Tuesday, 14 August 2018

4-5 IPOs in eight months

TL;DR

What We’re Tracking Today

We’re really feeling the summer dearth of stories, and to be honest, it feels like Sahel.

The CBE’s Monetary Policy Committee (MPC) is widely expected to keep interest rates on hold when it meets this Thursday. Analysts’ expectations that interest rates will remain unchanged comes despite inflation cooling in July to 13.5% after surging in June. Analysts, including HC’s Sara Saada, see the move as helping the economy to absorb some of the shock of July’s subsidy hikes. Our friends at Pharos see annual headline inflation rising to an average 13.2% in 1Q2018-19, up from an average 12.8% in the fourth quarter of FY2017-18.

PSA- Media reports have surfaced that the EGX and the CBE have declared that the Eid Al Adha holiday will run from Monday, 20 August until Thursday, 23 August. We have yet to see anything official come out from either the CBE or the EGX. It is typical for them to announce their holidays after the Madbouly Cabinet calls the official days, which has not yet happened as of dispatch time. Dar Al Ifta had announced the first day of Eid Al Adha will be Tuesday, 21 August. We’ll keep you posted.

Turkey fallout wipes out gains from EM zombie apocalypse rebound: EM equities and currencies continued to take a beating on “Manic Monday,” with the Turkey fiasco not only erasing the July rebound in emerging-market stocks, but also making them the cheapest since early 2016, when equities gained 60% over the following two-year period, according to Bloomberg. JPMorgan’s EM foreign exchange index fell another 1.7% to a fresh record low, while the FTSE Emerging Markets stock index fell 2%, its worst one-day drop since early February and taking it to near a one-year low, the FT says. Apart from the lira and the Argentinian peso, the South African rand was the hardest hit EM currency.

Fresh new lows from Turkey despite moderate action: Turkey’s lira continued to drop against the USD yesterday, “rattling other emerging markets” as it ended the day 6.6% lower.“The country’s debt and stock markets were also swept up in the turmoil,” says the Wall Street Journal. Ankara’s currency dropped despite Turkish officials’ efforts to “boost liquidity in the market [by] lowering the amount of liras and USDs lenders must park with the central bank against their liabilities” — a move analysts predicted would not “have any direct impact on the lira” since it fails to address the “core concern” that is Turkey’s “hefty debt exposure.” Investors are seeing that anything short of a cooling of tensions with the US and a rate hike by the central bank as a bandaid.

As the crisis intensifies, analysts are filing into their respective camps in the debate over the extent of the contagion:

The harbingers of doom and gloom: Those who see the contagion spreading perceive the Turkey crisis as another domino in a series of events leading up to a perfect storm. Turkey’s financial crisis, coupled with mounting EM debt, shrinking liquidity worldwide as a result of fading monetary easing and a strengthening USD is driving investors to not be forgiving of policy mistakes and perceive risk in a different light, some analysts say. “After ten years of monetary policy anaesthetic, the number of sceptics is growing,” Alberto Gallo at Algebris Investments tells the FT (which has been the voice of EM doom and gloom for the better part of 2018).

The optimists: Others, including JP Morgan, see the crisis as a disaster of Turkey’s own making and investors as smart enough to see the disaster as isolated at a time when EM governments with some sense take active policies to contain their respective crises. “EM has already seen a large selloff between April to July and negative developments in Turkey will eventually be seen (along with Argentina) as isolated given their exceptional external imbalances compared to most EM countries,” JPMorgan analysts including Luis Oganes and Jonny Goulden wrote in note to clients picked up by Bloomberg.

Saudi Arabia appears to have lowered its oil production during July, despite vows less than a month before that it was planning to pump a record 10.8 mn barrels of crude a day under a pact with OPEC to ramp up global production, Anjli Raval writes for the FT. “OPEC’s largest producer pumped just under 10.4 mn bopd last month,” according to OPEC researchers. “This is a fall of more than 52,000 bopd from the prior month.” OPEC’s decision had come at a time when global oil prices had surged above the USD 80/bbl mark.

Musk lining up the ducks for Tesla buyout: Elon Musk confirmed that Saudi Arabia’s Public Investment Fund was interested in funding Musk’s attempts to take Tesla private in a blog post on Monday. In it, Musk revealed that talks with KSA’s sovereign wealth fund for an acquisition of a stake had been taking place over the course of two years, and that the fund’s management “expressed support” for his announcement last week of his intentions to take Tesla private. “Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction,” Musk said, adding “that it was just a matter of getting the process moving.” The post was meant to explain his tweet announcing the buyout, amid reports that the US Securities and Exchange Commission was investigating the accuracy of his tweet that funding for the buyout was “secured.”

Musk later tweeted that he is working with Goldman Sachs and PE firm Silver Lake on the transaction, giving it further credibility. The Tesla founder and CEO also said that he is currently working with legal advisers on the transaction, which according to his original announcement, would give the company a USD 70 bn valuation.

Enterprise+: Last Night’s Talk Shows

By far the most important thing to take note of on the airwaves were the private school tuition hikes sanctioned by the Education Ministry. It was all a mixed bag from here on out.

Education Ministry raises cap on tuition fee hikes for private Arabic, language schools: The Education Ministry has decided to raise the cap imposed on tuition fee hikes for private Arabic and language schools to between 7% and 25%, up from last year’s cap of 7-11%, ministry spokesperson Ahmed Khairy said yesterday, according to Al Shorouk. Schools will be allowed a certain fee increase margin based on their tuition grades. The revision of the caps for Arabic and language schools is meant to allow to grow revenues.

This does not apply to international schools: Tuition fee increases for big international schools have been maintained at a maximum of 7% per annum, after being allowed to raise fees by up to 14% last year.

Having said that, the ministry sanctioned a 25-45% increase on international schools’ bus fees to offset higher costs incurred by the recent fuel price hikes, Khairy told Hona Al Asema (watch, runtime: 5:10).

DISCLAIMER: It is worth noting that some of these international schools do not fall under the jurisdiction of the Education Ministry, as some are parent/teacher associations and NGOs that fall under the purview of the Social Solidarity Ministry. It is unknown which schools the new regulations apply to.

Gov’t continues to battle “fake news”: Cabinet’s Information and Decision Support Center has picked up on and dispelled eight rumors over the past three days as part of the government’s battle against fake news, Cabinet Spokesman Ashraf Sultan told Masaa DMC. President Abdel Fattah El Sisi had said last month that rumors fueling discontent are the biggest threat to Egypt’s stability (watch, runtime: 3:57).

Commentary on El Sisi’s meeting with Yemen’s president: President Abdel Fattah El Sisi’s meeting yesterday with his Yemeni counterpart Abdrabbuh Mansur Hadi (which we recap in detail in Diplomacy + Foreign Trade, below) shows the importance of Egyptian-Yemeni relations to Red Sea security, former Egyptian ambassador to Yemen Ashraf Akl told Masaa DMC (watch, runtime: 3:31).

Security forces launched three separate raids on militant hideouts over the course of 48 hours to preempt any attacks, former assistant interior minister Mohamed Nour told Masaa DMC. The raids resulted in the death of six militants yesterday (watch, runtime: 3:49). The raids also got some airtime on Yahduth fi Masr (watch, runtime: 2:02).

A draft law in Tunisia that would grant equal inheritance rights to men and women took up some airtime on Hona Al Asema, with Egyptian Center for Women’s Rights Chair Nehad Aboul Komsan arguing that Sharia law already gives equal rights to both genders, and sometimes favors women over men. However, she ceded that it is up to each country to decide whether to create its own secular laws (watch, runtime: 5:35). House Rep. Amna Nosseir, meanwhile, completely rejected the idea of using anything other than the Quran to dictate inheritance laws (watch, runtime: 19:16).

Elsewhere last night, Masaa DMC’s Eman El Hosary discussed family-related legal cases with a panel of lawyers (watch, runtime: 3:20), while Assistant Supply Minister Ahmed Kamal gave Al Hayah fi Masr a rundown of preparations for Eid Al Adha (watch, runtime: 6:50).

Speed Round

Speed Round is presented in association with

M&A WATCH- DPI partners with GB Auto on Mashroey and Tasaheel: Africa-focused private equity firm Development Partners International (DPI) is partnering with GB Auto subsidiary, GB Capital, on the latter’s microfinance and consumer finance firms Mashroey and Tasaheel in a transaction worth USD 45 mn, DPI announced in a press release this morning (pdf). The transaction sees DPI acquiring a 33% stake in MNT Investment BV — GB Capital’s finance subsidiary and parent company of Mashroey and Tasaheel — giving DPI a 25% stake in Mashroey and Tasaheel, GB Auto said in an investor release (pdf). “GB Auto has great belief in the prospects of MNT and with the support of DPI, we see great opportunities for the growth of the business in new markets. DPI have proven experience and expertise of the market and we look forward to working with the team,” GB Auto Chairman and CEO Raouf Ghabbour said.

DPI’s third investment in Egypt: “The investment in MNT marks our third investment in Egypt from our ADP II fund, having now deployed approximately USD 150 mn in Egypt. This underpins our truly pan-African approach to investing into industries and markets that benefit from the growing middle class,” said DPI Partner Sofiane Lahmar. “We look forward to the partnership with GB Capital and Dr. Raouf Ghabbour, in backing Mounir Nakhla and his strong management team. We view MNT Investments as a high growth company operating in a very exciting and fast growing industry in Egypt,” he added.

MNT Investment BV Founder and CEO Mounir Nakhla will stay on to lead the company. “We are very excited to have the backing of DPI, a leading private equity firm in Africa and whom we have known for a long time. We look forward to bringing on their expertise to help us institutionalize and further grow the business,” Nakhla said.

Background: Mashroey offers financing options to entrepreneurs for the purchase of utility vehicles with a focus on the Bajaj brand, which is distributed by GB Auto product, while Tasaheel provides direct microfinance lending to eligible clients, with a focus on group loans to skilled working women.

IPO WATCH- The EGX is expected to see 4-5 IPOs over the coming eight months, EGX boss Mohamed Farid told Reuters’ Arabic service in an interview. Farid did not delve into the specifics of the listings, except to say that these companies are expected to raise as much as EGP 6-7 bn. The combined market cap of these companies was EGP 25 bn, he added. He added that foreign holdings in Egyptian stocks have climbed to EGP 20 bn since the EGP was floated back in November in 2016.

The bourse is also planning to shake up its stock market indices next year, Farid added. The plan is to eliminate two of the eight existing indices to make room for two new ones, according to Farid, who did not delve into the details. The decision to add two new indices came at the behest of foreign investors who made the proposal to the EGX during separate meetings with bourse officials, he added.

ACCH approves stock split ahead of November stake sale: State-owned Alexandria Container and Cargo Handling’s (ACCH) EGM approved yesterday a 10:1 stock split ahead of its planned stake sale, Al Masry Al Youm reports. ACCH is one of five companies piloting the state privatization program. The company is expected to sell 30% of its shares on the EGX in November, the company announced earlier this month. ACCH is one of three companies whose stake sales will be managed by state investment bank NI Capital.

INVESTMENT WATCH- Germany’s BAG to invest EUR 70 mn on manufacturing projects at East Port Said industrial zone: The East Port Said Development company (EPSD) signed two agreements yesterday worth a combined EUR 70 mn with local subsidiaries of Germany’s Business Avenue Group (BAG), according to a Suez Canal Economic Zone statement picked up by Al Masry Al Youm. The first agreement will see BAG East Port Said begin in November developing a EUR 55 mn plant at the East Port Said industrial zone to manufacture state-of-the-art irrigation systems that conserve water and limit waste. Under the second agreement, Gerda Egypt — a joint venture between BAG and Polish security systems maker Gerda — will establish a EUR 15 mn plant that will manufacture reinforced steel doors and locks. Egypt had signed MoUs with BAG last year for the development of five factories in the industrial zone, where the company also intends to manufacture tractors and buses. EPSD — a public-private joint venture between the Industrial Development Group (IDG), the National Service Project Organization (NSPO), and SAMCRETE — is the main developer and promoter of the industrial area in East Port Said.

Speaking of industrial zones, seven Indian companies are reportedly in advanced talks with the government to set up an Indian industrial area in the SCZone, India’s ambassador to Egypt, Rahul Kulshreshtha, said on Sunday, without revealing any details on the identity of the companies or expected size of investments.

UAE banks to raise USD 500 mn syndicated loan for TE: The state-owned Telecom Egypt (TE) has tapped First Abu Dhabi Bank and Mashreqbank to act as joint arrangers for a USD 500 mn, five-year syndicated facility, Reuters reports, citing a statement from the banks. The banks have already begun talks to syndicate the facility, which will be used to support capital and operational expenditures. “The loan is the latest of a number of debt facilities raised by Egyptian borrowers over the past few months, suggesting improved business conditions in the country,” the newswire notes. TE has reportedly picked up some USD 900 mn in loans recently. Its latest agreements were a short-term USD 200 mn contract with the African Export-Import Bank and another USD 200 mn long-term contract with Chinese financial institutions.

EARNINGS WATCH- Ibnsina Pharma reported a 40.1% y-o-y increase in net profit to EGP 75.2 mn in 1H2018, according to the company’s earnings release (pdf). Revenues grew 46% y-o-y during the six month period, coming in at nearly EGP 6 bn, “driven by double-digit expansion across all business lines,” according to Co-CEO Mahmoud Abdel Gawad. The growth in 1H2018 proves that Ibnsina’s “three-pronged strategy of strengthening our core business, pursuing value-based differentiation, and diversifying our streams of revenue has begun to yield concrete results,” Co-CEO Omar Abdel Gawad said. “Ibnsina’s solid pharma distribution business is supported by a healthy and growing healthcare market that is one of Egypt’s most defensive sectors, with continued room for growth.”

The company expects to sustain its strong performance through to the end of the year, especially as it moves ahead with plans to expand its cosmetics business with the inauguration of new warehouses around the country and inaugurate new cosmetics warehouses across the country and “expanding our portfolio and purchases of cosmetics product, while allocating more resources to this new venture to better serve our clients’ needs,” Mahmoud said.

Arabian Cement Company also reported results for 1H2018 yesterday posting a net profit after tax of EGP 212.8 mn, compared to EGP 71.7 mn in the same period last year, according to the company’s consolidated financial statement (pdf). Revenues for the period reached EGP 1.6 bn, up from EGP 1.2 bn in 1H2017.

Telecom Egypt reported (pdf) an 18% y-o-y drop in net profit after tax in 1H2018 to EGP 2.1 bn, down from EGP 2.5 bn during the same period last year. Consolidated revenues recorded EGP 10.1 bn, marking a 16% y-o-y increase.

Egypt will receive a USD 45 mn grant from China to launch phase two of its NileSat project under an agreement signed in Cairo yesterday, the Investment Ministry said in statement. Some of the satellite’s components will be assembled in China, while others will be assembled locally, Higher Education Minister Khaled Abdel Ghaffar said, giving no indication to the exact percentage or timeline for the project. Egypt had previously received a USD 23 mn grant from China to establish a Satellite Assembly, Integration and Test Centre as part of the project, for which the two sides had been conducting feasibility studies. President Abdel Fattah El Sisi had earlier this year ratified legislation establishing a USD 100 mn space agency.

Renewable energy companies might pay 2% of their output for land rights: The government is looking to make renewable energy who have obtained land under a usufruct contract pay “2% of their annual output,” unnamed officials said yesterday. The move is meant to enforce order to a current haphazard system whereby different governorates charge different rates for land rights. Governorates have been charging rates ranging from 5-7% of their annual output, prompting GCC-based and other investors to request that the government set a universal fee.

LEGISLATION WATCH- House to look at family planning in the next House session: House of Representatives Economic Committee Chair Mohamed El Emary has drafted a new law that would set incentives for those willing to cap their reproduction at two children, he tells Al Shorouk. The law would not work in the vein of China’s two-child policy, as it would not punish families with more than two children, said El Emary, adding that such a move would be unconstitutional. The law already has support from some 60 House representatives and will be the subject of parliamentary hearings and a national dialogue, he added.

Maternity leave, working hours for women, and child labor to be looked at: Meanwhile, the House Labor Committee is reviewing the long-languishing Labor Act with an eye to introducing amendments which would impact maternity leave and working hours for women, committee chair Gabaly El Maraghy tells Youm7. While he did not specify what those changes might entail, he added that the amendments would seek to improve working conditions for women. He noted that the act would seek to limit the hiring of children and would set requirements for apprenticeships and vocational training for children unable to attend school and leave work.

El Sisi, Netanyahu held “secret meeting” over Gaza ceasefire: President Abdel Fattah El Sisi reportedly held a secret meeting in Cairo with Israeli Prime Minister Benjamin Netanyahu in May to discuss brokering a ceasefire in Gaza, Reuters reports, citing Israel’s Channel Ten News. Unnamed US officials told the channel that the two leaders “discussed Egypt’s efforts to promote a diplomatic solution for Gaza. The plan would include restoring the Palestinian Authority to power in Gaza, arranging a cease-fire between Israel and Hamas, easing the Israeli-Egyptian blockade on the territory and rehabilitating its infrastructure,” according to Haaretz.

Kuwait’s Agility and Centerbridge team up in Abraaj acquisition bid: Kuwait’s Agility took its intention to acquire part or all of beleaguered private equity firm Abraaj to the next level by teaming up with US-based Centerbridge Partners, sources told Reuters on Monday. The pair is reportedly interested in buying Abraaj’s investment management unit, with room to pick up another partner, sources added. Reuters had noted back in June that Agility is making a move to acquire parts of Abraaj, and is even setting up a team to manage the assets once it is acquired. Cerberus Capital Management had recently withdrawn its USD 25 mn offer to acquire the rights to manage the Abraaj Group’s assets after investors rejected the firm’s bid. Abu Dhabi Capital Management was said to have made a USD 55 mn offer for the right to run Abraaj’s assets.

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Up Next

Governors shuffle coming after Eid break? A shuffle of the nation’s 27 governors will likely be announced after the Eid Al Adha break, an unnamed source from the Local Development Ministry tells Al Shorouk. The announcement of the shuffle has been postponed several times since reports of its imminence first broke in June, but sources had said earlier this week that as many as 12 governors could be hanging up their suits. Leading jurists were reportedly among the candidates for higher office in Giza and Upper Egypt.

The Egyptian Federation of Investors Associations (EFIA) is meeting with Finance Minister Mohamed Maait this week to discuss the latest draft of the Customs Act.

El Sisi to sign energy, education, transport, housing cooperation agreements in Beijing: President Abdel Fattah El Sisi is expected to sign several cooperation agreements in the energy, education, transport, and housing sectors during his visit to Beijing next month, according to a Cabinet statement.

Egypt is set to host the 57th ACI & 43rd ICA World Congress from 25-27 October in Cairo to discuss the latest developments in global banking. The conference will be held under the auspices of CBE Governor Tarek Amer.

Image of the Day

Two pictures shot in deep Red Sea waters were among the winners of Scuba Diving Magazine’s “Through​ ​Your​ ​Lens​ Underwater ​Photo​ Contest,” according to Lonely Planet. British photographer Jamie Hall won first place in the compact camera category for his shot of a moray eel off the coast of Tiran Island, while Ferenc Lőrincz claimed third place in the same category for his picture shot near Marsa Shagra of a cleaner fish working cleaning a grouper’s mouth.

Egypt in the News

Topping coverage of Egypt in the foreign press this morning is news that security forces killed six suspected militants during a raid in 6 October City. Reuters and the Associated Press both have the story.

The US’ release Egypt’s suspended military aid is a result of “distorted” US policies grounded in “persistent myths about Egypt,” Andrew Miller writes for Reuters. Miller argues that Washington’s USD 1.3 bn military aid package is not necessary for Egypt’s counterterrorism operations or its lasting peace with Israel, saying that the success of the war on terror is more contingent on training tactics than it is on further financing. He also says that Egypt has no strategic interest in turning its back on peace with Israel, meaning that the lack of US aid would not make a difference. The biggest misconception in US policy on Egypt is that pressuring Cairo yields no results, Miller says, arguing that successive US administrations have simply been too impatient to see these pressure tactics bear fruit.

Other headlines worth noting in brief:

  • Human Rights Watch reiterated calls for an investigation into the dispersion of the 2013 Rabaa sit-in, issuing a statement yesterday to mark the event’s fifth anniversary.
  • An Egyptian expatriate was stabbed to death in Kuwait after clashing with an Asian man, according to Kuwaiti newspaper Al Rai.
  • The UK denied three Egyptian curators a visa to attend a conference in Wales, according to HyperAllergic.

On Deadline

Financial inclusion requires higher literacy rates, use of tech in daily life: The success of Egypt’s financial inclusion policy hinges on raising literacy rates and the degree to which people embrace technology, Dina Abdel Fattah writes for Amwal Al Ghad. While internet banking and e-payments are on the rise, the majority of payments in Egypt are still cash, which suggests that there is simply a lack of demand for digital solutions despite their widespread availability, she says. Abdel Fattah urges the telecoms sector to step up and begin nudging people towards going digital in more of their transactions by raising awareness on the simplicity of technology.

Worth Watching

Will Smith and robots just don’t click: Actor Will Smith went on a date with Sophia the Robot (who still gives us the creeps) — and ended up getting friendzoned. The hilarious encounter has Smith pulling out his charm in an attempt to woo Sophia, but even the romantic setting didn’t shield the Fresh Prince from an awkward rejection (watch, runtime: 4:31).

Diplomacy + Foreign Trade

El Sisi stresses importance of Yemen’s stability to Middle East, Egyptian security: Yemen’s stability is “of extreme importance” to the security of Egypt and the Middle East as a whole, President Abdel Fattah El Sisi said during a meeting yesterday with Yemeni President Abdrabbuh Mansur Hadi, according to an Ittihadiya statement (pdf). El Sisi and Hadi held talks on Red Sea security in light of an attack by Houthi rebels that jeopardized maritime navigation through the Bab El Mandab strait. The two also discussed ways Egypt can support Yemen in its current security plights, Sisi said in his speech following their meeting. Hadi is also set to meet with several other Egyptian officials during his two-day visit, including Parliament Speaker Ali Abdel Aal.

Kuwait to continue enforcing strict inspection measures on Egyptian agricultural imports for three months: Kuwait’s Public Authority for Food and Nutrition (KPAFN) reportedly decided to continue enforcing strict inspection measures on Egyptian agricultural imports for another three months as of 25 July, unnamed Egyptian quarantine officials said yesterday. The decision was based on a recommendation of the GCC country’s highest food safety authority, according to the sources. Kuwait enforced strict inspection measures on imported Egyptian produce last year after lifting a ban it had imposed due to concerns over residual pesticide levels. Egypt began to take steps last year to tighten quality control and inspection of agricultural cargo earmarked for export, after Kuwait and other GCC countries, including Saudi and the UAE, decided to ban imports from Egypt due to overuse of pesticides.

This came as the Cabinet’s Information and Decision Support Center dismissed as hearsay social media reports suggesting that various countries had banned imports of seven Egyptian crops, according to a statement picked up by Al Masry Al Youm. Agriculture Ministry spokesperson Hamed Abdel Dayem also specifically denied reports that Saudi Arabia had warned of a potential ban on pomegranate imports from Egypt, telling Al Shorouk that the ministry has not received any official memos or letters from the kingdom.

Energy

ANRPC to begin doubling 92-95 octane production next month

The Alexandria National Refining and Petrochemicals Company (ANRPC) will begin next month producing 850k tonnes of 92-95 octane petrol, doubling its annual capacity, Oil Minister Tarek El Molla said yesterday, Al Mal reports. Enppi and Petrojet, general contractors on the project, had completed 81% of the necessary work on the project at the time.

Basic Materials + Commodities

GASC issues two tenders for unspecified amount of wheat

The General Authority for Supply Commodities (GASC) issued yesterday two international tenders for an unspecified amount of wheat, to be shipped between 21 and 30 September, and 1 and 10 October, according to Reuters’ Arabic service. The tender results are expected to be announced later today. Egypt’s last tender saw it purchase wheat at record-high prices of USD 250 per tonne.

Egypt has 6 months of sugar in stock, Supply Ministry says

Egypt has enough strategic sugar reserves to last for six months, the Supply Ministry said yesterday, without specifying the exact quantity, Reuters reports. Egypt is expected to produce c. 2.3 mn tonnes of sugar by this year’s end and consume around 3 mn tonnes, “filling the gap with imports,” according to the newswire.

Manufacturing

AIG’s new antibiotics factory to go online end-2018

Arabian International Group’s (AIG) new EGP 200 mn antibiotics factory is set to begin operating by the end of this year, Chairman Aly Ouf said yesterday. The new facility, which will be operated and managed by AIG, is owned by five unnamed local investors. AIG has not yet disclosed any details about production capacity but said that it expects to receive its final production permits from the Health Ministry soon.

Automotive + Transportation

Careem plans to roll out bus-hailing service, starting with Egypt

Ride-hailing app Careem is planning to roll out a bus-hailing service, starting with “at least four Egyptian cities,” people close to the matter tell Bloomberg. The new service, the plans for which have yet to be made public, is expected to be launched in September. “The people did not disclose how much the Dubai-based company is investing in this project, but indicated that significant capital has been allocated for it.”

Banking + Finance

United Bank to launch microfinance unit by year’s end

The United Bank of Egypt is planning to launch a specialized microfinance unit by the end of 2018, Chairman Ashraf El Kady tells Al Mal. The Egyptian Microfinance Union will be cooperating with the bank to provide technical support during the unit’s launch, El Kady said. No additional details were provided.

National Cement Company files for delisting

The National Cement Company has filed papers with the EGX to delist its 103.2 mn shares, according to an EGX statement picked up by Al Mal.

Other Business News of Note

Religious Endowments Authority to re-issue tender to restructure its asset portfolio

The Religious Endowments Authority is planning to re-issue a tender to select an asset management company to take the lead on restructuring its asset portfolio, Al Mal reports. The tender will officially be announced following the Eid Al Adha break, according to authority head Sayed Mahrous. The authority had reportedly tapped EFG Hermes, Beltone, and CI Capital earlier this year for the job, after initial findings had valued the asset portfolio at EGP 800 bn. It remains unclear why the authority decided to scrap its initial selection.

Government to tender 13.1k feddans in 10 Ramadan City

The government has invited investors to submit their offers for the development of 13.1k feddans in 10 Ramadan City, where it hopes to establish commercial and administrative projects, as well as hotels and health facilities, Prime Minister Mostafa Madbouly said yesterday.

Egypt Politics + Economics

Second monk arrested in connection with Bishop’s murder

Police forces arrested a second monk yesterday in connection with the murder of St. Macarius Monastery abbot Bishop Epiphanius, the Associated Press reports, citing the state news agency. 33-year-old monk Faltaous was taken into custody after recovering from an attempted suicide. This comes one day after the defrocked monk Ash’eyah was arrested after confessing to the crime and admitting he had accomplices.

Sports

Egypt wins 13 medals at World Para Powerlifting African Championships

Egyptian athletes secured a total of 19 medals at the Algiers 2018 World Para Powerlifting African Championship, including 13 gold medals, four silver medals, and two bronze medals. The tournament wrapped up yesterday, with Egypt finishing as first runners-up after Nigeria. On the final day, our powerlifters won five of six men’s events, according to the tournament’s official website.

On Your Way Out

Banking software company Temenos will be collaborating with the American University in Cairo’s Venture Lab incubator, providing fintech startups with a model of their top banking software to use while developing their businesses, Temenos said in a press release yesterday. The platform Temenos T24 “will enable startups to integrate their solutions with banking data and functionality as well as to test them for scalability and robustness. It will also allow them to plug into the 11 major financial institutions in Egypt already running Temenos T24.”

Egyptian-French economist Samir Amin died on Sunday at the age of 86. The man who coined the term eurocentrism was born in Cairo in 1931 and spent most of his childhood in Port Said, according to Ahram Online. He moved on to write a number of books and worked extensively in the field of developmental economics, ending his career as the director of the Third World Forum, a research institute engaged in the discourse about various economic development paths.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.83 | Sell 17.93
EGP / USD at CIB:
Buy 17.83 | Sell 17.93
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Monday): 15,522 (-1.4%)
Turnover: EGP 709 mn (19% below the 90-day average)
EGX 30 year-to-date: +3.3%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 1.4%. CIB, the index heaviest constituent ended flat. EGX30’s top performing constituents were QNB Alahli up 1.2%, Eastern Co. up 1.2%, and CIB flat. Yesterday’s worst performing stocks were SODIC down 6.9%, Madinet Nasr Housing down 5.7%, and TMG Holding down 5.1%. The market turnover was EGP 703 mn, and regional investors were the sole net buyers.

Foreigners: Net Short | EGP -1.1 mn
Regional: Net Long | EGP +4.6 mn
Domestic: Net Short | EGP -3.5 mn

Retail: 65.0% of total trades | 66.3% of buyers | 63.7% of sellers
Institutions: 35.0% of total trades | 33.7% of buyers | 36.3% of sellers

Foreign: 15.8% of total | 15.7% of buyers | 15.9% of sellers
Regional: 6.4% of total | 6.7% of buyers | 6.1% of sellers
Domestic: 77.8% of total | 77.6% of buyers | 78.1% of sellers

WTI: USD 67.50 (+0.45%)
Brent: USD 72.89 (+0.39%)

Natural Gas (Nymex, futures prices) USD 2.93 MMBtu, (+0.03%, September 2018 contract)
Gold: USD 1,202.40 / troy ounce (+0.29%)

TASI: 7,872.79 (-2.38%) (YTD: +8.95%)
ADX: 4,800.90 (-0.90%) (YTD: +9.15%)
DFM: 2,847.14 (-1.46%) (YTD: -15.52%)
KSE Premier Market: 5,378.06 (-0.85%)
QE: 9,556.64 (-0.81%) (YTD: +12.12%)
MSM: 4,381.92 (-0.55%) (YTD: -14.07%)
BB: 1,346.09 (-0.17%) (YTD: +1.08%)

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Calendar

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.

18-21 September (Tuesday-Friday) The Big Five Construct Egypt, Egypt International Exhibition Center, Cairo.

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.

26 September (Wednesday): E-Commerce Summit, Nile-Ritz Carlton, Cairo.

27 September (Thursday): CBE’s Monetary Policy Committee meeting.

06 October (Saturday): Armed Forces Day, national holiday.

23 October (Tuesday): First Conference on Sukuk (Sharia-compliant bonds), Cairo

23-24 October (Tuesday-Wednesday): Intelligent Cities Exhibition & Conference 2018, Fairmont Towers Heliopolis, Cairo.

25-27 October (Thursday-Saturday): 57th ACI World Congress & 43rd ICA Annual Conference 2018, Four Seasons Nile Plaza, 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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