Tuesday, 23 April 2019

Heliopolis Housing exits first wave of state privatization program


What We’re Tracking Today

Polls closed last night in the constitutional referendum, ending three days of balloting that have dominated the front pages here at home and the conversation on Egypt in the international media. Just over 61 mn people were eligible to vote. The National Elections Authority says to expect the results of the referendum no later than this coming Saturday (27 April). You can read our rundown on the amendments here.

The EGX is in the grip of a pre-holiday slowdown, with trading volumes in the dumps this week after hitting a six-year low of EGP 190 mn on Sunday before crawling back to a slightly less comatose EGP 340 mn yesterday, according to EGX data.

What’s behind the market’s lack of energy? “Leaving the Global Telecom case unresolved is creating uncertainty in the market and investors are slow to take positions and many funds have their money stuck in the share,” Sherif Shebl, vice president of GCC sales at Pharos Holding, told Enterprise. The long vacation coming up is also negatively impacting trading, Shebl said.

And that makes it time for our daily reminder: The EGX and banks will close from Thursday through Monday (25-29 April) and again on Wednesday, 1 May in observance of a string of national holidays. That leads us straight into Ramadan, which the National Astronomy Institute says will start on Monday, 6 May. Banks and the EGX traditionally move to shortened Ramadan hours at that time.

Surviving the Emerging Markets Robot Apocalypse: Egypt will have its first undergraduate data science program this fall. Set aside for a moment the (often terrifying) privacy implications of how data is used, we think the program at the American University in Cairo is a mandatory first step in building an economy that will one day survive the coming Robot Apocalypse. (In other words: When developments in AI, data, robotics and the like nuke jobs in everything from manufacturing to call centers, bringing into question what drives growth in emerging economies such as ours in the future.) We have chapter and verse on AUC’s new data program in this morning’s Spotlight, below.

So, what’s going on today?

The Arab Federation of Exchanges’ two-day annual conference kicks off this morning at the Four Seasons Hotel in Cairo. The event puts the spotlight on SMEs, artificial intelligence and fintech as well as the future of listings. Look for keynotes from Prime Minister Moustafa Madbouly, Public Enterprises Minister Hisham Tawfik, Investment Minister Sahar Nasr and our friend EGX Chairman Mohamed Farid. Panel discussions will feature global capital market leaders from the World Bank, EBRD and World Federation of Exchanges. Also speaking at the gathering today: Our friends from CIB, who feature as a success story. We’ll have coverage of day one in tomorrow morning’s edition.

The SME Governance Workshop hosted by the Egyptian Private Equity Association and IFC kicks off today and wraps up tomorrow. If you run an SME, you should try to make it.

Also this week:

  • Egypt to host Sudan and Libya summits today: President Abdel Fattah El Sisi will host a summit today with other African heads of state on the current situation in Sudan, according to Ahram Gate. El Sisi will also discuss developments in Libya during an African Union Troika Summit with the Congolese, Rwandan and South African presidents.
  • El Sisi is due to head to Beijing for China’s Belt and Road Forum. The gathering takes place on 25 April.

The problem with PE in MENA? The legacy of Abraaj. In the west? Simple greed. Not content with keeping 20% of their limited partners’ profits (on top of their annual fee), some western PE outfits are trying to claim 30% carried interest on their top funds, the Financial Times reports.

What’s this “carry” of which you speak? Think of the carried interest as the private equity firm’s incentive to maximize the returns its fund generates: Beyond a certain threshold (the “hurdle rate”), the PE fund manager gets a piece of the returns, giving her an incentive to make the pie as big as possible. That carry has been 20% for decades, but Carlyle, Vista, Bain, Eurazeo and Altor have recently launched funds charging a 30% “super carry.”

So investors are swallowing it? Kinda. In a fundraising environment that favours the GP, they’re getting away with it, the FT writes, and “investors are feeling a bit sore about it.”

What do you do when the Visigoths are at your walls? Cut the people who are supposed to defend you. That’s the take-home from Barclays’ decision to cut bonuses for investment bankers “as the bank steps up its defence against activist investor Edward Bramson ahead of next week’s annual meeting,” according to an exclusive from the Financial Times that has since been picked up by Reuters.

Why is everyone (in the press) itching for a meltdown? Because it’s inevitable that the global economy is going to (at least) slow down — and take markets with it? Or because journalists want something to write about? The scribes feel like golden retrievers mindlessly watching a tennis match right now when they serve us such fare as “For stocks, the good times came back. But for how long?” (New York Times) and “Strong stock and bond markets at odds over global growth” (Reuters).

Also worth a moment of your time this morning:

  • Oil prices have hit their highest level so far this year, with Brent settling in at USD 74 / bbl yesterday after the United States said it would not renew waivers that allow countries to buy Iranian oil without facing US sanctions. The waivers expire on 2 May. (Bloomberg | CNBC)
  • Coffee has never been more in demand, but the price of that wonderful commodity is in the dumpster. (WSJ)

And in miscellany this morning:

  • America’s super-rich are worried about the future of US capitalism… (Washington Post)
  • …and so are CEOs. (Financial Times)
  • Lab-grown meat, volcanic microbes and fermented mushrooms: These are just some of the things that food-tech investors are putting their money into. (TechCrunch)
  • Google-owned Boston Dynamics has published a promo video of its army of robo-dogs as the company begins production of its first commercially-available robot.

A mouse has been cleaning up this guy’s workbench — every single night. Estimated time remaining until Disney turns OCD Mouse into a cartoon: About 45 seconds. Peta Pixel has video proof.

The annual Lyrid meteor shower peaked last night, gracing anyone who could grab a patch of clear sky out in Omm El Donia with a view of the world’s oldest recorded meteor shower.

Enterprise+: Last Night’s Talk Shows

After two days of talking up the constitutional referendum, the chattering class that dominates our nation’s nighttime talk shows seemed to run out of steam.

The third and last day of the referendum still got some play, with Al Hayah Al Youm’s Lobna Assal pushing out the government’s message (watch, runtime: 4:12) that poll booths were as crowded as Mogamma El Tahrir on a Saturday morning. Meanwhile, the results are in from polling stations aborad, National Elections Commission Vice President Mahmoud El Sherif said, adding that there will not be a fourth day of polling in Egypt.

And for your daily dose of Amr Adib: El Hekaya’s Amr Adib rang up EGX Chairman Mohamed Farid for a comment on the Arab Federation of Exchanges’ annual conference, which kicks off this morning and continues tomorrow in Cairo (watch, runtime: 5:20). Farid noted that this year’s conference is special, given that Egypt is assuming the federation’s 2019 presidency and the recent election of an Egyptian secretary general.

No penalty for low-income homes, small businesses that are behind on their electricity bills: Also getting some airtime was an Electricity Ministry decision to forgive for lower-income homes and small-business customers a 17% interest late fee on electricity bills, Masaa DMC’s Eman El Hosary reported (watch, runtime: 2:38). The ministry will waive late fees on their overdue bills in a bid to expedite collection while “taking into account the social dimension.” Ministry spokesperson Ayman Hamza told El Hosary that the decision will take effect immediately, and that they will open the door for on-installment payments. This came after the ministry announced it had raised interest rates on overdue bills to 17.5% from 16.5%.

Speed Round

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EXCLUSIVE- Heliopolis Housing dropped from first wave of state privatization program: Heliopolis Company for Housing and Development has been dropped from the lineup of companies included in the first wave of the state privatization program, Public Enterprises Minister Hisham Tawfik tells Enterprise. This leaves Abu Qir Fertilizers and Alexandria Containers and Cargo Handling Company (ALCN) remaining in the first wave. Tawfik declined to disclose which of the two companies is up first, saying to do so could adversely impact the transactions. Both ALCN and Abu Qir are listed on the EGX; the upcoming transactions would accordingly be stake sales through accelerated book builds.

One more offering could land before Eid, but none during the summer: Abu Qir or ACCH could go to market before the Eid El Fitr break, but the sale program will definitely be on hold during the summer, when liquidity and trading volumes are typically low, the minister tells us. The state will be targeting foreign investors with the sales, Tawfik added, as it did with the transaction in March on Eastern Tobacco.

Background: The government kicked off the first wave of the program last month with Eastern Tobacco’s secondary offering of a 4.5% stake. Both Alex Containers and Abu Qir will be secondary offerings. Alexandria Mineral Oils Company (AMOC) had also been slated to go ahead in the first wave, but was sidelined earlier this year after an unexpected fall in profits. The first phase of the program was delayed last year as the emerging markets sell-off hit the EGX. The ambitious program had an initial line up of 23 companies slated either for IPO or for a secondary offering.

M&A WATCH- Pioneers Holding raises stake in Electric Cable Co. to 68.14% after acquisition goes through: Pioneers Holding has, through three of its subsidiaries, raised its effective stake in Electric Cable Egypt to 68.14%, up from 48.5%, via a mandatory tender offer, Pioneers said in a regulatory filing (pdf). Three of Pioneers Holding’s subsidiaries, Summu Investment, Wadi Investment (which is 99.98% owned by Pioneers), and Flourish Investment, had submitted the MTO for 41.46% of Electric Cable.

NPPA compiles list of local companies qualified to bid for work on Dabaa plant project: The Nuclear Power Plants Authority (NPPA) has compiled a draft list of 150 local companies that could participate in Rosatom’s planned Dabaa nuclear plant, NPPA head Amgad El Wakeel tells Al Mal. Among them are Hassan Allam Holding, Orascom Construction, Elsewedy Electric, Petrojet, Ezz Steel, Egyptian Steel, Garhy Steel, Ashry Steel, Arab Contractors, Concorde Engineering and Contracting, Egyptian Contracting, and several subsidiaries of the General Authority for Roads and Bridges.

Companies tapped to work ont he project will be subcontrators to Rosatom subsidiary Atomstroyexport. Look for Egyptian participation in the first reactor to come in at 20-25%, a figure that should rise to 35% for the fourth and final facility. Atomstroyexport will lead a joint committee with Egyptian authorities to evaluate the financial standing and history of the shortlisted companies before selecting which will work on the project. Contractors will enjoy a holiday from VAT and customs on all transactions related to the project, a Finance Ministry official separately told the newspaper.

Project timeline, capacity, financing: Look for groundbreaking on the project in 2020, and commercial operations at the first 1.2 GW nuclear reactor should begin in 2026, Electricity Minister Mohamed Shaker previously said. The project’s combined energy generation capacity is expected to reach 4.8 GW, equally split among its four reactors. Construction was originally estimated to cost USD 30 bn, 85% of which was said to be covered by Russian government loans. Reports emerged last October that Russian President Vladimir Putin offered to lend Egypt USD 45 bn to finance construction through his country’s sovereign wealth fund, suggesting the estimated cost might have shot up. Reports on the pricetag remain unconfirmed.

Orascom Investment Holding wants more time in which to close its acquisition of Nile Sugar as it seeks time to update its valuation report for the transaction based on Nile Sugar’s most recent financial results, OIH said in a bourse filing. The company’s shareholders won’t vote on the transaction in the upcoming meeting. OIH’s board of directors approved earlier this month the fair value assessment for the bid conducted by BDO Corporate Finance. The acquisition had originally been on track to close by the end of 2018, but carried over into this year. The bid was criticized for its “inflated valuation” of Nile Sugar.

Madbouly instructs cabinet to set up a working group to attract investment: Prime Minister Moustafa Madbouly ordered the creation of a working group comprised of officials from the investment, trade, and finance ministries to look into ways of raising foreign direct investment into Egypt, according to a cabinet statement.

What sectors does the government like? Oil and gas, steel, furniture making, fertilizers, tire manufacturing, food processing, cement, agriculture, and textiles, according to the announcement. This came during a cabinet meeting at which Trade Minister Amr Nassar said his ministry is working to attract investment from British companies.

Non-oil FDI badly needs a shot in the arm: Government figures earlier this month showed that FDI declined by almost USD 1 bn y-o-y in 1H2018-19 to USD 2.84 bn. Keep in mind, as Investment Minister Sahar Nasr told us, that this is still an improvement in our market share of total global investment — at least part of the problem is that FDI globally is contracting. But analysts add that Egypt is still feeling the effects of the EGP float. “It was somewhat unrealistic to expect FDI to recover immediately after the devaluation given the tough times the economy had to go through,” Mohamed Abu Basha, head of macro analysis at EFG Hermes, told us. Naeem Brokerage’s Allen Sandeep said that foreign investment into the non-oil sector may not see growth until 5-10 years after the economic reform program, highlighting the need for a concerted government effort to attract FDI into the wider economy.

Industry wants to watch out for the next few months: The Industrial Development Authority (IDA) will not issue further land tenders for the remainder of this year, an IDA source told the local press. The pause is intended to give time for investors that have already purchased land from the authority to begin development. The IDA had previously warned some 800 investors that they could lose their land if they fail to begin development and construction.

And the competition watching is monopoly-hunting: The Egyptian Competition Authority is investigating whether a 2016 law enforcing the registration of foreign companies exporting goods to Egypt is promoting anti-competitive practices among domestic importers, according to Youm7.

EARNINGS WATCH- Arafa Holding recorded a consolidated net profit of USD 3 mn from February 2018 until the end of January 2019, down from USD 7 mn during the same period last year, the company said in an EGX disclosure (pdf). The company’s revenues dipped to USD 236.5 mn y-o-y, down from around USD 240 mn last year.

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Studying data science at university is finally a thing in Egypt: Big Data, as our friend Dame Nemat “Minouche” Shafik, director of the London School of Economics told us, is “changing everything, from services, to marketing, to medicine.” With more data on every facet of our lives available than ever before, the chance to mine that data for useful information has never been greater — or more relevant. Enter Dr Ali Hadi (bio), chair of the Department of Mathematics and Actuarial Science at the American University in Cairo (AUC) and the founder of Egypt’s first undergraduate major in data science, launching this fall. Edited excerpts from our conversation with Hadi about the program and understand the importance of data science in Egypt:

The program was launched this year because data scientists are in great demand and in scarce supply. This is partly because there are no programs currently in Egypt to produce data scientists. Even abroad, there are very few data science programs and the majority of them are graduate programs. This is where our program has added value: It’s one of very few four-year undergraduate degrees in data science. The program will be small — 15 students in the first year and 25 after that — because we want to test the market and make sure our graduates can find jobs. We also need to fill some faculty vacancies. And we keep class sizes small to ensure quality of education. I established the actuarial science program in 2004 and I know all the people who went through it by name. I expect there will be high demand, but if we see otherwise, we’ll adjust. We’ll plan for the worst and hope for the best.

In a nutshell, data science is the science of generalizable knowledge extraction from data for the purpose of informed decision-making. The availability of data by itself is not useful, you need to know how to extract knowledge from it. Insurance is a good example. You have a ton of insurance claims that could be fraud or medical malpractice. But this is raw data, and you can’t extract knowledge from it to make informative decisions. A data scientist is the link between the data and the decision makers.

Because data science requires domain knowledge, the data scientist usually works with an expert in a particular field. If we’re talking about medicine, they’ll work with doctors, if we’re talking about a social problem, they’ll work with sociologists. The domain expert will take the results provided by the data scientist and make decisions from there. Sometimes the decision-maker is an actuary, who makes decisions based on actuarial models whose parameters were drawn up from the data by the data scientist.

The role of the data scientist is increasingly important because we have more data available than ever before. 20 or 25 years ago, the number of observations in an experiment was 500 or 1000. But now it’s mns of observations — an amount of information that goes beyond classical statistics. A scatterplot with a mn points takes time to generate and it appears as a blot of ink. There’s no pattern or structure. And this is the challenge: To extract knowledge from that black graph at the speed with which we need to make decisions.

Companies see shortage in quantitative reasoning: Part of the demand is that Egypt lacks in quantitative literacy — the ability to draw correct conclusion — and lots of Egyptian companies are hungry for this knowledge, especially banks, IT companies, and even some government agencies.

Despite the demand, you can count the sectors in Egypt using data science on both hands. The Health Ministry is using data science to determine health insurance policies, etc. But beyond that, even if industry wanted data scientists, they won’t find one. Financial analysts or risk managers are doing the work but they’re not properly trained in data science. The difficulty is that data science is both interdisciplinary and multidisciplinary, drawing from mathematics, probability, statistics, and computer science.

All industries and segments would have their own unique way of applying data science. Let’s take insurance companies. The data scientist works with an insurance expert and an actuarial scientist to make sure the insurance company has enough reserves for unexpected claims, to monitor fraudulent policies, and to price the policy correctly.

As for the banking sector, if a bank wants to market a new credit card, the data scientist will segment the market and the industry expert will decide to mail to X not Y. This will save money and increase the response rate.

In government, the Finance Ministry uses data scientists to estimate taxes, which is important because the record here in Egypt for determining the right amount of tax is not great. Another example is estimating the value of the EGP relative to foreign currencies for the budget, which is partly in EGP and partly in foreign currency.

If I could revolutionize an industry with data science, it would be insurance because insurance companies are able to use very little of the huge amount of data available to them. They have tons and tons of data but few people know it exists and fewer people can use it. They have the data but they don’t have the expertise to extract knowledge from it.

Data science has been well established as a field for some time but Egypt has been late to the game. Egypt is late to a lot of things, but better late than never. Someone has to take the initiative. Two years ago, I saw the need for data scientists so I decided to establish this program. I did the same for the actuarial science program back in 2000. I hope it will thrive like the actuarial science program, which is one of the top programs at AUC now in terms of quality of students.

In Egypt, there are also difficulties relating to access and quality of data. Branches of the government consider this data to be highly sensitive, or different ministries might have different numbers. In the private sector, companies treat data as their secret wealth and keep a lid on it. You have to be working inside the company to get access or sign a nondisclosure agreement. These challenges aren’t specific to data science but to decision makers in general. You could be a minister who wants data from another ministry and you’ll have difficulty obtaining it.

There are ethical implications to the job: The same data can produce different results, which can lead to very different decisions. This is especially important when the decision-maker is not numerically literate and can’t interrogate the data scientist’s results. Most of the time, different results happen because the data scientist’s methods are grounded in different assumptions. An informed data analyst will understand the assumptions behind the method and make sure first to validate the assumptions before going ahead with the method let alone interpreting results. Some people do use data to try and mislead others, so we teach students how to look out for these biases.

Is Egypt at a stage where it needs something like the EU general data protection regulations? These kinds of things do not usually hurt unless they go overboard. For example, if investors are deciding whether or not to invest in Egypt but the data they need to make that decision is unavailable, this could be a hindrance. On the other hand, if these same investors come and invest, you have to protect their privacy. Legislation is like any tool, you can use it and abuse it, over do it or under do it.

Egypt in the News

The referendum on constitutional change dominated the conversation on on Egypt in the foreign press as voters headed to the polls yesterday for a third and final day. Pickups of wire stories from the Associated Press and AFP are getting wide play (see: News 24, Fox News, Washington Post and France 24. AFP cites criticism from Human Rights Watch about the fairness of the voting process, while maintaining that pro-government volunteers distributed food to voters at the polling stations. The Wall Street Journal also claims that people were handed coupons outside polling stations to exchange for food. AP is also less-than-complimentary about the referendum, which it terms “virtually guaranteed to be approved.” Meanwhile, opponents of the amendments called on voters to say ‘No’ yesterday, Reutersv adds. ABC News also has coverage.

SIS, Gulf News hammer foreign press: Egypt’s State Information Service issued a statement on Sunday evening refuting reports that votes were being bought with food handouts. In a strongly-worded echo of this sentiment, claims of “glaring” bias by the Western media are at the core of this Gulf News opinion piece.

Meanwhile: Egypt may have a leading role to play in Donald Trump’s Middle East peace plan, according to YNet News. President Abdel Fattah El Sisi will likely be solicited for his input on the plan and secure a sizeable aid package from Washington in exchange for encouraging Arabs to back an Israeli-endorsed two-state solution.

Other headlines worth a glance:

  • State budget: Reuters has seen a copy of the draft FY2019-20 budget and reports that Egypt’s financing needs will hit USD 48 bn in the coming fiscal year. The figures square with what a senior government official told us last week.
  • Analyzing fungi in Egyptian artifacts: A Minnesotan wood pathologist has earned acclaim as the ‘Indiana Jones’ of fungi thanks to his uncanny ability to assess the biodegradation of wood in ancient objects, including valuable Egyptian artifacts, Minnesota Daily reports.
  • Over 23k Israelis are estimated to have crossed the Egyptian border this week to celebrate Passover in Taba, according to Israeli media outlet i24 News.

On The Front Pages

Reports from the final day of the constitutional amendment referendum make the headlines in Al Akhbar and Al Gomhuria this morning. Al Ahram meanwhile focuses on the two summits being held in Cairo today between President Abdel Fattah El Sisi and African leaders to discuss Libya and Sudan.

Worth Reading

The emerging trend in the auto industry is promising “electrification, automation, and connectivity,” with more and more players racing to reinvent the wheel, Nick Stockton writes for Wired. Rivian, founded in 2009 in Florida as Mainstream Motors, is attempting to combine elements from both the old and the new. It involves licensing an all-electric engine, dubbed the “skateboard,” to other makers to build cars on top of it, much like Karl Benz did when he successfully fired the world’s first practical vehicle. The latter part, meanwhile, involves using skateboard in-house to access a largely untapped part of the EV industry: luxury pickup trucks.

Rivian is but one of many non-traditional players in the EV market: Last January, Reuters predicted that companies like VW will invest some USD 300 bn in EV tech over the coming 5-10 years. A significant chunk of this will go into direct partnerships with lesser-known, slightly unorthodox companies that are all-in for future auto industry tech. GM acquired autonomous vehicle company Cruise, Amazon invested USD 700 mn in Rivian, and Alphabet, Apple, Uber, and Cisco all have their “car-of-the-future” spinoffs.

Before you rush to by your electric car thinking you’re helping to save the planet: A recent publication by a trio of experts Germany’s Ifo Institute suggests that electric cars may not be quite as clean a form of transportation as we thought. Taking into account CO2 emitted during the production process, the scientists believe that EV’s may in fact be more polluting than their diesel equivalents, potentially leading to between 11-28% more emissions in the future.

Worth Watching

Our planet: 49 Earth Days later. Yesterday was Earth Day and, courtesy of this cool video from the American Museum of Natural History, you can see how the planet and its inhabitants have changed since the first Earth Day in 1970 (watch, runtime 3:19). Some of our favorite facts: In almost 50 years, the population of Earth has doubled, one person in every 10 is hungry but three in 10 are obese or overweight, and high- and middle-income countries throw away five times more food than low-income countries.

Diplomacy + Foreign Trade

El Sisi meets with Sudan’s intelligence chief: President Abdel Fattah El Sisi met yesterday with Sudan’s intelligence chief Abu Bakr Demblab, according to an Ittihadiya statement. Demblab delivered a letter from the head of Sudan’s transitional military council Abdel Fattah al Burhan welcoming Egypt’s support for the country. Protesters in Sudanese cities are continuing to demonstrate against the military after it yesterday rejected their demands to form a civilian government.


Production at Shell’s Rashid and West Nile Delta Burullus fields continues to drop

Royal Dutch Shell’s natural gas output from the Rashid and West Nile Delta Burullus fields has declined in April to 240 mcf/d from 250 mcf/d the previous month as a result of decreasing well productivity, an EGAS source told the local press. Shell is planning to link the first phase of Phase 9B of the West Nile Delta Burullus field by 1H2019 to produce 100 mcf/d to compensate for the drop, with the second phase coming online in the next financial year. The company aims to raise production to 350 mcf/d by the end of 2019.


ICT Ministry discusses expanding LG’s investments in Egypt

ICT Minister Amr Talaat met yesterday with representatives from LG to discuss expanding the company’s investments in Egypt, including manufacturing tablets in Egypt, according to a ministry statement.

Health + Education

Gov’t signs agreements with private hospitals to train Port Said medical professionals

The Health Ministry signed last week agreements with Cleopatra Hospitals Group, As-Salam, Dar Al Fouad, and Magrabi hospitals to train medical and administrative staff at several Port Said hospitals, according to a cabinet statement. The focus on training up staff and renovating hospitals comes ahead of the rollout of phase one of the universal healthcare system — which is piloting in Port Said — this year.

Real Estate + Housing

Heliopolis Housing says presidential decree ends dispute on Shorouk plot

Real estate developer Heliopolis Housing said that a dispute over the payment it owes for its 22.71 sq-km plot in Shorouk has been resolved by a presidential decree ruling that the company should only pay the value of 0.71 sq-km to the New Urban Communities Authority, the company said in a bourse filing (pdf). The company was given the plot as compensation for another piece of land it owned, which became part of a project to develop Cairo Airport.

Heliopolis Housing aims to reduce debt by 50% in coming fiscal year

Real estate developer Heliopolis Housing is looking to reduce its debt by 50%, grow revenues to more than EGP 3.1 bn and achieve a net profit of EGP 1.1 bn in the coming fiscal year, according to statements from CEO Sahar Damati reported by the local press.

Marakez signs contracts with Hassan Allam Construction for AEON

Real estate developer Marakez has signed a contract with Hassan Allam Construction for its AEON residential compound, according to a press release (pdf). AEON, located southeast of Mall of Arabia in 6 October, will come at a cost of EGP 2.2 bn over a built up area of 66.5k sqm. The project will offer 401 homes spread across three 72-meter towers, the first of which is due for completion in 2022.

No more new capital land for Egypt’s investors, developers this year

The New Administrative Capital Company (NACCUD) will not be offering any more land to investors and developers this year, and will only be handling allocation requests it has already received, NACCUD Spokesperson Khaled El Hosseini had told the domestic press.


Egypt to launch tourism promotion campaigns in India, China, Latin America

The Tourism Ministry will kick off its promotional campaign for the winter season with campaigns in India, China, Latin America, and Europe, according to Al Mal. Ramping up tourism campaigns is part of minister Rania Al Mashat’s five- pillar strategy aimed at reforming the sector.

Rixos to inaugurate three new hotels in Hurghada in 2019

Rixos Hotels is planning to inaugurate three new hotels in Hurghada by the end of 2019, Zawya reports. No details on the investment value of the new facilities were provided. The hotels — located in Makadi Bay, Magawish, and Sahl Hasheesh — will add 2,000 rooms to the hotel chain’s room supply in Egypt. This will double Rixos’ supply in the country as it currently manages three hotels, with 2,000 rooms. We have noted last year that Rixos is planning to surpass 10,000 rooms within the next five years.

Automotive + Transportation

Gov’t to establish national shipping and maritime transport company

Prime Minister Moustafa Madbouly has commissioned his government to draft a plan to set up a national company for shipping and maritime transport, according to a cabinet statement. The move aims to link Cairo with its African neighbors and facilitate Egyptian exports on the continent. The decision was announced following a meeting between Transport Minister Kamel El Wazir, Suez Canal Authority boss Mohab Mamish and other relevant officials.

Banking + Finance

Orascom Development Egypt renegotiates terms on 2016 syndicated facility

Samih Sawiris’ Orascom Development Egypt (ODE) has reached an agreement to amend the payment terms of a syndicated loan it had arranged through local banks in 2016, sources said, according to Al Mal. Under the amendment terms, ODE will make an immediate payment of EGP 650 mn and settle the remainder over 5.5 years — instead of 7.5 — starting 30 June. The new terms will also see interest due on the USD tranche of the loan reduced by 100 bps. ODE acquired the funding back in 2016 to reschedule short-term debt, it included two tranches worth EGP 439 mn and USD 65 mn respectively.

Other Business News of Note

EFG to pay EGP 499 mn in dividends at 0.65 per share

EFG Hermes agreed this week to pay EGP 499 mn in dividends to shareholders at 0.65 per share, according to a company statement (pdf). The company reported a net profit of EGP 1 bn on revenues of EGP 4.3 bn last month.

Arabia Investments hearing against Peugeot postponed until 9 June

The court hearing for a case brought by Arabia Investments Holding (AIH) against Peugeot has been postponed until 9 June, reports Al Mal. AIH had sued the French automaker for damages worth EUR 150 mn for allegedly breaking terms of contract.

Egypt Politics + Economics

Trade Ministry, UN, ILO sign document to combat illegal migration

The Trade and Industry Ministry signed yesterday a contract with the International Labor Organization for a project aimed at curbing illegal migration by providing jobs, according to a cabinet statement. The UN-funded program aims to combat the root problems of illegal migration.

On Your Way Out

Will we see a new Egypt-themed collection from luxury fashion house Burberry?

On a recent visit to Egypt, Burberry’s creative director Riccardo Tisci seems to have found some inspiration for the luxury fashion house’s next collection, if some of his recent social media posts are any indicator. Harper’s Bazaar Arabia, for one, is anticipating an Egypt-inspired Burberry line at the London Fashion Week.

The Market Yesterday

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EGP / USD CBE market average: Buy 17.11 | Sell 17.21
Buy 17.12 | Sell 17.22
EGP / USD at NBE: Buy 17.12 | Sell 17.22

EGX30 (Monday): 14,801 (-0.3%)
Turnover: EGP 340 mn (60% below the 90-day average)
EGX 30 year-to-date: +13.5%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.3%. CIB, the index heaviest constituent ended up 0.4%. EGX30’s top performing constituents were Kima up 5.5%, and Arab Cotton Ginning up 1.5%, and Orascom Investment Holding up 1.4%. Yesterday’s worst performing stocks were Oriental Weavers down 13.9%, EFG Hermes down 1.6% and Ezz Steel down 1.6%. The market turnover was EGP 340 mn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -1.0 mn
Regional: Net Short | EGP -15.8 mn
Domestic: Net Long | EGP +16.7 mn

Retail: 60.7% of total trades | 59.2% of buyers | 62.3% of sellers
Institutions: 39.3% of total trades | 40.8% of buyers | 37.7% of sellers

WTI: USD 65.70 (+2.66%)
Brent: USD 74.37 (+0.45%)

Natural Gas (Nymex, futures prices) USD 2.53 MMBtu, (+0.16%, May 2019)
Gold: USD 1,277.60 / troy ounce (0.00%)

TASI: 9,195.02 (-0.48%) (YTD: +17.48%)
ADX: 5,386.44 (+0.75%) (YTD: +9.59%)
DFM: 2,820.95 (+0.01%) (YTD: +11.51%)
KSE Premier Market: 6,169.07 (-1.28%)
QE: 10,401.40 (+0.44%) (YTD: +0.99%)
MSM: 3,978.60 (-0.15%) (YTD: -7.98%)
BB: 1,442.78 (-0.25%) (YTD: +7.89%)

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23-24 April (Tuesday-Wednesday): SME Corporate Governance Workshop, Fairmont Nile City Hotel, Cairo, Egypt.

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

25 April (Thursday): Belt and Road Forum for International Cooperation, Beijing, China.

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 will hold its two-day policy meeting to review the interest rate.

May: 50 Egyptian companies are set to visit Libya to discuss trade, investment and reconstruction.

May: An IMF delegation will be in town to conduct its final review of the reform program.ahead of the disbursement of the fifth and final tranche of Egypt’s USD 12 bn IMF loan.

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

4 May (Saturday) An administrative court will look into an appeal by Emirati business figure Mohamed Alabbar’s Adeptio AD Investments against a Financial Regulatory Authority order to submit a mandatory tender offer (MTO) for Americana.

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

23 May (Thursday): Central Bank of Egypt’s monetary policy committee will meet to review interest rates.

1H2019 (date TBD): Investment Minister Sahar Nasr will head a delegation of businessmen into Mexico City to explore cooperation avenues with the Latin American country.

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

June: Egypt will host the first economic forum for Union for the Meditteranean (UfM) countries to promote trade and investment in the 43 member states.

June: President Abdelfattah El Sisi to attend US-Africa Business summit in Mozambique.

4-5 June (Tuesday-Wednesday): Global Entrepreneurship Summit, The Hague, the Netherlands

5-6 June (Wednesday-Thursday): Eid El Fitr (TBC).

9 June (Sunday): A court will look into a lawsuit by a subsidiary of Arabian Investments, Development and Financial Investment Holding Co. (AIND) against Peugeot Citroen. The lawsuit, seeking EUR 150 mn in damages, has been postponed twice: from 17 March and 21 April.

11-12 June (Tuesday-Wednesday): Offshore Congress MENA, InterContinental Semiramis, Cairo.

16-17 June (Sunday-Monday): Mega Projects Conference, Egypt International Exhibition Center, Nasr City, Cairo.

16-18 June (Sunday-Tuesday): Middle East & Africa Rail Show, Egypt International Exhibition Center, Nasr City, Cairo.

17-18 June (Monday-Tuesday): Seamless North Africa, Nile Ritz-Carlton, Cairo.

17-19 June (Monday-Wednesday): Cairo Technology Week, Hilton Heliopolis, Cairo.

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

19-20 June (Wednesday-Thursday): Pharos Holding Annual Investor Conference, El Gouna, Egypt.

23 June (Sunday): Cairo Arbitration Court hearing for Amer Group vs. Antaradous for Touristic Development

28-29 June (Friday-Saturday): G20 Global Economic Summit, Osaka, Japan.

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

July: Customs officials from Egypt and the US will sit down to discuss “procedural and administrative matters” as part of the Trade and Investment Framework Agreements (TIFA).

11 July (Thursday): Central Bank of Egypt’s monetary policy committee will meet to review interest rates.

19-21 July (Friday-Sunday): LED Middle East Expo, Egypt International Exhibition Center, Nasr City, Cairo.

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

30-31 July (Tuesday-Wednesday): US Federal Open Market Committee will hold its 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 will meet to review interest rates.

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

2-4 September (Monday-Wednesday): The Big 5 Construct Egypt, Egypt International Exhibition Center, Nasr City, Cairo.

8-11 September (Sunday-Wednesday): Sahara Expo, Egypt International Exhibition Center, Nasr City, Cairo.

9-12 September (Monday-Thursday): The 9th Annual EFG Hermes London Conference, Arsenal Emirates Stadium, London.

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

26 September (Thursday): Central Bank of Egypt’s monetary policy committee will meet to review interest rates.

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

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

23-24 October (Wednesday-Thursday): Intelligent Cities Exhibition & Conference, Hilton Heliopolis, Cairo.

23 October-1 November (Wednesday-Friday): CIB PSA Women’s World Championship, Great Pyramid of Giza, Cairo.

28 October-22 November (Monday-Friday): World Radiocommunication Conference 2019, Sharm El Sheikh, Egypt.

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

3-5 November (Sunday-Tuesday): Electrix 2019, Egypt International Exhibition Center, Nasr City, Cairo.

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

10-14 November (Sunday-Thursday): GeoMEast International Congress and Exhibition, Marriott, Cairo.

14-17 November (Thursday-Sunday): Machtech Expo, Egypt International Exhibition Center, Nasr City, Cairo.

14-17 November (Thursday-Sunday): Transpotech Expo, Egypt International Exhibition Center, Nasr City, Cairo.

14-17 November (Thursday-Sunday): Airtech Expo, Egypt International Exhibition Center, Nasr City, Cairo.

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

3-6 December (Tuesday-Friday): Cairo WoodShow, Egypt International Exhibition Center, Nasr City, Cairo.

9-11 December (Monday-Wednesday): Pacprocess Middle East Africa, Egypt International Exhibition Center, Nasr City, Cairo.

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

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

26 December (Thursday): Central Bank of Egypt’s monetary policy committee will meet to review interest rates.

9-12 January 2020 (Tuesday-Sunday): PLASTEX, Egypt International Exhibition Center, Nasr City, Cairo.

25 January 2020 (Saturday): 25 January revolution anniversary / Police Day, national holiday.

11-13 February 2020 (Tuesday-Thursday): Egypt Petroleum Show, Egypt International

Exhibition Center, Nasr City, Cairo.

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