Thursday, 1 March 2018

Record-breaking trading on EGX by foreign institutions after index rebalancing


What We’re Tracking Today

It’s now March, ladies and gentlemen. The back third of Q1. As our father always told us: Time accelerates as you age.

FIRST LOOK- The EGX recorded a meteoric rise in volume yesterday driven almost entirely by record-setting foreign institutional trading, with foreigners accounting for EGP 3.1 bn of the EGP 4 bn traded. That’s both the highest foreign trading volume of all time and the highest overall mark since March 2008, by our math.

Why the spike? Wednesday was D-Day for the MSCI Egypt Index rebalancing, with Eastern Tobacco coming in and EFG-Hermes swapping out. We spoke to our friend Mohamed Ebeid, Co-CEO of the investment bank at EFG-Hermes, who noted that what was remarkable was that the record-setting volume came from pure trading—no special transactions were executed yesterday.

Institutions like EFG, passive inflows boost Eastern: Both Eastern Tobacco (+1.4%) and EFG Hermes (+4.3%) outperformed a down market, with the former seeing buying coming from passive investors following the index and the latter defying the MSCI index exit with huge active buying from foreign institutions, Ebeid said.

Is it sustainable? Although yesterday’s volume was an anomaly, Ebeid expects the daily traded average in the next period to tick up to the EGP 1.5-2 bn range from the EGP 1-1.2 bn range at which it’s been lingering.

***A handful of us are in Dubai from Sunday attending the EFG Hermes One on One and then meeting with friends later in the week. We may have a few meeting slots free in the second half of the week. Email if you’d like to talk about having coffee.

The Central Bank is expected to announce foreign reserve figures “within days,” a banking official had told Youm7. Finance Minister Amr El Garhy said last week that proceeds from the recent USD 4 bn eurobond sale had already hit Egypt, bringing the country’s net FX reserves to around USD 41 bn.

Egypt’s M2 money supply was up 20.45% y-o-y in January to EGP 3.25 tn (USD 185 bn), the CBE said on Wednesday, according to Reuters.

The CBE also held yesterday its biggest EGP variable rate CD auction since the EGP float, with EGP 205 bn on offer, coming on the back of the 100 bps rate cuts earlier this month.

The Investment Ministry released yesterday its Annual Report (pdf) for 2017. The report includes a recap of legislation passed as well as of loans and grants received to finance development projects. The report shows foreign direct investment growing 14.5% y-o-y to USD 7.9 bn in FY2016-17. The report claims that the first phase of the ministry’s long awaited investment map has been released, though we’ve seen no sign of it online.

President Abdel Fattah El Sisi is scheduled to inaugurate today the new cities of New Alamein, New Obour, New Ismailia today, Youm7 reports.

You may want to double back for a second look at VanEck Vectors Egypt Exchange-Traded Fund (EGPT), the only Egypt ETF trading in the US. The ETF “is up more than 3% this year and nearly 19% over the past 12 months,” says FXStreet. And while Egypt “is not for the faint of heart … there are signs of improvement in the Egyptian economy,” the report notes, adding that, “EGPT’s three-year standard deviation of 27.9% is nearly double the comparable metric on the MSCI Emerging Markets Index.”

Egypt is among the top five banking markets in Africa in terms of growth and profitability. Angola, Nigeria, South Africa, and Morocco, along with Egypt account for 68% of the continent’s total banking revenue pool, new research by McKinsey and Company finds. The report, which says Africa is the world’s second-largest banking market in terms of growth, separates the continents banking markets into four archetypes: Relatively mature, fast-growing transition market, sleeping giants, and nascent market. Egypt belongs to the first category along with South Africa. “These markets have higher branch penetration…they also have higher credit bureau penetration of 22% of adults, double the African average.” The report also projects that around 60% of total retail revenue growth in the next five years will come from Egypt, Morocco, South Africa, Ghana, and Nigeria. Click here for the full report (pdf).


We’re working on something new: We are partnering with our friends at CIB Wealth to produce a custom newsletter that will go out to CIB Wealth’s clients and our readers once a month. We calling this “Your Wealth” and will be discussing in it how to get the most out of your time, your business and your wealth—and maximize time with your family. We’ll be sending out the first issue of Your Wealth this weekend. If you you’d prefer not to continue receiving it each month, feel free to unsubscribe from it—you’ll still receive your regular issue of Enterprise every weekday.


Norway’s USD 1 tn sovereign wealth fund loves volatility: Norway’s sovereign wealth fund thinks a spike in volatility may help its long-term allocation target of 70% in equities worth an estimated USD 40 bn. “Increased volatility is as much of an opportunity as a challenge,” Yngve Slyngstad, CEO of Norges Bank Investment Management, which runs the fund, said in an interview with Bloomberg TV (watch, runtime: 4:14). The last time the fund so an expansion in its equity holdings — raising it to 60% from 40% — was right before the global financial crisis, when it picked up stocks for cheap.

Is the Chinese state behind Geely’s accumulation of a stake in Mercedes-Benz owner Daimler? That’s the suggestion in the Financial Times, which also notes that Zhejian Geely Holding’s also owns online trader Saxo Bank, among other companies.

Meanwhile, the global business press is heading into the weekend obsessing over all things American, with front-page headlines from both sides of the pond zeroing in on Hope Hicks’ resignation as White House communications chief after admitting she told “white lies” for the president (FT | WSJ), the dwindling power of Jared Kushner (FT | WSJ), and a move by Walmart, Dick’s Sporting Goods and others to stop selling weapons to people under the age of 21 (FT | WSJ | Reuters). The latter really seems to have sparked the imagination of the Journal, which warns that “CEOs choose sides on gun control at their own risk,” while Business Insider says businesses are simply tracking to where consumers in America are moving on social issues.

“Meet me there” closes tomorrow: Hind El Hafez, our friend and the noted jewelry designer and artist, is helping organize the Cairo Artists Collective’s group exhibition “Meet Me There,” which wraps up tomorrow in Zamalek. The event features her latest collection of contemporary art jewelry and has as its special guest Spain’s Estela Saez Vilanova. Want to attend? Pop an email over to for the details.

70/20/10—something all of us should give some thought to this weekend, whether it’s in our business or personal lives. As Evernote CEO Chris O’Neill reminds readers of the Globe and Mail’s Last Word column : “Google famously talks about 70/20/10—70% of time, energy and resources goes into the core product, 10% goes into adjacencies or extensions, and 10% goes into those moonshots. It’d be great if Canadian companies took 10% of their resources and said, ‘We’re going to [take some long shots], and some, if not most, of them will fail, but the one or two that do succeed will more than offset the investment.’” The rest of the as-told-to interview is worth reading, too.

The Oscars are on Sunday, and PricewaterhouseCoopers hasn’t been fired. The accounting giant will be in the wings again this year, and promises to hand over the right envelope to the right person at the right time this year after last year’s gaffe, the Wall Street Journal reports.

On The Horizon

MbS in Cairo next week? Saudi Crown Prince Mohammed bin Salman will reportedly visit Egypt on Sunday, 4 March to meet with President Abdel Fattah El Sisi, unidentified sources tell Al Ahram. The two are expected to visit the National Youth Academy in Six October City, sources also tell Al Masry Al Youm, adding that Mbs’ entourage already landed in Cairo this week to prep for his arrival. Be prepared for traffic snarls in Six October on Sunday.

Our friends at EFG Hermes are hosting their 14th annual One on One Conference in Dubai on Monday. The three-day event is the largest investor conference globally focused on frontier and emerging markets and will bring together some 175 companies for discussions on what a year of shifting benchmarks — including oil production cuts and the prospect of US interest rate hikes — mean for emerging frontier markets.

Verdict coming in anti-Uber, Careem lawsuit: The Administrative Court will issue a verdict on 20 March in the case filed by 42 taxi drivers demanding that local operations for ride-hailing services Uber and Careem be shut down.

The 2018 international Sustainable Industrial Areas (SIA) International Conference is taking place in Egypt this year next Tuesday at the Nile Ritz Carlton. This year’s iteration looks at investment promotion, SME development and the creation of meaningful job opportunities as a means to sustainably grow Egypt’s industrial areas. The gathering is being held under the auspices of the Trade and Industry Ministry in partnership between the East Port Said Development Company.

Enterprise+: Last Night’s Talk Shows

Talk about a train collision that killed 12 people and injured 39 others in Beheira dominated the airwaves yesterday, with Health Ministry spokesperson Khaled Megahed and other officials calling up the nation’s talking heads to provide updates (watch, runtime: 6:00).

Transport Minister Hisham Arafat pinned the blame on delays in the overhaul of the national railway system, when he spoke to Kol Youm’s Amr Adib (watch, runtime: 4:28). He told Masaa DMC’s Osama Kamal that it will require around EGP 200 bn to complete the overhaul of the railway system, adding that 87% percent of the railway network has not been upgraded since the 1940s and that some trains date back to the 1970s. Arafat also stressed the importance of raising railway ticket prices in order to raise the sector’s revenues and fund upgrades.

Like Arafat, the head of the House’s Transport Committee, Hisham Abdel Wahed, acknowledged the need to raise ticket prices. He told Kamal on Masaa DMC that the House has passed legislation allowing private sector participation in the railway sector’s development (watch, runtime: 8:20).

Beheira governor Nada Abdo believes speed to be the culprit. She told Al Hayah Al Youm’s Nahawand Serry that human error is behind most similar accidents and said an investigation is now underway (watch, runtime: 4:51). She then told Masaa DMC’s Kamal that residents helped carry the wounded to nearby hospitals (watch, runtime: 3:53). This came as witnesses from the scene reported a delay in the arrival of ambulances to Amr Adib’s field reporter.

Elsewhere, startup firm Orcas received a EGP 100k prize in the CIB-sponsored Hona Al Shabab competition on Lamees Al Hadidi’s Hona Al Asema. Two other startups, Bekia and Flareinn, came in second and third place respectively in this segment of the competition (watch, runtime: 1:00).

The state is giving land owners a three-month window to get their legal affairs in order or see their lands seized, Finance Minister Amr El Garhy told Masaa DMC’s Kamal. He said the ministry would assess each case individually. (watch, runtime: 5:52)

MbS is coming to town: Rumor has it that Saudi Crown Prince Mohammed bin Salman will meet with President Abdel Fattah El Sisi in a visit to Cairo set to start on Sunday. Osama Kamal spoke to Saudi writer Zayed Al Roysy, who said the visit reflects the warming ties between both countries (watch, runtime: 5:45).

Words of wisdom from Amr Adib. Their relative rarity makes them all the more important to read: Amr Adib appeared gravely concerned by Egypt’s reputation in the international community, after international news outlets picked up news that pop singer Sherine Abdel Wahab received a six-month prison sentence over a joke. “This makes us look like fanatics,” he said. Adib also said that he was against taking punitive measures against the BBC for its report on forced disappearances in Egypt, which the government says is fake. He said that shutting down the BBC would “make Egypt look like North Korea” (watch, runtime: 8:54).

Top prosecutor orders staff to monitor media, take action against “fake news”: Adib’s remarks last night came after Prosecutor General Nabil Sadek urged his staff yesterday to keep a close eye on the media and take action against outlets they believe are publishing or broadcasting “false news, statements and rumors,” according to a statement carried by Reuters. Industry regulators should also report to the prosecutor any “violations of media and press ethics, he added. The order comes a day after the State Information Service called for a boycott of BBC following a critical report on forced disappearances in Egypt it said was “flagrantly fraught with lies.” The Associated Press and Financial Times also have the story.

Speed Round

Speed Round is presented in association with

LEGISLATION WATCH- Pharma Regulator Act gets final sign-off from Cabinet: The Ismail Cabinet approved yesterday the Pharma Regulator Act after incorporating some amendments since granting it a preliminary nod earlier this month, according to an official statement. The bill 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;
  • The Egyptian Medical Supervisory Authority to oversee the availability and supply of medicine and raw materials.

Cabinet will now send the legislation to the House of Representatives for a vote.

Also yesterday, Cabinet agreed to:

  • Extend the mandate of a law allowing those who have had state land seized from them as part of the crackdown on illegally occupied land to buy back the property.
  • Sign off on the new prices at which the government will purchase local cotton. Long-staple cotton will be priced at EGP 2,700 per qintar, while short- and medium-staple cotton will now be priced at EGP 2,500.
  • Approve amendments to the criminal code that would impose life prison sentences on individuals who are found guilty of handling unlicensed explosive materials.

LEGISLATION WATCH- The House of Representatives is expected to begin plenary discussions on the Auctions and Tenders Act next week, Ahram Gate reports. The House Budget Committee is reportedly completing its review on the law, which would decentralize tender procedures and streamline the selection process for winning bids as well as set new quotas for domestic components and SME contractors.

The committee had approved the amendments to the Income Tax Act that would push the deadline on submitting supplementary documentation to tax returns.

LEGISLATION WATCH- The new Customs Act would slash customs duties on capital goods to 2% from a current 5%, Customs Authority head Magdy Abdel Aziz tells Al Shorouk on Wednesday. The move is part of a series of incentives laid out in the proposed law, which also include expanding temporary exemptions for production inputs and packaging equipment. He added that the law would exempt cars for the disabled from custom duties.

Abdel Aziz also said that the Customs Authority was studying the impact of Egypt joining the Mercosur freetade agreement on customs revenues. When Egypt signed the agreement, tariff rates for a number of goods had been set yet, he added. The agreement had only laid out five categories of goods, each with its own tariff rates, so it is not yet clear how the agreement will impact certain goods.

One of the smartest policy proposals we’ve heard: The Finance Ministry hinted that it would be willing to grant SMEs full or partial tax exemptions under certain conditions in the SME taxation framework the ministry is currently developing. “The new framework could see provisions for partial or full tax exemptions,” said Vice Minister of Finance Amr El Monayer on Wednesday, AMAY reports. The level of incentives provided in the framework would be pegged to how far the business has come towards registration and entering the tax system, El Monayer added. The ministry also plans to simplify the paperwork SMEs need to file to become part of the tax system, he said.

IPO WATCH- Banque du Caire IPO will not take place before 4Q2018: “We expect to finalize the initial public offering of Banque du Caire in the fourth quarter of 2018 — not before that,” our friend Banque Misr Vice Chairman Akef El Maghraby tells Bloomberg in an interview. He added that the bank would retain a controlling interest.

The IPO is part of Banque Misr’s plan to raise EGP 10 bn from the sale of its stake in a number of other companies, including Cairo Amman bank. Banque Misr is in preliminary talks to sell its 10.78% stake in Cairo Amman Bank, with an eye to completing the transaction by the end of the year, he added. The bank hopes to raise EGP 1 bn from the sale of the four companies, which include its 2% stake in Saudi Arabia’s Samba Financial Group. Samba Capital has been retained as the adviser in the deal. El Maghraby declined to name the other three companies.

Mars Wrigley Confectionery sees Egypt becoming its production hub for the MENA region in the near future, Vice President of Corporate Affairs for the AMEA region David Kiu said at a roundtable we attended yesterday. He added that the recently inaugurated EGP 750 mn production lines at its 6 October City factory will surpass its facility in Saudi Arabia as the MENA region’s largest once it becomes fully operational in 2019. However, Mars is looking to the government to cut red tape, including streamlining the customs process, which Middle East and Africa General Manager Duncan McCulloch identified as the company’s “main challenge.” Separately, the company is working to source 100% of its packaging material from Egypt by year’s end and is also planning to increase its dependence on locally sourced raw materials, including cocoa and sugar, according to Vice President of Supply Pascal Bouye. The company had announced on Tuesday that it would double its investments in Egypt to EGP 2 bn this year.

The Oil Ministry is reportedly planning to end its five-year contract for the Höegh Gallant FSRU in mid-2018, EGAS sources tell Al Borsa on Wednesday. The move, which comes on the back of Egypt’s plan to begin exporting gas by 2019, would end the contract one year ahead of schedule, presumably with the payment of a penalty. Oil Minister Tarek El Molla had previously said Egypt would hold on to its remaining FSRU, which could remain commissioned to accommodate LNG imports by the private sector or in case there is a shift towards supplying more power plants with natural gas instead of diesel or heavy fuel oil.

Orascom Construction (OC) announced it has completed a Multipurpose Applications by Thermodynamic Solar (MATS) plant in Borg El Arab in Alexandria, which we noted yesterday the Electricity Minister had inaugurated on Tuesday. “The MATS plant is comprised of an integrated concentrated solar power (CSP) and water desalination facility with a capacity that can serve a community of 1000 people in a desert area. The plant is the first of its kind in the world that features this level of environmental friendliness, easy management and flexibility of operations.” The project was co-funded by the European Union and led by a consortium of 11 partners. OC participated in the project’s funding and the plant’s construction.

Separately, OC’s fully-owned subsidiary the Weitz Company was honored with the prestigious Build America award from the Associated General Contractors of America, according to a company statement (pdf). The company was recognized for its construction of a student housing development on the Texas A&M University campus through a public-private partnership.

EARNINGS WATCH- Elsewedy Electric reported a 65% y-o-y growth in net profit after minority interest to EGP 6.368 bn in 2017, up from EGP 3.85 bn in 2016, according to the company’s earnings release (pdf). Revenues also increased 74% y-o-y to EGP 42.91 bn, driven largely by growth in the turnkey projects and wires and cables segments. Going forward, Elsewedy intends to “increasingly diversify our operations and client-base across new industries and geographies,” said CEO Ahmed El Sewedy The company is also keeping an eye on internal strengthening through the “adoption of best-in-class governance frameworks and policies.”

MOVES- Our friend Willie Elamien, Flat6Labs Cairo Managing Director, is stepping down after two years at the helm effective today. Elamien will be succeeded by Moustafa Khater, a licensed innovation consultant, who comes with 12 years’ experience with Shell.

Egypt continued its comeback with German travelers, as bookings for this summer rose 64% y-o-y, Reuters reports, citing German market researcher Gfk. According to Gfk, German travelers are also returning in droves to Turkey, where “the security situation and political tension appeared to be easing,” spurring a 101% y-o-y rise in German summer bookings. Meanwhile, Greece has now become Germany’s top destination for summer vacationing on the back of a 40% y-o-y increase in bookings.

Looking to rain on the parade is Daesh, which is calling for increased attacks on Christian tourists to turn popular holiday destinations into “bloodbaths,” according to The Sun. The terrorist group reportedly published an editorial in its weekly magazine encouraging its fighters to kidnap foreigners and tourists, which “will greatly embarrass the regime and destroy its economy … more than targeting the military and police.”

Egypt and Russia have agreed on the final design plans for the Dabaa nuclear power plant, Electricity Minister Mohamed Shaker said yesterday, Al Shorouk reports. Sources said on Tuesday that the ministry had drawn up a list of 10 Egyptian contractors it will recommend to Russia’s Rosatom to work on the USD 30 bn plant, including Elsewedy Electric, Orascom Construction, Hassan Allam, and Petrojet. Egyptian companies will reportedly be taking on 20% of the construction work, or around USD 4 bn in contracts. Shaker said that both sides were working hard to remain on schedule and begin construction by 2020, once Rosatom receives the necessary regulatory approval.

Egypt-born Dina Powell, who most recently served as deputy national security adviser to US President Donald Trump, is returning to Goldman Sachs, Bloomberg reports. Powell will join Goldman Sachs’ management committee and will focus on boosting relationships with sovereign clients. Powell was a partner and the firm’s global head of impact investing before joining the White House. She “helped arrange meetings for Vice President Mike Pence in Egypt in late January and traveled with Pence on his surprise trip to Afghanistan in December.”


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Image of the Day

The Transport Ministry is transforming an Opera metro station corridor into an art space after it was painted into a mural showing the solar system by the cultural association ‘Mobde’oon,’ according to Egypt Today. The corridor was painted by 11 young artists and will serve as an exhibit space paintings and music from other artists going forward. Look for other Metro stations around the city to be similar beautified, the story suggests.

Egypt in the News

Two trains collided in Beheira yesterday, killing 12 and injuring 39, Reuters Arabic reports. “Two passenger carriages separated from one train and collided with a cargo train,” according to a local security official. The incident is topping coverage of Egypt in the foreign press this morning.

Other international stories worth a skim this morning:

  • Egypt is working toward gas self-sufficiency and a return back to being a net exporter of gas with new gas fields, Abdelghani Henni writes for E&P.
  • The Grand Ethiopian Renaissance Dam could result in a significant political shift in northeastern Africa, particularly as Addis Ababa adopts the same confidence that Egypt had while building the Aswan High Dam, Samantha Raphelson writes for NPR.
  • Where’s the ambassador? US foreign policy is suffering, with as many as 40 ambassadors not yet posted to crucial allies including Egypt, according to Think Progress.
  • Egypt has more than doubled the number of soldiers deployed in the Sinai with Israel’s blessing, The Jerusalem Post reports, citing Israel’s Channel 11.
  • Protect women: MENA countries including Egypt, Morocco, Tunisia and Kuwait have to do more to protect women on the legislative front, Heba Kanso writes for Reuters.

On Deadline

The growing reliance on social media reflects a loss of confidence in traditional media, Al Masry Al Youm’s Amr El Shobaky says as he takes a look at social media’s “negative role” in spreading false news, inciting hatred, and affecting voters’ decisions. El Shobaky says the country needs to look at the underlying causes rather than resort to blocking the platforms.

Diplomacy + Foreign Trade

Egypt has reportedly received Ethiopia’s official five-year plan for filling the reservoir behind the Grand Ethiopian Renaissance Dam, GERD tripartite committee member Gedion Asfaw tells Al Shorouk. The plan includes a number of scenarios that Egypt can choose to adopt during that period, he says without elaborating, adding only that further negotiations are in order to reach a final decision. News reports had suggested this week that one scenario could see Egypt temporarily reduce cultivation of water-intensive crops while Ethiopia filled up the reservoir and reimbursed Cairo for the cost of additional imports. The real details, however, remain unclear.

Ethiopia’s plan did not get Cairo’s sign off as it violates the agreement it signed with Egypt and Sudan about sharing the Nile water, an unnamed Egyptian official tells the newspaper, explaining that the three countries had agreed the reservoir would not be filled until they reached consensus on GERD’s environmental impact. Negotiations over the dam reached a stalemate last year when Ethiopia and Sudan refused to recognize the results of an environmental impact study that found that GERD would severely cut into Egypt’s Nile water supply. Just as they were about to resume, talks were once again postponed after Hailemariam Desalegn resigned as Ethiopia’s prime minister in an unexpected move that left Egyptian officials worried Addis Ababa could would change its negotiating position. Egypt is pushing to restart talks as soon as possible, according to the official.

President Abdel Fattah El Sisi called newly-elevate South African President Cyril Ramaphosa to congratulate him and express hope for increased cooperation, according to an official statement from the presidential spokesman.

The trade ministries of Egypt and Nigeria will soon sign an MoU to form a joint business council, Egypt’s Trade and Industry Ministry said in a statement yesterday. The announcement came after Minister Tarek Kabil met with his Nigerian counterpart Aisha Abubakr, who is currently visiting Cairo.

A Hamas delegation led by Ismail Haniyeh returned to Gaza yesterday after concluding a short visit to Cairo for talks, Al Masry Al Youm reports. This comes a day after an Egyptian security delegation met with Hamas’ top official in Gaza, Yehia Sinwar, in Gaza, according to Al Shorouk.

The Arab Quartet slammed Qatar for trying to “falsely market” their ongoing dispute as a major international crisis and accused Doha’s foreign minister of delivering a “fallacious” speech to the UN Human Rights Council, according to a joint statement.


SIDPEC selects Honeywell UOP, W.R. Grace & Co. to construct propylene, polypropylene factories

Sidi Kerir Petrochemicals (SIDPEC) has selected Honeywell UOP and W.R. Grace & Co to construct its planned propylene and polypropylene factories, respectively, SIDPEC announced yesterday, Al Shorouk reports. SIDPEC had received six offers for the licenses to construct the factories. The propylene facility has a targeted production output of 500k tonnes per annum, while the polypropylene facility is expected to produce 450k tonnes per year. Both factories are slated for completion in 2022.

Real Estate + Housing

Pyramisa Hotels and Resorts to invest EGP 500 mn in developing its hotels

Pyramisa Hotels and Resorts is earmarking EGP 500 mn to develop and upgrade its hotels in Cairo, Luxor, Aswan, Sharm El Sheikh, and Sahl Hasheesh next year, chairman Magdy Azab tells Al Mal. The company plans to self-finance the upgrades rather than rely on loans, which Azab says require collateral the company cannot afford. Separately, the company expects to complete developing its USD 10 mn hotel in Dubai by March 2019 and inaugurate it by that summer, while its EGP 150 mn Bay View hotel and residential complex in Sahl Hasheesh is expected to be complete by the end of 2019.

Telecoms + ICT

MNOs begin halting sales of new phone lines through distributors

Mobile network operators have stopped selling new phone lines through distributors and cut them off from SIM cards and ways to wirelessly recharge phone lines on Wednesday, distributors tell Al Borsa. The move comes in accordance with a National Telecommunications Regulatory Authority decision to limit sales of new phone lines only to official branches of telecom companies starting from 1 March as a means to enforce know-your-customer regs. MNOs have started winding down sales through distributors from last month, causing disruption among distributors who eagerly await an alternative plan from MNOs. Distributors are hoping telecoms adopt a new franchise system that would include them. Some are also calling for monetary compensation from MNOs, according to Al Mal.

Banking + Finance

EFG Hermes Assets Management plans to grow AUM by up to 15% this year

EFG Hermes Asset Management plans to grow its assets under management 10-15% this year, Managing Director and head of Fixed Income Khalil El Bawab tells Al Borsa. The firm is planning to snag two money market funds in the coming six months he added. One of the funds will be issued by a bank, which El Bawab doesn’t name, and will be its first money market fund. The fund has already have received CBE sign-off, and awaits approval from the Financial Regulatory Authority. The company has grown its AUM 20% in 2017 to EGP 12.5 bn. Speaking on the drop in interest rates, El Bawab says that he expects these to fall by a total of 300 bps, something he feels will be excellent for fixed income funds.

Global Lease sets up real estate assets management arm

Global Lease has set up a real estate assets management arm with an initial portfolio worth EGP 200 mn, CEO Hatem Samir tells Al Borsa. Separately, Global Lease is looking to increase its leasing 30-40% this year and is targeting syndicated leasing activities worth EGP 900 mn. Ezdehar Egypt Mid-Cap Fund had acquired 60% of Global Lease in February, limiting Samir’s stake in the leasing company to 10%.

Other Business News of Note

Environment agency, FEI, NBE sign EGP 7 mn facilitated loans agreement for SMEs

The National Bank of Egypt signed an agreement with the Environmental Affairs Authority and Federation of Egyptian Industries yesterday that will see it extend facilitated loans to SMEs to help them comply with environmental standards, Al Masry Al Youm reports. The bank will offer loans of up to EGP 7 mn that can be repaid in instalments over 1-5 years at what appears to be zero interest but with administrative fees of 3.5%.

Egypt Politics + Economics

NPA to take charge of state newspapers’ HR affairs

The Council of State (Maglis Al Dawla) has given the National Press Authority (NPA) it’s blessing to take charge of state-owned newspapers’ HR affairs, Al Shorouk reports. This would give the NPA autonomy in drafting HR regulations and setting the minimum and maximum wages for journalists and administrators in state-owned papers. This comes as Daily News Egypt says that journalists in Egypt are leaving their careers as they struggle to make ends meet with salaries ranging from USD51-170 a month.

Prosecutors reach EGP 1.7 bn settlement agreement with Ahmed Ezz

Steel magnate Ahmed Ezz has reached a EGP 1.7 bn settlement agreement with the government, Prosecutor General Nabil Sadek said in a statement picked up by Ahram Online. Ezz, who was released from prison on EGP 250k bail and placed on a no-fly list in July, will pay EGP 600 mn from assets recovered from abroad. He faces charges of squandering public funds and illegally acquiring his Dekheila steel plant.

Moussa backs extension of presidential term for six years

Presidential candidate Moussa Moustafa Moussa said he was not opposed to constitutional amendments that would extend the presidential term to six from four years, Al Masry Al Youm reports. Moussa said it would give state leaders a “chance to achieve more.”

Helwan Cement workers go on strike

Workers at Helwan Cement factory went on strike yesterday to protest delays in wages and compensation payments, Al Shorouk reports.

On Your Way Out

Egypt’s Consumer Protection Agency (CPA) has partnered up with UNCTAD to launch a new regional training center in Cairo, according to the UN. The facility will be used to “hold training courses on consumer protection law, regulations and policies for officials from countries in the Middle East and North Africa (MENA) region.”

Egypt, Jordan, and Sweden are co-hosting a conference to help UNRWA fill a major funding gap caused by US aid cuts to the Palestinians, according to a statement carried by The Associated Press. The US had informed the Palestinian aid agency that it was cutting this year’s funding to USD 60 mn from USD 360 mn last year.

South African Biker Andrew Russell became the first man to travel from Cairo to Cape Town on a motorcycle in just seven days, according to IOL. This was Russell’s third crack at the 11,000 km journey and he believes his record was helped by factors like a new land border crossing between Egypt and Sudan, as well as the fact that only 250 km of the journey is on untarred road. His trip started in Cairo on 2 January. Challenges came at him in the form of breakdowns, animal collisions, and near misses with traffic.

Charitable mobile users generated EGP 24.6 mn via 4.9 mn text messages to 52 different local organizations in 2017, TA Telecom said in an emailed press release. The mobile donation platform, named MegaKheir, is serviced by and is part of TA Telecom and routes the money to charities like the 57357 Children Cancer Hospital, Dar El Orman and the Magdi Yacoub Heart Foundation.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.59 | Sell 17.69
Buy 17.58 | Sell 17.68
EGP / USD at NBE: Buy 17.56 | Sell 17.66

EGX30 (Wednesday): 15,473 (-0.3%)
Turnover: EGP 4.0 bn (244% ABOVE the 90-day average)
EGX 30 year-to-date: +3.0%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session down 0.3%. CIB, the index heaviest constituent closed down 1.1%. EGX30’s top performing constituents were EFG Hermes up 4.3%; Abu Dhabi Islamic Bank up 2.1%; and Eastern Co up 1.4%. Yesterday’s worst performing stocks Porto Group down 2.9%; Juhayna down 2.6%; and Emaar Misr down 2.1%. The market turnover was EGP 4.0 bn, and regional investors were the sole net buyers.

Foreigners: Net Short | EGP -307.7 mn
Regional: Net Long | EGP +495.9 mn
Domestic: Net Short | EGP -188.2 mn

Retail: 19.7% of total trades | 19.8% of buyers | 19.6% of sellers
Institutions: 80.3% of total trades | 80.2% of buyers | 80.4% of sellers

Foreign: 50.1% of total | 46.2% of buyers | 54.0% of sellers
Regional: 21.7% of total | 28.0% of buyers | 15.4% of sellers
Domestic: 28.2% of total | 25.8% of buyers | 30.6% of sellers

WTI: USD 61.7 (-2.08%)
Brent: USD 65.78 (-1.28%)

Natural Gas (Nymex, futures prices) USD 2.67 MMBtu, (-0.34%, April 2018 contract)
Gold: USD 1,319.7 / troy ounce (+0.08%)

TASI: 7,418.8 (-0.63%) (YTD: +2.66%)
ADX: 4,597.66 (-0.03%) (YTD: +4.53%)
DFM: 3,244.12 (-1.29%) (YTD: -3.74%)
KSE Weighted Index: 413.98 (+0.26%) (YTD: +3.13%)
QE: 8,653.32 (-3.09%) (YTD: +1.52%)
MSM: 5,003.37 (+0.2%) (YTD: -1.88%)
BB: 1,369.9 (+0.3%) (YTD: +2.87%)

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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.

06-07 March (Tuesday-Wednesday): The Sustainable Industrial Areas International Conference 2018, The Nile Ritz Carlton hotel, Cairo.

07-11 March (Wednesday-Sunday): ITB Berlin Convention, Berlin, Germany.

12-16 March (Sunday-Saturday): AmCham’s 40th Doorknock mission, Washington D.C., USA.

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

02-03 April (Monday-Tuesday): Pharos Holding’s investor conference: In Search for Egypt Alpha, 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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