Monday, 28 March 2016

Cabinet says “Yes, we can” as Ismail presents program to House of Reps

TL;DR

Cabinet channels its inner Obama with “Yes, we can” program, targets 5-6% growth by 2017-18. (Spotlight, after Speed Round)

Tarek Amer said an IMF package was likely? (Speed Round)

Morgan Stanley advising on state bank IPOs. (Speed Round)

Sawiris, Amer still clashing. (Speed Round)

Beltone board signs off on CI Capital, Arab Finance, Reefy acquisitions + Ahli Bank of Kuwait finalizes acquisition of 98.5% of Piraeus Bank Egypt. (Speed Round)

EGP loses ground against greenback on black market, CBE plans crackdown on FX bureaux that aren’t playing ball. (Speed Round)

Egypt’s gas hub dream dealt a setback as Israeli court blocks development of Leviathan field. (Speed Round)

EFSA signs off on regulatory changes for insurance industry. (Speed Round)

By the Numbers

WHAT WE’RE TRACKING TODAY

Goodbye for now, Leviathan. Egypt’s dreams of becoming a regional natural gas hub serving Europe were dealt a setback yesterday as Israel’s High Court struck down the Israeli government’s proposal to regulate the natural gas industry. The move effectively blocks export contracts and the development of the offshore Leviathan field, Bloomberg reports. The court objected to a “stability clause” that would have “prevented major regulatory changes for 10 years, inserted to encourage investment.” While the court gave the government a year to revise its plan, industry players are decrying the move. Energy Minister Yuval Steinitz called it a “wretched” decision with irreversible implications for the Israeli economy. Leviathan developers Noble Energy and Delek Group agreed in November to enter non-binding negotiations with Alaa Arafa and partners’ Dolphinus Holdings Egypt to supply as much as 4 bn cubic meters of natural gas annually for 10 to 15 years.

The Finance Ministry will finalize a draft of the state budget for the upcoming fiscal year within the next couple of days as new minister Amr El-Garhy puts his stamp on the document, Al Borsa reports.

This publication is proudly sponsored by

Pharos Holding - http://www.pharosholding.com/

CIB - http://www.cibeg.com/

WHAT WE’RE TRACKING THIS WEEK

The three-day Future Rail and Metro Egypt kicks off tomorrow.

ON THE HORIZON

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

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

We 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.

SPEED ROUND

Speed Round is presented in association with

SODIC - http://sodic.com/

Wait, Tarek Amer said an International Monetary Fund package was likely? A little-discussed element of Central Bank Governor Tarek Amer’s interview with Lamees El Hadidy on Saturday night was his statement that while an IMF loan request was likely, it would have to come on “Egypt’s terms” and the IMF must grant it based on the merits of the government’s reform agenda. His comments were for domestic consumption and meant to reassure the domestic electorate, said Amr Adly, an economist with the Carnegie Middle East Center. That’s not how the IMF works, added former IMF executive Fakhry El Fekky. The IMF does not issue terms, but grants a loan based on a reform agenda adopted by the applying government, he tells Al Borsa.

The international press is having something of a field day with the central bank / term limits / Naguib Sawiris / CI Capital flap. (Yes, we know, we need to come up with a better name for the whole story.) “Egypt’s Sawiris says CI Capital acquisition stalled by security,” blares the Reuters headline over a story that says Sawiris is complaining his acquisition of CI Capital is “being held up by national security concerns and criticised state meddling in business that he said would put off investors.” The story has put Egyptian Financial Supervisory Authority Sherif Samy (without question a competent regulator if ever there was one) in a tight spot, leaving him to say, “EFSA does not comment publicly about the process, or what missing documents are needed or what other clarifications are being sought. Once the paperwork is in order, EFSA issues its decision.” Separately, the newswire quotes CBE Governor Tarek Amer’s interview with Lamees El Hadidy in its piece on the possible sale of up to 40% of AAIB and 20% of Banque du Caire. Reuters reminds us that the last time state-owned enterprises were listed on the EGX were Telecom Egypt, Sidi Kerir Petrochemicals and refiner AMOC in 2005. Sunday night saw CBE Governor Tarek Amer on Lamees El Hadidy taking a veiled shot at Naguib Sawiris, Beltone’s majority owner, and Sawiris responding in kind with a furious late-night op-ed.

As for the IPOs of Arab African International Bank and Banque du Caire, the CBE has apparently asked bulge-bracket stalwart Morgan Stanley to advise, a senior CBE official tells Al Borsa. The CBE wants Morgan Stanley to evaluate and assess the two banks before moving ahead with the IPO. Also, Amer’s announcement that United Bank would be sold off to “a strategic investor” came as a surprise to none other than United’s CEO Ashraf Al Kady, who told Al Borsa that the CBE had not informed him earlier about the decision. He did add, however, that it was the CBE’s prerogative as the owner of the bank.

Meanwhile, the Sawiris-Amer barb-trading continued yesterday, with Sawiris saying, “he shouldn’t speak about my qualifications, because if I speak on his he won’t be happy” in a call-in to Lamees El Hadidy’s Hona Al Assema (watch, run time 19:43), which hosted Amer on Saturday. Yesterday also saw an unnamed senior official at National Bank of Egypt condemn Sawiris’ suggestion that NBE was being used as a tool to torpedo the CI Capital acquisition. The official told Al Borsa that the whole flap is simply another example of Sawiris airing his grievances in the media, something the official says the billionaire does regularly.

And while we’re on the CI Capital acquisition, OTMT is not interested in extending the timeline for the transaction, which is set to expire at the end of the month, an OTMT higher-up tells Al Mal: “If the timeline concludes without completing the acquisition, we will hold talks to discuss options,” the source added.

Meanwhile, Beltone’s board approved the acquisition of Arab Finance and microfinance player Reefy, according to a company statement. The EGP 23 mn acquisition of 100% of online trading portal Arab Finance is essentially a related party transaction, held as it is by A15 (formerly known as OTVentures). Reefy (as the Micro Finance Enterprise Services Co. is better known) is also something of a related-party transaction, with Sawiris having been an anchor investor in the company, if we recall correctly, alongside founder Ahmed El Baradei, former chairman of Banque du Caire. The acquisition of Arab Finance is a bid to bolster Beltone’s electronic trading arm once Beltone acquires CI Capital, Beltone sources tell Al Borsa. Pharos Holding will act as independent financial advisor on the Reefy acquisition. The board also officially approved the 100%, EGP 924 mn acquisition of CI Capital.

On a related, if tangential, note, the EGX scrapped trades on Beltone Financial Holding during yesterday’s exploratory session after the previous night’s saga, Al Borsa reports.

Pharmacos want FX before repatriation: While multinationals are pleased with Amer’s announcement of an upcoming program to facilitate the repatriation of revenues, Al Borsa reports, international pharmacos are requesting that they be allowed to transfer USD to cover the import of raw materials that are languishing in customs, said Ashraf El Kholy, head of an industry association. He added that for multinationals in the sector, the availability of FX to import production intermediates presently trumps the repatriation of funds.

It’s a bloody yo-yo: The EGP lost ground against the USD yesterday after strengthening over the weekend, Al Masry Al Youm reports, saying it found the greenback changing hands for EGP 9.88 on the parallel market. AMAY noted the dip came after CBE Governor Tarek Amer’s appearance with Lamees El Hadidy on Saturday. Al Borsa sang from the same sheet music, saying the USD “shrugged off CBE Governor Tarek Amer’s comments on Saturday” and rose to EGP 9.85-9.90 yesterday compared to EGP 9.70-9.85 on Saturday. Amer said on Saturday that laws would be amended to tighten controls on currency trading outside the banking sector.

Speaking of which… The Public Funds’ Crimes Investigations Unit has been working with the CBE on regulatory changes that would shut down and revoke licenses of currency traders that do not comply with directives — and that could possibly impose jail time, an unnamed source told Al Borsa on Sunday. The legislative amendments will be sent to the House of Representatives for approval within the next few days.


Ahli Bank of Kuwait has finalized its USD 150 mn acquisition of 98.5% of Piraeus Bank Egypt, according to a company statement picked up by Al Bawaba. Piraeus branches will be rebranded ABK Egypt subject to approval by the CBE, with the new identity set to roll-out to the bank’s 39 branches in the first half of this year. JP Morgan was exclusive financial advisor to ABK, while Ernst & Young acted as transaction and tax advisors and Zulficar & Partners acted as legal advisors.

If you work in the insurance industry, you have some reading to do this morning after the Egyptian Financial Supervisory Authority (EFSA) signed off yesterday on a basket of regulatory changes. Going forward, bancassurance will get a leg up, with commercial banks being able to contract to sell for up to four insurance companies, Al Mal reports. Meanwhile, a new reinsurance regulatory administration under EFSA will oversee the reinsurance market, says EFSA chief Sherif Sami. The new regulatory body will be responsible for oversight of existing players and will be tapped to give EFSA a viewpoint on new license applicants going forward. Sami also says disputes under the Insurance Act should be adjudicated by the economic court system, according to Al-Borsa. The decisions all came out of an EFSA board meeting held yesterday.

EGAS has purchased two LNG cargoes for April delivery one day after Reuters reported that the state-owned company was having challenges because of what traders said was a short notice period. “EGAS launched a tender earlier this month, open only to some of its existing suppliers, for the delivery of one cargo on April 1-7, and another on April 27-28,” the newswire reported. Each shipment is for 170k cubic meters.

MOVES- Former Investment Minister Osama Saleh resigned on Saturday night for personal reasons as chairman of Arabia Investment, Development and Financial Investments Holding Company (AIND), Al Borsa reports. AIND will soon announce the date of the next board meeting to discuss the matter.

SPOTLIGHT ON the Ismail government’s national program

Prime Minister Sherif Ismail presented his government’s agenda to the House of Representatives yesterday. At least part of the speech was broadcast on radio, and cabinet published a transcript (pdf, Arabic only) of the PM’s remarks. The first cycle of the program, entitled “Yes, we can” (a phrase that might be familiar to some of you) will extend until January 2018. There will then be a second cycle launched in June 2018 after some review and analysis.

The growth-oriented economic policies we mentioned yesterday are based on seven key pillars, Ismail said: (1) preserving national security; (2) strengthening democracy; (3) implementing growth-oriented economic policies; (4) social justice through the improvement of services such as health and education; (5) economic sector development; (6) administrative reform; and (7) restoring Egypt’s leading position in regional affairs. As the plan is extensive, we focus below largely on its economic angle.

Notably absent from the government’s program: There was no mention in the agenda of subsidy reform, whether for energy or food. Another key miss: The automotive directive, which the industry has been calling for to protect domestic assemblers from what it says is unfair foreign competition (though at least two oblique mentions could be interpreted as offering faint hope). Another major issue missing from the administrative reform agenda (pillar 6) was the reintroduction of the Civil Service Act, which has long been touted as a cornerstone of administrative reform. Parliament shut down the act, with government having amended the legislation in the hopes of reintroducing it.

Bloomberg called the program a bid to lure foreign aid to bolster Egypt’s ailing economy, especially as sinking oil prices put pressure on aid from Gulf neighbors. The key to unlocking this aid? The long-awaited, much-debated VAT, naturally, with CBE Governor Tarek Amer saying in his televised interview with Lamees El Hadidy yesterday that the tax will help Egypt secure the first part of a USD 3 bn World Bank loan. And while the plan also put forth a number of reforms, “it did not give specifics on how those changes would work,” Reuters reports. “It is up to us to take several hard decisions that have long been delayed, [but] any economic steps will be accompanied by the requisite social protections,” Ismail said, attempting to quell inflationary fears. Meanwhile, a few dozen unemployed university grads gathered outside the House to protest the program, shouting, “Sisi, the youth are eating dirt … Sherif, what has your government done?” according to Reuters.

On the macroeconomic front (pillar 3), the government has set the following targets:

  • Delivering economic growth of 5-6% by 2017-18
  • Reducing unemployment to 10-11% by 2017-18, and under 9% by 2019-20
  • Reducing the budget deficit to 9-10% from the current 11.5%, and 8-9% by 2019-20
  • Reducing public debt to 92-94% of GDP by 2017-18, and to 85-90% by 2019-20
  • Increasing public savings to 9-10% of the GDP from the current 6% by 2019-20
  • Raising investment rates to 18-19% from the current 15% by 2019-20
  • Lowering inflation rates to 9% by 2017-18
  • Achieving an annual growth rate of 5% by 2017-18 for commodity exports
  • Achieving an annual growth rate of 10% by 2017-18 for small-sized industry exports
  • Increasing competitiveness of products and services to bridge gap between exports and imports
  • Continually reassessing spending priorities to target development projects and human capital through improving health and education programs

How do you make this a reality? Cabinet says it begins with legislative and institutional reforms including: Amending the Tender Act and the Government Auctions Act to make them more efficient; Issuing a new Tariffs Act; switching from the sales tax system to a value-added tax; implementing a new overall taxation framework to boost revenue; and diversifying sources of financing by deepening debt markets.

All the buzzwords, all the time: Predictably, job creation is also a central feature of the program, as are cutting red tape for investors, streamlining procedures for the issuance of permits and the acquisition of land, and providing support to SMEs, including giving them better access to financing and to government resources.

Ismail also gave us a preview of his government’s priorities as regards national megaprojects, among them:

  • Building logistics centers throughout the Suez Canal Development Axis;
  • Continue building new cities, including the new administrative capital;
  • Increasing the agricultural output of the 1.5 mn feddan project and boosting the development of urban centers around it;
  • Developing tourism, industry, electricity, housing and agricultural projects in the North Coast;
  • Adopting an economic development plan in June for the Golden Triangle;
  • Developing Ain Sokhna and the Gulf of Suez through the 30 June Axis and New Galala City;
  • Earmarking USD 10 bn to develop 5 tn cubic ft of gas in the Mediterranean and USD 12 bn for developing the 30 tn cubic ft of gas in the Shorouk field;
  • Boosting power production through the Daba’a nuclear plant and the Siemens power plants.

On the economic development front (pillar 5), the government’s plans include seeing the growth rate for industry hit 8% by 2017-18 and upping its contribution to GDP to 21% by:

  • Facilitating licensing and permit procedures to attract investments;
  • Developing factories and supporting infrastructure in Upper Egypt;
  • Earmarking EGP 5.2 bn through to 2018 for the development of industrial complexes, such as the Damietta Factory City;
  • Developing the domestic supply chain to reduce reliance on imported production inputs (which could be a veiled reference to the automotive directive, which relies on domestic component manufacturers);
  • Bolstering foreign trade by growing exports 5% by 2018 (10% growth targeted for small industries), ensuring their competitiveness and quality, and reducing the trade deficit 3-5% by 2018 through the reduction of imports and encouraging feeder industries (another possible allusion to the automotive directive);
  • Ensuring the transfer of new technology and knowhow to 1,076 factories by the end of this year;
  • Ensuring SMEs contribute at least 5% to industrial growth and launching new financing mechanisms for them;

Encouraging growth of the petroleum and mining sectors by:

  • Tendering 30 oil and gas exploration blocks per year, signing 15-20 agreements over the coming period, and boosting investments in the sector to USD 14 bn per year;
  • Launching eight refining and petrochemical projects worth USD 7.5 bn aimed at covering 90% of domestic fuel needs between 2017-2019;
  • Connecting 2 mn more homes to the natural gas grid by 2018;
  • Developing the mining sector by skewing toward value-added projects rather than the sale of raw minerals, launching new mining complexes, and tendering new concessions through to 2018.

Growing power generation capacity 7% annually by:

  • increasing the number of natural gas- and coal-fired power plants;
  • Investing EGP 31.7 bn in building up transmission capacities;
  • Increasing power generation from renewable sources to 3 GW.

In agriculture, the government plans to increase output and attract new investment to the sector. It will also:

  • Roll out a new smart card system for farmers to stop leakage of subsidized crop inputs;
  • Expand production capacity of key crops such as wheat to 11 mn TPA by increasing total available agricultural land. This would be up from 9 mn tonnes of domestic wheat production in 2015, according to the FAO. Egypt imports on average 11 mn tonnes of wheat per annum in addition to domestic production;
  • Legitimize informal ownership of land being developed by occupants. If this refers to formalizing informal land reclamation projects, this would mark a departure in policy for the government. Previous official reclamation efforts have been beset with problems, with some estimates putting the previous Toshka project, (a c.500k feddan area) as costing USD 70 bn and only resulting in 10% of the target reclamation. Informal reclamation efforts, however, have been reportedly estimated by the government to stand at 1 mn feddan, and were, at least previously, viewed by the authorities as problematic.
  • Increase production of meat, chicken, fish, and dairy by 80-100% by 2018

The government hopes to attract 9 mn tourists by the end of 2017 and up to 10 mn by the end of 2018 through:

Cabinet’s priorities for the transport sector includes:

  • Investing in port development nationwide;
  • Developing river transportation through projects including Nile Taxi and developing river ports in Qena, Assiut, and Sohag at a cost of EGP 300 mn each
  • Improving the railway network by upgrading 2,500 wagons at a cost of EGP 2.5 bn, importing 100 locomotives at a cost of EGP 3 bn, and spending EGP 1.7 bn in upgrading 1,760 km of rail;
  • Completing phase 3 of the Metro Line 3 (Attaba-Boulaq Dakrour) by 2023 at a cost of EGP 22 bn.

The government’s strategy for the ICT sector, which it hopes to grow to a USD 4.5 bn industry by 2018, includes:

  • Spending EGP 10 bn on upgrading and developing the telecommunications infrastructure over the next three years
  • Developing seven tech zones and cities nationwide with a focus on Upper Egypt

On the civil aviation front, it aims to:

  • Expand airport capacities in Sharm El Sheikh by 2 mn passengers and Borg El Arab airports by 4 mn with a total investment of EGP 3.3 bn
  • Increase EgyptAir’s fleet to 83 planes by 2018
  • Upgrade radar and air traffic control equipment across Egypt’s airports

Water and irrigation policies include:

  • Spending EGP 4.5 bn on upgrading and improving water pumps and other facilities
  • Reducing water usage through new technologies
  • Building 11 new water treatment facilities

Key social elements of the government’s program (pillar 4) rested on improving services, health, and education. For services, the government increased funds for the Takaful and Karama social welfare program over the next few years; promised to improve access and distribution of social housing; and agreed to improve and expand water and sewage infrastructure. As for health, the government is focusing on enshrining the Universal Health Insurance Act into law; expanding access to subsidized healthcare; expanding the hepatitis C eradication program; growing the local pharmaceutical industry and expand its domestic and export capacity; and developing more hospitals and medical centers. On the education front, the government has a set a target of developing a total of 150k new classrooms, which it estimates will cost EGP 45 bn. The government hopes to outsource the development and management of 60,000 classrooms to the private sector by offering incentives. It has allocated EGP 6 bn in annual spending on education.

THE MACRO PICTURE

“Given where prices are now, the apocalypse could be priced in already,” Man GLG’s Guillermo Osses writes for the FT (paywall) about emerging market debt. Osses expects the next “wave of headlines” to center around countries at risk of defaults in the coming months and years,  “small, energy-exporting nations with fixed-rate foreign exchange regimes.” But he doesn’t believe there will be a wave of defaults this time due in a large part to the completely “central importance of floating foreign exchange rates.” He points to Russia as an example, with its current-account balance back where it was during “the days of [USD] 110 per barrel of oil,” despite all its challenges. “We are only half joking when we tell investors that Russian foreign currency bond holdings could be a safer bet than US Treasuries.”

Gavyn Davies for the FT shares a similar sentiment, writing that “the global economy has shown some tentative signs of a rebound in recent weeks,” as data coming out of March showed that global activity growth bounced back to 2.6% from a low of 2.2% a few weeks back. Most the the recovery has happened in advanced economies, wiping out the slowdown due to weaker exports to emerging markets. The US led the way, with the forecast jumping to 2.2% after being stuck around 1.0-1.5%, while last month’s drop in eurozone growth is mostly still intact and China still weakening.

EGYPT IN THE NEWS

Reuters has picked up on the revived NGO funding case. “I think some in the security agencies see human rights organizations as part of this global conspiracy to sow chaos, and that is actually in the asset freeze order,” Egyptian Initiative for Personal Rights associate director Heba Morayef tells Reuters. “This would be the biggest blow to human rights organizations in 30 years.”

The Jerusalem Post reports that Daesh’s Egyptian arm Wilayat Sinai plans to carry out a “big operation” in southern Israel, including an attack on the resort city of Eilat, a militant close to the group warned. In an interview on Aaron Klein Investigative Radio, a US weekend radio, Gaza Strip Salafist senior official ominously saying “it is only a question of time.”

The Giulio Regeni case is making headlines again, with The Guardian reporting that Egyptian detectives investigating the case agreed to extend the investigation following pressure from Rome, according to Italian Interior Minister Angelino Alfano. Italy had largely rejected Egyptian authorities’ claims that Regeni was murdered by a gang. “It is important that, in the face of our emphasis on the quest for truth, the Egyptians changed tack in a few hours and told us that their investigations are continuing,” Alfano told the Corriere della Sera newspaper (Italian) on Sunday. “Our investigators should be directly involved, participating in questioning and evidence gathering … Our input is essential.”

… Meanwhile, Interior Minister Magdi Abdel-Ghaffar said the Regeni case has become “very difficult” due to “hostile [media] campaigns” that consistently raise doubts about the ministry’s interior efforts on the case, Ahram Online reports. “These campaigns are … raising doubts all the time about the interior ministry’s efforts in exposing the truth about Regeni’s murder.

DIPLOMACY + FOREIGN TRADE

A Hamas delegation landed in Cairo yesterday from Doha for more meetings with Egyptian officials, Ahram Online reports. The delegation is expected to respond to requests made by the Egyptian side during the group’s first visit to Egypt earlier this month, including a “pledge of non-interference by Hamas in Egyptian affairs; cooperation with Cairo on investigations over issues that affect Egyptian security; and stopping extremists and hostile parties from entering or leaving the Strip from Sinai.”

CBE delegation visits Indonesia to strengthen banking cooperation
A CBE delegation led by General Manager of Risk Management Hatem Ibrahim visited the Bank Indonesia and Indonesian financial authorities on a four-day visit that wrapped up Sunday to discuss ways to strengthen banking and financial cooperation between the countries, Al Shorouk reports. The delegation met with representatives from the Indonesian Finance Ministry and customs authorities to study Indonesia’s fiscal policy and how to curb import bills.

BASIC MATERIALS + COMMODITIES

Mineral Resources Ministry receives cabinet, army approval to tender seven gold mine concessions
The Mineral Resources Authority obtained security approvals to tender seven gold mine concessions before the end of the current fiscal year, Al Borsa reports. Chairman of the Mineral Resources Authority Omar Teima says the Eastern Desert and South Sinai will be included in the tender for the first time. No licenses will be granted except through tenders released by the Mineral Resources Authority, as stipulated by the law, said Teima. As for production from the Sukari mine, Teima said it would be divided between Centamin and Egypt by the end of 2016, with expenses and revenues in the process of being finalised. Centamin CEO Josef El-Raghy had previously told Al Borsa that the Egyptian government would receive USD 3 bn in profits over the 20-year life of the project, with revenues from the project split 50:50 between the authority and the company. (Read in Arabic)

HEALTH + EDUCATION

China, Egypt ink education MoUs
Egypt and China signed yesterday five memoranda of understanding on cooperation in education as part of a multi-day visit to Egypt by China’s Vice Premier, Liu Yangdong, as we reported in yesterday’s edition. The agreements will provide scholarships for Egyptian university students to study China, allow the training academics and professors, and provide for joint research projects. China will offer 100 study grants in 2016, hiking the number to 500 by 2020; the MoUs also commit the two sides to chipping in USD 10 mn apiece to Egyptian-Chinese research projects over the coming five years, Al Masry Al Youm reports.

REAL ESTATE + HOUSING

Final draft of property registration regulations and procedures complete
The ministries of justice, finance, housing, irrigation, planning and local development have prepared a final draft of procedures and regulations governing property registration, AMAY reports. The protocol, according to Egyptian Survey Authority Chairman Medhat Kamel, gradually eradicates bureaucracy associated with property registration, as well as resolve land disputes. Part of the protocol includes the establishment and development of a geographic real estate management database. (Read in Arabic)

TELECOMS + ICT

Etisalat Misr, Huawei complete microwave solution “Super Dual Band” field trial
Etisalat Misr and Huawei have successfully completed the field trial of a microwave transmission solution dubbed “Super Dual Band’, according to a Zawya pickup of a Huawei statement. While microwave transmission has struggled to meet the demand for multi-giga bandwidth at long distances, the Super Dual Bank achieved 6.19 Gbps over a relatively long (3.37 km) link in Alexandria. “The growing capacity requirements for 3G and soon the LTE services raise high requirement for mobile backhaul solution in Egypt; we require innovative solutions on wireless backhaul technologies. The combination of E-Band and traditional microwave frequency spectrum is one of the good directions.” said CTO of Etisalat Misr Khalid Murshed. (Read)

NTRA to provide incentives for ISPs interested in regional licenses
The National Telecommunications Regulatory Authority (NTRA) intends to give internet providers incentives to acquire regional licenses, Al Borsa reports, without going into much detail. The NTRA plans to issue 10 regional internet licenses by the end of 2016 in accordance with its plan to eliminate illegal internet connections. So far, no agreement has been reached with distributors on the terms of regional licenses for internet services, ICT Minister Yasser Al Kadi said. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Honda Egypt recalls four models produced between 2004 and 2011
Honda’s Egypt franchise is asking owners of CR-V, Citi, Jazz and Accord passenger cars manufactured between 2004 and 2011 to check in to see whether their vehicle is covered under a sweeping global recall of cars that use certain Takata-made airbag inflators. Car and Driver is the ultimate resource on the Takata recall. Scroll to the bottom of the page and you’ll find information on a further 1.6 mn BMW vehicles impacted by the suspect inflators as well as models from Toyota, Nissan and Mercedes-Benz.

Al-Mansour Automotive opens new Ring Road sales and service center
The privately held automotive giant has opened a new sales, aftersales and service center on the Ring Road, Al Mal says, stopping short of specifying the investment cost for the new facility, which will handle Chevrolet and Opel vehicles. The story otherwise breaks no new ground, suggesting it is “normal for price increases to follow from devaluation because Al Mansour sources its foreign exchange from the banking system and does not resort to the parallel market.” The story goes quickly and steadily downhill from there and is otherwise notable only for its claim that Al Mansour held a 25% market share last year and a 27% share in January. (Read in Arabic)

BANKING + FINANCE

Banks consider raising interest rates on personal, car loans
Most banks are considering raising interest on retail loans, specifically, personal and car loans, by 0.5-1%. The move follows last week’s raising of interest rates on deposits by 1.5% in response to the Central Bank of Egypt’s interest rate hike the previous Thursday. This additional raise is meant to cover the disparity between interests on deposits and loans following the sharp 150 bps rise in deposits. Personal and car loans were specifically targeted due to their dominant size in the retail banking sector, Al Borsa reports.

NBE, Banque Misr to issue new USD-denominated CDs with EGP yields this week
NBE and Banque Misr are planning to issue new USD-denominated deposit certificates with EGP-denominated yields this week, Al Borsa reports. The three- and five-year CDs will carry an interest rate ranging between 13-15%. The move is part of the CBE-led strategy to draw in USD to shore up FX liquidity. (Read in Arabic)

NATIONAL SECURITY

Armed Forces take out Beit Al Maqdis’ largest administrative base in Sinai
The Egyptian Armed Forces reportedly stormed and gained control of Beit Al Maqadas’ largest administrative base in Al Barth Village south of Rafah City on Sunday, AMAY reports. The base is considered a central administrative unit for Beit Al Maqdas’ activities and other terrorist cells in Rafah, Sheikh Zewaid, and Al Arish. (Read in Arabic)

SPORTS

Egyptian Football Association executive board dissolved by court order
The Egyptian Football Association’s executive board was dissolved yesterday by a court ruling over the suspected rigging of its 2012 elections, Ahram Online reported. The verdict is final and cannot be appealed. The lawsuit was filed in 2013 by Hermas Radwan. The new board elections are set to take place in September 2016, and current executive director Tharwat Sweilam is expected to direct the association until then. (Read)

** In squash news: World number five Nour El Sherbini has given Egypt its first women’s British Open title after beating out Nouran Gohar in an all-Egyptian match on Sunday, Ahram Online reports. Meanwhile, Egypt and world number one Mohamed Elshorbagy beat Egyptian Ramy Ashour 3-0 on Sunday to retain his British Open title, according to a separate Ahram Online piece.

BY THE NUMBERS
Powered by
Pharos Holding - http://www.pharosholding.com/

USD CBE auction (Sunday, 27 March): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Sunday, 27 March): 9.88 (+0.18 since Saturday, 26 March)

EGX30 (Sunday): 7,480.11 (-0.9%)
Turnover: EGP 794.8 mn (65% above the 90-day average)
EGX 30 year-to-date: +6.76%

THE MARKET ON SUNDAY: The EGX 30 fell 0.9% on Sunday with shares worth EGP 794.8 mn changing hands while regional investors were the sole net sellers. Pioneers Holding, Global Telecom Holding, and Edita were the top performers while Porto Group, Arabia Investments, and Orascom Construction were the worst performers. Regional indices didn’t fare much better, with the TASI down 1.5%, ADX 0.8%, and DFM 1.2%.

Foreigners: Net long | EGP + 6.1 mn
Regional: Net short | EGP – 34.3 mn
Domestic: Net long | EGP + 28.2 mn

Retail: 79.4% of total trades | 82.3% of buyers | 76.4% of sellers
Institutions: 20.6% of total trades | 17.7% of buyers | 23.6% of sellers

Foreign: 2.6% of total | 3.0% of buyers | 2.1% of sellers
Regional: 9.0% of total | 6.6% of buyers | 11.4% of sellers
Domestic: 88.4% of total | 90.4% of buyers | 86.5% of sellers


WTI: USD 39.78 (+0.81%)
Brent: USD 40.64 (+0.49%)
Gold: USD 1,211.80 / troy ounce (-0.96%)

TASI: 6,256.7 (-1.5%)
ADX: 4,298.3 (-0.8%)
DFM: 3,279.2 (-1.2%)
KSE Weighted Index: 355.6 (-0.9%)
QE: 10,229.0 (-0.5%)
MSM: 5,536.7 (+0.1%)

CALENDAR

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

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

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