Are prices at the pump going up before 1 July?

We don’t want to write this and invoke hassad, but it is starting to feel like the year-end news slowdown is upon us. The indicators are numerous: kids now home on (or counting down the hours left until) winter break, trading volumes on the EGX plunging yesterday to the lowest level since the float of the EGP, talk show hosts are talking again about Mubarak’s bns, Dubai’s airport thronging with Cumbrian dairy farmers desperate to return home…

Heinz Egypt meets health and safety standards, the Trade and Industry Ministry’s Industrial Control Authority (ICA) said, according to Al Masry Al Youm. Inspectors from the ICA tested samples from the company’s production lines and found no violation of standards. The Authority did note in its report that, on previous inspections of Heinz’s plant, had administrative concerns over how the company dealt with returned goods and labelling, but says these issues were addressed. The report comes in the wake of a flap over the company allegedly processing sub-standard tomatoes. See more in Last Night’s Talk Shows, below.

International Cooperation Minister Sahar Nasr is expected to sign today an agreement for the USD 500 mn second tranche of a USD 1.5 mn loan from the African Development Bank, Al Masry Al Youm reports.

On a related note: The World Bank’s board of directors will vote tomorrow (not on Thursday, as previously reported) to disburse the second tranche of a USD 3 bn loan to Egypt. The World Bank’s board meeting schedule through February is here (pdf).

The Ismail cabinet will decide on the new Investment Act on Sunday, 25 December, according to Investment Minister Dalia Khorshid.

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

B.Tech Chairman Mahmoud Khattab made himself the poster boy for importers struggling after the float of the EGP, appearing last night on MBC’s Yahduth Fi Masr with Sherif Amer. “The floatation was a must, but a number of other procedures should have also followed… and the move should have been better coordinated with investors,” Khattab said. “Investors wanted to repay their LCs before the float, but banking regulations didn’t allow for it since there was a cap on USD deposits.”

Amer also waded into the pharma fray, saying Health Minister Ahmed Rady reportedly insisted on getting Prime Minister Sherif Ismail’s approval before allowing manufacturers to raise prices. A local pharma producer told Amer that domestic manufacturers have asked that Rady review med prices every six months to ensure that the companies are able to cope with the fluctuations in the EGP-USD exchange rate.

Police to secure churches, malls, cinemas over Christmas holidays: Amer also reported that President Abdel Fattah El Sisi and five of his minister agreed on Saturday to deploy 150k policemen to secure churches, as well as malls and cinemas, during the Coptic holidays.

Heinz exonerated, but Egypt lost export opportunities? Lamees El Hadidy kicked off Hona Al Assema on CBC with the Industry Control Authority (ICA)’s report on Heinz Egypt, which concludes that the company’s products are up to the required health and safety specifications (more on that in Speed Round). The company’s lawyer, Mohamed Hammouda, told Lamees he’s waiting for the nod from his client to seek state compensation for the damage to its reputation done after state inspectors raided its plant (watch, runtime 9:22). Ashraf El Gazayerli, who represents food exporters at the Federation of Egyptian Industries, told El Hadidy that Egypt lost export opportunities as a result of the incident (watch, runtime 5:46).

Kol Youm’s Amr Adib covered President Abdel Fattah El Sisi’s visit to Uganda and started things off with a segment on water consumption in Egypt and the impact of Ethiopia’s Renaissance Dam on the country’s water resources (watch, runtime 2:42). Adib then moved on to discuss Switzerland’s decision to extend the freeze on Hosni Mubarak’s assets, urging the Egyptian government to “reach a settlement with Mubarak to appropriate 50% of his assets abroad,” which rightfully belong to the people (watch, runtime 1:45). Yes, that’s right, folks: It’s Hot Tub Time Machine, the 2011 edition: We’ll have all the USD we can eat and be swimming in roz, if only we could recover Mubarak’s missing bns.

Adib also let his inner Nasserist out in his coverage of president Abdel Fattah El Sisi’s inauguration of 2,000 kilometers of national roadways along strategic corridors. “The bns invested in these roads will be wasted if the government does not build fuel stations, hospitals, and police stations on these roads….maybe the state can consider a partnership with the private sector for that,” Adib said (watch, runtime 6:10). Or, uhm, maybe just let the private sector lead, ya Amr?

Ibrahim Eissa is grumpy: Ibrahim Eissa spent a chunk of the episode criticizing a statement issued by the GCC Secretary General Abdullatif bin Rashid Al Zayani that failed to recognize Qatar’s role in terrorist acts committed in Egypt (watch, runtime 5:59). Eissa then went on to criticize the Arab League and accuse the organization of being a puppet “to whoever’s got the funding,” referring to GCC states.

Fuel price hikes on the horizon? Talk that the Ismail government is planning to raise fuel prices for a second time before the end of FY2016-17 fiscal year has reemerged, with Al Borsa citing unnamed government officials. Officials pointed out that rising crude prices have been fueling (pun intended) the plans, something Oil El Minister Tarek El Molla hinted at when he stated that rising crude will push the subsidies bill closer to the EGP 80 bn range. Earlier in the day Cabinet’s Information and Decision Support Center issued a statement officially denying reports that the government had ordered fuel prices to rise. The statement also put to bed reports we noted yesterday suggesting that the Ismail government had agreed to fertilizer producers’ demands to increase fertilizer prices.

The Finance Ministry has held its ground with the lawyers, who will have to pay a 10% value-added tax (VAT) as per the executive regulations that have begun leaking to the press. The Lawyer’s Syndicate had filed suit to be exempted from that VAT, arguing that their profession enjoys some form of constitutional protection against taxation. (We wish we were kidding. Really.) Accountants will also find their services are subject to VAT as professional services.

Healthcare, financial services will be almost entirely VAT-exempt: The regs will also reportedly confirm that all healthcare services (excluding cosmetic procedures and non-health related commercial activity undertaken by hospitals and clinics) are exempt. Al Borsa’s rundown on the regulations does not specify how private medical practices will be handled. Financials services are also exempt, but the newspaper does not make clear the face of non-core services offered by banks, including fees on safety deposit boxes and trustee services. a point of contention between the Finance Ministry and the Federation of Egyptian Banks. VAT commissioner Abdel Moneim Mattar, however, implied that these services will be taxed under the VAT, Al Mal reports.

Investment bankers, too? We’re also looking for confirmation in the final regulations that non-bank financial services including investment banking advisory, asset management, brokerage, leasing and the rest of them are all VAT-exempt. Per our original primer on the VAT, financial services that are exempt from VAT include services that are the “sole purview of banks”; FX trading; non-bank financial services regulated by the Egyptian Financial Supervisory Authority; insurance and reinsurance; and banking services offered by Egypt Post.

The executive regulations will also set a 5% schedule tax on construction contractors as well as for all “media productions,” the newspaper reports. (A schedule tax is a tax other than the 13% baseline rate in effect from early September of this year, rising to 14% next year.)

The Health Ministry has reportedly reached a final agreement with pharma producers on increases to med prices, sources tell Al Borsa. Health Minister Ahmed Rady has reportedly approved the industry’s demands to raise prices for 15% of locally-produced meds, and 20% of all imported meds. The sources explained that the meds will be classified into three price tiers that each rise by a fixed amount. The Minister is expected to present the decision to cabinet during Wednesday’s meeting for review and approval. Reports we noted yesterday had claimed that pharma companies were inclined to reject this last offer.

El Ezaby Pharmacies responds to claims by Rady, Al Shorouk: El Ezaby Pharmacies is not in the business of importing insulin and it does not control 14% of the pharma market in Egypt, Ahmed El Ezaby said in a letter sent to Al Shorouk. He also refuted claims that he had filed a complaint to Prime Minister Sherif Ismail against Health Minister Ahmed Rady. El Ezaby does not own 130 pharmacies across Egypt, he also noted, but owns a company that manages pharmacies owned by third parties. El Ezaby also stressed that the float of the EGP is creating “real” challenges to the sector, not made up ones as Rady once suggested. He noted that he was unable to clear imported medications from customs after the EGP flotation because, as an importer, he could not bear the entire cost increase, reiterating separately that domestic pharma manufacturers have taken a number of actions voluntarily to reduce the selling price of medications whenever their costs went down.

The Trade and Industry Ministry apparently wants the new Investment Act to drop the one-stop shop. Ministry officials tell Al Masry Al Youm that the proposed bill would conflict with the recently passed State Lands Act, which gives the Industrial Development Authority the right to allocate and privatize land to investors without going through the General Authority for Free Zones and Investment. One-stop shop policy had in the past drawn the ire of other ministries and the private sector for slowing down the process of tendering of land to investors.

Meanwhile, the Federation of Egyptian Industries claims it hasn’t seen a draft of the proposed law. The head of the FEI’s investment committee told the newspaper that the organization only received a basic outline of the law and not the law itself. We’re not taking the FEI’s claim terribly seriously: Other business associations have released notes on the draft. In fairness to the ministry, the FEI rejected Dalia Khorshid’s bill from the word “go” and has been lobbying hard to bring back the pre-2015 investment act.

Banque Misr gets Chinese lifeline, seeks GCC facility: Banque Misr has signed a memorandum of understanding with the Industrial and Commercial Bank of China (ICBC) and the China Export and Credit Insurance Corporation (Sinoinsure) for financing agreements worth a total of USD 1 bn, Reuters reports. A USD 500 mn ICBC loan will be used to shore up Banque Misr’s FX liquidity — drained during the run-up to the float on 3 November — and fund Egyptian-Chinese projects. Banque Misr has also received permission to open a rep office in China. Chinese cash proved key earlier this year: A currency swap with Beijing allowed Cairo to close the USD 12 bn International Monetary Fund facility.

Meanwhile, Banque Misr is seeking a USD 150 mn Islamic finance facility from a syndicate of GCC lenders led by Abu Dhabi Islamic Bank (ADIB), Al Borsa reported. Banque Misr is looking to bring in USD 1.5 bn in funding to finance projects requiring foreign currencies, the newspaper adds.

HSBC Egypt announced it increased its cards’ foreign currency usage limits starting from yesterday. MasterCard Premier credit card holders are allowed to spend up to EGP 50,000 (just over USD 2,700) a month abroad and MasterCard Advance and Visa Platinum credit card holders had their limits increased to EGP 25,000. The limits on purchases using debit cards were set at EGP 30,000 and EGP 15,000 respectively for Premier and Advance clients.

An agreement between the Transportation Ministry and France’s Alstom could be in violation of the law, sources told Al Shorouk. The company was contracted to the complete signalling works in the fourth phase of Cairo Metro Line 3 but is reportedly being accused of bribing a senior official at the National Authority for Tunnels. We would not typically traffic in stories such as this — which are too-often the result of party “A” publicly settling a score with party “B” — but this is the third time in six months that we have noticed these allegations have been mooted, each time in a different media outlet and by a different reporter. The story is worth keeping an eye on, whether because there’s something to the case or whether because Alstom is being attacked on a substantial infrastructure contract.

Careem is a unicorn: Saudi Telecom Company bought a 10% stake in ride-hailing app Careem for USD 100 mn. Reuters said “the transaction, to be financed by the firm’s internal resources, is conditional on meeting all requirements to close the deal, the filing said without elaborating.” It adds that Saudi Telecom already has a stake in Careem through STC Ventures, an independently managed venture capital fund of which it is an anchor investor. Bloomberg has more.

Non-business tweet of the day: From George Washington’s Mohktar Awad, with screenshots to back it up: “Today in innocent or terrorist. Man killed in gunfight labeled an innocent ‘martyr’ by FJP site & ‘resistance fighter’ by pro violence page” (Check out the original tweet with screen shots, its corollary or Awad’s bio.)

Egypt Copts are “stuck between terrorism and discrimination,” Wael Eskandar writes for Open Democracy. In the wake of the terrorist attack on the Coptic Cathedral, he says “the direct attacks on Copts are viewed by some as an attack on national unity rather than directed against Copts, which entrenches us further into a narrative of denial.” He adds, angrily, that Copts are “caught between a state that is not willing to treat them as equals or protect their most sacred sites, and radicals who are willing to kill them on an Islamic holiday to deliver a strong message that they are viewed as infidels and their murder glorified.”

Hamas is providing support to Daesh fighters in Sinai, Avi Issacharoff writes for The Times of Israel. It is providing medical support to fighters and “ignoring the smuggling of weapons to the Sinai Peninsula destined for the extremist organization’s local branch, according to Arab sources,” Issacharoff says. He adds that “despite all the setbacks and challenges, many of them Hamas-inflicted, the Egyptian Army is racking up meaningful accomplishments in its war on Islamist terror in the Sinai, and the security situation has improved substantially in the Sinai Peninsula.”

The lack of a clear economic vision and the frequent flip-flopping on decisions suggest the government suffers from “political blindness,” journalist Sahar El Gaara writes for Al Masry Al Youm. El Gaara seems particularly irked by the government backtracking on lifting tariffs on poultry imports, saying it seemed like the government and monopolists in the poultry industry are in cahoots against the population, but the columnist also lists a number of other decisions she says the government has taken blindly, the repercussions of which the average citizen is left to deal with.

A set of illogical and outdated policies have resulted in brain drain among Egypt’s youth, Sabry Al Shabrawy says in his AMAY column. Al Shabrawy notes, for example, that sending promising students abroad to carry out research, rather than allocating funds to finance the same research domestically, results in the displacement of human talent. The professor of management studies prescribes an overhaul in the country’s approach to managing its human resources, particularly creative talents.

If you think having a kid or three at CAC / MES / BISC / CISE / NCBIS / whatever presents a cultural challenge, try raising a refugee.

Two New York Times reporters do justice to a young immigrant Syrian girl’s dreams and curiosity — and to her parents’ conservatism (including the daylight appearing between mother and father) — in a piece that’s also fundamentally about personal and national identity. It’s one of the most sensitive portraits of cultural adaptation we’ve ever read.

“As soon as Bayan Mohammad, a 10-year-old Syrian refugee, arrived here last winter, she began her transformation. In her first hour of ice-skating, she managed to glide on her own. She made fast friends with girls different from any she had ever known. New to competitive sports, she propelled herself down the school track so fast that she was soon collecting ribbons. Bayan glued herself to the movie ‘Annie,’ the ballet ‘Cinderella’ and episodes of ‘Wheel of Fortune,’ all stories of metamorphosis. As her English went from halting to chatty, she ticked off everything she hungered to do: An overnight school trip. Gymnastics lessons. Building a snowman — no, a snow-woman. ‘I just want to be Canadian,’ she said. …

The family, the Times writes, is being re-shaped: “rewriting roles and rules they had always followed. Abdullah and Eman found their marriage on new ground, the fundamental compact between them shifting. Bayan, their oldest child, was going from girl to adolescent, Middle Eastern to North American all at the same time. She was the one most likely to remember their now-obliterated life in Syria. On some days, her parents believed that she could meld her old and new identities; on others, they feared her Syrianness was being erased.”

Read Wonder and Worry, as a Syrian Child Transformsin the New York Times (leaky paywall).

SNL Egypt does Lamees El Hadidy and Amr Adib: The cast of SNL’s Egypt edition have really honed their celebrity impressions. Two of the show’s cast members did a spot on debate which turned into a spousal tussle with the power couple of Egypt’s talk show circuit (though some might argue the Ike and Tina Turner) Lamees El Hadidy and Amr Adib on Hona El Assema. The decibel level on the Adib impression gave us the same nails-on-chalkboard effect we get from the host. (Watch; runtime: 2:03)

How Zaha Hadid explored architecture through abstract painting: Late architect Zaha Hadid strove to live by the mantra “I think there should be no end to experimentation.” 1843, The Economist’s sister magazine, reviewed an exhibition at the Serpentine Gallery in London that shows how Hadid came up with the designs “for buildings that give physical form to seemingly impossible shapes” by putting pencil and paintbrush to paper. The exhibition, “Early Paintings and Drawings,” shows that art was a central pillar of Hadid’s work and, as Joe Lloyd writes “fizzes with missed opportunity: these buildings never made it beyond the drawing board. In one room, you can see the enormous number of sketches Hadid drew for a single unbuilt project, the Hafenstrasse development in Hamburg. Another shows the many stages of her design process for an unrealised sports centre, the Peak. It is difficult to fathom how the shapes in her artwork might translate into physical structures, which helps to explain why so many of her plans never materialised – where she saw art, developers saw expense. Her greatest influences were niche: Malevich, Lissitzky, Tatlin and Rodchenko – members of the 1920s Russian avant-garde and tireless explorers of geometry.”

Saudi visit to GERD sparks outrage in Egyptian media: Egyptian media is at an uproar after a senior Saudi delegation headed by the Chairman of the Saudi Fund for Development visited the site of the Grand Ethiopian Renaissance Dam on Friday. According to a statement from Ethiopia’s foreign ministry which ran on Ahram Online, “Saudi officials expressed their government’s interest in developing and importing energy from Ethiopia," a statement backed up by Ethiopia’s state television. The move, another notch in the belt of the strained relationship between Riyadh and Cairo, follows King Salman’s visit to Qatar. Naturally, Egyptian media is fuming and criticizing the visits, according to CNN Arabic.

President Abdel Fattah El Sisi was on a one-day visit to Uganda to talk cooperation, Al Ahram reported.

The UK will be providing GBP 1 mn for three years to support start-ups with a social impact as “a show of confidence in both the vibrant start-up scene in Egypt, as well as the number of existing enterprises already tackling social challenges,” according to a statement from the British embassy in Cairo.

Eni has reached an agreement with the government to export some of the gas produced from the Shorouk concession’s Zohr gas field through the processing plant in Damietta, Al Borsa reported. Eni is planning a ground pipeline connecting the Zohr field to the plant, from which the gas would then be exported to Europe, the sources added. Russian media reports had speculated last week that Rosneft is also planning to set up its own pipeline in the mediterranean to export gas from the Zohr field to Europe.

33 companies are bidding over a 20 MW solar power station in Kom Ombo, Aswan that will be built in partnership with the French Development Agency (AFD), Al Borsa reports. The AFD will finance the project through a facility that could be as high as EUR 40 mn. Companies that joined the bid include the Orascom Construction, Infinity Solar, Shanghai Electric and Dongfang Electric.

The government will announce the names of those who will be excluded from the ration card system on 1 January, 2017, Al Masry Al Youm reported. The first revision of the database will remove around 3-4 mn Kramers, according to Al Mal, eliminating deceased card holders as well as those living abroad and repeated cards. The government also asked cardholders in violation of government regulations to voluntarily return the cards free of charge and without any penalty and set the self-snitching deadline at 1 February.

The Supply Ministry canceled its tender to buy this season’s rice harvest due to the high prices quoted by the 43 traders bidding, Al Borsa reports. Supply Minister Mohamed Ali El Sheikh said that the ministry is working to supply adequate amounts of pasta to compensate for the drop in rice supply, while refusing to miss an opportunity to blame commodity traders for causing the rice crisis by way of stockpiling.

The National Telecom Regulatory Authority (NTRA) gave Telecom Egypt (TE) an additional two months to reach an agreement with mobile network operators which would see TE provide services by piggybacking off their mobile networks, Al Borsa reported. The NTRA had initially set 31 October as a deadline for TE, but that had been delayed to this week.

Arafa Holding issued a statement to the EGX denying plans to establish a new garment retail arm. The company noted it was working on expanding its retail presence domestically, but doing so through its existing retail arms Concrete and Brands.

The government committee tasked with reimbursing government contractors for losses incurred during the EGP float has decided to disburse partial compensation to contractors this month, according to the committee’s head Mohamed Nasser. He tells Al Borsa that the committee is looking into each contract to set the amount. The committee is also drawing up guidelines to determine the full amount of reparations that will be paid to each company and will present them to the House of Representatives once it passes the Contractor’s Compensation Act.

The House Planning Committee reviewing legislation to form a youth unemployment fund, and is holding discussions with other House committees on the law, Youm7 reports.

The cost of joining the universal health insurance scheme the government is creating will be 8-9% of a household’s taxable income, Health Minister Ahmed Rady said, according to Al Borsa. The system will be applied gradually across Egypt and is expected to cover the whole country within 7-10 years. Rady hopes the new healthcare system will start to be implemented in 2017.

Switzerland’s Attorney General dropped criminal proceedings against a number of Egyptians and unfroze CHF 180 mn in assets after the Egyptian government reached reconciliation agreements with some of the defendants, Al Mal reports, citing an embassy statement. Six individuals remain under investigation for money laundering, or supporting or participating in a criminal group, and CHF 430 mn worth of assets are still frozen.

President Abdel Fattah El Sisi issued decrees appointing new leaders for the Navy and Air Defence Forces, according to the Defence Ministry. Admiral Ahmed Khaled Said was appointed Commander-in-Chief of the Navy, replacing Osama Rabie, who became the Deputy Chairman of the Suez Canal Authority. General Mohamed Aly Fahmy was appointed Commander-in-Chief of the Air Defence Forces, as General Abdel Moniem El Tarras moved to become the President’s advisor for military affairs.

The Defense Ministry announced that the Navy seized an Iranian vessel in Egyptian waters suspecting it was smuggling narcotics to Egypt. The Ministry says it seized a large amount of white powder hidden on board the ship and will proceed with the necessary legal action. It also published a video of the operation to seize the ship (runtime 01:08).

Cleantech in Egypt is beginning to show signs of consolidation, Rachel Williamson writes for Wamda. She says four areas hold potential right now: “solar water pumps, low powered appliances, biomass, and the trend towards more decentralized power generation, both at small and utility scale.”

The Federation of Egyptian Industries (FEI) will launch today its “Egypt Exports” initiative in association with the Egyptian-Kenyan Business Association and a number of other exporters, Youm7 reports. The FEI will hold workshops to promote export markets to Egyptian businesses in addition to showcasing the current state of the nation’s exports.