Wednesday, 20 July 2016

New limits on foreign use of credit cards are coming + House to probe GDR trade as FX source.

TL;DR

What We’re Tracking Today

Cheese manufacturer Obourland will be filing to list on EGX, Managing Director Ashraf Hamad said, with a view to an IPO by the start of 2017, Al Borsa reported on Tuesday. The company will use the proceeds from the transaction to expand into new product categories including ice cream and frozen meats. CI Capital is advising on the transaction.

In other IPO news, Misr Fertilizers Production Company (MOPCO) is one step closer to listing after reportedly receiving approval from the Egyptian Financial Supervisory Authority for a fair value report by its independent financial advisor, Misr Financial Investments Company, which puts the fair value of the share at EGP 52.18. Al Borsa, though, suggests that something closer to EGP 71.90 per share may be a better price due to the devaluation that has taken place since the FV report was completed, noting that MOPCO subsidiary Egyptian Nitrogen Products Company (ENPC) reports its earnings USD. Moving on, EFG Hermes is said to be the company’s most likely choice of advisor for the offering, an Oil Ministry source tells Al Borsa.

What We’re Tracking This Week

On Thursday, Foreign Minister Sameh Shoukry is due in Washington for a ministerial meeting of the anti-Daesh coalition.

Saturday is [1952] Revolution Day. We’re expecting that Sunday will not be a national holiday despite the statutory day falling on the private-sector weekend.

** CAIRO IS A HARD CITY. Our hometown is impossible not to love, but a harsh mistress all the same: From hours lost in your daily commute to poor infrastructure and a dearth of affordable housing options in places the working class might actually want to live, Cairo’s challenges are as obvious as the outlook is murky. That’s why we’re launching a five-part series tomorrow with sponsor SODIC on how business and government can work together to save the capital city. Watch this space.

On The Horizon

It’s interest rate day a week from this coming Thursday: The Central Bank of Egypt’s Monetary Policy Committee will meet on 28 July to review interest rates. That’s one day after the 26-27 July meeting of the U.S. Federal Reserve’s Federal Open Market Committee meets for the same purpose.

Speed Round

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Emirates NBD Egypt customers can continue using their credit and debit cards abroad after the bank reversed a decision to halt their use, Al Borsa reports. The reversal was confirmed by Deputy Managing Director Sahar El Damati, who stated that the bank had not stopped their use at all. El Damati had told Al Masry Al Youm the bank “just revised the limits that can be withdrawn abroad” and has not blocked credit card usage. The bank had sent customers via SMS reading: “Dear Valued Customer, please note that Emirates NBD cards will be disabled for international use outside Egypt only effective 24th of July 2016 till further notice. Apologies for any inconvenience.” The message did not provide details on the type of cards blocked, but bank employees told Reuters it applied to both credit and debit cards. Reuters picked up the bank’s statement later on that day saying it hadn’t stopped cards from working.

Meanwhile, Crédit Agricole Egypt has sent its customers an SMS message informing them that the bank was revising its limit of their USD withdrawal outside of Egypt. We’re told by sources in the industry that most banks are preparing to announce cuts to their FX purchase limit for cardholders traveling abroad.

The central bank kept the exchange rate unchanged at EGP 8.78 per USD 1 at yesterday’s foreign currency auction, at which it sold USD 119.4 mn. Reuters’ sources said greenbacks were selling for EGP 11.75 on the parallel market. Al Mal and Al Borsa put the parallel rate at a record-low level of EGP 11.70 per USD 1. We found yesterday that traders were uninterested in selling at those prices; their ears perked-up only when you started speaking of a rate around EGP 12.

The Finance Ministry is proposing a baseline value-added tax rate of 14% (watch), according to statements by Finance Minister Amr El Garhy and Deputy Finance Minister Amr El Monayer, who spoke at a press conference yesterday on the topic. El Garhy expects that the inflationary impact of the VAT will be on the order of 0.5% for low-income earners (which El-Garhy estimated represents c. 10% of the population); 1.5% for the middle class (30-40% of the population); and 2.25% for top wage earners, Al Mal reports. The exemptions list has been tailored to reduce the tax’s inflationary impact on the poor, with 90% of basic food being VAT-exempt. El Garhy reiterated statements by government officials the day before that there will not be an additional tax on automobiles and fuel (watch). The minister explained how crucial the VAT is to lowering the budget deficit, reducing public debt, and incorporating the informal economy into the national tax base (watch). We’ve so far been unable to find a full-length video of the press conference.

Has the Ismail government decided to keep the gravy on a major infrastructure project — after signing a contract? That’s the suggestion from Al Mal this morning, which cites an unnamed source as saying officials are moving to amend a concession agreement with Orasqualia (a consortium of Orascom Construction and Aqualia) on the Abu Rawash wastewater plant. As we’ve previously reported, the agreement originally specified Orasqualia would build and operate the facility on an ongoing basis. The latest news is that the state thinks financing the project itself and allowing a subsidiary of the Holding Company for Water to run the facility will allow it to lock-in significant cost savings over the lifetime of the project. The EUR 2.4 bn upgrade project will increase capacity at Abu Rawash to 1.6 mn cubic meters per day from 1.2 mn, serving 5.5 mn residents of the Greater Cairo Area.

Is the party ending? Parliament has caught on to GDRs as a way of getting FX: House Economics Committee chairman Ali Moselhy, former head of Egypt Post and one-time minister of social solidarity, condemned yesterday the use of GDR trades to obtain FX abroad. Moselhy wants EGX to start a policy review to close any loopholes that would allow the bourse to be used to funnel FX out of the country. Moselhy is calling for closed-door hearings into the matter even as he admits that GDR programs are not illegal, emphatically telling Al Mal that the practice must stop. While domestic investors have been forced since last year to settle their trades in global depositary receipts in EGP, foreign investors can buy shares in EGP on the EGX, convert to GDRs and liquidate their positions in USD to receive their funds abroad, a practice we noted back in May.

On a related note, EFSA has issued regulations concerning the sale of Egyptian Depository Receipts (EDRs) (think GDR but in reverse). FX earned from the sale of stocks outside of Egypt converted from EDRs must now be deposited at a Central Bank of Egypt-supervised bank.

Barclays has formally begun the sale of its Egyptian unit, with two banks from the region expressing interest, according to unnamed sources speaking to Reuters on Tuesday. Banks have reportedly been asked to submit bids by the end of August, according to sources. As we noted at the beginning of last month, among the banks reportedly interested in acquiring Barclays Egypt’s assets is Emirates NBD, according to the sources, having previously bought BNP Paribas’ Egyptian unit in 2013. Perella Weinberg Partners is said to be advising Emirates NBD. The other bank reportedly looking at buying up Barclays Egypt’s assets is Attijariwafa Bank, Morocco’s biggest by assets, and has retained UBS as its adviser. Despite their name having been mentioned as a contender for at least the past month and a half, Emirates NBD declined to comment to Reuters. Attijariwafa didn’t immediately reply to the request to comment. Barclays has 56 branches and 127k customers in Egypt.

Producers in energy-intensive industries are scheduling downtime for maintenance in August in the face of likely supply cuts as EGAS looks to funnel 4.1 bcf/d of natural gas to power plants in a bid to avoid power outages, Al Borsa reported yesterday. Steel and fertilizer makers can expect low-to-no supply of power and feedstock, while state-owned EGAS will make an estimated 1.2 bcf/d available to households, automobiles and less energy-intensive industries. Imports currently account for 1.3 bcf/d of the 5.3 bcf/d available in the market each day at present.

The Egyptian Financial Supervisory Authority (EFSA) has postponed until an unspecified “later date” Beltone Financial’s appeal of the EGX’s decision to reverse trades in the company’s stock, Al Ahram reports. The decision comes ahead of an Administrative Court hearing on 27 July in the same case. The EGX board canceled trades in Beltone stock made during 18 trading days this past April, saying it suspected stock manipulation was behind a 55% rise in the company’s share price over a three-month period. The EGX has continued to cancel trades on Beltone Financial’s shares ever since, the most recent instances being yesterday and the day before, Al Mal reported. Beltone said last month it is suing both EFSA and the EGX, and EFSA has said it is not alleging wrongdoing on the part of Beltone management.

Officials from Kuwait’s Zain are expected to discuss the terms of the 4G LTE license at a meeting today with CIT Minister Yasser Al Qady and acting head of the National Telecommunications Regulatory Authority (NTRA) Moustafa Abdel Wahed, according to Al Mal. No other details were provided on the agenda, but we can safely assume that high-level meeting coming on the back of Zain formally requesting to be allowed to bid for a 4G license indicates the prospect of foreign competition to the existing operators could be real. Local MNOs, who are reviewing the 4G license framework they received last Thursday, are not too happy with the move. Bringing in an international operator would be tough in a saturated market, an industry insider tells Al Mal. Meanwhile, the NTRA is studying a Telecom Egypt (TE) request to grant it enough time to build market share before allowing a fifth operator into the domestic market, sources tell Al Borsa.

TE mulls offering 4G services through TE Data: The fixed-line monopoly, which accepted the terms of the 4G framework and plans to make preparations for payment next week, is reportedly mulling over whether to provide 4G through its ISP arm, TE Data or through a new company, Al Borsa reports. Whichever way the company decides to go through, either TE Data or the new entity might be listed at some later stage, according to a government source. The source expects TE to spend EGP 10 bn in the first year alone to provide 4G services, the source adds.

A joint committee of Egypt’s House of Representatives on Monday decided it should not adopt a “confrontational stand” against Italy, following a two-hour meeting, Ahram Online reported, citing the committee’s chairman. “In the short term we decided that ‘rough diplomacy’ or ‘a confrontational stand’ should be ruled out in favor of adopting soft diplomacy,” the committee’s chairman Kamal Amer, former chief of military intelligence. The meeting was attended by Mohamed Al Orabi, head of the Foreign Affairs Committee, the deputy interior minister, and other representatives from the interior ministry, judiciary and intelligence apparatus. The joint committee will now also serve as a fact-finding group with regard to the case of murdered Italian graduate student Giulio Regeni. The committee will also assess whether Italy intends to go through with its decision not to supply Egypt with spare F-16 parts, Amer added.

23,000 tonnes of harvested domestic wheat worth EGP 65 mn have been discovered missing at a single site in Beheira governorate, making it the single largest case of missing wheat since the House of Representatives sent a committee to investigate the matter, according to committee member Yasser Omar. The silo’s owner had apparently disposed of paper and computer records by the time the committee turned up for a surprise inspection and had apparently fled the scene with key staff members, Omar added. According to Al Mal this brings the number of total value of wheat reported missing at six silos storing domestic wheat to around EGP 200 mn. As we noted on Sunday, the committee will issue its final report on its investigation at the end of the month, a multi-week extension on the original Sunday deadline.

MOVES- Vodafone Egypt’s outgoing CEO Ahmed Essam was appointed by Vodafone as chief executive overseeing European markets, Reuters reported. Al Shorouk says Essam will oversee Ireland, Portugal, Greece, Romania, Czech Republic, Austria, Albania, and Malta. Essam was succeeded as CEO of Vodafone Egypt by Stefano Gastaut.

Turkey crackdown widens: Over 50,000 soldiers, judges, police officers and now teachers have been suspended or detained since Turkish President Recep Tayyip Erdogan initiated a purge of his country’s’ institutions following a failed coup attempt against his rule, Reuters reported on Tuesday. Over 21,000 teachers have been fired, as have 15,000 employees at the ministry of education. The resignation of all university deans has been demanded by a state-run education council. Oddly enough, 1,500 finance ministry officials have also been let go.

Maintaining a heightened state of hysteria around Gulen’s extradition: Turkey has formally requested the extradition of US-based cleric Fethullah Gulen, CNN reported, citing Turkish Prime Minister Binali Yildirim. US Secretary of State John Kerry has repeatedly said the US would be willing to hand Gulen over if evidence of his involvement in the coup is first presented, despite treason not being a crime included in the extradition agreement between the two countries.

The United States is, of course, widely being blamed within Turkey for the coup attempt, a symptom of the infinite victimhood routine that grips the minds of the region’s people. The US Ambassador to Turkey John Bass responded to the rumors, saying “Some news reports, and unfortunately, some public figures, have speculated that the United States in some way supported the coup attempt. This is categorically untrue, and such speculation is harmful to the decades-long friendship between two great nations.”

Now we’ve heard it all — Erdogan suspects Egyptian and UAE involvement in the coup attempt? Far-right news site Breitbart claims Ankara is convinced that the intelligence agencies of Egypt and the UAE had some hand in the coup attempt against Erdogan, citing an unnamed Arab intelligence source speaking to Breitbart Jerusalem. “Since Friday, Turkey has reviewed every possible piece of evidence supposedly linking the UAE and Egypt to the attempted coup,” according to the source, including investigating reports that Gulen may have visited the UAE one week before the attempted coup. An alternative explanation, of course, is that Erdogan is mentally unstable and pathologically obsessed with Egypt, a note which should be widely adopted as standard boilerplate whenever his name is mentioned.

Are 14 Turkish navy vessels still missing at sea? Fourteen Turkish navy ships on active duty in the Aegean and Black Seas are still missing after the coup attempt, according to a report by the Times (paywall), despite Turkey’s denial. The Times report suggests the commanders of the ships were part of the failed coup attempt and are steaming toward Greek ports to seek political asylum. Eight Turkish soldiers who already successfully fled to Greece in a Black Hawk helicopter seeking asylum appeared in a Greek court on Monday.

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The Macro Picture

The International Monetary Fund announced it has cut its forecasts for global economic growth for this year and next on the back of the UK’s vote to leave the European Union and the resulting uncertainty, according to a statement from the IMF on Tuesday notifying of an update to their World Economic Outlook, (pdf in English or Arabic). Projections for world output for 2016 and 2017 have each been revised downward by 0.1 percentage point. “The Brexit vote implies a substantial increase in economic, political and institutional uncertainty, which is projected to have negative macroeconomic consequences, especially in advanced European economies,” according to the statement and updated WEO. There was no change in projections for Emerging Market and Developing Economies, and projections for the Middle East, North Africa, Afghanistan and Pakistan were actually revised upwards by 0.3 percentage points for 2016 but down by 0.2 percentage points for 2017. Depending on your reading preference, the Financial Times, Reuters and the Guardian all have coverage this morning.

Egypt in the News

The top story on Egypt in the foreign press this morning is news that a 4,500-year old papyri — the oldest ever discovered — is now on display at the Egyptian Museum in Cairo as of last Thursday. What is further remarkable about the papyri is that they describe the construction of the Great Pyramid of Giza to honor the pharaoh Khufu. The papyri was only discovered in 2013 at the Red Sea harbor of Wadi al-Jarf by archaeologists Pierre Tallet and Gregory Marouard. For more on the construction work described in the papyri, see coverage at History.com, Archaeology, Science Alert and Sputnik.

Whether the Mogamma moves away from Tahrir Square or not, “few expect the change of address … to improve Egypt’s bureaucracy,” The Economist writes in its print edition. The paper uses the Mogamma to symbolize the plight of Egyptian bureaucracy; “Government jobs are often handed out based on connections, not skill. There are few incentives to perform well.” Egypt’s public sector employs around 7 mn people; Britain’s, in contrast, employs under 500k. The newspaper notes that President Abdel Fattah El Sisi “has tried to rein in the bureaucracy at least a tiny bit” but was faced by protests and the parliament ended up voting his civil service law down. Ironically, The Economist notes, the stand-off showed that “when properly motivated, [Egypt’s bureaucrats] can take action.”

There are about 1.5 mn addicts in Egypt, Amr Osman, director of Egypt’s Addiction Treatment Fund, tells Xinhua in a feature on substance abuse in Egypt. The Chinese news agency notes that a study found that 80% of crimes committed in Egypt were under the influence of narcotics.

Worth Reading

Art of the Deal ghostwriter speaks out against Donald Trump: Tony Schwartz, the ghostwriter and actual credited co-writer of Donald Trump’s The Art of the Deal, or as Sarah Palin calls it, the Art of the Dill, has spoken out against Trump in a long essay published by the New Yorker. While Schwartz admits that in writing the book, he played a hand in creating Trump’s larger than life public image (“I was overly worried about money,” Schwartz explains, citing the reason he took the offer to write the book), decided that he had to speak out against the Republican candidate for president, who was officially crowned the Republican candidate at yesterday’s Republican National Convention.

“I put lipstick on a pig. I feel a deep sense of remorse that I contributed to presenting Trump in a way that brought him wider attention and made him more appealing than he is.” Schwartz goes on to describe what he viewed as Trump’s largest defining characteristic that he gleaned from months of interviews and observing him closely, and which the US media has failed to really discuss — Donald Trump has no attention span. “This fundamental aspect of who he is doesn’t seem to be fully understood,” Schwartz says. “It’s impossible to keep him focused on any topic, other than his own self-aggrandizement, for more than a few minutes.” (Read Donald Trump’s ghostwriter tells all)

Image of the Day

The forbidden love of Ivanka and Donald Lannister. You hypocrites wouldn’t understand. (View image)

Diplomacy + Foreign Trade

President Abdel Fattah El Sisi met with Ethiopian Prime Minister Hailemariam Desalegn on the sidelines of the African Union Summit in Kigali, according to a statement from Ittihadiya. The readout of their meeting doesn’t offer much in the way of specifics except for saying that both sides agreed to finally begin long-delayed impact studies on Ethiopia’s Renaissance Dam “soon,” with no detailed timeframe given.

“Those consulting studies are completely useless,” said Cairo University water resources professor Nader Noor El Din to Daily News Egypt, reiterating an oft-repeated criticism on the strategy with which Egypt is approaching Ethiopia’s Grand Renaissance Dam (GERD). “The studies are expected to take 17 months as an average while the GERD completion is scheduled for October 2017, which is 12 months away from now. The results of these studies are also nonbinding.” Noor El Din suggests instead that Egypt resort to the international court and the United Nations Security Council.

Energy

Baltim South estimated to hold 700 bcf of gas -source

Reserves in Eni’s and BP’s Baltim South development lease of the East Nile Delta are estimated to hold 700 bcf of natural gas, a source told Al Borsa. The lease is separate from the companies’ other joint-development, Nooros, which is already pumping 65k boe/d. Results from drilling the first exploration well, Baltim SW-1, are promising, the source noted. Bloomberg covered the news of the field’s discovery back in June.

Eni to begin drilling Zohr-6 well in August

Eni is set to start drilling its Zohr-6 well in the Shorouk concession in August, an unnamed company source said, Al Borsa reported on Tuesday. This would be the final well to be drilled in 2016, concluding the first phase of the project, worth USD 5 bn, with the source adding that proven reserves have so far increased to 32 tn cubic feet of gas. Eni is set to complete the Zohr-5 well this month, according to Oil Minister Tarek El Molla, adding that the plan to get the concession online by the end of 2017 is on track.

Sonatrach wants to sell LNG to Egypt

Sonatrach, the Algerian state-owned oil company, has contacted the Egyptian embassy in Algiers to notify EGAS that it wants to resume LNG talks, Al Shorouk reported. EGAS had reached an agreement with Sonatrach in March 2015 to buy six LNG cargoes, but it is not clear if the agreement was renewed. EGAS plans to buy 110-120 LNG cargoes throughout next year.

Manufacturing

Polish consortium studying industrial area in SCZone

A Polish consortium is studying the possibility of establishing an industrial area at the Suez Canal Economic Zone (SCZone), Daily News Egypt reports. The representatives are considering either Ain Al Sokhna or East Port Said for the project, and a government delegation is expected in Egypt before the end of the month, a source at the SCZone said.

Real Estate + Housing

Saudi Binladin Group, Sabbour Consulting consortium to build EGP 7 bn real estate project in New Cairo -sources

A joint venture between Saudi Binladin Group and Sabbour Consulting is looking to build an EGP 7 bn real estate project in New Cairo, sources tell Al Mal. The project will be built over two land plots totaling 243 feddans, with 65% of the land allocated towards housing, 14% towards services, and 6% towards commercial activities, the source added. The consortium is looking to arrange 40% of the funding through banks, while infrastructure will be self-financed. The consortium is looking to sign the final contracts within days, and begin construction by the last quarter of the year.

Marsa Alam for Tourism Development to build EGP 70 mn resort in North Coast

Marsa Alam for Tourism Development will build a EGP 70 mn touristic resort on a EGP 6 mn land plot at km 140 on Alexandria-Matrouh highway in the North Coast, Al Borsa reported. Feasibility studies are being conducted for the project, the company said. It will consist of 130 houses and 90 hotel rooms and will set to be completed within three years after the company obtains the necessary licenses.

Tourism

Sale of package tours to Egypt and Turkey in Belarus down by almost half in 2016

Sales of package tours to Egypt and Turkey in Belarus have dropped almost by half in 2016, a Belarusian government official said. The security situation, compounded by the Russian travel restrictions to both countries, is to blame. As an alternative, tourists from Belarus are reportedly substituting Bulgaria, Montenegro, Spain, and Georgia for Egypt and Turkey.

Telecoms + ICT

ITIDA to establish EGP 100 mn innovation centers in Borg El Arab, Assiut

The Information Technology Industry Development Agency (ITIDA) has selected Borg El Arab and Assiut as locations for two new innovation centers, an official at ITIDA told Daily News Egypt. The two centers will cost a combined EGP 100 mn, and will be built at the technological parks in both cities over the coming five years, the official added. Both parks are around 55-60% completed, the Communication and Information Technology Ministry said.

Automotive + Transportation

Mitsubishi to supply 23 trains for Haram Metro

Japanese conglomerate Mitsubishi has won a tender to supply 23 trains for the first phase of the fourth metro line, known as the Haram Metro, the National Authority for Tunnels said, Al Borsa reported on Tuesday. The authority added that they are still awaiting approval from the Japan International Cooperation Agency (JICA), which is financing the project, to sign on a Japanese consortium led by Nippon Koei as consultants for the implementation of the fourth metro line, which is set to commence in 2017. We had noted yesterday that the first phase has gone USD 500 mn over budget, with JICA offering to provide 50% of the total cost of the phase.

EgyptAir to operate first of nine new Boeing planes in December

The first of the nine 737-800 Next-Generation aircraft purchased by EgyptAir from Boeing last week is expected to start operations this December, Chairman and CEO Safwat Mosallam said during a call-in to Hona Al Assema, Al Mal reported on Tuesday. The agreement was worth USD 864 mn, with Dubai Aerospace Enterprise contracted to provide financing for eight of the aircraft.

Yes, yes, we know you want to resurrect El Nasr Auto Manufacturing. Frankenstein, too, wants a jolt of electricity…

The Egyptian Union of Investors Association appears to be backing the automotive directive. That’s the takeaway from a piece in Al Mal that says the EUIA suggests inviting international car manufacturers to produce cars domestically at a target capacity of 1 mn cars per year through a set of incentives including infrastructure-ready land plots and 10-year tax exemptions among others, head of the Egyptian Auto Feeders Association Alaa Tawfik said. The suggested location for the project is in the industrial zone at East Port Said, he added. Meanwhile, the head of the Holding Company for Metallurgical Industries (HCMI) has ordered a study into relaunching the defunct state-owned El Nasr Automotive Manufacturing Company, following a decision by the HCMI to halt the liquidation of the firm, Youm7 reported. No, the dream of bringing El-Nasr back will never (ever) die for certain type of Nasserite … er, bureaucrat.

Banking + Finance

NBE considers tapping international bond market

National Bank of Egypt (NBE) is assessing a return to the international bond market, a source told Al Mal. NBE had postponed the move mid-last year due to international economic pressures, but the government’s intention to issue Eurobonds has encouraged the bank to revisit the idea. The funds would be used to enhance NBE’s foreign currency liquidity. The source did not say how much NBE will be looking to borrow on the international market. NBE had raised USD 600 mn in an international bond issuance at an interest rate of 5.25% in August 2010, Al Mal notes.

Other Business News

Raya could build food factory in Sokhna, opens call centre in Poland

Raya Holding is in talks to buy 20% of a Polish food manufacturer, presumably pasta manufacturer Makarony Polskie, Raya Chairman Medhat Khalil told Al Mal. If the transaction is successful, Raya will build a food factory on a 100k sqm land plot in Ain Sokhna, Khalil added. He also noted that the company is expanding its call center business, and has recently inaugurated a 300-seat call center in Warsaw, Poland. Raya also launched a cloud computing platform called Raya Cloud, as we noted yesterday. We had noted in mid-June that Raya was in talks with Makarony Polskie and that it had subsequently started due diligence.

Sports

Ghana’s football association bribed Egypt to reach the 2014 World Cup?

A report from a Ghanaian news outlet indicates that the Ghana Football Association might have paid Egypt a bribe in the 2014 World Cup qualifiers. Reports showed a USD 400k unclassified payment and a USD 16k indemnity payment during the home and away games against Egypt. King Fut writes: “The stench of corruption in the African Football has become unbearable. Money, sovereignty and relations have become the main features of many strong Football Associations around the continent.”

On Your Way Out

Although entrepreneurs are creating jobs in the Middle East and North Africa, they often struggle to find and retain talented employees, according to a Wamda Research Lab report sponsored by IFC. A survey found that while 90% of entrepreneurs were planning to hire in the next year, only 12% of people in the MENA region would want to work for a startup. To reverse that, the report says entrepreneurs “need to offer more incentives to employees, including stock options, and look for talent in new places, like universities.” One nugget from the report: “The most qualified regional workforces are thought to be in Jordan, Lebanon, and Egypt.” The report may be downloaded in full here.

The markets yesterday

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USD CBE auction (Tuesday, 19 July): 8.7800 (unchanged since Wednesday, 16 March)
USD parallel market (Tuesday, 19 July): 11.75-11.70 (up from 11.40 on Monday, 18 July)

EGX30 (Tuesday): 7,597 (-0.4%)
Turnover: EGP 560.9 mn (29% above the 90-day average)
EGX 30 year-to-date: +8.4%

Foreigners: Net Long | EGP + 0.4 mn
Regional: Net Short | EGP – 14.7 mn
Domestic: Net Long | EGP + 14.3 mn

Retail: 64.1% of total trades | 64.0 % of buyers | 64.1 % of sellers
Institutions: 35.9% of total trades | 36.0 % of buyers | 35.9 % of sellers

Foreign: 17.4 % of total | 17.4 % of buyers | 17.4 % of sellers
Regional: 7.4 % of total | 6.1 % of buyers | 8.7 % of sellers
Domestic: 75.2 % of total | 76.5 % of buyers | 73.9 % of sellers

WTI: USD 44.63 (-0.04%)
Brent: USD 46.66 (-0.64%)
Natural Gas (Nymex, futures prices) USD 2.72 MMBtu, (-0.22%, Aug 2016 contract)
Gold: USD 1,333.50 / troy ounce (+0.09%)

TASI: 6,646.9 (-0.5%) (YTD: -3.8%)
ADX: 4,583.4 (-0.1%) (YTD: +6.4%)
DFM: 3,526.2 (-0.3%) (YTD: +11.9%)
KSE Weighted Index: 348.5 (-0.7%) (YTD: -8.7%)
QE: 10,648.6 (+0.6%) (YTD: +2.1%)
MSM: 5,839.3 (-0.1%) (YTD: +8.0%)
BB: 1,162.6 (-0.1%) (YTD: -4.4%)

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Calendar

21 July (Thursday): Foreign Minister Sameh Shoukry is due in Washington for a ministerial meeting of the anti-Daesh coalition.

23 July (Saturday): Revolution Day, marking the 1952 Revolution. We’re expecting that Sunday will not be a national holiday despite the statutory day falling on the private-sector weekend.

25 July (Monday): The European Bank for Reconstruction and Development, European Investment Bank, and World Bank launch their joint report: What’s holding back the private sector in MENA? Conrad Hotel, Cairo.

28 July (Thursday): Central Bank of Egypt’s Monetary Policy Committee meets to review rates.

28 July (Thursday): Ruling expected on charges of disseminating false news against former Central Auditing Organization head Hisham Genena.

07 August (Sunday): Deadline for mobile operators to submit applications for 4G licences

29-30 August (Monday-Tuesday): Wastewater Egypt conference.

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

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

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

22 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee meets to review rates.

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

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

November (TBD): Delegation of German companies in the renewable energy sector due to visit to discuss investment opportunities.

11-12 October (Tuesday-Wednesday): Global Islamic Economy Summit, Madinat Jumeirah, Dubai.

17 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meets to review rates.

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 December (Sunday): Prophet Muhammad’s Birthday (national holiday; date to be confirmed).

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

29 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meets to review rates.

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