Sunday, 26 February 2017

Amer: No intervention in FX market, imports down 20%.


What We’re Tracking Today

The Finance Ministry reportedly wants the IMF to delay sending a delegation to Cairo for a review of progress on the reform program to which we committed as a condition of the USD 12 bn extended fund facility. The delegation was expected in March, but unnamed sources tell Al Masry Al Youm the Finance Ministry wants a bit more time to finish working on the 2017-18 budget before the IMF arrives in town for a review that would lead to the disbursement of a second USD 1.25 bn tranche of the facility. No other media outlet has yet confirmed AMAY’s story.

Finance minister Amr El Garhy speaks today at AmCham Egypt’s monthly gathering. The topic, as usual: The Ismail government’s fiscal reform program, Youm7 reports.

We’re finally standing up to the Brits on their Sinai flight ban: That Boris Johnson fellow was in Cairo to bloviate this past weekend, and Foreign Minister Sameh Shoukry spoke for all of us when he told the UK foreign minister that it’s time the Brits stopped Tweeting platitudes about their love of Egypt / strong-arming Egypt on IOC payments and lift its ban on flights to Sinai. The Egyptian Foreign Ministry said in a statement released after the meeting: “The continuation of the halt of the British airline to the Egyptian tourist destinations despite the progress that has been made in securing airports is completely not understandable and unjustified.” Reuters has the story of the travel ban, while Al Masry Al Youm has a take on Boris’ visit. (In fairness: The bit about Tweeting platitudes and strong-arming on IOC payments is us, not MoFA.)

US Democrats have chosen Obama-administration labor secretary Tom Perez as the next chairman of the Democratic National Committee, defeating Keith Ellison, Politico says. Perez tapped Ellison as his deputy chair. While a conventional choice for Dems, Perez is being forced to stand his ground by swelling anger in Democratic ranks: “Trump is anathema to America,” he told the political news website.

The Donald, meanwhile, spent the weekend picking fights with the press, the FBI and the intelligence community as he hopped back on Twitter (check out @realDonaldTrump). So much for GOP hopes of a reset. How could that ever go wrong for him… Elsewhere: “Wary of Trump unpredictability, China ramps up naval abilities,” reports Reuters.

Food for thought this morning if you manage third-party money: Some twelve years on, Warren Buffett is still waiting for someone to take him up on his wager that “no investment pro could select a set of at least five hedge funds – wildly-popular and high-fee investing vehicles – that would over an extended period match the performance of an unmanaged S&P-500 index fund charging only token fees” — and he’s as polemic about it as ever in this year’s Berkshire Hathaway annual report: “When tns of USD are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.” As usual, Buffett’s annual report is all over the Western business press. Bloomberg’s coverage is typical, or you can read it yourself here (pdf; the tired against asset managers starts on page 21) on Berkshire Hathaway’s ridiculously old-school website.

What We’re Tracking This Week

Finance Minister Amr El Garhy will appear before the House of Representatives to discuss fiscal policy. It remains an open question whether he will answer questions from MPs on the agreement with the International Monetary Fund for a USD 12 bn extended fund facility.

Also in the House this week: The State Contractors’ Compensation Act is due to come up for discussion before the House as a hole, and the House Industry Committee is due to resume discussion of the automotive directive, a package of measures designed to protect domestic assemblers against unfair competition from Turkish, Moroccan and European Union imports.

German Chancellor Angela Merkel is set to arrive in Cairo on Thursday (2 March) for talks on terrorism and illegal immigration. She will be joined by a business delegation, Al Mal reports. Merkel will be meeting with President Abdel Fattah El Sisi, Prime Minister Sherif Ismail, Pope Tawadros II, and Al Azhar’s Sheikh Ahmed El Tayeb, according to the newspaper. Speaking at a conference, Merkel — who praised Egypt’s “bold economic reform measures” — said she is looking forward to further discussions on the Palestinian-Israeli peace process and Libya, Ahram Gate reports.

The Tax Authority is meeting with representatives from EGPC to discuss the tax treatment of IOCs this week, according to Al Borsa. IOCs are concerned about their suppliers having to pay VAT, arguing it amounts to an effective additional tax not stipulated in the production sharing agreements between them and state entities including EGPC and EGAS.

On The Horizon

Among the investor conferences on the horizon:

  • JP Morgan’s Global Emerging Markets Corporate Conference kicks off tomorrow in Florida.
  • 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

Believe it or not, ladies and gents, the talking heads are back to discussing real world topics that impact our economy after what seemed like a case of a back-to-school week for them.

Hona Al Assema’s Lamees Al Hadidy led last night with criticism of CBE Governor Tarek Amer’s statements on Friday (more on this in the Speed Round) that we should not worry about the USD-EGP exchange rate. Lamees took offense to Amer downplaying the inflationary impact of the EGP float, going so far as putting words in his mouth that the two were not related (watch, runtime: 17:36).

Lamees then moved on to discuss the implications of doubling the price of entry visas for tourists to USD 60 starting 1 July. Tourism Development Authority head Hisham El Demery defended the move, telling Lamees that this would have very little impact on tourism, as Egypt draws its tourists with cheaply priced tour packages. He does feel that the sudden timing of the move could have been handled better. Khaled El Menawwy, billed as an advisor to the tourism industry, countered that the decision would “destroy” the industry. Blue Sky travel agency chairman Hossam El Shaer warned that foreign tour operators would turn to Tunisia and Turkey, which he said do not charge operators for visas. He expects the move will garner a wave of negative publicity in Europe (watch, runtime: 28:19).

Kol Youm’s Amr Adib covered the displacement of Coptic families from Al Arish City in Ismailia and the full-court press the cabinet is playing to make sure they are taken care of. Adib aired interviews with some of the families (watch, runtime: 32:09). Housing Minister Mostafa Madbouly called in to discuss the homes the ministry’s plans to build homes in Ismailia in cooperation with Social Solidarity Minister Ghada Waly (watch, runtime: 3:29). Waly told Adib that 19 displaced families are now residing in the ministry’s hostels, and other 39 families were moved to youth hostels in Ismailia (watch, runtime: 8:08). The Higher Education Ministry will also ensure students will be able to complete their coursework in one of the canal city universities and facilitate transferring credits, said minister Khaled Abdel Ghaffar (watch, runtime: 4:55).

The award for least interesting topic of the night goes to … Al Hayah Al Youm’s Lobna Assal who interviewed CAPMAS head Abu Bakr El Gendy on the collection of health data (watch, runtime: 1:16).

Speed Round

Speed Round is presented in association with

Central Bank of Egypt Governor Tarek Amer sat down for a televised interview with DMC’s Osama Kamal on Friday in which he downplayed the impact of the float of the EGP and denied the central bank had subtly intervened in the market to support the national currency (watch the full interview, runtime 1:16:36).

Amer said he expects foreign debt to reach USD 60 bn, or about 30% of GDP, by June and projected the current account deficit will ease 50% to USD 10 bn this year, down from last year’s USD 18.7 bn. Imports are down 20% so far this year. He also said that Egypt has managed to repay USD 3 bn in international obligations in the past three months and suggested the backlog of importers and investors (we presume he means public market investors) waiting for USD allocations has been cleared. The CBE and Egyptian General Petroleum Corporation are coordinating to repay USD 1.5 bn in arrears owed to international oil companies this year.

Some USD 13.5 bn has flowed into local banks since the float of the EGP on 3 November, the governor said, supporting the ability of foreign companies to repatriate profits, Amer said.

Amer emphasized that he wished he could have floated the EGP earlier and said the negative impact of the move is not as bad as originally anticipated. The impact of the float will be transient, he said, stressing that what matters is not the exchange rate, but political and economic stability.

Amer denied speculation from some, including Renaissance Capital chief economist Charles Robertson, that the central bank had intervened to support the currency in a bid to curb inflation, helping the EGP rally against foreign currencies in the past week or so. The CBE cannot intervene in the market, he said — and doesn’t need to, as Egypt is on a “clear path to reform.”

Expect continued volatility in the exchange rate, Amer said, (correctly) declining to specify when pressed what he sees as the fair value for the EGP as being.

The Finance Ministry will send draft legislation to the House of Representatives in early March that will create a 0.2% stamp tax on stock market transactions, a Finance Ministry source told Reuters. The Both buyers and sellers will pay the tax on each transaction, making the effective rate on any given transaction 0.4%, split between both parties. The source says the Ministry is to begin applying the tax by May. He expects the stock market stamp tax to bring in EGP 1-1.5 bn in FY 2017-18, conditional on trading volumes. The source also hopes the House of Representatives will eventually raise the tax rate to 0.3%.

The rate proposed is below the 0.4-0.5% speculated by the market, Allen Sandeep, head of research at Naeem Brokerage, told Reuters, “so this is more of a relief for the market, which had been pricing in a much higher rate.” Sandeep says the 0.2% is an acceptable rate for an “emerging market like Egypt,” but he would have preferred the tax be deferred altogether given the “emphasis on attracting foreign capital.”

What will the stamp tax mean for the IPO pipeline in the first half of the year? That was the question Al Borsa asked a number of investment banks popular with retail investors. Some, including Prime Holdings CEO Mohamed Maher, believe that while the tax will have an effect, the success and failure of IPOs at drawing investments will primarily depend on how attractive the pricing of the companies will be. Pioneer Holdings’ head of brokerage Amer Abdel Kader takes the view that the stamp tax will have a negligible effect, as the EGP float has proven to be a major draw to investors that will be sustained after the tax is implemented. Others are not as optimistic, including Cairo Capital’s Ahmed Abou Hussein. AT Brokerage’s Mohamed Fattah Allah thinks that the tax would actually derail the IPOs of state-owned businesses.

Al Borsa expects six “major IPOs” in the first half of the year:

  • Banque du Caire, with EFG Hermes and HSBC managing the transaction;
  • Raya Holding (EFG Hermes);
  • MM Group for Industry and International Trade (Beltone Financial);
  • El Farasha for Printing and Packaging (Beltone Financial);
  • DBK Pharma, with Pioneer Holdings managing the listing;
  • Real estate developer Misr Italia, with Prime Holdings leading.

Could the government be forced to amend the value-added tax act? The executive regulations governing the value-added tax (VAT) may not be handed down as fast as Deputy Finance Minister Amr El Monayer had hoped: Maglis Al Dowla (the State Council) has concluded its review and says it has 30 proposed amendments that may necessitate revisions to the law itself, Al Borsa reports. Council officials say that some provisions of the draft regulations — such as those on tax-free shopping for foreigners, for example — are not provided for by the law that created the VAT.

The Council also finished its review of other laws and regulatory proposals, including one that essentially criminalizes cheating on high school exams by setting stricter punishments and higher fines. Teachers and administrators that leak or help circulate leaked exams could face 2-7 years in prison and fines of EGP 100-200k, while students caught cheating face a year in prison and fines of EGP 5-10k, newspaper says. Maglis Al Dowla also had remarks on the clauses of the legislation being prepared to establish a separate entity to govern nuclear power projects in Daba’a,

Meanwhile, the draft Labor Act is now before the House of Representatives after the State Council proposed 39 amendments to the 275-article law. Al Masry Al Youm has the full rundown.

Egypt and Algeria could see their domestic wheat harvests swell 25% more this year than last if favourable weather projections hold, Bloomberg reports, noting, “That means imports from the region could drop from a record high to a three-year low, according to Chicago-based researcher AgResource Co. … While global demand for wheat has never been bigger, output has risen even faster, and prices have plunged for four straight years.”

The suggestion comes as state grain buyer General Authority for Supply Commodities (GASC), the world’s largest buyer of wheat, bought 360k tonnes of wheat from international markets, traders told Reuters. Broken down, GASC bought 300k tonnes of Russian wheat and 60k tonnes from Ukraine. This comes as Egypt finalized its rejection of 18,000 tonnes of Russian wheat that had originally been seized in November, saying it is unfit for human consumption due to the large number of insects found at the storage site in Dekheila port, Al Mal reports. The shipment will be returned to Russia.

Concerns about nuclear waste from the Daba’a power plant dominated debate at the state-sponsored public consultations held in Marsa Matrouh on Saturday, according to Al Mal. Electricity Minister Mohamed Shaker reassured citizens that the 4800 MW nuclear power plant being developed in partnership with Russia’s Rosatom will use the latest technology and safety precautions and that nuclear waste will be disposed of in accordance with international benchmarks, the newspaper adds. According to Shaker, the plant will be able to withstand the impact with a 400 tonne plane falling at a speed of 150 meters per second.

The project’s location was not a random choice, but a calculated decision based on dozens of tests and studies that determined the stability of the earth in the area, Environmental Affairs Agency chief Mona Kamal said.

Shaker told attendees that two of the four contracts for the plant have been finalized and two others should be reviewed over the next few weeks, but refused to give any specific deadline, Al Mal says. The contracts are expected to be signed in March, previous reports suggested. The Electricity Minister said that he intends to hold more meetings with community leaders at which he would delve deeper into the terms of the government’s contract with Rosatom. Shaker said the project will not only diversify Egypt’s energy sources, but provide “tens of thousands” of job opportunities for the locals over eight years of construction

Russia’s Deputy Prime Minister Dmitry Rogozin will reportedly be in Cairo this week with a delegation from the Russian Energy Ministry, sources tell Al Ahram. The Russian ministers of foreign affairs and defense will also visit Egypt early in March for cooperation talks.

Rift between Saudi Arabia and Egypt remains, even if diplomats say everything is okay: Egyptian real estate companies have halted projects that were set to be implemented in Saudi Arabia, according to Reuters. Talaat Moustafa Group (TMG), Al Ahly for Real Estate Development, Orbit Alliance, and Misr-Italia Group had all signed MoUs to build houses in Saudi Arabia during King Salman’s visit to Egypt last April. TMG had explained at the time that it was going to assess developing housing projects on land provided by the Saudi government and, in return, will receive ownership of a number of units it constructs to compensate for the price of land. Al Ahly’s Chairman Hussein Sabbour said his company withdrew because of “because of worries over tensions between Egypt and Saudi Arabia,” despite having completed preliminary plans for the project. Misr-Italia said contact with their Saudi counterparts stopped since June and “the agreement was canceled due to a lack of cooperation from the Saudi side.” USD 22.65 bn worth of agreements and project MoUs were signed during Salman’s visit.

Egypt’s Foreign Affairs Ministry has insisted there is no need for mediation with Saudi Arabia, denying reports of a rift between the two countries, and saying that ties between Cairo and Jeddah run deep.

Afrexim Bank could extend financing to Egyptian real estate, clean energy and manufacturing projects worth a combined value of USD 1.199 bn, the bank’s director of banking operations, Heba Aboul Ezz, tells Al Borsa. Afrexim Bank president Benedict Oramah said at a press conference on Thursday that the bank has reached an agreement to provide the National Bank of Egypt with financing to support Egyptian exports to Africa, the newspaper reports. Oramah did not specify the value of the funding.

Tourist visas will more than double in price to USD 60 for single entry and USD 70 for multiple entry, up from USD 25, according to Al Shorouk. The Foreign Ministry had originally wanted to raise prices effective in March, but Prime Minister Sherif Ismail has decreed that it will go into effect in July, Youm7 reports. Tourism industry players claimed they were not informed of the decision ahead of time, and Egyptian Tourism Federation head Karim Mohsen said the federation has already received calls from international tour operators regarding the move, adding that he expects bookings to take a hit in the coming period, Al Borsa reports. Rep. Mohamed Badawy and former head of the Chamber of Tourism Companies Hossam El Shaer also criticized the move, saying it would deal a “lethal blow” to Egypt’s tourism if implemented, Al Shorouk reports. Price-sensitive travel to the Red Sea has recently been on the upswing.

** Earnings watch: Madinet Nasr Housing & Development reported a 187% year-on-year increase in consolidated net profit in FY2016. Revenues grew 162% to EGP 2.02 bn, the fastest rate of growth in the company’s history, according to a regulatory filing.

Christian families are fleeing their homes in North Sinai’s Al Arish, after Islamist terrorists killed another Coptic Christian this Friday, the Associated Press reported. The death was the sixth Christian to be killed in Sinai this month. The government responded by relocating the displaced citizens to Ismailia, Qalyubiyah, Cairo, and Asyut temporarily until the crisis is averted, Youm7 said. At President Abdel Fattah El Sisi’s request, Prime Minister Sherif Ismail ordered state bodies to coordinate with the various city governors to ensure that the families are being aided and that their medical needs are met. Daesh affiliates in the region had vowed to step up their attacks against the Christian population in a video released last week. The story is dominating international headlines on Egypt — see Egypt in the News, below, for more.


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Meet Russia’s nature preserves, now turning 100 and teeming with polar bears, muskox and some very hungry brown bears.

Egypt in the News

The displacement of dozens of Christian families in Sinai as a result of increasing threats from Daesh topped international coverage of Egypt over the weekend — which saw significant foreign media coverage of some of our top stories. Reports on the number of Coptic Egyptians fleeing Sinai (mostly from Al Arish) differ from the AP and AFP, with the latter citing 250 people and the former reporting 90 families have left and keeping a tally of the number of Christians killed in Al Arish over the past month. Most of the reporting appears to heighten the sense of fear and lawlessness in Sinai, with conservative publication the Washington Examiner going so far as to state that Christians were fleeing Egypt. Copts in the UK are calling for more to be done: “What we haven’t seen done robustly across Egypt in all of these situations is people actually being brought to account and this gives rise to a sense of impunity.”

Also driving the narrative on Egypt this morning: UK Foreign Minister Boris Johnson pledging three new aid packages to Egypt that target the economy, education, and entrepreneurship, in addition to a USD 150 mn facility to Egypt despite calls to address human rights during his trip to Cairo. The Associated Press’ pickup of Egypt doubling the price of entry visas for foreigners has also received widespread coverage.

On the resurrection of the US-Egyptian partnership: Adel El Adewy pens an oped for The Hill arguing that US President Donald Trump could bring in a new era in US-Egyptian relations after what he describes as the “controversial and naive” policy of the Obama administration to build relations with the Ikhwan. Ties can be improved by US backing for a large-scale debt relief program; increasing military assistance to the Egyptian Armed Forces and allowing them to purchase advanced weaponry; reinstating the Egyptian cash-flow-financing privilege to allow large-scale military purchases from American defense contractors; encouraging U.S. allies to invest in Egypt and boost its recovering economy; expediting the designation of the Ikhwan in Egypt as a terrorist organization.

Talk of Egypt’s “deep state” plays out over US politics: As the dysfunction in the Trump administration plays out daily, the Chicago Tribune picks up on the discourse on whether there is a “deep state” in the US in a manner in which it says is present in Egypt and Turkey. The paper recalls talk back in 2013 of how former President Mohamed Morsi was plagued by endemic economic and structural failures that evaporated a week after he was toppled is indicative of a shadow government made up of state security and the bureaucracy.

Other coverage of Egypt in the international press worth a skim:

  • The Associated Press is getting wide pickup for a piece on inflation hitting 30% in January. The story is dismissive of the IMF’s view that inflation should subside this year and subtly hints that popular patience may not wait that long.
  • Canada’s CBC covers the story of an LGBT Egyptian who is concerned about his safety if he returns to Egypt and is applying for asylum in Canada.
  • Not even in death are we spared from the Blind Sheikh Omar Abdel-Rahman, whose story is being used by some racist over at the American Center for Democracy to pat herself on the back for being among the first to say Muslim immigrants come to America to terrorize it.
  • Rolling Stone shines the spotlight on the case of author Ahmed Nagy, convicted six months ago of "violating public morality," for his book The Use of Life.
  • Palestine is yet again generating press for Egypt internationally, with conservative Christian publication CBN News running an asinine piece criticizing Egypt and Jordan’s commitment to a two-state solution, while China’s Global Times quotes Chief Palestinian Negotiator Saeb Erekat’s statement thanking President Abdel Fattah El Sisi and Jordan’s King Abdullah for supporting the two-state solution.
  • In a poorly-written, slang-ridden piece for Kenya’s Standard, Oluoch Madiang’ blames Egypt and Ethiopia for a drought that has hit Kenya. Madiang’ mockingly faults Egypt for historical treaties which guarantee it 55.5 bn cubic meters of water.
  • Vocativ takes a look into the plight of Syrian refugees in Egypt, some of whom, it claims, are forced to sell their organs on a thriving black market in the country.
  • The Nigerian Guardian has unfortunately picked up on the news that Wadi Degla football club has been trying to sell eternal national team goalkeeper Essam El Hadary on Facebook. Shameful treatment of a national treasure.

On Deadline

Imposing stamp taxes on EGX transactions should be replaced with a tax on bank deposits, which carry no risks and would be certain to yield greater returns if taxed than transactions in the stock market, Mahmoud Hashem writes in a column penned for Al-Borsa. Please, God, don’t get us started…

Diplomacy + Foreign Trade

Egypt has never proposed to resettle Palestinians in Sinai, Ittihadiya’s spokesperson Alaa Youssef told local media outlets on Thursday. “These are baseless rumors,” Youssef says, and they aim to “destabilize” Egypt. “There were no such discussions or proposals from any Arab or international bodies, and that the issue is unacceptable,” he added. Ittihadiya also said President Abdel Fattah El Sisi met with the supreme councils of the armed forces and police to discuss security developments in Northern Sinai on Thursday. The Associated Press and Ynet also covered the statement.

Hungary’s deputy prime minister Zsolt Semjén arrived in Cairo on Thursday to discuss improving cooperation with Egypt, Youm7 reports. Semjén’s visit comes after Defense Minister Sedki Sobhi met with his Hungarian counterpart István Simicskó in Budapest last week.

Did Egypt provide arms to South Sudan? Sudan President Omar Al Bashir accuses Egypt of providing South Sudan with weapons and ammunition. “We have intelligence that they [Egypt] supported the South Sudanese government, and continue to support the government with arms and ammunition,” Al Bashir says, Sudan Tribune reports, but denied Egyptian involvement in air attacks in the South Sudan conflict.

A Belgian business delegation is expected to visit Egypt in May to discuss investment opportunities and will likely focus on the Suez Canal Economic Zone, Egyptian-Belgian Business Association head Rafik Attia said, Al Shorouk reports.

55 Egyptian companies signed export contracts worth USD 10.6 mn at the opening ceremony of the Egypt’s logistics center in Nairobi, Al Borsa reports. The agreements were signed during an Egyptian business delegation’s seven-day visit to Kenya.


Eni to begin producing 200 mcf/d from Zohr gas field by October

Italy’s Eni plans to begin producing 200 mcf/d of natural gas from the Shorouk offshore concession’s Zohr gas field by October, sources tell Al Borsa.

Basic Materials + Commodities

Egyptian stone fruit season to kick off end of March

Egypt‘s stone fruit season will begin at the end of March, two weeks before the Spanish season, giving Egypt an advantage for the UK market, writes Yzza Ibrahim for FreshPlaza. Good weather has enabled fruit producer Evagro to increase its production by 20% in the past couple of years. But Egypt has not capitalized on the fact that winter frost hit Spain and Italy hard, hindered by fixed contracts that prevented more exports to Europe. “The Egyptian government and the export council are currently surveying the use of pesticides by growers. Our products should be clean, if we want to impress the European market,” says Evagro’s Emad El Din Ahmed.


In & Out Furniture to establish four new factories worth EUR 92 mn

In & Out Furniture is going to invest EUR 92 mn in building four new furniture manufacturing factories, after the furniture store received supply orders from the United States, Chairman Mohamed El Akshar told Al Mal. El Akshar says In & Out had tapped a local bank open LCs for it to be able to import machinery and equipment, but its request was denied. He says the company is now partnering with a US-based company to build one of the factories.

Automotive + Transportation

GB Auto assessing tire plant, technical negotiations to begin in 2018

GB Auto is restarting negotiations with a number of international partners to assess implementing an expansion plan that includes building a tire factory in Egypt, Chief Investment Officer Menatalla Sadek told Al Mal. Sadek expects technical negotiations to begin in 2018 and says preliminary estimates suggest that the factory would cost USD 600 mn and take two-and-a-half years to complete. She added GB Auto expects reforms like the Investment Act and the automotive directive to improve the investment climate domestically. GB Auto had denied a report in December that it had already been allocated land to for a tire factory in Suez.

Banking + Finance

Banque Misr receives USD 80 mn from Credit Suisse

Banque Misr has received an USD 80 mn tranche in funding from Credit Suisse, Banque Misr Vice Chairman Akef El Maghraby told Al Mal. Banque Misr had announced it is borrowing a total of USD 350 mn from Credit Suisse to support liquidity and meet clients’ USD requirements. The central bank has also recently issued criteria to guide banks wanting to allocate loans from international funding institutions to support their tier-2 capital. El Maghraby says the most recent tranche brings the total Banque Misr received from Credit Suisse to USD 250 mn, with the timeline for the remaining USD 100 mn to arrive still to be set.

Naguib Sawiris, other Beltone Financial execs get seats on Auerbach Grayson’s board

OTMT Chairman Naguib Sawiris, Beltone Financial’s CEO Bassem Azab, and board member Ayman Suleiman have been added the Auerbach Grayson’s board of directors, according to a Beltone Financial regulatory disclosure. Beltone Financial, a subsidiary of OTMT, owns 60% of Auerbach Grayson’s shares. The board reshuffle now also includes David Grayson, one of the founders of Auerbach Grayson, as well as Daniel Sigg.

FX bureaus want the CBE to allow them to supply more than one bank at a time

FX bureaus want the CBE to allow them to supply FX to more than one bank at a time to have alternative outlets for their excess currency and avoid sustaining heavy losses as has been the case in recent weeks, Al Borsa says. FX bureaus have reportedly lost much revenue in recent weeks, as the USD devalued and as a result of excess currency that they were unable to pass on to the Emirates NBD, which has supply agreements with almost 80% of Egyptian FX bureaus, the head of the exchange bureau division at the Cairo Chambers of Commerce, Ali El Hariri, said. Members of the division plan to raise the issue with the CBE next week and demand that bureaus be allowed to deal with at least three banks at once, and that the National Bank of Egypt be one of them.

Egypt Politics + Economics

MP proposes constitutional amendments that would extend presidential term and award president vaster powers

MP Ismail Nasr El Din said he would begin circulating a petition to amend the constitution and extend the president’s term in office from four to six years, “to give him more time to accomplish his goals,” and award him vaster powers “to allow him to perform his duties,” Youm7 says. The MP said that the proposed amendments are not necessarily about the current president, but about changing the system of governance to the better. He also said that he plans to propose amendments to the duties of the Egyptian Council of State’s and laws on the formation of cabinet.

Court of Cassation acquits Mubarak-era chief of staff Zakaria Azmy on corruption case

The Court of Cassation acquitted Hosni Mubarak’s chief of staff Zakria Azmi on Saturday from all charges of graft and corruption brought against him in 2011, Al Borsa reports. The decision reverses a seven-year sentence and EGP 36 mn fine issued by the Cairo Criminal Court in 2012. Azmi’s brother in-law Gamal Halawa was also found not guilty. Reuters also has the story.

National Security

IOMAX holds emergency talks with Egypt to sell armed turboprop aircrafts

Signals intelligence and airborne system solutions provider IOMAX has held “emergency” talks with Egypt’s Defense Ministry “to safeguard an expected sale of armed turboprop aircraft from being poached by its Air Tractor and L3 Technologies competitors,” IHS Jane’s 360 reported. IOMAX has for some months reportedly been in negotiations with Egypt “to support and upgrade 12 AT-802s that have been gifted by the United Arab Emirates (UAE), at the same time as looking to sell the country 10 of its latest Archangel Block 2 Border Patrol Aircraft (BPA).” Jane’s says IOMAX has held emergency talks after discovering “L3 was trying to use the US government to have Egypt buy the AT-802L that it has developed with Air Tractor instead.”

On Your Way Out

The House of Representatives voted to establish a National Food Safety Authority (NFSA) in January. Law firm Sharkawy & Sarhan say the entity will replace and unify 17 existing supervisory agencies overseeing food safety in Egypt. Before the NFSA, Sharkawy & Sarhan say, food safety regulation was “a mess.” The new agency will, once it is up and running, supervise the handling of food, set the rules and conditions for export, license and inspect food handling, and set the regulations and rules for food advertising and the mandatory labeling criteria along with other functions.

25 Egyptian students topped the world in IGCSE exams: 25 students received Top in the World awards out of a global 946 in 2016 Pearson’s Edexcel IGCSE exams, British Council Egypt announced. The UK embassy in Cairo honored the students and presented a total of 67 awards to students who topped Egypt, Africa, and the world in international qualifications.

The markets yesterday

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EGP / USD CBE market average: Buy 15.7512 | Sell 15.8518
EGP / USD at CIB: Buy 15.7 | Sell 15.8
EGP / USD at NBE: Buy 15.7 | Sell 15.75

EGX30 (Thursday): 12,241 (-1.3%)
Turnover: EGP 1.3 bn (215% ABOVE the 90-day average)
EGX 30 year-to-date: -0.8%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 1.3%. CIB, the index heaviest constituent fell 0.7%. The EGX30’s top performing constituents were: Madinet Nasr Housing up 8.8%, Domty up 4.7%, and Palm Hills up 2.6%. Thursday’s worst performing stocks included GB Auto down 6.8%, Global Telecom down 5.9%, and ACC down 4.4%. The market turnover was EGP1.3 billion and local investors were the sole net sellers.

Foreigners: Net Long | EGP +49.4 mn
Regional: Net Long | EGP +38.6 mn
Domestic: Net Short | EGP -88.0 mn

Retail: 66.9% of total trades | 65.0% of buyers | 68.9% of sellers
Institutions: 33.1% of total trades | 35.0% of buyers | 31.1% of sellers

Foreign: 17.0% of total | 18.9% of buyers | 15.3% of sellers
Regional: 10.5% of total | 11.9% of buyers | 9.0% of sellers
Domestic: 72.5% of total | 69.2% of buyers | 75.7% of sellers

WTI: USD 53.99 (-0.84%)
Brent: USD 55.99 (-1.04%)
Natural Gas (Nymex, futures prices) USD 2.63 MMBtu, (+0.38%, April 2017 contract)
Gold: USD 1,258.30 / troy ounce (+0.55%)TASI: 7,046.2 (-0.2%) (YTD: -2.3%)
ADX: 4,653.4 (+0.3%) (YTD: +2.4%)
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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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