Wednesday, 11 April 2018

MNHD looking to acquire or merge with SODIC

TL;DR

What We’re Tracking Today

THE story of what was a relatively quiet news day is, without doubt, Madinet Nasr Housing & Development’s (MNHD) announcement that it is opening dialogue to either acquire or merge with SODIC — a transaction which could very well reshape the real estate sector and could potentially be among the biggest upcoming M&As. So far, we’re only hearing from MNHD, and we should be seeing a response to the announcement from SODIC sometime this week. Full details are in the Speed Round, below.

Russian flights are finally here: The first direct flight between Russia and Egypt in over two years will take off from Moscow’s Sheremetyevo International Airport tonight and will land at 12:25am in Cairo International Airport,according to Russian carrier Aeroflot. EgyptAir’s first flight will take off at 9:35am CLT to Moscow’s Domodedovo Airport tomorrow morning.

Not ones to simply let something good happen without a fuss, Russia has sent what we’re hoping will be its final security team to do a sweep of security procedures yesterday, according to Ahram Gate. Egypt’s national carrier will run three flights a week to Russia until the World Cup in June, where it has scheduled additional flights.

Russians are returning to a very different tourism market than when they left. Years of haggling on airport security coincided with tourism largely picking up, particularly from Germany, the Ukraine and China.

This comes as the Russian ruble continues to drop, after the country was hit by fresh US sanctions on Friday over suspected involvement in the 2016 election that brought Donald Trump to power. That coupled with an escalation in the situation in Syria has also pressured Russian stocks, which “suffered their worst session in four years,” the FT says.

Are Saudi’s oil production cuts going to hit us where it hurts — our budget deficit? Saudi Arabia apparently wants to see oil prices get as high as USD 80 per bbl, sources who met with Saudi officials over the past month tell Bloomberg. The move, which has some in OPEC worried, comes as the kingdom looks to finance expensive domestic reforms, keep its head above water in Yemen, and get a high valuation for an upcoming Aramco IPO. Egypt’s FY2018-19 budget assumes an oil price of USD 67 per bbl and is planning to slash fuel subsidies by 26% y-o-y to EGP 89.08 bn (more on that in the Speed Round). With crude oil futures already at USD 70.21 per bbl, these increases could make it harder for the government to hit its target of lowering the budget deficit to 8.4% of GDP next fiscal year.

Will the Qatar beef play out in the international bond market? Right off the heels of Egypt’s successful USD 2.46 bn eurobond issuance this week — the country’s last one of the year (more on that in the Speed Round) — regional rivals Saudi Arabia and Qatar are heading to the international bond market with their respective issuances. It’s looking like Saudi will beat Qatar to the punch, with orders for the USD 11 bn three-tranche offering topping USD 28 bn, sources tell Bloomberg. Saudi is marketing seven-, 12- and 31-year notes at a spread of 140 bps, 175 bps, and 210 bps respectively. “It is a clever move on the part of Saudi Arabia to come before Qatar,” said Hakki Kalsen, a portfolio manager for emerging market debt at Union Investment Privatfonds in Frankfurt. “Issuing now, Qatar will get a lower order book, which will put them in a less competitive place,” meaning Qatar may have to offer generous pricing to attract large demand, a fund manager told Reuters.

The regional aggression surrounding Qatar is also playing into a potential agreement that could see Doha invest in Exxon Mobil’s US gas resources, people close to the matter tell WSJ. Although Qatar’s financing would be of “significant strategic importance,” Exxon is aware that it is walking across a regional political landmine, particularly as the company does not wish to alienate the Arab Quartet. The investment talks surfaced as US President Donald Trump took a softer tone with Qatar, praising Doha for its anti-terrorism efforts during meeting with Emir Tamim bin Hamad Al Thani yesterday, which the WSJ reads as a reflection of concerns that further alienating Qatar will push it into Iran’s sphere of influence,

China’s President Xi Jinping sang all the right tunes for markets in his Tuesday speech, promising to open the country further and lower import tariffs, Reuters reports. Xi said China will widen market access for foreign investors, addressing a key complaint of the US, which has ratcheted its rhetoric and threatened bns in tariffs, driving markets to fear an imminent trade war over the past week.

US President Donald Trump tweeted that he was “very thankful for President Xi of China’s kind words on tariffs and automobile barriers…also, his enlightenment on intellectual property and technology transfers. We will make great progress together!” (Tap or click here for Martin Wolf’s piece for the FT on how “US-China rivalry will shape the 21st century”).

Global financial markets rose yesterday for the fifth consecutive day in response to the news, with fears of a full-blown trade war now dissipating, according to Reuters. “The pan-European FTSEurofirst 300 index rose 0.87%…Emerging market stocks rose 1.05%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.24% higher.”

On Wall Street, the S&P 500 gained 1.67%, while Nasdaq rose 2.07% at the end of yesterday’s session. Tech stocks gave the S&P 500 its “biggest boost,” the newswire also says, adding that Facebook in particular “added the most gains to the S&P 500, rising 4.5% after CEO Mark Zuckerberg began his testimony before Congress…in an attempt to blunt possible regulatory fallout from the privacy scandal engulfing his social network.”

Meanwhile, shake ups in the Trump administration continue as homeland security adviser, Tom Bossert, will resign at the request of new National Security Adviser John Bolton, Bloomberg reports. The administration sent a list of five nominations for government positions to the Senate on Monday, which includes Washington Institute for Near East Policy director David Schenker, who is nominated to become Assistant Secretary of State for Near Eastern Affairs — a post held by former ambassador to Egypt Anne Patterson, who was much-maligned for harboring Ikhwani sympathies.

US producer prices beat economists’ expectations on Tuesday, raising the expectation that the Federal Reserve will raise interest rates three more times this year, Reuters reports. Producer price index for final demand rose 0.3% last month, beating expectations of an increase of 0.1%.

In other miscellany worth noting this morning: The UAE took a big step on the region’s behalf towards gender parity by approving legislation guaranteeing men and women equal pay, Bloomberg reports. The move is the latest of the Emirates’ efforts to establish gender equality, including appointing women to leadership positions in state bodies.

Are gold-backed cryptocurrencies a way to calm anti-bitcoin Islamic sentiments? Dubai-based startup OneGram seems to think so, according to Reuters. Cryptocurrencies do not sit well with Islamic scholars, who generally see it as speculative and not-commodity backed.

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

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.

On The Horizon

French President Emmanuel Macron will reportedly visit Egypt in early May for talks with President Abdel Fattah El Sisi on bilateral relations and regional issues, according to Foreign Ministry sources.

Enterprise+: Last Night’s Talk Shows

Egypt’s successful EUR 2 bn eurobond issuance was the highlight of last night’s talk shows, which are slowly easing back into the flow of news after the long weekend.

The strong appetite for the offering reflects investors’ confidence in Egypt’s economic reforms, Finance Minister Amr El Garhy told Hona Al Asema’s Lamees Al Hadidi. Noting that the bonds carry the lowest yields Egypt has offered to date, El Garhy explained that the issuance should not be cause for concern as an added debt burden as long as the country is able to generate FX to meet its annual obligations.

The minister briefly commented on the continued decline of inflation rates (we have the low-down in Speed Round, below), reiterating that the government is hoping to bring inflation down to 13% or lower, if possible. He also had to remind viewers for the 1,000,000,000th time that easing inflation rates are not going to result in a drop in prices (watch, runtime: 7:51).

The magnitude of the impending fuel and electricity subsidy cuts remains under discussion within government, El Garhy said, refusing to dish out any details (we have more in Speed Round). An unsatisfied Lamees urged the minister for more transparency on subsidy cut plans to avoid leaving matters to the rumor mill’s mercy (watch, runtime: 2:13). One thing that is certain, the minister stressed, is that the government will introduce social protection measures as is customary when slashing subsidies (watch, runtime: 6:23). Yahduth fi Masr’s Sherif Amer repeated El Garhy’s statements and noted that the draft FY2018-19 state budget is not yet a fait accompli (watch, runtime: 1:25).

Cabinet prepares its next move in GERD talks: Prime Minister Sherif Ismail met yesterday with the ministers of foreign affairs and irrigation to discuss the results of the latest round of negotiations over the Grand Ethiopian Renaissance Dam (GERD), Cabinet spokesman Ashraf Sultan told Masaa DMC. Sultan remained tight-lipped on the details, but noted that the ministers are prepping for another sit-down (watch, runtime: 5:44).

Egypt is willing to contribute laborers to participate in Libya’s reconstruction process, Manpower Minister Mohamed Saafan said. Security apparatuses will be stringent about safeguarding the workers’ wellbeing while on the job, Saafan told Amin (watch, runtime: 4:01).

Egyptians abroad are now eligible to apply for the “Security” CDs, which carry a tenor of three years. Banque Misr Chairman Mohamed El Etreby phoned in to Masaa DMC to explain how Egyptian expats can apply for the CDs and the benefits they would receive (watch, runtime: 6:29).

 Meanwhile, drama brewed over Hani Sarie Eldin’s appointment as the Wafd Party’s new secretary general. The party’s deputy secretary general Tarek Tohamy claimed the procedures leading up to the vote violated the party’s bylaws, thereby nullifying Sarie Eldin’s appointment (watch, runtime: 5:36). Al Wafd’s deputy head Hossam El Kholy defended the appointment, saying that while a few members abstained from the vote, the election did not violate any bylaws (watch, runtime: 3:30). Party leader Bahaa Abu Shuka brushed off the entire issue, instead choosing to chew Al Hayah Al Youm’s Tamer Amin’s ear off about his plans to revive Al Wafd’s political activity (watch, runtime: 4:45).

Speed Round

Speed Round is presented in association with

M&A WATCH- MNHD wants to open talks on merger with, or acquisition of, SODIC: The board of directors of Madinet Nasr Housing & Development (MNHD) has given its chairman the go ahead to open talks with our friends at SODIC with a view to either acquiring the upmarket developer or merging the two companies, MNHD said in a regulatory filing yesterday (pdf).The proposed combination would bring together MNHD’s large land bank of over 9 mn sqm and its strong sales track record (having achieved net sales of EGP 5.0 bn in 2017) and “SODIC’s premium brand name and track record as a prominent real estate development in Egypt” with sales of EGP 5.5 bn in 2017, MNHD said. MNHD says the transaction would expand both firms’ client base “and expediting the monetization of the land bank through launches, sales, and execution.” If the transaction goes through, it would to the create one of the largest players in the Egyptian real estate sector.

MNHD has tapped EFG Hermes to advise on the transaction, while Zaki Hashem & Partners are serving as legal counsel, according to the statement.

Annual headline inflation rates dropped to 13.3% in March from 14.4% a month earlier, according to CAPMAS. Core inflation fell to 11.59% in March from 11.88% in February. EFG Hermes’ Mohamed Abu Basha noted that the drop “confirmed our view that seasonal factors — including the coming two months leading to Ramadan — as well as a potential fuel subsidy cut in July, will ease the pace of deceleration over the coming few months. On a monthly basis, inflation was up by the highest pace in four months, at 1.0%, driven largely by a 1.8% increase in food prices, as non-food inflation stood at 0.2%. Acceleration in monthly food inflation was driven primarily by seasonal factors and was centered mostly upon higher poultry, fish and vegetable prices; hence, not resembling any major pick-up in inflationary pressures, in our view.”

The headline figure is the lowest since May 2016 and falls squarely within the central bank’s target of 13%, plus or minus 3 percentage points, Bloomberg notes. Core inflation is at its lowest since April 2016. “The 11-12% level is expected to continue until the fourth quarter, when we might see a dip to 10% for one or two months before the rate rises again” to the same range, economist Reham El Desoki says. March’s drop was positive and in line with central bank expectations, CI Capital senior economist Hany Farahat told Reuters. “Although it’s not a steep fall from the previous month, it still leaves room for further monetary easing in my view,” Farahat added. Abu Basha also believes that another rate cut is possible in May.

BUDGET WATCH- More food subsidies, less spent on energy in FY2018-19: The government aims to reduce fuel subsidies by about 26% y-o-y to EGP 89.08 bn in FY2018-19, according to a government document referenced by Reuters. The budget also reduces electricity subsidies by almost half to EGP 16 bn from EGP 30 bn, the statement said. The substantial cut in electricity subsidies next year comes as the ministry plans to eliminate electricity subsidies by FY2020-2021. Egypt raised fuel and electricity prices by 50% and 42% respectively in July of last year, sending inflation shooting up. From what we’re hearing from MPs in the House of Representatives’ Budget Committee, these cuts are expected to come in one swoop. It is expected that these cuts would reduce budget costs by USD 2.4 bn (c. EGP 42 bn), says Reuters.

Food subsidies are set to move in the opposite direction, increasing 5% y-o-y to EGP 86.18 bn during the year, the newswire added. Overall, spending on social welfare and protection programs and commodity subsidies is expected to reach EGP 322 bn next fiscal year.

Export subsidies are also expected to see an increase in FY2018-19, according to Al Mal. These are expected to get as high as EGP 4 bn, up from EGP 2.6 bn in FY2017-18.

Power prices could rise by as much as 45% in July for highest-bracket consumers: The Egyptian Electricity Utility and Consumer Protection Agency (Egyptera) has reportedly finished drafting a new formula for power prices that are set to come into effect in July, Electricity Ministry sources tell Al Shorouk. The new scheme — a continuation of the government’s strategy to gradually phaseout power subsidies until they’re eliminated in FY2020-21 — sees prices rising within a range of 30-45%, from the lower- to the higher end of the consumption spectrum, with the top two tiers set to pay a higher price for power than its cost of production in order to partially cover the costs of subsidizing electricity for lower-income brackets. The increase breaks down as follows:

  • The 0-50 KW bracket will pay EGP 0.16 per KW, up 30% from EGP 0.13;
  • The 51-100 KW bracket will pay EGP 0.27 per KW, up 35% from EGP 0.22;
  • The 0-200 KW bracket will pay EGP 0.37 per KW, up 35% from EGP 0.27;
  • The 201-350 KW bracket will pay EGP 0.75, up 35% from EGP 0.55;
  • The 351-650 KW bracket will pay EGP 1.07, up 40% from EGP 0.75;
  • The 651-1000 KW bracket will pay EGP 1.68, up 35% from EGP 1.25;
  • The 1000+ KW bracket will pay EGP 1.95, up 45% from EGP 1.35.

That’s it for eurobonds in 2018, says the Finance Ministry: Egypt will not be issuing any more eurobonds this year, said Assistant Finance Minister for Capital Market Operations Khaled Abdel Rahman said on Tuesday. His statements follow Monday’s successful USD 2.46 bn EUR-denominated issuance of eight- and twelve-year notes at yields of 4.75% and 5.63%, respectively. “More than 70% of orders came from Europe, while 10% came from the US and the rest from the Gulf,” Abdel Rahman told Reuters. Monday’s bond issuance, which was 3.8x oversubscribed, brought in EUR 7.5 bn in orders from 350 investors from 35 different countries and followed a USD 4 bn three-tranche offering in February.

INVESTMENT WATCH- Raya partners with Italy’s Piaggio on EGP 100 mn tuk-tuk assembly plant: Raya Advanced Manufacturing Company will develop a EGP 100 mn light transport vehicle assembly plant in Egypt in partnership with Italy’s Piaggio, the company said in bourse filing on Tuesday (pdf). Under the new partnership, Raya will build a 10,000 sqm factory and establish after-sale services centers nationwide. The new plant is scheduled to begin production by mid-2018. Word of the Piaggio looking to assemble in Egypt emerged on Sunday, with reports that representatives of the Italian motor vehicle manufacturer had been looking for partners and financing for the project.

LEGISLATION WATCH- Parliament compromises on user data sharing in Ride-hailing Apps Act: A House of Representatives subcommittee charged with reviewing the Ride-hailing Apps Act amended yesterday the bill’s most controversial clause, scrapping a requirement that would have forced ride-hailing companies to store user data in Egypt and share them with the authorities. The sub-committee — which is made up of the heads of parliament’s committees on ICT, transportation, and national security — has instead made it mandatory for companies to handover data only as requested by authorities, Transportation Committee chair Hisham Abdel Wahed tells Al Shorouk. The move addresses the biggest complaint Uber and Careem representatives have made against the law, who said that the article violates user privacy and is not feasible to implement. The Egyptian Council of State itself had called the constitutionality of the article into question.

Gov’t approves of new amendments: The Ismail Cabinet approved the amendments, after it failed to address these concerns before submitting the bill to the House, as it rushed to legalize ride-hailing operations in Egypt in light of an Administrative Court ruling last month suspending licenses for Uber and Careem. Both companies had been given legal cover to operate until the law passes after the Court of Urgent Matters suspended the March ruling.

These recent victories for Uber in Egypt come as the company’s legal standing in other markets took a hit. The EU top court ruled on Tuesday that France is entitled to bring criminal proceedings against Uber’s local managers for running an illegal taxi service, Reuters reports. This latest case concerning Uber’s use of unlicensed drivers as part of its UberPOP service, follows one last year by the Court of Justice of the European Union, which classified the company as a transportation service and not a digital service.

LEGISLATION WATCH- House ICT Committee signs off on Cybercrimes Act clause imposing two-year jail sentence: The House of Representatives’ ICT Committee approved yesterday a clause of the Cyber Crimes Act imposing prison sentences of up to two years and fines of EGP 100k-300k fine on anyone who creates, manages, or uses a website or an online account aiming to commit or facilitate a crime, Al Shorouk reports. The committee had approved last month a clause of the legislation allowing the Prosecutor General to ban websites that publish content deemed criminal. Committee discussions of the draft law are expected to wrap up on Thursday, according to Youm7. The bill was introduced to the House in February, expanding the definition of online crime to include “spreading false news on Egypt,” which will apply to all media outlets.

Elsewhere in Parliament, the Local Administration Committee is expected to complete its discussion of the bill to set up the Supreme Authority for Upper Egypt Development today, Ahram Gate reports. Cabinet had signed off on the legislation — which would mandate the authority with drafting a holistic strategy for the economic, social, and urban development of regional areas — in February.

The House’s Industry Committee has also added the Industrial Development Act to the next plenary session’s agenda for a final vote after completing its review of the bill yesterday, Al Mal reports. The bill is expected to give the Industrial Development Authority more autonomy over its budget, as well as more power to allocate state-owned land to industry.

Egypt and Cyprus will be ready to sign contracts to establish a natural gas pipeline “in the near future,” Cypriot Foreign Minister Nicos Christodoulides said yesterday, according to Cyprus Mail. The different parties involved “are in the process of negotiating the terms of the natural gas sale and the purchase agreements,” according to the minister. Christodoulides arrived in Cairo yesterday for a meeting with Foreign Minister Sameh Shoukry, during which the two also discussed “security challenges” — code for Turkish aggression — Cyprus is facing in its gas exploration activity in the Mediterranean, according to a ministry statement. Cypriot Energy Minister Giorgos Lakkotrypis had said last month that Turkey’s move to block Cyprus’ gas drilling would not deter his country from pressing ahead with plans for East-Med gas exploration.

The Arab Fund for Economic and Social Development has pledged three grants of USD 2.8 in total to support development projects in Sinai, according to an Investment Ministry statement. This comes as Minister Sahar Nasr meets with the heads of regional financial institutions in Jordan to discuss financing commitments for Sinai. Nasr has already signed contracts for funding from the Islamic Development Bank Group and a USD 100 mn loan from the Kuwait Fund for Arab Economic Development.

EARNINGS WATCH- Qatar National Bank Alahly reported a 27% y-o-y jump in net profits to EGP 1.6 bn in 1Q2018, up from EGP 1.26 bn the previous year, according to a bourse filing (pdf).

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Egypt in the News

Egypt is one of several countries in the region that UAE investors have got their eyes on, according to Khaleej Times. “‘We see great potential in Egypt where laws and regulations are improving with greater clarity in investment protection,’” said UAE International Investors Council (UAEIIC) Secretary General Jamal Al Jarwan. “‘In three months’ time, there will be a lot more changes coming in Egypt. UAE investors have already invested USD 10 bn in India and USD 6.5 bn in Egypt and there will be much more investment going in these countries.”

Cairo’s desert land reclamation project is seen as one of the best openings for Italy’s renewables and sustainability sector, officials from Italian trade promotion agency ICE tell AnsaMED. The project, which includes setting up irrigation systems using renewable energy, gives investment chances for Italian biogas, photovoltaic, LED lighting, and eco panel manufacturing firms, particularly since Italian technology is “very well perceived” in Egypt, the official says. Italian companies are finding openings in other sustainable projects in Egypt, including water purification and fish farming.

  • President El Sisi should “prioritize reforms to end serious human rights violations” during his second term in office, Human Rights Watch has said.
  • Egypt’s political system is a “pressure cooker” that will “explode in everyone’s faces” at some point, Vivienne Matthies-Boon writes for Open Democracy.
  • UNESCO’s successful relocation of the Abu Simbel Temple in the 1960s encouraged a global preservation campaign to protect several other heritage sites, Laura Kiniry writes for BBC.
  • Dar Al Ifta issued a ban against the “Blue Whale” social media game after a sudden uptick in teenage suicide was linked to it, Face2Face Africa says.
  • Omani tennis player Fatma Al Nabhani is banking on the ITF Pro Circuit Sharm El Sheikh Tournament to secure her second title of the year, Times of Oman reports.

Worth Reading

It’s concern for our pockets rather than the environment that will instigate the switch to electric cars, Alexander Landia writes for the Financial Times. Electric cars are proving more cost-effective, Landia says, arguing that they can be cheaper to operate than their diesel counterparts (especially for high-mileage drivers such as taxis) and are expected to have better resale value in the long run, especially with more car makers entering the game. “Manufacturers such as Volvo and Peugeot are committing to offering hybrid versions of all their models. Volkswagen and BMW are developing electric-only cars…As more electric vehicles are sold, residual values of diesel and petrol cars will slide even more.”

Emerging markets are leading the way in the switch to electric cars, with China— the world’s largest market for electric cars since 2015 — spearheading the movement. Chinese manufacturers such as Geely “already have electric vans and buses in the market,” Landia says, because against popular expectation, “commuters in countries such as China will electrify more quickly. Small, low-powered electric vehicles, including two and three-wheelers, are ideal candidates for electrification because their light weight means they can run on comparatively cheap batteries.” Egypt has already caught the scent, with Revolta now building electric vehicle charging stations around the country and introducing the first batch of Tesla cars to the market this month. Trade and Industry Minister Tarek Kabil also issued a decision last month that allows imports of used electric cars that are less than three years old.

Worth Watching

Egyptian filmmakers are up against strict moral boundaries today in a country once known as the “Hollywood of the Middle East,” according to a report from the BBC. Director Hala Khalil says she has had to cut parts of her films for not passing the watchful eyes of censors. She attributes the tougher restrictions on racy scenes to the influence of the more conservative GCC on Egyptian filmmakers during the 1970s. “Dealing with the audience started to be on ethical and religious grounds, not on an artistic one,” says Khalil (watch, runtime: 02:03)

Diplomacy + Foreign Trade

President Abdel Fattah El Sisi talked regional developments and anti-terror cooperation with Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan in Cairo yesterday, according to an Ittihadiya statement. Al Nahyan’s two-day visit to Egypt, which wraps up today, coincided with the launch of the “Khalifa-3” joint maritime drills in the Red Sea, the Armed Forces said yesterday.

The pan-African Continental Freetrade Zone (CFTZ) will take around two years to come into full effect, Trade and Industry Ministry spokesman Yasser Gaber says, Al Shorouk reports. According to Gaber, the 44 signatories will need time to reach consensus on the fine print. Minister Tarek Kabil had said that the next round of talks would tackle the timeframe for implementation, as well as policies on investment, competition, and trademark enforcement. Kabil signed the agreement last month, which hopes to reduce and eventually eliminate customs duties between the zone’s member states.

Energy

Electricity Ministry holds talks to finance USD 500 mn electricity grid connection project with Sudan

The Electricity Ministry is planning to hold talks with 10 regional and international finance institutions to fund a 300 MW electricity grid interconnection project between Egypt and Sudan, which estimated to cost USD 500 mn, according to sources. The organizations the ministry is eyeing include the International Finance Corporation, the European Bank for Reconstruction and Development, the African Development Bank, the Kuwait Fund for Arab Economic Development, and HSBC. Electricity Minister Mohamed Shaker and his Sudanese counterpart Moataz Moussa agreed earlier this week to hold more meetings and complete the necessary arrangements to launch the project in the coming period. Egypt is currently working on an interconnection project with Saudi Arabia and is looking to set up another with Cyprus and Greece.

Egyptian-Chinese-Saudi-Spanish consortium breaks ground on four USD 180 mn solar plant in Benban

A consortium of four unnamed companies from Egypt, China, Saudi Arabia, and Spain broke ground on four solar power plants in the Benban solar power park worth a combined USD 180 mn, Youm7 reports. The plants will produce a combined 186 MW of power. The first 50 MW solar facility in the USD 2.8 bn Benban park was inaugurated in March.

Basic Materials + Commodities

Romania Destroys Contaminated Potatoes from Egypt

Romanian authorities have destroyed 1,100 kg of Egyptian potatoes after tests confirmed they were contaminated with brown rot disease, the Associated Press reports. The affected potatoes, which can contaminate water and soil, could have had an “extremely severe” economic impact if they infested water supplies, according to Romania’s agriculture ministry. This is the second Egyptian potato shipment to test positive for brown rot, after Russia’s agricultural quarantine authorities flagged two shipments last month, claiming they were contaminated. The Agriculture Ministry came out with a statement saying it would investigate the farms where the shipments came from and warned it may ban those exporters from selling goods abroad.

Health + Education

October Pharma targets exports expansion in Africa, Turkey

October Pharma is investing EGP 30 mn to upgrade its production lines in order to increase exports this year, according to CEO Ahmed Zaghloul. The company will work on growing sales in existing markets such as Russia, as well as entering new markets in Africa and Turkey.

Real Estate + Housing

ODE announces its first housing project in Cairo

Orascom Development Egypt (ODE) is developing a 1,000-feddan land plot in West Cairo for its first housing project in the capital, the company announced. The project will be developed in partnership with the New Urban Communities Authority (NUCA) on a revenue sharing basis. ODE will set up a company named Orascom Real Estate of which it will own 70%, with the remainder of the issue capital owned by Samih Sawiris. This comes as part of the provisions of the settlement agreement concluded between Orascom Housing Communities and NUCA. ODE says all agreements related to the partnership with NUCA should be finalized within a month as part of the settlement agreement.

NUCA to issue tender for 2,000 homes in the new capital

The New Urban Communities Authority is planning to issue a tender for the development of 2,000 homes in the new capital’s third residential district, according to government sources. The authority is hoping to net EGP 3 bn from sales in the project, and may increase the development’s scope by another 500-1000 homes, sources added. The project is part of 25,000 homes slated for construction in the 1,200-feddan phase one development of the new capital.

Automotive + Transportation

Transport Ministry looking to borrow EUR 50-55 mn for Abu Qir-Alexandria rail line upgrade

The Transport Ministry is in talks with international finance institutions for a EUR 50-55 mn loan to finance upgrades to the 22-km Abu Qir-Alexandria rail line, sources tell Al Mal. The European Bank for Reconstruction and Development is reportedly among the banks the ministry is speaking to. After the upgrades, the ministry will team up with the Housing Ministry to transform the Abu Qir-Alexandria line into an advanced electric train line, according to National Railway Authority head Sayed Salem.

Banking + Finance

FRA approves establishment of SME-focused Fund-of-funds

The Financial Regulatory Authority (FRA) is allowing the establishment of SME-focused fund-of-funds, FRA boss Mohamed Omran said on Tuesday, according to Al Shorouk. Fund-of-funds typically invest in other funds or in entire portfolios as opposed to one particular asset. These vehicles are increasingly being used channel funding to SMEs through venture capital and private equity funds. Fund-of-funds in Egypt will be allowed to invest in portfolios of SME-focused funds and NGOs engaged in SME financing, said Omran.

Alex Bank, Jordan Post agree to facilitate remittances

The Bank of Alexandria and Jordan Post have signed an agreement to facilitate wireless cash transfers to Egypt, Al Mal reports.

On Your Way Out

International media have joined Google in paying tribute to late Egyptian actor Omar Sharif on his would-be 86th birthday. The Independent has a video with five facts about the “Egyptian icon who conquered the world screen.” Did you know that the Golden Globe winner and Oscar nominee was also once ranked among the world’s top 50 players of contract bridge? (watch, runtime: 00:35). Doesn’t surprise us considering he could give James Bond a run for his money in a tux.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.6272 | Sell 17.7272
EGP / USD at CIB:
Buy 17.63 | Sell 17.73
EGP / USD at NBE: Buy 17.57 | Sell 17.67

EGX30 (Tuesday): 17,697 (+1.7%)
Turnover: EGP 1.6 bn (39% ABOVE the 90-day average)
EGX 30 year-to-date: +17.8%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session up 1.7%. CIB, the index heaviest constituent ended up 2.0%. EGX30’s top performing constituents were GB Auto up 4.6%, AMOC up 4.6%, and Palm Hills up 3.9%. Yesterday’s worst performing stocks were TMG Holding down 2.6%, Arab Cotton Ginning down 0.9%, and Global Telecom down 0.6%. The market turnover was EGP 1.6 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +62.1 mn
Regional: Net Short | EGP -29.5 mn
Domestic: Net Short | EGP -32.6 mn

Retail: 56.4% of total trades | 52.8% of buyers | 59.9% of sellers
Institutions: 43.6% of total trades | 47.2% of buyers | 40.1% of sellers

Foreign: 28.4% of total | 30.4% of buyers | 26.4% of sellers
Regional: 14.3% of total | 13.4% of buyers | 15.2% of sellers
Domestic: 57.3% of total | 56.2% of buyers | 58.4% of sellers

WTI: USD 65.52 (+0.02%)
Brent: USD 70.94 (-0.14%)

Natural Gas (Nymex, futures prices) USD 2.67 MMBtu, (+0.34%, May 2018 contract)
Gold: USD 1,343.60 / troy ounce (-0.17%)

TASI: 7,951.42 (-0.30%) (YTD: +10.03%)
ADX: 4,711.38 (+1.00%) (YTD: +7.13%)
DFM: 3,089.80 (+0.25%) (YTD: -8.32%)
KSE Weighted Index: 415.78 (+1.52%) (YTD: +3.58%)
QE: 9,007.23 (+0.79%) (YTD: +5.68%)
MSM: 4,787.46 (-0.84%) (YTD: -6.11%)
BB: 1,287.96 (+0.04%) (YTD: -3.29%)

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Calendar

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).

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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