Monday, 22 October 2018

Your morning must-read: HSBC is bullish on Egypt through 2030

TL;DR

What We’re Tracking Today

What’s next? A license to obtain licenses? The House of Representatives seems set to go on a licensing and regulation spree as MPs kicked off their first general assembly of the fall legislative term yesterday. Our elected representatives sent to committee a bill that would introduce new licensing requirements for physicians (and tweak med school curriculum by placing new emphasis on clinical experience). Meanwhile, a private-member’s bill would make it necessary to obtain a license to practice the world’s second-oldest profession: advertising and marketing. The news came as the Supreme Media Council announced yesterday temporary licensing requirements for news websites. We have chapter and verse in Speed Round, below.

Stock market slumps on delay in privatization program: The benchmark EGX30 closed down 0.9% yesterday on paper-thin turnover as just EGP 399 mn worth of shares changed hands. (For those keeping track at home, that means turnover was 43% percent below its already-anemic 90-day average.) Reuters said the drop is a reaction to news that the government has decided to postpone its privatization program until 1Q2019 at the earliest. “The news of the offerings’ postponement is certainly one of the reasons for the (index’s) fall today because there was a confirmation for the offering and a set timetable,” said said Naeem Brokerage’s Ibrahem Elnemr. Sources told us earlier this week that the Madbouly Cabinet was completely committed to the program, but had decided to postpone it until there’s clarity on where sentiment is heading after the global emerging market sell-off. Officials may also use the time to tweak the list of companies that will be on offer. Eastern Company was meant to pilot the program with a 4.5% stake sale this month.

A US business delegation with nearly 50 participating companies is arriving in town tomorrow for a three-day visit to look into prospective avenues for new business in Egypt. AmCham, the US Chamber of Commerce, the US-Egypt Business Council, and the Egypt-US Business Council will hold ministerial panel discussions on Wednesday, 24 October and Thursday, 25 October featuring Prime Minister Moustafa Madbouly and nine other members of cabinet. Read the presser on the delegation here (pdf).

Egypt will receive a fifth USD 2 bn tranche of its USD 12 bn extended fund facility from the IMF at the end of December, Finance Minister Mohamed Maait told Youm7. An IMF delegation has been in town since Thursday to review the country’s progress on economic reforms.

CIT Minister Amr Talaat will present his ministry’s plan to the House Communications Committee today, Rep. Ahmed Badawi said, according to Al Mal. Talaat’s priorities are reported to include improving quality of telecom and internet services in Egypt and fostering entrepreneurship and human capital development.

Khashoggi killing prompts Saudi stock sell-off: Foreigners sold around USD 1.07 bn of Saudi stocks last week in “one of the biggest selloffs since the market opened to direct foreign buying in mid-2015,” according to Reuters. The sell-off was sparked by the death of journalist Jamal Khashoggi, who Saudi Arabia admitted was killed at its consulate in Istanbul. Khashoggi’s death has made investors wary of “being linked to the country,” says the Financial Times, which puts outflows at USD 650 mn last week. The Tadawul closed up 0.2% yesterday, Bloomberg reports.

We’re not alone: “Global equity rout derails IPOs from Spain to Hong Kong, India,” Bloomberg writes atop a quick recap of who is going to market and who’s pulling back amid volatility in global equity markets. The one bright spot? Thailand, which is bucking “the global pessimism gripping emerging markets as it takes on its two largest initial public offerings of the year, one of which could tie for its biggest public equity float on record,” the FT explains.

Are we looking at a grim 2019? “The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who said the U.S.-China trade war and tightening financial conditions would trigger the next downturn…A majority out of nearly 150 economists said the top two triggers for the next global downturn were a further escalation of U.S.-Sino trade tensions, and tightening in financial conditions driven by a deep sell-off in global equities or a rapid rise in government bond yields.”

The antidote? Beer. Or so we expect Mikkel Borg Bjergso would say. The former teacher quit his day job and in just five years built a global brewing empire, “opening bars from San Francisco to the Faroes and spawning a growing lifestyle brand.” His latest business partner? Rick Astley. Yes, that Rick Astley. If you love entrepreneur success stories as much as we do, you need to read the Financial Times profile: The king of beer: how a former teacher created a global brewing empire.

You think we have bureaucracy? You’ve never discovered a skull in your backyard. In Canada. Kafka has nothing on the province of Ontario, Ian Brown reports for Toronto’s Globe & Mail.

TIME CAPSULE- We hit peak ‘grunge’ 25 years ago this week (we’re using single quotes around the word as it never was a monolithic sound) as Nirvana released In Utero and Pearl Jam its sophomore effort Vs. within a few weeks of each other. The Washington Post has an oral history to mark the anniversary, but anyone truly passionate about the “Seattle scene” will want to turn to Mark Yarm’s classic Everybody Loves Our Town: An Oral History of Grunge.

PSA- The mercury is going to be solidly in the 32-33°C range in the capital city through Thursday with overnight lows of 23°C before things cool off again at the weekend, according to the meteorological authority and our favorite weather app.

Enterprise+: Last Night’s Talk Shows

The story of a British tourist who died in Egypt and went home missing a heart and kidney was front and center on what was an otherwise bland night on the airwaves.

Egypt has denied reports claiming that organs were stolen from the body of a British who died in Hurghada, as some UK newspapers alleged over the weekend. The State Information Service said authorities conducted a standard autopsy on David Humphries’ body to determine the cause of death and extracted “samples” for testing, including tissue from the kidney, as well as Humphries’ heart, which has been preserved in formalin. Reham Ibrahim dissected the statement on Hona Al Asema (watch, runtime: 4:54).

British media took advantage of the fact that Humphries’ family was not informed of the autopsy beforehand, SIS boss Diaa Rashwan told Amr Adib on El Hekaya. He accused outlets, including the Sun and Daily Mail, of targeting Egypt with a smear campaign and confirmed that the organs will be flown to London today after the examiners complete their tests (watch, runtime: 4:43 and here, runtime: 3:51). Humphries was admitted to the hospital twice during his stay in Hurghada, both times complaining of chest pains, said Mohamed Samy, who runs a private hospital. He told Masaa DMC’s Eman El Hosary that doctors tried and failed to resuscitate Humphries when he was brought in the second time (watch, runtime: 6:32).

Former MP Mustafa El Nagar is not being held by the authorities, Rashwan told Adib on El Hekaya. 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. The SIS said that Nagar is on the run from a three-year prison sentence for insulting the judiciary (watch, runtime: 5:11).

Things are going smooth for Al-Wafd party, according to party leader Bahaa Abu Shoka, who downplayed rumors of a rift within the ranks, telling Eman El Hosary that there have only been differences in opinion, rather than discord (watch, runtime: 6:30).

Meanwhile, Reham Ibrahim delved deep into a discussion of the new smart card system for farmers, which is expected to be implemented soon in a bid to tighten control over exports (watch, runtime: 12:37).

Speed Round

Speed Round is presented in association with

** #1 Your morning must-read: HSBC is bullish on Egypt through 2030. Egypt was ranked 15th out of 75 countries in HSBC’s long-term future growth report (pdf). The report, which measures the growth trajectory of these 75 countries through to 2030, models a country’s catch-up potential, population (size and shape), human capital (education and healthcare), politics, openness, impact of climate change and technology and the effects these factors have on GDP.

Egypt’s GDP is projected to grow by an average 4.6% through to 2030, according to the report. On a short-term basis (2018-2023), it’s not as rosy, with GDP growth projected to come in at 3.8%. HSBC sees growth picking up to an average of 5.0% in 2023-2-28 before accelerating to 5.6% in 2028-2033. In USD terms, Egypt’s GDP is expected to nearly double to USD 0.4 tn in 2030 from USD 0.2 tn in 2018. Egypt’s GDP growth hit 5.3% in FY2017-18, with the government projecting it to rise to 5.5% in FY2018-19.

The report projects that Egypt’s population will rise to 119.7 mn by 2030, from a current 99.4 mn.

The catch? Egypt is one of the countries most at risk of not meeting projections: Egypt was named among the countries where HSBC economists see some risks in meeting their long-term projections. Along with Morocco, Jordan, and Tunisia, the report sees high youth unemployment as posing a risk to Egypt’s ability to harness its demographic potential. Egypt and other EMs are also projected to be the most sensitive to climate change and environmental risk factors.

The report is upbeat about long-term prospects for EMs in general: The report concludes that emerging markets are the ones to achieve best growth in 2030. “EM countries will account for roughly 50% of global GDP by 2030, which represents a seismic shift from half that in 2000. As these countries develop and the nature of growth becomes more domestically oriented and consumer-led, such as we are seeing in China, the influence on developed markets will rise,” says the report. Over the coming decade or so, roughly 70% of global growth will be from EMs. Bangladesh, India, Ethiopia, Pakistan, and the Philippines were the report’s top five in terms of GDP growth trend through to 2030.

Fitch Group’s BMI Research has revised its forecast for real GDP growth in Egypt for FY2018-19 to 5.4% from its earlier estimate of 5%, citing the country’s surging natural gas sector, the firm said in its November 2018 North Africa report. It also raised its forecast for the following year to 5.6% from 5.4%. “This comes on the back of stronger-than-anticipated growth of 5.3% in FY 2017-18, primarily boosted by increases in net exports and investment — a trend that we expect will remain in place over the quarters ahead,” the report said.

Thank the gas fields: The firm’s energy team expected production of the supergiant Zohr field to reach maximum capacity in the coming two years. Along with other finds, it will see Egypt with surplus gas by 2019. The report also cited the recovery of tourism as a plus.

Inflation and rates: BMI expects inflation to remain high on the back of further fuel subsidy cuts (with the resultant pressure on vulnerable socioeconomic groups) and for interest rates to also remain high, placing constraints on loan growth. It revised its forecast for the CBE rates, expecting the year to end with overnight lending and deposit rates of 16.75% and 15.75% respectively from 15.75% and 14.75% previously. It expected one last cut to take place later this year.

** #2 Maait confirms Egypt is considering RMB-, JPY-denominated bonds next year: Finance Minister Mohamed Maait confirmed our exclusive report from Sunday, telling Bloomberg in an interview yesterday that Egypt is considering JPY- and RMB-denominated bond issuances in 1Q2019, alongside USD offerings, in a bid to diversify its sources of funding and attract new investors to Egypt’s debt market. “We want to diversify our debt instruments and currencies. We aim to have a basket of bonds in several currencies,” the minister said. The size and exact schedule for the sales is yet to be determined, as “Asian countries have certain requirements in the bonds’ issuance prospectus and we should meet these requirements before issuing the bonds,” he added, without elaborating.

Our sources had told us that he government may be looking to raise as much as USD 4-7 bn from the issuances. We had also heard that the government could be looking to sell up to USD 20 bn in FX-denominated debt between now and 2022. Maait reported “very positive” sentiment on Egypt after meeting with investors in Seoul earlier this month.

** #3 LEGISLATION WATCH- Welcome to the great licensing binge of 2018. While committees have been at work for weeks now, the House of Representatives convened for its first general assembly of the new legislative season only yesterday. Licensing and regulation are clearly high on the minds of our elected representatives, whether it’s in the form of cabinet-backed proposals or private-member bills (the latter of which are much less likely to see the light of day).

One MP thinks the best way to guarantee truth in advertising and marketing would be to license the profession. Rep. Mohamed Farag Amer has drafted a bill that would require individuals working in advertising or marketing to obtain a license to practice, Amer told Egypt Today yesterday, suggesting it’s the best way to bring the profession under control. If enacted, the law would set up an Advertising Syndicate which would take charge of issuing licenses. Open Photoshop or write a line of ad copy without a license? Amer would like you to fork over a fine of up to EGP 100k — and go to jail for up to six months.

Somewhere out there, Ol’ Smileyface is grinning from ear to ear, just imagining all the “inappropriate” Ramadan ads that will never be made.

Meanwhile: Physicians would have to renew their medical licenses every five years if legislation backed by cabinet goes through. The bill, which is now headed for committee review after having received preliminary approval from the House general assembly yesterday, would see medical practitioners required to submit documentation proving they have engaged in 120-150 hours of professional practice. In addition to hours in practice, MDs could claim time spent on medical research as well as continuing education initiatives such as conferences and workshops, Higher Education Minister Khaled Abdel Ghaffar told the assembly yesterday.

The proposed amendments would also start to nudge med school curriculum toward the practical by cutting study years at state-run medical schools to five years from a current six and requiring that graduates complete two-year rather than one-year, residency programs as a requirement of licensing. The amendments are part of efforts to reform Egypt’s healthcare and medical institutions, House spokesperson Salah Hasaballah told Al Hayah Al Youm (watch, runtime: 6:46).

Also yesterday, House Speaker Ali Abdel Aal ordered the establishment of a sub-committee to review the law regulating medical research and clinical trials. The law had passed during the previous legislative session, but President Abdel Fattah El Sisi refused to give his sign off, citing concerns over several of its clauses. Among those are provisions that set harsh penalties for the transfer of human research samples outside of Egypt without government approval, which El Sisi said could be problematic for future scientific exchange with other countries.

The assembly reconvenes today to continue discussions of proposed amendments to the Education Act, Youm7 says. The last we heard of this bill was back in 2016. The bill is expected to make changes to teachers’ salary structure and further the government’s goals for educational reform.

REGULATION WATCH- Supreme Media Council announces temporary licensing regs for news websites that set permit fees at EGP 50k every five years: News websites whose capital exceeds EGP 100k will have to pay a EGP 50,000 licensing fee every five years, according to new regulations the Supreme Media Council announced yesterday. Applicants for news website permits will need to submit a request to the council that identifies the website’s sources of funding, its editorial policy, language of publication, organizational structure, as well as its virtual and physical addresses, council undersecretary Abdel Fattah El Gebaly said yesterday, Al Shorouk reports. Non-registered websites have two weeks to comply with the new regs as of yesterday, while registered sites will have six months to fall in line.

Background: The new guidelines will be in effect only until the executive regulations to second part of the Press and Media Act — which President Abdel Fattah El Sisi ratified in September — are passed, El Gebaly said. The law had established the regulations and guidelines for working in the press and media and introduced provisions that make it mandatory for news websites to apply for permits and abide by laws that govern other press institutions. Supreme Media Council head Makram Mohamed Ahmed phoned into Hona Al Asema last night to discuss the new regs (watch, runtime: 8:05).

** #4 Metro ticket prices could rise again, and the House is not happy: A fresh round of ticket price hikes for Cairo Metro riders could be coming soon to help sustain the “costly but necessary” maintenance of the rails, Transport Minister Hisham Arafat hinted on MBC Masr (watch, runtime: 04:09). The minister said the decision would not be taken without thorough studies and stressed that it would be cost-beneficial in the long run to ensure the lines do not break down. Arafat has previously said that tickets would not be raised until the service quality was significantly improved.

Will the price changes only affect new lines? Any move to raise ticket prices would only be applicable to newly constructed lines, and would not affect lines 1 and 2, Arafat said in a separate phone-in to Hona Al Asema (watch, runtime: 16:50). The ministry had begun trial operations on phase 4A of Cairo Metro Line Three on Saturday, which will take around two months to complete.

Parliament is not at all happy at the prospect of higher prices: The House of Representatives apparently threw a fit over Arafat’s comments. Any move to increase ticket prices would not receive House approval, Rep. Mohamed Abdullah told Al Mal, pointing to the stagnation of many citizens’ wages in a high-inflation environment. Rep. Amr El Gohary also argued that the metro would not be running at a loss if the system were being managed efficiently. Metro tickets were last raised in May, with the ministry introducing a distance-based tier pricing system. The hike sparked small but rare protests.

** #5 Are the Russians finally going to life their ban on direct flights to the Red Sea? A Russian aviation security delegation will reportedly be in town this week to inspect security measures at Sharm El Sheikh and Hurghada airports, sources at the Sharm airport said yesterday, according to Al Masry Al Youm. No further details were provided. During a meeting with President Abdel Fattah El Sisi in Moscow last week, Russian President Vladimir Putin said that flights to both airports — which have been grounded since the 2015 Metrojet crash — would resume “in the nearest time,” but gave no indications as to the timeline. The State Information Service had announced before the meeting, however, that both leaders would reach an agreement that would pave the way for the resumption of direct flights from Moscow to the Red Sea destinations. Direct air travel between Cairo and Moscow resumed last April.

** #6 The author of a forthcoming book critical of Egypt’s economy is said to have been arrested for allegedly “publishing false news,” Reuters reports, citing security officials and the author’s wife. Abdel Khalek Farouk is the author of “Is Egypt Really a Poor Country?”, draft copies of which have allegedly been seized from his publisher, the newswire reports.

In other security news, the House of Representatives extended the nationwide state of emergency for an additional three months in a vote yesterday, according to a cabinet statement. President Abdel Fattah El Sisi proposed the renewal last week.

IPO WATCH- Nozha Group considering IPO: Real estate and education investment holding firm Nozha Group is considering an IPO and is currently shopping for investment bankers to lead the transaction, CEO Abdallah Elmaghrabi told Al Mal. Elmaghrabi did not specify a timeframe for the offering or disclose which banks are in the running for the adviser position.

The company is also looking to invest EGP 3 bn in the tourism and real estate sectors in Cairo and Ras Sudr, he added. The investments will be channeled toward the company’s TIME Nozha Beach resort in Ras Sudr, which it plans to inaugurate in December. Expansion work on the resort will continue between 2019-2021 to add another 250 hotel rooms.

M&A WATCH- Suez Cement to hire financial advisor for valuation of white cement plant: Suez Cement’s board of directors signed off on the hiring of an independent financial advisor to come up with a fair value report on the Helwan Cement-owned white cement plant that it had agreed to sell to Emaar Industries, according to an EGX disclosure (pdf). Suez had agreed last month to sell the Minya plant, owned by subsidiary Helwan Cement, to Emaar Industries. The company’s general assembly will convene on 4 November to sign off on the sale agreement.

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

** #7 IFLR MENA awards 2018: Mona Zulficar wins lifetime achievement; Sharkawy & Sarhan Egyptian law firm of the year: The International Financial Law Review (IFLR) held its Middle East 2018 awards in Dubai last Wednesday. Mona Zulficar, the founding partner of Zulficar & Partners, became both the first Egyptian and the first woman to win IFLR’s lifetime achievement award, recognizing a storied career that has so far spanned more than 30 years. Zulficar was recognized her role in multiple market firsts, including the first public-private partnership (PPP) contract in Egypt and Egypt’s first leveraged buyout. The selection committee also nodded to her role in Egypt’s largest M&A to date — the USD 13 bn sale of Orascom’s building materials arm to Lafarge. Sharkawy & Sarhan won Egypt law firm of the year and was twice nominated for transaction of the year for two project finance transactions: the ACWA Power Scatec Solar feed-in-tariff solar projects. You can read the IFLR handout on Zulficar here and Sharkawy & Sarhan’s announcement here.

EARNINGS WATCH- Dairy products and juice producer Juhayna reported net profits of EGP 120 mn in 3Q2018 (+83% y-o-y) on revenues of EGP 1.9 bn (+15%), the company said in its earnings release (pdf). The company pointed to tight cost discipline as a key factor in its bottom-line performance.

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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. MPs 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.

Egypt in the News

It’s a slow news morning for Egypt in the international press. TechCrunch (of all outlets) is out with “Egypt and Thailand: When the military turns against free speech,” while a Reuters report about the detention of the author of a book critical of the economy is getting wide pickup. The House’s vote yesterday to extend the state of emergency for three more months is also getting attention.

Otherwise, it’s a mixed bag of nuts, with lots of attention in the UAE’s The National:

  • The National released a photo gallery of tourists climbing the 2,285 meter-high Mount Sinai in “high spirit” to watch the sunrise and visit the monastery of Saint Catherine.
  • Egypt holds promising opportunities in renewable energy, which will reduce dependency on fossil-fueled power plants, says ESI Africa.
  • The capture of terrorist Hisham El Ashmawy could encourage more militants to join the insurgency group he headed, rather than incapacitate the group, Colin Freeman writes for the National.
  • Russia’s growing role in the region signals the “return to a Cold War era in which Cairo was Moscow’s closest and most strategic Arab ally,” according to The National.

On Deadline

Egypt’s new healthcare law should include provisions that guarantee access to medication, Alaa Ghanam writes in a column for Al Shorouk. He argues that one way to do that is to pass policies that would boost the local pharma industry’s performance, by setting quality standards for the industry, promoting scientific research, and setting a clear strategy for imports and exports of meds. Because pharmacare? That ain’t gonna work, right?

Worth Reading

** #8 How a Colombian orphan got away with pretending to be a Saudi prince for 30 years: From dressing his pet chihuahua in designer clothes to sporting a nine-carat diamond ring, Prince Khalid bin al-Saud’s (yes, “bin al-Saud”) wealth was never called into question for over 30 years. His true identity, however, was discovered last year after he was arrested at JFK for committing fraud and impersonating a foreign official. The fake “prince” was discovered to be Anthony Enrique Gignac, a Colombian orphan who had been adopted by an American family at age 5.

His life as a con man began long before he adopted Prince Khalid’s identity. At age 17, Gignac “was caught masquerading as ‘Prince Adnan Khashoggi,’ the notorious Saudi arms dealer, who was then the world’s richest man.” Over the following several years, Gignac was in and out of jail for racking up fraudulent credit card charges and swindling investors out of cash for ventures that didn’t even exist. Gignac’s storied history of fraud is spelled out in great detail in a lengthy but fascinating piece by Mark Seal for Vanity Fair.

Worth Watching

A Japanese bn’aire has developed a 3D body scanner that records individual measurements and delivers custom-tailored clothes to users, according to Bloomberg. Named after his customized fashion company Zozo, Yusaku Maezawa developed the spandex Zozosuit, which transmits customers’ detailed body measurements and specifications through the company’s app. The technology is (of course) expected to take internet retail by storm, particularly once Zozo expands to customizable footwear (watch, runtime 1:16).

Diplomacy + Foreign Trade

Egypt is in talks with the World Bank for a USD 200 mn loan to fund SMEs and youth-led businesses, Investment and International Cooperation Minister Sahar Nasr said yesterday, according to Al Mal. The funding will be channeled largely toward women-led SMEs and youth startups established through the government’s “Fekretak Sherketak” startup support initiative, according to Youm7. The SMEs Development Authority had previously been in talks with the World Bank for a USD 300 mn loan to finance new projects. It remains unclear whether Nasr was referring to a separate loan package. Nasr and SMEs Development Authority head Nevine Gamea also signed yesterday an MoU to promote youth entrepreneurship ahead of the loan disbursal, according to a ministry statement (pdf).

Arab Contractors won a tender to build a USD 3 bn hydroelectric dam over Tanzania’s Rufiji River, according to an Ittihadiya statement. Elsewedy Electric and Arab Contractors were among the five companies shortlisted for the 2.1 GW project, which will be financed by the Tanzanian government. Tanzanian President John Magufuli delivered the news to President Abdel Fattah El Sisi in a phone call yesterday, and also invited him to attend the groundbreaking ceremony.

El Sisi ratifies international funding agreements: President Abdel Fattah El Sisi ratified on Thursday a USD 166 mn agreement with the Japanese International Cooperation Agency (JICA) to help fund the development of the Japanese schools being launched in Egypt. He also ratified a 2017 grant from the US to fund healthcare services.

Egyptian Intelligence Chief Abbas Kamel is expected to pay a visit to the Gaza strip soon to resume peace brokering efforts between rival factions Hamas and Fatah, Hamas spokesperson, Hazem Qassem told Anadolu Agency. This came just a day after Hamas reportedly rejected an Egyptian request to end protests along the Gazan border, unnamed sources told Al Hayat newspaper. Egypt had canceled a planned visit to Gaza to mediate reconciliation talks last week amid an escalation in violence between the Israeli and Palestinian sides.

Energy

Helwan plant to operate fully February 2019, EETC to complete Maadi transformer December

The 1950 MW, EGP 15 bn South Helwan power plant is due to begin operating at full capacity in February 2019, Upper Egypt Electricity Production Company (UEEPC) head Ibrahim El Shahat said. The Egyptian Electricity Transmission Company (EETC) is also expected to complete the 1500 MVA Zahraa El Maadi power transmission station in December, chairman Gamal Abdel Raheem said. The EETC is planning to link up the South Helwan plant and the Zahraa station.

Eni starts drilling two new wells at Zohr

Italy’s began started drilling two additional wells at the offshore Zohr natural gas field as it prepares to raise output to its 2.7 bcf/d plateau next year, an unnamed source from EGAS tells Al Shorouk. The addition brings the total number of wells in the project to 13. Sources said that work on them should be complete within a month and will determine how many other wells Eni will need to drill to hits its target. Eni had announced plans earlier this month to increase its investments in the Zohr gas field to USD 16 bn, up from USD 12 bn, by the time it completes the field’s development in July 2019. Production from the field hit 2 bcf/d last month.

Infrastructure

First phase of East Port Said berth port extension to be completed by end-November

The Suez Canal Economic Authority is set to inaugurate new platforms at the East Port Said port by end-November, Suez Canal Authority boss Mohab Mamish said, according to Youm7. The new platforms, which represent the first phase of expansions at the port, cost around USD 1.8 bn to complete, according to Mamish.

Basic Materials + Commodities

Egypt to begin new season of citrus exports in December

Egypt’s new season of citrus exports is due to begin this December, the Agriculture Export Council said, according to local news reports. Inspections on cargo earmarked for exports are set to start on 27 November and ports will begin accepting shipments of 1 December.

Real Estate + Housing

MBG Development earmarks EGP 10 bn for fresh investments in new capital

MBG Development is investing some EGP 10 bn in developing two residential compounds and a medical complex in the new administrative capital, Chairman Mahmoud El Adl tells Youm7. The company has already received the land plots for the developments and expects to begin constructing the foundations at the beginning of 2019.

NUCA reviewing offers for EGP 3-4 bn securitized bond issuance

The New Urban Communities Authority (NUCA) is reviewing offers from two local consortiums who are looking to manage its upcoming securitized bond issuance, unnamed sources from NUCA told Al Shorouk. The authority received offers from a consortium made up of Banque Misr and Sarwa Capital, and another comprised of the National Bank of Egypt and HSBC, who are competing for a EGP 3-4 bn issuance. The issuance means to help NUCA boost liquidity. Details on the timeline were not disclosed.

Automotive + Transportation

Gov’t in talks with financiers for USD 250 mn loan to double-track railways

The Transport Ministry is in talks with institutions including the European Bank for Reconstruction and Development (EBRD) for a USD 250 mn loan to double-track several key railway lines, a source told Al Mal. According to the source, studies on the lines concluded that adding a second track would be the best course of action to accommodate the number of commuters using these lines.

Feky Group looking to acquire distribution rights of China’s Haval models

Fekry Group, ex-authorized dealer for Ford vehicles, is negotiating with China’s Haval to obtain import, distribution and aftersales rights to its full range of vehicles, unnamed sources tell Al Mal.

Banking + Finance

SIDPEC in talks with local banks for USD 1.2 bn loan for new propylene factory

Sidi Kerir Petrochemicals (SIDPEC) is in talks with local banks for a USD 1.2 bn loan for its new propylene plant in Alexandria, sources tell Al Mal. SIDPEC has approached CIB, the National Bank of Egypt, Banque Misr, Arab African Bank, QNB Egypt, HSBC, Credit Agricole, Export Development Bank, and Ahli United Bank, among others. The company had selected earlier this year Honeywell UOP and W.R. Grace & Co to construct the plant.

On Your Way Out

An Egyptian man is taking his wife to court for having their daughters undergo FGM without his knowledge, in what is being touted as the first such case in the country,according to Gulf News. The wife could serve up to three years in prison if she is found guilty. FGM has been banned in Egypt since 2007, but the practice has been pushed underground.

The Market Yesterday

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

EGX30 (Sunday): 13,525 (-0.9%)
Turnover: EGP 399 mn (43% below the 90-day average)
EGX 30 year-to-date: -10.0%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.9%. CIB, the index heaviest constituent ended down 1.2%. EGX30’s top performing constituents were Juhayna up 4.5%, Eastern Co. up 3.4%, and Egypt Aluminum up 2.3%. Yesterday’s worst performing stocks were Global Telecom down 9.3%, SODIC down 3.9%, and AMOC down 3.1%. The market turnover was EGP 399 mn, and foreign investors were the sole net sellers.

Foreigners: Net Short | EGP -8.5 mn
Regional: Net Long | EGP +1.8 mn
Domestic: Net Long | EGP +6.7 mn

Retail: 61.4% of total trades | 61.3% of buyers | 61.5% of sellers
Institutions: 38.6% of total trades | 38.7% of buyers | 38.5% of sellers

Foreign: 22.9% of total | 21.8% of buyers | 24.0% of sellers
Regional: 7.1% of total | 7.4% of buyers | 6.9% of sellers
Domestic: 70.0% of total | 70.8% of buyers | 69.1% of sellers

WTI: USD 69.25 (+0.19%)
Brent: USD 79.90(+0.15%)

Natural Gas (Nymex, futures prices) USD 3.20 MMBtu, (-1.60%, November 2018 contract)
Gold: USD 1,230.4/ troy ounce (+0.14%)

TASI: 7,660.21 (+0.16%) (YTD: +6.00%)
ADX: 4,943.08 (-0.92%) (YTD: +12.38%)
DFM: 2,735.48 (-0.81%) (YTD: -18.83%)
KSE Premier Market: 5,168.71(-0.08%)
QE: 10,154.21(-0.38%) (YTD: +19.13%)
MSM: 4,453.03(+0.20%) (YTD: -12.67%)
BB: 1,322.06 (-0.11%) (YTD: -0.72%)

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Calendar

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 October (Thursday): President Abdel Fattah El Sisi to visit Khartoum.

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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