Monday, 5 August 2019

Cairo explosion leaves 19 dead.


What We’re Tracking Today

It’s PMI day: The Emirates NBD purchasing managers’ indexes for Egypt, the UAE, and Saudi Arabia are due out this morning at 6:15 am CLT. Non-oil business activity had remained in contraction territory in June, but the slowdown rate was softer than the month prior. You can find the PMI here when it’s released.

Also coming up this week:

  • Foreign reserves: The CBE is due to release Egypt’s net foreign reserve figures for July.
  • Inflation: Monthly inflation figures are due out from the CBE and Capmas. Inflation fell to a three-year low in June, coming in at 9.4%.

The subscription period for the retail component of e-payments platform Fawry’s IPO closes today. The company has set aside 35.4 mn shares for its Egyptian retail offering, which is so far around 7x oversubscribed, according to the local press. Fawry’s private placement, which closed last week, was nearly 16x oversubscribed. The company’s shares will debut on the EGX at EGP 6.46 per share on Thursday.

It’s official: Prime Minister Moustafa Madbouly will today oversee the official signing ceremony with Canada’s Bombardier to build the much anticipated monorails, Al Shorouk reported. The Transport Ministry yesterday signed an agreement with the Bombardier-led consortium to construct the monorails linking 6 October City to Giza and Nasr City to the new administrative capital. We have more on this in this morning’s Speed Round, below.

Is the US heading for a summer stock market correction? Escalating trade tensions, the heightened risk of a no-deal Brexit, and a hesitant US Federal Reserve could create a perfect storm resulting in a stock market correction in the coming weeks, analysts tell CNBC. US equities have turned a blind eye to rising global headwinds, soaring to record highs in recent weeks on hopes that the Fed was about to embark on an extended easing cycle. But Fed chair Jerome Powell’s unexpectedly hawkish comments last week and Trump’s trade war escalation have sent shockwaves through the markets. “The risks are significant,” Barry Knapp, managing partner at Ironsides Macroeconomics, said. “ I think we’ll get a correction… We could trade back to May lows.” Julian Emanuel, BTIG’s head of equity and derivative strategy, warns that there is unlikely to be any clarity on the main issues plaguing the market for weeks. “The real issue as to why there’s going to be a correction in our view is there’s a massive, massive vacuum… The issues are China, the issues are the Fed and the issues are Brexit. In the first two, you’re almost not going to hear anything.”

Morgan Stanley has changed its tune on EM debt: It was only last month that Morgan Stanley was telling us to get into EM bonds in the event of a market downturn. But after the Fed dashed its expectations for a more dovish turn, the bank has turned decidedly bearish on EM debt and is advising clients to reduce their exposure, Bloomberg reports. “The backdrop for EM has worsened in several ways in a short space of time,” bank analysts said in a note on Friday. “All this justifies a more cautious stance and will likely worsen an already weak global-growth backdrop.”

Affirma Capital has become an independent EM private equity firm after completing a USD 1 bn management buyout (MBO) from Standard Chartered Bank, it said in a statement (pdf). Intermediate Capital Group (ICG) purchased the majority of the bank’s PE assets through its ICG Strategic Equity, which will provide Affirma with USD 400 mn for new and follow-on investments. Affirma will manage Standard Chartered Private Equity’s USD 3.6 bn portfolio, which includes over 50 investments across China, India, South East Asia, South Korea, Sub-Saharan African and the Middle East. Affirma immediately announced a USD 50 bn investment in Indian nutraceutical company Tirupati Group following the completion of the MBO.

Ever wondered why the terms ‘bull market’ and ‘bear market’ are so widely used but often so difficult to define? This mini-crash course in financial history and language from the WSJ tells you where the terms came from and traces their use as widespread terminology. You might be surprised to know that they have actually been around since the 1850s, with financial optimists and pessimists first referred to as ‘bulls’ and ‘bears’ respectively in Britain in the early 18th century. But modern use of the terms (in which a bull market is commonly defined by a 20% rise from a market index’s most recent lowest point and a bear market by a 20% decline from its latest high) only became the accepted definitions in the 1980s and 90s.

Sudan generals, opposition sign constitutional agreement: Sudan’s military and civilian leaders yesterday put pen to paper and signed the constitutional declaration agreed on Saturday, the BBC reports. Protest leader Ahmed Rabie and Gen. Mohamed Hamdan “Hemeti” Daglo signed the agreement, which will set up a transitional governing council consisting of six civilians and five generals that will rule the country until elections are held in late-2022. A general will lead the council for the first 21 months before handing power to a civilian, who will rule for a further 18 months. The council will establish up a 300-member legislative body and a cabinet headed by a civilian prime minister.

Foreign Ministry welcomes declaration: The Foreign Ministry has welcomed the declaration, calling it an “important step on the right path towards achieving security and stability in the country” in a statement.

Another day, another tanker seized in the Gulf: Iranian state media announced yesterday that the Revolutionary Guards seized an Iraqi oil tanker said to have been smuggling fuel, Reuters reports. Seven crew members were detained when the vessel was detained near Iran’s Farsi island in the Arabian Gulf. This is the latest in a series of tense standoffs between Iran and its Gulf neighbours.

Enterprise+: Last Night’s Talk Shows

Egypt signed contracts with Canada’s Bombardier Transportation for planned monorail projects yesterday, Masaa DMC’s Eman El Hosary highlighted (watch, runtime: 02:53). A consortium made up of Bombardier, Orascom Construction and Arab Contractors will build, operate, maintain the new monorail lines for a 30-year period, El Hekaya’s Amr Adib noted (watch, runtime: 10:48). We have more on this in our Speed Round, below.

El Sisi urges gov’t to step up efforts to promote auto manufacturing: President Abdel Fattah El Sisi discussed with relevant officials yesterday the latest efforts to improve and restructure the country’s transportation system, Al Hayah Al Youm’s Khaled Abu Bakr said (watch, runtime: 02:42). The president also stressed the importance to shift focus from auto assembly to manufacturing, Abu Bakr cited the presidential spokesman as saying.

Out of mns of Kramers, we finally have one who owned up: Just when you start to think Mother Teresa was the last of the righteous, along comes the first-ever Egyptian to make an official request to the supply minister to be removed from the nation’s subsidy rolls on grounds that he is “unworthy,” advisor to the minister for information systems Amr Madkour told Al Youm’s Sara Hazem (watch runtime, 7:40). This came after Supply Minister Aly El Moselhy announced over the weekend that the government has started the fourth phase of the Great Subsidy Rolls Purge, which aim to remove another 400k Kramers from the subsidy program by outlining new eligibility criteria.

Speed Round

Speed Round is presented in association with

At least 19 killed, 30 injured in deadly Cairo explosion: Nineteen people were killed and 30 others injured, a few of whom are in critical condition, in an explosion near the National Cancer Institute in Cairo late on Sunday, the Health Ministry said early this morning. “Other bodies may be found … the search is ongoing,” Health Minister Hala Zayed told Extra News (watch, runtime: 03:44) earlier in the night. The explosion was a result of a three-car collision, the interior ministry said in a statement. The public prosecutor has ordered an investigation into the incident, AMAY noted.

The story is getting attention in the foreign press: Reuters, Deutsche Welle.

IPO WATCH- Giza Spinning and Weaving pushes IPO to Feb 2020: Privately-owned Giza Spinning & Weaving Company has pushed to February 2020 its sale of up to 40% of its shares on the EGX due to poor market conditions, Managing Director Fadel Marzouk told the local press. This is the second time the company has delayed the IPO, having announced in March this year that it was looking to list in 3Q2019. The company had initially planned to IPO last November, but news reports later put the listing date in December 2018. Proceeds from the garment exporter’s IPO will be used to finance an EGP 250 mn project to expand its yarn and garment production capacities.

Advisors: Beltone Financial is serving as global coordinator and bookrunner and Matouk Bassiouny is legal counsel to the issuer.

Our monorail dreams are a little bit closer: The Transport Ministry signed yesterday a contract with Canada’s Bombardier to build the monorails linking 6 October City to Giza and Nasr City to the new administrative capital, according to an Ittihadiya statement. The 30-year contract includes the construction, operation and maintenance of the lines. The Transport Ministry said in June it was in final talks with a consortium made up of Bombardier, Orascom Construction, and Arab Contractors for the project.

Background: The consortium was tapped as the tender’s preferred bidder in May, after languishing without a winning bidder and contracts signed for four years. The USD 1.3 bn project would entail a 54-km-long monorail system connecting Nasr City with the new administrative capital, and a 42 km line that would connect 6 October to Giza.

Egypt has the fastest-growing entrepreneurship ecosystem in the MENA region, according to a Magnitt report seen by Wamda. More access to finance and interest from global investors have been spurred by our recovering economy and decreasing inflation rate, as well as government initiatives supporting SMEs and startups. The number of venture capital (VC) firms, accelerators, and incubators keeps increasing, as do the number and quality of projects seeking their funding and support.

Opportunity and necessity are driving the boom: Greater awareness of entrepreneurship, through media coverage and dedicated education programs at public universities, has also contributed to a collective mindset shift. Around 76% of Egyptians surveyed in the 2017-18 Global Entrepreneurship Monitor (GEM) report (pdf) see entrepreneurship as a desirable career choice (compared to a global average of 61.6%), while 55.5% (double the global average)want to start their own businesses. Necessity-driven entrepreneurship is growing even more quickly than opportunity-driven entrepreneurship, as high rates of unemployment and a “lack of interesting jobs” are pushing more young people to start their own initiatives. A mentor at Fekretak Sherketak cites mass transportation app Swvl as an example of a homegrown Egyptian startup successfully addressing problems of overcrowding, congestion and poor infrastructure, adapting the model used by Uber and Careem to meet our particular market needs.

Though the environment is flourishing, it’s far from flawless. Egypt has the highest rate of business discontinuation among the 49 countries studied in the GEM report, standing at 10.2% in 2017 compared to 2.7% in 2010. For this to improve, investors need to better understand the unique nature of investing in startups, and that they often won’t see a rapid return on their investment, as it takes a long time for startups to become profitable, the report notes. There needs to be more access to capital and a friendlier regulatory environment so that entrepreneurs receive the support they need to learn from their experiences, build stronger businesses and drive the virtuous cycle of sector growth.

EXCLUSIVE- Egypt to tap Arab banks for planned USD 1 bn sukuk issuance: The government will not approach international banks to manage a planned USD 1 bn sovereign sukuk issuance later this fiscal year, preferring instead to only work with Arab banks, government sources told Enterprise. “We've already begun talks with a number of banks that have contacted us to learn about Egypt’s plan to issue sovereign sukuks and they’re all Arab with experience,” one of the sources told us without disclosing any names. A senior government official told us in May that the government is hoping to appoint banks by September in order for the issuance to take place in early 2020. A ministerial committee is currently reviewing the legislative procedures, which must be in place before the issuance can proceed.

Background: The sovereign sukuk issuance was initially planned to take place last fiscal year, but Finance Minister Mohamed Maait said earlier this year that the government needed more time to comply with Euroclear requirements. We learned in May that Egypt could take to market its maiden issuance of sovereign sukuks in early 2020 with both medium and long-term maturities. Finance Ministry officials had met with executives from Abu Dhabi Islamic Bank and other GCC-based institutions to learn more about the process and the target markets. The Financial Regulatory Authority published last week a guide (pdf) on the rules and regulations of issuing sukuks.

STARTUP WATCH- Fintech startup MoneyFellows has raised over USD 1 mn in pre-series A funding from 500 Startups and Dubai Angel Investors — both of which invested in its seed round last year, the startup told Menabytes. Lebanon’s Phoenician Fund and several individual investors also participated in the funding round. MoneyFellows plans to use these funds to scale its user base, and intends to raise USD 3 mn in series A funding by the end of this year, before expanding in MENA in 2020 and establishing a presence in other countries in Africa in 2021.

How does the model work? MoneyFellows is working to digitize “money circles” (known in the region as a gam’eya), using a scoring model. The setup, which is commonly used in the region, sees a group of people commit to paying an installment into a pool every month, with a different member taking the whole pool as a payout each month. Through MoneyFellows, users set up profiles with documents showing their income and personal details, which determines their score, and are then used to calculate their credit assessment. The user is then shown different circles, applicable to their credit assessment, and can then select a circle, a preferred slot, mode of payment and payout.

Housing Ministry’s water conservation plan eyes new desalination and treatment plants, efficient resource use: The Housing Ministry has unveiled an ambitious water conservation plan that would see new desalination plants and new and upgraded wastewater treatment facilities. Thorough details of the plan — which is primarily focused on drinking water — were picked up yesterday by Youm7.

Desalination: The plan involves setting up some 39 desalination plants across the coast at a cost of EGP 29.3 bn, and with a capacity of 1.4 mn cubic meters (cbm) of water per day. The projects are underway in Matrouh, the Red Sea, North and South Sinai, Port Said, Dakahlia, and Kafr El Sheikh. Of the 39 plants, 16 are being fast-tracked and are due for inauguration in 2020.

Wastewater treatment: The government has completed 26 of a total of 52 sewage treatment plants being developed in Upper Egypt, and the remaining 26 are due for completion by the end of the year. The plants will have a combined capacity of 418 mn cbm per year and serve 8 mn people. They are estimated to cost EGP 8.1 bn, Housing Minister Assem El Gazar said in March. Last December, the World Bank said in its Egypt infrastructure report that water needs USD 45 bn in groundwork above current baseline projections. Some USD 14 bn will need to be invested in wastewater treatment facilities, according the the bank.

Controlling water waste: The final part of the ministry’s plan involves minimizing wastage in drinking water through encouraging consumers to install water saving devices, setting up district metered area (DMA) to quantify and control waste, working toward wider metering coverage, and launching a national awareness campaign.

Using treated wastewater to grow “economically useful” plants: The ministry is working with private sector players to set up wastewater-irrigated plantations specialized in cash crops. One example is a project to harvest hardwood in partnership with Egypt Kuwait Holding (EKH), which is planned to be up and running in the near period. The hardwood plantations will span two 3k-feddan land plots in New Beni Suef and Sadat City, 6k feddans in New Minya, and 1k feddans in Samalout. The government has already signed a contract to set up a compressed wood factory with a capacity of 300k cbm a year to process the harvest. The factory is expected to be up and running by 2020. Although there was no explicit link or mention, the plantations and facility seem to be part of the project to invest in wood production announced by EKH in a bourse filing late last year.

Irrigation Minister Mohamed Abdel Atti announced earlier this year a parallel USD 50 bn strategy to combat water scarcity through 2037 by encouraging the use of modern irrigation methods, cultivation of fewer water-intensive crops and establishment of desalination plants.

The plan could heavily impact how we use water in Egypt: News of the plan came a week after the Irrigation Ministry said that it expects Egypt’s share of the Nile to fall by 5 bn cbm by the end of 2019.The ministry called for a nationwide state of emergency as a result of this prediction, which is being driven by decreasing rainfall in the Ethiopian highlands. Egypt may also be in for a more acute water shortage when Ethiopia’s Renaissance Dam is up and running in the near future.

INVESTMENT WATCH- EMPC expands Al Hokair Group’s rights in developing Magic Land: The Egyptian Media Production City’s (EMPC) board approved expanding its agreement with Al Hokair Group to redevelop and manage Magic Land under a license, EMPC said in a bourse filing (pdf). Under the new contract, Al Hokair will invest USD 55.9 mn instead of USD 30 mn over a bigger land area of 281.5 sqm. Al Hokair will pay EGP 22.3 mn per year for the rights, and redevelop the park under a build-operate-transfer framework.

EMPC opens foreign media center: EMPC yesterday opened a new center in downtown Cairo for foreign media, Ahram Online reports. The five-floored building provides direct connection to satellites and is equipped with cameras, while other production facilities are available at three affiliated studios in Agouza, Garden City and Maspero.

DISPUTE WATCH- Gov’t gets backing on decision for import duty on iron billets: The Board of State Commissioners (BSC) has backed a Trade Ministry decision to impose 15% import duty on iron billets, AMAY reported. The BSC said in its recommendation report that there wasn’t sufficient evidence to prove the ministry has used its authority to harm iron factories, but instead made the decision to protect local investments and ensure fair trade. The Supreme Administrative Court will discuss the BSC’s recommendation report, which is non-binding, on 17 August.

Background: The ministry imposed the 15% levy, together with a 25% import fee on steel rebar, in mid-April for a period of 180 days. The administrative court had rejected appeals to bring back the ministry’s decision after 21 iron factories won a case at the court reversing it. The factories had said the increased price of iron forced them to stop production.

EARNINGS WATCH- Sarwa Capital profits rise 24% in 1H2019: Sarwa Capital posted a net profit of EGP 183 mn in 1H2019, a 24% increase from EGP 148 mn during the same period last year, the company said in a statement (pdf). “We are pleased to announce our interim results for the first half of 2019, a period marked by a number of key milestones and developments for the business. During the second quarter, we launched our insurance businesses, began factoring services, expanded our commercial vehicle financing operation, engaged in a number of important partnerships, and received the first sukuk issuer license in the market,” the company said.

MOVES- The Cairo Chamber of Commerce (CCC) has appointed Ibrahim El Araby as its new president and Aly Shokry and Sameh Zaki as his deputies, it said on its website. The CCC also appointed Salah El Abd as general secretary of the trustee, Sayed El Nawawi as his assistant and Ashraf El Shemy as general secretary.

Negm gets another year as Customs Authority boss: The Finance Ministry has extended Kamal Negm’s appointment as the head of the Customs Authority for a year starting 7 August, Masrawy reported. Negm was first hired for the position in August last year.


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Egypt in the News

It’s another quiet morning for Egypt in the foreign press: The former CEO of the Nigerian Electricity Regulatory Commission is holding Egypt up as a role model for how to develop the country’s power sector. In an interview with Nigerian media, Sam Amadi says Nigeria should learn lessons from Egypt when it comes to project management and privatization.

Worth Reading

Does Abraaj’s collapse signal the end of regional private equity? The “spectacular” collapse of Abraaj, seen for years as the standard-bearer for EM private equity, has left a “nuclear wasteland” in its wake, destroying investor confidence in the market and tarnishing Dubai’s reputation, Matthew Martin and Nicholas Parasie argue in Bloomberg. The Dubai Financial Services Authority (DFSA) recently issued a hefty USD 315 mn fine for “serious wrongdoing” and misuse of investor funds, but this may do little to alleviate investor concerns in the long term.

Even before Abraaj went under, private equity in the MENA region was flagging. A 2018 analysis identified a notable decrease in active and sustainable PE funds in the region, starting as early as 2008. Liquidity is proving to be a long-term challenge, affected by a lack of institutional investment and the broader economic environment. But a series of obstacles, including declining oil prices, political turbulence amongst GCC countries, rising interest rates and tough global macroeconomic conditions, have all impacted the sector in recent years. Preqin data shows that eight PE funds with exposure to MENA closed last year with USD 406 mn in aggregate capital raised, down 65% from USD 1.168 bn raised in 2017 and USD 14.283 bn in 2015.

Under-regulation or a lack of due diligence to blame? The Abraaj collapse is increasingly being presented as a cautionary tale of the need for rigorous checks and balances, both from regulators and from investors themselves. The DFSA has been accused of being slow to respond to allegations of wrongdoing, and investors have become hesitant to put money into funds for fear of flaws in the regulatory environment. But investors who jumped onto the Abraaj bandwagon without asking questions also played their part. The Abraaj case “should be seen more as a message about due diligence lapses by investors,” says Sabah al Binali, CEO of Universal Strategy. A Turkey-based PE manager concurs, saying “it was lazy investors who created this monster.”

Worth Watching

Why is the US suddenly seeing an influx of ‘Made in Vietnam’ goods? They’re not always Vietnamese. Vietnamese tech exports to the US increased by over 70% between May 2018 and May 2019, but many of these goods actually came from China, the Wall Street Journal says (watch, runtime: 04:27). As businesses struggle with the fallout of the US-China trade dispute, an increasing number are resorting to a process called transshipment to bypass hefty tariffs on Chinese exports. This involves moving goods — including electronics, steel and furniture — from China to countries such as Vietnam, Malaysia and Thailand, swapping the “country of origin” label, and then shipping the products to the US.

Uh, isn’t that illegal? In some cases, the companies make minimal concessions to legality by making small changes to the goods (wrapping Chinese steel in a protective zinc layer in Vietnam, for instance) or gathering the components of an electronic device domestically and then outsourcing its assembly. But what they are doing is essentially illegal, and carries increasingly hefty penalties, including fines and even jail time.

Diplomacy + Foreign Trade

Egypt and USAID signed four assistance agreements yesterday worth a combined USD 59 mn, the US embassy said in a statement. The agreements provide support to Egypt on issues including voluntary family planning, increasing the capacity of higher education institutions, promoting inclusiveness and sustainability for micro, small, and medium-sized enterprises, and continuing to support joint research for Egyptian and US scientists. The agreements come after a new USAID-funded service and training center to provide water and sanitation services to over 650k households was established in Assiut.

Shoukry attends talks with Iraqi, Jordanian foreign ministers in Baghdad: Foreign Minister Sameh Shoukry stressed Egypt’s commitment to stability in Iraq during a visit to Baghdad for talks with the Iraqi and Jordanian foreign ministers, a ministry statement said. A statement from the Iraqi Foreign Ministry mentioned that the officials discussed reconstruction efforts in Iraq, increasing trade and investment between the three countries, and defeating the remnants of Daesh. Shoukry also sat with Iraqi President Barham Salih, Prime Minister Adil Abdul-Mahdi and Parliament Speaker Mohamed al-Halbousi.

El Sisi and Macron discuss Libya: President Abdel Fattah El Sisi voiced opposition to foreign interference in Libya during a phone call with French president Emmanuel Macron yesterday, according to an Ittihadiya statement. The two sides stressed the importance of stability in Libya for the whole region and discussed other issues of mutual interest.

Exports of readymade garments exports rose 4.4% y-o-y in 1H2019, according to a Readymade Garments Export Council report (pdf). Exports during the first six months of the year amounted to USD 802 mn, compared to USD 768 mn a year earlier. Exports to the US rose by 19% y-o-y to USD 450 mn, while exports to Arab countries rose 24% y-o-y to USD 40 mn.


Ib Vogt begins commercial operation of three solar plants at Benban

German solar project development company Ib Vogt has begun commercial operation of three solar power plants with a combined capacity of 166.5 MW at the Benban solar complex near Aswan, the company announced in a statement. The plants were awarded under the second round of the feed-in tariff (FiT) program, and will produce over 400k MWh of electricity each year. This is in addition to the company’s 64.1 MW project it launched with Infinity Solar in March 2018.


Airports company gets two Japanese bids to build new terminal in Borg El Arab

The Egyptian Holding Company for Airports and Air Navigation (EHCAAN) received two bids from Japanese companies to build the planned new terminal at Borg El Arab Stadium near Alexandria, Chairman Ahmed Genena said, according to Al Shorouk. The winning bid will be chosen in a month. The new terminal will span 34k sqm and will raise the airport’s capacity to about 6 mn passengers annually.

Basic Materials + Commodities

Egypt’s Domty signs agreement with America’s AMF for EGP 500 mn bakery line

The Arabian Food Industries Company (Domty) signed an agreement last week with US bakery equipment manufacturer AMF Bakery Systems to purchase and install a third EGP 50 mn bakery line, the cheesemaker said in a bourse disclosure (pdf). The new line, which is expected to come online in February 2020, will add a daily capacity of 270k units of Domty’s “sandwiches.” The company is planning to finance the expansion through a medium tenor USD-denominated loan covering the USD c.80% portion of the cost and in-house funds covering the EGP c.20% remaining portion, Domty said in a separate release (pdf).

Health + Education

CHG shareholders approve establishing JV to develop Nahda hospital

Cleopatra Hospitals Group’s (CHG) shareholders approved an agreement with Al Taaleem Management Services to set up a joint venture that will rebuild, develop, operate, and manage Al Nahda Hospital, the company said in a bourse filing (pdf). The JV will be 90% owned by CHG, with the remaining 10% held by Al Taaleem, the owner and operator Nahda University in Beni Suef.

Real Estate + Housing

Tatweer Misr says North Coast’s Fouka Bay investments worth EGP 4 bn

Tatweer Misr is investing an estimated EGP 4 bn in its Fouka Bay project on the North Coast, excluding land value and marketing expenses, CEO Ahmed Shalaby told Reuters Arabic. Shalaby did not disclose when the development would be complete. The company is considering investing outside Egypt in 2023, and is interested in Rwanda, Morocco, Saudi Arabia, Portugal, and Greece.


Two Cairo hotels mentioned in Travel and Leisure’s best MENA hotels list

Four Seasons Hotel Cairo and Cairo Marriott Hotel both made it onto Travel and Leisure’s list of “The 10 Best City Hotels in North Africa and the Middle East,” coming in at #5 and #10 respectively. Royal Mansour in Marrakech came first and Jumerirah in the UAE came second.

Banking + Finance

Six Egyptian banks begin disbursing EGP 3.1 bn loan to Samcrete

Six local banks — the National Bank of Egypt, Banque Misr, Banque du Caire, SAIB Bank, Suez Canal Bank, and the Export Development Bank of Egypt — have begun disbursing a EGP 3.1 bn loan to Samcrete for its work in a residential district in the new administrative capital, Al Shorouk reports.

Other Business News of Note

Beltone Financial shareholders approve capital increase to EGP 898.4 mn

Beltone Financial shareholders have approved a capital increase to EGP 898.4 mn from EGP 338 mn, the company said in an EGX disclosure (pdf).

Egypt Politics + Economics

Court freezes assets of 83 defendants accused of plotting to bring down gov’t

A Cairo criminal court upheld on Sunday a ruling by the state security prosecution to freeze the assets of 83 defendants who are accused of conspiring with the Ikhwan to bring down the government on the anniversary of 30 June, MENA reported. The court also banned them from travel and ordered the confiscation of the assets of 19 related companies. Multiples Group Chairman Omar El Shenety, former politician and revolutionary figure Zyad Elelaimy, journalists Hossam Monis and Hisham Fouad as well as former presidential candidate Ayman Nour are among those who were arrested in June.

On Your Way Out

Egypt’s first no-gluten bakery has opened in Zeitoun, with founder Hamdy Mohamed Hussein saying that he decided to sell no-gluten products when he saw people suffering from coeliac disease and the lack of awareness about gluten intolerance, Africa News reports. Hussein hopes that his bakery, “Chef Hamdy,” will help to raise awareness of the condition and offer choices to people looking for no-gluten products.

King Tut’s coffin needs eight months of restoration work: The Antiquities Ministry has handed over Tutankhamun’s gold-plated sarcophagus to a team at the Grand Egyptian Museum (GEM) for a restoration process that could take up to eight months, early restoration manager at the museum Eissa Zidan said at a press conference, according to Al Mal. The coffin was recently relocated from Tut’s tomb to the GEM, where it will be displayed alongside around 5,000 items belonging to the boy pharaoh. The Associated Press also has the story.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.49 | Sell 16.59
Buy 16.48 | Sell 16.58
EGP / USD at NBE: Buy 16.51 | Sell 16.61

EGX30 (Sunday): 13,616 (+0.7%)
Turnover: EGP 445 mn (23% below the 90-day average)
EGX 30 year-to-date: +4.5%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session up 0.7%. CIB, the index heaviest constituent ended up 1.3%. EGX30’s top performing constituents were Egyptian Resorts up 5.8%, Orascom Development up 5.5%, and Abu Dhabi Islamic Bank 4.3%. Yesterday’s worst performing stocks were Qalaa Holdings down 8%, Ibnsina Pharma down 2.0% and CIRA down 2.0%. The market turnover was EGP 445 mn, and foreign investors were the sole net buyers.

Foreigners: Net long | EGP +43.9 mn
Regional: Net short | EGP -15.2 mn
Domestic: Net short | EGP -28.7 mn

Retail: 62.4% of total trades | 57.7% of buyers | 67.0% of sellers
Institutions: 37.6% of total trades | 42.3% of buyers | 33.0% of sellers

WTI: USD 55.41 (-0.45%)
Brent: USD 61.38 (-0.82%)

Natural Gas (Nymex, futures prices) USD 2.09 MMBtu, (-1.46%, September 2019 contract)
Gold: USD 1,455.70 / troy ounce (-0.12%)

TASI: 8,557.09 (-1.26%) (YTD: +9.33%)
ADX: 5,179.93 (-0.96%) (YTD: +5.39%)
DFM: 2,857.91 (-1.46%) (YTD: +12.97%)
KSE Premier Market: 6,726.45 (-0.4%)
QE: 10,356.07 (-0.40%) (YTD: +0.55%)
MSM: 3,780.31 (+0.09%) (YTD: -12.57%)
BB: 1,548.66 (-0.06%) (YTD: +15.81%)

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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.

5 August (Monday): Egypt’s Emirates NBD PMI for July released.

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

17 August (Saturday): The High Administrative Court will hear appeals filed by the State Lawsuits Authority and a number of iron and steel companies to bring back the Trade Ministry decision to impose 15% import duty on iron billets. The hearing was postponed from 4 August.

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

25-27 August (Sunday-Tuesday): G7 Summit, Biarritz, France.

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.

3-4 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.

9-10 September (Monday-Tuesday): The Euromoney Egypt Conference 2019, Cairo.

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.

22 September (Sunday): The Justice Ministry’s dispute resolution committee will look into a case filed by Raya Holding’s Chairman Medhat Khalil against the Financial Regulatory Authority (FRA).

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.

7-9 November (Thursday-Saturday): Vested Summit, Sahl Hasheesh, Red Sea.

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.

January 2020: 2019 Confederation of African Football (CAF) Awards, Albatros Citadel Resort, Hurghada, Egypt.

January 2020: UK-Africa Investment summit, London, United Kingdom.

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 2020 (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 2020 (Wednesday-Thursday): Mega Projects Conference, Egypt International Exhibition Center, Nasr City, Cairo.

5-7 May 2020 (Tuesday-Thursday): AFSIC – Investing in Africa, London, United Kingdom.

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