Thursday, 4 February 2016

Italian trade delegation cuts visit short amid reports missing grad student was murdered

TL;DR

Italian trade delegation cuts visit short amid reports missing grad student was murdered. (What We’re Tracking Today, Spotlight)

Competition authority wants to dig into your M&A transaction. (Speed Round)

Domty going public in March, state’s Arab Investment Bank looks at listing. (Speed Round)

Egypt purchasing managers’ index slides for fourth month (Speed Round)

Agriculture Ministry says uncle, okays ergot (Speed Round)

CBE caps parallel market exchange rate at EGP 8.65 for USD 1 (Speed Round)

Surprising no one, the USD 1 bn World Bank loan may be conditional on VAT after all, per a leaked decree. (Speed Round)

El Sewedy subsidiary to build three power stations in Angola (Speed Round)

GAFI wants in on all land tenders (Real Estate)

By the Numbers

WHAT WE’RE TRACKING TODAY

Italian Economic Cooperation Minister Federica Guidi reportedly cut short her visit to Egypt last night after the Italian Foreign Ministry said missing 28-year-old Italian doctoral student Giulio Regeni is feared dead, Al Masry Al Youm reports. The ministry did not disclose further details and Egyptian authorities have not commented on the case. Guidi was in Cairo with a delegation of Italian companies, which AMAY says will also likely return to Italy and not participate in further meetings. The move leaves uncertain the fate of agreements due to be signed today as well as an investment summit scheduled to take place later this month. (We have more on the trade delegation’s visit in our Spotlight, below.)

Regeni’s body is in Zeinhom morgue, activist lawyer Mohamed Sobhy alleged in a Facebook post in Arabic during the early hours of Thursday morning, and Italian media are reporting the corpse shows signs of torture. Sobhy claims he was not permitted to enter the morgue, leaving him unable to confirm the Italian media reports. The lawyer said Egypt’s Interior Ministry told him the Italian Ambassador and a lawyer have seen the body. Italian newswire ANSA reported Regeni’s body was found in a ditch near the Hazem Hassan building on the Cairo-Alexandria Desert Road. (Read in Italian)

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ON THE HORIZON

Former Mexican President Felipe Calderon will be in Cairo for the “A Commitment to Development: The Private Sector’s Role in Inclusive Growth” conference along with Egyptian ministers Tarek Kabil, Ashraf Salman, Ghada Waly and Khaled Hanafy. The gathering is being organized by AmCham and the UNDP and will take place on Sunday, 7 February, at the Four Seasons Nile Plaza. Registration information is here and the conference agenda is here.

The Business News Summit on Capital Markets and Financing Growth is being held this coming Tuesday at the Nile Ritz-Carlton, Cairo. The summit will feature speakers Investment Minister Ashraf Salman and Housing Minister Mostafa Madbouly.

The 2016 Solar Power North Africa Conference takes place in Cairo next week on 8-11 February.

A CONTRARIAN VIEW
Could the Central Bank’s new directives be the, uhm, encouragement that Egypt’s banks need?

The entire banking sector is being marshalled to back public policy, moving banks away from an operational model that centered on lending to the debt-hungry government and public sector. New CBE directives now point to a strong push for SME funding and away from business as usual. So will these latest moves be a trigger for real action? Will Egypt’s small entrepreneurs finally be allowed to bloom? Is the moment when a young Egyptian entrepreneur can go into a bank with a solid business plan and a dream and walk out with funding finally upon us? Tap here to read the full piece, written exclusively for Enterprise.

About the author: The author is a senior professional in the financial services sector.

LAST NIGHT’S TALK SHOWS

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SPEED ROUND

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The Egyptian Competition Authority wants oversight on M&A transactions, Al Masry Al Youm is reporting, saying the ECA wants amendments to the antitrust act that would give it clear authority to review proposed M&A transactions. The news came out of a workshop on the Anti-Monopoly and Fair Competition Act organized by the ECA at which participants suggested recent amendments to the act had watered it down.

Leading cheese producer Domty will go public in March, Chairman and Managing Director Omar El Damaty told Reuters. The newswire reports in a very brief piece that the Arabian Food Industries Co., as Domty is formally known, plans to raise EGP 1 bn from the listing.

The National Investment Bank (NIB) of Egypt plans to float some of its shares in the Arab Investment Bank (AIB) on the EGX “soon,” board member Momtaz Al Saeed said on Tuesday. The move aims to strengthen the Arab Investment Bank’s financial position, he added.
NIB controls a 91.5% stake in AIB, with the remainder of the shares divided between the Egyptian, Syrian and Libyan governments.

Non-oil private sector downturn continues in January: Business conditions in Egypt’s non-oil private sector deteriorated for the fourth straight month in January as the Emirates NBD Egypt PMI registered a reading of 48. There are ongoing reductions in output, decreasing new orders domestically and from abroad, as well as a drop in employment. The drop in output and new work for the fourth straight month marked the longest period of joint decline in more than two years. The fragility of the economic climate and concerns over security led the drop. Employment also fell in January, “marking an eight-month sequence of job losses.” One of the few upsides is that cost pressures facing firms were not passed on to consumers in light of strong competition. Things will get better, Jean-Paul Pigat, Senior Economist at Emirates NBD, expects. “Economic activity to accelerate in the coming months, with our forecast for real GDP growth in FY2015/16 sitting at 3.9%.”

Agriculture Ministry yields to market pressure: Egypt will accept wheat shipments with up to 0.05% ergot, reversing a zero-tolerance policy, the Agriculture Ministry says, according to Bloomberg. Confusion over the policy had forced the country to cancel a tender on Tuesday after no bids. “The new rules bring Egypt back in line with international standards and may ease confusion among traders over shipping requirements,” Bloomberg says. The Agriculture Ministry issued a statement on Wednesday upholding its ban on the 63k ton shipment from France for reportedly exceeding the 0.05% ergot content limit, Al Mal reports.

CBE caps parallel market’s exchange rate at EGP 8.65 for USD 1: The CBE has capped the parallel market’s exchange rate, setting the sale price of FX at EGP 8.65 per USD 1 at a meeting on Sunday with FX exchange proprietors and the FX Exchange Division of the Chambers of Commerce, which we noted on Monday. The CBE issued a stern warning that it would pull licenses if exchange bureau operators went over the cap, prompting exchanges to promise to abide by it. Sure enough, Wednesday’s parallel market rates saw a drop of EGP 0.05 in the rate to USD 8.65, Al Borsa reports.

In other FX news, Beltone Financial Research is predicting that the EGP will depreciate to the tune of EGP 11.5-12 per USD 1 by the end of 2020, according to Al Mal. Beltone is expecting the price gap between the official rate and the parallel market to narrow, with the CBE rate reaching EGP 8.75-9.00 this year.

Unpublished presidential decree suggests USD 1 bn World Bank loan in December is conditional on adoption of VAT -Mada Masr: A document alleged to be a copy of a presidential decree dated 28 December shows the USD 1 bn World Bank loan to Egypt is conditioned on the adoption of a value-added tax (VAT), among an overall improvement of the country’s macroeconomic framework. The document (here in an Arabic-language pdf) was published exclusively by Mada Masr and appears to be the same mentioned by Al Mal on Saturday — reports that Sahar Nasr denied on Monday. Nasr had said the economic reform plan was drawn up by Egypt and approved by the World Bank and explicitly denied conditionality applied. With regard to the Civil Service Act, Mada Masr notes: “The provisions of the civil service law are not explicitly mentioned. However the list of prior actions includes the 2016 budget law, which calls on government entities to contain the public sector wage bill.”

The housing gap in Egypt is estimated at 3 mn units, growing 300k-500k units a year, and private developers only supply 20,000 units annually, SODIC’s Managing Director Magued Sherif tells Oxford Business Group. He believes concerns over a potential property bubble are overblown as demand is not met yet, even at the high end of the market. The private sector finds it challenging to supply middle-income buyers due to the cost and size of land prices on offer by the government, making targeting lower segments more challenging — an issue exacerbated by the absence of a strong mortgage finance system.

El Sewedy subsidiary to build three power stations in Angola: A subsidiary of El Sewedy Electric signed a contract to build three power stations in Angola for USD 484.5 mn, according to an emailed release. However, the contract is “not yet in effect,” the firm says, according to Reuters, as the agreement “is subject to approval by Angola’s president and a specialized court.” The contract includes “supplying, building, operating, financing and maintaining the stations.”

Russian authorities will send the results of their review of Egyptian airport security within the next 15 days, according to the Chairman of Cairo Airport Company Ahmad Saeed. “Saeed told journalists that several countries reviewed the security of Cairo airport, including the United States and Russia” and that “Egypt received initial security recommendations from Russia … However, the final report has yet to be delivered Egyptian authorities,” Daily News Egypt reports.

The Ismail cabinet held its weekly meeting on Wednesday, focusing on the Investment Ministry’s new plans to expedite permits and licenses. Among the measures are a new, streamlined electronic registration system, cutting red tape for the formation of companies from six procedures to one, merging different bureaucratic connect factories to the electricity grid, linking commercial and real estate registry databases electronically, and forming units to expedite different insurance procedures. In other words, everything we’ve been talking about since 2001. Perhaps more significantly: The Investment Ministry is also drafting a new bankruptcy law to help restructure faltering businesses, according to an email statement from the cabinet. The cabinet also reviewed the changes made to the Civil Service Act and formed a committee to redraft it ahead of presenting it to the House Speaker for feedback. It also decided to begin contracting the private sector to develop New Al Alamein City and backed forming a high council on transportation. Other notable decisions included:

  • Appointing the trade and industry minister to act as the minister in charge of the SME portfolio;
  • Approving a USD 162 mn financing agreement with the Arab Fund for Economic and Social Development to fund building new water and sewage networks;
  • Amending the Railway Act to criminalize any acts of vandalism, trashing or tampering with equipment in a way that hampers the safety of the railway lines with fines and jail time;
  • Approving a USD 13 mn grant from Japan to fund outpatient children’s clinics for Cairo University’s training hospitals;
  • Ratifying the customs cooperation protocols agreement between Russia and Egypt signed on 23 October 2015;
  • Registering under the Beit Al Watan project homeowners who paid after 24 December 2015.

The Devil’s Rejects: Cairo’s taxi drivers have called for a protest against Uber and Careem today in Mohandiseen (Arabic, jpg). Cairo’s taxi drivers are set to stage a demonstration at Mostafa Mahmoud Square on Gamaet El Dewal El Arabeya St at 6 pm CLT today in protest of Uber and Careem drivers’ superior personal hygiene, service and safety standards, as well as against the car service drivers’ lack of commitment to price-gouging, scratching themselves, cat-calling, ogling, et cetera. Cairo has been the fastest growth market for Uber outside of San Francisco, according to Ahram Online. We wonder why.

The origin of Cairo’s taxi drivers is unclear, though most biologists agree they likely crawled up through fissures in the Earth’s surface. Caution: If any of our readers accidentally stumble upon one in the wild, please bear in mind Cairo’s taxi drivers have been known not just to bite and scratch, but also forcibly subject their passengers to listen to electroshaabi mahraganat music, and engage in long meandering conversations involving progressively invasive personal questions.

It would appear the near-entirety of the country is against the taxi drivers’ call for a protest, with a hashtag called التاكسي في مصر# [#Taxi_in_Egypt] created specifically so people could share their taxi horror stories.

Uber has previously faced protests from taxi drivers in Paris, Toronto and London, among other locations. Also protesting Uber today: The Financial Times (paywall), which rather dislikes the service’s new logotype and app icon. CEO, Founder and globally ranked Wii Tennis freak Travis Kalanick explains the redesign in a blog post here.


Egypt’s Court of Cassation has overturned the death sentences of 149 Muslim Brotherhood supporters and called for their retrial, BBC reports. In February 2015, a criminal court sentenced 183 Muslim Brotherhood supporters (34 in absentia) to death for allegedly carrying out an attack on a police station in Kerdasa in which at least 11 officers were killed, Ahram Online writes.

Barclays will cut 150 jobs in Dubai as it restructures its Middle East corporate banking business, a person with knowledge of the matter tells Bloomberg. “The bank will close its offices at Emaar Square and relocate bankers and support staff to its office at Dubai International Financial Centre … Barclays will keep its corporate branch in Abu Dhabi and wholesale banking license with U.A.E. Central Bank,” the source adds. The bank is planning to cut 1,200 jobs worldwide.

Blankfein is back: Goldman Sachs CEO Lloyd Blankfein returned to the public spotlight yesterday after 600 hours of chemotherapy to treat lymphoma, appearing on CNBC’s Squawk Box. You can read CNBC’s summary at this link, which also includes multiple video clips from Blankfein’s appearance talking about everything from why it’s an “interesting time to be in the market” to market cycles and how he feels after cancer treatment. The bottom line: “I’m generally sanguine. We muddle through. I think some of this is an overreaction to the overreaction of assets being so swollen. … This adjustment, certainly in equity prices, makes sense to me. If this is a slow-growth world and multiples are shrinking … in a riskier environment, you kind of get to a S&P [500] that we’re approaching now.”

Other international headlines this morning that either carry implications for Egypt or that are simply worth noting in brief:

  • EBRD is joining international efforts to tackle the Syrian refugee crisis with a financing package that could be worth up to EUR 900 mn to support infrastructure projects in some of the more affected countries. “Speaking at a conference in London on Wednesday, EBRD President Sir Suma Chakrabarti said the Bank was building a pipeline of infrastructure and private sector investment projects in Turkey and Jordan to support refugee-hosting communities.” UNHCR estimates there are almost 120k Syrian refugees in Egypt, many living in dire conditions.

SPOTLIGHT on the Italian trade delegation visit

Italian Economic Cooperation Minister Federica Guidi was at the head of a 46-company business delegation in Cairo when she cut short her visit last night after reports that a missing Italian graduate student had been found dead. The delegation was to lay the groundwork for an Egyptian-Italian Investment Summit to held some time this month. Before the Italians pulled the plug on the visit — calling into question whether we will see a summit this month — a number of agreements and cooperation protocols were on the agenda:

Eni plans to invest USD 13 bn in the coming period to develop the Zohr field, head of the Egyptian-Italian Business Council Khaled Abu Bakr tells Al Masry Al Youm. Abu Bakr adds that Italian companies have expressed interest in logistics projects in the Suez Canal Development Area.

Italian credit insurance company Sace will sign an agreement toguarantee USD 1.2 bn in financing to fund the expansion of the Middle East Oil Refinery (MIDOR), says Guidi. MIDOR plans to borrow USD 1.4 bn to expand its refining capacity, Al Borsa reports.

Trade Minister Tarek Kabil, who joined Guidi at a press conference, had expected the government to sign a USD 45 mn loan agreement today with Italy to fund the development of the furniture and leather work cities in Damietta and Robeky. Speaking before the Regeni case broke, he added that the funds would be transferred as soon as a final agreement is reached on the specific projects involved.

Guidi also met with President Abdel Fattah El Sisi and Prime Minister Sherif Ismail on Wednesday. Investing in the Egyptian market will give Italian companies access to markets in the Arab region and Africa, with promising opportunities in the energy sector, El Sisi said at the meeting, according to readout provided by Ittihadiya. The president pointed to projects and opportunities in the New Suez Canal zone, in which he encouraged the Italian companies to invest.

Italian Prime Minister Matteo Renzi is also expected to be visiting Egypt during the first half of the year, according to a statement by Italian embassy officials published in AMAY (and, critically, released before news broke that a body believed to be Regeni’s was found).

THE MACRO PICTURE

African Development Bank (AfDB) head Akinwumi Adesina tells the FT (paywall) that the AfDB is poised to expand lending across Africa as commodity exporters have been hit hard by the “slump in demand for natural resources from China and the drop in the price of oil and other minerals.” Adesina says, “The current situation is an opportunity for us at the African Development Bank.”

Fed maybe admits it jumped the gun: “If [these] financial conditions were to remain in place by the time we get to the March meeting, we would have to take that into consideration in terms of that monetary policy decision,” president of the Federal Reserve Bank of New York William Dudley tells MNI, according to Reuters. Dudley’s comments come as financial markets ratcheted expectations of further rate hikes, adding that the recent turmoil in financial markets could alter the outlook for growth and risks to the economy.
Could Gazprom be about to start a price war in the global gas market? Jack Farchy of the FT (paywall) asks. And while it may seem this is the last thing Russia needs after the impact of cratering oil prices, analysts say it may not be so far fetched. “Already low prices in the European gas market mean it could relatively easily push prices to a level at which it would be unprofitable to ship LNG from the US — and in doing so defend its market share in a region that accounts for the bulk of its profits.”

EGYPT IN THE NEWS

The word “death” dominates the two leading headlines in international coverage of Egypt this morning, with wire services, broadcasters and blogs around the world running with the apparent murder of Italian graduate student Giulio Regeni and an appeal court overturn death sentences handed to 149 supporters of the Muslim Brotherhood.

WORTH READING

Everything you ever wanted to know about the Brotherhood’s internal feud and ongoing disintegration: Two recently-published pieces together paint a more or less complete picture of the widening split inside the Brotherhood between its older members in exile and its younger cohorts here in Egypt: The Brotherhood in the Shadow of the January 25 Anniversary, by former Dostour party spokesperson Khaled Dawoud for the Atlantic Council and The Brotherhood Breaks Down by Eric Trager and Marina Shalabi for the Washington Institute.

ENERGY

Nawart accelerator to help 15 renewable energy startups in Egypt
Egypt’s single-industry accelerator Nawart Renewable Energy Support Program plans to help 15 renewable energy startups for 10 months with potential investment promised for “at least three” of those at the end, Wamda’s Rachel Williamson writes. CleanTech Arabia, PricewaterhouseCoopers, GIZ and the Ministry of Trade and Industry have lined up five investors committed to investing USD 160k at an investment range of USD 10,000-90,000 for 15-25% equity stakes. Nawart is a program, not an incubator, as they do not take equity “and the support level is based on the needs of the startup rather than a set package.” (Read)

Armed Forces Engineering Department approves three transformer substation projects
The Armed Forces Engineering Department has approved three projects to build 220 kV/66 kV transformer substations at a total cost of EGP 600 mn, sources within the Electricity Ministry tell Al Mal. Alstom will build the substation in the “Investors” neighborhood in Cairo, at a total cost of EUR 24 mn, while a consortium featuring AVIC was awarded the contract for the Imbaba substation for EUR 22.3 m  and EGEMAC the Hadabit Al Ahram substation with an EGP 198 mn bid. The projects will be financed on an EPC-plus-finance basis and have a project duration of six to eight months, the sources added. (Read in Arabic)

Oil Ministry looking to partner on refining projects with Japan
Partnerships on oil, gas and refining projects were the topic of discussion in a meeting between Oil Minister Tarek El Molla and the Japanese Ambassador in Cairo. The coming period will see negotiations over various fields in the oil and gas industry, including petrochemicals and refining, sources say. El Molla says there are also talks with Japan to build a new drilling rig for Egyptian Drilling company. (Read in Arabic)

Gov’t owes EGP 10.8 bn in unpaid power bills, prompting power cuts by Electricity Ministry
The government’s unpaid electricity bills have grown to EGP 10.8 bn, according to Electricity Ministry sources speaking to Al Mal. The source adds that 85% of unpaid power bills are owed by the government, prompting the electricity minister to order power distributors to cut power to a number of government bodies. (Read in Arabic)

INFRASTRUCTURE

General Authority for Roads and Bridges completes Al Salam bridge developments, road parallel to Suez Canal
The General Authority for Roads, Bridges and Land Transport has completed road duplication work in cooperation with the Armed Forces on a 180 km road parallel to the Suez Canal at a total cost of EGP 80 mn, says authority chief Adel Tork. The authority was tasked with developing all the roads and bridges leading to and connecting the Suez Canal, Ismailia and Port Said, he says. Additionally, the authority has completed upgrading the Al Salam bridge in Ismailia, making it operational again. However, the piece did not mention when the bridge would be open to traffic. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Food Industries Holding Company inks USD 2.5 bn credit facility with five banks
The Food Industries Holding Company has inked the final agreements for a USD 2.5 bn credit facility to finance domestic commodity purchases to sell them as part of the Supply Ministry’s ration system, reports Al Mal. The banks include Banque Misr, QNB, the Arab Bank, AAIB and Banque du Caire. The financing will come in the form of a two-year revolving letter of credit, sources tell Al Mal. (Read in Arabic)

MANUFACTURING

KIMA to tender second phase of converting factories to natural gas
The Egyptian Chemical Industries company will issue a tender in three months to complete the second phase of the project to convert its factories to using natural gas instead of electricity, according to Managing Director for Technical Affairs Gamal Zahran. The cost of the second phase is estimated at around USD 150 mn, while the total cost of both phases is USD 730 mn. Italian engineering and construction firm Maire Tecnimont will complete the first phase in mid-2018, he adds. (Read in Arabic)

HEALTH + EDUCATION

Egypt has taken preventative measures against Zika virus, says Health Ministry
Egypt has already taken preventative measures against the Zika virus outbreak, Health Ministry spokesperson Khaled Megahed tells Daily News Egypt. The ministry is involved in securing all ports and airports by screening individuals who may have come in contact with the virus and quarantining them if necessary, he says. It is also involved in testing mosquito populations and monitoring the spread of the virus. The Health Ministry on Wednesday also warned pregnant Egyptian women against travelling to South and Central America, Ahram Online reports. Egypt, Sudan, Saudi Arabia and Somalia are among countries in the region with the highest risk of contracting the epidemic, World Health Organization spokesperson Rana El Seydany tells Al Borsa.

REAL ESTATE + HOUSING

Land tendered by GAFI and NUCA will not fall under new real estate regulations
Land tendered jointly by the Investment Authority and the Housing Ministry in place of the one-stop-shop policy will not fall under the new real estate regulations ratified by NUCA last October. Housing Ministry sources tell Al Mal that these new regulations must be ratified by the cabinet before they come into effect, which may be three months from now. The new regulations set guidelines for bidding on tenders; establish a ranked database for developers; streamline bureaucratic procedures; set penalties for investors who do not meet terms and conditions; and form a committee to expedite ongoing disputes with developers and investors. Developers have been hesitant to buy into the tender, which was launched in early January, due to discrepancies between land tendered under the Investment Act and under the new regulations, such as service and administrative fees. It remains to be seen how the government can reconcile the one-stop shop placeholder policy with the new regulations for future land tenders.

GAFI doesn’t care which gov’t body issues land tenders as long as it’s involved
The Investment Authority (GAFI) does not care what government body issues land as long as it can expedite the process and is represented in the Investment Ministry’s tenders committees, according to GAFI head Ala’ Omar. Any tenders issued without the involvement of GAFI will be appealed under the Investment Act, Omar said following an announcement that the ministry would tender a 1,500 feddan plot in Kafr El Sheikh for industries next month. (Read in Arabic)

Tourism Development Authority to issue land plots in Ras Al Hekma this fiscal year
The Tourism Development Authority (TDA) aims to develop the Ras Al Hekma area in the North Coast by pricing land plots totalling 40 mn sqm ahead of issuing them to investors, says TDA head Serag El Din Saad. There is complete coordination between TDA, the Marsa Matrouh governorate and the National Center for Planning State Land Use, says Saad, noting that the cabinet instructed them to speed up the process. The TDA is aiming to issue 5-10 mn sqm to investors before the fiscal year is over, he adds. (Read in Arabic)

Saudi Egyptian Construction borrows EGP 600 mn for Secon Nile Towers
The Saudi Egyptian Construction Company signed a EGP 600 mn syndicated loan agreement with the National Bank of Egypt and Banque Misr to finance the EGP 1.8 bn Secon Nile Towers project. The five-year loan is the second one for the project following a EGP 92.8 mn loan in 2013, Al Borsa reports. (Read in Arabic)

NUCA to issue tenders for 8,000 plots in March
NUCA plans to issue land tenders for 8,000 plots across new communities next month, but is awaiting final approvals from Housing Minister Mustafa Madbouly. Tenders for the land are expected to total EGP 5 bn, with Housing Ministry sources reporting that the land value may reach EGP 6 bn. (Read in Arabic)

TOURISM

Tourism slump hits food commodity suppliers
Suppliers of food commodities to hotels have been “hit especially hard” by the slump in tourism, Daily News Egypt reports. Food supplies to hotels have dropped 70% as occupancy rates fell and 90% of contracts signed with hotels were cancelled, says Deputy Chairman of the Tourism Facilities Chamber at the Egyptian Federation of Chambers of Tourism Nagy Erian. “The decline includes all food commodities especially meat, fish, poultry, water, yogurt, vegetables, and fruit in all tourism destinations in Egypt.” Even a surge in domestic tourism would not be sufficient to drive hotels to renew the cancelled contracts, another source says. (Read)

EGP 43 mn in losses over three months since the Metrojet crisis, says EGOTH
The Egyptian General Company for Tourism and Hotels (EGOTH) incurred EGP 43 mn in losses over the last three months since the Metrojet crisis, said EGOTH Chief Samir Hassan. Some of the company’s hotels are operating at a 5% occupancy rate, particularly in South Sinai.
EGOTH owns over 10 hotels between Cairo, Luxor, Aswan, Alexandria, South Sinai and Giza. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

CHF 2 mn to develop fish farming
The international cooperation office at the Swiss Embassy will launch the Sustainable Transformation of Egypt’s Aquaculture Market System program in cooperation with the World Fish Center and CARE to increase the sustainable production of fish in Egypt. The three-year program will aid farmers and traders in seven governorates with a budget of CHF 2 mn (USD 2 mn). The program involves training farmers, supporting new fish farm locations and developing the marketing of fish-farm products. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Freezone manufacturers allowed to source domestic inputs – decree
Projects in freezones have the right to obtain raw and production materials from domestic sources, Trade and Industry Minister Tarek Kabil decreed. The decree, which reverses six earlier ones, exempts freezone companies from tariffs and restrictions on using domestic inputs for exports. Kabil says the needs of the plants will not impact local manufacturers’ demand but will help those established in freezones expand. (Read in Arabic)

USD 1.4 bn: FDI in Egypt during 1Q2015-16
Foreign direct investment in Egypt stood at USD 1.4 bn during the first quarter of FY2015-16, according to Investment Minister Ashraf Salman. The government plans to grow this number to USD 8-10 bn by the end of the year. (Read in Arabic)

NATIONAL SECURITY

Two militants shot dead in a Hadaek Al Maadi raid
Two men were reportedly shot dead by police forces in a raid on a house in Hadaek Al Maadi, according to Ahram Online. The pair were killed in a firefight with police forces as they were reported to be in possession of weapons and firearms that are typically “used to attack the army and police,” including belts used in suicide bombings, an RPG and bombs, an official said. The official added that the two militants opened fire on police forces conducting raid. The Interior Ministry said the militants were affiliated with the Ajnad Misr terrorist organization and involved in the killing of three police officers, Al Shorouk reports.

ON YOUR WAY OUT

Nestlé Egypt has nothing to do with disruption and protests at an affiliated plant in Qalioub, the company says. “Contrary to media reports stating otherwise, the factory is in fact owned by a company that manufactures chilled dairy products under license from Nestlé … The resolution of disruption at the factory is a matter for the current owners.”

The Sudanese Navy recovered the body of one of 12 missing Egyptian fishermen who were aboard a fishing boat that sank in Sudanese territorial waters on Saturday, Daily News Egypt reports. 14 fishermen were on the Zainat Al Bahrain when it sank, but two men were rescued the same day.

BY THE NUMBERS
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USD CBE auction (Tuesday, 02 February): 7.7301 (unchanged since Wednesday, 11 November)
USD parallel market (Tuesday, 02 February): 8.65 (-0.13 since Tuesday, 02 February)

EGX30 (Wednesday): 6,066.54 (0.96%)
Turnover: EGP 379.89 mn
EGX 30 year-to-date: -13.4%

THE MARKET ON WEDNESDAY: The EGX30 gained 0.96% with shares worth EGP 379.9 mn changing hands and foreign investors being the sole net sellers. 18 of the index’s constituents ended in the green, with the top gainers being Global Telecom and El Sewedy Electric. CIB inched up 0.1% and was the day’s most heavily traded stock in terms of value. Heliopolis Housing, Egyptian Resorts, Orascom Construction and Ezz Steel all closed in the red. Major regional indices followed suit, with the Saudi Tad­awul rising 0.9% and Dubai’s DFM 0.2%.

Foreigners: Net short | EGP – 24.8 mn
Regional: Net long | EGP + 2.7 mn
Domestic: Net long | EGP + 22.1 mn

Retail: 73.2% of total trades | 71.0% of buyers | 75.4% of sellers
Institutions: 26.8% of total trades | 29.0% of buyers | 24.6% of sellers

Foreign: 14.4% of total | 11.1% of buyers | 17.6% of sellers
Regional: 3.7% of total | 4.1% of buyers | 3.4% of sellers
Domestic: 81.9% of total | 84.8% of buyers | 79.0% of sellers


WTI: USD 32.39 (+9.24%)
Brent: USD 35.04 (+7.09%)
Gold: USD 1,140.50 / troy ounce (-0.07%)

TASI: 5,927.36  (+0.91%)
ADX: 4,054.59 (-0.83%)
DFM: 2,975.55 (+0.17%)
KSE Weighted Index: 349.61 (-4.08%)
QE: 9,486.71(-1.52%)
MSM: 5,165.510 (-0.51%)

 

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

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