Wednesday, 15 August 2018

Eni to drill in Noor gas field

TL;DR

What We’re Tracking Today

Its official folks, the CBE has declared (pdf) Monday 20 August-Thursday 23 August off for Eid Al Adha. The Labor Ministry has reportedly declared only Monday-Wednesday off as paid holiday, according to a statement yesterday picked up by Al Shorouk.

Is the EGX looking into setting up an index to collect and track real estate data? EGX boss Mohamed Farid and other officials met yesterday with representatives from 30 real estate companies to begin discussing a plan to launch an index for Egypt’s real estate market, sources close to the matter tell Al Mal. The index means to make accurate data available on prices of different types of developments across the country, as well as demand for real estate products, in addition to tracking changes in both, according to the sources. However, given the arbitrary and somewhat informal nature of the real estate sector in Egypt, the index is likely to only include information about new urban developments and cities — at least in its earlier phases, according to the sources. Real estate marketing firms, including Coldwell Banker, ERA, and JLL, attended the meeting.

It’s interest rate day tomorrow: The CBE’s Monetary Policy Committee (MPC) is expected to keep interest rates on hold when it meets tomorrow. Analysts’ expectations are that interest rates will remain unchanged comes despite inflation cooling in July to 13.5% after surging in June. Tomorrow’s MPC meeting is especially important as central banks across emerging markets look to contain the contagion from Turkey’s economic meltdown.

On that front, the IIF has a report out which puts Egypt among the countries most at risk of contagion from the Turkey fiasco. We have more on the report and further analysis in the Speed Round below.

The Turkish lira rallied for the first time in a week as Turks cashed in USD savings to take advantage of the huge slump in the local currency, Bloomberg reports. The lira jumped 5.9% to TYR 6.5 to the USD on Tuesday. The rally coincided with Turkish businesses and leading banks issuing calls for the government to end the spat with the US, improve ties with the EU, chart a clear path to single-digit inflation, and most crucially, raise interest rates.

Erdogan becomes a walking, breathing ad for Samsung: Undeterred, President Recep Tayyip Erdogan doubled down and said Turkey would boycott US electronics, including the iPhone. He suggested Turks buy Samsung or locally made Venus Vestel smartphones instead. Now there’s a solution.

El Erian weighs in on the Turkey, EM contagion debate: Allianz chief economic adviser Mohamed El Erian has offered some sage advice on how emerging market investors should view contagion from the Turkey crisis in an opinion piece on the FT. His view is that while the looming financial crisis facing Turkey can be relatively contained at the moment, unless meaningful policies are adopted soon, contagion risk could spread. “The longer Turkey maintains this posture, the greater the risk that unfavourable technical spillovers will be accompanied by more disruptive economic and financial contagion for both the country and emerging market assets as a whole.”

His advice to Turkey? Go the way of Egypt (though not in those words): EM crises are nothing new, and are usually stemmed through action by policymakers that can include a combination of higher interest rates, tightening fiscal and credit policies and access to exceptional external funding from the IMF, which comes with an endorsement for the domestic policy adjustments. “Until such a policy approach takes hold, the EM asset class as a whole tends to be vulnerable to capital outflows, especially on the part of “cross-over” investors,” El Erian says.

Sage advice to EM investors #1: Don’t expect a quick fix in the form of a detente with the US.

Sage advice to EM investors #2: “Rather than rushing to buy the asset class as a whole, investors would be well advised to show patience followed by great care. They should wait for more attractive levels to invest in local and foreign currency bonds issued by countries with responsive policy stances, large international reserves and few debt mismatches.”

Egyptian-born British-American economist Minouche Shafik is reportedly being considered for Bank of England’s (BoE) top job next year, according to Daily Mail. Shafik, currently the director of the London School of Economics, had served as BoE deputy governor for three years. Financial Conduct Authority chief executive Andrew Bailey is allegedly also being considered to replace current Governor Mark Carney, who steps down in June 2019.

Enterprise+: Last Night’s Talk Shows

The Madbouly Cabinet approved yesterday allowing football fans to return to stadiums in September, Youth Minister Ashraf Sobhy confirmed at yesterday’s meeting. Audiences will be limited to a maximum of 5,000 people per game as a first step, according to Sobhy, who added that the move will be made possible through dedicated efforts from the government, but also the football federation and clubs. Prime Minister Mostafa Madbouly warned that any violations would be dealt with sternly. The decision to allow football fans back into football stadiums as of next month received the most attention from the talking heads last night.

The gradual return of fans to football matches will be strictly regulated to prevent security issues from arising, Cabinet Spokesperson Ashraf Sultan told Hona Al Asema’s Dina Zahra. Security measures and regulations will be announced before the first stadium opens its doors again, Sultan said (watch, runtime: 6:45). Sultan had a similar conversation on Al Hayah fi Masr (watch, runtime: 4:57).

Among those regulations is limiting the number of stadiums that will be allowed to host fans, according to sports critic Essam Shaltout. Stadiums will be selected based on whether or not they meet safety and security requirements.

The authorities also reportedly plan on compiling a database of fans who will be allowed inside stadiums through online ticket purchases (watch, runtime: 10:46). Yahduth fi Masr also covered the news (watch, runtime: 0:48).

The story is receiving widespread coverage in the foreign press from the likes of the BBC and the National.

CPA boss talks handling consumer complaints: Consumer Protection Agency head Rady Abdel Moaty (fondly known to us as “Stickers”) had a chat with Masaa DMC’s Osama Kamal about the agency’s mandate. Abdel Moaty announced the CPA has recently launched an initiative nauseatingly dubbed “A week for the love of the nation” that revolves around the agency resolving people’s complaints with companies (watch, runtime: 3:50). Isn’t that what they’re supposed to do all other weeks of the year?

Abdel Moaty also gave his two cents on the Rabaa dispersal, during which he held the position of assistant interior minister for human rights. He maintained the ministry had been transparent with the dispersal by briefing civil society organizations on the situation beforehand (watch, runtime: 5:36).

State Information Services boss Diaa Rashwan also weighed in on Rabaa and what little potential remains for a reconciliation with the Ikhwan and other Islamist groups (watch, runtime: 1:32).

The recently inaugurated Assiut dam also got more airtime last night, with Irrigation Ministry official Ashraf Hebeishi giving Masaa DMC further details on the project (watch, runtime: 7:22 and runtime: 7:05).

Speed Round

Speed Round is presented in association with

Eni signs concession agreement to begin exploration at offshore Noor gas field: Eni announced yesterday signing a new concession agreement with the Egyptian government to begin exploration activities at the offshore Noor gas field in the East Mediterranean, the company said in a statement (pdf). The USD 105 mn agreement will see Eni drill two exploratory wells in the 739 sqm field during 2H2018. Eni holds an 85% stake in the concession alongside Tharwa Petroleum Company, which holds 15%. Eni had denied last month that it made a massive gas discovery at the Noor gas field, after news reports suggested that Noor could contain around 90 tcf of gas reserves, or 3x as much gas as the supergiant Zohr field. Egyptian Oil Minister Tarek El Molla had also downplayed the reports at the time, saying that seismic studies were not yet complete.

Eni also signed two other agreements with the EGPC and other international oil companies yesterday. A USD 22.5 mn agreement was signed with BP to drill four wells in the Nile Delta’s Greater Nooros Area, while an USD 11.7 mn agreement with Croatia’s INA to drill nine wells in the Western Desert’s Ras Qattara concession was also signed, according to an Oil Ministry statement. After the signing, El Molla indicated that the government would strike more oil and gas agreements in the near future as it moves ahead with plans to turn Egypt into a regional energy export hub.

Meanwhile, Eni plans to bring its total production of crude oil and natural gas from its various concessions to 600k boe/d, sources from Eni-EGPC JV Belayim Petroleum Company (Petrobel) tell Amwal Al Ghad. The Zohr and Nooros gas fields currently account for the lion’s share of the company’s natural gas output, while crude oil production is concentrated in the Gulf of Suez and Mediterranean concessions. The sources did not disclose the expected timeline for these new production targets.

Israel’s foreign ministry gave our quest to become the East Med’s gas export hub a huge pat on the back at the expense of Turkey. A classified report from Israel’s Foreign Ministry has recommended that Israel rely on exporting its natural gas to Europe through Egypt, rather than Turkey, according to Ynet News (Hebrew). According to the report, Egypt is the best option on the economic, political, and strategic fronts than Turkey, which is “a dangerous and volatile player,” and is also preferable to Greece.

The endorsement casts shade on an EU-endorsed pipeline that would run from the East Mediterranean through Turkey — the rival proposal to exporting the gas to Europe from Egypt. Energy analysts have long complained that the pipeline was not cost effective compared with the Egypt option. Regional politics and tensions between Israel, Cyprus and Turkey have also dimmed the prospects of the pipeline. Not to mention the fact that plans to export from Egypt are already underway with international agreements having been signed, including the USD 800 mn-1 bn pipeline.

Is Egypt’s attraction to carry traders making it especially at risk from fallout from the Turkey crisis? The Institute of International Finance (IIF) sees Egypt as one of the emerging markets that will be impacted the most from the Turkish crisis contagion. In a report out on Tuesday (pdf), the IIF said that Egypt, South Africa, Indonesia, Lebanon, and Colombia as especially at risk from contagion due to the concentration risk arising from large portfolio inflows to them in such a small period of time. Essentially, the “hot money” that we’ve picked up from carry traders and the pace with which it came in appears to be making these countries vulnerable.

Not by the gov’t’s count: Finance Minister Mohamed Maait had told us in an exclusive this week that not only is Egypt not vulnerable, but that the Turkey crisis has driven further portfolio inflows to Egypt last week.

One thing that is definitely impacted is our exporters, as Turkish importers of Egyptian ready made clothes have cancelled their contracts as a result of the crisis, Textiles Industry Council’s deputy head Magdy Tolba tells Amwal Al Ghad. He added that Turkish exports make up 30% of all of Egypt’s textile exports.

CABINET WATCH- The Finance Ministry will be postponing its survey and appraisal of the country’s real estate assets to December 2020 from 2018 under amendments to the real estate tax code approved by the Madbouly Cabinet at its weekly meeting yesterday. The move means to give the Tax Authority more time to conduct its review of the country’s residential, commercial, and industrial properties — which should legally take place every five years — in order to determine their value and better calculate its tax base. We had heard earlier this month that the government was getting ready for a major overhaul of how real estate taxes, which would also involve taxing the oil and gas sector.

E&Y to advise on government’s electronic billing system: The cabinet also gave the Finance Ministry the green light to hire Ernst & Young to consult on a tender it plans to issue for the development of the government’s electronic billing system, which is expected to help improve transparency and accountability as a way of battling corruption and tax evasion. The move is part of the government’s transition to a paperless, cashless economy, which saw amendments to the Accounting Act issued last month, making it mandatory for all government transactions to be electronic, and banning the use of paper cheques for transactions above a set threshold. The ministry also received a nod to move forward with its tender.

The cabinet had a few other items on its plate yesterday, including:

  • Approving a KWD 50 mn loan agreement with the Kuwait Fund for Economic Development for the establishment of a sewage water treatment facility in Bahr El Baqar, which should help in the reclamation of 330k feddans of agricultural land east of the Suez Canal;
  • Giving the Education Ministry the green light to renew its USD 5 mn teacher-training program with Discovery Education for another three years;
  • Awarding the Egyptian Electricity Holding Company the EGP 10.6 mn contract for the installation of 1.5 MW-worth of transformer stations for an Endowments Ministry-affiliated oncology hospital.

IDH to launch new Egyptian radiology business under Al Borg brand name: The London-listed Integrated Diagnostics Holdings (IDH) is launching a new radiology business in Egypt under the Al Borg brand name as part of plans to develop into a “one-stop shop diagnostics service provider,” the company announced in a press release yesterday (pdf). The company’s new facilities, Al Borg Scan, will be led by some of the country’s top radiologists and offer the complete range of radiology services using state-of-the-art equipment supplied by brands including GE Healthcare, Siemens, Hitachi, and Fujifilm.

Around 70% of the project’s costs are being covered by a EGP 130.5 mn, eight-year loan to Al Borg from Ahli United Bank, with operating cash flows covering the balance. "Our market in Egypt is growing in the double digits, and so is our top line,” said IDH CEO Hend El Sherbini. “Our expectation is that our pathology business will deliver new patients to our radiology business and that, in the fullness of time, having both services under one roof will also drive growth in our pathology test volumes.” IDH grew its top line 29% y-o-y in 1Q2018.

Dana Gas says fresh investments in Egypt delayed over unpaid arrears: Egypt’s irregular repayments of its arrears to Dana Gas is putting a damper on the company’s investment plans in the country, the company said in its earnings release yesterday (pdf). “Due to the lack of regular and predictable payment the Company will continue its strategy of balancing its investments in Egypt against its collections in the near term,” according to the release.

Egypt repaid the company USD 89 mn in overdue arrears in 1H2018, bringing its total trade receivables from Egypt reached USD 202 mn as of 30 June 2018. This includes USD 120 mn which is overdue, according to S&P Global.

Dana Gas is not planning to take legal action against Egypt but is “in discussion with the government to make it clear to them that the sooner they pay us the sooner we would reinvest the money back into Egypt,” Dana Gas CEO Patrick Allman-Ward told reporters yesterday, according to The National. There is no dispute between Egypt and the company, and the issue “is about [Egypt’s] capacity to pay,” he added. Allman-Ward had previously said that his company would spend USD 47 mn in capex in Egypt this year, “but any new investments will be made only if the country pays some of the money it owes.”

Ocean Alliance quits East Port Said to protest high fees: International shipping alliance Ocean Alliance has decided to cease operations in East Port Said as of today due to high port fees, an unnamed executive tells Al Mal. The group — which includes CMA CGM Group, APL, Evergreen, and China’s COSCO Shipping — will continue to operate in West Port Said, the source said. An alliance made up of Yang Ming, Hapag-Lloyd, K Line, Mitsui O.S.K. Lines, and the NYK Group had retired from East Port Said last year also due to high fees, after the government decided to raise prices by nearly 100%. Since then, however, Egypt has been offering discounts and other incentives to attract more traffic to its ports, and we had even heard that Transport Minister Hisham Arafat and Suez Canal Authority head Mohab Mamish had promised the shipping lines to try and repeal the hike. The two officials had also agreed to begin implementing unified port fees across the country as of July in order to eliminate competition between national ports.

Zotye Auto, Changhe Automobile cars to be assembled locally in 2019: China’s Zotye Auto’s local agent, IFG Group, is planning to build an auto assembly plant in 6 October City by 2019, Chairman Mohamed Farag tells Al Mal. The new factory will produce 4,600 cars a year when operations start. No details on the investment value were provided. Meanwhile, Changhe Automobile’s local agent, Boudy Group, also said it was reviewing offers from ِAboul Fotouh Automotive and the Egyptian German Automotive Company to begin locally assembling Changhe Q7 next year, Chairman Osama Boudy tells Al Mal. The company is expecting to assemble 1,000 cars a year at an initial investment cost of EGP 100 mn.

INVESTMENT WATCH- Evergrow in talks with IDA for land to complete second phase of fertilizer complex: Fertilizers producer Evergrow is in talks with the Industrial Development Authority (IDA) to acquire a 100k sqm land plot in Sadat City to complete the second phase of its fertilizer project, Marketing and Sales Director Mostafa Foad tells Al Mal. The first phase of the EUR 7 mn project — a production line for potassium sulfate products that are used in a wide variety of industries — is expected to begin operations in January 2019, with work on the second phase scheduled to begin in January 2020. Each phase will produce around 50,000 tonnes a year, of which 75% will be earmarked for exports, with the rest sold locally, according to Foad, who adds that Evergrow recently signed an agreement with a Belgian company to market its products in Europe and Africa. Evergrow had announced last month that it was scaling back its investment in a new calcium diphosphate plant to EGP 2 bn, from an original EGP 9.5 bn.

EARNINGS WATCH- Elsewedy Electric reported a 21% y-o-y decline in net profit after minority interest in 1H2018 to EGP 2.37 bn, down from EGP 3.01 mn in the same period last year, according to the company’s earnings release (pdf). Revenues for the period fell 3% y-o-y to EGP 20.1 bn, largely due to a drop in the turnkeys project segment. Despite that, however, the company witnessed strong growth across its business lines as “the fundamentals supporting Elsewedy Electric’s business remain strong: Populations in the MENA region and the GCC continue to grow at a quick pace and the movement towards industrial modernization has only intensified in the last year,” CEO Ahmed Elsewedy said. Looking ahead, Elsewedy will focus on growth through the optimization of its cost and governance structure, as well as depend on its reputation and competitive edge to allow it “capture the upside across a variety of infrastructure projects.”

Egypt Kuwait Holding (EKH) saw bottom-line growth for 2Q2018 gain a solid 46% y-o-y to USD 30.7 mn, the company reported (pdf). EKH saw growth in revenues for the quarter rising 45% y-o-y to USD 116.1 mn. Revenue growth was driven by strong operational performances by subsidiary companies and supported by the commencement of operations at Offshore North Sinai (ONS). "Our results in the second quarter of the year demonstrate the operational excellence of our portfolio companies,” Chairman Moataz Al Alfi said. After having weathered macro and market headwinds and re-emerged as leaders in their respective markets, our subsidiaries today are delivering organic growth through a continued improvement in on-the-ground results and success in paving new growth avenues,” he added. Moving forward: “Our focus during the second half of the year will continue to be on operational improvements as a primary growth driver, all while pushing forward expansion initiatives across our subsidiaries and keeping an eye out for new [options], such as our ongoing investment in the production of medium-density fiberboards,” Al Afifi said.

Orascom Development Holding (ODH) reported a net loss of CHF 16.4 mn in 1H2018, the company said in its earnings release. The results for the period reflect “a one-off FX translation loss of CHF 16.7 mn…mainly related to the devaluation of the EGP in 2016.” ODH delivered strong operational results, however, that “curbed bottom lines losses” for the group, helping it break even.

Talaat Moustafa Group Holdings (TMG) reported an 11% y-o-y jump in net profit after taxes to EGP 774.21 mn in 1H2018, compared to EGP 696.54 mn in the same period last year, according to an EGX filing (pdf). The company’s revenues also increased to EGP 3.97 bn in 1H2018, marking a 19% y-o-y rise from EGP 3.33 bn.

Emaar Misr for Development posted a net profit of EGP 1.10 bn in 1H2018, compared to 976.95 mn in the same period last year, according to an EGX filing.

Al Tawfeek Leasing (AT Lease) posted a net profit (pdf) after tax of EGP 17.9 mn in 2Q2018, up from EGP 13.8 mn during the same period last year.

MOVES- Gold miner Centamin appointed former Mubarak-era minister Ibrahim Fawzy to its board as an independent non-executive director, according to a company statement (pdf). Fawzy was most recently the chairman of the Egyptians Abroad Company for Investment & Development.

MOVES- Preferred Hotels & Resorts named Nicolas Villemin as regional director for Middle East and North Africa, according to Hotelier Middle East. The appointment was made in June. Villemin previously served as a consultant for hotel brands like Viceroy, Shangri-La, and Habtoor Hospitality.

MOVES- Suez Canal Authority (SCA) head Mohab Mamish will remain in his post for another year, according to a presidential decree yesterday picked up by Al Masry Al Youm. Mamish has been head of SCA since 2012.

Egypt may face challenges as it ventures into the realm of nuclear power generation, which requires substantial and sophisticated infrastructure to support it. Egypt needs “USD 18 bn of investment in transmission and distribution to support generation capacity in the next five years,” according to a report by Arab Petroleum Investments Corporation (Apicorp), which implies that financing is the main hurdle. Despite that, the report nods to regional efforts to diversify energy resources and Egypt’s plan to bring the USD 30 bn Dabaa nuclear power plant online in partnership with Russia’s Rosatom. “For countries in the GCC, nuclear power can free up more oil and gas for exports while net-importing countries like Egypt and Jordan will be able to diversify their energy sources, enhance energy security, and reduce their expensive import bills.” Tap or click here for the full report (pdf).

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Up Next

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.

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

The Macro Picture

WB, WEF say Arab region is doing better at infrastructure, but needs improvement in private sector growth: While the Arab World demonstrated improvements over the last decade in areas like infrastructure development and technology, “many countries are struggling to diversify their economies and develop a vibrant, competitive private sector that can foster innovation and job creation,” according to the World Bank and World Economic Forum’s Arab World Competitiveness Report 2018 (pdf). The region will need to generate 58 mn jobs by the year 2040 to maintain unemployment rates and even more to lower them, the report noted.

Nonetheless, the report noted that the region showed some improvement in support for innovation and providing crucial seed funding to start-ups. The GCC is leading the way on this, but the Central Bank of Egypt’s SME financing initiative was cited as significant.

The report also aggregated global competitiveness data from MENA countries that were released last September. Egypt is the 100th most competitive country in the world out of 137 countries studied, with an overall score of 3.9 out of 7. The UAE ranks as the 17th most competitive country in the world. The other MENA countries to make it to the top-30 globally were Qatar (25th) and Saudi Arabia (30th). The rankings are based on 12 factors (or pillars, as the report calls them), including the macro economic climate, government institutions and transparency, education and infrastructure.

Image of the Day

Egypt’s off-roaders and rally raiders are just about done “with paranoia about the desert’s lurking security threats” putting an end to their fun, David Wood writes for Roads & Kingdoms. Egypt’s community of rally racers, which have had a long-standing presence, have been struggling to acquire permits for their events since 2015, when a Mexican tour group was the accidental target of armed forces soldiers while on safari in the Western Desert. “Getting the permits is hell,” one driver said. “The permit applications require precise coordinates of the proposed course, detailed evacuation plans and identification documents for every team member, which currently totals around 200 people.”

Egypt in the News

The fifth anniversary of the dispersal of the Rabaa Al Adawiya mosque sit-in made top headlines on Egypt in the foreign press this morning, with Amnesty International reiterating calls yesterday about “pursuing justice for the victims,” and human rights advocate Mohamed Soltan urging the US government to address human rights abuses in a piece for the Washington Post.

The Upper Egypt Development Act throws cold water on Nubians’ hopes of returning to their ancestral homeland, Khaled Mahmoud writes for the Carnegie Endowment for International Peace. The bill and a few presidential decrees preceding it have delineated several areas formerly inhabited by Nubians for investment and development or as military zones. “Although these development projects would benefit all residents of these regions, most notably by creating employment [options] in agriculture and construction, many displaced Nubians no longer reside in these areas.”

Other headlines worth a look this morning:

  • The murder of Bishop Epiphanius “exposed a side of the [Coptic] church that few in Egypt knew existed,” the AP says.
  • 114 trucks of Egyptian aid entered Gaza yesterday through the Rafah border crossing, Ma’an News reports.
  • Mo Salah could face legal issues after Liverpool referred footage to the police showing the footballer texting while driving, Reuters reports.

On Deadline

A strong media corps does not need large amounts of state spending, Mohamed Amin writes for Al Masry Al Youm. Amin argues that the country’s media can flourish and help the government’s fight against fake news through accumulated experience.

Worth Reading

Using climate science to de-risk investments in African agribusiness: Agriculture is Africa’s main source of livelihood and employs nearly three-quarters of its total population, but farmers continue to struggle to attract investments and financing packages, Evan Girvetz writes for the Financial Times. This financing gap is largely the product of the African continent’s unpredictable conditions — both meteorological and political — which make investments highly risky. Enter climate-smart agriculture (CSA), which is meant to equip farmers with the tools and knowledge necessary to adapt to climate change, thereby making their practices more sustainable and increasing food security. “Climate-smart agriculture helps to de-risk agricultural lending and insurance by making climate-related crop failures and other risks less likely to occur or less severe when they do occur.”

Incentivizing CSA for better access to financing: Financial products are now beginning to emerge that incentivize farmers’ use of climate-smart agriculture by offering them better terms on loans, Girvetz says. Meanwhile, investors are being guided towards “the most viable CSA options” in Africa to make better investment decisions through a large-scale research project launched by the International Center for Tropical Agriculture, the World Bank, and the UN Food and Agriculture Organization. The research provides a “detailed snapshot of the diverse climate risks each of these countries is facing, and an analysis of the factors that are driving or hindering the adoption of climate-smart practices.”

Worth Watching

John Terry: Legend, star, and Egyptian football pundit? Retired England and Chelsea Football Club legend John Terry has apparently become a bit of an expert on Egyptian football and has been spending his spare time analyzing football matches for the TV channel of new superclub Pyramids FC, according to UK tabloid the Sun. The channel has apparently been racking up the pundits, with Ronaldinho, Didier Drogba, Alan Shearer and Rio Ferdinand expected to appear during the season (watch, runtime: 0:50).

Diplomacy + Foreign Trade

El Sisi talks regional issues with Salman, MbS in Neom: President Abdel Fattah El Sisi met yesterday with Saudi Arabia’s King Salman and Crown Prince Mohammed bin Salman in the Neom robot city to discuss regional developments and bilateral ties, according to an Ittihadiya statement. The statement is otherwise scant on details. Egypt’s intelligence chief Abbas Kamel also sat in on the unplanned meeting.

Basic Materials + Commodities

GASC purchases 420k tonnes of wheat from two int’l tenders

The General Authority for Supply Commodities (GASC) purchased yesterday a total of 420k tonnes of wheat in two international tenders issued on Monday, according to Reuters’ Arabic service. Traders tell Reuters that the lowest offer GASC received in the tenders was USD 230.99 per tonne FOB for the shipment due in September from Romanian trading firm CHS. Russia’s GTCS offered USD 234 per tonne FOB for the October shipment. Yesterday’s prices are 2% lower than what GASC paid at Egypt’s last tender as global wheat prices are beginning to fall, according to AgriCensus.

Banking + Finance

Obour Land applies for EGP 400 mn capital increase

Obour Land has submitted a request to the Financial Regulatory Authority (FRA) to increase its issued capital to EGP 400 mn from EGP 200 mn, according to an EGX filing (pdf).

Other Business News of Note

MAF contracted to develop retail outlets for NUCA’s new urban centers

Majid Al Futtaim (MAF) Group signed an agreement on Tuesday with the New Urban Communities Authority (NUCA), which would see it build and operate retail outlets across the new cities that NUCA is building, according to a press release from the Madbouly Cabinet. No further details were provided on the size and scope of the transaction.

Legislation + Policy

FRA to require credit inquiry from margin traders ahead of 4Q2018 trading season

The Financial Regulatory Authority (FRA) will reportedly force margin traders to perform credit inquiries at I-Score before they start to trade in 4Q2018, sources with knowledge of the matter tell Amwal Al Ghad. The move comes as part of the FRA’s drive to boost capital market transparency. The move is the latest in a series of new regulatory amendments that seek to align policies with new legislation such as the Capital Markets and Companies acts.

Law

Matouk Bassiouny advises DPI in its partnership with GB Auto on Mashroey and Tasaheel

Matouk Bassiouny was the legal counsel to Africa-focused private equity firm Development Partners International in its transaction to acquire a 25% stake in GB Auto subsidiaries Mashroey and Tasaheel.

National Security

Egypt looks to Germany to purchase frigates

Egypt is considering purchasing two Meko A200 frigates from Germany’s ThyssenKrupp Marine Systems (TKMS) as discussions with France’s Naval Group on the acquisition of further Gowind corvettes grinds to a halt over cost concerns, according to a widely cited piece from France’s La Tribune. The German government is reportedly looking to sweeten the transaction by offering TKMS attractive credit through Euler Hermes.

On Your Way Out

Humans of New York is coming to Cairo: If you’re among the few people who won’t be fleeing Cairo for the Eid Al Adha vacation, be on the lookout for Brandon Stanton, the photographer/writer behind photoblog Humans of New York. Stanton, who frequently gathers stories from cities outside his native New York, announced he will be spending a few days in Egypt next week.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.84 | Sell 17.94
EGP / USD at CIB:
Buy 17.83 | Sell 17.93
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Tuesday): 15,357 (-1.1%)
Turnover: EGP 717 mn (17% below the 90-day average)
EGX 30 year-to-date: +2.2%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session down 1.1%. CIB, the index heaviest constituent ended down 0.4%. EGX30’s top performing constituents were Telecom Egypt up 2.4%, EFG Hermes up 1.2%, and Egypt Kuwait Holding up 0.9%. Yesterday’s worst performing stocks were Elsewedy Electric down 4.6%, Porto Group down 4.6%, and TMG Holding down 3.4%. The market turnover was EGP 717 mn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -130.7 mn
Regional: Net Short | EGP -2.1 mn
Domestic: Net Long | EGP +132.7 mn

Retail: 43.3% of total trades | 40.1% of buyers | 46.4% of sellers
Institutions: 56.7% of total trades | 59.9% of buyers | 53.6% of sellers

Foreign: 29.2% of total | 20.1% of buyers | 38.3% of sellers
Regional: 5.4% of total | 5.2% of buyers | 5.5% of sellers
Domestic: 65.4% of total | 74.7% of buyers | 56.2% of sellers

WTI: USD 66.81 (-0.34%)
Brent: USD 72.31 (-0.21%)

Natural Gas (Nymex, futures prices) USD 2.95 MMBtu, (-0.27%, September 2018 contract)
Gold: USD 1,197.70 / troy ounce (-0.25%)

TASI: 7,893.18 (+0.26%) (YTD: +9.23%)
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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.

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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