Sunday, 24 September 2017

Trump says the US could revisit its aid cut, freeze

TL;DR

What We’re Tracking Today

A very happy autumn to all of you, folks. It’s the best time of year, so far as we’re concerned: cooler weather, shorter days and the promise of another chance to grow the business, do better as a person and have more fun in the new year.

British trade envoy Sir Jeffrey Donaldson arrived in Cairo yesterday at the head of a delegation expected to announce new investments in infrastructure, health, transport, and other labor-intensive sectors over the course of a five-day visit, Al Masry Al Youm reports. The 14-member delegation, which includes representatives from Rolls Royce, Bombardier, and London International Patient Services, is scheduled to meet with officials including the ministers of investment, transport, trade and industry, and oil, in addition to Prime Minister Sherif Ismail and SCZone head Mohab Mamish, Al Mal reports. It seems most of the visiting companies do not have existing investments in Egypt.

Donaldson arrives as the UK’s credit rating has been downgraded on “Brexit and growthfears,” Reuters reports, noting that Moody’s made the call “a few hours after Prime Minister Theresa May” said she wanted a two-year transition period to get out of the European Union. The Financial Times has more. The UK has, meanwhile, given Uber a poke in the nose, with London saying the ride-hailing app will lose its license to operate in the city at the end of the month.

President Abdel Fattah El Sisi is heading to the UAE today for a two-day visit. Expect the Qatar Smackdown to be on the agenda, among other things, Al Masry Al Youm reports.

It’s election day in Germany today, and while Angela Merkel is widely expected to win re-election as chancellor, polls also suggest the country’s far-right could be back in the Bundestag “for the first time in half a century,” the Independent reports. It’s one of two closely-watched polls taking place this week as Kurds head to the voting booths tomorrow in a controversial referendum on independence from Iraq.

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Bloomberg’s tips for understanding emerging markets: We’re at the beginning of a turning point in the cycle in which EM will outperform U.S. shares, writes Ben Carlson for Bloomberg View. But poring over data from the past decade finds that volatility in the asset class is a far cry from the steady returns this year has witnessed. Being aware of this volatility is key, he writes — and so is understanding that a ten-year cycle is not that long in stock market terms. Carlson’s rather vanilla advice: Diversify, because “Picking the best emerging-market countries to invest in is not easy. Emerging markets are made up of vastly different countries.”

What We’re Tracking This Week

Dabaa nuke plant contracts to be ready in one week, signed within two months: The Council of State (Maglis Al Dawla) will finalize its review of the four contracts for the USD 30 bn Dabaa nuclear power plant this week, an unnamed government official tells Al Borsa. The source says the date of the signing ceremony is contingent on Russian President Vladimir Putin’s schedule, but will likely take place within two months. The source also believes that the signing of the contracts will pave the way for Russian flights to resume by December of this year.

4G network services will roll out nationwide on Thursday after celebration presided over by Prime Minister Sherif Ismail, Youm7 reports.

The legal period for the management shakeup in the public banks comes to an endMonday, AMAY report. Look for an announcement to come out in the following days clarifying the changes to the boards. Ripples from the shakeup have reportedly included Banque du Caire delaying its IPO.

On The Horizon

The Planning Ministry will finalize the Unified Planning Act within 10 days, after which it will be up for debate within Cabinet, Al Mal quotes Minister Hala El Said as saying yesterday. The act will regulate the planning of national projects, among other things. Also coming before Cabinet soon: Amendments to the law on conserving architectural heritage, which Housing Minister Mostafa Madbouly said will be ready “within days,” according to Al Mal.

The IMF and World Bank fall meetings take place 9-15 October, so get ready in a couple of weeks’ time for a new World Economic Outlook and lots of prognosticating. Senior officials and a number of private-sector actors from Egypt will be attending. The event webpage is here.

An IMF delegation is expected to visit Egypt at the end of October for a review ahead of the disbursal of the third USD 2 bn tranche of the country’s extended fund facility, which is scheduled for December.

Enterprise+: Last Night’s Talk Shows

It was an interesting night on the airwaves as the talking heads delved into a number of key issues, including privatizing the railways, Moody’s sticking to its guns on Egypt’s rating, and the automotive directive.

Privatization of the rail network in all but name: Transport Minister Hisham Arafat had a chat with Hona Al Asema’s Lamees Al Hadidi about legislation that will allow the private sector to operate and manage parts of the national rail system. The minister said private sector participation is a necessity to cover the EGP 42 bn required to upgrade rail lines and signaling systems. A few weeks back, Arafat had met with investors to urge them to invest in developing the railway system. The minister stressed that the government will maintain control over ticket price, while private companies will be responsible for upgrades, operations, and maintenance (watch, runtime 11:27). Bottom line: Private companies can invest in and operate lines, just don’t call it “privatization” lest we stimulate the expression of our (not-so-recessive) socialist genes. (Prime Minister Sherif Ismail tried to calm fears of privatizing the railways last week.)

Lamees then moved on to discuss Moody’s decision to leave unchanged Egypt’s credit rating at B3. Middle East Rating & Investors Service President Amr Hassanein — whose firm is Moody’s local arm — was apologist-in-chief. Hassanein defended Moody’s main sticking point, including Egypt’s debt levels, which are nearing 90% of the country’s GDP, as well as the government’s large financing needs. He also pointed to issues with the rule of law, corruption, and the effectiveness of governance as areas dragging down the nation’s ranking (watch, runtime 10:42).

Lamees also looked into her crystal ball for predictions on the management shakeup at state-owned banks, saying Prime Minister Sherif Ismail will keep the chairmen of Banque Misr, Banque du Caire, and the National Bank of Egypt in place. Lamees’ sources tell her that Mortgage Finance Fund head Mai Abdel Hamid will head up the Egyptian Arab Land Bank, while Emirates NBD Deputy Managing Director Sahar El Damati will be appointed as Banque Misr’s deputy chairman.

Trade and Industry Minister Tarek Kabil’s comments on the Automotive Directive at the Automech Formula Exhibition caught the eye of Kol Youm host Amr Adib. Kabil continued to press on the government’s target of increasing local content of domestically assembled cars to 70%. Egypt currently exports USD 500 mn worth of auto components, which Kabil said will attract auto part manufacturers to set up shop here in Egypt (watch, runtime 3:41). From what we’re seeing in the report, it appears that no significant concession were made to car importers, who have been hard at work trying to torpedo the act.

Holding Company for Garbage Collection? Host Amr Adib went on to discuss a proposal that could see the House of Representatives authorize the establishment of a holding company for garbage collection with House Local Development Committee member Mona Gaballah. The government would hold a 51% stake, with the remainder being opened to other stakeholders including investors, banks, garbage collectors unions and civil society organizations. Gaballah added that the hopes the new company would be included in the state IPO program. The Local Development Ministry is scheduled to meet with the committee on Tuesday to discuss the structure of the company, Gaballah said (watch, runtime 8:23). Is this a move to clean up city streets, or a sign that private producers of refuse-derived fuel are about to face competition from a state-owned company?

Over on Masaa DMC, host Eman El Hosary discussed proposed amendments to the Nationality Act with the Interior Ministry’s legal affairs department undersecretary, Abdel Fattah Serag. Serag tells the host that the law would strip citizenship from those found guilty of belonging to a terrorist group or holding terrorist affiliations (watch, runtime 5:09).

Speed Round

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The US government is willing to “consider” unfreezing aid to Egypt that had put on hold last month, President Donald Trump told the press on Wednesday, according to Reuters. The US had decided last month to cut or withhold some USD 290 mn in civilian and military aid to Egypt for “failure to make progress on respecting human rights and democratic norms.” Word in the halls of power in both countries is that the move had more to do with Cairo’s ties to North Korea than it did with human rights, and Trump’s statement came less than one week after Cairo effectively cut ties with Pyongyang.

…What’s more, Egypt will soon receive some USD 13 mn from the US government under a USD 700 mn humanitarian aid package meant to help Syrian refugees, the State Department said in a statement picked up by Reuters.

The developments in the aid story comes despite a scathing US State Department memothat says human rights conditions in Egypt are “deteriorating” and accuses the country of “failing to protect free speech and its minorities, investigate abuses by its forces, or grant US monitors access to the conflict-ridden Sinai Peninsula.” The report was submitted to Congress in August but never publicly released, according to the Associated Press.

The State Department report appears not to have dampened talks between Trump and President Abdel Fattah El Sisi last Wednesday. On the sidelines of the annual UN General Assembly gathering in New York. Regional issues — including a glimmer of hope for peace to our east after Egypt mediated between Hamas and Fatah — were high on the agenda, according to a statement from the International Cooperation Ministry.

El Sisi also addressed world leaders at the UN’s High Level Event on Libya, declaring the 2015 peace agreement that set up the Government of National Accord as the “only acceptable framework” to end the conflict. The president stressed the importance of reaching resolution before Libya’s transitional phase officially expires on 17 December. El Sisi also asked the international community to support the Cairo-backed Libyan National Army. You can read the full address here in English (pdf) and Arabic.

President El Sisi sat down with a one-on-one interview with Fox News’ Sean Hannity last week. Hannity seemed neither interested nor capable of discussing meaningful policy issues with the president and, instead, focused on trying to say “radical Islamic extremists” as many times as possible. “You took one of the most courageous stances” in the world against “radical Islamic terrorism,” Hannity said. El Sisi says his plans to “rectify the religious rhetoric” are to reform and “filter … false ideas that misrepresent the religion… we need to confront extremist ideology all over the world.” On the issue of the US not recognising the Ikhwan as a terrorist organization, El Sisi suggested it could be because a “great country” like the US requires more time to recognize that “extremist organizations have a bad impact,” adding that the US has a responsibility for the safety of the whole world (runtime 07:33).

INVESTMENT WATCH- In New York, US companies and institutions pledge new investment: The International Finance Corporation’s (IFC) executive board agreed to allocate USD 150 mn to investments in agricultural projects in Egypt, Investment Minister Sahar Nasr announced on Wednesday. The funding is earmarked for public-private partnership projects that look to develop the food manufacturing industry using modern techniques and state-of-the-art tech, the statement explains. The announcement came one day after El Sisi met with World Bank President Jim Yong Kim to discuss Egypt’s progress on economic reforms and ways to bolster cooperation with the international lender.

Uber gets even more bullish on Egypt: Ride-hailing app Uber is looking to expand in Egypt, the company’s Egypt General Manager, Abdellatif Waked, said following a meeting between El Sisi and the company’s head of public policy and communications in the Americas, Justin Kintz. Investment Minister Sahar Nasr expects the company to announce new investments in about three months’ time. Uber will launch a new bus service in Egypt as soon as the government passes legislation governing ride-hailing apps, the minister said. The new service “will look beyond Cairo to include other major governorates,” Quartz notes.
US companies coming in droves in October, November to look at new investments: US companies and fund managers will visit Egypt in October and are particularly interested in sectors including energy, infrastructure, healthcare, food production, tourism, engineering, and IT, Nasr said. Many of those visiting will be mulling follow-on investments in existing businesses here, statement from the ministry. The news came after a meeting between Nasr and 19 US businessmen at an event hosted by Beltone Financial Holding’s Auerbach Grayson in New York. Among those in attendance: Moon Capital Management, Concord International Investment, Mutima Capital Management, VanEck, and Victoria Capital.

Business council visit, AmCham forum: Separately, the Egyptian-American Business Council is meeting with a delegation of US companies in November to spur further investment. The American Chamber of Commerce is organizing an investment forum in Egypt for US investors, Nasr announced.

BlackRock’s head of emerging stocks sees value in Egypt and is keen on international and local currency bonds there. BlackRock MD Amer Bisat tells Bloomberg that “Egypt is a place that has gone through a wrenching adjustment as part of an IMF program and offers good fundamental value for the yields that you’re getting … Local currency in particular is a very interesting [prospect] at this stage … It’s a fixed exchange rate, effectively very cheap level, with very high yields and a commitment to reform.” Globally, Bisat is worried about when the “good times” for emerging markets will end and notes that a reversal in sentiment EM bonds could be painful.

Arqaam Capital is also keen on Egypt, saying it will continue to “build its local capabilities in Egypt to provide a bridge for capital flows into the Egyptian economy.” Radi El-Helw, Managing Director, Arqaam Egypt says: “With the brave and bold economic and structural reform program that the Government of Egypt has embarked on, we are bullish with respect to the future prospects of the Egyptian market… We are excited about the developments in Egypt’s capital markets, which today represent one of the most vibrant markets for public and private investors across the Middle East and North Africa region. In spite of perceived economic and political challenges, the reality is that Egypt still represents one of the most active markets in terms new IPOs and number of M&A transactions executed, both of which reflect strong convictions by local, regional, and international financial and strategic investors in the future of the country.” El Helw says Egypt continues to be a very competitive location because it offers access to a skilled labor pool “at highly competitive costs relative to other regional markets covering the MENA region.”

Meanwhile, Abu Dhabi Financial Holdings says the reform program has encouraged it to invest more in Egypt through its local arm Capital Properties, CEO Jassim Alseddiqi told Investment Minister Sahar Nasr on Friday. The firm was particularly interested in a number of the companies in the state’s program to IPO publicly owned assets. It is also interested in investing in education, the statement said.

INVESTMENT WATCH- IKEA plans new investments to expand operations in Cairo and Alexandria: IKEA is looking to make new investments in Egypt to expand its operations in Cairo and Alexandria, Trade and Industry Minister Tarek Kabil said on Thursday, Al Borsa reports. The exact nature of the expansion was not disclosed, but the news came after Kabil’s meeting last week with IKEA Group’s Egypt Country Manager Adosh Sharma.

Venture capital fund Algebra Ventures is putting USD 9 mn into technology startups, according to AMAY. Executive Director Ziad Mokhtar said USD 3 mn is earmarked for software and software development, while USD 1.5 mn has been committed to our friends at online ordering service El Menus and a stake in a home maintenance business. A further USD 3 mn will flow into firms working on AI and fintech.

M&A WATCH- Beltone Financial’s acquisition of microfinance firm Reefy is still on andwill take place in 1H2018, Beltone chairman Sameh El Torgoman told Al Masry Al Youm on Saturday. Beltone’s planned EGP 105 mn acquisition of 70% of Reefy had been put in question last week when El Torgoman suggested that the investment bank might shelf the M&A in favor of focusing on expanding internationally. He had said yesterday that acquiring Reefy was part and parcel with plans to expand in non-banking financial services. Beltone won regulatory approval for the transaction in November 2016. Pharos Holding is independent financial advisor on the transaction.

Contractors to receive compensation by the end of FY2017-18: The government will disburse by the end of the current fiscal year compensation packages to contractors for losses incurred on state projects as a result of the EGP float, Planning Minister Hala El Said said yesterday, Al Mal reports. The Housing Ministry has completed its initial report on the payout package, El Said said. Housing Minister Mostafa Madbouly had authorized the release of a 10% down payment to contractors back in July.

WEEKLY CABINET ROUNDUP- The Ismail cabinet unanimously approved legislative amendments that would allow the private sector to manage, operate, and maintain rail networks in cooperation with the Egyptian National Railways. Other decisions from last week’s meeting:

  • Approving a law amendment to allow the Nuclear Power Plants Authority to have full oversight and regulatory rights over sector activities;
  • Signing off on regulatory changes that would allow the state to strip Egyptian citizenship from those convicted in national security cases;
  • Agreeing to a proposal for a Farmers Syndicate and Agricultural Producers Act;
  • Agreeing to compensate contractors working in water- and piping-related projects.

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The Macro Picture

Growth in emerging market car sales might be hampered by growing congestion: Congestion levels are rising in virtually all emerging market cities, and falling in none, writes Steve Johnson for the FT. This is leading a number of analysts to deduce that EM car ownership may have to peak below the levels seen in the advanced world. Emerging market cities account for 19 of the 20 most congested cities, according to research by Dutch navigation equipment manufacturer TomTom. That’s not even counting cities in India or many of the most congested African cities, such as Lagos and Cairo. Analysts at Legal & General Investment Management point to higher population density and a lack of developed and expanded road networks for this congestion. They also point to places like China where regulations have been put in place to curb car ownership to reduce congestion and air pollution. The analysis flies in the face of conventional wisdom that says there will be a surge in car sales over the coming 20 years as emerging markets growth rises. BP is projecting EM vehicle fleets to triple, while ExxonMobil forecast a 62% rise in energy consumption by Asia-Pacific’s transportation sector between 2015 and 2040.

Egypt in the News

Egypt human rights in western media spotlight: Human rights in Egypt were in the western press’ spotlight this weekend after the UN named Egypt one of a record 29 countries that “have retaliated in the past year against citizens who cooperate with the United Nations,” the organization’s human rights office said last week, according to Reuters. Saudi Arabia, China, India, the UAE, Venezuela, and Cuba are among the other countries listed by the UN where “people communicating with the rights body had been abducted, detained, held incommunicado, or had disappeared,” UN Assistant Human Rights Secretary General Andrew Gilmour said. The Hill also features an opinion piece on the same topic by contributor Aayah Hossam and The Sunday Times says that the “lawyer for murdered [Italian] student Giulio Regeni [is being] tortured in Egypt.”

The US administration should sanction Egypt-based terror groups Hasm and Liwaa Al-Thawra to confirm its commitment to fighting terror in spite of withholding military aid to Egypt, Jonathan Schanzer writes for the New York Post. While critics may point out that the move is an indirect sanction on the Ikhwan — which Egypt says is the root organization of Hasm and Liwaa Al-Thawra — Schanzer says it would be a smart move on America’s part to control the Ikhwan’s overtly violent factions.

Egypt’s tourism sector is definitely on the mend, but it’s not healing fast enough for the thousands of shopkeepers and bazar owners who had made their living selling tourist trinkets and souvenirs, AFP’s Bassem Aboulabass says. Tourists are bound to return to Egypt, as this gradual recovery that saw receipts climb 54% in 7M2017 has shown, Omar Al Ubaydli writes for The National. Recent research has also shown that terrorism “rarely destroys tourism for good.”

Also worth a skim this morning:

Diplomacy + Foreign Trade

Egypt plans to oversee the transition from Hamas rule in Gaza to the new reconciliation government taking over, Fatah said on Friday, according to Xinhua. An Egyptian delegation will monitor security and administrative aspects of the handover as well as the commitments from both sides towards implementing the framework agreed upon. Egypt has played a pivotal role in bringing the two factions together over the last few weeks.

Egypt’s exports from Qualifying Industrial Zones (QIZ) rose 6.7% year-on-year to USD 370 mn in 1H17, up from USD 346.5 mn, Al Borsa reports. More than 90% of QIZ exports are textiles and ready-made garments, according to head of the Trade Ministry’s QIZ unit Ashraf Rabie.

An Indonesian trade delegation arrived in Egypt on Thursday to discuss potential investments, particularly in the Suez Canal Economic Zone (SCZone), Youm7 reports..

Energy

Production timetable on key concessions (including Zohr) announced by Oil Ministry

Egypt’s supergiant gas field Zohr will be producing 500 mcf a day by the end of 2017, Prime Minister Sherif Ismail said on Saturday, according to ETEnergyworld. Separately, Oil Minister Tarek El Molla also said that the North Alexandria concession will begin producing between 500 and 700 mcf of gas per day by the end of 2018, once the second phase comes online, Al Shorouk reports. As for the West Mediterranean concession, EGAS plans to launch international exploration tenders once Norwegian firm PGS releases the results of the seismic survey for the area before the end of FY2017-18, according to an Oil Ministry statement. An unnamed source tells Reuters the first phase will be completed by mid-2018, and the second one will take three years.

Electricity Ministry is looking to expand use of coal as an energy source

The Electricity Ministry appears to be looking to expand its use of coal power plants, with Electricity Minister Mohamed Shaker traveling to China to meet with companies to discuss potentially opening more plants. Shaker is also set to meet with the State Grid Corporation of China to discuss ongoing cooperation is overhauling the electricity grid, according to AMAY.

ANRPC to double 92-95 octane production from EGP 91.8 bn refinery in October 2018

The Alexandria National Refining and Petrochemicals Company (ANRPC) will begin trial operations to produce 850k tonnes of 92-95 octane petrol per annum from its EGP 91.8 bn refinery in October 2018, ANRPC CEO Khaled Khalifa said yesterday, Al Shorouk reports. Enppi and Petrojet, general contractors on the project, have completed 81% of the necessary work.

Lekela Power to sign contracts for USD 350 mn wind farm project by year-end

Lekela Power for New and Renewable Energy is expected to sign the contracts for its USD 350 mn, 250 MW wind farm in the Gulf of Suez by year-end, Actis Partner Sherif El Kholy tells Al Masry Al Youm. Actis, an emerging markets equity player, owns 60% of Lekela. El Kholy had previously said the contracts would be signed by July. Separately, El Kholy says Actis recently reached final closing on its fourth energy fund, Actis Energy 4, at USD 2.75 bn, some of which will be used to fund its Egypt projects.

Infrastructure

SCZone signs preliminary agreement with DP World on Ain Sokhna joint venture

Suez Canal Economic Zone head Mohab Mamish and DP World CEO Sultan Ahmed Bin Sulayem signed on Thursday a preliminary agreement to establish a joint venture industrial zone in Ain Sokhna, Al Borsa reports. The zone will bring in various sectors, including SMEs, construction materials, auto spare parts, and textiles manufacturing. according to Al Mal. Work on the project is set to begin next year. The partnership will aim to be an “extension” of Dubai’s Jebel Ali Freezone, Bin Sulayem said.

Manufacturing

IDA, Singapore’s SECC to build industrial city in Fayoum

The Industrial Development Authority (IDA) signed an MoU with Singapore’s SECC Group yesterday to establish a 33 mn sqm industrial city in Fayoum, according to a Trade and Industry Ministry statement. The zone will target manufacturers of meds, chemicals, textiles, and auto, according to AMAY.

Schneider Electric to boost domestic component of products to 50%

Schneider Electric wants to increase the domestic component of products it manufactures locally to 50% from a current 40%, MEA President Caspar Herzberg says, according to Al Mal. A delegation from the company has been in town this week to meet with government officials including Prime Minister Sherif Ismail and CIT Minister Yasser El Kadi.

Bosch looks to expand its investments in Egypt

German engineering and electronics firm Bosch is looking at expanding their investments in Egypt,said Trade Minister Tarek Kabil following a meeting with Bosch’s regional president Markus Thill, according to AMAY. The firm is apparently looking to open new factories producing a number of different goods with an eye towards exporting to Africa, said Kabil. No details were provided on the potential expansion.

Unlicensed factories have one year to comply with Industrial Permits Act

Trade and Industry Minister Tarek Kabil issued new directives last week that will allow unlicensed factories to receive temporary industrial permits, permitting them to operate legally for a year while they restructure their affairs to comply with the new Industrial Permits Act, Al Borsa reports. Separately, Kabil also issued new, tighter regulations for the inspection of imported spare parts and raw materials used in production, the newspaper adds.

Health + Education

ESQua to establish USD 750 mn medical city in New Capital

The Egyptian Society for Quality in Health Care (ESQua) is planning on establishing a USD 750 mn medical city near the New Capital, ESQua President Hassan El Kalla tells Youm7. The city, dubbed CapitalMed, will include a public hospital, a complex of clinics, specialized medical centers, and a hotel. Construction will begin at the end of the year, and is expected to take 7-10 years to complete over four phases.

Real Estate + Housing

Jumeirah starting on EGP 10 bn North Coast project

Jumeirah Real Estate Investment Company is investing EGP 10 bn in their new Jumeirah Bay Ras al Hikma project, according to Al Masry Al Youm. The project will include 5k home and three hotels, with work on the EGP 2 bn first phase set to start next month.

HDG investing EGP 600 mn in New Cairo

Heliopolis Development Group will invest EGP 600 mn in its Cairo Capital Center project in New Cairo, Al Masry Al Youm reports. The company is hoping the project will deliver sales of about EGP 1 bn, largely by way of office space for banks and international companies.

Tourism

Direct flights between Egypt and Latvia being discussed

Negotiations for direct flights between Egypt and Latvia are underway, sources told AMAY. About 10k Latvians visit each year, the newspaper says.

Telecoms + ICT

TE targeting 2 mn new mobile services customers every month

Telecom Egypt is looking to attract a 2 mn new subscribers each month to its new mobile network, sources tell Al Mal, which couldn’t be bothered to express the sales target in terms of total number of subscribers the new MNO is targeting.

Automotive + Transportation

Arab motors to start assembling Changan V7

Arab Motors will start assembling the Changan V7 by mid 2018, according to Al Mal, with production starting as early as next year.

Banking + Finance

EIB agrees to lend Banque Misr USD 500 mn

The European Investment Bank (EIB) agreed last week to lend Banque Misr USD 500 mn that will be used for SME loans and financing, Vice President Akef El Maghraby tells Al Borsa. Banque Misr is also expected to sign an MoU for another loan from the China Development Bank this week.

Al Ahli to sell stake in Egyptian Resorts

Al Ahli Capital is offloading its 9% stake in the Egyptian Resorts Company by the end of the year, according to AMAY. CEO Khaled Badawi said a preliminary agreement is in place with a local investor as the company is looking to lock in some profits after a strong bull run in the market. He added that the firm is also looking at increasing its ownership in the other roughly dozen names they already own such as Ezz El Dekheila, Alexandria Mineral Oils Company and Sidi Kerir Petrochemicals.

Egypt Politics + Economics

PM reforms committee overseeing state IPO program

Prime Minister Sherif Ismail issued a decision last week to reform the ministerial committee overseeing the state’s IPO program, Al Borsa said on Thursday. Among the committee’s responsibilities are setting the schedule for the listing of state-owned companies on the EGX and ensuring that affected government offices are doing the necessary prep work. The committee is chaired by the Investment Ministry and seats the ministers of finance, oil, and public enterprises, as well as the cabinet’s secretary on legislative affairs.

Support Egypt Coalition to hold elections for party leadership

The Support Egypt Coalition — the largest political bloc in the House of Representatives — will elect new leadership on 1 October, Youm7 reports. Candidates, including the current leader, Mohamed Elsewedy, began announcing their intentions to run yesterday.

Former Ikhwan leader dies at 89 from illness

Former Ikhwan Supreme guide Mohamed Mahdi Akef died in a Cairo hospital on Friday after a long illness, the Associated Press reports. Akef, 89, was awaiting retrial in a case that landed him a life sentence. Reuters also has the story.

National Security

Egypt receives warship from France

France has delivered the first of four Gowind 2500-class corvettes to Egypt in a ceremony at the Lorient port in Brittany, according to the Middle East Monitor. The ship specializes in hunting and destroying submarines and is part of a wider fleet which includes three ships being built in Alexandria with French support. Defense World also carried the story about the delivery of the corvette, which has a range of 3,700 nautical miles at 15 knots and carries a crew of 80.

Sports

Security approvals granted for fan attendance in club games

Sports Minister Khaled Abdul Aziz suggested football fans could soon be back in the stands for league games after his ministry approvals from the nation’s security services, according to AMAY.

Egypt to host U-23 football tourney in 2019

Egypt has won its bid to host the Africa U-23 Cup of Nations in 2019, according to King Fut. The top three teams will gain a spot in the 2020 Olympics in Japan and the fourth place team will play a qualifier against an Asian team for the wildcard spot.

On Your Way Out

After a long journey, upcoming Egyptian musician Nadah El Shazly is releasing her debut album, Christian Eede writes for The Quietus. El Shazly, who started out as a member of a Cairo punk band and went on to produce her own electronic music, wrote and produced the six-track collection with help from both local and Canadian artists. The album titled Ahwar (Marshlands) will be out on 10 November through the Nawa record label, but you can check out the first first track ‘Afqid Adh-Dhakira (I Lose Memory)’ here (runtime 4:39).

ON THIS DAY- On this day in 1789, the Judiciary Act was passed by Congress and signed by President George Washington, establishing the Supreme Court of the United States as a tribunal made up of six justices who were to serve on the court until death or retirement. In 1976, white rule was ended in Rhodesia after the Rhodesian Government agreed to introduce black majority rule to the country within two years. Also, American novelist F Scott Fitzgerald was born on this day in 1896. On this day three years ago, we were working on the first ever issue of Enterprise.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6174 | Sell 17.7174
EGP / USD at CIB: Buy 17.61 | Sell 17.71
EGP / USD at NBE: Buy 17.63 | Sell 17.73

EGX30 (Wednesday): 13,695 (-0.3%)
Turnover: EGP 1.1 bn (27% above the 90-day average)
EGX 30 year-to-date: +10.9%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 0.3%. CIB, the index heaviest constituent ended up 0.6%. EGX30’s top performing constituents were: Abu Dhabi Islamic Bank up 8.4%, Orascom Telecom Media and Technology up 2.8%, and Arabian Cement Company up 1.8%. Wednesday’s worst performing stocks included: Qalaa Holdings down 4.2%, Egyptian Resorts down 3.8%, and Porto Group down 2.2%. Market turnover was EGP 1.1 bn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +1.8 mn
Regional: Net Short | EGP -3.3 mn
Domestic: Net Long | EGP +1.5 mn

Retail: 65.7% of total trades | 67.5% of buyers | 63.9% of sellers
Institutions: 34.3% of total trades | 32.5% of buyers | 36.1% of sellers

Foreign: 17.5% of total | 17.6% of buyers | 17.4% of sellers
Regional: 8.7% of total | 8.6% of buyers | 8.9% of sellers
Domestic: 73.8% of total | 73.8% of buyers | 73.7% of sellers

WTI: USD 50.66 (+0.22%)
Brent: USD 56.86 (+0.76%)
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BB: 1,307.95 (+0.41%) (YTD: +7.17%)

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Calendar

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.

30 September-01 October (Saturday-Sunday): Techne Summit, Bibliotheca Alexandrina, Alexandria.

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.

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. © 2022 Enterprise Ventures LLC.

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