Is Egypt looking to buy Mistral chopper carriers from France?

TL;DR

• OCI NV and U.S.-based CF Industries will partially merge in a USD 8 bn transaction that will create one of the world’s largest nitrogen companies
• Egypt, Saudi could project force regionally with French Mistral chopper carrier purchase
• Tax Authority employees threaten strike.
• A new acting morshed for the Ikhwan?
• Roubini bullish on MENA real estate despite global slowdown
• Once given away for free, mobile phone lines are selling for as much as EGP 50 on the grey market
• Egyptian swimmers make finals at World Championships.
• U.S. Republicans still love El Sisi

WHAT WE’RE TRACKING TODAY

The fate of a Croatian national taken hostage by Daesh and facing execution if the terrorists’ demands are not met is high on our minds today. MoFA confirmed in a statement that Foreign Minister Sameh Shoukry met in Cairo with Croatian Foreign Minister and Deputy Prime Minister Vesna Pusić over the crisis, which began when Tomislav Salopek, an staffer at a French geoscience company abducted near Cairo, became the “first foreigner to be abducted and threatened with death by militants in Egypt,” as the Guardian put it. A Daesh affiliate in North Sinai is threatening to execute Salopek if Muslim women were not released from Egyptian prisons. The terrorists’ 48-hour deadline passed yesterday. The case, which has received little English-language media attention so far outside Egypt, could have a deep impact on the willingness of international staff to accept posts in Egypt.

President Abdel Fattah El Sisi is expected to announce “within days” the details of a series of new national megaprojects, Al-Mal reports, most likely in a televised address to the nation.

Is oil heading back to its March lows? Despite predictions earlier this year that oil could recover to USD 70 per barrel or more by year’s end, crude prices slumped more than 7% last week on a mix of flagging Chinese demand, continued U.S. investment in shale oil, and the prospect of Iran bringing to market some 500,000 to 1 mn bopd soon after the lifting of sanctions. Of the three factors, some are now arguing it’s U.S. shale production that presents the biggest risk to OPEC and, in turn, to Saudi Arabia. The Telegraph on Wednesday carried a piece that makes a thought-provoking case: “If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.”

For the counterpoint, check out Aaron Menenberg’s “The Crafty Saudis: How They’re Sustaining Low Oil Prices.” In a nutshell: Saudi is using recent investment in refining capacity to keep pressure on its global competitors by “extending their influence into an area where they can capture new profits through a value-added service they hadn’t really been leveraging.”

By our count, we have about two more weeks of summertime quiet left before the Mahlab government will be forced to address political overhangs including the timing of a fall election for the House of Representatives and key pieces of legislation and / or regulation, ranging from taxation to subsidy reforms and deregulation of the energy sector, from the remaining questions surrounding the investment law to the fate of the new administrative capital. Cue Al-Ahram, which at our dispatch time today said the Higher Elections Committee is expected to release the election timetable this week, setting the stage for a two-phase election in October and November.

LAST NIGHT’S TALK SHOWS

Magdy El Galad, Hona El Asama on CBC: Magdy El Galad filled in for Lamees El Hadidy on Saturday, devoting the lion’s share of his program to a discussion of Egypt’s struggling cotton sector. Two industry professionals, Magdy Kotb (chairman, Cairo Cotton Group) and Ahmed Mostafa (head of the state-owned Cotton & Textile Industries Holding Company) joined him.

Commenting on the state of the industry, Tolba opined that protectionist policies would not succeed in reviving the struggling industries. Rather, bringing an end to the unrelenting wave of labor strikes that have spread across the country’s textile factories would provide a more optimal solution. Tolba refrained from providing suggestions as to how the government could achieve this goal.

The most insipid question of the night:

El Galad: If President Abdel Fattah El Sisi were to personally ask you to tailor a suit for him, would you be able to do it?

Dr. Mostafa: Of course. It would be an honor. We’d be able to tailor a fashionable suit for him immediately. We produce some of the finest suits for high-end European brands.

Mona El Shazly, Maakom on CBC: On Friday (The show was rebroadcast on Saturday evening), Mona El Shazly devoted the entirety of her program to the opening of the New Suez Canal. Understandably, the tone of the show was entirely positive and celebratory. A traditional folk band hailing from Ismaliyya opened the show with a celebratory song, whose chorus — “In one year, we completed the digging of the Canal” — continues to reverberate in this reviewer’s ear.

El Shazly: Today’s celebration is justified. We know that something has been achieved; we can see it on the ground. We live in a country that faces a multitude of challenges. We, as Egyptians, can often identify the problems we face, but are unable to find solutions to them. Yesterday, however, was different. We achieved everything, according to the plan that we set out. We showed the world that Egypt can still achieve what she wants, that she is still standing resolutely on her feet.

Rania Badawi, Al Qahera Al Youm, filling in for Amr Adeeb. Badawi opened by mourning the death of Saudi broadcast journalist Saud El Dosseiry.

Badawi then transitioned to a discussion of former president Mohamed Morsi’s recent rant in court, in which Morsi reportedly requested that his meals be prepared outside of prison. Morsi voiced concern the Interior Ministry is plotting to poison him.

“I don’t understand. He’s been eating prison food for over a year and he hasn’t been poisoned. In fact, his belly has become larger since he was arrested. What is causing him to worry now?” said a confounded Badawi.

The show then concluded with an hour-long discussion on global warming and the dangers of rising temperatures for Egyptians.

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SPEED ROUND

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The most-discussed story of the weekend was Thursday’s announcement that OCI NV and U.S.-based CF Industries will partially merge in a USD 8 bn transaction that will create one of the world’s largest nitrogen companies. The agreement will see OCI receive cash and shares worth a combined USD 6 bn; CF Industries will also take on OCI debt of USD 1.95 bn. CF Industries will become a subsidiary of a new U.K.-based holding company, with OCI contributing select European and U.S. businesses as well as its global trading arm in exchange for USD 668 mn in cash and what should be a c. 27.7% share in the new entity, according to an OCI statement and the company’s investor presentation on the transaction. OCI will also sell CF a 45% interest in Natgasoline for USD 518 mn. Natgasoline is building in Texas what will become the largest methanol production facility in the United States; CF will have a call option on OCI’s 55% take in Natgasoline following construction of the project. Other key takeaways:

• The new, U.K.-domiciled CF Industries will be the world’s largest publicly traded nitrogen company. It will be run by CF’s current management team and traded on the NYSE;
• OCI NV intends to distribute most of the shares it receives in the transaction to its shareholders
• What does OCI control post-transaction? In addition to around 27.7% of the new CF Industries, OCI will hold 51% of Algeria’s Sofert, 100% of Egyptian Fertilizers Co., 60% of Egyptian Basic Industries Company, 100% of Netherlands-based BioMCN and 55% of Natgasoline in Texas.
• Seeking Alpha thinks the deal is “good for everyone (but farmers),” while Moody’s drills down into the nitty-gritty for the geeks among you as it declares the potential merger “credit positive“

The OCI-CF lash-up won plenty of attention in the global business press, including the New York Times, WSJ, FT, Reuters and Bloomberg.

Wait a second: Isn’t that an ‘inversion’? Long-term readers of Enterprise will recall that the Obama administration is not exactly enamored of inversions, the practice of U.S. companies entering into transactions that makes them based abroad for tax purposes even as their headquarters (and, often, operations) remain in the United States. Reuters hints at the issue, quoting CF Industries’ CEO as saying that the deal shouldn’t raise antitrust concerns and that the U.K. headquarters was a core OCI condition for the deal, while the WSJ notes, “Tony Will, chief executive of CF, said on a conference call with investors Thursday that it pursued the purchase because of expansion prospects, not to lower its tax rate. ‘This is not a tax-driven deal,’ he said. ‘I would view this as a combination with great industrial logic.’” The U.S. issued new rules last September to clamp down on tax inversions.

While the “desperation“ of which France24 speaks might be a bit of Gallic hyperbole, Reuters joined the broadcaster in confirming French media reports that Egypt and Saudi Arabia are two of perhaps 10 countries interesting in purchasing Mistral-class helicopter carriers from France that were to have been sold to Russia. The planned sale fell apart as the two sides clashed over Russia’s involvement in the Ukraine crisis. The Canucks, however, may have an edge: “Canada … could be the most suitable candidate for the ships because they were designed for cold waters.” Reuters also cites a source as saying Egypt may be interested in acquiring a second FREMM frigate from France. Notes France24: “‘King Salman of Saudi Arabia wants to build a fleet in Egypt which could project regional power in the Red Sea and Mediterranean,’ said the source. ‘Some countries in the region have displayed a marked interest in the Mistrals with the aim of establishing a [regional] maritime force.’”

Tax Authority employees threaten to strike: Employees at the Tax Authority threatened to strike if their protest on Monday yields no results, Al Mal reported. Protesters are demanding the repeal of the Civil Service Law (or at least a stay on its implementation) and the transformation of the Tax Authority into an independent economic authority, among other demands, according to Hadia Zaatar, a legal researcher at the Authority. Deputy Finance Minister Ayman Al Qaffas denied last week that Finance Minister Hany Kadry Dimian had threatened to sack any ministry employee who participates on the 10 August protest, which has reportedly been granted a permit by the Interior Ministry.

Does the Ikhwan have a new acting leader? Sources within the Muslim Brotherhood have told Al Masry Al Youm that Ibrahim Mounir, a member of the Brotherhood’s International Guidance Bureau, will become the banned group’s acting morshed, replacing Mahmoud Ezzat. Ahmed Abdel Rahman was appointed as second deputy. In other Brotherhood-related news, former president Mohamed Morsi told Cairo court that he is effectively on hunger strike as he apparently fears his prison food may be poisoned, Ahram Online reports. The court ordered that the prison service allow Morsi to be examined by a physician after he also alleged he is suffering from low blood pressure.

“Imagine one of the world’s biggest and busiest expressway interchanges with hardly a petrol station, a convenience store or even an exit ramp to be found.” Keep that phrase in mind as you read today’s Spotlight on the inauguration of the New Suez Canal (below). The international press has taken the Canal as the latest embodiment of all that it sees as wrong with Egypt (on the economic front, at least), missing the proverbial boat in the process. Into that gap steps veteran finance writer Patrick Werr, whose column for The National this week hits the nail squarely on the head: “New Suez Canal success hinges on what happens on land.” Werr offers a pointed critique as he fleshes out the infrastructure needed to see the Canal really become an engine of economic growth far more valuable than the US 13.2 bn in annual tolls the Suez Canal Authority hopes to see generated from the waterway by 2023. The Canal generates about USD 5 bn each year at present.

Former National Democratic Party headquarters off Tahrir Square demolished: The demolition of the NDP building by the Armed Forces’ Engineering Department was completed last Wednesday. Sources at the Ministry of Housing say the minister is meeting with different groups to decide the best fate of the space, reported Egypt Independent.

Egypt has second-most USD mn’aires in Africa, fifth-most as a percentage of population: Omm El Donia is home to more than 20,200 individuals with assets of USD 1 mn or more, reports Quartz, citing the “Africa 2015 Wealth Report” (the pdf of which we tried multiple times to download, but which generated a corrupt file each time). South Africa is in the pole position with 46,800 mn’aires, while Egypt nudged out Nigeria (with 15,400) in second place. Look at it in population terms, though, and tiny Mauritius is in the lead with 2,469 people per mn citizens with net worths in excess of USD 1 mn. Compare that with 249 mn’aires per million citizens in Egypt.

Nouriel Roubini’s EconoMonitor is positive on MENA real estate: “The MENA real estate sector, despite a short-term outlook clouded by risks, is expected to perform well in the long run – supported by favourable demographics, rising per capita income and an improving mortgage market – and remain an attractive destination for investors.” The report claims Cairo home prices surged 15-25% last year and notes what most of us outside the industry have long felt in our guts: “Relative to income, house prices in Cairo are: a) more costly than in Western Europe; b) twice more expensive than in most Gulf countries; and c) four times those of the US.” Although the report gets it right on growing demand for residential and retail space in Cairo, SME owners will be a little surprised to learn Cairo has an oversupply of office space. If you own or invest in property in Cairo or the MENA region, the report (with one tight paragraph per country) is recommended reading.

We know not all of you are as obsessed with North Korea as we are, but this New York Times piece is worth checking out: “North Korea, a hermetic country stuck in the Cold War and obsessed with its long-dead founder, now wants to turn back time. By a half-hour.” That’s right: Kim Jong-un now wants his own time zone, turning his hand to public policy after apparently growing tired of using anti-aircraft guns to execute generals who prefer cat naps to listening to the grandson of The Great Leader pontificate.

Egyptian swimmers reach World Championship finals: Akram Ahmed will compete today in the men’s 1,500m freestyle final in Kazan, Russia, having placed fifth in the semifinal heat. Meanwhile, Farida Osman finished fifth in the women’s 50m butterfly final on Saturday — Egypt’s best-ever finish at the World Championships. Osman beat her own Egyptian and African records in the same event during the earlier semi-final, Ahram Online reports.

“Republican debate highlights GOP obsession with Egypt’s Sissi,” writes the Washington Post in the wake of Thursday’s first debate between contenders for the Republican Party’s presidential nomination. “Egypt’s President Abdel Fatah al-Sissi, [Senator Ted] Cruz [of Texas] argued, was a tough, terror-fighting commander who should both be befriended and emulated. … Sissi, you see, is no sissy.” The story goes on to cite in a similar vein other, lesser stars in the Republican constellation. The counterpoint? None other than Shadi Hamid, of course, whose latest for U.S. rag Foreign Policy is headlined “Sisi’s Regime Is a Gift to the Islamic State.” (The URL is even cruder, ending in /sisi-is-the-best-gift-the-islamic-state-ever-got)

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A MESSAGE FROM PHAROS HOLDING

Higher GPM sees Emaar record an almost 4-fold increase in 1H15 bottom line

Newly listed Emaar Holding reported a net income of EGP 522 mn in the first half of this year, up 284% over the EGP 136 mn posted in the same period last year. The surge in the company’s bottom line comes on the back of increased high end unit deliveries in 2Q15, leading to an 18.7 percentage point jump in the company’s gross profit margin to 48.7%.

Pharos Research notes that the bulk of units delivered during the quarter were resultant from sales booked in 2012. The total built-up area sold in 2012 amounted to 0.3 million sum the majority of which were villas given their typically larger size. We believes that Maar’s ability to sustain its sales momentum in 2015 will be the key factor in the developer’s fair value calculation going forward. Click here to find out more.
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SPOTLIGHT ON: The New Suez Canal

Coverage of Egypt in the international press was dominated this weekend by the inauguration of the New Suez Canal. A snap 3am Thursday notification of the logistics for the accompanying press junket set the tone, with journalists complaining (to take but one example) of poor organization — and of being dumped in a facility with no camera angles, no water and no ability to leave.

What El Sisi said: Joined by world leaders including French President François Hollander, Russian Prime Minister Dmitry

 Medvedev and Greece’s Alexis Tsipras, President Abdel Fattah El Sisi used the inauguration to deliver a message that was as much about national and global security as it was economics, saying: “Over the last two years, Egypt’s contributions to the world have extended beyond this new canal, to encompass other vital areas. History will judge that Egypt and its people confronted the most dangerous, extremist, terrorist thinking, which, had it prevailed, would have set the world ablaze..”

A modern, democratic, civil state: “The opening of the New Suez Canal to maritime traffic on such an unprecedented accelerated timetable has an impact that goes beyond political and economic goals. It underscores the humanitarian dimension to which the Egypt of the future aspires; one where dignity, justice and stability are realized in a modern, democratic, civil state,” El Sisi added.

What’s next? The president noted that with the inauguration now done, the development of the Suez Canal Zone is the state’s next priority, saying that the “general outline” for the zone “has now been approved,” with East Port Said harbor and the related industrial zone being the first priority areas. El Sisi also highlighted the ongoing expansion of the national highway network, the reclamation for agriculture of 1 mn feddans of desert land, and the construction of new cities.

Quoth the local press: In between the de rigueur outbreaks of sycophantic hyperbole, the domestic press offered a few pieces of what could pass for useful information, including:

• The SCA announced new transit fees on 6 August, the first of its kind since 2003, Al Borsa reports, with fee increases ranging from 5% to 12%.
• The Armed Forces Engineering Authority, the Suez Canal Authority and Dar El Handasah are gearing-up to breathe life into the new Suez Canal Axis development program, Al-Borsa reports.
• Al-Borsa also runs a lengthy puff piece quoting senior bankers as noting the industry is ready to support the development of the Suez Canal Axis, a revelation that we’re sure you found as shocking and insightful as we did.

International coverage:

FT: Heba Saleh plays it right down the middle in “Egypt pins hopes on Suez Canal expansion.”

WSJ: “Shipping analysts say the Egyptian government’s forecasts for Suez Canal traffic to double and revenue to triple over the next eight years are unrealistic.” (Suez Canal Expansion Expectations Overblown, Analysts Say)

Washington Post: “There was no public feasibility study, just an order from the new president. He wanted Egypt to dig a new Suez Canal. Oh, and he wanted it completed in a year.” (Egypt’s ‘gift to the world’ cost USD 8 bn and probably wasn’t necessary)

New York Times I: “An image of President Abdel Fattah el-Sisi of Egypt triumphantly piloting a ship full of smiling Egyptians appears Wednesday on the cover of the state-owned newspaper Al Akhbar al Youm to mark the successful excavation of what he has called a new Suez Canal. Really, it is a new channel, parallel to about a third of the existing canal, intended to reduce shipping bottlenecks. Mr. Sisi, the former general who ousted Egypt’s first freely elected president two years ago, announced the plan last year…” (Egypt’s President Leads Celebration of ‘New’ Suez Canal)

New York Times II: “As Egypt’s government congratulated itself on Thursday at the very grand opening of a new side channel to the Suez Canal, the reaction on social networks to the televised pageantry was divided between praise for President Abdel Fattah el-Sisi from his supporters and jeers from his critics.” (As Egypt Unveils Its ‘New Suez Canal,’ Dissenters Make Voices Heard Online)

Bloomberg: “Less clear are the economic benefits of what billboards in Cairo and New York’s Times Square dub ‘Egypt’s gift to the world,’ which will raise capacity and shorten the time it takes to sail the 193-kilometer (120-mile) link between the Red Sea and the Mediterranean.” (Egypt Shows Off USD 8 bn Suez Canal Expansion That the World May Not Need. See also Egypt Opens USD 8 bn ‘New Suez Canal’ Boosting El-Sisi)

DIPLOMACY

With heads of state and other world leaders descending on Egypt for the inauguration of the New Suez Canal, Presidential Abdel Fattah El Sisi ran a busy diplomatic receiving line stretching from Wednesday well into the weekend, with statements from Ittihadiya confirming meetings and calls including:

• French President François Hollande, likely Egypt’s greatest friend in Europe. The two discussed unspecified “ways to strengthen relations.”
• Chinese Culture Minister and Presidential Envoy Luo Shugang, who again noted that El Sisi has been invited to return to Beijing for the 3 September celebration of the end of the Second World War.
• Russian Prime Minister Dmitry Medvedev, where talks focused on strategic ties, a gentle message to the United States that while the Abrams turrets and jets are appreciated, Mother Russia will always have a place in the nation’s hearts.
• Greek Prime Minister Alexis Tsipras, who discussed Egypt’s ongoing implementation of high-level economic agreements between the two countries. Tsipras invited El Sisi for a state visit to Athens for bilateral talks and a trilateral Egypt-Greece-Cyprus summit to discuss issues in the Med. Egypt and Cyprus have deepened political and economic ties over the past year.
• Algerian Parliamentary Speaker Abdel Qader bin Saleh, who delivered a letter from Algerian President Abdelaziz Bouteflika that “underlined Algeria’s continued commitment to enhancing ongoing cooperation to contribute to preserving security and stability in the two countries and the Arab region.”
• Nitin Gadkari, India’s Minister of Road Transport, Highways and Shipping and Special Envoy of the Indian Prime Minister. Gadkari “underlined his country’s support for Egypt’s counter-terrorism efforts,” while El Sisi welcomed more security cooperation with India and Indian investment both in general and in the Suez Canal Area Development Project.
• Yemeni President Abd Rabbuh Mansur Hadi, where El Sisi confirmed Egypt’s ongoing participation in the GCC-led military intervention there.
• Zainul Abidin Rasheedon, Singapore’s Special Envoy to the Middle East, offered his nation’s support to Egypt in helping develop port management systems, water desalination plants and helping overhaul the education system, among other fields.

** Further reading in Diplomacy: The Washington Post takes a hard look at U.S. diplomacy in “How the Obama White House runs foreign policy,” which includes an extended passage on how American policy on Egypt was driven — more than anything else — by indecision and endless meetings that went nowhere.

EGYPT IN THE NEWS

Although international media coverage of Egypt focused largely on skepticism about the New Suez Canal, we’re seeing increasing evidence that the Western press is picking up on the resilience of terrorist groups and the turn to violence of some Ikhwanis, particularly among its younger members. We expect the story to continue to gain steam in the weeks ahead, particularly after the New York Times picked up where the AP’s Brian Rohan left off, offering us “Push for Retribution in Egypt Frays Muslim Brotherhood.”

Sayeth the Times: “A veteran leader of the Muslim Brotherhood was so alarmed by the rising calls for violence from the group’s youth that he risked arrest to urge the movement to stay peaceful. … It was a losing argument, or so it now appears. The police in Cairo soon found and arrested him. A chorus of Islamists mocked him on social media as naïve, unrealistic and hypocritical. And his manifesto for ‘peacefulness’ was quickly drowned out by official statements that have come closer to endorsing violence than anything the organization has said or done in more than four decades — an ominous turn for both Egypt and the West.”

Meanwhile: Writing for the FT on the 70th anniversary of the U.S. nuclear attack on Hiroshima, Council on Foreign Relations chief Richard Haass briefly mentions Egypt in the same breath as Saudi Arabia, the UAE and Turkey as a nation that may one day possess a nuclear weapon.

Finally: Vice offers us a roundup of a half-dozen stories in the international press on rising disdain in some quarters for the hijab, declaring: “Egyptian Restaurants Can No Longer Refuse Service to Women with Veils.”

WHAT YOU CLICKED ON LAST WEEK

The most-clicked links in Enterprise last week were:

• Jimmy Kimmel’s movie reviewer is an Egyptian named “Yaya” (Youtube)
• Al Hayah reporter tries to coax a televised confession from a 20-year old sentenced to death in absentia (Youtube)
• On undergarments, China, globalization and Assiut (New Yorker)
• Egypt raises electricity prices for mid-to-high household usage (Reuters)
• Emirates NBD PMI sags (Markit Economics, pdf download)

ENERGY

Electricity Ministry backing for four renewable energy power stations in the Suez Canal development axis
Al Borsa | 06 August 2015
The Ministry of Electricity is promoting the establishment of four major renewable energy projects on the Suez Canal Development Axis, including two solar power plants, one wind plant, and one geothermal facility. Sources within the New and Renewable Energy Authority (NREA) have stated that it does not own land in the area but plans to obtain a land grant through the Egyptian Electricity Holding Company. The cabinet had approved earlier granting land for the development of power plants in the Gulf of Suez. (Read in Arabic)

New strategy for renewable energy investments and a new consortium
Al Ahram | 05 August 2015
The Association for New and Renewable Energy Investors (ANREI) will hold extensive meetings next week to devise a comprehensive strategy and mechanism for investing in this sector in Egypt, said ANREI chairman Maged El-Din El Manzalawi. He added that the association will seek to invest in Suez Canal zone, which is dire need for renewable energy projects. Furthermore, the association plans to form a consortium of Egyptian companies with experience in renewable energy projects, and will be funded entirely with Egyptian capital. (Read in Arabic)

New Ismailiya now connected to gas grid
Amwal Al Ghad | 07 August 2015
The Ministry of Petroleum has completed connecting the New Ismailiya City to the gas grid, to coincide with the inauguration of the New Suez Canal Project, according to a report from Sinai Gas, the company tasked with the project, to minister of petroleum Sherif Ismail. The project is part of the state plan to design and build new cities to service the Suez Canal project. (Read in Arabic)

Ministry of Manpower issues launches free petroleum services training program
Al Mal | 07 August 2015
The Ministry of Manpower and Immigration is accepting applications for a free petroleum services training program that includes a three-month stipend and a accredited completion certificate. Applicants must be male, between ages 19 and 25, and posses a five-year technical industry diploma. The workshop will be held in cooperation with Weatherford International and Misr El Kheir Foundation. (Read in Arabic)

Russian energy minister visits Egypt to discuss petroleum product sales
El Watan | 05 August 2015
Russian Energy Minister Alexander Novak, who attended the Canal opening on 6 August, explored exporting petroleum products to Egypt in addition to discussing joint nuclear power projects, in light of MoUs signed by Rusoil and the EGPC for a future petroleum trade deal in July, Sputnik news agency reports. (Read in Arabic)

ASORC targets the production of additional 600K tons of gasoline per year in new project
Al Mal | 05 August 2015
The Assiut Oil Refining Company plans to increase its capacity to produce high-octane gasoline by 600K tons per annum through its new facilities at its Assiut refining plant. The plant, which produces 4 mn tons of gasoline per year, supplies 80% of Upper Egypt’s demand for petrol. (Read in Arabic)

Libya to get electricity from Egypt, Tunisia to ease blackouts
Reuters Arabic | 05 August 2015
Libya will import electricity from Egypt and Tunisia and rent generators as it struggles with power outages that have plunged its main cities into darkness, the Tripoli government said. Libya will get 250 MW of electricity from neighboring Tunisia and 75 MW from Egypt, Khalifa al-Ghwell, Prime Minister of Libya’s Tripoli-based government, which is not internationally recognized, said on Tuesday. (Read in Arabic)

INFRASTRUCTURE

Implementation commences on new Red Sea-Upper Egypt road, Housing Ministry says
Al Borsa | 08 August 2015
Construction of a new parallel road linking the Red Sea governorate with Upper Egypt has begun, said Housing Minister Mostafa Madbouly. The project, which is being led by the New Urban Communities Authority, is expected to by complete by July 2016. The 22 km highway will cost EGP 104 mn. (Read in Arabic)

Damietta Port Authority to purchase EGP 400 mn dredger
Al Borsa | 06 August 2015
The Damietta Port Authority (DPA) is studying the purchase of an EGP 400 mn dredger that it believes would allow it to better cope with annual silting that prevents the entry of many ships to the port, DPA chairman Vice Admiral Ayman Saleh said in a statement on Thursday. Saleh said up to 21 mn cubic meters of sand wash into the port each year; the dredger would ensure the authority can keep a navigable channel clear at all times. (Read in Arabic)

East Delta Electricity Co. to start Suez Steam Plant by February 2016
Al Borsa | 08 Aug 2015
East Delta Electricity Production Company (EDEPC) plans to start operations of the Suez Steam Plant to generate electricity by February 2016. EDEPC president Hamdy Azab said that the Suez Steam Plant, part of the national Five Year Plan, consists of a steam boiler that uses natural gas, a diesel fuel reserve system, and a 650 MW steam turbine. Azab added that the EGP 4.7 bn project is being financed by the EDEPC, the African Development Bank, the Islamic Development Bank, and the National Bank of Egypt. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

Mahlab forms Higher Committee for Cotton
Al Mal | 08 Aug 2015
Prime Minister Ibrahim Mahlab will head a Higher Committee for Cotton, with other committee members et to include Trade and Industry Minister Mounir Fakhry Abdel Nour, Investment Minister Ashraf Salman, and Agriculture Minister Salah Helal. The committee is tasked with “saving the cotton and textiles industry from collapse,” Al Mal reports. (Read in Arabic)

HEALTH & EDUCATION

State now funding 100% of treatment costs for multiple sclerosis patients
Al Mal |  08 Aug 2015
The General Authority for Health Insurance recently included multiple sclerosis under the health insurance umbrella, according to authority head Ali Hegazy. Multiple sclerosis is the most recent disease to be included under the insurance program despite treatment costs upward of EGP 7,000 per month. Approved therapies are now fully covered by the authority, with zero patient co-pay, down from a 50% co-pay when MS was first added to the list of conditions for which state funding is available. (Read in Arabic)

A private university and a recreational center to be built in the city of New Assiut
Al Borsa | 08 August 2015
The New Urban Communities Authority allocated 20 feddans in the city of New Assiut for the establishment of a private university and an additional 13 feddans for a recreational center. Ahmed Omran, the city hall’s chairman, has said that the private university will include four colleges, a university administration and a conference hall, among others. As for the recreational center, it will include an amusement park, sport courts and a roman amphitheater. He also added that the city is expected to have its first hypermarket over an area of 18 feddans. (Read in Arabic)

Protocols in health, electricity and environment signed with Congo
Al Ahram | 06 August 2015
Three cooperation protocols have been signed between Egypt and the Democratic Republic of Congo on Thursday in the fields of health, electricity and environment, with Prime Minister Ibrahim Mahlab in attendance. Both countries’ health ministries have signed a memorandum of agreement for the establishment of an Egyptian medical center in Kinshasa. In addition, an agreement has been signed to establish two solar stations in Kinshasa, where the Egyptian government will grant Congo  EGP 6 mn. The third agreement involved exchanging expertise between the two countries in the fields of managing biodiversity and natural reserves. (Read in Arabic)

TELECOMS & ICT

Mobile phone lines are selling for EGP 50 on the grey market
Al Borsa | 08 Aug 2015
The National Telecommunication Regulatory Authority’s (NTRA) decision to limit the sale of cell phone lines to primary distributors has seen the price of new lines — once given away for free at points of sale — reach as much as EGP 50 per line in some Cairo neighborhoods. Lines are officially priced at EGP 15 per; the story quotes the owners of mobile phone shops as saying the cost per line could reach EGP 80 “in the near future.” Lines are selling for EGP 40-50 in Mohandiseen and Nasr City, and for EGP 20-25 in lower-income areas including Shubra and Imbaba. (Read in Arabic)

AUTOMOTIVE & TRANSPORTATION

First Cairo Metro line gets second air-conditioned train
Egypt Independent | 06 Aug 2015
The second air-conditioned train on the Cairo Metro’s first line, running from El-Marg to Helwan, is now operational with a third train expected before the end of this month. The Ministry of Transportation’s contract with Hyundai Rotem involves 20 air-conditioned trains for the first line at a total cost of EGP 2.2 bn. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

ITC doubles graduates of technical training programs
Al Mal | 08 Aug 2015
Graduates from skills programs backed by the Industrial Training Council more than doubled to 77,825 in FY 2014/15 as part of the Trade and Industry Ministry’s bid to grow the pool of skilled labor. (Read In Arabic)

3,000 stores to participate summer sales, says Ministry of Supply
Amwal Al Ghad | 08 August 2015
The Ministry of Supply announced summer sales will commence on 17 August and continue for a month in cooperation with the Federation of Egyptian Chambers of Commerce. As many as 3,000 public- and private-sector companies are expected to participate in the summer sales, according to Supply Ministry Khaled Hanafy, saying discounts in the 5-50% range would stimulate consumer spending. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Al-Wafd’s Sec-Gen resigns in protest
Al Shorouk | 08 Aug 2015
New Wafd Party Secretary-General Bahaa El Din Abou Shoka submitted his resignation on Saturday without revealing why. The resignation comes after current party head Sayed El Badawi backtracked on resigning from his post. Shorouk reports Abou Shoka’s resignation as protest to El Badawi’s recent policies, including his allegedly backtracking on a pact that would have seen Abou Shoka serve-out the rest of El Badawi’s term. (Read in Arabic)

ON YOUR WAY OUT

Sudan, Egypt de-escalate fishing dispute: A carefully choreographed release of prisoners on both sides of the border came to an end on Wednesday with the release by Khartoum of 101 Egyptian fishermen detained in April and put on trial for illegally entering Sudanese waters. The men, most of them from Daqhaliya, were released after President Abdel Fattah El Sisi ordered the release of some 44 Sudanese alleged to have illegally crossed the border with Egypt; the Egyptian presenting ordered the Sudanese flown home at state expense, paving the way for the fishermen’s release and setting the stage for Sudanese President Omar Al-Bashir to attend the inauguration of the Suez Canal on Thursday, Ahram Online reported.

Prominent radical Islamist cleric dies in jail, say security sources: Morgen Salem, a leading member of Salafiya Jihadiya, died in his sixties of natural causes, reported Reuters. Salafiya Jihadiya, established by the brother of Al Qaeda leader Ayman Al Zawahiri, was once considered the most prominent militant group in the Sinai Peninsula before it was overshadowed by Daesh.

The UAE officially handed over development projects worth USD 4.9 bn to Egypt at a signing ceremony attended by Prime Minister Ibrahim Mahlab and UAE Minister of State Sultan El Jaber. These projects are wide ranging and positively impact the average Egyptian in multiple ways, said Mahlab. They included the construction of 50K homes, 100 schools, 78 medical facilities, 25 grain silos, 600 busses, sewage systems in rural villages and vocational training programs, Al Ahram reports.

BY THE NUMBERS

USD CBE auction (Tuesday, 04 August): 7.7301 (unchanged since Sunday, 05 July)
USD parallel market (Tuesday, 04 August): 7.88 (unchanged from Sunday, 26 July)

EGX30 (Wednesday): 8,114.09 (-0.83%)
Turnover: 342.4 mn
EGX30 Year-to-date: -9.10%

WTI: USD 43.87 (-1.77%)
Brent: USD 48.61 (-0.91%)

TASI: 8,654.64 (-1.55%)
ADX: 4,835.47 (-0.15%)
DFM: 4,123.34 (-0.99%)
KSE Weighted Index: 417.03 (-0.89%)
QE: 11,770.25 (-0.56%)
MSM: 6,430.290 (+0.01%)