Wednesday, 28 November 2018

Are state banks propping up the EGP?

TL;DR

What We’re Tracking Today

The House of Representatives’ general assembly is in recess until 9 December, House Speaker Ali Abdel Aal said yesterday, according to Youm7. You can expect committee work to continue during the break.

Saudi Crown Prince Mohammed Bin Salman’s tour of Cairo is over this morning as the MbS leaves to continue his regional tour in Tunisia before heading to Argentina for Friday’s G20 summit. His visit to Egypt continues to get plenty of ink here and abroad. Surprising, though, is the dearth of news about new investments in Egypt by Saudi businesses, announcements of which had become the mainstay of high-profile visits such as this. Business talk in the press is limited to progress reports on already announced projects. MbS’ departure augurs well for anyone trying to get into or out of Garden City today after the traffic snarl caused by his takeover of the Four Seasons.

Tunisia won’t be as MbS-friendly as we were: The international press is having a field day with reports that MbS will be greeted with protests when he gets there, especially when compared to the warm greeting he received here.

Meanwhile, it’s the final day of the Cairo ICT expo,featuring a final panel discussion headlined “Controlling Social Media: A Step Forward or Backward?” There are no words. The conference agenda is here (pdf).

The Arab International Mineral Resourcesconference will also wrap up this afternoon. Here’s the agenda.

Foreign Minister Sameh Shoukry is heading to Sudan today to discuss Libya with the ministers of its neighboring countries, according to a ministry statement.

Worried about the impact of Brexit tourism in Egypt? “So far Brexit fears do not appear to have reduced demand” for tourism to Egypt and North Africa, Peel Hunt analyst Ivar Jones tells the FT. Though still early days, summer 2019 bookings indicate travelers were “shifting to Turkey, Tunisia and Egypt and away from the Canary Islands,” he said.

The latest on Brexit: The European Court of Justice (ECJ) will decide “quickly” whether the UK can revoke its notice to withdraw from the EU under Article 50 of the Lisbon Treaty without agreement of the other 27 states, the ECJ said on Tuesday, according to Reuters. Opponents of Brexit are hoping that a ruling could open the door to a second referendum, despite UK Prime Minister Theresa May saying that no second vote will be held.

OPEC looks set to cut oil output when it meets on Thursday, 6 December, according to a global survey by Bloomberg of 36 analysts and traders. Bloomberg notes in a primer on what USD 50 oil means for the global economy.

The global business press is divided on whether Trump will de-escalate his trade war with China when he gets to Friday’s G20 meeting. The Financial Times says no, the New York Times says it could be in the cards.

Need your daily dose of crazy? The Donald slams Fed chairman Jay Powell, threatens to cancel his upcoming meeting with Vladimir Putin, and adds that he is “among those who ‘have very high levels of intelligence’ but are not ‘believers’ in climate change.” All that and more in a long sit-down with the Washington Post.

Did Mark Mobius just tell investors to ditch Saudi for Egypt? The Khashoggi murder has really put off foreign investors from Saudi Arabia, said Mobius Capital Partners Mark Mobius. “If the leadership has questionable governance, how about the companies?” Mobius told Bloomberg in an interview. “There are other things going on that are very risky … Unfortunately because of this incident, a lot of people are afraid of Saudi Arabia,” he said. “Who could be next?” Mobius doesn’t think Saudi Arabia’s inclusion in the MSCI emerging markets index will save it from the backlash, doubting MbS’ commitment to reform.

On the flipside, the legendary emerging markets investor plugged Egyptian equities: “Mobius said he would rather invest in Egyptian stocks, because unlike most nations in the Gulf, the North African country isn’t too closely allied with Saudi Arabia.” We’re not certain we can say that last bit is true, but we’ll take the overall sentiment.

Portfolio managers and strategists see 2019 as a comeback year for EM shares, which took a beating throughout much of 2018, according to Bloomberg.

Triple trend reversal next year: Next year could see a “triple trend reversal,” Morgan Stanley strategists suggest, pointing to prospects for 1) faster growth in China on the back of monetary easing; 2) a weaker USD thanks to a mid-2019 pause in the Fed’s rate hikes and 3) a ‘hiatus’ in America’s trade war with China. All of this “benefits EM equities the most,” they wrote in double-upgrading the asset class to overweight relative to benchmarks from underweight. JPMorgan strategists see the US Fed slowing its pace of rate hikes next year, a move that would help EMs heavily geared up with USD-denominated debt. JPMorgan strategists see the MSCI EM index gaining 13% gain by the end of 2019 — the gauge is down almost 16% for 2018, “the third-worst performance since the global crisis in 2008.”

Low valuations also present opportunities: Emerging-market valuations are approaching “crisis levels,” presenting a long-term buying opportunity, a PM at Franklin Templeton suggests. JPM, meanwhile, likes Russia, Indonesia, Brazil and Chile.

In miscellany this morning:

  • The number of listed companies in the US is down 50% from its peak in the mid-1990s: More small US companies are avoiding IPOs, forcing the number of publicly traded companies in the States to fall by half to c. 3,600 today from nearly 8,000 in the mid-1990s. (New York Times)
  • Is the M&A boom in the US about to come to an end? A former investment banker turned author thinks so. (New York Times)
  • The best spot in the office is a phone booth — if you can get into one (and if the last person to use it didn’t sit there to eat koshari. Which, incidentally, is banned at Enterprise World Headquarters.) (Wall Street Journal)

Enterprise+: Last Night’s Talk Shows

Saudi Crown Prince Mohammed bin Salman’s visit to Egypt and relations between Cairo and Riyadh once again reigned supreme on the airwaves last night, but the discussion was insipid at best.

Saudi Arabia has invested some USD 27 bn in more than 5,000 ventures in Egypt, the Council of Saudi Chambers’ deputy head, Abdullah Al-Adeem, told Yahduth fi Masr’s Sherif Amer (watch, runtime: 1:27). Amer also paid particular attention to a meeting between the heads of Egyptian media outlets and the Saudi media delegation accompanying the crown prince on his trip (watch, runtime: 1:50).

Masaa DMC’s Osama Kamal hosted a roundtable discussion on MbS’ trip with Al Hayat newspaper’s Cairo bureau chief Mohamed Salah, former Egyptian ambassador to Saudi Arabia Ahmed Al Ghamrawy, former IMF consultant Fakhry Elfiky, and Al Ahram editor Ashraf Al Ashry (watch, runtime: 2:02). Hona Al Asema and Al Hayah Al Youm also dedicated some airtime to the visit (watch, runtime: 2:55 and runtime: 3:00).

Grand Egyptian Museum Director Tarek Tawfik updated Hona Al Asema’s Lama Gebril on the museum’s progress as it prepares for its soft opening next year. Around 4,500 of the 5,400 artifacts from King Tut’s tomb have been transferred to the GEM, where the boy king’s belongings will be put on display for the first time since his tomb was discovered, Tawfik said (watch, runtime: 7:52).

CIT Ministry advisor Hossam Othman had a chat on Hona Al Asema about an initiative to train at least 10k Egyptians and Africans as software developers, which President Abdel Fattah El Sisi launched on Sunday at the Cairo ICT expo (watch, runtime: 29:02).

Mowasalat Misr has reached an agreement with Google Maps to display its bus and minibus routes on the app, Al Hayah Al Youm’s Lobna Assal noted (watch, runtime: 2:43).

The government’s planned housing projects and developments were the main topic of discussion for Cabinet spokesman Nader Saad on Al Hayah Al Youm (watch, runtime: 4:41).

Speed Round

Speed Round is presented in association with

Foreigners dump Egyptian debt for seventh month in a row; more speculation state that banks are propping up the EGP: Foreign investors exited some EGP 24.3 bn-worth of Egyptian treasuries in October, according to the central bank’s monthly statistical bulletin (pdf). Non-Egyptian holdings of treasuries stood at EGP 210.2 bn (c.USD 11.7 bn) at the end of October, down from EGP 234.5 bn (c.USD 13.1 bn) the previous month. This marks the seventh consecutive month during which international appetite for Egyptian treasuries has declined, according to Masrawy.

Is the CBE relying on state banks to prop up the EGP amid the outflow of hot money? The central bank appears to be relying largely on the National Bank of Egypt and Banque Misr to help prop-up the EGP throughout the emerging markets sell-off, according to Reuters. The strategy is meant to be an alternative to the CBE directly interfering — Governor Tarek Amer has consistently repeatedly since the late 2016 float of the pound that the central bank has stopped managing the currency. “As portfolio funds flow out … supplies of USD needed to support the EGP are mainly coming from the banking system, rather than from the central bank’s reserves,” according to seven bankers and several economists the newswire spoke to.

The policy does not pose an “immediate threat,” but it can’t last forever, economists say: Egypt’s net foreign reserves have held steady the past several months, climbing to USD 44.5 bn in September and October. Remittances by citizens working abroad also rose 20.4% y-o-y in September to USD 1.8 bn, and the EGP float managed to crush the black market for forex. “All this suggests Egypt may be able to resist pressure on the EGP for many more months or even years … But if demand for the Egyptian currency weakens further over the long term without any exchange rate adjustment, capital inflows could shrink, Egypt’s exports might become less competitive, and foreign exchange reserves could be run down.”

Background: This is exactly what Arqaam Capital said earlier this month. The firm stressed that banks are now “less shock absorbent for a future devaluation” of the EGP (however unlikely at this stage) and need fresh inflows of FX to continue acting as shock absorbers. By Arqaam’s calculations at the time, FX reserves would fall only USD 4 bn if the CBE dipped in to make the banks whole for the outflows. Capital Economics, meanwhile, suggested in a September report that the EGP’s stability in the midst of the global EM sell-off could have only come from the CBE propping up the currency.

EXCLUSIVE- Gov’t treasuries to trade on the EGX in 1Q2019: The Madbouly government plans to begin selling treasuries on the EGX “on a trial basis” in 1Q2019, a government source told Enterprise. The source stressed that only long-term government bonds will be traded. The central bank is taking the lead on drafting the regulatory framework for the move, the source noted. The policy, which Finance Minister Mohamed Maait revealed to us exclusively back in July, is hoped to reduce yields on government bonds while also drawing in investors to treasury auctions. The Finance Ministry is amending the Public Finances Act to accommodate for the move, the source said. The source did not reveal when this regulatory framework would be introduced in the House of Representatives.

Part of a wider policy to expand reach of government bonds: The move is part of a series of actions taken by the government and CBE to draw new investors to government auctions. The CBE and Finance Ministry are looking to shake up the current bond auction system by establishing a central securities depository that will include a primary and secondary market auction systems, an electronic platform, a date-collection operation and a yield pricing monitor. Furthermore, the government is hoping to have all of its government-issues securities available on Belgium-based clearing house Euroclear at the beginning of FY 2019-2020 to further open up the market.

Change in tax treatment of treasury holdings won’t take effect until measure passes the House; expect more news today: The Federation of Egyptian Banks (FEB) appear to be closing in on an agreement on a new tax treatment of bank income from their holdings of state treasuries. Details of talks between the FEB and the government over the weekend, released by CIB in an EGX disclosure on Tuesday (pdf), suggest that a preliminary agreement will see the new treatment apply only to treasuries purchased after the change in treatment is approved.

New tax treatment will need House approval: The statement also noted that “the tax will come into effect as soon as the House of Representatives signs off on it,” meaning the story could have legs for some weeks to come.

What the investors are hearing: “Tax picture may not be as bad as initial draft law suggested; full impact not until FY2020,” write EFG Hermes analysts Elena Sanchez-Cabezudo and Ahmed El Shazly in a note out yesterday after hosting an investor call with CIB. “The positive message from the call … is that there will be no retroactive implementation and the changes will only be applied to T-Bill/T-Bonds bought after the law is approved, not to the existing stock.”

Expect more news today: CIB told investors on the call that the Federation and the Finance Ministry are due to meet today to “potentially finalize the tax law changes.”

The kicker: All of this will push banks to shift to consumer loans and central bank CDs, EFG Hermes says, particularly amid expectations that interest rates will start to come down in 2019.

Background: The Madbouly Cabinet approved last week a new tax treatment for banks that would separately tax their earnings from government debt. Analysts have been debating the impact of the change in accounting, with Shuaa Securities Egypt suggesting that the effective tax rate of a model bank could skyrocket to 37% against 24% under the system now in effect. Government sources speaking to the foreign press say the new formula could raise taxes to the sector by EGP 10 bn.

M&A WATCH- Medhat Khalil appeals terms of FRA-mandated takeover bid for Raya: Raya Holding for Financial Investments founder Medhat Khalil has appealed the conditions laid out by the Financial Regulatory Authority (FRA) for a mandatory tender offer (MTO) for 100% of his company by 27 November, Al Mal reported. In his appeal, Khalil asked that an independent financial advisor be appointed to determine a fair share value, Raya CFO Hossam Hussein said. Khalil also requested a deadline extension of two months to secure the required financing, which he had previously estimated could ring in at EGP 800 mn. Khalil had said it would be impossible to secure the amount by the deadline.

Background: The FRA had ordered that Khalil launch an MTO or sell off shares in Raya after declaring he had triggered the MTO requirement with an effective stake of more than 33%. Khalil says he and his family members control 32% of shares, but the FRA is counting the 10% stake owned separately by his brother-in-law as a related party, bringing the Khalil group’s total stake to 42%.

Japanese companies want clarity on gov’t policy toward automotive assembly industry before committing to new investments: Japanese automotive companies are interested in investing more in Egypt, but are waiting for clarity on government policy, Japanese Ambassador to Egypt Masaki Noke said. “If you have a trade agreement, you can import from Europe, Turkey and other countries tax-exempt, and companies have to decide whether to export from your trade partners or invest and produce here in Egypt,” he noted. “In order to invest here in automotive production, Japanese companies have to be sure that it is more rewarding to produce here than to export from trade partners, the ambassador said.

Duties on EU cars will fall to 0% in exactly 34 days. Automotive assemblers had been angling for a package that would give them a measure of protection against imports if they moved further up the value chain into manufacturing.

EARNINGS WATCH- Construction giant Orascom Construction announced overnight (pdf) like-for-like net income of USD 69.1 mn in 3Q2018 (up more than 208% year-on-year) on revenues of USD 2.2 bn. The adjusted net income figure reflects a one-time provision one-off provision for a case in the United States involving a subcontractor at OC’s now-completed Iowa fertilizer project. The contractor also declared a consolidated backlog of USD 4.2 bn and a pro-forma backlog, including its 50% share of Besix, of USD 6.1 bn as of 30 September. Consolidated new awards stood at USD 1.5 bn (or a pro-forma figure of USD 2.7 bn including the 50% share of Besix) as of the same date. “Our third quarter results highlight the consistent performance of our recurring operations. Our efforts to focus on execution and project controls in the MENA business continue to be successful, and we believe that similar efforts already underway in our U.S. operation will start to pay off next year,” said CEO Osama Bishai. The USD 4.2 bn backlog is made up of “quality projects that provide us with our targeted visibility of 16-20 months,” Bishai added. OC also released its results presentation here (pdf).

Court slaps former Confederation of African Football officials with EGP 1 bn fine for antitrust violations: A Cairo Economic Court has fined former Confederation of African Football (CAF) head Issa Hayatou and former CAF Secretary-General Hisham El Amrani a combined EGP 1 bn for anti-competitive practices, Egyptian Competition Authority (ECA) head Amir Nabil said in a statement (pdf). The court found the two guilty of violating fair competition law by granting Lagardère Sports exclusive airing rights of CAF’s competitions through to 2026 without allowing other bidders. It remains unclear whether the court would be able to enforce its ruling. The case was brought to court by the ECA in January 2017, saying the practice is both against the law and damaging to the Egyptian economy.

President Abdel Fattah El Sisi held talks yesterday with Saudi Crown Prince Mohammed bin Salman, who landed in Cairo on Monday, according a statement from Ittihadiya. The two discussed collaboration on investment, economic, and national security issues as well as regional diplomacy.

Reports of the USD 5 bn King Salman Causeway made the press: Construction work on the King Salman Causeway, the bridge linking Saudi Arabia and Egypt via Aqaba Bay, will begin before 2020, according to reports picked up by Gulf News and Construction Week Online. Cost projections now stand at USD 4-5 bn, from the estimated USD 3-4 bn we had reported back in a 2016 issue when the project was announced. The bridge’s main 7 km artery will take 5-7 years to complete.

Jusoor Company to be shuttered: The EGP 6 bn Jusoor Company, the holding company founded in 2014 by former Egyptian-Saudi Business Council head Sheikh Saleh Kamel to provide seed money and invest in the Suez Canal, will be liquidated, current council head Abdullah bin Mahfouz said. The company proved of little economic use and its capital will be used to establish 30 small-sized companies to invest in opportunities surrounding the canal, he said.

In other news out of the visit:

  • The two sides formed a committee to discuss ways of cutting barriers to investment. (Al Masry Al Youm);
  • Four other committees will look into opportunities in manufacturing, agriculture, tourism and contracting, as well as reconstruction projects in Libya, Iraq, Yemen and Syria, Egyptian-Saudi Business Council chairman Abdel Hamid Abu Moussa said.
  • Cooperation on SMEs will be the order of the day when the board of the Federation of Egyptian Chambers of Commerce meets on 18-19 December with its Saudi counterpart in Aswan, Federation head Ahmed El Wakeel said.
  • The federations will also look at manufacturing, construction, infrastructure, and agricultural projects across Africa, El Wakeel added, according to Al Masry Al Youm.

Is Israel’s pipeline dream realistic? Israel’s ambitions to build a USD 7-8 bn pipeline to supply natural gas to Europe by 2025 might be a little too optimistic, Gabriel Mitchell, an expert in Israeli government and international affairs, writes in an opinion piece for Globes. Israeli Energy Minister Yuval Steinitz announced last week that his country has signed agreements with Greece, Italy and Cyprus to supply them with natural gas and that to do so the country will be building the longest and deepest pipeline in the world.

Financing unclear and timeframe unrealistic? Steinitz had said financing for the project would take a year and construction would take five. Mitchell asks how Israel intends to pay for that pipeline and whether it could really be constructed in the timeframe suggested by the minister. “It took four years to connect Tamar field — a modest, 90 kilometer pipeline — to Israel’s coastline, so it is ambitious to imagine that a 2,200 kilometer pipeline would be constructed in similar timetable. So long as shorter, cheaper options are available, it is unclear that the EastMed pipeline will reach the minimal financial investment required to get off the ground,” Mitchell points out.

CORRECTION- We fudged the numbers from CAPMAS’ report on road accidents in Egypt in yesterday’s issue. The total number of accidents in 1H2018 dropped to 4,426 from 5,826 during the same period last year, not the other way around. H/t Tarek B.

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Egypt in the News

Mo Salah, animal lover, tops coverage of Egypt in the foreign press: Displacing MbS’ visit to Cairo from the global headlines is Liverpool star Mohamed Salah coming out to condemn a controversial — and unconfirmed — proposal to export our nation’s stray cats and dogs to countries that use them for food. The story is trending everywhere — even the BBC has picked it up.

The government has stepped up fines for citizens who build illegally on agricultural land, but the poor say they have nowhere else to go, Lena Masri and Ali Abdelaty write for Reuters. According to the newswire, illegal construction on farmland has gone up 40% annually since the 2011 uprising at a time where Egypt is in desperate need to plant its own crops to feed its rapidly growing population.

The Grand Egyptian Museum will become the world’s largest museum dedicated to a single civilization, Salma Islam writes for the Los Angeles Times. The new museum in Giza will showcase artifacts never shown before to the public, and features state-of-the-art facilities vital for the artifacts’ preservation. The museum’s ambitious plans come at a cost of USD 1.1 bn, however, which is financed by two Japanese loans.

Egypt’s efforts to curb population growth do not address the “root causes” of the issue, including economic inequality, Victor Cabrera writes for the Media Line. Recent policies designed to incentivize family planning are “reasonable,” but these must be paired with reforms to “liberalize and diversify” the country’s economy, according to Steven Mosher, president of the Virginia-based Population Research Institute. “It’s not just simply about economic growth; it’s about the distribution of that growth,” says Queen’s University Professor Geography and Planning, Mark Rosenberg. According to Rosenberg, economic growth “has not been effectively transferred to Egypt’s poorer classes.”

On The Front Pages

Crown Prince Mohammed bin Salman and President Abdel Fattah El Sisi’s sit-down yesterday is leading the conversation in Egypt’s three state-run newspapers this morning. The top headline in Al Gomhuria focuses on the warm welcome MbS received in Cairo, while Al Ahram and Al Akhbar feature nearly identical headlines on El Sisi stressing direct correlation between Saudi Arabia’s security and stability and those of Egypt.

Also on today’s front pages:

  • Foreign Minister Sameh Shoukry is in Sudan for talks on Libya (Al Gomhuria)
  • The House of Representatives is unhappy with Social Solidarity Minister Ghada Wali over delays in the disbursement of some pensions (Al Ahram)

Worth Reading

Consumer confidence in Egypt fell by three points q-o-q to a reading of 80 on Nielsen’s Global Consumer Confidence Index for 2Q2018. Egypt and South Africa are the only two countries in the Middle East and Africa to see their consumer confidence readings decline, according to the index, which measures economic optimism.

But, when compared to Egypt’s reading post-EGP float, consumer confidence has largely stabilized on the back of slower inflation and adjusted spending habits, said the Arabian Marketer. The current level of confidence is an increase of 16 basis points since 1Q2016 as the dust from the float settles. Demand still exists, but it’s the patterns that have changed: Consumers are now increasingly adopting a “zero-waste” mindset.

Shoppers in Egypt have been gradually shifting away from the discounter segment and towards brand loyalty. Rather than always going for the cheaper options, they look to limit waste through restocking pantries at more frequent intervals, and waiting for longer intervals before larger grocery trips. Monthly supermarket visits are down to an average of three this year (from a previous four), and hypermarket visits to one (from two). Consumers are also increasingly paying for goods in installments.

Worth Watching

Ever wondered how an executioner feels about their job? Well a retired Egyptian executioner (known locally as a Ashmawy) sat down with Vicefor an episode of ‘10 Questions You Always Wanted to Ask.’ The Vice team rounded up a series of questions about the ex-Ashmawy’s work, experiences, thoughts, reasons, and regrets. The Ashmawy, who said he got into the job because it was “a unique and dignified vocation,” not only loved his job, but “started to innovate” (shudder).

Considering a job as an executioner? “You need to be a mature (at least 30-40 years of age), physically strong and able, observant, and pious person,” he says. The interview is not for the faint-hearted (watch, runtime: 6:12).

Diplomacy + Foreign Trade

US lawmakers urge US gov’t to pressure Egypt on arrests: US lawmakers have sent a letter (pdf) to US Secretary of State Mike Pompeo urging for serious action to be taken against arrests of activists in Egypt, which they say negatively affects relations between the two countries. More than 30 lawmakers pointed to the alleged targeting of US and other foreign NGOs, saying that at least 15 US citizens have been detained by Egyptian authorities without legal basis. “We are worried that the Egyptian government’s approach to human rights, in addition to repressing Egyptian freedoms and contravening American values, will have an unintended but harmful impact on Egypt’s stability, the very thing the Egyptian government is seeking to protect,” the lawmakers said. The letter also accused Egypt of a media crackdown.

The US press is taking the cue, with some noting that photojournalist Mahmoud Abou Zeid, known as Shawkan, has yet to be released despite an order releasing him from prison being issued three months ago.

Energy

First phase of Egypt-Sudan electricity interconnection project delayed?

The Electricity Ministry is expected to complete the first phase of the USD 60-70 mn power interconnection project with Sudan in six months’ time, Minister Mohamed Shaker said yesterday. The first phase, which should see the two countries exchange 200-300 MW of power, had initially been expected to go live next month. The ministry will, however, conduct trial runs of transferring 150 MW of power in December. The second phase is slated for completion in 1Q2020 and will see an exchange of up to 600 MW.

Basic Materials + Commodities

Supply Ministry indefinitely postpones settling int’l rice tender

The General Authority for Supply Commodities (GASC) has indefinitely postponed selecting a winning bid in its international tender for rice due to high prices, a government source tells Al Masry Al Youm. With prices for Chinese and Vietnamese rice ranging from USD 419.7-444 per tonne, the government is now looking into supplying rice from local suppliers instead. GASC was expected to settle the tender on 20 November.

Legislation + Policy

Social Solidarity Ministry completes draft Social Security and Pensions Act

The Social Solidarity Ministry has completed drafting the Social Security and Pensions Act and has referred the legislation to the Finance Ministry for actuarial studies on the legislation, Minister Ghada Wali told the House of Representatives yesterday, Al Mal reports. The actuarial studies should be complete within one month.

Egypt Politics + Economics

Egypt signs agreement with United Bank to settle tax disputes worth EGP 100 mn

The government has reached an agreement with United Bank to settle 43 tax dispute cases worth a combined total of EGP 100 mn, which primarily involved stamp tax disputes going back 30 years, according to Masrawy. The bank’s settlement is part of the government’s agreement with the banking sector to put to bed outstanding tax disputes going back years.

Other Business News of Note

Vodafone Egypt, Silicon Waha sign customer service employment agreement

Vodafone Egypt inked an agreement on Thursday with state-affiliated tech park operator Silicon Waha (literally: Silicon Oasis) that will see Vodafone employ 500 young people in customer service centers at Waha’s parks in Assiut, Borg El Arab, and Beni Suef or through Vodafone, according to an CIT Ministry statement,

National Security

Defense minister in Greece to attend joint training drill Medusa 7

Defense Minister Mohamed Zaki is in Crete to attend Medusa 7 — a multi-day joint naval and air force exercise between Greece, Cyprus, and Egypt, according to an Armed Forces statement. Zaki is due to meet with senior Greek military officials to discuss regional developments and joint military cooperation.

On Your Way Out

Nike, NBA player Kyrie Irving and Concepts present ancient Egypt-inspired Kyrie 5 ‘Ikhet’ sneaker. The creative designer behind sneaker boutique Concepts, Deon Point, explained that ‘Ikhet’ means “Glorious Light’ — named for the Great Pyramid’s limestone casing stones, which were polished to shimmer like glass in the sun, according to Slam magazine. The shoe’s pale beige sand-colored body with a contrasting outsole and midsole symbolizes the sunset against the Egyptian pyramid, while the bright red tongue pays homage to the Sphinx, which is believed to have had a red nose before it was worn off. Nike’s swoosh is also inspired by ancient Egyptian architecture, while the left shoe’s heel features the Eye of Ra. The Nike Kyrie 5 Ikhet shoe is expected to drop on December 26th, 2018, priced at USD 130.

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): 13,214 (+1.3%)
Turnover: EGP 862 mn (10% above the 90-day average)
EGX 30 year-to-date: -12.0%

THE MARKET ON TUESDAY: The EGX30 ended yesterday’s session up 1.3%. CIB, the index heaviest constituent ended up 1%. EGX30’s top performing constituents were Porto Group up 4.5%, and Telecom Egypt up 4.3%, and Ezz Steel up 3.7%. Yesterday’s worst performing stocks were Ibnsina Pharma down 0.8%, Edita down 0.1%. The market turnover was EGP 862 mn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +262.1 mn
Regional: Net Short | EGP -95.2 mn
Domestic: Net Short | EGP -166.9 mn

Retail: 50.3% of total trades | 50.3% of buyers | 50.4% of sellers
Institutions: 49.7% of total trades | 49.7% of buyers | 49.6% of sellers

WTI: USD 52.09 (+0.89%)
Brent: USD 60.84 (+0.60%)

Natural Gas (Nymex, futures prices) USD 4.20 MMBtu, (-1.13%, December 2018)
Gold: USD 1,220.80/ troy ounce (-0.64%)

TASI: 7,573.48 (+0.59%) (YTD: +4.80%)
ADX: 4,960.04 (-0.23%) (YTD: +12.77%)
DFM: 2,699.60 (-1.02%) (YTD: -19.89%)
KSE Premier Market: 5,333.38 (+0.75%)
QE: 10,355.67 (-0.01%) (YTD: +21.50%)
MSM: 4,386.87 (-0.14%) (YTD: -13.97%)
BB: 1,320.33 (-0.49%) (YTD: -0.85%)

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Calendar

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, Egypt International Exhibition Center, Nasr City, Cairo.

26-28 November (Monday-Wednesday): 15th Arab International Mineral Resources Conference, Al Manara International Conference Center, Cairo, Egypt.

03 December (Monday) Consumer Finance Landscape-New Law in the Making, Fairmont Hotel Nile City, Magenta ballroom, Cairo, Egypt

03-05 December (Monday-Wednesday): First Egypt Defense Expo “EDEX 2018”, Egypt International Exhibition Center, Nasr City Cairo.

04 December (Tuesday): Uber CEO Dara Khosrowshahi will be in Cairo on Tuesday, for “an important announcement.

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.

09-10 December (Sunday-Monday): Cairo Regional Centre for International Commercial Arbitration’s Sharm El Sheikh VII conference, Egypt Hall, SOHO Square, Sharm El Sheikh

10 December (Monday): The Financial Regulatory Authority will hear a grievance appeal by Beltone against a six-month suspension handed to its investment banking arm over “irregularities” the authority says it found in Sarwa’s IPO, Al Mal reported.

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 Sheikh, venue TBD.

14-16 December (Friday-Sunday): AutoTech 2018, Cairo International Exhibition and Convention Centre, Nasr City, Cairo.

18-19 December (Tuesday-Wednesday): Federation of Egyptian Chambers of Commerce leaders are scheduled to meet with their Saudi counterparts in Aswan to launch a collaboration project to support SME development in Egypt and Saudi Arabia.

19 December (Wednesday): Cairo Economic Court to rule into an appeal by pharma companies

25 December (Tuesday): Western Christmas.

27 December (Thursday): CBE’s Monetary Policy Committee meeting.

January 2019: Flat6Labs will launch their 12th startup accelerator cycle.

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.

28-29 January 2019 (Wednesday-Thursday): Banking Technology North Africa, Nile Ritz Carlton Hotel, Cairo, Egypt.

7 February 2019 (Thursday): Egypt Building Materials Summit, Venue TBD, Cairo, Egypt

11-13 February 2019 (Monday-Wednesday): Egypt Petroleum Show, Egyptian International Exhibition Center, Cairo.

19-20 February 2019 (Tuesday-Wednesday): The Solar Show MENA 2019, Nile Ritz Carlton Hotel, Cairo, Egypt.

26-28 February 2019 (Tuesday-Thursday): 22nd International Conference on Petroleum Mineral Resources and Development, Egyptian Petroleum Research Institute, Nasr City, Cairo, Egypt.

27-30 March 2019 (Wednesday-Saturday): Cityscape Egypt 2019, Egypt International Exhibition Center, Nasr City Cairo.

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).

June 2019: International Forum for small and medium enterprises (SMEs).

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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