A three-stage devaluation + An Egyptian campaign against Rotten Tomatoes over Suicide Squad

Renovation work will begin tonight at midnight CLT on the Sixth of October bridge, and will run until 6 am this Sunday, with work continuing on the weekends from the same times for the next two months. One lane will be shut down at a time for the length of the bridge spanning over Downtown Cairo to Mohandiseen. The bridge will not be shut down completely, and no detours will (allegedly) be necessary.

The Rio Olympics get underway tomorrow, though competition in football has already begun (results here). Plan your watching schedule with the full rundown on when Egyptian athletes are due to compete (Arabic, pdf) from the Egypt Sports Network Facebook page.

The New Suez Canal turns one on Saturday. It will not be observed as a national holiday.

The private sector, which represents approximately 95% of real estate investment in the country, caters to the top of the pyramid income, the affluent minority estimated to be not more than 10-15% of the total population. This relatively small demographic — where there continues to be demand — is what keeps us in business. We’re fully conscious of the irony that our projects offering multi-mn EGP properties can sell-out in a matter of days while on the other end of the spectrum there are people living in dismal conditions in the informal settlements known as the ashwa’iyyat.

And while no one knows exactly what to do about the ashwa’iyyat, there’s movement on this front: The problem is studied by academics, and President Abdel Fattah El Sisi recently launched an EGP 14 bn initiative to move citizens living in unsafe informal settlements out of the slums and into new apartments within the next three years.

So while there is now some headway being made in social housing, what remains overlooked is the housing of the bulk of Egyptian society: Not those who can afford to pay mns to live in gated communities. And not those waiting to be relocated from informal settlements to government housing. Where do middle-income Egyptians live? [ Tap here to read the rest of part three in the series. ]

** This is part three of a five-part series by SODIC, a leading real estate developer and proud sponsor of Enterprise. Here, SODIC shares its view on how business and government can work together to save Cairo — doing good for more than 20 mn people and making a reasonable profit at the same time. Subsequent instalments will appear each Thursday morning, exclusively in Enterprise.

** Did you miss parts one and two in this series? Read them today.
Part 1: Why is your day in Cairo so hard — and what can we do about it?
Part 2: Egypt’s real housing sector: Market-based informality

The Central Bank of Egypt has allegedly proposed a three-stage devaluation timeline, with the first stage to occur “within days,” a government source tells Al Shorouk as talks with the IMF on a bailout package of as much as USD 12 bn continues. While the source refused to disclose details of the timeline, the process will eventually lead to a floating EGP, the newspaper suggests. The CBE is also in talks with the banking sector to set policies that guard against speculative hoarding of USD. These could come in the form of new restrictions such as further caps on USD withdrawals and more stringent monitoring of the issuance of letters of credit. Also possibly in the works: New incentives such as high-yield savings certificates, the source added.

The domestic press is also re-hashing the IMF’s point that the size of the facility is entirely depend on the progress Egypt makes on the reform agenda agreed upon during the negotiations. The IMF reportedly made the point at a meeting with Planning Minister Ashraf Al Araby, a source close to the talks tells Al Masry Al Youm.

Business conditions worsened for the tenth straight month in July, but the death-spiral is flattening out, according to the Emirates NBD Egypt PMI compiled by Markit. With a reading of 48.9 in July, up from 47.5 in June, the PMI is showing the slowest extent of contraction since October 2015 as it edges closer to the “no change” mark of 50. Emirates NBD senior economist Jean-Paul Pigat says “some consolation can be found in July’s report as the pace of contraction is starting to ease. Addressing the FX liquidity shortage will be key to seeing a further stabilization in the PMI in H2.” While there were slower declines in output and new orders during July, foreign new business fell at the quickest pace in three months and the non-oil business sector continued to shed jobs for the fourteenth consecutive month. One improvement to look out for: Some panelists commented on an improvement in underlying demand, despite reports of liquidity shortages.

If that wasn’t bad enough, inflation of food prices (not including vegetables) reached 11.98% in 1H16, a stark increase from the 6.24% reported during the same period last year, according to the CBE report sent to the House of Representative’s Economic Committee on Wednesday. The report, meant as a brief on the state of the economy, attempts to explain the current FX crisis to the House of Representatives. The CBE listed a lack of confidence in the banking sector’s ability to supply FX as a result of its restrictions as one of the top reasons behind FX shortfalls. The report also cites a growing budget deficit, trade imbalance, the collapse of tourism, shrinking remittances, the funneling of USD abroad, and a weak customs net as key causes.

The report also indicates that Egypt had received USD 29 bn in foreign aid since 2011, with GCC states topping the list of donors. Saudi Arabia and Qatar both granted Egypt with USD 8 bn each in the last five years, while the UAE and Kuwait followed, with USD 6 bn and USD 5 bn provided, respectively, Al Shorouk reports. The report was not available in the CBE’s website as at dispatch time this morning.

Long-term residence or citizenship for foreign investors? Not so fast. At least 70 MPs are ready to submit an “urgent request” to House Speaker Ali Abdel Aal on Sunday demanding the House turn its back on a bill that apparently has cabinet-level backing that would offer a path to Egyptian citizenship to foreign investors or individuals who deposit at least USD 5 mn in Egyptian banks for a period of five years, Al Masry Al Youm reported. Insert here our standard blather about the sale of national pride, national security, “Egyptian-ness” not being up for sale. Canada, the US, France, Spain — even bloody St. Kitts and Nevis offer paths to long-term residence or citizenship for foreign investors, as we mentioned a few weekends ago. But Masr? Perish the thought. (Yes, at least one of us is bitter this morning that he’ll never become Egyptian in law, if not in spirit. Odds this bill passes the House: On par with your chances of finding a snowman and a Salafi drinking beer with the Swedish Bikini Team. In the Western Desert. In August.)

Egypt’s Food and Beverage Index dropped to its lowest level in more than years, Bloomberg’s Tamim Elyan reports. “A majority of Egyptian food companies import raw materials, so the nationwide [USD] shortage may be forcing them to pay a premium for the currency in the black market,” which is raising concerns over their profitability. Pharos Holding’s head of research Radwa El Swaify says the “way out” is to raise prices, even though “the government may block those plans to keep inflation in check.”

BP, Edison, and Total have reportedly expressed interest in acquiring a stake in Eni’s Zohr field, sources told Al Mal. The three companies are seeking technical information about the field and some have already begun negotiations with Eni, the source added. Eni could be looking to sell around a 40% stake in the field for USD 2-3 bn, but wants to remain Zohr’s primary operator, the source noted.In July, the FT noted that a number of potential bidders have expressed “informal interest” in acquiring a stake in Zohr, but did not name any of the potential suitors. One analyst quoted at the time said Eni could be looking to sell a 20% stake in the field for USD 1.6 bn. Earlier reports from March indicated that Eni was in talks with Russia’s Lukoil for a potential sale of 20% of Zohr. None of the potential agreements have been confirmed, although Eni’s CEO Claudio Descalzi had previously said he expects to reach an agreement in 2017.

The Trade and Industry Ministry will announce a new export subsidy program within two weeks, Trade and Industry Minister Tarek Kabil was quoted saying in Al Borsa’s print edition. The subsidy program targets a 10% annual growth rate of exports, by offering an additional subsidy of up to 15% for manufacturers who can grow their exports by 25% depending on their domestic component and targeted export market.

Egypt has requested proposals from banks to issue USD-denominated bonds in 2016, Bloomberg’s Archana Narayanan and Ahmed Feteha write. “In an advertisement published in the Financial Times newspaper, the Finance Ministry announced it was seeking lead managers for the issue.” The advertisement reportedly says the deadline for submitting proposals is 11 August.

Someone is close to buying the liberal-leaning (and relatively low-viewership) TeN TV network, and it’s not Ahmed Abou Hashima: A GCC-based investor is reportedly close to buying the TeN TV network, sources told Al Mal, expecting the agreement to be announced officially before 15 August. The channel has reportedly been going through a series of financial challenges after Naguib Sawiris’ exit and the withdrawal of a promotional agreement with Promomedia, due to what are believed to be political differences between the network’s chairman, Emad Gad, and Sawiris.

Prime Minister Sherif Ismail’s cabinet had their weekly meeting yesterday where they approved proposed changes governing sole proprietorships. The law will allow legal persons to individually set up businesses in their own names and sets the framework for moving from a sole proprietorship to a joint stock company. The law will now be passed to the House of Representatives for approval, Al Shorouk notes. Coming on the heels of the Daba’a nuclear power plant, we’d like to congratulate Egypt on fully embracing the 1960s, as cabinet also approved establishing an Egyptian space agency (we wish we were joking; we’re not; Communist witch hunts next). There’s no word on whether cabinet discussed a draft bill on the construction of houses of worship, as was previously expected.

Meanwhile, the Egyptian Council of State (Maglis El Dowla) plans to recommend that changes be made to legislation governing real estate and tourist resorts as part of an ongoing legislative review the council has undertaken. Many tenets of the laws under review have remained unchanged since the ‘50s need to be updated to reflect modern practices, said Ahmed Abu Al Azam, head of the Council’s legislation department. Abu Al Azam is compiling a list of acts of parliament that should be amended and noted that in real estate, legislation government property rights, building codes and permits all need to be updated, Al Borsa reports.

EGX links GDR cap to free-float shares in new regulatory change: The proportion of a company’s shares trading as global depository receipts (GDRs) cannot exceed the proportion trading as ordinary shares in free float according to a regulatory change handed down by the EGX yesterday. This comes on top of existing regulation capping the percentage of company shares that can be traded as GDRs at a third. The EGX will monitor that rate on a weekly basis and, in the event the proportion of shares converted to GDRs exceeds those of the free float shares, the EGX will suspend all future conversions until the GDRs are brought back down beneath the caps. The decision comes into effect on Wednesday 10 August.

EFSA will demand FV reports if your share price moves too far: The Egyptian Financial Supervisory Authority (EFSA) will require listed companies to submit fair value reports if their stock price moves irregularly in a short period of time “in a manner uncharacteristic of its performance, or the performance of the sector and market,” AMAY reports. If the price of the share changes 50% in three months or 75% in six months against market trends in the absence of a clear news trigger, the company will have to present a fair value report to EFSA within a month.

EFSA also set 23 March 2017 as the date on which it will begin enforcing a new regulation stipulating that shares purchased by parent companies in subsidiaries will be counted (and regulated) as treasury shares, Al Mal reports. The date was announced yesterday; EFSA first issued the regulation for public comment in April.

EFSA’s new regulations coincides with its dismissal of Beltone Financial’s complaints over the repeated cancellation of transactions on its shares, according to a bourse statement. Al Mal says the rejection, which follows a previous similar decision, means that Beltone cannot lodge another appeal to EFSA. Beltone Financial, however, is moving forward with a court case against the heads of the EGX and EFSA. the EGX had been repeatedly cancelling trades on Beltone’s shares as it shares had moved significantly against the market trend, prompting suspicions of manipulation.

Egypt will receive the first USD 500 mn tranche of the USD 1.5 bn Sinai Development Program from the Saudi Development Fund next week, following President Abdel-Fattah El-Sisi’s ratification of the loan agreement, which was approved by the House in June, sources told Al Borsa. Is that all? We had noted that the USD 500 mn second tranche of the USD 2.5 bn grant agreed upon during King Salman’s visit to Egypt was announced by International Cooperation minister Sahar Nasr to arrive ‘within days,’ but Al Borsa had no mention of the minister’s previous statement.

The Illicit Gains Authority has completed a settlement with exiled Mubarak-era businessman Hussein Salem and his family, Al Masry Al Youm reported. Just don’t count your chickens, as this is at least the third time such a settlement has been announced. The agreement was reportedly reached after the Salem family agreed to forfeit EGP 5.34 bn worth of assets to the state, representing 75% of the family’s net worth, according the Authority. Al Mal says that following the settlement’s completion, the names of Salem and his those of his family were removed from Egypt’s no-fly lists. Salem gave up assets including eight villas and a hotel in Sharm El Sheikh, a golf course and villa by the North Coast, as well as two plots of land in New Cairo, among others, according to Al Ahram.

Telecom Egypt has reportedly reached a settlement with the Egyptian Competition Authority over allegations of anticompetitive practices in the nation’s ADSL internet market, Al Masry Al Youm reports. While upgrading its infrastructure to fiber optic cables, the state-owned fixed-line monopoly reportedly cut service to clients of other ADSL providers who were using TE’s infrastructure without informing either the clients or the service providers. TE is now reportedly set to pay a fine of a maximum of 1% of the revenue of the utilization fees of the new infrastructure. TE and its ISP subsidiary, TE Data, have been previously accused of poaching clients from competitors under the guise of upgrading infrastructure, as well as of causing ADSL providers to lose EGP 100 mn and 300k clients as result of its monopoly over broadband infrastructure.

Exit update: Saudi’s Abdul Latif Jameel has completed procedures to exit the feed-in tariff program and is now collecting dues from the Electricity Ministry, Al Borsa reported. ALJ is owed dues under a cost-sharing agreement to connect the plant to the national grid, as well as for the land on which the project was to have been built. As we had previously reported, Abdul Latif Jameel decided it was exiting its 50 MW project at the Benban FiT site after it failed to secure financing.

MOVES- Sergio Alcantarilla Rodriguez was appointed as CEO of Arabian Cement effective 25 August, according to a bourse statement. Rodriguez, who was COO of the company, succeeds Jose Maria Magrina who has retired, according to an emailed statement from Arabian Cement.

MOVES- Petroleum minister Tarek El Molla new chiefs at a number of state-owned petroleum companies, including: Sayed Abou Tarek will head the South Dabaa Petroleum Company, while Ahmed Mohi El Din is now chief at Al-Waha Petroleum Company and Amal Mohamed Abdel-Latif takes the reins at Borg El Arab Petroleum Company, Al Ahram reported.

An Emirates flight to Dubai from India caught fire upon landing at the emirate’s airport, Bloomberg reports, calling it “the worst incident in the airline’s 30-year history.” A firefighter died trying to extinguish the blaze; 14 of the 300 passengers and crew on board were injured.

Also worth noting this morning, however briefly:

• German-Arab Chamber Of Industry & Commerce plans to lobby Industry and Trade Minister Tarek Kabil to repeal the exporters registry, Al Borsa reports.
• Water prices will not rise above those set back in January, said the spokesperson for the Water Holding Company, refuting reports we noted yesterday that water prices will rise another 30% for personal use and 50% increase for industry.
• Nike is giving up on golf equipment, saying it won’t make clubs, balls or bags, but will continue manufacturing golf apparel. We reward the world’s largest sportswear company with a golf clap (watch: 0:12).

It’s a mixed assortment of treats for Egypt in the international press this morning. Voice of America loves the Hussein Salem reconciliation deal, picking up a Reuters piece saying Salem relinquished 75% of his wealth. Israeli media and the global press are losing their minds after the slime at Daesh in Sinai released a new video that “threatens Israel’s Jews, saying ‘your account with us has become weighty and you will soon pay.” And the Ikhwan-loving nutters over at Middle East Eye try to cover the economy in “Egypt’s economic noose tightens around Sisi’s neck.”

Egyptian wealth advisor ranks 52nd on Forbes’ America’s Top Wealth Advisors, 2016: Laila Pence, president and co-founder of Pence Wealth Management, manages more than USD 1.5 bn for wealth clients, according to Forbes. Pence, ranking 52nd on the new America’s Top Wealth Advisors (see full list here), came to the U.S from Egypt in the ‘60s during the Arab-Israeli war. Pence sold hot dogs and knishes in Staten Island to save for college and then attended UCLA, where she sold tax-shelter annuities to some of her professors.

An Egyptian has started a Change.org petition to have the movie review aggregator site Rotten Tomatoes shut down over its collection of negative reviews of the upcoming Suicide Squad movie, Vulture reports, in what will likely go down in history as the most Egyptian thing that has ever happened. The mowaten shareef [honorable citizen] behind the demand for social justice and accurate reflection of the will of The People, an Alexandrian going by (what we presume is) the pseudonym Abdullah “Coldwater” (real name: Abdullah Saleh) gave the reasons for his act of tamarod as being: “We need this site to be shut down because It’s Critics always give The DC Extended Universe movies unjust Bad Reviews.” The petition amassed 17.6k signatures in its first day, and has since declared victory. The story has made its way to Reuters, the Independent, the Telegraph, IndieWire, Variety, and everywhere else.

PBS chief foreign correspondent Margaret Warner returns to her post-25 January interview with Ahmed Zewail for “Nobel Prize-Winner Ahmed Zewail’s Struggle to Bring Egypt Out of the ‘Dark Ages’.”

Trump kicks out crying baby from rally: We first spotted this a few minutes after dispatch yesterday morning. While we’ve made no secret of our opinion of Donald Trump’s candidacy, watching this video makes us — ok, one of us — temporarily pro-Trump, just for the duration of the video before the feeling instantly vanishes. One can only hope his supporters didn’t punch the baby in the face while it was being escorted out of the rally. (Watch, running time: 56 seconds)

President Abdel Fattah El Sisi spoke with UK Prime Minister Theresa May, according to a statement from Ittihadiya on Wednesday. The two leaders reportedly vowed to boost bilateral ties between the two nations, as well as discussed the current UK travel ban on Sharm El Sheikh flights..

Siemens has reportedly offered to build a 10 GW wind farm in an undisclosed location in Egypt, according to an unnamed source at the electricity ministry, Al Borsa reported on Wednesday. Siemens is also reportedly set to build a factory to produce blades and turbines for potential export, the source said, adding that the New and Renewable Energy Authority will complete studying the offer in December. The offer includes potential funding from German banks and “a convenient timeframe” for completion, which would likely lead to the government giving priority to the German firm. Siemens is already building three power plants in Burullus, Beni Suef and the new capital, as well as a 2 GW wind farm worth EUR 2 bn.

The Electricity Ministry reportedly owes General Electric around USD 300 mn that it is set to pay in monthly installments, unnamed sources said, according to Al Borsa’s print edition. The amount is allegedly for maintenance work performed by the conglomerate.

The New and Renewable Energy Authority (NREA) is looking to establish two companies to operate and maintenance wind farms in partnership with Spanish firms Gamesa and Vestas, sources told Al Mal. The NREA is negotiating the capital of the two new companies with Gamesa and Vestas, with the NREA expecting to operate 30% of the company stock, the source added, noting that capital is likely to exceed EGP 500 mn. The two companies are meant to maintenance all existing wind farm projects.

The Housing Ministry has tapped international firm Mott MacDonald as consultants on a project extending sewage infrastructure to remote villages in Egypt, head of the project management unit at the ministry Randa El Menshawy told Al Borsa. The project is funded by the World Bank through a USD 550 mn loan that will be paid back over 30 years. There are 161 villages under the program divided into three governorates.

Qassed Karim, Metallurgic Construction, Petrojet and a consortium between Arab Contractors and Archirodon are competing for the construction of a new pier at Damietta Port expected to cost EGP 400-500 mn, a source at Damietta Port Authority told Al Borsa. The Authority will begin studying financial and technical offers for the tender within days. The new liquid bulk and general cargo pier is expected to be completed in 18 months. It is not clear to us whether this is the same pier that is part of a bigger USD 400 mn multi-use station the government plans to build, or the pier that would accommodate Misr Fertilizers Production Company’s exports.

The General Authority for Supply Commodities (GASC) is set to buy 60k tonnes of Russian wheat at USD 10.62 mn through a public tender, Al Ahram reports. The wheat will be shipped between 11-20 September, and has a USD 177.09 average cost per tonne, said GASC.

The government could cut gas prices for the steel industry to USD 4.5/mmBtu from USD 7 / mmBtu as of September, Trade and Industry Minister Tarek Kabil told Al Mal. The decision was first announced in March this year. The decision will cost the state USD 1.2 bn, but the Ismail government says, but will add USD 1.5 bn to state coffers by cutting imports, boosting exports and through new sales tax revenues. We had previously reported that Finance Minister Amr El Garhy had refused a blanket reduction in gas prices just last week at a meeting with Federation of Egyptian Industries Chairman Mohamed El Sewedy.

Al Almea Group, the contractor behind Al Shorouk City, is set to develop a housing project along the Cairo-Suez road worth EGP 3.5 bn, according to its Chairman Karam Mahmoud, Al Borsa reported on Wednesday.

The European Bank for Reconstruction and Development (EBRD) is studying a USD 125 mn loan to Emirates NBD Egypt to finance the bank’s expansion strategy into the domestic SME sector, Al Borsa reports.

Furniture importer In & Out (no relation to the fast food chain, sadly) is negotiating with three banks for an EGP 200 mn loan to expand into manufacturing, Chairman Mohamed Al Akshar told Al Mal. The company plans to build two factories, one each in Ain Al Sokhna and Obour, and is reportedly in talks with NBE, Banque du Caire and Banque Misr. In & Out plans on exporting 60% of its production and is considering an IPO after the plants are up and running.

Edita Food Industries is set to open a new factory in the Polaris Al Zamin industrial park in Six October, with the firm recently buying an EGP 19 mn plot of land spanning across an area of 12,878 sqm for the project, Al Borsa reported on Wednesday. The company has not said what will produced at the new plant.

Pope Tawadros II said he was opposed to demonstrations by Coptic Christians in the United States who protested outside the White House on Tuesday over growing sectarian violence against Copts in rural Egypt, Mada Masr reported. Among the placards reportedly raised were “No to arbitrary reconciliation sessions,” in reference to the state’s reliance on informal reconciliation as opposed to holding attackers truly accountable in the formal judicial system, as well as “The Muslim Brotherhood never renounced terrorism,” as many of the demonstrators believe the violence to be instigated by the group’s members, as well as on Salafists.

Al Azhar seeks to ‘coordinate’ on the selection of Friday sermons with the Religious Endowments Ministry (Awqaf), Grand Imam of Al Azhar Sheikh Ahmed El Tayeb said to state news agency MENA on Wednesday, Ahram Online reported, without providing any further clarification or retraction of its attempt to challenge Awqaf’s authority to issue such sermons. Last Friday, Al Azhar eschewed the verbatim sermon issued by Awqaf on cleanliness, opting to have its clerics preach on unity between Christians and Muslims in Egypt. El Tayeb’s statements came following meetings with both President Abdel Fattah El Sisi, Grand Mufti Shawki Allam and Minister of Religious Endowments Mohamed Mokhtar Gomaa.

National Falcon Group will begin screening luggage and passengers at Sharm Al Sheikh airport during the second half of this month, although earlier statements suggested the company should have begun doing so on 1 August. Al Borsa reports the delay is due to pending approvals by the Civil Aviation Authority. Egyptian Holding Company for Airports (EHCAAN) Chairman Ismail Abou El Ezz told Al Borsa that Falcon has yet to submit all the documentation required for approving its complete handling of Sharm El Sheikh airport’s security needs, which the Ministry of Interior is taking care of at the moment. Falcon CEO Sherif Khaled affirmed that 80% of the company’s security personnel have been trained through an agreement with British company Restrata. EHCAAN reportedly invested EGP 400 mn to enhance airport safety, which it used to purchase modern security devices that Khaled called “world-class.”

A 35-minute video purportedly produced and released by Northern Sinai Daesh affiliate Wilayat Sina released this week featured a direct threat to Israel, saying it will soon “pay a high price,” the AP reported on Wednesday. The authenticity of the video reportedly could not be verified by “its contents and production style mirrored previous IS propaganda material,” the newswire notes.

CPA is at it again… The Consumer Protection Agency (CPA) pressed charges against 16 independently-owned television stations for “misleading the public,” Al Mal reported. CPA chief Atef Yacoub is accusing the channels of “promoting charlatans” and “spreading ignorance.”