Wednesday, 22 February 2017

Mohamed El-Erian: Is the EGP is in “price discovery” mode?

TL;DR

What We’re Tracking Today

Mohamed El-Erian is not buying the concerns raised on the EGP potentially “correcting” in the piece by the Financial Times we led with yesterday. “This sharp appreciation of 14% is leading some — including the financial institution quoted in the article — to warn of a subsequent depreciation. But do such predictions take into account what, by most measures, was a large initial overshoot back in November?” he asks in a Facebook post. “Rather than point to the high probability of renewed currency depreciation,” he explains, “what may well be taking place is a process of price discovery in which the Pound is iterating closer to its ‘equilibrium level.’” El-Erian is still unhappy with the fixation on the currency. “It is also important to stress that the currency is neither the cause of, nor the unique solution to Egypt’s economic challenges.” What matters most, he says, “is a policy reform approach that unleashes the country’s considerable growth potential and improves the focus on social sectors, including protecting the most vulnerable segments of society.” Hear, hear, sir.

…That said, the end of the “honeymoon period” for the EGP might be nigh, Ahmed Namatalla and Ahmed Feteha write for Bloomberg. They say Egypt could be burdened by its own success as “foreign investors, who had been almost the sole buyers at Egypt’s local treasury bill auctions earlier this month, were absent for two straight sales.” While some fund managers remain wary of current treasury yields and the EGP’s latest surge, Capital Economics’ Jason Tuvey expects the EGP to appreciate to EGP 14 per USD 1. He says “yields on treasury bills are very attractive, especially since there does seem to be a shift within the government toward more orthodox policy making.” Still, with mostly Egyptian banks buying treasuries on Sunday and Thursday, yields climbed by more than 100 bps.

The EGP’s strengthening also makes a brief appearance in the graph-heavy Daily Shot newsletter, which was recently acquired by the Wall Street Journal.

What We’re Tracking This Week

Egypt in Rome: A thousand images, as well as audio recordings and footage of traditional life in Upper Egypt, will be on display at the Academia D’Egitto’s exhibition running this Thursday and until mid-March in Rome.

Iraqi musician and oud player Naseer Shamma will be designated a UNESCO “artist for peace” on Thursday in Paris as by UNESCO Director-General Irina Bokova, UNESCO said in a statement.

On The Horizon

German Chancellor Angela Merkel’s visit to Egypt now appears confirmed for 2-3 March, Ahram Online reports.

Foreign Minister Sameh Shoukry is heading to Washington on Saturday for a chat with US Secretary of State Rex Tillerson and to lay the groundwork for a visit to the White House by President Abdel Fattah El Sisi.

This, again? On the same day at home, a “national dialogue” session on the Daba’a nuclear power plant will bring state officials and executives from Russia’s Rosatom together with local groups and members of the House of Representatives in Marsa Matrouh, Al Ahram reports. The Electricity Ministry has reportedly been in and out of closed-door meetings with the state’s Nuclear Power Plants Authority and Rosatom officials to discuss the terms of the contracts for the plant and finalize the paperwork by March, Al Shorouk says.

A busy week for Amr El Garhy: The finance minister will appear before the House next week to present the USD 12 bn IMF loan agreement (and possibly to talk budget projections) and will also speak at an AmCham Egypt gathering on Egypt’s financial reform agenda on Sunday, 26 February, Al Masry Al Youm reports. Look for news next week of the Finance Ministry’s early outline of the FY2017-18 budget, too.

Unnamed officials tell Al Shorouk that El Garhy’s ministry has instructed other state entities to use a temporary exchange rate of EGP 13-15 per greenback in their submissions for next year’s budget until a final projection is calculated in March.

Enterprise+: Last Night’s Talk Shows

Egypt, you have outdone yourself with this Messi trip. And not in a good way. To say the red carpet was rolled out for Barcelona superstar Lionel Messi’s welcome (organized by the ever-dignified folks at ONTV as part of the footballer’s hepatitis C “tour ‘n cure” ambassadorship) would be an understatement of epic proportions.

Celebrities and heads of state get the red-carpet treatment, but what took place last nightwas more akin to a rain dance offered in loving worship of a deity. After getting a tour of the Pyramids by none other than Egypt’s informal Antiquities Minister Zahi Hawass, the media-shy Messi was treated (to his own shock) to a fete at the Mena House Hotel that made Queen Elizabeth’s coronation look like your five-year old’s birthday party at Pizza Hut.

The gala was attended by seven cabinet ministers, including Finance Minister Amr ElGarhy (watch, runtime: 0:41 — caution, the amateur footage will make your head spin if the gala itself doesn’t.)

There to interview Messi was Amr Adib, dressed as if he was preparing to get on bendedknee and propose. Messi, who arrived in the longest motorcade in history (watch, runtime: 3:34), looked confused by all the attention. It may have been Adib’s voice — which literally made one of our writer’s cats lose its mind. Still, Messi had enough presence of mind to plug the Tour N’ Cure hepatitis C medical tourism program launched by Prime Pharma and spoke highly of the sites and people he met on his very brief trip here (watch, runtime: 2:17).

Having someone of Messi’s global fame visit Egypt to help give a boost to our tourismindustry is a great thing. But what message does it send when we take it overboard like this? Messi will not cure hep C, save tourism single handedly, or even prompt Adib to leave his wife.

Back to in the (relative) oasis of sanity that is Hona Al Assema: Host Lamees Al Hadidi discussed obstacles to exporting cotton with Hammad Abdallah, the head of the textiles division at the Engineers Syndicate, who implied that the government seemed disinterested in helping aid the struggling textile industry, which he says has huge export potential (watch, runtime: 18:36).

Yahduth fi Masr’s Sherif Amer interviewed Abla Abdel Latif, who is still the head of President Abdel Fattah El Sisi’s Economic Development Council. The two spoke about an initiative subbed “Your Job Near Your Home” initiative, which would develop cottage industries and SMEs in rural villages. Abdel Latif said that the initiative will ultimately help integrate regional SMEs into the supply chains of larger businesses closer to major population centers.

Cabinet spokesperson Ashraf Sultan spoke on Prime Minister Sherif Ismail’s meeting withthe deputy speaker of Germany’s Bundestag on Al Hayah Al Youm (more in Diplomacy + Foreign Policy). German MPs expressed interest in seeing more German companies set up shop here (watch, runtime: 5:31).

Federation of Egyptian Chambers of Commerce member Alaa Ezz told host Lobna Assal in a phone interview that the federation has requested that the Finance Ministry set custom tariff exchange rates once every week, instead of every second week (watch, runtime: 7:19).

Speed Round

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Don’t hold your breath: Russia needs more security inspections at the Cairo International Airport before the Kremlin will allow direct flights to Egypt to resume, Sputnik reports. “It is obvious that some more time is needed to address concerns voiced during the last visit. As soon as we receive such invitation, we would send a group of experts again. We hope that it would be if not the last, but one of the final inspections," Russian Transport Minister Maxim Sokolov said. Suggestions that Russian flights would be returning on 23 February was more wishful thinking on the media’s part than anything to do with conditions on the ground, which is that Egypt still has some technical requirements to fulfill, Airport Holding Company board member Elhamy El Zayyat tells Al Mal. For once, those suggestions weren’t advanced by El Sahafa Masriya, but rather by the Russian press.

Bankers acknowledge CBE, Investors Associations agreement on settling pre-float LCs: Senior banking sector officials appeared to confirm to Reuters that the CBE has indeed reached the agreement which we noted yesterday with the Union of Egyptian Investors Associations (UEIA) on settling LC debt spikes incurred following the EGP float. Under the agreement, the CBE would cover currency differences of USD 500 mn to banks on behalf of 570 firms whose debts do not exceed USD 5 mn each," said the chairman of one of Egypt’s state-owned banks who attended Monday’s meeting with the CBE and the UEIA. In return, the firms will repay the debt in the local currency at 12% interest over two years, the source acknowledged.

Auerbach Grayson & Company has announced a partnership with Arqaam Capital to provide its US institutional clients with investment opportunities in Saudi Arabia, Oman, Kuwait, UAE, Qatar, Bahrain as well as South Africa. Arqaam Capital will provide Auerbach Grayson’s clients with “bespoke research and seamless trade execution across a wide range of sectors and listed companies.” David Grayson, CEO and co-founder of Auerbach Grayson, says the partnership will ensure his firm is “able to offer a deeper level of coverage and greater accessibility to investment opportunities than any broker within the Middle East.” Beltone Financial owns a 60% stake in Auerbach Grayson.

Hating on the proposed 0.4-0.5% stamp tax on EGX transactions: First, Egyptian Financial Supervisory Authority (EFSA) Chairman Sherif Samy argued against the tax. Now, the members of the Securities Division at the Federation of Egyptian Chambers of Commerce have met with EGX Chief Mohamed Omran and members of the Egyptian Capital Markets Association to “discuss alternatives.” Members of the Securities Division said on Tuesday they were conducting a study, at Finance Minister Amr El Garhy’s request, that will propose a stamp tax rate no higher than the 0.1% that was temporarily introduced in 2013, Al Borsa says.

Brokerage houses are also reportedly lobbying to have T+0 transactions exempted from the duty. The stamp tax in part is meant in part to make up for the revenue shortfall caused by yet another delay in imposing a capital gains tax. The Finance Ministry has reportedly been in negotiations with the EFSA over the stamp tax rate — an element of the reform package agreed on with the IMF — since early February.

Nasr bringing home first tranche of World Bank loan, promises fast action on policy front: Egypt will be receiving the first USD 125 mn tranche of an USD 500 mn Upper Egypt development loan from the World Bank “within days,” Investment and International Cooperation Minister Sahar Nasr said in a Tuesday press conference.

Nasr looks like she’s keeping a busy schedule, trying to wrap up discussions with all the parties involved in the Investment Act to expedite its passage through the House general assembly, Al Mal says. The minister announced that GAFI has started drafting the Investment Act’s executive regulations and should be done “within a few short weeks,” (hopefully) in time for the vote on the bill. Nasr has been in and out of meetings with government officials including Prime Minister Sherif Ismail, House Speaker Ali Abdel Aal, MPs from the House Economics Committee, Egyptian Financial Supervisory Chairman Sherif Samy, and officials from the Justice Ministry — trying to finalize talks on various investment-related legislations, including the new Leasing Act and the one-stop-policy, which she promised would be ready within 24 hours.

MNOs, TE still in talks on infrastructure sharing ahead of April 4G rollout: Mobile network operators (MNOs) Vodafone Egypt, Orange Egypt and Etisalat have offered to give state-owned Telecom Egypt access to their networks in phases under a long-awaited infrastructure sharing agreement, Al Borsa reports. Meanwhile, TE chief Tamer Gadallah says the teleco is pressing forward with its preparations for rolling out 4G service, the newspaper adds. The CIT Ministry’s National Telecommunications Regulatory Authority is expected turn over 4G spectra to the MNOs in April.

Is the Education Ministry looking to cap tuition increases at int’l schools? The Education Ministry is considering ways of prompting international and private language schools to lower their tuition fees, Minister Tarek Shawki said at a conference, Al Borsa reports, raising the prospect of tuition caps and other forms of direct interference in pricing. International schools had been hoping to convince the new minister (a former dean at the American University in Cairo) to soften the hard line taken by his predecessor, but yesterday’s statement took it further: Former minister El Hilali El Sherbini said earlier this month that schools must not raise tuition fees without prior approval from the ministry, but had never spoken of caps; that rhetoric had prompted some schools to argue that as private businesses, they should be regulated by the Investment and International Cooperation Ministry. Shawki also said yesterday that he is committed to the principle of universal free access to education and that the ministry isn’t backing away from building public-private partnership schools. Relations between the ministry and private schools have been tense since Shawki’s predecessor placed the International School of Choueifat and the American International School of Cairo under administrative and financial supervision last year.

Egypt is building closer ties with Hamas to help secure Sinai, Lin Noueihed and Nidal al-Mughrabi write for Reuters. Egypt has been at odds with Hamas, but it has recently “eased restrictions, allowing in trucks laden with food and other supplies, and providing relief from an Israeli blockade that has restricted the flow of goods into the coastal territory.” The relaxation of these restrictions “builds on what Egyptian and Palestinian sources say are efforts by Hamas to prevent the movement of militants in and out of Sinai.” An Egyptian security source says "we want cooperation in controlling the borders and tunnels, the handover of perpetrators of armed attacks and a boycott of the Muslim Brotherhood. They want the crossing to be opened and more trade… This has actually begun, but in a partial way. We hope it will continue."

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The Macro Picture

There’s never been a better time to make your country or company’s investment case:“By seemingly voting against trade deficits, immigration, low-quality jobs and ‘low-flation,’ western electorates may have unleashed a tectonic policy shift from globalism to national revivalism,” writes the Financial Times. The result? “For EM investors there is an upside scenario to this shift. It is one marked by a move from a so-called ‘risk-on/-off’ market dominated by ‘beta’ — or sensitivity to universal factors like the amount of quantitative easing or the price of oil — to ‘alpha,’ in which the idiosyncratic performance of individual economies and government policies carry more weight in investment decisions.” Read: There is a silver lining for emerging markets.

Image of the Day

Finding women in science / technology / politics should not be this hard: DDB Dubai has worked with Japanese illustrator duo IC4Design on a campaign for UN Women Egypt to highlight the low representation of women in the workforce, Digital Arts reported. They ended up creating three print ads drawing on Where’s Wally (Waldo, if you’re on the other side of the Atlantic). The campaign was called Finding Her and, according to It’s Nice That, focuses on “three particular up-and-coming industries in Egypt: technology, politics and science, showing a multi-storey cross-section of a space station, a parliamentary building and a research facility. Each image is adorned with a banner stating the campaign’s message: ‘Finding women in [technology/politics/science] shouldn’t be this hard. Let’s work together for equal representation in the workplace.’” The campaign reportedly ran in several magazines across Egypt.

Egyptian women’s relatively low representation in the workforce reflects in part not just a lack of economic opportunities, but the fact that almost half of Egyptian men prefer women not working. What’s more, 12% of women who are currently employed say they would rather not, according to a Cabinet Information Center poll, Al Shorouk reports. The same poll found that 57% of men and women in Egypt believe that the country’s laws foster gender equality.

Only a third of men and around 15% of women polled believe that Egyptian women are fully able to exercise their legal right to equal treatment.

Egypt in the News

The Associated Press’ coverage of Egypt and Jordan’s commitment to a two-statesolution and Palestinian statehood tops international headlines on Egypt this morning, followed by fawning over the fact that Messi showed up in Omm El Donia and did something over by the Pyramids..

Rise of Sebastian Gorka, a key Trump advisor who loves El Sisi: The Washington Post profiles Sebastian Gorka and his rise as one of Trump’s key advisors. Gorka has been a driving force behind a possible Trump decision to designate the Ikhwan as a terrorist organization — and has been instrumental in pushing for Trump towards forming an alliance with a shortlist of Muslim countries including Egypt, Jordan and the UAE that he describes as “secular” or willing to separate Islam from the running of the state. Together, they should fight the jihadist religious ideology in the same manner that America fought to discredit communism during the Cold War. Gorka has described President Abdel Fattah El Sisi as “enlightened” and a “reformer” for his part in quelling the Ikhwan.

Daesh in Sinai’s Libya connection: The Jerusalem Post is running an excellent spotlight by Al Masry Al Youm released earlier this month on the weapons trail from Gaddafi’s stockpiles of weapons in Libya to Sinai which is fueling Daesh’s operations there. AMAY’s reporters had attempted to categorize the advanced weapons — including Grad missiles (of the type recently launched at Eilat), anti-tank rocket propelled grenades, air defense Strela missiles, and DShK Russian machine heavy guns — in addition to tracing the many smuggling routes. Their report concludes that by the time President El Sisi took charge in 2014, the situation had gone so out of control that Daesh had established entrenched routes in the peninsula.

The BBC World Service’s Ed Butler’s most recent audio report from his trip to Egypt is one about the country’s dependency on food imports for BBC’s Business Daily. He examines food shortage issues and, of course, has some koshari from Abu Tarek, which he calls “Egypt’s fish and chips.” Butler also hears from local hydroponics producers as well as food security expert Kimberly Flowers (who runs the Global Food Security Project at the Center for Strategic and International Studies) about the challenges facing countries like Egypt (runtime 17:42).

Sunni-Shia divide underpins connection between Salafists, Gov’t: The National Interest is running a feature on the extent the Sunni-Shia divide has taken root in Egypt — and how it represents a shared agenda between Egypt’s Salafists and the state. The regional schism between the two factions, which intensified following the Arab Spring, has breathed new life to anti-Shia sentiments from within Al Azhar (which openly promotes peaceful interfaith dialogue with Christians and Jews) and Salafists, Geneive Abdo writes. These believe jive perfectly with the geopolitical considerations of the government, which leans towards the Sunni-majority faction in its regional disputes with Iran, she argues.

Other international coverage of Egypt worth skimming this morning:

  • Coming from the Associated Press is a piece on how the brotherly love between Egypt and Kuwait is not reflected in the treatment of Egyptian expats living in the GCC county.
  • As Nigeria devalues its currency 20%, analysts speaking to the Financial Times’ Maggie Fick and David Pilling doubt that country will follow the path of Egypt and adopt a full float of the Naira.
  • Former CIA agent Sabrina de Sousa lost her final appeal against extradition to Italy, where she and a team of CIA operatives were convicted for kidnapping terror suspect Osama Nasr and sending him to a CIA black site in Egypt under the extraordinary rendition program, Fox News reports. Nasr has accused of Egyptian authorities of torturing him. The story is also making headlines in the Wall Street Journal
  • Middle East Monitor looks into how the Arab League’s 22 states not paying their dues is bringing financial turmoil to the organization that risks it leaving Cairo.
  • French presidential candidate Marine Le Pen refused to wear a headscarf to meet with Lebanon’s grand mufti and so the meeting was canceled. She told reporters there she was not forced to wear one when she met with Sheikh Al Azhar in 2015.
  • Egypt’s Essam El Hadary made Uganda’s goalie Denis Onyango a happy man by giving him his football jersey. Onyango posed with the jersey and called it a “special gift from a special person.”

On Deadline

Egypt should (in this regard and this regard only) follow Erdogan’s example and be morepragmatic in its trade dealings with Israel, says the Al Masry Al Youm columnist who writes under the pseudonym Newton. The columnist reminds us that despite his many transgressions, Erdogan is smart and pragmatic enough to see the benefits Turkey could reap by cooperating with Israel. Egypt has far more to gain by taking advantage of the opportunities in increasing trade and cooperation with its neighbor — particularly in tech — than by sticking to old habits of shunning the country altogether, Newton says.

Worth Watching

Daredevil Russian model throws Dubai, interwebs into a tizzy: Twenty-three-year-old model Viktoria Odintcova was summoned back to Dubai from St Petersburg to “sign a pledge to never put her life in danger for her work again” after she dangled off a 73-story building with no safety harness for a photo stunt. The UK’s Metro News has the story and a roundup of social media posts, or tap the image above to see an Instagram video of the stunt that’s gone viral.

Diplomacy + Foreign Trade

Egypt and Jordan will not accept anything short of a two-state solution to the Palestinian-Israeli conflict that would see a Palestinian state established along the 1967 borders with East Jerusalem as its capital. That’s the take-home message in a statement from Ittihadiya (pdf) issued after Jordan’s King Abdullah II visited Cairo yesterday. “These are unwavering Arab national fundamentals and come within the framework of preserving the rights of the Palestinian people.” The statement came just days after US President Donald Trump said that he could live with a one-state solution. Abdullah and President Abdel Fattah El Sisi also discussed terrorism and the conflicts in Syria and Libya. Jordan’s state news agency Petra and Israel’s Haaretz also have the story.

PM meets top German legislator ahead of Merkel visit to Cairo: Prime Minister Sherif Ismail met with vice president of Germany’s Bundestag Johannes Singhammer to discuss Egypt’s economic reform program, terrorism and Egypt’s experience with illegal migration, according to a Cabinet statement. The two did not discuss a potential Turkey-style anti-migration deal between Egypt and the European Union, which German Chancellor Angela Merkel came out in support of last year after Austria’s Chancellor had first pushed the notion back in September. Singhammer’s visit to Egypt comes as Merkel is expected in Cairo on 2-3 March.

Trade and Industry Minister Tarek Kabil’s first day in Paris focused largely on attracting French investments in Egypt’s auto industry. Kabil, who was in the French capital with a delegation from the Egypt-France Business Council to promote investment opportunities in Egypt, discussed with his French counterpart Christophe Sirugue opportunities for Egypt to benefit from France’s expertise in the industry, Al Shorouk reports. Kabil also invited Sirugue to attend the Batimat Egypt Trade Show set to take place next month, according to Ahram Gate, and presented Egypt’s economic and legislative reforms during a meeting with the Council, the newspaper reports. Council chairman Fouad Younes also discussed attracting French projects in the auto manufacturing and renewable energy sectors, as well as the establishment of a French industrial zone in Borg El Arab and the Suez Canal Economic Zone.

The UK is looking to increase investments in Egypt in the upcoming period, Ambassador John Casson told Investment and International Cooperation Minister Sahar Nasr, according to a ministry statement.

Japan is less interested in energy investments in Egypt than it is in pharma and food, Japan’s ambassador to Egypt Takehiro Kagawa tells Al Borsa.

Vatican, Al Azhar meet to discuss fighting extremism: Cardinal Jean-Louis Tauran, president of the Pontifical Council For Interreligious Dialogue at the Vatican, arrives today on a two-day visit to Al Azhar, according to Vatican Radio. Tauran is set to participate in an Al-Azhar symposium on terrorism and extremism, Al Masry Al Youm reports. On a related note, Al Azhar plans to issue a document detailing women’s rights “as granted by the Holy Quran and the prophet’s teaching” to dispel incorrect Fatwas that have become entrenched in the Egyptian psyche, Egypt Independent reports.

Energy

EETC asks solar power companies to cover increases in infrastructure development costs for renewable energy projects, ready to sign power purchasing agreements

The Egyptian Electricity Transmission Company (EETC) is ready to sign power purchase agreements with renewable energy companies under the feed-in tariff program as soon as they reach financial close, Al Borsa says. The Finance Ministry approved investors’ letters of guarantee on Tuesday, one day after the EETC informed them during a meeting that they would be picking up the bill for 15-20% increases in the costs of infrastructure works being carried out under the terms of their cost-sharing agreement. The exact increase will be specified in letters sent to companies in phases one and two over the next two weeks, but will be no less than 35% according to Borsa. The meeting took place one day after the Electricity Ministry announced it would not be increasing the feed-in tariff as solar power companies had been urging for months. With costs on the rise, 10 solar power companies have relocated their projects from Zaafarana to Aswan’s Benban make use of the government’s cost-sharing agreement with the 23 other companies already at work there and cut the extra time and money needed to build new infrastructure to tie them the national grid, Al Borsa also says. (Al Shahid Law Firm provides a neat breakdown of the meeting’s key points here).

Egypt may join OPEC’s oil production cap agreement –OPEC

Egypt may join OPEC’s oil production cap agreement, OPEC Secretary-General Mohamed Barkindo said at a press conference on Tuesday. “We still expect more other producers will join [the agreement] in the possible time…Yes, we would like to see Egypt to be part [of the agreement],” Barkindo said, according to TASS. Barkindo showered Egypt’s Zohr discovery with praise, stating that the find would be critical to not only reviving the oil and gas sector in the country, but the economy as a whole, reports Sputnik’s Arabic portal.

Electricity Minister meets with Siemens consultants to discuss grid master plan

Electricity Minister Mohamed Shaker met with Siemens executives to discuss the 2025 electricity grid master plan and the 2018 short-term plan, Al Masry Al Youm reported. Siemens is preparing the masterplan as a consultant to the ministry under a 2015 MoU, according to a Al Borsa.

China’s CHINT opens low-voltage switchgear manufacturing factory

China’s CHINT Group opened its first low-voltage switchgear manufacturing factory in Cairo on Sunday, the company announced yesterday in a statement. “Production of the first switchgear is expected to be completed on 1 March and the factory is estimated to produce goods worth an approximate [USD 5 mn],” the statement read. The factory will be jointly operated with the Egyptian German Electrical Manufacturing Company. CHINT chairman had met with Electricity Minister Mohamed Shaker yesterday.

Infrastructure

EBRD to provide financing for Fayoum wastewater expansion program

The European Bank for Reconstruction and Development (EBRD) has reviewed the concept for a EUR 400 mn investment programme to fund an integrated wastewater treatment program in Fayoum. The program includes constructing eight new wastewater treatment plants, expanding the sewage network in the area, purchasing equipment for wastewater facilities and evacuation trucks.

Basic Materials + Commodities

Aton begins diamond drilling at Hamama deposit

Aton Resources has launched diamond drilling operations (deep-drilling that leaves rocks intact) at its Hamama gold deposit at the Abu Marawat concession, the company announced in a statement. The move is part of the company’s plan to expand drilling operations at the site which were announced last month.

Manufacturing

Jotun to open new EGP 1.2 bn factory in 2Q17

Norway’s Jotun Paints Company will launch a new EGP 1.2 bn paints factory in 10th of Ramadan City in 2Q17, a senior company official tells Daily News Egypt. He made a point to mention that the company had supplied the paint for the three Siemens power plants.

Tourism

Aswan Museum’s annex inaugurated

Antiquities Minister Khaled El Enany inaugurated a 220 sqm annex of the Aswan Museum on Elephantine Island which has been shut down for five years for security reasons, Al Borsa reported.

Automotive + Transportation

VW reportedly looking to reopen rep office in Egypt

Volkswagen (VW) is considering reopening a rep office in Egypt, Karim Naggar, Chairman of the Egyptian Automotive & Trading Company told Al Mal. VW had withdrawn from Egypt in 2011 but is now reconsidering opening an office in Egypt that would supply domestic feeder industries and spare parts.

MCV wins tender to export buses to the Philippines

Egypt’s Manufacturing Commercial Vehicles Company (MCV) won a tender to supply 100 buses to the Philippines, General Manager Amr Nassar tells Al Mal. We had noted last August the company was planning to enter the Philippines market with an export order of 60 buses. Egyptian bus and truck manufacturing firm MCV, which manufactures Mercedes’ buses, exports to African countries, the Far East, the Middle East, Latin America, and Europe.

Banking + Finance

Al-Futtaim chooses banking consortium for EGP 1.2 bn facility

Al-Futtaim Group Real Estate tapped four banks for a EGP 1.2 bn syndicated loan to be used for debt restructuring, sources tell Al Mal. CIB, the Arab African International Bank, the National Bank of Abu Dhabi, and the Arab Bank form the consortium. EFG Hermes was Al-Futtaim’s financial advisor. The loan will be repaid over 10 years, and final contracts will be signed and liquidity provided before the end of 1Q17, sources said.

Other Business News of Note

Careem inks agreement with Fawry that will allow customers to pay for rides in advance

Fawry and Careem have closed an agreement that will allow customers to pay for their cab rides in advance using any of Fawry’s 60k e-payment outlets across the country, Al Borsa reports.

Contractors threaten to suspend work if Contractor’s Compensation Act does not pass swiftly

Contractors are threatening to suspend projects for the government if it does not speed up passing the Contractor’s Compensation Act, Egyptian Federation for Construction and Building Contractors head Hassan Abdel Aziz tells Al Borsa. The bill — which would compensate suppliers for the FX losses they have incurred after the float — is currently being reviewed by the Council of State (Maglis El Dowla), which will send the legislation to the House of Representatives for a vote upon completing its review.

Egypt Politics + Economics

Court snubs government’s latest attempt to get Saudi island agreement moving along

The Ismail government is still trying to get the Tiran and Sanafir sovereignty handover agreement with Saudi Arabia moving along, attempting to get an injunction passed to suspend the Administrative Court’s ruling in January reaffirming the suspension of the treaty. The injunction failed to pass the Administrative Court which shot it down, according to Al Borsa.

National Security

Sudanese security forces arrest Ikhwan members fleeing from Egypt

Sudanese security forces have arrested Ikhwan members fleeing Egypt to Sudan, including former FJP member and MP Yasser Hassanein, but said that the arrests are part of a campaign against foreigners in Sudan and is not aimed specifically at Ikhwanis, Al Shorouk reports. We had taken note last week of Sudan ramping up the pressure against the Ikhwan by expelling its members, seemingly as a gesture to mend fences with Egypt, as relations between the two countries have begun to improve.

Minerva Vehicles to sell Egypt 2-3K Panthera T6 armored vehicles

Dubai-based Minerva Special Purpose Vehicles (MSPV) confirmed during the IDEX 2017 security trade show that it is building large numbers of Panthera T6 light armored vehicles for Egypt. MSPV’s assistant manager for sales and business development didn’t reveal exactly how many vehicles were ordered by Egypt, but said it is in the region of 2,000-3,000 vehicles for both the Egyptian Army and National Police, reports IHS Jane’s.

Sports

English Premier League can’t get enough of our players apparently

English Premier League giants Liverpool are reportedly interested in 22 year-old Egyptian forward Mahmoud Hassan ‘Trezeguet,’ Fil Goal reports. Behind the scenes talks for the player, who is currently on loan at Belgian top division team RS Mouscron, are reportedly taking place but a bid has not been made. If the transfer goes through Trezeguet would join fellow national team players Mohamed Elneny (Arsenal), and Ramadan Sobhy (Hull City) in the league.

The markets yesterday

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EGP / USD CBE market average: Buy 15.7532 | Sell 15.8579
EGP / USD at CIB: Buy 15.75 | Sell 15.85
EGP / USD at NBE: Buy 15.7 | Sell 15.75

EGX30 (Tuesday): 12,658 (+1.7%)
Turnover: EGP 1.4 bn (238% above the 90-day average)
EGX 30 year-to-date: +2.5%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session 1.7% up. CIB, the index heaviest constituent jumped 1.7%. The EGX30’s top performing constituents were: Egyptian Iron and Steel up 9.9%, Porto Group up 7.7%, and Amer Group up 6.9%. Yesterday’s worst performing stocks included Credit Agricole down 4.8%, Juhayna down 4.4%, and Elsewedy Electric down 1.1%. The market turnover was EGP1.4 billion and local investors were the sole net buyers.

Foreigners: Net short | EGP -91.1 mn
Regional: Net short | EGP -16.3 mn
Domestic: Net long | EGP +107.4 mn

Retail: 65.2% of total trades | 67.5% of buyers | 62.8% of sellers
Institutions: 34.8% of total trades | 32.5% of buyers | 37.2% of sellers

Foreign: 14.6% of total | 11.5% of buyers | 17.7% of sellers
Regional: 7.8% of total | 7.2% of buyers | 8.3% of sellers
Domestic: 77.6% of total | 81.3% of buyers | 74.0% of sellers

WTI: USD 54.06 (+1.24%)
Brent: USD 56.64 (+0.82%)
Natural Gas (Nymex, futures prices) USD 2.56 MMBtu, (-9.53%, March 2017 contract)
Gold: USD 1,238.90 / troy ounce (-0.02%)

TASI: 7,057.8 (-0.2%) (YTD: -2.1%)
ADX: 4,607.7 (+0.6%) (YTD: +1.3%)
DFM: 3,650.0 (-1.2%) (YTD: +0.8%)
KSE Weighted Index: 422.9 (-0.3%) (YTD: +11.3%)
QE: 10,933.7 (+0.2%) (YTD: +4.8%)
MSM: 5,852.1 (0.0%) (YTD: +1.2%)
BB: 1,320.0 (-0.4%) (YTD: +8.2%)

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Calendar

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

23 February – 16 March (Thursday-Thursday): ‘Glimpses of Upper Egypt’ exhibition at Accademia d’Egitto in Rome.

26 February (Sunday): AmCham conference on Egypt’s Financial Reform Agenda, Cairo. Register here.

02-03 March (Thursday-Friday): German Chancellor Angela Merkel’s visit to Egypt.

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.

14-15 March (Tuesday-Wednesday): The third Builders of Egypt conference, Ritz Carlton Hotel, 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): Third 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.

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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