Wednesday, 12 October 2016

EGP at 15.00 amid suggestions of a rift with KSA over Egypt’s Saturday votes on Syria

TL;DR

What We’re Tracking Today

Shoot us now, please: EGP at a new record low. The CBE kept the exchange rate unchanged at EGP 8.78 per USD 1 at its weekly FX auction, where it sold USD 118.4 mn. In the parallel market, Reuters says traders told it they were selling greenbacks at EGP 15.00, but did not provide figures on volumes. Al Borsa reports the parallel market rate at EGP 14.75, and Bloomberg has it at 14.78. Anecdotally, we have found for more than a week now that traders are more than willing to quote prices north of EGP 14.00, but that none will sell.

The EGP’s new lows came amid what many fear is a widening rift with Saudi Arabia. We have more on that last bit in today’s lead Speed Round story.

It’s decision day on 4G for the National Telecommunications Regulatory Authority which now appears to be leaning towards opening new talks with mobile network operators, who have so far boycotted the process. (more on this in the Speed Round).

Samsung has discontinued the Note 7, throwing into question the future of what had been a popular brand within its franchise. The South Korean company said in a regulatory filing that, “Taking our customer’s safety as our highest priority, we have decided to halt sales and production of the Galaxy Note 7,” according to a Wall Street Journal exclusive. Industry analysts are speculating how much of the Note 7 market Google can capture with its new line of Pixel phones against how much Apple’s iPhone 7 Plus will benefit. If you’re a diehard TouchWiz fan, Android Central is suggesting you may want to hold out for the Galaxy S8

The conference titled The Role of Factoring in Promoting SMEs will begin at the Semiramis Intercontinental Hotel, Cairo today.

Oh, and WE’RE NOT SHOUTING ANYMORE. We’re going back to using horizontal lines to break up runs of multi-paragraph stories / related stories. We’re not terribly fond of the all-caps thing.

What We’re Tracking This Week

NI Capital is expected to complete its evaluation of companies slated for an IPO sometime this week, government sources tell Al Shorouk.

On The Horizon

Companies qualified to participate in phase two of the feed-in tariff program have until 21 October to decide whether they’re moving forward with the new terms; the original filing deadline was 7 October.

More 4G blowback in the pipeline? Telecom Egypt has until Monday 31 October to reach an agreement with MNOs over using their 2G and 3G network infrastructure. The MNOs have so far said they will not rent their existing network infrastructure to TE.

Speed Round

Speed Round is presented in association with

Aramco’s contract to deliver fuel shipments to Egypt does not include clauses allowing for penalties for failing to deliver the product, a source told Al Mal. Egypt did not see the need to add the clauses as the payment and delivery terms were preferential, the source added. The government will deliberate the future of the agreement once key economic group ministers return from their meetings in the United States, the newspaper suggests. The Oil Ministry had confirmed Aramco has halted shipments for October that are part of an agreement to deliver 700k tonnes of refined oil products each month on a five-year contract worth c. USD 23 bn.

Not political in the least, but we’re going there to make sure: Aramco assured Egyptian authorities that November’s shipments would arrive on time — and that the decision not to ship product for October was not politically motivated, said Oil Ministry spokesperson Hamdy Abdel Aziz, Al Masry Al Youm reports. Egypt is reportedly sending a delegation to Saudi Arabia this week, government sources tell Youm7. The stated reason for the visit is, of course, you guessed it, strengthening bilateral ties. Abdel Aziz made vague rumblings to the effect that Aramco had simply told Egypt it would be unable to fulfill the October order.

Move along, move along. Nothing to worry about here, folks… Shipments of petroleum products from alternative sources have already started to arrive, the Oil Ministry’s spokesperson said, according to Al Masry Al Youm, denying reports of the market was facing impending shortages. International Cooperation Minister Sahar Nasr reiterated that the relations between Egypt and Saudi Arabia remain “special” and strong, with cooperation on projects such as the USD 1.5 bn development of Sinai is still ongoing.

Separately, Aramco has signed a number of MoUs with 18 Turkish companies “to further strengthen commercial and investment relations” between Saudi Arabia and Turkey on Tuesday in Istanbul, Anadolu Agency reported. Saudi Energy Minister Khalid Al Falih said “We are willing to work with Turkish companies under the Saudi Vision 2030. These MoUs will be the first step of this process. We plan to increase the investment amounts to a [USD bn].”

The news had the business community rattled yesterday, with suggestions that deteriorating relations with Saudi Arabia brought into question Saudi Arabia’s contribution to the war chest the Ismail government is building to back a devaluation of the pound. The issue cropped up in literally every conversation we had yesterday. Relations between Saudi and Egypt have been tense since Egypt split with the kingdom in a vote on Syria at the UN Security Council last weekend, with rumors of strained relations stretching back much further. The news sent shares tumbling on the EGX and helped send the EGP to a new record low against the USD.

Regulator leaning toward re-opening 4G talks with mobile network operators: The National Telecommunications Regulatory Authority (NTRA) is reportedly leaning towards reopening talks with the three incumbent mobile network operators, all of whom rejected the original terms of its 4G license auction, sources tell Al Borsa. The NTRA is looking to avoid having to go through international arbitration proceedings and “potentially jeopardizing telecom investments in Egypt,” the sources added. The regulator will decide the fate of 4G today, after a committee weighing the NTRA’s options issues a recommendation. They include: (a) bundling the spectrum and making it available in an auction in which both domestic and international players could bid; (b) selling the spectrum directly to Telecom Egypt (TE), something MNOs feel is unlikely as it would open a whole new can of worms; or (c) re-opening talks with MNOs, who insist (publicly) that they’ve not asked to re-start talks. The MNOs have also refused to sign national roaming agreements with TE that would have allowed the state-owned giant to operate 2G and 3G services on their networks.

Wait, what? Reinforcing our suspicion that business conditions are not quite as horrible as common wisdom, the PMI and the dumpster fire that is our nation’s FX policy would have it: A table (below) in a Financial Times story (paywall) on global flows of greenfield FDI in the first seven months of 2016 shows Egypt as the fifth-largest recipient. (We’d really, really like to see a breakdown, but none is publicly available.) By the same measure in 1H2015, the FT reported last year, Egypt ranked in fifteenth on among emerging markets. By contrast, Egypt was ranked tenth globally on an FT list this past summer that ranked countries according to greenfield FDI received relative to the size of the recipient’s economy.

The Trade and Industry Ministry is not looking to issue a moratorium on importing some 15 categories of finished goods, minister Tarek Kabil said, denying earlier reports, according to Al Mal. Kabil was responding to suggestions that Egypt had applied for and received approval from the World Trade Organization to implement import restrictions to shave USD 10 bn off its import bill. The move, an unnamed government source had said, would cut out at least 15 categories of “non-essential” goods.

Either way, imports of manufactured goods are plunging, in part due to importers shutting down their businesses as a result of the FX crunch, said Customs Authority chief Magdy Abdel Aziz, Al Borsa. Imports fell 24% in September compared to the previous month, claimed Abdel Aziz, who expects them to fall further by 30% in October, Al Mal reports. Imports are expected to continue falling through year’s end, the newspaper says, noting the Ismail government is ushering the Importers Registry Bill through the House of Representatives. The measure sets an annual minimum import requirement of EGP 2 mn for individuals and EGP 5 mn for companies

The Ismail government is mulling whether to stop importing wheat during the next domestic wheat harvest, said Agriculture Minister Essam Fayed in a statement picked up by Al Shorouk. The rationale is that this would somehow prevent the commingling of homegrown wheat and the imported stuff. Fayed’s remarks came at a meeting between the ministries of agriculture and supply to coordinate policy on next year’s wheat collection season and avoid the pitfalls of this year’s season, which culminated in the resignation of former Supply Minister Khaled Hanafy. Fayed said that he ordered the formation of a committee to draw up new guidelines for collection. The ministry is also promising to increase the price of wheat it collects from farmers, said Agriculture Ministry spokesperson Hamed Abdel Dayem, the newspaper reports.

The Egyptian Competition Authority (ECA) plans to challenge the Prosecutor General’s decision to dismiss the case against Oriental Weavers, said the ECA head Mona El Garf. The ECA will send a motion to the Prosecutor General tomorrow, with its full brief of evidence against the company, she added according to Al Borsa. The ECA alleges that the company contractually mandated its distributors only sell Oriental Weavers merchandise.

Justice Ministry report alleges Ahmed Ezz is guilty of corruption: A Justice Ministry report which allegedly contains evidence of corruption against steel magnate and Mubarak-era politician Ahmed Ezz has landed on the Illicit Gains Authority’s desk, judicial sources tell Al Shorouk. The authority will reportedly use the document to seek a settlement agreement with Ezz or recommend he continue to stand trial, the source noted. Ezz’s lawyers tell the newspaper he has no interest in a settlement, saying he is innocent. Ezz is currently facing a retrial on charges of misappropriating EGP 3 bn in public funds.

And speaking of steel magnates: The Ismail cabinet has reportedly reassured steel manufacturers that it would reduce the price of natural gas this month to USD 4.5 per mmBtu. The word came after a meeting between Prime Minister Sherif Ismail and the Federation of Egyptian Industries (FEI), said Gamal El Garhy, head of the metal industries division of the FEI, Al Borsa reports. Industry and Trade Minister Tarek Kabil had promised the repricing of gas to steel factories would happen last month.

Don’t hold your breath: VAT executive regulations will be released by the end of the month “at the earliest,” Tax Authority chief Abdel Moneim Mattar said, Al Mal reported. The regulations were supposed to be finalized last Sunday; multiple government officials have said that they would be due sometime this month.

The Central Bank of Egypt is reportedly considering punitive measures for banks that do not get on board with its EGP 200 bn SME initiative, said CBE sub-governor Tarek El Kholy, Al Mal reports. The measures include refusing to approve raising non-compliant bank’s capital adequacy ratios and only allowing them to open new branches in underpopulated areas, he said at a conference yesterday. The SME program would require banks to ensure that SMEs account for 20% of their loan portfolio within four years. The National Bank of Egypt made sure to chime-in with a pledge to nearly triple its SME loan portfolio to EGP 70 bn in four years’ time.

Meanwhile, El Kholy welcomed Morocco’s Attijariwafa’s acquisition of Barclays Bank, a move he said would help inject new SME funding, something the bank is quite expert at.

Oh, and speaking of the transaction: Barclays Bank will apparently not pay capital gains tax on the sale of its Egyptian branch to Attijariwafa in Egypt. Al Borsa quotes an unnamed source as saying the bank will pay the tax in the UK, a country that has an agreement with Egypt that eliminates double taxation.

Other national and international stories of which you may wish to be aware this morning:

  • Naguib is looking at Brazil, where he’s apparently still interested in taking a stake in distressed telecommunications outfit Oi, according to a report yesterday by Bloomberg.
  • As those of you on the issuer side of the table know, South Africans are among the few international funds out there who are actually buyers of Egyptian shares. What’s on the mind of; the RSA fund manager right now? Markets and the rand tanked yesterday on news that the country’s generally well-respected finance minister, Pravin Gordhan, is being summoned to answer fraud charges in what many see as a politically-motivated investigation. Plenty more in the Reuters, Bloomberg and the Financial Times.
  • Lobster is at an 11-year high, with wholesale prices at USD 6 a pound, the Financial Times reports. Why should you care? Because they’re delicious, and this is the only way to eat them. (Though we’ll confess that two lobster plus a small bowl of melted butter with fresh garlic is not a bad second option.)
  • Are you (or your kid?) starting to look for summer internships? Or the next co-op placement? ‘Tis the season to be planning. Henry Blodgett’s gang over at Business Insider have your back with “Here are the 9 best internships at Wall Street banks.”

CORRECTIONS- We mentioned incorrectly in yesterday’s issue that Egypt voted down a Saudi-backed French resolution on Syria in the UN Security Council. Egypt’s delegation did vote for the resolution but also voted for a rival, Russia-backed resolution. Both resolutions were vetoed in the Council. H/t Karim H. Also yesterday: We suggested that CIB was backing the agriculture sector with facilities worth as much as EGP 300 bn per month. That should have read EGP 300 mn. H/t Mohamed M.

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The Macro Picture

Chicago Fed President noncommittal on rate hike in December: “December could be an appropriate time to do it, but I don’t see any urgency either,” Chicago Fed President Charles Evans said in an interview with CNBC (autoplay video) on Monday. Evans made the remarks following the latest US jobs report which came in below expectations at 176k new jobs last month. Evans says it is important to get inflation to the target of 2% to create a cushion for potential policy easing.

Rosneft says no to OPEC’s oil production cap: Russia’s state owned energy firm Rosneft will not participate in any OPEC agreement to cut oil production, according to its president Igor Sechin, Reuters reported on Tuesday. His remarks come in contrast to those of Russian President Vladimir Putin, who just on Monday had said that Russia would be willing to enter such an agreement with OPEC producers. Sechin also threw some much-needed cold water on the idea that OPEC members would actually commit to a production freeze: “Try to answer this question yourself: would Iran, Saudi Arabia or Venezuela cut their production?”

Egypt in the News

It’s another blessedly quiet day for Egypt in the international press. Among the more common stories on Egypt today are pickups of a wire report suggesting Egypt has joined a group of 17 nations “led” by Belarus that are blocking a plan to include LGBT rights in “a new urban strategy drawn up by the United Nations,” Reuters reports. Russia, Qatar, the UAE and Pakistan are among those who have also joined the group. Expect backlash. The news comes as the Associated Press reports that “UN Expert Warns of Growing Curbs by Egypt on Civil Society.”

Elsewhere: Russia and Egypt are holding what’s being billed as their first-ever joint military exercises, scheduled for this month, “in preparation for an anti-terrorist operation ‘in a desert environment.’” (That conveniently sets aside the whole Arab Socialist / USSR interregnum, but hey — these days, we’ll take our friends where we find them). The exercises are “a demonstration of the capabilities of Russia’s rapid-response forces amid the ongoing conflict in Syria, as well as evidence that Cairo, in case of the deterioration of the situation, is counting not only on Washington, but would also like to enlist the support of Moscow,” experts tell Inna Sidorkova in a translation of a piece in Russian in Gazeta. Although the Russian Foreign Ministry said there is no political motive for the exercises, “the Russian military will go to Egypt dressed in a new uniform for a hot climate. Sessions on language preparation, tactics and orientation are already being held at training ranges and in classrooms.”

Ties between Egypt and Saudi Arabia must remain unaffected by all the noise over the Syria UN vote, writes El Sharq El Awsat’s Amel El Hazany. Egypt’s UN Security Council vote for a Russia-backed resolution doesn’t impact the situation in a major way and does not warrant risking straining Egyptian-Saudi relations, if the move is hijacked by “emotionally-charged reaction on the street,” the Saudi commentator says. Deep relations may not necessarily entail agreeing on all aspects, but working towards common interests is critical.

On Deadline

Loving the Islamists: Al Masry Al Youm columnist Amr El Shobaky refers to the parliamentary elections in Morocco as a good example of a healthy democratic process where the state-backed party doesn’t win the majority. The Ikhwan-backed Justice and Development Party won 125 seats while the close to the royal palace Authenticity and Modernity Party took 102, and the conservative Istiqlal party took 46 seats.

Worth Reading

Nigeria’s own story of its disastrously delayed devaluation is a cautionary tale that has perhaps come too late to do us any good: Egypt is far from the only country in the world experiencing an FX crisis; many oil exporters have witnessed their reserves evaporate as they attempt to defend their managed currencies as global oil prices have remained depressed for years. Nigeria’s case in particular sounds awfully familiar to what we’re experiencing here at home, if one were simply to substitute “tourism receipts” for “oil revenue” and “EGP” for “naira.” Of course there are major differences — Egypt’s economy is far more diversified and is not as reliant on tourism as Nigeria is on oil. But with regard to sources of FX, this comparison sounds hauntingly familiar. The causes of the crises are different, the structure of the economies are wildly different, but the policy response and outcomes are too similar to ignore: “Scarcity of foreign exchange. A widening gap between the official rate and the runaway black market.”

Despite Nigeria having already floated the naira back in June, the delay in taking this step has further crippled Nigeria’s private sector, exacerbating the country’s now-confirmed recession. The Financial Times’ Maggie Fick (an old Egypt hand) wrote in August of Nigeria: “Critics accuse the government of aggravating the country’s problems with accusations that it reacted too slowly to the crisis and that it has pursued policies that have deepened the turmoil. The central bank’s decisions to restrict access to [USD] for certain imports and not allow a flexible exchange rate for the naira have been blamed for stymieing businesses and investment, while pushing up prices of everything from fuel to rice and soap.”

Some may raise an objection here, pointing to Egypt’s current pursuit of an IMF loan to help cushion the expected devaluation, as opposed to Nigeria, which as recently as last April, has said it refuses to pursue financing from the IMF because, according to its finance minister: “Nigeria is not sick and even if we are, we have our own local remedy.” But is this really any different from Egypt reaching a staff level agreement with the IMF in 2011 to then turn around in the same year and say it was not needed? And then reach another staff level agreement in 2012, postpone it over political machinations and the avoidance of reform in the same year,then in July and October of 2013 once again say the IMF loan was not needed at all in light of plentiful GCC aid?

Of course the country’s economic circumstances were better throughout almost all of that period, but the structural weaknesses were the same. And those circumstances have only deteriorated as the country burned through its reserves to avoid taking the decisions which it now has no choice but to take, but now finding itself in a much more precarious situation.

ReadNigeria’s case study on how not to float your currencyor for a broader view, see the Council on Foreign Relations backgrounder: Currency crises in emerging markets.

Image of the Day

Atlas Obscura’s map of the United States clown threat (not including Trump): Atlas Obscura has a definitive interactive map of the growing number of sightings and reported online threats coming from people posing as clowns (as opposed to actual clowns who make a living by performing), as we mentioned in one of our Weekend Editions last month. While most clown threats appear to be harmless or the reported clown is never found by police, some have been reported trying to lure children into the woods. And perhaps the greatest public safety threat of all is an increasingly anxious public demanding they be allowed to shoot clowns on sight, creating a feeling of insecurity among professional clowns, as noted in Vox’s explainer video (7 minutes). Click here or on the above image to see the interactive map at Atlas Obscura.

Worth Watching

Time of my life: Many of our readers may already be familiar with the following video of the second US presidential debate of 2016 set to Dirty Dancing’s ‘The time of my life,’ which has already amassed a staggering 73 mn views in the past two days since its release. The video was created by Dutch actor, director and producer Sander van de Pavert, whose videos often appear following news items on Dutch state television NPO 1. The video’s entertainment value shouldn’t lead one to gloss over that Trump spent the entire debate creepily stalking and lurking behind Sec. Clinton in what some speculate was an attempt at intimidation, but perhaps the video edit here is the kind of catharsis that an anxious world needs from time to time. (Watch, running time: 1:29)

Diplomacy + Foreign Trade

Tripartite summit with Greece, Cyprus: President Abdelfattah El Sisi met with Greek PM Alexis Tsipras and Cypriot President Nicos Anastasiades yesterday as scheduled for the fourth Egypt-Greece-Cyprus tripartite summit. The three discussed cooperation in energy, trade, maritime transport, agriculture, construction, according to an e-mailed statement from Ittihadiya. As expected, no breakthrough natural gas agreement was announced. An air transport agreement was signed between Egypt and Cyprus, Al Shorouk reports.

International Cooperation Minister Sahar Nasr has signed an EUR 129 mn financial assistance package with the European Union’s Commissioner for European Neighbourhood Policy and Enlargement Negotiations Johannes Hahn, according to an official statement. Hit the link for the program details.

Energy

Egypt arrears to IOCs increase to USD 3.6 bn, future payments contingent on Finance, CBE

Egypt’s arrears to international oil companies rose to USD 3.6 bn as of the end of 1Q2016-17, up from USD 3.4 bn in FY2015-16, according to Al Borsa which puts last year’s payment figures at USD 3.5 bn. The Oil Ministry is now looking to reschedule dues with an eye towards making a payment before the end of 2016. This payment, however, is contingent on the Finance Ministry and the CBE making FX available, said a government source. The government has not been able to make a payment since August 2015 due to the lack of FX, the source noted.

Infrastructure

Keller Group awarded GBP 60 mn contract for ground improvement on Eastern shore of Port Said

Egypt has awarded geotechnical contractor Keller Group a GBP 60 mn contract for ground improvement works on the eastern shore of Port Said as part of the Suez Canal Area Development Project, according to a company statement. The London-based firm is set to start the project “imminently,” with works set to be completed by 3Q2017.

Basic Materials + Commodities

Supply minister asks the private sector to increase imports of sugar

Supply Minister Mohamed Ali El Sheikh has asked private-sector companies and retail chains to increase imports of sugar in a meeting yesterday with the Federation of Egyptian Chambers of Commerce which included the CEOs of several chains, Al Mal reports. The ministry recently attributed widespread sugar shortages and price hikes to declining sugar imports by the private sector due to the FX crisis, the newspaper adds. El Sheikh had stated earlier this week that Egypt’s strategic reserves of sugar are enough to last until February.

Abu Dhabi says frozen Egyptian strawberries safe for consumption

The Abu Dhabi Food Control Authority has cleared imports of frozen Egyptian strawberries after an earlier scare about hepatitis A contamination, an official at the authority said. After conducting tests and reaching out to the US Food and Drug Administration and Egyptian authorities, the ADFCA has concluded that they are safe for consumption, according to a statement from the authority. As we noted last month, the UAE had tightened controls on imports of Egyptian strawberries, following reports linking them to outbreaks of hepatitis A in the US.

Real Estate + Housing

China Fortune Land in talks with government over revenue-sharing at new capital

China Fortune Land Development Company will be sending a delegation to Egypt this month to negotiate pricing land and the government’s share of revenues on projects it is developing for the new administrative capital, government sources tell Al Borsa. Under the USD 20 bn agreement with the company signed earlier this month, CFLD will develop 14,000 feddans in phase 2 of the capital while the government, which will be providing land and permits, will receive a share in the revenue. The meeting will set the timeline for the development.

Heliopolis Housing and Development’s board approves 2:1 stock split

Heliopolis Housing and Development’s board approved a 2:1 stock split, company chairman Hany Al Dib tells Al Borsa. Lowering the stock price will help generate interest from investors should the company decide to move forward with a capital increase, he added.

Capital Group subcontracts Hassan Allam to 250 units in Alburooj

Capital Group Properties has subcontracted to Hassan Allam Construction the building of 250 townhouses as part of the first phase of its Alburooj residential project, Al Mal reported. Construction on the project started this month, with the units set to be delivered in 30 months. The value of the contract was not disclosed.

Automotive + Transportation

Suez Canal Authority proposes shipping companies pay three-years’ worth of fees in advance

The Suez Canal Authority has apparently proposed an initiative which would see shipping companies deposit three years’ worth of transit fees in advance in local banks in exchange for discounts, Al Mal reports. The proposal — which aims to shore up FX reserves — was made at a meeting with shipping lines last week, said a source who attended the meeting. Some companies seemed inclined to approve, and have arranged a meeting with the authority to discuss the proposal further. On a related note, the authority sent official notices that it will be accepting payments in Yuan, following the currency’s inclusion in the basket of currencies that form the International Monetary Fund’s unit of account, the Special Drawing Right (SDR), the newspaper reports.

Banking + Finance

Afreximbank to lend NBE, Banque Misr USD 500 mn by year’s-end

The African Export Import Bank (Afreximbank) is set to lend NBE and Banque Misr USD 500 mn by the end of the year to finance SME projects, Regional Intra-African Trade Finance Manager Ayman El Zoghby told Al Borsa. The bank aims to sign a USD 300 mn loan agreement with NBE and USD 200 mn agreement with Banque Misr by December, he added. Together, the banks will draw up a strategy targeting SMEs in food industries, petrochemicals, and oil, he added.

CIB receives EUR 9 mn grant, allocates it towards agricultural credit risk management program

CIB has received a EUR 9 mn grant from an unnamed international lender and allocated it towards establishing a new agricultural credit risk management program, head of Finance Programs and International Donor Funds Kamel Salam told Al Mal. The program is almost complete, he adds, and will be issued to banks lending to the agricultural sector within days, targeting the sector’s employees who face difficulties reaching banking services.

NBE aims to grow its network to 425 branches in FY2016-17

NBE is planning to grow its network of branches to 425 in FY2016-17, up from the current 372 branches, head of Retail Banking Hazem Hegazy told Al Mal. NBE added 37 branches last year, with 14 in Cairo, four between Upper Egypt and the Suez Canal region, and two in Alexandria, he added.

Other Business News of Note

Al Arabiya will not shut down Cairo office

Al Arabiya TV has not shut down its Cairo office, nor does it have any intention of doing so in the near future, said Randa Abul Azm, the station’s Cairo bureau chief, Al Mal reported. Abul Azm also denied that Al Arabiya intends to lay off employees from it Cairo office as a result of financial problems. Reports circulated of the alleged shutdown following Al Arabiya’s decision to close its Beirut office back in April amid Saudi Arabian tensions with Lebanon. Cairo is presently in Riyadh’s bad books after last weekend’s vote on Syria at the UN Security Council.

Orascom Construction closes share buyback, capital reduction to follow

Orascom Construction announced it is closing the share buyback offer it extended its shareholders who hold their shares on the EGX. Orascom will buy 1 mn shares back at EGP 74.05 per share. The company also said it will implement the capital reduction in-line with regulatory requirements.

On Your Way Out

KarmSolar’s eco-building arm KarmBuild has completed Egypt’s first solar powered village, reports Inhabitat. Located in the Bahariya Oasis, the Tayebat Workers Village currently provides shelter for 350 people using 90% local earth materials and photovoltaic cells fitted on the roofs. “The high intensity of the sun along with the wide possible uses of viable natural building materials in these areas open up great possibilities for strong sustainable development solutions in the area,” said principal architect Karim Kafrawi.

Ah, the joys of third-party lawsuits: A lawyer has filed a suit against President Abdel Fattah El Sisi, Prime Minister Sherif Ismail, Finance Minister Amr El Garhy, Foreign Minister Sameh Shoukry and House Speaker Ali Abdel Aal in the Administrative Court demanding a halt to proceedings on the International Monetary Fund package, Al Borsa reported.

The markets yesterday

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USD CBE auction (Tuesday, 11 Oct): 8.78 (unchanged since 16 March 2016)
USD parallel market (Tuesday, 11 Oct): 14.75-15.00 (from 14.15 on Monday, 10 Oct, Al Borsa, Reuters)

EGX30 (Tuesday): 8232.8 (-1.6%)
Turnover: EGP 677.3 mn (73% above the 90-day average)
EGX 30 year-to-date: +17.5%

THE MARKET ON TUESDAY: The EGX30 fell 1.7% one hour into the session, ultimately ending the day down 1.6%. CIB, the index’s largest constituent, ended the day down, with the selling wave hitting all of the EGX30 constituents except for Orascom Construction and Edita, while Egyptian Kuwait Holding, and Porto Group ended the day flat. The day’s worst performers were Domty, GB Auto, and Qalaa Holdings. At a market turnover of EGP 677.3 mn, regional investors were the sole net buyers.
Foreigners: Net short | EGP -3.0 mn
Regional: Net long | EGP +48.5 mn
Domestic: Net short | EGP -45.5 mn

Retail: 39.7% of total trades | 40.9% of buyers | 38.6% of sellers
Institutions: 60.3% of total trades | 59.1% of buyers | 61.4% of sellers

Foreign: 33.7% of total | 33.5% of buyers | 33.9% of sellers
Regional: 19.9% of total | 23.2% of buyers 16.7% of sellers
Domestic: 46.3% of total | 43.3% of buyers | 49.4% of sellers

WTI: USD 50.72 (-0.14%)
Brent: USD 52.41 (-1.37%)
Natural Gas (Nymex, futures prices) USD 3.23 MMBtu, (-0.34%, Nov 2016 contract)
Gold: USD 1,256.10 / troy ounce (+0.02%)

TASI: 5,655.6 (+1.5%) (YTD: -18.2%)
ADX: 4,373.9 (-0.3%) (YTD: +1.5%)
DFM: 3,390.6 (+1.0%) (YTD: +7.6%)
KSE Weighted Index: 347.8 (+0.5%) (YTD: -8.9%)
QE: 10,431.3 (+0.3%) (YTD: 0.0%)
MSM: 5,703.7 (+0.3%) (YTD: +5.5%)
BB: 1,130.3 (0.0%) (YTD: -7.0%)

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Calendar

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

12 October (Wednesday): The Factoring Role in promoting SMEs conference, Semiramis Intercontinental Hotel, Cairo.

12 October (Wednesday): NTRA board decides fate of spectrum rejected by the three mobile network operators.

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

24 October (Monday) EBRD executive meeting in Egypt on sustainable development strategy.

24-29 October (Monday-Saturday): The 2016 Dubai Design Week Iconic City exhibition Cairo NOW City Incomplete, Dubai Design District (d3), Dubai

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.

3 November (Thursday): The Emirates NBD PMI for Egypt, Saudi Arabia and the UAE compiled by Markit comes out here.

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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