Blumberg seeks resolution, but Tom Cruise doesn’t want us to “open” the mummies

Is yours one of the 1.3 mn computers believed to still be vulnerable to WannaCry, the ransomware infection that swept the globe over the weekend? The Financial Times reports that British intelligence has warned businesses must brace themselves for “further cyber-attacks this week on a potentially ‘significant scale.’” Some 10k businesses and other organizations have been hit so far in 150 countries, the Verge reports, and things could get worse today when vulnerable users fire up their word terminals as the western work week resumes, security analysts are warning. The UAE’s Comae Technologies is blogging in full-geek detail about the attack (and getting plenty of media attention for it) and is now warning that two new variants of the ransomware are now in the wild.

Let the budget debate begin: Finance Minister Amr El Garhy’s 2017-18 budget goes up for discussion at the House Budget Committee today.

On the use of slush funds: Finance Ministry officials will appear before the House of Representatives’ Economics Committee today to brief MPs on the latest on the so-called “special revenue” funds (also known as “special accounts” or “private funds”), Al Mal says. The House is looking to draft legislation that would govern the slush funds and link them directly to state coffers. The House has for some years now questioned the practice of the special accounts, which are funded with revenues separate from the normal budget process, maintained at the central bank, and which can reportedly be spent on a minister’s authority with little oversight. See past examples here (last August) and here (last November). MPs complained earlier this year that some ministries were refusing to be transparent about special funds under their control.

Pitching for investment in Beijing: Trade and Industry Minister Tarek Kabil and Investment Minister Sahar Nasr were plugging investment in Egypt yesterday at Beijing’s Belt and Road Forum, according to Al Ahram. But there’s trouble in Paradise: India opted not to send an official delegation to the gathering, “and instead criticised China’s global initiative, warning of an ‘unsustainable debt burden’ for countries involved,” Reuters reports. While a handful of Indian academics apparently made the pilgrimage, an Indian foreign ministry spokesman “said India could not accept a project that compromised its sovereignty.” The newswire said India “is incensed that one of the key Belt and Road projects passes through Kashmir and Pakistan.” Meanwhile, General Electric, Honeywell and Citi are among the big US corporations that want in on Belt and Road projects, the New York Times writes.

Is Donald Trump planning a sweeping shuffle of leading West Wing personalities? Writing that The Donald is “frustrated and angry at everyone,” Axios’ typically well-sourced Mike Allen writes that the president is “considering a ‘huge reboot’ that could take out everyone from Chief of Staff Reince Priebus and chief strategist Steve Bannon, to counsel Don McGahn and press secretary Sean Spicer.” Allen cites unnamed White House sources, and his piece is causing a stir among the punditocracy in DC this morning. Allen adds that Secretary of State Rex Tillerson is just about the only cabinet member with whom Trump is happy at the moment.

PSA on a slow news morning: All seven seasons of Mad Men are on Egyptian Netflix. So, too, is the full second season of the Netflix original Sense8, for the more adventurous of you. We’re adding both to the queue for Ramadan which, incidentally, begins in something like 11 days.

An International Labor Organization delegation arrived in Cairo on Saturday for talks with government officials on upcoming legislative reform, especially the new Labor Act currently before the House of Representatives.

House committee gives preliminary nod to Daba’a nuke plant: The House of Representatives’ Energy Committee gave a preliminary nod to the Daba’a nuclear power plant agreement with Russia’s Rosatom on Sunday, MP Hamada Ghallab tells Al Mal. The committee will deliberate on the agreement over the next few days before moving it over to a plenary session for a vote.

Iranians go to the polls to elect a new president on Friday. The contest so far sees incumbent Hassan Rouhani enjoying a lead over both hardliner Ebrahim Raisi (backed by the powerful Revolutionary Guard) and conservative Tehran mayor Mohammad Bagher Ghalibaf. There will be a runoff on Friday, 26 May if no candidate wins a majority this coming Friday. Reuters explains that the Guard is backing Raisi because it’s looking ahead to the real seat of power — Supreme Leader — but it seems Rouhani still enjoys a commanding lead at the polls. He also has the backing of Mohamed Khatami, the high-profile reformist and “figured head of the reform movement” who was president from 1997 to 2005, the Financial Times reports. The downside: There are signs voter turnout could be low, a warning sign for any reforming candidate in Iran. The Los Angeles Times has a primer on the elections, and the BBC has profiles of six of the 12 candidates.

The IMF is expected to deliver the second tranche Egypt’s USD 12 bn extended facility at the end of the current fiscal year in late June, Finance Minister Amr El Garhy said on Sunday, according to Al Mal. Disbursement of the USD 1.25 bn tranche awaits the approval of the IMF’s executive board on a staff-level agreement that IMF Egypt Mission Chief Chris Jarvis signed with the government last Thursday, after certifying that the country’s economic reform agenda is moving in a generally positive direction.

President Abdelfattah El Sisi’s press conference in Qena was front and center on the airwaves last night, but the unexpected highlight of the night was the surprise appearance of Mahmoud Mohieldin. (We have additional coverage of the president’s remarks in Speed Round, below, and you can watch his full speech and the Q&A session here.)

Kol Youm’s Amr Adib aired a clip of a citizen complaining to El Sisi about not yet having received land promised for agricultural projects (watch, runtime: 5:32), which Adib took as underscoring that we are world leaders in freedom of speech: “There’s no other country in the world where a citizen can speak to their president directly like here” (watch, runtime: 6:30).

Adib also aired a report about the Tahya Misr Fund providing seed financing to a venture that’s setting out to build a solar-powered car in Zewail City (watch, runtime: 3:47).

On Hona Al Asema, Lamees Al Hadidi spoke to Supply Minister Ali El Moselhy aboutthe 25 new high-tech wheat silos El Sisi inaugurated on Sunday, which were paid for by the UAE and can accommodate up to 3.5 mn tonnes of wheat. The silos are designed to protect wheat from weather changes and equipped with control units that allow operators to monitor the sifting process (watch, runtime: 7:07).

Lamees also hosted Transport Minister Hisham Arafat, who talked mostly about the costs of building new roads under the national roads project (around EGP 70 mn per kilometer). According to Arafat (watch, runtime: 46:04).

Yahduth fi Masr’s Sherif Amer hosted former investment minister (and Enterprisefavourite) Mahmoud Mohieldin, who is now a senior vice president at the World Bank group. Mohieldin had very nice things to say about the Ismail government’s economic reform agenda, which he described as “crucial,” accusing previous government of wasting so much on energy subsidies that would have been better allocated to healthcare, education, infrastructure development and the like. Mohieldin also said that Egypt can benefit from the examples of countries like Korea and Singapore and felt confident that the country’s rating on the Doing Business Index would improve over the next two years thanks to legislative reform.

Protecting low- and mid-income earners during economic reform is also of the utmostimportance, Mohieldin said, through salary raises, healthcare and insurance schemes, and improvements to public transportation infrastructure.

Blumberg Grain seeks resolution with Egypt: Prime Minister Sherif Ismail has tasked the Justice Ministry’s Arbitration and International Disputes to assess Blumberg Grain’s demand for the government to disburse the remainder of what is owed for the first phase of the shouna development project, Al Borsa reports. A source told Al Borsa that Blumberg Grain has submitted an official request to settle its dispute with the Supply Ministry and to receive what it is owed for the first phase. We noted in February that “the government failed to get phase one of Blumberg Grain’s shouna program up and running in time for the harvest and was forced to then rely on what state investigators said were ‘unscrupulous’ private storage facilities, the operators of which were later investigated by the Prosecutor General’s Office.” However, Al Borsa says that Blumberg could resume its operations in Egypt if the dispute is settled and its representatives have already met with President Abdel Fattah El Sisi during his most recent trip to the US. Blumberg Grain has reportedly refused to fall under the jurisdiction of the Supply Ministry and asked for the only oversight over its operations to be from the Armed Forces’ Engineering Authority. Sources added that the Justice Ministry’s representatives are reviewing Blumberg Grain’s request and will move forward with a response “within days.”

CIB has agreed to sell a 13.7% stake in CI Capital, CI Capital CEO Mahmoud Attalla said yesterday, according to Reuters. Attalla said agreements were reached to sell 10% to one local investor and 3.7% to another, without naming either of the buyers. CIB had completed the sale of 74.75% of CI Capital’s shares to a consortium of investors in March for EGP 710.16 mn. Attalla said CI Capital aims to increase its assets under management by 25% to EGP 10 bn this year and is planning a capital increase in 1Q2018. “CI Capital also plans to launch a company in the fourth quarter of this year that will focus on funding microfinance projects, Attalla said.” Head of Brokerage Karim Khadr said the investment bank is also in talks with a Saudi partner to execute transactions for foreign clients there directly and expects the agreement to close within a month. A similar agreement in the UAE is also expected to close in 4Q2017, Khadr adds, according to Al Borsa. He notes that CI Capital has applied for licences to allow it to execute trades in Abu Dhabi and Dubai. Attalla added that CI Capital is also looking to expand to South Africa within two years.

IPO WATCH- Green Valley Group is looking to list on the EGX in the upcoming period, Chairman Sayed El Sammak told Al Mal. Green Valley plants, processes, and exports peanuts and owns agricultural, cleaning and sizing, processing, financial, and trading subsidiaries. There is no exact date for the planned listing, but El Sammak says it would be by 2018 at the least, and that the company is nearing an agreement with EFG Hermes to run the transaction. The company will use the proceeds of the capital increase to expand its investment in land reclamation and purchase land in East Owainat. According to Al Mal, the El Sammak family are the largest shareholders of Green Valley. Other shareholders include Saudi investors Abdul Monem Al Rashed and Walid Abunamay, who control 23% and 11%, respectively, and Catalyst Partners, which holds 3% of Green Valley’s shares.

M&A Watch- The Egyptian Financial Supervisory Authority (EFSA) greenlit Cleopatra Hospital’s acquisition of 46.32% of Cairo Specialized Hospital on Sunday, Al Mal reports. The transaction will bring Cleopatra’s total holdings in Cairo Specialized Hospital to 99.04% from 52.72% today.

M&A Watch- Qalaa Holdings announced it completed the sale of 100% of its stake in ASEC Cement Algeria to an unnamed Algerian investor for an estimated USD 60 mn. Qalaa Holdings says it indirectly owned 37% of ASEC Cement Algeria’s shares.

M&A Watch- Shalakany Law announced it assisted Engie as the sole sell side legal advisor in the transaction to sell its Egyptian E&P assets to Neptune Oil & Gas. Private equity-backed Neptune had agreed to acquire a majority stake in Engie’s E&P assets globally for USD 3.9 bn on Thursday, Reuters reported, with the expectation that the deal, which includes assets in Egypt, Algeria, Germany, and the North Sea will close in 1Q2018. Aly El Shalakany, the lead partner from Shalakany acting on the transaction, said: “We are very pleased to have successfully assisted Engie, a long standing client of the firm, with this strategic disposal, which marks a key step in its shift away from oil and gas to more regulated businesses in the power sector.”

EARNINGS WATCH– GB Auto swung to a net loss of EGP 154.5 mn on revenues of EGP 2.96 bn in 1Q17 compared a net profit of EGP 28.6 mn a year ago. GB Auto CEO Raouf Ghabbour said that while the market was paralyzed during January and February, “March gave us a sign that consumers might be willing to adjust to new price levels. A targeted round of promotions during the month saw volumes pick up to c.50% of what they’ve been historically — a huge lift from figures coming out of January and February.” The company’s motorcycles and three-wheelers, tires and financing businesses, among others, all performed well. The company’s full earnings newsletter is here (pdf).

Property developer MNHD reported a surge in both its top and bottom line, with 1Q17 net income up nearly 500% to EGP 407 mn on revenues of EGP 752 mn. ““In our first full quarter post the float of the Egyptian Pound, we are seeing strong signs that demand for real estate remains resilient as evidenced by our ability to continue driving revenue and net profit growth period-on-period,” said MNHD CEO Ahmed El Hitamy. “Egypt’s favorable demographics and consumers’ continued confidence in property as a safe investment have negated fears that the market would be adversely affected post the float. On the contrary, now priced at a discount compared to regional peers, Egypt’s real estate offerings are becoming increasingly attractive to Egyptian expatriates alongside strong local demand.” MNHD’s earnings release is here in full (pdf).

Also reporting earnings:

• Oriental Weavers recorded a 128% y-o-y increase in net income to EGP 235 mn in 1Q2017. The company’s net sales increased by 73% y-o-y to EGP 2.52 bn. Oriental Weavers says it is moving ahead “with plans to add eight to ten state-of-the-art weaving looms to meet international demand” and expand its product range.
• Amer Group reported a slight decrease of 5% y-o-y in consolidated net profit to EGP 64 mn in 1Q2017, with revenues increasing by 11% y-o-y to EGP 603 mn, according to the company’s earnings release.
• Porto Group Holding reported a 193% y-o-y increase in consolidated net profit to EGP 83 mn in 1Q2017. Revenues rose by 123% y-o-y to EGP 426 mn.

President Abdel Fattah El Sisi addressed a range of economic and political issues yesterday and took questions from audience members as he inaugurated yesterday development projects in Qena. El Sisi reiterated the importance of pressing ahead with economic reforms such as the EGP float and the introduction of new taxes and said the short-term difficulties citizens face are the price we will pay for long-term benefits.

The state is struggling to keep up with spikes in the consumption of basic commodities including wheat, he said, but is working to keep price increases under control. The president also said that the government should provide citizens with the full truth on the state of the economy to keep them in the loop with and understand all related developments.

The president also ordered the Interior Ministry and Armed Forces to regain control of illegally acquire state lands by the end of the month, saying governors are responsible for ensuring these violations do not happen in the first place.

On the political front, El Sisi called for comprehensive regional cooperation to ensure sustainable development in the area. You can watch the ceremony and Sisi’s remarks in full here (runtime 2:57:46).

The Canadian Embassy in Cairo issued a statement yesterday denying changes to Canada’s policy on refugee protection claims from Egypt and other countries, saying the information is “fake and inaccurate.” The embassy’s statement comes after a policy announcement on what appears to as to be the legitimate site of the Immigration and Refugee Board of Canada (IRB) said claims for refugee protection from Canada filed in Egypt and other countries are eligible for expedited processing. We’ll poke into this further today, as the TLD for the website in question (.gc.ca) comes back as entirely legitimate on first glance when you run a Whois. We’re presuming the issue is that someone, somewhere has mistaken the IRB’s statement as meaning that an Egyptian can apply for refugee status from Egypt, which by definition isn’t the case.

Are the Stanley cabins in Alexandria getting a facelift or being torn down? Citizens of Alexandria are up in arms as rumors circulate that the state is tearing down the old Stanley cabins in Alexandria. Images of the broken-down cabins went viral on social media platforms on Sunday, but authorities maintain that they’re simply performing maintenance and renovation work, which entailed tearing down some of the cabins that were in really bad shape according to AMAY.

On a slow news morning for Egypt in the foreign and domestic press alike, it’s all about the mummies. Everyone from NPR to the Daily Mail (both of them have excellent photos) is running with the story, and it beats the heck out of the terrorism / human rights / whatever it is story du jour. Oh, and Tom Cruise, who is taking Brendan Fraser’s job in a reboot of The Mummy, is warning us all to “be careful opening those things.”

Meanwhile, Jean-Paul Pigat, founder and head of research at Lighthouse Research (and former senior economist at Emirates NBD, whom readers will remember from the Emirates NBD PMI), speaks with Bloomberg about his outlook for Egypt and inflation. (Watch, runtime: 3:48)

And from the left: “In their efforts to gain security, many Egyptians have revolted against accountability and human rights, yet they have not attained that security they strive for,” Wael Eskandar writes in Open Democracy.

If President Abdel Fattah El Sisi needs one thing, it’s a body whose sole mandate is to follow up on his directions and the government’s promises, Seliman Gouda says in a column penned for Al Masry Al Youm. El Sisi often orders officials to take action on certain issues, but there’s an accountability gap when ministers and state employees don’t follow through. Gouda points to the EEDC in 2015 and the national youth conference held in Sharm El Sheikh as two events during which officials made big promises that have yet to materialize. He says that too much weight is being placed on these events simply taking place rather than tangible outcomes.

Sarah Richard, author of the Coffee with A Slice of Life blog, says travelers should visit Egypt. She made a video of her list of 10 things to know about the country, including handy tips like: “your money is going to go very, very far [in Egypt], especially if you are from the UK” and that “Cairo is mental,” but you should “embrace Cairo” (runtime 04:41). She recently wrote about her “move” to Egypt saying “yes, I’m a female travelling around Egypt alone, and no you should not be worried.”

Have we ended our spat with Sudan? Egypt and Sudan have reached an agreement regarding their citizens’ residency, freedom of movement, and visa costs, according to Ahram Online. The agreement included Egypt agreeing to return confiscated property to Sudanese miners who were arrested in March 2015, then pardoned by President Abdel Fattah El Sisi in August 2015. Egyptian officials also stressed during the meeting that “any Sudanese person who has been living in Egypt since before 1995 is treated here like an Egyptian citizen.” The agreement also maintains visa exemptions for diplomatic and special passport holders. Meanwhile, “visa exemptions will cover Egyptian and Sudanese citizens who have valid residency in the Gulf, US, Canada, European countries and Australia.” Ahram Online adds that “both sides agreed to provide six-month visas free of charge to male, regular passport holders, which can be renewed for another six months.” Women received a visa exemption. Both sides also agreed to “consider cancelling retroactive fees for people currently residing in either country who have overstayed their visas.”

GERD is giving us GERD: Egyptian, Sudanese, and Ethiopian experts are meeting in Addis Ababa this week to discuss the initial reports of global consultants on the impact of the Ethiopian Grand Renaissance Dam (GERD) on countries further downstream, Ahram Online reported on Sunday.

The Egyptian-Saudi Business Council postponed its board meeting to sometime after May, Faisal Islamic Bank President Abdel Hamid Abou Moussa said on Sunday, according to Al Borsa.

Somali President Mohamed Abdullahi “Farmajo” Mohamed is reportedly visiting Egypt this week, according to Somali publication Mareeg. This comes after Prime Minister Sherif Ismail handed Farmajo an invitation from President Abdel Fattah El Sisi at a meeting at the 2017 London Somalia conference.

The Oil Ministry is increasing its daily output of gasoline and diesel to meet additional demand expected during Ramadan and the summer months, Al Masry Al Youm reports. Gasoline supplies will grow 20% from their current levels to 25 mn liters a day and diesel supplies by 10% to 55 mn liters, Oil Minister Tarek El Molla said. The ministry will also increase the volume of natural gas available to power stations to around 132 mcf/d to ensure they can manage peak demand.

Saudi Arabia’s AlKhorayef Group is set to double its investments to EGP 4 bn by 2022 with a focus on the energy sector, Managing Director Mohammed Alkhorayef tells Al Borsa. The company is negotiating with the Arab Authority for Manufacturing to cooperate in electricity generators production and in solar energy by early 2018.

The government is looking to cut the gap between the supply and consumption of wheat in half to 25% within a few years, Al Borsa reports. Supply Minister Aly El Moselhy says this will begin with increasing the yield of wheat fields domestically to 22 ardebs from 18. The Ministry will also work on reducing the amount of wheat wasted, rationalise consumption nationwide, and increase storage capacities.

Egypt needs to increase its output of fava beans by 15k tonnes annually to 277k tonnes to meet domestic demand, Agriculture Minister Abdel Moneim El Banna says, according to Al Borsa. There is a 6% gap between demand and domestic supply, El Banna says. The minister went on to note plans to increase output of soybeans and sugarcane.

El Araby Group is set to inaugurate today a EGP 250 mn washing machine factory with a production capacity of 500k units per annum, 20% of which will be exported, Al Borsa reports.

TE Data’s profits for 2016 dropped 86% year-on-year in 2016 due to rising costs, sources close to the matter told Al Borsa on Sunday. The company is expecting to turn its fortunes around in 2017 via new subscriptions and hopes to reach the 4 mn client mark during the year.

The European Bank for Reconstruction and Development (EBRD) is looking to sign a USD 300 mn loan agreement with the National Railways Authority to purchase 100 new railway cars, EBRD’s Managing Director for the SEMED region Janet Heckman tells Al Borsa.

Banque Misr will sign a USD 500 mn loan with China Development Bank today to fund imports from China, Vice Chairman Akef El Maghraby tells Al Mal. The facility carries an eight-year maturity and will be directed towards companies operating in Egypt.

With the CBE promoting mortgages for low- and middle-income earners, Banque Misr plans on establishing a mortgage financing arm, bank Chairman Mohamed El Etreby tells Al Borsa.

A consortium of eight banks agreed to extend the Egyptian Natural Gas Holding Company (EGAS) an EGP 1.8 bn facility to finance its plans to increase natural gas production, Ahram Gate reports. The five-year loan is arranged by Banque du Caire; EGP 220 mn from was contributed by Emirates NBD, according to Al Mal. The plan includes production increases from Zohr and gas projects in the East Nile Delta.

Social Solidarity Minister Ghada Wali met yesterday with World Bank MENA Vice President Hafez Ghanem to discuss Egypt’s social welfare and security strategy and ways to develop the Takaful and Karama programs, Al Borsa reports. Ghanem stressed the importance of focusing on reaching women and rural areas during the coming period.

A colonel in the Egyptian military was killed and three army recruits injured yesterday when their armored vehicle was hit by an explosion in Sinai, sources told Reuters. “No immediate comment was available from the army,” the newswire says.

Remember koftagate? Egypt’s Doctors Syndicate issued a decision suspending three doctors for one year for promoting a device that claimed to have the ability to detect and cure viral infections including HIV and hepatitis C, Al Masry Al Youm reports. The syndicate says the doctors were in violation of the code of conduct.

An MP is drafting legislation to set rules on engagement. Not “rules of engagement” as in when you can open fire on the enemy. No. Rules on becoming engaged to be married. House representative Abla El Hawari announced that she is nearly done drafting amendments to the Personal Status Law that would legally bind engaged couples to tie the knot within a year of being engaged, Egypt Independent said on Sunday. The amendments also include “rules for the annulment of an engagement” and fines imposed on whichever party breaks the engagement, which would be determined according to contracts signed by the parents at the time of the engagement. Hawari plans on collecting signatures for her proposal during the first few sessions of Ramadan.

Five officials from the General Authority for Supply Commodities and the Supply Ministry were arrested yesterday for allegedly accepting bribes to slash fines imposed on bakery owners for pocketing subsidy money, Al Shorouk reports.