Monday, 19 March 2018

Gov’t unveils IPO Program

TL;DR

What We’re Tracking Today

Europe in the crosshairs for Finance Ministry’s EUR-denominated bond roadshow. Finance Minister Amr El Garhy revealed hints at the destination of the roadshow for a planned EUR 1-1.5 bn bond issuance. The roadshow will include Switzerland, the UK, Italy and Germany, the minister reportedly told Al Mal on Sunday. El Garhy explained the move by stating that Europe would be targeted as it is Egypt’s biggest trading partner. Also likely in the cards are stops in Asia, where appetite was heavy for Egypt’s most recent offering. The ministry has said it plans to make the bond offering — Egypt’s first denominated in EUR — before the start of the next fiscal year on 1 July.

The news comes after Côte d’Ivoire issued last Thursday a EUR 1.7 bn bond that became the largest euro-denominated issuance from an African sovereign since at least the start of this century, according to data from Bloomberg. It was also the second-biggest transaction in the currency from emerging markets this year, after Romania’s EUR 2 bn issuance in February.

Sudanese President Omar Al Bashir arrives in Cairo today for talks with President Abdel Fattah El Sisi, Al Shorouk reports.

Egypt and East Med gas appear to be driving interest in listings on the LSE: Greece’s Energean Oil & Gas listed on the London Stock Exchange on Friday. The company raised USD 460 mn, which along with a credit facility signed earlier this month, will go towards the USD 1.6 bn development of its Israeli offshore gas fields Karish and Tanin, which have potential reserves of up to 2.4 tcf. “East Med has had a lot of activity. Investors saw an opportunity to participate in the only independent E&P (exploration and production company) in the East Mediterranean, which is dominated by the majors,” Energean Chief Executive Officer Mathios Rigas told Reuters in an interview. The story is part of a string of announcements by companies traditionally averse to investments in Israel that followed the signing of the USD 15 bn gas import agreement between Egypt and Israel.

Mohammed bin Salman will touch down in the US this morning for a two-plus week, coast-to-coast visit. The Saudi crown prince is expected to be welcomed by US Vice President Mike Pence and national security advisor H.R. McMaster, according to the UAE’s The National, which has broken what it says is an exclusive look at MbS’ agenda. It includes a three-day stop in Washington, DC, before visits to Boston, Seattle, Los Angeles, Houston and Silicon Valley. MbS will meet with Trump tomorrow and is also expected to have sit-downs with Apple boss Tim Cook and Microsoft founder Bill Gates while in the US. The Washington Post has a good backgrounder. The New York Times, meanwhile, notes that in the run-up to the visit, the Trump administration has “implored Congress not to block military aid” to the kingdom, which the Wall Street Journal says comes as “debate flares over US support for [Saudi’s] deadly campaign” in Yemen.

Look for wall-to-wall coverage of MbS’ trip in Western media. The Times has already rolled out the welcome mat, with pieces on everything from “a cyberattack in Saudi Arabia with a deadly goal” to the disappearance of Sheikh Mohammed Hussein Al Amoudi (“He owns much of Ethiopia. The Saudis won’t say where they’re hiding him”) and MbS’ bid to create an entertainment industry from scratch.

Vladimir Putin has won another six years as Russian leader, the Associated Press reports, saying the Russian president “rolled to a crushing re-election victory Sunday.” Moscow thanked the UK for helping Putin win the landslide victory, writes the Financial Times.

China’s parliament is expected to name US-educated economist Yi Gang as the country’s new central bank chief, the Financial Times (paywall) reports. Yi, who has served as deputy governor of the People’s Bank of China under Zhou Xiaochuan, is the candidate of continuity and his appointment should ensure Beijing continues to move aggressively to control risk in its financial system.

Meanwhile, value investors are “set to reap benefits of steady emerging market growth,” the FT’s Steve Johnson writes. Earnings growth will be more muted across the EM board this year at 14% against a torrid 22% last year (which helped EM equities post their strongest showing last year since 2009), most analysts seem to believe. But UBS has revised its EM earnings growth estimate upward to nearly 19%, which would make “downtrodden value investors” the biggest winners. Already this year, the MSCI EM Value Index has risen 7.2%, outpacing its Growth equivalent, which has advanced a more muted 4.8%, Johnson writes. (Value stocks, he notes, are “typically defined as those with a low price-to-book or price-to-earnings multiple.) You can read the full story here.

What We’re Tracking This Week

It’s Fed week: The US Federal Reserve’s Federal Open Market Committee meets on Tuesday and Wednesday, its first under new Fed boss Jerome Powell, who will make a statement on Wednesday. Analysts see that a rate hike is in the cards.

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.

Enterprise+: Last Night’s Talk Shows

With the unveiling of the state IPO program and the Ismail cabinet signing off on next year’s budget, we finally have something to cut through the endless coverage of the elections. We have more in depth coverage of both of these topics in the Speed Round below.

First state IPO coming in two months? Finance Minister Amr El Garhy revealed that the first of the IPOs may be offered within a couple of months, in a phone in with Hona Al Asema’s Lamees Al Hadidi. Exact dates have yet to be determined. El Garhy also spoke on the good health of the companies slated to list as part of the program (watch, runtime: 8:18). He added that the stakes in individual companies, which will range from 15-30%, will depend on the financial outlook of each of the 23 companies listed to take part in the program. He estimates the stake offers to bring in USD 5-6 bn in the coming 24 months (watch, runtime: 7:55).

Oil Minister Tarek El Molla also phoned in to tell Lamees that the decision to list state oil firms came on the back of the “successes” in the oil sector during 2017, most notably the start of production on Zohr (watch, runtime: 8:18).

Kol Youm’s Amr Adib’s praised the move as something that would break the chains of the state bureaucracy holding these companies down. Adib demanded further clarification from the government as to where the proceeds would be allocated in the budget, how the companies would be managed and what the guarantees are for foreign investors (watch, runtime: 6:00). Has he not heard of Enterprise?

As for the newly approved FY2018-19 state budget, El Garhy tells Lamees that revenues in the budget have been set at EGP 980 bn with expenses exceeding EGP 1.4 tn, with a budget deficit running at 8.4% of the GDP (watch, runtime: 7:55). Deputy Finance Minister Mohamed Maait told Al Hayah Al Youm’s Khaled Abu Bakr that the government is targeting a GDP growth rate 5.8% (watch, runtime: 14:41).

The Ismail cabinet also approved legislation allowing the government to revoke Egyptian citizenship for those convicted of belonging to a terrorist group. On Masaa DMC, constitutional expert Salah Fawzy assured that the legislation was constitutional despite the controversy and debate around it. He said that in case a person becomes stateless after their Egyptian nationality is withdrawn, they will still have the right to remain in the country but will be deprived from their rights as citizens (watch, runtime: 8:43).

The rest of the night was all coverage from the polls abroad.

Speed Round

Speed Round is presented in association with

IPO WATCH- Gov’t unveils the lineup for the state IPO program: The Finance Ministry announced on the Sunday the official lineup of 23 state-owned companies which will IPO or list additional shares on the EGX. Ten of the companies in the program are already listed, noted a statement from the Ismail cabinet, so look in each of those cases at a sale through an accelerated book-building process as the most likely scenario.

For the most part, the state will offer for sale 15-30% of each of the companies, the Finance Ministry said in a statement. The cumulative value of the listings, which will take place over the coming 24-30 months, is expected to reach EGP 80 bn and would raise their collective market capitalization to EGP 450 bn, the ministry added.

Finance Minister Amr El Garhy said on Sunday that the first stake sale would take place within two to three months, without specifying which company, according to Reuters. It had been reported a number of times that state energy firm Enppi would be the pilot IPO of the program. As we noted earlier this month, the IPO of Banque du Caire — the first state bank to list — won’t take place before 4Q2018. The statement notes that the program has received the approval of President Abdel Fattah El Sisi.

Companies named on the list are:

  • Banking and Finance: Banque du Caire | Misr Insurance | Bank of Alexandria | Housing and Development Bank | E-Finance.
  • Oil and Gas: Enppi | Middle East Oil Refinery (MIDOR) | Alexandria Mineral Oils (AMOC) | Assiut Oil Refining Company (ASORC) | Egyptian Drilling Company.
  • Petrochemicals: Sidi Kerir Petrochemicals (Sidpec) | the Egyptian Ethylene and Derivatives Company (Ethydco) | Abu Qir Fertilizers | Egyptian Methanex Methanol Company (EMethanex) | Egyptian Linear Alkyl Benzene Company (ELAB) | El Wadi Phosphate Company.
  • Transportation and Logistics: Alex Container and Cargo Handling | Port Said Container & Cargo Handling | Damietta Container & Cargo Handling.
  • Industry: Egyptalum.
  • Real Estate: Heliopolis Housing & Development | Madinat Nasr Housing and Development (MNHD).
  • Consumer goods: Eastern Company.

The Ismail cabinet approved the state budget for FY2018-19, which targets GDP growth of 5.8%, up from 5.2% in the current fiscal year. The budget also targets a deficit of 8.4% of GDP, according to a statement from the cabinet. The goal is to bring Egypt’s finances to a primary budget surplus of 2% by FY2020-21, read a separate statement. The government aims to bring unemployment down to 10.4% and has an inflation target for the year of 13% — in line with those of the central bank.

The budget will see increased spending on social welfare and the ministers promised that spending on health and education would meet constitutional requirements. Neither statement mentions the extent of the energy subsidy cuts we should be seeing in FY2018-19.

More detail coming on 31 March: We expect a detailed breakdown of the budget to come when the Finance Ministry presents this to the House of Representatives, which minister El Garhy had said would happen on 31 March.

USD 2.55 bn in financing from China for new capital’s skyscraper district as PM breaks ground yesterday: Prime Minister Sherif Ismail broke ground yesterday on the new capital’s 1.71 mn sqm central business district, according to a Cabinet statement. The district will be developed by the China State Construction Engineering Company (CSEC), which will spend some USD 3 bn building a “skyscraper-studded portion of Egypt’s new capital.” CSEC had signed the contracts for the area’s development last October after a troubled and prolonged negotiation period.

Chinese banks are expected to finance 85% of CSEC’s work, while Egypt’s Housing Ministry will provide the remaining 15%, CSEC Egypt’s deputy general manager Zhao Qiang tells Bloomberg. Egypt will have “a grace period of 36 months to 42 months — until construction is completed — before repayment begins on the 10-year loan,” according to Assistant Housing Minister Khaled Abbas.

IPO WATCH- Sigma Capital is planning to list its shares on the EGX by the end of 2018 or early 2019, Chairman Ahmed Marwan tells Al Borsa. The firm is focused in the meantime on expansion, including the setup of a new private equity fund raise its assets under management to EGP 750 mn from EGP 450 mn currently. Marwan also said the firm is actively courting IPO mandates. Sigma is currently the sole coordinator and bookrunner on B Investments’ IPO.

M&A WATCH- MM Group signs LOI to acquire three more retail and distribution companies. MM for Industry and International Trade (MTI) announced yesterday in an EGX filing (pdf) that it has signed a letter of intent to acquire 100% of each of three subsidiaries of Alturki Holding including Itisalat International Egypt (i2), United Retail Company (URC), and DTR Trading. The transaction is still pending regulatory approval.

INVESTMENT WATCH- B Investments looks commit additional capital to SME finance outfit as part of EGP 1 bn investment program this year in 2018: B Investments is planning to raise its investment in SME finance firm Ibtikar for Investment Finance — a JV with MM Group — to EGP 500 mn from a current EGP 120 mn, said B Investments founding partner Alaa El Sabaa. He tells Al Mal that the move is part of EGP 1 bn the firm plans to deploy in 2018. As we noted yesterday, the firm plans to IPO Ibtikar some time in the next three years.

As for the B Investments IPO, it appears that the Endowments Ministry wants to get in on the action, with the Egyptian Endowments Authority looking to buy shares worth EGP 100 mn, authority head Ahmed Abdel Hafez tells Al Mal. The buy in is part of EGP 1 bn the ministry wants invest in the EGX this year, according to the newspaper. Shares in B Investments are due to start trading on 29 March.

INVESTMENT WATCH- UAE’s Julphar to establish USD 68 mn pharma plant in Egypt. Dubai-based Julphar Gulf Pharmaceutical Industries wants to build a USD 68 mn pharma factory in Badr City, CCO Saud Musabbah tells Al Borsa. The factory would primarily produce insulin, antibiotics, and blood pressure meds. Julphar has reportedly been waiting on the Health Ministry to register the factory to move ahead with the transaction.

INVESTMENT WATCH- SCZone expects investments in Ain Sokhna multi-use zone to reach USD 60 bn: The Suez Canal Economic Zone (SCZone) expects the first phase of the Ain Sokhna multi-use zone it is developing with DP World to reel in investments worth USD 60 bn, SCZone’s head of investments Tarek Hashem tells Al Mal. The partners expect to begin tendering land in the zone for industrial projects in one year, once infrastructure development is complete. The zone will focus on attracting projects in auto parts, building materials, electronics, medical equipment, petrochemicals, and textiles. DP World and the SCZone had signed contracts last month to start development work on the 30 sq km first phase of the zone, which will include industrial and residential areas. A delegation from DP World is currently in town to iron out the technical details of the zone’s development, according to Hashem.

Shipping lines alliance’s return to East Port Said Port not yet final: The alliance of five shipping lines that had stopped operations in East Port Said operations last year over fee hikes has yet to finalize its return to the port, Yang Ming Marine Transport’s Egypt shipping agent, Mohamed Moselhy, tells Al Mal. A delegation from the alliance — made up of Yang Ming, Hapag-Lloyd, K Line, Mitsui O.S.K. Lines, and the NYK Group — is expected to visit Egypt in April or May to continue talks on its return to the port, according to Moselhy. Suez Canal Authority chief Mohab Mamish had claimed in November that he and Transport Minister Hisham Arafat had convinced the shipping lines to return and that the fee increases were necessary. Moselhy later said that Mamish and Arafat had promised to repeal the decision to raise port fees.

CABINET WATCH- The Ismail Cabinet signed off yesterday on amendments to the law regulating inland water transport, according to a statement. The amendments would require motorboats to install GPS tracking devices. Infractions would result in imprisonment of no less than two years and a fine of no more than EGP 5,000. The ministers also approved the final draft of amendments to the Unified Building Code granting consultants and specialists registered with the General Organization for Physical Planning the legal authority to inspect construction projects. Cabinet had initially approved these amendments earlier this month.

Also approved yesterday:

  • Amendments to the Nationality Law allowing the government to revoke the citizenship of Egyptians proven to be part of a group that harms the state;
  • A USD 150 mn financing agreement with the African Development Bank to fund upgrades at the Abu Rawash sewage treatment facility;
  • A direct order agreement with Sanofi Aventis to import medication to treat children afflicted with Gaucher’s disease;
  • Two agreements signed with Belarus in 2016 on legal assistance and extradition.

LEGISLATION WATCH- The government is planning to pass the Social Welfare Act by the end of June and bring it into effect as of FY2018-19, Social Solidarity Minister Ghada Wali tells Al Borsa. The law would amend the social welfare and pensions systems, guarantee the right to unemployment benefits, and establish a new pension fund. According to Wali, her ministry has completed the actuarial studies for the legislation; a draft of the bill is now being reviewed by the International Labor Organization. The law will then require Cabinet approval before being referred to the Council of State (Maglis El Dawla) for review, and the House of Representatives for final sign-off.

New body will manage state pension funds: The ministry is working in the meantime on the structure of a new body that would be created under the law to manage state pension funds, according to Wali. Government sources had claimed that Cabinet already approved the act back in November.

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The Macro Picture

Why have IMF bailouts in Africa led to small improvements in credit-worthiness? In 2017, nine out of 21 Fitch-rated African sovereigns were under disbursing financial arrangements with the IMF. And while these programs have led to improvements in credit worthiness by bridging their financing gaps, these have been relatively few, according to the Financial Times. These come down to several factors, including the interventions often “crowding-in” other creditors and also serve to avert capital outflows by domestic agents, through the so-called “catalytic effect.” In some cases the size of IMF support can be revised upwards in response to specific shocks while the programme is still under implementation. In other cases, failure to meet the milestones of IMF programs has led to downgrades, such as with Mozambique in 2016. Under certain circumstances, IMF programs could also negatively affect perceived creditworthiness. This is typically the case if the fund requires a “bail-in” — if a sovereign debt is deemed unsustainable under the IMF’s debt sustainability analysis, the legal framework of the fund prevents it from providing financial assistance unless the issue is addressed. Addressing the question itself comes with its own problems of analysis. Pinpointing the extent of the IMF program’s influence on improved credit-worthiness is difficult, and the long term analysis is hard to gauge.

Spotlight

Wrap-up of AmCham’s Doorknock in Washington, DC

US trade delegation reportedly inbound after AmCham wraps 40th Doorknock in Washington, DC: AmCham wrapped up its fortieth annual Doorknock mission to Washington, DC, last week on what its leadership called a “high note,” with plans for a 50-company US trade delegation to make a return visit to Cairo in October.

“Everyone here commended the economic reform program and recognized the effort that was needed to make such difficult and bold decisions,” AmCham President Tarek Tawfik told reporters in Washington as the week came to an end. “There’s also a lot of appreciation to the military’s undertakings in the Sinai to combat terrorism and make the country more stable and secure.”

The delegation met with a ‘Who’s Who” of Washington, holding a total of 89 meetings between March 12 and 16, including 53 meetings meetings on the Hill: 33 of them with members of Congress, 15 with staffers, four with staff leadership, and one with the congressional research center. The group also held nine meetings with members of the executive branch, five meetings with international financial institutions, 16 with think tanks, and two meetings with influential figures, including the New York Times journalist Thomas Friedman.

Egypt’s (former?) ties to North Korea are among a basket of “thorny issues” that Tawfik says the two sides are working to address. “I don’t think North Korea will be as pressing an issue,” he suggests. We also need to better communicate our economic and other achievements in Washington and in Europe, Tawfik added, as the focus on the human rights and freedoms file remains very real.

Our warming ties with Israel are improving Cairo’s image in DC, with a USD 15 bn agreement to import natural gas from Israel and position Egypt as an energy export hub being key.

AmCham continues to push for a freetrade agreement with the US and the delegation made the point in Washington that Europe is pushing for a deeper, more comprehensive agreement that risks leaving US companies at a disadvantage. “We’re pushing on that front, and given Trump’s trade policy is not multilateral but bilateral … an FTA wasn’t on the agenda last year, but people are listening now.” You can catch the rest of our coverage of the AmCham wrap up here.

Egypt in the News

The international media’s coverage of Egypt’s presidential election continues with Reuters reporting that the Egyptian government is concerned with clamping down on fake news. In the US, Rep. Jim McGovern (Democrat of Massachusetts) says that there is bipartisan concern in Congress over events leading up to the election, Mohamed Elshinnawi reports for VOA. McGovern, who is the co-chairman of the Tom Lantos Human Rights Commission, said the concern is there despite Egypt being a close US strategic partner. Elshinnawi also spoke with a number of Egyptians residing in the US, some of whom said they are boycotting the elections.

Despite the international concern, Egyptians hope President Abdel Fattah El Sisi’s “inevitable victory will at least benefit the country’s ailing economy,” Heba Saleh writes for the Financial Times. “Despite a series of harsh reforms pushed through by the government, there have so far been no tangible improvements for the mns of families struggling to survive on low or modest incomes.” Businesses have also struggled but are optimistic that the reforms will eventually pay off and that “the worst is behind us,” Edita Chairman Hani Berzi tells Saleh. Also name-checked: Pharos Holding COO Angus Blair.

Growing ties with China: A newly-established animal feed factory of Chinese agribusiness player New Hope Group in Beheira “tells a good story” about the growing ties between Egypt and China, Mahmoud Fouly writes for Xinhua. The factory is New Hope’s third in Egypt and General Manager Wu Qianfeng says the company invested the equivalent of USD 15.8 mn in the project.

Also worth a skim this morning:

  • Egyptian censors prohibited the premiere of a revolution-centric play without the removal of several scenes, according to the AP’s Brian Rohan, who notes this is the second play to be targeted in the run-up to the elections.
  • The Religious Endowments Authority is sponsoring Sufi celebrations and seminars in hopes of countering Salafism and extremism, Al Monitor says.

On Deadline

Reports of good turnout among Egyptian expatriates is a positive sign that Egyptians are not suffering from another bout of political passivity, particularly since President Abdel Fattah El Sisi’s win is a foregone conclusion, Emad El Din Hussein writes for Al Shorouk. The turnout abroad is also a good omen for the vote that will take place here in Egypt at the end of the month, says El Watan’s Emad El Din Adib. Meanwhile, Al Borsa’s Ibrahim Mostafa declares that El Sisi’s reelection will bode well for economic development, since it will send a clear message to investors that stability is the name of the game for Egypt.

Worth Reading

When Qatar’s meddling backfires, and ethnic cleansing is the result: Here in Egypt, we are no strangers to the direct and oversized political machinations of the statelet known as Qatar. Much of the instability in neighboring Libya can be laid on Doha’s doorstep. But the New York Times’ in depth report on an ethnic cleansing operation in Syria, masterminded by Iran, may be one of the most horrific episodes in Qatar’s history of regional interference. And it all starts with a group of hapless Qatari royals, arrogant enough to go hunting in the deserts of war torn Iraq. Of course, they were kidnapped by Iranian-backed Shiite militias, then used as pawns to pressure Qatar to use its influence to stage a “population swap” in Syria. It involved the forceful population exchange between four villages caught up in sieges by various sides in the war. Not the mention the funds that went into the pockets of armed militias, which could have run into USD 1 bn, to secure the royals’ release.

Diplomacy + Foreign Trade

Egypt, UN sign USD 1.2 bn 2018-2022 Partnership Development Framework Agreement: UN Resident Coordinator in Egypt Richard Dictus and Investment and International Cooperation Minister Sahar Nasr signed yesterday the USD 1.2 bn 2018-2022 Partnership Development Framework Agreement, according to a ministry statement. The agreement focuses on supporting inclusive economic development, social justice, women’s empowerment, and the sustainable use of natural resources. The funding will be geared towards creating an environment conducive to economic growth and development through job creation, increasing women and youth’s access to employment, reducing population growth rates, and improving public services.

A Chinese business delegation is visiting Egypt next month to discuss investment opportunities in textile industries, Chinese Ambassador to Egypt Song Aiguo tells Al Borsa. The visit comes a few months after the Industrial Development Authority (IDA) and Egyptian-Chinese company Sino-Egypt Minkai agreed to set up a USD 2 bn textile industrial complex over 3.1 mn sqm in Sadat City. The complex, which will eventually include 568 factories, will see the completion of phase one within three years, with the Chinese partners covering 60% of the investment value.

President Abdel Fattah El Sisi and Foreign Minister Sameh Shoukry met with Emirati Foreign Minister Abdullah bin Zayed Al Nahyan, according to an Ittihadiya statement. 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 and bolster investment in renewable energy, electricity, and water resources.

President El Sisi also discussed increasing cooperation with Cypriot President Nicos Anastasiades in a phone call yesterday, according to an Ittihadiya statement. The two presidents also touched on trilateral relations between Egypt, Cyprus, and Greece.

Energy

EPROM receives two offers to operate, maintain oil fields in Iraq, Kuwait

Egyptian Projects Operation and Maintenance company (EPROM) has received an offer to operate Iraq’s Siba natural gas field in partnership with the Egyptian Maintenance Company (EMC), according to Ahram Gate. EPROM has also received another offer to operate and maintain water processing units at Kuwait’s Al Zour oil field, CEO Amgad El Ahmady has said, without disclosing further details.

Agiba’s cumulative production reaches 500 mmbbl

Eni JV Agiba’s cumulative production has reached 500 mmbbl, the Italian oil company announced on Thursday, according to Oil Review Middle East. “The 37-year-old venture has seen a recent boost in production through discoveries in the western desert of Egypt, such as the Rosa North, Emry Deep and Meleiha West Deep.”

El Molla meets with PowerChina, Methanex to discuss expansion in Egypt

Oil Minister Tarek El Molla has met with the heads of PowerChina and Methanex to discuss investment opportunities in Egypt, Al Masry Al Youm reports. The Chairman of PowerChina expressed interest in expanding into Egypt as it turns into a regional energy hub. Senior Vice President of Canada’s Methanex Corporation Brad Boyd reportedly talked up plans to expand the company’s activities in the country by boosting the current production capacity of methanol, which stands at 1.3 mn tonnes.

Infrastructure

Energy Recovery to implement USD 4 mn worth of desalination projects in Egypt

Energy Recovery was awarded a USD 4 mn contract for pressure exchangers for multiple desalination facilities in Egypt, the company announced. The desalination plants will produce up to 160,000 cubic meters of water per day. “We have and will continue to target Egypt as a strategic territory for Energy Recovery. The country was one of the earliest adopters of our industry-leading PX Pressure Exchanger technology with our first units in the country deployed approximately 15 years ago. Our innovative solutions put us in an excellent position to leverage Egypt’s planned growth in desalination,” Energy Recovery VP Rodney Clemente says.

EGP 80 bn needed to develop East Port Said Port, according to El Sisi

Development projects in the East Port Said Port require EGP 80 bn to complete, President Abdel Fattah El Sisi said yesterday, Al Mal reports. The projects include establishing logistics, industrial, and residential areas and are aimed to serve the Suez Canal Economic Zone (SCZone), according to SCZone chief Mohab Mamish.

Tourism

Tourist arrival numbers showing a rebound -TRT World

Egypt tourist arrival numbers are showing a rebound after the slide that began in 2011, Joseph Hayat reports for TRT World. The rebound, despite being slow, is welcome news for tour operators, but Sharm El Sheikh’s recovery continues to lag behind other destinations. The number of visitors from emerging markets is increasing and traditional markets such a Russia are making a comeback, Hayat says. More than four-fifths of the tickets of Aeroflot’s inaugural flight to Cairo, following its long hiatus, sold out within 48 hours, he notes (watch, runtime 02:31).

Hilton to add nine new hotels in Egypt within five years

Hilton Worldwide is planning to expand in Egypt with 2,390 rooms in nine new hotels within five years, Hilton’s Vice President of Development for MENA and Turkey Carlos Khneisser tells Al Borsa. The company will focus on opening more new hotels outside Cairo, with new locations including Port Said, Ain Sokhna, and New Damietta. Hilton recently signed a contract with Mangroovy for Real Estate & Tourism Investment to manage a new hotel in El Gouna’s Mangroovy resort.

Automotive + Transportation

Transport Ministry to select best offer for 1,300 locomotives by month’s end

The Transport Ministry is reportedly planning to select the best offer for the supply of 1,300 locomotives as early as the end of the month, unidentified sources tell Al Mal. The ministry is currently reviewing seven offers from Chinese, Indian, Italian, Romanian, and Austrian companies, in addition to a German-Hungarian consortium. Transport Minister Hisham Arafa had said earlier this month that the ministry would select the winning offer by June’s end. The locomotives, which will be used to upgrade the Egyptian National Railways’ fleet, are expected to cost around EGP 18-19 bn. Separately, the ministry plans to begin operating the 81 locomotives General Electric is refurbishing before year’s end.

Other Business News of Note

EgyptAir Cargo to cut Russia flights over drop in agricultural exports

EgyptAir Cargo will cut its twice-weekly flights to Russia by half due to a drop in agricultural exports, Chairman Bassem Gohar tells Al Mal. The company resumed cargo flights to the Russian capital in November for the first time since the 2015 Metrojet plane crash.

Egypt Politics + Economics

Former Culture Minister Farouk Hosny acquitted in illicit gains case

The Court of Cassation has acquitted Mubarak-era Culture Minister Farouk Hosny of corruption charges, Al Mal reports. Hosny stood trial for allegedly misappropriating EGP 9.8 mn during his tenure from 1987 to 2011. He was acquitted in 2013 but stood retrial following an appeal by the prosecution.

On Your Way Out

If you’re a Zamalkawy, the silver lining of exiting the Confed Cup was the exit of Mortada: Zamalek was kicked out of the CAF Confederation Cup round of 32 after losing 4-3 on penalties to Ethiopia’s Wolaitta Dicha, Ahram Online reports. The sting of the loss was only mitigated by reports that Mortada Mansour announced he is resigning as Chairman of the club, according to Al Shorouk.

Squash champion Ramy Ashour won the 2018 Grasshopper Cup yesterday after beating compatriot Mohamed ElShorbagy in the final match, according to the Professional Squash Association. The win “underlines a return to full fitness for Ashour following a torrid two-year spell that has seen him withdraw from seven events” due to injuries.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.5692 | Sell 17.6689
EGP / USD at CIB:
Buy 17.55 | Sell 17.65
EGP / USD at NBE: Buy 17.55 | Sell 17.65

EGX30 (Sunday): 17,271 (+1.6%)
Turnover: EGP 2.1 bn (82% ABOVE the 90-day average)
EGX 30 year-to-date: +15.0%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 1.6%. CIB, the index heaviest constituent ended up 2.2%. EGX30’s top performing constituents were Qalaa Holdings up 8.5%, Egyptian Resorts up 6.3%, and Orascom Telecom Media & Technology up 5.8%. Yesterday’s worst performing stocks ACC down 2.9%, Global Telecom down 2.0%, and GB Auto down 1.0%. The market turnover was EGP 2.1 bn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +108.9 mn
Regional: Net Short | EGP -193.0 mn
Domestic: Net Long | EGP +84.1 mn

Retail: 64.7% of total trades | 63.1% of buyers | 66.2% of sellers
Institutions: 35.3% of total trades | 36.9% of buyers | 33.8% of sellers

Foreign: 15.5% of total | 18.1% of buyers | 12.8% of sellers
Regional: 19.1% of total | 14.4% of buyers | 23.7% of sellers
Domestic: 65.5% of total | 67.5% of buyers | 63.4% of sellers

WTI: USD 62.00 (-0.55%)
Brent: USD 65.85 (-0.54%)

Natural Gas (Nymex, futures prices) USD 2.69 MMBtu, (+0.00%, April 2018 contract)
Gold: USD 1,311.30 / troy ounce (-0.08%)

TASI: 7,728.06 (-0.21%) (YTD: +6.94%)
ADX: 4,533.11 (-0.21%) (YTD: +3.06%)
DFM: 3,192.78 (-0.14%) (YTD: -5.26%)
KSE Weighted Index: 413.20 (+0.27%) (YTD: +2.93%)
QE: 8,802.80 (-0.51%) (YTD: +3.28%)
MSM: 4,892.98 (-0.08%) (YTD: -4.05%)
BB: 1,352.49 (-0.22%) (YTD: +1.56%)

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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).

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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