Wednesday, 20 December 2017

Naguib Sawiris pulling out of North Korea?

TL;DR

What We’re Tracking Today

The board of directors of the IMF meets today to decide on the release of the thirdUSD 2 bn tranche of Egypt’s USD 12 bn Extended Fund Facility. The board will base its decision on the outcome of the second review of the Sisi administration’s reform agenda, which concluded early last month, and we’re optimistic that it’s in the bag. “Egypt’s economy continues to perform strongly, and reforms that have already been implemented are beginning to pay off in terms of macroeconomic stabilization and the return of confidence,” the IMF had said following the review.

Key economic indicators have continued to improve since then, with annual inflation dropping below the 30% mark in November for the first time this year to 26% (albeit a slower improvement than expected). Reserves are stable, and 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. Finance Minister Amr El Garhy has said the funds should be disbursed in January.

The CBE announced on Tuesday that remittances from expats rose by 38.9% y-o-y inOctober to around USD 2.2 bn, according to Reuters. Remittances jumped nearly 40% y-o-y in 1Q2017-18 to USD 6.0 bn, from USD 4.3 bn during the same period last year.

The official launch for production at the Zohr gas field is expected to take place today, said Mario Bello, managing director of Eni JV Agiba Petroleum Company, according to Ahram Online. Production at the 30 tcf gas field began on Saturday with at a rate of 350 mcf/d. Bloomberg Quicktake has a rundown of the benefits Egypt is likely to see from the Zohr gas field. The piece notes the USD 60 mn in savings per month, as initial production rates can replace three LNG shipments. “[Zohr and West Nile Delta] fields can improve Egypt’s balance of payments by narrowing the current account deficit by approximately USD 4 bn and encourage more foreign investment in Egypt’s energy sector,” said CI Capital’s Hany Farahat. That said, the government cannot rely on gas production alone and has to continue to push renewable energy projects and phase-out fuel subsidies, according to EFG Hermes economist Mohamed Abu Basha.

Trade and Industry Minister Tarek Kabil is in Brazil today for a Mercosur summit, Al Masry Al Youm reports. Kabil is attending the summit on behalf of President Abdel Fattah El Sisi, and will work to promote investment projects in Egypt. He is scheduled to meet with his counterparts from Brazil, Uruguay, Paraguay, and Argentina, in addition to the chairman of the Arab-Brazilian Chamber of Commerce.

Adventurer and entrepreneur Omar Samra and triathlete Omar Nour have rowed 129 nautical miles — and have 2,475 more to go — on the fourth day of their 5,000 km journey across the Atlantic Ocean. The two faced some trouble on day three of their expedition, including unfavorable weather conditions and dehydration after their water maker malfunctioned. Things are now looking up as favorable waters and good winds helped the duo reach an important milestone: “Our emotions went up and down and we were elated when we lost site of the shore and could only see the ocean in all directions,” Samra says in his daily update. (Photo credit: Ben Duffy)

** 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? Do you expect big raises in 2018? 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.) The survey ends this Thursday, and we’ll have the results when we’re all back from the Christmas-New Year’s-Christmas break.

** We’re taking a break next week. As is our custom, we’ll be recharging our collective batteries in the final week of the year. We will not be publishing on Sunday and Monday, but we’ll then be back with short issues on 26-28 December, and then off again until 2 January 2018. We hope you, too, are planning to relax with family and friends — whether you’re the kid returning home from college for winter break, or the parent looking forward to welcoming them.

What We’re Tracking This Week

The government will start drafting the executive regulations of the Universal Healthcare Act this week, after the House of Representatives passed the law on Tuesday, sources close to the Ismail cabinet tell Al Shorouk. The ministers of health and finance are expected to meet with acting Prime Minister Moustafa Madbouly this week to begin discussing the broad strokes of the regs before drafting begins, they added. The executive regulations are expected to lay out the criteria for those exempt from paying premiums into the new state healthcare system based on income level. Health Minister Ahmed Rady tells Al Ahram that those with chronic illnesses such as diabetes will be exempt from paying premiums to the system.

On The Horizon

The central bank will meet a week from Thursday to consider interest rates. The emerging consensus seems to be that the 28 December meeting of the Monetary Policy Committee won’t see interest rates cut after a surprise month-on-month surge in inflation in November. Share

Enterprise+: Last Night’s Talk Shows

Last night’s talk shows were a bore, with just about nothing that qualified as business-relevant — and nothing so egregious that we could really call it a lowlight:

Kol Youm’s Amr Adib touched on the shell attack on Al Arish airport yesterday during a visit from the interior and defense ministers, which he said is evidence that the perpetrators had access to intelligence on the ministers’ schedules (we have more on the attack in National Security, below). Wearing his Captain Obvious cape, Adib said that Al Arish has become a conflict zone (watch, runtime: 3:35).

Adib also talked to State Information Service head Diaa Rashwan about the New YorkTimes’ guest column describing Egypt as a “terrible ally” to the US. Adib chalked up the negative press to Egypt drafting a UN Security Council resolution against the US’ Jerusalem declaration. Rashwan said the editorial’s release was timed to act as an explanation for US Vice President Mike Pence delaying his visit to Egypt. Rashwan said that many of the guest columnists’ criticisms are points of pride for Egypt, including diversifying its allies and weapons providers. In any case, the SIS will coordinate with the Foreign Ministry to issue a formal response to the editorial. Separately, Rashwan said the SIS is holding a presser tomorrow to address media reports on Egypt’s human rights record (watch, runtime: 9:41).

Over on Masaa DMC, Osama Kamal spoke to deputy chairman of the Egyptian ElectricityHolding Company (EEHC) Al-Husseiny Al-Far about EEHC’s agreement with E-Finance to collect e-payments for power bills and charging prepaid meters. The payment service is accessible through Egypt Post branches, said postal service boss Essam El Sagheer (watch, runtime: 11:12).

Yahduth fi Masr’s Sherif Amer sat down with Consumer Protection Agency head AtefYacoub, who had little more to add to what has already been said about the Supply Ministry’s price-printing policy. Yacoub lauded the policy as good for consumers.

Meanwhile on Al Hayah Al Youm, Tamer Amin talked to SME Development AuthorityChairperson Niveen Gamea about the authority’s mandate and efforts including nation-wide training program on how to start and develop SME projects (watch, runtime: 34:13).

Hona Al Assema’s Lamees Al Hadidi was off last night.

Speed Round

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Naguib pulling out of North Korea? Orascom Telecom Media and Technology Holding (OTMT) reportedly stopped its service in North Korea early last month and is preparing for a full withdrawal from the country, the Korea Times reports, citing sources. Japanese intelligence officials and industry sources say OTMT “has decided to pull its network out of the North completely amid mounting pressure from the United States and the U.N. Security Council.” As recently as September, Chairman Naguib Sawiris was saying he has no plans to divest from North Korea, even though OTMT effectively lost control of its subsidiary there Koryolink in late 2015. Koryolink was established in 2008 as North Korea’s only 3G mobile phone network with OTMT reportedly controlling a 75% stake of the venture. “The media report noted the Egyptian company has yet to officially announce its decision to withdraw from the North, as some procedures need more time to be handled smoothly,” the story adds.

Naguib’s presence in North Korea came under the spotlight after Egypt’s ties to the DPRK were reportedly a factor in Washington’s decision earlier this year to freeze and cut aid to Egypt. Naguib said at the time that he had no plans to divest. Subsequent coverage of Egypt’s trade and arms relationships with North Korea saw Cairo quietly signal that it was backing away from its decades-long relationship with Pyonyang.

China lands port projects worth c. USD 1.4 bn: The Transport Ministry signed yesterday MoUs with the China Road and Bridge Corporation (CRBC) for three port projects at a combined cost of USD 1.35 bn, Minister Hisham Arafat said, Al Borsa reports. The agreement will see CRBC conduct studies and designs to develop the Safaga, Nuweiba, and Sharm El Sheikh ports, in addition to constructing and operating new multipurpose terminals at the ports. CRBC will also be responsible for supplying the equipment for the projects, which will be carried out under a build-operate-transfer framework. The Safaga Port project will cost USD 400 mn, while the developments at the Nuweiba and Sharm El Sheikh ports are expected to cost USD 350 mn and USD 600 mn, respectively.

Chinese tourism to Egypt doubles this year: Some 300k Chinese holidaymakers visited Egypt this year, double the 150k who arrived in 2016, trade and economic attache with the Chinese Embassy Han Bing said according to Al Mal. His statements came at an annual conference that reviews economic cooperation between Egypt and China.

The USD 3-4 bn USD-denominated eurobond issuance will take place towards the end of January, said Finance Minister Amr El Garhy, Al Borsa reports. A roadshow for the issuance will take place in mid-January, with the Finance Ministry focusing on Europe and the US. Extending the roadshow to Asia is under consideration and will depend on the recommendation of investment banks selected to be joint lead managers of the eurobond issuance program. The Finance Ministry will select winning investment banks in a few weeks’ time, El Garhy added. BNP Paribas, Citi, JP Morgan, and NATIXIS were joint bookrunners during the last eurobond issuance.

Another step closer towards privatizing the gas sector: The market will start operating under the executive regulations for the new Natural Gas Act from February onwards, Karem Mahmoud, the head of the natural gas market regulator says, according to Al Masry Al Youm. Oil Minister Tarek El Molla had said the regulations would be ready within the coming weeks. Mahmoud says he expects the new regulations to incentivize production of natural gas locally and attract investment in petrochemicals and fertilizers.

IPO WATCH- Eagle Capital could list shares of Egyptian MediaGroup (EMG) on the EGX, sources from EMG tell Al Borsa. Eagle Capital, led by former Investment Minister Dalia Khorshid, announced on Monday that it had acquired Ahmed Abou Hashima’s stake in EMG, the parent company of high-profile media assets including ad agency Synergy and broadcaster OnTV. Plans for a listing on the EGX have been in the books prior to the acquisition, and the new board of directors will consider the issue, the sources said.

Meanwhile, Osama El Sheikh, the noted journalist and former head of broadcaster ART, has been the new chairman of EMG, replacing Abou Hashima, EMG CEO Hussam Saleh told Al Masry Al Youm on Tuesday. The company seems set to hold a presser on Thursday.

Speaking of Abou Hashima, the man had glowing things to say about investing in Egypt’s manufacturing sector in a talk with content mill World Finance. Representative quote from the Egyptian Steel CEO: “The future is ours, and I never regretted investing during [the time of Egypt’s 2011 revolution]” (watch if you must; runtime: 04:06).

IPO WATCH- El Saba Automotive to IPO in the coming five years: El Saba Automotive, Nissan’s distributor in Egypt, plans to list shares on the EGX sometime in the coming five years, chairman Alaa El Saba tells Al Mal. The decision appears to have been precipitated by the CBE’s 700 bps interest rate hikes this year. El Saba tells the newspaper that in this high interest rate environment, auto companies must seek alternative avenues of financing away from the banking the sector — fair enough, but if that’s the sole impetus, the five-year horizon is a bit odd. El Saba added that being publicly traded would be an advantage in solicit business from foreign car manufacturers.

Heliopolis Housing will get 30% of the sales revenues of residential units and 30.2% from commercial units at SODIC East, according to a bourse disclosure. The project’s first phase, bringing in EGP 1.8 bn, was sold out in seven days, SODIC CEO Magued Sherif had announced during the week. SODIC East is being co-developed with Heliopolis Housing on a 655 feddan land plot.

Italian tire manufacturer Pirelli is reportedly considering starting a research a development center in Egypt within three years, according to Agenzia Nova. The center would be the first R&D center for that industry in Egypt.

Good luck with that: Taxi booking application Professional Taxi aims to start service before the end of the month, CEO Mahmoud Ahmed said in statements carried by Al Borsa. The company has 1,000 white taxis on its roster, all models from 2011 and up, and will offer a discounted rate of EGP 1.75 per km from the usual EGP 2.00. The app is available on Android and will expand to other operating systems down the line. The company will initially cover the Cairo and Giza areas.

TRANSACTION NEWS- Things lawyers would like you to know this morning:

Matouk Bassiouny acted as the legal counsel, alongside Davis Polk, to Maersk Drilling in its divestment of its 50% stake in Egyptian Drilling Company. EGPC bought the stake for cash consideration of USD 100 mn to become the company’s sole shareholder.

Shahid Law’s corporate and M&A team advised Longreen Capital Advisors in its acquisition of Egyptian International Restaurants Company, operator of El Omda chain of restaurants.

Sarie-Eldin & Partners was counsel to lenders in a transaction to provide Saudi Plastic Factory SAE with a syndicated facility of USD 13.5 mn and EGP 120 mn arranged by Alexbank and Emirates NBD. The funding will go towards financing part of the investment cost of the development, design, construction and operation of a plastic packaging products manufacturing facility owned by Saudi Plastic Factory.

MOVES- Former Vodafone Egypt CEO Stefano Gastaut was named Vodafone’s Global Director Internet of Things. Gastaut’s appointment is effective 1 January 2018. He was CEO of Vodafone Egypt from September 2016.

Financial Regulatory Authority (FRA) Chairman Mohamed Omran warned against calls to invest in cryptocurrencies, describing such a move as “fraud” and those who engage in it could be held liable under the law. In a statement on Tuesday meant to warn investors against rushing into Bitcoin-mania (Bitcoin prices breached USD 17,000 mark yesterday), Omran noted that mystery still surrounds these currencies, citing major warnings from numerous banking and supervisory authorities against them, including the International Organisation of Securities Commissions. Omran said that amendments to the Capital Markets Act had been made to allow for futures trading and other financial instruments. Any other instruments will require further legislative amendments, in a reminder that cryptocurrencies still remain outside the purview of the law in Egypt. Omran lends his voice to that of the central bank, which has issued repeated warnings on the legal status of cryptocurrencies (and lack thereof).

Another ballistic missile fired by Houthi rebels in Yemen targeting the Saudi Arabian capital of Riyadh was shot down on Tuesday, Reuters reports. No casualties were reported from the attack, the second in as many months. US Ambassador to the United Nations Nikki Haley said the “bears all the hallmarks of previous attacks using Iranian-provided weapons.” She pushed the UN Security Council to act.

In other Saudi news, Saudi Arabia’s fiscal deficit is expected to grow in 2018, as the country’s Finance Ministry announced plans to increase spending to a record SAR 978 bn riyals (USD 261 bn), up from SAR 890 bn the original 2017 budget plan and SAR 926 bn of actual spending this year.

Other international news worth noting in brief include:

  • The US House of Representatives almost passed the Republican tax reform plan, but were derailed on a technicality from the US Senate, Reuters reports. Expect another vote this week.
  • The White House on Tuesday blamed North Korea’s government for the massive WannaCry cyberattack in May that crippled hundreds of thousands of computers around the world, according to WSJ.
  • South African Union leader Cyril Ramaphosa won the ruling ANC party’s nomination for leadership, dealing a blow to beleaguered President Jacob Zuma, the FT reports.

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The Macro Picture

The global economy is on track to continue outperforming most predictions in 2018, says Goldman Sachs’ Chief Economist Jan Hatzius. Global GDP growth is expected to come at 4% in 2018, above the long-term trend and bringing unemployment rates down, he says.

Goldman Sachs is also bullish on emerging markets, saying that most EMs are “below their long-term capacity to produce,” which in Hatzius’ view should allow them to maintain strong growth for an extended period before their respective central banks need to slow things down. There is “more room to go” and, for now, inflation is below central bank targets in most places around the world, he says.

Global growth is set to be broad-based between EMs and developed economies for the time being, but that is “a story that’s likely to shift in the coming years as developed economies start to run up against capacity constraints,” Hatzius says. The challenges for 2018 include the trade policy debate in the US, national elections, but the political risks are “not that great,” he adds. “Bottom line is … we have strong growth and low inflation. And while central banks are moving towards the exit, so far they’ve done that in a way that is relatively market-friendly and really well-digested by markets … for now, it’s quite a friendly environment.”

Egypt in the News

Topping coverage of Egypt in the international press this morning is US Vice President Mike Pence delaying his Middle East tour to January to attend the US tax vote. Plenty in the foreign press, including the AFP, continue to note that the delay comes amid a wave of anger in the region of the Trump administration’s decision to move the US embassy in Israel to Jerusalem.

Time, however, is running claims that 18 US citizens are imprisoned in Egypt and that trip could be a chance to see them released. “Their families and lawyers are hoping that Pence’s visit provides an opportunity to press the Egyptians for the prisoners’ release, as Trump did when Sisi visited the White House in April,” writes Elizabeth Dias.

Daesh “cannot be allowed to expand in Egypt,” Canada’s Defense Minister Harjit Sajjan said during a visit to the UAE, according to The National. “[Daesh] still has a presence in Sinai, and the responsibility to deal with this threat is in the hands of the Egyptian government,” Sajjan says. He also voiced concerns about returning extremist fighters and hopes to increase the UAE’s involvement in Canadian peacekeeping operations and to work with the UAE on its de-radicalization programs. Canada has troops in Sinai as part of the peace mission with the Multinational Force and Observers (MFO) since 1981.

No one anticipated how bleak the air quality situation in Cairo would get, according to a piece by UN Environment. “If the Nile is Cairo’s ailing heart, then polluted skies are its black lungs… The economy is taking a pummeling, with poor air quality knocking off at least one per cent of gross domestic product every year, according to the World Bank” and “roughly 40,000 people are dying from pollution-related problems across Egypt every year,” according to Breathe Life 2030, a joint initiative of the WHO and UN, among others.

However, there is some hope that Cairo could be “getting to grips with its bad breath,” with public transport projects moving at their fastest pace in almost a decade, tighter control over illegal agricultural waste fires, and entrepreneurs providing new innovative solutions. Soraya Smaoun, a senior air quality specialist at UN Environment, says “there is increasing awareness, and more knowledge on the issue of air quality on a global scale, despite the lack of data in some regions. We also know a lot more about solutions now… There are local solutions to monitor and manage air involving a wide range of stakeholders in sectors such as clean and sustainable transportation, waste management, cleaner industries to name a few. This is something that cities like Cairo can work on.”

Ibrahim Eissa and Mahmoud Saad are among the popular media figures set to return to TV this month after being taken off-air for criticizing the regime, Sarah El Shalakany writes for Al Monitor. “The regime would like to exploit their return prior to the presidential election to show that [President Abdel Fattah El] Sisi is OK with opposing stances,” El Shalakany writes.

Worth Watching

Saudi needs to up their CGI game: When you’re considered one of the richest states in the world, and a regional power vying for prestige, perhaps it is not wise use computer animation technology of 1980s-quality for your propaganda. But that’s exactly what the Saudis appear to have done with this god-awful video (watch, runtime: 6:06) of a hypothetical and fictional naval battle between it and Iran. Come on, guys. What would Sofia, your first robot citizen, say?

Diplomacy + Foreign Trade

The US is facing criticism after vetoing the Egypt-drafted UN Security Council resolution against proclaiming Jerusalem as Israel’s capital, Charlie May writes for Salon. “Even as the 14 other council members, many who are traditionally strong U.S. allies, told the U.S. it had jeopardized the opportunity for a peace process, and threatened stability in the region, Nikki Haley, the nation’s ambassador to the U.N. attempted to spin the situation on the Security Council.” Two days after the Security Council veto, the UN General Assembly adopted yesterday a resolution reaffirming the Palestinian people’s right to self-determination and to establish an independent State of Palestine, according to a UN release. 176 countries voted in favor of the motion, while seven — including the US, Israel, and Canada — voted against it. The motion is non-binding, and has been passed several times over the years.

Separately, the UN Security Council adopted another Egypt-sponsored resolution that allows for the delivery of aid across conflict borders in Syria, according to an official Foreign Ministry statement.

Energy

NREA looking to split into a holding company, regulator

The New and Renewable Energy Authority (NREA) is looking to restructure itself and split into two separate entities, Chairman Mohamed El Khayat said, according to Al Shorouk. NREA aims to split into a holding company and the second as a regulatory agency called the Sustainable Energy Authority. The holding company would be tasked with managing NREA’s assets effectively, El Khayat says.

Military Production Ministry in talks to fund EGP 2 bn PV solar panel factory

The Military Production Ministry is in talks with 10 banks and financing institutions to participate in funding its EGP 2 bn PV solar panel factory in Edfu, deputy head of the National Organization for Military Production Ahmed Mansour tells Al Borsa. No details were provided on which institutions the ministry is currently in talks with, or how much funding they would offer. As we noted last week, China’s TBEA Sunoasis announced it would put up 49% of the capital in the project. The factory is expected to supply the Benban solar park.

AfDB looking to offer funding for 600 MW solar power projects in Upper Egypt

The African Development Bank (AfDB) is looking into offering USD 25-30 mn in funding for solar power projects in Upper Egypt with a combined production capacity of 600 MW, AfDB Vice President Khaled Sherif tells Al Borsa. Two international companies have already submitted financing requests to the bank for the projects, which the Egyptian Electricity Transmission Company tendered last week.

Basic Materials + Commodities

Ukraine’s Nibulon to help with grain logistics in Egypt

Ukrainian grains and oilseeds producer Nibulon signed a memorandum of cooperation with UN FAO in Cairo “to increase the efficiency of Egyptian companies, engaged in production of cereals, their storage and transportation,” UkrAgroConsult reports. “the company will participate in industry trainings in Egypt and Serbia to improve grain storage and logistics for young professionals; international standards for grain sampling and analyzes for inspection services in Egypt.” “There is potential for improvement, but much effort is needed to improve grain storage, transportation, sampling and analysis, so that the people of Egypt and neighboring countries benefit from it,” Abdessalam Ould Ahmed, FAO assistant director-general and regional representative for Near East and North Africa, says according to World Grain.

Food producers exported USD 2.57 bn worth of food in first 11 months -FEC

Food exports from Egypt registered USD 2.57 bn in the first 11 months of the year, growing 4.6% y-o-y, according to the Food Export Council, as reported by Al Shorouk. The largest importer of Egyptian food products was Saudi Arabia, followed by Libya, Jordan, and the UAE, the report notes.

Health + Education

Pharma companies, Health Ministry negotiate alternatives to med price increases

Pharma companies have begun proposing to the Health Ministry several alternatives to raising med prices that would help manufacturers reduce their losses, chairman of the Federation of Egyptian Industries’ pharma division Ahmed El Ezaby tells Al Mal. The proposals include only raising prices on meds that were not affected by the last price hikes in January, while keeping the price of other meds stable. This would not affect diabetes, blood pressure, and cancer medications, among others. Other proposals include exempting raw materials from the value-added tax, and limiting future price hikes to over-the-counter drugs used for non-life threatening conditions. They also suggested increasing prices of some meds while reducing others to balance things out.

Tahya Misr, Saudi Arabia’s CAD Pharma cooperate on EGP 1 bn meds factory

The Tahya Misr Fund signed a cooperation agreement with Saudi Arabia’s CAD Pharma for a planned EGP 1 bn cancer medication factory, Chairman of the Tahya Misr Fund Mohamed El Ashmawy tells Al Borsa. The agreement will see the two sides study the market’s needs before moving ahead with constructing the factory. Ashmawy says the first EGP 300 mn production line is expected to be complete before the end of 2018.

Prosecutors orders arrest of former ACDIMA head for penicillin shortage

Financial crimes prosecutors ordered on Sunday the arrest of the former president of the Arab Company for Drug Industries and Medical Appliance’s (ACDIMA) Medhat Shaarawi, on charges of causing a penicillin shortage in the local market, Al Masry Al Youm reports. Shaarawi is also facing charges of profiteering and deliberately harming public funds. The Public Funds Prosecution had begun investigating Shaarawi last week after the Health Ministry accused him of halting an incoming shipment of penicillin and rerouting the shipment through a private company owned by one of his family members. Shaarawi has denied the allegations.

Real Estate + Housing

Tatweer Misr, Mostakbal sign cooperation for two projects worth EGP 33 bn

Real estate developer Tatweer Misr signed two agreements with Mostakbal for Urban Development worth a combined EGP 33 bn for projects spanning 325 feddans, Tatweer Misr announced yesterday (pdf). The first agreement, worth EGP 28 bn, is for a mixed use community spanning 325 feddans. The project will be completed in several phases over the course of 10 years. Tatweer Misr also signed a EGP 5 bn purchase agreement with El Mostakbal for a 90-feddan educational complex that will take eight years to complete. Tatweer Misr plans on officially launching the project in 2Q2018.

El Masria developing projects worth EGP 700 mn next year

El Masria Group for Real Estate Development is developing three projects next year worth EGP 700 mn, Sales Manager Omar Abdul Hadi said, according to Al Borsa. The projects include tourism and residential developments in October Gardens, the North Coast and Sheikh Zayed City. The company is also considering developing 50 feddans in the new administrative capital.

Egypt’s real estate market investment returns among best globally -Salman

The Egypt real estate market is growing and its investment returns are among the best in the world, property developers and executives told Khaleej Times. In 9M2017, Egypt’s real estate sector grew by 43% y-o-y, compared to a compound annual growth rate of 31% between 2013 to 2016, former investment minister and ARCO Development chairman Ashraf Salman says. “The real estate sector accounted for 15% of the total investment in the Egyptian economy in 2017, contributing 10% to the country’s overall gross domestic product,” Salman added.

Automotive + Transportation

Is Egypt considering introducing unified public transport pass?

Egypt is working with South Korean consultancy firms to introduce a unified pass for all means of public transportation, Al Monitor reports. The pass would be issued for a specific period of time, and would expire once that time period elapses. The new system aims to cut costs by reducing the number of tickets that are printed, and would also eliminate the possibility of re-selling used tickets. However, there are concerns that old habits die hard and Egyptians would find ways around the unified card system to avoid paying altogether. According to a professor of roads and bridges at Ain Shams University, 30% of railway riders did not pay for their tickets in 2016. The European Development and Reconstruction Bank and the Export-Import Bank of Korea signed a USD 350k grant agreement to finance the technical side of the system.

Consultancy contracts for 10 Ramadan-new capital electric train signed

The National Authority for Tunnels signed yesterday a contract with a Khatib & Alami-TPF Spain consortium for consultancy and management services for the electric train linking 10 Ramadan to the new administrative capital, Al Mal reports. The EUR 7.3 mn agreement covers consultancy services on all designs for the train, in addition to coordinating between various contractors and overseeing the construction of the rail line. The project is expected to cost USD 1.4 bn.

Banking + Finance

Al Tawfeek Leasing to begin offering three new financing services next year

Al Tawfeek Leasing Co. (AT Lease) plans to begin offering leasing services for SMEs, structured financing services, and establishing a factoring arm next year, CEO Tarek Fahmy announced on Monday, Al Borsa reports. The company is also set to sign a EGP 100 mn credit line with an unnamed bank within days under the CBE initiative, according to Fahmy. AT Lease is also currently studying how to ensure its planned factoring arm is Sharia-compliant. Book-building for AT Lease’s IPO of 24% of its shares began yesterday. Pharos Holding is the sole bookrunner and coordinator for the IPO.

AfreximBank to provide USD 150 mn to Egyptian factoring companies

The African Export-Import Bank (AfreximBank) is planning to provide Egyptian factoring companies with USD 150 mn in funding over the next five years, Managing Director of AfreximBank’s Intra-African Trade Initiative Kanayo Awani tells Daily News Egypt. The funding program, which began this year, will expire in 2021. The bank is currently in talks to provide the Egyptian Factoring Association with funding to finance SMEs in Egypt.

Egypt Politics + Economics

House of Representatives approves German loan agreements worth EUR 62 mn

The House of Representatives approved yesterday two German loan agreements worth a combined EUR 62 mn, Ahram Gate reports. The agreements include a EUR 50 mn loan from German development bank KfW for a renewable energy project and to support vocational training. The second funding agreement, worth EUR 12 mn, was signed with German development agency GIZ to provide technical and professional assistance for SME projects and the government’s administrative reform and dual education programs.

National Security

Attack on Al Arish airport results in death of a military officer

A mortar attack on Al Arish airport resulted in the death of a military officer and the injury of two others, according to an official Armed Forces statement. The attack also damaged a helicopter and came during the Interior and Defense Ministers’ visit to the area, although neither of them were hurt, a security source told Reuters. The Armed Forces statement added that security forces dealt with the source of the attack and secured the area.

On Your Way Out

Maspero has refused to run a Vodafone Egypt advertisement featuring puppet Abla Fahita, according to the Egypt Independent. The state broadcaster took particular issue with the song in the commercial playing on the phonetics of language not suitable for children. The song is about internet problems everyday Egyptians face, particularly internet bundles ending too quickly. The inevitable lewd references are also made causing the folks at Maspero to call them out as scandalous. Judge for yourself (watch, runtime 1:59).

The Market Yesterday

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EGP / USD CBE market average: Buy 17.7699 | Sell 17.8699
EGP / USD at CIB: Buy 17.77 | Sell 17.87
EGP / USD at NBE: Buy 17.69 | Sell 17.79

EGX30 (Tuesday): 14,678 (-0.3%)
Turnover: EGP 1.1 bn (2% above the 90-day average)
EGX 30 year-to-date: +18.9%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session down 0.3%. CIB, the index heaviest constituent closed down 0.7%. EGX30’s top performing constituents were Sidi Kerir Petrochemicals up 8.9%; AMOC up 3.8%; and Heliopolis Housing up 1.9%. Yesterday’s worst performing stocks were Domty down 5.4%, Porto Group down 2.9%; and Emaar Misr down 2.2%. The market turnover was EGP 1.1 bn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +26.3 mn
Regional: Net Short | EGP -50.5 mn
Domestic: Net Long | EGP +24.2 mn

Retail: 67.3% of total trades | 65.8% of buyers | 68.9% of sellers
Institutions: 32.7% of total trades | 34.2% of buyers | 31.1% of sellers

Foreign: 12.5% of total | 13.7% of buyers | 11.2% of sellers
Regional: 11.7% of total | 9.4% of buyers | 14.1% of sellers
Domestic: 75.8% of total | 76.9% of buyers | 74.6% of sellers

WTI: USD 57.46 (+0.52%)
Brent: USD 63.77 (+0.57%)
Natural Gas (Nymex, futures prices) USD 2.72 MMBtu, (-1.06%, January 2018 contract)
Gold: USD 1,265.1 / troy ounce (-0.03%)

TASI: 7,199.41 (+0.11%) (YTD: -0.15%)
ADX: 4,367.11 (-0.69%) (YTD: -3.94%)
DFM: 3,359.18 (-0.37%) (YTD: -4.86%)
KSE Weighted Index: 399.13 (-0.16%) (YTD: +5.01%)
QE: 8,522.83 (+3.79%) (YTD: -18.34%)
MSM: 5,070.35 (-0.34%) (YTD: -12.32%)
BB: 1,268.89 (+0.26%) (YTD: +3.97%)

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Calendar

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.

28-31 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), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2018 Enterprise Ventures LLC.