah Youssef, under-secretary at the Ministry of Finance, declined to speculate on when the tax might be implemented, saying the ministry had no interest in seeing the new VAT meet the same fate as the abortive attempt to implement one in 2012. Youssef’s remarks came on the sidelines of a conference in Cairo. (Read in Arabic)

EGP to hit 7.50 vs. USD by end of 2015, EGP 8.00 by end 2016 — HSBC report
Daily News | 13 Dec 2014
A lengthy summary by Daily News of an HSBC research report. The only “new” news is in the headline above. (Read)

Reaction mixed to redistricting legislation
Al Masry Al Youm | 12 Dec 2014
Politicians the political spectrum have mixed reactions to the new law approved by the Cabinet on Wednesday which seeks to redistribute voting districts and change the number of corresponding seats. The primary impetus behind the change, according to some, was the elimination of the seats that were backed by the Muslim Brotherhood. This claim is supported by the separation Ain Shams and Matariya districts, fragmenting a major bloc for Muslim Brotherhood supporters. However, to others it is a ploy by the old regime to regain its power on the back of Mubarak’s acquittal and possible release from prison. (Read in Arabic)

Investment banks preparing to ink NDAs with Lazard
Ahram Online | 11 Dec 2014
With the 13-15 March 2015 Sharm investment summit barely three months away, Egyptian investment banks are now preparing to sign non-disclosure agreements with Lazard, the international firm tapped three weeks ago to market projects for the gathering. (Read)

Minister of Planning: Civil Service Act seeks to fight corruption
Al Borsa and Shorouk | 12 Dec 2014
Minister of Planning and Administrative Reform Ashraf Al-Araby said that the new Civil Service Act seeks to combat management corruption and increase the quality of services, the paper says, citing the minister’s recent interview with Mohamed Ali Kheir on CBC Egypt. Al-Araby added that the only criteria for a public sector job under the new law are experience and competency, adding that the new law will improve social security as well. On Rotana’s Men El Akher program, the minister promised that he will be implementing a three-year plan to rid government bodies of corruption. He also mentioned that Egypt’s ranking on Transparency International list has improved to 94 from 114, which he attributed to the government working day and night to rid itself of that problem. (Read in Arabic in Al Borsa regarding the CBC appearance and in Shorouk — then try to get your driver’s license renewed)

800,000 employees added to the state’s administrative body
Al Mal | 13 December 2014
Dr. Ashraf Al-Araby, Minister of Planning and Administrative Reform, said that since the 25 January 2011 revolution there has been an addition of 800,000 employees to the state’s administrative body. He noted that most of the people working there are 50 years-old and above and that something has to be done to make way for younger employees. (Read in Arabic)

INTERNATIONAL

Oil price drop drives Iraq to request postponing paying Kuwait war reparation
Reuters | 12 Dec 2014
As oil prices continue to tumble and war with Daesh continues to add pressure on Iraq’s economy, Finance Minister, Hoshiyar Zebari, told Reuters that his country is seeking to delay the final instalment of the reparations for the Kuwait war. Iraq used to allocate 5% of its crude exports to the UN Compensation Commission (UNCC) and has managed to pay USD 52.4 bn so far but the country’s economy is set to shrink by 0.5% this year, according to the IMF. The UNCC is yet to decide on the issue. (Read)

Saudi investor to build Africa’s tallest building in Morocco
Yahoo News | 12 Dec 2014
Sheikh Tarek Bin laden-owned Middle East Development LLC is building the tallest skyscraper in Africa in Casablanca, Morocco. The project to build the 114-storey “Al-Noor Tower”, estimated to cost USD 1bn and eventually be renamed after King Mohamed VI, is due for completion in June 2018 and will overtake South Africa’s Carlton Centre as the tallest building in Africa. (Read)

Qatar appoints Ken Costa on Songbird BOD in fight for Canary Wharf
NYT DealBook | 11 Dec 2014
In a disclosure sent to the London Stock Exchange, Qatar Holding Shareholder Group announced it designated Ken Costa as a QH Director of the Company and representative on the board of directors of Songbird. Ken Costa was formerly chairman of Lazard International. (Read)

ON YOUR WAY OUT

The Prosecutor General’s Office has referred 26 men to trial in what we will from now on call the “hammam case” to avoid the use of words that prevent our delivery to your mailboxes.

Investments of up c. EGP 10.1 bn are pouring into Alexandria, the governor said, noting a c. EGP 4.69 bn project to refurbish the sewage system and EGP 2.4 bn for affordable housing. (Read in Arabic)

The Cairo Institute for Human Rights Studies is moving to Tunis, the organization says, explaining in a statement that it “has decided to move its regional and international programs outside Egypt in light of the ongoing threats to human rights organizations and the declaration of war on civil society.” (Read)

A 33-year-old female teacher in Sohag became on Friday the eighth Egyptian to die of H5N1 avian flu this season. (Read)

Eight physicians were ordered on Saturday to stand trial in the case of thewoman who entered labor on the sidewalk outside Kafr Al-Dawar hospital after allegedly being told she could not be admitted as the hospital did not have as specialist available, Aswat Masriya reports. A video of the incident was later posted to YouTube and made national headlines. (Read)

Prosecutors scored a victory when a court agreed Thursday to accept their appeal of a lower court’s acquittal of the physician and father of a young girl who died while undergoing FGM in 2013. (Read)