Is Qatar squeezing us on LNG?
Plus: An Egyptian at the Winter Olympics?

A bit of good news to start your day: Hurghada and Marsa Alam were the big winners of the German package holiday market last month, FVW reports. “Bookings to Hurghada were up by 112%, following on from a 102% rise in May. Marsa Alam soared by 129%, and entered the top ten destination airports ranking.” More to come as we have had reports of German tour operators intending an increase in traffic to the two destinations.

Fake news: It’s not just for The Donald: The UAE has ordered Arabian Business to shut down its print and online editions for a month after accusing the outlet of publishing “false news.” Business information service Bloomberg figures the flap had to do with a piece that “recently reported that courts in Dubai were in the process of liquidating dozens of failed real estate projects in the boomtown, which weathered a severe property slump as part of the global financial crisis in 2009. It soon deleted the online article and posted an apology online Friday. It said the piece was an ‘oversight’ and related to projects dating from 2010 that are ‘now outdated.’”

Fed board nominee could look to amend US banking laws: With all the fuss about potential amendments to our banking laws, the US may follow suit. President Donald Trump’s first nominee to join the board of the Federal Reserve, Randal Quarles, told the Senate Banking Committee on Tuesday that US banking laws are in need "some refinement," Reuters reports. He was unclear what that would mean in terms of concrete policy during his confirmation hearings. Quarle, a former executive at private equity firm Carlyle Group and current chief of Cynosure Group, had worked as a Wall Street lawyer and U.S. Treasury official under President George W. Bush.

Broadly speaking, we’re both tree-huggers and gearheads around here, so imagine our inner turmoil upon learning this morning that the United Kingdom will join France in banning the sale of new gasoline- and diesel-powered cars by 2040. The New York Times and the Wall Street Journal have the story.

It is otherwise a slow news morning on a sleepy, pre-earnings season summer day in which one’s fancy more naturally turns to Sahel than to one’s P&L. We hope you manage to unplug with family and friends this weekend.

Oh, and one more thing: Cairo weather will be horrid today and tomorrow, with humidity in the capital city hitting 90% in the early AM and a forecast high for Thursday and Friday of 41°C, according to our two favorite weather apps. If that’s not sufficient impetus to head for the coast, we don’t know what is. The mercury will cool to a comparatively merciful 36°C on Saturday and Sunday.

Countdown to flour subsidy phase-out: Flour subsidies’ end in August draws near, prompting wheat millers to come up with a case of wishful thinking. They tell Al Borsa that as the Supply Ministry has yet to announce prices, it seems likely that the deadline for the phase-out will be pushed back. However, ministry spokesperson Mamdouh Ramadan says pricing will be announced within the next few days and that the ministry is on track to implement the new system at the beginning of the month as planned. The ministry had announced tentative wheat milling prices last week, which it proposed to the Finance Ministry for approval.

Prime Minister Sherif Ismail will co-chair a meeting tomorrow of the Egyptian-JordanianJoint Higher Committee with his Jordanian counterpart, Hani Al Mulki. The two sides are discussing phosphate, fertilizer, pharma, packaging, software, renewable energy, and services projects, Trade and Industry Minister Tarek Kabil said, according to Al Masry Al Youm. Cairo and Amman are also looking to promote dual-listings on the EGX and Amman Stock Exchange and will cooperate on LED manufacturing and solar power generation, according to a statement from the Investment Ministry.

Foreign Minister Sameh Shoukry is going to prod Sudanese officials to lift their ban onEgyptian imports during his visit to Khartoum at the end of July, a Trade and Industry Ministry official tells Al Mal. Something which won’t make the talks go smoother is word that Egypt’s ambassador to South Sudan reportedly said that Egypt would back efforts to reunite the Sudanese People’s Liberation Movement (SPLM), according to All Africa.

Finnish Foreign Minister Timo Soini is set to visit Cairo in October, Finland’s ambassador to Cairo Laura Kansikas-Debraise tells Al Mal. Finland’s Deputy Minister for Foreign Trade and Development will also pay a visit to Egypt in November, accompanied by a number of company representatives. Finnish companies are interested in investing in water systems and treatment, consultancy, and solar energy, Kansikas-Debraise said.

The Health Ministry is close to concluding price studies on 1,400 meds and will presentits report to parliament next month, according to Al Borsa. A parliamentary source told the newspaper that some 1,320 products should rise in price.

September is but a stone’s throw away — cue the iPhone rumors, with Business Insider discussing whether Apple will launch sales of its tenth iPhone (variously predicted to be named iPhone Pro, iPhone 8 and iPhone X) in September or not.

All good things come to those who wait. And for those waiting for the calm, cutting wit of Amr Adib, the dulcet voice of Lamees El Hadidi and the trenchant insights of the pretenders their thrones, we’ll be back with our talk show coverage on Sunday morning.

Is Qatar trying to squeeze Egypt on LNG? Qatar reportedly refused to sell LNG to third-party traders the statelet thought were buying on Egypt’s behalf, according to Reuters. Since the diplomatic rift between Egypt, Saudi Arabia, the UAE, and Bahrain came to a head, requests by at least two companies to ship additional LNG from Qatar to Egypt have been rejected without explanation, according to trade sources who feel Qatar is reluctant to expand LNG trade with Egypt in light of the Quartet’s blockade. A Qatar Petroleum spokesman denied this, saying that Qatar will “continue to honor all their commitments and to actively engage with all counterparties, regarding mutually beneficial LNG market opportunities." Other traders believe that the restrictions, if proven true, would only hurt those with open positions. Long term contract traders have mostly secured their LNG.

…Government sources tell Al Mal that if Qatar did reject traders’ request for LNG it would likely be for short-term contracts only. The source gave reassurances that Egypt has no direct contracts with the Qatari government to import gas and that all LNG imports are contracted to third parties. It is worth noting that Qatar supplies around 60% of Egypt’s LNG through trading houses such as Trafigura, Glencore, Vitol and Noble Group, according to Reuters.

The UAE has the right idea: Not willing to take a chance and be backed into a corner, the UAE has begun importing condensates from the US in a bid to reduce its reliance on Qatari imports — its normal supply avenue — Reuters reports.

CBE delays plans to sell United Bank to next year: The Central Bank of Egypt has delayed plans to divest its 99.9% stake in the United Bank of Egypt until next year to allow the lender time to improve its returns and attract a better offer, senior banking officials tell Amwal Al Ghad. The CBE had announced earlier this year that it would be selling the bank to a strategic investor later in 2017.

The scale of Egypt’s wheat purchases in July was “unprecedented,” Ehab Farouk writes for Reuters’ Arabic service. Egypt bought 20% of its target for FY2017-18 in just under a month, he says, and domestic supply decreased. A Supply Minister source told Farouk the increase was to compensate for the drop in supplies domestically as the government tightened control over the wheat delivery processes to avoid inflating delivery figures. This resulted in a 1.8 mn tonne drop compared to last year, he says. The source added that the point of expanding the purchases that significantly was to secure a minimum of five months’ supply of the grain and avoid any delivery disruptions that could occur during the winter months. A trader told Farouk Egypt’s increased purchase volumes drove up wheat prices on the international market.

What the [redacted] are “flying geese?” “North Africa is unlikely to produce its own flying geese in the short term,” Riccardo Fabiani writes for the FT (paywall). North African economies are poised to enter a development stage akin to Asia’s in the 1990s, but only if countries are willing to tackle their political and economic challenges head, he says. With wages in eastern Europe rising in recent years, many companies have begun looking elsewhere for their labor intensive business needs and focus seem to be shifting toward North Africa, where the labor is cheap and both physical and human capital are gradually improving. But Fabiano argues that despite them being attractive destinations for FDI, countries such as Egypt, Tunisia, Algeria, and Morocco “do not seem to enjoy the political conditions that enabled the Asian economies to take off … competent bureaucracies dedicated to economic growth and industrialisation.”

Ten solar power companies have signed power purchase agreements with the Egyptian Electricity Transmission Company for solar photovoltaic projects under phase two of the feed-in tariff program, Electricity Ministry sources tell Al Mal. Each project is in the 50 MW range, with a total investment value across all projects of about USD 700 mn. The companies reached financial close with various international institutions, including the European Bank for Reconstruction and Development and the International Finance Corporation. Thirty other companies that qualified for projects under phase two of the FiT program are currently on the street lining up funding, for which they face an end-of-October deadline.

Meanwhile, Empower, Oceania, and FMC have presented financial proposals for waste-to-energy projects to the Environment Ministry at rates ranging from EGP 1.35-1.40 per kWh, Assistant Environment Minister Fatma Mohsen tells Al Borsa. Look for a tender for further contracts down the road. The Electricity Ministry had previously announced it would not be issuing a set feed-in tariff rate for waste-to-energy projects and would instead set the fees based on the offers investors present. The ministry had initially settled on an FiT of EGP 1.45 per kWh last month.

Arabic news portals are increasingly reliant on social media channels for distribution— the same plague that is eating up profits at western outlets — according to the 1Q2017 Digital Media Index report. The report, which studied 672 news portals in 18 Arab countries, notes that sports news is the most published type of content on Arabic portals at 62%, followed by local news at 59%, and economic content 50%. News portals are also using social media platforms more extensively, the report showed, with Facebook being the most popular. In Egypt, approximately 100% of the estimated 35 mn internet users use Facebook and there are 0.56 online news portals for every 1 mn people. Those platforms each have an average of 3.30 social media channels and 0.49 mobile apps. 83% of all online newspapers in Egypt have presence on Twitter and 89% of them are on Facebook. The complete report from Digital Media Index can be downloaded here and users can also access their eNews Intelligence Dashboard. H/t Wamda.

EARNINGS WATCH-

• Juhayna reported an 8.4% y-o-y decrease in consolidated net profit to EGP 27.3 mn in 2Q2017, according to an EGX filing. The company’s consolidated revenues rose 15.8% y-o-y in 2Q2017 to EGP 1.57 bn.
• Oriental Weavers reported a 28% y-o-y increase in second quarter net profit to EGP 204 mn, according to the company’s earnings release. The company also reported a 54% y-o-y increase in its sales revenues to EGP 2.4 bn during the quarter.
• Eastern Tobacco reported a net profit after tax of EGP 1.7 bn in FY2016-17, up 17.97% y-o-y, according to a bourse filing.

Foreign Minister Sameh Shoukry discussed the security situation in Libya the country’s eastern commander General Khalifa Haftar during a meeting in Paris yesterday, according to a ministry statement. Shoukry stressed the importance of reaching a political solution in Libya — an existential issue for Egyptian security — and lauded the French-brokered agreement that saw Haftar and rival leader Prime Minister Fayez Al-Sarraj pledge to bury the hatchet this past Tuesday. The two promised to institute a conditional ceasefire and hold national elections come spring. Shoukry also discussed developments in the spat with Qatar during a meeting with French National Assembly President François de Rugy.

This comes as internationally backed Libyan House of Representatives — supporters of Haftar and allies of Egypt — reportedly broke off diplomatic ties with Sudan. Sudan’s diplomatic mission in East Libya was apparently given 72 hours to leave the country, a Libyan official tells Al Wasat. The stated reason was that members of the mission were engaged in “activities in breach of diplomatic protocol.” The Libyan National Army had accused Sudan, Qatar and Iran of last month of fostering terrorism in Libya.

The Czech woman who was among the victims of this month’s stabbing attack in Hurghada is effectively brain-dead, Egyptian doctors concluded yesterday, Reuters reports. The woman is “on the verge of death after suffering multiple organ failure” and her deteriorating condition has prevented her from being transferred back home from Cairo.

UN report accuses anti-Houthi coalition of attacking migrant boat: A UN report accused the Saudi Arabia-led military coalition fighting in Yemen, and which includes Egypt, of carrying out a deadly March attack on a Somali migrant boat off Yemen, killing 42, Reuters said in an exclusive. The report added that the alliance had become a cover for some states to avoid individual blame. The UN report added that the attack violated international humanitarian law and threatened the peace, security and stability of Yemen.

The UAE is building a pipeline of IPOs that could come in ahead of the Aramco listing next year, getting a shout in Bloomberg. Gulf sovereign IPOs are the flavour of the month and story goes through the potential listings that could come out of the UAE and their estimated worth. The list includes Abu Dhabi Ports, ADNOC service stations, Emirates Global Aluminum, Emaar, Senaat and GEMS Education.

The video of an Egyptian tank driving over a car laden with explosives inNorth Sinai’s Al Arish made top headlines in the international press yesterday morning after the Ministry of Defense released footage of the incident (watch, runtime 2:27). Most publications, including RT, Haaretz, and The Independent are noting how the quick thinking by the tank crew saved lives in an incident, which killed seven earlier this week. Watch the video (and mute the talking heads).

Cassidy & Associates, formerly a subsidiary of Weber Shandwick, will continue to lobby for Egypt’s General Intelligence Service in the US, Creede Newton writes for Al Jazeera. Cassidy & Associates bought itself from parent company and is getting USD 50k a month plus fees and expense from Egypt to showcase “‘key attributes of [Egypt’s] civil society,’ among other image-rehabilitating acts.”

The New Administrative Capital was noted as among a list of mega projects thatwould transform the world’s greatest cities by 2030 by Business Insider UK. Of the projects named in the lineup, the new capital appears to carry the heftiest price tag at around USD 45 bn. The publication made sure to mention China Fortune Land Company’s massive investment.

Young Nubian activists have protested the planned sale of Nubian land inForkund in hopes of returning to their ancestral homeland, Salma Islam writes for Global Post. After countless “land struggles,” Nubian organizations are filing a “complaint against the Egyptian government before the African Commission on Human and Peoples rights,” in an attempt to “internationalize” their case.

Also worth noting this morning, for one reason or another:

• Ahmed Abou Hashima has five tips for“entrepreneurs fronting their enterprises,” Tamara Pupic writes for Entrepreneur Middle East. Among his tips: The most important investment is the one in your team. Entrepreneurs need to a have a long-term vision. You need to understand but not imitate your competition. It’s key to remain flexible — and to protect your reputation in the market.
• “Saudi Arabia and Egypt have shown "cold indifference" toward crimescommitted by the Israeli regime against Palestinian Muslims at al-Aqsa Mosque,” writes author Daud Abdullah says in an op-ed picked up by Iran’s Press TV.
• Images of the body of 19-year-old Tharwat Sameh which emerged two days after being arrested in Egypt, sparked social media outcry and memories of Giulio Regeni, says Bethan McKernan for the Independent.

President Abdel Fattah El Sisi’s focus on Egypt’s education system at the Alexandria youth conference earlier this week is a positive sign that the president understands the urgency of the issue, Soliman Gouda writes in Al Masry Al Youm. Gouda notes that the president’s acknowledgement of the problem is only the first step, and that the important part is actually formulating and implementing a comprehensive strategy as soon as possible. He calls on the president to turn his words into actions — and urges readers to hold the president to his promise rather than let it be forgotten like other grand statements officials make during speeches and public appearances.

Meet the man who can get machines to make human decisions: Amr Awadallah is “the geek from Egypt who’s ruling the roost in the big data world” with his data analytics company Cloudera, says Alok Soni in a profile for the India-based YourStory. The piece trails Awadallah’s journey from a Cairo University engineering professor to his entrepreneurial success in the California tech industry during the height of the internet bubble. What started out as a shopping comparison service for books through data aggregation and analytics spawned the now USD 2.5 bn listed-company Cloudera.

Co-founded with his business partner Thai Tran, Cloudera specializes in “consensus-driven decision making” and hopes to one day “enable this wave of automation of decisions that will change finance, insurance, governance, smart cities, and how we all live.” (Photo via Vertex Ventures)

We’ve all heard of Bitcoin, but what’s this Ether that’s giving it a run for its money? Ether is a relatively new cryptocurrency that emerged three years ago and appears to be hot right now, growing in value 4,000% year-to-date. The jump goes beyond just speculators looking to cash in on the hot new Bitcoin 2.0: Its value is predicated on the growing believe that Ether’s blockchain technology (which underpins cryptocurrency) “Ethereum” is superior to that of Bitcoin in that it allows for a much more diverse range of applications. It goes beyond a mere payment platform to allow for everything from banking to contracts.

This expanded functionality has made it attractive to big corporates, including Barclays, which is reportedly using Ethereum smart contracts to trade derivatives. And that’s not all: The US Securities and Exchange Commission handed down a landmark ruling on Tuesday which said that Ethereum-based tokens sold off in mass auctions can be considered securities, VICE Motherboard reports.

Want to know what goes on under the hood of this? Don’t ask us — some of us had lives in high school. Instead, we will leave you with this easy to digest clip from CNBC (runtime: 2:33)

Investment opportunities in the oil and gas sector dominated discussions at the Egyptian-Romanian Business Council meetings that kicked off in Bucharest yesterday, Ahram Gate reports. Egypt is also looking to increase its imports of Romanian meat to fulfill domestic needs, according to the council’s deputy president, Ahmed El Sokkary. The two countries are expected to sign MoUs on investment, SMEs, agriculture, water resources and irrigation, and tourism, the Investment and International Cooperation Ministry had said last week.

The Agriculture Ministry is gearing up to impose Global Good Agricultural Practices (GLOBALGAP) on tomato and guava exports as of next season, an unnamed ministry official tells Al Mal. The ministry had announced last month that it would be implementing the internationally recognized farming production standards on its upcoming strawberry, pepper, and grape harvests after a number of Arab countries issued temporary bans on importing Egyptian produce on grounds of them containing alarming levels of pesticides. The Export Development Authority had also rolled out a five-year development strategy for exports that will put in place stricter quality control rules and procedures, as well as heavier punishments for violations.

Highland Import & Export is considering building a cardboard box and packaging factory with an investment of EGP 500 mn, according to Al Borsa. The factory would be based in the Sadat industrial area and would be 80% funded by the firm themselves with the rest coming from various lenders.

The Trade and Industry Ministry plans to tender 15 mn sqm of agricultural land across the country this year, Minister Tarek Kabil said on Wednesday, according to Al Shorouk.

The Egyptian government plans to spend EGP 7.9 bn to upgrade public health facilities and establish new ones in FY2017-18, Al Borsa reports. The Health Ministry is expected to finance 96% of planned projects through state coffers. The Health Ministry’s plan includes refurbishing and upgrading medical services at around 193 public hospitals and establishing 690 new clinics in mostly impoverished and underserved neighborhoods and villages, where access to quality medical services is limited.

Misr Italia is launching its new EGP 5 bn multi-use compound in the North Coast, Kai Sahel, Al Borsa reports. The project will span 900k sqm, and will include residential and commercial buildings, in addition to a hotel. The company will begin taking orders for the first phase of Kai Sahel, which is scheduled for completion in 2021, at the end of this month.

EgyptAir will not be lowering or otherwise amending Hajj season ticket prices, EgyptAir Chairman Safwat Musallam tells Al Borsa. Ticket prices range between EGP 10,600 and EGP 16,400. Musallam’s statement contradicts earlier reports that EgyptAir had agreed to bring down prices following pressure from tour operators. Saudi Airlines announced prices for pilgrimage season with economy tickets coming in roughly EGP 3k cheaper, while business class tickets are going for about EGP 7k per seat less.

Orange plans to support and fund Egyptian technology-focused startups, writes Tom Jackson for Disrupt Africa. Orange’s subsidiary, Orange Digital Ventures investment program, has allocated around USD 56 mn to launch an Africa-focused initiative and fund early-stage companies. Orange’s deputy CEO says his company is willing to work with Egypt “in order to strengthen cooperation … in a context that encourages foreign investment.” Mettling says Orange is considering setting up customer service centres in new technology zones, including in Assiut.

Careem is looking to launch its own version of Uber Pool in Egypt, Al Borsa reports. COO Ramy Kato says Careem is working on launching its own carpooling service that would allow up to four people to share a ride. The service will be launched in other markets first before settling on a model that would work for the Egyptian market, Kato says.

It will cost some USD 1.4 bn to build an electric rail line linking Salam City with Tenth of Ramadan and to the new administrative capital bn, according to Zawya. China could provide as much as USD 725 mn in project financing, with the Egyptian state picking up the balance. The project is being implemented by a consortium of Egyptian construction firms including Petrojet, Arab Contractors, and Orascom Construction along with Chinese partners. We noted earlier this month that the government has cut the timeline for the project to 24 months from 30.

The EGX has completed its semiannual review of its indices announcing the addition of ADIB-Egypt, AMOC, EFIC, and KIMA to the its flagship EGX 30 index. The four companies replace Juhayna, Credit Agricole Egypt, Orascom Construction, and GB Auto, who were moved to the EGX 70 index. Separately, the bourse also announced it signed a cooperation agreement with the Bombay Stock Exchange that allows for information transfer and strengthening strategic ties.

Banque Misr arranged a three-tranche securitized bond issuance worth EGP 174 mn, underwritten by Sarwa Capital, Al Mal reports. Sarwa Capital also served as financial advisor on the transaction. The issuance is backed by securitised mortgage contracts worth EGP 281 mn. We had noted Sarwa Capital was seeking regulatory approval in March for a EGP 1 bn issuance of securitized bonds to be issued within two months.

President Abdel Fattah El Sisi discussed development in western Egypt, including a new “economic and touristic center” in Marsa Matrouh, with Governor Alaa Abou Zeid, according to a presidency statement. Other projects in the pipeline for the region include residential areas, a medical center, a manufacturing and logistics zone, and a commercial port.

Egypt received the first of eight single-seat Rafale aircraft from France on Wednesday, according to IHS Jane’s. Two other aircraft also arrived into the country on the same day, meaning that Egypt has received a total 11 of 25 Rafales it ordered from France in 2015. The Egyptian government is also in talks with Korea to purchase K-9 self-propelled howitzers, according to Korea Times. The K-9s will undergo performance evaluation tests in Egypt later this month, sources said.

President Abdel Fattah El Sisi issued an official decree on Wednesday to establish the Supreme Anti-Terrorism Council, according to AMAY. El Sisi had announced the establishment of the council back in April, after terrorist attacks in Alexandria and Tanta claimed the lives of at least 47 Coptic Christians. Members include the prime minister, House speaker, as well as the ministers of interior, ICT, justice, education, and foreign affairs, as well as a number of other public personalities, including Pope Tawadros II and Azhar Sheikh Ali Gomaa. The assembly will meet once every two months in sessions led by the president.

40k illegal immigrants crossed into Israel from Egypt in 2016, according to the Israeli Central Bureau for Statistics. According to the bureau’s report on foreign workers, the vast majority of those immigrants were Eritrean, while 20% were Sudanese. Israel had increased the height of the electric fence along part of its border with Egypt earlier this year as part of its effort to shut down irregular migration routes.

Egyptian endurance athlete Helmy Elsaeed, along with four Swedish cyclists, set a new world record for the fastest team to cycle across Europe in a 6,000 km journey to raise money for autism charities, Reuters reports. Elsaeed, a former finance professional, is now eyeing representing Egypt in cross-country skiing at the Winter Olympics, which would mark the second time for an Egyptian to compete at the Winter Games, according to the newswire. The last (and first) time an Egyptian appeared at the Winter Olympics was at the 1984 Sarajevo games.