Tuesday, 17 April 2018

Trump wants Egyptian troops in Syria to cover US withdrawal

TL;DR

What We’re Tracking Today

It’s a very busy news morning at home and abroad, ladies and gentlemen.

Trump administration wants Egypt to send troops to Syria as part of an Arab military force that would cover America’s withdrawal after defeat of the Daeshbags, the Wall Street Journal reports in an exclusive citing senior US officials. The troops would be deployed in the northeastern part of the country, the story says, and US President Donald Trump’s new national security advisor has recently called acting intelligence chief Abbas Kamel “to see if Cairo would contribute to the effort.” Trump himself appears to be pushing the drive to have troops from the Arab world replace US soldiers in Syria, and the administration has asked Saudi Arabia, the UAE and Qatar for financial backing of the Arab force.

Egypt is at center stage of the plan in the usual formula of “others send [funds], Egypt sends soldiers,” but the WSJ notes at length: “Egypt’s willingness to support a new effort in Syria is far from clear. With one of the largest armies in the Middle East, Egypt is preoccupied with a fight against the local branch of Islamic State in the Sinai Peninsula and with securing the country’s vast desert border with Libya, which is ruled by a patchwork of militias. Egypt rarely has deployed troops abroad since the country sent more than 30,000 soldiers to join the American-led coalition fighting Iraq in the 1991 Gulf War, and its government sometimes has made statements supporting the authorities in Damascus, though it says it hasn’t taken sides in the conflict. If Egypt didn’t want to send troops, it could help in other ways, such as by training Syrian fighters outside of their country and with logistics, some experts suggest.”

Closer to home, the Sisi administration has unveiled an ambitious USD 2 bn drive to begin reforming the nation’s education program. Education Minister Tarek Shawky hit the airwaves last night to sell the program to the nation, and Sahar Nasr is being tapped to have the World Bank expand its already-pledged funding for education reform. We have a deep dive in today’s Spotlight (after Speed Round), and if you as a business or finance professional have spent five minutes bemoaning the difficulty of finding qualified staff in a nation with double-digit youth unemployment, you’ll want to start paying attention to this story.

Meanwhile, Finance Minister Amr El Garhy, Investment Minister Sahar Nasr and Central Bank Governor Tarek Amer are in DC to attend the meetings. El Garhy is set to meet with IMF Managing Director Christine Lagarde and Executive Director Hazem El Beblawi, a number of MENA finance ministers and executives of top companies including Coca Cola and General Electric, according to a Finance Ministry statement. They will also take part in a round table discussion with World Bank Managing Director Jim Yong Kim, among others, about combating poverty and promoting healthcare.

Delegations from China and six African countries are in town today to attend the inaugural session of the China-Africa Cooperation Forum, Ahram Gate reports.

It’s Global Growth Day, ladies and gentlemen: The IMF will be releasing its the World Economic Outlook report today as the IMF and World Bank’s Spring Meetings kick off. Chapters 2, 3, and 4 of the report are already out and focus on labor, employment in manufacturing, and inequality. The full document is set to be released at 3pm CLT today.

Meanwhile, the Institute of International Finance (IIF) released its 2018 forecast for world economic growth, with the IIF seeing the world economy expanding 3.5% this year and 3.4% in 2019. This is the strongest economic growth expectation since 2010 and comes despite rising global trade tensions, according to Bloomberg.

Emerging market economies are forecast to grow at a faster pace in 2019 than developed markets. The IIF sees growth in developed markets dropping to 2.2%, while emerging markets will see a slight acceleration to 5.1%. The divergence will be the largest since 2013. Africa and the Middle East are seen to grow 2.5% in 2018 and 2.9% in 2019.

Egypt will grow the fastest among Africa-Middle East countries reported in the forecast. Growth is expected to reach 5.1% in 2018, on par with the EM average and is close to the Finance Ministry’s estimate in FY2017-18 of 5.2%. The IIF sees growth in Egypt hitting 5.4% in 2019. The FY2018-19 budget sets a GDP growth target of 5.8%.

The IIF sees the US Federal Reserve raising interest rates three more times this year and assumes that the fiscal stimulus will add 30 bps to US economic growth in 2018.

Also on the international growth front: China reported overnight that its GDP grew 6.8% in the first quarter compared to the same period a year ago, meeting analyst expectations, Bloomberg reports.

Meanwhile, other stories worth a moment of time during your commute this morning:

Netflix proves that people are simply hungry for good content, beating Wall Street expectations as it added 7.4 mn new subscribers (5.5 mn of them internationally) this past quarter, the WSJ reports. The company, its CEO now says, is spending like a media company, not a tech firm.

Cyberwar: The US and UK are warning that Russia is targeting western infrastructure “with a series of intrusions that threatened home and business routers” of mn of people, the Financial Times says.

What We’re Tracking This Week

Our friends at AmCham are hosting a breakfast meeting and visit to the National Museum of Egyptian Civilization in Fustat on Thursday. The visit will include an exclusive viewing of the newly inaugurated exhibition hall: “Egyptian Crafts through the Ages.” Speakers will include Antiquities Minister Khaled El Anany and Mostafa Waziry, the director-general of the Supreme Council of Antiquities. Members and their guests can register here.

On The Horizon

Next week is also shaping up to be rather busy. Among the events we’re noting:

  • Pride Capital, Egypt’s first fintech-focused accelerator and an affiliate of our friends at Pharos, is hosting a workshop titled “Financing Small Merchants” on Monday, 23 April at the Greek Campus.
  • Our friends at Renaissance Capital are holding its third annual Egypt Investor Conference in Cape Town on 24-25 April.
  • GERD talks: Egypt has invited Sudan and Ethiopia to another round of negotiations on the Grand Ethiopian Renaissance Dam in Cairo on 20 April.
  • The Egyptian-Sudanese Business Council will hold its first meeting this coming Saturday.
  • The seventh edition of the El Gouna International Squash Open kicks off on Friday and runs until 27 April.

Enterprise+: Last Night’s Talk Shows

It was a bland night of miscellany on the airwaves, with the nation’s talking heads discussing cabinet salaries, the state budget, and Saturday’s joint airstrikes on Syria.

The House of Representatives approved yesterday a bill that sets a cap on the monthly net salaries of cabinet ministers at EGP 42,000. Parliamentary Affairs Minister Omar Marwan told Kol Youm’s Amr Adib that the bill does not give ministers a raise, but just makes official the amount they receive at the end of each month. He explained that prior to the bill, ministers received the same amount but through two separate payments (base salary of EGP 22,000 and bonuses), stressing that the decision does not in any way add to the state’s financial burden (watch, runtime: 3:39).

Bread prices have not increased in the FY2018-19 budget, House Budget Committee chair Yasser Omar told Adib. He told Adib, however, that fuel and power subsidy cuts are not really a surprise (watch, runtime 2:02).

Meanwhile, US State Department Middle East spokesperson Nathan Tek defended the joint Saturday airstrikes launched by the US, UK, and France on Al Hayah Al Youm. He got into a heated argument with host Khaled Abu Bakr, who said the “tripartite attack” was carried out without UN approval and before investigations could discern whether or not the regime had in fact launched a chemical attack to warrant retaliatory action (watch, runtime: 24:28).

Egypt, Saudi, the UAE, Bahrain, and Jordan are now a “nucleus of power, capable of changing the face of the Arab World,” a very proud Amr Adib told his audience, as he aired footage of President Abdel Fattah El Sisi and other regional leaders at the wrap-up of the Gulf Shield-1 joint military drill (watch, runtime: 4:00).

Speed Round

Speed Round is presented in association with

Future investments in Egypt from Nissan, Toyota ride on the Automotive Directive: Japanese automakers Nissan and Toyota are waiting on the Automotive Directive to decide on how to expand their investments in Egypt, economic counselor at the Japanese embassy in Cairo Hiro Ichiba said. The two companies would invest more here are both considering expanding assembly operations, but cannot take decisions without knowing the government’s policy direction, according to Ichiba. He did not provide further details on the expected size or nature of the companies’ new investments.

A number of automakers have recently announced plans to launch or expand production in Egypt in anticipation of the Automotive Directive, which is expected to be issued sometime in 2018. Last month, we learned that Volkswagen has reportedly already tapped three Egyptian manufacturers to become part of its global parts supply chain to serve demand at assembly facilities across the region. French multinational group Renault is also said to be in talks with potential local partners over a similar-style agreement, while Spanish automaker SEAT is expected to begin assembly operations in Egypt by 2020 through its local agent Kayan.

What is the automotive directive? It’s a proposal that would level the playing field for domestic assemblers against what they claim is an unfair trade advantage that favors imports from the EU, Turkey and Morocco. Under the proposal, Egypt would maintain a 10% customs duty on non-European car imports — and impose a 30% tax on all imports including the imports of kits for local assembly. Domestic assemblers that meet local content, volume or export requirements would then get tax rebates or tax exemptions

Where does the directive stand? Last we heard, the proposed bill was still with a Trade Ministry-appointed German consultancy, which has had it since before the glaciers of the last ice age melted. We have eight months before EU car imports fall to zero.

The domestic automotive industry is running out of time. We’re about 258 days away from 1 January 2019. That’s when customs duties on European Union-assembled cars fall to zero, making fully assembled imports more cost competitive than those assembled in Egypt. The government has a choice to make: Does it want to move ahead with the automotive directive and save skilled jobs and investments worth bns? Or does it want to make nice with Germany, which has led the charge against the automotive directive to promote the interests of its own domestic auto industry? The cost of making nice: Factory shutdowns on 1 January 2019.

The unemployment rate dropped to 11.8% at the end of 2017 from 12.5% a year earlier, CAPMAS’ quarterly report showed. The gap between female unemployment rates and males’ remains high, with the unemployment rate for men registering 8.2% and that for women at 23.1%. Overall, the labor force grew by 1.9% y-o-y to 29.47 mn people, with the participation rate dropping to 45% by 2017’s end, compared to 46.6% in 2016. Youth unemployment rate registered 24.8% as of the end of 2017.

Where’s the job creation coming from? “In general, there are very clear improvements in the economy. The questions remain: how broad are these improvements and how many new jobs are being created?” said Pharos Holdings COO Angus Blair tells Reuters. “The PMI Survey has reported that the private sector in Egypt has seen a contraction in non-oil employment for about two years, so the question is where is the rise in employment coming from?” said Blair. Egypt’s PMI has declined for the past 29 months except for one.

UK-based institutional investors accounted for 40% of demand for Egypt’s EUR 2 bn bond issuance, our friend Youssef Beshay, senior banker at BNP Paribas in Egypt, tells Al Mal. The remainder of the issuance was split between EU investors, who accounted for 30%, US investors at 20%, and investors from the Gulf and Asia at 10%. The offering was 3.8x oversubscribed, attracting orders of EUR 7.5 bn from over 350 investors from 35 countries. BNP managed the eurobond along with Deutsche Bank, Alexbank Intesa Sanpaolo and Standard Chartered. The proceeds from the issuance have landed in Egypt, a senior finance ministry official confirmed to Youm7.

Shocking exactly no one, Telecom Egypt says it is not planning to sell its stake in Vodafone Egypt (VFE) any time soon: “Vodafone Egypt is a very good investment … A sale would only be considered if we reach a critical mass in the mobile market to the extent that we start cannibalizing on such investment,” Senior IR Director Sarah Shabayek tells Bloomberg in an interview, stopping short of getting into specifics. The state-run fixed-line monopoly holds a 45% stake in Vodafone Egypt, which had raised questions about conflict of interest after TE launched its own mobile phone service last year, putting it in direct competition with VFE. Shabayek brushed off the concerns, saying that there is no conflict since TE is “not privy to [Vodafone’s] plans during board meetings.”

So what’s next for TE? Shabayek said that TE intends to focus on growing its network of mobile subscribers and increasing its share of the market to as much as 15% by 2022, from 2% currently. TE also “wants its own network to cover 50% of the data traffic of its clients this year and is working to secure a USD 13 bn facility from a local banking consortium in order to finance network infrastructure upgrades.

Orascom Construction shareholders asked to approve capital reduction make dividend payment possible: Orascom Construction (OC) will paying dividends to shareholders for the first time since its dual listing on the Nasdaq Dubai and the EGX. The move comes despite the company holding an accumulated loss of USD 281.3 mn since the company formed, largely as a result of now-delivered projects in the US. The company, which has returned to profitability, plans to pay USD 30 mn through an accounting mechanism called a capital reduction of the share premium account. The company’s extraordinary general assembly will meet on 9 May to vote on the plan, according to a company statement (pdf).

Why, Enterprise. How does this nifty capital reduction business you speak of allow you to pay a dividend a retained loss? Glad you asked, but please bear these basics with us. On a listed company’s balance sheet, equity is determined through its share capital (issued capital), the share premium — the additional amount investors paid for their shares in excess of the par value — and retained earnings. OC shareholders are being asked to effectively transfer USD 281.3 mn in share premium to retained earnings. By subtracting OC’s accumulated losses on its balance sheet from its share premium, the company ends up flipping negative retained earnings to a positive and thus to make it possible to pay a dividend to shareholders as well as provide liquidity to support future dividends.

Leaders of Egypt’s finance industry talk interest rates and financial inclusion: Some of Egypt’s top finance industry figures sat down with The Banker Magazine to offer their take on everything from the success of the Sisi administration’s reform drive to monetary policy and financial inclusion. Among those appearing in the magazine’s April issue (pdf) are our friends CIB Chairman Hisham Ezz Al Arab and EFG Hermes CEO Karim Awad. In a nutshell, the piece relays the optimism the Egyptian banking and financial sector for the future.

On monetary policy: “We need [interest rates] to move about another 400 bps so credit can start to flow more easily,” Ezz Al Arab said. “Lower interest rates are needed now and this will happen naturally,” he added. EFG Hermes research, meanwhile, expects to see a further 300 bps reduction over the remainder of the year. “If that does happen then the stock market should rally as all companies with leverage on their balance sheet will see an [aggregate] 400 bps fall in the cost of financing that debt,” says Awad.

On financial inclusion: It is perhaps not surprising that of all the banking MDs interviewed, Ezz Al Arab had the most to say, considering CIB is leading the way on this. Overall, he feels like there has to be a regulatory shift on issues such as permitting digital rather than paper archiving of documentation. “We have revamped our internet banking and mobile application to make them more user friendly. We are trying to get more customers to use those channels,” says Ezz Al-Arab.

Speaking on the future of inclusive banking, Ezz Al Arab is championing data analytics and artificial intelligence. “We are building the necessary data infrastructure to figure out how we can extract value [from existing operations] and how can we develop new business in the future. One of the models we are developing is an artificial intelligence model for early warning signals covering credit stress. We are trying to use historical data to build a model that automatically alerts the bank when a credit file is under stress, rather than using a credit officer to go through all the paperwork.”

Investors don’t need to be bearish on Egypt anymore, says Naguib: Investors should no longer be cautious when entering the Egyptian market now that the EGP float solved the country’s “biggest challenge,” Naguib Sawiris said in an interview with CNBC. “Investors are getting the [funds] in and out, dividends, are being paid, the USD is stable at a very beneficial rate.” Demand on Egyptian assets is on the rise and sectors such as real estate, infrastructure, agriculture, and energy are ripe for investment, Naguib said. The business tycoon also noted that he relies partially on investing in gold mining as a “safe haven” investment that helps to offset geopolitical risks.

He denied regretting he invested in North Korea to establish Koryolink — Orascom Telecom’s JV with the Pyongyang government — and instead played it off as a solid long-term investment that will reap bns once North and South Korea reach a unity agreement. We can’t imagine how since the DPRK regime took full control of the company, established a rival state-owned firm, and has even allegedly been hacking OTMT for corporate secrets. Naguib stressed that he is nonetheless a firm believe that “one should always try and invest in democratic regimes” to avoid being “under the mercy of the ruler,” which is why he is staying away from investing in Russia.

On the political side, Sawiris praised US President Donald Trump for launching airstrikes in Syria and being more proactive than predecessor Barack Obama. You can catch him at his best Henry Kissinger impression here (watch, runtime: 3:51) and here (watch, runtime: 1:28).

Brokerage firms can now seek licenses to take orders for funds: The Financial Regulatory Authority (FRA) has issued new directives that allow brokerage firms to take orders for investments in funds, FRA boss Mohamed Omran said in a statement yesterday. Only brokerages that have been in the market for more than five years will be allowed to apply for licenses. Prior to the rule, investment funds have been closed to brokerages, accessible only through banks.

Other regulatory changes enacted at the same time: Setting a five-day window from the date of application for the FRA to respond to license requests; requiring firms to seek FRA approval before accepting subscriptions for more than one fund; and necessitating that proceeds from fund subscriptions flow into a bank account created especially for them to keep them separated from the company’s finances.

Gov’t targets shifting subsidy beneficiaries from commodities to bread: The government is targeting reducing the number of subsidized commodities beneficiaries and raising the number of those eligible for bread subsidies during FY2018-19. According to reports on the government’s preliminary budget for the upcoming fiscal year, subsidized bread recipients are expected to rise to 78.6 mn citizens, up from 76.8 mn this year, while the number of benefactors for subsidized commodities will drop to 69 mn individuals from 71 mn currently. Overall spending on commodity subsidies is expected to rise 36.6% next year to EGP 86.18 bn. Subsidy card holders are currently allotted five loaves of subsidized bread per day, and are currently able to use their surplus bread points to buy other commodities through subsidy vendors.

Meanwhile, the Supply Ministry is reportedly looking to increasingly rely on imported, rather than locally produced, wheat for subsidized bread production, an unnamed ministry source said, according to Al Mal. The new system would source 75% of the wheat needed from imports and the remaining 25% from local farmers, whereas the current split sees 60% coming from imports and 40% from local production. Farmers’ Syndicate head Hussein Abdel Rahman tells the newspaper that the move is likely a result of the government’s decision to set the wheat purchasing price below farmers’ expectations, which is expected to drive down the amount of wheat farmers will sell to the government. The ministry is expected to announce the decision after the end of the current harvest season, which kicked off on Sunday, but it remains unclear when the changes will come into effect.

LEGISLATION WATCH- House rubber stamps Ikhwan assets bill: The House of Representatives’ general assembly approved yesterday a bill to regulate the freezing and seizure of Ikhwani assets, Ahram Gate reports. The legislation will establish a specialized committee of judges that will be solely responsible for implementing legal proceedings to freeze Ikhwan members’ assets. Individuals who obstruct the committee’s work will also be subjected to a one-year prison sentence and a fine ranging between EGP 10,000 and 50,000.

Also yesterday, the House ICT Committee approved the final draft of the Cyber Crimes Act ahead of referral for general discussion, committee chair Nedal Al Saeed told reporters yesterday, according to Al Mal. The proposed law would grant the government the right to block websites and impose 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.

INVESTMENT WATCH- The Arab Company for Drug Industries and Medical Appliance’s (ACDIMA) is planning to invest EGP 627 mn in growth, according to Health Minister Ahmed Rady. The majority of the investments will be used to acquire private pharmaceutical company T3A. State-Owned ACDIMA had in November signed off on new planned investments that would see it either add new production lines to its existing capacity or invest in a promising pharma manufacturer.

MOVES- AXA Egypt Investments has appointed Ayman Kandil as its new CEO, effective 1 June 2018, Al Mal reports. Kandil will take over the position from Gilbert Chahine, who will become the CEO of AXA Partners.

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Spotlight on Education Reform

Egypt may ask the World Bank for a bigger funding package to support its educational reform project, the total cost of which has been estimated at some USD 2 bn, Education Minister Tarek Shawky said yesterday as he fleshed out details of the reform program, Al Ahram reports. President Abdel Fattah El Sisi has asked that government officials open talks with the World Bank to increase to USD 1 bn a USD 500 mn loan to fund education reform that Investment Minister Sahar Nasr is set to sign on 20 April, according to Shawky.

Background: The Ismail Cabinet signed off last week on a five-year reform plan that should abolish the Thanaweya Amma system and scrap curricula and test methods that emphasize rote memorization. The new system will be implemented as of September for kindergarten and students in the first years of primary and secondary education, Shawky said.

Thanaweya Amma Exams are going digital. The system, which is modeled in part after the education systems of Japan and Finland, will continue to divide students into two streams, one more arts-focused, the other more focused on science. Instead of a single national exam, however, public and private high school students enrolled in the national system will receive their final exams electronically on tablet devices provided to them by the ministry (and manufactured locally by the ICT and Military Production ministries), according to the minister, who said that the first batch of tablets will cost state coffers around EGP 2.5-3 bn. Students will be allowed to take their exams at home under an “open-book” style. Tests will also be corrected electronically and anonymously.

Pearson Education will provide the hardware and infrastructure for the new digital system and train ministry personnel on how to use it. Cabinet is expected to sign the contract with Pearson following their weekly meeting on Wednesday, Shawky said, without providing details on the value of the agreement. The minister explained that the system will also contain a “bank” of exam questions set by teachers, experts, and administrators from which the ministry will draw when putting final exams together. Attendance will also be managed electronically and will automatically block students from taking exams if they exceed their maximum quota of absences, he said.

Media blitz to win support for education reform: Education minister Shawky blanketed the airwaves lasts night with appearances designed to win public support for the reform drive. The new system will eliminate the need for costly private lessons, Shawky told Hona Al Asema’s Lamees Al Hadidi (watch, runtime: 56:38) and Masaa DMC’s Eman El Hosary, as he explained that most of these lessons rely on having students memorize answers to standard exam questions, which will no longer be the case (watch, runtime: 17:02).

The House of Representatives is nodding along in agreement. Education Committee head Gamal Sheeha told Lamees that MPs have been waiting for the strategy for over 15 months. He pointed out though that the amount earmarked for education in the budget is lower than what is constitutionally acceptable (watch, runtime: 5:07).

Parents, however, are still finding the whole thing too vague. While the Association of Thanaweya Amma Parents are not against reforms in premise, the fact that the new system counts into the final grade marks from all three years of high school is a bit concerning, given that the current system counts only two years’ worth of grades, association head Alia El Gemaili told El Hosary on Masaa DMC (watch, runtime: 4:50).

Image of the Day

Upper Egypt has its own version of jousting. Hundreds of men from Upper Egypt gather every year to take part in the country’s oldest running jousting competition, known as Al Mermah (spearing). But unlike its equivalent in the western tradition, the Mermah is not about unhorsing your opponent and more about finding that balance to fight and dance from horseback at the same time, Daily News Egypt reports.

Egypt in the News

It was another quiet morning for Egypt in the international press, who appear to have taken the lack of news as a signal to resume their fixation with Egypt’s rights and freedom’s issues, with new pieces today from The Washington Post, International Policy Digest, and Deutsche Welle. The AP’s Hamza Hendawi and Samy Magdy also thought it worth noting that football in Egypt is an avenue for dissent.

Worth Watching

Apparently, some of us are more genetically inclined to divorce, new research suggests, according to the Economist. Using Swedish national registries that store information on all Swedish residents, including marital status and children’s adoptive and biological parents, American scientists found that children were 20% more likely to divorce if their biological parents had divorced. (Watch, runtime: 01:27).

Energy

Acta Marine deploys new specialist vessels to work on Zohr field for second year

Acta Marine will continue to work on the Zohr gas field for the second year running. The company announced yesterday that it has called in two of its DP Multicat vessels to aid in the completion of its pipe installation activities in shallow waters. The Coastal Chariot was the company’s selected vessel to work off Egypt last year, according to Offshore Energy Today.

Kami Group looking to establish solar, wind energy industrial complex

Egypt’s Kami Group is looking into establishing a solar energy industrial complex in Beni Suef to manufacture and assemble solar and wind energy plant parts, the company said in a letter it sent to potential investors picked up in the press. The complex is expected to house 64 production facilities manufacturing 16 different products, including solar power panels, solar water heaters, LED lamps, inverters, and wind turbine blades, among others.

Infrastructure

Elsewedy Developments plans to invest EGP 700 mn to develop 1.4 mn sqm in Sadat City

Elsewedy Group subsidiary SDM is planning to invest EGP 700 mn in completing industrial development works for 1.4 mn sqm in Sadat City it was allocated through tenders, CEO Mohamed El Kammah says. The development work is expected to take two years to complete, after which the land will be equipped to house around 50 factories, according to El Kammah.

Food and Consumer

Domty postpones launching its baked-goods line to 3Q2018

Domty is postponing launching its baked-goods line to 3Q2018 instead of 1Q2018 as was originally planned, due to a slowdown in sales of baked goods, Vice Chairman Mohamed El Damaty said.

Gov’t targets EGP 7 bn increase in tobacco tax revenues in FY2018-19

Egypt is looking to increase revenues from taxes imposed on tobacco by EGP 7 bn in FY2018-19, according to a document seen by Reuters. The government is targeting tobacco taxes of c. EGP 58.5 bn, up from an expected EGP 51.452 bn this fiscal year.

Real Estate + Housing

OUD plans EGP 350 mn mall in New Cairo

Oriental Weavers subsidiary Orientals for Urban Development (OUD) is planning to build an EGP 350 mn mall in New Cairo, company director Asser Hamdy tells Al Shorouk. The 7,000 sqm Sidewalk Mall should be complete in 2019.

Tourism

Steigenberger Hotels expands Egypt portfolio with new Luxor hotel

Steigenberger Hotels & Resorts is set to open the new Steigenberger Resort Achti in Luxor in 3Q2018, Hotelier Middle East reports. The new hotel on the East Bank of the Nile will include 281 rooms, suites and bungalows, as well as six restaurants and bars. The Steigenberger Resort Achti brings the company’s Egypt portfolio to 14 hotels. A number of hotel chains, including Hilton, have announced ambitious plans to expand across the country as the tourism industry slowly recovers.

Automotive + Transportation

Construction on 10 Ramadan-Salam high-speed train to begin in July

Construction on the high-speed electric rail line linking Salam City with 10 Ramadan City and the new administrative capital will begin in July, the National Authority for Tunnels (NAT) chief Tarek Gamal El Din tells Youm 7. The project, which will be financed by a USD 1.2 bn loan from the Export-Import Bank of China, is set to be completed in two years’ time, he adds. NAT signed an agreement with China’s AVIC in August last year to deliver the rail line’s communication and signaling systems, as well as manufacture and supply 20 locomotives. A consortium of Egyptian construction firms, including Petrojet, Arab Contractors, and Orascom Construction, will carry out infrastructure works for the project.

Banking + Finance

Al Baraka Bank plans to set up new investment arm

Al Baraka Bank is planning to set up a new investment arm in Egypt sometime during 2H2018, CEO Ashraf El Ghamrawy says. The company will likely have a capital of EGP 200 mn. Feasibility studies on the new company are in their “final phases,” according to Ghamrawy.

ODE raises freefloat shares to 25%

Orascom Development Egypt has raised its percentage of freefloat shares on the EGX to 25%, according to a bourse statement (pdf).

Egypt Politics + Economics

PM approves licenses for 166 churches, service buildings nationwide

Prime Minister Sherif Ismail signed off yesterday on a decision that legalizes the status of 102 unlicensed churches and their 64 service buildings, according to a Cabinet statement.

On Your Way Out

Samsung’s Galaxy S9 and S9+ are now available in Egypt, the company announced in a press release (pdf).

Tutankhamun himself will be guiding visitors at the new Egyptian Museum. A hologram of the New Kingdom-era ruler has been designed to give users an authentic experience, which will also see King Tut’s tomb replicated at the central exhibition dedicated to him at the new museum, software designer Ramy Hammady tells Egyptian Streets.

Three Egyptian films have been selected to participate in Geneva’s 2018 International Oriental Film Festival, which is on from 21-29 April, Egypt Today reports. The selection includes Kamla Abou Zekri’s A Day for Women and Iman Kamel’s biography-documentary The Egyptian Joan of Arc.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.63 | Sell 17.73
EGP / USD at CIB:
Buy 17.64 | Sell 17.74
EGP / USD at NBE: Buy 17.57 | Sell 17.67

EGX30 (Monday): 17,620 (+0.2%)
Turnover: EGP 1.2 bn (5% ABOVE the 90-day average)
EGX 30 year-to-date: +17.3%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session up 0.2%. CIB, the index heaviest constituent ended almost flat. EGX30’s top performing constituents were GB Auto up 4.0%, Qalaa Holdings up 3.6%, and Egyptian Iron & Steel up 3.1%. Yesterday’s worst performing stocks were Amer Group down 2.6%, Orascom Telecom Media & Technology down 2.5% down, and SODIC down 1.7%. The market turnover was EGP 1.2 bn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +20.9 mn
Regional: Net Short | EGP -74.5 mn
Domestic: Net Long | EGP +53.7 mn

Retail: 68.3% of total trades | 68.5% of buyers | 68.1% of sellers
Institutions: 31.7% of total trades | 31.5% of buyers | 31.9% of sellers

Foreign: 14.5% of total | 15.4% of buyers | 13.7% of sellers
Regional: 14.0% of total | 10.9% of buyers | 17.1% of sellers
Domestic: 71.5% of total | 73.7% of buyers | 69.2% of sellers

WTI: USD 66.58 (+0.54%)
Brent: USD 71.73 (+0.43%)

Natural Gas (Nymex, futures prices) USD 2.74 MMBtu, (-0.62%, May 2018 contract)
Gold: USD 1,350.80 / troy ounce (+0.01%)

TASI: 8,050.30 (+0.98%) (YTD: +11.40%)
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Calendar

17-18 April (Tuesday-Wednesday): Creative Industry Summit, Four Seasons Nile Plaza Hotel, Cairo.

17-18 April (Tuesday-Wednesday): Aviation Africa 2018 conference, InterContinental City Stars, Heliopolis, Cairo. Register here.

19 April (Thursday): The National Museum of Egyptian Civilization visit and special breakfast at the American Chamber of Commerce. Register here.

20-27 April (Friday-Friday): Seventh edition of El Gouna International Squash Open, El Gouna.

23 April (Monday): Pride Capital’s “Financing Small Merchants” workshop, the Greek Campus, 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.

07-08 May (Monday-Tuesday): Fourth annual Egypt CSR Forum, InterContinental Semiramis 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.

24-25 September (Monday-Tuesday): Egypt Water Desalination Forum, venue TBD.

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

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

23-24 October (Tuesday-Wednesday): Intelligent Cities Exhibition & Conference 2018, Fairmont Towers Heliopolis, Cairo.

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

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

22 November (Thursday): US Thanksgiving.

25-28 November (Sunday-Wednesday): 22nd Cairo ICT, Cairo Convention Center, Nasr City, Cairo.

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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