Tuesday, 3 May 2016

God help us all, but daylight savings time is coming back — again.


What We’re Tracking Today

It’s PMI day in MENA: The Emirates NBD / Markit purchasing managers indexes for Saudi Arabia, the UAE and Egypt will be out this morning at 05:30 UTC today. That’s after we dispatch, so hit this link for the reports when they’re released.

Daylight saving is coming back — AGAIN. At least according to the Ismail cabinet. We will once again experience the joys of our smartphone clocks losing their little artificially intelligent minds on 7 July when it comes into effect again, according to Ahram Online. Cabinet last brought daylight savings time back in 2014 (forcing us to change the clocks four times due to Ramadan) before turning the (metaphorical) clocks back to 2011, when daylight savings was scrapped in the wake of the 25 January revolution. If we remember correctly, this means we’ll ‘spring forward’ on 7 July (advance the clocks an hour for summer time) and then ‘fall back’ in October.

The Second Annual Egypt CSR Forum is set to take place today and tomorrow at the Nile Ritz Carlton. A host of cabinet members including Ashraf El Arabi, Sahar Nasr, Tarek Kabil, and Ghada Waly are due to attend.

What We’re Tracking This Week

Senior executives from 75 South Korean companies are set to take part in the Egyptian-Korean Business Forum in Cairo this Thursday. Participating companies include Hyundai, Datsun, Daewoo, Hana Bank, GS Construction and Engineering, and Samsung, Al Borsa reports. The delegation will be led by South Korean Minister of Trade, Industry and Energy Joo Hyunghwan, who will meet with Trade and Industry Minister Tarek Kabil. Talks at the government and business-to-business level will focus on projects highlighted during President Abdel Fattah El Sisi’s recent Asia tour.

Wednesday-Saturday: The Cairo Food Africa Exhibition is taking place 4-7 May at the Cairo International Convention and Exhibition Center.

Saturday-Sunday: The Techne Summitis happening at Bibliotheca Alexandrina. You can register here.

On The Horizon

Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development kicks off on 10 May at the InterContinental Hotel Citystars Cairo. Register here.


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Speed Round

Speed Round is presented in association with

As expected, the Central Bank of Egypt’s Monetary Policy Committee (MPC) voted to keep base interest rates unchanged at 10.75% for deposits and 11.75% for lending while also keeping the discount rate unchanged at 11.25%. The MPC cited developments with GDP and prices as well as “the expected lagged effect from the previous interest rate hike” as the drivers behind its decision. Inflation is a worry, the CBE hinted, as, despite limited imported inflation, GDP growth in 1H2015 was “largely driven by consumption,” adding to concerns about domestic inflationary pressure. The CBE also sees that domestic GDP growth could be negatively impacted by global downside risks.

Making money investing in Egyptian equities: Bloomberg’s Sangwon Yoon profiles Duet Mena, the Dubai-based frontier fund, which has reported annualised returns of 8.9% since its inception in January 2013, compared to a yearly losses of 2% posted by the benchmark MSCI Frontier Emerging Markets Index. Duet Mena invests in “exotic” frontier markets including Pakistan, Vietnam, Saudi Arabia and Egypt, Bloomberg says. The fund’s CEO, Hedi Ben Mlouka, said he boosted exposure to Egyptian equities to 18% from 4% after the EGP devaluation, “seeing the move as the start of a normalization of its foreign capital repatriation timeline.” Ben Mlouka says “there is an interesting pattern we are seeing in frontier markets, which are headed in the right direction, toward liberalization and privatization … There is a realization there that you can’t continue to run these countries the way they have been.”

The EGP weakened to EGP 10.98 to USD 1 in the parallel market on Monday after hovering between EGP 10.90 and EGP 10.95 over the Easter / Sham El Nessim holiday long weekend. Demand had been stable during the first three days of the break, but picked up immediately on Monday, FX traders tell Al Mal.

Add Moody’s to the list of outfits banging the drum for devaluation, with the ratings agency saying in a note released this past Friday that March’s 14% devaluation of the EGP and the subsequent hiking of interest rates by 150 bps “comes at a time of low net international reserves and is credit positive both for Egypt (B3 stable) and its banks. Bringing the official exchange rate closer to unofficial market rates will make the country’s assets more attractive for foreign investors and will improve trade competitiveness.” Tap here to download the full Moody’s report (pdf).

Egypt is a “geological Disneyland” for gold exploration: Industry professionals are hinting that Egypt could be the next big thing in gold exploration with experts saying “the country is heavily underexplored and that modern technology now allows much deeper excavation of the ancient sites shown on Pharaonic treasure maps.” "Mining has been going on here for over 5,000 years, but in the 21st century it’s essentially virgin ground," President of Canada’s exploration company Alexander Nubia Mark Campbell said. Alexander Nubia increased its drilling in 2016 in a 1,070-square mile area in the Eastern Desert, identifying six potential mines in the area and samples from the sites are being analyzed at the moment. The AP says “it’s promising enough for the team of two dozen explorers and specialists to have undertaken plans to open Egypt’s first new mine by 2019,” but legislative obstacles continue to hamper development. "If there were more favorable legislation, there’d be dozens of companies all around the area," a geologist at Alexander Nubia says as Campbell adds “Egypt is a geological Disneyland.”

SODIC expects to record sales of EGP 4.9 bn in 2016, Reuters quotes a company statement as saying. The company said 2015 sales came at EGP 4.4 bn as it more than doubled its full year profit to EGP 321.3 mn from EGP 154.5 mn in 2014. It attributed the increase in profits in the 2015 to “rising demand in Cairo’s affluent eastern suburbs and for coastal summer homes,” according to Reuters. (Read)

Magrabi Optical will invest EGP 400 mn over the next five years to grow its market share, CEO Amin El Maghrabi told Al Shorouk. The company plans on implementing a set method for testing and purchasing at its branches over the same period, first at the Smouha branch in Alexandria, then in the Nasr City branches, he added. (Read in Arabic)

Belgium’s Solvay stops soda ash production in Alex on changed economics, says will continue producing quicklime: Belgian chemicals manufacturer Solvay announced it is suspending production of soda ash at its plant in Alexandria until further notice, according to a company statement. “The soda ash plant’s profitability has been declining since 2014 when a gas price increase of 2.5 times outweighed Solvay’s continuous efforts to improve production performance through lower energy consumption and increased operational efficiency.” While Solvay says higher energy costs have undermined the plant’s profitability, it noted that production of quicklime​​ (calcium oxide) will continue at the Alexandria site, “with good prospects in the region including in construction.” The decision to suspend production will result in a EUR 90 mn impairment charge that will be reflected in the company’s 1Q2016 results.

German tour operator says reports it cut offerings to Egypt are “fully absurd”: German tour operator FTI denied reports it is cutting back on flights to Egypt after what the domestic press said was an argument with Tourism Minister Yehia Rashed. “The Munich-based tour operator confirmed there had been a meeting with the minister but dismissed the report as ‘fully absurd.’” German tourism and business travel news website FVW also added that ETI, another German operator, “is relaunching holidays in Sharm El Sheikh despite the effective ban on flights from Germany,” offering flights to Sharm El Sheikh from the Slovakian capital Bratislava from 2 July. “The flights are targeted not only at tourists from Slovakia and Austria, whose capital Vienna lies only 30 minutes away, but also from Germany.” (Read)

The value-added tax law has been introduced in the House of Representatives but has not yet made it to the economic committee for review, deputy finance minister for tax policy Amr El Monayer told Al Ahram. He added that the draft law included some minor amendments but should be presented to the full House soon. El Monayer added to Al Ahram that the ministry does not plan on extending the exemption from the capital gains tax in FY2016-17 but that a decision has not been made yet, Al Shorouk reported. The capital gains tax was announced in July 2014 and implemented retroactively in 2015, but the government withheld its application after complaints from investors and reduced liquidity. Also on taxes, a source told Al Borsa the ministry neither plans to move to a more progressive taxation system nor raise the highest tax bracket to 30%.

EGAS will import 12 shipments of LNG per month instead of nine to meet rising demand from industry and consumers alike during summer months, Al Borsa reports. EGAS has begun talks to increase imports of gas 20-25% following the completion of upgrades on Egypt’s two FSRUs to ensure they can handle the capacity increase, said EGAS head Mohamed El Masry. He also issued a warning to companies who have yet to pay EGAS for energy, saying debtors will be subject to legal action and risk supplies being cut off. As we noted last month, EGAS says it is owed some EGP 14 bn by industry for natural gas supplied.

Eni is on track to sell assets worth more than EUR 5 bn in the next two years to allocate resources to fund its “high-profile projects” in Egypt and Mozambique, Reuters reported. The company is looking to shed EUR 7 bn to 2019, frontloaded with EUR 5 bn in the first two years, CFO Massimo Mondazzi told analysts. Eni has also said it is looking for “strong” partners to develop its Area 4 gas field in Mozambique and Zohr in Egypt. The company is already reported to be in talks to sell down its 50% stake in Area 4, with ExxonMobil said to be on the other end of the agreement. There is no confirmation on any potential suitors for Zohr, however. In related news, Saipem said it has no direct exposure to Egypt, but that it continues to operate as a contractor for Eni on the Zohr project. The contractor provided the Saipem 10000 drillship that drilled wells in Zohr-1 and Zohr-2 in the concession.

Did the Agriculture Ministry bust the Supply Ministry trying to mix foreign and subsidized wheat? The Agriculture Ministry has confirmed reports that a Supply Ministry truck was caught transporting imported wheat grain to a domestic grain storage facility in a statement receiving wide circulation in the domestic press. The vehicle was allegedly caught by Agriculture Ministry officials in Menoufia and Shibin Al Kom transporting foreign sourced grain from Damietta Port. The move is a violation of regulations mandating the separation of foreign-sourced and locally harvested and subsidized wheat. The statement also refuted reports attributed to the Deputy Agriculture Minister in Manoufia that the ministry approved receiving foreign wheat. Supply Minister Khaled Hanafi had said on Monday that both ministries were coordinating well on gathering and storing the domestic harvest. As it stands, the Agriculture Ministry has collected 400k tons of domestic wheat this harvest season, Al Mal reports based on a ministry statement.

Supply Ministry sources fired back denying that foreign grain was mixed with local wheat — and adding for good measure that the Agriculture Ministry as no responsibility for where wheat is milled or stored. That’s the sole prerogative of the Supply Ministry, it added, according to a report by Al Mal. The source noted that both local and imported grain go into the making of subsidized bread.

The Halliburton-Baker Hughes merger has been called off, shelving plans for the USD 28 bn agreement after facing “stiff resistance” from antitrust regulators in the US and Europe, Bloomberg reported. Halliburton will pay Baker Hughes a USD 3.5 bn termination fee. “Challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action,” Halliburton’s Chairman said. For her part, US Attorney General Loretta Lynch commented saying “the companies’ decision to abandon this transaction — which would have left many oilfield service markets in the hands of a duopoly — is a victory for the U.S. economy and for all Americans.”

The author(s) of Zero Hedge revealed: Fans of the long-running financial website Zero Hedge (and Twitter account, which boasts over 326k followers) may be dismayed at the way the writers behind the blog’s persona have finally been unmasked, Tracy Alloway and Luke Kawa report for Bloomberg. “Just who is Tyler Durden, anyway? The answer, it turns out, is three people. Following an acrimonious departure this month, in which two-thirds of the trio traded allegations of hypocrisy and mental instability, [Colin] Lokey, 32, decided to unmask himself and his fellow Durdens. (Read Unmasking the Men Behind Zero Hedge, Wall Street’s Renegade Blog via Bloomberg)


Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

The Macro Picture

As usual, Warren Buffett had plenty to say during the annual Berkshire Hathaway Inc. shareholder meeting. Buffett had stern words for hedge funds, saying they get unbelievable fees for bad results. He also warned of the ticking “time bomb” that are banks’ derivatives holdings. The Financial Times has some play-by-play coverage, calling it Buffett’s Woodstock of Capitalism 2016 — As it happened

Mohamed El-Erian pens a piece for Bloomberg View aptly titled Why Currency Markets Seem Erratic. Three conditions that have come out of the “prolonged pursuit of a highly imbalanced economic policy mix” when it comes to interest rates: “a configuration of advanced economy exchange rates that appears to no longer respond ‘normally’ to interest-rate differentials; partial policy measures whose impact pales in comparison to the effects that would result from a more comprehensive approach, and growing risks of transmitting waves of instability through global financial markets.”

US and China PMI for April- US manufacturing output close to stagnation while PMI signals further marginal deterioration in China’s operating conditions: Purchasing Manager’s Indices for both the United States and China were released on 2 May. Markit’s survey for the United States pointed to the weakest performance since September 2009, with production volumes and payroll figures increasing only fractionally. The US PMI for April registered at 50.8, down from 51.5 in March. China’s manufacturing PMI for April registered at 49.4, down from 49.7 in March. A reading of 50.0 is considered neutral, with increases or decreases in either direction as positive or negative, respectively. With regard to the US manufacturing PMI survey, Markit’s chief economist Chris Williamson is quoted as saying “The survey indicates that factory output is dropping at an annualized rate of approximately 3%, and factory headcounts are being culled at a rate of around 10k per month.”

Egypt in the News

The relationship between the “Egyptian regime and the media is becoming more volatile,” Mohamed El Meshad writes for the Carnegie Endowment for International Peace. President Abdel Fattah El Sisi’s relationship with the media is troubled, contradictory, and complex, he writes, ranging from expressions of his “contempt for media outlets, trying to circumnavigate pundits and reporters to address Egyptians directly” to trying to “control or woo prominent figures within the media who serve as important conduits of information.” El Meshad closes by noting that “though the government expects the media to follow its lead in ignoring or silencing public demonstrations and public dissent, media compliance is much less certain than it was a few years ago.”

In light of Labor Day, Human Rights Watch released an article calling on the Egyptian government to “legalize independent trade unions” and “end the decades-old single official union system and allow free and fair elections to union boards,” the article stated. “Egypt’s government is ignoring the basic right of workers to organize independently,” said Nadim Houry, deputy Middle East and North Africa director. “The government seems intent on stifling the freedom Egypt’s labor movement only gained after years of struggle that culminated in the 2011 uprising.”

Analysts interviewed by the Washington Post believe an “unlikely alliance” is being formed between Israel, Egypt, and Hamas to fight the Daesh affiliate Wilayat Sina. Hamas had deployed several hundred fighters to the border with “Egypt’s lawless northern Sinai” as part of an agreement with Egypt to keep Daesh militants from entering the enclave.

Killing of alleged gang members linked to Regeni raises questions -AP: Accounts from witnesses interviewed by the Associated Press of the killing of five gang members linked to the death of Giulio Regeni have raised more questions in the case of the Italian student. “The Interior Ministry said security forces hunting for the gang stopped their minibus and the men opened fire on them, prompting a gun battle in which all five were killed.” However, two witnesses who spoke to AP say the men were unarmed and tried to flee as police fired. Afterward, police reportedly confiscated security footage from cameras near the scene. The story adds new detail to an angle originally mined by Sarah El Sirgany for CNN, as we noted last week.

Worth Reading

Fear this man: While the West routinely criticizes regimes in the region and around the world on their human rights abuses, David Kushner profiles David Vincenzetti, the founder and CEO of the Milan-based Hacking Team, just one of many companies based in the West that’s allegedly making all that repression possible. “Vincenzetti’s position has come at a high cost. Disturbing incidents have been left in his wake… dissidents’ arrests, and countless human rights abuses. ‘If I had known how crazy and dangerous he is,’ Guido Landi, a former employee, says, ‘I would never have joined the Hacking Team.’” (Read Fear This Man in Foreign Policy Magazine)

Image of the Day

Riham Saeed is back: Now would be a good time to brush up on your Sourat Al Kahf, as the Magog of the Egyptian talk show circuit has emerged from its slumber after six blissful months. Saeed issued a tearful apology on her first show back, saying she only wanted to reveal the truth, AMAY reports. This has been made more interesting by this National Geographic article that asserts that crocodiles can actually cry. In case it were not already abundantly clear, the following image expresses our feelings on the television host’s return to the airwaves. (View image)

(Saeed, for those of you lucky enough to have missed this the first time around, was pulled off air and handed a sentence for libel after suggesting a woman was to blame for her own [redacted] assault because of the manner in which she had been dressed.)

Now cleanse your eyeballs with images of a king on vacation in Egypt (via Egyptian Streets).

Diplomacy + Foreign Trade

Indian firms are increasing their investments in Egypt, said Indian Ambassador Sanjay Bhattacharyya, the most recent instance being petrochemicals manufacturer TCI Sanmar, which plans to invest USD 300 mn in Port Said, Al Mal reports. TCI Sanmar provides 1,500 indirect job opportunities and an annual revenue of USD 150 mn, he added. Other companies included Pharmed Healthcare with USD 30 mn in investments and the Lulu Hypermarket chain with USD 50 mn in investments into its first branch, in addition to a further USD 300 mn in investments to open up 10 additional locations, he added.

U.S. Congressional security delegation in town: A US Congressional delegation led by Chairman of the House Committee on Homeland Security Congressman Michael McCaul arrived in Cairo yesterday. “The delegation plans to meet with senior Egyptian officials to discuss counterterrorism efforts, the U.S.-Egyptian partnership, and shared interests in regional security and stability,” according the US Embassy in Cairo.


Egypt to more than double gas production by 2019-20, expert says

Egypt could more than double its current gas production by 2019-20 “by bringing onstream another 50-60 bcm gas,” energy expert Charles Ellinas writes for In Cyprus. Such an amount would not just be “sufficient to achieve self-sufficiency, and do away with the need for expensive LNG imports, but there should also be excess gas available for exports,” Ellinas writes in his review of the Egyptian gas developments and how they will impact the Israeli and Cypriot markets. Potential for other major discoveries in Egypt lies within how Shell decides to move forward with some of BG Group’s concessions and within Edison’s North Thekah block, which is adjacent to Zohr, he adds. (Read)

Shell, Apache JVs complete drilling horizontal well in Western Desert

Shell and Apache JVs Bapetco and Khalda have completed drilling the first horizontal well to produce unconventional gas in the Western Desert. Sources told Al Shorouk the companies already began drilling a second well and are expected to complete it within a month. The process of hydraulic fracturing will begin after both wells are completed and appraised, the source added. The field is expected to produce 20-50 mcf per day. (Read in Arabic)

Egypt buys LNG cargo from Trafigura

EGAS bought “at least one LNG cargo” from Trafigura, Al Masry Al Youm reported. EGAS had issued a tender to buy four LNG cargoes in April for delivery in May and June. Sources told the paper Trafigura was awarded “more than one cargo” in the tender. (Read in Arabic)


USD 10 bn port in Sharm El Sheikh?

The Red Sea Ports Authority agreed to build a “world class” port in Sharm El Sheikh at a cost of USD 10 bn. The head of the authority said project studies have begun, and he expects them to be completed within a year. He added that the authority plans to build three new Red Sea ports. (Read in Arabic)

Industrial Development Authority allocates EGP 240 mn toward infrastructure in industrial zones

The Industrial Development Authority (IDA) has allocated EGP 240 mn toward completing infrastructure in the second phase of El Robiky and the first phase of the Wadi Sarireya industrial zone in Menya, Al Mal reported. More active governorates will receive bigger funding for infrastructure, said IDA chief Ismail Gaber. The authority is also offering incentives and facilities for investors interested in industrial projects, including a downpayment of 25% of the land’s value, with the rest paid back over seven years, said Gaber. (Read in Arabic)

Basic Materials + Commodities

El Sisi meets with Blumberg, discusses shouna project expansion

President Abdel Fattah El Sisi met with Blumberg Partners Chairman and CEO Philip Blumberg last Thursday, according to a statement from Ittihadiya. Blumberg reviewed the progress of the shouna project with El Sisi and presented an overview of the proposed second phase of the project, “which aims to establish an additional 300 collection and storage points across Egypt.” Blumberg Partners is also planning on “expanding the company’s size and scope of business in Egypt, particularly in the Suez Canal Area Development Project.”


Mintra looking to launch new paper factory

Paper products maker Mintra is preparing to launch a new paper plant in the first half of this year with investments of EGP 150 mn, creating as many as 2,000 job opportunities in the process, Al Shorouk reported. The company has nearly completed installing machinery and is in the commissioning phase, according to company Chairman Hani Cassis. The factory is expected to grow the company’s exports to over EGP 1 bn, he added. (Read in Arabic)

Ismail cabinet considers backing off of reducing gas prices to steel factories

The Ismail cabinet is reportedly considering cancelling its decision to lower gas to steel manufacturers to USD 4.5 per mbtu from USD 7 per mbtu, senior government sources tell Al Borsa. The decision to reevaluate the price cuts follows what the source alleged are violations of terms and conditions of the cut, including lowering imports of steel pellets. Steel manufacturers had assured that prices of steel would be lowered due to the gas price cuts, but instead saw a EGP 800 per ton increase. Demands by ceramic, glass, and fertilizer manufacturers to be granted a similar cut also prompted a reconsideration of the decision, as meeting those demands would see EGAS incur annual losses of USD 2 bn. (Read in Arabic)

Health + Education

Hikma Pharmaceuticals inaugurates EGP 500 mn factory in May

Hikma Pharmaceuticals will inaugurate its third factory in Badr City with investments over EGP 500 mn, said Managing Director Hassan Shafiq. The company has two other factories in 6 October and Beni Suef, he added, and is the only domestic producer of cancer medications, with 13 registered products in the Egyptian market. (Read in Arabic)

Sun Pharmaceutical Industries negotiations to supply Harvoni within six months

Sun Pharmaceutical Industries is planning to launch the hepatitis C medication Harvoni within six months following negotiations with the Health Ministry to participate in their tenders, said Managing Director Hany Meshaal. The company is planning to boost its investments in the country over the next two years, including boosting productions and increasing employees to 260 from 130, he added without revealing the size of the investment. (Read in Arabic)

Real Estate + Housing

Holiday home sales to grow up to 40% this year -Abraj Misr

The EGP’s devaluation will be a catalyst for growth in real estate investment in Egypt going forward, with vacation sales expected to grow 30-40% this year due to spurred demand from locals and Arabs, DNE quotes commercial director of Abraj Misr Tarek Bahaa as saying. The company is developing its Shore project over 180 feddans in Ras El Hekma Bay along 186 km of the Alexandria-Marsa Matrouh desert road, according to Bahaa. (Read)


EgyptAir Tourism and Duty Free Company to negotiate for loan to build storage, garage zone

he EgyptAir Tourism and Duty Free Company (also known as Karnak) is looking into negotiating with domestic banks to finance a project to build logistics zone at Cairo International Airport, according to company Chairman Reda Metwali. The estimated EGP 160 mn project hinges in part on extending a facilities agreement inked with Cairo International in 2008 to a 50-year term from 30 years today. (Read in Arabic)

Egypt could see 1 mn tourists from North Africa if it eases visa restrictions

Apparently Egypt can plug the gap of foreign tourists with about 1 mn holidaymakers from North Africa if it would only lift visa restrictions on Tunisia, Algeria, and Morocco, chairperson of the Egyptian Travel Agencies Association Khaled El-Manawi tells DNE. Last year, tourists from the region spent over USD 120 per night on average while European tourists spent about USD 62. El Manawi gave no real evidence for his reasoning except that about 900k tourists fly to Turkey every year, where “Algerian nationals are granted a visa at the Turkish airport and charter flights are provided.” (Read)

Automotive + Transportation

FX crunch hits Kia, Jeep unaffected

The FX crunch has negatively impacted Kia sales in the Egyptian market in the first two months of 2016, with sales down 65% y-o-y, according to DNE. Meanwhile, Jeep shrugged off the crisis, posting a 50% y-o-y increase in sales during the same period, according to a separate DNE piece. Hany Mousa, the sales representative at Ezz El-Arab Company, one of Jeep’s distributors in Egypt, told DNE the crisis forced the company to stop letting customers reserve the Jeep Grand Cherokee and the Jeep Renegade, with the suspension possibly lasting the rest of the year.

Chevrolet leads in microbus sales in Egypt with 29% market share in March

Chevrolet clinched the top spot in microbus sales in March, growing its market share to 29%, up from 21% last year, according an Al Mal report based on industry figures. Suzuki came in second at a 27% market share, followed by China’s King Long (15%) and Golden Dragon (10%), and Toyota (6%). (We note the story refers to “bus” sales, while the vehicles in question are clearly microbuses.) (Read in Arabic)

Banking + Finance

Tahya Misr Fund, Banque Misr will establish financial leasing company with EGP 100 mn capital

The Tahya Misr Fund and Banque Misr will establish a financial leasing company with a preliminary capital of EGP 100 mn, the fund’s Executive Director Mohamed Ashmawy told Al Mal. Tahya Misr will operate 51% of the company, he added, noting that the company is pending regulatory approval. The new firm will operate under the umbrella of the recently established holding company, said Ashmawy. The firm’s capital will be increased gradually as it begins operations, he added. (Read in Arabic)

Beltone Marketmaker to launch exchange-traded fund on the Nasdaq Dubai

Beltone Marketmaker plans to launch an exchange-traded fund (ETF) on the Nasdaq Dubai, Al Borsa reports. The ETF will be Beltone Financial’s first outside Egypt, said the head of the investment bank’s ETF Division Aliaa Goma’a, who did not specify the size of the fund. She added that more ETFs are planned for Egypt, including a fixed-income fund, which is awaiting regulatory approval. (Read in Arabic)

Egypt Politics + Economics

Police raid press syndicate, arrest two journalists

Police forces raided the press syndicate in Cairo on Sunday, arresting “two journalists critical of the government,” Reuters reported. This is “an unprecedented crackdown,” a syndicate official said, with board member Khalid Al Balshy stressing that “the incident is true and at the very least the interior minister has to be fired and there needs to be an apology.” But an emailed statement from the Interior Ministry claims it “did not raid the syndicate or use any kind of force in arresting the two journalists, who handed themselves in as soon as they were told there was an arrest warrant.” The ministry added that it was only enforcing a prosecutor’s order as the two reporters from the leftist, pro-revolution January Portal were subject to an arrest warrant, according to Al Masry Al Youm. Prosecutors ordered the detention of journalists Amr Badr and Mahmoud El-Sakka for 15 days pending investigation into charges the two spread false news and plotted to undermine the constitution through their social media activism during the Sinai Liberation Day protests, according to Ahram Online. Warrants were issued for seven others allegedly linked to Badr and El-Sakka for a slew of charges including possession of explosives, firearms and Molotov cocktails, according to a statement from the Prosecutor General’s Office. The syndicate has called for the immediate sacking of the interior minister and a general assembly on Wednesday in protest, according to Ahram Online. Police continued to cordon off the area surrounding the press syndicate’s headquarters on Monday; the syndicate has formed a committee to organize new protests, Al Mal reports.

…The most concerned human being on the planet, UN Secretary General Ban Ki Moon, had expressed (wait for it) concern over the arrests and storming on Sunday, Al Masry Al Youm reports.

Saudi cabinet greenlights demarcation deal

The Saudi cabinet approved yesterday the Saudi-Egyptian maritime border demarcation agreement, according to a cabinet statement. Last week, the country’s Shura Council approved the deal as hundreds in Egypt took to the streets on 25 April to protest the move. On Thursday, Ahram Online reported that Cairo’s Qasr El-Nil prosecution referred 102 people to a misdemeanor court for participating in the protests. On Saturday, a court imposed a media gag order on the caseof the arrested protesters, according to Ahram Online.


Nour El Sherbini crowned youngest Women’s World Champion

In a difficult comeback, Nour El Sherbini beat Laura Massaro in the NAZA PSA Women’s World Championship in Malaysia becoming the youngest ever Women’s World Champion, PSA world tour reported. Next month’s world rankings will reflect that El Sherbini also overtook Massaro as the world’s number one player.

On Your Way Out

Impractical solutions for real problems: The importers section of the Cairo Chamber of Commerce is proposing a 75-day self-imposed moratorium on imports to curb the demand on USD, Al Borsa reported. The head of the section says 35% of registered importers are assessing suspending all activities until the end of Ramadan in order to “force” FX traders to reduce the value of the USD. One importer said the proposal is unfeasible as importers are bound by contractual obligations to suppliers and buyers.

Egyptian actor Wael Nour passed away on Monday at his home in Agami at the age of 55, Ahram Online quoted head of the Actors Syndicate Ashraf Zaki.

The Egyptian foreign Ministry has identified nine out of the 13 Egyptians killed in Libya in a shootout with migrant smugglers last week, according to a statement from the ministry, which lists their names. All 13 bodies were transferred to Tripoli from the town of Beni Waleed where they were killed, and the ministry is coordinating with local authorities to have the bodies sent back to Egypt, AMAY reports.

HSBC Holdings is planning to sell its operations in Lebanon “and has received interest from local banks,” sources told Bloomberg. Blom Bank is reportedly in talks over the unit, ”which counts three retail branches, a corporate banking business and employs about 200 people.” Blom Bank has declined to comment.

QNB hackers to leak data from another bank soon; QNB deems it worthy to comment on data breach, maintains no financial impact on customers: Qatar National Bank changed its attitude slightly in a statement on Sunday with regard to news of a data leak of its customers’ information online, which we first noted last week. While the bank had initially said it would not comment on ‘social media rumours’ of a data breach, the bank in a statement on Sunday dropped a bit of the snark, acknowledging: “QNB Group’s Risk Team monitored abnormal activity in our system environment, this was immediately communicated to relevant authorities.” However, the bank insists the “incident will have no financial impact on QNB Group’s customers,” while it also admitted “some of the data recently released in the public domain may be accurate.” No word yet on whether data on clients of the bank’s Egyptian subsidiary is included.

…Meanwhile, the hackers allegedly responsible for the data breach say they are preparing to release customer data from another bank dating back to 2001, Gulf News reported on Monday, citing Mohammad Amin Hasbini, senior security researcher at Kaspersky Lab Middle East. According to Hasbini, the hackers have Turkish roots, are known as Bozkurtlar, and the breach may be somehow linked to the Syrian conflict. “The motive of the QNB hacking can’t be pinpointed at this stage. Although the bank has claimed it is an attack on its reputation, there could be a ‘financial angle’ as these professional hackers are hired by someone with a motive, which could be from tarnishing someone’s reputation to making financial gains from personal data of customers,” said Stephen Bailey, who heads the cyber security team in PA Consulting’s security practice in the region. “But at this stage, it is difficult to believe anyone hacking into a bank’s data system just for defaming the institution,” a claim made by QNB in their statement on Sunday.

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USD CBE auction (Tuesday, 26 April): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Monday, 2 May): 10.98 (+0.18 since Wednesday, 27 April, Al Mal)

EGX30 (Thursday): 7,773.23 (-1.15%)
Turnover: EGP 585.7 mn
EGX 30 year-to-date: +10.95%

THE MARKET ON THURSDAY: The EGX30 ended the day 1.2% down, with the top-performing constituents being Edita Food Industries, Eastern Company, and Porto Group and the worst performers being Emaar Misr for Development, United Arab Ste­vedoring, and Madinet Nasr for Housing and Development. At a market turnover of EGP 585.7 mn, foreign investors were the sole net buyers. Regional indices weren’t much better, with Saudi Arabia’s TASI down 0.2%, Dubai’s DFM General Index 0.4%, and Abu Dhabi’s ADX General Index 1.0%.

Foreigners:Net long | EGP + 135.5 mn
Regional:Net short | EGP – 29.2 mn
Domestic:Net short | EGP – 106.3 mn

Retail: 57.0% of total trades | 50.1% of buyers | 63.9% of sellers
Institutions: 43.0% of total trades | 49.9% of buyers | 36.1% of sellers

Foreign: 28.2% of total | 39.8% of buyers | 16.6% of sellers
Regional: 8.6% of total | 6.1% of buyers | 11.1% of sellers
Domestic: 63.2% of total | 54.1% of buyers | 72.3% of sellers

WTI: USD 44.83 (-0.77%)
Brent: USD 45.92 (-2.84%)
Gold: USD 1,292.80 / troy ounce (+3.70%)

TASI: 6,716.49 (-0.56%)
ADX: 4,469.81 (-0.81%)
DFM: 3,385.31 (-1.80%)
KSE Weighted Index: 363.57 (+0.10%)
QE: 10,092.07 (-0.94%)
MSM: 5,952.10 (+0.07%)

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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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