Waiting for Godot. Or: How I learned to stop worrying and love the endless delay of the cabinet shuffle.

TL;DR

Waiting for Godot: Cabinet shuffle announcement postponed to today. (What We’re Tracking)

EGPC official says BG Egypt suspends work at 9A+, 9B, government denies. (Speed Round)

Domty closes 9.2% higher on first trading day. (Speed Round)

EU in talks with Egypt to amend decision to list factories importing to Egypt. (Speed Round)

NREA to provide 8,000 sqm land to Minya solar companies. (Energy)

Procter & Gamble to double annual investment in Egypt. (Basic Materials + Commodities)

Cement companies look to grow through acquisition, not new licenses. (Manufacturing)

SNC Lavalin contracted for six industrial projects. (Real Estate + Housing)

Hyundai Rotem, Alstom qualify for EGP 400 mn tender to import cars for third metro line. (Infrastructure)

By the Numbers

WHAT WE’RE TRACKING TODAY

The domestic press is reassuring us all that we’ll have a new cabinet “within hours” and that they’ll meet with President Abdel Fattah El Sisi on Thursday. Neither financial services veteran Neveen El Tahri nor OCI N.V. treasurer Dalia Khorshid will serve as investment minister, Al Borsa says, suggesting Ashraf Salman’s replacement still hadn’t been settled as of midnight. Options for investment include EFSA Chairman Sherif Sami stepping up or Salman continuing in his post. Al Mal, meanwhile, says Qalaa Holdings’ Amr El Garhy would replace Hani Dimian at finance, while Yehia Rashed will take over at tourism, replacing Hesham Zaazou. The only Yehia Rashed we can think of is the veteran hotel manager (profile).

Madinet Nasr Housing and Development are holding their 4Q2015 results call tomorrow at 16:00 CLT, with speakers including CEO Ahmed El Hitamy, CFO Mohamed Abdel Salam, and IR Manager Salah Katamish.

The two-day conference Microfinance Egypt kicks off today at the Nile Ritz-Carlton in Cairo.

ON THE HORIZON

Future Rail and Metro Egypt is taking place from Tuesday 29 March to Thursday 31 March.

Saudi Arabia’s King Salman is visiting Cairo on 4 April for talks with senior Egyptian officials including President Abdel Fattah El Sisi, according to a statement from the Saudi Embassy in Cairo.

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SPEED ROUND

EGPC official says BG Egypt suspends work at 9A+ and 9B after failing to reach a price agreement, government denies: BG Egypt has suspended work at some development projects after it was unable to reach an agreement over the price of extracted gas with the government, an official at EGPC told Reuters. Work at the 9A+ and 9B wells of the West Delta Deep Marine concession have stopped, and BG Egypt withdrew rigs working on the 9A+ wells on 7 March, the official said. “BG Egypt has made setting a timetable for repayment of its arrears a condition for re-starting work at the suspended development wells,” the EGPC official added. The Oil Ministry sent local newspapers a statement denying Reuters’ report. “There is no phase called 9A+ and phase 9B has not begun production yet,” a source said, according to Al Masry Al Youm. The official statement also noted that “negotiations over timelines for the projects” are ongoing.

… The ministry’s response, particularly relating to phase 9A+, is rather odd. BG Group had already announced delaying linking phase 9A+ wells, which at the time were expected to add 150 mcf per day to production, in February 2015. More recently, BG Group had also postponed linking phase 9B in November, citing increased back-due payments and the government’s failure to pay portions of receivables it had committed to.

BG and BP are both trying to pressure the Egyptian government to reduce the amount of gas that will be directed to the domestic market, Al Mal says. A source says BG Group is looking to secure a revised agreement that allows it to inject more gas to its liquefaction plant in Idku. The difference in the profit margin is significant, the source explains; through liquefaction and exporting, BG could make USD 12-14 per mmBtu compared to the cap of USD 5.88 per mmBtu it earns from selling to the government.

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The CBE sold USD 104.5 mn in its FX auction yesterday at a rate of EGP 8.78 per USD 1. Yesterday’s was the first consolidated auction since the CBE decided to cut the number of weekly FX auctions from three to one. One banking source said the relatively large difference between the USD 120 mn that was on offer and the USD 104.5 mn actually sold shows that the FX waiting list at banks has already been covered, according to Al Ahram.

Domty closes 9.2% higher in its first day of trading: Domty’s stock rose as much as 13% during trading yesterday before closing up 9.2% at EGP 10.05 per share, Bloomberg reports (Reuters also has the story). Domty Chairman and MD Omar El Damaty said at the ringing of the bell at the EGX: “Our company began commercial operations in 1990, but in becoming today a publicly traded company, our journey has in many respects just begun. I am confident we have the right team, the right strategy and the right portfolio of brands to create new shareholder value in the years ahead as we invest in addition production capacity, new products and the penetration of high-potential expansion markets.” Domty’s start of trading release is here (pdf). EFG Hermes Investment Banking was sole global coordinator and bookrunner for the Combined Offering. Baker & McKenzie LLP was international counsel to the issuer, while Matouk Bassiouny served as local counsel and Akanar Partners as financial advisor.

Parliament and Ramadan go together like fish and bicycles: Per Ahram Online’s Gamal Essam El Din: “Egyptian MPs agree that parliament’s first legislative session (2015-2016) should be extended until October rather than end in July, Bahaaeddin Abu Shoqa, an appointed MP and secretary-general of the liberal Wafd Party, told reporters on Tuesday.” There will be no respite.

The EU is negotiating with Egypt on amending the decision to list factories importing to Egypt, head of the EU delegation to Egypt James Moran told Al Borsa. The decision is causing problems for European companies who cannot present the documents Egypt is asking for, he adds, despite Europe having more quality standards than Egypt does. Meanwhile, the Industry and trade Ministry assures the reason behind wanting to list European factories at the General Organization for Export and Import Control is preventing smuggled products from reaching the domestic market.

President Abdel Fattah El Sisi met with 24 intellectuals and writers on Tuesday to discuss the often-sensitive topics of political freedom, economic and regional developments, and the role of the media, Al Shorouk reports. “I am the one who stands at the face of the canon, I am the one with 90 mn Egyptian lives in my hands, you can’t just come here, talk and walk away,” he said during the meeting, according to AMAY. The president called for the formation of working groups to help solve various national challenges facing the Egyptian state. On the issue of freedom, El Sisi indicated that several groups of prisoners were released via initiatives from the Human Rights Council, which confirms just how far the state is willing to go to achieve political and economic consensus in Egypt. Notable attendees included writers Salah Eissa, Youssef Al Qaeed, and Lamis Gaber, economist Galal Amin, and novelist Wahid Hamed. Al Ahram has the full list of attendees.

Daesh has claimed responsibility for synchronized suicide attacks on Brussels airport and a metro train on Tuesday that killed at least 30 people and saw hundreds injured, Reuters reports. The Daesh-affiliated Amaq Agency carried the statement. President Abdel Fattah El Sisi condemned the “abhorrent” attack in an Ittihadiya statement while the Foreign Ministry said “the time has come for the world to make a final stand to deal with the phenomenon of international terrorism,” according to its spokesperson. Security has been tightened worldwide, and Egypt has beefed up surveillance at airports and hotels, according to the AP. Shares in European airlines and travel groups took a tumble following the attack, writes the FT (paywall) as the debate over airport security to resurfaces, Reuters reports. The attacks on Belgium come has the geopolitical environment takes a toll on the tourism industry, particularly after terror attacks hit Paris, Egypt, and Turkey, according to the FT.

HSBC reportedly sold loans extended to Petroceltic at about 30% of their face value, sources tell Bloomberg. HSBC had led a group of banks in 2013 to extend Petroceltic up to USD 500 mn “to boost production in Egypt and Bulgaria and fund development of the Ain Tsila gas field in the Algerian desert.” The company applied this month for protection from its creditors through an Irish form of Chapter 11 bankruptcy. Worldview Capital Management LLP, an activist shareholder that has been fighting for Petroceltic’s control since 2014, reportedly paid HSBC about 30 cents on the USD for the loans. An IFC spokesperson, which is part of HSBC’s lending consortium, said “Petroceltic’s application to seek creditor protection made prospects of repaying loans ‘even more uncertain’ and selling out to Worldview was in the IFC’s best interests.” Petroceltic had completed the sale of its Egyptian exploration licences to its joint venture partner Edison International for USD 9.5 mn in cash in February to focus on the Ain Tsila development in Algeria.

MOVES- Orange Egypt appointed former CIT Minister Atef Helmy as chairman, according to a an EGX statement. The board of directors also includes former ministers Ossama Saleh and Maged Othman.

THE MACRO PICTURE

Investors scurried toward safe havens including German bonds and US Treasuries following the Brussels attacks yesterday. And while hotel and airline stocks took a hit, European and US stocks managed to recover some of their early losses after the attack. Brent was steady while oil fell, according to Reuters, while gold and the USDgained. The GBP experienced one of the biggest selloffs in a month amid speculation that the attack would boost the case for campaigners who want to see the UK leave the EU.

Moody’s expects the positive impact of lower oil prices on oil-importing MENA countries won’t be as strong as you may think, according to a report. The effect will be mitigated by regional tensions in 2016, “Our latest growth projections see only a gradual recovery in 2017 following the oil price shock, reflecting persistent regional conflicts and domestic social tensions,” says Moody’s analyst Mathias Angonin. The ratings agency expects fiscal improvements to be gradual and “while Morocco and Jordan have taken a head start in implementing reforms, Tunisia, Egypt and Lebanon face higher constraints.” Regional conflicts and security tensions will continue to weigh on tourism revenues, keeping unemployment and social tensions high, according to the report.

And on the flip side: Saudi Arabia is set to freeze output without Iran, the FT (paywall) quotes a senior OPEC official as saying, with petro-states expected to meet in Doha on April 17 to discuss restraining the output. Meanwhile, as sovereign wealth funds find themselves lucky if they don’t have to liquidate holdings, if oil prices continue to be low, the strain on Gulf “hitherto deep-pocketed investment firms will intensify, giving rise to ripple effects across markets, whether public or private,” the FT (paywall) writes. And while governments will likely want to run down reserves rather than see their currencies depreciate, according to analysts, these “giant pools of money” will have less to contribute globally. “Global liquidity will shrink because global liquidity basically means [USD] liquidity and all the GCC and Saudi need [USD],” says Mohamad Al Hajj, a macro strategist for EFG Hermes UAE in Dubai.

EGYPT IN THE NEWS

Egypt is taking a page out of Israel’s book on human rights, writes Haaretz. With the shuttering of the Nadeem center, the renewed investigations into NGO funding, and Egypt largely brushing off an EU Parliament resolution condemning its lax attitude on the Giulio Regeni case, “as in Israel, most of the media happily collaborate in the persecution of human rights groups and parrot the government’s positions.” And while discontent and criticism has been growing more recently, “as in Israel, however, it’s doubtful this criticism will affect the government’s conduct.”

Meanwhile, Business Insider inexplicably recycles the 2011-14 meme about military involvement in the Egyptian economy (complete with the standard photo of protesters resting on the tread of a tank in Tahrir). Reuters, meanwhile, is running with a pickup of a La Tribune story claiming Egypt is about to buy EUR 1 bn in weapons systems from France, including “four naval vessels to be built by French naval shipyard DCNS, includ[ing] two Gowind corvettes.”

WORTH READING

Peter Hessler, sometime-contributor to the New Yorker on Egypt, writes on the economic changes China underwent in the late 1990s to early 2000s through the eyes of his students. Hessler spent about a decade in China and has written three books on the country. (Read China’s Journey by Peter Hessler for National Geographic, May 2008; note the article is 5 pages and cannot be viewed as a single page)

IMAGE OF THE DAY

“Alexandria yearns for lost elegance,” a Reuters photo essay accompanying the story “On Alexandria’s Fouad Street, Some Have a Longing for the Elegant Past.” The Save Alex restoration initiative launched in 2012 by architect Ahmed Hassan is at the heart of the story on the restoration of one of the Alexandria’s more iconic strips.

WORTH WATCHING

Larry David attempting to understand a question posed to him by a “low-talker” at the 2014 New Yorker Festival. (Watch, running time: 2:15)

ENERGY

Renewable Energy Authority to provide 8,000 sqm of land to 10 solar power companies in Minya
The New and Renewable Energy Authority (NREA) will sign agreements to provide 8,000 sqm in West Minya to 10 companies for solar power plants producing a total of 400 MW under the feed-in tariff system, senior NREA sources tell Al Borsa. These companies include Adenium Energy, Smart Green Holding, and Gulf New Energy. (Read in Arabic)

INFRASTRUCTURE

NUCA allocates EGP 1.5 bn to extend infrastructure to New Alamein City
The New Urban Communities Authority (NUCA) has allocated EGP 1.5 bn to extend infrastructure to a 2,500 feddan land plot at New Alamein City, to be completed before the end of June 2017. The Arab Contractors and Societe Egyptienne D’entreprises (Moukhtar Ibrahim) were tasked with the project by direct order. The companies have surveyed the site and are set to begin connecting pipelines next month, sources within the NUCA tell Al Borsa. (Read in Arabic)

Arab Fund to support two projects in Domyat, Sinai worth USD 400 mn
The Arab Fund is looking to establish two projects in Domayat and the Sinai projects, Arab Fund Chief Executive Abdul Latif Youssef Al-Hamad said on Tuesday, AMAY reports. The fund will construct a power plant worth about USD 220 mn in Domayat and a water treatment plant in Sinai worth about USD 185 mn, according to Al-Hamad. Other funding parties are interested in constructing large infrastructure developments in Sinai, he said. The Arab Fund has invested a total of USD 5 bn in Egypt and more than USD 60 mn in grants over the past four decades, according to AMAY. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Procter & Gamble to double annual investments in Egypt
Procter & Gamble are aiming to double its annual investment in Egypt to USD 100 mn over the next year and a half, said head of government relations Tamer Younes. The company currently invests USD 50 mn in Egypt every year, and has done so since 2011, he adds. Procter & Gamble currently operate around USD 3 bn in investments in Egypt, says Younes. (Read in Arabic)

MANUFACTURING

Acquisitions over greenfields: the new conventional wisdom of the cement industry
Acquiring existing cement companies is increasingly being viewed by sector CEOs and analysts as a more economic option than the costs of obtaining new licenses and launching greenfield projects, Al Borsa reports. Investments in new projects have risen as forming these will require building power plants, buying equipment, trial runs, and marketing, according to Jose Maria, managing director of Arabian Cement Company. Companies will have to wait five years to generate returns on USD 250 mn (roughly EGP 2.2 bn) in investments, said an analyst from Mubasher. He adds that the banking sector is less inclined to provide financing for greenfields. Meanwhile, Misr Qena Cement’s acquisition of ASEC Minya and ASEC Ready Mix had cost EGP 2.1 bn, said another analyst from Prime Holding. (Read in Arabic)

Faisal Bank, Misr Iran Development Bank form EGP 125 mn company to manufacture LED light bulbs
Faisal Islamic Bank of Egypt and the Misr Iran Development Bank (MIDB) have formed a company to manufacture LED light bulbs with an issued capital of EGP 125 mn, sources tell Amwal Al Ghad. Faisal Bank’s subsidiary Faisal Financial Investment Co. operates a 31% stake in the company, while Faisal Bank owns 25%, and MIDB owns 15%. The remaining shares are divided between Sharkia National Food and businessmen. The company’s board includes former Electricity Minister Hassan Younes, the source adds. (Read in Arabic)

Trade and Industry Ministry imposes 40 standards on three sectors
Trade and Industry Minister Tarek Kabil has issued three ministerial decrees imposing 40 standards on importers and manufacturers in the engineering, chemical, and textile industries. The decision is aimed at raising the quality of Egyptian products, Egyptian Organization for Standardization and Quality chief Mohamed Etman said. The decrees give the parties six months to adopt 36 of the standards and 12 months to adopt the other four.  (Read in Arabic)

LG Egypt exports 700k TV screens at a total value of USD 150 mn annually
LG Egypt exports 700k TV screens at a total value of USD 150 mn annually, Al Borsa reports. The company has recently adopted OLED technology in its screens, said CEO Don Cook, who believes the technology will quickly become popular in Egypt. The CBE provides the company with USD to repatriate profits and buy production inputs, he adds. (Read in Arabic)

HEALTH + EDUCATION

Health Ministry caps price of Harvoni imports at EGP 580
The Health Ministry vowed to not pay over EGP 580 per unit for hepatitis C treatment Harvoni, which it plans to import, said Health Minister Ahmed Rady. He states that negotiations for the supplies quantities and prices with manufacturers are expected to conclude in a few days. Four local factories have begun producing the local generic Declanza to supply the ministry, said Rady. A few weeks ago, an assistant to the health minister told Al Shorouk that an agreement with Gilead had been reached to lower the prices of Harvoni 75% to EGP 5,500 per pack in stores from EGP 20,000 a pack, with local generics priced at EGP 1,100 per pack. The minister’s statement were made at the signing of protocols that would see the Tahya Masr Fund provide funding for hepatitis C treatment.

REAL ESTATE + HOUSING

SNC Lavalin contracted for six industrial projects
Canadian engineering and consulting firm SNC Lavalin has been contracted by six different companies for design and construction work on industrial projects worth a total of EGP 1.5 bn, SNC Lavalin Egypt’s head of business development Ayman Ismail told Al Borsa. The industrial projects include factories located in Sixth of October and Tenth of Ramadan, adds Ismail. The duration of each project is two years, with each project costing around EGP 250 mn. Additionally, the company is interested in the Suez Canal Economic Zone projects and is preparing a study on companies participating ahead of negotiating design and construction agreements, said Ismail. (Read in Arabic)

Wadi Degla targets sales of EGP 6 bn this year
Wadi Degla Holding is targeting sales worth EGP 6 bn this year, EGP 3 bn of which come from the 546 feddan Neopolis Future City development, said Wadi Degla Chairman Maged Helmy. The company plans to launch two major developments this year: a 115k sqm project in Ain Sokhna and a 119k sqm project in New Cairo. The company has also applied for permits to expand its presence in the canal cities and the new capital, Helmy added. (Read in Arabic)

Property tax revenue surges 74% in FY2015-16 – Finance Ministry
Property tax revenue rose 74% in the first eight months of the current fiscal year, according to a statement from the Finance Ministry. Tax Authority President Samia Hussein attributed the surge to an increase in total collected real estate taxes to EGP 582 mn this fiscal year from EGP 264 mn in FY2014-15, an 18% a rise in amusement park property tax revenue, and a 13% climb in agricultural tax revenue. (Read in Arabic)

TOURISM

Resuming British flights to Sharm El Sheikh contingent on assurances of airport safety
Britain resuming flights to Sharm El Sheikh is contingent on assurances of airport safety, said UKTI Director in Cairo Jason Ivory. Resuming the flights is a priority to British Ambassador John Casson and the British government, said Ivory. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Hyundai Rotem and Alstom qualify for EGP 400 mn tender to import cars for third metro line
Hyundai Rotem and France’s Alstom have met the technical qualifications for a EUR 400 mn tender to import 64 metro cars for the third metro line, sources from the National Authority for Tunnels tell Al Borsa. Alstom had previously secured a tender to provide control and communications works for the line. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

DHL continues to grow in Egypt, wants more customs consistency, MENA CEO says
DHL’s biggest challenge in Egypt is the inconsistency in customs regulations, DHL’s MENA CEO Nour Suliman tells Daily News Egypt in an interview. “We face regular changes on customs regulations and, quite often, the unavailability of custom agents and several different authorities to clear shipments—both inbound and outbound—which causes delays in our process,” Suliman explains. He says that performance in Egypt is “one of the best” regionally and DHL’s market share of its international share is breaking 50% with “no intention of slowing down.” DHL is also cooperating with Egypt Post, which Suliman says relies on DHL in international shipments. (Read, though the article was unavailable at dispatch time)

Misr Ins. to appeal court ruling over East Med unpaid debts
Misr Ins. and the National Bank of Egypt (NBE) are in the midst of legal wranglings after a Cairo Economic Court ruled last month that Hussein Salem’s East Mediterranean Gas and Misr Ins. owe NBE USD 174 bn in unpaid debts plus 25% interest. Misr Ins. plans to appeal the decision, said Mohamed Khalifa, deputy CEO of Misr Ins. He added that the policy on East Mediterranean Gas did not cover operational decisions such as not following through on debt payments. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Importers, Trade Ministry reach agreement on import restrictions
Importers reportedly reached an agreement with the Foreign Trade Agreements Sector of the Trade and Industry Ministry over import restrictions after hundreds of small-scale importers demonstrated on Tuesday, DNE reports. The agreement stipulates that goods held in ports that were shipped before 15 March without a prior examination certificate be released. They agreed to circulate a notice of the decision on Wednesday in all Egyptian ports. (Read)

NATIONAL SECURITY

Egypt close to completing EUR 1 bn French arms purchase
Egypt is expecting to sign an arms purchase with France on 18 April during French President Francois Hollande’s visit to Egypt. The agreement, valued at around EUR 1 bn, includes four naval vessels to be built by French naval shipyard DCNS and a military satellite that will be supplied by Airbus Space Systems and Thales Alenia Space. (Read)

ON YOUR WAY OUT

Americana Group has acquired 4.44% of EK Holding’s shares at an average price of USD 0.48 per share, according to an EGX statement.

Social Solidarity Minister Ghada Waly called on the World Bank Group (WBG) to provide grants to the Takaful and Karama social welfare programs at a meeting with the deputy head of the WBG MENA Hafez Ghanem. Waly told Ghanem that the grants will be used to build institutional capacity and fund vocational training and awareness programs on health and education, Al Borsa reports.

A south Cairo criminal court ruled that Mahmoud Hussein, the student who has been in jail for two years now for wearing a “Nation Without Torture” T-shirt and a scarf marking the “25 January Revolution,” be released on bail of EGP 1,000, Al-Shorouk reports.

CALENDAR

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

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

04 April 2016: Saudi Arabia’s King Salman visits Cairo.

07-10 April 2016 (Thursday-Sunday): Cityscape Egypt Conference, Cairo International Convention Centre, 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.

10 May (Tuesday): Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development, InterContinental Hotel Citystars Cairo. Register here.

25-26 May (Wednesday-Thursday): The Middle East and North Africa Solar Conference and Expo MENASOL 2016, Hyatt Regency, Dubai.

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

27 November 2016 (Sunday): 2016 Cairo ICT Conference Group

04-06 December 2016 (Sunday-Tuesday): Solar-Tec Conference, Cairo International Convention Centre, Cairo