Tuesday, 24 February 2015
WHAT WE’RE TRACKING TODAY
Central Bank Governor Hisham Ramez rang up Lamees El-Hadidy last night for a quick talk about the availability of USD in the banks, helping thrust into the spotlight complaints about disruptions created by the ongoing campaign to shut down the parallel market for foreign currency (details in Last Night’s Talk Shows, below). The call follows news that new regulations are in the offing that could make it easier for banks to satisfy the USD demands of their clients. That news, Al-Borsa suggests, comes amid rumors that the CBE plans to ease deposit caps on hard currency, which presently stand at USD 10,000 per day and no more than USD 50,000 per month. On another note, Ramez reportedly said yesterday that the CBE has prioritized USD transactions for importers with goods languishing in customs as they were imported before the deposit cap was imposed.
Also now in effect: Requirements that an Egyptian company receiving payment in USD — even by cheque — from another Egyptian company present both an original contract and an original invoice proving a contractual requirement for the payment to be tendered in dollars. We’re told the measures have been on the books — but not enforced — since the first devaluation of the EGP under the Ebeid government back in 2003.
These developments follow word the CBE has decided to allow banks to use 20% of the funds they receive through CBE’s fx auctions and 40% of their total fx liquidity to finance imports of non-essential goods, easing earlier restrictions that forced banks to use their take from the auction to finance priority goods including staples, spares and pharmaceutical products.
On another note: Afreximbank hosts its one-day forum on a USD 500 mn trade finance support program to support Egyptian exports. (Read the release)
WHAT WE’RE TRACKING THIS WEEK
Tomorrow (Wednesday, 25 February) the one-day Egypt Tourism Investment Briefing will take place, hosted by Sahl Hasheesh and Egyptian Resorts Company. Contact information on the official website here if you’re an investor, operator or brand in the sector and want to grab a last-minute invitation
Also tomorrow: The two-day Middle East Congress 2015 begins in London (Jumeirah Carlton Tower), hosted by the Telegraph and sponsored by EFG Hermes. The final list of confirmed speakers is here, with Egyptian participants including EFG Hermes CEO Karim Awad, Qalaa Holdings Chairman Ahmed Heikal, Investment Minister Ashraf Salman, Finance Minister Hani Dimian, Vodafone Egypt ChairmanHatem Dowidar, EFG Hermes Research Head Wael Ziada, EGX chief Mohamed Omran, SODIC MDAhmed Badrawi, AmCham’s Anis Aclimandos, and Abraaj’s Ahmed Badreldin. Ian Gray, Co-Chair of the Egyptian-British Business Council, will also be speaking.
On Thursday: The Central Bank of Egypt’s Monetary Policy Committee meets.
LAST NIGHT’S TALK SHOWS
Lamees El Hadidy challenged the Ministry of Religious Endowment’s recent decision to allow Salafi preachers such as Yasser Borhamy back into the mosques as long as they abide by regulations to steer clear of politics in their sermons. She conducted a phone interview with Deputy Endowments Minister Mohamed Abdel Razek, who tried unsuccessfully to make his case that having salafis preach in mosques under the Ministry’s supervision will help combat extremist thought.
“I find this very ironic. You previously banned the same people for spreading extremist ideology. This is a very critical time, we are heading towards elections and Nour party candidates are competing for seats. This is very strange timing for you to be allowing such a thing to happen,” said El Hadidy.
“This decision has nothing to do with the elections,” said Abel Razek, “it’s just a coincidence.”
“Well, I don’t like coincidences. I am asking the Minister of Religious Endowment to review this important decision. Even if these preachers aren’t going to directly talk about politics there are a lot of indirect messages that are going to be delivered,” said El Hadidy.
El Hadidy also conducted a short telephone interview with Hisham Ramez to address complaints about the lack of availability of dollars in the banks — and lodged a personal complaint to the Central Bank Governor about banks refusing buy dollars from clients.
“There are no limits on the amount of dollars that you can sell to the banks,” said Ramez. “The only limitation that we have is on cash deposits. I will admit that the availability of hard currency has been a problem for importers. We are aware of this and I believe that this week we are starting to see an improvement. We knew that there would be a problem initially and that we would be criticized. This week we have been focusing on clearing food shipments that have been stuck in customs and we will continue to work to make dollars available to those businesses that need it the most.
“The dollars that used to be available in the black market will eventually be available in the banks. It’s the same amount of dollars that has always been in the market. Just give it another two or three weeks and the market will go back to normal,” added Ramez.
El Hadidy hosted a panel of political commentators including George Ishaq and Hafez Abu Saada to discuss the finding by a commission of the Supreme Constitutional Court that the election law is unconstitutional. Ishaq agreed that the current division of constituencies was invalid and that electoral districts must be re-drawn.
“Would you prefer that the elections be postponed to redraw electoral districts? Revising the law could take months. Don’t you see that this will have a huge negative impact on the country and the economy?” said El Hadidy.
“Without a sound and legitimate base, we will never move forward. What good will it do to have elections next month when there will be people appealing and questioning the results?” Ishaq retorted.
Dimian: Energy prices to rise, cigarette tax hike will support spending on healthcare. Finance Minister Hani Dimian led the Sisi administration’s charge yesterday to justify tax rises on domestic and imported cigarettes — and did double duty by responding to questions from across the spectrum on when energy prices would next rise. The short answer on the latter sounds rather like the government’s answer on when we might expect the VAT to be imposed: Energy prices will rise “in the coming period” and there will be no warning of when to prevent hoarding. On the cigarette tax, Dimian noted that the measure could kick as much as EGP 5.5 bn to the state’s coffers, of which EGP 1.7 bn will be earmarked to support state spending on health. Al-Borsa and Al-Ahram have more, while Al-Masry Al-Youm notes that 90 Minutes’ Mohamed Sherdy touched in his interview with the minister on the expected electricity and petrol price hikes (video here).
Meanwhile, the Health Ministry says cigarettes in Egypt are still priced below global norms. The comments came from ministry spokesman Hossam Qawish, Ahram Online reported, who noted that the designation of a portion of cigarette taxes to cover healthcare spending is standard practice the world-over.
Egypt aims to halt gas imports in 2020 -Minister of Petroleum: Egypt aims to wean itself off of LNG imports by 2020, according to oil minister Sherif Ismail yesterday in an interview with Reuters. “We are targeting to stop importing gas with … the completion of developing gas field projects,” Ismail was quoted as saying. He qualified his statement by saying the projection was taking into account that no additional domestic needs would arise to necessitate further imports. Possibly notable for those concerned about the looming summer energy crunch: Ismail says he “expected a floating terminal needed to import LNG to arrive by March and that a second one was expected to arrive by July.”
Orascom sells its remaining stake in Mobinil, Orange invests USD 240 mn: France’s Orange SA bought Orascom Telecom Media and Technology’s (OTMT) 5% stake in Mobinil for USD 240 mn, Bloombergreports. The sale was settled at EGP 280.7 per share, a 73% premium to the stock’s closing price on Sunday with OTMT giving up its voting rights of MT Telecom, Mobinil’s holding company, which amount to almost 29%. The transaction increases Orange’s stake in Mobinil to 99% and follows company’s separation of the African operations into a new entity.
5% increase in car market prices projected -Giza Chamber of Commerce: Car prices are projected to increase by 5% due to the rising value of the USD relative to the pound, according to the Automotive Division in the Giza Chamber of Commerce, as reported by Daily News Egypt. (Read)
Salman: Unified investment law out next week; Abdelnour says postponing House of Reps elections won’t impact Sharm conference: In comments made yesterday, Investment Minister Ashraf Salman reiterated the government’s commitment to passing its long-promised investment law before next month’s investment conference in Sharm. As we noted yesterday, the government appears to have now entirely backed off its earlier promise to hold public consultations on the law. Meanwhile, Trade and Industry Minister Mounir Abdelnour reportedly said yesterday that “whether the elections are held or postponed, it will not affect the Economic Summit.” (Read in Arabic or in English)
Haggling over a renewable future. Investors in renewable energy are pushing the government to agree to contracts allowing for international arbitration if disputes should arise. A source told Al Mal that the government is inclined to refuse this request and would prefer not to commit to paying part of the feed-in-tariff in hard currency. Instead, the government is likely to set the Cairo Regional Centre for International Commercial Arbitration as an arbitrator and wants to calculate the tariff on a USD-basis, but pay in EGP equivalent. (Those of you with an interest in solar power may also want to check out a piece in the FT this morning on how so many European countries now rely on solar that an eclipse of the sun next month could disrupt power grids across the continent.)
Is the potential listing of FIHC legally possible? Questions regarding the legality of the Mahlab government’s plan to list the Food Industries Holding Company (FIHC) on the EGX have arisen, Al-Borsareports. The problems begin with the first article of law 203 on public companies, which states that holding companies must be 100% state-owned, thus technically banning listing on the stock market, the paper says. Also at issue: the corporate governance systems at holding companies, which does not outline a legal way for private investors to be represented on the board of directors.
Pardons, verdicts and upcoming court dates:
PLANET IKHWAN: The political arm of the Egyptian Muslim Brotherhood, the Freedom and Justice Party, claimed on their Facebook page that right-wing American television network FOX News (of all the possible media outlets they could have picked) featured a filmmaking expert who authoritatively concluded that the beheading of 20 Egyptian Christians and one African in Libya was staged. (Read in Arabic)
169 NGOs dissolved for alleged ties with Muslim Brotherhood: Yesterday the Ministry of Social Solidarity announced that 169 NGOs have been disbanded due to alleged links to the outlawed Muslim Brotherhood. Half of the organizations were in Kafr El Sheikh, with the other half in Alexandria. (Read)
Appetite for Turkish investments at Abraaj and Investcorp made the FT this morning after Abraaj snapped up 25 percent of Hepsiburada, the largest online retailer in Turkey, as we reported yesterday. Check out: Two Gulf investment groups target Turkey.
OPEC prepares to call emergency meeting: OPEC head Diezani Alison-Madueke says she will most likely call for an emergency meeting of OPEC sometime in the next month and a half over the price of oil, ahead of the next scheduled meeting in June. (Read)
Tripoli rebels torpedo peace negotiations, insisting on UN sanctions on Egypt before further talks; Libya’s internationally-recognized government in Tobruk rejects national unity government -cites terms amount to total acquiescence:
The Islamist rebels in Tripoli, when they’re not busy accusing the Egyptian government of staging the execution of 20 Egyptian Christians in Libya as a false flag operation, have now called upon the United Nations to sanction Egypt for the alleged killing of civilians in the Daesh-controlled city of Derna following Egyptian air strikes. The Islamist rebels have put the practically impossible condition of the sanctions as a pretext for abandoning talks, which Western and Gulf Arab powers had insisted was the only way forward despite Egypt’s call for supporting Libya’s legitimate government. The internationally-recognized government in Tobruk, meanwhile, has also rejected unity talks, saying that the terms they were given would include the eventual suspension, or “freezing” – as they put it – of the elected parliament and the sidelining of General Haftar. (Read) Readers can find more on Libya in our second-to-last section on Regional news.
Blackstone raises USD 4.5 bn for energy fund: The WSJ blog reports that Blackstone Group has raised over USD 4.5 bn for a second energy fund in order to take advantage of the weakened position of companies battered by falling oil prices. (Read)
Three international stories worth checking today:
SPOTLIGHT: ITALIAN TRADE DELEGATION
President El-Sisi to Italian business delegation: Egypt’s economy is on the right-track. President Abdelfattah El Sisi addressed the visiting Italian trade delegation yesterday, joined by Ambassador to Egypt Maurizio Massari, Italian Deputy Minister of Economic Development Carlo Calenda, Minister of Investment Ashraf Salman and Minister of Trade and Industry Mounir Fakhry Abdel Nour. El-Sisi reviewed some of the projects that will be presented at the upcoming investment summit along with progress on various economic reforms aimed at improving the investment climate. He cited the World Bank’s five-year forecast for the country’s economy, which projects an expansion of 3.1% in 2015. This rate is expected to increase on a yearly basis, reaching 7.5% by 2020. The President also noted the upward revision of Egypt’s credit rating. (Read in Arabic)
Minister of Industry and Trade: Italian investments in Egypt stand at USD 2 bn, more needed:Minister of Industry and Commerce, Mounir Fakhry Abdel Nour stressed the importance of Italian investments to Egypt’s economy, adding that total investments in the country stood at USD 2 bn. Even so, the minister believed there remains an abundance of opportunities for Italian companies in Egypt. Abdel Nour concluded his statement by encouraging the Italian business executive in attendance to participate in next month’s investment summit. (Read in Arabic)
Italy supports Egypt’s fight against terrorism: Italian deputy prime minister: Italian Deputy Minister of Economic Development Carlo Calenda voiced his strong support for Egypt’s air strikes on Daesh targets in Libya, stating that the country had every right to defend itself. While adding that Italy was committed to assisting Egypt with its fight against terror, the deputy prime minister refrained from providing details as to the type of support Italy would provide. On a related note, Italian companies are expected to have a strong presence in next month’s investment summit. (Read in Arabic)
SPOTLIGHT: SHARM CONFERENCE
In news with political significance far beyond its economic impact, Ethiopia’s ambassador to Cairo has confirmed his nation will attend the Egypt Economic Development Conference in Sharm El-Sheikh next month, Al-Masry Al-Youm reports. The development is the latest development in Egypt’s re-engagement with the Nile Basin countries amid an ongoing dispute over Addis Ababa’s planned Grand Ethiopian Renaissance Dam.
Siemens to increase investments in Egypt, will attend Sharm: Following a meeting with the regional manager of Siemens and the electricity minister, PM Ibrahim Mahlab issued a statement saying Siemens plans to increase its investments in Egypt. The company is actively engaged in Egypt and is operating a major role of the government’s emergency electricity plan. Mahlab also noted that Siemens will be attending the Sharm economic summit in March, AMAY reports.
EFG’s Awad: investment summit is a golden opportunity for Egypt’s economy: EFG Hermes is promoting a number of large-scale projects in renewable energies, manufacturing and real estate to foreign investors, said Awad, but perhaps the most important development is that the conference will open new lines of communication between Egyptian government officials and leading business executives. (Read in Arabic)
Sharm conference’s success or failure will only become clear after four years: Gamal Garhy, President of the Chamber of Metallurgical Industries, stated that the general public and government will have to wait at least four years before assessing the success of the investment summit. That said, Garhy’s positive interactions with Lebanese business executives in Beirut suggested that the investment summit has in fact caught the attention of foreign investors. Even so, the businessman worries that Egyptian media may be falsely raising the public’s expectation with regards to the summit and its impact on the country’s economy. (Read in Arabic)
WORTH READING + WATCHING
Egypt analyst Samuel Tadros of the Hudson Institute has completed the first part of his two-year study of Islamists in Egypt, releasing his monograph ‘Mapping Egyptian Islamism’ in late December of last year. “The report profiles 128 currents, groups, and individuals. In each case, the general current or group is profiled first followed by individual profiles of the most important Sheikhs.” Although Tadros’ work was not compiled with the purpose of combatting political Islam, it does outline some useful points to consider when addressing the issue.
The report helps illustrate that Islamism is first and foremost a political movement without a well-thought out religious ideology in place. This segues into the second main point, which is that Islamists’ lack of regard for a central authority such as the Azhar really does lead to a situation where anyone with a sufficiently effective means of reaching an audience, such as Qaradawi, may end up with powerful influence. At times, the ability of the media to project Salafi influence, for example, was stumbled upon through purely financial motives, and eventually took on a life of its own:
“During the second half of the 2000s, Egyptian TV viewers began noticing a new channel on their satellites, Al Nas (The People). When it started in January 2006, Al Nas was not that distinguishable from tens of other Arab satellite channels playing music and hosting dream interpreters. One year later, the channel’s orientation abruptly shifted to an Islamic channel hosting Salafi Sheikhs. The owner, a Saudi businessman, had apparently realized that the Islamic orientation would become more profitable. He was not mistaken. Al Nas became an instant hit. Instead of attending sermons in mosques or buying cassette-tapes for Sheikhs, the stars of Egyptian Salafis were suddenly in your living room. With TV programs for Salafi stars such as Sheikhs Abu Ishaq El Howeiny, Mohamed Hussein Yacoub, Mohamed Hassan, Hazem Salah Abu Ismail, and Wagdi Ghoneim, Al Nas was soon one of the most watched TV channels in Egypt. The delighted businessman had to adhere to the Salafi Sheikhs’ demands. Not only were female presenters fired, but they soon objected to non-Salafi presenters such as Amr Khaled. “
While the report itself is a little on the long side at 107 pages not including the bibliography, it reads very quickly and is essential reading for understanding one of the main components of Egypt’s past, present and future political scene. Download the full report as a pdf here.
Samuel Tadros, along with other pre-eminent Egypt analysts such as Eric Trager and Mokhtar Awad, presented a talk at the Hudson Institute to present the monograph’s release last December. While the talk is rather lengthy, coming in just under one and a half hours, some notable segments are provided below, followed by the link to the entire talk at the end of this section.
Eric Trager reveals that the Brotherhood are actively recruiting new members inside Egypt’s prisons. (Watch, running time: 1 minute)
Mokhtar Awad, researcher at the Center for American Progress, manages to offer reasons to be both hopeful and pessimistic with regard to the rise and fall of political Islam in Egypt and the Arab world. A case for optimism can be made, as Awad contests the notion that political Islam represents the future of the region, given that he asserts that they have no idea what they actually want or where they’re going. He cautions however, that newer, younger voices are rising up in political Islamist movements, and that given the aforementioned lack of deference to a central authority, do not feel beholden to past organizing principles, such as nonviolence. Awad notes how newer movements have no qualms about merging Islamism with socialism and violence as a tactic. (Watch, running time: 14 minutes)
WORTH WATCHING: ANIMATED SHORT COMEDIES
MAN, by Steve Cutts. Music: In the Hall of the Mountain King by Edvard Grieg. (Watch, running time: 3:36)
The 3D animated short Johnny Express by South Korean animation studio AlfredImageworks could give Pixar a run for their money. While some elements of the short film are reminiscent of the Futurama episode Godfellas, the story is definitely, distinct. (Watch, running time: 5:26)
The Egyptian diplomatic mission to Yemen returned to Cairo due to the deteriorating security situation in Sana’a, MENA state agency reported according to Ahram Online. The Embassy of Egypt in Sana’a shut down following the mission’s departure.
EGYPT IN THE NEWS
News on Egypt overnight and into this morning was dominated by news that prominent activist Alaa Abdel Fattah and 24 other activists had been handed jail sentences and heavy fines, as we noted above.
The other winning significant coverage: both Human Rights Watch and Amnesty International are accusing Egypt of having killed seven civilians in its recent air strikes on the Daesh-controlled city of Derna in Libya, according to the AP. While Amnesty has no mention of this statement on their website, and the article gives no indication of what evidence Amnesty was able to collect in Derna the statement issued by Human Rights Watch relies on an email sent to them by an individual claiming to live in Derna. The hospital which the individual identified as having received the civilian casualties could not be reached by HRW to verify the claim. Since the release of their report almost a week ago, HRW have published no further updates on the matter. Both Amnesty and Human Rights Watch urge Egypt to investigate the claims of civilian deaths.
ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM
The Ministry of Electricity signs contract to expand El Tebbin’s transformers
Al Borsa | 23 Feb 2015
The Ministry of Electricity announced the signing of a contract to expand the transformers at the El Tebbin power station. The project, which will cost EGP 49 mn, is expected to be completed in 15 months and comes as part of the government’s drive to improve the efficiency of domestic electricity transmission. The European Investment Bank will finance the project. (Read in Arabic)
SkyPower ready to build a 3,000 MW renewable energy project over the next five years
Amwal Al Ghad | 23 Feb 2015
Representatives from SkyPower met with Prime Minister Ibrahim Mahlab and the Minister of Electricity today to discuss potential projects in Egypt. SkyPower noted its willingness to engage in a five-year project building a renewable energy power stations with a total capacity of 3,000 MW. SkyPower also said it was willing to provide training to workers in the renewable energy sector. (Read in Arabic)
OIL & GAS
Petroceltic set for decisive vote on Wednesday
Irish Independent | 22 Feb 2015
Petroceltic shareholders are expected to vote on series of measures in an extraordinary general meeting called for by Swiss investment firm Worldview, an activist shareholder holding a 29% stake and seeking to unseat the current CEO, Brian O’Cathain. The motions are set to be voted down as O’Cathain is being backed by the company’s chairman, who owns a 19.2% stake, along with other shareholders. Besides the ousting of O’Cathain, Worldview is seeking a more aggressive expansion strategy for the company, which has significant investments in Egypt, and to seat two new directors on to the board, proposals described by the current CEO as ludicrous. Worldview says that Petroceltic hasn’t been developing a gas project in Algeria fast enough, and that assets in Egypt are being mismanaged. (Read here and here)
MIDOR produces 30% of the refined butane gas in Egypt
Al Mal | 22 Feb 2015
MIDOR refineries produce 30% of the country’s butane gas, according to a source at EGPC. The total production capacity at MIDOR currently stands at 500 tons per day and is set to increase by 60% once the expansion plans are complete. The source told Al Mal that MIDOR is yet to secure a financing agreement to cover its expansion project. (Read in Arabic)
Tanmia Petroleum records a net profit of EGP 35 mn in 2014
Al Borsa | 22 Feb 2015
Tanmia Petroleum’s net profits grew to EGP 35 mn in 2014 from EGP 11 mn a year earlier. The company is looking to expand from oilfield services and is looking for contracts to develop mature wells. Tanmia owns three rigs that it is currently renting to other operators and is looking to add a fourth one. (Read in Arabic)
Palm Hills to invest EGP 2 bn in 2015
Al Borsa | 23 Feb 2015
Palm Hills Developments will invest EGP 2 bn in 2015, according to the Co-CEO Tarek Abdel Rahman. The investments will go towards financing expansions in Cairo and the North Coast as part of its expansion plan and will come from the company’s capital increase as well as 2014’s profits. (Read in Arabic)
Arabtec to begin working on housing project by mid-year, assessing contractors now
Trade Arabia | 23 Feb 2015
Arabtec will begin implementing the million units’ project by mid-year, after the March investment conference. The company is currently finalising the list the contractors who will be used in implementing the project and the chosen contractors are expected to be announced after the economic summit. The first phase of the project entails the construction of 120 thousand units in El Obour City, Badr City, and New Minya City. (Read)
Abraj Misr to start work on EGP 4.5bn ‘The Gate’ residential project in April 2015
Daily News Egypt | 23 Feb 2015
Abraj Misr announced that it will develop its environmentally-friendly residential project ‘The Gate,’ situated in the Heliopolis suburb on Al-Nozha street on a 35,000 sqm plot of land. The project will be developed at a cost of EGP 4.5 bn and will be self-financed – 20% of the cost will be covered by purchaser’s reservations. The project is set to begin in April 2015. (Read)
Egypt to develop EGP 150 bn mixed-use project in 6 October city: ‘October Oasis’ to be presented at investment summit
Daily News Egypt | 23 Feb 2015
The Ministry of Housing will present a 10,000 acre mixed-use housing project in 6 October city named ‘October Oasis’ at the March investment summit, according to housing minister Mostafa Madbouly as reported by Daily News Egypt. This will be largest housing project announced at the summit, and is set to be situated near the ring road and Fayoum road, and will be built at an estimated cost of EGP 150 bn. NUCA will also offer an additional four plots of land in a closed tender public bidding for locations in Sheikh Zayed. (Read)
NTRA asks TE to make MSAN cabinets’ replacement plans available within six months
Al Borsa | 22 Feb 2015
The National Telecom Regulatory Authority (NTRA) has asked Telecom Egypt (TE) to provide its plans to replace and install the MSAN cabinets within the next six months. NTRA said it understands TE’s rights to refurbish its networks, but also bears in mind the consumers’ right to an uninterrupted service and so insists on not having TE begin the replacement until obtaining NTRA approval. NTRA is also asking TE to reassess its procedures in replacing the MSAN cabinets and to ensure that users’ telephone numbers are not changed after the replacement. (Read in Arabic)
BANKING & FINANCE
NBE considers increasing financing to the real-estate sector by EGP 600 mn
Al Mal | 23 Feb 2015
The National Bank of Egypt is considering increasing funding to the real estate sector by EGP 600 mn as part of the banks plan to increase midcap loans by about 10% annually. Currently 10 real estate companies are vying for NBE loans, according to the bank. NBE is seeking to increase its loan portfolio by EGP 536 mn to EGP 10.1 bn during this fiscal year. (Read in Arabic)
OTHER BUSINESS NEWS OF NOTE
IKEA records sales in Egypt of over EGP 700 mn in 2014
Al Mal | 23 Feb 2015
IKEA managed to reach its target of recording over EGP 700 mn in sales in Egypt last year, according to Ali Hosny, IKEA’s Regional Catalogue Manager. IKEA received around four million customers in 2014, but the store operators said they do not have any immediate expansion plans as they are still getting to know the Egyptian market. At the moment, IKEA’s next step regionally is to open a new store in Oman, Hosny said. (Read in Arabic)
EGYPT POLITICS + ECONOMICS
FEI calls for VAT to be capped at 10%
Al Shorouk | 22 Feb 2015
Members of the Federation of Egyptian Industries (FEI) met with the finance minister to voice some of the private sector’s concerns to the government. The FEI called for the VAT, which is set to replace the sales tax sometime this year, to be capped at 10% noting that a higher rate will not necessarily increased the government’s revenues. The FEI also suggested implementing a more efficient customs system as well as created a committee independent of the finance ministry to look into tax disputes. (Read in Arabic)
Ministry of Social Solidarity disbands 169 Muslim Brotherhood-affiliated NGOs
Al Ahram | 23 Feb 2015
The Ministry of Social Solidarity issued a decree disbanding 169 NGOs that were deemed to be affiliated with Muslim Brotherhood. This is a direct application of a court order that banned the banned the Brotherhood. All of the assets of the disbanded NGOs will seized and added to the ministry’s NGO support fund. (Read in Arabic)
Morocco plans USD 780 mn in domestic rail investment in 2015
International Railway Journal | 23 Feb 2015
The Moroccan National Railways approved a capital budget of USD 780 mn for this on 19 February. More than half of the budget will go toward the 200km Tangiers – Kenitra high-speed line, which is currently under construction, and the remainder will be used for construction of a third track on the Kenitra – Casablanca line, track doubling on the Settat – Marrakech line, station modernization, refurbishment of existing rolling stock and acquisition of new trains, and improvements to safety and security. (Read)
Algerian President Bouteflika receives UN Envoy for Western Sahara
Algeria Press Service | 22 Feb 2015
President Abdelaziz Bouteflika received on Sunday the UN Envoy for Western Sahara Christopher Ross, who previously served as the U.S. Ambassador to Algeria. The meeting was attended by Algerian Minister of Foreign Affairs Ramtane Lamamra and Minister for Maghreb and African Affairs Abdelkader Messahel. (Read)
Internationally-recognized Libyan government to exclude Turkish firms from contracts
Reuters | 23 Feb 2015
Libya’s internationally recognized government has said it will end all contracts with companies from Turkey. The government of Prime Minister Abdullah al-Thinni did not go into details regarding its reasoning for the decision, posted on a cabinet website late on Sunday. “The council of ministers … decided to review all contracts with foreign companies in all areas and exclude Turkish firms from operating in Libya,” according to the statement. (Read)
Zueitina port, under control of the internationally-recognized government, resumes oil exports
Reuters | 22 Feb 2015
Libya has resumed oil exports from the eastern port of Zueitina after operations came to a halt almost one year ago. A pipeline connecting the country’s largest oilfied Sarir to Hariga oilfield is also being testing. The proceeds from the oil exports are set to go to the central bank which has sought to stay out of the conflict, despite both the Tripoli and Tobruk governments claiming that central bank officials in their respective cities are in control of the bank, with the officials themselves avoiding comment. (Read in Reuters on the resumption of oil exports and central bank officials’ attempts to stay neutral in the AP)
Egypt, Tunisia, and Algeria to cooperate on securing Libyan borders
Al Masry Al Youm | 23 Feb 2015
Egypt, Tunisia, and Algeria have agreed to increase cooperation on their efforts to secure Libya’s porous borders, according to an unnamed high-ranking Algerian military official. According to the source, the agreement was reached during a security meeting, attended by military officials from each of the countries, in Cairo. The Egyptian, Algerian, and Tunisian government have yet to release any official statements confirming that the meeting took place. (Read in Arabic)
ON YOUR WAY OUT
WHO approves 15-minute Ebola test: The World Health Organization announced on Friday that it has approved the use of a 15-minute Ebola test developed by U.S. firm Corgenix Medical Corp. The test does not require electricity and can give results within 15 minutes, which should help doctors in the field assist patients in underprivileged areas, where the disease is most rampant. (Read)
Sharqia LPG cylinder “crisis” looks to be temporary: Disruption in the supply chain due to poor weather over the weekend and hoarding by brickmakers and poultry farmers contributed to a shortage of subsidized LPG cylinders in the governorate, Al-Borsa reports. In related news: The Cabinet Economic Committee headed by Prime Minister Ibrahim Mahlab agreed to begin distributing LPG cylinders via the smart card system, Al-Ahram reports.
BY THE NUMBERS
USD CBE auction (Monday, 23 Feb): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Monday, 23 Feb): 7.77 as quoted by our trader, 7.65 quoted to Reuters (+0.08 / -0.04, respectively, from Sunday, 22 Feb)
EGX30 (Monday): 9,601.14 (+1.12%)
Turnover: EGP 623.7 mn (9% below the 90-day average)
WTI: USD 49.48 (+0.06%)
Brent: USD 59.13 (+0.39%)
TASI: 9,234.3 (-0.7%)
ADX: 4,630.4 (-0.4%)
DFM: 3,832.2 (-0.2%)
KSE Weighted Index: 457.6 (+0.9%)
QE: 12,549.3 (+0.2%%)
MSM: 6,619.8 (-0.2%)
Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.
Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID: 553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.