Gov’t caves on capital gains tax. 3 drop out of bidding for Citi’s EGY retail arm. U.S. companies eye Egypt healthcare opportunities. ERC to fast-track Sawari. Morocco’s SAHAM buys stake in Alex’s Hassab Labs. Bloomberg profiles Olayan sisters.

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WHAT WE’RE TRACKING TODAY

Today is the second day of a three-day heatwave, with temperatures forecast to hit a high of 39C in the capital city.

WHAT WE’RE TRACKING THIS WEEK

Tuesday marks the last episode with announced guests for the Late Show with David Letterman, (Bill Murray and musical guest Bob Dylan) with Wednesday being the final episode which is set to be a look back at the show’s history.

Also On Wednesday, 20 May: Arabian Cement Company will hold its 1Q 2015 results call at 3:00pm CLT, while Sodic will hold its results call for the same period starting thirty minutes later at 3:30pm CLT. TheForum on Egyptian-German relations will take place at SIS Headquarters, Nasr City. 7-10:00pm CLT.

This weekend (Friday and Saturday, 22-23 May) the Egypreneur Forum takes place at Nile University, Cairo. Register online here.

LAST NIGHT’S TALK SHOWS

Lamees El Hadidy hosted EGX Chairman Mohamed Omran, who celebrated the effective scrapping of the capital gains tax and resultant rebound of the EGX 30, which climbed 6.5% yesterday after news broke that the implementation of the tax would be put on hold for two years.

“Flexibility is important. If we find that certain policies are negatively impacting the market they should be revisited. Circumstances change and we must have the ability to react accordingly,” said El Hadidy. She congratulated Omran, who was clearly pleased with himself.

“There is no doubt that the suspension of the capital gains tax will have a positive effect on the market, but that is not the only thing that is making me happy. The manner in which this decision was made also sends very positive signals. The government is listening to investors. They are to be commended for their bravery and responsiveness to market conditions,” said Omran.

“People are saying that this decision was the result of very strong lobbying and that you put a tremendous amount of pressure put on the government,” said El Hadidy.

Omran sidestepped the question, simply stating that given the current environment, the government really had no choice. “With the opening up of regional markets, namely Saudi Arabia, we would not have been able to compete had this tax been implemented. In 2014, we were the second-best performing market in the world. In 2015, we are the second-worst performing market.”

El Hadidy also hosted Mahmoud Abdellatif, the veteran banker and now Executive Director of the Tahya Misr Fund, who spoke about the management of the Fund and projects to rehabilitate informal settlements and eradicate Hepatitis C.

“We are looking to maximize impact with all our projects. Making progress on Egypt’s informal settlements is a huge priority for us. We have already started relocating people but we are well aware that if we don’t properly develop the new areas that we are moving them to they will eventually turn into informal settlements. Its about much more than just making new buildings. We are making sure that there will be proper services, transportation, green areas, and healthcare facilities,” said Abdellatif.

El Hadidy aired footage of the informal settlement of Ezzbet El Assal in Shobra, where progress has already been made. Abdellatif announced that Tahya Misr will soon be launching a media campaign to raise more funds before and during the month of Ramadan.

Youssef El Houssieny was astonished by statements from Abdel Moneim Aboul Fotouh’s Strong Egypt Party condemning the recent death sentences against Morsi and members of the Ikhwan. “How can an Egyptian political party that claims to be respectable and nationalist condemn capital punishment for terrorists and murderers. Aboul Fotouh wants to be the new Morshed, I’m certain of it. It’s his dream,” saidEl Housseiny. “And the 6 April movement is not much better. Their statements are copy-and-pasted from Ikhwan and the Strong Egypt party.”

SPOTLIGHT: Capital gains tax scrapped

The EGX posted its sharpest gain in the past 24 months as the 10% tax on capital gains was put on hold for two years on Monday following backlash from investors. Cabinet’s economic group made the decision at an extraordinary meeting on Sunday night, but opted to let the 10% tax on dividends remain in place.Reuters says the policy change was a surprise “after the finance minister told reporters last month that the government would amend the payment method.” Moreover, Investment Minister Ashraf Salman had made a similar suggestion at this year’s EFG Hermes One-on-One. The decision to delay the implementation of the tax, which will be assessed during this week’s cabinet meeting, shows the government’s commitment towards fostering an attractive investment environment and acknowledges the EGX’s role in the economy, said bourse chairman Mohamed Omran. Prime Minister Ibrahim Mahlab, who rang the EGX’s opening bell on Monday, agreed, reiterating his cabinet’s commitment to the stock market and to economic reform. An unnamed source denied that Finance Minister Hany Dimian expressed his displeasure with Omran to the presidency, following recent rumors of a rift between Dimian and the EGX chief. The EGX gained 6.5% by the closing bell on Monday.

The news was greeted with jubilation by traders. Al Borsa quoted Beltone MD Ahmed Salim as saying the move underscored Cabinet’s willingness to be receptive and flexible while “learning from past mistakes.” Salim added that he now expects the CBE to be more lax on regulating flow of foreign currency as the liquidity levels stabilize.

The FT’s Heba Saleh quotes EFG Hermes Securities Brokerage chief Mohamed Ebeid and Beltone’s Maged Shawky in a piece that’s getting front-page play this morning. The WSJ’s coverage is here and here, for those so inclined.

Not everyone is celebrating: Al Borsa also reports that economists from the Egyptian Center for Economic Studies claim the move may drive speculation on property, fueling inflation in the real estate sector. However, the Center did also say this side effect, and any losses incurred in tax revenues due the postponement or cancellation of the law, will be offset by a major projected increase in investments. In a lengthy op-ed in Al Mal, Sherif Omar what he says is a trend of the government imposing unpopular taxes, only to later retreat. He cites the capital gains tax, wealth surtax and real estate taxes as examples of how the government failed to enforce a hard line on taxation. The long-term consequences will be significant, he says.

<RANT>We don’t know Sherif Omar, but Enterprise is down with anyone who shares our lack of enthusiasm for yesterday’s decision. Far from sending “positive signals” (cf: Omran, Mohamed) or being worthy of sycophantic back-slapping (cf: El Hadidiy, Lamees), scrapping the tax proves once more that if you have a shiny red number such as an index to which you can point and whine like a petulant toddler, you’ll eventually get your way. No, we’re not of the tax-and-spend set. (Though a bit of stimulus spending to repair a few more roadways would surely be welcome. One shouldn’t have to worry whether one’s SUV will be swallowed whole by a pothole.) In fact, we were against the bloody tax in the first place. But we do think that governments are in place to make tough decisions, and that the current Council of Ministers has just suggested it is unwilling to stay the course in the face of self-interested lobbies. What’s more, their decision to scrap a capital gains tax while leaving in place a levy on dividends rewards the speculation of day-trading retail investors whose contribution to the real economy is zero while limiting upside for entrepreneurs and business owners who create jobs and meaningful growth. The capital gains tax was flawed in principle and an administrative nightmare in its enforcement — a measure mis-handled from cradle to grave.</RANT>

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SPEED ROUND

The NTRA is backing a government push to reduce the cost of going online, CIT Minister Khaled Negm said yesterday. Al Mal reports that the NTRA will now discuss price cuts with ISPs within a few days, without providing further details. The CIT Ministry has a target of extending high-speed internet to 1.5 mn new customers within the next 18 months, suggesting the price cuts will be on entry-level packages.

Three bidders have dropped out of the contest for Citigroup’s Egyptian retail operations,Reuters reports. At least three banks are thought to be interested: Emirates NBD, ADIB, and CIB, with the latter having issued regulatory disclosures confirming its interest. “Mashreq, another UAE bank, and Bank Audi, a Lebanese lender, have withdrawn from the bidding,” the newswire reports, explaining that “Citigroup is one of the few banks in Egypt with authorisation to distribute offshore mutual funds in the country. Any buyer without such a licence would need central bank approval for that activity, one of the sources said, though a second source said the issue was ‘not a deal breaker’.”

Egypt seeks expansion of QIZ trade agreement: Egypt is looking to make more governorates and products eligible for inclusion under the qualified industrial zones (QIZ) trade program, Trade and Industry Minister Mounir Fakhry Abdelnour said on Monday. Abdelnour’s remarks came as he was hosting a US business delegation headed by Deputy Undersecretary of Commerce for International Trade Ken Hyatt, as reported by Ahram Online. The QIZ program allows some manufactured products with both Israeli and Egyptian components to be sold in the United States without import duties. (Read) Egypt’s QIZ exports to the United States amounted to USD 1.4 bn in 2014, with ready-made-garments comprising USD 1.1 bn of the total, per Al-Mal.

Six U.S. healthcare companies may invest in Egypt, following their visits as members of the above-mentioned trade delegation, The Cairo Post reports. “We have had many very positive conversations on this visit,” said Deputy Undersecretary Ken Hyatt, in the U.S. Department of Commerce. “The U.S. companies with me on this trip understand the potential of the Egyptian market, and I expect that our visit will lead to new business and investment opportunities between the U.S. and Egypt.”

Speaking of healthcare: Alexandria’s Hassab Labs has partnered with Morocco’s SAHAM Group to capture a slice of Africa’s burgeoning healthcare market, according to a profile in the latest Endeavor newsletter. SAHAM has acquired a majority stake in Hassab Labs with the aim of taking the medical diagnostics company to Morocco and three other regional countries by the end of this year. Hassab has 30 labs in Egypt, making it significantly smaller than the recently IPO’ed IDH and looks set to expand westward across Africa while IDH (a lash-up of Al-Borg and Al-Mokhtabar labs created by Abraaj with four central labs and some 300 points of presence) has focused on growth in Egypt and Sudan.

ERC and Orascom will fast-track development of Sawari after getting TDA green light: The Tourism Development Authority (TDA) approved Egyptian Resort Company’s request to redefine the boundaries of Phase 2 of its flagship community Sahl Hasheesh, located just outside of Hurghada, according to an emailed release. The approval leaves unchanged ERC’s total Phase 2 allocation area of 6 mn sqm, and authorizes a 391,000-sqm land swap that will permit ERC and its partner Orascom Development and Management to begin work on the first phase of Sawari, a yacht club and marina with room for more than 330 boats and yachts. Said ERC CEO Mohamed Kamel said TDA approval as “for several years now [been] the sole remaining obstacle to our launch of Sawari. The timing is particularly fortuitous: After years of sustained weakness beginning in January 2011, we are now seeing a significant return of appetite for second homes.” (The release, including full project details, is here in pdf)

Arabian Cement Company released 1Q2015 standalone results on Monday, posting a net operating profit of EGP 136 mn, down from a net operating profit of EGP 180 mn from the same period last year. Revenues climbed 11% to EGP 585 mn on market share gains, with gains eroded by higher costs, particularly energy and energy-related.

GB Auto to begin work on factory + assembly facility in 2H2015: GB Auto will begin construction of its tire factory in Oman and a motorcycle and tuk-tuk assembly plant in Suez in the second half of this year following completion of its EGP 958.6 mn capital increase, says Al-Mal, citing AVP Corporate Finance Hoda Yehia. The tire plant will demand capex in the neighborhood of EGP 1.8 bn, while the motorcycle and three-wheeler assembly facility will requires a total investment of USD 50 mn, the newspaper says. GB is also in the process of establishing a microfinance subsidiary. In related news, the Chamber of Engineering Industry is calling on Trade and Industry Minister Mounir Abdelnour to formally legalize tuk-tuks, saying owners should be allowed to register and license them as any other motorized vehicle. Three-wheelers are assembled to specific technical standards, the chamber said, and should be allowed to ply specific routes and operate in defined areas, Amwal Al-Ghad reports.

President Abdelfattah El Sisi held a meeting with the Minister of Environment Khaled Fahmy on Sunday with regards to the impact of the Suez expansion project, according to an emailed statement from Ittihadiya, where the environment minister commented on the potential impacts of the expansion of the Suez canal on marine biology. The minister is quoted as saying, that the migration of marine species is unavoidable and is caused by a number of factors, including climate change and the natural movement of the tides. Further, he argued that the canal expansion will actually have environmental benefits by reducing container ship waiting times.

The Wall Street Journal’s Tamer El-Ghobashy has a lengthy take this morning on President Abdel Fattah El Sisi’s international image, headlined ‘Egypt’s Leader Reinvents Himself as Bulwark Against Terrorism‘. The lede: “The specter of an expanding Islamic State has alarmed leaders across the Middle East. But for Egyptian President Abdel Fattah Al Sisi, that threat has become an opportunity to transform himself from an international outcast to an ally in the regional war against terrorism.”

CAPMAS re-launched their website on Monday. We’re still trying to figure out our way around it, but it looks more usable than the abyss that was their older one. There does not seem to be an English version yet, but you can check out the Arabic page here.

BG merger could cost Shell huge Kazakhstan oil field: “In the event of a change in BG’s ownership … the Kazakhstan government may claim it has the right to buy out a BG stake in a natural-gas field called Karachaganak … [that] accounted for about 15% of BG’s total production volume and 9% of its USD 19 bn in revenue in 2014.” (Read in MarketWatch)

BBC journalist Mark Lobel details his account of his harrowing arrest in the world’s bastion of media freedoms and worker’s rights, otherwise known as Qatar. Lobel was in the country investigating the country’s unabashed use of slave and near-slave labor in its single-minded quest to build disposable stadiums ahead of the 2022 World Cup. (Read)

Saudi-led coalition air strikes resumed against rebel Houthi positions in Yemen resumed after a five-day ceasefire expired on Sunday night. The conflict has led to the deaths of 1,820 and the displacement of 545,719 in just under a month and a half, according to figures from the UN. (Read)

The Olayan sisters are among the wealthiest people in Saudi Arabia, Bloomberg tells us in a profile story published yesterday. While opening with an entirely predictable lede (“In her Saudi Arabia homeland, Lubna Olayan can’t drive, show her hair in public or leave the country without her husband’s permission. She can, however, run one of the nation’s biggest conglomerates.”), the piece is a great introduction to on of the most compelling business families in the Middle East. The piece, complete with “I-wish-I-was-BuzzFeed” headline, is here: This Saudi Bn’aire Can Run a Business But Not Drive.

So, ‘Brexit’ is a thing: Hot on the heels of Grexit comes Brexit as the FT tells us that Deutsche Bank has warned that it will relocate “chunks of its large British operations to Germany” of the Brits should vote to leave the European Union in a referendum due to take place within the next two years.

CORRECTIONS: There was a nonfunctioning link in our Calendar yesterday under the entry for the Second Annual Energy Conference Energy and Future of Investment in Egypt, set to take place on 25 May. The correct link may be found here.

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A MESSAGE FROM PHAROS HOLDING

Pharos reiterates ‘sell’ recommendation for Juhayna

Juhayna Food Industries reported a significant surge in net income this quarter, which was 51% higher than 1Q14 and 96% higher q-o-q. The jump was mainly on the back of the depletion of the company’s high-cost powdered milk inventory, which it had accumulated during 2013 and early 2014, when international powder milk prices had increased exponentially.

Despite this recovery, Pharos Research slashed its FV estimate for the stock and reiterated its recommendation to sell. Click here to find out why.
***

WORTH WATCHING

Mad Men’s series finale aired on Sunday. In commemoration of the ending of the show, we present one of the more memorable scenes from the series, from the 13th episode of the first season: Mad Men – The Carousel. (Watch, running time: 3:26) Roger Sterling’s brush with acid in Season 5 is also worth a nod, (Watch, running time: 3:57)

DIPLOMACY

The preliminary death sentence against Morsi was broached in the first U.S. State Department briefing since the verdict was announced on Saturday, in questions fielded by the Director of the State Department’s Press Office Jeff Rathke:

QUESTION: Since this is a preliminary sentence, which was going to be my next question, what’s the threat to Egypt if they actually go forward, confirm this sentence, and then hang or otherwise kill the former president?

MR RATHKE: Well, I’m not going to make a prediction about that. We have made our views and we continue to make our views clear to the Egyptian Government. We believe that all Egyptians, regardless of their political affiliation, are entitled to equal and fair treatment before the law. That includes full respect for their rights to due process, and we remain opposed to politicized arrests and detentions.

QUESTION: So you can’t spell out any possible repercussion to Egypt if they —

MR RATHKE: Well, I’m not going to spell out in advance —

QUESTION: — if they flagrantly ignore what you just said and do what you just said was so unjust – in your words?

MR RATHKE: Well, what I also said is we continue to have frank, private discussions with the Government of Egypt. I’m not going to —

QUESTION: Yeah. But that’s —

MR RATHKE: I’m not going to —

QUESTION: — that’s not a punishment. Frank discussions is sometimes even a reward for countries that have problems as well with you. So I mean, is that it? If you do this, we’ll have frank discussions?

MR RATHKE: Well, look, I’m not going to spell out in advance what the United States reaction would be to —
(Read)

EGYPT IN THE NEWS

International reaction, mostly in the form of condemnation, continue to pour in following the preliminary death sentence handed to Mohamed Morsi. One notable exception is China, which refused to comment on the ruling on Monday, calling it a domestic affair. (Read)

The New York Times has published its bi-monthly editorial on Egypt on Tuesday, condemning the sentence. The editorial more or less argues that judicial sentences and other state functions should be influenced by those threatening violence. Anyone who feels this is an unfair assessment should read the piece for themselves. (Read In Egypt, Deplorable Death Sentences)

Egypt: For Sisi, executing Morsi has its benefits and drawbacks: Former Israeli ambassador to Egypt Zvi Mazel is quoted by The Jerusalem Post as saying that Egyptian authorities are weighing the pros and cons of executing Morsi. The main consideration motivating them to do so would be to shut down the Ikhwan in Egypt, while the potential cons would be the further fueling of the Islamist insurgency witnessed in Egypt. (Read in The Jerusalem Post)

Middle East turmoil if Egypt’s Mursi executed: Turkish presidency: Reuters has a roundup of international reaction to the verdict, including Erdogan’s spokesperson, who predicts “the Middle East would be thrown into turmoil if Egypt carried out its death sentences.” (Read) Meanwhile, Xinhua reports that Turkish presidency is consulting with “Saudi Arabia, Qatar and other Gulf countries. We are reviewing current mechanisms for international initiatives. We plan to start necessary initiatives soon, to at the UN Human Rights Committee at first hand,” Turkish Presidential spokesperson Ibrahim Kalin said on Monday. (Read)

Turkish newspaper Daily Sabah notes that the leaders of the GCC and the Palestinian Authority have been silent on the Morsi verdict. The article repeatedly emphasizes that the GCC states are ‘tiny,’ including “tiny Qatar,” which the author intimates is silent on the recent ruling as part of the alleged reconciliation between Qatar and Egypt. (Read)

Thobegate: ‘Egypt shuts restaurant after it refused entry to Saudi man in thobe.’ (Read in Saudi Gazette, front page)

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Ministry of Electricity meets with FEI to negotiate “fixed rate” utilities provision
Al Borsa | 18 May 2015
The ministry of electricity will host a meeting next week with the board of the Federation of Egyptian Industry (FEI) to renegotiate utilities prices for heavy industry and manufacturing, specifically, the provision on a fixed minimum payment. According to sources within the ministry, the impetus for the meeting was the large number of complaints this provision has been receiving from factory owners, who are calling for a new payment scheme to be developed and the fixed payment removed. (Read in Arabic)

Infinity solar sets up company to operate plant
Al Mal | 18 May 2015
Infinity Solar Power has set up a new company to construct and operate a 50 MW solar power plant, according to sources within the company. The new company will achieve a capitalization of EGP 16 mn in the coming few days, while work is underway to obtain EGP 26.5 mn in financing connecting the produced power to the national grid. (Read in Arabic)

OIL & GAS

DEA farms out part of West Nile Delta project
DEA press release | 18 May 2015
DEA Deutsche Erdoel AG (DEA) farmed down its stake in the West Nile Delta (WND) project in Egypt to its Joint Venture partner and operator BP in order to better balance its portfolio, according to a press release issued by DEA on Monday. The deal includes the sale of a portion of DEA’s stake in the ongoing Phase 1 development of five tn cubic feet of gas resources. WND will remain the largest project in DEA’s portfolio. The closing of this agreement is subject to approval of the EGPC. (Read)

Government working to bridge the gap between energy supply and demand
Al Ahram | 18 May 2015
The government is currently working to cover the gap between the demand and supply of energy domestically, Oil Minister Sherif Ismail said. This will done through increasing E&P tenders and increasing natural gas production from existing projects. The minister specifically mentioned new production from BP’s Atoll wells and crude output from the Western Desert. The ministry is also refurbishing the country’s pipeline infrastructure and extending natural gas to more households. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

ASCOM to establish Egyptian and Senegalese subsidiaries
Dostor | 18 May 2015
ASEC Mining’s (ASCOM) board of directors approved a plan to establish two subsidiary companies with a combined paid-in capital of USD 217,000. One of the subsidiaries will be based in Egypt, while the other in Senegal. ASCOM Drilling, the Egyptian subsidiary, will provide mineral prospecting and exploration services to companies operating inside and outside of Egypt. The Senegalese subsidiary will offer mineral and ore exploration services to companies in Senegal. (Read in Arabic)

REAL ESTATE & HOUSING

ODH seeking to restructure EGP 3.1 bn in loans
Al Mal | 18 May 2015
Orascom Development and Hotels (ODH) is seeking to restructure loans worth EGP 3.1 bn, according to the company’s CFO. ODH wants to repay the funds over seven years beginning with paying EGP 500 mn with the rest over monthly installments. The restructuring negotiations are expected to be completed by the end of 2Q2015 or the start of the 3Q2015 at the latest. (Read in Arabic)

Investors call on Madbouly to establish a development and investment plan for the new capital city
Al Mal | 18 May 2015
Housing minister, Ibrahim Madbouly announced today that if a legal framework that protects the state and enforces investor obligations is not agreed upon, the ministry plans to reopen the bidding on developing the new capital city. He added that the ministry does not plan to expedite formalizing agreements on the project and will make the validity of bids for the project contingent on immediate implementation, earning the ire of investors. Investors have called on the government to set up a clear development and investment plan for the project, describing the current process as haphazard and confusing. (Read in Arabic)

TOURISM

Three offers to develop Alexandria’s Montazah
Amwal Al Ghad | 17 May 2015
Tourism Minister Khaled Ramy submitted to the PM three offers presented to develop the Montazah royal gardens in Alexandria. The offers were presented to Montazah’s management and a consulting office will be picked to implement the development, according to Amwal Al Ghad. Ramy had also presented the PM a report about the “Masr Orayeba” promotional campaign. (Read in Arabic)

Consortium awarded USD 1.1 bn safari park project -sources
Investing | 17 May 2015
A consortium, comprising both Egyptian and foreign companies, won a housing ministry tender to develop a 1000-acre safari park in 6th of October city. The USD 1.1 bn project will take five years to wrap-up. Members of the winning consortium include Egyptian tourism developer 300 Years History, UK-based Chipperfield Companies Group, Canada’s Maple Leaf, as well as several unnamed Saudi Arabian and Russian investors. The Ministry of Housing will own a 22.36% stake in the project. (Read in Arabic)

Government to allocate nearly EGP 100 mn to help struggling tourism agencies
Al Shorouk | 18 May 2015
The Council of Ministers announced that the government will allocate nearly EGP 100 mn to help struggling tourism companies and agencies through the tourism investment fund. This comes in light of PM Ibrahim Mahlab meeting with tourism Minister Khaled Ramy and the Chairman of the Federation of Chambers of Tourism to discuss ways to improve the tourism industry. (Read in Arabic)

TELECOMS & ICT

SIM cards will only sold at telecom companies’ outlets, NTRA decides
Amwal Al Ghad, Al Masry Al Youm | 18 May 2015
Mobile phone SIM cards will only be sold at telecom operators’ outlets for the next three months, NTRA decided. The ban will be lifted after distributors have a mechanism to ensure complete and unaltered data records are kept. This comes as part of the CIT Ministry’s attempt to ensure complete data records following alerts that fake identification cards were used to buy mobile lines recently. AMAY notes that the three telecom providers are meeting with representatives of the chamber of commerce to discuss implementing the new measures. (Read in Arabic and here)

NTRA considers reimbursing ISPs impacted by cable replacement
Al Borsa | 16 May 2015
NTRA is considering reimbursing ISPs for losses incurred by having the copper cables replaced by optic fibre ones without adequate prior notice from Telecom Egypt. Hisham El Alayly called on ISPs to provide documentation showing how the replacement process affected them negatively. The cable replacement process resulted in internet service disruptions driving some customers to switch to TE Data, Telecom Egypt’s ISP. (Read in Arabic)

BANKING & FINANCE

Competition for EGAS insurance tender intensifies, Al Mal says
Al Mal | 18 May 2015
The competition for EGAS’ insurance tender is intensifying, Al Mal reports. The tender is for an insurance package, which could be worth EGP 20 bn, for all of EGAS’ assets across Egypt. EGAS is set to have picked an insurance provider by July. The policy is expected to protect EGAS from losses resulting from fires, theft, explosions, and other potential threats, but the piece does not mention anything regarding acts of vandalism. (Read in Arabic)

Standard & Poor’s raises its credit rating for NBE, Banque Misr, and CIB to B-
Al Borsa | 18 May 2015
Ratings agency Standard & Poor’s raises its credit rating for National Bank of Egypt (NBE), Banque Misr, and CIB to B- from CCC+. The agency stated that this upgrade came as a result of significant reforms in policy and the macroeconomic climate of the country after the stabilizing of the political situation. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Presentation Sports wins Ahly SC broadcast rights with EGP 120 mn bid
FilGoal | 18 May 2015
Presentation Sports was awarded the right to broadcast Ahly SC’s football matches for the upcoming three Egyptian Premier League seasons. As per the terms of the proposal, Presentation Sports will be required to pay Ahly SC EGP 40 mn per season. Presentation Sport’s bid eclipsed that of its nearest competitor ERTU by EGP 15 mn. Presentation Sports was also awarded the right to broadcast Ahly SC’s remaining seven home games for the ongoing EPL season for EGP 14 mn (EGP 2 mn per match). (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Egypt court upholds asset freeze on Hussein Salem, Sameh Fahmy
Ahram Online | 17 May 2015
The Cairo Criminal Court upheld a decision to freeze the assets of businessman Hussein Salem and former oil minister Sameh Fahmy. “Both Salem and Fahmy were acquitted in the ‘exporting gas to Israel’ case,” Ahram Online notes. The Court of Cassation will decided on an appeal by the prosecutor general’s office on 4 June. (Read)

Coalition of newspaper board members threatens strikes
Al Mal | 18 May 2015
A coalition of newspaper board members held a meeting on Monday at the Journalism Syndicate headquarters to discuss the “leaked” draft of the Journalism Law. The meeting concluded with a declaration that the Syndicate must be consulted in the drafting of this law, and if that fails to be met, the strike among newspaper workers nationwide will be called. Among the provisions in the law that the Syndicate is protesting, is that it reduces restrictions protecting journalists from wrongful termination and it reduces the age of retirement to 60 from its present 65, a move which facilitate the firing of unwanted reporters past that age. (Read in Arabic)

ON YOUR WAY OUT

Al-Mal has obtained a copy of what it claims is a letter signed by Central Bank Governor Hisham Ramez thatrelieves exporters trading with cash-based markets including Libya, Syria, Sudan, Palestine, Iraq, and Yemen from the cap on USD deposits.

The Mediterranean is not the only theater currently experiencing a migrant crisis: hundreds of Rohingya migrants escaping persecution from Myanmar, along with Bangladeshis looking for work, are stranded at sea. Thailand, Malaysia and now Indonesia have now refused to rescue any more migrants at sea after already having accepted thousands in the past week, with Indonesia bearing the brunt of the influx. (Read)

Two more men were sentenced to death on Monday for forming terrorist cell in Egypt. (Ahram Online)

84.6% of Egyptians approve of President Abdel Fattah El Sisi’s performance, compared to just a 68.6% approval rating for Prime Minister Ibrahim Mahlab’s government, according to the IDSC, as reported by Amwal Al Ghad. The IDSC also said that 81% of the population approve of the police’s performance.

BY THE NUMBERS

USD CBE auction (last sale Sunday, 17 May): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Monday, 18 May): 7.66 (+0.01 from Sunday, 17 May)

EGX30 (Monday): 8,798.17 (+6.5%)
Turnover: EGP 785.4 mn (40% above the 90-day average)

WTI: USD 59.59 (-0.17%)
Brent: USD 66.34 (+0.11%)

TASI: 9,807.9 (-0.1%)
ADX: 4,614.2 (+0.7%)
DFM: 4,072.3 (+0.1%)
KSE Weighted Index: 429.4 (+0.3%)
QE: 12,471.9 (-0.5%)
MSM: 6,379.7 (+0.3%)