Thursday, 29 March 2018

Didn’t vote? The elections authority is coming for you


What We’re Tracking Today

Cairo suffered through one of the worst sandstorms in years last night, with high winds and thick sheets of sand blurring visibility on roads and filtering into homes and offices. The mercury is set to plunge to a daytime high of 23°C in Cairo today, Youm7 reports, without mention of another sandstorm today.

Round one of the presidential election is officially over and there will be no extension of voting to today, the Cabinet’s Information and Decision Support Center said in a statement carried by Al Shorouk. Voting was extended for an extra hour last night, with polls closing at 10 pm, according to MENA. Counting votes has begun and the results will be announced on 2 April, a National Elections Authority spokesperson said yesterday, Al Masry Al Youm reports.

Early estimates from TV stations suggest President Abdel Fattah El Sisi could win with 95% of the vote, Reuters reports.

Moussa came third in a two-man race: Youm7 is running a live tally of exit polls on its homepage. As of dispatch time, the newspaper says El Sisi currently has won 90.1% of the vote, while Moussa Moustafa Moussa has 2.8%. Spoiled ballots accounted for 7% votes cast.

We have more election coverage in Speed Round, below, including news that the election authority wants to prosecute everyone who didn’t vote this week. See y’all in court.

It’s interest rate day: The central bank’s Monetary Policy Committee will meet today to decide on interest rates amid a universal consensus in the business and analyst communities that rates will be cut. The sell-side research folks are looking at 50-100 bps.

Trading in the shares of our friends at B Investments gets underway at the EGX’s opening bell today. The retail tranche of BPE Holding for Financial Investments’ initial public offering was 84.4x oversubscribed when bookbuilding concluded on Monday. The firm is hoping to raise EGP 460 mn from the sale of 43 mn shares, good for a free float of about 27%. (The retail offering included 5 mn shares, while a further c. 38.1 mn were offered in a private placement). Sigma Capital was the sole coordinator and bookrunner, while Zaki Hashem & Partners acted as legal counsel to the issuer.

B Investments starts trading as its maiden earnings reported a net profit after tax and minority interest of EGP 133.2 mn for FY2017, a 152% y-o-y increase. Consolidated revenues for the year rose 58% y-o-y to EGP 171.6 mn, B Investments said in a statement last night (pdf). “Our performance during 2017 can be attributed to the remarkable growth of all of our portfolio companies despite the challenges that have risen in 2017,” said B Investments Chairman Hazem Barakat. “Heading into 2018, B Investments has a very vibrant pipeline of potential investments and will be rapidly implementing our post-IPO strategy of investing in our existing portfolio companies along with investments in new attractive sectors based on our active value investing approach,” noted founding partner Aladdin Saba. The company had said it will use the proceeds from its IPO to fund investments in renewable energy and non-banking financial services.

Investment Minister Sahar Nasr is holding a 9:45am presser today to discuss the details of her ministry’s investment map, which was released earlier this month. The map compiles an interactive directory of 1,270 projects up for grabs across the country’s 27 governorates. The investment opportunities span sectors including agribusiness, automotive, real estate and infrastructure, tourism, transportation, energy, and engineering industries, among others.

Real estate expo and conference Cityscape Egypt continues today and wraps up on Saturday at the Egypt International Exhibition Center. More than 90 companies are participating.

Saudi Arabia won classification as an emerging market by FTSE Russell, marking the first time a major index has classified the kingdom as an EM, according to a statement from the index. “The market authorities in Saudi Arabia have taken the required steps to implement market reforms and now meet the formal requirements to be included in FTSE GEIS. Changes include the introduction of enhancements to the Independent Custody Model (ICM) and the further opening of the Saudi Arabia capital market to Qualified Foreign Investors (QFI), which was initiated in 2015 and enhanced in 2018,” the FTSE said. Saudi will join FTSE’s secondary emerging market index in several stages starting in March 2019 and ending in December that year, the company said. Russell’s move improves the outlook for an MSCI emerging market upgrade expected in June.

Is KSA trying to out-do Benban? Saudi Arabia and SoftBank Group signed a MoU to build a USD 200 bn solar power development, which Bloomberg says is exponentially larger than any other solar project. The story has captured the delight of the international press, which has taken to rather tamely reporting headline initiatives including Saudi robots and other plans while, in the main, giving KSA a free ride on matters such as the corruption crackdown for which Egypt would have been pilloried. Just like the locker-room style skyscraper-measuring contest between Saudi and the UAE, we expect that the success of the USD 2 bn Benban solar park, has gotten the Saudis a little green.

On The Horizon

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.

The Easter and Sham El Nessim long weekend is coming soon: The two holidays fall on 8 and 9 April, respectively.

Enterprise+: Last Night’s Talk Shows

On the third and final day of the elections, the talking heads resumed their regularly scheduled discussion of voter turnout while keeping a close eye on preliminary results as they seeped into the press. No one appears to have brought up threats by the National Elections Authority to prosecute those who abstained from voting (we did, and you can find it in the Speed Round).

Needless to say, President Abdel Fattah El Sisi received the lion’s share of the votes — to the point where the votes in favor of rival candidate Moussa Mostafa Moussa were fewer than the number of invalid ballots (watch, runtime: 1:59). Preliminary estimates indicate that turnout in Luxor, Fayoum, Beni Suef and Minya hovered around 35-55% (watch, runtime: 2:18) and (watch, runtime: 2:12), while turnout in Menoufia exceeded 52%, according to State Information Service head Diaa Rashwan (watch, runtime: 1:58). Whereas Hona Al Asema’s Lamees Al Hadidi had her hands together in prayer for a total turnout of 30-35%, Rashwan nonchalantly said 40-45% would be passable.

Kol Youm’s Amr Adib refused to acknowledge that some chose to boycott the elections, and continued to maintain that voters showed up at polling stations en masse yesterday despite the bad weather conditions (watch, runtime: 3:41). Field reporters from Kol Youm, Hona Al Asema, Al Hayah Al Youm, and DMC also claimed the third day of voting saw a higher influx of voters than the previous two days, partially thanks to Mahalla workers (watch, runtime: 3:54). The workers went out to vote without any pressure from the textile company’s administration, according to company head Ahmed Moustafa (watch, runtime: 1:46).

Someone finally said it: Lamees Al Hadidi slammed some governors for offering financial rewards and promising services such as new sewage systems as voting incentives, pointing out that these are bribes and that having access to these services is a basic right and not a gift from the government for good behavior. She also stressed that people are heading to the polls because they want to and not because their votes are being bought (watch, runtime: 2:56).

Foreign journalists have not reported any violations, save for a few unconfirmed reports on vote buying, according to the SIS’ Rashwan, who dismissed the notion that the elections were rigged in any way. Director of the Mediterranean Basin Initiative at the Center for Transatlantic Relations Sasha Toperich — who acted as an observer throughout the elections — also had no complaints or violations to report (watch, runtime: 3:52). Meanwhile on DMC, National Press Authority head Karam Gabr railed against the Ikhwan for being disappointed that the elections went off without a hitch (watch, runtime: 6:46).

Speed Round

Speed Round is presented in association with

FRA approves new listing regs that raise freefloat requirement: The Financial Regulatory Authority (FRA) signed off yesterday on amendments to EGX listing regulations that raise the minimum requirement for the number of shares that need to be in freefloat, according to a FRA statement. Under the amended regulations, companies looking to IPO will have to choose between two options: The first will be to list at least 25% of their shares, up from 10% currently; and the second would entail listing a number of shares equivalent to 0.025% of the total freefloat capital of the EGX, provided that number is equal to at least 10% of the company’s total shares.

Already-listed companies need to comply and will have two choices: either increase their percentage of freefloat to at least 10% of total company shares, or the equivalent of 0.125% of total EGX freefloat capital (if that figure makes up at least 5% of total company shares). Companies will have until the end of 2019 to comply with the new regulations.

The amendments also cancel a directive that had required executive board members of brokerages to hold at least a 10% stake in the company.

Board members’ remuneration must be made public: The FRA’s newly-appointed board also approved yesterday regulations they say will enhance the transparency of thenation’s capital market. Those rules include provisions that will force listed companies to:

  • Provide all shareholders at every AGM with detailed reports on remuneration for board members (including salaries, bonuses, etc);
  • Require large shareholders and board members of listed companies to disclose their direct in indirect investments in other listed companies;
  • Include their governance framework in their annual reports;
  • Provide updates on planned capital increases on a semi-annual basis;
  • Share details of capital increase valuation studies with their oldest shareholders.

FRA broadens classification of SMEs seeking stock market listing: FRA has set the maximum capital required to list as an SME at EGP 100 mn, raising it from EGP 50 mn. Once listed, SMEs can continue to raise their capital until a ceiling of EGP 200 mn, after which point they are no longer classified as SMEs.

The FRA also signed off on provisions it says expand protections for minority shareholders, which include the creation of a new account in the EGX that will buy out minority stakes from shareholders who have been harmed by a company’s decision to delist from the bourse. Compliance deadline: Companies will have until the end of 2018 to adjust to the new amendments if their financial year ends on 31 December and until mid-2019 if their financial year ends on 30 June.

EFG Hermes has received regulatory approval to offer factoring services in the Egyptian market this year. The company announced yesterday (pdf) that its new business unit, EFG Hermes Factoring, now has a license to begin offering “tailor-fit factoring packages that cater to the needs of large-cap corporations as well as to those of SMEs,” EFG Finance Holding’s Walid Hassouna said. “Key offerings will include facilities covering both domestic and international transactions for import and export operations, supply chain financing and discounting products.”

The EGP 250 mn venture, a subsidiary of EFG Finance Holding, is expected to begin operations by the third quarter of 2018 and become fully operational by year’s end. “Venturing into the factoring space is yet another step in our strategy of diversifying our product offering,” said EFG Hermes Group CEO Karim Awad. “The new venture will leverage our liquid balance sheet and our growing relationships with financial institutions to build an optimal capital structure that is capable of meeting fast-growing demand for factoring services from both large corporates and SMEs alike.”

Okay, so what’s factoring? Think of it as payday loans for companies, only without the usurious interest rates. It’s one of the oldest forms of business finance and is, effectively, the sale of your receivables to someone at a discount. Think of it this way, at its most basic: You need cash today, and have a base of collectible invoices. EFG takes them off your hands at a discount, then goes and collects the face value of the invoice from your customers. You get (a large portion of the cash) now, EFG Hermes makes a profit from the discount at which it acquires them from you. has the best explanation we’ve seen, if you want to dive deeper.

M&A WATCH- A group of investors have acquired 100% of retail-focused brokerage Arab Finance, according to a company release. The group includes former Pharos board member Mohamed Radwan and HC Securities Head of Asset Management Omar Radwan, who said that new investors in the firm have promised to inject substantial capital into the company to restructure and reposition the firm. Arab Finance’s upcoming plans rely heavily on leveraging technology and its own track record in online trading, they said. The value of the transaction was not disclosed.

M&A WATCH- It looks like TE might be going after OTMT’s MENA Cables after all. Telecom Egypt said it is trying to arrange financing for a potential investment opportunity in submarine cables. The state-run telecom operator is planning to reduce its proposed dividends to shareholders this year, to EGP 0.25 from EGP 1 per share, to make short-term financing available for an “investment opportunity crucial for the continuation of revenue streams [from its] cable business,” according to Reuters. The company refused to reveal any details, saying only that it would go full-disclosure on its mysterious agreement once things were in motion.

This comes as OTMT says that it is still planning to sell MENA Submarine Cable Systems for USD 90 mn, according to a bourse statement picked up by Al Mal. Orascom Telecom Media and Technology (OTMT) had denied back in December receiving an offer from TE to acquire its submarine cable business, afters news circulated that TE was looking to acquire 100% of MENA in order to link its cables with its own TE North cable, which connects Egypt to France. OTMT was originally set to sell MENA to Network i2i, a subsidiary of India’s Bharti Airtel, based on a 2016 that appears to have fallen through.

MOVES- Paper products outfit Fine snags globally experienced exec as new CEO: Fine Hygienic Holding has appointed globally experienced exec James Michael Lafferty as its new CEO, Al Mal reports. Lafferty (LinkedIn) takes up his new duties on 1 April and is a former executive with Procter & Gamble, with whom he traveled the globe from the US to Poland the the Philippines. He was most recently CEO of British American Tobacco in the Philippines, where he was also a business columnist, having done a stint with Coca-Cola in Nigeria before joining BIT. He succeeds Salim Karadsheh, who had been with the company for 34 years.

Egyptera to meet in two weeks to discuss pricing formula for July power bill hike: The Egyptian Electric Utility and Consumer Protection Agency (Egyptera) will meet in two weeks’ time to discuss the hike in power prices set to take place in July, government sources said yesterday. Egyptera is currently studying a number of proposals, including one that sees bills rising by no more than 40% for consumption levels ranging from 50-300 kWh a month, and no more than 58% for all other consumption tiers, according to the sources. Expectations also see the state cutting the amount earmarked for non-commercial power subsidies to EGP 39 bn in the FY2018-19 budget, down from EGP 43.3 bn, as it presses ahead with the gradual phase out of subsidies.

Electricity Minister Mohamed Shaker had announced plans to push the full elimination of subsidies from power bills to FY2020-2021 from FY2019-2020. He had also said in February that Egyptera officials were already working on a new pricing formula for a hike that would impact users from the lower- to the higher-end of the consumption spectrum, adding that the lowest tier of consumers would see a maximum increase of 15%.

LEGISLATION WATCH- A copy of the Ride-Hailing Apps Act has leaked to the press: The current draft of the Ride-Hailing Apps Act, which is under review at the House Transport Committee, has been leaked, courtesy of Al Mal. The law, which would regulate companies such as Uber and Careem, has recently been pushed to the top of the government and parliament’s priorities after the Administrative Court issued a ruling ordering these apps’ shutdown. Among the highlights:

  • Companies will be required to pay up to EGP 10 mn to receive a five-year operating license. The exact cost of the license will be determined based on the size of the company’s fleet.
  • Ride-sharing drivers must pay up to EGP 1,000 for a license to work through the companies. Licenses will be renewed annually. Drivers will also be required to obtain a special symbol to show that their vehicle is being operated through an app-based service. It remains unclear whether the symbol will be a special license plate or something as simple as a sticker to be placed on the car’s windshield.
  • Taxes for ride-hailing apps will be 25% higher than those imposed on cabbies.
  • A separate ministerial decree will be issued to set specific quality standards for the cars being employed by the apps.
  • White taxis must be incorporated into ride-hailing apps’ fleets within three months of receiving their operating licenses. The text of the law does not impose a minimum quota, but previous reports had suggested that the apps would need to ensure white taxis comprise half of their fleets. White cabs operating under the apps will be subject to the same legislative framework, minus the extra taxes.
  • Companies and drivers will both face fines if something goes wrong. Companies that operate without receiving the necessary licenses would face penalties ranging between EGP 200k and 5 mn, while drivers would be fined EGP 5-20k for the same offense. Companies will also be slapped with a fine of no less than EGP 500k and no more than EGP 5 mn for failing cover their drivers under an insurance program, share their databases as required by the state, or incorporate white taxis in their fleets.
  • All parties involved will have a grace period of six months to comply with the law.

You can also read the full document here (pdf).

Meanwhile, Careem is said to be in early talks with potential investors to raise USD 500 mn in new funding, sources tell Reuters’ Arabic service. Uber’s largest rival in the region could some of the fresh capital to expand its business lines, one of the sources said, adding that the company is looking to expand into new markets, such as Tunisia and Algeria. Despite recent reports that Careem had held talks with investment banks about a potential IPO aimed for early 2019, CEO Mudassir Sheikha said in January that it was “nowhere on the horizon,” but that the company was “at a scale already where bankers think we should consider it.” In related news, Careem said yesterday it resumed services in Ramallah for the first time since November after striking a deal with Palestinian transport authorities. The company also announced it would begin operations in Pakistan’s Quetta starting today, according to Business Recorder.

Is Uber struggling in emerging markets? Uber is struggling in many regions, particularly in emerging markets, largely due to the company’s failure to understand and adapt to local nuances, Adam Minter writes for Bloomberg. For example, Uber failed to offer a cash payment option in countries with low banking rates and fell behind in offering options including tuk-tuks and motorcycles in others. Minter also suggests that last week’s Administrative Court ruling in Egypt against Careem and Uber would not have happened to “a local company with better government relations.”

LEGISLATION WATCH- The Council of State (Maglis Al Dawla) is reportedly expecting to refer the new Customs Act back to the Cabinet next week. Maglis Al Dawla intends to conclude its review of the act by the end of next week, after discussing some final points in the bill with representatives from the Finance Ministry and Customs Authority in separate meetings on Saturday and Monday, sources with knowledge of the matter said yesterday. The draft law, which had received the Ismail Cabinet’s sign off in February, is expected to slash custom duties on capital goods to 2% from a current 5% and expand temporary exemptions for production inputs and packaging equipment. The law also includes provisions that aim to curb illegal trade activities and evasions of custom tariffs. The Ismail Cabinet is expected to ship the bill over to the Parliament.

LEGISLATION WATCH- House Industry Committee wants to raise minimum domestic content needed for anything to qualify as “made in Egypt.” The House of Representatives’ Industry Committee is currently discussing amendments to the Industry Act with eye to providing incentives to increase domestic component requirements for manufacturing, committee chair Ahmed Samir told Amwal Al Ghad earlier this week. While he does not delve into details of the legislation, he did state that the law would be amended to allow those with a domestic component of around 25-55%, depending on the sector, to use the label “made in Egypt.” The legislation, which the committee is shopping around to relevant parties before formally presenting it for discussion in the House, comes as part of a series of legislation MPs hope will promote the domestic manufacturing of production inputs for industries that have traditionally relied on imports as part of their manufacturing processes. The Automotive Directive is looking to set incentives for auto assemblers who source 40% of car components from Egypt in the first year, with an eye to increase the quota in later years. The Public Procurement Act, currently with the House, grants Egyptian products preferential treatment in government contracts as a means of promoting local industry.

LEGISLATION WATCH- The executive regulations to the NGOs Law are ready and will be issued “within days,” an unnamed Social Solidarity Ministry source tells Al Mal. According to the source, the regulations — which should have been issued by last July — are expected to clarify several parts of the contentious law. Parliament had signed off on the bill, which forbids NGOs from participating in political activities and requires organizations to receive government approval prior to receiving foreign funding, back in 2016. President Abdel Fattah El Sisi signed it into law last May. The act has since come under fire several times, including from Republican senators and the US Congress’ human rights commission.

BUDGET WATCH- New state budget with prime minister, due to House on Saturday: The Finance Ministry handed the state’s FY2018-19 budget over to Prime Minister Sherif Ismail yesterday for review before it’s sent to the House of Representatives on Saturday, 31 March. As we noted on Monday, the budget includes a GDP growth target of 5.8%, aims to reduce the budget deficit to 8.4% of GDP, and achieve a primary surplus equivalent to 2% of GDP. The new budget also sees sovereign debt coming in at 91% of GDP and government earnings growing by 22% y-o-y to exceed an estimated 15.5% y-o-y rise in public spending, according to a Cabinet statement.

The FY2018-19 budget allocates EGP 322 bn to social welfare and protection programs. The government also earmarks EGP 266 bn for public wages, EGP 149 bn to government investments in infrastructure projects and services (particularly in Upper Egypt and governorates along Egypt’s borders), and EGP 60 bn for ensuring the availability of basic commodities and services. Prime Minister Sherif Ismail had said last week that the government would be shoring up the social safety net in the new budget through wage increases for public sector workers, adding new citizens to the Takaful and Karama programs, and increasing spending on commodity subsidies for the lowest income citizens.

The Ismail cabinet is expected to present the budget to President Abdel Fattah El Sisi before it’s shipped off to the House, Finance Minister Amr El Garhy confirmed to AMAY.

Egypt’s first real estate fund prepares for second issuance in 2H2018: Egypt’s first real estate fund is preparing for a second stock issuance for in-kind assets and cash in 2H2018 to increase the size of the EGP 80 mn fund, CEO Hashem El Sayed said. The fund is currently in talks with an unnamed Arab company to bring one of its malls under the fund’s umbrella in an all-stock transaction, according to El Sayed. The fund, which was set up by an alliance of the Egyptians Abroad Investment and Development Company, Pioneers Holding, and Misr Iran Development Bank, officially began trading on the EGX on Tuesday.

National Elections Authority to prosecute those who abstained from voting: The National Elections Authority (NEA) will compile a list of those who failed to vote in the presidential election and file the list as part of a complaint to the prosecutor general, NEA head Lasheen Ibrahim said on the last day of voting yesterday, according to AMAY. If the prosecutor takes the cases to trial, abstainers can expect a EGP 500 fine, he added. The NEA and members of the House of Representatives had been issuing threats on the second Election Day that they may impose a fine for those who have not taken part in the vote. Both claim the the Elections Act grants the NEA the right to issue these fines. The NEA also threatened media outlets with prosecution if they print “fake news,” NEA spokesperson Mahmoud El Sherif said, according to Al Shorouk.

The spate of election stories in the foreign press continued, and if you want an abridged version, simply take a look at our last two roundups here and here. The same three themes are repeated ad nauseum:

Efforts to coerce the electorate: With the NEA threatening to prosecute people who failed to turn out at the polls, this theme led election coverage. The New York Times’ Declan Walsh and Nour Youssef focused on the incentives, which he says who get to as low as USD 3. “Boxes of subsidized food — cooking oil, rice and sugar, mostly — promised to voters in many poor areas in return for casting their vote.” Reuters has printed something similar, again.

Turnout: How many people came out to vote was “top of mind” (we despise that phrase) for both the local and foreign press, who view turnout figures as the real measure of President Abdel Fattah El Sisi’s mandate. “The government is hoping for high turnout to lend the election legitimacy,” write Maggie Michael and Samy Magdy for the AP. Reuters is saying for the third straight day that turnout was low.

The elections are not fair: Political rights in Egypt and January uprising nostalgia remained ever present in discussions. The Washington Post’s Ishaan Tharoor called the elections a “farce,” and adding that it has extinguished any hope of democracy called for in 2011. We’re reading something similar on the Financial Times. The Guardian, and QZ continued to focus on the lack of contenders, while Sky News is interviewing Irish-Egyptian Ikhwani Ibrahim Halawa, who was released from prison last year after heavy lobbying from the Irish government.

Suffering from election fatigue? Clearly you were not as excited as the many who danced at polling stations. Some of them even managed to rope US election observers (watch, runtime: 0:35).


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Image of the Day

Meet the likely ancestor of Britons: A genetic analysis of the oldest human remains found in England has indicated that English people were much, much MUCH less pigment-challenged 10,000 years ago, according to Curiosity. Known as Cheddar man, his “genetic markers suggested that his skin pigmentation was closer to that of sub-Saharan Africa, pointing to the possibility that pale skin didn’t arise until much later.” In other words: The white skin color that is now typical of Europeans and North Americans likely did not exist for the majority of human history. The man is also believed to have had blue eyes, “putting an interesting wrinkle in our modern conceptions of which genetic traits go together.”

Egypt in the News

All anyone wants to talk about is the elections. See story, above, in Speed Round.

On Deadline

Columnist looks to pre-empt a conversation on a cabinet shuffle: When there’s an elections,there’s bound to be baseless talk of a cabinet shuffle. Come to think if it, even when there isn’t. Al Masry Al Youm columnist Sabry Ghoneim looks to preempt that conversation with her candidates. CBE Governor Tarek Amer and Administrative Control Authority head Mohamed Erfan are the best options for Egypt’s next prime minister. President Abdel Fattah El Sisi’s selection between these two contenders will depend on his priorities moving forward; if the president will stick to an economy-centric agenda, Amer should be his pick since he has proved himself worth, says Ghoneim. However, if the president wants to focus on overhauling the government system in its entirety to weed out corruption and inefficiencies, he should look no further than Erfan.

Worth Reading

The global water crisis explainer: Egypt’s water crisis is not unique. As a matter of fact, the country is but a tiny node in an ever-growing global water crisis caused by population and development growth, poor water resources management and climate change, according to National Geographic. Fourteen of the world’s 20 megacities are now experiencing water scarcity or drought conditions. As many as 14 bn people already live in regions that experience severe water stress for at least one month of the year, according to a 2016 study in the journal Science Advances. Cape Town made history earlier this year by becoming the first major city where water will officially run out.

In wetter climates, the issue sometimes is too much water. When flash floods and deluges fall, the human and economic consequences are sometimes disastrous as when Hurricane Harvey hit the US.

Lesson #1 for Egypt: It’s simply not enough to tackle general human consumption. typical home use of water—for washing, flushing, and cooking—represents only about three percent of humanity’s total water consumption, says says Arjen Hoekstra, a professor of water management at the University of Twente in the Netherlands. Agriculture uses the lion’s share, consuming 80-90%, followed by energy production and industry. This water, which often goes largely unseen, is often called “virtual water.” From water-intensive crops to the manufacturing of virtually everything, every good produced and exported amounts to an export of water. One single half liter can of soda actually costs 175 liters of water to make. Hoekstra and others are pushing for a concerted global effort to make sure sensible water management inspires economic policies, where water intensive

For us here, the government has begun to act. Besides launching a water rationing policy and consumption awareness drive, the irrigation and agriculture ministries have launched a new project with the UN Food and Agriculture Organization (FAO) to support sustainable water management in reclaimed land, according to a FAO statement. “This project will set up and test an automated water consumption monitoring and water accounting system at selected pilot areas of the newly reclaimed area,” in addition to a remote-sensing system to collect and analyze data for the Agriculture Ministry. The project comes as Egypt is beginning to focus on the sustainable use of groundwater resources to irrigate reclaimed land.

Diplomacy + Foreign Trade

Saudi promises to lift strawberry, pepper import ban a little later than expected: Saudi Arabian authorities have reportedly agreed to lift the blanket ban on strawberry and pepper imports from Egypt ahead of the coming export season in November, sources from Egypt’s Agriculture Ministry said. Deputy Minister Safwat El Haddad had said earlier this month that Saudi authorities would lift the ban this March after a meeting between Agriculture Minister Abdel Moneim Al Banna and his Saudi counterpart. Saudi Arabia had decided to ban imports of Egyptian strawberries and peppers last year due to high levels of residual pesticides. A delegation from Egypt’s Agricultural Quarantine Authority had also traveled to Riyadh earlier this month to negotiate an end to the ban. Saudi has also banned imports of Egyptian guavas.

Palestinian intelligence chief Majid Faraj will visit Egypt today to present evidence that Hamas orchestrated the failed assassination attempt earlier this month on Palestinian Authority Prime Minister Rami Hamdallah, Haaretz reports.


AEDC issues six local tenders for stations’ development projects

The Alexandria Electricity Distribution Company (AEDC) has issued six local tenders for the refurbishment and development its grids, a company source tells Al Mal. The company, will begin accepting offers in April.


China’s CRBC to begin USD 600 mn Sharm El Sheikh port development project in late April

The China Road and Bridge Corporation (CRBC) will reportedly break ground on the USD 600 mn Sharm El Sheikh port development project on 25 April, a source at the Red Sea Ports Authority tells Al Mal. CRBC will build a touristic resort with a yacht marina and entertainment center, as well as an EGP 30 mn mechanical dock. The Chinese developer had landed the contract for the Sharm El Sheikh port in December last year, when it acquired three Red Sea port projects worth a combined USD 1.35 bn, including the development of the ports in Safaga and Nuweiba.


Edita to invest EGP 150 mn this year to develop factories

Packaged snacks manufacturer Edita is planning to invest EGP 150 mn this year to build a new factory and upgrade existing ones, according to Chairman Hani Berzi. The new EGP 30 mn plant will be established in the Six October City Polaris Al Zamil industrial park on land the company purchased two years ago. Edita is also building a new factory in Morocco under a partnership with Dislog Group, which should begin operating by 3Q2019, Berzi said, adding that the company also plans to upgrade machinery and equipment at its different facilities this year.

Other Business News of Note

Flat6Labs plans to reach second financial close on EGP 100 mn fund this year

Flat6Labs is planning to close on its EGP 100 mn Flat6Labs Accelerator Company (FAC) fund by year’s end, which will allow it to accelerate more than 100 Egyptian early stage startups over the next five years, says Managing Partner Marie-Therese Fam. The fund had reached its first EGP 50 mn closing last year, and plans to add another EGP 50 mn by the end of 2018 to bring the total funding to EGP 100 mn. Flat6Labs is currently in talks with banks and financing institutions in Egypt and across the Middle East to secure the additional funding needed, according to Fam.

Investment Ministry, Lawyers’ Syndicate sign agreement to provide legal services to investors

Investment Minister Sahar Nasr signed yesterday an agreement with the Lawyers’ Syndicate to provide legal services to investors online and through investment service centers, according to a ministry statement.

On Your Way Out

The ever-popular WW2 first-person shooter Call of Duty is adding an Egypt map to its its upcoming release, War Machine, according to Eurogamer. The pack is due to his PlayStation 4 on 10 April.

The Market Yesterday

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Turnover: EGP 2.2 bn (91% ABOVE the 90-day average)
EGX 30 year-to-date: +15.2%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 0.2%. CIB, the index heaviest constituent ended up 0.7%. EGX30’s top performing constituents were Orascom Telecom Media & Technology up 8.9%, Palm Hills up 8.1%, and Egyptian Resorts up 5.2%. Yesterday’s worst performing stocks GB Auto down 4.0%, Abu Dhabi Islamic Bank down 3.1%, and Abu Qir Fertilizer down 2.6%. The market turnover was EGP 2.2 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +145.0 mn
Regional: Net Short | EGP -49.6 mn
Domestic: Net Short | EGP -95.4 mn

Retail: 62.8% of total trades | 63.9% of buyers | 61.8% of sellers
Institutions: 37.2% of total trades | 36.1% of buyers | 38.2% of sellers

Foreign: 16.5% of total | 20.1% of buyers | 13.0% of sellers
Regional: 14.9% of total | 13.7% of buyers | 16.1% of sellers
Domestic: 68.6% of total | 66.3% of buyers | 70.9% of sellers

WTI: USD 64.60 (+0.34%)
Brent: USD 69.86 (+0.47%)

Natural Gas (Nymex, futures prices) USD 2.71 MMBtu, (+0.37%, May 2018 contract)
Gold: USD 1,331.90 / troy ounce (+0.14%)

TASI: 7,900.28 (-0.53%) (YTD: +9.33%)
ADX: 4,550.59 (-1.33%) (YTD: +3.46%)
DFM: 3,090.54 (-0.07%) (YTD: -8.29%)
KSE Weighted Index: 409.57 (+0.75%) (YTD: +2.03%)
QE: 8,553.14 (-1.62%) (YTD: +0.35%)
MSM: 4,774.04 (+0.31%) (YTD: -6.38%)
BB: 1,315.13 (-0.92%) (YTD: -1.25%)

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28-31 March 2018 (Wednesday-Saturday): 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.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender 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; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.