Sunday, 3 December 2017

Foreign portfolio investors face a 1% entrance fee if they want to use the CBE’s parallel repatriation mechanism

TL;DR

What We’re Tracking Today

Welcome to December, ladies and gentlemen. If anyone can tell us where the year went, we’d gratefully hear from you.

Trade and Industry Minister Tarek Kabil will testify before the House of Representative’s Industry Committee today on the ministry’s plans to grow non-oil exports, ease licensing for industry, and attract manufacturers to the new administrative capital. Committee members intend to ask Kabil about the government’s bailout strategy for idle factories, which they say has not been moving as fast as originally anticipated.

Also at the House on this very busy week: The House Economics Committee will resume debate today on the Consumer Protection Bill, Ahram Gate reports. Meanwhile, the health, constitutional, and legislative committees will discuss today a bill on medical liability. The constitutional and legislative committees will also be meeting with the religious affairs committee to discuss a proposed law to regulate the religious discourse in mosques. Elsewhere, the defense and national security committee will look into a petition to discuss issuing licenses for tuk-tuks.

Egypt is expected to launch its first electronic visa at the Cairo ICT expo, which kicks off today.

We have a packed issue this morning, so we have just a handful of things for you that are making the rounds of the interwebs:

The US Senate has approved the most sweeping overhaul of America’s tax code since the 1980s. The House and Senate must now reconcile their respective bills. The expectation is for a corporate tax rate of c. 20% from 35% at present — and for plenty of wrangling about tangential and unrelated items salted into the bills to get them passed.

Also in America: US President Donald Trump is reportedly looking to replace Secretary of State Rex Tillerson with his CIA director, Mike Pompeo, according to a New York Times story that got wide pickup over the weekend. Trump later tweeted that the report amount to “fake news.”

Xavier Rolet has stepped down as CEO of the London Stock Exchange effective immediately, according to Reuters. The LSE’s board would say only that Rolet’s “operating style” was a factor in his exit, Business Insider notes, but won’t provide details, sparking hand-wringing in the City.

Bad news for our subsidy budget: OPEC and other major oil producers decided on Thursday to extend output cuts through the end of 2018. CNBC and the Wall Street Journal have more.

Three execs at global cement giant LafargeHolcim (two of whom have since left the company) are under investigation in France for allegedly helping finance terrorism in Syria by making payments to local armed groups to keep a plant operating. OC and OCI’s Nassef Sawiris is the third-largest shareholder of Lafarge; no allegations have been made against any board members.

Rowing across the Atlantic — One giant leap for Egyptian adventurism: Not content with being the first Egyptian to climb Mount Everest, Egyptian adventurer and entrepreneur Omar Samra teams up with triathlete Omar Nour to row a 7.5m long two-seater boat across the Atlantic Ocean. The pair will be competing with other teams on the 5,000 km race and battling 15 m high waves in winter conditions, storms, sleep deprivation and being in total darkness and isolation. We wish them both safe travels on the race, which kicks off on 12 December. You can catch the race’s promo here (watch, runtime: 1:51). Stay tuned — we’ll have updates from the gentlemen while on the high seas.

What We’re Tracking This Week

It’s PMI week: The Emirates NBD / Markit purchasing managers’ index for Egypt, the UAE and Saudi Arabia will be out on Tuesday at about 6:15am.

Our friends at AmCham are hosting a conference tomorrow on the private sector and sustainable development. Keynote speakers include Investment Minister Sahar Nasr and Planning Minister Hala El Said. You can view the agenda here or tap here to register.

The Investment Ministry will unveil its map of some 600 projects at the unfortunately named Business for Africa and the World Forum in Sharm El Sheikh on 7-9 December. Some 1,500 national and regional business figures and politicians are expected to attend. Youm7 has the rundown on who’s who.

On The Horizon

The Zohr gasfield will ramp up to 350 mcf/d when production starts sometime this month, the Oil Ministry said on Friday, according to Reuters. Production would gradually be raised to around 1 bcf/d by mid-2018, the ministry added. Prime Minister Sherif Ismail had previously said Zohr’s production this year would reach 500 mcf/d.

Ethiopian Prime Minister Hailemariam Desalegn is expected to visit Egypt and deliver a speech at the House of Representatives this month. Egypt and Ethiopia are locked in a war of words over use of Nile water.

Enterprise+: Last Night’s Talk Shows

Former prime minister Ahmed Shafik’s unexpected return to the political scene — and Egypt — did not earn as much airtime as we thought it would.

Kol Youm’s Amr Adib — who has been a highly vocal advocate of a pluralistic presidential election — monitored Shafik’s arrival at Cairo International Airport, where a rather thin crowd of supporters was waiting (watch, runtime: 2:20).

Emirati writer and political analyst Khalid Al Qassimi told Adib that Shafik was not banned from travel, but that his decision to make that claim via network-non-grata Al Jazeera was a “betrayal” and a rejection of the UAE’s hospitality (watch, runtime: 4:38). Emirati political science professor Abdel Khalek Abdullah also confirmed Shafik’s freedom of movement and criticized his decision to get political while still on UAE soil (watch, runtime: 4:21).

On Hona Al Asema, Lamees reminded viewers that Shafik’s name was removed from the airport’s watchlist in November 2016 and that he was acquitted of all legal charges brought against him, pointing out that he could have returned at any point this year (watch, runtime: 11:43).

She then spoke to Suez Canal Economic Zone deputy head Abdel Kader Darwish about the five-member shipping line alliance agreeing to resume operations in East Port Said Port, which it had suspended earlier this year to protest fee hikes. The SCZone decided in August to slash fees by as much as 50% to lure back the alliance, Darwish said (watch, runtime: 4:36).

Over on Mehwar TV’s 90 Minutes, Cairo Metro Company spokesperson Ahmed Abdelhady Bekir confirmed what has been said a thousand times, that Cairo Metro ticket prices will rise as soon as Line 4 is inaugurated. Ticket prices will rise with distance traveled.

Over on Masaa DMC, Eman El Hosary spoke to Gharbia Governor Ahmed Sakr about the reopening of Tanta’s St. George Coptic Church — which was bombed in April — after the military completed its restoration (watch, runtime: 3:48).

Speed Round

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CBE sets 1% entrance fee on foreign currency portfolio investments through repatriation mechanism: The Central Bank of Egypt announced that a 1% “entrance fee” will be put in place for fresh foreign currency portfolio investments that enter via the repatriation mechanism starting from today. “The application of the entrance fee comes one year post the liberalization of the foreign exchange regime, at a time when the market has gained depth and momentum,” the CBE said in a statement on Wednesday (pdf). The CBE will retain the 0.5% exit fee on the repatriation system.

Balances held prior to today (3 December) will not be affected. The central bank’s statement (linked above) explains in detail the entry and exit procedures.

Is the CBE looking to phase out the foreign repatriation mechanism? BNP Paribas’ Youssef Bishai tells Al Borsa that the move is meant to drive FCY portfolio investment from foreign investors over to the interbank system and discourage the use of the foreign repatriation mechanism. Beltone analyst Aliaa Mamdouh says the ultimate goal is to phase out restrictions on repatriating profits that had been put in place during the heights of the FX crunch. The move could also mean that the CBE is bringing its repatriation policy in line with the IMF, which in one of its few criticisms of the CBE, called for repatriation restrictions to be removed. As FX reserves continue to rise to their pre-2011 levels, the CBE has been phasing out FX restrictions. Most recently, the CBE lifted all previously-imposed restrictions on USD deposits and withdrawals for importers of non-essential goods last week.

Meanwhile, the CBE announced on Wednesday that Egypt’s M2 money supply was up 40.48% y-o-y in October from a year earlier to EGP 3.09 tn (USD 173.91 bn), Reuters reports.

Subsidy cuts in the air for mid-2018 as Finance Ministry prepares to draw up its FY2018-19 budget: The Finance Ministry released its general guidelines (pdf) to government ministries for drafting the FY2018-19 budget last week. The ministry is targeting GDP growth of 5.5% for the fiscal year and will look to cut the budget deficit to 8.5% of GDP, down from 9.5% projected in FY2017-18. The budget is also targeting reducing public debt to 94% of GDP, and cutting unemployment to 10-11%.

These targets would be achieved by staying the course on reform measures, including through continued subsidy reforms, efficient management of the tax system, and reforming the welfare and pensions system.

The ministry hints at further subsidy cuts to come next fiscal year: The ministry strongly implied that energy subsidy reform will be cut again during FY2018-19. Both Finance Minister Amr El Garhy and Oil Minister Tarek El Molla had said that it would be unlikely that the government will begin another round of subsidy cuts this fiscal year. El Garhy then later stated that it would review the status on subsidy cuts as rising crude energy prices threaten to add pressure to the budget deficit.

Finance Ministry confirms VAT on non-core services offered by banks: The Finance Ministry has reportedly ended the long-standing debate on whether non-core services offered by banks would be taxed under the value-added tax (VAT) act, Al Mal reports. The ministry apparently said in an internal memo signed by Finance Minister Amr El Garhy that these services, which include fees on safety deposit boxes and trustee services, would be subject to the VAT, but that all core banking services would be VAT-exempt. Banks had lobbied last year for these services to be exempt from the VAT.

There are calls in the House of Representatives for a EGP 500,000 licensing fee for factories in all industries to help fund the Universal Healthcare Act, sources in parliament tell Al Borsa. The EGP 600 bn healthcare plan is already set to be partially funded through licensing fees on the healthcare sector running between EGP 10,000 and EGP 500,000, in addition to tithes on the sale of construction materials. Hearings tomorrow: The House of Representatives’ health and budget committees will hold special hearings on financing the Universal Healthcare Act with Finance Minister Amr El Garhy and Health Minister Ahmed Rady on Monday.

Separately, the House Health Committee has amended the procedures of establishing new pharmacies outlined in the Act, committee deputy head Ayman Aboulela said, Al Mal reports. According to Aboulela, the amended article now puts in place a mechanism for new state-owned pharmacies to contract existing private pharmacies.

IPO WATCH- Ibnsina Pharma launches today its offering to retail investors as part of its IPO of up to 40% of its total shares. Shares in the IPO are split between institutional investors (85% of the offering) and individual investors (15% of the offering). The retail offering continues until Thursday, 7 December. Book-building for the offering will be completed by Tuesday, 5 December, at which time the final price will be set. The company is guiding on pricing at EGP 5.21-5.95 per share. Trading is expected to start on Monday, 11 December. The institutional offering on the IPO has already garnered interest from some 150 financial institutions following a roadshow in Europe, Africa and the GCC, said Mustafa Abdul Aziz, head of brokerage at Beltone Financial, the sole global coordinator and bookrunner on the transaction. He tells Al Borsa that the investment bank completed the roadshow with its final stop in London, following successful meetings in Saudi Arabia, the UAE, Germany, and South Africa among other places. Matouk Bassiouny is acting as counsel to the issuer. Inktank Financial is investor relations advisor.

EFG Hermes topped the EGX’s brokerage league table for November with a 24.8% market share, according to figures released by the Egyptian Exchange. CI Capital placed second with a market share of 6.7%, followed by Pharos Holding (5.3%), Beltone Financial (4.6%), and Pioneers Holdings (4.4%).

On a YTD basis, the rankings run EFG Hermes (23.2%), CI Capital (8.4%), Al Rowad (4.5%), Pharos (4.5%) and Beltone Financial (4.5%).

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COME WORK WITH US: We’re looking for bright, talented analysts and writers to join our team at both Enterprise and at Inktank Financial, our parent company. Enterprise staff work on the product you’re reading right now, while Inktank analysts work provide investor relations, C-suite support and financial communications and marketing advisory to leading companies in Egypt, the UAE and Bahrain.

You’re likely an equities / macro / research analyst, IR professional or journalist, but we’re less interested in your formal education than we are in amazing storytelling skills, intellectual curiosity, fluency with numbers and passion for business / finance / economics / politics. Bilingual candidates preferred (English-Arabic). A sense of humor is a must, as is healthy skepticism. We prefer Egyptian nationals, but can sponsor work permits for particularly talented foreign applicants. Want to get the conversation started? Send a great cover letter and an updated CV to patrick@inktankcommunications.com. Emails and cover letters opening with “Dears” will be summarily deleted.
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Naguib Sawiris plans to launch a new investment vehicle to acquire gold mining assets across the world, the Financial Times reports. The new company will fall under Sawiris’ La Mancha Group, which holds majority stakes in Canadian mining firm Endeavor and Australia’s Evolution Mining. The move comes as listed gold miners have underperformed the gold price this decade, leading to calls from investors for new management and better allocation of capital, the salmon-colored paper said.

In other news from the Sawiris Batcave, the bn’aire also had harsh words to say about Saudi Arabian Crown Prince Mohammed bin Salman’s ongoing anti-corruption drive. On Friday, Sawiris denounced the probe, saying the purge had undermined the rule of law in the Kingdom and would deter investment, Reuters reports. He reserved his most scathing remarks for MBS, whom he referred to as “this young man” and called on influential figures to stand up to the Crown Prince. “I know I am done-for in Saudi Arabia. No more business (there). Ok, I don’t care,” Sawiris said.

Sawiris’ statements come as Talaat Moustafa Group once again disavowed any relationship with arrested Prince Alwaleed Bin Talal’s Kingdom Holdings over Four Seasons developments. A source from TMG told Al Masry Al Youm that the Kingdom Holdings had merely explored a potential partnership between both countries over Four Seasons expansions in Sharm El Sheikh.

INVESTMENT WATCH- Spain’s Mediterranean Capital Partners is eyeing SME opportunities in Egypt for its EUR 103 mn regional private equity fund MC3, founder Albert Alsina said yesterday, AMAY reports. The firm likes education, healthcare, retail, telecoms, and transport, Alsina said.

LEGISLATION WATCH- Maglis Al Dawla to begin reviewing basket of legislation, including Ride-hailing Apps Act: The Council of State (Maglis Al Dawla) has received seven pieces of economic legislation to review before they’re put to a vote by the House of Representatives, Al Borsa reports. Those include the Ride-hailing Apps Act, which regulates the work of companies such as Uber and Careem, by imposing licensing fees and procedures, as well as amendments to the Civil Aviation Law, which the Council expects to finish revising before the end of December. The Council will also be reviewing a number contracts for energy and oil projects, according to the head of the Council’s legislative committee Mohanad Abbas. He added that the Council had sent the amended Railway Act — which would allow the private sector to participate in the development, management, and operation of the railway sector — back to the Ismail Cabinet last week to be referred to the House for debate.

Ahmed Shafik declares presidential run: Like the drawn out sequels of bad 1980s movies, Mubarak-era Civil Aviation Minister and 2012 presidential candidate Ahmed Shafik announced from exile in the UAE his intention to run for president again in early 2018 on Wednesday, Reuters reports. He becomes the second candidate to throw his hat in the ring after human rights lawyer Khaled Ali. President Abdel Fattah El Sisi is widely expected to run in 2018, but has said he will only make an announcement after his state of the nation address.

Rocky start to Shafik campaign has us going “eeh?”: The announcement was followed by a confusing statement Shafik made on Al Jazeera on Friday that the UAE had prevented his travel outside the country. “I was surprised that I was prevented from leaving the UAE for reasons I do not understand,” Shafik said, adding that he thanked the UAE for its hospitality but wished to depart. UAE Minister of State for Foreign Affairs Anwar Gargash denied on his official Twitter account that any restrictions had been placed to his travel, saying the UAE hosted him despite “strong reservations about some of his positions.”

UAE arrest and deportation back to Egypt? Emirati authorities “came and took” Shafik from his home in Abu Dhabi and deported him back to Egypt on a private plane, Shafik’s daughter tells Reuters. Shafik is said to have landed in Cairo at around 8 pm last night “amid tightened security,” the Associated Press reports. Dina Adly, a lawyer representing Shafik, claimed in a Facebook post earlier on Saturday that he had been arrested by UAE authorities and deported back to Egypt. The story is getting plenty of coverage in the international press, including from the NYT’s David Kirkpatrick and Nour Youssef.

An Ikhwan side-show: The Ikhwan “naturally” support Shafik’s candidacy as a military man who can challenge President Abdel Fattah El Sisi, Al Wasat party member Mohamed El Deeb says, Ahram Gate reports. A former Ikhwan MP also says the Ikhwan are rallying behind Shafik as the “only scenario to end the current miserable scenario.” The statements naturally gave rise to rumors that the former prime minister has formed a secret alliance with the outlawed Ikhwan, which reportedly led to several resignations from within his political party, Youm7 reports.

Russia and Egypt have signed an agreement allowing each to use the other’s airspace and air bases for warplanes planes under a five-year agreement, Reuters notes. Signing of the agreement was authorized last month by Russian Prime Minister Dmitry Medvedev and was signed following a meeting in Cairo last Wednesday between Russian Defence Minister Sergei Shoigu and President Abdel Fattah El Sisi, who met ostensibly to talk cooperation on combatting terrorism. US officials had said back in March that Russian special forces had been using Egyptian air bases to launch operations in Libya.

Still nothing on restoring flights: Foreign Minister Sameh Shoukry sat down with Russian Foreign Minister Sergey Lavrov last week to discuss, among other things, restoring flights between both countries which have been suspended for a little over two years now since the downing of a Russian airliner over Sinai. No real updates emerged beyond the usual statements of working further to bring those flights back as soon as possible, according to a statement from the foreign ministry.

The international press is positioning the agreement as a “snub to the Trump administration.” The revelation came just as US Defense Secretary James Mattis was in town yesterday for talks with President Abdel Fattah El Sisi in Cairo yesterday. Counterterrorism was the focal point of the meeting, which saw Mattis reaffirm the US’ commitment to supporting Egypt — a strategic ally for the US — in its fight against terrorist forces, according to a readout from Ittihadiya. Mattis’ visit comes amid speculation the US may lift its freeze on USD 290 mn worth of aid to Egypt. Mattis’ visit to Cairo is the first stop in a five-day Middle East tour,, according to the Pentagon.

El Sisi orders Armed Forces to defeat the insurgency in North Sinai in three months: President Abdel Fattah El Sisi said he ordered the Armed Forces to “restore order and stability” in Sinai in the next three months at a speech during the Prophet Mohamed’s birthday celebrations held by the Endowments Ministry. His speech came nearly a week after terrorists attacked civilians during Friday prayers at Al Rawda mosque on the outskirts of Al Arish in North Sinai.

MOVES- Misr Insurance Holding Company has tapped Hussein Atallah as its new chairman, Al Borsa reports. Atallah succeeds Adel Moussa, whose term as chairman legally expires at the end of this month. The company also appointed Fatheya Shetewy as the new chairperson of Misr Real Estate Management, succeeding Mohamed Hassan Hanafy.

MOVES- Nour-Eldin Zaki was appointed as the new managing director of Intel for Egypt and the Levant region, succeeding Sameh El Mallah, Al Mal reports. Zaki was previously director of consumer sales and Africa lead at Intel.

Egypt lands in the group of its dreams at the 2018 FIFA World Cup draw: Egypt’s World Cup luck continued after the announcement that we will be part of Group A, in what the local media is calling the best possible outcome for the Russia 2018 World Cup draw. Egypt starts its first World Cup showing in 27 years with less adept teams from Saudi Arabia and Uruguay (one of the more manageable teams from Latin America). The group’s heavy hitters are hosts Russia. Egypt will play its first match with Uruguay on 15 June, then Russia on 19 June and Saudi on 25 June. Reuters has the full lineup of matches announced so far here and so does King Fut.

Could Mo Salah be heading to Real Madrid? The group draw coincided with some promising transfer news for the Pharaohs squad as we approach the mid-season transfer window. Most prominent of these is that Real Madrid may be looking to snatch Mohamed Salah from Liverpool, Football 365 reports. “I’ve received confirmed news revealing Real Madrid’s interest in Salah, but let’s not rush things,” Egypt’s national team manager Hector Cuper told ON Sport TV. “To me, he is in an amazing position right now.” The reports come as Egypt center-back and the West Bromwich Albion loaner Ahmed Hegazi is being targeted by Premier League clubs Liverpool and Leicester City, sources revealed to ESPN FC Tuesday.

Egypt in the News

The sideshow that is Ahmed Shafik leads coverage of Egypt in the international press on an otherwise mixed news day that includes talk of US Secretary of Defense Jim Mattis’ visit to Cairo, continued discussion of the Al-Rawda massacre in Sinai a week ago and our alleged war on [redacted]. Elsewhere this morning:

Dependence on Russian wheat may not be in Egypt’s best interest: “Egypt needs to start thinking with more than its wallet when it comes to buying wheat,” according to a piece by Agrimoney. While sourcing most of its wheat imports from Russia may have helped the country following the float of the EGP, reliance on Russian wheat in the long run may not prove to be smart. Why? Look no further than Putin’s whims and propensity to conflate issues. “As Moscow’s (now resolved) spat with Ankara shows, after Turkey two years ago shot down a Russian jet, being a large agricultural client of Russia is no guarantee against the country imposing trade barriers.”

John Kerry claims Egypt, Saudi Arabia and Israel tried to get the US to bomb Iran: leaders of Israel, Saudi Arabia and Egypt all pressured the US to bomb Iran long before the start of negotiations on the 2015 nuclear deal, former US secretary of state John Kerry said at a forum on nuclear arms at Washington National Cathedral, RT reports.

On Deadline

Columnists were collectively shaking their heads at former prime minister Ahmed Shafik’s presidential nomination announcement, which Al Masry Al Youm’s Hamdy Rizk said is detrimental to Egypt. A Tunisian writer described Shafik claiming he was a prisoner in Abu Dhabi as a betrayal of Egypt and the UAE. Hamdy Kassem calls for everyone to put their personal feelings about Shafik and his campaign aside and only judge him (and other candidates) based on his presidential platform. Meanwhile, El Watan’s Mahmoud Khalil says the Shafik saga highlighted the large portion of Egyptians who have grown politically apathetic again.

Diplomacy + Foreign Trade

Egypt and Cyprus reach preliminary agreement on natural gas pipeline: Egypt and Cyprus have reportedly reached a preliminary agreement on extending a natural gas pipeline connecting Cypriot fields with liquefaction plant in Egypt’s Idku, a top Oil Ministry official tells Daily News Egypt. The pipeline, which will take about two years to construct, will pump around 700 mcf per year, part of which will be used for local consumption, while the rest will be exported, the official said. Talks have not yet extended to costs, he also pointed out. Discussions about the connecting pipeline began during President Abdel Fattah El Sisi’s visit to Nicosia last month, where he met with Cypriot counterpart Nicos Anastasiades. El Sisi had said that east Mediterranean gas reserves “can contribute to the European continent’s search for alternative energy sources.”

Fatah and Hamas have asked Egypt to extend the timetable for handing over control of the Rafah border crossing to the Palestinian Authority by 10 days to have time to “complete the arrangements to successfully conclude reconciliation steps to which the Palestinian people aspire,” Reuters reports.

This comes as the White House considers a proposal to relocate the US Embassy from Tel Aviv and recognize Jerusalem as Israel’s capital, the Wall Street Journal reports.

Egypt makes headway in redeveloping regional countries hit by crises: Egyptian companies aiding the redevelopment of regional countries trying to recover from war — a key foreign policy initiative set to take off next year — have made some headway over the past week. Egypt’s oil and gas sector is ready to contribute to redeveloping Libya’s energy sector, Oil Minister Tarek El Molla said during a meeting with the Chairman of Libya’s National Oil Corporation Mustafa Sanallah on Tuesday, the Libya Observer reports. The pair also discussed developing joint projects for storage, trading and distribution of petroleum products.

El Molla’s statements come as Egyptian companies are expected to sign several agreements for development projects in Libya next February, AMAY says. The agreements will be inked during an expo for Egyptian projects and products in Libya, where talks on exporting products to Libya through Egypt’s western border are set to continue. Pharma products in particular are in low supply in Libya, and Egyptian products could fill the gap, said Libyan-Egyptian Economic Chamber head Hany Soufrakis.

Meanwhile, Egyptian companies have negotiated agreements worth USD 16 mn with Iraqi companies at the Baghdad International Fair in sectors including electrical appliances, furniture, food industries, garments, Trade and Industry Minister Tarek Kabil said on Saturday.

Energy

Spanish and Chinese firms compete over Kom Ombo solar power plant contract

Spain’s TSK Group and China’s Nari Solar Energy Technology are competing over the contract for the development of a 26 MW solar power plant in Kom Ombo in Upper Egypt, sources tell Daily News Egypt. The two companies have already submitted letters of guarantee worth EUR 500k each, while three others that had qualified for the tender — Shanghai Electric, Sterling And Wilson, and TBEA — failed to submit their paperwork in time, the sources add. Work on the project should begin in 1Q2018, the sources add.

Electricity Ministry remains undecided on location of ACWA Power’s 2.25 GW power plant

The Electricity Ministry has yet to decide whether to build ACWA Power’s 2.25 GW Dairut power plant in Luxor or Qena, Al Mal reports. The ministry had reached an agreement with ACWA for the plant back in May, with plans to build it in Luxor instead of the original Dairut. Talks are ongoing with the Oil Ministry to determine which of the two locations would be closest to the national gas network and the easiest to extend gas pipelines to. Qena seems to have an upper hand due to its proximity to the Safaga Port, which grants it easy access to imported gas, sources tell the newspaper.

EGEMAC to build four power transformer stations for EGP 900 mn

EGEMAC will construct four power transformer stations at a total cost of EGP 900 mn, EGEMAC President Medhat Ramadan tells Al Borsa. The company reached an agreement with the New Urban Communities Authority to construct two stations worth a combined EGP 300 mn in New Cairo, and will ink the final contract for the project once it is officially awarded the tender. EGEMAC also won a separate tender for two EGP 600 mn stations in Sadat City, which it expects to complete by next year.

Schneider Electric completes 5 MW solar power plant in South Sinai

Schneider Electric has connected its 5 MW solar power plant in South Sinai to the national grid after completing construction in November, Schneider’s Regional Cluster Head of North East Africa and Levant countries Walid Sheta said, Al Masry Al Youm reports.

Infrastructure

Transport Ministry launches int’l tender for 6 October dry port

The Transport Ministry launched an international tender for the 6 October dry port project last week at a special workshop promoting the project hosted by the EBRD in London. Also up in a public-private partnership tender is a second container terminal at the Damietta Port, which the port authority is looking to have the EBRD finance, according to port chief Ayman Saleh. Egyptian officials on a roadshow last week met with representatives from at least 30 companies, including the Maersk family’s AP Moller Capital, to discuss opportunities including the second phase of Cairo Metro’s fourth line, Al Mal reports.

Health + Education

Alleged penicillin shortages revives push for raising med prices

Penicillin prices have reportedly skyrocketed to EGP 250 on the black market, from an original EGP 7 for local products and EGP 9 for imports, due to a severe shortage in supply, head of the Egyptian Center for the Right to Medicine Mahmoud Fouad tells Al Shorouk.
Health Ministry spokesperson Khaled Megahed refuted these reports, saying that the ministry has been supplying the market and recently signed for another shipment of 1 mn units. The alleged shortage has revived pharma companies’ push to raise med prices, which Sun Pharma’s General Manager Hany Mashaal said is necessary to offset companies’ losses on several products. Mashaal’s statement comes after the Federation of Egyptian Industries’ (FEI) pharma division took to the House of Representatives last week to make their case that the pharma industry is going through a “tough time” because med prices have been stable since January in a high-inflation environment.

Real Estate + Housing

Talaat Moustafa expects sales in 2017 to reach EGP 13 bn

Talaat Moustafa Group expects sales in FY2017 to reach EGP 13 bn, the company said in a bourse filing on Thursday. The company also expects to reach new record sales in 2018.

Tourism

EgyptAir, Royal Air Maroc sign code sharing agreement

EgyptAir and Royal Air Maroc signed a code sharing agreement that will see the airlines offer 12 weekly flights between Cairo and Casablanca, Arabian Aerospace reports. The agreement came into effect yesterday.

Telecoms + ICT

Orange Egypt’s fixed line services to launch in early 2018

Orange Egypt expects to begin offering fixed line services early next year, CEO Jean-Marc Harion said yesterday, Al Masry Al Youm reports. The company is still in talks with state-owned monopoly Telecom Egypt to use its landline infrastructure, according to Harion.

Automotive + Transportation

Auto sales drop 37% y-o-y in 10M2017

Auto sales declined 37% y-o-y in 10M2017 to 108.7k vehicles from 173.5k last year, according to an Automotive Information Council (AMIC) report picked up by Al Mal. Passenger car sales dropped 36% y-o-y to 79k units from 124.2k last year, with locally assembled and imported passenger cars dropping 27.8% and 42.8%, respectively. Bus sales also dipped 42% y-o-y to 10,814 units. The y-o-y decline in truck sales reached 38% to 18,924 units.

Banking + Finance

Another delay in launch of Acumen-BPE’s real estate fund

Acumen-BPE Partners will begin marketing the Housing and Development Bank’s EGP 1 bn real estate fund in early 2018, after it receives approval from the Financial Regulatory Authority (FRA) in the first half of December, Chairman Hany Tawfik said yesterday, Al Masry Al Youm reports. In related news, Acumen Asset Management is planning to launch a EGP 200 mn equity fund in the first half of 2018, according to Chairman Rana El Adawi.

Other Business News of Note

Mintra, Souq team up to set up two logistics centers

Mintra Group is teaming up with regional e-commerce platform Souq.com to establish two logistical centers with initial investments of EGP 1 bn, Mintra CEO Hany Cassis tells Al Masry Al Youm. The centers will be constructed in 6 October and 10 Ramadan cities and are scheduled for completion by end-2018. Under the agreement, Mintra will manufacture products, mostly home and office supplies, while Souq handles their online marketing.

Egypt Politics + Economics

Egypt to keep customs exchange rate at EGP 16 in December

The Finance Ministry will keep its customs exchange rate steady at EGP 16 per USD 1 for December, the ministry said in a statement on Wednesday. “The decision is consistent with the currency price stabilisation in the past period,” the statement said.

Lawyer sentenced to three years in prison for rape, harassment comments

A misdemeanors court sentenced lawyer Nabih Al Wahsh to a three-year prison term and a EGP 20k fine for remarks he made on television advocating [redacted] harassment, Al Shorouk reports. Al Wahsh has been charged with harming public interest by inciting harassment and rape.

National Security

Egypt receives last three Rafale fighter jets from France

Egypt received its final shipment of Rafale fighter jets from France’s Dassault Aviation with the arrival of the last three aircrafts over the weekend, defenceWeb says. Egypt had signed an EUR 5.2 bn agreement with France in 2015 for 24 Rafale jets, Fremm naval frigate and MBDA air-to-air missiles. We noted last month that Egypt could be weeks away from signing another agreement with France for 12 Rafale jets and two Gowind Corvettes.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6672 | Sell 17.7672
EGP / USD at CIB: Buy 17.66 | Sell 17.76
EGP / USD at NBE: Buy 17.60 | Sell 17.70

EGX30 (Wednesday): 14,582 (+0.3%)
Turnover: EGP 1.7 bn (67% above the 90-day average)
EGX 30 year-to-date: +18.1%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 0.3%. CIB, the index heaviest constituent ended up 1.2%. EGX30’s top performing constituents were ACC up 3.7%, Egyptian Iron & Steel up 3.0%, and Heliopolis Housing up 2.7%. Wednesday’s worst performing stocks were Amer Group down 2.9%, Orascom Telecom Media & Technology down 2.7%, and Palm Hills down 2.1%. The market turnover was EGP 1.7 bn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +179.3 mn
Regional: Net Long | EGP +1.6 mn
Domestic: Net Short | EGP -180.9 mn

Retail: 54.1% of total trades | 53.2% of buyers | 55.0% of sellers
Institutions: 45.9% of total trades | 46.8% of buyers | 45.0% of sellers

Foreign: 25.8% of total | 31.1% of buyers | 20.5% of sellers
Regional: 9.6% of total | 9.6% of buyers | 9.5% of sellers
Domestic: 64.7% of total | 59.3% of buyers | 70.0% of sellers

WTI: USD 58.36 (+1.67%)
Brent: USD 63.73 (+1.76%)
Natural Gas (Nymex, futures prices) USD 3.06 MMBtu, (+1.19%, January 2018 contract)
Gold: USD 1,282.30 / troy ounce (+0.44%)TASI: 7,003.97 (+0.46%) (YTD: -2.86%)
ADX: 4,283.07 (-0.28%) (YTD: -5.79%)
DFM: 3,420.97 (+0.02%) (YTD: -3.11%)
KSE Weighted Index: 398.78 (+0.29%) (YTD: +4.92%)
QE: 7,714.26 (-0.87%) (YTD: -26.09%)
MSM: 5,109.62 (+0.06%) (YTD: -11.64%)
BB: 1,283.71 (+0.59%) (YTD: +5.18%)

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Calendar

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

03-05 December (Sunday-Tuesday): Solar-Tec, Cairo International Exhibition & Convention Center.

03-05 December (Sunday-Tuesday): Electrix, Cairo International Exhibition & Convention Center.

03-06 December (Sunday-Wednesday): The fourth e-payment and Innovative Financial Inclusion Expo & Forum (PAFIX), Egypt Expo Center, New Cairo.

05 December (Tuesday): Egypt’s Emirates NBD PMI reading for November to be announced.

03-06 December (Sunday-Wednesday): 21st Cairo ICT, Cairo International Convention Center, Nasr City, Cairo.

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

19 December (Tuesday): Village Capital’s Financial Health Competition: Middle East and Egypt (applications close 3 November)

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

29-30 January (Monday-Tuesday): Seamless North Africa, The Nile Ritz-Carlton, Cairo

12-14 February 2018 (Monday-Wednesday): Egypt Petroleum Show 2018 (EGYPS), New Cairo Exhibition Center.

19-20 February 2018 (Monday-Tuesday): The Banking Tech North Africa, The Nile Ritz-Carlton, Cairo

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

29 April – 1 March 2018 (Thursday-Sunday): Cityscape Egypt, Cairo International Convention Centre, Cairo

4-6 May 2018 (Friday-Sunday): International Conference on Network Technology (ICNT 2018), VENUE TBD, Cairo

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594). 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. © 2016 Enterprise Ventures LLC.