Brokerages could face market share caps.

International Cooperation Minister Sahar Nasr is expected to sign a technical and financial cooperation agreement with Germany’s ambassador today, according to an emailed ministry statement. Details on the nature and size of the agreement were not mentioned.

Enterprise is powered this morning by the hope that mobile phones don’t cause cancer after a U.S. study released this weekend “found ‘low incidences’ of two types of tumors—one in the brain and one in the heart—in male rats that were exposed to the kinds of low-level radio waves that are emitted by cellphones,” the Wall Street Journal reports. The New York Times suggests the sky may not be falling and CNN says the study raises “more questions than answers.”

EBRD boss Sir Suma Chakrabarti is due in Cairo on Tuesday (31 May) for high-level meetings. Don’t expect loan agreements with the Government of Egypt to be on the agenda, a source in government tells us. EBRD focuses in Egypt on finance, agribusiness, infrastructure, transport and telecoms and has so far committed more than EUR 1.7 bn to 34 investments; 61% of that sum has been netted by the private sector. Sir Suma will speak on “Inclusive Growth: Challenges and Opportunities” at an event hosted by the American Chamber of Commerce in Egypt on 1 Jun 2016 from 9-10:30am.

On a related note: The EBRD is reportedly considering investing in the Egyptian automotive sector, a source tells Al Borsa, claiming a delegation from the EBRD is currently in Cairo to study the sector and meet with industry players to explore ongoing projects that could drive growth. We have two words for the folks at EBRD: Automotive Directive. The State Information Service, meanwhile, is reporting that Suez Canal Economic Zone Authority chief Ahmed Darwish met on Friday with senior EBRD officials to discuss investment opportunities in the zone.

We’re also on the lookout for USD 2 bn that the UAE is due to be deposit at the Central Bank of Egypt by the end of the month, according to a media report late last week.

Conferences on the agenda this week include:

• Cisco Connect Egypt 2016(Wednesday, 1 June through Thursday, 2 June) at Cairo’s Royal Maxim Palace Kempinski.
• 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.

Shares of Cleopatra Hospital Company are due to start trading on Thursday, 2 June, opening at EGP 9.00, per the price announcement release last week. Check out the company’s offering materials here. It’s Egypt’s second IPO of the year and, heading into the dog days of summer (and with Ramadan due to start 7 June), our money says it’s the last offering we’ll see until August / September, when everyone is back from summer vacation and first-half results are ready.

OPEC meets on Thursday, 2 June — don’t expect a production freeze. Only one of 27 analysts polled by Bloomberg expects a deal to limit oil output when OPEC ministers get together at the end of the week. Why? It seems KSA’s strategy of flooding the market to drum-out high-cost producers may be working, with Bloomberg noting: “By stifling high-cost suppliers, the Saudi approach has now almost eradicated the global oversupply, spurring a price rally of 80 percent since January.” Other signs: Saudi is looking to sell even more oil to the Chinese; Russia is skipping the OPEC summit, Russian Energy Minister Alexander Novak said yesterday (Russia isn’t a member, but had been “consulting” on a possible production curb until Novak and since-ousted Saudi oil minister Ali Al-Naimi were sandbagged by a higher power); and Saudi talks with Iran on the hajj have again collapsed, with the two sides exchanging barbs on the way out the door (Saudi’s punch is here, Iran’s are here and here).

The Markit / Emirates NBD Purchasing Managers’ Indexes for Egypt, Saudi Arabia and the United Arab Emirates will be released a week from today — Sunday, 5 June.

Brokerage houses watch out: The Investment Ministry is moving to limit the market share of any one brokerage house or group of houses that share a corporate parent, according in a note made in passing at the end of a cabinet statement issued Thursday. The proposed amendments to the Capital Markets Law’s executive regulations have been sent to the Egyptian Council of State (Maglis El Dowla) for review and will force the regulator to take market share changes into consideration when reviewing mergers and acquisitions and in reviewing transactions that would result in changes in shareholder structure.

Who’s in the cross hairs? Al Mal says the move comes as Beltone Financial and CI Capital await regulatory approval on their merger, which it says would see the new entity hold a 25% share on the EGX. Sources close to the two outfits told the paper that the proposed regulatory changes could put the transaction at risk. Where does Beltone stand in terms of market share? The merged CI Capital + Beltone would hold 10.3% (not 25%) market share in 4M2016, making it the second-largest player in the market. EFG Hermes (via Financial Brokerage Group and Hermes Securities Brokerage) held a 19.3% market share in the same period.

The proposed regulatory changes have caught the industry by surprise. Mohamed Maher, deputy chairman of Prime Holding, told Al Mal he was unaware of the details of the proposed changes, but said he hopes the government would not impose unnecessary regulation. Mohamed Taymour, head of the Egyptian Capital Markets Association and chairman of Pharos Holdings, supported the decision in principle, saying it would be dangerous for one entity to hold a market share of 50% or more.

French company ALSEAMAR is providing a vessel specialized in the search for marine wreckage to join the hunt for the black boxes from crashed EgyptAir flight 804, Reuters reported. Investigator Ayman El Moqadem said “negotiations were also underway to contract a second firm to help in the search.” Reuters says “The black boxes are believed to be lying in up to 3,000 meters of water, on the edge of the range for hearing and locating signals emitted by the boxes. Maritime search experts say this means acoustic hydrophones must be towed in the water at depths of up to 2,000 meters in order to have the best chance of picking up the signals.” The ALSEAMAR ship is due on station sometime early this week, the New York Times suggests, while Bloomberg is reporting that a second ship has been commissioned from Deep Ocean Search Ltd. Meanwhile, Bloomberg confirms Ahram Gate’s report of last week that five European and U.S. satellites captured Flight 804’s emergency locator transmitter as it automatically began broadcasting a distress signal at 2:36am on the morning the flight was lost.

Meanwhile, the Wall Street Journal raises the question of whether a known fault in a smoke-detecting sensor (even in a new version put in place to address the issue) could be at fault in the crash. “Long before EgyptAir Flight 804’s pilots received an alert signaling smoke in a vital electronics compartment, U.S. safety watchdogs documented that such warnings on that airliner model were frequently erroneous and sometimes prompted unnecessary and risky cockpit responses.”

MOPCO a dud? Recently expanded Misr Fertilizers Production Company (MOPCO) is struggling operationally due to a shortage in natural gas supplies to its plants and a drop in international urea prices, sources told Al Mal. President Abdel Fattah El Sisi had inaugurated a USD 1.96 bn expansion project at the plant. The sources said feasibility planning for MOPCO assumed international urea prices at “USD 420 per tonne, whereas they are now below USD 200 per tonne” and the plant is receiving only 70% of its contracted feedstock. This is not allowing the plant to use its full capacity, Al Mal notes.

MOVES- Rania Al Mashat, the well-respected sub-governor for monetary policy at the Central Bank of Egypt, is joining the International Monetary Fund in August, a source told Reuters. Al Mashat is expected to serve as an advisor to the IMF’s chief economist.

MOVES- Yasser El Naggar was appointed Principal Deputy Minister of the Planning Ministry. El Naggar was previously Principal Deputy Minister of the Investment Ministry.

With Cleopatra Hospitals Company shares due to start trading on Thursday, 2 June, we wonder: Who’s next in the IPO pipeline? Baker & McKenzie’s 2016 IPO tracker forecast seven IPOs for Egypt, a list that didn’t include the in-progress offering of Cleopatra Hospitals Co. By our count, here’s where we stand:

• Domty — Executed. Trading began 22 March. International institutional offering was 5.5x oversubscribed; domestic retail offering 10.7x oversubscribed. EFG Hermes was sole advisor.
• Cleopatra Hospitals — In progress. Trading due to start 2 June. International institutional offering 6.7x oversubscribed; domestic retail offering continues. EFG Hermes is sold advisor.
• BPE Holding (formerly Beltone Capital Holdings) — A senior company official tells us the IPO is pending the Egyptian Financial Services Authority’s approval of its IFA. The Egyptian investment holding company (which is managed by BPE Partners) is targeting a minimum offering of 10% and raising a first round of EGP 120mn. Expected Q3 2016.
• El-Farasha Printing & Packaging — Said to be looking at a listing in July. No word on who is advising.
• Misr Italia for Touristic Development — Looking to offer 10-20% to raise up to EGP 600 mn some time in 3Q2016, as we noted earlier this month. Prime Holding is advising.
• Orange Egypt — The local subsidiary of France’s Orange may make a return to the EGX after Orange Group CEO Stephane Richard said in March 2016 that the company may offer up to 20% “in a few months’ time.”
• Abraj Misr Co. — Reportedly interested in offering 15%, but no real update since late 2015, when they confirmed they planned a 2015 IPO. News first broke in 2014.
• Unionaire — Believed to be eyeing an offering by year’s end, with EFG Hermes in the lead and Nasr Abou Abbas working on the valuation report.
• Food Industries Holding Co. — No confirmed date or any other mention.
• Banque Du Caire and another state-owned bank—20% could be on offer. EGX Chairman Mohamed Omran mentioned that the bank may be the first to IPO. CBE Governor Tarek Amer stated back in January that two unnamed state-owned banks would IPO this year.
• Rooya Real Estate Investment Group — Pioneers Holding, which holds c. 60% of Rooya’s shares, said in March it expects to raise EGP 2 bn in the offering.
• Hassan Allam — Said in late 2015 to be considering an offering next year, with EFG Hermes and CI Capital advising.

Drop us a note at editorial@enterprise.press if we’re missing anything above (or if we’ve gone astray on anything we’ve noted) and we’ll publish the updated tracker next week.

DBK Pharma is looking to sell EGP 300-500 mn worth of shares to strategic investors, Al Borsa reported. The company has appointed Pharos Holding as advisor. Al Borsa says Pharos had already received offers from a number of Arab investors and negotiations are moving forward, without specifying any details. DBK Pharma had opted to delist from the EGX last December.

The Ismail cabinet has set EGP 6 as the maximum price increase on packages of medicine previously sold under EGP 30. The maximum price rise goes into effect immediately, said Health Minister Ahmed Rady after the cabinet’s weekly meeting on Thursday. The decision applies regardless of the number of blister packs within each package (see Health + Education for more). The ministry will also issue a detailed list of medications (estimated to be around 1,200) and their new prices, said Rady, who warned companies of dire consequences for taking advantage of the decision to allow price rises. The [healthcare compounds] division of the Federation of Egyptian Industries held a meeting yesterday to discuss the ramifications of the move, which many feel would be damaging to the industry. Sources from the division tell Al Borsa that the limit will hurt manufacturers and only benefit retail outlets and distributors.

Furthermore, the confusion in policy since its announcement a few weeks back has led some manufacturers to halt imports of medication, said the treasurer of the Alexandria branch of the Pharmacists Syndicate. Three major producers have stopped shipping in compounds listed in the decision, he added. We should see this trend continue for the next 60 days until the situation is clarified, he tells Al Mal.

CABINET ROUNDUP: Cabinet met on Thursday with Prime Minister Sherif Ismail at the head of the table. Among other things, ministers signed off on a USD 2.5 bn Saudi grant to support the “Egyptian economic program.” We have a bulleted rundown on what Cabinet decided here on the website.

Time to reassess the state’s budget plans? Brent crude prices rose above USD 50 per bbl on Thursday for the first time in 2016 “as a decline in US stockpiles accelerated a rebound from a 12-year low,” according to Bloomberg. “The rebalancing is under way … Ultimately, the rebalancing remains dependent on an ongoing contraction in U.S. shale-oil production, and current prices are potentially throwing a lifeline to U.S. shale producers,” Giovanni Staunovo, an analyst at UBS Group AG in Zurich, said. For Egypt, this means that the Finance Ministry may need to revisit its base assumptions for FY2016-17 budget. According to the budget report presented to parliament last week, the government is basing its projections on an average oil price of USD 40 per bbl. Planning Minister Ashraf Al Araby confirmed as much in a statement on Egypt’s growth targets and metrics for the current and next fiscal year on Saturday, Al Borsa reports. Changes to the budget could take place during the House Planning Committee’s deliberations on the document, he added. The Finance Ministry had stated previously that a hike of USD 1 per barrel in the price of oil, would lead to a EGP 1.1 bn spike in the budget deficit.

The Suez Canal grew 1.8 percentage points slower in 1H2015-16 than in the same period a year ago, Al Araby said in his statement. On the tourism sector, Al Araby stated that tourism contracted 18% during the first half of the year as a result of the Metrojet disaster. The sector’s overall contribution to GDP fell to 4.5% from 5.5%. GDP during 1H2015-16 grew to EGP 1.4 tn, from EGP 1.3 tn in 1H2014-15, said Al Araby, according to Al Borsa.

The Trade and Industry Ministry is set to complete the EGP 1.5 bn exceptional export subsidy program within the coming 10 days, announced Trade and Industry Minister Tarek Kabil, reports Al Mal. Non-oil exports have dropped consistently for the last 15 months, he added, losing around EGP 2.8 bn mainly due to natural gas shortages at factories.

Vancouver-based miner Alexander Nubia International could be opening up Egypt’s second gold mine by 2019 at a cost of USD 500 mn, CEO Mark Campbell told Bloomberg. The still-unnamed mine lies 800 km southeast of Cairo in an area called the Arabian-Nubian Shield. Centamin has operated Sukari, the nation’s only active gold mine, since 2009. Despite significant potential, mining and quarrying contributes only 0.4% of Egypt’s GDP and 1.5% of total exports, said Campbell. The regulatory framework for mining (including calls to switch from profit-sharing agreements to taxes and royalties) and Alexander Nuba have been in the headlines in recent weeks at the same time as the cabinet economic group considers possible amendments to the Mines and Quarries Act.

The CBE’s crackdown on FX bureaus has seen the EGP hold steady at EGP 11.00 to the USD 1 in the parallel market despite high demand from importers, but at the cost of paralyzing the market. FX offices have been very timid in dealing with people over the past few days as a result of the crackdown, one trader tells Al Borsa. As we noted last Wednesday, the CBE had expanded the scope of its investigation into other governorates.

Shareholders of the Arab Petroleum Pipelines Company (SUMED) have reportedly voted down allowing Iran to use the pipeline to export petroleum, with an overwhelming 95% of the vote, company sources tell Al Shorouk. Iran had put in a request to be allowed access to the SUMED pipeline back in February.

BRIEFLY NOTED-

• Canada’s foreign minister says his country needs to help Egypt “before it’s too late,” according to iPolitics.ca.
• Dar El Ifta is reportedly giving students the option of not fasting during exam time, Ahram Online says.
• Eight police officers face allegations they beat a man in custody at Abbasiya police station to death on Thursday night, Ahram Online reports.
• The domestic press is gloating over the Guardian pulling from its website more than a dozen pieces by a freelancer long-suspected by Egyptian journalists of making up stories and sources, Mada Masr reports.

The U.S. Federal Reserve meets 14-15 June, and Fed chief Janet Yellen is suggesting a rate hike could come either at that meeting or at the 26-27 July meeting that follows it. The Fed boss said on Friday: “It’s appropriate … for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate,” according to Reuters.

The prospect of a rate hike could spook emerging markets: An 11-week run of net inflows into emerging markets broke on 11 May as speculation began to mount that the Fed would hike rates. EFG Hermes Research estimates that “every USD 1 bn in EM passive outflows would imply outflows of c.USD 20 mn MENA MSCI EM stocks and c. USD 14 mn from FTSE EM members (only UAE & Egypt).” All of this, of course, comes in the run-up to Ramadan and the summer slowdown, suggesting it we may be in for a few months of tough sledding.

Emerging markets may be better positioned to absorb a rate hike now than in December 2015, when the first hike since 2006 and fragility in EM sent markets tumbling, according to BlackRock Emerging Markets Crossover Team chief Amer Bisat. Bisat says China’s recovery is better “anchored” now than it was at the end of 2015 and commodities prices have stabilized, if not improved, suggesting EM may be “better positioned” to handle a rate increase this time around. (Watch on Yahoo Finance, run time 3:33).

But Morgan Stanley is perhaps more bearish than ever, as we first noted last week. Enter Morgan Stanley Global Head of Emerging Markets Fixed Income Strategy Gordian Kemen, who says the fed’s rate hike comes at exactly the wrong time for EM: China’s growth outlook for 2H2016 is grim, and oil is the only commodity that’s really experienced much of a rally, he counters. (Watch on Bloomberg Markets, run time: 3:11)

Against that backdrop: The Central Bank of Egypt’s Monetary Policy Committee will meet on 16 June and 28 July, in each instance once day after the Fed makes its decision on interest rates.

The race against time in the search for EgyptAir flight 804’s black boxes dominated coverage of Egypt in the international press this weekend, as we note in Speed Round, followed closely by reports on sectarian violence in Upper Egypt. The latter came after a 70 year-old Christian woman was violently assaulted, shorn of garments and paraded through streets near Minya. The attack was prompted by rumors the woman’s son was dating a Muslim girl. Coverage in the Guardian is representative.

Roger McShane, Middle East correspondent for The Economist, knows crossing the road in Cairo is hard. Veteran Cairo journalist Max Rodenbeck told McShane, very soundly, not to worry about terrorism but that he is “much more likely to be hit by a car.” The khawaga’s coming-of-age happened when he “recently received a great, if unofficial, honour. When crossing the Corniche, a group of locals used me as their sherpa. With a new sense of pride, I dodged the traffic and made my way across this fascinating city.”

To “prevent the collapse of Egyptian tourism,” Al Arabiya English’s editor-in-chief Faisal J. Abbas says Egypt needs “an immediate review of all security and safety procedures in airports and planes. There must also be a mechanism to control and assess the performance of security and customs employees and put an end to negligence.” Abbass was not happy to witness a young woman who, after being not allowed to check in “a huge package,” she “called someone, then gave her phone to the employee who was frightened out of his wits once he realized who he was talking to. It all ended in the woman’s favor without further inspection and without her paying for the extra luggage.”

The ship has already sailed for British tourists, who are now heading to Spain, Portugal, and Cyprus instead, according to The Independent. The paper notes that “although the Foreign Office recommends only essential flights to or from Sharm el Sheik, their general travel warnings for Egypt do not extend to the tourist areas along the Nile river, or the Red Sea resorts.”

Cairo has joined the band calling for the release of jailed Palestinian political activist Marwan Barghouti, Al-Monitor’s Ahmed Fouad writes. Barghouti is seen as the most suitable candidate to transcend the rift between Hamas and Fatah and head the “elected decisive regime, especially given his popularity and history that would push rival organizations to work together under his leadership.”

Operation Red Falcon: “Early on the morning of September 1, 1996, the Israeli military began moving troops to the Syrian border in preparation for a war they were convinced was imminent. The military’s actions were based on top-secret intelligence-that Syria was about to launch a surprise attack-passed on by an informant, a general at the center of Syria’s Supreme Military Council, code-named Red Falcon… The attack never materialized… a legendary Mossad operative… had been arrested on suspicion of fabricating the intelligence that had brought Israel to the brink of war. (Read Operation Red Falcon by Ronen Bergman, word count: c.17.5k words)

The final days of last week were busy for President Abdel Fattah El Sisi on the diplomatic front. El Sisi met Wednesday with Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan for wide-ranging talks on regional, economic and security cooperation. Also on Wednesday, El Sisi met with Canadian Foreign Minister Stéphane Dion to discuss strengthening bilateral ties and the Israeli-Palestinian peace process. El Sisi met Palestinian president Mahmoud Abbas yesterday, where the two “exchanged views on recent international efforts to resolve the Palestinian issue, mainly French efforts and the conference of the international support group that will take place in Paris on June 3,” Ittihadiya said.

Closer to home: El Sisi urged senior staff to get out of low gear on the Grand Egyptian Museum in a meeting on Thursday with former PM Ibrahim Mahlab (now the president’s point man on mega-projects) and Armed Forces Engineering Corps boss Gen. Kamel El-Wazir.

Senior figures in Israel’s natural gas sector expect an agreement to export natural gas to Jordan will be signed soon, according to Globes. That’s one example of a situation where Israel has the opportunity to take advantage of the gas not only for its own internal benefits but for a broader geopolitical benefit," Noble Energy’s senior VP Keith Elliott says. The Jordanian parliament also approved investments by Israeli companies in Jordanian infrastructure projects. Globes’ Hedy Cohen says the only obstacles remaining for a complete agreement between Israel and Jordan are the poor relations between the two countries and the regulatory issues in Israel. Israel is also looking to finalize an export agreement with Egypt, and Egypt is currently buying Jordan’s excess regasified LNG, with a plan to commission the FSRU docked in Aqaba fully from 2017.

Egypt’s fuel subsidy bill dropped 27% in the first nine months of FY 2015-16 to EGP 41 bn, an Oil Ministry official told Reuters. For the whole fiscal year, the subsidy bill is expected to come in at EGP 45-48 bn, he added.

The Electricity Ministry has agreed to setting USD 0.047 per KW for 25 years as the feed-in tariff rate for a 250 MW wind farm in the Gulf of Suez belonging to a consortium of Toyota, Orascom and GDF Suez. That will become the standard for negotiating all subsequent feed-in tariff contracts, a ministry source tells Al Borsa. The ministry will sign the final agreements with the consortium for the wind farm in June, and is ironing out the clause on a guarantee from the Finance Ministry.

The National Authority for Potable Water and Sewage will issue tenders for four desalination plants worth a combined EGP 500 mn at the start of the next fiscal year, sources told Al Borsa. The projects are in Red Sea governorate, Marsa Matruh, and South Sinai. Each plant has a capacity of 30k cubic metres and a cost of over EGP 100 mn, the source added. The Authority is leaning towards tasking the Armed Forces Engineering Department with two of the projects due to their proximity to international borders.

Land cultivated for rice production has grown to 1 mn feddans from a previous high of 400k feddans, the head of the irrigation authority told Al Borsa. 60% of the planted rice is in violation with government regulations, but the farmers are trying to benefit from the increase in prices, he explained. This is causing a shortage of water in in some governorates, threatening agriculture generally.

The Industrial Development Authority (IDA) is reportedly considering extending the deadline for submitting offers on cement licenses to the end of June from 31 May in what Al Borsa suggests is a move to allow possible bidding consortia to form. The move comes at the request of six cement companies who are forming partnerships, said a source from the IDA. In other words: Industry interest in the licenses is limited.

As we note in today’s speed round, the health ministry is backpedaling to address significant price gouging after it moved to let manufacturers raise prices on low-cost compounds, Al Shorouk reports. The Health Ministry had instituted a 20% price increase for compounds under EGP 30 per pack and also added an extra EGP 2 to compounds sold at under EGP 10. The problem is that compounds are priced both by package and by blister pack. For some producers, the blister packs cost under EGP 10, and multiple packs of it are included in one box. Manufacturers applied the EGP 2 hike to each blister pack, sending the cost per box into the stratosphere. Case-in-point is Rivo, a cheap, widely-used analgesic whose tablets were sold separately for EGP 0.75 and a box for EGP 15. The EGP 2 increase was applied per tablet, bringing the price of a box to EGP 55 as a result. The doctors’ syndicate acknowledged the unintended consequence of the policy shift and the increase in the prices of compounds targeting the poor. It called on the government to revisit and revise its decision, according to Al Mal.

The New Urban Communities Authority will begin accepting bids to develop commercial, recreational and services outlets and facilities in the Dar Misr housing project today. Companies will be bidding for 44 plots of land ranging in size from 934 to 93,400 sqm, with projects including a hospital, school, gas station, and a sports complex. Phase 1 of Dar Misr, which hoped to build 31,000 homes has been plagued by numerous delays, prompting NUCA to have a sit down with contractors to pressure them to speed-up development, Al Borsa reports.

Germany will resume direct flights to Luxor on 6 July, said Tourism Minister Yahia Rashed. The Tourism Ministry also plans to grant GCC nationals visa-free entry to Egypt as part of its plans to boost tourism, Al Shorouk reports. The coming period will also see a number of visa restrictions eased and the launch of online visas, said Rashed. The ministry is also planning to establish a direct cruise maritime route with Greece to increase the number of tourists visiting Sinai. Furthermore, the ministry has increased the number of countries it plans to target for promoting tourism to 35 markets from 14. The ministry will launch its promotion campaign in Saudi Arabia this week, ahead of Ramadan, said the minister, adding that bookings and reservations figures point to occupancy rates in Greater Cairo reaching 90%.

A case against Vodafone Egypt, Orange Egypt, and Etisalat Misr over unsolicited call tone ads (known as ringtones in other countries) has been referred to the Prosecutor General’s Office by the Consumer Protection Agency (CPA). All three telecoms failed to comply with a warning from the CPA issued back in February to discontinue the practice, said CPA head Attef Yakoub.

Sales of imported vehicle have dropped by 33% y-o-y in 4M2016 to 33.2k cars from 49.6k cars, while domestically assembled vehicles sales fell by 25.1% y-o-y to 33.2k cars from 44.3k cars, according to the latest Automotive Marketing Information Council, reports Al Mal. Imported passenger cars fell by 31% to 26.9k cars, while domestically assembled passenger cars fell by 27.4% to 18.4k cars. Volumes are down as the import of completely built-up vehicles and completely knocked-down kits alike have been due to the FX shortage.

EgyptAir Cargo plans on buying five new planes for USD 250 mn over the coming five years, said its chairman Basem Gohar. The company is planning on increasing revenues 6% annually, and is patiently waiting on the resumption of flights to Russia. Gohar added that agriculture exports make up 62% of the company’s shipping.

NBE is lending EGP 3 bn to several companies participating in the Administrative Capital, head of medium-sized company financing Sherif Riad told Al Borsa. The loans are going projects in natural gas, steel, cement, and ceramics, in addition to contractors to build concrete manufacturing plants, he added. NBE is looking to grow its medium-sized company portfolio by 13% by 2017 to EGP 12.3 bn, said Riad.

NBE issued an EGP 600 mn letter of credit to El Sewedy Cement last week, reported Al Borsa. The company is using the letter of credit as part of its financial and technical proposal to the Industrial Development Authority to obtain one of the 14 new cement licenses, an NBE official told Al Borsa. Three other companies submitted proposals for letters of credit worth a combined EGP 2.5 bn for the same purpose, but no other letters were issued, the official added.

Orascom Construction announced a sharp rise in net income to USD 23.0 mn in 1Q2016, up from USD 5.8 mn a year earlier. Similarly, EK Holding announced consolidated net income of USD 27.0 mn in 1Q2016, up from USD 13.4 mn a year earlier.

The Industry and Trade Ministry is drafting a law which will provide unlicensed SMEs and businesses with incentives to better integrate them into the formal economy, Al Ahram reports. The law would facilitate access to the CBEs EGP 200 bn SME initiative in exchange for paying a nominal tax which has yet to be set, said Abla Abdul Latif, executive director of the Egyptian Center for Economic Studies and a top economic advisor to President Abdel Fattah El Sisi. The law would also provide alternative avenues for licensing outside the bloated state bureaucracy. Details on the new law will be announced in the coming weeks.

Schengen countries have not imposed an arms sales embargo on Egypt, Germany’s economic affairs and energy minister told RIA Novosti, in news covered by Sputnik. "Today’s media reports, which have appeared after the publication of the report of the international human rights organization Amnesty International, are misleading. They created the impression that there allegedly exists an arms embargo in regard to Egypt, which is not true," the ministry’s representative said. The Czech Republic said “the EU embargo applies to all equipment that could be used in internal repressions,” adding that “still do not permit some military materiel exports to Egypt.”

Printing EGP 1 notes was a move meant to strike against coin-hoarders, CBE Governor Tarek Amer tells Al Masry Al Youm. Egypt needs around EGP 900 mn in change circulating, and there are those who have been hoarding change to charge higher prices on goods leading to the decision to print EGP 500 mn in notes, said Amer. in the excitement to get the notes underway, it would appear that the CBE forgot to inform the Egyptian Mint. These decisions are supposed to be made in coordination with the government, but the Egyptian Mint (part of the Finance Ministry) was not officially informed of the decision. Former CBE Governor Ismail Hassan refutes claims that the move will lead to inflation and the decision will only facilitate transactions.

Mubarak-era politician and former Speaker of the Shura Council and Secretary General of the NDP, Safwat Sherif, was sentenced to five years in prison on corruption charges at the conclusion of his retrial, Al Mal reports. Sherif’s sons Ehab and Ashraf received five-year and ten-year sentences respectively, and all three were ordered to pay EGP 209.8 mn. The Court of Appeals had overturned a previous sentence of seven years and ordered a retrial.

Cairo is the third-fastest growing city in Africa: Lagos, despite already being Nigeria’s largest city, is the fastest growing city in Africa, according to CNBC. It is followed by Kinshasa, Cairo, and Luanda, respectively. “The figures are calculated using actual population figures for 2010 and forecasts for the likely populations in 2030, taken from 2014’s UN World Urbanization Prospects report.” The question being raised now is whether the cities’ infrastructure can handle that growth; Lagos’ population is growing at 77 people an hour, “that’s 1,848 people a day, or 12,946 a week, or 56,179 a month – roughly the equivalent of the entire population of Greenland moving to Lagos every month.”