Wednesday, 6 December 2017

For once, Egypt is an oasis of sanity.

TL;DR

What We’re Tracking Today

It’s a light and generally pleasant December news day for Egypt, which with every passing day is looking saner and calmer than any of our neighbors — near or far. For those of you who, like us, have called this country home both before and after 2011: Feelsgoodman, right? (Apologies to Pepe the Frog and anyone offended by traveling into the darker recesses of our hivemind by tapping the link to learn more.)

From the first positive PMI reading in forever to IPO, M&A and investment news and the House making progress on the divisive (but necessary) Universal Healthcare Act, we have the details in Speed Round, below. But the conversation in Egypt today is more likely than not going to be about the Dumpster fire of a region in which we live:

Will Trump move the US embassy to Jerusalem today? It is now looking like it is all but certain that US President Donald Trump will announce today that he will do away with decades of US foreign policy and approve moving the American embassy in Israel to Jerusalem. The move, a Trump campaign promise popular with his “base,” will effectively recognize the city as the capital of Israel and marginalize any claim by the Palestinians. Trump apparently told Arab leaders on Tuesday that he intends to move the embassy, according to Reuters. Senior US officials have said Trump is likely on Wednesday to recognize Jerusalem as Israel’s capital while delaying relocating the embassy from Tel Aviv for another six months.

Arab leaders oppose the move: In a phone call with Trump yesterday, President Abdel Fattah El Sisi voiced his opposition to the move, saying that Egypt abides by the status for the city laid out in international agreements, according to an Ittihadiya statement. He also warned against adopting any position that would complicate the regional situation. Earlier in the week, the UN General Assembly passed a resolution introduced by Egypt which condemns Israeli settlement activity in East Jerusalem. The warnings of “dangerous repercussions” on regional stability and the peace process were also carried by King Salman of Saudi Arabia, Palestinian President Mahmoud Abbas, and King Abdullah II of Jordan, the latter being particularly sensitive as his dynasty is considered the custodian of the Muslim holy sites in Jerusalem. Arab League Secretary General Ahmed Aboul Gheit said on Tuesday that the US should not take any measures that would alter Jerusalem’s legal and political status.

French President Emmanuel Macron also warned Trump against the move on Sunday, according to the Associated Press.

Not sure what to make of all this? The New York Times and Bloomberg both have you covered with their respective pieces on the history of the Jerusalem conflict.

New Saudi-Emirati alliance to reshape the Gulf? A summit of GCC leaders in Kuwait fizzled yesterday and ended one day early after the UAE and Saudi — two of Egypt’s most stalwart allies on the global stage — said they are launching an economic and military partnership. The UAE and Saudi said they are establishing a “joint cooperation committee” that will coordinate activities in “all military, political, economic, trade and cultural fields.” The announcement, made hours before GCC leaders met for the first time since the Arab Quartet of Saudi, the UAE, Bahrain and Egypt slapped a regional embargo on Qatar, essentially scuppered the two-day GCC summit. Bloomberg notes that that roly-poly Qatari guy who inherited his country was the only head of state to show other than the Kuwaiti host. UAE state news agency WAM made the announcement of the alliance here. The story is getting solid coverage in the Financial Times. Al Arabia and the Guardian also have offerings.

Also in the region yesterday, the Financial Times notes that KSA signed an agreement with Nasdaq “to upgrade the country’s financial markets infrastructure, another step towards its long-term goal of diversifying its economy.” Bloomberg, meanwhile, reports that settlement talks with some 159 people in detention on graft charges are expected to conclude “in weeks.” And the melodrama continued in Lebanon yesterday as Saad Al Hariri officially withdrew his resignation, Reuters notes.

Bahrain, the UAE and Tunisia have made the European Union’s 17-country tax haven blacklist. Also making an appearance on the EU’s first-ever list are Turkey (enjoy it, Erdogan) and Switzerland. Some 47 other countries have been “put on notice.” The EU says all 17 countries fall short of international standards and haven’t offered “sufficient commitments” that they will make changes. No EU countries are on the list, prompting widespread criticism outside the union and from left-leaning outfits including the Guardian. You can read the EU’s announcement here (pdf) (written in High Eurocratese). Otherwise, the story is getting wide international pickup, with offerings from the Wall Street Journal, Financial Times and Reuters worth checking out.

Before you ask: Egypt is not on the list. The banking financial industries have rigorous KYC procedures in place and is fully cooperative in the international fight against money laundering and tax evasion after doing time on the FATF’s black list back in the early 2000s. Just ask anyone who has ever walked into a branch to update their personal information and even remotely looked like they might carry a second passport…

Closer to home: Mubarak-era Dakhliya boss Habib El Adly is back in custody. The former Interior Minister (recently reported by the New York Times to have been advising Saudi Arabia’s Mohammed bin Salman) has been located and apprehended, the Interior Ministry said in a statement picked up by Al Masry Al Youm. The move ends months of speculation on where the fugitive might be after failing to attend a sentencing hearing in April. The court had ordered Adly and two other ministers to pay EGP 1.95 bn in restitution for corruption charges, according to verdict documents obtained by Reuters. Adly is due to appear in court in January for an appeal hearing.

A delegation from the US Transportation Security Administration will wraproutine inspections of Cairo International Airport today, according to Al Mal. The delegation focused on security and customs procedures.

PSA- Look out for a bit of rain in Cairo and Alexandria today, as winter really takes grip and temperatures hover in the 12-14°C range, the national weather service warns. Other forecasts call for overcast skies and highs of 18°C.

Elsewhere today: Russia has been banned from the 2018 Winter Olympics, which take place in February, on the grounds that it has engaged in systematic doping. You can read the IOC’s announcement here.

And finally: Are you looking down the barrel of a long-haul flight? If you’re like most of the folks we know, you’ve watched everything worth watching on your customary airline(s). Rolling Stone has your back with its list of the 20 Best TV Shows of 2017, many of which are downloadable to your iPad before you leave home.

What We’re Tracking This Week

Six African heads of state are expected to be attending the Business for Africa, Egypt and the World Summit, which will kick off on Thursday in Sharm El Sheikh under the auspices of the presidency. The presidents of Guinea, Chad, Rwanda, Côte d’Ivoire, Comoros and Somalia will all be arriving and will be joined by the current chair of the African Union Commission. The conference, part of Egypt’s drive to export to (and re-engage with) Africa, will host a number of leading business figures, including Qalaa Holdings’ Ahmed Heikal.

The third edition of the Cairo Art Fair kicks off on Friday, 8 December at the Arts-Mart Gallery, where over 1,000 artworks from more than 100 well-established and up-and-coming Egyptian artists will be on display, the gallery announced (pdf).

Enterprise+: Last Night’s Talk Shows

Regional politics continued to lead the debate on the airwaves last night, with the Arab world holding its collective breath as it waits for President Donald Trump to make up his mind on the relocation of the US embassy in Israel to Jerusalem from Tel Aviv.

One of the few deviations from the theme came as Yahduth fi Masr’s Sherif Amer chatted with Finance Minister Amr El Garhy on the USD 3-4 bn eurobond sale. The upcoming sale is part of the state’s strategy to tap alternative sources of funding to repay debt, El Garhy told the host, explaining that the Finance Ministry is keen on ensuring that Egypt’s external debt levels remain within what the IMF and int’l rating agencies deem safe. El Garhy also noted that interest rates on USD-denominated bonds have declined between 1.2-1.6% for different tenors.

Separately, the minister said that he’s not guiding on a specific exchange rate, reminding Amer that the EGP will strengthen in tandem with the economy as exports, FDI, remittances, and Suez Canal revenues rise.

Never the one to ignore a media circus, Kol Youm’s Amr Adib spoke to Habib El Adly’s lawyer and wife about the former interior minister’s mysterious emergence from months of hiding. Lawyer Mohamed El Gendy stressed that El Adly had turned himself in and had not been arrested, explaining that his client had been receiving medical treatment for the past 230 days (watch, runtime: 6:42).

The plot thickens: El Adly’s wife, Elham Sharshar, denied El Gendy’s claim that her husband was hospitalized, although he suffers from heart problems. She refused, however, to tell Adib where her husband had been these past few months (watch, runtime: 4:09).

Adib also fixated heavily on the potential relocation of the US embassy in Israel to Jerusalem, which he said would effectively bring all peace negotiations in Palestine to grinding halt (watch, runtime: 3:08). Likening the current situation to the 1967 Six-Day War, he called on the Egyptian administration to hold an emergency Arab summit to collectively denounce Trump’s anticipated decision (watch, runtime: 6:38).

Trump explained to Palestinian President Mahmoud Abbas that he is under pressure from Congress to move the embassy, Palestinian Authority spokesperson Nabil Abu Rudeineh told Adib. Abbas has already held talks with Egypt, Saudi Arabia, France, and Turkey to hold an emergency Arab-Islamic summit on the issue (watch, runtime: 5:45).

Over on Hona Al Asema, UN Special Envoy to Libya Ghassan Salamé told host Lamees Al Hadidi that, as a member of the UN Security Council, Egypt is working with the organization to unite the Libyan army and disarm the various groups in the country. According to Salamé, there are some 23 mn pieces of arms in Libya (watch, runtime: 19:31).

Back on the homefront, a Health Ministry official claimed on Al Ashera Masa’an that thepenicillin shortage citizens have recently been complaining about will effectively end today (watch, runtime: 3:53).

Over on Al Hayah Al Youm, Cairo Metro Company spokesperson Ahmed Abdel Hady told host Tamer Amin the breakdown of a Metro Line 2 train yesterday was a result of malfunctioning brakes (watch, runtime: 5:13). Comforting.

Speed Round

Speed Round is presented in association with

Non-oil private sector returns to growth: November’s PMI reading recorded a rise for the first time in 25 months, registering 50.7, up from October’s reading of 48.4. “Renewed growth of output, new orders and stocks of purchases all contributed to the latest improvement in business conditions. Furthermore, foreign demand for Egyptian-produced goods and services reached a record high. On the price front, rates of both input cost and output price inflation softened, falling below their respective long-run averages.” Anecdotal evidence shows the improvement in new export orders coming from an uptick in demand from neighbouring countries. However, the report also showed that job shedding continued, albeit at a marginally slower pace than that recorded in the preceding survey period. Emirates NBD MENA Economist Daniel Richards says “strong sentiment towards future prospects chimes with our view that the Egyptian economy will continue to strengthen over the coming quarters.” Sentiment towards future growth reached a 27-month high in November.

The Ismail government has begun procedures to issue USD 3-4 bn in USD-denominated eurobonds in January 2018, Finance Minister Amr El Garhy told Reuters on Tuesday. The documents for the issuance were approved earlier this week, El Garhy added. A EUR 1-1.5 bn EUR-denominated issuance will follow later in February or March, El Garhy had said last week.

As for the USD 2 bn disbursement from the IMF, El Garhy said the Fund’s board will meet on the third week of December to approve the payment.

IPO WATCH- Ibnsina Pharma will allocate EGP 280 mn of the proceeds from its EGP 1.56 bn IPO towards a capital increase in 1Q2018 and to cover exits by current shareholders, CEO Mahmoud Abdel Gawad told Reuters in an interview on Tuesday. Ibnsina is planning to invest EGP 700 mn over the next five years to grow its network of national distribution centers to 74 from a current 55. The company is anticipating sales this year will rise to EGP 9.6 bn and is guiding on an EGP 11.8 bn top line for 2018, Abdel Gawad said. Net profits for FY2017 are expected to reach EGP 190 mn. The company announced on Tuesday morning that the institutional component of the sale of 40% of its shares was more than 17x oversubscribed, with interest from more than 500 institutions and HNWIs. Ibnsina will have a market cap of EGP 3.9 bn at the start of trading on Tuesday, 12 December.

M&A WATCH- Arqaam Capital announced closing the sale of a stake in Orchidia Pharma to the Egyptian American Enterprise Fund (EAEF). Arqaam acted as the exclusive sell-side advisor to SPE Capital, formerly Swicorp Private Equity, Orchidia Pharmaceutical Industries, and Dr. Ossama Abbas, the founder, majority shareholder and Chairman of Orchidia and Matouk Bassiouny acted as legal counsel. “The transaction, which closed today following satisfaction of customary closing conditions, consists of a capital increase that will be subscribed to by EAEF and Dr. Ossama Abbas, in addition to EAEF acquiring the stakes owned by SPE Capital and other minority shareholders.” The transaction was first announced in November with EAEF said to acquire 46.5% for EGP 700 mn.

INVESTMENT WATCH- KSA’s Mayar Holding sees “big opportunities” in Egypt: Saudi Arabian elevator and escalator manufacturer Mayar Holding is eyeing investment opportunities in Egypt, said its CEO Abdulmajed Alshaikh. Egypt offers “a very big and promising” investment opportunity, Alshaikh told Zawya on the sidelines of the Big 5 construction exhibit in Dubai. He has been encouraged to expand into Egypt after the country’s decision last year to float its currency as part of a wider economic reform program. Alshaikh did not name any specific investments nor the size of the potential Egypt expansion. He added that Mayar is also looking at Iraq, as the company angles to mitigate the risks of operating exclusively in the GCC.

Elves closes USD 2 mn seed round, Abraaj launches Bakery and more at Riseup: A number of very interesting news came out of the Riseup Summit this year. First off, Egypt’s Elves App, an app that connects people with personal assistants, closed a seed round of more than USD 2 mn, according to Wamda which called it the largest seed round in the region’s history. Investors included Emaar Industries & Investments, the Dubai Angels, the Kauffman Fellows Syndicate and several other venture capital firms from the region and the US.

Abraaj gets into the startup game: EM private equity giant Abraaj announced the launch of Bakery, a growth market early-stage investment platform that provides entrepreneurs with access to Abraaj’s platform of global resources and local support, Forbes Middle East reports.

Separately, education-focused venture capital firm EdVentures launched a fund with publishing firm Nahdat Misr which will focus entirely on education startups and U.S.-based online education provider Udacity will partner with AUC to offer a program on data science and mobile development.

VCs and the EGX? The EGX is considering allowing venture capital funds to list shares and trade them on the bourse, EGX boss Mohamed Farid said on Tuesday. The move aims to help SMEs improve access to funding, Farid added, according to Al Mal.

LEGISLATION WATCH- House Health Committee approves Universal Healthcare Act: The House of Representatives’ Health Committee signed off on the Universal Healthcare Act yesterday and referred it to the general assembly to pencil it in for a vote, Al Shorouk reports. The decision came after a hearing on the bill’s budget and financing, where Vice Minister of Finance Mohamed Maait explained that the EGP 588 bn per year healthcare system under the Universal Healthcare will run a deficit of around EGP 10 bn, as the math currently suggests the system will pull in about EGP 577 bn annually from a variety of sources.

Where does the deficit come from? The system will cost c. EGP 588 bn a year to run, of which EGP 292 bn will come from citizen-paid premiums, Mait said, according to AMAY. Those premiums become our responsibility: The government has previously said businesses will have to remit a sum equivalent to 3% of each employee’s salary, while employees would be responsible for a 1% tithe.

Where’s the rest of the funding coming from? The state will extend EGP 125 bn from its general budget to cover those unable to pay premiums, while EGP 51 bn will come from sin taxes on tobacco, licensing fees from the healthcare sector, and a tax on the sale of construction materials such as cement and steel (which were chosen for their excessive pollution). EGP 109 bn will come from “additional revenues,” the official said. He added that the deficit will be covered by “emergency funding provided to the healthcare system from the state budget. We had previously heard though that regulatory bodies managing the system will be allowed to invest funds from premiums and fees and use the returns to fund the system.”

Despite the EGP 10 bn deficit, the House Health Committee had been pushing the Finance Ministry to lower premiums, Al Borsa reports. The government reportedly agreed at the hearing to lower the premium required to cover a third child in any one family from 1.5% of the breadwinner’s salary to 1%, committee member Heitham Al Hariri said. The law had stipulated that families will pay premiums of 1% on the first and second child, but would pay 1.5% on all subsequent children (presumably to encourage birth control). The government had also agreed to lower additional fees the law imposes on hospital stays. To compensate for the reduction in premiums, the committee voted in favor of using proceeds from a hike in the fees for issuing and renewing drivers licenses, as well as proceeds from a 0.5% tax imposed on construction materials for healthcare.

The committee agreed to amendments that would lower registration fees for pharmacies and private clinics to a range of EGP 1,000-10,000, from EGP 3,000-15,000 previously, under the new act. This came after the Pharmacists Syndicate said it rejected the proposed bill, joining the Medical Syndicate in its opposition, Al Mal reports. Their primary point of contention it seems were the licensing fees the bill imposes on establishing new pharmacies. They also objected to not being consulted on drafting the act in a memo they sent to Ittihadiya.

LEGISLATION WATCH- The House of Representatives approved yesterday in its plenary session the contentious labor unions and youth institutions acts, Ahram Gate reports. The Labor Unions Act has been under fire from the International Labor Organization, the World Federation of Trade Unions, and the Egyptian Federation of Trade Unions as being too restrictive to union activity and freedom. MP Mohamed Elsewedy had previously called for the bill to mandate stronger oversight on unions’ financing. It remains unclear if Elsewedy’s proposal was included in the bill’s final form.

Meanwhile, the Youth Institutions Act seems to have passed with few changes from the general assembly. The bill bans political activity at public youth clubs, in addition to barring smoking, drinking alcohol, and gambling inside youth clubs and institutions.

The ban on drones also received parliament’s final stamp of approval, according to the newspaper (which had initially reported that voting on the bill was postponed). The law bans the manufacturing, possession, and use of drones without Defense Ministry approval. Violators could receive the death penalty if found guilty of using drones to commit acts of terror. The bill also sets prison sentences of up to seven years and fines ranging between EGP 5,000-50,000 for those found in possession of the aircraft.

Also approved during yesterday’s session: Amendments to the law on constructing family courts and amendments to the inheritance law. Voting on the bills had been long postponed, forcing House Speaker Ali Abdel Aal to specifically demand MPs’ presence at yesterday’s plenary session to push through the legislation.

The Ismail Cabinet approved yesterday a draft bill that would provide a mechanism to legalize some buildings now in violation of the building code, according to a statement. The law would allow settlements by owners of buildings that are constructed or used for a different purpose than it was licensed for, unless the building violates the maximum number of storeys approved by the Civil Aviation Authority, does not adhere to construction safety requirements, and / or does not comply with requirements for available parking spots. Settlements are also not permitted for buildings put up on agricultural or state-owned land. Also approved during yesterday’s meeting:

  • A EUR 225 mn loan agreement with Germany to help close the state budget’s financing gap and support the country’s economic reform program;
  • Two separate grants from the UN’s Food and Agriculture Organization worth a combined USD 676k for a project to use solar power in irrigation systems and another to support the sustainable use of water on reclaimed state land;
  • A presidential decree to allocate a 306.7 feddan plot in Minya for the General Authority for Freezones and Investment (GAFI) to establish a public freezone;
  • A bundle of decisions from the ministerial engineering committee on direct order agreements for projects pertaining to the transport, housing, and health ministries.

The World Bank announced yesterday that its executive board has approved thedisbursal of a USD 1.15 bn tranche of a USD 3.15 bn development loan to Egypt. “This loan is the last in the series of three annual loans — called the Fiscal Consolidation, Sustainable Energy, and Competitiveness Development Policy Financing loans — worth a total of USD 3.15 bn,” which had been paid annually from 2015-2017, the World Bank said in a statement. The government expects the funds to be issued within the next 48 hours, top state officials tell Youm7. The amount will be used to bolster FX reserves, which grew slightly during November to reach USD 36.723 bn, while its EGP equivalent will be paid out to different government offices and ministries to help finance development projects under their administration.

After renewables, expect a wave of investment pledges from the EBRD onagribusinesses in the near future: Egypt signed a joint declaration with the UN Food and Agricultural Organization (FAO), the European Bank for Reconstruction and Development (EBRD) and the World Bank to promote investment in efficient and sustainable agriculture, according to an EBRD statement on Tuesday. “The EBRD remains firmly committed to Egypt by supporting private sector competitiveness through stronger value chains, resource efficiency and improved access to finance in agriculture and agribusiness to unlock the sector’s potential,” said EBRD Deputy Head for Egypt Catarina Bjorlin Hansen. The signing took place at the “Promoting Sustainable Investment in Egypt’s Food Security” forum which took place in Cairo yesterday. Participants at the event, including producer associations, policy-makers and investors, focused their discussions on two key themes: making Egypt’s agriculture more sustainable and supporting the country’s food systems in becoming more efficient, specifically in terms of import supply chains and subsectors with high potential for exports. We anticipate a wave of new pledges of funding in the agribusiness sector from development finance institutions in the near future in the vein of the EBRD’s investments in Egypt’s renewables sector.

IN MEMORIAM: Prominent Egyptian businessman Tharwat Bassily passed away due to illness on Tuesday, according to AMAY. A talented entrepreneur, Bassily was the founder of Amoun Pharma, one of Egypt’s largest private med producers, and head of the Federation of Egyptian Industries’ pharma division.

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Image of the Day

David Rockefeller’s Rolodex would put even the most popular of social media celebrities to shame, claims the Wall Street Journal (paywall). The man’s five foot-long, custom-built Rolodex housed 100k contacts, ranging from businessmen, astronauts, and celebrities, to global powerhouse heads and world leaders, including our very own late president Anwar Sadat. The Rolodex supposedly records their every interaction from the 70s on and even notes the date of Sadat’s assassination.

Egypt in the News

The Washington Post blaming the Rawda terrorist attack in Sinai on Egypt’s government instead of the terrorists does not help, Egypt’s Ambassador to the US Yasser Reda writes to the editorial board. “The Post used this tragedy to condemn a vital ally of the United States in the war on terror. The contrast between its approach to this extremist attack and those committed elsewhere is troubling. Instead of allowing extremists to divide us, we must reaffirm and reinforce our unity to defeat terrorism in all its forms. Egypt and the United States are working together to do just that,” Reda writes. He adds: “Casting blame in the wrong places doesn’t help. To succeed, we must collaborate on all fronts and not let the acts of extremists distract or divide us.”

Egypt’s needs a “better approach” to combat terrorism in Sinai, experts told Voice of America. National Defense University Professor David Des Roches says setting a time limit for defeating insurgencies is not helpful and it “might play well politically back in the home office, but it almost never works. It usually emboldens the rebels … What it basically says to the insurgents is all you have to do is lay low for three months, then you can come back with strong force.” The deadline also drives security forces to use brute force, potentially driving them “to push aside the judgment and discretion needed to tackle insurgents, as well as alienating local populations, which could intensify the insurgency,” a view also shared by Brookings Institution defense expert Michael O’Hanlon.

Diplomacy + Foreign Trade

Ethiopia and Sudan are reportedly working to amend the Declaration of Principles on the Grand Ethiopian Renaissance Dam (GERD), which they signed with Egypt in 2015. The proposed amendments would allow Ethiopia to begin filling dam reservoirs before there is consensus over the environmental impact studies, an unnamed source from the Egyptian side tells Al Ahram. Sudan and Ethiopia reportedly asked Egypt to sign an agreement to that effect during the last round of talks, as Ethiopia wants to press ahead with filling the dam’s reservoirs next year, the source alleges. Trilateral talks on the dam had reached a stalemate last month when Sudan and Ethiopia refused to ratify the results of the impact study on the dam, which found that the GERD would indeed be detrimental to Egypt. Egyptian Irrigation Minister Mohamed Abdel Aati had said at the time that Ethiopia and Sudan requested to amend “critical areas” of the environmental impact studies on the dam.

Cairo hosted yesterday the third round of talks between Egyptian and US officials on the Trade and Investment Framework Agreements (TIFA), Al Shorouk reports. A delegation led by Assistant US Trade Representative for Europe and the Middle East Daniel Mullaney reportedly with Trade and Industry Minister Tarek Kabil yesterday to hammer out the details of the agreement, which could be a precursor to a potential freetrade pact with the US. No details on the meeting have emerged.

New African FTA? Trade and Industry Minister Tarek Kabil said yesterday that African countries are exploring establishing a continental freetrade area by next July. The issue came up during Kabil’s talks with the African Union’s Trade and Industry Commissioner Albert Muchanga in Cairo earlier this week, Al Ahram reports.

Korean businessmen are interested in investing in Egypt, particularly in the Suez Canal Economic Zone, Chairman of the Korean side of the Korea-Egypt Business Council Myeong Su Huh said, Al Masry Al Youm reports. The council is hoping to bring investors together from both sides to enhance trade relations across different industries, council head Raouf Ghabbour said.

A delegation from the Moroccan Chamber of Commerce will be visiting their Egyptian counterparts on 14 December to discuss ways to boost cooperation on trade and investment, Al Masry Al Youm reports. The delegation will include players from the food, building materials, and wood industries.

The Belarusian-Egyptian business forum for wood processing companies and furniture makers kicked off yesterday in Cairo, according to BelTA. Industry players from both countries came together to discuss ways to boost trade and cooperation. The visiting Belarusian delegation will also talk about its potential involvement in Damietta’s Furniture City.

The Egyptian Silicon Industries Company (E-SICO) signed an agreement with Qualcomm on Monday that will allow it to use the US telco’s latest patented technology at their new factory, according to the State Information Service.

Energy

Giza Systems awarded USD 25 mn EEHC contract to develop infrastructure for smart meters

The Egyptian Electricity Holding Company (EEHC) awarded IT solutions provider Giza Systems a USD 25 mn contract to develop infrastructure and network systems for the new smart electricity meters, sources from the EEHC tell Al Borsa. The project will take 12 months to complete from the day contracts are signed, which should happen sometime this month, the sources add, explaining that the Electricity Ministry plans to install 20 mn smart electricity meters over the next five years as part of its plan to improve energy efficiency and reduce errors in bill collections. Ericsson, IBM, and Huawei were also in the race.

El Molla discusses east Mediterranean-Europe gas pipelines with EU Energy Commissioner

Oil Minister Tarek El Molla discussed increasing energy cooperation with EU Energy Commissioner Miguel Arias Cañete in Brussels yesterday, Al Masry Al Youm reports. Talks included the potential extension of natural gas pipelines between Egypt and Europe, which would see gas sent to liquefaction plants in Egypt before it’s re-exported. Cañete said he would lead a delegation to Egypt sin 1Q2018 to hammer out the details of a strategic partnership agreement. El Molla’s visit comes days after Egypt and Cyprus reached a preliminary agreement on establishing a natural gas pipeline connecting Cypriot fields with liquefaction plants in Egypt’s Idku. Israeli Energy Minister Yuval Steinitz also said yesterday that the EastMed Pipeline project “could help secure [Europe’s] energy future,” according to the Associated Press. According to Steinitz, studies on the project show “that the pipeline is feasible, even though it presents technical challenges due to the depths involved.”

Test production on Atoll gasfield begins

Test production at BP’s Atoll offshore gas field began on Tuesday at0 300 mcf/d, Oil Minister Tarek El Molla told Reuters yesterday. Actual production on the 1.5 tcf would begin in the third week of December, El Molla said.

Infrastructure

Damietta Port taps PwC to conduct feasibility studies for new container terminal project

Damietta Port officials have tapped global consultancy firm PricewaterhouseCoopers to conduct feasibility studies for the construction of a second container terminal at the facility, which they are looking to have the EBRD finance. Port Chairman Ayman Salah met with a delegation from PwC yesterday to discuss their draft report on the project, Al Mal reports. Salah had said previously that the terminal drew offers from four global shipping firms, including France’s CMA CGM and China Harbor.

Real Estate + Housing

US’ Vernbro Global breaks ground on EGP 6 bn Downtown Tanta logistics, retail hub

US real estate developer Vernbro Global broke ground on an EGP 6 bn mixed-use project in Tanta for the Supply Ministry, which it expects to inaugurate by 2020, Daily News Egypt reports. Vernbro was contracted for the project after securing an Internal Trade Development Authority tender. The project — dubbed Downtown Tanta — spans 340k sqm and includes a commercial, logistics, and retail hub. It is the first logistics complex from the ministry’s new internal trade strategy to drive down costs and spoilage of commodities, which Minister Ali El Moselhy unveiled in September.

Telecoms + ICT

MNOs officially submit requests for additional 4G frequencies, ICT Ministry promises 5G licenses by 2020

Egypt’s four mobile network operators have officially submitted requests for additional 4G frequencies, two sources from the National Telecommunications Authority (NTRA) tell Reuters’ Arabic service. The NTRA will provide the frequencies requested, but the process will “take some time,” one of the sources says. ICT Minister Yasser El Kady had previously said the operators would have to pay for the frequencies in USD. El Kady is meanwhile already looking forward to issuing 5G licenses, which he said will be available by 2020, Al Mal reports.

Banking + Finance

Export Development Bank, Afreximbank, ECGE to sign USD 500 mn agreement

The Export Development Bank of Egypt, African Export-Import Bank (Afreximbank), and the Export Credit Guarantee Company of Egypt are going to sign an exclusive joint agreement on 8 December, the Export Development Bank said in a statement to the EGX (pdf). The agreement comes under the export credit support scheme.

FEB proposes easing requirements on mobile microtransactions

The Federation of Egyptian Banks (FEB) proposed that the central bank ease know-your-client protocols for mobile microtransactions in a bid to expand the mobile banking sector, FEB head and CIB Chairman Hisham Ezz El Arab said at the Cairo ICT Expo, Al Masry Al Youm reports. Microtransanctions through mobile networks need only be tied to a user’s national ID, with larger transactions only requiring other banking documents.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6834 | Sell 17.7822
EGP / USD at CIB: Buy 17.69 | Sell 17.79
EGP / USD at NBE: Buy 17.66 | Sell 17.76

EGX30 (Tuesday): 14,461 (-0.8%)
Turnover: EGP 1.2 bn (17% above the 90-day average)
EGX 30 year-to-date: +17.1%

THE MARKET ON TUESDAY: The EGX30 closed Tuesday’s session down 0.8%. CIB, the index heaviest constituent closed down 1.3%. EGX30’s top performing constituents were Egyptian Iron & Steel up 4.0%; Domty up 1.9%; and Kima up 1.6%. Yesterday’s worst performing stocks were Amer Group down 2.8%; EFG Hermes down 2.1%; and Oriental Weavers down 1.9%. The market turnover was EGP 1.2 bn, and foreign investors were the sole net sellers.

Foreigners: Net Short | EGP -193.9 mn
Regional: Net Long | EGP +54 mn
Domestic: Net Long | EGP +139.9 mn

Retail: 51.9% of total trades | 53.4% of buyers | 50.5% of sellers
Institutions: 48.1% of total trades | 46.6% of buyers | 49.5% of sellers

Foreign: 32.9% of total | 24.9% of buyers | 40.8% of sellers
Regional: 8.5% of total | 10.8% of buyers | 6.3% of sellers
Domestic: 58.6% of total | 64.3% of buyers | 52.8% of sellers

WTI: USD 57.62 (+0.26%)
Brent: USD 62.87 (+0.67%)
Natural Gas (Nymex, futures prices) USD 2.9 MMBtu, (-2.85%, January 2018 contract)
Gold: USD 1,268 / troy ounce (-0.76%)

TASI: 7,067.13 (-0.51%) (YTD: -1.99%)
ADX: 4,263.62 (-1.46%) (YTD: -6.22%)
DFM: 3,393.74 (-1.11%) (YTD: -3.88%)
KSE Weighted Index: 396.85 (-0.66%) (YTD: +4.41%)
QE: 7,912.48 (-0.23%) (YTD: -24.19%)
MSM: 5,109.62 (+0.06%) (YTD: -11.64%)
BB: 1,272.72 (-0.15%) (YTD: +4.25%)

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Calendar

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

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

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