Welcome to the future, Marty McFly

 

TL;DR

Salafi support vanishes during round one of elections, Fi hob masr on track to place well. (What We’re Tracking Today)

CBE leaves EGP unchanged at yesterday’s FX auction (Speed Round)

Draft of value-added tax bill ready for Cabinet review, says Tax Authority head (Speed Round)

EFSA in push to develop leasing market (Speed Round)

Morgan Freeman is in Cairo to tell ‘The Story of God’ for Nat Geo (Images of the Day)

France to build four new FREMM frigates for Egyptian Navy in Alex (National Security)

By the Numbers + The truth about the World Bank loan to Egypt: Relief for hosting Syrian refugees?

WHAT WE’RE TRACKING TODAY

For those of you of a certain age: Welcome to the future. Today is 21, October 2015 — the date to which Marty McFly travelled in Back to the Future Part 2. (Watch, running time: 1:06)

Persistent rumors claim election results could be out today despite a High Election Commission statement that it would release tallies from the first two-day round of balloting only on Thursday. Al Mal claims the Sisi-loyalist coalition Fi hob masr (For the Love of Egypt) will take at least 60 seats. Fi hob masr is led by former intelligence officer turned analyst and commentator Sameh Seif El Yazal. The outcome is unlikely to be as rosy for the Islamist Al-Nour party: Ahram Online’s Gamal Essam El Din reports that the Salafi group failed miserably at the polls in round one, with its best hope now being that a handful of its candidates could perform well in next week’s runoffs. In other election news: 30,531 Egyptian expatriates voted in the first round of parliamentary elections, said HEC president Ayman Abbas.

A Chinese delegation arrived in Cairo yesterday to meet with top officials and business leaders. The delegation is primarily interested in investment opportunities along the Suez Canal Axis, AMAY reports. The delegation will be in Egypt for four days

Chief of Defence Staff Mahmoud Hegazy headed a military delegation to Amman yesterday to meet his Jordanian counterpart and top officials from the Jordanian Defense Ministry. The two are expected to discuss military cooperation and an exchange of expertise.

The Wind Power North Africa, focusing on Egypt, Morocco, Libya and Tunisia, concludes today at the Sonesta Hotel Tower & Casino.

WHAT WE’RE TRACKING THIS WEEK

Amer spin-off Porto Holding to start trading on the EGX tomorrow: Amer Holding Group and Porto Holding will begin trading on the bourse on Thursday, Reuters reported. The two companies were formed from the demerger of Amer Group. Amer Holding Group — which will oversee the real estate, hotel investment, and restaurant portfolio — will begin trading at EGP 0.58 per share. Porto Holding will begin trading at the price of EGP 0.29 per share and will oversee several resorts and spas in the Ain Sokhna area on the Red Sea. (Read)

LAST NIGHT’S TALK SHOWS

Ibrahim Eissa began Tuesday night’s program with a discussion of the preliminary results of the first round of parliamentary elections. The host expressed his satisfaction with the subpar performance of the Salafi Nour party, but warned viewers that the fight against extremism was far from over. He then called on the state to use every weapon in its arsenal to bring an end to extremist thought.

Eissa: “The state should focus all of its instruments — cultural, economic, educational — on the eradication of extremist thought in the Salafist stronghold of Beheira. Yes, the Salafists did not perform well in the first round of elections, but this is not an indication that they will fail fare poorly in the future.”

Eissa then transitioned to an interesting and pertinent discussion on Egyptian female heads of households. “34% of Egyptian families have a woman as their primary breadwinner. Additionally, 50% of these women live and work in the country’s supposedly backward rural regions… Despite their contribution to their country and families, Egyptian women are prohibited from undertaking simple tasks for no apparent reason. They cannot, for instance, apply for a passport on behalf of their sons…This does not make any sense. Why do we treat our women so poorly? How can we treat our sisters and mothers so poorly when they contribute so much?”

Tuesday’s Top Ten: “Why are Egyptian women more likely to vote in parliamentary elections.” Highlights:

10- Women are very practical
5- Egyptian women are sick and tired of the oppression they face, particularly at the hands of Islamists.
4- They are patient and determined

Lamis El Hadidy, host of CBC Egypt’s Hona El Assema, also opened with a run-down of the first round of parliamentary elections before introducing viewers to her only in-studio guest for the night, former player and current head of football operations for Ahly SC, Abdelaziz Abdelshafy. The guest discussed his history with the club and his thoughts on the football team’s future.

On the other side of TV land, Amr Adeeb continued with his special coverage of the first round of parliamentary elections. Mohamed Badran, president of the Mostaqbal Watan(Future of the Homeland) party and a youth organizer for Abdel Fattah El Sisi’s presidential campaign, called-in with commentary on his party’s plans for the future.

Badran: “Mostaqbal Watan is the only party in which youth make up a significant portion of its candidate list… We rejected the proposal that Adly Mansour preside over parliament. Additionally, we reject the Ismail government and have plans to form a new government that better serves the Egyptian people.”

For more on Badran, see a recent profile on him by the Atlantic Council, which suggests the possibility that he and his party are being groomed for a role as the “new NDP.” Read The 24 Year Old Party Leader who Seeks to Rule Egypt

** 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

The CBE kept the exchange rate steady at EGP 7.9301 per USD at yesterday’s FX auction after letting the national currency’s value drop in the previous two sales, Reuters reported. The next auction is scheduled for Thursday, a week before the next Monetary Policy Committee meeting. Currency traders were taken by surprise at the decision.

Draft of VAT act complete, will not increase cigarette prices -Tax Authority head: The drafting of the value-added tax (VAT) law is complete, said the head of the Tax Authority Abdel Moniem Matar. The draft law will be passed on the cabinet for its approval, he added. Most goods will retain their legal taxation status in the current sales tax regime. Matar also added that cigarette and food prices will not be increased in the near term. (Read in Arabic)

Connect Aphrodite to Zohr, instead of Egypt’s mainland, Cyprus suggests: Cypriot Energy Minister Giorgos Lakkotrypis is proposing laying a pipeline connecting the Aphrodite field to Egypt’s Zohr, rather than connecting the pipeline to Egypt’s mainland directly, Cyprus Mail reported. The distance between the two fields is just 90 km and under the proposed scenario, “the facilities to be built on top of the Zohr site would pool that field’s gas with those of Aphrodite, and then the combined gas transported via a single pipeline to Egypt.” The proposed plan is supposedly quicker and cheaper, but an analyst says it will require a larger-capacity pipeline would be needed at the receiving terminal at Zohr. Charles Ellinas, an energy analyst, says the plan is not viable as the Aphrodite-Zohr connection would take longer, and even if the price of oil rebounds to USD 90 per bbl, gas exports to Europe would still not be competitive. “By the most conservative estimates, Cypriot gas arriving in Egypt through Zohr would go for … USD 6. Add USD 2 to liquefy the gas for export to Europe, USD 1.5 more to transport it, and USD 0.5 for re-gasification… Thus far, the price of Cypriot LNG has shot up to USD 10. And that’s not even counting the profit margins for [BG] for exporting to Europe,” Ellinas explained.

Eni will struggle to bring Zohr online by 2017, Sasol says: Eni will struggle to bring the Zohr gas field online by 2017, despite claims to the contrary, Sasol Petroleum International’s Commercial Manager Stephen Trueblood said. “It is 30 tcf with a single well in 1500 metres of water a long way from shore,” he explained. Zohr aside, Trueblood said Egypt is a place where “unconventionals might work,” which could be viable for shale oil and gas. (Read)

EGAS is preparing to tender for a third FSRU, sources told Al Shorouk. The aim is to have a third vessel operational by mid-next year to allow Egypt to up its imports of LNG, the sources added. Meanwhile: The second FSRU, commissioned from BW Gas and docked at Sokhna, is expected to begin operating before the month’s end.

Speaking of LNG: Noble Group said Egypt’s plans to commission a third FSRU “could see it become one of the five largest importers.” The company, not to be confused with Noble Energy, said it will “shortly” deliver its first mn tonnes of LNG to Egypt within the first year of its operations in the LNG segment, according to Bloomberg. “That’s about how much Portugal buys annually, according to the International Group of Liquefied Natural Gas Importers.” Noble Group said it won a “‘significant number of slots’ for medium-term delivery in the latest tender to supply Egypt, the fastest-growing market for the fuel,” without specifying the number of cargoes it is providing.

The full table of 17 public-private partnership projects announced at the PPP conference and published in Al Mal. Included are desalination projects, infrastructure development, IT infrastructure and innovation centers, and four sports stadiums. We’ve come up with an English translation of the table here for those of you so inclined.

The Housing Ministry will issue tenders for 20.5k feddans of land at the new administrative capital and New Al Alamein projects, said Assistant Housing Minister Khaled Abbas at the Third Annual PPP conference. Tenders for 10.5K feddans land for the new capital will be issued in January. The first phase of development on the project will be waterworks and utilities projects. These will be followed by the construction of ‘urban communities,’ universities, and mosques. New Alamein projects will consist of infrastructure development and roadworks, Al Mal reports.

The Housing Ministry will sign a contract with Orascom Construction in two weeks to establish a power plant which will supply 70% of the electricity to the Abu Rawash area, said Hassan Al Far, who heads the Executive Agency for Water & Wastewater. Orascom Construction and its consortium partner Aqualia are currently developing a wastewater treatment facility in Abu Rawash, as we have previously reported. Speaking at the PPP conference, Al Far stated that the Housing Ministry is line to complete Egypt’s entire pipeline of water utilities projects within five years. His agency had been the main beneficiary of recent loans from AfDB to build water infrastructure for rural villages, Al Mal reports.

With leasing gaining considerable attention from the cabinet economic group, the Egyptian Financial Supervisory Authority has issued new real estate financing regulations governing “lease-to-own” contracts, partnership leases and murabahatransactions, for the first time in Egypt, according to an EFSA press release. The regulations define and set standards for each of these activities, in addition to setting guarantees in the event a borrower dies, defaults or refuses to pay and compels the lender to completely disclose terms and conditions of the lease agreement.

Investment Minister Ashraf Salman will headline a conference on leasing to be held 10 November, Al Masry Al Youm reports.

NUCA will invest EGP 5 bn into establishing companies to administer the 1.5 mn land reclamation project, new Administrative Capital, announced Housing Minister Mustafa Madbouly, Al Mal reported. The companies seem to be an extension of the new land authority responsible for the allocation of land for development Madbouly had mentioned at the Third Annual Public Private Partnership (PPP) conference.

Doctor’s Syndicate criticizes Interior Ministry for denying healthcare to Esraa El-Taweel: The Doctors’ Syndicate sent a statement to the Prosecutor General Nabil Sadeq, Minister of Interior Magdy Abdel Ghaffar, and the National Council for Human Rights on Sunday requesting an urgent visit of physiotherapists and neurosurgeons to examine detained photojournalist and activist Esraa El-Taweel and provide her with needed treatment, DNE reports. El-Taweel was detained along with two friends last June; she suffers from a spinal injury that, if left untreated, may result in permanent paralysis.

CORRECTION: We reported that Amer Group was launching Porto New Cairo in Monday’s edition. The new project is Porto Heliopolis.

EGYPT IN THE NEWS

Al Jazeera journalist Mohamed Fahmy sat down for his first American interview since his release from prison in Egypt with PBS’ Margaret Warner.

Mohamed Fahmy: The Scorpion super maximum security prison is probably the worst prison in the Middle East. And there, I was in the terrorism wing with Mohamed al-Zawahri, the brother of the Al-Qaida leader, and ISIS fighters and extremists who had just arrived from Syria and Libya to topple the Egyptian regime and members of the senior Muslim Brotherhood group…

Margaret Warner: Now, this latest State Department human rights report talks about torture, beatings, isolation. Were you subjected to any of that?

Mohamed Fahmy: I wasn’t. I had been to three prisons throughout my 438 days in detention. I didn’t see any torture. I was not ill-treated or abused in any way.

(Watch the interview, running time: 9:27, full transcript follows below)

Young Egyptians voice concerns through Twitter, not the ballot box: The BBC dusts off a trope from 2011, claiming Egyptian youts were more engaged in the parliamentary elections by social media than the ballot box. The hashtag “no-one went” seems to have found a 65,000 strong audience, with many Egyptians youths angry that “Egypt will never change” and frustrated by pictures of napping poll station employees. A counter hashtag, “Go and vote for Egypt’s Future,” was critical of voter apathy. Singer Mohamed Attia tweets back: “It is the epitome of sarcasm when people ask why the young population did not participate in the election… the young people have had their revolution stolen. They are disillusioned… killed… imprisoned… praying day and night ‘Allah Help Me Immigrate’”. (Read)

WORTH READING

Teen who hacked CIA Director’s email tells how he did it: Wired magazine interviews the American teenager who says that he and two others hacked the private email of CIA Director John Brennan, to find out how he went about getting access to Brennan’s account in detail. “They called Brennan’s mobile number, using VoIP, and told him he’d been hacked. The conversation was brief. ‘[I]t was like ‘Hey,…. its CWA.’ He was like ‘What do you want?’ We said ‘2 tn dollars hahhaa, just joking,’ the hacker recounted to WIRED.” (Read)

IMAGES OF THE DAY

Morgan Freeman is in Cairo filming the National Geographic documentary The Story of God. View images here, here, and here, with the last via Egyptian Streets. Some mistakenly posted pictures of Freeman when he was with Jack Nicholson for their 2007 movie Bucket List. Not to spoil the celebration, but this is probably the closest most of us in Egypt are going to get to see of this film, given it’s title and likely subject matter. If it’s censored, it would make the second time Freeman has run afoul of the censorship authority: His performance as God in Bruce Almighty was banned by film censors in 2003.

DIPLOMACY

EU mulls mission to disarm Libyan factions if unity government in place: According to a European Union proposal seen by Reuters on Monday, the EU has laid out 6 options for how to proceed with the deteriorating situation in Libya, some which depend on the formation of a unity and some which do not. The news came as the internationally-recognized Tobruk-based parliament, which has had to recently extend its own mandate, rejected the United Nations Support Mission in Libya (UNSMIL) proposal for such a unity government on Monday. The EU proposal drafted by the office of the EU foreign affairs chief, would see EUR 100 mn in aid disbursed as well as a military and or civilian mission to help with the “demobilization, disarmament and reintegration” of Libya’s various armed militias.

Arab proposal, said to be sponsored in part by Egypt, to have Western Wall in Jerusalem reclassified as part of Al Aqsa compound stirs controversy and condemnation: A proposal said to be sponsored by Egypt, Kuwait, Morocco, Tunisia, Algeria and the UAE to have the Western Wall, the holiest site in Judaism, as part of Al Aqsa compound, which is administered by Jordan, the New York Times reports. The proposal, which is yet to have been officially announced but which has been viewed by senior UN officials and is said to be part of a draft resolution to the executive board of UNESCO, has already been rejected by the UNESCO director general Irina Bokova on Tuesday. (Read)

ENERGY

BG, Petronas, Edison agree to activate Mediterranean gas development projects
BG, Petronas, and Edison have agreed to activate projects developing natural gas production from the Mediterranean, sources at EGAS told Al Mal. BG and Petronas reportedly said that Phase 9B project of the WDDM concession will begin production in 2Q2017, aiming to add 400 mcf of gas per day to production. Al Mal adds that the tie-in agreement signed between BP and BG in Egypt has already been activated. Edison will initiate the third phase of the Abu Kir development project and aims to add 4,375 bbl of condensates per day. The sources add that Dana Gas is in talks with the Oil Ministry over increasing the purchase price for its produced gas. (Read in Arabic)

Taqa Arabia inks EGP 700 mn funding agreement with Egyptian Gulf Bank
Taqa Arabia announced it inked an EGP 700 mn agreement with the Egyptian Gulf Bank (EGB) to fund its work connecting gas pipelines to residential and commercial buildings in areas it had previously agreed upon with the government. The agreement involves EGB financing the project with a repayment period of up to seven years. Taqa is currently aiming to extend gas to an additional 450k homes, factories and commercial complexes, according to Taqa CEO Pakinam Kafafi, bringing the total to over 1 mn clients in 11 governorates by the end of the year. (Read in Arabic)

Gov’t agencies owe the state EGP 200 bn for petroleum purchases
The ministry of electricity and other government agencies owe EGAS, EGPC and the oil ministry as much as EGP 200 bn, according to government sources, up from around EGP 187 bn at the end of the last fiscal year. The electricity sector owes the most, with a share of over 25% in the receivables, due to not collecting its own receivables for fuel, gas, and other derivatives to other government sectors like transportation and aviation. (Read in Arabic)

INFRASTRUCTURE

EGP 80-100 bn needed to extend sewage network nationally -Housing ministry
Egypt requires EGP 80-100 bn to extend the sewage network across the whole country, an assistant to the Housing Minister said. The Ministry has plans to expand water treatment plant in order to keep up with population growth. It is also issuing projects for two plants on a PPP basis in 1Q2016. (Read in Arabic)

EGYCO, Arab Contractors to build three sewage stations in New Assiut
The Nasr for Buildings and Construction (EGYCO) and the Arab Contractors won tenders issued by the New Assiut City Authority to build three sewage stations at a total cost of EGP 114 mn. EGYCO will build an EGP 76 mn station with a capacity of 750 cubic litres per second, while the Arab Contractors will build two stations, each costing EGP 38 mn, with a capacity of 200 cubic litres per second each. The stations are meant to serve around 500 plots of land in the social housing program. (Read in Arabic)

Soft opening of Cairo Airport Terminal 2 set for March 2016
The soft opening of Cairo Airport’s Terminal 2 is scheduled for March 2016, said Civil Aviation Minister Hossam Kamal, Al Ahram reported. In related news, the minister stated that 85% of all construction work on Egyptian airports across the country has been completed. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Staple commodities must be available to citizens at affordable prices: Ismail
PM Sherif Ismail met with the Supply, Investment, International Cooperation, and Finance ministers on Tuesday to discuss a range of issues including the availability of staple commodities, electricity, and attracting investments. During the meeting, Ismail underscored the importance that the country have an ample supply of staple commodities and that they be available to citizens at affordable prices. Additionally, the meeting discussed the availability of energy to the country’s manufacturing sector, particularly fertilizer, steel, and cement. (Read in Arabic)

MANUFACTURING

500 factories to be operational before the end of November
500 factories will commence operations by the end of November, said Dr. Abla Abdellatif, a member of the Presidential Economic Development Committee. The factories are part of the 1,000 Factory Project, a government campaign to build or revive 1,000 factories throughout the country. The government has provided all of the concerned factories with all the necessary infrastructure to commence operations shortly, she added. The government is also in the process of removing legal obstacles that have hindered the construction of factories in the past. (Read in Arabic)

REAL ESTATE + HOUSING

Abraj Misr to begin building The Link in 2Q16
Real estate developer Abraj Misr (no relation to PE outfit Abraaj Group) announced it would begin its The Link project in Ain El Sukhna and Ras Sedr midway through 2016 at an investment cost of EGP 4 bn. The project consists of two marinas, complete with commercial services, hotels and entertainment in both Ain El Sukhna and Ras Sedr, that will be linked by a 26km water passageway through yachts and ferries, says General Manager Ihab Labib. The project will be built over 4 years and is 60% funded by banks. Abraj Misr are set to complete two other projects in 2018; The Shore in the North Coast and The Gate in Nasr City. (Read in Arabic)

Housing Ministry reaches agreement with residents on Maspero Triangle development
The Housing Ministry has reached an agreement with the residents of the Maspero Triangle redevelopment site to thoroughly assess, register and recognize resident’s properties before they are removed. The agreement would ensure accurate compensations upon resettlement in the new redeveloped site. 4,500 residents have already applied to be registered as residents of the area. It is worth mentioning that nine companies have qualified to bid for the redevelopment project by the Cairo Governorate. (Read in Arabic)

TELECOMS + ICT

ICT Ministry to be restructured; new NTRA chief to be named shortly
The ICT Ministry will be restructured over the coming the period, said minister Yasser El Qadi. In related news, the ministry is in the process of selecting a CEO for the NTRA from a shortlist of three candidates, El Qadi added. The names of the candidates have not been revealed. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

China and Egypt to meet today to discuss crackdown on pesticide smuggling
A delegation of the Chinese Institute for the Control of Agrochemicals under the Ministry of Agriculture (ICAMA) is set to arrive in Cairo today for talks with the Agriculture Ministry on how to curb pesticide smuggling and counterfeit products. (Read in Arabic)

EGX ratified Qalaa Holdings EGP 10 bn capital increase
The Listing Committee of the EGX has approved the listing of new Qalaa Holdings shares following a capital increase that saw the holding company’s paid-in capital jump from EGP 9 bn to EGP 10 bn. New shares will be listed on 26 October. (Read in Arabic)

LEGISLATION + POLICY

No reconciliation for those convicted of building violations
Individuals and institutions convicted of building on agricultural land without permits will not be allowed to enter into reconciliation agreements with the state, Local Development Minister Ahmed Zaki Badr. The minister’s remarks came after a meeting with President El-Sisi where he rejected a draft law allowing for reconciliation agreements presented by the Housing Ministry. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Planning Ministry to complete geographic survey of Egypt
The Planning Ministry’s geographic survey is about 90% complete, said Assistant Planning Minister Mustafa Ghaly. The survey will provide accurate data for mapping and delineating borders and properties. Speaking at the International Statistics Day celebrations, Ghaly stated that location data will be used in government revenue assessment an asset appraisals. He adds that location data from this survey will be embedded in a citizens national ID in the future. (Read in Arabic)

NATIONAL SECURITY

France to build Egypt four FREMM frigates
Egypt has inked an agreement with France to build four FREMM (Frégate européenne multi-mission) frigates, announced Commander in Chief of the Navy Osama Rabei. The FREMM frigates are similar to the FREMM Tahya Masr delivered to the Egyptian Navy in June. The new frigates are to be built in Alexandria, and the first of the new batch will be ready by the beginning of 2017. (Read in Arabic)

ON YOUR WAY OUT

What does the “new normal” mean for the world’s oil exporters? The IMF’s Bruno Versailles says the environment of low oil prices will drive a reduction in government spending and thus having a negative impact of the broader economy. Government deposits in the banking system may also be drawn down in order to cover fiscal deficits – leaving the credit available for the private sector in shorter supply. Versailles also warns that given the steep drop in the oil price, fiscal measures being considered in oil exporting countries are likely to be inadequate. Instead, a move towards more diversified private sector-led economies should be sought, with public expenditures being prioritized and refocused on high return expenditures along with a focus on energy price reforms, especially since “low energy prices benefit the wealthy much more than the poor.” (Watch, running time 02:13)

Fuel smart cards for all registered vehicles have been produced, Oil Minister Tarek Al Molla was informed during a meeting that included the head of e-Finance and the head of EGPC. In total, 5.4 mn cards have been issued, Al Ahram reported.

13 Days of Halloween — Day Two: Jimmy Kimmel has a stupid, recurring prank where he asks parents to tell their children they ate all their Halloween candy and film their (usually) histrionic response. This kid’s reaction is one of the best. (Watch, running time: 1:14)

CALENDAR