Thursday, 27 September 2018

No samurai or panda bonds before 2019

TL;DR

What We’re Tracking Today

It’s interest day here in Cairo. Expect the central bank’s monetary policy committee to leave interest rates on hold when it unveils its decision late today. The CBE had previously signaled it would bring rates down this fall and winter, but outflows of hot money amid the EM Zombie Apocalypse have pundits speculating the CBE will opt to leave rates where they are to provide incentive to investors to leave their hard currency parked here. The downside: High local-currency borrowing costs for both Egyptian companies and the state treasury. We have chapter and verse in this morning’s Speed Round, below.

Melania Trump is coming to Egypt next month to “promote child welfare and education,” says Bloomberg. The first lady of the United States made the announcement on the sidelines of the UN general assembly in New York, saying she plans to visit Egypt, Ghana, Malawi, and Kenya starting 1 October.

Meanwhile, Melania’s husband said he “likes” the two-state solution for Palestine, according to Ahram Online. Mr. Trump voiced on Wednesday in a UNGA sideline meeting with Israeli Prime Minister Benjamin Netanyahu his administration’s advocacy of a two-state solution, what he called the “ultimate” resolution to the Palestinian-Israeli conflict.

Some miscellany this morning to see you through your commute and into the weekend:

US markets will grind to a near-stop today. That’s when Bloomberg writes that “everyone will be watching and not working” as US Supreme Court nominee Brett Kavanaugh faces off against a woman who accuses him of [redacted] misconduct in a Senate hearing. Kavanaugh now faces at least three allegations of misconduct; the New York Times will be running live coverage of the hearing starting at 4pm CLT.

For bitcoin geeks (aka: us): Bitmain Technologies, the “secretive” bitcoin miner, has opened its books ahead of a possible IPO. The company is the “largest operator of Bitcoin mining collectives and the dominant supplier of virtual currency mining machines” giving it “enormous influence over the global crypto ecosystem,” Bloomberg writes. Geek like us? Go read through its full prospectus (pdf) as filed with the Hong Kong Stock Exchange.

I’m not in your bitcoin cult, but curious. Where do I start? The Industry Overview starting on page 98 is the best entry point for the would-be novices in the Cult of Coin. It outlines, in simple legalese (only a modest contradiction in terms, we promise) what the industry is and how it operates.

How to handle your team members’ personal crises: “Managers cannot escape from this part of the job, but help is at hand,” the FT’s Michael Skapinker promises.

Humans of New York has finally left Egypt. The creator of the popular Twitter feed visited Egypt in August and appears to have found little other than tales of woe and misery.

Everybody’s beating up on Canada. Saudi Arabia rejected a reported Canadian overture at the UN to mend fences (“What are we, a banana republic?” KSA Foreign Minister Adel Jubeir is quoted as saying. “Would any country accept this? Fix it. You owe us an apology.”) and The Donald said yesterday he rejected meeting Canada’s PM at the UNGA and is thinking of slapping tariffs on cars imported from Canada. “That’s the mother lode. That’s the big one,” said The Eloquent One.

Planning to download the new macOS this weekend? We are, now that we’ve backed up our machines. You can get the rundown on what to expect here from Gear Patrol.

PSA- Awater outage is expected on Saturday in eight districts in East Cairo, the Greater Cairo Water Company announced yesterday, according to Al Shorouk. Upgrades will affect residents of Sheraton, Ain Shams, Matariya, Alf Maskan, New Nozha, Al Matar, Fatah Mosque, and El Hegaz square.

Enterprise+: Last Night’s Talk Shows

The UN General Assembly remained the topic du jour on last night’s talk shows, with most talking heads focusing on President Abdel Fattah El Sisi’s various meetings in New York City yesterday.

El Sisi met with several leaders yesterday, including Swiss President Alain Berset, South Korean President Moon Jae-in, Portuguese President Marcelo Rebelo de Sousa, and Italy’s Prime Minister Giuseppe Conte. The meetings featured talks on bilateral relations, challenges pertaining to illegal migration, and the latest developments in the investigation into the murder of Italian PhD student Giulio Regeni. Al Hayah fi Masr (watch, runtime: 6:36), Masaa DMC (watch, runtime: 2:28), and Yahduth fi Masr each had a rundown of the president’s activity for the day (watch, runtime: 1:32).

The president also delivered a speech on the dangers of climate change during the Informal Leaders Dialogue on Climate Change meeting, in which he reiterated Egypt’s commitment to the Paris climate pact, according to Al Shorouk.

Arab League’s Aboul Gheit talks regional issues: Arab League Secretary General Ahmed Aboul Gheit spoke extensively on Masaa DMC about several regional issues, including the situation in Syria and the resulting refugee crisis (watch, runtime: 3:17), the crisis in Yemen (watch, runtime: 2:42) and the situation in Libya (watch, runtime: 4:09). Aboul Gheit also touched on the Palestinian issue and the US’ decision to slash UNRWA funds (watch, runtime: 3:30).

Prime Minister Mostafa Mabdouly visited Sohag and Qena and his trip made Al Hayah fi Masr’s radar (watch, runtime: 7:23).

Bad tomato seeds? The Agriculture Ministry is inspecting several tomato fields after over 400 farmers complained that a specific tomato seed, known as 023, has been yielding infected crops, ministry spokesman Hamed Abdel Dayem said on Masaa DMC. Gaara Seeds — which supplies 023 seeds — had warned farmers months ago that there were copycat 023 seeds being sold on the market, according to the company’s marketing manager (watch, runtime: 23:22).

Celebrating Armenians in Egypt: Emigration and Expat Affairs Minister Nabila Makram Ebeid and Armenia’s Minister of Expats Mukhtar Hayrabtian were interviewed on Masaa DMC, where they discussed a celebration headlined “We are the Armenian Egyptians” (watch, runtime: 3:58).

Speed Round

Speed Round is presented in association with

**#1 It’s interest rate day. The central bank’s Monetary Policy Committee will have to juggle fallout from the Emerging Markets Zombie Apocalypse, the imperative to lower interest rates to turbocharge corporate growth (and real job creation), higher yields on government bonds, a potentially weaker EGP, and inflation. Economists surveyed by both Reuters and Bloomberg unanimously believe that the CBE will keep interest rates on hold in light of a challenging macroeconomic climate.

The EM Zombie Apocalypse: The CBE cited the selloff in EM as one of the reasons it left rates unchanged at its last meeting. In the time since, borrowing costs have gone up significantly for EMs as investors demand higher yields for debt. Compounding the matter for Egypt are reports of declining appetite for the EGP despite it having remained fairly stable (it has lost just 1.7% of its value against the USD in the past six months, while a broader index of EM currencies has slid c. 7.8%). Carry trade outflows have came in at USD 6 bn between April and June, putting pressure on the EGP. The upside is that the EGP is still considered moderately stable compared to other EMs, according to EFG Hermes’ Mohamed Abu Basha. “The EGP made minimal gains on the way up and will make minimal losses now that the flow has reversed,” he tells Bloomberg. “We see the spillover into Egypt largely resulting in higher domestic interest rates for longer.”

The treasury is paying a lot to borrow: The government had forecast in this year’s budget that yields on treasuries would be something along the lines of 14.7%, down from 18.5% in the previous fiscal year. Instead, yields have been averaging around 19% since the FY started in June, raising the costs of debt service in the budget and forcing the government to cancel four bond auctions. Every 1 percentage point increase in average rates raises the debt servicing bill by EGP 4-5 bn, according to the state budget. The government has since made debt control the guiding fiscal strategy and is looking to the international debt markets for financing — great, because interest rates are lower. Bad, because you’re now taking on new FX risk.

The struggles of the private sector: The private sector has been in a high interest rate climate. Companies are “reluctant to borrow for expansion because loans are expensive,” said Monsef Morsy, head of financial analysis at CI Capital in Cairo. “Credit is indeed growing, but it’s mostly to fund working capital, and not for investment.” And who can blame prospective borrowers? What kind of return on investment do you need to justify to pay credit-card interest rates when you put in a new production line?

Impact of EM apocalypse on Egypt will be reviewed next month: Egypt can withstand the impact of the emerging market selloff, said Planning Minister Hala El Said on Wednesday, according to Al Mal. The true impact of the crisis on Egypt’s fiscal and growth targets for 1Q2018-19 will be reviewed in October, she added.

Our central bank meets one day after the US Federal Reserve raised interest rates. The Fed raised its benchmark overnight lending rate a quarter of a point to a range of 2.00-2.25%, Reuters reports. It was the third time this year that the US has raised rates and came as the Fed “signalled it will forge ahead with plans to tighten policy, even as central bankers face White House pressure for low borrowing costs as well as concerns over a trade war,” the Financial Times notes. It is the first time that the Fed’s benchmark rates have been above 2% since the financial crisis in 2008, the Wall Street Journal notes.

The Fed sees another three years of growth ahead for the US economy, with Powell nearly effusive at a presser after the decision as he said, “Our economy is strong, growth is running at a healthy clip, unemployment is low, the number of people working is rising steadily, and wages are up,” he said. “Inflation is low and stable. All of these are very good signs.”

Further rate hikes could be in the cards, as Federal Reserve Chairman Jay Powell told reporters after the meeting that, “These rates remain low” and characterized the rate hike as a “gradual return to normal.” One pundit told CNBC to brace for hike rates once a quarter next year if the current macro backdrop remains in place,.

Why do we in Egypt — or other emerging markets — care so much about US rates? The higher US rates and the rosier to outlook for the US economy, the more “tourist” investors are going to flock to Amreeka. The tightening of the spread between the upside in the US and that in EM will see more risk-averse investors opt for American opportunities, sucking capital out of emerging economies, the conventional wisdom holds. Oh, and then there’s that whole, “We as a country are borrowing bns in USD” thing, as we note above and below.

**#2 EXCLUSIVE- Don’t expect samurai or panda bonds until 2019: Egypt is unlikely to issue JPY- or CNY-denominated bonds (called “samurai” and “panda” bonds in the trade) this fiscal year, a senior government source told Enterprise. The source said that the procedures for the issuance won’t be completed before next June, saying that Egypt has yet to receive the blessings from the central banks of Japan and China.

The focus for the moment is on an USD 5 bn eurobond issuance that could go to market in the coming months, our source said.

Asian roadshow to tap new pools of liquidity ahead of bond offerings: “The week after next, we will start promotional tours in the Asian markets, then Europe in preparation for issuing Eurobonds bonds,” Finance Minister Mohamed Maait said on Tuesday. While he did not specify when they would issue the bonds, Maait had previously put the window at some time between January and March 2019. Bloomberg also reported on the non-deal roadshow to drum up interest for upcoming offerings and said Egypt is in talks with Euroclear to make it easier for foreign investors to access EGP-denominated debt.

Egypt to issue sukuks next fiscal year: The government is planning to issue USD 1-2 bn in sukuks next fiscal year, the source added. The issuance will take place next year as there is currently no legislative framework that allows for it, we were told, and that legislation won’t be in place to allow an offering before the start of the FY2019-20. Egypt is one of 18 African countries that significant untapped potential in the sukuk market, Moody’s recently said.

**#3 State-backed debit card “Meeza” to roll out nationwide by December: The central bank plans to roll out a national debit card, named “Meeza,” by December, the central bank’s Sub-Governor for Payment Systems and Business Technology Ayman Hussein said yesterday, Al Ahram reports. Pensioners will be among the first to access state benefits through the cards, which will also be used to electronically deliver payments to civil servants and subsidy recipients, Hussein said. The government will also roll out by mid-2019 a contactless payment card which will be particularly useful for quick and low-value transactions such as paying for transportation, according to Hussein.

Background: We had reported last week that the Finance Ministry is preparing to roll out a national debit card system through state-owned banks as part of its new e-payments drive. The state is also reportedly planning to introduce ATMs and point-of-sale (PoS) terminals at which people would be able to pay bills and fees for various government services. The push for digital transition and financial inclusion policies comes as the government moves to make e-payments mandatory in January and grant incentives for their use. The House of Representatives had approved amendments to the Accounting Act that ban the use of paper cheques for transactions above a set threshold and make it mandatory for all government transactions to be electronic.

**#4 LEGISLATION WATCH- FRA working on Consumer Credit Act: The Financial Regulatory Authority (FRA) is driving the drafting of a new law that would govern retail financing and consumer credit, FRA head Mohamed Omran told Amwal Al Ghad. He was not specific on what the law would entail, or how it would impact and regulate the nation’s booming consumer finance industry.

We’ll know more soon: Omran said a draft of the bill will be put out for public consultation sometime in the coming week. The CBE had cited a lack of regulation in the consumer finance market as one of the reasons why it stepped earlier this month with a directive to banks aiming to regulate their exposure to companies that sell on installments consumer goods such as appliances and automobiles.

LEGISLATION WATCH- E-commerce Act to be ready in 1H2019? Legislation to regulate e-commerce currently being drafted by the CIT Ministry will be ready to present to the Madbouly Cabinet in 1H2019, CIT Ministry official Mohamed Hegazy said at the E-commerce Summit in Egypt on Wednesday, according to Amwal Al Ghad. While Hegazy gave further details, the local press had noted back in December that the that the law was primarily concerned with establishing a tax framework for the industry. Government sources had told us back in June that the Finance Ministry was looking to impose a VAT on e-commerce. Some of the largest e-commerce platforms operating in Egypt, among them Jumia and Amazon subsidiary Souq.com have (at least publicly) expressed support for regulating the industry.

IFC has invested EGP 1.2 bn in Egypt’s e-commerce infrastructure, supporting state’s digital transformation: The International Finance Corporation (IFC) has invested some EGP 1.2 bn in upgrading Egypt’s e-commerce infrastructure and to support the state’s digitization drive, said IFC Country Manager for Egypt Walid Labadi, Al Mal reports. Labadi did break down the individual investments, but Labadi noted e-payments platforms such as Fawry have benefited from financing or investment from the IFC.

**#5 IPO WATCH- El Farasha revives plans for an IPO in 2H2019: El Farasha for Printing has revived plans to list on the EGX, according to statements attributed to Chairman Mohamed Khalil by Al Mal. The listing, originally planned for this year, is expected to take place in 2H2019, he said, adding that the company was waiting for an opportune time in the market. He implied that the company was looking to hire investment banker to manage the IPO, which had previously been tipped to go to Beltone Financial. Khalil did not specify the size of the listing. Last we heard, El Farasha was expected to offer for sale up to 35% of the company in 1Q2018.

IPO WATCH- E-finance to IPO in 2H2019: State-run electronic payments company e-finance is planning an IPO in 2H2019, Chairman and Managing Ibrahim Sarhan said in a press conference on Wednesday, according to Al Mal. The company, which manages the state’s electronic payments and financial infrastructure, is one of the 23 state companies that are listing (or that are already listed, but offering new stakes to the market) as part of the state privatization program. The timing could place it among the companies of the second phase of the program, which will primarily involve new listings. Sarhan did not give further details beyond stating that the firm’s board will officially sanction the decision soon.

Don’t expect car prices to drop when tariffs on EU imports fall to zero, says Ghabbour: It is unlikely that prices on imported EU vehicles would drop once tariffs on them fall to zero on 1 January, GB Auto Chairman Raouf Ghabbour said at the Automech Formula 2018 conference on Wednesday. Ghabbour pointed to the continued rise in prices that have accompanied every subsequent cut in tariffs on EU and Turkish car imports that came with the agreement with the EU. He cites the price competitiveness of Japan and Korean-made cars in Egypt as evidence that the agreement has failed to lower prices in the automotive sector, according to Al Mal.

Automotive directive fatigue has set in: Talk of an automotive directive is essentially a moot point at this juncture, Ghabbour added. The measure has been on the drafting table since 2009 as part of a bit to protect the domestic assembly industry against what it says is unfair competition from Turkish, Moroccan and EU imports. The zombie legislation — originally meant to grant incentives to assemblers to move up the value chain to manufacturing to compete with EU and other imports — is currently in limbo, as the Madbouly Cabinet looks to tweak it. Trade and Industry Minister Amr Nassar had said last month that the ministry is planning to have the automotive directive drafted and ready before the House of Representatives reconvenes for the fall legislative session in October.

Nonetheless, Ghabbour sees prices in Egypt as stabilizing, despite marginal increases of 2-3% on auto parts imported by local assemblers. He sees sales on cars reaching 130-140k by the end of the year.

PSA for gearheads- Mercedes launched its new C Class and E Class lineups in Egypt at Automech Formula. You can read all the details in the company’s statement here (pdf).

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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 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, according to Al Mal.

Fourth IMF review scheduled for mid-October: An IMF delegation is due in town mid-October for a review of Egypt’s progress on its reform program ahead of the disbursal of the fifth USD 2 bn tranche of the country’s extended fund facility, Finance Minister Mohamed Maait said yesterday, Al Mal reports. The IMF should complete its review by the following month, Maait said. Egypt has already received USD 8 bn out of USD 12 bn agreed on with the IMF last year.

Image of the Day

Ancient Egyptian textiles on display in New York: An exhibition at New York’s Godwin-Ternbach Museum tells the stories of Egyptians from the 4th to the 7th century through ancient textiles covered in the color purple, which was then worth the same as silver and associated with royalty, The Knight News reports. The exhibit, headlined “From the Desert to the City,” runs until 13 December.

Egypt in the News

It is a truly slow morning for Egypt in the international press — not that we’re complaining. Coverage is limited largely to pickups of wire reports on the discovery of a “massive ancient building” in Mit Rahina believed to have once been part of the nation’s ancient capital.

Among the very small handful of headlines worth a sentence each:

  • Investigators are probing the death of a Coptic monk who had previously been posted at a monastery at which the abbott was found murdered earlier this year, the Associated Press reports. Expect this story to have legs.
  • Residents of Warraq are grumbling as the government demolishes nearby neighborhoods as part of its urban renewal drive, Reuters reports.
  • Common purpose with the Statelet? Cairo and Doha share a common goal of a peaceful Gaza despite the existing diplomatic tensions between the two sides, according to a report by intelligence outfit Stratfor Worldview.

On Deadline

Trying to control the media is counterintuitive in the age of social media, and trying to restrict the flow of information to a few official channels all but ensures that citizens will resort to social media platforms for what they see as more reliable sources, Ashraf Barbary writes for Al Shorouk. Barbary gently suggests that allowing newspapers and television channels the space to discuss controversial or sensitive topics would help reduce people’s reliance on social media, where information is difficult to verify or control.

Worth Reading

Omm Ahmed, an Egyptian woman living in the impoverished south, has given up on an inheritance left to her by her father after a yearslong fight with her uncle to claim it. Egypt recently passed a law that imposes jail terms and fines on people like Omm Ahmed’s uncle — but in a conservative society such as ours, women who take relatives to court could face being disowned by their families, Heba Saleh writes for the Financial Times. A move in Tunisia to split inheritance equally between men and women, which had sparked some hope for gender equality in the MENA region, is moving slowly through the legislative process, and conservative voices are arguing it’s anti-Islamic. According to Islamic law, male children are to receive twice the share of female children when it comes to inheritance — in many cases though, women are left with nothing at all and no one to fight for them.

Worth Watching

It’s not just in Egypt: US workers may take home a smaller share of the pie next year. A recent survey shows that companies are allocating smaller relative portions of their budgets to employee compensation as years go by — despite a booming economy — purely out of recession jitters, according to Bloomberg (watch, runtime: 1:02). “In 2017, companies set aside almost 16% of their budgets for total compensation packages. “By 2019, that number will be down about 1%,” the business information service says.

Diplomacy + Foreign Trade

Surprise, surprise: GERD talks fail to reach breakthrough: Tripartite talks in Addis Ababa between the irrigation ministers of Egypt, Sudan, and Ethiopia over the Grand Ethiopian Renaissance Dam (GERD) ended yesterday without reaching any “specific outcome,” according to an Irrigation Ministry statement. The meeting, which was also attended by a tripartite scientific committee, was meant to iron out “pending issues” and misunderstandings over the filling of the dam’s reservoir. Tensions had been on the rise between the three neighboring countries last year, before they agreed to arrive at a “joint vision” for the dam’s construction, which would see Ethiopia catering its timeline of filling the dam to Egypt’s needs in exchange for economic cooperation.

Energy

Gov’t receives Dabaa nuclear safety analysis report from Rosatom

Russian nuclear energy company Rosatom has submitted its safety analysis report on the 4.8 GW Dabaa nuclear power plant to the Egyptian Atomic Energy Authority (EAEA), government sources said. Rosatom will begin training programs for workers building the plant before year-end and lay the groundwork for the project by early 2019. The company expects to start constructing the reactors by mid-2020 once it receives required permits from EAEA, which plans to complete all reviews and issue permits by 2020.

Egypt sends Jordan natgas samples three months ahead of supply resumption

Egypt has delivered to Jordan samples of the natural gas it will export by January 2019, Jordan’s Energy Minister Hala Zawati said, according to Petra. Oil Minister Tarek El Molla and El Zawati had signed last month a natural gas sale and purchase agreement under which Egypt will supply 250 mcf/d of gas to Jordan. This quantity will cover 10% of the country’s gas needs to generate electricity and will restore Egyptian exports of gas to Jordan to pre-2009 levels.

Elsewedy subsidiary, ABB win EGP 138 mn contract to develop transmission control center

An Elsewedy Electric subsidiary, ABB Switzerland, and ABB Arab have signed a EGP 138 mn contract to develop a transmission control center for Suez Canal governorates, Elsewedy said in a statement to the bourse (pdf). Elsewedy Electric will own 99.97% of the facility, which will serve 115 power stations across Sharqiya, Ismailia, Suez, Port Said, North and South Sinai and Red Sea governorates.

Basic Materials + Commodities

Egypt looks to export agri products to Ethiopia, Burundi, and Rwanda

The Agricultural Exports Council is looking to Ethiopia, Burundi, and Rwanda as potential export markets for agricultural products, council member Mostafa Al Nagari said, according to Al Mal. Al Nagari did not specify which products the council is looking to push in these markets.

Manufacturing

FEI, Union Capital sign MoU on idle factories bailout fund

The Federation of Egyptian Industries (FEI) and Union Capital signed yesterday a memorandum of understanding on the latter’s EGP 150 mn bailout fund for idle SME factories, according to MENA. The agreement will see Union Capital providing financing packages to idle factories registered with the FEI, Union Capital Managing Director Sahar Damaty said, according to Amwal Al Ghad. Union Capital plans to provide financing packages to between 50 and 60 factories over the next year, according to Damaty.

Real Estate + Housing

Palm Hills to invest EGP 1.539 bn from capital increase in four new projects

Palm Hills Development (PHD) is looking to invest EGP 1.539 bn from its latest capital increase in four real estate projects, according to an EGX disclosure. The investments will include infrastructure works at its megaproject Badya in West Cairo, adding a commercial zone to its Palm Hills New Cairo, and developing two new mixed-use projects in West Cairo. The company’s EGM had approved earlier this month a decision to increase issued capital by EGP 1.5 bn. The capital increase is pending approval from the Financial Regulatory Authority.

Tourism

EGOTH invites investors to participate in JV to develop Shepheard Hotel

The Egyptian General Company for Tourism and Hotels (EGOTH) has invited hotel developers and investors to participate in a joint venture to develop the Shepheard Hotel in downtown Cairo, according to EGOTH head Mervat Hataba. EGOTH is offering investors a 51% share of the JV, and will accept investor offers until 16 October. The Public Enterprises Ministry had been in talks with an unnamed Emirati company to set up the JV with EGOTH. The agreement would have seen the Emirati company and EGOTH each holding a 50% share of the JV. It remains unclear why these talks fell through. The hotel’s development is expected to cost USD 130 mn.

Banking + Finance

TE to reach financial close on USD 550 mn loan from UAE banks next week

State-owned Telecom Egypt will reach financial close next week on a five-year USD 550 mn syndicated loan jointly arranged by Emirati banks Mashreqbank and First Abu Dhabi Bank, unidentified sources told Al Mal. The Union National Bank and Arab Banking Corporation were among entities that participated in providing the loan, which, according to a statement cited by Reuters last month “will be used to support capital and operational expenditures.”

S&P’s raises credit rating for NBE, Banque Misr

Ratings agency Standard & Poor’s raised its long-term issuer credit rating for the National Bank of Egypt (NBE) and Banque Misr to B from B- and is currently revising their outlooks to stable from positive, according to a release. The agency stated that the banks’ upgrades came as a result of Egypt’s strengthening GDP growth, improved economic and political conditions, and reduced credit growth. S&P’s also maintained CIB’s long- and short-term issuer credit ratings at B and maintained its outlook as stable.

EFG Leasing in talks with four int’l institutions for USD financing package

EFG Hermes Leasing is in talks with four international institutions for a USD-denominated loan to provide financing for its exporting clients, Chairman Fatma Lotfy said, Al Mal reports. The firm is currently in talks with the European Bank for Reconstruction and Development, Saudi’s Alinma Investment Fund, ResponsAbility, and the German International Cooperation Agency (GIZ). Lotfy did not disclose the size of the loan EFG is seeking.

Global Lease to form new factoring company before the year is out

Global Lease has filed paperwork with the Financial Regulatory Authority to form a factoring arm before year’s end, CEO Hisham Abdel Fattah said yesterday, according to Al Mal.

NI Capital’s Tamweely officially begins operations

NI Capital’s Tamweely announced yesterday that it has officially launched its operations after receiving its final microfinance license in July, according to an emailed statement (pdf). The company will focus largely on providing funding to women and youth and working to merge informal businesses into the formal economy as part of the state’s financial inclusion drive. Tamweely was established in August 2017 by state-owned investment bank NI Capital with an initial investment of EGP 50 mn.

Other Business News of Note

Sisi and Boeing boss talk cooperation and investment in New York meeting

President Abdel Fattah El Sisi and Boeing International President Marc Allen discussed potential cooperation and fresh investments in New York on Tuesday on the sidelines of the UN General Assembly, according to a statement from the presidency. The two looked into upgrading the fleets of Egypt’s national flag carrier and the Armed Forces. Allen said Egypt’s improved investment environment has encouraged his company to eye more investments in the country.

Three additional consortiums apply to prequalify in GEM management tender

Three additional local and international consortiums have applied for prequalification for the tender to manage and operate the Grand Egyptian Museum’s facilities, bringing the total number to eight consortiums, government sources said. The consortiums include Egyptian, Emirati, Kuwaiti, British, Italian, and French management firms. A ministerial council will announce the list of prequalified consortiums in four-six weeks’ time.

Schneider Electric plans fresh investments in Egypt worth EUR 20 mn

Schneider Electric plans fresh investments in Egypt worth EUR 20 mn: Schneider Electric is planning to invest EUR 20 mn in Egypt “in the coming period,” Schneider Deputy Chairman Sherif Abdel Fattah said yesterday, according to Amwal Al Ghad. Schneider has recently signed an agreement with Revolta Egypt to build 65 electric vehicle charging stations across seven governorates, Abdel Fattah said, adding that his company is also planning to set up a charging station in the new administrative capital. Abdel Fattah offered no further details on the company’s investment plans.

Orange Egypt EGM votes for delisting

The extraordinary general assembly of Orange Egypt voted to voluntarily delist from the EGX, the company said in a bourse filing on Wednesday (pdf).

Sports

Dina Meshref is Africa’s only female table tennis champion

**#6 Dina Meshref, Africa’s only female table tennis champion, ranked 43 in the world, is training now for the International Table Tennis Federation (ITTF) Women’s World Cup, she told ESPN. The 24-year-old, who says it’s been difficult to balance between the sport and her student life, had almost retired three years ago after struggling to crack into the ITTF’s top 100.

On Your Way Out

Cairo-based regional tech incubator Flat6Labs has taken on eight startups for its 11th cycle, including Sana3ly, The Meal Kit and Medicobot, an official said. The eight online and digital-solution startups will graduate from Flat6Labs’ four-month cycle in December.

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 (Wednesday): 14,612 (+1.8%)
Turnover: EGP 776 mn (3% above the 90-day average)
EGX 30 year-to-date: -2.7%

THE MARKET ON WEDNESDAY: The EGX30 index ended Wednesday’s session up 1.8%. CIB, the index heaviest constituent ended up 1.9%. EGX30’s top performing constituents were Egyptian Iron and Steel up 8.0%, Telecom Egypt up 5.1%, and Qalaa Holdings up 4.4%. Yesterday’s worst performing stocks were Juhayna down 2.4%, Egyptian Resorts down 1.0%, and Orascom Investment Holding down 0.8%. The market turnover was EGP 776 mn, and regional investors were the sole net buyers.

Foreigners: Net Short | EGP -7.6 mn
Regional: Net Long | EGP +45.4 mn
Domestic: Net Short | EGP -37.8 mn

Retail: 60.3% of total trades | 55.5% of buyers | 65.0% of sellers
Institutions: 39.7% of total trades | 44.5% of buyers | 35.0% of sellers

Foreign: 20.6% of total | 20.1% of buyers | 21.1% of sellers
Regional: 9.5% of total | 12.4% of buyers | 6.6% of sellers
Domestic: 69.9% of total | 67.4% of buyers | 72.3% of sellers

WTI: USD 72.04 (-0.33%)
Brent: USD 81.72 (-0.18%)

Natural Gas (Nymex, futures prices) USD 3.02 MMBtu, (-1.98%, October 2018 contract)
Gold: USD 1,198.50 / troy ounce (-0.55%)

TASI: 7,893.55 (-0.15%) (YTD: +9.23%)
ADX: 4,929.98 (+0.78%) (YTD: +12.08%)
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Calendar

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.

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

03-06 November (Saturday-Tuesday): World Youth Forum 2018, Maritim Jolie Ville Golf Course, Sharm El Sheikh, Egypt.

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

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

06-07 November (Tuesday-Wednesday): 2018 IIF MENA Financial Summit, Al Maryah Island, Abu Dhabi, United Arab Emirates

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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