Monday, 14 November 2016

Egypt beats Ghana + IMF bailout terms unveiled
(And it’s Supermoon day)


What We’re Tracking Today

The EGX30 closed up once again yesterday on massive volumes, its twelfth straight session in the money. The EGX30 was up 2.1% with foreign investors once again buyers as c. EGP 2 bn in shares changed hands — that’s about 350% above the trailing 90-day average. Egyptian Resorts Company, Domty and Ezz Steel led the day’s top gainers. Reuters suggests in passing we may have seen signs of some tentative profit-taking yesterday.

With the IMF pact now signed, we wonder: When does the Ismail government start to discuss use of proceeds, whether that’s simply leaving the funds parked at CBE as a liquidity buffer in the event of some exogenous shock to the economy, or putting it to work backing a plank or more of the reform program.

Germany’s plan to have Egypt take in migrants is still in the cards, as we suggested early last week (additional background here). It now seems that we’re asking the European Union for trade concessions as well as German and European Union support “negotiating more favourable terms on a loan from the International Monetary Fund (IMF),” the Australian reports, saying Cairo has been in talks with “Christoph Heusgen, [German Chancellor Angela] Merkel’s foreign policy adviser, and Jan Hecker, her refugee policy co-ordinator.” It strikes us that Egypt’s ask could be a bit more ambitious than that, but in any event: Watch this space, even if for news that Austria is the only other EU country to (so far) back the proposed arrangement publicly.

Oh, and the online press in Ghana is still chattering over the fact that Hadary scaled the goal (again) to cheer Egypt’s 2-0 victory last night, the latest in the nation’s quest for a 2018 World Cup berth. (Watch, run time: 0:51). Egypt is now at the top of Africa’s Group E in qualifying matches for the 2018 Russia World Cup. Just don’t let that make you think we’re assured a berth, King Fut warns. We would also like to treat you to some of the goals from last night. Egypt’s first — from that champion Mohamed Salah ± was a penalty, followed by an even more exquisite one from Abdallah Al-Said (runtime: 1:16).

Across the pond: Donald Trump has appointed RNC chief Reince Priebus as chief of staff and “insurgent firebrand” Steve Bannon as his chief strategist, Politico reports. The man to whom the Dems may now turn to rebuild? The first Muslim elected to Congress, Keith Ellison, now being touted as a great chairman of the DNC. Trump, meanwhile, is making headlines for his interview last night with CBS’ 60 Minutes Leslie Stahl, in which (among other things) he suggests he didn’t mean everything literally, but rather as opening gambits in a process of negotiation. (Watch, run time 39:42. Lot of ads, but no geo-blocker as of dispatch time.)

Finally: CIB has again increased raised its caps on use of credit cards abroad, according to an update to its term sheet from yesterday. You can check out the full list here (pdf). Caps are up across the board, with Platinum cardholders now being able to make purchases of the USD equivalent of EGP 100,000, up from EGP 64,000 last week. Al Borsa has a roundup on new limits in this slideshow.

It’s Supermoon Day, ladies and gentlemen — the ‘biggest’ full moon in 68 years. That’s the largest since 1948, ladies and gents: Queen Elizabeth was still a princess, Prince Charles had just been born (today, as matters would have it), and India had been independent for only a year. The moon will reach what’s known as the “crest” of its full phase today at about 3:52pm CLT. Doing the calculation is beyond our mental capacity (at any time of day, let alone at 3am with barely half a cup of coffee in our system), but the basics are that it will appear 14-30% larger than usual tonight. In fact, it won’t appear this large again until 25 November 2034. The Guardian has a very nice explainer, and the image below is by Reuters’ fantastic Amr Abdallah Dalsh, taken last month and used to illustrate a wire piece with a US angle. (Our closet Fenian-tinged Saad Zaghloul will now wallow in guilt as he grapples with the fact that we just used British history as the benchmark for 68 years ago…)

What We’re Tracking This Week

The executive regulations of the value-added tax will be revealed sometime this week and will be put out for “national dialogue,” said Deputy Finance Minister Amr El Monayer. You can check out some features to look out for here.

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

The Egypt Trade & Export Finance Conference will be held on Tuesday, 15 November. The Egypt Mega Projects Conference also runs tomorrow.

The CBE’s Monetary Policy Committee will convene on Thursday, 17 November to review interest rates.

“Unstable weather” is set to sweep much of the nation starting tomorrow and peaking on Thursday and Friday, according to the Meteorological Authority. Cairo, Alexandria, the North Coast and Sinai could all see heavy rainfall, the authority warns. Our favourite weather apps are remain split, but all agree today will be in the high 20s.

Speed Round

Speed Round is presented in association with

Egypt will receive USD 2.75 bn as a first tranche of funding from the IMF once the agreement is signed, followed USD 1.25 bn in April-May 2017 after the first revision, the Finance Ministry said. The USD 12 bn package is payable over 10 years, including a 4.5-year grace period, through 12 instalments. The funding’s interest and service fees stand at 1.55-1.65%, the Ministry says. Finance Minister Amr El Garhy said the government will focus on structural reforms and on supporting domestic industries, particularly exporters. Deputy Minister Ahmed Kouchouk says the economic reform program targets GDP growth of 5.5% in FY 2018-19 and to reduce the primary deficit from 3.4% in FY 2015-16 to a primary surplus by FY 2017-18.

As for the fiscal deficit for FY2017-18, the Finance Ministry is looking to reduce that to 8.5-9.5% from a projected shortfall this year of 9.8% of GDP, according to its guidelines for preparing next year’s budget released on Sunday. Fiscal and structural reforms are expected to reduce public debt to 92-94% for the FY17-18 year. The 62-page sheet, which reprioritized fiscal spending based on the reform agenda, instructs the ministries of health, housing, social solidarity, ICT, transportation, and higher education to apply key elements of the reform plan when preparing their budgets for the next fiscal year.

Signing the IMF agreement could “trigger an inflow of international investments,” Mahmoud Kassem writes for The National. EFG Hermes’ strategist Simon Kitchen says, “For many investors, the IMF agreement is the green light for investors because for many of them it was ‘I won’t believe it until I see it’ … Egypt has signed preliminary agreements with the IMF in the past five years, staff level agreements, but this is the only one that has been sealed.” The outlook for Egypt is probably at its best since 2011, says Mohamed Jamal, capital market managing director at Waha Capital, but notes that “there are still risks ahead in terms of pick-up in inflation, social acceptance of these reforms, delivery on the fiscal tightening linked to the IMF programme.”

Elsewhere yesterday: EFG Hermes’ Mohamed Abu Basha got the not to speak with Marcus Cranny and Tracy Alloway on Bloomberg’s morning show (watch, run time 5:31).

Heeding Bank of America Merrill Lynch’s call: Yields on three-and nine-month treasury bills fell yesterday, “with bids submitted for nine-month bills roughly four times more than the amount accepted,” according to Reuters. The bank had recommended investors buy Egyptian treasuries to benefit from an attractive carry. Yields on 91-day bills dropped to an average of 18.028% from 19.055% and to 18.715% from 20.367% on 273-day bills’.

The central bank will be reviewing limits on USD deposit caps after initial inflows of FX liquidity since the EGP float exceeded expectations, CBE Governor Tarek Amer told banking heads at the meeting with the Federation of Egyptian Banks on Sunday. Amer also said that the CBE will be looking into the risk treatment on open positions, telling banks to hold off on closing these positions until the EGP strengthens further so that burrowers do not incur major FX losses. Borrowing costs have gone up 80-100% for importers since the EGP float, he said according to Al Mal. He encouraged the banks to continue weakening the USD. Amer had stated that the banking sector had managed to draw in USD 1.4 bn in the first week of the float.

Meanwhile, remittances to the National Bank of Egypt have apparently grown tenfold since the float, said NBE’s deputy chairman Yehia Aboul Fotouh. He says that NBE has raked in USD 300 mn since the float. Banque Misr chairman Mohamed El Etreby tells Al Mal that his bank pulled in the USD equivalent of EGP 26 bn through its three-year and 18 month CDs.

Float is shaking up office, retail real estate markets: Tenants in high-end office buildings pay rent in USD, which has doubled costs following the EGP float and will remain a burden going forward, JJL Egypt head Ayman Sami told Al Shorouk, leading some to shift strategies and consider buying their own office space. Retailers, which rely on imported international brands, are at the same time squeezing margins to keep sales moving at a time when consumer wallets are being pinched, Sami said. The implementation of VAT and the float have constrained consumer spending, he added, and shoppers are now more receptive to Made in Egypt goods and services.

El Sisi requests concrete timeline for IPO of state-owned businesses. President Abdel Fattah El Sisi instructed the government to set a concrete timeline for the upcoming IPO of state-owned enterprises. El Sisi ordered the program expedited during a meeting with Prime Minister Sherif Ismail, Finance Minister Amr El Garhy, and CBE Governor Tarek Amer. The sale of Banque du Caire is expected to take place “sometime in 1Q17,” according to Deputy Finance Minister Ahmed Kouchouk. Investment Minister Dalia Khorshid had suggested the listing of state energy companies would get underway sometime in December or January.

The meeting also looked act possible partnerships with the private sector on projects that would reduce Egypt’s reliance on imports, said Ittihadiya spokesperson Alaa Youssef. El Sisi also noted that the banking sector had attracted new liquidity after the float of the EGP, adding that the state is committed to supporting the industry, Al Mal reports.

Fast food chain Mo’men is once more making rumblings about IPO’ing on the EGX. And outfit we’ve not previously heard of calling itself Solid Capital told Al Borsa it is restructuring the Egyptian fast food restaurant chain in preparation for a listing within two years. Solid Capital CEO Mohamed Reda (LinkedIn) told Al Borsa the first step will be to attract a strategic investor interested in acquiring a majority stake in Mo’men, which a number of Egyptian companies and a Saudi investor are reportedly considering.

UAE, Kuwait playing marriage counselor for Egypt, Saudi? UAE’s state-owned The National declares in an editorial that Abu Dhabi’s Crown Prince Mohammed bin Zayed’s visit to Cairo last week “underscores the significance of Egypt as one of the most important parts of the Arab world” and is “proof that Egypt is not alone in facing these challenges. Arab allies in the region will continue to stand by Cairo … Egypt remains one of the most important countries in the Arab world. As such, the country is too important for the region to fail. Steps are being taken to ensure that doesn’t happen.”

Kuwait’s El Rai, meanwhile, reports that the UAE and Kuwait are leading a heads-of-state level bid to mediate between Cairo and Riyadh. Citing senior Egyptian officials, the newspaper posits bin Zayed’s trip as part of that mediation, which follows a state visit he made weeks earlier to Saudi Arabia to meet with King Salman to discuss the tensions between the two countries. Foreign Minister Sameh Shoukry apparently also received calls from his Emirati, Kuwaiti, and Bahraini counterparts advising the Egyptian government to keep things on ice. The source does not explain the cause of the rift.

Be on the lookout for a wave of new economic legislation coming soon from a Parliament near you: The House of Representatives has sent key economic legislation its various committees for review. Most important among these is the Natural Gas Act, which would deregulate the natural gas industry and see the state step back to become the market regulator and provider of pipelines, Al Masry Al Youm reports. Last we had heard, Maglis El Dowla would not complete its review of the law until December, making this a significant change of pace for a law that had been gathering dust for over a year. Other legislation includes the Industrial Permits Act (which expedites the issuing of permits for factories) and a Food Safety Authority Act (which would establish a new regulator for the food industry).

Meanwhile, Consumer Protection Agency head Atef Yakoub (resident troll of capitalists nationwide) says a Consumer Protection Act — which would allow cabinet to fix prices on “strategic” consumer goods for a period of up to two years — will be law in a few weeks, according to Al Mal.

Election debate about to begin? Look for jousting in various committees of the House of Representative as MPs prepare to debate the bill that would govern how local district council elections are run and another that would establish a National Elections Commission. The latter would need to be in place no later than fall 2017, we believe, to keep the 2018 presidential election (due to take place sometime between February and May 2018) on schedule. The NEC would be responsible for all elections (local, parliamentary and presidential) as well as referendums, Ahram Online reports.

Banks are willing to help fund the building of a hub for the automotive feeder industry in association with the Egyptian Automotive Manufacturers Association, said Banque du Caire Chairman and CEO Mounir El Zahid, according to Al Masry Al Youm. Pointing to Morocco and what he said are its USD 7 bn in auto exports, El Zahid believes that a manufacturing complex for the sector will help grow the domestic industry.

Meanwhile, the deputy head of the engineering industries division of the Federation of Egyptian Industries is calling for the government to review its auto import trade agreements with the EU, which he says have stunted growth of the auto industry in Egypt, Al Borsa reports. Under the agreement, tariffs on EU-made cars would be reduced until finally eliminated in 2019. This comes as the House of Representatives’ Industry Committee was supposed to meet with industry reps this week to discuss the automotive directive, which aims to give the industry a fighting chance against imports from the EU and Morocco through export and production-based tax and other incentives. No word has emerged as of yet on when the session is due to be held — if, indeed, it is still taking place.

Gov’t seeks USD 800 mn to cushion poor from impact of economic reform program: The International Cooperation Ministry is in talks with several unnamed European lenders for USD 800 mn in funding, minister Sahar Nasr told Reuters. Part of the financing will be in the form of a grant, while the rest will be a loan with favorable terms, she told Al Borsa. The financing is meant to expand the social safety net to mitigate damage from inflation on the lowest income brackets, she said. The World Bank has agreed to a USD 400 mn loan finance a public works program, is should be issuing the USD 1 bn second tranche of the USD 3 bn World Bank loan to support the budget, she said.

Al Borsa’s readers see EGP at 12-14 to the greenback in the medium term. Al Borsa conducted a poll this week, gauging the views of what it said were more than 100 economic experts on the future of the Egyptian economy after the IMF’s approval of a USD 12 bn loan to Egypt. Here’s a brief overview of the results:

  • 54% of participants expect the USD to stabilize within an EGP 12-14 range in the medium-term;
  • 65% believe the IMF is correct to believe Egypt can attract around USD 9.4 bn in foreign direct investments during FY 2016-17;
  • 43% expect Egypt’s GDP growth to come in below 4% for the current fiscal year;
  • 41% of participants believe that the rising costs of production are the biggest challenge facing businesses in Egypt today.

**Earnings Watch: Among those reporting earnings yesterday as earnings season builds toward Tuesday’s disclosure deadline:

GB Auto reported net income from ongoing operations of EGP 39.4 mn on revenues of EGP 4.3 bn. Revenues were up more than 36% year-on-year despite the FX crunch, with a standout performance across the company’s lines of business. GB Auto CEO Raouf Ghabbour noted: “We join the vast majority of the Egyptian business community in welcoming the Central Bank of Egypt’s move earlier this month to allow the free float of the Egyptian pound. We also believe that the phase-out over time of fuel subsidies will drive sales of our smaller engine models, where we have a robust lineup of models catering to a wide cross-section of consumers. It would be premature to offer short-term guidance, but our experience throughout the currency crisis (including our strong pricing power throughout that period) leaves us optimistic that the issue has long been less ‘pricing’ than it has been ‘availability’ of foreign exchange. We are accordingly very optimistic regarding the medium- and long-term outlook for the economy and for our industry.” You can read the quick summary of GB’s earnings here (pdf) or view the full document (pdf).

Edita Food Industries reported a 47.2% y-o-y decline in 3Q2016 Net Profit after Tax and Minority Interest to EGP 45.2 mn on revenues of EGP 613 mn, which were up 14.5% y-o-y, according to a company statement. Operating margins were solid, and the company’s key cakes segment returned to growth. CEO Hani Berzi noted that new, higher-margin products has helped preserve profitability, while “top-line growth is reflective of the strong demand for Edita’s products across all segments and our ability to continue to outpace market growth. This has allowed us to make use of our capacity expansions and has supported the continued rollout of new premium offerings.” Berzi signalled the company is continuing to invest in Egyptian expansion and is looking for new regional opportunities. You can read the quick summary of the earnings here (pdf) or view the full document (pdf).

Oriental Weavers reported a 311% y-o-y increase in net income to EGP 133 mn in 3Q2016 with revenues growing 1% y-o-y to EGP 1.539 bn. The company said it believes its export will drive growth in 2017 and is pursuing a strategy to settle EGP facilities to counteract raised interest rates.

Talaat Moustafa Group’s 9M2016 net profit rose y-o-y to EGP 620.3 mn, from 9M2015’s EGP 505.5 mn, according to a regulatory filing. 3Q2016 net profit also increased to EGP 188.14 mn, up y-o-y from EGP 138.9 mn.

Egyptian Iron & Steel’s 3Q2016 net losses amounted to EGP 233.6 mn, declining further y-o-y from EGP 104.15 mn, according to a bourse statement.

Abu Dhabi Islamic Bank (ADIB) reported 9M2016 net profit of EGP 272 mn, up y-o-y from EGP 144 mn for 9M2015. 3Q2016 net profit also rose y-o-y to EGP 81.3 mn from EGP 25.5 mn in 3Q2015.

A group of investors led by Mohamed Alabbar and Saudi Arabia sovereign wealth fund will each contribute USD 500 mn to Noon, a Middle East-focused e-commerce venture, Bloomberg reported. Noon will go live in January and provide 20 mn items for sale backed by Aramex, Alabbar said. The firm could be listed in five to seven years, he added. Bloomberg also notes that Alabbar said “he expects Noon to be profitable in five years and to enter Egypt and Iraq by 2018. It is also likely to use warehouses owned by Americana, which has three times the warehouse capacity of Aramex.”

Spotlight on

Following up on the first day of the Akhbar El Youm Economic Conference, more ministers gave their thoughts and plans for the future in the second day:

Investment Minister Dalia Khorshid: The Investment Ministry is expecting an average of USD 15-25 bn in foreign direct and indirect investment over the coming three years, Minister Dalia Khorshid told Al Mal. The program presented to the IMF projects USD 9.4 mn in FDI in FY 2016-17, she added. Khorshid stressed that the incentives package offered as part of new the Investment Law were primarily geared towards exports and also prioritize SME development.

Industry and Trade Minister Tarek Kabil: The government aims to impose a nominal annual tax of EGP 100 (that will be applied retroactively) on “SMEs” (we believe a more appropriate term would be “micro- and very-small enterprises”) in an effort to encourage these businesses to file tax returns and integrate them into the formal economy, said the minister. The policy was one of the 17 pro-investment policies issued by the Supreme Investment Council.

Supply Minister Mohamed Ali El Sheikh had one point to make: Raising the value of commodities on the monthly ration card to will cost the state bns, AMAY reports. The minister’s math (as reported) doesn’t stack up, but the points holds. Interestingly, El Sheikh issued an apology of sorts for the sugar shortage, but not for the confiscation drive: The minister continued to paint the private sector as Marie Antoinette, blaming it for exacerbating the issue. He practically told Egyptians to go on a diet, stating that Egypt consumes 18 mn tonnes of wheat per year when it only really needs 7 mn, Al Mal reports. In case the people still want their gluten fix, the government has raised its wheat storage capacity to 9 mn tonnes.

Housing Minister Moustafa Madbouly: Generating FX appears to be a key short-term goal for the Housing Ministry, as the cabinet had instructed it to draw in around USD 1 bn in new investments, according to statements by Madbouly at the conference. The New Urban Communities Authority (NUCA) plans to have its first mass land sale in USD targeting expatriates and foreign investors, said the minister. The move will be part of what Madbouly called the largest land sale in newly developed urban areas ever, which the ministry is currently preparing. Madbouly spoke of the sale of 155 feddans in New Cairo to a Saudi real estate investment firm for USD 238 mn — which will paid to NUCA in cash — as an example of the success the ministry has had in drawing in investments. What this means to the affordability of new land and new developments is simply mind-boggling.

International Cooperation Minister Sahar Nasr: The ministryhas thus far secured up to USD 2.9 bn from Egypt’s development partners to support SMEs, 20% of which is in the form of grants, Nasr stated at the conference’s SME session.

Social Solidarity Minister Ghada Waly: The ministry plans to increase the number of beneficiaries from the Takaful and Karama cash benefits programs to 4.3 mn families by the end of the current fiscal year, Al Borsa reports. This appears to be a substantial increase from the previously stated target of 1.7 mn families by next year, which Waly had said just this month would cost the state EGP 2.5 bn. Looks like they’re really putting that IMF loan to good use on that social welfare front.


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Egypt in the News

On a quiet news day for Egypt, the Washington Post looks at “rising” Muslim attacks on Christians. What the piece lacks in sophistication (“Attacks against Christians have intensified as mistrust between Christians and Muslims deepens. Today, community leaders and human rights activists say the smallest of matters are setting off violence, often pitting neighbor against neighbor.”) it make up for in length. We give the piece a B+ for stopping to consider a key issue, but something between an “incomplete” and a “D” for content.

Meanwhile, a short piece headlined “Egypt detains 200 alleged Islamists over protest calls” under the byline of the Associated Press’ inimitable Hamza Hendawi is getting wide international pickup.

The Economist sent out “two cheers” to President Abdelfattah El Sisi in a recently-published piece commending him for “the difficult but necessary” measures he has had to adopt to secure a USD 12 bn facility from the IMF. Still wary, the Economist reminded readers that Egypt has a long way to go in the way of economic development, stressing that going back on any of the structural economic reforms adopted recently can hold catastrophic repercussions.

President Abdel Fattah El Sisi welcomed Donald Trump’s win in the US Presidential elections because “the two men also share similar views on a number of issues,” Shahira Amin writes for Al-Monitor. She says El Sisi and Trump have a similar stance against the Ikhwan and both advocate a “war on extremism.” Amin also says El Sisi’s supporters view a Clinton as an end to the “support” she provided the Ikhwan, in their view.

Worth Watching

Adib dances to victory over Ghana: Amr Adib usually claims to speak for the Egyptian people (by speak for them, we mean bark for them). He can successfully claim that last night where he danced his heart out (runtime: 2:24) along with a traditional Egyptian band to celebrate Egypt’s 2-0 victory over Ghana in the qualifiers. Though our dignity won’t allow us to join in, we’re right there with you, Adib.

Diplomacy + Foreign Trade

Electricity Minister Mohamed Shaker will meet with Iraqi Electricity Minister Kassem El Fahdawy to discuss the likelihood of Egyptian companies helping redevelop Iraq’s electricity infrastructure which has been degraded over years of conflict, ministry sources tell Al Mal. The pair will also discuss outsourcing power distribution in Iraq to Egyptian companies, the source added. El Fahdawy had met President Abdel Fattah El Sisi on Sunday, Ahram Gate reported..


Finance ministry to sign-off on FiT phase-one projects in 10 days

Egypt’s Finance Ministry is gearing up to sign power purchase agreements with nine renewable energy companies in the first phase of the feed-in tariff program, Al Borsa reports. The companies had signed the agreements with the Electricity Ministry in October. Unnamed sources told Al Borsa that the Finance Ministry is expected to finalize the contracts within the next 10 days.

Ethydco complex successfully produces ethylene and derivatives

The Ethydco complex has successfully produced and supplied ethylene and derivatives to the domestic market and exported excess, the Oil Ministry announced, according Al Masry Al Youm. The complex also produced polyethylene, which is used in pipelines carrying natural gas, water, and wastewater. The project helps achieve the ministry’s strategy to maximize added value on petroleum products, in addition to curbing USD costs, it said.


Singaporean firm to develop 33 mn sqm industrial zone in Fayoum

The Trade and Industry Ministry will sign an MoU with a Singaporean firm to develop 33 mn sqm in Fayoum for an industrial zone in the coming period, minister Tarek Kabil told Amwal Al Ghad. The cost of the land provided is estimated to be around EGP 17.8 bn, sources at the ministry said. The Industrial Development Authority is set to issue five mn sqm of land plots for expansions in Tenth of Ramadan city in December, added Kabil.

Samsung overcomes USD shortage through Beni Suef plant exports

Samsung Electronics Egypt have overcome USD shortages through exports from the Beni Suef plant, VP Sherif Barakat told Al Mal. Barakat says Samsung believes the challenges facing the Egyptian market to be temporary and is reiterating its commitment to assembling here. Samsung are launching a series of 4G compatible devices in Egypt in December, he added.

Health + Education

PPP schools project to be tendered within two to three weeks -Education Minister

The Education Ministry will issue within two to three weeks a tender for a project that will see 200 schools built on a PPP basis, Minister El Helaly El Sherbiny told Al Borsa. The ministry has already received as many as 80 offers from local and Arab investors in the absence of the tender. BPE Partners was previously reported to be among those considering bidding for the PPP schools project. This first phase development of an estimated EGP 15 bn public-private partnership program aims to build schools targeting medium-income families with a total capacity of up to 60k classrooms by 2018.

Real Estate + Housing

Real estate developers halt sales until units are repriced

Real estate developers have stopped marketing and sales of their projects until prices are adjusted, Al Mal reported. The NUCA had asked developers to cover the cost of increased interest rates on installments, which rose by 3%. The added expense is driving developers to reprice their housing units, with added costs in building materials. Prices are expected to rise by 25%, according to an unnamed developer. Price increases will be paired with longer payment plans to allow the market to absorb the increases, said Coldwell Banker New Homes Chairman Mohamed Banany.


Oman Air mulling price increases to its tickets

Oman Air is considering increases the prices of tickets to Egypt following the float of the EGP, Al Shorouk reports.

Telecoms + ICT

NTRA to cover new roads at total cost of EGP 750 mn

The NTRA has put in place a strategy to extend mobile services coverage to all new roads under the national roads program at a total cost of EGP 750 mn, sources told Amwal Al Ghad. Mobile towers are built in conjunction with new roads, the sources added, hitting a 100% completion level by the time the roads are completed. The national roads project is currently 85% completed.

Banking + Finance

Emirates NBD to offer EGP 1 bn in SME finance in 2017

Emirates NBD-Egypt will offer EGP 1 bn in new financing to the SME sector in 2017, head of the newly formed SME unit Hani El Shamy told Al Borsa.

Target Investment Receives Asset Management License from EFSA

Target Investment and Portfolio Management has received approval from the Egyptian Financial Supervisory Authority (EFSA) for an asset management license, Al Borsa reports. The boutique investment bank says it expects to win its first mandate this month and is interested in running a real estate investment fund.

On Your Way Out

It’s been a great week of armchair Egyptologists: In under seven days, we’ve seen announcements from Spanish archeologists that they’ve found a tomb dating to 1075-664 BC in Luxor, complete with a mummy in “very good” condition (“The tomb was likely to have belonged to a nobleman, Amenrenef, who would have been a servant of the royal household,” The Guardian reports), while a separate team found a “royal boat tomb” dating to 1840 BC or so, around the time of Senwosret III (via Science Alert, with a couple of rather cool exterior photos)

The markets yesterday

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EGP / USD CBE market average: Buy 15.57 | Sell 16.31
EGP / USD at CIB: Buy 15.00 | Sell 15.95
EGP / USD at NBE: Buy 15.35 | Sell 15.75

EGX30 (Sunday): 10,916.97 (+2.14%)
Turnover: EGP 1.964 bn mn (351% above the 90-day average)
EGX 30 year-to-date: +55.82%


IMF Approves Egypt’s Loan: Rejoice for today, Hard-work for tomorrow

The IMF board approved on Friday the long-awaited USD 12 bn support programme for Egypt; net international reserves are expected to reach c. USD 26 bn before year end, which would be enough to cover 5.6 months of imports. The programme targets reducing primary expenditure by 3.5% of GDP through subsidy cuts and public wage growth control. Meanwhile, the IMF reassured that social programs are projected to gain around 1% of GDP out of the achieved fiscal savings. Consequently, the public debt is expected to decline by 10% of GDP by the end of the three-year program.

We believe that such a positive vote of confidence and with the upcoming influx of foreign aid noted above will ease the current obsession about the EGP/USD intraday and daily fluctuations. However, while the IMF ‘seal of approval’ will help Egypt unlock much needed foreign inflows, it is still within the hands of the government to revive the country’s economy. The exchange rate is a reflection of the country’s macroeconomic stature. In that context, we advise our clients to keep an eye on near-future developments with regards to the budget deficit, the new investment law and the ease of doing business tourism revival, and export incentivizing schemes. Our argument stands on the fact that steering the economy to stability depends on the efforts of the finance, investment, tourism and industry ministries, then the exchange rate will follow. Tap here to read the full research note.


WTI: USD 43.31 (-0.23%)
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14-16 November (Monday-Wednesday): Bank of America Merrill Lynch MENA 2016 Conference, The Ritz Carlton, Dubai International Financial Centre, Dubai.

15 November (Tuesday): Egypt Trade & Export Finance Conference 2016, Fairmont Nile City, Cairo

15 November (Tuesday): Egypt Mega Projects Conference, Four Seasons, Cairo

17 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee meets to review rates.

18-20 November (Friday-Sunday): 4th Africa-Arab Summit in Malabo, Equatorial Guinea.

21-22 November (Monday-Tuesday): President Abdel Fattah El Sisi visits Portugal.

22 November (Tuesday): Industrial Development Authority cement auction (unconfirmed report)

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.

30 November (Wednesday): OPEC’s 171st ordinary meeting, Vienna, Austria.

November (TBD): Delegation of German companies in the renewable energy sector due to visit to discuss investment opportunities.

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.

09-11 December (Friday-Sunday): RiseUp Summit, Downtown Cairo.

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.

January: Jordanian trade delegation to visit. Date TBD.

14-16 February 2017 (Tuesday-Thursday): Egypt Petroleum Show 2017 (EGYPS), CIEC, Cairo

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