Sunday, 21 December 2014

Fitch upgrades Egypt • El-Sisi and Obama speak • new US ambassador arrives • Cairo and Doha reconcile • Russia and China compete on nuke power for Egypt • Egypt confident on Russian grain supply • database of scholarships for Arabs launches

WHAT WE’RE TRACKING TODAY

We’re not allowed to make fun of Qatar anymore. President Abdelfattah El-Sisi moved the ball forward on the “reconciliation with Qatar” front this weekend, signaling it’s time to make nice with Doha. (Full story in Spotlight, below)

Tunisians will vote today in the runoff between presidential candidates Beji Caid Essebsi and Moncef Marzouki. Marzouki is a former human rights activist and outgoing interim president; Essebsi accuses Marzouki of being an Islamist pawn in the elections, according to France 24 (Read)

WHAT WE’RE TRACKING THIS WEEK

Meanwhile: President Abdelfattah El-Sisi arrives in Beijing on Tuesday, 23 December for a historic state visit which seeks to elevate Egyptian-Chinese ties to a strategic partnership. Ahead of the visit, Egypt’s National Authority for Remote Sensing and Space Sciences and the Chinese National Space Administration signed a cooperation agreement on Thursday regarding the manufacture of satellites, ground stations, and related infrastructure. (Read)

WE’RE ON VACATION

Enterprise will be off this coming Thursday (25 December) to spend some quiet time with family and catch up on sleep. We’ll be back on Sunday, 28 December.

LAST NIGHT’S TALK SHOWS

News of Fitch’s upgrade of Egypt’s credit rating to B from B- featured prominently on Mohamed Sherdy and Lamees El Hadidy’s respective shows last night. Both hosts made a commendable effort to explain to the public why they should care about this nod of approval from the global rating agency.

“We have been downgraded five times since 2011,” said El Hadidy. “This is a clear acknowledgment of the fact that we are now a much more stability country under President El Sisi and that the government’s bold economic reform measures, such as subsidy removal, are beginning to bear fruit.”

El Hadidy conducted a long phone interview with Minister of Finance Hany Kadri Demian, who was clearly hyped up by the vote of confidence, which he called “a reflection of the government’s clear vision for reform for the next five years.”

El Hadidy also interviewed credit rating expert Dr. Amr Hassanein, who pointed out that according to Fitch, “an IMF loan is now easily achievable. This is an important step in the right direction, but a credit rating of  B is not good enough for a country like Egypt. We have the potential to be so much more.”

El Hadidy’s studio guest last night was oil industry veteran Mohamed Shoeib,now Managing Director for the energy sector at Qalaa Holdings, who put the current plunge in oil prices into context, starting with movements since 1975.

Commenting on the impact of declining prices on Egypt, Shoeib explained, “We are net importers of petroleum, so when the price of oil goes down, the state’s subsidy bill goes down. I expect that lower oil prices will result in a savings of between EGP 30-40 billion by the end of the fiscal year.”

Shoeib also delved into broader economic issues and discussed the advantages of cash subsidies as commodity and energy subsidies are phased out.

“We must create a specialized energy think tank made up of private sector experts as well as government officials to put together a vision for energy through 2030. This vision must be clearly communicated to the public with updates presented to Parliament every quarter,” said Shoeib.

Also making the rounds on all the talk shows last night was the appointment ofGen. Khaled Fawzy as the new Head of Mukhabarat (Egypt’s General Intelligence Service). The surprise announcement was made by Sameh Seif Al Yazal, Head of the Center for Political and Strategic Studies, who must have been really busy last night as he made phone calls to every talk show host to confirm that contrary to the rumors, former intelligence chief Gen. Farid El Tohamyresigned for medical reasons. According to Seif Al Yazal, El Tohamy has been hospitalized for the past two months due to complications from an artificial limb.

Commenting on the announcement that Ahmed Shafiq has been elected to head the Egyptian National Movement Party, Youssef El Houssieny asked the question: “Why doesn’t Shafiq come back to Egypt?”

“This is a great mystery to me as I’m sure it is to many of you. Why doesn’tShafiq return despite multiple announcements of his long awaited homecoming over the past few weeks? He has supposedly been acquitted of all charges and he obviously has political ambitions, so what’s keeping him away?” asked El Houssieny.

SPEED ROUND

The EGX30 closed up 3.4% last Thursday at 8,400 points on turnover of EGP 688.5 mn, 1% below the 90 day average. Regional markets witnessed a major rebound: Tadawul up by 8.9%, the DFM by 13%, ADX 6.7%, the MSM by 3.7% and the KSE by 2.0%. The Qatar Exchange was closed on Thursday.

On a full-week basis, the EGX30 was down 8.75%.

The EGP stood at 7.1401 to the USD at Thursday’s CBE foreign exchange office, but weakened 8 piasters on the parallel market to 7.78 compared with Wednesday.

Presidents El-Sisi and Obama spoke on Thursday. The full readout of the conversation (via the White House) is short and worth a read:

“President Obama spoke with Egyptian President Abdelfattah al-Sisi today to discuss the U.S.-Egyptian bilateral relationship and developments within the region. The President affirmed the United States’ continuing commitment to the strategic partnership with Egypt and emphasized the importance of bilateral cooperation to promote shared interests in counterterrorism and regional security. President Obama expressed his condolences to the Egyptian people for the spate of terrorists attacks they have suffered. The two leaders agreed on the importance of continuing their countries’ close military and intelligence relationships. President Obama also expressed concern about mass trials, the status of NGOs, and the continued imprisonment of journalists and peaceful activists in Egypt, and encouraged President al-Sisi to invest in the political, economic, and social aspirations of the Egyptian people. The two leaders agreed to stay in touch in the weeks and months ahead.”

Ittihadiyya also released a readout on the conversation. The statement from Presidential spokesman Alaa Youssef agreed in full with that provided by the White House, with the only significant additional detail being: “President El Sisi reasserted that Egypt is making efforts to support the Iraqi government andLibya’s legitimate institutions, namely the elected parliament and the Libyan national army.”

New US ambassador takes up duties in Cairo: Robert S. Beecroft, a career foreign service officer who was most recently ambassador to Iraq and had previously served as ambassador to Jordan, has arrived in Cairo. The US embassy has been under the command of chargés d’affaires since Anne Patterson’s departure in August 2013. Beecroft, who practiced law in the San Francisco office of an international firm prior to entering the foreign service, has previously served Damascus and Riyadh in addition to his posts in Baghdad and Amman. (Read in Arabic on Shorkouk or in English on Ahram Online or visit the Ambassador page of the US Embassy’s website.)

As noted above, Fitch upgraded Egypt’s long-term foreign and local currency issuer default ratings to B from B- with a stable outlook. Fitch praised the Egyptian government’s tackling of “some of the serious structural weaknesses” including fuel subsidy and tax reform as well as accelerating debt repayment to international oil companies. Positive shocks internationally from cheaper commodity prices should ease the fiscal burden and faster nominal GDP growth along with fiscal consolidation should put the debt / GDP ratio to a downward trend. Fitch’s rating upgrade emphasized the following drivers:

  • Reserves stabilizing at below three months of current external payments;
  • Improved prospect for the balance of payments;
  • Continued financial support from the GCC;
  • Low net external debt.

Surprise: Kellogg increases its bid for Bisco Misr by 2% over Abraaj’sto EGP 86.36 per share.

Political obstacles facing Israeli gas exports to Egypt, Jordan, and Turkey will be overcome, a US official told Bloomberg. “There are a number of stumbling blocks on the way to a commercial deal, but I also see a lot of interest,” Hochstein said. The piece notes that US-based Noble Energy and its Israeli partners “also signed non-binding letters of intent this year to deliver as much as 6.25 trillion cubic feet to two liquefying plants in Egypt operated by BG International Ltd. and Union Fenosa Gas SA, pending Egyptian government approval.”

On a related note: The main opposition party in Jordan threatened yesterday to take legal action if a gas deal is signed with Israel. The Islamic Action Front is Ikhwan’s political party in Jordan. (Read)

“Indian” anti-Hepatitis-C drug on sale in Cairo is counterfeit, embassy warns: Boxes of allegedly Indian-manufactured Sovaldi now on the Egyptian market are counterfeits being sold by “certain unscrupulous elements,” said a statement from the Indian embassy released Thursday. All seven Indian companies licensed to manufacture Sovaldi by Gilead Sciences are still in the pre-production phase. (Read the embassy’s statement or see how it’s playing in theIndian press)

Ajnad Misr thanks Foggy Bottom for “Blessing”: The US State Department has designated Al-Qaeda affiliate Ajnad Misr (which splintered off Ansar Beit El-Maqdis) as a terrorist group. Ajnad Misr’s reply: A statement on its Twitter account thanking the State Department for the “blessing” of so being designated and, of course, more of the usual rhetoric. (Read Long War’s take on the designation and subsequent Ajnad Misr statement.)

The Swiss National Bank cut interest rates on deposits to -0.25% (yes, that’s a negative sign there) in an attempt to weaken the Franc after a flight to safety from the Euro pushed up the currency’s value. Keep track of the EUR/CHF rate here.

Saudi Oil Minister: It’s just a phase. Speaking with the Saudi Press Agency on Thursday, KSA Oil Minister Ali El-Naimi said OPEC cannot cut production unless other major producers are on board, and none of them are willing to do so at the moment. Still, he said: “I am optimistic about the future. What we are facing now and what the world is facing is a temporary situation and will pass. …The global economy, especially the emerging economies, will return to sustainable growth, and therefore the demand for oil will also grow.” (Read)

Turkey has issued an arrest warrant for Erdogan’s main rival, Fethullah Gülen. Gülen resides in the United States, and as the NYT notes, the two countries share an extradition treaty. Erodgan has indicated he wants Gülen to return to Turkey to stand trial. (Read)

The 2014 Goldman Sachs Crossword Puzzle appeared in a half-dozen media outlets over the weekend, but Business Insider is the only one we’ve found with a halfway legible answer key. The puzzle is from the investment bank’s “Top of Mind” research notes. (Try it out)

SPOTLIGHT: The latest round of Egypt-Qatar talks

Saturday, 20 December 2014: The day the laughter died. President Abdel Fattah El Sisi met with envoys of Qatar and Saudi Arabia yesterday in the latest attempt to salvage Egyptian-Qatari reconciliation. Per a statement issued by the Office of the Presidency: “Egypt looks forward to turning the page on past differences … The Egyptian President expressed his full agreement with the King of Saudi Arabia in his appeal to all intellectuals and journalists to respond positively to this initiative and support it in order to move forward towards enhancing Arab relations in general and Egyptian-Qatari relations in particular.”

The story is already winning significant international attention.

New York Times carries a long take by David Kirkpatrick, going overboard with: “The tensions are raising questions about the ability of the gulf states to muster a coherent response to a storm of crises rocking the region. … ‘The region is verging on collapse,’ said Michael Stephens, a Doha-based researcher for the Royal United Services Institute, a British research organization. ‘The last thing you need is a G.C.C. that is fractured and can’t speak with one voice.’”

WSJ’s Ahmed Al-Omran, filing from Riyadh, plays it straight: “Saudi Arabia said Saturday that Qatar and Egypt have accepted an initiative by its king to mend tense relations between the two nations.”

Editorial note: We here at Enterprise will make every effort to behave despite our deep reservations about Qatar’s ability and willingness to make good on its numerous promises. In the meantime, we will simply provide examples of Qatar’s handling of Egypt in its media without comment.

In a report last week by Saudi news outlet Al Arabiya titled ‘The Doha summit: Testimony that the GCC has not fragmented,’ the author Raghida Dergham has an extended passage on Egypt’s role:

“According to sources, Saudi King Abdullah bin Abdulaziz sent the chief of his royal court Khalid al-Tuwaijri to meet with Egyptian President Abdel Fattah al-Sisi recently, to push him toward three main things: Convince the Egyptian media to end the campaign of ridicule and incitement against Qatar and its leadership; release Al-Jazeera journalists detained in Egypt; and taking Egyptian-Qatari reconciliation in the direction of coordination in Libya to avoid further deterioration there. According to the same sources, a large commercial delegation travelled from Qatar to Egypt last month to pave the way for reconciliation between the two sides.” (Read)

Again, as it’s always been, the impetus remains with Qatar to meet its negotiated obligations. Roberto Iannuzzi points out that until now: “Qatari media have continued to support the Egyptian Brotherhood and define al-Sisi as ‘the leader of a coup.’ At Qatar’s request, Cairo has also returned to Doha up to USD 6 billion that is almost the entire amount deposited by Qatar with the Egyptian Central Bank to prop up its hard currency reserves prior to Morsi’s overthrow.” (Read)

Time will be the judge of Qatar’s intentions toward Egypt and its role in regional stability and security. Until then, there’s always an unhinged lunatic running around in a 1,000-room palace in Ankara to keep the schadenfreude alive.

EGYPT IN THE NEWS

Weekend headlines on Egypt in English-speaking countries were dominated by an AP story by Maggie Michael on the recent arrests of men who prefer relationships with other men. The kicker: “Activists say that by cracking down … the government of President Abdel-Fattah el-Sisi aims to boost its credentials as a protector of morals and religious values in a competition with its rival, the Muslim Brotherhood and other Islamists.” (Read)

(Editor’s Note: For new readers, we’re purposefully not using any of the simple single-word adjectives that would work above because whenever we do, we’re banned from a significant portion of our readers’ inboxes due to filtering by computer algorithm.)

Rhonda Roland Shearer with contributions by Lindsey Walker at media watchdogiMediaEthics have published an exhaustive investigation of the reporting practices of the New York Times with regard to Egypt in general and with regard to the reporting of David Kirkpatrick in particular. The investigation covers the period of coverage from 26 October 2014 up to 2 December 2014 — which may seem like a short period at first glance but considering the New York Times’ insatiable Egypt obsession equals 12 articles. A breakdown displayed in an infographic shows that 5 of 12 articles offer no named sources, with 25% of those articles needing corrections, many only after the repeated insistence of those erroneously quoted in the articles, or who were never contacted in the first place. (Read: NY Times Never Called Me! Anonymous Sources, Fact Check Failures Rule in Egypt, Analysis reveals)

The New York Times has a five-piece Room for Debate series on “How cheaper oil is shaping the world.” HA Hellyer (Brookings / RUSI) contributes “If Subsidies Fall with Oil Revenues, Arab Unrest May Rise,” while Glada Lahn of Chatham House has “Saudi Arabia Has its Reason for an Oil Price Drop, Others Need a Plan.” Don’t expect much economic rigor here.

Georges Fahmi, of Carnegie’s Middle East Center warns that the Coptic Church’s attempt to revive its role as a unifying political voice for Copts in Egypt is risky and likely to backfire. He believes the Church should withdraw, focusing more on community work, and allow Copts to defend their own interests. (Read)

The Egyptian Interior Ministry has denied claims that more than “600 children are being held in a squalid, freezing underground prison attached to a police camp near Cairo,” (Read in the UK’s Times, paywalled)

The International Crisis Group blames Egypt for the Islamist rebel attack of the oil terminals at Ras Lanuf and Sidra, as the their Libyan analyst says that the Islamists believed the internationally-recognized government was being aided by Egypt. (Read)

In incredibly depressing news, Egypt’s antiquities ministry denied a BYU team’s ‘million-mummy’ find, saying only a few thousand bodies could be said to be at the burial site, and of them, only one actual mummy has been recovered. The ministry also expressed its displeasure at the team’s break with protocol than any such discoveries be made jointly by researchers and the ministry. (Read) The original story, however, continues to attract media attention, with NPR running a short piece on it here.

POLICY WONKS

USD 35 bn: That’s what a new World Bank working paper says the rise ofDaesh and war in Syria have together cost Turkey, Syria, Lebanon, Jordan, Iraq, and Egypt in lost economic output. Read the blog post or, if you’re fluent in econ-speak this early in the morning, download the working paper in pdf.

The Middle East Institute had two pieces on Egypt out this weekend: “Egypt and Israel: Sinai Heat Thaws the Cold Peace“ by Zack Gold (a visiting scholar at Israel’s Institute for National Security Studies) offers a quick overview of improving security cooperation, but concludes with the note that improving relations will remain behind the scenes despite mutual interests in an emerging Eastern Mediterranean energy market. While we largely agree with the article’s conclusions, the piece suffers from a lack of firsthand research.

The more valuable of the two pieces is freelance writer Maria Golia’s “The New Suez Canal Project and Egypt’s Economic Future.” After taking a look at the “crowdfunding’ for the New Suez Canal and doubts over whether the megaproject will (a) be completed on time or (b) meet its future revenue targets, she notes that the Canal could eventually play a role in the de-centralization of the Egyptian state: “…the project’s greater value lies in its 20-year goal of developing the Canal Zone cities of Ismailia, Port Said, Ain al-Sokhna, al-Arish, and Suez itself. Marginalized by Cairo, these urban centers have attracted little investment despite their potential for absorbing population growth and contributing to the economy.”

Colleen Costello, the advocacy director at the Tahrir Institute for Middle East Policy (or “TIMEP” as it brands itself) has penned the epic / exhaustive “Everything You Need to Know about 2015 U.S. Aid to Egypt,” which for those who need it is the most detailed look we’ve seen at FY15 aid, how it compares to FY14, and its conditionality. (Among TIMEP’s board of advisors: Francis Fukuyama, Sultan El-Qassemi, Nagla Rizk and Alex Shalaby.)

WHAT YOU CLICKED ON LAST WEEK

The five most-clicked links in the Enterprise Morning Meeting for the week of 14 December were:

1) Levelized cost of electricity (LCOE) of different generating technologies (IntersectInSight)

2) Everyone, whether they realize it or not, knows Marwa from AUC (YouTube)

3) Egypt steps up dollar sales as pound weakens in black market (suggests EGP 8.75 : USD 1 by December 2015) (Bloomberg)

4) Egypt’s latest outrage (New York Times) (tie)

4) How Crude Oil’s Global Collapse Unfolded (Wall Street Journal) (tie)

5) Five Useful Things America’s New Ambassador to Egypt Can Do (Huffington Post) (tie)

5) Drunk History volume five, with Will Ferrell, Don Cheadle and Zooey Deschanel (YouTube) (tie)

DIPLOMACY

Egypt has finally received a shipment of 10 Apache helicopters from the United States on Saturday despite previous claims by U.S. State Department spokespeople that the helicopters had been delivered. (Read)

President Abdel Fattah El Sisi met with a large public diplomacy delegation from Ethiopia on Thursday, in a meeting that included representatives from the Muslim and Christian faiths of both countries, according to a statement from the Office of the Presidency: “Also in attendance were the Minister of Foreign Affairs Sameh Shoukry, Egypt’s Ambassador to Ethiopia Mohamed Idris, Ethiopia’s Ambassador to Egypt as well as representatives from Al-Azhar Islamic Research Academy and the Coptic Orthodox Church … During the meeting a number of members of the public diplomacy delegation expressed their delight to be in Egypt, which they consider as a holy land, and stressed the solid amicable and historic relations between the two countries … They commended the positive approach President El Sisi is adopting with Ethiopia.”

Note: The Church’s ties to its brethren in Ethiopia had not been leveraged before the current administration, marking a sea change in the sophistication of the country’s foreign policy, especially in comparison to the government of what’s-his-face.

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Sisi administration deciding between Russia’s Rosatom and China’s CNC Group to build the first nuclear power plant
Al Borsa | 18 Dec 2014
The Sisi administration is evaluating offers from Russia’s Rosatom and China’s CNC Group to build the first nuclear power plant in Egypt, Al-Borsa says. Offers from both companies feature several benefits such as providing enriched nuclear fuel. Electricity Minister Mohamed Shaker met with representatives of the CNC Group last week during a visit to China. Recently, the armed forces recently completed its rehabilitation of the proposed Dabaa site. Meanwhile, an official with Egypt’s electricity ministry urged President Abdel Fattah El-Sisi to order a start to the project either by issuing a global tender, or even through direct order. Six companies have expressed interest in the project, including Westinghouse, France’s Areva, Mitsubishi and Korea’s KEPCO, in addition to Rosatom and CNC. (Read in Arabic)

Negotiations to provide gas via Gazprom resume, Russia awaits invitation to collaborate on nuclear power plant
Daily News Egypt | 17 Dec 2014
Russia’s Deputy PM said Egypt’s negotiations with Gazrprom to import gas will resume in early 2015. The Deputy PM also expressed Russia’s eagerness to help with Egypt’s effort to build a nuclear power plant and noted that Moscow awaits Cairo’s invitation to join the project. According to Minister of Investment Ashraf Salman, Russian companies are also interested in investing in Egypt’s petrochemicals sector. (Read)

Custom duties on renewable energy technologies to be slashed?
Al Masry Al Youm | 17 Dec 2014
The Ministry of Finance is mulling reducing custom duties on renewable energy technologies to 2% from the current 20% . The Ministry of Finance is also in talks with banks in Egypt to finance energy projects domestically and increase loan tenors to seven years including a six-month grace period.  (Read in Arabic)

“Solar power investments of USD 6 bn await government approval”
Al Borsa (print edition only) | 18 Dec 2014
First Gas Company will start work on a solar power plant in the New Valley Governorate but is waiting on approval from Egypt’s electricity ministry first, according to the company’s president, Dr. Muharam Hilal. Hilal explained that a feasibility study was submitted to the electricity ministry, but no response has yet been received. He also said First Gas is cooperating with investors from Saudi Arabia and Korea to pump USD 6 bn in the project, adding that he is waiting for the allocation of a large plot of land as well as licenses and other regulatory requirements. The project needs to be built on a 2,000 feddan area, said Muharam. Meanwhile, an official with Egypt’s electricity ministry previously told Al Borsa that 175 offers for renewable energy projects are currently being reviewed by the ministry. [Editor’s note: The USD 6 bn figure attached to the project is surprising, to say the least; we carry the story simply to note the extent of interest in the sector.]

OIL & GAS

MIDOR to receive expansion plan assessment in January, seeks EGP 720 mn in financing
Al Shorouk | 20 Dec 2014
MIDOR expects to receive the results UOP LLC’s assessment regarding an expansion strategy in the first half of January 2015. MIDOR is mulling a USD 1.2 bn expansion and expects to rely on banks for 60% of the project’s cost. The project should begin production in 4Q17 and will increase production capacity by 70%. (Read in Arabic)

Natural gas shortage expected to persist in 2015
Al Shorouk | 18 Dec 2014
The domestic shortage of natural gas is expected to worsen progressively through FY2017-18, according to Al Shorouk. Even though the Ministry of Petroleum is now ready to import natural gas, domestic consumption in 2015 is expected to be 5.97 bcf / day, implying a daily shortage of around 400 mcf as domestic production is expected to cover 5.03 bcf / day with LNG imports providing 500 mcf / day. (Read in Arabic)

Agreements with BP and RWE amended, changes submitted to Cabinet
Al Borsa | 18 Dec 2014
The Oil Ministry has sent a memo to Cabinet outlining changes to E&P agreements with BP and RWE. The changes encompass the North Alexandria and West Mediterranean Deepwater concessions. Because of their proximity, the amendments treat both agreements as a single production project. The new terms include postponing the production start date from 2H14 to 2H17, connecting 880 MMcf daily to facilities owned by the Borollos and Rashid companies, and increasing the General Petroleum Authority’s share of production from 39% to 50% of newly discovered reserves. The changes also include a penalty of USD 1.625 bn if foreign partners decide to delay production. The original agreement was signed in 2003 and stipulated a start date of 2007. However, the agreement was amended in 2010 at the request of BP, which also set prices between USD 3-4.1 / MMbtu and USD 140 / barrel of condensate. (Read in Arabic)

Petrosilah increases investments in Egypt to USD 104 mn
Al Shorouk | 19 Dec 2014
Petrosilah, a joint venture between EGPC and Merlon International, will invest USD 104 mn in Egypt in 2015, says Al Shorouk. The company is planning to increase its crude production to 8,500 bbl / day from 7,400 bbl / day with them aim of possibly reaching 10,000 bbl / day. Petrosilah is still owed USD 65 mn from EGPC. (Read in Arabic)

Government approves EGPC and EGAS agreements
Amwal Al Ghad | 18 Dec 2014
The Cabinet approved a number of presidential resolutions including new petroleum agreements in addition to amending existing ones. EGPC had ten new projects approved, whereas EGAS had six. The minimum investment cost for these agreements will be nearly USD 900 mn and will include drilling a minimum of 75 exploratory and development wells. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

Egypt confident contracts will be honored despite Russian curbs on grain exports to ease domestic inflation following ruble’s plunge
Reuters, Ahram Online | 17 Dec 2014
Russia is taking steps to reduce grain exports to ease inflationary pressure at home as it tackles a financial crisis triggered by the drop in the ruble’s value. Russia’s phytosanitary service was only allowing exports to Egypt, Turkey, India and Armenia. Egypt’s GASC stated that it will keep Russian wheat in its tenders and expressed no doubt about Russia’s ability to honor its existing wheat export contracts. (Read in Reuters and Ahram Online)

Egypt purchases 300,000 tons of wheat
Amwal Al Ghad | 20 Dec 2014
The General Authority for Supply Commodities (GASC) purchased 300,000 tons of French and Russian wheat on behalf of the Ministry of Supply. The full tender will be used in the production of the subsidized baladi bread. GASC VP Mamdouh Abdel Fattah said the purchase splits as 240,000 tons of French wheat and 60,000 tons from Russia at an average price of USD 273.94 per ton to be shipped 21-31 January 2015. (Read in Arabic)

Egypt should reclaim its local and international positions in the cotton industry
Al Masry Al Youm | 20 Dec 2015
Chambers of commerce are pressing the government to come up with a plan to resuscitate the country’s cotton industry. Ahmed Ayad, chairman of the General Committee of Cotton Companies and Traders, said that starting next season (end of February / beginning of March), the Ministry of Agriculture, with support from the Ministry of Trade and Industry, will be working from a plan to restore Egypt’s cotton industry both domestically and internationally. Ayad mentioned that Egypt currently grows only two types of cotton versus 14 varieties in the past, adding that Egypt once produced 15 mn quintals, while now it only produces 3 mn; Upper Egypt’s production alone was 7 mn quintals. The Ministry of Agriculture should soon announce the plan, according to Ayad. (Read in Arabic)

MANUFACTURING

Ministry of Industry to protect car battery manufacturers against influx of “subsidized” imports
Shorouk News | 18 December 2014
The domestic car battery manufacturing industry will be protected by a series of measures against a sudden influx of “subsidized” imported batteries, according to the Minister of Industry and Trade Mounir Fakhry Abdel Nour. The ministry issued an announcement stating that under Article (57) of the Regulation of Law No. 161/1998, a subsidy is considered illegal if it adversely affects the domestic industry that produces the identical domestic product. This comes as representatives of the domestic car battery manufacturing industry, such as Chloride Egypt, have issued a complaint of unfair trade practices concerning this product. As such the Anti-Dumping, Subsidy and Safeguard Department in the Ministry of Foreign Trade and Industry will conduct an investigation. (Read Article in Arabic) (Read Ministry of Industry and Trade Guidelines for Illicit Subsidies)

REAL ESTATE

New partnership between Amer Group and Al-Othaim Group; Amer in talks to build trade and logistics hub
Youm7 and Al Mal | 18-20 Dec 2014
Amer Group Chairman Mansour Amer announced a partnership with Al-Othaim Group’s Saffori Land for Entertainment, as reported by Youm7. The partnership will focus on children’s entertainment and will see new facilities open at Amer Group projects including Porto Cairo. Amer Group is also in talks with the Ministry of Supply regarding partnering to create a domestic trade and logistics hub, according to Al Mal. The partnership could also extend to the construction of supermarket chains. (Read about the partnership between Amer and Al-Othaim in Arabic in Youm7 and Read in Arabic about the proposed trade and logistics hub in Al Mal)

TOURISM

Travco Group acquires shares in Polish tour operator
Zawya | 18 Dec 2014
Travco announced the acquisition of 30% of Poland-based tour operator Alfastar, a mid-sized operator focusing mainly on the Egyptian market, following the announcement last Monday regarding their LOI. This stake could increase over time, according to Travco, which said the acquisition is a “a stepping-stone for expanding [Travco’s] business in the Eastern European source market, thereby enhancing tourism arrivals from Poland to Egypt.” (Read)

BANKING & FINANCE

Arab Investment Bank Acquires a 5% stake in Ayady
Amwal Al Ghad | 18 Dec 2014
The Arab Investment Bank will contribute 5% of the paid-in capital of Ayady Company for Employment and Investment, according to Hany Seif El-Nasr, the Head of the Bank. The Egyptian government launched Ayady as a key supporter to small and medium-sized projects in Egypt. It is set to create 500,000 job opportunities for Egyptian youth across the country in the next three years. Ayady’s paid-in capital is expected to amount to between EGP 1 bn and EGP 2 bn and the company’s authorized capital will be EGP 10 bn. (Read more)

EGYPT POLITICS + ECONOMICS

Ahmed Shafiq elected head of new political party
Aswat Masriya | 20 Dec 2014
As noted in our talk show summary above, former Prime Minister and presidential candidate Ahmed Shafiq won uncontested elections on Saturday to lead the Egyptian National Movement Party, despite his continued absence from Egypt. He did not state his intended date of return in his statement on Saturday to his political party. (Read)

Political engagement in the developing world: highlights on Egypt in summary
Pew Research Center | 18 Dec 2014
In a recent poll conducted between March and June 2014, Pew carried out 37,620 face-to-face interviews in 33 developing countries. Egypt ranked the second-highest country in terms of political participation, with 63% of respondents reporting high participation, second only to Bangladesh. Egyptians ranked the highest of nationalities surveyed as having participated in a protest at some point, with some 47% responding in the affirmative. While the survey did not specifically mention Tamarod, the release notes that 50% of Egyptians report having signed a political petition, again the highest of all nationalities surveyed. Egypt also takes first place for the percentage of those who have been members of political organizations, for participation in strikes, and for calling in to radio or talk shows. (Read)

Egypt elections body issues conditions for foreign observers
Ahram Online | 18 Dec 2014
Higher Commission for Elections has issued the conditions for NGOs interested in monitoring the upcoming parliamentary elections. The requirements include that “the NGOs must have a reputation of neutrality and balance, a specialization in elections monitoring, a commitment to supporting democracy and human rights and observation experience.” (Read)

Saudi Arabia is the biggest importer of Egyptian products
Al Masry Al Youm | 20 Dec 2014
According to a report from the Saudi Arabian embassy in Egypt, KSA was the biggest importer of Egyptian goods in 11M14 at a value of EGP 13.39 bn, a 4.9% increase over FY13. At the top of the list of exports are engineering and electrical products valued at EGP 3.5 bn, construction materials at EGP 2.431 bn, food products at EGP 2.168 bn, agricultural crops at EGP 1.516 bn, and handcrafted goods at EGP 1.316 bn, chemicals and fertilizers at EGP 993.4 mn, furniture at EGP 824.16 mn, medical products at EGP 443.36 mn, furnishings at EGP 168.94 mn, textiles at EGP 266.46 mn, and finally miscellaneous goods at EGP 20.4 mn. The strengthening of ties between both countries is the reason behind the trade boost, which puts KSA as the number one foreign investor in Egypt, with 3,302 Saudi Arabian companies operating in Egypt with a combined capital of USD 32.893 billion. (Read in Arabic)

REGIONAL

Saudi Arabia’s plans to increase government spending diminishes likelihood of cutting oil production
Bloomberg | 18 Dec 2014
Saudi Arabia’s budget for next year includes wide-scale investments which, according to Bloomberg, makes cutting oil production unlikely. An economist at Arabia Monitor notes that the planned USD 500 bn in projects shows how “Saudi Arabia is backing up OPEC policy with action to strengthen the home front against the adverse impact of falling oil prices.” (Read)

Drake and Scull will consider share buyback
Arabian Business | 18 Dec 2014
Dubai’s Drake and Scull will decide on a possible buyback of up to 10% of the company’s shares when the board of directors meets on Monday 22 December. The potential move comes after shares of the company lost 42% since the end of October following the plunge in oil prices. (Read)

ON YOUR WAY OUT

Intentional damage to (or obstruction of) critical infrastructureincluding water, gas and oil distribution networks is now punishable by life in prison, according to a new amendment to the criminal code. (Read in Arabic)

41 Islamists were convicted and a further 60 found not guilty of rioting last August in Assiyut. (Read)

The CBE increased the value of its direct credit facilities to the EGPC by EGP 8 mn to EGP 463 mn in FY 2013/14. (Read in Arabic)

Daesh-allied militants claimed responsibility for last year’s assassination of Tunisian secular politicians Chokri Belaid and Mohamed Brahemi. (Read in Arabic)

Egypt will temporarily open the Rafah border-crossing for two daysstarting today. The crossing will be open in both directions. (Read)

Unidentified gunmen shot and killed a police officer last Thursday in Beheira as he was leaving the home of a friend. (Read)

Cash-filled “Feteer meshaltet”: Security personnel at Borg El Arab airport thwarted attempts to smuggle a combined EGP 1.5 mn in cash. The first passenger attempted to smuggle EGP 800,000 in “feteer meshaltet” on the way to Dubai, while the other passenger tried to smuggle EGP 700,000 secreted away in clothing. (Read in Arabic)

Forbes lists the world’s best countries for business, no MENA country makes the cut. You can check out the Denmark-topped list here.

If you’re an Arab student or the parent of one, check out Al-Fanar Media’s growing Database of Scholarships for Arab Students. Al-Fanar is the non-profit publisher of an independent bilingual blog about higher education in the Arab world. It’s a must-read for anyone with an interest in academe. (The database is here and the blog’s homepage is here)

CORRECTIONS

In Thursday’s Enterprise (2014.12.18), the FX Watch should have read: “The rate in the unofficial market remained unchanged from Tuesday’s 7.70. Also in Thursday’s issue, under the summary titled Oil at USD 60 could save Egypt USD 7.1 bn — Pharos, the figure for the 2013 oil import bill should have been expressed in USD rather than EGP. H/T to our readers for spotting these and bringing them to our attention. Questions, comments and corrections are always very welcome at editorial@enterprise.press.

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