Wednesday, 13 June 2018

Electricity prices to rise an average of 26% as early as next month

TL;DR

What We’re Tracking Today

It’s a relatively quiet day in Egypt, but there’s plenty of global business and economic news to keep you on your toes as we slide into the last 48 hours of Ramadan.

Our good friends at Zooba have signed a franchise agreement that will see at least 20 branches of the capital city’s iconic casual dining chain open in the GCC. The agreement will see Khobar-based SADF Trading and Development Co. open 20 branches in Saudi Arabia and Bahrain over the next seven years, according to an emailed statement (pdf). “When we opened our first branch in Zamalek back in 2012, a Zooba in every major city in the world was the dream; today marks the first step towards making that dream a reality,” the statement reads. No further details were provided on the agreement or when and where the first branch outside of Egypt will be inaugurated.

We look forward to the end of Ramadan so that we may order Zooba’s hawawshi at 8am for a late breakfast. Yes, for breakfast. Zooba’s hawawshi, not Wheaties, is the breakfast of champions. Order it extra crispy (you may thank us later).

We’re still waiting for news of the incoming Madbouly cabinet. As of a few minutes before dispatch time, there was plenty of speculation in the domestic press on who was in and who was out, and absolutely nothing new to report. Government sources had primed the media to expect Prime Minister-designate Mostafa Madbouly to unveil the new Council of Ministers before the holiday long weekend.

Abraaj could file for provisional liquidation in the Cayman Islands as early as this week ahead of a court hearing for a liquidation petition filed by Kuwait’s Public Institution for Social Security and scheduled for 29 June. While the date for the filing is yet to be set, “a court-supervised provisional liquidation would allow Abraaj to restructure debt, negotiate with creditors and sell assets…[and] allow a moratorium on the holding company’s unsecured claims,” sources close to the matter tell Bloomberg. The company has been battling allegations it used investor funds for corporate purposes and is trying to restructure in a bid to settle debt obligations. Management had met with creditors last week, and there’s a USD 125 mn bid for the firm’s asset management arm in the works. The Financial Times quotes one person “close to the process” as suggesting that Abraaj has “no other option” but to file for provisional liquidation.

It’s not just the Kuwaitis who are gunning for Abraaj: The salmon-colored newspaper reports that Auctus Fund (probably this outfit) has also applied in the Cayman Islands for the winding up of Abraaj’s asset management arm. It is also claiming that a debt of just over USD 100 mn (about the same amount the Kuwaiti pension fund says it is owed) is yet to be repaid.

It’s Fed day: The US Federal Reserve’s Federal Open Market Committee will conclude its two day meeting today, wand the wags see an interest rate hike in the works in view of data showing inflation is still meeting Fed expectations and financial markets remaining calm despite rising global trade tensions. Emerging market central banks are keeping a close eye on what the Fed does; the Central Bank of Egypt next reviews rates on 28 June.

Trump and Kim Jong were in the same room and the world didn’t end. US President Donald Trump and North Korean leader Kim Jong Un met yesterday in Singapore in what the US State Department has described as an “epochal event of great significance in overcoming decades of tensions and hostilities.” The two leaders agreed to turn over a new leaf in their diplomatic relations, with Trump promising to suspend joint US military exercises with South Korea and Kim reaffirming his commitment to the “complete denuclearization of the Korean Peninsula.”

US State Secretary Mike Pompeo will take the lead on future talks, which will focus on implementing the outcomes of yesterday’s summit (The New York Times sums them up nicely here). The next meeting will be held “at the earliest possible date.” Egypt’s Foreign Ministry welcomed the positive developments from the summit in a statement yesterday, which was hailed as a step forward in defusing global tensions.

Emerging markets pioneer Mark Mobius is drooling over DPRK: The longtime Templeton boss, who has since gone on to found Mobius Capital Partners, is excited about investment prospects that would be opened up if North Korea became part of the global financial system. It’s not just a “build-from-the-ground-up” frontier play, he says: “The most exciting thing is the opportunity to have a bridge between South Korea, China and Russia. Because then you would be able to have railroads and roads going north through North Korea into these huge nations.” (CNBC)

Aramco wants to invest in global petchem projects, but does anyone want to invest in KSA infrastructure opportunities? State-owned oil giant Saudi Aramco is looking at downstream opportunities, Reuters reports in an exclusive, writing that the oil giant is moving ahead with multi-bn USD projects in China, India and Malaysia and “aims to finalize new partnerships this year.” But back at home, it’s looking less likely that foreign investors are salivating about the chance to invest in Saudi infrastructure — Blackstone is said to be offering discounts to convince investors to join its USD 40 bn infrastructure fund, an “initiative hailed as an early success for President Donald Trump’s mercantilist foreign policy.”

Ah, alphabet soup: Meet the ESG ETF. Goldman Sachs and hedgie Paul Tudor Jones are spinning up an exchange-traded fund focused on impact investing, saying it will invest in companies that are “driving positive change.” Please don’t get us started.

In other miscellany this morning:

  • Look for more mega-mergers in US media and telecoms after a judge ruled late yesterday that AT&T could go ahead with its “blockbuster” USD 80 bn acquisition of Time Warner. (WSJ and also WSJ)
  • Morgan Stanley is spending about USD 4 bn each year on tech, the company’s CEO says, or about 40% of its total expense budget excluding compensation. (Business Insider)
  • China really isn’t sure it wants Wall Street investment banks to come into the world’s second-largest economy, it seems, because its pledge to ease foreign ownership limits on securities firms comes with a very large catch. (Wall Street Journal)
  • Hacked press releases case goes to trial: Two men are standing trial in the US over claims they made USD 20 mn trading on insider information they picked up by hacking business information sites to get access to press releases that hadn’t already been made public. (Reuters)
  • FYROM has a new name: The Former Yugoslav Republic of Macedonia is now called North Macedonia after coming to a compromise with Greece that could see North Macedonia gain membership in NATO and join the European Union. (Bloomberg)
  • Meet the guys who tape Trump’s papers back together. The Donald rips up paper. The problem: He’s supposed to give almost every scrap of it to an archivist. (Politico)
  • Take time management advice from Ryan Seacrest, who is unapologetically one of the busiest people in media. (New York Times)

PSA- Get your blood pressure checked. Elevated blood pressure at age 50 is linked to an increased risk of dementia later in life, a new study reports.

It’s a four day weekend: Banks, the stock market and the government have all declared a four day weekend in observance of the Eid El Fitr break, which begins on Friday. Enterprise is off on Sunday and Monday, but we’ll be back in your inboxes on Tuesday morning.

So, when do we eat? For those of us observing, Maghrib is at 6:57 pm CLT today. You’ll have until 3:08 am tomorrow to finish your sohour.

What We’re Tracking This Week

The World Cup kicks off tomorrow: The world’s most-watched sports event will finally kick off in a little over 24 hours, with the first match being played between Russia and Saudi Arabia. You can tap or click here for the full World Cup schedule.

State TV looks likely to air 22 matches, including any game in which the Pharaohs play and the finals. While FIFA has yet to grant it permission to broadcast the games, the National Media Authority (NMA) claims it will move along with plans to broadcast the matches without charge on state television. The Egyptian Competition Authority had issued a statement on Sunday ordering FIFA to grant the NMA rights to broadcast the games, claiming that the football body’s contract with Qatar’s beIN Sports for exclusive broadcasting rights in the region was awarded under an unfair tender process. The ECA says COMESA has launched a probe (pdf) into allegations that FIFA engaged in unfair practices.

On The Horizon

White House special adviser Jared Kushner and US Middle East envoy Jason Greenblatt will reportedly visit Egypt during a Middle East tour that starts next week, Times of Israel reports. The tour, which will also take the officials to Israel and Saudi Arabia, will focus largely on “solving some of the remaining issues in the [Arab-Israeli] peace plan,” according to an unnamed US official.

This coming Sunday is father’s day in Canada, Ireland, Mexico, the UK and the United States, among other countries. Not in Egypt, though: Depending on who you ask, Egypt (a) doesn’t have Father’s Day or (b) celebrates it on Thursday, 21 June.

Enterprise+: Last Night’s Talk Shows

Amr Adib casts his lot with MBC. Veteran talk show host Amr Adib has signed a two-year contract to join Saudi Arabia’s MBC satellite network following his sudden on-air resignation from ON’s Kol Youm, according to a video posted by Saudi General Sports Authority head Turki Al-Sheikh, who witnessed the signing of the contract. “This is the most expensive broadcaster in the Middle East, an Arab Larry King,” Al Sheikh joked in the clip.

Speed Round

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Electricity prices are jumping by an average of nearly 21% for households, more than 40% for industry: As of the 1 July start to the government’s new fiscal year, electricity prices are going up an average of 26%, said Electricity Minister Mohamed Shaker yesterday as he unveiled long-awaited details on the phase-out of electricity subsidies. Households will see an average rate increase of 20.9%, while prices for industrial use will jump by an average 41.8%. The ministry released a detailed account and breakdown (pdf) of next year’s electricity prices, including the subsidy costs of the electricity sold.

Food producers and retailers are the first to not-so-subtly telegraph that they’re going to be hiking prices, saying yesterday that prices will rise in the coming months, particularly when you factor in the increase in the cost of piped water prices earlier this month. We had previously reported that cheesemakers Obour Land and Domty believed product prices would rise 2-4% later this year to cope with an expected rise in costs.

So, what does the new pricing structure look like? For household customers:

  • 0-50 KWh per month: prices will go up 69% to EGP 0.22/KWh, with the state paying a total of EGP 1.9 bn in subsidies;
  • 51-100 KWh per month: prices will go up 36% to EGP 0.30/KWh, with the state paying a total of EGP 3.2 bn in subsidies;
  • 101-200 KWh per month**: prices will go up 33% to EGP 0.36/KWh, with the state paying a total of EGP 19.5 bn in subsidies;
  • 201-350 KWh per month: prices will go up 27% to EGP 0.70/KWh, with the state paying a total of EGP 14.9 bn in subsidies;
  • 351-650 KWh per month: prices will go up 20% to EGP 0.90/KWh, with the state paying a total of EGP 7.3 bn in subsidies;
  • 651-1,000 KWh per month: prices will go up 8% to EGP 1.35/KWh, with the state paying a total of EGP 1.2 bn in subsidies;
  • Average consumption higher than 1,000 KWh per month will see prices go up 7.5% to EGP 1.45/KWh for their entire consumption, with the state paying a total of EGP 1.1 bn in subsidies.

(** Consumers using more than 100 KWh and less than 201 KWh a month will pay for their entire consumption — from 0 to 200 KWh — at a single unified rate of EGP 0.36/KWh.)

The average breakdown for commercial consumers is as follows:

  • 0-100 KWh per month: prices will go up to EGP 0.55/KWh;
  • 101-250 KWh per month: prices will go up to EGP 1.00/KWh;
  • 251-600 KWh per month: prices will go up to EGP 1.15/KWh;
  • 601-1,000 KWh per month: prices will go up to EGP 1.45/KWh;
  • Average consumption higher than 1,000 KWh per month will see prices go up to EGP 1.50/KWh as a single unified rate for their entire consumption

The average breakdown of industrial prices (measured in KV) is as follows:

  • 132-220 KV per month: prices will go up to EGP 0.96/KWh;
  • 33-66 KV per month: prices will go up to EGP 1.01/KWh;
  • 11-22 KV per month: prices will go up to EGP 1.05/KWh;
  • 380 V per month: prices will go up to EGP 1.10/KWh.

Agricultural facilities will pay an average of EGP 0.80/KWh.

Egypt delivered a primary budget surplus of EGP 2 bn in 11M17-18, compared to a deficit of EGP 47 bn in the same period the year before, Finance Minister Amr El Garhy said in a statement yesterday. The overall deficit also narrowed to 7.8%, down from 9.3% in the same period a year ago and an average of 10.6% over the previous three years, the minister said. Those figures suggest the country is on track to close the fiscal year with 9.8%, comfortably below the 10% threshold El Garhy had previously announced. Cabinet and the House of Representatives had signed off on a EGP 70 bn overdraft for the current fiscal year to cover “necessary expenditures,” including importing fuel at higher prices than had been anticipated. El Garhy had said that the overdraft will not impact the targeted budget deficit for the year.

Public revenues have reportedly exceeded expectations by more than 2% for 10M2017-18 and should come in ahead of projections by as much as 3% for the fiscal year, an unnamed government source tells Al Shorouk, explaining that the increase would help the government achieve its target budget deficit.

Egypt now has FX reserves on hand sufficient to cover nine months of imports, CBE Tarek Amer said in a speech at the annual African Development Bank meeting in Busan, South Korea. Amer is reported to have said that the move was necessary because there could be no improvement in the country’s business climate without first addressing structural problems in the economy.

INVESTMENT WATCH- UAE-based hospital operator NMC Healthcare is eyeing growth in Egypt, which it sees as “a very interesting and fundamentally strong market,” the National reports. NMC, which is poised to become the second-biggest non-state healthcare provider in Saudi Arabia, says it needs to study Egypt further before pressing ahead with any expansion plans in the country. “Once we understand the market, and we believe it’s a good market, we will definitely look at opportunities in Egypt,” CEO Prasanth Manghat said. NMC has already signed operation and management contracts to manage Cairo’s Dar Al Fouad and As-Salam hospitals.

INVESTMENT WATCH- Military to build USD 2 bn solar panel manufacturing facility with Chinese partner: The Military Production Ministry is planning to sign a contract to build a USD 2 bn integrated solar panel factory in partnership with China’s Golden Concord Group (GCL) in two months’ time, according to minister Mohamed El Assar. Funding for the JV is to be supplied by Chinese banks, apparently, and the facility will produce each year panels with a combined generation capacity of 5 GW. The Military Production Authority had signed an MoU for the project last month.

IPO WATCH- State-owned Heliopolis Housing plans to sell additional shares on the EGX by year’s end, Al Mal reports. The company is in the market for advisors on the offering now and, as a result, has yet to decide on the size or timing of the offering. Heliopolis’ general assembly has set a 31 August deadline for the company’s board of directors to present its final recommendation on the transaction. Public Enterprises Ministry officials had said back in April that the company was considering the sale of another 30% of its shares under the government’s program to divest assets through share sales on the EGX.

GASC amends wheat terms to get back in the good graces of global wheat traders: The General Authority for Supply Commodities (GASC) amended the terms of its global wheat import tenders ahead of Tuesday’s international wheat tender, Reuters Arabic reports. GASC reportedly reduced the cost of sieving to USD 2 per tonne from USD 3. The state grain buyer also reduced demurrage fees at Egypt’s port to USD 10,000 per day for the first 10 days, from USD 12,000 for 12 days. Traders have been complaining of high demurrage fees, particularly as the sieving process, which reduces foreign contaminants, takes a long time. The changes also come as confusion over ergot policy over the past year has raised the costs of buying wheat and caused disruptions in the supply.

How did the changes impact yesterday’s tender? GASC received several offers for wheat, with the lowest offer put forth by traders coming in at USD 209.5 per tonne free-on-board (FOB) for Russian wheat, traders tell the newswire. The lowest offer after accounting for shipping costs was USD 224.6 per tonne for 60,000 tonnes of Russian wheat and was presented by GTCS. GASC ended up buying a total of 420k tonnes, 300k tonnes from Russia and the rest from Romania.

FRA wants to make life insurance compulsory for recipients of subsidized financing for SMEs: It appears that the Financial Regulatory Authority (FRA) wants to impose mandatory life insurance coverage on all beneficiaries of SME loans, holding a workshop with NGOs and SME finance organizations to discuss the measure on Tuesday, Al Mal reports. The stated purpose of the initiative, according to FRA Chairman Mohamed Omran, is to ensure insurance coverage on some 2.4 mn entrepreneurs, who have received around EGP 8.4 bn in SME loans as of 1Q2018. FRA is proposing some form a collective life insurance policy for a number of loan recipients in which they pay a set and minimal premium of no greater than EGP 4 per month. FRA has made insurance for SMEs a crucial component of its strategy to reform the wider insurance sector, which it is undertaking primarily through amendments to the Insurance Act.

Take this as one part trial balloon, one part bureaucratic maneuvering: The SME financing program is from banks to businesses and so is regulated by CBE. And GAFI is, in most respects, the base line “regulator” of SMEs. The FRA’s standing to impose an insurance requirement on a *non-financial* company taking a loan from a commercial bank is vague, at best (to us, at least. You lawyerly types out there might have a different view. If so, let us know and we’ll report back here to the community.)

Also on the SME front, the proposed SMEs Act could grant tax exemptions to funds investing in vocational training ventures, Vice Minister of Finance Mohamed Maait reportedly said. The funds would have to be established specifically to meet that goal, he added. The SMEs Act, which is currently being drafted by the Finance Ministry, is designed to bring small businesses into the formal economy, primarily through tax breaks and by making it easier to file tax returns. Ministry sources told us earlier this week that the proposals for the law include setting a nominal 1% tax on revenues of small businesses earning more than EGP 1 mn a year.

MOVES- Dell EMC appointed Tarek Heiba as its General Manager in Egypt, according to Mohammed Amin, the company’s senior VP and regional manager for Turkey, Eastern Europe, Africa and. The Middle East. Heiba will take up the new position next month, Amin said. Heiba previously served as regional director for MEA at Dell EMC.

GEMS delays planned London Stock Exchange IPO as UAE authorities freeze hikes in private school fees: Dubai-based GEMS Education, one of the largest education providers in in emerging markets with 47 schools and nurseries in the GCC, appears to have parked plans for an IPO after the UAE government unexpectedly said it would freeze school fees, Bloomberg reports. GEMS, which is backed by PE giant Blackstone, is studying the potential impact on its earnings projections following the authorities’ decision to keep private school fees unchanged for a year, people close to the matter said. The firm may revisit the share offering later in the year or consider selling a stake to a single buyer, they added. GEMS had reportedly rebuffed interest from a private equity company that approached GEMS about buying a stake, opting instead for the share sale. Here in Egypt, GEMS partnered with EFG Hermes last month to acquire four schools in Madinaty and Al Rehab from the Talaat Moustafa Group (TMG) for EGP 1 bn.

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The Macro Picture

Rising oil prices could drive political tensions in emerging markets to a boiling point, Steve Johnson writes for the FT. Higher fuel prices have already led to mass protests in Brazil, Jordan, and Morocco, and analysts see other emerging markets such as Argentina, Turkey, and Mexico as particularly susceptible to the same scenario unfolding. These countries are already facing several challenges, including a potential reversal of capital flows, a “‘sharp’ deterioration in their terms of trade,” and a strengthening USD that has made EMs less attractive. “Across EM oil importers as a whole, inflation would be 0.7 percentage points higher on average between 2018 and 2020, than under Oxford Economics’ baseline forecast of USD 85-a-barrel oil. Economic output would be 0.7 percentage points lower.”

The prognosis: Oil-importing EMs will likely be forced to tighten their monetary policy to counteract weak economic growth. Central bank interest rates in all EMs except China are expected to rise to an average of 6.86% by March 2019, up from 6.34% currently. Developed countries with advanced economies, meanwhile, would probably only be “modestly” impacted by the rising prices, which means these countries will be able to maintain a loose monetary policy.

Egypt in the News

There’s nothing new to report on Egypt in the international press unless you count a really lazy, paper-thin story from Forbes Middle East suggesting that Naguib Sawiris “stands to profit immensely” from North Korea opening up to foreign investment. Sawiris has already admitted that he has lost de facto control of Koryolink, his JV with the government in Pyongyang.

On Deadline

This is what passes for economic commentary: It will take a lot more than tax incentives to encourage small businesses to go legit and join the formal economy, Ahmed Galal (briefly a cabinet member under the Beblawy government and perennial think-tank type) writes for Al Masry Al Youm. Businesses that operate informally do so to avoid the bureaucratic hassle that cuts into their time (as well as their profits) by requiring them to pay fees, taxes, social insurance, and the like. This means that any scheme designed to reel these businesses into the formal ecosystem must include guarantees that their profits would remain largely intact and measures to ensure easy access to bank loans and other forms as financing, among other perks.

Easy access to bank credit for a dude making EGP 1 mn a year who has never bothered to register to pay taxes? Genius idea.

Guarantees you won’t take home less by going legit? Does that qualify as Neo-Neo-Nasserism?

Worth Watching

Not a bad substitute for 80-octane fuel and dirty mazot. Riversimple, a small independent car manufacturer in rural Wales, have got their hopes up that hydrogen vehicles can play a vital part in the future of transport. Dubbing their handbuilt car Rasa, the aerodynamic two-seater weighs just 580 kg. Each of the car’s four wheels has a motor, powered by hydrogen running through a fuel cell. When the hydrogen combines with oxygen it produces electricity to power the motors, with water as a byproduct, according to CNN. The car apparently only takes three minutes to refuel, has a range of 500 km and a top speed of 96 km/h.

The catch? “Until the refueling infrastructure exists for hydrogen, then it will always be a bit part player compared to battery electric.” Riversimple will run trials for 20 Rasa vehicles in Monmouthshire early next year (watch, runtime: 3:38).

Diplomacy + Foreign Trade

El Sisi meets UN Syria envoy, reaffirms importance of diplomatic resolution: President Abdel Fattah El Sisi reaffirmed Egypt’s commitment to resolving the Syrian crisis through diplomatic channels during a meeting yesterday with UN Special Envoy for Syria Staffan de Mistura, according to an Ittihadiya statement. El Sisi also stressed the importance of preventing further escalations in Syria’s civil war to protect the region’s security and stability. De Mistura had also met with Foreign Minister Sameh Shoukry one day earlier for similar talks.

Energy

Empower to build Beheira WtE power plant under IPP framework

Is Empower really the first company to receive an IPP license to sell electricity from waste? Energy group Empower has apparently won a contract to produce and sell electricity from its 24 MW waste-to-energy (WtE) plant in Beheira under an independent power producer (IPP) framework, according to statements attributed to CEO Hatem El Gamal by Al Mal. Under the IPP framework — which allows private companies to directly sell power to consumers while paying the state a fee to use the national grid for transmission — Empower will sell electricity to dairy farms at EGP 1.35 per kWh for 20 years, he adds. Work on the EGP 98 mn project, is set to begin in 3Q2018 and be completed by mid-2019.

Industry types, set us straight, please: We can’t remember hearing of any company receiving permission to sell waste-generated power under an IPP framework. As a matter of fact, last we heard, the tariff structure for the framework had yet to be set by the ministry.

Health + Education

Kafr El Sheikh student arrested for posting Thanaweya Amma exam online

A student in Kafr El Sheikh was detained after he was identified as the culprit behind a leaked Thanaweya Amma English exam, Ahram Online reports. The Education Ministry was able to locate the student using the barcode on the exam booklet whose picture he posted with his phone while sitting for the exam. The Thanaweya Amma Arabic exam had also been leaked on social media earlier this month, when a student used his phone to send questions around to friends during the test, the ministry had said. The Interior Ministry announced a few days back that it had arrested the administrator of the Shou Ming Facebook group, which has been leaking national exams since 2015.

Real Estate + Housing

Marseilia Group to invest EGP 20 bn in Egypt projects over five years

 Real estate developer Marseilia Group is planning to invest EGP 20 bn in projects across Cairo, Alexandria and the North Coast over the next five years, Chairman Sherif Heliw tells Mubasher. The company had submitted a request to the New Administrative Capital Company for Urban Development (NACCUD) to acquire 100 feddans for a residential project, but the request is still pending approval, he adds.

Tourism

TPA considers extending JWT contract for Egypt’s tourism promotional campaigns abroad

The Tourism Promotion Authority (TPA) might be extending advertising agency JWT’s contract, due to expire this September, TPA head Ahmed Youssef tells Al Shorouk. Tourism Minister Rania Al Mashat said in April that the ministry would issue a tender for PR companies to manage Egypt’s tourism promotional campaigns abroad in August, after its existing contract with JWT expires.

Automotive + Transportation

Is this “100% Arab car” thing legit? And will it be produced in Egypt?

Geyushi Motors, El Saba Automotive, Abou Ghali Automotive, and El Sharkawy Automotive are all in talks with the UAE’s Sandstorm Auto over distribution rights and after-sale services in Egypt, MEA Regional Manager Karim Saleh tells Al Mal. The Emirati company is currently reviewing the offers, he adds. A Sandstorm Auto delegation will visit Egypt later this month to inspect the capacities of the bidding companies. Saleh had previously said that the company, which plans to produce the first “100% Arab-manufactured car,” was seeking to establish a plant in Egypt and launch a production line that can export produced cars to Africa. We’ve yet to hear anything legit on this from anyone but Saleh. This could be another PR-job courtesy of Al Mal.

Other Business News of Note

NOMP signs with UAE’s AFRM to develop ready mix concrete project

The National Organization for Military Production (NOMP) signed an MoU with UAE-based Al Falah Ready Mix (AFRM) to study the possibility of establishing a JV to produce ready mix concrete for projects across the country, according to the Military Production Ministry.

Egyptian Black Sands Company forms JV with Chinese partner

The Egyptian Black Sands Company signed yesterday an MoU with an unnamed Chinese company to establish the Egyptian-Chinese Black Sands Company, Al Mal reports. The JV will see the two companies cooperate on extracting minerals from black sands, which would be directed towards domestic use and exports, as well as on training Egyptian workers in the industry.

Legislation + Policy

House reps. are drafting a law to punish subsidy fraud

A draft law proposal seeking to impose heavier fines and penalties for subsidy fraud will has been tabled for discussion by Parliament’s Legislative Committee, Al Mal reports. The bill looks to impose jail sentences of at least six months and fines of between EGP 20,000-1 mn, according to Rep. Seliman Fadl.

Sports

Al Ahly officially to be headed by US second-tier league head coach

Al Ahly football club has officially signed Patrice Carteron as its new coach, according to King Fut. The 47-year-old Frenchman, was the head coach of Phoenix Rising, a second-tier team in the US. He succeeds Hossam El Badry, who resigned last month following Al Ahly’s loss against Kampala City in Uganda at the CAF Champions League. The job marks Carteron’s return to Egypt after coaching Wadi Degla for less than a year in 2016.

Ramadan Sobhy signs three-year, GBP 5.7 mn transfer agreement with Huddersfield FC

Stoke City winger Ramadan Sobhy signed a three-year, GBP 5.7 mn transfer agreement with Huddersfield Football Club, according to BBC Sport. Reports had emerged earlier this year that Sobhi, 21, could transfer to Liverpool, where he would have joined Mo Salah.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.80 | Sell 17.90
EGP / USD at CIB:
Buy 17.77 | Sell 17.87
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Tuesday): 15,938 (+0.1%)
Turnover: EGP 486 mn (56% BELOW the 90-day average)
EGX 30 year-to-date: +6.1%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session up 0.1%. CIB, the index heaviest constituent ended up 0.9%. EGX30’s top performing constituents were EFG Hermes up 2.6%, Egypt Aluminum up 2.0% and Madinet Nasr Housing up 1.9%. Yesterday’s worst performing stocks were Juhayna down 3.8%, Elsewedy Electric down 1.9%, and Eastern Co down 1.9%. The market turnover was EGP 486 mn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +60.3 mn
Regional: Net Long | EGP +5.9 mn
Domestic: Net Short | EGP -66.1 mn

Retail: 39.5% of total trades | 38.4% of buyers | 40.6% of sellers
Institutions: 60.5% of total trades | 61.6% of buyers | 59.4% of sellers

Foreign: 39.2% of total | 45.4% of buyers | 32.9% of sellers
Regional: 8.0% of total | 8.6% of buyers | 7.5% of sellers
Domestic: 52.8% of total | 46.0% of buyers | 59.6% of sellers

WTI: USD 66.02 (-0.51%)
Brent: USD 75.71 (-0.22%)

Natural Gas (Nymex, futures prices) USD 2.93 MMBtu, (-0.20%, July 2018 contract)
Gold: USD 1,299.10 / troy ounce (-0.02%)

TASI: 8,270.46 (+0.32%) (YTD: +14.45%)
ADX: 4,734.19 (+0.02%) (YTD: +7.63%)
DFM: 3,078.96 (-0.59%) (YTD: -8.64%)
KSE Premier Market: 4,780.96 (+0.56%)
QE: 9,160.97 (-0.46%) (YTD: +7.48%)
MSM: 4,598.18 (-0.10%) (YTD: -9.83%)
BB: 1,287.91 (+0.53%) (YTD: -3.29%)

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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.

23 July (Monday): Revolution Day, national holiday.

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.

10-13 September (Monday-Thursday): EFG Hermes’ 8th Annual London Conference, Emirates Arsenal Stadium, London.

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.

03-05 December (Monday-Wednesday): First Egypt Defense Expo, Egyptian International Exhibition Center, 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.