Thursday, 8 August 2019

Veon completes MTO of 42.3% of Global Telecom.


What We’re Tracking Today

We’re officially on holiday in a few hours’ time: Civil servants will be on break to observe Eid Al Adha from Saturday through Wednesday, and resume work on Thursday, according to a cabinet statement. The central bank and EGX were less generous with the vacation days: banks and capital markets (and, by extension, most of the private sector) will be back to work on Wednesday morning.

Enterprise will be off Sunday through Tuesday: We will be back in your inboxes at the appointed hour on Wednesday morning.

All eyes will be on the EGX today as Fawry’s IPO, the first in around 10 months, comes to fruition, with trading on the company’s shares starting today at EGP 6.46 apiece. The e-payments platform’s retail component, which covered 35.4 mn shares, closed earlier this week around 30x oversubscribed. The retail tranche covered 5% of the company’s shares. Fawry 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.

The CBE could release July’s inflation figures today. Inflation unexpectedly plummeted almost five percentage points to 9.4% in June — the first time Egypt has seen single digit inflation since March 2016. While some research houses have lowered their overall projections for the year, it is widely expected that we see inflation in July rise on the back of last month’s cuts to fuel and electricity subsidies.

Higher inflation means a rate cut will be highly unlikely: Investment banks are expecting the Monetary Policy Committee to keep interest rates on hold when it meets on Thursday, 22 August.

Markets catch their breath after two days of turmoil: US equities closed in positive territory and a rally in government bonds ran out of steam yesterday despite rising concerns over global growth, says the Financial Times. US stocks fought back after a 2% drop soon after trading opened. The S&P 500 closed up 0.08% and the Nasdaq gained 0.38%. The Dow Jones Industrial Average finished slightly in the red, down 0.09%.

European stocks also managed to recover after a rough start, but “safe haven assets” remained in demand, with both gold and the Japanese yen extending their yearly gains. Germany’s Dax, France’s Cac 40 and the UK’s FTSE 100 all ended in the green.

But “scary” German industrial output figures stoke recession fears: Fresh industrial figures in Germany showed a larger-than-expected drop in output. “The continued plunge in production is scary,” Bankhaus Lampe economist Alexander Krueger told Reuters. “The longer this continues, the more likely it is that other sectors of the economy will be dragged into this.”

And so it begins: Several central banks cut interest rates yesterday, signalling that perhaps we’re entering a new phase of sustained global easing. New Zealand first surprised markets with a “bigger-than-expected” cut, followed by an out-of-the-blue easing by the Bank of Thailand and an unconventional 35 basis point cut by the Reserve Bank of India, says Bloomberg.

Markets breathe a sigh of relief, however short-lived: While markets did breathe a sigh of relief when China stepped in Tuesday to stabilize the yuan, signs that investors are becoming increasingly downbeat about growth prospects are showing. Germany’s yield curve has hit its flattest level since the financial crisis, signalling that the global bond market is sounding the alarm that… [it won’t last] much longer before a recession strikes.”

One analyst is getting a little over-excited: While many marketwatchers are now predicting a correction, one analyst is going full apocalypse with his forecast. Nomura strategist Masanari Takada is warns that a second market sell-off at the end of August could be “Lehman-like” in its devastation, CNBC reports.

Is the party over in Asian EMs: EM currencies and bonds have lost about 2% since Trump’s tariff announcement, Bloomberg says. Although the decline in Asia currencies eased yesterday, it still isn’t looking particularly good: South Korea’s won hovered near a three-year low Wednesday, while the Indonesian rupiah, the Philippine peso and Malaysian ringgit also dropped.

The trade war is increasingly becoming about “the weaponization” of policy tools: “We’re seeing that with trade, now we’re going to see it on currency,” markets sage and Allianz chief economic advisor Mohamed El Erian told Fox Business on Tuesday, a day after the US labelled China a currency manipulator (watch, runtime: 7:21). “If you look at the strict definition of currency manipulator, China is not there,” El Erian said.

We need to see fairer trade, fiscal expansion, and more “structural pro-growth policies,” El Erian says. Even if major central banks step in and ease policy, this is unlikely to tackle the underlying problems, he said, in a call-back to his op-ed in FT about the increasing ineffectiveness of monetary policy.

BDS Egypt tells J-Lo to GTFO: Anti-Israel campaign group BDS (Boycott, Divestment, Sanctions) Egypt has called on Orascom Development to scrap Jennifer Lopez’s upcoming concert in New Alamein following her recent performance in Tel Aviv. “This concert will take place after her previous concert in occupied Palestine days ago, which she insisted on carrying out despite many calls to boycott Israel and cancel the concert,” the group wrote in an open letter. “She showed clear support for the state of occupation and its racist policies towards Palestinians.”

In international miscellany:

  • Just what the world needs: A new geopolitical flashpoint between two nuclear powers. Tensions are rising in Kashmir after India’s nationalist PM Narendra Modi revoked the region’s special status, imposing a curfew, and cutting off mobile networks, landlines and internet access. Pakistan yesterday suspended trade ties and threw out India’s top envoy in response. (BBC)
  • Netanyahu’s days could be numbered: Opinion polls suggest that Netanyahu will be no closer to forming a government after the 17 September election, potentially bringing his 10-year reign to an end. (Bloomberg)
  • Manhattan or Juarez? Amnesty International has issued a travel warning for people travelling to the US in response to the latest mass shootings, advising people to exercise “extreme caution” and avoid large gatherings. (Amnesty)

Enterprise+: Last Night’s Talk Shows

New fertilizer complex comes to life: The inauguration of a new phosphate and compound fertilizers manufacturing complex in Ain El Sokhna was the highlight of Al Hayah Al Youm’s show last night with Khaled Abu Bakr (watch, runtime: 04:09). El Sisi took advantage of the televised event to address the nation, urging everyone to stand together against terrorism following the deadly attack in Cairo earlier this week. “The state shouldn’t be combating it (the destruction) alone — we, as a society, must explain to our children and make them aware and shield them against this ideology,” he said during the address (watch, runtime: 9:31).

Gold prices are up on the back of a 10% increase on duties on Chinese imports recently imposed by the US, Amir Rizk, a member of the Gold Traders Division, told Yahduth Fi Misr’s Sherif Amer (watch, runtime: 04:28).

This is probably a good idea: Prime Minister Moustafa Madbouly met with ministries yesterday to follow up on and resolve financial disputes between them (watch, runtime: 01:03).

Speed Round

Speed Round is presented in association with

M&A WATCH- Veon MTO for Global Telecom closes: Global Telecom Holding’s (GTH) sale of 1.99 bn shares in a mandatory offer (MTO) launched by majority shareholder Veon to acquire 42.3% of the company is now complete and the MTO has closed, according to an emailed statement (pdf) from Shalakany Law firm, Veon’s lead counsel. Veon will hold around 98% of the company’s total outstanding equity,” the statement said. The total purchase price for the shares is EGP 9.7 bn (USD 600 mn).

Background: Veon’s plans to launch the MTO were previously hampered by the long-running tax dispute between GTH and the government, which was resolved last month after GTH signed a USD 136 mn settlement agreement with the Egyptian Tax Authority. The Financial Regulatory Authority subsequently approved the MTO at EGP 5.08 per share, down from a previous EGP 5.30 per share.

M&A WATCH- Azimut completes acquisition of Rasmala subsidiary in EGP 211.3 mn transaction: Italy-based asset manager Azimut Group acquired 100% of Rasmala Egypt Asset Management (REAM) from its parent company Rasmala Group, according to the local press. Azimut bought 499k shares for EGP 211.3 mn. Azimut had signed the agreement to acquire REAM back in January, and the Financial Regulatory Authority gave the green light for the transaction last week.

INVESTMENT WATCH- Affirma Capital eyeing potential acquisitions in Egypt: Affirma Capital is eyeing Egypt as it plans to complete at least one acquisition in the Middle East and Africa this year, Bloomberg reports. Affirma founding partner Taimoor Labib says that Egypt, along with Jordan and Nigeria, are countries that the company is particularly interested in. "Post devaluation, for USD-based investors, it’s a great time to go into Egypt. It’s still early, but we’ve looked at quite a few businesses especially in the food and beverage and retail sectors," he said. The firm has a reported USD 700 mn to spend — which is higher than previously thought — and is said to be looking at investments that will yield an internal rate of return of 25%.

M&A WATCH- Match Group acquires app Harmonica: Match Group (the owner of dating and matchmaking platforms such as OkCupid, Hinge, and has acquired Egypt-based Muslim matchmaking app Harmonica from Cairo-based startup accelerator Flat6Labs, the company said in a statement. Harmonica — essentially a halal version of Tinder — is “an app which approaches mobile matchmaking with respect for local traditions and cultures” to help local singles find life partners. The acquisition marks the first significant Flat6Labs exit, and will give Match Group its first office in the Middle East. The value of the acquisition was not disclosed. The details of the transaction will be announced at a presser on 26 August. Alliance Law Firm acted as Harmonica’s legal counsel.

Harmonica first joined Flat6Labs’ program in August 2017: The startup accelerator provided the company with funding, training and legal services during the four-month program, helping the company to acquire around 5k users. Its user base surged 700% shortly after exiting the program. Flat6Labs and 500 Startups then invested in Harmonica to upgrade its algorithms and its monetization strategy into practice. Users have steadily grown by 650% since then.

EARNINGS WATCH- GB Auto turns net loss in 2Q2019 as competition with zero-tariff EU imports bites: GB Auto posted a net loss of EGP 8.9 mn in 2Q2019, with revenues falling 6.3% y-o-y, according to a company earnings release (pdf). The bulk of the revenues during the quarter came from the company’s Auto & Auto Related (A&AR) segment, which took EGP 9.64 bn over the quarter — a 4.3% y-o-y rise from 2Q2018. The company recorded net profits of EGP 7.1 mn during 1H2019 on revenues of EGP 11.54 bn.

“Regulatory challenges,” low customs for EU, Moroccan, Turkish cars driving losses:The company attributed its loss during the quarter to “regulatory challenges” including the imposition of lower customs rates on cars from the EU, Morocco, and Turkey than vehicles from other markets. “This trend is creating an environment that favors importation of more expensive and luxurious cars from EU countries over buying locally assembled cars and other more economic, fully imported products of non-EU origin. It is our view that these trends are unsustainable, and corrective measures are required to protect our national manufacturing know-how and capacities, as well as provide a level playing-field that would stabilize the market, improve foreign currency utilization and enhance customs revenues,” GB Auto CEO Raouf Ghabbour said. Ghabbour also pointed to regulations constraining the three-wheeler segment, including caps imposed on the number of licenses for three-wheelers.

Regulatory changes are coming, but are they enough? Sources told us last month that the Madbouly Cabinet had approved legislative amendments to the Customs Act that would provide incentives to domestic manufacturers. The amendments would see manufacturers’ effective customs rates reduced if they meet domestic component quotas. Nonetheless, even under these incentives — which could see their customs bill reduced to 15% from a current 40% in certain cases — local manufacturers would still find it hard to compete with imports from the EU that have a 0% customs rate. These incentives were created in place of a previous package of incentives (dubbed the automotive directive), which was long called for by local assemblers, who had hoped it would tip the scales before customs on EU cars fell to 0%.

Egypt Kuwait Holding 2Q profit up 12% y-o-y: Egypt Kuwait Holding (EKH) posted a net profit of USD 34.8 mn in 2Q2019, up 12% from USD 30.7 mn a year earlier, according to a quarterly earnings release (pdf). Revenues increased by more than USD 25 mn y-o-y to reach USD 140 mn. Growth came primarily from the company’s energy arm, which saw revenues rise to USD 30 mn from USD 24.4 mn in 2Q2018.

Profit rises 13% y-o-y in 1H2019: EKH reported profit of USD 71.9 mn during the first six months of 2019, up 13% from USD 63.3 mn last year. Revenues in 1H2019 rose by almost 20% to hit USD 280.3 mn, from USD 234.8 mn.

Outlook: The company is “optimistic” about its medium and long-term growth prospects due to the ongoing Egyptian gas boom, the completion of its 40 MW Kahraba plant expansion in late 2020, and the entry of its fertilizers and petrochem segment into new export markets.

Real estate developer Talaat Moustafa Group reported net income of EGP 812.3 mn during 1H2019, compared to EGP 731.7 mn a year earlier, the company said in a bourse filing (pdf). Revenues came at EGP 4.9 bn during the period, a 25% increase from last year.

EXCLUSIVE- Agricultural land tax coming back into effect in July 2020: The government is preparing to bring back its agricultural land tax from July 2020 following a three-year suspension beginning in 2017, two government officials told Enterprise. The government is currently re-appraising the land that will be subject to the tax, which spans 16 governorates. A total of around 10 mn feddans will be subject to the tax.

Tax to be imposed under one of two categories: According to the sources, the tax will be imposed and collected separately on two types of land. The first is land that has seen its output increase by 30% as a result of irrigation projects. Rent prices on these land plots will be reassessed as part of the appraisal process, and any changes will be implemented as of 1 August 2020. The tax rate will remain unchanged at 14% of the land’s rent value, the sources stressed. The second category is land where there are no irrigation projects. Rent on these plots will remain unchanged, and the tax rate will remain fixed at EGP 200-300 per feddan.

REGULATION WATCH- CBE issues regulations for foreign currency exports: New banking regulations will require banks wanting to export and import foreign currency to apply for a 12-month license in January every year, according to a CBE statement (pdf) released yesterday. The CBE said banks have six months from the date it issued the regulations to work out their statuses.

How will the exports be done? Banks may sign contracts with international financial institutions (banks or exchange bureaus) to carry out export transactions for them — as long as they conduct due diligence and set an insurance limit (to be renewed annually). Banks would require approval from the CBE to carry out the transactions through an Egypt-based company.

What kind of international institutions qualify? Qualifying institutions must be under the supervision of a regulatory body and be authorized to import FX. They have to have been established for at least five years, and have never been fined or punished by their domestic regulator. They must also have internal procedures to combat money laundering and terrorist financing.

How big can the transactions be? The value of a single export transaction cannot exceed USD 100 mn (or the equivalent in other currencies), the CBE said. Banks would have to hire a specialized international company to determine the rate of foreign currency not listed in the CBE’s rate chart — as long as the transactions in this case are between USD 2 mn and USD 10 at a time and are approved by the CBE.

Before the transaction: Banks must demonstrate that they are sufficiently capitalized to continue normal operations while engaging in FX transactions. Banks must also show on Reuters monitors rates of FX they’re looking to export the day before they make their transaction request to the CBE. The central bank must give its approval at least one day before the transaction date.

After the transaction: Banks must provide the CBE with proof of the value and rate of their FX exports within a maximum of 10 days after the transaction.

The CBE may withdraw a bank’s licence whenever it wants and without providing any explanation.

CBE approval is also required for foreign currency imports, the bank said, without providing further details.

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The Macro Picture

Negative-yielding debt reaches insane new highs: Yields on around USD 15 tn of sovereign bonds — equal to a quarter of the global market — are now in negative territory, according to a CNBC report citing Deutsche Bank research. This number has almost trebled since October 2018 when USD 5.7 tn of government debt was trading at negative yields. Rates plunged this week as fears of a global economic recession grew and central banks stepped up monetary easing. There are now 12 countries whose 10-year notes yield negative rates, while Irish, Spanish and Portuguese 10-years — countries that just a few years were mired in sovereign debt crises — are barely above 0%.

What’s with the negative yields? Bond prices have surged this month as tanking stock prices cause investors to flee to safe haven assets. This has caused yields to plunge in many developed economies: the greater demand for bonds, the higher the price and the lower the yield. This, however, has happened many times before, without causing yields to drop into negative territory. What makes this time different has to do with over a decade of loose monetary policy in advanced economies: the huge bond-buying programs launched in the aftermath of 2008 and years of near-zero (or sub-zero as is the case in Japan and the Eurozone) deposit rates have placed huge downwards pressure on yields. And with further easing almost guaranteed in the US and the Eurozone, yields can be expected to fall even further.

Why would investors pay to hold government debt? First and foremost, a willingness to actually pay governments to borrow money evidences a growing desperation among investors for protective assets. At a time when the global economy looks increasingly likely to tip into a recession, many are exiting riskier asset classes in search of safety — even if that means paying for the privilege. Secondly — and perhaps counterintuitively — it is actually possible to generate a profit from a negative-yielding bond should its price continue to rise. Markets are increasingly confident that it is only a matter of time before the world’s major central banks restart their bond-buying programs, providing additional incentive for investors to hold onto their bonds in the hope of realising a profit.

Egypt in the News

It’s another super-quiet morning in the foreign press, with only two stand-out articles to speak of:

  • Belly dancer faces deportation: Armenian belly dancer Sofinar Grigoryan could be imprisoned or deported on allegations of “inciting debauchery” after a video of her dancing with women in a bikini went viral, the Daily Mail reports.
  • Colorful haj celebrations in Cairo: 69-year-old Eid Al Salwaawi paints murals in Sayeda Zainab to celebrate the haj pilgrimage, Reuters notes.

Worth Reading

By 2040, we’ll be lazy and individualistic, but never alone. Call us old-fashioned, but a Euromonitor International report on the consumer landscape in 2040 reads like a dystopian nightmare waiting to happen. Don’t believe us? Just watch an episode of Black Mirror, of which it is decidedly redolent. Technological innovation and constant connectivity are set to drive the consumer landscape, the report predicts, painting an imaginative (and plausible) picture of how this could look. Yes, okay, a lot of it is highly practical. But it also scares the [redacted] out of us. A few key predictions:

  • We are likely to become increasingly egocentric: The rise of immersive tech will allow us to engage in formerly social experiences without ever having to leave our homes with the help of virtual reality devices.
  • We will all but lose the ability to take care of ourselves: Automation, connectivity and the desire to create a “personalized” experience means we’ll never again be left to do something as onerous as making an unassisted decision about what to wear (your mirror can help with that) or how much to eat (your kitchen will monitor your food intake).
  • Big Brother will always be watching: Shopping will involve a lot of facial recognition and tracking for increasing personalization, while smart homes will track how much energy each occupant is burning, along with who enters and leaves the house. And should you find yourself alone, at any point? Not to fear: The robots will be on hand to provide companionship and track your movements using video surveillance — purely for your safety, of course.

Worth Watching

Is quantum computing really all that groundbreaking as all that? In a word, yes. Quantum computers have the power to solve certain kinds of particularly thorny problems in seconds, while today’s supercomputers would take thousands of years, the Economist says. And the prospect of being able to compute the formula for new fuel or medicine, break encryption, or make real-time stock predictions based on data from every trade ever made has governments and tech giants in a fierce race to lead the world in quantum science.

But that doesn’t mean it will replace the computers we use now: Quantum computers are incredibly difficult to run, and currently stored only in very controlled lab environments, at temperatures lower than that of deep space. Even as quantum computers become more advanced, we won’t be carrying them around with us to edit photos or send emails. Instead, the likelihood is that a few companies will end up having the best computers — whether powered by startups or industry giants — and as users, we’ll be able to access them on a time-share basis, using the cloud. Or we’ll simply send off our quantum problems and wait for the powers that be to answer (watch, runtime: 03:56).


Egyptian Electricity Holding launches USD 84 mn tender for two control centers

The Egyptian Electricity Holding Company (EEHC) has launched a tender for foreign companies to build two power transmission control centers at a combined cost of USD 84 mn (c. EGP 1.4 bn) in New Cairo and Nasr City, a company executive told Al Mal. The New Cairo center is expected to cost some USD 45 mn, and the Nasr City site up to USD 39 mn. EEHC subsidiary North Cairo Electricity Distribution Company will oversee the projects until their expected inauguration within 18 months. Construction will be financed by the EEHC and the Japanese International Cooperation Agency (JICA), the source told the newspaper.

Egypt signs contract with Siemens to develop national electricity grid

Siemens AG will conduct a series of five-year studies on Egypt’s electricity distribution grid to “identify the feasibility of deploying different advanced energy technologies,” the company said in a press release (pdf). Under a contract with the Egyptian Electricity Holding Company (EEHC), Siemens will analyze and examine the grid to look at ways to integrate smart technology into the grid, train the EEHC planning team, and provide new software tools. There was no mention of the value of the contract.


Egypt’s SCA, SCZone reach final agreement with UAE’s DP World for Sokhna JV

The Suez Canal Authority (SCA) and the Suez Canal Economic Zone (SCZone) have reached a final agreement with DP World on setting up a joint venture to develop 45 sqm in Ain Sokhna, SCA boss Mohab Mamish said at a press conference. The JV will be 49% owned by the UAE-based port operator and 51% owned by the SCA. No further details were provided beyond a reference to earlier press reports estimating the SCA’s share of the project at EGP 4 bn.

Basic Materials + Commodities

Egyptian Countryside Development Co in talks with unnamed US investor

The Egyptian Countryside Development Company is in talks with an unnamed US investor interested in acquiring land to cultivate berries as part of the 1.5 mn feddan project, CEO Ater Hanoura told Al Mal. A delegation from the company will be in town sometime in the near future to survey available land.


El Nasr fertilizers and Benchmark Power Int’l sign MoU for Suez ammonia factory

State-owned El Nasr Co. for Fertilizers & Chemical Industries signed an MoU with Benchmark Power International to build a USD 600 mn ammonia factory in Suez, Al Mal reported. The facility will have a daily production capacity of 1.2k tonnes, which will be doubled in the second phase. El Nasr will provide the land plot for the project on a usufruct basis for 25 years.

El Sisi inaugurates large fertilizer complex in Sokhna

President Abdel Fattah El Sisi inaugurated a new phosphate and compound fertilizer manufacturing complex at the Ain Sokhna Industrial Zone yesterday, according to a local press report. The complex is said to be the largest in the Middle East and houses nine phosphate-based fertilizer factories. It contains a water desalination plant and a sea dock for exporting, as well as various administrative, accommodation, medical, and entertainment facilities, the Defense Ministry’s National Service Products Organization head Moustafa Amin said. The project was built by German construction outfit ThyssenKrupp at a cost previously estimated at USD 1 bn.

Real Estate + Housing

Porto Group investing EGP 7.7 bn in Porto October

Real estate developer Porto Group is investing EGP 7.7 bn in its Porto October project west of Cairo, Chief Marketing Officer Dalia Kordy told Reuters.


Rixos, Eastern Co. for Investment sign agreement to renovate Hurghada hotel

Rixos Hotels has inked a partnership agreement with the Eastern Company for Investment and Tourism Development to “takeover and renovate an existing beachfront property” in Hurghada’s Makadi Bay, according to a press release (pdf). The property will be rebranded as an all-inclusive luxury resort and renamed Rixos Makadi Bay. The hotel is slated for inauguration in 2020, upon the completion of phase one of the two-phase renovation plan.

Egypt aims to increase tourist visits by 11% in FY2019-2020

Egypt is hoping to attract 12 mn tourists in FY2019-2020, an 11% y-o-y increase, according to a government document seen by Reuters. The government is also looking at increasing the cumulative number of nights spent by tourists in the country to 127 mn from 113 mn during the last fiscal year. Tourist arrivals in Egypt reached 11.3 mn visitors in 2018, up from 8.3 mn in 2017, a World Tourism Organization official said in February.

Telecoms + ICT

Telecom Egypt signs agreements with China’s ZTE and China Telecom

Telecom Egypt (TE) has signed a cooperation agreement with China’s ZTE to establish a training center in Egypt, the Communications Ministry said in a statement. TE also signed an MoU with China Telecom to exchange know-how in customer service, Iptv, and connecting fiber optic cables to homes.

Automotive + Transportation

Tunnel authority to launch tender for 23 train cars in phase 1 of Metro Line 4

The National Authority for Tunnels (NAT) will soon launch a tender to purchase 23 train cars for the first phase of Cairo Metro Line 4, authority boss Assem Wali said, according to Al Mal. The authority had called off an earlier tender after receiving an offer from the only qualified company, Japan’s Mitsubishi Corporation, that it deemed too expensive. There was no mention of when the authority is planning to re-issue the tender. The planned line, of which 40% will be funded through a USD 1.28 bn loan from the Japanese International Cooperation Agency (JICA), will run from 6 October City and end at Al Fustat.

Car makers want representation on gov’t price-monitoring committee

Private sector auto manufacturers are looking to get in on a government committee aimed at providing a price guide to consumers by monitoring the market’s “random price increases,” Egyptian Automotive Manufacturers’ Association spokesman Khaled Saad tells Al Mal. Manufacturers say their representation in the committee would provide market data and help keep prices in check. The committee, which was set up last week, is headed by the chairman of the Consumer Protection Agency and includes members of the tax and customs authorities. The committee has been tasked with keeping tabs on the costs tacked onto imported cars, including customs and other fees, and relaying that information to the public to act as a price guide, Supply Minister Ali El Moselhy said, according to Masrawy. The committee is not meant to impose mandatory pricing.

Banking + Finance

CBE signs MoU with Dubai financial regulator

The Central Bank of Egypt signed an MoU with the Dubai Financial Services Authority (DFSA) at the end of July to strengthen regulatory ties, the DFSA said in a statement yesterday. CBE Governor Tarek Amer said that the agreement will “promote the safety and soundness” of Egypt’s banking sector and accelerate the exchange of information and expertise.

Global Finance gets factoring license from the FRA

Global Lease’s factoring arm Global Finance has been awarded its factoring license from the Financial Regulatory Authority (FRA) and plans to begin operations immediately, Chairman Hatem Samir tells Al Mal.

Other Business News of Note

Carrefour plans to open 160 new branches across several governorates

Retail chain Carrefour is planning to open 160 new branches across several governorates in the coming few years, unnamed sources tell the local press. The new branches will mostly be rented.

Egypt Politics + Economics

Parliamentary elections to be held at the end of 2020

Egypt’s next parliamentary elections are due to be held at the end of 2020 once the fifth and final legislative session of the current parliament comes to a close, Deputy House Speaker Soliman Wahdan said, according to Ahram Online. The upcoming legislative session is due to begin in October and end in June 2020.

On Your Way Out

An amateur Egyptologist has used more than 5,000 year-old yeast and used it to bake bread. Sourced from ancient Egyptian pottery held in Boston’s Museum of Fine Arts, Seamus Blackley used a complex sterilization process before using the yeast to make sourdough, documenting it step-by-step on his Twitter page.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.50 | Sell 16.60
Buy 16.49 | Sell 16.59
EGP / USD at NBE: Buy 16.51 | Sell 16.61

EGX30 (Wednesday): 13,881 (+1.7%)
Turnover: EGP 725 mn (23% above the 90-day average)
EGX 30 year-to-date: +6.5%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 1.7%. CIB, the index’s heaviest constituent, ended up 0.7%. EGX30’s top performing constituents were Orascom Investment Holding up 5.1%, Egyptian Resorts up 5.0%, and Egypt Kuwait Holding up 4.4%. Yesterday’s worst performing stock was Ibnsina Pharma down 0.8%. The market turnover was EGP 725 mn, and local investors were the sole net sellers.

Foreigners: Net long | EGP +41.1 mn
Regional: Net long | EGP +17.2 mn
Domestic: Net short | EGP -58.3 mn

Retail: 55.6% of total trades | 54.2% of buyers | 57.1% of sellers
Institutions: 44.4% of total trades | 45.8% of buyers | 42.9% of sellers

WTI: USD 52.41 (+2.58%)
Brent: USD 57.54 (+2.33%)

Natural Gas (Nymex, futures prices) USD 2.10 MMBtu, (+0.67%, September 2019 contract)
Gold: USD 1,518.10/ troy ounce (-0.10%)

TASI: 8,482.95 (+1.06%) (YTD: +8.38%)
ADX: 5,118.76 (+0.74%) (YTD: +4.14%)
DFM: 2,831.28 (+1.23%) (YTD: +11.92%)
KSE Premier Market: 6,743.58 (+0.55%)
QE: 9,898.10 (+1.23%) (YTD: -3.89%)
MSM: 3,838.61 (+0.93%) (YTD: -11.22%)
BB: 1,544.21 (-0.06%) (YTD: +15.48%)

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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.

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.

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

1 September (Sunday): Islamic New Year (TBC), national holiday.

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.

28 October-31 October (Monday-Thursday): A Cairo court will rule into the stock manipulation case, in which Gamal and Alaa Mubarak are involved in along with seven other defendants.

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.

11-13 November (Monday-Wednesday): Africa Investment Forum, Gauteng, South Africa.

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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