Wednesday, 12 September 2018

Risk of another FX crisis?

TL;DR

What We’re Tracking Today

**#4 SWF manager wanted: The Madbouly government is advertising for a manager to take over the EGP 200 bn Egypt sovereign wealth fund, according to an advertisement placed on page 4 of yesterday’s Financial Times (image below, tap the image or click here for larger view). The application deadline is 27 September. Baker McKenzie, Sarie Eldin, PwC are expected to finish the outline of the framework and governing structure for the wealth fund in October, Planning Minister Hala El Said had said. The lawyers are also working on the terms of reference for the fund’s investment decision-making process.

**#3 EARLY MORNING NEWS ALERT: President Abdel Fattah El Sisi issued a decision early this morning approving changes to customs duties on a range of items, according to Al Shorouk, which appears to be the only publication to have so far picked up the news. These include setting a 20% tariff on all imports by hotels and tourism businesses. A number of items also saw tariff increases of between 5-40%, including juices, where import duties rose to 60% from 20%.

Clothes, electronics, pet foods and some other food items are also getting more expensive as tariffs on them rise to 40%.

The decision also imposes a 10% duty on all items that have been sent abroad for maintenance and repairs and were reimported back to Egypt.

On a related note, the Trade and Industry Ministry imposed an export tariff on copper of EGP 20,000 per tonne, acting head of Foreign Trade department Amani El Wasal said.

EFG Hermes annual London conference continues today at the Emirates Arsenal Stadium in London. Investors and fund managers with aggregate AUM of more than USD 12 tn are meeting with senior execs from more than 150 companies across frontier and emerging markets in 11 sectors with a combined market cap of more than 850 bn (or about 85% of Apple, for those keeping track at home). The conference press release (pdf) is here.

Ethiopia, Eritrea reopen border: “The leaders of Ethiopia and Eritrea re-opened crossing points on their shared border for the first time in 20 years on Tuesday, cementing a stunning reconciliation and giving Addis Ababa a direct route to its former foe’s Red Sea ports.” (Reuters) Want more in the days ahead? Follow Ethiopian Prime Minister Abiy Ahmed’s chief of staff on Twitter.

Emerging markets champion Mark Mobius is looking to raise GBP 200 mn for a new EM investor trust that will take positions in 20-30 undervalued EM and frontier market companies, the Financial Times reports. Mobius sees the ongoing EM slump as an “exciting” window for investment, noting that EMs tend to swing between irrational highs and lows. “The Mobius Capital founding partners and employees each intend to invest around GBP 5.7 mn into the trust, which will look for companies on the brink of a turnaround and also have an environmental, social and governance focus.” The new trust, which comes after Mobius launched Mobius Capital in May, is set to launch on 1 October on the London Stock Exchange. You can check out the Mobius Investment Trust’s website here.

The secrets to growth in emerging markets? There are two, according to a McKinsey survey cited in a guest op-ed for the Financial Times: “They have pro-growth agendas that include steps to increase capital accumulation, often through mandatory retirement saving, and efforts to improve government effectiveness. Some of these countries have also sought to create more competitive dynamics in their home markets.” That’s how seven Asian nations grew their economies at least 3.5% per year in the 50 years to 2016, while 11 others grew by at least 5% per year in the 20 years from 1996 to 2016. Read Emerging markets can still drive global growth.

The tenth anniversary of the global financial crisis is on Saturday, and the international business press is slowly ramping up its coverage. A handful of the best pieces out so far:

Start with What we need to fight the next financial crisis, written by former treasury secretaries Hank Paulson (also ex-Goldman) and Tim Geithner and former Fed chairman Ben Bernanke.

Then, read Andrew Ross Sorkin’s From Trump to Trade, the Financial Crisis Still Resonates 10 Years Later. Sorkin, the NYT Dealbook founder and CNBC Squawk Box anchor, wrote Too Big To Fail, the (so-far) definitive history of the crisis that spawned the movie of the same name.

Now, go check out Nouriel Roubini’s Is the next financial crisis already brewing? The NYU economist and EM expert lays out a scenario for another financial crisis hitting some time around 2020 when he figures “the tools available to policymakers will be constrained. Fiscal policy is hampered by higher public debts, but returning to unconventional monetary policies may be thwarted by the bloated balance sheets of central banks. Bailouts will be run up against the populist mood and less solvent sovereigns.”

Also worth a read this morning:

  • China Is Detaining Muslims in Vast Numbers. The Goal: ‘Transformation. (NY Times)
  • Investing in Kuwait is the subject of a substantial package of stories in the Financial Times.
  • The 29-year-old running the world’s largest crypto hedge fund, Polychain Capital (check it out — it’s the most blatant F-U hedgie website we’ve seen in forever) is struggling to prove he wasn’t a one-hit wonder. (Wall Street Journal)
  • Building boom under the microscope: EM architects of big infrastructure projects need to be ready for new scrutiny in the wake of this piece from the Journal: Building boom unravels, deepening Turkey’s economic crisis.

Apple will unveil its fall 2018 lineup starting at 7pm CLT today. Expect a trio of new iPhones, a new Apple Watch and possibly new iPads and new Macbooks. Axios has the rundown on what to expect, and the Financial Times has five things to look for. You can watch Apple’s live stream of the event here.

Cairo workers need to work 133.3 days to make enough money to buy an iPhone X. The average professional in Zurich? 4.7 days. New York? Just under a week. So sayeth researchers at UBS.

Enterprise+: Last Night’s Talk Shows

Our daily talk show report will be back on Sunday. We hope to have updates before then on the status of Lamees Al Hadidi and Hona Al Asema — she’s still MIA.

Talk-show-related M&A WATCH- CBC has a new owner: Egyptian Media Group (EMG) has acquired a 51% stake in Future Group Holding (FGM), which owns satellite news channel CBC, Youm7 reports. Rumors had surfaced earlier in the week that the acquisition and alleged changes to the programing of CBC were behind Lamees’ absence. EMG CEO Tamer Morsi has been appointed to head the newly merged group. EMG had acquired Al-Hayat TV Network in July.

Speed Round

Speed Round is presented in association with

**#1 Is Egypt at risk of another “full-blown” FX crisis? Egypt is one of seven countries that face the risk of a foreign currency crisis, Bloomberg says, citing recent research from the by Japan’s Nomura Holdings. Argentina, Turkey, South Africa, Ukraine, Sri Lanka, and Pakistan are also on the list of risk-prone countries identified using the early warning model known as Damocles, which “examines a variety of factors including foreign-exchange reserves, debt levels, interest rates and import cover.” The report urges investors to “differentiate between economies across emerging markets,” identifying those with a lower risk profile and recognizing the entry opportunities they currently present, as volatility from the EM sell-off subsides over the coming few months. Lowest on the risk spectrum are Russia, Indonesia, Brazil, Peru, Philippines, and Thailand. The FT also has the story.

Analysts see promising signs that the EM Zombie Apocalypse could wind down over the coming months, they tell Bloomberg separately. Nomura’s report came as a drop of 1.3% in the INR against the USD this week raised fresh concerns about whether emerging markets can sustain more hits, especially those with wider account deficits, high inflation, and a high level of foreign ownership of domestic debt. One view, however, sees the EM sell-off waning off in a few months, with a good indication of that being that most current account deficit levels are lower than they used to be and that inflation levels are largely “tame.”

**#2 Egypt cancels second T-bond sale this month due to high yields: Egypt canceled a sale of EGP 3.5 bn worth of five- and 10-year instruments on Monday, according to central bank data, with sources telling Al Mal that high yields on demand were behind the decision. Investors reportedly requested yields ranging from 18.90-18.95%, with some even asking for returns as high as 19.10% and 19.25% for the longer-term offering, the sources also said, adding that the Finance Ministry is likely to resort to the National Investment Bank to arrange the financing it had intended to raise through treasury sales. Reuters also has the story.

Reax: “‘What the government is doing, cancelling these auctions due to high yields, is very logical. How can the government sell at these prices for 10 years? … We want to shrink the budget deficit, not increase it. It’s best to focus on treasury bills in the coming period,’ one banker who spoke on condition of anonymity told Reuters.”

Background: Rising yields — which had hit highs of 19.64% and 19.31% at a Sunday auction for three- and nine-month bonds — had prompted the government to cancel another T-bond sale last week amid reports from the Finance Ministry that it was working on drafting a comprehensive debt control strategy that could rollout as early as October and see government bond issuances limited to medium-to-long term offerings. The plan, which could also see FX-denominated bond sales scrapped this year, would also set limits on internal and external borrowing in a bid to push overall debt levels down to 91% of GDP from a current 98%. The country’s foreign debt levels at the end of FY2017-18 stood at USD 92.64 bn, up from USD 88.2 bn at the end of third quarter in March.

**#5 Headline inflation inches up again in August after brief slowdown in July, monthly core inflation eases to 1.8%: Annual headline inflation climbed to 14.2% in August, up from 13.5% in July, data from the central bank showed on Monday (pdf). Annual core inflation — the CBE’s preferred gauge, which strips away volatile items such as food — was also up in August to 8.8%, compared to 8.5% in July. Monthly headline inflation, meanwhile, eased to 1.8% last month from 2.4% the month before.

Where had we left inflation? Inflation levels had cooled slightly in July after surging to a high of 14.4% in June, accelerating for the first time in a year as the result of increases to the costs of fuel, power, and transportation in July, as the government continued to gradually phase out subsidies.

Color: The figures suggest that “inflation is not a concern anymore,” according to Pharos Holdings’ Radwa El Swaify, who tells Bloomberg that “we’re comfortably on track to achieve the central bank’s target by the end of the year.” Naeem’s Allen Sandeep told Reuters that “the uptick in August was due to the direct or indirect impact of subsidy cuts and was broadly in line with expectations,”.

You heard it here first: The central bank’s Monetary Policy Committee will leave interest rates on hold at its 27 September meeting. “If you look at the spread between the central bank’s discount rate and the headline figure it’s still three percentage points, so there’s enough room for the CBE to keep rates where they are,” Sandeep said. “Everyone is raising rates because of weaker currencies and rising inflation and so on. So we’re sort of an exception if you look at the bigger picture globally.” Conditions in global markets — including a broad emerging markets sell off, rising US interest rates, and a strengthening USD — are also expected to encourage the CBE to maintain its tight fiscal policy until the end of 2018 in order to “keep foreign investors in the debt market,” El Swaify said.

**#6 The Natural Gas Regulatory Authority has postponed the issuance of natural gas import licenses to private sector companies, saying the private sector is “unprepared,” according to an EGAS source. EGAS has renewed preliminary approval to grant Qalaa Holdings’ TAQA Arabia, BB Energy and Fleet Energy the import licenses, effectively giving them additional time after all three allegedly failed to submit paperwork to obtain the final license, according to the source. The preliminary approvals, which are renewed every six months unless a permanent license is obtained, must be ratified by the authority.

Take this with a grain of salt: When all three companies fail to file paperwork on time, that’s not the private sector being “unprepared,” it’s the business sending a message to government about license terms — and the regulator putting on some pressure in public. We suspect we’re not the only ones who hear echoes here of round one in the solar energy feed-in-tariff imbroglio.

Background: The authority was given the green light in July to begin issuing and revoking licenses for private players in the natural gas industry, a move that was made possible by the deregulation of the sector through the Natural Gas Act. Sources had said at the time that the first import license would likely be issued before the end of 2018.

**#7 IPO WATCH- CIRA Announces price range for IPO, first day of trading by 1 October: Leading private-sector education provider Cairo Investment and Real Estate Development’s (CIRA) expects to price its IPO at EGP 5.45 to EGP 6.30 per share as it moves ahead with an offering of nearly 38% of the company to both international and domestic investors. The subscription period for the domestic offering opened on Monday, according to the public subscription notice (PSN, here in pdf).

That price range would give the company a market cap of up to EGP 3.45 bn at the opening bell on the first day of trading. The company plans to price its shares on or around 22 September once the bookbuilding process ends. CIRA is looking for stable institutional investors, offering some 192 mn shares to global institutional investors and just over 14 mn to retail investors in Egypt. Trading in CIRA’s shares on the EGX is set to start on 1 October. CIRA’s website has key IPO-related documents here.

Where’s the money going? Proceeds from the offering will be used in part to finance expansion plans, with the company eyeing entry to new markets such as the Gulf, Europe, and South Africa.

Advisers: EFG Hermes is sole global coordinator and bookrunner for the transaction. Al Tamimi & Co. is acting as the issuer’s local counsel, while Zulficar & Partners is domestic counsel to the underwriter. White & Case is international counsel to the issuer, while Gide Loyrette Nouel is doing duty for the global coordinator and bookrunner. Inktank Communications is serving as investor relations advisor to CIRA.

IPO WATCH- Five state companies to list, sell shares in the EGX in 1Q2019: It appears that the Madbouly Cabinet has settled on five companies to kick-off the second phase of the state privatization program in 1Q2019, Finance Minister Mohamed Maait told Al Mal on Tuesday. While he did not name the companies, he noted that some of the companies will be IPO. A Finance Ministry source had told us this week that Enppi will “likely” list shares in an IPO in 1Q2019. Based on previous comments by state and banking officials, we anticipate that Banque Du Caire is likely to list in 1Q2019, though that has yet to be confirmed officially. The source expects that a maximum two state companies will list shares in FY2018-19.

Eastern Company, AMOC will pilot program next month: Maait also revealed that Alexandria Mineral Oils Co. (AMOC) will join Eastern Company in launching the state privatization program in October in the second shakeup of the program’s phase one timeline since it was announced in July. Eastern and Heliopolis Housing and Developing (HHD) were originally slated to pilot program, but Public Enterprises Minister Hisham Tawfik suggested that Alexandria Container and Cargo Handling (ACCH) had replaced HDD for an October slot.

A little side note on AMOC: The firm will reportedly convert 500k shares into GDRs on the London Stock Exchange next week.

Advisors for Eastern, AMOC are in place: We have exclusively reported that HSBC has won the mandate to lead the sell-down of AMOC. EFG Hermes was tapped to manage the 4.5% sale of Eastern Company. Zaki Hashem & Partners, Zulficar & Partners, and Matouk Bassiouny are the shortlist to serve as legal counsel on the Eastern sale.

**#8 M&A WATCH- Suez Cement to sell Minya white cement plant to Emaar Industries: Suez Cement subsidiary Helwan Cement has agreed to sell its white cement plant in Minya to Emaar Industries, the company said in a statement (pdf). The transaction comes as Suez Cement looks to continue to bolster its financial position under and ongoing restructuring plan, the statement suggests. “We are delighted to have signed the SPA on the sale of the white cement plant in El Minya which is in line with the Company and Heidelberg’s strategy to focus on its core operations, grey cement production and divest non-core operations yielding attractive returns to our shareholders,” our friend Jose Maria Magrina, CEO of Suez Cement, said in the statement. The sale is pending approval from the Financial Regulatory Authority and Suez Cement’s general assembly. The statement did not put a value on the sale.

Advisers: Suez Cement was advised by EFG Hermes (financial advisor) and Zulficar and Partners (legal counsel).

INVESTMENT WATCH- BP to invest USD 2 bn in Egypt next year: BP is planning to invest USD 2 bn in Egypt in 2019, BP North Africa Regional President Hesham Mekawi tells Al Shorouk in an interview. BP Group CEO Bob Dudley had said back in February that the firm was investing USD 1 bn in 2018. Mekawi suggested that BP invested a total of USD 2.5 bn in Egypt in 2018, down from around USD 4 bn in 2017. Investments this year and next year would go towards bringing a number of wells into production, upgrading facilities, as well as redoubling exploration efforts. BP is currently looking to bring phase two of its West Nile concessions in Fayoum and Giza to production before the end of the year. Production at Raven field should begin in 2019, bringing total production from the phases one and two of the West Nile Delta concessions to 1 bcf/d.

Cabinet economic group to review how land is allocated to industry: Prime Minister Mostafa Madbouly met on Monday with the cabinet economic group to look into establishing a new committee to review how land is allocated to industry, according to a Madbouly Cabinet statement. The committee would be mandated with putting in place clear standards for allocating land, creating a website through which the Industrial Development Authority (IDA) can list available land plots and the time and details for their tenders, which had been expected to launch in June. Members of the committee will include the vice minister of finance for fiscal policy, the head of the IDA, and representatives from the New Urban Communities Authority, the Federation of Egyptian Industries, and the Egyptian Junior Business Association.

Looking into real estate tax? Meanwhile, the Finance Ministry has reportedly agreed to set up a joint committee with the Union of Egyptian Investors Associations (UEIA) to resolve real estate tax issues, association head Mohamed Farid Khamis said on Monday.

Egypt, Cyprus contract European company to link power grids: Egypt and Cyprus have reportedly reached an agreement in principle with an unnamed European company to link the two countries’ power grids, an unnamed source from the Electricity Ministry tells Al Mal. The project will cost an estimated USD 1.5 bn, the source says, and contracts should be signed by next year.

Background: President Abdel Fattah El Sisi had met in June with executives from EuroAfrica Interconnector to discuss the project after EuroAfrica finished feasibility studies. The project, which could see the two countries exchange up to GW of power, is also expected to extend into Greece and will take about 36 months to complete, sources had previously said.

Gov’t expands PPP schools program to 1,000 and launches second phase in Dec: It appears that the government has substantially increased the scope of its public-private partnership (PPP) program to develop schools to 1,000 schools from 200, according to Ater Hanoura, who heads up the Finance Ministry’s PPP unit. Phase two of the program alone will consist of 200 schools, he noted. The tender for these schools was moved to December after initially being slated for July. Five companies, including CIRA, won the right to develop and operate schools under phase one of the program.

TOURISM WATCH- Thomas Cook says bookings not hit by death of couple in Hurghada, on track for 30-35% increase in its Egypt volume this year: Thomas Cook expects its Egypt bookings to grow 30-35% this year compared to last, the British company’s Egyptian agent, Moody El Shaer, told Reuters’ Arabic service on Monday. El Shaer is also optimistic about the winter 2019 season, saying bookings for the holiday season through Thomas Cook alone will be responsible for a 25% increase in Egypt’s overall tourist arrivals next year. El Shaer said bookings have not been affected by the deaths of two English tourists at a Hurghada hotel last month.

Growing Chinese tourism: Tourism Minister Rania Al Mashat met yesterday with the head of an unnamed Chinese company that is working with Sichuan Airlines to run three weekly flights to Egypt starting October, Al Mal reports.

Italian tourist arrivals double: The number of Italians visiting Egypt is on track to rise 96% year-on-year to 500k arrivals, an unnamed official from the Tourism ministry said.

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Up Next

Finance Minister Mohamed Maait will 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 E-Commerce Summit in Egypt will kick off on Wednesday, 26 September at the Nile-Ritz Carlton. The gathering bills itself as “the first event of its kind” in Egypt and aims to be a meeting place for retailers, corporations, and brands either involved or are looking to explore opportunities in e-commerce, according to a press release from organizers Robusta studio (pdf).

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.

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

Image of the Day

Egypt’s Jewish community observed the Jewish new year in a celebration in Cairo, according to Egyptian Streets. Community head Magda Haroun invited various organizations and prominent figures to attend the festivities. Rosh Hashanah overlapped with both the Islamic and Coptic new years.

Egypt in the News

Topping coverage of Egypt in the foreign press this morning is more backlash against the death sentences handed down of 75 people over the 2013 Rabaa Adawiya sit-in. A dozen rights groups have since issued condemnations, saying that the ruling “degraded standards of fairness,” a dozen of rights group said in a statement, the Associated Press reports.

The Trump administration is getting plenty of flack, too. The US employs “blatant hypocrisy” in supporting Egypt despite human rights concerns, while denouncing the same issues in other regimes, the Daily Times’ editorial board says. Meanwhile, the Intercept’s Alex Kane is calling out the Trump administration for sending US aid to Egypt. He noted that the sentences came down a day after the aid was sent.

The never-ending debate on whether Egypt needs a new capital city is playing out once again in the foreign press. This time it’s in the pages of the Independent, where Oliver Bennet is calling the project “an update of an older story: the new town as a medium for political and national grandstanding.” He notes that this is a legacy project that would reintroduced Egypt to the world as “a stable and internationally inviting sort of place that is considering the future as well as being a guardian of the past.”

Other headlines worth a look this morning:

  • US President Donald Trump did not have very nice things to say about President El Sisi, according to Bob Woodward’s new book, Newsweek reports.
  • Actors of Middle Eastern descent are more often than not ignored or stereotyped by Hollywood, a new study cited by the AP shows.
  • Egypt’s security forces killed 11 terrorists in a shootout in Arish on Monday, reports Reuters and France’s AFP.
  • UK tabloids continue to make an issue out of Holiday-gate, with the Sun interviewing a UK holiday who caught e-coli at the Steigenberger Aqua Magic in Hurghada last year.
  • Marassi visit: UAE Minister of State for Foreign Affairs Anwar Gargash visited Emaar Group’s Marassi in Sahel, calling it a "successful model of Arab investment and cooperation," according to the National.

Worth Watching

So much for MbS The Reformer: Saudi authorities arrested an Egyptian hotel worker this week after he posted a video of himself having breakfast with a female coworker, who happens to be a Saudi national, in a hotel lobby in Jeddah,Egypt Independent reports. The video went viral, prompting debates on social reform in KSA as well as Saudi-expat and man-woman relations in the workplace (watch, runtime: 0:30).

Diplomacy + Foreign Trade

Armed Forces Chief of Staff Mohamed Farid headed to Kuwait on Monday to discuss regional security cooperation with his counterparts from the GCC and Jordan, with US military officials, according to an official statement.

Egypt has lifted its ban on the imports of all South African agricultural products following a four-month suspension due to an outbreak of listeria, a deadly bacteria, according to Eyewitness News. According to South Africa’s health minister, the listeria incident rate has “dropped to pre-outbreak levels.” The Agriculture Ministry had banned South African produce as a preemptive measure in May. Egypt imports grapes, cherries, pears, pineapples, coconuts, and meat products from South Africa.

USAID pledges USD 65 mn in grants for infrastructure development, water sector reform: Investment Minister Sahar Nasr signed agreements with USAID on Monday for grants worth USD 65 mn that will be used to support water infrastructure development, according to a ministry statement. The funding will be used to improve water and wastewater management systems in rural governorates in Upper Egypt, including Luxor, Minya, Aswan, Qena, Asyut, and Sohag, providing as many as 1.1 mn citizens with access to clean water and sanitation systems. The agreements include a USD 13.8 mn grant to build up the capacity of the Water Holding Company and its subsidiaries, according to a US embassy press release (pdf).

Nasr and other ministers had met yesterday with a delegation of 40 US companies operating in Egypt, according to a ministry statement. The ministers of electricity, finance and agriculture sat down with top execs from Visa, Mastercard, JP Morgan, Coca Cola, General Electric, IBM, Google and others to sell them on the reform agenda and urge them to invest further.

Infrastructure

Attaqa pumped-storage power station granted environmental approval

The USD 2.6 bn pumped-storage hydroelectricity power station in Attaqa, a zombie project from the EEDC that was recently resurrected, has received the final environmental approvals that signal the beginning of construction, Al Masry Al Youm reports. Contracts for the project, which will be developed by China’s Sinohydro, were signed during President Abdel Fattah El Sisi’s trip to Beijing for the China-Africa Cooperation Forum.

Health + Education

ECA warns schools against selling uniforms and supplies through exclusive agreements with retailers

The Egyptian Competition Authority (ECA) has warned schools against selling uniforms and supplies through exclusive distribution agreements with retailers, claiming that these agreements are detrimental to market competitiveness, according to a statement on Monday (pdf). The ECA recommended that schools issue generic and simple uniforms that are easy to acquire and keep only one unique identifier, such a tie or badge, that can be sold separately. The statement was issued after several parents sent complaints to the ECA against retailers raising the prices of school uniforms unfairly.

Egypt to open 34 Japanese schools this September

Egypt will open 34 Japanese schools across 19 different governorates on 22 September,

Education Minister Tarek Shawky said, Al Bawaba reports. Annual fees have been set at EGP 10,000, he said, without clarifying if the amount varies across different grades.

Real Estate + Housing

MNHD awards Taj City transmission line burial contract to military-run company

Madinet Nasr Housing and Development (MNHD) announced on Monday (pdf) that it has awarded a contract for the burial under ground of overhead transmission lines at its Taj City development. The project, which will see the overhead lines buried outside the land plot, will be supervised by the Egyptian Electricity Transmission company and will be complete in 4-6 months. MNHD is also relocating transmission lines that pass through its Sarai development.

Tourism

Taba Heights signs agreement with Polish tour operator for weekly flights

Orascom Development Holding’s (ODH) Taba Heights signed an agreement with Polish tour operator Itaka that will see them operate two weekly flights to Taba from Poland and Lithuania starting November, ODH said in a press release. Itaka is also planning to add two more flights from the Czech Republic next year.

Egypt in talks to resume flights between Cairo, Bucharest by November

Egypt is now shooting for direct flights between Cairo and Bucharest to resume in November, head of Egyptian-Romanian Business Council Ahmed El Sokary said, state-run Al Ahram reports. The flights between the two cities have been suspended for four years and negotiations have been ongoing to get them back. This issue was discussed at the Egyptian-Romanian Business Council meetings, which saw the establishment of a new entity to bolster trade between the two countries, council head Ahmed El Sokkary said, Al Mal reports.

Automotive + Transportation

No more metro ticket discounts for judges, police, army or journalists

The government decided on Monday to halt discounts on Cairo Metro ticket fares that were previously given to members of the police, military, and judiciary, as well as journalists, Metro Company spokesman Ahmed Abdel Hadi said, Ahram Online reports. Abdel Hadi said that special rates were still available through memberships.

Banking + Finance

FRA to soon issue guide to protect Egypt’s non-banking sector

The Financial Regulatory Authority (FRA) is in the process of issuing its first guide for protecting non-banking financial sector client funds against misuse, FRA boss Mohamed Omran, said in a statement picked up by Al Mal. A final copy of the 80-page guide — which covers clients in financial leasing, securities, and SME financing, among other activities — has been completed and will be sent to relevant government agencies soon.

United Bank and Afrexim launch financing and insurance package for Egyptian exporters

The United Bank and African Export-Import Bank (Afrexim) launched a new bundle of financing options and insurance package for Egyptian exporters, Al Mal reports. Under an agreement between the two banks, United provides necessary financing, while Afrexim provides guarantees and insurance for exporters in 50 African countries.

On Your Way Out

Egypt’s team is in good shape to defend its top spot at the CGG WSF Women’s World Team Squash Championship which kicked off yesterday in Dalian, China, according to insidethegames.biz. The team’s four players — Nour El Sherbini, Raneem El Weleily, Nour El Tayeb, and Nouran Gohar — are among the world’s top six. They played their first match yesterday and secured a 3-0 win against Australia. The daily match list is available on the tournament’s official website.

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 (Monday): 15,628 (-0.7%)
Turnover: EGP 557 mn (30% below the 90-day average)
EGX 30 year-to-date: +4.1%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.7%. CIB, the index heaviest constituent ended up 0.4%. EGX30’s top performing constituents were Global Telecom up 1.4%, Orascom Construction up 0.7%, and CIB up 0.4%. Monday’s worst performing stocks were Egyptian Iron & Steel down 4.8%, AMOC down 4.2%, and Porto Group down 4.0%. The market turnover was EGP 557 mn, and local investors were the sole net sellers

Foreigners: Net Long | EGP +20.2 mn
Regional: Net Long | EGP +9.3 mn
Domestic: Net Short | EGP -29.5 mn

Retail: 65.9% of total trades | 66.7% of buyers | 65.2% of sellers
Institutions: 34.1% of total trades | 33.3% of buyers | 34.8% of sellers

Foreign: 18.1% of total | 19.9% of buyers | 16.3% of sellers
Regional: 6.6% of total | 7.5% of buyers | 5.8% of sellers
Domestic: 75.3% of total | 72.6% of buyers | 77.9% of sellers

WTI: USD 69.80 (+0.79%)
Brent: USD 79.06 (+2.18%)

Natural Gas (Nymex, futures prices) USD 2.83 MMBtu, (+0.14%, October 2018 contract)
Gold: USD 1,203.00/ troy ounce (+0.07%)

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Calendar

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

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 (Wednesday): 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. © 2018 Enterprise Ventures LLC.