Hadary sends the Pharaohs back to the Afcon final

The Pharaohs have made it to the Africa Cup of Nations final. Veteran goalkeeper Essam El Hadary takes a moment to celebrate (and thank the heavens above) after his second successful block of a penalty shot from Burkina Faso allowed Egypt to advance to the Afcon final after an extremely tense 120 minutes of play. The Pharaohs played Burkina Faso to a 1-1 draw before winning 4-3 on penalty kicks.

Hadary reminded everyone why his nickname is “the High Dam” during nail-biter, blocking not one, but two penalties in the semi-final shootout (watch, runtime 01:06).

The Afcon final kicks off at 9pm CLT on Sunday, 5 February.

Don’t hold your breath for news of the cabinet shuffle today, the cabinet spokesman said last night. (More in Last Night’s Talk Shows, below.)

CAPMAS began gathering data yesterday for its 2017 census. The census will go on until 30 March, according to Al Masry Al Youm. It is expected to cost the state EGP 800 mn, CAPMAS Chief Abu Bakr El Guindy said.

It is rugby fans’ Christmas with the Six Nations championship, which combines the top six teams in the northern hemisphere, set to begin on Saturday. The first round of matches has Scotland take on Ireland, England take on France, and, on Sunday, Italy face Wales.

A random suggestion from one of us this morning: Having begun the week on another continent, at least one of us is very happy to be back in Cairo this morning and looking forward to a weekend with family. If you are blessed to have parents living in the same city as you this weekend, go visit them. Give them a hug. Thank them for helping make you who you are today.

Russian security inspectors will be Cairo in the first half of this month for an airport security audit, Russian Transport Minister Maxim Sokolov said, according to TASS. Security inspectors were expected to arrive for a “final inspection” this week and Izvestia newspaper had said 23 February is the proposed date for the resumption of direct flights between Egypt and Russia.

The next meeting of the Central Bank of Egypt’s Monetary Policy Committee is slated for 16 February (that’s two weeks from today). The MPC’s full-year 2017 schedule is here.

If you were hoping for clarity on the cabinet shuffle today, you’ll be sadly disappointed. Ismail cabinet spokesperson Ashraf Sultan told Al Hayah Al Youm’s Tamer Amin that the new lineup has not been finalized yet. “The negotiations are still ongoing and there is no final date for when the cabinet will send its list of candidates to the House of Representatives,” he said (watch, runtime: 5:46). His remarks echoed an earlier comment by Prime Minister Sherif Ismail. Unidentified sources told Al Masry Al Youm that the list of new candidates will be sent to parliament next week and will include 10 ministers, among them education, higher education, and health, in addition to two members of the cabinet economic group. No sovereign ministry will be affected, while the ministries of tourism and civil aviation will likely be merged.

Supply Minister Mohamed Ali El Sheikh took to the airwaves to defend the recent hike in prices of subsidized sugar and cooking oil. In an interview with Al Hayah Al Youm, El Sheikh pointed to the rise of sugar prices in the global market and said the ministry will help compensate by producing more sugar, as factories will receive 9.5 mn tonnes of sugarcane to produce 1.1 mn tonnes of sugar. Prices of sugarcane purchased from local farmers have also risen, he added. 97% of cooking oil in Egypt is imported, he pointed out (watch; runtime: 10:16).

If tailgating becomes a thing in Egypt, we invite Kol Youm’s Amr Adib to join. No can fill up an hour to celebrate Egypt’s sporting victories quite like him (watch, runtime: 8:29). He was joined in the festivities by TV host Medhat Shalaby (watch, runtime: 3:03). He did spare some airtime to cover the Furnex furniture exhibition — again. Head of the Egypt Expo and Convention Authority Mohamed Sami said that Furnex brought in 200 furniture makers and that 95% of the products are made in Egypt (watch; runtime: 3:43).

Lamees Al Hadidi was off last night.

The Central Bank of Egypt netted USD 4 bn on Tuesday as it collected the proceeds from the eurobond issuance last week, Central Bank Governor Tarek Amer said, according to Reuters. Given that Tuesday was the last day of January, we expect that the bond proceeds will be reflected in a markedly improved reserves figure when it’s announced next Tuesday, offset in part by around USD 700 mn in repayment to the Paris Club.

Amr El Garhy gets big love in the Financial Times: To Finance Minister Amr El Garhy, “winning over international bond investors meant convincing them that last year’s sharp currency devaluation marked a turning point for the country’s economy,” Eric Platt and Elaine Moore write for the Financial Times (paywall). With an oversubscribed total order book in excess of USD 12.25 bn, according to lead manager BNP Paribas, the figure suggests El Garhy “successfully sold the story of a country willing to enact long-resisted reforms and heal an economy that has struggled to attract international money since the 2011 Arab Spring uprising.” BNP Paribas’ Rajiv Shah says “In the 30-year part of the curve, investors were willing to bet on the credit improvements in Egypt.” Platt and Moore also mention that Egypt plans the tap the international bond market again in early 2018, possibly with a EUR-denominated issuance.

…Separately, following on the news of inflows to the banking sector reaching USD 9 bn since the EGP float, foreign holdings of treasury bills have reached EGP 10.2 bn in December, more than ten times the amount held in October, Bloomberg’s Ahmed Feteha writes. Naglaa Nozahie, Assistant Sub-Governor for Economic Research at the central bank, mentioned specifically that foreigners’ holdings of Egyptian treasuries ballooned in November 2016 to EGP 7.8 bn and hit EGP 10.2 bn the following month, according to Al Masry Al Youm.

“Trust in the system is growing,” Assistant Sub-Governor Rami Aboul Naga told Bloomberg. Arqaam economist Reham ElDesoki agrees, adding that “the diversity of sources of inflows from remittances, individuals, and investments is a major indicator of the success of the new system … Now there is a gradual erosion of the foreign currency backlog. Once this happens, the EGP will start strengthening and the black market will completely disappear.”

Hany Farahat, senior economist at CI Capital, tells Reuters that the backlog — which he estimates runs between USD 7-9 bn — is the crux of the issue. “If nothing happens on that front, then I think progress will be much lower," Farahat said.

The Finance Ministry has finished drafting the long-awaited executive regulations for the value-added tax and a draft of the document is with the State Council (Maglis El Dowla) for review, Deputy Finance Minister Amr El Monayer told DMC. El Monayer said that the regulations reflect the input of the business community.

Banque du Caire has informed the EGX of its desire to list 562.5 mn shares at a par value of EGP 4 per share yesterday, giving it a market capitalization of EGP 2.25 bn. The company will list on the stock market next week and make an initial public offering of shares in 1H2017, market sources later told Reuters, describing it as Egypt’s biggest stock offering since 2010. Earlier reports indicated the bank was set to IPO in April or May of this year. EFG Hermes and HSBC are managing the issuance and Baker & McKenzie are legal advisors.

CIB board approves EGP 0.50 per share dividend, will seek USD 300 mn facility to augment tier two capital. The board of directors of leading commercial bank CIB has approved plans seek a facility of up to USD 300 mn to bolster its tier two capital, the bank said in a regulatory filing. The board also recommended a dividend payout of EGP 0.50 per share, Reuters reported. The news came less than a day after CIB reported FY2016 revenues of EGP 11.3 bn and net income of EGP 6.01 bn, up 11% and 27% from 2015, respectively.

The National Bank of Egypt (NBE) is postponing a plan to issue USD-denominated bonds on the international market. The state-owned bank had originally said it would move ahead with the issuance after the government’s eurobond closed. Al Mal cites an unnamed government official as saying the bank no longer has need of the capital injection and thinks 2H2017 would be a better time to go to the market. The bank will rely on bilateral agreements to strengthen its foreign currency liquidity in the meantime.

Egypt’s trade deficit was down by USD 9 bn at the end of 2016, Trade and Industry Minister Tarek Kabil said, Al Mal reported. Exports grew 8.65% to USD 20.285 bn in 2016 from USD 18.670 bn in 2015, while imports fell 10.5% to USD 62.925 bn in 2016 from USD 70.277 bn in 2015, an unnamed government source tells Reuters.

Strained relations with Riyadh have sent the Supply Ministry looking for alternative sources of funding for upgrades to its wheat storage capacities ahead of harvest season in April, Al Borsa reported. The Saudi Fund for Development had pledged USD 500 mn to cover 60% of the project’s costs and was meant to help finance an additional three silos after, but “the tension in Egyptian-Saudi relations after the Tiran and Sanafir case has halted the project,” a ministry official said.

MPs protest increase in staple prices: A number of members of the House of Representatives loudly objected yesterday to a hike in the prices of subsidized sugar and cooking oil imposed on Tuesday, Al Mal reported. MPs said they were concerned move is the first step in the way of removing food subsidies entirely, what they said is despite the dire need for them. In an “urgent memo” (foreign readers: that’s a thing here in Omm El Donia) the House Economic Committee asked Supply Minister Mohamed Ali El Sheikh to repeal the “sudden” decision and requested his presence in a general hearing to discuss the reasons behind the hike.

In other industry news, food manufacturersincluding dairy-producer Kiri, snack-maker Mondelez, Pepsi, and Coca Cola have announced price increases for February ranging from 6-33%, according to Al Borsa.

The Ismail cabinet approved during its weekly meeting the expansion of the Takaful program to allow for the disbursement of cash handouts to orphans, and study the possibility of doing the same for school-age children to ensure they have access to adequate nutrition during their formative years. Before we get to the other decisions, we just want to thank the cabinet on their new and improved bilingual website. Back to the meeting, other decisions taken yesterday include:

• Ratified an agreement between Egypt and Canada that will see the latter support a school feeding program for refugees in Egypt;

• Approving legislation on the structuring of the National Council for Women;
• Passing amendments to the mining law to impose harsher penalties, including increased jail time, against individuals who unlawfully mine any precious metals or ores.

Are we on the precipice of a global currency war? The FT has a great piece this morning suggesting that recent comments from Japanese Prime Minister Shinzo Abe and German Chancellor Angela Merkel “underscore alarm over US’s radical approach to USD,” noting that “The Trump administration’s willingness to break with tradition and comment about currency valuations has raised fears that the US might lead the world into a new round of currency wars.” US President Donald Trump and his top trade advisor, Peter Navarro, have been adamant that a strong USD is undercutting the competitiveness of US exports. Navarro went so far as to tell the FT yesterday that “Germany is using a ‘grossly undervalued’ euro to ‘exploit’ the US and its EU partners.” The specter of a conflict is making headlines across the business press today.

Other US-related news you need to know about this morning:

• Former ExxonMobil chief Rex Tillerson has been confirmed as the Trump administration’s secretary of state (we rather like the guy, to be frank; the NY Times and Politico have more)
• The H-1B visa program is, as we suggested earlier this week, next on Trump’s immigration hit list, the Wall Street Journal reports. The White House and Congress are working on “a draft of an executive order [that] directs the government to re-examine a range of visa programs to ensure they prioritize and protect ‘the jobs, wages and well-being of United States workers.’”
• The US Federal Reserve has left rates on hold in its first meeting since The Donald took office. The Fed “painted a relatively upbeat picture of the U.S. economy that suggested it was on track to tighten monetary policy this year,” Reuters said.

Are we in the End Times for investment bank research analysts, whose numbers dropped by one-tenth since 2012? (That’s the dictionary definition of decimation, by the way…) The Financial Times’ Robin Wigglesworth, a former Middle East hand for the salmon-coloured paper, blames cull on regulatory change and says “the cuts are expected to deepen in the coming years.” He says “a survey of 30 global investment groups and investment banks by Quinlan & Associates last year indicated that research budgets would be cut by 30 per cent.” Wigglesworth gives the example of David Ader and Ian Lyngen who were earlier this year voted the top US Treasury analyst team in Institutional Investor’s prestigious poll for the 11th year running, “but at the time both were unemployed as CRT Capital Group, their company, was in the process of being shuttered.”

The inimitable Matt Levine also tackled the topic in his Bloomberg column yesterday, noting, “Investment bank research is a grim business, because it’s hardly a business at all. A business is, like, you make a thing, and you convince me to buy it, and I give you money for it. Research, classically, is: You make a thing (a research report), and you give it to me for [without charge], and I trade some stocks with your bank and you maybe get credit for some of the commissions. That model has fallen apart in recent years.”

Quant funds are taking over the world: Computer-based hedge funds have been admitted to a list of the all-time top 20 best performers who made the most money since inception for the first time, Lindsay Fortado and Miles Johnson write for the Financial Times. “DE Shaw, Citadel and Two Sigma, which all incorporate so-called ‘systematic strategies’ that trade using computer algorithms, joined the closely followed annual list compiled by LCH Investments, the fund of hedge funds run by the Edmond de Rothschild group… DE Shaw, which manages [USD 27 bn] in assets, entered the list in third spot, while Ken Griffin’s Citadel joined at number five. Two Sigma came in 20th place.” However, the list was topped by Ray Dalio’s Bridgewater, the world’s largest hedge fund, which made USD 49.4 bn since it launched in 1975. Second was George Soros’s Soros Fund Management with USD 41.8 bn since 1973 and despite a net loss of USD 1 bn in 2016. The research also found that the top 20 funds generated 46.9% of all the gains made by the industry since inception, while only accounting for 17.6% of the assets.

It’s all Hadary, all the time as “the shootout hero” clenched Egypt a position in the Africa Cup of Nations final. See coverage in the Guardian, ESPN FC, ESPN UK, CBS and CNN by way of example. Heck, even the New York Times picked up Reuters’ piece on the match starring the 44-year-old netminder. Also making the rounds this morning: An Associated Press piece declaring that Egypt is “abuzz” following reports that House of Representatives speaker Ali Abdel Aal and his two deputies are wasting state funds on flashy cars.

The press (in the US in particular) is spilling barrels of virtual ink expressing its unhappiness that US President Donald Trump is palling around with Arab leaders and “authoritarians” in general. Trump looks like he’s going to be great friends with President Abdelfattah El Sisi since he seems “fine with harsh repression in Egypt,” activist Sharif Abdel Kouddous writes in a drawn-out piece for The Nation that really fails to draw the connection between point and subject matter.

The New York Times’ Rod Nordland also seems to think that The Donald is “in” with the world’s authoritarian regimes despite their shortcomings in the human rights domain, naming Egypt, Turkey, and Trump’s bromance with Russian President Vladimir Putin as some examples. Meanwhile, Thomas Seibart writes for Arab Weekly that Trump is cozying up to Israel and Egypt as his top allies in the Middle East in hopes of establishing strong partnerships to counterbalance Iran’s influence in the region.

The Carnegie Endowment for International Peace released an extensive report on Middle East crises called Arab Fractures. The report is written by Perry Cammack, Michele Dunne, Amr Hamzawy, Marc Lynch, Marwan Muasher, Yezid Sayigh, and Maha Yahya. Arab Fractures argues that “long-standing pillars of the Arab order” are collapsing and says “if any semblance of order is to return after the conflicts subside, citizens and states must forge new social contracts that establish accountability and energize systemic political and economic reform.” In the case study on Egypt, the report says the social, economic, and security challenges are daunting and overcoming them requires changes in security strategies, moving away from grand construction projects, and “empowering the private sector and creating an environment that promotes transparency and the rule of law.” You can read the report in full (97 pages) here.

The World Bank’s policy loans in developing countries are doing nothing but helping climate change settle in, a new study picked up by the Huffington Post claims. The study surveys the World Bank policy operations in developing countries including Egypt, Peru, Indonesia, and Mozambique between 2007-16, showing that “funds intended to boost low-carbon growth are instead supporting investment incentives for projects that put the climate, forests, and people at risk.” In Egypt, World Bank facilities going into investments for coal power plants will cause a substantial rise in coal’s share of the power generation mix from a current 0% to 20% by 2022. Tap here to view the full report.

Daesh has a network of operatives working beyond the borders of the Sinai Peninsula in Egypt’s Nile Delta, security experts claim in the pages of Asharq Al-Awsat. Experts believe that the frequency of Daesh-linked attacks in and around the capital, including the bombing of the Coptic cathedral in Cairo, has risen because it is netting new funding from money laundering operations. A study by the Egyptian Dar Al Ifta said that most of Daesh’s budget comes from its cooperation with corrupt businessmen and companies that help finance its activities.

When Yitzhak Rabin and Gamal Abdel Nasser met for lunch: Nearly 70 years ago, there was a glimmer of hope for Arab-Israeli peace when an invitation from a group of Israeli officers in the midst of the 1948 war brought future “towering rivals” Yitzhak Rabin and Gamal Abdel Nasser together to break bread and talk warmly about the prospects for peace in the region, Rabin said in a 1994 interview. The interview, recorded when Rabin was Israel’s prime minister, is the “centerpiece of ‘Shalom Rabin,’ director Amos Gitai’s new film about Rabin’s bid for peace with the Palestinians,” Howard Goller writes for Reuters.

The website of talented Egyptian photojournalist Eman Helal takes us on a Hot Tub Time Machine journey to a land we’d rather forget. We tripped over her site after coming upon Helal in a very nice New York Times piece on women in photojournalism. The site includes galleries of very powerful images from 2011, the Morsi interregnum and the 2015 elections, among other events.

Egypt is ready to facilitate a new round of Geneva talks on peace in Syria, Foreign Ministry spokesperson Ahmed Abou Zeid told Sputnik. Meanwhile, Vitaly Naumkin, Russia’s adviser to UN Special Envoy for Syria, said he did not rule out the possibility that Arab countries could be among the three guarantor states of the Syrian peace process.

Egypt Ambassador apologizes to Morocco for black magic article: Egypt’s Ambassador to Morocco, Ahmad Ehab Gamaledin, apologized for an article in an Egyptian newspaper that calls Morocco a country of “black magic and Jinn,” Morocco World News reported. The article claimed black magic was behind Egypt not being able to beat Morocco at football for 31 years.

A delegation of 21 South Korean companies is visiting Egypt next Tuesday to discuss potential investments in renewable energy, construction, and tourism among others, Al Shorouk reports.

Italy has established a EUR 200 mn fund to assist African countries in curbing illegal migration, with Libya, Niger, and Tunisia tapped as the three “major partners” of the fund. Egypt, Nigeria, Senegal, and Ethiopia could be added to the lot in the future, Reuters reported. Italy’s foreign minister announced the fund two days ahead of a European Union meeting in Malta on stemming migration from Africa to Europe.

Saudi Aramco has not notified the EGPC that it will resume fuel shipments in February, an unnamed official tells Al Mal. Aramco has halted a five-year USD 23 bn fuel agreement to supply 700k tonnes of petroleum products every month with Egypt for five consecutive months.

More energy companies could be withdrawing from phase one of the feed-in tariff (FiT) program if the Electricity Ministry doesn’t respond to their financial and technical offers soon, Al Borsa reported. The Egyptian Electricity Transmission Company (EETC) had signed power purchase agreements and received offers for the project over four months ago. The Ismail cabinet is currently reviewing the offers but only three out of nine companies have reportedly made the cut, according to unnamed ministry officials. As for phase two of the FiT, sources said, the EETC has sent its contracts over to interested companies earlier this week and is expecting to receive confirmation of funding guarantees by April.

Centamin expects to pay Egypt around USD 100 mn in 2017 in its first full year of profit sharing with the government from the Sukari gold mine after recovering its costs, CEO Andrew Pardey told Reuters. Centamin produced over 551k ounces of gold in 2016, up 26% from 2015. The company was one of the best performing stocks in the FTSE 250 in 2016, The Telegraph said, following a “bumper year.” Centamin had said, however, it will not be entering the Egyptian Mineral Resources Authority (EMRA) upcoming bid round, saying its terms are not economically viable. Centamin’s net profit after tax and EMRA’s share for 2016 was 316.43% higher y-o-y, coming in at USD 214.76 mn compared to USD 51.6 mn in 2015, according to the company’s release to the London Stock Exchange.

Obour Land is targeting net profit growth of 12% in 2017, CEO Ashraf Sherif told Reuters. “We will distribute no less than 50 % of this year’s ]2017’s] net profits in dividends to shareholders,” he said. The company forecasts a 6% increase in net profit in 2016 from EGP 92 mn in 2015. Obour Land will raise prices by 20% in April if the EGP doesn’t strengthen against the USD, said Sherif, and expects to grow its market share to 42% in 2017 from 36% currently and to 45% by 2018.

The Nile Transport Authority continues to press a claim against Cleopatra Hospital Company’s Nile Badrawi Hospital, asking it to pay EGP 43 mn for the land upon which the hospital is built, Al Borsa reports.

The Egyptian Council of State (Maglis El Dowla) rejected a draft law from the House of Representatives’ Constitutional and Legislative Committee that sought to grant the president the power to appoint the heads of the State Lawsuits Authority, the Court of Cassation, and the Maglis itself, Ahram Online reported. The Judges Club — made up of the aforementioned judicial authorities — said in a statement back in December that the proposed law violated the separation of powers between the branches of government.

The House of Representatives approved a KWD 50 mn (USD 164 mn) loan from the Arab Fund for Social and Economic Development on Tuesday meant to finance water exploration and agricultural projects in Sinai, Ahram Gate reported. The projects are part of a tripartite development plan for the area that will focus on improving healthcare services, establishing water networks, and enhancing employment prospects. Egypt will allocate an additional USD 30 mn from a USD 74 mn grant from Canada to the projects, International Cooperation Minister Sahar Nasr said, according to Al Shorouk.

Following reports this week about a shakeup in the Interior Ministry that more than 100 mid-level police officials be reassigned, as will 11 assistant and deputy ministers, the ministry announced the formation of committees to evaluate policemen on ethics, behavior and psychological condition. The decree, published yesterday on the Official Gazette, comes two weeks after Minister Magdy Abdel Ghaffar announced that the ministry will form its own human rights committee. These new policies, which followed a year with a string of police shootings of unarmed civilians, appear to be part of a reform of the police force promised by the government and which were supposed to have been enacted in the amendments to the Police Act. The legislation has been dormant since last year. This comes as The Associated Press reports that more than 80 people were arrested in Central Cairo on Wednesday on the anniversary of the Port Said soccer riots in 2012, to prevent unsanctioned protests.

Ikhwan-affiliated channel Mukmileen aired a series of what it claims to be leaked excerpts of called between Foreign Minister Sameh Shoukry and President Abdel Fattah El Sisi. The recordings appear to confirm reports that Iran insisted on Egypt’s inclusion in the Syria peace talks of Lausanne last October, according to statements attributed to Shoukry. Other leaks reportedly include a briefing to El Sisi that Bahrain and Kuwait had attempted to soften the GCC statement criticizing Egypt for claiming that the attacker behind the St. Peter and St. Paul cathedral received instructions from Ikhwani leaders harbored in Qatar. A third leak allegedly has Shoukry reporting on the efforts Kuwait is making to mediate between Cairo and Riyadh. The Foreign Ministry has refused to comment on the leak as of this morning, Al Masry Al Youm reports. The alleged leaks themselves don’t appear to show anything but standard briefings between a president and his minister, making the existence of the recordings the most noteworthy thing.

New tomb: A team of Japanese archaeologists from Waseda University uncovered a Ramesside-era tomb in Luxor’s Theban necropolis that’s believed to have belonged to a royal scribe named Khonsu, Ahram Online reported. Inscriptions decorating the ceilings are much better preserved than most of the art on the walls, an Antiquities Ministry official said.

MP Mohamed Fouad filed an inquiry with the House of Representatives on the illegal trade of endangered marine animals after pictures showing four endangered turtles being sold at an Alexandria market made the rounds on social media, Ahram Online reports. According to Fouad, who is a member of the Local Administration Committee, the endangered animals, including baby sharks and sea turtles, are hunted off the Alexandrian coast and sold to local markets as food.