Tuesday, 16 January 2018

Egyptian stocks above pre-float USD valuations

TL;DR

What We’re Tracking Today

EFG Hermes kicked off its second Egypt Day conference last night with the firm’s annual CEO Dinner at the Four Seasons Nile Plaza. The three-day conference will bring top state officials — including President Abdel Fattah El Sisi, CBE Governor Tarek Amer, acting Prime Minister Mostafa Madbouly, and members of the Cabinet’s economic group — together with 39 international investors with aggregate assets under management exceeding USD 10 tn in value. “Rising investor confidence and an increasing appetite for investment opportunities in Egypt have been a recurring theme at our gatherings since the initiation of the government’s economic reform program,” EFG Hermes CEO Karim Awad said. “His Excellency the President, and top government officials’ interest to directly meet with investors reflects that we are heading into 2018 with a positive outlook and a hands-on government bent on delivering positive results.”

Prime Minister Sherif Ismail has reportedly begun working from home as he gears up to return to his office within a week, government sources say, according to state-owned Al Ahram. Acting Prime Minister Mostafa Madbouly has been bringing Ismail up to speed on developments that have unfolded since Ismail went on medical leave back in November, the sources say. Ismail might also sit in on the Egyptian-Ethiopian Joint Committee meeting scheduled for Thursday.

A bunch of interesting news from our neighborhood caught our eye this morning:

Morocco’s loosening of the peg on its currency on Monday apparently went by smoothly, with the MAD strengthening, according to Bloomberg. Bank Al Maghrib set the reference rate at MAD 9.2184 per USD 1, 0.2% stronger than Friday’s, even after the central bank widened the MAD fluctuation band to 2.5% above or below its peg. The regulator allocated less than a fifth of the USD it offered to sell at an auction earlier Monday, a sign that banks and businesses aren’t panicking, according to Banque Marocaine pour le Commerce et l’Industrie.

Historic exit for regional oil powerhouse: Shell announced on Monday it is selling a stake in the West Qurna 1 oil field in Iraq to Japan’s Itochu, effectively giving up on its last oil fields in Iraq, WSJ reports. Shell’s exit marks one of the final chapters in a slow pullback from the Middle East’s oil sector which it helped build into a global powerhouse. Shell plans to keep its natural gas interests in the region, including Egypt, Qatar, Oman, and Iraq.

Samsung Electronics is planning on doubling revenues from its African markets so they account for 20% of their global sales in the next five years, head of the firm’s Africa business Sung Yoon told Reuters. Yoon added that demand for larger TVs and mobile screens coupled with increased investment in telecommunications in the continent is expected to boost appetite for their products.

The UAE said Qatari fighter jets intercepted one of its commercial planes, “in what would mark an escalation in the feud straining ties among Gulf Arab monarchies,” Bloomberg reports. The act “is a flagrant threat to the safety of civil aviation and a clear violation of international law,” the UAE’s official news agency says. Qatar denies the incident took place, with Sheikh Saif Al Thani, head of the Qatari government communications office, saying the claim is “completely untrue.”

..Trump can’t seem to make up his mind on which side he’s on: US President Donald Trump on Monday thanked the ruler of Qatar for “action to counter terrorism and extremism in all forms,” suggesting a warming of ties between the two countries, Reuters reports.

What We’re Tracking This Week

The Transport Ministry will announce its new pricing scheme for railway tickets “within days,” Al Masry Al Youm reports. Transport Minister Hisham Arafat had said last week that ticket prices would climb 20-25% over multiple phases. Meanwhile, sources from the National Railway Authority (NRA) said the new prices for overnight trains came into effect yesterday, with prices ranging from EGP 350- 550 for Egyptians, and USD 70-110 for foreigners.

We’ll be announcing the results of our end-of-year survey on Thursday. We asked you to help us gauge how well business went in 2017, what the biggest challenges of the year were, and where you see FX rates stabilizing, among other things. 25 people participants will get our giveaway package consisting of Enterprise swag and our first-ever Enterprise-branded batch of coffee.

On The Horizon

US Vice President Mike Pence will kick off his Middle East tour with a stop in Egypt on 20 January, where he will meet with President Abdel Fattah El Sisi. A high-ranking delegation has already arrived in Cairo to prepare for Pence’s arrival. Pence will stop in Jordan and Israel on his tour of the region, where counterterrorism and Jerusalem will be key discussion points.

Arab League member states are scheduled to meet less than two weeks after Pence’s visit to discuss how best to counter US President Donald Trump’s Jerusalem declaration.

Arqaam Capital will hold its Egypt Investors Conference 2018 on 22 January. The conference will host senior C-Suite executives from some 20 listed Egyptian companies for one-on-one meetings at the Vineyard Hotel, Cape Town, South Africa.

CI Capital is also holding its MENA Investor Conference on 30 January. The conference offers 75 listed corporates from 6 countries across MENA the chance to meet face to face with 75 global buy-side asset managers.

The 49th Cairo International Book Fair will run from 26 January until 10 February, with some 848 publishers from 27 countries participating this year.

Enterprise+: Last Night’s Talk Shows

The talking heads busied themselves with a range of topics, with no single issue dominating the conversation on the airwaves last night.

Hona Al Asema’s Lamees Al Hadidi spoke to Trade and Industry Minister Tarek Kabil about the planned 3.1 mn sqm textile production complex, which is the fruit of a partnership between 25 Chinese textile companies that export to Egypt and a holding company bringing together businessmen who import Chinese products. The feasibility studies on the complex are still underway, and that it will mostly be funded through foreign investments (we have more on the project in the Speed Round, below) (watch, runtime: 5:21).

Chairman of Beshay Steel Kamal Beshay also phoned in to tell Lamees about his company’s new USD 2 bn factory in Sadat City, which President Abdel Fattah El Sisi inaugurated yesterday. The factory, whose construction began in 2008 but was delayed due to power shortages, will produce railway rails and reinforcement steel that will be sold domestically and exported (watch, runtime: 7:36).

Lamees also sat down with Social Solidarity Minister Ghada Wali about her ministry’s efforts to combat drug addiction in Egypt, particularly among drivers. Of around 50,000 truck drivers tested for drug abuse, 24% were found to be addicts, according to Wali. The ministry enrolled these drivers to rehabilitation programs and managed to push the figure down to 17%. The Cairo Metro Company and the National Railway Authority are also set to carry out drug tests on train conductors, Wali said (watch, runtime: 23:08).

Al Hayah Al Youm’s Tamer Amin hosted newly appointed Deputy Health Minister Tarek Tawfik, who delved into his strategy to curb population growth in Egypt, which he said is currently growing at a rate of 2.6 mn individuals per year. The ministry is planning to raise awareness of family planning, particularly women in rural villages with little knowledge of contraception methods, through outreach campaigns (watch, runtime: 21:20).

Economic mastermind Amr Adib, meanwhile, presented his ingenious strategy to repay Egypt’s piling public debts, which currently is around USD 800 per capita. The Kol Youm host suggested that the Tax Authority should collect USD 800 from each “financially capable” citizen whose income exceeds a certain threshold, which would allow the state to repay at least a quarter of the country’s debts (watch, runtime: 5:57). We urge Adib to leave the economic stuff to his better half.

Speed Round

Speed Round is presented in association with

Egyptian stocks are above pre-float USD valuations: Healthcare and pharma stocks are poised to be the hottest picks on the EGX in 2018, CI Capital Asset Management money manager Khaled Darwish tells Bloomberg. Egyptian stocks have already surpassed the pre-EGP float valuations and the EGX30 advanced more than any other in the Middle East in 2017. Darwish is bullish on healthcare and pharma stocks as Egypt expands its universal healthcare program and, overall, “positive sentiment toward equities will continue this year as many stocks trade at attractive valuations, while conditions in the Egyptian economy are supportive.” In comparison, Darwish is a bit more cautious on real estate and banking stocks.

IPO WATCH- BPE submits documents for February IPO: BPE Partners has submitted the paperwork for initial public offering to the Financial Regulatory Authority (FRA) for approval, Chairman Hazem Barakat said yesterday, Al Mal reports. The company is planning to list around 35% of its shares on the EGX by the second half of February to raise c. EGP 450 mn in liquidity to use for a number of investment and expansion plans in fields including renewable energy and non-banking financial services, Barakat added. BPE has tapped Sigma Capital to manage the listing, Grant Thornton to conduct a fair value assessment, and Zaki Hashem & Partners as legal counsel. BPE is hoping to start trading on the stock exchange by early March.

IPO WATCH- El Garhy Steel’s planned IPO of 25% of its shares has been pushed back to 2H2018, Chairman Gamal El Garhy told Amwal Al Ghad on Sunday. The company had initially been gunning for sometime in 1Q2018, according to statements from El Garhy last year. It would appear that the company had settled on an investment bank to manage the listing, but El Garhy did not name the firm. The company plans to use the proceeds of the listing to boost its production capacity to 2.4 mn tonnes. “We’re keen to pump new investments in the local market to best benefit from the Ministry of Trade’s ongoing decree to impose temporary anti-dumping duties on rebar from China, Turkey, and Ukraine,” said El Garhy. He had previously stated that the company hopes to raise around EGP 3.6 bn from the listing.

Abraaj hires EFG, Citigroup to manage IPO or sale of its North African hospital business: In a confirmation that Abraaj Group is indeed planning to divest stakes in its regional healthcare companies, the Dubai-based private equity firm has tapped EFG Hermes and Citigroup Inc. “to manage an initial public offering or sale of its North African hospitals business,” unnamed sources with knowledge of the matter tell Bloomberg. The company plans to pursue either an IPO or a direct stake sale with the hopes of finalizing procedures in 1H2018, they add. Abraaj Group owns “a dozen hospitals and clinics in Egypt, Tunisia, and Morocco” worth a collective USD 500 mn. We had noted previous reports that the company was mulling a listing in either London or the New York.

Egypt can once again become an energy exporter and “build on its existing role as one of the most important trading hubs in the region, ideally placed to link western and eastern markets,” Nick Butler writes for The Financial Times. “Egypt’s opportunity is that it finds itself at the crossroads of the emerging international trade in natural gas,” Butler writes. The potential collaboration on natural gas export between Egypt, Cyprus, Israel, and even potentially from Lebanon leaves Turkey as the loser regionally after having “destroyed its opportunity to provide an export route for gas from Cyprus by trying to link trade to a settlement of the island’s longstanding territorial division.” Butler insists that Egypt’s role will be vital in any major development, saying “in the Middle East nothing is ever simple and there will many a slip before the new pattern of trade is in place. But if the eastern Mediterranean is to be developed, Egypt’s role as the new regional trading hub looks indispensable.”

On a related note, EGAS is preparing to hold a tender for LNG shipments this month, EGAS sources tell Al Shorouk on Monday. The shipments are expected to cover Egypt’s LNG needs for 2Q2018, said the source. No word from the source on the number of LNG shipments or the date of the tender. Egypt had bought 12 LNG shipments for 1Q2018 — a significant drop from its usual rate as the country looks to become a net energy exporter by the end of the year. The state is expected to buy 80 shipments by the end of FY2017-18.

Egypt’s non-oil exports rose 12% y-o-y to USD 20.5 bn in 2017, according to a report from the Trade and Industry Ministry’s General Organization for Export and Import Control picked up by Youm7. Chemicals and fertilizer exports saw the biggest gain during the past 12 months, growing 32% to USD 4.4 bn, followed by exports of ready made clothes (growing 13%) and engineering and electronics exports (up 11%).

Russian carrier Aeroflot will begin operating two weekly flights from Moscow to Cairo as of 3 February, Youm7 reports. The airline will offer the flights every Wednesday and Saturday, while EgyptAir will operate three weekly flights between the two capital cities on Sundays, Tuesdays, and Thursdays, a Cairo Airport Company source tells the newspaper. Russian President Vladimir Putin had authorized the resumption of air travel between Moscow and Cairo earlier this month, after the two countries signed a civil aviation security protocol. The status of charter flights, the resumption of which is contingent on additional security measures, will be discussed at an April 2018.

“Egypt doesn’t conspire or meddle in anyone’s internal affairs,” President Abdel Fattah El Sisi said in a public address yesterday, where he attempted to send a reassuring message to both Ethiopia and Sudan that Egypt is unwilling to see tensions escalate further into conflict, keen as it is on “maintaining good relations” with its neighbors (watch, runtime 3:58). “We are not prepared to go to war against our brethren or anyone else for that matter. I am saying this as a clear message to our brothers in Sudan and Ethiopia,” he added. El Sisi also had a message to the talking heads who have been inflaming the situation since Sudan and Ethiopia refused to ratify the impact studies on the Grand Ethiopian Renaissance Dam late last year. El Sisi’s comments are making the rounds in international media, with coverage from The Associated Press, Reuters, Xinhua, and Business Recorder.

His statements come as he is due to meet with Ethiopian Prime Minister Hailemariam Desalegn on Wednesday, who is in town for a three-day visit that wraps up on Friday. On the agenda is an Egyptian-Ethiopian Joint Committee meeting on Thursday that will tackle the issues with the dam. Desalegn will be accompanied by Foreign Minister Workneh Gebeyehu, who was in Khartoum earlier this week to meet with his Sudanese counterpart Ibrahim Ghandour to discuss, among other things, the ongoing dispute with Cairo over border territories.

Meanwhile, Eritrean President Isaias Afwerki reaffirmed that Egypt has not mobilized its troops to Eritrea’s border with Sudan after Khartoum ordered the closure of the border, Sunatimes reports. Afwerki also took note of the Suakin island agreement, saying that Turkish President Recep Erdogan “needs to make his intentions clear as he widens a Red Sea presence.”

Is the Cold War on the Nile a symptom of the GCC crisis? It is evident that “the GCC crisis has already spread to the Nile basin and the Horn of Africa, SOAS research associate Ahmed Adam writes for the The Sudan Tribune. Egypt and Saudi Arabia categorize Turkey’s agreement with Sudan regarding the Suakin island as another move by the “Turkey-Iran-Qatar axis” to undermine the stability and security of the so-called “Sunni moderate alliance,” which includes Saudi Arabia, Egypt, and the UAE. Adam notes that Ethiopia, just like Sudan, has become closer to Qatar, while Eritrea, Ethiopia’s regional rival, has taken the side of Saudi Arabia, Egypt and UAE. “Consequently, the region may be pushed into new proxy conflicts in the near future,” he says.

A subsidy cut by any other name? The Electricity Ministry will introduce a new maintenance fee to users’ monthly bills as of July, unnamed officials tell Daily News Egypt. Proceeds will then be allocated to the support and development of the power sector, and particularly to improving energy efficiency in public buildings. The energy efficiency fee will be calculated based on the price per kWh once its implementation is approved by the Egyptian Electrical Utility and Consumer Protection Regulatory Agency. It is no secret that the government is planning to continue moving forward with energy subsidy cuts when the new fiscal year rolls around in July, and the move could be a harbinger of higher prices to come.

And just so we no longer have excuses for not paying our bills,  the Electricity Holding Company plans to introduce online payments for electricity bills, according to Al Bawaba.

President Abdel Fattah El Sisi signed into law on Monday the Universal Healthcare Act, the government’s EGP 600 bn health coverage plan and a key piece of social policy for the Ismail cabinet. The bill will set premiums for employers of 4% of each employee’s monthly salary, while employees will pay premiums of only 1% of their salary into the system. It also sets a 0.25% tax on sales revenues for every company operating in Egypt to fund the system. Implementation of the law, which was published on the Official Gazette yesterday, is expected to begin in July and will span the Canal cities, according to previous statements by Finance Minister Amr El Garhy.

LEGISLATION WATCH- The House of Representatives’ Legislative Committee completed yesterday its review of amendments to the Criminal Procedures Act, Ahram Gate reports. The committee postponed to a later date its discussion and vote on contentious articles of the legislation pertaining to pre-trial detention. The amendments, which Cabinet had approved in October, introduce new avenues of mediation outside the court system, including for murder cases. Other issues addressed include witness protection and the regulation of no-fly and airport arrival watchlists.

The House general assembly also signed off on the third USD 1.15 bn tranche of the World Bank’s USD 3 bn facility to support Egypt’s economic reforms, Al Shorouk reports. Also rubber-stamped was a EUR 186 mn loan from the European Bank for Reconstruction and Development to help upgrade sewage and wastewater systems in Fayoum, Ahram Gate reports.

House Speaker Ali Abdel Aal also referred a basket of legislation and agreements to sub-committees for review, Al Masry Al Youm reports. These include amendments to an agreement Egypt signed with the International Civil Aviation Authority in 2016 to reduce carbon dioxide emissions from the aviation sector, which was referred to the Civil Aviation and Tourism Committee, an agreement signed with the UN Food and Agriculture Organization to use solar power in running irrigation networks.

Gov’t announces USD 2 bn textiles city: Trade and Industry Minister Tarek Kabil announced plans yesterday to establish Egypt’s largest textile project on a 3.1 mn sqm area in Sadat City, Al Mal reports. The project is expected to cost USD 2 bn to develop and will house 568 factories. 87% of the factories will be geared towards foreign investors, with the project expected to generate some USD 9 bn in annual revenues once it’s fully operational and completed by 2020, according to Kabil. President Abdel Fattah El Sisi also commented on the textile city, saying that the government could foot up to 50% of funding for the project.

The Higher Education Ministry is looking to attract EGP 35 bn in investments to finance the construction of new private and public universities, Higher Education Minister Khaled Abdel Ghaffar said, according to Al Borsa. The move is meant to sate demand for universities as the number of students enrolled in universities is expected to reach 4.2 mn by 2030, up from 3 mn currently. The government has recently been taking steps to attract foreign universities and diversify the educational system through new legislation.

Mohamed Anwar Sadat announced he will not be running in the presidential elections in March, The Associated Press reports. Sadat says the political “climate” isn’t conducive to campaigning and that he “‘will not contest a lost battle’ while also citing emergency laws and a ban on demonstrations as further reasons for his decision.” Sadat’s political party, Reform and Development, will consider supporting other candidates, he told reporters. Sadat hinted that he is mulling a “full campaign in 2022,” granted President Abdel Fattah El Sisi is re-elected this year and therefore ineligible to run for a third term, The Guardian says.

Meanwhile, he National Elections Commission (NEC) set yesterday a cap on campaign donations to presidential candidates of up to 2% of the total allowed campaign expenditures, Al Mal reports. The NEC had set a ceiling of EGP 20 mn on campaign spending for the first round and EGP 5 mn for the runoffs, meaning donations must not exceed EGP 400k and EGP 100k for the two rounds, respectively. The NEC also selected Banque Misr and the National Bank of Egypt as the two banks where candidates may set up the special accounts through which they are required to do all their campaign spending. All contributions must be deposited in these accounts, and the banks and candidates are required to inform the NEC of all transactions through the accounts to allow the NEC to monitor spending.

Separately, a group of lawyers have filed a legal complaint requesting the extension of the deadline by which presidential hopefuls are required to submit their nomination documents, Al Shorouk reports. The lawyers say that the 10-day window the NEC has set is insufficient to allow would-be candidates to gather the 25,000 signatures required to be eligible for nomination, and claim that the time limit is hindering their ability to qualify for the race.

British construction firm Carillion collapsed yesterday after banks refused the firm further financing, Reuters reports. The 200-year-old firm went into mandatory liquidation after banks refused to restructure liabilities upwards of GBP 2 bn. Carillion becomes the first corporate giant to fail in the UK in 10 years. The UK government was forced to guarantee some of their ongoing public works.

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The Macro Picture

The share of renewables in the Middle East energy mix is forecast to triple to 20.6% by 2035, with renewables capacity reaching 100 GW, up from 5.6% (16.7 GW) in 2016, according to Siemens’ Middle East Power: Outlook 2035 report (pdf). Solar power is expected to account for additions of around 61 GW by 2035. The report also highlights significant potential for wind power generation in Saudi Arabia and Egypt, but notes that this potential is not entirely reflected in the moderate capacity additions expected.

Natural gas to remain king: The report predicts that by 2035 the Middle East will require a total of 483 GW of power generation capacity. As such and despite the rise in renewables, natural gas will remain the top contributor to the energy mix in the region representing 60% of installed capacity through 2035. "With economic diversification and population growth accelerating, the growth in power demand in the region – approximately 3.3 percent per year – will be realized predominantly through increasingly efficient natural gas-fired power plants," added the report. Highly efficient combined cycle plants (like the Siemens plants in Burullus, Beni Suef and the new capital) are expected to dominate the regional electricity landscape by 2030.

Egypt in the News

Topping coverage of Egypt this morning is Mohamed Al Sadat’s withdrawal from the presidential race. The foreign press appeared shocked at the press conference, where it was widely expected that he would announce his candidacy.

Meanwhile, he Guardian’s editorial board penned a scathing opinion piece bashing the elections and the state of democracy in Egypt, which it says “is at present a sham.” The lack of real competition against President Abdel Fattah El Sisi “is a profoundly depressing but wholly expected turn of events in Egypt,” and will likely result in the elections being no more than a poll that will keep El Sisi in power, the writers say.

The Egypt-bashing continued with the NYT, which has declared that Tuesday is now “execution day” in Egypt, citing 22 executions taking place in Egypt on three successive Tuesdays since December. Eltahawy claims the judiciary to be far from impartial, criticizing military tribunals in particular. Her stance is directed against the death penalty in principle, believing it is “state-sanctioned murder” and calling it “unjust and barbaric, everywhere.”

Daesh in Sinai are battered and weakened but still dangerous, Zvi Mazel writes for The JPost. Mazel writes of a number of internal issues plaguing the terrorist organization but does not expect it to disappear anytime soon as its “members are fueled by a never-ending sense of divine mission.”

Cairo is heating up as a destination for epicures, mostly thanks to twists given to traditional street eats, according to the Independent. We locals know that the best food in town will often be found in small alleyways and behind inconspicuous doors but new businesses like Bellies En-Route, which offers a food tour of the city, and Cairo Spots, which catalogues the best chow spots, are putting Egyptian cuisine on the map. While old school cuisine will always be the foundation for the city’s food scene, it is newer establishments like Zooba and Fasahet Somaya putting a contemporary style on traditional dishes that is leading the city’s resurgence as a foodie destination.

On Deadline

The performance of some of the ministers replaced in Sunday’s Cabinet shuffle was hindered by factors beyond their control, including bureaucracy and other issues within their respective ministries, Emad El Din Hussein writes for Al Shorouk. Many of these ministers were exerting significant effort and actually had a well-formulated vision for their ministries, but the environment in which they worked make it difficult for any minister — regardless of their effort — to make good progress. Hussein stresses that any government official will be unable to do their job unless these issues are resolved.

Diplomacy + Foreign Trade

A delegation headed by top presidential aide Ibrahim Mahlab is heading to Guinea today to develop the country as an export market for Egypt’s goods, Vice President of the Federation of Egyptian Industries’ furniture division Abdel Halim Al Iraqi tells Al Borsa. The delegation will be focused on discussing the potential establishment of a logistics center in Guinea from which Egypt can export its products to the remainder of the continent. Mahlab will be accompanied by representatives from the health and education ministries, as well as companies from various industries.

SMEs Union head Alaa El Saqty discussed with Korean-Egyptian Development Association (KEDA) Chairman Kang Wong potential cooperation on current and future projects, according to AMAY. Wong said that KEDA is keen on participating in the financing, producing, and manufacturing of industrial park projects.

Israel reportedly warned Egypt last week before it destroyed a cross-border tunnel belonging to Hamas on Saturday, which ran from Gaza into Israel and Egypt, Haaretz reports (paywall). “Israel has now destroyed four tunnels in less than three months, a key goal after Hamas sent fighters through attack tunnels in the 2014 Gaza war,” the newspaper says.

Energy

EETC to issue tender for 500 MW solar power projects in Aswan and Minya

The Egyptian Electricity Transmission Company (EETC) is preparing to issue a global tender at the end of January for 500 MW solar power plants in Aswan and Minya, Electricity Ministry sources tell Al Mal. The projects will be developed under a build-own-operate (BOO) framework, with the maximum feed-in tariff set at USD 0.038 per kWh, they added. In related news, the EETC issued a tender in December for a 20 MW, USD 70 mn solar power station in Hurghada that is being funded by the Japanese International Cooperation Agency. The agency stipulated that the project must be awarded to a Japanese or an Egyptian-Japanese consortium and stipulated that the Japanese side hold a stake of no less than 50%, sources tell the newspaper.

Oil Minister meets with BP delegation

Oil Minister Tarek El Molla met with a delegation from BP headed by CEO of Regional Operations Andy Wood to review investments in the sector, according to AMAY. The two discussed Egypt’s strategy to become a regional hub for oil and gas and further investment opportunities for BP.

Basic Materials + Commodities

Price-printing policy applies to fruits and vegetables, says Supply Ministry

The Supply Ministry’s price-printing policy applies to fruit and vegetable products sold by all traders and street vendors, ministry spokesperson Mamdouh Ramadan tells Al Shorouk. Ramadan noted that street vendors are unlikely to receive official receipts from farmers for their products, but that this should not prevent the vendors from clearly displaying prices with a sign or label.

GASC receives offers in soy and sunflower oil tender

 The General Authority for Supply Commodities (GASC) has received offers for a soy and sunflower oil tender issued yesterday, Cairo-based traders tell Business Recorder. Aston presented the best and lowest price for sunflower oil, offering up 11,500 tonnes at USD 793 per tonne. GASC is looking to see the oil shipments come in between 1-15 March.

Health + Education

Health Ministry considers World Bank USD 500 mn loan to treat Hep C patients

The Health Ministry is studying an offer from the World Bank for a USD 500 mn loan to support the provision of treatment for Hepatitis C, Health Minister Ahmed Rady said yesterday, Al Borsa reports. Rady said the ministry requires a total USD 378 mn to cover its needs of the treatment until 2020 but is treading carefully where this new loan is concerned as it doesn’t seek to further burden the state’s finances or add to its debts.

Real Estate + Housing

Orascom Development plans to use proceeds of Tamweel sale to reduce EGP 1 bn debt burden

Orascom Development plans to use the proceeds of the sale of Tamweel Financial Holding to lower its EGP 1 bn debt-burden, the company’s IR Director Sara El Gawahergy tells Al Mal. She had previously stated that the company is looking to exit Tamweel because it does not fit with its core business. As we noted last October, the company had received four offers for the company — one from a consortium made up of European-Egyptian investors, while the other three offers were from local investors, according to the newspaper.

Heliopolis Housing denies partnering with Arab Cotton Ginning

Heliopolis Housing denied reports it is planning on setting up a real estate company in partnership with the Arab Cotton Ginning Company, according to a bourse statement. The company says the circulated news is false and was not provided by its management.

Tourism

Tourism Minister forms crisis committee to resolve private sector challenges

In her first order of business, Tourism Minister Rania Al Mashat formed a crisis committee of industry players to develop a strategy to address tourism’s private sector issues, Red Sea Tourism Investors Association President Kamel Abu Ali told Al Shorouk.

Other Business News of Note

Health Ministry denies Lactalis’ salmonella-contaminated baby products

Egypt is not among the countries from which French dairy group Lactalis has recalled its baby milk product, Celia, due to salmonella contamination, the Health Ministry announced yesterday, Youm7 reports. The Consumer Protection Agency (CPA) had met earlier yesterday with producers and importers of Lactalis products to confirm that Celia is not sold in Egypt, CPA head Atef Yacoub tells Al Mal. As we noted yesterday, the CPA has been investigating Lactalis’ domestic partner, Lactis-Halawa, for allegations it has sold contaminated dairy products. Yacoub had confirmed that the investigation is not connected to the salmonella contamination.

President Abdel Fattah El Sisi inaugurates several projects

President Abdel Fattah El Sisi inaugurated several projects during his visit to Sadat City yesterday,according to an Ittihadiya statement. The projects, whose investment values were not revealed, included two hospitals, a sports city in Port Said, and the Zewail City for Science and Technology, among others.

Egypt Politics + Economics

MP submits inquiry into differences between actual and estimated costs in FY2017-18 budget

MP Mohamed Fouad says he submitted an official inquiry to House Speaker Ali Abdel Aal yesterday about the differences between the estimated and actual costs of items in the FY2017-18 state budget. The price of oil, for example, was set at an average USD 55 per barrel for the fiscal year, but has now climbed to USD 70 per barrel, which Fouad tells Al Mal would cost state coffers an additional EGP 45 bn. The projected exchange rate was also set at EGP 16 per greenback, but the actual rate appears to be stabilizing at an average EGP 17.7 per USD, which would require an unaccounted for EGP 25 bn, he added. The memo was addressed to Prime Minister Sherif Ismail and Finance Minister Amr El Garhy, and comes less than a week after El Garhy announced that Egypt’s budget deficit has narrowed in 1H2017-18, coming in at 4.4% of GDP, compared to 5% in the same period last year.

Two policemen referred to criminal court for death of detainee

Prosecutors referred two policemen to a criminal court on Monday for allegedly beating to death a detainee after he was arrested on 5 January, judicial sources told Reuters. Mohamed Abdul Hakim, known as Afroto, was being held for charges in a drug case, but prosecutors say he was illegally detained. Afroto’s death had caused riots outside the police station where he was held.

On Your Way Out

Please just think of free tourism publicity when you read this: Kourtney Kardashian is planning another trip to Egypt with boyfriend Younes Bendjima, according to Hollywood Life. The reality TV star, who was here back in August, is apparently guilt-ridden that she took the trip without her three kids.

Leonardo DiCaprio is slated for a role in Quentin Tarantino’s new untitled film about murderer and cult leader Charles Manson, according to Rolling Stone. The movie is reportedly set around the infamous Manson family murders of the late 60s. This would be the second film bringing DiCaprio and Tarantino together after Django Unchained in 2012, and the first project DiCaprio will work on since he picked up his Academy Award for The Revenant in 2015. If you are as excited for this one as us, cool your jets because the release date isn’t until August 2019.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6651 | Sell 17.7651
EGP / USD at CIB: Buy 17.66 | Sell 17.76
EGP / USD at NBE: Buy 17.65 | Sell 17.75

EGX30 (Monday): 15,128 (-0.8%)
Turnover: EGP 1.6 bn
EGX 30 year-to-date: +0.7%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.8%. CIB, the index heaviest constituent closed down 1.0%. EGX30’s top performing constituents were Domty up 1.7%; Pioneers Holding up 0.8%; and Telecom Egypt up 0.5%. Yesterday’s worst performing stocks were Egyptian Iron and Steel down 2.9%; AMOC down 2.0%; and Abu Dhabi Islamic Bank down 1.9%. The market turnover was EGP 1.6 bn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +228.4 mn
Regional: Net Long | EGP +94.0 mn
Domestic: Net Short | EGP -322.4 mn

Retail: 45.1% of total trades | 49.2% of buyers | 41.0% of sellers
Institutions: 54.9% of total trades | 50.8% of buyers | 59.0% of sellers

Foreign: 21.3% of total | 28.5% of buyers | 14.1% of sellers
Regional: 11.5% of total | 14.5% of buyers | 8.5% of sellers
Domestic: 67.2% of total | 57.0% of buyers | 77.4% of sellers

WTI: USD 64.81 (+0.79%)
Brent: USD 70.24 (+0.53%)

Natural Gas (Nymex, futures prices) USD 3.13 MMBtu, (-2.16%, February 2018 contract)
Gold: USD 1,340.5 / troy ounce (+0.42%)

TASI: 7,483.23 (+0.59%) (YTD: +3.56%)
ADX: 4,601.95 (+0.37%) (YTD: +4.63%)
DFM: 3,495.81 (-0.49%) (YTD: +3.73%)
KSE Weighted Index: 420.34 (+0.44%) (YTD: +4.71%)
QE: 8,946.97 (-2.48%) (YTD: +4.97%)
MSM: 5,069.25 (-0.4%) (YTD: -0.59%)
BB: 1,324.1 (+0.36%) (YTD: -0.57%)

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Calendar

15-17 January (Monday – Wednesday): EFG Hermes Annual Egypt Day Conference, Four Seasons Nile Plaza, Cairo

22-23 January (Monday-Tuesday): Arqaam Capital Egypt Investors Conference 2018, The Vineyard Hotel, Cape Town, South Africa.

25 January (Thursday): 25 January revolution / Police Day, national holiday.

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

30 January-01 February (Tuesday-Thursday): CI Capital’s MENA Investor Conference, Four Seasons Nile Plaza, Cairo.

05 February (Monday): Egypt’s Emirates NBI PMI reading for January announced.

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.

05-07 March (Monday-Wednesday): EFG Hermes’ One on One Conference 2018, Atlantis, The Palm, Dubai, UAE.

28-31 March 2018 (Thursday-Sunday): Cityscape Egypt, Cairo International Convention Centre, Cairo

08 April (Sunday): Easter Sunday, national holiday.

09 April (Monday): Sham El Nessim, national holiday.

24-25 April (Tuesday-Wednesday): Renaissance Capital’s 3rd Annual Egypt Investor Conference, Cape Town, South Africa.

25 April (Wednesday): Sinai Liberation Day, national holiday.

01 May (Tuesday): Labour Day, national holiday.

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

15 May (Tuesday): Expected date for the start of Ramadan begins (TBC).

15-17 June (Friday-Sunday): Eid Al Fitr (TBC), national holiday. (Look for possible Monday off given the first day falls on a Friday.)

21-25 August (Tuesday-Saturday): Eid Al Adha (TBC), national holiday

11 September (Tuesday): Islamic New Year (TBC), national holiday.

06 October (Saturday): Armed Forces Day, national holiday.

20 November (Tuesday): Prophet’s Birthday (TBC), national holiday.

22 November (Thursday): US Thanksgiving.

25 December (Tuesday): Western Christmas.

01 January 2019 (Tuesday): New Year’s Day, national holiday.

07 January 2019 (Monday): Coptic Christmas

25 January 2019 (Friday): Police Day, national holiday.

25 April 2019 (Thursday): Sinai Liberation day, national holiday.

28 April 2019 (Sunday): Easter Sunday, national holiday.

29 April 2019 (Monday): Easter Monday, national holiday.

01 May 2019 (Wednesday): Labor Day, national holiday.

06 May 2019 (Monday): First day of Ramadan (TBC)

05-06 June 2019 (Wednesday-Thursday): Eid El Fitr (TBC)

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.