Monday, 20 February 2017

The EGP has strengthened to 15.78, but retailers say not to expect price cuts yet


What We’re Tracking Today

We’re below EGP 16 to the greenback: The EGP has strengthened to a three-month high with the central bank reporting that banks were buying greenbacks at an average rate of EGP 15.7576 per USD 1 yesterday. Bankers told Reuters the strengthening of the EGP owes in large part of a drop in demand for the greenback on the part of importers. “Importers have a pile up of goods. When the prices rose after the float, people’s purchasing power declined and sales in most [imported] goods slowed down and with it their demand for [USD] to import more goods slowed as well,” one banker told the newswire.

The ad we can’t get out of our heads this morning: What will they say about you, by Nike Middle East (runtime: 1:10). A must watch for girls and boys alike, says our resident nine-year-old as she eyes her skateboard.

The theme song we can’t get out of our heads this morning: WKRP in Cincinnati, babies. Which, looking back today, is shockingly well-written and brilliantly acted. Except for the fact that you watch two episodes one night a week ago and wake up at 3am today with the bloody song in your head. Explain that, please, God. There’s the 45-second version that ran over the opening credits — or the “full” version if you’re brave enough. We deny, separately and jointly, now and in perpetuity, any responsibility for the mental, emotional, physical or other consequences arising from your decision to listen to either clip.

On The Horizon

Foreign Minister Sameh Shoukry is heading to Washington on 25 February. It will be his first official visit to DC under the Trump administration, and Shoukry is expected to meet US Foreign Secretary Rex Tillerson for talks on terrorism, Syria, Yemen, Libya, and the Palestinian-Israeli conflict. We also expect the two to lay the groundwork for a state visit by President Abdel Fattah El Sisi. Meanwhile, Shoukry is in Tunisia today for a tripartite meeting on the Libyan crisis with his Tunisian and Algerian counterparts, according to Reuters.

Finance Minister Amr El Garhy will appear before the House of Representatives next week to discuss budget deficit projections, public debt, and presenting the IMF USD 12 bn loan agreement.

It may be necessary to get the House of Representatives to approve the USD 12 bn IMF extended fund facility before the arrival of the IMF delegation expected in early March. The delegation is due to access our progress on the reform package on which the funding is conditional before approving the disbursement of the second tranche of the facility.

Among the investor conferences on the horizon:

  • 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.

For all you who care about movie awards than a good night’s sleep before work, the Oscars will take place from about 3:30am through 7:00am CLT on Monday, 27 February. More on the Oscars website or at official broadcaster ABC’s microsite.

Enterprise+: Last Night’s Talk Shows

Most boring Sunday evening ever; Amr Adib’s Nobel Prize-worthy economic theory: If you happened to miss last night’s talk shows, we can tell you with the utmost certainty that you didn’t miss anything at all as the talking heads appear to be suffering from a case of the Sundays (we sympathize).

The most interesting topic of the night was an interview on the Investment Act on Al Hayah Al Youm with House Economics Committee member Mohamed Badrawi. He added little to the discussion, instead reminding us that the one-stop shop policy is continues in place, promising that permits will come out in no less than two months (watch, runtime: 5:52).

The episode also looked into electricity prices with the same lack of new insight. The most interesting part of an interview with Electricity Ministry spokesperson Ayman Hamza is watching Hamza squirm his way out of answering the direct question of whether new electricity prices would into effect at the start of the new fiscal year in July. He said that for at least the next five months they would not increase (watch, runtime: 2:30).

Still wincing after your massive summer bill? Hamza also spoke about newly-adopted payment methods for power bills, saying the ministry will allow installment payments (watch, runtime: 6:38).

Yahduth fi Masr’s Sherif Amer interviewed both candidates vying for leadership of the Press Syndicate. We, too, are more than slightly shocked that anyone — let alone two people — are vying for the job given how bad a year the syndicate had in 2016. The platform of Al Ahram managing editor Abdel Mohsen Salama appears to be improving wages for journalists, while incumbent Yehia Qalash said that he will lobby for legislation to protect the rights and freedoms of the syndicate. Qalash is on trial for harboring fugitive journalists at the Syndicate’s HQ last year.

Hona Al Assema’s Lamees Al Hadidi spent her episode speaking on the availability of Rh immunoglobulin injections in pharmacies. She interviewed Al Akhbar journalist Haitham Al Noweihy, who apparently broke the story that there were shortages (watch, runtime: 1:30:00).

And cue the drum rolls as Amr Adib reveals his secret policy recommendation to strengthen the EGP: People need to stop importing nuts. Adib urged traders to stop importing nuts and salted snacks for Ramadan to help bring the exchange rate to EGP 14 per greenback. We hope the Nobel Prize Committee takes notice (watch, runtime: 1:52).

Speed Round

Speed Round is presented in association with

EFSA chairman takes a stand against a stamp tax rate of 0.5%: Egyptian Financial Supervisory Authority (EFSA) chairman Sherif Samy reportedly opposes the imposition of a stamp tax of up to 0.5% on stock market transactions, according to Al Mal, which quotes Samy as saying the move could curb inflows into the EGX. This follows reports by the newspaper earlier this month citing Finance Ministry sources that the ministry is considering implementing a stamp tax of 0.4-0.5%, a rate higher than the 0.1% imposed in 2013 and scrapped the following year. Samy argues that since retail investors account for the majority of turnover on the EGX, a slight increase in the stamp tax could lead to a negative outlook for the market. He has brought up this point to Finance Ministry officials and is quoted as saying he’s also pushing the ministry to codify the delay in implementing a separate capital gains tax for another three years as mandated by the Supreme Investment Council, before the deadline of the original postponement ends in May. The Finance Ministry is looking to impose the stamp tax in part to make up the revenue shortfall that appeared after the capital gains tax was postponed.

The Central Bank of Egypt will be repaying USD 500 mn to the Saudi Fund for Development in June, a source told Al Borsa. The amounts were borrowed mid-2012 at an interest rate of 5%. A source said reports that Egypt is looking to extend to refinance the borrowing for the Saudi Fund are untrue and that Egypt will continue to honor its debt obligations normally, as has throughout recent years despite the FX crunch.

The tourism industry is cautiously (and from a very low base) returning to growth. That’s the take-home message from the AFP, which cites Tourism Federation chief Karim Mohsen as explaining that “there is an improvement, especially in cultural tourism in Cairo, Luxor and Aswan,” that saw arrival figures rise in October through January. Total arrivals were up 25% in December to 551,600 visitors, official figures show. Growth is being fueled by markets including China, Japan and the Ukraine, with China’s top public travel agency saying outbound volumes to Egypt are up 58% over 2015.

That’s why we’re noting that reps of 250 Ukrainian travel companies are mulling how to deliver 1 mn Ukrainian tourists to Egypt this year, more than double the 425,000 who arrived in 2016, and have met with Red Sea governor Ahmed Abdallah to discuss ways to promote Ukrainian tourism to Egypt, Egypt Independent reports. The governor’s office said Ukrainians are now the largest single demographic group visiting Sharm El Sheikh. Earlier this month, operators had been pushing for more incentives to be able to meet that target. The full recovery of the industry, however, will still hinge on Russia and the UK restarting flights.

Elsewhere, Tourism Minister Yehia Rashed has suspended the issuance of licenses for new tour companies and travel agencies for one year, saying the country currently does not need any new tour operators, Al Borsa reports.

GAFI boss denies he resigned: Mohamed Khodeir, Chairman of the General Authority for Investment (GAFI), has denied resigning, according to Ahram Gate. Earlier yesterday, Al Masry Al Youm had published news that Khodeir resigned as GAFI’s chairman, following the appointment of Sahar Nasr as Investment and International Cooperation Minister and that there were “efforts” to make him rescind his resignation.

House to vote on Natural Gas Act in March: The House of Representatives’ Energy Committee expects to complete reviewing the Natural Gas Act — which would largely deregulate the sector — this week and move it to the floor of the House for a vote in March, Al Borsa reports. The committee, which has been reviewing the bill since December following preliminary approval from the House general assembly, downplayed the “minor amendments” that they reportedly introduced, MP Hamada Ghallab said, without explaining further. Progress from a regulatory standpoint has been taking place, with the Oil Ministry beginning a draft of the executive regulations and EGAS setting a preliminary toll of USD 0.4 per mmBtu for private companies looking to use the national gas grid last month.

And that’s not all, as it seems there is light at the end of the tunnel that is the House for the automotive directive. The House of Representatives’ Industry Committee will set a date to vote on the Automotive Directive in the general assembly once the legislation is final. When will it be final? After one last round of talks with auto industry players next week, Al Borsa reports. Progress on the bill — which would provide manufacturing and export incentives along the value chain to promote the development of domestic industry — had been delayed by a lobbying war pitting auto assemblers against auto importer, with component manufacturers serving as wild cards. The importers faction, which includes local dealers for Volkswagen, Seat, Kia Motors, and Ford, has lobbied lobbying MPs to raise the minimum requirement for component manufacturing companies to benefit from the directive to 100% from 25% last month. In the last hearing on the bill in the committee, Volkswagen continued to press the advantage, telling MPs that incentives to manufacturers were still unfair and would ultimately drive importers from the market. Hyperbolize much, VW?

Global Telecom Holding receives offer of 1.3 mn shares under share buyback program, or about 2.5x the number of shares the company announced it would buy back on 16 January 2017, according to a regulatory filing (pdf). Pharos Holding is advising on the transaction.

Egypt has been ranked 41 out 45 in the US Chambers of Commerce’s International Intellectual Property Index,which measures a country’s respect for IP rights, scoring 9.38, far below the global median of 15.39 and a regional average of 13.73. Egypt scored high in membership in international institutions that call for strengthening IP frameworks (such as the World Trade Organization) and got good marks for making it easy to register IP. We ranked low for our high rate of piracy, gaps in copyright law and framework (particularly with regard to protection of content online), a lack of enforcement, and limited participation in international IP treaties, according to the report (pdf).

On a related note Egypt dropped to a rank of 144 on the Heritage Foundation’s Index of Economic Freedom. The Heritage Foundation ranks Egypt in the “mostly unfree” category, along economies including Pakistan, Burkina Faso, Argentina, China, and Russia. Heritage, the Atlantic reminds us, is a once-respected conservative think tank helped created the policy frameworks for both Ronald Reagan’s Star Wars strategic missile defense (boo) and Bill Clinton’s welfare problem (not bad), but which has since hit the skids.

MOVES- Andreas Hergenroether was appointed CEO of the German Arab Chamber of Industry and Commerce (AHK). Hergenroether was previously the executive director of the German Trade Office in Taipei.

**Earnings watch: Abu Dhabi Islamic Bank Egypt (ADIB) reported an 82% y-o-y rise in FY2016 net profit in to EGP 397.038 mn compared with the same period a year ago, the bank said in a statement. Meanwhile, Alexandria Medical Services reported a net profit of EGP 17.035 mn in FY2016, according to a regulatory filing.

Kraft Heinz has withdrawn its USD 143 bn offer for Unilever just two days after it confirmed it was interested in the transaction. Kraft Heinz’s board — which includes Warren Buffett among its members — voted to walk away as the “alternative would have been to pursue a public and possibly costly fight against Unilever, a bulwark of British and Dutch business” after Unilever made it clear it was not interested in talks, the New York Times notes.

Picking up where we left off with our Weekend Edition: You might want to leave your laptop and smartphone at home if you are traveling to Amreeka, privacy advocates now recommend, according to the Associated Press. US Customs and Border Protection agents are searching the phones and other digital devices of international travelers at border checkpoints in airports. The practice has been common since before President Donald Trump took office, but the American Civil Liberties Union and the Electronic Frontier Foundation both report they have noticed “an uptick in complaints about searches of digital devices by border agents,” particularly since last month. The US government says “nothing has changed” and that the “perceived shift can be attributed to a jump in the number of electronic devices that people are carrying with them and shifting tactics as the agency adjusts to the amount and types of information that can be stored on today’s devices.” A word to the wise: Non-US citizens who refuse to allow their devices to be searched can be refused entry to the country, and citizens and green card holders can be detained (and their devices held for longer) under a rule that compels anyone who is asked to help a CBP agent with the agent’s investigation. Oh, and claiming privileged / confidential information — as an MD, lawyer or journalist — will get you nowhere. Canadians, don’t be so smug: The CBC reports that CBSA can do the same thing.

Egypt in the News

On a very quiet morning for Egypt in the international press, the biggest story of the morning is Haaretz’s suggestion, since picked up by the wires, that “Prime Minister Benjamin Netanyahu met secretly a year ago with the leaders of Egypt and Jordan in a failed attempt by the Obama administration to convene a wider regional summit on Israeli-Palestinian peace.” (More in Diplomacy and Foreign Trade, below.)

The international press had been focusing since the weekend on Egypt’s place in the geopolitical machinations of Trump’s America and Putin’s Russia. The Financial Times takes the view that Trump’s stated wider regional agreement is to create some form of regional alliance made up mostly of Sunni states and Israel to counter Iranian incursions in the region. That would take advantage the warming (behind-closed-doors) of Arab-Israeli ties, according to New York Times. Russia’s state-owned Sputnik goes so far as to call this a NATO-like military alliance. Central to that would be a Palestinian-Israeli accord, with talk that this may include a statelet in parts of Sinai still being discussed in the press. The Financial Times thinks that a 15-year-old Arab League proposal would be the best chance for Trump to achieve this, but the Jerusalem Post sees an aversion to normalizing relations with Israel in the Egyptian street as an obstacle to this alliance. As for Russia, Egypt is a crucial element in Putin’s goal to basically bring the Middle East back to the old Soviet sphere of influence, writes Mathew Brodner for Defense News, citing Egypt’s over USD 1 bn arms purchases from Russia.

Civilians are getting caught in the crossfire in the fight against Daesh affiliates in Northern Sinai, Heba Saleh writes for the Financial Times. “You can expect anything here and nothing is guaranteed,” an Arish resident tells Saleh. “A stray bullet or shell can hit anyone and an arrest can happen anytime. This makes people fearful so they reduce their movements. There are civilian victims every day.” Mokhtar Awad, research fellow at the programme on extremism at George Washington University, says the Egyptian Army has scored many successes, but it is hard to assess how close they are to suppressing the insurgency. He says “there has to be trust between the people and the police for the success of a counterinsurgency strategy.”

Egypt has not accepted the offer of technical assistance from the European Commission to address the spread of the silver-cheeked toadfish in the Mediterranean, Malta Independent says. The fish, which is potentially deadly if consumed, is believed to have entered the Mediterranean from the Red Sea through the Suez Canal. The Maltese paper is concerned because the tetrodotoxin-producing fish “may be consumed if caught by amateur fishermen.” The European Parliament’s Environment Commissioner Karmenu Vella said: “the Commission is in regular contact with the Egyptian authorities in the framework of the EU-Egypt dialogue governed by the EU-Egypt Association Agreement and has raised its concerns regarding the potential for Lessepsian migration of invasive alien species with them on several occasions.”

Other stories on Egypt worth briefly noting on a morning in which Al Arabiya is running a photo profile of Magda Malek, Egyptian first female pilot of EgyptAir’s Boeing 777-333 airliner:

  • Dubai-based e-commerce platform Cary is looking to expand in Egypt in the medium term, CPI Finance reports.
  • Arab Times editor-in-chief Ahmed Al-Jarallah pens an op-ed on how the Ikhwan has been taking advantage of parliamentary politics in the GCC and Kuwait to ferment discontent in the region degrade traditionally strong ties between Egypt and Saudi Arabia.
  • says Egypt can be proud of their efforts at the CAF Africa Cup of Nations Gabon 2017 in a piece that mentions Egypt’s first ever AFCON title in 1957 and remembers Egypt’s player and one-time top goal scorer Ad-Diba.
  • An Egyptian LGBTQ rights Facebook group is challenging many stereotypes and social norms, Stepfeed’s Nadine Mazloum says in a feature about ‘No Hate Egypt.’
  • Italian archaeologists think they might be on the verge of discovering the long-lost tomb of Ancient Egypt’s Queen Nefertiti under Luxor’s Valley of the Kings, the Daily Beast says.
  • Egyptian human rights activists are growing more vocal in their criticisms of the recently-enacted NGO law after the state forced the torture-victim rehab facility Al Nadeem Center shut earlier this month, Al Jazeera’s English website says.

On Deadline

Knocks and kudos for new cabinet ministers: AMAY columnists Amr El Shobaki and Said Al Sonny vent their spleens over Education Minister Tarek Shawky’s comments about limiting free education. Elsewhere, Hazem Monir writes for El Watan that he is impressed with Supply Minister Ali El Moselhy’s comments in favor of commodity subsidies.

Worth Reading

Greeks are getting in touch with their inner Egyptians: The informal economy in Greece is growing as businesses that can’t afford to pay newly imposed taxes deregister in Greece to work in the parallel economy, often after registering abroad in lower-tax environments, Liz Alderman writes for The New York Times. Ring a bell? “Few problems are more ingrained, or harder to combat, than the shadow economy, which appears to be growing again as new austerity measures compel once law-abiding Greeks to go off the books,” writes Alderman. It’s not bad time to revisit the Financial Times’ “Egypt: World Bank sees widening of ‘shadow’ economy” from back in 2014, which makes the point that two of every five jobs in Egypt are in the informal economy.

Diplomacy + Foreign Trade

El Sisi, Kerry present Israel with a peace initiative in secret last year: President Abdel Fattah El Sisi met with then-US Secretary of State John Kerry, Jordan’s King Abdullah, and Israeli Prime Minister Benjamin Netanyahu a year ago to present him with “plan for a regional peace initiative including recognition of Israel as a Jewish state and a renewal of talks with the Palestinians with the support of the Arab countries,” sources told Haaretz. Netanyahu did not accept the proposal presented in Aqaba, which included a two-state solution, saying he would have difficulty getting it approved by his governing coalition. The story is receiving wide international coverage including from the New York Times. Ittihadiya issued a statement in response to the reports reaffirming Egypt’s commitment to a two-state solution based on the 1967 borders, and said it is exploring all avenues to reach a long-lasting solution to the Israeli-Palestinian crisis, Al Shorouk reports.

Reaching a solution to the Israeli-Palestinian conflict would contribute to reducing terror attacks in the region and is among Egypt’s top priorities, President Abdel Fattah El Sisi told delegates attending meeting in Cairo of the Conference of Presidents of Major American Jewish Organizations, the Times of Israel reports.

Trade and Industry Minister Tarek Kabil is reportedly in Paris today for the second day of a two-day visit to France, Youm7 reports. Kabil is due to meet French ministers and parliamentarians.

Prime Minister Sherif Ismail met with Toyota’s president John Karoubi and other members of a Japanese business delegation that was in Cairo for a two-day visit, Al Masry Al Youm reports. Ismail and Karoubi discussed Toyota’s ongoing projects in the renewable energy sector in Egypt, including a 1300 MW steam-electric power station in Upper Egypt, Ahram Gate reports. Karoubi said that his company is looking forward to increasing cooperation with Egypt in the renewable energy, petrochemical, and natural gas sectors. The delegation made no further mention of the fate of Japanese investments in Egypt, following Japanese ambassador to Egypt Takehiro Kagawa’s statements that Japan’s investments, which currently amount to USD 100 mn per annum, are at risk of shrinking due to the devaluation of the EGP since the November float, which we took note of yesterday. (We’re still not entirely certain how a cheap EGP — which makes USD go further for investors — would translate into a lower level of investment.)

Egypt has not taken advantage of some USD 8.6 bn of facilitated loans India has offered to African countries over the past decade, despite the loans carrying interest rates of 1.5%, India’s Foreign Ministry Undersecretary Ajit Gupta tells Al Shorouk. Gupta said he does not have information as to why Egypt did not benefit from these loans.


Feed-in tariff to remain unchanged, Electricity Ministry to hold talks with investors to discuss funding concerns

The Electricity Ministry will not be increasing the feed-in tariff for renewable energy projects in the second phase of the program, as solar energy companies had been hoping, officials tell Al Mal. Ministry officials are reportedly meeting with 50 of phase two’s investors today to discuss the obstacles they face with project financing, after they had urged the ministry to amend the tariff to account for increases in construction costs following the EGP float.

Basic Materials + Commodities

Three new Louis Dreyfus grain silos operate within days

Three 50k-tonnes-capacity grain silos built by Louis Dreyfus Company at Abu Qir Port in Alexandria will begin operating this week, an unnamed source tells Al Mal. This comes as authorities want to rechannel grain ships to Abu Qir, which is equipped with a new grain pier, as a result of congestion at Dekheila Port where one third of grain shipments to Egypt arrive.

Health + Education

United Pharma IV Solutions receives 3 acquisition offers from Saudi, local investors

United Pharma IV Solutions has received three acquisition offers ranging between EGP 400 mn and 600 mn from Saudi and local investors, Al Borsa reports. According to chairman Abdallah Mahfouz, United Pharma is not looking to sell the company in its entirety, and is leaning towards expanding its shareholder base, while still maintaining the majority of shares.

New public education system in the works, minister says

A new and improved public education system that would replace thanawiya ‘amma exams with a standardized SAT-style test for high school students could be coming into effect by the start of the 2018 school year, Education Minister Tarek Shawky said, according to Al Masry Al Youm. The overhaul aims to tackle the key issues facing the public system — including teacher salaries and the need for increasingly expensive private lessons — and break from rote learning. The minister also hopes to bring more technology into the learning process, he said, and is considering introducing online learning modules to reduce classroom crowding in public schools, the newspaper says. Shawky discussed his plans with Prime Minister Sherif Ismail at a meeting on Sunday at which the conversation also extended to finding solutions to the issue of rising private and international school tuition fees, Al Mal says.

BBC takes a look into Egypt’s meds shortages

The BBC’s Ed Butler produced a BBC World Service audio report  (runtime 26:46) on the medications shortage in Egypt asking how long can Egyptians cope with it. The report takes the view that the EGP float last November has exacerbated the shortages, nearly doubling the price of meds. Butler appears to take a critical view on the government capping prices of meds, running big pharma’s argument that this is the primary driver behind shortages in the country.

Real Estate + Housing

Debate wages over government’s newfound preference for Egyptian companies in new capital

A debate is currently being waged about the private sector’s role in the New Administrative Capital’s development, as the government turns to local developers over foreign companies. A lack of transparency in tendering land to developers on the New Administrative Capital is driving away foreign private sector companies interested in taking part, writes Hossam Abougabal for Middle East Business Intelligence (MEED). The market was not informed on why the Administrative Capital for Urban Development Company — the master developer of the new capital — abandoned agreements with China State Construction Engineering Corporation and the UAE’s Eagle Hills, which is contributing to a perception among foreign companies that the tendering process is a black box, a move that is wasting an opportunity to attract foreign investment. the Egyptian Federation for Construction and Building Contractors (EFCBC) sees it differently. The move represents a chance for local businesses to participate in lucrative construction contracts in a national project and all the benefits that entails (something local contractors have long called for) EFCBC member Daker Abdullah tells DNE.

Telecoms + ICT

Cars and spare parts prices will see a decline in around two months

Cars and spare parts prices will see a decline in around two months on the back of a reduced USD customs exchange rate to EGP 16, Confederation of Egyptian European Business Associations (CEEBO) head Alaa Ezz tells Al Masry Al Youm. He expects prices to fall 11%, proportionate to the drop in the exchange rate.

Automotive + Transportation

The politics behind transportation reform in Egypt

While transportation is a popular “apolitical” avenue for international development “the impact is negligible in the end…development is done in a piecemeal and fractured way,”the head of Cairobserver Mohamed El Shahed tells CityLab’s Miriam Berger. The emphasis is on building big, extravagant new cities in the desert and wide roads and highways—all of which bring the government a façade of prestige without actually benefiting average people. Big investors backing these projects with loans keep Egypt entrenched in a “neoliberal network of prioritizing profits over real reform,” writes Berger

Transport Minister looks to expand Cairo Metro Line 2

Newly-appointed Transport Minister Hisham Arafat is looking into expanding Cairo Metro Line 2 to reach Qalyub, and has requested that the railway authority renew its feasibility studies on the extension, Al Ahram reports. The move is part of a policy review he is taking, which includes plans to expand cargo transport by railway or by maritime transport, Al Mal reports.

Banking + Finance

Banks begin reducing rates on high-yield CDs

A number of banks have scrapped their high-yield certificates of deposit and began repricing them at rates 100-300bps lower than the ones offered in November after the EGP flotation, Al Borsa reported. Only National Bank of Egypt and Banque Misr have kept their products’ interest rates at 20%, with sources from both banks denying intentions to reduce rates. CIB and HSBC have repriced their own CDs, reducing their interest rates by 100-175 bps.

Other Business News of Note

Retailers to respond to EGP appreciation with promotions; price reductions await

Retailers will respond to the appreciation of the EGP with more promotions and discounts rather than by reducing prices on the shelves, Al Borsa says. Spinneys hypermarket chain CEO Mohanad Adly says suppliers are rolling out “special offers” as a prelude to more permanent price reductions following calls to reduce prices at the same pace they were increased at in response to the EGP devaluation. A dairy producer says the price reductions will be proportional to the appreciation of the EGP as, according to him, most companies priced their production at an exchange rate of EGP 17.5 per USD 1 in order to maintain their market shares. Separately, a government source noted that the Supply Ministry is considering increasing the allotment of goods available to each ration card holder.

Le Marché to be held in April

Furniture fair Le Marché will be held in April, after the Interior Ministry ordered that it be postponed in December, when it was originally set to take place, Al Mal reports. Tarek Nour Communications, the event’s organizer, obtained the necessary final approvals from the Egypt Expo & Convention Authority for April, Tarek Nour tells the newspaper.

Egypt Politics + Economics

Alex court sentences 13 to two years in prison for protesting Saudi island-swap agreement

An Alexandria court sentenced 13 people to two years in prison on Sunday for staging an unsanctioned rally to protest the Tiran and Sanafir sovereignty handover agreement with Saudi Arabia last year, Ahram Online reports.

National Security

Daesh airs video allegedly showing church bomber’s last message

Daesh has aired a video that allegedly shows a final message of terrorist behind last year’s bombing of the Church of St. Peter and St. Paul, Al Masry Al Youm reports. As we avoid serving as a platform for racist propaganda, hate-mongering propaganda, we will not reveal any details other than Reuters has picked up the story.

On Your Way Out

Did you know that Egypt is home to a game show that has the largest prize purse of any game show in the Middle East? Al Abakera (The Geniuses) is a fierce quiz show / reality edutainment competition between high schools competing to claim the winning title, but win or lose, every time a student answers a question correctly the entire school system wins money. That cash adds up, and participants last season won more than EGP 35 mn for their schools courtesy of the National Bank of Egypt. The second season launched this weekend and runs every Thursday and Saturday at 7pm on Al Kahera Wal Nas. Students from 32 schools from all governorates are going head-to-head — with even more prize money at stake. Go make your popcorn, folks, and settle in. (Watch the promo, runtime: 1:12)

Egypt is launching a new initiative to test and treat recovering drug addicts from Hepatitis C as part of a larger drive to eradicate the disease from the country, Social Solidarity Minister Ghada Wali announced on Sunday, according to Ahram Online. Waly also announced that women are the primary breadwinners for at least a quarter of Egyptian families, Ahram Gate reports.

The markets yesterday

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EGP / USD CBE market average: Buy 15.7576 | Sell 15.8606
EGP / USD at CIB: Buy 15.75 | Sell 15.85
EGP / USD at NBE: Buy 15.75 | Sell 15.8

EGX30 (Sunday): 12,549 (-0.8%)
Turnover: EGP 716.4 mn
EGX 30 year-to-date: +1.7%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session 0.8% down. CIB, the index heaviest constituent fell 1.9%. The EGX30’s top performing constituents were: Arab Cotton Ginning up 5.6%, Cairo Oils and Soap up 4.2%, and Global Telecom up 4.1%. Yesterday’s worst performing stocks included Domty down 6.6%, Juhayna down 5.4%, and ACC down 4.7%. The market turnover was EGP 716.4 million and local investors were the sole net buyers.

Foreigners: Net Short | EGP -2,783.5 mn
Regional: Net Short | EGP -448.7 mn
Domestic: Net Long | EGP +3,232.2 mn

Retail: 16.6% of total trades | 11.6% of buyers | 21.5% of sellers
Institutions: 83.4% of total trades | 88.4% of buyers | 78.5% of sellers

Foreign: 30.1% of total | 1.5% of buyers | 58.7% of sellers
Regional: 5.6% of total | 1.0% of buyers | 10.2% of sellers
Domestic: 64.3% of total | 97.5% of buyers | 31.1% of sellers

WTI: USD 53.40 (+0.07%)
Brent: USD 55.81 (+0.29%)
Natural Gas (Nymex, futures prices) USD 2.83 MMBtu, (-0.70%, March 2017 contract)
Gold: USD 1,239.10 / troy ounce (-0.20%)

TASI: 7,1420 (+0.1%) (YTD: -0.97%)
ADX: 4,620.8 (-0.5%) (YTD: +1.64%)
DFM: 3,645.90 (-0.1%) (YTD: +3.26%)
KSE Weighted Index: 426.8 (-0.5%) (YTD: +12.28%)
QE: 10,197.0 (+0.9%) (YTD: +4.60%)
MSM: 5,858.41 (+0.26%) (YTD: +1.31%)
BB: 1,321.3 (-0.2%) (YTD: +8.26%)

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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.

29-31 March (Wednesday-Friday): Balanced Development of Siwa Oasis International Tourism Conference, Siwa Oasis.

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.

08-09 May (Monday-Tuesday): 3rd Egypt CSR Forum, Intercontinental Citystars Hotel, Cairo.

16 May (Tuesday): Official expiry date for the decision to suspend capital gains taxes on stock market transactions.

22-23 May (Monday-Tuesday): North Africa Mobile Network Optimisation Conference, Cairo.

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.

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