The second (business) day of our new reality

** DID YOU MISS OUR SPECIAL ISSUE on the float of the EGP and the raising of petroleum prices? We scrapped our usual Weekend Edition to carry a special issue (the most-opened thing we’ve ever written for dispatch on a weekend) wrapping everything that happened on Thursday. If you missed it, check your inbox or tap here to read it on our website.

PETROLEUM SUBSIDIES JUST WENT UP. Two of the smartest big-company CEOs we know wrote in response to Friday’s special edition to point out the obvious: Fuel prices at the pump are up — but so, too, is the government’s subsidy spending. We’re embarrassed because they’re right, and we really should have caught that ourselves. We’re reproducing snippets of our conversations here with their permission:

Writes CEO #1: “I think it’s important to make your readers aware that, yes, energy prices increased by 30% on average while the currency devalued by about 60% — which means that the government just INCREASED subsidies on energy.”

CEO #2 added a couple of hours later: “You state that Egypt had cut fuel subsidies. That’s an inaccurate statement in my view, even though it’s being repeated by various news outlets. While EGPC did indeed increase fuel prices last night, the hike should have matched the rate of devaluation (i.e. 80%+) for subsidies to be maintained at the current level, let alone to cut them. The fact that the fuel price increases were only c. 30% actually means that technically, fuel subsidies in both relative and absolute terms have now actually grown, at least for the moment.”

The point both CEOs made on fuel subsidies was later touched upon by Finance Minister Amr El-Garhy and Oil Minister Tarek El-Molla at the cabinet economic group’s Friday press conference.

CEO #1 continues: “Another point is that raising interest rates has nothing to do with the transmission of monetary policy to people inside Egypt, but the transmission of monetary policy to people outside Egypt. It makes Egyptian government bonds in EGP more attractive to foreign institutional investors (the infamous carry trade).

“The logic is that the current account cannot improve quickly, because it takes time to increase exports. You have to restart factories, sign contracts in foreign markets, procure raw materials for those foreign markets, etc. So in the medium term, until export market opportunities are being developed, you have to plug the currency or balance of trade gap by activating the carry trade, there’s no other way.

“Also we still do have at least another two years of inflation above 10%, because you still have to raise / liberalize energy and food prices gradually, which will be an additional driver of EGP inflation for at least two more years, not to mention the upward adjustments in wages, which always lag inflation rates. Also the market was expecting a devaluation and a managed peg not a free float. The move to a free float is a good thing: Successive Egyptian governments have shown that they will not take these difficult decisions willingly and only when there is no other option will reform be made. The Ismail cabinet also deserves credit for the timing: Doing it before 11/11 requires guts.”

We agree: At the risk of coming across as a cheerleaders, we think this is one of those moments when business has to recognize that the government did the right thing — and we need to back it. The float of the EGP will be painful and will come with social challenges, but it is inarguably the right thing to have done. So, too, the fuel price hike, which we would hope is just the first of a two-round increase.

We as a community need to signal (very clearly) that the government has our confidence and our backing — at least when it comes to the reforms of Thursday. Many among us have legitimate concerns about other issues, from the crowding-out of the private sector to the need to switch to cash-transfers for the needy instead of commodity subsidies. Fine. But we need to keep in mind that worrying about this stuff without a float was akin to worrying that a patient has a slow-growing cancer when s/he is bleeding out after a catastrophic accident.

The next two years are going to be tough sledding. The decade after that could be amazing — if we get the interim right. And part of getting it right will be for us to back the government on the one issue on which we clearly have a meeting of the minds — as one of our CEOs said, doing so will “embolden them in their decision making later on” — even as we spar over other aspects of economic and social policy.

CIB has adjusted its restrictions on the use of its credit and debit cards outside of Egypt to reflect the float of the EGP on Thursday. By our math the bank has raised the limits by almost 3x in USD terms for Platinum card holders. Whether we’re able to do math or not, you can catch the full schedule of limits at CIB here (in pdf). Also raising caps this morning: Banque Misr and the United Bank,

** Where’s the EGP this morning? The EGP was changing hands for 15.10-16.50 to the greenback yesterday depending on where you bank, Al Borsa reports. That compares to Thursday night’s close of EGP 15.75-16.00.

Now, with the two CEOs’ point that the state’s fuel subsidy bill has actually risen still in mind, we need to remind ourselves: It’s 6 November. Has there been any sign of November cargoes from Saudi Aramco?

Also on our radar this morning: Tourism Minister Yehia Rashed leaves Cairo today to attend the World Travel Market in London, heading an Egyptian delegation of over 44 Egyptian tourism companies and hotels, which runs tomorrow through Wednesday, Al Shorouk notes. WTM is arguably the most important trade fair in the tourism industry, and we need tourism back like never before. Egypt effectively just became a “half-price” destination for global tourists, which should go a long way toward removing concerns about security — if we can convince certain governments to resume direct flights.

The Suez Canal Authority is expecting a decision this week from the three major shipping lines, Maersk, MCS, and CMA, on paying fees in advance in exchange for discounts, Reuters reports.

Oh, and it’s election week in America. Voters head to the polls on Tuesday. Politico seems to get it right this morning: To win, Trump will have to do a heck of a lot right in the next few days. And to lose, Hillary will have to do a lot wrong. Trump has “three narrow paths” that could lead him to victory on Tuesday. The Republican candidate was briefly whisked off-stage by Secret Service agents a few hours back at a rally in Nevada before returning to finish his remarks.

Volatility on the FX market is only natural following the momentous decision to float the EGP as you are effectively changing an entire monetary system for the first time, said Hisham Ezz Al Arab, chairman of CIB, in a call-in to Lamees El Hadidy’s “Hona El Assema.” Ezz Al Arab expects this volatility to ease over the coming three months. He was also Amr Adib’s in-studio guest on ONTV (watch part 1 or part 2)

The float and raising prices are coming late and should have come 20 years ago, Naguib Sawiris said in a call-in to Mehwar TV’s “90 Minutes” talk show (watch, runtime: 8:52). He blamed the delay on the government’s fear of popular opinion — and went on to attack the subsidies program. Naguib again urged the government to move to a cash-based subsidy system, calling on the government to look to Brazil, where the policy worked.

The road show for the USD 3 bn eurobond issue will begin on 20 November, with the issue expected around ten days later, announced Finance Minister Amr El Garhy in a call-in to Lamees (watch, runtime: 11:08). When pressed about whether the budget deficit will grow as a result of float of the EGP, El Garhy responded that the bigger worry was what would have happened if the decision had not been taken. El Garhy was asked by Ali Eissa, head of the Egyptian Businessmen’s Association, who joined Lamees in studio last night, whether there was any progress on moving to conditional cash payments to the needy instead of providing subsidized commodities. El Garhy noted that this would depend on building the national database, which is already seeing significant progress.

The government is mulling implementing a progressive tax, but the measure remains on the drawing board, not an imminent legislative reality, El Garhy stated in a separate call-in to Sada El Balad’s “Ala Mas’uleety” with the Creature Who Will Not Be Named lest it emerges behind us (watch, runtime: 10:14). The minister denied rumors that the government was actively drafting a new law to impose the tax. Prime Minister Sherif Ismail confirmed as much at Friday’s press conference, Al Borsa reports. El Garhy also announced that Suez Canal Bonds will also see an increase in accordance with the 300 bps increase in interest rates, and that these new rates will be announced today.

Back on CBC, Lamees also hosted members of the Federation of Egyptian Industries (FEI), who announced a CSR initiative to increase the salaries of workers earning EGP 1,000-1,500 per month by 5-10%. While the FEI’s initiative is voluntary, members of the House of Representatives, who appear to have missed the government announcing that the budget for wages has increased to EGP 230 bn, is already making calls to raise the minimum wage 10%, Al Ahram reports.

You can watch last night’s full Hona El Assema episode here (runtime: 3:20:00; Ezz El Arab’s segment begins at 43:20; FEI’s wages initiative begins at 1:29:33)

CABINET MEETS THE PRESS to discuss float of EGP, raising of fuel prices: Fresh off its decision to free float the currency, raise interest rates and hike the price of fuel at the pumps, the Ismail cabinet’s economic group gave a full policy review at an extended press conference on Friday. Priorities going forward include improving the state’s fiscal position, improving the investment climate, strengthening the social safety net and pressing ahead with national projects.

Prime Minister Sherif Ismail also outlined a number of decisions made late last week to help cushion the inflationary impact of the float and petroleum price hikes. These include:

• Launching an extended campaign to monitor prices and markets nationwide, with Egypt’s governors taking the lead;
• President Abdel Fattah El Sisi’s recent signing into law of the Civil Service Act will see bureaucrats receiving their 7% annual raise, which will be applied retroactively this year at a cost to the state of EGP 3.5 bn;
• Raising the price at which the state buys staple crops from farmers. Wheat was raised to EGP 450 per ardib from EGP 420; rice to EGP 3,000 from EGP 2,300 per tonne; corn prices rose to EGP 2,500 per tonne from EGP 2,100; while sugar cane prices rose to EGP 500 from EGP 400.
• Ismail also said that Cairo Metro prices are unsustainable, though the PM did not state what the government plans to do about it. As we noted last month, the cabinet had tabled the decision to move prices until 2017.

Ismail also raised Egypt’s growth forecast to 6% for both the current 2016-17 fiscal year and for next year and reiterated that Egypt has met all of Russia’s conditions for the resumption of direct flights.

Next up was Finance Minister Amr El Garhy, who gave an explainer as to why a free float of the EGP and the raising of fuel prices were necessary. On the latter, El Garhy stated that raising fuel prices does not mean that subsidies were cut. This is merely a move to ease pressure on the EGPC and EGAS who import fuel as a result of the devaluation. El Garhy stressed that we cannot keep relying on GCC partners to keep bailing us out. Egypt is targeting a 6% annual growth rate for a number of years in order to create new jobs, he said, echoing the prime minister. Anything less would mean that the economic policies are not working.

El Garhy’s point on fuel prices and the ballooning subsidy budget was echoed by Oil Minister Tarek El Molla. El Molla pointed out that while the government will continue to maintain fuel subsidies for lower income households, those subsidies will increasingly be channelled through the Social Solidarity Ministry. While no details were presented on what this will mean for fuel at gas pumps, Social Solidarity Minister Ghada Waly did state that her ministry will bear more of the fiscal burden of connecting homes with natural gas. This policy was being presented as part of the mission to make subsidies more efficient and targeted to those who need them. Fuel smart cards are not dead, but more vehicles need to be registered into the system, a process El Molla believes will take until the end of this year. A decision on when it will be implemented will come next year.

His statements came as sources from the Oil Ministry expect the fuel subsidies budget for this year to almost double to EGP 65 bn from EGP 35 bn as a result of the float of the EGP, AMAY reports. The initial budget had been pegged to oil prices remaining at USD 40 per barrel. Prices have been approaching USD 50 of late, which is exacerbating the expense of subsidies.

The private sector will be a leading partner in ensuring basic commodities flow into the marketplace — and will see restrictions on imports ease, said Supply Minister Mohamed Ali El Sheikh.This could include lower customs rates for sugar imports, the minister suggested. That, coupled with the float of the EGP, means companies no longer have an excuse to reduce imports or production. Speaking on the impounding of sugar from factories and warehouses, El Sheikh said that the campaign was “fruitful.” Officials took into consideration the needs of companies that did not violate the law and which, as a result, saw their inventory restored (as was the case with Edita). The government will maintain subsidies on key commodities regardless of the FX rate, assured El Sheikh. Ration cards will see an increase to EGP 21 per month from EGP 18. Raising the purchasing prices of domestically harvested goods will cost the state EGP 5 bn, raising the commodities subsidies budget to c. EGP 49-50 bn.

The Investment Ministry is targeting foreign direct investment of USD 10-15 bn and expects inflows of foreign portfolio investment of some USD 5-10 bn, said minister Dalia Khorshid without specifying a timeframe for that investment. The ministry is also wants to raise Egypt’s ranking in the Doing Business report to 90 from a current 122. It plans to accomplish this in part through the 17 tax and nontax incentives decided on by the Supreme Investment Council last week.

Industry and Trade Minister Tarek Kabil rehashed his existing policies designed to raise manufacturing’s contribution to GDP to 21%. These include new legislation such as the Industrial Permits Act, increasing the amount of land allocated and readied for industry to 10 mn sqm in 2017, and relying on industrial complexes such as the Furniture City. On the trade side, the ministry will continue with policies that will curb imports.

The budget for pensions has been raised to EGP 15 bn, a four-fold increase over last year, said Social Solidarity Minister Ghada Waly. Retirement benefits under the Karama program will now be extended to retirees aged 60 and up from a previous age of 65. The ministry plans to increase beneficiaries of both Takaful and Karama to 1.7 mn families by next year at a cost to the state of EGP 2.5 bn. Waly added that since 1 November, her ministry has increased funding for the meals for schools program to cover all school days for public school students, whereas only half of all school days were covered previously. On a related note, Assistant Social Solidarity Minister Nivine El Qabbaj stated that the World Bank is expected to release the USD 90 mn third tranche for funding the Karama and Takaful programs by the end of the month, Al Mal reports.

You can watch the press conference in full here(runtime: 1:29:04)

The World Bank welcomed the float of the EGP in a press release on Friday that also praised measures to promote investment (especially in Upper Egypt), adjusting energy prices to reflect market conditions, and strengthening the social safety net. These reforms would “would boost the competitiveness of Egyptian businesses, support export growth, attract new foreign investment, free public resources for priority growth and social programs, and support incomes for the poor and the vulnerable.”

US Secretary of State John Kerry also reportedly said nice things about the reforms, saying in a brief statement: “The Egyptian government took important steps this week as part of its ongoing economic reform program. Liberalizing its foreign exchange system and reducing costly fuel subsidies demonstrates a determination to put the country on the path to economic recovery. The task before them is a challenging one, but ‎it is encouraging that Egyptian leaders are making the difficult decisions needed to move their country towards prosperity.” Sec. Kerry’s remarks are being blasted to the masses by Al Ahram.

Customs duties on imported passenger cars have increased to 66% from 52% following the decision to float the EGP, as customs are calculated in USD, Al Borsa reported. Automobile companies are currently re-pricing their vehicles following the decision. It would appear that on average, customs on all imported goods will see a 65% increase, senior source from the Customs Authority tells AMAY.

Business confidence slumped last month “at the strongest rate since July 2013,” according to the Emirates NBD / Marking purchasing managers’ index. The gauge hit a 39-month low of 42.0 as “according to anecdotal evidence, many of the issues facing companies stemmed from the weakness of the Egyptian pound relative to the USD. That drove costs up considerably, often making raw materials unaffordable and thus in short-supply. As a result, both output and purchasing activity fell sharply.” The full readout on the PMI results is here in pdf.

Sherif Ismail led a meeting of the Council of Governors on Saturday to discuss curbing inflation, regulating price increases in public transportation, and addressing the dangers of flash floods, Al Shorouk reported. Ismail asked the governors to do a better job of communicating the economic reform program at the governorate level and asked governors to figure out how to implement a 10-15% hike in public transport prices. Ismail also said his government had approved arranging for EGP 2.9 bn within two years to complete flash-flood projects.

No, Mr. Minister, the private sector was not responsible for the sugar crisis, according to the Egyptian Competition Authority: The ECA has published a report (pdf) on recent allegations of anti-competitive practices in the sugar market. Technically speaking, there is no single company or grouping that controls supply and demand or can stop competitors from entering the sugar market. The report concludes that there is more than one product available and the option to import is open as domestic production only covers 77% of demand.

While the ECA found the Sugar and Integrated Industries Company (SIIC) controls more than 25% of the market, it could not claim SIIC controlled the market as prices and distribution were determined to a great degree by the government. In the absence of evidence of monopolistic practices, the rising price of sugar can be attributed to a rise in the cost of imports driven by the FX crisis, high parallel-market FX rates, CBE restrictions on banking facilities for importers, and a rise of 42-50% in global sugar prices. As the government purchases domestically produced sugar and distributes it to supply outlets and complexes through a long chain, “opportunists” have stored sugar to sell at prices higher than official rates.

In other industry news, the Damietta Port has begun transporting sugar using railroads and river barges, Ahram Gate reported.

Arab Angel Fund hits USD 10 mn first close on USD 25 mn fund. The funds were committed by “strategic limited partners in the MENA region and the GCC” including “individuals from private family offices, chairmen and board level members of notable companies, sovereign investment vehicles, and various public and private executives across various sectors.” AAF GP and managing director Kyle Hendrick billed the fund as a “new asset class for MENA and GCC investors … provid[ing] our LPs with unprecedented access to VC backed entrepreneurs and their startups in North America. We are excited at the growth prospects of our existing portfolio companies and look forward to helping them scale in the GCC and MENA region as part of their international expansion strategy.” Adds Omar Darwazah, a fixture of the regional IR scene and general partner at AAF: “We look forward to continue building a robust investment highway between the venture community in North America and the GCC and MENA regions.” The fund is aiming for a September 2017 final close. The full press release is here (pdf) and you can view Arab Angel’s current portfolio here.

“We are working with Egypt to resume flights to Sharm El Sheikh as soon as possible,” UK Parliamentary Under Secretary of State for Transport Tariq Ahmad told the House of Lords, according to Al Shorouk. Ahmad said the UK has the right to wait on official reports before resuming flights, but remains the country supporting Egypt the most to better airport security. Head of the British Egyptian Society Elizabeth Symons reiterated the importance of guaranteeing the safety of UK passengers, but stressed the adverse effect on the Egyptian tourism industry.

The float of the EGP and the raising of fuel prices is far and away the dominant story on Egypt this morning. Most are playing the story neutrally — even the New York Times editorial board struggles to muster its usual outrage, as the appended clause to the headline over its editorial indicates: “Egypt Averts Economic Collapse, for Now.” We regularly take flack from some readers for our love of the Gray Lady, so at the risk of being apologists for the newspaper, it’s heartening to note that the editorial board’s customary snideness is limited to the hed and a de-rigeur swipe at President Abdel Fattah El Sisi; otherwise, the piece gets lots right.

If you read only two stories in the international press about the float, make it these:

“What Not to Do When Floating a Currency: Lessons for Egypt” (Bloomberg): “If the experience of countries like Russia, Kazakhstan and Argentina is anything to go by, the initial pain will be worth it in about a year’s time, according to David Hauner, a strategist at Bank of America Corp.” The story includes talking-head commentary and then a rundown of how floats have gone in Russia, Kazakhstan, Argentina, Azerbaijan, and Nigeria.

“Hungry for USD after float, Egyptian banks offer market rates” (Reuters): “‘We bought USD from the banking system at rates between 14.7 and 16 so it’s already working … We closed the [transaction for over USD 1 mn] and got some of it on Thursday and the rest we are getting on Sunday,’ said one commodity trader ‘I hope the black market disappears. There’s no reason for it to continue now banks are buying at equilibrium prices.’”

It’s time for another revolution, this one in how we approach job creation: Our friend Ahmed El Alfy over at Flat6Labs makes an impassioned argument this morning that it’s time for governments in emerging markets and the development agencies who want to help them to radically change how they approach job creation. “Traditional employment-focused development programs, which usually rely on training and subsidies to encourage employers to expand their employment needs, tend to create old-economy jobs that are likely to become obsolete.”

Using the example of Wael Amin and ITWorx — Wael has since become Ahmed’s partner — Ahmed convincing shows how “equity-based funding in its traditional format is a cash flow-positive job-creation tool that generates sustainable long-term jobs in higher growth, profit-generating start-ups and new jobs in the new economy. … It is high time emerging-market policymakers and the leaders of international development organisations take note of what has already proven to be a winning formula for both creating meaningful and sustainable economic development in emerging economies, as well as addressing unemployment and redirect their funds to programs creating long term and sustainable impact. With its newly announced catalyst programme and its expansion of regional allocations to VCs, the IFC is one of the institutions adapting to the changes.” (Read the story in full)

We’re feeling the love for Omm El Donia this morning and so bring you this amazing tourism promotion video — the best we’ve seen in years. Let’s hope the khawaget like it as much as we do. (Watch, run time: 1:25)

Talks with US on Libya: Deputy Foreign Minister for Arab Affairs Tarek El-Kouni met with U.S. Special Envoy for Libya Jonathan Winer to discuss developments of the political solution in Libya, according to a ministry statement.

International Cooperation Minister Sahar Nasr discussed EUR 45 mn in Italian funding for SMEs with Acting Italian Ambassador Catani Stefano, the ministry said in a statement. They also discussed further cooperation in the Egyptian-Italian debt-swap program, where ongoing projects under its USD 100 mn second tranche “are being finalized.” Italian commodity exports, credit lines for SMEs and agricultural sustainable development were also tackled.

President Abdel-Fattah El-Sisi received an invitation to attend the 4th Africa-Arab Summit this month in Malabo, Equatorial Guinea, Al Masry Al Youm.

The Egyptian General Petroleum Corporation signed an MoU with the State Oil Company of Azerbaijan Republic (SOCAR) according to which SOCAR will supply Egypt with up to 2 mn barrels of crude oil for refining, in addition to cooperation in LNG, infrastructure, petrochemicals industry and swapping agreements of crude oil and petroleum products, Ahram Gate reported.

The Oil Ministry started negotiations with Iraq for crude oil shipments to be refined in Egypt for local consumption, with preferential payment terms. The agreement was originally signed in March, an oil industry source told Al Borsa. The EGPC launched a tender for petroleum products supply to satisfy local demand, the source said. This comes as there is still no word about whether or when Aramco will resume fuel shipments for November.

The UN’s Food and Agricultural Organization and the Egyptian Agriculture Ministry are working on projects to encourage farmers to grow more nutritious crops, Africa News reported. Fifteen schools were built in five governorates under the “Improving Household Food and Nutrition Security in Egypt by Targeting Women and Youth” project funded by the Italian Cooperation Development. The young farmers learn to grow vegetables and beans, instead of wheat, corn and barley, and to turn organic waste into fertilizers in order to reduce the environmental impact of burning it. The crops are then sent to the farmers’ wives who are “encouraged to optimise the nutritional content of the meals they cook for their families.”

An as-yet unnamed Saudi fund is reportedly looking to invest EGP 3 bn in developing a clinker factory and its accompanying power plant in partnership with one of six companies bidding on the eight the new cement license, Al Borsa reports. This mystery fund had apparently tapped Premiere Securities to act as financial advisor for the project, which has apparently garnered interest from numerous cement companies including Lafarge Egypt, said the firm’s managing director Ahmed Abdel Ghany. The fund is ready to transfer the first EGP 1 bn payment for the first phase of the project at the end of the month should an agreement is reached, claims Abdel Ghany in a statement clearly meant to entice potential partners.

Natural gas selling prices to industry sector increased by a rough 59% following the CBE’s decision to float the EGP, Al Borsa reported. Natural gas consumption contracts for factories are stated in USD, while factories pay for it in EGP. An unnamed industry source expects manufacturing companies will start requesting contracts be fixed in EGP and will raise prices to end consumers to cope with the increase.

LG Egypt has stopped selling to distributors in Egypt until it can come up with a new pricing strategy in view of the float of the EGP, Al Borsa reported. Part of the problem: The company is waiting clarity from the Tax Authority on a 5% tax on imports based on an FX rate of EGP 8.80 per USD. LG Egypt continues to export to regional markets.

Arab Contractors plans to complete construction on the KWD 304 mn (c. USD 1 bn) El Sheikh Gaber El Ahmed El Sabbah Hospital in Kuwait by year’s end, which upon completion, would be the largest hospital in the Middle East, according to Amwal Al Ghad. The project is being carried out over three phases on a 720k sqm, according to company chairman Mohammed Mohsen Salah El Din.

Etisalat has paid for the half of USD 535.5 mn 4G license fees that was to be paid in EGP, Al Mal reported. Orange and Vodafone already paid the EGP tranche. The deadline for settling the USD tranche is 14 November, NTRA Acting Executive President Mostafa Abdel Wahed said, according to Al Mal.

In other industry news, the National Telecom Regulatory Authority will apparently increase the price of international gateway licenses for Vodafone and Orange following the CBE’s decision to float the EGP, telecom sources told Al Mal. The NTRA had given the two MNOs six months to sign the intl gateway licenses from the date of their signing 4G licenses.

Orascom Hotels & Development (OHD) signed a debt refinancing package to postpone principal payments for the next three years and its FY16-17 interest payments, according to a regulatory filing EGX.

Islamist terrorists kill second general, target Morsi judge: Brig.-Gen. Hesham Mahmoud Abuala was killed in Sinai while traveling to Arish to visit a home he owns there, the Egyptian Army reports. Abuala was not stationed in Sinai; Daesh has claimed responsibility for the murder. Abuala was the second general to be killed by terrorists in as many weeks. The news comes as judge Ahmed Aboul Fotouh, who tried former president Mohamed Morsi in 2015, survived an assassination attempt on Friday in Nasr City, the Interior Ministry told Reuters. A parked car exploded as Aboul Fotouh’s car drove by, but no one was injured, the ministry added. The newly emerged Hasm group has claimed responsibility for the attack, as well as six others since July. The Interior Ministry said on Friday it had arrested members of Hasm and another militant group, along with weapons, explosives and evidence that the organisations had been set up by the Muslim Brotherhood.