Monday, 14 May 2018

Amer speaks on FX market, interest rates

TL;DR

What We’re Tracking Today

It’s interest rate week, and domestic factors will not be the only thing weighing on the minds of the Central bank’s Monetary Policy Committee when it meets on Thursday, CEB Governor Tarek Amer suggested yesterday. Oil at USD 75 per bbl, the potential impact of future interest rate hikes by the US Federal Reserve and the the Trump administration re-imposing sanctions on Iran are all factors to be taken into consideration.

In general, the CBE would like to see interest rates lowered, Amer said, noting that declining interest rates will spark corporate appetite to borrow and make financing for state infrastructure projects more affordable. The governor dismissed complaints that interest rates have been high for too long. Amer’s comments came during a workshop held by Al Ahram during which he spoke broadly on economic policy. We have additional highlights in today’s Speed Round below.

With inflation largely flat in April, the emerging consensus among analysts seems to be that the CBE will leave interest rates on hold ahead of subsidy cuts in July. The central bank is likely to leave interest rates unchanged until September at least, says Pharos Research head Radwa El Swaify, saying that the recent hike in Metro ticket prices, more consumer spending during Ramadan, the expected hike in energy and power prices in July, and higher oil prices all point to a transient rise in inflation. El Swaify sees inflation rising 200 to 350 bps in July and August, reaching 14-15%, according to Al Shorouk. Every USD 1 increase in global oil prices could see the government’s subsidy bill rise by an average of EGP 4 bn annually, she noted. Naeem Holding is of the same mind, saying in a research note picked up by Al Mal that the unexpected rise in April inflation figures means the MPC is unlikely to agree on another rate cut this week.

Detailed inflation figures are out tomorrow. Initial data from the CBE showed the annual headline inflation rate in April dropping to 13.1% from 13.3% in March. While core inflation was up fractionally to 11.62% from 11.59%.

Foreign Minister Sameh Shoukry and Defense Minister Sedki Sobhi are in Moscow today for talks with their Russian counterparts that should cover security, terrorism, and the conflicts in Syria and Libya. The meeting will pave the way for the Egyptian-Russian Economic summit this month, where it is likely we’ll see the signing of contracts for the Russian Industrial Zone, according to statements last month by Russia’s Deputy Industry and Trade Minister Georgy Kalamanov. Trade and Industry Minister Tarek Kabil will be attending. A delegation led by Electricity Minister Mohamed Shaker is also in Russia for the 2018 Atomexpo nuclear power forum, Al Masry Al Youm reports. The Rosatom-sponsored event, which runs from 14-16 May, brings together leaders and experts from the nuclear power industry. Rosatom is building a USD 30 bn nuclear power plant in Dabaa.

Our friends at Flat6Labs are holding their Cairo Spring demo day today. “The cycle brings a promising lineup of startups that work within software products in education, fintech, health & safety, consumer e-commerce, design, and media,” the invite says. The event kicks off at 6:30pm CLT at the Semiramis InterContinental in downtown Cairo.

It’s a busy morning internationally, too. Among the many headlines competing for your attention this morning:

The Israeli press is predicting an “incendiary week” to our east: The US embassy opens this morning in Jerusalem, having moved from Tel Aviv. Hamas officials were asked by Egyptian intelligence yesterday to de-escalate tensions ahead of planned protests in Gaza today and tomorrow to mark the opening of the embassy in Jerusalem and Nakba Day. (Haaretz | Wall Street Journal)

Goldman Sachs wants to buy something in KSA and has reportedly approached “a Saudi state-owned entity” about a transaction that worth multiple bns, the bank’s CEO for MENA said, pointing to plans to double its headcount in the kingdom. (Bloomberg)

ADNOC in refining megaproject: Abu Dhabi is going to spend USD 45 bn over five years to start refining a good chunk of its own petroleum rather than simply exporting it. State-owned ADNOC wants to create the world’s largest refining and petchem complex. (Wall Street Journal)

HSBC says it has just done its first trade finance transaction using blockchain, adding that the technology will make trade finance transactions “simpler, faster, more transparent and more secure.” (Reuters)

One of our biggest trade partners should soon have a new government. Italy’s anti-establishment Five Stars Movember and the far-right League have reached an agreement on power sharing and a common candidate for prime minister. They have plenty of work to do to fix the economy. (Politico | Reuters)

Hyundai faces growing investor opposition to a plan that would give the founding family more control. (Financial Times)

The Financial Times’ ranking of top executive education programs in 2018 is now out. Spain’s Iese Business School tops the ranking for the third year in a row, followed by Duke Corporate Education, IMD (Switzerland), London Business School, and HEC Paris. You can check out the overview of the package here and the full rankings here.

With Ramadan starting Wednesday or Thursday, the EGX announced yesterday its traditional shorter trading hours for the holy month. The trading session will run 10:00 am until 1:30 pm. Tap or click here for the full schedule.

So, when can we eat? Presuming Ramadan is on Thursday, as the national astronomy research center earlier suggested: Maghrib is at 6:42pm CLT. You’ll have until 3:20 am on Friday to finish your sohour.

What We’re Tracking This Week

President Abdel Fattah El Sisi will host his fifth National Youth Conference on Wednesday, Al Ahram reports. Previous editions of the conference, which is meant to take place every three months, were held in Sharm El Sheikh, Aswan, Ismailia, and Alexandria. No details were provided on the location of Wednesday’s edition. Organizers have set up a website for citizens to submit questions to which El Sisi will respond during the gathering.

On The Horizon

The IMF should issue its progress report on Egypt’s economic reform program in two weeks’ time, Deputy Chief of Media Relations Alistair Thomson tells Al Masry Al Youm. A delegation is in town until 17 May to finish a review that should unlock another USD 2 bn of the USD 12 bn IMF extended fund facility by June or July.

Enterprise+: Last Night’s Talk Shows

Last night’s talk shows had plenty to offer by way of economic commentary, but the highlight by far was a sit-down on Al Hayah Al Youm to discuss the economic outlook for Egypt, starring our friend CIB Chairman and Managing Director Hisham Ezz Al-Arab and Banque Misr Chairman Mohamed El Etreby.

Egypt has largely regained the trust of local and foreign investors after undertaking a series of economic reforms, which did not start in earnest until 2014, Ezz Al Arab said. He piled on the praise for the “historic” decision to float the EGP back in November 2016, without which he said the market would have effectively ground to a standstill. Ezz Al Arab also reiterated previous calls to clear hurdles for the private sector to invest and help drive economic growth (watch, runtime: 5:39).

El Etreby concurred with Ezz Al Arab that the float was an important milestone in Egypt’s economic reform, reminding viewers of the days when the parallel market was running amok. The banking system is now faring much better, El Etreby said, pointing to several key figures to drive the point home. Prior to the float, hot money was less than USD 1 bn but the figure currently stands at USD 23 bn. Egypt’s banks suffered from a USD 6 bn shortage in foreign currency but now have a surplus of USD 13 bn. The banking sector’s assets also soared 147% between 2014 and November 2017 to reach EGP 4.865 tn. The volume of interbank transactions this year has thus far reached USD 14 bn, and overall loans disbursed from the banking sector now hover at EGP 1.441 tn, up from EGP 629 bn in 2014.

They two also took a moment to touch on Standard & Poor’s long-awaited upgrade of Egypt’s sovereign credit rating, saying that it’s an important indicator the country is moving forward in the right direction. Both Ezz Al Arab and El Etreby stressed that this should further motivate the government to press ahead with reforms.

You can watch full interview here (runtime: 1:16:02).

The upgrade was a long time coming but the delay is understandable considering Egypt’s high debt level, which is always a point of concern for agencies when considering a rating upgrade, Finance Minister Amr El Garhy told Hona Al Asema’s Lamees Al Hadidi. Agencies are usually wary of debt levels that exceed 100% of GDP, and Egypt’s reached 108% of GDP during the last fiscal year. As such, the government is doubling down on bringing own debt levels over the coming few years, the minister said (watch, runtime: 5:10).

Debt is certainly a concern, but more rating upgrades from other agencies could very well be in the cards for Egypt, particularly as the country’s reform program continues to bear fruit and earn international credibility, credit rating expert Amr Hassanein told Lamees (watch, runtime: 7:51).

The IMF delegation currently in town to review Egypt’s reform program should wrap up their work by week’s end, while the fourth tranche of the USD 12 bn facility should be disbursed by the end of June, El Garhy said (watch, runtime: 11:22).

Talking heads want metro commuters to spring for membership cards: In near-unison, Lamees (watch, runtime: 39:36), Kol Youm’s Amr Adib (watch, runtime: 6:37), and Masaa DMC’s Eman El Hosary (watch, runtime: 8:16) each urged viewers to consider buying a metro membership card rather than paying for individual tickets for each commute. They each pointed out that the move would be more cost-effective and would help reduce the burden of last Friday’s ticket price hikes. Easy to do for Lamees, Amr, Eman and anyone reading our fair morning briefing, but folks need to ask themselves if the working poor have the cash flow to do this.

Speed Round

Speed Round is presented in association with

LEGISLATION WATCH- Banking Act will be ready in June: The Banking Act will be ready and presented to the Ismail Cabinet on 1 June, CBE Governor Tarek Amer said in at workshop on the economy held by Al Ahram. The law would reduce the power of the CBE governor by giving the central bank’s board expanded oversight powers, said Amer. He did not speak on the ways the law would impact banks beyond reiterating that the CBE would have expanded an regulatory role. Amer had previously said that the law would give the CBE greater teeth in regulating boards at banks, but that it no longer contained provisions to limit the terms of bank managing directors. A tithe on bank profits to benefit an industry development fund has also been scrapped.

Amer noted that total inflows reached USD 120 bn since the EGP float, including portfolio investment, foreign direct investment, tourism receipts and remittances. Portfolio inflows reached a total of USD 35 bn, with inflows into Egypt’s sovereign debt over the last period rising to USD 25 bn, with some USD 10 bn having been invested in the stock market, he added.

Exchange rate against greenback stable and CBE doesn’t want to have to prop up the EGP: Inflows have helped keep the FX rate stable, the governor said, adding that strong reserves allow foreign companies to repatriate profits. He warned that while the CBE has no intention of manipulating the exchange market, it could step in if rates get out of control.

It’s the second time in less than two weeks that Amer has mused about intervening in the FX markets if the exchange rate goes out of an ‘acceptable’ corridor (see the second paragraph of Last Night’s Talk Shows on 8 May, here.)

His comments yesterday came as remittances from Egyptian expatriates rose 11.6% y-o-y to USD 2 bn in February 2018, compared to USD 1.8 bn in February 2017, the central bank said yesterday (pdf). Remittances recorded USD 17.3 bn during the eight months from July 2017 to February 2018, marking a 24.1% increase from the same period a year earlier.

On foreign debt, Egypt plans to pay international oil companies USD 850 mn, said Amer without noting the timeline for the disbursement. Oil Ministry sources had stated earlier this month that Egypt will pay IOCs USD 200 mn in June. Amer stated that the country’s overall debt levels are within comfortable bounds, saying that while Egypt’s debt is growing, so is the economy. What’s helping keep the situation stable are the fact these debts are long-term, ranging from 15-60 years.

IPO WATCH- Qalaa plans to list some of its subsidiaries on the EGX beginning 2H2019: Qalaa Holdings is planning to list multiple subsidiaries on the EGX while retaining stakes in them, our friend Ahmed Heikal tells Al Shorouk. The Qalaa founder and chairman said he expects to begin listing these companies as of 2H2019, noting that all of Qalaa’s subsidiaries are “expanding significantly,” which supports the company’s optimistic mid-term outlook for its business. Heikal admitted that Qalaa has become “difficult for many investors to understand,” adding that the listing of subsidiaries should make the underlying investment thesis clearer.

Qalaa’s USD 4.3 bn Egyptian Refining Company in Mostorod should start trial operations by November 2018 and is currently around 97% complete, according to Heikal. Trial operations will span six months. Once the facility is up and running, it will produce 4.7 mn tonnes of petroleum products and derivatives, which will plug 14% of Egypt’s overall supply needs. The project’s cost has risen from an initial estimate of USD 3.7 bn on the back of a 22-month delay due to financing issues. Qalaa had announced in March that ERC took on new finance and equity commitments. Rising oil prices will help make ERC more profitable than originally expected, as will new demand for the low-sulphur diesel ERC will produce: Global environmental regulations bar ships’ use of high-sulfur diesel.

More investments in the pipeline: Once the Mostorod facility is up and running, Qalaa plans to invest at least EGP 500 mn in waste recycling projects over the next two years. Qalaa will also invest EGP 4 bn over the next four years to expand operations at three of its factories in Sadat City. The company is also looking into expanding its business with projects in several other sectors, including the construction of an Alexandria-Damietta railway line that is currently under study, Heikal said.

Heikal sees Qalaa becoming one of Africa’s 10 biggest companies within five years, by which time the company is expected to have EGP 80-100 bn worth of annual business.

EXCLUSIVE- Knock Mart completes acquisition of Dina Farms retail stores: Online grocery delivery specialist Knock Mart has completed the acquisition of 100% of Qalaa Holdings’ Arabian Company for Services and Trade, the parent company of supermarket chain Dina Farms, Knock Mart Chairman Ahmed Taher tells Enterprise. He did not disclose the price tag for the transaction, but noted that it has been executed. The sale does not include Dina Farms’ core dairy business, Qalaa tells us. Dina has c. 15k head of cattle, making it one of Africa’s largest dairy farms. Under the terms of the sale, Knock Mart will be required to stop using the Dina Farms brand name, which remains Qalaa’s intellectual property, later this summer. The acquisition of Dina Farms’ 17 stores brings Knock Mart’s retail footprint to 20 locations and comes as part of the latter’s strategy to grow its retail stores alongside its online sales, said Taher. Knock Mart had made its intentions to acquire Dina Farms known in October 2017.

Advisors: Pharos Holding executed the transaction on the OTC market. Knock Mart was advised by Haykala Investment Managers and Matouk Bassiouny acted as legal counsel.

M&A WATCH- Dr. Oetker looks set to acquire Cook’s Industries in EGP 1 bn transaction: German food producer Dr. Oetker is reportedly in the final stages of talks to acquire full ownership of Cook’s Industries in a transaction valued at more than EGP 1 bn. Emerging markets private equity giant Actis, which rumor had it had begun conducting due diligence, appears to have dropped out of the race, sources close to the agreement tell Al Mal. We had reported in February that Cook’s owners, the Paraskevas family, are interested in selling their entire stake in the venture.

Advisors: We were told that Dr. Oetker tapped CI Capital to advise on the acquisition, with Arqaam Capital advising on the sell-side.

M&A WATCH- TE to finalize MENA Cables acquisition within a week: Telecom Egypt (TE) expects to finalize the details of its USD 90 mn acquisition of MENA Submarine Cables Systems within a week, TE CFO Mohamed Shamroukh reportedly said yesterday, Al Mal reports. TE is currently confluding negotiations with Orascom Telecom and Media and Technology, which is looking to sell 100% of MENA Cables, and will soon begin seeking the National Telecommunications Regulatory Authority sign off on the agreement. TE announced last Thursday that it would finance the transaction through a shareholder loan to its subsidiary cable business. We had heard that TE was close to tapping EFG Hermes to advise on the transaction.

INVESTMENT WATCH- Are Eni and Lukoil investing in USD 700 mn gas plant the in Western Desert? Italy’s Eni and Russia’s Lukoil plan to invest USD 700 mn to develop a natural gas processing plant in the Western Desert, said Mohamed El Kaffas, chairman of Eni joint venture AGIBA. The plant is expected to have a capacity of 100 mcf/d with plans to ship the processed gas to Alexandria through a 200 km pipeline, he tells Egypt Today. The plant is expected to be completed in three years. AGIBA plans to drill 28 wells in the Western Desert concessions in tandem with the development of the plant.

Caveat emptor: We have not seen this story covered anywhere else in the press and we await comment from Eni confirming the project.

NBE to arrange USD 1 bn for Al Ghurair Group’s Al Canal Sugar refinery: The National Bank of Egypt (NBE) is arranging a USD 1 bn syndicated loan for the UAE’s Al Ghurair Group’s Al Canal Sugar refinery, sources with knowledge of the matter tell Al Shorouk. The NBE is currently in talks with a number of local banks to form a consortium to finance construction of Ghurair’s new sugar beet processing facility. The company reportedly asked the NBE to arrange first a USD 500 mn bridge loan until it can finalize procedures for the full amount, of which the company will use USD 550 mn to plant 181k feddans of sugar beets, and USD 450 mn to build its processing plant. We had reported back in February that the NBE was arranging a USD 400 mn for Al Ghurair’s project, which Investment Minister Sahar Nasr had said should help Egypt reach self-sufficiency in sugar production. NBE’s Investment banking arm, Al Ahly Capital, is financial advisor to the UAE-based company.

One step closer to launching the Automotive Directive? The Trade and Industry Ministry plans to hold a meeting today with a number of auto companies to discuss an order issued by minister Tarek Kabil last month on local content that is widely considered to be a forerunner to the Automotive Directive, said Tamer El Shafei, head of the auto components division of the Federation of Egyptian Industries. The meeting brief the companies on the order and start a dialogue. The order mandates that 46% of the components of a domestically-assembled car be sourced locally, and that 28% of a car has to be assembled in Egypt for it to qualify as an “assembled in Egypt” vehicle. This portion will be reduced by 1% every year following implementation of the decision. Twelve car assemblers will reportedly take part in the meeting, among them our friends at GB Auto as well as Bavaria Auto Group, and Nissan Auto Egypt.

Toyota Egypt throws its weight behind the Automotive Directive: Toyota Egypt CEO Ahmed Monsef expressed his support for last month’s order amending domestic component quotas. The order’s timing is also significant as the long-awaited Automotive Directive has yet to be issued, he added.

There are 231 days left until 1 January 2019. That’s when customs on vehicles imported from the European Union are set to fall to zero. The domestic auto assembly sector runs the risk of major downsizing if it hits 1 January without the protections mandated in the Automotive Directive, which would offer assemblers incentives to move up the value chain into manufacturing.

OCI subsidiary to receive USD 380 mn from EBRD, IFC: The Egyptian Fertilizers Company (EFC) has signed loan agreements with the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), and several local and international banks worth a combined USD 380 mn and EGP 1.12 bn, parent company Orascom Construction Industries (OCI) announced on Thursday. EFC will use the loans to refinance existing debts it was due to repay in October 2019. The facilities include USD 100 mn from the IFC and USD 60 mn from the EBRD, according to an EBRD statement.

Nine companies, including Orange Egypt, face mandatory delisting by mid-June: Nine companies have yet to meet the EGX’s listing requirements on the minimum required number of shareholders, shares, or shares in freefloat, according to a statement from the EGX (pdf). Three of these companies — El Shams Pyramids for Hotels and Touristic Projects, Nile City Investments, and Alex Container and Cargo Handling — are currently making progress on meeting the requirements. Union National Bank, Samcrete, Al Orouba Company for Mining & Trading, Incolease, and Rowad Misr Tourism Investment are at risk of mandatory delisting, which the bourse will decide on at a meeting on 12 June if they fail to meet the requirements. The lawyers are still looking at Orange Egypt: The mobile network operator had said back in January it is “examining all options” to increase its freefloat to at least the minimum, which the company said is dependent on market conditions.

Early sign that Cabinet is getting serious about import substitution? The government has ordered a study of the total import of goods and services over the last three years, Prime Minister Sherif Ismail told representatives of a number of business and investor associations. The study will help the government set policy priorities for which goods can be manufactured by the private sector here, a move he says will help reduce unemployment and the current account deficit while relieving strain on FX reserves, Ismail said, according to a statement.

Railway ticket prices to rise 30-45% after Ramadan? The Ismail Cabinet is reportedly days away from signing off on a decision to hike railway ticket prices by 30-45%, Al Mal reports. The hike, which will be implemented on VIP and first- and second-class tickets, would come into effect immediately after the end of Ramadan (around mid-June). Transport Minister Hisham Arafat had previously said that ticket prices would rise at the start of the new fiscal year in July. Ticket prices will continue to rise gradually over the years as railway services are upgraded and developed under the government’s plan to overhaul the sector, sources tell the newspaper.

Commuters, companies still adjusting to hike in Cairo Metro ticket prices: This comes just days after the Transport Ministry raised ticket prices for the Cairo Metro by more than 3x, which officials said was necessary to meet rising costs and continue working on metro system upgrades. Cairo saw small, impromptu protests over the weekend, leading authorities to deploy police inside and outside metro stations yesterday, Reuters reports. Some private companies are subsidizing Metro tickets for their employees salaries are adjusted to help them deal with rising transport costs, Al Masry Al Youm reports.

On a related note, Arafat has been discussing additional funding for railway and river transport projects with a World Bank delegation that is currently in town, according to Al Mal. The World Bank is already providing Egypt with more than USD 500 mn in separate loans for railway development projects.

LEGISLATION WATCH- Finance Ministry working on law to ease transition to cashless economy: The Finance Ministry and central bank are working together to draft legislation to help ease the the state with its goal to transition to a cashless economy, government sources reportedly said yesterday. The law, which could go into effect during FY2018-19, would set limits on the amount of cash that government agencies can receive or pay in a single transaction. A suggestion currently under study sets a ceiling of EGP 20,000 per transaction, according to the sources. The government has been taking steps to gradually decrease the rate of cash transactions, based on a number of resolutions adopted during a National Payments Council meeting last year, which included drafting legislation to govern non-cash payments and transactions, developing a strategy for e-governance, and making e-payment options available to public sector employees. The move is part of the state’s wider financial inclusion strategy.

In other legislative news yesterday, the House of Representatives gave a preliminary nod to the law establishing the Upper Egypt Development Authority, as well as that governing clinical trials.

Laws on public surveillance, road management recalled from House: House Speaker Ali Abdel Aal also announced that the Ismail Cabinet has recalled two pieces of legislation it had sent to Parliament for review, including one on public surveillance and another on road network management, saying that both are covered by other, existing laws, Al Masry Al Youm reports.

Also yesterday: The House Housing Committee resumed its review of a temporary law to settle building code violations, Al Shorouk reports. Members of the committee disagreed over Article 1 of the legislation, which would not allow settlements for buildings erected on agricultural land. Some suggested including exceptions for land in new urban communities, but the committee ultimately did not reach consensus on the issue. It remains unclear why the committee is currently discussing the legislation, after having agreed in February that it cannot pass without amendments to the Unified Building Code. Both laws would have to pass together as they are too closely intertwined, the committee said at the time.

EARNINGS WATCH- Credit Agricole Egypt reported a jump in net profit to EGP 601 mn in 1Q2018, up from EGP 467 mn in the same period last year, according to a regulatory filing.

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Image of the Day

Misr International Films is restoring 20 films by co-founder and world-renowned Egyptian director Youssef Chahine to mark the 10th anniversary of his passing, Screen Daily reports. Beginning with his first film Baba Amin (1950), MIF will enhance, digitize and add subtitles to all of Chahine’s works to ensure they reach as wide an audience as possible. The company plans to have all the films ready by September to be screened in retrospectives at La Cinematheque Française in Paris and Zawya Cinema in Cairo.

Chahine’s El Massir (1997) screened in Cinema de la Plage last night as part of Cannes Film Festival Classics. “We’re especially happy that the Cannes screening will be open to the public as Chahine always cared about the films reaching their audience,” MIF said ahead of the event.

Egypt in the News

The Palestinian conflict topped coverage of Egypt in an otherwise slow news day for Egypt in the foreign press. Newswires, including the Associated Press, are noting a visit by Hamas leader Ismail Haniyeh and other top officials from the group to Cairo yesterdayto discuss ways of keeping a massive anti-Israel rally today from getting out of hand. The rally to protest the opening of a US embassy in Jerusalem is set to take place along the borders separating the Gaza strip from Israeli-controlled territories. Israel, meanwhile, put together a “series of festivities” yesterday to celebrate the new embassy, which was attended by Ivanka Trump and snubbed by a large number of diplomats, according to the newswire.

The international press also took note of an opinion piece suggesting that President Abdel Fattah El Sisi could seek a third term in office. The piece, was written by alleged El Sisi confidant and Al Akhbar Chairman Yasser Rizk. While Rizk did not directly call for constitutional change to allow the president to seek a third term, he did note that time was running out for another strong leader to emerge in the next four years. “Suggestions that El Sisi be allowed to stay in office beyond eight years are not new — they were made last year by loyal lawmakers and media figures before they abruptly ended — but Rizk’s renewal of the topic carries additional weight because of his closeness to the president,” writes the AP’s Hamza Hendawi.

Other stories worth noting in brief this morning:

  • The Cairo Criminal Court acquitted yesterday two police officers of beating to death a detained lawyer in 2015, overturning a previous ruling sentencing them to five years in prison, according to the AP.
  • New malware known as ZooPark is targeting Android device users in Egypt, Jordan, Morocco, Lebanon, and Iran, according to research picked up by DNA India.

On Deadline

Had parents been involved in the process, the K-12 educational reform plan would have been easier to swallow: The Education Ministry’s drive to reform the country’s public educational system might have encountered less resistance had parents and other stakeholders been involved in the decision-making process, Salma Hussein suggests in a column penned for Al Shorouk. Hussein commends Minister Tarek Shawki’s ambitious plans, saying that his intentions are evidently noble, but suggests that the proposed system could have been tweaked slightly to take parents’ and students’ concerns into consideration before its final form was presented to the public.

Worth Watching

Moroccan rapper La Fouine is paying tribute to his favorite football star Mohamed Salah with a song that had over one mn views mere hours after its release earlier this week, Al Arabiya reports. The popular rapper proudly dons his Mo Salah t-shirt for the music video (watch here, runtime: 3:27).

The football star just won the Premier League’s Player of the Season award, after setting the record for most goals scored in the 38-game season, with 32 goals, BBC reports.

Energy

Electricity Ministry plans to raise renewable energy projects’ domestic component requirement

The Electricity Ministry is reportedly planning to increase the minimum local component requirement in future contracts for renewable energy projects, ministry sources tell Al Masry Al Youm. The minimum requirement for wind projects will be set at 10% initially and gradually increase to 40%, while that for solar power projects will be set at 30%.

Manufacturing

Mexican companies plan two projects in Alexandria and the Mediterranean

Mexican steel pipes manufacturer TAMSA is looking to get in on a gas production project in the East Mediterranean, according to Mexican ambassador to Cairo Jose Octavio Tripp. The company Polymers of Mexico also reached an agreement with the General Authority for Freezones and Investment to establish two plastic processing plants in Alexandria, he tells Al Mal without elaborating.

Health + Education

School students to be taught morality from a textbook

The government will reportedly introduce a new textbook to teach morality at schools across the country with the start of the new academic year in September. The new textbook is part of a wider effort to “clamp down on religious extremism,” by teaching students about “good behavior and tolerance,” says the Arab Weekly, adding that the textbook was prepared by the Religious Endowments Ministry and has reportedly been approved by Al Azhar.

Real Estate + Housing

Amaken to invest EGP 500 mn this year in Ain Sokhna’s Seven Stars resort

Real estate developer Amaken is planning to invest EGP 500 mn this year in its new Seven Stars tourist resort in Ain Sokhna, according to Mohamed Tarek, the CEO of project manager Distance Studio Consultants. The project is set to be complete in 2021. Phase three of the resort, which will include a hotel, will cost another EGP 200 mn.

Tourism

Egyptian Airport Co. to complete phase one of Sharm Airport expansion in two months

The Egyptian Airports Company is aiming to complete the first phase of planned expansions at the Sharm El Sheikh airport in two months’ time at a total cost of EGP 450 mn, Chairman Mohamed Sallam tells Al Shorouk. The company is also working on a new terminal at Alexandria’s Borg El Arab Airport with Japanese funding, as tourists arrivals rise steadily, he adds.

Telecoms + ICT

SICO to export locally-made smartphone to UAE

SICO Technology will begin exporting its Egyptian-made smartphone to the UAE, Chairman Mohamed Salem tells Al Shorouk. The company, which received approvals from the UAE’s telecoms regulator on the first batch of 1,000 devices, plans to “continue expanding abroad and exporting to Arab and African countries,” he adds. The Android-powered Nile X went on sale in Egypt back in February with six models ranging in price from EGP 999-4,200.

Banking + Finance

Brokerages can keep electronic five-year client records

Financial Regulatory Authority (FRA) Vice Chairman Khaled El Nashar appears to have promised brokerages that it will allow them to hold electronic records of customer transactions over five years after closing a client’s account, according to Al Mal. The pledge came in response to pleas by the securities division of the Federation of Egyptian Chambers of Commerce that FRA amend the executive regulations of the Capital Markets that force them to keep paper records for client transactions for a period of five years after an account is closed — an expensive burden on brokerages. El Nashar had said that the final draft of the regs would be ready last week. Among the stuff we’re expecting to see included in the regs are procedures for the issuance of sukuks. Less clear is whether the FRA will introduce rules on short-selling or short-term bonds.

Banque Misr to establish new micro-financing arm

Banque Misr is planning to establish a new micro-financing arm to the government’s financial inclusion strategy and also expand its SME lending portfolio, Vice Chairman Akef El Maghraby tells Al Masry Al Youm.

Sports

Egypt’s Al Ahly arrives in Uganda ahead of KCCA encounter

Egypt’s Al Ahly Football Club team arrived in Uganda on Saturday for the CAF Champions League group A encounter with Uganda’s Kampala Capital City Authority (KCCA) Football Club, Kawowo reports. The game is scheduled for Tuesday at 3:00pm CLT.

On Your Way Out

Arkan Plaza to become Egypt’s first mall to run entirely on solar power by 2021: KarmSolar will build solar power stations with a total generation capacity of 20 MW at Arkan Plaza in Sheikh Zayed that should see the mall rely entirely on solar energy by 2021, the company announced in a release (pdf). The project — the company’s first contract for a commercial retail space — will be implemented by KarmSolar subsidiary KarmPower. “We are expecting this to become one of our main business lines as more developers look towards energy efficiency,” KarmPower General Manager Ibrahim Metawie said. The value of the agreement was not disclosed.

Egyptian startup beXel wins second place at RDPETRO: Egyptian startup beXel won second place at the International Research and Development Petroleum Conference and Exhibition (RDPETRO) in Abu Dhabi, according to Oil Review Middle East. The cloud-based app allows users run instant field tests on various oil and gas equipment.

You can run, but you can’t hide: Security forces arrested former TV presenter and MP Tawfik Okasha yesterday to carry out his one-year prison sentence for forging his PhD diploma after a misdemeanor court rejected Okasha’s appeal against the initial ruling from last year, Youm7 reports.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.75 | Sell 17.85
EGP / USD at CIB:
Buy 17.74 | Sell 17.84
EGP / USD at NBE: Buy 17.69 | Sell 17.79

EGX30 (Sunday): 17,184 (+0.2%)
Turnover: EGP 814 mn (30% BELOW the 90-day average)
EGX 30 year-to-date: +14.4%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 0.2%. CIB, the index heaviest constituent ended up 0.5%. EGX30’s top performing constituents were Qalaa Holdings up 5.4%, Egyptian Resorts up 5.0%, and Egyptian Iron & Steel up 2.7%. Yesterday’s worst performing stocks were Eastern Co down 2.9%, TMG Holding down 1.9%, and Kima down 1.4%. The market turnover was EGP 814 mn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +55.4 mn
Regional: Net Long | EGP +5.2 mn
Domestic: Net Short | EGP -60.6 mn

Retail: 74.5% of total trades | 77.5% of buyers | 71.4% of sellers
Institutions: 25.5% of total trades | 22.5% of buyers | 28.6% of sellers

Foreign: 8.2% of total | 11.6% of buyers | 4.8% of sellers
Regional: 8.8% of total | 9.1% of buyers | 8.5% of sellers
Domestic: 83.0% of total | 79.3% of buyers | 86.7% of sellers

WTI: USD 70.70 (0.00%)
Brent: USD 77.08 (-0.05%)

Natural Gas (Nymex, futures prices) USD 2.82 MMBtu, (+0.50%, June 2018 contract)
Gold: USD 1,318.90 / troy ounce (-0.14%)

TASI: 8,023.01 (+1.37%) (YTD: +11.02%)
ADX: 4,424.99 (-0.29%) (YTD: +0.60%)
DFM: 2,892.05 (+0.36%) (YTD: -14.18%)
KSE Premier Market: 4,790.27 (-0.15%)
QE: 8,816.84 (+0.77%) (YTD: +3.44%)
MSM: 4,686.56 (+0.11%) (YTD: -8.09%)
BB: 1,271.09 (+0.03%) (YTD: -4.55%)

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Calendar

14 May (Monday): Flat6Labs’ Cairo Spring Demo Day, InterContinental Semiramis, 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. © 2018 Enterprise Ventures LLC.