Tuesday, 10 April 2018

Court of Urgent Matters rules in Uber and Careem’s favor


What We’re Tracking Today

We hope you all had a wonderful and relaxing holiday — the last big one before Ramadan (you get only day each for Sinai Liberation Day on 25 April and Labor Day on 1 May). Yes, Ramadan is in a little over a month from now. Food for thought (Mmmm, food).

We have a handful of news for you this morning, including the successful conclusion of Egypt’s EUR 2 bn eurobond sale and a ruling in favor of ride-hailing apps Uber and Careem, among other things, which we cover in detail in the Speed Round, below.

But first, it’s inflation report day: We are expecting today results from the CBE and CAPMAS on inflation figures for March. Annual headline inflation fell to 14.4% in February from a high of 33% in July 2017, while core inflation dropped to 11.9% in February from a high of 35.3% in July — the lowest they’ve been since 2016. This undoubtedly bolstered the CBE’s resolve to continue with monetary easing for the second straight month since the EGP float, cutting rates 100 bps last month.

An expected rise in global interest rates may soon see African economies facing a debt crisis, according to African Business. The continent’s debt levels have risen to alarming levels, as widening deficits and a sharp drop in commodity prices have prodded more than 20 African countries to seek out loans from international funding institutions and issue large eurobonds in the last few years, including Egypt, Nigeria, Ghana, Kenya, and Cote d’Ivoire. “It is the equivalent of using one credit card to pay off another,” as most of the inflowing cash is used to plug budget deficits and pay off existing debt. “Commercial debt is also becoming a problem. Some USD 35 bn of existing eurobond debt will mature between 2021-2025.”

Equity markets will be holding their collective breath ahead of Chinese President Xi Jinping’s speech today, which is “fraught with market peril” and “could really stir the pot,” Performance Trust Capital Partners’ Brian Battle tells Reuters. Xi “is expected to announce new economic reforms and market-access measures in a delicate attempt to answer complaints by the US and other trading partners,” according to the FT. China had threatened last week to slap a 25% tariff on USD 50 bn-worth of US imports, in response to US President Donald Trump announcing a plan to impose a similar levy on a range of Chinese products, which US officials said was still months in the making. Chinese businessmen and academics attempted yesterday to dispel rumors of China’s intention to escalate the fight, the FT says.

An agreement in the offing? On the other side of the pond, Trump also downplayed rumors of a trade war, saying at a White House Cabinet meeting he expects Beijing to strike a bargain with the US and move to eliminate trade barriers. “‘Taxes will become reciprocal and [an agreement] will be made on intellectual property,’” he said, adding that while a pact was probable, the lack of one would mean China paying “pretty high taxes to do business with our country.”

Global stock prices were up yesterday as equity markets began to recover from fears of the imminent trade war that had sent indices tumbling last week Asian and European stock markets saw prices continue on their uptrend from last week. In the US, the S&P 500 closed the day with a 0.33% gain, “after rising as much as 1.9% during the session,” while Nasdaq was up 0.51%. Both indices were weighed down by news that the FBI had raided Trump’s longtime lawyer Michael Cohen’s office.

Meanwhile in Russia, major companies saw their share prices drop after the US announced a new round of sanctions on Friday that “target officials and businesspeople around President Vladimir Putin in an aggressive response to alleged Russian meddling in the 2016 US election,” Reuters says (The FT looks into whether or not the sanctions will have a last impact on Russia here).

In other news from across the pond, Trump is receiving Qatar’s Emir Tamim bin Hamad Al Thani today, according to a White House statement. The two will discuss ways to “strengthen ties” and advance “common security and economic priorities” between the US and Qatar. Trump had recently met with Saudi Crown Prince Mohammed bin Salman at the White House, and will be meeting with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed soon. Bin Zayed and Trump had called for greater unity within the GCC in a phone call on Friday, Reuters reports. Tamim’s visit comes amid an ongoing Gulf spat, which Trump is hoping to resolve in a September summit. Not likely to help are Saudi proposals to turn Qatar into an island, by digging a canal and a zone to dump nuclear waste, according to Gulf News.

What We’re Tracking This Week

Portuguese President Marcelo Rebelo de Sousa is visiting Egypt this week to attend the Egyptian-Portuguese Business Forum on Thursday, Al Mal reports.

The Game Sports Industry ConferenceEgypt’s first-ever platform dedicated to the sports industry — kicks off in Cairo tomorrow.

Enterprise+: Last Night’s Talk Shows

The talking heads all seemed to be in too much of a fish-induced stupor to offer up anything of value last night, deciding instead to air interviews and in-studio performances with Egyptian singers.

Speed Round

Speed Round is presented in association with

Court of Urgent Matters shields Uber and Careem from Administrative Court ruling: The Cairo Court of Urgent Matters suspended on Saturday a ruling by the Administrative Court last month that revoked the licenses of ride-hailing apps Uber and Careem, Al Mal reports. This latest ruling, which came after the companies petitioned the Court of Urgent Matters, gives both companies legal breathing room to operate until a final decision from the Highest Administrative Court, judiciary sources tell Reuters. The March ruling, which came following a lawsuit filed by white taxi drivers, had not yet been enforced by either the government or the companies, with the Ismail Cabinet and Careem both announcing they have yet to receive official court notice.

Temporary stop gap until Ride-hailing Apps Act passes: The development comes as the Ismail Cabinet is trying to rush the Ride-hailing Apps Act into law in the House of Representatives, with the bill garnering little support from ride-hailing companies, taxis and even the Council of State.

White taxis vow vengeance: Lawyers for the taxi drivers behind the mess are again suing the companies in the Administrative Court to have the original ruling upheld, Al Shorouk reports. This latest lawsuit, which was filed on Monday, claims that the Court of Urgent Matters has no jurisdiction to rule on the case.

As far as these guys are concerned we’d like to remind our readers of two things: White taxis are planning to release their own ride-hailing app, Professional Taxi, and we have it on good authority that they have been meeting with investors on this. The Ride-hailing Apps Act, which they so vehemently oppose, offers them protection by forcing ride-hailing companies to incorporate them into their fleets. Simply put, they want to have their cake and eat it too.

The story is receiving widespread coverage in the foreign press, with the Associated Press framing this as another battle in the war between big bad Uber and taxis. Engadget is noting that while Saturday’s ruling does give Uber breathing room, the Ride-hailing Apps Act may hurt the company’s ability to operate in Egypt in the long term.

Egypt closes EUR 2 bn eurobond issuance: Egypt has successfully closed a EUR 2 bn eurobond sale that breaks down to two equal tranches of eight-year notes with a yield of 4.75% and 12-year notes with a yield of 5.625%, the Finance Ministry announced yesterday (pdf). The offering was 3.8x oversubscribed, attracting purchase orders of EUR 7.5 bn from over 350 investors from 35 countries. Demand for the issuance “reflects the international community’s renewed confidence in reform efforts,” according to the statement.

Proceeds will be used to boost the central bank’s FX reserves, which reached USD 42.61 bn in March, while the EGP equivalent will be used to plug the budget deficit and make financing available for several state projects. Finance Minister Amr El Garhy had led a ministry delegation on a three-day roadshow from 3-6 April to the UK, Germany, Italy, and France where they held extensive meetings with some 70 European investors, as well as 10 US investors, ahead of the sale. BNP Paribas, Intesa Sanpaolo subsidiary Banca IMI, Deutsche Bank, and Standard Chartered Bank acted as joint bookrunners for the offering — Egypt’s first EUR-denominated bond sale —with the National Bank of Egypt and Banque Misr as co-bookrunners. 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 follows a USD 4 bn issuance in February.

IPO WATCH- Will listed state-owned companies be prioritized in the state IPO program? The government may first sell new shares in listed state-owned companies in the state IPO program, Public Enterprises Minister Khaled Badawi implied in a call in to Hona Al Asema on Sunday (watch, runtime: 4:37). These listings, which are easier procedurally than IPOs, would include Alexandria Container & Cargo Handling Company (ACCH), Eastern Tobacco and Heliopolis For Housing & Development. His statements came in response to questions on which state company will pilot the program.

But all of this is up in the air still, as the timeline for the IPO program will be set by the government in two to three months, with the first wave of listings happening soon after, Badawi said. The Finance Ministry and NI Capital are coordinating with investment banks advising on the program on the timeline, he added. While the government did announce the list of 23 companies which will list on the EGX as part of the program, there has been much less clarity on schedule. EGX boss Mohamed Farid said that up to two state-owned companies would IPO this year, while Finance Minister Amr El Garhy had said that the government plans to offer shares from 4-6 companies on the EGX in 2018, including ones that are already listed.

As for the listing of ACCH shares, the government is planning to sell an additional 15% stake of the company, bringing the total percentage of free float shares to 20%, sources from parent company the Holding Company For Maritime & Land Transport told Al Mal. The holding company will sell 8.7% of its shares in ACCH (out of a total ownership stake of 55.8%), while the remaining 6.3% will come from the Alexandria Port Authority’s 40% ownership stake.

Reassuring public sector workers: Prime Minister Sherif Ismail promised that the state IPO program does not aim to cut public sector jobs in a statement issued on Sunday. Detractors of the program have been raising fears that it will lead to cutting state jobs.

M&A WATCH- Marsa Alam for Tourism Development’s (MMATD) board approved an offer to acquire a 68% stake in El Badr Plastic Company, according to a bourse filing (pdf). The price tag of the acquisition, which will be presented to the Financial Regulatory Authority for approval, will be the average share price of El Badr over the past six months, according to the statement. We had noted back in February that El Ahram Printing & Packaging (EPPK) — a subsidiary of MMATD — is in talks to buy a 32% stake in El Badr. EPPK already owns 0.15% of El Badr through a subsidiary.

Mansour Group, Scope, Groupe PSA officially launch their Peugeot distribution operation in Egypt: Mansour Group, Dubai-based Scope Investment, and French car manufacturer Groupe PSA have officially launched their new partnership to distribute Peugeot cars in Egypt by releasing two new models, Mansour Group CEO Adel Khedr told Al Mal on the sidelines of a Sunday press conference. The Mansour-Scope partnership is investing USD 50 mn this year in Peugeot showrooms and after-sale services centers, according to Khedr. They aim to sell 5,000 Peugeot cars this year, with plans to export to Libya, Iraq, Uganda, and other regional countries. Local companies El Saba Automotive, El Seoudi Group, Wahdan Auto Group, and Nour El Din El Sherif for Trading Vehicles were chosen in January to help provide after-sale services. Mansour Group and Scope Investment had clinched the distribution rights to Peugeot cars from Cairo For Development and Cars Manufacturing (CDCM), which is suing the Peugeot-Citroen arm of Groupe PSA for unexpectedly ending their 41-year-old partnership last November.

INVESTMENT WATCH- Is Italy’s Piaggio looking to assemble tuk-tuks in Egypt? Italian motor vehicle manufacturer Piaggio is considering teaming up with local partners to assemble tuk-tuks in Egypt, the head of the Egyptian Auto Feeders Association (EAFA) Ehab Abul Enein tells Al Mal. A Piaggio delegation has just concluded a visit to Egypt, where they met with spare part manufacturers and are already looking for financing to develop the project.

And while we’re on assembling vehicles, with only eight months to go before EU car import tariffs fall to zero, we still don’t know when the German consultancy will conclude its review on the Automotive Directive. Tick tock.

Another milestone in Egypt’s transformation to a global energy hub — LNG exports to the UK: Egypt sent a rare LNG export shipment to the UK on Sunday from the Idku plant, according to Bloomberg. The shipment comes as Egypt ramps up domestic production on its gas fields, including Zohr, while promoting agreements abroad which could see it become the export hub for natural gas in the East Mediterranean.

HSBC is bullish on Egypt: Egypt’s economic growth has been extremely impressive, HSBC Senior Economist Razan Nasser tells Bloomberg TV. This is particularly reflected in Egypt’s account deficit, which shrank by 64% in 1H2017-18 on the back of better tourism, remittances and export figures.

Further structural reforms needed: Overall, while Nasser is bullish on Egypt’s growth, she says that the economic gains have primarily been cyclical. Further structural reforms will be needed, and that might be a challenge, as these are under fewer time constraints and their impact won’t be felt in the short term, she says.

As for the monetary easing cycle, Nasser sees the interest rate cuts are a welcome relief, expecting another 200 bps cut this year. The 700 bps hikes in interest rates following the EGP float had been painful on the government as well, as debt service makes up a third of public spending. These cuts are justified when looking at the lower inflation figures. These have also been reflected in the PMI reading in March, which despite falling to 49.2, saw both input prices and output charges increasing at softer rates in the non-oil private sector, she added.

Inflation continues to be a risk, warned Nasser, who added that “we shouldn’t get complacent.”

Carry trade won’t be harmed by the rate cuts: While she doesn’t expect the carry trade to continue at the same rate as yields drop, Nasser said that Egypt’s fundamentals will continue to help make Egypt attractive. You can check out the full interview here (watch, runtime: 5:08).

Surprise. Egypt, Sudan, Ethiopia fail to reach agreement in GERD talks: Tripartite talks in Khartoum between Egypt, Sudan, and Ethiopia over the Grand Ethiopian Renaissance Dam (GERD) ended on Friday without agreement, Foreign Minister Sameh Shoukry announced, according to Ahram Online. “We will continue to comply with the instructions of political leaders in our countries to break this deadlock, during the upcoming one-month period starting from 5 April to 5 May," he added. Sudanese Foreign Minister Ibrahim Ghandour told reporters that the 16-hour talks failed due to “a technical issue that we cannot discuss,” Reuters reports. Ghandour added that the talks were “constructive and important,” but needed more time, according to Sudan’s state news agency SUNA. Irrigation ministers from the three countries will discuss the outstanding issues in a meeting to be determined at a later date, he said, adding that the foreign ministers and heads of security agencies would join them when they make progress on these unnamed technical issues. Egyptian Irrigation Minister Mohamed Abdel Aty hinted in an interview with state-owned Al Ahram that Sudan came around in the talks and that Ethiopia remains the only country Egypt is at odds with. Negotiations on the dam had reached a gridlock last year, but the three countries agreed in January to continue looking for a solution.

Talks of an electricity grid interconnection project between Egypt and Sudan are faring better, following talks between Electricity Minister Mohamed Shaker and his Sudanese counterpart Moataz Moussa,according to Sudan Tribune. The two agreed to hold more meetings and complete the necessary arrangements to launch the project in the coming period. Talk of the project began after the presidents of Egypt, Sudan, and Ethiopia had agreed back in January to set up a joint investment fund between their three countries to finance infrastructure projects.

Nasr signs USD 100 mn loan agreement with KFAED: Investment and International Cooperation Minister Sahar Nasr signed yesterday the contracts for a USD 100 mn loan from the Kuwait Fund for Arab Economic Development (KFAED) to complete the financing of five water desalination plants in South Sinai, according to an emailed statement (pdf). Egypt and KFAED had signed the initial loan agreement back in 2016.

This comes after the Islamic Development Bank Group agreed to offer funding for several development projects in Sinai during a meeting in Tunisia last week with Investment and International Cooperation Minister Sahar Nasr, according to a ministry statement. The two sides did not settle on the amount of funding but agreed that it would be used in part to finance water treatment plants in the peninsula. The meeting also included talks on developing a USD 3 bn cooperation strategy for the next three years to finance other development efforts in Egypt.

Nasr is expected to drum up more financing commitments for Sinai development projects from four other regional financial institutions during meetings in Amman today, ministry sources say. In addition to representatives from the KFAED, the Saudi Fund for Development, the Abu Dhabi Fund for Development, and the Arab Fund for Economic and Social Development, the sources say Nasr might also meet with officials from the World Bank in hopes of signing a loan agreement for the peninsula’s development.

Direct flights between Cairo and Kiev for Ukrainian airlines began on Friday for the first time in 13 years, Ukraine’s ambassador to Cairo Hennadii Latii said, according to Youm7. Direct flights through Ukraine’s national carrier Ukraine International Airlines had launched flights to Cairo on Friday. Ukraine’s Aerosvit Airlines had suspended direct flights to Cairo 13 years ago, said Latii, who refuted reports that the airlines had stopped flights following the downing of the Russian Metrojet flight in 2015.

This comes as flights between Egypt and Russia are due back this Thursday. EgyptAir is has three weekly flights to Moscow set up, and will also schedule additional flights to Russia in June to accommodate football fans heading to the World Cup.

Speaking of long awaited moves from Russia, Cairo and Moscow are in “the final stages” of talks over the USD 7 bn Russian Industrial Zone (RIZ), according to Federation of Egyptian Chambers of Commerce Secretary General Alaa Ezz. Suez Canal Economic Zone chief Mohab says negotiations over the RIZ are going to enter their final stages during the second half of the month, while the contracts for the zone will be signed sometime during 1H2018, Al Mal reports. Egypt is also scheduled to host a meeting of the Arab-Russian Business Council on 23 April, according to Ezz.

BUDGET WATCH- Discussions on the FY2018-19 budget plan in the House of Representatives began almost a week ahead of schedule as the House Budget Committee kicked off its deliberations on Sunday, according to Al Mal. From what we’re seeing, the committee appears to view the bill favorably. Committee chair Hussein Eissa and deputy chair Yasser Omar showered praise on the government’s plan to boost social welfare spending and raise commodity subsidy spending, saying the budget caters to lower income citizens. The FY2018-19 budget, which was introduced in the House last month, allocates EGP 322 bn to social welfare and protection programs and commodity subsidy spending.

Some information is finally trickling from parliament on plans for energy subsidy cuts, as the Ismail Cabinet has been tight-lipped on the issue. Eissa refuted reports that the government is planning more than one fuel subsidy cut, saying that this would significantly impact inflation. Eissa did not state any figures. Members of the House Energy Committee also praised the Electricity Ministry’s plan to postpone lifting electricity subsidies. While it had said it is planning to delay the full elimination of subsidies on power bills to FY2020-2021 from FY2019-2020, MPs seem to think the phase-out will be completed in 2022. The committee’s deputy chair Hamada Ghallab did extol the virtues of the electricity subsidy cuts, according to the newspaper.

In other House news, parliament’s Economic Committee is once again stomping its feet, calling for greater oversight on the unpopular “private funds” — state discretionary funds which have gained a reputation as slush funds. The committee is demanding the Finance Ministry show it accounts and cashflow of these funds, after it was revealed that a private fund belonging to the Cairo Governorate recorded a surplus of EGP 140 mn, sources said. Finance Minister Amr El Garhy had said last year that provisions for greater oversight of these funds will be included in amendments to the Auctions and Tenders Act.

Orange Egypt has signed for an EGP 7 bn syndicated loan with eight banks to refinance its existing EGP 4.3 bn debt (incurred mostly in the acquisition of a 4G license) and finance its expansion plans in Egypt, according to a company statement. The lending banks are CIB, NBE, Banque Misr, Alex Bank, HSBC, Emirates NBD, Crédit Agricole, and Attijariwafa Bank. CIB will manage and facilitate the loan for Orange Egypt. The company had said it saw two consecutive years of losses, in part due to the 700 bps interest rate hike, which drove up financing costs.

KIMA signs EGP 7 bn syndicated loan to finance Aswan fertilizer production facility: The Egyptian Chemical Industry Company (KIMA) signed on Thursday a EGP 7 bn syndicated loan agreement to finance its ammonia and urea production facility in Aswan, according to a statement (pdf). The agreement is an amendment to the original facility signed in 2015, and brings the banks’ total investment in the project to EGP 11.6 bn, the statement says. The National Bank of Egypt, the Arab African International Bank, and Banque Misr are initial mandated lead arrangers, underwriters and bookrunners, while Banque du Caire is mandated lead arranger and sub-underwriter. BLOM Bank and the Egyptian Arab Land Bank are also contributing to the facility. Italian engineering and construction firm Tecnimont had asked for an extra USD 76 mn to complete its work on the facility, as we noted last week. Beltone Investment and Zaki Hashem & Partners acted as financial and legal advisors to KIMA, while Sarie Eldin & Partners acted as the syndicate’s legal counsel.

MOVES- Renowned journalist Hamdy Rizk has been appointed as the new editor-in-chief of Al Masry Al Youm, Ahram Online reports. Rizk replaces Mohamed El Sayed Saleh, who was dismissed by the board last week following controversy over the newspaper’s coverage of the 2018 presidential election. Rizk served as editor-in-chief of Al Musawar magazine from 2009-13, and has written a daily column for AMAY since its launch in 2004. Rizk’s appointment and Saleh’s dismissal has drawn significant international coverage, including by the Associated Press.

MOVES- Sahar El Damati has resigned from her position as Vice Chairman at Banque Misr. According to a copy of the resignation letter printed on Youm7, El Damati left to pursue a career in academia. El Damati was Vice Chairman for just under a year.

MOVES- Omar Ramzy was appointed head of Banque du Caire’s corporate credit division at the beginning of this month, Al Mal reports. He previously headed Credit Agricole Egypt’s structured finance and syndications division.

MOVES- The Egyptian Arab Land Bank has tapped Hana El Helaly as head of institutional relations and executive advisor to the bank’s chairman, Al Mal reports. El Helaly previously held positions at the Social Fund for Development and as an advisor to the UN.


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The Macro Picture

Emerging market economies are in for a “rare burst of synchronized growth” this year, for the first time since 2011 and with very few exceptions, Steve Johnson writes for the Financial Times. While it is unusual for EMs to experience simultaneous growth, it likely the impact of “growth-supportive monetary policy in the US and eurozone, alongside the recovery in commodity prices,” according to Renaissance Capital chief economist Charles Robertson. This trend is seen continuing in 2018, as “‘commodity prices have now stabilized, global growth has picked up and currencies have weakened, the inflationary impulse of that has fed through and [monetary] policy can be a bit more supportive,’” said Capital Economics’ William Jackson. They note, however, that the health of EM economies is contingent upon growth in the US, Europe, and China, warning that certain countries, including Saudi Arabia, South Africa, Russia, and Brazil could be looking at a medium-term recession in the face of a crisis (such as a potential Sino-US trade war), “given that the economic recoveries in all three countries are still quite fragile.”

Image of the Day

One small finger bone is helping to challenge theories of human migration: A small fossil finger bone found at an archaeological site in Saudi Arabia is lending further credence to the idea that Homo sapiens migrated out of Africa much more than 60,000 years ago, according to Cosmos Magazine. Testing on the bone established that it is 90,000 years old, putting it among one of the world’s oldest fossils found outside of Africa.

Egypt in the News

The military’s expanding role in Egypt under President Abdel Fattah El Sisi has had adverse effects on the country’s economy, security, and political scene, Abdallah Hendawy writes for Reuters. Whereas previous regimes in Egypt also relied on the armed forces to control core positions in the state, El Sisi “brought the military out of the shadows, allowing him to consolidate power and generate relative stability, but also distorting Egyptian political and economic life.” The military’s expanding activity in the private sector is also possibly taking away from its core duty of protecting national security, Hendawy says.

Australian fruit provider Creative Gourmet has recalled pomegranate arils imported from Egypt over a link to a hepatitis A outbreak in New South Wales, Food Safety News reports. All seven individuals with confirmed infections reported eating the same pomegranate products, and the New South Wales Food Authority has confirmed that Australian-grown pomegranates are not linked to the outbreak. The company said that it decided to action a “precautionary recall” although “all product tested to date has been cleared and has not revealed a link to Hepatitis A.” Frozen strawberries imported from Egypt had also been linked to an outbreak of hepatitis A in Virginia back in 2016.

Other international headlines worth noting in brief include:

  • Cairo is sending officials to Gaza to push the “faltering reconciliation agreement” between Hamas and Fatah, the Times of Israel reports.
  • The Committee to Protect Journalists (CPJ) urged authorities to “immediately release” three local journalists, while Reporters Without Borders launched a social media campaign for imprisoned photojournalist Shawkan.
  • Egyptian potatoes continue to be in high demand in Germany, Fresh Plaza reports. Meanwhile in China, Egyptian oranges are plugging the market demand for imported fresh fruits.
  • Egypt has been growing quinoa in “highly saline and arid conditions” since 2007 as part of a food security program led by the Dubai-based International Center for Biosaline Agriculture, according to ReliefWeb.
  • Archaeologists discovered a 2,200-year-old Greco-Roman temple in Egypt’s Western Desert, fueling hopes of understanding life in the Siwa Oasis as far back as 10,000 BC, RT reports.

On Deadline

Digitizing the government and all its services is integral to cutting costs and spurring investment, Mohamed Youssef writes for Al Shorouk. Investment in technology would not only make people’s lives easier by reducing the need for visiting government offices and doing paperwork, but it would also help the state cut back on expenses, Youssef says.

Worth Watching

Sleep well last night? You can thank your genes for that. According to an experiment by a group of US scientists, a specific gene is necessary to ensure a good night’s sleep, and cases of that gene being mutated or altogether absent are consistently connected to having a fitful sleep. The theory also holds up across different species: The experiment was first run on mice before it was run again on a group of humans and some fruit flies, for good measure. A separate study also found that it’s a whole other gene that determines how much sleep different people need to feel rested, and discovered that a rare mutation actually allows human brains to regenerate in less time (watch, runtime: 3:38).

Diplomacy + Foreign Trade

Foreign Minister Sameh Shoukry is meeting with his Cypriot counterpart Nikos Christodoulides in Cairo today, according to the State Information Service (SIS). The two will discuss their tripartite cooperation agreement with Greece over energy resource development in the East Mediterranean. The two countries are working on connecting Cyprus’ Aphrodite gas field to one of Egypt’s two liquefaction plants in Idku and Damietta. Apart from gas, energy talks are likely to encompass electricity grid connection projects as Cyprus, Egypt and Greece approved routes for linking up their power grids — a USD 4 bn project.

Basic Materials + Commodities

Centamin’s production from Sukari gold mine rises 14% y-o-y in 1Q2018

Preliminary gold production from the Sukari gold mine rose 14% y-o-y in 1Q2018 to 124.3 ounces, Centamin announced yesterday (pdf). Despite production during quarter coming in “lower than planned due to the transitional zone of the open pit delivering lower than expected grades,” the company is maintaining its target of producing 580k ounces of gold from Sukari in 2018, CEO Andrew Pardey commented.

Egyptian Countryside Co. to tender 800k feddans this year

The Egyptian Countryside Development Company is planning to tender 800k feddans this year as part of the 1.5 mn feddans project, CEO Ater Hanoura tells Al Masry Al Youm.

Health + Education

Saudi German Hospital Group signs with Al Hanove Travel to promote medical tourism

The Saudi German Hospitals Group (SGH) has signed an MoU with Al Hanove Travel, a subsidiary of Saudi Arabia’s Al Tayyar Travel Group, to promote medical tourism at its facilities in Egypt, Al Shorouk reports. Egypt has been working to promote its burgeoning medical tourism sector through the Tour n’ Cure hepatitis C medical tourism program and natural treatments at the Siwa Oasis. The government is currently working to begin issuing new visas specifically for medical tourism.

Real Estate + Housing

Golden Pyramids Plaza to issue USD 60 mn in corporate bonds

Golden Pyramids Plaza’s board has agreed to issue a second tranche of USD 60 mn under a USD 400 mn bond program, according to a company statement. This comes only days after Orascom Construction Industries (OCI) reportedly requested that the Financial Regulatory Authority (FRA) stop Golden Pyramids Plaza from selling corporate bonds until it repays OCI and Consolidated Contractors International c. EGP 305 mn in damages awarded by 2015 arbitration ruling. FRA had said it was considering the move.


Tourism Ministry to relaunch Papyrus Private Equity Tourism fund, to issue tender for new promotional campaign

The Tourism Ministry is relaunching the Papyrus Private Equity Tourism fund to help finance struggling hotels and tourism-related businesses, Minister Rania Al Mashat told reporters last week. The ministry will work with state-run Ayadi Company for Development and Investment, which had established the EGP 50 mn fund back in 2016 to revitalize the battered tourism industry. El Mashat, who announced the ministry’s plans to help bolster the resurgent sector, said that it would issue a tender for PR companies to manage Egypt’s tourism promotional campaigns abroad in August, after its existing contract with JWT expires, Ahram Gate reports. This apparently would not include China, as the ministry plans to sign an MoU with Huawei to help promote tourism to Egypt there, according to Al Shorouk.

Other Business News of Note

Oriental Weavers targets 8% export revenue growth in 2018

Oriental Weavers is targeting 8% growth in its export revenues in 2018, according to a bourse filing (pdf). The target growth is based on new export orders from customers in new and existing markets. The company is also expanding in Africa “through securing a new order from a big South African retailer,” and entering new markets.

Egypt Politics + Economics

FRA targets growing insurance industry share of GDP to over 1% in five years

The Financial Regulatory Authority (FRA) is planning to grow the insurance industry’s contribution to GDP to over 1% in five years, according to Youm7. FRA hopes to double insurance premiums to EGP 50 bn by 2022, up from EGP 24 bn. The authority’ strategy also targets raising the sector’s investments to EGP 150 bn by 2022, up from EGP 86 bn last year. It also wants to see the aggregate size of insurance funds reach EGP 100 bn from a current EGP 60 bn. The strategy, as we noted last week, would see FRA take full control of the sector with an eye towards growing the SMEs insurance sector. These would be done through amendments to the Insurance Act.

Court of Cassation orders retrial in NGO foreign funding case

The Court of Cassation has overturned jail sentences against 16 NGO workers and ordered a retrial of the notorious 2013 “foreign funding case,” Ahram Online reports. The defendants were charged with operating an NGO without the necessary approvals and receiving illicit foreign funding. Most of the foreign defendants, including at least 15 Americans, were tried in absentia after being allowed to leave the country in 2012. The case has caused tensions between the US in Egypt.

On Your Way Out

Google is paying homage today to late Egyptian actor Omar Sharif on what his would-be 86th birthday. Sharif — who earned a degree in mathematics and physics from Cairo University — began his acting career in Egypt in the 1950s, but was catapulted to international fame following his role in the 1962 film Lawrence of Arabia. In addition to several Egyptian movies, Sharif also starred in Doctor Zhivago and Funny Girl, earning three Golden Globe awards and one Oscar nomination.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6281 | Sell 17.7281
Buy 17.63 | Sell 17.73
EGP / USD at NBE: Buy 17.57 | Sell 17.67

EGX30 (Thursday): 17,411 (-0.6%)
Turnover: EGP 2.2 bn (91% ABOVE the 90-day average)
EGX 30 year-to-date: +15.9%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 0.6%. CIB, the index heaviest constituent ended up 0.4%. EGX30’s top performing constituents were GB Auto up 8.2%, Pioneers Holding up 4.8%, and Egyptian Aluminum up 3.1%. Thursday’s worst performing stocks TMG Holding down 5.8%, Porto Group down 5.0%, and Egyptian Iron and Steel down 4.5%. The market turnover was EGP 2.2 bn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +61.7 mn
Regional: Net Long | EGP +56.3 mn
Domestic: Net Short | EGP -118.0 mn

Retail: 51.9% of total trades | 52.5% of buyers | 51.4% of sellers
Institutions: 48.1% of total trades | 47.5% of buyers | 48.6% of sellers

Foreign: 32.3% of total | 33.7% of buyers | 30.9% of sellers
Regional: 12.2% of total | 13.5% of buyers | 10.9% of sellers
Domestic: 55.5% of total | 52.8% of buyers | 58.1% of sellers

WTI: USD 63.39 (-0.05%)
Brent: USD 68.62 (-0.04%)

Natural Gas (Nymex, futures prices) USD 2.71 MMBtu, (+0.48%, May 2018 contract)
Gold: USD 1,338.70 / troy ounce (-0.10%)

TASI: 7,975.45 (+0.09%) (YTD: +10.37%)
ADX: 4,665.24 (+1.35%) (YTD: +6.07%)
DFM: 3,082.13 (+0.36%) (YTD: -8.54%)
KSE Weighted Index: 415.78 (+1.52%) (YTD: +3.58%)
QE: 8,936.77 (+1.76%) (YTD: +4.85%)
MSM: 4,827.89 (+0.14%) (YTD: -5.32%)
BB: 1,287.41 (+0.23%) (YTD: -3.33%)

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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.

03 May (Thursday): Egypt’s Emirates NBD PMI reading for April released.

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).

17 May (Thursday): CBE’s Monetary Policy Committee meeting.

15-17 June (Friday-Sunday): Eid Al Fitr (TBC), national holiday (Look for possible Monday off given the first day falls on a Friday).

28 June (Thursday): CBE’s Monetary Policy Committee meeting.

16 August (Thursday): CBE’s Monetary Policy Committee meeting.

21-25 August (Tuesday-Saturday): Eid Al Adha (TBC), national holiday.

04-05 September (Tuesday-Wednesday): Euromoney Egypt Conference 2018, Cairo.

11 September (Tuesday): Islamic New Year (TBC), national holiday.

27 September (Thursday): CBE’s Monetary Policy Committee meeting.

06 October (Saturday): Armed Forces Day, national holiday.

15 November (Thursday): CBE’s Monetary Policy Committee meeting.

20 November (Tuesday): Prophet’s Birthday (TBC), national holiday.

22 November (Thursday): US Thanksgiving.

25 December (Tuesday): Western Christmas.

27 December (Thursday): CBE’s Monetary Policy Committee meeting.

01 January 2019 (Tuesday): New Year’s Day, national holiday.

07 January 2019 (Monday): Coptic Christmas.

25 January 2019 (Friday): Police Day, national holiday.

25 April 2019 (Thursday): Sinai Liberation day, national holiday.

28 April 2019 (Sunday): Easter Sunday, national holiday.

29 April 2019 (Monday): Easter Monday, national holiday.

01 May 2019 (Wednesday): Labor Day, national holiday.

06 May 2019 (Monday): First day of Ramadan (TBC).

05-06 June 2019 (Wednesday-Thursday): Eid El Fitr (TBC).

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