Thursday, 17 September 2015

Cell phone calls from the Hotel of Doom: How Egypt is poised to cash-in on North Korea’s “explosive growth”

TL;DR

WHAT WE’RE TRACKING TODAY

We still don’t have a new cabinet. A source told Al Ahram that Prime Minister-designate Sherif Ismail is still meeting with potential candidates for cabinet posts as a number of vetted candidates have declined appointment to the Council of Ministers. It is possible that the swearing-in of Ismail’s cabinet will be delayed, the source said, adding that a number of ministries may be merged to reduce the number of new ministers required.

The CBE’s Monetary Policy Committee and the U.S. Federal Reserve’s Open Market Committee will both meet today to decide on interest rates. Three of five analysts surveyed by Reuters expect the CBE to keep rates on hold, as we noted yesterday. A domestic bank’s treasury director tells Daily New Egypt it is unlikely that the CBE will raise rates “especially since the trend in inflation is declining and the state is keen to stimulate investment and get the economy moving.”

The World Bank thinks emerging markets should “buckle their seatbelts in case the ride gets bumpy in the coming round of tightening, with the institution’s chief economist noting that “financial stress in global markets tends to disproportionately affect emerging and frontier economies.” The WSJ, meanwhile, says that the domestic problems of EMs — coupled with the Chinese economic slowdown and plunging commodities prices — present a more significant threat to emerging economies and their currencies (read, paywall). Worth re-reading in this context: Last week’s FT piece by Simeon Kerr: “Gulf states face ‘double whammy’ of lower oil prices and rate rise,” (paywall).

The Eurasian Economic Commission (EEC)’s three-day, high-level meeting will conclude today in Cairo. We expect they will have bashed-out by now a framework for negotiations on a free-trade pact between Egypt and the Eurasian Economic Union.

Burkina Faso’s military arrested the country’s transitional president and prime minister on Wednesday, the AP reports, in what appears to be a coup d’état. Burkina Faso’s previous president stepped down following protests in October of last year. Burkina Faso’s last coup was in 1983.

The Rugby World Cup kicks-off tomorrow with hosts England taking on Fiji. You can view the fixture list here. In the Middle East, games will be shown on OSN. There are also games on Saturday, Sunday, Wednesday, and Thursday.

WHAT WE’RE TRACKING NEXT WEEK

We’re heading into a three-day work week in Egypt, with the Eid Al Adha holiday beginning on Wednesday, 23 September with wa’fat al-Arafat; the first day of the feast is Thursday. There was no clarity before release time this morning on rumors that at least public servants would have the following Sunday (27 September) off as a replacement for the second day of Eid, which falls on Friday.

This publication is proudly sponsored by

Pharos Holding - http://www.pharosholding.com/

CIB - http://www.cibeg.com/

LAST NIGHT’S TALK SHOWS

CBC all-star Khairy Ramadan began Wednesday night’s episode of Momkin by providing viewers with a run-down on everything that is going wrong in Egypt (at least from his perspective. This reviewer would probably add another four or five bullet points to the list):

  • “The state has decided to merge several of the ministries that existed under Mahlab’s administration. Why were these peripheral ministries created in the first place?”
  • “It has been three days since 92-octane gasoline shortage began. Not a single government employee has provided the public with a reason for its occurrence.”
  • “The CBE’s decisions are leading the country into a crisis. Pharmaceutical companies will likely face significant problems over the coming days.”

Ramadan then transitioned to an unexpected, yet on-point discussion on the inhumane treatment of stray animals in Egypt, with guest Dina Zulfikar, an animal rights activist, offering some rather interesting insights. “The state imports poisonous materials, worth approximately USD 50 mn, to rid itself of its stray dog epidemic. Placing these poisonous materials on the street contaminates soil, posing a threat to humans as well,” said Zulfikar. For more information on the plight of stray animals in, check out the Society for the Protection of Animal Right’s in Egypt’s (SPARE) website.

Meanwhile, Youssef El Housseiny, host of El Sada El Mohtaramoon, provided viewers with an update on parliamentary elections. The High Elections Committee has prohibited Tawfik Okasha from participating in upcoming elections due to issues related to his personal bank account, explained El Husseiny.

Anyone wondering where Amr Adeeb, host of Al Qahera Al Youm, is? According to the show’s Twitter page, Adeeb will be returning from his summer / autumn hibernation on 1 October. Yalla, ya Amr — we miss you.

** SHARE ENTERPRISE WITH A FRIEND **

Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Speed Round is presented in association with

SODIC - http://sodic.com/

Mexican Foreign Minister Claudia Ruiz Massieu arrived in Cairo yesterday saying her nation expects a full and complete investigation into the accidental killing of eight Mexican tourists. The vacationers were mistakenly killed by Egyptian security forces in the Western Desert on Sunday, reportedly while being guided by an Egyptian tour operator through a restricted zone. “We want to determine the circumstances that led to that unprecedented and unfortunate incident. We were clear in our discussions on that matter, as well the necessity of returning the Mexican injured and dead home as soon as possible,” Ahram Online quoted Massieu as saying at a press conference with Foreign Minister Sameh Shoukry. She also met yesterday with President Abdel Fattah El Sisi, who pledged “full and transparent cooperation,” according to a readout from Ittihadiya carried by Al Ahram. Two more of the slain Mexicans have been identified, including former congresswoman Maria Elena Cruz Munoz, according to the AP.

In related news: The Prosecutor General’s Office has imposed a publication ban on details of the investigation into the case, Al Masry Al Youm reports. Press Syndicate secretary-general Gamal Abdel Rahim criticized yesterday the state’s recent reliance on publication bans, including both the Mexican case and the investigation into allegations of corruption at the Ministry of Agriculture. The gag order is also winning negative publicity in the international press, with the AP noting, “A statement from the prosecutor’s office released on Wednesday evening says the ban applies to all media — print, radio, online, and television, both domestic and international. It says the order will remain in effect until the investigation by the Egyptian authorities into the incident is concluded. It also says the ban does not include statements from the top prosecutor’s office.”

Africa equity star sells-down Egypt and bumps up cash cushion: Citywire AAA-rated portfolio manager Malek Bou-Diab has recently cut exposure to Egypt in his Africa equity fund to pursue opportunities elsewhere. Despite this, Bou-Diab said in a recent investor update, as reported by Citywire: “We think markets’ reaction overlooks some positive developments: Egypt will receive another USD 2.9 bn help from Saudi Arabia despite weaker oil, investments in energy are yielding results, capital gains tax was officially suspended for two years and the corporate tax rate has just been cut to 22.5% from 30.0% … We therefore remain constructive on the country’s medium term outlook,’ he added.” (Read)

With emerging markets teetering on the edge of financial crises and developed ones providing returns of near zero percent, Jim Rogers, who made his name co-founding the Quantum Fund with George Soros, is betting on North Korea. “If I could put all my money on North Korea, I would … It’s where China was in 1980,” Rogers said. “The country has developed a semi-market economy in recent years, leading Rogers to believe that a reintegration into the world economy could be on the horizon,” the WSJ notes. Rogers said North Korea is set for “explosive growth” (not the best word choice when it comes to North Korea, in our view). If it pans out, it’s good news for OTMT, which owns North Korea’s telecommunications operator, Koryolink, and for Orascom Construction Industries, which is developing Pyongyang’s “Hotel of Doom.” It’s great news for Naguib Sawiris seen here holding hands with late dear leader Kim Jong-il. Wondering who that other guy Sawiris is holding so closely? That’s Jang Sung-taek, Kim Jong-il’s brother-in-law and policy advisor, who was executed by Kim Jong-un after being called “worse than a dog.” There is of course, the small matter that according to OTMT’s 1H15 financial statements, as of 30 June 2015, OTMT has yet to be able to repatriate any of its c.EGP 5 bn in cash deposits in North Korea, (Read, pdf).

All Egyptian nationals exempt from military service who graduated university after April 2015 to perform community service: The decision to impose community service in lieu of military service was issued by the social solidarity minister on Tuesday, according to Aswat Masriya.

Egyptian exports fell for the eighth month in a row in August, dropping 20% year-on-year, according to Al Borsa. In the first eight months of the year, the government has only recorded 45% of its projected export proceeds for the whole year. Producers say they’ve been hit by a an FX shortage that crimped their ability to source raw materials.

A primer on what’s going on with the drop in exports: A sharp fall in energy supplies to industry hurt, as did the plummeting value of the euro, which ate into the competitiveness of Egyptian products. The story signals a continuation of a trend. Looking at the numbers ourselves, 3Q2014-15 export proceeds dropped by 30.6% in two years. The major reason for the drop in exports was the fall-off in oil and petroleum product sales, a category that usually accounted for 40-50% of all of Egypt’s exports. Their volume has dropped by more than half in two years. The international drop in energy prices had a direct effect on this decrease. For the larger part, however, increased domestic demand and production disruptions have reduced the share of energy products allocated for exports. This fed into a reduced energy supply to domestic manufacturers and, with the situation exacerbated by the hard currency shortage, forced them to reduce their output altogether, including their export shares. What needs to be done? On paper, the solution is clear: Restoring Energy output is a longer-term target as it requires new production wells to come onstream and refineries to expand capacities; this is already on track. On the manufacturing side, production levels need to be restored through easier access to foreign currency and an uninterrupted supply of energy — and still, this might not be enough, as the fair value of the EGP remains a sensitive issue.

Egypt inches up in EY Renewable energy country attractiveness index. “Egypt moves up to 35th place [up from 37th] as it continues to bolster its renewable energy pipeline, with tenders for a further 200MW of PV, 250MW of wind and 50MW of CSP initiated in August. Separately, the Government has signed a USD 200 mn agreement with Italy’s Building Energy SpA to construct two 50MW PV plants.” (Download the index here, pdf)

** ENTERPRISE is in the market for an outstanding journalist / staff writer / analyst as well as a copy editor to join our growing team. Both vacancies are on our English edition. Egyptian nationals with amazing English skills and strong reading comprehension of Arabic preferred, but we’ll consider foreign applicants who have demonstrated experience in Egypt (journalist / analyst) or a strong interest in the region (copy editor). Interested? Check out our advert on LinkedIn or email patrick@enterprisemea.com with a solid cover letter and three work samples. CVs are nice, not necessary. Sense of humor a must.

By not pressing to create a secondary market for treasuries, Egypt has missed a major opportunity, Patrick Werr writes for The National. Egypt’s government “had promised to require the primary banks … to act as market makers… It never happened and the secondary market is all but moribund,” Werr notes. The larger liquidity pool generated by creating an active secondary bond market “would push down yields, lowering the cost of government borrowing,” as investor demand grows. “If Egypt could get its act together the well managed and relatively sophisticated Egyptian stock exchange would be in an excellent position to capture a portion of the region’s financial transactions,” but, as it stands, the status quo is hurting Egypt.

We all know Egypt’s healthcare system is in poor shape, but some companies are innovating to present new solutions through “healthtech” options. Wamda’s Rachel Williamson tracked down 14 such startups positioned throughout the field covering “hardware, ecommerce, social ventures and standalone digitized doctor shops.” The interactive list contains services from wearables to innovation in diagnostics.

Credit Suisse fined USD 80 mn in dark pool trading charges: Credit Suisse Group AG has been fined USD 80 mn by the US Securities and Exchange Commission for failing to disclose its operations in dark pool private share trading, Venture Capital Post reports. “Dark pools” are anonymous, private exchanges inaccessible to the public and are used to fulfill institutional orders. As data is only reported after the trade, institutions are able to use them to move large trades without affecting the share price. Dark pool trading has grown from 16% of all US stock trades in 2008 to 40% in 2014, according to Reuters, while Venture Capital Post puts it at 20%, without giving a year or source for the figure. On Tuesday, five fund management firms, including Janus Group, formed a group called Healthy Markets to develop industry standards and push policy makers to take action to protect investors, the Wall Street Journal reports. “Dark pools are essential for today’s market structure,” said Tyler Gellasch, Executive Director of Healthy Markets …The problem is too many of them are black boxes.”

In response to the Mecca crane collapse accident that killed more than 100, Saudi Arabia has barred Saudi Binladin Group from taking on new projects in Saudi Arabia, according to Bloomberg Businessweek. The Kingdom’s royal court also banned the group’s executives from travelling until investigations are concluded. The news came as Saudi King Salman bin Abdulaziz ordered that families of the victims be paid SAR 1 mn each in compensation, Al Shorouk reported. Those permanently injured will also receive SAR 1 mn, while less serious injuries will receive SAR 500k.

HATS OFF: CIB’s Yasmine Hemeda won best investor relations professional (Egypt) at the Middle East Investor Relations Society / Extel 2015 awards dinner last night, following in the footsteps of GB Auto’s Hoda Yehia, who took home the same award last year. It’s the second year in a row with a big nod to CIB after the team won Best Company for Investor Relations (Egypt) in the 2014 poll. We’ll have the full breakdown of the winners whenever we receive the formal announcement.

EGYPT IN THE NEWS

As most would expect, the Mexican media, diplomatic community, and the people of Mexico do not seem to be responding well to Foreign Minister Sameh Shoukry’s open letter published in Mexican media on Wednesday. Daily News Egypt has excellent coverage of the reaction to FM Shoukry’s non-apology apology published in Mexican newspapers on Wednesday. The editorial in Wednesday’s El Universal reads “The Egyptian government has tried to blame the travel agency and even the Mexicans, to divert attention from their failure in following the protocols of military procedure … [the]last time their [Egypt’s military] authority was challenged, they undertook a coup against an elected government”. Also writing in El Universal, Mexico’s former ambassador to Cairo Hector Cardenas had the following to say: “… the problem lies in the lack of coordination between three entities, the Egyptian Ministry of Tourism, the army and the tourist police,” saying the tourist police by definition do not have enough information to carry out their duties, as “such information is jealously guarded by the police and the army”. (Read DNE’s roundup of the Mexican press here)

Miguel Ángel Osorio Chong, Mexico’s Secretary of the Interior, said with regard to the aforementioned letter’s analogy between Mexico’s drug war and Egypt’s fight against terrorism: “They are totally different contexts,” (Read in Spanish in Animal Politico)

Eni’s gas finding at Zohr “does come as a disappointment to Israel, which had ambitions to fill Egypt’s growing demand with natural gas from its Leviathan field, which is located 80 miles off its coast and estimated to contain 22 tn cubic feet of natural gas. If Eni can sell the Zohr gas to Egypt, that market will no longer be available to Noble Energy, the Texas-based company that is developing the Leviathan field for Israel,” Vice News writes. The development of the field could mean that “Israel would be forced to piece together smaller buyers, rather than counting on a single, large market such as Egypt.”

Politico’s Sara Stefanini counters Vice News’ piece, saying “Egypt’s gas gain doesn’t have to be Israel’s loss.” Stefanini quotes Eni’s CEO Claudio Descalzi on his ambition to create “an Eastern Mediterranean hub” connecting subsea fields in Israel and Cyprus to Egypt’s pipeline network. More directly, the head of the Greek Energy Forum in Brussels believes the discovery of Zohr will “make Israeli policymakers think more decisively about solutions that benefit both their citizens and their businesses … This is beginning of new story for the East Med.”

WORTH WATCHING

As most of you have already heard, 14-year old Sudanese-American Ahmed Mohamed was arrested on Tuesday at his Irving, Texas, high school for bringing a digital clock to class that he had built himself. An electronics enthusiast, Ahmed had brought the clock to show his engineering teacher, when another teacher became alarmed by the clock’s … alarm. The boy was then arrested, paraded around in handcuffs in front of shocked classmates and interrogated without being allowed to have his parents or a lawyer present. Following news of what transpired, Ahmed received invitations to both the White House in a tweet from President Barack Obama and an invitation to Facebook headquarters in a post from Mark Zuckerberg. Zuckerberg wrote: “Having the skill and ambition to build something cool should lead to applause, not arrest. The future belongs to people like Ahmed. Ahmed, if you ever want to come by Facebook, I’d love to meet you,” in a post that received hundreds of thousands of likes (as opposed to your posts that no one cares about). Watch Ahmed describe in his own words his arrest on Tuesday, (Watch, running time: 2:03)

In somewhat related news, “zero-girl” Mariam Malak, who has caught nationwide and international attention for refuting that the results of her high school exams were deliberately switched with those of another student, has had her appeal rejected by a five-member forensics committee, CNN Arabic reported on Wednesday. Al Shorouk reports that Mariam and her family will hold a press conference today, (Read in Arabic). As her story looks as it may be coming to its unfortunate and possibly inevitable close, here is one last look at her appearance on Al Hayah at the end of July, where a crying and skeptical-looking Mariam is told by the show’s host not to worry and that of course everything will be fine. (Watch in Arabic, running time: 3:33)

DIPLOMACY

UN-sponsored Libya dialogue hits snag as HoR walks out of talks over amendments to draft peace agreement ahead of 20 September deadline: The internationally-recognized government in Tobruk, Libya has walked out of talks over the Tripoli-based Islamist rebel General National Congress’ demanded amendments to their UN-brokered reconciliation agreement, according to the Libya Herald. The House of Representatives, as the Tobruk government is referred to, have recalled their delegates to Tobruk. UN Special Envoy Bernardino Leon insists that talks are ongoing and may witness further changes to the draft agreement. The deadline for the agreement’s approval by all stakeholders was originally set for 20 September, a deadline which has now been thrown into doubt.

ENERGY

ExxonMobil Egypt lubricants workers in Alexandria go on strike
Youm7 | 15 Sep 2015
ExxonMobil lubricants employees in Alexandria went on general strike on Tuesday claiming that management had unlawfully fired an employee. They are also claiming that workers at the Al Maks repository, in specific, are being discriminated against, according to Youm7. The workers are calling for the reinstatement of the fired worker, saying he was never warned or dealt with prior to the termination decision. (Read in Arabic)

Ismail heads EGPC board meeting, ends duties as Oil Minister
Al Masry Al Youm, Ahram Gate | 16 Sep 2015
Sherif Ismail, the Prime Minister-designate, resumed his roles as Oil Minister and headed EGPC’s board meeting yesterday, Al Masry Al Youm reported. The meeting was to review FY 2014-15 financial results. Ismail added that the Oil Ministry’s renewed policy of revising contracts is succeeding in attracting new investments and increasing E&P activities. Ahram Gate says the meeting was the ending of Ismail’s role as Oil Minister. (Read in Arabic and here)

New gas discoveries will not change energy diversification plans
Al Shorouk | 16 Sep 2015
New gas discoveries will not dissuade Egypt from moving forward with its plan to diversify its sources of energy, Mohamed El Sobky, head of the New and Renewable Energy Authority (NREA) said. The government still aims to be generating 20% of its energy using renewables by 2020, El Sobky added. NREA is on track to add 2,300 MW to Egypt’s energy grid, he added. (Read in Arabic)

MANUFACTURING

Inspection fees for industrial chemicals reduced, Abdel Nour decides
Al Masry Al Youm | 16 Sep 2015
The fees for inspecting industrial chemicals have been reduced by 70.8% following a decision by acting Trade and Industry Minister Mounir Fakhry Abdel Nour. Al Masry Al Youm said the cost of inspection was lowered to EGP 700. Restrictions on powder imports were to ensure that no materials that could be used to manufacture explosives enter Egypt. Abdel Nour said lowering fees aimed to facilitate trade movements. The decision to reduce the inspection fees follows major complaints from producers about delays in customs clearance for imported powders used in industrial inputs, an issue we reported on 24 August. (Read in Arabic)

REAL ESTATE + HOUSING

Qatari Diar to announce an EGP 776 mn investment project in Egypt
Al Shorouk | 16 Sep 2015
Qatari Diar is set to announce an EGP 776 mn investment project in Egypt, sources told Al Shorouk. The investment is expected to come through the City Gate project despite political tensions between Cairo and Doha. Qatari Diar is also awaiting approvals to being implementing a project on the Red Sea as well as a residential and hotel complex on Cairo’s Nile corniche. (Read in Arabic)

North Africa Company to complete New Cairo projects in three years
Al Mal | 16 Sep 2015
The North Africa Company for Real Estate Investment (NOAF) is aiming to complete its EGP 4 bn projects in New Cairo in three years, the company said in a statement. The projects include Kattameya Gardens, a 340 villa compound that’s 85% complete and 75% sold at a value of EGP 700 mn, and the EGP 600 mn Nest Cairo, which includes 45 buildings and 900 apartments. (Read in Arabic)

** Further Reading in Real Estate + Housing: The ‘luxury flats’ on Egypt’s Red Sea coast that have cost British holidaymakers their life savings … but have never been finished: Sam Dunn writes on UK pensioners who have lost between GBP 40k – GBP 85k purchasing vacation homes from Iraida Estate Agency’s unfinished Hurghada resort Marina Oasis, which is still being marketed to new buyers. The home buyers have reportedly fought for years to either take delivery of the units or have their money returned, one of whom won a court case in Egypt which has never been enforced. Buyers’ complaints may be found here on complaintsboard.com.

TELECOMS + ICT

MCIT issues pre-qualification questionnaire for EGP 700 mn tender to develop Commercial Register
Al Borsa | 16 Sep 2015
The Ministry of Communication (MCIT) has issued a pre-qualification questionnaire (PQQ) to design and operate systems for the Egyptian Commercial Registration office. The PQQ will be followed by a EGP 700 mn tender. The project aims to build a complete information system in 89 offices and archive all of their information within two years at a total cost of EGP 1.2 bn. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Yalla fe seteen dahya: Al Wasat, the ‘moderate’ Islamist party, said earlier this week it will not run in the upcoming elections for the House of Representatives, adding its statement that it was not a satellite of the Muslim Brotherhood and distancing itself from its support Mohamed Morsi’s run for the presidency. (Editor’ note: Whatever, Abou Ela.) The statement emerged after a ruling by the Administrative Justice Court that could compel the state to pull accreditation from 11 parties with alleged religious affiliations. Parties based on religion are banned under the 2014 Egyptian Constitution (pdf). See Article 74: “No political activity may be practiced and no political parties may be formed on the basis of religion or discrimination based on … [gender], or origin, or on sectarian basis or geographic location.” The Salafist Al Nour party is, shockingly enough, quite dismayed at the notion that they may not be allowed to run candidates. And to think they were trying so hard to be nice: Ahram Online reports that Al Nour “said it decided to ‎field independent candidates in just 50 per cent of ‎constituencies.‎ Shaaban Abdel-Alim, a leading official of the Nour ‎Party, told Ahram Online that, ‘The party has also ‎decided to field two party lists only with 90 seats — in Cairo ‎and South and Middle Delta, and East Delta — instead of ‎four. We have limited the number of our candidates, ‎either as independents or party-based ones, to show that ‎we want to be partners with other political groups in the ‎coming parliament.”

NATIONAL SECURITY

Cairo International Airport’s airspace was closed for 90 minutes yesterday at the request of the military. The Air Force was conducting training manoeuvres, Al Shorouk reported.

China trying to undercut Germany on submarine offer to Egypt: China is attempting to undercut a potential sale of submarines from Germany to Egypt, with China offering cheaper vessels, according to a story that Reuters broke. An Egyptian military source said China had offered to sell submarines to Cairo. “We are studying it, but it is not an easy decision,” said the source, who declined to give details or be identified because he was not authorized to talk to the media. Neither Chinese nor Egyptian officials responded to requests for comment.

The military killed six militants and arrested 22 others on the tenth day of Operation Haq El Shaheed [Martyr’s Right], a military statement announced, Youm 7 reports. One soldier was killed in combat, added the source. 55 terrorists were killed the previous day, according to Reuters, citing a statement from authorities.

ON YOUR WAY OUT

The Cairo Court of Appeal has outlined 12 December as the first hearing in the Raba’a Dispersal case, in which 739 people are charged with murder, possession of explosives and unlicensed weapons, and purposeful damaging of public property, Al Shorouk reported

Both business tycoon Ahmed Ezz and Tawfik Okasha have been formally excluded from the upcoming parliamentary elections. Ezz had recently managed to submit his paperwork after opening up a Post Office account follow his assets being frozen, but sources within the High Election Committee said the account is invalid. Ezz’s lawyer, Mohamed Hamouda, said that he’ll appeal the ruling, arguing that it is illegal to freeze Ezz’s funds through a Post Office account. If you’d prefer to read in English, the latest on the elections is here from Ahram Online.

Al Ahly reached the Egyptian Cup final on Thursday after beating out Petrojet 3-1 in the semi-finals. Mohamed Ragab scored first for Petrojet after 24 minutes of play and Ahly’s Ramadan Sobhy equalized just before the end of the first half. Ahly’s Hussein El Sayed netted his second goal of the competition in 70th minute and substitute Ahmed Fathy finished the night off with a strike just outside the box in the 87th minute. Rivals Zamalek play Somouha tomorrow and will likely face Al Ahly in the final. Check out the league table here on King Fut. (Watch game highlights here, running time 5:28)

Oops: “Zimbabwe’s 91-year-old President Robert Mugabe read out the wrong speech at the opening of parliament on Tuesday, an error which the main opposition quickly used to question whether Africa’s oldest leader was still of a sound mind,” CNBC Africa reported. Completely unrelated: here’s a video of Mugabe explaining how to plant chicken Kievs and how cattle are, as everyone knows, a species of small cats (watching time 01:23).

BY THE NUMBERS
Powered by

Pharos Holding - http://www.pharosholding.com/


USD CBE auction (Wednesday, 16 September): 7.7301 (unchanged since Sunday, 5 July)

USD parallel market (Wednesday, 16 September): 8.12 (unchanged since Monday, 14 September)

EGX30 (Thursday): 7,266.42 (+1.27%)
Turnover: EGP 362.9 mn (23% below the 90-day average)
EGX 30 year-to-date: 18.59%

Foreigners: Net Long | + 3.0 mn EGP
Regional: Net Long | + 23.7 mn EGP
Local: Net Short | – 26.7 mn EGP

Retail: 67.5% of total trades | 67.6% of buyers | 67.3% of sellers
Institutions: 32.5% of total trades | 32.4% of buyers | 32.7% of sellers

Foreign: 21.1% of total | 21.6% of buyers | 20.7% of sellers
Regional: 7.5% of total | 10.7% of buyers | 4.2% of sellers
Domestic: 71.4% of total | 67.7% of buyers | 75.1% of sellers


***

PHAROS VIEW:

A rich dividend play trading at a steep discount to its DV, Alexandria Containers reports a 59.8% y/y surge in 2M-FY16 net income

Alexandria Container and Cargo Handling (ACCH) reported an unaudited net profit of EGP 184.2m in the first two months of FY-16, representing a 59.8% increase compared to EGP 115.3m reported in the same period a year earlier. ACCH handled a total volume of 168,948 TEUs* in July and August 2015, up 5.6% y/y from 159,949 TEUs, and versus our projected 4.3% growth in throughput in FY-16. The firm recorded a 44.1% y/y jump in its top line from EGP 170.9m to EGP 246.2m.

Analyst Comment: Strictly positive and well above expectations. We remind readers that in May 2015, ACCH’s BoD had approved a round of increases in USD-denominated services fees to come into effect in August 2015. Indeed, we infer from the reported figures that the average revenue per container in EGP-terms has shot 32.2% from EGP 1,248.7 in July 2015 to EGP 1,651.2 in August 2015. Obviously, the jump includes the impact of the minor EGP devaluation versus the USD in July. It is also worth noting that our model was based on an average USD/EGP rate of 7.9 in FY-16. Another round of EGP devaluation would further inflate the fast-growing revenue per container in EGP-terms and trigger a steep rerating of the stock. Tap here to learn more about why we feel Alex Containers represents a deep value opportunity, trading at a sharp discount to our conservative FV estimate while at the same time being a strong dividend play.
***


WTI: USD 47.19 (+5.83%)
Brent: USD 50.18 (+5.09%)
Gold: USD 1,120.1 / troy ounce (+1.59%)

TASI: 7,525.3 (-0.3%)
ADX: 4,534.7 (+0.7%)
DFM: 3,597.1 (+1.8%)
KSE Weighted Index: 384.8 (+0.1%)
QE: 11,558.1 (+0.5%)
MSM: 5,777.5 (+0.1%)

CALENDAR

16-19 September (Wednesday-Saturday): Cityscape Egypt Exhibition, Cairo International Convention Centre. Visit the official website here.

20-21 September (Sunday-Monday): Inauguration of Afreximbank Headquarters Building & Investiture of new President, JW Marriott Hotel Cairo, Egypt. You can register for the event here.

23 September (Wednesday): Wa’fat Arafat. (National Holiday)

24 September (Thursday): Eid Al Adha. (National Holiday)

29-30 September (Tuesday-Wednesday): Intelligent Cities Exhibition & Conference, Fairmont Heliopolis, Cairo. View the conference website here.

06 October (Tuesday): Armed Forces Day (National Holiday)

11-12 October (Sunday-Monday): Innovation in Government Conference, Four Seasons Nile Plaza Hotel, Cairo Egypt. Organized by T20.

13 October (Tuesday): Inaugural N Gage Debate tackling the African Tripartite Free-Trade Agreement. Contact N Gage Consulting for more detail on the open session or the individually tailored workshops that follow.

13 October (Tuesday): The Economist Health Care Middle East and North Africa conference, Madinat Jumeirah Mina A’Salam Hotel, Dubai, UAE. View the official event page here.

14-15 October (Wednesday): Muslim New Year (Hegria 1437). Date is tentative and subject to change. (National Holiday)

15-18 October (Thursday-Sunday): Le Marché, the largest furniture and home exhibition in Egypt and the wider MENA region, is set to run 15-18 October

18-21 October (Sunday-Wednesday): Wind Power North Africa, focusing on Egypt, Morocco, Libya and Tunisia.

27-28 October (Tuesday-Wednesday): Solar Projects Egypt.

27-28 October (Tuesday-Wednesday): Housing Egypt Summit, Novotel Cairo Airport. Preceded by a one-day event focusing on financing and mortgages.

29-31 October (Thursday-Saturday): Africa Investment & Trade Summit in Sharm El-Sheikh

3-5 November (Tuesday-Thursday): The 11th World Islamic Economic Forum in Malaysia.

16-17 November (Monday-Tuesday): The 17th Arab Businessmen and Investors Conference in Abu Dhabi.

24-26 November (Tuesday-Thursday): Intergas VII – Oil, Gas & Petrochemicals Conference & Exhibition, Cairo International Conference Center.

24-25 November (Tuesday-Wednesday): Egypt Construction Forum & Awards, Fairmont Heliopolis & Towers, Cairo.

13-16 December (Sunday-Wednesday): Cairo ICT 2015, Cairo International Conference Center.

23 December 2015 (Wednesday): Prophet Muhammad’s Birthday (National Holiday)

03-05 February 2016 (Wednesday-Friday): FRUIT LOGISTICA fresh produce exhibition, Berlin. Egypt is the official partner country of the event, where it aims to raise its profile of agricultural exports to Europe. View the exhibition page here and register online here.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.