El Nawawy set to quarterback TE’s 4G network bid — as chairman of TE Data?

As a very slow news week limps to a close, we wonder: Will we or won’t we? The spring meetings of the World Bank and the International Monetary Fund kick off tomorrow and run through Sunday (check out the agendas here). The big question on our minds this morning isn’t whether the assembled luminaries will help find a way out of the economic malaise (and turbulence) that’s gripping the globe, but whether the Egyptian delegation will seize the opportunity to open talks on an IMF package. We’re not holding our breath despite — or perhaps because of? — the evergreen view around the cabinet table dating back several years that “we’re doing everything the IMF would ask, anyway.” Finance Minister Amr El Garhy, Central Bank Governor Tarek Amer and International Cooperation Minister Sahar Nasr will head the Egyptian contingent. Also on the agenda, the local press tells us, is the status of the World Bank’s USD 8 bn loan package, and the answer there is even simpler: Not one penny will flow to the state’s coffers until the learned gentlemen in the House of Representatives sign off on the Ismail government’s economic program — the value-added tax, in particular.

French President François Hollande is expected in Cairo on Monday, 18 April. Hollande will be accompanied by a trade delegation of around 60 and two ministers. Among other agreements, look for a total of EUR 1 bn in arms sales as well as pacts in the fields of energy, transportation, and tourism.

The day before, German Minister for Economic Affairs and Energy Sigmar Gabriel kicks off a two-day visit to Cairo at the head of a delegation of representatives from 100 German companies and financial institutions.

Parliament will vote on the Ismail government’s agenda next Wednesday, said Speaker of the House Ali Abdel Al, Al Masry Al Youm reports. He hinted that a session would be held today and tomorrow to discuss the plan further, and rejected requests by MPs to delay deliberations until Sunday.

President Abdel Fattah El Sisi’s meeting with representatives of “civil society” was aired live on TV yesterday. During the meeting, which lasted over 90 minutes, El Sisi reiterated he was never a member of the Ikhwan and said both he and the armed forces had consistently tried to work with former President Mohamed Morsi in good faith. He added that the military is only willing to “act” if the people will it, even if the move is against him personally.

Economically, El Sisi pledged the price of basic goods will be held stable, despite exchange rate volatility. “The military and the government are responsible, that’s a promise,” he said. The state is also involved actively in megaprojects, including farms, fisheries, and agriculture initiatives. Over the next two years, 50% of all rural villages will be connected to clean water and sewage networks, El Sisi pledged. He also added that German and French investors are looking to expand in Egypt, but that FDI will not really rebound unless security and stability are restored nationwide.

Evil thoughts: In “such a challenging economic situation we could have had ‘evil thoughts’,” El Sisi said. In remarks that have so-far gone largely unreported, he also hinted that he strongly considered sending troops into Libya, saying Egypt “refrained” from “attacking a foreign country” to avenge the murder of Egyptian citizens and avail itself of the nation’s natural resources.

On the issue of the Tiran and Sanafir islands, the president expressed his desire to end the issue once and for all. The islands are Saudi’s, he said, adding that he would never give up “a grain of sand” that is Egyptian. "Egypt does not sell its land to anyone, and it does not take anyone’s land … I brought you here to reassure you about the man to whom you entrusted your land and honor. I did not take the issue personally … Please let’s not talk about this issue again," El Sisi added. He made the situation less clear-cut by saying that a parliamentary committee will be assessing the demarcation agreement with Saudi Arabia and also noted that the whole situation made him “happy” as Egyptians showed remarkable concern over the sovereignty of their land.

As for the Giulio Regeni case: “We express our condolences to his family … but want to stress that the investigation is still ongoing … and that we have an ‘Egyptian son’ who went missing in Italy,” El Sisi said. The investigation into Regeni’s murder is being handled with the “utmost transparency,” he said, blaming some Egyptians for spreading “lies” and “allegation-mongering", thereby embarrassing Egypt internationally. He also praised the historically strong relations between Italy and Egypt.

On human rights, the president emphasized the sanctity of freedom of speech and its status as a right for all. However, he issued a stern warning on the use of social media and the “evil forces in it”. El Sisi said he was ready to review the nation’s prisons and release all those found to be innocent, in the interest of striking a balance between security and human rights.

The speech has gotten very wide play in the international press, with the Guardian describing it as “often cryptic and rambling” and playing up the Regeni angle while Reuters focused squarely on the political with an emphasis on the islands and a flap over free speech caused when the president at one point refused to take a question from an MP. The Financial Times (paywall) hit the story from both Cairo and Rome, saying that the “long, defensive speech” suggested that the president was “rattled by a chorus of domestic and international criticism.” The speech, the FT said, “is unlikely to end the controversy over the death of Giulio Regeni.” The domestic emphasis of the speech, the FT quotes an Italian official as saying, “shows there’s an internal problem for him and, inside their halls of power, there is some soul-searching going on.” The Wall Street Journal has also picked up the story, while the New York Times has so far given it a pass, running with wire service coverage of the president’s remarks instead.

Al Masry Al Youm has a full review of the speech and you can watch it in full here (run time 01:32:37).

The Egyptian Financial Supervisory Authority has delayed its approval of OTMT- Beltone Financial’s acquisition of CI Capital until the Court of Appeals resolves a court case between minority shareholders in CI Capital and its parent company CIB, according to the EFSA notice obtained by Al Borsa. An Economic Court had ordered CIB (which owns 99.98% of CI Capital) to issue a mandatory tender offer to minority shareholders for outstanding shares, a ruling the bank had decided to appeal. EFSA’s notice also reportedly mandates that outstanding regulatory issues involving OTMT’s main shareholder, Naguib Sawiris, must be resolved before it can sign off on the acquisition. Reuters has picked up the decision.

OTMT has asked CIB for a second extension on the deadline to execute the transaction, sources told Al Mal. An OTMT legal advisor told Daily News Egypt that had “EFSA requested the submission of inspection documents from Beltone, such as shareholders’ ownership structure, and all documents related to the company’s acquisition deals during the past period, in order to ensure its commitment to the implementation of the acquisition offers, as well as documents about employees’ expertise within the company.”

Is El Nawawy coming back to captain Telecom Egypt’s mobile bid through TE Data? TE Data may soon have a new chief, but he’ll be an old hand. With the internet service provider mired in allegations of poor service quality and facing a potential anti-trust probe, word on the street is that former Telecom Egypt Chief Executive Officer Mohamed El Nawawy could be parachuted in as chairman. An able manager who came up through the ranks at TE Data before being tapped to run the mothership, El Nawawy was sacked by then-prime minister Ibrahim Mahlab in the spring of 2015. In what could be an exceptionally rare stroke of inspired genius in government, Al-Borsa reports that if El Nawawy agrees to return to TE, the fixed-line giant would put TE Data in the driver’s seat for its bid to obtain a 4G mobile network operator’s license. The state feels operating a 4G network is a better fit for TE Data than for TE, the piece suggests.

Yields on Egyptian debt could get higher: “In a world of negative rates and meager returns, Egypt is finding beggars are still choosers when it comes to its bond market,” Ahmed Namatalla and Ahmed Feteha write for Bloomberg. The yields on Egyptian treasuries are still rising and, as one strategist says, "we’re getting up to the territory where Egyptian yields start to get interesting, but we’re not there yet … We think yields have more room to increase.” Banque Misr’s head of treasury is puzzled, saying Egypt is guaranteeing a 5.5% return, in reference to the average yield on 12-month bills of about 11% after tax, which could come with call option that costs a premium of 5.25%. EGP valuation problems are still a concern for some foreign investors and are preventing the market from reaching the highs of the “mid 2000s when many foreigners liked the Egyptian T-Bill market."

Saudi-based giant Abdul Latif Jameel is exiting its one and only 50 MW project in Egypt due to failure to secure financing, New and Renewable Energy Authority head Mohamed El Sobky said. El Sobky denied news published yesterday that, due to government bureaucracy, the company was halting all work on some USD 700 mn in investments expected to generate 700 MW.

The Agriculture Ministry wants cabinet support for an immediate moratorium on wheat imports until the government is done buying locally grown wheat this harvest season. The ministry hopes the hiatus on imports will help curb the mixing of locally sourced wheat with imported wheat, which carries a EGP 600 per ton price difference, Al Borsa reports.

When all else fails, talk up your asset: Shareholders of Al Jawhara, an Egyptian food producer, have turned down an EGP 1.3 bn acquisition offer from an unnamed Saudi company, said Ahmed Abdel Moghny, managing director at Premiere Securities, the financial consultant on the acquisition. Both parties have agreed to an independent appraisal of Al Jawhara’s assets to determine the most appropriate offer, Abdel Moghny added. This mysterious Saudi company plans to invest EGP 500 mn on expansions upon acquiring the company, he stated. Al Jawhara owns six factories producing tea, cakes, and other snack foods. (Read in Arabic)

MOVES- Ayman Khattab was appointed President and CEO of GE for North East Africa, covering Egypt, Libya and South Sudan.

From this morning’s op-ed “Slow growth is a fact of life in the post-crisis world” in the Financial Times (paywall): “…the baseline forecast is for a slow but continued recovery, as the adjustment to the reality of lower potential growth plays out in advanced economies, and the adjustment to the commodity bust works itself out in emerging market and developing economies. It suggests that some of the scary talk, and some of the exotic policy measures being discussed, from helicopter money to large negative nominal rates, are not the order of the day. They should be kept in reserve in case bad things happen, but the expectation should be that they will not be needed.” (Oh, and “helicopter money” is itself worth reading about. Mildly fascinating, in fact. Start here.)

OPEC could deepen cuts to its forecast for global oil demand growth because of slowing “economic expansion in emerging markets, warmer weather and the removal of fuel subsidies,” Bloomberg reports. “Current negative factors seem to outweigh positive ones and possibly imply downward revisions in oil demand growth, should existing signs persist going forward,” the organization’s Vienna-based secretariat said in its monthly market report. OPEC nations are set to meet with Russia and other non-members in Doha this weekend to seal the deal on an oil output freeze on which “positive market sentiments continue to arise,” said the report.

German commodities trader BayWa sees Tunisia and Egypt as “very interesting” markets, said CEO Klaus Lutz on Monday, according to Bloomberg. BayWa is riding the M&A wave as European agriculture markets are set to see further consolidation. While grain prices are set to remain low, BayWa sees “bright spots” when it comes to boosting sales to the Middle East and North Africa. “The end of sanctions in Iran will open up opportunities, with BayWa having sold 775,000 tons of grain to the nation in the past four to five months compared with almost nothing a year earlier,” Lutz said. The target is for 1.5 mn for the current fiscal year.

King Salman’s trip to Egypt was overshadowed by the issues surrounding the Tiran and Sanafir islands, Reuters’ Lin Noueihed and Omar Fahmy wrote. "He basically established to the region that Riyadh and Cairo stand shoulder to shoulder even if they don’t agree on certain issues and that disagreement on certain issues may be annoying but not to the extent that it is upsetting the relationship in a disturbing fashion," said H.A. Hellyer, adding that the “visit was a failure in terms of Egyptian public opinion because of the islands issue … But it’s dubious to think that upset is going to snowball.”

Another evergreen story: Al-Monitor delves into the issue of religion classes in schools as the deputy head of the Free Egyptians Party parliamentary bloc Nadia Henry calls to replace the course with an alternate one on values. “Henry pointed out that the religion course did not produce clear results in changing the concepts of ethics and values in society. She also criticized the way religion is taught in schools by separating young Muslim students from Christians, which increases sectarianism.”

Global human rights protections declined last year, according to the US State Department’s annual human rights report, with Egypt listed as one of the countries adopting “repressive” steps, AP reports. The section on Egypt called out the government’s restrictive measures to investigate and shut down human rights organizations, especially those linked to the Muslim Brotherhood. The report also pointed to travel bans imposed on human rights defenders and political activists, it said, making mention of the Court of Cassation upholding a three-year prison sentences for activists Ahmed Douma, Mohammed Adel, and Ahmed Maher.

Military courts have tried at least 7,420 Egyptian civilians since October 2014, Human Rights Watch says in a lengthy report. It added that “most defendants were sentenced after mass trials that violate fundamental due process rights.”

Enterprise is barely a year and a half old, so as you might expect, we enjoy reading stories about other startups. But there’s one subtype that makes us physically ill: The “I Sleep Only Two Hours A Night And Love It” meme. The latest installment to hit our RSS feed: “Why I Wake Up at 4 A.M. Every Day,” which actually made the cut into the print edition of Inc magazine. We get out of bed at 2:35am five days a week — or work the night shift (we still debate ourselves which is worse) — because that’s what it takes to deliver by 6:05am. Not because “Starting early communicates an infectious enthusiasm to my employees, a confident dedication to my customers and board members, and a vow to myself to lead with passion.” It signals, sir, that you are a pompous, self-aggrandizing [redacted].

The piece also signals that the print edition of Inc may be joining its never very readable website in clickbait hell. The money quote: “…as a health care technology innovator intent on revolutionizing a multi-bn USD industry, I’ve come to realize that it’s far more important to be a visionary than a dreamer.”

As the kids would have said a generation ago: “Gag me with a spoon.”

Resident of the city: This short, independent Egyptian film by Adham Elsherif is told from the perspective of the leader of a group of three stray dogs living in downtown Cairo. The movie is pretty enjoyable and charming if one likes dogs, but if you are in any squeamish about watching dogs, how should we say, “mark their territory” over and over and over again, this video is not for you. You’ve been warned. If you then try to write in to complain, you’re not going to have anyone to blame but yourself. But really, it’s a good movie. (Watch in Arabic, running time: 16:16)

Member states of the Agadir Agreement have approved an agreement to share information electronically among themselves, Al Masry Al Youm reported. Morocco’s ambassador to Egypt said he hopes the customs authorities in member states cooperate more effectively and strengthen mutual regulations.

Trade and Industry Minister Tarek Kabil insisted once again that the terms of the QIZ agreement be reviewed when AmCham sends a door-knock mission to the US in 17 April, according to Al Shorouk. As with previous trade delegations sent, Kabil wants the mission to ask for a reduction in the percentage of the minimum Israeli component to 8% from 10.5% currently and request expanding the agreement to six new zones. The mission will consist of 34 American companies operating in Egypt.

Six solar energy investors have sent requests to the Egyptian Electricity Transmission Company (EETC) to be granted land to build more solar energy farms in Egypt, Al Borsa reports. Lamya Youssef, the general manager for renewable energy projects at EETC, told the paper their requests would be reviewed next week. The companies are contracted to construct build solar farms linked to the national grid under the feed-in tariff, under which the plots would be provided on a usufruct basis. (Read in Arabic)

Russia’s Rosatom said it acted as a partner and co-organizer of the Nuclear Energy Week event held at the University of Alexandria. The company said it also held a seminar dedicated to leading Russian nuclear technologies within the framework of the week and presented an exhibition dedicated to key facts on the company and its unique advantages on the global nuclear technologies market. Rosatom had reached an agreement with the government to build a nuclear power plant in Daba’a, west of Alexandria. (Read)

Iraq inaugurated the Basra-Nasiriya USD 150 mn pipeline, which was built by Egypt’s Petrojet. Al Masry Al Youm says the pipeline has a capacity of 3,000-4,000 tonnes per day and is 202 km long. (Read in Arabic)

The Water Resources Ministry plans to irrigate 400k feddans in North Sinai using water supplied by Al-Salam Canal, minister Mohamed Abdel Aati said. Some 85k feddans have already been allocated to agriculture investors who are contractually obligated to invest EGP 4.789 bn into the plots, says Abdel Aati. (Read in Arabic)

Saudi-owned food retail chain Panda won an auction held by the Internal Trade Development Authority for a 9,091 sqm land plot in Obour City. This brings the company’s total land plot tally to three, with one in Nasr City and another in the Qaha governorate, on which it plans to build food retail outlets within three months. Panda also signed an agreement with the the government to help develop subsidized-retail outlets in Alexandria and train their staff. (Read in Arabic)

Juhayna is looking to fund 50% of its 2016 capex spending through debt, with EGP 250 mn being allocated to overhauling machinery and acquiring new filling lines, EGP 190 mostly to expand its dairy farms, and EGP 160 mn to expand its fleet and distribution centres, according to a Pharos report picked up by Al Borsa. The company also plans to gradually increase selling prices by 6-7% this year, noting that its sales lagged in 2014 when it hiked prices amid pressure on the cost of inputs. The news follows a similar report from Domty that it would implement a price hike phased in with a 6% jump in April and a 5% rise in May, according to Al Mal’s coverage of a Beltone research report.

Prime Minister Sherif Ismail has approved the planting of different species of cotton and the export of long-staple cotton crops to preserve short-staple cotton supplies for the domestic textile industry, which has been suffering of late due to dwindling cotton supplies, Al Shorouk reports. Ismail also allocated EGP 4 mn to the Cotton Research Institute to fund research on developing different strands of cotton. (Read in Arabic)

The Tourism Development Authority (TDA) plans to tender 50 mn sqm of land divided into 73 parcels for tourism projects through the General Authority for Investments and Free Zones. The land will be in the Red Sea governorate, Ras Mohammed in Sinai, the North Coast, among other areas. The land has been priced at USD 10-53 per sqm will be tendered some time this month, TDA sources tell Al Mal. The announcement follows the official launch of the land sale committee, which will coordinate land tenders from different government bodies.

The government’s committee to restore illegally acquired land headed by former PM Ibrahim Mahlab has begun taking steps to legitimize informal ownership and reclamation of land, provided that the occupants can prove they are developing it. Land occupied must also not be part of the New Urban Communities Authority’s plans. The committee has set up procedures for these of yet unlawful occupants to settle their cases and legally acquire possession the land. The committee is also deliberating to auction off land seized from unlawful occupants. (Read in Arabic)

President Abdel Fattah El Sisi ordered Prime Minister Sherif Ismail to bring the deadline for local elections forward, according to a statement from the office of the presidency picked up by Al Shorouk. Local elections had been a key feature of the administrative reform pillar of the national plan and tied to the Local Administration Act. (Read in Arabic)

The government will conduct a survey of 1,300 public and private sector business in July to find out what the challenges facing the business climate are and how that climate has shifted since 2011, said International Cooperation Minister Sahar Nasr. The government is hoping to secure a USD 500 mn facility from the World Bank to fund development projects in Upper Egypt by June. Nasr added that Egypt is expected to sign for an EUR 80 mn grant during President François Hollande’s visit to help connect gas to homes, Al Borsa reports. (Read in Arabic)

The government will form a holding company to manage development projects in Sinai and will list up to 30% of its shares some time in the future, announced Sinai Development Authority head Shawky Radwan. Majority shareholders of the joint stock company, which will have an authorized capital of EGP 10 bn and an issued capital of EGP 1.4 bn and will headquartered in Al Arish, will include the National Investment Bank, the National Service Projects Organization, and Sinai governorate. (Read in Arabic)

The domestic press is pretty fascinated this morning with news out of Israel that the Israeli police force has for the first time appointed a Muslim to its second-highest rank. You can catch the original story in the Jerusalem Post or see how it’s playing this morning on the front page of the digital edition of Al Masry Al Youm.

The faint-hearted need not apply: Libya is seeking Egyptian workers to be employed in areas under the central government’s control, Al Mal reported. Manpower Minister Mohamed Saafan said Egypt is willing to provide workers as long as their security and rights are preserved.

Telecom Egypt is distributing a dividend of EGP 0.75 per share, the company said. The dividend distribution date is 28 April.

Oriental Weavers is paying a dividend of EGP 0.50 per share on 28 April. Last year the company paid a dividend of EGP 0.40 per share, according to a company statement.

The Cairo Appeals Court ruled in favor of business tycoon Ahmed Bahgat, who owns Dreamland Group, in his case against the National Bank of Egypt and Banque Misr. The original verdict would have seen Bahgat relinquish assets worth EGP 3.238 bn to both banks.