Monday, 11 September 2017

Have we hit peak inflation?

TL;DR

What We’re Tracking Today

Is it too much to hope Inflation levels are cooling? The central bank announced that annual headline inflation in August dropped to 31.9% from 33.0% a month before, while core inflation dipped to 34.86% from 35.26% in July, leading analysts to think Egypt’s inflation has peaked. The elephant in the room, so far as we’re concerned? One of the guys we know has crunched the numbers and is convinced that inflation for the nation’s middle class is running at something like 85%. We have full coverage of the central bank’s inflation announcement in in the Speed Round, below.

The annual Bright Star military exercises between US and Egyptian armed forces kickedoff yesterday for the first time in eight years amid an awkward time in US-Egyptian relations. North Korea still looks to be a sticking point (more in the Speed Round).

If you’re in energy and think we could become a regional hub, keep your eye on Israel, where an expanding corruption probe has dragged down shares of Delek Group (which controls the Leviathan and Tamar field from which we hope to import gas by reversing the Arish-Ashkelon pipeline) and which threatens energy minister Yuval Steinitz. Bloomberg has the story.

It’s Patriot Day in America in observance of the 11 September 2001 terror attacks. It is not a federal holiday, but the US flag will fly at half-staff at government buildings and at American embassies around the world, and a moment of silence will be observed at 8:46 EDT, the time at which American Airlines Flight 11 struck the North Tower of the World Trade Center. Tom Junod’s wrenching “The Falling Man” for Esquire remains the best piece we have read about that day.

Two of the best stories we’ve read in recent weeks are New York Times pieces we picked up on the weekend, but left out of yesterday’s issue on space considerations. “What the Rich Won’t Tell You” should resonate with, well, a good many of us. In it, a researcher outlines her work on how — and why — workers in finance and other privileged folk downplay their wealth.

Then go read “Finding God in a Hot Slice of Pizza,” wherein memoirist Tova Mirvis struggles with three midlife crises that should resonate with many here in Egypt: Her break with the orthodox strictures of her religion, her divorce, and what it means to be a supportive parent — all told through a decidedly non-kosher piece of pizza.

What We’re Tracking This Week

Apple’s big iPhone reveal is just one day away now. A Sunday leak about the company’s newest iOS and devices said the “most important new phone for years will be called the iPhone X,” according to Bloomberg, picking up on what appears to have been the release by a disgruntled employee of a gold master of iOS11 to MacRumors and 9to5 Mac (here and here). The iPhone 8 and 8 Plus will also be revealed tomorrow, but the X will be “the premium version with an all-new design, crisper OLED screen, improved cameras, and a 3-D facial recognition scanner for unlocking the device.” You’ll be able to livestream the event though here at 7pm CLT (10am Pacific) from the Steve Jobs Theatre on Apple’s new campus.

Not an iSheep like us? Geoff Fowler at the Wall Street Journal has your back. Go read “Android’s Best Smartphones Raise the Bar for the Next iPhone,” which argues that “Samsung Galaxy Note 8, Essential Phone and OnePlus 5 define what it means to be a smartphone in 2017. What’s left to make Apple’s upcoming phone stand out?”

Pharos Holding is hosting its “Egypt Banking Day” eventon Wednesday, 13 September to highlight developments in the banking sector domestically. The event aims to provide insight on the banking sector through one-on-one meetings, as well as to foster closer relationships and open communications between the banks and investors. Egypt Banking Day will focus on allowing more than 40 fund managers to meet and discuss the growth of and issues surrounding the local market with local bank management teams.

Still flocking to Sharm El Sheikh are international officials and central bank governors from 94 countries have to attend the Alliance for Financial Inclusion’s (AFI) Global Policy Forum, which runs from 13-15 September. Enterprise will be joining the media horde in Sharm this week for coverage. Al Masry Al Youm notes that former Deputy Governor of the Bank of England and the incoming director of the London School of Economics, Nemat Shafik, will be giving a pre-recorded speech at the event.

The Council of State is expected to begin reviewing the executive regulations to the Investment Act, while Telecom Egypt is, once again, said to be set to launch its mobile telephone network.

The Egyptian-Sudanese-Ethiopian committee on the Grand Ethiopian Renaissance Dam convenes Thursday in Atbara, Sudan, Foreign Ministry spokesperson Ahmed Abou Zeid tells Ahram Gate. The assembly’s 15th meeting will discuss the report prepared by French consultants on the dam’s impact on water supplies. Negotiations had reportedly failed during meetings held last May.

On The Horizon

Finance Minister Amr El Garhy is heading to Manama on 16 September to participate in Bahrain’s Geo-Economic Conference, which will run for two days, Ahram Gate reports. The conference will focus on the effects of geopolitical and geoeconomic changes on world economies, energy, and trade and business policies.

A UK trade delegation headed by trade envoy Sir Jeffrey Donaldson is expected to announce new investments in infrastructure during a trip to Cairo at the end of this month.

Enterprise+: Last Night’s Talk Shows

Positive inflation results gets minimum play on the airwaves: After what seemed like years of having ear drums perforated by the talking heads on prices, they now have their drop in inflation. And surprisingly, the news is receiving little airtime, even from Amr Adib (the most vocal one on the corrosive impact of inflation of the past year) who gave the story a pass.

Luckily, Hona Al Asema’s Lamees Al Hadidi was on the case. The host delved into the drop in the annual rate of inflation with Arqaam Capital senior economist Reham El Desoki. El Desoki had to explain the basics of calculating the annual rate when asked as to why there was no tangible drop in prices. The economist said inflation is expected to continue its downward trend through the remainder of this year and next. She also told Lamees that the average citizen will begin to see a noticeable difference in the prices of goods once there is enough supply to meet demand, while citizens’ purchasing power is expected to increase as the economy continues to grows and the EGP stabilizes.

However, El Desoki pointed out that these changes, despite being positive, signal to potential investors that the Egyptian economy remains in transition, which may slow foreign direct investment (watch, runtime 7:28).

Al Hadidi briefly spoke about the Education Ministry allowing some international schools to raise prices with ministry spokesperson Ahmed Khairy(watch, runtime 26:28). We have more on the issue in the Speed Round.

Kol Youm’s Amr Adib’s sole contribution to the inflation debate was discussing rising prices on stationery (apparently, he’s in charge of Back to School season for the household). Social Solidarity Minister Ghada Wali said a ministry-affiliated body will allocateEGP 3-4 mn per annum to buying school bags for charity. Wali also announced that Nasser Bank has begun offering student loans of up to EGP 15k for private school tuition fees (watch, runtime 5:59).

Adib also discussed the latest product of the presidential election rumor mill, namely that former Arab League Secretary General Amr Moussa is among several figures mulling a run in 2018 (watch, runtime 1:37). Moussa called Adib himself to deny the rumor, saying that he’s going to sit out the presidential race (watch, runtime 3:37). The diplomat rather diplomatically sidestepped the question of whether he’d support a re-election bid by the incumbent, saying as he doesn’t know who will run against President Abdel Fattah El Sisi (watch, runtime 3:50). We’re surprised Ahmed Shafik’s name was not brought up by Adib again.

Human rights are only for the literate, right, ‘professor’? Meanwhile on 90 Minutes, Moataz El Demerdash had a chat with purported “AUC Sociology” professor Saeed Sadek about his proposal to bar illiterate citizens from getting married. Sadek said that Egypt’s illiterate — which comprise at least 30% of the population — are more likely to reject family planning and instead give birth to several children they can’t always provide for, which begets issues such as poverty, unemployment, crime, and terrorism (runtime 54:36). Your Monday Morning Eugenics Lesson is brought to you by Dr. Himmler’s Sterilization Clinic. We’re thinking this tips over from freedom of speech / academic freedom into hate speech, but, you know, color us liberals.

(Oh, and before we all go lynch AUC for running a Himmler Chair in Race Hygiene: Mr. Sadek was quoted in the press as recently as 2013 as a professor of “sociology” and of “political sociology” at AUC, but does not appear on the university’s website as a current faculty member, so we’re thinking former adjunct or retiree.)

Speed Round

Speed Round is presented in association with

Have we hit peak inflation? Annual urban headline inflation stood at 31.9% in August, down from 33.0% a month earlier, according to CAPMAS. The core inflation rate came in at 34.86%, dropping from 35.26% in July. Inflation rates showed a deceleration in food price inflation, although it was still the main driver behind the 1.1% m-o-m headline inflation rate. “The numbers indicate that the positive base effect has indeed kicked in … supporting our view that inflation has likely peaked in August,” EFG Hermes’ Abu Basha wrote in a note yesterday.

Inflation to hit 20s by November / December? Abu Basha expects inflation rates to fall “into the 20s% in November as the positive base effect sets in at an accelerated pace. We see inflation at 20-22% in December before falling to high teens in January,” potentially setting up an interest rate cut in early 2018. Arqaam Capital senior economist Reham El Desoki tells Bloomberg, “This month’s figures suggest that businesses were not able to pass on the full extent of the increase in costs to consumers so as not to hurt demand for their products and services … Inflation should remain within the same range in the coming two months before falling to the mid-twenties range in November.” Allen Sandeep, head of research at Naeem, tells Reuters he expects inflation could “cool off” even before November if the appreciation in the EGP becomes more sizable.

…Separately, the central bank announced (pdf) that inflows of remittances hit USD 1.8 bn in July, up 43.9% y-o-y. The total inflows in the period of November 2016 to July 2017 have increased by USD 1.9 bn to USD 14.5 bn, the statement added. The central bank says this increase is a direct result of the EGP float.

CIB is mulling whether to enter the real estate mortgage sector through a new subsidiary, a plan that is pending approval by the bank’s board of directors, CEO of Retail Banking Ahmed Issa tells Al Mal. The bank is focusing this year on mortgage financing for lower-income citizens, and may expand its financing at the beginning of next year to include middle-income earners, Issa says. The announcement comes as the CBE is continuing to promote mortgages for low- and middle-income earners, and is looking to bring the total financing extended under its initiative to EGP 10 bn.

The bank is also looking to grow its retail banking portfolio, which Issa tells the newspaper has solid potential for growth despite high interest rates and the CBE’s cap on monthly payments on loans at 35% of the borrower’s total documented income. CIB currently holds a 10% market share of retail banking loans and commands the top spot among private sector lenders, he added. CIB’s acquisition of Citibank Egypt’s consumer and retail business contributed to a 10% increase in the bank’s portfolio, Issa says.

ADM reportedly gets cranky about lack of progress on bidding for National Company for Maize Products: Representatives of Archer Daniels Midland (ADM) held a meeting with Investment Minister Sahar Nasr to discuss delays in receiving regulatory approvals for their bid to acquire National Company for Maize Products (NCMP), sources tell Al Borsa. Nasr reportedly assured the global commodities giant that the process would be seen through as soon as possible, with sources telling the newspaper that the transaction should be completed within the next few months. ADM executives said they are keen on getting the bidding done so they can move forward with plans for more investments in the food sector.

ADM’s mandatory tender offer for a 42.96% stake in NCMP is one of three competing bids. Also in the running are Cairo Three A Group and Al Mona Misr (a local affiliate of global commodities giant Louis Dreyfus). Egypt Kuwait Holding (EKH) subsidiary International Financial Investments Company (IFIC) may also be in the running. Pharos Holding is sell-side advisor to Misr Capital Investment (owned of the NCMP stake on offer) for the transaction, while EFG Hermes is advising ADM.

The Education Ministry has approved requests by 10 international schools to raise their tuition fees above the 14% cap for the 2017-18 school year, Al Masry Al Youm reports. The ministry approved the increases after the schools provided documents proving they would be generating losses without them. All of them got approval to hike fees more than the 14% the state had allowed for this year. According to the decree, MES was allowed to increase its tuition fees 24% this year, AIS Sheikh Zayed by 30%, and AIS New Cairo by 20%, as well as allowing the German schools DSB in Cairo and Alexandria and DEO to raise their fees. Minister Tarek Shawki has reportedly said that all schools that hike fees beyond the allowed 14% will be forced to reimburse parents, according to remarks by House Education and Scientific Research Committee head Gamal Shiha cited by Al Mal.

Looks a lot like the “new ergot”: It seems strange for Egypt’s agriculture quarantine “to suddenly discover this type of seed for the first time in decades,” Transgrain France, the company responsible for the wheat shipment reportedly containing poppy seeds, said. “Quarantine may have confused the seeds with another type of poppy found in France but which is not toxic,” the company added, according to Reuters. One trader told the newswire “there are currently two Romanian cargoes at ports of origin that have been told to change their wheat supply for the presence of poppy seeds … They are nervous now with what is happening.” An unnamed trader is refloating the idea that the shipment’s rejection is a move by agriculture quarantine to put more pressure on the government to get their employees to travel for inspections at the port of origin again. The government had moved to using private contractors to inspect shipments abroad.

Sports clubs can now be listed on the EGX under the new Sports Act that allows sportscompanies to be established for profit, EFG Hermes Co-head of Investment Banking Mostafa Gad tells Al Mal. The older Sports Act had counted Sports Clubs as non-profit organizations. Pharos Holding is considering getting in on the game and managing the establishment of joint stock sports companies in the future, according to Pharos Holding Managing Director of Investment Banking Sherif Abdel Aal.

The joint US-Egypt Bright Star military exercises resumed yesterday at the Mohamed Naguib military base in Egypt after an eight-year hiatus. The exercises run through 20 September, according to an Armed Forces statement. The wargames focus on counterterrorism strategies and facing modern security threats. Egyptian and Russian paratroopers also began the Protectors of Friendship 2017 counterterrorism drills in Russia on Saturday. The exercises will run until 22 September.

The US-Egypt war games come amid strained relations between the two countries (an angle being played up heavily in the foreign press) after the US Senate’s Foreign Aid Appropriations Committee approved withholding up to a quarter of the USD 1.3 bn in military and economic aid to Egypt and the State Department suspended nearly USD 290 mn in aid. The cut was ostensibly over Egypt’s human rights record, but others point to Egypt’s relationship with North Korea. On that front, the DPRK illegally exported coal, iron and other commodities worth at least USD 270 mn to countries, including Egypt, in the six-month period ending in early August, UN sanctions experts said in a report on Sunday. North Korea exported iron and steel products to Egypt, China, France, India, Ireland and Mexico valued at USD 305,713 between October 2016 and May 2017, reports the Associated Press.

Meanwhile, President Abdel Fattah El Sisi sent a congratulatory note to North Korea on the anniversary of its founding. AMAY ran the story citing MENA news agency.

No MP5 for us, huh? German weapons manufacturer Heckler & Koch pledged to no longer sell arms “into warzones or to countries that violate corruption and democracy standards, including Saudi Arabia, Israel, Egypt, the United Arab Emirates, Turkey, Malaysia, Indonesia, or any African countries,” The Guardian reports. The company’s strategy was not announced, but was mentioned in its financial report and confirmed at its AGM. “The move makes Heckler & Koch the first arms company to have a more ethical export control policy than its own government,” The Guardian’s Ben Knight suggests. The company now sells only to “‘green countries,’ which it defined according to three criteria: membership of Nato or ‘Nato-equivalent’ (Japan, Switzerland, Australia and New Zealand); Transparency International’s corruption perceptions index; and the Economist Intelligence Unit’s democracy index.”

Saudi vows to continue pressuring Doha to meet demands as Russia enters mediation: Riyadh intends to continue putting pressure on Doha until it meets the list of 13 demands made by the boycott bloc, Saudi Foreign Minister Adel al-Jubeir said on Sunday, AFP reports. The remarks came during a joint press conference in Jeddah with Russian Foreign Minister Sergei Lavrov. The minister urged “all parties to restore regional unity” and “enter into direct talks” to resolve their dispute, according to Reuters. Russia’s mediation efforts come after a botched phone call between the Saudi and Qatari rulers — arranged by US President Donald Trump — led Riyadh to suspend all dialogue with Doha, despite the statelet finally expressing its willingness to come to the negotiation table.

Meanwhile, the Qatari press claims that exiled Egyptian preacher Yusuf Al Qaradawi was removed from Interpol’s wanted list, citing a release from the UK-based Arab Organization for Human Rights. The report claims that Interpol cleared the scholar, who’s also affiliated with the Ikhwan, of charges brought against him by Egyptian authorities, which include “murder and theft,” the Anadolu Agency says. Al Qaradawi’s name doesn’t appear to be listed on Interpol’s website.

All of this comes as Crown Prince Mohamed bin Salman retools his “National Transformation Plan” amid what the Wall Street Journal says are worries about public backlash. The Financial Times first broke news last week that the plan was being reworked “ just over a year after its much-hyped launch, stripping out some areas earmarked for change and extending the timeline of other targets."

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Egypt in the News

The discovery of a 3,500-year-old tomb in Luxor belonging to a royal goldsmith and his wife continued to top headlines of Egypt on a very slow news morning in the foreign press.

International outlets are interested in Egypt turning into a global affordable destination for those seeking Hepatitis C treatment. Egypt has been producing the treatment Sovaldi since 2015 since 2015 under a government-sponsored initiative that has lowered the price of a full course of treatment to around USD 83 from around USD 84,000, the website claims. The treatment was developed by the US-based Gilead in 2013, but under the Tour N’ Cure initiative, Egypt’s government is able to offer the treatment to patients for about 8% of its cost, which means that patients from all countries come to Egypt for treatment, campaign director Mostafa El Sayed says.

Egypt is leveraging its relationship with the EU on issues such as migration toapply pressure on Ethiopia on the Grand Renaissance Dam, writes Albaraa Abdullah for Al Monitor. This was evident when Foreign Minister Sameh Shoukry met with his German counterpart Sigmar Gabriel last month, where migration topped the agenda but saw the latter come out in support of Egypt’s position on the Nile Basin Initiative. Egypt is also looking to leverage its trade relations with the EU to exert pressure, by projecting itself as the gateway to Africa. “Egypt is acting at the international and regional levels to pressure Ethiopia,” says the Egyptian Council for Foreign Affairs’ Rakha Hassan. This includes appointing the acting head of the General Intelligence Service, Maj. Gen. Tarek Sallam, as Egypt’s ambassador to Uganda and the appointment of Mohamed Idris, Egypt’s former ambassador to Ethiopia and the AU as Egypt’s envoy to the UN.

Some Middle Eastern countries may be in “for another popular awakening,” historian and former Israeli diplomat Shlomo Ben-Ami suggests in a piece for Project Syndicate. Ben-Ami’s argument supposes that social conditions in countries where the Arab Spring erupted in 2011 are worse than they were six years ago and that “authorities have run out of options.” Despite that, and the sensitive nature of their respective economies at this time, governments in Egypt, Morocco, and Saudi Arabia still fall into “the autocracy trap,” which has already proved unsustainable. Ben-Ami adds that economic reforms alone will not be enough to keep the peace, as those “will succeed only if they are coupled with far-reaching political reforms, which would inevitably shake the regime’s foundation.” Otherwise, another wave of protests may be imminent, he claims.

It is not clear “a full-fledged expulsion [of Jews] happened” in Egypt, Eyal Sagui Bizawe writes in Haaretz, criticising new Israeli curriculum changes. Bizawe says that while Egypt put Jews “suspected of Zionist or communist activity” in detention camps, detained others without trial, and compelled a number a leave for reasons including fear and to be with family members who already fled, it is “indisputable that most of Egypt’s Jews were not expelled.” He says: “We can imagine rows of hooded soldiers gathering Egyptian Jews in Cairo’s Tahrir Square and giving them two options: convert to Islam or be expelled. Or even not giving them the choice but expelling them all. But such an event simply never occurred.”

Other international news worth noting in brief this morning include:

  • Sharm El Sheikh is one of the top ten most affordable beach resorts, according to a ranking by Gulf News.
  • Sudanese drivers, followed by Egyptians, are the least-safe drivers in the UAE, according to a study which ranked the safest drivers by nationality based on the number of insurance claims in 2016 cited by Gulf News.

On Deadline

Real estate in Egypt may be booming, but it deceptively inflates growth indicators without producing sustainable growth and development, Mohamed Youssef writes for Al Shorouk. Youssef notes that real estate enjoys a wide range of benefits that has allowed it to grow substantially at a minimal cost, including the fact that it requires cheap (not skilled) labor, that it doesn’t rely on expensive technology, and that it enjoys financial support from banks, particularly after the CBE’s mortgage finance initiative. In turn, the average cost of units continues to rise, and people continue to buy — pushing up the amount of money the sector reels in. However, building a residential complex is not akin to building a factory, and using the country’s labor force in the real estate industry is only taking that muscle away from potential industrial projects.

So khalas, we create factory jobs in a vacuum and then what? Rack and stack the workers in dorms, Foxconn style, Mr. Youssef? Then there’s the small matter of real estate accounting for 8-15% of GDP in Egypt (vs 15-20% of GDP in most western nations), so perhaps he might be so kind as to explain what might replace that contribution?

Worth Watching

Tech’s first ‘war’ explored in The Current War: The business film nerd in us is tingling at the release of the trailer for “The Current War,” the tale of the epic rivalry between Thomas Edison and George Westinghouse over the future of electricity at the turn of the 20th century. Taking place nearly a century before Apple and Windows had it out in the 1980s and 1990s, the film will dive deep into the shady and underhanded maneuvers played out in private and in the media by Edison Electric Light Company (the forbearer of GE) and Westinghouse Electric Corporation to discredit each other’s electric current format (AC and DC). The regular nerd in us is pretty stoked to see how the film will portray scientific genius Nikola Tesla. The movie, which will be out for wide release in January, has already received excellent pre-release reviews, already holding a 8.5 score on IMDB. (watch trailer here, runtime 2:27)

Diplomacy + Foreign Trade

Suez Canal Economic Zone (SCZone) head Mohab Mamish embarked on a tour of four German cities on Sunday to promote investment, reports Daily News Egypt. The tour includes Berlin, Frankfurt, Hamburg and Munich and will put the spotlight on automotive, energy, SMEs and manufacturing companies.

President Abdel Fattah El Sisi received a delegation from the National Council of American Churches, according to an Ittihadiya statement. Discussions revolved around equality for minorities and different sects, confronting terrorism and different ways of promoting religious discourse. The meeting was also attended by Foreign Minister Sameh Shoukry and leader of the Evangelical community in Egypt Andre Zaki.

Egyptian Defense Minister Sedki Sobhy is in Seoul today for military and security cooperation talks with his South Korean counterpart and other top state officials, Xinhua reports.

Energy

Electricity Ministry to tender EUR 40 mn solar power plant in Kom Ombo this month

The Electricity Ministry plans to issue a global tender this month for the development of a EUR 40 mn, 20 MW solar power plant in Kom Ombo, Aswan, officials tell Al Mal. The plant, Kom Ombo’s first, is being funded by the French Development Agency, which has also allocated EUR 8,000 to feasibility studies. Germany’s ILF Consulting Engineers is supervising the implementation of the project, which should be operational in 2019. Separately, the ministry will receive offers for consultancy work for a 250 MW wind power plant in Zaafarana on 17 September and make a choice before the end of the year. The project, partly funded by European institutions, will be offered to developers next year.

Basic Materials + Commodities

Stabilizing EGP will lead to rebound in demand for beef

The stabilizing EGP will likely lead to a resurgence in beef consumption which had dropped significantly following the EGP float, predicts the US Department of Agriculture (USDA). Inflation following the float had cause a downward spiral in demand for beef. The devaluation coupled with the drop in tourism had made it difficult for importers, Stephen Bourke writes for Agriland. The USDA had cut its estimates of Egypt’s total imports of beef this year to 250K tonnes from 300K tonnes. It raised these again to 280K tonnes as it sees the EGP stabilizing, and with it imports. As tourism inflows continue to grow further, Egypt’s importance to livestock exporters — including from Ireland, whose cattle can now be exported to Egypt after a 12 year hiatus — will grow with it.

Manufacturing

Sumitomo Electric Wiring Systems Egypt opens second plant in Egypt

Japanese-British firm Sumitomo Electric Wiring Systems Egypt opened its second EGP 200 mn automotive electric wiring systems factory yesterday, according to an Investment Ministry statement. The plant brings the company’s total investments in Egypt to EGP 5.4 bn.

Health + Education

Indian pharma player looks to expand in Egypt

Indian pharma producer Gufic Biosciences says it is looking at tapping generics and high-end life-saving products segment in emerging markets including Egypt, according to Business Standard. The company plans to provide high-end injections to the markets it is planning on penetrating at “a fraction of the current price.”

Tourism

TDA to offer 67 mn sqm land plots in EGP for the first time

The Tourism Development Authority (TDA) is planning to tender 67 mn sqm of land to investors in EGP for the first time in 4Q2017, CEO Serag El Din Saad tells Reuters. The land plots will be priced once the Investment Act’s executive regulations are issued, he adds. The TDA will offer 34 mn sqm in the Red Sea, 25 mn sqm in South Sinai, 6.5 mn sqm in Fayoum, and 1.3 mn sqm in Luxor. Projects that are expected to be established include hotels, entertainment facilities, and international-level showrooms.

Banking + Finance

EFSA taps I-Score to set up movable collateral assets registry

The Egyptian Financial Supervisory Authority and The Egyptian Credit Bureau (I-Score) signed an agreement yesterday that will see them establish a movable collateral assets registry, an Investment Ministry statement says (pdf). The registry, which will launch within six months, is expected to facilitate SME funding and aid the government’s financial inclusion efforts, as it will allow machines, patents, and engineering designs to be used as collateral. The registry, which had been mandated by the passing of the Movable Assets Act, is also expected to improve Egypt’s ranking in the Doing Business report, the statement adds.

SME Authority and Suez Canal Bank signed two agreements for EGP 100 mn

The Small and Medium Enterprise Authority and Suez Canal Bank signed two agreements worth EGP 100 mn for the financing of new and existing projects across the country, according to Youm7. The first EGP 50 mn in funding will go towards machinery and construction projects while the second going toward helping fund overdrafts on capital expenses by SMEs.

EGX chief discusses setting up commodities exchanges with foreign counterparts

Newly-appointed EGX boss Mohamed Farid met with a number of other global bourse officials in Bangkok yesterday for the annual World Federation of Exchanges gathering to discuss the requirements to help Egypt set up its commodities exchange, according to an EGX statement.

Legislation + Policy

House studying legislation to regulate timeshare ownership in Egypt

The House of Representatives is planning on reviewing legislation that would regulate timeshare ownership in Egypt once the assembly reconvenes in October, House Tourism Committee member Ahmed Idris tells Al Mal. No details on what the legislation might entail was discussed.

Law

Shalakany acts as sell side advisor for Sealed Air Corporation transaction with Bain

Shalakany Law Office announced it was Sealed Air Corporation’s sole sell side legal advisor for all Egyptian assets in its USD 3.2 bn sale of its Diversey Care division along with the food hygiene and cleaning business within its Food Care division to Bain Capital. Aly El Shalakany, the lead partner from Shalakany acting on the transaction, said: “we are very pleased to have successfully assisted Sealed Air, a long standing client of the firm, with this strategic disposal, which marks a key step in its funding of fund core growth.”

Egypt Politics + Economics

Hamdeen Sabahi says he won’t run for president in 2018

Former leftist presidential hopeful Hamdeen Sabahi said yesterday he would not be running in next year’s presidential elections, but would “continue [his] role as a revolutionary,” Al Masry Al Youm reports. Sabahi also said he would lend his support to any civilian candidate whose presidential platform will fulfill the goals of the January 2011 revolution. Forgive the grandstanding, folks. Losing two elections does take its toll.

Probationary measures on satirical group Atfal Shawera members lifted

A Cairo court lifted preventative probationary measures taken against members of the satirical singing quartet Atfal Shawera (Street Children) on Sunday, the group’s lawyer Amr Mohamed tells Ahram Online. The four members were arrested in May last year on allegations of attempting to provoke protests and were given conditionally release last September pending further investigation. The probationary measures had required them to check in at a police station twice a week for two hours each time.

“Urfi” babies with foreigners get Egyptian citizenship

The Supreme Administrative court has ruled that children born to Egyptian mothers and foreign fathers under Urfi marriage contracts can have Egyptian citizenship,according to AMAY.

National Security

10 suspected militants killed by security forces in Cairo, five policemen injured

Security forces killed 10 suspected Hasm militants during an exchange of gunfire in Cairo that also left at least five policemen injured, sources tell Reuters. The story is receiving widespread coverage in the foreign press from outlets including the Associated Press.

On Your Way Out

The British Council opened a new call for applications under theNewton-Mosharafa PhD scholarship programme, which covers study in the fields of sustainable water management and food production, energy, and affordable and inclusive healthcare. The application window will remain open until 2pm CLT on 15 October.

ON THIS DAY- The deadliest terrorist attack in US history happened on this day in 2001. Two hijacked planes hit the north and south towers of the World Trade Center in New York City within 18 minutes of one another, with a third plane crashing into the Pentagon, and a fourth into an empty field. Close to 3,000 people died in the attack. Also on this day in 1973, President Salvador Allende of Chile, the world’s first democratically-elected Marxist head of state, died in a US-backed coup led by army leaders. … On this day last year, we at Enterprise were still on our Eid break.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6101 | Sell 17.7101
EGP / USD at CIB: Buy 17.60 | Sell 17.70
EGP / USD at NBE: Buy 17.63 | Sell 17.73

EGX30 (Sunday): 13,455 (+0.2%)
Turnover: EGP 960 mn (7% above the 90-day average)
EGX 30 year-to-date: +9.0%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 0.2%. CIB, the index heaviest constituent ended down 0.8%. EGX30’s top performing constituents were: Egyptian Iron & Steel up 8.0%, Egyptian Resorts, and Qalaa Holdings up 6.8%. Yesterday’s worst performing stocks included: Elsewedy Electric, and Telecom Egypt down 1.0%, and Egyptian Financial & Industrial Company down 0.9%. The market turnover was EGP 960 mn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +57.8 mn
Regional: Net Short | EGP -14.1 mn
Domestic: Net Short | EGP -43.7 mn

Retail: 74.8% of total trades | 71.4% of buyers | 78.2% of sellers
Institutions: 25.2% of total trades | 28.6% of buyers | 21.8% of sellers

Foreign: 14.7% of total | 17.7% of buyers | 11.7% of sellers
Regional: 12.2% of total | 11.5% of buyers | 12.9% of sellers
Domestic: 73.1% of total | 70.8% of buyers | 75.4% of sellers

WTI: USD 47.71 (+0.48%)
Brent: USD 53.98 (+0.32%)
Natural Gas (Nymex, futures prices) USD 2.93 MMBtu, (+1.45%, October 2017 contract)
Gold: USD 1,341.80 / troy ounce (-0.70%)TASI: 7,377.95 (+0.24%) (YTD: +2.32%)
ADX: 4,445.72 (-0.18%) (YTD: -2.21%)
DFM: 3,647.55 (+0.09%) (YTD: +3.30%)
KSE Weighted Index: 440.57 (+1.35%) (YTD: +15.91%)
QE: 8,666.55 (-0.10%) (YTD: -16.96%)
MSM: 5,056.57 (+0.19%) (YTD: -12.56%)
BB: 1,316.75 (+0.09%) (YTD: +7.89%)

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Calendar

11 September (Monday): Japanese Foreign Minister Taro Kono is scheduled to visit Cairo to participate in the Arab-Japanese dialogue session at the Arab League, according to a Foreign Ministry statement.

13 September (Wednesday): Pharos Holding’s Egypt Banking Day event.

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

13-15 September (Wednesday-Friday): 2017 Alliance for Financial Inclusion Global Policy Forum, International Congress Center, 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.

21 September (Thursday): Islamic New Year, national holiday.

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.

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

03 October (Tuesday): Egypt’s Emirates NBD PMI reading released.

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.

15-16 October (Sunday-Monday): The Marketing Kingdom Cairo 3 conference, Dusit Thani Lakeview Hotel, Cairo.

17 October (Tuesday): The Narrative PR Summit, Four Seasons Nile Plaza, 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 “Future of Cities: Innovation, Spaces and Collaboration,” 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.

19-21 November (Sunday-Tuesday): 11th Annual INJAZ Young Entrepreneurs Competition, Four Seasons Nile Plaza, Cairo.

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.

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