Thank you for your generosity: Gov’t to sign agreement on “voluntary” private sector raises today.

Some banks have begun selling FX to private citizens without requiring travel documents in what Al Borsa says is a sign of improving availability of foreign exchange. Some banks surveyed were limiting sales to USD 2k per person, while others were reportedly selling with no limit.

CIT Minister Yasser El Kadi is in Paris for a two-day visit to meet with representatives from mobile network company Orange, Youm7 reports. No further details were provided, except that El Kadi will visit Orange Labs where he’ll learn more about the mobile operator’s R&D and incubation facilities.

The government is expected to sign today a non-binding agreement with certain industry associations that would urge private-sector companies to give raises to their employees. We have more on the agreement (probably the brainchild of the Union of Communist-Capitalist Friendship Society) in the Speed Round, below.

Keep your eye on this: “A long run of inflows to emerging market stocks and bonds is showing signs of faltering with cross-border flows turning negative last week for the first time since March,” the Financial Times reports. “Analysts said the data had more likely picked up a correction after several months of strong inflows rather than the beginning of a prolonged reversal.”

Our friend Andre Valavanis, investor relations officer at GB Auto, will contest the World Boxing Federation Intercontinental Welterweight Title today in a WBF championship twin-bill in Cairo.

Sunday is Revolution Day, and that means it’s a three-day weekend coming up. That’s the only prize we got our eye on this week.

The Ismail cabinet is on track to issue the executive regulations to the Investment Act in August, the Prime Minister said last week.

Egypt and Romania are expected to sign MoUs on investment, SMEs, agriculture, water resources and irrigation, oil and gas, and tourismin Bucharest on 26-28 July.

If the talking heads can give their soap boxes a break, so can we. Our daily talk shows coverage will return on Thursday, 27 July.

Investment map leaked in the local press: Al Mal has released copies of what it says are projects up for grabs as part of the investment map drawn up by the Investment and International Cooperation Ministry. The purported copies are extensive and cover a wide range of sectors and geographies including projects in the New Administrative Capital (pdf), national projects (pdf), ports and infrastructure (pdf), real estate (pdf), tourism (pdf), energy, industry, and waste management (pdf). The list details the location of each project, the size in terms of both investment size and land area, the tendering process, the government agency that has jurisdiction over the project, and any specific benefits investors could receive as part of it. We have yet to ascertain if this is the full list of 600 projects the ministry plans to put out there. But, as we noted yesterday, the ministry is still looking for about a month to finalize the list.

Government to sign non-binding agreement on private-sector raises today: Prime Minister Sherif Ismail will ink today a non-binding agreement with business associations on a 10% hardship raise for private-sector workers, the deputy head of the Federation of Egyptian Chambers of Commerce Mohamed El Fayoumy said on Monday, according to Al Masry Al Youm. The House of Representatives’ majority Support Egypt Coalition had reached an agreement last week with Labor Minister Mohamed Saafan to give private-sector employees 10% raises of at least EGP 165 and at most EGP 330 a month starting July. Saafan had explained that the raise is non-binding, asking businesses to do it in the spirit of corporate social responsibility. Raises given earlier this year count toward the 10%, El Fayoumy said, but standard annual raises do not. Companies facing financial difficulties will also be “exempt” from the raise, according to MP Gebaly El Maraghy, who heads the House of Representatives’ Manpower Committee. El Maraghy said that the new Labor Act will include clauses to guarantee these rights for private-sector employees and avoid having to jump through the same hoops in the future to decree a raise.

IPO WATCH- Beltone Financial has two IPOs in the pipeline for execution before the end of the year worth a combined EGP 3 bn, CEO Bassem Azab told Al Mal. Both listings are destined for the EGX, one in the pharma sector and the other in real estate. Azab also notes that Beltone will be partnering with emerging and frontier specialists Renaissance Capital to bid mandates to take state-owned companies public. Beltone has as many as eight IPOs in the pipeline for 2017 and 2018, Azab said in an interview with Al Borsa, bringing the total estimated value to EGP 20 bn. Azab noted that Beltone is actively looking to start a leasing business but still deciding on whether to go the greenfield route or to acquire an existing player.

Speaking of IPOs of state-owned companies: The United Kingdom is pulling out the stops to attract listings of government corporations. The UK’s financial regulator has proposed the relaxation of rules to make the listing of state-backed companies easier, Reuters reports. The move comes as the London Stock Exchange continues to push into the Middle East and North Africa in search of new listings. The Financial Conduct Authority’s proposal comes as the UK looks to capitalize on the upcoming IPO of Aramco. Egypt, which is readying its IPO program for state-owned companies, could stand to benefit as its option to list shares in companies such as Enppi and Banque du Caire in the UK gets easier. The Ismail government has yet to say whether a listing on the London Stock Exchange is in the cards. The proposal has received praise from financial lobbyists, as the City looks to cash in by making their advanced trading platforms easier to access for sovereign listings. Other investors and corporate governance groups counter that loosening some of the rules may lower the quality of companies on its stock exchange and leave shareholders with less protection when things go wrong.

INVESTMENT WATCH- Ride-hailing app Careem has invested USD 500k in Swvl, a three-month-old Egyptian bus transportation service, Reuters reports. Careem will take an undisclosed minority stake in Swvl and its CEO and co-founder, Magnus Olsson, will take a board seat. Reuters says Swvl was founded in April by a former Careem executive. “We want them to run and learn and develop at a very high pace and high agility and we believe the best way for them to do that is to stay independent,” Olsson told Reuters. The newswire says Swvl, which uses the passenger’s location and destination to find the shortest possible journey time based on the nearest bus station that travels along fixed routes, has 50,000 passengers and 200 buses using the mobile app, CEO and Co-Founder Mostafa Kandil told Reuters. “Swvl will use the Careem investment to increase its workforce, develop new app features, and to expand in Cairo and into other cities, including Egypt’s second-largest city Alexandria, and to Middle Eastern and Asian countries such as Saudi Arabia, Jordan and Pakistan next year.”

Egypt expects to receive the third installment of the IMF loan between December and January following the next review by the international institution, which is scheduled to take place between November and December, Finance Minister Amr El Garhy told Reuters. The third installment will be equivalent to USD 2 bn. The IMF’s executive board approved last week the release of the second installment, worth USD 1.25 bn.

Egypt’s natural gas output is expected to rise 50% in 2018 and 100% by 2020 thanks to recent gas field discoveries, the Oil Ministry said in a statement picked up by Reuters. “The fields of Zohr, North Alexandria and Nooros are among the most important projects that will increase natural gas production … and will contribute to natural gas self-sufficiency by the end of 2018,” Minister Tarek el Molla said. Output in 2017 climbed to c. 5.1 bcf/d from 4.4 bcf/d in 2016 after BP launched phase one of its North Alexandria concession. With domestic output on the rise, Egypt is looking to trim its natural gas imports in 2018 and is already in talks with “suppliers to defer contracted shipments this year,” the newswire adds.

Word on the street is that Egypt may impose new safety standards and quality control measures on domestically assembled cars. These would be supplemental to a set of 10 quality standards that have been in place for domestic assemblers since their 2010; those regulations cover everything from front lights and airbags to car locks. And the industry is not pleased with the prospects of additional regulations: The measures would greatly increased costs of production on domestic vehicles when they were imposed, said Wael Ammar, head of the Federation of Egyptian Industries’ transportation division, suggesting that the move could add further injury to a sector already reeling from weak sales. He added that the government should better focus its efforts on imposing similar measures on imported cars. The Trade and Industry Ministry had previously said that it could not take such actions as it lacked the ability or framework to impose standards on products manufactured abroad.

The government is considering doubling the bread subsidies that qualified beneficiaries receive through the Supply Ministry’s smart card system, two government sources told Reuters’ Arabic service. The increase would give each smart card holder EGP 0.20 for every loaf of bread not bought out of the 150 loaves allocated to each cardholder every month. The points on the card are then tallied and allow the cardholder to buy other commodities using the accumulated balance. The caveat: the ministry will reduce the daily allocation of subsidized bread from five loaves to four. A source said the move is motivated by the government’s desire to reduce system manipulation by bakers, who, the source claims, overcharge the government. Another unnamed source said the government currently spends EGP 375-400 mn each month on the bread points subsidy system — an amount that is set to double if the increase is approved.

…To help us keep track of the new changes to the subsidy system, the Supply Ministry is also considering issuing a price guide for goods along the bread supply chain every month, ministry spokesperson Mohamed Sewed tells Al Borsa. These will include the price of subsidized bread, and the price of wheat the government will sell to flour mills and the price of flour it will sell to bakeries.

On that note, the ministry also announced that it purchased a total 3.75 mn tonnes of wheat from local farmers during this year’s harvest season, which ended on 15 July, Supply Minister Ali El Moselhy told the press on Monday. Prices ranged from EGP 555-575 per ardeb.

MOVES- Mohamed Ali Abadi was appointed Chairman of Sidpec, according to a company disclosure. Abadi replaces Osama Mahdi.

The European Union has given Egypt grants totalling EUR 1.3 bn between January 2015 and May 2017 according to the EU’s most recent report on the state of EU-Egypt relations. Around 45% of that figure flows into socioeconomic development and job creation while another 45% goes into renewable energy, water, sanitation, and environmental projects. The remaining 10% fund projects related to governance, human rights, and social administration. As Egypt’s “first and most significant donor,” EU member states and European financial institutions provided the country with more than EUR 11 bn in various forms of funding (grants, loans, debt swaps, etc.) during the same period.

Tourism is stable in Egypt despite the latest killing of two German tourists in Hurghada, Ehab Farouk writes for Reuters. No bookings were canceled in Hurghada, Sharm El Sheikh, or Luxor, says Red Sea Tourism Investment Association head Hisham Ali. But it could be too early to judge: The impact could show in new bookings within two weeks, says Red Sea Tour Companies Chamber member Bishoy Shawki. Separately, Russian diplomats are following up on the health situation of Russian citizen Yelena Mikhailenko, who was wounded in the attack in Hurghada, TASS reports. “She was reported to have minor injuries that are not life-threatening,” says the Russian Defense Ministry.

Meanwhile, Red Sea resorts will no longer be allowed to rent rooms on a day-use basis or cater to non-resident guests, after evidence revealed that the assailant had purchased a day pass to enter the beach on the day of the incident, Red Sea Governor Ahmed Abdullah decided on Monday, AMAY says.

In related news, the Chinese embassy issued a warning for tourists in Egypt after the attack, urging them not to travel alone or visit unofficial tourist sites, Times Beijing reports.

The Tourism Ministry has denied issuing a ban on alcohol consumption on North Coast beaches, Tourism Ministry spokesperson Rana Gohar tells Egypt Independent. “Tourism police [would] not follow any such measure without consultations with the Tourism Ministry,” Gohar adds. Talk of an alcohol ban on Sahel beaches had emerged in the local press over the past few days.

Qatari nationals, including diplomats and special passport holders, will no longer be allowed to obtain Egyptian visas on arrival as of next Thursday, said Foreign Ministry spokesman Ahmed Abu Zeid in a call-in to Massa DMC (runtime: 2:20). They will instead be required to apply for a visa at an Egyptian embassy abroad. Qatari students enrolled at a public university in Egypt, and the wives, husbands, and children of Egyptian nationals, are exempt from the new measure, and will be granted three-month tourist visas. Qatari nationals enjoyed visa-free travel to Egypt prior to the recent break in relations.

This comes as President Abdel Fattah El Sisi insisted that Egypt’s beef with Qatar stands on its interference in domestic affairs of other countries at a meeting yesterday with Kuwaiti Foreign Minister Sabah Khalid Al-Sabah in Cairo, according to an Ittihadiya statement.

Meanwhile, Qatar is rolling with the Washington Post’s claims that the UAE orchestrated the alleged hack of Qatar’s news agency that put in motion the ongoing regional crisis, Reuters reports. Doha said the UAE’s alleged involvement is “unfortunate” and in violation of agreements between GCC countries, the Associated Press reports. The UAE has maintained that the Washington Post’s report is false and that it did not play any role in the alleged hacking.

The mufti of Daesh in Iraq reportedly called on Arab militants to head towards Egypt and Palestine, Iraq News reports. The individual had apparently called both countries “the promised land,” said sources in Tel Afar — Daesh’s final stronghold in Nineveh province in northern Iraq. The “fatwa” comes as Daesh has suffered its most glaring defeats since it emerged, losing almost all its territory in Iraq, including Mosul; its de facto capital, Raqqah, is now under siege. Analysts have suggested the defeats are behind the spate of attacks Egypt has suffered of late. Israeli officials are also on high alert these days, with some IDF officials saying it was a matter of time before Daesh in Sinai steps up attacks, writes Roi Kais for Ynet.

From across the pond: Private equity outfit KKR is breaking with industry norms and naming successors to founders Henry Kravis and George Roberts, the Financial Times is reporting (paywall). The news comes as BlackRock continues to benefit from the rise of the robots, with the asset manager having attracted USD 104 bn in new client funds in the second quarter, the salmon-colored paper notes.

Egypt ending visa-free travel for Qataris topped coverage in the foreign press this morning. Most outlets added nothing new in the form of analysis and instead simply made do with running reports from newswires.

Continued coverage of clashes between citizens and security forces over land in the Cairo neighborhood of El Warraq came in a close second. “The island of al-Warraq is only 1,300 acres big, but is home to around 90,000 people,” says The Independent, noting that neighborhood’s residents “claim they have a right to live there… and had not received prior warning of Sunday’s planned eviction.”

China getting is in on the military-industrial complex with increasing drone sales to MENA countries, an interesting piece by the WSJ (paywall) reports. Given Obama era regulations that curb the sales of drones to most US allies, countries like Egypt, the UAE and KSA are all getting in on the cheaper and increasingly available Chinese knock-offs. With confirmed sightings in both combat against terrorism and a presence in bases around the Middle East, the article also lists the numbers bought, with Egypt coming in at a MENA high 18 units.

Child labor is growing in Egypt as children work to support their families amidst an increasing unemployment rate, Rahul Radhakrishnan writes for TRT World. The piece included a video report (runtime 1:45) in which a child tuktuk driver says he works to fund his education. At least 1.6 mn children work in Egypt, according to a 2014 study cited by the report.

Other coverage worth noting in brief:

• Egyptians and other expats in Saudi Arabia will have to pay a levy for dependents of foreign workers, Amira Sayed Ahmed writes for Al-Monitor. It starts at SAR 100 per dependent in 2017, increasing to SAR 400 in 2019 and 2020.
• A publication called Sight says Christian women are facing “attacks and even abduction in Egypt.” It says the situation is especially difficult in Al Khosous, near Cairo.
• Middle East Eye has what it claims are three steps to defeating our Daeshbag problem.
• Egyptians are feeling green, but it’s not envy — it’s something in the ta’ameya. BBC has the scoop.
• Xinhua has picked up news on the sentencing to death of eight Ikhwan members after convictions stemming from an April 2015 attack on a police station in Damanhour.

The Warraq island clashes are on columnists’ minds, including Amr El Shobaky, who writes in Al Masry Al Youm that the government’s decision to clear the island of squatters came abruptly and was implemented poorly. El Shobaky also says the government’s reasoning remains unclear, particularly as rumors are swirling about that an Emirati investor eyeing the island as a potential site for a megaproject. Mohamed Amin echoes El Shobaky’s main points, saying that the violence was completely unnecessary and could have been avoided if the decision had been planned and implemented correctly. Authorities are taking steps in the wrong order by trying to forcefully vacate the island and then deciding to hold public discussions to clarify the reasoning behind the campaign, he says. Meanwhile, Al Shorouk’s Emad El Din Hussein takes a step back to point out a double standard in government critics’ rhetoric. Although they often call on authorities to exercise their power to nip problematic issues in the bud, they have fiercely criticized the state for its campaign in Warraq, he says.

Art Compilers, a four-man Egyptian band, has been translating popular Islamic songs into English to break the language barrier for non-Arab Muslims to be able to enjoy the spirituality of the songs, David Awad writes for Al-Monitor. The first work they released was “My Lord, I am at your door,” which was originally written in 1972 by Sayyid al-Naqshabandi and composed by Baligh Hamdi (watch, runtime 1:21).

The CBE will be settling short-term debts to foreign countries amounting to USD 8.4 bn over the next six months, an unnamed bank official tells Al Mal. The CBE will be paying USD 4.3 bn in November, USD 3.8 bn in December, and USD 22-153 mn for July-October. Of those, USD 2 bn will be used to repay international financing institutions for T-bills issued on the Irish bourse and USD 400 mn will be paid to Turkey to settle a USD 1 bn 2012-13 loan, while USD 500 mn will settle debts with Libya and USD 100 mn will clear dues owed to Saudi Arabia. The bank has already settled USD 3.7 bn in debts during 1H2017.

Egypt and Argentina will form a trade committee, Trade and Industry Minister Tarek Kabil said at the Egyptian-Argentinian business forum meeting, according to Youm7. The body will meet in December during the World Trade Organization meetings in Buenos Aires. A joint business council will also be formed, Kabil noted, saying that a delegation of Egyptian government officials and businessmen is set to travel to the Mercosur countries to explore opportunities for cooperation. Separately, Argentina’s Vice President, Marta Gabriela Michetti discussed, the free trade agreement between Egypt and the Mercosur with PM Sherif Ismail, Youm7 reports. In a separate report by Al Masry Al Youm, a delegation of Argentine businessmen is due to visit in October.

The Italian government has come to an agreement with the Ministry of Trade and Industry to provide a loan worth EUR 45 mn in a story picked up by Al Borsa. The loan will be used to provide Italian machinery and equipment to help boost Egyptian industry. The loan will go through in 4 months time and will largely be directed toward tanneries in the country.

Egypt’s new youth unemployment program will be funded through grants from the African Development Fund, the Arab Monetary Fund, and a World Bank initiative geared towards supporting women, Investment and International Cooperation Minister Sahar Nasr tells Ahram Gate. The program aims to provide 1 mn young citizens with employment opportunities over the next three years, and will be divided among the major economic sectors, entrepreneurship, and sustainable businesses in low-income areas. Nasr had discussed the program last week with representatives from the International Labor Organization, the Japanese International Cooperation Agency, and USAID, among others. There is also legislation in the works to form a youth unemployment fund.

President Abdel Fattah El Sisi headed the first meeting of the newly formed Supreme Council for Civilian Nuclear Power yesterday, Al Shorouk reports. The meeting discussed the latest developments on the mythical Dabaa contracts and other civilian applications of nuclear power.

Egyptian construction firm Hassan Allam recently landed a EGP 400 mn tender to execute various road projects in Cairo and other cities during 1H2016-17, Amwal Al Ghad says. The project involves developing 14 new routes to connect different governorates, the company’s Managing Director for Financial Affairs, Atef Barbary, tells the newspaper.

Cotton farmers are leaning towards selling their harvests on the open market, rather than to the government, due to the low prices the Agriculture Ministry has set for purchasing local cotton, head of the Egyptian Farmers’ Union Mohamed Farag tells Al Mal. The ministry had announced earlier this week that it will be buying cotton at a price of EGP 2,300 per qintar for long-staple cotton from the Delta, while short- and medium-staple cotton from Upper Egypt has been priced at EGP 2,100 per qintar. According to Farag, each qintar of cotton costs EGP 2,166 to cultivate, meaning the government’s prices would cause farmers significant losses.

The Tahya Misr Fund is planning to invest EGP 800 mn in a factory to extract and export sugar from dates, fund director Mohamed Ashmawy tells Al Borsa. The company will be established in cooperation with the Military Production Ministry and Emirati agriculture investment company Jenaan. The fund has completed feasibility studies to plant 20 mn palm trees in Siwa, West Minya, and Toshka for the first phase of the project, and aims to plant 100 mn palm trees by 2030. The company also has expansion plans to cultivate and export other crops in hopes of reducing Egypt’s reliance on imports.

Investment and International Cooperation Minister Sahar Nasr met with Egypt Representative for the UN’s Food and Agriculture Organization (FAO), Hussein Gadain, on Monday to discuss preparations for an agri-focused investment forum taking place towards the end of the year, the ministry said in a statement.

Petrojet signed a MoU with Samsung yesterday which could see the latter subcontract on Samsung projects, Youm7 reports, without providing further details on the projects in question.

The Health Ministry received the second and final tranche of a USD 75 mn loan from the World Bank (WB) ahead of its July deadline, Investment and International Cooperation Minister Sahar Nasr said on Monday, according to Al Borsa. The announcement comes a month after Deputy Health Minister Sayed El Shahed said that the WB will not be disbursing the USD 35 mn tranche since the ministry had not spent the first USD 40 mn installment by the deadline specified in the agreement, which had been signed in January 2016. Nasr explained that the government was able to “step up its pace” in recent days to meet the WB’s requirements and receive the second tranche, which will be used to finance the purchase of equipment for some state-run hospitals.

Nile Real Estate Company has launched the first phase of its 6,00 sqm Nile Park residential compound in New Cairo, Amwal Al Ghad reports. Nile Park is part of the Beit Al-Watan project, which sells property to expats in USD. The company anticipates sales will reach EGP 35 mn, according to Daily News Egypt.

Hilton will open its first hotel under its new contract to manage seven establishments at the end of 2018, Vice President of MENA Operations Mohab Ghali tells Al Borsa without naming which hotel will be first under the program. Four of these hotels will be in Cairo: Hilton Nile Tower (previously Grand Hyatt), Hilton Nile in Maadi, Garden Inn in the new administrative capital, and Hilton Giza Pyramids near the Grand Egyptian Museum. As for the rest of the country, Hilton will open two hotels in Ain Sokhna, including the DoubleTree hotel, and a Garden Inn in Damietta.

Gastec chairman Hesham Radwan has said they have seen a 250% jump in cars converting from gasoline to natural gas, according to Al Mal. The company has been converting engines to run on natural gas at a rate of around 35 cars per day from a usual 10 since the government cut fuel subsidies last month.

MCV is supplying private transport company Mowasalat Misr with 100 buses, 16 of which have already been delivered, MCV General Manager Amr Nassar told Al Mal. No details were provided on the value of the sale.

The new Traffic Act will limit the issuing truck licenses solely to companies and other organizations, a senior Interior Ministry official tells Al Masry Al Youm. The move is meant to reduce the number of trucks on the road to cut down on congestion.

El Warraq island in southern Cairo — the site of clashes between residents and police looking to clear the neighborhood — had apparently been slated for a tourism project by the Giza Governorate, Deputy Governor Alaa Horas tells Al Mal. The project was supposed to be part of a wider plan to develop islands along the Nile, he added. As we noted yesterday, the government had said that its move to clear the area was part of the campaign to seize land illegally occupied. One resident had been killed and a number of policemen injured during the clashes, which saw the arrest of 12 people, nine of whom will be prosecuted on assault charges, according to the newspaper.

The government is working on moving to planning for three years at a time from the current system that just focuses on one year at a time, an advisor to the planning minister told Al Borsa. Planning just one year at a time does not allow for a financial ceiling for multi-year projects and does not give governorates the option to shift funding surpluses and reuse them, he says. The advisor said the government is also working towards implementing a system of management by objectives in a number of ministries and will also use investment funds, including Tahya Misr, to reduce financing shortfalls.

Five policemen were killed and six others were injured in two roadside explosions in Al Arish on Monday, Reuters says. No one has yet claimed responsibility for the attacks.

Egypt’s Ahmed Hegazy is going to West Brom on loan with an option to sign and will join the squad ahead of a pre-season tourney they have in Asia. It’s his second spell in Europe after a few sputtering seasons in Italy plagued with injuries. The story is getting wide distribution amongst sports outlets. Story here. In other signing news, Ahmed Elmohamady is close to a move from Hull to Aston Villa, according to Ahram Online.

Fawry has expanded its digital service for car license renewal to include paying taxes, mandatory insurance fees, and fines, Al Borsa reports. The company offers home delivery of the new license within seven working days. Separately, Fawry, the Arab African International Bank, and Banque Misr partnered with Jumia to launch JumiaPay for online payments by early August, according to Al Mal.

Headed to Sahel? You don’t have to take your car everywhere: Ride-hailing appBuseet has launched an on-demand bus services in Sahel, Al Borsa said on Monday. The company will also launch a bus line between Six October City and North Coast compounds as part of its plan to expand its group transport services to cover Alexandria.