Monday, 11 December 2017

Inflation eases again + exports, tourism and remittances are all up
(Oh, and Sha’bolla is back)

TL;DR

What We’re Tracking Today

Russian President Vladimir Putin arrives today to discuss a host of issues with President Abdel Fattah El Sisi, chief amongst which are the signing of the Dabaa nuclear power plant contracts and the resumption of direct flights between Moscow and Cairo. Also on the agenda are potential arms sales. We have confirmation from Ittihadiya that some sort of accord will be inked during the summit to get the ball rolling on the USD 30 bn power plant, but it remains unclear when exactly the contracts will be signed and sealed. We have more in today’s Speed Round, below.

El Sisi is also set to meet with Palestinian President Mahmoud Abbas in Cairo today for one-on-one talks on the US’ declaration last week recognizing Jerusalem as the official capital of Israel. Abbas arrived in Cairo last night as modest numbers of demonstrators hit the streets in cities including Cairo and Alexandria to protest moving the US embassy to Jerusalem, Egyptian Streets reports. Meanwhile, the Arab League adopted yesterday a resolution demanding that US President Donald Trump rescind the declaration, the AP’s Hamza Hendawi reports.

A House delegation is meeting with European Parliament officials today to discuss legislative and economic developments in Egypt, Egypt’s ambassador to Belgium Khaled El Bakly tells Al Masry Al Youm. The delegation, headed by House Planning Committee Chairman Hassan Eissa, is making the pitch for investment over loans as the best way to spur economic development in Egypt.

***Take our end-of-year survey — get a bag of Enterprise-branded coffee and cool mugs from which to drink it: It’s that time of the year again — we want you to help us gauge how well business went during the year. What are the biggest challenges you faced during the year? Where will the exchange rate stabilise? How big do you expect your employer’s raises to be? Are you hiring? Help us find out. You’ll get the chance to become one of 25 people who’ll get our end of year giveaway package consisting of Enterprise swag and our first-ever Enterprise-branded batch of coffee, which we’ve put together with good friends in the coffee business. (More on that in a later issue.)

Making headlines in the global business and finance press:

Bitcoin futures began trading overnight on a Chicago futures exchange. There was enough interest that the exchange’s website bonked multiple times under the load. January bitcoin contracts opened at USD 15k and were trading at USD 16,250 at about 4:20am CLT. Tap or click here to check out the CBOE page and get bitcoin future trading data. The story is front-page news for the Wall Street Journal and Reuters. Need to get up to speed? The guy on the bitcoin beat for the Journal since 2013 has a video explainer about the cryptocurrency (watch, runtime: 1:44). And as always, one of your go-to resources for bitcoin news should be Coindesk.

Which brings to mind the best bitcoin joke we’ve read recently on the tweeter (which isn’t saying much, as jokes go): “You want to borrow USD 10,000 to travel across Europe this summer, son? In bitcoin? What are you going to do with USD 14,736? I mean, really, USD 9,812 is a lot of money. How are you going to pay back USD 11,923?”

The World Trade Organization is meeting in Buenos Aires, and EU officials are using it as a platform to take a swipe at The Donald’s trade policies, the Wall Street Journal reports: “European Union officials said the U.S. is threatening to cripple global commerce by undermining the World Trade Organization,” the Journal reports, “EU officials said the U.S. is pulling back from its position as the world’s pre-eminent guardian of free trade, and that the resulting lack of broader ambition among WTO members will likely make the trade gathering unproductive.” The ministerial gathering runs through Wednesday, and you can check out the agenda here.

And for your morning dose of miscellany:

  • Robots will transform fast food, reports the Atlantic. If that’s a challenge for policymakers on the other side of the pond, what does it mean for tens of thousands of jobs here?
  • Don’t feel smug, “professional managers”: Check out the Wall Street Journal’s Meet your new boss: an algorithm. Uber, GE and Shell are already rolling out algorithmic overlords for their full- and part-time workforces.
  • “Saudi Aramco prepares for life after oil” is this morning’s Big Read in the Financial Times.
  • We love New Zealand, but the Kiwis aren’t certain they love the notion of us buying property over there.
  • Wait, what? “Child marriage in US is becoming less common but there were still 207,000 minors married between 2000 and 2015,” tweets HRW’s boss with a link to this piece in the Economist.

Last, but not least, Ars Technica has a guide to help you choose a gift for the true geek on your holiday shopping list: Ars Technica’s ultimate board game buyer’s guide. Even in a techie household such as ours, you need to know: You haven’t laughed since you’ve trash-talked family members while playing a board game with them. Monopoly will do. We particularly like this Stranger Things themed set.

What We’re Tracking This Week

Adventurer and entrepreneur Omar Samra and triathlete Omar Nour will begin their epic 5,000 km journey across the Atlantic ocean on nothing but a rowboat tomorrow. We wish them all them best on a feat that has been accomplished fewer times than humans have gone into space.

CFLD’s new capital contract should be clear this week: We should find out this week when China Fortune Land Development Company (CFLD) will sign contracts to develop 14k feddans in phase one of the new administrative capital, government sources said over the weekend. CFLD is planning to spend USD 4 bn developing parts of the new city over the next five years, a figure it plans to increase to USD 13.5 bn over the next ten years. The head of commercial affairs at China’s embassy, Han Bing, says that “we are very optimistic about the participation of Chinese companies in the new capital” (watch, runtime 02:17).

Enterprise+: Last Night’s Talk Shows

The talking heads busied themselves with a variety of topics last night, ranging from the expected signing of the Dabaa contracts today to the drop in the country’s annual inflation rate.

President Abdel Fattah El Sisi and Russian President Vladimir Putin will be signing an accord today that will signal the start of the Dabaa nuclear power plant project, Ittihadiya Spokesperson Bassam Rady confirmed to Masaa DMC’s Eman El Hosary. On the agenda for Putin’s one-day stop in Cairo is also the resumption of direct Russian flights, and other bilateral and regional issues, including the latest in Libya and Syria, and anti-terrorism efforts (watch, runtime: 8:20).

Over on Kol Youm, CAPMAS head Abu Bakr El Gendy reminded everyone that a drop in inflation rates will not result in a drop in prices, as he proceeded to lecture Amr Adib on the basics of economics. He stressed that the goal is to reduce the rate of price increases, and that m-o-m rates are the most important to keep an eye on, attributing the 1% m-o-m rise in inflation in November to hiked cigarette prices and consumers stocking up on winter clothes (watch, runtime: 14:33).

Hona Al Asema’s Lamees Al Hadidi, meanwhile, whizzed through the key points in November’s inflation figures and consumer price index (watch, runtime: 4:41).

Lamees also spoke to Arab League Assistant Secretary-General Hossam Zaki about the emergency ministerial meeting on Jerusalem that kicked off on Saturday, which Zaki said was “fruitful.” Some attending ministers had called for taking more drastic steps to lay the pressure on the US, but the majority agreed on holding out and escalating their position gradually (watch, runtime: 12:16).

Yahduth fi Masr’s Sherif Amer sat down with World Bank CEO Kristalina Georgieva for a chat about the Business for Africa, Egypt, and the World summit and the bank’s projects in Egypt. The disbursal of the third USD 1.15 bn tranche of its USD 3.15 bn facility (which was signed over the weekend) will help Egypt become a more attractive destination for private-sector investment in energy and renewable energy, Georgieva said. She also lauded President El Sisi for his economic reform program and sending a message that Egypt is open to investors, which she says was relayed through the summit.

The bank is currently also focusing on helping SMEs in Egypt to develop and expand, she said, pointing to a program to reduce the risk levels for medium-sized enterprises in glass production as one example of the bank’s efforts. Such projects will help to spur further growth of Egypt’s economy, allowing for the creation of job and investment opportunities that will keep the country’s debt levels at a manageable level, Georgieva said.

Speed Round

Speed Round is presented in association with

Urban consumer price inflation dropped to 26% in November, down from 30.8% a year ago. On a monthly basis, the inflation rate dropped to 1% in November, from 1.1% in October, according to state statistics bureau CAPMAS. Finance Minister Amr El Garhy says the inflation rate is set to drop to 20% in January and to reach 13-14% by August, according to Reuters. Annual core inflation fell to 25.54% in November, down from 30.53% in October. On a monthly basis, core inflation recorded 1.3% in November from 0.7 a month earlier, data from the central bank shows (pdf).

Enter the base effect: EFG Hermes’ Mohamed Abu Basha says the deceleration seen in November “officially kicks off a long-awaited period, where a favourable base effect kicks in and leads inflation to decelerate rapidly from its near four-decade highs of +30%.” The headline rate came “generally within expectations. I think it is likely that the central bank will begin cutting rates but not at the next meeting in December, at the one after," Arqaam Capital senior economist Reham El Desoki tells Bloomberg. She expects the central bank to cut rates by about 500 bps throughout 2018. Abu Basha has a similar rate outlook, saying, “While we see chances for a rate cut at the MPC’s next meeting on 28 Dec, we expect CBE to only start cutting rates in 1Q18 in order to ensure the extent of the expected slowdown is, indeed, in line with CBE’s expectations. This is especially the case, given two recent developments which resemble potential upside risks to inflation, namely i) continued acceleration in GDP growth in 1Q17/18, along with recent readings showing the private sector starting to recover; and ii) rise in oil prices.”

More good news a year on from the EGP float as Egypt’s balance of payments recorded a surplus of USD 5.1 bn during 1Q2017-18, an improvement from a surplus of USD 1.9 bn in the same period of the previous fiscal year, according to a CBE report (pdf) out yesterday. This came on the back of a significant improvement in Egypt’s current account deficit, which narrowed 65.7% to USD 1.6 bn in 1Q2017-18 from a deficit of USD 4.8 bn during the same period a year earlier.

Egypt’s trade deficit declined 5.0% to USD 8.9 bn for the quarter, down from USD 9.4 bn in 1Q2016-17. This largely came on the back of a 11.0% increase in merchandise exports to USD 5.8 bn from USD 5.3 bn in the same period last year. Egypt’s oil exports grew 16.8% to USD 1.8 bn in 1Q2017-18 from USD 1.5 bn a year earlier.

Non-oil exports rose 8.6% to USD 4.1 bn in the first quarter of the state’s fiscal year, up from USD 3.7 bn in the same period a year ago.

Merchandise imports were basically flat, rising just 0.7% to USD 14.8 bn.

Score another big win for tourism: Tourism receipts for the quarter grew to USD 2.7 bn, up from USD 758 mn in 1Q2016-17, in another sign of how far the sector has come in one year.

Remittances are soaring: Improving nearly 40% USD 6.0 bn, from USD 4.3 bn last year, also thanks to a cheaper local currency.

Net FDI fell slightly to USD 1.6 bn in 1Q2017-18 from USD 1.9 bn in the same period last year despite a 84.2% rise in investment in the oil industry, CBE data showed. N

Finance Minister Amr El Garhy said that foreign investment in Egyptian securities hit USD 19 bn as of 6 December since the EGP float, Reuters reports. Foreign portfolio investment rose to USD 7.5 bn in the CBE’s reporting period, thanks mainly to increased foreign holdings in Egyptian treasuries, which stood at USD 7.4 bn at the end of the period.

Suez Canal revenues also continued to be among the weak links, growing a marginal USD 82 mn to USD 1.4 bn in 1Q2017-18.

Also set to help on the balance of payments front: The Oil Ministry will begin test production from the Zohr natural gas field “in the coming few days,” according to a ministry statement carried by Bloomberg. “Authorities are pumping gas from the national distribution system to test pipelines in preparation for trial production from the offshore field … Output will gradually increase until mid-2018, with the first phase of the project initially yielding about 350 mcf per day,” Minister Tarek El Molla says.

INVESTMENT WATCH- Todo and the gang are going to Morocco: Edita, the nation’s largest producer of packaged snack food, announced (pdf) it will directly enter the Moroccan snack food market through a greenfield investment with Morocco’s Dislog Group, a leading Moroccan distributor for top multinational brands. Edita signed an MoU with Dislog to form a joint venture named Edita Food Industries – Morocco, with Edita owning a 51% stake. “Commercial operations will begin in early 2018 with exports of Edita’s products to Morocco, while the second stage will entail the establishment of a state-of-the-art manufacturing facility in 2019 with an initial investment estimated at around USD 10 mn.” Edita Chairman and Managing Director Hani Berzi says, “Morocco itself is a very attractive market due to its strong domestic demand and significant growth potential in the segments in which we operate… As we enter the Moroccan market, we aim to capitalize on our successful track record and replicate a proven business model of marketing and manufacturing excellence, calling on the same expertise in research and development, production, and distribution that has seen us succeed in Egypt. We will continue to be aggressive in terms of delivering on our long-term strategy to maximize growth.”

IPO WATCH- Ibnsina Pharma retail offering closes, trading to start tomorrow: Shares Ibnsina Pharma, Egypt’s fastest-growing and second-largest distributor of pharmaceutical products, will begin trading on the EGX on Tuesday after the book-building process for its retail offering ended yesterday. The company’s shares will trade under the stock symbol ISPH.CA and not IBNP as previously disclosed. The retail offering — c.15% of the 269,381,625 ordinary shares on offer — was 18.35x oversubscribed, generating an excess of EGP 4.3 bn from some 3,750 retail investors. The company’s institutional offering, which was 17.1x oversubscribed when it closed on 5 December, had drawn interest from over 500 institutional and HNWIs, generating a total EGP 22.4 bn at a price of EGP 5.80 per share. The company’s market capitalization will stand at EGP 3.9 bn at the start of trading tomorrow. Ibnsina plans to allocate EGP 280 mn of its IPO proceeds towards a capital increase in 1Q2018 to cover exits by current shareholders. Beltone Investment Banking is sole global coordinator and bookrunner for the transaction, while Matouk Bassiouny is acting as counsel to the issuer. Inktank Financial is investor relations advisor. Read the full press release here (pdf).

Russian President Vladimir Putin is expected to sign an agreement with President Abdel Fattah El Sisi today that will signal the start of the USD 30 bn Dabaa nuclear power plant project, Ittihadiya Spokesperson Bassam Radi told state television yesterday, according to MENA. Foreign Minister Sameh Shoukry had confirmed as much in a televised interview with RT Arabic, stating that “the project involves many disparate aspects, between technical, legal and financial, and we have reached advanced level of agreements upon these," but shying away from disclosing an exact date for when the contracts would be signed.

You can catch the full RT Arabic interview with Shoukry here (watch, runtime 25:27).

Speculation on the actual date remains rife, with an Electricity Ministry source saying everyone is tight-lipped about the whole affair, while other sources told Reuters separately it would definitely take place during the visit. Still others told Al Shorouk that Tuesday was the anointed date. State-owned outlet Ahram Gate mentions that a delegation from Russian nuclear energy company Rosatom had arrived on Saturday and met on Sunday with International Atomic Energy Agency inspector Yousry Abushady, who tells the newspaper that three “pleasant surprise” announcements were on the way.

Could Russian tourists finally be coming back? Restoring direct air travel between Cairo and Moscow will also be on the agenda, both Shoukry and Radi confirmed. While no official date has been set, talks are ongoing between both government to finalize security protocols, Shoukry said. Ittihadiya has also received a detailed brief from the Tourism Ministry ahead of the summit detailing the latest in negotiations and security inspections, Tourism Ministry sources also tell Al Borsa.

Tour operators speaking to the newspaper expressed their hopes that the issue would be resolved at the summit, especially as Egypt has been complying with Russia’s security demands. The most accolade Egypt’s air travel security came from the US’ Transport Security Administration which had a glowing report of EgyptAir’s security procedures for flights to New York, Al Masry Al Youm reports.

RT Arabic’s online portal also ran an interview with Air Force commander Hisham El Halaby, who expects that we should see military agreements and weapons purchases announced during the trip. Sources at the Suez Canal Economic Zone also told Reuters’ Arabic service that Putin would also be signing an agreement for the establishment of a Russian industrial zone in the area, as Egyptian-European Business Council head Mohamed Aboul Enein had said on Saturday.

LEGISLATION WATCH- “Final” draft of the Automotive Directive coming in January: A final draft of the long-awaited Automotive Directive will be ready next month, said Industry Development Authority head Ahmed Abdel Razek. He tells Al Mal that factoring in input from a German consulting firm hired by the Trade and Industry Ministry was behind the delay in redrafting the bill — a process he blamed on the division within the auto sector on the incentives provided by the law, which is expected to grant local assemblers incentives to move further up the value chain to manufacturing. Trade and Industry Minister Tarek Kabil had said last month that the manufacturers would be eligible for incentives if they are able to meet a minimum local component requirement of 45%, which over the course of eight years would rise to 60% for personal vehicles and smaller of group transport vehicles. Local content requirements for light trucks would peak at 70%. Manufacturers would also receive exemptions from development fees if they produce a certain number of vehicles on an annual basis, or if they export 25-40% of their total output a year.

Not a moment too soon for auto assemblers, who have started eying expansion abroad: GB Auto Chairman Raouf Ghabbour called on the government to speed up the process on getting the law passed, saying that the delay had contributed to the company holding back on any new investments for the past three years. Ghabbour even implied he was considering expanding abroad, saying that Turkey’s Investment Support and Promotion Agency had offered the company incentives including rebates of up to 20% of the capital invested in an assembly plant there, according to Al Mal.

The African Export Import Bank (Afreximbank) is planning to provide Egypt with another USD 500 mn loan, this time geared towards the banking sector, Afreximbank’s Executive Vice President for Business Development and Corporate Banking Amr Kamel said at the Business for Africa 2017 conference, Al Mal reports. He added that the bank is currently in talks with the CBE to discuss how this new loan will be disbursed. Afreximbank had signed a USD 500 mn loan agreement with the Export Development Bank of Egypt to fund exports to Africa last weekend at the conference.

Cleopatra Hospital Group’s EGP 700 mn capital increase was 99.81% subscribed, according to an EGX disclosure (pdf). The company had applied for EGX approval to issue 1.4 bn new shares to existing shareholders back in October at a price of EGP 0.5 per share as it looked to raise its issued capital to EGP 800 mn from EGP 100 mn. Proceeds will be used to fund the acquisition of an EGP 600 mn hospital and to repay a EGP 100 mn loan.

Qalaa Holdings Chairman Ahmed Heikal stressed the importance of infrastructure development for Africa in remarks this weekend in Sharm El Sheikh, describing it as the “key” to unlocking the continent’s “significant growth potential” and capitalizing on its wealth of strong growth drivers, such as rapid population growth levels and large consumer markets. Speaking in an on-stage interview at the 2017 Africa and the World conference, Heikal said that “investors are beginning to realize not only the necessity of infrastructure investments, but also the potential for their high returns.” He explained that in Egypt, which is already beginning to reap the fruits of the government’s “bold economic reform program,” Qalaa Holdings has “successfully built 27 businesses from scratch over the past decade by identifying trends in our market and riding them in a way that translates into growth for our companies.” The company has focused on transport and logistical projects, as well as others such as the Egyptian Refining Company. ERC is reportedly set to begin production in September 2018.

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The UAE’s Sandstorm Automotive is producing the first “100% Arab-manufactured car,” with many parts sourced from Egypt. The company plans to launch its creation by June 2018 with the intention of producing 3,000-5,000 units in an initial run. Sandstorm “purchased glass, batteries, seats, and car horns from the Egyptian market, and seeks to establish a plant in Egypt and launch a production line that can export produced cars to Africa,” MEA Manager Karim Saleh tells Daily News Egypt.

Egypt in the News

Michelle Dunne recapped recommendations she made at the Tom Lantos Human Rights Commission’s congressional hearing on Egypt in a piece for the Carnegie Endowment in which she stresses active engagement, arguing that the US had a strong interest in improved human rights conditions in Egypt as well as a responsibility to press for them.

The Guardian’s readers’ editor, Stephen Pritchard, carried more scathing remarks, but explained he chose to participate in the Sharm El Sheikh World Youth Forum because “it is better to engage in dialogue.”

The new administrative capital has been “hard to sell,” according to the AFP. “Amid hesitation from foreign investors, only a few Gulf companies and a Chinese partner have expressed interest in the project,” the piece notes.

Also worth a skim this morning:

  • Egypt, Saudi, and the UAE “ have a strong pipeline of announced and rumored IPOs” planned for late 2017 and early 2018, The National notes.
  • Megan Van Groll recounts her experience visiting “post-revolutionary Cairo” in 2012 for Huffpost.

Worth Watching

The fifth edition of the Sahl Hasheesh triathlon wrapped up a few weeks ago and organizers Trifactory have put together a nifty highlight video showing athletes from all across the globe compete in one of the region’s largest contests of its kind. Next up for Trifactory is the ‘Aswan42’ marathon, which will take competitors through scenic Aswan on 2 February, with proceeds going to the Magdi Yacoub Heart Foundation. (Watch, runtime 1:49)

Diplomacy + Foreign Trade

President Abdel Fattah El Sisi met with the Chairman of Libya’s Presidential Council Fayez Al Sarraj in Cairo yesterday (pdf) to discuss developments in the Libyan peace and reconciliation efforts. Anti-terror cooperation was also on the agenda. Al Sarraj also sat down with Foreign Minister Sameh Shoukry for talks on the same issue.

Both Turkey and Egypt are seeking “regional hegemony,” Iran’s former ambassador to Jordan Nosratallah Tajik tells MEHR News Agency. He suggests that Turkey is trying to get closer to Egypt “to prevent more closeness of Egypt to Saudi Arabia in order to keep balance in the region.” Nosratallah adds that he does not believe Egypt will follow Saudi hostility towards Iran, saying “Egypt and Iran have their own concerns and problems.”

The Investment and International Cooperation Ministry is in talks with the Finnish government for a EUR 5-30 mn to finance public service projects, Commercial Attache at the Finnish embassy Yasser Shawky tells Al Mal. Talks should wrap up early on in 2018. Finland suggested using the funds for a sewage treatment plant or water station, which would be offered under Cairo and Helsinki’s 2016 strategic cooperation framework.

Energy

Teba for Development to construct EGP 300 mn electrical transformer production factory

Teba for Development is planning to establish a EGP 300 mn factory to manufacture electrical transformers in partnership with an unnamed Chinese company, Teba Chairman Mohamed Soliman tells Al Shorouk. The 22k sqm factory will be constructed over the next year in 10 Ramadan City.

Basic Materials + Commodities

Ban on Egyptian produce has had limited effect on overall agricultural exports

Egypt managed to mitigate the effects of the ban that some countries imposed on certain Egyptian crops by breaking into new markets, Agriculture Export Council Chairman Ali Issa tells Al Shorouk. While the blanket bans enforced by countries including Sudan, Saudi Arabia, and Kuwait, held back some 100k tonnes of crops meant for export, Egypt still managed to ship out around 1.7 mn tonnes of produce, mostly citrus fruits. New crops are also being sold to China for the first time, Issa said. The Agriculture Ministry had announced last month that Vietnam was now open to Egyptian citrus exports, citing tighter quality control measures as the reason behind improved trade activity. We have been hearing rumors as well that Sudan is close to lifting its ban on Egyptian produce and that talks are ongoing with Saudi Arabia to resume shipments of strawberries and peppers.

Wadi Group shelves fodder plant due to capex and liquidity concerns

Wadi Group has decided to indefinitely postpone plans to establish a new fodder plant due to capex and financing concerns, CEO and President Tony Freiji tells Al Shorouk. The company will focus instead on its projects in the Toshka area, particularly in lights of its liquidity shortage and how high interest rates are at the moment, Freji adds.

Manufacturing

Oriental Weavers to invest EGP 120 mn in production lines and equipment

Oriental Weavers is planning on spending EGP 120 mn on new production lines, machinery, and equipment over the next year, Founder Mohamed Khamis tells Al Shorouk. The investments are part of the company’s expansion strategy, which will be financed through a EUR 9 mn loan agreement with QNB Alahli. The company had announced plans in November to add 8-10 weaving looms by end-2018.

Real Estate + Housing

Uptown Alex developing EGP 100 mn project in Semouha

Uptown Alex is developing a residential project in the Alexandria neighborhood of Semouha for EGP 100 mn, Managing Director Sabri Ghanem tells Al Borsa. The 4,000 sqm project will include 220 homes, as well as commercial and administrative spaces, once it’s complete by 2020. 35% of the project has already been marketed to buyers, with the rest set to be made available by end-2018.

NUCA finishes urban planning on 20 plots of land in New Alamein

The New and Urban Communities Authority (NUCA) is planning to tender 20 land plots at the New Alamein City by 1Q2018 to real estate and commercial developers, sources at the Housing Ministry tell Al Borsa. NUCA has already received requests from local and Arab investors.

Telecoms + ICT

GTH extends USD 200 mn loan agreement

Global Telecom Holding announced entering into an amendment agreement for a USD 200 mn unsecured short-term loan agreement with Citi and ING Bank, according to a company statement.

NTRA may tender additional 4G frequencies

The National Telecommunications Regulatory Authority (NTRA) may issue a tender for “a limited set of bands” of additional 4G frequencies, Daily News Egypt reports. The NTRA is currently studying ways to address requests from the country’s four network operators, all of whom have officially asked for additional frequency. Prices and conditions would be determined based on the amount made available, NTRA boss Mustafa Abdul Wahid said. The NTRA had said last week that making additional frequencies available would “take some time.”

Automotive + Transportation

NAT to issue tenders for Cairo Metro Line 4 within two weeks

The National Authority for Tunnels (NAT) is expected to begin issuing tenders for the Cairo Metro’s Line 4 in two weeks’ time, NAT Spokesperson Hassan Tawfik said, Al Borsa reports. These will include tenders to supply 23 locomotives, carrying out electromechanical works, and setting up the communication system for the line. The NAT plans to sign the final construction contracts with the Taisei-Orascom Construction consortium in January and expects work on the line to begin in 1Q2018, Tawfik said. As we noted last week, the Japanese International Cooperation Agency (JICA) is waiting on the government to reach final agreements for current supply tenders to disburse the second tranche of its USD 1.2 bn loan to finance the metro line’s construction.

Other Business News of Note

UK’s LOC inaugurates new Cairo office

British marine and engineering consultancy firm LOC Group inaugurated last week its new office in Cairo to give the company better access to MENA countries, according to a British embassy statement. “Longer term, LOC plans to develop the Cairo office into a larger multi-function office providing marine warranty surveying, marine surveying, marine casualty response and engineering consultancy,” according to the statement.

Legislation + Policy

MP presents draft law to regulate e-commerce

House Industry Committee member Ali El Kayal presented a draft law to the House of Representatives that means to regulate Egypt’s e-commerce industry, Ahram Gate reports. The bill is focused mainly on implementing a taxation framework for e-commerce businesses, which could add significantly to the government’s tax income. The legislation also includes clauses to protect consumers from misleading advertisements and other electronic scams, as well as protecting users’ private data.

Justice Ministry to send amendments to Economic Courts Law to Cabinet “within days”

The Justice Ministry will send the amendments to the Economic Courts Law to Cabinet for approval “within days,” unnamed judicial sources tell Al Borsa. The ministry had sent the bill last week to the head of the Economic Court for a final round of discussion. The amendments seek to expedite the dispute resolution process.

On Your Way Out

The original “Wolf of Wall Street,” Jordan Belfort, says an Egypt event he was supposed to speak at this month is a fraud in a statement on Facebook. He added that the organizer of the event, which was called ‘Rise of the Entrepreneurs,’ has disappeared without paying him his retainer or booking his tickets. The organizer posted a brief statement on Facebook saying the event was canceled and that refunds would be provided, without providing any further details.

The Donald has awakened Sha’bolla from his slumber: After a rather long absence, the living, wheezing embodiment of sha’bi music that is Shaaban Abdel Rahim has returned with a scathing attack on US President Donald Trump. The man who brought us such classics as Habatal El Sagayer (I will quit cigarettes) and “I hate Israel, but I love Amr Moussa” tears into the US President over the embassy move with his characteristic flare of lyricism and political commentary — interspersed with the ever present “eeeeeh.” The song title: “Trump has lost his mind” (watch, runtime: 4:31). Sha’bolla, you have indeed been missed.

For our non-Egyptian readers fortunate never to have heard of him: Think Weird Al Yankovic trying desperately to be Bob Dylan. After a lobotomy.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.7591 | Sell 17.8579
EGP / USD at CIB: Buy 17.75 | Sell 17.85
EGP / USD at NBE: Buy 17.69 | Sell 17.79

EGX30 (Sunday): 14,414 (+0.8%)
Turnover: EGP 735 mn (29% below the 90-day average)
EGX 30 year-to-date: +16.8%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 0.8%. CIB, the index heaviest constituent closed up 0.7%. EGX30’s top performing constituents were Emaar Misr up 4.8%; Egyptian Resorts up 3.3%; and Domty up 3.3%. Thursday’s worst performing stocks were Telecom Egypt down 1.3%; Oriental Weavers down 0.5%; and EFG Hermes down 0.3%. The market turnover was EGP 735 mn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +121.9 mn
Regional: Net Long | EGP +359.9 mn
Domestic: Net Short | EGP -481.8 mn

Retail: 56.1% of total trades | 44.8% of buyers | 67.4% of sellers
Institutions: 43.9% of total trades | 55.2% of buyers | 32.6% of sellers

Foreign: 25.9% of total | 28.5% of buyers | 23.2% of sellers
Regional: 10.5% of total | 18.4% of buyers | 2.7% of sellers
Domestic: 63.6% of total | 53.1% of buyers | 74.1% of sellers


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PHAROS VIEW

Egypt 2018 Macro Update — An Economic Transformation in Action: As we draw closer to 2018, Pharos Holdings gives its forecasts for Egypt’s macroeconomic growth over the next three years. Pharos expects real GDP growth to accelerate to 4.7% in FY2017-18 and to 6.1% in FY2019-20. Inflation rate is projected to decelerate to 16.6% y-o-y in FY2018-19 and 13.3% in FY2019-20 on the current tight monetary policy. The budget deficit will decline to 10.0% of GDP in FY2017-18 and 8.0% of GDP by FY2019-20 on the back of the fiscal reform measures and the resulting pickup in economic activity.The nominal FX exchange rate will stabilize in the current fiscal year at EGP 17.5 per USD, depreciating slightly to EGP18.6 in FY2018-19. You can catch the full report here (pdf).

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Calendar

15 December (Friday): The Law Magazine’s Law Talks event, Zamalek palace, Cairo.

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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