Tuesday, 7 June 2016

The VAT cometh…


What We’re Tracking Today

Former anti-corruption watchdog Hisham Genena is due in court today to face charges of disseminating false news and disturbing the peace, as we noted on Sunday. The former head of the Central Auditing Organization, Genena was dismissed in March by presidential decree. The New York Times’ Declan Walsh has a brief interview with Genena in this morning’s edition of the Grey Lady.

Planning to go to Sokhna this weekend? You may want to let the kiddies in the water: Offshore swimming and sport fishing have been banned in Ain Sokhna beaches in the wake of last weekend’s shark attack, the Associated Press reports. “Environment Ministry officials … say the attack was likely caused by the combination of fishing and swimming in the same spot… Hotels in the area were instructed to hire watchmen for their beaches.”

Uber is rolling out cash payments for all clients in Egypt after an initial trial phase, according to an Arabic statement from the company picked up by Al Borsa. We received an email from the company on Sunday telling us that updates to the ride-hailing app’s payment systems could cause our credit cards not to work, which is likely to have sparked the cash rollout. We’ll be back to cashless transactions in the “coming weeks.” No word yet on whether or not you can Uber your kunafa this Ramadan, however. What say you, gentlemen at Uber?

Bernie Sanders was campaigning hard in San Francisco at dispatch time this morning even as the Associated Press reported that a weekend victory in Puerto Rico had put Hillary Clinton over the top, giving her the delegates she needed to clench the Democratic nomination. CNN reports that Sanders is coming under pressure to bow out of the race as California votes today, but Bernie was hearing none of it in a speech broadcast live online by Reuters: At the start of the campaign, he said, “We were [painted as] a fringe campaign with fringe ideas. That is not the case today. … And [Tuesday], in the most important primary in the whole Democratic nominating process, we’re going to win here in California. … We’re going to go into that convention with enormous momentum.” Donald Trump, he said, “will not become president of the United States. In every national poll … we beat him, and we beat him badly.”

When do we eat? Iftar will be at 6:55pm CLT today, while the cut-off for sohour will be at 3:08am CLT, according to Islamic Finder.

Speed Round

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Imported production inputs will be taxed at 1.5% under the draft value-added tax (VAT) legislation due to hit the House of Representatives “within days,” according to Al Mal, which has a long rundown on what it claims is the final draft of the package. Exports will not be taxed as long as the value of goods and services exported is not less the cost of goods and services that went into its production. The draft also confirms a lottery will be put in place to try to clamp down on tax evasion, with the prize pool being 1% of tax revenues collected from the VAT. The draft also appears to corroborate policy amendments and exemptions we previously noted. Consumer staples ranging from infant formula to food commodities will be tax exempt, as will be healthcare, education, banking and financial services, publishing and printing. There’s no word on whether international schools are VAT-exempt, e-commerce transactions are subject to VAT, and you’ll have to hang-on to your VAT records for a period of five years.

(Wondering what a VAT lottery would be all about? As the International Tax Review (paywall) puts it: “Citizens use sales receipts from outlets such as cafes, coffee shops, hairdressers and mechanics to enter the draw,” where prizes can be cash or physical goods. Why? The idea is that the merchant is more likely to give you a legal tax receipt this way — and the government gets pools of data to cross-check in audits. This is what the announcement of winners looks like in Malta (pdf), where the lottery is a big enough deal that it’s a fixture of the local media scene. Taiwan was the first introduce a VAT lottery in the 1950s, Malta was the first in the European Union to do it in 1997. Slovakia introduced its “compliance lottery” in 2013 and Portugal in 2014. Really geeking-out on the subject? The European Commission has published a white paper on the topic: “Improving VAT compliance – random awards for tax compliance” in pdf.)

Meanwhile, Finance Minister Amr El Garhy confirmed in a statement that the State Council (Majlis Al Dowla) reviewed the amendments (recommending minor changes) and the cabinet will introduce them to the House of Representatives in the coming days. We had reported on Sunday that Deputy Finance Minister Amr Al Monayer expects the House wouldn’t discuss it until after the Eid Al Fitr break. El Garhy added that the ministry will be drawing up special tax code for SMEs, which would encourage them to participate in the formal tax system.

Elsewedy Electric was awarded two underground transmission line projects in Egypt worth EGP 671 mn, according to an emailed statement. The projects will be executed over six months from the signing of the contracts. “The first project includes the engineering, manufacturing, supply and installation of underground cables 220 kV XLPE copper and fiber optic cables complete to connect Elhadhaba (2) 220kV substation with Cairo 500kV substation on a turnkey basis, with a total value of EGP 510 mn. The second project includes the engineering, manufacturing, supply and installation of underground cables 220 kV XLPE copper and fiber optic cables complete to connect Imbaba substation with West Cairo substation on a turnkey basis, with a total value of EGP 161 mn.”

Abou Hashima acquires 50% of Misr Cinema Company: Ahmed Abou Hashima’s Egyptian Media Company has acquired 50% of the Misr Cinema Company. Al Mal says Abou Hashima plans to increase film and TV drama production at the company, using the big screen to showcase the “true image” of Egypt. Misr Cinema Company is reportedly owned by producer Kamel Abu Ali and Naguib Sawiris. Under the new partnership, Misr Cinema will produce five feature films and five television shows per year, said company chairman Abu Ali. Abou Hashima’s investment has raised the company’s capital to EGP 100 mn from EGP 65 mn, he added, according to Al Mal. The value of the transaction was not disclosed.

EGP strengthens on the parallel market: The EGP has reportedly gained about EGP 0.40 on parallel market, strengthening to EGP 10.60 per USD 1.00, Al Ahram reports. Al-Borsa, meanwhile, says the EGP strengthened to 10.75 yesterday from 10.90 the day before. Yesterday also marked the beginning of circulation of EGP 1 banknotes carrying current CBE Governor Tarek Amer’s signature.

Meanwhile, macro research house Capital Economics is predicting further devaluation soon, according to a research paper obtained by Youm7. The move would fuel inflation and see the Central Bank of Egypt raise interest rates to bring it in check as a result.

NI Capital, a subsidiary of the National Investment Bank, will manage the listing of state-owned companies on the EGX after Ittihadiya directed the Investment Ministry to reach an agreement with it, sources told Al Mal. The list of companies NI Capital is due to bring to the market has not yet been made public, and Al Borsa says NI Capital will be in charge of bringing in outside advisors to run the actual transactions. Investment Minister Dalia Khorshid will meet with NI Capital later this week to work out a framework for the IPOs, said the minister said at a Sunday press conference, Al Mal reports. This would be the first concrete confirmation that IPOs of state-owned companies will go ahead, despite reports that the policy was being resisted by the public enterprise minister.

After saying on Sunday that she was in talks with the Finance Ministry to bring back investment incentives for free-zone companies, Investment Ministry Dalia Khorshid took it one step further to announce that the ministry is planning three new free zones. While Khorshid did not specify locations, Al Borsa is betting on Minya, Assiut, and Fayoum. Khorshid also said she was reviewing requests by investors’ associations from Taba and Nuweiba to be granted special economic zone status in the vein of the Suez Canal Zone.

Also coming out of Khorshid’s conference on Sunday was the announcement that she had begun tallying projects that could be funded from the SAR 60 bn Saudi-Egyptian Investment Fund signed during King Salman’s visit in April, Al Borsa reports.

Khorshid also revealed that the government had significantly reduced the projected levels of private sector investment in the economy next fiscal year due to “major challenges”, Al Borsa reports. Private sector investment in the FY2016-17 fiscal year is expected to fall to EGP 292 bn, down from 19% from EGP 360 bn this year. This comes as the government is projecting total investments (both private and public) to grow to EGP 531 bn, up from EGP 408 bn this year, suggesting significant state spending will continue next year.

Khorshid also confirmed that the Investment Ministry is amending clauses on acquisitions in the Capital Markets Law’s executive regulations, referencing a move to limit the market share of any one brokerage house or group of houses that share a corporate parent, which we noted last week. Further amendments also include minority shareholders regulations, which were not detailed in Al Ahram’s coverage.

MTI, a subsidiary of MM Group for Industry and International Trade, is planning to list on the EGX before the end of 2016, Al Mal reported. Beltone Financial Holding will reportedly manage the issuance, which is slated for 3Q2016. The exact percentage of shares that will be issued is yet to be determined.

Actis’ sale of 7% of Edita’s shares generated a total of EGP 905.8 mn according to a bourse statement from Edita. The sale wasannounced last week. Edita said the sale was conducted by Actis’ subsidiary Africa Samba BV, which sold 50.7 mn shares at an average price of EGP 17.85 per share. Following the transaction, Africa Samba retains an 8% stake in Edita.

Moody’s maintained its stable outlook on Egypt’s banking system, with the rating agency expecting banks to continue to benefit from a stable deposit base, high local currency liquidity, and strong profitability over the next 12-18 months, according to a report issued yesterday (paywall). “We expect Egypt’s gradually recovering economy to continue to provide banks with plenty of business opportunities,” says Melina Skouridou, assistant vice president at Moody’s. It also anticipates GDP growth will slow to 3.5% for FY2016 compared to 4.2% in FY2015. However, it expects growth to hasten to 4.0% in 2017. “As a result, we anticipate domestic loan growth of around 15% over the next 12-18 months, although Egyptian banks’ increasing exposure to the sovereign will remain a key risk, given modest capital buffers.”

E-commerce in Egypt will hit USD 770 mn in 2015 and is set to reach USD 1.3 bn by 2016, Souq.com Egypt CEO Omar El Sahy told Reuters on Sunday. He added that there are currently around 144 e-commerce firms in Egypt competing for a customer base that is expected to reach around 20 mn next year, an increase Al Sahy attributes to the surge of internet users in the country after the 2011 revolution.

MOVES- Ahmed El Guindy, who we reported had stepped down as head of investment banking at EFG Hermes in February, has left the company, a spokesperson for EFG told Reuters on Monday. El Guindy’s last working day was May 31, the bank told the wire, adding that El Guindy would “continue to be closely associated with EFG Hermes in a capacity that we will disclose in the right timing.” Meanwhile, two sources close to the matter said El Guindy was setting up his own investment company that “would work with small and medium-sized enterprises, with one adding that the firm would be getting seed money from EFG Hermes.” El Guindy handed over earlier this year to co-heads of investment banking Mostafa Gad and Mohamed Fahmi, with Mohamed Abou Samra becoming deputy head of IB.

MOVES- The Carnegie Endowment for International Peace announced the appointment of Dr. Maha Yahya as the director of the Carnegie Middle East Center in Beirut.

Regulator alleges Al-Ahram for Printing and Packaging cooked its books: In a remarkably unusual case that speaks to the shifting balance of power in government, the Egyptian Financial Supervisory Authority (EFSA) has filed a case against state-owned Al-Ahram for Printing and Packaging, accusing its auditors of fraud and of having signed off on what it says are inaccurate financial statements, Al Borsa reported on Monday. EFSA alleges that financial statements provided to it in September of last year showed signs the company was cooking its books and has handed the case over to the Prosecutor General’s Office for further investigation. Al-Mal has more.

Abraaj Group announced it acquired a minority stake in Turkish bank Fibabanka through one of its funds. “The investment from Abraaj will be used by Fibabanka to expand its franchise and support its growth.” CEO Arif Naqvi says “Abraaj’s partnership with Fibabanka marks our eighth global investment in the banking sector and our ninth in Turkey. It represents a compelling opportunity to tap into the underpenetrated banking sector in Turkey where 40 percent of the population remains unbanked and household leverage ratios are low as compared to Europe.” Reuters says Abraaj bought a 9.95% stake in Fibabanka, but further details were not disclosed. Partner and Regional Head of Turkey and Central Asia at The Abraaj Group, Selcuk Yorgancioglu, says the Group aims to “close at least one, possibly two or three more [agreements] this year. We love healthcare. People don’t postpone their healthcare spending. We also love FMCG. For us in FMCG, from food to diapers, everything is attractive. Although we look into B2B, we are keen on B2C.”

The International Finance Corporation (IFC) has invested USD 25 mn in Gulf Capital’s second private debt fund, “GC Credit Opportunities Fund II.” The fund held a first closing in January 2016 and targets a final close of USD 250 mn by the end of 2016. Gulf Capital says the fund makes it the largest private debt player in the Middle East. “Gulf Credit Opportunities Fund II seeks to provide tailored financing solutions to mid-market companies in the Middle East, North Africa, Turkey, and Sub-Saharan Africa.” The fund will invest in companies generating revenues of USD 10 mn to USD 200 m, operating in “growth sectors that are consumer focused and that are defensive in nature.”


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The Macro Picture

Federal Reserve Chair Janet Yellen was mum on the timing of another rate hike during a speech yesterday in Philadelphia, which is being viewed as a signal that a June move isn’t in the cards, according to Bloomberg. Fed caution isn’t not necessarily bad for EMs, according to the Financial Times (paywall). “The [USD] has already gone sharply into reverse after rallying during all of May … [which] should also bring relief to liquid (and consequently battered) EM currencies … and of course, it will make life easier for China, whose currency was coming under pressure again due to [USD] strength.”

Speaking of China, President Xi Jinping avoided talk of contention between his country and US on Monday at the start of the US-China Strategic and Economic Dialogue. Bloomberg estimates Xi may be more concerned about the domestic economy as industrial production slows and Goldman Sachs put its debt levels at much more than anticipated. Meanwhile, Chinese Finance Minister Lou Jiwei wasn’t quite so composed, expressing a “rare display of anger” at US criticism on steel oversupply, according to the FT (paywall).

Egypt in the News

Doom and gloom merchants are “wrong on Egypt,” Linda S. Heard writes for Gulf News, citing the 91% approval rating President Abdel Fattah El Sisi enjoys according to Baseera polling. Lots of negative reporting overlooks “the laundry list of achievements over the past two years.” Heard says El Sisi strengthened Egypt’s defence capabilities, supplemented energy requirements through renewables, tackled the “slums” problem, reduced the dependency on imported wheat, and is working on developing Sinai.

Egypt’s plans to fast track its power plants look to be panning out as Siemens’ Beni Suef plantis ahead of schedule, according to The National. “I think it was right also what president Sisi has done to take a directional approach at the beginning,”says said Dietmar Siersdorfer, the chief executive of Siemens Middle East. “To say, ‘yes, we do this now’, because if he would have started a negotiation process and a tendering process for two or three years nothing would have been developed and we would still be in the same situation and we would still have three summers gone without any stability of supply.”

In a separate piece, The National writes thatthe pricing and financing for all three Siemens power plant were a milestone for Egypt, with Siersdorfer the price at which Siemens agreed to build the plants is “really something that is shaking up the industry … It was a very competitive pricing, not seen in this country or anywhere else.” Egypt locked-in a price of USD 500 per KW compared to industry averages of USD 700-900, he says. Bringing in export credit agencies to secure the facilities was also a feat, seeing as it hasn’t been done in Egypt “for years,” he says, and made it “viable for the banks to go for the project."

Egypt’s nuclear energy plans are “pure folly” due to the dangers of nuclear power and its dependency on foreign knowhow, according to Aljazeera’s Khaled Diab.

An Egyptian school textbook showcases President Anwar Sadat next to Israeli Prime Minister Menachem Begin and Haaretz is making a fuss about it. “‘The Geography of the Arab World and the History of Modern Egypt,’ issued by the Egyptian Education Ministry, does not forget to portray Israel as a colonialist state — but it also stresses the importance of the Israeli-Egyptian peace accord,” Zvi Bar’el writes. He cites a researcher as saying that this could indicate “a new spirit wafting” from the current government of President Abdel Fattah El Sisi.

Worth Reading

The Egyptian satirist who inspired a revolution — in the nineteenth century: Anna Della Subin and Hussein Omar write for The New Yorker suggesting that satire might have led to an uprising in Egypt in the 1800s. “Then, just as now, Egypt’s economy was in chaos, and the country was being kept afloat by hefty loans from foreign benefactors. The extravagant Khedive Ismail … had gone wild with ambitious building projects, for which he had borrowed huge sums from British and French banks. The Khedive’s European creditors in turn installed themselves in his cabinet, and began to buy up large swaths of Egypt’s land and infrastructure, while Ismail imposed steep taxes on the poor.”

Subin and Omar point to a satirical newspaper called Abou Naddara Zarqa that has only recently been digitized by German academics, “yet in Egypt today the paper remains largely forgotten, and, like so many of the documents relating to Egypt’s own past, it is nearly impossible to find physical copies inside the country.” Cue all the conspiracy theories: Abou Naddara was created by James Sanua, an Egyptian-Italian Jew born in Cairo in 1839, who was also a freemason who spoke a dozen languages. Subin and Omar said Abou Naddara Zarqa inspired Ahmed Urabi to lead “led thousands of peasants and soldiers in protests at Tawfiq’s palace, and for a brief three months the revolutionaries dethroned the Khedive and ruled in his place.”

Image of the Day

Performers on El-Moez Street welcome Ramadan, a single shot on the FT Photo Diary blog by the Associated Press’ Amr Nabil. Nabil and Reuters’ Amr Abdallah Dalsh are two of the most experienced and talented photojournalists working in Egypt today.


Aker Solutions to deliver umbilicals system for Zohr

Norway’s Aker Solutions won a contract to deliver Petrobel, an Eni JV in Egypt, its “longest-ever” umbilicals system at the Zohr offshore gas field. Aker says the agreement with Petrobel is worth NOK 1 bn (USD 121.8 mn) and involves the delivery of 180 km of steel tube umbilicals that will connect the Zohr subsea development to an offshore control platform. The umbilicals system is expected to be delivered in mid-April 2017 and the company says “the work will be led by Aker Solutions’ subsea division in Oslo and manufacturing will start immediately at the umbilicals plant in Moss, Norway.”

Talks with Germany to get in on funding 1 GW solar plants

Egypt is negotiating with Germany for funding to support the construction of solar farms with a generation capacity of up to 1 GW, International Cooperation Minister Sahar Nasr told Al Borsa on Monday. The funding should be in place in time to allow the projects to begin work by year’s end, according to a ministry official. "We are seeking funding for the projects, to prepare for offering tenders," said New and Renewable Energy Authority head Mohamed Salah El-Sobky. The authority is negotiating for funding with the International Finance Corporation, the EBRD, the German KfW Development Bank, the African Development Bank, the Academy for International Cooperation in Germany, and the European Investment Bank.

No Daba’a agreement yet

Electricity Minister Mohamed Shaker returned from Moscow having not signed the final agreements for Daba’a nuclear power plant. He said during a debrief to President Abdel Fattah El Sisi that talks are in their final stages, AMAY reports. The president urged the minister to complete the negotiations and sign the agreements ASAP.

Basic Materials + Commodities

Dina Farms set to boost yoghurt sales by 60% in Ramadan, Juhayna looks at 40% increase in production, Domty 12%

A 60% seasonal spike in yoghurt sales and a 16% rise in milk volumes will help Qalaa Holdings’ Dina Farms grow sales in Ramadan to EGP 18 mn from EGP 16 mn last year, Dina Managing Director Amanallah Saad told Reuters. The nation’s largest independent dairy producer is also looking to boost annual sales to EGP 156 mn this year and EGP 200 mn in 2017 from EGP 136 mn last year, after adding a new milk production line with a capacity of 160k packs daily that will begin production in October. A new EGP 30 mn yoghurt factory will also be inaugurated before Ramadan next year, added Saad. Reuters notes that EFG Hermes is advising Qalaa on the sale of Dina.

Juhayna is also getting in on the Ramadan train, with the company projecting a 40% rise in juice and milk sales, according to Al Mal on Monday. Production is set to hit 120,000 tonnes during Ramadan compared to 90,000 tonnes now. The “next phase” will see an increase to 180,000 tonnes, the source added. Domty will also increase production during the Holy Month, upping it by 12% through 14,000 additional cheese containers and 10,000 juice boxes, a sales rep told Al Mal.

Unilever Mashreq completes EGP 250 mn detergent factory

Unilever Mashreq has completed building a detergent factory in Sixth of October at a cost of EGP 250 mn, Managing Director Ashraf Bakry told Al Borsa. The company has also completed 70% of development on the Supply Ministry’s consumer complexes, which includes over 5,000 branches and 25,000 retail outlets throughout the country, he added.

Wheat season to end mid-June, supply reaches 4.7 mn tons

The domestic wheat harvest season will officially end on the June 15, with Supply Minister Khaled Hanafy telling Al Borsa that the state has bought 4.7 mn tonnes of local wheat, up 5.5% from the ministry’s target of 4-4.5 mn tonnes. Hanafy refuted reports that supply would hit 5 mn tons by mid-June, with the daily supply rate dropping 85% compared to the mid-season rate, according to an unnamed source. The ministry is currently in talks with the Principal Bank for Development and Agricultural Credit about providing benefits to farmers who produced amounts exceeding their targets. The bank is due to settle with farmers within three days at the latest. Meanwhile, mills are currently awaiting a decision from the ministry to begin the wheat-grinding process as the state is temporarily halting wheat imports to try to curb the mixing of locally sourced and imported wheat.


Oriental Weavers sales down 15% in 2Q2016 due to devaluation, Beltone predicts

Devaluation of the EGP will chip away at 15% of Oriental Weavers’ sales in 2Q2016, Amwal Al Ghad quotes a Beltone Financial report on Monday. The forecast takes into consideration a planned 7% price hike as a means to mitigate the impact of the devaluation, which is driving up cost production inputs. However, the company’s high-end products are meeting increased domestic demand following recent restrictions on carpet imports. The firm reported a consolidated net profit of EGP 94.17 mn in 1Q2016, down from EGP 152.67 mn in the same period last year.

Health + Education

Consumer Protection Authority calls Egyptian Insurance Association–Healthcare Companies Association MoU a monopoly

The Consumer Protection Authority (CPA) claims an MoU inked between the Egyptian Insurance Association and the Healthcare Companies Association violates the nation’s anti-trust act, Al Mal reported Monday. The authority says the agreement prevents consumers from choosing the coverage and companies they want based on price and quality. Meanwhile, head of the Healthcare Companies Association Ehab Abo El-Magd tells the paper that the CPA has “misunderstood” the agreement, which aims to structure the fragmented insurance market as “so much competition led to a degraded quality of service.”

Real Estate + Housing

MNHD in talks with banks for EGP 1.1 bn loan

Madinet Nasr Housing and Development is in talks with banks to secure a seven-year syndicated loan worth EGP 1.1-1.2 bn to finance its co-development project with Palm Hills near the new administrative capital, unnamed sources told Al Mal on Monday. The company has asked banks to submit financing terms and conditions with the aim of forming a banking consortium to secure the funding. In September, four banking consortiums were reportedly competing, with the first consisting of National Bank of Egypt and CIB, the second Arab International Bank and Arab Bank, the third Ahli United Bank and Banque du Caire, and the fourth Banque Misr and Banque Audi.

Kuwait’s Amwal Real Estate set to build EGP 1.5 bn compound in Egypt

Kuwait-based Amwal Real Estate, a subsidiary of Eskan Global, is set to commence building a housing compound over an area of 180 feddans on the Cairo-Alexandria Desert Road with an investment value of EGP 1.5 mn this year, Al Mal reported. The project is the company’s first in Egypt, with construction beginning as soon as land ownership and licensing issues are resolved, said Eskan Global Chairman Mahmoud Afifi.

Al Ahly for Real Estate Development to develop tourism resort in 2017

Al Ahly for Real Estate Development Company is set to build a tourism resort on the North Coast over an area of 300 feddans in partnership with an undisclosed real estate investment company, Al Ahly Chairman Hussein Sabbour told Amwal Al Ghad. Construction is scheduled to begin at the beginning of next year, with the project duration lasting two and a half years, he added. The resort will include two hotels in addition to luxury apartments and villas.


Tourism ministry to launch tourism promotion campaign within days

The Tourism Ministry is launching the “This is Egypt” tourism promotion campaign within days, Tourism Promotion Authority head Samy Mahmoud said, Al Shorouk reported Monday. Fingers crossed this one doesn’t backfire like last year’s. The campaign is said to be “the largest since 2011” and targets Arab tourists starting Eid El-Fitr and the summer. It aims to boost the number of Arabs tourists by 20% from over 1.7 mn last year, Mahmoud said. Expect to see ads during the endless commercial breaks this Ramadan.

Automotive + Transportation

Consumer protection Authority in talks with car dealers over recall of Japanese cars with faulty Takata-made airbags

The Consumer Protection Authority is in talks with a number of car dealers on the recall of Japanese passenger cars with faulty airbags, Authority head Ateb Yaqoub told CBC Extra TV channel Monday, Al Mal reported. Last month, Japan said it would recall 7 million more cars with Takata airbags amidst a global safety scandal, The New York Times reported. Honda Egypt had said in late March 2016 it was asking owners of CR-V, Citi, Jazz and Accord passenger cars manufactured between 2004 and 2011 to visit their local dealer to see whether their vehicle were covered in the sweeping recall.

Petromin launches new headquarters in Cairo

Lubricant specialist Petromin has launched new headquarters in Maadi, Petromin Egypt General Manager Hisham Bekheit told Al Borsa. The company is looking to invest EGP 250 mn into expanding its network in Egypt, which includes gas stations, the Petromin Express service stations, and an engine oil factory by 2020, he added. The company has added 18 gas stations to its network over the last 18 months, said Bekheit.


SME-focused legislation to be finalised; IDA could become sole allocator of industrial land

Prime Minister Sherif Ismail has instructed his cabinet to finalise legislation meant to alleviate pressures on SMEs, Al Mal reported on Monday. Among the measures is a bill that would grant the Industrial Development Authority exclusive responsibility for managing the allocation of industrial land as well as a bill that would facilitate credit for SMEs by setting out new financing mechanisms, as previously announced by Trade minister Tarek Kabil, among others.

Egypt Politics + Economics

Suez Canal Zone discusses amendments to development plan with Booz Allen Hamilton

The Suez Canal Economic Zone is working with Booz Allen Hamilton to amend the zone’s development plan, the company’s Senior Vice President Nabih Maroun told Al Shorouk. If an agreement is reached with the authority, Booz Allen Hamilton will lead a consortium of specialized international companies to re-envision the development plan, he added. The original development was drawn up by Dar Al Handasah, but “lacks depth in terms of the kind of required investments and necessary infrastructure,” he added. The news comes amid reports Booz Allen is looking to grow its business in Egypt, according to a fairly detailed report by Daily News Egypt.

On Your Way Out

EgyptAir “lovejacker” Seif Eddin Mustafa is fighting extradition to Egypt from Cyprus, The Associated Press reported. Mustafa says he was motivated by his opposition of “Egypt’s military-backed government while his extradition could endanger him because authorities in his homeland don’t respect human rights, his lawyer said Monday.” The prosecution witness, however, said “Egypt’s extradition request has nothing to do with his politics.”

UCLA to digitise ancient manuscripts in Egypt: UCLA Library is set to offer digital copies of 1,000 rare Syriac and Arabic manuscripts dating from the fourth to the 17th centuries housed in the the library of St. Catherine’s Monastery at the foot of Mount Sinai — the oldest continually operating library in the world, according to a statement from UCLA yesterday. The three-year project was made possible by a major grant from the Ahmanson Foundation.

A Cairo prosecutor ordered on Monday the detention of 12 education ministry officials for 15 days pending investigation into the leaking of Thanaweya Amma exams, Al Mal reported. A judicial source said the officials are members of the council that drafts the exams and officials responsible for the printing. The Arabic exam was leaked over the weekend, while the religion exam was canceled on Sunday for fears of it having leaked, ministry spokesperson Bashir Hassan said. Fingers were unsurprisingly pointed at the Muslim Brotherhood for having “hacked” into the ministry, according to Hassan.

The markets yesterday

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USD CBE auction (Tuesday, 31 May): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Monday, 6 June): 10.60 (-0.40 from Tuesday, 31 May, Al Ahram)

EGX30 (Monday): 7,639.59 (+1.01%)
Turnover: EGP 536.6 mn
EGX 30 year-to-date: +9.04%

THE MARKET ON MONDAY: EGX30 closed a tad below its highest level of the day at 1.0% up. Other EGX indices came in mixed as the equally weighted EGX50 closed flat while the broader EGX70 ended the session 0.8% down. Today’s most significant gainers were Orascom Construction, EFG Hermes, and Elsewedy Electric. Meanwhile, Qalaa Holdings, Edita, and Arabia Investments came in as today’s biggest losers. At a market turnover of EGP 536.6 mn, foreign investors were the sole net buyers of the day. Regionally, Saudi Arabia’s TASI jumped 1.0% while Dubai’s DFM General Index closed the session marginally in the red.

Foreigners:Net long | EGP + 168.1 mn
Regional:Net short | EGP – 24.2 mn
Domestic:Net short | EGP – 143.9 mn

Retail: 41.7% of total trades | 34.0% of buyers | 49.4% of sellers
Institutions: 58.3% of total trades | 66.0% of buyers | 50.6% of sellers

Foreign: 40.6% of total | 56.3% of buyers | 25.0% of sellers
Regional: 5.9% of total | 3.7% of buyers | 8.2% of sellers
Domestic: 53.5% of total | 40.0% of buyers | 66.8% of sellers

WTI: USD 49.67 (+2.16%)
Brent: USD 50.55 (+1.83%)
Gold: USD 1,247.50 / troy ounce (+0.37%)
Nymex (futures prices) USD 2.44 MMBtu, (+1.67%, July 2016 contract)

TASI: 6,477.07 (+1.00%) (YTD: -6.29%)
ADX: 4,313.31 (+0.41%) (YTD: +0.14%)
DFM: 3,279.23 (-0.18%) (YTD: +4.07%)
KSE Weighted Index: 354.93 (+0.42%) (YTD: -7.01%)
QE: 9,638.95 (+0.71%) (YTD: -7.58%)
MSM: 5,816.64 (-0.03%) (YTD: +7.59%)
BB: 1,116.39 (+0.12%) (YTD: -8.18%)

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13-14 June (Monday-Tuesday): Portuguese Foreign Minister Augusto Santos Silva is due to visit Egypt and may oversee the inking of a cooperation agreement between GAFI and the Portuguese Agency for Foreign Investment and Commerce

14-15 June (Tuesday-Wednesday): U.S. Federal Open Market Committee meets to discuss interest rates. Fed Chair Janet Yellen will hold a press conference on Wednesday after the meeting.

16 June (Thursday): The Central Bank of Egypt’s Monetary Policy Committee meets to discuss interest rates.

23 June (Thursday): It’s Brexit Day as the United Kingdom holds a referendum on whether or not to leave the European Union.

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

05-08 September (Monday-Thursday): The 6th EFG Hermes London MENA and Frontier Conference, Emirates Arsenal Stadium, London, U.K.

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

19-20 September (Monday-Tuesday): Euromoney Egypt, venue TBD

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, Cairo International Convention Centre

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

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

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

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