Tuesday, 26 April 2016

25 April protests fizzle as “Shut Up your Mouse Obama” woman returns, promises Pyramids and Sphinx to KSA

TL;DR

What We’re Tracking Today

The Central Bank of Egypt is holding its weekly FX auction today, at which it’s expected to inject USD 120 mn into the market. Despite speculation by some sources, the CBE did not hold a one-off special FX auction on Sunday.

Bahrain’s King Hamad Bin Issa Al Khalifa’s visit to Cairo at the head of a ministerial and business delegation made up of 40 companies is expected to kick off the Bahraini-Egyptian Business Forum. The king is scheduled to meet with President Abdel Fattah El Sisi in Ittihadiya today to discuss regional affairs and strengthening bilateral trade and political ties, Al Masry Al Youm reports. Twelve agreements, MoUs, and declarations of intent are expected to be signed, among them: An MoU granting Bahraini investors 5,000 feddans in the 1.5 mn feddan project; cooperation agreements on fertilizer projects; and declarations of intent for a pharmaceutical and cosmetics plant and distribution facilities. According to statements by Egyptian members of the Egyptian-Bahraini Business Council, which will have its second meeting during the visit, Bahrain has signalled that the country will open direct flights between Manama and both Sharm El Sheikh and Hurghada, Al Ahram reports.

Supply ministry to ink agreements with retail store owners: Supply Minister Khalid Hanafy is expected to sign cooperation agreements with a number of retailers and the Internal Trade Development Authority to build retail outlets and logistics centers across Egypt, Al Mal reports.

What We’re Tracking This Week

The Central Bank of Egypt is poised to increase rates by up to 100 basis points on Thursday, some analysts say; the standard Reuters poll is yet to appear, so far as we can tell. On 17 March the CBE’s Monetary Policy Committee raised rates 150 basis points, upping the overnight deposit rate to 10.75% and the overnight lending rate to 11.75%.

On The Horizon

Next weekend is a four-day break for Coptic Easter (Sunday), Sham El Nessim (Monday), and Labour Day (also Sunday), all rolled into one.

As for conferences:

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Speed Round

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25 April protests fizzle; security forces used teargas to disperse several hundred protesters in Dokki; handful arrested. Security forces used tear gas yesterday to disperse protesters who were demonstrating against the agreement signed by Egypt and Saudi Arabia on 8 April to return the Red Sea islands Tiran and Sanafir to Saudi Arabia, according to Reuters. A reporter from Ahram Online on the scene said several protesters were arrested, with Bloomberg putting the number at 10. Al Masry Al Youm writes that 23 were arrested in Giza after dispersing demonstrators in Boulaq Al Dakroor. Demonstrators had scattered to Dokki and other areas after security moved “swiftly” on Monday to lock down the original downtown meeting point. President Abdel Fattah El Sisi urged Egyptians on Sunday to stand with authorities to secure state institutions, vowing that efforts by “evil” forces to destabilize the country would fail. “We have paid a high price to get where we are now, and we will not let anyone harm Egypt’s security, stability and institutions,” El-Sisi said in a televised speech. Egypt’s Press Syndicate condemned on Monday what it called "harassment attempts" by "regime supporters" to storm its headquarters, Ahram Online reports. "Some people dressed like central security forces tried to storm the syndicate headquarters," the syndicate said in a statement, adding that the assailants "were let through by police even though all roads around the syndicate were locked down in order to prevent protests." Over the weekend, dozens were arrested ahead of the planned “Egypt is not for sale” protests. The Financial Times, Wall Street Journal, and BBC have coverage in the foreign press.

Meanwhile, Saudi Arabia’s Shoura Council unanimously approved on Monday the draft border demarcation agreement signed between Saudi Arabia and Egypt, Ahram Online reports. “Several members of the council spoke to the importance of the agreement in the frame of the "special relationship" between the two countries,” according to the paper.

Hisham Ramez may not become the next managing director of CIB. Prime Minister Sherif Ismail issued a decree on Sunday appointing Egypt’s representatives to the Arab International Bank (AIB), with Hisham Ramez presented as the candidate to become the bank’s chairman, Reuters reports. Ramez, who stepped down as central bank governor last fall, was poised to return to CIB, where he was to have become the bank’s deputy chairman and managing director in charge of day-to-day operations, according to a statement from the bank. At the time of Ismail’s announcement, CIB had yet to receive the CBE’s clearance on Ramez’s appointment. The prime minister also appointed CBE Deputy Governor Gamal Negm to AIB’s board and Banque Misr Chairman Mohamed Barakat as deputy chairman and CEO, Daily News Egypt added. (Barakat was not among those we figured would be turfed from office under the recently imposed CBE term limits.) The AIB was established in 1974 under an international treaty concluded by Egypt, Libya, Oman, Qatar, and the UAE, aiming to “carry out all the banking, financial and commercial activities related to the projects of economic development and foreign trade, especially for the interest of the member states, other countries and the Arab countries.”

El Sisi has economic team in for talk as EGP neared 12 to the USD on the parallel market, few details released: President Abdel Fattah El Sisi met on Sunday with the prime minister as well as the key members of the cabinet economic group and the governor of the central bank. The official readout from the meeting included no detail, noting that Finance Minister Amr El Garhy, CBE governor Tarek Amer and International Cooperation Minister Sahar Nasr briefed the president on the World Bank and IMF’s spring meetings as well as their sit-downs with “American investment funds, where they showcased Egypt’s economic programs and mechanisms adopted to create an environment conducive to investment. This received the appreciation of financial institutions and investment funds which expressed interest in the economic developments currently underway in Egypt and ways to ensure optimal benefit from the investment opportunities offered in the Egyptian market.” The president gave El Garhy “instructions to enhance the state’s efforts to combat trafficking and tighten control to prevent access [to the Egyptian market for] products that do not comply with the standards of the Egyptian market and harm the national economy.” Trade and Industry Minister Tarek Kabil spoke on industrial development, and El Sisi “stressed the need to enhance coordination among the various ministries and authorities concerned to facilitate procedures necessary to start up trade and investment activities, and offer an enabling environment to attract more investment and generate jobs.” Also in attendance were the ministers of planning and administrative reform, supply and domestic trade, interior, public enterprise and investment.

The UAE will make a USD 2 bn deposit at the CBE “within days” after the Easter and Sham El Nessim holidays, sources told Al Masry Al Youm. The tenor of the deposit will not be shorter than a year and will carry an interest rate of 1.0-1.5%, the sources added. The UAE is expected to deposit USD 2 bn at the CBE, included within a USD 4 bn support package; the remaining USD 2 bn will take the form of development assistance.

Al Ahram was “informed” that a total influx of USD 5 bn will reach the CBE within the next few days, including the USD 2 bn from the UAE. Sources also added preliminary agreements signed with the Saudi Fund for Development that included injecting USD 8 bn in Egypt will be “activated.” In addition, there are “final-stage negotiations” with the People’s Bank of China to inject funds in Egypt “soon,” but Al Ahram did not specify the amount or the timing of the funding.

Meanwhile, the EGP gained strength in the parallel market on Monday with a rate of EGP 10.40 to USD 1 after having slumped to EGP 10.70 on Sunday, according to Al Masry Al Youm. Monday’s rate should not be taken at face value as most FX exchanges were closed for the Sinai Liberation Day holiday.

Tourism revenues down 66.7% y-o-y in 1Q2016… Tourism revenues hit just over USD 500 mn down from USD 1.5 bn a year earlier, economic adviser to the Tourism Ministry Adla Ragab told Reuters, with just 1.2 mn tourists coming to Egypt in the same quarter, down from 2.2 mn a year earlier. While tourism revenues had taken a hit since the ouster of former President Hosni Mubarak in 2011, it was the Metrojet crash last October that dealt the final blow to the industry after Russia halted flights to Egypt and several other nations cut off flights to Sharm El Sheikh. Egypt is looking to bring in 12 mn tourists by the end of 2017 “through a plan that includes increasing the presence of national carrier EgyptAir abroad,” tourism minister Yehia Rashed said in a recent interview with Reuters.

…and there’s no light at the end of the tunnel: Russian President Vladimir Putin believes Egyptian authorities still have “a lot to do” to secure Russian tourists in the country, he said on Monday at a meeting of the All-Russia People’s Front, according to Sputnik. “For resuming flights to Egypt, there is a need to find the way of checking passengers, luggage and food onboard jointly with the country’s authorities to ensure security of Russians,” TASS reported Putin as saying on 14 April.

Qalaa Holdings reports over EGP 1.0 bn loss in FY2015: Qalaa Holding reported an EGP 1,155.4 mn loss after minority interest in FY2015 compared to EGP 855.6 mn the previous year due to non-cash charges worth EGP 1.08 bn in the year ending 31 December, according its earnings release (pdf). Meanwhile, the company reported a 27% y-o-y increase in revenues to EGP 8,214.6 mn in FY2015. The company pushed forward with its divestment plan, generating total proceeds from the exit of eight assets during 2015 of c EGP 2,400.0 mn, up from about EGP 900.0 mn last year. Chairman and Founder Ahmed Heikal noted that ERC, the company’s USD 3.7 bn petroleum refinery, will begin production in 2017. Added Co-Founder and MD Hisham El-Khazindar: “Against this backdrop, management views total provisions and write-downs booked during the final quarter of the year as a prudent clean-up. With minor delays in our divestment program having hindered our return to profitability in FY2015, we opted to book these impairments now and head into 2016 having nearly finalized the restructuring of our financial statements. We believe it was essential to take these charges prior to the start of production at ERC and as TAQA Arabia pursues significant new contracts that we expect will allow it to sustainably contribute to our top-line growth and bottom-line profitability going forward.”

Orascom Construction (OC) reported a full-year consolidated net loss of USD 347.8 mn impacted by a one-off loss related to the construction of Iowa Fertilizer Company, despite exceptionally strong growth in MENA. OC is emphasizing strong fundamentals, with its backlog up 14% to USD 6.7 bn as it signed new contracts worth USD 4.8 bn in Egypt and the US, according to the release. The company expects to return to profitability in 1Q2016 with estimated revenue of approximately USD 900 mn and positive consolidated EBITDA, according to CEO Osama Bishai. Notably, the company’s pro-forma backlog including its 50% stake in BESIX increased 10% to USD 8.4 bn. On Saudi Arabia, where many contractors are running into payment issues, Bishai noted that, “While we are facing a challenging market environment in Saudi Arabia that has affected our project execution and profitability, we are working on mitigating our exposure there and are focused on executing our current projects while remaining selective on new opportunities.” Of particular interest to investors are suggestions of a new element in the company’s business strategy, as Bishai noted: “Furthermore, we continue to work on creating a sustainable concessions portfolio alongside our [engineering, procurement and construction business], building both materials and property management business units to support our long-term growth and provide additional recurring cash flows.”

Saudi Arabia’s Shoura Council reportedly tabled on Sunday deliberations into imposing taxes on remittances by foreign workers, Al Masry Al Youm reports. The proposal was presented by council member Hussam Al Ankary based on a report by the council’s finance committee. According to a report by the Saudi Arabian Monetary Agency, remittances in 2015 from around 11 mn foreign workers grew 4% to SAR 157 bn. The proposed tax is part of a number of Saudi policies that hope to cut remittances including implementing a US-style green card system for immigrants. The discussion comes as Deputy Crown Prince Mohamed bin Salman outlined in a nationally televised interview yesterday Saudi Arabia’s “Vision 2030” document, which envisions a post-oil future. Our GCC edition has more on that topic this morning, or see The Macro Picture, below.

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The Macro Picture

Saudi officials have revealed Deputy Crown Prince Mohammed bin Salman’s Vision for the Kingdom of Saudi Arabia (tap here for Arabic, here for English versions of the official document) that includes a plan to cut reliance on oil and the USD 2 tn listing of state-owned Aramco. According to the plan, after Saudi Aramco is listed, its ownership will then be transferred to the state’s Public Investment Fund, which will help bolster it into a sovereign wealth fund valued at up to USD 3 tn. “We have an addiction to oil . . . this is dangerous,” the Financial Times (paywall) quotes the prince as saying in a televised interview. Bloomberg also has a solid roundup of the plan.

It’s central bank time again. The U.S. Federal Reserve is set to announce its latest monetary policy decision tomorrow, with most expecting no change, according to the FT (paywall). The Bank of Japan meets on Thursday, facing “intense pressure to ease monetary policy” according to the FT (paywall) as a strengthening JPY puts the country’s target for 2% inflation on the line. Euro-area data, including 1Q2016 GDP, is expected on Friday and could put pressure on Mario Draghi’s easing policies at the European Central Bank.

Egypt in the News

Reuters under fire? Aside from news coming out of the 25 April protests, the foreign press also caught wind of the case reportedly filed against Reuters Cairo bureau chief Michael Georgy over a story implicating Egyptian security forces in the detention of Italian student Giulio Regeni, on which we reported on Sunday. The possibility that the government would consider high-profile attack on the foreign press as it did with Al Jazeera is a concern, the Guardian quotes HA Hellyer of the London-based Royal United Services Institute as saying. “[Egypt] will be rather cautious about inviting that sort of hassle – but that’s not to say they can’t find other ways to make things difficult for Reuters to operate,” he said. “I’m sure the Reuters team is in danger," Sherif Mansour, the Middle East and North Africa Program Coordinator at the Committee for the Protection of Journalists told VICE News. “There are threats being made against them in very high places.” A member of the prosecution service has confirmed that while a complaint against Reuters was lodged by a police commander, the PG’s office is still investigating and has yet to reach any conclusion or summon Georgy for questioning. The original Reuters story at the center of the controversy is here.

The latest polemic against President Abdel Fattah El Sisi from a former member of the State Department moved over to the think-tank side is out now. Read it here, if you’re so inclined.

Image of the Day

Floyd “Money” Mayweather Jr. continued his post-retirement world tour by making a short visit to Egypt, where he took this picture at the Giza Pyramids. Mayweather, arguably the greatest boxer of his era, retired last year with an undefeated record of 49-0 and recently commented on his life after the ring saying, “Whoever said I wouldn’t enjoy retirement couldn’t be anymore wrong. How can you not enjoy the luxury of flying out 20 people for a dream trip around the world?”

Worth Watching

Someone released the “Shut Up Your Mouse Obama” woman from her dungeon, where she had until recently been kept chained at the ankle. Purpose of release? To offer King Salman the Pyramids and the Sphinx. (Watch in Arabic, running time: 15 seconds) Work quickly to cleanse your palate with the song of the seahag. (Listen in Gibberish, running time: 3 minutes)

Diplomacy + Foreign Trade

The Foreign Affairs Ministry said Czech Industry and Trade Minister Jan Mládek is on a visit to Egypt that began yesterday and will last until 30 April. Mládek is heading a business delegation to the country and will meet with his Egyptian counterpart Tarek Kabil as well as Civil Aviation Minister Sherif Fathi. As part of the visit, Egypt signed two economic cooperation agreements with Czech institutions, Al Shorouk reported. One was signed between the Social Fund for Development and a Czech SME authority and the other is between GAFI and Česká exportní banka, the Czech export bank. The two countries aim to increase the volume of bilateral trade to EUR 1 bn by 2020, enhance technical cooperation, and promote tourism. Side note: The country recently changed its English name to “Czechia” instead of the Czech Republic, because who has time for one extra word. (The Economist has more on the name change).

Agriculture Minister Essam Fayed agreed to sign agriculture cooperation agreements with Bulgaria at a meeting with Bulgaria’s ambassador Rumen Petrov on Monday, Al Mal reports. The agreements will be signed upon the completion of the requisite studies, said Fayed. The meeting also explored cooperation on wheat production and trade between Bulgaria, Egypt, and Sudan.

Energy

Selling Cypriot gas to Egypt at current price is “commercially challenged,” one expert says

Plans to sell natural gas from Cyprus’ block 12, in which BG Group is a partner, to Egypt for liquefaction is “commercially challenged,” energy expert Charles Ellinas told In Cyprus. The price environment is not conducive to selling gas for liquefaction currently, and Egypt will not require the gas for domestic consumption. “Egypt will be able to cover its needs by 2020,” he notes, as Zohr becomes fully operational. The alternative options for Cyprus, Ellinas suggests, are a floating LNG plant or a pipeline to Turkey. (Read)

Aminex reportedly has interest in Petroceltic’s Egyptian assets

Irish oil and gas company Aminex has reportedly expressed interest in Petroceltic’s Egyptian assets, the Irish Independent reported. Aminex declined to comment, but it expected to begin producing from a site in Tanzania, netting it USD 10-15 mn a year and providing it with “a platform to pursue the other prospects in the company’s portfolio.” The paper adds that “T5 Oil & Gas, a group founded by some ex-Tullow Oil directors, had previously expressed an interest in the Petroceltic assets.” (Read)

EGPC looking to buy 138k tonnes of gasoil

EGPC has issued a tender to buy up to 138k tonnes of 0.1% gasoil in May, Reuters reported. “The company is looking for two cargoes of gasoil with a sulphur content of [0.1%] delivered to the port of Suez, and two delivered to Alexandria or El Dekheila,” the newswire added. (Read)

Eni offers to build 180 GWh solar power plant for the Balaeem oilfield

Eni has offered to build a 180 GWh solar power plant to supply power to the Balaeem oilfield and provide excess power to the national grid, according to an Oil Ministry statement published on Youm7. The Balaeem field will need 90 GWh while the remaining power will be used to supply other Oil Ministry sites. Oil Minister Tarek El Molla has agreed to form a committee with the Oil Ministry and Eni to study the project at a meeting with Oil Minister Mohamed Shaker and Eni’s senior VP for North Africa Adriano Mongini. The meeting also looked into providing gas supplies to the three Siemens power plants of Burullus, Beni Suef, and the new capital. (Read in Arabic)

Edison drills first exploration well in its concession in second half of 2016

Edison will drill the first exploration well in its Mediterranean concession early in the second half of 2016, sources from EGAS told Al Shorouk. The seismic scanning of the concession, adjacent to Zohr, are promising and indicate large reserves of natural gas, the source added. Edison are looking to complete the analysis of the seismic scans so they can announce the size of the reserves, he added. (Read in Arabic)

Infrastructure

Actual operations to dig tunnels underneath the Suez Canal to begin in June

Tunnel digging operations underneath the Suez Canal are expected to begin in June, Kamel El Wazeer, the head of the armed forces’ engineering authority said. The tunnels are expected to be completed within 18 months. El Wazeer said the operations will use a German-made giant tunnel-boring machine, digging tunnels with an internal diameter of 11.4 meters. (Read in Arabic)

Wadi El Natroun-Alamein road repairs will be completed on Thursday

The General Authority for Roads and Bridges will complete the Wadi El Natroun-Alamein road repairs and expansion by this Thursday at a total cost of EGP 1.9 bn, Amwal Al Ghad reported. The project involves repaving the road and adding an extra lane on both sides, said company Chairman Adel Turk. The road was shut down for the renovations in July 2015 to complete construction that began in September 2014. (Read in Arabic)

Egyptian National Railways negotiates EUR 600 mn loan

Egyptian National Railways (ENR) is negotiating a EUR 600 mn loan with the French Development Agency to finance the section C of the fourth phase of the Third Metro line, between Nozha Station 1 and Cairo Airport, company chairman Tarek Gamal told Al Mal. ENR had tasked by direct order French company VINCI to complete sector B of the fourth phase of the Third Metro line. (Read in Arabic)

Basic Materials + Commodities

Gov’t bought 57,000 tonnes of local wheat since 15 April

The Supply Ministry has bought a total of 57k tonnes of local wheat from farmers since the start of its purchasing season on 15 April. Industry players have claimed that Egypt’s record purchase last year of 5.3 mn tonnes was the result of falsely labelling foreign as domestic, Reuters reports. The claims were denied by the ministry, but it “nonetheless announced a series of new measures this month to tighten control of wheat circulation during the harvest that include prohibiting the internal trade of wheat during the procurement season.” (Read)

El Sisi orders expansion of bread-point system in June

President Abdel Fattah El Sisi has ordered the government to increase food subsidies by expanding the bread-points system during his speech for Sinai Liberation Day. Supply Minister Khalid Al Hanafy, who joined El Sisi during the opening of the grain storage facilities, said the expansion would take place in June. The expansion of the bread points system is part of a strategy to ease the inflationary effects of the value-added tax, Al Mal reports. (Read in Arabic)

Manufacturing

Steel manufacturers refuse to pay gas bills, EGAS threatens to cut supplies

Steel manufacturers have refused to pay their natural gas bills, EGAS sources told Al Ahram. EGAS is yet to receive an official notification of the cabinet’s decision to reduce the gas prices to steel manufacturers from the original rate USD 7 per mmBtu and says it cannot begin legally charging the factories a lower rate until then. On the other hand, the factories are refusing to pay according to the old rate, saying that the should be charged at the USD 4-5 per mmBtu mandated by the cabinet decision. (Read in Arabic)

Real Estate + Housing

Abraj Misr mortgages land to AAIB in order to secure EGP 600 mn loan

Abraj Misr agreed to mortgage the land allocated for its The Gate project to the Arab African International Bank (AAIB) to secure an EGP 600 mn loan. Al Shorouk says the loan is required to pay for the land value owed to Export Development Bank of Egypt and finance The Gate’s project development. The project is expected to entail an EGP 4.5 bn total investment. (Read in Arabic)

Tourism

Swiss-Belhotel signs agreement to manage Marseilia Group-owned hotel

Hospitality-management company Swiss-Belhotel International signed an agreement with Marseilia Group to manage a hotel in Alexandria. “Swiss-Belhotel Marseilia will be a new destination on Alexandria Beach when it opens in 2018, offering more than 200 four-star international-standard hotel rooms and apartments, over 500 residential units, and a host of culinary and retail options for guests,” according to the statement. (Read)

EgyptAir to use bigger aircrafts for Joburg flights

EgyptAir will upgrade the aircraft used in its Cairo-Johannesburg route to an Airbus A330/300 instead of the Airbus A330/200, Al Masry Al Youm reported. The A330/300 can carry up to 301 passengers, compared to the 268-passenger limit of the A330/200, EgyptAir CEO CEO Hisham El Nahas said. The upgrade will take place from 11 May. (Read in Arabic)

Automotive + Transportation

Agreement with Thales on hold as Cairo Metro can’t secure funding

The agreement signed with Thales to deliver 850 metro ticket machines is on hold as the Cairo Metro was unable to secure EUR 4.5 mn in funding, a company source told Al Shorouk. The funding was supposed to cover the initial tranche of the financial agreement. The agreement with Thales was signed last October and has not yet been activated due to its failure to provide the necessary funding. (Read in Arabic)

Egyptian Customs Authority imposes indicative pricing on Isuzu car imports

The Egyptian Customs Authority (ECA) is imposing indicative pricing on imported Isuzu cars to end what it claims are discrepancies between import declarations and sale prices, Daily News Egypt reported. The cars are indexed into three categories: USD 12,000, USD 13,000, and USD 15,000. The new prices came after General Motors Egypt filed a complaint against a USD 6,000 discrepancy between the import and sale value of Isuzu cars. As did BMW and Mercedes Benz last year, the company is reportedly filing a complaint with the Finance Ministry, claiming the ECA does not have the authority to force it to liquidate stock at set prices. (Read)

Banking + Finance

Make opening bank accounts for foreigners easier, CBE urges banks

The CBE is urging local banks to make opening new bank accounts for foreign non-residents easier, Al Shorouk reported. The facilities urged by the CBE do not mean that banks should waive the required documentation and the “know-your-client” protocols. A source said the biggest benefactors of the decision are expected to be Syrians, Iraqis, Yemenis, and Libyans in Egypt currently as most of them face difficulties obtaining official residency status. (Read in Arabic)

Egyptian Arab Land Bank contributes EGP 100 mn to joint loan to finance Suez Canal tunnels

The Egyptian Arab Land Bank board has approved an EGP 100 mn contribution to a joint loan to finance the Suez Canal tunnels. The EGP 3 bn loan is managed by NBE and Banque Misr for Orascom Construction and the Arab Contractors to finance the construction of three tunnels that pass under the Suez Canal, sources told Al Borsa. The banking consortium includes eight banks, and the final agreement is expected by the end of May, the source added. (Read in Arabic)

NBE looking to borrow USD 200 mn annually to refinance farmers

NBE is looking to borrow USD 200 mn annually from international lenders to finance agricultural projects, Al Borsa reported. NBE’s agricultural sector portfolio has hit EGP 3 bn as of last March, sources told Al Borsa. NBE has EGP 300 mn in loan agreements with the Social Fund for Development to finance agricultural projects. The CBE had allocated EGP 5 bn toward financing agricultural and industrial projects as of March 2016. (Read in Arabic)

Other Business News of Note

State to spend EGP 200 mn on producing Ramadan mosalsalat

The Egyptian Radio and Television Union (ERTU) has allocated EGP 200 mn toward new productions in Ramadan, Al Borsa reported. The production departments at the ERTU have faced financial troubles due to reduced advertising revenues, bringing the budget for Ramadan programming down to EGP 200 mn from EGP 380 mn last year. (Read in Arabic)

Legislation + Policy

Bankers submit proposals to amend banking laws

A number of banks have submitted proposals to amend the Central Banking Act, Al Borsa reported. Head of the legal committee of the Federation of Egyptian Banks Rokaya Riyad said the prime demand is to amend a provision to allow banks to keep records electronically. Riyad added that banks are seeking provisions to protect distressed borrowers from state entities seeking repayment and to prioritize repaying commercial banks. Also required is a new bankruptcy law to protect creditors and debtors alike. Other calls for changes to the legislation include clarifying the supervisory role of the CBE over banks operating in Egypt. (Read in Arabic)

Egypt Politics + Economics

House Industry committee looks into giving Industrial Development Authority sole purview to grant industrial licenses?

The House Industry Committee is seeking to make amendments to the Investment Act, said the committee’s Deputy Chairman Mohamed Saad Badrawy. While details on what these changes might be were not provided, the move may be an attempt to grant the Industrial Development Authority (IDA) the sole right to license and grant industrial permits, Al Borsa reports. This would strengthen legislation approved by the cabinet, which would give the IDA that authority in the hopes of reducing the time to obtain industrial permits to 30 days. The committee also plans to question the ministers of industry, investment and environment on delays in obtaining licenses, the continued lack of credit available to SMEs since the declaration of the president’s SME initiative, and delays in implementing projects. These would presumably include the 1,000 factories project. (Read in Arabic)

House ICT committee planning new legislation and budget increases

The House ICT Committee is planning new legislation that will strengthen protections against identity fraud and data theft, promoting data security, regulate e-commerce transactions, and promote the development of the sector nationwide, said committee head May Al Batran. The committee is also planning to increase the ICT sector’s allotment in the budget, she tell Al Shorouk. (Read in Arabic)

Exporters Division launches export initiative amid USD 200 mn reduction in exports to the EU in 1Q2016

The Exporters Division of the Federation for Egyptian Chambers of Commerce has launched an initiative to help bolster shrinking exports by providing free voluntary consulting services to exporters and conducting reports and studies on demand for Egyptian goods and services abroad. The initiative also hopes to launch an awareness program that will educate industries and farmers on the quality and standards required for Egyptian exports. The move comes as Egyptian exports to the EU fell to USD 1.6 bn in 1Q2016, from USD 1.8 bn in 1Q2015, said division member Abdel Hamid Amer. (Read in Arabic)

On Your Way Out

BeIN Sports, CNE dispute continues: The grace period given by BeIN Sports to Cable Network Egypt regarding the recent dispute over subscription pricing ended yesterday, Al Mal reported. BeIN Sports has threatened to cut transmission to Egypt if the case is not resolved. The dispute follows BeIN Sports requesting to increase the cost of its subscription to over EGP 2,000 from the current EGP 1,200 per year on the Nilesat satellite, while offering new entertainment channels on Sohailsat for a lower cost than Nilesat.

The Red Sea Ports Authority has reversed a decision to temporarily ban receiving luggage at Safaga Port, following a customs employees strike that extended for three weeks and left the port with unprecedented traffic, Al Borsa reported.

The markets yesterday

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USD CBE auction (Tuesday, 19 April): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Monday, 25 April): 10.40 (-0.40 since Saturday, 23 April, Al Masry Al Youm)

EGX30 (Sunday): 7,743.41 (-0.49%)
Turnover: EGP 364.75 mn (16% below the 90-day average)
EGX 30 year-to-date: 10.52%

THE MARKET ON SUNDAY: The EGX30 kicked off the first trading session of the week on a strong negative note as it fell 0.9% twenty minutes into the session. Later in the day, the selling pressure softened as the index managed to pare some of its early losses and end the day 0.49% down. Orascom Construction, Arabia Investments, and Credit Agricole were among the EGX30’s top gainers while Global Telecom, Edita, and East­ern Company were among the index’s worst performers. At a turnover of EGP 364.75 mn, local investors were the sole net sellers. Regionally, the TASI was up 0.6% and ADX 0.3% while the DFM fell 0.7%.

Foreigners:Net long | EGP + 2.9 mn
Regional:Net long | EGP + 19.1 mn
Domestic:Net short | EGP – 22.0 mn

Retail: 79.6% of total trades | 81.0% of buyers | 78.2% of sellers
Institutions: 20.4% of total trades | 19.0% of buyers | 21.8% of sellers

Foreign: 9.5% of total | 9.9% of buyers | 9.1% of sellers
Regional: 8.4% of total |11.0% of buyers | 5.8% of sellers
Domestic: 82.1% of total | 79.1% of buyers | 85.1% of sellers

WTI: USD 42.94 (-1.81%)
Brent: USD 44.73 (-0.84%)
Gold: USD 1,238.60 / troy ounce (+0.70%)

TASI: 6,868.1 (+0.6%)
ADX: 4,633.2 (+0.3%)
DFM: 3,557.5 (-0.7%)
KSE Weighted Index: 364.0 (-0.4%)
QE: 10,184.5 (-0.8%)
MSM: 5,926.1 (+0.6%)

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Calendar

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.

04-07 May 2016 (Wednesday-Saturday): The Cairo Food Africa Exhibition, Cairo International Convention and Exhibition Center, Cairo.

07-08 May 2016 (Saturday-Sunday): Techne Summit, Bibliotheca Alexandrina, Alexandria, Egypt. Register here.

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

16-17 May (Monday-Tuesday): Egyptian-Bahraini committee meets, Cairo.

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

02-03 June (Thursday-Friday): The first annual EBRD Research Symposium on The Economics of the Middle East and North Africa, EBRD headquarters, London, UK.

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 exhibition, Cairo International Convention Centre, Cairo

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