Monday, 22 January 2018

A flurry of IPO news to warm our hearts on a cold winter morning


What We’re Tracking Today

We have plenty of IPO and M&A news leading the Speed Round this morning, which always makes us particularly happy.

Stormy weather is set to sweep northern parts of the country today including Cairo, according to the national weather service, AMAY reports. High winds, dust storms and rain are all in the cards and could be severe enough at times to disrupt traffic in both ports and on highways. Look for a daytime high of up to 21°C in the nation’s capital. The long range forecast, meanwhile, includes a chance of more rain on Thursday, according to our favourite weather apps. Egypt Independent, meanwhile, has today’s forecast in English.

No one has officially filed papers to run in this year’s presidential election as of early this morning, the National Election Commission reports. The nomination perdiod opened yesterday and runs through Monday, 29 January.

Look for the global conversation to swing toward Donald Trump and America’s place in the world as the self-appointed chattering class heads to Davos for the World Economic Forum’s annual meeting, which officially gets underway tomorrow. The event’s program is here, and you can head to the WEF’s website to read about such topics as the need for “a new era of data responsibility,” why making things by hand still matters, the new age of CEO activism and how 5G will change the world, among other topics.

(And on the topic of why making things by hand still matters, we just picked up a second-hand copy of Shop Class as Soulcraftto re-read over the long weekend. If you ever tire of pushing money and ideas around as pixels on a screen and long for the physical, this concise, thought-provoking tome will help with the answer.)

The US government will be closed today, with only essential personnel reporting for work after a bipartisan group of casually dressed senators failed to reach a compromise before the US work week began despite scrambling all weekend. But The Donald is still headed to Davos, the Financial Times tells us.

US Vice President Mike Pence arrived in Israel last night for a visit “shadowed by [the] Palestinian snub over Jerusalem,” says Bloomberg. The main Arab party in the Israeli Knesset, which Pence is set to address later this afternoon, said it would boycott his speech to protest US President Donald Trump’s recognition of Jerusalem as the capital of Israel. Pence, who’s also expected to sit down with Israeli Prime Minister Benjamin Netanyahu during his stay, travels to Tel Aviv after meetings with President Abdel Fattah El Sisi in Cairo and Jordan’s King Abdullah in Amman. The veep asked El Sisi and Abdullah to relay to the Palestinian Authority that the US is looking to restart peace negotiations, a source familiar to the matter said, according to Bloomberg. Palestinian officials canceled planned meetings with Pence to protest the Jerusalem decision.

In miscellany this morning:

  • If you know anything about the history of Egypt’s financial sector, you’ll recognize that Iran is having its own Rayyan moment right now.
  • Our new-again Russian friends at having a great time of it: “Russia is on the verge of earning more roubles per barrel of oil than at any point in its history, even though crude prices are still languishing at less than half their peak level in USD terms, set in 2008,” the Financial Times reminds us.
  • Amid today’s low oil prices, Bloomberg writes: The American sedan is dying. Long live the SUV.
  • What if children should be spending more time with screens, not less, the Wall Street Journal asks. The catch: Differentiating between the corrosive effects of passive consumption (videos) and active screen time (including parent-approved video games).

Finally: One of the biggest questions about the global economy this year remains the potential for a major crisis or downturn in China’s economy, where fears of what lies beneath the surface continue to give heart to the bears. Since we first started Enterprise back in the fall of 2014, we’ve been among those who see the warning signs. The Financial Times notes this morning that we’re not alone, but asks why, when China’s economy continues to grow, have the bears been wrong? “Did they fail to understand the way the Chinese economy works or were they just too early?”

The last word in the salmon-coloured paper’s Long Read on that subject this morning goes to Patrick Chovanec, an old China hand and chief strategist at Silvercrest Asset Management who is also very sharp on Egypt. Chovanec notes: “If you have cancer and the doctor gives you three months to live, and you live much longer than that, you still have cancer. You wouldn’t stop by your doctor and laugh at how wrong he was.” Go read China: market bulls beat the short sellers—for now.

What We’re Tracking This Week

The IMF is expected to issue the report on its second review of Egypt’s economic reform program tomorrow afternoon. The IMF board had signed off on the results of the review in December, unlocking a USD 2 bn tranche of its USD 12 bn Extended Fund Facility to Egypt. The IMF is also due to release the latest on its December 2017 Article 4 talks with Egypt.

It’s a four-day work week, with Thursday being a national holiday marking Police Day / Revolution Day.

Enterprise+: Last Night’s Talk Shows

Foreign affairs, including developments with our upstream neighbor and US Vice President Mike Pence’s visit to the region, continued to be of particular concern to most talking heads last night.

Foreign Ministry spokesperson Ahmed Abou Zeid told Kol Youm host Amr Adib that Foreign Minister Sameh Shoukry got in touch with his Ethiopian counterpart to “express his concern” over Addis Ababa rejecting Egypt’s proposal to include the World Bank in negotiations over the Grand Ethiopian Renaissance Dam (GERD). Abou Zeid noted that Egypt had specifically nominated the World Bank since it has prior experience with similar projects. Cairo will wait for the African Union summit in Addis Ababa later this month to further discuss the GERD issue with Ethiopia and Sudan, he added (watch, runtime: 8:42).

Al Hayah Al Youm’s Tamer Amin sat down with Cairo University political science professor Tarek Fahmy for some insight into Pence’s Middle East tour (watch, runtime: 17:18).

Former Arab League Secretary-General Nabil El Araby told Yahduth fi Masr’s Sherif Amer that a multilateral agreement between the US, Russia, the EU, and China could be the key to resolving the Palestinian crisis. El Araby also said that Arab countries must work on drumming up international support for Palestine and its claim to Jerusalem.

Supply Ministry spokesperson Mamdouh Ramadan told Hona Al Asema’s Lamees Al Hadidi that raising the price the state pays farmers of sugarcane to EGP 720 per tonne will encourage an increase in cultivation and eventually plug the production gap. Through some miracle of socialist economics, he insists that paying more for sugarcane won’t affect the retail price of sugar. Ramadan says Egyptians consume around 3.2 mn tonnes per annum (watch, runtime: 2:14).

Farmers Syndicate head Hussein Abou Saddam told Lamees a better price from the state should give farmers a satisfactory profit margin without pushing up retail prices, which would be burdensome for citizens. By his calculations, each tonne of sugarcane costs EGP 22,000 to cultivate, meaning farmers’ profit margin between EGP 7,000 and 10,000 per tonne with the new supply price in place (watch, runtime: 2:32). Not bad margins when you can get them.

Samsung exports 80% of its Egyptian production to 35 countries across MENA: Lamees had a chat with Samsung Egypt Vice Chairman Sherif Barakat about President Abdel Fattah El Sisi’s visit to his company’s factory in Beni Suef, which exports 80% of its output to 35 countries in the MENA region. According to Barakat, the factory’s exports reached USD 500 mn in 2016. He also discussed his company’s CSR program, which has seen it develop some 80 schools in Beni Suef. The appearance is over two clips (watch, runtime: 3:51) and (watch, runtime: 1:51)

Meanwhile on Planet Inshallah: The Education Ministry plans to install high-speed WiFi in all schools across the country “soon,” Assistant Education Minister Mohamed Omar said in a phone-in to Mehwar TV’s 90 Minutes. This comes as part of the ministry’s plan to overhaul public schools’ technological infrastructure (watch, runtime: 7:35).

Speed Round

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IPO WATCH- Eagle Capital has tapped EFG Hermes and Zulficar & Partners to act as financial and legal advisors on the restructuring of Egyptian Media Group (EMG), which Eagle Capital had acquired last month, unidentified sources tell Al Borsa. EFG Hermes had acted as the sole buy-side advisor to Eagle Capital in the acquisition, while Zulficar & Partners were the legal advisors on the transaction. According to the sources, Eagle Capital will likely IPO EMG once the restructuring process is complete within two years’ time. Studies are currently underway to remove EMG’s unprofitable activities to raise its profits to 5% of its capital, which is the minimum requirement to list the company, the story says.

IPO WATCH- The Egyptian Propylene and Polypropylene Company (EPPC) has reportedly appointed EFG Hermes and Citibank to help it secure USD 800 mn in funding for its petrochemicals plant in Port Said, Egypt Country Head at Amwal AlKhaleej Karim Saada told Al Mal. Amwal AlKhaleej owns about 16.4% of EPPC’s shares. The details of the expansion were announced last week. Saada says 65% of the required funding will be raised internally and through loans, with the remainder coming from listing on the EGX. He says an IPO is expected by April. EPPC will add new production lines that would increase output to 600k tons. Saada says CIB, Banque Misr, and Banque du Caire are preparing a bridging loan to fund the project. Law firms Matouk Bassiouny and Baker & McKenzie would be advising on the potential USD 250-300 mn listing, he adds. Saada has been floating the planned investment since last year.

IPO WATCH- Beltone Financial has two IPOs in the pipeline for potential execution this year, one each in the consumer goods and industrial sectors, head of investment banking Mohamed El Akhdar tells Al Borsa. One of the companies is currently in the final phases of an acquisition in preparation for its listing on the EGX, and is one of the biggest players in its sector, according to El Akhdar. He did not disclose further details on the company or the timeline of its planned IPO. Beltone is also advising on two M&As, including the merger of Zahran Group and Groupe SEB Egypt’s electrical appliances units, which Beltone expects to be completed in 2Q2018.

IPO WATCH- It was never going to be on the EGX, and in any case: Careem is not actively considering an IPO, CEO Mudassir Sheikha says, according to The National. “It’s nowhere on the horizon, we are not actively thinking of it, we are not actively planning for it … But we are at a scale already where bankers think we should consider it … We take these meetings, but we are not actively pursuing it, we just take the meetings because they want to meet us and we listen to them,” he says. Careem is still in the “investment phase,” Sheikha says, adding that the company is not yet profitable. “We do not make money yet but the business is growing quite handsomely. We are on the business plan that will make money in a couple of years,” he told The National.

M&A WATCH- Arqaam Capital is advising on four M&A in Egypt, Managing Director Radi El Helw tells Al Borsa. The transactions are in the healthcare, food, industrial, and ICT sectors, El Helw says, without providing further details on the value or nature of the transactions. He also said that Arqaam plans to add short-selling and equity lending to its activities if they are approved by the Financial Regulatory Authority. Don’t expect the firm to launch factoring or leasing services this year, though, he added.

INVESTMENT WATCH- The Arab Moltaqa Investments Company could invest up to EGP 200 mn in Egypt over the next two years, COO Ahmed Ibrahim tells Al Borsa. Moltaqa is looking to deploy excess liquidity it booked through the recent sale of assets including a stake in Al Tawfeek Leasing Co and Dar Al Fouad Hospital (the former at the time of its IPO). The company will focus mainly on the medical and industrial sectors, but is also looking to expand its real estate portfolio, Ibrahim said, adding that the company also likes industries with export prospects. Retail is also under the company’s radar and plans are already underway to launch a supermarket franchise targeting low- and middle-income consumers.

Etisalat Misr is joining the list of companies in Egypt raising capital to retire debt it accumulated to pay for its 4G license. In a high interest rate environment, the company has begun expediting the repayment of EGP 4 bn it owed to a domestic bank consortium, sources told Al Shorouk. Etisalat Misr had borrowed EGP 6 bn from a consortium that had CIB and NBE as lead arrangers which was used to pay for the rights for the 4G license in 2016. Sources say Etisalat Misr’s interest costs rose seven percentage points last year. Al Shorouk says nine multinationals in Egypt are working on retiring debt using funding from their parent companies.

Egypt paid USD 200 mn in arrears owed to international oil companies this month, Finance Minister Amr El Garhy said, according to Reuters. El Garhy said the government would be paying another USD 550 mn in February and March as well. The government has pledged to pay off all arrears by the end of June 2019 and not to accumulate more, Reuters says.

… El Garhy also said the government has plans to sell shares in eight to 10 companies on the EGX within 18 months. He says the companies that will be part of the planned sale include some that are already listed in addition to fresh offerings. El Garhy did not specify the companies or the stakes intended for sale.

Private investment is expected to make up 60% of total economic growth in Egypt in FY2017-18, up from 48% in the last fiscal year,Planning Minister Hala El Said told Bloomberg in an interview. The figure is expected to rise further next year to a range of 62-65%, as private investment becomes a main driver of economic growth, El Said said, hinting that “investor confidence had rallied enough to supplant what has so far been an overwhelming reliance on government spending.”

Tax revenues for the 1H2017-18 grew 62% y-o-y to EGP 249 bn, Vice Minister of Finance Amr El Monayer said yesterday, Al Mal reports. The growth was driven by a 41% y-o-y increase in income tax collections to EGP 103 bn, as well as 83% y-o-y rise in proceeds from the value-added tax, which reached EGP 21 bn for the first half of the fiscal year. Real estate taxes also grew by 70% y-o-y to EGP 1.6 bn, while customs reeled in EGP 15 bn for the period, an increase of 44% y-o-y, according to El Monayer.

Tax proceeds for FY2017-18 is expected to hover around 14.5-14.7% of total GDP, up from 13.6% in FY2016-17. The government is looking to raise that figure to 19% of GDP over the next four years, El Monayer also said, explaining that a number of legal and regulatory changes. These include legislation to unify and simplify all tax procedures, as well as the Customs Act, which primarily work to clamp down on tax evasion. El Monayer said a first draft of the bill, which has been under consideration for some eight years, is being reviewed now.

Capital gains tax update: The measure, currently on hold until 2020, would come into effect once the state establishes a clear framework for its implementation, Monayer said. He added that the stamp tax on capital market transactions — a 0.125% levy that will rise to 0.175% in its third year — is more convenient to current circumstances.

LEGISLATION WATCH- The Financial Regulatory Authority (FRA) is drafting an all-encompassing Insurance Act. A draft of the bill — which will cover everything from car insurance to policies for companies and private equity funds — will be put up for “national dialogue” at the end of February before it’s passed along to the various ministries to review, FRA Deputy Chairman Reda Abdel Moaty tells Al Mal. Actuarial studies to back the bill are now underway. Some of the proposals currently under study include amending capital requirements for insurance companies to a minimum of EGP 120 mn, compared to EGP 60 mn currently. The FRA is also considering setting a payout floor of EGP 60-70,000 (up from EGP 40,000) on life insurance policies for victims of traffic accidents, Abdel Moty adds.

In other news from FRA, the executive regulations to the new Capital Markets Act are 80% complete and should be ready by the time MPs are done revising the bill by the end of February, FRA Deputy Chairman Khaled El Nashar also said. In addition to introducing penalties for financial crimes and new rules governing taxes for the sector, the law — which is currently before the House of Representatives’ Economics Committee — is expected to introduce a number of new financial instruments to the market, including futures trading, a commodities exchange, and short-selling. An FRA committee is currently drafting the mechanisms through which short-selling will be implemented and these will be used to complete drafting the executive regulations.

Also on legislative docket, the House Planning and Budgeting Committee has approved extending the Tax Dispute Resolution Act for only one year, Vice Minister of Finance Amr El Monayer said, Al Borsa reports. Cabinet had agreed back in November to extend the act’s mandate, which expired in September, for an additional two years.

Elsewhere in parliament, the House Culture and Media Committee is set to resume discussions on part two of the Press and Media Act today. The second part of the bill, which had been divided into two in 2016, focuses exclusively on setting regulations and guidelines for those working in the media, while the first had been concerned with setting up the three main industry regulators.

The shifting dynamics of Egypt’s tourism turnaround: Egypt’s tourist numbers soared 55% last year, even as European numbers dipped, with Chinese and regional tourists supplanting them. “The European market, including Russia, accounted for almost 80% (of tourists), but now, 52%,” said Hisham El Demeiry, head of the Tourism Promotion Authority, according to Yahoo News. Chinese and Indian visitors rose from 5% last year to 12%, while tourists from Egypt’s neighbours doubled their market share from 15% to 30%, he added.

This comes as the flow of tourists to the Middle East grew 5% y-o-y in 2017, with our region drawing in 58 mn tourists last year, according to figures released last week by the UN World Tourism Organization (UN WTO). This came on the back of “sustained growth in some destinations and a strong recovery in others” after a devastating 2016, the report stated. Jihadist attacks on tourist sites in Egypt, Tunisia and Turkey in recent years particularly hit the industry, but “over time, people forget and return,” said Jalel Gasmi, head of Granada Travel Services, at the Fitur international tourism gathering in the Spanish capital. Chinese and Russian visitors were the biggest drivers of this regional growth, which is projected to rise another 4-6% in 2018, according to the WTO.

Despite being safer options for investors, Morocco and Tunisia could be replaced by Egypt as an alternative, which seems to offer “huge potential” despite considerable risks caused by possible political change, a higher rate of attacks­­, and other substantial economic problems, Jeremy Weltman writes for Euromoney. Weltman lists three main factors behind Egypt’s recent slow but discernible recovery: floating the Egyptian pound, benefiting from improving global trade, and gaining a three-year financing arrangement from the IMF. “Egypt is still a riskier prospect, but it is closing the gap and offers huge potential if the reforms continue.”


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Egypt in the News

Topping coverage of Egypt in the foreign press this morning are pickups of Ethiopian Prime Minister Hailemariam Desalegene’s rejection of having the World Bank to act as arbiter in the dispute over the Grand Ethiopian Renaissance Dam (GERD). Coverage was mostly limited to wire pickups. “Seeking professional support is one thing, transferring (arbitration) to an institution is another thing. So we told them that this is not acceptable with our side,” Hailemariam had said over the weekend after returning from Cairo and his meeting President Abdel Fattah El Sisi.

From the League of the Misinformed: The time is not right to implement the Supply Ministry’s plan to eventually switch to cash-based welfare payments rather than commodity subsidies, analysts and MPs tell Al Monitor’s Ahmed Gomaa. Rising prices would make it difficult for subsidy recipients to access the commodities they rely on through the current subsidy system, particularly bread, Cairo University economics professor Hisham Ibrahim says. House Economic Committee member Rep. Basant Fahmi also expressed concern that moving away from in-kind bread subsidies would push up inflation, particularly as the new system will see bread loaves sold at their actual cost. However, Fahmi and others believe that the switch “would curb corruption and eliminate waste witnessed under the in-kind subsidy system currently in place, and that it would also ensure delivering state subsidies to their proper recipient.”

On Deadline

Blockchain is an important leap in technology that Egyptian companies should study thoroughly, Ibrahim Mostafa writes for Al Borsa, arguing that we must keep up and look ahead at how it will shape the global banking sector down the line. He notes that blockchain technology allows financial transactions to take place directly between two parties, without a banking intermediary, and protects each party’s data. Mostafa reminds readers that the technology is not synonymous with virtual currencies such as bitcoin, which the CBE has warned against.

Worth Reading

The fall of Travis Kalanick — a cautionary tale of Silicon Valley’s culture of CEO worship: Bloomberg Businessweek’s Eric Newcomer and Brad Stone have penned the most detailed (and by far the most interesting) account of the fall from grace of former Uber CEO Travis Kalanick. From the infamous video of Kalanick disparagingly arguing with a driver about Uber’s pricing to engineer Susan Fowler’s blog post (an early spark to the #MeToo campaign fighting harassment at the work place), the piece runs through the laundry list of events that ultimately led to Kalanick’s complete sidelining and resignation from Uber. In a year that saw the company go from the being one of the most profitable startups to industry pariah, the most common thread had been Kalanick’s intransigence, hubris, and refusal to acknowledge that Uber faced more than just a PR problem. This was the largest driver in plummeting morale at the company, a plot by investors to oust him, and alienating his allies.

Beyond being a tale of how culture at a company can be poisoned from the top, the piece reflects on a massive culture shift in the Valley. CEOs of successful companies — once held up as rock stars — are no longer deified. This shift owes a lot to Kalanick. Another culture shift coming from the controversy is how the moral center of the company went from the CEO to the board of directors, ushering the rise of the activist investor. “Apple Inc. once fired Steve Jobs; then he came back and led it to historic greatness. The dismissal of a successful founder has been considered a cardinal sin ever since.” The Steve Jobs spell appears to have been broken.

Worth Watching

DOCUMENTARY OF THE WEEK — PBS presents Black Coffee: Coffee fuels Enterprise. From the necessary morning pick-me-up to the afterwork social gathering, the rich, dark drink is one of the significant cultural unifiers of our time. But unlike many goods, which have come to dominate our diets only during the age of globalization, coffee-drinking infected nearly every continent some 400 years ago, transforming history, politics, and economics. PBS Black Coffee — one of the best docu-series we’ve reviewed — tells this story..

Through it all, one theme dominates: The story of coffee is the story of globalization. Part 1 of the series (watch, runtime 57:44) takes us through how this bean followed trade, geopolitics and war from Ethiopia to Arabia to Europe and the Americas, becoming the beverage of choice for all social classes. Global addiction to it fueled the slave trade, while the coffee houses became the forums of their times, helping develop early finance and being places where revolutionary ideas gestated. The politics of coffee, the impact of its cultivation on the environment and its transformation into the most important commodity after oil in the 20th century is explored in Part 2 (watch, runtime 57:44). It looks at how macroeconomic forces and the emergence of cheap, instant coffee played a hand in the poverty of developing nations and helped fuel revolutions. Part 3 (watch, runtime 57:41) sees the coffee houses and specialty coffee roasters emerge as the kings of the industry, bringing us the Starbucks and Costas we know and love.

Diplomacy + Foreign Trade

Egypt condemned the Turkish military offensive on the Kurdish enclave of Afrin in northwestern Syria, calling it a “new violation of Syrian sovereignty” that undermines existing efforts for political solutions and counterterrorism, the Foreign Ministry said in a statement.


Egypt renews Iraqi crude oil contract for one year

Egypt has reportedly renewed an agreement to import crude oil from Iraq, an official at state petroleum buyer EGPC tells Reuters’ Arabic service. The contract was renewed for another year and will see Egypt import 12 mn bbl of Iraqi crude that will be delivered in 2 mn bbl shipments every two months starting January, the official says. Oil Minister Tarek El Molla had announced in November that the government was in talks with Iraq to buy as much as 24 mn bbl of crude a year.

Petroject completes its portion of butane and mazut installations at SUMED Ain Sokhna Pier

Petrojet has completed its work on the Arab Petroleum Pipelines Company (SUMED)’s pier at Ain Sokhna port, Youm7 reports. Petrojet had completed installations at the pier which would allow it to receive butane and mazut. Oil Minister Tarek El Molla had said last year that the port should begin receiving, storing and connecting butane and mazut in early 2018.

Sabbour Consulting bidding for two Dabaa nuclear power plant design contracts

Sabbour Consulting is bidding for two design contracts related to work on the Dabaa nuclear power plant, founder and Chairman Hussein Sabbour tells Al Shorouk. Sabbour has already been awarded three contracts for the project and will be joining other suitors in bidding for 100 other contracts that Russia’s Rosatom — which is running point on the project — still intends to tender. Last we heard, Rosatom had begun procedures to obtain the licenses needed to build and operate power plant, with sources suggesting that the extent of red tape entailed could cause a delay in the timeline for construction, which is scheduled to begin by 2020. We had also heard last month that Egypt is reportedly due to receive the first tranche of a loan from Moscow this month. Loans from Russia are covering 85% of the the USD 30 bn plant’s cost.

Basic Materials + Commodities

Gov’t raises price of sugarcane purchased from local farmers to EGP 720

President Abdel Fattah El Sisi issued a decree yesterday to raise the price of sugarcane purchased from farmers to EGP 720 per tonne, up from the EGP 700 per tonne previously set by the Supply Ministry, Al Borsa reports. The House Agriculture Committee had been pushing for the government to raise sugarcane prices to EGP 1,000 per tonne, up from EGP 620 per tonne during the last harvest season. Sugar factories have been supplied with about 1 mn tonnes of sugarcane since the current harvest season began at the beginning of January, according to Supply Ministry spokesperson Mohamed El Sewed. The ministry expects to supply 10 mn tonnes of sugarcane, which will produce 1.1 mn tonnes of sugar by the end of the season.

Health + Education

Higher Education Ministry plans to launch an investment map for universities

The Higher Education Ministry is working on an investment map of private universities that it wants to offer up to investors, Minister Khaled Abdel Ghaffar tells Al Borsa. The map comes as part of the ministry’s strategy to drive significant investments in new universities to keep up with demand. The minister said he expects investments in new private universities to reach EGP 10 bn during the current fiscal year. Abdel Ghaffar had said last week that his ministry is hoping to attract EGP 35 bn in investments to finance the construction of new private and public universities.

Prosecutor General issues indictments against nine medical equipment suppliers

The Prosecutor General issued indictments against nine medical equipment suppliers with the Economic Court on Sunday on charges of bid-rigging and price fixing on on public hospital tenders, according to a statement from the Egyptian Competition Authority (ECA). The ECA had conducted a year-long investigation back in 2016 and 2017, which found that seven companies, including Temco Technology, MD for Medical Supplies and Ghalioungui, had conspired to present the same bids in tenders to supply public hospitals with heart disease equipment over a two-year period between 2013 and 2015. This not only drove up prices of equipment, but also took advantage of loopholes in the Tenders and Auctions Act which allows the government to distribute orders equally among companies which present the same bids. Further investigations had found that Medical Technology, and Medi Tech had also allegedly joined in the scheme. The ECA had brought the case to the Prosecutor General back in March of last year.


Egypt to open four new museums by June

The Antiquities Ministry is preparing to open four new museums in Marsa Matrouh, Sohag, Tal Basta, and Tanta by the end of June, Minister Khaled El Enany tells El Mal. This year will also see the transfer of the 80-tonne Ramses II statue to its permanent exhibition at the Grand Egyptian Museum on 25 January, El Enany adds.

Egyptian-Spanish tourism companies discuss launching Aswan/Luxor-Madrid charter flights

Egyptian and Spanish tour operators are in talks to launch weekly charter flights from Madrid to Luxor and Aswan, from July to December in a bid to boost tourism, Egyptian tour operators tell Al Shorouk. Talks are taking place on the sidelines of the Fitur 2018 International Tourism Trade Fair in Spain, which comes days ahead of the launch of a tourism promotional campaign in Barcelona. Egypt also launched a promotional campaign this week to draw tourists from India.

EGOTH reviews two offers for Continental Downtown development

The Egyptian General Company for Tourism and Hotels (EGOTH) is reviewing two offers from foreign and local companies for the renovation and development of the Continental Hotel in downtown Cairo, company head Mirvat Hataba tells Al Borsa. The winning company, whose name will be announced next month, is expected to provide the EGP 1.2 bn needed for the project.

Automotive + Transportation

Construction to start on auto freezone project in February

Egypt is set to begin work on the Ain Sokhna Automotive Logistics City in February, a government source tells Al Mal. Feasibility studies and designs should be complete by next week, at the end of which stakeholders will hold a meeting to agree on final details. China’s TEDA Holding had been tapped to run point on the project and had inked agreements with seven investors last year to establish the EGP 300 mn auto manufacturing and shipping hub. The projects had been delayed from 2016 to due to financing issues.

Telecoms + ICT

Raya Contact Center to leave Maadi Technology Park

Raya Contact Center has allocated EGP 124 mn to move to a new administrative building away from its current premises in Maadi Technology Park, CFO Hossam Hussein told Al Mal. Hussein cited the high rent rates and Maadi Technology Park’s insistence on receiving payment in USD as the reason behind he move. He said the company bought an EGP 74 mn building and will prepare it to host its call center operations.

Banking + Finance

Banque Misr to retain 2016-17 earnings to support capital

Banque Misr is planning on retaining 2016-17 earnings to support the bank’s capital, Vice Chairman Akef El Maghraby tells Al Mal. El Maghraby refused to disclosed the bank’s net profit for the year, but says it showed good growth levels. He added that Banque Misr plans to expand internationally and open more representative offices internationally, beginning with Kenya and South Korea in 1H2018.

ODE board proposes share split to widen shareholder base

Orascom Development Egypt’s (ODE) board of directors proposed implementing a share split yesterday that would change the par value of the company’s share to EGP 1 from EGP 5, the company said in a filing to the EGX (pdf). The move aims to widen ODE’s shareholder base by increasing the number of traded shares and diluting their value to attract more bidders.

FRA approves Samcrete’s capital increase

The Financial Regulatory Authority (FRA) approved yesterday Samcrete’s request to increase its issued capital to EGP 230.46 mn from EGP 69 mn, according to a bourse disclosure.

Other Business News of Note

Supply Ministry issues tenders for four logistics zones

The Supply Ministry has issued tenders for four logistics zones in Behera, Gharbiyah, and Sharqiyah that are expected to draw in c. USD 13 bn in investments, Minister Ali El Moselhy said yesterday, Al Mal reports. The ministry is also working on four logistics zones in Asyut, Luxor, Beni Suef, and Aswan, that are costing it USD 1.5 bn each and are expected to collectively draw in USD 7-12 bn-worth of investments, according to El Moselhy.

Egypt Politics + Economics

Presidential candidates have yet to submit their nomination paperwork

As of yesterday, none of the presidential candidates who announced their intention to run have submitted their nomination paperwork to the National Elections Commission (NEC), Ahram Online reports. President Abdel Fattah El Sisi, former Armed Forces chief of staff Sami Anan, and activist Khaled Ali have all formally announced their intention to run. Candidates have a nine-day window running from 20-29 January to submit the necessary documents, including at least 25,000 endorsements from citizens or 20 from MPs, to make their bids official. Over 500 MPs have signed endorsements for El Sisi. Ali, who is rumored to be struggling to collect the minimum number of endorsements, announced yesterday that former presidential candidate and leftist figure Hamdeen Sabahi had signed an endorsement for for Ali’s bid.

On Your Way Out

The Egyptian Media Production City Co. has received the government’s green light to begin issuing filming permits to foreign companies looking to film in Egypt, EMPC said in a statement to EGX yesterday.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6569 | Sell 17.7569
EGP / USD at CIB: Buy 17.65 | Sell 17.75
EGP / USD at NBE: Buy 17.65 | Sell 17.75

EGX30 (Sunday): 15,340 (-0.5%)
Turnover: EGP 1.2 bn (8% ABOVE the 90-day average)
EGX 30 year-to-date: +2.1%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.5%. CIB, the index heaviest constituent closed down 0.1%. EGX30’s top performing constituents were Elsewedy Electric up 2.5%; Orascom Telecom Media & Technology up 1.3%; and Arab Cotton Ginning up 1.2%. Yesterday’s worst performing stocks were Porto Group down 5.0%; Amer Group down 2.9%; and Oriental Weavers down 2.7%. The market turnover was EGP 1.2 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +65.0 mn
Regional: Net Short | EGP -49.9 mn
Domestic: Net Short | EGP -15.1 mn

Retail: 59.4% of total trades | 62.7% of buyers | 56.2% of sellers
Institutions: 40.6% of total trades | 37.3% of buyers | 43.8% of sellers

Foreign: 17.0% of total | 19.6% of buyers | 14.3% of sellers
Regional: 12.0% of total | 10.0% of buyers | 14.1% of sellers
Domestic: 71.0% of total | 70.4% of buyers | 71.6% of sellers

WTI: USD 63.37 (-0.91%)
Brent: USD 68.61 (-1.01%)

Natural Gas (Nymex, futures prices) USD 3.19 MMBtu, (-0.13%, February 2018 contract)
Gold: USD 63.37 / troy ounce (-0.91%)

TASI: 7,513.3 (-0.34%) (YTD: +3.97%)
ADX: 4,636.22 (+0.23%) (YTD: +5.41%)
DFM: 3,512.33 (-0.53%) (YTD: +4.22%)
KSE Weighted Index: 417.28 (-0.44%) (YTD: +3.95%)
QE: 9,145.44 (-0.59%) (YTD: +7.3%)
MSM: 4,978.6 (-0.9%) (YTD: -2.37%)
BB: 1,335.92 (+0.21%) (YTD: +0.32%)

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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.

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