Wednesday, 21 December 2016

EGX30 at all-time high, run could continue into 2017


What We’re Tracking Today

“The world’s biggest stock surge after Fed rate hike isn’t done yet” even as the EGX hits a new all-time high: The EGX 30 closed 3.37% higher yesterday, at 12,147.95 points, after hitting a peak of 12,171.66 during trading, its highest level ever. Egyptian stocks are “shrugging off emerging-market losses to post the world’s biggest gains since the Federal Reserve raised interest rates,” Bloomberg’s Ahmed Namatalla writes, quoting EFG Hermes as saying the rally may extend into 2017. Egypt is “disconnected from the negative impact on emerging markets due to rising U.S. rates and a stronger [USD] … People are taking the view that the [EGP] has overshot and will appreciate, in addition to expected earnings recovery next year,” Bloomberg quotes EFG Hermes MENA equity strategist Mohamad Al Hajj as saying. Al Borsa says the rise in yesterday’s trading was driven almost entirely by foreigners, who were net buyers of the market.

Keep an eye today on yesterday’s two top gainers: Global Telecom Holdings (up 12.9% yesterday) and Ezz Steel (up 9.2%), both of which popped yesterday on speculation that transactions will be announced imminently. Market watchers tell us that GTH rose on expectation that Vimpelcom is in the market to acquire some or all of the c. 48% of GTH that it doesn’t already own, while Ezz Steel was up on speculation that it was closing in on an acquisition of a substantial market player.

We love the smell of a good business story in the morning: We’re smiling today news that Hassan Allam has confirmed it is looking at an IPO; CI Capital and a US-based PE outfit Alta Semper have made an acquisition in the Egyptian healthcare products sector; and PHD is going ahead with its EGP 400+ mn securitized bond. More on these and more in Speed Round, below.

Oh, and the executive regs to the VAT law are out. Not officially, but the (inevitable) leak. They look solid on a first glance, adding to our general feeling of happiness and wellbeing this morning. (Yes, we know: We’re happy to be paying a tax, happier still that the basis on which it is being regulated is being made clear. We should probably have our heads examined. But it comes down to this: however much we groused about the delay of the executive regs, Finance Minister Amr El Garhy and his team are bang-on-point with the VAT.) We have more in Speed Round.

On The Horizon

The Ismail cabinet will discuss Investment Minister Dalia Khorshid’s proposed Investment Act on Sunday, 25 December.

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

Enterprise+: Last Night’s Talk Shows

Social media campaign attacking Egyptian industry: Hona Al Assema’s Lamees El Hadidy said there is a “campaign” of sorts being waged on social media to “destroy” Egyptian industry. Using the recent flap at Heinz as an example, El Hadidy said, “I started to feel these campaigns are organized and serving a certain agenda.” Mohamed El Damaty, head of the Federation of Egyptian Industries’ dairy products division and CEO of Domty, phoned in to agree, saying the federation has asked all member companies report campaigns to track down the masterminds (watch, runtime: 10:25).

Lamees briefly mentioned that she is taking legal action against the individuals who allegedly accosted her near St. Mark’s Cathedral last week. “The charge I reported was a murder attempt… I’m sure the Interior Ministry will arrest them because their faces were obvious in the videos shot during the accident,” she said (watch, runtime: 2:06).

The host also covered the World Bank’s approval to disburse USD 1 bn to support job creation and inclusive growth, with International Cooperation Minister Sahar Nasr telling Lamees that the money will be directed towards development projects in Upper Egypt. “The third tranche is supposed to come in late 2017, but we are working to make it prior to that date,” Nasr added (watch, runtime: 8:04).

Lamees also hosted Egyptian-American space scientist Farouk El Baz, who delved into the challenges facing education in Egypt (watch, runtime: 33:14).

Is the House playing silly buggers on the pharma pricing pact? It would appear the House is trying to torpedo the agreement reached between pharma companies and the Health Ministry over rising prices. House Health Committee member MP Ayman Abul Ela called in to Yahduth fi Masr and told host Sherif Amer that parliament will not allow companies to set prices. He even cast doubt about talk that pharma giant Novartis was exiting Egypt, saying the company had issued a denial. Another House Health Committee member, Ahmed El-Argawy, said an agreement between pharma manufacturers and the Health Ministry should have been put to a discussion in the House of Representatives. “There are alternatives steps that could have been taken to compensate manufacturers … such as exemption from taxes or reducing electricity prices for them,” El Argawy said.

MoI has cybercrime on in its sights: Amer also hosted Ali Abaza, head of the Interior Ministry’s directorate to fight cybercrimes, who said the directorate received more than 6,000 reports of cybercrimes in 2016. The directorate is focusing on Facebook, which Abaza said has around 45 mn users in Egypt.

Bellower-in-Chief Amr Adib isn’t happy with the USD breaking EGP 19.50, going on about everything from the rate used at customs to “who is withdrawing USD from the banks” and his hope that Zohr will be our economic salvation (watch, runtime: 46: 22).

We agree with Amr for once: Adib then pivoted to the Daba’a nuclear plant, saying he’s happy the final contracts have been delayed. “Let [Russia] wait … we will sign when they resume their tourism operations to Egypt,” he said (watch, runtime: 3:11).

Speed Round

Speed Round is presented in association with

The VAT executive regulations have leaked: A copy of the executive regulations for the value-added tax (VAT) emerged last night courtesy of Al Mal (view the document in pdf). The newspaper says it has posted the full draft being shopped around town for feedback before it’s issued. Feedback from the business community and accountants has been great, said Deputy Finance Minister Amr El Monayer. The regs are expected to be issued within a week.

The 94-page document effectively sets the procedures, documents and requirements for almost every article of the VAT legislation. We have some highlights below, and we’ll have more once we get our resident taxman to give it a more thorough read-through:

The regs lay out how the VAT is determined for discounts, installments, and custom breaks. For discounts, VAT will be based on the discounted selling price. VAT on installment payments will factor in the interest rates set by the CBE on the day of signing the contract. VAT on goods that receive customs breaks will be determined by using the same pricing mechanism used by the Customs Authority to value the item. Condition and market value will be factored into determining the taxable value of any particular item. The VAT on the sale of used goods will be 30% of market value (Article 11).

Contracts signed prior to the VAT and that continue until after the VAT was brought in must be amended to factor in the VAT. Terms of the original contract will not be changed. This does not apply to seasonal contracts. A tax rebate can be granted on contracts signed with a government body, if the government fails to reprice it after the VAT (Article 12)

Accounting procedures on keeping books, required documents and receipts for tax filing purposes were outlined in great detail in Articles 13-17.

Rebates and Incentives (ie: the lottery): There will be no rebates for exports on used goods. All customs must be cleared on machinery and equipment used for production before a rebate can be issued. The Finance Minister will be tapped to outline the conditions for the lottery (Articles 35 and 74).

Free zones: While most activities in free zones are tax-exempt, the sale of cars into free zones is not VAT-exempt (Article 9).

Special articles on schedule tax: Spare parts and components in the auto industry will not be subject to the schedule tax, but will be subject to the 13% baseline rate. Operators of industries and commercial outlets that sell goods subject to a schedule tax must keep the Tax Authority informed on all shutdowns to production (Article 48 and 9).

On registration procedures: Those who manufacture and sell schedule tax items (such as cars) have 30 days to register. The procedures also shed some light on those making less than the EGP 500K threshold for mandatory registration: If you make more than EGP 150K, hold a tax card and have a registered headquarters, then registration is optional. Once registered with the Tax Authority, you cannot de-register until 24 months have passed (Articles 51 and 22).

The Finance Ministry also released a guide (pdf) with the regs that outlines examples of goods and services subject schedule tax and how to calculate VAT on them. Some goods have a straightforward rate, such as the automotive industry, which has a schedule tax of 30%. The guide provides an equation to apply deductibles in the schedule tax for cars. Construction and development contractors will be subject to a 5% tax, while professional services such as lawyers and accountants will have to pay 10%. The guide then offers equations to calculate the tax for other goods such as tobacco and for applying the schedule tax on imported goods.

The system is so extensive it appears another layer of management was set up. Finance Minister Amr El Garhy formed a VAT department in the Tax Authority headed by deputy tax authority head Mohamed Abdel Sattar to handle the bureaucracy of the VAT, Al Mal reports. Former authority chief Abdel Moneim Matar is still the VAT commissioner who will oversee the system.

The World Bank’s board of directors approved disbursing USD 1 bn to Egypt, the second tranche of a USD 3 bn financing package, Reuters reported. "We are pleased to continue supporting the country’s ambitious program of reforms with a strong focus on job creation and boosting the competitiveness of Egyptian businesses," said Asad Alam, World Bank country director for Egypt, Yemen and Djibouti.

In other news on the foreign assistance front: Egypt will get EUR 420 mn from the European Union “to strengthen social safety nets and foster inclusiveness and sustainable economic development in the country,” according to a statement from the EU delegation in Egypt.

Hassan Allam Holding confirms IPO intentions, eyes stakes in infrastructure projects: Hassan Allam Holding said the USD 20 mn in equity financing it secured from the IFC will be used as a capital increase “to further bolster the Company’s operations and cementing its leading market position while enhancing the Company’s corporate governance standards in anticipation for its potential IPO” in partnership with EFG Hermes. In an emailed statement, the company said it is also looking to “diversify its activities by developing and taking partial ownership stakes in a select number of long-term infrastructure projects in Egypt.”

US-based Alta Semper Capital and CI Capital Partners acquire stake in healthcare products outfit Macro Pharma. The private equity arm of CI Capital Partners and US PE outfit Alta Semper have announced “a partnership” with Macro, the companies said in a joint statement issued last night (pdf). Founded in 2002, by Dr Ahmed El Nayeb and Dr Mohamed Sobhi, Macro’s staff of 750 produces and markets “64 products across seven therapeutic areas, including skin care, haircare, feminine care, anti-scar, oral care, antiseptics and muscle relaxants, under the Gold, Orovex, Verdex, Cordo and Scaro brands.” The company’s footprint spans 50,000 “physicians, centers and pharmacies nationwide,” the statement says. Both El Nayeb and Sobhi will stay on following the acquisition as chairman and CEO, respectively. The statement does not specify the size or value of the stake CI and Alta Semper have acquired. Alta Semper and CI Capital Partners were advised by Matouk Bassiouny and Norton Rose Fulbright. CI Capital Investment Banking acted as the financial advisor to Macro Holding and the founders. Al Tamimi & Company acted as the legal advisor to Macro Holding and the founders.

So what’s Alta Semper, anyway? Alta Semper “looks to invest in high growth, yet defensive sub-sectors within the consumer, healthcare and enabling technology sectors.” The US-based firm was founded in 2015 by Afsane Jetha (formerly MD in charge of African PE at Duet), Ronald Lauder (of the Esthée Lauder family and chairman of Clinique Laboratories) and Dick Parsons (former chairman of both Citigroup and TimeWarner). The transaction is Alta Semper’s first investment in Egypt.

Palm Hills Developments (PHD) announced signing agreements with Sarwa Capital, Arab African International Bank, and Banque Misr for its securitization program. The agreements will allow it to launch an EGP 404 mn securitization bond after receiving the necessary regulatory approvals from the Egyptian Financial Supervisory Authority. PHD says all the proceeds will be used to pre-paying company debt is it looks to deleverage its balance sheet via monetizing up to EGP 2.5 bn in receivables over 2-3 years. The bond will be offered to local financial institutions via private placement over three tranches with coupon rates ranging from 15.79% to 17.39%. “The Bond will be fully underwritten by Arab African International Bank and Banque Misr. Sarwa Capital, Arab African International Bank and Banque Misr will be issuing the Bond and promoting the subscription. Sarwa Capital will be acting as the transaction’s financial advisor. Arab Legal Consultants will be acting as the legal advisor for the securitization process, and Al Kamel Law will be acting as the legal advisor of PHD. Arab African International Bank will be acting as the sole custodian and PHD’s financial advisor.” Full details on the issuance can be found here.

Egyptian-American Enterprise Fund (EAEF) Chairperson James Harmon says the Fund sees opportunities in Egypt “partially because many other investors are frightened… when investors are frightened, the return on investment is usually very good. The greatest opportunities for me came when others were frightened.” Harmon told Daily News Egypt he hopes to “help SMEs and some larger companies that don’t have funding.” He says the EAEF is looking at increasing financial inclusion and expanding into healthcare, with an on supporting education and agriculture in the future. Harmon added that the EAEF focuses on investments with a positive development dimension, but believes protecting the most vulnerable groups in society will be key. He called the float of the EGP a positive development, expecting a major increase in FDI and praised the government’s reform measures, saying they “have been critical in demonstrating the government’s commitment to taking difficult measures that will ultimately lead to economic growth, and the market has reacted positively.”

Yes, we’ve heard this a couple of times before, but: Pioneers Holdings will relist DBK Pharma on the EGX in early 2017, a source told Al Borsa. The company is looking to complete the listing by “mid-next month at the latest” and will include 35% of the company’s shares. The source said the company shares’ fair value will rise following the cost increase that came with the EGP flotation. Another anonymous “source” had told Al Borsa in October that DBK Pharma set to list by the end of November 2016.

Egyptian ride-hailing app Ousta has filed a complaint against Uber at the Egyptian Competition Authority accusing it of anticompetitive behavior in the domestic market, Al Mal reported. The accusation follows Uber’s decision to not raise fares and to forgo the 20% service fee it charges drivers until the end of January, 2017.

Meanwhile, Uber competitor Careem is planning a 2019 IPO: The MENA region’s first “unicorn” is heading for a 2018-19 IPO, Careem CEO Mudassir Sheikha told Bloomberg yesterday. The company, which closed earlier this week a USD 350 mn funding round, plans to open in Algeria and Tunisia next year. (Good luck in Algeria, guys…)

Endeavour selected two Egyptian companies among the 37 entrepreneurs at its 68th international selection panel. Endeavour tapped Yaseen Abdel-Ghaffar from SolarizEgypt, which “designs, installs, and commissions grid-connected PV solar power plants to supplement power supply to residential and mid-sized commercial entities in Egypt.” Also selected were Waguih Iskander and Emad Iskander, who run Family Corporation, a “transport company, offering complete human and goods transportation solutions to its corporate clients, including large local companies and multinationals.” In total, Endeavor now supports 1,403 entrepreneurs leading 875 companies in 25 growth markets around the world.

Expanding the social safety net and increasing commodity subsidies through the ration card program will cost the state an additional EGP 8 bn in FY2016-17, said Deputy Finance Minister Mohamed Maait. Expanding coverage in the Takaful and Karama welfare programs to c. 1.5 mn families will cost EGP 3 bn, while raising the allocation of commodities on ration cards to EGP 21 per month from EGP 18 will rack up a EGP 5 bn tab, he tells AMAY. These costs do not even factor in the raising the price the government pays farmers on crops. Maait says that the government may not have to amend the FY2016-17 budget or go Parliament to request additional credit, as the budget has reserves on hand to cover the increases.

This comes as the Supply Ministry issued a statement reassuring moochers everywhere that 10 mn Kramers will not lose their welfare benefits under the supply smart card system, Al Mal reports. As we noted earlier this week, 3-4 mn had been slated for removal from the system during the first phase of the purge. Reports had emerged last month citing ministry sources that the government was aiming to get 10 mn people who were not entitled to subsidies off of the welfare rolls. Those targeted are not qualified beneficiaries, have duplicate cards or are using the cards of dead people or citizens living abroad, the government said at the time.

The House of Representatives approved legislation to establish the Food Safety Authority, Trade and Industry Minister Tarek Kabil announced, according to Al Mal. Kabil said the entity should be up and running within a year and it would be responsible for all regulation and oversight of the food market, making the process more effective. The agency will focus on improving the quality of products in the market, Kabil added.

A rival to the automotive directive? CBE governor Tarek Amer formed a committee to look into a strategy for the automotive sector following a meeting with the Egyptian Automotive Manufacturing Association (EAMA) and Investment Minister Dalia Khorshid, Al Mal reports. The committee, to be headed by EAMA CEO Hussein Moustafa, is to develop a strategy that will boost domestic component manufacturers, draw in foreign investment and raise exports, said EAMA member Khaled Saad. Sound familiar? They’re largely the same goals as those of the automotive directive, which EAMA vehemently opposed for “catering” to larger assemblers and neglecting the auto-feeder industry.

Ten-year-old Maggie Mamoun has succumbed to injuries she sustained in the terrorist attack on the Coptic Cathedral in Cairo, becoming yesterday the 27th person to die as a result of the attack. “The little girl, Maggie Mamoun, became the face of the Coptic community’s grief in the days following the horrific bombing, with photos of the smiling child circulating on social media, along with prayer requests,” the Associated Press says. “Maggie’s friends and family say she was an avid volleyball player, a ballet dancer and an actress in religious films made by local TV stations. Her volleyball coach, Mohammed Abdu, said she helped her team defeat a rival at a match on Friday. ‘She told me ‘If we win, I will dance.’ She loved dancing,’ Abdu said. ‘Now she is in God’s hands,’” Maggie Michael had written.


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Egypt in the News

It’s like waking up in a kind of Bizzaro World version of Egypt circa 2011: The hottest story on Egypt in the international press this morning is the state’s blocking of Moxie Marlinspike’s encrypted messenger app Signal, which we first noted yesterday. The story, broken by Vice’s Motherboard, has gone viral, with everyone from the Associated Press to PC World and Engadget doing their own takes.

Signal is the preferred tool of privacy advocates (it doesn’t send your contact list directly to its server and it doesn’t store message metadata), but you’re safe to rely on WhatsApp: The exact same end-to-end encryption technology Signal delivers is also baked into WhatsApp.

Russia’s President Vladimir Putin is using oil and gas agreements to magnify military power in the Middle East, Marc Champion and Javier Blas argue in Bloomberg. “Russia is really keen to increase leverage in the Middle East by every means,” said Fyodor Lukyanov, chairman of Russia’s Council on Foreign and Defense Policy. Champion and Blas point to Rosneft’s recent acquisition of a stake in the Zohr gas field and to the “strong relationship” Putin has built with President Abdel Fattah El Sisi. They also note that Russian arms sales to the region are also increasing; “Russia has benefited from an effective, if gruesome advertisement for its weaponry in Syria, as well as U.S. disengagement from the region, said Nikolay Kozhanov, a Russia-based academy associate of Chatham House.” Putin’s next big bet in the Middle East, after Syria, is Libya as he continues to forge ties with military leader Khalifa Haftar, Kozhanov says.

The FT’s BeyondBrics blog also gets in on the Putin action, with Egypt getting a plug in “Putin is exporting ‘sovereign democracy’ to new EM allies.”

Other stories on Egypt in the international press making headlines this morning:

On Deadline

The media crusade that is indiscriminately painting all business leaders as crooks has severe negative repercussions on the country’s economy, particularly when it comes to attracting foreign investment, Mostafa Al Naggar writes for Al Masry Al Youm. Al-Naggar highlights the importance of the private sector to the economy as a whole, and to certain sectors -—such as tourism — in specific, and says media personalities who spread the “poison” of badmouthing the business community are holding back Egypt from developing like other countries.

Worth Reading

Fellow Luddites: We haven’t read beyond page 10 yet, but “The Revenge of the Analogue: Real things and why they matter” looks interesting whether you — like us — are a tech geek who still loves all things physical or whether you wish the smartphone could be uninvented. The New York Times’ influential Michiko Kakutani named it one of her top 10 books of 2016, singling it out as “a powerful counternarrative to the techno-utopian belief that we would live in an ever-improving, all-digital world.” (Read her full review of the book here.) We’ve downloaded The Revenge of Analogue to our Kindle and it’s in our TBR stack for our mini-break next week. (Yes, we know, irony, et cetera, et cetera, ad nauseum, but we live in Egypt, where the selection of physical books has been rather slim of late.)

Worth Watching

As if we didn’t have sufficient reason to dislike him before: Facebook founder Mark Zuckerberg brings Iron Man’s Jarvis to the real world. The result of “a year of coding,” Jarvis is an artificial intelligence system that allows Zuckerberg to control everything in his house through his phone. Named after the AI system developed by Tony Stark / Iron Man, Jarvis can do everything from turning the lights on and off to keeping baby Maxwell Zuckerberg entertained (and educated) with an early-morning Mandarin lesson — all in Morgan Freeman’s voice. (watch, runtime: 2:13)

Diplomacy + Foreign Trade

Something is afoot in East Africa, and it’s not great for Egypt: Qatar and Ethiopia signed 11 agreements and MoUs yesterday to “strengthen bilateral relations,” Anadolu Agency reported. This came in at a joint press conference attended by Qatari Foreign Minister Mohammed bin Abdulrahman Al Thani and his Ethiopian counterpart, Workneh Gebeyehu, who said “both countries had agreed to take their relations to the highest level.” The move follows a visit to Ethiopia’s Grand Ethiopian Renaissance Dam by senior Saudi advisors to the King Salman, a month after the king himself was in Qatar to strengthen ties.

Speaking of which, is Saudi trying to escalate its tiff with Egypt to a full-on trade war? Saudi Arabia’s Agriculture Ministry has ‘temporarily’ banned the import of all kinds of peppers from Egypt, Al Masry Al Youm reported. The decision came after what the ministry calls “evidence of contamination with remnants of pesticides.” While the crop seems minor compared to, say, the Aramco shipments ending, the sudden nitpicking over pepper does appear passive aggressive in light of the tiff. The Agriculture Export Council doesn’t see that way, though. It opened its own investigation, said the council’s head Hany Hussein. He tells Al Mal that Saudi authorities have not formally informed Egypt and has asked the Trade and Industry Ministry to inquire about the violations so “corrective actions” are taken here at home. The ban will be enforced in February, he added.


Government to receive new waste-to-energy tariffs by end of December

A committee with composed of representatives from five government ministries tasked with amending the tariff the state would pay under the waste-to-energy feed-in tariff program will present its recommendations to cabinet by the end of this month, Al Borsa reports. Sources close to the committee told the newspaper that the suggestions include increasing the tariff to EGP 1.02-1.08 per kWh from EGP 0.92 per kWh, to account for cost increases after the EGP floatation.

Shell to sell its Rashid Rosetta field

Shell is reportedly looking to sell the Rosetta concession in Rashid, Al Borsa says.


El Sisi approves plans to update six Suez Canal ports

President Abdel Fattah El Sisi has approved plans to upgrade and develop six Suez Canal ports before 30 June 2018, Al Mal reports. The plans aim to upgrade the services provided at the ports and attract new shipping lines, said Suez Canal Authority chief Mohab Mamish, who is overseeing the port development project.

Planning Ministry announces governorate development plan with investments of EGP 570 bn

The Planning Ministry announced its sustainable development plan for governorates, with target investments of EGP 570 bn, 51.1% of which the government hopes will be ponied-up by the private sector, according to Al Masry Al Youm. Priority areas include construction, energy and water, transportation, social services, and tourism, among others, to reduce unemployment and improve living standards for citizens. Planning Minister Ashraf Al Araby also said that the ministry is planning an international economic conference for March of next year, according to Al Mal, to mark the one-year anniversary of the launch of the Egypt 2030 development plan. Meanwhile, the planning and investment ministries are working together to release an investment almanac to present to investors during the first quarter of 2017, Al Borsa reports.

Basic Materials + Commodities

Gov’t to increase purchase price of sugarcane from local farmers by 25%

The Supply Ministry has increased the price it pays local farmers for sugarcane by 25%, Reuters reported. The government will be the sugarcane from farmers for EGP 500 a tonne, up from the EGP 400 a tonne it paid them last season. “Sugar has become scarce in recent months. The government took control of stocks to counter what it said was an epidemic of hoarding by merchants reacting to rising prices amid a shortage of foreign currency before the local currency flotation,” the newswire says.


Regulators should make sure retailers are not increasing appliance prices excessively -Electrolux Egypt

The prices of electrical appliances should have increased at retailers by no more than 20-25%, Electrolux Egypt production planner Ayman El Mestikawy told Al Shorouk. It is the duty of the Consumer Protection Agency and other regulatory bodies to clamp down on retailers selling the products at higher prices, he said. He also noted that his company is looking to increase the proportion of Egyptian components in the products it manufactures domestically and to increase its exports to new markets, including South Africa.

Health + Education

Pharmacists reject med price increases, ask to be part of talks

The Pharmacists Syndicate will reject any price agreement between manufacturers and the Health Ministry if the nation’s dispensaries are not included in the talks, Al Masry Al Youm reports. The syndicate is threatening legal action if a deal is implemented without their concerns being taken into account (though the grounds on which they would file remain a mystery to us).

NWRC signs research agreements with Chinese university

The National Water Research Center (NWRC) signed an agreement with China’s Wuhan University to have it finance a number of research projects, Al Shorouk reported. The exact amount of the financing was not provided but the NWRC said the package will also include a number of scholarships for Egyptian researchers.

Other Business News of Note

Interior Ministry cancels Le Marché on security grounds

Furniture expo Le Marché has been postponed, according to Tarek Nour, Chairman of Tarek Nour Communications, the event’s organizer. He told Al Borsa the Interior Ministry had informed him the event was being pushed back to another date on “security concerns.” Nour had attempted to sway the ministry and reach a compromise to have Le Marche held at its prescheduled time. Members of the Federation of Egyptian Industries have reached out to the House of Representatives for support, according to Al Mal.

DHL looking to boost investments in Egypt to EGP 1 bn

DHL plans on boosting its investments in Egypt to reach EGP 1 bn “during the coming period,” the company’s executive director Nour Soliman said, Al Mal reporting. Soliman said that DHL’s investments in the country currently amount to EGP 500 mn. The announcement came as DHL said it would begin slapping messages related to Egypt’s “Vision 2030” on all envelopes and boxes originating from Egypt. Under a similar previous agreement, the company ran messages including ‘Invest in Egypt’, ‘Trade in Egypt’ and ‘Visit Egypt’ on more than 2 mn boxes and envelopes, the company said in a statement (pdf).

Legislation + Policy

Natural Gas Act moving along at House of Representatives

The House of Representatives’ committee on energy is holding sessions to discuss the new Natural Gas Act, Al Shorouk reported. The legislation aims to deregulate Egypt’s natural gas industry and help turn Egypt into a regional energy hub. MPs said that they hope to deregulate the market gradually, in tandem with the gradual subsidy phase-out.

National Security

Egypt, Bahrain begin joint military drills

Egypt and Bahrain are holding joint military exercises, Ahram Online reports.

On Your Way Out

The Interior Ministry announced police forces have arrested five individuals in Port Said for staging fake “Aleppo” videos. One man was detained for staging the film. The purported footage showed a girl filmed covered in fake blood. The Independent and Sputnik covered the story.

The Walking Dead, Egypt style: The government is reportedly in talks with three Chinese companies to provide the USD 20 mn needed to bring El Nasr Automotive Co, back to life, according to Al Mal. In September, the Holding Company for Engineering Industries said it wanted to resume manufacturing at the plant as early as next year. If you’re a newbie here in Egypt: Don’t get excited. The story that El Nasr will be restructured / received an injection of capital from “x” company or “y” country / be brought to life by Government Juju Magic crops up just about once a quarter.

The markets yesterday

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EGP / USD CBE market average: Buy 19.1343 | Sell 19.5171

EGP / USD at CIB: Buy 19 | Sell 19.25

EGP / USD at NBE: Buy 19 | Sell 19.2

EGX30 (Tuesday): 12,147.95 (+3.4%)
Turnover: EGP 2.3 bn (418% above the 90-day average)
EGX 30 year-to-date: +73.393%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session 3.4% up. Yesterday’s top performing stocks were Global Telecom, Ezz Steel, and Telecom Egypt. On the downside, the worst performing stocks included Amer Group, Orascom Construction, and Elsaeed Contracting. The market turnover was EGP 2.3 bn and foreign investors were the sole net buyers.

Foreigners: Net long | EGP +112.0 mn
Regional: Net short | EGP -101.2 mn
Domestic: Net short | EGP -10.8 mn

Retail: 67.2% of total trades | 62.8% of buyers | 71.6% of sellers
Institutions: 32.8% of total trades | 37.2% of buyers | 28.4% of sellers

Foreign: 16.8% of total | 19.3% of buyers | 14.3% of sellers
Regional: 11.2% of total | 8.9% of buyers | 13.4% of sellers
Domestic: 72.0% of total | 71.8% of buyers | 72.3% of sellers

WTI: USD 53.55 (+0.47%)
Brent: USD 55.35 (+0.78%)

Natural Gas (Nymex, futures prices) USD 3.32 MMBtu, (+1.65%, January 2017 contract)
Gold: USD 1,133.80 / troy ounce (+0.02%)

TASI: 7,031.1 (-0.6%) (YTD: +1.73%)
ADX: 4479.3 (0%) (YTD: +3.99%)
DFM: 3,505.2 (-0.8%) (YTD: +11.24%)
KSE Weighted Index: 376.7 (-0.7%) (YTD: -1.31%)
QE: 10,393.8 (+1.2%) (YTD: -0.34%)
MSM: 5,714.9 (-0.3%) (YTD: +5.71%)
BB: 1,191.34 (+0.22%) (YTD: -2.02%)

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22-24 December (Thursday-Saturday): Innovations to Solve Egypt’s Challenges in the Next Millennium conference, Zewail City of Science and Technology, Cairo.

23-24 December (Friday-Saturday): Startup bootcamp Create in 48 Aswan, organised by USAID’s SEED Project, Arab Academy for Science and Technology and Maritime Transport, Aswan.

29 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee meets to review rates.

29-30 December (Thursday-Friday): Cairo’s 5th International Conference on Business, Economics, Social Science, and Humanities (BESSH-2016), Intercontinental Citystars, Cairo.

07 January (Saturday): Coptic Christmas, national holiday.

25 January (Wednesday): Revolution (police) day, national holiday.

30 January – 2 February 2017 (Monday-Thursday): Arab Health Exhibition, Dubai International Convention & Exhibition Center, UAE.

14-16 February 2017 (Tuesday-Thursday): Egypt Petroleum Show 2017 (EGYPS), CIEC, Cairo.

31 March – 03 April (Friday-Monday): Cityscape Egypt conference, Cairo International Convention Centre, Cairo. Register here.

16 April (Sunday): Coptic Easter Sunday.

17 April (Monday): Sham El Nessim, national holiday.

27 May (Saturday): First day of Ramadan (TBC)

26 June (Monday): Eid Al-Fitr (TBC)

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.