Is Tarek Amer opening the door to the repatriation of profits?

OPEC meets in Vienna today, and KSA is insisting that it’s not essential to curb output. A pact on production cuts is “dead on arrival” an op-ed carried by predicts CNBC, which writes elsewhere that pre-meeting talks in Vienna are going “surprisingly poorly,” a development that “could make oil prices crater.” Saudi Arabia stands on one side of the chasm, Reuters reports, while Iran and Iraq are on the other.

The Industrial Development Authority is scheduled to announced today the winners of its cement production license auction, Al Borsa reports. Six companies have presented just eight bids for 14 licenses. The auction was most recently postponed from October; bidding companies reportedly include El Sewedy Cement, China’s Jushi, the South Valley Cement Company, Misr Beni Suef Cement, and Royal El Menia for Cement.

Shoukry in DC for econ, regional security talks. Foreign Minister Sameh Shoukry left yesterday for Washington, DC, where he will speak with senior US officials and members of Congress on “Egyptian-American relations … and Egypt’s view on regional issues,” Ahram Online reports. Shoukry will also discuss the Ismail government’s economic reform program with US Secretary of State John Kerry, the Foreign Ministry said.

Trump appoints key econ roles in cabinet: Across the pond, US president-elect Donald Trump looks set to appoint former Goldman Sachs exec Steven Mnuchin as his treasury secretary and Wilbur Ross — an investor “known for cutting jobs and legacy costs to put mills back on their feet” — as secretary of commerce. CNBC has more on the appointments here and here.

Commander Cobra (aka Salafist Yasser Borhami) doesn’t want you to celebrate the Prophet’s Birthday. While some in the banking community have suggested to us that it may not be a national holiday after all, we can’t think of a better reason to take a day off with family and friends. “Celebrating the Prophet’s (PBUH) birthday is an abominable innovation prohibited in the Holy Quran,” Gulf News writes in a story on the micro-flap. (Why Commander Cobra, you ask? Compare the zabeeba here to the hood emblem here.)

Number of days the executive regulations for the value-added tax act are overdue: 52. That’s one month and 21 days.

New, revised deadline for the executive regulations for the value- added tax: Bokra, insha’Allah.

Thursday is Consumer Protection Chief Atef Yacoub’s so-called “buy nothing” day.

It’s the last gasp of 2016 conference season:

• The African Investments and Business Forum in Algiers, Algeria on 03-05 December.

• The Solar-Tec exhibition, Cairo International Convention Centre on 04-06 December.

• The Electricx exhibition, Cairo International Convention Centre on 04-06 December.
• Slovenian President and business delegation visit Egypt on 05-06 December.
• Building a Sustainable Future for Solar in Egypt event, Sonesta Hotel, Cairo on 06 December.
• Citi’s 2016 Global Healthcare Conference, London, UK on 07-08 December.

Yahduth fi Masr’s Sherif Amer hopped on the domestic and global media bandwagon to dissect the controversial new NGO Act, which received its final approval from the House of Representatives on Tuesday (more on that in the Speed Round). MP Mohamed Anwar Al Sadat told the host that the bill was rushed through without sufficient time for meaningful debate.

MP Mohamed Abu Hamed, a member of the House committee that drafted the bill, disputed that, saying that the committee met with charity outfits including Resala and the Food Bank and took their comments into consideration. Abu Hamed also denied that the law cap donations by any one individual to a single NGO at EGP 10,000, saying gifts of that size would be subject to state oversight. National Council for Human Rights head Hafez Abu Seda also joined the discussion, with opinion that the law is “bad” for NGOs in Egypt and that it limits their freedom of work. You can watch the full episode here (runtime: 48:56).

Meanwhile, Kol Youm’s Amr Adib spent a full 40 minutes talking about chicken. Specifically, the government’s decision to lift custom tariffs on poultry imports. Adib spoke to four local poultry producers who expressed their discontent with the decision, saying that they would rather the government lift tariffs on their bird feed and other production inputs “so that we can compete.” (watch, runtime: 9:05).

Poultry importers themselves were surprised by the customs break, poultry importer Alaa Radwan said. As is typical with ungrateful importers, Radwan said: “The government should have sat down with us to know our demands before surprising us, though.” How about just counting your blessings before your chicken come to roost? (Watch, runtime: 4:05)

A little late to the pharma is catastrophe party was Al Qahera Wel Nas’ Ibrahim Eissa, who asked how the government can take the floatation decision without studying its impact on the health sector, “this is a proof that the government takes decisions without knowing their impacts,” he said. (Watch: runtime: 34:44).

Lamees Al Hadidy was off last night.

Did the central bank just open the door for companies to repatriate profits? The banking sector has reportedly received verbal instructions from the CBE that they are now allowed to sell 50% of excess FCY to non-priority clients — including those wanting to repatriate profits. Bloomberg’s Ahmed Feteha and Ahmed Namatalla base their story of last night on conversations with six bankers; the story has yet to appear on Bloomberg’s website, but is running on terminal for those of you who are subscribers. Priority imports will continue to take precedent, the sources added. Banks were also reportedly told that they can also refinance temporary overdrafts with excess FCY, banking sources also reported to Al Mal.

In other CBE news, banks were instructed to ease conditions for approving mortgages to low-income borrowers and pensioners in a decision issued on Sunday. It went a step further and issued a set of requirements low-income borrowers must meet to be eligible for mortgage financing across the sector. The amendments also allow banks to issue insurance policies on properties, protect borrowers from being discriminated against based on their occupation, and allow the banks to finance 85% of a property’s price. Beyond making eligibility for loans easier, the move essentially unifies eligibility requirements across the sector.

Amr El Garhy may not want to raise taxes, but the House of Reps can’t wait to eat the rich. Members of parliament are in touch with their inner populists, as the House Budget Committee voted yesterday to raise the minimum income before which Egyptians are required to file an income tax return to EGP 14,400 from a current EGP 13,500. The committee is waiting to hear from the Finance Ministry on what this might do to the state budget, said committee member Yasser Omar, Al Borsa reports.

As for the wealthy? The committee would love to impose a progressive tax system capped at 25% on income above EGP 505k per year, but will probably hold back on making that official until it hears back from the ministry on what the decision may mean for the investment climate, Omar said, in a sign that cooler heads among the committee have prevailed. To hear Omar tell it, some members had called for a 30% wealth surtax on annual income north of EGP 1 mn. The government had scrapped the 5% wealth surtax last year. As we noted yesterday, The committee did approve amendments to the income tax law that mandate tax appeals committee be set up in all governorates, the newspaper reports. Finance Minister Amr El Garhy stated that stability in tax policy is more important than new taxes.

Pasta Regina looks to double exports to USD 40 mn per annum, remains bullish on domestic market: Contrary to a report in the domestic press earlier this week, popular Egyptian pasta maker Regina continues to invest in expansion. Kareem Abou Ghali, the company’s chief executive officer, tells us, "It’s true that like other manufacturers, we’ve been cautious about passing price increases on to the market during a time of high inflation. That said, the shift in the macro backdrop since the float of the EGP has really improved our view on prospects for the domestic market." While Abou Ghali declined to discuss specifics of the company’s investment plan for next year, he stressed that "we’re certainly not holding back: Our goal is invest in export capacity and double exports in the next 24 months. We’re currently exporting about 35% of production today, or USD 20 mn a year, and our target is to bring that to USD 40 mn annum over the coming two years. We see great potential in Africa, where Egypt’s interlocking trade agreements including COMESA really pave the way." Pasta Regina currently exports to more than 30 countries from its primary plant in Sadat City. Learn more about Pasta Regina on their website or check out their corporate documentary (runtime: 6:24).

Setting the record straight on Obourland’s IPO: Cheese maker Obourland’s upcoming IPO will offer 42.5% of the company’s shares to the market, or 85 mn shares out of 200 mn total shares, a source close to the transaction tells us. The institutional offering will encompass 70-80% of all shares offered. CI Capital is sole global coordinator and bookrunner, while Beltone Securities Brokerage is on as placement agent. Matouk Bassiouny is local counsel to the issuer, while Norton Rose Fulbright has the duty as international counsel. You can check out Obourland’s website here.

Another food IPO in the pipeline? Egypt Foods intends to list on the EGX in 1H2017 and Beltone Financial Holding has been selected to advise, said the firm’s Maged Shawky, according to Al Mal. Egypt Foods would join Edita, Juhayna, Domty and Obourland among the food producers with EGX listings if the transaction should go forward.

Cisco’s domestic subsidiary has made a USD 10 mn commitment to venture capital fund Algebra Capital, co-founder Khalid Ismail told Al Mal. Algebra will target Series A and B investments primarily in technology startups, he added, with a ticket size in the USD 500k to USD 2 mn range.

Global tourism institutions call on UK prime minister to allow tourists to return to Sharm: Two heavyweights in the global travel industry said in a statement that UK Prime Minister Theresa May needs to lift the British ban on UK-based airlines flying to Sharm El Sheikh. The World Travel and Tourism Council (WTTC) and the UN’s World Tourism Organization (UNWTO) say the travel advisory now in effect has devastated the economy, WTTC President David Scowsill and UNWTO Secretary General Taleb Rifai said in the joint statement. Egyptian authorities have taken significant measures to step up the level of security not only in the airport but in the surrounding area as well, the statement adds. These improvements now meet the safety standards as indicated by the UK Department for Transport, it reads.

The Ismail government is asking honorable citizens to get in touch with their inner snitches and rat-out fraudsters and others who have no right to a subsidy card. The initiative to purge welfare rolls of freeloaders (henceforth referred to in Enterprise as Kramers) in exchange for the waiving of fines kicks off tomorrow and runs through February, Supply Minister Mohamed Ali Elsheikh said, according to Al Shorouk. Among those who need to be booted from the list, the ministry says: The dead, anyone traveling outside the country for more than six months, people with more than one ration card, and anyone registered “by mistake.” The move comes as the Ismail government prepares to apply new eligibility requirements for welfare benefits and turns the cleanup of the smart card system over to the Armed Forces. The government aims to have a clean list of qualified beneficiaries by the end of the current fiscal year, Planning Minister Ashraf El-Araby said yesterday.

The Ismail cabinet signed off on the draft Labor Act and sent it to the Council of State (Maglis El Dowla) for review, according to Labor Minister Mohamed Saafan. As we noted last week, the bill would set conditions such as peaceful mediation before unions are allowed to strike, allow employers to set wages based on performances, and grant companies incentives for providing on-the-job training.

An Information Ministry by any other name? The divisive draft Media Act is reportedly now with the House of Representatives in its new and updated form, Al Masry Al Youm reports. The government appears to have divided the proposed law into bills: one regulating the profession and the other for media institutions. Together, they would protect journalists from arrest or state interference, guarantee freedom from censorship, and extend some measure of protection to sources. On the other hand, they establish a Supreme Media Council with widespread oversight power over the industry. The Council has the authority to ban the dissemination of foreign news for national security reasons (opening the prospect of direct censorship of newspapers and the internet) and can ban the publication of inflammatory news or news that might be detrimental to the “peace and stability” of the country.

The bill mandates that editors-in-chief must be card carrying members of the Press Syndicate and sets minimum capital requirements of EGP 3 mn for a daily newspaper and EGP 500k for news websites. Ownership of Egyptian media would be restricted to Egyptian nationals and citizens.

The law’s introduction comes at a contentious time in relation between the press and the state. Beyond the two-year sentences of senior leaders of the Press Syndicate, state-owned Al Ahram raised the price for all newspapers which use its printing presses 80% on Monday, Al Mal reports. The decision has caused an outcry among the heads of publishing houses including Al Shorouk. Meanwhile, Legal Affairs Minister Magdy Al Agaty came out against state-owned media bodies such as the State Information Service, saying that it along with the Egyptian Radio and Television Union (Maspero) will be reorganized and restructured under the new act, AMAY reports.

We would love to have tourists return in droves, but let’s not get too chummy with the khawaget, eh? Such is the message this morning from both the House of Representatives and an arm of the Ismail government.

Speak not to the dastardly foreigners… The Interior Ministry is warning on its Facebook page that answering poll questions from foreign media — which it says has been calling citizens of late — is a threat to national security. “The ministry calls on citizens to be cautious around those twisted methods of gathering information about the situation inside the country that aim to harm Egyptian national security.” The story, naturally enough, has been widely picked up by the international press.

…and take not their money: The House of Representatives has approved the controversial new NGO law and the bill and has sent the bill to Ittihadiya for it to be signed into law, AFP’s Arabic-language service reports. While the House majority voted in favor of the law, there are critics, in and out of parliament, who believe the decision was hasty. The law has been condemned by Human Rights Watch. The story is dominating headlines about Egypt this morning, with Reuters’ take a moderate one: “Human rights groups and activists say [the law] effectively bans their work and makes it harder for charities to operate. The bill restricts NGO activity to developmental and social work and introduces jail terms of up to five years for non- compliance. It bans NGOs from conducting fieldwork or polls without permission or ‘from cooperating in any way with any international body without the necessary approval’. Human rights groups say that includes the United Nations.” Ahram Online’s Gamal Essam El Din has more.

The government is expecting GDP growth in the current fiscal year to reach 4%, falling short of the original pre-float target of 5.2% target for FY2016-17, Finance Minister El Garhy said at a conference on Tuesday. Projected tax revenues will also fall short of expectations, rising only 0.5%-0.6% this year because the value-added tax (VAT) was imposed later than planned. El Garhy is hopeful that tax revenue will rise from 12.7% of GDP to 17-18% within three years, Al Mal reported. After previously blaming it on tourism, Planning Minister Ashraf El Araby said yesterday that the Ismail government’s reform agenda played a role in slower-than-expected growth. The government will revise its targets, but is still aiming to keep the budget deficit target at below 10% of GDP, El Araby told Al Borsa.

Speaking on the EGP 5 bn Amlak sovereign wealth fund, interest from the GCC appears to have piqued, El Araby says, particularly from the UAE, Kuwait, and Saudi, with whom negotiations have already begun. We’re taking that last bit with a grain of salt: We can see UAE interest, but rather doubt there’s much KSA interest in investing in or alongside an Egyptian SWF vehicle given the present state of relations.

Arab Human Development Report for 2016 is out, and, as usual, it’s grim. We’re collectively about 5% of the world’s population, the UN-sponsored document tells us, but the Arab world is also home to 45% of all global terror attacks, more than 50% of the world’s refugees, nearly 50% of the world’s internally displaced persons, nearly 70% of the world’s annual battle deaths and nearly one of every five conflicts to have taken place since 1948. And that’s just through 2014, the report says. Setting aside Libya, more than 50% of people across the region (and as high as 88% of Egyptians and Tunisians) say the most important challenge facing their country is “the economic situation (poverty, unemployment and price increases). The Arab world is one of the most urban-centric in the world, and the informal economy continues to absorb the largest number of new labor market entrants each year. We would go on, but that litany has already threatened to ruin our morning. You can hit the landing page for the report, view the report in its entirety (pdf), or read the executive summary (pdf.)

The Economist got an advance copy and has a piece out based on the report suggesting the end of the world is nigh: “Another Arab awakening is looming, warns a UN report.”

Sometimes, what’s good for America really is good for the world: The US economy grew faster than previously thought in the third quarter of the year, with GDP growth clicking in at annualized 3.2% against an initial reading of 2.9%, the Financial Times (paywall) reports. The figure “underscores a brightening American economy after a disappointing start to 2016,” the newspaper writes. Consumption, exports and government spending all drove growth higher than 0.8% in the first quarter and 1.4% in the second quarter, encouraging those who expect the US Federal Reserve to raise interest rates in December.

In other good economic news from across the pond, “Home prices set a record in September, bringing to a close the worst period for the housing market since the Great Depression and stoking optimism for a more sustainable expansion” as they recovered all of the ground lost during the housing bust, the Wall Street Journal (paywall) reports. Also up in America: Corporate earnings. “The Commerce Department on Tuesday reported that a key measure of business earnings—profits after tax without inventory valuation and capital consumption adjustments—rose 3.5% from the second quarter, its third straight quarterly increase,” the Journal notes.

But don’t get your hopes up just yet, says Fitch, which continues to atone for its sins in the run-up to the Great Recession by playing Chicken Little at every opportunity. In a statement yesterday, the ratings agency warned that “The surge in populism and anti-establishment sentiment witnessed in the Brexit vote and Donald Trump’s victory in the US presidential election seem likely to push structural policies in the direction of economic nationalism, entailing a reduction in trade openness and international labour migration.” The one ray of sunshine: “Economic recovery in the largest EM countries should gain momentum in 2017 as crises in Brazil and Russia ease.”

The House of Representatives’ passing yesterday of an NGO law widely described as “repressive” is the story of the day about Egypt. Reuters and the Associated Press are driving coverage, with Bloomberg picking up Maggie Michael’s piece for the AP: “The Egyptian parliament on Tuesday approved a new law regulating non-governmental organizations that gives security agencies extensive power over the financing and activities of NGOs and rights groups. Rights organizations condemned the law as one of Egypt’s most repressive ever on civil society.”

Elsewhere: Egypt is getting plenty of ink in the New York Times this morning. Nour Youssef files “Al Jazeera Film Critical of Egyptian Army Strains Egypt-Qatar Ties Further,” looking at the flap over the documentary Al ‘Asaker (The Soldiers), set in the context of the never-ending feud between Egypt and Qatar.

Also in the Times, Diaa Hadid finds her family of once-liberal moderates are now religiously conservative in “Remembering My Mother’s Alexandria.” We don’t share Hadid’s pessimistic outlook on the Egyptian economy, but sympathize with her poignant portrait of the decline of the nation’s second city: “My mother spoke French with her Greek neighbors in Alexandria, at the time Egypt’s most cosmopolitan city. She skipped Catholic school to ride in a red convertible with a German girlfriend down broad boulevards. … I returned this fall to a very different Alexandria, one as insular as my mother’s was open. … In a city once famed for its European-style liberalism, the Muslim Brotherhood became a powerful force. The ultraconservative Salafi movement built its base.” (And while you’re on the Times’ website, check out Hadid’s excellent portrait of her hajj this past year.)

What happened to the naira vs. what’s going on with the EGP: Meanwhile, the African business press is looking at our float and Nigeria’s managed devaluation and wondering: Why was the Central Bank of Egypt’s move so much more credible than what happened on the other coast? Kenyan central bank officials intervened in currency markets again after floating. This piece from pan-African site AFK Insider is a good starting point.

Former deputy Prime Minister and Al Shorouk columnist Ziad Bahaa El Din says it’s nonsensical to pass a new NGO law that will restrict domestic funding while the government is trying to implement a “safety net” for lower income brackets. The state simply cannot operate at the same grassroots level as NGOs, he says. If the purpose of the draft is to maintain national security, it should regulate NGOs receiving foreign funding and not go as far as clamp down on the thousands of organizations that can in no way affect national security or social stability.

Most bizarre talk show call-in ever: Your representatives in the legislative branch of government set the bar for dissembling by public officials at a new low on Monday. We’ve always said the only thing worse than having no parliament is having a parliament, and offer this as our latest exhibit: MP Rashed Abou Al Eyoun called in to Moataz El Damerdash’s talk show on Mehwar TV (runtime: 5:45). At least that’s what El Demerdash thought — until a journalist called in to point out that the speaker was in fact the MP’s brother pretending to be him. When confronted by the shocked talk show host, the brother immediately handed the phone to the MP, who spent the rest of his time denying that anyone else had been speaking (despite the audible difference in the brothers’ voices).

Gov’t appeals Tiran, Sanafir ruling: Saudi Arabia may not be our BFF at the moment, but the Ismail government is nevertheless appealing a court verdict overturning the transfer of the strategic islands of Tiran and Sanafir to Saudi Arabia.

President Abdel Fattah El Sisi met yesterday with his Eritrean counterpart, Isaias Afwerki, who is on a three-day visit to Cairo, Al Shorouk reported.

Egypt’s refineries are working at less than 80% of their capacity, Oil Minister Tarek El Molla told Al Borsa. The refineries have an annual capacity of 33 mn tonnes, but only process 26.3 mn tonnes, including 3.4 mn tonnes of Kuwaiti crude, he said.

Nine suppliers made offers on state-owned wheat buyer GASC’s latest tender for wheat, traders told Reuters. It’s the first tender since the Ismail government issued a decree mandating that the General Organization for Export and Import Control be in charge of inspecting wheat imports rather than the quarantine service.

Having already moved to lift tariffs on imported poultry until May 2017, the Ismail government is now looking to import about 51k tons of chicken in a bid to increase market supply and tamp-down inflation.

Japan Tobacco International looks set to invest USD 40 mn to upgrade two factories in Menoufiya in 2017, Chairman Ayman Abbasi told Al Mal.

Tatweer Misr raised prices of its Il Monte Galala and Fouka Bay projects by 20% to mitigate construction cost increases following the EGP float, CEO Ahmed Shalaby said, according to Al Borsa reported.

Tech park operator Silicon Waha have signed agreements with China’s ZTE and SICO Technology on the sidelines of the Cairo ICT 2017 conference, Al Shorouk reported. The agreement with ZTE entails building a peripheral communications devices (routers, modems) factory at the Borg El Arab technology zone that will produce one mn units in its first year and use up to 60% domestic components. The agreement with SICO technology includes building a factory in New Assiut to manufacture smartphones, tablets, and GPS devices, Al Shorouk reported.

The number of Egyptians using mobile payment services shot up 60% year-on-year by the end of October, reaching 6.2 mn people, Central Bank of Egypt Assistant Sub Governor for Information Technology and Payment Systems Ayman Hussein said at Cairo ICT, Al Mal reported. New mobile payment regulations will be released soon, he said.

Downtown rejuvenation specialist Al Ismaelia for Real Estate Investment is in talks with the European Bank for Reconstruction and Development (EBRD) for an EGP 150 mn loan to finance renovations in the Downtown Cairo area, Al Borsa reports. The total cost of the renovation project is estimated at EGP 450 mn. The loan from EBRD will be used to renovate 16 buildings.

Naeem Holding getting some love: Sameem Capital is raising stake in Naeem Holding fractionally to 5.0% from 4.98%, and Emirates NBD is following suit, hiking its share in Naeem to 5.04% from 4.9%, Al Borsa reported.

The Egyptian Falcon Group has signed an agreement with leading security solutions provider Safran Identity and Security (formerly Morpho) to begin manufacturing devices and equipment in Egypt.

Morsi-era supply minister and Muslim Brotherhood member Mohamed Aly Beshr was ordered detained for 15 days on suspicion of involvement in an unsuccessful assassination attempt on Assistant Prosecutor General Zakareya Abdelaziz, Al Mal reports. Others in the case face charges of belonging to an illegal and unconstitutional organization, attempted murder, and possession of explosives.

Want to pitch a VC in an Uber? The ride hailing app, a sponsor once again this year of RiseUp, is running a second installment of its “Uber Pitch N’ Ride,” which promises to “take the elevator pitch to the next level” in vintage automobiles. If you’re a startup type, apply to pitch an investor before this coming Sunday.