Monday, 2 November 2015
El Sisi outlines economic policy in speech to the nation (Last Night’s Talk Shows)
Qalaa’s ASEC Cement sells subsidiaries in EGP 1 bn transaction with Misr Qena Cement (Speed Round)
Flight KGL-9268 broke up at flight altitude (Speed Round)
China bidding for 6 October monorail project? (Infrastructure)
Did Egyptian Centres miss debt repayment deadline? (Speed Round)
CIB completes acquisition of Citibank’s Egypt retail arm (Banking + Finance)
Nassef Sawiris is now largest single Adidas shareholder. (Speed Round)
Qatar and Business Insider: Yalla fe seteen dahya (Speed Round)
By the Numbers + A Single Chart that Should Keep You on Guard — #2
WHAT WE’RE TRACKING TODAY
The Global Women In Leadership Economic Forum 2015 takes place at Jumeirah at Etihad Towers, Abu Dhabi, today and tomorrow.
WHAT WE’RE TRACKING THIS WEEK
The Emirates NBD Purchasing Managers Index for Egypt, Saudi Arabia and the United Arab Emirates will drop tomorrow at 7:30am CLT here.
The 11th World Islamic Economic Forum in Malaysia takes place from 3-5 November.
LAST NIGHT’S TALK SHOWS
President Abdel Fattah El-Sisi spoke on the state of the nation in a speech yesterday in which he outlined the government’s goals and policies. Naturally enough, Egypt’s talking heads were polarized by the president’s remarks.
But first, the facts: Speaking at an Armed Forces event that opened with a moment of silence for the victims of the KGL-9268 crash, the president jumped into national security, Al Mal reports. He stated that the second phase of Operation “Martyr’s Right” is making progress and will continue until terrorist cells in Arish, Sheikh Zuweid and Rafah are eliminated with minimal damage to the lives and property of North Sinai’s residents. The president then moved on to the economy, where his key points included:
Hona El Assema’s Lamis El Hadidy refrained from providing any substantive commentary or analysis: “Today President El Sisi assured citizens’ that the government would intervene in order to stabilize prices. The president also expressed his dissatisfaction with the media, criticizing it for failing to inform citizens in a proper manner… The president also assured citizens that the country’s security situation has improved.”
Ibrahim Eissa, on the other hand, was far more critical, taking El Sisi to task for the president’s remarks on the role of the media: “It is the job of the media to discuss and examine and criticize the president decisions and policies. By doing so, journalists are not belittling or insulting the president, they are merely doing their job… We all appreciate the president and his efforts. But the idea that he is above criticism is a dangerous one. The era of the sacrosanct president is over. It only brought about negative results in Egypt.”
That said, Eissa made sure to praise the president for his defense of the January 2011 revolution. “President El Sisi is the only high-ranking government that believes that the January 2011 was a popular uprising that was carried out by the Egyptian people. The rest of the government, particularly the security apparatus, hates it. They believe that it was conspiracy, an American plot.”
Meanwhile, on Al Qahera Al Youm, Amr Adeeb and co-host Khaled Abubakr offered diverging views on the President’s address; the latter’s comments were entirely laudatory, while the former’s were significantly more critical. “President El Sisi’s address touched the Egyptian street and was one of the best speeches he has ever given,” said Abubakr.
Adeeb: “The paternal relationship that president has with the Egyptian people must end. The president discussed two projects in energy and highway developments worth approximately EGP 250 bn; where will this money come from? We must know… There are two words that the president must use more often in his speeches: ‘income’ and ‘democracy.’”
COMMENTARY: Some in the media are interpreting El Sisi’s response to criticism he received from the media for meeting with officials from Siemens while Alexandria was flooded as an implicit rebuke against all forms of criticism. We take issue with this interpretation, even as we agree that no political leader should be above criticism. However, El Sisi simply said nothing of the sort, and before we elaborate, readers may review the president’s comments on the topic for themselves, rather than take our word for it. (Watch in Arabic until about the 50-minute mark, running time: 3 ½ minutes). In short, the president described such criticism as inappropriate, and said such commentary spreads ignorance in the country. And it does.
The fact that the comments have incensed so many members of the media is possibly related to the fact that El Sisi struck a nerve, and that nerve is: We speak and think of politics in a manner that is too often immature in demanding nothing less than a politician’s personal physical presence at the site of any and all crises, regardless of whether their presence would actually accomplish anything.
As El Sisi pointed out in his response: “And do you think securing these parts for our energy needs isn’t critical? Isn’t energy a crisis too?” What, exactly, was El Sisi supposed to do in Alexandria? Collect rainwater in buckets?
Again, the issue comes down to a typical Egyptian response to any possible action of a politician: “Why isn’t such-and-such politician at this place to oversee the crisis?” And if they do go: “Oh, going there himself, that’s beneath his office. That’s not what so-and-so should be doing.”
Perhaps saddest of all is that we do not see that the rest of the world is laughing at us. Exhibit A: “Unusual for political leaders to posture around aviation crash sites taking up investigators’ time. #7K9268” (View tweet, or check out the same timeline from 1 November for a takedown of the Sherif Ismail photo-op.)
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Misr Qena Cement to acquire two Qalaa subsidiaries in EGP 1 bn transaction. ASEC Cement, a subsidiary of Qalaa Holdings, signed an agreement to sell its 46.5% stake in ASEC Minya and 55% stake in ASEC Ready Mix to Misr Qena Cement for around EGP 1 bn. The agreement should completed by 20 November at the latest, reported Reuters. The transaction will see debt of c. EGP 940 mn deconsolidated from ASEC Cement’s consolidated balance sheet. Qalaa Chairman Ahmed Heikal noted that the divestment will “allow us to achieve our objectives in an expedient way,” noting that Qalaa’s strategy includes “deleveraging at the holding and platform company levels; acquisition of additional stakes in key platform companies; selective investments within existing platform companies; and share buybacks so long as these trade at a significant discount to their fair market value.” Arab Legal Consultants (ALC) were legal advisors on the transaction, while CI Capital was financial advisor. Qalaa’s statement on the subject is online here.
Flight KGL-9268 updates: “The destruction happened in the air, and fragments were scattered over a large area of around 20 square kilometers,” said Viktor Sorochenko, director of the Intergovernmental Aviation Committee on Russian television from Cairo, as reported by Reuters. Russian officials have also ruled out that fuel quality could have been a possible cause. In addition to Egyptian, Russian, German, and French officials, a team of Irish aviation officials are also expected to arrive in Egypt today to assist with the investigation. As noted above in the president’s speech on Sunday, the ongoing investigation could take months to produce results.
Investigators zeroing in on tail section? Among the many theories now circulating is that previous damage to the tail section was a factor. Writes the Wall Street Journal (paywall): “The plane involved had suffered substantial damage in 2001 when the tail struck the runway on landing in Cairo, according to the Flight Safety Foundation’s Aviation Safety Network. That event has captured the attention of safety experts and investigators given that the tail section debris was located apart from the rest of the plane, according to two people knowledgeable about early steps of the investigation.” The New York Times has a very solid roundup on current thinking in the investigation, as does the BBC.
…Tour groups cancel flights to Egypt: Tour groups from Poland and Germany have cancelled planned trips to Egypt, the head of Genial Tours Egypt told Al Mal. The cancellations amount to 10% of the company’s total bookings, he added. Genial Tours expects up to 25% of the bookings to Sinai be cancelled following the crash of the Russian flight.
Yalla fe seteen dahya #1: Qatar Airways has announced that it will re-route flights to avoid flying over Sinai airspace altogether out of “an abundance of caution,” Bloomberg reports.
Yalla fe seteen dahya #2: Check out this morning’s exceptionally insightful photo essay by Business Insider only if you’re suffering from chronically low blood pressure. Gems include the following (all direct quotes):
Fawaz Alhokair’s Egyptian malls unit, Egyptian Centres, has reportedly missed a deadline set by domestic banks to repay its debts, Al Shorouk reported. Egyptian Centres had previously requested an extension to secure funding from a foreign bank as it has been unable to borrow from Egyptian banks owing to a dispute with NUCA. Settlement talks between the group and NUCA are ongoing, the newspaper adds, noting that Egyptian Centres has reportedly reached an agreement to borrow USD 140 mn from a consortium including the World Bank and CIB.
IOC receivables rising again: State-owned EGPC’s dues to international oil companies operating in Egypt have reversed direction, rising to USD 3.08 bn by the end of September, AME Info reported. This compares to USD 2.9 bn owed by the end of August. A source at the Oil Ministry said EGPC will be looking to repay another portion of its dues by the end of the year.
Nassef Sawiris is now Adidas’ biggest single shareholder after it was revealed that he controls a 6% stake of the sportswear giant. The information was made public as a disclosure to the German stock exchange, as required after a stakeholder’s share surpasses a threshold of 5% in a listed company, Business Insider reported.
Orascom Telecom Media and Technology Holding (OTMT) is borrowing EGP 250 mn from Bank Audi to finance the OTMT-ACT Financial acquisition of Beltone Financial Holding, Al Mal reported. On Thursday, EFSA had approved of the offer acquisition presented by the consortium. Al Mal says OTMT has allocated EGP 566.3 mn for its bid and ACT has allocated EGP 84.6 mn. Bank Audi provided letters of guarantee for both bidders. The bidders acquired 3.02% of Beltone Financial’s shares on Sunday — the first day of its mandatory tender offer, which will conclude in 12 November. The consortium bought 4.9 mn shares at EGP 4 per share, reports Al Mal. Beltone Private Equity, a separately incorporate company, is not in play.
GB Auto chairman Raouf Ghabbour spoke at length with Al Mal on the background to his agreement with Aboul Fotouh Group to market and distribute Chery brand cars. The company anticipates selling 1,500 Chery cars per month and could look to take the brand into other markets. He then went on to criticize a number of government policies including labeling cars and parts as nonessential goods, encouraging auto manufacturing while barring imports of spare parts, and its tariff policies.
Trade and Industry Minister Tarek Kabil continued his media blitz on Sunday, with announcements including:
Meanwhile, an “unnamed government official” speaking to Al Borsa said the government plans to pass legislative amendments raising import tariffs on five categories of consumer goods, including certain types of ready-made clothes, raw sugar and furniture. Tariffs will rise 5-40% and would not exceed the limits set by international trade agreements,the newspaper says, saying the measures have the backing of the Egyptian Federation of Industries. The amendments have reportedly been approved by Cabinet and await signoff from Ittihadiya.
Banque Misr cleared the waitlist and backlog of requests to obtain letters of credit on Sunday, proclaimed the bank’s chairman Mohamed Eletreby in Al Mal. The bank managed to make foreign currency available to all its importers, despite an influx of requests that came to the bank on Thursday.
Reham Saeed to stand trial for defaming victim of violence: Following the suspension of her program and the loss of 15 major advertisers, embattled television host Reham Saeed is now set to stand trial on 25 November before Giza Misdemeanor Court for defaming a young woman on her program, the Cairo Post reports. The young woman in question, as we noted in yesterday’s issue, was brought on to Saeed’s program to relate the story of how a strange man approached her in a mall, harassed her, and then when she rejected him, slapped her twice across the face. The entire incident was captured on the mall’s security cameras and has been widely viewed since then. Instead of hearing out the young woman, Saeed accused her of bringing the unwanted attention and physical assault upon herself by wearing a sleeveless shirt.
Health Minister Ahmed Emad will meet with Pharmacists Syndicate chief Mohy El Din Obeid to finalize preparations to launch the Egyptian Drug Authority. The launch of the regulatory body had been on hold towards the end of the previous minister Adel Adawy’s term. They will also discuss the Ministry’s sponsorship of the Wash-Out agreement, the Syndicate’s plan to clear the market of expired drugs, Al Mal reports.
Turkey elections results: AKP secures outright majority in elections redo, supermajority denied. Kurdish-liberal HDP once again secures 10% threshold to win seats in parliament: Erdoğan’s ploy to avoid creating a coalition government and redoing elections under a shuttered media has paid off as his Islamist AK Party regained the parliamentary majority they lost in elections six months ago, according to election results reported by The Guardian. The majority will allow the AKP to return Turkey to single-party rule, but does not grant them the supermajority needed to amend Turkey’s constitution and turn the country into a presidential system. This is thanks largely to the pro-Kurdish, pro-secular HDP party maintaining a tenuous hold above the exceedingly-high 10% threshold needed for parliamentary seats. “I cannot believe this,” said one retired teacher of 59. “I feel heartbroken. [The AKP] steals and kills, they put pressure on everyone, they muzzle the press, but they still win. I have lost faith in this democracy.” Meanwhile, Turkish prime minister Ahmet Davutoglu was quoted as saying his country’s return to one-party rule was a “victory for democracy.”
How 1994 Explains 2016: The year that stunned Jeb, battered Hillary and changed politics as we know it. Michael Kruse for Politico. “‘Had Jeb won in ‘94, he would’ve been the nominee in 2000,’ anti-tax activist Grover Norquist tells me. Many people I talked to, from politicians to analysts to operatives, say the same thing. And Clinton’s failure in her zealous efforts at health care reform, hitched to her role in the debilitating Whitewater hassle, made her conservatives’ top target. ‘I don’t know what’s right anymore,’ she confided that year to an adviser. ‘I don’t even trust my own judgment.’ ‘If you want to see where modern Hillary starts,’ Republican strategist Joe Brettell tells me,’ that’s it—1994.’” (Read)
EGYPT IN THE NEWS
Human Rights Watch released a new report underscoring that “Egyptian authorities have unlawfully prevented scores of citizens from traveling outside the country over the past year. Security agencies are increasingly putting in place restrictive and intimidating measures that include confiscating passports.” HRW says leaders and members of political parties and people associated with NGOs are amongst those barred from leaving the country.
BBC reports on the campaign to free “iconic online activist” Alaa Abdel Fattah. Led by Bassem Youssef, the hashtag “Free Alaa” has surged to become “a top trend on Twitter in Egypt and worldwide.” (Read)
Stress Is Your Brain Trying to Avoid Something, Harvard Business Review, August 2015. “Rather than trying the latest fad, it may be more effective to understand how stress works and where it comes from, so that you can create your own methods for dealing with it.” (Read)
Syrian rebels purportedly keeping Alawite men and women in cages as human shields against airstrikes: As reported by the AP on Sunday, US-backed rebels in Syria have taken to locking up Shiite Alawite men and women in cages to act as human shields against airstrikes. The same piece notes that the same tactic has reportedly been used by the Syrian government, as well as, of course, Daesh. The following video purports to show Alawites in cages, who are made to make pleas for their lives and against further shelling. (Watch in Arabic, running time: 4:23)
FM Shoukry set to arrive in Algeria on Sunday for Libya talks: Foreign Minister Sameh Shoukry was set to arrive in Algeria yesterday for talks on the Libya crisis with his Algerian and Italian counterparts, Ahram Online reported. “Egypt’s foreign minister would stress the necessity of an agreement between the Libyan parties over the National Unity government. The agreement should reflect the political and geographical balance between the different areas of Libya,” MFA spokesperson Counselor Ahmed Abu Zaid was quoted as saying from a statement.
On Friday, the US State Department released the October 2015 batch of redacted emails from former Secretary of State Hillary Clinton’s private email account. The latest release spans her term as Secretary of State, and includes 224 emails related to Egypt from 2009-2012. Most of the emails are simply Anne-Marie Slaughter forwarding her latest op-eds to Clinton. Three emails are mildly interesting:
Doc No. C05792292, 09 May, 2012, Subject: IMF Egypt, from Hillary Clinton to her then-Deputy Chief of Staff Jacob Sullivan:
From: Hillary Clinton: “Tell Anne P to tell E govt we tried.”
Doc No. C05791093, 21 December 2011, Subject: Re: Egypt sees Clinton remarks as “interference”-agency (Reuters) [with regard to the treatment woman received by security forces at protests]:
From: Clinton’s then-Chief of Staff, current vice chair of her presidential campaign Huma Abedin: “It is sad, but you know what I have always said about egyptians…. “
Doc No. C05786361, 29 January 2011, Subject: H: My 2 cents and suggestions on Egypt. Sid
From: Political aide and confidant to the Clintons Sidney Blumenthal:
“1. Mubarak should immediately declare that neither he nor his son will be candidates in national elections to be held in the fall. He should invite UN and international observers to insure that these elections are conducted freely and fairly …”
50 Egyptian companies have signed preliminary export agreements with 70 Ethiopian companies at the fifth Ethiopian Summit 2015, which took place from 28-29 October, according to Al Borsa. These companies hail from the chemical manufacturing, marketing and advertising sectors. Over 200 Ethiopian companies have expressed interest in doing business with Egyptian companies, said Islam Anany, head of the Finance Committee at the FEI.
Rosatom officials to visit Daba’a in November
Russian nuclear outfit Rosatom is expected to send a team to visit the Daba’a nuclear power site in November as part of a study it is conducting on the project, said Mohamed Al Yamani, the spokesperson for the Electricity Ministry. He adds that the company team will meet with Electricity Minister Mohamed Shaker to discuss building a 1.2 GW nuclear reactor at a cost of USD 5 bn. (Read in Arabic)
Chinese company reportedly makes USD 1.5 bn EPC + finance proposal for 6 October
The National Authority for Tunnels has reportedly received a USD 1.5 bn EPC + finance offer from unnamed Chinese company to implement the monorail project in 6 October City, NAT Planning Commissioner Tareq Abul Wafa says, according to Al Shorouk. The monorail will connect 6 October with the first phase of the metro line in Al Malek Al Salah, Abul Wafa said. The Cabinet previously tapped a consortium of Orascom Construction (OC), the Arab Contractors, and Canada’s Bombardier to take the project prior to the start of negotiations with a Chinese railway company after President Abdel Fattah El Sisi’s visit to China last month. (Read in Arabic)
Aswan governor directs development of crisis management and emergency plan
The Governor of Aswan Mustafa Yusri directed governorate officials to develop a comprehensive crisis management and emergency plan to face environmental challenges such as the flooding recently experienced in Alexandria. He also called for an investigation into informal settlement activity around key flood prevention drains. (Read in Arabic)
BASIC MATERIALS + COMMODITIES
El Sisi approves establishment of largest phosphate fertilizer complex in Egypt
President Abdel Fattah El Sisi approved the construction of the largest phosphate fertilizer complex in Egypt, presidential spokesman Alaa Youssef announce on Sunday, according to Al Shorouk. The complex, which includes nine plants at an expected production rate of 1 mn tons of fertilizer per year will be implemented by three unnamed Italian, Spanish and Chinese companies, under the supervision of the El Nasr Co. For Intermediate Chemicals. (Read in Arabic)
Abu Qir Fertilizers resume EGP 1.15 bn loan talks
The Abu Qir Fertilizers company announced it is resuming negotiations over an EGP 1.15 bn loan to build an ammonium nitrate unit. The loan includes EUR 100 mn, and EGP 250 mn, over a period of 11 years. The company had frozen negotiations in March after receiving an offer from a banking consortium led by QNB Al Ahli. (Read in Arabic)
HEALTH + EDUCATION
Health Ministry to drive down the cost of domestically produced Sovaldi
The Health Ministry is planning to bring down the cost of domestically produced hepatitis-C cure Sovaldi to EGP 680 per pack at public treatment centres. Sovaldi was made available in pharmacies for EGP 1,200 per pack. An assistant to the Health Minister added that domestically produced Daklinza, also a hepatitis-C cure, will be made available at treatment centres for EGP 200 per pack, and EGP 1,315 in pharmacies. (Read)
** Further reading in HEALTH + EDUCATION: When the World Bank helped the International Finance Facility for Immunization (IFFIm) issue supra-national sukuks to finance vaccinations worldwide backed by nine sovereign governments, this “marked the first time most Sukuk investors had ever considered investing in something that provided both economic and social returns—it paid a competitive rate of return while supporting the immunization of more children in developing parts of the world.”
REAL ESTATE + HOUSING
Housing Ministry postpones Safari Park project – Source
The Housing Ministry is postponing assigning the Safari Park project to local developer Three Hundred after foreign partners withdrew, a source told Al Mal. No reason was given behind the withdrawal, but the ministry’s postponement is to give Three Hundred a chance to find new foreign partners who could aid with the project’s development. (Read)
OCI, NGCC, and Arab Contractors compete for EGP 500 mn contract to develop Al Fangary Axis
The Cairo Governorate Housing Authority re-issued an EGP 500 mn tender for the first phase development of the Al Fangary Axis in order to allow Orascom Construction Industries (OCI) and the Nasr General Contracting Company to offer competing bids to Arab Contractors. Arab Contractors had beat out El-Gharably for Constructions and the Egyptian Contracting Company for Building in the original tender offer. (Read in Arabic)
Government creates registered land database for investors
The government is putting together data-bank for all available plots of land that have had their preliminary registration and clearances processes completed and are ready for investors, Al Masry Al Youm reported. The land data-bank is an important development associated with the activation of the Investment Ministry’s one-stop-shop that facilitates investment in Egypt. The system aims to attract new investments, prioritising foreign and domestic investment in Upper Egypt. (Read in Arabic)
Nacita Land buys 21.5K m2 land in Suez for EGP 100 mn
Real estate investment company Nacita Land a 21.5K m2 plot of land in Suez City for EGP 100 mn in an auction. Nacita beat nine competitors at the auction, where the land price ranged from EGP 7.5-13K per m2, a 10% increase in price over last year. 11K m2 would be allocated towards residential projects, while the remainder would be used for commercial real estate development. (Read in Arabic)
October residents complain about “huge sewage lake” near their homes
A large sewage lake near the 6 October districts of Ebny Beitak, Hay Al Ashgar, Madinat Al Fayrouz and the New Zewail University, has elicited no response from the Giza Governor, the National Authority for Sanitation, or local municipalities despite residents’ continued complaints, AMAY reports. Residents said they suffer from armies of mosquitoes, severe odors, and crawling insects, which has prompted some to evacuate their homes. (Read in Arabic)
Zaazou travel plans to London to participate in World Travel Market Exhibition uncertain as flight delayed due to weather conditions
Tourism Minister Hisham Zaazou was set to travel to London Sunday night to participate in the World Travel Market Exhibition, which begins today and runs until Thursday, however his flight was forced to return to Cairo due to inclement weather, Youm7 reported. It is as of yet unclear when or if the minister will be able to attend the exhibition. The event was originally intended to be the setting for the launch of Egypt’s tourism promotional campaign, with a reported 42 Egyptian hotels and 30 travel agencies represented at the exhibition. While DNE is reporting that the launch will go through, executives from the campaign’s managers—ad agency J. Walter Thompson (JWT)—confirmed to Al Mal on Saturday that the launch will be postponed. Zaazou was originally set to depart for the exhibition on Saturday, but delayed his flight to follow up on crashed Russian flight. (Read in Arabic)
TELECOMS + ICT
Internet Revolution Egypt calls for boycott of mobile companies on 20 November
The Internet Revolution Egypt Facebook group called for a five-hour boycott of cell phone companies on 20 November, AMAY reports. Users participating in the boycott, set to take place from 5pm-10pm, will remove company SIM cards from their cell phones and use “wifi” and “free communication apps” instead, according to their statement published on 30 October. The group organized the boycott in protest of poor service quality, “corporate greed” and an apparent ban on VoIP services. Eslam Khaled, an IRE coordinator, told AMAY that the “movement” is also planning a demonstration in front of the House of Representatives when the legislature first meets, but admitted they still need a tiny bit of time to get organized on that front. (Read in Arabic)
AUTOMOTIVE + TRANSPORTATION
Foreign currency shortage sends car sales down 15%, drives up prices
Car sales in Egypt have dropped by 15% because of the foreign currency shortage, a member of the automotive section at the Cairo Chamber of Commerce said. The prices have reportedly gone up by the same amount, adding more pressure to the market. Agents have not been able to meet the demands of the market in terms of spare parts or after sales services, he added. (Read in Arabic)
Used car tax to apply to registered dealerships only – Tax authority chief
Tax Authority officials have come out to clarify that sales taxes of up to 30% (in place since 2001) on the sale of used cars only apply to sales through registered dealers. Individuals seeking to sell their cars will do not have to worry sales tax, Tax Authority Chief Abdel Moneim Matar said on Saturday, AMAY reports. This comes as Ali Sultan, head of Central Auditing at the authority, issued a statement detailing how used cars are taxed after what Al Mal reports were “troubling rumors” that individual sales could be subject to a levy. Used car sales at dealers are subject to 15% to 30% taxes depending on engine size. (Read in Arabic)
BANKING + FINANCE
CIB completes acquisition of Citibank’s retail arm
CIB completed the acquisition of Citibank Egypt’s retail banking portfolio, according to a statement filed to the EGX. CIB had reached an agreement with Citibank in June, and received CBE approvals late August. CIB acquired USD 140 mn in assets, USD 190 mn in deposits, and almost 100 accounts. An expected 822 employees, eight branches, and Citibank’s ATM network will be transferred to CIB. (Read in Arabic or English)
Banque Misr could lend the Suez Canal Authority USD 300 mn
Banque Misr is assessing lending the Suez Canal Authority USD 300 mn, a source told Al Shorouk. A number of banks are expected to participate in providing the loan, including AAIB. The Suez Canal Authority had borrowed a USD 1 bn syndicated loan from eight banks last month, Al Shorouk notes. Banque Misr, on the other hand, is looking to borrow from foreign institutions as well as issue USD-denominated bonds in order to be able to finance national projects in Egypt. (Read in Arabic)
Ashraf Salman meets with ECMA to discuss investment banking contracts
Investment Minister Ashraf Salman discussed the future prospects of investment banks marketing major national projects at his periodical meeting with the Egyptian Capital Markets Association (ECMA) and the Financial Securities Chamber of Commerce. Prior to the meeting, Mohamed Maher, VP of ECMA stated that he would request that contracts to market these projects be renewed with investment banks. (Read in Arabic)
OTHER BUSINESS NEWS OF NOTE
Consumer watchdog: Companies that fail to meet contractual agreement to face legal action
The Consumer Protection Agency (CPA) has issued a formal warning to companies that have failed to deliver machinery and commodities to their clients due to a rise in the USD-EGP exchange rate, reports Al-Ahram. In recent weeks, the CPA has received complaints from disgruntled citizens claiming that companies failed to deliver electronic products and other good due to USD shortage, said CPA head General Atef Yaacoub. Any company that continue to fail in meeting its contractual obligations will face legal action in the future, he added. In related news, the newspaper claims, automobile distributors that previously failed to deliver purchased cars to consumers due to a lack of foreign currency have been able to resolve their problems after consulting with CPA. (Read in Arabic)
Mahalla textile workers end strike
Mahalla for Spinning and Weaving, resumed work on Sunday, a factory worker told Ahram Online on the phone, ending a weeks-long strike of 14K workers over payment of their annual bonus. The Ministry of Finance reportedly denied the bonus for the first time in decades, according to Ahram Online. “Workers will resume the strike if official papers granting them the social bonus are not published within 48 hours,” factory worker Mohamed El-Attar said.
ON YOUR WAY OUT
New Zealand beat Australia on Saturday to become the first team in history to retain the Rugby World Cup trophy and to win for the third time (match highlights here, running time: 04:02). After the game and during the New Zealand players’ lap of honour, a 14-year old ran on to the field towards the players and was tackled by a security guard, only to be picked up by back-to-back World Cup winner Sonny Bill Williams. Being the extraordinary gentleman he is, Williams then gave his gold medal to the 14-year old fan (running time 01:27) explaining that he wanted to “make the night more memorable for him. Better [for the medal] to be hanging around his neck than mine.” Who is Williams? At 23 he converted to Islam and went on to become the first Muslim to ever play for the New Zealand All Blacks (and subsequently became the first Muslim to win the Rugby World Cup, twice). He was formerly the New Zealand Professional Boxing Association (NZPBA) Heavyweight Champion and World Boxing Association (WBA) International Heavyweight Champion and is currently ranked inside the top 100 heavyweight boxers in the world with boxing website BoxRec. Expect to see him in the Rio Olympics next year as he has also been named in the New Zealand Olympic sevens squad.
Morocco is on track to launch the world’s biggest solar farm at the edge of the Sahara desert. The concentrated power plant will power nearly half the country by 2020, while the first phase, Noor 1, will generate 160 MW by next month. The plant consists of four linked solar plants, like Noor 1, that will occupy a space as big as Morocco’s capital Rabat, eventually generating 500 MW.
If you’re longing for some mindless [redacted] to momentarily take your mind off of the unspeakable horrors of the world, we respectfully bring to your attention: Hotline Bling: The Egyptian Version – Drake vs Hakim. It would almost appear that rapper Drake has been lifting dance moves from Egyptian weddings. Once again our culture is appropriated, and we have no recourse but to suffer in silence, as we must. (Watch in Arabic, running time: 1:37)
BY THE NUMBERS
QUICK FACT: Africa’s growth in the past decade has hinged on exporting raw materials and importing cheap capital. Just how much is China’s economic slowdown hurting the continent? The IMF has slashed its growth forecast for Africa’s eight major oil exporters by half to a collective 3.5%. The eight make up around half of sub-Saharan Africa’s aggregate gross domestic product.
USD CBE auction (Sunday, 01 November): 7.9301 (unchanged since Sunday, 18 October)
USD parallel market (Sunday, 01 November): 8.40 (-0.10 from Thursday, 29 October, Reuters)
EGX30 (Sunday): 7413.01 (-1.26%)
Turnover: EGP 345.2 mn (21% below the 90-day average)
EGX 30 year-to-date: -16.95%
Foreigners: Net Short | EGP -3.9 mn
Regional: Net Long | EGP +7.6 mn
Local: Net Short | EGP -3.7 mn
Retail: 79.0% of total trades | 85.2% of buyers | 72.8% of sellers
Institutions: 21.0% of total trades | 14.8% of buyers | 27.2% of sellers
Foreign: 8.1% of total | 7.5% of buyers | 8.7% of sellers
Regional: 4.5% of total | 5.6% of buyers | 3.3% of sellers
Domestic: 87.4% of total | 86.9% of buyers | 88.0% of sellers
A Single Chart that Should Keep You on Guard — #2
Our prediction at in mid-October has come to pass: The Central Bank of Egypt’s net foreign asset position has turned into a net foreign liability (NFL) of USD 0.56 bn as of the end of September
The EGX30 is down 2.9% since 12 October 2015, and the black market USD : EGP exchange rate remains under pressure at around EGP 8.5-8.6 per USD. The government had initially noted that cc USD 4.0 bn in balance of payments funding will be available during Q4-15 to ease the magnitude of the FC shortage. However, it seems that the faster option will be the imposition of import controls. Based on sporadic media reports, we understood that the list of banned/restricted merchandise imports has already been sent to the cabinet for approval, which is expected within the coming few hours or days. Against this macro landscape, individuals with low-to-average risk tolerance should tilt their portfolios towards cash and, within equities, towards defensives and dollar-positive stocks. Tap here for the one chart that says it all.
WTI: USD 46.18 (-0.88%)
Brent: USD 49.35 (-0.42%)
Gold: USD 1,140.10 / troy ounce (-0.11%)
TASI: 7,045.8 (-1.1%)
ADX: 4,298.7 (-0.5%)
DFM: 3,430.9 (-2.1%)
KSE Weighted Index: 388.7 (+0.1%)
QE: 11,586.0 (-0.2%)
MSM: 5,948.1 (+0.3%)
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