Amer’s term limits for bank MDs is a recommendation, not an order

The Press Syndicate is facing the first major push-back on its showdown with the Interior Ministry as both parliamentarians and some in its own ranks criticized its stance yesterday. The Press Syndicate’s executive committee was condemned at a gathering of news outlets and journalists organized by state-owned Al Ahram who are opposed to the stand the Press Syndicate has taken against the Interior Ministry, Al Ahram reports. The meeting included five members of the Press Syndicate who opposed the 16 demands issued last week — which those at the gathering decried as “illegal” — and insinuated that the syndicate’s leadership had unilaterally adopted the demands. The gathering also issued its own set of demands, which included calling for another general assembly to vote out the leadership of the Press Syndicate; forming their own fact-finding committee on the events surrounding the meeting, which led to the issuing of the 16 demands; and demanding an apology from the syndicate for escalating the conflict with the ministry.

The gathering’s message was echoed in a slightly less antagonistic speech by House Speaker Ali Abdel Al who also stressed that the Press Syndicate was not above the law. The House of Representative’s media committee will meet today to discuss the matter. The widespread support across the political spectrum the syndicate had received last week now seems in question. Ahram Online has coverage in English.

Egyptian and Italian investigators met face-to-face in Cairo yesterday some 48 hours after Egyptian investigators handed over mobile phone records long sought by the Italian side, the Guardian reports. We’ll be looking for more news on the outcome of the meeting. The case, as discussed in Egypt in the News, continues to cloud Egypt’s relationship with one of its most important trade partners.

A fire that broke out in the predawn hours at Al-Rowaie in the Cairo district of Ataba had just been extinguished at dispatch time. The blaze has left at least 35 people injured, according to reports in the domestic press and on local television. Twenty-one of the 35 have been hospitalized for treatment and at least 15 emergency services vehicles responded to the blaze at the six-story structure, according to an Interior Ministry spokesman quoted by state-run news agency MENA. Crime lab personnel and investigators from the prosecutor’s office have arrived on scene, Al Masry Al Youm reports.

We’ll be keeping an eye out for news coming out of the Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development, which kicks off tomorrow at the InterContinental Hotel Citystars Cairo. Register here.

Also: Sharm El Sheikh will be home this week to the International Telecommunication Union’s Global Symposium for Regulators 2016. Hit up the link for the provisional agenda and detailed programme in English. The ITU is the UN’s agency in charge of everything from the allocation of global radio spectrum to satellite orbits — and the technical standards that ensure you can roam when you travel, among other things.

Celebrate the Egyptian Capital Market Association’s 20th anniversary next week at the Four Seasons Nile Plaza Hotel’s Plaza Ballroom on 17 May 2016. The occasion gets underway at 5pm with registration and networking, followed by remarks by ECMA Chairman Dr. Mohamed Taymour, Egyptian Financial Supervisory Authority Chairman Sherif Samy and Investment Minister Dalia Khorshid. The evening will feature dinner and live entertainment. Joining for a panel discussion headlined “Egypt: For a Better Future” and chaired by Dr. Hany Sarie El Din are:

• Former Foreign Minister and Arab League Secretary General Amr Moussa
• Former Finance Minister of Finance Dr. Ahmed Galal
• Former Minister of Trade and Industry Mounir Abdelnour (who also served as minister of tourism)
• Former Deputy Prime Minister of Egypt for Economic Development Dr. Ziad Bahaa El Din (who also served as minister of international cooperation)

Ticket information and other details of the event are available from Dalia Younis (01021188844 | dalia.younis@excellentdandn.com).

The Central Bank of Egypt’s nine-year term limit for the MDs of commercial banks banking heads was not an order and isn’t binding. Since it has not yet been formalized by being published in the Official Gazette, it should be taken as a recommendation. At least that’s what the CBE’s own lawyers contended yesterday at a hearing on an appeal brought before the courts by shareholders in some of the nation’s commercial banks, according to the deputy head of the Egyptian Council of State (Maglis El Dowla) Ahmed El Shazly. The shareholders allege that any move to impose term limits on an MD’s service is not only unconstitutional and a violation of legally protected shareholder rights, but would cause great damage to the economy, Al Borsa reports. The Council of State’s Administrative Court pushed its next hearing to 19 June, solidly in mid-Ramadan.

Saudi Arabia has sent the CBE the documentation for a USD 3 bn deposit to which it has agreed, government sources told Al Mal. Saudi Arabia is expected to make three monthly USD 1 bn deposits at the CBE starting this month, Al Mal noted. The UAE is also expected to deposit USD 2 bn at the central bank as part of a USD 4 bn package. Al Borsa pegs the value of the deposit at USD 2 bn and says the CBE is reviewing the terms and is looking to receive the funds as soon as possible. A source said the deposit will be placed at the CBE for five years and will carry a “reduced” interest rate.

…Separately, the World Bank Group will transfer USD 1 bn to Egypt once the value-added tax is implemented, a source told Amwal Al Ghad. That aside, the government has finalised all the necessary procedures to obtain the loan, the source said.

Central Bank of Egypt Governor Tarek Amer’s visit to Kuwait last week was to discuss the drop in transfers from Egyptians there, Al Ahram reported, citing anonymous sources. Transfers from Kuwait have reportedly fell USD 1 bn, the sources noted. The drop is being attributed to the difference between the official and parallel market exchange rates as some people are opting to move their funds outside of official channels to benefit from the higher returns in the parallel market. Sources claim Amer said this was a challenge, especially as some traders were willing to accept a 15-20% premium for foreign currency.

The Ismail government plans to more than double subsidies for exporters to EGP 6 bn in the FY2016-17 budget, up from a current EGP 2.7 bn, said Trade and Industry Minister Tarek Kabil. The proposal, which would meet a perennial request from industry, now awaits parliamentary approval. Kabil added that the government is now focusing on increasing exports as a means to reducing the trade deficit, Al Borsa reports. Industry associations including the Federation of Egyptian Industries (FEI) have been heavily lobbying the government for the top-up, with FEI chief Mohamed El Sewedy — who is also the chairman of the House Industry Committee — saying last month that House of Representatives will push for the fund to increase to EGP 10 bn. The Trade and Industry Ministry has also allocated EGP 400 mn to implement its strategy to promote small- and medium-size business, with at least part of the new allocation being drawn from the increase in the export subsidy fund, said Kabil at a meeting of the Egyptian National Competitiveness Council. The SME Caretaker Act, meant to facilitate credit for SMEs, will be presented to the cabinet and has been reviewed by the CBE and Finance Ministry, he added, according to DNE. Kabil said the bill will be put up for “national dialogue” next week.

…Kabil also stated that the government’s trade policies had saved the country USD 2.8 bn in import costs in 1Q2016 and led to a USD 200 mn increase in exports, a sign that it is moving in the right direction, Al Masry Al Youm reports. (Al Mal, on the other hand, quoting Kabil as saying that imports fell USD 210 mn in 1Q2016.)

Abraaj’s Cleopatra’s hopes to raise EGP 600 mn with its secondary offering on the EGX, Al Borsa reports, quoting “high level sources.” The newspaper notes that Cleopatra expects the independent financial advisor’s fair value report “this week” and says the transaction could be executed as early as late May. Selling shareholders — including the European Bank for Reconstruction and Development, France’s Proparco, Germany’s DEG and funds managed by Abraaj Group — will use a closed subscription to effectively reinject the proceeds of the transaction into Cleopatra to drive growth. The company announced last week (see its intention to float here, in PDF) that it plans to offer up to 40 mn shares, including 34 mn for international investors and 6 mn in an Egyptian retail offering. As is customary, it hasn’t yet announced an indicative price range for the offering. Selling shareholders will subscribe to the closed offering at the same price at which they sold in the secondary offering. Egypt’s largest private-sector hospital group is offering 25% of outstanding shares. EFG Hermes, the sole global coordinator and bookrunner for the offering, will be taking Cleopatra on the road to meet institutional investors, according to reports in the local press.

Industry seems singularly uninterested in bidding for 14 new cement production licenses announced in February, with only five domestic and international players having so far expressed interest in bidding, sources at the Industrial Development Authority told Al Mal. The five companies meet all the prerequisites and are expected to present their bids “within days,” the newspaper’s sources say. As we reported yesterday, the IDA extended the deadline to bid for the licenses to 31 May. The feeling in the cement industry is that the sector has more than enough capacity to absorb rising demand in the medium term.

A rare corporate bond issue in the pipeline? An unspecified number of banks are reportedly mulling whether to back an EGP 800 mn bond issue by Mountain View, sources told Al Shorouk. The bonds will be used to finance residential projects in which Mountain View is engaged in Sixth of October and New Cairo in partnership with the Housing Ministry and a Saudi partner. The projects are expected to generate a revenue of EGP 61 bn, the newspaper adds.

Daesh claimed responsibility for the killing of eight police officers in the southern Cairo district of Helwan yesterday, Reuters reported. “In an Arabic-language statement, [Daesh] said the Helwan attack was part of its Abi Ali Al-Anbari campaign, which has seen the group carry out a series of bombings and other attacks in Iraq. It was not clear how or why Egypt was linked to the Iraqi campaign. The statement also said the attack was aimed at avenging women in Egyptian jails but gave no details.” Al Masry Al Youm says a group calling itself the People’s Resistance has also claimed the attack. A military funeral was held at the Police Academy in New Cairo’s police academy on Sunday afternoon for the officers, according to Ahram Online. The New York Times and Bloomberg also have coverage.

Add “math” to the list of things you can’t do on an airplane lest you be mistaken for a terrorist. Ivy League economist Guido Menzio was pulled off an American Airlines flight and questioned after his seatmate pointed out he was too focused on writing in script she did not recognize, according to the Washington Post. It didn’t help that Menzio, who is Italian, has “dark, curly hair, olive skin and an exotic foreign accent.” Turns out the script was a differential equation. Menzio was working out “some properties of the model of price-setting he was about to present … on a working paper he co-authored about menu costs and price dispersion.” Last month a UC Berkeley researcher was removed from a flight after a passenger overheard him saying “inshallah” on his phone. We’ll be gathering signatures to petition for a minimum IQ for anyone who wants to be more than 10 feet off the ground, thanks.

A tuk-tuk does not an SME make. And it’s uncivilized to boot. Tuk-tuk drivers will not be eligible to receive SME funding as it is not a business model geared towards development, said Maha Abdel Al Razzaq, head of the SME committee at the Egyptian National Competitiveness Council. Tuk-tuks are not civilized and damage the environment, she added. (Read in Arabic)

Saudi Arabia will likely continue producing crude at near-record levels under newly appointed Oil Minister Khalid Al-Falih, Bloomberg reports as the kingdom sticks to its guns when it comes to defending market share against higher-cost US shale. “This is a new era for Saudi oil policy and is fraught with uncertainty,” Amrita Sen, chief oil economist at Energy Aspects tells the Financial Times (paywall). “There will likely be more volatility for oil markets.”

Also worth a read in the Financial Times this morning if you’re a subscriber: News that discoveries of new oil reserves globally have hit a 60-year low “pointing to potential supply shortages in the next decade.” The 2.8 bn barrels of crude and related liquids discovered last year is the lowest since 1954, and most of the new reserves are offshore in deep water — finds that typically take seven years to bring into production, the paper reminds us.

China’s exports and imports fell in April, reversing gains from the previous month that had suggested a “tentative revival in both external and domestic demand,” according to the Financial Times (paywall). Data published on Sunday by the General Administration of Customs showed exports fell 1.8% y-o-y in USD while imports in April slid 10.9% from the same month last year. It also reported its first “back-to-back gain” in foreign reserves in almost two years, according to Bloomberg, “suggesting the economy is steadying amid slowing growth.” Reserves rose USD 7.089 bn to USD 3.22 tn in April, the People’s Bank of China said Saturday.

“The Regeni case … if it continues for too long it will affect our economic relationship with Egypt,” an unnamed high-level Italian diplomat tells Politico. The thrust of the piece is that while the death of Italian student Giulio Regeni is threatening to freeze over Egypt’s relations with its biggest trading partner, the issue has so far not had an effect on Eni’s Zohr field. The question: How long can it stave off the storm? “You know that the Italian government and the Egyptian government are bashing themselves up over these tensions, so you get worried,” the source added. “It’s a project that’s too big to fail for Egypt,” said Leonardo Bellodi, an international affairs consultant and former vice president at Eni. “If this project were not able to go ahead because of the current situation, the first to suffer would be the Egyptian population,” Bellodi said. “So it wouldn’t make sense to go against the needs of your own population.”

Police have reportedly arrested a member of satirical band Atfal Shawarea for inciting anti-government protests and releasing an online video “insulting state institutions,” his lawyer told the Associated Press on Sunday. Ezzedeen Khaled, 19, was arrested Saturday from his Cairo home and is being held for four days pending investigations after a clip critical of President Abdel Fattah El Sisi circulated online, according to Al Masry Al Youm. All six members of the band face the same accusations, it said. “The short clip was part of a series of two-minute videos shot in the street and released on the group’s Facebook page mocking the president and his supporters,” according to AP.

The British Museum will exhibit “a clutch of spectacular objects — from gold jewellery to five-metre-high statues and sunken ships” from the remains of two Egyptian cities, Canopus and Thonis-Heracleion, which were buried beneath the seabed for more than 1,000 years, the Financial Times’ Clive Cookson wrote. The exhibition’s overarching theme is the interaction between Egyptian and Greek civilizations. Cookson also profiled French underwater archaeologist Franck Goddio and his role in uncovering the buried treasures.

Egypt’s Dar Al Iftaa decreed that not only is human organ harvesting “a violation of Shariah” but it is especially disallowed when “ripping out human organs from a live captive to transplant them in another body,” according to a Jerusalem Post pickup of an an Al Sharq Al Awsat piece published on Sunday. The fatwa is directed at Daesh, who have long argued that organ harvesting from "apostate captives" to save Muslims’ lives is A-OK, “even if doing so would lead to captives’ death.” The fatwa states: “Harvesting someone’s organs, whether he is a Muslim or not, amounts to his humiliation. Committing organ transplantation in a way that leads to the death of the body from which the organs were ripped contradicts the Sharia, even if the person killed deserves to die and even if the one who killed him is a righteous person.”

Trouble in paradise: Archeologists apparently butted heads at a conference in Egypt on Sunday over a theory that secret burial chambers could be hidden behind the walls of King Tutankhamun’s tomb. The naysayer is none other than media darling and former Antiquities Minister Zahi Hawass, who said there’s no way the undiscovered chambers that lie behind the tomb contain the tomb of Queen Nefertiti: "In all my career … I have never come across any discovery in Egypt due to radar scans," Hawass said. This isn’t the first time Hawass has come out against the theory, which British Egyptologist Nicolas Reeves put forward last year. Reeves defended the theory, saying preliminary results of successive scans suggest the tomb contains two open spaces, “with signs of metal and organic matter lying behind its western and northern walls,” according to AP.

Venezuela: The politics of keeping the lights on. “About 60% of voters want [Venezuelan President Nicolas Maduro] out of office by the end of this year, according to opinion polls… In only six days the opposition collected 1.85 mn signatures on a petition to initiate the referendum [to shorten the the president’s term], more than nine times the 200k needed.” However, “the government can be counted on to use all the tricks at its disposal to frustrate that plan.” (Read Lights out in The Economist)

Rick and Morty meet the Simpsons: If you’re a fan of the Simpsons back when it was good — or if you’re into Futurama, Adult Swim or cool [redacted] in general — you’ll enjoy watching Rick and Morty, if you’re not already a diehard fan. Best described as a Back to the Future parody meets the Simpsons Halloween Special meets Futurama, Rick and Morty were officially inducted into the Simpsons Couch Gag Hall of Fame last year. (Watch, running time: 2:34)

The Egyptian government intends to increase French investments and will provide all necessary support to French companies working in the Suez Canal Zone development project, Prime Minister Sherif Ismail said during a meeting on Sunday with French Parliamentary Affairs Minister Jean Marie Le Guen, according to Ahram Online. The pair also discussed economic and the parliamentary relations, said Hossam Gowish, the official spokesperson of Egypt’s cabinet. The French minister also sat down with Foreign Minister Sameh Shoukry before meeting with Ismail.

The International Cooperation Ministry will soon begin a round of talks with the EU to come up with an aid and cooperation plan for 2017-20, said minister Sahar Nasr said yesterday. A new cooperation agreement with the African Development Bank is also in the works she added. A loan from the IMF is still an option on the table, she noted, adding that opening talks with the institution is the purview of the CBE governor and finance minister, Al Ahram reports. She reiterated that the World Bank loans agreed upon last year were not conditional.

The Assiut Oil Refining Company has contacted several domestic banks requesting an EGP 750 mn loan to finance its restructuring plan and boost output, Al Mal reports. The banks include NBE, Banque Misr, Banque du Caire, and CIB, among others. Enppi is the utilities contractor. The project aims to produce 603k tonnes of gasoline and 40,000 tonnes of butane a year as part of the Oil Ministry’s strategy to boost the refinery’s output to face rising demand in Upper Egypt. (Read in Arabic)

Prime Minister Sherif Ismail ordered the Finance Ministry to ready EGP 1 bn in emergency funds to pay farmers who have not been paid as a result of the inefficient management of the wheat harvest collection by both the supply and agriculture ministries, Al Ahram reports. Ismail also ordered that storage facilities be made available for domestic wheat. This comes as farmers have been crying foul and accusing the government of prioritizing wheat storage space for imported wheat, which is why the collection of domestically harvested wheat had been stalled, Al Mal reports. Many farmers have been forced to sell part of their harvests to traders for 10% less than the government price of EGP 420 per ardeb. This latest development comes on the back of a dispute between both the Agriculture Ministry and Supply Ministry who blame each other for delays in the collection of harvest as there appears to be no clear delineation of responsibility for managing the collection process, according to Mohamed Farag, head of the Egyptian Farmer’s Union. That said, the government has now gathered 2.8 mn tons out of 4 mn, Farag added.

Saudi Arabia has asked that land the Egyptian government will allocate to its investors be priced by international consultants, according to General Authority for Investment (GAFI) Chairman Alaa Omar said. Clauses of the Investment Act’s amendments only allowed four government-related entities the authority to price state-owned land. Omar said Saudi Arabia’s request also applies to investments by the investment fund being set up by the two countries. He also confirmed that Saudi investors are assessing investment opportunities in Sinai. (Read in Arabic)

The construction committee at the Egyptian Businessmen’s Association is set to meet with Housing Minister Mostafa Madbouly to discuss the real estate sector, especially local investment and attracting new foreign investors, according to Daily News Egypt, which stopped short of mentioning when the meeting would take place. Committee member and chairperson of Beta Egypt for Urban Development Alaa Fekry called on the ministry to “play its part as an observer, organiser, and catalyst for the real estate market” and asked the government to look into the equitable sharing model with investors to ensure proper returns for the private sector. Also among the problems plaguing investors is, surprise to none, the FX rate and inflation, all of which contribute to the “erosion of the margins of foreign investors’ profits and alter their investment plans.” (Read)

Ayadi Company for Development and Investment plans to begin tendering land from its 7 mn sqm land portfolio to investors in June, said Ayadi’s chairman (and former investment minister) Osama Saleh. Part of this land, which was granted to it by the Industrial Development Authority, will be allocated to SMEs, he added. (Read in Arabic)

Chinese chain Wanda Hotels and Resorts, part of Wanda Group, is expected to announce new projects in Egypt “soon” following a meeting with Tourism Minister Yehia Rashed. Al Shorouk says representatives from AMER Group have offered to partner with Wanda in projects in Egypt. Rashed says if Egypt manages to secure just 1% of the Chinese tourist market, it would be able to attract 1.6 mn tourists, estimating that China sends abroad 160 mn tourists annually, a number set to grow to 600 mn.

The government plan to attract 10 mn tourists over a period of six months is illogical and unrealistic, head of the Red Sea Tourism Investment Association Kamel Abu Ali told Al Shorouk. “The number is very difficult and a clarification on how this will be achieved is needed,” he added. Last month, we reported that Egypt was aiming to attract 9 mn tourists this fiscal year and 20 mn by 2020, said Tourism Development Authority chairman Samy Mahmoud. The government has not implemented any real strategy to save the tourism industry, including the cabinet decisions to reschedule debt from utilities and ins., he added. The return of tourism to Egypt is contingent on hiring an international firm to handle airport security, he said.

Drawing up the legal framework for the 4G licenses will take two weeks, read a statement from the ICT Ministry that ran in Al Masry Al Youm. The statement echoes remarks of CIT minister Yasser Al Qady of Saturday saying the process of tendering the licenses will be completed in two months. The statement follows a meeting between Al Qady and Finance Minister Amr El Garhy to set up “arrangements” for the tendering process. The National Telecommunications Regulatory Authority held its first meeting to establish the framework for the tenders yesterday, with few details emerging as of dispatch as to what was determined. (Read in Arabic)

Alexandria will be linked to Borg Al Arab by metro starting from Abu Qir and running through to the planned technological zone in Borg El Arab, announced Alexandria Governor Mohamed Abdel Zaher. The first phase runs from Abu Qir to the Raml Station, the second from the Raml Station to El Max, and the third to the 21 km area on the Alexandria-Marsa Matrouh road. (Read in Arabic)

) The CBE has reportedly urged state-owned banks to expand to Arab countries, particularly the GCC, except for Qatar, sources told Al Shorouk. The aim is to market the savings products offered to Egyptians abroad and encourage transferring funds back to Egypt. Banque Misr is already in talks with the Central Bank of Kuwait to set up a branch there. NBE is also looking to upgrade its representation in the GCC from the current representative offices. (Read in Arabic)

The Suez Canal Authority has entered negotiations with domestic banks for a EUR 600 mn loan, sources told Al Shorouk. The loan will be used to pay back undisclosed debt and finance investment projects, the source added. The authority received direct loans from banks worth a total of USD 1.4 bn to finance digging the new Suez Canal and the East Port Said channel. (Read in Arabic)

Tax Authority head Abdel Moneim Mattar is looking for a legal means of reconciling the CBE and parallel market rates in taxation policy and is considering inviting the Central Auditing Organization (CAO) to participate in discussions on the matter despite its position to not even acknowledge the parallel market. Mattar had already sat down with six accounting firms and the Federation of Egyptian Industries (FEI) to determine how best to account for the parallel market in filing taxes. A committee headed by Mattar’s predecessor, which included the CAO, FEI, and other chambers of commerce representatives, had failed to reach an agreement on FX accounting. (Read in Arabic)

The House Manpower Committee has begun reviewing the new and improved bureaucrat-friendly Civil Service Act, approving 14 articles of the legislation so far. Among the most contentiously debated articles was one allowing Arab nationals to serve in the civil service. Nonetheless, the article passed, Al Masry Al Youm reports. The act had been rejected by the committee when it was first formed during parliament’s first 15 days back in January. (Read in Arabic)

The Finance Ministry plans to settle EGP 70 bn in dues owed to it by different government bodies in the coming weeks, Al Borsa reports. Collecting these dues will help stabilize the budget deficit and ensure it does not exceed the 11.5% of GDP mark, according to ministry sources. The leading culprit would be the EGPC, which owes EGP 45 bn. As part of an EGP 20 bn debt settlement with the Egypt’s National Railways (ENR), the Finance Ministry will assume a portion estimated between EGP 8-10 bn of ENR’s legacy debts, former Finance Minister and current National Investment Bank board member Momtaz El Saeed said.

Five ministers attended the inauguration of the Egyptian Stock Exchange Museum yesterday, Al Shorouk reports. Investment Minister Dalia Khorshid filled in for Prime Minister Sherif Ismail at the inauguration. Social Solidarity Minister Ghada Wali, Public Sector Minister Ashraf El Sharkawy, Local Development Minister Ahmed Zaki Badr, and Immigration Minister Nabila Makram Ebeid also attended the event. The museum is said to display the history of the EGX since its establishment in 1883.

Happy Belated Mother’s Day to some of you: While Mother’s Day is celebrated throughout most of the Arab world on 21 March (introduced to the region by the late liberal Egyptian journalist Mustafa Amin, who was jailed by Gamal Abdel Nasser) it was Mother’s Day yesterday in the United States, Canada and about 83 or so countries throughout the world. If you’re a national of one of those countries who forgot what day it was, or if you’re Egyptian but spent some time living abroad, there is a chance your mother may be sitting around, suffering in silence, waiting for you to wish her a happy Mother’s Day. “No, come on,” we hear you say to yourself in disbelief. But let us ask you this: Do you really want to chance it? Do you? We didn’t think so. Call her. If you need to let off some steam afterwards, go ahead and rip your shirt off and listen to some Danzig. And we of course look forward to your angry emails about the inappropriate rock and roll music, Mom.