Tuesday, 25 September 2018

Fourth bond auction called off in four weeks

TL;DR

What We’re Tracking Today

It’s our birthday: Enterprise is four years old today. We’ve done this 964 times now, not including our Your Wealth edition or the Weekend Edition we previously published on Fridays before the Resident 11 Year Old (then somewhat younger, but no less blunt) declared that our working seven days a week wasn’t smart on the work-life balance front. As you can see from our inaugural issue, we have come a long way — and we lots more to come. We are thankful for the support and kindness our readers have shown and hope to continue to be your trusted morning news source for many more years to come.

It is also a very slow news day at home and abroad. Enjoy what we’re sure will be a one-day respite — with the House due back in session next week, all good things shall come to an end.

What are folks talking about in the world beyond our fair shores? The now very messy confirmation process for The Donald’s nominee to the US Supreme Court (Brett Kavanaugh faces allegations of [redacted] impropriety) and, in parallel, the fate of Rod Rosenstein. He’s the US deputy attorney general who allegedly mused about invoking the 25th amendment to try to declare Trump incapable of continuing in office — and the guy who is ultimately responsible for the ongoing investigation into alleged Russian interference in the 2016 election. The two stories lead the mainstream and business press on both sides of the Atlantic this morning.

**#4 Oil broke the USD 80/bbl mark, hitting a four-year high: Brent crude rose more than USD 2 yesterday to USD 80.82, breaking the USD 80/bbl mark, the FT reports. The fresh high comes after OPEC decided against further output increases despite demands from US President Donald Trump for renewed action to cool prices, as we noted earlier this week. Driving the decision was the US reinstating sanctions on Iran, which will resume in November. The era of “lower for longer” oil prices may be over, Bloomberg suggests.

Some oil traders are now talking about crude breaking above USD 100, the business information service adds, but the sell-side set is warning against irrational exuberance (forgive us for invoking Greenspan). Analysts at Bank of America, for one, sees a good chance oil will break USD 100, but warns “the likelihood of an oil spike and crash scenario akin to the one observed in 2008 has increased.” As Bloomberg explains: “A decade ago, Brent crude surged to nearly USD 150 a barrel, only to crash just months later as high fuel prices and the global financial crisis triggered a slump in demand. This time, the deepening trade war between the U.S. and China threatens economic growth in Asia and turmoil in emerging countries could amplify the impact of higher prices on global demand growth.” BofA’s outlook on crude for 2019 is for around USD 80 / bbl.

None of this is good for our budget deficit: The Finance Ministry is expected to amend targets for Egypt’s FY2018-19 budget deficit to 8.6% of GDP from 8.4% of GDP, a senior government official told us over the weekend. The official blamed rising oil prices, along with higher US interest rates, for the decision. Crude closing above USD 80 yesterday will also add new impetus to the government’s fuel hedging plan, which officials had suggested could be shelved if oil prices stabilized. Earlier this month, the government reportedly signed fuel hedging contracts with two international banks, with some in the press speculating that the firms were JP Morgan and Citibank.

There’s also the EM component: The International Institute of Finance put out a report last week suggesting that oil importers of the Middle East were most at risk of emerging market contagion. The spike in prices will not help, joining with potential fallout from global trade tensions to kick emerging markets in the seat of the pants despite the recent respite after a seven-month plunge in EM, Bloomberg writes.a

**#8 The world’s wealthiest families are liking private equity right now, just don’t expect them to allocate much to this part of the world after the Abraaj imbroglio. “The world’s wealthiest families plan to allocate more money to private equity after the asset class helped drive an average 15.5 percent rise in the value of their investments in 2017, according to a survey” by UBS and Campden Wealth, writes Reuters.

So, how are family offices splitting their portfolios? According to the survey:

  • 22% public equities in developed markets
  • 6% listed equities in emerging markets
  • 16% fixed income
  • 46% “alternatives” including private equity and real estate

Mo Salah gets goal of the year, loses best player to Modric: Mohamed Salah claimed the FIFA Puskas Award for “goal of the year” at yesterday’s Best FIFA Football Awards ceremony. Salah took home the gong for his far-post finesse shot against Everton last season (watch, runtime: 0:52). He was among three finalists shortlisted for the big prize — the Best FIFA Men’s Player — but ultimately lost to Real Madrid and Croatia midfielder Luka Modric, according to FIFA’s official website. Modric ended Ronaldo and Messi’s nine-year monopoly on the award.

In miscellany this morning:

**#9 It’s never too late to start your own business, the New York Times would have you know. They profile New York-based “encore entrepreneurs” — people in their 50s and 60s who have hung out their own shingle and are each building a business. This isn’t a flash-in-the-pan media story: “The best entrepreneurs tend to be middle-aged. Among the very fastest-growing new tech companies, the average founder was 45 at the time of founding. Furthermore, a given 50-year-old entrepreneur is nearly twice as likely to have a runaway success as a 30-year-old,” according to researchers at Northwestern’s Kellogg School of Management in a study out earlier this year. The average age of a startup founder? 42, Business Insider writes, picking up on a related study.

Your browser is the most important app you have, and the Wall Street Journal would like to encourage you to think about whether you’re using the right one, whether on your phone, your tablet or your computer.

Tl;dr is now in the Merriam-Webster dictionary. Tl;dr isn’t just our potted summary to each day’s issue (above): The term, which dates back to 2002, refers to a quick summary because the main message is “too long; didn’t read.” It has now made the Merriam-Webster dictionary.

Enterprise+: Last Night’s Talk Shows

Coverage of President Abdel Fattah El Sisi’s New York visit and Mo Salah falling short of winning the FIFA Best Player Award were among the most popular topics of discussion on the airwaves last night.

Talking heads and pundits all jumped on the Mo Salah bandwagon to congratulate the national star for winning the Puskas Award and console him for missing out on the top award. El Hekaya’s Amr Adib extolled the virtues of the Liverpool striker, saying that making it to the top three alongside Croatia’s Luka Modric and Portugal’s Cristiano Ronaldo is an achievement in itself (watch, runtime: 4:22). The Puskas Award relies mainly on a popular vote, which shows the magnitude of Salah’s fanbase, said sports critic Ihab Al Khatib (watch: runtime: 9:47). Egyptian Football Association member Karam Kordy suggested that Salah’s infamous injury at the hands of Sergio Ramos may have put a damper on his bid for the award, but maintained that Salah still has a bright career ahead of him and more chances to win the award down the road (watch, runtime: 5:18). Al Hayah fi Masr also covered the awards (watch, runtime: 0:13).

Ittihadiya spokesman Bassam Rady gave Masaa DMC a rundown of El Sisi’s agenda in New York yesterday (the details of which are in Speed Round, below), noting that our economic reform program was praised at nearly all of the president’s meetings (watch, runtime: 3:46).

President Abdel Fattah El Sisi’s address at the Nelson Mandela Peace Summit was significant to fellow African countries, particularly as it highlighted the importance of the peaceful resolution of conflicts, journalist Heba El Qodsy said on Hona Al Asema (watch, runtime: 5:56). Political science professor Ashraf Singer said much the same, adding that the speech effectively addressed Egypt’s role in the continent (watch, runtime: 4:35).

El Moselhy talks commodity prices, subsidy program maintenance: Supply Minister Ali El Moselhy had a chat with Masaa DMC’s Eman Al Hosary about the effect of the economic reform program on the production and consumption of basic commodities. The EGP float doubled the state’s subsidy bill, but the government has not cut back on these subsidies or raised prices of basic commodities, El Moselhy stressed. He also noted that the country has sufficient reserves of everything from wheat and poultry to sugar and oil (watch, runtime: 1:50).

El Moselhy also touched on the ministry’s internal trade strategy, which he told El Hosary entails establishing logistics areas for storage, sorting, and packaging goods, as well as setting up wholesale distribution outlets across the country (watch, runtime: 3:17).

The Health Ministry will offer health insurance to construction and quarry workers, General Authority for Health Insurance head Soheir Abdel Hameed told Hona Al Asema. The ministry has so far tallied some 264k workers that will be provided with insurance, which workers can apply for through offices in their respective districts. The move comes as part of the state’s preparations for the rollout of the Universal Healthcare Act, according to Social Insurance Fund head Samy Abdel Hady (watch, runtime: 7:29). (We note here that Abdel Hameed is talking about day labourers, not full-time employees of registered builders and quarrying companies.)

Meanwhile, the Personal Status Act was a topic of debate between Al Azhar’s Islamic research academy member Abdullah Al Naggar and lawyer Nehad Abu Qomsan on Hona Al Asema. Civil society organizations have been calling for the law to be amended (watch, runtime: 16:00 and runtime: 15:00).

Speed Round

Speed Round is presented in association with

**#1 Egypt cancels bond auction for the fourth consecutive week: Egypt called off its fourth treasury bond auction in as many weeks on Monday, the Finance Ministry said on Monday. Officials called off sales of five- and 10-year treasury bonds worth EGP 3 bn because of the high yields on demand. Bankers speaking to Reuters say that yields requested at Monday’s sale were between 18.5% and 19.0%.

Despite the Finance Ministry’s best plans to rely on longer-tenor debt issuances, it has had to depend on shorter-term treasury bills to cover financing. “To date in September, Egypt has raised EGP 7.1 bn in excess cash through auctions. In August they raised a total of EGP 12.7 bn from treasury bonds, so you can presume the bulk of the shortfall has been covered by the increased issuance of shorter-duration bills,” said Allen Sandeep, head of research at Naeem Brokerage. “The Ministry of Finance is trying not to lock in such high yields for an extended period of time. Historically, they have gone for months without issuing bonds and were able to raise all the funds they need via [shorter term] treasury bills,” another banker said.

But how long can this last? Yields on EGP-denominated short-term treasuries continued to rise on Sunday with the return on 91-day bills rising to 19.62%, while yields at the nine-month auction rose to 19.84%.

**#2 Consensus is that the central bank will leave interest rates on hold this Thursday when its monetary policy committee meets, according to a Reuters poll out yesterday. Some analysts, including in Shuaa, see borrowing costs and the strength of the USD as the crucial factors at the meeting, saying concerns there will have supplanted inflation, the central bank’s traditional bête noire. “Inflation is decelerating, but emerging market exits is creating pressure to keep rates high,” said Radwa El-Swaify, head of research at Pharos Securities Brokerage. The global macro backdrop (read: Emerging Markets Zombie Apocalypse) most likely means the MPC will keep rates where they are to preserve Egypt’s competitiveness in the battle for hot money amid a sell-off in EM assets.

But could leaving where they are come at too-high a cost? The move would “send an unneeded message of weakness, and will not be enough to revert outflows, but will punish domestic activity and delay prospects of easing,” CI Capital’s Hany Farahat said.

**#3 REPORT FROM NEW YORK- Praise from IMF, World Bank on the economic reforms: President Abdel Fattah El Sisi and senior members of his administration are in New York for the United Nations General Assembly meeting. There, the president met on Sunday with IMF Managing Director Christine Lagarde, who issued a statement yesterday praising Egypt’s economic reforms.

Key takeaways from Lagarde’s statement: “President El Sisi and I discussed the good progress under Egypt’s economic reform program supported by the IMF’s USD 12 bn Extended Fund Facility. Egypt’s economy is showing strong signs of recovery, and its economic growth is among the highest in the Middle East. … We agreed on the importance of capitalizing on Egypt’s macroeconomic gains to advance the authorities’ home-grown structural reforms. These reforms will help achieve more sustainable, inclusive and private-sector led growth which will help create jobs for Egypt’s young population, while also ensuring adequate resources are available for social protection. I reiterated the Fund’s commitment to support Egypt and its people.”

That’s the right message ahead of an IMF delegation visit next month to conduct the lender’s fourth review of how the Sisi administration is doing with the implementation of the reform program.

World Bank also gave Egypt props: World Bank President Jim Yong Kim lauded the progress Egypt has made on its economic reform program during a meeting with President El Sisi, Investment Minister Sahar Nasr, and Trade and Industry Minister Amr Nassar, according to an Ittihadiya statement. Kim reiterated the bank’s support for the remainder of Egypt’s program and discussed ways to attract fresh foreign investment and create more private sector jobs.

Trump praises Egypt’s war on terror in sit-down with El Sisi: Sisi sat down yesterday with US President Donald Trump yesterday. The Donald piled on the praise for the “outstanding job” Egypt has done fighting terrorism, according to a White House readout of the two presidents’ remarks. El Sisi vowed to eliminate terrorism altogether with the US’ support, and the two leaders stressed that US-Egypt relations have “never been stronger.” Trump also noted that the US is “working with Egypt on many different fronts, including military and trade. And whatever else you can work, we’re working. And we’re getting along great.”

El Sisi met overnight with top US business leaders, according to an Ittihadiya statement. The president told them that Egypt is keen on improving business ties with the US and pointed to national projects and infrastructure as a means for companies to bolster their investments in Egypt. Among those present was Apache CEO John J Christmann.

Meeting with Netanyahu?El Sisi also was expected to meet yesterday with Israeli Prime Minister Benjamin Netanyahu. We have yet to see any news emerging on that front.

More diplomacy in NYC: El Sisi also had sit downs with Norwegian Prime Minister Erna Solberg, Bulgarian Prime Minister Boyko Borissov, and Cypriot President Nicos Anastasiadeson the sidelines of the UNGA.

Also in New York, the president gave a speech addressing the Nelson Mandela Peace Summit, which was held as part of the UNGA to celebrate the 100th year of Mandela’s birth, according to a readout of the speech.

**#5 IPO WATCH- Retail component of CIRA offering is c. 4.5x oversubscribed: Appetite for leading private sector education outfit CIRA’s IPO is strong heading into the final day of subscriptions for tranche on offer to local retail investors, with Al Mal reporting the retail component of the offering is 4.5x oversubscribed. The subscription period for the 14.5 mn shares on offer to domestic individual investors ends today. The institutional component of the IPO was 10.36x oversubscribed amid high international demand. CIRA is offering some 207 mn shares (c. 38% of the company) and had priced its IPO at EGP 6.00 per share, above the midpoint of the EGP 5.45 to EGP 6.30 per share range on which it had previously guided. Trading on the company’s shares is due to begin on 1 October.

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.

**#6 INVESTMENT WATCH- Sawari Ventures to launch EGP 1 bn fintech fund by year-end: Sawari Ventures will launch its EGP 1 bn fintech-focused venture capital fund by the end of this year or early next year, depending on the timing of approvals it needs from the central bank, Al Mal reported. Sawari Ventures was set to reach first close on the venture capital fund by the end of June. Partners in the the fund include the National Bank of Egypt (NBE), Banque du Caire, Banque Misr and the European Investment Bank, said Mohamed Ragaai, head of investment at Banque du Caire. Egypt’s investment and telecoms ministries are also considering making capital commitments to the fund, Ragaai added.

**#7 INVESTMENT WATCH- Cairo Angels invests in Buseet: Venture capitalist firm Cairo Angels has announced that it has made an investment in transit tech app Buseet, the company said in a release on Monday (pdf). Cairo Angels’ investment is part of a seed round that includes 500 Startups and angel investors from Singapore and the Gulf. “We are very pleased to have closed the Buseet [transaction] and to have co-invested in this opportunity with our partners 500 Startups and other Angels. We are very confident that Buseet can compete and continue to deliver a compelling solution to a very real problem that is clearly identifiable across emerging markets and beyond,” Cairo Angels Chairman Aly El Shalakany said. The statement did not put a value on the transaction or say how large a stake Cairo Angels took. The transaction is the latest in wave of investment flooding Egypt’s transportation sector.

M&A WATCH- Orascom Investment to acquire entire stake of Nile Sugar by year-end. Orascom Investment Holding (OIH) will acquire all the outstanding shares of Nile Sugar by the end of this year, Naguib Sawiris told CNBC Arabia, adding that due diligence on the transaction is ongoing. OIH is currently prioritizing investment in the financial, real estate, agriculture, and logistics sectors.

OIH is also planning to acquire a defunct juice and dairy plant, said Sawiris, who refused to disclose further details on the value of the acquisition, the plant’s product range or location. Meanwhile, OIH is also in “advanced” talks with the Housing Ministry over a land plot in downtown Cairo. Sawiris also remained tight-lipped on this venture, and did not provide any details on what OIH plans to do with the land (watch, runtime: 2:04).

Edison, Qalaa scrap plans for USD 150 mn power plant in Abu Qir: Edison and Qalaa Holdings have decided to scrap their plan to build a USD 150 mn combined cycle power plant in Abu Qir after determining that the project would not be financially feasible with current power tariffs, an unnamed source from Edison tells Al Masdar. Qalaa and Edison had planned to sell power from the 180 MW plant directly to consumers. The pair had begun talks with the Electricity Ministry over the plant back in 2016, and had reached an agreement with the EGPC to supply the plant with natural gas from Edison’s concession in Abu Qir.

Raya eyes expansion thanks to weak pound: EGX-listed outsourcing services provider Raya Contact Center is expanding thanks to a weak EGP and relaxing of foreign currency restrictions, writes Tamim Elyan for Bloomberg. Raya added 1,000 workstations this year, up from an average of 400 per year. “We are now getting back on the map,” CEO and Managing Director Reem Assad said. “We are price competitive and foreign clients are now getting back in touch with us,” she added. The company, which runs offshore call centers and makes 75% of its revenue from serving clients abroad, plans to reach a total of 10,000 workstations by end-2020, up from a current 6,700.

M&A WATCH- United Energy Group to acquire Kuwait Energy for USD 651 mn: Hong Kong-listed energy firm United Energy Group has made a USD 651 mn bid to acquire Kuwait Energy, United Energy said in a filing to the Hong Kong stock exchange, Reuters reports.

Egypt assets among those that enticed United: The move comes as United Energy looks to expand in the Middle East. Kuwait Energy has operations in several countries, including Egypt, Iraq, Yemen and Oman, United Energy said.

Background: Reports of the acquisition come two months after Kuwait Energy reportedly hired investment bank Perella Weinberg Partners to advise on possibly divesting its stakes in Egypt and Iraq. Talks for a possible merger with the UK’s SOCO International earlier this year had reportedly had fallen apart. The firm, which lost its CEO and saw a credit downgrade last year, owes USD 290 mn due next year, and should start repayments of a convertible loan of around USD 150 mn this year to an entity controlled by private equity group Abraaj. Soco said last week it would acquire Egypt-focused oil driller Merlon.

Singapore competition watchdog fines Uber and Grab: Singapore’s Competition and Consumer Commission fined ride-hailing companies Uber and Grab with a combined USD 9.5 mn on Monday as their merger earlier this year was blamed for driving prices up, Reuters says. Effective fares on Grab rose 10-15% after Uber Technologies Inc sold its Southeast Asian business to regional rival Grab in March for a 27.5% stake. Uber said it may appeal the decision.

Our own competition watchdog is taking note: You can expect the Singapore ruling to enter the arsenal of the Egyptian Competition Authority (ECA), which has repeatedly warned Uber and regional rival Careem against merger talks. The two sides are in talks on a transaction that could be worth as much as USD 2-2.5 bn. The ECA had used a previous ruling against the Grab-Uber merger by the Singapore competition watchdog to warn Uber and Careem.

In other ride-hailing merger news,Careem has acquired Indian bus shuttle service app Commut Bloomberg reports. The report did not mention the size of the acquisition.

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Up Next

The African Development Bank (AfDB) will reportedly disburse the third and final USD 500 mn tranche of a USD 1.5 bn loan to Egypt “within days.”

The E-Commerce Summit in Egypt takes place this Wednesday.

2018 Automech Formula car expo will kick off on Wednesday and will go on until next Sunday at the Cairo International Convention Center, Nasr City, Cairo.

The 2018 Narrative PR Summit will take place at the Four Seasons Nile Plaza on Sunday, 28 October with participants including friends ranging from the World Bank’s Mahmoud Mohieldin to US embassy spokesman Sam Werberg. The event’s website is here and its Facebook page here.

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 Egypt-Romania business council will meet in Bucharest from 7-11 October.

The Macro Picture

The new “scramble for Africa” is not the same as the old: Much attention has been given to the influx of investment and credit from China to African nations in what some have called a “new scramble for Africa” the FT says. But unlike the previous grab of colonial European days, this influx of capital and geopolitical influence is being led by the likes of Brazil, Russia, the GCC and Turkey — all of whom are following China’s lead.

Caught off guard: How is it that China has spearheaded this influx of EM capital into the continent at the expense of Europe the US? “At the end of the cold war, the west very much withdrew and stopped asserting its interest in Africa,” says Howard French, a professor at the Columbia School of Journalism and an expert on Africa. “It has taken all this time for the vacuum that this created to draw in a panoply of new players. China is the most obviously important, but Malaysia, India, Vietnam, Turkey, Brazil, Russia and the Gulf states have all been drawn in,” he says.

The numbers make sense to EM companies: “In spite of Africa’s well-documented problems, companies with a cheaper cost base than European or American rivals can often turn a good profit,” writes David Pilling. Furthermore, Africa’s fundamentals and macro climate are proving enticing. Six of the world’s 10 fastest-growing economies are in Africa, with demographics largely skewed towards the young. EM countries outside the continent were quick to spot the similarities.

And now the West wants back in: Sensing that they were left behind, the EU, the UK and the US are now trying to find their place back in the running. Last year, Germany launched what it called a “Marshall Plan with Africa,” pledging public money to companies investing on the continent. French President Emmanuel Macron is also pushing for commercial re-engagement. Even the Trump administration has authorized a larger budget for African investment.

Really want to see European desperation? Look to UK Prime Minister Theresa May, who started to develop a reputation as the most awkward dancer ever even as she proved herself a good sport (watch, runtime: 1:01).

Image of the Day

Ancient Egyptian Pharaoh Necho II might have been the first to challenge the “flat earth theory” when he hired Phoenician sailors to circumnavigate Africa, Mark Oliver writes for Ancient Origins. The crew sailed around Africa some 2600 years ago to find an alternate route to the straits of Gibraltar. Legend has it that they returned home with news that the sun seemed to change position as they reached the tip of Africa, challenging long-held beliefs of a flat earth and being the first known people to propose the idea.

Egypt in the News

A quiet morning: Topping coverage of Egypt in the foreign press on a very quiet morning was a court’s rejection of an appeal by UK tourist Laura Plummer against a three-year prison sentence for smuggling 300 tablets of pain meds, BBC reported. The story is being noted in the Independent, Evening Standard and The Sun.

More noteworthy: Egypt’s new administrative capital runs the risk of replicating “the historical trend of spatial segregation” between classes due to the high cost of housing within the new city, writes the Conversation, a site designed by academics to appeal to “The Public.” Cairo is already a lasting manifestation of urban inequality, as the rich and poor see vast differences in their access to services and benefits in their respective neighborhoods. The lack of affordable housing in the new capital might push lower-income citizens to the capital’s periphery, which will further reinforce the urban class divide. “If it’s to succeed, Egypt’s new capital must stick to the principles of an inclusive city, where all citizens can come together and share the city.”

Cairo appears to be the center of a cross-border organ trafficking operation that has marked African refugees as easy targets, according to Haaretz. Findings from interviews with survivors and victims of the illegal organ trade indicate that victims are variously kidnapped; have organs stolen during routine procedures; or are paid to sell organs. This has been going on for a while: A 2010 study by the local branch of a DC-based NGO suggested that several thousand African refugees in Egypt at the time were casualties of the illegal organ trade. The World Health Organization had also identified Egypt, almost a decade ago, as a place where organ trafficking was rampant. The problem has prompted an official crackdown on the organ trade and resulting in small victories, such as 2016 exposure of a ring of 40-something traffickers who including hospital and nursing staff. Legislation was also drafted last year with harsher penalties for traffickers and those who help them.

Other headlines worth noting in brief this morning:

  • Mo Salah apologists: Local commentators are busy these days coming up with reasons why Mo Salah’s performance this season has underwhelmed, Hamza Hendawi writes for the AP.
  • A court on Monday upheld death sentences against 20 Islamists in the killing of 12 policemen during violent clashes that erupted in 2013 following the ousting of Mohamed Morsi, AFP reports.
  • Egyptian authorities are still championing crackdown on LGBT people, a year after the rainbow flag incident in Cairo, the All Out activist Ifeatu Nnaobi writes for the Thomson Reuters Foundation.

On Deadline

Education reforms only prolong the suffering of budget-strapped parents: As back to school season gets underway, parents are alreading panicking about their budgets for tutors, writes Mohamed Saad Abdel Hafiz in Al Shorouk. It is hoped that the reformed Thanaweya Amma — with its move towards a high school GPA system, less rote-memorization, and streamlined exams — would put an end to the thriving school tutoring industry, which could run parents up to EGP 3,000 per month, he says. All this move does is spread out the stress parents experience in one year over the course of the three high school years, he added.

Worth Watching

The sci-fi world that is Dubai is kicking it up a notch (again) with new solar palms. The city has started building solar-panel trees that have wifi and can charge your phone. The smart trees are also equipped with touch screens that provide information about the city and even provide weather updates.

Nothing new under the sun: Are we the only ones who remember Mohandiseen’s glowing plastic palm trees from, say, 15 years ago?

Diplomacy + Foreign Trade

Transport Minister Hisham Arafat met UK Trade Envoy Sir Jeffrey Donaldson in Cairo on Monday to discuss stepping up cooperation across the sector, Al Mal reported. The two sides also agreed to hold a joint workshop to present Egypt’s potential investments in the sector to British companies.

House Speaker Ali Abdel Aal discussed bilateral ties with his Irish counterpart Seán Ó Fearghaíl during a meeting between the two at the Irish airport, reports Akhbar Al Youm. Abdel Aal, who is heading a delegation of House reps, is also set to meet with Ireland’s President Michael Higgins and members of the Irish National Parliament.

Basic Materials + Commodities

Long-staple cotton prices down due to high supply

Prices of long-staple cotton from the Delta fell to EGP 2,500 per qintar, down from EGP 2,650 per qintar as a result of higher-than-usual supply during the 2018-2019 harvesting season, Farmers’ Syndicate head Hussein Abdel Rahman said, according to Al Mal. Traders are also reportedly holding back on purchasing cotton to force prices down, Abdel Rahman said.

Tourism

Tour operators to launch flights to Luxor and Aswan from Barcelona next year

Madrid-based tour operator Master Flights Sl. announced plans to begin operating charter flights to Luxor and Aswan from Barcelona in April 2019, reports Al Shorouk. The decision comes on the back of increased demand from Spanish cultural tourists and a 60-70% increase in Spanish tourist arrivals to Egypt. The company launched last November charter flights to Luxor and Aswan from Madrid.

Other Business News of Note

Five foreign consortiums considered for GEM management tender

Five foreign consortiums have applied for prequalification for the tender to manage and operate the Grand Egyptian Museum’s (GEM) facilities, government sources said. The consortiums include Italian, Japanese, French, and GCC-based management companies. The Antiquities Ministry will announce the prequalified companies’ names tomorrow, with the deadline to apply set for today at 3pm CLT. The GEM is set to be inaugurated in December.

On Your Way Out

Egypt won an award recognizing its “exceptional leadership in environmental management” from the New Partnership for Africa’s Development (NEPAD) development agency, according to NEPAD. The awards ceremony — which also honored Morocco, Cameroon, South Africa, Kenya, and Rwanda, among others — was held last Wednesday.

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): 14,201 (-0.4%)
Turnover: EGP 671 mn (12% BELOW / ABOVE the 90-day average)
EGX 30 year-to-date: -5.4%

THE MARKET ON MONDAY: The EGX30 index ended Monday’s session down 0.4%. CIB, the index heaviest constituent ended down 1.1%. EGX30’s top performing constituents were Egyptian Resorts up 7.8%, Orascom Investment Holding up 6.3%, and Qalaa Holdings up 3.3%. Yesterday’s worst performing stocks were QNB Al Ahli down 4.5%, Ezz Steel down 2.8%, and Egypt Aluminum down 2.0%. The market turnover was EGP 671 mn, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +51.4 mn
Regional: Net Long | EGP +24.8 mn
Domestic: Net Short | EGP -76.2 mn

Retail: 59.8% of total trades | 58.8% of buyers | 60.8% of sellers
Institutions: 40.2% of total trades | 41.2% of buyers | 39.2% of sellers

Foreign: 23.8% of total | 27.6% of buyers | 20.0% of sellers
Regional: 6.5% of total | 8.4% of buyers | 4.7% of sellers
Domestic: 69.7% of total | 64.0% of buyers | 75.4% of sellers

WTI: USD 72.10 (+1.86%)
Brent: USD 81.08 (+2.89%)

Natural Gas (Nymex, futures prices) USD 3.03 MMBtu, (+1.81%, Oct 2018)
Gold: USD 1,204.00 / troy ounce (+0.22%)

TASI: 7,768.31 (+0.50%) (YTD: +7.50%)
ADX: 4,888.79 (-0.07%) (YTD: +11.15%)
DFM: 2,753.29 (-0.31%) (YTD: -18.30%)
KSE Premier Market: 5,282.30 (-0.12%)
QE: 9,731.65 (-0.38%) (YTD: +14.18%)
MSM: 4,453.27 (-0.74%) (YTD: -12.67%)
BB: 1,356.13 (+0.35%) (YTD: -1.83%)

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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.

26-30 September (Wednesday-Sunday): 2018 Automech Formula car expo, Cairo International Convention Center, Nasr City, Cairo.

26-27 September (Wednesday-Thursday) The Egyptian Factoring Association (EFA) will host a workshop on “Factoring as a tool for financing SME’s,” The Nile Ritz-Carlton, Cairo 1113 Corniche El Nil, 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.

28 October (Sunday): 2018 Narrative PR Summit, Four Seasons Nile Plaza

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.

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