Sunday, 21 October 2018

Privatization program postponed to 1Q2019 as EM turmoil bites


What We’re Tracking Today

It looks set to be another busy news week as the House of Representatives convenes today for its first general assembly of the new legislative season — and as corporate Egypt slides into earnings season.

What’s more, an IMF delegation is in town to kick off the Fund’s fourth review of Egypt’s progress on a laundry list of economic reforms pledged as a condition of the USD 12 bn extended fund facility we landed back in November 2016. The delegation arrived on Thursday, government sources said, and the review begins this week. Expect sit-downs between IMF staffers and both the Finance Ministry and the Central Bank, sources tell Al Shorouk

End of an era: The Höegh Gallant floating storage regasification unit (FSRU), until recently the final critical link in Egypt’s natural gas import chain, left Egypt on Thursday, ending an era of gas imports and ushering Egypt’s re-emergence as a regional gas export hub. The FSRU set course for the US Sabine Pass production facility, according to Reuters. Höegh had agreed with Egypt to amend the terms of a five-year contract for the FSRU that will see the Norwegian company hired as an LNG carrier to a third party.

Saudi admits Khashoggi was killed at consulate: After two weeks of denying any knowledge of his disappearance, Saudi Arabia has admitted that dissident journalist Jamal Khashoggi died at its consulate in Istanbul. KSA authorities said that Khashoggi died during a fight inside the consulate, but provided no details on the nature of the altercation, Reuters reports. Saudi prosecutors have launched an investigation into the incident and vowed to take action against any and all persons found to be implicated, the Saudi embassy in Cairo said in an emailed statement (pdf). Five top officials have been sacked (including the deputy head of intelligence) and 18 arrested, the Washington Post reports.

The international community is not buying it. Turkish officials, who had leaked audio recordings last week of what they claimed were Khashoggi’s final moments, promised to continue their investigation. They had said that Khashoggi was dismembered and beheaded by Saudi agents. The European Union asked for a more “in-depth” investigation, with Germany describing the story as “inadequate.” US President Donald Trump also said he would not be “satisfied until we find the answer,” but said the move “was a good first step.” Egypt’s Foreign Ministry, meanwhile, commended the kingdom for the “brave and decisive” preliminary investigations.

The story dominates front pages around the world this morning, including the New York Times, Washington Post, Bloomberg, the Wall Street Journal, and the Financial Times, which delves into the history of Khashoggi’s squabble with the Saudi crown. Amr Adib also took a few moments to add his two cents (watch here, runtime: 3:03 and here, runtime: 1:44).

The Post has published Khashoggi’s last column, headlined What the Arab world needs most is free expression.

Stories worth reading on the fallout:

Is anyone going to MbS’ investment conference this week? Fox and Goldman Sachs exec Dina Powell (said to be in line to become US ambassador to the United Nations) aren’t going. But Russia is.

Care about the price of oil? Keep an eye on US shale output. “US shale oil production could fall short of its most optimistic projections because of emerging problems in the industry,” warns the CEO of Schlumberger, the world’s largest oilfield services group. “The well-established market consensus that the Permian can continue to provide 1.5 mn barrels per day of annual production growth for the foreseeable future is starting to be called into question,” CEO Paal Kibsgaard said on a call with analysts.

In miscellany this morning:

Meet the new debt instrument that has the prophets of doom and gloom losing it: The collateralized loan obligation, a cousin of the CDO that helped trigger the global financial crisis.

A familiar playbook? Ukraine has signed up for a USD 3.9 bn bailout from the IMF and has pledged to raise household prices of natural gas as a condition.

Apple is expected to launch new iPad Pros (or should that be iPads Pro?) on Tuesday, 30 October at an event in New York. A refresh of the Mac lineup is a possibility, too.

PSA- It’s the last gasp of summer with daytime highs running to 33-34°C today through the weekend. Look for overnight lows of 22°C all week long. Our favorite weather app suggest we can expect a return to cooler fall weather starting Saturday.

Enterprise+: Last Night’s Talk Shows

It was another humdrum night on the airwaves, with no particular topic dominating the conversation.

Ration card holders have until 7 November to update their data or risk being purged from welfare rolls, Supply Minister Ali El Moselhy said during an appearance on El Hekaya with Amr Adib (watch, runtime: 2:46). He also reassured viewers that the price of state-subsidized bread will not be rising anytime soon (watch, runtime: 2:03).

Algeria’s ban on the niqab in public sector workplaces inspired House Rep. Ghada El Agami to propose a similar measure in Egypt. She told Masaa DMC that the she believes the full face veil has more cons than pros and framed it as a security issue. She said other MPs share her views. Azhar Scholar Khaled El Gendy, however, was against the move, saying that the niqab is a matter of personal preference (watch, runtime: 13:05).

Finance Minister Mohamed Maait was the subject of Eman El Hosary’s praise on Masaa DMC. The host lauded a recent speech he gave in Sharqeya, which she described as “inspirational,” specifically to the youth population, as the minister shared stories from his own childhood (watch, runtime: 5:24).

Meanwhile, Water Holding Company Chairman Mamdouh Raslan talked water conservation on Hona Al Asema (watch, runtime: 29:58).

Speed Round

Speed Round is presented in association with

** #1 IPO WATCH- State privatization program postponed to next year, lineup of companies on offer could change: The Madbouly government has pushed the start of the state privatization program to 2019 as Egypt’s capital market is roiled by the turbulence that has swept global emerging markets in recent months. A senior government official emphasized that cabinet is “completely committed to the program,” but cannot go to market with conditions as they stand.

The program could resume as early as 1Q2019 or as late as the start of the new state fiscal year in July. It all comes down to market conditions, our source said, saying cabinet made the decision to postpone the program after consulting with investment bankers.

A new lineup could be in the offing: The state could use the delay to tweak the list of (a) already-traded companies set to sell additional shares and (b) companies set to make an initial public offering under the program.

The state had hoped to raise as much as EGP 10 bn for the treasury from the program this fiscal year and is now reviewing was to find “alternative sources” for the funds, our source says.

** #2 Eastern Tobacco IPO postponed “indefinitely,” gov’t points to messy macro backdrop: Our source spoke just one day after the government announced that its sale of a 4.5% stake in cigarette maker Eastern Company has been postponed “indefinitely” after the company’s share price plunged 11.5%, The committee overseeing the state privatization program said in a statement (pdf) that Eastern’s share performance was set against a background that includes the emerging markets sell-off, high interest rates, the introduction of protectionist measures in various economies, and the looming trade war between the US and China. Regulations for the state privatization program bar any company from proceeding with a stake sale if its shares rise or fall beyond a threshold of 10% of its average value.

** #3 EXCLUSIVE- The government will be issuing eurobonds in USD, RMB, and JPY in 1Q2019 in a bid to diversify its sources of funding and attract new investors to Egypt’s debt market, a senior government official told us yesterday. The RMB and JPY issuances won’t take the form of ‘panda’ or ‘samurai’ bonds — which require regulatory approval from their respective countries — and will instead by RMB- and JPY-denominated eurobonds, the source said. Talks are currently ongoing with investment banks to determine the value of each issuance, but the government may be looking to raise as much as USD 4-7 bn, our source told us. Finance Minister Mohamed Maait had previously said that the government was hoping to issue USD 5 bn worth of eurobonds next year, which we were told is part of a plan to sell as much as USD 20 bn in FX- denominated debt between now and 2022. The news comes after Maait reported “very positive” sentiment on Egypt after meeting with investors in Seoul earlier this month.

** #4 M&A WATCH- BP talks to sell Egypt assets to SDX fail. SDX Energy has “terminated” talks to acquire BP’s Egypt assets after failing to reach an agreement, the company said in a statement on Thursday (pdf). SDX gave no color on why the talks broke down. SDX Energy announced last month that it was in open talks with BP to acquire “a significant package of [its] assets in Egypt.” It was not not immediately clear which assets SDX hoped to acquire, but the company said the transaction would take the form of a reverse takeover, allowing SDX entry to the London Stock Exchange’s main market. BP had been said to be shopping for buyers since at least March as part of a plan to sell USD 2-3 bn’s worth of maturing assets this year.

BP isn’t exiting Egypt: The global oil major plans to invest USD 2 bn in Egypt next year, BP North Africa Regional President Hesham Mekawi told Al Shorouk in an interview last month. Among the assets in which it is investing is its Raven field, which is part of its West Nile concessions in Fayoum and Giza. The Raven gas field is expected to come online in 2H2019, a source from the Oil Ministry official told Youm7 on Thursday. Production is expected to reach 350 mcf/d of gas.

** #5 INVESTMENT WATCH- CIRA to invest EGP 1 bn in expanding Badr University: Private-sector education provider Cairo Investment and Real Estate Development (CIRA) is planning to invest EGP 1 bn on developing a new campus for Badr University, CEO Mohamed El Kalla said, according to Al Mal. The first phase of the project is expected to cost EGP 450 bn and will see the build-out of four faculties, he said. El Kalla added that the company is weighing whether to build the campus in Upper Egypt or the Delta.

IPO proceeds, bank finance will back the expansion: CIRA plans to deploy part of the proceeds of its successful IPO earlier this month, which saw the company raise EGP 1.244 bn, said El Kalla. The firm also plans to call on earnings from real estate sales and other activities and could seek bank financing. El Kalla suggested that EFG Hermes, which took CIRA public, would be tapped to help put together the financing package.

** #6 INVESTMENT WATCH- Nestlé Egypt will inaugurate a new instant coffee factory in January, Trade and Industry Minister Amr Nassar announced on Thursday, according to a ministry statement. The statement does not provide details on the cost or location of the new facility, which will house eight production lines. Nestlé will direct the factory’s output both to the local and export markets. CEO Moataz El Hout had previously said the company is looking to increase its exports 20% y-o-y in 2018 through further expansion into North African markets.

Egypt to take on USD 45 bn in financing from Russia for Dabaa? Russian President Vladimir Putin offered to lend Egypt USD 45 bn to finance the construction of the Dabaa nuclear power plant, which will be built by Russia’s Rosatom, the Financial Times reports. Putin made public the offer during his annual foreign policy speech on Thursday, but offered no further detail. Russian Finance Minister Anton Siluanov told reporters on Thursday that Moscow may lend Egypt the money through Russia’s Sovereign Wealth Fund, according to Reuters Arabic. Egypt would apparently draw down the funds at the rate of USD 3-4 bn each year to support construction. News of the loan comes after the two countries signed a strategic cooperation agreement during President Abdel Fattah El Sisi’s visit last week to Moscow.

** #7 The central bank wants to take mobile phone records into account when credit scores are calculated: Mobile network operators could be forced to make records of bill payments on customer accounts available to state-backed credit rating agency iScore under an initiative that has the backing of the Central Bank of Egypt and Ministry of Communications and Information Technology, sources told Al Mal. The two institutions are looking into the regulatory and legislative changes necessary to make that possible.

Part of financial inclusion drive? Reading between the lines, the changes would, if enacted, be a prelude to the CBE’s drive to expand the availability of microcredit. With as few as one in every three Egyptians being ‘banked’ (the exact definition varies), the initiative looks set to have iScore assign credit ratings based on mobile phone and electricity bills and other indicators of creditworthiness even if the individual isn’t formally part of the banking system.

Background: CBE Sub-Governor for Payment Systems and Business Technology Ayman Hussein said last month that the CBE is looking at introducing nano lending — providing mobile-based cash loans — as part of the third phase of its mobile banking strategy. He had said that iScore would be required to provide credit ratings for users for the system to work.

** #8 Prosecutor General charges three former execs of the company once known as Tri-Ocean Energy with embezzling “USD 1 bn”: Prosecutor General Nabil Sadek referred three former executives from Tri-Ocean Energy (now known as Mog Energy) to a criminal court for prosecution on charges they embezzled as much as USD 1 bn. The case first made headlines last October, when it broke in Youm7. The firm’s former deputy chairman, Mohamed Al Ansari, was among the three arrested, according to Reuters, which cites state news agency MENA. The former execs are charged with allegedly funneling around USD 950 mn from the company’s accounts to their personal accounts through shell corporations, according to details of the allegations published in Al Mal. The three are reportedly being charged with a second count of embezzlement related to a USD 18.5 mn sum.

The USD 1 bn figure seems far fetched, even for an oil-trading business, which was Tri-Ocean’s primary focus at the time of the alleged crimes. There’s likely a message to the business community in prosecutors zeroing in on the USD 1 bn figure while moving ahead with a separate charge on a substantially more realistic USD 18.5 bn figure.

LEGISLATION WATCH- The Social Solidarity Ministry is expecting to present a draft of the new Social Security and Pensions Act to the Madbouly Cabinet as soon as ministry officials complete their final review of the bill, Deputy Minister Nevine El Qabbag told Al Shorouk. Under the new law, pensions (which are governed by their own law) would fall under the larger umbrella of cash subsidy programs, according to El Qabbag.

The law would also introduce two new cash subsidy programs, Igatha and Forsa (alongside the existing Takaful and Karama programs) in addition to amending the overall framework governing social welfare and pensions programs, according to El Qabbag. We had heard that the law would also guarantee the right to unemployment benefits and establish a new pension fund and is set to be presented to the House of Representatives during the current legislative term. Social Solidarity Minister Ghada Wali had said in June that the new law was with the Finance Ministry for review.

MOVES- Samsung Egypt Vice President Sherif Barakat (LinkedIn) will reportedly be leaving his post by early November, according to an unconfirmed story in Al Mal, citing sources close to the company, which is said to be looking to bring in a Korean executive to succeed Barakat.


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Up Next

Health Minister Hala Zayed and Tourism Minister Rania Al Mashat are scheduled to appear at the House of Representatives on Tuesday, Ahram Online reports. Reps. are expected to question Zayed about the quality of health services offered at public hospitals and rural medical centers. Al Mashat, meanwhile, will brief MPs on the government’s new overseas promotional campaign, which was announced earlier this month.

The 2018 Narrative PR Summit will take place at the Four Seasons Nile Plaza on Sunday, 28 October.

Image of the Day

Returning to the battlefield 76 years later: Six British veterans of the Second World War returned to El Alamein yesterday “to visit the desert battlefield on the 76th anniversary of the decisive Allied victory that marked an important step toward the eventual defeat of German and Italian forces in Africa in May 1943. … The battle began on the night of Oct. 23 1942 when Commonwealth forces from General Bernard Montgomery’s Eighth Army began driving back Field Marshal Erwin Rommel’s Panzerarmee Afrika, which had threatened to sweep across Egypt and into the Middle East.” Pictured are vets Alex Munro, 96, Joe Peel, 98, and Bill Blackburn, 98. Reuters has the story.

Egypt in the News

It’s a relatively quiet morning for Egypt in the foreign press, with no one story stealing the spotlight.

** #9 The UK press is going berserk over an alleged case of “body snatching” in which a family claims the body of a British man who died while playing in a pool on holiday was returned from Egypt missing its heart and kidneys. The story is getting play everywhere from the Daily Mail to the BBC and has made its way to New Zealand.

Over the weekend, France’s government rejected allegations by Amnesty International that it broke its own rules over arms exports by equipping Egypt with weapons, France 24 reports. French Defense Minister Florence Parly told a Senate committee that French weapons were destined to Egypt’s military and not the police. “If Egypt uses hardware that was exported long ago […] against its own civilian population, that was not our objective,” Parly told the Foreign Affairs and Defense Committee. Amnesty International had claimed earlier in the week that analysis of open-source multimedia content showed French-made hardware being used against civilian protesters.

Other headlines worth noting in brief include:

On Deadline

Economic measures need more good publicity: The government needs to be more transparent about its economic reform measures in order to navigate safely out of the current transformative phase, Mahmoud El Alaily writes in Al Masry Al Youm. He argues that people need to be better informed about the different decisions and measures that are being adopted in order to understand in full why they were necessary and how far reaching their impact will be. More transparency would also put an end to rumor and speculation swaying public opinion, he says.

Worth Watching

** #10 The EM Zombie Apocalypse for Dummies: The emerging markets sell-off has spooked investors as some currencies take a nosedive, but understanding what’s happening is not all that difficult if you follow the historical pattern, the Financial Times’ Martin Sandbu says.

We’ve seen this happen before: Recessions in developed countries lead to expansionary policies and lower interest rates. Investors, in turn, look to EMs in search of higher yields, creating debt-based growth. And as the developed world (the Fed especially) starts raising interest rates, “the money pulls back and causes a crisis. This happened in 1982, it happened in 1994, and ‘95.”

That’s not to say all EM investments have gained a bad rep. Investors will not shy away from emerging economies with sound fundamentals and that are situated to handle debt and continue to grow (hint: Turkey and Argentina don’t fit the bill here). However, even with the best policies — rejecting a pegged currency, keeping FX borrowing at a maintainable level, and maintaining a generally balanced current account — some EMs are vulnerable to “self-fulfilling panics” that are fueled by speculation of contagion (watch, runtime: 3:28).

Diplomacy + Foreign Trade

Egypt and the EU sign EUR 135 mn in SME financing, migration agreements: Investment and International Cooperation Minister Sahar Nasr signed EUR 135 mn in funding agreements with Director-General for EU Neighborhood Policy and Enlargement Negotiations Christian Danielsson on Thursday, a ministry statement said. The agreement will see the EU provide EUR 75 mn for SMEs venture capital funding, and EUR 60 mn aimed at curbing illegal immigration in Egypt. The latter is funded by the European Emergency Fund for Africa, including contributions from Germany and the International Organisation for Planning, said Nasr.

Funding comes amid EU summit on migration: The funding highlights Egypt’s growing importance to the EU as a partner to help curb illegal migration from Africa and ME to Europe just as a new European Council meeting got underway on Thursday to discuss the issue. Egypt’s emerging role — championed by European Council President Donald Tusk and Austrian Chancellor Sebastian Kurz — could see the country’s coast guard patrol the waters off Libya and take any rescued people back to Africa, says the AP. The policy could be expanded to other African nations.

UNIDO to launch EUR 2 mn project to improve Egyptian tomato quality: UNIDO will be launching a EUR 2 mn, three-year project in January to improve the quality of Egyptian tomatoes and develop the crop’s value chain, UNIDO Egypt Director Giovanna Ceglie told MENA. The project, which UNIDO will implement with the agriculture and trade and industry ministries, is meant to increase production levels and help locally-grown tomatoes reach international quality standards to make them viable for export to Europe, Ceglie said.

El Sisi, Al Bashir to meet in Sudan this week: President Abdel Fattah El Sisi is visiting Khartoum this Thursday to meet with Sudanese President Omar Al Bashir, Sudan’s ambassador to Cairo Abdel Mahmoud Abdel Halim said, according to Sudan Tribune. The two countries are expected to sign a number of agreements in fields including trade, agriculture, oil and gas, and health and education, Abdel Halim said. El Sisi will also attend a meeting of the Egyptian-Sudanese Higher Committee.

In other news from our southern neighbors, Egypt’s new ambassador to Ethiopia presented his credentials to Ethiopian Foreign Minister Workneh Gebeyehu on Friday, according to Youm7. Osama Abdel Khalek’s appointment comes as relations between the two countries begin to mend after months of strain caused by the Grand Ethiopian Renaissance Dam (GERD).


Electricity Ministry, Elsewedy to cancel four-year-old wind contract

The Electricity Ministry and Elsewedy Electricity agreed to cancel a four-year-old contract to build six wind power plants producing 600 MW and sell power to consumers under an Independent Power Producer (IPP) framework, Elsewedy said in a bourse statement (pdf). The company had won a 2012 tender to develop the plants, signing the contracts for them in 2014. Due to changes to the government’s renewable energy policies, frameworks and the new projects having been tendered since the signing, both sides agreed to end the contract. The EGX statement was prompted by an article in Al Mal, which portrays the cancellation as a result of delays by the company in implementing the project.

Phase one of seismic mapping of Red Sea completed

The first phase of the seismic mapping of energy and mineral resources in the Red Sea — a precursor step to tendering exploration concessions there — has been completed, Oil Minister Tarek El Molla said on Thursday, according to Al Shorouk. Tendering concessions there to the private sector is one of the ministry’s key agenda platforms to expanding investment in the sector.

Production begins at Rashid Petroleum Company’s West Nile Delta field 9B well

Shell-EGPC JV Rashid Petroleum Company has begun production from its oil well at the West Nile Delta field 9B, Chairman Sabry El Sharkawy said. The well’s initial output is estimated at 20 mcf/d and the entire project is set to come online by 2H2019, producing up to 400 mcf/d according to an Oil Ministry statement.


Suez Canal Authority drops fees on port of East Port Said

The Suez Canal Authority reduced transit and mooring fees on cargo ships docking and transiting through the port of East Port Said, in a bid to draw more shipping to the port. Ocean Alliance — which includes CMA CGM Group, APL, Evergreen, and China’s COSCO Shipping — had decided to suspend operations at East Port Said in August due to high costs. An alliance made up of Yang Ming, Hapag-Lloyd, K Line, Mitsui O.S.K. Lines, and the NYK Group had retired from East Port Said last year after the government decided to raise fees by nearly 100%. Egypt has been offering discounts and other incentives to attract more traffic to its ports, with President Abdel Fattah El Sisi suggesting that port fees would be reduced to make them competitive.

EgyptAir, KMK, SPH sign agreement to develop cargo zone in Cairo Int’l Airport

EgyptAir has signed an agreement with UAE-based KMK Investment and US-based Safe Ports Holding (SPH) to establish a cargo logistics zone at Cairo International Airport, company Chairman Ahmed Adel said. KMK will complete and run the project in partnership with SPH, who will also provide insurance services. There was no mention of the project’s expected cost or timeline.

Fas Energy reportedly completed USD 75 mn 50 MW solar power plant under FiT phase one program

Fas Energy, a subsidiary of Saudi Arabia’s Al Hokair Group, reportedly completed a 50 MW solar power plant under phase one of the feed-in tariff program for USD 75 mn, an unnamed official from the New and Renewable Energy Authority said, according to Al Mal. We reported earlier this month that the government was planning to fine Fas for delays in delivering its solar power plant at the Benban complex in time.

Basic Materials + Commodities

GASC issues first international rice tender

The General Authority for Supply Commodities (GASC) held Egypt’s first international rice tender on Thursday, with a request for 25,000 tonnes of short or medium grain milled white rice, Reuters reports. The tender closes on 12 November, with delivery dates in January and February. “Every supplier should submit four samples, each two kilograms, of their rice alongside their offer for testing,” GASC Vice Chairman Ahmed Youssef said. One of the samples will be sent to the Ministry of Agriculture for a cooking test to determine “how suitable the rice is for our consumers’ taste.” This is Egypt’s first tender since enacting regulations to limit domestic production to conserve water.


Geyushi plans to set up production line to manufacture FAO cars

Egypt’s Geyushi Motors aims to set up a production line to manufacture FAO cars, said sources from Egypt Automotive. The sources did not disclose the expected investment value of the planned production line. Geyushi had signed a strategic cooperation agreement with China’s FAO last year to sell its cars in the domestic market.

Real Estate + Housing

NUCA grants developers one-year grace period to complete residential, service projects

The New Urban Communities Authority (NUCA) has agreed grant real estate developers a one-year grace period to complete residential and service projects that are 95% complete without facing fines for missing the completion deadline, Al Shorouk reports.


Egypt announces details on new phase of charter flights incentive program

The second phase of the Tourism Minsitry’s charter flight incentive program will run from November 2018 to the end of April 2020, according to a Tourism Ministry announcement picked up by the local press. Airlines that send between 2-25 trips to Hurghada per week will receive a cash payout of USD 2,000-3,500 per trip on flights that are 80% full, while those that send 2-25 trips a week to Sharm El Sheikh that are at least 70% full will receive USD 3,000-4,000 per trip. The minimum pax for trips to Taba, Luxor, Aswan, Marsa Matrouh, and Alamein was set at 65% with payouts ranging from USD 3,500-4,500 per flight.

Telecoms + ICT

TE signs USD 500 mn syndicated loan

Telecom Egypt has signed for a USD 500 mn medium-term syndicated loan, which will be used to support its capital and operational expenditure, and refinance an existing short-term facility, the company said in a statement on Thursday (pdf). First Abu Dhabi Bank and Mashreq Bank were mandated as Joint Bookrunners and Mandated Lead Arrangers of the facility.

Automotive + Transportation

Trial runs for phase 4A of Cairo Metro Third Line kick off

The Transport Ministry began trial operations on a section of phase 4A of Cairo Metro Line 3 yesterday, according to a ministry statement. The ministry will continue running trial operations on different sections of the phase for two months. The story got some air time on Hona Al Asema (watch, runtime: 16:50).

Banking + Finance

Fawry receives SME lending license

E-payments firm Fawry received its license to lend to small- and medium-enterprises earlier this week, the firm’s MD Mohamed Okasha tells Al Mal. Fawry’s SME lending arm, which will begin operations early next year, will focus initially on lending to smaller retailers, he added.

Sarwa Capital approves EGP 700 mn issued capital increase

Sarwa Capital’s board of directors approved on Wednesday increasing the company’s issued capital by EGP 700 mn through new shares to existing shareholder Consolidated Financial Holdings at the IPO price of EGP 7.36 per share, the company said in a bourse disclosure (pdf).

HDD BoD approves EGP 1.2 bn loan offer from gov’t bank

State-owned Heliopolis Housing and Development’s (HDD) board of directors approved on Wednesday an offer from an unnamed government bank for a EGP 1.2 bn long-term loan, according to an EGX disclosure (pdf). The company will use the funds to finance utility and infrastructure works at its New Heliopolis project, and cover interest expenses for other shorter-term loans.

Other Business News of Note

Trading on AMOC GDRs on the LSE began on Thursday

Trading on 50,000 global deposit receipts of Alexandria Mineral Oils Company (AMOC) began on Thursday, the company said in a bourse statement (pdf).

Egypt Politics + Economics

Gov’t denies detaining former lawmaker Mustafa El Nagar

Authorities have denied that former Rep. Mustafa El Nagar was forcibly disappeared and detained in Egypt, according to a State Information Service statement. El Nagar is reportedly a fugitive and was charged to three years in prison over charges of insulting Egypt’s judiciary. The former lawmaker’s wife claimed last week that El Nagar had been missing for three weeks and was believed to have been detained by authorities.


EFA is trying to “compromise” with Mo Salah over image rights dispute

The Egyptian Football Association (EFA) is trying to reach a “compromise” with national footballer Mohamed Salah on their image rights dispute from earlier this year, EFA board member Hazem Emam said, according to the National. The EFA maintains that it has certain rights it also needs to protect, and is close to working out an arrangement with Salah that will end the dispute, according to Emam, who did not get into specifics. Salah had a falling out with the association earlier this year after state-owned mobile operator WE used Salah’s picture for ads without his permission, violating his contract with Vodafone and nearly costing him mns.

Egypt lands seventh bronze at Buenos Aires Olympics with futsal win over Argentina

Egypt won its futsal match against Argentina with a final score of 5-4 at the Buenos Aires Youth Olympics on Thursday, according to a championship release. The win, which Mohamed Talaat made possible by scoring four goals after Argentina secured a 3-0 lead, landed Egypt its seventh bronze medal and its 12th overall at the youth Olympics (watch game highlights, runtime: 2:00).

EOC bans Mortada Mansour for two years

The Egyptian Olympic Committee (EOC) decided to officially ban Zamalek Football Club chairman Mortada Mansour for two years from all club-related sporting events for making derogatory comments about officials from the Confederation of African Football (CAF), according to KingFut. Earlier this month, the Supreme Media Council banned Mansour from making appearances all media platforms. CAF had also banned him for one year and fined him USD 40k for the same reasons.

On Your Way Out

Cairo’s centuries-old medieval aqueduct is getting a facelift as part of a EGP 6 bn plan to restore the area near the Citadel, which has been damaged by informal housing and a growing number of unlicensed tanner workshops, Gulf News reports. The restoration project includes relocating the workshops away from central Cairo, as well as a long-term plan to rehabilitate the aqueduct’s water wheels and infrastructure.

The Market Yesterday

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

EGX30 (Thursday): 13,644 (-1.2%)
Turnover: EGP 626 mn (11% below the 90-day average)
EGX 30 year-to-date: -9.2%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 1.2%. CIB, the index heaviest constituent ended down 1.8%. EGX30’s top performing constituents were Juhayna up 4.5%, Egyptian Resorts up 1.5%, and AMOC up 1.4%. Thursday’s worst performing stocks were Emaar Misr down 4.6% EFG Hermes down 3.4%, and Elsewedy Electric down 3.3%. The market turnover was EGP 626 mn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -13.8 mn
Regional: Net Short | EGP -6.7 mn
Domestic: Net Long | EGP +20.5 mn

Retail: 54.0% of total trades | 53.4% of buyers | 54.7% of sellers
Institutions: 46.0% of total trades | 46.6% of buyers | 45.3% of sellers

Foreign: 22.5% of total | 21.4% of buyers | 23.5% of sellers
Regional: 6.2% of total | 5.7% of buyers | 6.7% of sellers
Domestic: 71.3% of total | 72.9% of buyers | 69.8% of sellers

WTI: USD 69.12 (+0.68%)
Brent: USD 79.78(+0.62%)

Natural Gas (Nymex, futures prices) USD 3.25 MMBtu, (+1.63%, November 2018 contract)
Gold: USD 1,228.70/ troy ounce (-0.11%)

TASI: 7,648.15 (-0.13%) (YTD: +5.84%)
ADX: 4,988.74 (+0.64%) (YTD: +13.42%)
DFM: 2,757.73(+0.59%) (YTD: -18.17%)
KSE Premier Market: 5,172.99 (-0.15%)
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Mid-October: IMF delegation due in town for its fourth review of Egypt’s economic reform program.

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, Cairo.

November: A delegation of French pharmaceutical and medical equipment companies is set to visit Egypt sometime in November to explore potential investments, according to a Trade Ministry statement.

01-02 November (Thursday-Friday): Annual Middle East Conference on Business Angel Investment, El Gouna, Egypt

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.

17-19 November (Saturday-Monday) ElectricX-Energizing The Industry, Egypt International Exhibition Center, Cairo, Egypt

20 November (Tuesday): Prophet’s Birthday (TBC), national holiday.

22 November (Thursday): US Thanksgiving.

End of November: A delegation from the Egypt-Greece Business Council will visit Athens at the end of November to promote investment, the council’s chairman, Hani Berzi, said.

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.

13-15 December (Thursday-Saturday): Forum on “The Role of Digital Financial Communication and Solutions in Enhancing Financial Inclusion,” Sharm El Sheik, 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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