Wednesday, 18 October 2017

Fuel prices, VAT rate won’t rise this year, El Garhy says, targeting 6% GDP growth

TL;DR

What We’re Tracking Today

GERD is still giving us GERD: Officials from Egypt, Sudan and Ethiopia meet in Addis Ababa today to chew over the environmental impact of Ethiopia’s Grand Ethiopian Renaissance Dam (or GERD, as it’s known). It’s the latest development in shuttle diplomacy on an issue that could have deep, long-term impact on downstream nations — us in particular.

Federal judge pulls the plug on Trump’s third travel ban a day before it was meant to come into effect: A federal judge in Hawaii issued a nationwide ruling on Tuesday that will “prevent the Trump administration from stopping almost all travel to the US indefinitely from most of the countries named in the ban,” the NYT reports. The verdict came one day before the third iteration of the ban was set to take effect, stating that it “‘suffers from precisely the same maladies as its predecessor,’” as it violates the US constitution with its “plain” nationality-based discrimination. The ban targets individuals from Muslim-majority nations.

How big is the risk of another Black Monday equities crash? That’s the subject of this morning’s very good Financial Times “Big Read” in advance of tomorrow’s thirtieth anniversary of the crash. There are plenty of similarities between today and the status quo just before the Black Monday crash, the salmon-colored paper argues, quoting a trader still in the game after surviving the 1987 crash as noting, “People just keep buying the dips and following the money up. When you have been doing this for over 50 years, when you see those similarities, you say the last time it got like this it didn’t end well.”

Notes the paper: “No two market eras are alike, yet the ‘buy the dips’ mentality — something that has been stronger than ever on Wall Street this year — is only one of a number of striking parallels with 1987. After hitting a succession of fresh all-time records, valuations are stretched. Now, as then, the US is engaged in sabre-rattling with foreign foes, including Iran. Trading strategies designed to protect investors could end up exacerbating any correction, just as in 1987, while regulators could be as ill-placed to monitor risks as they were back then.” What’s more, it says, is that this comes at the same time as “there is a perennial worry that a bout of fierce selling, particularly in ETFs indexed to less liquid securities, could exacerbate market losses.”

Why another Black Monday may not happen: “Even leading market sceptics, many of whom believe stock prices could start to drop, doubt that another extreme sell-off in equities might be imminent. Partly this view comes from a belief that over-confidence is currently absent.”

And before we move on: The wifi apocalypse to which we alluded yesterday looks unlikelyto come to pass. The risk of a “KRACK attack” is real, but Microsoft has already published a fix, Apple has done so in betas of its various operating systems that are now in testing, and Google is also working on it. As usual, owners of supported Pixel and Nexus devices will get the fix as soon Google pushes it out — look for it in the early November Android update — but others on Android will be vulnerable until their device manufacturer fixes it. TechCrunch and CNET have all the details.

What We’re Tracking This Week

Some 25 Portuguese companies and senior government trade officials will take part in the second Egyptian-Portuguese Business Forum on Thursday, said the head of the Federation of Egyptian Chambers of Commerce Ahmed El Wakeel. Foreign Minister Sameh Shoukry and his Portuguese counterpart Augusto Santos Silva will be attending the forum. El Wakeel tells Al Masry Al Youm that the firms are looking for partnerships to manufacture in Egypt with an eye towards exporting to African, MENA and EU markets. The companies cover a broad range of sectors including finance, food, pharma, energy, ICT, logistics and railway transport.

On The Horizon

President Abdel Fattah El Sisi will inaugurate the new Alamein city early next week, according to Al Borsa. Housing Minister Mostafa Madbouli said the city will eventually be home to 3-4 mn people and house an industrial zone, universities, and tourism developments.

EFG Hermes will hold its 7th Annual London Conference on 6-9 November. The conference will see C-suite execs from top listed companies in MENA as well as frontier markets (among them Pakistan, Kenya, Nigeria, Bangladesh, and Sri Lanka) meet face-to-face with top global investors with mandates to invest in emerging and frontier markets. The event will take place at Emirates Arsenal Stadium in London.

The Investment Ministry’s investment map of some 600 projects will be ready by December, and projects will be ready for investor bids by January, according to sources from the General Authority for Freezones and Investment.

Enterprise+: Last Night’s Talk Shows

El Garhy on eurobond program, praise for Egypt in the US: The planned eurobond issuance will not add to the pressure of external debt, as interest rates have dropped to 6% on 10-year bonds, down from 7.5%, while six-year bonds now carry a rate of 5%, down from 6.5%, Finance Minister Amr El Garhy told Masaa DMC’s Osama Kamal. El Garhy reassured the host that bonds will be issued annually, with their value being determined according to GDP. The minister also talked about the praise Egypt’s economic reform program received at the IMF and World Bank fall meetings and how that reflects renewed investor interest in Egypt (watch, runtime 5:38).

It was otherwise a banal night on the airwaves, with the nation’s sports minister promising that Egypt won’t be kicked out of the World Cup despite the Egyptian Football Association’s failure to hold elections for its board and Amr Adib chatting with his brother Emad El Din about the economy and politics. Amr Moussa also popped up last night to plug his autobiography, which Al Shorouk has been serializing.

Speed Round

Speed Round is presented in association with

The Ismail government has no intention to raise fuel prices this year and it is not going to hike the rate of the value-added tax, Finance Minister Amr El Garhy said yesterday in an interview with Reuters. “People have to be sure that we have a strong macro/fiscal consolidation… That would basically facilitate the decision making process for investors to come into the country,” he said.

The finance minister also confirmed that Egypt’s financing agreement with global banks, secured as part of a repurchase (repo) transaction in 2016, is expected to be renewed this year. The USD 2 bn in repo funding was secured last November against USD-denominated sovereign bonds issued in a private placement and are listed on the Irish Stock Exchange. El Garhy hinted that the funding amount could be increased with the renewal, saying “it depends on the amount of the haircut, or discount. I think it will be improved. Last year it was 30%. I think this will improve this year and the discount could be only 25%, and that reflects improvement in the risk profile of Egypt.” The consortium of international banks with which Egypt had signed the agreement had offered last month to extend the financing agreement to USD 5 bn with a five-year maturity.

Separately, El Garhy also confirmed plans to issue USD 3 bn and EUR 1 bn worth ofeurobonds, but said that no decision has been made on the timing of the issuance, “but most probably we start at the beginning of the year.”

Analysts expect growth to come in below government projections: The finance minister also said that with a focus on tourism, agriculture, and technology, the plan is to hit a “steady” 6% GDP growth rate over the next five-to-seven years starting from FY2018-19. Read that against a Reuters poll out yesterday that suggests the market expects growth to clock in at something closer to 4.4% in the current state fiscal year. The expectation is “well below government projections of 5.0-5.25%” and the IMF’s of 4.5%. GDP growth in FY2018-19 is expected to be 4.6%, the poll found. “Our forecast for GDP growth … reflects robust growth in exports, stronger industrial production, rising natural gas production and recovering tourism, though high costs remain a challenge for the private sector,” said Maya Senussi, a senior economist at Oxford Economics. The Reuters poll also expects core inflation to settle at 15% in FY2017-18 and drop to an average of 10% a year after.

INVESTMENT WATCH- Chinese auto firm Geely will turn Egypt into a regional manufacturing and distribution hub — if the “automotive directive” becomes law, senior company officials tell Al Mal. The company’s expansion plans rest on the incentives laid out by the legislation, which is designed to prompt local assemblers to go further up the value chain into manufacturing. The company is working with its licensed domestic assembler and distributor, GB Auto, on the expansion plan, which will include assembling new models annually in Egypt. Geely is targeting increasing exports to the MENA region and Europe, the officials added. As we noted earlier in the month, the House of Representatives’ Industry Committee is looking to jumpstart the automotive directive, which has languished in committee thanks to lobbying by auto importers.

In news on other closely watched legislation, the executive regulations for the Natural Gas Act will be finalized this month and sent over to the Ismail Cabinet for review, the recently-appointed head of the new market regulator, Karem Mahmoud, tells Youm7. The regs will outline the roles and duties of the market regulator, which will be in charge of easing the state out of the industry and regulating both private and public players. Among its responsibilities will be to issue licences to import natural gas. Four unnamed private firms have already submitted requests to EGAS for preliminary approval on their import licenses, sources tell Al Shorouk. EGAS had reportedly approved natural gas import licenses in August for Fleet Energy, BB Energy, and Qalaa Holding’s TAQA Arabia following the issuance of the Natural Gas Act, effectively opening the market to competition.

M&A WATCH- Orascom Development Holding (ODH) is reviewing four competing bids for its 87% stake in Tamweel Financial Holding, IR Director Sara El Gawahergy told Al Mal. She did not name any of the would-be acquirers, but said three of the four bids were from local investors and the fourth is a joint bid from an Egyptian and an international company. ODH is considering either reducing its holding into a non-controlling one, or divesting altogether, El Gawahergy says, expecting the transaction to close by the end of the year. The company is looking to exit Tamweel because it does not fit with its core business and completing the transaction was delayed because of the “repeated increases in interest rates.” EFG Hermes is sell-side advisor on the transaction.

Could disgruntled inspectors really be behind recent disruptions in Egypt’s wheatshipments? Reuters’ Eric Knecht and Maha El Dahan are noting allegations by traders that Egypt’s inspectors, upset at losing their expenses-paid travel privileges and their “perks,” have been deliberately overzealous in their wheat inspections and causing disruptions in imports. Under the old inspections system, Egypt’s wheat inspectors were wined and dined, with accommodation and shopping being covered by wheat agents from Odessa to Dunkirk, traders allege. When the system changed in 2016 following the great ergot flip flop and the government outsourcing inspections at foreign ports to private companies, Egyptian inspectors are bucking back, they added. Inspectors speaking to Reuters have denied that pettiness was behind the disruption, alleging instead that importers have been sending wheat of poor quality.

Will we or won’t we sign the Dabaa nuke contracts this year? Electricity Minister Mohamed Shaker announced yesterday that Egypt and Russia will ink the agreement for the USD 30 bn Dabaa nuclear power plant before the end of 2017, Al Ahram reports. Shaker’s announcement is the latest in a string of mismatched reports and statements about the signing date. Just last week, high-level sources from the ministry claimed the Council of State had not completed its review of the project’s four contracts, making it unlikely they would be signed this year. Other sources alleged a week earlier that the Council had in fact reviewed and sent the contracts over to Ittihadiya, and that Russian President Vladimir Putin was expected to attend the signing ceremony in Egypt this month.

Education Minister Tarek Shawki issued an overnight decision hiking public school tuition fees, spurring a wave of criticism from disgruntled parents. The annual increase of EGP 20-30 was necessary to help the ministry cope with rising costs, Shawki told Hona Al Asema talk show host Lamees Al Hadidi last night, pointing out that the amount should be marginal for most (watch, runtime 17:54). Parents, however, disagreed. The higher fees might force more people to pull their children out of school, a member of the Egyptian Mothers’ Association for the Advancement of Education tells Al Masry Al Youm. Healthcare services at public schools — which Shawki pegged as a reason behind the hike — are also of very low quality, which makes it unfair for parents to have to pay more for them, she points out.

Also from the Education Ministry yesterday: Days in Cairo public schools will run longer, and Egyptian students enrolled in ministry-run schools in Saudi Arabia will be required to pay their tuition in USD instead of EGP, also due to higher expenses.

The IFC signed an agreement with the Swiss Secretariat for Economic Affairs (SECO) to boost access to financial services for women in the Middle East and North Africa, to help close the economic gender gap and support growth and jobs. SECO will provide up to USD 5 mn IFC Advisory’s Women Banking Champions initiative in Egypt, Morocco, and Tunisia. “As well as highlighting the fact that lending to women makes good business sense, the program will help lenders tailor their products and services for female borrowers. It will also provide customized training for women in business planning, management and financial literacy, and offer networking and mentoring opportunities to spur business growth. The program also supports thought leadership and knowledge management activities,” the IFC notes.

Fed Governor Jerome Powell is being tipped as the next head of the Federal Reserve when current chair Janet Yellen’s tenure expires in February, according to a Reuters poll of some 40 economists. Just over half of poll takers see Powell as next in line as he is the candidate of continuity. “The most continuity between Fed chairs would be Yellen to Powell. Given where we are in the tightening cycle some consistency would be welcomed by financial markets,” said Ryan Sweet at Moody’s Analytics. 13 economists believe that former Fed Governor Kevin Warsh is the next likely candidate.

Among the handful of other international news headlines worth noting on a relatively quiet news morning:

  • Daesh threatened Russia on Tuesday that it would attack the 2018 World Cup Final, according to the Daily Mail.
  • The terror group, meanwhile, has been dislodged from Raqqa by US-backed militias, which effectively (but not officially) declared victory in the battle yesterday, according to Reuters.
  • Israel will not resume peace talks with the Palestinian government until Hamas “agrees to a series of conditions it is unlikely to accept,” including officially recognizing Israeli statehood and disarming, the Associated Press reports.
  • A journalist investigating corruption in Malta was killed in a car bomb on Monday,according to The Guardian.

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The Macro Picture

The rising number of educated women in the Middle East is not translating into jobs for them in the region — which, rather obviously, isn’t good for economic growth, according to a piece by the Thomson Reuters Foundation. World Bank data shows that almost all girls in the MENA region now attend school and more women attend universities than men. If these metrics do not translate into jobs, it curbs the benefits of “demographic dividend” — an acceleration of economic growth as the working-age population expands relative to the non-working-age.

“The demographic dividend is not going to be as good as in Asia,” said Tiziana Leone, assistant professor in demography at the London School of Economics. “If they want the benefit of it then you need more gender parity.” Blame for this lack of women employment is varied, with some blaming traditional conservatism in some countries and a lack of reproductive education in others. Countries in conflict also tend to see fewer women in the workforce.

Egypt in the News

Topping coverage of Egypt in the foreign press this morning is a study on the impact of climate disruption on social stability in Ancient Egypt published on Tuesday by the journal Nature Communications. Scientists used ice core data — a more accurate method of tracking historical volcanic eruptions — and papyrus records on social unrest in Egypt for the study.

They found that volcanic eruptions on the other side of the world impacted the seasonal flooding of Nile, causing social unrest and protests. The study holds lessons for modern politicians on the social impact of climate change. The research is also emblematic of a new trend that sees scientists from different fields collaborating with social scientists and historians, the Washington Post notes. Damn near enough to make us wish we were back in grad school.

The New York Times reviewed global appetite for emerging market debt in a piece titled “Why investors can’t get enough of Tajikistan’s Debt.” Central bank Governor Tarek Amer says, “Investors are feeling good — we have had USD 20 bn come into Egypt over the past year … The money is pouring in.” Brett A. Rowley, an emerging market bond investor at TCW, was also praising Egyptian debt, having reportedly told Amer “I told everyone: buy more T bills.” The piece, written by Landon Thomas Jr., for some unknown reason, refers to the EGP as the “Egyptian Lira.” He says this appetite for emerging market debt is “worrying global watchdogs” and notes that “developing nations issued a record USD 133 bn in debt … Bankers have forecast another stellar year in 2017, approaching USD 150 bn — an amount that is nearly twice what was raised in 2015.”

The Boston Celtics’ 24-year old forward Abdel Nader is adamant he can help Egypt embrace the game of basketball, he says in an interview with Sport 360. As one of the first Egyptian basketball players in the NBA, Abdel Nader “is ready to take the NBA by storm after impressing in the NBA G League last year.” He says he was “thinking about going back this summer to open up some camps, doing some basketball camps there [in Egypt] and seeing how that goes. It would be great to stay tied up with the community there and seeing how that works out.” How quickly they lapse into sportspeak.

Sawiris looks to annul ruling on his case against Algerian government: Naguib Sawiris is looking to annul the international court ruling rejecting his c. USD 4 bn claim against the Algerian government over the ownership of Algerian mobile operator Djezzy, Developing Telecoms says. Sawiris reportedly filed an official appeal for annulment of the June ruling late in September. The verdict, which was issued after a four-year long battle with Algerian authorities, had ordered Sawiris to foot 50% of the government’s c. USD 3.5 mn legal bill for the case.

Christian Louboutin loves us: Apparently it’s “very easy” to get your luggage back at Cairo Airport, or so says designer Christian Louboutin, who also lists Cairo’s Museum of Egyptian Antiquities as his favorite in the world, in an interview with WSJ (paywall).

Also worth noting in brief this morning:

  • Nigeria’s Federal Ministry of Health has released a memo to the Nigerian Medical Association alerting “Nigerians on the high rate of kidney trafficking in Egypt.” The memo is to create awareness to Nigerians intending to travel to Egypt for medical attention, Daily Post reports.
  • Egypt’s film industry has tried to tackle the “problem” of overpopulation since the 1960s with mixed views over their efficacy, Ahmed Fouad writes for Al-Monitor.

On Deadline

The recent uptick in terror attacks in Egypt is a direct result of Daesh losing ground in itsIraq and Syria strongholds, Emad El Din Adib writes in El Watan. As the group weakens, offshoots in Egypt and other countries are encouraged to launch large scale attacks to re-establish its strength. Adib also suggests that Daesh fighters have escaped from cities like Mosul and Raqqa to join various splinter groups. This makes it imperative we step up our anti-terror game and revise old strategies are now ineffective, Al Masry Al Youm’s Amr El Shobaky says.

Worth Reading

How North Korea launders its cash: Hong Kong is North Korea’s preferred spot for money laundering, a report by CNN’s Joshua Berlinger showed. The hermit state uses a handful of front companies to get access to the global financial system and cover up much of its trade, from selling coal and fuel to exporting weapons and to buy goods and services. North Korea’s problem is that it needs to trade internationally in USD or EUR “but has to figure out ways to do it when none of its partners want to be the node where North Korea and the US overlap in the international financial system.” The UN Panel of Experts on North Korea outlined how the country utilizes the system in Hong Kong to gain access to markets. Panel coordinator Hugh Griffiths explains that “it should come as no surprise that Hong Kong is featured so prominently … It’s the closest major international financial center to North Korea. It’s the closest major offshore international financial center to North Korea. And historically, it’s been a center of global and regional trade … and with fewer questions asked and looser regulation than, say, Beijing.”

Want more? The New York Times had an excellent piece out on the weekend about how North Korea has gone from hacking joke to an emerging power that generated about USD 1 bn from cyberattacks and cybercrime last year. That’s about one-third the value of the isolated nation’s total exports. Former New York Times Cairo bureau chief David Kirkpatrick shares the byline on the story. Read: The World Once Laughed at North Korean Cyberpower. No More.

Worth Watching

Motor Trend’s World’s Greatest Drag Race returns with its seventh iteration. This time around, the15,000 foot-long runway sees the new Tesla compete with the likes of Ferrari and McLaren (watch, runtime 8:00).

Diplomacy + Foreign Trade

Investment and International Cooperation Minister Sahar Nasr discussed disbursing the third USD 1 bn tranche of the World Bank’s USD 3 bn loan with senior World Bank officials, including Kristalina Georgieva, CEO of the WBG’s International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Nasr is pushing for the tranche to be disbursed before the end of the year, according to a ministry statement.

Egypt has received an invitation to join the Syrian peace talks in Astana as an observer and “is expected to join the negotiations,” a source told TASS. Egypt’s ambassador to Russia Mohamed Elbadri had said that Cairo was ready to join the talks if invited. The next round of talks is scheduled for late this month.

President Abdel Fattah El Sisi discussed the latest in the Palestinian reconciliation process with Jordan’s King Abdullah II in a phone call yesterday, according to an Ittihadiya statement. The Jordanian leader said his country will continue to support unity efforts between the Palestinian factions.

Foreign Minister Sameh Shoukry signed three MoUS with Slovenian President Borut Pahorand his counterpart Karl Erjavec yesterday, according to official statements from the ministry. The agreements covered consumer protection, cooperation between state news agencies, and sports and youth programs.

Energy

Acciona and Swicorp to build three PV power plants in Benban

Spain’s Acciona Energia and Swicorp of Saudi Arabia will build three solar photovoltaic plants in Egypt, LeAnne Graves writes for The National. The three plants will be built in Benban and produce 50 MW of electricity each at a total investment of USD 180 mn. Graves says the project is expected to be financed through the IFC and the Asian Infrastructure Investment Bank.

BNP Paribas secures EUR 98.5 mn in financing for EETC substation

The Egyptian Electricity Transmission Company (EETC) achieved financial close on the EUR 98.5 mn facility for the Samanoud and Abo El Matamir high-voltage substations. BNP Paribas acted as initial mandated lead arranger and facility agent for the loan, which will finance 85% of the FX portion of the commercial contract between EETC and its consortium of contractors, Elsewedy Electric and Siemens. The loan is payable over 12 years. The transaction marks BNP Paribas’ second consecutive agreement with EETC following the EUR 200 mn loan in 2016 for six substations.

Electricity Ministry and Al Nowais at an impasse over price of electricity from coal plant

The Electricity Ministry and UAE’s Al Nowais have yet to reach an agreement on the price of electricity the ministry plans to buy from the company’s 2,600 MW coal power station in Sinai, Al Mal reports. Talks have reached an impasse over what ministry officials say was Al Nowais’ “high” proposed tariff. The Emirati company had signed a MoU for the project in September 2014, but had reportedly rejected certain clauses in the contract for the project, including ones on arbitration and the government’s financial guarantees. It is unclear whether these issues had been resolved.

Infrastructure

Construction of six platforms in East Port Said Port to be complete by 2018

Six new platforms at the East Port Said Port will be completed by next year, Suez Canal Economic Zone (SCZone) Vice President Abdel Kader Darwish told members of the House Economics Committee yesterday, Al Mal reports.

SCZone, EGPC to launch new company to service ships

The Suez Canal Economic Zone (SCZone) and the Egyptian General Petroleum Corporation (EGPC) are launching a new company to service ships in the East Port Said Port, in cooperation with the Port Said Shipping Chamber and the private sector, Al Borsa reports. President Abdel Fattah El Sisi gave SCZone head Mohab Mamish the green light on the project during a meeting yesterday. A consultancy firm will be contracted to study the project and help determine each party’s shares in the company, according to Port Said Shipping Chamber President Adel Lamei.

Basic Materials + Commodities

Loesche to supply Egyptian Cement with three VRMs

Egyptian Cement contracted Loesche to provide three vertical roller mills for its Sohag plant, Loesche announced. Loesche will deliver a raw material mill with a capacity of 540 t/h of cement raw meal, a cement mill with an output of 350 t/h of clinker as well as a coal mill with an output of 45 t/h. “Chengdu Design & Research Institute (CDI) functions as the general contractor for the project and is owned by the Sinoma Group,” Cement News reports. Loesche had previously secured an agreement to provide the Defense Ministry’s six line cement plant being built in Beni Suef with 18 new vertical roller mills. Egypt’s exports of cement increased by 88% y-o-y in 9M2017 to USD 72 mn, Cement News notes.

Manufacturing

Kabil inaugurates EGP 150 mn expansion of water filtration systems plant

Trade and Industry Minister Tarek Kabil inaugurated the EGP 150 mn expansion of the Aqua Chiara plant in Six October on Tuesday, according to an official ministry statement. The plant produces and assembles water filtration systems.

Real Estate + Housing

Housing Ministry begins setting compensation rates for contractors

The Housing Ministry has begun setting up rates by which it will compensate contractors for losses incurred after the EGP float, sources tell Al Borsa. Contractors will receive compensation between 15-60% of the size of the contracts depending on the project, equipment used and the whether any of the materials had been imported. We had noted back in August that deliveries on social housing projects have been delayed as some contractors halted development following delays in the disbursal of their compensation under the Contractors’ Compensation Act.

NUCA to establish company to manage development of new cities

The New Urban Communities Authority (NUCA) will establish a EGP 10 mn company to manage the development of new cities, said Housing Minister Moustafa Madbouly. He added that the administration and management structure has been set, according to Al Borsa.

Legislation + Policy

Islamic bank executives meet with central bank committee drafting Banking Act to discuss suggestions

Executives from Islamic banks operating in the market met over the last few weeks with the central bank committee drafting the new Banking Act to discuss their input on the bill, sources close to the matter tell Al Borsa. The group proposed an additional six articles to the law that mean to regulate Islamic banking in the country, that cover establishment of an Islamic banking authority in the CBE, the introduction of sukuk, mudarabah, and other sharia-compliant financing tools and options to the industry, as well as the relationship between Islamic financing institutions operating in the market. The CBE had said in September that the amended draft for the act would be ready in a month, after the committee filters through notes and suggestions from the Federation of Egyptian Banks, which had objected to a number of proposed amendments, including those on setting term limits for bank managing directors and suggesting that banks kick in 5% of their bottom lines annually for an industry development fund.

House Transport Committee gives preliminary nod to loans for Alexandria tram project, GE agreement

The House Transport Committee gave preliminary approval yesterday to a EUR 100 mn loan from the French Development Agency for the EUR 360 mn Alexandria tram project, as well as the Egyptian National Railways’ (ENR) EUR 290 mn loan from the European Bank for Reconstruction for the purchase of 100 new locomotives. The committee is scheduled to meet with government representatives next month to further discuss the agreements, Ahram Gate reports.

House Manpower Committee to discuss Social Welfare Act despite not receiving it from gov’t

The House Manpower Committee will press ahead with its discussion on the Social Welfare Act whether or not they receive it from Cabinet, deputy chair Mohamed Wahab Allah said yesterday, Al Shorouk reports. Wahab Allah says his committee has been waiting for the law for over a year.

National Security

Cairo governor asks district chiefs to install cameras in public buildings

Cairo Governor Atef Abdel Hamid asked district heads to enforce a decision that makes it mandatory for public buildings and facilities to install surveillance cameras, according to AMAY. That includes schools, churches, mosques, and government buildings.

On Your Way Out

ON THIS DAY- On this day in 1801, forces of the French Campaign in Egypt, led at the time by Jacques-François Menou, was permitted to evacuate after being defeated by British forces. In 1967, the Soviet Union announced it had successfully sent a space probe, the Venera 4, into the atmosphere of the planet Venus for the first time. 100 years earlier, in 1867, the US took possession of Alaska after purchasing it from Russia for USD 7.2 mn. The Communist leader of East Germany, Erich Honecker, was forced to step down on this day in 1989. Former Prime Minister of Canada Pierre Trudeau and tennis legend Martina Navratilova were born on this day in 1919 and 1956, respectively. Thomas Edison died on this day in 1931. Two years ago, Enterprise readers got a reminder that polls opened for the first round of voting for the parliamentary elections and we were also taking note of former CBE Governor Hisham Ramez exclaiming that “we are not facing a foreign exchange crisis, but rather a challenge.” This time last year we were noting Egypt’s failure to secure the USD 6 bn in third party-funding the IMF wanted in place before approving its funding package.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.5965 | Sell 17.6965
EGP / USD at CIB: Buy 17.58 | Sell 17.68
EGP / USD at NBE: Buy 17.60 | Sell 17.70

EGX30 (Tuesday): 13,525 (0.00%)
Turnover: EGP 1.2 bn (30% above the 90-day average)
EGX 30 year-to-date: +9.6%

THE MARKET ON TUESDAY: The EGX30 closed Tuesday’s session flat. CIB, the index heaviest constituent ended down 1.3%. EGX30’s top performing constituents were: Palm Hills up 5.3%, Egyptian Iron and Steel up 4.7%, and SODIC up 4.4%. Yesterday’s worst performing stocks were: Domty down 2.4%, AMOC down 1.9%, and Orascom Telecom Media and Technology down 1.4%. The market turnover was EGP 1.2 bn, and foreign investors were the sole net sellers.

Foreigners: Net Short | EGP -49.2 mn
Regional: Net Long | EGP +0.6 mn
Domestic: Net Long | EGP +48.6 mn

Retail: 75.6% of total trades | 76.4% of buyers | 74.7% of sellers
Institutions: 24.4% of total trades | 23.6% of buyers | 25.3% of sellers

Foreign: 11.6% of total | 9.5% of buyers | 13.6% of sellers
Regional: 7.7% of total | 7.8% of buyers | 7.7% of sellers
Domestic: 80.7% of total | 82.7% of buyers | 78.7% of sellers


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PHAROS VIEW

Further Improvement in the EMPI in 3Q2017: Pharos Holding’s Exchange Market Pressure Index (EMPI), which measures foreign currency market pressure resulting from the economy’s fundamentals and speculative attacks, showed continued improvement for the second consecutive quarter. This improvement was reflected in net FX reserves which rose to USD 36.5 bn by the end of 3Q2017 from USD 28.5 bn in 1Q2017; nominal interest rate gap falling; and an appreciation of the exchange rate to EGP 17.70 to the greenback in 3Q2017 from EGP 18.20 in 1Q2017. Pharos sees EMPI improving further on the back of an improvement in Egypt’s Balance of Payments. You can read the full report here.

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WTI: USD 52.00 (+0.23%)
Brent: USD 57.88 (+0.10%)
Natural Gas (Nymex, futures prices) USD 2.93 MMBtu, (-0.98%, November 2017 contract)
Gold: USD 1,287.50 / troy ounce (+0.10%)TASI: 6,992.30 (+0.22%) (YTD: -3.03%)
ADX: 4,488.72 (-0.77%) (YTD: -1.27%)
DFM: 3,643.37 (-0.39%) (YTD: +3.19%)
KSE Weighted Index: 432.27 (+0.06%) (YTD: +13.73%)
QE: 8,229.27 (-0.85%) (YTD: -21.15%)
MSM: 5,088.71 (-0.13%) (YTD: -12.00%)
BB: 1,282.73 (+0.35%) (YTD: +5.10%)

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Calendar

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.

21 October (Saturday): The African Leadership Academy will hold its “Beyond Education” seminar on university readiness and the future of leadership in Africa, at the Dusit Thani, Lakeview, New Cairo and the Hilton Pyramids Golf, 6 October City.

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.

06-09 November (Monday-Thursday): EFG Hermes’ 7th Annual London Conference on 6-9 November, Arsenal’s Emirates Stadium.

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.

01-03 December (Friday-Sunday): RiseUp Summit, Downtown Cairo.

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.

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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