Tuesday, 27 January 2015
WHAT WE’RE TRACKING THIS WEEK
President Abdelfattah El-Sisi will be in Addis Ababa on Friday for the 24th African Union summit in the first visit to Ethiopia by an Egyptian president since an attempt on the life of Hosni Mubarak there by Egyptian Islamists in 1995. The visit, confirmed by the state-run MENA news agency, could mark a turning point in Egypt’s foreign policy toward East Africa and the states with which it shares Nile waters.
LAST NIGHT’S TALK SHOWS
Bear with us and you’ll see where we’re taking this: One of the top stories on Egypt in the foreign press last night was news of the landmark conviction of Egyptian doctor Raslan Fadl of manslaughter in the case of 13-year old Sohair Al-Bataa, who died following his performing FGM. This is the first such conviction of its kind since FGM was outlawed in Egypt in 2008. The conviction was won on appeal, and the doctor was given a sentence of two years for manslaughter and three months for performing FGM; his clinic was closed for a year. The girl’s father was given a commuted sentence of three months for having subjected his daughter to the procedure.
This morning’s review of Last Night’s Talk Shows begins with this news in light of the BBC’s Orla Guerin and her analytical take on the story yesterday: “The sentence was broadly welcomed, but media interest has waned in the wait for the initial verdict, and the appeal result is not expected to garner too much attention. So far, it has been reported on the websites of the main newspapers but the stories are brief. There has been no coverage so far by the state agency.”
Last night, Amr Adeeb’s co-host Rania El Badawy went into a long and impassioned critique of FGM in Egypt and praised the court’s decision today. The program brought blurred-out footage of an actual procedure. Even though most of the screen was a blur, the clip was still harrowing to watch. El Badawy noted this and expressed outrage at the family’s celebration following the procedure, also captured in the video. El Badawy affirmed accurate statistics on the FGM in Egypt, and insisted it was not only a rural issue, and that if people wanted a real revolution that it would require change on the individual level.
Lamees El Hadidy also devoted a segment of her program as well to praise the decision, emphasizing that thisis the role of the prosecutor, referring to the fact that prosecutors had lodged the appeal of the earlier decision. A call-in guest to El Hadidy’s show was also pleased by the verdict, but rightly pointed out that she wanted to see the doctor’s medical license be permanently revoked, to which El Hadidy agreed.
Another story which received some attention yesterday, though more in the domestic press, was that peaceful Islamists peacefully planted some peace bombs in CityStars mall, prompting its evacuation. The following exchange on Twitter captures typical Egyptian indifference in the face of terrorism (h/t Egyptian Streets):
@MayAbdelAsim: So I call to book cinema tickets to watch Aswar ElAmar at citystars and I am told “sorry we have a bomb in the mall so no cinema today” #ok
@AhmedISaed: @MayAbdelAsim Go to hilton ramsis or nile city
In covering the news, El Hadidy praised the use of a robot in City Stars and the bomb armor used at another location to defuse another IED. Which prompts us to suggest that terrorists in Egypt should give up because not only are Egyptians not terrified of terrorism, they could be seen eagerly massing around the site where the bomb was being defused, held back not by a sense of fear but by a police cordon.
This prompted El Hadidy to wonder aloud what on Earth were those people doing standing around watching.
In his program, Adeeb also noted that two IEDs were found and successfully defused at the front gate of Al Ahly Club. [We would add, having stumbled onto the scene and immediately fled — discretion being the better part of valor — that a device was planted and similarly rendered inert on Laselky St. in Maadi on Sunday.]
Amr Adeeb then noted that it was Opposition Monday, wherein he hosts guests he describes as being outside of mainstream public opinion. His guests included three young representatives of liberal political parties, including Maha Abdel-Nasser of the Egyptian Social Democratic Party. The entire conversation reveled in what could almost be described as gallows humor. Secular parties are being criticized for being in a state of unpreparedness for upcoming parliamentary elections, while their young representatives make a good point of explaining they have been painted into a corner with very little room to be able to build on their parties. The panel acquitted themselves well, raising some credible concerns.
Emaar Misr will list on the EGX, Al-Shorouk is reporting, quoting a source at the EGX who claimed EFG Hermes and JP Morgan will lead the IPO, which could be worth c. EGP 2 bn.
How low will the EGP go? Pharos head of research Hany Genena is out with a smart piece covering the question on everyone’s mind these days. His take: Punters are taking a wrong bet. The recent “post devaluation” move in the parallel-market mid-rate from EGP 7.75 to EGP 8.00 “reflects speculative demand rather than fundamental balance of payments-related demand.” Genena notes that “we strongly believe the CBE should swiftly aim towards full convergence towards the ‘pre-devaluation’ parallel market rate of around 7.70/7.80” and suggests that the currency should stabilize later this year and potentially come under some “appreciation” pressure in early 2016 at the latest. Get his full take here (pdf download), including the rationale and supporting data.
The Finance Ministry has appealed a court decision exempting OCI from repaying EGP 7 bn in back taxes, according to Al Masry Al Youm. Meanwhile, word emerged yesterday that EFG Hermes is acting as sponsor and global coordinator on OCI’s de-merger of its construction business and subsequent listing in Dubai and on the EGX.
Will civil servants be allowed to retire early? That seems to be the thrust of a recent announcement by Minister of Planning Ashraf Al-Arabi as part of a planned overhaul of the “civil workers law,” which would be re-named the “civil service law,” Al-Borsa suggests. We’ll be looking for more information on this in the days ahead.
Gamal and Alaa Mubarak were released from prison yesterday at 2am, an official confirmed to Reuters in a story released in late afternoon. The two, free pending retrial in a corruption case, visited their father, former president Hosni Mubarak, in hospital later in the day.
Minister of Interior Mohamed Ibrahim held a news conference yesterday regarding the events of last weekend. Commenting on the killing of leftist activist Shaimaa El Sabbagh, Ibrahim said the ministry is fully cooperating with the prosecutor, and that if it turns out that police officers were behind her killing, he himself will hand them over. (Watch, or skip around, it’s long at 42 minutes)
Al-Monitor is reporting that despite prior news to the contrary, Egypt and Iraq have reached an agreement regarding a debt-oil swap, according to an unnamed government official. “Dropping the debt in exchange for oil was the only solution to get the Egyptian dues in the form of a commodity that Egypt strongly needs in light of the energy crisis … there was no time to waste in new differences with Iraq, as the unstable situation in the region required finding a solution to this issue and new ways of cooperation.” (Read)
Americana has no plans to open 30 restaurants at the moment, the company said in a very brief statement issued yesterday, counter to some chatter in the press, Al-Borsa reports.
And you thought Cairo was bad? Check out the photo of Beijing (and onward link) accompanying a tweet from Silvercrest Asset Management MD and Chief Strategist Patrick Chovanec on the mayor of Beijing’s declaration that the Chinese capital is “not a liveable city.”
KSA will stay the course on economic diversification and, it seems, opening to foreign investors. Concerns that King Salman and his advisors might back away from plans to open the Tadawul to foreign investors should be easing this morning after remarks by the head of the Saudi Arabia General Investment Authority at gathering attended yesterday by Google chairman Eric Schmidt. An AFP story notes that the kingdom plans to expand opportunities in “the health, transport and mining sectors, along with information and communications technology … There was also a plan to ‘transform’ the financial services, tourism and real estate sectors while focusing on education and ‘innovation’”.
Abdullah Al Badri: Oil could hit USD 200 per barrel, should producers decide to not spend on or invest in new supply, echoing comments by Eni’s chairman on which we reported last week. (Bloomberg)
If you have kids attending school in / live yourself in / are flying into the northeastern United States or Atlantic Canada: Everything from New York north to Maine and into Canada is basically shut down at the moment in anticipation of the latest Blizzard of the Century. It’s apparently dire enough to be front-page news in the FT.
If you’re looking to fill some time between meetings or calls, two stories in the WSJ are worth your time this morning in what otherwise seems a pretty slow news day as the hacks take cover from the snow alongside the rest of the Eastern Seaboard. First, it seems emerging market central banks have gotten the gold bug. Meanwhile, European and Greek officials are already posturing on bailout terms in the wake of the Syriza electoral victory.
A MESSAGE FROM the Arabian Hotel Investment Conference and Sahl Hasheesh:
The organizers of the Arabian Hotel Investment Conference are delighted to announce the first Egyptian Tourism Investment Briefing hosted by Sahl Hasheesh in Cairo on 25 February. ETIB is a high-level, invitation-only event which will bring together a select group of leading investors, developers, government officials and financiers to gain investment insights into Egypt’s steadily recovering tourism sector. Among the confirmed speakers to-date, Maha El Shalkamy (Senior Consultant, Egyptian Ministry of Finance, and Associate Professor of Economics, American University of Cairo) will be addressing “How the economy will shape new investments and defining the macro-economic outlook for Egypt?” Meanwhile, Ben Martin Principal (Head of Economics, AECOM) will join Fillipo Sona (Director-Head of Hotels (MENA) of Colliers international) and Philip Wooller (STR Global) to offer insight into “Renovation and reinvention, shedding light on the current state of the Egyptian hotel and resort industries and looking at the hotel performance patterns over the years, and exploring what the data tell us about the current investment opportunities.” Further information, including the full agenda and list speakers, is available on the ETIB website.
Political analyst Eric Trager of the Washington Institute for Near East Policy, a right-wing think tank,writes for Politico: ‘Why Egyptians Don’t Want Another Revolution.’ The basic thrust of his argument, which may seem self-evident to a majority of us living in the region, but which could be poorly understood elsewhere, is that the revolutionaries left the state broken, and that the majority of the Egyptian people have no wish to see a further breakdown. This “breaking” of the state was only compounded by Morsi’s year in office, which has now even among some leftists come to finally be understood for the unmitigated disaster for which it was.
“Egypt’s state collapsed even further under Muslim Brotherhood leader Mohamed Morsi … in large part due to the Brotherhood’s particular nature. The Brotherhood … works to ‘Islamize’ the individual through its rigid five-to-eight-year indoctrination program; then ‘Islamize’ the society by dispatching its members to recruit new Muslim Brothers through social services; then ‘Islamize’ the state by winning elections and appointing its members to positions of authority; and finally establishing a ‘global Islamic state’ comprised of other Brotherhood-run countries, which will challenge the West for worldwide hegemony.” (Read)
In light of President Abdelfattah El-Sisi’s historic visit to Ethiopia this week to attend the 24th annual African Union Summit in Addis Ababa, an op-ed was published in The New York Times by British researcher Alex De Waal, who serves as executive director of the World Peace Foundation at Tufts University. The op-ed calls on El-Sisi to have Egypt join the Nile Basin Initiative’s Cooperative Framework Agreement, which was signed in 2011 by Ethiopia, Kenya, Uganda, Rwanda and Tanzania. (Read)
Foreign Minister Sameh Shoukry arrived in Ethiopia today for preliminary meetings ahead of the President’s scheduled arrival on Friday.
In comments to Egyptian state news agency MENA, Spokesperson for Ethiopia’s Ministry of Foreign Affairs Dina Mufti emphasized the importance of the meeting between President El Sisi and Ethiopian Prime Minister Hailemariam Desalegn, saying “the meeting will not only help boost ties between both countries but also it will prove African countries can solve their own problems.” (Read)
The Egyptian Ministry of Foreign Affairs’ position paper on the Renaissance Dam may be found in the second link on this page.
Egypt condemns reported killing of Japanese hostage: The Egyptian Foreign Ministry has issued a press release expressing Egypt’s sincerest condolences to the government and people of Japan as well as “its strongest condemnation and absolute rejection of the reported murder of a Japanese individual that was held hostage by the ISIL terrorist group. If the video depicting the murder being circulated is verified as authentic, this revolting crime would represent a brutal act that contradicts the teachings of Islam and violates the most basic principles of ethics and humanity.” (Read)
Japanese Prime Minister Shinzo Abe has reached out for help to President El Sisi and a handful of other regional leaders, including Erdogan, on the hostage situation, as reported by the AFP.
The response of the Japanese people has been to mock Daesh online, for, among other charges, shadows not lining up properly in their videos, which has led to some accusing the terrorist group of using Photoshopped images. This, along with Daesh Twitter users misappropriating the Japanese language (which they clearly do not understand), unleashed a tidal wave of meme images ridiculing the group. While it may seem silly, if any people could undermine Daesh’s credibility online, a space the terror group has successfully used to stoke fear and recruit new jihadis from around the world, it would be the Japanese.
EGYPT IN THE NEWS
The shooting and killing of 32-year old activist Shaimaa El Sabbagh in Cairo on 24 January continued to lead international coverage on Egypt last night and early this morning.
Human Rights Watch issued a statement on the deaths of the protesters over the weekend with a mention of El Sabbagh’s killing.
Patrick Kingsley of The Guardian commented yesterday on the strident tone of a front-page editorial in Al Ahram regarding the death of socialist activist Shaimaa El Sabbagh. Kingsley quotes Ahram editor Sayed Naggar as writing “The invulnerable facts conveyed by the eyewitness accounts from Shaimaa’s partners in the demonstration, and by the footage of her killing, clearly indicate the killer, the misuse of power and a failure to implement the law.” The tone and forcefulness of the editorial was also commented on by the AP.
ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM
Beltone Capital looks to private placement, will invest in USD 100 mn solar power station
Daily News Egypt, Al Mal | 26 Jan 2015
Beltone Capital will look to raise USD 100-120 mn in a private placement some time this year, according to comments carried by the Daily News Egypt attributed to Beltone Private Equity chief Hazem Barakat. Citi and Beltone Financial are advising on the transaction. The press is also reporting that Barakat announced Beltone and Total will jointly invest in a c.USD 100 mn solar energy station after being pre-qualified for renewable energy projects. (Read in Daily News Egypt and in Arabic in Al Mal)
Germany’s KSB to provide pumps, valves, and cooling circuits to South Helwan power station
Al Mal | 26 Jan 2015
KSB was awarded a tender to provide pumps, valves, and cooling circuits to South Helwan power station by the Ministry of Electricity. The results of the tender were delayed as the World Bank was examining the results of the tendering process. The power station is currently under construction at a cost of EGP 15 bn, financed partly by a World Bank loan of USD 500 mn and an Islamic Development Bank loan of USD 450 mn. The station has a capacity of 1.95GW and is expected to come online in 2016. (Read in Arabic)
Ministry of Electricity to build five new transformer stations
Al Mal | 26 Jan 2015
Five new transformer stations will built by the Ministry of Electricity with a capacity of 500MV per unit. The stations will be built in the Gulf of Suez area, the Red Sea governorate, and Minya at a total cost of EGP 800 mn. Private sector companies building wind farms in Suez and the Red Sea areas will finance part of the cost, Al-Mal reports. (Read in Arabic)
Government approves environmental standards for coal usage
Al Borsa | 26 Jan 2015
The government has approved environmental standards to regulate the usage of coal, according to the Minister of Environmental Affairs Khaled Fahmy. The regulations seek to control the coal importing process as well as the transport and disposal processes domestically. (Read in Arabic)
OIL & GAS
EGAS to set LNG imports prices according to Brent prices; looks to source second floating storage and regasification unit
Al Borsa, Al Mal | 26 Jan 2015
EGAS will price its LNG imports using a formula that links the price to Brent crude in order to benefit directly from the drop in oil prices. Also, the head of EGAS noted that the Hoegh-supplied FSRU that Egypt will be using does not have enough capacity to regasify the total volume of LNG for which Egypt has contracted, prompting the Sisi administration to enter talks to source a second FSRU. The government is also in negotiations with domestic ports to assess the optimal location for them. So far, it is most likely that the new FSRU will be docked at Port Said, Damietta or Shark El-Tafree’aa. Al Mal reports that EGAS has picked the cheapest bids to provide the LNG imports and set the monthly quantities at 500-680,000 cubic meters. (Read in Arabic and here)
Petroleum Ministry imports 17,000 tons of butane gas over the weekend, supplies 3.2 mn canisters
Amwal Al Ghad | 26 Jan 2015
In its attempt to combat the domestic butane shortage, the Ministry of Petroleum has imported a total of 17,000 tons last Friday to Sunday, with 12,600 additional tons arriving yesterday. The ministry also flooded 3.2 mn butane canisters into the market during the weekend and continues coordinating with the Ministry of Supplies to reduce smuggling and improve the distribution network. (Read in Arabic)
BASIC MATERIALS & COMMODITIES
Fertilizer plants have not received natural gas in two weeks
Al Shorouk | 26 Jan 2015
Delta Company for Fertilizers has not received natural gas from the government in two weeks – a first in over 40 years, according to the head of the state-owned company Mohsen Nasser. Nasser warns that his company might not be able to sustain the drop in production as it is contractually required to sell its production to the government at subsidized prices, a fact which has driven up its losses in the past two years. (Read in Arabic)
Ministry of Housing seeks USD 150 mn from Kuwait-based development finance institution
Al Borsa | 26 Jan 2015
The Ministry of Housing is currently in negotiations with the Arab Fund for Economic and Social Development for USD 150 mn. The funds will be used to finance the ministry’s initiative to deliver sewage infrastructure to impoverished and underserved villages. The Minister of Housing said the negotiations are part of several deals the ministry is looking to pen with international institutions including the World Bank. A delegation from the Arab Fund will revisit Egypt in four weeks to provide its final assessment for the project, which is expected to begin in April. (Read in Arabic)
BANKING & FINANCE
Beltone Financial Holding will assume management of Arabia Investments
Al Borsa | 26 Jan 2015
Beltone Financial will take over management of Arabia Investments, Development and Financial Holding Company’s assets and resources for a period of five years, as reported by Al Borsa. The agreement will see Beltone Financial assume Arabia Investments’ expenses in return for 2% of Arabia Investments’ capital and 10% of its revenues. (Read in Arabic)
EGYPT POLITICS + ECONOMICS
Expert committee to amend social security Law
Al Mal | 26 Jan 2015
An expert committee is set to hold its first meeting next Thursday to discuss revisions to the nation’s social security law. The committee will reportedly seek input from both international experts and representatives of pensioners. Minister of Social Solidarity Ghada Wali announced several reforms to the Social Security law that include forming a committee of representatives from the Ministry of Finance and Ministry of Social Solidarity to review current social security law for integration into the revamped law. (Read in Arabic)
Egypt to repay last of Qatari loan by the end of the year, won’t ask for new funding
Al Mal | 26 Jan 2015
Egypt will be repaying the last remaining tranche of Qatar’s debt before the end of this year, according to the CBE governor Hisham Ramez. He added that Egypt will not ask for more funding from Qatar despite Saudi Arabia’s initiative to improve ties between Cairo and Doha. (Read in Arabic)
FAO HQ in Cairo to host International Fund for Agricultural Development (IFAD)
Al Mal | 26 Jan 2015
The Food Agricultural Organization’s (FAO) regional office in Egypt will host the International Fund for Agricultural Development (IFAD) at FAO headquarters in Egypt. FAO representative AbdelSalam Weld Ahmed said that cooperation between FAO and IFAD aims to solidify long-term relations between the two UN organizations, highlighting the organizations’ goals to reduce hunger and poverty in rural areas in North Africa. (Read in Arabic)
Government finalizing plan to create c. 2 mn jobs, 1.6 mn training opportunities
Al Masry Al Youm | 26 Jan 2015
A committee of ministers tasked with addressing unemployment in Egypt announced that it has finalized a plan that will result in the creation of c. 2 million employment opportunities and 1.6 million training slots locally and abroad. Labor Minister Dr. Nahed Ashri says that 750,000 will be trained in 300 crafts and professions, 850,000 will be sent abroad for training on more modern techniques at globally approved industrial standards. The government created 170,000 jobs in 2014 [in state agencies, it appears], of which 70% were filled; the aim is to increase the number of openings by 25% on a yearly basis. (Read in Arabic)
ON YOUR WAY OUT
Egypt exits handball World Cup after 23-16 loss to Germany. (Read in Arabic)
Sky News Arabia and Al Ahram are partnering to provide a wider scope of news programming. The agreement entails that both companies “share knowledge, expertise and build synergies in training, advertising and programming”. (Zawya, Read in Arabic)
In some good news, after a four-month siege and ongoing battle, the Kurds under air support from the US-led coalition, which includes jets and pilots from the UAE, Daesh has been successfully repelled from Kobane. (Read)
BY THE NUMBERS
USD (CBE auction Monday): 7.4301 (+0.05)
USD (parallel market Monday): 7.88 (-0.05 from last Thursday)
EGX30 (Monday): 9,834.81 (-0.65%)
Turnover: EGP 754.1 mn (11% above the 90-day average)
WTI: USD 45.21 (+0.13%)
Brent: USD 48.26 (+0.21%)
TASI: 8,480.1 (+0.7%)
ADX: 4,534.5 (-0.8%)
DFM: 3,723.2 (-3.6%)
KSE: 444.4 (-0.3%)
QE: 11,836.1 (-0.1%)
MSM: 6,644.9 (flat)
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