Thursday, 16 February 2017

The Russians aren’t coming back on 23 February


What We’re Tracking Today

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It’s MPC day: The Central Bank of Egypt’s Monetary Policy Committee (MPC) is meeting today to decide on interest rates. A Reuters poll earlier this week showed nine out of 13 economists expecting the central bank to hold overnight deposit and lending rates at 14.75% and 15.75%, respectively. Five out of seven economists surveyed by Bloomberg agree. “A further rate increase will not be of much help,” Radwa El Swaify, head of research at Pharos Holding, says. Bloomberg’s Ahmed Feteha nails it on the head when he writes: “With the majority of Egyptians without bank accounts, raising interest rates typically takes time to contain inflation. It can, however, immediately increase government borrowing costs and curb credit growth, economists say.” Adds El Swaify: A rate increases risks doing more damage than good to the economy and “would be negative for growth.”

On inflation, Chris Jarvis, IMF mission chief for Egypt, told Feteha: “We expected inflation to go up, as it did, for several months after the launch of the reform program,” but inflation should slow down “once these effects wear off, and so long as budget and monetary policies remain tight.”

There’s no love for Egypt this week from BMI, which is projecting “lackluster growth” in the coming quarters, and expecting the country’s sovereign creditworthiness to deteriorate further before improving. In its featured story on Egypt in its monthly MENA report for March 2017 (extracts here and here), BMI sees falling yields on sovereign debt as unjustified considering the marginal growth, which it projects to land at 3.2% for the year, below the Bloomberg consensus at 3.6%. “Yields on Egypt’s bonds will inevitably rise over the coming quarters given anticipated further hikes in interest rates in 2017 by 50bps to 16.25% and our expectation for a 15% depreciation in the EGP against the USD by the end of 2017. Slightly mitigating the implication of these trends is that while the country’s debt is relatively high (about 80% of GDP), only 19% of GDP is denominated in foreign currency, thus reducing exposure to currency movements.” In addition to slow growth, BMI has placed heavy weight on a slow recovery of tourism industry and only a marginal uptick in consumption given subsidy reforms, high unemployment, and a slight reduction of the fiscal deficit (forecast to drop to 9.9% of GDP in 2017).

Hey, investor relations officers: You officially have more time to disclose FY results. The Egyptian Financial Supervisory Authority (EFSA) has extended the deadline for submitting 1H2016-17 financial results for EGX-listed companies to 28 February, while companies filing full-year results will get an extra month and must disclose FY2016 results by 16 April. The decision came after a number of IROs requested extra time to digest changes to Egyptian Accounting Standards on how FX losses are to be treated.

Lionel Messi did not arrive in Cairo yesterday, postpones his trip to Egypt: The football great was due to visit as part of the Tour n’ Cure hepatitis C campaign, but pulled out after following FC Barcelona’s 4-0 defeat to Paris Saint Germain in the Champions League, Al Arabiya reported. The visit has not officially been rescheduled, a statement from the tour sponsor said, but a source told Al Masry Al Youm it is slated for next week.

Trump is at war with his own intelligence community: US President Donald Trump has blasted the US intelligence community for what he called “criminal” leaks that forced his national security adviser, Michael Flynn, to resign over apparent contacts with Russia. The news is the lead item on the front pages of most North American newspapers we surveyed earlier this morning (cf: WSJ and NYT as examples) as well as the Financial Times on the other side of the pond. Reuters also has the story along with a companion piece on Republican lawmakers joining calls for an investigation into the Trump administration’s ties to Moscow.

Yesterday, it was the special forces guys. Today, it’s the spooks: The Wall Street Journal alleges in an investigative piece that “U.S. intelligence officials have withheld sensitive intelligence from President Donald Trump because they are concerned it could be leaked or compromised, according to current and former officials familiar with the matter.” Journal columnist Daniel Henninger is already asking Is this Trump’s Watergate?

On The Horizon

HSBC’s MENA & Turkey Equity Conference takes place in Dubai next Wednesday (22 February).

JP Morgan’s Global Emerging Markets Corporate Conference kicks off in Florida on 27 February.

The EFG Hermes One on One takes place in Dubai starting 6 March 2017.

Renaissance Capital will host its Egypt Investor Conference in Cape Town 24-25 April 2017.

Enterprise+: Last Night’s Talk Shows

Newly appointed Agriculture Minister Abdel Moneim Al Banna took to the airwaves (and newspapers) last night to address concerns over allegations of corruption that have plagued him since his appointment was first rumored early this week.

Naturally, the first place to defend one’s reputation is on the fact of the alternative facts factory that is Ala Mas’ooleety, hosted by the creature named Ahmed Moussa. Al Banna said he has never been summoned or questioned by the Prosecutor General’s Office on charges that he engaged in everything ranging from squandering public funds to treason. The allegations were made by two of his disgruntled employees at the state’s Agriculture Research Center (watch, runtime: 4:57).

Cabinet spokesperson Ashraf Sultan defended Al Banna in a call-in with Al Hayah Al Youm’s Tamer Amin, saying that all ministers were chosen according to specific criteria, including integrity. “He met all the conditions required,” Sultan said (watch, runtime: 5:35). Al Banna also called in (watch, runtime: 5:54).
Over at Yahduth fi Masr, sources tell Sherif Amer that the cabinet shuffle will be followed by a shakeup of the nation’s governors. On Messi canceling his trip to Cairo, Prime Pharma Chairman Tamer Wagih confirmed that Messi requested the postponement due to Barcelona’s loss against Paris Saint-Germain football club. “Messi told us that Barcelona’s coach wanted him to attend an urgent meeting with the team,” he said. A date for Messi’s visit, expected next week, will be announced today.

Kol Youm’s Amr Adib looked physically distressed and heartbroken after being stood up by the dashing Argentine. So much so, he even aired footage of ONTV’s preparations for the interview (watch, runtime: 2:24).

He managed to hold back his tears just enough to discuss his thoughts on when inflation might cool as well as the appreciation of the EGP. A Kol Youm reporter spoke with Hyper One shopping mall deputy GM Adel Emam, who said that they can’t reduce prices unless suppliers cut wholesale prices, and suppliers are holding off on reducing prices until the exchange rate settles. Consumers have also been hesitant to buy on account of the shifting exchange rate, waiting for better prices, Emam speculated (watch, runtime: 18:17).

Adib next spoke with Alaa Sabaa’, a member of the Federation of Egyptian Chambers of Commerce’s automotive division on the Finance Ministry’s announcement that the exchange rate for custom tariffs has been fixed at EGP 16 to the greenback for the next 15 days. He appeared to play down the move, telling Adib that the custom tariffs only represent 30% of the total price of the car and downplaying the cut in the customs exchange rate, which previously stood at EGP 17.50 (watch, runtime: 3:45).

Speed Round

Speed Round is presented in association with

Russian tourists likely not returning on 23 February: Russian officials are still not entirely satisfied with upgrades to Egyptian airport security measures, Upper House Parliament Speaker Valentina Matvienko said, according to Russian news agency Sputnik. Matvienko confirmed that she would be visiting Egypt in March but that the trip is “unrelated to flight security issues.” The date of the visit coincides with the deadline Egypt had announced for the completion of the Daba’a nuclear power plant agreement, as we noted this week. Sputnik had earlier suggested that flights to Egypt could resume on 23 February.

Prime Minister Sherif Ismail will have his first tête-à-tête with his new cabinet lineup early next week, the PM old Egyptian state television last night, without clarifying when the new ministers will be sworn in, Al Shorouk reports. Sources tell the newspaper that the shuffle will be followed by a shakeup of the nation’s governors, with five to nine of them to be replaced. Likely candidates for the chopping block include the governors of Giza, Assiut, Aswan and Dakahlia, according to the collective wisdom of the domestic press. Ismail held his last cabinet meeting yesterday with the outgoing ministers, expressing his gratitude for their service, according to a cabinet statement.

We are now getting some of the first reactions to the new cabinet. Sahar Nasr is getting some love from the business community, with Federation of Egyptian Industries head Mohamed El Sewedy lauding the decision to merge the investment and international cooperation ministries, Al Shorouk reports. US-Egypt Business Council head Omar Mohanna echoed El Sewedy’s sentiments, saying Nasr’s network of international contacts makes her one of the most qualified people to handle investment policy, Al Borsa reports. Chairman of the Egyptian-European Business Council Mohamed Aboul Enein also said he is optimistic about Nasr’s new post, and called on her to formulate a coherent strategy for all Egyptian embassies and commercial services offices abroad to promote investments in Egypt.

Incoming Agriculture Minister Abdel Moneim Al Banna’s appointment remains the hot topic of the day, with Al Wafd leaders raising the biggest stink over the decision, according to Al Mal, which is quite close to the political party. Al Banna went on the PR offensive yesterday to defend himself against the allegations (see Last Night’s Talkshows, above). Speaking on policy, Al Banna tells Al Shorouk that he plans to bring a scientific approach to setting policy — a not so subtle allusion to the chaotic flip-flop under his predecessor, Essam Fayed.

Supply Ministry officials did not hesitate to give incoming Supply Minister Ali El Moselhy a piece of their mind when it comes to the ministry’s direction, Al Borsa reports. Unnamed ministry officials expect him to prioritize bolstering supplies of basic commodities (including rice) to drive down prices. In other words: Business as usual. The official also said El Moselhy should immediately boost subsidies using funds freed up by the purging of welfare cheats from the commodity subsidy system. Another unidentified ministry source is also looking for indicators on how El Moselhy will deal with the upcoming wheat harvest season and the issues of wheat storage.

As for incoming Education Minister Tarek Shawky, international schools went straight for the jugular and are lobbying him to reverse some the clampdowns launched by his predecessor. Representatives of private schools called for Shawky to remove clauses that allow the ministry to revoke licenses of schools arbitrarily and demanded an end to the monitoring of private schools, restrictions placed on contracts with teachers, and the royalty fees paid by schools to the ministry amounting to 1% of annual tuition revenues, Al Borsa reports.

Incoming Planning Minister Hala El Said tells Al Masry Al Youm that she plans on hitting the ground running by putting in place short-term plans that will help citizens adjust to the reform measures. El Said also said she will be prioritizing an overhaul of the labor and production policies, but provided no further details on her strategies.

Finance ministry revises budget deficit target for current FY: The budget deficit for the state’s current fiscal year will close in the 10-10.25% range against an initial estimate of 9.8% of GDP, Reuters’ Arabic service quotes Finance Minister Amr El Garhy as saying. El Garhy says Egypt remains on track to bring the deficit down from the 12.2% recorded in FY2015-16.

The Finance Ministry has revised its exchange rate for customs duties to EGP 16.00 per USD from EGP 18.50 per greenback, Al Borsa reports. The ministry will also review the exchange rate to be used to calculate customs every 15 days instead of every 45 days, as had been the practice. The story was also picked up by Reuters, which said the rate came on the back of “significant strengthening” of the EGP in recent days. Customs revenues reportedly topped EGP 14.5 bn during the first seven months of FY2016-17, with the Customs Authority budgeting for inflows of EGP 27.4 bn throughout the fiscal year, unnamed government sources tell Al Borsa.

The Finance Ministry will reportedly roll-out a three-month promotional campaign for the value-added tax and is set to release the executive regulations for the tax next week, Al Borsa writes in a piece promoting the ad agency it reports as having been tapped to run the campaign.

Egypt aims to reach natural gas self-sufficiency in 2018, EGAS Chairman Mohamed El Masry told Reuters’ Arabic Service. The private sector will be able to import natural gas for industries through new regulations by 2018 or possibly before then, he added. A large portion of the gap between supply and demand will be filled when the Zohr field begins production at the end of the year, he said. El Masry also expects natural gas exports to resume from Egypt’s three liquefaction plants in 2019. He expects natural gas output to reach 5.9 bcf/d by FY2018-19. The Oil Ministry’s previous target date for natural gas self-sufficiency was 2019 as it expected new discoveries to be announced in 2H2017. That opens the question of what we’re going to do with FSRUs, given the contract for the Höegh Gallant, the first FSRU Egypt contracted, is commissioned for a five-year term that expires in 2020, and the second FSRU, provided by BW Gas, is also on a USD 60 mn a year contract expiring the same year.

BP could invest another USD 13 bn in Egypt over the next five years, according to a statement from the British Embassy, with UK ambassador John Casson saying that this is “evidence that the UK is committed to further deepening cooperation and supporting Egypt’s economic growth.” Casson and UK Trade Envoy Sir Jeffrey Donaldson attended the Egypt Petroleum Show on Tuesday and Wednesday.

EBRD loan will strengthen Emirates NBD Egypt capital base: The European Bank for Reconstruction and Development (EBRD) is providing Emirates NBD Egypt with a USD 125 mn subordinated loan to strengthen the bank’s capital base, EBRD said in a statement. The EBRD financing package consists of two tranches: USD 50 mn already committed to strengthen the bank’s capital structure, and an uncommitted tranche of USD 75 mn. The loan qualifies as Tier II capital under recently modified CBE regulations and is the first time a third party has provided this form of financing to an Egyptian bank, EBRD claims.

Accelero Capital announced it acquired the ownership interest of its largest shareholder, Orascom TMT Investments (OTMTI), in a management buyout. In addition to the changes in Accelero Capital’s ownership structure, the transaction also includes the discontinuation of the management of certain assets for which Accelero Capital provided management, consultancy, and advisory services. OTMTI will remain a strategic investor in the ACDC fund managed by Accelero Capital that invests in the development of data center ecosystems globally. Khaled Bichara, co-founder of Accelero Capital commented on the transaction saying: “Moving forward, we will continue to aggressively source turnaround and high growth opportunities with an industry agnostic approach and a focus on fundamentals.” Accelero has managed investments of over USD 550 mn over the past five years and has also raised over USD 225 mn for direct deployment and acquisitions through its investment funds. We first reported on OTMTI’s exit from Accelero Capital yesterday.

Hypermarket chain Spinneys expands to Upper Egypt, will launch another Cairo store next month: Hypermarket chain Spinneys is expanding to Upper Egypt by opening a new store in Minya. The company said the opening of its Minya store, its first in Upper Egypt, marks “an important milestone” as it kick-starts its expansion across the country in 2017. “Over the past couple of years, we successfully tripled the number of operating stores in the Egyptian market,” noted Spinneys CEO Mohanad Adly. The company opened four locations in 2016 and will inaugurate a location in Sheikh Zayed at the end of March. You can read the company’s full statement here (pdf).

Let’s go skiing in Cairo: Majid Al Futtaim announced that the Mall of Egypt, which is slated to have the country’s first indoor ski slope, will open on 2 March.

MOVES- Ahmed Shalaby, Managing Director of Tatweer Misr, was appointed Vice President and non-voting board member of non-profit organization the International Council for Small Business (ICSB). Shalaby retains his position at Tatweer Misr, but will work closely with ICSB to establish several international universities in Egypt, according to an emailed statement.

Leading private-sector bank CIB will hold its annual general meeting on 14 March to discuss dividend distribution for FY2016, according to a regulatory filing. CIB’s board has recommended a dividend payout of EGP 0.50 per share.

Is Naguib in trouble with the Free Egyptians Party? Naguib Sawiris is facing “scrutiny” from the Free Egyptians Party’s disciplinary committee for calling an unsanctioned press conference to announce his return to politics. He’s also in hot water for allegedly criticizing the party (of which he was a very high profile founder) in public. Anyone else feeling echoes of Al Wafd pre-2011 (or wondering why a party would call an investigation into a member exercising his right to free speech)?

Responding to Trump, UN secretary-general says “no plan ‘B’” to two-state solutionduring visit to Cairo: The Israeli-Palestine conflict dominated United Nations Secretary-General António Guterres’ statements during a speech at Cairo University last night and his meeting with President Abdel Fattah El Sisi, Reuters reports. Guterres stressed that “there is no plan B other than the two-state solution” to what he called “the mother of all conflicts,” in response to US President Donald Trump shifting his stance on peace in the Middle East by saying he would be open to “one and two state” solutions. Guterres also Israel-Palestine and other regional security issues with El Sisi, according to Ahram Gate.

Arab-US military alliance in the works? Meanwhile, the Trump administration is reportedly looking to have its “Arab allies” including KSA, the UAE, Egypt and Jordan “form a military alliance that would share intelligence with Israel to help counter their mutual foe, Iran,” the Wall Street Journal reports.


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The Macro Picture

Emerging market growth picked up “sharply” in January, the Financial Times reports, citing data from the Institute of International Finance that found rebounds in “industrial production and trade, particularly exports. … The apparent surge in EM growth coincides with surprisingly strong trade figures from China, which said its exports were up 7.9 per cent in January while its imports jumped 16.7 per cent, bolstering optimism about the health of the world’s second-biggest economy.”

If Goldman Sachs thinks the US market is getting “growthier,” as we noted yesterday, Morgan Stanley Sees slower growth in China, but argues income will still rise, writes Jennifer Hughes for the Financial Times. Morgan Stanley published a 118-page long report “explaining how the world’s second biggest economy will avoid the sort of financial shock feared by western investors, and make it to official ‘high income’ status in the next 10 years.” Incomes will rise to USD 12,500 by 2027. Morgan argues that even though debt is high, it is funded by Chinese savings, not external finance. It says growth might be slow, but it will accelerate. “With a starting point of lower debt and per capita levels and by not allowing for a sharp appreciation of its currency as Japan did after the Plaza Accord, China today is arguably better positioned to still achieve growth rates that can outpace global growth.” High domestic consumption will help: Services are set make up 60% of GDP by 2030. Despite the positive outlook, the report says: “China needs to manage its debt burden carefully, and not let the need for growth to trump this.”

Image of the Day

Victorian khawagas being tourists in Egypt in the late 1800s: Fascination with Egypt’s antiquities has been well documented over the years. “While it’s forbidden for tourists nowadays to clamber up Egypt’s pyramids to take a snap, back in Victorian times it was all the rage,” Naomi Leach writes for Mail Online. She published a number of vintage photographs from the 1890s to the 1930s capture tourists “enjoying picnics and having an after-lunch nap, inside a temple with hieroglyphics,” including the one above, taken circa 1989.

Egypt in the News

Egypt’s role in regional peace processes is at center stage this morning as the international media look at Cairo’s efforts to mediate between warring factions in Libya and discuss Egypt’s role in the Israeli-Palestinian conflict after US President Donald Trump decided he would back either a one- or two-state solution. Trump reportedly hopes Egypt and KSA can help him break the logjam between the Palestinians and the Israelis. The New York Times’ Ian Fisher and Ben Hubbard, however, is playing into age old orientalist tropes of “the bad Israeli-hating Arab” as to why Trump’s proposal will fail. Egypt, for one, is also grappling with its own set of major challenges to economy and security and may just be too busy to look outward.

The Times of Israel, meanwhile, resurrects a perpetual canard with a report that President Abdel Fattah El Sisi has proposed giving up some of the Sinai for the establishment of a Palestinian state, citing Israeli Minister Ayoub Kara. We’re business geeks, not foreign policy types, but our take: When pigs fly, folks.

Al-Monitor’s Ahmed Fouad seems to think that Trump’s decision to pull out of the Trans-Pacific Partnership, could have catastrophic results for Egypt, particularly the Suez Canal, which is a major connection in the trade route between TPP members on either side of the world.

Meanwhile, on the business front: Egypt’s decision to float the EGP in November set it on a different path from Nigeria, where the government is insisting on maintaining a currency peg, Bloomberg’s Paul Wallace writes, re-treading ground that has been trod to death since December. Elsewhere, Euronews reports that “Five years on from the revolution that saw the fall of the Mubarak regime, and Egypt is still on its knees” economically. Subtle, no? Someone go get us some kneepads.

Egypt’s Golden Triangle project could be a way for Egypt to bypass the bureaucracy and drive growth, Patrick Werr writes for The National. As an independent body, the Golden Triangle Authority’s chairman reports directly to the prime minister, and the authority can issue its own set of terms for mining, which is expected to account for 60-65% of investment in the area, effectively sidestepping obstructionism from the Egyptian Mineral Resources Authority.

Let’s check in with the fundies, shall we? The Ikhwan are divided between old and new leadership, and are struggling to maintain unity against “unprecedented repression,” writes Khalil Al Anani for Al Jazeera. Despite a “moderate level of oppression” generally working in the Ikhwan’s favor, the narrative of victimisation backfired after the events of July 2013, he says. Young members are increasingly more disenfranchised from their old leadership, many of which are in prison or exile. Foreign pressure on the group could also be on the rise as relations between Egypt and Sudan appear to be easing, with reports of Khartoum expelling Ikhwan members as a gesture to mend fences with Cairo, Shounaz Meky writes for Al Arabiya. A news report from Al Hayat quotes an Islamist source saying the Sudanese government was sending Egyptian Islamist who fled to Sudan following 2013 an “indirect message” that it “is better for them to leave Sudan.”

Reusing “old glass jars, tuna cans [for] ashtrays, and plastic crates [for] chairs” has always been a thing here in Egypt, but young, upper-middle class city folk are just picking up the habit. Rowan El Shimi zeroes-in on Up-Fuse’s recycled bags and Reform Studio’s plastic waste-based furniture in her latest piece on “conscious consumption” for Gulf News.
An ongoing Project by Polish architect Agnieszka Dobrowolska called “Outside In: the Art of Inclusion” is bringing contemporary art to Cairo’s City of the Dead, Reuters reports.

On Deadline

Egypt’s cotton production is being neglected despite long-staple cotton being a highly valued commodity on an international level, Karim Abdel Salam writes in a column penned for Youm7. Abdel Salam takes note of the Welspun India scandal, which he says shows that international companies understand how valuable Egyptian cotton is, and wonders why the national mega projects being touted by the government don’t include plans to address Egypt’s agriculture.

Diplomacy + Foreign Trade

Egypt’s Chief of Staff Mahmoud Hegazy mediated between the head of Libya’s UN-backed government, Fayez Serraj, and Khalifa Hifter, the country’s most powerful army commander, Egyptian army spokesman Tamer El Rifai told the Associated Press. The two agreed to form a joint committee that would make key changes to the 2015 UN-brokered peace deal. Once the parliament in eastern Libya endorses the changes, it would pave the way for parliamentary and presidential elections next year. Reuters and The National also have the story.

Egypt’s business councils eye strategies to boost trade in Africa: The Egyptian-Kenyan Business Council has approved forming six subcommittees to implement a strategy to increase trade between the two countries from USD 400 mn to USD 1 bn, Al Borsa reported. The subcommittees included the energy, engineering, petrochemicals, agriculture, food, animal resources, textiles, building materials, and med industries. Meanwhile, the Lebanese-Egyptian association, the Federation of Egyptian Chambers of Commerce, and the Federation of Egyptian Industries are looking to continue expanding Egypt’s trade dealings in Africa by sending a trade delegation to the Ivory Coast and Senegal in April, Ahram Gate reports.

The Egyptian Exchange and Sydney Stock Exchange signed a MoU, Wednesday, agreeing to cooperate within fields of mutual interest, AMAY reports.


Suez Canal Authority receives five offers to build USD 600 mn ship fueling station

The Suez Canal Authority has five offers from regional and International investors to participate in a project to build a ship fueling station in the Adabiya Port with an investment cost of USD 600 mn, authority chief Mohab Mamish told Al Mal. The offers come from Kuwait, the UAE, Saudi Arabia, the Netherlands, and Russia, he added. The move comes as part of the SCZone strategy to provide logistic services to exploit trade traffic through its ports, he added. The Suez Canal Economic Zone has also received offers from four other companies from Russia, Saudi Arabia, Cyprus, and the UK to invest in fueling stations in Ain Sokhna, which SCZone head Ahmed Darwish said will be integrated with the Adabiya Port project, Al Shorouk reports.

Basic Materials + Commodities

Prices slowly and cautiously going down

Prices of basic foods (wheat, sugar, and cooking oil) and appliances have begun to slowly decrease as EGP appreciates, Al Borsa reports. The newspaper provided a detailed list of the price changes.


Finland’s Huhtamaki investing in new facilities in Egypt

Finnish food packing specialist Huhtamäki Oyj is investing in new facilities in Egypt, according to its 2016 financials release. The total investment in Egypt is expected to be approximately EUR 23 mn with Huhtamaki share at around EUR 17 mn, as the investment will be operated as a joint venture. In October, the company announced that it will set up three new manufacturing units to boost growth in its Flexible Packaging business segment and the largest of the new units will be located in the greater Cairo area and the other two in India.

Health + Education

India’s SunPharma reconsiders Egypt exit, expects 50% growth in sales

The Health Ministry’s decision to raise the prices of meds has driven India’s SunPharma to reconsider their Egypt exit strategy, head of SunPharma Egypt Hany Meshaal told Al Borsa. The company recently launched its own factory in Six of October with an annual capacity of 500 mn, he said, with sales expected to grow to 50% to EGP 120 mn this year from EGP 80 mn in 2016.

Reserves of subsidized infant formula can last seven months

Reserves of subsidized infant formula can last seven months, an unnamed sources at the Egyptian Pharma Trading Company told Al Borsa, denying any rumors of shortages.
The Armed Forces imported 30 mn packs of infant formula at 50% of imported price during a shortage last year. Meanwhile, privately imported infant formula, unshackled by the Health Ministry’s mandatory pricing, went up by 65% to record EGP 100 per pack following the EGP float, Pharmacist Syndicate board member Mohamed El Abd said.

Automotive + Transportation

Careem reminds white taxi drivers it provides the opportunity for 42k of them to use its platform

Ride-hailing app Careem has had to remind taxi drivers still suing it for basically existing in Egypt and providing better services than them that it currently provides the opportunity for 42K white taxi drivers to use its app — an initiative the company had announced last September. The case was launched a year ago, back when they were also harassing and publicly assaulting Careem and Uber drivers. We see this totally going well for the taxis.

Automech struggles with industry slump

The Automech Formula car expo, set to run 15-19 March, is reportedly seeing limited participation from local industry players who are backing out due to declining sales and worsening economic conditions, Al Mal

Banking + Finance

Banque du Caire arranging EGP 2 bn loan for EGAS

Banque du Caire is arranging an EGP 2 bn loan for EGAS, Al Mal reported. The loan will be paid back over a period of seven years, including a two-year grace period over which the loan will be completely issued and spent. We had earlier reported EGAS was looking to borrow EGP 2 bn to meet its debt obligations including ones to international oil companies.

Dubai’s Mubasher Holding acquires 36% stake in Egypt’s Mubasher Securities

Dubai’s Mubasher Holding Ltd. acquired a 36% stake in Egypt’s Mubasher Securities for EGP 1.8 mn through one of its local subsidiaries, Al Borsa reports. The move is part of Mubasher Holdings’ major subsidiary overhaul. Mubasher Securities aims to grow its AUM to EGP 2 bn over the next three years and is already in talks with two banks to manage two new funds.

Other Business News of Note

Orascom Construction cancels 1 mn treasury stocks

Orascom Construction has announced it has completed procedures to cancel the 1 mn treasury stocks following its share buyback in a regulatory filing on Wednesday.

Egypt Politics + Economics

Unemployment drops to 12.4% in 4Q2016

Unemployment dropped to 12.4% from 12.6% of the workforce in 4Q2016 from the previous quarter, a recent Central Agency for Public Mobilization and Statistics (CAPMAS) report showed. The drop is attributed to a new wave of graduates joining the labor force, the report says. CAPMAS estimates the total labor force at 29.08 mn people, up 0.9% from the previous quarter and 2.6% y-o-y.

Khairat El Shater’s son and son-in-law arrested in Nasr City

The son and son-in-law of one-time Ikhwan honcho Khairat Al Shater were arrested in an apartment in Nasr City on charges of incitement against the state, Al Masry Al Youm reports.

On Your Way Out

The Modern Art section of Christie’s Dubai March auction will be led by artwork from the late “father of Egyptian modern art” Mahmoud Saïd. Saïd “represents a particular Alexandrian attitude towards painting that depicted a cosmopolitan Mediterranean community and eschewed the more overt nationalist imagery of its Cairene peers. The strangeness in his works continues to allure and mystify viewers to this day,” according to Doha’s Arab Museum of Modern Art. The Christie’s auction will include works from Saïd’s private family collections, include Assouan- îles et dunes, which will be offered alongside its preparatory sketch, and expected to sell for USD 250k-300k. If the price looks a bit steep, you will be interested to know that Christie’s sold Saïd’s The Whirling Dervishes, which had an estimate of USD 300k-400k, for a total of USD 2.55 mn in 2010. This was the most anyone has ever paid to purchase an artwork by an Egyptian artist from Christie’s.

The markets yesterday

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EGP / USD CBE market average: Buy 16.38 | Sell 16.51
EGP / USD at CIB: Buy 16.4 | Sell 16.5
EGP / USD at NBE: Buy 16.45 | Sell 16.5

EGX30 (Wednesday): 12,448.35 (-0.44%)
Turnover: EGP 861.1 mn (98% above the 90-day average)
EGX 30 year-to-date: +0.838%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session 0.4% down. The top performing constituents were Oriental Weavers, Domty, and Amer Group. Wednesday’s worst performing stocks included Global Telecom, Orascom Construction, and Juhayna. The market turnover was EGP 0.9 bn and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -12.0 mn
Regional: Net long | EGP +11.2 mn
Domestic: Net long | EGP +0.8 mn

Retail: 60.2% of total trades | 55.6% of buyers | 64.8% of sellers
Institutions: 39.8% of total trades | 44.4% of buyers | 35.2% of sellers

Foreign: 23.8% of total | 23.1% of buyers | 24.5% of sellers
Regional: 5.2% of total | 5.8% of buyers | 4.5% of sellers
Domestic: 71.0% of total | 71.1% of buyers | 71.0% of sellers

WTI: USD 53.11 (-0.17%)
Brent: USD 55.7 (-0.48%)
Natural Gas (Nymex, futures prices) USD 2.93 MMBtu, (+0.69%, March 2017 contract)
Gold: USD 1,233.10 / troy ounce (+0.63%) TASI: 7,073.69 (+0.58%) (YTD: -1.90%)
ADX: 4,596.69 (+0.53%) (YTD: +1.11%)
DFM: 3,645.01 (-0.21%) (YTD: +3.23%)
KSE Weighted Index: 428.95 (+1.15%) (YTD: +12.85%)
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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.

15-19 March (Sunday-Thursday): 2017 Automech Formula car expo, Cairo International Convention Center, Nasr City, Cairo.

18-19 March (Saturday-Sunday): Delegation of Japanese food industries companies visits Egypt.

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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