Tuesday, 27 March 2018

The “Enron of Egypt” looks to clean up its act

TL;DR

What We’re Tracking Today

An interest rate cut by the central bank’s Monetary Policy Committee on Thursday will not spell the end of the carry trade, EFG Hermes Research believes. The investment bank says foreign purchases of Egyptian treasury bills will see an “effective” decline in the event the CBE reduces interest rates, EFG Hermes Research head Ahmed Shams El Din said in a statement to MENA news agency, but sees foreign appetite staying strong.

Research houses are unanimous in saying that the CBE will cut rates again with its Monetary Policy Committee meets this coming Thursday, predicting drops ranging from 50-200 bps. We would not be surprised to see the CBE go for a 50 bps rate cut, sending the right signal, but holding a steeper cut until after it gauges the inflationary impact of subsidy cuts expected in July. But what do we know — we’re guessing like everyone else. Pharos Research sees a 100 bps rate cut, the firm said in a research note (pdf) that we noted earlier this week, and CI Capital also sees a 100 bps dip in the cards this week as inflation continues to ease. HC Securities is also expecting a similar rate cut. “Although we anticipate energy prices will increase in July, resulting in a one-off inflation hike, we do not see this as a reason to halt monetary easing efforts at the current stage as, according to our numbers, it would not disrupt the CBE’s 4Q18 inflation target,” HC’s Chief Economist Sarah Saada told us in an email yesterday, stressing the importance of of a rate cut to sustainable growth and investment.

Voting in the 2018 presidential election kicked off yesterday. Voters across the nation cast their ballots under heavy security. Over 11,000 polling stations nationwide will again be open 9:00am to 9:00pm today and tomorrow.

President Abdel Fattah El Sisi cast his ballot in Heliopolis. Prime Minister Sherif Ismail also voted yesterday and nudged Egyptians to head to the polls, according to a Cabinet statement. The prime minister took the opportunity to tell reporters that citizens have to vote if they want to see the country continue to develop, Al Mal reports.

The government wants you to vote, but don’t expect to get a day off work: Cabinet spokesman Ashraf Sultan denied yesterday that state employees will get a holiday today or tomorrow to be able to vote, since they can do so before or after working hours, Al Masry Al Youm reports. Meanwhile, the National Elections Commission said yesterday it hopes the voter turnout will increase during the second and third day of balloting, Ahram Online reports.

Elsewhere this morning: Saudi Aramco CEO Amin Nasser defiantly defended the prospect of an international IPO for the company, insisting the oil giant will be ready for a listing in 2H2018. His statement come despite skepticism from investors and reports of insiders questioning the seriousness if the listing. “There’s a lot of work that is still ongoing, the IPO is ongoing,” Nasser told Bloomberg TV in an interview in New York.

More than 100 Russian diplomats have been ordered to leave the US, Canada, and EU countries in response to Moscow’s alleged involvement in a chemical weapons attack on a former Russian spy in the UK earlier this month, Bloomberg reports. The US alone expelled 60 diplomats, marking the largest expulsion in US history. US Press Secretary Sarah Huckabee Sanders described the attack as “the latest in [Russia’s] ongoing pattern of destabilizing activities around the world.”

What We’re Tracking This Week

The Ismail Cabinet will present its draft FY2018-19 budget to President Abdel Fattah El Sisi this week for approval before shipping it to the House of Representatives at the end of the month, Finance Minister Amr El Garhy told Al Masry Al Youm on Saturday.

Pharos Holdings will be holding a two-day investor conference headlined In Search of Egypt Alpha on 2-3 April. The event, set to be attended by a number of senior government officials, is expected to host around 40 companies a range of industries to help explore the long-term prospects for investment in the EGX, Chairman and CEO Elwy Teymour said in a statement (pdf). “In Search for Egypt Alpha Conference aims to support the companies whose stories are not generally visible or known to the market,” said COO Angus Blair. The opening day will see panel discussions on the energy and petrochemicals sectors in light of Egypt’s emergence as an energy hub, while the second day will see meetings between fund managers and corporate representatives.

Enterprise+: Last Night’s Talk Shows

The talking heads were scrambling last night to assess voter turnout during the first day of the presidential election, leaving no room for any other topics on the airwaves.

Although none had exact figures, most talk show hosts described turnout as “reasonable” or “average.” Cabinet spokesman Ashraf Sultan told Yahduth fi Masr’s Sherif Amer that initial numbers give reason to be optimistic about how the elections are faring (watch, runtime: 3:00). National Elections Authority spokesman Mahmoud Al Sherif was slightly more conservative, describing turnout as “satisfactory” (watch, runtime: 5:47). He urged citizens to continue heading to the polls, which saw the highest number of voters in Cairo on the first day (watch, runtime: 22:52). Mubarak-era prime minister Kamal El Ganzoury also called on everyone to go out and vote (watch, runtime: 3:47).

Deputy Parliamentary Speaker Soliman Wahdan guesstimated that 14% of voters headed to the polls yesterday, telling Masaa DMC’s Eman El Hosary that his crystal ball suggests that 25 mn out of 59 mn eligible voters will participate in the elections by the end of Wednesday (watch, runtime: 8:58). Judge Al Sayed Hamed told Al Hayah Al Youm’s Khaled Abu Bakr that Alexandrians are doing “okay” in terms of turnout (watch, runtime: 5:51). State Lawsuits Authority Club head Ahmed Khalifa forecasted total turnout to hover at 10-15%, noting that the global average rate rarely exceeds 20-30% (watch, runtime: 2:29). Kol Youm’s Amr Adib also kept his cool while discussing the topic, reminding his viewers that neither the presence nor lack of long queues at polling stations is an indicator of how many people cast their votes (watch, runtime: 3:57).

Hona Al Asema’s Lamees Al Hadidi was particularly impressed by the number of voters in North Sinai’s Sheikh Zuweid (watch, runtime: 5:42), while National Council for Women head Maya Morsi was beaming with pride over women’s participation across the country (watch, runtime: 4:01).

Overall, the first day of voting went smoothly. Administrative Prosecution Club spokesman Ahmed Galal reported to Hona Al Asema that the club did not receive any complaints on the electoral process, despite judges supervising polling stations taking a one-hour break in the middle of the day (watch, runtime: 2:35). Media coverage was also smooth and no journalists filed grievances, according to Journalists Syndicate President Abdel Mohsen Salama (watch, runtime: 2:44).

Some observers reported a handful of legal violations during the vote. A member of Tunisian association Atide, which specializes in ensuring the integrity and democracy of elections, said she witnessed violations in Fayoum, including breaking the electoral silence and a lack of privacy while voters were casting their ballots in some polling stations. She attributed these violations to Egypt’s nascent democratic experience (watch, runtime: 3:18). Head of Greece-based EKO, Kitty Panourgia, also voiced concerns about a lack of privacy at some booths (watch, runtime: 4:54).

Speed Round

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IPO WATCH- CIHC to sell only 4% of Eastern Tobacco, will keep a controlling stake: The Chemical Industries Holding Company (CIHC) is planning to sell only 4% of its stake in the Eastern Tobacco Company under the state’s IPO program and retain a controlling 51% stake, CIHC Chairman Emad El Din Mostafa said yesterday. 45% of Eastern Tobacco’s shares are already in free float, but the company was placed last week on the official lineup of 23 state-owned companies that will IPO or list additional shares on the EGX under phase one of the program. Mostafa provided no details on timeline for what will likely be an accelerated book build to pair-down CIHC’s stake. He said, however, that the CIHC would use the proceeds from the transaction to fund new investment at some of its subsidiaries.

Background: Finance Minister Amr El Garhy had said on Saturday that the government was meeting with investment banks to decide the first of the 23 state companies slated to sell stakes. He had also said last week that the government would make a decision by September or October and was planning to offer shares of as many as 4-6 companies in 2018. Enppi had largely been expected to be the first IPO the program while Banque du Caire was expected to be the first of the banks to list.

IPO WATCH- Electricity Ministry to postpone IPO of three companies operating Siemens plant until after full subsidy elimination in FY2020-21: The Electricity Ministry is reportedly pushing plans to IPO the three companies that will operate Siemens-built power plants until the state fully eliminates subsidies for electricity, an unnamed source from the ministry tells Al Mal.

Background: We had said in December that the Egyptian Electricity Holding Company (EEHC) was in the process of establishing three companies to manage the combined cycle plants in Burullus, Beni Suef and the new capital, and was planning to list all three on the EGX once the three plants were up and running before the end of 2018. The source attributed the delay in the timeline to the ministry’s inability to conduct a fair valuation and assessment of its assets while still subsidizing power.

Delayed phase-out of electricity subsidies: The Electricity Ministry had decided last month to postpone the full elimination of power subsidies to FY2020-21 from FY2019-20 but said to expect prices to go up in July across all consumption tiers.

The “Enron of Egypt” sets out to clean up its act. Arabia Investments (AIND) posted a normalized net profit after tax and minority of EGP 14.9 mn in 2017, the company said in a disclosure yesterday (pdf).

Why is AIND emphasizing normalized results? After coming in to find their auditor referred to the company as the “Enron of Egypt” and had offered a “heavily qualified opinion,” a new lead shareholder and new management team took the bullet and recognized a previously unrealized foreign exchange loss of EGP 387 mn from CDCM, its automotive business, in FY2016 and re-stated its financials for that year. The normalized figures set aside most of that as well as EGP 195.4 mn in non-cash impairments the company has booked for FY2017. Its statutory financials show a net loss after minority interest of EGP 189 mn for the year ending 31 December 2017.

What’s this “Enron” stuff about, anyway? Arabia is trying hard to clean up its act under new chairman and lead shareholder Gamal Abdel Fattah after what a new management team is positioning as years of mismanagement. That “Enron of Egypt” line? It’s a direct quote from Rania Afifi, AIND’s Chief Investment Officer, who admits that’s how the company’s auditor positions the outfit when he teaches it as a case study in business school. “When we came in, there was one negative surprise after another. Every time we looked at a new holding … let’s just say there are just five companies that matter, around which we can build a turnaround story,” she told us yesterday.

The car business is a sideshow for now. According to Afifi: “There could be value in CDCM,” which recently lost the rights to Peugeot in Egypt to the Mansour group after a decades-long run, “but there were so many negative surprises there that we fully impaired the goodwill of the business. It’s upside: If the auto division were to enter into a partnership with a new global brand, that’s upside for shareholders. We have huge legacy issues and we’re addressing each and every one of them. We are transparent and we’re going to remain open to shareholders and the market as we focus on creating value at some very healthy assets.”

So, what does AIND do? “We’re an investment holding company, and we have some very good assets in both non-bank financial services and construction and building materials,” says Afifi, a former director of investment banking at Beltone, where she had a 12-year run. Afifi (bio here in pdf) started her career at EFG Hermes on the institutional sales side of the business before moving over to investment banking. “We’re in the midst of a radical cleanup on the financial and operational sides and have found we have two very strong verticals in building materials and non-bank financial services. We’re not turning our back on automotive, but we won’t invest more capital unless it makes sense on an opportunity-cost basis.”

Who’s on board? The board (members and bios here in pdf) is led by Gamal Abdel Fattah, an Egyptian with a long track record in construction and real estate in the UAE, who began building a position in AIND in 1Q2017 and brought in a new board last May. The company is led by CEO Hazem Zifzaf, who joined in June 2017, having earlier risen through the ranks at Pepsi to handle all of Latin America for the global FMCG giant. He also served at Lafarge Holcim as a senior exec.

In related news, AIND’s CDCM is seeking a EUR 150 mn compensation from Peugeot-Citroen for terminating its representation contract, Youm7 reports. AIND had announced in November that it had formally started legal proceedings against the French car maker after an unexpected end to their 41-year-old partnership. Peugeot-Citroen chose a consortium of Mansour Group and Dubai-based Scope Investment to be its licensed distributor of Peugeot vehicles in Egypt. CDCM is said to now be looking to replace Peugeot with a Chinese brand and could be kicking tires at Bisu Auto or GAC Motors, according to the domestic press.

Kayan Egypt could begin assembling SEAT cars locally by 2020, CEO Karim El Naggar tells Al Mal. The company has recently reached an agreement with the Spanish automaker and is in “serious negotiations” to see SEAT models assembled by Bavarian Auto, Arab American Vehicles Co., and Egyptian German Automotives, El Naggar said adding that he expects local assembly to drive SEAT car prices down by 25-30%. El Naggar had said last year that the decision to assemble SEAT locally depends entirely on the issuance of the Automotive Directive. The bill — which will offer incentives to encourage the local auto industry to move further up the value chain into manufacturing — has had European car makers, including Renault and Volkswagen, shopping for potential industrial opportunities in Egypt at the same time as they pressure their lobbyists to have the Egyptian government kill the bill. Kayan has, meanwhile, won distribution rights for SEAT in Libya and Sudan.

M&A WATCH- Elaj Group continues healthcare acquisition spree: Saudi Arabia’s Elaj Group has acquired a majority stake in Cairo Clinic Children’s Hospital in transaction worth EGP 9 mn, sources close to the matter tell Al Mal. The EGP 60 mn hospital remains stalled in the construction stage after running into financing challenges, the sources suggest. Under the agreement, Elaj will provide the majority of the financing for the hospital and will issue tenders to complete the construction and finishing. The facility is slated to open at the beginning of next year. The Saudi group has already acquired Alexandria International Hospital and Ibn Sina Specialized Hospital and picked up stakes including 74% of clinical laboratory group Cairo Labs and a 15% stake in the International Eye Hospital.

Palm Hills Development (PHD) denies claims by Al Shorouk this week that the developer offered to acquire Qatari Diar’s Egyptian investments, the company said in a statement carried by Al Mal. A news story on Sunday said that PHD Chairman Yassin Mansour had made an offer for Diar’s New Cairo City Gate development, which has been the subject of an ongoing legal dispute with the New and Urban Communities Authority (NUCA). The sources also claimed that businessman Naguib Sawiris had made Diar a EGP 35 bn offer to acquire all of its local assets and that a state-owned company had also expressed interest.

UK MPs are calling on the May gov’t to end its ban on flights into Sharm (again): UK MPs have reportedly gotten fed up with their government maintaining its flight ban on Sharm El Sheikh airport, with 35 MPs signing an ‘early day motion’ calling for a new parliamentary debate on why the UK is one of the last countries in Europe to lift travel restrictions to Sharm. “The ban on UK flights to Sharm El Sheikh has long outlived its usefulness,” Labour MP Stephen Timms, the chairman of the All Party Parliamentary Group on Egypt, told DIVE Magazine. “Security at the airport has been greatly improved. Other countries have lifted their bans; we should do so too. Leaving the ban in place causes great inconvenience to many in the UK and serious problems for the Egyptian economy,” he added. The move is the latest in a series of bids by other UK MPs to convince the government that Egypt has sufficiently increased security measures at its airports. Timms had pushed the issue last year, while MP Sir Gerald Howarth recommended the lifting of the ban after the traveling to the resort three times. You know who was listening? The Germans, who lifted their ban shortly afterwards.

The Finance Ministry is planning to issue EUR 1-1.5 bn in eurobonds on the Luxembourg stock exchange in three-weeks’ time, sources close to the matter said. The eurobonds will have tenures of seven, 12, 15, and 30 years, they added. Officials are mulling whether to take the offering north of EUR 2 bn and will make a final decision based on feedback from the first roadshow. The government had tapped BNP Paribas, Deutsche Bank, Standard Chartered, and Intesa Sanpaolo to manage the issuance. Zaki Hashem & Partners and Linklater are legal advisors to the investment banks, while Al Tamimi & Co. and Dechert were chosen as legal advisors to the government for the transaction, which will be Egypt’s first-ever EUR-denominated bond sale. The sale comes after the government concluded a USD 4 bn eurobond offering in February.

Our broken wheat policy may cost us an extra EGP 1.4 bn this year: Egypt’s General Authority for Supply Commodities (GASC), the world’s largest wheat buyer. might be paying an extra EGP 1.4 bn on wheat imports this year as a result of “cumbersome import requirements,” according to a US Department of Agriculture report (pdf). At issue are regulations imposed by the Central Administration for Plant Quarantine (CAPQ) that require wheat shipments to be sieved upon arrival at Egypt’s port at USD 3 per tonne. “Sieving is a practice done normally as part of the milling process, meaning that Egyptian authorities are mandating and charging for a process that would be carried out by processors regardless.” This practice is particularly strange considering the government had rescinded its zero-ergot policy, but the CAPQ insists on sieving wheat shipments to remove foreign material including the fungus. The sieving process also takes time, which drives up demurrage fees — the tariff charged to suppliers for vessels sitting at ports past the contracted period.

Traders are (shocker) adding these additional costs to their offers in GASC’s wheat tenders, which means the government ends up footing the bill. These increased costs are evident in the prices GASC ends up paying for shipments: Between October 2017 and February 2018, the state grain buyer paid around USD 10.26 (EGP 182.63) more per metric tonne than the global average. “This indicates that importers or traders are adding an additional risk premium to offset the high risk of doing business in the Egyptian market,” the report says.

LEGISLATION WATCH- Uber and Careem are drafting a list of their grievances with the Ride-Hailing Apps Act in the hope of winning amendments before the bill becomes law, officials from the companies said. The two objecting to a stipulation that would require them to ensure that half of their fleets are made up of white taxis. Careem experimented with using white cabs last year, but said quality of service was a challenge, Careem representative Hassan Aboul Seoud said. The companies are suggesting instead that they build and run separate apps that would exclusively employ white taxis.

Another sticking point: The requirement that the companies open user data to the government and store that data in Egypt, which the companies say would negatively impact users’ privacy.

The proposed bill would require drivers to own the cars they operate, whereas around 65% of Uber and Careem drivers use cars that are not theirs, MP Mohamed Badawi Dessouky said, according to Al Shorouk. Some are concerned that the apps will see a mass exodus of drivers if that stipulation remains unchanged.

The House of Representatives’ Transportation Committee is currently reviewing the bill and has pushed it to the top of its agenda, as we noted earlier this week. The committee expects to hear from the interior, transport, ICT, and finance ministries on the bill and will be holding hearings with representatives from ride-sharing companies themselves, according to Dessouky.

In news from the global ride-sharing industry: Uber appears to have ended its rivalry with Malaysia’s Grab earlier this week by selling it its business in South East Asia in exchange for 27.5% of Grab and a board seat. The move represents the latest shift in the global ride-hailing app space, which sees Uber retrenching after a bitter global expansion, according to the Financial Times.

EARNINGS WATCH- Arabian Cement Company’s net profit after tax dipped to EGP 215.61 mn in 2017 from EGP 245.02 mn the previous year, according to a company release (pdf). The company’s consolidated top line climbed to EGP 2.64 bn from EGP 2.35 bn in 2016.

Gov’t looks into making e-visas to Egypt available to all countries: Prime Minister Sherif Ismail discussed expanding Egypt’s e-visa system to make it more widely available during a meeting yesterday with the ICT, planning, and civil aviation ministers, according to a Cabinet statement. The government had officially launched electronic visa services for 41 countries at the end of last year.

MOVES- Former EgyptAir VP Mohamed Moneir has un-retired to chair Egyptian charter airline Air Leisure, Arabian Aerospace reports. The newly company is focused mainly on Asia, since it is “not so sensitive to the Middle East’s geopolitical problems and so did not suffer from sudden dips in tourist traffic.” The carrier operates routes to 10 Chinese cities.

Abraaj considers selling stake in fund management spin-off as regulator swirls: Dubai-based emerging markets PE giant Abraaj Group is considering the sale of a stake in its recently-spun off fund management business Abraaj Investment Management Limited (AIML), people with knowledge of the matter tell Bloomberg. Abraaj has reportedly already begun holding meetings with advisers about the sale. The move comes as the Dubai Financial Services Authority is reportedly holding talks with some of the firm’s investors over concerns of allegations of misuse of funds in the Abraaj Growth Markets Health Fund. The allegations, which first emerged back in February, have since led the firm to spin off AIML and come at the same time as a number of top executives are reportedly looking to leave the firm.

IFC, Attijariwafa sign agreement to boost African trade and investment, support small businesses: The International Finance Corporation and Morocco’s Attijariwafa Bank announced yesterday (pdf) they signed an agreement that will see them “jointly explore potential investments in both North and Sub-Saharan Africa,” focusing primarily on improving the flow of trade and investment across the continent, and providing businesses with assistance on “corporate and investment banking, project finance … and risk-sharing trade instruments.”

BRIEFLY NOTED- Alliance Law Firm defeated Zulficar & Partners in the final match of the legal community’s annual football tournament, which brought together 16 teams from 14 of the country’s top law firms. Our friends at Zulficar tell us they take pride in having knocked Zaki Hashem & Partners out of the semi-finals, taking revenge for having lost to them in last year’s final.

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Image of the Day

Saving Egyptian history, one handicraft at a time: Over 1,000 artisans in Cairo’s 14th-century Darb El Ahmar district are hoping to salvage what remains of the art and trade passed down from their ancestors, from jewelry- and shoe-making, to carpentry, bookbinding, and glass-blowing, Abdi Latif Dahir writes for Quartz Africa.

Egypt in the News

The elections continued to dominate international headlines on Egypt. The global media’s coverage of Egypt this morning was split between the election results being a foregone conclusion and monitoring measures taken to ensure a high turnout.

The Associated Press’ Maggie Michael says the polls open with President Abdel Fattah El Sisi a certain winner and that the authorities hope enough people will cast their ballots. The Washington Post and LA Times echo similar thoughts, while the AP separately notes that the vote is overshadowed by the “missing contenders,” and the FT describes the election as “a depressing spectacle.” Vox’s Alexia Underwood says that while Sisi will win, he needs to worry about the “rumblings of dissent” in Egypt. Meanwhile, the as-ever irrelevant Robert Fisk says in the Independent that El Sisi is set to win partly on the back of the Christian vote while expecting him to garner 93.73-97.37% of the vote.

Turnout is still the name of the game and will continue until the results are announced. The polls opened yesterday amid concerns over voter apathy, The Guardian’s Ruth Michaelson writes. “But amid concern that the personality campaign that inspired ‘Sisi-mania’ before the 2014 election is likely to be met with widespread voter apathy this time, the government has mounted a fierce campaign in an attempt to boost numbers at the polls. Turnout is seen as the only issue that will be in doubt in this election.” The Wall Street Journal is noting how regional governors are promising better services, from playgrounds to new sewage systems, if residents come out to vote. The governors of Beheira, El Wadi El Gedid, and Menoufia have all reportedly promised to do a better job if voters turned up. Bloomberg is reporting on the juice and meals offered to voters at polling stations.

Human rights are front and center: Euronews takes a look at what Sisi has “done with his first four years in office,” but DW takes a sharper stance, quoting Mainz University Professor Guenter Meyer saying El Sisi “is on the side of the autocratic rulers in the Arab world.” Similarly, the Atlantic is also noting the times which Egyptian authorities have prosecuted artists. Reuters reports that North Sinai residents have been too afraid to leave their homes to vote as a result of the ongoing military campaign.

Among the handful of non-election stories making headlines:

  • Bus transport service platform Swvl is using ride-hailing tech to help solve Egypt’s transportation issues, Forbes Middle East says.
  • Egypt and Israel have had a “cold peace” since the signing of a US-mediated peace treaty in 1979, says the Hill.
  • Renowned jeweller Azza Fahmy has opened a store in London as part of global expansion efforts, the Telegraph reports.
  • Egypt-born Anne Aly, the first Muslim woman elected to Australia’s federal parliament, talks to VOA Newsabout the way racism and domestic violence shaped her career.
  • Tough economic conditions are forcing Egyptians to “find work wherever they can” but many struggle to secure employment, according to TRTWorld.

On Deadline

The nation’s columnists are not at all happy with how the Uber/Careem vs. White taxis beef is playing out. It’s beyond comprehension how white taxis are coming out on top in the drama unfolding over the legal status of ride-hailing apps such as Uber and Careem, Abdel Nasser Salama writes for Al Masry Al Youm. White cabs have long provided subpar service and are being outperformed by the private companies, Salama says. Meanwhile, Ahram Gate’s Gamal Nafea lays the blame squarely at the government’s feet for allowing the situation to continue escalating until it reached boiling point, rather than having the foresight to realize that creating a legal framework for Uber and Careem was inevitable.

Diplomacy + Foreign Trade

An Egyptian becomes the first civilian casualty of a Houthi attack on Riyadh: The Foreign Ministry condemned yesterday a Houthi missile attack on Riyadh that killed an Egyptian resident of the city and injured two others on Sunday, according to a ministry statement. A spokesperson for the Saudi-led coalition had said that Saudi air defense intercepted seven missiles from Yemen, three of which were headed towards Riyadh. Bloomberg also has coverage.

Trade relations with Turkey improved last year despite sour political ties, Menna A. Farouk writes for Al Monitor. Our exports to Ankara jumped 38.5% y-o-y in 2017, while our imports dropped 13.7% y-o-y.

Israel has issued a level-three travel warning for a number of countries yesterday, including Egypt, the UAE, Bahrain, Jordan, Kuwait, parts of Kenya, and Qatar. The warning “means that Israel intelligence has picked up a concrete threat to Jewish people or Israeli citizens in the country,” the Yeshiva World reports.

Energy

Electricity Ministry halts talks with Vestas over high prices

Talks between the Electricity Ministry and Danish wind turbine manufacturer Vestas over 2.2 GW of wind power installations they plan to develop have reportedly faltered after the two sides failed to come to terms on the project’s feed-in tariff (FiT), ministry sources said yesterday. While they did not disclose Vestas’ offer, the sources indicated it was higher than USD 0.038 per kWh and said that the Egyptian Electricity Transmission Company (EETC) had set a maximum FiT of USD 0.035 per kWh for wind projects. Vestas had reached an agreement with the New and Renewable Energy Authority last year to construct a EUR 230 mn 250 MW wind farm under a plan to install 2.2 GW of capacity over a five-year span for around USD 4.4 bn. The project was set to be financed through HSBC, EKF Denmark, Euler Hermes, CDP Banco Standard, Save Danida Denmark, and the Danish Investment Fund for Developing Countries. The EETC intends to re-issue the tender for the project in order to find a better offer.

Petrobel begins tests ahead of second production line from Zohr

Eni JV Belayim Petroleum Company (Petrobel) has begun carrying out tests ahead of operating the second production line connecting the Zohr offshore gas field, company President Atef Hassan said yesterday, Al Shorouk reports. Hassan did not announce when the company will begin operating the second line.

Basic Materials + Commodities

Centamin investors reject company’s new remuneration policy

Shareholders of Egypt-focused gold miner Centamin refused to back the company’s new remuneration policy during an AGM yesterday, the Financial Times reports. “A further rebuke came in the shape of significant minority votes of more than 20% against its pay report and the reappointment of three remuneration committee members; Edward Haslam, Mark Arnesen and Mark Bankes.”

ODE to launch Makadi Heights Red Sea project in April

Orascom Development Egypt (ODE) is planning to launch its new residential and commercial Red Sea Coast development Makadi Heights next month, CEO Khaled Bishara said yesterday, according to Al Mal. The resort is located 25 minutes away from Hurghada, and it offers transport services to the town, according to Bishara.

Tourism

Hurghada among new destinations added to Luton Airport

UK-based travel firm TUI UK has added Hurghada to its 2019 holiday packages and will be introducing flights to the Red Sea Coast city from London Luton, according to Luton Today.

Other Business News of Note

Healthcare “hackathon” produces seven new health startups

Egypt’s first healthcare hackathon, hosted by healthcare tech hub Health 2.0 | Cairo, saw the creation of seven new healthcare startups, Egyptian Streets reports. Out of around 100 attendees, seven teams were able to create winning healthcare software projects during the 72-hour event. Hit the link for a rundown of the problems the startups are trying to turn into businesses.

Nile University to launch Egypt’s first blockchain-focused incubator in April

Nile University is launching NUTechSpace, Egypt’s first blockchain-focused incubator, on April 15, Wamda reports. The incubator is specialized in cognitive technologies, which include machine learning, artificial intelligence, deep learning, and blockchain. The program will run one-year incubation cycles.

Sports

Mohamed El Neny extends contract with Premier League club

Arsenal’s defensive midfielder Mohamed El Neny has signed a new "long-term contract" with the Premier League club, BBC reports. Arsenal did not disclose the timeframe of the new agreement, saying only that “we will be together for a longer time.” The 25-year-old joined Arsenal from Swiss FC Basel in January 2016.

On Your Way Out

Prominent journalist and critic Louis Greiss died yesterday at 90 following a long battle with cancer, Reuters’ Arabic service reports. The co-founder of Ahram Weekly and former editor of Sabah El Kheir magazine “left a mark in the memory and history of journalism, literature, and criticism,” the Culture Ministry said in a statement.

Has Egypt already launched its own Facebook? Social network “Egypt Face” went live a few days ago, after ICT Minister Yasser El Kady announced that Egypt intends to create its own platform mimicking Facebook, Tahawul Tech reports. The creators of the website — which looks like a complete ripoff of the original platform — remain unknown, but its domain was registered a couple of days after El Kady’s announcement.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.5853 | Sell 17.6831
EGP / USD at CIB:
Buy 17.58 | Sell 17.68
EGP / USD at NBE: Buy 17.55 | Sell 17.65

EGX30 (Monday): 17,104 (+0.7%)
Turnover: EGP 1.7 bn (48% ABOVE the 90-day average)
EGX 30 year-to-date: +13.8%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session up 0.7%. CIB, the index heaviest constituent ended up 0.6%. EGX30’s top performing constituents were Qalaa Holding up 7.1%, SODIC up 6.0%, and Egyptian Resorts up 4.8%. Yesterday’s worst performing stocks Amer Group down 3.0%, ACC down 2.2%, and Abu Dhabi Islamic Bank down 1.6%. The market turnover was EGP 1.7 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +151.3 mn
Regional: Net Short | EGP -49.3 mn
Domestic: Net Short | EGP -102.0 mn

Retail: 56.0% of total trades | 56.8% of buyers | 55.1% of sellers
Institutions: 44.0% of total trades | 43.2% of buyers | 44.9% of sellers

Foreign: 27.5% of total | 32.0% of buyers | 23.0% of sellers
Regional: 9.3% of total | 7.8% of buyers | 10.8% of sellers
Domestic: 63.2% of total | 60.2% of buyers | 66.2% of sellers

WTI: USD 65.70 (+0.23%)
Brent: USD 70.20 (+0.11%)

Natural Gas (Nymex, futures prices) USD 2.64 MMBtu, (+0.69%, April 2018 contract)
Gold: USD 1,359.00 / troy ounce (-0.14%)

TASI: 7,857.46 (+0.19%) (YTD: +8.73%)
ADX: 4,651.05 (+0.78%) (YTD: +5.74%)
DFM: 3,103.80 (-0.36%) (YTD: -7.90%)
KSE Weighted Index: 410.82 (+0.22%) (YTD: +2.34%)
QE: 8,711.91 (-0.47%) (YTD: +2.21%)
MSM: 4,758.42 (-0.92%) (YTD: -6.68%)
BB: 1,325.63 (-0.70%) (YTD: -0.46%)

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Calendar

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. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt.