Monday, 2 October 2017

The House of Representatives is back in session today


What We’re Tracking Today

Our elected representatives reconvene today for their fall legislative season. Prime Minister Sherif Ismail is set to address the House to discuss ongoing projects and priorities, Youm7 reports. The agenda is packed with business-related legislation, including the Labor Act, the Bankruptcy Act, the SMEs Law, the Companies Act, the Leasing and Factoring Act, and the Capital Markets Law, Al Mal notes.

Also due to be tabled: The Central Bank and Banking Act, the Automotive Directive, two separate pieces of legislation on allowing private sector participation in building, managing, and maintaining national railways and the Universal Healthcare Act. Tap here for our refresher on some of the key laws.

Speaking of the Universal Healthcare Act, the Council of State appears to have concluded its review and passed the bill over to President Abdel Fattah El Sisi and the Cabinet to revise, an Ittihadiya statement picked up by Al Mal says. The results of the actuarial studies on the bill, which are key to costing it, have also wrapped up. Last we heard, the Health Ministry had plans to include articles to set price controls on private healthcare.

The Council of State is expected to hand over the Dabaa nuclear power plant contracts to President Abdel Fattah El Sisi today. As we noted yesterday, there are expectations that these will be signed by El Sisi and Russian President Vladimir Putin at the 75th anniversary of the battle of El Alamein on 21 October.

A delegation from the African Development Bank arrives in Cairo today to discuss disbursing the last USD 500 mn tranche of a USD 1.5 bn agreement it signed with Egypt. AfDB says the tranche will be disbursed before year-end.

Foreign Minister Sameh Shoukry is scheduled to meet his Yemeni counterpart, Abdulmalik Al-Mekhlafi, in Cairo today, Al Shorouk reports.

Also on this first Monday in October: The United States Supreme Court reconvenes, once again making us happy that we can continue quote Walter Matthau to the effect that A telephone has no constitutional right to be answered. Don’t pay any attention to it. It will go away.” H/t The Colonel and JWJFIII

A handful of items further afield worth noting this morning:

“Hedge funds ain’t dead yet,” the Wall Street Journal tells us after writing the obituary for the industry a year ago. “Written off … as overpriced and underperforming, hedge funds are pulling off an unexpected two-step this year: making money and taking in new cash. … That makes this year the industry’s best relative performance in a rising market since 2010. Investors, particularly in Asia and the Middle East, have begun sending new money hedge funds’ way, attracted by the better returns and a broad lowering of the industry’s famously hefty fees.”

Simpler PowerPoint presentations are better when you’re presenting (rather than, say, leaving behind a roadshow presentation), the Financial Times writes. We couldn’t agree more.

More than 49% of you have had a good year doing business in Egypt, while just over a third of you have had the opposite experience. 63% of you think business conditions will improve next year. Tap here if you missed the results last week of our 3Q2017 Enterprise Reader Survey.

The Official Enterprise Verdict on 4G after a day spent using it thanks to TE Data still being flaky in our neighborhood: Really fast.

What We’re Tracking This Week

The Emirates NBD PMI reading for Egypt comes out tomorrow.

Prime Minister Ismail Sherif declared Thursday a public holiday for government offices and state-owned companies, as the 6 October holiday falls on a Friday this year. There’s been no word from the Central Bank of Egypt on whether banks take the day off as well. We expect it will be business as usual for the private sector.

On The Horizon

The IMF has released chapters 2, 3, and 4 of its World Economic Outlook October 2017which delved into the subdued wage growth in advanced economies, the unequal impact of climate change on developing economies, and the impact of fiscal stimulus on cross border trade. Chapter 1 — the main event and which will delve into global economic growth and of specific countries (including Egypt) — is not out yet. We anticipate it will be out not long before the IMF and World Bank fall meetings on 9-10 October in DC. Its conclusions: Wage growth in advanced economies is slowing down thanks to automation, market forces and weakened productivity output; developing economies will be more hurt by climate change than advanced ones — and not much can be done about it on a national level; and the same economic forces that tend to amplify the domestic effects of fiscal policy also shape spillovers in cross border trade partners.

Enterprise+: Last Night’s Talk Shows

The talking heads tackled a variety of topics last night, including the anticipated Universal Healthcare Act, CAPMAS’ state census, and just how much our beloved holidays are costing the economy.

Paid vacations are costing the country’s GDP an estimated EGP 25 bn per day, former executive assistant to the IMF’s executive director Fakhry Elfiky told Masaa DMC’s Eman El Hosary. Elfiky’s calculations rely on dividing the total GDP in FY2017/18 — which is estimated at around EGP 4.5 tn — over the total number of workdays per year, making the 17 days of paid national holidays rather costly for the economy (watch, runtime 10:27).

Hona Al Asema’s Lamees Al Hadidi discussed the main planks of the Universal Healthcare Act with Vice Minister of Finance Mohamed Maait. He explained that key changes to the system include expanding health coverage to the whole family instead of the breadwinner, and allowing citizens to choose where they are treated rather than being pushed towards specific institutions, which means also to protect competitiveness (watch, runtime 58:36).

Lamees also hosted CAPMAS boss Abu Bakr El Gendy to delve deeper into the facts and figures of the 2017 state census. While still high, illiteracy (especially among the young) is on the decline, El Gendy said (watch, runtime 33:29).

We can expect another baby boom in 10-15 years, according to Baseera Director Maged Othman, who was brought in alongside the Presidential Council for Economic Development’s Chairman Abla Abdel Latif for a take on the report (watch, runtime 30:58).

Over on Yahduth fi Masr, Sherif Amer hosted veteran football player Magdy Abdel Ghany to talk about Egypt’s chances at its 2018 World Cup qualifier match against Congo next week.

Meanwhile, 90 Minutes’ Moataz El Demerdash announced on Saturday that he is leaving the show after years of hosting it. (watch, runtime 9:33).

Speed Round

Speed Round is presented in association with

Blumberg Grain announced it is moving on to the USD 150 mn second phase of its Shouna Development Project for grain storage after closing out the first phase with final payments settled. “Phase 2 is currently comprised of 300 additional new Shouna, replacing the country’s antiquated and deteriorated storage facilities, located close to Egyptian farmers, providing accessible storage, which is critical to the farmers and to reducing post-harvest losses,” Blumberg said in a statement released overnight (pdf). Blumberg Grain will enter the project as a joint venture with the Egyptian Army, and specifically the Army Engineering Authority, with a view to “fulfilling President Sisi’s vision for a state of the art food security network for Egypt’s farmers.”

When both phases are complete, Blumberg says the project “will provide badly needed infrastructure to Egyptian farmers, create new jobs in Egypt, and save Egypt over USD 551 mn annually.” As the 22-month second phase begins, Blumberg will also begin developing an industrial refrigeration manufacturing plant to serve the domestic market and allow for exports.

Separately, the Military Production Ministry has signed a cooperation protocol with the Supply Ministry to provide the latter with project implementation support, Al Mal reports. The agreement includes the Military Production Ministry supplying and providing maintenance for electronic equipment, surveillance, and machinery.

SODIC continues expansion on the North Coast: SODIC announced signing a new MoU for a 300-feddan land plot on the North Coast in partnership with the owner, according to a bourse disclosure. The parties are now conducting their due diligence. The MoU is the second to be announced by SODIC in two weeks, putting the total area of land on the North Coast the developer is finalizing agreements for to be 600 feddans, following last week’s similar announcement.

M&A WATCH- Switzerland-based private equity outfit ResponsAbility is planning on acquiring a non-controlling stake in Fawry, sources told Al Mal. Negotiations between the two companies are in “advanced stages” and ResponsAbility’s entry is expected to come through a capital increase, but the sources did not disclose the expected size of the investment.

M&A WATCH- The quasi-governmental Saudi Egyptian Industrial Investment Company (SEIC) is hoping to complete the acquisition of an unnamed, privately-held food manufacturer in October, SEIC Chairman Ali Al Ayed tells Al Mal. Talks are reportedly in advanced stages, and while Al Ayed did not name the target, he did state it was a mid-sized company that manufactures juice and dairy products. The company’s CEO had stated back in July that Cairo Financial Holdings had been tapped to advise on the transaction. SEIC plans to invest EGP 120 mn in total this year in the food and pharma industries. SEIC, an investment company set up by the governments of Saudi Arabia and Egypt, has invested around EGP 1 bn in Egypt. It holds stakes in medical disposables producer Farco Make and in Alexandria Carbon Black.

INVESTMENT WATCH- Indian auto maker Mahindra & Mahindra is finalizing procedures for reentry into the Egyptian market after a three-year absence, a source told Al Mal. The company, which will target the mid-income segment, is in talks with various potential partners to begin assembling its models locally and has already set up an office in Egypt. The carmaker had previously shown interest in sectors like farming equipment.

MOVES- Prime Minister Sherif Ismail has appointed Khaled El Nashar Deputy Chairman of the Egyptian Financial Supervisory Authority (EFSA). Investment Minister Sahar Nasr says the government finalize appointments to EFSA’s board in November. El Nashar was an assistant to the Justice Minister who was previously the deputy chairman of EFSA in 2013, according to Ahram Gate.

EARNINGS WATCH- Qalaa Holdings reported a net loss after minority interest of EGP 2.8 bn in 2Q2017, compared to a loss of EGP 277.5 mn in 2Q2016. While net revenues grew 25% y-o-y in 2Q2017 to EGP 2.3 bn, the decision to fully impair Africa Railways’ assets in Kenya “took a heavy toll on [Qalaa Holdings’] for the quarter nearing EGP 2.7 bn,” the company said in its earnings release (pdf). Nonetheless, management says an upswing in the Egyptian economy leaves the company confident of its ability to capture “the new favorable economic framework,” said Chairman and Founder Ahmed Heikal. “With our investment portfolio increasingly optimized for today’s economic realities, and with Egyptian Refining Company now 95% complete, we are reaching a watershed moment in our transformation into a lean and profitable company that maximizes value for shareholders,” said Co-Founder and Managing Director Hisham El-Khazindar.

Does the UN have proof Egypt was buying arms from Pyongyang? A UN investigation into a shipment of North Korean weapons seized while trying to sail through Egyptian waters in August revealed that Egypt was the illegal shipment’s final destination. The investigation “uncovered a complex arrangement in which Egyptian business executives ordered mns of USD-worth of North Korean rockets for the country’s military while also taking pains to keep the transaction hidden,” Joby Warrick writes for the Washington Post, citing unnamed US officials. The shipment was allegedly the largest and most recent of several “clandestine” transactions that prompted the USD to withhold nearly USD 300 mn in aid to Egypt, in a bid to apply more pressure on Pyongyang by forcing the Middle Eastern country to cut ties and stop supporting Kim Jong Un’s “booming illicit arms trade.”

Terrorist group Hasm claimed responsibility for a small explosion at Myanmar’s embassy in Cairo “saying it was in retaliation for that country’s military crackdown on Rohingya Muslims,” Reuters reports. The “interior ministry has not commented on Saturday’s blast, which local residents and media initially reported as probably the result of a faulty gas pipeline, but two security sources told Reuters that traces of explosives had been found at the scene.” Reuters notes that, if true, this would be the first time Hasm has claimed an attack on a civilian target.

Terror attacks in France, Canada: A French soldier shot dead a man who had stabbed and killed two women at Marseille’s main railway station yesterday “in what officials described as a ‘likely terrorist act,’” Reuters reports. Daesh claimed responsibility in a statement. Meanwhile, a suspected Islamist terrorist in Edmonton, Canada, stabbed a police officer and drove a van into a crowd of pedestrians. Five people were injured, the Toronto Star reports.

US regulators unshackle AIG from “too big to fail” classification: In one of the bluntest-yet signs that financial crisis-era reforms are being unwound, the Financial Stability Oversight Council has removed AIG’s classification as “too big to fail.” The move would free the insurance provider from proposed capital surcharges and other federal restrictions on its business, the Financial Times reports. FSOC is the body that decides which non-bank financial companies are “systemically important.” Fed boss Janet Yellen voted in favor of the move.

Regional malaise? Saudi Arabia’s non-oil economy is sputtering, with the latest data showing that “businesses and Saudi consumers were still struggling to cope with government policies. Private sector activity grew at an annual rate of 0.4 percent, compared with 0.9 percent in the previous quarter,” Bloomberg reports. Lest the Statelet of Qatar start feeling its oats on that front, “Qatar’s economic growth was slowing even before a Saudi Arabia-led bloc severed diplomatic and transport links in early June,” the business information service notes. Qatar is expected to grow this year at 2.5%, or about the slowest pace since 1995.

Political leaders in Catalonia are claiming the right to statehood after “a contentious referendum that was marred by violence,” BBC reports. Some 800 people were injured in clashes with police yesterday as they attempted to block the ballot for Catalonia’s independence, which the Spanish constitutional court had declared illegal. Catalan leader Carles Puigdemont reached out to EU officials through the media, saying they “could no longer continue ‘to look the other way.’”

CLARIFICATION- In our coverage of the CAPMAS national census we had stated that the number of married women aged 12 made up 18% of married women in Egypt, based on media reports including remarks on Saturday night by Planning Minister Hala El Said to CBC talk show host Lamees El Hadidy. A presentation of the statistics to President Abdel Fattah El Sisi suggests that in fact 40% of married women are under the age of 18. It does not break out those aged 12 — that figure remains in the CAPMAS report that has yet to be publically released. H/t Sherif A.

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The Macro Picture

Why emerging markets value equities are breaking with historic USD sell-off patterns: That emerging markets equities rallied 25.3% just as the USD’s value in trade-weighted terms fell 9.4% this year should not come as a surprise. Yet when we look deeper at the performance of EM value stocks, one notices this pattern collapsing in this latest rally, writes the FT’s Steve Johnson. Since 2000, value stocks had outperformed growth equities in every USD sell-off cycle with the exception of this latest one. The correlation between USD sell-offs and the ratio value and growth stocks over the past four cycles had averaged 85%. This fell to -89% this year, says Geoff Dennis, head of global EM equity strategy at UBS.

This “anomaly” is reflection of changes in the fortunes of key emerging markets sectors. Historically, energy and commodities stocks have strongly outperformed the MSCI EM index as a whole during periods of USD weakness, while IT stocks have markedly underperformed. With EM IT stocks bolstered by growth in China (particularly from internet stocks such as Alibaba and Tencent) and energy prices plummeting, insiders, including JP Morgan’s chief investment officer for EMs Richard Titherington, believe this shift is behind the break with history.

Image of the Day

Xinhua put together a photo essay on Fayoum’s Wadi El Hitan, which hosts “invaluable fossil remains of the earliest, and now extinct, suborder of whales.” The natural reserve area was designated as a UNESCO World Heritage Site in 2005, the newswire notes.

Egypt in the News

Alleged state-ordered “invasive forensic examinations” of those arrested atthe Mashrou’ Leila concert on charges of “debauchery” continued to top coverage of Egypt in the foreign press.

An Egypt-led bid to reconcile Fatah and Hamas in Gaza moved forward yesterday as officials from the Fatah-led government began filing into Gaza to commence the handover of administrative control over the territory, according to Ma’an. An Egyptian delegation led by Cairo’s ambassador to Israel, Hazem Khairat, is in Gaza to help mediate the transition. Egypt’s chief spy Khaled Fawzy, who was instrumental to the negotiations, is also expected to visit both Ramallah and Gaza next week. Mediation may be the order of the day, since Palestinian President Mahmoud Abbas has set conditions for a full reconciliation that would see Hamas lay down its arms and “dismantle its military wing.” This comes as we learn that Hamas has reportedly accepted an Egyptian plan for a multi-stage prisoner exchange with Tel Aviv, according to The Times of Israel.

Egypt’s position towards Hamas remains “quite delicate,” Sonia Farid cautions in a piece for Alarabiya. Hamas is seeking Egypt’s mediation in its reconciliation efforts with Fatah, even though a 2014 court ruling has banned all Hamas activities and ordered the closure of all the group’s offices in Egypt. These factors “complicate the situation between Egypt and Hamas and make it hard to envision a possible rapprochement.”

A potential spanner in the works? Libya’s attorney general is claiming that Hamas smuggled weapons out of Libya via Egypt, according to US right-wing media outlet Breitbart.

A proposed anti-hate crime bill crafted by Al Azhar is so vague it could openthe door for the institution to dictate the tenor of religious discourse at the expense of free speech and even oppress the Christian minority, writes Ashraf Ramelah writes for Canada Free Press. “The ambiguity of the bill, if passed, will muzzle thinkers and intellectuals and stifle expression more so than now. With this maneuver, Al Azhar shows that its aim is to govern behavior and gain more power over personal lives,” he says.

Also worth noting in brief this morning:

  • US writer Beth Doane tells the HuffPost in an interview that now is the best time to visit Egypt as “you will likely get to trek into parts of ancient temples that are generally off-limits due to extreme crowds.”
  • Baher Kamal gives a snapshot on “what it means to be an Egyptian migrant in Rome,” reciting stories of some legal and illegal migrant to Italy.
  • Cyprus’ Famagusta Gazette picked up President Abdel Fattah El Sisi’s remarks on how Egypt “will continue efforts to protect human rights” while battling terrorismat a meeting with National Human Rights Council chief Mohamed Fayek.
  • Alexandria held a Cleopatra-themed event on Saturday to highlight the discovered sunken palace and city of the ancient Egyptian queen, Xinhua reports.

Worth Watching

Supporting women’s economic empowerment: Increasing female employment rates to match those of males’ would increase Egypt’s GDP by 34%. That’s why, following President Abdel Fattah El Sisi’s declaration of 2017 as the Year of the Egyptian Woman, the National Council of Women launched an awareness-raising campaign entitled “Taa Marbouta” to promote women’s social, political and economic empowerment in Egypt. Nahla Zeitoun writes for the World Bank’s Arab Voices blog that “the slogan of the campaign, ‘Taa Marbouta is the Secret of your Power,’ shows that the designation as ‘feminine’ should no longer be considered an obstacle to achievements.” The campaign includes three PSAs supported by the NCW, UNFPA, UNDP, UN Women, USAID, and the Swedish International Development Agency. The PSAs focus on female labor force participation, promoting female employment, containing messages to the woman herself to create a sense of agency, and to society at large with a focus on breaking stereotypes.

Diplomacy + Foreign Trade

Finance Minister meets French trade delegation: Finance Minister Amr El Garhy discussed Egypt’s reform agenda with representatives from the 25 largest French firms doing business in the country, according to a ministry statement. France will continue to invest in Egypt and some 150 French companies currently have total investments of around USD 4 bn, mostly in manufacturing, food, construction, telecoms, retail, and energy, according to French ambassador Stéphane Romatet, who hosted the event organized by BNP Paribas.

El Garhy’s remarks come as Paris is getting ready for President Abdel Fattah El Sisi’s upcoming visit, which should happen “soon,” Romatet said on Sunday, according to Al Shorouk.

Haftar looks for broader popular support: Gen. Khalifa Haftar, Egypt’s ally in Eastern Libya, is seeking to bolster his national political presence in a possible bid to peacefully replace the United Nations-backed government of Prime Minister Fayez Al Serraj in Tripoli, says Bloomberg. Haftar’s supporters have launched a political campaign and supposedly collected around 700k names in a petition in a bid to boost his legitimacy.

Investment Minister Sahar Nasr signed a protocol agreementwith Director of the International Labor Organization Cairo Office Peter Van Rooij to cooperate on increasing employment in Egypt. The protocol aims to create one mn job opportunities a year for three years.


KarmSolar signs USD 23 mn agreement with Dakahlia Group

KarmSolar announced signing a USD 23 mn agreement to build solar stations for Dakahlia Group subsidiaries Dakahlia South Valley Poultry and Dakahlia Wadi El Natroun Agriculture. The agreement will provide the companies with 23.5 MW of energy, equivalent to 75% of their energy needs over 30 years through two stations in Minya and Wadi Natroun. The agreement will allow KarmSolar to “provide the power at a lower cost than the government,” KarmSolar CEO Ahmed Zahran says.

Companies to submit financial offers for Egypt-Saudi interconnection project this month

Companies vying for the Saudi-Egyptian electricity grid interconnection project will be submitting their financial offers at the end of October, unnamed government sources tell Al Borsa. The Egyptian Electricity Transmission Company and Saudi Arabia have assessed technical offers from Alstom, ABB, and Siemens, the sources say. The chosen firm will establish two substations in Badr City and the lines connecting them to the switch station in Nabq. The USD 1.6 bn, three-phase project will see both countries exchange about 3 GW of power and should start trial operations by 2021, according to the sources. The Electricity Ministry had previously said operations would begin by 2019.

Solar power companies ask for two-week extension on financial close deadline for FiT projects

Solar power companies that have signed power purchase agreements with the state for projects in Benban, Aswan under the feed-in tariff program have asked the Electricity Ministry for a two-week extension on their financial close deadline, which expires this month, Al Borsa reports. A number of companies had complained in September that infrastructure development for the solar power complex was moving at a much slower pace than expected, causing concern as they work towards financial close.


EBRD reportedly interested in funding USD 2 bn logistics zone in Six October

The European Bank for Reconstruction and Development (EBRD) has reportedly expressed interest in funding a part of the USD 2 bn Six October logistics zone, Transport Ministry sources tell Al Borsa. The European Investment Bank has apparently also completed a feasibility study on the project, which is expected to be tendered to the private sector before the end of the year, the source added. Transport Minister Hisham Arafat is due to travel to the UK this month to drum up investor interest in the zone.

Basic Materials + Commodities

Authorities say no Romanian wheat was sieved, still being unloaded; no preferential terms for British wheat

Authorities will complete unloading the shipment of poppy seed-containing Romanian wheat on Tuesday, a source at the Agriculture Ministry told Reuters. 43k tonnes out of a total of 63k tonnes were unloaded so far, the source noted, and no amounts have been sieved yet. Meanwhile, the entry of British wheat into the Egyptian market will depend on the offers it presents and not on any prior negotiation or agreement, a government source told Al Mal. The Brits expressed interest last week in exporting to Egypt with the view that the normal market for their surplus, Europe, may not be available after Brexit.

Savola Group eyes expansion in Egypt

Saudi Arabia’s Savola Group is eying expanding in Egypt, said the company’s CEO Bader Hamad Al Aujan at a meeting with Trade and Minister Tarek Kabil and Supply Minister Ali El Moselhi, according to Al Masry Al Youm. Though Al Aujan was vague on the nature of this expansion, El Moselhi had reportedly said at the meeting that he welcomed Savola’s participation in Supply Ministry tenders to supply government outlets.

Agriculture Ministry announces new fertilizer prices

The Agriculture Ministry approved yesterday hiking prices on urea and nitrate fertilizers to EGP 3,200 and EGP 3,100 per tonne, respectively, a ministry source tells Al Shorouk. The Farmers’ Syndicate is objecting to the new prices, which come into effect today, saying the hikes were not studied adequately and will benefit businesses at the expense of agricultural production, according to Al Mal.


MAM looking for investors to help fund EGP 450 mn aluminum chip factory

Misr Insurance subsidiary Misr Asset Management (MAM) is shopping for investors to help fund the construction of the Metallurgical Industries Holding Company’s EGP 450 mn aluminum chip factory in Beni Suef industrial zone, MAM Chairman Atef El Mahmoudy tells AMAY.

Trade Ministry prepares a strategy to develop spinning and weaving production

The Trade and Industry Ministry is preparing a strategy to develop the spinning and weaving sector that will target each phase of the production chain, Minister Tarek Kabil announced on Saturday, Al Masry Al Youm reports. The ministry is also preparing plans for the New Textile City it intends to establish.

Health + Education

Cleopatra Hospital’s EGM approves raising authorized capital to EGP 2 bn

Cleopatra Hospital Group’s extraordinary general assembly approved increasing the company’s authorized capital to EGP 2 bn from EGP 800 mn, the company said in a bourse filing on Sunday (pdf). As we noted last week, Cleopatra is reportedly aiming to invest some EGP 1 bn on new acquisitions in 2018.

Health Ministry in talks with Eli Lilly to acquire cancer treatment at half price

The Health Ministry is in talks with US pharma manufacturer Eli Lilly to acquire its new cancer treatment for the local market at a discounted cost, Al Mal reports. The ministry is hoping to strike an agreement with the company to purchase the treatment at half its current cost of EGP 44,000.

Exposed water reservoirs likely behind Dengue fever breakout in Qusair, Qena

Water reservoirs in the city of Qusair are uncovered and provide fertile ground for Dengue fever-containing mosquito larvae to grow, Health Ministry spokesperson Khaled Megahed said yesterday, according to Ahram Gate. This came after several cases of Dengue fever were reported in Qusair and Qena.


Tourism Ministry to disburse charter flights incentives program payments this month

The Tourism Ministry will disburse overdue payments to foreign charter airlines under the 2015 incentives program by mid-October, Tourism Promotion Authority Vice President Ahmed Hamdy tells Youm7. The payment will cover the January-March 2017 period. The ministry has also given a preliminarily nod to extending the program for an additional year, Hamdy says.

Thomas Cook to fly to England twice a week from Marsa Alam

Thomas Cook will begin operating two weekly flights between the UK and Marsa Alam starting 19 October, the company’s Egyptian agent, Bright Sky CEO Moudy El Shaer, tells Al Borsa. The first will connect to Gatwick Airport, while the second, which will start on 30 October, will connect to Birmingham Airport. The new flights are expected to run through the winter season, but negotiations are ongoing to extend the term to the end of next year, as tourist arrival figures are expected to remain on the mend.

Automotive + Transportation

Geyushi Motors in talks to buy EGP 200 mn auto plant

Egypt’s agent for China’s FAW Group, Geyushi Motors, is in talks to acquire an auto plant in 10 Ramadan City for EGP 200 mn, to begin assembling company models locally, a source close to the negotiations tells Al Mal. Operations at the 80k sqm facility, which would allow Geyushi to begin production almost immediately, had been halted in 2013. FAW had announced in early September its intention to build a minibus and pickup truck assembly factory that could serve the local market and also export to neighbors.

Auto sales slump continues in August

The auto industry slump continues, with overall sales declining 20% y-o-y in August and only 14,102 vehicles sold, Al Borsa reports citing a report by the Automotive Marketing Information Council. Passenger car sales fell 20% for the month, while bus sales dropped 25.9%. Truck sales slipped 14.8% in August. Sales from January through to August fell 39% y-o-y, according to the report. Over that eight month period, Chevrolet held the top sport for passenger car sales with a 23% market share, followed by Nissan (17%) and Hyundai (13.5%), says the newspaper.

Banking + Finance

EBRD reviews funding Banque Misr, AlexBank with USD 155 mn

The European Bank for Reconstruction and Development (EBRD) is reviewing proposals to provide Banque Misr and the Bank of Alexandria with USD 155 mn in funding. The EBRD is considering providing USD 125 mn to Banque Misr for SME funding, and USD 30 mn to AlexBank to fund green projects.

Other Business News of Note

Importers granted three months to obtain proper licensing for storage

Trade and Industry Minister Tarek Kabil is giving importers without warehousing permits three months until 1 January to obtain the necessary licenses, according to a ministry statement. Once the grace period expires, ports will not be permitted to release cargo without official documentation.

Egypt Politics + Economics

Crackdown on underage marriage begins

Egypt’s Administrative Prosecution referred a cleric from Mahalla to trial for his role in the marriage of 27 underage girls in the city on Saturday, Ahram Online reports. The move comes just one day after President Abdel Fattah El Sisi called for the practice to end following a presentation on the national census by CAPMAS. Planning Minister Hala El Said had announced on Saturday that the government plans to criminalize underage marriage.

Greece plans joint air drills with Egypt, Israel, Cyprus

Greece is drawing up plans for joint air force drills with Cyprus, Israel, Egypt and other European countries, Greek Defense Minister Panos Kammenos said, according to the Associated Press. The drills are set up as part of the efforts to bolster stability in the eastern Mediterranean.

On Your Way Out

Academy award winning actor Forest Whitaker paid a visit to the Egyptian Museum while in Egypt for the Gouna Film Festival, reports Youm7. The actor made the stop in Cairo after he picked up a Career Achievement Award. On air last night, talk show host Amr Adib praised the actor for doing his part for Egyptian tourism — and the Sawiris brothers for flying him in (watch, runtime 2:28).

ON THIS DAY- On this day in 1869, the leader of the Indian independence movement against British rule, Mahatma Gandhi, was born. In 1993, Communists were rioting in Moscow and several people were injured following then-President Boris Yeltsin’s decision to dissolve parliament and call for fresh elections. On this day two years ago we were raging against the premature, and hitherto false, announcements that Queen Nefertiti’s tomb could be in a hidden chamber behind King Tutankhamun’s tomb.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6006 | Sell 17.7006
EGP / USD at CIB: Buy 17.60 | Sell 17.70
EGP / USD at NBE: Buy 17.60 | Sell 17.70

EGX30 (Sunday): 13,980 (+0.6%)
Turnover: EGP 924 mn (4% below the 90-day average)
EGX 30 year-to-date: +13.2%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 0.6%. CIB, the index heaviest constituent ended up 0.1%. EGX30’s top performing constituents were: Kima up 5.4%, Emaar up 4.9%, and AMOC up 4.2%. Yesterday’s worst performing stocks were: Arab Cotton Ginning down 4.1%, Domty down 1.6%, and Pioneers Holding down 0.9%. The market turnover was EGP 924 mn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +1.3 mn
Regional: Net Long | EGP +2.8 mn
Domestic: Net Short | EGP -4.1 mn

Retail: 77.0% of total trades | 75.8% of buyers | 78.3% of sellers
Institutions: 23.0% of total trades | 24.2% of buyers | 21.7% of sellers

Foreign: 9.7% of total | 9.8% of buyers | 9.7% of sellers
Regional: 7.9% of total | 8.0% of buyers | 7.7% of sellers
Domestic: 82.4% of total | 82.2% of buyers | 82.6% of sellers

WTI: USD 51.67 (+0.21%)
Brent: USD 56.79 (-0.65%)
Natural Gas (Nymex, futures prices) USD 3.01 MMBtu, (-0.33%, November 2017 contract)
Gold: USD 1,284.80 / troy ounce (-0.30%)

TASI: 7,233.84 (-0.68%) (YTD: +0.32%)
ADX: 4,410.51 (+0.3%) (YTD: -2.99%)
DFM: 3,545.40 (-0.52%) (YTD: +0.41%)
KSE Weighted Index: 435.14 (+1.03%) (YTD: +14.48%)
QE: 8,292.10 (-0.24%) (YTD: -20.55%)
MSM: 5,155.56 (+0.35%) (YTD: -10.85%)
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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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