Sunday, 18 January 2015

Blame the cold for rotating power cuts. Surprise rate cut from CBE. Zaafarana generation down 95%. Gold concession tender in Eastern Desert. Bridgestone targets 20% market share. More E&P agreements inked. Alstom wins rail signaling upgrade contract

WHAT WE’RE TRACKING TODAY

While we’ve seen no confirmation since we originally picked up on it a few weeks ago, a World Bank delegation was slated to arrive in Egypt today to negotiate terms on a USD 1 bn facility to finance the build-out of sewage systems for villages in the Nile Delta.

WHAT WE’RE TRACKING THIS WEEK

The World Economic Forum’s annual meeting in Davos kicks off on Wednesday, 21 January. The four-day gabfest for the global business and political elite will include on Thursday a dinner session headlined “Shaping Egypt’s economic transformation.” President Abdel Fattah El Sisi is scheduled to kick off the evening event with “first-hand insights into the Egyptian economic roadmap and how the international business community can be of support” as well as his “vision for the Egyptian economy by 2020.” Among those scheduled to speak after the president are Trade and Industry Minister Mounir Abdelnour and Investment Minister Ashraf Salman. Sir Martin Sorrell (CEO of global PR giant WPP) and Ahmed Heikal (Chairman and Founder of Qalaa Holdings) will offer the private-sector perspective. The invite list includes dozens of global chairmen, CEOs and politicos. If you’re on Twitter, considering following@Reuters_Davos for coverage and (usually) video from the gathering.

The IMF will publish its World Economic Outlook Update this week. You can read the report and watch the live press conference webcast on Tuesday, 20 January at 3:00am GMT here. (Yes, that’s am, not pm — the release is at 11am Beijing time.)

FIRST LOOK: SHARM CONFERENCE SPEAKERS

Among the speakers confirmed for the 13-15 March economic conference in Sharm (per the conference website) are:

  • Mohamed El-Erian, Chief economic advisor, Allianz
  • Ahmad Abdulkarim Julfar, CEO, Etisalat Group
  • Amr Awadallah, CTO and co-founder, Cloudera
  • Arif Naqvi, Founder and CEO, Abraaj
  • Bob Dudley, Group CEO, BP
  • Claudio Dscalzi, CEO, Eni Petroleum
  • Fadi Ghandour, Founder of Aramex and CEO of Wamda Capital
  • Habib Haddad, Founding CEO, Wamda
  • Jeffrey Immelt, Chairman and CEO, GE
  • Sir Martin Sorrell, CEO and Founder, WPP Group
  • Moussa Seck, Interim Chairman, Pan African Agribusiness & Agro-Industry Consortium
  • Ronald Bruder, Founder and Chair, Education for Employment
  • Sami Iskander, COO, BG

LAST NIGHT’S TALK SHOWS

The opening segments of last night’s talk shows was dominated by the news of the passing of iconic Egyptian actress Faten Hamama yesterday. Both Lamees El Hadidy and Amr Adeeb started their programs by playing clips of Hamama’s films as well as taking phone calls from other prominent Egyptian actors who had worked with Hamama to commiserate and speak about her career. Read more about her life and career in her obituary in BBC News. Both Adeeb and Hadidy noted that their intended coverage of Japanese Prime Minister Shinzo Abe was truncated to accommodate news about the passing of Hamama.

Amr Adeeb in particular labored to explain the significance of Hamama’s cultural impact on Egypt. He said that Hamama had come from a time “when artists had a message. Hamama was important to Egyptian women.” Adeeb was referring to the 1960 film Nahr El-Hob [The River of Love], the final film she made with her ex-husband, actor Omar Sharif. The movie addressed the issue that — up to that point — Egyptian women could not initiate divorce; its release is credited for helping to influence a change in legislation.

“She stood for the fruits of hard work,” Adeeb said, noting her long career and savvy when it came to picking film roles, “not like kids these days.” Which segued into one of his better quotes of the evening:

“Kids these days – parents call me and tell me: ‘Please, take my son or daughter and give them a job, any job – even as a television host.’”

Adeeb finished his segment on Hamama by noting that during his interview with Omar Sharif, the actor had admitted that he had never loved anyone else.

Hadidy then hosted a panel of experts to discuss the draft investment law and proposed amendments. The panel included Chancellor Mahmoud Fahmy, general manager of the Egypt Businessmen Association; Hany Tawfik, head of the Egyptian Private Equity Association; and Tarek Tawfik, Vice Chairman of the Federation of Egyptian Industries. Hadidy spent about 20 minutes with the group before signing off, noting that the intro on Faten Hamama’s passing had taken up some unexpected time from the program. The entire segment with the panel (running time: 23:13) is available here.

Notable: During a commercial break in Hadidy’s program, we caught a commercial about fuel smart cards — are these commercials old? This reviewer doesn’t watch television except for these occasional reviews. The smart card commercial portrayed very shaabi Egyptians screaming at the top of their lungs at each other about the smart cards, which was the right directorial decision in the eyes of this reviewer to get the message through to Egyptians. The commercial advertised the e-finance website www.esp.gov.eg (which appears to be a work in progress) as well as the information hotline 19680 / 19683. (Read more on the fuel smart cards in our Energy, Renewable Energy and Subsidy Reform section below.)

Back to Adeeb, and apropos of nothing, he suggested at one point in his program that Minister of Tourism Hisham Zaazou is getting tired, and that there should be some new blood in the ministry with new ideas. As an example of what new ideas could be implemented, Adeeb suggested a private and expedited arrivals hall for GCC visitors.

Adeeb then spent several minutes going over the results of a recently conducted opinion poll in Egypt which found, among other things, that the most widely recognized political party (among those included in the survey) was Al Wafd, followed by Salfist party Al Nour and the Free Egyptians party. Adeeb noted that while the poll respondents were overwhelmingly (above 90%) against the return of NDP or Ikhwan figures in the parliament, he was personally convinced they would make up the majority of the next House of Representatives.

In his final segment, Adeeb hosted Dr. Moataz Abdel Fattah, host of his own talk show and sometimes consultant for the Egyptian government. Adeeb said he was inspired to have Abdel Fattah on after reading his recent op-ed about the differences in mentality between Arabs and Westerners. As this reviewer is one of Abdel Fattah’s former students, the reviewer kept a look out for the “everything in Egypt is like a car” analogy and Abdel Fattah did not disappoint. Dr. Moataz said that great leaders needed to possess both the power of imagination (he cited Abdel Nasser as having only this ability) and a sense of reality (Mubarak) — and that of past Egyptian presidents, only Sadat seemed to exemplify both traits.

However, as the conversation dragged on, and as the end credits began to roll while Abdel Fattah continued unabated, Adeeb’s eyes began to glaze over, likely as he reflected on how much longer he was going to have to sit there, long after everyone else had gone home.

SPEED ROUND

The CBE’s Monetary Policy Committee cut overnight rates by 50 bps to 8.75% in a surprise move that went against the expectations of four out of five analysts polled by Bloomberg (view the full CBE press release here in pdf). “The move will have a tremendously positive effect on the stock and bond markets,” Pharos’ Hany Genena told the newswire, also suggesting that it might signal the CBE is pondering a more flexible exchange-rate policy. (See also coverage in the Wall Street Journal.)

Explaining the move, the CBE cited decelerating headline inflation in both November and December while noting both the impact of lower global oil prices and “continuous growth in the manufacturing sector and the expansion of tourism activities after several quarters of contraction.” As surprising as the decision was, we believe the CBE is now clearly prioritizing growth over concerns about inflation. The decision to cut rates will continue to fuel the expansion in private sector investment through easing its monetary policy stance — a move we didn’t expect to happen before the end of 1Q15. This will also help the government achieve its budget deficit target as borrowing costs fall in response.

Meanwhile, the media re-warmed news that the economy grew 6.8% in the first quarter of the current 2014-15 fiscal year, although the stat was first announced back in mid-November. Source? The CBE’s statement on its interest rate decision, which noted that: “Notwithstanding the support stemming from the base effect, the expansion in economic activity during 2014-2015 Q1 came on the back of the continuous growth in the manufacturing sector and the expansion of tourism activities after several quarters of contraction.” (See Reuters and Al-Borsa for examples of this weekend’s coverage; or read the November story).

Shares of GB Auto were up 39% last week on the EGX, a clear signal the market welcomed the prospect of the Egypt-based regional automotive company receiving regulatory approval to call for an EGP 960 million capital increase. GB said it would use proceeds to pursue opportunities in the domestic market as well as potential regional growth. Meanwhile, Al Borsa reports that EFG Hermes was appointed to advise GB Auto on the capital increase.

Sugar mega-project Al Nouran Sugar (Al-Sharkiya Sugar Manufacturing Co.) wins Islamic Finance News’ Infrastructure & Project Finance Deal of the Year, 2014. The win was for an EGP 1.5 bn long-term syndicated Shariah-compliant facility concluded last April and arranged by a consortium of banks led by arrangers Abu Dhabi Islamic Bank Egypt, Audi Egypt and Banque Misr. The facility, covering 60% of the total investment cost, will help Egypt slash sugar imports by about 25%, Al-Mal reports, as Al Nouran builds a beet sugar production, sugar refining, molasses manufacturing, and ethanol and byproduct production plant in Al Sharkiya governorate. Shareholders in the plant include Al-Nouran Multitrading (34%), the Arab Fund for Economic and Social Development (26%); the Islamic Corporation for the Development of the Private Sector (26%); and the Egyptian Sugar and Integrated Industries Company (ESIIC) (14%). IFN noted in their award release with regard to the facility that “the financial structure introduces Istisnah — forward Ijarah to the Egyptian market.” See the English and Arabic editions of Al Mal for more.

Kellogg: We’re long-term strategic investors. Kellogg Vice President for CEE and MedMEA Amr Farghal went out of his way to reassure the domestic market on Thursday as the company’s EGP 888 bn acquisition of Bisco Misr closed. Farghal noted the company has no plans to change the Bisco Misr brand name; will invest in workforce development; and plans to increase sales at home and in export markets. 14% of the company remains in the hands of minority shareholders. (Read in Al-Borsa) Kellogg also ran a brief release on their website welcoming Bisco Misr to their portfolio. (Read)

Lactalis subsidiary ups bid for Arab Dairy: Al-Nour for Dairy Industries, the local subsidiary of Lactalis, Europe’s largest dairy company, raised its bid for white cheese maker Arab Dairy to EGP 60.50 per share, about 1.7% higher than a rival offer from Pioneers Holding, which already holds 25% of Arab Dairy. In announcing it had accepted the latest bid form Al-Nour, the Egyptian Financial Supervisory Authority extended the deadline for new bids to 1 February from the original 22 January. (Read)

The Sisi administration is planning international roadshows to promote government debt and the nation’s economic prospects as Egypt plans to issue dollar-denominated bonds after the March investment conference, Finance Minister Hani Dimian said over the weekend. (Read in Arabic)

The New and Renewable Energy Authority (NREA) has posted the full lists of companies who pre-qualified for solar and wind tenders. (Read the pre-qualified firms for solar tenders and for wind)

While there are constant attempts to scandalize Egypt for, among other things, the creation of a border buffer zone in Rafah, Palestinian news agency Ma’an reports that the Egyptian Army has found a 1.2 kilometer tunnel which connected directly to a Rafah resident’s home. The tunnel contained “a large amount of explosives and mortar shells.” (Read)

President Abdel Fattah El Sisi went on what the media characterized as a snap inspection of megaprojects on Friday morning, including the new six-lane highway linking Ain Sokhna to Zaafarana and the New Suez Canal. The release we received from Ittihadiya confirmed that the New Suez Canal is due to be inaugurated on 5 August 2015. (Read in Al-Masry Al-Youm).

Japan to provide USD 360 mn in energy, technology and infrastructure aid to Egypt, pledges USD 2.5 bn in Mideast aid: Prime Minister of Japan Shinzo Abe concluded the first leg of his Middle East tour in Cairo on Saturday with an announcement of USD 360 mn in aid to Egypt, including loans to upgrade Egypt’s power grid and continue work at Borg El-Arab airport; the funding was part of a USD 2.5 bn pledge of aid to the Middle East with a focus on nations impacted by Daesh. Prime Minister Ibrahim Mehleb also took the opportunity to extend an invitation to the Egypt Economic Development Conference in Sharm, while Abe invited President Abdelfattah El-Sisi to visit Tokyo. Abe is set to depart to Jordan next, followed by his planned visits in Israel and the Palestinian territories. (Read in Arabic, and read in AFP and Daily News Egypt)

Former deputy prime minister Ziad Bahaa El Din wrote an op-ed last week in Al Shorouk newspaper praising President Abdel Fattah El Sisi’s visit to the Abbasiya Cathedral on the Coptic Christmas mass, but urges more concrete steps such as the passing of the much-discussed but never-enactedhouse of worship law as well as a thorough and unsparing investigation of sectarian violence over the past four years. (Read in Al Shorouk in Arabic or the English translation in Ahram Online)

Switzerland continues to live up to the hype of being a boring country with a central bank that has a penchant for freaking-out global FX markets. On Thursday, the SNB removed the 1.20:1 peg at which it held the CHF relative to the EUR and lowered its interest rates deeper into negative territory at -0.75%(read the SNB press release in PDF here). The initial market response was a sudden 30% appreciation in the value of the CHF.

More fallout from low oil prices: Qatar and Shell have scrapped a USD 6.5 bn petrochemicals project, Bloomberg reports, while Schlumberger, the leading oilfield services provider, followed in Apache’s steps and announced it will lay off 7% of its workforce, or approximately 9,000 jobs, per Reuters.

We can’t see the floor, but might there be relief in sight? Oil gained ground in Friday trading following the release of the International Energy Agency’s monthly report on Friday. The key phrases: “How low the market’s floor will be is anybody’s guess. But the selloff is having an impact. A price recovery — barring any major disruption — may not be imminent, but signs are mounting that the tide will turn.” See coverage in CNBC and Reuters.

Veteran CNN anchor Clancy out after “controversial Israel tweets.” Jim Clancy resigned from CNN after 34 years, AdWeek reported on Friday, about a week after engaging in a long Twitter exchange centered on the Charlie Hebdo cartoons, Islamophobia and the Israeli PR machine.

BlackBerry denies takeover bid by Samsung: Both Blackberry and Samsung separately denied on Thursday reports that the South Korean manufacturer was looking to acquire the Canadian smartphone company, which led to a fall in Blackberry’s stock after having surged on the news of the alleged takeover a day prior. (Read in Bloomberg)

Did you try the FT’s 2014 Quiz of the Year, which we noted last month? The answer key was out on Friday evening. The winner of the “36 bottles of Laurent-Perrier Cuvée Rosé, an elegant champagne to enliven any celebration,” was one Loredana Quadro, from New York.

LAST WEEK’S CABINET MEETING

Actions taken at last week’s Council of Ministers meeting on Thursday include:

  • Agreeing to grant c. 518 acres of land to a project to build Sheikh Khalifa bin Zayed City in New Cairo (Read in Arabic)
  • Extending an agreement with Google on advertising and promoting investment in Egypt (Read in Arabic)
  • Approving a series of agreements with the UN World Food Programme to assist with increasing underprivileged communities’ access to assets (Read in Arabic)
  • Amending the definition of a low-income family to include a maximum household income of EGP 3,000 (up from EGP 2,500) to qualify for participation in the ‘one million homes’ project (Read in Arabic)
  • Discussed financing options for the linking of the Egyptian and Saudi power grids. (Read in Arabic)
  • Allowing local investment banks and consultancies to participate the March investment summit. (Read in Arabic)
  • Approved an agreement on aid package from the U.S. to increase sustainable investment in the tourism sector. The agreement was signed on 30 September 2014. (Read in Arabic)

DIPLOMACY

President Abdel Fattah El-Sisi arrived last night in the UAE for a two-day visit to attend the opening ceremony of the World Future Energy Summit, which will run in Abu Dhabi from 19-22 January. (Read in Arabic)

Morocco, Egypt FMs hold talks following diplomatic row: Foreign Minister Sameh Shoukry was in Fes on Friday for a day of talks with his Moroccan counterpart, Salaheddine Mezouar, in a bid to pave over a rocky stretch in relations, which included state-run radio referring to the Sisi administration as a coup regime.Al-Arabiya has a good wrap-up on the post-meeting exchange of diplomatic niceties, with the Foreign Ministry’s Badr Abdel Ati noting that “The Moroccan foreign minister stressed that his country supported the will of the Egyptian people following June 30, and that Morocco would always stand together with Egypt.” Shoukry reportedly invited the Moroccan king to visit Cairo.

Yemeni foreign minister meets with President Sisi, Al-Ahram reports. Other than the president’s praise for relations between the two countries, no news of note emerged from the talks.

Foreign Minister Sameh Shoukry met with Canadian Foreign Minister John Baird last Thursday, according to a statement by the ministry. While the case of Mohamed Fahmy was briefly mentioned, it was done so only in the context of one of many issues discussed, including the signing of “three memorandum of understandings in the fields of food logistics and storage, petroleum and mining and diplomatic training.” Correspondents from Canada’s CBC tweeting coverage of the visit noted Baird’s support for Egypt’s ongoing transition to democracy and war on terror (see the bottom of this story for the full set of tweets).

The MOFA reiterated its condemnation of the recent Boko Haram attacks, which included, according to witnesses, the killing of woman in the middle of labor.

EGYPT IN THE NEWS

The three top stories dominating international media coverage on Egypt from the end of the weekend into Sunday morning were the aforementioned discovery of the 1.2 km tunnel in Rafah, the recent visit of Japanese Prime Minister Shinzo Abe and his pledges of support to Egypt and the Middle East, and lastly news that Amal Clooney has issued a release personally calling upon President Abdel Fattah El Sisi to “pardon Mr Fahmy – who was convicted and sentenced to 7 years in prison on bogus charges of supporting the Muslim Brotherhood and fabricating false news following an unfair trial. Under Egypt’s constitution this pardon can be issued any time. Even if he is not pardoned, Mr Fahmy can immediately be deported or released on health grounds.” (Read the statement)

News of the statement was picked up in The Jerusalem Post and Ikhwan / Hamas mouthpiece Middle East Monitor. More coverage should be expected to follow.

WHAT YOU CLICKED ON LAST WEEK

The five most-clicked links in Enterprise on the week of 11 January (which was only the second full week of the year, believe it or not) were:

  • Egypt The Future (official website of the Egypt Economic Development Conference in Sharm, 13-15 March)
  • Abbas welcomed at Turkish presidential palace by Erdoğan, 16 warriors in full costume from various periods in Turkish history, and a total divorce from reality.  (Guardian) (tie)
  • Jet-skiing through the flooded streets of Alexandria (Facebook) (tie)
  • Will Egypt show America how to win the war on radical Islamic jihadism? (Washington Times)
  • Salman: Income tax law amendments to be passed within three weeks (Al-Borsa)
  • Lessons From a Squash Player: Travel Light (Wall Street Journal)

WORTH READING

The New Yorker has a very long and fascinating piece whose main focus is on 36-year old Egyptian scientist Rana el Kaliouby, who has been described as a “rock star” and whose tech startup Affectiva has been ranked as one of the fastest growing startups in the United States. Her groundbreaking research focuses on creating software that can detect the emotional states of its users by scanning their facial expressions, with potential applications running the gamut from video chat programs that read the brief flashes of emotion that we usually miss to give a read on the other party’s emotional state, to helping autism patients, to testing television shows, as a FOX executive asked of Kaliouby. Not only is the subject matter intriguing, with nearly an unlimited amount of business applications possible from Kaliouby’s work, but the author Raffi Khatchchadourian even manages to capture the essence of what it’s like to be raised by Egyptian parents, as shown in the following passage:

“She aspired to teach computer science, but she knew that a tenured job would require doctorate work abroad. “My dad was like, ‘Well, if you go, by the time you get back, you will be too old to get married.’ “ Uncertain, she applied for work at a local tech startup. “It was in a residential building,” she said. “My dad drove me there, then wanted to come up, and I was like, ‘Please, it will look awful,’ so he waited in the car. I was wearing a skirt, and I looked very formal—it was my first interview—and I saw all these guys walking around in shorts, barefoot: typical software engineers. The guy who interviewed me said, ‘We have run out of chairs,’ and, pointing to my skirt, he said, ‘We can either have this interview on the floor, or, if you are uncomfortable, we can reschedule.’ I was like, ‘O.K., I can sit on the floor.’” (Read)

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Theft, lack of maintenance sees generation of Zaafarana wind farm down >90%.
Al Mal | 14 Jan 2015
Electricity generated at the Zaafarana wind farm has plunged to just 20 MW from a design capacity of  540 MW, sources at the New and Renewable Energy Authority told Al Mal, citing theft of equipment, the overall lack of security around the turbines, and poor maintenance. (Read in Arabic)

Cold weather to blame for power cuts
Al Borsa | 15 Jan 2015
A Ministry of Electricity spokesperson blamed the recurring, rotating power cuts in Egypt lately on the cold weather, which affected the flow of fuel to power stations with feed lines becoming congested. He also said that the lack of diversity of fuel supplies is a significant ongoing threat to operations, but added that looking into imports of LNG from countries like Algeria is a step in the right direction. (Read in Arabic)

Egypt importing 200 MW of electricity from Jordan
Al Borsa | 15 Jan 2015
Egypt imported electricity from Jordan for the first time last Sunday. Through the countries’ connected power grids, Egypt took 200 MW from Jordan to cover shortages in production from the High Dam and supply increasing demand. The Ministry of Electricity is currently in process of repairing and power stations that cover about 12% of Egypt’s total electricity generation capacity. The ministry is also paying the Ministry of Petroleum USD 1 bn for fuel used at power stations “within weeks.” (Read in Arabic)

Rollout of petrol smart cards continues; administration mulls adding LPG cylinders to ration cards
Al-Shorouk, Al-Mal | 17 January 2015
The national rollout of smart cards entitling car owners to set allotments of subsidized petrol continues, Al-Shorouk reports. The joint effort between the ministries of petroleum, finance, supply, and planning should see the new system ready for use by April. Finance Minister Hany Demian noted the government is keen on implementing the new system, and the prime minister will soon issue a decree including executive regulations requiring petrol station owners to implement the smart-card system at all of their stations. In related news, the successful trial of smart cards for subsidized bread has led the ministries of petroleum and supply to strike a committee to study adding LPG cylinders to the smart-card system, Minister of Supply and Domestic Trade Khaled Hanafi said this weekend. The addition of LPG would offer low-income consumers the same benefits as the bread allotment, including discounts for those who consume less. (Read in Arabic about Smart Cards for Gasoline on Al Shorouk, Read in Arabic about LPG Cylinders in Al Mal)

MoE signs an EGP 3 bn loan agreement with NBE
Al Mal | 15 Jan 2015
The Ministry of Electricity has inked an EGP 3 bn syndicated facility led by the National Bank of Egypt to finance the South of Helwan power plant and the third unit of Assiut power plant. The project financing will allow the ministry to add 2,600 MW in generating capacity as part of a five year plan that ends in 2017. (Read in Arabic)

OIL & GAS

Ministry of Petroleum signs USD 97 mn agreements with BP and Dana Gas
Al Masry Al Youm | 16 Jan 2015
The Ministry of Petroleum has signed two new agreements with international oil companies, the latest in a string of similar announcements stretching back two weeks now. Dana Gas was awarded a concession agreement in Saliheya at the Nile Delta with a minimum investment of USD 22 mn and involves drilling five new wells. BP and Dana Gas were awarded the rights to a site at Matariya, also at the Nile Delta, with a minimum investment value of USD 75 mn and three wells to be drilled. Our take: The significance is less in the individual announcements than the drumbeat the government has orchestrated, suggesting that E&P companies have some measure of confidence not just that the Sisi administration will make good on past-due debts (where the balance of arrears has been falling), but also that they’ll continue to be paid for new agreements. Set against the current apocalypse in oil prices, this is a significant development. (Read in Arabic)

Projected gas importing cost reduced by 20% – EGAS
Al Mal | 15 Jan 2015
An unnamed official at EGAS told Al Mal that the projected cost of importing gas was reduced by 20% in line with the drop in international energy prices. The drop implies savings of USD 500-600 mn. The initial estimations were set at USD 15-17 per mbtu, the EGAS official added, but prices are now below the USD 14 per mbtu mark. (Read in Arabic)

Ministry of Petroleum to restructure 10 oil companies; some may list on EGX
Al Ahram | 14 Jan 2015
Ten state-owned oil and gas companies are currently being assessed for restructuring and possible public listing. The companies include low-profitability producers and the restructuring process will assess the possibility of mergers to improve competitiveness and increase returns. The Minister of Petroleum stressed that any public listing would only be to provide financing for the companies’ production activities. (Read in Arabic)

Petroceltic expects its oil output to fall in 2015
RTE | 15 Jan 2015
Petroceltic expects to produce 16.5-18.5 mboe in 2015, down from 22.6 mboe in 2014. The Irish producer noted that its revenues are largely shielded from energy-price volatility because most of its production was either fixed price gas in Egypt in accordance with EGAS contracts, or Bulgarian gas priced at a long-time lag. (Read)

American investors mull investment opportunities in Egypt’s oil drilling sector
Al Borsa | 14 Jan 2015
A delegation from U.S. based Airtech will visit Egypt next month to explore investment opportunities in improving oil-drilling technologies the country, according to the group’s representative in Egypt, Ahmed Saber. Airtech aims to treat fuel and increase efficiency by up to 30%, as well as reduce emissions and waste. Airtech is also exploring the possibility of developing modern (fifth-generation) refineries along with providing refueling service at the Suez Canal area. (Read in Arabic)

GANOPE aims to attract USD 65 mn in investments in FY2015/16
Al Borsa | 15 Jan 2015
In Ganoub El-Wadi Petroleum Holding Company’s (GANOPE) annual planning meeting, the head of the company announced that they were targeting USD 65 mn in investments next fiscal year. This would bring up the total investment GANOPE is part of to USD 442 mn since the state-run company was founded in 2003. GANOPE currently oversees 10 agreements with EGPC, has 17 concessions running, and expanded downstream to deliver natural gas to 516 thousand clients in Upper Egypt in 2014. Potential projects include geophysical surveys and potential E&P sites. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

EMRA to tender gold mines in the Eastern Desert
Al Mal | 15 Jan 2015
Sites for gold exploration in the Eastern Desert will be tendered by the Egyptian Mineral Resources Authority (EMRA) for the first time in five years in 2H15. Mining experts believe the amendments to the mining law should make the tender attractive to international investors. Experts told Al Mal that EMRA’s drive to issue new tenders would not just be limited to gold exploration but will also extend to other metals. (Read in Arabic)

Italian investors to build 10 grain storage silos; wheat supply to last until May 2015
Al Shorouk, Al-Ahram | 15 Jan 2015
Italian investors discussed with the Minister of Supplies the optimal locations to build grain storage silos in Egypt. As part of a debt relief program, Italian investors are injecting USD 45 mn to build 10 grain storage silos in a number of different cities and repair and refurbish existing ones. (Read in Al-Shorouk) Meanwhile, Dr. Khaled Hanafi, Minister of supply and internal trade, declared that wheat supply should last until May 2015. (Read in Al-Ahram)

AUTOMOTIVE & TRANSPORTATION

Bridgestone aims to capture 20% of Egypt’s tire market
Al Borsa | 15 Jan 2015
Bridgestone is aiming to control 20% of the Egyptian car tire market by 2020, according to regional its CEO. The company has no plans to open additional manufacturing facilities in Egypt or the region for the time being and will continue to operate service centers. Bridgestone recently opened a factory in Turkey. (Read in Arabic)

Alstom awarded EUR 100 mn contract to improve railway signaling systems
Railway Gazette | 16 Jan 2015
Alstom was awarded a EUR 100 mn contract by the Egyptian National Railways Authority to supply and maintain signaling equipment for the line running from Beni Sueif to Assiyut for five years. The project is being financed by the World Bank as part of the Ministry of Transport’s drive to improve the safety standards of the railway network’s signaling systems. (Read)

REAL ESTATE

Cabinet allocates 518 acres to build Sheikh Khalifa bin Zayed City in New Cairo
Amwal Al Ghad | 15 Jan 2015
The Egyptian cabinet of ministers agreed to grant approximately 518 acres of land to a project to build the Sheikh Khalifa bin Zayed City in New Cairo. The land will be provided for free and exempt from registration fees. The land will be used to build an integrated community including an affordable housing project for Egyptians with college degrees. (Read in Arabic)

Low household income threshold for the ‘one million units’ project increased to EGP 3,000 a month
Al Mal | 16 Jan 2015
The Minister of Housing announced that the cabinet of ministers agreed to increase the threshold of low income for beneficiaries of the one million units’ project to EGP 3,000 per household per month. The previous limit was set six years ago, without consideration for inflation rates, according to the head of the Ministry’s real estate financing fund, who also added that the fund will now be solely in charge of defining the level constituting low income. (Read in Arabic)

TECHNOLOGY

Flat6Labs CEO Ramez Mohamed: Abu Dhabi’s ecosystem just erupted and your startup might fit the bill
Entrepreneur Middle East | 15 Jan 2015
Ramez Mohamed, CEO of the Egypt-headquartered regional accelerator Flat6Labs, talks about why the firm chose to open its latest regional office in Abu Dhabi in a story that’s equal parts profile of Flat6, of Mohamed and of Abu Dhabi. (Read)

BANKING & FINANCE

Beltone’s capital increase approved
Al Mal | 15 Jan 2015
EFSA approved Beltone Financial capital increase request on Thursday. Beltone’s regulatory capital was increased from EGP 300 mn to EGP 1 bn and paid-in capital is increased from EGP 83.6 mn to EGP 125.4 through the issuance of 20.9 million new shares. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Drop in interest rates lowers government borrowing costs
Al Shorouk | 17 Jan 2015
The Central Bank’s decision to lower interest rates will have a positive impact on government borrowing costs, said a senior official at the Ministry of Finance who spoke on condition of anonymity. Interest rates on treasury bills and government bonds are affected by several factors, the source said, including interest rates on bank deposits and lending rates, inflation and liquidity. (Read)

Ministry of Petroleum announces availability of 270,000 tons of butane gas
Al Shorouk | 17 Jan 2015
The Ministry of Petroleum is directing 270,000 tons of butane gas ready for distribution in cylinders to subsidized consumers nationwide, the Ministry of Petroleum said this weekend. That breaks down as 170,000 tons recently imported and 100,000 tons of domestic stocks. The government is distributing butane cylinders after a shortage of LPG swept the domestic market as rough seas made it impossible for vessels to deliver orders to Egyptian ports. (Read)

OTHER BUSINESS NEWS OF NOTE

Supplies ministry target EGP 50 bn in investments in 18 months
Amwal Al Ghad | 15 Jan 2015
The Minister of Supplies aims to drive up investment in domestic retail to EGP 50 bn in 2015 through to 1H2016 through an increased cooperation between the government and the private sector. The Ministry’s plan to increase investment involves using land the Ministry owns in cities including Beheira, Gharbiya, Beni Sueif, Aswan, and Port Said. (Read in Arabic)

21.5% increase in trade between Egypt and Dubai
Al Borsa | 17 Jan 2015
Total trade between Egypt and Dubai reached AED 11.3 bn during the first nine months of 2014, compared to AED 9.3 bn in the same period of 2013. (Read in Arabic)

REGIONAL

Algeria seeks to calm protests over shale gas plans
Reuters Africa | 14 Jan 2015
Algeria moved on Wednesday to reassure the public that fracking poses no danger to local residents, Reuters reports, quoting senior government energy advisor Ali Hached as saying, “I can reassure all that operations to extract shale gas do not constitute any danger for the population and environment.” State-owned Sonatrach continues to move ahead with its plans to use hydraulic fracturing to produce gas. (Read)

ON YOUR WAY OUT

Short interesting piece about the problems with Egypt’s cotton industry. (Read in Arabic)

Egypt received 6,000 tons of butane gas at the El Zeitiat port in Suez coming for the Saudi Arabian port of Yanbu’. Shipments from Saudi Arabia were delayed due to poor weather conditions in Egypt last week. (Read in Arabic)

Edita Food Industries’ board of directors met on Thursday and approved the decision to list on the EGX as well as to appoint Pharos as a financial advisor for the IPO. (Read in Arabic)

BY THE NUMBERS

USD (CBE auction): 7.1401 (unchanged)
USD (parallel market): 7.83 (up 8 pts)

EGX30 (Thursday): 9,555.99 (+0.12%)
Turnover: EGP 1.888 bn including special transaction, EGP 1 bn without (c. 46% above the 90-day average)

EGX30 (Last week): +6.81%
EGX30 (Year-to-date): +6.86

WTI: USD 48.69 (+5.28%)
Brent: USD 50.17 (+3.94%)

TASI: 8,458.7 (-1.1%)
ADX: 4,481.4 (-0.6%)
DFM: 3,842.6 (+0.8%)
KSE: 444.3 (-0.1%)
QE: 11,862.5 (-0.1%)
MSM: 6,518.8 (+1.3%)

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