Tuesday, 24 July 2018

Privatization program to kick off in October

TL;DR

What We’re Tracking Today

We hope your Revolution Day was as nice as ours, something we largely attribute to the four-day bridge we took. Now, enough gloating and on to what you may have missed over the weekend.

President Abdel Fattah El Sisi is set to inaugurate today the three 14.4 GW Siemens combined-cycle power plants in Burullus, Beni Suef and the new capital, according to government sources.

El Sisi will also inaugurate today the EGP 12 bn, 580 MW Gabal El Zeit wind farm, Al Masry Al Youm reports. The wind farm has been connected to the national grid, according to the newspaper.

The House is supposed to begin deliberation on Madbouly Cabinet’s policy program today. The House committee tasked with reviewing the program has concluded its report and is recommending that the government be granted the confidence of parliament.

For those wishing back-to-school season would never come, we hate to burst your bubble: The 2018-2019 academic year will begin on 22 September for public school and university students around the country, Education Minister Tarek Shawki and Higher Education Minister Khaled Abdel Ghaffar announced on Saturday, according to Al Mal.

Today will be a hot day. The Meteorological Authority expects the mercury to peak at 40°C in Cairo.

The Yuan is now another thing EMs have to worry about: Fears of the China-US trade war escalating to a currency war topped the list of worries of emerging markets investors as fears grow over a possible devaluation of the Yuan, Bloomberg reports. The People’s Bank of China fixed the currency at CNY 6.7 per USD for the first time in almost a year last week and on Friday weakened the reference rate the most in two years.

A further drop in the currency to CNY 7 against the USD may trigger another round of panic selling in emerging markets, said Edwin Gutierrez, the London-based head of emerging-market sovereign debt at Aberdeen Standard Investments. “But we are confident that the Chinese will not let things get disorderly. Having recently won the battle against capital outflows, they’re not about to stoke those again by letting the currency depreciate significantly,” he noted.

This comes as Turkey’s central bank is widely expected to raise interest rates today to help stymie the slide in the Lira, which is at the center of the EM currency selloff. “In the case of a continuation of loose fiscal and quasi-fiscal policies, the CBT is likely to be forced to hike further in the rest of the year,” Morgan Stanley analysts wrote in an emailed note.

More power to the quants: Clifford Asness’ AQR is today a major player in the hedge fund industry, with USD 226 bn in assets under management. It largely achieved this through “Factor investing,” which the FT describes as a “a revolution quietly sweeping through the asset management industry.” Factor investing differs from other quantitative finance strategies in that it takes advantage of well-known patterns, human foibles, anomalies and inefficiencies, such as our penchant for glamorous stocks over well-performing ones. While some academics argue that this is in essence what hedge fund managers do, factor investors appear to have found a systemic, computerized way to do it.

Other headlines that caught our attention this morning:

Cypriot Energy Minister George Lakkotrypis vowed that the government will do everything necessary to ensure ExxonMobil’s offshore oil and gas search runs smoothly, despite threats from Turkey, Offshore Technology reports.

A 10-year-old girl and an 18-year-old woman have died after a gunman opened fire on a busy avenue in Toronto on Monday, according to the BBC.

Enterprise+: Last Night’s Talk Shows

It was a humdrum night on the airwaves, with the expected inauguration of the Siemens 14.4 GW power plants and the Gabal El Zeit wind farm being the most noteworthy topic of discussion.

The Siemens combined cycle plants will raise Egypt’s energy supply by some 25% and will cover the country’s electricity needs, including households and industry, Electricity Ministry Spokesman Ayman Hamza said on Hona Al Asema. The plants will also feed into Egypt’s planned electricity interconnection projects with Sudan, Cyprus and Greece, and Saudi Arabia, the latter of which Hamza says will be complete by 2021. Hamza also noted that the 580 MW wind farm at Gabal El Zeit is the largest wind farm in the world (watch, runtime: 3:59). Hamza also phoned into Yahduth fi Masr to further discuss the two power projects, including the fact that the Siemens plants were constructed in record time (watch, runtime: 5:49).

The commemoration of the 23 July revolution also took up significant airtime last night. Masaa DMC’s Eman Al Hosary dedicated the majority of her episode to discussing the revolution’s anniversary (watch, runtime: 15:14) and sat down with late President Gamal Abdel Nasser’s grandson (watch, runtime: 2:09). Hona Al Asema’s Dina Zahra (watch, runtime: 2:58) and Al Hayah Fi Masr’s Kamal Mady each hosted novelist Youssef Al Qaeed to talk about the 1952 revolution and its effects on Egypt (watch, runtime: 4:07 and runtime: 4:07). Sherif Amer also paid tribute to the anniversary on Yahduth fi Masr (watch, runtime: 2:19).

The Interior Ministry sanctioned the release of 683 indebted prisoners after the Tahya Masr fund paid off their debts, the fund’s media coordinator Mohamed Mokhtar told Hona Al Asema’s Dina Zahra. The fund has set aside EGP 30 mn to pay off all prisoners’ debts, according to Mokhtar (watch, runtime: 2:26).

Speed Round

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Gov’t unveils timeline of first wave of state privatization program: Public Enterprises Minister Hisham Tawfik unveiled the timeline for the initial wave of five companies that will see a stake sale as part of the government privatization program. Heliopolis for Housing and Development and Eastern Company will kick off the program with stake sales in October, Tawfik tells Bloomberg. Alexandria Mineral Oils Company (AMOC) and Alexandria Container and Cargo Handling (ACCH) will sell shares on the EGX in November, while Abu Qir Fertilizers will sell a stake in December.

Gov’t to offer investors majority stake in Heliopolis Housing: The government intends to allow investors to buy up a majority stake of around 33% Heliopolis for Housing and Development, Tawfik said. The government intends to retain ownership of 40% of the company, which currently has around 28% of its shares already listed on the EGX, Finance Minister Mohamed Maait told Bloomberg in a Thursday interview. “We saw that Heliopolis, given the strength of the real-estate sector in Egypt, could be developed more by offering a bigger stake to investors,” Maait told the news service, noting the previous successful sale of a majority stake to Madinet Nasr Housing and Development (MNHD).

Could more companies see a majority stake put on offer? While so far, a majority offering is available only in Heliopolis Housing, Tawfik hinted at the possibility of more majority offerings in the future. In a bid to maximize private sector presence on the boards of state companies, the government is “giving investors stakes in these companies and allowing them to have majority ownership in some of them,” Tawfik added.

Meanwhile, Eastern Company appears to have upped the stake it plans to sell in October to 4.5% from an initial 4%, according to the timeline put forth by Tawfik. AMOC and Abu Qir will each sell a 30% stake, while ACCH will sell 20% of its stake to investors.

As for the rest of the program? The second wave of the 23 state companies selling shares will go on offer in 1Q2019, although officials have yet to decide on which firms or the sizes of stakes to be sold, Tawfik added. In the next nine months, the government will study the performance of the 121 Public Enterprises Ministry companies. “Strategic investors will be invited in, through management contracts,” to run some of the companies that are unlikely to turn a profit under their current leaderships, he said.

State companies to sell EGP 75 bn in assets: In addition to the stake sales, Public Enterprises Ministry companies will sell some EGP 75 bn in assets, Tawfik said, according to Al Mal. Around half of the proceeds of the sale will go towards paying off overdue gas and electricity bills, as well settling debt payments to the state National Investment Bank. The ministry is currently tallying up the assets it plans to put up for sale, he added. The Ismail Cabinet had set up a timeline in May for state-owned companies to pay overdue gas and electricity bills so that the government can accelerate payments to foreign energy companies and other contractors, including Siemens and GE, among others. The move comes as the Electricity Ministry will reportedly settle some EGP 117 bn in overdue gas bills owed to the Oil Ministry before the end of 2018, in order to allow the latter to repay its arrears to international oil companies, which came in at USD 1.2 bn as of the end of FY2017-18, government sources told Al Masry Al Youm on Friday.

Natural gas prices for household and industry to rise by 30-75% as of 1 August: The Madbouly Cabinet decided on Saturday to raise the prices of natural gas for household and industrial users by 30-75% as of 1 August, pressing ahead with plans to gradually phase out subsidies under the IMF-backed economic reform program, according to a statement carried by Reuters. This translates to an increase of EGP 1.75-3.0 per cbm of gas, depending on the level of consumption. The increase in natural gas prices is meant to correct the pricing imbalance with cooking gas cylinders — which are used as an alternative to natural gas — following last month’s fuel price hikes, Oil Ministry spokesman Hamdy Abdel Aziz tells Al Masry Al Youm.

Natural gas users will now be billed at:

  • EGP 1.75 per cbm for up to 30 cbm of consumption, up from EGP 0.1/cbm;
  • EGP 2.50 per cbm for consumption between 30-60 cbm, up from EGP 0.175/cbm;
  • EGP 3.0 per cbm for anything over 60 cbm, up from EGP 0.225/cbm.

The hike was accounted for in the state budget for FY2018-19, government sources told Al Mal, adding that the amount allocated to fuel subsidies this fiscal year remains the same at EGP 89 bn, down from EGP 125 bn in FY2017-18.

This will likely not go down well with manufacturers: Rising natural gas prices have been squeezing manufacturers, who make their payments in USD, since the currency was floated back in November 2016. Lobby and industry groups had also tried at various points in time to pressure the government into repricing the cost of natural gas for industry to help them cope with rising expenses, to no avail. EGAS had introduced an incentive package back in February that offers manufacturers lower fines and easier payment terms on gas supply contracts.

…and everyone else: A number of House representatives have also requested to send a letter to Prime Minister Mostafa Madbouly and Oil Minister Tarek El Molla to explain the reasoning behind the price increases, Rep. Amr El Gohary tells Al Mal. El Gohary says parliamentarians are incensed that prices were raised despite Egypt approaching natural gas self-sufficiency. Meanwhile, bakers of subsidized bread want to get more out the government as a result of the move, according to Al Mal.

El Sisi urges patience with reforms: The day after the price hikes, President Abdel Fattah El Sisi stressed that the state is pressing ahead with reforms while working to shield the most vulnerable citizens from the burden of the reform program, in a speech on Sunday. He said that the difficult times Egyptians are facing due to economic reforms are understandable but “causing chaos and destroying the state” are not justified.

Rumors spreading discontent are the greatest danger to Egypt’s stability, says El Sisi: Egypt’s stability is most threatened by rumors attempting to spread discontent and frustration among the people, El Sisi said. According to the president, the government has tallied some 21,000 “false rumors” over the past three months, which he said, along with terror attacks, are part of a “network” aimed at instilling a sense of frustration among Egyptians.

The foreign press’ take: The move — which follows a c. 50% hike in fuel prices in June, as well as increases to the costs of electricity, pipe water, and transportation — “is likely to further fan the flames of popular discontent, especially among poor and middle-class Egyptians who have borne the brunt of the government’s economic reform program,” says the Associated Press.

FIRST LOOK- Hassan Allam Utilities and Lightsource BP form solar energy JV: Hassan Allam Holding subsidiary Hassan Allam Utilities (HA Utilities) will form a joint venture with global solar energy developer Lightsource BP that will fund, develop and operate solar energy projects in Egypt, the two parties said in a statement (pdf) out this morning. “We are very excited to partner with Lightsource BP to further develop our business in Egypt,” Hassan Allam Holdings Co-CEO Amr Allam said. “[The JV] offers both steady income streams that smooth-out the traditionally cyclical revenues of our existing businesses coupled with high growth potential as demand for renewable energy in emerging markets leapfrogs that of developed economies,” he added. “Our business model will allow us to build sizeable renewable platforms by capitalizing on the strong relationships, financing capability and technical know-how of the two partners and of our management teams,” HA Utilities CEO Menatalla Sadek noted.

Lightsource BP sees EMs as more than a portfolio play, championing EM FDI: On a strategic level, Lightsource BP CEO and Founder Nick Boyle appreciates the importance of emerging markets, and Egypt specifically, as an opportunity to build long-term projects that play on macro fundamentals. “Projects in emerging markets are not just yield plays, they’re growth plays to power fast-growing economies and populations. We see exciting potential in Egypt following the country’s economic recovery and recently announced renewable power targets,” he says.

Hassan Allam to sign final contracts for Hamrawein coal power plant in September: In other Hassan Allam news, a consortium made up of Hassan Allam Construction, and China’s Shanghai Electric and Dongfang Electric will reportedly sign in September the final contracts for the 6 GW Hamrawein ‘clean coal’ power plant with the Egyptian Electricity Holding Company, an Electricity Ministry official tells Al Mal. The consortium will source 78% of the USD 4.4 bn needed to build the plant through Chinese financiers, with the balance (around USD 950 mn) set to be acquired through local banks, according to the official, who notes that funding should be secured within the next six months by early 2019.

M&A WATCH- EFG acquires 100% of Nigerian brokerage firm Primera Africa: Our friends at EFG Hermes announced on Thursday signing a sale and purchase agreement for 100% of the Lagos-based Primera Africa. Primera, which offers a range of brokerage and research services to international investors, will begin operating under the EFG Hermes brand name once the transaction is complete, EFG said in a press release (pdf).

The Nigerian operation will serve as a starting point for further expansion into West Africa, the company said. “Nigeria is our fourth direct entry as we continue our strategy of expanding our geographic footprint in high-potential, frontier emerging markets,” said EFG Group CEO Karim Awad. “At the close of this transaction, we will have a direct presence in 12 jurisdictions on four continents to serve our global institutional investors, regional high-net-worth individuals, and local retail investors.”

The move comes just days after EFG said it concluded advisory services on the GBP 125 mn IPO of microfinance lender ASA International on the LSE, which is part of a wider company plan to break into frontier markets that has recently seen it establish distribution and sales capabilities in New York, London, Pakistan, Kenya, and Bangladesh. Reuters also has the story.

IPO WATCH- Meanwhile, EFG Hermes has reportedly been tapped to manage Fresh Electric For Home Appliances’ initial public offering, which is likely to take place in 2019, sources tell Al Mal. Fresh execs had said in June that the company was looking to list as much as 20% of its shares on the EGX soon to raise enough capital to increase production capacity by 10% as it eyes higher exports. The company has already applied for Financial Regulatory Authority approval to list and is undergoing an internal restructuring to meet EGX regulations, senior company executive Bahaa Demtery had said.

IFC pledges USD 2 bn in funding to Egypt’s private sector until 2019: The International Finance Corporation (IFC) is committed to extending as much as USD 2 bn in funding to Egypt’s private sector until 2019 under the country’s cooperation framework with the World Bank Group, IFC CEO Philippe Le Houérou told Investment Minister Sahar Nasr this weekend at a meeting in Washington, D.C. The amount could be increased to support SMEs and other entrepreneurial projects, Le Houérou said, according to a ministry statement (pdf). Nasr —who said she hopes to see the IFC support more projects in transportation, energy, communications, and entrepreneurship — also discussed increased cooperation with the World Bank on social protection with Senior Director for Social, Urban, Rural and Resilience Global Practices, Ede Ijjasz-Vasquez.

The economic reform agenda also received props from the team that puts together the World Bank’s Doing Business Report, who told Nasr they were confident that recent measures would improve Egypt’s global ranking on the ease of doing business index.

M&A WATCH- Sawiris, Fortress Investments’ Edens acquire 55% stake in Aston Villa FC in GBP 30 mn transaction: Nassef Sawiris is joining forces with Fortress Investment Group co-founder Wes Edens to buy a 55% stake in English football club Aston Villa for GBP 30 mn, sources close to the matter told Bloomberg on Saturday. The club, which lost its spot in the English Premier League in 2016, has struggled financially since it failed to win its way back from relegation last season, especially as it spent considerable sums to acquire new players. Chinese businessman Tony Xia, who has owned the football club since 2016, said that “in finding such strong partners as Nassef and Wes we’re gearing up to fight again and bring back the success that this club deserves and we all so want to provide it with.” The Financial Times also has the story.

The Supply Ministry will reportedly begin registering more citizens to the subsidy rolls as of August under tighter regulations adopted last year, a ministry source tells Al Shorouk. The ministry will begin accepting applications to issue new ration cards as the registration window also opens for families to add newborns to their data, according to the source. The government had issued new regulations last year to govern new entrants, which cap the number of family members per card to four and introduce a EGP 1,500 monthly income threshold for eligibility for full-time workers, as well as a EGP 1,200 monthly threshold for pension earners. The rules also stated that orphans, widows, divorced women, single mothers, those with disabilities or special needs, minors, seasonal workers, and those eligible for social welfare benefits under the Takaful and Karama program would also be candidates for ration cards.

It’s unclear how the government intends to finance the addition of new beneficiaries to its rolls. Sources had also previously told us that the cabinet was currently debating how to fund increased commodity subsidies for 6 mn newborns and is considering a budget overdraft, the reallocation of funds from other ministries, or reclassifying newborns as beneficiaries of cash subsidy programs. It might just be that the Supply Ministry plans to have completed the purge of the subsidy system by August to make room for new additions, while spending on commodity subsidies is set to rise 36.6% this fiscal year to EGP 86.18 bn.

Is the gov’t banning exports of raw goods? The government is currently looking to ban exports of raw materials in order to maximize their use in the value chains here at home, Trade and Industry Minister Amr Nassar said. Raw materials which have not undergone any type of processing will not be exported, Nassar told the ministry’s various export councils at a meeting to discuss the nation’s trade strategy. Nassar was not clear on whether this ban will take the form an outright prohibition or will the ministry simply disincentivize exporters. The Ismail Cabinet had put in place and extended export tariffs on several raw goods including raw and scrap copper and aluminum. Nassar was also unclear on the type of goods which will be banned.

Egypt, Sudan to form joint task force to oversee future cooperation with an eye for boosting ties: President Abdel Fattah El Sisi and Sudanese President Omar Al Bashir agreed on Thursday to form a joint ministerial task force that would draw up a vision for future cooperation between Cairo and Khartoum, with a clear timeline and a detailed strategy for clearing any existing obstacles, which will likely include lifting the ban on Egyptian agricultural goods, according to an Ittihadiya statement. The group would also oversee the execution of plans such as the USD 60-70 mn power interconnection project and the construction of roads and railway lines to link both countries, which talks for are currently ongoing, according to El Sisi.

Regional developments were also among the points of discussion, with El Sisi and Al Bashir both reaffirming their commitment to maintaining the others’ national security and interests, according to the statement, which makes no mention of talks related to the disagreements over the disputed border areas of Halayeb and Shalatin or the Grand Ethiopian Renaissance Dam (GERD). El Sisi, however, did thank Sudan for the role it has played in “settling regional disputes.” You can view the full text of Sisi’s speech in Khartoum here.  Sudan Tribune and the Sudan News Agency both have coverage.

MOVES- Tourism Development Authority (TDA) boss Serag El Din Saad was named assistant tourism minister, according to state-run Al Ahram. Saad will continue on as head of TDA.

CORRECTION- French law firm Gide Loyrette Nouel was tapped as joint legal counsel for Cairo Investment and Real Estate Development’s (CIRA) IPO, and not GED Lawyers as we wrote on Thursday. The story has since been corrected on our website.

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Up Next

The Federation of Egyptian Industries (FEI) plans to meet with central bank officials at the end of July to discuss the two-year delay in export subsidy payments from the government, committee member Hassan Mabrouk tells Amwal Al Ghad. Finance Minister Mohamed Maait had told us last month, however, that he would be working to devise a strategy to resolve the issue as soon as possible. We had heard before that the ministry was planning to disburse the late payments over an unspecified number of years after industry associations raised the issue several times. Mabrouk said that the committee would also discuss with the CBE the issue of higher fees for industrial licensing — which are currently being re-examined after they were said to be bad for business — in addition to its new initiative to help restart operations at idle factories.

Prime Minister Mostafa Madbouly will lead a meeting to select the board of directors for Egypt’s EGP 200 bn sovereign wealth fund “within days,” Finance Minister Mohamed Maait said, Al Ahram reports.

Our friends at the American Chambers of Commerce (AmCham) will be hosting Finance Minister Mohamed Maait for its monthly luncheon on Monday, 30 July. You can register for the event here.

The sixth National Youth Conference is reportedly taking place by the end of the month. University students will be the focus of the upcoming edition. It’s still unclear where the conference will be held.

President Abdel Fattah El Sisi might be visiting Beijing in September to attend the Forum on China-Africa Cooperation.

Image of the Day

All-girl Parkour squad challenges social norms: A group of young girls who have trained everyday for the last six months to eventually form Egypt’s first professional all-female Parkour team have also been challenging social norms, according to Reuters.

Egypt in the News

Mummy juice tops coverage of Egypt in the foreign press: Almost 20,000 people (and counting) have signed on to a online petition calling on the Egyptian government to allow people to drink the liquid found inside the mysterious black sarcophagus unearthed in Egypt earlier this month, which is once again topping coverage of Egypt in the foreign press. This is despite the fact that the Antiquities Ministry has said that the red liquid appears to be sewage water. The ministry found three mummies inside the sarcophagus and has now ruled out entirely the possibility that it had been Alexander the Great’s final resting place. Reuters and the the Associated Press are among many that have coverage.

Other headlines worth noting in brief:

Diplomacy + Foreign Trade

Elsewedy Electric and Arab Contractors are among five companies that were shortlisted in the tender for a USD 3 bn hydroelectric dam over Tanzania’s Rufiji River, CEO Ahmed El Sewedy tells Al Mal, without naming the other suitors. The Tanzanian government is expected to secure funding for the 2.1 GW project, which received prequalification offers from 17 companies, according to El Sewedy, who adds that he expects the winning bid to be announced in 3-4 months’ time. Elsewedy has around 25 projects in Africa and is studying expanding into other markets, including Kenya. Arab Contractors is also competing for infrastructure projects worth USD 400-450 mn across the continent.

Emaar Chairman Mohamed Alabbar met with Tourism Minister Rania Al Mashat on Thursday to discuss future investment plans in Egypt, which include a plan to spend EGP 6 bn to develop six hotels by 2021 in the company’s North Coast project Marassi. Elabbar also met with Prime Minister Mostafa Madbouly to discuss the UAE-based company’s plans to increase its investments in Egypt in the coming period, Al Shorouk reports. This came after the businessman said last week that he was planning to double Emaar’s local investments to EGP 100 bn over the next five years.

Energy

Apache plans to drill 3 wells in Western Desert by end-2018

Apache Corporation plans to begin drilling three out of seven planned wells in the Western Desert by the end of 2018, Oil Ministry sources tell Al Shorouk. The company expects the wells to produce an initial 5,000 bopd. The EGPC had signed last week a USD 9 mn oil and gas exploration agreement with Apache in the Western Desert, which also included a USD 30 mn bonus to drill seven wells in the area.

Basic Materials + Commodities

Egypt to begin exporting tomatoes, grape seeds to Canada, Morocco

Egypt will begin exporting tomatoes to Canada and grape seeds to Morocco for the first time, Agriculture Minister Ezzedin Abu Steit said, Al Mal reports. Egypt is taking the final administrative procedures to begin exporting these products, Agricultural Quarantine Authority head Ahmed El Attar said, without disclosing when the exports are expected to begin.

Real Estate + Housing

Emaar Misr withdraws from developing 410 feddans in Sheikh Zayed over high prices

Emaar Misr has decided to withdraw from developing two areas in Sheikh Zayed and the Sheikh Zayed extension over high land prices, an unnamed company official tells Al Shorouk. Emaar had submitted a bid to develop a 410-feddan land plot in Sheikh Zayed at a cost of EGP 4,750 per sqm and another bid to develop 1,000 feddans in the suburb’s extension at EGP 2,006 per sqm. The developments were tendered under phase two of the New Urban Communities Authority’s (NUCA) public-private partnership program. Emaar is still in talks to develop 1,500 feddans in the new capital, according to the company source.

Automotive + Transportation

Transport Ministry to issue conditions for purchase of 100 locomotives next year

The Transport Ministry will likely issue the terms and conditions for an international tender to supply 100 new locomotives by the beginning of 2019, Al Shorouk reports. The ministry has contracted an international consulting firm to prepare the conditions, which will be financed through a EUR 290 mn loan from the European Investment Bank.

Banking + Finance

Independent financial advisor puts Qalaa Holdings fair value at EGP 6.34 per share

Qalaa Holdings shares are valued at EGP 6.34 per share, according to a fair value report conducted by independent financial adviser RSM Egypt, the company said in a statement on Thursday (pdf). The FV report came at the behest of the Financial Regulatory Authority.

National Security

Leader of terrorist group Wilayet Sinai announced dead

A leader of the Egypt-based Daesh offshoot Wilayet Sinai was killed, the terrorist group announced without providing details on when or how he died, Reuters reports.

Sports

Rowan Elaraby, Mostafa Asal win WSF World Junior Squash Championships

Egyptian squash champions Rowan Elaraby and Mostafa Asal won the women’s and men’s WSF World Junior Squash Championships in Chennai, India yesterday after an all-Egyptian final round, according to a statement. Elaraby beat compatriot Hania El Hammamy 3-1, while Asal defeated defending champion Marwan Tarek 3-0.

FIFA fines Egypt USD 50k for prohibited World Cup warm up game

FIFA fined the Egyptian Football Association USD 50k for playing a World Cup warm up game against Kuwait during a prohibited period between 21-27 May, the Associated Press reports. According to FIFA regulations, a mandatory rest week is imposed on all teams “in order to protect players before the final competition.” Egypt violated the rules when it played Kuwait on 25 May, drawing 1-1.

On Your Way Out

A group of Cairo University students have made it to the final round of Microsoft’s Imagine Cup with their app for lifeguards, according to Disrupt Africa. The team, one of 7,000 chosen from across the Middle East and Africa, will be in Seattle this week to compete for the USD 100k cash prize and showcase their Beach Safer app, which “provides real-time monitoring and supervision of swimmers, allowing for quick, accurate drowning detection and immediate rescue.”

The Market Yesterday

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Pharos Holding - http://www.pharosholding.com/

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 17.78 | Sell 17.88

EGX30 (Sunday): 15,304 (-0.7%)
Turnover: EGP 383 mn (59% below the 90-day average)
EGX 30 year-to-date: +1.9%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.7%. CIB, the index heaviest constituent ended down 0.2%. EGX30’s top performing constituents were Emaar Misr up 2.0%, Heliopolis Housing up 1.9%, and ACC up 1.3%. Sunday’s worst performing stocks were Qalaa Holdings down 4.8%, Amer Group down 3.5%, and Egyptian Iron & Steel down 3.1%. The market turnover was EGP 383 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +11.4 mn
Regional: Net Short | EGP -15.5 mn
Domestic: Net Long | EGP +4.1 mn

Retail: 77.3% of total trades | 82.1% of buyers | 72.6% of sellers
Institutions: 22.7% of total trades | 17.9% of buyers | 27.4% of sellers

Foreign: 4.1% of total | 5.6% of buyers | 2.6% of sellers
Regional: 6.2% of total | 4.2% of buyers | 8.2% of sellers
Domestic: 89.7% of total | 90.2% of buyers | 89.1% of sellers


***
PHAROS VIEW

Rise in Pharos FCI in June reflects tightening monetary policy: The Pharos Financial Conditions Index (FCI) rose in June, driven by the slower acceleration in the real broad money supply, which increased by only 2.4% y-o-y when factoring inflation. M2 money supply rose 17.12% y-o-y without the inflation input. The FCI drop was also driven by an appreciation of the real effective exchange rate for the EGP​ in June to 79.19 from 77.54 in May. The slope of the yield curve flattened to 3.13% in June from 3.18% in May, indicating more tight conditions in the short term. You can read the full report here (pdf).

***


WTI: USD 62.72 (-0.25%)
Brent: USD 72.84 (-0.30%)

Natural Gas (Nymex, futures prices) USD 2.71 MMBtu, (-0.33%, August 2018 contract)
Gold: USD 1,222.70 / troy ounce (-0.24%)

TASI: 8,448.48 (-0.21%) (YTD: +16.91%)
ADX: 4,760.95 (-0.21%) (YTD: +8.24%)
DFM: 2,932.04 (+0.37%) (YTD: -13.00%)
KSE Premier Market: 5,360.82 (+0.47%)
QE: 9,435.29 (+0.78%) (YTD: +10.70%)
MSM: 4,433.06 (-0.34%) (YTD: -13.06%)
BB: 1,357.15 (+0.37%) (YTD: +1.91%)

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Calendar

26-28 July (Thursday-Saturday): Green Banking: The Road to Sustainable Development, Baron Palace, Sahl Hasheesh, Hurghada.

30 July (Monday): Finance Minister Mohamed Maait will address the American Chambers of Commerce on Egypt’s financial reform agenda.

05 August (Sunday): Egypt’s PMI reading for July released.

16 August (Thursday): CBE’s Monetary Policy Committee meeting.

21-25 August (Tuesday-Saturday): Eid Al Adha (TBC), national holiday.

28-29 August (Tuesday-Wednesday): CI Capital’s 5th Annual Egypt Equities Conference, Cape Town, South Africa.

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.

18 September (Tuesday): Cairo Economic Court to issue ruling on EGP 5.6 bn antitrust case against pharma companies including Ibnsina.

20-23 September (Thursday-Sunday): 2018 Automech Formula car expo, Cairo International Convention Center, Nasr City, Cairo.

22 September (Saturday): New academic year begins for public schools, universities.

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).

10-13 October 2019 (Tuesday-Sunday) Big Industrial Week Arabia 2019, Egypt International Exhibition Center.

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