Egyptian offerings will lead African IPOs to a six-year high, says Baker & McKenzie

TL;DR

Egyptian offerings will lead African IPOs to a six-year high, says Baker & McKenzie; sees seven transactions worth just under USD 1 bn. (Speed Round)

Barclays officially exiting Africa, cuts dividends, moving more assets into non-core units. (Speed Round)

Cheese maker Domty releases intention to float, heading to market with offering of 49% of existing shares. (Speed Round)

Pioneers Holding to list Rooya Group in 2H2016, raising EGP 2-2.5 bn. (Speed Round)

Afreximbank pledges USD 1.7 bn in credit facilities to Egypt during 1H2016. (Speed Round)

Scrapping of treasury bond sale could signal a rise in interest rates this month. (Speed Round)

USD hits up to EGP 9.35 in the parallel market. (Speed Round)

British Airways suspends EGP ticket sales due to repatriation woes. (Speed Round)

Terra Sola studies USD 3.5 bn solar energy projects in Egypt. (Energy)

By the Numbers

WHAT WE’RE TRACKING TODAY

It’s “Super Tuesday” in America, and both Hillary Clinton and Donald Trump are cleaning up. The best live coverage is from the New York Times, while Politico has the best insider-flavoured analysis. At dispatch time, Clinton had taken six states to Bernie Sanders’ two and was “pivoting to Trump,” Politico said, as the man with the worst comb-over in history took six states to Cruz’s two, dealing from which comparative moderate Marco Rubio seems unlikely to recover.

WHAT WE’RE TRACKING THIS WEEK

President Abdel Fattah El Sisi is expected to be in South Korea tomorrow to meet with President Park Geun-hye, the prime minister and the speaker of parliament. The president is also expected to sign a declaration on the promotion of relations to the level of Comprehensive Partnership and Cooperation between the two countries, according to an Ittihadiya statement.

The Emirates NBD / Markit Purchasing Managers’ Index for Egypt, the UAE, and Saudi Arabia are set to be released tomorrow at 7:30am CLT.

ON THE HORIZON

The government will present its plan to the House of Representatives in the second half of March, announced Prime Minister Sherif Ismail, saying the plan was a collaborative effort and that parliament was a partner to the executive branch of government. The delay in the announcement had been reportedly due to procedural setbacks from within the House.

The 12th Annual EFG Hermes One on One 2016 runs next week from 7-9 March (Monday-Wednesday) atAtlantis, The Palm in Dubai.

** DO YOU WANT TO READ OUR GCC EDITION? **

We have recently launched the beta version of our Enterprise GCC edition, and are now publishing Sunday-Thursday at 3 am UTC/ GMT (7 am UAE, 6 am KSA, 5 am Cairo), give or take a few minutes. We’re in beta, after all. You can sign up via this link and may view the Enterprise GCC site online at gcc.enterprise.press. Comments, suggestions and criticisms are always welcome at editorial@enterprisemea.com.

LAST NIGHT’S TALK SHOWS

Our talkshow roundup will return tomorrow.

** SHARE ENTERPRISE WITH A FRIEND **

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

SPEED ROUND

African IPOs will hit a six-year high, led in large part by activity out of Egypt, global law firm Baker & McKenzie says. The firm forecasts African IPOs are set to raise more than USD 3.1 bn in 2016, with “15 IPOs already in the pipeline, at least 3 more on the near horizon.” Edward Bibko, head of the Firm’s EMEA Capital Markets Practice, said: “There’s enormous pent up demand among issuers to conduct capital raisings, particularly in Egypt, which is showing strong growth and the emergence of a larger middle class. The wider continent still faces challenges and there is little local institutional investment or retail demand other than in the biggest economies. This means larger companies have to dual-list in a global financial centre like London, as well as their home market, to avoid volatility driven by the fact that skittish international investors make up the majority of market activity.” The report suggests there are as many as seven IPOs worth just short of USD 1 bn in aggregate coming out of Egypt. Read Baker & McKenzie’s statement on here or check out their three-page infographic on their forecast here (pdf). The Financial Times has also picked up the story.

Barclays is selling stakes in Africa, cutting dividends, and moving more assets into its non-core units, according to CEO Jes Staley. “It’s very hard to own 62% of a business where you have 100% of the liabilities,” Staley explained the drivers behind the decision to move out of Africa on Bloomberg TV. Barclays will sell down its stake in Barclays Africa Group over the next two to three years to a level that allows it to deconsolidate the business “to accelerate our strategy and simplify the group, as we prepare for regulatory ring-fencing requirements,” Staley said. He added that reducing the dividend for 2016 and 2017 was a “very difficult decision to make,” but will allow the bank to speed the shedding of non-core assets. Barclays had already added GBP 8 bn in risk-weighted assets to its non-core division, bringing the total to GBP 55 bn. Bloomberg writes that “the businesses being transferred to non-core are wealth-management units in Asia and the Americas, units in at least nine countries including Egypt and Zimbabwe, and certain product lines in the investment bank.” You can watch Jes Staley’s whole interview with Bloomberg Television here (run time 9:28). Barclays also confirmed yesterday it is selling its businesses in Egypt and Zimbabwe, which are held separately from its Africa unit, the Financial Times notes in passing. Meanwhile, Reuters also carries coverage of the sale in Clouds gather over Africa as Barclays heads out, writing that analysts see no clear buyer for the bank at the moment.

Top Egyptian cheese maker Domty announced yesterday released its intention to float, saying it plans to offer up to 49% of the company’s outstanding share capital listed on the EGX. The transaction will see selling shareholders including the Damaty family and Yehia Bin Laden subsequently subscribe to a closed offering and inject EGP 300 mn into the company to fund its expansion plans. The offering of 122.5 mn shares includes 110.25 mn in an international offering and 12.25 mn in an Egyptian retail offering. Shares will ultimately trade under the ticker DOMT. EFG Hermes Investment Banking is sole global coordinator and bookrunner for the transaction, while Baker & McKenzie LLP is international counsel to the issuer and Matouk Bassiouny is serving as local counsel. Daily News Egypt quotes pretty liberally from the ITF here.

Pioneers Holding is planning on listing Rooya Group’s shares in 2H2016 and expects to raise EGP 2-2.5 bn, CEO of Pioneers Holding Waleed Zaki told Reuters’ Arabic service. Pioneers, which acquired 60% of Rooya’s shares last year for EGP 1.226 bn, is working on finalizing an increase in Rooya’s capital by EGP 1.25 bn through existing shareholders in 2Q2016. “The IPO will depend more on Arab and foreign investors,” Zaki said. He added that Pioneers submitted an offer to acquire the remaining 66.8% of Unipack-Universal’s shares at EGP 7.5 per share and expects the agreement to be concluded before the end of March. Zaki told Reuters Pioneers might consider issuing dividends after concluding the agreements it is targeting and the Rooya IPO. Parts of the interview were translated to English here.

Rising yields on Egyptian treasuries signal the market is expecting the CBE to raise interest rates this month to “dampen inflation and ease mounting pressure on the currency,” bankers and economists said, according to Reuters. The discussion comes after Egypt cancelled a treasury bond sale on Monday, as we noted yesterday. The Central Bank of Egypt’s Monetary Policy Committee kept rates unchanged hold last month, but economists are now betting on a hike at the next meeting on March 17. “The yields on treasuries … are signalling that the market is expecting a hike in interest rates in the upcoming MPC meeting,” said Hany Farahat, senior economist at CI Capital, “the sooner the Central Bank of Egypt devalues the pound the less they would need to increase policy rates going forward.” Angus Blair, chief operating officer of Pharos Holding, forecast a 50-basis-point increase as the government seeks to cover its budget.

The African Export Import Bank (Afreximbank) pledged to deliver USD 1.7 bn in credit facilities to Egypt during 1H2016, said Afreximbank head Benedict Oramah in an interview with Al Ahram. Oramah said Afreximbank will open new lines of credit with local banks worth USD 100 mn. USD 500 mn of these are to help Egyptian importers through a foreign currency crisis. He added that the total amount negotiated with Egyptian banks in 2015 amounted to USD 5 bn. He also revealed that he is in talks with International Cooperation Minister Sahar Nasr and Trade Minister Tarek Kabil to expand the bank’s aid program here.

British Airways (BA) has suspended sales of tickets in EGP and will be selling tickets in USD made available only through local banks or via credit cards, said head of the Tourism Advisory Council’s aviation committee Gehad Al Ghazaly. But that’s not all, folks: BA also replaced fleets of 230-seater planes with 180-seater ones and has plans to lower the capacity of planes to 112 seats in a bid to reduce its business in Egypt in the face of persistent problems repatriating funds from Omm El Donia. The CBE promised to resolve the issue of USD repatriation for airlines within 48 hours, Al Ghazaly told Al Mal.

Corporate demand and the mid-market are driving growth in Cairo’s hotel market, and hotel operators and investors are aligning their services to cater to evolving demand traits, according to a snapshot of a Colliers International report. Head of Hotels at Colliers International MENA Filippo Sona said there is “a distinct shift in both the source market and segmentation that is driving demand in Cairo. Whereas historically, international, mostly Europeans, visiting Cairo for leisure purposes have been a key driver of the market, GCC nationals visiting either for leisure or business are now a key component. This represents a number of opportunities for hotel operators and investors who would benefit from aligning their services to cater to the evolving demand traits.”

The parallel market rate has risen to EGP 9.35 per USD 1 in some areas. Importers speaking to Al Mal speculate that the rise was due to many FX exchanges refusing to sell USD and complying with the CBE rate over the past few days, amid intense CBE scrutiny.

Automotive sales in Egypt fall 32% year-on-year in January, dropping to 15,400 cars, according to a report from industry association AMIC. Passenger car sales took the brunt of the hit, plummeting 38% year-on-year to 9,600 units from 15,500 in January 2015, while bus sales fell 18.4% to 3,600 units, Al Borsa reports.

Valeant, the owner of Egypt’s Amoun, is under investigation by the U.S. Securities and Exchange Commission (SEC). The company “received a subpoena from the SEC in the fourth quarter of 2015 and, in the normal course, would have included this disclosure in its 2015 10-K. We do not have further detail to provide at this time,” Valeant’s spokesperson said. A source told Reuters the probe was separate from an ongoing one concerning the acquisition of Salix.

Third time’s the charm? The Chris Rock Oscars video, again, this time from Digg, so it should still be up. And if not, you don’t need to watch everything. You don’t need to know everything.

CORRECTION- EFG Hermes’ CEO Karim Awad said in his interview with Reuters’ Arabic service, published on Monday, that the firm intends to evolve from being an investment bank focused on the Arab world to one with a wider scope focused on frontier markets, not emerging markets.

THE MACRO PICTURE

PMIs are out folks. China’s manufacturing PMI hasn’t seen a weaker level since 2009, dropping to 49 in February in what the FT (paywall) writes is a signal of a deepening slowdown. Eurozone PMI fell to a 12-month low of 51.2 in February while the U.S. posted the weakest rise in manufacturing output since October 2013 at 51.3. But markets shrugged off the not-so-stellar data, with Euro stocks completing the longest rally since October and China shares rallying.

While Japan also posted weak PMI figures, that’s not what made headlines about the country this morning. Japan sold 10-year debt at a negative yield for the first time, selling JPY 2.2 tn in debt at an average yield of -0.024% on Tuesday. In Europe, yields on German debt remain negative out to eight years with Spanish and Italian debt yields falling this morning. Former Federal Reserve Chairman Alan Greenspan warned in a interview on Bloomberg Television that negative interest rates, if pursued for a very long period, “[warp] the investment pattern on real investments.”

20 developing nations with the highest estimated amount of outstanding debt in foreign and local currency (among them Egypt) will increase borrowing from long-term commercial sources by 4% to USD 1.2 tn in 2016, according to a Standard & Poor’s reported picked up by Bloomberg. This is set to push the total debt for the 20 economies to USD 6.8 tn by the end of the year, up by USD 587 bn from 2015. China is leading the increase in debt, Brazil is second, and India is third.

SWFs pulled USD 46.4 bn in assets out of developed and emerging markets last year, including “heavy redemptions of ‘passive’ or index-tracking equity strategies,” Reuters reports, saying new analysis of numbers released last week “shows sovereign wealth fund … withdrawals were concentrated in equities, largely indiscriminate, and from the most liquid segments of their investments. … Over USD 17 bn was withdrawn from global equity mandates, USD 10.5 bn from U.S. equity funds and USD 3.5 bn from emerging market equities, with the biggest outflows concentrated in passive strategies in each category.”

The owner of the New York Stock Exchange, which goes by the moniker “ICE,” could “gatecrash” the Deutsche Börse-LSE merger, Reuters reports, saying “the announcement by Intercontinental Exchange Inc is the latest development in a long string of mergers, bidding wars and failed deals among global exchanges.” The Wall Street Journal also has the story, but plays it a bit more mutedly.

EGYPT IN THE NEWS

Regeni probably tortured for days, forensics expert says, Justice Ministry denies categorically: Italian student Giulio Regeni was probably “interrogated for up to seven days before he was killed,” an Egyptian forensics official has reportedly told the public prosecutor’s office, according to Reuters. An investigator in the Prosecutor General’s office told the newswire that Director of the Department of Forensic Medicine Hisham Abdel Hamid said “during the questioning that the wounds on the body occurred over different intervals of between 10-14 hours. That means that whoever is accused of killing him was interrogating him for information … The wounds and fractures occurred at different times in intervals during a period of about five to seven days.” The Justice Ministry denied Reuters’ report categorically, according to Al Masry Al Youm. It says Abdel Hamid has not even been questioned in the case and that the newswire’s report is “made up.”

The Guardian picked up on the story, but with a slightly different angle. Italian government-backed energy giant Eni has expressed confidence in Egyptian investigators examining the torture and murder Regeni in response to a call by Amnesty International for the company to put pressure on Egyptian authorities. “In a letter to Amnesty dated 12 February, Claudio Descalzi, Eni’s chief executive, said information he had received through informal contacts in Cairo showed that ‘competent authorities are putting in maximum effort to try to find answers’ to Regeni’s murder.”

For some perspective: remember the tragic hot air balloon accident in Luxor three years ago? Egyptian authorities are still investigating, shocked family members of the victims have recently been told, the South China Morning Post reports.

Foreign Policy is picking up on the fact that Egyptian tourism is still ailing, pointing to the rising number of dive centers shuttering in the Red Sea governorate after the Metrojet crash as proof. Otherwise, the piece offers little else that’s new, offering the trenchant, “Egypt’s economy is paying a hefty price for the Islamic State’s attack against the Russian passenger jet” and the exaggerated, “These flight bans are turning previously bustling resort destinations into ghost towns.”

How slow a news day was yesterday? Bad enough that this made headlines: The Egyptian Football Association has apparently turned down a proposal that it play a friendly match against the Israeli national team, a game proposed by the Israeli Football Association earlier this week after MP Tawfik Okasha was attacked with a shoe in the House for inviting the Israeli ambassador to dinner, Haaretz reports. “We will not agree to any matches with the Israel national team or any Israeli clubs,” said Azmi Megahed, media spokesman for the Egyptian Football Association.

WORTH WATCHING

Watch former American football running back Marshawn Terrell Lynch sing about riding a camel while … riding a camel (run time 0:14). Terrell is in Egypt along with other NFL players for the American Football Without Barriers camp taking place this week. TMZ also managed to get a clip of Miami Dolphins tight end Jordan Cameron catching passes on one of the pyramids (run time 0:13).

DIPLOMACY + FOREIGN TRADE

The new Secretary General of the Arab League could be chosen on 10 March, Egypt’s Foreign Affairs Ministry said. President Abdel Fattah El Sisi has sent a letter to Arab leaders calling for an emergency Arab League session to choose a successor to Nabil Elaraby. The ministry’s spokesperson said Egypt’s candidate for the position, who is yet to be named, has received significant preliminary support.

President Abdel Fattah El Sisi met with Japan’s Crown Prince Naruhito to discuss ways to enhance trade and investment, according to an Ittihadiya statement. Naruhito said Japan is keen on enhancing relations with Egypt in areas of mutual interest, namely in education and culture. El Sisi also met with member of the Japanese parliament and Head of the Egyptian-Japanese Parliamentary Friendship Association Yuriko Koike. Koike underscored the importance of the “parliamentary dimension in enriching bilateral relations and enhancing cooperation, noting that the Egyptian-Japanese Parliamentary Friendship Association is keen to further advancing these relations, particularly in the field of education.”

In more news coming out of Japan: El Sisi held two separate meetings with the presidents of Mitsubishi Corporation and Toyota Motor Corporation, both of which expressed their interest in boosting investments in Egypt, according to an Ittihadiya statement. The president of Mitsubishi expressed interest in bidding on the development of Borg El Arab International Airport while the Toyota president addressed the company’s future projects in Egypt. These include the establishment of a wind power plant in the Gulf of Suez, a gas exploration project, and the establishment of a combined-cycle power plant in Upper Egypt. It is also looking into numerous projects in the Suez Canal Development corridor.

Egyptian, Lebanese investors create joint company to export to Africa: A Lebanese-Egyptian company was formed to export construction materials, ready-made garments, and furniture to Africa, following an agreement signed at a conference in Beirut. “The company will be composed of leading Lebanese and Egyptian companies and industrial firms that will focus their attention on marketing and selling a range of products and materials to Africa,” Lebanon’s The Daily Star writes. President of the Beirut Chamber of Commerce and Industry Mohamed Choucair said the presence of Lebanese expatriates in Africa will be an added value to the Egyptian business community. No further details about the new company were given, Lebanon’s The Daily Star reports.

Meanwhile, Misr Liban Bank (BML) signed an agreement to fund Lebanese-Egyptian exports to Africa, said BML CEO Fadi Daouk at the Beirut conference, Al Mal reports. A delegation of Lebanese companies operating in Africa is also set to arrive in Cairo in May to visit Egyptian factories, said Egypt’s commercial attaché in Beirut, Mona Wahba.

Russia’s ICT Minister Nikolay Nikiforov expressed support for a proposal to reduce international roaming call fees between Egypt and Russia in what is being reported as a means to bolster the currently non-existent tourism between the countries, at a meeting with Egyptian ICT Minister Yasser El Qady in Cairo. The pair discussed expanding Russian investments in technology, with El Qady stating that a number of Russian companies have expressed interest in investing there, Al Mal reports.

ENERGY

Terra Sola studies USD 3.5 bn solar energy projects in Egypt
Bahrain-based integrated solar power project developer Terra Sola has made an offer to the Luxor government to build a number of renewable energy projects with European financing of up to USD 3.5 bn, Al Mal reports. The projects include a factory to manufacture photovoltaic cells and 10 plants, each with a capacity of 200 MW, according to the studies conducted by Terra Sola. (Read in Arabic)

EGPC sees total refining capacity at 30 mn tonnes annually by mid-2017
Total refining capacity in Egypt will expand to 30 mn tons from a present 28 mn tons when the Egyptian Refining Company begins operations in 2017, sources at EGPC told Al Mal. (Read in Arabic)

Carbon Holding seeks financing from Export-Import Bank of the US
Carbon Holding Chairman Basil El Baz met with EXIM Bank’s Chairman Fred Hochberg during the latter’s visit to Cairo to discuss financing for its Tahrir Petrochemicals Complex, El Baz said. The financing could come through this year, he suggested. The total cost of the complex is an estimated USD 7.5 bn in Ain Al Sokhna, with EXIM bank expected to arrange 40-45% of the total USD 4.5 bn financing. Italian credit agency SACE will arrange USD 1.8 bn, while South Korean commercial bank KSURE will provide USD 1 bn, sources told Amwal Al Ghad. Tahrir would be one of the largest petrochemicals projects ever completed in Egypt and will include a 4 mn ton per annum naphtha cracker and a petchem plant. (Read in Arabic)

Gov’t to complete framework for waste-to-energy feed-in-tariff system in June
The government will complete its study on a framework for a feed-in-tariff system for waste-to-energy projects in June, Al Borsa reports. A committee made up of the ministries of environment, electricity, petroleum and the Consumer Protection Authority is currently working on a pricing scheme for the framework, said head of planning at the New and Renewable Energy Authority Ehab Ismail. He hopes the framework will encourage investors in a manner comparable to solar and wind projects. Feed-in-tariff rates amount to EGP 1.02 per KW of solar power and EGP 0.82 per KW of wind. A government source tells Al Borsa that five global companies have applied to develop waste-to-energy projects, with investments reaching USD 200 mn. (Read in Arabic)

Recovered Energy to invest USD 50 mn in waste-to-energy projects
US-based Recovered Energy plans to invest USD 50 mn in waste-to-energy projects in Egypt, Al Borsa reports. The company, which is conducting technical and financial studies on possible projects, will provide the government with offers backed by financing from international finance institutions, said the company’s managing director Tarek Ghorab. As we noted last month, the company is also in talks with the Electricity Ministry for the USD 30 mn upgrade to the Damietta power plant.

BASIC MATERIALS + COMMODITIES

Russian authorities block a 10.5-tonne lettuce shipment over thrips fears
Russian authorities have blocked a 10.5-tonne shipment of Egyptian iceberg lettuce after suspecting it contains the thrips insect. Al Mal writes that the authorities say thrips were detected in two shipments at the Novorossiysk Port coming from Egypt. (Read in Arabic)

Up to 30% of small poultry farms have closed pending resolution on FX crunch
The FX crunch is driving small poultry farmers to close down, with 30% of small and medium operators closing up shop until the situation gets better, Al Borsa reports. FX liquidity shortages have driven up prices of production inputs, especially of packaging, by 20-25%, said the head of the Egyptian Poultry Association (EPA) Nabil Darwish. Small poultry farmers make up 80% of the poultry industry in Egypt, making their shuttering a massive blow to the market. Most of these are unlicensed farms, making them ineligible for legal protections from the government and membership in the EPA, which provides benefits to its members. The EPA has been calling for the government to provide these operators with temporary licensing. Among the main challenges facing the industry is strong competition from Brazilian and U.S.-based chicken exporters, which may be a hurdle in what could be an attractive sector for foreign investments, said Robert Claxton, a consultant for meat industry marketing and research firm Gira.

Gov’t selling fertilizers to farmers at higher than global prices, says Farmers Syndicate
The Farmer’s Syndicate accused the Trade Ministry and the Agriculture Ministry of selling fertilizers to farmers at prices higher than the global market price, Al Mal reports. Urea fertilizers are being sold at a EGP 100 mark up, while nitrate fertilizers have been distributed to farmers at a hike of EGP 200, said Farmer’s Syndicate head Fareed Wasel. He accuses the government of accommodating fertilizer manufacturers at the expense of farmers. While there appears to be no official response by the government to these statements, Trade Minister Tarek Kabil had stated last November that the government was exploring ways to partially liberalize the fertilizer industry by purchasing from manufacturers at the global market price while maintaining direct subsidies to farmers.

MANUFACTURING

General Motors issues “normal,” resolved now, Tarek Kabil says
General Motors’ (GM) issues in Egypt are “resolved,” Trade and Industry Minister Tarek Kabil said. Operations at the GM plant have resumed, Kabil noted, saying that the operational disruption there was “normal” and an issue that any factory could face. He added that the government remains committed to fostering a free competitive market in Egypt.

REAL ESTATE + HOUSING

Red Sea Ports Authority studies developing 5 mn sqm surrounding Sharm El Sheikh Port with Armed Forces
The Red Sea Ports Authority is studying developing a 5 mn sqm land plot surrounding the Sharm El Sheikh Port at an estimated cost of USD 10 bn in cooperation with the Armed Forces, head of the authority Hesham Abu Sena told Al Mal. The development plan includes a tourist resort with a marina for yachts, he adds, noting that the authority received offers from several developers, including Amer Group. (Read in Arabic)

TOURISM

Pyramisa ends Sharm El Sheikh contract with Pegas Misr
Pyramisa Egypt has informed Pegas Misr for Hotel Management that it is ending the Pyramisa Hotel Sharm El Sheikh contract as of 1 March, Al Mal reports. Pyramisa’s profits declined 38.9% y-o-y to EGP 56.39 mn at the end of the 2015 fiscal year, Al Mal writes, giving no reason for the cancellation of the contract. (Read in Arabic)

Monarch Airlines extends Sharm flight suspension until 18 April
Britain’s Monarch Airlines is extending its cancellation of flights to Sharm El Sheikh to 18 April, “as there has been no change in travel advice from the UK government, the Foreign and Commonwealth Office (FCO) and the Department for Transport (DfT).” Monarch said, “it remains our objective to resume a flying programme once approval is granted” but added that it will not be able to provide a further update before 14 March. (Read)

TELECOMS + ICT

Assistant CIT minister submits resignation, PM rejects it
Assistant Minister of Communications and Information Technology Khaled Sherif has submitted his resignation, due to what Al Masry Al Youm writes is a differing opinion on the sector than CIT Minister Yasser Al Kady, who is prioritizing reducing the cost of internet services and the fees paid for using Telecom Egypt’s network infrastructure. A source at the ministry tells Amwal Al Ghad that both Al Kady and Prime Minister Sherif Ismail have rejected the resignation given the number of projects Sherif is currently overseeing.

AUTOMOTIVE + TRANSPORTATION

Automotive manufacturers reject Amer’s criticism, claim to pay EGP 27 bn in tariffs annually
Automotive manufacturers have rejected claims by CBE Governor Tarek Amer that they are not exporting enough vehicles and prefer to sell domestically. Daily News Egypt reports that “Executive director and spokesperson of the Egyptian Automobile Manufacturers Association (EAMA) Hussein Mostafa said the automotive manufacturers have contributed approximately EGP 27 bn to the state treasury annually through paid automotive tariffs.” Mostafa blames current legislation that does not encourage investment in construction factories. DNE could not get automotive company officials to respond to the critique. (Read)

BANKING + FINANCE

Al Ahly Mortgage Finance to sign on to Mortgage Finance Fund
Al Ahly Mortgage Finance will sign on to join the CBE’s mortgage finance initiative, said the head of the government’s Mortgage Finance Fund (MFF) May Abdel Hamid. Al Ahly is expected to sign protocols with the MFF within the coming days, said Abdel Hamid. The initiative will provide mortgages to low-income households at 7% interest and to medium-income households at 8% interest. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

5,000 shipping containers left unclaimed in Alexandria
Nearly 5,000 shipping containers are stuck at the Alexandria Port, Al Borsa reported. The large number of unclaimed containers has reached a point where they were impeding the daily operations at the port. The deputy head of the port said he is working with shipping industry operatives to resolve the issues and urged representatives from the Customs Authority to provide the necessary information and documentation to clear the containers and allow their transport. (Read in Arabic)

Expected monthly revenue of USD 7 mn from Sukari gold mine
Expected revenues from Centamin’s Sukari gold mine following a dispute settlement are estimated at around USD 7 mn monthly as of last January, sources within the Egyptian Mineral Resources Authority tell Al Ahram. Centamin had resolved a dispute with the Egyptian government by paying it around USD 55 mn. (Read in Arabic)

Egyptian contractors want a bigger role in national projects, Mahlab disagrees
Discussions at the Builders for Egypt Forum looked into possible strategies to maximize the role of Egyptian companies in national mega projects and their ability to complete these major projects within the allotted timeframe. Forming Egyptian consortiums has been the best way for Egyptian companies to pool their resources to compete with foreign contractors on these projects, said the Chairman of Arab Contractors Mohsen Salah, who points to the Arab Contractors-OCI alliance’s accomplishments on the New Suez Canal project. Talaat Moustafa Group VP Ahmed El Afifi focused his talk on the need to expand the role of small- and medium-level players, stating that his company was willing to train young contractors. CEO of the Saudi Egyptian Construction Company Darwish Hassanein called for changing the nature of contracts between Egyptian contractors and the government, which skew in favor of the government, Al Borsa reports. Former Prime Minister Ibrahim Mahlab and current advisor to the president on national projects takes a different view, advocating for local companies to focus on managing and maintaining projects instead of building them. He states that the lack of a skilled labor force is the biggest impediment to the industry, Al Mal reports.

EGYPT POLITICS + ECONOMICS

EGX chief pitches listing of power, construction companies, but cautions against optimism in meeting growth targets
EGX Chairman Mohamed Omran met with Electricity Ministry officials to discuss listing some of the ministry’s companies, said Omran. He called for more construction contracting firms to list on the EGX as the sector will see immense growth in light of the proliferation of national projects, AMAY reports. The government’s decision to float state-owned companies and banks was one of the best decisions taken in the past five years, opined Omran at the Builders of Egypt forum. However, Omran said the government should not expect to meet its projected growth targets this year due to a slowdown in the global economy and the need for more investments at home.

Suez Canal Authority to set new transit fees for the canal
New transit fees for the Suez Canal have been set and await President Abdel Fattah El Sisi’s approval once he returns from his Asia tour, said Suez Canal Authority head Mohab Mamish. He did not state whether fees would rise or fall, Al Borsa reports. Maritime trade analyst firm SeaIntel recently reported that traffic of bulk carriers through the canal fell 5.7% and container vessels 3.1% as low prices make travelling around Africa more economical than paying transit fees through the Canal.

Parliament ratifies oversight articles of bylaws
The House of Representatives approved 100 articles of the House’s bylaws on Tuesday, Al Masry Al Youm reports. These primarily concern procedures on government oversight including hearings and inquiries. (Read in Arabic)

SPORTS

Football clubs scramble to arrange USD 33 mn for foreign coaches, players
The USD shortage has hit the sports industry, with Egypt’s top clubs resorting to banks to provide necessary USD for salaries for foreign coaches and players. Shockingly, neither the coaches nor the players have agreed to being paid in EGP, Al Borsa notes. The Egyptian League includes five foreign coaches and 21 foreign players who are together paid USD 33 mn annually. (Read in Arabic)

ON YOUR WAY OUT

Tourism Minister Hisham Zaazou is studying establishing an organization for African tourism with the South African tourism minister, Al Mal reports. The organization would create joint tourism programs between Cairo and Cape Town.

46 students suffered injuries yesterday following a chlorine gas leakage at a wastewater treatment plant adjacent to a school in Alexandria, according to Al Ahram. The head of the Alexandria Water Company ordered an emergency investigation into the incident.

Nile taxi services were launched on Tuesday during a press conference attended by the transport minister. Three companies received licenses to operate the service, with each obtaining permits to build Nile taxi stations, says CEO of Nile Taxi Magdy Ghaly. His company’s rides can be booked by phone and social media, he said, touching on future plans to power vessels by solar energy, Al Mal reports.

Google’s self-driving car caused its first traffic accident: “It happened in Mountain View, California, on Valentine’s Day… Google’s car was in autonomous drive mode maneuvering near sand bags in the street when it steered into a bus that was going 15 mph in the next lane over,” according to CNBC’s Phil LeBeau. The accident report filed by Google said “The Google AV test driver saw the bus approaching in the left-side mirror but believed the bus would stop or slow to allow the Google AV to continue” and LeBeau says the car was driving at 2 mph at the time.

CALENDAR

28 February-02 March (Sunday-Wednesday): President Abdel Fattah El Sisi visits Japan.

02-04 March (Wednesday-Friday): President Abdel Fattah El Sisi visits Korea.

07-09 March 2016 (Monday-Wednesday): The EFG Hermes 12th Annual One on One Conference 2016, Atlantis, The Palm, Dubai.

15-16 March 2016 (Tuesday-Wednesday): U.S. Federal Reserve’s Federal Open Market Committee meets. Fed chair will hold press conference.

17 March (Thursday): Wamda’s Mix N’ Mentor Cairo 2016 – Marketplace Edition, The Greek Campus, Cairo. Register here.

21-22 March (Monday-Tuesday): The Africa CEO Forum, Sofitel Abidjan Hotel Ivoire, Abidjan, Ivory Coast.

23-24 March 2016 (Wednesday-Thursday): Microfinance Egypt, Nile Ritz-Carlton, Cairo.

27 March (Sunday): Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development, InterContinental Hotel Citystars Cairo. Register here.

29-31 March 2016 (Tuesday-Thursday): Future Rail and Metro Egypt, Cairo.

13-16 April 2016 (Wednesday-Saturday): Cafex, Cairo.

25 April 2016 (Monday): Sinai Liberation Day (national holiday)

26-28 April (Tuesday-Thursday): Arabian Hotel Investment Conference, The Madinat Jumeirah, Dubai.

01 May (Sunday): Easter Holiday / Labour Day (national holiday)

02 May (Monday): Sham El Nessim (national holiday)

02-03 May (Monday-Tuesday): The Middle East Investment Summit 2016, Ritz-Carlton DIFC, Dubai.

06 October (Thursday): Armed Forces Day (national holiday)

27 November 2016 (Sunday): 2016 Cairo ICT Conference