Abraaj to buy 100% of Nile Badrawi Hospital; Security forces mistakenly kill 10 tourists

TL;DR

• Egyptian security forces mistakenly killed 2 Egyptian civilians and 10 Mexican tourists
• Ahram claims new cabinet to be announced today, publishes partial list of candidates
• Abraaj to acquire 100% of Nile Badrawi Hospital in EGP 750-800 mn transaction –report
• President El Sisi’s remarks on the constitutional role of parliament raises questions, concerns and commentary
• Algeria’s Bouteflika purges top generals in bid to leave civilian state as his legacy
• Yakuza classic Battles Without Honor and Humanity described as Japan’s “Godfather” movie series, trailer in today’s Worth Watching
• ** By the Numbers + Fitch’s vote of confidence in the Egyptian economy **

WHAT WE’RE TRACKING TODAY

Egyptian security forces mistakenly killed 2 Egyptian civilians and 10 Mexican tourists, according to a statement from the ministry of interior and as reported by the BBC. Ten other individuals were also injured. The tourists were reportedly travelling in a convoy of four vehicles before entering into a prohibited area of the Western Desert known to be a hideout for Islamist militants. This comes just one day after Daesh had declared that they were present in the area. Reuters notes that the MOI has promised a full investigation as to why the tourists were in the restricted area.

Interim prime minister Sherif Ismail will formally announce the new cabinet on Monday after meeting with potential candidates on Sunday, Al Ahram reports, citing unnamed sources. Sources told Al Ahram that the newly formed government will not witness “dramatic changes.” The ministers of electricity, planning, transitional justice, civil aviation, international cooperation, investment and finance will likely remain the same, according to the sources. The most notable candidates nominated for their respective positions include:

• Tarek El Molla as the new minister of petroleum, replacing Sherif Ismail who is set to head the new government. El Molla has served as Chairman of the state-run Egyptian General Petroleum Company (EGPC) since August 2013.
• Reda Mosaad, former director of the General Education Sector at the Ministry of Education, as the new minister of education, replacing Moheb Al Refai.
• Potential candidates to replace former agriculture minister Saleh Helal include: Former Principal Bank for Development and Agricultural Credit (PBDAC) Chief Mohsen Batran, agricultural expert and advisor Mohamed Fathy, and former academics Mohamed Othman and Ezz Al Din Abou Steit.
• Potential candidates to replace Antiquities Minister Mamdouh Eldamaty include: Mohamed Hamza, Dean of Cairo University Antiquities Department, Mohamed Abdel Latif, Islamic and Coptic Antiquities Chief, and Ashraf Shaalan, President of the National Center for Scientific Research and Higher Education.
• Alaa Awad, president of the immigration sector in the ministry of manpower, as new minister of manpower and immigration, replacing Nahed Ashri.

Meanwhile, Ismail has yet to comment on either the anticipated announcement of the new government on Monday or any of the specific candidates listed above. For more on speculation on the composition of the new cabinet, see our summary in the Speed Round below.

US Attorney General Loretta Lynch will present an update on the US investigation into the unfolding FIFA corruption scandal.

WHAT WE’RE TRACKING THIS WEEK

The most important news of the week will come out on Thursday, when both the Central Bank of Egypt’s Monetary Policy Committee and the U.S. Federal Reserve’s Open Market Committee will speak to interest rates. Here at home, the MPC faces conflicting impulses (see today’s note from Pharos in By the Numbers), while the FOMC faces pressure to make clear whether it will raise rates by year’s end, as is widely expected.

Some emerging market central bankers just want the U.S. Federal Reserve to put us all out of our misery: Rip-off the bandage and raise interest rates, because at this point, uncertainty is probably worse than a rate hike, the FT suggests. The Federal Open Market Committee will meet 16-17 September.

The United Nations General Assembly (UNGA) will hold its 70th session tomorrow. Expect social media campaigns targeting President Abdel Fattah El Sisi to be organised by the Ikhwan.

It’s all conferences, all the time this week, with offerings including various permutations of Cityscape, the SPE North Africa Technical Conference and Exhibition, and the Eurasian Economic Commission (EEC) high-level meeting, all in Cairo. Details in Calendar, below.

The Rugby World Cup begins on Friday with hosts England taking on Fiji. You can view the fixture list here. In the Middle East, games will be shown on OSN.

ON THE HORIZON

Saudi Arabia announced that 24 September will be the first day of Eid Al Adha, Al Borsa reports.

SPOTLIGHT ON President El Sisi’s speech on Sunday

President Abdel Fattah El Sisi addressed on Sunday a group of students at Suez Canal University in commemoration of University Student Week. The president’s speech touched on a wide range of issues, including the upcoming parliamentary elections, former prime minister Ibrahim Mahlab, the constitution, and street protests.

On Mahlab: The president thanked Prime Minister Ibrahim Mahlab, who was in attendance, for his service to the country. “Anyone who assumes a position of leadership in this current period sacrifices a lot of things for the sake of this position. We Egyptians must be more careful whenever we react or comment [on events].” Mahlab will stay on as an advisor to the president, as stated by television presenter Ahmed Moussa on his program on Saturday, (Read in Arabic).

On parliamentary elections: El Sisi called on Egyptian youth to participate in the upcoming parliamentary elections, saying that the upcoming parliament will either support or hinder the country’s development.

On demonstrations against the Civil Service Act: President El Sisi called on government employees protesting the Civil Service Act to bring an immediate end to their demonstrations. “Are you not aware of what is happening in this country? If this country is able to give you what you want, it will. In 2011, the state paid EGP 70 bn to government employees. Now, we pay EGP 218 bn in government wages,” said El Sisi.

Constitution: Commenting on the constitution, President El Sisi stated that, “This constitution was written with good intentions that conferred wide-ranging powers on parliament. Countries, however, are not built merely on good intentions.” The ambiguity of the statement has already launched speculation and commentary, with Al Mal reporting that a number of prominent political figures have stated that the president intends to amend the constitution in order to limit the powers of parliament, (Read in Arabic). Tarek El Nigida, legal advisor for El Tayar El Shaaby El Masry, believes that the President’s comment is a clear indication that he intends to make substantial changes to the constitution, effectively transforming Egypt into a country ruled and governed by one man.

(Watch the speech in Arabic, running time: 36:15, low-res. A partial transcript, sans the remarks on the constitution, is available in Arabic in AMAY with a summary available on Ahram Online)

LAST NIGHT’S TALK SHOWS

Sunday night’s episode of Hona El Assima began with coverage of President El Sisi’s aforementioned speech. Presenter Lamis El Hadidy, provided her own unique spin on President El Sisi’s comments regarding the constitution: “People are worried the president intends to amend constitution, altering the balance of power between the legislative and the executive branch. They, however, have misinterpreted the statement. The president only made this statement in order to encourage Egyptian youth to participate in the upcoming parliamentary elections.”

Meanwhile, Ibrahim Eissa, host of ONtv’s 25/30, sharply criticized Egyptians who have called on President Sisi to alter the constitution. “These individuals who are describing the constitution as an opponent or a hindrance to the president are guilty of stupidity. When they make these demands they are guilty—whether they realize it or not—of attempting to transform Egypt into a dictatorial state.”

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SPEED ROUND

Abraaj to acquire 100% of Nile Badrawi Hospital in EGP 750-800 mn transaction –report: Abraaj Capital, the leading emerging markets private equity firm, has reportedly struck an agreement to acquire Nile Badrawi Hospital. The transaction is the PE firm’s latest foray into Egypt’s highly fragmented healthcare sector, following its acquisition in July 2014 of 100% of Cairo’s Cleopatra Hospital in an EGP 770 mn transaction and 51% of Cairo Medical Center for an estimated EGP 100+ mn. All three hospitals are in the c. 150-bed range. Last year’s acquisitions, coming closely on the heels of Abraaj’s roll-up of Al-Borg and Al-Mokhtabar labs into Integrated Diagnostics Holdings, prompted attacks from entrenched interests in the medical professional. Abraaj closed the Nile Badrawi agreement after convincing the family of founding Hossam Badrawi (the MD and former parliamentarian) to sell rather than retain a minority position, Al Borsa reports, citing sources close to the transaction. Al Borsa says Abraaj will look to deepen Nile Badrawi’s oncology offering as part of a drive to differentiate the institutions from competitors. Matouk Bassiouny was legal advisor, while EFG Hermes was independent financial advisor.

IMF talks are still on: A delegation from the International Monetary Fund will be in Cairo tomorrow for talks with senior government officials, Al-Borsa quotes an IMF spokesperson as saying. As we have previously reported, the IMF team will be headed by Egypt mission chief Chris Jarvis and is expected to touch on the value-added tax (VAT), final accounts for the 2013-2014 fiscal year, and the budget for the current fiscal year. CBE governor Hisham Ramez is also expected to brief the delegation on monetary policy. The routine talks had previously been expected in June and are not, contrary to what was reported at the time, Article IV consultations. The report on the last round of Article IV discussions was out this past February (pdf download).

Ismail mum on composition of cabinet, but outlines policy platform congruent with predecessor’s: Prime Minister-designate Sherif Ismail refused to speculate on who might join him at the cabinet table, noting that “we are still in talks and are committed to [forming a government] by the president’s deadline this weekend.” Speaking with Al Masry Al Youm on the sidelines of general assembly meeting yesterday, Ismail noted that health, education and the garbage crises would be his three top priorities after his cabinet is sworn in. Ismail also said he was committed to seeing national projects implemented on previously-agreed timelines, closing the budget deficit, and addressing the nationwide shortage of FX.

The ministers of education, higher education, justice, and endowments will be replaced in new cabinet -Source: New faces will likely be tapped for each of the four portfolios in the cabinet reshuffle set to be concluded by Saturday, according to a source within the Cabinet speaking to Daily News Egypt on Sunday. Following the final meeting of the outgoing Cabinet on Saturday, Al-Borsa managed to get a quote out of Investment Minister Ashraf Salman saying he was uncertain about his continued involvement in the new government, but says his comments on devaluation during the Euromoney conference were misconstrued and were not meant to imply cabinet was looking to horn-in on the Central Bank of Egypt’s territory.

Nominees to replace endowments minister revealed as Ismail begins consultations: Petroleum minister Sherif Ismail is trying to keep the selection process out of the media spotlight, opting to host discussions at the petroleum ministry, DNE reports, noting rumors that the minister of religious endowments Mohamed Mokhtar Gomaa may be connected to the same land agreements as former minister of agriculture Salah Helal. The two likeliest candidates to replace Gomaa are Azhar deputy Abbas Shuman and Mohey Afifi, according to the report.

Ismail government intends to keep Khaled Negm as minister of communications, Al Borsa sources say: The PM-designate Sherif Ismail intends to keep Khaled Negm as Minister of Communications and Information Technology, an unnamed high ranking government official told Al Borsa. The source said that Negm has had success in reducing internet prices and improving mobile communications. Negm, however, told Al Borsa, that he has not received official word he will be rejoining cabinet this coming weekend. (Read in Arabic)

Some civil servants to get pay rise: President Abdel Fattah El Sisi issued a decree on Sunday granting state employees not covered by the provisions of the Civil Service Act a pay rise, according to the Official Gazette. The employees will receive a 10% raise outside of their official salary, which cannot be combined with the annual pension raises issued in July 2015. The Finance Minister will administer the raises, according to the decree. The decree applies largely to state-employed professionals regulated by separate acts of parliament, including judges and lawyers, diplomats, doctors, and university professors.

The introduction of the VAT could see state coffers swell by as much as EGP 30 bn, a new study by the Egyptian Center for Economic Studies (ECES) finds, according to Ahram Online.

The hotel sector has performed particularly well in 2Q2015 but, during the quarter, “all sectors of the Cairo real estate market continued to exhibit positive performance and improved sentiment,” JLL’s 2Q2015 Cairo real estate market overview noted. The report says demand for offices in Central Cairo fell as businesses are looking to move to satellite cities, especially New Cairo because of the availability of better infrastructure, accessibility, and parking. You can download the report here.

The Russian industrial zone set to be built in Egypt will be located in Attaqa near Suez, a source at the Industrial Development Authority told Al Borsa. The zone will be built on 2 mn sqm and will be the starting point for a free-trade zone between Egypt and Russia. Attaqa was picked by the Russian side, the source added, as they wanted to participate in Suez Canal axis development projects.

CAO not entitled to reopen ‘Presidential Palaces’ embezzlement case: Official: Despite media reports to the contrary, the Central Auditing Organisation is unable to reopen an investigation into the “presidential palaces” embezzlement case involving former president Hosni Mubarak, his two sons, and other individuals including former prime minister Ibrahim Mahlab, according to former CAO deputy Assem Soliman speaking to Daily News Egypt. Soliman explained that once the case “has been referred [to the courts], the agency becomes shackled, and it cannot comment on the verdict.”

There’s nothing like fresh investment in an industry on the ropes: Al-Ahram for Printing and Packaging (APP) is looking to install new production lines as part of a plan to double its production capacity — and profits — within the next two years, Al Mal reports. Company chairman Ahmed Al-Alimi says APP is evaluating offers from global equipment suppliers as it is struggling to keep pace with customer demand. Anecdotally, we’ve heard of publishers that had previously printed in the Nasr City Free-Zone moving to Al-Ahram on budget constraints, but the institution’s longstanding reputation for being unable to wring payment out of its customers — and ever-smaller print runs at newspapers, magazines and book publishers alike — raise serious flags about the viability of expansion. The company, which says it reported an 11.5% uptick in profits to EGP 4.4 mn in 1H2015, recently received approval for a capital increase to EGP 41.6 mn from EGP 26 mn, Al-Borsa notes.

Ahli Bank of Kuwait’s acquisition of Piraeus Egypt is waiting for final approval from the security apparatus, according to reports in the domestic press. The Central Bank of Egypt has signed off on the paperwork, but security approvals related to Piraeus branches in Sinai are still in process. The USD 150 mn acquisition is expected to have all necessary approvals within a week. Al Borsa notes that foreign investors are legally barred from owning land in Sinai due to security concerns. Ahli Bank has countered, however, that they will only be acquiring Piraeus Bank branches whose ownership by a foreign party has already been approved.

More than 11k employees of state-owned Egyptian Iron and Steel have postponed their planned sit-in until Prime Minister-designate Sherif Ismail forms a new government and looks into their concerns, per Al Masry Al Youm. The ironworkers had threatened to strike yesterday if they did not receive assurance of an Eid bonus, El-Watan had reported on Saturday.

The EGP was stable against the USD at the Central Bank of Egypt’s Sunday action, with the bank selling USD 37.8 mn at a cutoff of 7.7301. The USD continued to change hands for well over EGP 8.00 on the parallel market yesterday, with volumes reportedly remaining low.

Leon Black’s Apollo Global Management is reportedly bidding for a controlling stake in Saudi supermarket chain Al Raya, Bloomberg said. “Two other United Arab Emirates-based private equity firms, Fajr Capital Ltd and Gulf Capital, have also teamed up to submit a bid” for the chain, which could be valued at around USD 460 mn.

Israel approves pipeline for exporting natural gas to Jordan; Qatar offers to pay for pipeline to export Israeli gas to Gaza: A pipeline to export natural gas from Israel to Jordan received preliminary approved by a government committee on Tuesday, according to the Israeli finance ministry, but still awaits approval from the Israeli cabinet. The proposed pipeline would span 15.5 km. In related news, the Knesset gave non-binding approval in a 59-51 vote on the compromise agreement between the Israeli government and the Leviathan field partners Noble Energy and Delek Group, Reuters reports. Israel is also considering a Qatari proposal to allow the Gulf state to pay USD 10 mn to build a pipeline to link the offshore Israeli gasfield Tamar to Gaza’s lone power station, the Times of Israel reports. The proposal is currently under consideration, and talks are also underway between Qatar and Israel for the Gulf state to pay Israeli power companies to build a 100MW solar plant for Gazan energy consumption.

Algerian president Bouteflika sacks head of military intelligence, other generals in attempt to leave a more civilian-led Algeria as his legacy: Algerian President Abdelaziz Bouteflika removed Mohamed Mediene, who served as chief of Algeria’s DRS military intelligence service for more than twenty years, from his post on Sunday, following other recent reports of the dismissal of powerful generals. Bouteflika’s recent purge, according to unnamed security officials, is an attempt to limit the power of Algeria’s DRS military intelligence service to empower the creation of a civilian-led state before Bouteflika’s departure from power. “The purged generals included the head of presidential security and the director of internal security, the sources said,” Reuters reported. “A DRS with less, or zero, political and economic prerogatives will reinforce its capabilities to focus on its core business, which is to collect intelligence and put it in the hands of the chief of staff and the president,” said the source.

A sign of the times? Commercial Bank of Dubai shareholders voted down a proposal to issue a USD 750 bond to fund its future growth in what the UAE’s The National said is a “sign of increasing investor caution over the macroeconomic outlook. The Dubai-based lender said that it fell short of a 75% majority needed to get the green light to issue the so-called Tier 1 Capital Perpetual Securities after 39.24% of shareholders present at the meeting yesterday rejected the proposal.

EGYPT IN THE NEWS

News of Egyptian security forces killing at least 10 Mexican tourists in the Western Desert are dominating headlines on Egypt in the foreign press this Monday morning. This story is being covered by Reuters, The Guardian and Sputnik, among others.

(“While it will take years to produce gas from the field commercially, this is nonetheless an undeniably good story for the Egyptian government,” Brookings’ Adel Abdel Ghafar writes describing Eni’s gas discovery at the Zohr field. Abdel Ghafar expects the new discovery to “provide impetus for Israel to hasten its production” given Zohr’s export potential. “The key issue now is how fast can this field become operational, and at what cost,” he writes, “The government has yet to publish a detailed costing of the project, including who will bear the investment cost, and more importantly, how exactly the revenues from the field will be distributed” (except that we have already reported on the broad lines of the production sharing agreement, which have been made public). That aside, Abdel Ghafar also says the dropping energy prices and the re-entrance of Iran into the international energy market add risks – the biggest of which is the rising level of expectations and questions about the government’s ability to meet them.

WORTH READING

Fake KFCs Thrive in Sudan Despite U.S. Sanctions: “Stepping into Kafory Fried Chicken in Sudan’s capital, Khartoum, the 43-year-old engineer could choose anything from a crispy-chicken sandwich and Coke at 30 Sudanese pounds to a 15-piece bucket for seven times that price. That’s expensive for the country, blighted by decades of armed rebellions, where … the nearest African outlet of Kentucky Fried Chicken is in Aswan, Egypt, about 950 kilometers to the north. ‘I have a good customer base and I’m looking into opening more branches,’ Atef Abdullah, the restaurant’s owner, said. … He gestured at the company emblem of a grinning, avuncular gentleman: ‘That’s a picture of my brother, not Colonel Sanders.’”

WORTH WATCHING

Battles Without Honor and Humanity: Described as the Japanese equivalent of the Godfather movie series, yakuza film ‘Battles Without Honor and Humanity’ is the first of a 5-film arc (with an additional remake series consisting of 4 movies) by director Kinji Fukasaku. Fukasaku previously directed Battle Royale, a movie about a class of children who are kidnapped during a field trip and taken to an island where they are given weapons and are forced to fight to the death. Based on a true story, the first of the ‘Battles Without Honor’ films is set in the immediate aftermath of World War II, and as noted by film critics, completely deconstructed everything that was standard about yakuza in Japanese film. Rather than make yakuza films emphasizing their sense of loyalty and tradition, Fukasaku turned the chivalrous image of the yakuza on its head, showing instead a world of violence and chaos, bereft as its name indicates, of any romanticized code. The movie was recently screened at the 2015 Cannes Film Festival, and readers may also recognize this instrumental piece from Kill Bill, although the music was first used in the remake of ‘Battles.’ (Watch the trailer for Battles Without Honor and Humanity (1973) in Japanese with English subtitles, running time: 3:15)

ENERGY

TÜV Rheinland acquires Shell’s PEC technology
Trade Arabia | 12 Sep 2015
TÜV Rheinland said it reached an agreement to acquire Shell Global Solutions’ Pulsed Eddy-Current (PEC) technology, which is, according to Trade Arabia, used mainly in the Middle East’s oil and gas sector. “TÜV Rheinland’s local subsidiaries in the UAE, Saudi Arabia and Egypt offer PEC to the Middle East’s oil and gas industry, especially to companies searching for advanced non-destructive testing techniques and inspections through insulations,” the release noted. Early detection of corrosion in hard-to-reach areas is one of the benefits of PEC technology, the company said. (Read)

CBE allocated USD 1.2 bn for summer fuel imports, EGPC asks for USD 2.4 bn a quarter
Al Borsa | 12 Sep 2015
EGPC has received USD 1.2 bn from the CBE in July and August to finance the importing of oil products, Chairman Tarek El Molla said. EGPC, however, has asked the CBE for USD 2.4 bn to be allocated during 1Q 2015-16. El Molla says the CBE resorted to borrowing in order to be able to meet its USD 800 mn of monthly outlays. Even though the monthly import bill has dropped to USD 550 mn from USD 800 mn last year, El Molla says the LNG import bill will double to USD 240 mn from October as the second FSRU begins operating. (Read in Arabic)

UEEPC secures USD 150 mn syndicated loan
Al Borsa | 12 Sep 2015
Upper Egypt Electricity Production Company (UEEPC) secured a USD 150 mn syndicated loan to finance the purchase spare parts needed for eight units of the West Assiut power station. NBE, CIB, and Banque Misr are amongst the five banks providing the loan. The exact shares of each bank in the loan are yet to be finalised but Al Borsa expects NBE to provide the largest portion given its ability to provide foreign currency relatively easily. (Read in Arabic)

EGAS to enter new round of negotiations with Union Fenosa and SEGAS next week
Al Borsa | 13 Sep 2015
The Egyptian Natural Gas Holding Company (EGAS) will begin a new round of negotiations next week with foreign partners in the Damietta LNG plant, Spanish gas company Union Fenosa and SeaGas, to withdraw its 2014 arbitration claim against Egypt demanding USD 8 bn in compensation as a result of losses incurred due to lack of gas supply. SeaGas and Union Fenosa own a 52% share of the Damietta LNG plant. A Union Fenosa delegation will visit Egypt next week for negotiations, an EGAS official told Al Borsa. Former Petroleum Minister Sherif Ismail had visited Spain last week to start negotiations with Fenosa officials. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Agriculture Ministry finalising plans to deliver diesel to farmers this week
Al Borsa | 12 Sep 2015
The Agriculture Ministry is finalising its preparations for its mechanism to deliver diesel to farmers in the upcoming period. A committee was formed to ensure diesel quotas are distributed fairly on farmers. The committee is also assessing mechanisms to ensure the delivery of fuel smart cards. The plans will reportedly be presented to the incoming cabinet this week. (Read in Arabic)
Agriculture Ministry allocated land for dairy farm in South Sudan
Al Borsa | 13 Sep 2015
A 300 feddan land in South Sudan was allocated for an Egyptian cattle and dairy farm, Al Borsa reported. Interim Agriculture Minister, Hossam Moghazy, announced that Egypt’s Ambassador to South Sudan is signing of the contract for the farm this week. The farm, which is set to create 50 jobs locally, is aimed at improving the partnership between Egypt and South Sudan and increase the dairy supply there. The piece did not mention if any of the farm’s products will be marketed in Egypt. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Transport Ministry to issue tender for a maritime container terminal
Al Shorouk | 13 Sep 2015
The Transport Ministry will issue an EGP 400 mn tender to develop a maritime container terminal at the Damietta Port, Al Shorouk reported. The Ministry will self-finance the project which includes dredging works as well as adding 630 metres of new piers. An unnamed Dutch company will reportedly begin the dredging operations within the next 18 months. (Read in Arabic)

BANKING + FINANCE

ADIB Capital arranging a USD 100 mn loan for EGPC
Daily News Egypt | 12 Sep 2015
ADIB Capital is arranging a USD 100 mn loan agreement for EGPC to finance energy product imports, Daily News Egypt reported. ADIB Capital’s parent, Abu Dhabi Islamic Bank, will be a major participant in the loan, source said. Daily News Egypt also reports that ADIB Capital is looking to expand oil and gas sector loan agreements. (Read)

Beltone Financial starts leasing operations, buys out Skidmore’s shares in subsidiary
Al Borsa | 13 Sep 2015
Beltone Financial announced the signing of a contract to form a leasing company, Al Borsa reported. Beltone Leasing will have an EGP 50 mn capital with Beltone Financial owning a 50% stake. Beltone Financial’s AGM also approved of the acquisition of Skidmore Financial’s 51% in Beltone Information Technology. (Read in Arabic)

** Further reading in Banking & Finance: Economists Charles Goodhart and Enrico Perotti wrote a column arguing “that the unprecedented expansion of banking in mortgage lending resulted in a high degree of maturity mismatch. The solution to this problem should focus on greater maturity matching, and not using insured deposits. One avenue to do so is by securitising mortgages with little maturity transformation. Another is to create intermediaries providing mortgage loans where the lender shares in the appreciation, while assuming some risk against the occasional bust.”

OTHER BUSINESS NEWS OF NOTE

Arab Monetary Fund to loan USD 339 mn to Egypt
Al Borsa | 13 Sep 2015
The Arab Monetary Fund (AMF) will loan Egypt some USD 339 mn to facilitate structural changes in the financial and banking sector. Hisham Ramez, CBE Governor, and AMF Chairman Abulrahman Al Hamidy signed the agreement on Sunday. In a statement, the AMF said that the loan aims to support the Egypt’s banking sector, the depositary system for government securities, and credit guarantees for SMEs. Including this facility, the AMF has provided Egypt with a total of 13 loans worth an estimated USD 1.6 bn. (Read in Arabic)

REGIONAL

IDF forces stormed Al Aqsa mosque at dawn on Sunday, attacking worshippers with rubber bullets, resulting in multiple injuries, Ma’an reports. Witnesses say that the IDF blockaded the mosque and prevented Palestinians from entering the site. Agricultural Minister Uri Ariel stormed Al Aqsa along with 30 illegal settlers. Meanwhile, the Egyptian Foreign Ministry released its usual statement denouncing the attacks and warning that “violations against holy sites” will undermine “peace efforts”.

ON YOUR WAY OUT

Following strong summer bookings, Germany’s FTI began operating its increased winter flights to Egypt over the weekend. 507 tourists from Frankfurt, Munich, Leipzig, and Düsseldorf were flown to Luxor, Al Shorouk reported. FTI is also operating four weekly shuttle flights to Gouna.

There is no fuel shortage in Egypt, the head of the Federation of Egyptian Chambers of Commerce’s fuels sector insisted, according to Al Ahram. There is just a seasonal increase in demand with the start of the new school year as well as Eid Al Adha.

Pollution suspected behind massive fish kill: Tons of dead fish emerged on the Nile River banks in Al Rahmaneya and Shabrakheit centers in Al Beheira Governorate, Al Masry Al Youm reports. An unnamed government source told Al Masry Al Youm that industrial waste from Al Gharbiya Governorate caused the incident.

Zamalek defeated South African Orlando Pirates 4-1 on Sunday to advance to the semi-finals of 2015 CAF Confederations Cup to meet Etoile De Sahel of Tunisia, FilGoal reports. Mahmoud Abdel Moneim “Kahraba,” Moustafa Fathy, Ahmed Tawfik and Ahmed Mekky scored a goal apiece. (See game highlights here, running time 6:04)

If, like us, you were unfortunate enough to catch any of the game early yesterday morning between Egypt and the United States at the FIVB Volleyball World Cup, then you already know that Egypt lost 3-0 to the Americans.