Sunday, 18 June 2017

USD 575 mn locomotives agreement is “evidence that Egypt is open for business” –GE vice-chairman

TL;DR

What We’re Tracking Today

We’re in the home stretch now, ladies and gentlemen — the last full business week of Ramadan has just begun, and we have a packed edition to get things underway, including a rundown of what looks set to be a busy summer / fall agenda for the House of Representatives.

But first: What happened with the gold exploration tender? The results of the Egyptian Mineral Resources Authority (EMRA)’s gold exploration tender are still not public. The Oil Ministry had said in mid-May that the results of what EMRA Chief Omar Taima hinted was a successful bid round were supposed to be announced before the start of June. Centamin, Aton Resources, and Thani Stratex, the three largest mining companies in Egypt, had all refused to participate in the bid round, citing concerns over EMRA’s insistence that production sharing agreements were the way to go. The only news we’ve heard on the tender was a leak that 14 companies have reportedly placed bids. Let us know if you’ve heard anything that we clearly haven’t.

Is it just us, or are the cops rebranding? We got a taste of 1950s America three times over the weekend as we spotted classic black-and-white patterned police vehicles — both sedans and vans — in Giza and Maadi.

Wait, you can actually taste an ancient Egyptian beer today? It’s still a little early in Ramadan to be thinking about ethanolic beverages, but we blame the Wall Street Journal for our preoccupation this morning after reading the paper’s review of Ancient Brews: Rediscovered and Re-created. The story notes that US brewer Dogfish Head used “the available chemical, archaeobotanical, and textual evidence” to (re-)create a brew it has dubbed Ta Henket a few years back. See reviews of the beverage on RateBeer and Beer Advocate or visit the brewer’s product page, which notes, “To ferment this earthy ancient ale, Sam and friends traveled to Cairo, set out baited petri dishes and captured a native Egyptian saccharomyces yeast strain.”

Muslim food trend we’ve never heard of: Halal chocolate, which Bloomberg tells us is becoming a thing.

So, when do we eat? Maghrib prayers are at 6:59pm CLT in Cairo, and the cutoff time for sohour is 3:08am.

PSA #1- On the off chance your dad, like ours, spent any amount of time in the US, Canada or France, you are hereby reminded that it is Father’s Day today in the aforementioned jurisdictions.Whether your kids decide to remember you or not is immaterial: Give dad a ring. Stop by unexpectedly for fetar. Be grateful you still have him. That is all.

PSA #2- Egypt observes the Eid Al-Fitr holiday next week. It’s a three-day break starting Sunday or Monday, and Enterprise is going to be taking a break for the full week to catch up on our sleep. We’ll be back to our normal publication schedule on Sunday, 2 July.

On The Horizon

LEGISLATION WATCH- The executive regulations of the Investment Act will be with Prime Minister Sherif Ismail for review within 10 days, Investment Minister Sahar Nasr told Reuters over the weekend.

The Universal Healthcare Act could be going to the House of Representatives right after Eid Al Fitr, which is when the actuarial study backing the law is set to be completed, Health Minister Ahmed Rady said on Saturday, according to Al Shorouk.

The Ismail cabinet is currently reviewing an amended Leasing and Factoring Act drafted by the Egyptian Financial Supervisory Authority in April, according to Nasr.

More long-term, the central bank expects to finalize a draft of the new Banking Act in two months’ time, sources with knowledge of the matter tell Al Borsa. Priorities include the regulation of non-banking financial institutions, protecting the interests of retail clients, and reducing red tape in the sector. Consultations with the domestic banking industry and international organizations including the IMF are underway, the story says.

The Tax Authority has extended the deadline to pay real estate taxes until the end of June. The extension from the initial deadline of 15 June shields taxpayers from additional charges or interest for late payment, Al Shorouk reports. The authority will be staying open until 6pm through the end of filing season.

New electricity prices announced end of June: The Electricity Ministry plans to announce planned price hikes by the end of this month, unnamed senior government officials tell Al Borsa. The electricity ministry is resisting pressure from MPs to delay the price hikes.

Enterprise+: Last Night’s Talk Shows

Kol Youm’s Amr Adib kept the focus on Qatar again, following reports of a leaked phone calls between senior Qatari officials and members of the Bahraini opposition leader Hassan Sultan. Calls suggest open discussion of an overthrow of the Bahraini government and manipulation of the situation through Al Jazeera. To the boisterous host, this was confirmation that Qatar’s Prince Tamim Bin Hamad Al Thani is the puppet master behind Al Jazeera’s news coverage (watch, runtime 20:55).

In a drastic change of topic, Adib veered into a report on the new joint employment program that the ministries of trade and industry and supply launched. The program would see both ministries supply large trucks to 18 unemployed young men to sell food. Each truck came equipped with a refrigerator and can carry up to 5 tonnes of food products (watch, runtime 2:52)

Speed Round

Speed Round is presented in association with

GE lands USD 575 mn contract to supply Egypt with 100 locomotives: General Electric signed a USD 575 mn agreement with the Egyptian Railway Authority on Saturday that will see it deliver 100 locomotives to the country, according to a cabinet statement. The locomotives are part of a plan to have “25 mn tonnes of goods transported via railway by 2022,” Reuters reports, citing remarks by Transport Minister Hisham Arafat. The first batch of 25 locomotives will arrive in 2018, Arafat said.

The agreement will be financed with the help of Canadian export-credit agency Export Development Canada, according to Bloomberg and also covers upgrades to 81 old GE locomotives and 15 years of maintenance services for both new and old fleets, providing everything from tech support to spare parts.

The agreement is “evidence that Egypt is open for business,” GE Vice-Chairman John Rice told Bloomberg in a phone interview from Cairo. GE is looking to invest further in Egypt, especially as reforms improve the country’s business climate, Rice told Prime Minister Sherif Ismail during a Saturday meeting.

Abraaj exits Careem, places stake with Alwaleed bin Talal’s Kingdom Holding: The Abraaj Group announced that it successfully sold its stake in ridesharing app Careem to Kingdom Holding Company. Kingdom Holding Company, which is chaired by Saudi Prince Alwaleed bin Talal, said in a statement it had purchased a 7% stake worth USD 62 mn. Abraaj says it “closely partnered with Careem and its management team through a critical phase of the Company’s growth. The Group helped drive and increase corporate client outreach through its strong regional networks, accelerated strategic hiring, and supported the Company with expansion into new markets.”

The transaction came as Careem raised USD 150 mn, Reuters reports, noting, “The latest fundraising … increases investment in the company to USD 500 mn from USD 350 mn last December when it was valued at USD 1 bn.”

Germany’s Daimler invested in the funding round, CNN reports. Daimler had entered into a partnership with Uber to operate self-driving cars earlier this year. The report describes Daimler’s investment in Careem as a “blow” to Uber as it tries “to hedge its bets in the ride hailing market” and notes it is not alone in doing so as Prince Alwaleed already owns 5% in Uber competitor Lyft. “Our investment in Careem is a continuation of our strategy to invest in new technologies as we have done with our investments in Twitter, JD.com and Lyft,” said Kingdom Holding CEO Talal Al Maiman.

M&A WATCH- The bidding war for National Company for Maize Products (NCMP) looks to intensify this week amid expectations of a mandatory tender offer by EK Holding subsidiary International Financial Investments Company (IFIC) for the maker of sweeteners and food additives. The company is expected to hold a meeting to discuss the MTO this week ahead of presenting the official offer to the Egyptian Financial Supervisory Authority for approval, sources tell Al Borsa. This follows a meeting between both companies last week to discuss a fair value report on NCMP. This would follow competing MTOs presented by Cairo Three A Group and Archer Daniels Midland (ADM)’s Swiss unit for a 42.96% stake in the company. The three are also facing off against Al Mona Misr (a local affiliate of global commodities giant Louis Dreyfus; Al Mona says it is not acting on Dreyfus’ behalf). Pharos Holding is sell-side advisor to Misr Capital Investment for the transaction, while Al Tamimi & Co. is legal advisor. EFG Hermes is advising ADM, CI Capital is advising Cairo Three A, and Al Mona is being advised by Pioneers.

M&A WATCH- Beltone Financial has landed a mandate as sell-side advisor for a retail company with operations in three Asian countries, Sobhy El Sehrawy, the firm’s deputy head of investment banking, told Al Borsa. El Sehrawy did not name the company but says the transaction is Beltone’s first beyond Egypt’s borders. He expects the transaction on the company, valued at USD 300 mn, should close within the next two to three months.

IPO WATCH- Zaki Hashem & Partners will be legal advisor to BPE Partners on the private equity outfit’s planned IPO this year, with Sigma Capital managing the issuance, Al Mal reports. BPE Partners Chief Investment Officer Abdel-Monem Omran said earlier this month the company is looking at September or October to list on the EGX.

IPO WATCH- NI Capital expects Enppi will list on the EGX before the end of 2017, Reuters reports. It expects to raise between USD 100-150 mn from the offering. NI Capital, the government’s investment bank and coordinator of the program to offer via IPO stakes in select state-owned companies, says it “will also offer shares in companies from the petroleum, services, chemicals, shipping, maritime and real estate sectors.”

MOVES- Algebra Ventures announced that Karim Hussein has joined it as a partner. Hussein was previously senior VP of products and engineering at WebMD, founder of DKimia, and has also made a number of angel investments in Egypt and the US, including Shezlong, Simplex CNC Solutions, Integreight and Eonite Perception. Algebra Ventures is now led by partners Karim Hussein, Tarek Asaad, and Ziad Mokhtar, with Khaled Ismail as a senior strategic advisor to the fund. The fund, which recently concluded a USD 1.5 mn investment in Elmenus.com, “is backed by large institutional investors: the European Bank for Reconstruction and Development, the Egyptian-American Enterprise Fund (EAEF), Cisco and the International Finance Corporation (IFC).”

Egypt’s GDP grew by 4.2% y-o-y in the first three quarters of FY2016-17, Planning Minister Hala El Said said, according to Reuters. El Said said the growth was led by “several industries, including communication, tourism and manufacturing,” which saw year-on-year growth of 10.7%, 80%, and 7.9%, respectively, according to Al Mal. The ministry sees the economy growing at a 4% clip in the fiscal year ending 30 June.

Food exports up 7% in 4M2017: Speaking of growth, Food Export Council head Hani Berzi noted Egypt’s food exports advanced 7% year-on-year in the first four months of the year, generating total receipts of about USD 929 mn, Al Mal reports.

Look for additional spending on bread subsidies in the 2017-18 state budget as the Supply Ministry and Federation of Chambers of Commerce both lobby the Finance Ministry for more generous earmarks for the subsidy, Al Mal reports. Spending on bread subsidies is presently set to ring in at EGP 37.1 bn in the next budget (up from EGP 23 bn in 2016-17), and could rise by as much as EGP 11 bn if the Federation gets its way.

Saudi Arabia issued on Thursday a temporarily ban on imports of Egyptian strawberries over concerns of high levels of pesticides, El Watan reports. The ban, effective from 11 July, follows an inspection of a strawberry shipment from April. The Saudi ban prompted Egypt’s Agriculture Export Council to ratify yesterday new rules on pesticides it wants members to implement during the upcoming growing season, Al Borsa reports. Strawberry and pepper imports will both be under the microscope, council head Abdel Hamid El Demerdash said. The Agriculture Ministry had previously moved to impose stricter regulations on exports to the GCC after several countries banned Egyptian produce due to high pesticide levels. Saudi Arabia banned Egyptian peppers in December, prompting the UAE and Kuwait to follow suit.

The Ismail government signed off on minor amendments to the Consumer Protection Act during its weekly meeting on Thursday, according to a statement. It appears the government is approving amendments to the act piecemeal, after having signed off on other revisions earlier this month. Certain amendments, including provisions that would allow the government to set price controls as part of a bid to curb inflation, have stirred tension in the business community. Planning Minister Hala El Said also presented her ministry’s report on the country’s main economic indicators in 3Q2016/17. Key decisions taken during the meeting include:

  • Approving a EUR 100 mn loan from the French Development Agency (AFD) for the EUR 360 mn Alexandria tram project;
  • Signing off on a USD 85 mn funding agreement with the Arab Fund for Economic and Social Development for a 50 MW solar power plant project in Kom Ombo;
  • Approving amendments to a draft bill on regulating river traffic and commercial transport on the Nile that will see a single agency replace all existing agencies within two years of the law’s issuance. The ministers had previously signed off on the draft bill earlier this month;
  • Signing off on unspecified decisions taken by the Ministerial Committee on Investment Disputes;
  • Approving amendments to the fishing and aquatic life law to impose a prison sentence of three to seven years and fines of EGP 1-10 mn for individuals who damage lake ecosystems.

Protesters gathered on Friday to demonstrate against parliament’s vote in favor ofhanding over Tiran and Sanafir to Saudi Arabia, leading to the closure of the Sadat metro station, according to Al Mal. Security forces arrested around 40 protesters in the Greater Cairo area, Al Shorouk reports. The Associated Press also took note of the protests over the islands transfer, which the New York Times’ Declan Walsh says is “one of the most politically sensitive issues facing Egypt’s president, Abdel Fattah el-Sisi.” Following the protests, cabinet’s Information and Decision Support Center published a copy of a 1990 presidential decree demarcating Egypt’s maritime borders with Saudi Arabia, in which the islands fall under the kingdom’s territory, Ahram Gate reports.

A Cairo Criminal sentenced 31 Islamists to death on Saturday for the 2015 assassination of Prosecutor General Hisham Barakat, the Associated Press reports. The court will issue the final verdict, which is subject to appeal, on 22 July. Reuters also has the story.

Six Egyptians are reportedly among the estimated 76 people missing in the fire that engulfed London’s Grenfell Tower last week, according to UK Metro News. Rania Ibrahim and her two children are believed to still be missing after being trapped in the 23rd floor. She had posted to Facebook Live her ordeal and police had instructed her to remain inside. Thirty people have been confirmed dead in the fire that launched a wave of protests and anger at Prime Minister Theresa May.

Other international stories breaking on a busy news weekend:

Biggest international story of relevance to Egypt: Israel, Greece and Cyprus have agreed to build the world’s longest undersea pipeline to link Israeli offshore gas fields to Europe, Bloomberg reports. The business information service notes that the expense of the pipeline and current low energy prices “may require additional gas findings offshore Israel to make it commercially viable.” While the potential pipeline is years and bns of USD away, Israel already has a link to Europe through Egypt in the form of the Arish-Ashkelon pipeline, but it’s effectively blocked by a USD 1.76 bn international arbitration award won by Israel Electric against Egyptian state petroleum companies EGPC and EGAS and pipeline operator EMG. Israeli offshore giants Noble Energy (headquartered in the US) and Delek Group are looking to export gas to both Jordan and Egypt.

Biggest international story based on sheer “fun” factor: Amazon is making a bid for Whole Foods — the high-end food market dubbed “Whole Paycheck” by fans and detractors alike — in a USD 13.7 bn transaction that the Wall Street Journal says is in part a play on the idea that “many shoppers still want to buy groceries at physical stores.” The move is also being positioned as the next phase of Amazon’s war on retailer Walmart.

The WSJ’s coverage of the original transaction is great, but the piece you need to read to put it in context is by Christopher Mims, who writes for the newspaper: “Why does a phone maker get into banking transactions? Why does a social network build a virtual-reality headset? Why does an online retailer buy a grocery chain? Amazon’s bid to acquire Whole Foods is just the most extreme example of a larger, more consequential phenomenon: America’s biggest tech companies are spreading their tentacles, pushing into complementary businesses in a play to sustain growth as they saturate the market for their existing goods.” It’s also one heck of a logistics play. If you’re browsing from your iPad or at your desk, hit the rail running down the left-hand side for more than a dozen additional WSJ stories on the merger — the paper has owned coverage of this one.

Not a Journal subscriber? Check out coverage in the Financial Times (paywall). The NYT’s Farhad Manjoo has an interesting viewpoint, and both Bloomberg and Reuters have the story, with the former noting that grocery stocks in the US and Canada tanked on the announcement of Amazon’s foray — and that Amazon could push Whole Foods to cut prices to help it shed its “Whole Paycheck” image.

The specter of a tech giant buying into bricks and mortar has us dusting off our copy of David Sax’s very good The Revenge of Analog: Real Things and Why They Matter.

Tunisia is under pressure to fix its FX problem, but it’s not likely to follow Egypt’s example and fully float the dinar. That’s the take-home from a Bloomberg piece on currency liberalization measures contained in a draft bill now before the Tunisian cabinet.

Other headlines with a skim this morning if you have a few minutes:

Greece has been saved from default this summer after Eurozone ministers and the IMF announced on Thursday night an agreement that will allow Greece to make good on some USD 7 bn in debt repayments it owes in July. That said, they’ve essentially just kicked the ball down the road. The Financial Times explains why.

Investors are starting to freak about corporate bonds in the US and Europe. Quoth the FT: “The number of investors who think corporate bonds are overvalued has hit a new record high as the industry frets over the prospect of central bankers raising interest rates, as well as political uncertainty in the US and Europe.”

How bad is the quality of Uber coverage this morning? Lousy enough that either AriannaHuffington or three of millennials you’ve never heard of are going to save the ride-sharing app from the meltdown of Travis Kalanick and the company’s senior management. The New York Times serves up the Arianna angle, while Bloomberg looks at the three people who together account for almost all of the company’s revenues.

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Image of the Day

“The city of Meroë lay undiscovered for two millennia before British archaeologist John Garstang excavated it in the early 20th century – and created some of the first ever photographs of ancient Egypt’s treasures.” Check out the photo essay in the Guardian. (Photo credit: Garstang Museum of Archaeology).

Egypt in the News

Leading coverage of Egypt in the foreign press this morning is (at long last) aneconomic story: GE’s USD 575 mn agreement to supply Egypt with locomotives. By far the most interesting coverage is coming from Bloomberg’s Deena Kamel, which places the agreement in the wider context of GE’s expansion in the region, including in Turkey and Algeria, and across a wide array of sectors. GE “is interested in railway opportunities in Turkey and Algeria as well as the next phase of Egypt’s transport expansion,” GE’s Vice Chairman John Rice told Bloomberg. “Demand for infrastructure continues unabated, the region is shifting to renewables, which is becoming more and more important, and health care is significant.”

Tying for first place are wire pickups of the sentencing to death of 31 Islamists for the assassination of Prosecutor General Hisham Barakat, with many, including the BBC, stressing Hamas’ continued denial of its involvement and accusations that the suspects confessions were coerced.

Repression of basic freedoms in Egypt is intensifying, Human Rights Watch says. It claims that “authorities in recent weeks have arrested at least 50 peaceful political activists, blocked at least 62 websites, and opened a criminal prosecution against a former presidential candidate … The actions are further closing any remaining space for free expression.”

Claims that President Abdel Fattah El Sisi reportedly suggested expanding the blockadeof Qatar to include Turkey are being widely picked up in the Turkish press. Newspapers including Yeni Safak and A News are citing as their sources the New Arab, which Egypt has banned.

The AFP ran a facile piece on gated communities in the Greater Cairo area as a focal point for class warfare and inequality. Upward mobile Cairenes are increasingly looking to buy into exclusive gated communities that shield them from social pressure just as the percentage of Egyptians unable to provide for themselves or their family’s basic needs rose to 27.8% in 2015, from 16.7% in 2000. Egypt faces significant challenges on the inequality front, but the story unfortunately does little to advance debate.

The Arab world’s intellectual leaders would, in a perfect world, “think collectively and the nations act in concert to ease the situation,” Nabeel Khoury writes for the Atlantic Council, commenting on the schism with Qatar. “Unfortunately, this is an age of intellectual decline in the Arab world. There are no literary giants or political philosophers to offer guidance, no benevolent rulers to persuade rather than coerce, and no solidarity among the big powers to help ease the pain—conditions which are likely to endure and fester for years to come.”

Worth Watching

We should expect to hear from the IMF’s Executive Board in a few weeks’ time on signing off on the second USD 1.25 bn tranche of Egypt’s USD 12 bn extended fund facility, Finance Minister Amr El Garhy hinted in a CNBC interview (runtime: 2:59) on the sidelines of the Asian Infrastructure Investment Bank’s second annual meeting in South Korea.

El Garhy told CNBC’s Martin Song that inflation is now the most significant economic challenge facing the country and the government is committed to bringing it down to 12-13% by 2018. The Ismail government will stay the course on subsidy cuts, though some areas may be trimmed over three years and others over five.

In the second part of the interview (runtime: 3:04) which aired Friday, El Garhy dismissed remarks by Qatar’s Foreign Minister which suggest that Egypt and the GCC countries engaged in a blockade against Qatar might suffer economically as a result. He states that the blockade was a matter of principle, and the reasons behind the blockade were more vital than the monetary consequences threatened by Qatar. Catch the full English transcript of the interview.

Diplomacy + Foreign Trade

Investment and International Cooperation Minister Sahar Nasr met on Friday with a WorldBank delegation to discuss efforts to improve Egypt’s business climate, according to a ministry statement (pdf). The bank is scheduled to issue a report in September on developments in several sectors in Egypt, including education, health, and transportation, according to the statement. The statement was not clear if this is the Doing Business Report which we expect will come out in the fall (its last edition came out in October).

President Abdel Fattah El Sisi met with CIA Director Mike Pompeo in Cairo on Thursday for talks on the Qatar blockade and fighting terrorism, Ahram Online reports.

Energy

Echo Energy sells 25% stake in East Ghazalat to partner Nostra Terra

Echo Energy is selling its 25% stake in the East Ghazalat concession to its partner Nostra Terra Oil & Gas for USD 500k, Proactive Investors reports. USD 100k will be paid after EGPC approves the sale, with the rest paid in two USD 200k tranches. “This acquisition represents a significant milestone for Nostra Terra, as we have added just over [1 mn] barrels of 2p reserves to our asset portfolio for a total cost of [USD 1.09 per bbl of oil],” Nostra Terra CEO Matt Lofgran said.

Agiba commissions Enppi for EPC work on Meliha

Eni JV Agiba has commissioned Enppi to develop crude oil shipping systems from its Meliha field in the Western Desert, Al Mal reports. Enppi will provide engineering, procurement, and construction works for pumps on the field. A source says the project will be completed within nine months, but did not provide information on the value of the contract.

Manufacturing

Pyramids Tires to launch USD 350 mn tire factory in Port Said

Pyramids Tires broke ground on a USD 350 mn tire factory in Port Said, Youm7 reports. The plant should be complete within four or five years, with the first phase of set to come online towards the end of 2018with c. USD 75 mn in investments, according to owner Ibrahim Gouda.

Infrastructure

EGP 150 mn water desalination plant to be established in Matrouh

Marsa Matrouh Governor Alaa Abu Zeid signed off on establishing a EGP 150 mn water desalination plant in Al Nagila, Al Mal reports. The plant will have a production capacity of 5,000 cubic meters per day.

Basic Materials + Commodities

Food Export Council preparing strategy to boost exports

The Food Export Council is working on a strategy to further increase Egypt’s food exports and boost their competitiveness over the next three years, council chairman Hani Berzi said. The strategy, which the council is preparing in cooperation with the Industrial Modernization Center, will be complete in four months.

Egyptian lemons exported to Italy

Egypt’s Hitac Trading recently started exporting lemons to Italy, according to Fresh Plaza. Egypt produces lemon varieties including Adalia, Sheairy, and Balady. “Most of them are grown in large tracts of land, and the production yields large volumes spread throughout the 12 months of the year,” according to Fresh Plaza.

Gov’t purchased 3.6 mn tonnes of wheat out of 8-9 mn produced

Egypt’s farmers produced 8-9 mn tonnes of wheat this harvest season, of which the government has purchased only 3.6 mn tonnes, a Supply Ministry spokesperson said on Saturday, Al Mal reports.

Tourism

Tourism Promotion Authority issues new guidelines for promotion campaigns

The Tourism Promotion Authority (TPA) has laid out new guidelines for tourism promotion campaigns it launches jointly with tour operators, including criteria to measure the success of the campaigns, authority head Hisham El Demery said on Saturday, Al Borsa reports.

Telecoms + ICT

TE signs two agreements with Etisalat, one week to 4G (Isa)

TE announced signing two five-year agreements with Etisalat Misr for local roaming and international voice services. The first allows TE to use Etisalat’s infrastructure to offer 2G, 3G, and 4G services, while the second lets Etisalat use TE’s international gates for overseas voice services. TE signed a similar agreement with Orange Egypt in April and is reportedly still in talks with Vodafone Egypt. The country’s MNOs will be receiving their 4G frequencies this week, ICT Minister Yasser El Kadi told the press on Saturday, according to Al Mal. The companies had reached an agreement with Telecom Egypt (TE) officials last week over the geographic redistribution of 3G frequencies, which the ICT Ministry had set as a prerequisite to the activation of 4G services. The agreement is only missing El Kadi’s signature, sources tell the newspaper.

Union Group becomes Alcatel’s exclusive distributor in Egypt

Union Group has become Alcatel’s exclusive distributor in Egypt, after Alcatel ended its contract with Rizkallah stores, Al Borsa reports.

Other Business News of Note

Kazyon supermarket planning to have 500 branches by 2018’s end

Discount supermarket chain Kazyon is planning to have 500 branches by the end of next year, up from 185 branches currently, Marketing Manager Ismail Hafez tells Al Borsa. According to Hafez, the chain’s expansion plan also includes increasing its branches in Upper Egypt after an initial growth phase in Greater Cairo and Alexandria.

Egypt Politics + Economics

Government to establish EGP 7 bn waste management holding company in few weeks

The Ismail government is planning to launch its EGP 7 bn a solid waste management holding company in two weeks’ time, unknown officials tell Al Borsa. The cabinet had agreed last week to study the possibility of establishing a company to collect and recycle waste. The company will become the primary regulator of the waste management industry, a move which would untangle a web of confused jurisdictions on recycling and waste management which include the ministries of environment, local development, electricity, and finance.

National Security

Hegazy and UN Libya envoy review Libya developments

Army Chief of Staff Mahmoud Hegazy and special representative of the UN secretary-general in Libya Martin Kobler “reviewed the results of recent meetings facilitated by a national dialogue committee created by Egypt to bridge differences between various rival factions in Libya,” Ahram Online reports. “Kobler urged continuous regional and international efforts to resolve the six-year-old crisis, while praising Egypt’s efforts in this regard,” according to a military statement that followed Thursday’s meeting.

Sports

10 Egyptian weightlifters test positive for banned substances

An Egyptian anti-doping committee said five weightlifters, including three women, tested positive for banned substances during a championship in March and have been temporarily suspended pending an investigation, Reuters reports. The committee’s report comes at the heel of a report from the International Weightlifting Federation (IWF) that another five weightlifters, including two 14-year-old girls, also tested positive for steroids at the African Youth and Junior Championships in December, according to the newswire.

On Your Way Out

The Investment Ministry has launched a hotline (16035) to respond to investors’ inquiries and complaints. The hotline, run by GAFI’s communications center, will be open from 8 am until 8 pm.

The markets yesterday

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EGP / USD CBE market average: Buy 18.0418 | Sell 18.1409
EGP / USD at CIB: Buy 18.05 | Sell 18.15
EGP / USD at NBE: Buy 17.95 | Sell 18.05

EGX30 (Thursday): 13,479 (-0.2%)
Turnover: EGP 1.2 bn (39% below the 90-day average)
EGX 30 year-to-date: +9.2%

THE MARKET ON THURSDAY: The EGX30 Thursday’s session down 0.2%. CIB, the index heaviest constituent ended down 0.9%. EGX30’s top performing constituents were: Amer Group up 5.3%, Eastern Co up 4.3%, and Palm Hills up 3.3%. Thursday’s worst performing stocks were: Qalaa Holdings down 3.6%, EFG Hermes down 2.3%, and Emaar Misr down 2.0%. The market turnover was EGP 1.2 bn, and foreign investors were the sole net sellers.

Foreigners: Net Short | EGP -119.6 mn
Regional: Net Long | EGP +85.3 mn
Domestic: Net Long | EGP +34.3 mn

Retail: 50.0% of total trades | 56.4% of buyers | 43.7% of sellers
Institutions: 50.0% of total trades | 43.6% of buyers | 56.3% of sellers

Foreign: 33.2% of total | 28.0% of buyers | 38.4% of sellers
Regional: 9.8% of total | 13.5% of buyers | 6.1% of sellers
Domestic: 57.0% of total | 58.5% of buyers | 55.5% of sellers


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PHAROS VIEW

Balance of Payments 3Q FY2016-17 — The Fundamental BoP Indicator Improves Significantly: In its latest report, Pharos Holdings runs down the improvement detailed in the CBE’s report on Egypt’s balance of payments in 3Q16-17. Pharos believes that the improvement will be a major line of defense offsetting any short-term volatility as a result of a Fed interest rate hike. You can catch the full report here (pdf).

***


WTI: USD 44.74 (+0.63%)
Brent: USD 47.37 (+0.96%)
Natural Gas (Nymex, futures prices) USD 3.04 MMBtu, (-0.62%, July 2017 contract)
Gold: USD 1,256.50 / troy ounce (+0.15%)

TASI: 6,820.81 (-0.48%) (YTD: -5.40%)
ADX: 4,501.77 (0.75%) (YTD: -0.98%)
DFM: 3,459.44 (+0.25%) (YTD: -2.02%)
KSE Weighted Index: 399.79 (+0.32%) (YTD: 5.18%)
QE: 9,257.90 (+0.74%) (YTD: -11.30%)
MSM: 5,248.41 (-0.99%) (YTD: -9.24%)
BB: 1,327.02 (0.00%) (YTD: +8.73%)

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Calendar

26 May-23 June (Friday-Friday): Window for firms to submit expressions of interest to the European Bank for Reconstruction and Development for consulting on Egypt’s oil and gas sector reform, London, UK.

22 June (Thursday): Nile Summit scheduled to be held in Uganda.

26-28 June (Monday-Wednesday): Eid Al-Fitr (TBC).

30 June (Friday): 30 June, national holiday.

06 July (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

13-15 July (Thursday-Saturday): AGRENA’s 19th Annual Poultry, Livestock, and Fish show, Cairo International Convention Center, Cairo.

15-19 July (Saturday-Wednesday): SSIGE’s GeoMEast 2017 International Congress and Exhibition, Sharm El Sheikh.

23 July (Sunday): Revolution Day, national holiday.

03-05 August (Thursday-Saturday): Watrex Expo Middle East, Cairo International Exhibition & Convention Center.

17 August (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

26 August (Saturday): 27th Egyptian-Jordanian Joint Higher Committee meeting, Amman Jordan. (TBC).

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.

18-19 September (Monday-Tuesday): Euromoney Egypt conference, venue TBD.

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).

25-27 September (Monday-Wednesday): Egypt Downstream Summit and Exhibition, Kempinski Royal Maxim Palace, Cairo.

28 September (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

03-05 October (Tuesday-Thursday): J.P. Morgan’s Credit and Equities Emerging Markets Conference, London, UK.

18-19 October (Wednesday-Thursday): Middle East Info Security Summit, Sofitel El Gezirah, Cairo.

06 October (Friday): Armed Forces Day, national holiday.

11-12 October (Wednesday-Thursday): 2030 Mega Projects Conference, Nefertiti Hall, Cairo International Convention Center, Cairo.

11-13 October (Wednesday-Friday): Middle East and Africa Rail Show, Cairo International Convention Center, Cairo.

18-20 October (Wednesday-Friday): AfriLabs annual gathering with the theme “Smart Cities,” The French University, Cairo. Register here.

16 November (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

01 December (Friday): Prophet’s Birthday, national holiday.

03-05 December (Sunday-Tuesday): Solar-Tec, Cairo International Exhibition & Convention Centre.

03-05 December (Sunday-Tuesday): Electrix, Cairo International Exhibition & Convention Centre.

08-10 December (Friday-Sunday): RiseUp Summit, Downtown Cairo.

28 December (Thursday): Central Bank of Egypt’s Monetary Policy Committee to review policy rates.

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