Wednesday, 14 August 2019

Inflation falls to four-year low in July.
Plus: Fawry enjoys solid EGX debut.

TL;DR

What We’re Tracking Today

We’re back, ladies and gentlemen. The domestic news cycle during Eid vacation was predictably slow. Thankfully, we’ve been bestowed with arguably two of the year’s most significant stories — the release of July’s stunning inflation figures and Fawry’s debut on the EGX — inside a single issue. We cover both of these in detail in this morning’s Speed Round, below.

And we have graphs. Lots of graphs.

The Tourism Ministry officially launched on Monday its latest promotion campaign video: PeopleToPeople. The campaign was curated by global travel brand Beautiful Destinations, and focuses on Egypt’s citizens who are “welcoming, proud, and eager to show their country,” according to a ministry statement (pdf). The campaign is part of the Tourism Reform Program unveiled by Tourism Minister Rania Al Mashat last December. You can watch the full video on YouTube here (runtime: 2:19), catch it on Al Mashat’s Instagram and Twitter, or through Beautiful Destinations’ social media platforms here and here.

Egyptian tycoon Hussein Salem died in Spain on Tuesday at the age of 85, Ahram Online cited his family as saying. Salem had fled Egypt during anti-Mubarak protests in 2011 before being charged with money laundering and illicit gains. The businessman, who held a Spanish passport, was later acquitted of the charges after paying a EGP 5.3 bn settlement to the government.

US delays some China tariffs: The US has delayed the introduction of fresh tariffs on some Chinese imports by three months, the US trade representative said in a statement. Trump announced on 1 August that a new 10% tariff would be applied to USD 300 bn of Chinese goods from 1 September. However, tariffs on imports of mobile phones, laptops, game consoles, computer monitors, some toys, and certain items of footwear and clothing have been pushed to 15 December due to “health, safety, national security and other factors.”

US markets reacted positively, with equities and treasury yields rising following the announcement. The Nasdaq Composite rose 2%, the S&P 500 gained 1.4% and the Dow closed the day up 1.2%. Meanwhile, the yield on 10-year treasuries climbed four basis points to 1.68%.

But EM stocks are on the cusp of reversing 2019 gains: The sell off in EM currency and equity markets resumed yesterday following a calamitous day in Argentina (more on this below) and the protests in Hong Kong, Reuters reports. The MSCI EM Equities Index edged closer to erasing 2019 gains after falling 1%, driven by a sell off on the Hang Seng which closed 2.10% in the red, and market turmoil in Argentina.

Negative yields push EU insurers into EM debt: EU-based insurers are increasing their exposure to EM bonds amid a swell in the amount of negative-yielding debt in Europe, Reuters reports. European insurers — who now invest close to EUR 250 bn or 5% of their assets in fixed income — are balking at the idea of paying to hold European bonds and are increasingly looking at EUR-denominated issuances in countries such as Egypt, Ukraine, Saudi Arabia, Indonesia, Serbia, Romania and Croatia. This marks a shift for the underwriters — who have traditionally reserved the larger part of their portfolios to investment grade bonds — toward high risk securities.

As we wrote last week: A quarter of the global sovereign bond market — around USD 15 tn worth of bonds — are now trading at negative yields. Even countries whose credit profiles sit just a few notches above junk status (such as Portugal and Bulgaria) are now within 50 bps of turning negative. The ultra-low rates prompted Fitch to warn yesterday that they are not indicative of a country’s credit profile, and in part are “a continuation of the distortion created by quantitative easing.”

Could the US follow suit? Greenspan thinks so. Former Fed chairman Alan Greenspan told Bloomberg yesterday that he would not be surprised if US bonds also turn negative in the coming months. “There is no barrier for US treasury yields going below zero. Zero has no meaning, beside being a certain level,” he said. A growing minority of investors are also beginning to prepare for negative rates in the US, the Wall Street Journal says. “If you proposed negative rates 10 years ago, people would have laughed you out of the room, Mark McQueen, bond manager at Sage Advisory Services, said. “Today people are getting on board the negative-rate idea very quickly.” US yields have fallen dramatically this month as trade and geopolitical concerns weigh on the minds of investors.

Presented without comment: Denmark’s third largest bank is now offering 10-year mortgages with a negative 0.5% interest rate — meaning that customers will be paid to borrow from the bank rather than pay interest. (CNBC)

Argentina makes history: The Argentinian stock market experienced the second-largest daily stock market collapse in history on Monday after President Mauricio Macri suffered a surprise defeat in primary elections, the FT says. The Merval stock market index plummeted 48% in USD terms and 38% in ARS terms as investors fled on fears that former president Cristina Kirchner could oust the neoliberal Macri in elections at the end of October. This was the largest daily fall across the 94 markets tracked by Bloomberg since 1950, second only to a 62% collapse in Sri Lanka in 1989. The ARS meanwhile collapsed 30.3% to 65 per USD.

Anti-government protests crippled Hong Kong International Airport for the second day in a row yesterday as riot police were deployed to contain the situation, the New York Times reports. China stepped up its military presence on the Hong Kong border on Tuesday as the clashes intensified, the Independent notes.

Enterprise+: Last Night’s Talk Shows

The nation’s esteemed talking heads are still sunning themselves in Sahel, and otherwise enjoying an extended Eid break. We’ll be back on Sunday with our regular coverage.

Speed Round

Speed Round is presented in association with

Headline inflation falls to four-year low in July despite subsidy cuts: Egypt’s annual headline inflation rate dropped to 8.7% in July from 9.4% in June, its lowest recording in four years, according to Capmas data released on Thursday. To put that into perspective: headline inflation was at 13.5% in July 2018, and at 33% in July 2017. To say that July’s inflation figures broke all expectations would be the understatement of the year, particularly as the government raised fuel prices between 16% and 30% in July and new electricity subsidy cuts coming into effect. Core inflation fell to 5.9% in July from 6.4% in June, according to the central bank (pdf). Bloomberg and Reuters also have the story.

The base effect is touted as the likely reason for the good fortune: A favorable base effect and carry on effect from the previous month’s single-digit inflation has been the most common reason given by analysts for the drop, including by Beltone Financial and Pharos Holding. “It seems that the energy price hikes may have had a smaller effect than many anticipated. But inflation in most other price categories eased too, suggesting that underlying price pressures are weakening,” said William Jackson, chief emerging markets economist at Capital Economics. “It seems government efforts to help the internal market limit food-price increases have been working,” said Angus Blair, chairman of business and economic forecasting think-tank Signet.

Will inflation remain in single digits for the rest of the year: “A favorable base effect and EGP strength will continue to advocate benign annual inflation readings till year end, keeping inflation rates within the CBE’s target zone,” Beltone said in a research note. “We note that domestic fuel prices will be subject to a review by the end of September 2019, where we believe prices will remain unchanged on the back of the strength in the EGP coupled with the low currently oil prices,” they added. Pharos expects inflation to remain in the single digits all through 2019, ending the year with an average of 9.4%.

All this is raising hope for an interest rate cut this month: The drop in July’s inflation has raised hopes that the CBE’s Monetary Policy Committee will cut interest rates for the first time in six months, when it meets on Thursday, 22 August. “It’s great news for the markets because it reinforces hopes of interest rate cuts in August. I think the central bank now has enough room to restart its monetary easing policy going forward,” Naeem Holdings’ Allen Sandeep tells Reuters. “We believe the CBE might cut rates in its upcoming meeting later this month, which will also largely depend on global and emerging market conditions,” said HC’s Sara Saada. Beltone Financial expects the CBE to cut interest rates by 100 bps this month.

Some are more cautious about expecting a rate cut this month. The easing in inflation “increases the chances of a rate cut” this month, but the central bank might be cautious and wait for August figures before acting, said EFG Hermes’ Mohamed Abu Basha. Pharos also sees the CBE holding off on a rate cut this month largely as a result of pressure felt by emerging markets this month.

Reminder: Capex borrowing won’t pick up until interest rates drop. Our survey of nine companies across several industries found that businesses are waiting for interest rates to fall within pre-float levels of 10-13% before ramping up capex borrowing. The central bank’s overnight deposit and lending rates have remained unchanged at 15.75% and 16.75% since February.

IPO WATCH- Fawry IPO ― the first this year ― sees shares up 31% on the first day of trading: The IPO of e-payments platform Fawry got off to a good start on the first day of trading, with shares closing up 31.2% to EGP 8.48 per share on Thursday. The sale of a 36% stake in the company generated EGP 1.6 bn, with the retail offering having been 30x oversubscribed and the institutional offering 15.9x oversubscribed. 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. Fawry is planning to begin operations in microfinance business soon, CEO Ashraf Sabry was cited as saying by Shorouk newspaper during a presser.

Shares likely to continue moving on up, say analysts: Following the “good reception” of the IPO, the stock will likely outperform within its first month of trading, Amr Elalfy, head of research at SHUAA Securities Egypt, told Bloomberg on Thursday. Naeem’s Allen Sandeep sees an “exceptional growth potential” that contrasts with most companies in the same sector in emerging markets that are making losses. The sale is an important step for Fawry’s expansion plans, CEO Ashraf Sabry said on Thursday.

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.

What could this mean for future listings and the state privatization plan? Fawry’s IPO is the first listing on the EGX since Sarwa Capital went public amid the EM sell-off last October that saw its share price fall on its opening day. State companies slated to sell or list shares as part of the state privatization program had held those plans off, with the exception of Eastern Tobacco’s 4.5% stake sale in March. Public Enterprises Minister Hisham Tawfik told us in June that while new listings by state companies are in the cards for September, stake sales by already listed state entities will continue to assess market conditions. Fawry’s IPO had largely been seen as a litmus test for the market.

The good news continues as unemployment rate falls to 7.5%: Egypt’s unemployment rate fell to 7.5% in 2Q2019, down from 9.9% in 2Q2018 and 8.1% in 1Q2019, Planning Minister Hala El Said said at a cabinet meeting on Thursday. With Egypt’s non-oil business activity growing in July and a level of optimism expressed by businesses for the year appearing palpable in the last Markit / Emirates NBD PMI reading, it wouldn’t be too much to expect unemployment to decline further in 3Q2019. The announcement comes almost a week since Capmas released data showing Egypt’s poverty rate rising in FY2017-2018 to 32.5% from 27.8% in 2015, causing some analysts to question whether the reforms have been trickling down to the average person on the street.

Another argument in favor of a rate cut: Analysts see interest rate cuts as part of a wider macro solution. “The situation is still weak and getting weaker in terms of demand, and that’s got to do with interest rates being high,” Naeem Holdings’ Allen Sandeep told Bloomberg last week, adding that “private investments won’t really take off until the cost of capital drops.”

Egypt on track to become “breakout nation,” says Morgan Stanley: Egypt’s reform program, including the currency float and successive rounds of subsidy cuts, coupled with government investment in infrastructure and energy projects, have put Egypt “on track to become a breakout nation,” Morgan Stanley’s head of EMs and Chief Global Strategist Ruchir Sharma said in a report (pdf). “At a time when a secular slowdown in the global economy is lowering the definition of rapid growth… any country at Egypt’s stage of development, with an average income under USD 5k, is doing well if it is growing faster than 5%. And we think Egypt is on track to grow as fast as 6% in coming years.”

Foreigners need to see locals invest first: Sharma sees Egypt’s long-term aim of becoming a low cost manufacturing hub as difficult amid the growing trend towards deglobalization, but notes that the cheap currency and large domestic market have managed to draw foreign direct investment. However, local business executives say foreigners won’t invest heavily before they see local companies expand heavily first, which is yet to happen.

Rate cuts on the way: Despite the reforms sending inflation soaring and depressing consumption, some consumer companies say their sales volumes are starting to recover to pre-float levels. Now with inflation easing, the market consensus is that the Central Bank of Egypt will cut rates by as much as 300 to 400 bps over the next two years, which should provide a further boost to growth, he says.

Watching closely: “All of this has made Egypt a great economic reform story in the eyes of the market, even if the global media still covers it as a regime born in a bloody coup and backsliding toward dictatorship. Markets are never shy about embracing strongmen who generate accelerating growth, but they also sense that economies subject to the whims of an autocrat can be erratic,” Sharma says. He remains optimistic on Egypt, saying it is now moving past fiscal reform to focus on measures to increase private sector competitiveness. “We’ll be watching progress closely, knowing investors will flee at the first sign that El Sisi’s reform discipline is faltering. On balance, however, we think Egypt is on track to become a breakout nation.”

STARTUP WATCH- Pharmacy locator Chefaa secures six-figure seed round: Chefaa, an AI-powered platform for buying pharma products, has secured a six-figure seed funding round from Flat6Labs and 500 Startups, according to Disrupt Africa. The exact amount of funding was not disclosed. Chefaa plans to use the funding to help finance its geographic expansion and the introduction of new products. The startup, which graduated from Flat6Labs’ 10th cycle, had been looking to secure EGP 5 mn in funding last year to expand its activity. The on-demand smart medicine system allows users to scan their prescriptions, locate the nearest pharmacy, order medicine online, and schedule monthly packages in case of chronic diseases.

STARTUP WATCH- Trucking app Trella joins Y Combinator accelerator program: B2B trucking startup Trella has been accepted onto Y Combinator’s summer 2019 accelerator program, according to a press release (pdf). This will give the Cairo-based company access to the US startup accelarator’s network of investors, mentors, and partners. The likes of Airbnb, Dropbox, Stripe, Reddit, and Doordash are members of the YC network of over 2k companies. Trella is a digital trucking marketplace that connects shippers to carriers. It recently raised upwards of USD 600k in a pre-seed funding round led by Algebra Ventures.

INVESTMENT WATCH- EBRD, IFC, OPIC agree to finance USD 252 mn of Lekela’s 250 MW wind farm: The European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the Overseas Private Investment Corporation (OPIC) have agreed to jointly provide USD 252 mn in funding to Lekela Egypt’s 250 MW wind project in West Bakr in the Gulf of Suez, the EBRD said in a statement on Thursday. “The project builds on the success of Egypt's 1.5 GW Benban solar complex, now nearing completion, which is also privately financed and for which EBRD is the largest financier,” the EBRD said. The project will be built under the build-own-operate (BOO) framework.

Work to progress soon on the project: Construction will shortly begin in the project, Lekela said in a statement. The plant will produce over 1,000 GWh per year, providing power to more than 350,000 homes and increasing Egypt’s wind energy capacity by 14% once it is complete in 2021. Siemens Gamesa Renewable Energy will install 96 of their SG 2.6-114 turbines through a turnkey EPC contract and will provide long term maintenance services through a 15-year agreement, Lekela said.

INVESTMENT WATCH- UAE’s Aldar Properties eyes investments in Egypt: Abu Dhabi-based real estate company Aldar Properties is eyeing the Egyptian real estate market as part of its regional expansion plans, CEO Talal Al Dhiyabi told Bloomberg TV on Thursday (watch, runtime: 6:41). “The Egyptian real estate market is another very attractive market we are looking into,” he said. Aldar is also looking at possible investments in Saudi Arabia, though a decision has yet to be made yet, Al Dhiyabi noted.

INVESTMENT WATCH- Enara to invest USD 1 bn in African renewable energy, infrastructure over three years: Renewable energy and infrastructure developer Enara Group is planning to invest up to USD 1 bn in Egypt and the rest of Africa over the coming three years, founder and chairman Sherif El Gabaly told Al Masry Al Youm. Enara secured a USD 200 mn loan from international financiers, including the European Bank for Reconstruction and Development, the African Development Bank, and the World Bank, he added, without providing further details. We noted in June that the company is preparing to break ground on USD 600 mn-worth of solar projects in El Wadi El Gedeed, which will have a total production capacity of 600 MW.

DISPUTE WATCH- Arbitration court rules against Nostra Terra in Egypt oil payments dispute: Nostra Terra Oil & Gas has been found in default of the joint operating agreement (JOA) governing its East Ghazalat joint venture in Egypt with North Petroleum International, the company said on Monday. The London Court of International Arbitration ruled against the UK-based oil and gas company, finding subsidiary Nostra Terra Inc. in default for the non-payment of November and December 2015 cash calls to North Petroleum of around USD 1.06 mn, along with an estimated USD 125k in interest. The company’s failure to make the payments could result in the transfer of Nostra Terra’s 50% stake in the East Ghazalat concession to North Petroleum. Nostra Terra has described the concession as “non-core” to its operations. The company is considering seeking damages from North Petroleum for allegedly breaching the JOA.

Background: The case was referred to the London Court of International Arbitration in April, at which time we reported that Nostra Terra was hoping to reach a settlement with North Petroleum International. Nostra Terra’s subsidiary Sahara Resources has held a 50% non-operating interest in the East Ghazalat concession since June 2017, when Nostra Terra acquired Echo Energy’s 25% stake in the concession for USD 500k.

EARNINGS WATCH- Sodic net income grows 9% y-o-y in 2Q019, revenues double: Sodic recorded a 9% y-o-y increase in net income to EGP 175 mn in 2Q2019, the company said in an earnings statement (pdf) on Thursday. Revenues for the quarter doubled y-o-y to EGP 1 bn as net contracted sales grew 11% growth to EGP 1.4 bn. Revenue growth was driven mainly by deliveries in the Villette project, which contributed to 44% of the delivered value during the quarter. Sodic released EGP 2 bn-worth of new launches to the market during the first six months of 2019. These were mainly in the Allegria Residences, EDNC and V residences, which together accounted for 70% of the new launches. “The launch plan for the year is heavily weighted to the second half with Al Yosr and the 500 acre coming online towards the end of the year,” the company said. Net contracted sales in 1H2019 dipped slightly to EGP 2.3 bn from EGP 2.5 bn in the same period last year.

EFG Hermes net income surges 49% y-o-y in 2Q2019: EFG Hermes reported net income of EGP 304 mn in 2Q2019, up 49% y-o-y from EGP 203 mn a year earlier, the investment bank said in its earnings release (pdf). Revenues rose 13% y-o-y to about EGP 1 bn during 2Q2019. The surge in profits came on the back of revenue growth in its non-banking financial businesses, a single digit increase in operating expenses, and lower taxes.

Tanmeyah boosting revenues: Fees and commissions, which represented 75% of revenues during the quarter, rose 15% y-o-y to EGP 784 mn, driven by growth in its microfinance outfit Tanmeyah. Revenues in its non-banking financial business rose 73% y-o-y during the quarter to EGP 322 mn, with Tanmeyah’s revenues growing 83% to EGP 275 mn. Sell-side revenues increased 4% y-o-y to EGP 364 mn in 2Q19 on higher brokerage revenues. This came in spite of a 17% y-o-y fall in investment banking revenues due to a stronger comparable quarter. Buy-side revenues declined 31% y-o-y to EGP 98 mn in 2Q19 as asset management revenues declined on lower incentive fees.

Real estate developer Madinet Nasr Housing & Development (MNHD) reported net income of EGP 511.3 mn during 1H2019, down 13% y-o-y, the company said in a bourse filing (pdf). Revenues also fell 14.1% y-o-y during 1H2019 to EGP 1.1 bn, due to postponing the launch of new phases in Taj City to 3Q, the company said in its earnings statement (pdf).

Telecom Egypt’s profits plunge 60% y-o-y in 2Q2019: State-owned carrier Telecom Egypt reported net income of EGP 516 mn 2Q2019 profits, a 60% fall from EGP 1.3 bn a year earlier, the company said in its earnings statement (pdf). The company blamed the implementation of its early retirement program for the drop in profits. Excluding the program, net income would have come in at EGP 1.3 bn on the back of forex gains that concealed the decline in investment income from Vodafone. Revenues grew 24% y-o-y during 1Q2019 to EGP 6.6 bn.

REGULATION WATCH- Egypt’s FRA gives financial advisors six more months to comply with 2018 regs: The Financial Regulatory Authority (FRA) has given the companies on its list of approved financial advisors and analysts an extra six months starting 28 August to comply with new regulations introduced last year, according to a recent decision (pdf). Companies that need more time to comply will have to submit an action plan by no later than 30 September, and meet all recent requirements (pdf) before the end of February 2020.

Background: The regulations introduced in July 2018 established a list of FRA-certified advisory firms and research houses to conduct financial valuation studies. They require firms to renew their registration on the list every three years. They will be removed from the registry and risk losing their operating licenses if they are found to be in violation of any laws. The move was meant to boost market transparency and sought to align policies with recent legislation such as the Capital Markets and Companies Acts.

CABINET WATCH- Madbouly Cabinet approves amendments to MCDR Act: The Madbouly Cabinet approved on Thursday amendments to the Misr for Central Clearing, Depository & Registry (MCDR) Act, according to a cabinet statement. The statement gave no details on the amendments. If we were to put our speculative caps on we could say that this might have to do with short selling, as MCDR will provide a platform for traders and brokerage firms to use for short selling under changes to recently-issued short selling regulations. Short selling transactions are due to hit the EGX in 3Q2019, FRA deputy head Khaled El Nashar said earlier last month. This could also have something to do with the launch of derivatives trading, as MCDR and the EGX have been working on regulations and infrastructure needed to launch a derivatives market.

The Madbouly Cabinet appeared preoccupied with higher education in its last meeting, having approved four directives to build faculties at various universities across Egypt.

LEGISLATION WATCH- El Sisi ratifies key legislation: President Abdel Fattah El Sisi has ratified the Mineral Resources Act, which introduces additional incentives for companies to invest in the mining sector. The amendments expand the size of concession areas, grant a new authority the power to issue licenses for areas of unlimited size, and allow companies to renew their licenses for more than one term. Separate contracts will be used for exploration and excavation areas, and royalties will be capped at 20% of the value of annual production. You can read more details about the amendments here.

The president also signed off on amendments to the Economic Court Act, which widens the scope of the nation’s economic courts to cover new business and finance activity, and expand the courts’ jurisdiction to cover more cases, including those pertaining to new non-banking financial services, money laundering, and bankruptcy, Al Shorouk reported. The changes will also allow for cases to be filed electronically and certain procedures to be completed online.

El Sisi also ratified amendments to a law regulating the Bar Association. The changes will provide attorneys a higher degree of protection in court, increase the association’s revenues, and set up an academy to train fresh law graduates.

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Egypt in the News

The IMF poses a bigger threat to the Egyptian government than radical Islamists, David Rosenberg writes in Haaretz. The austerity measures conditioned on the fund’s USD 12 bn loan might have spurred economic growth and made a dent in the government’s budget deficit, but this has yet to trickle down to the broader population and has instead led to record poverty levels.

Jennifer Lopez and her outfits vs. BDS and Samir Sabry: Jennifer Lopez’s concert in New Alamein last Friday saw “few attendees” after BDS Egypt campaigned against the global pop star for her performance in Tel Aviv earlier this month, reports the Jerusalem Post. And those who did attend were apparently unhappy with some of her outfits at the concert, which propelled overzealous Egyptian lawyer Samir Sabry to file a lawsuit against the singer for performing “semi-naked,” and is suing several women ministers who attended the concert, Al Bawaba reports. Sabry was one of the lawyers to file obscenity charges against actress Rania Youssef for appearing in a revealing dress last year.

Other headlines making the rounds during the break:

  • University graduates in Egypt are increasingly turning their vehicles into mobile coffee vans, seizing the chance to set up small, profitable businesses in the face of high unemployment, Xinhua reports.
  • New ancient Egypt special documentary airs on NatGeo: A series of films documenting ancient Egypt titled Egypt Specials premiered on National Geographic Abu Dhabi on Thursday, according to Digital Studio Middle East.

Diplomacy + Foreign Trade

Cyrill Nunn has been named as the new German ambassador in Egypt, the German embassy said in a statement on Thursday. Nunn previously represented Berlin in Pakistan and Iraq before his latest appointment in Cairo.

Foreign Minister Sameh Shoukry discussed increasing trade and investment between Cairo and Baghdad in a phone call with his Iraqi counterpart Mohamad Alhakim, the Iraqi Foreign Affairs Ministry said in a statement. This came a week following Shoukry’s visit to Baghdad for trilateral talks with Alhakim and the Jordanian foreign minister.

Sudan’s civilian coalitions discuss constitutional declaration in Cairo: A meeting between the two major Sudanese civilian coalitions to discuss a dispute over the recent constitutional declaration took place in Cairo over the past two days, the Foreign Ministry said in a statement. The Forces of Freedom and Change (FFC) and the Sudan Revolutionary Front (SRF) alliances “exchanged views and agreed to acquaint the FFC leaders with the outcomes of the meeting,” the statement said. The Sudanese opposition signed a constitutional agreement with the military earlier this month that could pave the way for a new transitional government and elections in late 2022.

Energy

Egypt looks to increase output of crude oil to 690k barrels per day by end of 2019

Egypt is aiming to increase its daily production of crude oil to 690k bbl by the end of 2019, up from the current average output of about 630k bbl/d, MENA reports. Oil Minister Tarek El Molla said that plans to increase oil production will focus on testing new geological structures and seeking new sources of crude oil in the Western Desert, Gulf of Suez, and Mediterranean.

Basic Materials + Commodities

Indian tea exporters eyeing Egypt as alternative to Pakistani market

India’s tea exporters are eyeing Egypt and Iraq as possible alternatives to the Pakistani market, the biggest tea importer from India, after recent upheavals in Kashmir led Pakistan to cut trade relations with India, the Economic Times reported.

Tourism

Orascom Development Egypt plans hotel expansions in El Gouna

Real estate developer Orascom Development Egypt is planning to add 200-250 hotel rooms in the Red Sea resort of El Gouna in 2020, Investor Relations Manager Sarah El Gawahergy told Al Mal. Orascom plans to inaugurate the Casa Cook Hotel in October and begin operations at the Arena Inn after renovations this summer.

Automotive + Transportation

EgyptAir set to receive sixth and final Boeing Dreamliner

EgyptAir will receive the sixth and final Boeing 787-9 Dreamliner today as part of a USD 6 bn agreement signed in late 2017 to buy 45 new planes to upgrade its fleet, Al Shorouk reported. The agreement is believed to be the biggest ever made by the company.

Law

Matouk Bassiouny & Hennawy advise Match Group on Harmonica acquisition

Matouk Bassiouny & Hennawy acted as co-counsel with Latham & Watkins LLP to Match Group on its acquisition of Egyptian matchmaking app Harmonica, according to an emailed statement. The transaction is set to close by the end of the year.

Al Tamimi & Co advising Al Nasr for Coke on USD 150 mn loan

Al Tamimi & Co acted as legal adviser to Al Nasr for Coke & Chemicals on its USD 150 mn loan from local banks, unidentified sources tell Al Mal.

Egypt Politics + Economics

Interior Ministry identifies Hasm member as perpetrator of Cairo car bombing

A member of the Hasm terrorist group was identified as the perpetrator behind last week’s deadly car bombing outside the National Cancer Institute, the Interior Ministry said in a statement on Thursday. Police killed 15 militants in two raids connected to the bombing, according to the ministry.

CBE’s Tarek Amer graded A- in Global Finance Central Banker 2019 report

Central Bank of Egypt (CBE) Governor Tarek Amer earned an “A-” in Global Finance’s 2019 Central Banker Report Card (pdf), up from B+ in last year’s edition. The annual report grades the governors of 94 countries, as well as the European Union, the Eastern Caribbean Central Bank, the Bank of Central African States and the Central Bank of West African States. Topping the “A” list was Australia’s Philip Lowe, followed by Honduras’ Wilfredo Cerrato.

On Your Way Out

Patriotism courses for Egyptian expats: The Immigration Ministry is offering patriotism courses and special camps without charge to young Egyptians and academics studying abroad to ensure they are not “intellectually influenced” by “a war of rumors” or “turned against their homeland,” Al Monitor reports. An unnamed government source said that the course content focuses on highlighting state achievements and national projects. The courses — comprising eight two-hour sessions — are optional for most, but reportedly compulsory for some Egyptian embassy employees, so that they can “communicate efficiently with Egyptian expats.”

The Market Yesterday

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EGP / USD CBE market average: Buy 16.50 | Sell 16.60

EGP / USD at CIB: Buy 16.48 | Sell 16.58
EGP / USD at NBE: Buy 16.51 | Sell 16.61

EGX30 (Thursday): 14,180 (+2.2%)
Turnover: EGP 12.8 bn (1686% above the 90-day average)
EGX 30 year-to-date: +8.8%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 2.2%. CIB, the index’s heaviest constituent, ended up 1.2%. EGX30’s top performing constituents were Palm Hills up 6.6%, Elsewedy Electric up 6.2%, and Egyptian Resorts up 5.8%. Thursday’s worst performing stocks was Ibnsina Pharma down 0.4%. The market turnover was EGP 12.8 bn, and foreign investors were the sole net buyers.

Foreigners: Net Long | EGP +824.8 mn
Regional: Net Short | EGP -249.8 mn
Domestic: Net Short | EGP -575.0 mn

Retail: 14.8% of total trades | 5.7% of buyers | 23.9% of sellers
Institutions: 85.2% of total trades | 94.3% of buyers | 76.1% of sellers

WTI: USD 56.66 (-0.77%)
Brent: USD 61.30 (+4.66%)

Natural Gas (Nymex, futures prices) USD 2.16 MMBtu, (+0.61%, September 2019 contract)
Gold: USD 1,511.20 / troy ounce (-0.19%)

TASI: 8,550.23 (+0.79%) (YTD: +9.24%)
ADX: 5,097.17 (-0.42%) (YTD: +3.70%)
DFM: 2,837.96 (+0.24%) (YTD: +12.18%)
KSE Premier Market: 6,718.23 (-0.37%)
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MSM: 3,861.51 (+0.60%) (YTD: -10.69%)
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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.

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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