Wednesday, 14 February 2018

Eurobond issuance is closed and 3x oversubscribed

TL;DR

What We’re Tracking Today

EXCLUSIVE- USD 4 bn eurobond issuance has closed and is 3x oversubscribed in a ringing endorsement of Egypt’s macro fundamentals. “It’s excellent news,” Finance Minister Amr El Garhy told us on a call last night. “Egypt has effectively re-opened the window for emerging market bond issuances despite the recent turmoil in global markets.”

Egypt successfully priced and closed a USD 4 bn, three-tranche offering. It breaks down as USD 1.25 bn in five-year notes with a yield of 5.58%; USD 1.25 bn in 10-year notes with a yield of 6.59%; and USD 1.5 bn in 30-year notes with a yield of 7.91%. “The pricing is very good in view of recent developments in international markets including rising US interest rates and…sharp fluctuations in global capital markets during the past two weeks,” the Finance Ministry said in a statement (pdf).

Strong demand from all corners of the world, including new appetite from Asia and the Middle East: Turbulence in global markets over the last two weeks failed to curb investor appetite for the sale, which was 3x oversubscribed only a few hours into its launch, opening with a total order book north of USD 12 bn from some 550 investors. As expected, US and European institutions had strong appetite for the offering, but Middle Eastern and Asian funds are represented in the order book in larger numbers than they were in Egypt’s previous offerings, Vice Minister of Finance Ahmed Kouchouk told us in a call overnight. “The issuance reflects foreign investors’ continued confidence in the Egyptian economy and faith in the government’s economic reform program,” he said.

Appetite was strong across all three tranches, capturing investors looking to exposure over both the short and long haul, among them global giants including Blackrock, Kouchouk said.

Egypt is the first emerging market to close a eurobond offering since before the selloff, Kouchouk said, echoing El Garhy and noting that a number of other EM including Indonesia have postponed or called off offerings in view of the global climate right now.

USD proceeds will be used to bolster the central bank’s foreign currency reserves, the ministry statement notes. El Garhy had previously said that the the bonds will be issued on the London and Luxembourg stock exchanges.

The offering is being closely watched by the international press, with the Financial Times noting (before the sale closed yesterday) that Egypt was betting on the international debt market in turbulent times.

Advisors: HSBC, Citigroup, JPMorgan Chase & Co, Morgan Stanley, and National Bank of Abu Dhabi led the issuance. Al Tamimi & Co. and Dechert were legal advisors to the government, while Linklater and Zaki Hashem & Partners were counsel to the bankers.

It’s a busy news day here at home: Today is the Accidental Legislation and Regulation Edition of Enterprise, with a flood of news on key economic legislation, including the executive regulations to the Natural Gas Act; amendments to the Capital Markets Act; a preliminary nod from the House on the Consumer Protection Act; and changes to the Customs Act. We have chapter and verse in Speed Round, below.

…and all is quiet (at the moment) on the international front as markets seem to have taken a breather in anticipation of US inflation figures due out later today that the Financial Times says will “set a tone after a week of turmoil…If the violent swings of the past few days have put portfolio managers on notice that the era of tranquil markets is over, the degree of inflationary pressure building in the US economy will be crucial in shaping what exactly the new environment looks like for fixed-income and equity investors.” CNBC also has a solid take on the story.

Need an explainer on rising US inflation and what it means for markets? Reuters has got your back.

The planned hike in the price of railway tickets has been delayed again until the end of the current school year, Transport Minister Hisham Arafat told reporters yesterday, according to Al Shorouk. The delay, which follows months of confusion on when the new prices would be announced, comes as the ministry waits for more students and state employees to register for discount cards, the minister said.

The general assembly of the House of Representatives is going into recess until 4 March, Al Shorouk reports. No details were provided on the reasoning behind the two-week recess. We’re also waiting for clarity on what this means for committee work, but our expectation is that committees will continue to meet. As we noted yesterday, parliament will also go into recess during the presidential elections, which are scheduled to take place on 26-28 March.

It’s a big day for Israel… Police have recommended that Prime Minister Benjamin Netanyahu be indicted on charges of bribery, fraud and breach of trust, Reuters and Bloomberg report. The Israeli leader claims the charges are being trumped up by enemies. The investigations, one of which alleges bribes upwards of USD 280k, have been ongoing for a year and now move into the hands of the attorney general, meaning we’re looking at weeks (if not months) of political turmoil wracking our eastern neighbor.

…and for South Africa, where the ruling ANC has ordered President Jacob Zuma to step down. Zuma appears to be defying the party, and there was “confusion on Tuesday evening over whether Zuma would address the public” this morning, Reuters reports.

And from all of us to all of you out there, Happy Valentine’s Day, in honor of which we join the Wall Street Journal in noting that “nothing says love like a plate of chicken wings.” (The killjoys at the Journal would also like you to know that they believe dark chocolate is the only healthy choice of chocolate for Valentine’s Day. We maintain there is no such thing as bad chocolate other than white chocolate … which ain’t chocolate.)

Squash champs ring the bell at the EGX: Egyptian squash champs Raneem El Welily, Nouran Gohar, and Tarek Momen rang the opening bell on the EGX on Tuesday. The ceremony was attended by EGX Chairman Mohamed Farid.

What We’re Tracking This Week

It’s interest rate week as the CBE’s Monetary Policy Committee meets tomorrow to set interest rates.

The Australian Embassy in Cairo is hosting a two-day capacity-building workshop in Cairo on 14-15 February on sustainable mining. The workshop — which will see experts from the Western Australian Department of Mines and Industry Regulation and Safety share their expertise with their Egyptian counterparts — is a reflection of Australian miners’ growing interest in Egypt and aims to be the starting point for “increasing cooperation between Australian and Egyptian mining officials and companies in 2018,” Ambassador Neil Hawkins said in a statement (pdf). “Egypt has strong potential to develop further its mining sector and attract significant international investment.”

The Egypt Network for Integrated Development (ENID/El Nidaa) will hold its fifth annual conference under the title “Youth Entrepreneurship as a Catalyst for Growth and Employment” in Luxor on Friday. Keynote speakers at the two-day conference the ministers of investment, social solidarity and housing. You can check out the agenda here (pdf).

Trial operations at the airport in the new capital are set to begin tomorrow, Egyptian Holding Company for Airports and Air Navigation Chairman Mohamed Said Mahrous tells Al Ahram.

On The Horizon

Pride Capital will be organizing a workshop to talk over big topics in fintech. The workshop will be on insurance tech, and how technology can deliver affordable, convenient health insurance. The event — with keynote speakers including Misr Life Insurance Chairman Ahmed Abdel Aziz and Vezeeta Founder Amir Barsoum — will be held on Monday, 19 February, at the Greek Campus on Tahrir. Register here.

If adding the word “blockchain” to the name of a listed company can quadruple its share price, what happens if you add it to a country? That’s the question the T20, a group of Egyptian alumni of top global business schools, will be asking next week at a what they’re billing as a “fireside chat” on blockchain technologies. Speakers will include:

  • EGX chairman Mohamed Farid
  • Royal Group (UAE) risk management manager Abdur-Raheem Mungrue
  • IBM Egypt CTO Mahmoud Badawi

Want to attend? The closed-door fireside chat takes place on Tuesday, 20 February at 7:30pm and is open to T20 members and select invitees from the larger business community. Enterprise readers may register here to request an invite. Non-members of T20 will be asked to pay a token admission fee.

Enterprise+: Last Night’s Talk Shows

The arrest of former state corruption watchdog Hesham Genena on the order of military prosecutors led the conversation on the airwaves last night.

Retired Egyptian general and Qatari intelligence bureau founder Mohamed Mansour almost immediately accused Genena of treason in remarks to Al Hayah Al Youm’s Nahawand Serry, claiming Genena is funded by “conspirators” trying to damage Egypt. (watch, runtime 7:47).

Kol Youm’s Amr Adib slammed the notion that Genena’s arrest could be at all related to the upcoming presidential election. Adib also said that Genena’s statements to the press, in which he claimed to have incriminating evidence against several top military generals, only served to further complicate things for him and his presidential candidate of choice, former military chief of staff Sami Anan (watch, runtime 4:06).

Masaa DMC’s Osama Kamal echoed Adib’s thoughts, pointing out that Anan has denied the verity of Genena’s claims, which, if true, would further incriminate Anan and Genena along with him (watch, runtime 11:50).

Kamal then shifted his attention to the newly-passed Capital Markets Act (full story in Speed Round, below). MP Ahmed Khalil Khairallah of the Islamist Al Nour Party said the law will play an important role in improving Egypt’s economy (watch, runtime 3:40). Brilliant analysis.

Yahduth fi Masr’s Sherif Amer also zeroed in on economic legislation with Customs Authority head Magdy Abdel Aziz explaining that the amendments to the Customs Act will tighten regulations on temporary exemptions from duties (watch, runtime 2:16).

Over on Hona Al Asema, Lamees Al Hadidi spoke to Misr Insurance Holding Company Chairman Mohamed Youssef about President Abdel Fattah El Sisi’s proposed life insurance scheme for private sector workers. Youssef said that banks are working on launching EGP 500 CDs with yields of 16% that will act as life insurance policies and pay EGP 10-50k in cases of natural death and up to EGP 200k in accidents. Each individual will be allowed to buy up to five certificates, he said (watch, runtime 10:29).

Youssef also phoned in to Masaa DMC for a similar conversation (watch, runtime 4:32).

Lamees also had a chat with Electricity Ministry spokesman Ayman Hamza, who explained that intermittent power outages hitting 6 October City are the result of grid upgrades being carried out to accommodate the area’s growing population and power needs. Work should be complete by mid-2018, Hamza said, noting that similar upgrades will be carried out in various areas across the country during the course of the year (watch, runtime 5:34).

Speed Round

Speed Round is presented in association with

LEGISLATION WATCH- The House of Representatives voted into law yesterday amendments to the Capital Markets Act that pave the way for the introduction of new financial instruments. The act saw amendments to some 45 articles, the most extensive change to the law since it was first issued 26 years ago, Investment Minister Sahar Nasr said on Tuesday, AMAY reports. Nasr also noted that there are more amendments to the act in the pipeline.

So, what’s new? Readers of Enterprise are likely familiar from our past coverage with most of the major changes. They include:

  • Setting up a framework for companies and the government to issue sukuks. Details of procedures for issuance will be laid out in the executive regulations, but what you would need to look out for is that the law prohibits holding more than one sukuk issuance at a time.
  • Allowing for trading of futures contracts and the opening of an exchange for futures. The amendments also set a minimum capital base of EGP 20 mn for brokerages looking to trade on futures exchanges.
  • Allowing for the establishment of a commodities exchange as well as privately-owned stock exchanges. Private exchanges would face licensing fees of no more than EGP 100k.
  • Reducing listing fees to 0.002% of the value of the financial instrument or stock to encourage smaller companies to list.
  • Tightening penalties for violators of the act by setting a fine of no less than EGP 20 mn and prison terms of no more than five years.
  • Setting up a federation for non-banking financial companies similar to the Federation of Egyptian Banks.

No short selling or short-term bonds yet? Would-be shorts and issuers of short-term paper will have to wait a while longer, it seems—we could find no reference to either in official documentation released yesterday. The Financial Regulatory Authority (FRA) had said that short-selling will be part of the executive regulations of the act, which are currently still being drafted. We had noted that FRA had been trying to squeeze short-term debt instruments into the act, but that appears to not have made it. We assume these would either be included in the upcoming regs or introduced to the law later under the additional amendments that Nasr signaled yesterday.

You can read the full Capital Markets Act courtesy of Youm7 or skim a side-by-side comparison of the old and new law from Al Mal (if you can decipher it).

LEGISLATION WATCH- The House also gave a preliminary nod yesterday to the amended Consumer Protection Act, according to Youm7, which stands out among all of the Ismail government’s economic legislation as the only one that is clearly statist and anti-free-market. The latest draft of the act has not yet been released, so there are still some questions on what is in the law.

What we know about the Consumer Protection Act: The latest to come out of the act is that it enshrines the powers with any humorless Consumer Protection Authority (CPA) head to ban advertising he or she believes is misleading or harmful, the newspaper notes. Newly revealed features of the law include consumer protection provisions in e-commerce. The law will also force retailers to print a breakdown of prices on their goods including profit margins, media reports suggest (take that with a heaping cup of salt, folks). The new law also lays out guidelines for product recalls as well as enforcing stricter penalties for those violating consumer protections regulations on quality and health issues. The proposed bill would also make the CPA an independent regulator under cabinet and not under the Supply Ministry. We’ve also noted previously regulations in the act that would impact auto dealerships.

Perhaps the most burning question for the private sector (and one which the government hasn’t mentioned in over a year) are provisions on price controls. From what we’ve been hearing, the CPA can move to regulate and institute price controls on goods it deems essential or strategic after receiving sign-off from cabinet.

LEGISLATION WATCH- The Ismail cabinet introduced its proposed Cyber Crimes Act to the House yesterday, Al Shorouk reports. A number of MPs have noted (approvingly, we add) that the law would make it easier to run surveillance of social media, but would oblige the security and policy services to seek authorization before tracking any one specific individual. The Cyber Crimes Act will expand the definition of online crime to include “spreading false news on Egypt,” which will apply to all media outlets.

Cabinet has also introduced amendments to the Traffic Act.

LEGISLATION WATCH- The Natural Gas Act is now in effect: The Ismail Cabinet appears to have finally signed off on the long-awaited executive regulations to the Natural Gas Act, according to a statement carried by Reuters. The Natural Gas Act — which effectively deregulates the industry by allowing the private sector to import and distribute natural gas and reducing the state’s role to that of market regulator — was approved by the House of Representatives last August. While details on the contents of the regs have yet to emerge, officials had said last year that they would outline the exact role and duties of the new state regulator, which is meant to lead the state’s gradual transition out of the industry by 2022, monitor market activity, and issue licenses for natural gas imports (that at least four companies have applied for already). The regulations are also expected to offer incentives that will attract investments to the LNG, petrochemicals, and fertilizers industries. Oil Minister Tarek El Molla had previously said that foreign companies would be allowed to export Egypt’s oversupply of natural gas in five years’ time. The state had tapped Logic Management Consulting to advise on the setup of the gas market regulator. We’ll have more once we get our hands on a copy of the executive regulations.

LEGISLATION WATCH- Amendments to the Customs Act will expand exemptions for production inputs. The Finance Ministry announced changes to the Customs Act designed to expand exemptions and tighten loopholes for tax dodgers. The amendments will expand temporary exemptions for productions inputs throughout the value chain and, for the first time, include packaging equipment on the list items eligible for temporary exemptions. Goods that have been imported to be refined and then re-exported will also receive temporary exemptions, according to a ministry statement.

Tightening loopholes: The amendments, which received cabinet approval last week, reduce the duration of temporary licenses to one year with the possibility of a one-year renewal period, down from four years right now. The move is meant to tighten supervision on temporary exemption grants, the statement reads. Importers who want to use for other purposes goods that were originally imported as production inputs must pay the full custom duties and an additional penalty tax. That tax has been reduced to 1.5% from 2%.

Reducing congestion at customs: The amendments will also reduce the time goods are allowed to remain in storage at Customs Authority before being claimed to six months.

In other customs-related news, Trade and Industry Minister Tarek Kabil extended the grace period for importers to comply with amendments to the Importers Registry Act by another six months, the ministry said in a statement on Tuesday. The amendments include increasing the minimum capital for individuals to be registered to EGP 500k from EGP 10k, for limited liability companies to EGP 2 mn from EGP 15k, and for joint-stock companies to EGP 5 mn. The law also imposes stricter penalties for violation of import regulations.

Egypt is “really important for us,” BP CEO Bob Dudley told CNBC’s Steve Sedgewick. “[BP] invested more money in capital last year in Egypt than any other country in the world. So people are very surprised about that we’ve been here for 50 years, we’re producing lots of gas natural gas.” Dudley adds that, despite the major political events since 2011, BP has “never missed a day of production.” He also praised the performance of the current government, saying “the governments have been good but this government is actually great. President on down has always said I’m going to cut through the red tape. Tell me what needs to be done. It’s excellent. The Prime Minister, Energy Minister, all of them one team. So that’s really rare. Now in a world where a government just works to move things fast quickly helps track.”

FDI in oil and gas sector up to USD 10 bn this year: Investment by international oil companies reached USD 10 bn so far in FY2017-18, Oil Minister Tarek El Molla said in an interview with Al Borsa. This will likely increase, as the ministry plans to issue exploration tenders, including in the East Mediterranean and in the Nile Delta region sometime in 2H2017-18, said El Molla. The ministry plans to float tenders in the West Mediterranean once seismic mapping of the area is complete and a marketing strategy for the field has been developed. He added that the Red Sea and South Egypt areas will also see tenders for the very first time once geological data has been collected.

El Molla once again reassured IOCs that Egypt is committed to paying its arrears, noting that they now stand at USD 2.3 bn since the last USD 2 bn payment was made in June 2017. He noted that these were lowest levels of IOC-debt since 2013. (The question remains, though: What about small- and mid-sized players, who have seen their receivables balloon at the same time as the global majors are being paid out?)

Pay attention, Israel and Jordan: “Our first priority when Egypt begins exporting is to meet previous export commitments we have made and but were unable to meet over the past few years,” said Tarek El Molla. The statement (toned down and buried as it is) likely carries significant implications for energy politics in our little neighborhood. Israel Electric won a USD 1.76 bn international arbitration award against state petroleum companies EGPC and EGAS and pipeline operator EMG for halting gas supplies to Israel five years ago. The arbitration case remains a primary sticking point preventing exports from Israel’s Leviathan gas field to Egypt. Prime Minister Sherif Ismail has said there will be no open discussion of gas imports from Israel until the arbitration award is cleared. Egypt’s gas contracts Jordan had also been severely disrupted back then on the back of attacks on Egypt’s pipeline.

El Molla also signed contracts with Baker Hughes to set up an online platform to market Egypt’s discoveries, AMAY reports. The database is one of a series of tools announced by El Molla on Monday which aim to spur further oil and gas investments.

M&A WATCH- Shuaa Capital is assessing potential acquisitions in Egypt’s financial services industry, Bloomberg reports. The expansion could also come through faster hiring, Chairman Jassim Alseddiqi also suggested. Shuaa has plans to become one of Egypt’s five largest brokerages “as soon as this year” and has already applied for investment banking and asset management licenses. CEO Fawad Tariq Khan had said that “now is the time to invest in Egypt,” but cautioned that “his biggest concern in Egypt is whether authorities will push ahead with the remainder of its economic program.” (Call us state apologists, but we respectfully draw Mr. Khan’s attention to the LEGISLATION WATCH stories above on that last point.)

EFG Hermes replaced Elsewedy Electric on the MSCI Global Small Cap Index (pdf). The move is part of the MSCI Global Standard Indexes’ semi-annual review.

INVESTMENT WATCH- China’s Wuhan to invest in EGP 500 mn building materials factory: China’s Wuhan Corporation has signed a partnership agreement earlier this week with a consortium of unnamed Arab investors to establish an EGP 500 mn building materials factory in the Suez Canal Economic Zone, Al Borsa reports. Matouk Bassiouny was reportedly tapped as legal counsel to Wuhan on the transaction, while TMS Law Firm advised the group of Arab investors.

Will the Trump administration unfreezing the c. USD 200 mn in military aid it withheld from us last year? Foreign Ministry spokesperson Ahmed Abu Zeid said the US would release the full USD 1.3 bn in military aid to Egypt in its FY2018 budget and will do so in again in FY2019. His statement came in response Hona Al Asema’s Lamees Al Hadidi questioning remarks made by US Secretary of State Tillerson that US military aid to Egypt amounted to USD 1 bn. The Trump Administration had gone to the US Congress to request the funds for Egypt, added Abu Zeid (watch, runtime: 4:10).

Are Abu Zeid’s remarks corroborated by the US budget? That appears inconclusive when looking at the Trump Administration’s FY2019 budget proposal (pdf). “The Budget also dedicates significant security and economic assistance to other key partners in the region, including Egypt,” the proposal reads, without listing a figure. It lists USD 3.3 bn to Israel and USD 1.3 bn to Jordan. Defense News, however, seems to say that Egypt is indeed in line to receive USD 1.3 bn in military assistance, while Jordan will fact receive USD 350 mn. It also says that US President Donald Trump is requesting a USD 1 bn cut to the State Department’s Foreign Military Financing program for 2019 to USD 5.3 bn (draw your own conclusions as to what that may mean for Jordan; either way, it seems a bit odd to us). Trump said Monday that aid expenditures in the Middle East were “a mistake,” erroneously claimed that the United States has spent USD 7 tn in the Middle East over the past 17 years, according to the Washington Post. As we noted yesterday, analysts expect Egypt and a number of key allies will be spared the cuts.

Speaking of Tillerson, the Secretary of State urged the GCC to restore unity and resolve the Qatar dispute, Reuters reports.

Genena detained by military prosecution for 15 days: Military prosecutors ordered former head of the Central Auditing Organization Hesham Genena to be detained for 15 days pending investigation of his claim that he holds incriminating evidence against the Supreme Council of Armed Forces, state news agency MENA reported, according to Reuters.

Genena’s detention comes two days after the release of his interview with HuffPost Arabi, in which he threatened to release the evidence if former military chief of staff Sami Anan is subjected to harm in military detention. Genena had been one of Anan’s top aides during the latter’s short-lived presidential bid.

Meanwhile, Anan’s son distanced himself from Genena’s comments to HuffPost Arabi. Speaking to Dream TV’s Wael El Ebrashi on Monday night, he said that it would not make sense for his father to incriminate the military council to which he once belonged. He also added that he would take legal action against Genena for “spreading pro-Ikhwan rumors and propaganda”.

MOVES- CAPMAS has a new boss. President Abdel Fattah El Sisi appointed Khairat Mohamed Barakat as the new head of state statistics and census agency CAPMAS, Al Shorouk reports. Barakat succeeds Abu Bakr El Gendy, who became Local Administration Minister in last month’s limited cabinet shuffle.

Turkish President Tayyip Erdogan has warned Cyprus not to “overstep the mark” in the eastern Mediterranean after the Cypriot government accused the Turkish military of blocking an Eni drill rig from exploring for natural gas since Friday, Reuters reports. “Our warships and security units are following all developments in the region with the instruction to do whatever is necessary,” he said. Cyprus President Nicos Anastasiades declined to comment on Erdogan’s remarks, but said there was no cause for worry.

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Image of the Day

WWII wreck off Egypt coast wins snapper the 2018 Underwater Photographer of the Year award: UPY awarded Tobias Friedrich the 2018 Underwater Photographer of the Year award for a panoramic shot inside a Second World War wreck of the armed British freighter Thistlegorm off the Sinai coast. Friedrich said the picture (dubbed Cycle Wars because of the motorcycles lined up in its center) took years to execute due to the physical constraints posed by the layout and structure of the wreckage. Find out more here.

Egypt in the News

The arrest of former corruption watchdog Hisham Genena and his referral to the military prosecution tops coverage of Egypt in the foreign press this morning, with stories from the Guardian, Wall Street Journal, the Times of Israel, and Aljazeera.

That comes as 14 international and regional rights groups, including Human Rights Watch said the scheduled “farcical” presidential elections do not meet the “minimum requirements” for a fair and free vote, according to a joint statement.

Meanwhile, Michele Dunne writes for the Carnegie Endowment for International Peace that President Abdel Fattah El Sisi “has been unable to deliver the prosperity and security he promised, and neither seems to be on the horizon.”

Sudan should learn from Egypt’s missteps in the management of its exchange rate if it plans to overcome its current economic difficulties, Brendan Meighan writes for the Carnegie Endowment. “Sudan’s refusal to liberalize the SDG’s exchange rate and ongoing battle with the black market have ignored the lessons from Egypt’s own mistakes in managing its currency,” he says, explaining that attempts to stabilize the exchange rate have been both feeble and short-sighted. Instead, Sudanese authorities should take more serious action and work at improving relations with both the US and its North African neighbors to enable itself “to work with regional and global multilateral organizations to come up with an economic reform plan.”

Concerns over Palestinian reconciliation efforts following Fawzy’s removal: The removal of former General Intelligence Director Khaled Fawzy has some Palestinians worried an already stagnant national reconciliation process could face further delays, Adnan Abu Amer writes for Al-Monitor. Fawzy had been key to reconciliation talks between Fatah and Hamas, which have been at a stalemate since the two sides disagreed over Hamas’ disarmament back in November.

On a related note, Fatah Central Committee member Azzam al-Ahmed said he briefed acting intelligence chief Abbas Kamel “on the latest political developments related to the Palestinian cause,” WAFA reports. Kamel noted that Egypt was committed to aiding the reconciliation efforts, as well as the peace process with Israel.

Other stories worth noting in brief:

  • Egyptian media is the problem on GERD, says Ethiopian media: The Egyptian media has been the primary force behind tensions over the Grand Ethiopian Renaissance Dam (GERD), according to The Ethiopian Herald.
  • The National Press Authority is making it mandatory for journalists to apply for permits before traveling to seven countries in the region going through political turmoil, including Lebanon, Sudan, and Libya according to Al Monitor.
  • Al Monitor shines the spotlight on Egyptian NGOs banding together to end FGM.

On Deadline

Egypt should axe its plans to export natural gas and instead ensure its domestic needs will be met for the years to come, Hussein Abd Rabbo writes in amateur analysis at Al Borsa. Previous governments made the mistake of exporting natural gas without a plan until they turned the country to a net importer, he writes. He advises both caution and thoroughness, urging the government to ensure that its plans to turn Egypt into an energy hub are sustainable.

Worth Watching

Biblical miracles 2.0 — turning air into booze: A US startup Catalyst has developed a commercial-scale reaction that turns carbon dioxide from the air, sunlight, and water into pure ethanol for use in consumer products like spirits and perfume, Reuters reports (watch, runtime: 1:40). The reaction, which is carbon-negative (removes emissions from the atmosphere), is hoped would provide a sustainable way to produce these products.

Diplomacy + Foreign Trade

Foreign Minister Sameh Shoukry began yesterday a two-day visit to Madrid, where he will meet today with his counterpart Alfonso María Dastis and others to discuss political, economic, and commercial cooperation, as well as other issues including illegal migration and combating terrorism, according to a ministry statement.

Shoukry will then head to Germany tomorrow for the annual Munich Security Conference, where he is set to be the keynote speaker in a special session on counterterrorism titled "Jihadism after the Caliphate." During the conference, Shoukry will also meet with other officials including the UN Secretary General, Iraq’s Prime Minister, Armenia and Russia’s foreign ministers, as well as various European ministers from France, Germany, and Greece, including defense and interior ministers.

President Abdel Fattah El Sisi met yesterday with the director of Russia’s Foreign Intelligence Service Sergei Naryshkin to discuss security cooperation between Cairo and Moscow, according to an Ittihadiya statement. El Sisi and Naryshkin also discussed Egypt’s anti-terror campaign, among other regional issues. Egypt’s acting head of General Intelligence Abbas Kamel also sat in on the meeting.

Energy

SDX commissions Sino-Tharwa rig for well at South Disouq

SDX Energy announced signing a rig contract for the ST-6 Rig with Sino-Tharwa Drilling Company for the Ibn Yunus-1X exploration well at South Disouq. “The agreement is for four firm wells and one contingent well. Sino-Tharwa’s ST-6 rig is currently drilling for another operator and is anticipated to be released in late February 2018 from a location in the Western Desert, Egypt. It will then be mobilized to the Ibn Yunus prospect location. Following inspection and rig up, the well is anticipated to be spud in mid-March 2018.”

EEHC receives three financial offers for USD 8 bn Hamrawein power plant

The Egyptian Electricity Holding Company (EEHC) has received financial offers from three consortia — General Electric-Harbin Electric, Mitsubishi-Hitachi, and Shanghai Electric-Dong Fang — for the USD 8 bn, 6 GW Hamrawein “clean coal” plant, unnamed Electricity Ministry sources tell Al Mal. The EEHC will reportedly begin looking into the offers today. Ministry sources had previously said the selection process would take up to three months.

El Molla discusses investments with Algerian Energy Minister

Oil Minister Tarek El Molla met with Algeria’s Energy Minister Moustafa Guitouni and his accompanying delegation in Cairo to discuss investment opportunities for Egyptian companies in Algeria, Al Mal reports. The two also discussed cooperation on the petrochemicals industries and the possibility of allowing the Egyptian Drilling Company to operate in the country.

Tourism

Tourists heading back to Egypt, Turkey -Tui

Turkey and Egypt are returning to popularity for UK holidaymakers, Tui’s CEO Fritz Joussen says, according to travel portal TTG. “We see a return to Africa — in winter we see a return to Egypt quite significantly…We also see a return to Turkey where we are still in the volume-building phase,” Joussen notes. TUI also said bookings to Turkey from Germany for this summer were up by around 50%, while Egypt was also up, according to Reuters. The Financial Times also has the story.

Automotive + Transportation

Arafat breaks ground on USD 450 mn multipurpose terminal at Safaga Port

Transport Minister Hisham Arafat broke ground yesterday on a USD 450 multipurpose terminal at the Safaga Port, according to a ministry statement. The new terminal will have the capacity to handle 500k containers carrying 2.5 mn tonnes of cargo per year in its first phase. At completion, the 400 sqm terminal’s capacity will increase to 7 mn tonnes of cargo a year. The ministry had signed an MoU with the China Road and Bridge Corporation back in December to construct and operate the new terminal under a build-operate-transfer framework.

Transport Ministry studying Ain Sokhna-Hurghada high-speed train line

The Transport Ministry has begun feasibility studies for 350-km high-speed rail line connecting Ain Sokhna to Hurghada, Minister Hisham Arafat has announced, according to Al Masry Al Youm. The new line would also be connected to the Alamein-Ain Sokhna high-speed train line, which has received offers from 23 international consortiums.

Banking + Finance

NI Capital’s Tamweely receives temporary microfinance license

The Financial Regulatory Authority (FRA) awarded Tamweely a temporary microfinance license, with the company looking to launch operations “in the next few days,” said Chairman Amr Abul Azm. The company expects to receive the final license before the end of 1Q2018, Abul Azm said in a statement (pdf). Tamweely was established in August by state-owned investment bank NI Capital with an initial investment of EGP 50 mn.

Sports

Egypt to host air games over The Pyramids

Egypt’s first-ever Air Games have been slated for 25-29 April. Skydivers will be required to pay a fee of USD 2,000, while paramotor pilots pay USD 1,000 to get a “from-the-air-tour of the pyramids, followed by an airshow” that will participants hoist the “the largest Egyptian flag ever,” Al Masry Al Youm says. Further details for the event can be found here.

On Your Way Out

VOA’s newest photo essay trails political prisoners in Egypt as they exchange handmade Valentine’s Day gifts with their loved ones. “Despite pressure from Islamists, Valentine’s Day continues to be a big day for many Egyptians to express their feelings of love,” it says.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6443 | Sell 17.7443
EGP / USD at CIB:
Buy 17.64 | Sell 17.74
EGP / USD at NBE: Buy 17.60 | Sell 17.70

EGX30 (Tuesday): 14,730 (-1.1%)
Turnover: EGP 1.2 bn (6% ABOVE the 90-day average)
EGX 30 year-to-date: -1.9%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session down 1.1 %. CIB, the index’s heaviest constituent closed down 2.3%. EGX30’s top performing constituents were Ezz Steel up 4.4%; Eastern Co up 4.2%; and Juhayna up 1.8%. Yesterday’s worst performing stocks were EFG Hermes down 3.8%; Porto Group down 3.0%; and GB Auto down 3.0%. The market turnover was EGP 1.2 bn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -14.2 mn
Regional: Net Short | EGP -30.0 mn
Domestic: Net Long | EGP +44.2mn

Retail: 51.6% of total trades | 52.1% of buyers | 51.1% of sellers
Institutions: 48.4% of total trades | 47.9% of buyers | 48.9% of sellers

Foreign: 22.1% of total | 21.5% of buyers | 22.7% of sellers
Regional: 10.4% of total | 9.1% of buyers | 11.7% of sellers
Domestic: 67.5% of total | 69.3% of buyers | 65.6% of sellers

WTI: USD 59.14 (-0.25%)
Brent: USD 62.71 (+0.19%)

Natural Gas (Nymex, futures prices) USD 2.59 MMBtu, (+1.65%, March 2018 contract)
Gold: USD 1,331.2 / troy ounce (+0.36%)

TASI: 7,412.56 (-0.18%) (YTD: +2.58%)
ADX: 4,600.4 (-0.21%) (YTD: +4.59%)
DFM: 3,341.56 (+0.8%) (YTD: -0.85%)
KSE Weighted Index: 409.17 (+0.16%) (YTD: +1.93%)
QE: 8,987.51 (-0.63%) (YTD: +5.45%)
MSM: 5,003.67 (+0.02%) (YTD: -1.87%)
BB: 1,352.96 (+0.43%) (YTD: +1.6%)

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Calendar

12-14 February 2018 (Monday-Wednesday): Egypt Petroleum Show 2018 (EGYPS), New Cairo Exhibition Center.

14-15 February (Wednesday-Thursday): The Australian Embassy in Cairo’s two-day capacity building workshop on best practices for sustainable mining governance, Cairo.

16 February (Friday): The Egypt Network for Integrated Development’s (ENID/El Nidaa) “Youth Entrepreneurship as a Catalyst for Growth and Employment” conference, Jolie Ville Kings Island Hotel, Luxor.

19 February (Monday): Pride Capital will organize a talk on Insurtech, Greek Campus, Tahrir Square, Cairo.

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.

02-03 May (Wednesday-Thursday): Cisco Connect Egypt 2018, Nile Ritz-Carlton Hotel, Cairo.

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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