Sunday, 4 December 2016

Surprise customs hike targets “non-essential” goods


What We’re Tracking Today

** Our apologies for being a few minutes later than usual this morning. We’ll be back on track tomorrow.

Customs hike: If you, like some of us here, ordered a handful of surprises for the kiddies from Amazon and the like this past weekend, it may cost you more than you budgeted after the Ismail government hiked customs duties 40-60% on many categories of goods it deems non-essential. We have more in Speed Round. Merry Christmas and Happy New Year, y’all.

Both Solar-Tec and Electricx run today through Tuesday at the Cairo International Convention Centre.

What We’re Tracking This Week

Tomorrow is Purchasing Managers’ Index day in Egypt, the United Arab Emirates and Saudi Arabia. Look for all three to be out at c. 6:15am CLT.

It’s also the last gasp of 2016 conference season:

Still playing football with Tiran and Sanafir: The Supreme Administrative Court will convene on 5 December to look into the Ismail government’s appeal against a verdict overturning the transfer of the Tiran and Sanafir Islands to Saudi Arabia.

On The Horizon

Still up in the air: Is the Prophet’s Birthday (set for 11 December) a national holiday or merely an observance?

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

Finance Minister Amr El Garhy blanketed the airwaves last night to sell the nation on customs hikes, appearing on Hona El Assema, Kol Youm and Sada El Balad to reassure audiences that the measures imposed this weekend were in the best interests of the nation. He discussed the upsides of the decision and compliance with the World Trade Organization with Lamees Al Hadidy (watch: runtime:16:14), dispelled exaggerated fears with Amr Adib (watch: runtime: 8:14), and explained ways to adapt to the decision with the creature that is Ahmed Moussa. Details of his statements are in our Speed Round coverage of the story.

Adib praised the decision to raise customs on what he called “luxury items. “Every day, we’ll see new economic measures to regulate the market after the floatation,” he said (watch: runtime: 2:08).

CI Capital will IPO in 2017, said CI Capital chief Mahmoud Attallah, was interviewed by Lamees to discuss CIB’s sale of a 71.94% stake in Egypt’s second-largest investment bank. On appetite for the sale, he said simply that “CIB contacted some businessmen and they quickly approved buying into it,” he said. There investors are unrelated, he noted, stating that their identities cannot be revealed (watch: runtime: 18:15).

Last week’s unpopular (with growers) decision to eliminate tariffs on poultry was also discussed at length by the talk show hosts. Lamees had Ismail cabinet spokesperson Ashraf Sultan, who said that cabinet is likely reinstate tariffs on poultry in two days after Prime Minister Sherif Ismail tasked a committee with studying the move following a meeting with the Egyptian Poultry Association, Al Borsa reported. The association had threatened to sue to have the measure scrapped, Al Borsa reported (watch: runtime: 3:29).

The apparent reversal was welcomed by poultry producers. One of them, MP El Sayed Hassan, called to say that domestic production capacity can meet demand and promised that if the decision was reversed, poultry companies would double production and sell to the Supply Ministry at cheaper prices. Ahmed El Wakil, head of the Federation of Chambers of Commerce called in to praise the decision to restore tariffs (watch: runtime: 5:14).

MP Ehab Ghataty, who attended Saturday’s meeting with the poultry association. spoke with Amr Adib on the issue, saying the decision to remove tariffs was based on misinformation. “The prime minister had been informed that there was a 20-25% shortfall in supply of chicken in the market,” he said (Watch: running time: 3:55). He met with other industry insiders who promised never to raise the prices of poultry. (And if the MP is buying that, we property in the New Valley with Mediterranean sea views for sale.)

Speed Round

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Customs duties are rising on more than 350 imported goods after President Abdel Fattah El Sisi signed a decree into law on Thursday, Youm7 reports. Finance Minister Amr El Garhy says rates on the goods in question will stand at 10-60% after the hike, and the Associated Press is reporting that “fruits, foods, perfumes, furniture” will see customs rise 40-60%. Also being hit with higher rates: consumer electronics and home appliances. See the official decree here (in Arabic, pdf) or broken down into a slideshow by Al Borsa.

These goods are either fully-manufactured goods or have local alternatives of the same quality, said Finance Minister Amr El Garhy, who as we noted above has been making the rounds of the nation’s talk shows to calm the situation. To dispel “exaggerated” fears of inflation, El Garhy noted that many of the goods on the list will only see a 5% increase in tariffs. The came as Egypt’s trade deficit has grown to USD 49 bn and will help protect domestic manufacturers, officials said. Customs Authority chief Magdy Abdel Aziz tells Al Borsa the state is looking at EGP 3.5 bn in revenue from the customs hikes by June 2017. El Garhy had put the figure to closer to EGP 6 bn (is there a press secretary in the house?).

How will these new tariffs impact Egypt’s trade agreements? The tariffs will not hit goods imported from countries with which Egypt has trade agreements, El Garhy noted. That includes the European Union and Turkey, the minister said. The tariffs are at the highest possible level allowed under the World Trade Organization, said Abdel Aziz. Senior officials from the Cairo Chambers of Commerce have raised concerns that the move may lead to retaliatory measures from Egypt’s trading partners, Al Mal reports.

Industry reactions: It is only natural that Ahmed Sheeha, head of the importers division of the Chambers of Commerce, has lost his mind entirely over the decision and is threatening to sue the government, ifAl Wafd is to be believed. Other business associations are taking a more temperate view, saying the decision will support domestic manufacturers.

CIB has inked sale and purchase agreements with a group of non-related Egyptian and Gulf investors for 71.94% of CI Capital in transactions worth a combined EGP 683.4 mn. That values the investment bank at EGP 950 mn, CIB said in a statement on Thursday. The transactions bring CI Capital one step closer to an IPO, the statement suggested, noting that CIB will retain a minority stake “and will continue to provide … support to the company during the foreseeable future.” The transactions are subject to regulatory approval.

The buyers? CIB isn’t saying, but Al Borsa is citing sources close to the transaction as saying more than 10 investors bought into CIB, including: Arafa Group’s Alaa Arafa, construction magnate Mahmoud El Gammal, Tiba Group’s Saddiq Afifi, former Zamalek football club chairman Mamdouh Abbas, five unnamed stakeholders in Zahran Group, Compass Capital’s Shamel Aboulfadl and Ayman Mamdouh Abbas, and Alameda Healthcare’s Fahad Khater. We’re not putting stock in Al Borsa’s ownership figures, as they don’t agree with the list we’ve independently assembled, but the names generally do.

EFG Hermes tops November and 11M2016 brokerage league tables. EFG Hermes closed November 2016 with a 27.7% market share, followed by CI Capital (8.5%), Pioneers Securities (4.8%), Sigma Securities (4.0%) and Beltone (3.9%). On a year-to-date basis, EFG Hermes has a 21.1% market share, followed by CI capital at 9.6, Pioneer Securities (5.0%), Sigma Securities (4.0%) and Beltone (3.7%). Rounding out the top ten on an 11M2016 basis: Pharos, Naeem, HC Securities, and Mubasher. The EGX reports 137 active brokerage houses in its 11M2016 report.

EMEA brokers and investment bankers are looking at lower bonuses this year, recruitment outfit Options Group found in a recent market survey, Business Insider reports. Investment bankers working in Europe, the Middle East and Africa expect 8% less total compensation this year, while equities traders and analysts expect a 9% cut. Those working in emerging markets fixed income, currencies and commodities are looking forward to a 5% bump in total take-home compensation, as are wealth managers who responded to the survey.

Egypt is in, Nigeria is out for South African fund managers: South Africans have a mandate to buy African equities in good times and bad, and they’re definitely buying Egypt at the moment. South Africa’s Financial Mail has a nice roundup of sentiment among South African fund managers on opportunities across the continent. In: Egypt, post devaluation, with one manager noting “I believe it will kick-start the economy.” The Stanlib Africa Equity Fund run by John Mackie holds CIB and EFG Hermes, while Nick Ndiritu’s Allan Gray Africa ex-South Africa Fund also likes Eastern Tobacco. Out: Nigeria, where a half-hearted attempt at devaluation has crippled the exchange: “With so little access to foreign exchange and limited trading by foreign investors, daily trading at the Nigerian Stock Exchange has fallen from USD 50 mn to USD 5 mn.” Read “Africa funds: Taking a calculated risk.”

Africa rising? Not so much. Longtime readers know we’re as skeptical of the broad “Africa rising” narrative as we are of the ease with which everyone from portfolio managers (of a certain ilk) to aid types seem to want to treat the continent as if it were a single country. Nick Ndiritu, the Allan Gray PM we quote above, says the “‘Africa Rising’ narrative has been replaced by the exact opposite view of the continent.” And he’s right: The Financial Times had a solid analysis piece out this weekend suggesting that “expectations for economic growth this year in sub-Saharan Africa have plummeted to just 1.5 per cent … a fraction of the 4.2 per cent growth foreseen at the start of the year.” Why? Sharp downgrades to growth forecasts for Nigeria, Ivory Coast and Angola, the paper notes. But the concerns are even deeper when you focus on sub-Saharan Africa, as the piece does, noting that “the IMF now predicts that 2017 will be the second successive year in which sub-Saharan growth will undershoot global growth.” From legislation capping lending rates in Kenya to slumping automobile and oil production continent-wide and political headwinds in South Africa, the piece paints a gloomy picture of the year ahead for the continent.

It’s a drop in the bucket, but repatriation of foreign profits stranded in Egypt has begun. The National bank of Egypt repatriated on Thursday some USD 1 mn in profits owed foreign investors, Youm7 reported yesterday. (Yes, that’s USD 1 bn, not USD 1 bn.) The sum, while modest, is the “first time in years” that the NBE has been able to repatriate profits in that amount, the bank’s vice-chairman told the newspaper. The move came a day after the Central Bank gave the banking sector the green light to allocate a portion of their excess foreign currency to the repatriation of dividends owed to foreign investors.

The banking sector has brought USD 4.9 bn in from the market since the float of the EGP in early November, senior banking sources told Al Masry Al Youm. NBE brought in USD 1.2 bn, bank president Hisham Okasha said, while Banque Misr raked in USD 710 mn, a senior official from the bank tells Al Mal. Meanwhile, Okasha and Banque Misr head Mohamed El Etreby both denied that they were planning to cut their high-yield CDs, AMAY reports. Okasha did state that NBE is considering curbing supply.

Is the government reversing its stance on raising med prices? After swearing a blood oath back in May to not allow retail prices of meds to rise, Health Minister Ahmed Rady has apparently promised pharma companies that 10% of meds in the market will see prices rise by 50% every six months, Al Borsa reports. Rady is also said to have promised that all production inputs will be exempt from the value-added tax (VAT) and is offering discounts on utilities bills and customs breaks, measures we had noted that the House of Representatives was looking into last week. The House Health Committee will reportedly be putting in a formal request to the Finance Ministry for the VAT exemptions, the newspaper reports.

Manufacturers are reportedly driving a hard bargain, having rejected the proposal during a meeting Rady held with some 20 pharma companies a week ago Saturday and at another this past Thursday. They are apparently pushing for the frequency of the 50% price rises to double to every three months. Rady is expected to hold another meeting today with 10 manufacturers to discuss the proposal.

The change in tone came after Prime Minister Sherif Ismail acknowledged on Thursday that the burden on manufacturers “was exacerbated by the float.” The PM said cabinet was working with all sides to reach a solution that would see an end to the shortage of key products in the market.

The government has called off talks on a number of high-profile energy projects signed at Egyptian Economic Development Conference (EEDC)in 2015, saying it has no need to increase capacity further, unnamed sources told Al Borsa. The focus is now instead on upgrading the national distribution grid to accommodate the added capacity, the sources added. The projects shelved, the newspaper claims, are ACWA Power’s 2,200 MW combined cycle plant in West Damietta (signed in partnership with Masdar) and its 2,000 MW clean coal plant; a USD 11 bn coal power plant signed with Tharwa Investment; a 500 MW in wind farm; and some 1,500 MW in solar power projects. Last week the ministry had delayed issuing the tender for the USD 1.3 bn Damanhour power plant, moving it to its 2022-2027 plan from the 2017-2022 version. This new shift in policy, if confirmed, comes as the three Siemens combined-cycle plants are undergoing commissioning.

Well, solar companies, you asked for it: Meanwhile, the Electricity Ministry will reprice contracts with companies under the feed-in tariff (FiT) program, but it may not be what the solar companies had in mind when they put in the request. The ministry expects companies will foot the bill for the 30% increase in costs of building infrastructure to the power plants and connecting them to the power grid under the cost-sharing agreement signed by FiT companies, ministry sources tell Al Borsa. As we noted last month, FiT companies were among the many who are requesting the government reprice their agreements following the float, calling for the government to increase the tariff. In an article last week, Wamda had suggested that the ministry has lost interest in FiT as the Siemens power plants start coming online.

Is the USD 2.7 bn currency swap with China in place? Apparently not, according to Assistant Sub Governor Markets Sector Rami Abulnaga, saying details are still being worked out. Abulnaga denied earlier reports that the agreement had been finalized Thursday. In other China-related news, some 40 Chinese companies attended on Thursday the Egyptian-Chinese Business Forum at which the International Cooperation Ministry announced the signing of grants worth USD 150 mn from China that will be dispersed over the next three years, Al Mal reports. The newspaper carries a sketchy report that a Chinese fund is being created to seek Egyptian opportunities (zero detail in that piece). President Abdel-Fattah El-Sisi met with Wang Jiarui, vice chairman of the Chinese People’s Political Consultative Conference, for talks on trade and economy issues, according to an e-mailed statement from Ittihadiya.

The Supreme Constitutional Court effectively upheld the Protest Law on Saturday, settling a long-running court battle and blocking further appeal, Reuters reported. The court ruled, however, that Article 10, which grants the Interior Ministry the right to deny a protest request, was unconstitutional. The ruling also means that protesters arrested under the law will remain in prison. Passed in 2013, the Protest Law requires notification to the Interior Ministry of any public gathering of more than 10 people at least three days in advance, imposes sentences of up to five years for violations of a broad list of protest restrictions, and allows security forces to disperse illegal demonstrations with tear gas, water cannons, and birdshot. The government intends to amend the legislation in accordance with the court’s ruling after the verdict is published in the state’s official gazette, Youm7 reported.

Also worth reading this morning, if you have a moment to spare or are stuck in traffic:

  • Was “Buy Nothing Day” a success, or was it the weather? The Consumer Protection Authority (CPA) claims its one-day shopping boycott on Thursday was a success, but stores and shop owners are blaming the bad weather for lower foot traffic, Al Mal reported. “The pictures are proof,” said CPA Chief Atef Yakoub, who had published pictures of empty hallways around Cairo’s many malls on Friday.
  • Two civil servants to face trial over migrant ship capsizing: “Egypt has referred two maritime inspection officials to trial for their role in the capsizing of a migrant ship that led to the death of over 200 earlier this year,” Reuters and Ahram Online report.
  • The Financial Times has the inside story on Saudi’s drive to reach an agreement on output cuts, from what sounds an awful lot like a WhatsApp group to coordinate between the Saudi delegation in Vienna and Prince Mohammed bin Salman, to what the paper says is the wider calculus of how low oil prices could have derailed MbS’s economic change program. Read “Saudi prince’s ambition for life beyond oil forces Opec deal” (paywall)
  • We don’t know whether to laugh, cry or lose our appetite: Starbucks chief Howard Schultz “is stepping down as chief executive of Starbucks Corp. to lead an effort at the company to build high-end coffee shops that will charge as much as USD 12 a cup, his next attempt to revolutionize the way Americans consume coffee,” the Wall Street Journal reports. CNBC had an entrepreneur profile of Schultz this weekend.


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Egypt in the News

The New York Times takes a deep dive into Egypt’s foreign policy under President Abdel Fattah El Sisi in “Egypt and Turkey Soften Positions on Syria, Benefiting Assad.” In a story that nibbles around the edges of the rift between Cairo and Riyadh, Michael Wahid Hanna is quoted as saying the emerging “Sisi doctrine” is marked by “rigid anti-Islamism and rigid anti-militancy and a very vocal support for nation states and sovereignty.” He’s right, of course, as is much of Anne Barnard’s well-written piece, but both miss the wider point: After a decade in which our foreign policy has been a struggle for relevance beyond “We made peace with Israel” and “We can help broker peace between the Israelis and the Palestinians,” Ittihadiya is finally allowing MoFA to run a multipolar foreign policy. One that has seen us balance America with France and Russia (on the foreign policy and weapons front). One that saw China — cultivated since El Sisi came to office — help us close the IMF facility with its currency swap. One that has seen us re-engage with East Africa after decades of neglect…

Otherwise, wire service reports dominate headlines on Egypt in the western press the weekend:

And, finally, the British press is going bonkers over what is essentially a snuff film, with both the Daily Mail and the Independent covering mauling to death of a lion tamer during a live show in Alexandria. Keep it classy, folks.

Diplomacy + Foreign Trade

El Sisi holds meetings on sidelines of UAE national day festivities: President Abdelfattah El Sisi, in Abu Dhabi for two days coinciding with the UAE’s national day, met with French President François Hollande, Yemeni President Abdrabbuh Mansur Hadi and Malian President Ibrahim Boubacar Keïta.

The International Cooperation Ministry met with a delegation from the French Development Agency to discuss a EUR 120 mn loan to support the economic reform plan, Al Mal reported. International Cooperation Minister Sahar Nasr had previously said she was in talks with the AFD for EUR 150 mn to finance energy projects.


Egypt accepts six bids for oil and gas exploration

Egypt has accepted six bids for oil and gas exploration worth a combined USD 200 mn, the Oil Ministry said on Friday, Reuters reported. The international oil companies included Royal Dutch Shell, BP, Apache Corp and Apex International Energy. BP would invest at least USD 36 mn, Apache at least USD 60.6 mn and Shell at least USD 35.5 mn, the ministry said. Apex said they were awarded two blocks in the Western Desert, and would invest USD 27.4 mn in the first exploration phase. Egypt had announced an international tender for exploration in 11 oil and natural gas blocks in the Western Desert and Gulf of Suez.

Basic Materials + Commodities

Domty to produce smaller sizes after price hikes

Domty is reducing product sizes in a bid to effectively lower prices retail prices after the float of the EGP saw its input costs shoot up, a source at the company told Al Mal.

Supply Ministry receives 250k tonnes of wheat

The Supply Ministry has received 250k tonnes of wheat it had imported to bolster Egypt’s basic commodity reserves for the next six months, Al Borsa reports. The government has also reportedly imported 80k tonnes of sugar and will be offering around 156k tonnes to the market soon.


Three textile factories inaugurated in Behera

Trade and Industry minister Tarek Kabil inaugurated three textile factories in Behera’s Kafr El Dawar with investments of EGP 263 mn. The facilities are targeting exports, Al Mal reports. The factories are part of a wider textile industries complex project in which 12 investors were allocated land, according to Al Borsa.

El Araby in talks with Asian investors to build feeding industry factories for domestic appliances

El Araby Group is in talks with investors from China, South Korea, and Thailand to build component manufacturing plants to serve home appliance manufacturers, Chief Supply Chain Officer Medhat El Araby told Al Mal.

IDA will allow cement companies to pay for new licenses in instalments

The Industrial Development Authority (IDA) is allowing the three winners of last week’s cement production license auction to pay license fees in annual instalments, Al Mal reports. A source at the IDA said that the companies will receive their letters of guarantee in full once they begin production and would until then be paid back in tranches of EGP 50 mn as they complete each phase of construction. Cement Egypt’s CEO Ahmed Abou Hashima (who is also CEO of Egyptian Steel) told Al Mal that his company will begin working on its 2 mn tpa plant in Sohag “before the beginning of the new year.”

Real Estate + Housing

Remco partners with Armed Forces on EGP 3 bn Stella Di Mare 2 project

Remco Tourism Villages Construction Company will build the Stella Di Mare 2 project in Ain El Sokhna in partnership with the Armed Forces, Remco said in a statement. The project has an estimated cost of EGP 3 bn and has projected sales of EGP 5 bn, the company added. The Armed Forces are the land partner, and will receive 40% of unit sales. The project is expected to be completed within three years.

Inertia investing EGP 2.5 bn into two real estate projects

Inertia Egypt are investing EGP 2.5 bn into two real estate projects, CEO Ahmed El Adawi told Al Mal. The projects include an EGP 1.7 bn housing project on the Cairo-Alexandria Desert Road, and EGP 800 mn to complete the Veranda project in Sahl Hasheesh, he added. Inertia will complete the first of four phases of the first project, and second phase of Veranda within three years, he said. Inertia is looking to IPO in 2018 and will begin evaluating assets and legal procedures in mid-2017, said El Adawi.

Telecoms + ICT

NTRA approves allowing clients to switch landline operator

The NTRA has approved the regulatory framework that will allow current Telecom Egypt clients to switch their landline to any of the new virtual fixed-line operators, Al Borsa reported. Clients must first pay outstanding fees, and a transfer fee, an official said. Operators that refuse to allow their clients to switch to a different operator will be fined, he added.

Orange DSL makes substantial losses in 9M2015

Orange DSL’s net losses amounted to EGP 90 mn during 9M2016 compared to EGP 50 mn in 9M2015 and the company’s market share has decreased slightly to 14.5%, Al Borsa reports. The company’s debts had also reportedly increased to EGP 360 mn in September from EGP 290 mn last year. Orange DSL had invested a hefty EGP 56 mn in the last nine months to try and regain some of the subscribers they lost last year when Telecom Egypt (TE), without prior warning, decided to upgrade its broadband infrastructure to fiber-optic cables, interrupting the service for other ADSL providers using it and costing them 300k clients. TE and its ISP subsidiary TE Data (which holds nearly 80% of the ADSL internet market) have been accused of using the upgrade as a pretext to poach clients and had reached a settlement with the Egyptian Competition Authority last summer over its anticompetitive practices.

Automotive + Transportation

Transport ministry requests USD 1 bn facility from Korea for metro investment

Transport Minister Galal Saeed is in talks with his Korean counterpart for a USD 1 bn facility to fund phase one of the USD 4 bn Cairo Metro Line 5,, Al Borsa reported. The ministers also discussed Hyundai Rotem’s bid to supply 64 trains for Cairo Metro Line 3.

Car prices report record increases

Around 162 car models have risen in price in the month since the float of the EGP, Al Borsa reported. The increases included Opel, VW, Hyundai, Kia, Chevrolet, Jeep, Mitsubishi, and Toyota vehicles.

Skoda parts ways with Egypt’s Artoc Auto, begins search for new distributor

International automobile manufacturer Skoda has parted way with Artoc Auto, Al Borsa reported, saying the European manufacturer Skoda is allowing itself six months to find a new distributor and until then, the brand’s maintenance and after-sales traffic could be rerouted to Egypt Automotive, which distributes affiliates Volkswagen and Audi. Skoda is already in negotiations with potential distributors and has declined initial offers from GB Auto’s Raouf Ghabbour and AF Automotive’s Hossam Aboulfotouh, according to Al Borsa.

Legislation + Policy

House committee begins reviewing Consumer Protection Act

The House Committee on Legislative Reform began its review of the Consumer Protection Act on Saturday, with Consumer Protection Agency head Atef Yakoub present to testify, Al Shorouk reported. The government had reportedly asked the House to wait on reviewing the legislation, which had been proposed by a group of MPs and endorsed by Yakoub, until it was done drafting its own. The Act will reportedly give cabinet the authority to fix prices for a number of “strategic” goods for a set period of time.

Social Housing & Mortgage Finance Support Act approved by Social Housing Fund

The Social Housing Fund has approved the Social Housing and Mortgage Finance Support Act, which is now on its way to Cabinet, Al Mal reported. The Act merges the Social Housing Fund and the Mortgage Finance Fund. It replaces a Social Housing Act that was passed in 2014, according to Social Housing Fund Executive Director and Mortgage Finance Fund Chairman Mai Abdel Hameed. This comes after the CBE instructed banks last week to ease mortgage approval, with mortgage finance requirements for low-income borrowers.

Egypt Politics + Economics

Mona Mina released on bail

Secretary General of the Medical Syndicate Mona Mina was released on EGP 1,000 bail following an investigation into allegations that she made a statement asking doctors to reuse syringes, Al Mal reported.

GAFI will launch investment promotion company in 1Q2017

The General Authority for Investment and Free Zones (GAFI) will launch a company to promote investment at home and abroad in 1Q2017, GAFI CEO Mohamed Khodeir told Al Mal. GAFI is preparing a feasibility study on the company, which was announced as part of the 17 pro-investment policies by the Supreme Investment Council, he added.


Egypt downs UK in women’s squash world team championships

“Top seeds Egypt fought back to beat defending champions England and win the squash Women’s World Team Championship,” the BBC reports.

On Your Way Out

Careem added Mansoura, Tanta, and Hurghada to its network. The company was already operating in Cairo, Alexandria, and Damanhour, Al Borsa reported.

US authorities returned to Cairo four Pharaonic artifacts that had been smuggled out of Egypt and into the United States, Al Mal reported. The move comes only days after Foreign Minister Sameh Shoukry had signed an agreement with US Secretary of State John Kerry, promising to protect Egypt’s cultural heritage by restricting imports of cultural artifacts and working to prevent illegal trafficking.

The markets yesterday

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EGP / USD CBE market average: Buy 17.68 | Sell 18.11
EGP / USD at CIB: Buy 17.5 | Sell 17.75
EGP / USD at NBE: Buy 17.55 | Sell 17.8

EGX30 (Thursday): 11,548.15 (+0.83%)
Turnover: EGP 1.782 bn (320% above the 90-day average)
EGX 30 year-to-date: +64.83%

THE MARKET ON THURSDAY: The Egyptian benchmark index rose by 0.8% on Thursday. The top performing stocks were Porto Group, Amer Group, and Cairo Oils and Soap. On the downside, Thursday’s worst performing stocks included Heliopolis Housing, Ezz Steel, and Arab Cotton Ginning. The market turnover was EGP 1.8 bn and local investors were the sole net sellers.

Foreigners: Net long | EGP +160.1 mn
Regional: Net long | EGP +2.2 mn
Domestic: Net short | EGP -162.3 mn

Retail: 72.2% of total trades | 69.3% of buyers | 75.0% of sellers
Institutions: 27.8% of total trades | 30.7% of buyers | 25.0% of sellers

Foreign: 15.1% of total | 19.5% of buyers | 10.7% of sellers
Regional: 6.3% of total | 6.4% of buyers | 6.3% of sellers
Domestic: 78.6% of total | 74.1% of buyers | 83.0% of sellers


Against all odds, OPEC reaches an agreement

OPEC members have managed to strike a deal to cut their 2017 production by 1.2 mbpd following the initial agreement in Algiers at the start of the month. Oil prices have rallied c.11% following the announcement of OPEC’s first production cut in over eight years, but Pharos Holding remains skeptical with regards to compliance from OPEC members as well as non OPEC countries with production levels.

Highlight of the “Algiers Accord”:

  • OPEC to cap production at 32.5 mbpd starting January 2017
  • Saudi to bear the brunt and cut production by 500,000 bpd to 10.06 mbpd
  • Iraq agrees to cut production by 200k bpd to reach 4.35 mbpd
  • Iran, Libya and Nigeria are exempt from production cuts, yet Iran will freeze production at pre-sanction levels of 3.8 mbpd
  • Dec 9th meeting between OPEC and Non-OPEC members to discuss Non-OPEC cuts
  • Kuwait, Venezuela and Algeria to monitor compliance with production levels

Tap here to read the full note, including winners and losers in the wake of the accord.


WTI: USD 51.68 (+1.21%)
Brent: USD 54.46 (+0.96%)
Natural Gas (Nymex, futures prices) USD 3.46 MMBtu, (+0.55%, January 2017 contract)
Gold: USD 1,177.8 / troy ounce (+0.72%)<br
TASI: 7,093.7 (+1.3%) (YTD: +2.6%)
ADX: (Market closed)
DFM: (Market closed)
KSE Weighted Index: 369.6 (+0.7%) (YTD: -3.2%)
QE: 9,913.8 (+1.2%) (YTD: -4.9%)
MSM: 5,590.2 (+1.9%) (YTD: +3.4%)
BB: 1,177.7 (+0.3%) (YTD: -3.1%)

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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.

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.

12 December (Monday): African Development Bank votes on issuing second tranche of USD 1.5 bn loan.

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