Sunday, 27 November 2016

Egypt is now a global upside story

TL;DR

What We’re Tracking Today

A random observation before we get underway this morning: It’s the last week of November, ladies and gentlemen. Where did 2016 go? At least we can all enjoy the cooler weather and, it seems, a national holiday on Monday, 12 December in observance of the Prophet Muhammad’s Birthday.

Why are we feeling more optimistic than usual heading into the last month of the year? Egypt is now a global upside story: For the first time in six years, Citigroup is selling structured notes tied to Egypt’s sovereign debt, Bloomberg reported. Citigroup is selling EGP 305 mn of one-year zero-coupon securities at 85% of the face value tied to Egypt and plans to sell EGP 273 mn more next Friday. “Investors view Egypt as an upside story … We have seen the re-emergence of demand for fixed income in Egypt. Pre-devaluation the currency was in disequilibrium making investors cautious,” Elbek Muslimov, CEEMEA head of emerging market credit trading at Citigroup says.

Bilal Khan, senior economist for Middle East, North Africa and Pakistan at Standard Chartered, agrees: “This might be a turning point for Egypt … Currency depreciation, subsidy cuts and rationalization of energy prices as well as approval from the IMF have come together for investors to look at Egyptian bonds with renewed enthusiasm.” Emre Akcakmak, portfolio advisor at East Capital, tempers expectations a bit saying, “Things may well move in a completely wrong direction depending on various internal or external factors.” However, he believes, “Egypt seems to be doing the right things so far so let us not forget that a good start is half the battle.”

A little less sanguine is Simon Williams, HSBC’s chief economist for CEEMEA, who says “that rebalancing process is going to be really really difficult … the weakening of the currency … is not going to bring in an early recovery … the pain is going to be carried by domestic demand.” (He’s quite likely right, of course, but tell that to the hordes that descended on Cairo Festival City to rip it apart in search of Black Friday deals this past weekend.) Williams’ comments on Egypt can be found here from 02:45 to 04:55.

The AmCham Egypt Real Estate Committee is hosting the conference “Sustaining the Real Estate Industry in Egypt” this morning, featuring Finance Minister Amr El Garhy and Housing Minister Mostafa Madbouli.

The 2016 edition of tech gathering Cairo ICT gets underway today, with President Abdelfattah El Sisi set to give the opening speech for the second consecutive year.

A delegation including 12 members of the House of Representatives is reportedly heading to London today for talks with UK parliamentarians about the evils of political Islam.

What We’re Tracking This Week

Hopes for a production cut just took a hit: OPEC meets on Wednesday, 30 November in Vienna, but Bloomberg notes that “Saudi Arabia pulled out of planned talks with non-OPEC nations including Russia as disagreements about how to share the burden of supply cuts stood in the way of a deal to boost prices.”

Citi’s Global Consumer Conference takes place on Tuesday and Wednesday in London.

A Russian delegation will visit Egypt this week to finalize all outstanding issues and sign the contract for the Dabaa nuclear power plant with Egypt’s Electricity Ministry.

Brokerage league tables for 11M2016 will be out on Thursday, 1 December.

Also Thursday: It’s 1 December, Consumer Protection Authority chief Atef Yacoub’s “buy nothing” day.

On The Horizon

The Emirates NBD Egypt PMI by Markit will be out on Monday, 5 December 2016.

The Central Bank of Egypt’s Monetary Policy Committee will hold its last meeting of 2016 on Thursday, 29 December.

Enterprise+: Last Night’s Talk Shows

Amr Adib said businesses opening in the Suez Canal Development Axis should be tax-exempt, he said, otherwise “[foreign investors] will not come; they will go to zero-tax Ras Al Khaimah” (watch, runtime: 0:55).

Adib was amazed by consumer appetite for Black Friday discounts, saying, “Egyptians love shopping … yet somehow all these people are eligible for the food subsidies system?” (watch, runtime: 3:27).

The ONTV host also called on the Ismail government to take diplomatic action against Qatar after Al Jazeera aired a report criticizing military conscription in Egypt (watch, runtime: 3:54). Adib then mockingly compared the Egyptian and Qatari armies.

Over on CBC, Lamees Al Hadidy focused on problems with the low-income housing program, noting that there are persistent complaints that monthly installments for homebuyers are too high. Mortgage Finance Fund director Mai Abdel Hamid called in to explain that anyone who can’t afford a subsidized mortgage can apply for a subsidized rental (watch, runtime: 27:46).

Lamees then showcased a report on the one-day shopping ban that Consumer Protection Agency head Atef Yacoub has called for 1 December (watch, runtime: 1:54), followed by a special coverage of the Special Forces (watch, runtime: 1:01). Her weekly debate segment closed the show, with discussion focusing on Black Friday, the press syndicate sentences, and the Nubian protests (watch, runtime: 29:39). On the latter point, Prime Minister Sherif Ismail reportedly said on Thursday that the government will allocate an additional EGP 270 mn towards development projects in Nubian communities, Al Mal reports.

Al Hayah Al Youm’s Lobna Asal interviewed the head of the Supply Ministry’s Nile Consumer Complexes Company Adel El-Khatib, who blamed rice shortages on traders withholding supplies to the Food Industries Holding Company. Producers are demanding EGP 400 per ton more than the EGP 2,400 budgeted by the ministry, which is importing rice from India to bridge the supply gap (watch, runtime: 3:27).

He’s back and we apologize, but Ahmed Mousa aired what he claims was security camera footage that shows the confessed murderer of Abu Dhabi Islamic Bank head Nevine Loutfy breaking into her house (watch: running time: 5:33). Soruces closed to the murder investigation had previously reported that security cameras had been cut prior to the incident. We also not that the video was blurred — and that Mousa is notorious for airing fake content, most famously this clip from a videogame, which he claimed was actual targeting cams of Russian bombers.

Speed Round

Speed Round is presented in association with

BP has reached an agreement with Eni to buy a 10% interest in the Shorouk offshore concession containing the Zohr gas field for USD 375 mn, BP said in a statement. BP also has the option to acquire a further 5% before the end of 2017 under the same terms. On closing, BP will reimburse Eni USD 150 mn for share of past expenditures, Reuters reported. “This interest in a truly world-scale asset will complement our existing Egyptian business. We already have a strong partnership with Eni in Egypt and look forward to working closely with them to efficiently bring these important resources to the Egyptian market,” BP CEO Bob Dudley said. The purchase is subject to regulatory approval in Egypt, and is expected to be completed in 2Q2017. BP will be subject to the same development agreement that Eni is under, unnamed sources told Al Shorouk. Sources at the Oil Ministry said drilling operations will be unaffected by the agreement and proceed as normal, Amwal Al Ghad reported. The story is the lead piece on Egypt in the international business press this morning.

In other energy news, there were no discussions with Saudi Arabia over the agreement with Aramco, Oil Minister Tarek El Molla told Al Masry Al Youm. He says Egypt’s energy requirements will be fulfilled from the international market “as was the case in the past two months.” El Molla also noted that the government has not yet set the amount it is going to pay IOCs, but it will make a payment “soon” following talks with the CBE and Finance Ministry.

Importers of essential goods including wheat and medicine face FX losses in the USD 6-7 bn range, per remarks by Alaa Ezz, secretary-general of the Federation of Egyptian Chambers of Commerce, speaking with Reuters’ Eric Knecht and Maha El Dahan. The story follows centers on a meeting of about 50 commodity importers who met last week in a Cairo hotel, where they drafted “a letter to Prime Minister Sherif Ismail, a plea to help cover losses they say are tied to USD requests they made months before the float but that were held up by banks.”

Yields on 12-month treasury bills rose to 18% from 17.6% during last Thursday’s CBE bond sale, Al Borsa reports. Six -month bonds also rose to 18.2% from 17.7%, Reuters adds.

Former Investment Minister Ashraf Salman announced that he is forming a private equity outfit to be named Aur Capital, Al Borsa reports. The consumer-focused GP will launch in December and will focus on investments in real estate, health, education and food, said Salman. Notable investors at the GP level CityStars’ Abdul Rahman Al Sharbatly and the Egyptian Gulf Bank (EGBank). Salman made the announcement at the launch of real estate developer ARCO’s EGP 800 mn Lagoon North Coast project. Salman, who is ARCO’s vice chairman and MD, said real estate prices have risen 20-30% since the float of the EGP, adding that he expects the sector to grow 25% in five years, according to the newspaper.

Also speaking at the launch was ARCO CEO Ayman Ibrahim, who said that the company is investing EGP 32 bn in multiple projects over the coming five years, Al Mal reports. The company has begun marketing the EGP 1.5 bn first phase of its Lavande development in Six of October, he added. ARCO has also hotel management agreements that will see Fairmont, Swissotel and Raffles manage properties at its North Coast community, Al Borsa reported.

Sawiris-EGX war intensifies? Beltone Financial filed another complaint against the EGX with the Egyptian Financial Supervisory Authority on Thursday after the EGX continued to suspend trading on its shares and required brokerages buying into the 7% sale of Beltone shares last week to deposit in escrow 25% of the amount they wished to purchase, Al Borsa reports. Beltone denounced the “EGX’s misuse of its authority in attempting to set a price for the stock” in the complaint, alleging the regulator’s actions were torpedoing the transaction.

Sources at the Electricity Ministry said 10 international financial institutions have agreed to finance phase two of the feed-in tariff projects, after clauses that allow for international arbitration were approved, according to Al Borsa. The sources say the financiers include the EBRD, the IFC, EIB, and Germany’s KFW. International financiers had withdrawn from phase one over the exclusion of international arbitration clauses. None of the institutions mentioned have confirmed the news.

Eight out of ten families use the ration card program according to the latest poll by the Egyptian Center for Public Opinion Research (Baseera). What’s perhaps more alarming is that 77% of higher income earners, or the top 12% of earners, polled by Baseera reported that they use ration cards. Oddly enough: 31% of respondents say they support being taken off of the subsidy smart card system. As we noted last week, the Ismail government has developed a list of criteria it will use to strike as many as 10 mn beneficiaries from welfare rolls.

Baseera also noted that 73% of survey takers say they support Consumer Protection Agency head Atef Yacoub’s calls for a moratorium on shopping on 1 December, thinking that it will help curb prices.

Because we love both strawberries and exports: The season for Egyptian strawberries has started, according to Fresh Plaza. The season started “slightly earlier than last year, and expectations are very positive … There is some supply from Jordan and Morocco, but this is minimal. Besides, production in Belgium and the Netherlands is low at the moment. This means a good start for Egypt,” says Alain Tulpin from Tulpin Group, which “has taken care of air freight of especially Egyptian strawberries to the UK for years already.” Tulpin says Egyptian strawberries remain pricey, but expects them to have a good season compared to last year.

MOVES- The Export Development Bank of Egypt announced it appointed Mervat Zohdi El Sayed as its new Chairperson for a period of three years, according to a bourse disclosure.

Abraaj-backed Careem launches water taxi service, said to be eyeing USD 300 mn investment: Careem could be saving us all from hours of Cairo’s brutal traffic with its new water taxi service, which launches today. The service will cost a fixed EGP 100 and will be available at five ports around the crowded capital, including Maadi (TGI Friday’s and the Platform), Zamalek (across from McDonald’s on Aboul Feda St.), and Giza (Royal Mohammad Ali Club, Nile Towers). The company’s executive director, Wael El Fakharany, tells Al Mal that the plan has been in the works since last year. The news comes as the company, backed by emerging markets private equity giant the Abraaj Group, is said to be “close to raising about USD 300 mn,” Bloomberg reported on Thursday, citing two unnamed sources “with knowledge of the matter.” In addition to Abraaj, Careem has landed investment from Saudi Telecom’s venture capital arm, Dubai-based Wamda Capital and KSA’s Al Tayyar Travel. Bloomberg says Careem is “working with Credit Suisse Group AG to raise as much as USD 500 mn.

The Middle East’s first unicorn could be up for grabs: Amazon is in talks to buy Souq.com for a reported USD 1 bn, Bloomberg says. “Seattle-based Amazon is considering a bid for all of the site, which had initially planned to sell a stake of at least 30 percent, the people said, asking not to be identified as the information is private. No final agreements have been reached and negotiations could still falter, the people said.” Goldman Sachs is advising Souq.com, sources told Bloomberg.

Cuba’s Fidel Castro passed away at age 90 yesterday, sending Cuba into mourning for nine days and prompting a cloud of mixed emotions. “For those who loved him, he was the greatest … for those who hated him, there was no one worse,” Graciela Martinez in Havana told the New York Times. President Abdelfattah El Sisi offered condolences in a message to Cuban President Raúl Castro.

Spotlight

Spotlight On automotive directive and its executive regulations

Today, we’re featuring copies of the automotive directive legislation and its executive regulations. The legislation, which aims to give incentives to the local auto industry to go further up the value chain into manufacturing, is currently being deliberated in the House of Representatives, where it was introduced in late October. Meanwhile, The Engineering Industries Division of the Federation of Egyptian Industries (FEI) has completed drafting its proposed executive regulations for the automotive directive in cooperation with the Egyptian Automotive Manufacturer’s Association, the Egyptian Auto Feeders Association, and officials from the Trade and Industry Ministry. These have been sent to the ministry for review with an eye towards adopting them when the automotive directive is voted on in Parliament, said the head of the division’s transportation department, Wael Ammar.

The FEI’s transportation division met with Egypt’s auto manufacturers to run the regs by them. GB Auto and General Motors have both come out in favor of the proposed document. Bavaria Group and Fiat Chrysler raised objections to the gradual increases in the domestic components mandated by the regs, while Nissan Egypt has reportedly requested amendments, sources tell Al Borsa. Based on a copy of the automotive directive that ran in El Watan and a poorly written article on the regs by Al Borsa (which does very little in explaining the nuances of the legislation), key features of the law include:

Incentives: Companies that meet minimum requirements domestic content, production, and exports set out by the regs will receive a payout for every car sold from an auto industry fund. For passenger cars, companies can expect a payout worth 23.1%-57.5% of the sales price of the car (which must include production costs and taxes), varying by engine size. A break on customs duties for imported parts will be proportional to the percentage of domestic components used to assemble the vehicle.

New taxes and Customs: The law sets import tariffs on cars at 10%. The law will also impose an “auto industry development tax.” This will be 30% on cars with engines below 1600cc; 100% on cars with engines between 1600cc and 2000cc; 135% on passenger cars above 2000cc; 30% on microbuses; and 10-20% on trucks. It is not yet clear whether this tax will replace the sales tax and how it will impact the 10% schedule tax imposed on the industry under the value-added tax.

Auto Industry Development Fund: The automotive directive would see the establishment of a fund administered by the Industrial Development Authority and deposited with the central bank which will pay-out the benefits and incentives for the industry. The Finance Ministry will deposit all taxes from the industry into this fund.

Domestic component: To be considered manufactured in Egypt, a passenger car will need to include 45.5% domestic content in the first year, rising over time to 60% after eight years. A government body will be selected to verify this condition is met.

Production requirement: Companies producing cars with engines 1.6L or smaller must produce 20,000 cars in the first year of the directive and increase that to 60,000 after eight years to benefit from the incentives outlined by the regs. Those producing cars with larger engines must produce at least 3,000 units in year one, and 8,000 cars annually within eight years. Production quotes for medium and heavy trucks will be 20,000 in the first year with a gradual increase to 50,000 in eight years.

Export requirement: The regulations would also set export requirements to be verified by the Customs Authority, but the coverage we’ve read so far is sufficiently unclear that we’re not summarizing the requirements here. We’ll come back to this bit later in the week.

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Egypt in the News

It was a relatively busy weekend for Egypt in the Western press, though it has since slowed enough that the lead story is that we’re apparently sending helicopters to Israel to help fight a rash of fires (Jordan is too, report the Times of Israel and the Jerusalem Post). On the business front, Eni’s sale of a 10% stake in Zohr to BP for USD 375 mn is the biggest business news of the past week, so far as the international press is concerned, earning coverage in the Financial Times and the Wall Street Journal, among others. Meanwhile, the murder of ADIB Egypt CEO Nevine Loutfy is making headlines in the GCC.

The Washington Post’s editorial board can barely keep the crazy contained in its latest screed on President Abdel Fattah El Sisi, this time around criticizing the IMF and the Obama administration for its “far-fetched bet [on a USD 12 bn bailout package] given Mr. Sissi’s economic illiteracy, the vast corruption embedded in his regime and the military, and Egypt’s history of popular uprisings against austerity measures.”

The Economist, by comparison, keeps the snark largely in check as it takes note of our deteriorating relationship with Saudi Arabia.

The Wall Street Journal, meanwhile, is showing Egypt a bit of extra love, noting in its weekly frontier markets column that, “Egypt continues to impress frontier-focused analysts. In a note this week, Renaissance Capital’s chief economist Charlie Robertson listed the country as one of his top picks for next year because, among other things, US President-elect Donald Trump “likes the country’s president,” Abdel Fattah el-Sisi. Robertson also pointed out that Egypt’s currency is currently undervalued, the IMF is supporting its reform efforts and it could well get a credit rating upgrade sometime in 2017. RenCap also expects Romania and Estonia to be upgraded next year, and Kuwait to suffer a downgrade.”

The NGO bill in parliament currently “is so restrictive, it effectively bans human rights work and makes it harder for charities to operate,” Ahmed Aboul Enein writes for Reuters, citing activists. "It is just easier for the government and for us to issue a law banning NGOs instead of beating around the bush with this bill," said Mohamed Zaree, Egypt program director at the Cairo Institute for Human Rights Studies.

Also getting wide pickup over the weekend is a piece by the Associated Press’ always-on-point Hamza Hendawi headlined “For an Egyptian author, examining torture is her mission,” profiling psychiatrist-turned-author Basma Abdel-Aziz.

Enough with the Daily Mail. We’ll quote the headline only: “Revealed: Egypt, Mexico and the Dominican Republic are the top three destinations for winter holiday illness claims; More than a quarter of all winter holiday illness cases originate in Egypt.”

Worth Watching

Base-jumping not exciting enough? Redbull’s Games of Strange reveals some of the more bizarre and frankly scariest acrobatic sports being played by people on the wrong side of the gate to the insane asylum. The episode begins with a contact sport played by Japanese naval cadets where the only goal apparently is to beat each other up until one person stands at the top of a pole. Casually moving on to acrobatic bullfighting in Spain (what is their obsession with that beast?), the episode (runtime: 25:25) then hits “a half-frozen race that could only be conceived of in Canada.”

Diplomacy + Foreign Trade

News flash: We’re still not pals with Qatar. Amid our ongoing (and still rather mysterious) falling out with Saudi Arabia, it’s easy to forget that we’re still on the outs with Qatar. Into the breach rides Qatari Foreign Minister Mohammed bin Abdulrahman al-Thani, who Reuters says, “hit out at Egypt, normally a close Gulf Arab ally, for appearing to side with Assad…
‘For us unfortunately Egypt is supporting the [Assad] regime … We hope that they come back and be with us,’ he said. Support for Assad was the same as supporting terrorism, he said, ‘because he is a terrorist and he is on equal footing with Daesh.’” Al-Thani also promised that the statelet would continue to arm rebels in Syria even if the coming Trump administration were to pull back.

Egypt’s peace with Israel “could be ‘warmer’ and ‘reach the street level’ in Egypt were Israel able to conclude a peace deal with the Palestinians,” Egyptian Ambassador to Israel Hazem Khairat said in a rare public comment. The comments came at The Jerusalem Post’s annual diplomatic conference. Khairat says he is often asked with the peace agreement between the two countries has not filtered down to the Egyptian people. “My answer is that this peace can certainly be warm, and reach more people, if we can solve the Israeli-Palestinian conflict through a just and comprehensive peace,” Khairat said. “A viable two-state solution is the only way this conflict can be brought to an end, and it is still available and possible.”

The Egyptian embassy in Somalia announced plans to reopen schools in the war-torn nation. Africa Review says “the Egyptian schools had vanished when the Somali government collapsed in 1991 as looters vandalised most of the state and foreign-owned institutions. Mogadishu Radio reported that the schools would teach the Egyptian curriculum, with the exception of Somali history and geography.” The schools are set to provide education free of charge.

Talks with France for energy finance: Egypt is in talks with the French Development Agency (AFD) to extend EUR 150 mn to finance the government’s energy projects, International Cooperation Minister Sahar Nasr told Al Borsa. Nasr noted that AFD has extended Egypt around EUR 1.6 bn, of which a “large amount” are grants.

Meeting with Norwegian FM: President Abdelfattah El Sisi and Foreign Minister Sameh Shoukry met with Norwegian Foreign Minister Børge Brende and Oslo’s Ambassador in Cairo Sten Arne, Saturday, to discuss economic cooperation as well as regional and global issues.

Energy

Oil Ministry will announce exploration tender winners this week

The EGPC will announce winning bids for oil and natural gas exploration tenders at 11 concessions this week, EGPC Chairman Tarek El Hadidi told Al Borsa. The areas include five blocks in the Gulf of Suez and six in the Western Desert; Shell, BP, and Apache are all said to be bidding.

Vega Petroleum begin production tests from Gabal El Zeit discovery

Vega Petroleum have achieved a 1,000 bbl/d of oil and 1 mcf/d of natural gas production rate from production tests at the East Gabal El Zeit area in the Gulf of Suez, a Ganoub El Wadi Petroleum Company report said, Al Borsa reported. Initial reserve estimates are around 250 mn bbl with production rates expected to climb to 3k bbl/d when drilling is completed, the report adds.

NREA will issue tender for 250 MW wind farm in mid-2017

The New and Renewable Energy Authority is issuing in mid-2017 a tender to build a EUR 345 mn, 250 MW wind farm, NREA chief Mohamed El Sobky told Al Borsa.

Manufacturing

Russian industrial zone set to grow?

Egypt is ready to expand Russia’s industrial zone in Port Said to 2,000 hectares from 80 hectares, Russia’s Industry and Trade Minister Denis Manturov said, TASS reported.

Health + Education

House Health Committee to meet with pharma industry officials Tuesday

The House of Representatives’ Health Committee will hold a meeting on Tuesday with representatives of Egypt’s pharma industry to discuss the sector’s growing problems, Al Mal reports. A number of pharma manufacturers had threatened to exit the Egyptian market last week over ballooning production costs after the float of the EGP; the Ministry of Health is yet to allow them to reprice their products.

Armed Forces awards EGP 600 mn medical supplies tender next month

The Armed Forces will decide on the winning bid for an EGP 600 mn tender to supply medical supplies to Health Ministry hospitals next month, Al Borsa reported. The decision was originally scheduled for 26 October, but was postponed for a month. The Armed Forces previously awarded a German company a USD 337 mn tender for medical supplies.

Tourism

Russia needs Egypt to buy more airport security equipment to resume flights

Egypt needs to buy and install new security equipment, beyond what was recently installed, in order for Russia to resume flights to Egypt, a source at the Russian commercial attaché’s office told Al Mal. The source said this is why flights have not been resumed yet, despite previous announcements that the restriction would have been lifted before year end.

Automotive + Transportation

Electric railway project cost down to USD 730 mn

Negotiations with the Aviation Industry Corporation of China (AVIC) have reduced the cost of the electric railway project from USD 1.8 bn to USD 730 mn, Transport Minister Galal El Saeed told Al Shorouk.

Egyptian National Railways receives three bids to supply 700 train cars

Egyptian National Railways has received three bids to supply 700 air-conditioned train cars, ENR Chairman Medhat Shousha told Al Borsa. ENR is negotiating domestic content requirements and payment terms with the world-be suppliers, he added.

Banking + Finance

NBE, NBK raise overseas credit card limits, United Bank to raise credit card interest

The National Bank of Egypt has raised the limits on the overseas usage of bank-issued credit cards, Al Mal reports, as has National Bank of Kuwait – Egypt. The United Bank is said to be ready to raise interest rates on its credit cards as of December. The new rates (as well as the bank’s credit card caps) can be found in PDFs here.

Legislation + Policy

New law for restaurants, hotels under review by House

A new draft law proposal which seeks to expedite and set conditions for licensing restaurants, nightclubs and hotels in Egypt, is being reviewed by the House of Representatives, Al Ahram reports. The law will form a body which will issue permits within two weeks of receiving an application. The law also sets prison sentences of up to six months and fines of up to EGP 10,000 for violators for using the property for other than its officially licensed activity.

House yet to receive Food Safety Authority Act for Review

The House of Representatives’ Agriculture Committee has yet to receive the Food Safety Authority Act for review, committee chair Hassan Moussa tells Al Mal, despite previous reports to the contrary. Moussa said that law will ensure that food products delivered to consumers meet the required health and safety standards and will regulate means of transporting food in Egypt.

Egypt Politics + Economics

Gov’t to revise growth targets, El Araby says

The government is revising its economic targets for FY2016-17 following the float of the EGP and accompanying 300 bps rise in interest rates, Planning Minister Ashraf El Araby said, according to Al Mal. El Araby did not say what kind of revisions will take place, but noted that the moves, coupled with increases in energy prices would impact the government’s economic growth target of 5.2%.

Trade Ministry issues regulations for temporary industrial permits

Trade and Industry Minister Tarek Kabil has put out regulations for issuing temporary, one-year permits for unlicensed factories as part of the Supreme Investment Council’s 17 pro-investment policies, Al Mal reports. Kabil said that the Industrial Development Authority (IDA) permits will be issued within five days from the date of application. President Abdel Fattah El Sisi had instructed the government to hasten the implementation of the council’s policies in a meeting on Saturday. The was praised by Mohamed El Sewedy, head of the Federation of Egyptian Industries but criticized by the Deputy Head of the Egyptian Federation of Investors Associations for lack of clarity.

National Security

Daesh claim attack on North Sinai checkpoint

Daesh claimed an attack on an Armed Forces checkpoint on Friday in North Sinai that left 12 soldiers dead, Reuters reported. "An armed group of terrorist elements attacked a checkpoint in North Sinai on Thursday night using four-wheel-drives rigged with explosives," the military said in a statement. Another 12 soldiers were wounded and one was missing.

On Your Way Out

EgyptAir will start selling duty free products even if you’re not traveling through its airports, Al Mal said, but there’s a catch: You’ll have to pay the duties.

TV presenter Amr El Leithy has been banned from travel, Al Shorouk reported. El Leithy says he will appeal the decision and that he has not been informed of any court cases filed against him. El Leithy is the Al-Hayah host who aired the “tuk tuk preacherman” video.

Remember the flight of vintage biplanes that landed at the Pyramids earlier this month on one of the first legs of a Crete to Cape Town rally? They were detained in Ethiopia, but were told on Thursday they would be allowed to start flying again.

To borrow from the joke making the rounds of social media this weekend: What, you still have money? Apparently we do, at least when it comes to spending on retail. Shoppers abroad may have abandoned brick-and-mortar stores for “Black Friday” sales to shop online, but we still love to hold stuff in our hands before we buy. Such is our conclusion from having headed to Cairo Festival City on Friday on a non-Black-Friday errand, only to find 30 minute waits at 10:30am to get even to the first midan after turning into the complex from Road 90. One shopkeeper with whom we spoke yesterday — having fled on Friday — said of the crowd, with a big smile on his face, “It was unbelievable.”

The markets yesterday

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EGP / USD CBE market average: Buy 17.37 | Sell 17.80
EGP / USD at CIB: Buy 17.3 | Sell 17.75
EGP / USD at NBE: Buy 17.4 | Sell 17.75

EGX30 (Thursday): 11,353.11 (-1.71%)
Turnover: EGP 1.584 bn (264% above the 90-day average)
EGX 30 year-to-date: +62.04%

THE MARKET ON THURSDAY: The benchmark index closed 1.7% down. Heavyweight constituents including CIB, and Global Telecom pulled the index down as they fell by 2.5%, and 2.1% respectively. Only Ezz Steel and Heliopolis Housing ended in the green. On the downside, Thursday’s worst performing stocks included Arabia Investments, Amer Group, and Orascom Telecom Media and Technology. The market turnover was EGP 1.6 bn and local investors were the sole net sellers

Foreigners: Net long | EGP + 66.3 mn
Regional: Net long | EGP + 0.2 mn
Domestic: Net short | EGP – 66.5 mn

Retail: 74.2% of total trades | 76.7% of buyers | 71.8% of sellers
Institutions: 25.8% of total trades | 23.3% of buyers | 28.2% of sellers

Foreign: 12.8% of total | 14.9% of buyers | 10.7% of sellers
Regional: 7.2% of total | 7.2% of buyers | 7.2% of sellers
Domestic: 80.0% of total | 77.9% of buyers | 82.1 of sellers

WTI: USD 46.06 (-3.96%)
Brent: USD 47.24 (-3.59%)
Natural Gas (Nymex, futures prices) USD 3.07 MMBtu, (-0.45%, December 2016 contract)
Gold: USD 1,181.0 / troy ounce (-0.96%)<br
TASI: 6,796.8 (+0.0%) (YTD: -1.7%)
ADX: 4,273.0 (+0.3%) (YTD: -0.8%)
DFM: 3,324.1 (-0.8%) (YTD: +5.5%)
KSE Weighted Index: 368.6 (-0.3%) (YTD: -3.4%)
QE: 9,714.9 (-0.2%) (YTD: -6.9%)
MSM: Market Closed
BB: 1,186.2 (-0.1%) (YTD: -2.4%)

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Calendar

27 November (Sunday): AmCham’s Sustaining the Real Estate Industry in Egypt conference, The Four Seasons Nile Plaza Hotel, Cairo

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.

30 November (Wednesday): Industrial Development Authority cement auction (unconfirmed report)

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

03-05 December (Saturday-Monday): African Investments and Business Forum, Algiers, Algeria.

04-06 December (Sunday-Tuesday): Solar-Tec exhibition, Cairo International Convention Centre.

04-06 December (Sunday-Tuesday): Electricx exhibition, Cairo International Convention Centre.

05-06 December (Monday-Tuesday): Slovenian President and business delegation visit Egypt.

6 December (Tuesday): Building a Sustainable Future for Solar in Egypt event, Sonesta Hotel, Cairo.

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.

13 December (Tuesday): Business News’ Third Annual Egypt Automotive Summit, Semiramis InterContinental, Cairo.

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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