Wednesday, 2 November 2016

Sisi administration gives nod to new tax breaks, investment incentives


What We’re Tracking Today

A random reason to be grateful on this Wednesday morning: If you have a corporate website of any description, you’re probably better-off than Saudi Arabia’s Public Investment Fund. In declaring PIF the world’s most opaque sovereign wealth fund, the Wall Street Journal writes: “The fund has a website with one page in Arabic and another in English that says it is ‘under development.’”

Also: The Supreme Investment Committee met yesterday. We could make fun of the name, and we’d love to repeat our screed against the handling of the capital gains tax (the exemption benefits day traders who do nothing to create jobs or growth, but punishes owners of real business who cash out dividends). That said: The government sent a good message yesterday with a basket of tax exemptions for certain types of strategic projects. More of this thinking (and action on devaluation + subsidies), please.

And finally: Some of us slept without A/Cs on last night. The drone of the A/C did not interrupt our workday yesterday, and it’s not the soundtrack playing in the background as we work on this morning’s edition. Yes, friends: That glorious two-week season known as “fall in Egypt” has begun.

Not-so-random reminder this morning: The EGP strengthened to EGP 17.50-17.70 on the parallel market yesterday, Al Mal reports. That’s still nonsense. Enterprise readers are, in the main, the leaders, owners and senior managers of businesses in Egypt — and 56% of you see the EGP at 11.51-13.50 on 1 January 2017, according to our first-ever reader survey. Another 20% of you think it will be at 13.51-14.50, but only 8.6% of readers expect the EGP to be worth 15.50 or more to the greenback at the start of the year.

Last, but not least: It’s the second day of November. We should know “these days” whether Saudi Aramco is planning to ship petroleum products to Egypt this month. And we should fund out today / tomorrow where reserves stand when the Central Bank of Egypt releases its monthly report.

What We’re Tracking This Week

The Emirates NBD / Markit PMI will be published here tomorrow at 6:15am. Sadly, we’re not holding our breath in anticipation of it reversing the trend of the past 12 months.

The first EU-Arab World summit is happening in Athens tomorrow and Friday (3-4 November). Investment Minister Dalia Khorshid, Federation of Egyptian Chambers of Commerce president Ahmed El Wakeel and Chamber of Chemical Industries chief Sherif El Gabaly will all attend. Here is the summit’s website and its agenda.

On The Horizon

The Central Bank of Egypt’s Monetary Policy Committee will convene on Thursday, 17 November to review interest rates.

Bank of America Merrill Lynch’s MENA 2016 Conference will run from Monday, 14 November till Wednesday, 16 November in Dubai.

Speed Round

Speed Round is presented in association with

The Central Bank of Egypt is working on banning deposits of FX sourced on the parallel market: The Central Bank of Egypt is reportedly considering requiring banks to accept hard currency only if the client can disclose where and how the currency was sourced, Al Borsa reports. Guidelines for the move, which would mean presenting receipts to the bank at the official rate, are being developed this week, a senior banking source tells Daily News Egypt. The move would effectively make FX from the parallel market worthless, the source added.

Meanwhile, the CBE kept rates unchanged at yesterday’s FX auction, selling the usual USD 117.9 mn for EGP 8.78 to the USD, according to a CBE statement. On the parallel markets, greenback were changing hands at EGP 17.50-17.70 compared with c. 18.20 the day before, Al Mal reports, with the usual caveat that no substantial sums are actually changing hands at that price.

The Federation of Egyptian Chambers of Commerce announced it is boycotting the parallel market for two weeks to tackle the soaring parallel FX rate. The federation has also called on its member to stop the import of “non-essential” goods for three months, Al Masry Al Youm reported. With the initiative getting the backing of 70% of merchants, according to its head Ahmed El Wakeel, the Federation is already taking credit for the EGP strengthening yesterday. Both the importers division and the FX bureaus division have also come out in favor of the move. “Hoarders of USD will lose out,” said the head of the exchange division Mohamed El Abyad, adding that a number of decisions will be taken very soon to stabilize the FX rate. Comments from El Abyad and others imply the move was made in conjunction with the CBE. The federation will begin releasing its own guide to the fair value of the USD on its website in a month, said organization board member Hassan Khalil, Al Mal reports.

…But, no, no one imposing a moratorium on importing cars, said Hamdy El Naggar, the head of the importers division at the Federation of Chambers of Commerce. El Naggar tells Al Mal that federation’s initiative to pressure the parallel-market price downward does not extend to a ban on importing ready-made goods. The importers division is also backing currency swaps with Saudi Arabia, the UAE, Russia and China.

Supreme Investment Council adopts 17 pro-investment policies: The Supreme Investment Council headed by President Abdel Fattah El Sisi adopted yesterday a basket of 17 measures designed to promote investment and job creation, Al Mal reports. Many of these have long been called for by business, while others were rumored to be part of the new Investment Law. No date was given for the implementation of the policies. They include:

  • Forming a “National Payments Council” that will work to restrict the handling of FX outside the banking sector;
  • The capital gains tax on stock market transactions will not come into effect for another three years;
  • Producers of agricultural crops that Egypt imports or exports will get tax exemptions;
  • Five-year tax exemptions for manufacturers of “strategic” goods that Egypt imports or exports;
  • Five-year tax exemptions for agriculture and industrial investments in Upper Egypt;
  • Setting a minor symbolic tax for SMEs to encourage them to file tax returns and be eligible for the CBE’s funding initiative;
  • The Egyptian Rural Development Company (which manages the 1.5 mn feddan project), the New Administrative Capital Company, the New Al Alamein development company and the companies managing the Siemens combined cycle power plants have been added to the roster state-owned companies that could go to IPO in the coming three years;
  • 25% discount on land in the New Capital, East Port Said and other new Urban Developments for three months;
  • The Industrial Development Authority (IDA) will issue temporary permits for unlicensed factories for one year, effectively giving them 12 months to obtain full permits;
  • Begin tendering land with utilities for industry in Upper Egypt for free as outlined by the IDA.

Other decisions included granting public-private partnership units in the government more leeway to operate; giving 35% discounts on settlements reached with the “committee to repossess illegally occupied land” (which we’re taking as meaning the Mahlab committee); and ensuring all ministries back government-brokered solutions on investment disputes.

Reuters has the story in English. The Supreme Investment Council is headed by El Sisi and includes the head of the General Intelligence Directorate, the ministers of finance, investment, trade, interior, justice and defense, as well as the governor of the central bank.

Cigarette maker Eastern Company has not stopped production and has a 12-month stockpile of raw materials, Chairman Mohamed Haroun told Al Shorouk. Philip Morris had signed an agreement in April to pay Eastern in in USD for producing foreign-labelled cigarettes, the story alleges, but has instead been paying in EGP. The company then reduced output of L&M cigarettes, a top-selling brand, claiming it could not import tobacco and raw materials given the FX crisis, prompting a meeting between the two companies this week to find a solution, said Haroun. Eastern Company has alternative solutions if Philip Morris does not resume paying in USD, he added, including using a deferred payment system, issuing tenders in EGP, or a barter trade system through which Eastern company will pay offshore suppliers in-kind through shipments of commodities including cement and fertilizers.

EFG Hermes, CI Capital remain atop brokerage league tables for October: EFG Hermes closed the month with a 19.7% overall market share of transactions on the Egyptian Exchange, followed by CI Capital at 12.4%. Beltone (6.3%), Pioneers (4.3%), and Pharos (3.6%) round-out the top five. For the first ten months of this year to date, EFG Hermes holds a 19.0% share and CI Capital has 10.0%, followed by Pioneers (5.1%), Sigma (4.0%) and Pharos (4.0%). Want to drill deeper into the rankings or to look at other tables? The monthly rankings file is here and the YTD here, both in pdf.

PBDAC rebrands, seeks USD 700 mn loan from World Bank and Saudi Fund. The Principal Bank for Development and Agricultural Credit (PBDAC) is now called the Egyptian Agricultural Bank and will now fall under the supervision of the Central Bank of Egypt. The news comes as the Egyptian Agricultural Bank is reportedly in talks for a USD 700 mn loan from the World Bank and the Saudi Fund for Development. The bank also plans to raise its capital to EGP 5 bn from EGP 1.5 bn, said the bank’s head El Sayed Qusair. The House approved the rebranding and new line of reporting yesterday; the bank had previously fallen under the embattled Agriculture Ministry.

The Commercial International Bank-Egypt (CIB) was named “Best Bank in Egypt” for the twentieth time as part of Global Finance magazine’s World’s Best Private Banks Awards for 2017, the bank said in a statement.

The Armed Forces announced it will distribute its “largest quantity of food supplies” to date at reduced prices nationwide, in a bid to help citizens weather the current economic hardships, Ahram Online reported. The plan is to distribute eight mn food boxes at “half the market price,” spokesperson Brigadier General Mohamed Samir said in a statement. The boxes will be sold for EGP 25 and will contain rations of sugar, rice, beans, margarine, tea, and tomato sauce, the statement noted. Meanwhile, the Supply Ministry has raised the price of sugar for ration card holders to EGP 7 per kg, up from EGP 5 per kg, Al Shorouk notes. This is the second time the ministry has raised sugar prices for ration card holders in recent weeks. The move comes as part of the state’s bid to end what it contends is an artificial shortage of the sweet stuff.

Italy’s Deputy Chief Prosecutor, Sergio Colaiocco, arrived in Egypt to the investigation into the murder of Giulio Regeni. Colaiocco is set to meet with Prosecutor General Nabil Sadek and other senior officials, sources told Reuters. Sadek approved handing over Regeni’s personal effects and documents, which are reportedly no longer necessary to Egyptian investigators, Al Mal notes. Sadek is also scheduled to visit Rome in December to further discuss developments in the case with Colaiocco. Italy’s Foreign Minister Paolo Gentiloni had stated last week that Regeni’s case is an “open wound” for Italy, one of Egypt’s most important trade partners.

Western failure to restrain violent Islamists in Syria is indefinitely delaying the resumption of peace talks, Russia’s Defense Minister Sergei Shoigu told Reuters. Rebels backed by Western governments attacked civilians in Aleppo despite Russia and Syria pausing airstrikes since 18 October, said Shoigu. Moscow has denied allegations that the airstrikes were killing civilians in large numbers. Russian President Vladimir Putin previously said the continuation of the pause depended on the behavior of moderate rebel groups in Aleppo and their Western backers. "It is time for our Western colleagues to determine who they are fighting against: terrorists or Russia … Maybe they have forgotten at whose hands innocent people died in Belgium, in France, in Egypt and elsewhere?" Shoigu said.

International news worth noting this morning:

  • Tensions cooling in Morocco? Moroccan authorities have charged 11 men in connection with death of fish seller Mohsin Fikry, who was crushed to death in a garbage compactor while trying to save some 500 kg of inventory that police had confiscated. His death has set of days of protests that have been among the largest in Morocco since 2011.
  • Politico looks at the mad scramble that is the last week of the US election campaign. Their takeaway: Trump is claiming momentum, but Clinton’s still going to be awfully difficult to beat in the electoral college.
  • Celebrities apparently love to Instagram their Halloween costumes, the New York Times tells us, running shots of folks ranging from Katy Perry to Marc Jacobs and some Kardashian or another. It’s one of the most-clicked stories on the Times day…


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Egypt in the News

On a very quiet news morning for Egypt dominated largely by pickups of the Associated Press’ report on the Nile turning muddy, relations between Egypt and Saudi Arabia are squarely in the spotlight.

The New York Times’ Nour Youssef and Diaa Hadid are saying that Egypt is “jousting” with Saudi Arabia as “the fraying of the alliance between the two most influential Sunni nations is unfolding amid increasing sectarianism across the region. And the potential loss of Saudi support could hardly come at a worse moment for Egypt.” The International Crisis Group’s North Africa project director Issandr El Amrani describes, rather glibly, the relationship as one “based on a kind of asymmetric passive-aggressive perpetual renegotiation. What Egypt is saying, in effect, is: ‘I am an unreliable, disrespectful client that openly takes you for granted and jibes against you at every possible turn, but I know you will eventually come back to me because you are more afraid of my weakness and nuisance capacity than of my potential strength. So when is that next check coming?’”

…Meanwhile, Mada Masr’s Omar Said attempted to retrace how we got to this point. He links it to disagreements over involvement in Syria and Yemen, with Egypt agreeing to training Iraqi security forces in Egypt, meeting with Iranian officials, and the failed attempts to form a joint Arab military force in 2015, amongst a number of issues. Said quotes a number of source who, while they agree there is a rift currently, do not see the situation as having reached “crisis” levels.

Elsewhere this morning: Media in Singapore are eating up news of Pacific International Lines (PIL)’s opening of a 20,000 square meter inland logistics facility in Cairo. The story gets a sentence in a Wall Street Journal roundup of logistics news, too.

On Deadline

Former Deputy Prime Minister and Al Shorouk columnist Ziad Bahaa Eldin wants to drag Egypt’s laws into the 21st century. He says the state doesn’t need to amend the protest law, it needs to fundamentally change how it views the rights to protest and freedom of expression. The law itself was redundant, he says, as the criminal law already carried enough provisions to punish incidents of violence and vandalism. The protest law effectively only outlawed peaceful protests and made them punishable by a five-year sentence. Other freedom-restricting laws including the offences of “contempt of religion” and “spreading rumors to damage the economy” must be addressed as well, Bahaa Eldin says.

To El Watan’s Emad El Din Adib, the resignation of former Secretary General of the Organization for Islamic Cooperation Iyad Ameen Madani was Saudi Arabia’s way of apologizing for Madani making fun of President El Sisi.

Worth Reading

The next US administration should make effort to continue the bilateral economic aid programs to Egypt, argues POMED’s Deputy Director for Research, Amy Hawthorne, in a new report (pdf). The report, however, suggests that “significant changes are needed to enable the assistance to achieve its objectives” as it criticizes how the aid packages are delivered and to which projects they are directed. Hawthorne suggests that the funding should be, instead, directed more towards practical programs and away from government initiatives and particularly highlights the need for the changes to include:

  • Simplifying the program by focusing on a few practical initiatives, such as scholarships and job-creation through new businesses, that would benefit ordinary Egyptian citizens, and play to American strengths.
  • Discontinuing ineffective efforts to use aid to encourage the government to undertake economic and democratic reforms.
  • Ending democracy assistance as part of the bilateral program and instead supporting “genuine, independent pro-democracy organizations and individuals through more arms-length funding, and through high-level diplomatic advocacy for human rights and democratic values.”
  • Improving public diplomacy efforts to provide more information about U.S. assistance to the Egyptian public.

Image of the Day

The Nile turned a coffee-colour in Cairo yesterday, and people freaked out. Flash floods in Upper Egypt brought sediment and silt downstream, resulting in the less-than-appealing colour. Given the sediment, a number of water treatment plants in Giza, Sohag, Fayoum, Beni Suef, and Qena have halted operations, Al Masry Al Youm reported. (Photo credit: Amr Nabil, AP; tap image or here for the AP’s coverage)

Worth Watching

Noble citizens of Ras Gharib run Reham Saeed out of town: They used to say that you smell sulfur when the devil comes. And to the people of Ras Gharib already suffering from the aftermath of flash floods, the last thing they needed was their olfactory senses tainted by Al Nahar talk show host and convicted shamer of victims Reham Saeed. So, naturally, the media’s Frankenstein’s monster was treated just like that creature of fiction by a mob of residents who protested her presence and ran her out of town (runtime: 3:10). We’d shed a farke tear for her, but she does the job well enough herself.

Diplomacy + Foreign Trade

International Cooperation Minister Sahar Nasr held talks on economic and social cooperation with Slovenian ambassador to Egypt Tatjana Miškova to prepare for Slovenian President Borut Pahor’s planned visit in December, Al Mal reported. The first session of the Joint Committee between Egypt and Slovenia is due to be held in Cairo in the first quarter of 2017 on tourism, air transport, fighting drug smuggling and illegal immigration.

Singaporean President Tony Tan met sat down with Prime Minister Sherif Ismail to discuss expanding cooperation and investments between the two countries, Al Ahram reports. The delegation from Singapore was given a brief on changes to Egypt’s investment policies and on the new Investment Law by Investment Minister Dalia Khorshid, according to Al Borsa.

Egypt will host a conference of 24 business associations from countries that are members of China’s “One Belt, One Road" global economic and trade initiative in April, said Mohamed Youssef, head of the Egyptian Businessmen’s Association, according to Al Mal.

International Cooperation Minister Sahar Nasr will visit Tunisia 10-11 November for preparatory meetings of the Egyptian-Tunisian ministerial summit which will be held in Egypt early next year, Ahram Gate reports.

A delegation from Russia’s Federal Service for Veterinary and Phytosanitary Surveillance arrived yesterday for a three-day visit to assess whether Egyptian authorities are complying with Russia’s quality standards on Egypt’s imports, head of the Russian trade mission in Egypt Lukashin Fedor Aleksandrovich said. The visits are a followup to the agreements which ended Russia’s brief ban on imports of Egyptian agricultural products.

In related news: Russian imports of fruit and vegetables from Egypt grew to 362.5k tonnes in 1H2016 from 310.5k tonnes in 1H2015, according to a report by Fresh Plaza. The majority of the imports were oranges at 250.3k tonnes followed by onions at 79.5k tonnes. Other imports included mandarins, grapes, lemons, tomatoes, and garlic.


Siemens’ three power plants operational by December

Siemens will complete trial runs at the combined cycle power plants in Burullus, Beni Suef, and the new capital by the end of this month and early next month, Al Borsa reports. The plants are expected to be operational and generating 4.3 GW of electricity by the end of December.


New Administrative Capital Airport completed

Hassan Allam and the Arab Contractors have completed building the Kattameya International Airport, Al Mal reported. The Airport is meant to serve the Administrative Capital and new development in the area, and will be officially inaugurated within a few weeks. The Airport’s airfield and passenger terminals are built with future upgrades and expansions in mind, said project consultant Tharwat Abdel Fattah. The project was completed in 12 months, a year ahead of schedule, said Hassan Allam project manager Hazem Samy. For now, it appears that the airport will be called Katameya International.

World Bank delegation visiting Egypt to inspect projects

A World Bank independent delegation is in Egypt on a ten-day visit to discuss potential projects in the water and wastewater sectors and future strategies, as well as to evaluate the projects the bank is currently financing, Al Borsa reported. The bank had previously allocated USD 550 mn towards the first phase of a project that extends sewage infrastructure to 155 rural villages in three governorates.

Additional EGP 2.2 bn dedicated to flood and drainage infrastructure

The Ismail cabinet has announced that a further EGP 2.2 bn will be directed towards flood and drainage infrastructure during the “coming years” after flash floods in Ras Gharib killed 26 people last weekend, Al Borsa notes. The Irrigation Ministry is currently studying allocation of the funding. As we reported earlier this week, the government had budgeted EGP 4 bn for a 2014 plan to improve sewer systems, while the Tahya Misr Fund has put up EGP 1 bn towards similar projects.

Basic Materials + Commodities

ECA refers two fertilizer producers to prosecution, refuses settlement

The Egyptian Competition Authority (ECA) has asked prosecutors to open investigations into two fertilizer producers — Abu Zaabal Company for Fertilizers and the Egyptian Financial and Industrial Company (EFIC). The ECA’s bid to reach a settlement with the two companies failed, Al Mal says. The ECA had said in late August that the two had colluded to fix selling prices domestically and also limited distribution nationwide to preserve their respective market shares, preventing production-driven price decreases from reaching the consumer. Earlier in October, the ECA had also refused requests for a settlement to close the cases of 24 distributors of superphosphate fertilisers and referred them to prosecution.

Centamin completes Sukari cost recovery phase, begins profit sharing

Centamin announced it has completed recovering over USD 1 bn of its capital costs on the Sukari gold mine, and began implementing the profit sharing phase of the agreement with the Egyptian government as of October 2016, Al Masry Al Youm reported. The cost recovery was completed ahead of schedule, the company said.

Raya acquiring EGP 150 mn food industries factory

Raya Holding has nearly completed the due diligence on a food factory in Sadat City, Chairman Medhat Khalil tells Al Mal. Khalil estimates that EGP 150 mn will be invested to acquire the factory but that the funds also include the cost of expansions to boost exports in the coming period, he added. Raya’s current strategy targets exporting industries to overcome the foreign currency shortage, said Khalil.


Petrochemicals Holding studying USD 140 mn fertilizer plant

The Egyptian Petrochemicals Holding Company start technical and financial studies for an ammonium sulfate-based fertilizer manufacturing plant with USD 140 mn investments in Alexandria, company chairman Mohamed Saafan said, Al Borsa reported. The factory is expected to begin operations 30 months after the construction operations are completed, he said. The financing will be sourced from local banks or international financial institutions, he added.

Health + Education

Pharma companies say they will press for moving prices after devaluation

Pharma companies will further press their demands that prices of meds be allowed to move, following the devaluation, said Osama Rostom, member of the pharma division of the Federation of Egyptian Industries. Manufacturers have been threatening to cut production if the government doesn’t move prices on meds priced over EGP 30, with confirmed reports emerging that they have followed through on that threat and cut production by 50%.

Real Estate + Housing

Capital Group Properties pays USD 100 mn of infrastructure cost at Al Burouj project

Capital Group Properties have paid USD 100 mn of the USD 250 mn total cost of infrastructure at its development project Al Burouj, CEO for Projects Amgad Hassanein told Al Mal. The rest of the cost will be paid in EGP and USD within two years, he added. The Al Burouj project is located between the Cairo-Suez and Cairo-Ismailia desert roads over an area of 1212 feddans and at a total investment cost of EGP 40 bn.

Winvest Capital investing EGP 550 mn into two tourism projects

Winvest Capital are investing EGP 550 mn into two projects in the North Coast and Alexandria, Al Mal reported. The projects are financed internally and through downpayments, said Chairman Eslam Reda. The projects include a combined 1,100 residential homes and are expected to be completed by 2018, he added.


Grand Egyptian Museum concrete to be completed by year-end

Concrete work for the Grand Egyptian Museum (GEM) will be completed in the next two months, general supervisor Tarek Tawfik said in a report picked up by Al Shorouk. The work is 80% done, he said. Out of 5,000 pieces of the Tutankhamun collection set to be moved from the Egyptian Museum in Tahrir, 3,000 have already been transported to the GEM. An Antiquities Ministry-affiliated general authority for the GEM, which might partially open mid-2017, will be launched, and a board of trustees formed by the cabinet, according to a decision by Prime Minister Sherif Ismail this week. Looks like the government backed away from having an international board of trustees govern the museum, as previously planned.

Telecoms + ICT

Vodafone makes decision on international gateway license in two months -CEO

Vodafone Egypt will decide within two months whether it’s bidding for an international gateway license, CEO Stefano Gastaut told a press conference, Al Mal reported. The NTRA gave the Vodafone and Orange six months to sign the agreement at a cost of EGP 1.8 bn each, to be paid for in USD, from the date of acquiring the 4G license. Vodafone also said it is currently testing the 4G system and will launch it to the public “soon,” denying that the limited spectrum it acquired would affect 4G services it is preparing to provide, he told Al Mal. Gastaut says the company has overcome FX issues hindering its ability to conduct maintenance and import equipment by resorting to the parent company for provide USD, or complete transactions with Ericsson and Huawei, Al Mal added. The company will “soon” announce when 4G services will launch, Gastaut added, according to Al Shorouk.

Automotive + Transportation

Uber Egypt’s partner support centre hits milestone, becomes one of the most visited globally

Uber Egypt announced that its partner support center is officially one of the most visited centers globally. Whilst the center launched only four months ago in June 2016, Uber Egypt has set a new international benchmark by receiving more than 1,000 visits of current and prospective drivers per day. “Reaching this milestone of welcoming, training, and assisting an average of 6,500 drivers per week in only a four-month time frame proves that Egypt is truly one of the fastest growing markets in the region,” Uber Egypt General Manager Anthony Khoury said.

Banking + Finance

Emirates NBD establishes SMEs funding unit

Emirates NBD Egypt launched a funding unit for SMEs, according to a statement by the bank reported. The unit will “help to complete funding procedures easily and as quickly as possible” and “[provide] advice and consultancies” to SMEs, head of Retail Banking and Wealth Management Frederic de Melker said. The bank is targeting increasing the proportion of SMEs to 10% of its total portfolio by end of 2017, and to 20% by end of 2019, head of SMEs Hany El Shamy said.

Other Business News of Note

Court adjourns Diocese of Egypt legal recognition case

An Egyptian court has postponed a hearing to determine if the Anglican Diocese of Egypt with North Africa and the Horn of Africa can regain its independence, Anglican News reported. The hearing was the first stage of a legal claim to overturn a previous ruling which considers the diocese legally a part of the Evangelical Church Association. A lawyer from the ECA was present at the hearing and asked the judge to refuse the request, said Archbishop Mouneer Anis, claiming this “is proof enough that it is they [ECA], rather than the government, who want us to be under them.”

Egypt Politics + Economics

Suez Canal Authority expects 2016 revenues climb to USD 5.7 bn

The Suez Canal Authority expects 2016 revenues to climb to USD 5.7 bn after the waterway’s expansions, Authority executive Tamer Hammad told Reuters’ Arabic service at a maritime conference in Dubai. The figure would be an increase from the 2015 one that registered USD 5.175 bn, he added.

Baradei publishes statement on the events of 30 June

Mohamed El Baradei is at it again, has publishing a lengthy statement on his Facebook page dismissing false media reports that he had at one time supported the clearing of Raba’a.

National Security

Egypt, Jordan to conduct military training

Egypt and Jordan will reportedly conduct a joint military drill at the Jordan Armed Forces / Arab Army “military fields” from Saturday, 5 November till Friday, 25 November, Jordan’s Petra News Agency reported. Elite units from both armies are set to join the exercises, dubbed Aqaba 2016.


Ghana’s football coach reportedly threatened in Egypt, EFA takes action

Ghana’s national football team’s Israeli coach Avram Grant has reportedly been threatened by a group that plans to “harass and heckle” him from “the moment he arrives until the moment he leaves” Egypt, JPost says. The Egyptian Football Association is said to have upped security prior to the FIFA World Cup qualifier match between Egypt and Ghana on 13 November. Haaretz says Egypt has already thwarted the planned attacks against Grant by detaining the suspects and issuing a warning.

On Your Way Out

A Cairene’s search for the Middle East in Berlin: “In Berlin one can find traces of almost any culture in the world. Unprepared for the magnitude of diversity this one city had to offer, my time in Berlin forced me to question everything around me. Part of myself just couldn’t find a way to belong,” Nourhan Khalid writes in Jadaliyya showcasing her photography project “Cairo in Berlin.” In it, she presents collection of photographs observing Middle Eastern and Arab traces in the German capital. Khalid says “walking past these scenes, I was torn by the nostalgic feeling I had for a home to which I did not want to return.”

The markets yesterday

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USD CBE auction (Tuesday, 01 Nov): 8.78 (unchanged since 16 March 2016)
USD parallel market (Tuesday, 01 Nov): 17.50-17.70, Al Mal (from 18.20 on Monday morning, 31 Oct, Al Mal)

EGX30 (Tuesday): 8,447.76 (+0.74%)
Turnover: EGP 690.77 mn (67% above the 90-day average)
EGX 30 year-to-date: +20.57%

THE MARKET ON TUESDAY: EGX30 ended Tuesday’s session 0.7% up. Yesterday’s top gainers included Edita, Qalaa Holdings, and Porto Group. On the flip side, today’s worst performers were Telecom Egypt, Egypt Kuwait Holding, and Elsewedy Electric. At a market turnover of EGP 690.8 mn, local investors were the sole net buyers.

Foreigners: Net short | EGP -47.8 mn
Regional: Net short | EGP -10.7 mn
Domestic: Net long | EGP +58.5 mn

Retail: 58.9% of total trades | 59.1% of buyers | 58.6% of sellers
Institutions: 41.1% of total trades | 40.9% of buyers | 41.4% of sellers

Foreign: 18.5% of total | 15.2% of buyers | 21.7% of sellers
Regional: 7.5% of total | 6.8% of buyers | 8.3% of sellers
Domestic: 74.0% of total | 78.0% of buyers | 70.0% of sellers


Buy EFG Hermes GDRs

When CIB’s GDR window was open, high investor demand on local shares to transfer into the GDR as a profit repatriation mechanism lifted local share price and pressured GDR price. While the GDR window was open, it failed to mirror the solid performance witnessed by the local share. Once the GDR window closed, the stock re-rated massively. We believe that the same will happen with EFG Hermes GDR within a month or less, depending on when devaluation would happen and / or restrictions on repatriation of profits ease, or the GDR conversion limit is reached. Tap here for the full note.


WTI: USD 46.29 (-0.81%)
Brent: USD 47.83 (-0.64%)
Natural Gas (Nymex, futures prices) USD 2.84 MMBtu, (-2.03%, December contract)
Gold: USD 1,291.20 / troy ounce (+0.25%)<br
TASI: 5,997.0 (-0.3%) (YTD: -13.2%)
ADX: 4,307.4 (+0.2%) (YTD: 0.0%)
DFM: 3,322.5 (-0.3%) (YTD: +5.4%)
KSE Weighted Index: 354.7 (+0.2%) (YTD: -7.1%)
QE: 10,201.9 (+0.3%) (YTD: -2.2%)
MSM: 5,477.7 (-0.1%) (YTD: +1.3%)
BB: 1,149.1 (0.0%) (YTD: -5.5%)

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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.

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