Sunday, 22 January 2017

Stock market stamp tax could be reintroduced


What We’re Tracking Today

We hope you have stocked up on salt, because you will need it this month with all the rumors of the cabinet shuffle flying out the woodwork. Economic and sovereign ministers are reportedly among the list of 11 portfolios who will be replaced, government sources tell Al Shorouk. These include the ministers of investment, foreign affairs and the interior. Other ministries who will see new heads include the ministers of higher education, transportation, agriculture, tourism, labor, civil aviation and endowments. Electricity Minister Mohamed Shaker will not be replaced in the upcoming cabinet reshuffle, unnamed government officials tell Al Borsa. The source issued a disclaimer stating that this was only a preliminary list and that the public will not hear of the finalized list until right before the announcement. Other sources appear to confirm to Al Masry Al Youm that some economic ministers will be on the out. They also imply Health Minister Ahmed Rady’s departure is a sure thing. Anonymous officials had told the newspaper last week that the economic group ministers charged with managing the reform agenda will not be touched. Security sources have said it was unlikely for Interior Minister Magdy Abdel Ghaffar will be replaced. We expect the issue to dominate headlines this month, and we urge readers not to succumb to the speculation.

Here’s what we do know: Prime Minister Sherif Ismail told MENA on Thursday that the list was not finalized and that he has been holding meetings on Saturday and today with ministers to set up the list, which will be completed and submitted to the House of Representatives next week. Ismail expects the House to approve the list before the end of the month, according to Reuters. Al Shorouk noted that Prime Minister Sherif Ismail met with President Abdel Fattah El Sisi to discuss the shuffle.

An inch closer to bringing back Russian tourists? The opening ceremony for the new Russian consulate in Hurghada will be held today, with Russian Ambassador Serge Kirpichenko in attendance, Ahram Gate reports. Last word on tourists coming back was the same as months ago, but this could be a step in the right direction.

Barack Obama’s Friday morning musings: “let’s get this over with.” In case you teleported to the interdimensional realm where Smurf Island now resides, President Donald J. Trump (boy, this is going to take some getting used to) took the oath of office on Friday to become the 45th president of the US. The bad elitists in the room (the media) is reading doom and gloom into his inaugural address, which The New York Times perceive as a rallying call for his populist base. Headlines of the low turnout at his inauguration were topped by news of protests nationwide. Women from around the world (and even the Antarctic) rallied against the incoming president for his misogynist rhetoric during the campaign, Time reports.

Market watchers are one edge over which way the wind blows. After stock markets rallied Friday morning, continuing the upward trend since the election, the inauguration speech put a damper on hopes with allusions to “America first” and “protection,” CNBC reports. Over the weekend, George Soros doubled down on his prediction that a Trump Presidency would be bad for the market in an interview on Bloomberg. PIMCO co-founder and Janus bond strategist Bill Gross was also skeptical. In a speech last Wednesday, Fed chair Janet Yellen reminded Trump in a speech on Wednesday that the Obama administration never pressured the central bank, and urged for the policy to continue. Yellen said she expects interest rates to rise a few times a year until the end of 2019, Market Watch reports.

President Abdel Fattah El Sisi issued an official statement to congratulate US citizens on the inauguration.

Turkey is now one referendum away from turning into the Banana Republic of Turkey, after its parliament passed on Friday and succumbed to the tantrums of its whining toddler-in-chief. The new constitution cedes greater executive powers to Erdogan, who has 60 days from signing the new constitution into law to start a referendum. DW has a piece on what to expect from a referendum.

28th African Union Summit begins today in Addis Ababa, Ethiopia. Eyes turn to Gambia after Iongtime Gambian ruler President Yahya Jammeh fled the country after facing an impending invasion from Senegal to force him to honor the results of recent presidential elections, Reuters reports. Election winner Adama Barrow has been invited to attend the African heads of state meeting.

Also taking place today is AmCham’s Business in Africa special luncheon. The meeting, organized in cooperation with the Federation of Egyptian Industries, will highlight business opportunities in Africa.

What We’re Tracking This Week

The Meteorological Authority warns citizens of driving in the early mornings, as that heavy fog we’ve been seeing all week will intensify today and continue until Wednesday, Ahram Online reports.

We don’t know about you, but we’re bridging this week. We’ll be taking Wednesday and Thursday off. It’s our last national holiday until 16-17 April, when we’ll be celebrating Eastern Easter and Sham El Nessim.

On The Horizon

The IMF’s mission chief to Egypt, Chris Jarvis, will be visiting Egypt at the end of February to review and assess progress with the economic reform program. According to the fund’s schedule, the USD 1.25 bn second tranche of the USD 12 bn loan should be disbursed by 15 March, contingent on the results of the first review.

Enterprise+: Last Night’s Talk Shows

Amr Adib spent most of last night’s episode of Kol Youm covering the inauguration of US President Donald Trump on Friday. Adib spoke of the women’s marches which took place worldwide in opposition to Trump, saying, “The number of participants in these marches exceed the number of people attended the inauguration yesterday,” (watch; runtime: 3:25). Filling in for his fashion reporter, Adib noted that Melania Trump was wearing a Ralph Lauren-designed dress (watch if you are inclined to such gripping fashion analysis; runtime: 1:31). We hope The View is taking notice.
For some actual analysis, we bring Hona Al Assema’s Lamees El Hadidy (the brainy one in this marriage) who brought in political analyst Abdel Moneim Said to speak on Trump’s policies vis-a-vis fighting terrorism in the Middle East (watch; runtime: 8:01).

On to more local affairs, Lamees covered the reported increase in subsidized infant formula prices to EGP 43 per pack from EGP 13. Lotfy Omar, chairman of baby formula distributor Lyptus Egypt, told Lamees that the increase came as a result of the float and the doubling of LC-debt by importers. Lamees also noted that non-subsidized formula was also seeing inflation (watch; runtime: 33:14).

El Hadidy also looked at the arrest of a Finance Ministry real estate tax advisor on bribery charges. The accused Tarek Farrag was reportedly photographed while receiving a EGP 1 mn payoff from a real estate developer looking to buy state land at below market value, Administrative Control Authority officials said, according to AMAY (watch; runtime: 5:17).

Lamees concluded her episode with the 4+1 Debate, which talked about Mohamed Aboutrika’s listing in a terrorists watchlist (again with this), Tiran and Sanafir (ugh) and the possibility of banning the niqab in Egypt (watch: runtime: 35: 41).
Al Hayah Al Youm’s Lobna Assal showcased a report on the opening of Nile Consumer Complex (a subsidized goods outlet) in El Tawfikia by the Supply Minister, who called on people to reduce their consumption (watch: runtime: 1:43). She also aired a report on the opening of Shoubra-Benha road, which connects to the Cairo Ring Road (watch: runtime: 2:05). Trump was also ever-present in the episode.

Speed Round

Speed Round is presented in association with

Egypt is considering temporarily reintroducing a stamp duty on stock market transactions after the tax was frozen in 2014, two finance ministry sources told Reuters on Thursday. Reuters’ sources spoke after the IMF loan documents to Egypt said some form of a capital gains or stamp duty will be implemented in FY2017-18. "We are studying temporarily re-imposing a stamp duty on stock market transactions pending the return to a capital gains tax, which has been postponed since May 2015," one of the sources told the newswire. "Now is the right time to impose a tax on the bourse, as it is in its best possible state. The tax rate will be much higher than it was previously, which was 1 pound per 1,000. We are now looking at the volumes and values of stock market transactions to make it fair," another Finance Ministry source said.

…The return to a capital gains tax is not a foregone conclusion, however: The Finance Ministry issued a statement saying it is working on getting the implementation of the capital gains tax delayed for three more years. Implementing the capital gains tax was put on hold for two years in May 2015. The ministry said it is still bound by the supreme investment council’s decision to suspend the implementation of the capital gains tax until 16 May, 2017, but that it is also looking on amending the provisions for the tax itself along with “other investment law incentives” to be included with the income tax law. The ministry said it is aiming to have the provisions passed on to parliament for approval before the expiration date in May and stressed that the IMF’s report is not at odds with the decision to delay the implementation of the tax. The EGX30 lost 3.74% on Thursday following the reports.

Speaking of taxes, parliament and the government appear to not see eye to eye on raising the minimum annual income to be taxed to EGP 23,000 from EGP 13,500 (surprise, surprise). Deputy Finance Minister Amr El Monayer denied the ministry was preparing a draft to amend the Income Law to factor in the increase, Al Masry Al Youm reports. We can assume then that this will not be part of the new Income Tax Law announced by Finance Minister Amr El Garhy. As we noted earlier this month, parliament had agreed to raise the basic tax exemption from EGP 13,500 as part of an effort to ease the pain of the ongoing economic reforms. Meanwhile, The Federation of Egyptian Industries (FEI) has sent a report to El Garhy voicing its support of the move, FEI head Mohamed El Sewedy told Al Mal.

Egypt is the world’s 12th riskiest market on Bloomberg’s Global Risk Briefing for 2016. The Country Risk Score is calculated using indicators for various financial, economic, and political risks measured on a scale of 0-100, with the higher end representing less overall market risk. Egypt’s low score of 11.0 was the result of various factors, including low foreign currency reserves, volatility in the local currency, and high inflation and unemployment rates.

Egypt was also ranked at 73 of 79 on the World Economic Forum (WEF)’s Inclusive Growth and Development Index (IDI) (pdf). “The country struggles with many aspects of inclusive growth,” the report states, arguing that “despite history of entrepreneurship, business and employment creation remain constrained by insufficient finance, poor transport infrastructure, and pervasive corruption,” in addition to poor education outreach.

Africa’s stock investors are turning to Egypt and away from Kenya, Adelaide Changole writes for Bloomberg. The EGX30 is at its highest level relative to Kenya’s benchmark index since 2008 following the flotation of the EGP. Rencap chief economist Charles Robertson says the Kenyan government’s decision to impose a cap on lending rates along with the rising oil prices and looming elections there are making Egypt a more attractive option. Also bullish on Egyptian equities is Ami Kemppainen, who manages a fund at Terra Nova Capital Advisors’ Evli Emerging Frontier. Kemppainen says his fund is long on El Sewedy Electric and says Egypt “has the potential to rise and grow.” His favorite markets for 2017 also include Vietnam, Pakistan, and Malaysia. Separately, Investment Frontier published a pretty basic beginners’ guide on investing in Egypt, saying it “may finally be in a position to make sense as a destination for foreign investors.”

The Trade and Industry Ministry has its strategy to develop export markets in Africa, said minister Tarek Kabil. The strategy has identified export opportunities worth approximately USD 18 bn dollars, which is five-fold the current value of our exports to the continent, Al Ahram reports. According to the strategy, Egypt should be capitalizing on food, medical products, and construction materials, as well as chemical and engineering products. The strategy will focus on 12 markets, where four permanent Egyptian logistics hubs will be set up. Aid to exporters will be channeled through the Egyptian Export Development Bank, said Kabil.

Vodafone becomes first company authorized to launch 4G nationwide: Vodafone Egypt announced that it has met all the necessary conditions to roll out its 4G services nationwide, making it the only company in Egypt authorized to launch the service, Al Mal reports. Separately, the National Telecommunications Regulatory Authority (NTRA) has asked mobile network operators (MNOs) to stop their trial launch of 4G services, a source told Al Masry Al Youm. NTRA believes the 4G trial is affecting the quality of the 3G services supposed to be provided, particularly as user complaints increased. MNOs had reportedly begun trialing 4G services on existing bandwidths allocated to 3G services as they wait for NTRA to grant their bandwidths allocated to 4G.

The Consumer Protection Authority (CPA) has referred e-commerce platform Jumia to prosecution for offering unlicensed painkillers after a customer shopping on Jumia lodged a complaint with the CPA, Al Borsa reports. Jumia’s CEO has denied the company is legally responsible for the incident, which he believes is nothing more than a conflict between competing pharmacies, according to Al Borsa, while Al Mal reports that Jumia has removed the pharmacy responsible for importing the medicine from its platform.

Air France was allowed to repatriate some of its profits in Egypt abroad, but had to absorb the impact of the EGP devaluation, Air France KLM’s Egypt Country Manager Cees Ursem told Al Borsa. The company received approvals to repatriate its profits although it has only opted to transfer a small amount, Ursem says. He added that the airline is going to use new Boeing-787s on its Cairo-Paris route, but said the company will not increase the number of weekly flights on the route from the current six.

The tally from Davos: Like that favorite uncle who comes home from abroad bearing gifts, the Egyptian delegation to the World Economic Forum has returned with some promising leads. The Swiss Agency for Development and Cooperation (SDC) is investing EGP 1.6 bn in Egypt in the coming four years, said SDC director Manuel Sager following a meeting with International Cooperation Minister Sahar Nasr on the sidelines of the WEF to discuss the SDC’s investment strategy, Al Mal reported. Nasr had also met Visa’s vice chairman for risk and public policy Ellen Richey to discuss further cooperation in providing electronic payment services to the poor. Nasr also sat down with Siemens CFO Ralf Thomas to discuss the economic reform agenda, AMAY reports.

This comes as Ariston and K-Cap are looking to invest in Egypt, the companies’ heads told Trade and Industry Minister Tarek Kabil, according to Al Mal. Italian company Ariston will look into manufacturing its heating system products in Egypt, while petroleum and petrochemicals maker K-Cap wants to invest in Egypt’s fertilizer market. Meanwhile, Turkish retail giant Koç Holding is looking to expand in Egypt, Al Shorouk reports. At a sit-down with Investment Minister Dalia Khorshid, the CEO of the Koç — which owns the Beko retail chain — announced that it plans to open retail outlets nationwide. Khorshid also met with senior executives of Citibank, Credit Suisse, and Al Futtaim Group, who have expressed interest in participating in the ministry’s upcoming tour to promote investments in Egypt.

Suez Canal revenues dropped by USD 170 mn y-o-y to record USD 5.01 bn in 2016, Reuters’ calculations showed. The canal generated USD 5.18 bn in 2015.


Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Egypt in the News

While tensions between Egypt and Saudi Arabia are high, Iran is seen as pushing Iraq to broker Egypt’s inclusion into the so-called “Axis of Resistance,” writes Mustafa Saadoun for Al-Monitor. The axis can provide Egypt with cheaper oil than Saudi Arabia could, he adds. Rapprochement between the countries could mean an alliance to fight terrorism and face the economic crises, said Iraqi Foreign Minister Ibrahim Al Jaafari. Egypt’s distance from Saudi Arabia brings it closer to Iran, which heads the Axis — made up of Iran’s regional allies of Syria, Hezbollah, and Iraq.

Egypt’s last minute 1-0 win over Uganda in the African Cup of Nations was featured heavily the international press overnight, with many, including Reuters, BBC, ESPN, Eurosport, Yahoo Sports, Sports24, and

Egypt hearts The Donald: Support for Donald Trump among Egypt’s “anti-Islamist establishment” remains strong, writes Rick Lyman for The New York Times. “On the street, long-simmering anti-American sentiment seemed to fuel a more subdued attitude toward the new president,” he says. He also notes Al-Ahram columnist Hany Assal’s critical remarks, accusing democratic liberals that oppose Trump of placing obstacles in his way, “‘trying to start a fight with Russia for no reason.” NYT’s Mona El Tahawy managed a facile comparison of Trump and El Sisi.

Many of the cafes and businesses on the Alexandrian coast have begun adjusting to extreme weather without making the link to climate change, Ruth Michaelson writes for The Guardian. “The coastal waters are inching closer to buildings and flooded ancient structures, including the Greco-Roman tombs at Anfushi. Seawater seeping into the groundwater has also made the fragile ground more unstable, resulting in the alarming collapse of some of the city’s buildings,” she warns. Increased awareness among the population and more stringent urban planning is needed, environmental studies professor Mohamed El Raey tells Michaelson.

Egypt is looking to bring the leaders of Libya’s rival factions together for a sit-down that can help them find a diplomatic solution to “chart a joint vision for the country,” according to a report from The Associated Press. Cairo will be hosting talks between the national accord government’s leader Fayez Al Seraj and the head of Operation Dignity Khalifa Haftar, sources tell Libyan Express, after a delegation of Libya’s neighbors that met in the city this week warned the two fronts against using military force to settle their quarrel, citing “political dialogue” as the only viable solution. Pulse also has the story.

On Deadline

The pharma crisis and the ensuing hike in meds prices was mishandled by Health Minister Ahmed Rady, raising questions about his competence and crisis management capabilities, Mohamed Salah El Badry writes in a column penned for El Watan. El Badry says that Rady mishandled the situation from the get-go, by initially denying there were any shortages in meds or infant formula, followed by his decision to unilaterally negotiate price hikes with pharma companies, excluding other important parties such as the Pharmacists’ Syndicate.

Worth Reading

Former US President Barack Obama has left a “shaky” human rights legacy of indecisive policies, Kenneth Roth argues for Foreign Policy. The Obama administration, he suggests, was not firm enough in its actions (or reactions) to create a lasting impact, leaving many in fear that the Donald Trump administration could easily reverse any progress Obama may have achieved, particularly in the human rights domain. “Obama never really warmed to human rights as a genuine priority and so leaves office with many opportunities lost,” Roth writes. Roth surveys Obama’s achievements and shortcomings a number of issues and says, on Middle East policy specifically, Obama rarely lived up to the lofty promise of his 2009 Cairo University speech, where he spoke eloquently of the need to build democracies in the region. He cites Obama’s failure to make any meaningful push on the Israeli-Palestinian conflict, continued use of drone strikes, maintaining Guantanamo Bay and not backing up his “red line” in Syria as examples of this shaky record. Him overseeing the largest surveillance state in US history was also seen as diverging from his human rights commitment. “The truth is, a careful review of Obama’s major human rights decisions shows a mixed record… he has often treated human rights as a secondary interest — nice to support when the cost was not too high, but nothing like a top priority he championed,” the article reads.

Worth Watching

Egypt’s first goal in the African Cup of Nations: Abdallah El Said secured a last minute victory for Egypt in last night’s game against Uganda, taking the team through to the quarter-finals of the Africa Cup of Nations and pushing their opponents out of the running. Ahram Online’s Hatem Maher describes the game “as largely toothless,” as it had appeared as though it was headed into another draw until the very final moments. Egypt is now only two behind Ghana, with four points from two games. Ghana beat Mali out earlier in the day with “a narrow 1-0 victory.” (Tap here to watch the goal, runtime 1:52).

Diplomacy + Foreign Trade

Egypt is keen on reshaping its religious discourse and eradicating radical thought, President Abdel Fattah El Sisi told members of the Canadian Senate and House of Commons during a meeting on Saturday, according to AMAY.

Egypt is signing a cooperation protocol with the UAE this week to prevent double taxation and curb tax evasion, Deputy Finance Minister Amr El Monayer told Al Masry Al Youm.


Total to begin drilling onshore Egypt block soon

France’s Total will begin drilling in block 2 in onshore Egypt, which is managed in a 50/50 partnership with BP, MENA President for Exploration and Production Stephane Michel told Reuters. Drilling will start as soon as a rig currently being used by BP on another block is available. The company is also preparing to drill for gas off Cyprus in block 11, which is adjacent to Egypt’s Zohr. "Obviously the Zohr discovery has changed the landscape …It is clear that the decision to drill block 11 was taken on the basis of the Zohr discovery," Michel said.

61 gas shipments in 1H17 – EGAS

The first half of 2017 will see Egypt importing 61 liquefied gas shipments, with that number set to drop to 25 during 2H17, Al Shorouk reported EGAS chief Mohamed El Masry as saying. This comes as Egypt is looking to increase its production of natural gas to 5.3 bcf/d in FY2017-18, a source at EGAS told Reuters’ Arabic service. Egyptian gas output averaged around 4 bcf/d in FY2015-16 and is expected to average 5 bcf/d in FY2016-17. As more fields, particularly Zohr, are brought onstream, output is expected to increase to 6.8 bcf/d by FY2018-19. First gas from Zohr is expected by the end of this year.

Electricity Ministry meets with EDF Energy to discuss cooperating on Siemens power plants management

Officials from the Egyptian Electricity Holding Company are meeting with a delegation from EDF Energy to discuss cooperating on managing the Siemens power plants, unnamed sources told Al Borsa. The Electricity Ministry had earlier issued a tender to receive the completed power plants from Siemens and assist the ministry in managing the power plants. Three companies presented bids including EDF Energy, RWE, and Parsons.

Basic Materials + Commodities

Russian wheat seized in Alexandria could be released after fumigation -Rosselkhoznadzor

18k tonnes of Russian wheat, seized by Egyptian authorities at the Dekheila port in Alexandria in November, could be released by local officials after fumigation, Reuters reported, citing Russia’s agriculture safety watchdog Rosselkhoznadzor. The seized wheat was deemed unsuitable for human consumption by prosecutors despite having passed quarantine checks successfully, after a large number of insects was found in the storage site. “The fumigation will get rid of pests … and will probably allow Egyptian officials to release the seized wheat,” Rosselkhoznadzor says. On a related note, the General Authority for Supply Commodities (GASC) has purchased 60,000 tonnes of wheat from Ukraine, to be delivered during the first 10 days of March, Al Shorouk reports. Reuters also has the story.


Samsung Egypt begins manufacturing ACs at Raya’s factory

Samsung Egypt has been manufacturing air conditioners through factories belonging to Raya, Al Borsa reports. Contracting out production appears to be critical to Samsung’s manufacturing strategy to tackle rising FX rates, said Samsung Egypt’s vice president Sherif Barakat. He added that the company plans to raise its market share of phones to 50% and of televisions to 40% in 2017, the newspaper reports.

Health + Education

Marcyrl to produce three new types of Hep-C meds locally in 2017

Marcyrl Pharma Industries intends to start locally producing three new types of meds that treat Hepatitis-C in 2017, Al Borsa says. Company President Magdy Mounir said that Hep-C meds will not be increasing in price, despite the surge in the FX rate, especially as their domestic production picks up.

Government to tender development of takamol hospitals in Feb, despite House rejecting the proposal

The government is reportedly preparing to issue tenders for the development of the first batch of full-service (dubbed takamol) hospitals in underserved areas, a high-ranking official tells Al Mal. The plan to develop the hospitals under public-private partnership contracts seems to be moving along despite having been rejected by the House of Representatives, as we noted last July. The Head of the General Authority for Government Services will meet with Health Minister Ahmed Rady on Thursday to discuss the details of the tender, which is likely to be issued next month and offer up 12-18 out of 46 hospitals currently being considered for the project.

Real Estate + Housing

PHD expects revenues to rise in 2017, sees sector stabilizing within three quarters

Palm Hills Developments (PHD) expects a “jump in sales” in 2017, Chairman Yasseen Mansour told Bloomberg. PHD is targeting EGP 8.5 bn in contracted sales during the year and aims to deliver 2,000 homes. “Many of the small developers that entered the industry since the uprising six years ago will be forced out, and that the challenging economy gives bigger companies a ‘good chance’ to regain market share. Egyptian real estate will take two to three quarters to stabilize and ‘those who didn’t plan carefully for this will be burnt,’” Mansour says. PHD also has plans to acquire a land plot in Alexandria and expects to surpass 2016’s financial performance “on every single metric.”


European travel agencies to offer trips from Belgium, Holland to Hurghada

European travel agencies have announced they will be organizing trips to Hurghada from Belgium and Holland during the spring and summer seasons, in response to the Tourism Ministry’s recently announced incentives to draw in tourism, Al Borsa reports. Dutch travel agency Corendon will arrange twice-weekly trips from Brussels to Egypt during the first two weeks of April and one trip per week during the summer season until the end of October, while German agency LMK Touristik will offer trips to Hurghada on 22 and 23 April.

Tourism Minister Yehia Rashed in Spain to revitalize tourism

Tourism Minister Yehia Rashed met with tour operators in Spain to discuss restoring the flow of tourism to Egypt and to discuss the Spaniards’ suggestions for Egypt, Al Shorouk reports. Rashed headed the Egyptian delegation at the Fitur International Tourism Conference along with representatives from nine Egyptian travel agencies, EgyptAir, and the Egyptian Tourism Federation, according to Al Borsa.

Automotive + Transportation

No recall on Jeep Grand Cherokee models in Egypt

The recall ordered on Jeep Grand Cherokee models in Saudi Arabia does not apply in Egypt, Fiat Chrysler Automobiles Egypt (FCA) told Al Mal. The parent company did not notify Egypt of a recall, FCA said, but is allowing customers to check their cars’ VIN Number against a database of recalled models on its website.

GB Auto is not investing in South Sudan

GB Auto said it is not injecting any new investments in South Sudan. The company denied reports in Al Mal that it is expanding in the country in a statement sent to the EGX.

Transport Ministry’s losses in 2016 reach EGP 5.8 bn

The House’s Transportation Committee has revealed that the Transport Ministry incurred EGP 5.8 bn in losses last year, and has called on Transport Minister Galal Saeed to put in place a plan to reverse the ministry’s losses, Al Mal reports. An unnamed source told the newspaper that a hike in the prices of public transport tickets is inevitable in light of the ministry’s losses and inflation rates.

Egyptian Automotive Manufacturing Association expects sales to drop by 50% in 1H2017

The Egyptian Automotive Manufacturing Association (EAMA) expects total car sales during 1H2017 to drop 50% year-on-year, due to the “unreasonable” rise in car prices following the EGP float that have led to a near-complete halt in car sales over the past few months, EAMA head Hassan Soliman said, Al Mal reports.

Banking + Finance

EGX issues new regs governing rights issues for OTC market companies

The EGX has issued new regulations governing the transfer of rights issues during the capital increase of non-listed companies whose securities trade on the over-the-counter (OTC) market. Under the regs, these companies must open the door for shareholders to transfer rights issues as soon as the company publicly announces a capital increase and at least five days prior to opening subscriptions, according to an EGX statement.

Other Business News of Note

Maersk Line to collect payment in EGP equivalent of USD in state-owned ports

Maersk Line has reportedly begun issuing invoices for loading and unloading in state-owned ports in USD that are to be collected in EGP equivalent according to the daily exchange rate, Al Borsa reported. In private ports domestically, Maersk Line, the world’s largest shipping company, accepts payments in USD, the company said, citing the exchange rate volatility as a concern.

Tahya Misr is investing EGP 2.5 bn into health, education, real estate sectors in 2017

The Tahya Misr Fund has allocated EGP 2.5 bn in new investments towards projects in the health, education, and real estate sectors, fund director Mohamed Ashmawy told Al Borsa. The fund is looking to build seven pharma factories in partnership with companies including Vacsera and Pharco, he added.

National Security

Violence intensifies in North Sinai

Eight people were killed on Saturday in southern Rafah when a shell landed on their house, eyewitnesses tell Reuters. No entity claimed responsibility for the attack yet and shell’s origin remains unknown. Two policemen were also wounded when fire was exchanged during a security raid on Saturday, according to Ahram Online.

On Your Way Out

An unknown number of Egyptian workers were detained while entering Doha for possessing medications recently banned by the Qatari authorities, Ahram Online says. The workers reportedly failed to present their prescriptions to airport authorities and now face deportation

Thank you, devaluation? Egypt has the world’s cheapest Big Mac, according to a survey by The Telegraph’s Oliver Smith. Don’t expect this to last for a long time: The Economist’s Big Mac Index suggests McDonald’s Big Macs should be a lot more expensive in Egypt. On the other end of the spectrum, Switzerland has the most expensive Big Mac.

The markets yesterday

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EGP / USD CBE market average: Buy 18.7456 | Sell 18.9100
EGP / USD at CIB: Buy 18.651 | Sell 18.751
EGP / USD at NBE: Buy 18.6 | Sell 18.7

EGX30 (Thursday): 12,806.77 (-3.74%)
Turnover: EGP 1.451 bn (233% above the 90-day average)
EGX 30 year-to-date: +3.741%

THE MARKET ON THURSDAY: The EGX30 ended the trading session 3.7% down after a major sell off. Thursday’s top gainer was Eastern Company, while Edita closed flat. Thursday’s worst performing stocks included Ezz Steel, Pioneers, and SODIC. The market turnover was EGP 1.45 bn and local investors were the sole net sellers.

Foreigners: Net long | EGP +112.8 mn
Regional: Net long | EGP +24.9 mn
Domestic: Net short | EGP -137.7 mn

Retail: 74.5% of total trades | 75.3% of buyers | 73.8% of sellers
Institutions: 25.5% of total trades | 24.7% of buyers | 26.2% of sellers

Foreign: 10.9% of total | 14.8% of buyers | 7.0% of sellers
Regional: 7.7% of total | 8.6% of buyers | 6.9% of sellers
Domestic: 81.4% of total | 76.6% of buyers | 86.1% of sellers


The anatomy of economic agents’ behavior before and after currency flotation

Since the EGP flotation in November, the value of the EGP has dramatically declined versus the USD. This is in line with the typical dynamics of exchange rate volatility following currency floatation. Moreover, we note that commercial banks’ exchange rate bid-ask spreads narrowed significantly following the exchange rate liberalization on November 3. According to the CBE governor, c.USD 7.5-8.0 bn flowed into the Egyptian banking system in terms of FCY deposits and foreign portfolio investments in EGX and treasuries. Furthermore, the CBE net international reserves rose to USD 24.3 bn by the end of December 2016. Accordingly, we believe that the persistence of such a positive sentiment should help strengthen the EGP to average at EGP 14-15 per USD in FY2016-17.

Tap here for the full note.


WTI: USD 52.42 (+2.04%)
Brent: USD 55.49 (+2.46%)
Natural Gas (Nymex, futures prices) USD 3.20 MMBtu, (-4.87%, February 2017 contract)
Gold: USD 1,204.90 / troy ounce (+0.28%)TASI: 6,875.87 (+0.33%) (YTD: -4.64%)
ADX: 4,704.70 (+0.19%) (YTD: +3.48%)
DFM: 3,690.39 (-0.10%) (YTD: +4.52%)
KSE Weighted Index: 408.22 (+0.09%) (YTD: +7.40%)
QE: 10,941.43 (+0.56%) (YTD: +4.84%)
MSM: 5,734.14 (+0.23%) (YTD: -0.84%)
BB: 1,239.74 (+0.48%) (YTD: +1.58%)

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22 January (Sunday): Business in Africa: The Untapped Potential special luncheon at the American Chamber of Commerce. Register here.

22-31 January (Sunday-Tuesday): 28th African Union Summit, Addis Ababa, Ethiopia.

24 January – 26 January (Tuesday-Thursday): Global Oil & Gas Middle East and North Africa 2017, Cairo International Convention Center, Cairo.

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

28-29 January (Saturday-Sunday): International Conference on Computers, Data Management and Technology Applications, Intercontinental City Stars, Cairo.

30 January – 01 February (Monday-Wednesday): Beltone Financial’s Africa’s Era, Egypt’s Moment Conference, Cairo.

30 January – 02 February 2017 (Monday-Thursday): Arab Health Exhibition, Dubai International Convention & Exhibition Center, UAE.

05 February (Sunday): Emirates NBD PMI Egypt release.

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

15-16 February (Wednesday-Thursday): International Conference for Globalization & Emerging Economies, Alexandria.

16 February (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

06-08 March (Monday-Wednesday): 13th EFG Hermes One on One Conference, Dubai, United Arab Emirates.

07-09 March (Tuesday-Thursday): Microfinance forum, Nile Ritz-Carlton, Cairo.

09-11 March (Thursday-Saturday): Egypt Projects Summit, Cairo International Convention Center, Cairo.

29-30 March (Wednesday-Thursday): Cityscape Egypt Conference, Nile Ritz-Carlton, Cairo.

30 March (Thursday): Central Bank of Egypt’s Monetary Policy Committee meeting.

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

01 April (Saturday): SEOcon, The Greek Campus, Cairo.

03-06 April (Monday-Thursday): Agri & Foodex Africa, Khartoum International Fair Ground, Khartoum, Sudan.

08-10 April (Saturday-Monday): Pharmaconex, Cairo International Convention Center, Cairo.

16 April (Sunday): Coptic Easter Sunday.

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

20 April (Thursday): Closing date for the Egyptian Mineral Resources Authority bid round number 1 for 2017 for gold and associated minerals.

24-25 April (Monday-Tuesday): Renaissance Capital’s Egypt Investor Conference, Cape Town, South Africa.

25 April (Tuesday): Sinai Liberation Day, national holiday.

30 April – 03 May (Sunday-Wednesday): Cement & Concrete 2017, Riyadh International Convention & Exhibition Center, Saudi Arabia.

01 May (Monday): Labor Day, national holiday.

16 May (Tuesday): Official expiry date for the decision to suspend capital gains taxes on stock market transactions.

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

26-28 June (Monday-Wednesday): Eid Al-Fitr (TBC).

30 June (Friday): 30 June, national holiday.

23 July (Sunday): Revolution Day, national holiday.

02-05 September (Saturday-Tuesday): Eid Al-Adha, national holiday (TBC).

22 September (Friday): Islamic New Year, national holiday (TBC).

06 October (Friday): Armed Forces Day, national holiday.

01 December (Friday): Prophet’s Birthday, national holiday.

08-10 December (Friday-Sunday): RiseUp Summit, Downtown Cairo.

01 January 2018 (Monday): New Year’s Day, national holiday.

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.

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