Wednesday, 1 February 2017

Stop whining about the EGX stamp tax and go make some money


What We’re Tracking Today

Prime Minister Sherif Ismail will present his new cabinet lineup to the House of Representatives on Thursday, parliamentary sources told Yahduth Fi Masr’s Sherif Amer. The incoming ministers are expected to take oath early next week. Al Masry Al Youm had quoted Ismail yesterday as having told House Speaker Ali Abdel Aal that the shuffle will include 9-11 ministers. Sources tell the newspaper that 10 ministers — including one member of the cabinet economic group — will exit in the shuffle. No sovereign ministry will be affected. Previous reports had suggested the ministers of investment, interior and foreign affairs could be leaving. (Sovereign ministries, by tradition, include the “senior” portfolios of defence, interior and foreign affairs. The ministries of justice and finance are occasionally included on the list by some analysts.)

An IMF delegation arrived in Cairo yesterday and “is staying two or three days” to begin the review required before the disbursement of a second installment of the IMF funding, according to Reuters. The second installment is worth USD 1.25 bn and, according to the IMF’s proposed schedule, it should be disbursed by 15 March. There is also another IMF delegation in town, a source told the newswire, that arrived on Sunday and is staying until 9 February. This delegation is “providing technical support and training in budget preparation and government programs.”

The Pharaohs’ bid for an eighth Africa Cup of Nations crown continues tonight as Egypt goes head to head with Burkina Faso in a semifinal match. The two so-far undefeated teams will clash starting at 9pm CLT; Burkina Faso will have an extra 24 hours of rest over Egypt at the kickoff. BBC Sport has a pregame preview, as does ESPN. Ahram Online reminds us that while the Pharaohs “will have to do without a number of regulars as they battle more injuries, with lone striker Marwan Mohsen becoming the latest casualty … The Pharaohs met Burkina Faso at the same stage 19 years ago, claiming a 2-0 win thanks to a brace from their all-time leading scorer Hossam Hassan.”

Goalkeeper Essam El Hadary has yet to concede a single goal — and is capturing the imagination of the global sports press. The Associated Press notes that 44 year-old El Hadary, the oldest player to ever compete in the AFCON, is “the only survivor of the team’s former success” and their main source of inspiration, having been there in 1998, when Egypt beat Burkina Faso in the semis. “This is my role, to always tell them stories about our success, our past success, and how we managed to do it,” he said.

Sometimes, the good guys win: Afkar Capital has taken home a prestigious MENA Fund Manager Performance Award for its Afkar S&P UAE UCITS Exchange Traded Fund. The fund, which launched last June, is the first fully tradable, full fungible ETF in the region and was launched by Seif Fikry, the EFG Hermes veteran and longtime pal of Enterprise.

On The Horizon

23 February is penciled in as a potential date for the resumption of flights between Egypt and Russia, state news service Sputnik reported, citing Izvestia newspaper. The resumption would restore flights between Russian cities and Cairo, Hurghada, and Sharm El Sheikh. “This will happen only in case the Egyptian side complies with all the security requirements," a source from the “Russian foreign policy circles” said, reportedly. Russian inspectors are due in Cairo sometime this week for “final” security inspections and Civil Aviation Minister Sherif Fathi will visit Russia on 8-9 February to meet with Russian officials.

Emirates NBD PMIs for Egypt, the UAE and Saudi Arabia are due to be released on Sunday, 5 February.

The Central Bank of Egypt’s Monetary Policy Committee will meet on Thursday, 16 February, to review interest rates.

Enterprise+: Last Night’s Talk Shows

Yahduth fi Masr’s Sherif Amer joined other talking heads in probing yesterday’s announcement that some subsidized commodities will rise in price (more on that in the Speed Round). Assistant Supply Minister Karim Gomaa’ called in to reassure the public that the government is still committed to keeping goods affordable. He attributed the sugar price increases to the government having to pay more for the sugarcane harvest following demands by farmers. “I can’t guarantee that this will be the last price hikes in commodities this year,” Gomaa’ added.

Consummate populist Amr Adib criticized raising prices of subsidized sugar and cooking oil. Speaking directly to the ministry, Adib said “failing to cut ineligible citizens from the list of beneficiaries is not reason enough to raise prices.” Adib harped on transparency, asking why the Supply Minister hasn’t informed the nation of its plans ahead of time (watch, runtime: 5:38). (Apparently, Amr hasn’t heard of price gouging and hoarding.) Naturally, he was joined in his criticism by grandstanding MPs including House Economic Committee member Mohamed Badrawi (watch, runtime: 3:17). Ahmed Abdel Wahab, chairman of state-owned Alexandria Soap Manufacturing and Oil Packaging, defended the government, saying that it bears EGP 5 on every bottle of cooking oil sold to consumers (watch; runtime: 4:20). There are really days when we’d prefer Amr left the economy to the smarter member of his household.

Over on 90 Minutes, another issue hitting citizens in their wallets took center stage as Moataz El Demerdash looked into reports that a public hospital in Mansoura has tripled its prices. Dakahlia Governor Hossam El Din Emam told Moataz that he formed a committee with the Health Ministry to investigate the case (watch: runtime: 6:07).

Public Enterprise Minister Ashraf Sharkawi was interviewed by Al Hayah Al Youm’s Tamer Amin on the performance of state-owned corporations, which Sharkawi naturally declared were wildly profitable last year. (watch: runtime: 7:53).

Hona Al Asema’s Lamees Al Hadidi focused on President Abdel Fattah El Sisi’s suggestion that Aswan is impoverished (watch; runtime: 11:28).

Speed Round

Speed Round is presented in association with

A proposed stamp tax on stock market trades will be set higher than the 0.1% that was imposed temporarily in 2013, sources told Al Shorouk. The Finance Ministry is discussing the exact rate with the Egyptian Supervisory Authority (EFSA), a source at EFSA said. The stamp tax will be collected on both sides (buy and sell) of all trades. The original measure was scrapped in July 2014, but reports emerged in January that it was going to be reintroduced as part of the reforms agreed to with the IMF.

The EGX30 closed down 1.96% yesterday as investors booed the expected tax, Al Borsa reported. Only two EGX30 constituents ended the day in the green. Enterprise’s official message to day traders: We pay VAT. Income tax. A tax on dividends. You don’t even pay capital gains taxes. To quote the immortal Dennis Leary: “Life sucks. Get a helmet.” (Runtime: 1:13. Don’t play this clip if the kiddies are within earshot or if other tender ears might be offended by salty language.)

CIB posts record full-year earnings as it releases FY2016 results. Leading commercial bank CIB “posted another year of record performance despite the unfavorable macroeconomic environment and increasingly challenging regulatory requirements, generating consolidated full-year revenues of EGP 11.3 bn and net income of EGP 6.01 bn, up 11% and 27% from 2015, respectively,” the bank said overnight (pdf). The institution said 2016 was a “truly challenging year … for the entire Egyptian banking sector,” noting “the unprecedented decision by the CBE to allow the EGP to trade freely by year-end after severe foreign currency shortages, three corridor rate hikes throughout the year, with the latest being for an aggressive 300bp, along with the enforcement of ICAAP and the Capital Conservation Buffer.” CIB reported a return on average equity of 34.2% in FY2016 and a return on average assets of 2.7% in the same period with a standalone net interest margin of nearly 5.5%.

2017 outlook: CIB said in the statement that, “We believe the outlook in 2017 still remains ambiguous given the impact of recent macroeconomic developments on the banking sector performance in general and the Banks’ Capital Adequacy Ratios in particular,” but notes that its strong balance sheet and “robust fundamentals keep us well-positioned to withstand economic and regulatory pressures, should any arise.”

Total inflows into the banking sector since the float of the EGP in early November have now hit USD 9 bn, according to a comment from a senior Central Bank of Egypt official carried yesterday by Reuters. The story does not make clear where Assistant Sub-Governor Rami Aboulnaga made the remarks.

The Supply Ministry has raised the prices of subsidized staples including cooking oil, vegetable margarine, and sugar sold to ration card holders, Al Borsa reports. The price of an 800 ml bottle of cooking oil is now EGP 12 (up from EGP 10), while one kg of sugar now costs EGP 8, a rise of EGP 1. The prices come into effect today.

The private sector will have a limited role in storing the 4 mn tonnes of wheat expected of this season’s harvest, said Supply Minister Mohamed Ali El Sheikh. Private sector storage facilities will be used in places where the government’s capacities have been maxed out, added El Sheikh. The ministry, however, will outsource inspection of silos to companies, in a bid to ensure the fraud perpetrated last year would not happen, he said. The private sector’s alleged involvement was among the most controversial elements of last year’s wheat corruption scandal. The government failed to get phase one of Blumberg Grain’s shouna program up and running in time for the harvest and was forced to then rely on what state investigators said were “unscrupulous” private storage facilities, the operators of which were later investigated by the Prosecutor General’s Office.

Agricultural cooperatives will be used to tally the harvest when the season begins on 1 April, said Agriculture Minister Essam Fayed, adding the scope of their roles has not yet been determined. The government will also set up “independent” collection committees and will outline the roles of different ministries in those committees and the collection process at some later date. Word from the government grapevine, however, is that the Trade and Industry ministry is looking to extricate itself from the whole process, sources tell Al Mal.

Furthermore, the government appears to have kowtowed to demands by MPs and farmers, deciding to pay EGP 750 per ardib — the global market price plus a EGP 50 markup. The price was set at EGP 450 a month ago. These new guidelines will be brought up before Prime Minister Sherif Ismail during this week’s cabinet meeting, said El Sheikh, adding that there may be room to change them.

The Electricity Ministry is planning to spend around USD 29 bn to upgrade the national distribution grid in 2017. The investment will both improve efficiency and ensure the grid can transmit new generation capacity coming online from power plant projects, Al Ahram’s breaking news website reports. The program will see the construction of nine new transmission stations in locations including East Port Said, Beni Suef, and Imbaba, as well as the upgrade nine existing facilities. The ministry has already signed contracts with State Grid, Saudi Arabia’s NCC, and El Sewedy Electric as part of the program.

Majid Al Futtaim (MAF) Group says it is moving ahead with expansions Egypt and the GCC after recording an 8% y-o-y increase in earnings in 2016, according to The National. MAF will carry forward plans to expand in markets including the UAE, Egypt, Oman, and Saudi Arabia and will also bolster its operations in Africa and Central Asia. The company says it remains bullish on Egypt following its proposed plan in 2015 to increase investments to EGP 22.5 bn.

Is Egypt in trouble with global ad agencies? The Tourism Development Authority (TDA) is allegedly 15 months behind on paying global advertising agencies some USD 16 mn for overseas promotional campaigns, Al Borsa reports, quoting JWT Chief Hany Shoukry. JWT, which signed a USD 68 mn, three-year contract with the TDA in 2015, says it has received EGP 8.5 mn of what it’s owed, but has spent EGP 24 mn out of pocket to date.

MOVES- The European Bank for Reconstruction and Development (EBRD) has appointed Janet Heckman as its new Managing Director for the southern and eastern Mediterranean region. Based in Cairo, Heckman will also become EBRD’s head of Egypt and assumes both her roles today. Her deputy will be Catarina Bjorlin-Hansen. Heckman succeeds Hildegard Gacek, who is retiring. A US national, Heckman was an MD at Citi (with which she served in Algeria, Bulgaria, Hungary, Romania and Bahrain) before joining EBRD in 2012 as its director for Kazakhstan. Her full bio is here.

The Financial Times’ Global MBA ranking for 2017 is out. Insead tops the ranking for the second year in a row, followed by Stanford and Wharton. MBAs are assessed according to the career progression of alumni, the school’s idea generation, and the diversity of students and faculty. You can access the full ranking here.

While Insead topped the general rank, its alumni came in third for their mobility and the programme is ranked sixth for its international course experience. Stanford topped the charts for career progress as its alumni reported the highest average salary three years after graduation at USD 195k with around 42% of them hold positions at director level compared with 22% on average for ranked programmes. Cambridge University’s Judge was ranked as the school that provides the best value for money, especially since it had the lowest tuition fees between the top 15 schools. The top 50 list also includes five schools from China and three from India. The top 10 includes:

  1. Insead
  2. Stanford Graduate School of Business
  3. University of Pennsylvania: Wharton
  4. Harvard Business School
  5. University of Cambridge: Judge
  6. London Business School
  7. Columbia Business School
  8. IE Business School
  9. University of Chicago: Booth
  10. IESE Business School

US President Donald Trump tapped last night a “not divisive” conservative to fill a Supreme Court vacancy left last year by the death of Justice Antonin Scalia. Neil Gorsuch, 49, is the youngest appointee in 25 years. As Politico wrote yesterday: “Gorsuch has the resume of a man seemingly destined for the high court: the son of a Reagan Cabinet member, a graduate of Harvard and Oxford, and a clerk for two Supreme Court justices who has worked in the Justice Department and spent a decade on the federal bench. In conservative legal circles, he is favored as a worthy intellectual heir to the late Justice Antonin Scalia.” The New York Times has straight ahead news of the appointment here, but junkies for Supreme Court news will want to read USSC correspondent Adam Liptak’s excellent dissection: In Judge Neil Gorsuch, an Echo of Scalia in Philosophy and Style.

Meanwhile, a dissent cable penned by US diplomats less-than-enamored with Trump’s immigration order has now earned 1,000 signatures.

It’s earnings season in America, with top global names reporting yesterday including Apple and Under Armour. The season in Egypt also kicked off yesterday as CIB filed 4Q/FY2016 results, but don’t look for a crush of Egyptian filings until late February through March. Among the international business headlines making news on a day in which the world remains transfixed by The Donald:

  • Strong demand for the iPhone 7 Plus and the Mac’s return to growth helped fuel better-than-expected sales at Apple, CNBC reports in a comprehensive roundup of the tech giant’s results. Business Insider drills into the numbers and has a live-blog of Apple’s earnings call.
  • Shares of “athleisure” maker Under Armour tanked yesterday, falling as much as 28% before closing the day down just over 25% after the sportswear company guided on 2017 sales growth that was about half what analysts had expected, Reuters reports.
  • China’s corruption crackdown is back in the headlines: “A Chinese bn’aire with connections to top Beijing leaders has been abducted from the Four Seasons Hotel in Hong Kong by Chinese public security agents and taken to the mainland, according to two people familiar with the investigation,” CNBC notes.


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The Macro Picture

Goldman Sachs bullish on commodity demand in 2017: We are entering the stage of the business cycle typically characterized by higher commodity demand. Higher demand is driving Goldman Sachs Research’s positive commodity outlook in 2017, Jeff Currie, head of commodities research, says. He expects oil will trade marginally higher during the year as inventories normalize but will remain bounded by low-cost shale production, explaining that “when commodity demand is above commodity supply, deficits result, inventories are drawn down and scarcity premiums begin to arise.” Currie says scarcity in this context does not refer to future commodity supply but instead to low inventories creating the need for spot prices to rise and forecasts oil to trade between in the USD 55-60 per bbl range.

Egypt in the News

It’s another beautifully quiet morning for Egypt in the international press, with Omm El Donia being largely confined to the sports page ahead of the Africa Cup of Nations match with Burkina Faso tonight. All eyes, it seems, rest squarely on Washington. We wouldn’t complain if it stayed that way for a while.

Meanwhile: Elie Saab loves Egypt. The Lebanese designer, Vogue tells us, thinks “Egypt at the turn of the 20th century represents the golden era of the Arab world. ‘People were able to express themselves and their creative talents in theater, art, journalism, music, and cinema, transforming Egypt into a hub for progress and allowing Arabic culture to flourish,’ he told In recognition of that era, he embroidered Look 24 with the palm trees of Domyat city and boats sailing along the Nile River.”

Extending its naval presence in the Red Sea and Bab El Mandeb strait is “the backbone of [Egypt’s] new strategy,” writes Amr Emam in Arab Weekly. Egypt has reportedly spent bns in the last two years to upgrade its naval capacities and is employing its new equipment to force control over its territorial waters and defend the southern entrance of the Red Sea from the unrest in neighboring Yemen.

Also making the rounds:

  • Nottingham University professor Nicola Everitt is teaming up with a few academics at Nile University to help Egypt get rid of its plastic bag problem by replacing them with crushed up crustacean shells to create biodegradable plastic bags, according to a review in The Week.
  • The Washington Post has the story of a Syrian refugee family stranded in Egypt by US President Donald Trump’s immigration ban despite having just won visas to be resettled in New Jersey.
  • Afolake Oyinloye’s review for Euronews of Direxiona, a women-only driving schools that teaches women about car upkeep, road safety, and how to deal with breakdowns and emergencies.
  • Israel shouldn’t put “all its eggs in one western basket” and must consider following Egypt and other Middle Eastern countries’ example by forging closer ties with Russia, Netanel Avneri writes for Israel Hayoum.

On Deadline

Merging the ministries of civil aviation, antiquities, and culture into the Tourism Ministry in the new cabinet is a necessary step, the Al Masry Al Youm columnist writing under the pseudonym Newton says. By putting the aforementioned ministries at the disposal of the Tourism Ministry, it will have the necessary tools to allow tourism in Egypt to realize its full potential, according to Newton.

Image of the Day

Abandoned malls, crumbling churches, former asylums and haunted houses are the subjects of the anonymous / pseudonymous artist and photojournalist Seph Lawless. We’ve just discovered his work, and it is truly captivating — the type of stuff that will enthrall the curious 12-year-old adventurer who rests (dormant and hopeful) in all of us.

Worth Watching

While watching the seemingly endless coverage of protests against US President Donald Trump and his immigration ban, we couldn’t help but notice that the protests seemed to lack the entertaining quality inherent to protests on this side of the Atlantic. A group of demonstrators (presumably inside an American airport) finally added some Egyptian flair to their chants, courtesy of a tabla (runtime 00:44). It starts slow, but it’s worth waiting the extra few seconds to get past the “I believe…” bit.

Diplomacy + Foreign Trade

Robert Beecroft has not resigned from his post as the US ambassador to Egypt and is in Washington for “routine consultations” with the Trump administration, the US embassy’s spokesman told Ahram Online. According to the spokesman, whether or not Beecroft stays on as the ambassador in Cairo remains at the discretion of the new administration; he is expected to return to Egypt sometime this month.

In other news related to the US, Interior Minister Magdy Abdel Ghaffar discussed on Monday ways to enhance security cooperation with America during a meeting Middle East Institute President Wendy Chamberlain and a delegation of former US ambassadors, AMAY reported.

President Abdel Fattah El Sisi wrapped up his visit to Addis Ababa after chairing a continental meeting on climate change at the 28th African Union summit, according to a statement from Ittihadiya. On the sidelines of the summit, President Sisi met with Sudan’s Omar El-Bashir amid tensions between the neighboring countries, and issued a joint statement vowing to “work to launch a new phase of brotherly relations,” according to Ahram Online. El Sisi also met with his Tanzanian counterpart, John Magufuli, to discuss trade and economic cooperation and extended an invitation that could see Magufuli visit Egypt.

Total trade between Egypt and Russia stood at USD 3.5 bn in 2016, Russian Trade Representative to Egypt Fedor Lukashin told Sputnik. Russia’s export grew by 10% while imports from Egypt decreased by 10%, he added, weighed down by a 46% drop in Egyptian vegetable exports. Russia had introduced temporary restrictions on the import of Egyptian agricultural produce in September 2016, but removed them a month later.

Malta is considering an agreement with Egypt, Algeria, and other North African countries to organize safe passage for asylum seekers looking to travel to Europe from Libya, Malta Today reports. The move could help curb illegal migration to Europe, according to the Maltese government.

Egypt has outran Turkey to become the largest importer of Ukrainian oilseed in 2016 with a 19.7% share, but made up only 3% of the country’s vegetable oil exports, according to Ukrinform.


Electricity Ministry pushes two coal power station projects to 2022-2027 plan

The Electricity Ministry pushed a 2,600 MW coal power station project from the UAE’s Al Nowais to its 2022-2027 five-year plan from the 2017-2022 one, Al Borsa reports. The Emirati company had signed a memorandum of understanding with Egypt in September 2014, but has rejected certain clauses in the contract for the project, including ones on arbitration and the government’s financial guarantees, sources from the Electricity Ministry told the newspaper. The ministry also postponed another coal power station in El Hamrawein to 2022-2027, saying that studies and negotiations on the project remain incomplete, and the ministry has a production surplus of 4,000 MW per day.

Oil Ministry investing USD 50 mn into AMOC

The Oil Ministry is investing USD 50 mn to upgrade production units at the Alexandria Mineral Oils Company (AMOC), Oil Minister Tarek El Molla told Al Masry Al Youm. The upgrades will increase production standards and capacity, as well as reduce production costs, AMOC Chairman Amr Mostafa said.

Egyptian delegation visit Iraq to complete agreement to import Iraqi crude

The Oil Ministry is sending a delegation to Iraq this month to finalize the agreement to import 1-2 mn bbl of Iraqi crude, Oil Minister Tarek El Molla told Al Masry Al Youm. The agreement is expected to be finalized before the end of 1Q2017, he added. The ministry has already proposed freeing up capacity at MIDOR to refine imported Iraqi crude.

Electricity Ministry cancels consultancy contract bid for Siemens power plants

Budget shortfalls have forced the Electricity Ministry to withdraw a tender to hire an international consultancy to assist in the evaluation and management of the three Siemens power plants, Daily News Egypt reported. The Egyptian Electricity Transmission Company (EETC) had started talks with EDF Energy, which submitted an EUR 8 mn offer, but then decided to assign the management task to ministry experts. Parsons (EUR 15 mn), and RWE Group (EUR 16 mn) had also submitted offers. Siemens seems to be moving ahead of schedule on the plants, announcing in a Monday press release that it connected 10% more power to the national grid than what had been initially agreed upon.

Real Estate + Housing

ODH delisting not subject to Swiss takeover law

Orascom Development Holding (ODH)’s voluntary delisting of all its Egyptian Depository Receipts on the EGX are not subject to Swiss takeover law, the Swiss Takeover Board ruled, according to ODH. ODH’s board had approved a voluntary delisting of its EDRs and the execution is pending the approval of an EGM. ODH also said it also is currently undertaking the necessary procedures with the regulatory bodies in Egypt in connection with the voluntary delisting.

Meanwhile, Orascom Construction has announced that it will complete its capital reduction in 30 days at most, after officially filing paperwork that it has completed its 1 mn share buyback, Al Borsa reports.


Tourism Ministry considers subsidizing domestic flight tickets to boost local tourism

The Tourism Ministry is considering subsidizing domestic air travel by up to EGP 300 per ticket as a way of encouraging local tourism, which has been suffering as a result of the recent surge in ticket, Al Borsa reports. The cheapest domestic flight now stands at EGP 1,250 and the ministry is hoping to see that cut to EGP 800 once the subsidy, which would apply to public and privately-held airlines, comes into effect. Airlines are expected to meet with the ministry next week to resume discussions and present pricing plans and promotional offers.

Egyptian airports are open to private airlines -Civil Aviation Authority

Egyptian airports are open to private airlines if they meet safety regulations set by the Civil Aviation Ministry, the Civil Aviation Authority head Hany El Adawy told Ahram Gate. The ministry has a vision to create a network of airlines functioning alongside flag carrier EgyptAir to improve services, he explained. Private airlines are encouraged to start new routes not currently serviced by EgyptAir, El Adawy added, but should not compete with existing routes operated by EgyptAir. Sounds like a great free-market opportunity to us…

JW Marriott officially becomes manager of Mena House

The JW Marriott has signed a hotel management contract with the Egyptian General Company for Tourism and Hotels (EGOTH) to manage the Mena House Hotel, JW Marriott Hotel Cairo General Manager Magdy Naguib told Al Borsa. The property is split between an historic palace and an attached modern hotel building. Hotel renovations will be completed within days, he added, while the palace will be shut down for two-to-three years for renovations. The news comes after EGOTH’s Managing Director for Technical Affairs was referred to Cairo Criminal Court by the Prosecutor General for allegedly “requesting and receiving three separate bribes to task hotel renewal projects at the JW Marriott Hotel, the Cairo Marriott Hotel, and the Mena House Hotel to specific suppliers and contractors.”

Telecoms + ICT

Raya merging Data Center operations with Information Technology

Raya Holdings is merging its subsidiaries Raya Data Center and Raya Information Technology to form one entity, unnamed sources tell Al Mal. The consolidation comes as part of a move to bring together Raya’s data centers, IT, networking, and call center services under one company, the source added.

Automotive + Transportation

Renault increases output from Morocco plants to meet demand from Egypt, Turkey

Renault announced it is aiming to increase exports from its Moroccan plants of Tangier and Casablanca to satisfy regional demand from Egypt, Tunisia, and Turkey, Daily News Egypt says, picking up an earlier story from sister publication Al Borsa. Renault Morocco said it increased production by 18% y-o-y in 2016. Renault’s Morocco produced cars are exempt from customs in Egypt under the Agadir Agreement.

National Tunnels Authority looking to raise EGP 1.2 bn for 64 new metro trains

The National Authority of Tunnels is looking to raise EGP 1.2 bn to buy 64 new metro trains for the third and fourth phases of the third metro line in Cairo, Al Shorouk reported. The additional USD 635 mn needed for the purchase will come in the form of a loan through the agreement with France’s Alstom and Korea’s Rotem, which will supply the trains.

Al Ahram wins three-year advertising contract for Cairo Metro

The Ahram Corporation and OMT Investments signed a three-year contract with the Transport Ministry on Monday for the exclusive advertising rights on the Greater Cairo Metro system, Ahram Gate reported.

Egypt Politics + Economics

Is the Military Production Ministry angling for a bigger slice of the economy?

The Military Productions Ministry appears to be vying for more projects, with minister Gen. Mohamed El Assar submitting a report to cabinet last night on how best to utilize the ministry’s capabilities to limit the need for imports of certain goods. El Assar proposes a variety of projects which the ministry hopes to dive into, including manufacturing of agricultural equipment, construction of industrial buildings, and producing electronic appliances such as washing machines. The Ismail cabinet appears inclined to agree, according to Al Mal, with the Prime Minister instructing El Assar to coordinate with other ministries to see these projects through.

National Security

Armed Forces’ Chief of Staff to meet with British Armed Forces officials in London

Armed Forces Chief of Staff Mahmoud Hegazy is in London for talks on security cooperation, Al Shorouk reports.

Daesh reportedly kill and wound 20 soldiers in North Sinai

Daesh has claimed to have killed and wounded 20 Egyptian soldiers during four days of clashes with the military in North Sinai, The Associated Press reports. The news has yet to make the domestic press.

The markets yesterday

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EGP / USD CBE market average: Buy 18.7619 | Sell 18.8896
EGP / USD at CIB: Buy 18.701 | Sell 18.801
EGP / USD at NBE: Buy 18.7 | Sell 18.75

EGX30 (Tuesday): 12,672.49 (-1.96%)
Turnover: EGP 1.394 bn (221% above the 90-day average)
EGX 30 year-to-date: +2.653%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session down 2.0%. Only two stocks ended the day in positive territory: Eastern Co and Global Telecom. Tuesday’s worst performing stocks included Cairo Oils and Soap, Elsewedy Electric and Palm Hills. Market turnover was EGP 1.4 bn and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -135.0 mn
Regional: Net long | EGP +112.0 mn
Domestic: Net long | EGP +23.0 mn

Retail: 50.8% of total trades | 52.8% of buyers | 48.8% of sellers
Institutions: 49.2% of total trades | 47.2% of buyers | 51.2% of sellers

Foreign: 28.0% of total | 23.2% of buyers | 32.9% of sellers
Regional: 13.5% of total | 17.5% of buyers | 9.5% of sellers
Domestic: 58.5% of total | 59.3% of buyers | 57.6% of sellers

WTI: USD 52.75 (-0.11%)
Brent: USD 55.70 (+0.85%)
Natural Gas (Nymex, futures prices) USD 3.13 MMBtu, (+0.32%, March 2017 contract)
Gold: USD 1,209.70 / troy ounce (+0.09%)

TASI: 7,101.86 (-0.43%) (YTD: -1.51%)
ADX: 4,548.82 (-0.92%) (YTD: +0.05%)
DFM: 3,642.85 (-0.98%) (YTD: +3.17%)
KSE Weighted Index: 427.38 (-0.52%) (YTD: +12.44%)
QE: 10,597.22 (-1.40%) (YTD: +1.54%)
MSM: 5,776.17 (+0.43%) (YTD: -0.11%)
BB: 1,303.70 (-0.03%) (YTD: +6.82%)

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26 January – 10 February (Thursday-Friday): Cairo International Book Fair, Nasr City fairgrounds.

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.

08 February (Wednesday): N Gage Debate on National Food Safety Authority, Four Seasons Hotel Nile Plaza, Cairo.

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

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.

08 March (Wednesday): 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.

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).

17-19 September (Sunday-Tuesday): Pipeline-Pipe-Sewer-Technology Conference & Exhibition, Intercontinental Citystars Hotel, Cairo.

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.

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.