Wednesday, 25 July 2018

New tax codes laws coming

TL;DR

What We’re Tracking Today

The House of Representatives will continue discussing the Madbouly Cabinet’s policy program today, Al Ahram reports. The House had begun deliberations on the program yesterday, with the majority of representatives signaling their approval of the new cabinet’s agenda.

The Usual Suspects: Members of the 25-30 Coalition, however, said they would refrain from granting the government their vote of confidence, saying that the program lacks a clear plan for the development of the country’s education system.

The EGX is looking to impose a new risk management policy on the EGX sometime in 2H2018, EGX head Mohamed Farid said, according to a statement from the EGX on Tuesday. While Farid did not provide detail on what this policy might entail, he hinted that it is developing a new risk management standard and system which it will impose on brokerage firms.

Expect another spell of hot weather today with a daytime high of 40°C in the capital city, according to the national weather service.

Mo Salah fans have until 10 August to make him one of FIFA’s top three men’s footballers for 2018. Salah has made it to the top 10, alongside Cristiano Ronaldo, Lionel Messi, Kevin De Bruyne, and Harry Kane. FIFA will announce the three finalists early in September. Cast your ballots here.

Leading emerging markets coverage across the business press this morning is Turkey’s central bank’s surprising decision to keep interest rates on hold — the first major monetary policy decision since President Recep Tayyip Erdogan’s reelection with sweeping new powers. The move, which Bloomberg says “stunned investors” and defied market expectations (and logic), led Turkish stocks and the Lira — which has been among those leading the slide in EM currencies — to plummet further. “This decision essentially confirms the markets’ worst fears about the central bank’s independence and the future course of economic policies in Turkey,” said Inan Demir, an economist at Nomura International in London.

EM investors are still not entirely convinced with the recent rebound in government bonds so far into the second half of the year, Matt Wirz writes for the Wall Street Journal. That is despite the fact that debt mutual funds in emerging markets saw inflows of some USD 100 mn last week from individual investors and that USD-denominated bond prices are rising, “showing the appeal of high-yielding bonds issued by nations including Argentina, Egypt and Brazil,” he says.

The concerns are still the same: A strengthening USD, rising US interest rates and yields, and a potential trade war between the US and China, which raises questions “about debt sustainability and economic resilience in countries whose debt-servicing capacity stands to decline as local currencies depreciate.”

Ranks of EM Nostradamii grow in tandem with debt default fears: Default rates on emerging market debt are expected to climb next year as the ending of a decade of easy money by central banks hits weaker companies the most, said Abdel Kadir Hussain, the head of fixed income at Arqaam Capital. He even goes so far as to compare it to the 1997 Asian crisis. “Given the relatively loose liquidity in the market over the last five years, you’ve had a lot of [transactions] financed that maybe in more disciplined markets would not have been financed,” said Hussain. “In 2019 and probably into 2020, you’re going to see default rates pick up in emerging markets, particularly in the weaker part of the spectrum.”

How big is the hole? Governments and companies in developing nations sold USD 1.1 tn of bonds so far this year, after raising a record of almost USD 2 tn in all of 2017, according to data compiled by Bloomberg.

How have EMs dealt with the dilemma of oil prices? Calling all oil analysts. Bloomberg has a survey of analysts out comparing the policies different emerging markets have taken to adapt to higher oil prices in the midst of a strengthening USD. And it all boils down to this one dilemma: Subsidize the purchase of increasingly expensive fuel, or allow consumption to be eroded and accept the accompanying economic and political risk.

For Egypt,the decision to further reduce energy subsidies is “bearish for fuels demand,” says BMI analyst Richard Taylor.The move has led to lower-income, marginal fuel consumers being priced out, particularly with higher inflation ensuring consumers prioritize essential goods, he added.

Great MbS purge is Saudi’s loss and our gain: Wealthy Saudi families are hesitant about investing in the kingdom and are instead looking to move their assets abroad after the kingdom’s “anti-corruption purge,” the Financial Times says. Many are sitting on their wealth as money transactions are being closely monitored by the government, while others are trying to find ways to circumvent the system.

So, where are they putting their cash? Investments in Egypt, among other “friendly third countries.” In the meantime, the kingdom is hopeful that foreign investors will spur economic growth that has been sluggish as a result of “a prolonged period of low oil prices” and the uncertainty caused by the corruption purge.

Enterprise+: Last Night’s Talk Shows

Yesterday’s inauguration of the three combined-cycle power plants reigned supreme on the airwaves last night. We have the full story in Speed Round, below.

The new power plants are expected to spur investments in Egypt as they will bring an end to the country’s power shortages, and stand as an example of a successful large-scale investment in Egypt, Upper Egypt Electricity Production Company head Ibrahim Al Shahat told Hona Al Asema’s Dina Zahra (watch, runtime: 21:01). Rep. Mohamed Elsewedy had much of the same to say to Masaa DMC’s Osama Kamal, whom he reminded of the rolling power outages that roiled the country post-2011 and led several factories to halt or significantly scale down their operations (watch, runtime: 9:47). We don’t know about them, but we haven’t noticed rolling blackouts in quite some time.

Egypt should now have an energy surplus that will allow for the expansion of industrial projects and will also cover the expected rise in household consumption in tandem with population growth until 2035, head of the technical affairs sector at the New and Renewable Energy Authority Ehab Ismail said on Yahduth fi Masr (watch, runtime: 2:00). Host Sherif Amer also had Rep. Hegazy Shaaban weigh in on the power plants and the recent increases in electricity prices (watch, runtime: 2:10 and runtime: 2:14).

Electricity Ministry Spokesman Ayman Hamza also blanketed the airwaves to tout the development in Egypt’s energy sector over the past four years, culminating in the completion of the 14.4 GW power plants (watch, runtime: 5:50).

Elsewhere on the airwaves, arts critic Tarek El Shenawy discussed the planned establishment of a committee to regulate festivals, concerts, and other “special events” with Hona Al Asema’s Dina Zahra. El Shenawy stressed that the committee’s mandate should be restricted to state-sponsored events and that its powers should not extend to the private sphere, which would be disastrous. He called on civil society to take over as a regulator for non-state events (watch, runtime: 6:13). Artist Taha Qorny, on the other hand, said the arts and culture scene is “completely out of control” and must be reined in (watch, runtime: 3:58).

Turkish illusionist Aref Ghafouri recounted his experience with an Egyptian physician who saved his life after being bitten by a cobra to Masaa DMC’s Osama Kamal (watch, runtime: 10:48).

Speed Round

Speed Round is presented in association with

EXCLUSIVE- Major amendments to the tax code coming during next legislative term: The Finance Ministry plans to introduce a package of new legislation when the House of Representatives reconvenes from its summer recess, Finance Minister Mohamed Maait told Enterprise. Topping the list of laws are amendments to the tax code which are meant to facilitate and streamline tax procedures and cut red tape, Maait added. While Maait did not delve into specifics, he did tell us that the law would reduce the amount of documentation required for taxation. Other clauses would impact sales and real estate taxes, he added without providing details. Another ministry source tells us that the amendments have already been drafted and are ready.

Are tax incentives for SMEs in the works after all? The Finance Ministry is looking to raise the turnover limit to be exempt from the VAT, sources said. As it stands, businesses with a turnover of less than EGP 500k a year are exempt from VAT. The ministry is considering raising that ceiling to EGP 1 mn in order to accommodate SMEs making less than that amount, sources added, without revealing when the ministry is planning to issue the law. The move comes as part of a series of incentives the government hopes to extend to SMEs. While a senior government source had told us that the SMEs Act — the key legislation looking to incentivize SMEs to join the formal economy — will not contain tax incentives, amendments to the VAT Act the ministry is considering appear to be an attempt to lighten the tax load on SMEs who have registered. Sources noted that SMEs making under EGP 1 mn must still pay income taxes. Under the SMEs Act, the government will be guided by the CBE’s definition of SMEs, which counts “micro-enterprises” as businesses making less than EGP 1 mn.

Other items on the ministry’s legislative agenda it hopes to see passed in the upcoming cycle include a new and improved Customs Act, the source told us. While the House of Representatives had already signed off on a series of amendments to the already existing act, the ministry is planning to introduce a new and more comprehensive law, according to Maait. Sources had told us previously that the new legislation also includes a host of measures that would facilitate the flow of goods through Egypt’s ports, including establishing a “white list” of importers who will benefit from expedited clearance of goods.

Other laws due to be passed in the next legislative term also include a new Public Finances Act — which will impact how the budget is drafted — and a new Pensions Act, Maait told us. The ministry is also looking to complete the executive regulations on a number of laws which have recently been passed in the House, including the Public Procurement Act (formerly the Auctions and Tenders Act).

While the glint from Egypt’s bonds may have faded, there is still no need to begin preparing a survival bunker for the EM zombie apocalypse, according to a recent report from Capital Economics (we are unable to link to the report for copyright reasons). “The surge in foreign investment into Egyptian bonds and equities that followed the devaluation appears to have faded – in fact, daily data show that foreign investors have been net sellers of Egyptian stocks for the past two months.” Nonetheless, the report notes that we are not yet in crisis mode when it comes to portfolio outflows as the fundamentals — particularly the government’s adherence to the economic reforms — remains strong. “With the government set to stick to orthodox policy making, however, overall capital inflows should hold up well,” notes the report.

As a matter of fact, things may even look good for carry traders down the road, as Capital Economics sees the EGP depreciating over the coming years. “We expect the currency to fall from EGP 17.9 per USD 1 at the time of writing to EGP 19 to the USD by the end of this year and to EGP 20 by end-2019,” says the report.

Monetary easing to continue later this year: The depreciating EGP, coupled with an improving balance of payments and account deficit, should see inflation trend downwards, says the firm. This downward trend is expected to resume later this year, providing scope for the central bank to resume its easing cycle. “We expect the central bank to lower its overnight deposit rate by a further 550 bps by the end of next year,” according to the report.

El Sisi inaugurates combined-cycle power plants, Gabal El Zeit wind farm: President Abdel Fattah El Sisi inaugurated yesterday the three 14.4 GW combined-cycle power plants in Burullus, Beni Suef and the new capital, which were developed by Siemens and our friends Orascom Construction (OC) and Elsewedy Electric. OC said in a press release yesterday (pdf) that the company “completed two out of the three mega power plants…with a total power generation capacity of 9.6 GW,” adding that work on the Burullus plant was exceptionally challenging given its remote location. Electricity Ministry spokesperson Ayman Hamza had said that the plants — which are expected to feed into Egypt’s planned regional power interconnection projects once they’re complete — would raise Egypt’s energy supply by c. 25% and ensure local power demand was covered.

The Electricity Ministry had reportedly settled on Siemens to run and manage the three plants, but the two sides have yet to sign official contracts. Sources had previously said that the EGP 6 bn, eight-year management contracts would be signed this month.

El Sisi also inaugurated the EGP 12 bn 580 MW Gabal El Zeit wind farm yesterday, according to the Associated Press. Hamza said the project is the largest of its kind in the world and “is part of a wider plan to make Egypt a regional energy hub.” Egypt has invested c. EGP 515 bn in electricity projects since 2014, Electricity Minister Mohamed Shaker also said yesterday.

INVESTMENT WATCH- Germany’s FTI plans massive expansion of Labranda World resorts in Egypt: German hospitality group FTI, which counts Samih Sawiris as a minority shareholder, is planning a massive expansion in Makadi Bay in the Red Sea, CEO Dietmar Gunz tells German tourism publication FVW. The company has bought three hotels on a 500,000 sqm site from Sawiris’ Orascom Development. It will first renovate the existing Labranda Club will be renovated first of all. Then, over the next 2-3 years, the group plans to build more hotels, an aqua-park, restaurants, shops and other facilities at the Makadi Bay site. Overall, it “will be bigger than Stella once fully built”, Gunz said. He did not mention how much the company plans to spend on the expansion.

Furthermore, FTI subsidiary Meeting Point Hotels also plans to open its first hotel in Egypt this winter with the 357-room Kairaba Lagoon in Sahl Hasheesh, said company head Roula Jouny.

EFG Hermes concludes Humansoft Holding’s USD 226 mn Kuwait Exchange accelerated book build in record timing: EFG Hermes announced yesterday that it successfully concluded the secondary offering of Al Othman Commercial Enterprises Company’s education outfit, Humansoft Holding Company, on the Kuwait Stock Exchange. The USD 226 mn transaction saw Al Othman Commercial Enterprises sell 17% of Human Soft shares on the Kuwait Stock Exchange. EFG acted as the sole sellside bookrunner and financial advisor, for what was “the largest accelerated equity offering in the Middle East and North Africa” in 2018, the company said in a press release (pdf). “Our position as one of the largest securities brokers in Kuwait and the largest in the region, in addition to being the leading ECM advisor in MENA has enabled us to launch and close this transaction in a record time; the transaction was successfully placed in 8 hours,” said EFG Investment Banking Co-CEO Mohamed Ebeid. “More importantly the transaction offered us the opportunity to avail a highly compelling investment play in one of the region’s most promising markets and sectors.”

The Humansoft accelerated book build is EFG’s third equity market transaction in less than two months, having just concluded advisory services last week on the GBP 125 mn IPO of microfinance lender ASA International on the LSE and advising on the USD 52 mn accelerated equity offering of Orascom Construction Industries on Nasdaq Dubai last month.

EARNINGS WATCH- Etisalat Misr reported revenues of AED 1.35 bn (c. EGP 6.58 bn) for 1H2018 on total consolidated group revenues of AED 26.2 bn, an increase of 3.6% y-o-y, the company said in its earnings release (pdf).

A drought across the Europe and the Black Sea region will force Egypt to pay a higher price for new wheat imports, Gianlucca De Paoli writes for Bloomberg. The General Authority for Supply Commodities (GASC) purchased yesterday 420k tonnes of Russian, Ukrainian, and Romanian wheat, according to Reuters’ Arabic service. The lowest price presented at yesterday’s tender was USD 217.95 per tonne from Russia’s GTCS — USD 14 higher per tonne than what GASC paid for its last shipment at USD 234.26 a tonne including freight, Bloomberg says. “Egypt paid an average USD 220.25 a tonne for 175k tonnes of Russian wheat in the last tender on July 10,” according to the business information service, which claims that the second-lowest offer of USD 235.66 per tonne came from Daewoo.

Traders do see an opportunity to flex, but acknowledge that it could be a short term problem for the time being. “Egypt will have to pay more," BGC Partners’ Pierre Tronc said before the offers were presented. "It is just a question of price. I don’t see supply being a problem." He added that “Russia will probably continue to dominate Egypt’s wheat tenders.”

One step closer to global gas export hub status: Egypt is expected to resume LNG exports to Jordan via pipeline on 1 January 2019, an unnamed government official tells Hellenic Shipping News. Oil Minister Tarek El Molla had said a few months back that Egypt was planning to resume LNG exports to Jordan — which have been disrupted since 2011 — early on in 2019, without specifying the exact timeline or volume of shipments. EGAS and state energy firm Enppi had also signed a USD 13 mn agreement to build a 17 km steel pipeline for the Jordanian-Egyptian Fajr for Natural Gas Transport and Supply Company that should be complete in 2020. The piece notes that it is “unclear whether Egypt still owed Jordan any compensation for the disruption in flows.”

Go home, Turkey. You’re drunk and jealous and feeling left behind. This comes as Turkish media once again accuses Egypt of being too greedy with its oil and gas exploration in the East Mediterranean, with the latest piece from Turkish daily Yeni Safak saying that Egypt and Israel are both trying to “abort” agreements they had struck with Ankara years ago over maritime jurisdiction in their efforts to secure reserves in the area. Turkey has been resorting to bullying Cyprus over the past year, interfering with exploration operations at the Aphrodite gas field. This prompted Cypriot Energy Minister George Lakkotrypis to vow 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.

LEGISLATION WATCH- State coffers to claim as much as 25% of slush funds: The House of Representatives’ general assembly granted its preliminary approval yesterday to a draft bill approved by the Madbouly Cabinet last week earmarking a portion of ministerial “private funds” to support the state budget, Al Masry Al Youm reports. The bill was referred to the House Planning and Budgeting Committee for review. The legislation would claim a portion of ministerial funds for state coffers that could be as much as 25%, up from a current 15%, Rep. Medhat El Sherif tells Al Mal. The proposed law would also lay claim to 25% of any annual surplus funds generated by government agencies, exempting only agencies that provide “economic or national services,” and funds that are education and research-focused, as well as those geared for social insurance, social housing, and university hospitals.

Background: These so-called “private accounts,” which have gained an unsavory reputation as slush funds, are typically maintained outside the budget system and have for years been the subject of scrutiny by both the domestic press and corruption watchdogs, and more recently, House Reps. MPs have been calling for greater oversight since it was revealed that a private fund belonging to the Cairo Governorate recorded a surplus of EGP 140 mn.

Egyptian state-owned and private television channels have begun airing ads warning against rumors and false news. Several of the ads refer to specific “fake stories” that have been circulating and provide the real story behind the rumors. The broadcasting of these ads comes a few short days after President Abdel Fattah El Sisi warned that rumors spreading discontent are the biggest threat to Egypt’s stability. “‘Don’t believe everything you see on social media,’ [one] advert says. ‘Check news before you share it. Get news from a well-trusted source.’” We wonder if Ahmed Moussa’s gripping report on Russian operations in Syria using the credible source that is the video game Apache Air Assault counts as fake news (watch, runtime: 7:50). The ads have not yet materialized on the interwebs. BBC has the story.

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Up Next

Foreign Minister Sameh Shoukry is set to visit Washington during the first week of August to meet with US Secretary of State Mike Pompeo, according to a ministry statement. Shoukry and Pompeo are expected to hold talks on developments in the Middle East and US-Egypt relations.

Egypt is set to select the board of directors for its EGP 200 bn sovereign wealth fund “within days” by Prime Minister Mostafa Madbouly, according to Finance Minister Mohamed Maait.

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

The sixth National Youth Conference will take place on 28 and 29 July, with university students as the center of discussion, Al Mal reports. The conference will be held at Cairo University, where President Abdel Fattah El Sisi is also expected to unveil a new education strategy.

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

Egypt in the News

Topping coverage of Egypt in the international news this morning was news that Egypt’s Armed Forces killed 13 suspected terrorists in Sinai. There is nothing significant about this particular update from MENA agency on Operation Sinai 2018, with most news outlets, including Haaretz, simply providing historical background on the operation.

US company to produce docuseries on planned excavation of Valley of the Kings: California-based film production company Storied Media Group will produce a docuseries on a planned large-scale archaeological excavation project at Egypt’s Valley of the Kings, according to Realscreen. The excavation, which will be led by none other than Zahi Hawass, is set to kick off in September and will focus largely on the area of the valley near King Tut and King Merenptah’s tombs. The team of archaeologists will also attempt to find several missing royal tombs during the excavation, according to Hawass.

Other headlines worth noting in brief:

  • The government in New Zealand extended the mandate of its peacekeeping mission to Egypt by three months, but has yet to make a decision on its long-term involvement in the Middle East, according to SBS News.
  • The family of imprisoned photojournalist Shawkan talk to the LA Times’ Salma Islam about his uncertain fate ahead of a possible verdict this week.

On Deadline

Finally, someone said it in print: Why isn’t the NTRA not improving quality? Egypt’s telecoms sector is entirely unsupervised and not held to any quality standards as a result of the National Telecommunications Regulatory Authority (NTRA) failing to do its job, Mohamed Fawzy says. Fawzy points to the frustration many people feel with the subpar quality provided by mobile network operators, and the lack of a response from the NTRA to hold them to any sort of standard. He also speaks for all of us when he urges MNOs to stop spending mns on television adverts and instead redirect that funding towards improving their services.

Worth Reading

The irrelevance of gender in tech makes it the optimal sector for the inclusion of Arab women in the labor force, Ahmed El Alfi and Iris Boutros write for the Cairo Review of Global Affairs. Women in the Arab world tend to outperform their male peers — “often by the largest margins globally” — when it comes to test scores in math, engineering, and computer information. However, there is a gap between women’s education and their entrance into the workforce with marketable skills, which partially arises from gender-based cultural restraints.

The upside of the tech sector is that it is a largely gender-blind industry that allows women to rise above these restraints. “Technology companies can provide fairer job [openings] … What they all have in common is the need for a technical skill-heavy workforce with technical knowhow. The fact that this knowhow can be tested without regard to gender, makes the tech industry a place in which women can work on a more level playing field.”

It’s worth noting that the IMF sees narrowing the gender the gap as crucial to reducing the Arab World’s 25% youth unemployment.

Worth Watching

Doing the so-called Kiki Challenge on the street in Egypt in could put you behind bars for up to a year, Ahram Online. The (unfortunate) dance that took the internet by storm last week “involves people hopping out of a car and dancing to [a] song [by Canadian hip hop artist Drake] while the car is moving alongside.” That, according to our Interior Ministry, can be dangerous on streets like ours. “If the dance results in injury or death, the case could be referred to prosecutors,” officials said (watch, runtime: 0:43)

Diplomacy + Foreign Trade

Egypt’s Foreign Ministry issued a statement renouncing a controversial law approved by the Israeli Knesset on Thursday, “defining the country as the homeland of the Jews — asserting Jerusalem as the capital.” The passing of the law came two days before Hamas announced it agreed to an Egyptian-brokered ceasefire with Israel in Gaza, according to the Financial Times. Despite the cool-down in violence, US Ambassador to the UN Nikki Haley slammed Arab states, including Egypt, for “talking a lot about supporting the Palestinians” but falling short of providing aid through the UN Relief and Works Agency, Reuters reports.

Egypt is looking to export USD 900 mn worth of goods under the Qualified Industrial Zones (QIZ) program by the end of 2018, head of the Trade and Industry Ministry’s QIZ unit Ashraf El Rabie tells Amwal Al Ghad. Ready-made garments account for some 98% of QIZ exports, which enjoy tariff-free access to the United States provided they meet a minimum required amount of Israeli content. Egypt and the US have been in talks to include tech products and leather-made goods in the QIZ program.

The Irrigation Ministry is collaborating with the European Union on a water resource management and conservation project in Sharqiya, Beheira, Gharbiya, Fayoum and Qena, Irrigation Minister Mohamed Abdel Ati said yesterday, Al Shorouk reports. The project, which will focus on monitoring water usage, as well as quality, and devising strategies to reduce consumption, is slated for completion by 2020. No further details were provided.

Energy

Eni plans to begin production at South Meleiha concession in 3-6 months

Eni plans to begin production on the South Meleiha concession in the Western Desert’s Faghur Basin in three to six months time, Oil Ministry sources tell Al Shorouk. The company plans to drill the third exploratory well of the concession before the end of 3Q2018, said the source. Earlier this month, Eni announced that it has made a light oil discovery at its second exploratory well in the South Meleiha concession, with the asset already producing 5,130 bopd.

SDX Energy completes production testing in South Disouq

SDX Energy has completed production tests on its test wells in South Disouq and is on track to begin production in 4Q2018, CEO Paul Welch said. “With our drilling activities completed, we will now focus on the completion of the South Disouq processing facility and pipeline infrastructure with a view to achieving first production by the end of 2018,” Welch added.

Misr Petroleum, Petronas sign refining agreement to produce 30k tonnes

The state-owned Misr Petroleum Company (MPC) signed an MoU with Malaysia’s Petronas on Thursday that will see them operate MPC’s idle Amreya plant capacity to pump out an additional 30,000 tonnes of refined fuel a year, according to an Oil Ministry statement. The output will be sold locally and exported to other African markets through a new joint venture that will be born from the two companies’ union.

Basic Materials + Commodities

Supply Ministry to issue tender to establish 27 logistics centers in August

The Supply Ministry will issue tenders in August to private investors for the development of 27 logistical centers across the country, ministry sources tell Al Mal. Sources added that the first centers will be established in Upper Egypt. The Supply Ministry has been looking to collaborate more with private sector players recently as it seeks to upgrade its infrastructure and transport capacity. It recently signed an agreement with Ukraine’s Nibulon that will see the latter invest USD 2 bn in new grain storage silos and barges along the banks of the Nile.

Manufacturing

Organization for Standardization drafting list of 200 new standards for industry

The Trade and Industry Ministry’s Organization for Standardization (EOS) is preparing a list of around 200 new quality standards for manufacturers, EOS head Ashraf Afifi tells Amwal Al Ghad. These new standards will mostly be geared towards the engineering, chemicals, and food industries, he added, without noting or hinting at the extent of these standards. The board of the EOS will meet on the first week of August to sign off on them, he said. Earlier this month, the EOS issued a decree enforning some 42 new standards on the auto industry.

Automotive + Transportation

Cairo Metro Line 3 Phase 3A to be inaugurated by end-2020

Phase 3A of Cairo Metro’s Line 3 is expected to be operational by the end of 2020, NAT spokesman Hassan Tawfik said. Once inaugurated, phase 3A would run from Ataba to El Kit Kat. The remainder of the phase should be completed by mid-2021, according to Tawfik.

Al Amal Automotive is in talks to begin assembling electric buses by 2019

Al Amal Automotive, BYD and Lada’s local partner, is in talks with bus manufacturer King Long and BYD to begin assembling electric buses at Al Amal’s factory in 10 Ramadan City by 2019, Al Mal reports. Soliman did not provide any details on the expected investment value.

Nile Taxi cooperates with private transport companies to launch unified bus, river taxi service

Nile Taxi is teaming up with unnamed private transport companies to launch a unified service that allows commuters to take a bus and a Nile Taxi with one EGP 35 ticket within days, Nile Taxi Chairman Magdi Ghali tells Al Masry Al Youm. According to Ghali, the service will be available through a mobile app.

Other Business News of Note

Samcrete to delist from EGX by year’s end, plans to relist subsidiaries once ready to meet new EGX requirements

Construction outfit Samcrete is planning to delist from the EGX before year’s end, with plans to float shares again from at least two of its subsidiaries once the company readies itself to meet a number of amended listing requirements, CFO Sameh Wahib tells Al Mal. The company had been facing mandatory delisting since March this year, when the Financial Regulatory Authority raised the minimum requirement for free float to 25% from 10%.

Facebook to launch campaign in Egypt

Facebook is reportedly in talks with several PR companies in Egypt to launch a promotional campaign in the country, according to Al Mal.

National Security

Egypt, US, UAE, Saudi navies begin joint naval exercise

Egypt, the US, the UAE, and Saudi Arabia have begun a multi-day joint naval exercise off Egypt’s Red Sea coast, according to the Defense Ministry. The joint exercise, Eagle Salute, will see Jordan, Pakistan, and South Korea participating as monitors.

On Your Way Out

The Al-Darb Al-Ahmar Arts School has taught performance arts, including singing and acting, to dozens of underprivileged students, Reuters says. The school, “named after the more than 700-year-old neighborhood where it is located, hopes that teaching children performing and circus arts they will also learn valuable life skills.”

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 17.78 | Sell 17.88

EGX30 (Tuesday): 15,480 (+1.2%)
Turnover: EGP 760 mn (19% below the 90-day average)
EGX 30 year-to-date: +3.1%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session up 1.2%. CIB, the index heaviest constituent ended up 2.8%. EGX30’s top performing constituents were Porto Group up 4.2%, Heliopolis Housing up 4.1%, and Egyptian Iron & Steel up 3.7%. Yesterday’s worst performing stocks were Qalaa Holdings down 3.6%, Egyptian Resorts down 3.2%, and Juhayna down 2.7%. The market turnover was EGP 760 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +9.1 mn
Regional: Net Short | EGP -81.3 mn
Domestic: Net Long | EGP +72.2 mn

Retail: 65.2% of total trades | 69.7% of buyers | 60.8% of sellers
Institutions: 34.8% of total trades | 30.3% of buyers | 39.2% of sellers

Foreign: 16.6% of total | 17.2% of buyers | 16.0% of sellers
Regional: 12.0% of total | 6.7% of buyers | 17.4% of sellers
Domestic: 71.3% of total | 76.1% of buyers | 66.6% of sellers

WTI: USD 68.81 (+0.42%)
Brent: USD 73.98 (+0.74%)

Natural Gas (Nymex, futures prices) USD 2.74 MMBtu, (+0.22%, August 2018 contract)
Gold: USD 1,234.00 / troy ounce (-0.05%)

TASI: 8,405.82 (-0.50%) (YTD: +16.32%)
ADX: 4,776.89 (+0.33%) (YTD: +8.60%)
DFM: 2,925.74 (-0.21%) (YTD: -13.18%)
KSE Premier Market: 5,365.42 (+0.09%)
QE: 9,618.33 (+1.94%) (YTD: +12.85%)
MSM: 4,433.06 (-0.34%) (YTD: -13.06%)
BB: 1,367.62 (+0.77%) (YTD: +2.70%)

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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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