Wednesday, 23 August 2017

As Jared Kushner arrives in Cairo, Reuters claims the US is ordering aid to Egypt cut in protest of our human rights record

TL;DR

What We’re Tracking Today

It’s going to be a ridiculously busy day on the diplomatic front, starting with an exclusive report out of Reuters overnight that US officials want to trim as much as USD 290 mn in aid to Egypt to protest our “failure to make progress on respecting human rights and democratic norms.”

There’s been no official word on the subject out of Cairo or DC, but Reuters’ piece citing two anonymous sources with knowledge of the matter has the ring of truth — it sounds very much like staffers at Foggy Bottom are drawing a line (and, possibly, that they’re trying to box in Secretary of State Rex Tillerson by leaking it). The question is whether Tillerson or the White House will let them — or even have the energy to step in. Also competing for The Donald’s attention this morning is what the New York Times calls a “feud” with Senate majority leader Mitch McConnell, who the Gray Lady reports this morning “has privately expressed uncertainty that Mr. Trump will be able to salvage his administration after a series of summer crises.” We have more on the potential for an aid cut in this morning’s Speed Round, below.

Into the breach steps White House advisor (and First Son-in-Law) Jared Kushner, who is leading a US delegation to Cairo today and is due to meet with Foreign Minister Sameh Shoukry, according to Youm7. Kushner comes with weight behind him in the form of Jason Greenblatt (envoy for international negotiations) and Dina Powell (deputy national security adviser) as the White House makes a push to get Tom and Jerry next door to behave. The Associated Press has coverage of the Gulf leg of the tour, which will also include sit-downs tomorrow with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas.

The UK’s Minister of State for the Middle East Alistair Burt arrives in Cairo for a two-day visit today, during which he is scheduled to meet with Shoukry as well as the education and interior ministers, Al Shorouk reports.

Here’s something blatantly ridiculous about which our friends at Khargeyya could ask the good Mr. Burt: The UK’s Foreign and Commonwealth Office raised its warning yesterday to travelers to North Korea to advise against “all but essential travel” — similar to the advice the good people there are currently giving travelers to South Sinai. The exception is Sharm El Sheikh, to which you can only teleport if you were born English, because flying there is off limits, despite the city carrying no warnings. The UK’s warning on North Sinai is even stricter than that for Pyongyang, as the FCO still warns against all travel to the north of our peninsula.

Cabinet investment roadshow kicks off in Vietnam: Investment Minister Sahar Nasr and Suez Canal Economic Zone chairman Mohab Mamish are in the Vietnamese capital Hanoi today for an investment roadshow, according to a statement from the ministry. The officials have already met with reps of Vietnamese companies to discuss what’s on offer in our marine transportation, education, culture, health, pharma and shipping industries. The roadshow’s next stop is Singapore tomorrow.

A regional ministerial conference on aviation security kicked off in Sharm El Sheikh yesterday with some 400 aviation security officials in attendance, including the president of the International Civil Aviation Organization, in attendance, Ahram Online reports. The gathering wraps up tomorrow.

If you like to eat (or care about social stability) take some time to play around with this gadget: There is an enormous disparity in the affordability of meat for people globally. Egypt, for example, has one of the most affordable meat prices in the world when we look at just sticker prices, according to Caterwings 2017 Meat Price Index. On the 52-country index, Egypt is the fifth-cheapest on average. Ukraine is the cheapest overall, whereas Switzerland has the most expensive meat prices in USD terms. The Meat Price Index is divided into five separate categories: beef, chicken, seafood, pork, and lamb. All prices were collected from national grocery outlets at full price without discount. There are some caveats to the report: While the sticker price of beef in Omm El Donia is among the cheapest in the world, for example, it would take an Egyptian working on minimum wage 20.1 hours in order to be able to afford a 1kg piece of beef — the fifth longest in the world. The same goes for chicken, where Egyptians have to work the third-longest number of hours in order to be able to afford chicken. The situation is even more challenging with seafood, where it takes an Egyptian working for minimum wage 44.2 hours, the longest number of working hours in the ranking, to be able to afford 1kg. In contrast, it takes a person working on minimum wage in Switzerland, where the sticker prices are most expensive, just 3.1 hours to be able to afford 1kg of beef and in Norway just 1.3 hours to afford a 1kg piece of fish.

Here’s a list we’re not proud to top: Egypt was the origin of the greatest number of unique IP addresses used in volumetric DDoS attacks in 2Q2017, with 32% of the global total, according to cloud delivery provider Akamai’s quarterly State of the Internet/Security Report (pdf). DDoS attacks increased by 28% q-o-q in 2Q2017, following three quarters of decline, the report says.

Oh, and can we just say we love the fact that the UAE will be taxing soda / pop / soft drinks at 50%? We’re generally not the most pro-tax folks in the world, but governments need resources, and sugary beverages are a health scourge. The good people at our Finance Ministry should follow suit.

Public service announcement: Friday, 1 September will be the first day of Eid Al Adha, with Waqfat Arafat taking place on Thursday, a Dar Al Iftaa statement cited by AMAY confirmed yesterday. The National Astronomy and Geophysics Institute had earlier given the same dates. The ball is now in Cabinet’s court to decide whether Eid starting on a Friday means we’re back to work on Monday, 4 September or Tuesday, 5 September.

What We’re Tracking This Week

The annual central bankers summit in Jackson Hole, Wyoming is this Thursday, with the most pressing concern for central banking chiefs being inexplicably low inflation despite a resurgent global economy, according to Bloomberg. U.S. inflation fell to 1.4% in June, while consumer prices in the euro area — currently at 1.3% — have wavered since the start of the year. Both the Fed and the ECB will shoot for 2% inflation, although the ECB formally aims below, but close to, that level.

The USD rebounded in global trading yesterday on the prospect that Yellen might hint at a faster rate of monetary tightening at the symposium, the Financial Times reports

Enterprise+: Last Night’s Talk Shows

While no single topic reigned supreme on the airwaves last night, the talking heads picked up on some noteworthy issues, including the government’s automation of its financial transactions and an exposé on organ trafficking in Omm El Donia.

Say goodbye to paper cheques from government: On Masaa DMC, Osama Kamal spoke with E-Finance’s Ibrahim Sarhan about the Finance Ministry’s automation of the government’s financial transactions. Paper cheques are on the way out at some 4,500 accounting units across government, Sarhan says, in a system that will cut down on fraud and save time (watch, runtime 8:20).

Organ trafficking doesn’t happen in state hospitals, the Health ministry would like you to know: The Health Ministry is on a media blitz against a German documentary on organ trafficking in Egypt, which spokesperson Khaled Mogahed told 90 Minutes’ Moataz El Demerdash is an attempt to destroy Egypt’s burgeoning medical tourism sector. Mogahed stressed that the hospitals depicted in the documentary are not ministry-affiliated (watch, runtime 15:31).

Standing in for Lamees Al Hadidi on Hona Al Asema, Dina Zahra was reduced to talking about annual summer sales at clothing stores with Federation of Egyptian Chambers of Commerce Secretary-General Alaa Ezz, who told the host that clothes have gotten expensive due to the float of the EGP. Groundbreaking stuff.

Meanwhile, Yahduth fi Masr’s Sherif Amer had a chat with Sports Minister Khaled Abdel Aziz about the new Sports Law and its effect on the governance of sporting clubs. We can no longer stand our club, so this is where we tuned out.

Speed Round

Speed Round is presented in association with

US to withhold over USD 290 mn in civilian and military aid to Egypt? The US government has reportedly decided to withhold nearly USD 300 mn in aid to Egypt — most of it earmarked for military programs — “because of its failure to make progress on respecting human rights and democratic norms,” two sources familiar with the matter told Reuters in a story that broke overnight. The news has yet to be made official. Of the USD 290 mn, some USD 30 mn was earmarked for economic support, with the balance allegedly set to be trimmed from military financing programs. Most of the funds will “now go into an account where it will be held pending Egyptian improvement on human rights and democracy.”

Lost patience? The Reuters piece has largely been corroborated by independent reporting from the Associated Press, which also fell back on anonymous sources. The key question is whether this is a case of lower level staffers boxing in the White House and Secretary of State Rex Tillerson, or whether as reported Tillerson chose to issue a “waiver saying that USD 195 mn [in aid] to Egypt is in the U.S. national interest, but had decided to hold off on spending it.”
Despite warming relations between President Abdel Fattah El Sisi and US President Donald Trump, Egypt’s president came under fire from US senators earlier this year after he ratified a controversial NGOs bill, which international rights groups and activists widely viewed as repressive. US officials had said last month that the proposal to cut aid was on the table but not yet final.

US law requires the administration “to withhold 15%, or USD 195 mn, of the USD 1.3 bn it gives Egypt annually” in military aid for human rights issues. The Obama administration had gone so far as to freeze aid to Egypt for two years in 2013, after mass protests expelled Islamist president Mohammed Morsi from office. With Egypt being one of the US’s main allies in the region, “the decision reflects a US desire to continue security cooperation as well as frustration with Cairo’s stance on civil liberties,” Reuters says.

Rights groups including NYC-based Human Rights First welcomed the news, which is getting widespread pickup in the international press this morning.

Raising interest rates, floating EGP improved banking conditions but dampened investments: The CBE’s decision to raise interest rates and float the EGP have improved conditions for the banking sector, said our friend Mohamed Ozalp, CEO at BLOM Bank Egypt. However, the former appears to have slowed investments and dampened consumer demand, Ozalp tells Reuters in an interview on Tuesday. “Corporate lending is increasing, but at a slower pace than we had planned,” Ozalp said, adding he expected to see demand for some large loans before year end. Retail loans were also hit by high interest rates, he said, expanding at a lower rate than anticipated.

M&A WATCH- Egyptian direct carrier billing platform TPay has acquired 100% of DCBEgypt, the second largest direct carrier billing platform service provider in Egypt after TPAY, for an undisclosed fee. “TPay’s purchase of DCBEgypt represents the first wholesale acquisition by a fintech company in Egypt,” Wamda’s Radwa Rashad says. TPay is a portfolio company of A15. A15’s CEO Fadi Antaki says “to boost [its] growth even more, TPay has moved to acquire the second largest direct billing player in the Egyptian market to become without doubt the number one direct billing company in the region.” The acquisition makes TPay “the sole direct carrier billing company in Egypt and in the Middle East,” Rashad notes. We’re a bit late to this story — the news first broke earlier this month — but are pleased to have stumbled over it.

M&A WATCH- Television broadcaster al Al Hayat, which was recently swirling the drain after allegedly failing to make good on payments owed to state-owned broadcast services providers, is now in play, according to Al Mal. The newspaper reports that owner Al Sayed Al Badawi is in sale talks, with prospective buyers said to include Yasseen Mansour, recently pardoned Hisham Talaat Moustafa, and an unnamed Emirati.

MOVES- Ayman El Saie was appointed as head of the Egyptian Mineral Resources Authority (EMRA), according to Ahram Gate. El Saie succeeds Omar Taima, who was at loggerheads with the largest gold explorers in the country over the terms of the most recent gold exploration tender. Centamin, Aton Resources, and Thani Stratex had all refused to participate in the bid round citing concerns over EMRA’s insistence that production sharing agreements were the way to go. Taima had challenged them saying the bid round was “successful,” despite no participations from major companies.

MOVES- Former EGX head and current interim EFSA Chairman Mohamed Omran has been appointed to the board of directors of the Central Bank of Egypt, a source told Al Masry Al Youm. Omran would take the board seat by virtue of being at the helm of EFSA.

EARNINGS WATCH- London-listed Integrated Diagnostics Holdings, the leading player in Egypt by market share on the strength of its Al Mokhtabar and Al Borg brands, reported at 26% surge in its bottom line to EGP 160 mn in 1H2017, driven by a 24% growth in its top line to EGP 685 mn, strong interest income and a contracting in FX charges. CEO Dr. Hend El Sherbini noted that despite the impact of Ramadan and the feast — both of which fell fully in 1H2017 this year — the company was “not only been able to execute on our growth strategies amidst ongoing macroeconomic crosscurrents, but that we have done so at a time when consumer brands have suffered significant challenges to both volumes and margins.” El Sherbini confirmed IDH’s full-year guidance for “revenue growth in excess of 20% and … EBITDA margins at or above 40% as we move past the seasonal impact of Ramadan.”

EARNINGS WATCH– Cleopatra Hospitals Group reported a 184% y-o-y increase in consolidated net income to EGP 23.6 mn in 2Q2017. Revenues for the quarter grew 29% y-o-y to EGP 261.8 mn. The surge in profit was driven by strong revenue growth, improved cost efficiencies, and higher interest income. “Strong results are also a reflection of the industry’s defensive nature amid an increasing challenging macro environment, and come despite the second quarter of the year typically being a low season for healthcare in addition to the Ramadan effect,” said CEO Ahmed Ezzeldin. He added that the company is actively pursuing expanding both Cleopatra’s network and its portfolio of specializations. On the company’s operations, the Group’s first polyclinic in New Cairo is set to be operational before year-end. The Group is also expected to close an acquisition of real estate assets of a hospital in West Cairo in 4Q2017. The Group is also acquiring a large hospital to the north of Cairo, and is investing in a brownfield hospital project in Bani Sweif.

Cairo court acquits Hussein Salem of money laundering: A Cairo criminal court acquitted former shareholder in East Mediterranean Gas Company Hussein Salem of charges of money laundering linked to the export of gas to Israel on Tuesday, Ahram Online reports. His son and daughter, who were also defendants in the case, were acquitted. The three has been convicted back in 2011 and sentenced to seven years in prison.

Insider trading, brought to you by WhatsApp: The US Federal Bureau of Investigation is facing new challenges clamping down on insider trading now that information is being transmitted on encrypted mediums such as WhatsApp, reports the Financial Times (paywall). In a first, the UK’s Financial Conduct Authority recently fined a banker at Jefferies for using WhatsApp to share confidential information. More cases are likely to follow as the technological race continues, with houses including Goldman Sachs recently investing in an artificial intelligence technology that tracks digital movement across platforms rather than the information being moved.

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The Macro Picture

The total value of global M&A transactions are set to surpass USD 3 tn this year, but the average ticket size is getting smaller, John Waldron, Goldman Sachs’ Investment Banking Division Co-Head, says. While 1H2017 has been “very robust,” the difference this year is that, instead of having them driven by “large-scale consolidations,” the M&A transactions are characterized by smaller transactions. “More middle-market, upper-middle-market” transaction activity, he says, with more activity geared towards “niche-y acquisitions.” Waldron “points to legislative gridlock in Washington and regulatory uncertainty as reasons for the shift, but says that even as it remains difficult to forecast the political backdrop, investors have remained broadly supportive of transactions across both the debt and equity markets.” Waldron adds that “the markets are really prepared to step in and finance cash-based M&A … And we expect that to continue” (watch, runtime 02:32).

Image of the Day

That’s what a EGP 1,500 burger looks like: With all this talk of inflation (not to mention the meat price index above) we bring you Food Gun — a recently opened restaurant in Heliopolis which is selling 280g Wagyu beef burgers for EGP 1,495. Two ways this could go: You can impress a date with your willingness to throw away EGP 1,495. Or prove you’re a moron who doesn’t know the value of money by doing the same. That’s roughly USD 85 for a burger at this morning’s exchange rate.

Egypt in the News

The prospect of the US withholding c. USD 290 mn of aid Egypt to pressure Cairo on human rights is dominating headlines on Egypt this morning after Reuters broke the story overnight. Congress has yet to be informed of the finding.

Burn her at the stake: Controversial English literature professor Mona Prince is being accused of “glorifying Satan” for teaching students John Milton’s Paradise Lost, The Telegraph reports. The professor, who teaches at Suez University, which purports to be an academic institution, was accused of spreading “destructive ideas” to students and “for calling for destroying and rejecting that which is sacred in favour of the authority of the human mind in determining its own fate/destiny,” among other nonsensical, Inquisition-era allegations. Topping it off, the alleged academics in charge of the “investigation” at the “university” said they will send their findings to local prosecutors, “who might charge Dr Prince with insulting Islam,” according to The Telegraph. “It reminds me of the women accused of being witches in Arthur Miller’s The Crucible. I feel like I should be burned now … Paradise Lost is beautiful, it’s a masterpiece, and I tried to compare it with Arabic literature so it would feel closer to my students. I asked them to read about the image of God and the image of Satan as presented in literary work,” Prince says.

Virgin Mary Monastery in Assiut receives tens of thousands of Coptic Christians and Muslims every year in August. This year’s event is markedly different after authorities banned non-Christians from attending, Hamada Elrasam reports for VOA. The site is believed to be where the Holy Family took refuge after being persecuted by King Herod.

Other stories worth a skim this morning:

  • The Rafah border crossing is expected to reopen on a “regular schedule” come September, by which time Egyptian authorities expect renovations and new security measures to be complete, Haaretz reports (paywall).
  • Akhbar Al Youm’s state-ordered takeover of the Daily News has journalists in and out of the paper worried, according to Al Bawaba, which speaks with current and former journalists.
  • Returning to Egypt after seeking refuge in the US from political persecution is a “horrifying” option that could result in imprisonment or death, journalist and former detainee Maikel Nabil Sanad writes for the Huffington Post.
  • Arab states’ recent legislative changes on women’s rights are a positive step, but the cultural foundation remains “hard to shift,” with the majority of Egyptian men and women maintaining conservative and patriarchal viewpoints, Shereen El Feki says in an opinion piece for the New York Times.
  • The New York Times reviews Mohamed Diab’s critically acclaimed film, Clash, in this piece by Glenn Kenny.
  • Al Azhar fighting the good fight for a moderate tone to Islam. Governing sermons, issuing moderate fatwas and getting out amongst the people with booths in public spheres are some of the strategies. Voa News has a look.
  • Egyptian theater is witnessing a revival, as a dozen plays premiered this month, David Awad writes for Al-Monitor, zeroing in on Yehia Al Fakharany’s “Layla min Alf Layla” (A Night Out of 1,000 Nights) at the National Theater.

On Deadline

Ikhwan’s frozen assets show the magnitude of the group’s economic empire: The amount of cases the Ikhwan asset-freeze committee has had to process since 2013 gives us a more tangible idea of the vastness of the outlawed group’s economic empire, Hassan Abou Taleb writes for El Watan. With this wealth under the group’s belt — which Abou Taleb likens to a mafia — it’s no wonder the Ikhwan were able to thrive and draw in more followers over the years, he says.

The asset free in numbers: By its own count, the committee has frozen accounts of some 1,400 individuals (EGP 154.8 mn), 1,120 civil society organizations (EGP 283.3 mn), and 120 schools (EGP 21 mn), according to Al Masry Al Youm

Worth Reading

You are not alone — people start hating their jobs at 35: One in six British workers over age 35 said they were unhappy in their jobs, according to a survey of more than 2,000 U.K. employees by human resource firm Robert Half UK. That’s nearly double the number of workers under the age of 35. Nearly a third of people over 55 said they didn’t feel appreciated at work, while 16% said they didn’t have work friends, Bloomberg reports. It all comes down to changing priorities and the loss of youthful naivety that comes with experience. Younger workers get excited at having a new job and have not been burned out yet, making more attractive than their older counterparts to performance-driven employers. Once they hit their 30s, however, the stress of the job — whether it is the demands of higher ranking position or disappointment at not getting there — coupled with changing life priorities such as having a family makes the job lose its luster.

Diplomacy + Foreign Trade

Foreign Minister Sameh Shoukry met with President Kersti Kaljulaid in the capital Tallinn yesterday, a ministry statement says. Discussions centered around security and immigration as well as cooperation in energy and ICT investments, as well as e-governance. Xinhua also has the story.

Shoukry concluded his tour in Europe with a stop in Lithuania, where he met President Dalia Grybauskaitė and Foreign Minister Linas Linkevičius to discuss ways to boost bilateral relations with the entire Baltic region.

Trade relations, including those with Turkey and Qatar, should remain separate from politics, Trade and Industry Minister Tarek Kabil tells Al Shorouk. The minister says that trade agreements with both state have been mutually beneficial, with Egyptians exports to Turkey up 30% y-o-y in 1H2017 to USD 1.07. In contrast, Turkish exports to Egypt fell 50% y-o-y, he adds. The story is also on Anadolu Agency.

Electricity Minister Mohamed Shaker met yesterday with a World Bank delegation in town to discuss potential cooperation and funding of ongoing and future energy projects, according to a ministry statement. The World Bank is interested in contributing further to the field’s development and to private sector participation.

Infrastructure

Damietta Port Authority receives four international offers for new container terminal

The Damietta Port Authority received four international offers for the development of a second container terminal at the Damietta Port, authority head Ayman Salah told Al Borsa on Tuesday. The bids came from France’s CMA CGM, Germany’s Hapag-Lloyd, United Arab Shipping Company, and China Harbor. The project was originally awarded to DIPCO in 2006, but repeated delays in execution due to liquidity shortages saw the contract terminated in arbitration. Salah said the authority is looking to establish the terminal, whose cost had then been estimated at USD 1 bn, under a JV between an international shipping line and port operator and the Damietta Container & Cargo Handling Co., which is hoping to fund more than 15% of the project, while also allowing state institutions and banks to participate.

Basic Materials + Commodities

UAE to provide Dhs 8 mn to develop Egypt’s date industry

The UAE government plans to invest Dhs 8 mn (USD 2.18 mn) to develop Egypt’s date palm industry, Gulf News reports. The announcement comes ahead of the third annual Egyptian Date Palm Festival, which will be held in Siwa from 8-10 November.

Egypt has enough wheat to last until February

Egypt has 4.857 mn tonnes of wheat in its strategic wheat reserves, which is enough to last until February 2018, the Supply Ministry’s spokesperson told Reuters. The country targets buying around 7 mn tonnes of imported wheat in FY2017-18.

Health + Education

Arrests for organ trafficking

Egyptian security forces reportedly arrested a group of 12 nurses, doctors, and other hospital workers on Tuesday on suspicions of organ trafficking, the AFP says. Our virtual ink had barely dried, as the arrests come one day after the Health Ministry vehemently denied Egypt was an organ-trafficking hub, as a German documentary had claimed.

New meals for state run schools

The Education Ministry has revealed a plan to spend EGP 1.1 bn to revamp public school meals after thousands suffered food poisoning last year, Gulf News reports. The plan revolves mainly around removing processed cheese, the prime suspect in the poisonings. New meals will also be vetted by the Food Safety Authority.

Tourism

Egypt has become one of TUI’s fastest growing markets-TUI

Egypt has become one of travel company TUI’s fastest growing markets, TUI CEO Fritz Joussen tells Bloomberg’s Christopher Jasper. This comes despite the UK ban that persists on flights to Sharm El Sheikh, revealing that Europeans will keep traveling normally despite terror threats and attacks, such as the most recent on Barcelona.

Automotive + Transportation

Transport Ministry talks rail upgrades with H. Cegielski, Bombardier

Transport Minister Hisham Arafat discussed railway upgrades with a delegation from Poland’s H. Cegielski – Poznań S.A. and Bombardier’s Italian arm, Al Mal reports. Cegielski is reportedly looking to manufacture new locomotives locally and provide training for workers in the field. The project would be financed through a Polish government facility with a 25-year maturity, the newspaper adds. Bombardier is also expected to soon finalize procedures for Egypt’s purchase of USD 10 mn worth of spare parts. Discussions over railway upgrades rose to the forefront of public debate after a train collision earlier this month killed more than 40 people.

Banking + Finance

NBE earns USD 12 bn from foreign exchange

The National Bank of Egypt has earned north of USD 12 bn from foreign exchange since 3 November, Vice Chairman Yahia Aboul Fotouh tells Daily News Egypt. This week saw the bank launch the first two branches of its foreign exchange bureau, Al-Ahli Exchange Company, with EGP 200 mn in issued capital and EGP 50 mn in paid-up capital. NBE plans to add 30 branches to its network over the coming two years.

Legislation + Policy

National Council for Childhood and Motherhood prepares bill to curb child marriage

The National Council for Childhood and Motherhood is preparing a draft law that aims to curb underage marriage, Deputy Health Minister Maisa Shawky said, Al Shorouk reports. The bill is largely focused on making it illegal for wedding officiants (ma’zouns) to allow underage girls to enter urfi (undocumented) marriages. No details were provided on the penalties.

Egypt Politics + Economics

Finance Ministry to consolidate state bank accounts into TSA by end of November

The Finance Ministry expects to consolidate all state bank accounts into a Treasury Single Account (TSA) by the end of November 2017, Daily News Egypt reports. The state budget will be linked to the TSA, effectively completing the transition from cash to electronic payments for all state- and budget-related transactions. Finance Minister Amr El Garhy had said earlier this month that the move will help the state monitor and reduce spending by as much as 10%.

ECA to begin reviewing case against electricity distribution companies this week

Egyptian Competition Authority (ECA) will meet with Electricity Holding Company officials this week to discuss a case brought against six electricity distribution companies for allegedly selling electricity meters at double price, Daily News Egypt reports. The meter market is monopolized by the state-controlled North Delta Company, which has since denied any connection to the issue, maintaining that it sticks to the state-set prices. The meeting is likely to result in the ECA ordering distribution companies to return the price difference, sources close to the matter tell the newspaper.

Suez Canal revenues record USD 447.1 mn in July

Suez Canal revenues increased 4.7% m-o-m in July to USD 447.1 mn, Reuters reports.

National Security

Russia will deliver 15 Ka-52 Alligator attack helicopters to Egypt by year-end

Russia will deliver 15 Ka-52 Alligator attack helicopters to Egypt by the end of this year, Russian Helicopters Holding Company CEO Andrey Boginsky told Sputnik on Tuesday at the Army-2017 forum. "In August we plan the delivery of the second batch of three Ka-52s to Egypt, the first three machines have already been delivered — Egyptian specialists are currently being trained on them.”

Sports

Egyptian football clubs get to sign more foreign players in the new season

Egyptian football clubs will be able to sign four foreign players, up from a current three, starting next season, BBC reports. “In addition clubs can also sign a maximum of two further players from Syria or Palestine.”

On Your Way Out

AUC Professor becomes first Egyptian to chair UNESCO’s UIL: AUC Professor Malak Zaalouk recently became the first Egyptian elected to the position of chairperson of the UNESCO Institute for Lifelong Learning (UIL), Albawaba reports. Zaalouk is Professor of Practice and Director of the Middle East Institute for Higher Education at AUC’s Graduate School of Education.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.7065 | Sell 17.8065
EGP / USD at CIB: Buy 17.71 | Sell 17.81
EGP / USD at NBE: Buy 17.72 | Sell 17.82

EGX30 (Tuesday): 13,115 (+0.1%)
Turnover: EGP 361 mn (60% below the 90-day average)
EGX 30 year-to-date: +6.2%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session up 0.1%. CIB, the index heaviest constituent ended up 0.3%. EGX30’s top performing constituents were: Domty up 4.0%, Qalaa Holdings up 2.7%, and Porto Group up 2.6%. Yesterday’s worst performing stocks were: Cairo Oils and Soap down 1.4%, Elsewedy Electric down 1.2%, and Global Telecom down 1.1%. The market turnover was EGP 361 mn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +0.1 mn
Regional: Net Long | EGP +3.8 mn
Domestic: Net Short | EGP -3.9 mn

Retail: 76.8% of total trades | 73.2% of buyers | 80.4% of sellers
Institutions: 23.2% of total trades | 26.8% of buyers | 19.6% of sellers

Foreign: 13.7% of total | 13.7% of buyers | 13.7% of sellers
Regional: 6.7% of total | 7.2% of buyers | 6.2% of sellers
Domestic: 79.6% of total | 79.1% of buyers | 80.1% of sellers


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PHAROS VIEW

Financial Conditions Index — An Apparent Monetary Tightening After Two Rounds of Interest Rate Hike: The Pharos Financial Conditions Index (FCI) rose significantly following two consecutive interest rate hikes on May and July, suggesting economic activity growth would slow down in 3Q2017. The real M2 annual growth reflected further tightened monetary conditions, partly due to the impact of the inflationary reaction to higher fuel and electricity prices in July, while EGX continued to move within a flat range in July. The overnight interbank spread rose from 0.4% in June to 0.8% in July. Furthermore, the EGP nominal exchange rate appreciated by 1.5% to EGP 17.9 per USD 1. However, we expect the real GDP growth to reach 4.5% in FY2017-18 on a narrower trade deficit and a higher foreign investment. You can view the full report here (pdf).

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WTI: USD 47.70 (-0.27%)
Brent: USD 51.87 (+0.41%)
Natural Gas (Nymex, futures prices) USD 2.93 MMBtu, (-0.17%, September 2017 contract)
Gold: USD 1,288.80 / troy ounce (-0.17%)TASI: 7,253.52 (+0.39%) (YTD: +0.60%)
ADX: 4,474.70 (-0.46%) (YTD: -1.59%)
DFM: 3,611.22 (+0.45%) (YTD: +2.28%)
KSE Weighted Index: 429.03 (+0.28%) (YTD: +12.88%)
QE: 9,065.34 (0.00%) (YTD: -13.14%)
MSM: 4,972.30 (+0.58%) (YTD: -14.01%)
BB: 1,307.65 (-0.16%) (YTD: +7.15%)

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Calendar

31 August-04 September (Thursday-Monday): Eid Al-Adha, national holiday as specified by the Astronomical and Geophysics Institute. The Thursday is the waqfat Arafat, with the first day of the Eid on Friday, 1 September.

September — The House of Representatives is due to begin discussion of the proposed bankruptcy bill.

06 September (Wednesday): The Emirates NBD Egypt PMI report for August released.

06-09 September (Wednesday-Saturday): 2017 China-Arab States Expo (Egypt is the Guest of Honor), Ningxia, China.

08-09 September (Friday-Saturday): Educate Me’s Conference for Egyptian Education (Mo’allem), AUC, Cairo

13 September (Wednesday): EIB MED Conference: Boosting investments in the Mediterranean Region, Cairo.

13-15 September (Wednesday-Friday) Financial Inclusion Conference in Sharm El Sheikh.

15-18 September (Friday-Monday): Sharm Travel Market, venue TBD, Sharm El Sheikh.

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

19 September (Tuesday): Deadline for applications for funding under the Newton Institutional Links programme.

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).

22-24 September (Friday-Sunday): CairoComix Festival, AUC Tahrir Campus, Cairo.

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

23-25 September (Saturday-Monday): Invest In Africa Conference and Exhibitors Summit, Gala Theater Complex, 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.

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.

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

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

23-27 October (Monday-Friday): 29th Business and Professional Women International Congress themed “Making a Difference through Leadership and Action,” Mena House Hotel, Cairo. Register here.

06-07 November (Monday-Tuesday): Crisis Communications Conference, Four Seasons Nile Plaza Hotel, Cairo.

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

26-29 November (Sunday-Wednesday): 21st Cairo ICT, Cairo International Convention Center, Nasr City, Cairo.

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.

07-09 December (Thursday-Saturday): The Africa 2017 forum: “Business for Africa, Egypt and the World” Conference, Sharm El Sheikh.

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

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

17-21 February 2018 (Wednesday-Saturday): Women For Success – Women SME’s "World of Possibilities" Conference, Cairo/Luxor.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

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