Thursday, 11 July 2019

Rejoice: Inflation cooled in June


What We’re Tracking Today

Admit it: You didn’t expect to see inflation at single digits last month. Annual inflation plunged to three-year lows in June, hitting single-digit figures for the first time since March 2016. Capmas data shows that inflation fell to 9.4% last month from 14.1% in May.

Will this have any impact on the central bank’s decision on interest rates? It’s unlikely. Economists we spoke to yesterday still overwhelmingly agree that the Monetary Policy Committee will choose to leave rates on hold when it meets later today. However, Pharos has now joined Naeem Brokerage in predicting a 100 bps rate cut. Eight of nine economists we polled prior to the release of the new inflation data forecast a hold, while a Reuters survey produced similar results, with 14 of 15 respondents saying the same. We have chapter and verse in this morning’s Speed Round, below.

New export subsidies framework that could see brand new incentives tied to Africa exports could be revealed next week,unnamed government sources tell the local press. The new framework to disburse export subsidies currently being drafted by the government could see exporters receive advantages in land allocation and land prices for their projects. Those who export to new markets, such as East Africa, might also receive further incentives, said the head of the construction materials export council Walid Gamal El Din.

It would appear the government is transitioning export subsidies payments from a cash-based program to an incentive-based program. The finance and trade ministries held meetings last month to discuss allowing exporters to net overdue subsidies off against their taxes. The move comes as part of the government’s effort to make good on what is claimed to be some EGP 12 bn owed to Egyptian exporters by the Export Subsidy Fund since last year. Sources said that 80 companies are expected to be paid overdue export subsidies (in one form or another) over the coming three months.

The House of Representatives’ general assembly is expected to vote on amendments to the controversial “old rent” law today, according to Al Mal. The amendments, which would subject commercial tenants with leases signed prior to 1996 to an instant 5x hike in rent and a 15% annual increase for five years, stirred up quite the debate when House Speaker Ali Abdel Aal insisted that the law be applicable to individuals as well as companies. The majority of representatives appear to have rejected Abdel Aal’s proposal, arguing that the move would be burdensome in a high-inflation environment.

Across the pond, expectations for the first interest rate cut in the US in a decade are growing stronger after US Federal Reserve Chair Jerome Powell said concerns over the economic outlook have not dissipated in recent weeks. “Though the U.S. government reported strong job growth for June, other major economies’ ‘data have continued to disappoint. That is very broad across Europe and around Asia, and that continues to weigh,’” Powell said in his testimony before the House Financial Services Committee yesterday, according to Reuters. The trade riff with China has also been weighing on the American economy, and agreeing to restart talks with Beijing is positive, but “doesn’t remove the uncertainty,” he said.

Powell’s message was reinforced by the minutes from the Fed’s policymaking committee’s last meeting, in which officials said “a rate cut could be warranted ‘in the near term’ if uncertainty persisted,” the New York Times says. The Fed next meets on 30 and 31 July.

Investors are “warming” to EM fixed income: Growing certainty about the US Federal Reserve’s policy direction combined with last week’s trade ceasefire between the US and China is good news for EM bonds, Mark Matthews, MD and head of Asia research at Bank Juluis Baer, told Bloomberg (watch, runtime: 2:34) “People are warming to the EM asset class on the fixed income side… We like both local currency and USD. The spread between the two is tight enough that buying USD isn’t going to deteriorate your returns that substantially,” he said.

Morgan Stanley could give EM bonds a boost. Morgan Stanley’s report earlier this week advising investors to get out of equities and into EM bonds could draw more attention to the asset class. An article on Seeking Alpha points out that the yields offered by emerging bond ETFs are considerably more attractive than other passively managed bond funds. JPMorgan’s EM bond ETF is currently yielding 5.27% while Vanguard’s ETF has a 5.22% yield, providing a better return than many US junk bonds.

A consortium led by British private equity firm CVC Capital Partners has agreed to acquire 30% of Dubai-based GEMS Education, according to the Financial Times. The stake is currently held by another consortium led by Dubai’s Fajr Capital, which includes funds managed by Bahrain’s sovereign wealth fund Mumtalakat and US PE firm Blackstone. GEMS is one of the largest education providers in emerging markets.

The US is looking for an Iran agreement — but could still impose more sanctions: The White House is looking to replace the 2015 Iran nuclear accord with a Congress-approved agreement, but could introduce yet more economic sanctions against Tehran, US Special Representative for Iran Brian Hook said yesterday, Reuters reports. Iran swiftly shot down the idea, with Foreign Minister Mohammad Javad Zarif saying that “negotiations are never possible under duress,” according to Bloomberg. Tehran refused to back down on its nuclear breach unless Europe gives it full economic support, the Guardian says.

Egypt keen to dial back tensions: Egypt is opposed to conflict with Iran due to the potential knock-on effects in the Gaza strip, unnamed officials told Ahram Online. The sources voiced concern that Iran could attempt to unwind the fragile truce between Hamas and Israel that Egypt helped to broker earlier this year.

In global miscellany:

  • Trump makes a soft U-turn on Huawei: The US will issue licenses to companies wanting to sell American-made products to Huawei provided that it does not harm national security, Commerce Secretary Wilbur Ross said yesterday, according to CNBC.
  • Britain’s ambassador to the United States, Kim Darroch, resigned yesterday after the leak of diplomatic cables earlier this week in which Darroch called the Trump administration “inept,” among other criticisms, the Associated Press reports.
  • Turkey isn’t looking so good: Actions taken by Turkish President Recep Tayyip Erdogan, including ousting the central bank chief, could cause the country’s economy to collapse, Ashmore Group has warned, Bloomberg says.

PSA- The Harvard Business School admissions team is coming to Cairo for the first time to host an information session for prospective MBA students on Wednesday, 17 July at the Greek Campus at 7:00 pm CLT. Did you attend HBS? The admissions team also wants to connect with alumni, and will host a separate reception exclusively for alumni before the presentation. You can register for the event here.

Enterprise+: Last Night’s Talk Shows

Yesterday’s release of lower-than-expected inflation figures was among the highlights on the airwaves last night, which were otherwise relatively bland.

Yahduth fi Masr’s Sherif Amer gave us a blow-by-blow of Capmas’ report on June’s inflation figures, which were driven down by a drop in most foodstuff, particularly vegetables. Some food items, including seafood and fruits, saw their prices rise during the month, Amer noted (watch, runtime: 1:57). We have the full story in Speed Round, below.

Supply Ali El Moselhy reassured the public that there will be no increases in the prices of subsidized bread and basic commodities despite this month’s fuel subsidy cuts, Amer also reported (watch, runtime: 2:13).

El Sisi’s African diplomacy still going strong: Al Hayah Al Youm’s Khaled Abu Bakr kept himself busy with President Abdel Fattah El Sisi’s bilateral discussions with Tanzanian Prime Minister Kassim Majaliwa (watch, runtime: 2:51). The meeting comes after El Sisi chaired on Sunday a two-day summit in Niger to launch the African Continental Trade Area (AfCFTA)

Speed Round

Speed Round is presented in association with

Inflation hits lowest levels in over three years, but mind the subsidy cuts in next month’s reading: Egypt’s annual headline urban inflation rate dropped to 9.4% in June from 14.1% in May, the first time the reading has come in single digits since March 2016, the CBE said (pdf) in a statement on Wednesday. Capmas attributed the drop to a 2.2% month-on-month decline in food prices. The drop follows a surprisingly uptick in headline inflation the previous month to 15.1% from 13% in April, following a downward trend which began in February. Annual core inflation came at 6.4%, down from 7.8% in May, said the CBE. Bloomberg and Reuters also have the story.

Base effect could explain the drop: “The drop is a result of a favorable base effect of 2018, which saw energy prices go up in June by 50%, followed by a pickup in inflation, whereas this June saw no fiscal measures,” said CI Capital economist Noaman Khalid.

The new figures have pushed analysts to lower their projections for inflation this year. “We revised downward our inflation rates for 2H2019, expecting an average reading of 8.8% (versus our earlier estimate of 13.8%) only on the back of adjusted calculations following the new low figure registered in June,” Beltone Financial said. Pharos Holding has also revised its inflation forecasts for July, August, and September to 9.9%, 10.8%, and 9%, respectively, said Radwa El Swaify, head of research at the investment bank. Shuaa Securities also said it saw July inflation coming at lower than 14.5%, as previously expected, but preferred not to give out a specific range. “We’re looking for 10-11% in July and August, single-digits from September to November before ending the year at 10-12%,” said EFG Hermes’ Mohamed Abu Basha.

Good news for carry traders: The lower inflation rate increases the real yield in investment, which could help maintain a healthy appetite in the treasury market, CI Capital’s Khalid says. Foreign holdings in Egyptian treasury bonds have been recovering since the beginning of this year, rising to around USD 18.7 bn as of June.

REVISED INTEREST RATE POLL- Despite the drop, the CBE is still widely expected to hold its key interest rates in its MPC meeting later today in light of the government raising fuel prices between 16% and 30% earlier this month and new electricity subsidy cuts coming into effect. Four of the nine economists we polled earlier this week maintained their prediction that the CBE to keep the overnight deposit and lending rates at 15.75% and 16.75%, respectively. Even those who see a high chance of a rate cut still think the CBE will prioritize the impact of the subsidy cuts. “Falling inflation, coupled with the dovish shift among central banks around the globe, increases the chances of an interest rate cut. But we think that the CBE will want to assess the impact of electricity and fuel price hikes that took effect this month,” Capital Economics said in a note yesterday.

Pharos Holding has revised its position, expecting the CBE to cut the rates by 100 bps in today’s meeting. With the high demand from foreign investors for EGP treasuries, the strengthening of the EGP, and the newly revised projections for inflation this year, analysts at Pharos believe that the environment is ripe for an interest rate cut.

Naeem Brokerage’s Allen Sandeep also maintained his position that the CBE will ease monetary policy by cutting rates by 100 bps today, telling Enterprise yesterday that the new inflation figures only confirmed his forecast. “For the months of July and August, we expect the monthly inflation rate to rise on account of the latest round of energy subsidy cuts; however, with the price hikes (in percentage terms) being well below 2018 levels, the uptick in inflation should be relatively muted, leaving some room for monetary easing,” Naeem said in a note yesterday.

If not now, then when? Shuaa Securities’ Esraa Ahmed said she expected a cut in August or September — instead of November as previously forecasted — should the July figures rise at a moderate level. Other analysts have told Enterprise that they also saw cuts coming earlier than initially expected, but preferred not to say when just yet.

EXCLUSIVE- No stake sales in state companies happening before September: The sale of additional stakes in already listed state companies will not take place before September, Public Enterprises Minister Hisham Tawfik tells Enterprise. The sale of an additional stake in Alexandria Containers and Cargo Handling Company (ACCH), Abu Qir Fertilizers, and Sidi Kerir Petrochemicals (Sidpec) will not take place before then due to the summer holidays and Eid break, explained Tawfik. He added that the likeliest date to resume the share sales, which come as part of the state privatization program, will be 4Q2019.

Where do things stand with these companies? Advisers on the share sale of ACCH (advised by EFG Hermes and Citi) have concluded roadshows in Dubai and London late last month, while Abu Qir (advised by Rencap and CI Capital) had been set to proceed with the sale shortly after the Eid break. Preparations are underway to kickstart the bookbuilding process of a 30% stake sale in Sidpec. There had been no share sales since Eastern Tobacco sold a 4.5% stake back in early March.

Should we expect a flurry of activity on the program towards the end of the year? State-owned companies selected to make initial public offerings of their shares will move forward with transactions starting in September as scheduled, Tawfik had told us back in June. Should the sale of additional stakes in ACCH, Abu Qir, and Sidpec take place around that time, we should be in for a busy 4Q2019 and early 2020.

IPO WATCH- Fawry IPO preparations are underway, but no confirmation on date, size: Preparations for an initial public offering by e-payments platform Fawry are underway as shareholders are leaning towards a listing on the EGX, Fawry Managing Director Mohamed Okasha tells Arabic Reuters. That said, the size of the IPO and the amount of shares that will be on offer has yet to be decided, he noted, adding that a decision on conducting the fair value report have yet to be reached. Okasha reiterated previous statements the company is mulling a listing sometime in 2019 or 2020 to finance its expansion plans.

Okasha did not confirm or refute reports in the local press on Tuesday that IPO would take place before the Eid Al Adha break in mid-August. Reports we noted yesterday said claim that the company will offer 45% of its shares in the IPO and is expecting proceeds of between EGP 2 and 2.5 bn, which would value Fawry at EGP 4.5-5.5 bn. The reports also noted that FinCorp was hired to conduct a fair value study, while EFG Hermes was tapped to lead the transaction, while Zulficar & Partners is said to be on board as legal counsel. EFG Hermes did not comment on whether it was advising on the transaction when asked by Reuters.

DISPUTE WATCH- Madbouly Cabinet signs off on El Nasr, Emaar settlement: The Madbouly Cabinet has signed off on the settlement agreement between property developers Emaar Misr and state-owned El Nasr Housing, according to a cabinet statement. El Nasr brought an arbitration case against the local subsidiary of UAE-based Emaar in June 2017, alleging the company had failed to develop 3 mn sqm of land allotted to it in 2005, and that it unlawfully took 215k sqm within the borders of its Uptown Cairo project. The dispute also included a 500k sqm land plot, which Emaar was accused of using for construction instead of roadworks and green areas.

The settlement terms: The terms of the settlement will see both sides drop all arbitration cases against each other, Deputy Justice Minister for Arbitration and International Disputes Judge Moustafa El Bahabety told Enterprise in an exclusive, confirming Emaar’s statement from earlier in the week. El Bahabety also confirmed that Emaar will pay EGP 100 mn to settle the issue of the 215k sqm land El Nasr is alleging was taken unlawfully. Other settlement details revealed to us by El Bahabety include:

  • Emaar will commit to a timetable to complete the development of Uptown Cairo by 2028;
  • Emaar will return 5% of the land to Cairo Governorate;
  • El Nasr will facilitate all licensing required to complete the development of the project;
  • El Nasr will also be responsible for registering the land for project in the Real Estate Registry, thereby alleviating Emaar from the procedural and red tape required to get the project up and running.

Cabinet signs off on another settlement agreement with a whole other El Nasr: The Madbouly Cabinet also signed off yesterday on a settlement agreement ending the dispute between Al Kholoud for Touristic and Real Estate Development and the Egyptian government over El Nasr for Steam Boilers, El Bahabety tells us. He confirmed reports we noted yesterday that Al Kholoud would drop its arbitration suit over the sale of a 29-feddan land plot that holds El Nasr’s steam boilers facility, in exchange for the government dropping a EGP 600 mn claim it says it is owed by Al Kholoud. Al Kholoud will also return the land plot back to the government.

The settlement resolves a privatization unwinding dispute dating back to 2011: This resolution is part of a larger case, which saw Al Kholoud file a 2013 arbitration case against the Egyptian Petrochemical Holding Company and Metallurgical Holding Company. The company brought the suit following a Council of State’s decision in 2011 to reverse several privatization transactions from the 1990s, including the sale of El Nasr’s steam boilers facility in 1994.

Expect to see more settlements in cases involving the unwinding of privatization since the House of Representatives general assembly gave its final approval last month to a law that would refer disputes over privatization to the cabinet’s dispute resolution committee.

LEGISLATION WATCH- The House of Representatives’ general assembly approved yesterday the new Social Security and Pensions Act, which would see 21% of the monthly salary of public and private sector workers contributed into a newly-established pension fund, reports Masrawy. The assembly is set to cast its final vote on the bill later today, House Speaker Ali Abdel Aal said, according to the newspaper. Parliament reviewed the final bill with the Council of State (Maglis El Dawla) yesterday to be able to hold the final vote before heading off for their summer recess.

What does the law entail? Under the draft law, employees would contribute 9% of their salaries and the employer would be required to put up 12% into the new fund, sources told us earlier this week. The salary percentage would increase by 1% once every seven years until it hits 26%. The increases would be split down the middle between the employee and the employer, with each seeing their contribution rise by 0.5% every seven years. The law would also set up a committee of actuarial experts to evaluate the social security system and provide advice to the Pensions Authority.

Separately, the House approved yesterday draft amendments that would keep the provisional stamp tax on EGX transactions unchanged at 0.15%, reports Al Mal. A final general assembly vote is still pending. The tax was scheduled to increase to 0.175% on 1 June as part of a plan to hike it annually over a three-year period, but the Finance Ministry called off the increase in a move designed to ease the financial burden on traders.

Boudy Group halts plans to assembly Changhe cars, saying Chinese cars don’t sell as well: Boudy Group, the local distributor for China’s Changhe Automobile and Kenbo, is mulling freezing plans to assemble Changhe cars in Egypt due to the weak demand for Chinese cars in the market, General Manager Mostafa Mohamed told Al Mal. The group has also decided to halt imports of Changhe Q7, which it had begun selling in Egypt last year, because the car failed to compete with other SUV sport cars of lower prices. The company had said last year that it was reviewing offers from ِAboul Fotouh Automotive and the Egyptian German Automotive Company to begin locally assembling Changhe Q7 in 2019, expecting to assemble 1,000 cars per year at an initial investment cost of EGP 100 mn.

The news comes as a number of other companies have expressed interest in assembling cars in Egypt amid a bundle of incentives the government is currently reviewing. Sources had told Enterprise that the incentives, which would include customs breaks reaching 100%, would be a sliding scale based on how much local content manufacturers use, starting at 10%.

INVESTMENT WATCH- Al Sahab to set up USD 300 mn wholesale clothing market: The Supply Ministry’s Internal Trade Development Authority (ITDA) signed yesterday a cooperation protocol with Al Sahab Real Estate Investment to set up a USD 300 mn wholesale clothes market in Obour City, according to a Cabinet statement. The market will house 1000 shops for clothing manufacturers to sell their goods, 80% of which will be earmarked for export, according to ITDA boss Ibrahim Ashmawy. The project will be funded by Emirati, Saudi, and Egyptian investors, and should be complete within four years, according to Al Sahab Chairman Fouad Hodroj.

Good news for bread subsidy watchers (and bad news for wheat importers) — wheat imports, prices fall: Wheat imports declined by 9.6% in 1H2019 to 5.7 mn tonnes, the local press reported, citing data from the General Organization For Export & Import Control. Accompanying this drop in imports was a decline in global wheat prices, with Business Insider’s wheat market tracker showing a 15.2% drop in global wheat prices YTD. In other wheat news, the General Authority for Supply Commodities (GASC) said that three companies have won a tender on Tuesday to supply it with 240k tonnes of Romanian and Ukranian wheat, AMAY reported.

El Erian in the running to become the next IMF head: Former PIMCO CEO, Bloomberg columnist, and all-round market guru Mohamed El Erian is among the candidates to become the IMF’s new managing director when Christine Lagarde departs for the European Central Bank in November, the New York Times reported.

There’s no shortage of competition: Outgoing Bank of England Governor Mark Carney is the current favorite for the position, while the former governor of the Indian central bank Raghuram Rajan is in second, according to Bloomberg. Singaporean economist and politician Tharman Shanmugaratnam, Credit Suisse CEO Tidjane Thiam, and Agustin Carstens, general manager of the Bank of International Settlements have also thrown their hats into the ring, while former UK Chancellor George Osborne and ex-Federal Reserve Chair Janet Yellen reportedly have an outside chance.

EARNINGS WATCH- QNB Al Ahli reported a net profit of EGP 2.2 bn in 2Q2019, up 18.4% y-o-y from EGP 1.9 bn in the same quarter last year, according to an EGX filing (pdf). Revenues for the quarter recorded EGP 8.1 bn, up from 7.3 bn in the same quarter last year.


Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Image of the Day

Cartography in eleventh-century Cairo: Apollo Magazine reviews this collection of Fatimid-era maps stored at Oxford University’s Bodleian library. Pictured above is a map of Sicily, which has been dated back to around 1200 CE.

Egypt in the News

Planned lawsuit against Christie’s continues to top coverage: On an otherwise calm morning for Egypt in the foreign press, the government’s plan to take legal action against London’s Christie Auction House is still leading the conversation on Egypt in the foreign press this morning, with Japan’s state broadcaster NHK the latest to take note.

Another day, another Amnesty report: Political dissidents are arbitrarily detained in Egypt, and find themselves back in prison on “fabricated charges,” says Amnesty International.

On The Front Pages

President Abdel Fattah El Sisi’s meeting with the electricity and finance ministers to discuss improving electricity services sits at the top of state-owned Al Akhbar’s front page. Ittihadiya was out with a statement following the meeting.

Diplomacy + Foreign Trade

Saudi Arabia signs EGP 125 mn-worth agreements to support SMEs in Egypt: The Saudi Arabia Development Fund signed three agreements worth EGP 125 mn to provide funding to SMEs through local microfinance firms EFG Hermes Leasing, Global Lease and UI Finance, the Investment Ministry said in a statement. The first agreement entails granting EGP 75 mn in funding to EFG Hermes under the condition it allocates 50% of the amount to the agriculture and livestock sector. The two other agreements entail granting Global Lease and UI Finance EGP 25 mn each to use them to support SMEs in the renewable energy, health, industrial, agriculture and livestock sectors in southern and Delta governorates.

In other news from the kingdom: Egyptian exporters will now be required to use biodegradable plastic starting April 2020: Saudi regulators will begin in April 2020 requiring Egyptian exporters to package goods bound for the Saudi market using biodegradable plastic, head of Chamber Of Chemical Industries’ plastic division Khaled Abou El Makarem said, according to Al Shorouk. Egyptian factories will have to bear the added cost of up to 4% to add the 'd2w' additive to the plastic.

Real Estate + Housing

Demand for Cairo office space increases in 1H2019

Demand for office space in Cairo increased in 1H2019 on the back of improving economic conditions, real estate services provider Savills has said in a new report (pdf). The research, which analyzes the office market in the Greater Cairo area, found that Grade A developments in New Cairo and Sheikh Zayed have attracted the most interest so far in 2019. New market entrants were limited, with demand being driven mainly by businesses in the tech, banking, pharma, and media sectors with existing offices.

Automotive + Transportation

Egypt offers discounts up to 45% on vessels passing through Suez Canal

Cargo carriers traveling through the Suez Canal and docking at an Egyptian port will be granted discounts of up to 45% on navigation aid and lighthouse fees, according to a Transport Ministry statement. The Suez Canal Authority has regularly been offering discounts to vessels passing through the canal in a bid to attract more traffic.

Other Business News of Note

Madbouly, El Molla holds talk with Bechtel chairman on Egypt cooperation

Prime Minister Moustafa Madbouly and Oil Minister Tarek El Molla held talks yesterday with the chairman of Virginia-based construction outfit Bechtel Corporation, Brendan Bechtel, according to a Cabinet statement. The company is looking to increase its investments in Egypt, Bechtel told Madbouly, who pointed to seawater desalination projects as a potential area of cooperation.

My Morning Routine

Haitham Mohamed, chief executive officer at ORA Developers: My Morning Routine looks each week at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Haitham Mohamed (LinkedIn), chief executive officer at ORA Developers, which is a leading real estate developer in different locations — prime, new, and emerging — around the world.

I’m Haitham Mohamed and I’m the chief executive officer at ORA. I started my career in the telecommunication industry, working with Orascom Telecom for 11 years. I was part of the team that started our operations in 17 different countries across Europe, Asia, and the Middle East. In 2011, I made a career shift to real estate, initially working with SODIC, then moving to Amer Group. Finally, I joined ORA, where our aim is to create developments that are designed to be both beautiful and environmentally sustainable.

As CEO, it’s my job to make sure that our day-to-day operations are aligned with our values, which are driven by customer need. A lot of my focus is on technical operations and marketing, as well as hiring everywhere you can imagine. We have our daily sales targets, and of course we also devote a lot of time to product design and market research, determining how we will market our products to customers. It’s a very comprehensive role.

I start my day at 8 am, when I leave for the office. My commute takes me half an hour, and as soon as I arrive I go to Starbucks to grab my coffee and return to the office. A lot of my job revolves around meetings and daily management tasks, as these are crucial to achieving long-term strategic goals. My first meeting of the day is with the marketing team, to hear updates and see what is planned for the coming period. Then I sit with the technical team to review our latest designs and the products being developed. After that, I sit with the business planning and development team, and we look at numbers and budgeting. I also spend at least an hour every day with our sales team to address whatever challenges they are facing.

Currently the market is very tough and we need to have a very clear sense of what our customers need, so we can develop a product that satisfies this need. I will often conduct interviews for new hires, and then my working day usually ends around 7-8 pm. After this I go home and spend the evening with my family: My wife, and our 12-year-old son and 10-year-old daughter.

One of the major focal points in my life is my son’s football training. He plays for Zamalek and has just been awarded the prize of best young player in Egypt in 2019. He’s also currently the top scorer in the Egyptian Youth League. My hobby is watching him play and attending his training sessions. He usually trains three days a week in the early evening, and has a match every Friday. So on Fridays we all wake up at 7 am and go to watch him play, before going for lunch as a family.

I hope my son will be the next Mohamed Salah. When he was 10 and he told me that he wanted to be a football player, I asked him whether he was prepared to make sacrifices. I told him he would be training while his friends were playing Fortnite and going to the beach. To be properly trained, you have to start aged 10. You will have to dedicate a huge part of your life to thinking about your career, from a young age. It’s a lot of responsibility and stress for a young person. He travels to Paris St Germain and Monaco during his vacation periods for trials. So we’re developing a new company in Egypt and I’m developing my boy in the field of football. All my efforts are going into entrepreneurial endeavors.

This year’s Afcon is one of the best things I’ve seen recently. I feel the whole tournament has been amazing, and I’m very impressed with the organization. But I’m not really sure why people are treating Egypt’s loss to South Africa as such a great shock. This is the reality of football: You won’t win every match.

If we want our football to improve, we have to change our approach. Youth are the future, and we are currently not focusing on them the way they are in France, Italy, Spain, and Germany. If you look at the Egyptian team that won Afcon for three consecutive years, you’ll see that these players had been winning tournaments since they were 17 years old. We need to invest in developing the pipeline of good players.

ORA was the brainchild of Naguib Sawiris, who had started working on a business plan he had for new developments in Grenada, Pakistan, and one for Cyprus. He particularly wanted to target unique locations, to do something out-of-the-ordinary and bring something new to the market. We were looking for a new brand, and the best name we found was ORA. It comes from the idea of giving birth, and for us this was a new baby. We launched in Cyprus in 2016, Pakistan in 2017, Grenada in 2018, and Egypt in 2019.

At ORA, we really target the best locations, which automatically become the most expensive places for development. In Cyprus we are part of Ayia Napa Marina, and in Pakistan our location is in one of the most luxurious places in Islamabad. In Grenada, we’ve built one of the most expensive and high-end real estate developments in the world. In Egypt, we selected the last piece of land in Sheikh Zayed, overlooking about 65 acres, to build on. What we try to do is to combine luxury with affordability. We’re offering a new version of luxury, developing something very high-end but affordable.

I believe customers have become more discerning. They understand the market better than they did several years ago, and they have really shifted their focus from the brand to the product. After the devaluation, customer needs really changed. In the past, people were very focused on buying villas, but now they see that if they buy a villa they also need to complete all its finishing, which is often actually more expensive than the villa itself. Then they have to take care of their running costs too. Now they are much more focused on buying apartments, which is one reason why we are committed to offering quality apartments of different sizes, depending on the exact needs of different families. Customers are becoming more sophisticated, and if they don’t find what they’re looking for in a high-end brand, they will look for it in a different brand.

How to find the right land is arguably the most important consideration for anyone working in real estate and development. Land is very expensive nowadays and it has a huge impact on the industry. This is why a lot of developers are looking into co-development agreements, which is exactly what we have done with the government for our project in Sheikh Zayed. Land is becoming more and more scarce, and this means the price of land will keep increasing.

The best piece of business advice I’ve ever been given is simply to listen. You need to listen to the perspectives of anyone with a relevant viewpoint in any given situation — juniors, your sales and marketing teams, your boss, your customers — anyone whose opinion has a bearing on the issue. See the full picture and then make your decision.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.55 | Sell 16.67

EGP / USD at CIB: Buy 16.55 | Sell 16.65
EGP / USD at NBE: Buy 16.57 | Sell 16.67

EGX30 (Wednesday): 14,013 (-0.6%)
Turnover: EGP 537 mn (20% below the 90-day average)
EGX 30 year-to-date: +7.5%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session down 0.6%. CIB, the index heaviest constituent ended up 0.1%. EGX30’s top performing constituents were Sarwa Capital Holding up 2.6%, Oriental Weavers up 0.7%, and CIRA up 0.6%. Yesterday’s worst performing stocks were Ezz Steel down 5.8%, Egyptian Iron & Steel down 3.5% and Orascom Investment Holding down 3.2%. The market turnover was EGP 537 mn, and local investors were the sole net buyers.

Foreigners: Net Short | EGP -11.7 mn
Regional: Net Short | EGP -40.4 mn
Domestic: Net Long | EGP +52.0 mn

Retail: 57.2% of total trades | 65.8% of buyers | 48.6% of sellers
Institutions: 42.8% of total trades | 34.2% of buyers | 51.4% of sellers

WTI: USD 60.41 (-0.03%)
Brent: USD 67.01 (+4.44%)

Natural Gas (Nymex, futures prices) USD 2.45 MMBtu, (+0.20%, Aug 2019 contract)
Gold: USD 1,421.50 / troy ounce (+0.64%)

TASI: 8,905.57 (+0.58%) (YTD: +13.78%)
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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).

July: The National Railway Authority will launch a tender for the purchase of 100 new locomotives expected to be financed through an agreement with the European Bank for Reconstruction and Development (EBRD).

11 July (Thursday): Central Bank of Egypt’s Monetary Policy Committee will meet to review interest rates.

11 July (Thursday): The House of Representatives will end its current legislative session and adjourn for summer recess.

13-14 July (Saturday-Sunday): The Mediterranean Tourism Forum, Alexandria, Egypt.

14-18 July (Sunday-Thursday: The government is expected to announce the details of the new export subsidies framework.

17 July (Wednesday): Harvard Business School alumni reception and admissions presentation, Falak Startups-The Greek Campus, Cairo.

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

21 July (Sunday): Amer Group and Antaradous Touristic Development will face off in court over a 2014 dispute brought by the Syria-based company for a fallout in their partnership to develop the Porto Tartous tourist resort. The date was postponed from 23 June.

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

28 July-02 August (Sunday-Friday): Fab15 Conference and Graduation Ceremony, TU Berlin, El Gouna, Egypt.

29 July (Monday): An administrative court will look into charges brought by the Financial Regulatory Authority (FRA) against Raya Holding founder Medhat Khalil in connection to a mandatory tender offer forced on him by the FRA.

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

August: Meetings of the Egyptian-Belarussian Committee for trade, economic, scientific and technical cooperation, Minsk.

August: The National Railway Authority is expected to sign a 15-year maintenance agreement for 1,300 railcars it had agreed to purchase from Russia’s Transmashholding under a EGP 22 bn contract.

03-04 August (Saturday-Sunday): Fab15 Festival, Tours, and Conference Closing, Greek Campus, Cairo.

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.

28-30 August (Wednesday-Friday): Tokyo International Conference on African Development (TICAD), Yokohama, Japan.

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

September: Cairo will host an Egypt-Hungary business forum, according to a Trade Ministry statement (pdf)

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

03-04 September (Tuesday-Wednesday): Shared Services and Outsourcing Forum Middle East, Nile Ritz Carlton, 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.

15 September (Sunday): Elections to the board of the Financial Regulatory Authority’s Capital Markets Federation will be held, according to Al Mal.

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

18 September (Wednesday): E-Commerce Summit 2019, Nile Ritz Carlton, Cairo.

21 September (Saturday): Cairo’s streets get really, really crowded as students at the nation’s public schools go back to class.

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

October: A forum will be organized by Russia’s Rosatom and the Nuclear Power Plants Authority to introduce local suppliers and contractors to the Dabaa nuclear plant.

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.

24 October (Thursday): Russia-Africa Summit to take place in Sochi, co-chaired by Vladimir Putin and President Abdel Fattah El Sisi.

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.

31 October-2 November (Thursday-Saturday): Angel Oasis 2019, organized by the Middle East Angel Investment Network (MAIN), El Gouna, Egypt.

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.

November: Suez Canal Conference for Investment, organized in cooperation with the European Union

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.

25 January 2020 (Saturday): Midterm break for public schools and universities. Also known as: Two weeks of good commute.

8 February (Saturday): Midterm break ends. Traffic in Cairo stinks once more.

11-13 February 2020 (Tuesday-Thursday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

25-26 March (Wednesday-Thursday): Mega Projects Conference, Egypt International Exhibition Center, Nasr City, Cairo.

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