Thursday, 9 February 2017

Even eating pigeon with Anthony Bourdain is better than talking tax reform with el sahafa masriya

TL;DR

What We’re Tracking Today

Bloomberg’s morning show is loving Egypt — and thinks the market is still trading at a (slight) discount to global emerging markets. Reporter Filipe Pacheco tells morning show host Yousef Gamal El-Din that a combination of solid earnings and strong macro data have fueled the bourse this week — remittances from Egyptians living abroad and general inflows into the economy are all up. “Egyptians are putting their money back into Egypt.” But are stocks still cheap? Says Pacheco: “Despite the fact that the main index rose around 54% since the devaluation in November, it’s still trading at about 26% cheaper than its pre-float value. And we can also say that the measure for the index, the average for the EGX30, is trading at about 11.8x expected earnings, and that’s still lower than 12.14x for emerging market stocks. It’s still cheap to buy Egyptian stocks — for how long that will last it’s hard to tell.” (Watch, runtime: 2:43)

Enter Egypt-based Bloomberg reporters Ahmed Feteha and Ahmed Namatalla with a great chart-based piece that looks at “key financial and economic changes over three eventful months,” including bonds (foreign appetite is back), equities (we’re 41% cheaper in USD terms), currency (have we bottomed out?), loans and aid (we’re on a borrowing spree), inflation (God help us…), and business activity (shoot us now).

Descalzi’s corruption charge is big for Descalzi, but not for Zohr. Eni chief Claudio Descalzi has been ordered to stand trial alongside 10 other people on allegations of corruption that have dogged Eni’s USD 1.3 bn purchase of a Nigerian exploration license back in 2011. Eni and Royal Dutch Shell (with whom Eni owns the license) have also been charged as companies. It’s not great news for Descalzi, who was hoping to be reappointed CEO when his term expires later this year, but it is unlikely to mean anything for Zohr, a non-controversial project within Eni, from our understanding, that has already netted the company returns from the sale of stakes to Rosneft and BP. Eni’s board has confirmed its “total confidence” in the CEO, the English edition of Il Sole 24 Ore reports. A statement from the board of the state-owned company reads in part: “Claudio Descalzi, was not involved in any way in the conduct under investigation. [The board] maintains their utmost support for him as CEO.” More in the Financial Times and Reuters.

On The Horizon

New cabinet on Sunday? Prime Minister Sherif Ismail has said he expects to unveil his new cabinet at the House of Representatives on Sunday. We’re hoping the economic team remains intact, but at least one minister is rumored to be exiting.

“Talks” on pre-float letters of credit to resume: Central Bank Governor Tarek Amer will meet with members of the Union of Investor Associations on Monday to resume talks on pre-float LCs, Al Shorouk reports.. Amer has been meeting with the union periodically to discuss relief and payment schedules for companies that have found themselves upside-down LCs they opened in the period immediately prior to the float. Youm7 has more.

Lebanese President Michel Aoun is visiting Egypt and Jordan next week, the Daily Star reported. The trip comes at the invitation of Egyptian President Abdel Fattah El Sisi and is part of a broader effort to "reconnect" with Arab countries, Aoun told his cabinet.

The Central Bank of Egypt’s Monetary Policy Committee will meet next Thursday (16 February) to review rates. The MPC’s full-year 2017 schedule is here.

Flights from Russia to resume? Keep an eye on 23 February, the date state-owned Russian news service Sputnik said had been penciled in for the likely resumption of flights to Egypt from Russia. The Egyptian Civil Aviation Ministry has since said no date has been set.

German Chancellor Angela Merkel is set to visit Egypt sometime in March, Egypt’s ambassador in Berlin Badr Abdel Atti said, according to Ahram Online.

State visit to Washington? US President Donald Trump has reportedly invited President Abdel Fattah El Sisi to visit the White House. We’re watching closely for signs the day may be announced.

Enterprise+: Last Night’s Talk Shows

The talking heads last night were preoccupied with the eurobond issuance and what it means for FX policy and central bank reserves. Also on their minds: the cabinet shuffle.

Yahduth Fi Masr’s Sherif Amer spoke with former IMF Assistant Executive Director Fakhry El Fekky, who also attributed the slow appreciation of the EGP to an influx of FX following listing of the eurobond issue. El Fekky added that the reduction of imports also had a hand in the easing of the USD rate.

(We’re also hearing that there’s a lack of EGP liquidity chasing the pool of available USD, suggesting something is happening on the demand side as the economy slows, but that’s a story for another day.)

The geniuses at the importers’ division of the Federation of Egyptian Chambers of Commerce feel Chinese new year contributed to the upswing in reserves and the EGP. “More than 85% of Egyptian imports are coming from China, and there is no business coming from there as their banks are closed,” said division member Osama Gomaa. It must be the Year of the Monkey. Amer then hosted political commentator Mostafa El Fekky (who appears to be the only commentator on his roster) to keep the conversation on the upcoming cabinet shuffle alive.

Al Hayah Al Youm’s Lobna Assal discussed reserves with the National Bank of Egypt’s vice president Yehia Aboul Fotouh, who said the oversubscription to the eurobonds is the main driver behind the surge in January’s figure. “Investor confidence in the Egyptian economy has spurred interest in the EGX and demand for government debt,” Aboul Fotouh said (watch, runtime: 3:26).

Ismail cabinet spokesman Ashraf Sultan dodged Assal’s questions on why certain ministers are being removed and what to expect from incoming ministers, saying that he still has no information on the new lineup (watch, runtime: 3:21).

Assal followed up on her previous coverage of the Supreme Tourism Council’s meeting on Tuesday, with head of the Federation of Tourism Chambers Karim Mohsen telling her that the open skies agreement “would be positive to revive tourism … but the Aviation Ministry said they wanted to carefully study this policy (watch, runtime: 2:14).

Hona El Asema’s Lamees Al Hadidi and Kol Youm’s Amr Adib were both off the air last night.

Speed Round

Speed Round is presented in association with

Changes to the tax code are coming, whether in the form of a new law or amendments. The Ismail government is considering the introduction of an earned income tax credit to replace the current list of exemptions. Other changes will include harmonizing the code with the incentives outlined in the Investment Act now being considered by the House of Representatives, said Deputy Finance Minister Amr El Monayer.

The mere notion of amendments to the tax code has touched off a wave of complaining: Unnamed sources in government tell Al Mal that changes to the tax code will take the form of amendments to the existing body of law, and that appears to have incensed the newspaper, which says this would mark the seventeenth time the tax code has been amended since coming into force in 2005 — and despite a promise at EEDC in March 2015 that policy stability would be the order of the day. Meanwhile, PwC partner Abdullah El Adly says the number of amendments to the code is worrying and suggests that the move hints at instability in the government’s tax policy and will be interpreted as such by investors. The head of taxation at the Federation of Egyptian Industries stressed that the upcoming changes should come with a clear statement that tax policy will remain stable in the long term — a big ask for a government rumored facing a cabinet shuffle before month’s end, let alone a nation in the midst of an IMF-backed reform program.

The devil is in the details, but the introduction of an earned income tax credit could be a positive development. We understand concerns about policy stability, but as we see it, policy stability simply means “do not make the process of paying taxes more tedious, do not radically change your philosophy of taxation, and above all else do not increase rates.” The notion that investment incentives — widely supported in the business community — could be introduced without tweaks to the tax code is simply ludicrous. As for the preoccupation with whether it’s best to introduce amendments to the existing code or a new tax code in total as suggested by Finance Minister Amr El Garhy last month? Have a look at the US code and its mess of loopholes and exemptions — there’s nothing wrong with a new code.

Focusing on the mechanics of whether tax codes change through piecemeal amendments or full overhauls is exactly backward — it’s a focus on process at the expense of what really matters: Policy.

This comes as Investment Minister Dalia Khorshid has approved an amendment to how FX losses are treated for tax purposes under Egyptian Accounting Standards, Al Mal reported. The amendment adds an additional option to the standards that allows companies to recognize changes in valuations that preceded the EGP float in November 2016. Egyptian Financial Supervisory Authority (EFSA) head Sherif Samy told the newspaper that the amendment will only be applied this fiscal year, and is not mandatory. In addition to laying out procedures for factoring in FX losses or gains on the income statement, the amended standards will also outline how USD debt will be translated, he added. The amendments will not affect how much companies will ultimately pay in taxes, but will distribute the FX changes over multiple periods, said PwC’s El Adly. Page 1 of the amendment is here and page 2 is here.

The EGX has approved the listing of Banque du Caire’s shares on the EGX, the bourse said in a statement. As a prelude to an initial public offering, Banque du Caire will list 562.5 mn shares at par value of EGP 4 per share, giving it an initial market capitalization of EGP 2.25 bn. The bank has six months to complete its paperwork for listing and is required to issue a minimum of 10% of its shares within the same timeframe, an unnamed official tells Al Masry Al Youm. We had also covered previous reports that the government was considering increasing the percentage of Banque du Caire shares set to be listed to 30% from an initial plan of 20% by issuing 10% of the bank’s shares as GDRs on the London Stock Exchange to “attract foreign investors.”

CI Capital sale to wrap soon? The Egyptian Financial Supervisory Authority (EFSA) should finish going over the details of CIB’s sale of 70-80% of its investment banking arm CI Capital “soon,” sources close to the matter tell Al Borsa, which puts the total transaction value at c. EGP 950 mn. CI Capital might be looking at an IPO toward the end of 2017 as part of CIB’s agreement with the acquiring consortium, which is reportedly made up of Zahran Group, Arafa Group’s Alaa Arafa, Compass Capital’s Abbas and financial services veteran Shamel Aboulfadl, and Salam International Hospital’s Fahad Khater, among others. A number of these backers have reportedly received their security clearance, while other regional investors are still waiting. Zaki Hashem & Partners are advising CIB on the transaction.

Major Chinese contractor pulls out of New Administrative Capital project. China State Construction Engineering Company’s decision to pull out of a USD 3 bn deal to build government facilities at the New Capital is the “latest snag” the mega project is facing, Eric Knecht writes for Reuters. Knecht notes that Egyptian contractors, who offered lower prices than the Chinese company, will take over the job. Meanwhile, a USD 20 bn memorandum of understanding for construction projects in the New Capital was expected to be signed with China Fortune Land Development Company (CFLD) in December, but that has been pushed back and will likely be signed within six months.

Alex Port does another round of summersault, cartwheel, backflip on multipurpose platform: The Alexandria Port Authority has returned to talks with China Harbor on the never-ending saga of the USD 750 mn multiplatform facility in the port. The authority has already twice ended and resumed talks on the project since it was first announced at the Egyptian Economic Development Conference in 2015. Talks resumed at the direction of the Ismail cabinet, said Port Authority chief Medhat Attia, according to Youm7. Alex Port had announced for the second time that it will end talks on the facility back in September.

AMIC breaks down sales performance of the auto industry in 2016 by company and model: Thirteen auto companies reported 15-80% year-on-year drops in sales volumes in 2016, according to data from industry group the Automotive Information Council picked up by Al Mal. (Just to be clear: The story focuses on volumes — the number of cars each distributor moved — not sales revenues, as self-reported to AMIC.) EGX staple GB Auto was one of the lucky few, reporting a sales dip in volume terms of just 0.1% in the year as it went on to accumulate a record market share. Skoda distributor ARTOC Auto posted the largest decline in volumes with a 79% y-o-y drop in 2016 on the back of an ongoing legal dispute between the distributor and the brand after Skoda unilaterally canceled a distribution agreement. Auto Jameel saw unit sales of Daihatsu cars fall 45.6% while Mansour Group reported a 32.5% dip in sales of Chevrolet 32.5% and 25.3% for Opel.

Smaller players are among those who posted gains, with bit player Subaru reporting the strongest sales growth in percentage terms at 92%. Lada and BYD distributors Al Amal came in second with a 56% jump in unit sales, followed by Fiat Chrysler Automobiles at 41%. MCV distributed brands scored sales growth of 12%, while Volkswagen and Audi distributor Egyptian Automotive saw unit sales of its models rise 10%.

EMRA chief’s response to critics of gold tender: We’ll see on 20 April. Egyptian Mineral Resources Authority (EMRA) chief Omar Taima hit back at mounting criticism of EMRA’s terms for gold exploration concessions, saying companies that participate in the bid round will be exempt from customs, income taxes and corporate social responsibility obligations. Speaking at a gathering yesterday, he added that the concessions will be for 38 years, as opposed to 15 years (which he said is the standard globally), adding that the concessions on offer have proven gold deposits. He dismissed claims, including by Thani Stratex Resources CEO David Hall, that production sharing agreements can only work for oil investors, saying that the risks in mining are higher as the concession areas are smaller than those of oil. He told critics that the terms will be vindicated when offers come in on 20 April.

Taima called out Thani and Aton Resources by name, saying they accepted old terms that were less attractive than those in the new bid round, Youm7 reports. We had previously noted the objections raised by the CEOs of both companies. He made sure to let these companies know that the terms have the approval and support of the government.

Tamer Abu Bakr, head of the oil division at the Federation of Egyptian Industries appears to be backing Taima up, telling listeners at the workshop that there are plenty of interested investors in the gold exploration tender, the newspaper reports. He called on investors to show their support to EMRA and participate in the tender, the way international oil companies did with the petroleum sector. Sounds like a perfectly logical way to make a business decision.

SODIC to bump capital for employee incentive program: SODIC is looking to increase its issued and paid-in capital by EGP 13.56 mn to EGP 1.37 bn to finance its employee incentive and bonus schemes, Al Borsa reported. The Egyptian Exchange is currently processing SODIC’s request for the hike, which will be financed through company reserves.

The European Bank for Reconstruction and Development (EBRD) has its first country strategy (pdf) for Egypt after the document was approved by the bank’s board on Wednesday. The EBRD’s cooperation strategy will focus on four priorities. The bank plans to spur private sector growth through SME financing with a focus on women and youth projects. The EBRD will also be looking to help improve Egypt’s energy infrastructure through the promotion of gas market reforms and financing the modernization of municipal infrastructure with the participation of the private sector. The bank will also look to financing renewable energy projects and energy efficiency investments, including energy efficiency credit lines for SMEs, in addition to water efficiency through modernising water supply and wastewater management. The EBRD will contribute to improving governance in the public and private sector with the aim of improving competition, promoting investment and policy delivery.

On a related note, the EBRD is extending the Water Holding Company a EUR 113-120 mn finance facility to fund a project to clean and purify Lake Qarun in Fayoum, an official from the bank tells Al Mal. The total cost of the project is estimated at EUR 550 mn, in which the European Investment Bank is also participating, with additional funding coming through an EU grant, he added. The Water Holding Company is also negotiating with international lenders, including the African Development Bank, for a USD 100-150 mn loan to finance infrastructure projects in Upper Egypt, deputy Chairman Ahmed Moawad told Al Mal.

Prime Minister Sherif Ismail sanctioned a presidential decision to establish a tripartite free trade area between countries of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern African Development Community (SADC), during the cabinet’s weekly meeting on Wednesday, a statement said. The cabinet also approved a law proposal that aims to place organic farming under the Agriculture Ministry’s supervision to ensure their compliance with international benchmarks and local regulations. Additionally, the ministers also signed off on a judicial and legal cooperation agreement that Egypt had signed with Kuwait early in January.

A plan to connect the electricity grids of Egypt, Greece, and Cyprus could be underway, The Associated Press reported. “An official says studies are underway for an undersea electric cable that aims to link the electricity grids of Egypt, Cyprus and Greece with the rest of Europe.” The “EuroAfrica Interconnector project” would include a 1,650 km long cable that has a 2,000 MW capacity to transmit and receive electricity. The project is set to be implemented over 36 months and Egypt signed an agreement to proceed with the studies.

“Several” rockets were fired from Egypt toward the southern Israeli city of Eilat but were intercepted by the Iron Dome defense system with no injuries reported, the Associated Press reports. While the AP says that it was not immediately clear who was behind the firing of the rockets, the Jerusalem Post points the finger of blame to “terrorists in Sinai.”

UK’s House of Commons greenlights Brexit bill: The majority in the UK’s House of Commons voted favor of a legislation that would give Prime Minister Theresa May the green light to officially launch her Brexit strategy on Wednesday, CNN reports. The House of Lords is expected to say their last word on the bill in a vote later this month, but they had previously voted “overwhelmingly in favor” of it earlier in February.

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Egypt in the News

The Trump era heralds a new Egyptian-American lovefest. That’s the dominant narrative on Egypt this morning as the notion (which we first noted early this week) got wide international play thanks to a piece by Reuters’ Lin Noueihed and Yara Bayoumy. The two report that analysts believe that Trump is likely to roll back conditions on military aid that Egypt has viewed as a thorn in its side. The Trump White House seems to be more supportive of President Abdel Fattah El Sisi’s approach to combating terrorism than was Barack Obama.

Bloomberg and the Wall Street Journal are also on the story this morning, zeroing-in on the prospect that the White House will declare the Ikhwan a terrorist group, while the Independent is the latest to pick up on Cairo cheering Trump’s list of unreported terror attacks.

The Trump administration is not currently considering adding more countries to its travel ban list, according to Secretary of Homeland Security John Kelly, as per CNN. Answering questions on why countries like “Saudi Arabia, Lebanon and Egypt” were not included in the initial list he said "we are right now contemplating no other countries, because even though some of these other countries are questionable, in terms of their internal organization, police, that kind of thing, we’re satisfied that most other countries have enough that they can provide the information we’re looking for."

Human rights lawyer Khaled Ali might be gearing for a second, more credible, run for the presidency, Hamza Hendawi suggests in a piece for The Associated Press. His success in delivering the court ruling that the Tiran and Sanafir islands are Egyptian “gave Ali the shine of a defender of the country’s integrity among the many who opposed the handover,” Hendawi says. He told The AP he is considering running again in the presidential elections next year, providing a long shot challenge to incumbent Abdel Fattah El Sisi. "Of course, I am a likely candidate, but I have yet to make a final decision," he says, adding his chief concern is the "legal and constitutional" environment of the vote scheduled for summer 2018. "We have 18 months during which we must work together, reorganize our bases and prepare for a battle that I believe will be an important one, regardless of its final outcome," Ali said. Tafline Laylin suggested in OZY last week that Egyptian scientist Essam Heggy might be gearing up for a presidential bid of his own as well.

Egyptians are going to have to tighten their belts for the time being, but an economic improvement could be nigh, Patrick Werr suggests in The National. We have not seen a positive impact from the reform measures undertaken yet because the economy is in transition and companies are re-adjusting. Werr says “apart from freeing the currency, the government will have to work on securing sustainable sources of [USD].” He says the government could be working on teaching “companies export procedures … developing strategies to lure high-spending tourists back to the country starting in autumn … make it easier for new industries such as mining.” Werr also urges the government to abandon plans for mega-projects apart “infrastructure to support businesses and make life easier for people to commute,” saying he “cannot see any value to be gained from the new administrative capital being built outside Cairo or a new nuclear plant.”

Worth Watching

You should be eating that hamam with your bare hands, Mr. Bourdain: We came across this video of chef and TV personality Anthony Bourdain devouring a stuffed pigeon during a trip to Cairo as part of his No Reservations show. Bourdain explains that chefs, unlike his fellow New Yorkers, do not refer to pigeons as “rats with wings,” but recognise the birds’ importance as food. He said, on his way to grab a meal at Farahat in the heart of Cairo, “[here] people don’t feed pigeons; pigeons, rightly, feed people.” The one issue we have with Mr. Bourdain there is that he was eating his bird with the assistance of a fork, when we all know the only right way to devour proper stuffed pigeon has to be messy and involve just your bare hands (runtime: 02:41).

Diplomacy + Foreign Trade

Ties between Egypt and Saudi Arabia run deep and there is no need for mediation between the two countries, Foreign Minister Sameh Shoukry said in a press conference with Jordanian counterpart Ayman El Safadi, Al Shorouk reported. Shoukry is in Amman, Jordan for talks with Jordanian King Abdullah II and Prime Minister Hany Mulki on security issues, the Foreign Ministry said in a statement.

Egypt condemned Israel’s approval of a law legalizing Jewish settlements built on Palestinian land in the West Bank, the Times of Israel reported. The Egyptian Foreign Ministry called it “destructive to the possibility of reaching a two-state solution, enshrining the illegal status of settlements in contravention of laws, international conventions and UN Security Council resolutions.”

Egypt has eased restrictions at the Rafah border with Gaza in a sign of improved relations with Hamas, Reuters reports. Truckloads of goods have entered the enclave over the past weeks. Egypt has for years kept the Rafah border closed to goods and only opens up to people for three to five days every 40 days.

The joint Egyptian-Indian business council wants to double Indian investments in Egypt to USD 6 bn by the end of 2019 and wants to boost Egyptian exports to India this year, the council’s chairman Khaled Abul Makarem said, Al Borsa reports. Al Masry Al Youm has more.

Suez Canal Authority head Ahmed Darwish signed a memorandum of understanding with the Exclusive Economic Zone of Poland to establish a Polish industrial zone in the Suez Canal area, Al Shorouk reports.

The Egyptian-Romanian Business Forum meet in April for the first time in seven years, Al Ahram reports.

Energy

Electricity Ministry faces serious liquidity issues, looks to collect EGP 1.2 bn in overdue power bills owed by public sector

The Electricity Ministry is looking to collect the EGP 1.2 bn in overdue power bills owed by public sector companies as its liquidity shortages have been hindering its ability to follow through on existing commitments and finance new projects, unnamed government officials tell Al Borsa. On Wednesday, the ministry finalized talks with El Sewedy Electric and Saudi’s NCC to bring down the cost of the new power line being installed in Upper Egypt, Al Borsa reports. In December, the ministry had called off talks on a number of high-profile energy projects signed at the EEDC, saying it was pushing them to its 2022-2027 plan. Last month, the Egyptian Electricity Transmission Company also announced it was pushing new power generation projects further down the pipeline, citing lack of liquidity as the main reason.

Sandvik announces expansion in Egypt, secures USD 107 mn in contracts

Sweden’s Sandvik Group says it secured “a number of strategic projects offshore Egypt to provide a comprehensive scope of Sandvik oil and gas solutions for the ongoing giant gas field developments in the region.” It says the contract values are in excess of USD 107 mn. “As part of the contracts, Sandvik will be providing Super Duplex steel umbilical tubing; SANICRO 28, a high-alloy, high strength austenitic stainless steel for OCTG downhole production tubing together with alliance partner Tenaris; seamless alloy 625 control line and chemical injection lines encapsulated with tubing encased conductor (TEC lines). Deliveries of these solutions have already begun in 2016 and will continue throughout 2017.”

Bapetco increases Obayed field production to 140k boepd

Production from the Obayed natural gas field in the Western Desert increased to140k boepd the Oil Ministry told Al Masry Al Youm. Natural gas production increased to 515 mcf/d and crude and condensates output to 47.4k b/d. The Obayed field is operated by Royal Dutch Shell JV Bapetco.

Basic Materials + Commodities

Price controls in effect for vegetable and fruit wholesalers in Obour, Sixth of October

The Supply Ministry has sent a notice forcing vegetable and fruit wholesalers in Al Obour and Sixth of October City to comply with their regularly issued guided prices, Al Mal reports. While the move, in effect, amounts to price control, the ministry has issued this notice before, but has repeatedly failed to enforce it or keep tabs on it. We tremble at the thought of this being expanded to cover other products, especially considering the hints dropped late last year that the government might codify price controls into law in a number of legislation.

Egyptian market slowdown forces Australia to reconsider faba bean exports

The Egyptian market slowdown is forcing Australia to reevaluate its faba bean crop exports, Grain Central reported. Egypt is one of Australia’s major markets, but the currency float slashed the buying power of importers, farm consultant Chris Heinjus said.

Health + Education

AstraZeneca investing USD 5 mn into expansions

AstraZeneca is investing USD 5 mn into the expansion of its Six of October factory, country President Khaled Atef told Al Borsa. The expansion will increase the company’s annual output by 33%, he added. We had previously reported that AstraZeneca were investing EGP 400 mn in the domestic market this year.

Health Ministry allows pharma companies to sell old meds at new prices for 6 weeks

The Health Ministry has decided to allow pharma companies to sell old meds at the new prices agreed upon last month for a six-week period to ensure medications in short supply remain available, ministry spokesman Khaled Megahed tells Al Shorouk. The decision to hike on medication prices, issued last month, was originally meant to apply to all meds produced after the decision, while all old meds were to be sold at the original prices. However, most companies currently have a three-month backlog of products that they say would take another three months to clear and replace, according to a member of the pharmaceuticals chamber.

Automotive + Transportation

Ride sharing app Kalax looking to increase its fleet to 15K cars by year’s end

Ride-sharing app Kalax is looking to increase its fleet to reach 15K cars by the end of this year, according to a project manager at e Smart Press, which owns the app, Al Borsa reports. The platform, which was launched this month for Android, currently allows users to order a car, microbus, white taxi, tuk tuk, bus, or a tow truck.

Other Business News of Note

CPA wants to crack down on the minimum charge policy

Did you know minimum charges are illegal? Consumer Protection Agency (CPA) head Atef Yacoub wants to crack down on the minimum charge policy, and is encouraging citizens to report any café, restaurant, or other venue that implements the illegal policy, Al Shorouk reports. Well, we never thought we’d see the day when we would agree with one of his policies.

Legislation + Policy

House to discuss Industrial Permits Act in general assembly next week

The House of Representatives has the Industrial Permits Act on its agenda for next week’s general assembly, now that its regulations have been drafted, Al Borsa reports. The legislation is expected to expedite the issuing of licenses for factories.

Egypt Politics + Economics

Egypt plans to issue USD 1 bn one-year USD treasury bill

The Finance Ministry plans to issue USD 1 bn in one-year USD-denominated treasury bills to domestic and international financial institutions, Reuters reported. The auction deadline is 13 February, the CBE said in a statement.

Parliament complaints of lack of cooperation from government agencies over private funds

Some government bodies have apparently been refusing to disclose the accounts on their private funds — which are not part of the budget and have gained the reputation for being slush funds — to the House of Representatives, parliamentary sources tell Al Borsa. The Finance Ministry was supposed to send the House audit reports for every private fund this week, but have asked for a two week extension to deliver them. The House has been gunning for bringing these funds, which total EGP 52.7 bn, under tighter supervision and monitoring. The House Budget Committee said this fall that it would introduce legislation to place 25% of the present-day value of the private funds under the control of the Finance Ministry.

Misr Spinning and Weaving employees end strike

Workers at the Misr Spinning and Weaving Company have suspended their strike and production has resumed in the factories, company chairman Hamza Abul Fath tells Ahram Online. According to Abul Fath, the workers were “misled by the media” into believing that the company is expected to increase their salaries due to the circulation of a draft law on the issue, but clarified that the legislation has yet to be passed.

On Your Way Out

Egypt is expecting to receive the second USD 500 mn tranche of its USD 1.5 bn loan from the African Development Bank (AfDB) in two weeks at the most, according to Al Borsa. Negotiations for the third tranche should begin in the few months ahead, AfDB’s Egypt representative Laila Al Moqadem said, particularly now that the government has implemented the agreed-upon reform measures. She added that the Egyptian government has also requested a USD 150-250 mn facility for a sanitation project in Abu Rawash and will be sending the study to the bank next week.

Authorities shut down 131 cafes and restaurants in Greater Cairo for violating building and licensing codes, Al Shorouk reported. The raid came one day after 24 year-old Mohamed Bayoumi was stabbed to death by waiters at a Heliopolis cafe for an argument over the bill, according to Ahram Online. The owner and employees are currently in police custody.

The markets yesterday

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EGP / USD CBE market average: Buy 18.09 | Sell 18.22
EGP / USD at CIB: Buy 17.95 | Sell 18.05
EGP / USD at NBE: Buy 18.00 | Sell 18.05

EGX30 (Wednesday): 13,228.33 (+0.75%)
Turnover: EGP 1.354 bn (215% above the 90-day average)
EGX 30 year-to-date: +7.156%

THE MARKET ON WEDNESDAY: The Egyptian benchmark index ended Wednesday’s session 0.8% up. The top performing constituents were Egyptian Iron and Steel, Juhayna, and Domty. Wednesday’s worst performing stocks included Qalaa Holdings, Telecom Egypt, and Ezz Steel. The market turnover was EGP 1.4 bn and foreign investors were the sole net buyers.

Foreigners: Net long | EGP + 78.8 mn
Regional: Net short | EGP – 62.3 mn
Domestic: Net short | EGP – 16.5 mn

Retail: 61.6% of total trades | 63.8% of buyers | 59.3% of sellers
Institutions: 38.4% of total trades | 36.2% of buyers | 40.7% of sellers

Foreign: 19.0% of total | 21.8% of buyers | 16.1% of sellers
Regional: 8.8% of total | 6.6% of buyers | 11.1% of sellers
Domestic: 72.2% of total | 71.6% of buyers | 72.8% of sellers

WTI: USD 52.23 (+0.36%)
Brent: USD 55.12 (+0.13%)
Natural Gas (Nymex, futures prices) USD 3.15 MMBtu, (+0.64%, March 2017 contract)
Gold: USD xx / troy ounce (xx%)

TASI: 6,967.40 (-1.01%) (YTD: -3.37%)
ADX: 4,574.20 (+0.64%) (YTD: +0.61%)
DFM: 3,725.93 (+0.20%) (YTD: +5.52%)
KSE Weighted Index: 425.80 (+0.28%) (YTD: +12.03%)
QE: 10,653.83 (+0.65%) (YTD: +2.08%)
MSM: 5,827.70 (+0.05%) (YTD: +0.78%)
BB: 1,310.04 (-0.02%) (YTD: +7.34%)

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Calendar

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

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.

23 February (Thursday): Potential date for resumption of flights between Egypt and Russia, according to Izvestia newspaper.

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.

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