The House of Representatives has voted down Sherif Ismail’s Mineral Resources Act

TL;DR

The House of Representatives has voted down Sherif Ismail’s Mineral Resources Act. Ismail gov’t to present agenda to House in early February. (Speed Round, Last Night’s Talk Shows)

What did the House pass? We have a roundup in one of two Spotlights today. (Spotlight)

Regional markets tanked yesterday and Asian markets are down this morning as the global selloff continues. (What We’re Tracking Today)

Egypt eyes USD c.1.6 bn in loan agreements, deposits from China. (Speed Round)

Salman says not to expect cap on USD deposits to be raised any time soon. (Speed Round)

8.9 tcf gas field discovered off the Israeli coast could boost Egypt’s ambitions as regional energy hub. (Speed Round)

Talks with China Harbour on USD 500 mn Alexandria berth put on “indefinite hold.” (Infrastructure)

Is Abraaj looking to list Cleopatra Holding? Al Mal thinks so. (Health + Education)

Mortada Mansour has made it to the New York Times. Let us all now hang our heads in shame. (Egypt in the News)

By the Numbers

WHAT WE’RE TRACKING TODAY

The House of Representatives voted down the Mineral Resources Act, , AMAY reports. the act was a key component of the government’s development plan for outlying governorates and a piece of legislation championed by Prime Minister Sherif Ismail during his service as oil minister. It outlined more modern financial terms for mining contracts as part of a 10-year plan to see mining account for up to 10% of GDP, Ismail’s presentation to EEDC last March (pdf, see page 19). The law set out to curb raw material exports in favour of value-added sales, committed the state to developing a master plans for the sector, would have seen Egypt’s regularly issue new bid rounds and would have permitted “different models of exploration agreements.” The House also voted against passing the Appeals Against State Contracts Act, which restricts appeals against contracts with the state to contracts signed with parties convicted of a financial crime, sending it back to committee to recommend amendments, according to a call-in during last night’s talk shows. More in our special Spotlight today, after Speed Round, and in Last Night’s Talk Shows.

Egyptian and regional markets tanked yesterday, with the Tadawul down more than 7.4% at its worst yesterday and Egypt sliding more than 5% in the opening minutes of trading. Both markets went on to pare their losses, but look set for another turbulent day: Asian markets opened with sharp sell-offs this morning, and oil continues to fall, trading now for under USD 29 per barrel as the “lifting of Iran sanctions adds to panic about oil oversupply.” At dispatch time, Chinese markets had pared their losses somewhat after opening down more than 2%, while other Asian exchanges were “rooted in the red,” CNBC reported.

The fourth debate between candidates for the Democrats’ nomination to run in this year’s U.S. presidential election kicked off at 4am CLT. At dispatch time, they were hammering at Wall Street, attacking “big banks and shadow banking …  Hillary Clinton voiced her support for Dodd-Frank, while Martin O’Malley reiterated his intention to revive Glass Steagall. Follow The Wall Street Journal’s coverage.” Not going to do much to calm markets when Wall Street opens this afternoon after this morning’s sell-off in Asia. The rather bright Maggie Haberman is among those liveblogging the debate at the NY Times, while the Washington Post has a nice backgrounder on the tightening race.

WHAT WE’RE TRACKING THIS WEEK

Egypt is set to receive a loan of between USD 1.6 bn and USD 1.8 bn from China during Chinese President Xi Jinping’s visit to Egypt. The Chinese leader will be on a Mideast tour 19-23 January, with other stops including Iran and Saudi Arabia. (More details on the loan in Speed Round, below.)

After meeting with the Chinese president, President Abdel Fattah El Sisi heads to Addis Ababa on Thursday for the 26th African Union Summit on 21-31 January. GERD talks are the focus a mini-summit El Sisi plans to have with Ethiopian and Sudanese political leaders.

The World Economic Forum convenes for its annual meeting in Davos. Also this week: The Central Bank of Egypt is expected to meet with NBE and Banque Misr to discuss ways to support ailing borrowers. We’ll be keeping an eye out for an exact date.

ON THE HORIZON

The national holiday marking the anniversary of the 25 January Revolution / Police Day falls on Monday of next week, and the U.S. Federal Reserve’s Federal Open Market Committee meets on 26-27 January.

LAST NIGHT’S TALK SHOWS

As parliament rushes to vote on dozens upon dozens of acts passed by decree by President Abdel Fattah El Sisi while he wielded legislative power, CBC’s Lamis El Hadidy was on the receiving end of multiple calls from MPs and parliamentary reporters commenting on the rejected Mineral Resources Act and the possible rejection of the act pertaining to appealing state contracts (More in Speed Round).

MP and head of the Support Egypt bloc Sameh Seif El Yazal called in to explain to a rather agitated El Hadidy that while the Mineral Wealth Act had definitely been rejected, the act pertaining to appealing state contracts has been sent back to the committee for deliberation and amendments.

When El Hadidy asked how the bloc allowed the act to rejected, El Yazal went on the defensive saying the bloc’s MPs had been in session since 9:00 a.m., the benches were uncomfortable, some members were old, some were ill and others just plain took off in frustration. Finally, our suspicions about how parliament passes legislations have been confirmed.

El Yazal added that the House needs a month and a half for “the chaos to stop, the screaming matches to end and for people to start working professionally.” We’re not counting our chickens.

The drop in oil prices was fodder for discussion last night, with Lamis El Hadidy and Amr Adeeb featuring several interviews with experts and Ibrahim Eissa featuring a monolog that jumped from oil to the parliament and about a dozen other topics.

Financial expert Nabil Zaki called El Hadidy to say, “The Egyptian consumer will not feel the international markets’ decrease in oil prices unless the government lifts its subsidies off oil derivatives and directs them to services instead.”

Ahmed Atta, managing director of the Tawfiq Investment Group, agreed: “I believe floating energy prices will make them cheaper than official prices.” He added that the drop Chinese growth to 7% from 10% gives Egyptian products room to compete locally. However, “the state has been adopting deflationary economic policies,” he told El Hadidy

Oil expert Abdel Hamid El Owdy chimed in on the lift on Iranian sanctions: “Iran is one of the OPEC countries and has the right to increase its production,” he said. El Owdy added that with Iran producing 500k barrels per day, Libya’s comeback in oil production and the U.S. upping its production, “we expect the barrel to reach USD 20-23 this year.”

Mohamed Megahed El Zayat, head of the National Center for Middle East Studies, was not as relaxed about Iran’s oil exports when he talked to El Hadidy over the phone, fearing money in the pockets of the Iranian Revolutionary Guard would finance terrorism.

“The whole world will suffer an economic crisis due to the petrol issue,” Amr Adeeb bellowed last night. The anchor talked to former Petroleum Minister Osama Kamal, who said that “Saudi Arabia and Russia lose USD 1 bn per day due to the drop in oil prices” and that this would significantly affect Egypt’s budget as the country imports an annual 2 mn tons of raw petrol.

Last night saw a debate on Ibrahim Eissa’s eponymous show between the head of the importers division at the Chamber of Commerce, Ahmed Shiha, and Mohamed El Bahey, an executive board member of the Federation of Egyptian Industries. The pair discussed the decision requiring importers to register offshore suppliers of 50 goods.

Shiha was less-than-thrilled about the decision, saying, “Local production represents only 15% of the consumption of the banned goods.” Shiha argued that we need to differentiate between legitimate importers and smugglers, adding nearly as much is smuggled into the country on as is brought in on the open market.

El Bahey argued the decision “safeguards the health of the citizens, limits black markets […] and saves the country’s FX resources, which are lost on importers who misrepresent prices.”

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SPEED ROUND

China will sign agreements lending Egypt as much as USD 1.6 bn during President Xi Jinping’s visit, a source tells Al Masry Al Youm. The CBE is set to receive a USD 1 bn loan for budgetary support and to prop up its reserves. National Bank of Egypt (NBE) will receive USD 500 mn and Banque Misr USD 100 mn in Chinese funding, the source adds. Banque Misr’s chairman says the loan will be used to finance SMEs, but provides no further details. Amwal Al Ghad has different math, saying the loan would be worth USD 1.8 bn, with China depositing USD 1 bn at the CBE, USD 700 mn at NBE and USD 100 mn at Banque Misr. Conflicting reports quoting Egypt’s Ambassador to Beijing Magdy Amer are appearing in state-owned media as well, as Al Ahram quotes him as saying that USD 1 bn to the CBE will come in the form of a loan, while MENA News Agency quotes him as having called them deposits. Both report that the NBE will receive USD 700 mn in backing. These loans may be channeled through the newly launched Asian Infrastructure Investment Bank (AIIB), with International Cooperation Minister Sahar Nasr stating that the AIIB is looking to provide USD 10-15 bn in development loans over the next five to six years to a number of countries, including Egypt, AMAY reports.

Egypt may also participate in China’s One Belt One Road economic cooperation policy, with MoUs and agreements set to be negotiated with the Chinese government during the Chinese president’s visit, Al Mal quotes Ittihadiya spokesman Alaa Youssef as saying. The statement followed a meeting between President Abdel Fattah El Sisi, the prime minister and the ministers of industry, housing and transportation on Sunday in preparation for the visit. On a related note, President El Sisi was invited to be a guest of honor when China hosts the G-20 Summit in September, Amb. Magdy Amer told Al Ahram.

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The Ismail government will present its program to the House of Representative for approval in early February, Prime Minister Sherif Ismail told a British parliamentary delegation visiting Egypt. He also detailed measures to attract investors and outlined investment opportunities. The House of Commons delegation began their visit on Saturday to discuss the British government’s report on the Muslim Brotherhood and Egypt’s role in fighting terrorism, Ahram Online reports. The delegation reportedly visited also visited the Sharm El Sheikh Airport yesterday to assess the new security measures, and they had no major reservations, says Head of the Egyptian Airports Company (EAC) Adel El Mahgoub. The delegation asked that explosive-detection devices be added to all the airport’s halls, a measure the EAC had already addressed by tasking Arab Contractors with installing CTX devices at the Hurghada and Sharm El Sheikh airports, El Mahgoub notes.

New CBE regulations will drive banks toward more syndicated loans and to expand their customer base, banking experts tell Al Shorouk. The new lending regulations, which we outlined yesterday, are also likely to push banks toward expanding their capital base. This will enable them to continue financing their largest corporate clients, according to Emirates NBD-Egypt’s Deputy MD Sahar El Damati. In the short term, banks will likely resort to partnerships to provide more syndicated loans to comply with the new regulations, with which the CBE gave the industry one year to become compliant.

Don’t expect the cap on USD deposits to be raised anytime soon, Investment Minister Ashraf Salman says. The Coordinating Council’s main priority is to regulate imports, the minister tells Daily News Egypt. A source explains that imports that do not conform to the new requirements are estimated to be valued at USD 9 bn of the total USD 15 bn in imports. Salman’s comments came two days after Federation of Egyptian Industries Chairman Mohamed El Sewedy said he expects the deposit caps to be lifted by the end of 2016.

The Finance Ministry is drafting a bill on sovereign sukuks , says Investment Minister Ashraf Salman. The government is also working on sukuk regulations for listed companies, AMAY reports. Egypt finished drafting the sukuk law earlier this month, and it was sent to Al Azhar and Finance Ministry for approval. Introducing sukuks is a key component of the government’s plan to revitalize capital markets through the introduction of new financial instruments.

8.9 tcf gas field discovered off Israeli coast: A group lead by Isramco Negev and Modiin Energy has made a natural gas discovery off the coast of Israel, reports Reuters. The new discovery, located at the Daniel East and Daniel West fields, could hold 8.9 tcf of natural gas reserves. If confirmed, the find could alleviate some of the pressure on the Israeli government to open the oil and gas sector to more competition, Reuters writes. The locations of the two fields, also known as Daniel Mizrah and Daniel Maarav (Hebrew for East and West, respectively), can be seen here.

ACWA Power to reach final agreements on USD 15 bn energy projects within the year, says Regional Manager Hassan Amin. The MoUs signed in the Egyptian Economic Development Conference (EEDC) were to build power plants with a capacity of 6,200 MW, he adds. The company is in the final negotiation stages over building a 2,000 MW coal-powered plant in Safaga and is reviewing the final agreement over the 2,250 MW Dairut power plant with the Electricity Ministry, reports Al Borsa.

HSBC is building a new c. USD 250 mn Middle East headquarters in Dubai, Bloomberg reports. The new HQ, located near Burj Khalifa, will be built by Abu Dhabi developer Gulf Resources Development & Investment, which will sell it to HSBC for AED 920 mn upon completion in 2017 before they begin moving staff in 2018. After the move, the bank will vacate three locations, only keeping a space in Dubai Internet City.“HSBC’s Middle East unit is planning to move its place of incorporation from Jersey to the Dubai International Financial Centre this year,” according to the bank.

Have we seen peak gold? That’s the argument the Financial Times makes this morning, writing that “Gold output has peaked in this commodities cycle, according to mining industry leaders and analysts who say few big projects will reach the point of production amid falling prices.”

SPOTLIGHT on – Parliament’s first day of voting on legislation

The House of Representatives passed a string of acts and ratified a number of decisions during last night’s session, the first dedicated to voting on legislation passed over the past three years. Al Ahram has the full lineup of the approved laws. Aside from the scrapping of the Mineral Resources Act, which we note in What We’re Tracking Today (above), the highlights and lowlights include:

• The Anti-terror Act, which imposes sanctions on journalists who report statistics in terror cases that deviate from official statements and expands the powers of detention afforded to police officers and prosecutors, has passed. Nour Party MP Mohamed Khalifa states that the law’s ambiguous wording leaves it open to broad application, Reuters reports.
• The act protecting critical government facilities, which expands the jurisdiction of military courts to try civilians accused of attacking buildings and roads. The parliament also approved amendments to the Prisons Act, which allows for periods of solitary confinement of up to 30 days as a punitive measure for inmates.
• A decree allowing the president to remove the heads of independent authorities such as the head of the Central Bank and of the Central Auditing Organization — a controversial measure required by the constitution — has passed. The act could lead to the removal of Hisham Genena, head of corruption watchdog the Central Auditing Organization (CAO). Genena is under investigation for statements accusing the judiciary of corruption and has received widespread criticism for a report that claims corruption has cost Egypt EGP 600 bn.
• Amendments to the Illicit Gains (anti-corruption) Act, which calls for the appointment of a state body in charge of investigating corruption cases involving illicit gains and managing assets frozen in connection with illicit gains investigations. The parliament also approved amendments to the Anti Money Laundering Act. (Read in Arabic)
• Parliament voted to uphold the formation of the National Defense Council and ratified its decision to extend the military’s participation in the Saudi-led Yemen intervention for up to one year. (Read in Arabic)
• Other legislation passed include the Presidential Election Act and amendments to the Supreme Constitutional Court Act and the Military Courts Act. (Read in Arabic)

One of last night’s most controversial events included the ejection of 20 journalists from the House, with reports that the decision was based on instructions from unspecified members of a security service. The Journalist Syndicate issued a statement condemning the move, and a number of journalist MPs announced that they would boycott the sessions unless the decision is reversed, Al Mal reports.

SPOTLIGHT on Iran

The U.S. and Europe lifted sanctions on Iran yesterday after Iran dismantled a large portion of its nuclear program. For Iran, this means oil exports, access to tens of bns of USD in frozen assets and increased foreign investment, writes the FT (paywall). For global markets, it means at least one thing: The prospect of even cheaper oil. Iran is looking to hike sales by 500k barrels per day and plans to offer discounts on prices, which are already at an 11-year low, according to BBC.

It also means contracts up for grabs, as Reuters notes, covering Iran’s 114-aircraft, USD 10 bn deal with Airbus (the piece is a solid look at Iran’s growth prospects if you need a primer.)

With sanctions on Tehran being lifted, one of the world’s “hardest-to-enter” stock markets has just become more accessible. A team of Bloomberg writers provided a primer on the market that already has the fifth largest market cap in the region (the sixth largest if Abu Dhabi and Dubai are treated separately, with the the top five being Saudi Arabia, Qatar, Abu Dhabi, Dubai and Kuwait). The basics: Trading on the Tehran Stock Exchange lasts from 9 a.m. to 12:30 p.m. Tehran time, Saturday to Wednesday. The benchmark index, the TEDPIX, dropped 11% in 2015 following a 21% drop in 2014, after seeing positive returns every year from 2008 onward. Even though investing in Iran was already legal for many international investors, the financial sanctions on the banking system (mostly banning it from using SWIFT networks) made it practically impossible to move funds in and out of the country. Many U.S.-related bans might still remain in place, barring U.S. citizens and corporations from trading with Iran, the writers say, but “braver” Europe-based investors are likely to lead the way into Iran. “There are two ways to access Iranian equities: invest directly, or go through local funds,” an Iranian advisory firm says. Investing directly requires using a local broker and obtaining trade licenses. What is still off limits? Sanctions will remain on 200 businesses, including those owned by certain institutions, such as the Iranian Revolutionary Guards, and on some individuals. Sturgeon Capital said it already identified 50 companies, comprising about 10% of those traded on the market, that are sanctions-compliant and will be accessible. Despite the promise, Bloomberg does not expect a big rush of investment into the Iranian market.

… Not so fast: The U.S. imposed new sanctions preventing 11 entities and individuals linked to the missile program from using the U.S. banking system, the BBC reports. The new sanctions “were triggered by Iran conducting a precision-guided ballistic missile test capable of delivering a nuclear warhead last October, violating a United Nations ban.”

International reaction: As our partners in the GCC grumble, the U.S. press is over the moon: “A Safer World, Thanks to the Iran Deal,” runs the headline atop the New York Times’ editorial on the subject — even as the Obama administration “imposed modest new sanctions on the country for banned missile tests.” The Washington Post, meanwhile, reminds us that while “sanctions relief could strengthen [the] hand of Iran’s reformers …perils remain.” Across the point, the Telegraph linked the end of sanctions on Iran to yesterday’s market plunge in the GCC as “panic gripped traders,” while its editorial page noted that “Trade with a nuclear-free Iran is welcome. But it is far too early to call this deal a success.” The Guardian, meanwhile, takes a very nuanced approach in its leader on the topic.

EGYPT IN THE NEWS

While most foreign coverage on Egypt centered around parliament hammering through legislation, The New York Times made us audibly sigh yesterday with its coverage of the House.

The issue isn’t Cairo bureau chief Declan Walsh’s piece. In fact, Walsh is a welcome breath of fresh air after his predecessor, David “Sweeping Generalization” Kirkpatrick. No, folks, the problem is that in “Flamboyant Egyptian Politician Craves Public Eye,” Mortada Mansour has made it to the New York Times. “In an interview at Zamalek Sports Club, seated before a giant portrait of himself, Mr. Mansour insisted that he was no Mubarak supporter, yet also made it clear that he detested the events that led to his ouster five years ago.” Walsh goes on to comment on Mortada’s inconceivable election to parliament’s Human Rights Committee: “[H]e is likely to play a prominent role in shaping a proposed law to regulate, and likely curtail, the activities of foreign aid organizations in Egypt. But his immediate concern is countering the young Egyptians, many openly disillusioned with politics, who mock him on Facebook, a medium he describes as a ‘gutter of filth.’” These youngsters, he says, “have no value in this country.”

WORTH WATCHING

Donald Trump has inadvertently revealed the biggest issue with his presidential campaign. No, it’s not his poor business sense or astounding xenophobia. Trump simply has no godly idea how the government works. “[Obama] doesn’t want to get people together. You know? The old-fashioned way where you get Congress…. You get the Congress, you get the Senate. You get together. You do legislation,” he said during Thursday’s Republican debate. It’s things like these that make our editors wonder if Egyptian politics are all that bad. (Run time 1:03)

DIPLOMACY + FOREIGN TRADE

Egypt will have a role in operating the Grand Ethiopian Renaissance Dam, in accordance with the Declaration of Principles signed by Egypt, Ethiopia and Sudan, says Water Resources Minister Hussam El Maghazy. Under the declaration, all three countries must coordinate on the dam’s operations, Youm7 reports. El Maghazy refutes rumors circulating in the press that Ethiopia is holding 6 bn cubic meters of water in the dam’s reservoir. He adds that a trip to the dam will be organized with the press so they can review the progress on the ground, Al Mal reports.

ENERGY

Egypt to tender 11 oil and gas blocks in 1H2016, sign three development contracts
Egypt will hold an international tender for 11 oil and gas blocks in 1H2016, EGAS Chairman Khaled Abdel Badie says. The tender will cover concession areas in the Mediterranean and the Nile Delta. Egypt will also sign three new development contracts in the Mediterranean worth a total of USD 500 mn, Badie adds. (Read)

EGAS to connect Siemens’ power plant projects with gas in FY2016-17
EGAS will connect Siemens’ power plant projects across Egypt with natural gas in FY2016-17, EGAS Chairman Khaled Abdel Badie says. Supplying the power plants with natural gas is expected to cost EGAS EGP 3.4 bn, he adds. The company’s plans for the year include connecting the plants in the new administrative capital, Beni Suef and El Borollos that each have an output capacity of 4,800 MW. (Read in Arabic)

Abdul Latif Jameel, Infinity Solar to increase investments in Egypt
Abdul Latif Jameel Energy plans to invest USD 100 mn in the Egyptian market and Infinity Solar USD 90 mn, Al Borsa reports. Both companies are looking to build 50 MW solar power plants under the feed-in-tariff program. Abdul Latif Jameel Energy is also reportedly vying for USD 800 mn worth of projects. However, it believes the investment environment could be improved substantially if the government’s tendering process and their regulations are made clearer. Both companies also cite the shortage of foreign currency as a major operational impediment.

INFRASTRUCTURE

Talks with China Harbour put on hold indefinitely
The Transport Ministry has indefinitely halted negotiations to build a USD 500 mn multi-purpose berth at the Alexandria Port with China Harbour Engineering Company, says Transport Minister Saad El Geyoushi. The government is reportedly looking to implement the project on a PPP basis to avoid incurring additional costs, a source tells Al Mal. The ministry is currently assessing a rival offer from Kuwait’s Kharafi Group, says the source. The government had signed two MoUs on the facility with China Harbour between the EEDC and October 2015. Both MoUs involved China Harbour designing, building, financing and operating the project in partnership with the Alexandria Port Authority. (Read in Arabic)

EGP 100 mn to develop Sharm El Sheikh and Hurghada airports
The cost of developments and baggage carousel equipment for the Sharm El Sheikh and Hurghada airports is around EGP 100 mn, says Chairman of the Egyptian Airports Company Adel El Mahgoub. The project was awarded directly to Arab Contractors without issuing a tender — an effort to speed up the process. However, El Mahgoub says the final agreements have not yet been signed. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Spinneys Egypt plans to invest EGP 500 mn over three years
Spinneys Egypt is planning to invest around EGP 500 mn in expansions over the next three years, Chairman Adly Mohannad tells Al Mal. The supermarket chain will open its first branch in Alexandria in February — the first in a plan to expand at a rate of eight new branches per year. Another three branches are currently being built, Mohannad says, adding that Spinneys achieved a growth rate of 35-40% last year. However, he continues to view the process of issuing licences as a burden. (Read in Arabic)

MANUFACTURING

Tecnimont begins work on ammonia production unit at KIMA after USD 11.7 mn payment
Italy’s Maire Tecnimont began building an ammonia production unit at the Egyptian Chemical Industries Company’s (KIMA) fertiliser complex, Al Borsa reports. Tecnimont resumed the stalled project after KIMA paid it USD 11.7 mn, representing 20% of the extra costs of the project. KIMA has committed to paying the remainder over four quarterly instalments. The project will also allow KIMA to run its plants on natural gas, rather than just electricity, creating an internal rate of return of 16.6-23.5%, according to KIMA’s IR chief. Tecnimont and KIMA began talks to revive the project, which Tecnimont put on hold due to financial and security concerns, in September, with negotiations spearheaded by Investment Minister Ashraf Salman in October.

HEALTH + EDUCATION

Abraaj Capital looking to list Cleopatra Holding?
Abraaj Capital is looking to list its healthcare arm Cleopatra Holding on the Egyptian Exchange in the second half of 2016, Al Mal claims, saying Cleopatra Holding encompasses Cairo Medical Center (CairoMC), Cleopatra Hospital, Nile Badrawi Hospital and Al Shorouk Hospital. Abraaj recently acquired Cleopatra Hospital for EGP 770 mn and a 52% stake in CairoMC for EGP 106 mn, Al Mal says, adding that Pharos Holding is reportedly in the running to manage the listing. It’s all a bit speculative — and early relative to the investment dates, if you ask us — but we’ll be keeping an eye on it going forward. (Read in Arabic)

Health Ministry begins distributing Qurevo to hepatitis C patients
The Health Ministry has begun distributing AbbVie’s hepatitis C cure Qurevo, Al Mal reports. AbbVie’s MENA representative says Qurevo is considered the first line of treatment for fourth-generation hepatitis C infections by multiple international protocols. Qurevo, unlike Gilead’s Sovaldi, does not contain sofosbuvir. (Read in Arabic)

REAL ESTATE + HOUSING

Pioneer Holding may spin off real estate assets ahead of IPO, predicts Naeem Holding
Pioneer Holding may spin off 90% of its real estate portfolio into a single entity that it would then IPO in 1H2016, according to Naeem Holding. Another alternative could be spinning off Roiaa Real Estate Investment Group, its largest real estate subsidiary, Al Borsa reports. Naeem also predicts that Pioneers might exit Arab Dairy. (Read in Arabic)

TOURISM

Transport Ministry looks to attract more cruise ships to Egypt
The Transport Ministry is in talks with the Suez Canal Authority over allowing cruise ships to use the canal and adding Egyptian ports to their destinations, Naggar Shipping Company Chairman Sherine El Naggar tells Al Mal. Cruise ships could provide a boost to falling tourist arrivals, says El Naggar, with the parties reportedly discussing financial incentives to attract more cruise ships to Egypt. Four ports are being evaluated for the purpose: West Port Said, Hurghada, Sharm El Sheikh and Alexandria. (Read in Arabic)

Hotel operators flocking out of Egypt to Dubai as sector growth wanes
A number of hotel operators are moving their headquarters to Dubai from Cairo in response to the weakening tourism sector in Egypt, a source tells Al Shorouk. Mövenpick and Marriott have already moved their regional management to the emirate. A source says the companies are “likely to move back to Egypt” once the sector shows signs of recovery. (Read in Arabic)

Dubai, Turkey, Egypt are Saudi families’ preferred winter destinations
Saudi families prefer travelling to close destinations during the mid-year winter break, travel experts tell the Saudi Gazette. Their most favored winter-time destinations are Dubai, Turkey and Sharm El Sheikh, although our Gulfie neighbors are unlikely to plug the gap left by Russian tourists to the Red Sea resort. Only 5% of Saudi families opt to travel longer distances to other Asian or European destinations. Domestic tourist destinations like Asir, Baha and Jeddah are still relatively unattractive to Saudi travelers. (Read)

TELECOMS + ICT

Telecom Division wants NTRA to enforce ID-reader technology on new sim cards
The Telecom Division of the Chambers of Commerce wants the NTRA to have mobile operators install user ID-reader technology in addition to the new model contract to obtain user data. On a related note, Mobinil is in the final stages of reaching an agreement with the NTRA on implementing the model contract, which obliges service providers and sim-card distributors to obtain user registration information and will come into effect on 20 January, says Mobinil VP Ashraf Haleem. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Automobile Manufacturers want priority earmark for FX and inclusion in auto strategy
The Egyptian Automobile Manufacturers’ Association (EAMA) is calling on the central bank to give the industry priority in FX allocations, says EAMA’s chief spokesperson Hussein Mustafa. EAMA reviewed the CBE’s FX restrictions at a meeting on Sunday and is requesting an urgent sit-down with CBE Governor Tarek Amer, says Mustafa. EAMA also wants the government’s automotive strategy to be discussed with the industry reps before it is enacted, As we noted last week, the strategy will impose a 10% tariff on all imports and a new 30% tax on all cars sold in Egypt, while granting tax breaks to Egyptian assemblers that move into manufacturing. (Read in Arabic)

BANKING + FINANCE

EGP 17 bn ENR debt to NIB could be dropped
The Transport Ministry has entered negotiations with the ministries of investment and finance to drop Egyptian National Railways’ EGP 17 bn debt to the National Investment Bank (NIB), sources tell Al Shorouk. NIB had recently agreed to waive EGP 10 bn in debt two months ago, the source adds. ENR has received EGP 360 mn of an agreed upon EGP 1.2 bn loan to finance its investment plan. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

OTMT to invest EGP 2 bn over the next three years
Orascom Telecom Media and Technology (OTMT) will invest EGP 2 bn in Egypt over three years in sectors including financial services, energy, logistics and recycling, Deputy CEO Tamer El Mahdy tells Al Borsa. OTMT is looking to build five grain, fruit and vegetable storage centers nationwide. Commenting on the macroeconomic environment, El Mahdy says achieving a GDP growth rate of 4% in 2016 is possible as long as legislature facilitates the domestic investment climate. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

No large-scale demonstrations expected on 25 January, sources say
No large-scale demonstrations are expected on 25 January, security sources are telling Al Shorouk, saying that a number of activists who were likely to lead them have been detained. The newspaper also says President Abdel Fattah El Sisi had met with a number of government and security officials to review preparations for the day. El Sisi is currently preparing an address to the nation for the day, including a message that celebrating the anniversary of the 25 January Revolution is not at odds with having the day also represent national police day. (Read in Arabic)

President Abdel Fattah El Sisi met with CIA director John Brennan to talk national security and U.S.-Egypt relations yesterday, according to an Ittihadiya statement. Egypt plays a fundamental role in stabilizing the region, Brennan said, adding that the U.S. is keen on understanding Egypt’s plan on counter-terrorism efforts and combating extremism.  El Sisi assured Brennan that Egypt has adopted a “comprehensive” approach to fighting terrorism, particularly in North Sinai, where the president says Daesh-affiliates are limited, not exceeding one percent of North Sinai’s total area.

ON YOUR WAY OUT

GAFI launches VIP service center, says Chairman Alaa Omar. The center has four windows for commercial registry outlets and the Industrial Development Agency. GAFI will also soon launch a service center in Sohag, he adds.

The Industrial Development Authority (IDA) plans to conduct a sweep next month to check for licenses and registration in industrial zones, says IDA Head Ismail Gaber, according to AMAY.

A bomb went off at an Agouza traffic checkpoint on the Mehwar last night. The bomb squad was immediately deployed to the area, and no injuries or fatalities have been reported. No group has yet claimed responsibility for the attack.