Wednesday, 17 August 2016

An annoying day for Egypt in the international press

TL;DR

What We’re Tracking Today

Not a great day for Egypt in the international press: Despite two solid interviews with senior members of the business community appearing in the global press, it’s not exactly a “good press day” for Egypt. Consider:

  • An inappropriate ad from Gold’s Gym Egypt caused a firestorm after it went viral — globally.
  • We’re allegedly showing our commitment to austerity by acquiring a new fleet of private jets at a cost of EUR 300 mn.
  • The editorial board at Bloomberg tries to ape the Economist’s drive-by on the Egyptian economy and comes across as, well, simply insipid.
  • Oh, and Zahi Hawass is back to “save Egypt.” (Yes, Zahi. No [redacted]. It’s Hot Tub Time Machine, the 2008 edition [parody].)

We have more in Egypt in the News, below.

Eighteen investment banks have presented technical and financial bids for Egypt’s planned USD 3 bn Eurobond issuance, Deputy Finance Minister Ahmed Kouchouk told Al Mal. Among the bidders: JPMorgan, Morgan Stanley, BNP Paribas, and Citibank, he added. A decision on the winning bid could be made today.

A Russian delegation is set to arrive today to inspect airport security in Hurghada and other tourist destinations, Al Masry Al Youm says. The inspection will be a key factor in Russia’s decision on when — and whether — to allow the resumption of flights to Egypt. State-owned media (here and here) had previously pegged the visit as scheduled for 28 August. ”Egypt’s tourism hopes that Russian inspectors will come to assess security at airports for the last time in August before Russia restarts charter flight to the country,” Sputnik says.

Speed Round

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National dialogue on reform program kicks off: Prime Minister Sherif Ismail began selling his government’s economic reform agenda at a meeting with leaders of the House of Representatives on Tuesday. Ismail said the program would work and, consistent with past statements, billed it as “made in Egypt” and not a foreign construct. He told MPs that the agenda would not harm the poor — in fact, low-income citizens and the unemployed will see benefits increase during the program. He stressed that the value-added tax (VAT) was an essential component of the agenda, Al Ahram reports.

Planning and Budget Committee can’t decide on a baseline VAT rate: The House of Representatives’ Planning and Budget Committee cannot even agree among themselves on what the baseline rate for the value-added tax (VAT) should be. Committee member Moustafa Salem tells Al Shorouk that the committee is still deciding whether to have a rate of 10%, 12% or 14%, while deputy committee chair Yasser Omar announced that it will recommend a 12% rate. Salem’s most peculiar statement, however, was that the exemptions list will contain between 60-70 goods and services, a significant increase from the 52 set by the Finance Ministry. His statement, which were followed by some grandstanding, hints that the committee may at least consider a 14% rate contingent on an increase in the exemptions list.

Meanwhile, the board of directors of the Egyptian Union for Investors Associations (EUIA) voted to lobby for a 12% VAT rate, Al Mal reports. EUIA head Mohamed Farid Khamis repeated the usual schtick that the 12% rate would help mitigate the inflationary effects on the poor. He takes this logic one step further by recommending a 30% wealth surtax. The EUIA is set to meet with Prime Minister Sherif Ismail on Thursday to discuss the organization’s recommendations for the economic reform agenda.

Everyone has this bass ackward, folks: As was put to us yesterday, the point of the VAT is to broaden the tax base — to get every product and every establishment (from mom ‘n pop shops to whoever has the largest market cap on EGX this morning) to participate in the system. Even moderate estimates (here and here, both pdfs) suggest the informal economy is north of 35% of GDP. Get them all into the formal tax system, then we can tinker with rates, ladies and gentlemen.

Diesel prices are going to rise by year’s end –report: Fuel prices will go up soon, an unnamed source told Al Shorouk. Expect diesel prices to up to EGP 2.25-2.50 per litre from EGP 1.80 currently given the large subsidy the government provides for that specific fuel, he says. The source estimates that the government spends around EGP 3.00 on subsidising each litre of diesel sold. He says the price increases are expected by the end of the year at the latest, but did not give an estimate on how much other fuels’ prices would be increased by. If you see lineups at filling stations this morning, you have this story to thank.

EGAS is reportedly preparing a memo to industrial consumers informing them it will not reduce gas prices to industry. The note will reportedly say that the average blended cost of gas from production, imports, and purchase agreements with IOCs is USD 7.00 per mmBtu, an unnamed EGAS source told Al Borsa on Tuesday. The note to customers came in response to demands that the selling price of natural gas be cut to USD 4.50 per mmBtu to spur industrial growth. EGAS has refused that request and will continue to resist calls to reprice gas contracts in EGP rather than USD, the source tells the newspaper.

The International Cooperation Ministry is targeting USD 8 bn in foreign funding over the next three years, International Cooperation Minister Sahar Nasr tells Al Borsa. The aim of the program is to secure funds that, together with the USD 12 bn IMF facility, will help the state plug its funding gap.The ministry is looking to secure a USD 500 mn development loan for Upper Egypt from the World Bank and IMF during the fall talks in October, she added. Nasr reiterated that she will resume talks with the World Bank over the USD 1 bn first tranche of the USD 3 bn agreement, said disbursement is contingent on the House of Representatives ratifying the agreement. The ministry is also finalizing a funding agreement with the EU and a debt-swap agreement with Italy, said Nasr refusing to elaborate on their details.

This comes as the government is redoubling efforts to secure USD 5 bn in funding and pledged deposits from regional allies, a government source tells Al Masry Al Youm, including a USD 1 bn deposit promised by the UAE that is yet to arrive. The source said it is unlikely Egypt will see any GCC funds flow into the state’s coffers before next year. As we noted on Monday, reports had emerged that the IMF is requiring Egypt to secure USD 5-6 bn in bilateral assistance during the first year of reforms before it can obtain the first tranche from the IMF. The Finance Ministry subsequently denied the reports, but IMF mission chief in Egypt Chris Jarvis has made it clear the institution is working with Egypt to line up the funding in the coming period.

The government has tapped the Military Production Ministry with managing the smart card platform for bread and food rations, stripping responsibility from the Supplies Ministry. The shift is to speed up the process of generating the new cards, replacing lost and damaged ones, and improving the overall efficiency of the system, according to a government statement. Supplies Minister Khaled Hanafy also said the Military Production Ministry will be tasked with data protection under the new agreement. Reuters’ Eric Knecht had broken news back in March that hackers managed to infiltrate the Supplies Ministry’s smart card system and the Ministry is already under investigation, having been accused by parliament members of squandering nearly EGP 14 bn.

Meanwhile, 25 UAE-funded wheat silos have been completed and will begin trial runs soon, Hanafy said yesterday, adding that the USD 575 mn project will be used during next harvest season. The ministry is constructing 14 new silos with funding from Saudi Arabia and 10 silos financed by the Italian government, which should be operational by mid-2017, said the minister. Hanafy did not mention the progress of renewed talks with Blumberg Grain over phase two of its program to develop 300 new shounas, which Hanafy had previously rejected. Blumberg Grain increasingly appears to be a sore subject for the minister, ever since he was publicly chastised by the House for not deploying its phase one shounas, designed to flag fraud in wheat storage.

IATA warns Egypt on repatriation of USD for airlines: The International Air Transport Association (IATA) said “Egypt risks damaging its aviation industry” if it continues to block the release of funds owed to foreign airlines. IATA told Gulf News Egypt owes international airlines USD 250 mn worth of ticket revenues. “ATA said in an emailed statement that it is working with Egyptian authorities “to find a practical solution to release [FX] to airlines in order to avoid any unintended, detrimental effects on the country’s aviation industry.”

The House ICT Committee has once again asked ride-hailing apps Uber and Careem to place a limit on surge pricing — and it wants them to upgrade their GPS systems. The demands were made during a meeting with representatives from the companies on Monday, MP Marianne Azer told Al Mal. As we noted last week, the committee also wants the companies to scrap the fee charged to users who cancel ride requests on the grounds that it is “illegal.”

We’re still irate: Why would the House of Representatives think any of this is their business in the first place? Uber and Careem are private companies operating in a challenging market — and despite this, are witnessing explosive growth, as we’ve noted countless times. They operate in a marketplace, and if consumers don’t like their prices, they can stop using them. That is what an economy is. Uber and Careem are explicitly not the public mass transit of the proletariat. What’s next on the House’s agenda? Placing caps on the price of ice cream cakes and konafa? Opening up an investigation as to why Marassi is so expensive and hard to get into? With all due respect, doesn’t the House have more important items on its agenda? It could go water-down the value-added tax bill some more. Or debate what already appears to be a disastrous law on church construction. If the House is insistent on getting involved in regulating the cost of transport, it is always welcome to discuss lifting fuel subsidies or increasing the price of a ticket on the notoriously-loss making Cairo Metro system — without inciting riots. The one thing the House has demonstrated is that it does not have a stellar track record on generating revenue, and should perhaps consider deferring to the private sector on the matter. Oh, and did we mention Uber has pledged to invest EGP 500 mn in Egypt over the next two years?

The central bank kept the EGP stable at EGP 8.78 per USD 1 at yesterday’s FX auction, where it sold USD 120 mn to cover basic commodity imports. Greenbacks were changing hands for EGP 12.40-12.60 on the parallel market, according to Al Mal.

InterCairo Aluminium Industry has shelved its plan to list 30% of its shares on the EGX to 2017, Al Borsa reported yesterday. The company is waiting for market conditions to improve. InterCairo initially wanted to float 60 mn shares, worth around EGP 428 mn, by the end of September, having received EFSA approval for the move, the newspaper notes.

**Earnings Watch: Among those reporting results yesterday:

  • Porto Group reported 1H2016 consolidated net profit of EGP 43.4 mn, up from EGP 37.4 recorded in the same period last year. Revenues for 1H2016 revenues were EGP 422 mn.
  • Amer Group’s consolidated 1H2016 net profit stood at EGP 75.2 mn, up from EGP 67.82 mn a year ago, on revenues of EGP 958.4 mn.
  • The Egyptian International Pharmaceutical Industries Company (EIPICO) turned in 1H2016 consolidated net profit of EGP 234.09 mn, up 31.1% y-o-y.
  • DPK Pharma reported 1H2016 net profit of EGP 20.9 mn, up from EGP 20.3 mn this time last year. First-half revenues stood at EGP 65.5 mn.

Egypt in the News

We have two solid interviews this morning from senior business leaders. Then, there’s the rest of it. This morning’s edition of Egypt in the News is brought to you by Brufen. (Or Lagavulin 16 year old. Maybe both.)

CIB Chairman Hisham Ezz Al-Arab spoke with The Banker’s James King on the macro backdrop in Egypt, the state of digital banking, and financial inclusion. “Conditions have deteriorated over the past year but the silver lining is that the government is serious about structural reform. The move towards a more liberalised exchange rate regime must go hand in hand with other reforms. These include improvements to foreign investment regulations, infrastructure and the system of land deeds,” Ezz Al-Arab is quoted as saying, also noting, “Clearly Egypt is facing a number of serious challenges. But the administration is not in denial about the situation – that would be a bigger crisis. Both the government and the private sector are doing all the right things to address these problems,”

Is the aim of having SMEs account for 20% of banks’ credit portfolios by 2020 realistic? “This is a challenging target but it is achievable. If we can migrate more of our business banking segment to digital channels, with the help of regulatory reforms, then it’s realistic,” he is quoted as saying. It’s on that front that The Banker says CIB has enjoyed “singular success,” pointing to the launch this past January of the country’s first digital smart wallet — and to c. 55% of CIB’s corporate remittance and trade finance services now running through online channels. The back office should be next, Ezz Al-Arab suggests, suggesting it’s time to do away with the requirement to store paper copies of transaction documentation. Read the full interview here.

The Egyptian government needs to find a way to attract investments, Salah Diab, the founder of the Pico Group of companies, said in an interview with German media, covered by Al Masry Al Youm (the national daily his group owns). Egypt’s “economic identity” is not yet clear, and elements of the investment law and tax treatment are still undefined. “No investor will come to a country with a 42.5% tax rate,” he says in an apparent criticism to the tax treatment of oil and gas companies (the corporate tax rate is still 22.5% for other sectors). Egypt should also relax its grip on the currency and move towards a free float.

The government’s biggest success so far, Diab says, has been tapping the IMF for funding. “It is a sign we are seeking help from people with expertise on the issue,” he added. The state should step away from implementing megaprojects like the new administrative capital. They are a drain on state resources and are best left to the private sector, Diab explained. He added that he understands the “exceptional, emergency” role the military is playing in the economy now, given the institution’s unmatched ability to develop projects compared to other state arms. However, he says the military’s continuing in the market will reduce attractiveness as it does not signal that the market is operating on a level playing field. Diab also takes a swipe at the GCC’s financial support to Egypt (saying it had a negative effect on the economy and only delayed the inevitable launch of a reform program) and comes out in favour of making it possible to obtain Egyptian citizenship through investment.

Dreamland Gold’s Gym body-shaming photo goes viral, causes world outrage (aka Tuesday in Egypt): A body-shaming advertisement posted by the Dreamland branch of Gold’s Gym on their Facebook page (view screenshot) somehow went viral around the world. Users outside Egypt expressed their outrage — including many who would said they would cancel their membership at their local Gold’s Gym as a result. The hapless Dreamland branch then issued an inane apology that was almost as infuriating as the original post. The news actually made headlines around the world, from Adweek to local news affiliates in the United States and Australia, with social media filled with posts mocking the ad, though we find subtweets to be funnier. The image was not simply a one-off, but rather part of an entire campaign of images designed to shame people for their appearance. Gold’s Gym Egypt finally took control of the situation, issuing a more appropriate apology and announcing they had worked with Facebook to have the Dreamland branch’s entire Facebook page deleted. The company is now in the process of terminating the branch’s franchise. However, the damage to Gold Gym’s global brand has already been done, and as previously noted by our agriculture minister, Egypt has become completely self-sufficient in its production of eggs.

Intervention: Egypt, it’s time we have a serious talk. Next time anyone feels like interfacing with the public — about anything, really — please don’t be shy about dropping us a line first and getting our take on it. As a country, we really need to stay out of the top five trending Reuters news stories on a daily basis for some sort of catastrophe or another. We will give our advisory ruling, without charge, because we are patriots, and because we’re going to have to end up reporting on it anyway — we might as well stop it from happening in the first place.

Who said anything about austerity? French newspaper says GOE is buying four private jets. French newspaper La Tribune reported on Tuesday that the Egyptian government has signed a contract with Dassault Aviation for four Falcon 7X private jets to replace the government’s current fleet at a cost of EUR 300 mn. The domestic press got wind of the alleged sale and decided to go the extra mile by engaging in what they must have thought was investigative journalism, asking EgyptAir if they were involved in the transaction, which they denied. Whoa, slow down Nancy Drew. Why would EgyptAir have anything to do with it? Why?

Trying to imitate The Economist, but with less nuance and substance: Bloomberg View’s editorial board penned a piece saying Egypt’s economy is failing and that it is President Abdel Fattah El Sisi’s fault. The IMF’s funding to Egypt is “likely to be good money thrown after bad,” the editorial board says, closing by saying “Egypt can once again be a place worth investing in — but before that happens, a lot will have to change.” The editorial also aired on Bloomberg radio.

We stepped into a time machine and woke up in 2008: Zahi Hawass and former first lady Jehan Sadat are starting a “private tour of the country’s pharaonic sites” to woo foreigners back, The Times reported. Saying tourism officials haven’t done enough to help the industry through its recent challenges, Hawass is in his standard (pre-2011) form as he says “out of everyone from Egypt, people know me and Mrs Sadat. People can trust us. I’m known all over the world. Mrs Sadat is a respected person and loves Egypt. I think me and her can help save the country.”

On Deadline

The state needs to acknowledge mistakes in handling the situation at Raba’a, hold those who made mistakes responsible, and compensate victims in a complete investigation, according to Al Masry Al Youm columnist Amr El Shobaki, who is believed to be a confidante of President Abdel Fattah El Sisi. The process is essential for national healing and reconciliation, he says, stressing that social reconciliation does not necessarily imply admitting the Ikhwan back to political life.

El Watan’s Mahmoud Khalil blames the government’s mishandling of the economy as the reason it is now seeking IMF assistance. Meanwhile, Ali Al Salma railed against the government’s lack of transparency. In an op-ed for El Watan, Al Salma chastises the government for not being upfront with the average citizen on the true costs the population has to bear for economic reforms.

Al Ahram columnist Farouk Goweda points to the state’s inability to monitor and regulate commodity prices. “We have to admit that the cost of USD is only part of the problem, there are products that are 100% produced domestically and are still witnessing price hikes,” he says.

Al Masry Al Youm and Al Kahera Wel Nas’ Osama Kamal warns that income from the Suez Canal is in jeopardy. There are multiple routes being considered that could shorten the distance between Europe and Asia. He specifically points to the touted North-South Transport Corridor between Russia, Iran, and Azerbaijan, as well as the Israeli Ashdod port. The solution, he says, is to accelerate the development of the Suez Canal area into a complete investment zone to make it an unrivaled hub regionally.

Salah Montasser writes in Al Ahram asking why information surrounding investigation into the crash of EgyptAir flight MS804 hasn’t been made public.

Image of the Day

The curious case of Amr Diab Benjamin Button. (View image)

Worth Watching

China’s breakout Olympic star Fu Yuanhui: China, and much of the rest of the world, fell in love with Chinese swimmer Fu Yuanhui at this year’s Olympics. That she won a bronze medal helped, but what won hearts was her gracious, goofy and down-to-Earth demeanor and response to winning the bronze. Her vision is said to be so poor without her glasses that she was unable to read the scoreboards after her performances, and had to be informed of how she did by Chinese reporters. Her first interview went viral in China after she said she used “all her mystic energy” though many Chinese commenters objected to the simplified translation, with some saying the word she used encompassed ‘primordial, prehistoric and cosmic energy of the universe.’ In her second interview, she had to be informed she won the bronze by a reporter. (Watch Fu Yuanhui’s greatest moments, English subtitles, running time: 3:10)

Diplomacy + Foreign Trade

Is Israeli Prime Minister Benjamin Netanyahu visiting Egypt? Israel’s i24 News (autoplay video) seems to think so, saying he could be visiting to inaugurate a new synagogue in Alexandria “during August or September” and that the visit would be religious and not a diplomatic mission. Al Mal ran a denial, saying there are no planned trips to Egypt.

The House Energy Committee approved a cooperation agreement between Egypt and Saudi Arabia on nuclear energy, which was signed back in April and ratified by presidential decree as well as the cabinet, Al Shorouk reported on Monday.

Egypt is keen on helping Lebanon “end its political crises,” Foreign Minister Sameh Shoukry said while on his trip to Beirut, according to The Daily Star. “We solely have common interests and we have no [preferred candidate for Lebanon’s presidency], but we hope Lebanon overcomes its obstacles and boosts [the] work in all its institutions," Shoukry added. Lebanon has been without a president since May 2014.

Energy

Rockhopper completes acquisition of Beach Petroleum Egypt

Rockhopper announced it completed the acquisition of Beach Petroleum Egypt for USD 11.9 mn, according to a statement sent to the London Stock Exchange. Beach Petroleum held a 22% interest in the Abu Sennan concession and a 25% interest in the El Qa’a Plain concession. An agreement was initially reached in August 2015, but the terms had changed as one of the partners exercised pre-emption rights, but the terms were amended last April. Rockhopper also said it is currently evaluating potential opportunities available through the 2016 exploration licensing round. EGPC, EGAS, and Ganope are all issuing E&P tenders for new blocks nationwide this year.

Scatec Solar hoping for compromise to keep Egypt business

Scatec Solar, along with others developers in Egypt, are renegotiating their power purchase agreements with the government in hopes to keep their investment plants alive, PV Tech reported. “Scatec Solar, along with several other developers, is prepared to accept a reasonable compromise to enable the planned investments … A compromise would need to be found taking into account the interests of Egyptian Electricity Holding Company (EEHC), the developers and the lenders. We assume this would entail an adjustment of the main commercial terms of the PPA, including the tariff, for an acceptable offshore dispute resolution and, potentially, added security related to the conversion of currency,” SVP for business development at Scatec Solar Terje Osmundsen said. As we had noted previously, at least four companies have exited the feed-in-tariff program projects, while 20 others said they may follow. Scatec Solar is the lead developer on one 50 MW project, and the financial partner on five others.

KarmSolar, however, announced they are committed to the feed-in-tariff regulations imposed by the government, Al Masry Al Youm reported. KarmSolar joins Infinity Solar in announcing it is moving forward with phase one.

BPI agrees to grow investments in Egypt

Benchmark Power International (BPI) has agreed to boost its investments in Egypt beyond its 1.2 GW plant in Upper Egypt and its feed-in tariff solar project in Kom Ombo, at a meeting with Prime Minister Sherif Ismail, Al Mal reports. According to BPI, it had signed on to develop a 10 MW plant in Kom Ombo with SunEdison back in 2015. The SunEdison-Orascom consortium was one of the companies which had reportedly decided to back out of the feed-in tariff projects, as we noted earlier this week.

Oil Ministry calls on international firms to seismically map Red Sea reserves

The Oil Ministry will ask international firms to start seismic mapping of the Red Sea area to increase the attractiveness of investments in the region, Chairman of the Ganoub El Wadi Petroleum Holding Company Sherif Sousa told Al Masry Al Youm. Under Egypt’s new system for issuing E&P tenders that target “technologically advanced” companies, Egypt will be entitled to bns of USD worth of research at no cost, he said. The move follows an announcement by the Saudi cabinet to hold talks with Egypt over a potential MoU on extracting natural resources from the Red Sea, which we noted yesterday.

House Energy Committee approves USD 108 mn loan to fund South Helwan power plant

The House Energy Committee approved a USD 108 mn loan with preferential terms from the Kuwait Fund for Arab and Economic Development (KFAED) to help finance the South Helwan power plant, an unnamed source from the Electricity Ministry told Al Borsa on Tuesday. The loan carries a 2.5% interest and would be paid over 20 years, with a grace period of five years. The loan was signed between the International Cooperation Ministry and KFAED in March. The project is set to contribute 1.9 GW to the national grid produced by three supercritical steam power plants each with a capacity of 650 MW, and has financial commitment from the World Bank in the amount of USD 585.4 mn out of a total USD 2.4 bn estimated project cost. As of the end of May, the project construction was 43% complete with an estimated date of completion set for the end of 2018.

Manufacturing

Arabian Cement will build EGP 80 mn pulveriser mill

The Arabian Cement company board has approved a plan to build an EGP 80 mn petcoke pulveriser mill, the company said in a statement. A pulveriser mill is used to pulverise coal for combustion in the steam-generating furnaces of fossil fuel power plants.

Health + Education

Pharmacists syndicate suggests forming a state-owned company to import raw materials, fulfilling [compound-making] companies’ needs

The Pharmacists’ Syndicate has suggested that a state-owned company be formed to import raw materials and fulfilling [healthcare compounds] manufacturers’ needs, board member Mohamed el Abd told Al Borsa, adding that the proposal will soon be submitted for approval by parliament and the Health Ministry. The FX shortage has hampered companies’ abilities to import raw materials and packaged medication, with the Health Ministry now estimating that 1,620 products have been off the shelves since mid-May. The House Health Committee held a meeting yesterday to discuss the impact of FX shortages on the sector and solutions to the “crisis.”

Real Estate + Housing

Capital Gardens scores EGP 900 mn in sales, MNHD targets sales worth EGP 1.2 bn for first phase of Sarai project

Capital Gardens, Madinet Nasr Housing and Development (MNHD) and Palm Hills’ joint venture, has recorded EGP 900 mn in sales so far, with MNHD receiving 36% of this figure, MNHD General Manager Ahmed El-Hitamy tells Al Mal. MNHD will open registration for units in phase one of its Sarai project by 4Q2016, with a sales target of EGP 1.2 bn, he said, adding that the project has a 15-year timeline and is worth EGP 2 bn in investments, Al Mal reports.

EBA Tourism Committee wants 10-year tax exemption for investors

he Tourism Committee of the Egyptian Businessmen’s Association (EBA) has proposed that the government issue an incentives law for tourism investment, which would entail a 10-year tax exemption for any tourism business launched in the coming year, Al Mal reported on Tuesday. The committee also requested that the government should work on removing all financial burdens from all authoritative bodies, as well as suspend any pending cases against tourism investors that date back to the 25 January 2011.

Automotive + Transportation

Egyptian National Railways assesses financial bids for tender to import six diesel locomotives in November

Egyptian National Railways will assess bids on a EUR 126 mn tender to import six diesel locomotives in November, the European Bank for Reconstruction and Development (EBRD) said in a statement carried by Al Borsa. EBRD is financing the project as part of a wider series of loans to the domestic market, the bank said.

Transport Minister proposes replacing Heliopolis tram line with bus route

Transport Minister Galal Saeed is working on a proposal to replace the Heliopolis tram with a new route for buses, an unnamed ministry official told Al Borsa on Tuesday. Saeed is reportedly holding talks with the French Development Agency (FDA) for financing. The minister had previously replaced the tram line in Al Matariya with a bus route during his tenure as governor of Cairo. In April, Egypt signed an agreement with the FDA for a EUR 80 mn loan to fund the rehabilitation of the Ramses-Heliopolis tram line. According to an MoU signed between the European Bank for Reconstruction and Development (EBRD) and the International Cooperation Ministry in May, the tram line is also receiving funding as part of a USD 250 mn development package. Saeed’s proposal, however, has faced backlash from Heliopolis citizens on the grounds that the tram is part of the cultural heritage of the neighborhood.

Nile Taxi to partner with Uber next month

Nile Taxi will begin offering its service through Uber as of next month, Nile Taxi Chairman Magdi Ghali told Al Borsa. The company is targeting a capacity of 800 passengers daily after it gains Cabinet approval to add five vehicles.

Banking + Finance

HC Securities advising on two acquisitions valued at EGP 700 mn

HC Securities and Investment are advising on six M&A transactions, head of Investment Banking Mahmoud Selim told Amwal Al Ghad. The companies are in the financial services, health, packaging, food, and transportation sectors, said Selim. Two of the transactions should be executed before the end of 2016 the year and are worth a combined EGP 700 mn, he added.

Other Business News of Note

L’azurde investing EGP 50 mn into domestic market

Jeweler L’azurde is set to invest EGP 50 mn in Egypt in 2016, Chairman Selim Shedyak told Amwal Al Ghad. The company has completed an engagement ring production line, in addition to Egypt’s first 14-karat gold production line, he added. L’azurde listed its shares on the Saudi Arabian stock market last month.

Legislation + Policy

Justice Ministry completes eight new draft laws to be submitted to the Cabinet

The Justice Ministry has completed drafting eight new draft laws covering a variety of issues, Deputy Justice Minister Khaled Al Nashar told Al Shorouk. The draft laws include legislation on consumer protection; protection of the rights of the disabled; “irregular” immigration; cybercrime; anti-discrimination; judicial information security, and a draft law concerning commercial registration and trademarks. The drafts all require cabinet approval before they move to the House.

On Your Way Out

Morsi appeals verdict in Qatar espionage case: Mohamed Morsi filed an appeal of a Court of Cassation verdict upholding a June sentence of life in prison for what is widely referred to as the Qatar espionage case, Ahram Online reported on Monday. Morsi was charged with using his office to leak classified documents to Qatar. He has already been sentenced to 20 years in prison, a life sentence, and a death sentence in various other cases.

El Sisi slips in Baseera poll: The percentage of Egyptians polled who said they would vote for President Abdel Fattah El Sisi if elections were held now has slipped from 81% in June to 66%, according to a poll conducted by Baseera (Arabic), as reported by Mada Masr on Monday. El Sisi’s approval rating also fell from 91% in June to 82% in July, with the largest difference being his approval rating with those under 30, which is currently polling at 71% compared to 89% of those respondents over 50.

The markets yesterday

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USD CBE auction (Tuesday, 16 Aug): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Tuesday, 16 Aug): 12.40-12.60 (from 12.65 (buy) and 12.75 (sell) on Monday, 15 Aug, Al Mal)

EGX30 (Tuesday): 8,387.5 (-0.8%)
Turnover: EGP 715.6 mn (64% above the 90-day average)
EGX 30 year-to-date: +19.7%

Foreigners: Net Long | EGP +20.1 mn
Regional: Net Long | EGP +15.5 mn
Domestic: Net Short | EGP -35.6 mn

Retail: 55.5% of total trades | 55.0% of buyers | 56.0% of sellers
Institutions: 44.5% of total trades | 45.0% of buyers | 44.0% of sellers

Foreign: 25.2% of total | 26.6% of buyers | 23.8% of sellers
Regional: 6.9% of total | 8.0% of buyers | 5.8% of sellers
Domestic: 67.9% of total | 65.4% of buyers | 70.4% of sellers

WTI: USD 46.35 (-0.49%)
Brent: USD 49.23 (+1.82%)
Natural Gas (Nymex, futures prices) USD 2.63 MMBtu, (+0.31%, Sep 2016 contract)
Gold: USD 1,352.4 / troy ounce (-0.33%)

TASI: 6,328.6 (-0.5%) (YTD: -8.4%)
ADX: 4,542.8 (-0.4%) (YTD: +5.5%)
DFM: 3,587.2 (-0.4%) (YTD: +13.8%)
KSE Weighted Index: 354.2 (+0.1%) (YTD: -8.4%)
QE: 11,371.1 (+2.2%) (YTD: +9.0%)
MSM: 5,887.0 (-0.3%) (YTD: +8.9%)
BB: 1,152.0 (-0.6%) (YTD: -5.3%)

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Calendar

05-21 August (Friday-Sunday): Rio Olympics.

18 August (Thursday): Siemens Bringing Power to Cement Industry conference, Cairo.

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

04 September (Sunday): Arab Trade & Supply Chain Finance Conference.

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

05 September (Monday): Markit Emirates NBD PMIs out for Egypt, Saudi Arabia, UAE at 6:15am CLT.

06-08 September (Tuesday-Thursday): Citi’s 2016 Global Technologies Conference, New York.

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

14-16 September (Wednesday-Friday): Bank of America Merrill Lynch Global Healthcare Conference 2016, London, UK.

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

19-20 September (Monday-Tuesday): Arqaam Capital MENA Investors Conference 2016, Park Hyatt Dubai, UAE.

19-21 September (Monday-Wednesday): Bank of America Merrill Lynch Global Consumer and Retail Conference 2016, London, UK.

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

27-29 September (Tuesday-Thursday): Citi’s Frontier Markets Symposium – London 2016, UK.

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

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

11 October (Tuesday): 2nd Annual Leasing Conference entitled “New insights to stimulate financing instruments”, Four Seasons Nile Plaza Hotel, Plaza Ballroom, Cairo.

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

26-27 October (Wednesday-Thursday): The Marketing Kingdom Cairo 2 event, Cairo.

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

14-16 November (Monday-Wednesday): Bank of America Merrill Lynch MENA 2016 Conference, The Ritz Carlton, Dubai International Financial Centre, 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.

29-30 November (Tuesday-Wednesday): Citi’s Global Consumer Conference, London, UK.

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

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

07-08 December: Citi’s 2016 Global Healthcare Conference, London, UK.

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.

13 December (Tuesday): Amwal Al Ghad’s top 50 most influential women in Egypt women forum, Four Seasons Nile Plaza Hotel, Cairo.

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

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