Wednesday, 19 December 2018

Will Egypt issue the first new banking licenses in nearly a generation?


What We’re Tracking Today

Has the year-end news slowdown begun? It’s exactly one day early, but it feels as if news flow fell off a cliff yesterday. Not that we’re complaining. If the pattern holds, you can expect a bounce a week from now ahead of the Central Bank of Egypt’s next interest rate decision, due Thursday, 27 December.

How slow is it? Last night’s talk shows included the breaking news that Fifi Abdo has declared she has not quit dancing and will perform twice on New Year’s Eve. (We got up in the middle of the night for this?)

Speaking of rates: It’s interest rate day in the United States as the US Federal Reserve is expected to announce this evening (CLT) a quarter-point rate hike to take the fed funds rate range to 2.25-2.50%.

What to watch out for: Will the Fed cut language from its post-meeting statement suggesting it will continue with “gradual” rate increases into 2019? The US central bank was “expected to raise interest rates three more times next year, but economists now expect that will change to show two more hikes next year, with another possible in 2020,” CNBC says.

What does it mean for us? Not as much as for some emerging markets, but interest rate hikes in the US are generally bad news for EM, prompting “capital outflows … in favor of relatively higher-yielding U.S. assets,” Reuters reminds us. In parallel, the strengthening greenback then makes imports for EM more expensive.

Meanwhile: Oil prices are now down almost 40% from their recent four-year high after crude closed down again yesterday, the Wall Street Journal reports. Oil tumbled more than 7% yesterday in heavy trade “due to fears of oversupply and deteriorating demand,” Reuters adds. There are few signs the outlook will improve, Bloomberg warns.

Against a messy backdrop for equities and commodities, bearish investors responsible for some USD 575 bn are pouring their cash into bonds, according to a Bank of America survey, reports Bloomberg. In the biggest ever one-month rotation, investors increased their allocation to bonds by 23 percentage points. 53% of survey respondents believe global expansion will slow over the next year, the gloomiest outlook on the global economy since 2008.

Keeping score among hedgies: Equity funds are the biggest losers of the year, while relative value funds have (on the whole) squeezed out a win in what otherwise stands as an annus horribilis for the hedge fund world, Bloomberg reports in its annual roundup of winners and losers from the US, Europe and Asia.

Has socially responsible investing lost its soul? “All too often, critics say, revenue-chasing triumphs over principles. Investors who think they’re buying environmental, social, and governance funds—ESG for short—to promote a better world often wind up with costlier products that are, in almost every other respect, the same as any index fund. Criteria are so broad and disparate that companies as unlikely as Exxon Mobil Corp. and Philip Morris International Inc., the maker of Marlboro cigarettes, make the cut in some cases.” Read on Bloomberg Businessweek.

New business idea for the NBFI set: Financing online sellers in e-commerce marketplaces.

International news worthy of your time this morning:

Saudi Arabia’s King Salman has extended bns in handouts to citizens for another year, Bloomberg reports. KSA will fund a SAR 40 bn package to cushion the impact of rising costs, prompting concern about whether the government is committed to trim its state wage and entitlements bill. The cost of living allowance was renewed until a study of the kingdom’s “social protection system” is completed by mid-2019. The story is getting wide play in the global business press.

The UK will prepare to leave the European Union in March without an agreement, a spokesman for the British prime minister said yesterday, adding that although it’s more likely the UK will leave the bloc with an agreement, the country must prepare itself. Meanwhile, the jitters are spreading as Credit Suisse bankers have been advising wealthy clients to move their assets out of the UK, the Financial Times reported. Sterling-denominated assets have taken a hit since PM Theresa May abandoned a parliamentary vote on Brexit, taking with it the GBP and stocks.

In miscellany today:

FACT OF THE MORNING- Commodity traders now control 10% of the global LNG market, bulling their way over the past 2-3 years into a market previously dominated by global oil majors and state-owned petroleum companies. You can thank Egypt, among other emerging market buyers, for helping develop viable spot markets and flexible-destination contracts.

Buy yourself a reusable water bottle: Evian is pledging to make all of its plastic bottles from recycled plastic by 2025 as the industry comes under consumer pressure over its wasteful use of disposable plastic. (WSJ)

Getting hate on our twitter this week: The world’s most successful people start their day at 4am. Inc. magazine is amazing. Its website? A clickbait hellhole.

Worthy of hate on our twitter. Except that we snickered a couple of times. In a moderately good way: The 12 office workers you love to hate, by Emma Jacobs and Andrew Hill in the FT.

Worthy of love on your morning commute: The FT’s roundup of its Best of the Big Read for 2018.

For the geeks among our people: Apple computers used to be built in the U.S. It was a mess. (NYT)

For the uber-geeks among our people: This dude built a Spotify player. For his 1989-1991 vintage Macintosh SE/30. It was enough to drive us down alleys on the interwebs including Low End Mac, r/vintagecomputing and Ebay.

Enterprise+: Last Night’s Talk Shows

El Sisi in Austria dominates airwaves: President Abdel Fattah El Sisi’s speech at the High-Level Africa Europe-Forum was (expectedly) the main topic of discussion on the airwaves last night. We have more on the president’s remarks in Speed Round, below.

The president’s focus on the importance of digitization an information technology was not lost on the talking heads, all of whom praised the president for choosing to prioritize technological advancement in Egypt and Africa. Masaa DMC’s Osama Kamal, for one, said that El Sisi is the first Egyptian president to do so (watch, runtime: 03:43). Al Hayah Al Youm’s Khaled Abu Bakr also lauded El Sisi for highlighting the size of Africa’s youth population, which can drive the continent’s technological development (watch, runtime: 06:25).

The government’s digitization drive in Egypt is meant to both streamline services and curb corruption, and El Sisi wants to see the rest of Africa reaping the same benefits, Deputy CIT Minister Khaled Al Attar said on Hona Al Asema (watch, runtime: 07:23).

Sheikh Mabrouk Attia lambasted underage marriage as an unacceptable practice and one that is not religiously encouraged, telling Yahduth fi Masr’s Sherif Amer that the prevalence of child marriage is rooted in a lack of education (watch, runtime: 04:34).

A suggestion to increase class time spent teaching Egyptian students the English language was one of 13 recommendations that came out of the government-sponsored “Egypt Can With Education” conference, according to the chairman of the “Egypt Can”-branded conferences Hany Al Nazer (watch, runtime: 06:36)

A drop in demand for Egyptian labor in the Gulf is the result of declining oil prices and a general lack of development projects in GCC countries, head of the Cairo Chamber of Commerce’s foreign labor division Hamdy Emam said on Masaa DMC (watch, runtime: 06:43).

Speed Round

Speed Round is presented in association with

Will the central bank issue new licenses to international players looking to set up shop in Egypt? The Central Bank of Egypt is mulling whether to resume issuing licenses to international banks that want to open in Egypt, according to a report in state news agency MENA picked by Al Shorouk. The move will help boost confidence in the Egyptian economy and the banking sector, a CBE official told the state news agency, while also enhancing competitiveness. Several international banks have expressed interest in entering the Egyptian market, the unnamed source added.

Why this matters: Egypt has for years refused to issue new banking licenses, pointing potential market entrants — foreign and domestic, provided their names do not start with ‘Naguib’ and end with ‘Sawiris’ — to potential acquisition targets among the country’s nearly 40 licensed banks. The preference at the central bank for acquisitions over new licenses goes back to the early-to-mid 2000s, when it successfully drove the cleanup and consolidation of the banking industry after the non-performing loans crisis of the late 1990s (and the ex-bank pyramid / Ponzi schemes of the 1980s that tarnished the reputation of financial services for a generation).

Questions to ask yourself this morning: Did MENA get it right? If so, does the report mean rep office licenses (relatively easy to acquire) or new, full-service banking licenses? Is this for foreign entrants only, or would domestic players be allowed to apply? And is this a genuine trial balloon or a straw man — a bargaining chip in the ongoing behind-the-scenes fight over the still-not-released amendments to the Central Bank and Banking Act? Readers will remember the proposed changes to the act were controversial in the industry for proposals including term limits on bank MDs and a tithe on bank profits to endow an industry development fund.

Central bank still poking into crypto: The CBE is still working on feasibility studies on the potential issuance of a digital currency, Sub-Governor Ayman Hussein said earlier this week, positioning the study as part of the Sisi administration’s drive toward a cashless society. The sub-governor did not name the international institutions the CBE is working with or provide details on whether the currency would only be used in inter-bank transactions or made available for public use and trading. The story was picked up by Cointelegraph.

Background: The CBE has previously slammed cryptocurrency on more than one occasion, warning of the high risks (pdf) involved due to price volatility and a lack of governmental supervision. Hussein first hinted back in October that the CBE was mulling a policy shift. The CBE’s crypto study comes after Sweden’s central bank governor recently made the case for why central banks should investigate state-issued e-currencies (pdf).

Ride-hailing app Careem is in talks with three Egyptian banks to expand financing plans for Careem drivers who want to buy new vehicles, Careem Egypt CEO Wael Abou El Ela revealed, according to Al Mal. Some 1,000 drivers have financed new vehicles through the company’s existing agreement with Sarwa Capital. Abou El Ela also said Careem is working with the Madbouly government on the Ride-hailing Apps Act, which is scheduled to be released soon, especially concerning the ability of drivers to work with more than one service provider at a time.

M&A WATCH- OIH completes 30% acquisition of Sarwa at EGP 7.36 per share: Naguib Sawiris’ Orascom Investment Holding has acquired 30% (or about 216 mn shares) of structured- and consumer-finance player Sarwa Capital in an EGP 1.59 bn transaction at EGP 7.36 per share, according to an EGX statement (pdf). The EGX had given OIH five working days to complete the transaction. Orascom launched the tender on 27 November after winning approval from the Financial Regulatory Authority to seek a non-controlling stake in the structured- and consumer-finance player.

Why this matters: Sarwa is a market leader in its sector (it effectively created the market for securitized bonds in Egypt) and has a solid base on which to grow its consumer finance offering. The IPO unit of Beltone Financial (also an OIH-owned company) was handed a six-month suspension after it helped take Sarwa public — Sarwa shares plunged in their first day of trading, prompting the Financial Regulatory Authority to look into allegations of irregularities.

With the Sarwa acquisition, there are now three large-scale, full-service players vying for market share in Egypt’s non-bank financial service sector: EFG Hermes (which wrote the playbook for investment banks diversifying into NBFS with its launch of EFG Hermes Leasing and acquisition of microfinance giant Tanmeyah; it has since ventured into consumer finance, factoring and fintech), CI Capital (which went public this year after spinning off from CIB), and OIH.

But, but… EFG Hermes and CI Capital have larger, controlling stakes in their subsidiaries. The question now is whether OIH can pull off (or wants to pull off) a shift in strategy to become a genuine player as opposed to a holdco.

African assets have underperformed EM — and the rout isn’t over yet, Bloomberg argues. “The continent’s stocks and bonds have performed worse than those of all other emerging-market regions in 2018, reversing their outperformance of last year … and bargain hunters won’t necessarily jump in next year. Risks abound [including] low oil prices, potential credit-rating downgrades and the prospect of sovereign defaults.”

But Egypt could be a bright spot: Bloomberg calls the end of the central bank’s parallel FX repatriation mechanism earlier this month a “big step” even if it does leave the EGP “more exposed to market forces next year.” The response of investors has so far been “extremely positive and few are exiting their positions, according to Citigroup, which recommends that clients buy three-month T-bills yielding almost 20 percent.”

This comes as Goldman Sachs is calling a “bounce back” in EM currencies for next year, saying that “improving economic conditions in emerging markets over the coming months” will provide a “springboard for the value of regional stocks and currencies,” CNBC reports.

One emerging market not in favor at the moment: Dubai, which Bloomberg has dubbed the “Worst Stock Market of 2018.”

LEGISLATION WATCH- FinMin scraps proposed Customs Act amendments: Finance Minister Mohamed Maait has scrapped a set of proposed amendments to the Customs Act and will put it back up for public discussion in 1Q2019, Federation of Chambers of Commerce (FEDCOC) Head Ahmed El Wakeel told Al Mal. The proposed amendments — which included provisions to expedite the clearance of goods through customs, create a whitelist of importers and expand the Customs Authority’s powers — were widely criticized by both FEDCOC (that acronym…) and the Federation of Egyptian Industries.

Your MacBook Pro is now an essential import: Computers will be added to the list of imports on which customs duties will be calculated using the preferential exchange rate of EGP 16 to the greenback, Finance Minister Mohamed Maait announced yesterday according to AMAY. Maait added that the decision took effect yesterday at customs ports of entry. Customs Authority Head Kamal Negm also announced that, for the first time, importers will be able to pay customs duties in installments, Ahram reports.

El Sisi stresses importance of tech, digitization to Africa’s development: The advancement of technology and digitization in Africa is key to the development of the continent’s infrastructure and economic competitiveness, President Abdel Fattah El Sisi said at the High-Level Africa- Europe Forum in Austria yesterday, according to a readout of his speech. African countries have been struggling to compete with the rest of the world despite “significant” improvements in many countries’ economic performance, El Sisi said, pointing to a combination of internal struggles such as instability and terrorism, along with external pressures. Technology could serve as a “golden gateway” to help bring Africa up to speed with the rest of the world, he said, urging the international community to increase its involvement and investments in Africa to spur the continent’s development. El Sisi’s focus on driving growth and infrastructure development in the continent comes as Egypt is set to begin its one-year term chairing the African Union in February.

El Sisi also talked illegal migration with Maltese Prime Minister Joseph Muscat, who expressed his country’s interest in cooperating closely with Egypt on the issue “given that both Egypt and Malta are destinations as well as crossing countries for migrants,” according to an Ittihadiya statement (pdf). The president also discussed Egypt’s economic reforms and mega projects with World Bank CEO Kristalina Georgieva, Ittihadiya said (pdf). The World Bank had pledged earlier this month USD 1 bn in fresh financing to support the next phase of Egypt’s reform program, which focuses on spurring private sector growth.

Sound and Light Company scraps USD 10 mn Giza Plateau development contract with OIH: The Sound and Light Cinema Company (SLCC) is working to annul its contract with Orascom Investment Holding (previously known as OTMT) for the USD 10 mn development project at the Giza Plateau, Egyptian General Company for Tourism and Hotels (EGOTH) Chairperson Mervat Hataba tells Al Mal. The company has failed to begin work on the project, despite the grace period officially ending tomorrow, sources tell the newspaper, and SLCC is annulling the contract on the grounds that OIH did not meet its contractual obligations. According to the newspaper, OIH and Prism Entertainment — which was partnering with OIH to help develop and run the sound and light show — reached a disagreement over Prism reportedly failing to carry out the work it was responsible for under the partnership, despite OIH dishing out some EGP 30 mn for the French company. SLCC now plans to re-issue its tender for the contract, and OIH intends to submit a bid again, OIH CEO Tamer El Mahdy said.

Background: Prism had entered into an agreement with Saudi-owned City Stars Properties in 2015 to spend USD 50 mn improving SLCC facilities and services at the Giza Plateau. OIH later bought out City Stars’ share in the project after the Saudi company decided to quit the project for reasons that remain unclear.

Tourism to Egypt is growing amid an upswing of interest in the destination from US and European travelers, reports Skift, arguably the most influential publication in the global travel industry. Relative calm in Egypt after a period of unrest and word-of-mouth has dispelled fears and encouraged tourists, especially Baby Boomers, to visit Egypt, Skift notes. Tour operators have seen steadily growing demand, with luxury outfit Alexander + Roberts seeing a fivefold increase in departures for Egypt and Abercrombie and Kent adding 34 departure dates to its flagship group journey Egypt & the Nile. Big European tour operators also saw a 40% uptick in demand for Egypt during the first nine months of 2018. Egypt bookings also had a 264% increase during the past year, according to travel agency Virtuoso, second only to Turkey’s 310 percent increase. Egypt’s travel momentum is expected to continue into 2019, barring any … uhm … exogenous shocks.

INVESTMENT WATCH- Libya Oil Group plans to invest EGP 500 in Egypt over the next five years, the group announced as it unveiled the new brand name “OLA Energy” for all its outlets and products, according to its official statement (pdf). OLA Energy’s expansion plan includes injecting EGP 500 mn in Egypt over the next five years, with a plan to increase its 90 stations to 110 by 2021, as well as setting up its first storage warehouse in Alexandria.

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Egypt in the News

Leading the conversation on Egypt in the foreign press this morning is its standing as one of the world’s top jailers of journalists this year, according to Reporters Without Borders (RSF). According to the Paris-based organization, the number of detained journalists in Egypt, China, Iran, Saudi Arabia, and Turkey together account for more than half of those detained worldwide — a statistic that remains unchanged from 2017. Reuters, the Associated Press, and the LA Times have all taken note, with the latter delving into Egypt’s recent history of detentions during its clampdown on “fake news.”

On an otherwise slow day, Al Monitor says economists are worrying about Egypt’s rising debt levels as it takes on more development projects, some of which seem more focused on breaking records than spurring industrial development.

On The Front Pages

On the front pages of all three state-owned dailies is President Abdel Fattah El Sisi’s speech at the High-Level Africa-Europe Forum in Austria yesterday (which we recap in detail in Speed Round, above). Al Ahram frames the speech as El Sisi positioning Egypt as a “bridge” between Europe and Africa, while Al Akhbar and Al Gomhuria focus on the president’s remarks on African countries’ challenges and potential for development.

Worth Reading

It’s not rocket science: People who work a four-day week instead of five report more productivity, more motivation, and less burnout, reports Reuters. Companies based as far apart as Germany, Japan, New Zealand, and Britain are advocating for a shift to a shorter work week. As the tech we use at work made its way into our personal lives, an increased number of people find themselves working longer hours, without necessarily yielding better results. “A recent survey of 3,000 employees in eight countries including the United States, Britain, and Germany found that nearly half thought they could easily finish their tasks in five hours a day if they did not have interruptions, but many are exceeding 40 hours a week anyway,” the newswire says.

Advocates of the shift to a shorter work-week point to the benefits for those struggling to balance their professional and personal lives, and suggest that reducing the number of days people work each week would create a natural place for robots and AI to be integrated into the workforce without replacing humans. Employees are also likely to be more focused if their working hours are reduced, since they will feel the need to complete the same workload in less time.

Worth Watching

An oceanic whitetip shark latched onto a diver’s leg in the waters off Brothers Islands in the Red Sea early last month,a video of the incident, courtesy of the New York Post, shows. The video shows the shark being startled by one of the divers’ air bubbles, then attacking and biting his leg. The shark eventually let go after another diver intervened, and the victim was taken back to his boat and treated at a nearby hospital (watch, runtime: 0:53).

Diplomacy + Foreign Trade

Egypt’s interior minister and IOM chief discuss illegal migration: Interior Minister Mohamed Tawfik discussed yesterday curbing illegal migration from Africa withInternational Organisation for Migration (IOM) Director General António Vitorino, according to a ministry statement. The intergovernmental body is looking to work with Egypt to support other African states in combating illegal migration as well as human trafficking, especially as it moves closer to chairing the African Union.

Egypt and Pakistan are looking to enhance military cooperation, especially in the fields of defense manufacturing, training and intelligence, according to Pakistan’s The Nation. The agreed upon cooperation followed a meeting between Pakistani Army Chief of Staff Qamar Javed Bajwa with Defense Minister Mohamed Zaki and Chief of Staff Mohamed Farid in Cairo earlier this week.


TAQA, Alcazar, FAS Energy to link 150 MW of power to nat’l grid in two weeks

TAQA Arabia, Alcazar Energy, and FAS Energy are expected to complete each of their 50 MW solar power plants in Aswan’s Benban solar power park and link them to the national grid within two weeks, Electricity Ministry sources said. Alcazar and TAQA, a subsidiary of Qalaa Holdings, have each completed around 97% of their respective plants, while FAS is reportedly scheduled to complete its plant within the coming few days.

Egypt pays Dana Gas an equivalent of USD 20 mn in arrears

Egypt has paid UAE’s Dana Gas the EGP equivalent of USD 20 mn in arrears, bringing total receipts to USD 152 mn, according to a company press release (pdf). The company also said it expects another payment to be made in USD by year-end to move forward with plans to drill a deepwater exploration well in North El Arish. The payment comes as Egypt pledges to fully repay amounts owed to international oil companies by the end of 2019.

Edison gives up exploration rights in North East concessions

Italy’s Edison has forfeited its natural gas exploration rights in North East concessions Hapi and Theqa, local news reported. A new international tender for the concessions will be launched next year, an Oil Ministry source said, without specifying a time frame. Edison signed a USD 86 mn agreement with EGAS in January 2017 for E&P operations. Oil Minister Tarek El Molla said in July the Italian company would begin drilling exploratory wells at the concessions in 2H2019.


Egyptalum to review tender offers on 31 December

Egypt Aluminum (Egyptalum) will review on 31 December offers it received in a tender to build a new USD 600 mn product line that’s expected to increase production capacity to 570K tonnes from 320K tonnes, the company said in an EGX disclosure (pdf). Nine companies have submitted offers, including the US’ Bechtel Corporation and Canada’s SNC-Lavalin, Al Mal had previously reported. The state-owned company has reportedly been in talks with five local and international banks to finance a portion of the project.

Real Estate + Housing

Egypt’s First Group to invest EGP 6 bn in new real estate projects

First Group for Real Estate Investment will invest up to EGP 2.25 bn in new projects in 2019, Chairman Bashir Mostafa said. The new projects will include development in the North Coast and Ain Sokhna. The company will finance 25% of the projects through bank loans.


ODE inks agreement with Thomas Cook to develop hotel, rebrand another in Gouna

An Orascom Development Egypt (ODE) subsidiary has inked an agreement with global tour operator Thomas Cook to develop a hotel and rebrand another in the Red Sea’s El Gouna resort town, according to a company press release. Orascom Hotels Management (OHM) will develop Casa Cook Hotel, which is expected to open as early as October 2019, and rebrand Arena Inn into Cook’s Club Hotel, which is expected to open in the summer of 2019. There was no mention of the size of the agreement.

Egypt calls off tender for 51% stake in Shepheard Hotel

State-owned Egyptian General Company for Tourism and Hotels (EGOTH) has called off a tender to sell a 51% stake in the iconic Shepheard Hotel in Downtown Cairo, Chairperson Mervat Hataba said, according to Al Mal. The company received two offers from potential partners, one from India’s Tata subsidiary Taj Hotels and another from local construction firm Samcrete, but neither was able to meet the tender requirements. EGOTH was aiming to form a JV with the private sector to develop the hotel at an estimated cost of USD 130 mn.

EgyptAir to begin domestic flights from and to Sphinx International Airport next month

National flag carrier EgyptAir will begin operating domestic flights to and from Sphinx International Airport on a trial basis between 25 January and 9 February 2019, according to a ministry statement. Sphinx International Airport, located on the Cairo-Alexandria desert road, was inaugurated in October to primarily cater to residents of Giza, 6 October and Haram.

Automotive + Transportation

Egypt sets 31 January as deadline for bids for Alamein-Ain Sokhna train

Egypt’s transport and housing ministries have pushed to 31 January the bids deadline to “design, build finance and operate” a high-speed train linking Ain Sokhna and the New Alamein city, according to MEED (paywall).

SCA increases fee discounts for tankers passing from US to Asia in 2019

The Suez Canal Authority (SCA) will offer fee discounts of 50-75% for fuel tankers traveling between the US or Latin America and Asia for one year as of January 2019, according to Al Mal.

Banking + Finance

Farmer’s syndicate head calls on CBE for bank loan extension

Farmer’s Syndicate head Hussein Abdel Rahman called on the Central Bank of Egypt (CBE) to extend the deadline for its initiative to support farmers, under which banks exempt debtors from paying accrued interest on unpaid loans if they pay their principal amounts before 31 December, AMAY reports. Under the CBE’s initiative, state-owned banks settle debts under EGP 10 mn with “distressed” farmers and businesses, withdraw any legal charges, and remove debtors from the CBE and the Egyptian Credit Bureau (iScore) blacklists.

Other Business News of Note

Damietta Furniture City, Military Production Ministry to build EGP 3 bn mall

The Damietta Furniture City Company and a Military Production Ministry subsidiary will build a EGP 3 bn furniture mall in Damietta Furniture City, sources close to the matter said, according to Al Mal. The project will be funded through the ministry.

Egyptian businessmen to set up company in Tanzania to boost Africa exports

Ten unnamed Egyptian businessmen are working on setting up a company in Tanzania to boost Egyptian exports in Africa, Federation of Egyptian Industries (FEI) board member Mahmoud Sarg said. The company, which will export Egyptian products to Tanzania and neighboring countries, will be in business by 1Q2019, Sarg said.

Legislation + Policy

House committee working on bill to manage population growth

The House Defense and National Security Committee is working on a bill to control Egypt’s rapidly growing population through offering benefits and incentives to parents with no more than two children, Egypt Today reported. Committee Head Kamal Amer said the draft law, which will not include punishments, will be issued during the current legislative session. The Social Solidarity Ministry had launched in May a EGP 100 mn “Two is Enough” family planning program, which aims to curtail the country’s birth rate. Prime Minister Moustafa Madbouly had also announced last month that the government will limit cash benefits under the Takaful and Karama welfare programs to the first two children in each family as an incentive to practice birth control.

House MP wants to fix divorce rates by limiting ‘khula’ law

House Rep. Suleiman El Emeiry has requested that the government draft a bill that would impose greater restrictions on women’s ability to initiate divorces in Egypt through “khula,” which allows them to lawfully end their marriage without permission from their husband, Al Mal reports. Women who initiate khula are also required to forfeit their financial rights, including alimony, in the divorce. According to El Emeiry, granting women this right has resulted in a higher divorce rate, which the government should seek to reduce once again. Cabinet spokesperson Nader Saad had said last month that the government is preparing an initiative to encourage couples to stay together rather than seek divorce, as one fifth of marriages in Egypt end within the first three years.

Egypt Politics + Economics

Prosecutor General refers policeman to trial for killing Christian father and son

Prosecutor General Nabil Sadek referred yesterday a police officer to trial on charges of the premeditated murder of a Coptic Christian father and son in Minya, Reuters Arabic reported. The police officer, Rabea Khalifa, reportedly shot the father and son after an argument last Wednesday. The killing sparked backlash with hundreds in Minya staging a protest to express their anger last week.

Cairo Criminal Court orders release of human rights activist Amal Fathy

The Cairo Criminal Court ordered yesterday the release of human rights activist Amal Fathy under probationary measures, Al Shorouk reports. Fathy had been detained on charges of “spreading false news” and belonging to a terrorist group. The activist is still facing a two-year prison sentence in a separate case pertaining to her controversial Facebook video, in which she spoke about her experience with [redacted] harassment. Italian outlet ANSAmed — which notes that Fathy is the wife of one of the consultants to Giulio Regeni’s family — and Amnesty International also took note of yesterday’s ruling.

On Your Way Out

The National Council for Childhood and Motherhood intervened to prevent an underage marriage between a 15-year-old girl and a 14-year-old boy in Kafr El Sheikh after videos of the teenagers’ engagement party went viral on social media, according to Ahram Online. Following the council’s intervention, the children’s parents said they would wait until they both reach the legal marrying age, which was set at 18 in 2008.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.86 | Sell 17.95
Buy 17.89 | Sell 17.96
EGP / USD at NBE: Buy 17.78 | Sell 17.88

EGX30 (Tuesday): 13,121 (-0.7%)
Turnover: EGP 817 mn (1% above the 90-day average)
EGX 30 year-to-date: -12.6%

THE MARKET ON TUESDAY: The EGX30 ended Tuesday’s session down 0.7%. CIB, the index heaviest constituent ended down 0.5%. EGX30’s top performing constituents were Telecom Egypt up 2.9%, and Global Telecom up 2.5%, and Egyptian Resorts up 1.5%. Yesterday’s worst performing stocks were Qalaa Holdings down 3.8%, SODIC down 3.6% and Madinet Nasr Housing down 2.8%. The market turnover was EGP 817 mn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -568.9 mn
Regional: Net Short | EGP -497.4 mn
Domestic: Net Long | EGP +1066.3 mn

Retail: 32.3% of total trades | 22.9% of buyers | 41.7% of sellers
Institutions: 67.7% of total trades | 77.1% of buyers | 58.3% of sellers

WTI: USD 46.46 (+0.48%)
Brent: USD 56.57 (+0.55%)

Natural Gas (Nymex, futures prices) USD 3.81 MMBtu, (-0.86%, January 2019 contract)
Gold: USD 1,252.70 / troy ounce (-0.07%)

TASI: 7,943.39 (-0.31%) (YTD: +9.92%)
ADX: 4,828.67 (-0.76%) (YTD: +9.78%)
DFM: 2,511.08 (-2.05%) (YTD: -25.49%)
KSE Premier Market: 5,357.60 (-0.82%)
QE: 10,489.04 (-0.07%) (YTD: +23.06%)
MSM: 4,379.49 (-0.65%) (YTD: -14.12%)
BB: 1,314.27 (-0.38%) (YTD: -1.31%)

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December: The government will announce the second phase of its privatization program before year-end, Public Enterprises Minister Hisham Tawfik said. The committee overseeing the state privatization program is also scheduled to hold a meeting next month to look into how market conditions developed since the privatization program was put on ice

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, head Ahmed El Wakeel said.

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

Mid-late December: The bylaws and articles governing Egypt’s upcoming, EGP 200 bn sovereign wealth fund will be completed, Planning Minister Hala El Said said. Cabinet is currently conducting its final review.

Mid-late December: The Electricity Ministry is set to sign an MoU with Cypriot officials to begin constructing the USD 1.5 bn subsea power cable to link Egypt’s electricity grid with Cyprus’, minister Mohamed Shaker said, according to Al Mal.

23 December: The Financial Regulatory Authority (FRA) will hold a hearing to review the conditions it set for Raya Holding founder Medhat Khalil’s mandatory tender offer (MTO) to take Raya private, local news reported.

25 December (Tuesday): Western Christmas.

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

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

Early January 2010: Government to release details about its international bond issuance.

01 January 2019 (Tuesday): New Year’s Day.

01 January 2019 (Tuesday): Custom duties on EU-made car imports will fall to 0%, and we still have no automotive directive or any policy incentivizing local car manufacturing.

05 January 2019 (Saturday): An administrative court will hear Beltone Financial’s appeal against a six-month suspension the FRA handed to its investment banking arm, Youm7 reported.

07 January 2019 (Monday): Coptic Christmas, national holiday.

10-13 January 2019 (Thursday): International Property Show (IPS), Egypt International Exhibition Center

19 January 2019 (Saturday) Cairo Criminal Court scheduled hearing of Gamal and Alaa Mubarak’s stock market manipulation case

21-22 January 2019 (Monday-Tuesday): EPEA and IFC’s SME Governance Workshop at the Fairmont Nile City Hotel.

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.

26 January 2019 (Saturday): Supreme Administration Court’s Uber / Careem appeal date, Egypt.

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.

April 2019: The African Tripartite Trade Area (TFTA) agreement is set to take effect in April after a majority from the participating governments ratified it, COMESA Secretary General Chileshe Kapwepwe according to Al Shorouk.

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

December 2019: Egypt will host for the first time the Pack Process trade expo for the Middle East and African region

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