Zayat’s American Pharoah wins Triple Crown. World Bank chief in Cairo today. Egypt’s USD bond issuance 3x oversubscribed. Emaar Misr sets IPO range. Beltone Capital to list. El-Sewedy inks EUR 2 bn EPC deal. TE scraps share buyback.

WHAT WE’RE TRACKING TODAY

A Finnish trade delegation should arrive in Cairo today. The delegation includes 17 companies from sectors including energy, healthcare, construction materials, textiles and ICT and will meet with senior officials at GAFI and Investment Minister Ashraf Salman. Egypt’s trade with Finland stood at EUR 300 mn last year. The delegation is headed by Matti Anttonen, Finland’s Under-Secretary of State at the Ministry for Foreign Affairs. (Read in Arabic)

The COMESA, EAC, SADC Tripartite Summit begins this morning Sharm El Sheikh, and runs until Wednesday, 10 June.

The Turkish general election will be held today for the 550 seats of the Turkish Grand National Assembly. If Erdogan’s AKP Party manages to secure at least 330 seats, they will be able to force a referendum on a constitutional amendment to change the country to a presidential system. If the AKP wins an outright supermajority of 500 seats, they will be able to pass the amendment with no referendum required. Both Hurriyet Daily News and Al-Monitor cover several possible scenarios. If the Kurdish HDP opposition party manages to win 10% of seats, it will prevent the formation of an AKP supermajority and force them into a coalition government. This follows a terror attack on an HDP rally on Friday which led to the deaths of two people and over 100 injuries.

WHAT WE’RE TRACKING THIS WEEK

World Bank President Jim Yong Kim is expected to arrive in Cairo on Tuesday for a two day visit to meet with senior government officials, business leaders and civil society organizations. On the agenda: Exploring how the World Bank can best serve Egypt’s development goals. Al Mal reports that he is expected to give a talk on 10 June to the COMESA, EAC, SADC Tripartite Summit.

There is still no confirmation of a visit to Egypt this week by the International Monetary Fund despite murmurings on the topic last week. The IMF noted during a 28 May press briefing that it would have a delegation in town for consultations early this month.

The Central Bank of Egypt’s Monetary Policy Committee will meet on Thursday, 11 June.

The executive regulations to the new Investment Law are due out this week, Prime Minister Ibrahim Mahlab said last night during a call-in to Lamis El Hadidy (more below).

Meanwhile, an Ikhwan delegation will reportedly be making the rounds in Washington, D.C., this week to lobby against the Sisi administration.

Notable conferences taking place this week include:

• MENA Economies: Diversification, Growth and Employment. Chatham House, London. Register online here. (Monday-Tuesday, 8-9 June)
• The Euromoney Lebanon Conference, Four Seasons, Beirut. (Tuesday, 9 June)
• Egyptian Power & Electricity Summit, Fairmont Towers, Heliopolis, Cairo. (Wednesday-Thursday, 10-11 June)

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LAST NIGHT’S TALK SHOWS

Lamees El Hadidy began last night the first of a three part series to evaluate President Abdel Fattah El Sisi’s performance during his first year in office.

El Hadidy announced that according to the most recent poll conducted by the Egyptian Center for Public Opinion (Baseera), El Sisi’s approval rating is at its highest ever with 90% of respondents saying that they would vote for him again as President. “Previous polls by Baseera indicate that throughout the year the President’s approval rating has fluctuated between in 80-89%. It inexplicably reached its lowest rate after his sixth month in office,” said El Hadidy.

She asked people on the street what problems they would like to see addressed this year that weren’t solved last year, answers included: rising prices, education, job opportunities for youth, terrorism, garbage, social justice, tourism, and corruption.

“I personally would like to see the President lead more revolutions; a revolution against the bureaucracy, a revolution against corruption, a revolution against the current religious discourse and of course a revolution against the population explosion. With this kind of approval rating President Al Sisi has an unprecedented opportunity to lead these revolutions. We have a real chance to do better,” said El Hadidy.

One person who won’t be rating either El Sisi’s performance or his own: Prime Minister Ibrahim Mahlab, who called in last night only to be asked to rate his government’s performance on a scale of zero through 10. Mahlab declined, but did discuss recent developments, including plans to create two new ministries: a Ministry for Entrepreneurship and a Ministry for Egyptian Expatriates.

Moreover, the prime minister said, “The government completed its drafting of the executive regulations of the mineral resources law on Saturday.” Mahlab said cabinet is also putting the finishing touches on the executive regulations of the Investment Law, “which we expect to issue by the end of the week.” (Watch, running time 5:33)

Osama Kamal interviewed Minister of Education, Moheb El-Rafie, who discussed the ministry’s long-term strategy 2015-2030 which includes the introduction of technology into public school classrooms including smart boards, computers and a gradual shift of the curriculum to include the strengthening of research and critical thinking skills. El-Rafie also talked about the Ministry’s ambitious plans to train teachers.

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SPEED ROUND

American Pharoah claimed the Triple Crown after winning the 147th Belmont Stakes on Saturday, reports Yahoo Sports. “American Pharoah’s name now moves into the history books alongside equine immortals like Secretariat, Seattle Slew, Citation and War Admiral. And horse racing finally has the superstar it has hungered for — a fluid athlete with a massive stride who seems to float over the ground.” With this victory, American Pharoah joins an elite group of 11 horses who lay claim to the Triple Crown. The last horse to clinch the impressive treble was Affirmed in 1978. American Pharoah is owned by Egyptian-businessman and former Al Ahram Beverages Company owner Ahmed Zayat, whom we have profiled on multiple occasions. Check out the New York Times’ profile of Zayat, which delves deeply into “bankruptcy and big bets,” among other issues. Wan more on the horse? Choose coverage according to your personal media bias: WSJ, Guardian, NY Times, NY Post. CNN tells us why American Pharoah’s name is spelled incorrectly: “The bad spelling came from a mistake in the horse’s registration paperwork.”

Egypt closes first int’l bond sale in five years; issuance is 3x oversubscribed: Egypt sold USD 1.5 bn worth of 10-year USD-denominated bonds at a yield of 6% on Thursday, tighter than the initial pricing guidance of 6.25%, Reuters reported. The bond sale was arranged by BNP Paribas, Citigroup, JPMorgan, Morgan Stanley, and Natixis.

Emaar Misr sets IPO price range: Emaar Misr will offer shares worth as much as EGP 2.55 bn at the top of the range in an IPO that will see 600 mn shares (12.99% of the company) up for grabs. The offer price will be between EGP 3.5 and EGP 4.25 per share. The subscription period for institutions started on Thursday and runs-out on 16 June. Retail investors will have their chance 16-25 June. EFG Hermes and J.P. Morgan ore joint global coordinators and joint bookrunners for the transaction, while Emirates Financial Services PSC is serving as lead manager. The full price range announcement is here in pdf, while the initial roadshow presentation is here. Meanwhile, Reuters notes that the offering makes Emaar Misr “expensive compared with developers Talaat Mostafa Group and SODIC but cheaper than Madinet Nasr for Housing and Heliopolis Housing.”

Beltone Capital to List on EGX: Sharif el-Akhdar, partner at Beltone Private Equity, told Reuters on Thursday that Beltone Capital will list on the EGX in Q4 2015, seeking to raise EGP 1 bn in capital. Beltone Financial and Citibank will serve as issuing managers. (Read)

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Siemens and El Sewedy Electric signed a EUR 2 bn EPC contract for the Beni Suef combined cycle power plant, El Sewedy announced in an emailed press release. The plant will run on Siemens’ H-class gas turbines and is set to begin production by the summer of 2017. El Sewedy Electric’s portion of the contract is EUR 785 mn in addition to “site preparations works on a re-measured basis.” The agreement was signed during President El Sisi’s trip to Germany.

The NREA has inked a deal with the Spanish consortium, Enerpal-GAIA, granting it land to build a wind and solar power plant producing 100 MW of electricity. The 50 MW solar power plant will be established on a 1 Km2 plot of land in Aswan, while the 50 MW wind power plant will be established in the Gulf of Suez. (Read in Arabic)

In the latest twist to the unfolding FIFA corruption scandal, former Egypt sports minister Aly Eddine Helal said on Thursday that former FIFA VP Jack Warner had solicited a USD 7 mn bribe to secure the 2010 World Cup, which was instead awarded to South Africa. Meanwhile, the FBI on Friday speaking to Reuters has said that it is investigating the Russian and Qatari bids for the 2018 and 2022 tournaments, respectively, according to an unnamed source.

Former president Hosni Mubarak will face his third and final retrial for allegedly ordering the killing of protesters in 2011 in front of the Court of Cassation, after the prosecution’s appeal was accepted on Thursday. The new case will begin on 5 November. Mubarak’s sons and former Interior Minister Habib El-Adly, meanwhile, were all were acquitted.

T+1 on Thursday: Next-day settlement regulations, which as we reported last week were approved by EFSA, will come into effect on Thursday, 11 June. Adoption is optional as the T+2 system will also remain in place, according to Al Borsa.

Telecom Egypt’s board decided against the share buy-back proposed last week. Instead, the company said it will use its liquidity to finance its development of the company’s infrastructure to better serve its customers, Amwal Al Ghad reported. TE also denied in a statement sent to the EGX that it plans to split in two and said it will continue its replacement of copper wire with fibre-optic cables.

Piraeus Bank’s Egyptian operations will be rebranded as Al Ahli Bank of Kuwait (ABK) before the end of 2015, a source told Amwal Al Ghad. ABK had acquired 98.5% of Piraeus’ shares in a USD 150 mn deal. ABK is looking to finalise the deal and secure the approvals of central banks in Egypt and Kuwait.

Orascom Construction reports record backlog with 1Q2015 results: Orascom Construction reported a net profit of USD 9.5 mn on revenues of USD 858 mn for the first quarter of 2015, while EBITDA margins stood at 4.4%. 35% of revenues came on the back of operations in Egypt, while the company’s US operations contributed 52%, primarily as a result of the Iowa Fertilizer Company project. The company reported a record — and well-diversified — project backlog of USD 5.62 bn as of 31 March. Al Mal has coverage, and the full earnings release is here in pdf.

Nour party denies CIA, U.S. embassy meetings: Leading Nour party member Nader Bakar, everyone’s favorite Salafi during the Morsi interregnum, denied claims that his party met with CIA officials at the US Embassy in Cairo, describing the rumors as baseless attempts tarnish the party and decrease its popularity. That said, Bakar conceded that his party did make a procedural visit to the embassy, stating that all of Egypt’s major political parties have  frequented the embassy in the past. (Read in Arabic)

Government publishes draft of Civil Servant Law’s executive regulations. The government released a draft of the executive regulations of the Civil Servants Law on Saturday. The regulations will be discussed and reviewed by government officials and the general public over the coming weeks, with the aim of issuing a final version before the end of June, said International Planning Minister Ashraf El Araby. While the government has been partially operating under the new Civil Servants law since March 12, all aspects of the  law are expected to come into effect once its executive regulations are issued.

President El-Sisi comments on heckler from joint conference with Merkel: Following Wednesday’s conference, President El Sisi on Thursday insisted that the journalist in question is  ”still an Egyptian …” despite a difference of opinion, Ahram Online reports.

A massive citywide blackout hit the Red Sea resort of Hurghada on Thursday, bewildering officials from the utilities department of the Red Sea governorate who have yet to ascertain the reason behind it. This is the first citywide blackout of the year, arriving only a few short weeks from Ramadan. (Read in Arabic)

An Egyptian court overturned a previous decision to label Muslim Brotherhood-offshoot Hamas as a terrorist organization, reports BBC. “the ruling in February was quashed because the lower court was not “competent” to make such verdicts,” said an unnamed court official said. Hamas, unsurprisingly, welcomed the ruling. Meanwhile, Daesh-supporting Salafis in Gaza launched a rocket attack on Israel on Saturday, the second time in a week, with Israel responding to the previous attack on Thursday with airstrikes on Hamas training sites in Gaza, according to the Israeli military as reported by AP. A Jihadist Salafi group that calls itself the Omar Brigades’ and supports Daesh claimed responsibility for the attack. “Hamas, which has ruled Gaza with an iron fist since 2007, sees the radical group as a threat. The group said the attack was to retaliate the killing of one of its members at the hands of Hamas. A day before that killing the group gave Hamas a 48-hour ultimatum to end its crackdown on the Salafis. Even so, Israel considers Gaza’s Hamas rulers responsible for any attacks originating from the area it controls.”

OPEC to maintain current oil output: The 12 OPEC nations agreed to keep their combined daily production target at 30 mn barrels / day after meeting in Vienna on during the OPEC seminar on Friday, Bloomberg reports. However, “If they keep producing above the quota as they did over the past 12 months, [Giovanni Staunovo, commodity analyst at UBS Group AG, said by phone to Bloomberg], this quota is irrelevant.” (Read)

Or: How I learned to stop worrying and love fracking: The U.S. Environmental Protection Agency declared on Thursday that hydraulic fracturing has not caused any “major harm” to drinking water supplies. The agency’s review of data on the subject is being closely watched by regulators around the world concerned about the environmental impact of fracking. The Hill has more.

CORRECTION- Our subject line on Thursday contained an unfortunate typo. We meant “build,” of course, not “buold.” The writer responsible, having noticed the mistake seconds after hitting “Send” on that edition, spent the balance of the day wallowing in abject misery. Our apologies for the confusion.

***
A MESSAGE FROM PHAROS HOLDING

Pharos Holding places Ezz Steel ‘Under Watch’

A mix of low capacity utilization, decreased steel prices, higher SG&A and an FX loss has seen Ezz Steel report an attributable Net Loss of EGP 696.6 mn in FY 2014. Year-end results are not surprising since the first nine months of 2014 saw the steel giant close with an attributable Net Loss of EGP 461.1 mn on the back of electricity and natural gas shortages. Although said shortages were expected to wane in 4Q14, the company’s bottom line suggests no noticeable operational improvements during the last quarter of the year, with finished steel capacity utilization at the company’s most profitable subsidiary, EZDK, averaging 88.3% in 2014 compared to 102.5% in 2013.

Meanwhile, lower demand and increased competition from Chinese manufacturers saw steel prices drop from EGP 5,096/ton in 2013 to EGP 4,639/ton in 2014. Add to that the new electricity tariff applied in July 2014 and the hike in natural gas price from EGP 4.0/MMBTU to EGP 7.0/MMBTU and it becomes clear why the company’s Gross Profit Margin plummeted from 10.9% in 2013 to 3.6% in 2014.

Overall, operational metrics did improve in 4Q14 albeit not by the magnitude Pharos Research had projected. And while the stock price is already below our fair value estimate, uncertainty over energy supply during 2015 forms the basis of our ‘Under Watch’ recommendation at least until 1Q15 results are out.

To read more click here.
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EGYPT IN THE NEWS

Journalist Abdelrahman Youssef writes in The Carnegie Endowment for Peace’s Sada journal that the Ikhwan “has chosen confrontation as its preferred tactic to challenge the regime of Abdel Fattah el-Sisi. After nearly two years of pursuing nonviolent resistance to secure its long term interests.” The piece documents shifts indicating “changing priorities away from education and missionary work toward mobilization against the Sisi regime… what that entails remains to be seen, and there are currently two competing schools of thought within the Brotherhood. The first is the idea of a full-blown revolution … The second, however, would entail orchestrating a military coup supported by both Islamists and disaffected officers.”

Hungarian media coverage of the President’s state visit: President Abdelfattah El Sisi’s recent state visit to Hungary was met with neutral to mixed response in the Hungarian press. Metropol, the leading Hungarian daily by circulation, according to the European Stability Initiative, ran neutral coverage of the press conference, (Read in Hungarian). Index.hu, the highest-ranked internet news service in Hungary according toAlexa, was more critical of both the Hungarian Prime Minister Viktor Orbán as well as President El-Sisi’s regime, accusing the Egyptian police of torture and saying that the government has been systematically persecuting Morsi’s supporters. (Read in Hungarian)

That said, the Egyptian government signed two MoUs in the fields of security and railway transportation during the president’s visit to Budapest, reports Youm 7. “Egypt’s Foreign Minister Sameh Shoukry and heads of Hans Motors and Maxim Group Investment Banking signed an MOU to supply Egypt with 700 train passenger cars.” The second MoU, signed by the Egyptian and Hungarian Ministries of Interior, aims to  enhance bilateral relations and coordination in security.

The too fertile crescent: Described by an unnamed researcher in Egypt as “catastrophic,” The Economist notes that “The increasing number of births will rob Egypt of some of its imminent demographic dividend—the economic advantage of having few old people and children” relative to the number of people in the workforce. (Read, paywall)

‘A year in office, el-Sissi tries to rule Egypt as 1-man show’: “No one is certain now that we are on the right path or that there is hope at the end of a long tunnel,” prominent analyst Abdullah el-Sinawy, known for being close to the military, wrote last week in a column that harshly scrutinized el-Sissi’s legacy so far. El-Sissi “does not have a magic wand to solve the insurmountable problems,” el-Sinawy wrote, but he said el-Sissi should do more to break with the Mubarak era. He pointed to how Mubarak-era businessmen have regained the power and impunity they enjoyed under the former president.” (Read in AP, TIME and Stars and Stripes)

Voice of America, the official external broadcast institution of the U.S. federal government, writes on the perceived disparity in over the fates of Egypt’s two former presidents in ‘Egypt: Ousted President Mubarak May Face Life, Morsi Death.’ The piece quotes Egyptian publisher Hisham Kassem as saying the difference is in the remaining evidence. “By the time he [former president Mubarak] did it [allegedly destroyed evidence] he left very little trace of his 30 years of corruption,” Kassem said.   Morsi, he added, believed he would maintain his seat despite the protests and when he was arrested, left a trail of evidence against himself and his government.” (Read)

WHAT YOU CLICKED ON LAST WEEK

The most-clicked links in Enterprise last week were:

• Nemat Shafik, Deputy Governor, Bank of England’s entry on Forbes’ 2015 list of The World’s 100 Most Powerful Women. (Read)
• The Triumph (and Failure) of John Nash’s Game Theory, The New Yorker. (Read)
• Aflam, a new YouTube channel featuring Egypt’s cinematic classics in HD resolution. (Browse)
• Egypt PMI press release for May 2015. (Read)
• Infographic by Siemens on the recently-signed USD 9 bn deal stating that the 3 power plants will be the largest in the world and will increase Egypt’s power generation capacity by 50%. (View)

WORTH READING

The Administration Should Not Meet With the Muslim Brotherhood in Washington, Eric Trager, Washington Institute: “Next week, a delegation including two prominent Muslim Brotherhood members will visit Washington to advocate against the current Egyptian government, headed by President Abdul Fattah al-Sisi. While the delegation will likely draw interest from the media and think tank communities, the Obama administration should not engage with it at any level. Given the Brotherhood’s explicit embrace of violence and calls for Sisi’s death, U.S. engagement with the Brotherhood at this time will undermine the administration’s efforts to strengthen relations with Cairo … The Obama administration should not allow itself to be used as a propaganda tool in the Brotherhood’s ongoing war against the Egyptian government.” (Read)

WORTH WATCHING

The award-winning animated Estonian film In the Air has been described by some as Dadaistic. (Watch, running time: 8:36)

DIPLOMACY

Egyptian Chief of Staff Lieutenant General Mahmoud Hegazy met Wednesday in Cairo the Greek chief of the Hellenic National Defence General Staff, General Michail Kostarakos, according to Ahram Online. Kostarakos attended the joint military exercises Horus 2015.

India hopes to strengthen ties with Egypt: Egypt’s ambassador to India, Hatem Taj, met with Indian Trade Minister, Nirmala Sitharaman, to explore ways to strengthen bilateral economic cooperation between both countries. Amb. Taj stressed the importance of these ties, highlighting that commerce between both countries reached USD 5 bn last year, with Indian investments in Egypt growing to USD 2.5 bn. Minister Sitharaman vowed to redouble efforts to encourage increased trade between the two countries. (Read in Arabic)

OIL & GAS

Egypt signs USD 300 mn deal with UOP to produce high-octane benzene
Reuters, The Cairo Post | 05 June 2015
Egypt signed a USD 300 mn deal to produce high-octane benzene, according to a statement from the oil ministry on Friday and as reported by Reuters. The agreement was signed between the Alexandria National Refining and Petrochemicals Company and UOP. “The project comes in line with the Petroleum Ministry’s strategy aimed to benefit the most from production units at refineries to increase its production capacity, in order to meet the growing demand in the domestic market,” Ismail said in the statement, as reported by The Cairo Post. (Read in Reuters and The Cairo Post)

India’s MRPL buys first cargo of Egypt’s Ras Gharib crude
Reuters | 05 June 2015
Mangalore Refinery and Petrochemicals (MRPL) made its first purchase of Egypt’s Ras Gharib crude, according to two sources with knowledge of the tender award speaking to Reuters. The purchase is for loading in first half of July. Trader Vitol will supply the 600k barrel cargo at a discount of c.USD 5.5 a barrel to Dubai on a delivered basis, according to the sources. (Read)

Sonatrach diverts gas from Europe to Asia, in talks for more LNG shipments to Egypt
Hellenic Shipping News | 04 June 2015
Algeria’s Sonatrach expects to continue diverting gas exports away from Europe and towards Asia. It still sees limited opportunities on trading LNG on the spot market, focusing instead on long-term agreements. The company remains in talks with Egypt over supplying extra LNG quantities on top of the six summer cargoes already agreed to and that will be delivered over the summer. Sonatrach is also seeking long-term supply deals with South American countries. (Read)

BASIC MATERIALS & COMMODITIES

Presidency orders probe into alleged wheat supply scandal
Egypt Independent | 04 June 2015
Ittihadiya has requested the Ministry of Agriculture to investigate reports of violations regarding the supply of locally-planted wheat, which allegedly allowed importers to obtain illicit gains due to the difference between the prices of the imported and locally-supplied crops, according to Al Masry Al Youm as reported by Egypt Independent. Sources at the Agriculture Ministry reportedly said that a number of agricultural quarantine departments concerned with the import process, such as the Supply and Trade Ministries, are involved in the scheme. (Read)

Wadi Group’s flotation scheduled for September
Al Borsa | 04 June 2015
Wadi Group expects its IPO to take place in September, the company’s Chairman said. The company recorded a sales revenue of EGP 170 mn in 2014 – all of which came from the domestic market and it expects the volume to grow as tourism rebounds. Wadi said it controls 22% of the olive oil market and is also considering expanding in North Sinai if the security situation there improves. (Read in Arabic)

Egypt named official partner country for international produce exhibition in Berlin
Fruit Logistica Press Release, SIS | 04 June 2015
Egypt has been named as the official partner country for Fruit Logistica 2016, taking place from 3-5 February 2016 in Berlin, according to a release from the official exhibition site. The SIS states that the agreement was signed during the President’s recent visit to Germany. During the February 2016 exhibition, Egypt will have a platform to demonstrate its potential and present its high-quality products. Egypt exported USD 2 bn in fresh produce during the 2013/2014 season, primarily to Russia, Saudi Arabia and the UK. Egypt first exhibited at Fruit Logistica in 1999. The Egyptian exhibition presence is organised by the Egypt Expo & Convention Authority (EECA), and the exhibition is being organized by Messe Berlin. (Read the press release)

AUTOMOTIVE

FEI and IDA to develop strategy for auto manufacturing in Egypt
Al Borsa | 04 June 2015
The transportation division of the Federation of Egyptian Industries (FEI) and the Industrial Development Authority (IDA) have presented two proposals to the Ministry of Industry for a strategy to develop the automobile manufacturing industry. The first proposes tariffs on imported vehicles of up to 20% for countries other than the EU, Turkey and Agadir Agreement signatories, (Jordan, Morocco and Tunisia). It proposes a series of sales taxes on these vehicles. The second proposal called for tariffs on different sized vehicles with a 30% tax on small cars and 50% for SUVs. (Read in Arabic)

Chevrolet dominates truck market with a 70% market share
Al Mal | 04 June 2015
Chevrolet continues to dominate domestic truck sales, achieving a 67% market share in 1Q15, growing from 65% in 1Q14. Chevrolet was followed by Toyota which came a distant second at 13%. (Read in Arabic)

HEALTHCARE

Stem cell supreme council to be recreated
Al Mal | 04 June 2015
A supreme council for stem cell research will be recreated, Adel Adawi, the Health Minister said. The council comes following the ministry’s crackdown on TV advertisements that claim to offer treatments using stem cells. Adawi said the ministry has not yet set the regulations for stem cell treatments and that their usage are still in an experimental phase. The Health Ministry added it will take legal action against any medical facility the claims to be using stem cells in its treatments. (Read in Arabic)

REAL ESTATE & HOUSING

Palm Hills raises EGP 966 mn in second subscription round, implying 17.3x oversubscription
Palm Hills Developments Press Release | 04 June 2015
Palm Hills announced the completion of a 3-day second subscription round for the unsubscribed portion of its EGP 1.648 bn rights issue of 824 mn new ordinary shares, with the unsubscribed portion standing at 27.9 mn shares with a total value of EGP 56 mn. The total offering was 17.3 times oversubscribed with a net subscription value of EGP 966 mn, excluding issuance fees of EGP 17 mn.

TOURISM

TDA to pick the winning bid to promote Egypt tourism by July
Al Borsa | 04 June 2015
The Tourism Development Authority (TDA) will announce the winner of the company awarded the contract to promote Egypt abroad in July. The contract involves promoting Egypt as a tourist destination in 26 countries within the next three years and the campaign is scheduled to begin in August. No companies submitted offers so far, which is why the TDA extended the tender deadline to mid-June after having had it scheduled for May’s end. (Read in Arabic)

BANKING & FINANCE

EFG Hermes in talks to manage investment portfolios of 15 domestic institutions
Al Shorouk | 04 June 2015
EFG Hermes is in talks with 15 domestic institutions over managing their investment portfolios, asset management head Nabil Moussa said. EFG already manages 15 investment funds in Egypt with a value of USD 2 bn. Moussa said demand for Islamic assets in Egypt is growing and he expects activity to grow with the government’s sukuk programme. 6% of the assets EFG Hermes already manages are Islamic, he added. (Read in Arabic)

Piraeus Bank to launch bancassurance services with MetLife Alico
Al Mal | 04 June 2015
Piraeus Bank Egypt is partnering with MetLife Alico to launch bancassurance services after having received CBE approval, the head of retail banking told Al Mal. Previously, Piraeus was in partnership with Allianz, but the agreement expired last year. According to CBE regulations, banks only act as a marketing channel when it comes to bancassurance with the terms of the agreements with clients being the responsibility of the insurance partners. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Governorate of Alexandria creates a company to manage monorail project
Al Borsa | 04 June 2015
The creation of a company to manage the Alexandria monorail project was approved by Governor Hany El Messiry, Al Borsa reported. The company will be created as a joint stock company and will be formed in cooperation with the Egyptian Stock Exchange. El Messiry directed the project managers to begin construction in Agamy and Borg El Arab to attract some of the city’s population to the outskirts. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

New ministries to be established for entrepreneurship, Egyptian expat affairs
Ahram Online | 04 June 2015
The government will form two new ministries: one each for entrepreneurs and Egyptian expatriates’ affairs, according to a statement by President Abdelfattah El-Sisi on Thursday in Germany. The entrepreneurship ministry will provide “technical, financial and marketing support” to SMEs, according to the President as quoted by state news agency MENA. With regards to the proposed ministry for Egyptian expatriate affairs, the President was quoted as saying “Egyptian expats have become in critical need of a ministry to sponsor their affairs, provide full support to them, and link them to their homeland.” (Read)

Social Solidarity Ministry begins Karama and Takaful payments
Al Borsa | 04 June 2015
The Social Solidarity Ministry began disbursing cash payments for the Karama and Takaful programs. The transfers include back payments for the first six months of the year and will be disbursed using the smart cards already distributed by the ministry. Al Borsa said the total cost of the payment is estimated to be EGP 134 mn. (Read in Arabic)

REGIONAL

Scud missile fired at Saudi Arabia as 38 Yemenis reported killed
Reuters | 06 June 2015
The Houthis and their army allies fired a Scud missile at Saudi Arabia which the Saudis reported as being shot down on Saturday, as reported by Reuters. Airstrikes and shelling following the Scud attack resulted in the deaths 38 Yemenis, according to reports in the Houthi-controlled news agency Saba, which could not be immediately confirmed. (Read)

ON YOUR WAY OUT

Additional forced disappearance cases surface: Daily News Egypt reports on the growing number of missing persons who are believed to have possibly been disappeared by security forces. DNE reports “Activists believe many cases are linked to an upcoming strike called for by the 6 April Youth Movement, and are an attempt to neutralise activism by the Ministry of Interior. However, while 6 April is mainly composed of young students, the recent wave of disappearances has also targeted those of older ages. Ahmed Amin Suleyman, understood to be a 44-year-old employee of the US Embassy, has been missing since 26 May.”

Cairo Metro funding approved: President Abdel Fattah El Sisi approved the receipt of EUR 344 mn in financial assistance from the French government to fund the third and fourth stages of the Cairo Metro project, Al Ahram said.

Cairo Scene provides us with satirical piece detailing, “7 things to Do with the EGP 7 the Government is Giving Away.“ To the unaware, the government recently announced its intention to increase the financial support it offers to families that hold ration cards by EGP 7 per individual. In other words: Enterprise readers will unlikely be benefiting from the referenced “government giveaway.” Sorry.

Should Toshka be saved? The government should not cancel a project on which it has spent mns, said the Agriculture Ministry’s spokesperson in reference to the failed Toshka project, which he believes project could be revived. (Read in Arabic) He should read more about the sunk cost fallacy.

Egypt: The expulsion of Coptic families and the role of state and society: Former deputy Prime Minister Ziad Bahaa-Eldin wrote an op-ed in Ahram Online on Thursday calling against so-called reconciliation agreements expelling Christian families in rural Egypt, arguing that their sanctioning undermines the state’s authority. (Read)

BY THE NUMBERS

USD CBE auction (Thursday, 04 June): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Saturday, 06 June): 7.65 (+0.02 from Tuesday, 02 June)

EGX30 (Thursday): 8,780.76 (-1.40%)
Turnover: EGP 371.2 mn (25% below the 90-day average)

WTI: USD 59.13 (+1.95%)
Brent: USD 63.31 (+2.06%)

TASI: 9,668.1 (-0.1%)
ADX: 4,587.2 (flat)
DFM: 4,032.2 (+0.1%)
KSE Weighted Index: 424.0 (-0.5%)
QE: 12,092.3 (-0.7%)
MSM: 6,462.0 (-0.1%)