Monday, 5 January 2015

El-Sisi arrives in Kuwait • King Abdullah in hospital with pneumonia • Egyptian Spider-Man ‘detained’ (briefly) so cop could shoot a selfie

WHAT WE’RE TRACKING TODAY

President Abdel Fattah El Sisi begins his official state visit to Kuwait today, Ittihadiyya confirmed overnight; El-Sisi is expected to meet with the emir and crown prince as well as leading Kuwaiti business leaders to build support for the Sharm El-Sheikh economic conference in March. Separately, Al-Masry Al-Youm reported yesterday that a delegation of Egyptian investors is visiting Kuwait in February for meetings ahead of the March gathering. (Read in Arabic)

Ittihadiyya also confirmed yesterday that the president will be in Addis Ababa on 29 January for the 24th African Union Summit. Look for bilateral talks on the Grand Ethiopian Dam to make his agenda while there (Read in Arabic)

Greece and the euro are the new oil: The international financial press have moved beyond low oil prices and look set to make Greece (and the prospect of a “Grexit” from the euro) alongside the ECB’s consideration of quantitative easing the new business story du jour.

WHAT WE’RE TRACKING TOMORROW

Markit / HSBC PMI reports for Egypt, the UAE and Saudi Arabia will be released early morning tomorrow

LAST NIGHT’S TALK SHOWS

Lamees El Hadeedy early on in her program received a call from fellow CBC talk show host Khairy Ramadan, who was calling in from Kuwait, where he is part of the Egyptian media delegation which has gone ahead of President El Sisi’s visit.

Amr Adeeb, as he had asked two nights ago, noted the denial of Amal Clooney’s claim that she had been warned she faced arrest if she ever tried visiting Egypt. He hoped the Interior Ministry’s statement would be appearing in English and in The Guardian. Switching gears, Adeeb’s co-host for the night, Khaled Abu Bakr, praised the warm reception that the Egyptian press delegation received in Kuwait, and noted that Egyptians won’t forget “who stood with us and who stood against us.” He said that Egyptians across the nation are sincerely praying for the health of King Abdullah of Saudi Arabia.

Back to Lamees, who hosted Dr. Mohamed El-Sobky of the New and Renewable Energy Authority (NREA). Sobky said that he expected 1,000 MW solar projects to go online in the third and fourth quarters of 2015. Lamees asked a broad range of questions regarding Egypt’s energy policy, ranging from asking Sobky to explain how the feed-in tariff works, to whether or not it was time for nuclear energy. His response to the latter: “It’s time for all kinds of energy.” Lamees wrapped up the evening shortly thereafter and noted that she would be speaking to the Minister of Electricity Dr. Mohamed Shaker on tomorrow’s episode.

Back to Adeeb: He said that there are two dramas unfolding: First is that 6 April and the Ikhwan have announced their intentions to protest on 25 January, and the second drama being that some Salafis are upset with the Ikhwan for allying themselves with a nominally secular group such as 6 April. Adeeb and Abu Bakr then moved on to note that EGP 500 mn has been announced to be allocated from the Tahya Masr Fund to provide housing for Duweiqa residents, who are the perennial victims of rockslides and overall dilapidated living conditions. While noting this, video played of Prime Minister Ibrahim Mehleb making a field visit to the inauguration of a separate housing project.

Ibrahim Eissa once again railed against individuals who serve in advisory positions to the Sheikh of the Azhar who have Ikhwani and / or Islamist leanings, bringing up archival footage of these scholars in question making questionable statements during Morsi’s year in power.

Eissa once again brought the topic up in light of a call made by President Abdelfattah El-Sisi over the weekend during an Azhar conference where the President once again reiterated his desire to see a re-assessment of religious jurisprudence and ideology, which he felt contributes to terrorism and a negative image regarding Islam. Eissa asked how it was possible to see such a “religious revolution” if the institution entrusted to carry out reforms is stacked with Islamists and Ikhwan-sympathizers.

SPEED ROUND

Jordan suspends talks on USD 15 bn Israeli gas import deal with Noble Energy, says it will sign an agreement with BG Group to import gas from Gaza by 2017. “We were informed that there are differences between Israel and Noble Energy and we cannot proceed with talks until we know which side will develop the gas field in Israel,” Bloomberg quotes Jamal Qammouh, head of Jordan’s Lower House energy committee, as saying. (Read)

King Abdullah is being treated in hospital in Riyadh for pneumonia, according to a medical update published yesterday. (Read) Most of the stories appearing speculating on succession of the Saudi crown reference the work of Simon Henderson of The Washington Institute, who has written a brief about the issue recently, but whose work on the same topic back in 2009 is much more complete and thorough (Read)

Are we in for a cabinet shuffle? A headline in Al-Masry Al-Youm suggests President Abdelfattah El-Sisi finalized a (presumably limited) shuffle before his departure for Kuwait, but offers no additional detail at all. We had expected no such move in the run-up to the Sharm conference, with any change in the nation’s top management more likely to come after the Parliamentary elections also scheduled for March.

The Cabinet Information and Decision Support Centre’s business confidence index grew by 8.5%. (Read in Arabic)

Egyptian prosecutors have frozen the assets of Islamist preacher Yusuf Qaradawi and 112 other Islamists, according to a judicial source speaking to Asharq Al Awsat (Read in English)

Biggest risk from Greece turmoil: Spread of political contagion? Germany has signaled in the last 24 hours that (a) it’snot sure the Eurozone needs Greece but (b) it’s pretty sure Greece isn’t going anywhere even as German Chancellor Angela Merkelcomes under fire for saying she would let the Greeks drop the Euro should a far-left government come to power in snap elections. But the biggest worry of all, concludes an interesting piece in the New York Times’ Upshot blog, is the threat that the political exhaustion with austerity that could bring a left-wing government to power in Athens may well spread elsewhere in the EU.

It may not be a surprise, then, that as the greenback hits an 11-year high against key rivals, the Euro is now at its lowest level since March 2006, the WSJ reports. Weighing on the currency: Greece, obviously, and signals the European Central Bank may begin a program of quantitative easing to curb deflation risk.

No Arab among 15 newly appointed Catholic cardinals. Reformist Pope Francis appointed 15 new serving cardinals yesterday, but none were from the Arab world, confounding speculation over the weekend that the list would include an Arab to send a message regarding tolerance and religious minorities in the region.

The incomparable Niall Ferguson (professor of history at Harvard and managing partner of his own advisory firm) has one of the more inventive 2015 forecasts we’ve seen: “The ‘Divergent’ World of 2015: Veronica Roth’s novel offers a useful way of viewing global politics and economics.” Don’t let the headline put you off. In a world of lumpers and splitters, Ferguson is an unrivaled lumper who comes up with an interesting framework for 2015. Third-to-last paragraph summarizes his investment outlook, but the whole pieces is worth a read.

Egyptian Spider-Man arrested, but only so that the police officer could feel free to pose for selfies with him away from the prying eyes of his superior officer: “I have been tirelessly searching for you, my nephews are crazy about you.” (Read)

WORTH READING

The Wall Street Journal editorial staff got together to discuss The Year Ahead, with one prediction in particular poised to potentially seriously affect Egypt and the region:

“Gigot: … And certainly one of the big questions this year will be whether President Obama cuts a nuclear deal with Iran. Dan?

Henninger: Certainly he will, Paul. It’s in his head, therefore, he’ll do it. As he said, this is the right thing—

“Gigot: He will?

“Henninger: Oh, yeah. He did Iraq, did Afghanistan, waved his hand towards Cuba. He’ll do Iran. It will be a bad deal. The Iranians are not negotiating in good faith. They will cheat. More seriously, this will tremendously destabilize the Middle East because Saudi Arabia, Turkey and Egypt will all then think they have to approach the nuclear threshold. It will turn the Middle East into a nuclear powder keg …

“Gigot: But the president is also counting on a new arrangement, a détente, if you will, with Iran to be able to counter ISIS. And I think he’ll try to sell this deal as partly an anti-Islamic-State deal.

“Henninger: Yes, but that will further destabilize the area because the Saudis completely distrust the Iranians. They think they are their archenemies. So how he’s going to assemble a coalition on the side of the Iranians is almost impossible to conceive.” (Read the entire transcript)

Maged Atiya weighs in on his blog salamamoussa regarding the recent banning of Exodus: Gods and Kings in the context of the relationship between the west and Egypt’s history. Banning Exodus: The Skulls of Flinders Petrie (Read)

Given that Egypt announced a new strategy to fight corruption — as well as the recent spate of corruption indices making various claims on Egypt’s level of corruption relative to other countries — the World Bank last month published a blog post titled Egypt: Too Many Regulations Breed Corruption, which notes that effectively combatting corruption, especially in the civil service, will require a commitment to enforcement that is not currently in place. “Data (collected in 2012) indicated that nothing happened to civil servants caught accepting a bribe for a license in 19 per cent of such cases; in another 41 per cent, investigations would be opened but not concluded.” (Read)

Oilprice has their Five geopolitical predictions for 2015:

  • Falling oil prices expose a weakened OPEC
  • Russia slides into recession
  • US, Middle East states divided over response to IS
  • NATO alliances are tested, threatening Eurozone recovery
  • Promise of emerging market reform begs investor confidence (Read)

Bloomberg Businessweek provides a short wrap-up of dissenting economists critiquing French economist Thomas Piketty’sCapital in the Twenty-First Century, “which argued that capitalism accentuates inequality … The first scheduled presenter, David Weil of Brown University, is the gentlest: ‘The definition of capital that Piketty uses in his book — the market value of tradable assets — is both problematic as a measure of the quantity of physical capital in the economy and incomplete as a measure of wealth.’ ” (Read)

#longread recommends: The Technium, A Conversation with Kevin Kelly by Edge last year. Kelly was a founder of Wired magazine in 1993 and served as its Executive Editor until 1999. This sprawling interview puts forth some of Kelly’s basic premises of his view on technology: technology is a force of nature that we will have to accept and adapt to rather than attempt to control and that new technologies often simply create almost as many new problems as they were meant to solve. (Read)

WORTH WATCHING

Richard Pryor was the first black president. (Watch)

DIPLOMACY

The Ministry of Foreign Affairs working hard to free 20 Egyptians kidnapped in Libya, according to Amb. Badr Abdelaty, spokesman for the Ministry of Foreign Affairs. He said the ministry is working with its counterpart in Libya to seek the recovery of the hostages. Libyan tribal leaders, intelligence officers, and the government are all on call, and are keeping communication lines open with the Ministry to find those responsible and bring them to justice. (Read in Arabic)

EGYPT IN THE NEWS

International media coverage on Egypt yesterday evening and going into this morning is focused on three stories:

  • The Interior Ministry has denied reports that Amal Clooney was warned she faced arrest if she were to visit Egypt. Interior Ministry spokesman Hani Abdel Latif says Clooney can visit Egypt “whenever she wants.” This is, far and away, the most picked-up news today on Egypt. (Read on AFP as carried by Yahoo and Ahram Online)
  • Also making significant global headlines is the hammam case, where lawyers for the defense spoke yesterday. Human Rights Watch is quoted in a Wall Street Journal piece as claiming the crackdown comes as the government is looking to polish its conservative credentials amid ongoing political and economic challenges: “In an effort to bolster its political standing, this supposed secular state is acting with a religious fervor that was not seen even under the Muslim Brotherhood.” The WSJ story was on the homepage of the website at time of writing. Stories from AP and AFP are being widely picked up this morning.
  • Two major archeological discoveries were announced yesterday: the tomb of a previously unidentified Ancient Egyptian queen, and the excavation of a funerary complex for Osiris (Read)

The Moroccan media, despite their claims to the contrary, seem insistent on keeping alive at all costs what they continue to call “a media war.” In an article appearing in Morocco World News, the author notes “Moroccan mass media’s stance toward the Egyptian regime has changed.” However, the remainder of his article is a rehash of what’s been said and does not bear leaving a link.

[Editorial sidebar: We’re going to sit this one out, for now. It’s neither fair nor accurate to describe this as a “war,” especially considering that Egypt would win without even trying based on the Wikipedia article on the Moroccan king alone.]

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

El Sewedy Electric to implement work on electricity emergency plan
Al Borsa | 04 Jan 2015
The Electricity Holding Company signed a protocol on Sunday with El Sewedy Electric for work on the national electricity emergency plan, according to Electricity Minister Mohamed Shaker. El Sewedy will finance its part of the work through an Energy Performance Contracting (EPC) system, whereby the company will finance the design, installation, and construction of the work. El Sewedy Electric is joining with Siemens and Ansaldo to build a total of four power plants in “Attaka” and “Mahmoudia” with a value of USD 201.3 mn. The majority of the electricity emergency plan will be performed by an alliance of GE and Orascom Construction for USD 504 mn. (Read in Arabic)

Ericsson to upgrade 180 power plants in Upper Egypt
Youm7 | 04 Jan 2015
Ericsson announced it will collaborate with the ministry of electricity to help upgrade 180 power plants in Upper Egypt. Ericsson will also jointly manage the upgraded power plants with Sun Misr Company. (Read in Arabic)

OIL & GAS

Dana Gas receives USD 60 mn from Egypt
Press Release | 04 Jan 2015
Dana Gas received USD 60 mn in overdue receivables from the Egyptian government. This is part of overdue receivables owed to Dana totaling USD 212 mn. Dana Gas will use the payment to cover its financial obligations, finance ongoing operations, and invest it in other domestic exploration projects. The payment was made with USD 10 mn and the remaining amount paid in EGP. (Read)

BASIC MATERIALS & COMMODITIES

Cash subsidies for cotton planting this year, squatters on desert land will be removed — Agri minister
Al-Ahram | 05 Jan 2015
Egypt will provide cash subsidies rather than subsidized production inputs to cotton farmers this year, Minister of Agriculture Adel Al-Beltagui said yesterday, according to Al-Ahram. He added that the government received offers of investment for its the ‘1 mn feddans’ project, which will be offered during the first quarter of this year, and all the needed preparations for the project’s implementation should be complete by then as well. He pointed out that 25% of the project will go to young farmers who will work together on the same plot as a cooperative. He also stressed the era of land grabs is over, saying the government will not allow any encroachment on its desert lands, for whatever use or reason, and squatters will be forcefully removed. He underlined this point by saying that the government’s lands across new projects and areas are monitored via satellites. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Alexandria Container and Cargo Handling Company in alliance with DP World
Al Mal | 04 Jan 2015
The Alexandria Container and Cargo Handling Company announced a strategic partnership with DP World to participate in presenting an offer to develop a container terminal at the Port of Alexandria. This follows a signing of a BOT agreement to operate a container terminal in the Dekheila Port. (Read in Arabic)

Saudi Binladin to develop Nozha Airport
Al Shorouk | 03 Jan 2015
Saudi Binladin Group was awarded the rights to develop the Alexandria Nozha Airport passenger terminal. The bid presented was for EGP 280 mn with work requiring 12 months for completion. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Armed gunmen attack police checkpoint
Al Masry Al Youm | 05 Jan 2015
Gunfire was exchanged Sunday night between armed gunmen and a number of police officers from the Awqaf Station in Gamaet El Dowal street. Three members of the police service were injured and one attacker was killed. A second was later arrested after seeking medical treatment at a Cairo-area hospital. (Read in Arabic)

ON YOUR WAY OUT

Mobile operators are coming under criticism by their customers due to poor service, Al-Mal reports in a story that is notable (a) for underlining what we think is growing consumer dissatisfaction with network quality and (b) is indicative of how slow a news period this interregnum between New Year’s Day and Orthodox Christmas really is. The story complains about the challenges network operators are facing and grumbles vaguely about how slow internet and the general lack of broadband services is making it more difficult for some business owners to manage their companies properly. (Read in Arabic)

Tax season: the most confusing time for business owners in Egypt. Recent changes in how capital gains taxes are treated is making life it difficult for accountants and tax lawyers, Al-Mal say, quoting investors who claim critical regulatory annexes to recently passed legislation have yet to be released. (Read in Arabic)

Arab Contractors Companies signed USD 100 mn agreement to build complete residential community in Rwanda. (Read in Arabic)

More than 200 thinkers, theologians and politicians from 21 countries attended ‘Strategies to prevent fanaticism’ at the Library of Alexandria over the weekend under the auspices of President Abdelfattah El-Sisi as part of the latter’s bid to spark a reconsideration of how current religious discourse enables radicalization. (Read in Arabic)

National Bank of Egypt branches and services were down for a little over an hour yesterday due to a technical fault. (Read in Arabic)

Okay, it’s a short story. And it has nothing to do with business, economics or politics in Egypt. But for those of you who are of a certain age (as some of us here are): 68-year-old Sylvester Stallone will apparently have a chance to make a final, non-suckey Rambo movie to end the franchise, CNN reports, citing a Tweet.

BY THE NUMBERS

USD (CBE auction): 7.1401 (unchanged)
USD (parallel market): 7.78 (down 2 pts)

EGX30 (Sunday): 8,926 (-0.88%)
Turnover: EGP 241.5 mn

WTI: USD 51.71 (-1.86%)
Brent: USD 55.50 (-1.63%)

TASI: 8,356.9 (-0.6%)
ADX: 4,450 (-1.7%)
DFM: 3,689 (-2.3%)
KSE: 4,36.6 (-0.5%)
QE: 12,229 (-0.5%)
MSM: Market closed

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