Wednesday, 19 October 2016

He is the best of friends, he is the worst of friends


What We’re Tracking Today

It’s day three for our first-ever reader poll, and your responses continue to amaze and delight us — particularly your kind words, excellent suggestions and trenchant criticism.

If you haven’t yet had time to answer the survey, tap here whenever you have a moment. You don’t need to answer all of the questions, and even if you do, it won’t take you more than a minute. If you would like feedback on your comment, please make sure to include your email address. We’re going to send 10 readers who complete all nine questions a set of Enterprise mugs. The poll closes at 1pm CLT on Sunday, 23 October; we’ll have our take on your answers to the economy questions the next morning. The results so far are intriguing.

Hillary Clinton and Donald Trump clash overnight tonight in the third and final debate of the 2016 US presidential election. They’re set to get underway starting 9pm Eastern on Wednesday, 19 October (that’s 3am CLT on Thursday, 20 October). Politico expects Clinton to trounce The Donald. Can’t stay up to watch it live? CNN International will rebroadcast the debate at 8am CLT (6am GMT) according to their updated schedule for Thursday morning.

Clinton is “leading in enough states to put her comfortably over the 270 majority needed to win the presidential election in November” a Washington Post / SurveyMonkey poll released just before tonight’s clash reported. As Trump continues to warn that the election will have been “rigged” if he loses, the New York Times estimates that Clinton has a 92% chance of winning.

1.5 mn feddan project land allocation today: The Egyptian Rural Development Company will allocate the first 500k feddans of the 1.5 mn-feddan desert reclamation project to investors and “small farmers” today and tomorrow, said Prime Minister Sherif Ismail at a press conference yesterday (runtime: 28:31).

The Digital Media Forum takes place today at the Four Seasons Nile Plaza.

What We’re Tracking This Week

The iPhone 7 will be available in Egypt on Thursday, according to the company’s Egyptian website. Shameless iSheep though we may be, we really don’t want to see what this thing is going to cost in light of the current FX situation.

Renewable energy companies qualified for phase two of the feed-in tariff program have until Friday, 21 October to accept or reject new terms. Meanwhile, the Egyptian Electricity Holding Company (EEHC) refused requests by phase-one companies to extend its 26 October deadline to reach financial close on their projects, ministry sources told Al Borsa. Phase one companies met with Electricity Minister Mohamed Shaker on Monday to press their case, according to the newspaper.

Last Night’s Talk Shows

Last Night’s Talk Shows is back for a second day in a row. Bringing it back is so far the most common reader suggestion in our survey. We’re still looking at the logistics of how to do this once again without burning-out our staff, but in the interim, we’ll try to dip into Talkshowland every now and again:

A draft of the brand-new Investment Act is ready, Investment Minister Dalia Khorshid told Hona Al Assema’s Lamees El Hadidy last night in the latest installment of what amounts to a virtual economic policy conference the last two days (watch, runtime: 19:28)

Khorshid presented the draft to President Abdel Fattah El Sisi at a policy review meeting yesterday, Al Borsa says. She told Lamees last night that the law would provide new tax and non-tax incentives as well as reintroduce free zones. The proposal also addresses some of the more obvious problems with the current act, including how state land is tendered to the private sector. The new law will seek to rework the defunct “single window” policy by instituting guarantees to investors for the timely delivery of land, she told El Hadidy.

The Investment Ministry is now coordinating with other government bodies to get to consensus on the law and on the state’s investment priorities.She is also scheduled to meet with business associations including the Federation of Egyptian Industries (FEI) and the Federation of Egyptian Chambers of Commerce to discuss the new law, ministry sources tell Al Borsa. The business community had supported drafting a new law in a poll conducted by the ministry. Khorshid’s also briefly touched on the IPOs of state-owned companies, where Khorshid provided no new updates. Khorshid expects the law could be ready to present to the House in a month’s time.

(Lamees didn’t touch on this while we were turned in, but also yesterday: President Abdel Fattah El Sisi officially established the Supreme Council for Investment, which will oversee investment policy, according to Al Masry Al Youm. The council will include Prime Minister Sherif Ismail, central bank governor Tarek Amer, a number of cabinet ministers and the heads of the FEI and the Union for Investors Associations. El Sisi had approved forming the council in July.)

Lamees isn’t done yet: She interviewed Mikhail Bogdanov, Russian President Vladimir Putin’s Special Representative to the Middle East. Bogdanov dismissed reports that Egypt and Russia are holding talks which would see the latter open bases in Egypt. On the return of tourists, he praised Egyptian efforts in implementing security measures that protect tourists, and hoped that Russian tourists would return soon.

Lamees also discussed a government committee that will look into setting “price guidelines” for key goods with cabinet spokesperson Hussam Qawish who called in to the episode. “These prices will not be fixed or enforced,” said Qawish, adding that talks with the Federation of Egyptian Industries are ongoing in how to implement the program.

Yesterday’s episode was not available online as of dispatch time.

The Egyptian Council of State (Maglis El Dowla) will complete its review of the long-dormant Media and Journalism Act in ten days’ time, said Parliamentary Affairs Minister Magdy Agaty in an interview on MBC Masr’s Yehduth Fi Masr. The law, which sets up a national media authority to govern the press whose head is appointed by the President and enforces a minimum capital of EGP 500k for media websites, will be a legislative priority to the House of Representatives. You can view the whole episode in MBC’s Shahid portal here (runtime: 54:26)

Also last night: Our recently insomniac early-morning editor, who was pretty harsh on Youm7 chairman / Al Nahar talk show host Khaled Salah in yesterday morning’s edition for his suggestion of taxing the rich into oblivion, wishes to give credit where credit is due: Salah sent a crew out to do street interviews with Cairo University students about Cairo U President Gaber Nassar’s decision to strip religious identity from university paperwork. Props to Salah for giving Dr. Gaber, his studio guest, a fair shake. (Watch the poll of students, run time: 2:23.)

Speed Round

Speed Round is presented in association with

It’s reasonably clear now why devaluation has not yet happened, and America may be our best friend in getting the ball into the end zone:

Egypt has only secured 60% of the USD 6 bn in third party-funding the IMF wants in place before approving the USD 12 bn extended fund facility, Prime Minister Sherif Ismail said yesterday, Reuters and Al Mal reported. This delay in securing the funding apparently pushed back the IMF board meeting on Egypt, an unnamed government source tells Al Shorouk. Either way, it’s unfortunately clear that the goalposts have been moved: We’ve gone from the IMF executive board meeting being scheduled in “two weeks” time (announced in early October) to “within a month (according to Finance Minister Amr El Garhy speaking Monday night). The delay in closing on the third-party funding could mean Egypt won’t receive the first tranche of the facility until January or February of 2017, the source added.

America may be key to getting to the IMF board: Whatever Washington’s frustration with Cairo through much of President Barack Obama’s term in office, the US may be our best chance of getting the IMF facility approved by the institution’s executive board. A senior Treasury Department official said yesterday that the IMF funding for Egypt is “critical” and explained that the “is working with other G7 economic powers to ensure that it is fully funded with bilateral financing.” Treasury’s undersecretary for international affairs, Nathan Sheets, is quoted by Reuters as having told a policy forum that: “We in the United States are supportive of the Egypt program as Egypt is working closely with the IMF in taking necessary steps. We’re also working very closely with our G7 partners to ensure that that program is fully funded."

Where’s the hitch? The government isn’t saying — not on the record, at least — and it hasn’t provided a breakdown of the funding pledged to-date. It could be China: Al Shorouk’s source (above) says the Chinese are pushing conditionality, including requiring Egypt to use its USD 2 bn to buy Chinese goods, putting the funds towards Chinese-Egyptian projects in the new capital, or paying interest.

And it could be Saudi Arabia: Amid the ongoing tiff, There are still no reports that Saudi has sent its pledged deposit, which conventional wisdom within the business community suggests is not the USD 2 bn received in September. That, most believe, was pledged during King Salman’s visit earlier this year, and policymakers were counting on a further USD 2 bn.

Government is dialing-up the rhetoric on subsidy cuts, which IMF boss Christine Lagarde has made clear is one of two requirements (the other being devaluation) for getting to “yes” at the board. Egypt will spend EGP 210 bn this year on subsidies and this is unsustainable, Prime Minister Sherif Ismail told reporters (runtime: 7:14) yesterday after a meeting with economists and Finance Minister El Garhy, ostensibly to “review the economic reform plan.” Oil Minister Tarek El Molla recently noted that all options are on the table so far as fuel subsidies are concerned, while reports surfaced this week that the Ismail government is mulling whether to raise fuel prices by 20-25% in advance of the IMF’s executive board meeting. El Garhy stressed on Monday his Monday appearance on Lamees El Hadidi’s show that subsidy reforms must not be delayed.

Ismail is still telegraphing that Cabinet is on board with devaluation, telling reporters that, “we are keen on seeing a unified rate, and that the Central Bank of Egypt governor’s policy accurately reflect the true value of foreign exchange,” Al Shorouk reports.

Did the Obama administration effectively cut aid to Egypt? It feels almost churlish to write that after noting America is actively working to help us secure the funding we need to close the IMF facility (above). That said,  Al-Monitor claims the United States reallocated more than two-thirds of its non-military aid earmarked for Egypt this year “amid growing frustration with Cairo.” The site quotes an unnamed State Department official as saying in an emailed statement that, “The US government redirected USD 108 mn in planned assistance funding from Egypt to other countries due to continued government of Egypt process delays that have impeded the effective implementation of several programs.”

Is a Turkey-style aid-for-migrants agreement with Egypt in the cards? EurActiv reports, without citing sources, that Austrian Foreign Minister Sebastian Kurz met with Foreign Minister Sameh Shoukry in Vienna last week to “test the waters” on a Turkey-style agreement on refugees. Egypt, the website says, “has shown willingness to discuss the matter.” The idea of an agreement with Egypt was first floated by Austrian Chancellor Christian Kern in late September and backed less than a week later by German Chancellor Angela Merkel. The EU’s agreement with Turkey has seen Ankara take steps to stem the flow of illegal migrants to Europe in return for financial aid and the promise of visa-free travel to the EU.

Naguib looking at investment opportunities in Brazil, Argentina. Naguib Sawiris is ready to invest in Brazil’s Oi if creditors and shareholders of the embattled telecom — now in bankruptcy protection — agree to “a recovery plan his team is working on with a group of the firm’s major bondholders,” the Wall Street Journal (paywall) reports. Oi, which a Brazilian analyst says faces “giant” challenges, would be Naguib’s second investment in Brazil alongside a real estate holding — and it may not be his last: The Journal says he’s “ready to make other investments in Brazil and Argentina, in the mining and tourism sectors.”

The Financial Times’ Heba Saleh and chief Allianz economic advisor Mohamed El-Erian have hit the nail on the head in the past 24 hours: We need to do a better job of selling the street on economic reforms. While we can’t help but wonder whether the parallel market rate is already priced-in to a considerable extent, but Saleh puts a human face on fear of how the measures will impact the poor and the middle-class in “Egyptians feel the pain in Sisi’s push to seal USD 12 bn IMF loan” (paywall). She’s also on-point with the assertion that a functioning FX market is only the first step: Alongside the reforms, the government needs to get the “moribund tourism industry” back on its feet (we think that starts with getting Russian charters back in the air) and bring the Zohr field into production.

The billboards Saleh notes declaring “Bold reforms shorten the route” are a start, but not a solution. As El-Erian told Lamees El Hadidi in her Monday night tour-de-force: “The most important thing is to continuously explain to Egyptian citizens why it is that these reforms are necessary and what to expect. When I go on a journey with my daughter, it’s very important to tell her where the destination is, when are we going to get there, and what the journey is going to look like. And part of a successful program is successful communication and feedback with people in the streets so that they understand the necessity of the reform program and the considerable upside of the Egyptian economy.” (Watch in English)

France24 also got in on the act, filing “Signs of dissent, desperation amid food shortages and rising prices in Egypt.”

Investor relations professionals are leaving money on the table by not exploring cities off the beaten track in North America (read: New York, Boston), our friends at BNY Mellon suggest in a survey of how North American investors see their access to management of non-US issuers. Some 90% of investors in “secondary cities” and 85% of investors overall “said they have some difficulties in getting access to non-U.S. issuers — higher than the 72% that reported such difficulty in 2014,” the survey found. The missed opportunities are substantial: “Secondary cities … represent USD 13.8 tn in [equity] AUM, or 40% of the North American total; EAUM in those cities has grown by 36% in the last four years, and yet investors located there are still largely overlooked for non-deal roadshows.” Tap here to download the full report.

We’re not even going to pretend to be unbiased on this one: Sherif Khalil, who runs investor relations at CIB, was a friend of Inktank, our parent company, back in the dog days of the Great Recession, when Enterprise was a gleam in our eye and — as some of you know — planned as a print magazine about entrepreneurism. This is probably old news to a number of you, but we learned just yesterday that Sherif has taken home the 2016 Middle East Investor Relations Society Award for “Best Investor Relations Professional — Egypt.” CIB as an institution also took home the nod as “Leading Corporate for Investor Relations — Egypt.” It’s the third year running CIB has taken home at least one award from MEIRS. Hats-off to Hisham E, Hussein A, Yasmine H, Nelly El-Z and Sherif.

Putting Egypt’s automotive market in context: Egypt was ranked 38 of out of 40 countries by number of motor vehicles produced in 2Q2017, according to the International Organization of Motor Vehicle Manufacturers (OICA)’s index. Egypt produced 18,160 vehicles in the quarter (including both passenger cars and commercial vehicles), it says. Egypt came in second in Africa in terms of automotive sales during 1H2016, with 129,200 vehicles sold, according to the organization’s data for Africa sales, trailing South Africa whose sales volumes reached 272,461 in 1H2016.

In other industry news: GB Auto has inked a pact with Abraaj-backed ride-hailing app Careem to give Careem drivers discounts on GB Auto vehicles, which include Hyundai, Geely and Mazda. Incentives will also include discounts on aftersales and spare parts, and the agreement also includes a trade-in policy for existing vehicles through GB Auto’s Fabrika pre-owned vehicles business, Al Mal reports.

The CBE kept FX rate unchanged at its weekly auction, selling the usual USD 120 mn for EGP 8.78 to the USD. The FX was earmarked for imports of basic commodities, state news agency MENA reported. Greenbacks were changing hands at EGP 15.55 per USD 1 on the parallel market, Al Shorouk reports, weakening slightly from the EGP 15.35-15.50 reported on Monday. Meanwhile, Reuters cites two traders as saying they were selling at they were selling at 15.50.

In other FX news: QNB has stopped the use of its prepaid cards abroad and has raised fees on credit card purchases to 6% from 5%, Al Mal reports. The National Bank of Egypt has reportedly cut by 30% its ceiling on purchases made abroad and reduced by 70% its cap on withdrawals. Alexbank also lowered its cap on withdrawals.

MOVES- Mohamed Gabr (LinkedIn) has joined law firm Al Tamimi & Company’s Cairo office as partner and head of corporate commercial. Gabr’s track record includes work on the merger of Al Borg and Al Mokhtabar to create Integrated Diagnostics Holdings, a private placement for Wadi Degla for Investment, the management buyout of TBS and the IPO on the EGX of Arabian Cement. A graduate of AUC and Cairo University law, he joins Al Tamimi from Matouk Bassiouny.

MOVES- Philips Lighting has appointed Tamer Abou El Ghar as the vice president and CEO for Africa. Mohamed Abo El-Azayem has been tapped as general manager for North East Africa, Al Borsa reports.

Wadi Degla Holding launched its first club outside of Egypt in Runda, Kenya, Capital FM and Capital Business report. Kenyan President Uhuru Kenyatta met top company officials before the inaugural ceremony, and his office unleashed a tweetstorm of enthusiasm after meeting. The inaugural ceremony was attended by Kenyan ministers and senior government officials, as well as a delegation from Egypt. The company is looking to open five new clubs around Nairobi, Wadi Degla Clubs Kenya Manager Joseph Reda said. It is also looking to expand into Uganda and Rwanda in the coming years, he added. Check out Wadi Degla’s marketing video here, or the Kenyan branch’s Twitter feed.

Random observation of the morning: The Egyptian embassy in Washington, DC, has learned how to play Twitter. It’s soft-diplomacy fluff, of course — from sports news to Egypt as seen from the Space Station, pics of 6 October celebrations in DC to honoring Egypt’s wounded warriors — but consistent and on-point.

Telecom regulator re-opens talks with the military to get more mobile spectrum: A brief news report in Amwal Al Ghad says the National Telecommunications Regulatory Authority has opened talks with the Armed Forces and the Egyptian Radio and Television Union to free-up additional spectrum that could be used to offer mobile services, citing NTRA chief Mostafa Abdel Wahed told.

Former UNICEF rep to Egypt gets 10-year sentence in Iran: Baquer Namazi, 80, former UNICEF representative to Somalia, Kenya and Egypt, was sentenced by an Iranian court to 10 years in prison “for cooperating with the hostile government of America,” Reuters reports. Namazi was sentenced alongside his businessman son Siamak, also a US-Iranian dual national. Namazi survived a 1994 attack by terrorists from the Islamist Group on his convoy in Upper Egypt. Four Egyptian police officers and an Egyptian UNICEF employee were killed in the attack. Iran-born Namazi grew up in Egypt, Somalia, Kenya and the United States. UNICEF’s statement on the sentence is here.

Other national and international stories worth noting this morning include:

  • Saudi Arabia has announced pricing for its first international bond issue, breaking them into 5-, 10- and 30-year maturities, pricing them at 160-235 bps over comparable US Treasuries, Bloomberg reports. The Financial Times, meanwhile, continues to dominate coverage of the story, noting that the order-taking process has begun.
  • Goldman Sachs net income surged 58% in the third quarter, while BlackRock, the world’s largest asset manager, “reported a drop in revenue for the third quarter compared with the year before as clients continued to march away from actively managed investment strategies,” the Financial Times (paywall) writes.
  • The Wall Street Journal’s series on the decline of actively managed funds this morning with three reasons why “the passive-investing revolution is set to last” (paywall).

CORRECTION- We had mistakenly noted yesterday that BP and Shell signed an agreement to process 650 mcf/d of natural gas from “Shell’s North Alexandria concession at BP’s Burullus processing plant.” The concession is BP’s, while the processing plant is Shell’s. We regret the error. H/t Davide C.

Egypt in the News

Reuters sets the tone for coverage of Egypt in the international press this morning on the strength of Ahmed Aboulenein’s investigation of how “How Egypt’s crackdown on dissent ensnared some of the country’s top judges” as well as Eric Knecht and Arwa Gaballa’s look at how “soaring sugar prices [caught the] government off guard.” The latter notes that “traders said high global sugar prices, which surged 50 percent over the past year, combined with a rising black market rate for USD has made it too expensive and risky for many importers to obtain sugar in recent months.”

The piece on judges is getting the most pickup. It claims that nearly half of the 75 or so judges who signed onto a 2013 statement calling for a return to “constitutional legitimacy” (but who were careful not to criticise the military or demand Morsi’s reinstatement) have been forcibly retired.

Also worth reading this morning: Eric Trager gets at the heart of what’s bedeviling relations between Cairo and Riyadh, suggesting in a piece for the WSJ that Egypt’s refusal to send troops to Yemen or to intervene militarily in Syria may be behind the current rift. Then, Egypt invited Syria’s intelligence chief (no friend of KSA’s) to Cairo for talks this week. Add that to the US decision to re-task more than USD 100 mn of USD 150 mn in non-military aid, he suggests, and “changes might be afoot.”

On Deadline

The Al Masry Al Youm columnist with the pseudonym Newton criticizes the government’s silence about verbal attacks on Cairo University President Gaber Nassar following his decision to remove the fields indicating religion from all university certificates and documents. Nassar has been the victim of a smear campaign led by Salafist figure Yasser Borhami, and the government that should be fighting religious extremism has been silent, he says. We don’t have the honor of knowing Dr. Gaber, but the man has taken a brave stance that anyone who believes in our future as a democracy should applaud and defend.

Worth Reading

We were going to save this for the weekend edition, but so many people have emailed it to us the past few days that we think you may want to be aware of it now. In “Why the Economy Doesn’t Roar Anymore,” former Economist finance economics editor Marc Levinson argues that the low-growth age through which we’re living isn’t the exception, but the new normal: “Here is the lesson: What some economists now call ‘secular stagnation’ might better be termed ‘ordinary performance.’ Most of the time, in most economies, incomes increase slowly, and living standards rise bit by bit. The extraordinary experience of the Golden Age left us with the unfortunate legacy of unrealistic expectations about our governments’ ability to deliver jobs, pay raises and steady growth.” If that doesn’t make you excited to be doing business in an emerging market, we don’t know what will.

Worth Watching

Whether in New York or in your own delusionary world, you cannot escape the wrath Egyptian taxi drivers. Sam Esmail, the Egyptian-American creator of the hit TV show Mr. Robot, decided to bring a little taste of home with him in this scene (runtime: 3:27) in which Elliot, played by Emmy-winning Egyptian-American Rami Malek, has to suffer the abuses typical of dealing with Egyptian cab drivers. The driver, frustrated as ever that he has to work, doesn’t miss an opportunity to yell at Elliot, who is mid-psychotic breakdown, proving that you can take the cab driver out of Cairo, but you can’t take the Cairo out of the cab driver.

Diplomacy + Foreign Trade

Tiran and Sanafir case emerges again amidst Egypt-KSA tension:The Administrative Court will rule on 8 November on the State Lawsuits Authority’s objection to the nullification of the Egyptian-Saudi maritime border agreement that handed Tiran and Sanafir Islands to Saudi Arabia, Al Shorouk reports.

Foreign Minister Sameh Shoukry discussed a USD 500 mn export-finance program as well as financing for petrochemical projects during a sit-down with African Export Import Bank President Benedict Oramah to discuss boosting inter-African trade, Al Masry Al Youm reports.


Ismail signs off on 2035 sustainable energy strategy

Prime Minister Sherif Ismail signed-off yesterday the 2035 sustainable energy strategy, a component of which is the restructuring of the gas sector, according to a cabinet statement picked up by Amwal Al Ghad. Plenty of details on the link. Also yesterday: Contracts for the Daba’a nuclear power facility are expected to be signed in December after Rosatom concludes its site survey, government sources tell Al Borsa. Orascom Constructions, El Sewedy Electric, and Arab Contractors were among the companies the government is recommending to take part in civil engineering works for the plant.

Egyptian Refining Company begins repaying international loans in 2018

The Egyptian Refining Company will begin repaying its international loans in 2018, Managing Director Mohamed Saad told Al Mal. The loans are estimated at USD 2.6 bn from global lenders that will be repaid over 17 years, he added. The company is looking to begin production in 4Q2017 and has currently completed 90% of the project, said Saad. The remaining 10% includes connecting pipelines, he added.


Industry Permits Acts execs in the works

The Trade and Industry Ministry is drafting executive regulations for the proposed industrial permits act approved by Cabinet and now set to be sent to the House of Representatives, Al Mal quotes minister Tarek Kabil as saying. The measure aims to cut total time to permits to as little as 30 days.

Suez Canal Authority signs USD 500 mn agreement to build iron and steel factory

The Suez Canal Authority signed a USD 500 mn agreement that will see Saudi Prince Walid bin Saud build a USD 1 bn steel plant under the name Suez Canal Company for Iron and Steel, Reuters reports, putting the plant at 1.2 MTPA. The factory will be at the core of a planned iron and steel complex, SCA chief Mohab Mamish told Al Borsa.


Orascom Development signs 3-year EUR 3.3 mn agreement to rent 3 hotels in Makadi

Orascom Development Holding agreed with German tour operator FTI Group to rent three hotels (Royal Azur, Club Azur and Makadi Gardens) in Makadi for EUR 3.3 mn per annum for three years through its Egyptian subsidiaries, Orascom announced in an EGX press release.

Automotive + Transportation

House discusses metro tickets price hikes

The House of Representatives transport committee will start discussing next week the Ismail government’s proposal to increase Cairo Metro ticket prices and is expected to hear testimony on why the transit system is running at a loss. Among those likely to be summoned: Transport Minister Galal Saeed, National Authority for Tunnels head Tarek Gamal El Din and the Egyptian Company for Metro Management and Operation chief Ali Fadali, the House’s transportation committee undersecretary Hassan Khater said, Al Mal reported. The government has repeatedly said it is debating price hikes for Metro riders.

Banking + Finance

Fincorp denies errors in Beltone’s fair value report

Fincorp apparently denied any wrongdoing and asserted that it was not in breach of contract for errors in the fair value report it conducted for Beltone Financial in a memo to the latter, Al Mal reports. This follows a letter sent by Beltone alleging a breach by Fincorp. Fincorp’s report, which as we noted yesterday gave Beltone’s shares a fair value of EGP 10.07 instead of EGP 9.30 per share, led to a suspension on trading Beltone’s shares temporarily on Monday.

ElSewedy Electric buys EGP 3.6 mn treasury bills in buyback program

ElSewedy Electric has completed the purchase of 3.6 mn treasury shares worth EGP 62.5 per share, Al Mal reported, as part of a buyback program “to utilize the excess cash in local currency,” according to the company’s e-mailed press release which we had covered last week. The buyback began Tuesday 11 October and lasted for five trading days.

Other Business News of Note

SCZone to be exempted from VAT?

Suez Canal Economic Zone chief Ahmed Darwish requested that the SCZone be considered a free zone and be exempted from VAT in the executive regulations, Al Mal reported. Meanwhile, the East Port Said Industrial Zone will be open to investor in 18 months, according to Al Borsa. SCZone had previously announced scheduled completion of the development by the end of 2017.

Juhayna’s volume of investments during 1H2016 at EGP 400 mn

Juhayna Food Industries has invested in 1H2016 some EGP 400 mn of the EGP 640 mn it had earmarked for expansion this year, CEO Seif El Din Thabet told Amwal Al Ghad.


Egypt fans will be allowed to attend 2018 World Cup qualifier

The Egyptian Football Association announced it will allow 50k fans to attend Egypt’s 2018 World Cup qualifier against Ghana in Alexandria on 13 November, BBC reported. Restrictions on fans at matches in Egypt have been in place since 2012.

Egypt may host African Cup of Nations 2017

Egypt is reportedly looking to host the 2017 African Cup of Nations, saying we’re a safer destination than Gabon, which the FA says has been marked by “unrest,” Al Shorouk reports.

On Your Way Out

President Abdel Fattah El Sisi extended the state of emergency in North Sinai for another three months yesterday, Al Shorouk reports. The news comes as two soldiers were killed in clashes with Daesh yesterday.

A Central Security Forces conscript in Garden City killed a low-ranking member of the police service and wounded another after what the Interior Ministry described as a work-related dispute, Ahram Online reports.

The markets yesterday

Share This Section

Powered by
Pharos Holding -

USD CBE auction (Tuesday, 18 Oct): 8.78 (unchanged since 16 March 2016)
USD parallel market (Tuesday, 18 Oct): 15.50 (from 15.40 on Sunday morning, 16 Oct, Reuters)

EGX30 (Tuesday): 8,213.53 (-0.36%)
Turnover: EGP 578.83 mn (85% above the 90-day average)
EGX 30 year-to-date: +17.23%

THE MARKET ON TUESDAY: EGX30 closed 0.4% down. Today’s top gainers were Orascom Construction, Elsewedy Electric, EFG Hermes. On the flip side, today’s worst performers were Egyptian Iron and Steel, Edita, and Egyptian Resorts. The market turnover was EGP 578.8 mn, and local investors were the sole net buyers.

Foreigners: Net short | EGP -80.4 mn
Regional: Net short | EGP -3.3 mn
Domestic: Net long | EGP +83.7 mn

Retail: 38.5% of total trades | 37.6% of buyers | 39.4% of sellers
Institutions: 61.5% of total trades | 62.4% of buyers | 60.6% of sellers

Foreign: 22.0% of total | 17.0% of buyers | 27.0% of sellers
Regional: 15.0% of total | 14.8% of buyers | 15.1% of sellers
Domestic: 63.0% of total | 68.2% of buyers | 57.9% of sellers


Why Devaluation is Not Going to Solve it All

While the IMF board is getting ready to discuss the USD12 billion loan package, Egypt is also getting ready to devalue its currency and cut energy subsidies. Although investors have been longing for such a shift in monetary policy, we examine below the repercussions of switching to a more flexible exchange rate regime on the external sector, and whether it would be the magic solution to Egypt’s tight external position. Highlights of the note by Pharos’ Ramy Oraby and Radwa El Swaify include:

  • External sector pressure to persist, pulling EGP further down in FY2017
  • Non-petroleum exports of goods: High inflation to negate benefits from local currency weakness
  • Remittances are highly affected by oil price as much as it is by the confidence in the Egyptian banking system
  • Suez Canal revenues are negatively affected by global trade rather than the value of the currency
  • Foreign direct investment is a key winner of floatation, but needs elimination of capital controls

Tap or click here to read the full note (pdf).


WTI: USD 50.76 (+0.93%)
Brent: USD 52.14 (+0.89%)
Natural Gas (Nymex, futures prices) USD 3.24 MMBtu, (-0.61%, November 2016 contract)
Gold: USD 1,263.50 / troy ounce (+0.05%)

TASI: 5,460.9 (-1.9%) (YTD: +5.3%)
ADX: 4,269.3 (+1.2%) (YTD: -0.9%)
DFM: 3,318.0 (+1.4%) (YTD: +5.3%)
KSE Weighted Index: 343.1 (0.0%) (YTD: -10.1%)
QE: 10,484.1 (+0.6%) (YTD: +0.5%)
MSM: 5,583.6 (0.0%) (YTD: +3.3%)
BB: 1,137.0 (0.0%) (YTD: -6.5%)

Share This Section


10 October (Monday) – 19 October (Wednesday): 19th COMESA summit in Magascar, attended by Industry and Trade Minister Tarek Kabil.

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.

30 October (Sunday): El Mal GTM’s Real Estate Debate Conference, Grand Nile Tower Hotel, 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.

2-6 November (Wednesday-Sunday): Petroleum Housing Conference, Petrosport Club, New Cairo, Cairo

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.