Saudi Aramco cuts Egypt off

We have a bit of free association to get things started this morning, including a look at how the international press is positioning chances for unrest this coming Friday (the so-called 11/11 protests), expectations of inflation (the thing that’s got everyone on edge) and what might be a market-clearing rate (the thing that’s going to help pop that inflationary balloon before it gets too big).

Turnover on the EGX hit a five-year high of EGP 2.2 bn as the EGX30 closed up 5.4% yesterday. Interestingly enough, foreigners, regional investors and institutions were net buyers. International investors snapped up EGP 486 mn in shares while domestic investors were net sellers to the tune of EGP 502 mn. Enter a guest column by an FT-owned advisory outfit for the Financial Times’s EM Squared section, which notes that foreign investors need to “weigh attractive yields against the risk of social turmoil.” Egypt, it suggests, was in equal measures “brave” and “desperate” by floating the EGP and raising petroleum prices last week. “Certainly, the drop in the pound … should more or less kill off the parallel market, help revive imports and spur investment, including from abroad. It will also make Egypt more attractive for foreign visitors, which is critical given that tourism accounts for over a tenth of GDP and a big slug of employment.” So what’s the matter? The piece then goes on to note that to generally inflationary environment and persistently high unemployment, it is necessary to “add the increase in fuel prices — however sensible fiscally — and Cairo faces a potentially explosive reaction from ordinary Egyptians, with reports of mass demonstrations planned for November 11.”

Our problem with that: Is there a risk of social pressure after the float? Absolutely. But by all accounts, 11 November is a fiction created by a handful of media types for — one presumes — their own amusement and self-aggrandizement. No credible activist group, social media page or other force of which we’re aware is taking the call for protests this Friday seriously, despite local media reports like this one asserting that local cops in Giza have got a plan. To say that “mass demos” are “planned” is a rather significant overstatement at this juncture. (The very smart Mokhtar Awad has picked up on the so-called leader of the 11/11 movement [tweet]. That said, we disagree that the state is fanning fears of 11/11 — indeed, as we note below, it’s barely mentioning it.)

We’re not alone in suspecting Friday will come to naught: “The pain of Egypt’s currency devaluation may be felt well before the benefits, creating a period of at least several months in which there is little positive news to offset rising inflation and falling living standards,” Reuters notes in a solid reax piece from Andrew Torchia and Ahmed Aboulenein that more than once downplays the chances of protests on Friday.

The government is taking the threat of protest seriously, albeit in an understated way: President Abdel Fattah El Sisi met with the ministers of the interior and defense last night to discuss national security issues, according to an Ittihadiya statement that made no mention of the protests.

What’s the international view on inflation right now? Capital Economics sees it rising to “20% in the coming months, from about 14% in September,” with the Wall Street Journal quoting the outfit’s Jason Tuvey as noting that “food inflation could rise to more than 25% in the coming months” and (as those of you living in Egypt know), the sourcing of FX on the parallel market prior to the float meant “the effects of a weaker pound may have started to have an effect on inflation even before the official exchange rate was devalued.” Capital Economics expects inflation could begin to cool “in the middle of next year.”

So, what’s a market clearing rate? The EGP was trading within the banking system at an average of 16.83 yesterday, down from 16.32 on Sunday. By Monday evening, the National Bank of Egypt was offering a selling price of EGP 17.25 to the USD 1, Al Mal reports. Reuters is suggesting that the market-clearing rate is probably somewhere around 18.00 to the greenback, quoting one banker as saying, "Anyone who speculated last week bought USD at high rates and, so far, current rates do not cover the cost of purchase for most of them. The rate will need to hit 18 Egyptian pounds or so to the USD before they off-load, if they do.” The newswire also reports that “Importers, who had been forced to source all their hard currency from the black market for months, said they had obtained USD from the bank since the float. ‘We got about 60 percent of our needs today and this is more than we have gotten in months. We were jumping for joy.’”

Some banks still playing catch-up: Meanwhile, as banks are racing to issue high-interest products to compete with NBE’s and Banque Misr’s and others, including CIB, increasing the limit on their credit cards’ usage abroad by around 3x, HSBC Egypt’s cards are yet to return any meaningful limit. HSBC is not just sticking to its old limits (set for all clients, including Advance and Premier customers, at USD 100 per month), but now the catch is that, despite the note on their website, this limit is presently set based on the EGP equivalent on 17 October. So the most any HSBC-issued card can buy you is around USD 55 a month. God have mercy on HSBC’s call centre employees as they try to explain this to clients.

Meanwhile, it’s Election day in the US, that once-every-four-years moment when the tractor driver from Ohio or Pennsylvania gets to mess it up for the rest of us. May the best woman win. Want to watch live? We’re going to go out on a limb and suggest the most satisfying way to watch will probably be on CNN International or OSN News, but OSN’s programming guide is too much of a hot mess for us to figure out in a reasonable amount of time when that might kick off. If you want to watch on a laptop, phone or iPad, you have roughly 6.02×10^23 options, per our quick search of the interwebs:

• Twitter: BuzzFeed News will be streaming live on Twitter starting at around 1am CLT tonight (6pm Eastern time).
• Youtube: The Google service says it will stream election coverage from Bloomberg as well as NBC and PBS, among others, starting at 2am CLT (7pm Eastern).
• El-Face: Pages from ABC News, CNN, The New York Times, and the PBS NewsHour will all be broadcasting.
• We would suspect the major US broadcast outlets will live-stream something on their election landing pages. Try: CNN, ABC, CBS, NBC, and Fox.

New York Times: In addition to that Facebook link above, the Gray Lady will be offering unlimited access at no charge to the entire website for 72 hours, ending sometime around 7am CLT on Thursday morning.

The Federation of Egyptian Industries is expected to hold a meeting today to discuss how the float will affect gas prices to industry, Al Masry Al Youm reports. It is worth noting the government has yet to come through on its promise to reduce gas prices to steel manufacturers by last October.

Russian president Vladimir Putin will visit Egypt sometime this month to sign an agreement to construct the Daba’a nuclear power plant, Al Masry Al Youm reported. Sources said the project will cost USD 29.25 bn, 20% of which will be sourced domestically. Bring back the tourists, please, Vladimir.

The House of Representatives’ Industry Committee will begin the discussing the automotive directive sometime next week, Al Borsa reports. The auto industry has been invited to take part in closed sessions on the law (more on that in the Speed Round).

Where are executive regulations of the VAT? It has now been officially been one month since the Finance Ministry was required to release the executive regulations of the value-added tax (VAT). But who’s counting, right? Deputy Finance Minister Amr El Monayer assured Youm7 that they indeed will be out this month.

No Aramco shipments until further notice: Saudi national oil firm Aramco informed Egyptian authorities it would be halting shipments of fuel products to Egypt “until further notice,” an Egyptian official told Reuters. Oil Minister Tarek El Molla confirmed the reports to Bloomberg, but did not provide any further explanation. The government is splitting hairs, saying that the agreement with Aramco “has not been cancelled,” Al Shorouk reports. Reuters’ source said Egypt had already launched tenders to cover its import requirements for November, and the Oil Ministry issued a statement that supplies to gas pumps are continuing regularly. Aramco did not comment on the news.

Separately, the Oil Ministry issued a statement reiterating its denial that Minister Tarek El Molla was on a visit to Iran, according to Al Shorouk. There was confusion during the day after Iran’s “semi-official” Mehr news agency said El Molla was on his way to Tehran for a meeting with his Iranian counterpart, news that was later denied by El Molla himself and an Iranian oil official.

For the record, back in July 2015, Prime Minister Sherif Ismail — then Oil Minister Ismail — told Al Ahram that Egypt had no reservations about importing petroleum products from Iran.

Egypt is expected to sign the USD 12 bn loan agreement with the IMF next week, said Finance Minister Amr El Garhy in a call-in to MBC Masr’s “Yahduth fi Masr” (watch, runtime: 50:27, with El Garhy’s segment beginning in 7:45). His statements come as sources from the ministry tell Al Shorouk that the government is trying to get the IMF to increase the first payment of the loan to USD 3.5 bn from USD 2.5 bn to make it easier to service debt starting next year. The sources added that the this payment is expected to arrive next month. There’s already talk coming out of the ministry that the USD 2-2.5 bn eurobond issuance will be postponed until the arrival of the first payment, which would lower the borrowing costs, the sources say. Assuming these unnamed officials are correct, this would push back the date of the eurobond issue to next month. El Garhy had reportedly confirmed that the bond issue will take place in the last week of November.

And speaking of the IMF, an unnamed official from the fund was quoted by Al Shorouk as saying that last Thursday’s float and raising prices on fuel came as an unexpected (but pleasant) surprise as there had been doubts that the government would make the two moves simultaneously.

And speaking on the float, El Garhy said that the government had expected the volatility in the exchange rate and predicts the FX market will stabilize the coming weeks. El Garhy did confirm that the fuel subsidy bill had risen to EGP 65 bn as a result of the float, adding that some ministries will be negatively impacted by the decision, while others, such customs and Suez Canal revenues, will not.

The float and rising interest rates may have increased the Electricity Ministry’s expenses by a whopping EGP 100 bn per annum, ministry sources tell Al Borsa. EGP 50 bn of this increase will come from the rising costs to import fuel and gas for power plants. Debt service will rise to EGP 40 bn (the sources don’t explain by how much), while the costs of the three Siemens combined-cycle power plants will rise by EGP 30 bn.

Meanwhile, President Abdel Fattah El Sisi instructed Power Minister Mohamed Shaker to make sure that the float won’t result in rising electricity prices for consumers, Al Shorouk reports, something Shaker promised on Sunday. Prices, however, will go up next fiscal year which begins in July, as part of the ministry’s five-year plan to cut power subsidies for anyone but lower tier consumers, ministry spokesman Ayman Hamza confirmed. The ministry is looking to cut subsidies on electricity by EGP 14.7 bn next year, almost half of this year’s EGP 30 bn bill, government sources tell Al Borsa.

Voting with their wallets: The pledge of no price rise before next summer comes as the Electricity Ministry has reportedly found 20% of consumers have not paid their October bill, with many openly refusing because inflation is eating into their wallets. Campaigns have sprung up calling on people to stop paying their power bills, according to Al Borsa.

The decision to float the EGP is credit positive for Egyptian banks as it will likely increase the availability of USD in the economy, supporting economic activity and the banks’ business, Moody’s said in a sector comment. The 300 bps increase in interest rates will also support banking sector profitability given the exposure to short-term government securities, positives that Moody’s says will “offset the negative effect that the currency devaluation will have on the banks’ capital adequacy ratios and the negative pressures that banks will face on asset quality owing to rising inflation and higher interest rates, which weaken debt affordability.” The ratings agency explains that “a weaker currency will exert mild pressure on banks’ already-low capital buffers because [USD]-denominated banking assets will appreciate relative to the banks’ Egyptian pound-denominated capital, although the higher profits that banks will make on their foreign currency assets will partially offset this effect. We estimate that a 50% devaluation would lower the banks’ reported Tier 1 capital ratio by 150 basis points to 10.8%.”

How to make money like an Egyptian: Savers who bought certificates of deposit paying around 12.5% at banks are now reportedly borrowing up to 90% of their values using them as collateral at rates of around 14%, only to deposit these funds in the 20%-interest carrying certificates issued by the likes of NBE and Banque Misr, Al Borsa says, pocketing the difference in interest payments. Anecdotally, Al Borsa says that the waiting list for a loan guaranteed by CDs is now over 50 clients who are waiting to execute the move. We are in awe of the ingenuity, people, touché.

“This is the right step, it was long awaited by all market participants,” head of Research at Pharos Holding Radwa El Swaify told Bloomberg TV (watch, run time: 2:07), commenting on the EGP float. “All the steps on the agenda were much needed in terms of building net international reserves, trimming the budget deficit, and monetary policy adjustment,” she adds. The CBE has made it clear from its announcements that that the next step is left to the interbank and market supply and demand, El Swaify says. She agrees with RenCap’s Ahmed Badr’s remarks that there will be an expected period of volatility and overshooting as market participants test their boundaries to understand the backlog of demand clearance rate.

Edita Food Industries will increase the prices of some products and boost employee salaries in the aftermath of last week’s reforms, Chairman Hani Berzi told Reuters’ Arabic service. Berzi says the EGP float is a positive step towards achieving FX stability, but says higher prices will impact imports and transportation. As a result, Berzi says, Edita is having to reprice its products to maintain profitability. Edita had stopped sourcing USD from the parallel market two weeks prior to the float claiming “unacceptable prices,” Berzi added, noting that 28% of Edita’s expenses are directly affected by FX rate. With inflation rates expected to hit 20% by the end of the year, he says, the company is trying to take into account the drop in purchasing power of its employees, but did not reveal the size of the salary or product price increases.

Meanwhile, GB Auto has raised prices on Hyundai cars by 5.7-11.2% following the float of the EGP, Al Mal reports. The newspaper has a chart of Hyundai prices before and after the float. The move justifies our skepticism of last week’s announcement by the automobile division of the Federation of Egyptian Chambers of Commerce promising to reduce prices of cars by EGP 10-30,000 for vehicles in the EGP 100k-350k price range.

Savola getting hit by EGP float: Savola group issued a statement to Tadawul saying its operations in Egypt will be impacted negatively by float of the EGP. The company says its 4Q2016 consolidated net profit will be impacted by SAR 171 mn approximately as a result. Savola also said it “has previously taken a number of measures, over the year, that have significantly decreased its exposure and the resulting ‘hit’ of Egyptian pound devaluation against foreign currencies, this efforts have been actively managed by the company, which enable it to avoid much bigger loss.”

Similarly, revenues of international airlines tied down in Egypt have shrunk since the float to USD 153 mn, a 45% depreciation from USD 275 mn in August, Al Mal notes. This would likely make the issue repatriation of revenues from Egypt all the more pressing for airlines. KLM had reported earlier this fall that it will indefinitely suspend flights to Cairo starting 8 January, 2017. Meanwhile, British Airways has increased the prices of its tickets by 15%, a move it claims it will reverse if it can repatriate its revenues.

How will your company be impacted by the flotation? Let us know by dropping us a line at editorial@enterprise.press. We’ll sift through your answers and either run the best quotes or knit together a little piece. Please make sure to include your name, company and title even if you’re asking your comments run on a no-name basis.

In other auto industry news, the House of Representatives’ Industry Committee will begin discussing the automotive directive next week, parliamentary sources tell Al Borsa. The committee plans to invite industry leaders to speak in closed session, said committee member Mohamed El Zeiny. In a surprising development, Hussein Moustafa, CEO of the Egyptian Automobile Manufacturers Association (EAMA), has come out against the law, telling Al Borsa that the law favors some in the industry over others. He criticized a provision that would tax locally manufactured automobiles at 7%, saying the rate is too low in view of customs on some imported cars coming out to 10%. Moustafa also objects to a levy of 0.5% of sales that would be imposed on the industry to run a fund to develop the industry. Conditions for companies to obtain aid from the fund — such as growing exports to be 125% larger than the company’s import bill within eight years — are also too stringent, he says. He also complains that EAMA was not consulted in the drafting of the law. That strikes us as off: The Trade and Industry Ministry has held several meetings which included the chairman of EAMA Hassan Suleiman, the most recent being on the law’s executive regulations.

Orange Egypt will finance the foreign currency component 4G licence fees through a EUR 500 mn loan from its majority shareholder MT Telecom SCRL (wholly owned by Orange Group) payable on 21 December 2020 and carrying an interest rate of 7% per annum. According to a release sent to the EGX and carried by Reuters, the funding will also help cover the cost of a fixed line licence. Orange Egypt CEO Jean Marc Harion says with the foreign currency component secured, 100% of the total funding requirement is met, as the company has already paid the EGP portion, Al Mal reported. Orange Egypt will begin providing 4G services within three months, Harion told Reuters’ Arabic service, providing connectivity at speeds up to 10x faster than today. Harion also said that prices of Orange’s services will not increase to consumers as a result of the float, affirming that the company will instead opt to preserve margins through cost-cutting measures, Al Mal also noted.

MNHD sells out Sarai phase one, says 10M2016 contracted sales surge to EGP 2.4 bn. Madinet Nasr Housing and Development sold-out its 463 unit first phase of its Sarai project on launch day, the company said in a statement yesterday (pdf), and now aims to finalize contracts with c. EGP 815 mn over the course of the month. Sarai is a 5.5 mn square meter mixed-use development in Cairo near the new administrative capital designed by the same firm behind Yas Island in Abu Dhabi. The company’s disclosure also notes that EGP 450 mn in contracted sales from its Taj City project brought its 10M2016 sales book to EGP 2.4 bn. That figure excludes Sarai sales booked earlier this week.

Miner Aton Resources has raised CAD 3 mn (USD 2.24 mn) from Sprott Private Wealth and a Sprott affiliate to fund the continued exploration at Aton’s concession in Egypt, according to a company statement. The further exploration is meant to confirm the extent of the strike zone of the mineralized horizon in the Abu Marawat concession, which lies 400 kms north of the Sukari gold mine. The company “expects to announce assay results for the remaining holes of the 38-diamond drill hole program, totaling 3,428.20 metres, at Hamama West, one of three zones that comprise Hamama [part of the Abu Marawat concession], within the next several weeks,” it said in its statement.

Earnings Watch: Among those reporting results during the past couple of days:

• Palm Hills Developments reported 9M16 net profit after tax and minority interest of EGP 404 mn, slightly down y-o-y from a normalized figure of EGP 421 mn in 9M15 (the latter figure was calculated by adding back EGP 100 mn in provisions and deducting EGP 426 mn in capital gain on non-core land bank sales). Revenues amounted to EGP 3.6 bn in 9M16. Net contracted sales were essentially flat year-on-year in the third quarter at EGP 1.9 bn, good for 9M2016 sales of EGP 4.7 bn, a rise of nearly 11% year-on-year.
• Emaar Misr reported 9M16 net profit of EGP 1.06 bn, up from EGP 744.54 mn in the same period on revenues of EGP 2.5 bn in the first nine months of this year.

Is Eni in trouble? Eni CEO Claudio Descalzi said he wants non-OPEC oil producers to start reducing output, according to Bloomberg. OPEC members had decided to cut output for the first time in eight years and are looking to persuade other producers to follow suit. “OPEC cuts are quite important for our financial investors,” Descalzi explains, saying the group has “a very strategic role that can give assurance to our investors that we have a floor.” Descalzi is hoping crude prices would hit USD 50 per bbl, saying “looking at our break-even price, that is enough.” Eni had produced a “greater-than-expected third-quarter loss” and is reducing capital expenditure. The company is the partner in developing Egypt’s “supergiant” gas field, Zohr.

Private equity in North Africa is dominated by Morocco and Egypt, which, collectively, account for 81% of the value of all transactions in the region since the start of the decade, Dominic Dudley writes for Forbes. The numbers are compiled by the African Private Equity and Venture Capital Association covering the period from January 2010 to June 2016 and show that “Morocco holds a slight lead over Egypt, with the countries accounting for 41% and 40% of the total value of deals respectively… Key areas that have been targeted by private equity investors include manufacturing, education, healthcare and consumer goods.”

Coverage of Egypt in the Western press is pivoting from reaction to last week’s economic reforms to the impact of the float, interest rate hike and increase in fuel prices, with coverage from wires setting the tone — particularly Reuters and AP, but also Bloomberg despite its comparatively narrower footprint outside the finance industry. Saudi Aramco’s cutoff of fuel deliveries is also getting coverage.

When dealing with the Middle East during the debates, there was no mention of Egypt, and this was a stark omission considering Egypt’s centrality in Middle East politics, writes Josef Olmert for the Huffington Post. Egypt could have been in a much more dire situation if it remained under Muslim Brotherhood rule, he says. Olmert suggests that, while the Armed Forces intervened with an iron fist to save Egypt from complete chaos, it also saved the Middle East from complete regional chaos. President Abdel Fattah El Sisi is currently failing to address pressing issues and “Egypt needs international support,” including the EU, US, the GCC countries, and discretely, Israel.

Tattoo’s becoming a thing? “The art is getting more and more popular here,” Shubra-based tattoo artist and parlour owner Osama Ayoub told Al-Monitor. “Despite social pressure and deeply rooted ideas, I have been running a very successful business so far,” adds Ayoub, who says his clients come from all walks of life and both religions in Egypt. Another Jordanian artist named mentioned says it would take years for people to accept the art of tattoos in a country like Egypt. “But it will happen one day. From the time of the pharaohs, Egyptians have always been known for loving art, and tattooing can be found in Egyptian ancient history.”

Imagine going to work — and not having a desk. Or a laptop. Or a phone. But being expected to trade. Or advise on a transaction. Or whatever it is you do during the daylight hours you normals work. That’s UBS’ latest brainstorm in the latest bout of corporate cost-cutting insanity to sweep the industry:

“A desk is like a home away from home for many in the working world. Family photos, trinkets from a vacation, an extra pair of shoes or spare chopsticks are just some of the things routinely left lying around in what has become personal space. But that comes at a price for companies,” writes the New York Times. At UBS, “many of its employees … in the City of London will no longer be tied to the same desk every day with a telephone and desktop computer. Instead, the company has deployed so-called thin desks throughout the building. Phone handsets were replaced by personal headsets, and employees can log onto their virtual desktops on computers at any desk in the building or at home. There are no laptops to lug around, and their phone numbers follow them from desk to desk or to their mobile devices.”

Don’t worry, UBS assures you it’s not meant to make its bankers feel like an interchangeable drones: “For me, it’s opening up and allowing people to work in different ways on whatever project, whatever activity they’re working on,” says a managing director for “corporate services” at the bank responsible for this nonsense.

We’re betting the half-life of this story is about two years. At least half of the Bulge Bracket will need to switch at least 5% of their office space to this format — and be aped across the world by national players — before the pendulum swings and sanity is restored. Read “No Laptop, No Phone, No Desk: UBS Reinvents the Work Space” in the New York Times (no paywall today) and wish the story had been assigned to a writer who knew the definition of sarcasm.

AUC students protest spike in tuition following devaluation: AUC students are protesting (runtime: 0:29) and demanding that tuition fees — a portion of which are paid in USD — be lowered. Apparently channelling Nixon’s kids, notable chants include “my dad is not a crook.” While we do sympathize that rising college tuition is problem that can spur protests in Western countries, we would like to point out that over there, more students rely on loans, fewer on the Bank of Mom and Dad. Students who cannot meet AUC’s USD 4,749 + EGP 33,258 per semester tuition usually receive scholarships based on merit. Still, it’s hard not to wonder: What’s the institution doing to ensure that middle class families on the borderline can afford an education?

President Abdel Fattah El Sisi is expected to visit the Portuguese capital Lisbon “soon,” Portugal’s Ambassador to Egypt Madalena Fischer told Ahram Gate. El Sisi will be scheduled to meet his Portuguese counterpart, the Prime Minister, and Governor of Lisbon during the visit. The presidents are expected to discuss security and illegal immigration issues, as well as trade to Africa through Egypt, and cooperating on ports, pharmaceuticals, and renewable energy, she added.

Foreign Affairs Minister Sameh Shoukry has left for Ethiopia to attend a joint meeting of the high-level African Commission on Libya and the Libya’s Neighbouring Countries group, the ministry said in a statement.

The Electricity Ministry has completed building transformer stations worth a total of USD 238 mn to accommodate the output that will be added when the three Siemens power plants being constructed now are connected to the grid, Al Masry Al Youm reported. The ministry is also expanding several of its existing transformer stations in the Delta and Upper Egypt regions, Chairman of the Egyptian Electricity Transmission Company Gamal Abdel Rehim said.

Wadi Degla has not signed a power purchase agreement under the first phase of feed-in tariff program, sources at the Electricity Ministry told Al Borsa. It was previously reported that Wadi Degla was one of 10 companies that had signed the PPA agreements for phase one, but it did not complete procedures and has not decided to move onto phase two or withdraw, the source added.

China’s Dongfang Electric has begun conducting maritime surveys and studies ahead of building a coal port alongside the Hamrawein clean coal power plant, sources at the Electricity Ministry told Al Mal. Four consultancy firms are being considered for the Hamrawein power plant project, the source adds, with the winning company to determine whether the project will be tasked by direct order or put through a tender.

Juhayna Food Industries are set to receive the last tranche of an EBRD loan valued at EGP 185 mn in the coming period, Al Borsa reported. Juhayna had previously received EGP 315 mn from EBRD used to upgrade dairy, juice, and other operations. The last tranche will likely be used to increase production, sources at the company said. The EBRD had agreed to provide Juhayna with up to a EGP 945 mn seven-year loan in November 2013.

Food prices have spiked significantly since the increase in gas prices, with inflation hitting some products at a rate of over 15%, reports Al Shorouk. The government has responded with (wait for it) a committee to study the issue, Al Ahram reports.

The Sidi Kerir Petrochemicals Company (Sidpec) is planning to export 70% of polyethylene produced from the Egyptian Ethylene and Derivatives Company (Ethydco) to increase USD inflows and be able to settle USD denominated obligations, Al Borsa reported. Commercial operations at Ethydco are scheduled to begin in January 2017, an unnamed source at the company said, with trial operations of polyethylene production currently taking place.

The Egyptian Company for Vaccines, a subsidiary of Vacsera, said they are ready to distribute 18k packs of domestically manufactured insulin to the Health Ministry to reduce a shortage in hospitals, company chairman Nabil Beblawi told Al Mal. There is anecdotal evidence of a shortage in hospitals nationwide, supported by the Egyptian Pharmaceutical Trading Company, the main importer of insulin, saying they had to reduce supply following the EGP float. However, domestic manufacturers of insulin say they have three to five months in strategic supply and that worries of a shortage are unwarranted, Al Borsa reports.

There will be no further increase in the prices of meds, declared Health Minister Ahmed Rady earlier this week, according to Al Borsa. Rady believes that since most pharma companies have been sourcing their FX from the parallel market prior to the float, it should not use it as an excuse to push for further prices. The pharma division of the Federation of Egyptian Industries is naturally incensed, stating through its member Gamal El Leithy that it had been sourcing FX through the banking system at the old rate and the float has raised expenses by 80%. The division suggested that they be granted an exception to the float and continue to exchange FX at the old rate, or be allowed to increase prices of cosmetic and non-essential products. Either way, the division appears to have tabled their ongoing demands to raise prices until the FX market stabilizes, following a meeting with representatives of the Industry and Trade Ministry, Al Mal notes.

UK broadcast journalist and member of parliament Michael Portillo urged the UK government to reassess its travel warnings on Egypt and take a measured and balanced approach. Speaking at a press conference on the sidelines of the World Travel Market, Portillo noted that the these warnings have had an adverse effect on both Egypt’s tourism and the British traveller. He was joined by Tourism Minister Yehia Rashed who stated that Egypt’s airports are certified as having met international standards of security, according to an e-mailed ministry statement. Egypt’s ambassador in London noted that the agreement with Thomas Cook to resume flights to Sharm El Sheikh continue to be contingent on UK authorities lifting the warnings.

The Ismail cabinet approved amendments to the Social Benefits Act which set the criteria for eligibility to social welfare programs such as Takafol and Karama. The law will set out punishments for those who are fraudulently benefiting of Takaful and Karama, where costs have increased to EGP 12.5 bn in two years from EGP 3.8 bn, said the program’s head and Deputy Social Solidarity Minister Nevine Qabbaj. The law, which will be sent to the House of Representatives next week, will also form a task force to investigate cases of benefits fraud, she tells Al Borsa.

Wait, what? Green space in Cairo? Ahram Online bowls us over with vantages we’ve not previously seen in “Exploring Cairo: Eight great parks for an autumn picnic.”