It’s interest rate day — is a rate cut in store at long last?

Egypt is getting ready to tap the market again: The Finance Ministry will begin approaching investment banks in a few days for a planned sale of EUR-denominated bonds after successfully raising USD 4 bn in eurobonds, Finance Minister Amr El Garhy told Bloomberg. “The sale will ‘ideally’ take place in April, and Egypt will be seeking European banks to manage the issuance, the minister said in a phone interview.” Egypt’s USD 4 bn eurobond issuance was 3x oversubscribed, the Finance Ministry said yesterday. El Garhy told Bloomberg Egypt “could’ve secured cheaper pricing since our risk position has improved since the last time we tapped the market, but the rise in yields on U.S. Treasuries has affected us.” The successful issuance is “the latest sign that investors’ appetite for relatively risky sovereign paper has been undimmed by the recent market turmoil,” Kate Allen writes for The Financial Times.

The eurobond issuances may be playing a role in expanding private sector credit: Private sector lending in Egypt, which has traditionally been stifled and crowded out by government borrowing from local banks, looks set to pick us the government turns to the international debt market and pushes forward with reforms, according to a research note from Capital Economics (pdf). Outside of select large borrowers, the private sector has always found it difficult to access credit from local banks. While private sector credit has been nominally rising at a rate of 11% y-o-y, real credit growth has been negative for much of the past 10 years. “The banking sector’s claims on the government have increased more than ten-fold in nominal terms and, as a share of total assets, they have risen from 20% to more than 45%.” Furthermore, banks have not had to meet liquidity restrictions on holding government debt, which have a risk rating of zero.

Liquidity will be increasingly available to the private sector, says Capital Economics, as the government turns to eurobond issuances, coupled with the fiscal tightening.

“A pick-up in lending to the private sector will be further supported by a loosening of monetary policy,” which could begin as early as this week, they added. The firms sees interest rate cuts of 550 bps this year and a further 200 bps in 2019, a pace it believes may be more aggressive than the central bank has in mind.

And so, all eyes turn to the Monetary Policy Committee meeting today to see if the CBE will start cutting interest rates. Based on annual inflation figures, which have fallen to 17.1% in January, analysts, including those from Pharos Holding, Arqaam and HC Securities, are suggesting that a rate cut is likely, but that it will be relatively muted as the CBE takes a cautious approach. CBE Governor Tarek Amer had said that the CBE will begin monetary easing “soon,” once the bank is sure it has a handle on inflation.

In global markets, US annual headline inflation for January rose to 2.1% for a second month running, exceeding the consensus forecast of 1.9%, the FT reports (paywall). Core consumer price inflation, which excludes energy and food, stayed steady at 1.8%, defying forecasts it would slip to 1.7%. The announcement is reigniting investor nervousness that the robust economy is stoking price pressures that could force the US Federal Reserve to raise interest rates more aggressively, the salmon-colored paper says.

It is not yet clear, with inflation moving past forecasts, whether emerging markets will continue to hold the line in the face of turbulent global markets. History suggests that emerging market equities will remain resilient if US inflation projections are met, writes Steve Johnson for the FT. Research by Daniel Salter, head of emerging market equity strategy at Renaissance Capital, suggests that four of the five 30%+ falls in the MSCI EM index since its inception in 1987 occurred within one month of US consumer price inflation hitting 3%.

“I regard the bitcoin craze as totally asinine”: Warren Buffett’s 94-year-old business partner is not a friend of bitcoin. Or of getting old. And he has plenty of things to say about oil, climate change, how to invest and how to live a successful life. See wall to wall coverage in the Financial Times, CNBC, and Business Insider.

Jacob Zuma resigned as president of South Africa yesterday, succumbing to pressure from the ruling African National Congress “to bring an end to his nine scandal-plagues years in power,” Reuters reports. ANC chief whip Jackson could be sworn in as head of state as early as Friday, according to the newswire. The ANC had given Zuma a 48-hour window to resign or risk facing a vote of no-confidence. You can catch Zuma’s full farewell address here (runtime 1:09).

The most-clicked stories in Enterprise in the past week:

• Finance Ministry announces USD 4 bn eurobond offering is 3x oversubscribed (Enterprise)
• The Economist breaks down our failed subsidies regime. (Economist)
• Explainer: Rising US inflation and what it means for markets. (Reuters)
• Egypt bans SNL Arabia over “[redacted] phrases and insinuations.” (The Guardian)
• Finance Ministry’s half-year review. (Finance Ministry, pdf)
• Are banks worthless? (Matt Levine’s Bloomberg column)

Something to keep you up at night this weekend: We have debated for the last week whether or not to run with this for fear we will upset the algorithms that govern our deliverability to your inboxes. If you have a teen (or a pre-teen) go read What teenagers are learning from online [films that show intimate situations between (usually) consenting adults].

The arrest last night of 2012 presidential candidate and ex-Ikhwan member Abdel Moneim Aboul Fotouh was a quiet affair on the air waves compared to the stir caused by the arrest of former top auditor Hesham Genena. Aboul Fotouh’s predicament received little attention from the nation’s talking heads, especially with Amr Adib off for the evening and Hona Al Asema’s Lamees Al Hadidi making do with a pre-recorded episode.

Al Hayah Al Youm’s Nahawand Serry spoke to retired general Mohamed Zaki El Alfy, who lambasted the Islamist, calling him “a tool being used by conspirators” to undermine Egypt’s stability (watch, runtime 3:19). The host also launched her own offensive against Aboul Fotouh for his interview with Qatari mouthpiece Aljazeera, saying his statements peddled the Ikhwani agenda (watch, runtime 4:53).

Masaa DMC’s Osama Kamal spoke to Islamist expert Tharwat El Kharbawy, who said the arrest is completely warranted given Aboul Fotouh’s connection to the Ikhwan, which remained unbroken despite him ostensibly leaving the group to run in the 2012 presidential election (watch, runtime 9:37).

Kamal then jumped over to a discussion over the EGP 245 bn in debt that different government bodies owe the state from FY2016/17. House Planning and Budgeting Committee deputy head Yasser Omar said that state-owned media alone has racked up a tab of EGP 11 bn over the course of 30 years, according to Omar. The MP suggested that it may be best to simply exempt the press from making these payments since “they don’t have the cash,” which Kamal said could set a dangerous precedent for tax and debt evasion for both institutions and individuals alike (watch, runtime 6:24).

Kamal also discussed the apparent dumping of Turkish products in the Egyptian market with Anti-Dumping Authority head Ibrahim El Segeni, who said that a number of Turkish-made products are being sold in Egypt at lower prices than in Turkey (watch, runtime 3:52). The garment industry is feeling the pinch from this practice, according to Chairman of the Federation of Egyptian Industries’ readymade garments division Mohamed Abdel Salam. He claimed that there are some goods that make their way from Turkey into Egypt illegally (watch, runtime 7:10).

Over on Yahduth fi Masr, Sherif Amer had a chat with Cabinet spokesman Ashraf Sultan to recap the most important decisions taken during the ministers’ weekly meeting yesterday (we have chapter and verse in Speed Round, below) (watch, runtime 3:00).

Egypt’s GDP growth for 2Q2017-18 rose to around 5.3% from 3.8% in the same period last year, Planning Minister Hala El Saeed said on Wednesday, according to Reuters. GDP for 1H2017-18 rose to 5.2%, from 3.6% in 1H2016-17, she added, AMAY reports. She attributed the growth to a 1.8% rise in Egypt’s exports, a 1.9% increase in investments, and a 1.6% rise in consumer spending.

New natgas regulator to issue first LNG import license before the end of Feb? The newly-established natural gas market regulator is expected to issue the first LNG import license to the private sector before the end of February, when its board meets for the first time, sources close to the matter tell Al Shorouk. While it remains unclear which company will make the first draw, we had heard last year that EGAS gave BB Energy, Fleet Energy, and Qalaa Holdings’ TAQA Arabia preliminary approval on natural gas import licenses, following the issuance of the Natural Gas Act, which reduces the state’s role to regulator and opens the market to the private sector. Four other unnamed companies are reportedly also seeking import licenses.

Fees for using state infrastructure also to be announced: The board, whose full lineup will be announced next week, will also discuss the fees private sector players will have to pay to use the state’s natural gas grid under the act, the sources also said. News of the meeting comes one day after Ismail Cabinet issued the executive regulations to the Natural Gas Act, officially bringing it into effect. Oil Minister Tarek El Molla, who will chair the board, had previously said that the state will fully exit the market by 2022.

Energy security and stability are key for the welfare of the Egyptian people, Oil Minister Tarek El Molla told CNBC in an interview. Securing a reliable supply of energy products to Egyptians is the country’s priority, then the government will look at “how you would optimize,” El Molla said, adding that “the good success that we have had over the last few years was through this ‘good partnership’ [Egypt has with IOCs].” This process started with importation, but now Egypt is on track to reach self-sufficiency before year-end and has a long-term sustainable production strategy.

The government also has plans to reduce fossil fuel dependency to 70% by 2035 from a current 90%, El Molla said, explaining that slashing fuel subsidies has allowed for more competition from renewable energy sources. “It now makes sense to start developing the renewables industry,” he says. El Molla, a technocrat by nature, stated that “success would create professional jealousy and rising star countries would also attract more jealous people or jealous countries or whatever… so we will always be criticized for any of these thing,” when asked about the criticism to the presidential elections.

Gov’t expected to sign off on USD 900 mn Elsewedy-Marubeni-Masdar wind farm project this month: The Ismail government hopes to sign off on the USD 900 mn development of two wind farm projects planned with the Elsewedy Electric-Marubeni-Masdar consortium, government sources tell Al Borsa. The New and Renewable Energy Authority (NREA) will grant the consortium land for the projects, which have a combined capacity of 700 MW, as soon as the Ismail Cabinet signs off on the contracts, the sources said. They added that the consortium is in talks over the locations of the project, initially planned for Ras Ghareb and the Gulf of Suez, with the West Nile area being a possible a candidate. Elsewedy Electric had said that the final price tag on it has not been set yet. Official sources, however, are saying that the government will not budge from a feed-in-tariff rate of USD 0.038 per KW.

Former presidential candidate Aboul Fotouh arrested over alleged contact with the Ikhwan: Former Islamist presidential candidate Abdel Moneim Aboul Fotouh was arrested last night “over allegations that he had contacts with the outlawed Muslim Brotherhood,” the Associated Press reports. The State Security prosecutor ordered the arrest of Aboul Fotouh and at least five members of his Strong Egypt political party. Word at dispatch time was that Aboul Fotouh remained in custody to face questioning, while those detained with him had been released. The 2011-12 presidential candidate’s arrest comes days after his televised interview with Aljazeera earned the wrath of the country’s talk show hosts. Reuters also has the story.

Aboul Fotouh was a senior member of the Ikhwan until 2011, when he broke with the group to mount an independent bid for the presidency in the 2012 election. His

“Islamism-lite” platform attracted support from some liberals at the time.

CABINET ROUNDUP- The Ismail Cabinet approved yesterday amendments to the Anti-Terrorism Act that tighten penalties for harboring terrorists or aiding them in hiding from security forces, according to an official statement. The amendments also require all hotels to provide the state with updated records of their guests.

You’re going to have to put a GPS tracker on your Jeep if you want to renew your license: The ministers also signed off on amendments to the Traffic Act that would require four-wheel drive vehicles to install a GPS tracker as a condition of being licensed. Owners of these vehicles will also be required to notify the authorities if they intend to sell or rent their cars, and provide the renter or buyer’s personal information. Penalties for violators of these requirements and individuals who disable their tracking devices include a prison sentence of at least two years and a fine of no more than EGP 5,000. The crackdown on four wheelers is a result of their popularity with terrorists, particularly those who hide out in mountainous areas, officials said.

Cabinet also approved a draft law on solid waste management and agreed to begin implementing the new strategy outlined in the legislation in Gharbeya, Kafr El Sheikh, Qena, and Assiut. No details were provided on what exactly the strategy entails, but Environment Minister Khaled Fahmy told reporters yesterday that new garbage collection fees will be imposed nationwide, Al Masry Al Youm reports. The exact amount and process of payment for these fees has yet to be determined, according to Fahmy.

Other approvals worth noting:

• Draft legislation to restructure the Egyptian Endowments Authority and its management of investments and charitable endowments to ensure their growth;
• A bundle of decisions and recommendations from the ministerial committee for the resolution of investment disputes;
• A EGP 15 mn direct order agreement with the Egyptian Pharmaceutical Trading Company to import unspecified medications for the domestic market.

Is Egypt really expanding it role in Haftar’s drive to take Derna? Eastern Libyan military commander Khalifa Haftar will lead an attack on Derna in coordination with Egyptian military forces, speaker of the Tobruk-based internationally recognized parliament Aqilah Saleh told Youm7.

The statement, brief as it was, is causing issues in Libya, as the rival Libyan Higher Council of State issued a statement condemning the Tobruk-based authorities for calling for Egypt’s military intervention in Libya, which they described as "a flagrant violation of the sovereignty of the Libyan state”, according to Xinhua. The statement urged the Government of National Accord and the United Nations to condemn the “dangerous” call.

A custom-made Patek Philippe watch that once belonged to Egypt’s King Farouk is going on auction at Christie’s Dubai in March, according to Forbes Middle East. The ‘Reference 1518’ model — made of 18K gold and engraved with Egypt’s royal crown and the letter F — carries a presale price tag of USD 400-800k.

The arrest of Hisham Genena is still the top story on Egypt in the international press this morning, but that’s only because news desks here and abroad are literally asleep. As soon as they wake, the story of the day will be the overnight arrest by military prosecutors of Islamist former presidential candidate Abdel Moneim Aboul Fotouh on charges he had contact with the banned Muslim Brotherhood.

Elsewhere today:

Will Egypt’s Benban solar park begin to attract private investment into the country’s promising PV market? It already is, but Green Tech Media misunderstands the role of development finance institutions de-risking EM development projects like this by providing financing, seeing it as a sign that the private sector isn’t interested in the opportunity because of the tousle over repricing after the first feed-in tariff program. Phase two of the FiT sees the complex being developed just about entirely by the private sector.

In related news, Germany’s ib vogt GmbH has begun construction work on power projects with a combined capacity of 166.5 MW in Benban, according to PV-Tech. “Following the successful construction and energization of our 64 MW [Phase 1] project in Egypt, we are pleased to announce the commencement of the build-out of our next three plants in this series and are proud that these are the first of the Round 2 projects,” says ib vogt Managing Director Anton Milner.

Desalination projects in Egypt are required to solve current problems apart from future ones to be caused by the Grand Ethiopian Renaissance Dam, Sonia Farid writes for Al Arabiya English. While the projects are not the direct result of the issues caused by the dam, the problems regarding its construction expedited the pace of desalination projects. “The construction of the dam alerted us all to the necessity of looking for alternatives to Nile water which we now depend on almost exclusively,” professor of water chemistry Hossam Ahmed Shawki told Farid.

Amnesty International is alleging that the Armed Forces have been using illegal cluster bomb munitions in its campaign against terrorists in North Sinai. In a statement on Wednesday, the organization claims its experts have analyzed weapons in video footage released by the Armed Forces, which they say shows Air Force personnel loading Egyptian fighter planes with cluster munitions.

More foreign coverage from Operation Sinai 2018 came in yesterday, with Anadolu noting the arrest of foreign militants in Sinai during the operation.

Also worth a quick skim this morning:

• The Coptic Orthodox Church is dedicating a new church to the 21 Egyptian martyrs killed in Libya by Daesh three years ago, CNA reports.
• It is vital that technology companies recognize the role they play in fostering free expression and act accordingly, Jillian C York writes for EFF, noting rights activist and blogger Wael Abbas’ experience of being blocked on social media platforms.
• An unidentified Egyptian citizen was repatriated from Italy for security reasons, the Italian Interior Ministry said in a statement. The 44-year-old was previously expelled from France for holding radical sermons.
• HRW wants FIFA to condemn rights abuses in Chechnya if Egypt’s national football team will use capital Grozny as its World Cup base camp, Reuters reports.
• Mohamed Salah’s solid form continues to dazzle the foreign press, with the latest ink coming from Eurosport’s Le Buzz.

Cairo butcher Zaza Ogaz uses an empty apartment in his building to offer free lodgings to parents of children receiving cancer treatment at a nearby hospital, Reuters reports. The good Samaritan refuses any payment for the apartment he fixed up with beds and furniture and the meals he provides his guests, who are welcome to stay for as long as they need.

Criticizing an institution is not the same as trying to destroy the country, so it’s hardly necessary to silence every source of criticism, Karima Kamal writes for Al Masry Al Youm. Kamal calls out House Speaker Ali Abdel Aal for claiming that any admonishment of the House of Representatives is part of a foreign-funded conspiracy, and urges him to realize that there is a clear difference between the institution he heads and the state. She also gently encourages the government to stop trying to silence dissenters, saying that this path is not reflective of stability.

A United Airlines plane engine started to come apart mid-flight on the way to Hawaii from San Francisco, Business Insider reports. The plane landed safely, but not before a passenger managed to catch the terrifying footage of the engine after its aerodynamic shroud came off (watch, runtime 0:10).

EU provides its EUR 38 mn contribution to Fayoum wastewater project: The EU has provided the European Bank for Reconstruction and Development (EBRD) with its EUR 38 mn portion of the EUR 448 mn package to help upgrade sewage and wastewater systems in Fayoum, according to an emailed EBRD statement (pdf). The project will connect one mn Egyptians to sanitation services through ”the construction of eight new wastewater treatment plants, the expansion of nine units and the rehabilitation of 10 plants as well as the installation of over 3,400 kms of pipes and 139 pumping stations. In addition, 350 sewage removal trucks will be procured to serve remote rural communities.” The EBRD had signed a contract with the Egyptian government in May for its EUR 186 mn portion of the loan, and the European Investment Bank is expected to do the same for its EUR 172 contribution by month’s end.

A British trade delegation led by British Trade Envoy Jeffrey Donaldson visited the Alexandria Port yesterday to discuss potential cooperation with England’s ports to boost trade relations between Egypt and the UK, Al Mal reports.

The Central Bank of Egypt (CBE) signed a fintech cooperation agreement with the Monetary Authority of Singapore (MAS) last week on the sidelines of the Seamless North Africa digital and fintech conference, MAS announced in a press release yesterday. The agreement also sets forth a framework under which MAS and CBE can explore potential joint innovation projects and share information on industry trends.

Sudan FM: Sudan and Egypt are in a period of “brotherhood and transparency”: Sudan’s Foreign Minister Ibrahim Ghandour said that Egypt and Sudan have agreed upon a period of “brotherhood and transparency" following their talks in Cairo last week. In statements to the Turkish press on the sidelines of the Turkey-Africa Ministerial Review Conference, he said: “As you know, various problems have been arising between both countries,” but that the discussions have been fruitful.

Egypt plans to send a security delegation to the Gaza Strip within days to monitor the situation closely, Fatah Central Committee member Azzam Al Ahmed told WAFA. He added that Egyptian leadership will meet with a Hamas delegation in Cairo to discuss developments in the reconciliation efforts between Palestinian factions.

Foreign Minister Sameh Shoukry met yesterday with Spain’s King Felipe VI in Madrid to discuss economic cooperation and migration issues, according to a ministry statement. Shoukry met separately with his Spanish counterpart, Alfonso Maria Dastis, and the two ministers agreed to set up a political consultation mechanism.

The family of Giulio Regeni has described the Italian government’s decision to send an ambassador back to Cairo as a "failure" due to lack of progress in the death probe, ANSA reports. The mission of Italian Ambassador Giampaolo Cantini, who arrived in Cairo in September, "was supposed to have shed light on the murder two years ago that brought all the evil of this world on our son," Paola Defendi and Claudio Regeni said.

Oil Minister Tarek El Molla signed two agreements with oilfield services company Schlumberger to conduct a seismic survey in the Gulf of Suez and establish a data center on areas open for exploration in Egypt, the ministry announced in a statement (pdf) yesterday. The ministry did not disclose the value of the agreements, which were signed on the sidelines of the EGYPS Petroleum Show 2018 as part of efforts to attract more investment in the energy sector.

Baker Hughes GE signed a EGP 1 bn contract with state-owned Petrojet which would see it consult on expanding Petrojet’s industrial services for the oil and gas exploration, according to a Oil Ministry statement picked up by Al Mal. Petrojet hopes to manufacture, build and test offshore structures and components for the Zohr gas field’s production. Baker Hughes will also advise on expanding the company’s product offering and creating manufacturing standards for the company.

The Egyptian Ethylene & Derivatives Company (ETHYDCO) is preparing to launch an international tender next month for a USD 100 mn polybutadiene plant, company official Khaled Talaat tells Al Borsa. ETHYDCO expects to announce the winning company in May, while the plant is set to begin operations in 2020.

Hassan Allam Properties announced securing a 600-feddan land plot on the North Coast, the company announced in an emailed statement. The planned development for the plot will include residential units a clubhouse, a five-star boutique hotel, a commercial hub, an Aqua Park, sports club, as well as beachfront cabanas. “We are expanding significantly, whilst maintaining the values of a boutique development,” Hassan Allam Properties CEO Mohamed Allam says.

The new 593-room Hilton Cairo Heliopolis began welcoming guests yesterday as part of Hilton Worldwide’s plan to expand in Egypt with 1,000 hotel rooms in 2018, Al Shorouk reports. The company has also confirmed plans to re-open the currently-standing 247-room Towers Luxury Hotel as Africa’s first Waldorf Astoria later this year. Hilton has signed two management agreements with Gulf-Egypt for Hotels & Tourism to operate both hotels under two different brands. Hilton Worldwide said its revenue per available room (RevPAR) in the Middle East and Africa has grown thanks to “continued strength in Egypt,” according to Reuters.

Archaeologists uncovered the remains of a temple in Aswan that dates back to Egypt’s Roman period,Arab News reports. The Egyptian Excavation Field School made the finding in the Kom Al Rasras site. Experts believe the temple was part of a residential area for quarry workers.

Global Telecom and VEON Ltd. announced that their wholly-owned subsidiary in Bangladesh, Banglalink, has received new frequencies that are expected to double its 3G network capacity, the companies said in a joint statement on Tuesday (pdf). Banglalink will pay a total of USD 308.6 mn for the spectrum and USD 35 mn to convert its existing spectrum holding into technology neutral spectrum. Banglalink will also acquire a 4G/LTE license in parallel in order to launch a high-speed data network, and is expected to pay USD 1.2 mn for it.

Etisalat Misr is planning to invest EGP 2.5 bn this year to develop its infrastructure and expand its 4G services network, CFO Ehab Roshdy tells Al Mal. The new investment will be funded by revenue from the company’s recent capital increase, according to Roshdy.

Lebanese fintech company Areeba is planning on establishing an office in Egypt in 2018, Marketing and Strategic Relationships head Said Fakhr tells Al Mal. Areeba is planning on building strong connections with a network of banks operating in Egypt such as Bank Audi.

The National Elections Commission (NEC) is setting up a committee to monitor news coverage of the March presidential elections and “take note of violations to the reporting criteria” set by the NEC, Supreme Media Council deputy Mohamed El Amry tells Youm7. The council is also running training workshops on election coverage for journalists, he says.

The latest video released by Daesh earlier this week is evidence of the Ikhwan’s link to terror group and its use of deception to “cover the acts of terrorism and clear the names of terrorist icons,” the State and Information Service (SIS) said in a statement yesterday. The SIS also put out a separate statement earlier this week slamming “incorrect” international media coverage of the ongoing military operation in Sinai, saying that these reports rely on the Ikhwan as a source of information.

The Press Syndicate is demanding that controversial Al Mehwar presenter Mona Iraqi be investigated for alleged “moral violations” during an episode about rape, Syndicate Chief Hamdy El Konayyesi has said, according to Al Shorouk. Konayyesi also commended Al Mehwar channel for suspending Iraqi’s talk show “Intibah” after the episode aired. We’re no more down with the idea of banning talk show hosts than we are with the concept of blocking access to websites, but don’t conflate El Iraqi’s woes with a wider crackdown on dissent: The presenter is widely loathed in media circles for her stunt journalism, including her “gay bath house” segment, which saw 26 men prosecuted on trumped-up debauchery charges. El Iraqi was later sentenced to six months in jail for defamation as a result of the segment.

A 30 mn year old petrified forest 30 km outside of Cairo has received long sought after government protection, according to Arab News. The seven sqm area, known as Gabal Al Khashab, was declared a protectorate back in 1989 for the tree and animal fossils it houses, as well as the thriving ecosystem of rare plants and animals. The order was never fully enforced until a group named Narges Volunteers presented their plan for its protection to the House of Representatives and put the first phase into action last Saturday at a cost of under USD 500k.