Wednesday, 28 September 2016

EGP weakens on parallel market as traders look to “imminent” devaluation

TL;DR

What We’re Tracking This Week

Administrative Court to issue ruling on appeal of its decision to void Tiran and Sanafir agreement on Thursday: The country’s High Administrative Court will reportedly issue a ruling on the government’s appeal of the court’s initial decision in June that voided a border demarcation agreement with Saudi Arabia, Al Borsa reports.

Russian nuke talks: Also on Thursday, the head of Russia’s state nuclear corporation Rosatom, Sergey Kiriyenko, is expected in Cairo for talks on the Dabaa nuclear power plant, Russian state news agency TASS reported.

On The Horizon

Russia is due to lift its ban on imports of fruits and vegetables from Egypt, excluding potatoes, starting Saturday, 1 October, according to Russian state watchdog Rosselkhoznadzor speaking to Russian state news agency TASS on Tuesday. We noted yesterday that the ban was to be lifted following the dispatch of an Egyptian delegation on Sunday, though the exact date had yet to be confirmed at the time. The ban has been in place since 22 September.

Meanwhile, the Tripoli-based Food and Drugs Control Centre, run by the Libyan strain of the Muslim Brotherhood-controlled Tripoli government, has called for a ban on the import of fruits and vegetables from Egypt, the Libya Herald reports, claiming the Misrata militia-controlled area has already implemented a similar ban. “There are claims that the Libyan moves are, in part, also politically driven, in this case because of Egypt’s support for Khalifa Hafter and the Libya National Army in the east of the country,” the newspaper reports.

Egypt, Greece and Cyprus will hold a tripartite summit on 11-12 October, following PM Alexis Tsipras’ expected to visit Egypt 9-12 October Al Masry Al Youm reports.

Can we make it 12 in a row? The Emirates NBD / Markit purchasing managers’ indices for Egypt, Saudi Arabia and the UAE are out at 6:15am CLT. The Egyptian gauge has deteriorated for 11 straight months through September.

We’re looking at back-to-back long weekends ahead for Islamic New Year (either 2 or 3 October) and Armed Forces Day (6 October).

Speed Round

Speed Round is presented in association with

EGP WEAKENING on market expectation of devaluation: The CBE sold USD 118.6 mn in yesterday’s FX auction at an unchanged rate of EGP 8.78 per greenback, but out on the street, Reuters quoted four traders who were selling USD at a range between EGP 13.05 to 13.10 per USD 1. Bloomberg pegs the average rate of the parallel market traders it surveyed at EGP 12.99 per USD 1, which it called “the weakest figure on record since the weekly poll was started in 2013.” Neither newswire gave an indication of the volumes traded. Al Borsa cited a slightly higher rate of EGP 13.15. Many are taking this as a signal the market expects devaluation. CI Capital senior economist Hany Farahat commented, saying: “The general feeling is that devaluation is imminent … The black market premium will peak once devaluation occurs and will only start falling when foreign currency liquidity improves and capital controls are removed. Only then will the two rates converge.” Traders who spoke with Al Borsa say the market had interpreted certain part of President Abdel Fattah El Sisi’s speech on Monday as suggesting that a devaluation is definitely nigh. The president had reportedly stated that the government will ensure the supply of food at reasonable prices within the upcoming month or two regardless of the exchange rate.

All of this has investors targeting short-term bills now in anticipation of an interest rate increase and EGP devaluation, Bloomberg’s Ahmed Feteha writes. “Yields on three-month Treasury Bills fell 15 basis points on Sunday, the most since May 10” as Amr Seif, head of treasury at Al Ahli Bank of Kuwait-Egypt, says “even nine-month bills are considered riskier at this point.”

MOODY’S INVESTOR SERVICE says Egypt’s insurance market “should see strong premium and profit growth in the next 12-18 months, aided by the country’s gradual economic recovery,” says Mohammed Ali Londe, an assistant VP at the rating’s agency. “The market may be small but is one of the fastest growing in the world with plenty of untapped potential … Absent any political or economic upheaval, we expect the market to expand in double digit figures, helping to cement improving profitability post-revolution.” Moody’s also sees the sector benefiting from draft legislation on healthcare and supervision and the expansion in large infrastructure projects, “both from providing direct insurance cover and because any resulting job creation will support the expansion of the commercial and personal lines of business.” Among the challenges in the sector, according to Moody’s: market concentration.

Moody’s roundtable in Cairo: The ratings agency held a briefing for select members of the press yesterday in Cairo, the highlight of which was the opportunity to hear directly from Moody’s Investors Service VP and Senior Credit Officer Steffen Dyck. Dyck likes the IMF pact (he expects the facility to get signoff from the international body within the next two weeks), doesn’t see the budget deficit in the single digits before 2020, and expects the EGP to close the year at 10.50-11.00 to the greenback. He’s also more concerned with fiscal challenges than FX policy. Tap here for our full readout on the meeting.

TALKS ON RUSSIA FLIGHTS ARE ONGOING: An agreement that would see direct flights from Russia gradually restored will include provisions on security measures that Egypt must guarantee, said Civil Aviation Minister Sherif Fathy according to Al Borsa. Talks on the agreement with Russian Transport Minister Maxim Sokolov, who was in yesterday Cairo to discuss the agreement, are ongoing and continue to focus on the security measures Egypt has put in place at its airports. Sokolov met with President Abdel Fattah El Sisi yesterday. Per Ittihadiya’s readout on the meeting, the minister’s visit “comes at President Putin’s directives … to discuss ways to resume Russian flights to Egypt … [Sokolov] confirmed … the Egyptian side’s positive cooperation. He added that discussions are underway on a number of points with regard to securing the airports.”

Details of the agreement were expected to be announced yesterday at a joint press conference between Sokolov and Fathy, but the conference was cancelled due to time constraints, the newspaper reports. The need for an agreement becomes even more pressing in light of data from Al Shorouk citing CAPMAS which indicated that number Russian tourists, who make up 33% of Egypt’s visitors, declined 54.9% year-on-year in 1H16. JWT, the company tasked with promoting Egypt’s tourism industry abroad, puts the drop at 98% from January to August, Al Shorouk reports.

MOBILE OPERATORS are appealing 4G imbroglio to cabinet: Vodafone Egypt, Etisalat Misr and Orange Egypt will appeal to cabinet for awards of 4G spectra. Industry sources report that the three operators will submit a letter outlining why they refused to bid in the last round supervised by the National Telecommunications Regulatory Authority, Al Borsa reports. The move comes just two days after Telecom Egypt submitted a formal bid to acquire the unclaimed 4G spectra that would have been sold to the three existing MNOs.

Meanwhile, Al Mal has picked up chatter that EFG Hermes would like to see whether TE wants to engage its services to sort out the fate of TE’s 45% stake in Vodafone Egypt. EFG Hermes and Lazard Asset Management jointly won a tender in 2014 to assess the state-owned giant’s investment holdings as part of its strategy to become an integrated telecom operator. TE now maintains that its stake in Vodafone Egypt does not create a conflict of interest as Vodafone Egypt didn’t bid for a 4G licence.

THE EGX APPROVED Obour Land’s request to list on the bourse and issue 200 mn shares at par value of EGP 1 per share. The shares will be listed on Monday, 3 October, according to the bourse. CI Capital is advising.

PIONEERS AND SIGMA are reportedly the frontrunners among investment banks DBK Pharma is considering to advise on its EGX relisting. The winning investment bank will be chosen in early November, Al Borsa reports, citing unnamed sources. FinCorp will complete the fair value report for the transaction in October. The company has not yet settled on a date for the listing of 25% of its shares, but plans to complete listing paperwork by November.

MOVES- Sameh Naguib has been appointed as vice president and chief financial officer of Edita Food Industries effective 1 October 2016, according to a company statement. Naguib succeeds Sherif Fathy, who had submitted his resignation for personal reasons and remains with the Todo and Twinkies maker through month’s end to finalise his transition. Naguib was most recently the CFO and board member of ASEC Company for Mining (ASCOM), which he joined after a long run with Heineken International in both Egyptian and regional roles.

MOVES- Siemens’ CEO Joe Kaeser has signaled he wants to renew his contract when it runs out in 2018, “a move welcomed by investors,” Reuters says. Kaeser has led Siemens’ expansion in Egypt, securing it its “biggest-ever contract” that is “on track so far, unlike other large Siemens projects in the past, which often ran into problems that regularly caused hundreds of [mns of EUR] in unexpected charges.”

THE CONTROVERSIAL EXPORT REGISTRY will not be an obstacle to trade between Egypt and the UK, said UK trade envoy to Egypt Jeffrey Donaldson, who is in Egypt to discuss signing a trade agreement to replace the previous Egyptian-European Union pact. Egypt, as any country, has the right to impose trade restrictions if it views such actions as necessary, he added, according to Al Borsa. Donaldson’s statements signal a divergence from the post-Brexit EU position on trade with Egypt: The outgoing head of the EU delegation to Egypt, James Moran, said earlier this month that the EU plans to continue to pressure Egypt to end the exporters registry. The UK will be bound by the Egyptian-European agreement until the UK’s formal exit from the EU takes place, added Donaldson at a meeting with the Egyptian-British Business Council focusing on investment opportunities in the Suez Canal.

Donaldson discussed lifting Britain’s flight ban on Sharm and its travel warnings on Egypt at a meeting with Tourism Minister Yehia Rashed. The two also discussed Egypt’s tourism promotion campaign in the UK and the need to improve the country’s image there, Al Shorouk reports. Donaldson is also said to have discussed investment with Prime Minister Sherif Ismail and International Cooperation Minister Sahar Nasr, according to AMAY.

BROKERAGE FIRMS get new corporate governance rules. The Egyptian Financial Supervisory Authority (EFSA) has enacted new corporate governance regulations for brokerage houses, which according to its head Sherif Samy, aim to strike a balance between strengthening oversight and easing restrictions on smaller firms, Al Shorouk reports. The new regulations, which were out on Sunday 25 September, will come into effect on Monday with a grace period lasting until 30 April 2017 in certain cases. You can read the full amendments in Arabic here (pdf). These amendments include:

  • Brokerages cannot rely on the same independent auditor for more than six years;
  • Companies are no longer obliged to issue dividends annually, with decisions on that left to shareholders;
  • Auditors are not required to issue annual reports on corporate governance;
  • Boards are no longer obliged to form committees purely to issue an annual report to EFSA.

More legislation and regulation is in the works: EFSA isn’t the only one keeping busy, as the General Authority for Investments and Free Zones (GAFI) and the Justice Ministry have been reviewing business and investor-related legislation, AMAY reports. These include the Disputes Resolution Act, which seeks to reduce the time to settle disputes between investors, with provisions being set out to enforce nondisclosure agreements. The much-touted Bankruptcy Act is also being reviewed (just don’t hold your breath). The law would repeal prison sentences in cases of bankruptcy and develops a mechanism to restructure bankrupt companies. And a draft Trademarks Act which expedites securing intellectual property rights is also in the works.

PERES DIES: Shimon Peres, who twice served as prime minister of Israel and Nobel peace prize laureate, died at age 93 this morning after suffering a stroke two weeks ago, the Guardian reported citing Israel News Agency. Peres had been awarded the Nobel peace prize for his signing of the Oslo peace accords with then-Israeli prime minister Yitzhak Rabin and Yasser Arafat, chairman of the Palestine Liberation Organization. Peres also served as a seven-year term as Israel’s president from 2007-2014. The New York Times’ obit is here.

DUNKIN DONUTS corporate has had to apologize on behalf of its Egyptian franchisee over a racist advertisement, an incident we noted on Sunday, following a social media backlash, Ahram Online reported. “As soon as we became aware of the social media post by our Egyptian franchisee, we asked for it to be removed. Our franchisee immediately complied. We apologise for the offense this posting caused,” the company said to Ahram Online in an email. The Egyptian franchisee, however, remains tight-lipped and has not issued a statement of its own on the incident.

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The Macro Picture

Bloomberg reviews how Wall Street scored the first round of Clinton vs. Trump: As Global head of G10 rates strategy at Citigroup Harvinder Sian notes in a piece by Bloomberg, while the first presidential debate of 2016 “broke little new ground and is unlikely to be seen as a turning point in the election no matter the final outcome,” he says that the “MXN FX gaining the initial market reaction has been to favor Clinton over Trump.” This view was echoed by a poll conducted by CNN after the debate, as well as a number of market strategists quoted by Bloomberg. “We believe it’s uncontroversial to observe that the debate went in Clinton’s favor last night; that was the broad consensus from pundits, focus groups, the betting markets, and financial markets,” says George Pearkes, macro strategist for Bespoke Investment Group. In our short, rushed take sent out yesterday morning about a half an hour after the debate concluded, we had said that while in our view Sec. Clinton won the debate, if the facts and the candidates’ grasp of the facts had a significant sway over the masses, Trump would have never gotten this far in the first place.

Egypt in the News

Italian law firm BonelliErede published some guidelines on investing in Egypt in South Africa’s African Business Review. It says Egypt’s “issuance of new bonds will no doubt be even more well received by the market, given Egypt’s conclusion of a staff-level agreement with the IMF team in mid-August this year.” BonelliErede also cautions that “the government struggles to fulfil its obligations under double tax treaties. A clear example of this is the failure of foreign entities to refund taxes withheld on all the income payments of foreign entities resident abroad. Although local legislation prescribes a route to claim the differences between the domestic law and treaty rates, most applications have not been successful in obtaining a refund of the differences. This has fuelled discussions on the possibility of resident taxpayers’ applying treaty reduced rates themselves.”

Egypt gets a double-dose of love from the FT this morning, with Heba Saleh’s piece on graffiti art rubbing shoulders with a shot of a tourist taking a selfie by the Sphinx in the paper’s Photo Diary on the occasion of World Tourism Day.

Hisham Genena says his trial is political and that the judiciary is “flawed” in an interview with Al-Monitor. Genena, who was removed from his position at the head of the Central Auditing Organization by a presidential decree and later sentenced to prison, tells interviewer Khalid Hassan he could not obtain the verdict issued against him, despite his lawyer’s request, so he could petition it before the Court of Appeals. He says “I did not lie or publicize false news. I wished to be in my office until the trial is over, as it is illogical that the president dismisses me before a court proves me guilty.”

The Huffington Post’s Magda Abu-Fadil sheds light on the dire state of Egypt’s state-run radio and television network in Maspero, saying it represents “the ultimate in nepotism and cronyism.”

On Deadline

Al Masry Al Youm columnist Amr El Shobaky says a “pessimistic climate” is the fault of cultural, political, and socioeconomic conditions, not a 12-member Ikhwan cell. He references recent string of charges against a number of individuals for spreading “pessimism” in Egypt to disparage its development successes, which included the filmed confessions of four individuals posted to the Ministry of Interior’s Facebook page.

Worth Reading

Yes, we know most of our readers don’t actually care about outerspace. We also know that most people in general don’t care about space, unless you grab them by the shoulders and shake the [redacted] out of them until they start crying. And even then they’re just pretending to care to get you to stop shaking them. That caveat out of the way, even those with zero interest in — you know, just trying to solve the mysteries of the universe … no big deal — may still find Ashlee Vance’s May 2015 profile of Elon Musk in Bloomberg worth a read for an inside look at the eccentric bn’aire’s startup, especially in light of his plan to colonize Mars that he outlined during a livestreamed event yesterday in Mexico (watch, run time: 1 hr, 40 minutes, or read Bloomberg’s summary of the presentation here).

Vance’s profile gives some background as to how he arrived at where he is today in terms of his plan, which had originally simply entailed sending mice to Mars. From Vance’s profile: “[Robert] Downey [Jr.] had heard about a Howard Hughes-like figure who had constructed his own industrial complex about 10 miles from the Iron Man set… In March 2007, he visited SpaceX’s headquarters in El Segundo and wound up receiving a personal tour from Musk. ‘My mind is not easily blown, but this place and this guy were amazing,’ Downey said.’” (Read Elon Musk’s space dream almost killed Tesla)

Image of the Day

Monastery of Saint Simon, base of Muqattam, Zabaleen community: What can we say? We have caves on the brain this week. Clicking or tapping on the image will take you to the source gallery with plenty of more images, including from its interior, from Atlas Obscura. Photo credit: Gianluigi Guercia / AFP / Getty Images.

Spotlight on wheat

NEW GUIDELINES FOR 2017 WHEAT HARVEST: Prime Minister Sherif Ismail ordered an immediate review of the procedures for next year’s wheat harvest at a meeting with the ministers of supply, agriculture, and trade and industry, Al Ahram reports. The move is a bid to avoid a recurrence of this year’s wheat harvest scandal, which toppled former Supply Minister Khalid Hanafy. Changes will include prioritizing government-owned shounas and silos over the private sector (allegedly the primary perpetrators of the fraud, according to allegations by the House of Representatives and the Prosecutor General). There’s speculation that the 2017 harvest season will be extended, and Ismail has ordered a status report on the country’s wheat storage facilities.

In other commodities news, Geneva-based SGS will reportedly conduct inspections of wheat shipments bound for Egypt, Agriculture Minister Essam Fayed told Al Mal. While we had noted yesterday that the government was hiring six firms (one of which was SGS) to handle inspections, based on a report from Al Borsa relying on unnamed sources, it would appear that only SGS will handle operations. The Swiss firm will replace Egypt’s old system of sending abroad delegations of six officials (including two from the quarantine department) to carry out inspections. The US Department of Agriculture deemed this an “unnecessary and burdensome” practice, Bloomberg reported. The report added these and similar regulations will contribute more than USD 860 mn in direct costs and lost export earnings this year.

Traders speaking to Reuters have their own problems to worry about, however, saying they actually preferred dealing with government inspectors at the port of origin, as at least their shipments could be guaranteed. “The [government] delegations work better as there are no surprises at discharge … but now we have to wait for arrival surprises,” said one Cairo-based trader to the newswire. “This moves my risk to the port of discharge, and this is a big problem for any trader,” a supplier said.

The government also agreed to hire a company to inspect soybean imports to ensure they meet Egyptian standards, according to Al Shorouk. The Agriculture Ministry claims that just 79% of soybean shipments meet import standards.

Diplomacy + Foreign Trade

Singapore’s President, Tony Tan, is set to visit Egypt at the end of October, Premjith Sadasivan, Singapore’s ambassador to Cairo, told International Cooperation Minister Sahar Nasr yesterday, Al Masry Al Youm reported. Singapore is looking into investment opportunities at the Suez Gulf, particularly the Suez Canal Axis project, as well as potential cooperation in the fields of transport, fish farming, and SMEs, among others.

A Finnish trade delegation has already made offers of investment in the telecommunications and energy sectors, head of the Trade Ministry’s Commercial Representation Office Aly Al Leithy told Al Mal. The delegation, headed by Trade Minister Kai Mykkanen and made up of over 20 companies, arrived in Cairo yesterday. It will meet today with SCZone head Ahmed Darwish, ICT Minister Yasser El Kadi, and Planning Minister Ashraf El Arabi.

Energy

BP signs amendments to concessions, to expand Nooros output in 2017

BP announced it signed amendments to the Temsah, Ras El Barr, and Nile Delta Offshore concessions, allowing for the development of the Nooros field, Reuters reported. Regional President of BP North Africa, Hesham Mekawi, said the company is “proud to progress the acceleration of its drilling activities in the three concession areas. The conclusion of these amendments was a critical milestone that allowed the discovery and fast track development of the Nooros field.” Nooros, which is jointly controlled with Eni, was producing at 700 mcf/d in September and is targeted to reach 880 mcf/d by early 2017. You can read BP’s statement and a concession map here.

Infrastructure

Construction of six piers at East Port Said will be completed in February 2017

Construction work on six new piers at the East Port Said Port will be completed by February 2017 at a total cost of EGP 10 bn, SCZone head Ahmed Darwish told Amwal Al Ghad. The six piers consist of three for containers, two for vehicles, and a multipurpose pier. Two of the container piers and one of the two car piers will be operation by the end of 2018, as moving equipment and operators takes around 18 months from the end of construction, said Darwish. An MoU will be signed with an international company to operate the vehicles pier “soon,” he added.

Suez Canal tunnels to be completed in mid-2018

Tunnels connecting the eastern and western banks of the Suez Canal tunnels are set to be completed by mid-2018, Vice President of Suez Canal Economic Authority Abdel Qader Darwish said, Shorouk reported.

Basic Materials + Commodities

GASC issues tender for 50k tonnes of sugar

The General Authority for Supply Commodities (GASC) will issue a tender to import at least 50k tonnes of raw sugar, Supply Minister Mohamed Ali El Sheikh told Al Masry Al Youm. As we previously reported in late August, the wider plan is to import 300k tonnes of raw sugar to lower prices and cope with increased demand.

Manufacturing

EBRD publishes roadmap for low carbon emission from cement industry

EBRD has published a report titled “Policy roadmap for a Low-Carbon Egyptian Cement Industry” aimed at helping Egypt’s cement industry reduce carbon dioxide emission by 2030, according to a release. Egypt signed the COP21 2015 Paris Climate Agreement, which commits signatories to ambitious long-term measures. The roadmap suggests the industry should reduce the clinker content in cement, increase the use of alternative fuels to coal and petcoke, improve electrical energy efficiency and use more renewable sources of energy. Under one of the most ambitious scenarios, 2.2 mn tonnes of coal per year will no longer have to be imported by 2030, saving about USD 200 mn. Carbon dioxide emission would be reduced to about 2% below the level prior to switch to coal.

LG Egypt installs new washers production line in Tenth of Ramadan

LG Egypt has completed the installation of a new washer production line in its factory in Tenth of Ramadan, producing up to 9,000 washing machines a month, an unnamed company source told Al Mal. The firm is currently in talks with five local banks to secure USD 5-6 mn in funding to start operations on the washers line and to import raw materials, the source added. LG Egypt reportedly needs USD 18-20 mn a month to run its Tenth of Ramadan factory overall. A slew of financial troubles have hit the electronics firms as result of the FX crisis, including the postponement of building new production lines, as well as a general reduction of the firm’s production capacity.

India’s Nuberg wins USD 20 mn EPC contract to build Port Said chemical plant

India’s Nuberg was awarded a USD 20 mn EPC contract from TCI Sanmar Chemicals to build a chemical plant in Port Said, according to an official statement from the company. The calcium chloride plant will have an annual production capacity of 135 metric tons, and is set to go into operations by the end of 2017.

Health + Education

230 companies apply to build PPP schools

Over 230 companies have applied to participate in a project to build schools under a PPP system, head of the PPP unit at the Finance Ministry told Al Borsa. Several Kuwaiti, Saudi, and Emirati companies were among the applicants, he added, noting that the deadline, set to expire next week, has been extended to October 20. The first phase of PPP projects will include 200 schools with each company building a maximum of 12 schools and a minimum of three. The Finance Ministry had chosen NI Capital as its financial advisor, and Sarie Eldin & Partners as legal advisor.

Four pharma distribution companies referred to Economic Court

The Prosecutor General’s office has referred four pharma distribution companies to the Economic Court for violating competition law, the Egyptian Competition Authority (ECA) said in a statement. In December 2015, the ECA board referred United Co. for Pharmacists, Ibn Sina Pharma, Ramco Pharm, and Multipharma to public prosecution for monopolistic practises after the companies reportedly colluded to fix policy on reducing credit periods, and reducing discounts to small and medium sized pharmacies. The ECA did not allow for reconciliation noting that “the sector directly impacts citizens and the case would not be taken lightly.”

Real Estate + Housing

Hyde Park launches EGP 5 bn development, targets EGP 3 bn in sales next year

Property developer Hyde Park has launched Park Corner, the newest phase of its Hyde Park compound, at a cost of EGP 5 bn, CEO Amin Serag said, Al Borsa reported. The firm is also targeting EGP 3 bn in sales next year, and expects to record EGP 2 bn in sales this year, Serag added. Park Corner spans across an area of 533k sqm and is set to be completed in two years. Serag also said that the firm is currently studying the flotation of some of its shares in the bourse in two years, without providing any other details.

Automotive + Transportation

All foreign airlines to operate at terminal 2, says EHCAAN chairman

The Egyptian Holding Company for Airports and Air Navigation (EHCAAN) is planning to move all foreign airlines to Cairo Airport Terminal 2, Chairman Mohamed Said Mahrous said, Al Mal reported. Mahrous confirmed that Russia’s Aeroflot has already set up its new offices at terminal 2, and is slated to start operations once a decision on the resumption of Russian flights to Egypt is taken. KLM Royal Dutch Airlines will also operate from the new terminal, Mahrous said, despite the airline announcing that it will indefinitely suspend its flights to Cairo starting 8 January 2017. Saudi Airlines has also reportedly set up its offices in terminal 2. However, Mahrous noted that the complete move for all airlines will take place over phases. The new terminal is set to start trial operations today, starting with Jazeera Airways and Kuwait Airways.

Careem to invest USD 100 mn regionally as battle with white taxis hits appspace

Car-booking app Careem is planning to invest USD 100 mn, said Careem Egypt managing director Wael Fakharany at a press conference yesterday. Part of that will go into the program to incorporate 42,000 white taxi drivers into its roster, something the House has pushed for. Some white taxi drivers have other ideas, teaming up with Al Araby Car to launch a white-taxi hailing app due to hit the market on 6 October, according to Al Mal. The application is affiliated with the Public Transport Authority, Taxi Drivers’ Union head Mahmoud Abdelhamid said in a call-in to Al Nahar’s Youm Fi Sa’a (runtime: 5:52). Al Araby Car’s CEO demonised the “foreign companies” and highlighted that the initiative is “all-Egyptian” in his comments to Al Mal.

Banking + Finance

NBE looking into adhering to El Sisi’s request to collect “loose change” from citizens

The National Bank of Egypt (NBE), took President Abdel Fattah El Sisi’s statements on Monday to heart, and is planning to assess possible mechanisms to collect “loose change” in banking transactions, said NBE Deputy Chairman Yehia Aboul Fotouh, Al Mal reported. El Sisi had requested that citizens make financial contributions to help complete low-income housing, suggesting that collecting “50 piasters here and there” may lead to a major fundraiser. Aboul Fotouh suggested that the NBE might open a “unified bank account” to collect this money from clients, and subsequently directing the funds to a body such as the Tahya Misr fund. State-owned banks may hold a meeting next week to discuss the spare change proposal, an unnamed banking sector source told Al Borsa. Another source added that taking part in the initiative “will not be mandatory [particularly not of privately-owned banks],” with the customer having the final say if their change gets donated.

Law

Administrative Court postpones hearing on taxing Orascom-Lafarge agreement

The Administrative Court has decided to postpone the hearing on taxing Orascom Construction Industries (OCI) on the sale of Orascom Cement to Lafarge until 31 December, Al Mal reports. OCI are entitled to apply to settle the tax dispute under the new Tax Dispute Law, Deputy Finance Minister Amr El Monayer told Al Mal. El Monayer also said OCI has not donated the tax amount due to the Tahya Masr fund as rumoured, according to Al Shorouk. The case will be referred to the Supreme Constitutional Court, according to another piece in Al Mal.

Sports

Presentation Sports ups offer for exclusive coverage rights of African football matches

Ahmed Abou Hashima’s majority-owned Presentation Sports will disclose today its new bid of USD 750 mn to acquire exclusive rights to air all African club and national team competitions, including the African Cup of Nations, until 2029, Al Mal reports. Abou Hashima’s previous offer for exclusive coverage, made in late August, was worth USD 600 mn. The rights winner will not be announced until June 2017.

On Your Way Out

The number of casualties from the migrant boat that capsized last Wednesday has risen to 204, Al Masry Al Youm reports. Nine people have been arrested so far for being connected to the case, said the Assistant Interior Minister Alaa Al Din Shawky, Al Mal reports.

Egyptian scientists developed a bandage embedded with nanoparticles that could heal wounds in days, SciDev reports. The bandage, developed by a research team from Zewail City of Science and Technology, uses the anti-epilepsy medication Phenytoin to heal wounds in a few days after just one application to soft tissue. Embedding the medication into a bandage consisting of nanoparticles carried on nanofiber allows for “a well-controlled release of phenytoin, distributing it effectively, which, boosts its efficiency… It acquired a greater ability [to heal] by increasing the surface area available to kill the bacteria, as well as by increasing porosity [of the skin], thus increasing its ability to absorb the drug,” team leader Ibrahim El Sherbiny says. The news was also covered on Huffington Post.

The markets yesterday

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USD CBE auction (Tuesday, 27 Sep): 8.78 (unchanged since 16 March 2016)
USD parallel market (Tuesday, 27 Sep): 12.99-13.15 (up from 12.87 on Monday, 26 Sep, Bloomberg, Al Borsa)

EGX30 (Tuesday): 7,948.9 (-0.3%)
Turnover: EGP 793.8 mn (82% above the 90-day average)
EGX 30 year-to-date: +13.5%

THE MARKET ON TUESDAY: The EGX30 closed down 0.3%. The top performers were Orascom Construction, Cairo Oils and Soap, and EFG Hermes. The worst performers were Amer Group, Qalaa Holdings, and ACC. Market turnover was EGP 793.8 mn with foreign investors the sole net buyers of the day.

Foreigners: Net long | EGP +172.3 mn
Regional: Net short | EGP -147.2 mn
Domestic: Net short | EGP -25.1 mn

Retail: 25.6% of total trades | 26.1% of buyers | 25.2% of sellers
Institutions: 74.4% of total trades | 73.9% of buyers | 74.8% of sellers

Foreign: 25.4% of total | 36.2% of buyers | 14.6% of sellers
Regional: 18.6% of total | 9.4% of buyers | 27.9% of sellers
Domestic: 55.9% of total | 54.9% of buyers | 57.5% of sellers

WTI: USD 44.91 (-0.54%)
Brent: USD 46.29 (+0.70%)
Natural Gas (Nymex, futures prices) USD 2.98 MMBtu, (-0.57%, Oct 2016 contract)
Gold: USD 1,330.20 / troy ounce (-0.02%)<br
TASI: 5,730.7 (-3.8%) (YTD: -17.1%)
ADX: 4,471.7 (-0.5%) (YTD: +3.8%)
DFM: 3,466.6 (-0.8%) (YTD: +10.0%)
KSE Weighted Index: 353.8 (+0.5%) (YTD: -7.3%)
QE: 10,472.9 (-0.4%) (YTD: +0.4%)
MSM: 5,748.6 (-0.3%) (YTD: +6.3%)
BB: 1,139.5 (0.0%) (YTD: -6.3%)

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Calendar

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

28 September (Wednesday): Narrative PR Summit organised by CC Plus in partnership with the American University in Cairo, Four Seasons Nile Plaza, Cairo.

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

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

07 October (Friday): Deadline for phase one feed-in tariff investors to decide whether to remain under phase one conditions or move to phase two terms.

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.

19 October (Wednesday): Digital Media Forum Cairo, Four Seasons Nile Plaza Hotel, Cairo.

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

31 October (Monday): Deadline for Telecom Egypt to reach an agreement with MNOs over using their 2G and 3G network infrastructure

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.

10-13 December (Saturday-Tuesday): Projex Africa and MS Marmomacc + Samoter Africa, 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.

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.

14-16 February 2017 (Tuesday-Thursday): Egyptian Petroleum Show, Cairo International Convention and Exhibition Centre.

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