Monday, 14 January 2019

Egypt is Citi’s most attractive frontier market for ‘19

TL;DR

What We’re Tracking Today

Expect today’s news to be led by Finance Minister Mohamed Maait’s trip to Asia to soften the ground for upcoming bond issuances, but there’s a seam of corporate news to be mined as execs return to work from their year-end holidays: Zooba (purveyors of our breakfast hawawshi) raised capital to open their first outlet in New York; a Mercedes-Benz distributor has settled a unspecified dispute with the Madbouly government; CI Capital wants to get into mortgage finance; mobile network operators are looking for relief from a new government fee they say has sapped appetite for new lines; and Maait promised tax stability yesterday as he also said the government could look again at how it plans to implement a tax to fund universal healthcare.

Oh, and the rules under which orders are taken and shares are priced during IPOs may be changing in the wake of the flap over the Sarwa Capital listing this past fall.

Gas producers in the East Mediterranean are scheduled to gather today in Cairo, an unnamed Oil Ministry official said, according to Al Shorouk. Oil Minister Tarek El Molla will convene a meeting of his Greek, Cypriot, Italian, Israeli, and Jordanian counterparts as well as envoys of the Palestinian Authority. Egypt’s bid to become the premier energy hub in the Eastern Med will be a cornerstone of the meeting, the official staid.


Salaries for top Middle East banking and finance professionals are down by as much as 25% in the past year, according to a Bloomberg story citing data from recruiter Michael Page: “Pay for senior bankers fell between 20 percent and 25 percent, while salaries for middle-management positions dropped 5 percent to 10 percent, according to the recruitment consultant’s annual salary survey. Bonuses have also been cut with the average payout now equaling to one or two months’ salary compared with three to four a few years ago.”

The survey specifically focuses on the GCC, where it notes that under pressure from slumping oil prices, finance execs have also lost perks including school fees and other benefits.

Also hurting: Salaries in the GCC are also down in oil and gas, construction and retail, while accounting jobs are moving out of the Mideast to India and Southeast Asia, the report suggests.

So what, maybe we need to stay here at home and make a go of it?


US wants quartet to end Doha fight: US Secretary of State Mike Pompeo urged Arab countries to end the fight with Doha, saying the row is a distraction from the more important fight to contain Iran, Reuters reports. “When we have a common challenge, disputes between countries with shared objectives are never helpful,” Pompeo told reporters in Doha on Sunday.

Just another day in the neighborhood: The Donald has threatened to “devastate Turkey economically if they hit Kurds” as the United States starts withdrawing its troops from Syria, Politico writes.

In miscellany worth knowing this morning:

A “faltering China” is the new Emerging Markets Zombie Apocalypse for the global business press. Witness Reuters’ report overnight that Chinese foreign direct investment into North America and Europe fell 78% last year, while the Financial Times writes that “from cars to smartphones, signs of weakening [Chinese] demand worry multinationals” in the ominously headlined piece Clouds loom over global business as Chinese economy falters.

Imagine if the FRA were to take an enforced holiday: The US government shutdown continues, making it the longest forced break of in American history. Big Finance is taking notice, as the shutdown threatens to “delay initial public offerings and takeovers that require national security clearance or approval from competition watchdogs,” the Financial Times reports. A key Republican senator close to The Donald is backing a temporary reopening of government in a bid to pave the way for talks with Democrats, Reuters adds. The Dems have rejected Trump’s request for USD 5.7 bn to build a wall on the US border with Mexico.

Uber, Lyft, Airbnb, Slack, Palantir and Pinterest are the unicorns most likely to go public in 2019, Bloomberg suggests. Despite the ongoing US government shutdown and stock market volatility of recent months, the possibility remains strong that at least some of these IPOs will take place in what is already shaping up to be a year set to keep investors on their toes as far as IPOs go.

PSA- The sandstorm is over, the national weather office suggests. Our favorite weather app suggests Cairenes can expect a cloudy and generally windy morning with a chance of sunshine this afternoon. Look for a daytime high of about 17°C in the capital city and an overnight low of 8°C.

Enterprise+: Last Night’s Talk Shows

No particular issue dominated the airwaves last night. Al Hayah Al Youm featured a segment on the CI Capital MENA Investors Conference, highlighting comments from Prime Minister Mostafa Madbouly on GDP and inflation (watch, runtime: 01:13). The segment also highlighted a call by Investment Minister Sahar Nasr for investors to take another look at potential investments here in light of the country’s incentives (watch, runtime: 00:42).

President Abdel Fattah El Sisi’s meeting with King Abdullah of Jordan also got some attention on the airwaves, with Hona Al Asema pointing out that discussions focused on the Israel-Palestine peace process and the Egypt-Jordan natural gas export agreement (watch, runtime: 03:06). The LNG export pact was also a point of discussion on Masaa DMC(watch, runtime: 00:59). We have more on this in Diplomacy, below.

Egypt is looking to Europe as the prime market for energy exports as it continues its drive to become a regional energy hub, Oil Minister Tarek El Molla told Al Hayah Al Youm’s Lobna Assal (watch, runtime: 06:55).

Meanwhile, El Hekaya’s Amr Adib was still hung up on US Secretary of State Mike Pompeo’s visit, which he simultaneously dissected and offered no valuable insight on (watch, runtime: 06:19).

Nth attempt to keep heavy-duty trucks off Egypt’s highways: A 2014 decision barring heavy-duty trucks from driving on the Alex Desert Road from 6 am until midnight will be enforced as of Friday night, New Urban Communities Authority deputy head Abdel Moteleb Mamdouh said on Hona Al Asema (watch, runtime: 04:44).

Speed Round

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Egypt is Citi’s most attractive frontier market for 2019, according to a research report picked up by CNBC Africa that notes “the Sisi government is pushing ahead with an ambitious package of reforms, and while the country’s 2016 IMF programme has faced some delays, the programme is likely to underpin macroeconomic stability, supported by growth in gas production and tourism.”

Other good news on Egypt: Valuations are low; earnings momentum is good, defying the trend in frontier markets; and economic growth is above average.

Citi sees no significant devaluation in the cards, writing that “despite the recent surge in inflation, we expect currency stability and see decent upside among financials (CIB), construction (Orascom), real estate and consumer staples (Edita, Juhayna).”

Citi’s other tops picks on the frontier include Kenya and Romania.

Maait heads to Asia to pave the way for bond issuances: Finance Minister Mohamed Maait will begin a trip today that will see him visit Japan, South Korea, Hong Kong and China to discuss bond issuances. The government is now more flexible and is seeking to diversify “the currency, the type of asset and the target market,” he told reporters at the CI Capital MENA Investors Conference, which we attended yesterday. Our sources at the Finance Ministry also tell us that Maait’s trip will also extend to Europe and select cities in the US. Investment banks and financial institutions are arranging sit-downs with potential investors to help gauge appetite for Egyptian debt, our sources say.

Egypt to issue Samurai bonds next week? The news comes Reuters reports that Egypt will issue USD 2 bn of yen-denominated bonds “in the coming week,” citing two unnamed sources. Proceeds from the issuance will be earmarked for paying down debt at state petroleum supremo EGPC, one of the sources said. Maait had told Bloomberg in October that the ministry plans to issue both yen and yuan-denominated bonds for the first time in 1Q2019. The government is also looking to sell eurobonds in 1H2019 and had been focused on promoting the issuance in Asia. The move comes part of the government’s efforts to diversify the country’s sources of debt finance.

Foreign bond issuances could total USD 7 bn in 1Q2019: Egypt could issue up to USD 7 bn worth of FX-denominated bonds following the Madbouly Cabinet’s approval, Maait told reporters at the CI Capital conference yesterday. “The value will not be less than USD 3 bn and will not exceed USD 7 bn,” he said. Maait had said in September that the ministry is aiming to issue around USD 5 bn worth of bonds. “The ministry has got approval from the cabinet to offer international bonds and the procedures have started,” the minister noted. However the government is yet to finalize the details regarding the value and denomination of the bonds. Cabinet had signed off last week on the Finance Ministry’s debt control strategy, which caps Egypt’s eurobond issuances at USD 22 bn until the end of FY2021-22.

Maait also yesterday that said he hopes to see interest rates come down, especially with debt levels being as high as they are. Meanwhile, talks with the IMF on the delayed USD 2 bn disbursement are progressing and the ministry will come out with a statement soon, he told reporters at the CI Capital conference. The IMF had said that it would wait and see how Egypt implements the new fuel pricing strategy, announced last week by the government, before committing the disbursement.

The finance minister also pledged that tax rates won’t be changing soon, sticking to the Sisi administration’s policy of tax-rate stability.

EXCLUSIVE- Zooba raises USD 4mn in funding for drive to expand into New York. Our friends at Egyptian street food restaurant chain Zooba are set to open their first US location in the Manhattan neighborhood of Nolita, according to an emailed statement (pdf). The Egyptian dining chain raised USD 4mn to fund the flagship outlet as part of its “long-term aim of spreading across the US like bessara on baladi bread.” Key team members including founder and CEO Chris Khalifa will be relocating stateside to oversee the expansion, which will begin with the “scale out of the Zooba brand in the city.” Former Zooba marketing manager Ahmed Fahmy will take over as Egypt country manager. “Representing Egyptian street food and culture the world over is no longer simply our goal; it is our mission,” the company said.

Zooba is also expanding into Saudi Arabia and Bahrain, where it recently signed its first franchise agreement, Khalifa told us yesterday from New York, adding that he expects the company’s first location to open in Riyadh before this summer. The run caps a busy fall-winter season for the restaurant company, which launched a new menu in October and opened a branch in Sheikh Zayed in November that gives it six locations in the Greater Cairo Area. Zooba opened its doors on 31 March 2012.

Pictured above: The light grayish building on the corner is the home of Zooba’s future flagship restaurant in Manhattan.

Gov’t settles EGP 700 mn customs dispute with Mercedes importer: The Madbouly Cabinet’s investment dispute resolution committee has settled a c. EGP 700 mn (USD 39.2 mn) dispute between the Customs Authority and an Egyptian importer of Mercedes-Benz cars, according to a Finance Ministry statement. The statement did not name the company or provide details of the dispute. The announcement comes just days after Mercedes production head Markus Schaefer told Prime Minister Moustafa Madbouly his company could resume assembly in Egypt “soon” after a years-long suspension.

CI Capital plans to launch mortgage financing arm by early 2Q2019: CI Capital has submitted a request to the Financial Regulatory Authority for a mortgage financing license, Co-CEO Hazem Badran said in an interview on the sidelines of the CI Capital MENA Investors Conference. The investment bank expects to get the new unit up and running in 1Q or early 2Q2019, Badran said.

FinMin signals it may be willing to revisit tax scheme under Universal Healthcare Act: The Finance Ministry is “willing” to revisit the legislative framework that sets out the taxes the government will collect to fund the universal healthcare scheme under the Universal Healthcare Act, Minister Mohamed Maait said at a Thursday meeting with several accounting firms and other representatives of the business community, according to local press reports.

Business wants a tax on profits, not revenues: The Universal Healthcare Act sets a 0.25% tax on sales revenues for every company operating in Egypt to fund the planned EGP 600 bn healthcare system. Some in the business community want to change the definition of taxable revenue, while others want to see the levy be on the bottom line, not the top line. And most in the community want the levy to be counted against companies’ pre-tax net income, arguing that to do otherwise would constitute double taxation.

Change would be an elaborate process: Maait noted that any change to the tax structure would require approval from President Abdel Fattah El Sisi before any changes move through cabinet and, ultimately, the House of Representatives for a vote. Our backgrounder on the taxes is here.

LEGISLATION WATCH- Proposed changes to how banks are taxed get committee-level approval in the House: The House Planning and Budget Committee has given a nod to government-proposed amendments to the Income Tax Act that would change how banks and corporations account for income from investments in government debt, Al Mal reports. The House of Representatives began discussing the amendments yesterday, Finance Minister Mohamed Maait said, adding that the bill should be approved by parliament’s general assembly and make its way to President Abdel Fattah El Sisi for ratification this month. A contradictory report on Al Shorouk quoted Maait on Sunday as saying that the ministry is close to finalizing the amendments and will put it up for public discussion within the coming weeks.

Background: The Madbouly Cabinet had approved in November the amendments, which would require banks and corporations to split their books, separately accounting for income earned from holdings of government debt. Analysts initially said that the new accounting mechanism would result in a c.37% effective tax rate for a model bank, compared to a current 24%. Maait had also said last month that the amended tax treatment would also be applied to corporations, but suggested that, unlike banks, corporates could invest surplus liquidity in other instruments such as time deposits and thus sidestep the new treatment.

LEGISLATION WATCH- The central bank has finished drafting its new Banking Act and has sent it to the Madbouly Cabinet for review, Youm7 quotes CBE Deputy Governor Lobna Helal as having said yesterday at CI Capital’s MENA Investors Conference. The timing of cabinet’s review remains unclear. CBE Governor Tarek Amer had discussed with President Abdel Fattah El Sisi in November final amendments to the bill, which — once approved by Cabinet — will move to the House of Representatives for committee review and a vote in the general assembly.

Background: An earlier draft of the bill was controversial for expanding the powers of the central bank as the industry’s regulator, imposing term limits on bank managing directors, and proposing an annual tithe on bank profits to endow an industry development fund.

EXCLUSIVE- Tax Authority to discuss fees on new mobile phone lines with MNOs following drop in subscribers: The Tax Authority is set to meet tomorrow with representatives from Egypt’s four mobile network operators to look into their grievances over a levy on new mobile phone line purchases that was imposed at the start of the fiscal year in July, authority head Abdel Azim Hussein tells Enterprise. The one-time EGP 50 duty on new lines — which was introduced as part of a package of new administrative services meant to help diversify the state’s sources of income — has been blamed for the decline in Egypt’s mobile phone penetration rate in October. The MNOs are expected to push for the levy to be scrapped altogether, another senior official tells us.

Background: The Finance Ministry had said last year that it could raise the stamp tax on mobile phone bills by 2-4x or introduce an entirely different fee to replace the EGP 50 levy, a senior government official had told us at the time. Mobile network customers currently pay EGP 6 a year in stamp tax dues for their credit usage.

REGULATION WATCH- FRA drafting new regulations for IPO bookbuilding process: A Financial Regulatory Authority (FRA) committee is looking at new regulations to govern the bookbuilding process during IPOs, including the pricing and allocation of shares, unnamed sources tell Al Mal. The committee’s recommendation will pass through the FRA’s board of directors and head, Mohamed Omran.

What stipulations are investment banks looking at under these regs? The proposed regulations would create an app of sorts IPO managers would be required to use to record the allocation of shares during the bookbuilding process. The FRA would have exclusive to these records, granting it oversight over the process. The regulations would also require investors to pay up front for 10-25% of the shares they request during the bookbuilding process, and brokerages would be held responsible for paying for any allocated shares that investors back down from paying for. Foreign investors and others participating in Egypt’s delivery-versus-payment (DVP) mechanism would be exempt from this requirement. The committee is also looking at how oversubscription rates are calculated and share prices are set.

The sources don’t say it, but it is clear that the potential changes are a direct outgrowth of the flap over Sarwa Capital’s IPO this past fall. The IPO has been at the heart of the FRA’s ongoing dispute with Beltone Financial, which managed the consumer- and structured-finance player’s EGX debut. The FRA has leveled accusations of misconduct against Beltone’s investment banking and brokerage arms, with many of the accusations centering on the exact issues the committee is looking to address in the proposed regulations.

M&A WATCH- FRA grants SODIC 60-day grace period to submit MTO for MNHD acquisition: The Financial Regulatory Authority (FRA) has approved upmarket real estate developer SODIC’s request for a 60-day grace period to submit its mandatory tender offer to acquire at least 51% of Madinet Nasr Housing and Development (MNHD) through a direct share swap, the FRA said in a statement yesterday (pdf). SODIC said in a statement to the EGX (pdf) yesterday that it needs more time to complete its due diligence and the valuation report, both of which are required before carrying through with the transaction. SODIC had announced in October it has preliminarily set the swap ratio at two shares of MNHD for one share of SODIC, and the transaction could allow MNHD to remain listed on the EGX. The transaction would be the first all-share M&A on the EGX, with regulations allowing the transaction still in the pipeline. The acquisition will rank as one of the largest in EGX history.

Advisers: MNHD had tapped EFG Hermes to advise on the transaction, while Zaki Hashem & Partners are serving as legal counsel. SODIC had previously appointed CI Capital and White & Case as its advisers.

Ibnsina to distribute Novartis’ Alcon products in Egypt: Ibnsina Pharma will distribute global eye care product manufacturer Novartis’ Alcon’s products in Egypt, according to a company statement (pdf). The newly inked agreement lends further credence to the argument “that exclusivity is dying in the pharma market,” Ibnsina Co-CEO Omar Abdel Gawad says. As the fastest growing distributor in Egypt, suppliers who want to grow at or above the market growth rate, have to contract with Ibnsina Pharma to achieve their targets.”

LEGISLATION WATCH- House approves bill setting up council for persons with disabilities: The House of Representatives’ general assembly approved yesterday legislation to establish the National Council for Persons with Disabilities, according to Youm7. The 19-member body replaces the National Council for Disability Affairs and is responsible for creating better conditions for the disabled. Prime Minister Moustafa Madbouly had also issued last month the executive regulations to the recently enacted Disabilities Act. The regs establish special healthcare, education, employment and rehabilitation government services and allow welfare payments for those unable to work due to their disability.

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The Macro Picture

Recessions remain one of the greatest mysteries of economics: Is old age the culprit, or are they self-fulfilling prophecies? Economists widely disagree on the root causes of recessions — and often falter when it comes to predicting them. The theories for why long-term growth occasionally leads to economies going belly up are many — but often contradict one another and are rarely backed by data, Peter Coy writes for Bloomberg Businessweek. Growth streaks, like the US’ current 10-year-long one, often raise questions on whether a slowdown is just around the corner. Economists recently surveyed by Bloomberg see a 25% probability of a US recession this year, up from 20 percent in a survey in December.

Is it the gray hair? Coy points out that while there has yet to emerge a concrete theory for the business cycle,a popular belief is that expansions just die as they age — when consumer, business and investor confidence decay, so do economic expansions.

Self-fulfilling prophecy: Animals spirits — the notion of how consumer psychology affects markets and, in doing so, the economy as a whole —has been known to usher in recessions. In other words, growth can be “murdered” when we start preparing its funeral prematurely, Coy points out. It’s not always the consumers driving sentiment though — do-gooders can be the biggest troublemakers: If the Fed keeps raising interest rates, what does that tell us exactly about the US economy? Coy asks.

Egypt in the News

How slow a news day is it for Egypt in the international press? UK tabs are back to one of their favorite memes: Brit goes on holiday to a sunny destination peopled by non-melanin-challenged people. Brit gets a tummyache. Brit’s holiday is absolutely ruined. The perfidy. Per The Sun: An English couple honeymooning suffered food poisoning while staying on the Red Sea. After returning home, Cristina Calafateanu was diagnosed with the bacterial infection shigella, which then caused her to suffer severe arthritis. The couple, who had booked through a noted tour operator, have sought legal advice.

Read that alongside: Egypt has called on the UK to lift its ban on direct flights between the UK and Sharm El Sheikh, Egypt’s Ambassador to the UK Tarek Adel told the BBC. Adel noted that Egypt has worked hard to upgrade facilities and improve security within its airports in coordination with British technical and security teams.

Ah, Orientalism, courtesy of the BBC: As if looking to justify the continued ban on direct flights, the BBC sought the opinion a random former police officer who visited Sharm, who (challenging his Victorian-era ancestor) had this to say: “We have to be careful because what we may perhaps consider suitable security is not considered the same elsewhere.” A former head of the National Counter Terrorism Security Office also said that Sharm El Sheikh “will always be at the top end of the threat level for holiday.” He also did say, however “that doesn’t mean to say you shouldn't go because there are other places that we go to similar to that.”

And FYI, low cost carrier Air Arabia has launched two weekly flights to Sharm El Sheikh from Amman, according to the company’s website. Air Arabia launched direct flights between Sharm El Sheikh and Beirut last June.

Other headlines worth a glance this morning:

  • Egypt is turning into a prime competitor to Russia for gas exports to Europe as it targets export agreements withItaly, Spain, and France, the Arab Weekly reports.
  • The former head of the Glasgow Museums called on Scotland to meet its “ethical duty” and repatriate artefacts, including a block of stone from the Giza Pyramids, that weretaken during times of slavery and colonialism, according to Scotland’s The National.

On The Front Pages

Talks between President Abdel Fattah El Sisi and Jordan’s King Abdullah II in Amman dominated the front pages of the country’s three main state-owned dailies (Al Ahram | Al Akhbar | Al Gomhuria) this morning. El Sisi and Abdullah discussed bilateral relations and regional cooperation, highlighting the importance of continued negotiations between the Palestinians and Israel, Al Ahram reports. Efforts to confront terrorism also came up during the meeting, Al Akhbar and Al Gomhuria added. We have more on the meeting in our Diplomacy section below.

Diplomacy + Foreign Trade

Egypt, Jordan amend natgas supply agreements: Oil Minister Tarek El Molla and his Jordanian counterpart Hala Zawati signed agreements amending prior natural gas purchase and sale agreements and MoUs, according to Al Shorouk. No details were provided as to what the amendments entail. Egypt began exporting natural gas to Jordan last September under a supply resumption agreement providing as much as 10% of Amman’s natural gas needs. Zawati later said her country is planning to increase the amount to eventually cover a third of the kingdom’s demand.

This comes as President Abdel Fattah El Sisi held talks yesterday with Jordan’s King Abdullah II during a short visit to Amman, according to an Ittihadiya statement. The two discussed natural gas exports to Jordan and the Palestinian peace process, as well as bilateral ties, countering terrorism, Syria, Libya, and Yemen.

Energy

Egypt to halt fuel imports within two years

Egypt will halt imports of petroleum products, diesel in particular, within two yearsas production from national projects, including ones carried out by MIDOR and the Egyptian Refining Company, continues to grow, the Oil Ministry’s Khalid Othman told the House of Representatives, according to Al Mal.

Egypt vets six offers from companies to develop Kom Ombo solar plant

The Egyptian Electricity Transmission Company (EETC) is vetting six offers from energy companies to develop a 200 MW solar power plant in Kom Ombo in Upper Egypt, company sources said yesterday. ACWA Power Egypt, Scatec Solar and India’s FRV are competing for the project, alongside three consortiums — one comprised of Elsewedy Electric, IDF and Japan's Marubeni, one led by Actis, and another led by Orascom Construction. EETC will announce the winning bid in two months’ time. We had noted last August that ACWA offered the lowest feed-in tariff rate at EGP 2.73 per kWh.

Basic Materials + Commodities

Gov’t plans to step up reliance on beets for sugar production

The government is planning to increase its reliance on beets instead of water-intensive sugarcane for commercial sugar production, Egyptian Sugar and Integrated Industries Co. CEO Mohamed Abdel Rehim tells Al Mal. Transforming sugar factories to accommodate this new change in direction could cost up to EGP 3 bn, Abdel Rahim said, adding that the government is currently conducting a cost-benefit study on the issue.

Manufacturing

Military Production Minister meets with CITIC to jumpstart solar panel industrial complex

Military Production Minister Mohamed El Assar sat down on Friday with Chinese CITIC Group’s International Operations Manager Bruce Xiao to discuss moving forward with an MoU to develop the MENA region’s largest industrial park for solar panel production, according to AMAY.

Egypt’s pellet producers face threats from cheap imports

Local iron pellet producers have submitted requests to the Trade Ministry to impose import tariffs of at least 10% on imported alternatives, saying they could shut down their facilities without the levy, El Marakby for Steel CEO Hassan El Marakby told Reuters’ Arabic service. The producers, who are operating at less than full capacity, are struggling to compete with cheap imports amid increasing energy prices and cost inflation.

Real Estate + Housing

TMG to invest EGP 300 bn in new project in Madinaty

Talaat Moustafa Group (TMG) is investing EGP 300 bn in the Spine, a mixed use project in TMG’s Madinaty city, the company said in a disclosure to the EGX (pdf). The project includes residential, administrative, commercial, and recreational units.

Tourism

Grand Egyptian Museum is now 80% complete

The USD 1 bn Grand Egyptian Museum is 80% complete thus far, the Cabinet said on Saturday. Meanwhile, the construction cost of the recently inaugurated National Museum of Egyptian Civilization in Fustat — the second largest museum in Egypt — totaled EGP 1 bn, the statement added.

Automotive + Transportation

Egypt’s passenger car imports rise 79.6% y-o-y in 2018

Imports of passenger cars increased 79.6% y-o-y in 2018 to 101.1k units, up from 56.3k units during the previous year, according to figures from the Customs Authority picked up by Al Mal.

Banking + Finance

Banque du Caire to allow credit card and loan repayments at Fawry outlets

Banque du Caire will now allow credit card payments and loan repayments to be done at Fawry outlets, Banque du Caire CEO Tarek Fayed said, according to a local source. This will facilitate the repayments of loans and bills without needing to have a bank card. Loans that can be repaid through Fawry include personal, mortgage and micro loans. Fayed said the move comes as part of the CBE’s financial inclusion and cashless payments initiatives.

NUCA to receive EGP 20 bn syndicated loan, to issue EGP 10 bn-worth of bonds

The New Urban Communities Authority (NUCA) is set to sign a EGP 20 bn syndicated loan agreement with local banks to fund part of the EGP 27 bn-worth of planned infrastructure projects it’s working on in new cities, banking sources told Al Shorouk. NUCA will also convert EGP 10 bn-worth of land sale receivables into securitized bonds to cover the remaining amount needed to finance the projects.

Egypt Politics + Economics

State of emergency extended for 3 months more

The House of Representatives has extended the nationwide state of emergency for an additional three months, and is expected to take effect at 1 am CLT on 15 January, according to Ahram Online. The state of emergency has been renewed every three months since April 2017.

Sports

Egypt’s Tarek Momen wins CGI Indian Squash Circuit tournament in Mumbai

Egyptian squash player Tarek Momen won last week’s CGI JSW Indian Squash Circuit in Mumbai. Momen, who is currently ranked world’s number four, was announced champion after beating compatriot Fares Dessouky.

On Your Way Out

Expect a public black eye over this one any second now: A female student was expelled from Al Azhar University after a video — showing her hug her fiancé after he kneeled down with a flower bouquet in an apparent gesture to propose — went viral. The student can appeal the decision, the university’s spokesperson Ahmad Zarei told Ahram Online. The expulsion has sparked wide debate on social media.

High-tech Egyptian movie ‘122’ to screen in Pakistani cinemas: ‘122’, the first Egyptian film to use the 4DX motion picture technology (IMDb), is also set to become the first Egyptian film to screen in Pakistani cinemas, according to Al Bawaba. The action-thriller, which stars Ahmed Dawood, Tarek Lotfy, Amina Khalil and Ahmed El Fishawy, revolves around a young man and his deaf-mute girlfriend who get dragged into a series of frightening events inside a deserted hospital (watch trailer, runtime 1:47).

The Market Yesterday

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EGP / USD CBE market average: Buy 17.87 | Sell 17.96

EGP / USD at CIB: Buy 17.89 | Sell 17.96
EGP / USD at NBE: Buy 17.79 | Sell 17.89

EGX30 (Sunday): 13,526 (+1.2%)
Turnover: EGP 789 mn (1% below the 90-day average)
EGX 30 year-to-date: +3.8%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 1.2%. Index heavyweight CIB ended up 2.7%. EGX30’s top performing constituents were SODIC up 3.4%, CIB up 2.7%, and Madinet Nasr Housing up 2.5%. Yesterday’s worst performing stocks were Global Telecom down 4.9%, Emaar Misr down 0.9% and Egyptian Resorts down 0.9%. The market turnover was EGP 789 mn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -33.5 mn
Regional: Net Short | EGP -14.0 mn
Domestic: Net Long | EGP +47.5 mn

Retail: 72.9% of total trades | 74.6% of buyers | 71.2% of sellers
Institutions: 27.1% of total trades | 25.4% of buyers | 28.8% of sellers

WTI: USD 51.90 (+0.60%)
Brent: USD 60.85 (+0.61%)

Natural Gas (Nymex, futures prices) USD 3.33 MMBtu, (+7.49%, Feb 2019)
Gold: USD 1,288.30 / troy ounce (-0.09%)

TASI: 8,291.66 (+0.99%) (YTD: +5.94%)
ADX: 4,968.68 (+0.13%) (YTD: +1.09%)
DFM: 2,537.68 (-0.31%) (YTD: +0.31%)
KSE Premier Market: 5,473.47 (+0.37%)
QE: 10,653.57 (-0.04%) (YTD: +3.44%)
MSM: 4,304.19 (-0.15%) (YTD: -0.45%)
BB: 1,344.45 (+0.54%) (YTD: +0.20%)

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Calendar

13-16 January (Sunday-Wednesday): CI Capital’s third annual MENA Investor Conference, Four Seasons Nile Plaza, Cairo, Egypt.

17 January (Thursday): Talent in the Digital Era, Galleria40, Cairo, Egypt.

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

20 January (Sunday): Cairo Court of Urgent Matters to hear an amendment to the constitutional to extend the presidential term limits.

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

22-23 January (Tuesday-Wednesday): CI Capital’s third annual MENA Investor Conference, The Plaza, New York City, USA.

22-25 January (Tuesday-Friday): World Economic Forum (WEF) Annual Meeting, Davos-Klosters, Switzerland.

23 January (Wednesday) 50th Cairo International Book Fair.

25 January (Friday): Police Day, national holiday.

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

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

3 February (Sunday): Cairo court to hear lawsuit against Peugeot Citroen.

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

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

14 February (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rates.

19 February (Tuesday) The Cairo Economic Court to deliver decision on pharma distributors appeal, Egypt.

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

24-25 February (Sunday-Monday): The Arab-European Summit, Egypt.

03-06 March (Sunday-Wednesday): EFG Hermes One-on-One Conference, Dubai.

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

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

April: 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 (Friday-Sunday): Spring meetings of the World Bank and International Monetary Fund, Washington, DC.

25 April (Thursday): Sinai Liberation day, national holiday.

28 April (Sunday): Easter Sunday, national holiday.

29 April (Monday): Easter Monday, national holiday.

01 May (Wednesday): Labor Day, national holiday.

06 May (Monday): First day of Ramadan (TBC).

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

05-06 June (Wednesday-Thursday): Eid El Fitr (TBC).

10-13 October (Tuesday-Sunday) Big Industrial Week Arabia 2019, Egypt International

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

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