Thursday, 8 February 2018

A busy news day to end the week in Egypt

TL;DR

What We’re Tracking Today

Yields on Egypt’s T-bills fell to their lowest point since right before the EGP float in 2016, according to Bloomberg’s Ahmed Feteha. Yields on one-year treasury bonds has fallen to 16.7%, the lowest since two-weeks before Egypt lifted currency controls.

EFG Hermes economist Mohamed Abu Basha sees this as a sign that some investors anticipate an interest-rate cut when the central bank’s Monetary Policy Committee meets next Thursday. CBE Governor Tarek Amer stoked anticipation of a possible cut when he said on Tuesday that the central bank would adopt a looser monetary policy once it is sure inflation had been reined in.

Would lower yields mean lower foreign appetite for Egyptian treasuries? Abu Basha doesn’t think so. “If investors take their money out of Egypt, they have to put it somewhere else,” Abu Basha said. “What other opportunities are there in frontier and emerging markets that provide similar returns given Egypt’s relatively low risk?”

Meanwhile, look for an announcement as early as today that Egypt has completed a USD 4-5 bn Eurobond issuance. Finance Minister Amr El Garhy had said earlier in the week that the transaction would wrap in matter of days.

SELLOFF WATCH- Asian markets were mixed at dispatch time this morning and US markets closed down slightly yesterday, trimming gains earlier in the session.

Food for thought: One player says algorithmic trading is behind the selloff, saying it has been “driven by computers and not traders’ fears over market indicators.” And think for a moment before you try to buy the dip, the Financial Times cautions.

Keep an eye on crude: Oil posted its biggest loss in two months yesterday, Bloomberg reports, as “record crude production from U.S. fields reignited worries that supplies will swamp demand.”

Egyptian, Sudanese FMs, intelligence bosses meeting to cool-off tensions: Foreign Minister Sameh Shoukry received his Sudanese counterpart, Ibrahim Ghandour, as the latter arrived in Cairo last night ahead of talks set for today, according to Foreign Ministry spokesman Ahmed Abu Zeid. Ghandour and Shoukry are expected to discuss “outstanding issues” between Cairo and Khartoum, including diverging views on the Grand Ethiopian Renaissance Dam. Sudan and Egypt’s intelligence service chiefs are also expected to have a separate sit-down before the four officials gather for a joint meeting later in the day, Abu Zeid said, according to Al Masry Al Youm.

Trade and Industry Minister Tarek Kabil arrives in Singapore today. Kabil will meet with his part, Koh Poh Koon, Al Mal reports, and attend a conference organized by Singapore’s SECC Group on the 33 mn sqm industrial city it will establish in Fayoum. Kabil also set to meet the regional director of Singapore’s Economic Development Board and the head of the Singapore Business Association.

Beware: Shay and smoking don’t mix: Woe to the nation, whose two favorite pastime can lead to cancer when mixed. Drinking scalding hot tea has been linked to an increased risk of esophageal tumors for those who smoke and consume alcohol, Chinese researchers have found.

Temperatures will keep rising through the weekend before cooling on Sunday. Expect the mercury on Friday and Saturday to reach highs of 31°C in the capital—and watch out for a cooler Sunday and stormy weather all through next week nationwide, Meteorological Authority boss Ahmed Abdel Aal said yesterday, Al Shorouk reports..

The Cairo Governorate has approved slapping fines of between EGP 200 and EGP 5,000 on litterers, Youm7 reports. The governor has reportedly granted local officials the authority to fine citizens caught littering in public spaces. We’d cheer this full-throatedly if it were accompanied by (a) an awareness campaign, (b) the deployment of trash bins city-wide, and (c) if those trash bins were to be regularly emptied by either municipal contractors or whatever company has been hired to have staff pretend to clean.

What you read this past week: Among the most-clicked stories in Enterprise this week were:

  • A viral poem suggests today may not have been the absolute worst day ever. (WGN Chicago)
  • Naguib Sawiris calls on Egyptian companies to double-down on Egypt in Investment Ministry video. (Facebook)
  • Abraaj faces questions over deployment of capital in EM healthcare opportunities. (Wall Street Journal | Bloomberg | Abraaj statement)
  • The era of easy money is ending, and the world is bracing for shocks. (New York Times)
  • Why I started a bullet journal—and so should you (Financial Times)

On The Horizon

Al Ghad Party’s presidential candidate Moussa Mostafa Moussa will announce his campaign platform and will select his campaign’s senior staff on Saturday, Moussa told Al Shorouk on Wednesday.

Enterprise+: Last Night’s Talk Shows

Politics pervaded the airwaves once again as the talking heads pored over Turkey’s rejection of Egypt’s maritime border demarcation agreement with Cyprus (we have the full story in Diplomacy + Foreign Trade, below).

A welcome exception to the rule was SODIC CEO Magued Sherif’s interview on Extra News’ Mal wa Aamal.

Sherif told Extra News’ Dina Salem that the company will spend around EGP 3 bn during the year on various projects, including East Town, Villette, and SODIC East — which is being developed in partnership with Heliopolis Housing — as well as smaller-scale work on SODIC West and the North Coast development Caesar Bay. SODIC will also pay EGP 950 mn in land instalments to the New and Urban Communities Authority, he added.

SODIC is also expecting sales revenues to grow to EGP 8.7 bn in 2018 from EGP 5.6 bn in 2017, according to Sherif. Despite the challenging economic backdrop, the market has responded well to the rise in home prices in the year following the EGP float (which are up c. 45% since), thanks largely to positive demographics and strong market foundations. With almost 900k marriages a year and strong population growth, Egypt has consistent demand for real estate across the income segments, Sherif said, explaining that demand usually far exceeds supply.

Other plans include drafting a new dividend payment scheme. Sherif said that the company will not be distributing any dividends from its 2017 earnings, but plans to put a clear mechanism in place this year.

On working with the state, Sherif told Kamel that SODIC would be more than willing to partake in the development of affordable-housing projects in partnership with the government if an opportunity were to present itself. SODIC is also now seeing more merit to investing in the new administrative capital, now that they have more clarity on the project, which Sherif described as the “natural extension of East Cairo.” You can watch the full interview here (runtime 34:47).

Meanwhile on Yahduth fi Masr, Cyprus’ ambassador to Egypt expressed his appreciation for Egypt’s Foreign Ministry’s “clear and principled” response to Turkey’s statements on the maritime border agreement (watch, runtime 1:03). Host Sherif Amer also spoke to former Oil Minister Osama Kamal, who stressed that the agreement adheres to international conventions and is no longer up for negotiation or objections. Kamal also noted that IOCs would not have poured bns into Eastern Mediterranean operations if the demarcation agreement was in doubt (watch, runtime 11:00).

Masaa DMC’s Osama Kamal agreed with the former oil minister of the same name and read out written commentary from pundits including energy expert Mahmoud Abdel Moneim and international lawyer Amr Al Naggar, both of whom said Egypt is legally in the right. Kamal also wondered out loud why Ankara would purse such a policy line with Egypt’s oil and gas activity if it continues to enjoy healthy relations in other areas, such as trade and economic cooperation (watch, runtime 3:50).

Over on Al Hayah Al Youm, Nahawand Serry called up Turkish Magazine Awrak’s Editor-in-Chief Mohamed Abdel Kader, who said Turkey’s hostile position stems from President Recep Tayyip Erdogan viewing Zohr as a threatening geostrategic shift that will strengthen Egypt’s economic and military ties (watch, runtime 4:30).

Kol Youm’s Amr Adib naturally didn’t hold back one bit, slamming Turkey’s statements as “thuggery” that signals Ankara is on the brink of a gas shortage crisis (watch, runtime 2:41). Pharos University Petroleum engineering professor Ramadan Abu El Ela called up Adib to say that Turkey is simply trying to instigate feelings of uncertainty for oil companies in Egypt (watch, runtime 4:25).

Adib also took note of Sudanese Foreign Minister Ibrahim Ghandour’s touchdown in Cairo, and said that Sudanese-Egyptian relations are faring much better now than a month ago (watch, runtime 1:16).

As is her Wednesday custom, Hona Al Asema’s Lamees Al Hadidi took a break from the news world and spent her evening paying tribute to Egyptian belly dancer Tahiya Karioka.

Speed Round

Speed Round is presented in association with

Amendments to Banking Act to make central bank the primary consumer protection agency for the banking industry: Amendments to the Banking Act, which are still being drafted by the central bank, will, in effect, make the CBE the primary consumer protection agency for the banking industry, Al Mal reports. Under the law’s provisions, the CBE will be responsible for taking consumer complaints and investigating them. The CBE will also be charged with adjudicating between customers and banks in the event of a dispute. The law will also afford the CBE the right to order settlements and mete-out punitive measures against financial institutions found in violation of laws and standards. The amendments would also see the CBE assume some powers of the Egyptian Competition Authority, making it the ultimate arbiter of what constitutes a monopoly in the sector.

The CBE may begin issuing consumer-centric regulations ahead of the law. These will include new, customer-focused transparency regulations and disclosure rules, said Khaled Bassiouny, head of the CBE’s financial inclusion unit, at the Seamless North Africa fintech conference. These new rules will also see the establishment of the customer complaints unit.

Also coming of the Seamless fintech conference: The central bank is planning to establish an EGP 1 bn venture capital fund, CBE Governor Tarek Amer announced. The bank will look to finance “innovative ideas and projects” through the fund, he added. Also in the cards, Amer says: All things digital, Al Borsa reports.

Also speaking at the conference was Prime Minister Sherif Ismail, who said Egypt aims to become a regional hub for fintech innovation.

LEGISLATION WATCH- Is privatization of the EGX in the cards after the House Economics Committee okays regs allowing private stock exchanges? Or is it a commodities exchange that would be private? The House of Representatives’ Economics Committee agreed to amendments to the Capital Markets Act yesterday to allow the establishment of privately-owned stock exchanges. Private exchanges, which would fall under article 26 of the act, would be established as joint stock companies and allowed to trade in or two types of securities at most, only after obtaining approval from Cabinet based on a recommendation from the Financial Regulatory Authority (FRA), according to Al Mal. Private exchanges would face licensing fees of no more than EGP 100k, and the regulations on shareholders, capital requirements, board members, and management structure would fall to Cabinet to set, presumably via executive regulations. The new exchanges’ financials would also have to be monitored by FRA-sanctioned personnel.

Other amendments will permit new instruments, toughen sanctions: Among the new instruments could be sukuks, futures, and a commodities exchange.

Will FRA include short-term debt instruments as part of Capital Markets Act amendments? Other amendments to the Capital Markets Act now under study by the committee could see the introduction of short-term debt instruments. The FRA had reportedly suggested including provisions to allow for the issuance of short-term bonds, ranging from seven days to two years, at the hearing held yesterday on the law, Youm7 reports. It is unclear whether this is a proposal for future amendments after the current ones are passed or whether FRA is trying to include a last minute change to the act. FRA had hoped to begin allowing the issuance of short-term instruments before the end of 2017. The move aims to facilitate financing of SMEs, particularly those whose products and services are seasonal, officials had previously suggested

Tension between the bourse and the FRA? Disagreements with FRA Chairman Mohamed Omran over lowering the EGX’s listing fees reportedly led deputy bourse chief Mohsen Adel to abruptly leave in the middle of yesterday’s discussion session. The Economics Committee had proposed lowering listing fees to EGP 50,000 on bonds and EGP 250k instead of EGP 500k on securities, which Al Mal says did not sit well with Adel.

Brokerages cheer EGX drive to interest banks in financing margin trading: Brokerages and industry associations are welcoming recent steps by the EGX to increase the involvement of banks in margin trading, according to Al Mal. EGX head Mohamed Farid had met last week with the Federation of Egyptian Banks to discuss mechanisms that would encourage the banking sector to finance margin trading and help reduce risk. Banks had been reluctant in the past few years to finance margin trading on fears of turbulence in the stock market, said the head of the securities division of the Federation of Egyptian Chambers of Commerce, Awni Abdel Aziz.

Economic growth in Egypt is expected to accelerate to 5.5% in FY 2018-19, Bloomberg Economics’ Chief Middle East Economist Ziad Daoud expects, according to CPI Financial. He sees four tailwinds supporting growth in Egypt. First is declining inflation rates. Second are the lower interest rates expected, which “should boost growth through faster expansion in consumption and investment.” Tourism is also set to recover, with more tourists arriving and staying for longer. The fourth tailwind is the increased natural gas production domestically. “The story of Egypt is positive in the short term. However, most of the factors behind the expected recovery are temporary, and as these fade or reach their limit, Egypt will need to find new drivers for growth,” said Daoud.

Fuel subsidy costs are up 34% y-o-y in 1H2017-18, Oil Minister Tarek El Molla told Reuters. The cost has gone up to EGP 51 bn from EGP 38 bn, but El Molla notes that the spent amount remains EGP 4 bn below budgeted. In total, the government expects to spend EGP 110 bn on fuel subsidies in FY2017-18.

Will this send the deficit to 10.5% of GDP, or is the 9.4% projection from last week still on? An official from the Finance Ministry tells Al Mal that the spike in fuel subsidies bill will raise budget deficit projections. This comes despite the ministry laying out conservative estimates. The official justified the discrepancy by stating that the biggest spike in global oil prices had taken place in mid-FY2017-18, so these were not accounted for. The source did not clarify whether the hike in fuel prices was factored into the ministry’s updated budget deficit projection from last week, which project a deficit of 9.4% of GDP. Ashraf Al Araby, a member of the House of Representatives’ Economics Committee, says that the fuel subsidy cost increases will lead to a budget deficit closer to 10.5% of GDP, though he does not explain where he got those figures.

M&A WATCH- Beltone Financial is planning new acquisitions to diversify the products it offers in frontier and emerging markets. “Beltone is in a very big growth mode,” CEO Bassem Azab said in an interview with Bloomberg on Wednesday. “We spent the past two years establishing and re-positioning ourselves in investment banking, asset management and brokerage. Now that we have our pillars reinforced on the ground, we are looking at other business lines that we want to grow.” Beltone is looking at acquisitions in leasing and consumer finance in Egypt and might consider starting a microfinance business, Azab added.

Beltone is also looking to buy companies outside Egypt to diversify product offerings beyond equities, Azab said. Beltone’s last major acquisition was New York-based brokerage Auerbach Grayson & Co in 2016.

On the IPO front, Beltone expects to bring as many as three IPOs to the EGX this year in the consumer, healthcare and industrial sectors. The firm is also pitching to co-manage a share sale in Nigeria, investment banking head Sobhy El Sehrawy said.

It also has an “aggressive” plan in 2018 to expand research coverage outside Egypt and add more analysts to its team, said Mostafa Abdel Aziz, the head of its brokerage unit.

An Elsewedy Electric consortium with Siemens was awarded a USD 300 mn EPC contract by the Dubai Electricity and Water Authority (DEWA) for the Aweer H station, phase IV Power Plant in Dubai, the company announced. The 800 MW gas-fired open cycle power project is located in AI Aweer in Dubai and is to come into service by 2020. “Elsewedy Electric’s scope of work includes engineering, procurement and installation of balance of plant in addition to the erection and installation of the Siemens gas turbines. In addition, Elsewedy Electric will be responsible for the site preparation, levelling and the civil, construction and site utilities for the project Siemens scope of works includes fabrication, supply, testing and commissioning of the gas turbine generators in addition to joint project management.”

On restoring flights with Russia, Egyptian officials say one thing, while the Russians say another: Carriers EgyptAir and Aeroflot have not yet received permits for flights between Cairo and Moscow from Russia’s Federal Air Transport Agency, said Russia’s Federal Air Transport Agency head Alexander Neradko, TASS reports. This followed comments by Egypt’s ambassador to Russia, Ehab Nasr, that the last remaining obstacle to the resumption of flights was for the two airlines to agree on procedures and details among themselves. Earlier in the week, Bassem Abdul Karim, a top advisor at the Civil Aviation Ministry, said EgyptAir and Aeroflot had received all permits for flights between Moscow and Cairo, starting from 1 February. Russian Deputy Prime Minister Arkady Dvorkovich has said that both governments need to sign a separate security agreement before flights can resume.

Conflicting remarks suggests outstanding security issues remain? The rhetoric from Russia appears to suggest that so-called “procedures and details” such as setting up a gate at Cairo International Airport exclusively for Russians, may be part of further security measures demanded by Moscow. Officials at CAI insisted yesterday to Al Mal that this is not the case and noted that flights to the US have their own specific gate. They added that the airport had acquiesced to setting up a boarding terminal for Russians.

In other procedural matters, TASS notes that “Aeroflot plans to fly to the Egyptian capital from the Moscow based airport of Sheremetyevo twice a week — on Saturday and Wednesday. Egyptian national carrier EgyptAir plans to carry out three flights to the Russian capital via Domodedovo, another Moscow-based airport — on Tuesdays, Thursdays and Sundays.”

The Benban solar power complex won Thomson Reuters’ Project Finance International Award for “Global Multilateral [transaction] of the Year” yesterday. The USD 2 bn complex, where 30 solar power plants will eventually generate around 1.5 GW of power, represents the second phase of Egypt’s feed-in tariff (FiT) program and is being funded by a number of international lenders, including the International Finance Corporation and European Bank for Reconstruction and Development. The award “crowns the success of the (FiT) and its participants,” according to a statement from our friends at Zulficar and Partners (pdf), who had acted as legal counsel for the Egyptian Electricity Transmission Company on the project.

Companies broke ground on their respective projects in Benban this week after receiving their 25-year power production licenses from the Egyptian Electric Utility and Consumer Protection Agency (Egyptera), Al Borsa reported yesterday. The Finance Ministry had issued letters of guarantee earlier this month.

The Ismail Cabinet granted preliminary approval yesterday to the Pharma Regulator Act, according to an official statement. The legislation would establish three separate bodies to regulate the pharma sector: The Supreme Council for Medicine and Medical Technology to set and implement overarching policies for the sector; the Egyptian Medical Technology Authority to oversee the procurement of pharmaceutical products and medical equipment; and the Egyptian Medical Authority to oversee the manufacturing, sale, and import of human and veterinary medicine. Plans for the Pharma Regulator Act have been in the works since early 2016, when widespread reports of meds shortages led the House Healthcare Committee to announce it was drafting a bill to establish a new market regulator.

Cabinet also signed off during its weekly meeting on the new Customs Act. Amendments to the legislation would widen the scope of goods eligible for temporary exemption of customs taxes and other fees, and bar the release of goods without approval from the Customs Authority. The amendments would also unify additional customs fees and taxes, and reduce the maximum amount of time for fee and tax exemptions to two years, down from four. Additionally, the legislation would reduce the maximum amount of time allotted for the withdrawal of unclaimed inventory to three months, down from two years.

The ministers also agreed to set up a Supreme Authority for Upper Egypt Development. The new body, which will be based in Aswan, will be mandated with drafting a holistic strategy for the economic, social, and urban development of regional areas.

Also approved yesterday:

  • BP and Apache concession agreements in the Northeast Ramadan Concession in the Gulf of Suez and the East Bahariya Concession in the Western Desert, respectively;
  • The establishment of the National Council for Persons with Disabilities, which will replace the National Council for Disability Affairs.

A reconstruction boom to take place in post-war Syria? The reconstruction of Syria is going to be a “generational project” as the destruction is severe and widespread in scale, Steven Heydemann, Middle East studies professor at Smith college tells Carnegie Middle East Center. Heydemann talks about the politics of reconstruction and it how it is set to benefit specific political factions more than others. Watching this, we wanted to look beyond the politics of the inevitable reconstruction effort. We were wondering who would be there on the ground when the moment comes and whether any Egyptian companies would be eyeing this potential opportunity (runtime 06:26).

Uber is bolstering its investments in EMs in a tough year for the company: Despite a tough year of lawsuits, data breaches, and rising competition, Uber saw its greenfield investment in overseas operations rise to a new high of USD 191 mn during 2017, a 57% increase from its previous high in 2015 and almost three times the amount invested in 2016, according to the Financial Times. Of its total greenfield FDI in 2016 and 2017, 65% went into emerging markets including Brazil, Morocco, Egypt, Bulgaria and Vietnam.

Did Saudi Arabia allow Israel-bound commercial flights to use its airspace? The Kingdom reportedly granted Air India approval to operate direct flights from Delhi to Tel Aviv in a historic first, sources in the Israeli flight industry told Haaretz. However, a spokesman for Saudi Arabia’s General Authority of Civil Aviation speaking to Reuters denied the report. A move like this would be the first time the Saudis are allowing commercial flights to Israel to use their airspace and would be the first overt policy shift by the Kingdom towards normal ties with Israel.

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Egypt in the News

What do you get when you mix a slow news day, a 24-hour news cycle, bored writers, and an election in Egypt? A string of (often rambling) pieces passing as political analysis in the foreign press. From the Washington Post, we have a report on the internal divisions within the Wafd Party between those supporting President Abdel Fattah El Sisi’s election bid and those opposed to it. The only coherent analysis we’re getting from this is that the divisions are a microcosm for Egyptian society (brilliant). Over on the Financial Times, we have a history paper on the Ikhwan, while the folks at Al Jazeera are regurgitating recent elections news.

One piece that could be worth your while is an article from security research outlet IHS Jane’s, which postulates that while El Sisi’s supposed crackdown on military figures indicates greater government stability, it does pose risks on the terrorism front. One thing the piece notes is that the economic reforms have become institutionalized to the point that they can outlast any potential challenge to El Sisi’s grip on power.

A growing belief amongst Africans and African Americans is that yoga originated in Africa, and more specifically Egypt, according to Face2Face Africa. The theories are largely based on 10,000 year-old hieroglyphics depicting what is known as Kemetic Yoga, which predates the 5,000-year-old tradition.

Also worth a quick skim this morning:

  • End censorship of news sites: The Committee to Protect Journalists (CPJ) called on Egyptian authorities to ensure the public is able to access all news sites.
  • The Egyptian sumo wrestler known as Osunaarashi is being accused of causing an accident while driving without license, sources told The Japan News.
  • Walt Curnow reviews Mosireen’s efforts to document and archive the events of the 2011 and 2013 uprisings in Egypt for Al-Monitor.
  • “_Mohamed Salah has provided a massive boost to Liverpool fans’ hopes of him sticking around for the long haul” when he said he was a lifelong fan, says Pundit Arena and 90mins.
  • Archaeologists uncovered an Ancient Egyptian bakery and beer brewery in Upper Egypt, according to The Daily Mail.

On Deadline

After a dreary couple of days, the nation’s columnists finally offered up a somewhat better selection of musings. Two pieces in particular grabbed our attention: The first is Abdel Latif El Mennawy’s op-ed on Sudan and Egypt, in which he calls on the two countries to stop trying to paint a rosy image of “brotherly relations” when there are clearly major differences and tensions. The second is an analysis of the Ikhwan’s political history and the slim chance the group has of making a political comeback, courtesy of El Watan’s Mahmoud Khalil.

Worth Watching

Technology appears to have found a way to eliminate human interaction. “Researchers have perfected a way for you to stay social without actually having to leave the comfort of your own home again — by having a surrogate strap on an iPad mask and venture out into the world for you,” says Vice. The inventor of this human Uber showcased his idea at an MIT event this week. We’re not entirely sure how we feel about this ChameleonMask (watch, runtime 0:30).

Diplomacy + Foreign Trade

Egypt rejects Turkey’s stance on Cyprus demarcation agreement: Turkish Foreign Minister Mevlut Cavusoglu statements that a 2003 maritime border demarcation agreement between Egypt, Cyprus, and Greece is invalid are “unacceptable” and would be contested, Egypt’s Foreign Ministry said, according to Ahram Online. Cavusoglu had said that Ankara lodged its objection with the UN claiming the agreements “violates Turkey’s continental shelf.” Foreign Ministry spokesperson Ahmed Abu Zeid said, however, that the agreement adheres to international law, according to Cyprus Mail. Reuters also has the story.

Meanwhile, Cairo Governor Atef Abdel Hamid has reportedly taken pettiness to new highs and decided to rename a street originally named after Ottoman ruler Selim I, according to Al Arabiya. Abdel Hamid’s decision came in response to a history professor’s objection to the street name, since the Ottoman ruler “was the first colonizer of Egypt” and caused the country to “lose its sovereignty.”

It appears Israel is not happy that Egypt can buy submarines German firm ThyssenKrupp after it waived its exclusivity clause at them. “Despite the fact Egypt is not part of the circle of threats Israel faces I would have preferred they did not have German submarines similar in capabilities to ours, as they comprise a significant improvement,” an Israeli naval officer said, in what Ynet News is calling the first comment from a senior official on the matter.

The Social Solidarity Ministry will open talks with World Bank this month to receive the last USD 35 mn tranche of a USD 400 mn loan funding the Karama and Takaful programs, sources tell Al Mal. The ministry is expected to receive the payment by the end of FY2017-18.

Infrastructure

EU delegation visits Damietta Port to explore cooperation

EU Ambassador Ivan Surko_ and the EU’s First Secretary of the Trade and Enterprise division Klara Kanska visited yesterday the Damietta Port to explore potential cooperation, Al Mal reports. The officials discussed the planned construction of a new container terminal at the port and the logistical services available for oil tankers, among other projects open for investment.

Real Estate + Housing

Remco to begin EGP 12 bn project in new administrative capital

Remco Tourism Villages Construction announced it is beginning EGP 12 bn worth of projects at the new administrative capital, according to a bourse statement. Remco says the project is expected to generate EGP 15 bn in sales and will be executed over two years.

Tourism

Thomas Cook resumes flights for East Midlands Airport to HRG

Thomas Cook will resume flights to Hurghada from the UK’s East Midlands Airport on Friday, according to the Daily Telegraph. The winter route will run every Friday until 27 April and back again in November, when a Tuesday flight will be added as well. Thomas Cook had suspended the route in April 2016.

Automotive + Transportation

Sukhoi resumes talks on delivering aircraft to Egypt

Sukhoi Civil Aircraft resumed talks on deliveries of Russian SSJ-100 and MC-21 aircraft to Egypt, the company’s President Alexander Rubtsov told TASS. “After the presidential decree on lifting restrictions on regular flights with Egypt, we resumed the negotiation process. Right now, I cannot say when we will see the results. In any case, we will definitely promote our planes there. Egypt is more interested in aircraft like MC-21,” Rubtsov says.

In’l Auto Manufacturing Co. to export 600 buses to Ghana for EGP 1 bn

The International Automotive Manufacturing Co. has won a EGP 1 bn contract to export 600 mini- and microbuses to Ghana’s Education Ministry, company General Manager Sayed Morsi tells Al Mal. With funding from General Motors Egypt and Mansour Group, the company is planning to increase production and begin exports to Ghana at a rate of 50 vehicles per month starting March, according to Morsi. The company is also in talks with the Ugandan government to export school buses.

Transport Minister in talks with US company RailRunner for rail transport cooperation

Transport Minister Hisham Arafat has met with a delegation from the US-based transport company RailRunner to discuss cooperation on rail transport, Al Shorouk reports.

23 consortia competing over the 6 October and new capital monorails

At least 23 consortia are bidding on contracts to design, finance, supply, operate, and maintain the 6 October-Giza and Nasr City-new capital monorails, as well as the Alamein-Ain Sokhna high-speed electric train, Al Mal reports. The list includes eight consortiums from China, seven from Turkey, and others from Iran, Ukraine, Portugal, Russia, Italy, and Kazakhstan. Egypt’s Wadi El Nile and Orascom Construction are reportedly also planning to join the project as subcontractors with the international companies.

Banking + Finance

CBE greenlights Banque du Caire’s establishment of EGP 500 mn financial leasing arm

The CBE has approved Banque du Caire’s plan to set up a financial leasing arm for the bank with EGP 500 mn in capital, Al Mal reports. The new company comes as part of BdC’s strategy to create new non-banking financing channels.

Other Business News of Note

Arbitration cases at CRCICA drop to 65 in 2017

The Cairo Regional Center for International Commercial Arbitration (CRCICA) received 65 new cases in 2017, down from 91 cases in 2016, Director Ismail Selim tells Al Mal. In 1Q2017, the center received 19 cases, with construction sector disputes alone making up 42.1% of cases.

Legislation + Policy

Council of State completes review of Economic Courts Law

The Council of State (Maglis Al Dawla) has completed its review of the Economic Courts Law, deputy head of the council Abdel Razek Mehran announced yesterday, Al Shorouk reports. The amendments would allow economic courts to handle consumer protection-related cases, and seek to expedite the dispute resolution process. The council is also nearly done with its review of the Public Procurement Act, the Unified Planning Act, the Unified Building Code, and the draft law to establish the Supreme Council to Combat Terrorism and Extremism, Mehran said.

On Your Way Out

10 Alexandria schools were evacuated yesterday after chlorine gas seeped into drinking water, sending three students to hospital, according to AMAY. Investigations into the incident are ongoing.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6030 | Sell 17.7030
EGP / USD at CIB:
Buy 17.56 | Sell 17.66
EGP / USD at NBE: Buy 17.58 | Sell 17.68

EGX30 (Wednesday): 15,037 (+2.2%)
Turnover: EGP 1.1 bn (2% BELOW the 90-day average)
EGX 30 year-to-date: +0.1%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 2.2%. CIB, the index heaviest constituent closed up 1.8%. EGX30’s top performing constituents were EFG Hermes up 6.0%; SODIC up 5.6%, and Palm Hills up 4.8%. Yesterday’s worst performing stocks were Eastern Co down 0.4%; Telecom Egypt down 0.3%; and Amer Group closed flat. The market turnover was EGP 1.1 bn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +77.0 mn
Regional: Net Long | EGP +39.4 mn
Domestic: Net Short | EGP -116.4 mn

Retail: 58.9% of total trades | 52.3% of buyers | 65.6% of sellers
Institutions: 41.1% of total trades | 47.7% of buyers | 34.4% of sellers

Foreign: 17.6% of total | 21.0% of buyers | 14.1% of sellers
Regional: 14.3% of total | 16.1% of buyers | 12.5% of sellers
Domestic: 68.1% of total | 62.9% of buyers | 73.3% of sellers

WTI: USD 61.8 (-2.51%)
Brent: USD 65.52 (-2.0%)

Natural Gas (Nymex, futures prices) USD 2.7 MMBtu, (-2.25%, March 2018 contract)
Gold: USD 1,316.2 / troy ounce (-1.0%)

TASI: 7,417.17 (-0.66%) (YTD: +2.64%)
ADX: 4,595.69 (+1.21%) (YTD: +4.48%)
DFM: 3,353.98 (+0.83%) (YTD: -0.48%)
KSE Weighted Index: 409.5 (+0.56%) (YTD: +2.01%)
QE: 8,887.74 (+2.73%) (YTD: +4.27%)
MSM: 4,971.71 (-0.81%) (YTD: -2.5%)
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Calendar

08-11 February (Thursday-Sunday): Furnex & the Home international trade fair, Cairo International Convention Center.

10-12 February 2018 (Saturday-Monday): Third Africa STI Forum, 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.

05 March (Monday): Egypt’s PMI reading for February released.

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): Labor 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 (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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