Wednesday, 24 October 2018

Fall IPO season just crashed to a halt

TL;DR

What We’re Tracking Today

It’s a busy news day at home and relatively quiet morning abroad as this interminably long week limps to a close. (Not that it’s been a bad week — just strangely…long.)

Groundwork for El Sisi’s visit to Khartoum: Foreign Minister Sameh Shoukry will be in Khartoum today for minister-level meetings to lay the groundwork for President Abdel Fattah El Sisi’s visit, according to Foreign Ministry statement. El Sisi will be in Khartoum tomorrow for talks with Sudanese counterpart Omar Al Bashir. Egypt and Sudan are expected to sign the final agreement for the 630 km railway line connecting the two countries, Sudan’s Transport Minister Hatem Al Ser said, according to Al Mal.

Is volatility coming back? That’s what the pundits would have you believe after “the S&P 500, Dow industrials and Nasdaq all dropped at least 1% [yesterday] before recovering in another bout of volatility,” according to the Wall Street Journal. What’s going on? The notion that quarterly earnings could weaken in the US—and crude posting its biggest one-day loss since July on “fears that Saudi Arabia could ramp up production as well as questions about whether global petroleum demand could be faltering.” October, the Journal says, “has shaken not just stocks but government bonds, currencies and commodities.”

Donald Trump has stepped up his attack on US Federal Reserve Chairman Jay Powell. “Every time we do something great, he raises the interest rates…[Powell] almost looks like he’s happy raising interest rates,” Trump said in an interview with the Wall Street Journal. “Trump acknowledged the independence the Fed has long enjoyed in setting economic policy, while also making clear he was intentionally sending a direct message to Mr. Powell that he wanted lower interest rates.”

Paul Volcker is dying. That’s the backdrop for his wide-ranging (but not long) interview with Andrew Ross Sorkin, the founder of the New York Times’ Dealbook and co-creator of the awesome TV show Bns. Sorkin sat down with Volcker, the man who as Fed chairman broke the back of runaway inflation in US in the 1970s and early ‘80s, ahead of the release next week of his memoir Keeping at It: The Quest for Sound Money and Good Government. Volcker’s laments (“We’re in a hell of a mess in every direction”) come across as lively and obliquely prescriptive, not the grumbling of a man in his final days. Worth reading.

** #8 Pregnant? You’re helping give birth to Generation Alpha. Forget about Gen X, Millennials and Generation Z. It’s all about Generation Alpha. Or will soon be, marketing and media outfit Digiday suggests. Depending on who you listen to, they’re kids born sometime starting 2007-10 — and some 2.5 mn of them are being born around the world every week. Gen Alpha is expected to be the longest-living generation as well as the wealthiest, according to accounting and consulting outfit Grant Thornton. Where do you fall? Demographers differ on the subtle start and endpoints, but the consensus is something like this:

  • Gen X: early-1960s to early 1980s
  • Millennials: early 1980s to mid-1990s
  • Gen Z: early-to-mid 1990s to early 2000s
  • Gen Alpha: 2007-2010 and onward

And yeah, we feel Gen Z is a bit compressed, too. But the pundits say Gen Alpha is somehow distinct because it’s the first generation to be born entirely in the 2000s, whereas Gen Z stretches back into the 1990s.

The iPhone XS and XS Max should be out in Egypt starting today at Apple authorized resellers, we’re told. We’re drooling over the XS Max, where the 256GB model will set you back about EGP 30,700. Some in the tech press suggest the tradeoffs in the slightly less expensive iPhone XR are entirely worth it. Macworld has a roundup of reviews on the XR here. The XR is available for pre-order outside Egypt now for delivery starting Friday.

Meanwhile, there are plenty of leaks ahead of Apple’s iPad Pro and Mac event next week. MacRumors has the latest.

In miscellany this morning:

  • Reuters hosted a Twitter chat on life as a small business owner that’s surprisingly worth reading. You don’t have to be on tweeter to read it here.
  • It’s not just us: Americans can’t quit cash, either. (Financial TImes)
  • Why we don’t live in a real-life Man in the High Castle? Joachim Ronneberg, leader of raid that thwarted a Nazi atomic bomb, dies at 99 (NYT)
  • Morning routines: I’ve interviewed 300 high achievers about their morning routines. Here’s what I’ve learned. (NYT)
  • 2,000+ year-old Greek ship discovered virtually intact: Oldest intact shipwreck found 2 km down in Black Sea, scientists say. (CBC)

Enterprise+: Last Night’s Talk Shows

The airwaves had little to offer last night, with the talking heads busying themselves with metro ticket prices and a shortage of potatoes.

The Transport Ministry is working on a new pricing scheme for the new Cairo Metro lines that will be launched soon, Deputy Minister Amr Shaat told Yahdoth fi Masr. The first and second lines will not be part of this new pricing system, Shaat said, adding that Line 3 is likely to be opened to the public after around two months of tests (watch, runtime: 2:27). Trial operations on the new metro line began last week. Shaat also briefly discussed the new railway line that will link Egypt and Sudan (more on that in What We’re Tracking Today), saying that funding is currently the project’s largest concern (watch: runtime: 3:06). Transport Minister Hisham Arafat was also quizzed about both issues on Al Hayah Al Youm (watch here, runtime: 5:41 and here, runtime: 8:16)

Meanwhile, Masaa DMC’s Osama Kamal got into a lengthy discussion about a “crisis” caused by a shortage of potatoes. Kamal spoke to members of the Potato Producers Association, who told him that farmers planted smaller crops this year after they were underpaid last year. Climate change has also affected the crop’s quality this year, they added. Kamal also spoke to the head of the Agriculture Ministry’s central crops unit and to MPs about the shortage (watch, runtime: 4:55 and here, runtime: 1:04:46)

Meanwhile, Hona Al Asema’s Dina Zahra had a chat with Egyptian athletes at the Youth Olympics in Argentine (watch, runtime: 20:07).

Speed Round

Speed Round is presented in association with

** #1 The fall equity raising season is officially over. The state privatization program was not the only victim of the emerging markets selloff, according to Reuters’ Patrick Werr. At least three IPOs tentatively for the fourth quarter of this year have been postponed, according to an investment banker involved in one of the offerings. These include Rameda Pharma, Giza Spinning and Weaving and Hassan Allam Holdings, the source noted. “No IPOs this year. [They have been] all pushed to next year until we see how the market will recover,” he said. “I think everyone reached that decision.”

Will delaying the state privatization program adversely impact the budget deficit? The Madbouly government might have to adjust its budget deficit forecast for the FY 2018-19 now that it has delayed phase one of the state privatization program, says Werr. Egypt’s budget had projected that phase one of the program would see some EGP 10 bn flow into the treasury. The government was forced to postpone the program over the weekend amidst an emerging markets selloff and after Sarwa Capital’s shares fell 11% in their EGX debut last week. The state had been planning to sell 4.5% of its Eastern company this week as the first of as many as five companies that could have offered shares for sale this year.

Not necessarily. “The government still has time to resume share sales before the end of the fiscal year in June,” said Allen Sandeep, head of research at Naeem Brokerage. It could meet its revenue target from offerings in just two of the five originally planned for 2018, he added, pointing to Eastern Company and Abu Qir.

The delay was still right move: “If it were not postponed, and the Eastern offering had failed to be covered at proper valuation, this could have triggered a political backlash and possibly have jeopardized the whole program,” Hany Farahat, senior economist at CI Capital, told Reuters.

** #2 EXCLUSIVE- Egypt has formally asked the EU for permission to delay 0% customs duties on car imports. The Trade and Industry Ministry has formally requested that Brussels allow Cairo to wait another 1-2 years before cutting to 0% the duties on European Union-assembled cars brought into Egypt. We confirmed the news with three senior government officials with first-hand knowledge of the matter. The three noted that the EU has yet to respond to the request. Custom duties on EU-made car are expected to fall to zero on 1 January 2019 under Egypt’s trade liberalization agreement with the union. If the request is accepted, this would be the second time the EU had agreed to push back the agreement.

Chances are good that Egypt will get the delay: There is a strong possibility that the EU will accept the request, one of the sources suggested, especially as Egypt had recently brought its customs duties in line with the World Trade Organization’s Harmonized System Code, a global standardized system of classifying traded goods to determine their customs duties.

How long can we keep relying on the kindness of strangers? The Madbouly government and the domestic car assembly industry industry have been kicking back and forth the so-called Automotive Directive — a proposal that would give incentives to local assemblers to move up the value chain to manufacturing in return for tax breaks that would give them an ongoing price edge against EU, Turkish and Moroccan-made imports. The status of the proposed bill, which has largely stalled due to a combination of haggling in the House of Representatives and lobbying by car importers, remains a mystery. A senior government source had revealed to us back in August that the Trade and Industry Ministry, along with the ministries of investment and finance, are reworking the incentives system in the law from a general, nationwide system to a program of auto freezones. Trade and Industry Minister Amr Nassar had said that the law would be ready for the House of Representatives in October.

New investment is at stake: A number of foreign car companies have expressed an interest in growing some combination of assembly and manufacturing operations in Egypt — provided the government is clear on the status of the automotive directive. Most recently, a group of French auto companies, including Peugeot, said as much to Egyptian trade officials on the sidelines of the SIAL Paris exhibition, the head of Egypt’s commercial office in Paris Gamal Faisal told reporters. He noted that Peugeot is in advanced negotiations with Egypt over potential future investments, though he did not provide details. Renault apparently said it was conducting a study of the Egyptian auto market ahead of making any investment decisions.

We did score some agreements at the exhibition: Egypt reportedly came out of the SIAL exhibit with a number of agreements. French maintenance company Midas has entered into a preliminary agreement to open a franchise in Egypt, while an unnamed French auto company is looking to contract 15 Egyptian auto parts factories to supply it with parts, said Faisal without providing details.

We’re not alone in courting global car companies, as the Wall Street Journal recently pointed out with a look at how the rest of North Africa (alongside Kenya, Rwanda, Nigeria and Ghana) is becoming a “global hub for the automotive industry, exporting parts and manufacturing cars that are sold across the region, in Africa and into Europe.”

** #3 Egypt considers issuing EGP-denominated bonds on int’l market: The Madbouly government is considering an EGP-denominated bond issuance on the international market to encourage overseas inflows and curb the cost of borrowing, four unnamed sources told Bloomberg. “While investors would purchase the bonds in USD, the principal and interest would be payable in EGP, which means the buyer bears the risk of any fluctuation in the exchange rate,” they noted. While the sources did not delve into the mechanisms of the offering, they noted that the transactions would be cleared through Belgium-based settlement company Euroclear instead of local banks. These plans comes as the Finance Ministry is looking to diversity its funding with an eye to capping borrowing over the next four years at USD 20 bn. These include issuing eurobonds in USD, RMB, and JPY in 1Q2019.

Is the government expecting the EGP to fall in the coming period? Passing the FX risks to investors could indicate that the government is some pressure on the EGP. There’s a growing consensus among sell-side research analysts that the CBE is subtly defending the EGP, which has fallen substantially less against the USD this year than has an MSCI basket of emerging markets currencies. Capital Economics has said it expects the EGP could lose up to 10% of its value against the USD by 2020. The government line has always been that Egypt’s fundamentals have shielded the EGP from the EM selloff.

** #4 INVESTMENT WATCH- Pepsi to invest USD 515 mn in Egypt through 2021: PepsiCo Egypt is planning to invest USD 515 mn in the local market over the next four years, including USD 16 mn in CAPEX to develop its beverage production lines, CEO Mohamed Shelbaya told us yesterday after a press conference. Other CAPEX plans include investing an unspecified amount next year in PepsiCo’s snack products, which include Chipsy, Doritos, and Cheetos. The company has no immediate plans to roll out new products, he said. PepsiCo also plans to upgrade its fleet and distribution centers and will expanding the domestic cultivation of its agricultural raw materials.

PepsiCo has “invested in Egypt every year regardless of the difficulties” since the US-based company first brought its business to Egypt 70 years ago, Shelbaya said. The company has invested USD 606 mn in Egypt in the past four years. “We want to be ready to jump on opportunities once conditions improve, rather than wait to invest and struggle to catch these windows,” Shelbaya told Enterprise. The food and beverage sector is expected to grow at a 16% clip this year, he noted.

Once local operations fully recover, PepsiCo plans to begin exporting — and Africa will likely be where it begins tapping new markets, Shelbaya told us. “Africa has many countries that are very promising export markets. We’ve visited a few countries and found there is a large gap to fill in the snack and beverage sector,” he said. Shelbaya declined to disclose a projected timeline for the company to begin exports.

PepsiCo’s profit margins in Egypt have begun to recover as it has been working to streamline its operating model after costs ballooned following the devaluation of the EGP in late 2016. At the heart of this is the company’s agricultural program, which has seen it provide local farmers with potato seeds to cultivate the crop and sell it back to the company at market prices. The company now locally sources 70% of its potatoes for its Chipsy brand locally and has plans to bring that number up to 100%, in addition to launching exports of potato seeds “in the near future,” according to Shelbaya.

What about Egypt is most surprising to PepsiCo’s HQ? The resilience of the domestic market despite challenging conditions, Shelbaya says. “They never expected that we would rebound this much, this fast. Most countries that face the hardships we have take years and years to recover,” he said. To an outsider, this resilience probably raises more eyebrows than our sky-high sugar consumption, he suggested.

Shelbaya also spoke to Masaa DMC last night (watch, runtime: 5:56).

** #5 INVESTMENT WATCH- EAEF will commit some USD 30 mn to Egypt this year: The Egyptian American Enterprise Fund (EAEF) plans to invest an additional USD 30 mn this year in Egyptian SMEs, bringing its total investments in Egypt to date to USD 200 mn, US Chargé d’Affaires Thomas Goldberger said yesterday, according to Amwal Al Ghad. Goldberger did not provide further details.

US trade, investment delegation meets El Sisi: The announcement comes as a delegation of 44 US companies is in town to kick the tires on potential investments in Egypt. The delegation met yesterday with President Abdel Fattah El Sisi, Prime Minister Moustafa Madbouly and the ministers of investment and international cooperation, oil, health, agriculture, and ICT, according to an Ittihadiya statement. The delegation’s visit got airtime on Yahdoth fi Masr last night (watch here, runtime: 4:27 and here, runtime: 8:07).

CBE sets a mandatory 10% active e-wallet quota for the banking sector: The central bank bank has set a September 2019 deadline for banks to ensure that 10% of their e-wallet customers are active users. A directive to banks in August (pdf) also mandates that banks grow their active e-wallet users by at least 30% annually. Banks that do not meet this quota must explain to the CBE their strategy to boost active user numbers. CBE Sub-Governor for Payment Systems and Business Technology Ayman Hussein tells Al Mal that the central bank knows the quota will be tough to meet.

Other policies to boost a non-cash transactions: The CBE is currently working on setting up a mechanism to allow mobile money transfers from abroad without requiring users to open a bank account in Egypt, as regulations stipulate today, Hussein said. The CBE is working with regional central banks to reduce restrictions on mobile transfers between countries. Hussein also said that the CBE is working on guidelines for banks to begin using interactive teller machines (ITMs) — new types of terminals that allow customers to interact with bank staff via video chat to perform a wide variety of transactions and services (this blog post here breaks it down nicely).

** #6 Is the central bank changing its mind on crypto? The CBE is also studying the possibility of having Egypt issue its own cryptocurrency, Hussein said at a banking conference on Tuesday, according to the newspaper. The newspaper included no further details. The CBE has issued repeated warnings against the use of cryptocurrencies and cautioned that using them in Egypt is illegal.

Egypt spends over USD 1.5 bn a month on petroleum products it supplies to the local market, Reuters quotes Oil Minister Tarek El Molla as having said yesterday. The amount covers imports, as well as foreign oil companies shares’ of locally-refined products from JVs with the government, which add up to c. USD 700-800 mn a month, El Molla added. Earlier this year, former finance minister Amr El Garhy had said that tightening consumption of petroleum products in Egypt will help mitigate the impact of rising oil prices that have recently been straining the state budget. The government has reportedly spent an additional EGP 10 bn on fuel subsidies in 1QFY2018-19 as oil prices surged beyond a projected USD 67/bbl in the budget to cross the USD 80/bbl mark. Sources had told us that the fuel subsidy bill for the fiscal year could jump to EGP 100 bn, from EGP 89 bn, if Brent crude remains north of USD 75 / bbl.

** #7 LEGISLATION WATCH- Is the House looking to amend the Investment Act amid falling FDI? Worried about declining foreign direct investment, the House Economic Committee reportedly wants to call the ministers of investment and trade in for a chat in the coming month to discuss whether we need to tinker with the shiny new Investment Act. Egypt’s net FDI inflow dipped to USD 7.7 bn in the FY 2017-18, down from USD 7.9 bn the previous year.

House orders redrafting of bill that seeks to license advertising professionals: The House Culture and Media Committee rejected a private member’s bill yesterday that would have required individuals working in advertising or marketing to obtain a license to practice, Al Mal reports. The committee has asked that the bill, which was presented by Industry Committee chair Farag Amer, be entirely rewritten and restructured, saying that it lacks clarity. Media Committee member Jalila Othman also said Amer’s bill could have set the stage for the creation of monopolies in the ad industry. Amer had earlier this week proposed that non-licensed individuals working in the field face jail time and fines as high as EGP 100k. A working group will supervise the redrafting of the bill. Committee members include reps from the House media and industry committees, as well as the National Media Authority and Egyptian Advertising Association, and advisers to the ministers of justice and industry.

In other legislative news, the Housing Ministry is drafting legislation that would create a federation for Egyptian real estate developers, Assistant Minister Khaled Abbas said, according to Al Mal. Under the law — the main aim of which will be to regulate the market and shield consumers against unfair practices — the federation would be responsible for setting and enforcing industry guidelines. The bill should will be ready in six months from now, Abbas added. No further details were disclosed.

Could Russian flights to Red Sea resume before year’s end? Egypt’s Ambassador to Moscow Ihab Nasr said that is hoping to see Russian airliners resume flights to Hurghada and Sharm El Sheikh before the end of 2018. He told TASS that while there is no official timeline or schedule, authorities on both sides are “working hard” to bring flights back soon under orders from President Abdel Fattah El Sisi and his Russian counterpart. The two leaders had agreed earlier this month that flights should resume “in the nearest time.” A Russian aviation security delegation will reportedly be in town this week to inspect safety measures at the Sharm El Sheikh and Hurghada international airports. Flights have been grounded since the 2015 Metrojet crash.

House Economics Committee approves RIZ contracts: The House of Representatives Economics Committee signed off yesterday on Egypt’s contracts with Russia for the establishment of the Russian Industrial Zone (RIZ) in the Suez Canal area, Al Shorouk reports. The two countries had signed the contracts for the zone back in May, which give Russian companies rights to develop a 5.25 mn sqm stretch of land in the Suez Canal Economic Zone. The first phase of construction is expected to cost c. USD 190 mn.

Gov’t again fails again to attract investors for EGP 2 bn Ras Sudr airport project: A government tender to develop an EGP 2 bn airport and adjacent tourism resort in Ras Sudr has failed for the second time after an Egyptian-Saudi consortium and a separate Egyptian-Emirati group fell short of conditions in the tender, a source close to the matter told Al Mal. After an unsuccessful attempt to attract investors last year, the government had amended the tender’s terms and conditions, allowing companies to own the land on which the resort would be built, under a build-operate-transfer (BOT) framework, rather than have the land allocated under a usufruct license.

If at first you don’t try and try again. Tourism Development Authority (TDA) boss Serag El Din Saad told local news earlier this week that the Airport Holding Company (AHC) may relaunch the tender for the project. The TDA and AHC are expected to meet to discuss the next step after this latest development, the newspaper says.

MOVES- Bassel El Hiny (LinkedIn) is the frontrunner to become the chairman of state-owned Misr Insurance Holding Company (MIHC), sources said yesterday. The Public Enterprises Minister is expected to make the final announcement “within days,” according to the sources. Former minister Khaled Badawy had ordered a shakeup of the company’s board of directors in May, which saw the appointment of Tamer El Batesh as acting chairman. El Hiny had previously served as vice chairman of the company and has 26 years of experience in banking and finance.

Saudi lands USD 50 bn worth of new projects at investment conference despite boycott: Saudi Crown Prince Mohammed bin Salman secured USD 50 bn worth of new investment yesterday on the opening day of his ‘Davos in the Desert’ conference, according to Reuters. Those include 25 new oil and gas agreements with players such as Total, Halliburton, Schlumberger, Baker Hughes, and Total, where Saudi Aramco signed 15 MoUs worth USD 34 bn. This came despite the fact that top global executives and officials boycotting the three-day conference in light of Saudi journalist Jamal Khashoggi’s murder at the kingdom’s consulate in Istanbul earlier this month.

Are US sanctions in the offing for Saudi? The US gas revoked visas for the 21 suspects and promised this would “not be the last word on this matter.” President Donald Trump said that he would have Congress decide “how best to punish the kingdom for the killing inside its Istanbul consulate,” referring to the incident as the “worst [coverup] in the history of coverups.’”

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Up Next

Conference season continues this weekend and into next week. The 57th ACI World Congress and the 43rd ICA Annual Conference 2018 taking place at the Four Seasons Nile Plaza, Cairo on Thursday. The 2018 Narrative PR Summit is happening on Sunday, 28 October, also at the Four Seasons Nile Plaza.

Image of the Day

A US warplane was spotted by an AP photographer’s lens flying over the Giza Pyramids on 22 October 1943 carrying war supplies to battle zones during the Second World War.

Egypt in the News

The arrest of author Abdel Khalek Farouk a few days ago is topping coverage of Egypt in the foreign press on this otherwise quiet morning. Farouk — the author of a forthcoming book that is critical of Egypt’s economy — was arrested earlier this week alongside his publisher Ibrahim El Khatib. Both are facing charges of spreading false news, according to the AP, which says the “arrests are the latest in Egypt’s crackdown on dissent.”

Luxor, Aswan are top value destinations for 2019: The Southern Nile Valley, on the banks of the Nile from Luxor to Aswan, claimed the number one spot on Lonely Planet’s list of top 10 value tourist destinations of 2019. A tour of the area’s well preserved temples at Esna, Edfu, Kom Ombo, and Aswan — alongside sights of lush fields and palm trees — is ideal for hagglers looking for a great bargain, the guidebook says.

Other headlines worth a look this morning:

On Deadline

There’s a lesson to learn from the case of Jamal Khashoggi’s murder about the importance of transparency, Emad El Din Hussein writes in a piece for Al Shorouk. He argues that the firestorm of criticism that Saudi Arabia is under — with media outlets, world leaders, and global executives turning their backs to it — could have been avoided had officials informed the public about what they knew of the dissident Saudi journalist’s murder straight off the bat. Instead, Saudi spent weeks denying any knowledge of Khashoggi’s whereabouts, which undermined its credibility when officials finally came clean, making it easy for the world to see the affair as a “coverup.”

Diplomacy + Foreign Trade

Bulgaria wants in on EastMed gas: Bulgaria wants in on Egypt’s natural gas cooperation agreement with Greece and Cyprus, which will see the construction of an underwater natural gas pipeline connecting Cyprus’ Aphrodite field with liquefaction facilities in Egypt., its Prime Minister Boyko Metodiev Borisov at a meeting with President Abdel Fattah El Sisi in Cairo on Tuesday, according to statement from the Bulgarian government. Bulgaria sees Egypt as a promising potential source market for natural gas, with Borisov having pressed the issue during a previous meeting with El Sisi last month. The two sides agreed yesterday to establish an Egyptian-Bulgarian committee to strengthen bilateral cooperation in Sofia early next year.

Energy

Egypt, Shanghai Electric to finalize financing talks over USD 4.4 power plant next week

The Egyptian Electricity Holding Company (EEHC) will meet with China’s Shanghai Electric next week to finalize financing agreements for the USD 4.4 bn, 6 GW-capacity Hamrawein “clean coal” power plant, sources close to the matter said. While the China Development Bank (CDB) has made a financing offer, the EEHC is reportedly not happy with the terms and still and interest rates laid out in the offer. Once funding from the CDB is secured, however, the EEHC plans to take out another syndicated loan from the National Bank of Egypt (NBE) and CIB to finance the project, sources added. Shanghai Electric leads a consortium made up of Hassan Allam Holding and Dongfang Electric, which signed the EPC contracts for the project during President Abdel Fattah El Sisi’s visit to China last month.

BWE to raise investment in Apex’s natgas exploration drilling in Western Desert

Apex International Energy signed an agreement with its partners at Blue Water Energy (BWE) to increase BWE’s investment in the latter’s oil and gas concessions in the Western Desert, according to a BWE statement. The agreement will see BWE financing parts of Apex’s drilling, asset acquisition, and corporate transaction activities in the concessions. Apex is due to start exploration drilling on the Western Desert’s West Badr El Din and South East Meleiha concessions sometime this quarter.

Tourism

Flights will begin landing at Berenice Airport beginning of 2019

Marsa Alam’s Berenice Airport will be open to passengers at the start of 2019, Red Sea Governor Ahmed Abdallah said, according to Al Masry Al Youm. The facility, which had once served as a military airport, was renovated at a total cost of EGP 430 mn, Abdallah said.

Sichuan Airlines launches first flight from Chengdu to Cairo

China’s Sichuan Airlines launched its first flight from Chengdu to Cairo International Airport yesterday, Al Shorouk reports. The plane arrived carrying 230 tourists. The airliner will operate two flights a week on Tuesdays and Thursdays.

Egypt Politics + Economics

Overdue taxpayers have until 14 November to avoid 90% of late tax penalties

Taxpayers who have racked up overdue payments have until 14 November to settle their dues and avoid 90% of the late penalties, the Tax Authority said in a statement cited by Al Masry Al Youm. The authority had announced the three-month allowance period on 15 August.

National Security

Egypt acquires Kh-31 supersonic air-to-surface missiles

Egypt acquired Kh-31 supersonic air-to-surface missiles with its Air Forces’ new MiG-29M/M2 multirole fighters, Jane’s 360 reports. President Abdel Fattah El Sisi showed off the new gear during a visit to a base last week. Ittihadiya has pictures here.

Sports

El Tayeb crowned winner of Carol Weymuller Open

Egyptian squash player Nour El Tayeb brought home the Carol Weymuller Open title after defeating the UK’s Sarah-Jane Perry in Brooklyn yesterday, according to the tournament’s website. El Tayeb is the world’s third-best squash player.

Mo Salah to participate in AFCON qualifier game against Tunisia

Mohamed Salah was named in the lineup of overseas-based players set to play in the upcoming African Cup of Nations qualifier against Tunisia on 16 November, according to Ahram Online. Salah was absent from the previous roster of Egypt’s match against Swaziland following a minor injury during an earlier match. Striker Ahmed Koka is absent from the rolls due to an injury.

On Your Way Out

More than 250 art pieces produced under diverse Islamic Empires, including 15th century Egypt, are being auctioned today at Sotheby’s in London (pdf). Among the pieces on offer is a Mamluk-era Qur’an manuscript from Egypt that is expected to fetch GBP 7,000-10,000.

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 (Tuesday): 13,580 (-0.5%)
Turnover: EGP 748 mn (6% above the 90-day average)
EGX 30 year-to-date: -9.6%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session down 0.5%. CIB, the index heaviest constituent ended up 0.8%. EGX30’s top performing constituents were Pioneers Holding up 3.4%, Palm Hills up 2.8%, and Qalaa Holdings up 1.2%. Yesterday’s worst performing stocks were Arab Cotton Ginning down 13.9%, AMOC down 9.6%, and Abu Qir Fertilizers down 6.7%. The market turnover was EGP 748 mn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +54.9 mn
Regional: Net Short | EGP -23.4 mn
Domestic: Net Short | EGP -31.5 mn

Retail: 64.3% of total trades | 65.0% of buyers | 63.6% of sellers
Institutions: 35.7% of total trades | 35.0% of buyers | 36.4% of sellers

Foreign: 19.9% of total | 23.4% of buyers | 16.4% of sellers
Regional: 6.4% of total | 5.0% of buyers | 7.9% of sellers
Domestic: 73.6% of total | 71.6% of buyers | 75.6% of sellers

WTI: USD 66.35 (-0.12%)
Brent: USD 76.44 (-4.25%)

Natural Gas (Nymex, futures prices) USD 3.22 MMBtu, (+0.37%, November 2018 contract)
Gold: USD 1,234.30 / troy ounce (-0.20%)

TASI: 7,549.77 (-1.29%) (YTD: +4.48%)
ADX: 4,970.30 (+0.28%) (YTD: +13.00%)
DFM: 2,753.07 (+0.21%) (YTD: -18.31%)
KSE Premier Market: 5,170.76 (+0.46%)
QE: 10,264.07 (-0.10%) (YTD: +20.42%)
MSM: 4,459.36 (+0.10%) (YTD: -12.55%)
BB: 1,321.16 (-0.11%) (YTD: -0.79%)

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Calendar

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.15 November (Thursday) The T20 Invest in Healthcare Conference 2018, Nile

Ritz Carlton Hotel, Cairo, Egypt

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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