Thursday, 25 October 2018

Egyptian competition authority warns of EGP 500 mn fines each for Uber, Careem if they go ahead with merger

TL;DR

What We’re Tracking Today

** #4 We look set to end the week on a reasonably quiet note here at home — the EGX excepted. The benchmark EGX30 shed nearly 2.5% yesterday on moderate turnover, bringing its year-to-date return to -11.8%. Wednesday’s performance came as a global share sell-off sent the Nasdaq into correction territory (it’s down 12% from its September peak) and saw both the Dow and the S&P 500 wipe out their gains for the year. A sell-off in tech shares led the decline, the Financial Times notes.

Asian shares are also down sharply this morning, with major indexes in China, Japan, South Korea and Australia slumping 2-4% at dispatch time (see Bloomberg for color on Asian markets).

What’s going on? The nearly decade-long bull market took it on the chin yesterday as investors freaked out about everything under the sun. The Financial Times, the Wall Street Journal, Bloomberg, Reuters and the New York Times all cite combinations of some or all of the following:

  • The poor outlook on global growth outlook;
  • The health of the Chinese and Italian economies;
  • The prospect that earnings growth in the US has peaked;
  • How trade tensions (thanks, Donald) will impact economies large and small;
  • Rising interest rates in the United States;
  • The political drama that is the ongoing US midterm elections;
  • A faster-than-expected fading of the so-called Trump stimulus of tax cuts and government spending.

Oh, and like a golden retriever watching a tennis match, oil fell 1% yesterday, with Brent crude closing the day at USD 75.42 under “extreme selling pressure … as the steep selloff across stock markets fueled fears over a possible drop in oil demand growth,” Reuters quotes an analyst as saying.

It’s starting to look rather bearish out there, folks:

President Abdel Fattah El Sisi is in Khartoum today for talks with his Sudanese counterpart, Omar Al Bashir. Egypt and Sudan are expected to sign a final agreement for on a 630 km railway line connecting the two countries, Sudan’s Transport Minister Hatem Al Ser said, according to Al Mal. Foreign Minister Sameh Shoukry flew yesterday to the Sudanese capital to lay the groundwork for El Sisi’s trip.

Progress on GERD talks? The two countries, along with Ethiopia, have made “progress on reaching an agreement about the filling of the [Grand Ethiopian Renaissance] Dam (GERD),” Sudanese Irrigation Minister Khader Mohamed tells Reuters. No further details were provided, but all three countries have been trying to arrive at a “joint vision” for the dam’s construction that would cater to their varying interests, which for Egypt would require Ethiopia to reduce the pace at which plans to fill the dam’s reservoir. Last we heard, the tripartite committee overseeing the issue had failed to reach a breakthrough when it met last in Addis Ababa in September.

The US trade and business delegation wraps up its visit to Egypt today. The business figures and government officials have had packed days of meetings in Cairo as they kick the tires on investment opportunities.

AOI signs MoU with America’s Armored Group to manufacture armored vehicles in Egypt: The Arab Organization for Industrialization (AOI) signed yesterday an MoU with American armored vehicle manufacturer the Armored Group to manufacture armored vehicles in Egypt, according to Al Shorouk. The two also agreed to set up a technical committee to increase cooperation and share know-how on combating terrorism and manufacturing defense equipment.

Investment Minister Sahar Nasr is at Davos in the Desert in Riyadh, where she is pitching investment in Egypt, according to a ministry statement.

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

In miscellany this morning:

** #9 Do you employ people? Read this on your way to work, if you read nothing else: Once upon a time, companies grew because they treated workers on par with shareholders and management. That’s the key takeaway from When Sears flourished, so did workers. At Amazon, it’s more complicated — a story that prompted us to let out our inner democratic socialists (yes, they live still inside us … deep, deep inside us) and ponder for a moment what might be wrong with capitalism as we practice it today. Don’t be thrown off by the headline focusing on US companies: Every single word here applies to Egypt, even if only conceptually at privately-held companies. The fundamental questions we’re asking ourselves this morning:

  • Why do so many of us embrace the very American notion that leaving something on the table for staff is stealing from shareholders?
  • Wouldn’t treating employees — the “means of production” — on par with shareholders and management create a healthier company and, in the long-term, more “shareholder value?”
  • And sure, Nasserists are chowderheads. But does that mean that there’s no critique of capitalism worth entertaining? No way we can make it fairer for everyone?

There are 12 days left until the US midterm elections, where it still seems to be anyone’s guess how it will play out. We like the New York Times’ ongoing daily roundup.

The inventor of the Little Free Library has diedat age 62.

Private equity AUM will one day eclipse the hedgies, but we’ll still love Bns: “Private equity will overtake hedge funds as the largest alternative asset class within the next five years as investors flock to private rather than public markets in search of returns, according to a new analysis,” writes the Financial Times.

PSA- It’s a return to beautiful fall weather this morning. Expect a high of 29°C today and 26°C Friday and Saturday with overnight lows in the mid-teens. The weekend forecast holds no sign (so far) of the blowing sand and rain predicted earlier this week.

Enterprise+: Last Night’s Talk Shows

It was an pleasantly quiet night on the airwaves with both Hona Al Asema and Al Hayah Al Youm off for the evening.

The Tourism Ministry has lifted restrictions on umrah and will be accepting year-round applications, the head of the ministry’s religious tourism committee Hisham Amin told Sherif Amer on Yahdoth fi Masr(watch, runtime: 2:03). The government had previously allowed Egyptians to travel for umrah on only three months of the hijri year, which tend to be in the high season. The decision means to spread out the demand for umrah and potentially force tour operators and organizers to reduce their prices, House Rep. Amr Sedky also said (watch, runtime: 3:11).

A confrontation between Coptic priests and Israeli forces in Jerusalem drew the talking heads’ ire last night. The monks were standing outside the Church of the Holy Sepulcher in Jerusalem to protest renovation work that Israel’s Antiquities Authority began carrying out on the St. Michael the Archangel Chapel. The Coptic churches of Egypt and Ethiopia lay claim to the chapel. Masaa DMC and Yahdoth fi Masr both had coverage (watch here, runtime: 2:21 and here, runtime: 6:58).

Speed Round

Speed Round is presented in association with

** #1 Competition watchdog warns Uber and Careem of fines up to EGP 500 mn each in case of merger: The Egyptian Competition Authority (ECA) has sent another sharp, unprecedented warning to ride-hailing companies Uber and Careem that they could be fined up to EGP 500 mn each if they go through with a merger that has been the subject of wide speculation in the business press. Any merger would be harmful to the competition and consumers, the watchdog said in a statement on Wednesday (pdf). A separate statement emailed to reporters noted that the companies have not yet denied they were in merger talks (which isn’t exactly the case, as we note below.)

The ECA’s argument: “Uber and Careem are the only ride-hailing applications available in Egypt. Any anticompetitive interaction or harmonization of their business strategies including agreement to merge has the potential to cause serious and irrecoverable damage to Egyptian competition and consumers,” said ECA Chairman Amir Nabil. The warning, which the ECA’s board unanimously approved, apparently followed an investigation that showed that “riders and drivers both benefit substantially from current competition between Uber and Careem, and that these benefits will be lost if the two parties ceased to compete.”

Measures to avoid a fine: The statement noted that to avoid a fine, the ECA would have to grant them an exemption to the Antitrust Act (or Egyptian Competition Act). The firms must notify it officially of their intentions to merger, give it 60 working days after the notification to study the impact, and not consummate a marriage without the authority’s approval.

Taking the case to national television: Egyptian Competition Authority Chairman Amr Nabil discussed the issue at length on Masaa DMC (watch, runtime: 17:21).

Background: This is the second time the ECA has warned the companies against merger — but the first time the watchdog has threatened them with fines. The authority had issued its first warning last month following a Bloomberg report in July saying that Uber was in talks to acquire its regional rival Careem. While both companies denied the initial reports, Bloomberg revealed earlier this month that talks were ongoing and that the potential merger could be worth USD 2-2.5 bn. Uber’s CEO met with President Abdel Fattah El Sisi after the first warning. In its warning, the ECA had cited a similar case in Singapore where the US company and its Asian rival Grab were fined a combined USD 9.5 mn.

Move comes as ECA seeks M&A sign-off powers: The competition authority has been bidding for more than a year now for the authority to sign off on mergers or acquisitions worth more than EGP 100 mn; it is championing amendments to the Antitrust Act to that effect.

** #2 Capital Economics sees Egypt growth accelerating — and likes the idea of letting the EGP slide a bit through 2020. Capital Economics sees Egypt’s GDP growth accelerating to 5.5-6% between 2018-2020, up from 5.0% last year, “as inflation falls, interest rates are cut and the pace of austerity slows.” Egypt has been the region’s top performer this year and is seen maintaining its strong momentum well into 2019 and beyond, supported by the drive for reform and the resolve to consolidate fiscal policy and reduce debt levels, according to their latest report.

A tiny bit of deval (like 10% through 2020) would be a good thing: Supporting this vision are expectations that pressure from the IMF will likely “force the authorities to loosen their grip on the currency,” allowing the EGP to weaken slightly to around EGP 20 per greenback by 2020, which would help “maintain Egypt’s external competitiveness and sustain robust export growth.” That, coupled with tourism recovery and new income from natural gas resources, should in turn help plug the current account deficit and adjust the country’s balance of payments.

The outlook for inflation also seems promising, with levels seen cooling to around 10% by 2019 and 7.5% by 2020, down from a current 14%. “The central bank is likely to resume its easing cycle and we think that interest rates will be cut by 550bp by end-2019…looser monetary policy will boost credit growth and investment.”

** #3 M&A WATCH- Real estate giants SODIC and MNHD release operational updates. The two players in what we believe is Egypt’s largest-ever domestic merger issued operational updates yesterday as the transaction chugs toward a potential end-of-year close:

SODIC sees net contracted sales growing 14% y-o-y 2018: SODIC is anticipating net contract sales rising 14% y-o-y in 2018 to EGP 6.5 bn, the company said in a bourse statement (pdf). The statement notes that net contracted sales could have been higher had it not been for delays in launching its West Cairo project.

MNHD YTD 2018 deliveries up 126%: Madinat Nasr of Housing and Development (MNHD) announced that its deliveries reached 511 homes YTD in 2018, up 126% from YTD 2017. MNHD completed the construction of 2,956 homes in various developments in East and West Cairo with plans to deliver them to customers in 4Q2018 and early 2019, the company said in a statement yesterday (pdf). “We are very pleased with our accelerated construction plan and keeping our promise to deliver our units on time,” CEO Ahmed El Hitamy said.

Background: MNHD is the subject of an all-share acquisition bid by SODIC. We have plenty more from our exclusive sit-down with SODIC CEO Magued Sherif and MNHD Chairman Hazem Barakat.

** #5 IPO WATCH- Eastern sale to take place as soon as market conditions improve: The sale of an additional 4.5% stake in the Eastern Tobacco Company on the EGX will take place as soon as stock market conditions improve, Public Enterprise Minister Hisham Tawfik said yesterday, denying our exclusive report from earlier this week that the state privatization program had been postponed to the first quarter of 2019. Tawfik told a local newspaper that the government “did not postpone the program to a specific date,” noting that the Eastern sale could happen “in two weeks or in two months’ time” if the stock price bounces back from its current slump.

Background: The government announced on Friday that the transaction — which is expected to pilot the privatization program — had been put on ice “indefinitely” after Eastern’s share price plunged by as much as 11.5% last week, pressured by the wider emerging market selloff, a high interest rate environment, a looming trade war, and the introduction of protectionist measures in various countries. Our sources had told us that cabinet, while completely committed to the program, had made the decision to push the timeline after consulting with investment bankers. They had also told us that officials could potentially use the time to tweak the list of companies that will be on offer.

This came as Eastern reported a net profit after tax of EGP 991 mn in 1Q2018/19, down 4.83% y-o-y, according to a disclosure to the bourse (pdf). Revenues were up 6.77% compared to the same period last year at EGP 3.39 bn, but the company attributed the drop in net profit to a y-o-y decrease in interest income, it said in a separate disclosure (pdf).

CIHC names new Eastern MD, chairman: In other company news, the Chemical Industries Holding Company (CIHC), which owns 55% of the cigarette-maker, named Hany Hussein as Eastern’s new Managing Director, according to a statement picked up by Al Mal. Tamer Gadallah was also named the company’s new chairman of the board, replacing Mohamed Haroun, who had occupied both positions.

LEGISLATION WATCH- MPs to meet with Finance Minister to discuss regulation of slush funds: The House of Representatives’ Economics Committee is expecting to meet with Finance Minister Mohamed Maait soon to resume discussions on the regulation of ministerial “private accounts”, Rep. Medhat El Sherif said yesterday, according to local media reports. El Sherif said that Maait promised to present the committee with a complete list of existing accounts in order for legislators to determine how best to regulate them. The House had approved legislation last July that earmarks 5-15% of these funds for state coffers and allows the state to claim a one-time 15% cut of the annual surplus generated by them as of 30 June, 2018. Typically maintained outside the budget system and with little oversight, private accounts had gained an unsavory reputation as slush funds. MPs have been calling for years for greater oversight of the funds. Adding fuel to the first: Reports that a private fund managed by Cairo Governorate recorded a surplus of EGP 140 mn.

MPs also want to amend legislation governing sports investments: Members of the House’s Sports Committee approached the assembly yesterday with proposed amendments to the 2017 Sports Act, claiming that some of its clauses discourage investors from the sector. Among those are provisions that place restrictions on the ownership structure of sporting clubs. Under the Sports Act, individuals are allowed to invest in sporting clubs only through joint stock companies.

** #6 Egypt’s HitchHiker raises USD 200k in seed round: Cairo-based international shop-and-ship (with a twist) startup HitchHiker has secured USD 200k in seed funding from unnamed Dubai-based angel investors, the company said on its Facebook page. Founded last year by CEO Hussein El-Terawy and CTO Hassan Selim, the startup’s iOS and Android apps help shoppers save money by connecting them with travellers from around the world who earn a fee in exchange for muling items across the globe. The app has been downloaded about 8k times in the past month.

Another Egyptian startup that’s doing well: Swvl. With over 360k downloads on iOS and Android and a fleet of over 300 buses plying more than 100 routes across Egypt’s two largest cities, mass transit app SWVL runs 100k rides monthly and is looking to expand operations into Pakistan and Saudi Arabia, Ventures Africa notes. Founded by three 25-year-olds in March 2017, the startup aims to provide Egyptians with a middle ground between expensive private transport and messy public transportation. “Around the world, public transportation is a loss-making machine. If you can take this load off the government and privatize it in a way that is super cheap and creates job opportunities, you are revitalizing a sector,” said co-founder Mostafa Kandil. Swvl set a record for a Series A funding round in Egypt back in April when it raised USD 8 mn.

***

WE’RE HIRING: We’re looking for smart, talented, and seasoned journalists and editors to join our team at Enterprise, which produces the newsletter you’re reading right now. We’re looking for people who can work on this product and help us launch exciting new stuff. Applicants should have serious English-language writing chops, a strong interest — and preferably some professional experience — in business journalism, and solid analytical skills. The ideal candidate for us is a native-level-writer of English with the ability to read and understand Arabic. We offer the chance to work in a unique and casual work environment that promises to be intellectually challenging and rewarding. If you’re interested, please submit your CV along with 2-3 writing samples and a solid cover letter telling us a bit about who you are and why you’re a good fit for our team. Please direct your applications to jobs@enterprisemea.com.

** SHARE ENTERPRISE WITH A FRIEND **

Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Up Next

** #8 The draft SMEs Act is expected to be made public within 10 days, SMEs Development Authority head Nevine Gamea said, according to Al Mal. According to Gamea, the authority has recently reviewed the bill with the CBE and expects to present it to the Madbouly Cabinet very soon. The draft law sets out incentives — mainly in the form of services and subsidized access to finance — for owners of micro-, small- and medium-sized enterprises to go legit and pay taxes.

Egypt will announce the CEO of its new sovereign wealth fund in a month and half’s time, Planning Minister Hala El Said said yesterday, according to local press reports. The ministry has formed a committee led by former central bank governor Farouk El Okda to select the person for the top job from a pool of some 60 applicants. Other notable names on the committee include CBE Deputy Governor Lobna Helal and National Bank of Egypt Executive Chairman Hisham Okasha. El Said also said that the executive regulations governing the SWF will be ready in two weeks’ time. A source in the know had previously told us that the regs would be ready for cabinet review at the start of November.

The Macro Picture

Tech startups are helping improve Africa’s agriculture industry and could lift mns out of poverty, according to the FT.Africa’s agriculture industry is being held back by traditional equipment and outdated tech, but new technology has in recent years had a positive impact on yields. African and international agritech companies are seeing major untapped potential in Africa, which has more than a quarter of the world’s arable land and whose agriculture industry — worth USD 100 bn a year — contributes 15% to the continent’s GDP.

Visible change: Some African countries have already begun seeing improvement in quality and production with the help of new technology. Boston-based Precision Agriculture for Development (PAD), a non-profit organization, has helped Kenya increase its sugar cane yields by 11.5%. “Providing farmers with information and recommendations tailored to their local soil, weather and market conditions could dramatically improve yields and net incomes for farmers,” says PAD’s Director of Operations Megan Sheahan. Similarly, digital platform AgroCenta helped Ghanaian farmers sell their crops to big corporations like Nestle and Diageo.

Obstacles: Low internet access andhigh illiteracy rates in rural areas have made it difficult for tech companies to penetrate the African market as fast as it would like to. On the other hand, access to technology poses concerns that small-scale farmers might turn to methods that temporarily boost yields, but harm the soil on the long-term.

Egypt in the News

All quiet on the global front: Rejoice, for there is virtually nothing of note about Egypt in the international press this morning.

Worth Reading

UberEats has a secret sauce that has allowed to become a dominant player in delivery tech: Delivering for more than 1,600 restaurants around the world, UberEats is the fastest growing player in the booming food delivery industry, according to Bloomberg. Since its Toronto launch in December 2015, the delivery app has signed agreements that has seen it roll out in more than 300 cities (including Cairo. Unless you live in Maadi or New Cairo. Which, apparently, UberEats doesn’t think are part of Cairo). The company’s delivery empire has grown by as much 20% per year and is expected to reach north of USD 75 bn by 2022.

Synergy of data and food: Part of what Uber Eats does is provide demand-related data to restaurants to help them boost sales. “When the virtual restaurant team notices supply gaps in any given _neighborhood—if, say, the data show that the number of brunch places is lower than could be served based on searches—they’ll begin contacting businesses in the area.” Thanks to the service, Miami-based MIA Wings, for example, had an 80% increase in revenue after the company advised it in September to start delivering chicken wings. Similarly, Sultan, a Turkish restaurant in Montreal, changed its name to French Takos after UberEats advised it to start selling the product, which proved to be a hit among customers.

Worth Watching

A Japanese company is offering its employees cash incentives for getting a full night’s rest in an attempt to increase their productivity and reduce cases of exhaustion from overwork. Employees who work for the company — named “Crazy” — can earn up to USD 570 a year in cafeteria points if they clock in at least six hours of sleep per night, five nights a week, according to Bloomberg (watch, runtime 1:17).

Diplomacy + Foreign Trade

Saudi Arabia officially lifted its ban on Egyptian guava imports yesterday, Agriculture Quarantine Authority head Ahmed El Attar tells Al Shorouk. The Saudi Food and Drug Authority (SFDA) had announced lifting the ban back in April, but said at the time that imports would be limited to SFDA-approved suppliers. The kingdom had initially imposed the ban on Egyptian guavas as a temporary measure earlier this year over concerns of high levels of residual pesticides.

This came as the Quarantine Authority issued new rules for strawberry and pepper exports ahead of the new season, sources said yesterday. Under new policies, farmers must be registered to the government’s new coding system for exporters — which means to help the government keep better track of exported cargo — before their produce can be shipped. Cargo also has to be packaged at government-approved stations, where it will be examined by state inspectors. A farm’s export activities will be temporarily suspended until investigations conclude if its cargo is rejected for not being up to spec. Imports of Egyptian peppers and strawberries had been banned by a number of Arab countries last year, including Saudi Arabia, Bahrain, and Kuwait, who all claimed the crops contained unsafe pesticide levels. The government has taken various steps since then to tighten quality inspection measures on goods earmarked for exports.

Energy

TransGlobe begins drilling new well at Western Desert concession

TransGlobe Energy announced yesterday that it began drilling for oil at its SGZ 6X exploration well in the South Ghazalat concession in the Western Desert. The company also said that it successfully began production from two wells in West Bakr in the Eastern Desert, with output from each well currently averaging around 800 bpd, exceeding initial projections. Another new well in the area has also been producing around 80 bpd. TransGlobe plans to drill another well in the area during November.

Basic Materials + Commodities

GASC to launch next international wheat tender in two weeks’ time

The General Authority for Supply Commodities (GASC) could be issuing a new wheat tender next month, S&P Global says. Egypt’s current consumption rate will require the country to return to the market soon, despite the Supply Ministry saying earlier this month that strategic reserves are sufficient to cover consumption until February. GASC had purchased earlier this month 180k tonnes of Russian wheat for 1-10 December delivery.

FEI’s wants the Supply Ministry to use private sector silos for wheat storage

The Federation of Egyptian Industries’ grains division has submitted a request to the Supply Ministry to use private sector silos to store the wheat used to produce subsidized bread loaves, rather than storing the wheat in dirt silos that expose the crop to spoilage, Al Shorouk reports. According to the division, private sector companies have constructed silos for the government’s use, but have remained unoccupied. The ministry had green-lit the development of 300 shounas as part of the second phase of Blumberg Grain’s shouna project last year.

Manufacturing

Marubeni to build textile factory in Kafr El Sheikh for Cotton Holding co.

Japan’s Marubeni Corporation will be building a new textile factory in Kafr El Sheikh for the Cotton & Textile Industries Holding Company under an MoU signed yesterday, Al Ahram reports. The project will be funded through a facilitated loan from Japan Bank for International Cooperation (JBIC), which will be repayable over 10 years, with an additional three-year grace period. JBIC has also expressed willingness to provide consultancy services and help with the supply of equipment. The move comes as part of government efforts to rehabilitate several state-owned companies that have been suffering heavy losses. Details on the exact cost and timeline of the project were not disclosed.

Ezz Steel Rolling Mills to borrow EGP 2.5 bn for working capital, expansion

Ezz Steel subsidiary Al Ezz Rolling Mills is near closing a EGP 2.5 bn loan agreement with five local banks to finance its working capital and expansion plans, a banking source said, according to Amwal Al Ghad. The banks include the National Bank of Egypt, Banque Misr, Banque du Caire, Suez Canal Bank. No further details were provided. BdC, Banque Misr, and NBE had reportedly been in talks with the company for a EGP 3.4 bn loan for its Ain Sokhna facility earlier this year.

Health + Education

Egypt’s SEDICO to export locally manufactured medications to Italy

SEDICO Pharmaceutical Company has signed agreements to begin exporting five of its meds to Italy “in the coming period,” chairman Awad Gabr said. The company has already exported a batch of one of the products, and will begin shipping the remaining four products in the coming months. An EU delegation is also reportedly set to inspect SEDICO’s facility soon to grant the company license to export to more EU markets.

Tourism

Indonesia’s Sahid Group to operate Cairo-based hotel with Egypt companies

Indonesian hotel operator Sahid Group is looking to operate a hotel in Cairo in partnership with Egyptian private or public sector companies, General Manager Andrizal Amran said, according to Al Mal. The group is also planning to set up hotel management and hospitality schools as it expands into Egypt.

Banking + Finance

EFG Hermes, NBE, CIB and AAIB bod on NUCA’s EGP 4.5 bn securitized bond issuance

EFG Hermes has formed a consortium with CIB, National Bank of Egypt (NBE), and Arab African International Bank (AAIB) to compete for the management of a EGP 4.5 bn New Urban Communities Authority (NUCA) securitized bond issuance, Al Mal reported. NUCA will use capital raised from the issuance to proceed with its urban development plan, Deputy Housing Minister Khaled Abbas said. Baker McKenzie is also among those competing for the tender, sources close to the matter told Al Mal. Al Shorouk reported earlier this week that the authority has received offers from a consortium made up of Banque Misr and Sarwa Capital, while HSBC appears to also be in the running. NUCA is currently reviewing the offers and negotiations over whether the issuance will be guaranteed by the finance ministry are ongoing, the sources said.

SMEs authority looks to provie EGP 2.5 bn in SMEs financing in 4Q2018

The SMEs Development Authority is looking to provide up to EGP 2.5 bn in financing for SMEs before year-end, authority head Nevine Gamea said yesterday. Gamea’s announcement comes after Investment Minister Sahar Nasr announced on Sunday that her ministry is in talks with the World Bank for a USD 200 mn loan to develop youth- and women-led SMEs.

Housing Ministry, CBE look to expand Mortgage Finance Fund by EGP 10 bn

The Housing Ministry is in talks with the CBE to extend the EGP 20 bn Mortgage Finance Fund with an additional EGP 10 bn tranche, deputy Housing Minister Khaled Abbas tells Al Mal. The current tranches are expected to be disbursed by year-end. The fund seeks to boost financing the middle- and low-income segments by providing favorable lending rates of 7% and 8% over longer time periods. The program is funded by the World Bank and other local institutions, including CIB.

CBE to soon issue guidelines for e-payments firms looking at limited banking services

The CBE will issue in days guidelines for electronic payment companies looking to carry out electronic banking services as part of the country’s financial inclusion campaign, an unnamed CBE official told Al Mal. The guidelines will require interested companies to request a license from the CBE as Fawry Plus has already done, the source said. The service is expected to have withdrawal and deposit limits due to the risk involved, which is similar to that of smart wallet services. The move is part of a series of initiatives and regulatory measures the CBE wants to adopt to expand mobile banking services, such as forcing mobile network operators to make records of bill payments on customer accounts available to state-backed credit rating agency iScore.

Law

Matouk Bassiouny was legal counsel for CCI in recent USD 15 mn buyout

Matouk Bassiouny acted as sell-side advisor for Solvay Alexandria Sodium Carbonate (CCI) in the recent USD 15 mn buy-out of the company, the firm said yesterday. CCI was acquired by state-owned Egyptian Ethylene and Derivatives Company (Ethydco), Sidi Kerir Petrochemicals Company (SIDPEC) and the Egyptian Petrochemical Holding Company (ECHEM).

On Your Way Out

** #7 Next time you spot garbage in Cairo, take out your phone and let Dawar know. Dawar is a new waste recycling mobile app that allows users to send pictures of garbage in the street to notify Dawar’s team, which promptly cleans up the area, reported Digital Boom. The app then notifies the user after the job is done. It is currently in beta testing in Maadi and Torra but developers plan to have it eventually cover the entire country. Environ Adapt is providing the waste collection service and the app was launched as a collaboration between the Environment Ministry and Germany’s development agency GIZ.

The Market Yesterday

Share This Section

Powered by
Pharos Holding - http://www.pharosholding.com/

EGP / USD CBE market average: Buy 17.86 | Sell 17.97
EGP / USD at CIB:
Buy 17.86 | Sell 17.96
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Wednesday): 13,264 (-2.5%)
Turnover: EGP 733 mn (4% above the 90-day average)
EGX30 year-to-date: -11.8%

THE MARKET ON WEDNESDAY: The EGX30 index ended Wednesday’s session down 2.5%. CIB, the index heaviest constituent was 2.2% down. EGX30’s top performing constituents were Juhayna 2.1% up, Palm Hills 1.4% up, and Telecom Egypt 0.7% up. Today’s worst performing stocks were Arab Cotton Ginning 6.5% down, TMG Holding 6.3% down, and AMOC 6.3% down. The market turnover was EGP733 million, and local investors were the sole net sellers.

Foreigners: Net Long | EGP +62.9 mn
Regional: Net Long | EGP +48.9 mn
Domestic: Net Short | EGP -111.8 mn

Retail: 50.5% of total trades | 49.4% of buyers | 51.6% of sellers
Institutions: 49.5% of total trades | 50.6% of buyers | 48.4% of sellers

Foreign: 24.1% of total | 28.4% of buyers | 19.8% of sellers
Regional: 14.5% of total | 17.8% of buyers | 11.2% of sellers
Domestic: 61.4% of total | 53.8% of buyers | 69.0% of sellers

WTI: USD 66.26 (-0.84%)
Brent: USD 75.54 (-0.83%)

Natural Gas (Nymex, futures prices) USD 3.19 MMBtu, (+0.60%, Nov 2018 contract)
Gold: USD 1,239.8 / troy ounce (+0.71%)

TASI: 7,512.52 (-0.49%) (YTD: +3.96%)
ADX: 4,926.29 (-0.89%) (YTD: +12.0%)
DFM: 2,738.01 (-0.55%) (YTD: -18.76%)
KSE Premier Market: 5,208.85 (+0.74%)
QE: 10,152.62 (-1.09%) (YTD: +19.11%)
MSM: 4,462.76 (+0.08%) (YTD: -12.48%)
BB: 1,316.38 (-0.36%) (YTD: -1.15%)

Share This Section

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.

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. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.