Tuesday, 25 October 2016

Everything Cabinet told the US business delegation yesterday. Plus: We will close IMF facility “in the coming two months,” Ismail says.


What We’re Tracking Today

It’s the final day for a visiting US business delegation representing more than 54 companies. Speaking with the delegation today are Oil Minister Tarek El Molla, Energy Ministry Mohamed Shaker and Suez Canal Economic Zone chief Ahmed Darwish. President Abdel Fattah El Sisi’s meeting with the delegation yesterday is front-page news in Al Ahram, which carries the Arabic version of a meeting readout from Ittihadiya quoting David Thorne, an advisory to US Secretary of State John Kerry, as saying the delegation emphasizes America’s support for Egypt’s bid for a USD 12 bn loan from the International Monetary Fund.

Four key members of the cabinet economic group met with the delegation yesterday. We have coverage of what they had to say in a special Spotlight (below, just after Speed Round).

Also this morning: We have a rundown of Prime Minister Sherif Ismail’s highly anticipated interview with Lamees El Hadidi in a special installment of Last Night’s Talk Shows, below.

To make room for everything, today’s Industry News and Calendar sections appear only on our website. We’ll be back tomorrow with coverage of today’s gathering as well as of a press conference to be attended by senior reps of the State Department, the US Chamber of Commerce and AmCham.

In addition to the US delegation, Al Ahram’s digital edition also gives front-page space this morning to Prime Minister Sherif Ismail’s attendance of a signing ceremony for a package of European Investment Bank funding for Egyptian transportation infrastructure and port programs and to the PM’s latest admonishment to his cabinet that the economic reform program must be structured to as to make sure the poor aren’t crushed by inflation.

A multi-party youth conference formally gets underway in Sharm El Sheikh this morning The Conservative, Salafist Al-Nour and (occasionally) liberal Wafd party will all be sending delegates. The gathering takes place under the auspices of President Abdel Fattah El Sisi. Ahram Online has more.
The Reuters Middle East Investment 2016 summit runs this week. The virtual summit takes the form of interviews with major figures in the business community across MENA. We have coverage of yesterday’s interviews in Speed Round, below, or you can jump straight to their landing page here.

** We’ll have the results of our first-ever reader poll later today in a separate email for your reading pleasure. We’ll announce the names of our 20 mug-winners in Thursday morning’s edition.

What We’re Tracking This Week

A European Bank for Reconstruction and Development (EBRD) delegation is in town this week for meetings with business and government to discuss how the bank can “to intensify its activities.” The four-day visit ends on Thursday.

Cairo is the “iconic city” at the 2016 Dubai Design Week in the Dubai Design District.

Last night’s talk shows

We will close the USD 12 bn IMF facility in the coming two months, Prime Minister Sherif Ismail told Lamees El Hadidy during an appearance on her show Hona El Assema last night. The government is ironing out details with the IMF, said the PM said, offering no further information on the nature of the details. A singing in two months’ time would mean that Egypt will not receive the first tranche until 2017. “We must stick to the reform process and devalue if we are to secure further payments of the facility,” said Ismail. Addressing whether the government can and should cut subsidies and devalue before signing the loan as recommended (required?) by IMF boss Christine Lagarde, Ismail said that while each piece of the reform plan will take place at an appropriate time, these reforms must happen concurrently.

The PM defended the ongoing raids by the government to seize sugar from private sector factories, saying the raids were limited in scope and necessary to better monitor the market. He admits that the government should have taken a more focused approach instead of blanket raids, but he did state that the seizures helped increase supply. Ismail rejecting the notion that there is a crisis with sugar. Supplies are being pumped in at a rate of 8,000 tonnes per day and Egypt and Egypt’s current reserves stand for three months. The effects should be felt on the street when the government increases that to 10,000 tonnes per day.

The government will not *permanently* set prices on goods. That appears to be the takeaway after Lamees peppered the PM with questions on the cabinet committee that will look into profit margin caps. In times of need, he said, the government must step in to regulate prices for a period. Ismail paid lip service to consultations with industry, but the ultimate message was clear: The government will regulate the market to maintain price stability for a period.

Ismail skirted questions about whether Egypt would fully float or adopt a gradual approach to devaluation, reminding Lamees that this is the Central Bank of Egypt’s business.

The government is planning a gradual shift away from the current commodity subsidy system in favour of a direct cash payout to qualified beneficiaries. The Takaful and Karama programs are models in that respect, he suggested. The PM rejected the notion that the government has been slow to move on cutting fuel subsidies, reminding viewers that fuel prices were allowed to increase in 2014; the government is on track to cut subsidy spending to 20-25% of expenditures by 2019. There’s no set timeline for those cuts, he said, because fuel prices are subject to global market swings.

Export subsidies will close the year at EGP 6 bn (we presume he means the state fiscal year of 2016-17), said Ismail. While public transport prices will remain on the same for now, they will rise in the future.

On government spending, the prime minister reiterated that the diplomatic corps faces sharp cutbacks as part of a plan to curb the state’s spending on everything except salaries for public servants. The cuts were approved at last week’s cabinet meeting, but will see no pullback from national projects or other “investments” the government undertakes, he said.

Lamees pressed the PM on whether money earmarked for national projects such as the new capital would be better spent on health and education. Ismail retorted that healthcare and education are already a priority for the government and his cabinet has indeed begun reforming the education system after 30 years of neglect. Projects such as the new capital are managed outside the government budget — and draw new investment, he said.

Cabinet appears not to have been terribly pleased with the first draft of the Investment Act, according to Lamees, something Ismail did not deny. He said only that the new law was still in its infancy and that the private sector will be consulted law.

Meanwhile, Ismail rejected the notion that businesses were being squeezed out of the economy by the government and the Armed Forces. He added that the latter will see its role in the economy reduced significantly in three years. The armed forces and the government are only taking a lead on infrastructure developments, something which would reduce costs for investors, he said.

How does the government plan to save the middle class was also a hot topic and resulted in the fairly perplexing answers. In essence, he ticked off a list of all the policies the government had announced to protect the lowest-income citizens as if they applied to the middle class, too, among them the benefits of Karama and Takaful, which would see their spending increased to EGP 2.5 bn; maintaining subsidies on fuel, power, and housing, and expanding access to the smart card system after inefficiencies are rooted out.

Ismail is not concerned about the planned 11 November protests.

Watch part 1 of the interview (runtime: 30:42) or part 2 (runtime: 30:42).

Speed Round

Speed Round is presented in association with

There’s daylight between Cabinet and the house on whether the so-called “profit margin guidance” on commodities is meant as a friendly suggestion — or a law.  The House Economy Committee is looking to draft a bill capping margins on basic goods (sugar, rice, and cooking oil) at 5% and certain other goods at 10%, Al Borsa reported. The pandering, populist House is saying that the move is important in light of the current runaway inflation. The House will consult with government ministries on the caps, said the committee’s deputy chair Amr El Gohary. As we noted yesterday, business and industry associations have called the move illegal.

Meanwhile, on the government’s side: “There is no obligation for setting the price. We will not be pushing companies to sell at a certain price. It is just a direction, that is all. There is no legal requirement," Trade and Industry Minister Tarek Kabil told Reuters yesterday after news the government had formed a committee to set “appropriate” profit margins for essential goods raised fears in the business community that the days of Nasserist price controls were on their way back. Prime Minister Sherif Ismail had said that the committee would focus on profit margins, not prices — we really see little difference — and suggested last night that the state would intervene under exigent circumstances. Kabil said he had no details on the goods to which the guidelines might apply or when they would be introduced. Ismail is expected to meet with the Federation of Egyptian Industries (FEI) this week to discuss the issue, a source from the FEI tells Al Mal.

Meanwhile, Kabil comes across as the voice of reason in a government determined to continue raiding factories to seize their sugar supply. These raids, which included confectionary maker Edita Food Industries and Pepsico, have now expanded to factories in Alexandria, prompting the food industries division of the FEI to call for an emergency meeting on Wednesday. The Federation of Egyptian Chambers of Commerce have also called a meeting with the Prime Minister to lobby to end the crackdown, something the PM called “necessary” and “limited” during his interview with Lamees last night.

A supply ministry official told Reuters that 2k tonnes of sugar were confiscated after Edita was unable to show original invoices, but Edita said it had produced all required documents and denied hoarding. “2k tonnes, which is three weeks of sugar for the company. This is a normal amount,” said Investor Relations and Business Development Manager Menna Shams El Din. “There is no doubt this sugar was obtained on the private sector and not from subsidised sugar.” Edita has four factories in Egypt including its Beni Suef plant, where production of hard and soft candies accounts for about 4% of its turnover. Edita detailed the incident in a statement to the EGX.

Confiscated sugar is being stored at the Food Industries Holding Company’s facilities, then sold through the Supply Ministry’s outlets, a government source told the newspaper.

Egypt has launched the world’s biggest yet tender for liquefied natural gas, targeting 96 shipments over 2017-2018, traders told Reuters. The period between delivering the shipment and receiving payment has been extended from 90 days to between 120-180 amidst the country’s scramble to maintain FX reserves.

Arab African International Bank cut the maximum allowed USD withdrawal while abroad to USD 300 from USD 500, but proof of travel has to be submitted two days in advance, Al Borsa reported. The Egyptian Gulf Bank has similarly reduced the USD limit to USD 250, with the same proof of travel condition.

Matouk Bassiouny named “national law firm of the year” for Egypt at IFLR Middle East Awards in Dubai: The Cairo firm also won the International Financial Law Review’s regional M&A transaction of the year “for its work on the acquisition of the consumer and retail business of Citibank by CIB Egypt.” Tamer El Hennawy, the firm’s corporate / M&A group co-head, led the transaction with support from partner Muhammad Nassef. Matouk Bassiouny was last named IFLR’s Egypt law firm of the year in 2014, the firm noted in an emailed statement.

EGP hits another record low on the parallel market: Except, of course, that nobody is buying or selling at any price. The EGP weakened significantly on the parallel market yesterday, with greenbacks changing hands at an unprecedented EGP 16.05 per USD 1.00, Al Borsa reports, up from 15.40 on Sunday. One trader is quoted as saying there is demand, but that FX dealers are holding back supply in anticipation of devaluation.

SPOTLIGHT ON: Reuters Middle East Investment Summit 2016

"We have to go around and tell people, come and see Egypt with your own eyes … we have a lot to offer," Tourism Minister Yehia Rashad tells Reuters. "Security at the airport has been stepped up very professionally,” he adds, noting that Egypt is looking to tap into new markets including China, Japan, Germany and Ukraine. The article says Rashad faces an “uphill battle” caused by the Metrojet flight, the Paris flight, the Cyprus flight, and the Mexican tourists incident have resulted in tourism receipts halving in FY2015-16 to USD 3.77 bn.

Egypt is expecting to cut its trade deficit by USD 11-12 bn in 2016 to ease the USD shortage and is encouraging domestic production to fill the void left by lower import levels, Trade and Industry Minister Tarek Kabil told Reuters. Egypt’s strategy aims to grow domestic industry by 8% over three years, he added. Domestic companies were producing substitutes primarily in food industries, but also building materials, chemicals, leather and furniture, he said. The USD shortage is exacerbated by a severe trade imbalance — Egypt imported USD 67 bn worth of goods in 2015 but exported just USD 18.5 bn, according to trade ministry data. The trade deficit had narrowed by USD 8 bn in the first nine months of this year, with imports falling USD 7 bn but exports rising by only USD 1 bn. Egypt has since launched a logistics center in Kenya, a country that has five immediate neighbours, and is looking to double the USD 4 bn in exports to Africa within five years, he added. To boost manufacturing, Egypt has increased the amount of industrial land available and will offer 10 mn sqm on 30-year-leases this year, he said. "We are looking for exports to be 50% of imports within three years," he added.

Saudi’s bid to develop its housing market and will be a primary growth driver for Al Rajhi Bank through 2020, CEO Steve Bertamini told Reuters. Saudi’s reform agenda includes tripling the government’s non-oil revenues by 2020 and raising the percentage of Saudis who own their own homes in the same timeframe to 52%. The bank announced it had agreed with the Ministry of Housing to become the first Saudi bank to participate in a new government scheme to increase homeownership by offering mortgages with the state funding part of the down-payment.

MOVES- Former head of the Industrial Development Authority (IDA) Ismail Gaber (CV, Arabic) was appointed head of General Organization For Export & Import Control following the resignation of his predecessor, Youm7 reports.

State-run newspapers carry Interior Ministry warning against “conspiratorial schemes to incite chaos and confusion.” A statement quoting Interior Minister Magdy Abdel-Ghaffar is a lead item in state-owned newspapers warning that security forces will respond “decisively” to “unprecedented challenges” in the form of “conspiratorial schemes to incite chaos and confusion with the aim of creating skepticism over the ability of the state and its institutions to satisfy popular expectations.” The statement notes Abdel-Ghaffar as saying, “The security forces will not, under any circumstances, tolerate any attempt to repeat scenes of chaos and sabotage at a time when the country is moving forward with firm steps toward a promising future, God willing,” in what we take as a bid to link planned protests for 11 November to the events of 25 January 2011. The statement is getting play in international media after being picked up by the Associated Press.

Other national and international stories worth noting this morning:

  • Egypt losing auto manufacturing hub bid? Egypt, Algeria and Angola appear to have lost their respective bids to become automotive manufacturing hubs to Nigeria and Kenya, Bloomberg reports. “A group of carmakers led by executives from Ford Motor Co. and Nissan Motor Co. will seek to work with Kenyan authorities to develop an auto-manufacturing industry in the east African country,” the newswire said. Details here.
  • Turkey’s first IPO in six months has been called off “just days before shares were due to start trading,” Bloomberg reports, saying Turkcell’s USD 125 mn spinoff of its towers subsidiary would be postponed until “markets come to a more secure and stable state.” Details here.
  • A long-sought Canada-EU trade deal is on the skids as a region of Belgium objected to the pact. Canada’s prime minister was due in Europe this week for the signing of the agreement. Details in the WSJ | FT | Reuters | Guardian.


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Spotlight on the US business delegation

How does the US business community see 30 June 2013? What will attract US businesses to Egypt? We asked these questions and more of Khush Choksy and Greg Lebedev, both of whom are in Cairo with one of the largest US business delegations to visit the country post-revolution. Choksy is the US Chamber of Commerce’s Senior Vice President for Middle East and Turkey Affairs, while Lebedev is chairman of the Center for International Private Enterprise. The delegation wasn’t specifically timed to give a boost to Egypt’s bid for an IMF facility, they said, but they’re not going to complain if it’s interpreted that way. In a sit-down earlier this week with Enterprise, the two speak of why Egypt needs to stop talking to the think-tank community and start talking to business — and why they’ve invited President Abdel Fattah El Sisi to visit the US heartland. Tap or click here to read the interview in full.


The second day of the U.S. Business Mission to Egypt saw a panel of ministers from the Ismail cabinet’s economic group paint an overview of the economy, touching equally on what has been done and what needs to be done. A few spoilers: Trade and Industry Minister Tarek Kabil said the government’s trade and industry strategy will be unveiled in a couple of weeks, Investment Minister Dalia Khorshid again confirmed the Bankruptcy Protection and Liquidation Law is in the works, Finance Minister Amr El Garhy said the roadshow for Egypt’s eurobond issuance will take place second half of November, and International Cooperation Minister Sahar Nasr said we have signed loans and grants worth USD 15 bn in the past year, of which a total of USD 5.3 bn has so far flowed into the country.
Tarek Kabil, Industry and Trade Minister
Key takeaways:

  • The government’s “mega projects” are “extremely important for investment.”
  • The government is taking steps to make it easier to do business in Egypt: Witness the Industrial Licenses Act (which he said will cut the average time required to get a license to less than a month from 634 days), the Import Registry Law (an import control measure that he defended as actually being better for foreign sellers), and the Industrial Land Allocation Law (which will which create one entity for allocation).
  • The goal is to grow industry by 8% by 2020 and for industry to reach 21% of GDP from a current 17.7%.
  • The industry and trade strategy launch in a couple of weeks.
  • The ministry has a particular focus on engineering & technology, textiles, building materials and chemical industries.
  • The ministry will open a leather cluster this year and is working on both a furniture cluster and a chemical cluster. The goal is to have 22 clusters nationwide that build competence in industries by basing feeder companies in close proximity to major manufacturers.
  • The government is trying to develop an institution of some form or another to drive SME policy, working on feasibility studies, lining up program funding, and delivering training and development.
  • Africa is a major focus: Egypt exports USD 4 bn to African countries, and aims at doubling the number in the next five years.
  • The aim is to make Egypt a manufacturing hub for Africa (especially Kenya and western African countries) and an exports hub given its access to USD 1.6 bn through free trade agreements.

Best quote: “It is not a secret that we are going through an economic challenge. We are in a bottleneck — and I say ‘a bottleneck’ because we will get out of it.”
Dalia Khorshid, Investment Minister
Key takeaways:

  • The first meeting of the Supreme Investment Council will be held “in a short while,” Khorshid said.
  • The ministry has identified that 60% of problems facing investors have to do with land allocation, while 25% are procedural and related to red tape.
  • Investment incentives are back on agenda with the new investment law, which will also shore-up clauses with which the business community has had issues. Khorshid said that the next draft of the law would ready within weeks.
  • The ministry is working on the Bankruptcy Protection and Liquidation Law. The aim is to make it a tool that is useable by businesses.

Best quote: “The establishment of the Supreme Investment Council led by Egyptian President Abdel-Fattah El-Sisi indicates that investments are a top priority.”
Amr El Garhy, Finance Minister
Key takeaways:

  • The government’s macroeconomic targets: 5-6% growth rate, 6-7% budget deficit, and 80% debt-to-GDP ratio
  • The roadshow for the eurobond offering will take place “hopefully in the second or third week of November,” El Garhy said, putting the value of the offering at USD 2-2.5 bn. In that sense, Saud’s USD 17.5 bn international bond, which generated a demand book of USD 67 bn, is promising, indicating “appetite for debt with good yield.”
  • Key to the subsidy system is to make it more efficient — to ensure it benefits those who need it most. Building the quality of the state’s database will be key.
  • The government’s economic reform program is fundamentally Made in Egypt: “We are doing what we need to do, not what the IMF wants us to do.” There is no set date for when the IMF would decide on the USD 12 bn loan.
  • On VAT, he said “we are facing some issues,” but that the ministry is in contact with stakeholders to make sure it is implemented in the best way possible. Executive regulations will be issued in the next two to three weeks, he suggested.
  • He downplayed the social impact of the reform program, saying it will “not really be as people think.” Still, the deficit has to come down. We need a sustainable economy that will attract investment, that can grow sustainability.
  • He sees particular opportunities in widening the tax base, attracting FDI and public markets investors, pressing forward with the program to IPO state assets, including Banque du Caire and AAIB.
  • Taxes are 12.65% of GDP today: “We want to take it to 16-17% in 5-6 years,” he said, by expanding the tax base.
  • We want to activate the capital market to become a catalyst for investment.”
  • Egypt’s capital market is equivalent in size to 20% of GDP today — that figure stood at 70% in 2007-08. The aggregate market cap is maybe EGP 500-600 bn today. Move forward with devaluation and expanding the market with new IPOs and we can easily see that at EGP 3 tn.
  • The government wants to see the private sector account for 70% of the economy.
  • Infrastructure is important to unlock economic value.

Best quote: “We want to unleash the beast.” –An expression El Garhy first coined at Euromoney earlier this fall.
Sahar Nasr, International Cooperation Minister
Key takeaways:

  • The International Cooperation Ministry has signed agreements for loans and grants worth USD 15 bn in the period September 2015 through today. Cash of USD 5.3 bn has flowed into Egypt as a result of those agreements.
  • Nasr emphasized the government is taking a consultative approach to the economic reform process, talking with all stakeholders, including business.
  • She stressed the importance not only of legislation, but the ability of the state to implement it.
  • Economic reforms without social development programs will not be sustainable.
  • Working on infrastructure is a priority; infrastructure creates jobs and stimulates follow-on investments.

Best quote: “It will only be a successful reform program if it is done in an inclusive manner.”
David Thorne, Senior Advisor to the U.S. Secretary of State
Key takeaways:

  • “A prosperous Egypt is essential to the stability and prosperity of the region,” Thorne said.
  • “The US will remain an actively engaged ally. The US supports a stable, prosperous, democratic Egypt.”
  • “The US government supports Egypt’s economic reforms and its IMF program.”
  • He said Egypt is undertaking “strong steps on the road to restructuring the economy.”
  • He also emphasized the power of civil society and of SME development, saying entrepreneurship is a “powerful force for change and a creator of jobs.”

Best quote: “We are working closing with our G7 partners to ensure the IMF program is fully funded,” said Thorne, reiterating earlier statements by the U.S. Treasury.

Snippets from top executives:

  • Omar Mohanna, Chairman, Egypt-U.S. Business Council: “Tough decisions have been made and tougher decisions will be made,” adding they will “unleash Egypt’s potential.”
  • Tarek Youssef, Regional Head of Africa and the Middle East, Pfizer: “We believe in Egypt and in its investments. We will definitely continue to invest in Egypt.”
  • Tamer El Naggar, CEO, AmCham Egypt: “Egypt’s economy has been remarkably resilient.”

Also speaking from the business community was Pepsico MEA Omar Farid, who stated that the investment climate in Egypt remains challenging. Farid did not comment on reports that one of Pepsi’s factories had halted production after state inspectors seized its sugar supply, but said that the FX crunch and inflation are the two biggest challenges facing the country.

David Thorne, Senior Advisor to the Secretary of State, who also spoke at the gathering, said the US is committed to helping Egypt get the funding it needs for the reform agenda.

Egypt in the News

It’s a generally quiet morning for Egypt in the international press, but what coverage there is doesn’t really paint a pleasant picture of Omm El Donia. Wire reports on Interior Minister Magdy Abdel-Ghaffar’s warning against protests on 11 November are getting wide play (see Voice of America and Mail Online as examples at the opposite end of the class scale). And the global business press is going ape over the seizure of sugar at Edita’s plant by Supply Ministry officials (Bloomberg | Reuters) and the prime minister’s defense of the same as limited and necessary.

On Deadline

Al Masry Al Youm columnist Amr El Shobaky says public calls for violence against political opponents in response to fictitious calls to protest are dangerous. The same form of dialogue promotes an absence criticism, which in turn polarizes public opinion between “patriots” and “traitors,” he says.

Image of the Day

Thank you, Teda Fun Valley, for “injecting a happy force” in our morning. “Out in the desert beyond Cairo, where sand stretches to the horizon and oil refineries dot the landscape, Hello Kitty schmoozes with a sharpshooter and a penguin. Imperial stormtroopers guard a bank next to the waterslides. And tourists in bumper cars gleefully attack each other with lasers. The bizarre pop-cultural mashup brings Western entertainment to Egypt by way of China, which financed the construction of four theme parks in the Ain Sokhna desert. ‘It was a very strange showcase of special interests exerting themselves,’ says Klaus Thymann. ‘I couldn’t work out if it is incredibly clumsy or really clever.’” From Wired magazine, a 14-image photo essay.

“Go inside China’s bizarre theme park in the Egyptian desert.”Or check out the company’s wonderfully kitchy company profile (pdf).

Worth Watching

The IMF is very confident in the success of Egypt’s economic recovery plan, said outgoing IMF Director for the Middle East and Central Asia, Masood Ahmed in interview with CNBC Arabia which aired this past Sunday (runtime: 12:24) . He stated that the IMF would meet in the coming weeks to approve the loan, he said in a discussion which largely focused on the GCC.

Diplomacy + Foreign Trade

EBRD visit to Cairo underway: PM Sherif Ismail and International Cooperation Minister Sahar Nasr met with the European Bank for Reconstruction and Development (EBRD) delegation currently visiting Egypt yesterday to discuss the bank’s new cooperation strategy in Egypt, Al Masry Al Youm reports. Pillars include infrastructure development, SME financing, strengthening the private sector, and investing in developing a specialized labour force.

USD 460 mn from JICA for Egyptian Museum: The International Cooperation Ministry has signed a USD 460 mn agreement with the Japanese International Cooperation Agency to finance the second phase of the Grand Egyptian Museum, Al Mal reported. The government aims to launch the first phase of the project by late-2017.


Government asks e-finance to prepare to implement fuel cards

The government has asked e-finance to prepare to distribute smart fuel cards “at any moment,” unnamed sources tell Al Borsa. The first phase of the system has already been implemented and has slowed growth of fuel consumption from 7% annually to 0.005%, the source adds. An earlier suggestion to limit fuel subsidies to one vehicle per family has reportedly been rejected.

Petrobel contracts Dresser-Rand to import three gas turbines for Zohr field

The Belayim Petroleum Company (Petrobel) has contracted rotating equipment supplier Dresser-Rand to import three SGT-400 industrial gas turbines and their accompanying electrical generators, according to a company statement. The contract is for early-2017 delivery and includes maintenance and spare parts.

Five companies submit offers for Assiyut power plant tender

Five companies have submitted offers in an Upper Egypt Electricity Company tender to provide transformers for phase three of a 650 MW Assiyut power plant due to be operational in mid-2019, Al Borsa reports.


Environment Ministry allocates EUR 70 mn towards curbing industrial pollution

The Environment Ministry has allocated EUR 70 mn towards curbing industrial pollution at 14 cement, fertilizer, and paper factories, an unnamed source tells Al Borsa. The funding comes from the European Investment Bank, the French Development Agency, the KfW Development Bank, and the European Environmental Agency as part of the third phase of a program to control industrial pollution.

Telecoms and CIT

MNOs want TE to pay for maintenance before renting network

The three existing mobile network operators are asking Telecom Egypt to bear some of the cost of maintaining infrastructure before signing a national roaming agreement that would rent TE space on their existing networks, Al Borsa reports. Under the agreement, TE will only be allowed to contribute to equipment at cell sites if it can guarantee other operator’s equipment are unaffected, sources revealed. Etisalat Egypt may allow TE to use its infrastructure in exchange for services, Etisalat Chairman Gamal El Sadat said.

In other industry news: Orange Egypt has paid EGP 2.150 bn, representing the EGP portion of the 4G license, unnamed sources told Al Mal. The company is set to hold an EGM on 6 November to vote on obtaining a loan from its parent company to fund the USD portion of the license, valued at USD 248 mn, the source added. The mobile network operators were given until 13 November to secure financing.

Health + Education

Andalusia Hospital investing USD 50 mn over three years

The Andalusia Hospital Group is planning to invest USD 50 mn into the domestic market over the coming three years, head of strategic planning Waleed Mohamed El Sayed told Al Borsa. The group has allocated EGP 100 mn towards acquiring a 100-bed hospital in New Cairo, Sixth of October, or Heliopolis, he added. The group is also planning double its Maadi branch’s capacity at a cost of EGP 120 mn and will upgrade its Alexandria branches at a total cost of EGP 90 mn, said El Sayed.


Antiquities Ministry to issue tickets for visiting historical sites in Luxor in USD by November

The Antiquities Ministry will begin issuing tickets in USD next month for tourist sites in Luxor, according to minister Khaled El-Enany, Al Borsa reports. Ticket prices will range from USD 100 to USD 250 and will allow visitors multiple entry to sites over the course of five to seven days, with some ticket types allowing visitors entry to multiple sites.


Council of State signs off on local administration law

The Council of State (Maglis El Dowla) has signed off on the local administration law, as well as the draft law on the National Electoral Committee, Al Ahram reports. The Council earlier signed off on the Natural Gas Act and the Industrial Permits Act.

Egypt Politics + Economics

Awqaf, Abou Hashima “donating” sugar

The Endowments Ministry and CEO of Egyptian Steel Group Ahmed Abou Hashima are launching a joint initiative to provide 200k kgs of sugar to the Egyptian market, Al Shorouk reports. 100k kgs of the stated amount will be donated to 50k families in Upper Egypt. Minister Mohamed Mokhtar Gomaa said financing the initiative through both the ministry’s and Abou Hashima’s funds is “in line with sharia principles of social solidarity”, according to Ahram Gate.

National Security

Cops arrested on suspicion of role in Islamist jailbreak that left police major dead

Fourteen members of the police service have been ordered detained by prosecutors investigating their alleged role in a jailbreak in Ismailia last week that left a police major dead. A bystander and another police officer were wounded in the incident, which saw six inmates, including Islamist militants, escape when they overpowered a guard. The story has been picked up by international wires. Al Shorouk has more here and here, and Youm7 has also caught up other further details.

On Your Way Out

If it’s mid-fall, it’s time for the latest school scandal: State-owned Al Ahram’s breaking news website has an image of a female public school teacher disciplining a rowdy student by pinning him to the ground with her foot. Education Minister Hilali El Sherbini ordered an investigation after the photo went viral on social media.

The markets yesterday

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USD CBE auction (Sunday, 23 Oct): 8.78 (unchanged since 16 March 2016)
USD parallel market (Monday, 24 Oct): 16.05 (from 15.60 on Sunday morning, 23 Oct, Al Borsa)

EGX30 (Monday): 8,228.13 (-0.56%)
Turnover: EGP 531.92 mn (28% above the 90-day average)
EGX 30 year-to-date: +17.44%

THE MARKET ON MONDAY: EGX30 ended Monday’s trading session 0.6% down. Today’s top performers were Edita, ACC, and Egypt Kuwait Holding. On the flip side, today’s worst performers were Elsaeed Contracting, Global Telecom, and Egyptian Iron and Steel. At a market turnover of EGP 531.9 mn, regional investors were the sole net buyers.

Foreigners: Net short | EGP -1.5 mn
Regional: Net long | EGP +2.4 mn
Domestic: Net short | EGP -0.9 mn

Retail: 54.7% of total trades | 56.8% of buyers | 52.6% of sellers
Institutions: 45.3% of total trades | 43.2% of buyers | 47.4% of sellers

Foreign: 26.0% of total | 25.8% of buyers | 26.1% of sellers
Regional: 14.0% of total | 14.3% of buyers | 13.8% of sellers
Domestic: 60.0% of total | 59.9% of buyers | 60.1% of sellers

WTI: USD 50.42 (-0.2%)
Brent: USD 51.46 (-0.62%)
Natural Gas (Nymex, futures prices) USD 2.86 MMBtu, (-0.7%, November 2016 contract)
Gold: USD 1,264.90 / troy ounce (+0.09%)

TASI: 5,796.9 (+1.0%) (YTD: -16.1%)
ADX: 4,289.4 (-0.2%) (YTD: -0.4%)
DFM: 3,359.4 (+0.1%) (YTD: +6.6)
KSE Weighted Index: 348.7 (+0.1%) (YTD: -8.6%)
QE: 10,406.3 (-0.3%) (YTD: -0.2%)
MSM: 5,531.5 (-0.1%) (YTD: +2.3%)
BB: 1,148.6 (+0.1%) (YTD: -5.5%)

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23-25 October (Sunday-Tuesday): A high-level US trade and investment delegation is in town for talks with business and government. The mission is organized by the US Chamber of Commerce’s US-Egypt Business Council, the Egypt-U.S. Business Council, and AmCham Egypt

24-27 October (Monday-Thursday): European Bank for Reconstruction and Development is in Cairo to discuss opportunities to “intensify its activities” in Egypt.

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.

25-26 November (Friday-Saturday): 27th Energy Charter Conference, Tokyo, Japan.

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.

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