Sunday, 11 March 2018

Inflation drops to 14.4% in February

TL;DR

What We’re Tracking Today

It’s a busy news day today, with no sign that the presidential election has slowed down foreign or domestic investors’ appetite for Egyptian opportunities.

The Financial Regulatory Authority (FRA) announce the launch a movable collateral assets registry today, Al Mal reports. The FRA had signed an agreement with the Egyptian Credit Bureau (iScore) last year to establish the registry, which officials say will make it easier for banks to loan to SMEs and drive financial inclusion by allowing machines, patents, and engineering designs to be used as collateral.

AmCham’s 40th annual Doorknock mission to Washington, DC, kicks of tomorrow and runs until 16 March. The mission will include a delegation of 35 companies from the Federation of Egyptian Industries who will meet with members of Congress, lobbyists, and representatives of various DC-based think tanks to discuss the results of Egypt’s ongoing economic reform program and explore the potential for a trade liberalization agreement with the US, which is currently on the hunt for a gateway to the African market, according to Egyptian-American Business Council Chairman Omar Mehanna. The delegation will also be sharing its concerns about US media coverage of Egypt with the Washington crowd. Enterprise is on the road with AmCham, so we’ll have updates from the ground in DC for you this week.

EGX head Mohamed Farid plans to hold meetings this week with financial industry lobby groups to discuss establishing an industry federation as per amendments to the Capital Markets Act, sources tell Al Mal. The meeting will include representatives of the securities division of the Federation of Egyptian Chambers of Commerce as well as the Egyptian Capital Markets Association.

Egypt is fielding proposals from 10 investment banks to manage its EUR 1-1.5 bn eurobond issuance in April, according to Finance Minister Amr El Garhy. The minister had said last week that Egypt will settle on the winning banks within two weeks.

French business delegation in town this week: A delegation from France’s main business union, MEDEF International, will be visiting Egypt on Monday and Tuesday. The delegation will be headed by Marc Rennard, head of the union’s digital taskforce and the deputy CEO of Orange Group in charge of customer experience and mobile banking. The delegation will be meeting with the central bank as well as the finance, health, and CIT ministries. They will also meet with private sector players in the payment solutions sphere to discuss cybersecurity, e-government, e-identity, payment dematerialization, and digital transformation.

Alfanar is hosting an interactive discussion about trends in social entrepreneurship and sustainable development in vulnerable communities in Egypt and the region. The session takes place this morning at the Nile Ritz Carlton, kicking off at 9:00am CLT. Panelists include Social Solidarity Minister Ghada Waly, Olayan Financing CEO and Alfanar Chairman Lubna S. Olayan, and our very good friend Nadine Okasha, SODIC director of strategy, research & PR. Nadine will be talking about SODIC’s CSR work and how the company has been investing in social enterprises with the goal of making them scalable and sustainable in lieu of charitable donation. You can sign up here.

Watch this space: Italy’s Eni and the UAE’s ADNOC will be signing an agreement today following a meeting between Italian Prime Minister Paolo Gentiloni meets Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed, the Italian government said. Sources tell Reuters it is an offshore agreement.

Want to stay healthy well into old age? Hop on a bike. (Or, odds are, try just about any other aerobic exercise.) “Doing lots of exercise in older age can prevent the immune system from declining and protect people against infections,” the BBC reports, saying a recent study in the journal Aging Cell found “followed 125 long-distance cyclists, some now in their 80s, and found they had the immune systems of 20-year-olds.”

Coca-Cola is planning to launch an alcopop-style alcoholic drink for the first time in the company’s 125-year history, BBC reports. However, the 3-8% alcohol product will be on shelves in Japan and is unlikely to be sold elsewhere.

On The Horizon

Stop us if you’ve heard this one before: The first direct flight between Moscow and Cairo in over two years is expected to take off in late March or early April, according to Akhbar El Youm’s print edition. Sources tell the newspaper that necessary permits will be issued this week. Flights had been set to resume in February. Russian officials had pinned the blame on a delay in agreements over ground handling services, which the Egyptian side had denied, claiming all necessary agreements were concluded during Russian President Vladimir Putin’s visit to Cairo last year.

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.

Naeem Holdings’ shares will officially begin trading on the Dubai Financial Market (DFM) on 25 March, Reuters reports. The company had received approval from the Financial Regulatory Authority for its dual listing last month.

Enterprise+: Last Night’s Talk Shows

Striking National Cement Company workers are testing Public Enterprises Minister Khaled Badawi’s goal of bringing private sector management principles to state companies. And we’re glad to see he isn’t bowing down to pressure. Not much else of note on an airwaves dominated by school lunches, talk of expat voting, and football.

Public Enterprise Ministry holds its nerve on public sector reforms: An interesting debate on whether workers’ rights trump bringing state companies in line with private sector management principles is playing out at the strike of at the National Cement Company. Workers are continuing to strike against cost cutting measures by the management. MP Mohamed Fouad told Lamees Al Hadidi that the House of Representatives has requested a briefing about the situation at the state-owned cement producer (watch, runtime: 2:32). Public Enterprises Minister Khaled Badawi called in to tell Al Hadidi that the measures, which include shutting down factory furnaces, were necessary to reduce the EGP 971 mn in losses — the highest at any one state company. Badawi justified cutting employee incentives by saying they had received bonuses of up to 400%, far higher than the figure mandated by the company’s bylaws. He added that the company’s management is considering opening the door for early retirement (watch, runtime: 11:18).

The Education Ministry will start serving school lunches again after service was suspended for nearly a year following a spate of food-poisoning cases. Education Minister Tarek Shawki told Lamis Al Hadidi that the system of purchasing, storing and supplying the meals has been thoroughly updated over the past year (watch, runtime: 4:27). He said the budget allocated to school feeding programs over the year is about EGP 1 bn and that the ministry distributes around 11 mn meals daily (watch, runtime: 9:42).

Immigration Minister Nabila Makram discussed efforts to galvanize expat voting in France, the UK, Saudi Arabia, Kuwait, Jordan, Italy, Australia and Canada on Al Hayah Al Youm (watch, runtime: 9:04). Khaled Abu Bakr, who appears to have replaced Nahwand Serry as co-host of the show, also chatted with Al Masry Al Youm chairman Abdel Moneim Saeed to discuss the presidential elections and the Sinai operation (watch, runtime: 37:58).

Relations with Khartoum have warmed significantly over the past few months, especially now considering the potential establishment of a joint force with Egypt to protect borders, Kol Youm’s Amr Adib told viewers (watch, runtime: 2:00).

In another one of the show’s non-sequiturs, talk moved to football. Those who took part in clashes that broke out between Al Ahly club fans and security forces during a match between Ahly SC and Gabon’s CF Mounana in Cairo stadium last week will not be allowed to attend Ahly again, club spokesman Sherif Fouad told Adib (watch, runtime: 40: 07).

Speed Round

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Annual urban inflation fell to 14.4% in February from 17.1% in January, according to a CAPMAS release. Core inflation dropped to 11.88% from 14.35% a month earlier. The drop in inflation rates paves the way for a potential interest rate cut later this month, Reuters suggests. “The Central Bank of Egypt is ahead of target on the year-end inflation rate. The drop supports another one percent cut in (interest rates at) the next monetary policy meeting,” Pharos Securities head of research Radwa El Swaify says. The central bank will next meet to review interest rates on 29 March.

EXCLUSIVE: IPO WATCH- Carbon Holdings has reportedly tapped a top investment banking house to serve as advisor and global coordinator for an IPO that would value the company north of USD 1 bn, we’re told by sources with knowledge of the preparations. The stake sale is likely to be the largest IPO in Egypt since 2011; the structure of the transaction and the secondary exchanges that will ultimately be selected are still up for grabs, we’re told. Preparations for the IPO come as the Carbon, an integrated petrochemicals producer founded by the industrialist Basil El-Baz, has reportedly received sign off on financing commitments worth more than USD 2 bn for its USD 10.8 bn Tahrir Petrochemicals Corporation (TPC). Carbon is believed to be targeting a 2H2018 financial close for TPC. Senior Carbon officials declined to comment when reached yesterday.

What’s TPC? The USD 10.8 bn Ain Sokhna-based TPC is a fully integrated petrochemical complex designed to serve industrial demand in Egypt and abroad for raw materials used in the automotive, building and packaging industries, among others. TPC could create as many as 35k direct and indirect jobs during its four-plus year construction phase and another 3k skilled jobs when it’s fully up and running, according to a presentation seen by Enterprise.

Background: Carbon already runs operating companies including the Oriental Petrochemicals Corporation (OPC, a producer of polypropylene) and Egypt Hydrocarbon Corporation (EHC, the only exporting producer of low-grade ammonium nitrate in the Middle East and Africa). EHC has concluded trials and testing and is expected to enter into commercial service shortly. Other than El-Baz, whose public profile rose after a 2013 Euromoney speech in Cairo, Carbon shareholders include UAE-based Al Nowais Investments and Mazrui Holdings as well as Blustone Management, among others.

The government is expecting the budget deficit for the current fiscal year to reach 9.5-9.7% of GDP, down from 10.9% in FY2016-17, according to a statement from Ittihadiya. It expects this to drop again to 8.5% of GDP in FY2018-19. The Finance Ministry had announced on Thursday that the budget deficit for FY2017-18 will reach 9.6-9.8% of GDP, in a statement picked up by Reuters. The ministry had updated its projections in late January to 9.4% from an initial rate of 9% to account for the increase in global oil prices. For the next fiscal year, the ministry said it was targeting a budget deficit of 8.5-8.8%, a primary surplus of 1.8-2%, and GDP growth rate of 5.5%. The draft budget for FY2018-19 will be presented to the House of Representatives on 31 March.

Transportation Ministry to kick off privatization of railway system: The Transportation Ministry is reportedly about to begin privatizing Egypt’s railways and divvying up railway assets for the private sector to manage, ministry sources tell Al Borsa. The ministry will establish companies to manage each railway and these will be run by private companies, they added. The pilot project of the program will involve three railway lines: Ain Sokhna-New Capital, Luxor-6 October City, and Hurghada-Luxor. The ministry began procedures to establish the companies immediately following the House of Representatives vote last week to approve amendments to the Railway Act, the sources said.

Egypt aims to build on the strong recovery of its tourism sector in 2017 with a better marketing strategy, Tourism Minister Rania El Mashat told tourism portal FVW. “We must be more flexible and faster with our marketing,” El Mashat said, adding that “Egypt needs to find a story to tell and then adapt it for different key source markets.” She also said she intends to make Egypt a more attractive destination for a wider range of tourists.

The ministry is now working to “revisit some of [the] parameters” of the charter flights incentives program, El Mashat told Reuters on Thursday. The minister did not disclose further details on what changes are being considered, but noted that they are “based on feedback from our different stakeholders.” The program — which expires in October — offers payouts and fee exemptions to flights and tour operators that bring in a certain number of tourists. This comes as Thomas Cook is reporting a 50% y-o-y jump in summer and winter bookings in 2018, Blue Sky CEO Hossam El Shaer tells Al Shorouk. According to El Shaer, Marsa Alam and Hurghada are seeing the biggest jump in bookings, while winter bookings to Luxor are up 20% y-o-y.

Cruise ship circuit with Greece, Cyprus? El Mashat is reported to have agreed with her Greek and Cypriot counterparts to establish a cruise ship line between the three countries, according to Ahram Gate. A committee will be formed to study the project’s feasibility and details.

Prosecutors drop case against Ahmed Ezz as statute of limitations kicks in: The Cairo Criminal Court dropped the case against steel magnate Ahmed Ezz and former Industrial Development Authority Chairman Amr Assal, ruling that the statute of limitations for the case has expired, Al Masry Al Youm reported. The two had been accused of squandering public funds. The court also lifted travel bans on each of the two. Ezz had been handed a 37-year prison sentence in the case in 2013, but recently reached a EGP 1.7 bn settlement agreement with the government, Reuters noted.

Passenger car sales declined 2.3% y-o-y in January to 6,800 vehicles from 9,700 in the same month last year, according to an Automotive Marketing Information Council report picked up by Al Mal. January say the lowest number of cars sold since May 2017 and the slump comes after sales had recovered substantially in December. The decline is attributed to low sales of imported vehicles, which dropped 21.4% y-o-y; sales of locally assembled vehicles rose 25% y-o-y in January.

South African insurer Sanlam looking for Egypt entry, African acquisitions: South African insurer Sanlam is “scouring Africa for more acquisitions to extend its lead as the continent’s largest financial-services company outside of banking,” Bloomberg reports. Sanlam is “looking for ‘bolt-on’ acquisitions in Ghana, as well an entry into Egypt and to build a strategic partnership in Ethiopia once it opens its insurance industry to foreign investors, Sanlam emerging-market head Junior John Ngulube said.” Sanlam is spending USD 1.1 bn to take full control of Morocco’s Saham Finances SA, bringing the total investment in the firm by Sanlam and one of its units to about USD 1.75 bn since February 2016.

MOVES- Finance Minister Amr El Garhy appointed Amr El Kholy as Vice Minister for Customs and Public Revenues, Al Mal reported. El Kholy, who was most recently CFO at Olayan Group subsidiary Rashidi El Mizan, was appointed prior to Amr El Monayer’s resignation as Vice Minister of Finance for Tax Policy, Al Borsa reported.

MOVES- Former Public Enterprises Minister Ashraf El Sharkawy was appointed as the new president of Misr Iran Development Bank, succeeding Ismail Hassan, Al Mal reported.

Did Abla Fahita get shut down? CBC has denied reports that the Supreme Council for Media Regulation has ordered the indefinite suspension of the channel’s popular Abla Fahita satirical puppet show, according to a statement by the television network. CBC explained that the media council only had “remarks” about the show, asking the channel to take the necessary action. The network’s statement came after several media outlets claimed the show was ordered off air.

Is someone in Egypt hijacking local internet users’ connection to secretly mine cryptocurrency? Researchers at Citizen Lab found Canadian-made “deep packet inspection (DPI) middleboxes” in Egypt (and also Turkey) that are being used “likely by nation states or ISPs” to “hijack Egyptian Internet users’ unencrypted web connections en masse, and redirect the users to revenue-generating content such as affiliate ads and browser cryptocurrency mining scripts,” the report says adding that it is “likely an effort to covertly raise money.”

The middleboxes are also being used to block websites? The report explains that this type of tech, which is made by Canada’s Sandvine (formerly Procera Networks), “can prioritize, degrade, block, inject, and log various types of Internet traffic,” going further to state that “In Egypt, these devices were being used to block dozens of human rights, political, and news websites including Human Rights Watch, Reporters Without Borders, Al Jazeera, Mada Masr, and HuffPost Arabic.” You can view the full report here. The story is being widely picked up by international news sites, including The Associated Press, QZ, The Register, ETH News, Forbes, CBC, Slate, and Cyber Scoop.

France needs US authorization before it can sell Egypt French Scalp cruise missiles with American parts, Dassault Aviation Chairman and CEO Eric Trappier said on Thursday, Defense News reports. “This is a government-to-government contract. If there are authorizations, then it is up to the government for the component and the government for the aircraft,” he said. French and US officials declined to comment. News had surfaced last month that talks over the sale of 12 Rafale planes from France have floundered over the US refusing to export the required components saying it violates US International Air Traffic in Arms Regulations. Egyptian officials have not been pleased with the delay.

Saudi to lift strawberry, pepper import ban in a few days? The Agriculture Ministry has received word from Saudi authorities that they would lift the ban on imports of Egyptian peppers and strawberries in a few days’ time, Deputy Minister Safwat El Haddad said, Al Mal reports. The decision was made during a meeting between Agriculture Minister Abdel Moneim Al Banna and his Saudi counterpart last week, where both sides reviewed stricter quality control measures that Cairo enforced on its exports, including the Global Good Agricultural Practices (GLOBALGAP) framework. Saudi had decided to ban imports of Egyptian strawberries and peppers last year due to high levels of residual pesticides. A delegation from Egypt’s Agricultural Quarantine Authority had also traveled to Riyadh last week to negotiate an end to the ban. The fate of Egyptian guavas, which Saudi has also banned, remains unknown.

Germany deported 100 Egyptians over residency permit violations, the Associated Press Reports. The deported individuals “were handed over at Cairo’s international airport to Egyptian authorities who are investigating them and the circumstances surrounding their deportations,” airport officials told the AP. However, Egypt’s Ambassador to Berlin Badr Abdel Aati dismissed the reports as “inaccurate,” explaining that only nine people were deported, according to a Foreign Ministry statement.

MbS’ purge propels Nassef to the top of the Arab rich list: Nassef Sawiris topped Forbes’ list of the richest Arabs for 2018 with an estimated net worth of USD 6.6 bn. “Forbes chose to leave off all 10 Saudis given reports of asset seizures after some 200 people, including some bn’aires were detained.” This meant that Prince Al Waleed bin Talal, who topped last year’s list, was excluded from this year’s. Forbes included those with an estimated net worth of USD 1 bn and over, and 31 individuals made the list with a total net worth of USD 76.7 bn. The other five Egyptians on the list are: Naguib Sawiris, Mohamed Mansour, Yasseen Mansour, Mohamed Al Fayed, and Youssef Mansour.

“Work required to list Aramco” will be done by 2H2018, but not the IPO itself: The Saudis appear to be throwing everyone off once again on when exactly they plan to have the Aramco IPO. CEO Amin Nasser said on Thursday that all work required from the oil giant for the IPO will be completed in the second half of 2018. Meanwhile, Aramco’s Chairman Khalid Al Falih hinted that the listing could be pushed to 2019. “Between 31 December and 1 January there is no value lost for the kingdom. So, I don’t see this artificial deadline that you refer to as being significant,” Al Falih told Bloomberg. Al Falih also said the IPO would be “anchored” by a listing on Saudi Arabia’s local exchange and any international listing would be announced in due course, if at all. Their statements come as Aramco signed a number of agreements with UK companies, including with Shell, Amec Foster Wheeler Plc, and a partnership with think tank Chatham House, during Mohamed Bin Salman’s UK tour, the company said.

US President Donald Trump signed on Thursday an order imposing 25% tariffs on steel imports and 10% tariffs on aluminum imports from all countries except Mexico and Canada, according to The Wall Street Journal (paywall). “In announcing the measures, the president outlined his broader trade agenda, including rewriting existing U.S. pacts and a continuing sweeping investigation of Chinese trade practices, issuing a veiled threat that even bigger penalties are looming against Beijing.” However, Trump also signaled that the tariff policy is open to more exemptions — including for the US’ military allies — after his initially unwavering position pushed White House National Economic Council director Gary Cohn to resign last week.

Egypt may end up losing USD 178 mn in profits thanks to the tariff hikes, Sputnik reported, citing El Watan. A source in the Trade and Industry Ministry told the daily that Cairo was considering asking the US for an exemption.

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Egypt in the News

Disputes over natural gas reserves in the Eastern Mediterranean could play into Egypt’s favor where exports to Europe are concerned, Yigal Chazan suggests in a piece for the Financial Times (paywall). The competition between Mediterranean neighbors over natural gas could “complicate plans to build pipelines linking producer countries to consumer markets,” he says, arguing that Egypt’s idle liquefaction plants “could offer Cyprus and Israel a cost-effective and secure distribution route to Asia, through the Suez Canal, and Europe.” Egypt’s Dolphinus Holdings has already inked an agreement that will see Egypt receive USD 15 bn-worth of Israeli gas. Cyprus is on its way to singing a similar-style pact with Cairo, which is gearing up to sign an agreement with the EU before mid-2018 that will see it export LNG through its liquefaction plants.

This comes as the Turkish enclave of Cyprus threatened to throw fuel to the fire. Turkish Cyprus’ Foreign Minister Kudret Ozersay said that they would launch their own exploration efforts if the internationally recognized Cyprus government doesn’t sit down for negotiations, Reuters reports.

On a related note, Egypt will soon be at liberty “to fish for the next giant cache to satisfy its growing domestic appetite” for LNG, with Eni close to finalizing work on Zohr and BP wrapping up its activities in Atoll and the Giza and Fayoum concessions, says Upstream Online.

Is Egypt mediating secret meetings between Riyadh and Tel Aviv? Senior Saudi officials reportedly “held a series of secret meetings in Cairo last week” with Israeli counterparts that were mediated by Egypt, an unnamed member of the Palestinian Authority (PA) said. The story was reported by The Times of Israel and Sputnik, citing a report by the Khaleej Times. The UAE-based paper has, however, disavowed all knowledge of the story, dismissing it as “fake news” and “propaganda.”

On a related note, Cairo and Riyadh have been pushing Palestinian President Mahmoud Abbas to accept a peace treaty that US President Donald Trump plans to announce soon, sources from the PA tell i24News. “Saudi Crown Prince Mohammed bin Salman and Egyptian President Abdel Fattah El Sisi both told Abbas that he has no choice but to be pragmatic,” they add.

…and speaking of MbS, the Saudi royal reportedly sang Egypt’s praises to UK officials during his visit over the weekend. His message “assigned a special status to Egypt as Saudi Arabia’s partner in confronting the challenges to the region and in economic projects, such as the NEOM megacity plan,” says The National.

Michael Wahid Hanna’s crystal ball tells him the real struggle for Egypt’s fate will come after the presidential elections, when the regime will seek to amend the constitution to extend presidential terms and abolish term limits. “If the preservation of its republican character is not sufficient to stir Egypt from its current authoritarian resurgence, it could well be locked in the destabilizing familiar old compact in which only death, coup or uprising can produce a political transition,” he suggests in a piece for The Washington Post.

Social and cultural norms in emerging markets including Egypt are restricting the extent to which women seek employment in the booming ridesharing industry, according to a report from the International Finance Corporation (pdf). The report finds that apps such as Uber and Lyft hiring women drivers could lead to positive results both economically and in creating a safer environment for women customers. “17% of women riders surveyed identify the lack of women drivers as a reason not to use the Uber app more often, and 40% would prefer a woman driver when traveling alone or at night. Attracting more women drivers could therefore encourage more women to ride, thereby further increasing demand for women drivers, creating a virtuous cycle.”

Ancient Egyptian women were considered equal to men, Egyptologist Valentina Santini tells CNN’s Ben Wedeman. “They could divorce. They could own property. They had many rights that women in subsequent civilizations didn’t have,” she adds as she shows him Turin’s Egyptian Museum.

Also worth noting in brief today:

  • Egypt’s international borrowing spree has added to the country’s debt burden, David Awad writes for Al Monitor.
  • Egypt has launched an unprecedented crackdown on media as President El Sisi heads into a virtually uncontested election, France24 writes.
  • The Financial Times lists swimming in Egypt’s Red Sea as one of its choices for the best active beach breaks.
  • Egypt continues to struggle to end FGM, Hayam Adel writes for Reuters.
  • The Armed Forces’ counterinsurgency operations in Sinai are getting a lot of ink in the foreign press, with Sputnik and Asharq Al-Awsat noting that 105 terrorists have been killed since it started and the WSJ pointing out that North Sinai’s Al Arish has been on lockdown since.
  • The prosecution of singer Sherine Abdel Wahab shows the state wishing to stamp out anything that deviates from its own values, Niamh Carroll writes for Nouse.
  • The son of former President Mohamed Morsi says the Egyptian government will not allow the outside world reach his father for fear of being exposed, Al Jazeera English reports.

On Deadline

Allowing the private sector to participate in a comprehensive upgrade program wi ll “end the tragedy” of Egypt’s railway system, Hany Aboul Fotoh writes for Al Borsa, listing the advantages of the government’s recent amendment of the Railway Act.

Worth Watching

Astronauts have created a real time video from stunning photographs of Eg ypt’s Nile and the Red Sea taken aboard the International Space Station (ISS) as it passes over Egypt and Saudi Arabia (watch, runtime: 03:38).

Diplomacy + Foreign Trade

Rubio pushing on Egypt elections in letter to Tillerson: The US must “fulfill its commitment to the Egyptian people” by reaffirming the importance of ensuring the upcoming elections are a legitimate democratic exercise, Republican Senator Marco Rubio says in a letter to Secretary of State Rex Tillerson.

Egypt signed four loan agreements with the French Development Agency (AFD) on Thursday worth a combined EUR 59.6 mn, according to an Investment Ministry statement. Under the agreements, the AFD will provide EUR 50 mn to financing SMEs run by women, EUR 8 mn to the development of the Alexandria tramway, EUR 1.5 mn to support the energy sector, and EUR 130k to improving access to healthcare in Delta and Canal cities. The AFD has already committed EUR 300 mn and EUR 100 mn to the Cairo Metro and Alex tramway projects, respectively, and is expected to sign two other funding agreements with the Transport Ministry, on each in May and September, for both projects.

Sudan has proposed establishing a joint military task force with Egypt to help protect shared border areas, Khartoum’s ambassador Abdel Mahmoud Abdel Halim said on Thursday, Al Masry Al Youm reports. Abdel Halim, who returned to his post last week after a two-month absence following an escalation of tension between the two countries, said that the coming period will see both sides work hard to normalize ties. Relations took a turn for the worst last year over failed negotiations on the Grand Ethiopian Renaissance Dam (GERD), which saw Sudan side with Addis Ababa, and a dispute over the border territory of Halayeb and Shalatin. Egyptian Foreign Minister Sameh Shoukry had met with his Sudanese counterpart Ibrahim Ghandour last week to discuss developments in GERD talks, which are on hold until Ethiopia elects a new prime minister.

Turkey waiting in the wings: This comes as Sudan’s central bank says it signed a USD 2 bn loan agreement with an unnamed Turkish company “to provide banking facilities and to import petroleum products and wheat,” Reuters reports.

Otherwise worth noting in brief this morning:

  • Egypt and Saudi Arabia’s “anti-Iran” claims are “groundless, bogus, and an insistence on the past harmful mistakes,” Iranian Foreign Ministry Spokesman Bahram Qassemi said, according to Tasnim News Agency.
  • President Abdel Fattah El Sisi met with Bahrain’s Foreign Minister Sheikh Khalid bin Ahmad Al Khalifa on Thursday to discuss regional issues and ways to combat terrorism, according to an Ittihadiya statement.
  • India wants to further strengthen its ties with Egypt in textiles through trade and investment, Fibre2Fashion reports.

Energy

EEHC to announce winning offer for Hamrawein power plant by April’s end

The Egyptian Electricity Holding Company (EEHC) is expected to announce the winning company or consortium for the 6.6 GW-capacity Hamrawein “clean coal” plant by the end of April, EEHC sources tell Al Borsa. The Orascom Construction-Elsewedy Electric-Mitsubishi Hitachi consortium is currently the frontrunner in the selection process, ahead of GE and a Shanghai Electric-Dong Fang-Hassan Allam consortium, they add. The EEHC and Belgian consultancy firm Tractebel expect to complete reviewing the financial offers presented by the end of March, and will then pass along the results of their review to Electricity Minister Mohamed Shaker for a final decision.

Infrastructure

Gov’t extends bidding window for 6 October City dry port

The General Authority for Ports & Dry Land has extended the bidding window for the 100-feddan Six October City dry port project for an additional month, Al Borsa reported. The authority received several requests from interested investors to extend the deadline, which was initially set as last Wednesday, according to an unnamed source. The project, which will be developed under a PPP framework, will require an initial investment of around USD 100 mn, Transport Minister Hisham Arafat had said.

Basic Materials + Commodities

Supply Ministry raises local rice buying price EGP 200 per tonne

The Supply Ministry has raised the price at which it is purchasing rice from local farmers for the subsidy system by EGP 200 per tonne to EGP 6,300 per tonne as rice barley prices have been on the rise, Al Borsa reports. Agricultural Exports Council member Mostafa El Nagary expects rice prices to continue rising during the coming period as demand increases in the lead-up to Ramadan.

Real Estate + Housing

Housing Ministry selects six companies to develop Maspero Triangle

The Housing Ministry has selected six companies to work on developing the Maspero Triangle, unnamed ministry sources told Al Borsa. The ministry signed contracts with two companies thus far and expects to ink the remaining agreements within 10 days.

Tourism

Culture Ministry to tender management contract for GEM in May

The Culture Ministry is planning to issue a global tender in May for the management of the Grand Egyptian Museum, Minister Khaled Anany told Al Mal. The ministry is currently preparing the tender’s terms and expects to drum up significant interest, Anany said. The soft opening of the USD 1 bn museum is slated for mid-2018.

Travco eyeing tourism project over 2.5 mn sqm in Alamein

Travco Travel Company of Egypt is hoping to establish a tourism mega project over 2.5 mn sqm in Alamein, company chief Hamed El Chiaty tells Al Shorouk, without disclosing any details on the cost of the project. The company is waiting for the approval of the Alamein City Council to receive the land plot.

Banking + Finance

FRA approves capital increase requests from MNHD, Porto Group, EG Bank, Naeem Holding

The Financial Regulatory Authority (FRA) approved on Thursday EG Bank’s request to raise its issued capital USD 22.5 mn to reach USD 365.3 mn, to be funded through its 2017 earnings, according to an EGX statement (pdf). The FRA also approved Naeem Holding’s request for a USD 21.9 mn capital increase to USD 240.4 mn; Madinet Nasr Housing Development’s request to increase its issued capital EGP 152.8 mn to EGP 1.15 bn through its 2017 earnings; and Porto Group’s request to increase its issued capital EGP 100.3 mn to EGP 601.8 mn through its 2016 and 2017 profits.

Eagle Advisers to advise on agrifoods IPO in 2018

Investment outfit Eagle Advisors is planning to advise on an IPO of an unnamed agrifoods company in 2018, in a transaction worth EGP 400 mn, Chairman Yasser Emara tells Al Masry Al Youm. The company hopes to begin listing procedures before the end of 1Q2018, he added.

On Your Way Out

A snowball’s chance in Egypt: A young Egyptian architect has won a competition for building the best Igloo in Russia, Masrawy reports. Sohaib Mohamed and his team raised the Egyptian flag over the mountain-top Igloo, where they spent two nights in sub-zero temperature.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.5661 | Sell 17.6661
EGP / USD at CIB:
Buy 17.56 | Sell 17.66
EGP / USD at NBE: Buy 17.55 | Sell 17.65

EGX30 (Thursday): 16,472 (+0.5%)
Turnover: EGP 1.5 bn (32% above the 90-day average)
EGX 30 year-to-date: +9.7%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 0.5%. CIB, the index heaviest constituent ended up 1.6%. EGX30’s top performing constituents were ACC up 6.8%, Egypt Aluminum up 5.6%, and Eastern Co up 3.9%. Thursday’s worst performing stocks were Emaar Misr down 3.7%, Abu Qir Fertilizers down 3.4%, and Porto Group down 2.8%. The market turnover was EGP 1.5 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +190.5 mn
Regional: Net Short | EGP -91.0 mn
Domestic: Net Short | EGP -99.5 mn

Retail: 55.5% of total trades | 51.8% of buyers | 59.2% of sellers
Institutions: 44.5% of total trades | 48.2% of buyers | 40.8% of sellers

Foreign: 22.0% of total | 28.1% of buyers | 15.9% of sellers
Regional: 16.9% of total | 14.0% of buyers | 19.9% of sellers
Domestic: 61.1% of total | 57.9% of buyers | 64.3% of sellers

WTI: USD 62.04 (+3.19%)
Brent: USD 65.49 (+2.96%)
Natural Gas (Nymex, futures prices) USD 2.73 MMBtu, (-0.87%, April 2018 contract)
Gold: USD 1,324.00 / troy ounce (+0.17%)
TASI: 7,562.11 (+1.46%) (YTD: +4.65%)
ADX: 4,572.10 (+0.17%) (YTD: +2.93%)
DFM: 3,157.45 (-0.77%) (YTD: -6.31%)
KSE Weighted Index: 410.49 (-0.39%) (YTD: +2.26%)
QE: 8,308.34 (-0.75%) (YTD: -2.52%)
MSM: 4,929.80 (+0.03%) (YTD: -3.32%)
BB: 1,370.25 (+0.29%) (YTD: +2.89%)

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Calendar

12-13 March (Monday-Tuesday): French business union MEDEF’s delegation visit to Egypt.

12-16 March (Monday-Friday): 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. © 2021 Enterprise Ventures LLC.

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