Sunday, 3 June 2018

Water prices to rise nearly 50%

TL;DR

What We’re Tracking Today

We are officially past the halfway mark in Ramadan, meaning it is not unseemly to start making Eid and / or summer vacation plans. Just sayin’.

President Abdel Fattah El Sisi was sworn in yesterday, marking the start of his second term in office. Speculation about a possible cabinet shuffle will begin any instant now.

Of random interest only to us: One of the smartest, wittiest human beings we know marks a birthday today. Meanwhile, the resident 10-year-old ‘graduates’ this morning from elementary school. We’re verklempt. She joins her cousin, who graduated high school this weekend in front of the Pyramids. For, verily, we are old.

Speaking of age, part I… Fortysomethings are taking power in developed economies, but here in emerging markets, we’re clinging to “seasoned politicians,” the Financial Times writes.

Speaking of age, part II… Canon has sold its last film camera. It was an EOS-1V. For the one of us whose on staff whose professional career began with a film camera in one hand and a reporter’s notebook in the other, it’s the end of an era. Petapixel has the basics.

Speaking of wit: The Financial Times thinks “being funny at work is good for business.” That we think business and humor go together should not surprise even the newest of readers. But the FT’s “here’s how you make a joke” recipe is, well, stiff.

Egypt is catching up with its counterparts in Asia,who are riding out the slump in EM better than are their African peers, data by Bloomberg finds. While South Africa is at the bottom of the scorecard — which lists 21 developing economies in order of safety based on metrics that include GDP, current account deficit, sovereign credit ratings, and bond and stock valuations — “Pakistan and Egypt have seen the biggest gains in their scores compared with the levels at the end of 2016,” says Bloomberg, noting that “Egypt benefited from a credit rating upgrade and higher reserves.”

Abraaj facing bankruptcy thanks to Kuwait’s pension fund? Kuwait’s pension fund is “trying to force private-equity firm Abraaj Group into bankruptcy proceedings over allegedly not repaying a USD 100 mn loan,” the Wall Street Journal reports, citing court documents filed on 22 May in the Cayman Islands. The fund argues that Abraaj is “substantially insolvent” and unable to repay the loan plus some USD 7 mn in interest by today’s due date. Adds the Journal: “A bankruptcy fight with Kuwait could complicate efforts by other creditors and stakeholders to restructure Abraaj’s debt pile and to bring in a strategic buyer that could help stabilize the fund, said a person familiar with the matter. Abraaj Group owes banks more than USD 1 bn, the person said.”

Expect plenty of chatter about geopolitics this week as people chew over developments including:

  • The Donald has started a trade war with allies including Canada and the European Union, imposing tariffs on steel and aluminum that prompted allies to impose sanctions that will hit sensitive US districts in an election year. The G7 finance ministers, meeting in Canada, condemned Washington’s move. (CNN | FT | WSJ | NYT | BBC)
  • The US-North Korea summit is officially back on for 12 June in Singapore after US President Donald Trump spent two hours in the White House with an envoy from the DPRK. (BBC)
  • Spain and Italy have new leaders. Spain’s still faces the challenge of Catalan separatism, and the shakeup in Italy still has the potential to roil the EU. (Bloomberg)

Also on the subject of geopolitics: Read how the “Mideast power struggle” is playing out in the Horn of Africa, via the Wall Street Journal.

Your Ramadan rundown for today:

Bank hours run 09:30 am to 01:30 pm for customers and from 09:00 am to 02:00 pm for employees, CBE announced.

The EGX is running shorter trading hours. The trading session kicks off at 10:00 am, but closes at 1:30 pm. Tap or click here for the full schedule.

So, when do we eat? For those of us observing, Maghrib is at 6:53 pm CLT today. You’ll have until 3:09 am tomorrow to finish your sohour.

In miscellany today for your consideration pre-iftar:

Would you let your 10 year old stay home alone — or walk to school without an adult? Does the mere question make you uncomfortable? That’s because we, as overprotective helicopter parents, are raising kids exactly the opposite of how we were brought up, back when we were allowed to walk to school, hang out at the nadi for hours on end without supervision, and generally grow as independent human beings. The headline in the WSJ’s weekend read is US-centric, but it applies to just about everyone we know in their 30s and 40s here in Egypt, whether they’re Egyptian or expats. Read: The Overprotected American Child.

What We’re Tracking This Week

Apple’s World Wide Developer Conference gets underway tomorrow in California with a keynote speech at 10am Pacific time (that’s 7:00pm CLT tomorrow). 9to5Mac has a rundown of what you can expect. As things look now: Iterative improvements with iOS 12 as tentpole features are pushed to next year to allow Apple engineers to focus on quality, and little in the way of new hardware.

On The Horizon

The central bank’s monetary policy committee will keep key interest rates unchanged when it convenes for its final meeting for the current fiscal year on 28 June, Standard Chartered’s Bilal Khan suggested, after previously speculating that the MPC would move to cut rates by 100 bps, according to FX Street. Khan had said that the CBE is more likely to adopt a more prudent approach in order to counteract the effect of a rise in inflation as additional energy and fuel subsidy cuts come into effect with the start of FY2018-19 in July.

Saudi Arabia is far more likely than not to win upgrade to MSCI emerging markets status later this month, EFG Hermes suggests, according to a note picked up by the UAE’s The National.

Enterprise+: Last Night’s Talk Shows

Talk shows hosts are on hiatus. They will be back before you know it. Meanwhile, we’re enjoying the respite.

Speed Round

Speed Round is presented in association with

It is about time: Gov’t raises piped water prices by up to 46.5%. Prime Minister Sherif Ismail signed off on Thursday on raising piped water prices by as much as 46.5%, with the new prices set to come into effect retroactively to last month’s consumption. The new charges will be applied across all consumption tiers: Prices for residential use now range from EGP 0.65 to EGP 3.15 per cubic meter depending on consumption, up from EGP 0.45-2.15 previously, according to the price breakdown published in the Official Gazette. Prices for business range from EGP 3.30 to EGP 10.00, depending on industry and consumption levels. Sewage fees — which are set as a percentage of water prices — have increased to reach 75% of the water price for residential use, and to 98% for businesses. The government had last raised water prices by as much as 50% in August. The price hike comes ahead of anticipated cuts to fuel and electricity subsidies.

INVESTMENT WATCH- Foxconn looking to manufacture and export electronic parts from Egypt. Picking up where we left off on Thursday: Foxconn Group is looking at how to integrate Egypt into its global supply chain. Trade and Industry Minister Tarek Kabil met with a delegation of top executives from the Taiwanese electronics maker to discuss the details of a new manufacturing plant the company is looking to set up in Egypt, according to a ministry statement. The plant would produce components for electronic devices that would be exported out of Egypt to be used by other global brands in their factories worldwide. The delegation from contract manufacturer Foxconn — whose client list includes Apple, Samsung and Sharp — had met Prime Minister Sherif Ismail last week to discuss the potential investment, the value of which has yet to be announced.

Foxconn could likely team up with the Military Production Ministry on the new factory. Execs from Foxconn sat down with Military Production Minister Mohamed El Aassar on Thursday to explore a potential manufacturing partnership using ministry facilities, Al Mal reports. Foxconn reps had met with the Arab Organization for Industry and ICT Minister Yasser El Kady earlier last week to discuss a possible collaboration to locally manufacture tablet devices for the Education Ministry, which will be distributing them free of charge to both public and private school students at the start of the new academic year in September.

TE to set up shop abroad by year’s end: State-owned fixed-line monopoly Telecom Egypt is eyeing international expansion and will “provide mobile phone services in a foreign country by the end of 2018,” Reuters quotes CIT Minister Yasser El Kady as having said last Thursday. El Kady did not provide any detail on where TE plans to set up shop. The news comes as TE has been in the market for loans to finance planned expansion and infrastructure development, recently signing two USD 200 mn agreements, one each with Huawei to help roll out its 4G network, and the African Export-Import Bank to reportedly finance the USD 90 mn acquisition of Orascom Telecom’s MENA Cables.

Also this weekend, El Kadi said that mobile network operators would be issued additional frequencies in two months’ time, according to Al Mal. The national telecoms regulator had said last year that it was considering issuing a tender for a “limited set of bands” of additional 4G frequencies after MNOs asked that more bandwidth be made available. The line then was that arranging for additional frequencies would “take some time.”

New data center: This comes as the ICT Ministry gears up to sign an agreement next week with an unnamed international firm to build a state-of-the-art data center in Borg El Arab, El Kadi also said without elaborating.

INVESTMENT WATCH- Abraaj sold 35% stake in CIRA for more than USD 20 mn: Abraaj Capital reportedly sold last week its 35% stake in education outfit Cairo for Investment & Real Estate Development (CIRA) back to its founding shareholders — the family of Hassan El Kalla — in a transaction valued at over USD 20 mn, sources close to the matter said. We had noted reports back in April that Abraaj selling its investment in CIRA to Social Impact Capital Ltd — a vehicle belonging to the Kalla family — ostensibly to lighten the PE giant’s global footprint following allegations that it misused funds from a USD 1 bn healthcare fund. The founding shareholders’ buyback comes as CIRA eyes a potential IPO as early as 4Q2018.

Advisers: EFG Hermes and Al Tamimi Law were reportedly buy-side advisors, while Abraaj tapped the UK’s Allen & Overy.

INVESTMENT WATCH- Castrol, TAQA to establish JV to manufacture and distribute engine oil in Egypt: BP announced on Thursday (pdf) that subsidiary Castrol will establish a joint venture with Qalaa Holdings’ TAQA Arabia to manufacture and distribute a range of engine oils in Egypt. The new company, Castrol Egypt Oil, will be the sole authorized distributor of Castrol products in the country and will target both the commercial vehicle and passenger car markets. Details on the size of the manufacturing outfit and value of expected investments were not disclosed. The move comes as part of BPs efforts to expand its activities in North Africa, particularly in Egypt, according to BP’s Regional Director for North Africa, Hisham Mekkawi.

EFG Hermes topped the EGX’s brokerage league table for May, seeing its market share rise to 20% from 17.7% in April, according to figures released by the Egyptian Exchange (pdf). CI Capital came second with a market share of 9.9%. Arqaam Capital came in third with a market share of 7.9%, followed by Beltone Financial (6.4%) and our friends at Pharos Holding (4.8%).

Total auto sales jumped 35.9% y-o-y in the first four months this year, with around 49,062 units sold, according to figures from the Automotive Information Council (AMIC) picked up by Al Mal. Passenger car sales grew 33% in 4M2018, with Chevrolet topping the charts with a 25.2% market share, followed by Hyundai (17%), Nissan (16.4%), Renault (7.2%), Toyota (6.9%), and Kia (4.3). Truck sales soared 65.8% y-o-y for the period, while bus sales saw a slight increase of 4% y-o-y.

EXCLUSIVE- Expect the FY2017-18 budget to target a deficit of 10.2%, up from the 9.8% initially forecast: The Finance Ministry will reportedly hike its projected budget deficit to 10.2% for the current FY2017-18 from an initial target of 9.8%, government sources tell Enterprise. This is still an improvement over the previous fiscal year’s deficit of 10.9%, those sources made sure to note. The amendment comes after the Ismail Cabinet approved an EGP 70 bn overdraft for the FY2017-18 state budget last week to cover “necessary expenditures.”

It was mostly debt service and some oil. None of this comes as a surprise: The overrun was largely due to rising debt service costs and higher oil prices. Egypt has reportedly been importing fuel at USD 75/bbl, up from an estimated USD 55/bbl in the budget.

IMF is not worried: The IMF is not causing a stir over the issue. “The IMF is understanding and is taking into consideration the changing global macro climate, so long as the economic reform program presses along,” one source close to cabinet said.

AfreximBank is planning to provide as much as USD 1 bn in funding to Egypt this year, Executive Vice President Amr Kamel said at the bank’s conference on intra-African trade on Thursday. The bank is currently eyeing several new loan agreements with public and private sector companies in Egypt, including Elsewedy Electric, according to Kamel. AfreximBank has already provided the Egyptian General Petroleum Company and Telecom Egypt with USD 200 mn each and is about to disburse a USD 95 mn loan to the National Bank of Egypt (NBE), Kamel said. NBE and AfreximBank had signed a USD 300 mn three-year financing agreement in April 2017 to support an SME funding initiative launched in 2016. NBE has already received USD 200 mn of the financing, as we noted last week.

Egypt’s shored-up FX reserves have helped the economy absorb the effects of external shocks, IMF Mission Chief for Egypt Subir Lall said in remarks to MENA carried by Al Ahram. Tough global financial conditions have had a relatively muted effect on Egypt in comparison to other countries, particularly emerging markets, as Egypt has been working on improving its monetary policy and overall economic conditions, Lall said. Lall continued to sing the praises of the Ismail government’s economic reform program, saying that rising growth, dropping unemployment rates and other key metrics are clear signs of improvement. He also said that reforms will continue bearing fruit by bringing down inflation and debt levels, reducing Egypt’s current account deficit, and accelerating economic growth. Egypt’s net foreign reserves grew to USD 44.03 bn in April, marking an all-time high.

Meanwhile: Egypt’s M2 money supply grew at a rate of 21.36% y-o-y in April to reach EGP 3.38 tn (USD 189.36 bn), the central bank announced on Thursday, Reuters reports.

Egypt rejected a Russian wheat shipment on Thursday, saying it contained higher levels of ergot than is legally allowed. The 63,000-tonne shipment “contained 0.06% ergot, just above the 0.05% limit permitted according to Egypt’s state tender rules,” Agriculture Ministry spokesperson Hamid Abdel Dayem said last week, Reuters reports. The cargo will likely be re-exported back to Russia after quarantine officials refused a reexamination request, which the seller — Dubai-based GTCS Trading DMCC — is still trying to push, arguing that the grain is up to spec. Re-shipping would also “prove costly and difficult” since silos in the Safaga port, where the cargo is being held, are not equipped with the necessary equipment for the job, they add. Officials from Russia’s main agricultural agency, Rosselkhoznadzor, arrived in Cairo yesterday to inspect the shipment, which they said they are sure “meets Egypt’s requirements.”

Background: This comes just days after the Higher Administrative Court shot down an attempt to revive the zero-tolerance policy for ergot in wheat shipments, reinforcing a current policy of accepting imports with 0.05% ergot contamination. At least four other contracted wheat shipments failed to arrive to Egypt in recent weeks from Dubai-based trader AOS “amid payment disputes.”

These “delivery disruptions” could cause Egypt to pay a much higher price for wheat imports in the future, just like in the last two years, notes Bloomberg. “Egypt is playing with fire,” says BGC Partners’ Pierre Tronc. “The market is now very high compared to what they bought.” The US Department of Agriculture had said in a report last week that Egypt’s wheat policies would cost it an extra EGP 1.4 bn on imports this year.

In other news of interest to commodities players: Prosecutors have charged GASC’s vice chairman with alleged financial and administrative improprieties. The Administrative Prosecution Authority has brought charges of alleged financial and administrative wrongdoing against General Authority for Supply Commodities (GASC) Vice Chairman Ahmed Youssef, Reuters reported. A document from the APA “details charges including the alleged unauthorised payment of bonuses, receiving money ‘against the regulations’, and allowing a financial controller to attend tenders without the necessary government approval.” A case had been submitted against Youssef at the Council of State earlier this year after being questioned last year as part of an investigation that began in 2016, according to the APA’s spokesman. The Administrative Control Authority had arrested last week Food Industries Holding Company head Alaa Fahmy and three Supply Ministry officials for allegedly taking EGP 2 mn in bribes from an unnamed commodities firm in return for issuing direct supply orders and facilitating payments. GASC is the world’s largest wheat buyer.

The latest episode of the ergot soap opera comes as Russian authorities agreed to lift a 2015 ban on the import of Egyptian potatoes, according to a Trade and Industry Ministry statement. The ban, which was imposed on potatoes originating from eight farming areas in Egypt due to brown rot infections, will officially be lifted as of 6 June. Russian and Egyptian authorities had reached a final agreement on the sidelines of the Egyptian-Russian Economic Committee meetings held in Moscow last month. The two sides reportedly also agreed to avoid imposing large-scale bans should the issue arise again in the future, and to limit any necessary bans to specific producers.

IDA to take a second look at higher fees for industrial licensing: IDA to The Industrial Development Authority (IDA) is said to be reexamining a new set of higher fees it issued last week amid complaints from businessmen and investors, the head of Parliament’s SMEs Committee, Mohamed El Morshedy, tells Ahram Gate. The IDA — which upped the fees it charges investors and manufacturers for issuing licenses and other services — was tasked with revisiting the move after angry investors complained to Trade and Industry Minister Tarek Kabil in a meeting, according to Morshedy, who expects some charges to be reduced in order to accommodate small businesses. Investors associations had sent a formal complaint to the Ismal Cabinet claiming the move was bad for business. Fees for amending industrial registries jumped to EGP 3,800-37,770, while fees for issuing temporary licenses increased to EGP 4,700-23,450. Fees are determined based on the size of the business or project. It’s unclear when the IDA intends to make a decision.

Meanwhile, the IDA is reportedly tendering a total 3 mn sqm to investors and industrial developers this year, a source from the authority tells Al Mal. 2 mn sqm will be located in Borg El Arab and another 1 mn sqm will be tendered off in Upper Egypt. The IDA is expected to issue an official map of its land tenders for 2018 this month. In related news, the IDA has received five offers from different companies looking to set up iron manufacturing plants, Abdel Razek said, without naming the companies.

One project it isn’t happy about is China’s CGCOC construction group’s industrial zone in New Alamein City, whose MoU it signed with the Housing Ministry. The IDA says the agreement violates a recently-passed law that makes the Industrial Development Authority (IDA) the sole entity authorized to allocate land for industrial zones, IDA head Ahmed Abdel Razek said on Thursday, Al Masry Al Youm reports. The IDA has raised its concerns with the Housing Ministry and the two sides are working on resolving the issue.

El Sisi sworn in for second term in office, highlights new health and education systems, fight against terror as priorities: President Abdel Fattah El Sisi vowed in front of the House of Representatives to focus during his second term on building Egypt’s human capital through the new healthcare and education systems that will be introduced in the coming months. Fighting terrorism is also at the top of his agenda, he said, according to an Ittihadiya statement. His administration is also focusing on Egypt’s external affairs by working on cultivating “balanced” ties with allies while ensuring that none interferes in Egypt’s internal affairs, El Sisi said in a speech after being sworn in.

El Sisi’s swearing in tops coverage of Egypt in the international press this morning. Most drew a line between his inauguration and (a) a wave of arrests targeting activists and (b) popular resentment of rising prices. “The persistently high cost of everything from food to transport is fueling resentment among ordinary Egyptians, though they have few outlets to express their frustration. But the depth of the discontent is hard to gauge, since protests are limited and there is no polling,” Jared Malsin and Amira El Fekki write for WSJ.

How they’re spinning it: El Sisi vowed in his address yesterday to include all Egyptians in the path towards development “except those who chose violence, terrorism and extremist thought as a way to impose their will,” Reuters reports. Authorities have arrested several activists and opponents of the regime over the past several weeks, the Washington Post notes. The newspaper’s editorial board launched a broadside against El Sisi for the arrests, which it says is evidence of the president’s “weakness.” The arrest of blogger Wael Abbas in particular is worth noting as evidence that social media does not provide a safe space for free expression, the Hill’s David A. Super says. Super points as evidence to Twitter shutting down Abbas’ account after Egyptian authorities filed successive complaints about his tweets.

The international backlash comes as an Egyptian University of Washington student was detained on charges of spreading false news and belonging to a terrorist group after conducting research on Egypt’s judicial system, according to the Seattle Times. A French journalist was also barred from entering Egypt “without a clear explanation,” according to RFI.

Supreme Constitutional Court declares unconstitutional a clause in the controversial NGOs Act: A clause of the NGOs Act granting the Social Solidarity minister jurisdiction to disband the boards of NGOs is unconstitutional, the Supreme Constitutional Court decreed yesterday, Al Masry Al Youm reports. According to the court, the constitution protects the freedom of NGOs to form their own boards and requires a legal order to disband the organization or its board of directors. The House of Representatives had signed off on the bill back in 2016. Among other things, it forbids NGOs from participating in political activities and requires organizations to receive government approval prior to receiving foreign funding. President Abdel Fattah El Sisi signed it into law in May 2017. The act has since come under fire several times, including from Republican senators and the US Congress’ human rights commission.

Egypt is home to the second highest number of major hotels in Africa, with 300 established hotels and resorts across its major cities, a new report by real-estate consultancy firm Knight Frank finds. South Africa is in the lead with 430 hotels (or 30% of the continent’s total hotels), with Morocco (153) and Tunisia (103) in third and fourth place, respectively. “From a Middle Eastern perspective, we are beginning to see something of an uptick in the activities of renowned investors and developers building portfolios of properties across key hospitality hotspots, particularly Morocco and Egypt in North Africa, as well as emerging locations in Sub-Saharan Africa,” the report says, pointing to a new Fairmont City Stars in Sharm El Sheikh that is in Accor Hotels’ pipeline for 2018. Various hoteliers are in the process of launching new projects in Egypt, including the Marriott and Hilton. You can read the full report here (pdf).

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Image of the Day

American singer-songwriter Usher was in Siwa for some R&R last week. A photo he posted on his Facebook page on Wednesday showed him happily floating in a Siwan hot spring. Egypt Independent has the story.

Egypt in the News

The swearing-in yesterday of President Abdel Fattah El Sisi for a second term in office tops coverage of Egypt in the international media this weekend. We have chapter and verse in Speed Round, above.

Meanwhile: Ramadan mosalsalat are a “bellwether for politics” in Egypt and other Arab countries, where “governments wield political and financial power over producers,” the Economist says. The magazine points to the 2015 hit series “Harat Al-Yahoud,” which portrayed Egyptian Jews in the 1940s as “patriotic and pious,” as a match with Egypt’s recently warming ties with Israel. This year, mosalsalat are fixated on terrorism and earning viewers’ sympathy for security forces, which mirrors the real-life struggles Egypt is facing with the Islamist insurgency, the magazine notes.

Other headlines worth noting in brief include:

On Deadline

The only thing on the brains of the nation’s columnists: What does President Abdel Fattah El Sisi’s second presidential term have in store for Egypt. The president begins his next four years with several key problems, including shoring-up his waning popularity while pushing ahead with necessary reforms, all of which need better governance to be dealt with correctly, Khaled Sayed Amin writes for Al Shorouk. El Watan’s Emad El Din Adib and Al Ahram’s Abdel Azim El Bassel each have a wishlist they’re sending to the president on behalf of the populace, including an end to high inflation, seeing tangible effects of economic reforms, and the resolution of Egypt’s ongoing tussle over the Grand Ethiopian Renaissance Dam. Meanwhile, Emad El Din Hussein sees reason to be optimistic that the next four years will see the country’s political space opening up and allowing for dissenting opinions to be expressed freely, noting that El Sisi has specifically mentioned this goal more than once.

Diplomacy + Foreign Trade

Foreign Minister Sameh Shoukry and Intelligence Chief Abbas Kamel met with their Jordanian counterparts and Palestinian officials in Cairo on Thursday to discuss the latest developments in the situation in Gaza, after Egypt brokered a ceasefire last week that put an end to a flare-up of violence that erupted after the US moved its embassy in Israel to Jerusalem.

Defense Minister Sedki Sobhi met with a US congressional delegation in Cairo to discuss joint security cooperation, according to an Armed Forces statement on Thursday. The Chairman of the House Oversight and Government Reform Committee, Darrell Issa, led the delegation.

Basic Materials + Commodities

Obour Land, Domty plan to set 2-4% price hike

Cheesemaker Obour Land is planning to raise prices by 2% in 2H2018 following a planned hike in energy prices, Chairman Ashraf Hamad tells Al Mal. Pharos Holdings’ Hadi Medhat also expects Domty to raise prices by 4% to cope with an expected increase in costs.

Health + Education

18 companies express interest in phase two PPP schools

At least 18 private companies have expressed interest in developing schools under phase two of the government’s public-private partnership framework, Education Minister Tarek Shawki tells Al Mal, without naming the potential bidders. Five other companies had already won tenders to build 21 schools as part of phase one of the project, on which work is expected to begin as soon as the Cabinet signs off on tender results. The first of these schools should open their doors to students by next year, according to Education Ministry advisor Sherine Matar. The government is looking to set up 200 schools under PPP.

Real Estate + Housing

Heliopolis Housing reaches EGP 15 mn settlement agreement with Magic Dreams

The Heliopolis Company for Housing and Development (HCHD) announced on Thursday (pdf) reaching a EGP 15 mn settlement agreement with Magic Dreams on the dispute related to the development of Merryland Park. HCHD has already received EGP 5 mn of the amount and is expecting to receive a similar payment 10 days’ time. The remaining EGP 5 mn will paid over four monthly installments, under the terms of the agreement. The companies had come to a preliminary understanding in February last year, where HCHD agreed to allow Magic Dreams to finalize the development of the Merryland Park, with the Defense Ministry acting as financial guarantor. They also signed two new leasing agreements for the park later the same year, which allowed Magic Dreams to settle its debts to HCHD at a 7% interest rate over the course of four years starting 1 October 2017.

Automotive + Transportation

EgyptAir Cargo set to fly its first plane to Chicago in November

EgyptAir Cargo is planning to fly its first weekly freight plane to Chicago this November, the company’s Chairman Bassem Gohar to Al Mal.  The new line is part of EgyptAir’s strategy to upgrade its fleet to serve a larger variety of purposes.

Banking + Finance

Al Ahly Capital eyes EGP 3 bn worth of EGX-listed stake sales

Al Ahly Capital is planning to divest stakes in a number of its EGX-listed subsidiaries worth EGP 3 bn “in the coming period,” Head of Investment Karim Aboul Naga tells Al Mal. The move comes as part of the restructuring underway ahead of the government’s privatization program, which begins this month. Al Ahly holds shares in a number of companies on the roster, including Sidi Kerir Petrochemicals, Alexandria Minerals and Oils Company, and Abu Qir Fertilizers. The investment bank plans to use the proceeds of the stake sales to enter new investments in health, agriculture, and non-banking financial services.

Egypt Politics + Economics

Supply Minister denies plans to raise subsidy card allowances

The government is not planning on increasing ration card holders’ monthly allowances next month, Supply Minister Ali El Moselhy tells Al Mal. Reports had emerged last month that the government is planning to roll out a EGP 15 bn social protection package in July, which would include a “marginal” increase in the monthly allowance ration card holders use to purchase subsidized commodities. Each card holder is currently given EGP 50 per family member each month to purchase commodities, in addition to 150 loaves of bread per person per month.

On Your Way Out

Saudi sports channels are reportedly planning to air all World Cup matches for free in the Arab world, Saudi journalist Ghazey Al Harthy tweeted on Wednesday, citing anonymous sources. “From now on, Arab viewers will no longer have to pay for expensive subscriptions in [Qatar’s] BeIN sports to watch the World Cup,” he said.

A US court has upheld a 2015 ruling clearing American rapper Jay Z of copyright infringement for sampling Baligh Hamdi’s Khosara Khosara, which was originally written for Abdel Halim Hafez, for his 1999 hit Big Pimpin, Reuters reports. The California court ruled that Hamdy’s nephew, Osama Ahmed Fahmy, did not have legal standing to sue Jay Z and producer Timbaland over his uncle’s 1957 song.

Assassin’s Creed is off to Greece after a successful run in Ancient Egypt. A leaked photo of promotional merchandise for the upcoming game has been making the rounds online, according to Irish tabloid Joe. Assassin’s Creed Odyssey is unlikely to come out before late 2018 or early 2019, TechRadar suggests.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.85 | Sell 17.95
EGP / USD at CIB:
Buy 17.85 | Sell 17.95
EGP / USD at NBE: Buy 17.8 | Sell 17.9

EGX30 (Thursday): 16,415 (-2.1%)
Turnover: EGP 3.3 bn (185% ABOVE the 90-day average)
EGX 30 year-to-date: +9.3%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 2.1%. CIB, the index heaviest constituent ended down 3.0%. EGX30’s top performing constituents were Telecom Egypt up 2.4%, Eastern Co up 1.4% and Juhayna up 0.9%. Thursday’s worst performing stocks were Egyptian Resorts down 4.3%, Global Telecom down 3.9%, and Elsewedy Electric down 3.9%. The market turnover was EGP 3.3 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +239.4 mn
Regional: Net Short | EGP -164.7 mn
Domestic: Net Short | EGP -74.6 mn

Retail: 23.0% of total trades | 24.5% of buyers | 21.4% of sellers
Institutions: 77.0% of total trades | 75.5% of buyers | 78.6% of sellers

Foreign: 49.7% of total | 53.3% of buyers | 46.1% of sellers
Regional: 14.1% of total | 11.7% of buyers | 16.6% of sellers
Domestic: 36.1% of total | 35.0% of buyers | 37.3% of sellers

WTI: USD 65.81 (-1.83%)
Brent: USD 76.79 (-0.99%)

Natural Gas (Nymex, futures prices) USD 2.96 MMBtu, (+0.34%, July 2018 contract)
Gold: USD 1,299.30 / troy ounce (-0.41%)

TASI: 8,161.08 (+1.89%) (YTD: +12.94%)
ADX: 4,605.04 (+1.05%) (YTD: +4.70%)
DFM: 2,964.13 (+1.89%) (YTD: -12.05%)
KSE Premier Market: 4,690.55 (-0.28%)
QE: 8,880.51 (-0.40%) (YTD: +4.19%)
MSM: 4,606.68 (+0.21%) (YTD: -9.66%)
BB: 1,265.80 (+0.40%) (YTD: -4.95%)

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Calendar

14 June (Thursday): 2018 World Cup kickoff match between Russia and Saudi Arabia, Moscow, Russia.

15 June (Friday): Egypt’s first 2018 World Cup match against Uruguay, Yekaterinburg, Russia.

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

19 June (Tuesday): Egypt plays against Russia at 2018 World Cup, St. Petersburg, Russia.

25 June (Monday): Egypt plays against Saudi Arabia at 2018 World Cup, Volgograd, Russia.

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

1 July (Sunday): Application deadline for the DigitalAG4Egypt Challenge.

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): Arqaam Capital MENA Investors Conference 2018, Four Seasons Resorts, Dubai.

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).

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