Sunday, 17 February 2019

Central bank surprises with 100 bps interest rate cut

TL;DR

What We’re Tracking Today

The story of the morning: What does Thursday’s surprise interest rate cut really mean? We have lots on this front in today’s Speed Round, below.

The judiciary is going to play an outsized role in business sentiment this week. The Cairo Economic Court is due to deliver on Tuesday a decision on an appeal by pharma distributors of an antitrust fine. The Supreme Administrative Court, meanwhile, will rule on an appeal by Uber and its competitor Careem against a lower court ruling ordering the suspension of their operations on Saturday.

Our Coffee With… feature is back this morning with Egyptian Exchange chief Mohamed Farid sitting down for a cup of joe. The interview starts after this morning’s Speed Round, or you can jump straight to the web and read it in full there — it has something for market newbies and finance nerds alike.

Don’t lose the plot: We’re barreling toward the peak of 4Q/FY2018 earnings season.

Good news: The Russians are coming. Suez Canal Authority boss Mohab Mamish is in Moscow today to move forward an agreement on a USD 7 bn Russian Industrial Zone, according to a statement.

Bad news: So are the locusts. Locusts have landed in Egypt on the southern Red Sea coast (see map, below), the UN Food and Agriculture Organization (FAO) has warned, according to Reuters. Rains in Sudan and Eritrea have led to a “substantial increase” in the locust population, and locust control efforts are underway in Egypt, Eritrea, Saudi Arabia and Sudan, the FAO said. You can track the advance of the bugs here

Egypt could put two teams on the court as the NBA comes to Africa, the Associated Press reports. The Basketball Africa League, a collaboration between the NBA and FIBA, basketball’s global governing body, could see 12 teams playing in January 2020. Former US President Barack Obama will be somehow involved with the league, which will see countries including Angola, Egypt, Kenya, Morocco, Nigeria, Rwanda, Senegal, South Africa and Tunisia putting together teams.

What global investors are watching for this week: Wall Street earnings (is an “earnings recession” in the works?), US unemployment claims, developments in emerging markets (we’re hot again after the Fed signaled it was pulling back from rate hikes), a snap election in Spain, and the impact of disappointing PMI figures in Europe on sentiment. Reuters has more.

In global miscellany worth knowing about this morning:

  • The global press is not happy with the US-sponsored Middle East conference in Warsaw. Among the terms used to describe it in western media: shambolic, diplomatic fumble, and dumpster fire.
  • The Donald declared a national emergency on Friday to fund his controversial border wall with Mexico. The story is getting plenty of play (NYT | WSJ | FT).

This is why people hate us (capitalists): Goldman Sachs argues in a research report that curing patients with one-shot gene therapies could be bad for business in the long term by cannibalizing recurring revenues of pharmaplayers, CNBC reports.

But we still love us a hedgie: A new poster and teaser (watch, runtime: 0:49) for season four of Bns is out. Enjoy

Enterprise+: Last Night’s Talk Shows

The Munich Security Conference was the highlight of last night’s talk shows, with Hona Al Asema’s Lama Gebril (watch, runtime: 03:44 and runtime: 12:01) and Masaa DMC’s Eman El Hosary recapping the key takeaways from President Abdel Fattah El Sisi’s speech (watch, runtime: 01:59). El Hekaya’s Amr Adib was more interested in the president’s meeting with German Chancellor Angela Merkel, during which they discussed immigration (watch, runtime: 03:21). We have the full details on the conference in Speed Round, below.

Egypt must begin manufacturing automotives domestically by bringing foreign manufacturers to set up shop here while simultaneously beginning to manufacture Egyptian vehicles, Rep. Fawzy Fata said on Masaa DMC. Fata also dismissed citizens’ plans to set up a company to begin importing vehicles instead of relying on car dealerships as unfeasible (watch, runtime: 09:58).

Public Enterprises Minister Hisham Tawfik discussed public sector companies’ losses with El Hekaya’s Amr Adib (watch, runtime: 00:40).

Speed Round

Speed Round is presented in association with

The Central Bank of Egypt cut its key interest rates by 100 bps on Thursday in a move that surprised pundits: Nine of 11 economists surveyed in our Enterprise poll ahead of the meeting had suggested that the MPC would leave the rates on hold. The central bank cited lower inflation and unemployment, higher growth rates and slower global tightening.

Where do rates stand this morning? The CBE’s overnight deposit and lending rates stand at 15.75% and 16.75%, respectively. The bank also cut its main operation and discount rates to 16.25%, the CBE said in a statement (pdf).

The “well-justified” rate cut “illustrates the CBE’s confidence in Egypt’s economic outlook, despite global headwinds,” said CI Capital’s Hany Farahat, who called the rate cut. “The decision capitalizes on improving FX, capital flows, and inflation dynamics, and bodes well with our favorable balance of payments during 2019. We believe taking this step, days following the IMF’s disbursement of the fifth USD 2 bn loan tranche, signals the fund’s endorsement of an expansionary policy ahead.”

So why did the central bank cut rates? Read on:

Inflation within target range: Egypt’s annual headline urban inflation rate increased slightly to 12.7% in January compared to 12% the previous month, while annual core inflation went up to 8.6% from 8.3%, remaining within the CBE’s target inflation range of 13% (±3%), the CBE said, adding that it’s targeting a rate of 9% (±3%) for 4Q2020. Core inflation strips out volatile items such as food and fuel.

GDP, unemployment: GDP growth increased slightly to 5.5% in 4Q2018 from 5.3% in 3Q2018, the CBE said in its note, pointing out that the unemployment rate has also declined to 8.9% from 10%, its lowest level since December 2010.

Private demand “contained”: The CBEsaid while external demand was looking up, local demand was suffering. “Preliminary data for 3Q2018 indicate that net external demand continued to support economic activity while private domestic demand remained contained,” the CBE said.

Slower global tightening and stable oil prices: The CBE also cited slower global growth, slower tightening of monetary policy globally as well as stable oil prices as factors that affected its decision on Thursday. “The expansion of global economic activity weakened, and the tightening of financial conditions eased, while trade tensions continued to weigh on the global outlook. International oil prices recently stabilized, yet remain subject to volatility due to potential supply-side factors,” the CBE said.

Business thinks it’s a good start — but only a start: “This is a good start and gives a good signal on the investment environment in Egypt, but we want more cuts and we hope the currency won’t weaken again because it will impact purchasing power and our business consequently,” Domty Vice Chairman Mohamed El Damaty told us. “We have already began expansion, but the rate cut helps us do more. Still, we are monitoring planned subsidy cuts this year and their impact on inflation, FX rates and whether further interest rate cuts are in the card. That will give us a clearer picture and help us set long-term plans.”

Don’t expect businesses to start borrowing again soon: “The much-needed interest rates cut will improve business sentiment, particularly with local investors, but we believe another cut will remain key for a material impact on unlocking CAPEX lending potential,” said Alia Mamdouh, director of macro and strategy at Beltone Financial.

So, which stocks win? “It would bring down the cost of capital and this will be specifically positive for leveraged stocks such as Ezz Steel, GB Auto and Qalaa Holdings,” Allen Sandeep, head of research at Naeem Brokerage, told us. “It is also good news for consumers stocks like Juhayna, Obourland and Domty as spending will pick up. It’s neutral for the banks as treasury yields have dropped already by more than 1.5 percentage points, in anticipation of the rate cut, in our view.” Sandeep also believes that the cut will also draw us closer to the kickstart of state IPOs as the opportunity cost of capital drops.

Carry traders don’t see subsidy cuts planned for July delaying future rate cuts, according to Bloomberg. The prospect of further easing could drive the carry trade to buy into local currency debt now.

So what about the EGP? That appetite from the carry trade will help support the EGP, economist Reham El Desoki told Bloomberg. Added Beltone’s Mamdouh: “We reiterate our view of a limited downward pressure on the EGP in 2019 as investment recovery remains subdued.” The “waves of outflows” that Egypt experienced last year are unlikely, Mamdouh said, as “the attractive yields will continue to attract more foreigners.”

A more volatile EGP? Though it reflects growing investor confidence in Egypt, the shift toward the open market is also likely to expose the pound to more volatility, the business information service said. “A more volatile EGP could be an additional risk to the outlook,” Bloomberg writes. And while CBE Governor Tarek Amer said the CBE will stand ready against speculators, the Finance Ministry is predicting that the EGP will depreciate.

LEGISLATION WATCH- The House of Representatives approved in principle amendments to the constitution on Thursday and sent them to committee for review, according to Al Shorouk. In total, 485 of the general assembly’s 596 members voted in favor of the changes, comprising more than the required two-thirds majority. In addition to potentially extending President Abdel Fattah El Sisi’s term until 2034, the proposed changes would establish the Supreme Judicial Council, headed by the president. They also empower the president to appoint and remove the prosecutor general and bring back an upper house of parliament. As we noted on Thursday, the amendments now go to the House Legislative Committee before being put to the House for a second vote, with a national referendum expected before June. Reuters and Bloomberg also have the story.

Opposition to the move: The hashtag “no to changing the constitution” trended on Egyptian Twitter after the changes were introduced. A group of MPs and former presidential candidate Hamdeen Sabahi have formed the “Union to Defend the Constitution,” the Guardian reports.

The vote overwhelmingly dominated coverage of Egypt in the foreign press on Thursday, with most noting the duration of the term extension. Declan Walsh, writing for the New York Times, noted that the referendum’s success is a foregone conclusion. Passage of the amendments was expected “in an assembly packed with pro-regime supporters” despite a few MPs standing up against them, the FT’s Heba Saleh writes.

Gilead and EvaPharma will use Egypt as a distribution and manufacturing hub to expand into Africa: Eva Pharma will become a licensed distributor for biotech and pharma giant Gilead Sciences’ products in Africa, CEO Riad Armanious said in a statement to the local press on Thursday. Armanious said Gilead has chosen Egypt to become the jumping off point for its expansion into the continent.

Egypt to pick chief executive of SWF within weeks: The search committee for a chief executive to run the planned EGP 200 bn sovereign wealth fund has made a shortlist of four candidates and sent it to the prime minister’s office, according to a domestic press report citing Planning Minister Hala El Said. A hiring decision is expected within weeks; the piece gives no details on who made the short list.

IPO WATCH- Enppi IPO is back on the table: The Madbouly government have given the green light proceed with the initial public offering of petroleum industry contractor Enppi and sees it going to market as early as 2H2019, the domestic press reports. The government plans to sell 25-30% of the company’s shares and will also offer GDRs in London, the sources said. The news comes after Public Enterprise Minister Hisham Tawfik said earlier this month that the government is preparing a list of four companies that will sell shares via IPO in phase two of the state’s privatization program. The first phase of the program, which will see stake sales by already-listed companies, will start “soon,” the minister said.

Aton Resources to raise CAD 5 mn to fund gold exploration in Egypt: Canada’s Aton Resources is raising CAD 5 mn to fund exploration and development activities in its Abu Marawat concession in Egypt, the company said in a statement (pdf). Funds will be raised through a non-brokered private placement.

M&A WATCH- MM Group increases stake in Kanawat Distribution to 72.6%: MM Group for Industry and International Trade increased its stake in Kanawat Distribution to 72.6%up from 62.7%, according to a bourse filing (pdf). This follows a similar transaction in December 2018 which saw MM Group’s stake rise to 62.7% from 37.5% in a transaction worth EGP 73.9 mn.

Egyptian-American Enterprise Fund to announce first investments in education, agriculture: “We are excited about our pipeline and optimistic that EAEF will close a number of transactions this year. In the very near future, we will make our first investment in education and our first investment in agriculture. We continue to focus on sectors of high development priority concurrent with our work on long-term inclusive growth,” the Egyptian-American Enterprise Fund (EAEF) said in its annual shareholders letter (pdf). The year just-ended saw the fund sell c. 40% of its stake in structured- and consumer-finance player Sarwa Capital during the latter’s IPO, in addition to making a USD 3 mn investment in Dawi Clinics in November, EAEF said. Throughout the year, the EAEF’s portfolio companies — including Fawry and Orchidia Pharma Industries — delivered significant growth, while partners Algebra Ventures, TCV and Flat6Labs helped EAEF “address funding market gaps” in the country.

Chambers Global names top Egyptian arbitration litigators: Chambers and Partners, one of the top global directories of legal practitioners, has named its top-ranked Egyptian arbitration firms and lawyers. Top arbitration litigators listed in this year’s ranking include: Karim A. Youssef (Youssef & Partners), Tarek Riad (Kosheri, Rashed & Riad), Ashraf Yehia (Ashraf Yehia), Girgis Abd El Shahid (Shahid Law Firm), Khaled El Shalakany (Shalakany Law Office), and Mohamed Gomaa (Zaki Hashem & Partners), among others. Ahmed El Kosheri (Kosheri, Rashed & Riad) was also noted among the ranking’s Senior Statespeople category, F. John Matouk (Matouk Bassiouny & Hennawy) under Eminent Practitioner, and Mohamed S Abdel Wahab (Zulficar & Partners) under Star Individuals.

EARNINGS WATCH- CI Capital’sconsolidated net profit after tax and minority interest rose 5.1% y-o-y in 4Q2018 to EGP 122.8 mn, the company said in its earnings release (pdf). Total revenues were up 6.1% y-o-y to EGP 671.4mn, up from EGP 632.7mn in 4Q2017.

LEGISLATION WATCH- FinMin completes draft law on new tax procedures, electronic tax filing: The Finance Ministry has finished drafting proposed legislation on new unified tax procedures and an electronic tax filing system, according to a ministry statement. The ministry placed the draft up on its website to invite public comment in a process due to wrap up on 7 March. The end result will then be handed over to cabinet for approval ahead of its introduction to the House of Representatives. It will stipulate a simplified, unified procedure for filing income, stamp and VAT tax duties — as well as pave the way for a new electronic billing and tax payment platform that would help the ministry keep tabs on our books.

Online platform: The ministry is planning to implement in May an electronic billing and tax payment platform with set single tax ID numbers through which all companies will pay all of their taxes. The platform is also part of the larger e-Payments Act, which received preliminary approval from the House of Representatives last week. The act seeks to guide Egypt’s transition to a cashless economy.

President Abdel Fattah El Sisi attended over the weekend the three-day Munich Security Conference, according to an Ittihadiya statement. Some 35 other world leaders were in the German city for the event, which kicked off Thursday and covered the future of arms control and defense policy cooperation as well as trade, climate change, and international security.

Key takeaways from the conference:

Cairo will be home to a center to support African reconstruction and development, El Sisi said in a meeting organized by Munich-based political strategy consultancy Agora Strategy on the sidelines of the forum. The planned center will function as “a tool to help African states recovering from internal strife and armed conflict.”

El Sisi met with senior German business leaders to promote investment, Ittihadiya said in a statement. The president held a working lunch with Germany’s Economy and Energy Minister Peter Altmaier and senior execs from blue-chip German corporates including Mercedes-Benz, Allianz, BMW, Volkswagen, Airbus, Siemens, SAP, Deutsche Bank, Commerzbank and the Federation of German Industries.

Among the president’s other meetings of note were discussions on:

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Coffee with Enterprise

Coffee with Mohamed Farid, Chairman of the EGX

Six years after serving as vice-chairman of the Egyptian exchange, Mohamed Farid (official bio) was tapped as EGX chairman in August 2017. His return to government service was preceded by a five-year stint as CEO and chairman of private-sector economic think tank Dcode, as well as an adjunct at AUC and the Arab Academy for Science, Technology and Maritime Transport. He was also a consultant to the World Bank. Since taking the helm of the EGX, Farid has seen through the introduction of new trading tools and regulations, including market making, margin trading, and changes in the criteria for inclusion in the benchmark EGX30.

In the latest edition of our “Coffee with…” series, we sat down with Farid for a chat about the EGX and the questions on everybody’s minds.

The key takeaways:

  • Farid is passionate about one thing: The power of long-term incremental savings via investing in the stock market to rebuild the middle class. It is, he says, the ultimate hedge against inflation;
  • At least 3-4 private sector companies are in the IPO pipeline — that’s over and above what we can expect from the state’s privatization program;
  • The private sector is not being crowded out of the economy: Private-sector participation in GDP has gone from 62% before 25 January 2011 to 69.5% in FY2017-18;
  • The upcoming EGX30 Total Return index will show the power of dividends — look for it to launch in 1Q2019;
  • The opportunity to attract new investors from Asia to the EGX is substantial;
  • Retail investors are aging out of the market — EGX is working on outreach and education initiatives to attract a new generation;
  • He’s not concerned about competition from the London Stock Exchange for high-profile Egyptian listings;
  • There is a movement afoot to create a real market for corporate debt;
  • Look for a push sometime late this year or early next year to breathe life into the Nilex — including, possibly, listed venture capital and small private equity firms.

Enterprise: Could you give our readers, who aren’t familiar with the subject, what exactly is the stock exchange?

Mohamed Farid: The stock exchange is a platform that anyone can use to invest a sum of money for a return. Be it for significant investments or incremental saving in capital markets. It’s a platform where shares — a piece of paper that represents ownership in a company — are traded just like wheat, rice, sugar. Whether they are in food or in real estate, the companies on the exchange are ones that you and I deal with on a daily basis. These daily interactions between the consumers and companies impact the stock price, which in turn, impacts the company’s ability to draw investments, which it will then spend on making the product for the consumer. This interlocking dependence between the consumer and the company is why the stock exchange matters to everyone.

E: Incremental savings, you say? Could you elaborate?

MF: One of the biggest missed opportunities for people, is the long term incremental savings benefits that come with investing in the stock market. It’s a problem of perception borne out of a misconception. The problem for the average person when it comes to capital markets — and the stock market specifically — is deciding on which stock to buy, when to buy it and when to get out. The concerns over swings and volatility become minute details when looked at from the long term perspective. We’re talking over a period of about 20 or 25 years, where it is perfectly possible to save around EGP 1000 per month on a monthly/annual basis. The longevity of the incremental investment should yield investors not to worry about what happens in a single trading day. People think 20 years is a long time, but numbers do add up.

A point to remember — it’s about investing in indices: What enables investors to overcome the choice and timing of their incremental investments or savings decision is investing in index trackers or instruments that are not prone to the movement of one single stock. This would reduce the impact of volatility in the prices of one stock in particular by investing in the constituents of an index.

E: What’s the missed opportunity here?

MF: Just look at how the EGX has grown from a market cap of EGP 400 bn from before the EGP float in 2016 to EGP 1 tn at its highest level in April 2018. We’re talking about more than a 100% increase in the value of the companies on the exchange. Few have reaped the benefits of this growth due to the lack of wider participation in the stock market by the middle class.

E: How are opening and closing prices calculated on the stock exchange?

MF: Opening prices are the previous day’s closing prices. Closing prices are determined by what is called the volume weighted average price. You basically add up all the money spent on every trade on a stock and then dividing by the total number of shares traded.

E: What’s the role of price discovery in the morning?

MF: The role of the price discovery mechanism is to factor into the opening price the impact of a major news or disclosure that came up after the previous day’s closing price and might affect the stock price. The pre-opening session — or the discovery session — runs from 9.30 am to 10am (when trade starts on the EGX). During this session, if the news is perceived as impacting the price, you will find investors placing orders on the trading system. The object of the session is to get a theoretical matching price that is different from the closing price and is considered the opening price for the stock.

E: Let’s talk about volatility. It’s been a crazy year on the volatility front, first in EM and then the worst December since the financial crisis.

MF: The risk premium increased, whether it is for an emerging market or a developed market. With Brexit and the US-China trade war, the risk premiums on international markets will be present for some time. This rising risk premium will affect growth in developed markets and impact the decisions of the US Federal Reserve, which is why it has been raising interest rates at a slower pace than what was originally envisaged. Especially when you look at yield curves now internationally, they’re a bit flat. This should unfold in the first three quarters of 2019, to see dynamics of growth and inflation.

What makes Egypt stand out is the economic reform story and the government’s significant desire to expand the role of capital markets in the economy. The depth of fiscal and monetary reforms accompanied by unprecedented infrastructure investments increases what is called potential economic growth rate and developing social safety nets and programs as the assumed trickle-down-effect proved not to work 100%. The government has also demonstrated that it is agile enough to respond to the volatility in international markets. Case in point, the delay of the state privatization program. Postponing the program is not a cancelation, but a clear and temporary adaptive measure.

Tap or click here to continue reading our sit-down with Mohamed Farid.

The Macro Picture

As the CBE unexpectedly eases, are more EM rate cuts on the horizon? Inflation in Egypt was still at a fairly high (albeit within target) 12.7% when the CBE cut rates last week. But below-target inflation may motivate other emerging-market central banks to do the same, Bloomberg writes. According to Morgan Stanley, inflation has fallen below 10-year averages in 80% of the emerging economies it covers, and as a result it expects 70% of them to either cut rates or keep them on hold. JPMorgan too has forecast easing in 10 emerging market countries, while Nomura Holdings has gone as far as to say that deflation may be a prospect for some economies.

Disinflation: What’s the situation? Slowing inflation (otherwise known as disinflation) is underway in key EMs. Both China and India’s January inflation data fell short of expectations, in both cases due to falling food and fuel prices. Add to this Citigroup’s latest Inflation Surprise Index for emerging markets — which fell to its lowest level in over three years last month — and it seems that disinflation is a growing trend among emerging economies (this is not true for all emerging markets of course — predictions of disinflation at the Turkish central bank would have you laughed out the room). While we have yet to see a comprehensive explanation, our somewhat cursory evaluation is that food and fuel prices are driving the disinflation trend.

Image of the Day

Last week in wildlife-related fake news: Headlines everywhere last week claimed that the above image is the first time the rare black leopard has been captured on camera in more than a century. Apparently this isn’t actually true (per the WaPo) but it makes our Image of the Day anyway for being so beautiful (click here for the full gallery).

Egypt in the News

A move in the House to amend the constitution is driving the conversation on Egypt this morning. Coming in at a close second: The death or injury of 15 troops in a terror attack in North Sinai and the nation’s human rights record. We have chapter and verse on the constitution in Speed Round, above.

On the human rights front: Human Rights Watch issued a statement calling for an independent inquiry into the use of torture in Egypt after the Egyptian Prosecutor General found 20 cases of torture published by HRW in 2017 to be “untrue.” Freedom House’s 2018 annual report ranked Egypt among the world’s least free countries citing, hardened political repression. Amnesty International is calling for prison officials to lift restrictions on family visits, and an Egyptian-American citizen imprisoned in 2013 is on hunger strike and in poor health, reports ABC News.

Diplomacy + Foreign Trade

The International Monetary Fund (IMF) is keen on supporting Egypt’s social safety programs, Middle East and Central Asia Director Jihad Azour told Social Solidarity Minister Ghada Waly.

Manufacturing

Chinese companies considering to invest in leather industries in Egypt

A number of Chinese companies are considering investing in the leather products sector in Egypt, the Industry Ministry said in a statement after Minister Amr Nassar accompanied a Chinese delegation on a tour of the Rubiky leather city.

Telecoms + ICT

MasterCard looking to work with Egypt to make new capital first “cashless” city

MasterCard is looking to collaborate with the CIT Ministry to develop advanced digital payments infrastructure in the new capital, Chairman Michael Froman told Minister Amr Tawfik, according to a ministry statement. Froman also presented proposed solutions to introduce e-payments to the transport, agriculture and SMEs sectors.

Automotive + Transportation

Tax Authority issues formula on how to tax tuk tuks

The Tax Authority published in the Official Gazette on Thursday the tax formula for how it will tax tuk tuks, AMAY reports. The new formula will look at average daily revenues from a tuk tuk, and will factor in how many days a tuk tuk is used. In a receipt-less industry such as this, the authority has determined that the average daily revenue, according to 2014 figures, is around EGP 100. Adjusting for inflation, the authority estimates that the average daily revenue is EGP 150.

ITIDA, Valeo Egypt sign automotive artificial intelligence R&D agreement

The Information Technology Industry Development Agency (ITIDA) has signed a three-year EGP 21 mn research and development (R&D) agreement with Valeo Egypt to research digitization and artificial intelligence (AI) in vehicles, Zawya reports. Valeo Egypt is looking to recruit 1k engineers each year over the next three years. ITIDA signed an initial training agreement with Valeo during French President Emmanuel Macron’s visit to Cairo last month.

Other Business News of Note

Egypt’s FRA rejects Veon appeal against GTH capital increase voting rights

The FRA has rejected an appeal against its decision to suspend Global Telecom Holding’s (GTH) majority shareholder Veon Holding from voting on GTH’s EGP 11.2 bn capital increase, according to a statement to the EGX (pdf). The appeal was submitted to the authority by Veon Luxembourg Finance Holdings and Veon Luxembourg — the Amsterdam-based group’s back offices. EGX-listed GTH is scheduled to hold the general assembly meeting next month to put the capital increase motion to a vote. It is also worth noting that Veon has filed for regulatory approval to take GTH private.

National Security

North Sinai clashes bring losses to militants, military

Egyptian authorities prevented an attack with a home-made bomb in Giza intended to target a security patrol on Friday, Reuters reports. There was no immediate claim of responsibility for the intended attack, but the Interior Ministry attributed it to the Ikhwan. Two policemen and three civilians reportedly suffered minor injuries when the device exploded during the attempt to defuse it. Seven terrorists and 15 members of the military died during clashes in North Sinai one day later, according to an Armed Forces statement. The Islamic State has claimed responsibility for the attack, saying it killed 20 Egyptian troops, reports Reuters.

On Your Way Out

Syria’s indomitable archeological heritage survives the war: Feast your eyes on these stately photographs in The Washington Post of some of Syria’s most famous ancient monuments and quarters photographed by Kevin Bubriski. The austere black-and-white images capture the archeological sites and ordinary souks before the now-eight-year civil war kicked off.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.50 | Sell 17.60
EGP / USD at CIB:
Buy 17.49 | Sell 17.59
EGP / USD at NBE: Buy 17.49 | Sell 17.59

EGX30 (Thursday): 14,984 (+0.2%)
Turnover: EGP 910 mn (3% above the 90-day average)
EGX 30 year-to-date: +15.0%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 0.2%. CIB, the index heaviest constituent ended up 1.6%. EGX30’s top performing constituents were Egyptian Iron & Steel up 5.3%, Arab Cotton Ginning up 4.8%, and Cairo Investment & Real Estate Development up 4.5%. Thursday’s worst performing stocks were SODIC down 2.0%, El Sewedy Electric down 1.9% and Telecom Egypt down 1.6%. The market turnover was EGP 910 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +18.3 mn
Regional: Net Short | EGP -20.7 mn
Domestic: Net Long | EGP +2.4 mn

Retail: 68.1% of total trades | 68.0% of buyers | 68.2% of sellers
Institutions: 31.9% of total trades | 32.0% of buyers | 31.8% of sellers

WTI: USD 55.59 (+2.17%)
Brent: USD 66.25 (+2.60%)

Natural Gas (Nymex, futures prices) USD 2.63 MMBtu, (+2.02%, March 2019 contract)
Gold: USD 1,322.10 / troy ounce (+0.62%)

TASI: 8,626.28 (+0.11%) (YTD: +10.22%)
ADX: 5,036.41 (+0.19%) (YTD: +2.47%)
DFM: 2,533.61 (+1.65%) (YTD: +0.15%)
KSE Premier Market: 5,419.95 (-0.89%)
QE: 9,941.50 (-2.35%) (YTD: -3.47%)
MSM: 4,109.34 (-0.13%) (YTD: -4.96%)
BB: 1,371.98 (-0.15%) (YTD: +2.60%)

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Calendar

19 February (Tuesday): 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.

23 February (Saturday): The Supreme Administrative Court will rule in an appeal by Uber and its competitor Careem against a lower court ruling ordering the suspension of their operations.

23 February (Saturday): Saudi Egyptian Business Council Meeting, Cairo, Egypt.

24-25 February (Sunday-Monday): EU-Arab League summit, Sharm El-Sheikh, Egypt.

26 February (Tuesday): BLOCKCHAIN: What is it? Potential Applications Beyond Cryptocurrencies, TIEC Smart Village Building (B5), Cairo, Egypt.

26-28 February (Tuesday-Thursday): 22nd International Conference on Petroleum Mineral

Resources and Development, Egyptian Petroleum Research Institute, Nasr City, Cairo, Egypt.

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

10 March (Sunday): CIB to hold EGM meeting to look into planned capital increase.

March (date TBD): Traders Fair, Nile Ritz Carlton, Cairo, Egypt.

17 March (Sunday): A court will look into a lawsuit by a subsidiary of Arabian Investments, Development and Financial Investment Holding Co. (AIND) against Peugeot Citroen, seeking EUR 150 mn in damages.

17-18 March (Sunday-Monday): OPEC Joint Ministerial Monitoring Committee meeting, Baku (Bloomberg)

18-19 March (Monday-Tuesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

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

28 March (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rate.

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.

April: The EUR 250 mn first phase of Egypt’s national waste management program kicks off.

17-18 April (Wednesday-Thursday): OPEC+ meeting, Vienna (Bloomberg)

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.

30 April-1 March (Tuesday-Wednesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

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

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

23 May (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rate.

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

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

18-19 June (Tuesday-Wednesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

30 June (Sunday): June 2013 protests, national holiday.

11 July (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rate.

23 July (Tuesday): 23 July revolution, national holiday.

30-31 July (Tuesday-Wednesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

7-11 August (Wednesday-Sunday) Eid El Adha (TBC).

22 August (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rate.

29 August (Thursday): Islamic New Year (TBC), national holiday.

17-18 September (Tuesday-Wednesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

26 September (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rate.

6 October (Sunday): Armed Forces Day, national holiday.

10-13 October (Tuesday-Sunday): Big Industrial Week Arabia 2019, Egypt International Exhibition Center, Cairo, Egypt.

29-30 October (Tuesday-Wednesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

9 November (Saturday): Prophet Mohammed’s birthday, national holiday.

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

9-11 December (Monday-Wednesday): Food Africa 2019 Expo, Egypt International Exhibition Center, Cairo, Egypt.

10-11 December (Tuesday-Wednesday): US Federal Open Market Committee holds two-day policy meeting to review the interest rate.

26 December (Thursday): Central Bank of Egypt’s monetary policy committee meets to review interest rate.

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