Hello, Ms. Lagarde. Can you spare a few billion?

TL;DR

Is Egypt seeking IMF assistance program? (Speed Round)

CBE exempts importers from FX caps on deposits, withdrawals + State banks up rates on USD-denominated CDs. (Speed Round)

European Parliament passes non-binding resolution censuring Egypt. (Speed Round)

EFSA issues regulations for unrated, covered bonds. (Banking + Finance)

Abraaj mulls selling Spinneys. (Speed Round)

Ahmed Aboul Gheit voted secretary general of Arab League. (Diplomacy + Foreign Trade)

Actis-Lekela Power receive land for wind farm in Gulf of Suez. (Energy)

EGAS official says Zohr reserves 20% larger than estimated. (Energy)

Egypt to slash price of gas for steel manufacturers operating at full capacity. (Manufacturing)

Exporters want government to pay EGP 3 bn in promised subsidies. (Egypt Politics + Economics)

By the Numbers

WHAT WE’RE TRACKING TODAY

A UN Food and Agriculture Organization (FAO) expert is set to arrive in Cairo today to participate in a workshop that is expected to sketch out new regulations governing ergot limits in wheat imports alongside a newly formed committee tasked with assessing the dangers of the fungus, the Agriculture Ministry said on Saturday, Reuters reports. The limits were the source of a nearly month-long dispute between state wheat buyer GASC and global traders.

The conference Design Build Breathe (DBB) by Schaduf kicks off today at the Sofitel El Gezirah Hotel, Cairo.

WHAT WE’RE TRACKING THIS WEEK

The US Federal Reserve’s Federal Open Market Committee meets between 15-16 March. The Fed chair will hold a press conference after the gathering

Wamda’s Mix N’ Mentor Cairo 2016 – Marketplace Edition, will take place at The Greek Campus, Cairo on 17 March. Register here.

Nile University is hosting its Celebration of Technological Innovation for the Good of Society on Tuesday, 15 March. The event sheds light on the Vodafone Egypt Foundation’s Connecting for Good initiative.

ON THE HORIZON

The Africa CEO Forum, Sofitel Abidjan Hotel Ivoire, Abidjan, Ivory Coast is taking place from 21-22 March. The forum brings together 500 CEOs from all over the continent.

Microfinance Egypt follows right after from 23-24 March at the Nile Ritz-Carlton, Cairo on how new microfinance institutions can navigate a new operating environment.

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

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SPEED ROUND

Is Egypt seeking IMF funding? Central Bank of Egypt Governor Tarek Amer says no, a Finance Ministry spokesperson said he was not aware, but a senior government official told Bloomberg that Egypt is preparing to start loan talks with the International Monetary Fund (IMF). The official, who wished to remain anonymous, said the size of the loan Egypt will seek has not been determined yet. Amer continued to deny the plans, telling Al Shorouk Egypt is capable of “overcoming the current crisis and previous experiences prove that rumors and exaggerations don’t have economic foundations.” Bloomberg carried the remarks in English. For its part, the IMF said Egyptian authorities have not contacted it, but it “stands ready to help.” Beltone’s Hany Genena believes “Egypt has already implemented a big chunk of the economic measures that the IMF typically asks for,” referring to cuts in fuel subsidies and higher electricity prices, Bloomberg notes. However, Capital Economics’ Jason Tuvey does not believe it’s in the works, noting that “given the tumultuous history of negotiations between Egypt and the IMF, we’re not taking anything for granted at this stage.”

Importers of “basic and necessary commodities” are exempt from the caps on foreign exchange deposits and withdrawals, according to a CBE statement issued on Wednesday. The restrictions, removed  on Tuesday for transactions carried out by individuals, still apply to other companies, the statement read. Also on Wednesday, the CBE held its second meeting with representatives of foreign exchange bureaus “to keep black market rates under control,” according to Reuters. Two sources told the newswire an agreement to limit the USD price in the parallel market was reached, with another source saying it was capped precisely at EGP 9.25 and, in return, the CBE will not “interfere” with the bureaus. Bloomberg reports that the EGP strengthened after the move to EGP 9.684 to the USD after trading at over EGP 9.80 last week. Commenting on the decisions, central bank governor Tarek Amer told Al Masry Al Youm they aim to inflict the biggest damages possible on currency speculators. To Al Ahram, he said the CBE aims to reverse the “restrictive” decisions made in 2015.

By Saturday, the parallel market rate appears to have dropped to EGP 9.50 to the USD, Al Mal reports, with AMAY saying the USD was changing hands for EGP 9.40. This was prompted by an increased sell-off of USD by dealers who expect a continued strengthening of the EGP as a result of the CBE’s decisions last week. Deputy managing director at Emirates NBD Egypt Sahar El Damati expects the parallel market rate to drop to EGP 9.00 as the current price is unrealistic and doesn’t represent demand.

Meanwhile, the CBE told banks to tally the demand on USD from importers, driving expectations that it will issue another extraordinary auction this week, Al Masry Al Youm reports. The central bank holds regular currency auctions on Sunday, Tuesday, and Thursday.

Working a different angle: NBE, Banque Misr, and Banque du Caire have raised interest rates on three-, five-, and seven-year USD-denominated certificates of deposit. Three-year CDs will now carry 4.25% interest and five-year CDs 5.25%, according to Al Mal. Reuters adds that interest rates on seven-year CDs were also raised to 5.75%. The Belady CDs issued to Egyptian expatriates carry an interest rate of 3.5% for one-year CDs, 4.5% for three-year CDs, and 5.5% for five-year CDs. Meanwhile, Al-Masry Al-Youm noted on Thursday that state-owned banks had begun issuing EUR-denominated Belady CDs; one-year certificates carry an interest rate of 2%, three-year certificates 3%, and five-year certificates 3.5%.

Egypt is also reportedly planning to launch this week an option product that lets foreign investors hedge against currency risk, mainly tailored for investors in Egyptian T-bills, a senior official at the central bank tells Bloomberg. As the FX crisis worsens, the move could allow Egypt attract bns of USD, boosting reserves and cutting the government’s borrowing costs, says the source.

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The European Parliament passed by overwhelming majority a non-binding resolution calling for an EU-wide ban on the export of any form of security equipment and military aid to Egypt following the murder of Italian student Giulio Regeni, according to the Guardian. The resolution, which passed 588-10 with 59 abstentions on Thursday, calls for Egypt’s total cooperation in the investigation and slams the country for what it characterizes as numerous cases of disappearances, torture, and disregard for civil rights and press freedom. Following the vote, Italian prosecutors investigating the case said they would travel to Egypt to meet Egyptian investigators, Rome’s chief prosecutor said on Thursday, according to Reuters. Both the Egyptian Foreign Ministry and House of Representatives rejected the resolution, with the ministry saying it was based on “undocumented media reports.”

The resolution was passed as Egypt and the European Union work to hash-out the particulars of the EU’s assistance program, with EU Ambassador to Egypt James Moran saying the EU’s full aid package to Egypt will be set by May. Negotiations among EU member states over the amount and structure of the aid are ongoing and won’t be finalized for another two months, said Moran at the opening of a solar power plant in Marsa Matrouh. The EU was supposed to have determined the size of Egypt’s aid package this month, Al Borsa reports. Statements by Moran earlier this year had estimated that Egypt would receive EUR 500 mn in aid in 2016.

Abraaj assessing selling Spinneys: Spinneys Egypt told Al Mal it received a number of bids to acquire Abraaj Capital’s 100% stake in the supermarket chain. The offers are still in the preliminary stages, but a number of investors have already begun due diligence. Spinneys denied that Saudi Arabia’s Panda or the UAE’s LuLu were among the bidders.

Inflation back to single digits in February: Headline inflation rates dropped to 9.13% in February from 10.10% this time last year. Similarly, core CPI computed by the CBE dropped to 7.50% from 7.73% last year.

And the Uber saga continues: On Wednesday, Egypt’s cabinet ordered the formation of a ministerial committee headed by the justice minister to investigate the legal status of Uber, Careem, and Ousta after white taxis blocked off a major street in Mohandiseen in protest of the ride-hailing services, Ahram Online reported. Cabinet spokesperson Hossam Qawish said the committee would primarily tackle ways in which the companies can operate in Egypt under a “completely legal” framework and bolstering the services of white taxis, whose quality has been drastically deteriorating — the understatement of the year. Qawish, who made the statements in a call-in to Mohamed Sherdy’s Youm bi Youm TV program, stressed the importance of preserving the “unique” and “necessary” services the companies provide. You can watch the call here (run time 22:17, call starts at 18:58). Commenting on the decision, Ousta’s GM Mohamed Ibrahim stated that his ride-hailing service is allowed by the Commercial Registry to hire out private cars, a model different to that of Uber and Careem, Al Mal reports. Nonetheless, the company, which launched its services this month, will await the results of the investigation. On another planet entirely, head of the Arab Society of Technical Sameh Abou called “Jewish-owned” Uber an “espionage network,” saying it poses a serious threat to Egypt’s national security as the information it collects might serve Israeli intelligence.

The Ismail cabinet met on Wednesday. Among the decisions announced afterward:

• Approved a project to restructure Principal Bank for Development and Agricultural Credit;
• Tasked contractors with infrastructure work worth EGP 4 bn for the new administrative capital, in addition to an EGP 140 mn contract to build tunnels and bridges, with project lengths being 18 months from the date of receiving the site;
• Allocated a 60-feddan land plot to the New and Renewable Energy Authority to build a transformer station in East Assiut;
• Approved a decision to join the Asian Infrastructure Investment Bank, with Egypt paying its USD 650 mn share of the capital over equal installments to be paid over five years;
• Approved increasing Egypt’s share in the International Islamic Trade Finance Corporation’s capital;
• Approved amendments to two laws that would ban the import, manufacturing, or licensing of new trailer trucks.

MOVES- Yehia Aboul Fotouh was appointed vice chairman of National Bank of Egypt. Aboul Fotouh was previously an executive board member, according to Al Ahram.

Former Vodafone Egypt boss Hatem Dowidar has been named acting group chief executive at UAE-based Etisalat, according to a regulatory filing. The move followed the sudden resignation for “personal reasons” of CEO Ahmad Julfar. Dowidar’s term will run through June 2016, by which time Etisalat plans to have wrapped an unspecified group-level restructuring program.

Ethiopia will soon launch a new 2,000 MW hydropower dam, Ethiopian Prime Minister Hailemariam Desalegn said in front of Parliament on Thursday without giving further details, Reuters reports. The country is looking to boost output to 17,346 MW from a current capacity of just over 2,200 from hydropower, wind and geothermal sources under a new 2015-2020 development plan. It remains to be seen what the impact of the dam is on other African nations and how they will react to the news. Egypt and Ethiopia are currently locked in discussions over the Grand Ethiopian Renaissance Dam and Kenya has expressed concern that Ethiopia’s Gibe 3 Dam could reduce the volume of water in its Lake Turkana.

THE MACRO PICTURE

The European Central Bank (ECB) cut its deposit rate on Thursday by 10 basis points to -0.4% and lowered its benchmark rate to zero while also delivering more bond purchases and a potential subsidy to lenders as ECB President Mario Draghi pulls out all the stops to stimulate the economy and keep inflation at bay, Bloomberg reports. Draghi said interest rates would stay low for “an extended period” and kept the option for a further cut open, the FT (paywall) reports. However, “[d]oes it mean we can go as low as we want without having any consequences on the banking system? The answer is no,” he said. The move had a positive impact on European stock and bond markets as the EUR jumped to a three-week high against the USD on Thursday, Reuters reports. Meanwhile, EUR bears are now looking to US policy makers to deliver where the the ECB has not, Bloomberg reports, while the bond market’s outlook for inflation is picking up.

Things are looking up for oil. Prices look like they’ve bottomed out as high-cost production shuts down and Iran production reenters the market slower than anticipated, according to the International Energy Agency, Bloomberg writes. Goldman Sachs is also chiming in, putting their price target for oil at USD 25-45 per barrel for 2Q2016. While Mohamed El Erian agrees (watch, running time: 4:45), Reuters’ John Kemp drills deep into the IAE report and finds that 550 mn barrels of “unaccounted for” oil could confound efforts to accurately assess how oversupplied the market really is and, as a result, calls into question whether there is a glut at all.

The CNY rallied to its strongest level since December after China’s central bank upped its daily reference rate by the most in four months and the People’s Bank of China finishes draining extra liquidity it injected over the Lunar New Year Holidays. The central bank and the country’s top economic planning agency are now said to be etching out rules to make it “easier for lenders to convert bank loans into equity stakes in debtor companies,” Bloomberg writes.

Speaking of oil and China, Moody’s believes their slowdown points not to a global recession, but a slowdown in economic growth, according to a report published last week.  Moody’s believes that the “positive effects of lower commodity prices to a large extent will mitigate negative factors, such as weaker consumer and business confidence levels caused by increased financial market volatility, and deteriorating trade linkages with emerging markets.”

EGYPT IN THE NEWS

Discontent was the name of the game in foreign coverage on Egypt coming out of this weekend. Declan Walsh writes that Egypt’s rich are feeling the economic squeeze in a piece for The New York Times that, heaven help us, makes mention of the American University in Cairo’s “Gucci corner” (for the unindoctrinated: a term interchangeably used to mean a group of students typically dressed in high-end fashion and / or the hangouts they occupy). “Normally I’m not interested in politics — if it doesn’t affect me, I don’t care,” said a business student who was shocked to discover his desired Mercedes-Benz model would not be available for 18 months, “But this is a problem.” The piece tackles the growing discontent among wealthy Egyptians who had originally been ardent supporters of President Abdel Fattah El Sisi. “He gave a good story, and people want to believe in it. But you need to follow through. We haven’t seen that,” said businessman Ashraf Omran. As an aside, we’ve noticed the Gucci corner doesn’t exist much anymore. It’s more of an insincere-hipster-wannabe-poor-little-rich-kid corner; students have moved on from Prada loafers to bedazzled Toms.

But it isn’t just the rich. “Sisi came into power with huge levels of popularity,” said H.A. Hellyer, non-resident fellow at the Atlantic Council in Washington, in a Reuters piece that suggests the ailing economy is impacting the president’s popularity.

The Financial Times’ Heba Saleh, meanwhile, looks at tussles between the state and human rights activists in her contribution to the meme, bluntly headlined “Egypt escalates crackdown on dissent,” which also quotes Hellyer and springboards off the European Parliament’s resolution.

Former leftist presidential hopeful Hamdeen Sabahy told Reuters in an interview that leftists “failed the Egyptian people. We were unable to form a serious organised body to represent them.” He urged Egypt’s liberal parties to bury the hatchet and “forge a new united force that could offer a more democratic alternative to Sisi’s government.” Last week, the leftist Popular Current and some independent politicians merged with the Arab Nationalist Karama Party founded by Sabahy in a “revived push to attract ordinary Egyptians disenchanted with Sisi’s economic policies and crackdown on freedoms.”

Egypt had a walk-on role in a Reuters piece covering the ITB travel trade fair in Berlin over the weekend. The fair was mostly preoccupied with security controls this year, as attacks in Tunisia, Paris, and Egypt batter the tourism industry. However, “Past experience has shown us that a country that is serious about tourism and has built an infrastructure always bounces back,” the head of the United Nations World Tourism Organization Taleb Rifai told Reuters. “Look at Egypt. It has been up and down for the last 10 years. Every time it comes back stronger than before,” he said. From your lips to God’s ears, sir.

Daoud Kuttab pens a piece for Project Syndicate on defamation laws in the Middle East. “Egypt’s government is perhaps the biggest abuser of defamation and blasphemy laws to suppress differing views,” he says, citing Egypt’s use of Article 98(f) of the Egyptian Penal Code to suppress religious minorities.

WORTH READING

The Mastermind: Atavist Magazine launched its seven-part series on so-called real-life Bond villain Paul Calder Le Roux, with their first instalment , or ‘episode’ released last week. Atavist describes Le Roux as “a brilliant programmer and a vicious cartel boss, who became a prized U.S. government asset.” (Read Episode One: An Arrogant Way of Killing, word count: c.6,600 words)

IMAGE OF THE DAY

Egyptian customs authorities strike again, vandalizing a vintage Martin guitar owned by none other than musician Bryan Adams, who was in Cairo to play several concerts by the Pyramids. “We almost didn’t get the equipment into the country, and when we did it was all marked like this,” he told Agence France-Presse in a Facebook message on Friday. The Canadian musician later took to Facebook with a note to Egyptian fans that read in part: “Thank you for writing about the guitar, I really appreciate it, it will be fixed no problem. I want you all to know that I love your country and we had an amazing time there, we felt at home.” He also pointed to his Instagram feed, which is replete with photos of his time in Cairo.

DIPLOMACY + FOREIGN TRADE

Former Foreign Minister Ahmed Aboul Gheit was voted in unanimously on Thursday to serve as the new secretary-general of the Arab League, replacing Nabil Elaraby, who opted not to seek another term, Reuters reported. While the vote was unanimous, it was delayed over Qatar’s initial objections to Aboul Gheit as a candidate.

The Arab League declared Hezbollah a terrorist organization during the league’s meeting in Cairo on Friday, Naharnet reported, following a similar decision made by the GCC states earlier this month. Before the resolution passed, Saudi Arabia’s delegation walked out of the session in response to Iraq’s Foreign Minister Ibrahim al-Jaafari expressing his country’s reservations to the resolution. (Watch in Arabic, running time: 51 seconds) Lebanon also expressed reservations to the resolution.

A delegation of 12 Hamas members traveled to Cairo on Saturday to repair relations with Egypt a week after Egypt accused the group of being embroiled in the assassination of Public Prosecutor Hisham Barakat, Reuters reports. The delegation included three top figures, Mahmoud Al-Zahar, Khalil Al-Hayya and Imad Al-Alami. An Egyptian border official told the wire service they were escorted under heavy security. “Hamas stresses its interest in preserving the security and stability of Egypt and we are looking forward to a new era in relations,” Hamas spokesman Sami Abu Zuhri said in a statement.

Iranian investors, including car manufacturer Saipa, are looking to expand to Egypt, announced Iran’s charge d’affaires Mahmoud Mahmoudian at a press conference in Cairo, Al Masry Al Youm reports. Saipa are interested in exploring building a car factory in Egypt to use it as regional hub to export to Africa. However, the company’s technical team were denied a visa, Mahmoudian said.

Egypt tried, and failed, to undermine a US-drafted UN Security Council resolution to repatriate peacekeeping units where personnel have been suspected of widespread [redacted] exploitation and abuse. Egypt abstained from voting on the resolution that said if a country fails to either investigate allegations of abuse, hold perpetrators accountable, or neglect to inform the secretary-general of actions, its troops should be repatriated. Egypt’s proposed amendment would have required all three criteria to be met for troops to be repatriated, Reuters reports. When the amendment hit the floor, US Ambassador to the UN Samantha Power was having none of it (watch, run time 2:45), tweeting that it was “sad” that several nations had attempted to undermine the resolution. Egypt’s Foreign Affairs Ministry spokesperson tweeted back, saying “What is sad is for a #UNSC Permanent Rep. to impose resolution on security council for publicity & personal ambition.” The resolution ultimately passed. BuzzFeed has picked up the story, God help us.

President Abdel Fattah El Sisi met with Saudi King Salman on Thursday to talk regional security and the “importance of raising combat efficiency of the Arab countries’ armed forces and of training them to confront terrorist organizations,” according to an Ittihadiya statement. El Sisi also attended the final parade of the North Thunder joint military exercise in Saudi Arabia, in which Egypt and a number of Arab countries took part, according to a separate statement.

The Egyptian and Iraqi Oil Ministries signed an MoU that would see Egypt refine set quantities of Basra crude and store Iraq’s crude in the ports of Ain Sokhna and Sidi Kerir. Egypt will also import monthly shipments of Basra crude, Al Masry Al Youm reports, and  provide training for Iraq’s petroleum engineers.

ENERGY

Eni successful in first production test of Zohr field
Eni successfully completed a production test of Zohr 2X, the first appraisal well of the Zohr discovery, according to a company press release on Thursday. Data collected and analyzed at the well place its deliverability at 250 mn cubic feet of gas per day in production configuration. An EGAS official told Al Borsa that drilling of the second exploratory well revealed that the field’s reserves were 20% larger than estimated, which according to Eni stand at 30 trn cubic feet of gas. There was no word from Eni confirming or refuting this claim. Unconfirmed reports cited by Globes halved the estimates to 16 tcf in January. Eni plans to drill three further wells in 2016 and launch bids for offshore activities, in addition to starting work on the onshore gas treatment plant in Port Said.

Actis-Lekela Power receive land for wind farm in Gulf of Suez
The Actis-Lekela Power consortium received a land plot of around 25,000 sqm to build a  250 MW wind farm in the Gulf of Suez area on a build-own-operate basis, an official from the  New and Renewable Energy Authority told Al Mal. This is the consortium’s third energy project in Egypt. Earlier reports indicated the Electricity Ministry was nearing the final agreement with a Toyota-led consortium instead of Actis-Lekela’s, claiming the latter had submitted incomplete paperwork.

Petrobel to bring Nile Delta wells onstream by March’s end
Petrobel will bring the Noras and East Balteem wells on stream by the end of March, Al Borsa reports. A source at EGAS said production from the two wells should compensate for the 100 mcf monthly natural decline from Egyptian fields. The source added that Petrobel has completed seismic mapping and identified 10 positions for exploratory wells in the Nile Delta. (Read in Arabic)

General Electric completes Banha power plant expansion
General Electric has completed expansions to the the Middle Delta Electricity Production Company’s Banha power plant, increasing its capacity 7% by next summer. General Electric signed a five-year agreement to provide maintenance and spare parts for the plant. The Banha power plant works on a combined-cycle system and has a capacity of 750 MW. (Read in Arabic)

Oil Ministry to tender 11 concession sites in the upcoming period
There are preparations to issue E&P tenders for 11 concession sites in the upcoming period, a source at the Oil Ministry told Amwal Al Ghad. The sites will be in the Mediterranean and the Nile Delta and aim to increase oil and gas production levels domestically. (Read in Arabic)

Exploration well results in October, says Dana Gas CEO
Dana Gas will begin drilling an exploration well in April, in cooperation with BP, the results of which can be expected by October, said Dana Gas CEO Patrick Ulman. Dana Gas is increasing investments in Egypt, he adds, and is expecting increased production this quarter. The government has USD 250 mn in outstanding debts to the company, adds Ulman. (Read in Arabic)

Electricity Ministry inks agreement with ABB to import three mobile transformer stations
The Electricity Ministry has inked an agreement with ABB to import three mobile transformer stations at a total cost of USD 10 mn. The transformers have a capacity of 40 MVA and will be transported on trailer trucks to wherever they are needed, a source within the ministry told Al Borsa. ABB will import the three stations within the next eight weeks, while assembly will take an additional three weeks. (Read in Arabic)

WorleyParsons wins management consulting tender for Assiut Refinery, Enppi looks to borrow USD 52 mn for the project
Australian consulting firm WorleyParsons won a tender to manage the development of the USD 250 mn Assiut refinery project. Meanwhile, Enppi is looking to borrow USD 50-52 mn to cover the costs of its work on the refinery, Al Mal reports. Enppi, which is the service contractor for the project, signed on via an EPC-plus-finance contract and is preparing to issue a tender for a subcontractor who will be chosen in six months. (Read in Arabic)

MANUFACTURING

Egypt cutting price of gas to steel manufacturers operating at full capacity
Egypt cut the price of gas going to steel and iron factories to USD 4.5 per mmBtu ] from USD 7 per mmBtu, announced Trade and Industry Minister Tarek Kabil. The price reduction brings gas prices back to their 2014 levels. The government has since relaxed the commitment to cutting petroleum subsidies, citing slumping global oil prices and massive offshore gas discoveries, Reuters writes. Increasing gas prices drove factories to operate at 20% capacity, says Kabil, noting that the reduced prices will only be offered to factories operating at full capacity. (Read)

Samsung’s Egyptian plant exports USD 790 mn worth of goods, eyeing expansions
Samsung Egypt exported USD 790 mn worth of goods in 2015, up from USD 780 mn a year earlier, Al Mal reported. Samsung Egypt has plans to produce 6.1 mn flat screens by the end of this year and aims to increase its output to 7.2 mn screens in 2017. The company’s head said Samsung is assessing feasibility studies to implement the second phase of the Beni Suef production plant that will include producing air conditioning units, washing machines, and refrigerators.

Beyti breaks ground on EGP 1 bn juice factory
Beyti has broken ground on a EGP 1 bn juice factory in Nubariya in a ceremony attended by Investment Minister Ashraf Salman, Al Mal reports. Management of the new factory will be contracted out to a number of companies that specialize in juice manufacturing, said Beyti Managing Director Mohamed Badran. The move is part of the company’s plan to boost sales to EGP 5 bn by 2020, Badran added. (Read in Arabic)

HEALTH + EDUCATION

Hep-C treatment Harvoni prices cut by nearly 75%
The Health Ministry reached an agreement with Gilead to lower the prices of hepatitis C Harvoni to EGP 5,500 a pack in stores from EGP 20,000 a pack, an assistant to the health minister told Al Shorouk. The price reduction is timed with the release of an Egyptian generic brand that will be sold for EGP 1,100 a pack and after input prices decreased internationally. The Health Ministry has a target to treat 600k hepatitis C patients this year. (Read in Arabic)

** Today’s online edition includes a story on discounts for distributors of products one ingests / injects / etc when one is suffering a medical condition. The story is not included in the email edition as the words it includes would trip the algorithms that govern our deliverability.

Pharmacist Syndicate gives manufacturers two weeks to comply with directive 499
The Pharmacist Syndicate has given pharmaceutical manufacturers two weeks to comply with the Health Ministry’s pricing regulation number 499 before escalating the matter legally, Al Borsa reports. Under the directive, pharmaceutical producers are obligated to provide discounts and commissions to pharmaceutical distributors and pharmacies on 400 items. According to a syndicate official, pharmacies have lost nearly EGP 600 mn over the last four years as a result of the directive not being implemented. (Read in Arabic)

REAL ESTATE + HOUSING

China company completes ministry building design work for new capital
The China State Construction Engineering Company (CSCEC) has completed the design work for 12 ministries in the new administrative capital. CSCEC proposed, to an Egyptian delegation in China, 24 designs for 12 ministries that will be built as the first phase. CSCEC is set to begin operations on the capital in April, with the Industrial and Commercial Bank of China financing the project in three months. (Read in Arabic)

BANKING + FINANCE

EFSA issues regulations for unrated, covered bonds
EFSA has completed the issuance of regulations governing unrated and covered bonds, EFSA head Sherif Samy said. The decision allows companies to issue bonds covered by a portfolio independent of its own financial obligations. Allowing the issuance of the unrated bonds will support SMEs, Samy said. Issuing them spares SMEs the costs of rating agencies, but limits their financiers to financial agencies exclusively, and not the general public, he explained. (Read in Arabic)

Egypt signs EUR 2.1 bn agreement to finance Siemens’ power plant projects
The Egyptian government signed agreements to finance Siemens’ two power plant projects being constructed in Borollos and the new administrative capital, Al Borsa reports. Funding worth EUR 2.1 bn is provided by a consortium of HSBC, KFW, and Deutsche Bank and is being insured by Euler Hermes and Italy’s SACE. The financing covers the majority of the operations being implemented by Orascom Construction and Siemens. All financial contracts should be finalized within the upcoming weeks, Al Borsa writes.

Beltone Market Maker to act as market maker for Orascom Construction on NASDAQ Dubai
Beltone Market Maker (BMM) received approval from to act as market maker for shares of Orascom Construction starting April, according to BMM’s managing director Hazem Abdel Mohsen. The company, which received approval to operate in Dubai last August, plans to launch new financial products on the exchange. BMM is also seeking approval from the Egyptian Financial Supervisory Authority to act as market maker on the Egyptian bourse, said Abdel Mohsen. The company plans to launch a series of services aimed at Egyptian index funds. (Read in Arabic)

LEGISLATION + POLICY

Tax Authority mulls amending income tax law to account for FX costs
The Tax Authority is considering amending the income tax law to account for exchange rate costs borne by taxpayers, sources tell Al Mal. The move follows failed attempts to reach an agreement between the authority, the CBE, and the Central Auditing Organization to allow for a 4% undocumented expense to account for FX expenditures — a hint to the amounts sourced in the parallel market. A source tells Al Mal the amendment will allow taxpayers to include their “actual” FX cost in the banking system that was unable to provide the required funding. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Exporters want government to pay EGP 3 bn in promised subsidies
Exporters are demanding that the government pay out export subsidies of EGP 3 bn and implement incentives such as tax rebates that were promised but have not materialized, Al Borsa reports. And while exporters have praised the cabinet economic group’s decision last Monday to subsidize exports by up to an additional 50% for companies in the chemical, food, engineering, and textile industries, many feel the government must begin implementing previous subsidies before moving on to new ones. (Read in Arabic)

Gov’t reaches settlement with Hussein Salem
The government has apparently reached a settlement with the exiled co-owner of East Mediterranean Gas Company Hussein Salem, according to statements by Justice Minister Ahmed El Zend. In a call-in to Lamees Al Hadidy’s Hona Al Asema talk show, El Zend said the settlement was the beginning of agreements to return stolen state assets. And while he did not provide her with details of the settlement, Al Hadidy reportedly said the agreement would see Salem fork over EGP 5 bn.

ON YOUR WAY OUT

TEData killing off competition in the ISP market: TEData grew its share of the ISP market to 74% by the end of 2015. Al Borsa explains that while the market as a whole only added 150k new customers in 4Q2015, TEData added 189k after blocking other ISPs from providing them service as its parent company Telecom Egypt replaced copper telephone wires with fiber-optic cables.

There will be no EGP 10 coin in circulation, the Mint Authority told Al Ahram. Pictures circulating on social media were depicting a commemorative EGP 10 coin, the authority clarified.

A few real estate company results for you this morning in case you missed them: Talaat Mostafa Group posted a 2015 net profit of EGP 761.6 mn versus EGP 681.8 mn last year while Madinet Nasr Housing and Development posted a 2015 consolidated net profit of EGP 245.4 mn.

The CBE has issued its guidance for the Supervisory Review Process of Pillar 2 of Basel II regulations for banks on Wednesday. The guidance aims to connect the bank’s risk profile with capital adequacy. The CBE’s guidance can be read in full here.

Women’s education rates in the MENA region often outperform men’s, but yet they are still underrepresented in the workforce, with the region being home to 13 of the 15 countries with the lowest female representation of the labor force. According to a World Bank research, this is due to: the patriarchal structure of states in the region, the dominant public sector employment and weak private sector employment, and an inhospitable business environment for women because of the conservative nature of gender roles and the lack of support for reproductive and family costs. MENA region income would be 27% higher if it were not for the gap in women’s labor force participation.

An Egyptian court on Saturday sentenced Facebook administrator Taymour el-Sobky to three years in prison with hard labor for his comments that Upper Egyptian women were largely unfaithful, Reuters writes.

CALENDAR

13 March 2016 (Sunday): The Design Build Breathe (DBB) Conference by Schaduf, Sofitel El Gezirah Hotel, Cairo. Register here.

15-16 March 2016 (Tuesday-Wednesday): US 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.

17 April 2016: German economic delegation visits 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