Wednesday, 2 May 2018

FDI could hit 20-25% in FY2018-19

TL;DR

What We’re Tracking Today

It’s merry merry month of May, as stocks fly of the shelves and fridges get packed with Ramadan supplies. The holy month is only a few weeks away at this point, with expectations hovering at around 16 or 17 May.

As it’s the first week of the month, we’re expecting to hear a number of new indicators this week. Tomorrow is PMI Day and it should be an interesting one considering Ramadan is around the corner. We’re also awaiting the FX reserve figures this week.

More importantly, inflation numbers that should come out on 10 May. This month is all the more significant as the central bank’s Monetary Policy Committee will meet on 17 May to determine interest rates/

In the meantime, Egypt’s M2 money supply growth rate rose to 21.85% y-o-y in March to EGP 3.34 tn (USD 189.56 bn), the CBE announced on Monday, Reuters reports.

You have until Thursday to finish filing your tax returns: The Tax Authority has extended the deadline for companies to file their tax returns until this Thursday, from the original Monday deadline, authority head Emad Samy said, Al Mal reports. Corporate tax revenues are expected to rise to EGP 55.5 bn for the current tax season, up from EGP 33 bn the year before, Samy had told us in an exclusive last week.

It’s Fed Day: The US Federal Reserve will announce its decision on interest rates today, Reuters reports. It is widely expected that the Fed will hold interest rates steady but will likely further encourage expectations that it will lift borrowing costs in June on the back of rising inflation and low unemployment.

April was not kind to emerging market currencies. “While the greenback is on track to notch its best month since Donald Trump’s election in 2016 thanks to higher US interest rates expectations and a general shift away from riskier assets, these same forces have left EM currencies nursing heavy losses,” Pan Kwan Yuk writes for the Financial Times. Russia, Brazil, and Mexico sustained the sharpest drops, and the move is likely to prompt central banks to tighten rather than ease their fiscal policies, Capital Economics analysts suggest. They say, however, that expectations for another hike in US interest rates is unlikely to cause “sharp outflows from EM assets.”

Nothing concrete from Aramco, but privatized education in Saudi got a major boost. Saudi Arabian authorities ordered 25 state-run schools be managed by private sector companies on Tuesday, Reuters reports.

Morocco will sever diplomatic ties with Iran over Tehran’s support for the Polisario Front, according to Reuters. Morocco will close its embassy in Tehran and will expel the Iranian ambassador in Rabat, Foreign Minister Nasser Bourita told reporters. He claims that Iran and its Hezbollah were supporting Polisario by training and arming its fighters, via the Iranian embassy in Algeria. “Hezbollah sent military officials to Polisario and provided the front with … weapons and trained them on urban warfare,” Bourita said.

PSA- Expect hot and dusty weather to continue today across the country. The aftermath of a sandstorm that hit parts of Egypt on Monday, affecting visibility and closing several highways in the south, is expected to last until Friday, which will see the week’s highest temperature at 40°C, the national weather service warns. Parts of the nation’s Mediterranean coast, Red Sea, Sinai, and Upper Egypt could see rainfall today. Look for a high today of 36°C in Cairo and 31°C in Alexandria.

What We’re Tracking This Week

GERD talks on Saturday: The next round of talks over the Grand Ethiopian Renaissance Dam (GERD) will be held in Addis Ababa on Saturday, 5 May, said Sudanese Irrigation Minister Moataz Moussa, according to El Watan.

On The Horizon

The contracts for the Russian Industrial Zone (RIZ) should be signed at the end of May, Russia’s Deputy Industry and Trade Minister Georgy Kalamanov said last week. This could happen at the Egyptian-Russian Economic Committee summit, scheduled for the second half of May, during which both countries’ trade and industry ministers are expected to meet. Kalamanov had met with Suez Canal Economic Zone deputy head Abdel Qader Darwish in Cairo on Sunday to begin the final round of talks on the zone. Kalamanov said last week that the contracts would be signed at the end of May.

Uber / Careem appeal this Saturday: The Supreme Administrative Court is scheduled to hear on Saturday, 5 May an appeal by Uber and Careem of a lower court decision that ordered the two companies to suspend operations. The Administrative Court has scheduled a separate hearing for 15 May. The two companies continue to operate under a Court of Urgent Matters ruling that stayed the initial suspension.

LEGISLATION WATCH- The Tenders and Auctions Act will go to a plenary session vote this month, according to House Planning Committee deputy, Yasser Omar. The committee has concluded its review of the bill, which was originally scheduled to be issued last month, he said.

Our friends at AmCham will be holding their fifth annual HR Day on Monday, 7 May. The event will discuss new ways of attracting talent, developing culture, implementing leadership practices and diversity and inclusion, in addition to raising questions on the value of a company’s culture. You can register for the event here.

The Egyptian embassy in London will be hosting a “Made in Egypt” gala on Tuesday, 8 May. The event, which will exhibit the work of Egypt’s designers, is sponsored by our friends at CIB, SODIC, Edita, and EgyptAir as well as Palm Hills, Ramsco, and Mr. and Mrs. Samih Sawiris.

Enterprise+: Last Night’s Talk Shows

Amr Adib resigns? Kol Youm’s Amr Adib announced his sudden resignation on Monday night’s episode, wrapping up what was quite a colorful c. 20 years as a broadcaster. Adib offered no explanation to why he will no longer be hosting the show, only saying that he had been wanting to retire for the past seven months, but had stayed on the request of the network. Adib had briefly left the show after suffering some minor health issues last year. Adib will host his final episode in “mid-May,” which we’re taking to be 15 May, when the talking heads go on their Ramadan break (watch, runtime: 10:14). From getting econ wrong, to getting (some) politics right, and entertaining comments in between, he will be missed. We wish the host had given us prior warning to come up with some highlights. We instead leave you with this Lionel Messi interview from last year that made his day.

As for the rest of the airwaves, primary and middle school education is going the way of Thanaweya Amma and getting a major revamp. Education Minister Tarek Shawky made the rounds on the airwaves last night to outline the new system, which is expected to be implemented in September during the 2018-19 academic year.

The new primary school system aims to make teaching subjects, including STEM, in English mandatory for all public middle schools (grades 7-9), Shawky said, Al Masry Al Youm reports. The move is meant to have public education compete with the language schools and the international schools. Primary school education in public schools will be taught in Arabic. The philosophy of doing away with rote memorization, which the ministry is planning to implement for Thanaweya Amma, seems to be at play in these reforms, as it plans to end exams for students below the third grade. Shawky noted that these reforms will not apply to private and international schools.

The new system will be introduced to students entering Kindergarten and will not impact current primary school students, Shawky tells Hona Al Asema (watch, runtime: 6:41). MP Mohammed Al Aakad called in to voice his criticism that the new system came as a surprise and that the ministry should have launched in a “national dialogue” before introducing it (watch, runtime: 8:48).

Contrary to official press releases, meetings between President Abdel Fattah El Sisi and his Cypriot and Greek counterparts did look at energy cooperation, Ittihadeya spokesman Bassan Rady tells Yahduth fi Masr (watch, runtime: 6:33). He then delved into the cultural aspects of the visit without elaborating further. Expectations were for an agreement to be signed this week, in light of Cypriot President Nicos Anastasiades and his Greek counterpart Prokopis Pavlopoulos’ visit to Cairo for the “Week to Revive the Roots” cultural forum. Egypt and Cyprus had reached a preliminary agreement to build an underwater pipeline for the transfer of natural gas. The move is expected to put Egypt on the map as a regional hub for the processing and export of natural gas to Europe and could see the country receive mns in funding from the EU under an energy cooperation framework signed last week. An Egyptian-Cypriot-Greek business forum was also held yesterday in Alexandria, according to a Trade Ministry statement.

EFA blames the media for its own lack of class: Egyptian Football Association (EFA) board member Khaled Latif blamed the media for blowing the dispute over Mohamed Salah’s image rights in an interview with Yahduth fi Masr (watch, runtime: 1:15). The issue is topping coverage of Egypt in the News.

On the weather, expect it to get better before it gets worse: Meteorological Authority head Ahmed Abdel Aal told Hona Al Asema that dust and sandstorms will begin to subside in some areas over the coming days but temperature will gradually rise reaching some 40 C in Cairo by Friday (watch, runtime: 5:37).

Speed Round

Speed Round is presented in association with

FDI could grow by 20-25% in FY2018-19 if its hits this year’s USD 10 bn target: Finance Minister Amr El Garhy expects foreign direct investment in Egypt to grow by 20-25% in FY2018-19 if the country achieves the USD 10 bn target it set for this fiscal year. “As investors see that things are improving in Egypt and that there’s no fatigue in economic reform, I think we’ll see more and more people coming,” he tells Bloomberg TV in an interview (watch, runtime: 4:28). “[It’s] a win-win situation….Investors need to come egypt to make good returns and the country needs to make use of that as well, in terms of hiring people, labor, and reducing the unemployment rate.” Multinational companies are looking at Egypt as a hub for exports into other Middle Eastern and African markets, the minister says, adding that local and regional investors are also thinking along similar lines. The government is also doing its best to improve the overall environment for investors by “fighting day in and day out” to implement legislative and structural reforms that facilitate processes such as land availability and allocation, as well as issuing licenses and permits.

Oil, gas, and electricity will play a large role in attracting FDI, as the government moves to cut subsidies and create more opportunities for growth and investment in the energy market.

Subsidies have had a largely negative effect on the energy sector but whether or not the state decides to scrap fuel subsidies entirely by 2019 remains to be seen. “We have to make sure that whatever economics reform action that takes place balances out well with the social safety net that we push within the budget,” El Garhy said. The government had said it would announce a new batch of social safety measures by Ramadan, ahead of an expected increase in electricity prices in July and anticipated cut in fuel subsidies early on in FY2018-19.

Appetite for Egyptian debt remains strong as well, El Garhy said, particularly among European and US investors. That is not likely to fade soon because the “trade-off between risks and returns remains attractive” (watch, runtime: 3:42). Debt levels are still within a safe range, despite the rise in US interest rates, which reflects “better investor assessment of our credit risk.” Egypt is planning USD 6-7 bn-worth of USD- and EUR-denominated eurobond issuances in FY2018-19, according to El Garhy. As for other currencies, El Garhy said that “we will see what’s best for us,” but the Asian market is not currently under consideration.

El Garhy had explained a few weeks back how achieving a primary surplus of 2% “will help us in settling part of our debt service or the debt itself, even if it is a small amount…It will help us reduce our addiction to debt.” His full interview with the FT’s Heba Saleh is now out and you can listen to it here (runtime: 11:48).

EXCLUSIVE- Straight from the Finance Ministry — No dates set yet for state privatization program: Forget all the hypothetical dates on when the government is kicking off the state privatization program as no firm dates for when they will kick off has been set, Vice Minister of Finance Ahmed Kouchouk tells Enterprise. “The government is currently taking preliminary procedures before the program gets underway,” said Kouchouk. The local press has made a habit of throwing widely varying dates around on when the program will kick off. Most recently, CBE Governor Tarek Amer was quoted as saying that Banque du Caire will IPO on the Egyptian Exchange by the end of 2018 or early 2019. Finance Minister Amr El Garhy had previously said that the the committee overseeing the program is still deciding which companies will see shares listed, and that it is likely that already listed companies will pilot the program.

What we’re hearing from the Finance Ministry: Six to eight companies will list shares in FY2018-19, officials tell us. The state budget for the next fiscal year anticipates revenues from the listing will be in the tune of EGP 10 bn.

IMF begins third review of the economic reform program: An IMF delegation is in town and has begun conducting a third review of the economic reform program yesterday, Kouchouk said. The review will be completed by 17 May. The delegation will meet with a number of officials and look into key economic metrics including growth and unemployment figures to gauge the success of the program. The visit will unlock the next USD 2 bn tranche of the IMF’s USD 12 bn extended fund facility. Vice Minister of Finance Mohamed Maait told us last week that he expects the disbursement will arrive sometime in June or July.

EXCLUSIVE – We have the government’s debt plan for FY2018-19: Egypt’s foreign debt obligations in the FY2018-19 budget appear to have fallen marginally to EGP 32.3 bn from EGP 33.3 bn, Finance Ministry sources tell us. The government is hoping to borrow EGP 714.6 bn next year, up from EGP 696 bn in FY2017-18. EGP 511 bn will be borrowed through local currency bonds and debt, while c. EGP 203 bn will be foreign denominated debt — either through bonds or through loans, including the IMF’s Extended Fund Facility, who will provide Egypt with EGP 70 bn next fiscal year. They added that the government plans to issue the equivalent of EGP 128 bn in foreign denominated eurobonds next fiscal year.

Meanwhile, the Oil Ministry is reportedly planning on paying international oil companies USD 200 mn in arrears in June (prior to the beginning of the new fiscal year), ministry sources said. The ministry’s arrears had dropped to USD 2.4 bn as of June 2017.

EXCLUSIVE- FRA raises minimum required ownership stake for MTOs to 50% from 33%: The Financial Regulatory Authority (FRA) has approved regulatory amendments that require investors who own more than 50% of a listed company to make a mandatory tender offer to purchase the remaining shares, up from 33% currently, FRA deputy boss Khaled El Nashar told us this week. The amendments also allow investors who own more than 66% of a company to make an MTO to acquire up to only 90% of total shares, if they vow to refrain from delisting. The Investment Ministry has yet to sign off on the amendments before they are issued, El Nashar said.

Also from the FRA’s docket: Securities firms will be allowed to set up mutual funds. The FRA’s board has also approved new regulations that will allow securities and brokerage firms to establish mutual funds, according to El Nashar. Earlier this month, the FRA had issued new rules that allow brokerage firms to take orders for subscriptions in investment funds, which had previously been accessible only through banks.

FRA to begin drafting rules for futures exchange: In other news from the regulator, FRA boss Mohamed Omran has asked that a committee be formed to draft the rules and regulations that will govern future exchanges, Al Shorouk reports. The establishment of future exchanges became possible after the House of Representatives approved in February amendments to the Capital Markets Act. Omran had previously said that future exchanges are part of a four-year strategy to develop the non-banking financial sector.

IPO WATCH- CI Capital saw its share price rise 19% to EGP 9.16 in its EGX debut on Monday, Al Mal reported. The company, which now trades under the CICH ticker, had completed its IPO to raise EGP 1.7 bn this week. The institutional offering was c.6.1x oversubscribed, while the retail offering tranche was 29.45x oversubscribed.

Advisers: Norton Jeffries and CI Capital were joint global coordinators and bookrunners. Norton Rose Fulbright was international counsel to the issuer, while White & Case was counsel to the underwriters. Matouk Bassiouny was local counsel; Pharos Securities Brokerage and HC Brokerage acted as placements agents.

Shamel Aboul Fadl’s Compass Capital, alongside a group of other investors, exited a stake in CI Capital during the IPO, the firm said in a statement on Wednesday (pdf). Based on the listing price, the investment generated a 3x return to Compass in the year since acquisition. “Compass Capital, alongside a group of investors, identified and executed in March 2017 the acquisition of a stake in CI Capital from Commercial International Bank (CIB),” the statement noted. During Compass’ holding period, CI “created a robust NBFS platform” by acquiring an additional stake in Corplease (giving it an 87% holding) and snapping up 80% of microfinance player Reefy. “Strong investor appetite for CI Capital, both at home and from global investors, clearly underscores that appetite for opportunities in Egypt goes far beyond the carry trade and includes compelling equity stories,” said Aboul Fadl, the firm’s chairman and CEO, in the statement.

Compass has other transactions in the pipeline, possibly including an IPO, Aboul Fadl suggested in the statement. “This is a moment for which we have been prepared since we established the firm in 2010, and we look forward to capitalizing on this appetite in the coming month. We are now reviewing a number of compelling investment opportunities and are working toward another exit via the public market of one of our investments.”

M&A WATCH- Mondi confirms USD 28.7 mn NPP acquisition: Mondi Paper Sales said on Monday that it has agreed to acquire 100% of Egyptian industrial bags maker National Company for Paper Products (NPP) for USD 28.75 mn (around EGP 500 mn) “to expand deeper into the Middle East,” Reuters reports. “The acquisition of NPP complements our network of plants in the growing Middle East region and provides us with a leading position in Egypt to grow our business and better serve our customers,” said Mondi’is Fibre Packaging CEO Erik Bouts. Mondi has been working to expand its presence in Egypt and had applied for a mandatory tender offer to acquire the remaining 70.1% stake in the Suez Bags company in a transaction valued at EGP 199.4 mn.

INVESTMENT WATCH- Gown rental platform La Reina raises USD 1 mn in funding round: Online gown rental platform La Reina announced on Monday (pdf) raising USD 1 mn in Series A funding, in a round led by Egypt’s Algebra Capital Ventures, alongside global venture capital fund 500 Startups. The platform, which allows women to rent evening gowns and wedding dresses from each other, is looking to allocate the funds to expanding its operations, by growing its available collection of dresses to 5,000 pieces by next January, as well as its team. “La Reina is leveraging shifts in consumer behavior driven by technology, and that excites us,” Algebra Ventures Managing Director Ziad Mokhtar said. Similar ideas have succeeded in the US, according to 500 Startups Partner Sharif El-Badawi, who said that “La Reina adapted their strategy and business model around the local nuances and needs on both sides of the marketplace.” The company has helped dress owners earn around EGP 3.5 mn since the company was founded in 2016.

EFG Hermes topped the EGX’s brokerage league table for April with a 17.7% market share, according to figures released by the Egyptian Exchange (pdf). CI Capital came second with a market share of 13.2%. Our friends at Pharos Holding and HC Securities were more or less tied in third place at 5.9%, followed by Beltone Financial (5.1%).

Egypt has seen the biggest growth in Airbnb guest arrivals that anywhere in Africa in the 2017/18 season, according to data by the company picked up by IT News Africa. Arrivals to Egypt increased 134% y-o-y, far outpacing Reunion (84%), Kenya (69%) and South Africa (60%). By city, both Hurghada and El Gouna topped the list, seeing Airbnb guest arrivals growing 220% and 215% respectively.

Still not convinced, UK? Civil Aviation Minister Sherif Fathy chalks the continued UK travel restrictions on Sharm El Sheikh down to bad publicity and misconceptions rather than facts on the ground. “Some Egyptian airports were perceived as not safe enough, but Egypt scored a high point when IATA audited Egyptian airports,” he tells AIN in an interview. “It is more of bad publicity than the facts on the ground. We have got many delegates who come to see the security procedures at our airports and they have seen that we are good enough and meet all the international security standards.” UK restrictions on Sharm persist despite nearly all major Western markets lifting theirs.

Naguib is really hoping Trump’s potential meeting with Kim Jong Un goes smoothly: Sawiris is really rooting for a successful peace conference between US President Donald Trump and DPRK ruler Kim Jong Un, as it may the miracle that allows him to repatriate profits from Koryolink held up there for ten years, he tells Bloomberg TV in an interview on Monday. “I am taking all the hits, I am being paid in a currency that doesn’t get exchanged very easily, I have put a lot of money and built a hotel and did a lot of good stuff there,” said Sawiris. The company, which was seized by the state which launched a rival telecom operator, aren’t currently recognized on the financial statements of OTMT. Sawiris says he has been pressured by “every single Western government in the world” for his presence in the country.

As for Egypt, Sawiris really likes real estate, saying that he’s planning an investment debut in the “booming” real estate market this year after hiring a consultant who said demand was strong. He shrugged off concerns of a bubble in the market. Sawiris had said in a conference on Sunday that he plans to exit whatever investments he still had left in the telecoms sector to concentrate on real estate, agriculture and financial services.

He still doesn’t like Saudi: For the second time since last November, Naguib came out strongly against Saudi Arabia, primarily over the anti-corruption purge which took place there. Authorities need to ensure there is rule of law and order and transparency, he said.

“Goldfinger” Sawiris? OTMT Chairman Naguib Sawiris really likes to park his money in gold, investing nearly half of his USD 5.7 bn net worth into gold. Gold will reach USD 1,800 per ounce from just above USD 1,300 now, believing gold prices will rally further, while “overvalued” stock markets crash. You can catch the full interview here (watch, runtime: 17:07) or read the highlights here.

In other Sawiris news, the OTMT boss is looking restart talks with the government over investing in its EGP 451 mn venture capital firm Egypt Ventures, he said on the sidelines of a conference on Sunday. Sawiris had initially expressed his interest in the firm last year, and said at the time that he would study the idea and meet with company executives to discuss the possible investment. He said on Sunday that he is behind the delayed talks.

Our friends at Renaissance Capital wrapped up another successful edition of their annual Egypt Investor Conference in Cape Town, South Africa, last week. The conference brought together senior management from leading Egyptian companies and South Africa-based investors in sectors ranging from healthcare to financial to real estate, facilitating talks on prospective partnerships and investments, according to an emailed statement (pdf). As Egypt continues to develop and become more competitive, Renaissance Capital has been “acting as a conduit between investment capital and high-growth companies seeking to expand their operations and create more value,” said MENA CEO Ahmed Badr. “The establishment of our new Cairo office, and recent senior appointments to our MENA equity research and investment banking teams serve as a testament to our commitment to offer unparalleled levels of expertise and execution across the frontier and emerging markets of Europe, the Middle East and Africa.”

Rafale jets back on? Egypt quietly signed a communications security agreement with the US back in January that will likely allow the country to purchase US-made high-precision GPS-based air-to-ground weapons systems and components, such as the Rafale fighter jets it is looking to purchase from France’s Dassault Aviation, according to Canada Free Press. Dassault had said in March that it needs US authorization to sell Egypt 12 Rafale jets equipped with US-made Scalp cruise missiles, which the US had been refusing to do, claiming the move violates US International Air Traffic in Arms Regulations.

On a related noted, Egypt is one of Germany’s top destinations for arms sales, as Cairo has been forced to look away from the US and “seek weapons from other sources,” according to Defence Web. “In the past five years, German defence exports to Egypt have jumped by 205%.” In 2017 alone, Germany approved 35 Egyptian requests for the purchase of German-made weapons and defense systems worth a total EUR 708 mn.

Prince Alwaleed bin Talal’s KHC sells Movenpick Hotels to AccorHotels: Prince Alwaleed bin Talal’s Kingdom Holding Company (KHC) and its partners have signed an agreement to sell Movenpick Hotels and Resorts (MHR) to AccorHotels for CHF 560 mn (USD 567 mn), according to a statement by KHC. The transaction, which is expected to be completed in 2H2018, will “enable MHR to benefit from Accor’s leading distribution channels, global operating systems, innovative digital technology and attractive loyalty program,” the company said. KHC subsidiary Kingdom Hotels holds a 33.3% equity interest in MHR.

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Image of the Day

The Environment Ministry has allocated EGP 70 mn to finance development of natural protectorates in Egypt, according to Egypt Today. The policy will see the government removing encroachments and addressing other damages caused by people in the Wadi Degla, Wadi El Rayan, and the Petrified Forest protectorates. The ministry is also assessing other areas in 14 districts to determine whether or not declaring them as protectorates would be viable.

Egypt in the News

Topping coverage in the international press this morning is the ongoing dispute between Mohamed Salah and the Egyptian Football Association. The dispute shows just how much Egyptians love and support the Liverpool winger, Hamza Hendawi and Sam Magdy write for the Associated Press. The footballer’s statements on Twitter and Facebook expressing his frustration over the dispute with state-owned mobile network WE opened the floodgates of support from his fans. Salah’s star power is also behind the “top-level” political intervention to sort out the legal troubles he faces over image rights. “No sportsman in Egypt has ever commanded the adulation and respect Salah has enjoyed since joining Liverpool last year.”

This is where we draw the line: Salah might end up bowing out of playing for Egypt’s national team at the upcoming World Cup in Russia if the issue is not resolved soon, his agent reportedly suggested, according to Sports Illustrated. Egyptian fans are getting antsy waiting for a resolution to the problem, “as both Egypt and the tournament as a whole will surely be poorer without Salah.”

This comes as the Liverpool star has just been voted Footballer of the Year by the Football Writers’ Association (FWA), Reuters reports. “Mo Salah is the worthiest of winners. He is also the first African to receive the award and we congratulate him on a magnificent season,” FWA Chairman Patrick Barclay said.

Meanwhile, FIFA has given five African football federations, including Egypt’s, USD 2 mn each in player bonuses ahead of the World Cup, the AP reports. The bonuses were handed out to the Egyptian, Moroccan, Nigerian, Senegalese, and Tunisian federations in advance to preempt disputes with FIFA over the payment, according to the newswire.

Diplomacy + Foreign Trade

Egypt, ILO sign USD 3.7 mn MoU on capacity building, job creation: Egypt signed a MoU with the International Labor Organization (ILO) on Monday that will see them collaborate on a three-year project to support private sector and SME development through capacity building workshops, according to an Investment Ministry in a statement. The Norwegian government will provide USD 3.7 mn in funding to the project, which will offer a number of training programs and workshops, on the organizational and individual levels, designed with the aim of better preparing labor for the job market.

Energy

EETC seeks EUR 200 mn loan from EBRD for grid expansion

The European Bank for Reconstruction and Development (EBRD) is considering lending the Egyptian Electricity Transmission Company (EETC) up to EUR 200 mn for grid expansion, according to a bank statement. The loan will be used to finance part of EETC’s plan to build and upgrade five high voltage substations in Upper Egypt, West Delta, Cairo, and Alexandria. The project aims to facilitate the integration of at least 450 MW of renewable energy capacity into the grid. The bank also says it would provide EETC and the Egyptian Electricity Utility and Consumer Protection Agency (Egyptera) with technical assistance to “help them comply with the requirements of Egypt’s Electricity Law and facilitate transition to a liberalised and efficient market structure.”

El Molla and Toyota Tsusho discuss boosting investments

Oil Minister Tarek El Molla met with representatives from Toyota Tsusho Corporation yesterday to discuss increasing the company’s investments in Egypt, according to a ministry statement (pdf). Both sides reviewed the possibility of Toyota’s participation in a refining and petrochemicals project currently under consideration, as well as a USD 1.9 bn diesel fuel refinery.

Basic Materials + Commodities

Bad weather hindered citrus exports to China this year

Citrus exports to China dropped this year due to bad weather conditions, Extra Global Company’s export chief Ahmed El Sayed tells Fresh Plaza. “We shipped less quantity to China than we did in previous years,” he says. Egyptian citrus products have been outperforming global peers with recent projections seeing our oranges taking the lead in global exports. Egypt has recently become the third largest exporter of citrus products to China.

Banking + Finance

Tanmeyah is in talks with two banks for EGP 1 bn facility

Private sector microfinancier Tanmeyah is in talks with two unnamed banks to receive a EGP 1 bn loan to help reach its target of providing EGP 4.25 in microloans by the end of the year, CEO Amr Abouleish said. The company expects to receive the loan within four months’ time.

Banque Misr remains undecided on whether to establish an independent mortgage financing arm

Banque Misr has yet to decide whether it will establish an independent mortgage financing arm, and is looking into the possibility of adding mortgage financing services to the already-established BM Lease, Chairman Mohamed El Etreby told Al Mal on Monday. Unnamed bank officials had said last year that management found the decision untimely and decided instead to opt for the latter option under the central bank’s EGP 20 bn Mortgage Finance Fund. El Etreby had first announced the bank’s plan to set up the mortgage financing arm last May.

Egypt Politics + Economics

Morsi, Qaradawi and Aboutrika back on Egypt’s terror watchlist

A Cairo Criminal Court has placed 1,529 defendants, including retired footballer Mohamed Aboutrika, deposed President Mohamed Morsi, and preacher Yusuf al-Qaradawi, back on the terror list for another five years, Egypt Today reports. The court also ruled in favor of freezing their assets over allegations of connections to the outlawed Ikhwan group. This comes only days after the Supreme Administrative Court upheld a previous ruling to unfreeze Aboutrika’s assets.

On Your Way Out

Chicken hatcheries in Egypt could be a hotbed of bacteria that is resistant to antibiotics, Down To Earth reports. This phenomenon “can be a major contributor to the environmental burden of antibiotic resistant genes posing an eminent threat to poultry and human health,” according to Caio University microbiology professor Kamelia Osman. Antibiotic resistance in bacteria is on the rise in low- and moderate-income countries including Egypt, Osman says, which she attributes to “the very liberal and uncontrolled use of antibiotics, to an extent that it is becoming a threat to medical and veterinary treatment efficacy.”

The Market Yesterday

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EGP / USD CBE market average: Buy 17.61 | Sell 17.71
EGP / USD at CIB:
Buy 17.58 | Sell 17.68
EGP / USD at NBE: Buy 17.57 | Sell 17.67

EGX30 (Monday): 18,296 (-0.1%)
Turnover: EGP 1.9 bn (64% ABOVE the 90-day average)
EGX 30 year-to-date: +21.8%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.1%. CIB, the index heaviest constituent ended up 0.1%. EGX30’s top performing constituents were Telecom Egypt up 3.5%, Egyptian Iron & Steel up 3.1%, and Eastern Co. up 2.5%. Monday’s worst performing stocks were Orascom Telecom Media & Technology down 4.4%, ACC down 4.1%, and Qalaa Holdings down 3.2%. The market turnover was EGP 1.9 bn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +46.0 mn
Regional: Net Long | EGP +81.3 mn
Domestic: Net Short | EGP -127.3 mn

Retail: 67.0% of total trades | 67.5% of buyers | 66.5% of sellers
Institutions: 33.0% of total trades | 32.5% of buyers | 33.5% of sellers

Foreign: 19.3% of total | 20.5% of buyers | 18.1% of sellers
Regional: 20.0% of total | 22.2% of buyers | 17.9% of sellers
Domestic: 60.7% of total | 57.3% of buyers | 64.0% of sellers

WTI: USD 67.43 (+0.27%)
Brent: USD 73.22 (+0.12%)

Natural Gas (Nymex, futures prices) USD 2.80 MMBtu, (0.00%, June 2018 contract)
Gold: USD 1,307.50 / troy ounce (+0.05%)

TASI: 8,158.06 (-0.62%) (YTD: +12.89%)
ADX: 4,673.31 (+0.08%) (YTD: +6.25%)
DFM: 3,030.75 (-1.15%) (YTD: -10.07%)
KSE Premier Market: 4,781.38 (+0.06%)
QE: 9,014.32 (-1.07%) (YTD: +5.76%)
MSM: 4,731.27 (+0.05%) (YTD: -7.22%)
BB: 1,257.88 (-0.39%) (YTD: -5.54%)

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Calendar

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.

05-06 May (Saturday-Sunday): Inclusive Growth and Job Creation Conference, venue TBD, Cairo.

07 May (Monday): American Chambers of Commerce (AmCham) will be holding its fifth annual HR Day at the Four Seasons Nile Plaza, Plaza Ballroom.

08 May (Tuesday): The Egyptian embassy in London will be hosting a “Made in Egypt” gala exhibit event.

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.

17 May (Thursday): Expected date for the start of Ramadan.

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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