Sunday, 18 March 2018

CBE signalling rate cuts next week?

TL;DR

What We’re Tracking Today

Another tell the CBE may lower interest rates this month? The central bank put out a statement on Thursday (pdf) saying that February’s drop in annual urban inflation to 14.4% was the lowest inflation rate witnessed since October 2016. As signs pointed to the CBE reaching its inflation target of 13% by 4Q2018, the CBE decided to lower interest rates by 100 Bps last month, the statement said. The CBE expects inflation to remain under control in the medium term. Look for this to fuel the expectation that the CBE’s monetary policy committee will cut interest rates this month. Research houses from EFG Hermes to Pharos have been unanimous in saying that the CBE might cut interest rates again this month.

The central bank’s Monetary Policy Committee next meets on 29 Marchto consider interest rates. Not this coming Thursday, as we suggested last week. Mea culpa, mea culpa, mea maxima culpa.

The slog to to the next fiscal year’s budget has begun: The Ismail cabinet will meet today to discuss the FY2018-19 budget, Prime Minister Sherif Ismail reportedly said, according to Al Mal. The government is targeting a budget deficit to 8.5% of GDP next fiscal year and a primary budget surplus of 2%. Ismail added that the new budget would see unprecedented spending on social welfare, but did not note projected cuts to energy subsidy spending. Finance Minister Amr El Garhy had said that the new budget would target GDP growth 5.5% and projected that revenues for the year would reach EGP 1 tn for the first time in the country’s history. He had said the government would introduce the bill to parliament on 31 March.

Don’t expect the PM himself to attend the budget meeting as he reportedly left Egypt last night for follow up check ups on his health, according to the newspaper.

Foreign Minister Sameh Shoukry will meet with his Emirati counterpart Sheikh Abdullah Bin Zayed Al Nahyan in Cairo today, Al Shorouk reports. The meeting follows the first summit of the Egyptian-Emirati Economic Committee which saw the signing of a number of MoUs to lower trade barriers (we have more in the Speed Round).

Voting in the presidential election has begun with Egyptians living abroad voting at embassies and consulates worldwide. Voters in Egypt go to the polls 26-28 March. We have more in today’s Speed Round, below.

A weeklong heat wave begins today, with temperatures well above the seasonal average, according to the meteorological authority. Our favorite weather app shows the mercury rising to 31°C today and peaking at 40°C on Friday before cooling to the 23°C on Saturday.

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What We’re Tracking This Week

Sudanese President Omar Al Bashir arrives in Cairo tomorrow for a one-day visit to discuss “pending issues” with President Abdel Fattah El Sisi, an unnamed Sudanese diplomat tells Al Shorouk. The meeting comes as relations with Khartoum continue to improve following a rise in tensions over the Grand Ethiopian Renaissance Dam and accusations that Egypt was “meddling” in Sudanese affairs. Sudan’s ambassador also returned to his post in Cairo earlier this month, nearly three months after having been recalled for consultations.

Egypt’s first fintech-focused accelerator, the Pharos-affiliated Pride Capital, is hosting a workshop on Thursday titled “A Bright Future for Blockchain in Capital Markets” at the Greek Campus. The workshop will feature a discussion with EGX Chairman Mohamed Farid and Henerby Blockchain Consulting CEO Bobby Henerby. To register for a spot in the workshop, tap here if you’re on your mobile and click here if you’re on a computer. You can check out the workshop’s Facebook page for more information on the event or Pride Capital’s LinkedIn page for more on the accelerator.

Look for the newly appointed board of the Financial Regulatory Authority (FRA) to be ratified in the coming days by Prime Minister Sherif Ismail. The board will then get to work on executive regulations for the Capital Markets Act, completing the Insurance Act, and drafting legislation that would grant FRA new autonomy.

Cabinet is expected to discuss the executive regulations to the controversial NGO law “within days.” Parliament had signed off on the bill back in 2016. The act has since come under fire from Republican Senators and the US Congress’ human rights commission.

On The Horizon

The Game Sports Industry Conference — Egypt’s first-ever platform dedicated to the sports industry — kicks off in Cairo on 11 April. The conference, which will bring together industry professionals, leaders, and enthusiasts, will feature discussions on innovation and entrepreneurial thinking in the sports industry, leveraging sports as a marketing channel, and the digital transformation in sports, among others. You can register for the event here.

Enterprise+: Last Night’s Talk Shows

The airwaves last night were saturated with coverage of the presidential election, with the focus squarely on voter turnout.

The talking heads called up every diplomat they could get a hold of for the insider scoop on the voting at various embassies and consulates. The turnout apparently had everyone beaming with pride, including ambassadors Yasser Reda from Washington (watch, runtime 6:14), Hisham Badr from Italy (watch, runtime 3:25), Tarek El Kouny from Kuwait (watch, runtime 5:56), Ihab Nasr from Russia, and General Consul Hazem Ramadan from Jeddah (watch, runtime: 5:09). Egypt’s ambassador in London, Nasser Kamel, also proudly said that the atmosphere was not dampened by an attempt by a group of 10-15 Ikhwan supporters to disrupt the process (watch, runtime 5:10). Foreign Ministry spokesman Ahmed Abu Zeid relayed the same sense of happiness with citizens traveling long distances to cast their votes, and downplayed the Ikhwan disruption in London (watch, runtime: 5:57).

The diplomatic corps as a whole declined to provide figures on the voter turnout, repeating in near-unison that the National Elections Commission will release the numbers in due time.

The hosts also burnished their own patriotic credentials on air. Hona Al Asema’s Lamees Al Hadidi lauded Egyptian expatriates for what she described as “impressive” and “historic” turnouts across our embassies abroad, which she said acted as another nail in the Ikhwan’s coffin (watch, runtime 6:27). Kol Youm’s Amr Adib boisterously echoed Lamees and thanked everyone who made their way to a polling station (watch, runtime: 6:51).

Dearth of engineering student in London also in focus: Chatter on the airwaves took a more somber tone as Egypt’s ambassador in London Nasser Kamel discussed the latest developments with the investigation into 18-year-old student Mariam Mostafa’s death. The medical treatment Mostafa received during her hospitalization could play an important role in shaping the legal charges brought against her attackers, Kamel told Lamees on Hona Al Asema. He noted, however, that the identities of Mostafa’s attackers is known but British laws prevent minors from being arrested (watch, runtime: 4:00).

Meanwhile, Kol Youm’s Amr Adib got the latest on the tourism sector’s slow recovery from hotel industry expert Ahmed El Wasif, who said that the ITB Berlin tourism expo offered some reassuring indicators that Red Sea tourism is bouncing back, particularly among German nationals (watch, runtime: 2:30). Blue Sky CEO Hossam El Shaer also saw the expo, which saw Egypt signing the biggest number of agreements since 2011, as a positive omen (watch, runtime: 3:32).

National footballer Mohamed Salah’s super hat-trick occupied whatever airtime each host had left over after covering the elections. See Kol Youm’s Amr Adib (watch, runtime: 2:50), Hona Al Asema’s Lamees al Hadidi (watch, runtime: 1:23) Al Hayah Al Youm’s Khaled Abu Bakr (watch, runtime: 1:13), and DMC’s Eman El Hossary (watch, runtime: 3:39).

Speed Round

Speed Round is presented in association with

BP looking to sell off maturing Egypt assets and focus on gas, exploring exit from GUPCO: BP has reportedly begun meeting with prospective buyers for its stake in its 50-year-old JV with the EGPC, the Gulf of Suez Oil Company (GUPCO), banking sources told Reuters. The sale of the maturing assets comes as BP looks to focus on ramping up gas production in the eastern Mediterranean from fields such as the West Nile Delta development and its stake in Zohr. While the banking sources valued GUPCO at USD 500 mn, BP is hoping to raise USD 1 bn from the sale, sources familiar with the matter tell Bloomberg. BP has a target to sell USD 2-3 bn of assets this year, down from USD 4.3 bn in 2017, as it continues to shore up its finances following crude’s collapse. Divesting the Egyptian onshore fields could be sensitive as they employ thousands of local staff, sources added.

The buzz around IPOs in Egypt is “growing louder,” Tarek El Tablawy writes for Bloomberg, citing the upcoming listings of CI Capital and B Investments. “We see the market is right, and the company is in the right stage, so we decided: ‘Let’s go’ … The market is doing very well right now, and Egypt is in a good spot for public offerings,” B Investments’ Alaa Saba says. “While the potential to increase participation by Egyptians in stock-market investment is large, some of the biggest companies may wait with IPO plans until the central bank fulfills economists’ forecasts of interest-rate cuts, said Allen Sandeep, head of research at Naeem Brokerage.” He expects the bigger listings to come in 2H2018.

IPO WATCH- Speaking of B Investments, the firm plans to list its subsidiary Ibtikar for Investment Finance sometime in the next three years, B Investments founding partner and Chairman Hazem Barakat told Al Borsa in an interview. Barakat said that the firm is ready to exit some of its portfolio companies.

Conversely, the firm plans to up its investments using the EGP 460 mn in proceeds from its IPO, which is scheduled to take place on 29 March. The firm plans to increase its minimum investment in target acquisitions and subsidiaries to EGP 100 mn. The firm is studying new investments in the food, financial services, renewable energy and education, despite B Investments’ withdrawal from the government’s 200 PPP schools program, noted Barakat.

INVESTMENT WATCH- Dana Gas will spend USD 47 mn in CAPEX in Egypt this year, CEO Patrick Allman-Ward said, according to Reuters. The investment will only come if Egypt repays Dana Gas some of its receivables, he added, explaining that the money would go towards an ongoing drilling program in Egypt where Dana has two to four wells and where work has already begun. Allman-Ward noted that payments in 2H2017 were “sporadic and disappointing.” Dana Gas’ production in Egypt was around 39,500 boepd, up 5% y-o-y.

INVESTMENT WATCH- France’s Vicat Group planning to invest USD 50 mn, increase its stake in Sinai Cement. Sinai Cement’s majority shareholder, Vicat Group, is planning to invest USD 50 mn to reverse its subsidiary’s losses, Managing Director Gianfranco Tantardini said, Al Borsa reported. Vicat — which acquired 40% of Sinai Cement in 2003 — is also looking to increase its stake in the Egyptian company. According to Tantardini, Vicat is waiting on government approval to waive the 45% foreign ownership limits for the transaction to take place.

INVESTMENT WATCH- Will the gov’t sign off on the USD 900 mn Elsewedy / Marubeni / Masdar wind farm project this week? The UAE’s Masdar and Elsewedy Electric plan to hold high level meetings with the government to get its final sign off on the USD 900 mn development of two wind farms planned with the Elsewedy Electric / Marubeni / Masdar consortium. A senior official from Masdar told Al Masry Al Youm to expect an announcement this week on the details of the projects, including the final price tag. Final approval front he government was expected last month.

INVESTMENT WATCH- Emirati company SEED Group is planning to expand its investments in Egypt during the coming period, CEO Hisham Al Gurg tells Al Shorouk. The company, which is owned by Sheikh Saeed bin Ahmed Al Maktoum and has holdings from tech and healthcare to real estate and tourism, has already signed a franchising agreement with an unnamed Egyptian company as a precursor to several investment agreements that remain under study, according to Al Gurg. The chief executive did not provide any further details on the size, nature, or timeline of the company’s planned investments.

Should we expect a new wave of Emirati investments in Egypt? The Masdar and SEED announcements came on the sidelines of the first meeting of the Egyptian-Emirati Economic Committee, led by Trade and Industry Minister Tarek Kabil and UAE Economy Minister Sultan Bin Saeed Al Mansoori. The two sides had agreed to lower trade barriers and agreed to cooperate on bolstering investment in renewable energy, electricity, and water resources, according to a Trade and Industry Ministry statement. Both sides also agreed to unify trade standards inspection procedures and signed MoUs to facilitate promotion of private sector investments through trade shows.

Frontier markets specialist Renaissance Capital could look to broaden its shareholder base as it plans to expand into new markets such as Saudi Arabia, Bloomberg reports. “Joining forces with a partner is one of the possible scenarios,” Chairman Christophe Charlier says. “Nothing is imminent,” he explained, but a partnership with a sovereign wealth fund is among the options. Charlier added that Rencap is looking closely at Saudi Arabia, saying “we’re cautiously bullish and we’re following Saudi Arabia from the markets and research point of view.” Rencap is also optimistic about changes in Angola and the outlook for Ethiopia. It also bets that Egypt’s improved relations with the International Monetary Fund will unlock transactions and boost capital markets. Rencap is also planning to increase its investment banking presence in sub-Saharan Africa from its base in Johannesburg, Charlier said.

Moody’s says collateral assets registry is credit positive to Egypt’s banks: Ratings agency Moody’s praised on Thursday the recently launched movable collateral assets registry, saying that the ove will help banks reduce their credit risk, particularly for loans to SMEs. Moody’s said (paywall) that this registry is credit positive for banks, noting that it will inform credit decisions and improve bank’s ability to secure collaterals such as a borrower’s machinery, inventory, patents and crops, among other assets. “The registry will allow banks to check whether pledges of movable assets are already pledged elsewhere, and will allow banks to establish the priority of creditors against third parties, diminishing their credit risk,” Moody’s added.

Egypt will resume gas exports to Jordan by early 2019, Oil Minister Tarek El Molla told his Jordanian counterpart Saleh Kharabsheh, according to Petra News Agency. The minister’s announcement comes as EGAS and state energy firm Enppi signed a USD 13 mn agreement to build a 17 km steel pipeline for the Jordanian-Egyptian Fajr for Natural Gas Transport and Supply, Al Borsa reports. Construction will begin this year and is slated for completion by 2020. El Molla had hinted last month that Egypt was gearing up to resume sales to Jordan, which were called off after the events of 2011.

EgyptAir will resume direct flights between Cairo and Moscow as of 12 April, CEO Safwat Musallam announced in a statement. The national carrier will operate flights on Sundays, Tuesdays, and Thursdays, he said, and tickets are now on sale. The news came days after Russian airline Aeroflot announced it would resume direct flights for the same route on 11 April, starting with three weekly flights set to increase to daily flights from 12 June to 2 July to accommodate the World Cup. Tez Tours has since begun selling travel packages to Hurghada, according to Al Mal.

MOVES- AT Lease announced appointing Hossam Kassem as CFO for the company, according to a company disclosure.

Zaki Hashem & Partners and Linklater have been tapped as legal advisors to the investment banks managing Egypt’s planned EUR 1-1.5 bn bond issuance, Al Mal reports. BNP Paribas, Deutsche Bank, Standard Chartered, and Intesa Sanpaolo have been tapped to manage the issuance, which is slated for before the start of FY2018-19. Al Tamimi & Co. and Dechert were chosen as legal advisors to the government for the transaction.

Presidential election kicks off, poll proceeding “satisfactorily”: Expats cast their ballots at 116 polling stations in Egyptian embassies and consulates in 124 countries worldwide, with no major incidents to report, the spokesperson for the National Elections Commission (NEC) Mahmoud El Sherif told reporters yesterday. He added that Saturday, the second day of voting, was “good” and “satisfactory.” Turnout appears to have been heavies in the GCC, El Sherif suggested, but stopped short of saying how many voters had gone to the polls. Today will be the third and last day of voting for Egyptians living abroad, with elections in Egypt set to take place on 26 March.

The election is the top story on Egypt in the international press this morning. News wires have been noting how uneventful the polls were, interspersed with comments from Egyptians abroad on their views of the elections. Reuters and others carry comment from some boycotting the polls. The newswire also noted criticism from rights gourds of what they say is a crackdown on the media in the run-up to the election. A Washington Post oped by Cairo Institute for Human Rights Studies director Bahey Eldin Hassan is getting plenty of attention, as is a piece by D Parvaz for Think Progress. Coverage from the GCC, including in the National and Al Arabiya, was more friendly, focusing on high voter turnout.

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Spotlight: AmCham’s 2018 Doorknock in Washington, DC

We have special coverage from Washington, DC, of the American Chamber of Commerce in Egypt’s 2018 DoorKnock, the private sector’s premier lobbying drive each year to seed the Capitol and beyond with pro-business messages from Egypt. Today, we have coverage of a World Bank Group briefing and a panel discussion with senior members of the business community. We’ll be wrapping our special coverage tomorrow.

Egypt must expand the social safety net to support the middle class -World Bank Group

Egypt’s next wave of reform needs to pay special attention to supporting the middle class, according to Merza Hasan, dean of the executive board and executive director of the World Bank Group (WBG). “There must be a social protection program for the middle class because it’s that group that will be the main driving force for the economy,” he said, noting that while absolutely necessary, reforms have not been cost-free, especially for the mid- and lower-income classes. Speaking to the press delegation that accompanies AmCham on its 40th Doorknock mission to Washington, DC, Hasan pointed out that the government is aware of the social implications of its reform program and need to help the middle class overcome these challenges and push through to a new chapter of economic prosperity.

Improving health and education is another must. “The Bank and Egyptian government are very focused on tackling the issues facing the sectors of health and education because these ensure the sustainability of the economic reform measures that have been adopted,” said the WBG’s Alternate Executive Director Ragui El-Etreby, adding that actively pursuing good governance practices is also important for development. Human capital is Egypt’s greatest asset, Hasan also said, and educational reform should deviate traditional norms to focus on skill development and capacity building to enhance people’s employment prospects. “I believe that if we begin taking serious steps in reforming health and education then we will have provided the middle class with the protection it needs,” Hasan said. “But these things take time.”

Talks are already ongoing between the WBG and Egypt to decide on the best ways to expand the scope of their partnership to include health and education, according to El-Etreby, who said he expects to see “tangible developments” on that front soon.

It’s still unclear how much financial support Egypt can expect from the World Bank in 2018, but we could be looking at a package of over USD 1 bn to match last year’s if the Group is able to bolster its own capital. This past fiscal year already saw the WBG expand its budget for the region to USD 6 bn from USD 2.7 bn previously, and Egypt specifically has received significant focus as a reflection of confidence in ongoing development. “We know that reform efforts are serious this time around because they have come to include a social aspect to ensure their sustainability…and we already seeing results,” he said, pointing specifically to the WBG’s partnership with Egypt on renewable energy and the USD 500 mn development package for Upper Egypt. Hasan pointed out that the Bank is not only interested in providing Egypt with financial support, but also technical support and capacity building.

Panel report: Egypt is open for business.

PANEL REPORT- Egypt is open for business. That was the main message AmCham members delivered to a US audience at a panel discussion last week before a US audience led by AmCham President Tarek Tawfik, who was joined by CIB CEO for Consumer Banking Ahmed Issa, Ahead of the Curve CEO Dina Sherif, and Procter & Gamble’s Tamer Younes. You can read our full report on the highlights of the discussion here on our website. Among the key takeaways:

  • Egypt’s currency shortage “has been settled once and for all.” Liquidity in the banking system is driving foreign investors to the interbank market for their FX needs, rather than using the central bank’s parallel repatriation system.
  • The EGP float has made Egypt competitive as a regional export hub for multinationals.
  • There is a lot of dry powder in the banking system to fund the next wave of growth, with deposits in the sector close to EGP 3 tn (almost 100% of GDP).
  • The central bank will drive the adoption of IFRS 9 later this year, a “safe” and “conservative” accounting standard that minimizes balance sheet risk.
  • Egypt will have doubled its electricity production capacity by the end of 2018 to 50,000 MW to create a surplus
  • Industrial growth rebounded during 2017, and so did exports and FDI, thanks in large part to reform efforts
  • The phaseout of subsidies has nearly tripled industrial energy bills and is pushing industry to become more cost-efficient. Recycling waste, energy efficiency and recycling water are all now on the menu

Entrepreneurship and innovation are in overdrive and the private sector is taking note, whether that’s Goldman Sachs’ 10,000 Women initiative or CIB’s fintech accelerator at AUC.

  • It’s now time for a second wave of reform that digs deeper on an industry-specific level—and that tackles the bureaucracy.

Read our full report on the panel here.

Image of the Day

President Abdel Fattah El Sisi hoists the World Cup trophy in Cairo on Thursday during a televised ceremony attended by national team coach Hector Cuper and team captain Essam El-Hadary, according to Ahram Online. The World Cup trophy, which is currently on an international tour, was brought to Cairo by a delegation of FIFA officials.

Egypt in the News

Apart from the elections, the death of Egyptian student Mariam Mostafa topped coverage of Egypt in the foreign press. Egypt is “pressing UK authorities” to move faster with the investigation into her fatal assault, while Mariam’s family has criticized British police’s failure to arrest her attackers, according to the Guardian. British Foreign Secretary Boris Johnson “attempted to calm a brewing diplomatic row” over Mariam’s death — which has provoked social media outrage here in Egypt — by promising Egypt’s Foreign Ministry that British police are investigating the case. The ministry also issued a statement affirming that it is following up on the incident to ensure the perpetrators are brought to justice, while a parliamentary delegation will make its way to the UK tomorrow with the same goal,Al Shorouk reports.

The agreement to export natural gas from Israeli fields to Egypt has great strategic value for Israel and will improve regional stability, Sonia Gorodeisky writes for Globes. “In the new reality created, any damage by Hezbollah or Hamas to Israel’s ability to produce gas will also affect the supply of electricity to Jordan, Egypt and the Palestinian Authority … [this interest] will become an important component in the intelligence and security cooperation with neighboring countries in identifying and preventing sabotage, and a catalyst for them to seek calm if fighting breaks out with one of these organizations,” according to a study by the Institute for National Security Studies. A researcher said the agreement could also “improve the balance of power in the Middle East and stability with Lebanon and the Palestinian Authority, and ease the Iranian threat.”

Egypt is seeing a promising rebound in tourism ahead of the upcoming presidential elections, AFP reports. “Travel agencies, hotel managers, and diving centres told AFP that reservations are rising, especially in Red Sea destinations such as Hurghada and Marsa Alam.” AFP notes that the rebound is yet to reach Sharm El Sheikh due to the absence of UK and Russian flights, but Tourism Minister Rania El Mashat notes that “all issues around the airports’ security have already been resolved” and aviation officials are to meet in the coming weeks.

Egypt has yet to reclaim its position regionally “while power and influence shift east to wealthy and assertive Gulf oil exporters,” Nadine Awadalla and John Davison write for Reuters. “As long as Egypt faces internal security problems and the region is volatile, Cairo will focus on issues close to home such as militants in Gaza and Libya, and an Ethiopian dam that threatens its water supply. Thorny topics such as Palestinian-Israeli peace will take a back seat,” diplomats note. Former Foreign Minister Nabil Fahmy says that Egypt for now “will be forced to [handle] the fires that are raging around us because they create a sense of urgency.”

Also worth a quick skim:

  • President El Sisi says he is prepared to personally join the forces fighting Daesh, Hamza Hendawi writes for the Associated Press.
  • The Cyber Crimes Act “could codify internet censorship practices into national law,” according to the Advox Netizen Report.
  • Egyptians’ increasing dependency on opioids is part of a problem unfolding across Africa as a whole that is “not getting the attention it needs,” Quartz says.
  • The “deep-seated anti-black racism” in Egypt has prevented Egyptians from understanding and appreciating superhero film Black Panther, Mona Eltahawy writes for the Washington Post.

Diplomacy + Foreign Trade

Italian Foreign Minister Angelino Alfano praised the progress in Egypt and Italy’s cooperation in investigating the murder of Italian student Giulio Regeni during a meeting with Foreign Minister Sameh Shoukry on Thursday, according to a ministry statement. Shoukry reaffirmed Egypt’s commitment to finding those guilty for Regeni’s killing. The two ministers also discussed using economic cooperation as a vehicle for combating illegal migration and terrorism.

Egypt is expected to sign an agreement to join the Continental FreeTrade Zone (CFTZ) when the zone is launched at a summit in Kigali on Wednesday, Al Borsa reports. The zone, whose main objective is “to create a single continental market for goods and services,” will bring together 54 African countries. The mechanisms for the long-held dream of an Eurozone-style African agreement have yet to be revealed.

Speaking of trade liberalization agreements, we have what appears to be a list of known products Egypt stands to import and export under the Mercosur agreement, courtesy of Youm7. Egypt’s main exports to Mercosur countries under the agreement include products such as cotton, polyethylene, and phosphate fertilizer. Imports include iron ore, heifers, vehicle chassis and engines (nothing on the list on cars).

A delegation from Iraq’s Electricity Ministry has met with Elsewedy Electric head Ahmed Elsewedy in Cairo to discuss potential cooperation on power projects in Iraq, Al Shorouk reports. “The firm is looking to enter new markets which have strong demand for Egypt’s electrical goods,” said Elsewedy. The Iraqi delegation toured a number of Elsewedy’s facilities, said the newspaper. The meeting comes as Egypt prepares to take part in Iraq’s USD 88 bn reconstruction process.

Energy

US energy firm IPR announces three new oil discoveries

US energy firm IPR has made two new oil discoveries in the Western Desert’s Ras Qattara concession and a third in the South Disouq concession, IPR Vice President Elsayed Shahin tells Al Shorouk. The company, which drilled 23 wells last year, has already begun production on the first two discoveries, according to Shahin.

NREA looking into feasibility of USD 800 mn worth of renewable energy projects

The New and Renewable Energy Authority (NREA) is studying the feasibility of wind and solar energy projects worth a combined total of USD 800 mn, NREA head Mohamed El Khayat told Al Borsa. The projects would be tendered under an EPC+Finance framework.

El Sisi meets GE Chairman to talk future investments

President Abdel Fattah El Sisi met with General Electric Chairman John Flannery on Thursday to discuss the company’s future plans in Egypt, according to an Ittihadiya statement. Flannery reaffirmed his company’s commitment to completing its ongoing projects on schedule and looking into further openings for investment and cooperation.

Basic Materials + Commodities

Russian authorities ban two shipments of Egyptian potatoes, claiming contamination

Russia’s agricultural quarantine authorities flagged two potato shipments from Egypt, alleging that they were contaminated with potato brown rot, Agriculture Export Council head Abdel Hamid El Demerdash said, according to Youm7. The Trade and Industry Ministry confirmed the move but assured that this was not a blanket ban on potato exports to Russia and that the ban was limited to the two regions where the shipments originated, Al Shorouk reports. The Agriculture Ministry came out with a statement saying it would investigate the farms where the shipments came from and warned it may ban those exporters from exporting, according to Al Mal.

GASC purchases 240k tonnes of Russian and Romanian wheat in global tender

The General Authority for Supply Commodities (GASC) purchased 120k tonnes of Russian wheat and another 120k of Romanian wheat in an international tender on Thursday, Reuters’ Arabic service reports. The Supply Ministry said that Egypt’s wheat reserves would last 3.2 months, according to the wire service.

Manufacturing

Korean consortium in talks to establish electronics industrial complex in Matrouh

A consortium of unnamed Korean companies is in talks to establish a 400-500 feddan electronics industrial complex in Matrouh, a governorate source tells Al Mal.

Automotive + Transportation

Auto component manufacturers threats raise pressure to get Automotive Directive out

A number of auto components manufacturers are considering adding production lines for components for other industries or switching gears entirely due to falling car sales and the resulting shrinkage in the number of orders for auto parts, said head of the Egyptian Automotive Manufacturers Association Ali Tawfik. Those who have the ability to switch up production are considering producing parts for home appliances and infrastructure projects, he tells Al Mal. The warnings should give added impetus to the Trade and Industry Ministry to pass the Automotive Directive, which provides incentives to auto assemblers and component manufacturers to move up the value-chain to manufacturing to better compete against cheaper imports from the EU and other countries. The ministry has until 1 January before customs on EU-assembled cars reach zero.

Other Business News of Note

Economic court sequesters Al Hayat TV’s trademarks for failing to repay debts to MBC

An economic court issued a ruling on Thursday to sequester Al Hayat TV’s trademarks due to the network failing to repay USD 6 mn of debts owed to MBC, Al Mal reported. MBC had raised a lawsuit after Al Hayat had fallen behind on its debt repayments to the Saudi network, according to the newspaper. The ruling threatens the EGP 1.4 bn acquisition of Al Hayat by Tawassol for Public Relations in September, as the trademarks were a “core element” of the transaction. Al Hayat’s debts had surpassed EGP 1 bn over the previous few months.

Egypt Politics + Economics

El Sisi green lights fund for families of terrorist attacks’ victims

President Abdel Fattah El Sisi has signed off on a fund to support the families of victims of terrorist attacks and those wounded or hurt during military operations, Al Shorouk reports. Based on a law recently approved by the House, the fund will cover education costs, as well as medical services, and Hajj. It will be financed by an EGP 5 tax on various paperwork and official documentation fees.

National Security

Egypt suspects Daesh using Israeli sim cards -sources

The Egyptian Army suspects Daesh terrorists in Sinai are using Israeli sim cards and that is why it is knocking out Israel’s cellular networks in the region, sources said, according to JPost. “The Egyptian army is using technological means intentionally aimed at Israel’s cellular networks. Israel knows about this and is doing nothing to prevent it,” the report notes, citing an investigation.

Sports

BeIN Sports rejects USD 22.7 mn court fine

BeIN Sports says it rejects the USD 22.7 mn fine that was set by the Egyptian Competition Authority and upheld last week by the Cairo Economic Court, Broadband TV News reports. “beIN’s decision to progressively move its programming from NileSat (its backup satellite operator) to EshailSat (its primary satellite operator) is based on entirely valid commercial, technical and operational reasons and, in fact, results in improved satellite feed,” BeIN says.

On Your Way Out

The first batch of 12 double decker buses are officially roaming Cairo’s streets, Al Borsa reports. The MAN-Kastour buses, which cost around EGP 28 mn, hold 71 seats apiece — with the majority of the seats available on the top deck. The Public Transport Authority had signed a EGP 35 mn agreement last year to get 13 buses on Cairo’s streets as a replacement for the now-retired Heliopolis tram, and expects to bring the next batch of 28 buses by year’s end. Tickets will retail for EGP 5.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.5715 | Sell 17.6707
EGP / USD at CIB:
Buy 17.55 | Sell 17.65
EGP / USD at NBE: Buy 17.55 | Sell 17.65

EGX30 (Thursday): 16,999 (+0.7%)
Turnover: EGP 3.5 bn (199% ABOVE the 90-day average)
EGX 30 year-to-date: +13.2%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 0.7%. CIB, the index heaviest constituent ended up 1.9%. EGX30’s top performing constituents were Qalaa Holdings up 7.3%, EFG Hermes up 3.4%, and CIB up 1.9%. Thursday’s worst performing stocks Elsewedy Electric down 4.1%, Amer Group down 3.1%, and Egyptian Iron & Steel down 1.8%. The market turnover was EGP 3.5 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +383.9 mn
Regional: Net Short | EGP -194.9 mn
Domestic: Net Short | EGP -189.0 mn

Retail: 32.2% of total trades | 30.9% of buyers | 33.4% of sellers
Institutions: 67.8% of total trades | 69.1% of buyers | 66.6% of sellers

Foreign: 51.5% of total | 57.0% of buyers | 45.9% of sellers
Regional: 11.6% of total | 8.8% of buyers | 14.4% of sellers
Domestic: 36.9% of total | 34.2% of buyers | 39.7% of sellers

WTI: USD 62.34 (+1.88%)
Brent: USD 66.21 (+1.67%)

Natural Gas (Nymex, futures prices) USD 2.69 MMBtu, (+0.26%, April 2018 contract)
Gold: USD 1,312.30 / troy ounce (-0.42%)

TASI: 7,744.68 (-0.40%) (YTD: +7.17%)
ADX: 4,542.74 (+0.52%) (YTD: +3.28%)
DFM: 3,197.30 (+0.95%) (YTD: -5.13%)
KSE Weighted Index: 412.10 (+0.31%) (YTD: +2.66%)
QE: 8,847.79 (+1.11%) (YTD: +3.81%)
MSM: 4,896.93 (+0.05%) (YTD: -3.97%)
BB: 1,355.51 (-0.37%) (YTD: +1.79%)

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Calendar

23 March (Friday): Orchestra In Art gala concert “The Three Egyptian Tenors,” Arts-Mart Gallery, 9:00pm. 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. 11 April (Wednesday): The Game Sports Industry Conference, Nile Ritz-Carlton Hotel, Cairo. 17-18 April (Tuesday-Wednesday): Creative Industry Summit, Four Seasons Nile Plaza Hotel, Cairo. 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. 07 May (Monday): International Data Corporation’s CIO Summit, The Nile Ritz-Carlton Hotel, 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).

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