Tuesday, 6 August 2019

Interior Ministry pronounces Cairo car explosion a terror incident. Plus: Non-oil business activity expands in July.

TL;DR

What We’re Tracking Today

The Central Bank of Egypt has finally received the final USD 2 bn tranche of the IMF’s USD 12 bn extended fund facility, Finance Minister Mohamed Maait told Youm7. The IMF’s Executive Board agreed to disburse the tranche in July after a staff-level agreement was reached in May.

We’re still not totally sure what kind of post-program arrangement the government is pursuing with the IMF: Maait mentioned in June that the ministry is in talks with the fund over a possible two-year, non-loan program, but other than that we remain none the wiser about how the government intends to continue with economic reform.

The CBE and Capmas are due to release July’s inflation figures sometime this week. Inflation unexpectedly plummeted almost five percentage points to 9.4% in June — the first time Egypt has seen single digit inflation since March 2016.

CI Capital sees inflation dipping below 10%: An “unprecedented oversupply” of several products in the market, particularly fruits and vegetables, should keep July’s inflation in check, CI Capital wrote in a research note yesterday. The most recent fuel price hike, “which came in at 24% this year vs. 50% in 2018,” coupled with the continued appreciation of the EGP and other factors, “continue to give us high conviction of our forecast that headline inflation should come below the 10% mark for July which we expect to be released in the coming days.”

Lower inflation could give the CBE room for two rate cuts: The investment bank sees the CBE’s Monetary Policy Committee cutting interest rates by 100 bps at each of its next two meetings, which it says are “the two safe windows” for the CBE to begin its monetary easing “and assess the impact of the cuts on the economy.”

Also coming up this week: The CBE is due to release Egypt’s net foreign reserve figures for July.

China devalues the yuan, fires opening shot in currency war: China launched a sharp devaluation of its currency yesterday after the central bank allowed it to trade below 7 against the USD for the first time in 11 years, Bloomberg reports. The offshore CNH fell 1.9% to hit a record 7.08/USD, while the onshore CNY sank 1.3% to reach 7.03/USD — lows not seen since the 2008 financial crisis.

China insists it’s playing fair: The drop came after the People’s Bank of China (PBOC) cut its daily reference rate below 6.9 for the first time in eight months. Bank governor Yi Gang insisted that it had not strategically devalued the currency. “This fluctuation is driven and determined by the market,” CNBC quoted him as saying.

Analysts aren’t buying it: “On a scale of 1-10, it’s an 11,” Cowen analyst Chris Krueger said of China’s “massive” retaliatory measures. Meanwhile, Hong Kong-based analyst Andrew Collier framed the devaluation in militaristic terms. “If the currency does stay below 7 for another day, that is a sign that Beijing has ‘weaponized’ the RMB as a tool to improve exports during the trade war,” he told the New York Times.

A one-two punch: Chinese media reported yesterday that domestic companies had halted purchases of US farm products. Beijing is also considering introducing further tariffs on US agricultural imports.

All eyes on Trump’s Twitter feed: The question of whether this situation escalates into a full-blown currency war all depends on Trump’s reaction. And reading into a bullish late-afternoon Tweetstorm yesterday, a USD intervention may well be an option on the table. “China has always used currency manipulation to steal our businesses and factories, hurt our jobs, depress our workers’ wages and harm our farmers’ prices. Not anymore!” he wrote.

It’s a sea of red in the global markets: Markets once again suffered heavy losses yesterday after the RMB devaluation increased fears of a rapidly escalating trade conflict. US equities lost more than USD 700 bn, as the S&P 500 suffered its worst day of trading in 2019. Investors piled into safe haven assets, causing the yield on US 10-year Treasuries to fall 13 bps to 1.714% and 10-year German bund yields to plumb new depths of -0.52%. Asian indices were all heavily in the red early this morning. (Bloomberg | AP)

The Wall Street Journal is probably regretting publishing this: Emerging markets saw the biggest daily losses of 2019 on Friday as investors fled fixed-income assets and equities in the face of rising trade tensions. Data from the Institute of International Finance seen by Reuters shows that USD 2.33 bn was pulled from EM assets as investors reacted to Trump’s China tariff announcement.

And Citi is telling people to get out of EMs: Citi’s head of CEEMEA strategy, Luis Costa, is recommending that investors short high-yielding EM assets in response to the RMB devaluation, Reuters says.


Abu Dhabi Financial Group and Dubai-listed Shuaa Capital have finalized their merger after receiving the necessary regulatory approvals, according to a joint statement (pdf). The merger created an entity with some USD 12.8 bn in combined assets under management, and saw the “admission of 1.47 bn new shares on the Dubai Financial Market in favour of ADFG’s parent company and strategic investor in Shuaa, Abu Dhabi Capital Management LLC.”

HSBC ousts CEO, announces 4,000 job cuts: HSBC’s board has fired CEO John Flint after just 18 months in the job over concerns that cost-cutting strategies were not being implemented quickly enough. The board is keen to reduce its salary costs in response to the slowing global economy, but reportedly became frustrated with the lack of action during Flint’s tenure. The bank immediately announced plans to cut more than 4,000 jobs — including many senior positions — following his dismissal. The FT and Bloomberg have more.

Strikes, protests paralyse Hong Kong: Protesters brought much of Hong Kong to a standstill yesterday after calls for a general strike led to the cancellation of more than 200 flights and the suspension of train services. Riot police fought pitched battles with demonstrators, who blocked roads and attempted to set a police station on fire. Embattled Hong Kong leader Carrie Lam said that the territory was “on the verge of a very dangerous situation.” Protests have been ongoing since 9 June after the government proposed legislation that would have enabled citizens to be extradited to China to face trial. The BBC has more.

The US is reeling from the two mass shootings in El Paso and Ohio, which were the 21st and 22nd such shootings this year. The shootings killed a total of 29 and injured about 50 people, the AP reports.

Enterprise+: Last Night’s Talk Shows

Sunday’s deadly terrorist attack in Cairo, which claimed the life of at least 20 people and injured almost 50 others, dominated talk shows last night. We have chapter and verse in this morning’s Speed Round, below.

A donation campaign launched by El Hekaya channel to contribute to the restoration of the National Cancer Institute, which was heavily damaged by the attack, has so far collected EGP 72 mn (watch, runtime: 02:07). Amr Adib said UAE’s Mohammed bin Zayed alone donated a staggering EGP 50 mn to the campaign (watch, runtime: 05:20).

President Abdel Fattah El Sisi received Sultan of Brunei Hassanal Bolkiah in Cairo yesterday for talks on strengthening economic, cultural and tourism ties (watch, runtime: 05:24).

The official signing of an agreement between a Bombardier-led consortium and Egypt for two USD 4.5 bn-worth monorails also earned some airtime with Al Hayah’s Khaled Abu Bakr (watch, runtime: 01:51). We have the deets on this agreement in our Speed Round, below.

Speed Round

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Cairo explosion caused by terrorist car bomb -Interior Ministry: Sunday’s deadly explosion outside the National Cancer Institute in Downtown Cairo has been designated a terrorist-related event by the Interior Ministry. The incident occurred after a car full of explosives collided with three vehicles outside the hospital, the ministry said. The Health Ministry originally treated the event as an accident before investigators found evidence of explosives in the wreckage. No group has yet claimed responsibility for the explosion.

Death toll rises: Twenty people have now been pronounced dead and 47 are injured, making the incident the deadliest terrorist-related event in Cairo in more than two years.

Fingers are pointing at Hasm: The Interior Ministry accused Islamic militant group Hasm of transporting the explosives in a stolen car for use in a planned terrorist attack. The statement did not say what the group was intending to target. Hasm has been behind a number of attacks and assassination attempts in Cairo since it formed in 2016. The group denied the allegations.

El Sisi sends condolences, condemns “brutal terrorism”: “I extend my deepest condolences to the Egyptian people and the families of the martyrs killed in the cowardly terrorist incident in the vicinity of the Qasr El Aini area,” President Abdel Fattah El Sisi wrote on Twitter on Monday morning. “I assure you that the Egyptian state is determined to confront the brutal terrorism and eradicate it from its roots.”

Health Ministry to repair the hospital: The Health Ministry said in a statement that it will cover the costs of restoring the hospital. The building was heavily damaged by the explosion, and 78 patients have been transferred to other hospitals for treatment, the BBC reported ministry spokesman Khaled Megahed as saying. UAE Crown Prince Mohamed bin Zayed has donated EGP 50 mn towards repairing the building as part of a campaign organized by TV host Amr Adib that has so far collected EGP 72 mn in donations (watch, runtime: 5:20).

Gov’t compensation: The Social Solidarity Ministry is disbursing EGP 100k in compensation to the families of victims and the same amount to fully paralysed individuals and EGP 50k to whoever requires costly medical care, it said in a statement. The ministry will also disburse EGP 5k to wounded individuals who’ve had to stay at the hospital for 72 hours.

International response: The US embassy condemned the “tragic terrorist killing” and extended condolences to the victims in a statement, while an EU spokesman said that the bloc “stands side-by-side with Egypt in its efforts to defeat terrorism.” Regionally, Jordan’s King Abdullah and the Saudi Foreign Ministry have expressed solidarity with Egypt.

The story is featuring heavily in the foreign press this morning: Reuters | Bloomberg | WSJ | AP | BBC | NYT | VOA.

Non-oil business activity grows in July after two months of contraction: A slight growth in output and new orders in July brought non-oil business activity back to expansion territory after two months of contraction,according to the Markit / Emirates NBD purchasing managers' index (PMI) gauge (pdf). July’s PMI hit 50.3, rising from June’s 49.2 reading. A reading above 50.0 indicates that activity is expanding, while a reading below that mark means it is contracting.

Export orders posted their strongest growth in 20 months: Total new business from abroad rose for the first time since August, with clients from the Middle East, Africa and Europe placing greater numbers of new orders at “the sharpest pace” in a year and a half. “The rise in demand came from a number of countries, signalling that Egyptian businesses are growing in their competitiveness on trade,” said David Owens, economist at IHS Markit.

Companies boosted output amid higher orders at the start of the third quarter, driving increased activity.“Panellists often noted increased market activity and the introduction of new export contracts as reasons for stronger sales,” the release says. Firms also concurrently stepped up purchasing activity, creating “the most marked” increase in six month, amid more output requirements and fears over future input prices.

Employment continued to decline in July, but only witnessed a marginal fall similar to the previous month. A rise in retirement and voluntary leave offset new hires to meet higher sales volume. Staff costs increased at the fastest pace in six months.

Input cost inflation jumped at the highest rate in three quarters,largely as a result of the recent fuel subsidy cuts, which were in part passed onto consumers. “It is likely that the impact on costs will be temporary, with the rate of inflation possibly returning to its relatively low level seen during the first half of 2019,” Owens said.

Outlook: Sentiment around future output improved from June’s five-month low, as more businesses reported a positive outlook on hopes of higher market activity and a fall in the value of the USD. That said, rising fuel costs weighed slightly on the overall level of optimism.

IPO WATCH- Fawry’s retail offering oversubscribed 30x: E-payments platform Fawry successfully completed the book-building process for its initial public offering, with the retail offering closing yesterday around 30x oversubscribed, the local press reported. The retail tranche covered 5% of the company’s shares. The company also sold 21.2% to strategic investors as part of a pre-agreed transaction: state-owned banks Banque Misr and the National Bank of Egypt were both offered 7% stakes, while EM PE giant Actis was offered 7.2%. The remaining 9.8% was allocated in a private placement to institutional investors, which closed 15.9x oversubscribed earlier this week. Shares are expected to begin trading on Thursday at EGP 6.46.

Investors attracted by strong growth prospects: “The subscriptions for both the public and private offerings for Fawry were large and strong because the industry itself is new to the market and has greater than average growth,” Radwa El Swaify, head of research at Pharos, told Reuters. “The view of investors this time around is towards the long-term payoff and not the short-term.”

Advisors: EFG Hermes is global coordinator and bookrunner. Zulficar & Partners is serving as the offering’s local counsel, while Zaki Hashem & Partners is local counsel to the issuer.

Background: Fawry is selling 36% of its shares in Egypt’s first IPO since last October, when Sarwa Capital went public amid the EM sell-off. The company’s debut on the EGX this week is largely seen as a litmus test for an otherwise anemic IPO market that has seen several companies put off their plans to go public. The IPO could set the tone for the market ahead of other planned offerings, including those in the state privatization program.

IPO WATCH- EBRD could snag 20% of shares offered in ACCH stake sale: The European Bank for Reconstruction and Development (EBRD) is considering purchasing around a fifth of the shares that will be offered in the secondary stake sale of Alexandria Container and Cargo Handling (ACCH), deputy head of EBRD’s Egypt office Khalid Hamza told Al Mal. The bank is waiting on central management’s approval and for the offering’s details to decide on the exact size of their investment in the stake sale.

Background: EBRD has previously expressed interest in participating in ACCH share sale, which will reportedly see the government offer 20% of the company’s shares at EGP 15.6 apiece as part of its privatization program. Sources said that 15% of the company’s shares will be allocated to institutional investors in a secondary offering and the remaining 5% will be offered publicly on the EGX. EFG Hermes and Citi, who are advising for ACCH, concluded roadshows in London and Dubai last month and will soon visit the US.

Orascom’s long awaited USD 4.5 bn monorail agreement finalized: A consortium of Bombardier Transportation, Orascom Construction and Arab Contractors signed yesterday a contract with the National Authority for Tunnels in Cairo worth more than USD 4.5 bn to work on two planned monorail lines, Orascom Construction said in an EGX disclosure (pdf). The consortium will design, build, supply and operate the lines, which will link 6 October City to Giza and Nasr City to the new administrative capital. “We are very pleased to collaborate with our international partner Bombardier and our local partner Arab Contractors on this project, which highlights our strength in the transportation sector and emphasizes our position as the partner of choice for international contractors in Egypt particularly on challenging projects,” said Orascom Construction CEO Osama Bishai. The consortium was tapped as the tender’s preferred bidder in May, after languishing without a winning bidder and contracts signed for four years.

Consortium has the keys to the project for 30 years after construction: Orascom’s statement fleshes out the details of the contract, which was announced in an Ittihadiya statement yesterday but was scant on details. The consortium will be responsible for the operation and maintenance of both lines for 30 years, and will design, build all infrastructure and civil works, including stations, guideway structures and new depot buildings. Bombardier owns close to USD 2.85 bn of the project while Orascom Construction close to USD 900 mn. Reuters also picked up the story.

CBE to launch interest rate swaps between banks in October: The Central Bank of Egypt (CBE) is planning to introduce a new mechanism allowing banks to set up overnight indexed swap (OIS) agreements after launching the new no-risk Cairo Overnight Interbank Average (CONIA) in October, CBE Sub Governor Rami Aboul Naga said at a presser yesterday, according to Al Mal. The bank is still waiting for market participants to adjust to the newly-introduced CONIA, which is a fluctuating rate calculated daily as the weighted average rate of unsecured overnight EGP transactions, Aboul Naga said.

What are OIS agreements? Arrangements in which a bank (call it Bank A) is paying interest on a loan based on the benchmark CONIA, and another bank (Bank B) has a separate loan with interest based on a fixed, short-term rate. Under an OIS, the two banks can essentially exchange their interest rate formulas for a specific time period. The banks continue making interest payments as usual, and at the end of the agreed-upon period, whichever bank ends up paying less interest will make up the difference to the other. The agreement would only be feasible if the banks both want the opposite interest payment structure and are unable (or unwilling) to get a new loan or renegotiate the terms of their loans. OIS agreements will come as part of a wider range of new financial instruments planned for the market on the back of the introduction of the benchmark CONIA.

CONIA-based European loans also on the way: “The EBRD is willing to begin offering loans to the Egyptian market on which interest payments will be calculated using the CONIA,” CBE Sub Governor Zakeya Ibrahim also said during the press conference, according to Al Mal. Discussions were held following the launch of the CONIA to begin allowing local banks to offer other CONIA-based banking products, but this requires more awareness within the banking sector of CONIA and method used to determine its daily value, Ibrahim added.

Interest rate benchmark CONIA was launched on Thursday by the Egyptian Money Market Contact Group (MMCG), which brings together the central bank, commercial banks and the European Bank for Reconstruction and Development (EBRD). The benchmark will pave the way for “a broader set of products for financial sector participants.”

EXCLUSIVE- Gov’t mulls signing fuel hedging contracts with more banks this fiscal year: The government is planning to at least double the number of oil hedging contracts it will sign for FY2019-2020 and is currently reviewing bids from several banks, two government officials told Enterprise. The government will sign up to five new agreements as well as renew the two contracts it had signed in FY2018-2019. It plans to expand hedging to include other basic commodities in the next fiscal year.

Background: It was reported earlier in July that crude oil prices will be set at USD 64-68 per bbl in the government’s fuel hedging contracts with international banks. The finance and oil ministries had started renegotiating the USD 70/bbl price they had agreed on in the contract. Hedging contracts typically allow for a revision of the crude price on a quarterly basis. A Bloomberg analysis last year showed that every USD 1 increase above a benchmark price used by the state in annual budgeting added EGP 4 bn (USD 222 mn) to annual spending. This year’s budget uses a benchmark price of USD 68/bbl.

Government sells fewer 3-month T-bills than targeted — is this a sign of a trend? The government sold EGP 5.2 bn of 3-month T-bills in a Sunday auction out of EGP 9.25 bn targeted, CBE data shows. Average yields for the 3-month notes came at 17.899% — a marginal increase from the previous auction in which the government sold EGP 7.3 bn-worth of securities with yields of 17.895%. The notes sold fell below the target of EGP 9.25 bn, according to CBE data (pdf). Appetite for 6-month bills was somewhat weak as well, with the government selling EGP 5.2 bn out of EGP 9.25 bn in an auction last week.

The explanation: Investors are dumping short-term notes ahead of an expected rate cut. Investors are anticipating that the Central Bank of Egypt will resume its monetary easing cycle during the fourth quarter of the year, and are moving towards longer term notes, Pharos’ Head of Research Radwa El Swaify said. Beltone Financial’s Alia Mamdouh said the expected interest rate cuts through 2020 would reduce yields on local debt by 1.5% on average.

LEGISLATION WATCH- FinMin closes legal loophole in calculating late income tax penalties: The Finance Ministry has added a clause to the Income Tax Act’s executive regulations to clearly specify a time period against which late tax payment fees are calculated, according to a document (pdf) seen by Enterprise. The clause also ensures the accumulation of penalty fees does not get put on hold when the fees are subject to taxpayer appeals. The time period for the late fees — which are calculated by applying the central bank’s discount rate plus a 2% premium — was not previously specified in the regulations. The amendment closes a loophole that has allowed some 130k taxpayers to file appeals, a source from the Tax Authority told us.

LEGISLATION WATCH- FRA makes new amendments to the Insurance Act: The financial Regulatory Authority (FRA) has made new amendments to the final draft of the Insurance Act to encourage financial inclusion, Youm7 reported. The amendments include requiring insurance companies to present a certificate from a CBE-registered bank as proof that they have deposited at least EGP 500k for every branch they have or a maximum of EGP 3 mn for all their branches combined. The companies would require an approval from the FRA to use these deposited funds. Insurance companies would also be required to pay EGP 20k to register every new branch. Click here to read the decree of the act.

Medical Insurance companies: The new amendments also grant the FRA the right to license medical insurance companies, and requires these companies to seek regulatory approval before opening a new branch or distribution unit, and before making transactions. Medical insurance companies must have at least EGP 60 mn in paid-up capital or its equivalent in a foreign currency.

Property and life insurance companies would be required to deposit EGP 150 mn or its equivalent in a foreign currency. This amount will increase by EGP 50 mn if any branches are involved in oil, aviation or energy-related activities. The companies shall rely on cumulative voting to elect the board of directors.

Background: The FRA recently granted itself sweeping new powers to regulate the insurance industry under the final draft of the Insurance Act. The latest draft also reverses an article that banned any insurance company shareholder from acting as chairman or CEO. The bill will still double the ceiling for life insurance payouts to EGP 100k, from EGP 40k currently.

LEGISLATION WATCH- El Sisi ratifies amendments to Investment Act: President Abdel Fattah El Sisi has ratified amendments to the Investment Act that allow expansions of existing investment projects to benefit from newly introduced incentives, according to an Investment Ministry statement. The amendments also require prospective business owners to obtain permission from the Investment Ministry before starting a new business. Private and public companies may be asked by the ministry to disclose information and data needed to calculate FDI and indirect investments for statistical purposes. Companies that don’t abide by this clause will be fined a maximum EGP 50k. The House of Representatives passed the amendments last month.

LEGISLATION WATCH- El Sisi issues amendments to the Labor Unions Act, which regulates the formation and activities of workers’ unions, reports Al Shorouk. The amendments grant workers the right to establish unions that are made up of at least 50 workers. Union organizers who violate the act will be subject to fines ranging between EGP 50k and EGP 200k, and could have their property and assets confiscated, and the location of the union shut down. Union members who deliberately give out inaccurate data relating to the organizational, financial, administrative status of their entities will face fines between EGP 50k and EGP 20k.

EARNINGS WATCH- Emaar Misr turned net losses of EGP 324.3 mn in 2Q2019, down from a net profit of EGP 598.5 mn in 2Q2018, according to the developer’s earnings release (pdf). This came despite the company’s revenues declining by only 3.4% y-o-y to EGP 890.8 mn from EGP 922.2 mn. The real estate plater posted a profit of EGP 94.3 mn in the first six months of the year, down 91% y-o-y from EGP 1.1 bn in the comparable period.

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Image of the Day

Mapping the world through machine learning: Facebook researchers are using machine learning models on high-resolution satellite imagery to produce detailed maps showing human settlement around the world, including this image of North Egypt, courtesy of Visual Capitalist. With 95% of our population living along the banks of the Nile, Egypt is a highly illustrative example of the power, detail and beauty of this kind of sophisticated mapping, which has been made possible with machine learning. If you look at the full-resolution version of the map, you will see that even individual buildings are visible, with human settlement depicted on a granular scale. The maps, believed to have an accuracy rate of 99.6%, don’t simply provide interesting data; they could also be used to improve living conditions — particularly in developing and rural areas.

Egypt in the News

Sunday’s car bomb explosion outside of the National Cancer Institute in Downtown Cairo is dominating the conversation in the foreign press: You can find international coverage of the incident in this morning’s Speed Round.

We’re being particularly inspirational this week: Yesterday, a Nigerian regulator was waxing lyrical about our reforms in the power sector. Today, we’re providing the playbook for Pakistan’s IMF-backed economic reform program. An opinion piece for Pakistan’s Express Tribune argues that Pakistan should look to replicate our reform efforts as the country embarks on a 39-month economic program, backed by a USD 6 bn IMF loan.

Worth Watching

How do scientists produce incredible colored photos of space? The Hubble space telescope has been orbiting Earth since 1990, expanding are view of deep space. But contrary to what most believe, it only takes photos in black and white. To show us color photos of space, scientists use a technique that imitates how our eyes naturally perceive color (watch, runtime: 05:47).

It isn’t simply for aesthetic reasons: The process also allows them to map out how different gases interact in the universe to form galaxies and nebulae. Arguably Hubble’s most famous photo is called The Pillars of Creation, which captures huge towers of gas and dust, forming new star systems. Using such pictures for visual analysis allows scientists to see how stars and galaxies form over time, illuminating the invisible parts of our universe.

Energy

NREA to offer tender for solar energy plant in Hurghada

The National Renewable Energy Authority (NREA) will issue a tender for companies to build a 20 MW solar energy plant in Hurghada, an unnamed government official told the local press. The plant will have an energy storage battery, which will be the first of its kind in Egypt, the official said. The plant will be financed through an USD 85 mn loan from the Japan International Cooperation Agency (JICA).

Infrastructure

MOT to auction 15 commercial spaces in railway stations

The Egyptian Railways Authority’s investment arm MOT for Investments and Projects is planning to auction 15 commercial spaces in railway stations this month, an unnamed official from the authority told Al Mal. The plots range between 20 and 2.5k sqm, and will be granted to the highest bidders.

Egypt to tender 200k sqm in the Robbiki Leather City in 4Q2019

State-owned Cairo for Investment and Development is planning to tender 200k sqm in the Roubiki Leather City in 4Q2019, CEO Yasser El Maghraby told the press. Land plots ranging between 1-5k sqm will be offered for investors looking to set up leather tanneries as part of the second development phase of the leather-specialized industrial complex.

Egyptian-Italian-Chinese coalition offer to build dry port in 10th Ramadan City

An Egyptian-Italian-Chinese coalition has made an offer to the Transportation Ministry to build, manage and operate a dry port and logistics center in 10th of Ramadan City, the ministry said in a statement. The project would facilitate trade between 10th Ramadan, Badr City, Ain El Sokhna and east Port Said. After a meeting with the delegation yesterday, Transportation Minister Kamel El Wazir asked the coalition to prepare an economic study for the project.

Real Estate + Housing

Vertical forest project to be implemented in the new administrative capital

Misr Italia is working with Italian architect Stefano Boeri to bring his “vertical forest” to its buildings at the new administrative capital, Ansamed reports. With an investment of EGP 16 bn (EUR 900 mn) from Misr Italia, the project will involve constructing three towers covered in greenery meant to combat the effects of pollution and climate change. The project is intended to be completed by 2023.

Telecoms + ICT

China’s Jusfoun Big Data to establish office in Cairo

The Information Technology Industry Development Agency (Itida) and Jusfoun Big Data Information Group signed an MoU to establish an office for the company in Egypt, the Communications Ministry said in a statement. The company’s office in Egypt will export research and development services, software and applications development, and artificial intelligence research. Communications Minister Amr Talaat agreed with the company on signing a separate agreement in the next two months to establish a capacity-building academy in artificial intelligence, big data, and cloud computing. It will also work with state-owned Telecom Egypt to establish a cloud computing system through the data center.

Other Business News of Note

GAFI approves offering 107 projects in Meit Ghamr investment zone

The General Authority for Investment’s (GAFI) board approved tendering 107 projects in the metallurgical sector in the Meit Ghamr investment zone, according to a statement from the Investment Ministry.

Sports

Egypt’s junior women’s squash team defeats Singapore at Malaysia tournament

Egypt’s women’s squash team has got off to a strong start at the World Junior Women's Championship in Malaysia, defeating Singapore 3-0, Egypt Today reports. The Egyptian team is still due to play Switzerland and France, the other two teams in their group.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.48 | Sell 16.60
EGP / USD at CIB:
Buy 16.48 | Sell 16.58
EGP / USD at NBE: Buy 16.51 | Sell 16.61

EGX30 (Monday): 13,599 (-0.1%)
Turnover: EGP 589 mn (3% above the 90-day average)
EGX 30 year-to-date: +4.3%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.1%. CIB, the index heaviest constituent ended down 0.5%. EGX30’s top performing constituents were Sodic up 4.7%, Ezz Steel up 2.8%, and Orascom Investment Holding up 1.9%. Yesterday’s worst performing stocks were Qalaa Holdings down 7.1%, Abu Dhabi Islamic Bank down 4.5% and AMOC down 1.9%. The market turnover was EGP 589 mn, and local investors were the sole net sellers.

Foreigners: Net long | EGP +45.1 mn
Regional: Net long | EGP +1.8 mn
Domestic: Net short | EGP -46.9 mn

Retail: 50.2% of total trades | 46.9% of buyers | 53.4% of sellers
Institutions: 49.8% of total trades | 53.1% of buyers | 46.6% of sellers

WTI: USD 54.30 (-0.71%)
Brent: USD 59.44 (-0.62%)

Natural Gas (Nymex, futures prices) USD 2.09 MMBtu, (+1.11%, September 2019 contract)
Gold: USD 1,482.40/ troy ounce (+0.40%)

TASI: 8,465.25 (-1.07%) (YTD: +8.16%)
ADX: 5,083.16 (-1.87%) (YTD: +3.42%)
DFM: 2,799.83 (-2.03%) (YTD: +10.0%)
KSE Premier Market: 6,726.87 (+0.01%)
QE: 9,924.87 (-4.16%) (YTD: -3.63%)
MSM: 3,788.73 (+0.22%) (YTD: -12.37%)
BB: 1,544.65 (-0.26%) (YTD: +15.51%)

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Calendar

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.

10-13 August (Saturday-Tuesday): 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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2018 Enterprise Ventures LLC.