Monday, 10 September 2018

HSBC wins AMOC mandate.

TL;DR

What We’re Tracking Today

Enjoy your mid-week break. Tomorrow is officially off: The stock exchange and the central bank have announced they will close tomorrow in observance of Islamic new year after a Labor Ministry statement noting it would be a national holiday. Happy first day of 1440, y’all, and see you back here in your inboxes on Wednesday.

Oh, and it’s your last holiday until 20 November (the Prophet’s Birthday) so make the most out of it. Armed Forces Day, the traditional October holiday, falls on a Saturday this year and our wager is that we’re all heading to work on the Sunday instead of taking it as a replacement.

The EFG Hermes London conference, the fall’s top gathering of frontier and emerging markets fund managers, kicks off today at Emirates Arsenal Stadium. The conference website is here.

Egypt to sign agreement with USAID today: Investment Minister Sahar Nasr is expected to sign an unspecified agreement today with USAID Egypt Mission Director Sherry Carlin, according to a ministry statement (pdf).

**#3 High interest rates are the price we will have to pay to stay competitive to the carry trade. Emerging markets are in their first “sustained” rate-hike cycle since 2011. Rates are rising in EM from Turkey and Argentina to India, Indonesia, the Philippines and the Czech Republic, and the upshot is that we’re going to face competition for allocations from the carry trade. Think of it as the global arms race of EM monetary policy.

The others are catching up to us: An index maintained by Capital Economics and picked up by the Financial Times notes that an index of “the number of emerging market central banks raising rates minus the number cutting them has risen to is highest level since 2011, when the world was still recovering from the most acute phase of the global financial crisis.” MENA has had the highest policy rates globally for the past couple of years, but as a Capital Economics chart shows (above), the gap between us, Latin America and emerging Europe has narrowed.

Egypt’s new Catch 22: Paying more to keep capital here strangles private-sector borrowing and raises costs to the state treasury. Egypt led EM with a substantial rate hike after the float of the EGP — arguing the IMF orthodoxy that raising rates was necessary to help curb inflation. It also ensured we were attractive to hot money, which came pouring in to help rebuild reserves and ease pressure on the EGP. We’ve been saying for the past month that with the EM sell-off continuing, policymakers now have a new Catch 22: Fund managers are pulling out of emerging markets, spooked (a) by the risks about which we drone on every morning in this space and (b) motivated by a strengthening USD and the prospect of rate hikes in the United States. As other countries raise rates, Egypt’s central bank will have to (at a minimum) leave interest rates on hold to keep the carry trade from fleeing Egypt. Toss in the risk of depreciation of the EGP (as Turkey, South Africa and other major EM are seeing) and we see the central bank leaving rates unchanged when it next meets at the end of the month.

This is (at best) mediocre news for the private sector and possibly for FDI, where we have long argued that high interest rates discourage investment by domestic businesses — a key catalyst to help unlock foreign direct investment. And high policy rates will also continue to keep borrowing costs high for the good folks at the Finance Ministry, with all that that entails (in the near-to-medium term) for government finances.

Another day, another Abraaj takedown: Yesterday, it was the FT’s turn to publish a long take on the rise and fall of Abraaj and its founder Arif Naqvi. What we found interesting in this one is just how much of the firm’s recent misfortune hinged on the USD 1.8 bn sale of a majority stake in Pakistan’s K-Electric to a Chinese group in 2017.

Speaking of Actis and Abraaj, we have a tiny correction to make: Actis’ offer to acquire some of Abraaj’s assets was actually for USD 1, and not USD 1 bn as we wrote yesterday. The story has since been corrected on our website. Thanks to the many readers who wrote in to point us toward the correction.

Kuwait is new “darling” of investors in regional equities, outshining neighbors Saudi Arabia and the UAE as it slowly but surely delivers a story rooted in policy liberalization, Bloomberg says. The oil-rich country’s expected entry to the MSCI Emerging Markets equity index has also propelled a rally in its stocks while other EM equities have been heading in the opposite direction. “Kuwait’s market offers a refuge for investors spooked by the roll-back of crisis-era stimulus policies and new global trade skirmishes. It has the ‘best financial position of any Middle East oil exporter,’ with the lowest crude-price break-even point for the state budget,” one portfolio manager tells the news information service.

But it’s could be a volatile fall for oil, the Wall Street Journal argues in a solid analysis piece, noting that the “rapid rise and fall in oil prices [in the past month or so] is a sign that investors are weighing conflicting signals,” leaving the market “at a crossroads … as many investors reassess whether global growth will continue stoking demand for fuel.”

Strangest EM-related story we heard these past few days? A failed assassination attempt against Brazil’s far right and poll-leading presidential candidate Jair Bolsonaro. Bolsonaro appears to be recovering from the attack, Reuters reports.

A little closer to home, Sudan’s President Omar Al Bashir is hoping the old tactic of dissolving the government will somehow fix the country’s battered economy (or at least demonstrate some action), according to Reuters.

Europe looks set to tighten AML procedures. The European Union’s banking regulator could get “greater enforcement powers and more resources to investigate the activities of banks involved in illicit financing” as part of a crackdown on money laundering and funding for terrorists, the Financial Times reports. Look for this, alongside new powers for the European Public Prosecutor’s Office, to feature today in European Commission president Jean-Claude Juncker’s annual “State of the Union” speech. The salmon-color paper expects the twin initiatives to be formally unveiled next week.

Jack Ma is retiring: Jack Ma, co-founder of (arguably) the second largest ecommerce site in the world will announce a succession plan next as he prepares to hand over the title of executive chairman next year to CEO Daniel Zhang, CNBC reports. Ma will stay on as executive chair for 12 months to ease the transition, the broadcaster says.

Enterprise+: Last Night’s Talk Shows

**#8 Lamees’ lesser half will be back on the air this month: Amr Adib will return to the airwaves this month with his new show “El Hekaya” on MBC network, according to Al Shorouk. The program is reportedly kicking off mid-month and will run Saturday-Monday every week, according to Youm7. Ragaa El Gedawi, Saad El Din El Helaly and Gigi Zayed will be joining Adib as co-hosts. Adib signed in June a two-year contract to join MBC following his sudden on-air resignation from ON’s Kol Youm. Adib said at last night’s launch party for the show that he plans on staying at MBC until he retires. No word on when that blessed day might come.

Meanwhile, there is still no sign of Lamees. Lamees or not, our daily roundup of Last Night’s Talk Shows will be back on Sunday.

Speed Round

Speed Round is presented in association with

**#1 EXCLUSIVE- HSBC has won the mandate to lead the sell-down of the state’s stake in the Alexandria Mineral Oils Co. (AMOC), an insider close to the transaction tells us. AMOC is in line to sell shares representing as much as 30% of the company’s equity on the EGX this year as part of the state’s reborn privatization program.

AMOC’s new refinery will cost around USD 1 bn to build, initial feasibility studies show, the company said in a filing to the EGX (pdf). The company is still looking at how to fund the project, which originally expected to cost USD 500 mn. Dutch consultant Fluor is working on the project, the details of which were expected to be unveiled at the end of August, according to previous remarks by AMOC Chairman Amr Moustafa, who had also said that the company plans to invest up to EGP 3 bn this year to implement expansion plans.

**#2 Zaki Hashem, Zulficar, Matouk Bassiouny shortlisted for Eastern mandate: High-profile law firms Zaki Hashem & Partners, Zulficar & Partners, and Matouk Bassiouny have made NI Capital’s short list to run legal on the EGX sale of 4.5% of cigarette maker Eastern Company, Amwal Al Ghad reports, citing sources with knowledge of the matter. EFG Hermes was tapped last week as bankers for the transaction, which is expected to pilot the privatization program. Heliopolis Housing, Abu Qir Fertilizers, and Alexandria Containers & Cargo Handling are also in line to to sell shares this year. A second wave of companies is expected to follow in early 2019.

In other news from the world of state-owned companies, Heliopolis Housing is reportedly vetting between three offers for a EGP 1 bn loan from Banque du Caire, QNB Egypt, and Banque Misr, sources told Al Shorouk. The company plans to use the facility for infrastructure projects at its New Heliopolis development.

**#4 EXCLUSIVE- FinMin to complete study on taxing social media ads this month: The Finance Ministry is set to complete a study on how to tax social media advertising this month, a ministry source told Enterprise. The taxation framework will likely include provisions demanding that ad agencies and social media companies pay a 14% VAT on sales, the source added.

No new legislation for taxing ads and e-commerce: The source said that it was unlikely that new legislation would be drafted to tax social media ads or e-commerce transactions. Instead, the provisions will be included in amendments to existing legislation, including the VAT Act, a move that should fast-track the changes through the House of Representatives.

SMEs Act under final review: The ministry is also conducting a final review of the SMEs Act before presenting the final draft to the Madbouly Cabinet, the source added. He reiterated that the law would use the CBE’s definition of SMEs.

And while we’re on taxes, the Union of Investors Associations is stepping up its lobbying against a real estate tax, with association head Mohamed Farid Khamis now proposing that the real estate tax be scrapped in favor of raising income taxes, according to Youm7. We’re not at all certain we understand the logic there.

CBE issues directive on installment payment plans for consumer goods: The central bank has issued a new directive to banks concerning companies that sell consumer goods on installments, such as appliances and automobiles. The new regulations stipulate that all the transactions be in EGP. Banks are also required to ensure that the installments charged to customers do not exceed 35% of the customer’s total income. The companies are also required to submit to banks a detailed annual report and a quarterly report. The CBE says it stepped in to regulate the sector because there was an effective policy vacuum.

**#5 Carbon Holdings says it could start construction on TPC in 1Q2019: Carbon Holdings expects to break ground on the first phase of its Tahrir Petrochemicals Complex (TPC) early in 2019 after it reaches financial close on the USD 10.9 bn project late this year, Managing Director of Corporate Finance and Investor Relations Karim Helal tells Al Masry Al Youm. The company had previously announced plans to reach financial close and begin principal construction before year’s end. Trial operations should begin within 38 months of the start of construction of the facility, which will take up to four years to complete.

Background: Carbon Holdings, which is looking at an IPO as early as 2Q2019, was reported last week to be in talks with international lenders including the European Bank for Reconstruction and Development and African Development Bank as it works toward close on the USD 5.4 bn debt package for the facility. The company said in July that it was “in advanced stages of securing financing from export credit agencies and other institutions, including UK Export Finance (UKEF), Germany’s Euler Hermes, and the Overseas Private Investment Corporation (OPIC), the development finance institution of the United States government.” An unconfirmed report also suggested that Chinese lenders could provide as much as USD 3.1 bn in backup or standby funds.

**#6 INVESTMENT WATCH- Rixos plans to double number of hotels rooms in Egypt next year: Dubai-based hotel chain Rixos Hotels plans to expand its business in Egypt by doubling the number of existing hotel rooms over the next year to 4,000 rooms and surpassing 10,000 rooms within the next five years, Al Bawaba reports. Rixos currently manages three hotels, with 2,000 rooms, in Egypt. The move is yet another sign of how global hotel chains are pouncing on the Egypt’s tourism recovery. Tourism revenues increased 77% y-o-y in 1H2018.

Online real estate marketplace Aqarmap has closed a funding round backed by Wamda Capital, KISP Ventures, and Raed Ventures, according to a statement from Wamda, which offers no details on the size of the raise. The company plans to use the funding to increase its presence in Saudi Arabia and expand into other markets in the region, according to CEO and Founder Amad Almsaodi.

Ruling on El Nasr vs. Emaar dispute coming soon? The Cairo Regional Center for International Commercial Arbitration is expected to issue a ruling on state-owned El Nasr Housing and Reconstruction’s dispute with Emaar Misr over land for the latter’s Uptown Cairo project “soon,” sources with knowledge of the matter tell Al Shorouk. The arbitration center completed last week its review of all the pertinent documents in the case, and the two companies are waiting on the center’s final ruling on the case. El Nasr has refused all settlement proposals, according to the sources, despite a board member from the company saying in May that its general assembly had voted to accept Emaar’s EGP 100 mn settlement offer for allegedly failing to develop 3 mn sqm of land allotted to it back in 2005. The state-owned company also alleges that there are 215k sqm of Uptown that are technically outside the project’s borders.

INVESTMENT WATCH- China eyes solar power projects. China’s Shanghai Electric and TIBA Group are currently bidding on USD 600 mn-worth of solar power station projects with a combined generating capacity of 600 MW, unnamed ministry sources tell Al Masdar. The companies are reportedly vying to develop the solar power stations — which will be funded through three unnamed Chinese banks — in Benban or West Nile Delta. The ministry is expected to announce its stance on the offer by year’s end. Speaking of renewables, we had noted yesterday that UAE’s Alcazar Energy looking to snag USD 500 mn in wind projects in the Gulf of Suez region.

Post-Benban renewables FiT rate set at USD 0.025 per kWh: This comes as the Electricity Ministry has reportedly settled on a maximum feed-in-tariff for power generated by renewable energy projects at USD 0.025 per kWh, according to ministry sources. All renewable energy projects will now be tendered and established under a build-own-operate framework, with companies required to submit financial offers that include selling power at or below the maximum tariff, the sources say.

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Up Next

Finance Minister Mohamed Maait be at AmCham on Tuesday, 18 September for a lunch. The minister will speak about “Egypt’s financial reform agenda.” Members and their guests can register here.

The president of Italy’s Chamber of Deputies, Roberto Fico, is set to visit Cairo this month, Ahram Online reports.

The Egyptian-Sudanese ministerial committee will meet at the end of this month ahead of a presidential summit set to be held in Khartoum in October, the head of the Egyptian-Sudanese business council, Riad Armanios, said yesterday. Foreign minister Sameh Shoukry had met with his Sudanese counterpart Al Dridiri Al Dhaheri in Cairo last month to discuss political issues of mutual interest, including Sudan’s blanket ban on Egyptian agricultural imports.

Baker McKenzie, Sarie Eldin, PwC to finalize sovereign wealth fund regulations next month. The three firms are expected to finish the outline of the framework and governing structure for Egypt’s EGP 200 bn sovereign wealth fund in October, Planning Minister Hala El Said has said. The lawyers are also working on the terms of reference for the fund’s investment decisionmaking process.

The Egypt-Romania business council will meet in Bucharest from 7-11 October, according to Al Mal.

Image of the Day

**#9 A Jewish family that left Egypt decades ago took Mansoura Pastries, their family-run bakery, with them to Brooklyn, where they settled in 1961, Matthew Sedacca writes for the NYT. The Mansoura family, which traces its roots to Egypt and then back to Syria, founded the family business in 18th century Aleppo, then moved to Cairo in 1910 where they opened up a second store in Harun street in Dokki. Generations later, Mansoura Pastries is still serving traditional Egyptian delicacies such as kunafa and baklava in New York City — and exporting i small batches all over the world.

Spotlight

Managing our foreign debt is now a top priority for the Madbouly cabinet

**#7 Egypt’s foreign debt grew to USD 92.64 bn at the end of FY2017-18, up from USD 88.2 bn at the end of government’s third quarter in March and USD 79.2 bn at the end of June 2017, Prime Minister Mostafa Madbouly tells Al Watan in an interview. Foreign debt levels for the fiscal year that ended in June were at 37.2% of GDP, up from 36.8% in March. Madbouly attributed the increase to a rise in borrowing to plug the financing gap, particularly in light of foreign currency shortages after the EGP float in November 2016.

The latest figures should add impetus to the Madbouly Cabinet’s adoption of a debt control strategycurrently being developed by the Finance Ministry and which is set to be the cornerstone of the government’s fiscal policy agenda. The plan would set limits on both internal and external borrowing in a bid to bring down overall public debt levels to 91% of GDP from a current 98% of GDP. Ministry sources had told us to expect the rollout of a new comprehensive debt control strategy in October.

So why is Nasr meeting with a World Bank delegation to discuss USD 1 bn loan for Sinai development? Investment and International Cooperation Minister Sahar Nasr met yesterday with a delegation from the World Bank to discuss a USD 1 bn loan the bank is expected to extend to Egypt to help finance the development of the Sinai Peninsula, according to a ministry statement (pdf). The two sides looked into finalizing the agreement as soon as possible, the statement said, without providing further details. Talks on the package began back in April, after developing the peninsula became a top priority for the government when then-Prime Minister Sherif Ismail pledged EGP 275 bn. Backlog debt talks include a USD 1.2 bn loan agreement the Transport Ministry expects to sign this month with the Export-Import Bank of China to finance the development of the 10 Ramadan-new capital electric high-speed rail, government sources tell Al Shorouk. Keep in mind as the debt control plan unfolds that this isn’t about “no new debt,” but about “no new debt that will contribute to a debt crunch” if (a) hot money flees or (b) we get strangled with badly-timed repayment requirements, among other issues.

…Speaking of World Bank funding, Egypt is expected to receive the first tranche of its USD 500 mn loan to support the state’s K-12 educational reform strategy within the next three months, Education Minister Tarek Shawki said, according to Al Mal.

Rising yields continues to add urgency to the plan. Sunday’s three-month bond auction saw average yields rise to 19.31% from 19.18%, while yields at the nine-month auction rose to 19.64% from 19.55%, according to data from the Finance Ministry. A Finance Ministry source had also told us that the debt control strategy could see the tenor of government bond issuances limited to medium-to-long term issuances and that there was talk of cancelling foreign currency-denominated bond issuances this year. The ministry had cancelled a sale of EGP 3.5 bn worth of three- and seven-year T-bills last week, saying that the yields requested were too high.

CBE says banks need FinMin permission for fresh lending to state companies: The central bank has issued a directive to all Egyptian banks telling them to seek Finance Ministry sign off before approving neew loans to state companies. We’re seeing this as a move by the Finance Ministry to keep a closer eye on the finances of state owned companies in the era of debt control and ahead of the launch of the state privatization program. The government is also looking to push state firms to pay overdue gas and electricity bills as well as handle their mounting debts.

Egypt in the News

UN rights boss slams Egypt: Topping coverage of Egypt in the foreign press is criticism from United Nations human rights chief Michelle Bachelet of the 75 death sentences issued in a single trial. She urged an Egyptian court to overturn mass death sentences issued this week, saying they “represent a gross and irreversible miscarriage of justice,” in a statement carried by Reuters.

The Foreign Ministry denounced Bachelet’s comments claiming they “insult” Egypt’s judiciary and its members. "This is a bad start for the UN human rights high commissioner," the statement said.

Lebanese tourist from ‘insult’ video could be released soon: A Cairo appeal court suspended — and reduced to one year — the jail sentence of Lebanese tourist Mona El Mazbouh who had been convicted of “defaming” Egypt after posting a video on social media describing her harassment while on vacation in the country, according to Reuters. Mazbouh was initially sentenced to eight years in prison and a EGP 10,700 fine for spreading false rumors “that aim to undermine society and attack religions.”

Other headlines worth a look this morning:

  • Abandoned by “the West”? Former Egypt-based reporter Bel Trew says Egyptians feel abandoned by western powers in a piece written for the Independent.
  • Of murder and theology: The recent murder of the abbot of St. Macarius Monastery highlights tense debates among Egypt’s Christians over theological differences, Jacob Wirtschafter and Mina Nader write for Religion News.
  • Another ailing tourist: A seven-year-old British boy has been in intensive care the past three weeks fighting an infection he allegedly contracted while on vacation in Hurghada’, according to the Daily Mail.
  • Honorary Greek citizenship: Two Egyptian fishermen received honorary Greek citizenship for saving the lives of 70 people and four dogs during the wildfire outburst in Mati, Middle East Eye says.

On Deadline

Want us to pay taxes? Clean the [redacted] streets, first: Litter-free streets and better municipal services would make it a hell of a lot easier for people to swallow the notion of paying their taxes, opinion writer Soliman Gouda writes for Al Masry Al Youm. Gouda says Egyptians have no interest in listening to a theoretical discussion of where their tax money goes, but instead want to see tangible evidence of tax money put to good use.

Worth Watching

Elon Musk’s year is going up in smoke (literally): Elon Musk is not known to take half-measures, and that includes burnout. But he certainly can do half-baked. Just look at how eager and content he was at inhaling a substance that resembles oregano during an appearance on The Joe Rogan Experience (watch, runtime: 3:33). The podcast interview was the latest development in what the press is suggesting is the unhinging of the Tesla founder, who has had one tough year. He broke out in tears during this NYT interview last month when talking about the stress of coping with Tesla. Without condoning or condemning, we’ll simply say: Just do you, Elon. Just do you.

Energy

Shell processing 250 mcf/d of gas at Idku liquefaction plant -sources

Royal Dutch Shell’s Idku liquefaction plant is reportedly processing 250 mcf/d of natural gas, compared to 150 mcf/d last year, sources close to the matter said yesterday. Shell and the Oil Ministry had agreed back in 2016 to gradually ramp up production at the Idku LNG plant. Egypt has plans to link one of its two liquefaction facilities in Idku or Damietta to Cyprus’ Aphrodite gas field via underwater pipeline as part of a wider plan to become a regional hub for energy exports to Europe.

EKH subsidiary Kahraba begins EGP 550 mn expansion of Borg Al Arab power station

Egypt Kuwait Holding (EKH) subsidiary Kahraba has begun working on the EGP 550 mn expansion of its gas-powered Borg Al Arab power station, according to a company disclosure picked up by Al Mal. The expansion is expected to bring the station’s production capacity to 115 MW, up from 75 MW currently, and is slated for completion by 1Q2020.

Africa Power offers to arrange facilitated loans for solar-operated irrigation systems

Solar energy company Africa Power is offering to build solar-operated irrigation systems for investors in the 1.5 mn feddan project, which would be financed through facilitated loans from Saudi Arabian funders, CEO Ahmed Hamdy tells Al Shorouk.

Infrastructure

El Sisi inaugurates final phase of regional ring road

President Abdel Fattah El Sisi inaugurated yesterday five projects implemented by the Roads and Bridges Authority including the last phase of the regional ring road, according to an Ittihadiya statement. The projects launched also include the highways running to the Upper Nile’s Tama bridge, the Qous bridge in Qena, and the Borg El Arab bridge in Alexandria, Ahram Online reports.

Basic Materials + Commodities

Four private retail chains in talks to operate Supply Ministry outlets

Four privately-owned hypermarket retail chains have presented offers to the Supply Ministry’s Internal Trade Development Authority (ITDA) to upgrade and operate 20-30 outlets where subsidized commodities are sold, Authority head Ibrahim Ashmawy tells Al Shorouk without disclosing their names. The government will launch a tender to partner up with the private sector on the development and management of food retail outlets across Egypt’s governorates over a period of four years. We had noted last month that ten retail chains, including Carrefour, Spinney’s and Metro approached the Ministry to bid on the project.

Egypt is looking to export pomegranates, dates, and grapes to East Asia

Egypt is eyeing countries in East Asia as potential export markets for Egyptian pomegranates, dates, and grapes, according to Agricultural Exports Council member Mohamed Abdel Hady. The Agricultural Quarantine Authority and the Horticultural Export Improvement Association are both in talks with Thailand, Singapore, Malaysia and Hong Kong to discuss their quality specifications for imported produce and expect to begin exporting agricultural products as of next season. Egypt has also been in talks with China over potentially exporting dates, pomegranates, mangoes, and potatoes.

Manufacturing

Go Green begins building new jojoba oil factory

Egyptian company Go Green broke ground on a new jojoba oil factory at the Sadat City industrial zone, the company said in a statement on Saturday carried by Al Masry Al Youm. The first phase of the plant will consist of five production lines, but the company plans to eventually bring the number up to 40 production lines once the facility is fully operational. The plant is expected to produce an annual 5,000 tonnes of jojoba oil, a portion of which will be earmarked for exports. Details on the plant’s investment value and date of completion were not disclosed.

Automotive + Transportation

Egypt’s national railway authority receives two offers in supply tender

Egypt’s National Railway Authority received two offers from foreign bidders in a tender to supply six railway cars and locomotives with funding from the European Investment Bank (EIB), authority head Ashraf Raslan said, Al Shorouk reported yesterday. The authority will announce the results of the tender this month. The names of the companies and value of the agreement were not disclosed. The tender is part of a wider effort to reform and upgrade Egypt’s railway sector.

Banking + Finance

Oilex to sign EGP 2.4 bn loan with banking consortium

Oil extraction company Oilex is expected to sign within days a EGP 2.4 bn loan agreement from a banking consortium that includes NBE, First Abu Dhabi Bank, Banque du Caire, Arab Bank, and Suez Canal Bank, Al Mal reports. The company will use the loan to partially finance its construction of a EGP 3 bn industrial complex in Sadat City. The complex will include a cooking oils factory, oils refinery, and a storage unit for seeds used to extract oil. Earlier reports had indicated that the banking consortium included CIB, and that the loan would be EGP 1.5 bn.

EFG Hermes eyes expansion across different platforms

EFG Hermes’ ValU, which offers payment-on-installment solutions via a mobile app, is hoping to expand its operations by signing on 50 new companies and 100 additional stores this year, EFG Finance CEO Walid Hassouna said, Al Mal reports. On a related note, EFG is also working on securing loans for four companies this year worth a collective EGP 4 bn, Hassouna also said.

PHD to increase issued and authorized capital by EGP 1.5 bn and EGP 4bn

Palm Hills Development’s EGM agreed yesterday to increase issued capital by EGP 1.5 bn and authorized capital to EGP 10 bn from EGP 6 bn through the issuance of new shares to existing shareholders, according to an EGX disclosure (pdf).

Other Business News of Note

IDA to announce list of approved licensing accreditation offices at the end of the month

The Industrial Development Authority (IDA) will announce at the end of the list of approved accreditation offices to help expedite the licensing process, IDA head Ahmed Abdel Razik said according to Youm7.

Egypt Politics + Economics

Safwat El Sherif sentenced to 3 years in prison, fined 99, 490, 974 EGP for corruption

An Egyptian criminal court sentenced Mubarak-era politician Safwat El Sherif to three years in prison and fined him EGP 99.5 mn on illicit gains charges, Al Masry Al Youm reports. Under Hosni Mubarak’s administration, El Sherif served as information minister and was head of the Shura Council.

National Security

Egypt’s navy orders construction of second Egyptian-built corvette

Egypt’s navy commander Ahmed Khaled ordered Alexandria Shipyard (ASY) to begin building the second Gowind 2500 corvette, a small coastal patrol warship, Al Mal reports. The warship is the second of three that ASY will manufacture in Egypt under an agreement signed off in 2015 with France’s Naval Group (FNG). The launch of the first corvette marked the start of the second phase of the Egypt-FNS agreement, which entails Egypt locally manufacturing three of the four corvettes.

Sports

Egyptian duo win 2018 J.P. Morgan China Squash Open championship

Egyptian squash players Raneem El Walily and Mohamed Abouelghar were crowned JP Morgan China Squash Open champions for 2018 after defeating France’s Camille Serme and New Zealand’s Paul Coll, respectively, on final matches in Shanghai, PSA World Tour reported.

On Your Way Out

Egyptian authorities opened a 4,000-year-old tomb in Saqqara to the public for the first time since its discovery in 1940, reports Ahram Online. The tomb belonged to ancient Egyptian vizier Mehu and is distinguished for keeping its vivid colors and illustrations.

Starbucks finally arrived in Italy this past Friday with the opening of a new high-end store in Milan, reports CNN travel, which writes that its Reserve Roastery has a place in Milan, even if it is unlikely to drive wholesale change in Italy’s coffee industry.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.85 | Sell 17.95
EGP / USD at CIB:
Buy 17.86 | Sell 17.96
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Sunday): 15,740 (-0.4%)
Turnover: EGP 472 mn (41% below the 90-day average)
EGX 30 year-to-date: +4.8%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.4%. CIB, the index heaviest constituent ended down 0.3%. EGX30’s top performing constituents were Egyptian Resorts up 2.6%, Sidi Kerir Petrochemicals up 1.6%, and AMOC up 1.5%. Yesterday’s worst performing stocks were Porto Group down 2.3%, SODIC down 2.3%, and TMG Holding down 2.2%. The market turnover was EGP 472 mn, and regional investors were the sole net buyers.

Foreigners: Net Short | EGP -19.9 mn
Regional: Net Long | EGP +21.0 mn
Domestic: Net Short | EGP -1.1 mn

Retail: 76.7% of total trades | 78.6% of buyers | 74.9% of sellers
Institutions: 23.3% of total trades | 21.4% of buyers | 25.1% of sellers

Foreign: 6.7% of total | 4.6% of buyers | 8.8% of sellers
Regional: 8.2% of total | 10.4% of buyers | 5.9% of sellers
Domestic: 85.1% of total | 85.0% of buyers | 85.2% of sellers

WTI: USD 67.98 (+0.34%)
Brent: USD 77.12 (+0.38%)

Natural Gas (Nymex, futures prices) USD 2.77 MMBtu, (-0.11%, October 2018 contract)
Gold: USD 1,201.00/ troy ounce (+0.05%)

TASI: 7,729.07 (+0.54%) (YTD: +6.96%)
ADX: 4,918.08 (0.00%) (YTD: +11.81%)
DFM: 2,842.67 (+0.57%) (YTD: -15.65%)
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Calendar

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

11 September (Tuesday): Islamic New Year, national holiday.

16 September (Sunday): Creative Industry Summit 2018, Four Seasons Nile Plaza, Cairo.

17-19 September (Monday-Wednesday): INTERCEM Cairo to Cape Town cement industry conference, Dusit-Thani LakeView, Cairo.

18-21 September (Tuesday-Friday): The Big 5 Construct Egypt, Egypt International Exhibition Center, Cairo, Egypt.

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.

23-24 September (Sunday-Monday): Arab Security Conference on cyber security, Nile-Ritz Carlton, Cairo.

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 (Wedne sday): E-Commerce Summit, Nile-Ritz Carlton, Cairo.

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

October: The Madbouly cabinet has until the end of the month to come up with a plan for “the development and restructuring” of public companies” under a directive from President Abdel Fattah El Sisi.

03 October (Wednesday): Egypt’s Emirates NBD PMI for September released.

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

12-14 October (Friday-Sunday): 2018 annual meetings of the World Bank and International Monetary Fund, Bali, Indonesia.

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.

24-25 October (Wednesday- Thursday) 9th Arab-German Energy Forum, Cairo, Egypt.

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

05 November (Monday): Egypt’s Emirates NBD PMI for October released.

05-07 November (Monday- Wednesday) World Travel Market London exhibition, London, England, UK.

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.

04 December (Tuesday): Egypt’s Emirates NBD PMI for November released.

08-09 December (Saturday-Sunday): Business for Africa and the World: The Africa 2018 Forum, Maritim Jolie Ville International Congress Center, Sharm El Sheikh.

12 December (Wednesday): Banking and Finance Congress 2018, Cairo, venue TBD.

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.

22-25 January 2019 (Tuesday-Friday): World Economic Forum (WEF) Annual Meeting, Davos-Klosters, Switzerland.

23 January 2019 (Wednesday) 50th Cairo International Book Fair.

25 January 2019 (Friday): Police Day, national holiday.

20-22 April 2019 (Friday-Sunday): Spring meetings of the World Bank and International Monetary Fund, Washington, DC.

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. © 2021 Enterprise Ventures LLC.

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