What you get when molten aluminum meets ant hill.

It’s Brexit Day ladies and gentlemen: Voters in the UK head to the polls between 7am GMT (8am CLT) and 10pm GMT (11pm CLT) to decide whether or not to remain in the European Union. There will be no exit polls, so expect results to come in around “breakfast time” on Friday morning, according to the Electoral Commission, or watch as the results trickle in throughout the night. The Financial Times has a primer on what to expect, writing that the picture could be clear by about 3:30am GMT (4:30am) on Friday, and if the result has not been called by the press at 6-7am GMT, “it could be because the numbers are very close.”

On the possible outcome: Two polls suggest the “Leave” camp is edging ahead, Bloomberg reports. The Independent reports that “one of the final polls before the EU referendum has shown Remain with a significant lead,” while the Telegraph writes that “leave given marginal poll lead hours before Brits start voting.” An earlier online poll published by Opinium showed 45% “Leave” and 44% for “Remain,” which is technically “a statistical dead heat.” But even though it’s neck and neck, the Wall Street Journal writes that “respondents across different surveys are increasingly convinced that leaving the bloc would hurt not only the economy, but their personal finances,” which may tilt the vote in favor of “Remain.”

Closer to home: The Mistral-class helicopter carrier Gamal Abdel Nasser is set to arrive in Alexandria today, Al Masry Al Youm reported.

Budget debate: The House of Representatives is set to discuss the state budget in four consecutive sessions starting Sunday, 26 June, Al Mal reported. Finance Minister Amr El Garhy presented an overview of the FY2016-17 budget to the House in May.

Beltone Financial’s general assembly is set to decide on converting a third of its share capital to GDRs when it meets on Monday, 27 June, according to Reuters.

MM Group for Industry and International Trade aims to raise EGP 400 mn from floating 25% of subsidiary MTI on the EGX, a source told Reuters’ Arabic service. The issuance is planned for 3Q2016, the source noted, confirming news we reported earlier in June. A source close to the transaction tells Al Borsa that about 80% of the offering will be to institutions in a private placement and with the rest taking the form of an Egyptian domestic offering. Reports indicate that Beltone Financial is managing the issuance and Zaki Hashem & Partners are the legal advisors.

Egypt ranks at the global median in food security: The Economist Intelligence Unit ranks Egypt in 57th in its 2016 Global Food Security Index (GFSI), along Azerbaijan and Vietnam with an average score of 57.1. The list includes 113 nations. Egypt’s food security score improved by one point when compared to 2015. One key issue that could be improved in Egypt is the cost food: The GFSI points to the tariff rate of 60.6% Egypt applies to food imports, calling it one of the weakest performers in that category. Regionally, Egypt’s food security is only better than that of Jordan, Morocco, Algeria, Syria, and Yemen. Israel and Qatar top the MENA region food security index, ranking 17th and 20th globally, respectively. The landing page of the report is here and you can explore Egypt’s data alone here.

Current budgetary allocations could create a constitutional crisis, former presidential candidate Amr Moussa told Al Ahram. The constitution explicitly binds the government starting FY2016-17 to the minimum spending thresholds of 3% of GDP on healthcare, 4% on education, 2% on higher education, and 1% on scientific research. Moussa explained that Article 124 of the constitution gave the House of Representatives the right to reallocate some spending and, if that resulted in increasing overall expenditures, then the government is expected to cooperate with parliament to find revenue sources. He reiterated the importance of the spending clauses in the constitution, saying that they would address the weaknesses in the healthcare and education sectors.

…Sources from the House Committee on Healthcare told Al Borsa that spending earmarked for healthcare will rise to EGP 76 bn, which al Borsa says is 3% of GDP if calculated to be EGP 2.8 tn (it is actually closer to 2.7%). The committee had hoped to increase healthcare spending to EGP 81 bn, but weakness on the revenue side proved challenging. It has also refused to re-allocate funds for health-related spending to the Ministry of Health: Provisions for water treatment will remain part of the Housing Ministry’s budget, for example, despite being classified as preventive medicine. The House of Representatives could reach a compromise, the chairman of the House Committee on Education, by agreeing to base calculations on the GDP of FY2015-16, an issue left vague by the constitutional clauses. The compromise has already been approved by the House Planning and Budget Committee, as we reported earlier this week.

The EGP weakened on the parallel market yesterday as greenbacks were going for EGP 11.07 per USD 1, traders told Al Borsa. Sources say there is an increase in demand as importers are trying to stock up on foreign currency before Eid Al Fitr to meet future import obligations, an issue compounded by weak supply. Al Mal pegged the parallel market rate yesterday at a weaker level of EGP 11.10 per USD 1 on the back of increased demand.

MOVES- Omar El Sayeh was appointed Chairman of Bank of Alexandria, Al Mal reported. El Sayeh was chairman of Barclays Bank Egypt from 2007 to 2013 and part of management consultants Hugh Latif and Associates. El Sayeh’s LinkedIn page shows he has been in retirement since October 2015.

Swiss food manufacturer Hero MEA is set to complete a USD 5 mn production line upgrade at its Qalyubia factory in November, Managing Director Mahmoud Bazan told Al Borsa. Hero produces 50,000 tonnes of jam a year and aims to boost production by 20% and sales to EGP 700 mn from EGP 640 mn following the production line upgrade, he added.

The Social Fund for Development (SFD) is in negotiations with several international financial institutions to obtain USD 700 mn in financing, Secretary General Soha Soliman said, Al Borsa reported on Wednesday. The SFD is in talks with the World Bank for USD 550 mn to fund SMEs and infrastructure projects and has requested a USD 100 mn loan from the Saudi Fund for Development to fund micro-enterprises, as well as a USD 50 mn loan from the Arab Fund for Development.

And speaking of the Social Fund for Development: SFD Secretary-General Soha Soliman says she has not been offered the post of vice-chair at state-owned Banque du Caire, denying previous reports by Al Borsa, according to a report carried Wednesday by Al Mal.

Domestic banks including CIB and the National Bank of Egypt are reportedly offering finance to solar power projects at an 18% interest rate, sources told Al Borsa. As we had previously reported, international lenders, including the European Bank for Reconstruction and Development and OPEC Fund for International Development, are backing out of their financial agreements due to disputes with the Electricity Ministry over domestic arbitration. The domestic banks include NBE and CIB, the sources added.

Cabinet met yesterday with Prime Minister Sherif Ismail at the head of the table. Among the key decisions minister took yesterday:

• Approved amendments to laws governing the use of state property, including tasking the General Authority for Reconstruction Projects and Agricultural Development with managing land allocated for reclamation or farming; tapping the New Urban Communities Authority is with managing land allocated for new urban communities; and tasking the Industrial Development Authority with managing land allocated to industrial projects.
• Approved the transfer of 44 land plots from the Religious Endowments Ministry to the Education Ministry to build schools;

• Allocated 614 feddans of state land in Kafr El Sheikh to build fish farms;
• Allocated 85.2 feddans from state land in New Alamein to the Oil Ministry for petroleum projects;
• Approved Egyptian Atomic Energy Authority’s request to contract INVAP for technical assistance on operating the ETRR-2 reactor;
• Approved the land value for Damietta furniture city;
• Merged the Craft Industries & Productive Cooperation Authority and the Organization for Reconstruction & Development of the Egyptian Village under the Local Development Ministry.

Reuters picked up on the government-led wheat silo recount after allegations of fraud due to a high procurement figure of 5 mn tonnes reported this season. A lawyer representing a group of businessmen in the grain industry filed a formal legal complaint with the prosecutor general, the wire reports. But Supply Minister Khaled Hanafy rejected the allegations, telling Reuters: "This is a claim based on pure imagination, what is the evidence that he has to back this up?" Wheat millers and traders told the wire that the high figures reported stem from private suppliers misreporting stocks for government payments on subsidised local wheat, not their silos. "I don’t think they (the government) collected more than 2.5 mn (tonnes). The rest is just on paper," said Amr Elheeny, a board member of Egypt’s Chamber of Grain Industries, which advises the supplies ministry on policy.

With a private sector that is small by comparison, and a public sector that is unable to meet the job demands of a population that’s made up of 65% under the age of 34, “job creation is the top challenge,” said Ahead of the Curve’s Dina Sherif in an interview with the Wharton School’s business analysis journal Knowledge@Wharton. “We’re still protectionist economies, which is now hindering our own ability to create sustainable economic growth,” said Sherif, noting that this makes it very difficult for entrepreneurs to scale and cross markets in the region.

The state of emergency imposed on North Sinai paired with curfews and military operations are being exploited by terrorists operating in the region, writes Rania El Abd for Al-Monitor in a piece titled “Who’s really benefitting from Sinai’s state of emergency?” “Sinai citizens are the ones harmed the most by communication restrictions and government-imposed power blackouts,” a resident of Jura village in North Sinai says. Meanwhile, the army “turns a deaf ear to the problems caused by the lack of services,” she said.

Today’s sets of readings focus on brain drain in the ancient world and the present.

Ancient Egyptian brain drain: The discovery of a 2,400 year old Egyptian coffin in 2014 was striking for the unbelievably low quality of artwork with which it was adorned — some Egyptologists initially thought it was a fake. The reason being: “In 525 BC, Persian King Cambyses marched into Memphis, the Egyptian capital, inaugurating a period of Persian rule that would last for more than a century… Ancient texts say that the Persian kings deported Egyptian artists and used them for building projects in Persia.” (Read 2,400-year-old coffin’s ‘odd’ art hints at ancient Egypt’s brain drain in Live Science)

Are share buybacks undermining innovation? For a much longer read is the following Reuters Investigates piece from last November on how share buybacks among top US firms have reached historic levels, in what the piece argues is the pursuit of short term goals over the long term health of corporations. “‘The US is behind on production of everything from flat-panel TVs to semiconductors and solar photovoltaic cells,’ said Gary Pisano, a professor at Harvard Business School…If US companies continue to dole out their cash to investors, he said, economic investment ‘will go where it can be used well. If a company in Germany, India or Brazil has something to do with the money, it will flow there, as it should, and create growth and activity there, not in the United States. It’s a scary scenario.’… Pfizer Inc spent USD 139 bn on buybacks and dividends in the past decade, compared to USD 82 bn on R&D.” (Read The cannibalized company in Reuters Investigates, November 2015)

Watch molten aluminum get poured down an anthill to make a cast of the colony, running time: 2:46.

Thousands of ants were harmed in the making of this video, fused into the resulting sculpture like Han Solo frozen in carbonite. Looking for a gift for a nerd? eBay lists just over a dozen aluminum ant colony casts, ranging in appearance from snowflakes to Christmas trees to the Crystalline Entity, and ranging in price from USD 20 to this piece going for USD 3,000.

Think that’s impressive? Watch as a team excavates a giant ant nest, pouring 10 tons of cement into the eight meter deep, 50 square meter nest, whose resulting cast resembles a miniature alien colony, (running time: 3:15)

The IMF says the US risks low growth, facing economic “headwinds” and “pernicious” trends like “a shrinking middle class that could slow growth in the long term,” the FT (paywall) reports. IMF economists warned that “recent weak employment and other data may reflect the economy’s lower potential growth rate and daunting longer term trends. It also warned that the [USD] was now 10-20 per cent overvalued.” The “declining labour force participation rate, falling productivity, increasing polarisation in income distribution and a high share of the population living in poverty” could “corrode the underpinnings of growth (both potential and actual) and hold back gains in US living standards” if left unchecked, said Christine Lagarde, IMF managing director.

The Financial Stability Oversight Council, a group of US regulators, warned that bitcoin and other digital currencies could pose potential financial stability risks, the FT reports. The group, which includes the Treasury department, the Federal Reserve and the Securities and Exchange Commission, said “market participants have limited experience working with distributed ledger systems, and it is possible that operational vulnerabilities associated with such systems may not become apparent until they are deployed at scale.”

Israel returned two sarcophagi covers that were plundered from Egypt, according to a Foreign Affairs Ministry statement. The sarcophagi covers were stolen from Egypt following the 2011 uprising, reports the Times of Israel, and had been held by Israeli authorities for four years. The handover on Tuesday was a “symbolic expression to the warming of ties between the two nations in recent years,” the article stated.

Foreign Minister Sameh Shoukry and Assistant Defence Minister Mohamed El Keshky met with US Special Presidential Envoy for the Global Coalition to Counter ISIL Brett McGurk, according to a statement from the US embassy. “McGurk discussed the status of the coalition’s efforts to degrade and destroy ISIL. He explored opportunities to strengthen cooperation between the United States and Egypt in combatting this threat, and exchanged views on how best to counter the threat posed by ISIL’s regional affiliates.”

International Cooperation Minister Sahar Nasr met with Ambassador to Indonesia Helmy Fawzy and USAID Associate Administrator Eric Postel and USAID Mission Director to Egypt Sherry Carlin in a separate meeting, with discussions mainly revolving around boosting ties between Egypt and the two countries, Al Ahram reported on Wednesday. Fawzy also vowed to hold the sixth session of meetings of the Egyptian-Indonesian Ministerial Committee as soon as possible.

Another angry FM statement about Amnesty: Foreign Ministry Spokesperson Ahmed Abuzeid condemned “Amnesty International’s way of inciting against Egypt” in a press statement on Wednesday, Al Masry Al Youm reported. The statements come on the heels of an Amnesty letter sent on 21 June to the Italian Foreign Affairs Minister Paolo Gentiloni expressing “concern of the lack of significant progress in establishing facts and responsibilities for [Giulio Regeni’s] tragic death.” The letter also praised Italy’s recalling of its ambassador to Cairo and keeping the new ambassador in Rome, and called for stopping Italy’s supply of weapons to Egypt. Abuzeid expressed his “surprise” that the letter did not criticize Cambridge University for not cooperating with Regeni’s family, which Cambridge had denied. Abuzeid called the group unprofessional and not objective, and said it simply insisted on criticizing the situation in Egypt.

The International Cooperation Ministry is in talks to secure funding for the Qantarah water desalination station from the Abu Dhabi Fund for Development, a source told Al Borsa. The source refused to disclose the funding volume the ministry is seeking, but Al Borsa is hinting it could be close to the USD 500 mn International Cooperation Minister Sahar Nasr is said to be seeking to finance water treatment and desalination plants in Sinai. The Housing Ministry and the military’s Engineering Authority are reportedly finalising the technical and financial feasibility studies for the project.

Jacobs Engineering Group will provide engineering and procurement assistance services for the PVC-2 polyvinyl chloride plant expansion project India’s Sanmar Group is implementing in Port Said, Egypt. “When complete, the PVC-2 facility’s production capacity is expected to be 200 kilotonnes per annum (KTPA). Combined with its other global facilities, this takes TCI Sanmar’s total PVC production capacity to 400 KTPA, strengthening the company’s position as one of the largest PVC producers in the Middle East and North Africa,” Jacobs said in a statement. The project’s schedule includes 18 months of engineering and 21 months for mechanical completion. The value of the project was not disclosed.

Ayadi Company for Development and Investment is in talks with the Supply Ministry to pump investment into companies under the Food Industries Holding Company to modernise and boost production, Supply Minister Khaled Hanafy said after he met with Ayadi CEO Ashraf El-Ghazaly Wednesday, Al Shorouk reported. The companies include those producing sugar, oil, and milk, Edfina Company for Preserved Foods, and Qaha Company for Canned Food, among others.

Beirut-based health services firm ClinGroup Holding proposed establishing a medical research and health services company in Egypt with initial investment of USD 2 mn to act as a centre for the group’s operations in Africa, Al Shorouk reported on Wednesday. The proposal came during a meeting between ClinGroup head Nadia Shoaib and Investment Minister Dalia Khorshid, who ensured that the proposal would be sent to the Health Ministry to review all the laws and regulations applicable to the project.

A number of Egyptian companies are interested in setting up plants to produce medications, particularly for hepatitis C, in Azerbaijan. “The first stage of the negotiations have been held. The Egyptian delegation is expected to visit Azerbaijan for the further discussions on July 14-16,” Egypt’s Ambassador in Azerbaijan Suzanne Jamil said. “Egypt has already received a permit for the supply of certain medicines in Azerbaijan, the ambassador noted adding that Egypt is interested in [expanding] trade ties with Azerbaijan.”

There are no reported cases of Dengue fever in Gharbiya or any of Egypt’s governorates, the head of the preventative medicine in the Health Ministry told Al Shorouk. A man returning to Mahalla, Gharbiya from Saudi Arabia was suffering from a suspected case of Dengue fever, but the results were negative. The ministry also took action to ensure the patient’s house is free of Dengue-carrying mosquitos.

Egyptian-Spanish partnership Coprosa Prime was established to build housing projects in the Administrative Capital worth EGP 2 bn in its first phase, Amwal Al Ghad reported. Coprosa International is looking to bolster its activity in Egypt and the Middle East, said CEO Rodriguez Valledor, and will invest EGP 4 bn into the Administrative Capital at a later stage. The company will not take out loans to finance its projects, Coprosa Prime Chairman Tamer Wagih told Al Borsa.

The Edrak for Edutainment Projects Development company is studying building two branches of Kidzania in Giza and Alexandria at a projected cost of around USD 30-40 mn, Edrak CEO Moatamen Daader told Al Mal. The company is currently studying possible locations for their new branches, with planning and construction expected to take two years, he added. The project will be part self-financed and part funded by a loan, said Daader.

IT-solutions and accredited SAP Gold partner Procons has inaugurated its first branch in Egypt to provide cloud services and SAP consultations, Al Shorouk reported. Egypt represents the company’s seventh destination in the MENA region following the UAE, Qatar, Lebanon, Kuwait, Saudi Arabia, and Turkey.

The Port Said Chamber of Shipping has proposed decreasing port fees by 25% for foreign vessel and by 50% for Egyptian vessels, following an “exaggerated” increase of fees by the government that would discourage domestic shipping, Chairman Adel Ellamei said, Al Mal reported on Wednesday. The government had previously ordered a 100% increase of fees on Egyptian vessels and a 40% increase on foreign vessels.

Emirates International Investment Company (EIIC) has filed a court case against Citadel Capital Partners, the “lead shareholder in Qalaa Holdings and the vehicle through which the firm’s executive committee holds its equity,” Al Mal reported. Qalaa Holdings says it is not part of the dispute and notes that the disagreement is between EIIC and Citadel Capital over a payment. The arbitration procedures are confidential and Qalaa Holding is unaware of the details, Al Mal added.

The Finance Ministry has banned any unbudgeted exceptional bonuses until the end of the fiscal year as a means to control a widening budget deficit, Ahram reported. As we reported yesterday, Egypt’s budget deficit rose to 9.8% of GDP in 10M2015-16 from 9.5% a year earlier.

The National Falcon Group will start screening passengers and luggage at airports in August, beginning with Sharm El Sheikh, followed by Cairo, and Hurghada, Egyptian Holding Company for Airports Chairman Ismail Abou El Ezz told Al Mal. As we had reported yesterday, National Falcon Group signed an agreement with Restrata to train 7,000 Falcon personnel on screening procedures.

“Smart Care provides customized corporate healthcare plans through its more than 400 providers. For those not on a corporate healthcare plan, Smart Care provides discount medical cards. It can manage and administer healthcare plans, or can also take on the role of insurer as well,” Wamda’s Rachel Williamson wrote on Egyptian-American Enterprise Fund’s USD 1.2 mn investment in Smart Care Medical Services, which we covered on Tuesday.

A Cairo court issued acquittals for 22 people on trial for protesting against a government decision to transfer the Tiran and Sanafir islands to Saudi Arabia, Reuters reported. Khaled Ali, the lawyer for some of the defendants and who filed the case on which the Administrative Court annulled the maritime agreement a day earlier, said "maybe yesterday’s annulment encouraged the judge’s decision to acquit the defendants."