House declares “parliamentary revolution” on terror as Daesh claims Cathedral bombing

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Fallout from this weekend’s Cathedral bombing continues, with an MP claiming the House has “given the government a 30-day deadline” to join a “parliamentary revolution” against terrorism. We have more in Speed Round, below.

IFC chief in Cairo today, to meet El Sisi and confirm USD 10 mn investment in Algebra VC fund: International Finance Corporation Executive VP and CEO Philippe Le Houérou, in Egypt for a two-day visit, will meet President Abdel Fattah El Sisi today. According to Al Mal, Le Houérou will also meet with cabinet members and business leaders.

Le Houérou will sign three agreements for infrastructure development and improving access to finance for small businesses and young entrepreneurs, according to the IFC. One of the agreements he is expected to sign today is IFC’s USD 10 mn commitment to Algebra Ventures new venture capital fund, which expect will close in the USD 50 mn neighborhood. The fund has also landed commitments from the Egyptian-American Enterprise Fund and Cisco, as we have previously reported. Le Houérou should also be signing an agreement today with Hassan Allam for infrastructure development assistance, according to Youm7.

The House of Representatives is expected to vote on what we’re dubbing “part 1” of the Press and Media Act today, after voting to approve the law in principle yesterday, state-owned Al Ahram reports. As we noted earlier this week, the Media Act was divided into two bills: one to set up three regulators to police the media (Part 1), and one to establish regulations and guidelines for working in media (Part 2). The law, clearly on the fast track, has not just journalists in the independent press but members of the state-owned media and the current media regulation apparatus reeling.

It’s interest rate day in America, with Fed fund futures showing “a 97 percent probability that the Fed will lift rates by a quarter of a percentage point at the end of its two-day policy meeting” today, Reuters reports. The challenge now: Managing expectations at the start of the Trump era, the WSJ suggests, noting, “A rallying stock market, rising bond yields and the return of inflationary pressures are creating new challenges for the Federal Reserve … with investors already looking past an expected increase in the benchmark rate and focusing on any signals about a more aggressive policy in the months and years ahead.”

The two-day National Conference for Egyptian Scientists and Experts Abroad will kick off in Hurghada today.

** We have two conference reports for you this morning: Our wrap of RiseUp 2016 is here, and we have a quick report on Business News’ Automotive Summit in a spotlight, below.

Investment Minister Dalia Khorshid will present the final draft of the Investment Law to the cabinet for approval on Thursday before sending it on to parliament, according to Al Borsa. The draft bill was supposed to be discussed today in the weekly cabinet meeting, but Khorshid’s participation in the Egypt Can conference in Hurghada caused the delay.

The Central Bank of Egypt’s Monetary Policy Committee will mull interest rates for the last time this year on Thursday, 29 December

The aftermath of the bombing of St. Peter and St. Paul’s church was still the topic of the day for the nation’s talk show hosts. Hona El Assema host Lamis El Hadidy was preoccupied by the fact that one of the four suspects arrested in connection with the bombing worked at a watchtower at Cairo International Airport and had been arrested before during the pro-Morsi protests in 2013. “Our institutions lack discipline,” she said, criticizing lax security procedures. “Were we waiting for a plane to fall out of the sky before dismissing him?” she asked, wondering why the worker had been allowed to return to his job (watch, runtime: 1:44). El Hadidy reminded her viewers that things could always get worse, pointing to the crisis in Aleppo. “We should always remember that there are other disasters in the world, especially in neighboring Arab countries,” she said.

El Hadidy used that to pivot to foreign relations, saying Egypt can play a different role in Syria thanks to “good relations with both Russia and the new Donald Trump-led US administration” (watch: runtime: 3:29).

Amr Adib found forensic testing as fascinating as Lamees, who had also dedicated a portion of her episode on the forensic evidence in the case. So fascinated, in fact, that he spent almost the entirety of last night’s episode of Kol Youm to it. The host aired a report he filmed (watch, runtime 5:06) at Demerdash hospital in Cairo detailing the bomber’s postmortem facial reconstruction procedure (view it at your own risk here, as the content might be too graphic for some, runtime 24:07). The Interior Ministry’s Gamal Abdel Bary then briefly explains to Adib and audiences the infallible nature of DNA testing and how it worked to confirm the identity of the bomber (watch, runtime 5:26). Adib also follows up on injuries during an interview with the head of Ain Shams medical school (watch, runtime 9:45) and interviews a victim who claims to have seen the bomber’s face (watch, runtime 4:29).

Yahduth fi Masr’s Sherif Amer was more interested in the incident’s legal facets and spoke to Legal and Parliamentary Affairs Minister Magdy El Agaty about expected amendments to the criminal code that had been demanded by members of the House of Representatives. “The criminal code is over 50 years old now and has been crippling the judicial system,” El Agaty said, adding that that Prime Minister Sherif Ismail will begin holding sessions next week to discuss the necessary changes with legal and judicial experts. He said as well that an entirely new criminal code is in the pipeline. Because that’s what’s holding us back in the war on terror: An updated criminal procedure manual.

Separately, El Agaty added that he expects the House majority to vote in favor of the new Media Act during today’s session.
An oasis of sanity: Ibrahim Eissa bellowing, “Why would we amend the constitution? What exactly about the constitution stops us from battling terrorism? What is the obsessive desire for tyranny and fascism?” He asks (watch, runtime 1:17). Eissa then went on to say that “blood is not the answer” to violence. “We have killed more than 2,000 terrorists in the Sinai and terrorism still exists,” he said (watch, runtime: 1:10). The host lambasted objections by Salafist MPs to Cairo University scrapping religious identity from its registration (watch, runtime: 0:49).

Daesh has claimed responsibility for the terror attack on the Church of St. Peter and St. Paul in Cairo on Sunday, according to media reports. In a message circulated on the internet, Daesh admits to sending a suicide bomber to the cathedral, confirming the results of Egyptian authorities’ initial investigations into the incident, Ahram Gate reported. Father Boulis Halim, the Coptic Orthodox Church’s spokesman, said that the group’s admission of responsibility is “against the Egyptian state as a whole and does not target Copts,” and stressed the need to counter extremist ideologies in tandem with increased security measures, Al Shorouk reports.

Daesh is also reportedly responsible for the killing of 16 Egyptians in North Sinai, some of whom were shot to death, while others were blown up by explosives hung around their necks in the Daeshbags’ interpretation of necklacing, according to reports from Al Arabiya. The Daily Mail has one of the less graphic (but still disturbing) roundups in English.

House declares a “parliamentary revolution” against terror, gives Ismail gov’t 30 days to get on board: Never an institution to miss the opportunity to expound gaseously on the problems of the day, the House of Representatives has decided amendments to the Penal Code and Criminal Procedures Act are what will win a multi-front war against terror. MPs are positioning this as being part of a “parliamentary revolution” on terror. Forget about strategy, tactics and funding: The House of Representatives’ Legislation Committee has given the Ismail government until Monday to come back with proposed amendments to the penal code that would accelerate legal proceedings and allow for military trials in similar cases, according to Al Ahram.

Committee head Bahaa Abu Shoka on the “parliamentary revolution”: “The government will be committed to presenting a new version of the law before the parliament during the [next] 30 days, and if it fails to do so, the parliament has the right to act upon article 101 of the house organisational regulations and present its own version of the law.”

That drooling sound, ladies and gentlemen? It’s the slaver of people who cannot wait to abridge your civil liberties so that they are “seen” to be doing something “constructive.”

Meanwhile, Egypt has criticized Amnesty International and Human Rights Watch for not describing the attack as a terrorist act, AMAY reported. “Despite both organizations’ objections to human rights violations, both have shown unacceptable sympathy towards terrorism… and showed no sympathy towards the victims or their families. They also deliberately ignored the government and leaderships’ quick response to the incident,” Foreign Affairs Ministry Spokesman Ahmed Abu Zeid said.

Foreign pharma manufacturers come back with a counter offer: Foreign pharma producers have given the Health Ministry three options to resolve the impasse on medication pricing domestically, Al Mal says. The first proposal is to increase the prices of 15% of each of the companies’ products by 50% in “close time periods,” with a pledge to have the companies operate their plants at full capacity. The second option is to have the government provide pharma producers with USD at a “subsidized” rate of no more than EGP 9 per USD 1. The third, and arguably most realistic option, is to revisit the government’s pricing mechanism that uses reference pricing from the countries in which any given medication is sold the cheapest. The option also comes with a request to expedite the medication registration process domestically to make circulating new products in the market a faster process.

Telecom Egypt (TE) has issued a statement denying making a decision on selling its 45% in Vodafone Egypt, saying it is still studying all options available. TE also reiterated that its contract to acquire a 4G license neither included a stipulation for it to divest from its stake in Vodafone Egypt nor is there a legal requirement for it to have representatives on its board of directors.

The African Development Bank (AfDB) has agreed to disburse USD 500 mn to Egypt, according to International Cooperation Minister Sahar Nasr. The amount is the second tranche of a USD 1.5 mn funding agreement and is part of the government’s program to achieve economic and social development based on social justice, job creation, and improving the business environment. Reuters noted that “the loan will go toward development work that includes social housing, youth employment and sanitation projects and is subject to parliamentary approval, said Nasr, who declined to specify when a vote might take place.”

In related news: The World Bank will vote on disbursing its USD 1 bn second tranche of the USD 3 bn development aid packaged on Thursday 22 December, according to International Cooperation Minister Sahar Nasr.

Another hike in cigarette prices: Cigarette prices have increased by EGP 2 per pack. Marlboros and Merits are now selling for EGP 29 per pack.

The House of Representatives’ Housing Committee gave its stamp of approval to a law to reimburse government contractors and suppliers for losses incurred following the EGP float, AMAY reports. Head of the housing committee Alaa Waly said that the law will cover all relevant parties, and will not cater solely to contractors. As we noted yesterday, the law, initially proposed by MPs, was sanctioned by the Finance Ministry. Under its terms, the government will set up committees with the authority to disburse the payouts.

Did you miss RiseUp 2016? We’ve got your back: Tap here to read our highlights of the high-profile entrepreneurship gathering in bullet form in our latest conference report.

Al Borsa and Business News’ annual Egypt Automotive Summit kicked off yesterday.

On the automotive directive: Peugeot-Citroën appears to have made the choice of whether to assemble in Egypt contingent on the adoption of the automotive directive, according to Jean-Michel lsambert, Middle East and Africa department procurement manager at the company. He added that if the strategy is approved, the chances for investment will increase, Daily News Egypt reports. GB Auto’s Chairman and CEO Raouf Ghabbour also believes in the stabilizing effect the directive will have on the industry in 2018, stating that it is likely more cars will be assembled domestically and exported, bringing in new streams of hard currency revenue, according to Al Masry Al Youm.

In an exclusive interview with the newspaper, Ghabbour dismissed the claims by auto importers and component makers that the strategy would be bad for the industry. The directive would grant importers rebates and tax breaks of up to four times the value of the domestic components they are able to export to the European companies, said Ghabbour. We had noted earlier this month that support for the directive has been divided along assembler-importer lines.

Automotive directive detractors: Bavaria Auto Group CEO Farid El Tobgy came out strongly against the legislation, with the head of the BMW distributor in Egypt saying it doesn’t address concerns of the component industry, according to Al Mal. Component manufacturers and those in other feeder industries concurred, Al Borsa reports. Their concern is that the production targets set out by the legislation are impractical and the component industry cannot keep up with the law’s domestic component requirements, said Tamer El Shafie, head of the Federation of Egyptian Industries auto-feeders department. Attendees also fretted about component manufacturers having the ability to meet European standards, something that doesn’t keep Ghabbour up at night: “We should have faith in our domestic industry … local manufacturers are currently exporting to Mercedes and BMW,” he said in the interview. Other concerns raised at the conference include competition from China for EU and GCC markets, particularly in the buses, is stifling Egypt’s ability to grow its exports to meet the targets of directive, Al Mal reports.

On the state of the auto industry: The float has been the biggest issue facing the industry this year, said the Automotive Marketing Information Council’s (AMIC) Rafat Masrouga, Al Mal reports. Ghabbour, however, argued that floating the EGP was the right move, but the EGP could weaken “as long as consumption and imports significantly outweigh production.” The next few months could create a challenging situation, he acknowledged. Ghabbour is quoted as saying he expects the FX rate to be around EGP 14-15 per USD 1 by June 2017, according to Al Mal. Despite the downturn, AMIC representatives appear to share Ghabbour’s outlook on the industry’s prospects look bright as early as next year, AMAY reports.

Taxation in the industry: The value-added tax (VAT) on auto dealers will be 30% of the profit margin of car sales, after previously being set at 30% of the sales price of the car, said outgoing Tax Authority chief Abdel Moneim Mattar, and currently the special commissioner supervising the implementation of the VAT. Finance Ministry officials continued to defend the so called “price war,” where the Customs Authority issued price guidance on cars as a means to fight back against perceived price gouging by auto dealers. The move, in addition to other customs restrictions, were heavily criticized by the industry at the conference, Al Borsa reports. Separately, Suez Canal Economic Zone (SCZone) chief Ahmed Darwish announced that the SCZone was looking into reducing taxes for the auto industry and the pharma sector, Al Mal reports.

Other highlights of the conference:

• GB Auto has received preliminary approvals for land to build its USD 60 mn tire factory in the SCZone, according to Al Borsa.
• Peugeot agent confirms IPO shelved: Cairo For Development & Cars Manufacturing, Peugeot’s local distributors, announced that it has indefinitely delayed plans for an IPO in 2017 as it is awaiting the automotive directive and the economic reversal for the sector, Al Borsa reports. EFG Hermes had been tapped to restructure the company ahead of the offering, Borsa says.
• Uber announced that it now has c.45,000 drivers in Egypt using its app and plans to launch its carpooling service here, Al Mal reports.

The bombing of the Coptic Cathedral compound on Sunday continues to dominate international coverage of Egypt, with word that the Daeshbags have claimed responsibility having dominated coverage. Read Declan Walsh and Nour Youssef’s “ISIS Claims Responsibility for Egypt Church Bombing and Warns of More to Come” in the New York Times, the natural follow-up to Walsh’s piece from the day before. Also worth a read this morning is this piece from the Economist, a bit late to the party, but sold (even if it does attribute the May attack on a police van in Helwan to the terrorists, which some in the local press has largely now attributed to local criminal activity.)

Egypt’s tourist crisis through the eyes of “Tito”: The BBC Documentary podcast published an episode yesterday on the tourist crisis in Egypt as explored by a Hurghada-based entertainer known as “Tito,” who gives the listeners “a story from his heart” and introduces them to “life inside the tourist resorts that have no tourists, and to the people whose lives have changed forever.” The BBC’s description of the episode notes that “Tito is 30. He has worked as an entertainer in Egypt’s illustrious hotel scene all his working life. He sings, he dances, he is a comedian and he has entertained thousands of western tourists over his 15-year career. Those tourists aren’t there anymore, neither is the work and neither are most of the hotels Tito has worked in” (runtime 29:39).

The space for civil society of operate in in Egypt is “shrinking,” Shahira Amin writes for Al-Monitor. Amin cites the arrest (and subsequent release) of human rights lawyer Azza Soliman and the decisions to freeze the assets of other human rights activists as well as the most recent NGO bill.

CNN covers the story of the Egyptian who is believed to be the heaviest woman in the world and eminent Mumbai-based surgeon, Dr. Muffazal Lakdawala’s attempt to raise funds to fly her to India and set in motion a series of operational procedures that will reduce her weight to below 100kg.

Al Jazeera had a role to play in the rapid deterioration of Egyptian-Qatari relations, Haaretz’s Middle Eastern affairs analyst Zvi Bar’el writes for the newspaper. Bar’el says that the television network deepened the rift between Qatar and Egypt by showcasing its “sweeping support” of the Muslim Brotherhood during and after they were uprooted from power in 2013, and again with its recent controversial documentary on Egypt’s mandatory military service. While Saudi Arabia had previously pressured AJ to reign in its anti-Egypt propaganda, Bar’el notes that the triangle has shifted in light of Egypt’s rift with KSA, with Saudi-Qatari relations getting “a new lease on life.”

The Al Masry Al Youm columnist writing under the pseudonym Newton ran an op ed by CAPMAS head Abu Bakr El Gendy which looks into the persistent discrepancy between economic and population growth rates in Egypt. To maintain a country’s living conditions, said country’s economic growth must be threefold its population growth, whereas Egypt’s economic growth has not surpassed 2% in the four years since 2011, whereas population growth surpassed 2.5%. This equation poses a threat “more serious than terrorism,” El Gendy says.

Despite being well-intentioned, a reform of criminal codes and even the constitution will not do much to nip extremist ideologies in the bud, Soliman Gouda writes for AMAY. The journalist says that the threat of being sentenced to death will do nothing to deter a terrorist who yearns for his own death in the name of his cause. A more effective approach to ending extremism and terrorism would be to focus on social institutions such as schools and houses of worship. MP Amr El Shobaky echoes Gouda’s sentiment in a separate AMAY.

US Navy serenades Egyptian Armed Forces chief of staff during visit to US: The US Navy’s Sea Chanters put together a pretty nifty performance of Omar Khairat and Riham Abdelhakim’s ‘Feha Haga Helwa’ (Something Sweet About It) that’s guaranteed to put a smile on your face (if only because you can’t make out half the words). The show was held in honor of Egyptian Armed Forces Chief of Staff Lt. Gen. Mahmoud Hegazy’s visit to the United States earlier this year. The accent could have used a little bit of work, but otherwise these guys really nailed it. (Watch, runtime 3:20)

The Foreign Affairs Ministry said Egypt’s embassy in Syria managed to rescue Egyptian families trapped in the conflict zone in Aleppo, Syria. Egypt’s chargé d’affaires says the families made it safely to Damascus and is processing new documents for them.

Egyptian authorities have been accused by Sudan of arresting 45 Sudanese gold miners and seizing their equipment while on Sudanese territory, without offering an explanation, according to ABC News, citing Sudan’s Ashorooq TV. Sudan’s Minerals Minister Ahmed Al Karoury described the alleged move as "an aggression on innocent Sudanese nationals on Sudanese territories."

The House of Representatives’ Foreign Affairs Committee issued a letter addressed to the world governments on Sunday’s Cathedral bombing, asking leaders to realize the importance of supporting Egypt through its journey towards stability and development.

South Korea’s Doosan Heavy Industries & Construction won a USD 137 mn order to supply a gas turbine and a power generator to Egypt’s state-owned power suppliers Upper Egypt Electricity Production Company and Cairo Electricity Production Company, Korean business new website Pulse reported. Doosan received a notice of award to build and test run a 650 MW turbine for the Assiut Power Plant and a generator for Cairo West Power Plant by April 2020. The company said it was its first successful bid in Egypt in six years.

EGAS confirmed it has delayed commissioning a third FSRU that was scheduled for this month to an unspecified date in the future, according to Ahram Gate. The decision confirms statements by the Oil Ministry earlier this month. A source at EGAS said the delay follows an increase in natural gas production nationally in November to 4.45 bcf/d, 600 mcf/d more than the volume in April, as more fields came onstream and the projected increases in output. Egypt currently imports the equivalent of around 1 bcf/d in LNG, regasified using the Höegh Gallant and BW Singapore FSRUs as well as getting excess natural gas regasified by the FSRU docked in Aqaba, Jordan.

Eni obtained approval from the Egyptian government before moving forward with selling a stake of the Shorouk concession, which contains the Zohr field, to Rosneft, a company representative told Al Borsa. The source also added that the sale is exempt from value-added tax as per the concession agreement.

Apache intends to spend USD 100 mn for horizontal drilling on 20 wells in the Apollonia field in the Western Desert, Al Borsa reports. If successful, the vertical wells are expected to produce around 40 mcf/d from limestone. Apache has spent USD 24 mn so far on exploration and testing in the Apollonia field and expects to bring the second of three other wells online early next month.

Shell has agreed with the Petroleum Ministry to begin gradually increasing its LNG exports from its Idku liquefaction plant to 250 mcf/d, Al Borsa reported. Shell intends to send out LNG shipments every 20 days, he said, adding that the Idku LNG plant should be operating at full capacity by FY2020-2021. This comes as Shell is reportedly going to halt the production of 40 mcf/d from the Rosetta concession by July 2017.

The Egyptian Pharmaceutical Trading Company (EPCT) will finish delivering the first batch of meds it is importing on behalf of the Health Ministry within two weeks, Al Borsa reported. EPCT’s CEO says the company has successfully imported 10% of its target to cover medications in short supply. The Health Ministry has contracted EPCT to import USD 186 mn worth of medications currently in short supply domestically.

Madinet Nasr Housing & Development (MNHD) issued a statement to the EGX saying its unaudited 11M2016 results are the strongest in the company’s history. MNHD says it recorded EGP 1.4 bn in revenues of which EGP 730 mn made the bottom line. The company says the increase in revenues is attributed to the rise of contracted sales in 2H2016 following the launch of its SARAI project.

Oman signed an MoU with Egypt to invest in the tourism and hospitality sectors, according to Times of Oman. “The main objective of the MoU is to invest in the tourism and hospitality sector, participation in travel fairs/ exhibitions in each other’s countries and encouraging cooperation between tourism stakeholders including hotels and tour operators.”

Orange Egypt announced in an emailed statement that it, in partnership with Cisco systems, completed “the modernization and capacity upgrade of Orange Network IPMPLS Core & Main Datacenter Data Network Backbones in preparation for Orange’s launching of 4G services, and in support of its direction to be a fully integrated telecom operator.” Hisham Siblini, Orange Egypt’s CTO, said that with the most recent network upgrade, “Orange network is ready for the 4G traffic Tsunami.”

Kayan Egypt, SEAT’s exclusive dealer in Egypt, was temporarily awarded the rights to run after sales services on Skoda cars, Al Mal reported. Al Mal said Skoda’s parent company had terminated its agreement with ARTOC Auto, although ARTOC Auto had told us it is still Skoda’s agent in Egypt “according to Egyptian law” last week. It is also reported that the new exclusive agent for Skoda in Egypt will be unveiled in March.

The Housing Ministry is offering incentives to retailers who open up shop in the new cities it is building in Upper Egypt, Al Shorouk reports. At a meeting with retailers, Housing Minister Mostafa Madbouly said that the ministry had coordinated with other government bodies to secure licensing and permits for those planning to rent or obtain a store through a usufruct license. Details on these incentives were not mentioned by the newspaper.

Prime Minister Sherif Ismail has reportedly tasked Legal and Parliamentary Affairs Minister Magdy El Agaty to introduce amendments to the criminal procedures law, Al Masry Al Youm says. The amendments would be aimed at expediting the judicial process and trials of those accused of terrorism and they would be passed on the cabinet and then to parliament for approval.

The Egyptian museum in Turin, Italy seems to have had Queen Nefertari’s leg bones on display for over a century without actually knowing they belonged to the Ancient Egyptian queen, Italy24 reports. Although the recent series of analyses on the bones hasn’t yielded any conclusive results, they suggest the remains are Nefertari’s, particularly as the grave goods found with the remains can be linked to the queen. Too bad the museum didn’t announce the investigation results in time to be included in the International Business Times’ end-of-year compilation of significant archaeological finds related to Ancient Egypt.

Egyptian actress / Jennifer Lawrence doppelgänger Zubaida Tharwat passed away last night, succumbing to a battle with cancer. Tharwat who briefly studied law at Alexandria University acted in 30 films and starred alongside iconic actors Omar El Sherif, Roushdy Abaza, and Abdel Halim Hafez.