Sunday, 23 April 2017

IMF wants Egypt interest rates high to curb inflation


What We’re Tracking Today

President Abdel Fattah El Sisi is in Saudi Arabia today to meet with King Salman and tie a bow around the revitalized relationship between Cairo and Riyadh. The two are expected to discuss a basket of bilateral issues, with the fight against terror figuring heavily, the local press reports. The last time the two heads of state exchanged visits was in April last year, when Salman pledged bns in aid, investment and grants while in Egypt. Salman invited El Sisi to KSA in late March when the two leaders mended fences.

The Egyptian-Saudi Business Council sees the visit as an opportunity to move forward with over USD 25 bn in MoUs and other agreements signed last year, the group said in a statement picked up by AMAY. These include the development of the King Salman bridge, a pact with ACWA Power, and investment in the Suez Canal and real estate projects in the North Coast, Sharm, and Hurghada. The statement added that Saudi Arabia’s budget cuts would not impact investments in Egypt. The council plans a follow-up meeting in early May.

El Sisi is expected back in Egypt in time for a 25-27 April youth conference in Ismailia. Organizers have set up a website through which questions can be submitted to the president during his Q&A.

Food Export council looks to double sales to Africa to USD 260 mn this year: Trade and Industry Minister Tarek Kabil and Supply Minister Ali El Moselhy inaugurated the Food Africa expo in Cairo yesterday. About 500 companies are participating in the gathering, which wraps tomorrow, Al Shorouk reports. The Food Export Council says Egypt’s food exports to the continent hit about USD 130 mn in 2016, Al Mal reports, a figure the council is looking to double this year, council chief Hani Berzi said. Berzi was also quoted by Al Mal as saying that consumers should not expect much in the way of further price hikes this year. The Edita CEO also said his company has no plans to increase investment in Egypt this year, but is exploring export markets.

Pope Tawadros II is set to travel to Kuwait today through Wednesday, the first visit of a Coptic Orthodox Patriarch, Al Shorouk reports. The pope will conduct a dedication mass for St. Mark’s Coptic Orthodox Church in Kuwait on Tuesday.

CIB has dropped spending limits on international use of its credit cards, the bank said this weekend in an SMS to cardholders.

Has FaceTime been acting up for you lately? Voice over IP applications including Skype, Facebook Messenger, Viber and FaceTime have been working sporadically over the past few days, stirring rumors that access could be blocked to Egyptian users. The National Telecommunication Regulatory Authority put out a tweet denying that VOIP services had been shut down, with sources telling Al Mal that the likely culprit was Telecom Egypt, an explanation we are inclined to believe.

An Islamist terror attack in Paris in the final hours of the France’s presidential election threatened to strengthen far-right contender Marine Le Pen’s hand as French voters go to the polls today. A lone gunman killed a French police officer and injured two others in the Thursday evening attack. French voters are heading to the polls today ahead of a Sunday, 7 May runoff. As Reuters puts it: “Voters will decide, under tight security, whether to back a pro-EU centrist newcomer, a scandal-ridden veteran conservative who wants to slash public spending, a far-left eurosceptic admirer of Fidel Castro or appoint France’s first woman president, to shut borders and ditch the euro.” Emmanuel Macron — the “pro-EU centrist newcomer” — is still widely expected to edge out Le Pen in the two-person runoff. Reuters also has an excellent interactive explainer here that looks at the candidates, polls, predictions and likely results.

What We’re Tracking This Week

Budget debate: The House of Representatives’ Planning and Budget Committee is expected to begin discussing the FY2017-18 state budget mid-week. The House Economics Committee is also expected to wrap up voting on the Investment Act this week.

Pope Francis is set to arrive in Cairo on Friday, 28 April for a two-day visit. Francis will meet with President Abdel Fattah El Sisi, Coptic Orthodox Pope Tawadros II, and will visit Al Azhar to participate in a conference. The full program of the Pope’s visit is available here.

The battle over who gets to pick the heads of the judicial committees may reach its climax this Wednesday. That’s when the House of Representatives is expected to put amendments to the judicial codes up for a vote. This comes despite a the Council of State rejecting the legislation over the weekend for a second time. MPs from the pro-government Support Egypt coalition, the largest in Parliament, tell Al Shorouk that it was more than likely that the law will pass. Other MPs are calling for hearings with members of the judiciary to help temper a political beef which has been growing for the past month.

Enterprise+: Last Night’s Talk Shows

The release of child rights activist Aya Hijazy and President Abdel Fattah El Sisi’s visit to Saudi Arabia were the two topics consequence on the airwaves last night.

Hijazy’s release stirred wide discussion of the fate of others wrongfully detained in Egyptian prisons, whether on the airwaves or in the local press (see On Deadline). The case prompted Hona Al Asema’s Lamees Al Hadidi to issue a rare non-economic rebuke to the government, saying, “There are dozens of people like Aya Hegazi in Egyptian prisons who are innocent” (watch, runtime: 1:33). Her lesser half also discussed the topic, noting the fanfare with which Hijazy was welcomed back home. Amr Adib called her release one of Trump’s biggest successes in his first 100 days (watch, runtime: 2:37).

On El Sisi’s visit to Saudi Arabia, Saudi political analyst Ali El Tawaty told Lamees the two governments will discuss the economic potential of Tiran and Sanafir, the handover of which to KSA is still in dispute in Egyptian courts and a divisive subject here at home (watch, runtime: 7:59).

Apart from his comments on Hijazy, Adib used the French presidential elections to angrily protest the fact that no candidate has yet announced plans to run for the presidency in Egypt (watch, runtime: 2:48).

We would like to present our First Occasional Award in the Field of Parliamentary [Redacted] (“The Magoos”) to MP Abdel Moneim Eliwa, who wants the burden that is state bureaucrats to continue on a multi-generational basis. He tells Mehwar TV’s 90 Minutes that he proposed a draft law that would allow early retirees to pass on their jobs to first-degree relatives (watch, runtime: 54:14). Truly an inspiration to nepotistic legislators worldwide.

Speed Round

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The IMF looks to be pushing Egypt to keep interest rates high in a bid to curb inflation. Egyptian policy makers need to put a special focus on inflation, said International Monetary Fund managing director Christine Lagarde at a press conference on Thursday kicking off the IMF and World Bank Spring Meetings, Reuters Arabic reports. The statement appears to be part of a push by IMF officials to see Egypt increase borrowing costs to curb its high inflation rate. Interest rates are “the right instrument” to manage Egypt’s inflation, said the director of the IMF’s Middle East and Central Asia department Jihad Azour at a press conference on Friday. “This is something that we are discussing with the authorities,” Bloomberg quoted Azour as adding.

The IMF’s push runs contrary to the opinions of a number of Egyptian officials andeconomists, who believe that slowdown of inflation in March suggests that the inflationary impact of the EGP float has started to taper off. “While headline inflation year-on-year is high, the pace of price increases month-on-month is moderating,” said Finance Minister Amr El Garhy on Thursday. “We do not believe that [an interest rate hike] would reduce inflation in Egypt” because the surge was caused by price shocks and “base effects” relating to the level of inflation a year ago, Arqaam Capital’s senior economist Reham El-Desoki tells Bloomberg. “The headline inflation rate will gradually decline as the effect of both tapers off,” she said.

The IMF’s insistence on high rates is also runs contrary to the limited effectiveness of interest rates as an instrument of policy transmission in a nation as un-banked as Egypt. Instead, high rates are driving up borrowing costs for the state and businesses alike while padding the margins of banks.

Separately, the IMF said it will also hold talks with the Ismail government overfuel-subsidy cuts. “We will need to discuss with the government the sequencing of measures to achieve their goal of eliminating subsidies on most fuel products during the program period,” Azour said.

An IMF delegation is expected to visit Egypt on 28 April to review policy implementation before deciding on dispersing the next tranche of the USD 12 bn IMF extended funds facility signed last November.

(For more on Lagarde’s comments on Egypt and the state of the global economy you can catch her presser from last Thursday here; runtime: 41:20).

Also coming from the Spring Meetings, Investment and International Cooperation Minister Sahar Nasr pushed for further investment and aid from international donors. This drive started at the Ministerial Meeting of the Group of 24, where she noted that “Egypt was in dire need for strong international financial institutions” and development partners to help achieve economic reform and sustainable growth. These goals would not be achieved without the active participation of the private sector, she added, according to a ministry statement.

Nasr emphasized this point at a meeting with leading US corporations at the American Chambers of Commerce in DC, which included representatives from Apache, ExxonMobil, Chevron, Bechtel, Lockheed Martin, Visa, Gilead Sciences, IBM, UPS, and FedEx. Apache said at the meeting that it plans to invest in 8-10 platforms and operating 90-100 wells in Egypt, in addition to its program for a widespread 3D seismic imaging of potential fields. Representatives of IBM told the minister that they plan to use Egypt as a software hub servicing the MENA market, while Gilead announced that it wants to work with the government to release the fourth generation of its hepatitis C treatments, according to a ministry statement. The companies announced that they will send a delegation of US companies to Egypt next week to look into potential new investments. Nasr appears to have met separately with GE Vice Chairman John Rice, who said that the company was interested in expanding its renewable energy projects in Egypt. They also discussed GE providing 200-300 train cars, 35% of which will be manufactured in Egypt, according to a statement from the ministry picked up by AMAY.

Talks on third tranche of World Bank loan: Nasr and Housing Minister Moustafa Madbouly also began talks for the third tranche of the USD 3 bn World Bank loan, Al Shorouk reports. Madbouly also pushed for further funding on water infrastructure projects in a meeting with Vice President of the World Bank for the Middle East and North Africa Hafez Ghanem,.

The European Bank for Reconstruction and Development (EBRD) plans to help Egypt more efficiently manage its water resources, said the EBRD’s first vice president Philip Bennett during his meeting with Nasr. He reiterated the bank’s commitment to funding green energy projects and SMEs. The EBRD and the European Investment Bank are currently in talks with the Water Holding Company to finance EUR 300 mn wastewater project in Lake Qarun, company chief Mamdouh Reslan tells Al Borsa.

After a sunny beginning, IMF drops promise to fight trade protectionism, warns ongeopolitical risks: The gathering opened with bright optimism from the often-dour Christine Lagarde, with the Financial Times noting the IMF boss saying as the meetings opened, “Spring is in the air and spring is in the economy as well.” The FT quoted two former IMF chief economists as saying that a strengthening global economic recovery is “very real,” but clouds persist: There’s “very good reasons to be optimistic about the [global] economy over the next 18 months,” but downside risk, too, from what some see as the Trump administration’s lack of interest in leading the global financial system.

By yesterday afternoon, we had come full circle in a sense: “International Monetary Fundmembers on Saturday dropped a pledge to fight protectionism amid a split over trade policy and turned their attention to another looming threat to global economic integration: the first round of France’s presidential election,” Reuters reports, quoting Lagarde as saying, “There was a clear recognition in the room that we have probably moved from high financial and economic risks to more geopolitical risks.”

The final communique of the IMF also promised that members would not engage in“competitive devaluations and will not target our exchange rates for competitive purposes.”

With high interest rates prompting the government to look abroad for lower-cost funding, the Finance Ministry is reportedly considering a USD 3 bn international bond issue sometime in 2H2017, an unnamed official from the ministry tells Al Shorouk. The source added that the ministry wants the issuance to take place as soon as possible in light of the projected rise in the budget deficit next fiscal year. Last week, the Ismail cabinet approved raising the ceiling on bond issuances this year to USD 7 bn from USD 5 bn after the Finance Ministry announced that it was planning a USD 3-4 bn bond issuance; USD 1 bn would be in the form of Shariah-compliant sukuks.

14 companies have reportedly bid on the controversial Egyptian Mineral ResourcesAuthority gold tender, which closed last Thursday, industry sources told Youm7. Canadian, Australian, English and Spanish firms were among the bidders alongside a number of Egyptian consortia, the source added. As we noted last week, the terms of the auction were broadly expected to be unpopular among international bidders.

There are jitters in the LNG market over Egypt’s planned deferral of some 25 shipments of LNG this year and more in 2018, various sources tell Reuters. The nation’s appetite for LNG imports will decrease further once Egypt’s major gas developments come online, starting with the supergiant Zohr field this fall. Only a small portion of the deferrals have so far been agreed with Egypt’s LNG suppliers so far.

Egyptian-American charity worker Aya Hijazi arrived in the US on Thursday, two days after she was released from pretrial detention in Egypt, The Washington Post reports. Hijazi was flown back to the US on a military aircraft and was escorted by a military aide to US President Donald Trump. Hijazi met with Trump and Ivanka Trump at the White House on Friday. The US president announced the visit in a video reel, complete with God Bless the USA as background music (watch, runtime 2:00). Hijazi and her brother, Basel, also met with Trump aides Jared Kushner and Dina Habib Powell. WaPo also published a video covering Hijazi’s White House visit, minus the nationalist soundtrack (watch, runtime 1:05).

Trump maintains that the US did not strike an agreement Egypt to secure Hijazi’s release, telling the Associated Press that during President Abdel Fattah El Sisi’s visit to Washington earlier this month, “I said I really would appreciate it if you could look into this and let her out.” The story is getting plenty of ink in the foreign press, including the Wall Street Journal (here and here), the Financial Times and Reuters. As expected, it is also the leading story on Egypt this morning. We have more in Egypt in the News (below).

MOVES- Orange Middle East and Africa (OMEA) announced the appointment of Atef Helmy, Orange Egypt’s chairman and a former CIT Minister, as a senior advisor to OMEA. Helmy’s post as chairman of Orange Egypt will be occupied temporarily by Bruno Mettling, chairman and CEO of OMEA, until a chairman is appointed in the coming months. Orange Egypt also approved the resignation of former Investment Minister Osama Saleh from the board and having board member Michel Monzani become vice chairman.

EARNINGS WATCH- Orascom Hotels & Development reported a consolidated net loss of EGP 499.5 mn in 2016 compared with a net profit of EGP 206.1 mn the previous year. The company’s bottom line was weighed down by FX losses, according to a regulatory filing.

Spanish police arrested yesterday a 43-year-old Egyptian man allegedly belonging to an international terror organization with the help of information from German and Egyptian authorities, the Associated Press reports. The man, whose name was not disclosed, was previously detained during a raid on a terrorist cell by German authorities in 2002. Spain will begin procedures to extradite the suspect to Egypt.


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Egypt Holiday Photo of the Day

Today’s Egypt Holiday Photo of the Day is of The Karnak Temple in Luxor. About 30 pharaohs contributed to the buildings at Karnak Temple in Luxor, enabling it to reach a size, complexity and diversity not seen elsewhere. The image was shot for CIB’s 2016 Annual Report (microsite and print edition) by Zeina Abaza at Inktank Communications, which has produced the bank’s annual report for the past eight years.

The Macro Picture

Emerging markets are thriving, but “peak China” remains a risk: “Capital flows to emerging markets have turned positive for the first time since the second quarter of 2014, the Financial Times reports, saying “emerging markets attracted a net USD 28.6 bn of capital in the first quarter of 2017, a sharp improvement on the USD 238 bn that was shipped out of emerging markets in the last three months of 2016.” Even the New York Times, which can be relied on to pay scant attention to EM, is getting in on the act with a piece declaring that “Emerging markets are bouncing back from a six-year slowdown.” The note of caution: “anxieties that the world’s second-largest economy may have peaked,” the Financial Times says after a look at the most recent data.

Egypt in the News

Aya Hijazi’s return to the United States and her meeting with President Donald Trump are far and away the most widely covered stories on Egypt in foreign outlets this morning. For the uninitiated, the Washington Post’s Louisa Loveluck gives a rundown of Hijazi’s three-year ordeal, in which “her American citizenship did not seem to count for much.”

Our friends Ahmed El Alfi and Khaled Ismail get some love from the Financial Times this morning. Heba Saleh turns in a nice piece in which El Alfi (wearing his Flat6Labs hat) makes the point that, “People with corporate experience are leaving careers to start companies. They are coming to us for funding at a more mature stage. Definitely, quality is improving and the support system around new companies is improving.” Ismail, meanwhile, wants the state to make it easier to start and shut-down companies.

Other coverage worth a skim included:

  • Egyptian film Clash is a gripping account of the chaos that swept Egypt in 2013 and is “also a work of fiendish formal brilliance,” Danny Leigh writes in The Financial Times, giving it a 4-out-of-5 star rating. Tara Brady gives the film a similar rating in the Irish Times, saying it “is a very fine picture, worthy to stand shoulder-to-shoulder with such tricky, similarly themed films as Lifeboat and Lebanon.”
  • The St. Catherine Monastery is the oldest continuously occupied monastery in the history of Christianity, Guilhem Dubernet writes in La Croix.
  • Pork is not illegal in Cairo, “but you have to know a guy,” Adam Koppeser writes in Extra Crispy. “Cairo offers other fixes. There are pork butchers scattered throughout the city … You can get your hands on locally processed pork there, but it has mixed reviews on flavor,” he writes. H/t Rachel W.

On Deadline

Egyptian pundits are using the Aya Hijazy case to point to others who have been wrongfully locked up. Among these was Fahmy Howeidy, who writes for Al Shorouk that activist Egyptians are forced to choose between turning a cold shoulder to public issues, receiving the citizenship of a country that can protect them, or leaving the country altogether.

Worth Watching

The cheapest-ever tourism promotion campaign just fell into our laps: An Australian couple who visited Egypt early last year and “fell in love with the country” made a holiday video documenting their trip to the beat of the most famous song about Egypt — Walk Like an Egyptian. In the video, the duo is seen enjoying several of Egypt’s top attractions, including the Giza Pyramids, snorkeling in the Red Sea, and — of course — a shisha night. Little did they know that, more than a year later, their video would go viral on social media as the least-expensive tourism promotion campaign we didn’t even see coming (watch, runtime 3:19).

Diplomacy + Foreign Trade

US Defense Secretary Jim Mattis met with President Abdel Fattah El Sisi on Thursday and “addressed aspects of military and security cooperation between the two countries,” AFP reports. Mattis reiterated US commitment to reinvigorating military cooperation with Egypt and broadening its prospects. The talks also touched on the military’s counterinsurgency in the Sinai Peninsula. AFP says “the Pentagon is also concerned with preventing extremists from crossing Libya’s porous border with Egypt and the reported presence of Russian troops in Egypt’s western desert, which Cairo has denied.” When Mattis met with El Sisi at the Pentagon during his trip to the Pentagon, he had said, “I am among those who believe that no country is more critical to the long-term stability of the Middle East than Egypt,” according to Stars and Stripes. Mattis flew to Israel and Qatar after his brief trip to Egypt.

President Sisi met with President of the Democratic Republic of the Congo Joseph Kabila in Cairo yesterday to discuss bilateral ties and increasing economic cooperation between the two countries, Al Masry Al Youm reports. El Sisi also met yesterday with Oman’s Foreign Affairs Minister Yusuf bin Alawi to discuss regional developments and the Egyptian-Omani joint committee meeting set to be held in Muscat this year, according to an emailed statement.

Shoukry, Sudanese FM meet for political consultation: Foreign Minister Sameh Shoukry and his Sudanese counterpart Ibrahim Ghandour met in Khartoum on Thursday for the joint political consultation meeting that was originally slated for last week, according to a ministry statement. During the meeting, the two ministers agreed on regulating the media’s coverage of topics pertaining to the two countries’ relations. Shoukry and Ghandour also agreed to coordinate in negotiations over the Grand Ethiopian Renaissance Dam, and discussed other issues of regional importance.

Notably absent from the statement is any mention of the tensions over the Halayeb and Shalateen region, considering that Sudan filed with the UN its maritime border delineation which includes the Halayeb Triangle, Sudan Tribune reported on Friday. The statement also does not mention the trade spats between the two countries.

Shoukry, Lavrov to meet at end of May: Foreign Minister Sameh Shoukry and his Russian counterpart Sergey Lavrov agreed during a phone call on Friday to hold a meeting in Cairo at the end of May with the two countries’ defense ministers, according to a ministry statement. The statement provided no details of the meeting’s agenda.

France awarded former Prime Minister Ibrahim Mahlab the National Order of Merit for his role in supporting Egyptian-French relations, Al Masry Al Youm reports. The ceremony was held in Cairo at the French embassy.


As funding flows into solar power projects, Egyptera considers permanent license for FiT projects

International finance institutions, including the EBRD, IFC, and African Development Bank, agreed to preliminary funding approvals worth USD 400-800 mn for feed-in tariff (FiT) phase two projects, sources tell Al Borsa. The Arab Fund for Economic and Social Development will also provide USD 85 mn for a 50 MW solar power plant project in Kom Ombo, according to a statement. Separately, Sterling & Wilson, Shanghai Electric, TBEA, and two other unnamed companies were prequalified for a project to build a 20 MW solar power station, sources tell Al Borsa. This followed Norway’s Scatec Solar signing of a 25-year power purchasing agreement last week to supply energy from six solar power plants that have a combined production capacity of 400 MW. KPMG’s corporate intelligence practice said the Benban photovoltaic plant would be the world’s largest, if successful. This comes as the Egyptian Electric Utility & Consumer Protection Agency (Egyptera) will discuss tomorrow granting permanent licenses to solar power companies that have signed FiT agreements, Egyptera sources tell Al Borsa. The companies that will be granted the license include FAS Energy, Alef Solar, and Infinity Solar.

Electricity Ministry delays plans for wind farm tender over price disagreements

The Electricity Ministry delayed plans to issue a tender due to take place this year for a 2-2.2 GW wind farm projects after failing to reach an agreement with GE, Siemens, and Vestas, sources tell Al Borsa. The disagreements were apparently over the ministry’s insistence on a FiT rate of USD 0.046 per kWh, which the three companies had felt was too little. GE had offered to build a 2 GW wind farm, while Vestas was bidding to build a 2.2 GW wind farm for USD 2.2 bn. Sources added that the ministry felt less inclined to accept their offers considering that it has signed for a number of agreements for wind farms with capacities of 250 MW with other companies including from Toyota, Orascom Construction, and Engie.

Carbon Holdings awards Bechtel two petchem projects contracts

Carbon Holdings awarded Bechtel two petrochemicals projects contracts in Egypt, Bechtel announced. The first contract is one to provide project management services for the Tahrir Petrochemicals Complex at Ain Sokhna and the other is to build two new polypropylene units at an adjacent site. “In its project management role, Bechtel will have oversight of project execution and contractor performance on what will be the largest petrochemicals complex in Egypt.” Carbon Holdings Chairman and CEO Basil El Baz says “approximately 20,000 Egyptians will be directly employed during the peak construction phase with approximately 3,000 engineers and technicians being employed during the operations phase.”

Basic Materials + Commodities

Aton Resources announces results of drilling Hamama West

Aton Resources said the first four drill holes at the Hamama West field all intersected mineralization with drill hole HAD-004 returning 22.2 meters of 2.77 grams per tonne gold equivalent. Aton says “HAD-004 is one of the highest-grade and deepest drill holes that Aton has returned from Hamama West to date.” CEO Mark Campbell says “one of the primary goals of this drill program was to demonstrate the potential to grow resources at Hamama West and today’s results confirm that potential.” There was also visible gold found at Bohlog, another field also located in the Abu Marawat Concession.

Study on local tobacco cultivation underway to be completed by mid-May

A comprehensive study of tobacco cultivation in Egypt will be ready by mid-May, Chemical Industries Holding Company chairman Yasser El Naggar says, Ahram Gate reports. Cultivation in Wadi Al Natrun is being considered. On smuggled cigarettes, El Naggar says they represent 3% of all cigarettes consumed locally, down from 12% in 2011. Philip Morris International-Egypt had put the current number at 12%, we had noted.

China’s Angel Yeast Company to establish USD 40 mn yeast factory in Beni Suef

China’s Angel Yeast Company is planning to establish a USD 40 mn yeast factor in Beni Suef, Al Borsa reports. The company had set up another factory in Egypt with an investment value of USD 80 mn in 2013, according to head of sales Ahmed Azazy.

Health + Education

AFD lends Health Ministry EUR 30 mn to improve healthcare, Japan grants Egypt USD 18 mn to build new Abou El Reesh hospital

The French Agency for Development (AFD) is giving Egypt a EUR 30 mn loan to improve healthcare services, Health Minister Ahmed Rady says, Al Mal reports. The facility is earmarked for equipment and training in Ismailia, Suez, Port Said, Sharqiya, and Daqahliyah. AFD is also providing the ministry a EUR 1 mn grant. Meanwhile, Japan granted Egypt USD 18 mn to build the new Abou El Reesh hospital in Cairo, Al Mal reported. Dai Nippon Construction will be the project’s contractor. Construction is expected to begin on 15 May and be completed over 17 months.

Banking + Finance

EETC to sign EGP 18 bn loan agreement with NBE, Banque Misr this week

The Egyptian Electricity Transmission Company (EETC) is expected to sign an EGP 18 bn loan with the National Bank of Egypt and Banque Misr this week, EETC head Gamal Abdel Rehim tells Al Borsa. The loan is one of two the banks are arranging to fund expansions to handle a production capacity of 18 GW by 2018.


Hajj demand to fall by at least 30% as prices go up

The number of applicants for hajj is expected to fall by 30-40% y-o-y as prices increased, tour operators told Al Borsa. They blame the cost increases entirely on the EGP devaluation. A source tells Al Borsa the cheapest hajj package will be by bus and is expected to cost a minimum of EGP 40k.

Ras Sudr Investors Association plans to establish medical tourism resort

The Ras Sudr Investors Association looking into the feasibility of a medical tourism resort in Ras Sudr featuring sulfuric springs and other natural medical remedies, association head Ali El Sherbany tells Youm7.

JWT to launch tourism campaign in Europe by month’s end

JWT is planning to launch a tourism promotion campaign in Europe by the end of the month, Tourism Development Agency head Hisham El Demery said, Al Borsa reports, targeting Germany, Italy, and Ukraine. The TDA is also sending a delegation of Egyptian tourism and aviation companies to four Indian cities next month to attract Indian tourists, El Demery tells Al Shorouk.

Hurghada-bound Thomas Cook flight returns to Manchester due to technical fault

A Hurghada-bound Thomas Cook flight with 219 passengers on board was forced to return to Manchester one hour into its flight “as a precaution due to a possible technical fault,” The Sun reports.

Other Business News of Note

Sawiris in North Korea

Naguib Sawiris was reportedly in Pyongyang and met with senior officials of the Workers Party of Korea, RT reported on Saturday, citing North Korean news sources. Details of what was discussed remains scant, but it is likely discussions included talks of the mess with Koryolink.

Legislation + Policy

Amendments to Anti-trust Act to combat subsidies fraud

The government has apparently written up amendments to the nation’s anti-trust act to toughen penalties for retailers who defraud the subsidy system. The State Council has completed its review of the amendments, according to Al Borsa. The Council has also completed reviewing the executive regulations of the Civil Service Act and has received the Universal Healthcare Act for review, the newspaper reports.

National Security

Airstrikes kill 19 militants including three Daesh-affiliated leaders

Airstrikes killed 19 militants, including three leaders of Daesh affiliate Ansar Bayt Al Maqdis, the military said in a statement on Thursday, two days after an attack on a checkpoint in St. Catherine that left one policeman dead and four others injured.

On Your Way Out

The UN FAO launched WaPOR, a new Google-powered open-access database it developed, that enables countries to easily monitor how efficiently farms use water, allowing for improvements in irrigation and food production. “The tool allows users like governments or farmers to spot areas where water is used inefficiently and take action by changing the irrigation system or switching to a more water-efficient crop, FAO said,” according to Reuters. One thing to look forward to: “FAO said more detailed information on countries facing water scarcity, including Mali, Ethiopia, Jordan and Egypt, will be made available later this year.”

Artists and social media celebrities are singing Mohamed Mounir’s Ally Sotak Bel Ghona in sign language in a viral video (runtime 1:30). It is part of a donation campaign for hearing-impaired children by Pick a Street and Waslet Kheir. On a related PSA note: You can teach your baby as early as six months of age to communicate their needs using sign language.

The markets yesterday

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EGP / USD CBE market average: Buy 18.0474 | Sell 18.1503
EGP / USD at CIB: Buy 18.05 | Sell 18.15
EGP / USD at NBE: Buy 17.95 | Sell 18.05

EGX30 (Thursday): 12,905 (+0.1%)
Turnover: EGP 880 mn (21% below the 90-day average)
EGX 30 year-to-date: +4.5%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 0.1%. CIB, the index heaviest constituent and among today’s top performing ended up 0.7%. EGX30’s top performing constituents were: Orascom Construction up 5.0%, and Domty up 1.7%. Thursday’s worst performing stocks included: Cairo Oils and Soap down 2.8%, Pioneers Holding down 2.1%, and Egyptian Iron & Steel down 1.9%. The market turnover was EGP 880 mn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +119.2 mn
Regional: Net Short | EGP -37.8 mn
Domestic: Net Short | EGP -81.4 mn

Retail: 56.6% of total trades | 55.4% of buyers | 57.8% of sellers
Institutions: 43.4% of total trades | 44.6% of buyers | 42.2% of sellers

Foreign: 27.4% of total | 34.2% of buyers | 20.7% of sellers
Regional: 7.3% of total | 5.1% of buyers | 9.4% of sellers
Domestic: 65.3% of total | 60.7% of buyers | 69.9% of sellers

WTI: USD 49.62 (-2.15%)
Brent: USD 51.96 (-1.94%)
Natural Gas (Nymex, futures prices) USD 3.10 MMBtu, (-1.84%, May 2017 contract)
Gold: USD 1,289.10 / troy ounce (+0.41%)

TASI: 6,899.0 (-0.7%) (YTD: -4.3%)
ADX: 4,521.6 (-0.2%) (YTD: -0.5%)
DFM: 3,469.8 (-1.0%) (YTD: -1.7%)
KSE Weighted Index: 408.9 (0.0%) (YTD: +7.6%)
QE: 10,241.6 (-0.5%) (YTD: -1.9%)
MSM: 5,474.4 (-0.7%) (YTD: -5.3%)
BB: 1,334.4 (-0.4%) (YTD: +9.3%)

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22-24 April (Saturday-Monday): Food Africa, Cairo International Convention Center, Cairo.

24-25 April (Monday-Tuesday): Renaissance Capital’s Egypt Investor Conference, Cape Town, South Africa.

25 April (Tuesday): Sinai Liberation Day, national holiday.

25-26 April (Tuesday-Wednesday): MENA New Energy conference, Hyatt Regency, Dubai.

26-27 April (Wednesday-Thursday): Corporate Governance Case Study Workshops by the Egyptian Private Equity Association and IFC.

27 April (Thursday): Shalakany law firm’s VAT & the New Taxation Landscape conference, Nile Ritz Carlton, Cairo.

28-29 April (Friday-Saturday): Pope Francis visits Cairo.

28 April – 08 May (Friday-Monday): IMF delegation visit to Egypt to assess economic reforms.

30 April – 03 May (Sunday-Wednesday): Cement & Concrete 2017, Riyadh International Convention & Exhibition Center, Saudi Arabia.

01 May (Monday): Labor Day, national holiday.

05-07 May (Friday-Sunday): Egypt Property Show, DWTC, Dubai.

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.

20-23 September (Wednesday-Saturday): 2017 Automech Formula car expo, Cairo International Convention Center, Nasr City, 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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