Tuesday, 14 February 2017

Lots of Valentine’s Day love for Egypt (or at least the economy)


What We’re Tracking Today

Happy Valentine’s Day, wonderful readers. It looks like we’re getting a basket of gifts, including positive economic indicators, a love letter from America, a tub-tub from the head of the EBRD and … a new cabinet?

That’s right, folks: A new cabinet. We look to be hours away from learning who keeps their seats and who’s exiting stage left in Prime Minister Sherif Ismail’s cabinet shuffle. The list apparently made it to the House of Representatives yesterday, and the House has been leaking since last night like a rusty pipe in August. We have the full rundown in Speed Round, but if you read no further than this sentence, you can take heart that it seems Finance Minister Amr El Garhy and Trade and Industry Minister Tarek Kabil are staying, suggesting policy stability is the order of the day. We hope the same can be said about Investment Minister Dalia Khorshid.

Our heart-shaped card this year comes in the form of a flattening yield curve, more signs of foreign currency inflows, and early signs of recovering EGP after the pound strengthened to better than EGP 17.00 to the greenback. Those be green shoots, everyone. (More on all of this in Speed Round, too.)

Oh, and the Central Bank of Egypt’s take on inflation was out yesterday (pdf) and it doesn’t make us want to shoot ourselves in the head. Why? Month-on-month inflation rose modestly to 4.07% in January compared to 3.13% in December. As one of the smartest people we know told us earlier this week: Forget about year-on-year inflation. It’s meaningless after a “force majeure” event such as the float. We think the month-on-month figures back Finance Minister Amr El Garhy’s suggestion earlier this week that inflation should peak by the end of this quarter.

A love letter to Egypt from America: Our friends at the Egyptian American Enterprise Fund will release chairman Jim Harmon’s 2017 Annual Letter today (pdf) and are giving Enterprise readers a sneak peek. The highlight of the letter is Harmon’s expectation that US President Donald Trump will be “the ultimate ‘deal’ president” and that “the warm relationship he shares with the Egyptian leadership gives us hope that this is an opportune moment for Egypt to build a constructive relationship with the US.” EAEF portfolio companies Sarwa Capital and Fawry both “exceeded their operational and financial targets for 2016,” Harmon notes, and are ideally positioned to benefit from the Central Bank of Egypt’s financial inclusion push starting this year. Harmon’s letter also notes that former regional IFC boss Nada Shousha has joined EAEF’s board. Name check: Our friends at Algebra Ventures, Tanmiya Capital Ventures — two new investments at EAEF — and Lorax Partners all get singled out for love, and we’re delighted that the wonderful Amal Enan has been tapped to become the fund’s executive director, having previously served as chief of staff.

Sweet nothings whispered in our ear by the international community #1: We’re getting attention this morning from IMF Managing Director Christine Lagarde, who said, “The latest developments we’re seeing as far as currency appreciation are probably an indicator that the transition is coming to a close.” Her statements came in an interview on Dubai TV with Zeina Soufan (runtime: 1:24) on the sidelines of the Second Arab Fiscal Forum in Dubai. She does state that it may get worse before it gets better when asked on the 29.6% headline inflation, but noted that this is typical of an economy in transition, and once the transition is done, we should see inflation drop.

Sweet nothings whispered in our ear by the international community #2: Meanwhile, EBRD boss Sir Suma Chakrabarti hailed the improvements in Egypt’s business climate, telling Reuters that the country has taken great strides since the IMF loan agreement was inked in November. The EBRD is “still only scratching the surface of commercial opportunities” in countries like Egypt—where it has so far invested EUR 5 bn—and also in Morocco, Tunisia, and Jordan and sees its investments potentially doubling over the next five years. The bank is currently in talks with sovereign wealth funds in the GCC over joint investment opportunities.

Egypt back on the global energy investment map: Also taking place today is the 2017 Egypt Petroleum Show. We were told President El Sisi might be stopping by there. Shell Egypt Managing Director Gasser Hanter, who is slotted to speak at the conference, said that Egypt is “placing itself on the global energy map once again,” and lauded the show as a positive step in attracting FDI and increasing economic growth, Youm7 reports.

The sweetest gift of all: The House of Representatives’ disciplinary committee has recommended booting The Thing Called Agina from parliament. Readers will recall Agina as the misogynist who believes women should undergo [redacted] tests as a condition for admission to university and that they should also be subject to mutilation to compensate for the [redacted] dysfunction of Egyptian men.

What We’re Tracking This Week

The Central Bank of Egypt’s Monetary Policy Committee to leave interest rates unchanged when it meets on Thursday, a Reuters poll suggests. Nine out of 13 economists polled forecast the bank will hold overnight deposit rates at 14.75% and overnight lending rates at 15.75%. "Higher interest rates will not help curb inflation which is elevated mainly due to cost push factors and a negative base effect," Arqaam Capital senior economist Reham Eldesoki says, “current levels are sufficient to render investing in the Egyptian pound attractive for local and foreign investors.” Pharos Holding agrees and its research note published on Sunday forecasts a rate hold. Capital Economics, on the other hand, is among the outliers and expects a 100 bps rate hike.

Enterprise+: Last Night’s Talk Shows

The Guess-a-thon of who will be sitting around the cabinet table (it really should be a game show at this point) was the talk in the airwaves last night. We have chapter-and-verse in Speed Round, and the Talking Heads added little to our base of knowledge, so here’s the rest of it:

The IMF delegation due to check up on the health of the Ismail government’s economic reform program is set to arrive in March and not February as previously announced, Deputy Finance Minister Ahmed Kouchouk told Hona Al Assema’s Lamees Al Hadidi. The delegation will determine whether Egypt will receive the second payment of the USD 12 bn facility, Kouchouk explained, pointing out that Egypt’s budget estimates and the IMF’s expectations are largely in sync.

Kouchouk then discussed how attractive Egypt has become to global capital, noting that in the past three months, we’ve seen 25% growth in exports to USD 1.5 bn, USD 500 mn in foreign investment in the EGX, and USD 2 bn worth of T-bills being bought. FDI this year could close at about USD 6 bn, he suggested. Lamees and Kouchouk were later joined via phone by Finance Minister Amr El Garhy, who again emphasized that inflation should slow in the coming months and adding that the inflationary spike following the float was higher than expected.

You can watch the full El Garhy / Kouchouk / Lamees interview here, runtime: 30:31.

In other non-cabinet speculation news, Kol Youm’s Amr Adib was ecstatic that he will interview football megastar Lionel Messi on Wednesday at 6 pm CLT (watch, runtime: 2:52). Messi will be in town to promote the Tour n’ Cure hepatitis C medical tourism program launched by Prime Pharma. But that’s not stopping the Health Ministry from taking credit for the whole thing, according to an emailed statement.

Everyone else was on cabinet shuffle watch last night. Yahduth Fi Masr’s Sherif Amer said the tourism and civil aviation will likely merged, and the names suggested for that post are Amr Sedky and Mohamed Wafaa. Sources told Amer that the ministries of antiquities and culture will also be merged, and Ahmed Nawar is expected to head up that post. Hany Suwailam has been suggested for the Ministry of Education, while Mohamed Sultan and Mahmoud El Meteny were reported to be in the running for the Health Minister job.

Speed Round

Speed Round is presented in association with

It’s cabinet shuffle day as the House of Representatives is set to vote on Prime Minister Sherif Ismail’s new line-up, having received the final roster from the PM last night. The list of ministers has been leaking piecemeal to the press, and there have been a handful of contradictory reports. Based on a statement last night from the prime minister and having parsed about 6.02 x 10^23 individual media reports, here’s what we expect:

What we know for certain: There will be nine new ministers, and two portfolios will be merged into one, the prime minister said last night, according to Al Shorouk. Finance Minister Amr El Garhy set a template by tapping very competent people to serve as deputy ministers — deputy ministers whose appointments were announced essentially at the same time as his. Ismail suggested he will follow that example this time around, with up to four deputy ministers set to be appointed across a number of ministries at the same time as the first line is announced. The PM offered no further details on the shuffle other than to confirm that all will be revealed today.

It is with great relief that we report hearing that Finance Minister Amr El Garhy will stay on as Finance Minister. Ismail’s reference to the success of the El Garhy’s deputy ministers — Ahmed Kouchouk, Amr El Monayer, and Mohamed Maait — leaves us optimistic they will also continue in office. Sources from the Electricity Ministry tell Al Mal that Electricity Minister Mohamed Shaker isn’t going anywhere, and it presently seems a safe wager that Trade and Industry Minister Tarek Kabil will stay on, despite a single report to the contrary from Al Mal.

Also staying: The so-called ‘sovereign ministers’ of defense, foreign affairs, interior and justice will all keep their posts, from what we understand.

So, who’s out? We have no inside information, but a number of news outlets are reporting that Investment Minister Dalia Khorshid is on her way out. This would be disappointing, as the relatively low-profile Khorshid has proven herself both competent and proactive, particularly on policy. Perhaps not as shocking is that Planning Minister Ashraf Al Araby will be leaving cabinet after a long run. There is talk that Health Minister Ahmed Rady is out, while a handful of sources are positing that Supply Minister Mohamed Ali El Sheikh could go, too.

Other ministers whose names have consistently popped up as candidates to exit: Ergot flip-flopping artist Agriculture Minister Essam Fayed; Education Minister El Hilali El Sherbiny (probably because he was outplayed by a Facebook group); Higher Education Minister Ashraf El Sheehy; Parliamentary Affairs Minister Magdy El Agaty; Local Development Minister Ahmed Badr; Endowments Minister Mokhtar Gomaa.

Set to merge: Word on the grapevine is that the tourism and civil aviation ministries will consummate their union today.

Okay, but who is in? The rumor mill is in overdrive. Highlights:

  • House Economics Committee head Ali El Moselhy has been tapped to join the new cabinet and has resigned his seat in the House of Representatives, a development confirmed by Rep. Moustafa Bakry. Speculation is rife that the former Mubarak-era Social Solidarity Minister and former head of Egypt Post will head either the Investment Ministry or the Supply Ministry, but the smart money seems to be on Moselhy taking over theSupply Ministry.
  • The very competent Deputy Governor of the Central Bank Lobna Helal has been tapped to take over the Planning Ministry, Al Mal reports.
  • Sources also said that Hesham El Sherif, a former head of the Cabinet Information and Decision Support Center (IDSC), will be appointed minister of local development, Al Borsa reports.
  • Agriculture economist Abdel Moneim El Banna is reportedly going to head up the Agriculture Ministry.
  • Muawad El-Khouli will be appointed minister of higher education, sources tell Ahram Online.
  • Central Authority For Organization & Administration head Mohamed Gamil will join cabinet, according to Al Borsa, which does not specify the position he may take.
  • Cairo Court of Appeals head Ayman Abbas was said to be in the running to take over Legal Affairs, a report he has since denied.

How will the confirmation vote work? The House must approve or reject the whole lineup and will not vote on individual ministers. If MPs reject the list of nominees presented by Prime Minister Sherif Ismail, he can reshuffle once more or keep his current cabinet.

Economic green shoots: The average yield on Egypt’s five-year bond dropped by 80 bps to 16.676% and the 10-year bond yield shed 56 bps to 16.784% at yesterday’s auction, Reuters reported. This followed larger drops in shorter-maturity instruments on Thursday and Sunday that brought the average yield on the six-month T-bills down by almost 200 bps. Egypt’s yield curve is starting to flatten after having inverted in November and December following the EGP flotation.

Coming closer to the point where the slope of the yield curve is turning positive, we recall Brown Brothers Harriman & Co saying in December that the inverted yield curve signaled slower inflation and lower future interest rates. They suggested that “once the central bank feels that inflation has been squeezed out, it will cut rates. So the curve should move from inverted to positively sloped as the bank cuts.” At the time, BNP Paribas Investment Partners also expected Egyptian assets, “especially the currency,” to appreciate. Bryan Carter, their head of EM fixed income said “after a currency floats and devalues sharply there is a period of overshoot when it trades too cheap and then investors come back to re-establish fair value.”

Ahmed Badreldin, Partner at The Abraaj Group, echoed a similar sentiment in our interview with him in January. He said “we will probably start to see the fruits of the float in the second half of 2017 as the currency begins to strengthen and likely stabilize given the inverted forward curve.”

CIB became the first bank to post a buy rate for USD of less than EGP 17 per greenback yesterday as Al Mal reports it setting a buy price of EGP 16.95 per USD 1. CIB was followed by three other banks, and this appears to be part of a bigger trend.

Foreign exchange bureaux are telling Al Shorouk the rate at which people are selling USD is accelerating. Sources are saying bureaux have bought foreign currency for as little as EGP 17.00-17.20 per USD 1 in smaller cities and for EGP 17.40 per USD 1 in Greater Cairo. One FX bureau reported its USD inflows increasing tenfold. An unnamed CBE source corroborated the FX bureaux’s story to Al Mal, saying inflows to the banking system have jumped to USD 11.2 bn since the float.

Russian delegation to talk flights as deadline for Daba’a contracts approaches. A delegation of Russian officials headed by Federation Council Chairwoman Valentina Matviyenko is visiting Egypt this spring to resume discussions resuming direct flights between Egypt and Russia, Russian news website Izvestia reports (Russian). The visit coincides with the deadline Egypt has set for completing the contracts for the USD 30 bn Daba’a nuclear power plant with Rosatom. Vladimir Putin aside, Matviyenko will be the highest ranking official to visit Cairo in a decade. Ahram Online also has the story.

The Finance Ministry is reportedly looking at moving to a floating exchange rate for customs, an unnamed government official tells Al Borsa. In a bid to stop the whining and gnashing of teeth immediately after the float, the ministry had directed the Customs Authority to set a monthly exchange rate for the calculation of duties. The fixed rate is presently set at EGP 18.50 using the previous month’s market exchange rate as a reference point. A switch to a floating rate raises some IT / tech infrastructure questions, but ultimately makes sense to us.

Elsewhere, the Finance Ministry has reportedly set 15 April as the deadline for all public-sector employees to be paid through electronic cash transfer rather than the distribution of physical cash, Al Borsa reports. Government offices have been notified of the date and are expected to issue bank cards to the remaining unbanked employees over the coming two months. Prime Minister Sherif Ismail had issued an ultimatum last month giving government offices and companies three months to make the switch to an electronic payment system, prohibiting a return to cash or cheque payments. The decision is part of a state-endorsed initiative to enhance financial inclusion, as the government has accelerated the pace at which it has shifted payroll to the banking system over the past two years.

The nation’s import bill fell 15.5% y-o-y in January to USD 3.8 bn from USD 4.5 bn the year before, sources tell Al Borsa. The government and Central Bank had adopted several measures last year to limit import activities and keep foreign currency inbound until the shortage was over.

BP completes acquisition of 10% of Eni’s stake in the Zohr gas field: Petroleum Minister Tarek El Molla, Eni CEO Claudio Descalzi, and BP CEO Bob Dudley signed a contract on Monday completing BP’s acquisition of a 10% stake in the Shorouk offshore concession’s Zohr gas field from Eni for USD 375 mn, Al Mal reports. President Abdel Fattah El Sisi also met with the CEOs ahead of the Egypt Petroleum Show for 2017 to discuss the progress being made in Zohr, Youm7 says. World Oil also has the story.

MOVES- Schneider Electric appointed Walid Sheta as Regional Cluster Head of North East Africa and Levant, a regional grid including Egypt, Sudan, Libya, Lebanon, Syria, Jordan, and Iraq, according to an emailed statement. Sheta was the Regional President for English Speaking Companies in the West Africa region before assuming his current role.

Egyptian cotton sees a revival? The crackdown on “fake” Egyptian cotton worldwide and increase in domestic prices are helping revive interest in cultivating Egypt’s high quality long-staple cotton, Arwa Gaballa and Eric Knecht write for Reuters. Egyptian cotton output will be "between double and triple this year," said Ahmed Elbosaty, chairman of Modern Nile Cotton, following a year where the crop hit a “more than 100-year low.” The government moved in 2016 to save the crop by banning “all but the highest quality cotton seed, dramatically shrinking the area under cultivation but restoring quality.” The accusations of Welspun mislabeling products for US retailers as Egyptian cotton ended up reviving interest in the product. "This whole thing revived interest in Egyptian cotton and increased demand," Nabil al-Santaricy, head of the Alexandria Cotton Exporters Association, said. "There’s now more focus on selecting suppliers who use 100 percent Egyptian cotton … Companies are telling us that ‘we are required to get your license because we cannot sell our product without it,’" the head of Cotton Egypt Association said. Also supporting the industry is the EGP float, which made its prices more competitive internationally.

The notion of a China-style “one child” policy for Egypt could be a catastrophic mistake economically, even if you set aside the risk of immediate social backlash. Okay, we’re being a bit hyperbolic with the “one child” line, but Social Solidarity Minister Ghada Wali’s recent suggestion that the legislative action needs to be taken to curb population growth needs to be carefully studied before the chattering class blithely nods its head and makes approving murmurs. Why? Far from us worrying about “The Robots” taking our jobs, there’s a concern among demographers and some economists that aging populations and low population growth will mean (a) there aren’t enough caretakers for a massive emerging cohort of senior citizens that’s about to swamp the globe and (b) that there won’t be enough consumers around to buy all the [redacted] The Robots will make. Think we’re taking it too far? Go these two very accessible pieces in the East Asia Forum and on the WEF website. The bottom line: Large, young populations need to be managed, but they’re huge assets.

Hamas’s new Gaza capo isn’t our friend: Hamas has named hardline militant commander Yehia Sinwar as its new leader in Gaza, the Associated Press reports. Sinwar was freed by Israel in a 2011 prisoner swap after over 20 years behind bars. He replaces Ismail Haniyeh as prime minister, while Haniyeh takes over supreme leadership from Khaled Mashaal. Sinwar is described as Egypt’s “bitter enemy” by Kobi Michael, a former head of the Palestinian desk at Israel’s Ministry for Strategic Affairs, in this piece by The New York Times, as he “favored cooperation with [Daesh] affiliates fighting the Egyptian army in the Sinai Desert” and was a hardcore member of the Ikhwan, once upon a time.

Elsewhere in the world this morning, because not everyone is blessed to live in Omm El Donia on Valentine’s Day:

Better start paying for a WSJ subscription: The Wall Street Journal is tightening its paywall to close the “Google loophole,” which allowed people to skirt its paywall by cutting and pasting the headline of a story into Google, according to Digiday’s Lucia Moses. “The Journal is a rarity in publishing in that it gets more money from readers than advertising, so it’s protective of its paywall,” Moses writes. The WSJ is looking to optimize the paywall for subscription sales but have it also continue to work for advertisers. One way to find WSJ links with subscriptions now: El Face. “While it’s ending Google first click free for now, which lets subscription publications be indexed by Google search, the Journal is increasing its exposure to new audiences by letting people read for free links that are shared on social media by subscribers and staffers.”

*** Investor relations analyst wanted: Inktank Communications, the Cairo-based investor relations firm that works with both major EGX-listed companies and privately held groups, is looking for two investor relations analysts. The position with our parent company entails working on everything from investor presentations, earnings releases, board material and client transactions to investor-focused press releases and correspondence. Outstanding English-language writing skills are a must. While we have a hiring preference for Egyptian nationals, applications from foreign candidates based in Egypt are welcome. Learn more about the position at inktankcommunications.com/careers or apply now with a cover letter and CV to patrick@inktankcommunications.com.


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

Egypt in the News

Egypt’s “record-high inflation rates” made it into international headlines this morning, with Reuters suggesting that “the jump could put pressure on the Central Bank to hike rates” during Thursday’s Monetary Policy Committee meeting on Thursday, despite the poll results predicting that the bank will hold the overnight deposit and lending rates. The Financial Tribune and Market Watch also have the story.

The sale of Nubian land under the 1.5 mn feddans project to investors is the latest in a string of slights by Sisi’s government against the Nubian community, writes Ruth Michaelson for The Guardian. The government’s redevelopment plans for an area that once held 17 Nubian villages will benefit many people, but not the Nubian community, Mohamed Azmy, head of the General Nubian Union, says.

The Saudis have apparently been keeping up with the Mubaraks, and are reading the frequent public appearances by the ousted leader’s sons Gamal and Alaa Mubarak recently as attempts to “test the waters” and gauge public reaction. The Saudi Gazette has the story.

Other stories worth noting in brief include:

  • Egypt has picked a side in the Syrian war, Oren Kessler writes for Foreign Affairs. He suggests he uncovered one of the region’s “worst-kept secrets” that “Cairo supports the Syrian regime of Bashar al-Assad” (paywall);
  • The float of the EGP is threatening investment in real estate in Egypt, Jahd Khalil writes in Quartz, suggesting the sector is slowing down;
  • The Cityscape Egypt conference taking place next month in Cairo is expected to help promote private and public sector partnerships in real estate development, Renad Ghanem writes for the Saudi Gazette;
  • Egypt’s version of nationalism “glorifies the land” but not its people, Maged Mandour argues for Open Democracy, adding that an understanding of that clears up the people’s backlash against the Saudi Arabian island transfer agreement.
  • Western governments and institutions are failing to address human rights violations in countries with which they have trade and security pacts — including Egypt, Garry Kasparov and Thor Halvorssen write for the Washington Post.
  • A team of Italian researchers will be entering King Tut’s tomb in the Valley of the Kings in hopes of uncovering a legendary lost chamber, restarting “the hunt for the discovery of the 21st century,” the Washington Post reports.

Image of the Day

A group of Egyptian divers have created an underwater sculpture park where new coral habitats can grow and flourish. The group behind the project, i-DiVE TRiBE, “are a diving club that work to protect and preserve the marine environment,” according to Coast Monkey. They hope to “generate whole new coral systems in an effort to preserve existing natural coral reefs in the Red sea” and “to divert divers away from existing reefs to these new locations.” The sculptures picked resemble ancient Egyptian gods and are built from scrap metal and granite. “The project has been ongoing for a number of years and earlier this month the latest statue, resembling an Oscar statue and the ancient Egyptian God Petah was installed.”

Worth Watching

Proposal at the Pyramids: On this special day for lovers, we’ll bring you what could be our mushiest video yet. This quirky, pun-addicted couple posted a video (runtime: 5:30) on the What Doesn’t Suck Facebook page of when they flew to Egypt from Dubai and spent a wonderful 48 hours (their words). They were amazed by how cheap everything was, the history and the sites, and, get this, they didn’t mind the crazy traffic. “Egypt is the most fascinating place in the world,” exclaims the guy. Their trip culminated in a proposal at the pyramids. Ah, to be young and in love again — with a person or the city, take your pick.

On Deadline

Government was the weaker side in med price talks with pharma: The hikes in medication prices (yes, the ones agreed upon over a month ago) made it clear that the government was the noticeably weaker side in the negotiations on the price hikes, writes Al Shorouk’s Safwat Kabel, who seems to have just now caught up on the last three seasons of the Pharma Companies vs. Health Ministry soap opera. To combat the rising prices, Kabel prescribes boosting local production of meds and putting in place consequences for companies that halt production as a pressure tactic to further jack up prices.

Diplomacy + Foreign Trade

Brotherly love with Lebanon… Lebanese President Michel Aoun urged President Abdel Fattah El Sisi to launch an “Arab salvation initiative” based on a unified strategy to fight terrorism, Al Masry Al Youm reports. The initiative would “work on finding political solutions to the persisting crisis in the Arab world, especially in Syria where fire has been raging for years,” he said, Al Arabiya reports. During a joint press conference following the two presidents’ meeting, Sisi expressed Egypt’s readiness to support Lebanon’s military and security institutions, Al Mal reports, in what could be a veiled statement against Hezbollah, which Aoun defended in remarks to a private Egyptian TV station earlier this week, The National reports. Separately, Interior Minister Magdi Abdel Ghaffar met with his Lebanese counterpart, Ahram Gate reports. The Trade and Industry Ministry is also looking to capitalize on the Lebanese delegation’s visit to Egypt and is mulling forming a joint Egyptian-Lebanese Business Council to increase investments between the two countries, Al Borsa reports.

…but with Sudan, not so much. Sudan and Egypt have rekindled their dispute over Halayeb and Shalatin following the African Union Summit, Sudanow reports. Sudanese President Omar Al Bashir said “The first general elections held in Sudan under the Anglo-Egyptian Condominium covered [Halayeb] as a Sudanese constituency,” he said. “Elections constitute a genuine sovereign exercise.”


EGAS did not cancel agreements with Dana Gas

EGAS has not frozen or canceled its existing E&P agreements with Dana Gas, a source at EGAS told Al Mal. The source said Dana Gas, like any IOC, is just making its expansion plans contingent on debt repayment. Dana Gas’s CEO Patrick Allman-Ward had announced freezing investment in Egypt over delayed payments after announcing the company’s 2016 results.

El Molla talks potential investments with Norwegian delegation

Petroleum Minister Tarek El Molla discussed potential investment opportunities in oil and gas exploration with a Norwegian delegation, headed by the country’s deputy minister of petroleum and energy, Al Ahram reported last night.

Basic Materials + Commodities

Supply Ministry to use private sector for wheat storage this season

The Supply Ministry plans to use private sector facilities to store the 4 mn tonnes of wheat expected from this season’s harvest, defying the recommendations of the House committee that investigated last year’s wheat corruption scandal, unnamed House representatives tell Al Borsa. Supply Minister Mohamed Aly El Sheikh had announced earlier this month that the private sector’s role in storage this season would be limited to where the government’s capacities are maxed out. Members of the House Economic Committee asked the ministry for a detailed report on the status of its current capacities and upgrades that have been completed.

Abu Qir Fertilizers expects revenues to increase by 150% in FY2016/17

Abu Qir Fertilizers expects revenues to grow 150% in FY2016/17 after the Cabinet approved allocating 45% of production towards export or domestic supply using free market prices, the company said in a statement.

Real Estate + Housing

NREC signs USD 101 mn loan agreement with Agility Investment

Kuwait’s National Real Estate Company signed a USD 101 mn five-year convertible loan facility with Agility Investment to finance developments in Egypt and Abu Dhabi, CPI Financial reported. The facility will be used to finance projects including the 3.8 mn sqm Grand Heights luxury residential project in Egypt and USD 1 bn Reem Mall in Abu Dhabi.


Egypt receives award for best partition in Spanish tourism fair

Egypt received an award for having the best partition out of 160 participating countries at the Fitur 2017 International Tourism Trade Fair in Spain, the Saudi Gazette reports. Tourism Minister Yehia Rashed had headed the Egyptian delegation to the trade fair last month.

Automotive + Transportation

Nile Cairo, Careem to set up new app combining services

Nile Cairo and Careem have agreed to set up a new application that will allow users to book a water taxi and a Careem car to transport them to and from the water taxi’s docks, Nile Cairo’s chairman Karim El Saba’a tells Al Borsa. No details were provided on the pricing of the service. According to El Saba’a, Nile Cairo plans to set up nine docks over the next three years at an estimated investment value of EGP 100 mn, with three of these docks set to be completed within the next three months.

Banking + Finance

EFSA issue unified code to regulate over-the-counter trading

The Egyptian Financial Supervisory Authority issued a set of unified guidelines on Monday to regulate the OTC market, particularly with regards to ownership transfer, Al Borsa reports. The new code comes in a place of a number of other independent directives that had previously been in place.

Egypt still an area of focus for Shuaa Capital

Egypt remains a main area of focus for Shuaa Capital alongside Saudi Arabia and the UAE, Reuters reports. Away from Egypt, the firm is currently in talks to acquire a financial services company and has three IPOs in the pipeline, of which two should be final in 2017.

Other Business News of Note

Tourism Urbanization Co. to voluntarily delist from EGX

The state-owned Tourism Urbanization Co. has decided to voluntarily delist from the EGX, the company said in regulatory filing. The board has authorized the buyback of the 10.139% of the company’s shares presently held in the market. The Tourism Urbanization Co. is 66.2% owned by the Egyptian General Co. for Tourism and Hotels.

Legislation + Policy

Supply Ministry could force companies to print price tags on their products

The Supply Ministry is mulling amendments to the Consumer Protection Act that would force private and public sector companies to print price tags on their products, Al Shorouk reports. The suggestion, which aims to curb “unjustified price increases,” caused the expected uproar among food producers at the Federation of Egyptian Industries, according to Al Borsa. The idea appears to have the backing of Consumer Protection Agency chief Atef Yakoub.


Youth Minister says six stadiums are ready for spectators

Six football stadiums are ready for spectators, but allowing fans to attend football matches again is a decision for the Egyptian Federation of Football, Youth Minister Khaled Abdel Aziz said, Al Masry Al Youm reports.

On Your Way Out

An EU-funded school feeding program will be extended to reach 500K children during the coming period, Al Masry Al Youm reports. The news came at a UN celebration that saw the appointment of actors Ahmed Helmy, Mona Zaki, and Donia Samir Ghanem as the program’s new goodwill ambassadors.

The Thomson Reuters Foundation is looking to sell affiliated news website Aswat Masriya to an investor, as the foundation is unable to continue funding the company, Al Mal reports, citing an unnamed source.

The markets yesterday

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EGP / USD CBE market average: Buy 17.2082 | Sell 17.3115
EGP / USD at CIB: Buy 16.95 | Sell 17.05
EGP / USD at NBE: Buy 17.03 | Sell 17.08

EGX30 (Monday): 12,740.05 (-1.41%)
Turnover: EGP 1.092 bn (169% above the 90-day average)
EGX 30 year-to-date: +3.201%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session 1.4% down. The top performing constituents were Domty, Juhayna, and Global Telecom. Monday’s worst performing stocks included Egyptian Iron and Steel, Ezz Steel, and Telecom Egypt. The market turnover was EGP 1.2 bn and local investors were the sole net sellers.

Foreigners: Net long | EGP +91.3 mn
Regional: Net long | EGP +2.3 mn
Domestic: Net short | EGP -93.6 mn

Retail: 54.7% of total trades | 53.1% of buyers | 56.3% of sellers
Institutions: 45.3% of total trades | 46.9% of buyers | 43.7% of sellers

Foreign: 25.6% of total | 29.5% of buyers | 21.7% of sellers
Regional: 7.2% of total | 7.3% of buyers | 7.1% of sellers
Domestic: 67.2% of total | 63.2% of buyers | 71.2% of sellers

WTI: USD 53.09 (+0.30%)
Brent: USD 55.79 (+0.36%)
Natural Gas (Nymex, futures prices) USD 2.92 MMBtu, (-0.88%, March 2017 contract)
Gold: USD 1,226.50 / troy ounce (+0.06%)

TASI: 7,059.55 (+0.54%) (YTD: -2.09%)
ADX: 4,563.98 (-0.14%) (YTD: +0.39%)
DFM: 3,637.55 (-1.75%) (YTD: +3.02%)
KSE Weighted Index: 419.05 (-0.32%) (YTD: +10.25%)
QE: 10,670.51 (+0.07%) (YTD: +2.24%)
MSM: 5,815.36 (-0.06%) (YTD: +0.56%)
BB: 1,307.81 (-0.11%) (YTD: +7.16%)

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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.

18 February (Saturday): Egyptian-Turkish Business Forum conference.

20-21 February (Monday-Tuesday): Fulbright Student Alumni Regional Conference: Contemporary Health Issues, Conrad Hotel, Cairo.

20-22 February (Monday-Wednesday): 20th International Conference on Petroleum Mineral Resources and Development, Egyptian Petroleum Research Institute, Cairo.

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.

15 March (Wednesday): Arab Women Organization’s event: Investing in refugee women, UN General Assembly Building, New York City.

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.

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

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