Tuesday, 24 May 2016

Immelt: Egypt offers “big upside, but not easy”


What We’re Tracking Today

The House of Representatives is set to vote on a USD 243 mn loan from the Arab Monetary Fund. The loan, which carries a 1.2% interest rate, will be used to shore up FX reserves. The committee will discuss the CBE report today ahead of sending it to parliament for the vote.

Enterprise is powered this morning by the ‘80s Rock Slow Dance playlist on Apple Music. That is not a commercial endorsement, but an admission of guilt.

What We’re Tracking This Week

Sir Suma in town to ink EUR 320 mn in agreements: European Bank for Reconstruction and Development President Sir Suma Chakrabarti will arrive in Cairo tomorrow to sign EUR 320 mn in loan agreements with the government. The loans will help finance transportation, irrigation, and water infrastructure development projects, Al Borsa reports.

With just over two weeks to go before the Holy Month is due to begin (probably on 7 June), we’re looking at the usual pre-Ramadan crush of conferences this week and next:

  • On 25-26 May (Wednesday-Thursday) The Middle East and North Africa Solar Conference and Expo MENASOL 2016 kicks off at the Hyatt Regency in Dubai.
  • Also on Wednesday: The FAO and EBRD conference “Securing the future of Baladi bread: how Egyptian public-private partnerships can help deliver tomorrow’s food security,” Sofitel El Gezirah, Cairo. Register here.
  • The second Africa and Middle East conference on software engineering (AMECSE) is happening at Intercontinental Citystars in Cairo on 28-29 May.
  • The two-day Middle East Regional Forum Egypt kicks off on Monday 30 May at The Movenpick Hotel & Casino Cairo-Media City in Cairo.
  • N Gage’s Investment Regulation Forum in cooperation with Pepsico hits the ground running on 29 May (Sunday) at the Four Seasons Nile Plaza, Cairo. Register here.
  • On 1-2 June (Wednesday and Thursday) the Cisco Connect Egypt 2016 is taking place at Cairo’s Royal Maxim Palace Kempinski. You can go ahead and tap here to register.
  • Right after, the first annual EBRD Research Symposium on the Economics of the Middle East and North Africa takes place on 2-3 June (Thursday-Friday) at the EBRD headquarters in London.
  • OPEC meets on Thursday, 2 June. Don’t expect an agreement to reduce output.

On The Horizon

Ramadan begins two weeks from today, give or take a day.Iftar will be around 6:55pm.


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Speed Round

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Egypt denied yesterday that the pilot of EgyptAir Flight 804 took emergency steps to try to clear the aircraft of smoke before the airliner disappeared from radar. Reports in the Western press earlier in the day suggested the pilot had “spoken with air traffic control … for several minutes before the plane crashed [and] told Cairo control about the smoke which had engulfed parts of the aircraft and decided to make an emergency descent to try to clear the fumes.”

National Air Navigation Services Company Chairman Mohy El Din Azmi denied those reports in interviews yesterday. He also said the flight “had been flying at its normal height of 37,000ft (11,280m) before dropping off the radar. ‘That fact degrades what the Greeks are saying about the aircraft suddenly losing altitude before it vanished from radar. … There was no turning to right or left, and it was fine when it entered Egypt’s FIR, which took nearly a minute or two before it disappeared,’” Azmi added. A number of Greek claims about the disaster have been proven to have been incorrect, from the initial location of the disaster to the first reports of bodies and the wreckage.

Egypt’s Public Prosecutor asked his French counterpart to hand over documents, audio, and video records related to the plane during its stay at Charles de Gaulle and until it left French airspace, his office said in a statement on Monday, according to Reuters. He also requested that Greek authorities hand over call transcripts between the pilot and the country’s air traffic control officials, adding that officials should be questioned over whether the pilot sent a distress signal.

A French ship arrived in the search area to help look for wreckage from EgyptAir Flight 804, the Associated Press reported yesterday. If found intact, the contents of the black box will be analysed in Egypt but will be sent abroad should it be found in a damaged state, accident investigator Hani Galal said in televised comments on Monday, Reuters reports. Meanwhile, the Wall Street Journal (paywall) claims accident investigators unaffiliated with the ongoing search are concerned about how crash debris is being handled, saying it could jeopardise the investigation.

The teams searching for the black box face “technical constraints that aviation experts increasingly blame on a slow regulatory response to earlier disasters,” Tim Hepher and Ahmed Aboulenein write for Reuters. Rescuers have barely 30 days until the batteries on underwater beacons guiding searchers to black boxes die, and despite regulators agreeing to increase their transmission time and range, the changes do not come into effect until 2018: “too late to help find EgyptAir 804.”

Abraaj appears to be nearing an EGP 700 mn exit of Spinneys Egypt, with one bidder now starting due diligence in a process on which the emerging markets private equity outfit is being advised by Pharos Holding, sources tell Al Borsa. Abraaj received three bids for the sale in the supermarket, which has six branches between Cairo, Giza, Alexandria, and Hurghada. Saudi’s Panda did not offer the winning bid, the newspaper reports its source as saying, claiming the transaction should wrap within a month.

OCI and U.S. fertilizers player CF Holdings have called off a USD 8 bn merger that would have created one of the world’s largest fertilizers plays “the latest multibillion-dollar transaction to run afoul of changes to U.S. tax rules designed to restrict so-called inversion deals,” the Wall Street Journal (paywall) reports, writing, “The companies said they were unable to come up with a structure for a deal to combine CF Industries with some of OCI’s operations that would create value for shareholders, citing a tougher regulatory and commercial environment.” OCI will receive breakup fees of USD 150 mn from CF Holdings. Reuters has more on the news. The companies had announced in December 2015 that they were changing the proposed tax residence of the merged entity in what analysts saw as a bid to sidestep the tax inversion issue. Hit this link to read the original August 2015 announcement and read OCI’s presentation (pdf) on the now-scrapped merger.

The three current mobile network operators aren’t buying that 4G licenses will be auctioned in July, officials from all three telecoms tell Al Borsa. These sources have voiced complaints that the same issues that plagued the failed launch of a unified operator license, which was heavily pushed for by former ICT Minister Atef Helmy in 2013, would return to haunt the 4G rollout. These include Telecom Egypt (TE)’s stalled exit from Vodafone Egypt, licenses to handle international calls independent of TE, and the government’s failure to allow mobile network operators to diversify into fixed-line connections. Cabinet approved issuing unified licenses in 2014, but the plans were scrapped at the first phase, which would have allowed TE to use all three operators’ networks to launch its own service. Driving operators’ skepticism is the belief that the 4G license framework is identical to the one governing the defunct unified license. 4G is clearly the future, how big is the market opportunity today? CIT Minister Yasser Al Qady estimates that just 3% of the phones in the domestic market are 4G-ready.

Eni’s Egyptian operations have not been impacted by the dispute between Egypt and Italy over the killing of Italian grad student Giulio Regeni earlier this year, Eni CEO Claudio Descalzi said. “I think that Egypt is starting working and collaborating with the Italian institutions,” Reuters quotes the CEO as saying on the sidelines of a hearing on security and supply at the European parliament. He added that the company was not in a rush to sell down its 50% stake in the Area 4 gas field in Mozambique, which could go through at by the end of the year at the earliest.

GE chief Jeff Immelt says Egypt offers “big upside, but [isn’t] easy” in a lengthy interview with Ahram Online. Beyond the electricity, renewable energy and rail transport projects on which GE is currently working, Immelt says he recently discussed with President Abdel Fattah El Sisi “projects that we think are extremely meaningful to the people of Egypt having to do with infrastructure and productivity. … project financing and job creation – that is what the President and I have discussed yesterday. And so there is a keen interest that we have in GE that we sense that there is a great opportunity to be very focused and helpful in Egypt right now. If you have a clear idea of Egypt, you have to take risk – and believe that the returns are higher than the risk.”

PICO Group founder Salah Diab was acquitted on Sunday of charges he illegally possessed firearms and attended an illegal gathering, Al Masry Al Youm reports. Diab, founder of both PICO group and the high-profile daily Al Masry Al Youm, and his son Tawfik Diab were arrested last November in a raid on their houses in which police allegedly seized firearms that the defendants maintained they were licensed to own. The arrests unleashed a wave of support for the Diabs in the business community and set off waves of unease that prompted President Abdel Fattah El Sisi to release a statement reassuring business leaders. Local media outlets seemed transfixed on a fight that broke out at the reading of the verdict after three others were convicted of the same charges.

The Electricity Ministry wants three extra years to phase out power subsidies, saying the process will take eight years as opposed to the original five, judging from remarks by Electricity Minister Mohamed Shaker, Youm7 reports. The decision was supposed to “alleviate some of the burden” of the March devaluation and a change in the nation’s fuel mix with petroleum products now accounting for 30% of the nation’s fuel consumption (versus 14% when the plan was developed), Shaker added at a talk on the power sector given at the Egyptian-Canadian Business Council. As we noted earlier this month, the ministry had launched a study to explore prolonging the phase out, which was supposed to be completed next month, said Deputy Electricity Minister Sabah Mashaly. Shaker stated that the subsidy reform plan will include raising the prices of top tier consumers annually, a move which is meant to cut costs and make prices for these tiers more competitive to encourage the private sector’s entry into the market.

Shaker also announced that the executive regulations of the Electricity Act had been completed and will come into effect in two weeks when it is published in the Official Gazette. As we noted back in March, the regulations will separate the Egyptian Electricity Transmission Company from the Egyptian Electricity Holding Company (EEHC) over a period of five years to allow for current projects to be completed, he added. The separation is a key step in the long-awaited deregulation of the electricity market, which would see the state become the regulator and (separately) owner of transmission infrastructure, but not the sole market player.

Food Safety Authority legislation in the works: The ministries of parliamentary affairs and trade and industry will present a draft law to create a Food Safety Authority to the cabinet on 1 June, according to an emailed cabinet statement issued Monday. The draft law will then be presented to the House of Representatives for approval, Trade and Industry Minister Tarek Kabil said on Monday, according to Al Masry Al Youm. The authority will be the sole entity responsible for food safety from production to distribution.

Was Tarek Amer responsible for the warning to MPs not to criticize monetary or fiscal policy? Sunday’s warning by House Speaker Ali Abdel Aal that representatives could face the House ethics committee for criticising Egypt’s monetary and fiscal policies in the media was directed by none other than Central Bank Governor Governor Tarek Amer, according to “sources in parliament” speaking to Al Masry Al Youm. The newspaper claims Amer was targeting MPs who have appeared on television spouting non-CBE sanctioned data and viewpoints. AMAY says the CBE boss asked Abdel Al to investigate where they obtained their information — and offered to provide them with official CBE information, of course. Abdel Al said MPs had been “coached by institutions” to criticize monetary policy. Abdel Al is also coming under fire for having reportedly blocked MPs from accepting an invitation for policy training extended by the deputy speaker of Germany’s Bundestag.

The listing of shares in public sector companies will be a three-to-five-year affair, said Investment Minister Dalia Khorshid at a meeting of the cabinet economic group. Public Sector Minister Ashraf El Sharkawy had stated earlier that the restructuring of those companies would take that long, though he refuses to acknowledge publicly that any IPOs were in the works.

The economic group also looked yesterday into proposed amendments to the Mines and Quarries Act, which the government had sought to replace with the Mineral Resources Act until parliament had other ideas. These amendments include reducing royalties and fees on mines and quarries (a sticking point in the Mineral Resources Act) and granting investment incentives such as unifying fees for licensing under the one-stop-shop policy and reducing times to obtain permits for mines in Sinai, Al Mal reports.

MOVES- Khaled El Salawy was appointed Managing Director of Ahli Bank of Kuwait-Egypt, Al Masry Al Youm reported, and will manage the bank as the acquisition of Piraeus Bank Egypt is completed. El Salawy was the deputy CEO of Union National Bank.

A flurry of earnings hit the market yesterday as the first-quarter disclosure season winds down:

  • Madinet Nasr for Housing and Development recorded a net profit of EGP 68.6 mn in 1Q2016, from EGP 36.2 mn a year earlier. 1Q2016 revenues more than doubled to EGP 237 mn on a consolidated basis.
  • Amer Group Holding reported a consolidated net profit of EGP 68.0 mn in 1Q2016, up 36% y-o-y compared to the same quarter last year. Revenues in 1Q2016 were up 18% y-o-y to EGP 544.0 mn.
  • Porto Group reported a net profit of EGP 28 mn in 1Q2016 on revenues of EGP 191 mn.
  • Lecico reported a consolidated net loss of EGP 41.3 mn in 1Q2016 compared to a net profit of EGP 2.2 mn last year. Revenues hit EGP 319.0 mn, down 3% y-o-y.
  • Delta Sugar reported a net loss of EGP 11.5 mn in 1Q2016.

Egypt’s Mountain View and Saudi Arabia’s Sisban Holdings have formed a consortium that will look to build some USD 3.6 bn worth of real estate development projects in New Cairo in partnership with the Housing Ministry, a project originally inked at the EEDC, announced Housing Minister Moustafa Madbouly. The Housing Ministry had signed an MoU with Mansour Group at the EEDC for the project to develop 500 feddans in New Cairo City. The project will be a public-private partnership with the consortium holding a 60% stake in the project, Madbouly added, according to AMAY.

Hackers are probing defences of Mideast banks for future attacks -Cybersecurity firm: Hackers are specifically targeting employees of banks in the region with infected emails to gather information about the banks’ network and accounts, according to US-based cybersecurity firm FireEye, Reuters reported on Monday. “A wave of emails containing malicious attachments [are] being sent to multiple banks in the Middle East region. The threat actors appear to be performing initial reconnaissance against would-be targets, and the attacks caught our attention since they were using unique scripts not commonly seen in crimeware campaigns,” the company said in a blog post on Monday. The firm noted that at least some of the banks appear to have been infected from the recent campaign.


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The Macro Picture

Springboarding from yesterday’s China coverage, bond investors in Chinese companies are at their wits end as defaults increase in tandem incredible excuses for failing to make payments, according to Bloomberg. On the other side of the pond, US corporate bond defaults are beginning to spread beyond the commodity complex “where the cyclical downturn has hit hard,” according to new research from Deutsche Bank AG. Meanwhile, things in Europe, the central bank’s “planned corporate debt-buying program has helped boost already hefty demand for corporate paper,” according to Bloomberg.

Bayer’s USD 62 bn Monsanto bid is making the rounds this morning. The move is giving investors pause, with the German company’s stock down significantly since the agreement was first revealed, according to Bloomberg. “Part of the scepticism … appears to stem from a belief that Bayer will have to sweeten its [USD 122]-a-share offer, which was already at a 37 per cent premium to Monsanto’s undisturbed stock price,” according to the Financial Times (paywall). “The danger is that you start then having discussions about how you are going to fund a higher offer, because they are already stretching the balance sheet,” Andrea Williams, a fund manager at Royal London Asset Management Co., told Bloomberg.

The IMF issued a bleak assessment of Greece’s financial future as eurozone finance ministers prepare for a crunch meeting on debt relief, the FT (paywall) reports. The fund is “calling for European creditors to forgo any Greek debt payments until 2040 and, most controversially, to fix interest rates at 1.5 per cent over that time in a move that could require other eurogroup members to plug yet more Greek gaps in the future.” Meanwhile, Markit released PMI figures for the eurozone on Monday, which dipped to a 16-month low of 52.9 in May.

Egypt in the News

Sudan is “not giving up on its sovereignty claim over the Halayeb Triangle” which Egypt sees as sovereign territory, Sputnik reports. The Russian news provider also notes that “Egypt has refuted all demands by Sudan to cede the control of the contested area. The row flared up again this year after Egypt handed over two Red Sea islands to Saudi Arabia.”

The UK’s Office for National Statistics (ONS) announced on Friday that the number of British nationals heading to “past holiday hot spots” like Egypt, Tunisia, and Turkey is in “sharp decline,” writes the Guardian. Travel by Britons to Egypt sunk nearly 50%, the figures show, while the World Travel and Tourism Council reports that tourists spent 4% less in Egypt last year compared to the one before, forecasting a further 4% fall in 2016.

Image of the Day

Take a look at Al Ismaelia’s renovation work in downtown Cairo: Chairman and CEO of Al Ismaelia real estate company Karim Shafei’s image of one of their current renovation in downtown Cairo made the rounds yesterday on social media. The company appears to have taken a great deal of effort to preserve the building’s architectural integrity. (View image)

Worth Watching

An “alternate ending” to Dead Poet’s Society: Portlandia star and SNL alum Fred Armisen hosted the season finale of Saturday Night Live last weekend. Of all the skits the show featured, this perhaps stands out as getting the most attention, an ultra-violent re-imagining to the ending of the 1989 Robin Williams film Dead Poet’s Society. You don’t have to have seen the movie to enjoy the sketch The video has already been viewed 3.3 mn times. (Watch, running time: 3:26)

Diplomacy + Foreign Trade

10 new ambassadors have formally presented their credentials to President Abdel Fattah El Sisi. The new ambassadors are from Azerbaijan, Bosnia-Hercegovina, Cambodia, Indonesia, Lithuania, Malta, Namibia, Slovakia, South Africa, and Sri Lanka.

The United Nations Security Council held an “unprecedented consultative meeting in Cairo” on Saturday with the League of Arab States to talk “developments of the Palestinian issue, the Middle East peace process, [and] updates on the situation in both Libya and Somalia,” according to a statement. The Security Council mission followed the meeting with talks with Foreign Minister Sameh Shoukry surrounding more of the same issues.

Mahmoud Hegazy, the military’s chief of staff, is in the US on “an official visit that is set to last for a few days.” Ahram Online says “Hegazy’s visit comes upon an invitation from the US’s Chairman of the Joint Chiefs of Staff; where both sides are set to hold discussions on military cooperation between the armed forces of both countries.”


State committee to create new body to manage Dabaa nuclear power plant project

The Ismail cabinet is forming a committee to create the state agency that will manage the Dabaa nuclear power plant, according to the Official Gazette. The committee will be headed by the deputy power minister, with members including representatives from the ministries of defense, planning, finance, military production, the interior ministry, and the General Intelligence Directorate. the committee will outline the agency’s responsibilities, its organizational structure and will draft a law to create it. The committee will present a report to the Cabinet within a month. That’s about the time at which the project’s final contract is set to be signed, as we reported last week.

SDX Energy raises funds through private placement to fund Egypt operations

SDX Energy has raised approximately USD 11 mn through private placement to fund activities in Egypt, Rigzone reported. “The proceeds will mainly be used on workover and waterflood programs at Meseda and on South Disouq’s 3D seismic program … The workover and waterflood programs are expected to double both production and reserves at Meseda, offering a low risk way of achieving very material upside. The political outlook in Egypt looks to be improving for SDX Energy given that the government has started paying down its receivables,” an analyst at FirstEnergy says.

EGPC acquires 15% stake in an Iraqi field

EGPC has agreed to acquire a 15% stake of the Siba field in Basra, Iraq, Al Borsa reported. Oil Minister Tarek El Molla says the necessary steps to formalise EGPC’s involvement are being completed with the relevant Iraqi and Kuwaiti authorities as Kuwait Energy has a 45% revenue interest in the field. EGPC had entered into a strategic partnership agreement with Kuwait Energy that saw it begin E&P operations beyond its borders for the first time and began producing from Block 9 in Basra back in February. According to Kuwait Energy, Turkish Petroleum Corporation and Missan Oil Company also have rights to the Siba field.

Vestas to present bid to build 2,200 MW wind farms next week

Denmark’s Vestas, which bills itself as the “only global energy company dedicated exclusively to wind energy,” is closing in on an MoU to build 2,200 MW in wind generation capacity with investments of USD 2.2 bn next week, sources tell Al Borsa. The project would be built under the EPC-plus-finance system. Vestas is looking to start building within four months, after being allocated a land plot to build the first 250 MW wind farm in the West Nile area. International banks financing the project include HSBC, EKF Denmark, and Euler Hermes, the newspaper reports. The international trade press reported last month that Vestas was nearing an agreement after the news was first broken by Daily News Egypt.

Electricity Ministry launches int’l tender for Siemens consultant

The Electricity Ministry will launch an international tender within days for a project closure and handover consultant who will be in charge of ensuring the quality of the three Siemens power plants before the company hands them over to the government, Al Borsa reported. Contracts should be signed before end of July, a government source told the paper.

Benban companies, NREA to select winning services tenders in two weeks

The New and Renewable Energy Authority is holding meetings with investors in the Benban solar farm to establish a framework for selecting winning bids on services tenders within two weeks. Hill International, engineering firm CH2M, property management firm Contrack FM, G4S and Falcon Group are among the 14 services companies bidding to provide security, labor, engineering, telecommunications, transportation and water management services. The meetings will also discuss the status of the apparently-stalled feed-in-tariff agreement and prospects for 39 Benban companies to reach financial close, Al Borsa reports.

Basic Materials + Commodities

MOPCO could generate USD 450 mn in export proceeds each year

Exports from Misr Fertilizers Production Company (MOPCO) are expected to bring in USD 300-450 mn annually, the head of the chemicals chamber at the Federation of Egyptian Industries said. He added that MOPCO’s facilities are now the largest globally and praised the decision to continue supplying it with natural gas. MOPCO’s target export markets will be Europe and the US, he told Al Ahram.

Local wheat purchases reach 3.83 mn tonnes

Egypt has successfully bought 3.83 mn tonnes of local wheat since the start of the domestic purchasing season on 15 April, Reuters reported. The government said it plans on buying 4 mn tonnes of local wheat, with Reuters noting that the “local buying season … usually ends around July.” Al Masry Al Youm has coverage in Arabic.

Raw sugar imports exempted from customs duty, local producers outraged

Raw sugar imports have been exempted from customs duties until year’s end, according to a Cabinet decision published by the Official Gazette on Monday. The move, along with last week’s decision to impose a EGP 900 fee on sugar exports, is in keeping with the government’s attempts to keep prices low ahead of Ramadan. Local sugar producers slammed the decision as kowtowing to the importers, saying they would not be able to compete with low prices of imported sugar, Al Borsa reported. They feel that the move would flood an already saturated market in which local producers are already suffering a 30% spike in production costs.


Italy’s Danieli receives requests to partner in four steel plants in Egypt

Metal industry plant and equipment supplier Danieli received offers to partner in building four steel plants in Egypt from Egyptian businessmen, it said. The companies proposing the projects are not submitting official proposals for them, Samy Mahmoud, the head of Danieli’s representative office in Egypt told Al Borsa. Mahmoud says Danieli recorded EUR 120 mn in sales in the last three years in Egypt.

Health + Education

HoldiPharma planning to list three companies on EGX

State holding company HoldiPharma is planning to float three affiliate companies on the EGX “in the upcoming period,” company Chairman Adel Abdel Halim told Al Borsa. Decisions will only be taken once restructuring assessments are made, he added, refusing to name the companies likely to be listed. Al Borsa writes that HoldiPharma owns 11 affiliates, including five already listed on the EGX.

Telecoms + ICT

Ousta plans to increase fleet, expand nationwide this year

Ride-hailing app Ousta plans to increase its fleet to 10,000 cars from its current 3,000 by year’s end, said the company’s chairman Nader El Batrawy. The company is also planning to expand its presence in more governorates in Egypt. Ousta currently operates in Cairo, Alexandria, Mansoura, and Hurghada, Al Mal reports.

Automotive + Transportation

MCV looking to export 1,100 buses in 2016

The Manufacturing Commercial Vehicles Company (MCV) is looking to export around 1,100 buses in 2016 worth EGP 1.5 bn, said CEO Amr Nasser, according to Amwal Al Ghad. The company’s average export rate is around 1,000 vehicles to mostly African, GCC, French, and English markets, he added. MCV signed an agreement earlier this year to export 60 hybrid double-decker buses to England. The company’s domestic and international growth strategy includes boosting its operating capacity, currently at 20% with 2,000 vehicles, to 10,000 vehicles, he said.

Banking + Finance

NBE arranges EGP 1.98 bn loan for Alexandria National Refining and Petrochemicals Company

NBE is arranging an EGP 1.98 bn loan for the Alexandria National Refining and Petrochemicals Company to finance two new gasoline production units with a capacity of 850k tonnes annually, Al Mal reports, billing the project as an import-substitution play. Final agreements could be signed in June; the loan is set to be paid back over eight years.

Al Ahly Capital increases stake in Misr Cement (Qena)

Al Ahly Capital increased its stake in Misr Cement (Qena) to 9.2% from 7.53% after buying 501.7k shares at an average price of EGP 89.50 per share on Sunday, according to a bourse statement.

Egypt Politics + Economics

Interior Minister snubs requests to attend House inquiries on forced disappearances and Protest Act

Interior Minister Magdy Abdel Ghaffar apparently failed to respond to four requests to appear before the House Human Rights Committee to discuss the issue of “forced disappearances” and potential amendments to the Protest Act, which requires that the MOI grant permits for public protests, Al Mal reports. The committee had apparently received multiple petitions to hold an inquiry on forced disappearances and is continuing to call on Abdel Ghaffar to attend an inquiry on the issue. Meanwhile, the House has voted to extend the state of emergency in parts of Sinai, despite calls by some Sinai MPs to relax these security measures to allow butane gas deliveries to Al Arish. The House has also voted to postpone its discussions on the EgyptAir crash until the preliminary report on the crash is released.

Foreign debt expected to reach USD 5.5 next fiscal year on an FX rate of EGP 9 to the USD 1

Egypt’s foreign debt in the FY2016-17 budget will ring in at USD 5.5 bn (EGP 49.2 bn) at an exchange rate of EGP 9 to USD 1, Al Borsa reports. By this figure, Egypt would owe foreign lenders 32% of its FX reserves at their April levels of c.USD 17 bn, the newspaper says. It is unclear whether the Finance Ministry is projecting a future devaluation by setting this rate. The Finance Ministry typically unveils its budget in EGP. Interest payments on foreign debt next year are forecast to come in at USD 800 mn (EGP 7.2 bn), while installment payments owed to creditors will reach USD 4.6 bn (EGP 41.5 bn). Egypt is expected to make good on the first of these payments in July, as the new fiscal year begins, when it pays Qatar USD 1 bn and the Paris Club USD 700 mn.

On Your Way Out

Iran is cracking down on a conspiracy unleashed on it by Kim Kardashian, Instagram, the Gulf Cooperation Council and Britain. We kid you not. Really. You can find more, depending on your reading preferences, in the Financial Times (paywall), the Independent or Global Voices (the latter wins the “best art” not from us).

We’re getting new MacBooks this year, boys and girls. A research note by analyst Ming-Chi Kuo obtained by AppleInsider is predicting TouchID, an OLED touch bar, USB C, Thunderbolt3 and a thinner and lighter design. Sign us up.

From the Department of Redundancy Department comes this nugget via Hollywood rag The Wrap, which serves up “Men Hate TV Shows Aimed at Women, Study Says,” itself based on an analysis piece by FiveThirtyEight.

The markets yesterday

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USD CBE auction (Tuesday, 17 May): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Thursday, 19 May): 10.95 (compared with 10.80 on Wednesday, 18 May, Al Mal)

EGX30 (Monday): 7,417.08 (-1.04%)
Turnover: EGP 441.9 mn
EGX 30 year-to-date: +5.86%

THE MARKET ON MONDAY: The EGX30 fell 1.0% on Monday with shares worth EGP 441.9 mn changing hands and foreign investors emerging as the sole net sellers. Madinet Nasr Housing, EFG Hermes, and Telecom Egypt were the top performers while Porto Group, TMG Holding, and Arabia Investments were more notable stocks to end the day in the red. Regionally, the Saudi Tadawul fell 3.3%, while the DFM rose 0.24% and ADX 0.26%.

Foreigners:Net short | EGP – 37.1 mn
Regional:Net long | EGP + 17.1 mn
Domestic:Net long | EGP + 20.0 mn

Retail: 61.2% of total trades | 61.8% of buyers | 60.6% of sellers
Institutions: 38.8% of total trades | 38.2% of buyers | 39.4% of sellers

Foreign: 22.1% of total | 17.9% of buyers | 26.3%of sellers
Regional: 8.6% of total | 10.5% of buyers | 6.6% of sellers
Domestic: 69.3% of total | 71.6% of buyers | 67.1% of sellers

WTI: USD 48.08 (-0.41%)
Brent: USD 48.38 (-0.70%)
Gold: USD 1,251.50 / troy ounce (+0.04%)

TASI: 6,425.23 (-3.07%)
ADX: 4,198.56 (+0.26%)
DFM: 3,216.36 (+0.24%)
KSE Weighted Index: 354.67 (-0.33%)
QE: 9,681.54 (+0.45%)
MSM: 5,948.41 (+0.29%)

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25 May (Wednesday): The FAO’s and EBRD’s conference: Securing the future of Baladi bread: how Egyptian public-private partnerships can help deliver tomorrow’s food security, Sofitel El Gezirah, Cairo. Register here.

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

28-29 May (Saturday-Sunday): The second Africa and Middle East conference on software engineering (AMECSE), Intercontinental Citystars, Cairo.

29 May (Sunday): N Gage’s Investment Regulation Forum in cooperation with Pepsico, Four Seasons Nile Plaza, Cairo. Register here.

30-31 May (Monday-Tuesday): The Middle East Regional Forum Egypt, Movenpick Hotel & Casino Cairo-Media City, Cairo.

01-02 June (Wednesday-Thursday): Cisco Connect Egypt 2016, Royal Maxim Palace Kempinski, Cairo. Register here.

02 June (Thursday): Thomas Piketty lecture in partnership with AUC Middle East Studies Center / School of Global Affairs and Public Policy. AUC Tahrir campus, Ewart Hall, Cairo.

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 June (Monday): First day of Ramadan (tentative date)

06-08 July (Wednesday-Friday): Eid El Fitr (national holiday, tentative date)

06-09 August (Saturday-Tuesday): The International Conference on Chemical Sciences & Applications, Arab Academy for Science, Technology and Maritime Transports, Alexandria.

11-13 September (Sunday-Tuesday): Eid El Adha (national holiday, tentative date)

02 October (Sunday): Islamic New Year (national holiday, tentative date)

06 October (Thursday): Armed Forces Day (national holiday)

01 November (Tuesday): Prophet’s Birthday (national holiday, tentative date)

27 November (Sunday): 2016 Cairo ICT Conference Group

04-06 December (Sunday-Tuesday): Solar-Tec exhibition, Cairo International Convention Centre, Cairo

04-06 December (Sunday-Tuesday): Electricx exhibition, Cairo International Convention Centre, Cairo

11-13 December (Sunday-Tuesday): The Middle East Fire, Security & Safety Exhibition and Conference (MEFSEC), Cairo International Convention Centre, Cairo

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