Monday, 7 October 2019

Non-oil business activity continues to stall in September

TL;DR

What We’re Tracking Today

Welcome back from a slightly extended weekend break: We’re picking up where we left off on Thursday with another bumper issue. T’was a busy weekend indeed.

The Ruskies are here for business: Russian Trade Minister Denis Mantrov landed in Cairo on Thursday at the head of a business delegation that will be in town until 10 October for a joint forum to discuss cooperation in various fields. Trade Minister Amr Nassar met Mantrov on Thursday ahead of the inauguration of the forum, which will see participation from 110 SMEs and large firms, according to a cabinet statement.

EAEU freetrade talks tomorrow: The third round of negotiations for a freetrade agreement between Egypt and the Eurasian Economic Union (EAEU) will be held in Cairo tomorrow.

Monthly inflation figures for September are due at the end of the week. Inflation cooled for the second consecutive month in August to 7.5%, marking the lowest reading in six-and-a-half years.

The Information Technology Industry Development Agency (ITIDA) is getting involved in the GITEX Technology Week, which kicked off yesterday at the Dubai World Trade Center. The event wraps up on Thursday, 10 October.


Stat of the morning: 8%. That’s how many women occupy senior roles in private equity firms around the world, Sabrina Willmer writes for Bloomberg. Most investment outfits only have one or two women in senior positions, despite there being “dozens” of these positions. Who came out on top? “Bloomberg’s analysis found that Carlyle Group LP put the greatest number of women in senior investment roles, 15, while TPG had the biggest proportion, with women accounting for 14% of its team.”

Volatility in EM currencies is set to rise as the US and China resume high-level trade talks this week and investors await clues from Federal Reserve Chairman Jay Powell about whether the central bank will make a third consecutive rate cut when it meets later this month. Bloomberg reports that the 50-day moving average of JPMorgan’s EM currency volatility index is close to moving above the 200-day average. The last time this happened in February 2018, volatility hit two-and-a-half-year highs in September that year.

HSBC could slash 10k jobs: A further 10k people could be made redundant at HSBC as interim CEO Noel Quinn pushes ahead with a dramatic cost-cutting plan, the Financial Times reports. The bank already announced plans to cut 4.7k jobs in August amid what it said was “an increasingly complex and challenging global environment.”

Renewable energy stocks have been outperforming fossil fuel shares this year on the back of a sharp drop in wind and solar energy costs, with the iShares Clean Energy ETF’s 32% rise “streaking far ahead” of the Vanguard Energy ETF, according to the Financial Times. Renewables are also benefiting from global monetary easing, since wind and solar projects require large capital but have lower operating costs. The rally has continued in spite of a decline in investment during 1H2019, caused by falling government subsidies for clean energy. The increasing prominence of climate change as a global issue has helped investor sentiment remain positive.

Turkey is due to begin drilling for oil and southwest of Cyprus, despite Greek Cypriot authorities having awarded exploration rights in the area to Italian and French companies, Reuters reports. While offshore rights have long been a topic of debate between Ankara and Nicosia, Turkey’s recent drilling of two wells has provoked strong protests and EU sanctions, heightening tensions in the region.

Egypt has issued a statement in support of Cyprus and its sovereignty, stating that unilateral actions that violate Cypriot rights threaten security and stability in the region.

Are the walls starting to close in around Trump? The small matter of facing an impeachment investigation became all the more treacherous for The Donald yesterday after a second whistleblower came forward to corroborate damaging claims regarding his contact with the Ukrainian president. Trump is alleged to have pushed President Zelensky to investigate political rival Joe Biden and his son over potential corruption. The Associated Press has more.


Startupbootcamp graduate El Gameya wins Al Baraka Bank competition at FinX: El Gameya, a mobile app based on the Rotating and Savings Credit Association model, won the P2P Syndicate Finance Prize at the FinX Awards ceremony held in Dubai last week, our friends at Pharos told us over the weekend. El Gameya is one of 10 startups that recently graduated from Startupbootcamp Pride Fintech Cairo accelerator. Startupbootcamp was also named the MENA FinTech Accelerator of the Year.

Enterprise+: Last Night’s Talk Shows

The nation’s talking heads have had plenty to keep themselves occupied over the past two nights:

FinMin warns against violating minimum wage decision: Finance Minister Mohamed Maait has called on all public bodies to commit to the prime minister’s decision to raise the minimum wage, Assal also noted (watch, runtime: 02:32). Maait asked organizations that are financially incapable of meeting the decision to request a raise in income to cover its employees’ salaries.

Egypt always prevails against “dangerous waves” mostly coming from abroad, President Abdel Fattah El Sisi said on Sunday in a televised speech to commemorate the 46th anniversary of the 6th of October War (watch, runtime: 10:05). “Throughout the past decades, war has taken different shapes and forms until it now targets the peoples' morale, and enters citizens' houses through new media platforms,” he said.

US urges for agreement between Nile neighbors to satisfy all sides: A US statement calling for an agreement between Egypt, Ethiopia, and Sudan over the Grand Ethiopian Renaissance Dam (GERD) was unsurprisingly a topic of discussion on Saturday with Al Hayah Al Youm’s Lobna Assal (watch, runtime: 04:49). We have more on this in this morning’s Speed Round, below.

PM looking at ways to boost industrial production: Prime Minister Moustafa Madbouly issued a decision for 19 new industrial chambers to be set up, Hona Al Asema’s Reham Ibrahim said (watch, runtime: 05:11). The new chambers would include ones dedicated to handicrafts, printing, packaging, woodwork, furniture manufacturing, among other things.

Mo Salah’s injured ankle also earned some airtime last night with Ibrahim, who noted that the Liverpool forward had to sit out the rest of Saturday’s match against Leicester City (watch, runtime: 02:48).

Speed Round

Speed Round is presented in association with

Non-oil business activity improves marginally in September, but remains in contraction territory: Egypt’s non-oil private sector continued to contract in September, albeit at a slightly lower rate than August, as output fell for the second consecutive month, according to the Markit / Emirates NBD purchasing managers’ index (PMI) (pdf). The PMI gauge rose fractionally to 49.5 in September from 49.4 in August, indicating a slight m-o-m improvement. A reading above 50.0 indicates that activity is expanding, while a reading below that mark means it is contracting. So far, Egypt’s PMI has been in expansion territory only twice this year.

Export orders increased for the third consecutive month, but domestic demand weakened at an accelerated pace. The increase in foreign sales was, however, “softer than in August,” said David Owens, economist at IHS Markit. The overall decline in output pushed up input inventories, which kept firms’ “purchasing activity broadly unchanged.”

Input cost inflation still rising, but not as much as previous months: Businesses experienced higher input costs last month, with panelists reporting a rise in the prices of fuel, energy, metal, and some raw materials. “However, an improvement in the exchange rate against the USD helped to ease inflationary pressure.” The weaker rise in input charges pushed the increase in output charges to decline in tandem, and some firms even lowered their fees on the back of reduced demand.

On the bright side, the increase in employment last month was the largest seen in 13 months. Staff costs also rose “at the quickest rate since last December, as companies looked to improve employee satisfaction.” Despite the expanding labor force, firms reported rising backlogs for the sixth month running.

Business sentiment at near-two-year low: “Expectations for future business activity were down markedly from the 18-month high in August, with September data indicating the weakest level of positive sentiment since October 2016.” That said, businesses expect improved activity over the next 12 months.

Gov’t announces long-awaited decision to lower natgas prices for industry, but only for a few sectors: A ministerial committee lowered on Thursday the price of natural gas for the cement, metallurgy, and ceramics industries after repeated calls by manufacturers, cabinet said in a statement. The price for cement factories was slashed to USD 6 / mmBtu, down from USD 8. Metallurgy and ceramic manufacturers, meanwhile, saw their rates drop to USD 5.5 from USD 7. The committee will meet every 6 months to review the prices. Manufacturers have been pressuring the government for years to cut natural gas prices saying that it is affecting their product prices and thus sales which is causing them to work under their full production capacity.

By offsetting the recent surge in operating costs, the decision bodes well for industrial output and exports of manufactured goods, both the head of the Federation of Egyptian Industries (FEI) Mohamed Elsewedy and the export council of building materials and metallurgy industries Waleed Gamal El Din said, according to a local press report.

A small relief for steelmakers: The reduction will lower the cost of producing a tonne of steel by as much as EGP 425for long-product factories,and help resolve a dispute between long-product and rolling mills players caused by the imposition of 15% anti-dumping duties on imported steel billets, Gamal El Garhy, head of the metallurgical industries chamber at the FEI, said. Steel companies slashed prices last week amid uncertainty caused by a delay in ruling on appeals filed by the State Lawsuits Authority and long-product steel makers against the suspension of the billet tariffs.

But high steel tariffs are still needed -Pharos: “We strongly believe that the government still needs to impose a hefty tariff on billets and finished steel imports north of 42% to maintain current prices and as high as 53% to improve margins, taking into account both the natural gas price reduction and the recent cut in local steel prices,” Pharos wrote in a research note on Thursday. This is far higher than the 15% tariff on iron billets and the 25% duty on rebar that was rejected by the administrative court in July. This is because any cost savings gained by the reduced gas price will be outweighed by the drop-off in revenue caused by falling steel prices.

Cost savings for ceramics may be diluted by oversupply: The research note stated that the tile manufacturing industry may not benefit from the cost as “oversupply issues” may lead to a fall in the selling price. However, the move might improve the competitiveness of Egyptian ceramics abroad, ceramics manufacturer Alfa Ceramic Chairman Wagih Besada said.

No gains for cement: The weakened cement sector will see no cost savings as a result of the reduction as most factories use an energy mix of coal and mazut fuel oil, head of the cement division at the FEI Medhat Estafanos said. Pharos also said that South Valley Cement is the only company that will benefit, but nonetheless continue to generate negative margins.

Gov’t cuts fuel prices for first time since 2016: The government has revised down prices for all grades of fuel by EGP 0.25 per liter on the back of lower average crude prices and a stronger EGP, the cabinet said in a statement. The committee in charge of setting prices under the automatic fuel pricing mechanism lowered the price of 95-octane fuel to EGP 8.75 from EGP 9 per liter, 92-octane to EGP 7.75 from EGP 8.00 per liter, and 80-octane to EGP 6.5 from 6.75 per liter. Mazut fuel oil for use in factories was, meanwhile, lowered by EGP 250 to EGP 4,250. The rates took effect at midnight on 4 October, and will last through 4Q2019. The committee will next convene at the end of December to decide on 1Q2020 rates.

Decision beats expert expectations: Analysts had expected the government to leave fuel prices unchanged for 4Q2019, citing a strong EGP and the expectation for relatively stable global oil prices. Crude prices averaged USD 62 per barrel last quarter, below the USD 67 mark used in the state’s FY 2019-2020 budget. The USD/EGP rate also saw an average of 16.60. This is the first time fuel prices have been cut since Egypt began phasing out fuel subsidies in 2016. The automatic fuel price mechanism, which came into effect in April, allows the government to decide on fuel prices every quarter based on global oil prices and the USD exchange rate.

M&A WATCH- United Bank sale moving forward: The CBE has appointed one local and one foreign lead advisor on the expected sale of state-owned United Bank, which is “moving forward,” CBE Governor Tarek Amer told reporters at a presser on Thursday, according to Reuters. Authorities should approve the banks’ names within one week, he added.

The contenders: The local press reported earlier this year that three consortiums were formed to compete for the role. The consortiums include one comprising EFG Hermes and New York-based Evercore, one Beltone Financial and Rothchild & Co, and another CI Capital and Perella Weinberg Partners. Sources also said at the time that the sale — the size of which will depend on the chosen investor — has attracted substantial interest from foreign institutions, including a potential offer from Evercore. The central bank owns 99.9% of United Bank’s shares, having created the institution through the merger of a number of smaller institutions.

Amer also touched on changes that are on the way for the banking sector under the proposed Banking and Central Bank Act, which we unpacked on Thursday morning following its approval by cabinet. Among the highlights from the presser:

  • The CBE is hoping to transform Egypt into a regional hub for financial services, Amer said, calling on banks to diversify their portfolios by investing in a wider range of debt instruments and expand both regionally and internationally.
  • New digital banks: The central bank is working with four foreign advisors to set up digital banks “for the first time in Egypt,” CBE sub-governor for payment systems and business technology Ayman Hussein said.
  • A EGP 2 bn holding company: The CBE is also launching an EGP 2 bn holding company before the end of the year to assist the government’s financial inclusion and digitization efforts, Hussein said. The company will start off with EGP 500 mn in paid-in capital.
  • Banks need not worry about capital requirement hike: The shareholder rights, paid-in capital, and reserves of as many as 28 commercial banks are already sufficient to allow them to meet 10x hike in the minimum capital requirement to be stipulated by the act through a few “simple procedures,” deputy governor Gamal Negm said.
  • New professional licenses for banking sector: The act would require high-ranking bank officials to obtain a new type of CBE-issued professional license.

Non-loan IMF program still under consideration but nothing conclusive yet -Maait: Egypt is still looking at securing a non-loan program with the IMF, but future cooperation with the fund could also continue “under any form,” Finance Minister Mohamed Maait told Bloomberg TV on Thursday (watch, runtime: 2:47). The minister said that having a formal agreement with the IMF would be beneficial for investor sentiment and would provide “some sort of comfort” on Egypt’s economy. Maait said back in June that the government was hoping to close in on an agreement by October, but an IMF official said in July that any discussions on future engagement were contingent on the completion of Egypt’s current program of economic reforms.

Egypt’s priority remains staying the course of reform: IMF program or not, Maait stressed that the government is committed to pushing ahead with reforms and continuing to see the Egyptian economy “moving in the best way.” CBE Governor Tarek Amer said much the same at a presser on Thursday, telling reporters that Egypt is mainly looking to cooperate with the fund if it can provide further assistance with structural reforms, according to Reuters’ Arabic service.

The government is focusing on spurring private sector investments to create jobs outside the bloated public sector, Maait also told Bloomberg. He said he hopes to see the private sector account for 70% of Egypt’s GDP within 5-7 years, and that he would consider offering more incentives to meet this target. The minister stressed that creating jobs is a better antidote to the negative impact of reforms than working to shore up social safety nets.

What the IMF has to say: The IMF believes that Egypt has room for improvement when it comes to governance, incorporating women and the youth in its labor force, and curbing the government’s role in the economy, Egypt mission chief Subir Lall told Reuters. Lall did not confirm or deny whether the fund is officially engaged in talks with Egypt over a post-loan program.

Bloomberg, meanwhile, sees declining FDI as Egypt’s biggest economic challenge. “For all the money pouring into Egyptian bonds, it’s the trickle of longer-lasting commitments that’s keeping the economy vulnerable and feeding the discontent that spilled into last month’s protests against the government,” Paul Wallace writes. Net FDI fell in FY2018-2019 to USD 5.9 bn from USD 7.7 bn the year prior.

M&A WATCH- Cairo 3A Poultry is close to buying a majority stake in Pyramid Poultry for EGP 500 mn, sources close to the matter told the local press. Negotiations have reportedly reached the final stages, and the acquisition is expected to be completed within a month. Cairo 3A plans to expand Pyramid Poultry following the acquisition.

Advisors: Matouk Bassiouny & Hennawy is acting as legal advisor for Cairo 3A while CI Capital is acting as financial advisor for Pyramid Poultry andAl Tamimi & Co as its legal advisor.

INVESTMENT WATCH- Majid Al-Futtaim Group (MAF)’s Carrefour aims to invest around EGP 500 mn in Egypt next year opening three new hypermarkets and 24 new supermarkets, said Country Manager Jean Luc Graziato, according to the local press. The company already has 47 branches in the country, and is expected to open 13 new stores before the end of 2019. Carrefour said in April that it would invest around EGP 700 mn in opening 20 new outlets in 2019, including the City Center Almaza that opened at the beginning of October. The company after 2020 will be looking at opening branches in the new capital, Graziato said, explaining that negotiations on the size of these coming projects are ongoing. He expects sales to grow by 10% both this year and in 2020.

DISPUTE WATCH- Egypt and UAE’s Emaar have finally settled their beef over Uptown Cairo: Property developer Emaar Misr has signed a final settlement with the Egyptian government to resolve a two-year dispute with state-owned El Nasr Housing over the Emirati company’s alleged failure to develop 3 mn sqm of land allotted to it in 2005, according to a cabinet statement. The settlement will see both sides drop all arbitration cases against each other and Emaar pay a EGP 100 mn cash settlement in exchange for being granted time to complete the Uptown Cairo project. Under the agreement, Emaar will be required to complete Uptown before mid-2028.

Fresh Emaar investments in the pipeline? Emaar Properties boss Mohamed Alabbar was full of praise for the government for clearing the dispute, saying that the government’s drive to resolve investor disputes is conducive to improving Egypt’s investment climate. Alabbar also said Emaar is looking at new potential investments in several of Egypt’s new cities, which he said are “appealing” investments. The government in July said the two sides had reached a settlement agreement, but reports emerged last month that the two sides went back to the drawing board. Emaar said in an EGX disclosure the day before signing Thursday’s settlement agreement that legal procedures had been stalled for four weeks.

IPO WATCH: Galina-Agrofreeze approaches Pharos, EFG to list two of its subsidiaries on the EGX: Galina-Agrofreeze Fruits & Vegetables has approached investment banks, including Pharos Holdings and EFG Hermes, to manage the planned listing of two of its subsidiaries on the EGX, Chairman Abdel Wahed Soliman tells Al Mal. Galina has yet to determine the size and values of the listings, which the company will decide with the investment bank it taps to quarterback the transaction.

The IPO has been in the making for a year: Galina Company for Vegetables and Frozen Fruits will be listed first, followed by Galina for the Production of Fruit and Tomato Concentrates. Galina has been looking to list in the EGX for the past year when it planned to delist from the small- and mid-cap stock exchange (Nilex).

M&A WATCH- Ebtikar acquires additional 4.8% stake in Masary: Ebtikar for Financial Investment, a joint venture between BPE Partners and MM Group, has reportedly acquired an additional 4.8% stake in e-payments firm Masary, unnamed sources from Ebtikar told the local press. The sources did not disclose the value of the transaction, which brings Ebtikar’s stake in Masary to 59.7%. Ebtikar is reportedly planning to raise its stake in Masary yet again this month, the sources said, without providing additional information. Ebtikar’s IR manager Ashraf Ghannam had told the local press last month that the company is not angling for full ownership of the e-payments firm. Ebtikar had acquired a 10% stake in Masary in July, and another 9.1% stake in September.

Construction in Egypt is set to expand by an average of 11.3% each year between 2019 and 2023, data and analytics company GlobalData predicts in its 3Q2019 Global Construction Outlook report. Construction is being driven by Cairo’s urban development program, which could involve building 23 new cities, said economist Yasmine Ghozzi. The urbanization drive comes as Egypt’s overall economic growth is expected to accelerate in the coming two years, fueled by a boom in natural gas production, a recovering tourism sector, and an ambitious renewable energy program.

MENA, sub-Saharan Africa will also see improved growth: Sectoral growth across the MENA region is expected to reach 4.9% by 2022-2023, up from the 3.3% growth forecast for 2019. If oil prices are relatively high, investment in infrastructure projects ― many related to transport ― will be a key driver of growth, with Saudi Arabia leading the pack. In sub-Saharan Africa, growth will also accelerate, with Ethiopia set to see a marked expansion in its construction industry and Nigeria maintaining steady growth.

GERD talks grind to a halt: Talks between Egypt, Ethiopia and Sudan over the filling of the Grand Ethiopian Renaissance Dam (GERD) have once again reached a deadlock, with a two-day meeting in Khartoum between the countries’ irrigation ministers wrapping on Saturday without any substantial progress. President Abdel Fattah El Sisi reiterated that Egypt is committed to protecting its rights to Nile waters. Sudan’s water resources minister said that all three parties would continue consultations to resolve points of difference, and to determine the date of their next meeting.

Is the US going to mediate? Egypt has called for international mediation to help reach a “fair and balanced” agreement, and Ittihadiya spokesman Bassem Rady later said it was hoped that the US would play an instrumental role. Ethiopia appeared to reject the idea, claiming that adding a mediator would further extend the protracted negotiations. The US had earlier reiterated its support for negotiations that would help the three countries reach a “cooperative, sustainable, and mutually beneficial agreement” on how to share the Nile water equitably.

The story is also getting coverage in the foreign press: Associated PressReuters.

LEGISLATION WATCH- El Sisi ratifies retail stores bill: President Abdel Fattah El Sisi ratified the retail stores bill on Thursday, according to the Official Gazette. The legislation imposes new licensing rules on the retail sector, and requires unlicensed shop owners obtain a license within a maximum period of five years.

MOVES- Habemus SWF chief executive: The board of directors of Egypt’s EGP 200 bn sovereign wealth fund tapped Ayman Soliman (LinkedIn) as the fund’s new chief executive on Thursday, according to a statement (pdf). Soliman, who will be at the helm of the SWF for a three-year term, was most recently the CEO of Gemini Holding, a position he has held since January 2011. He also spent four years as a senior manager at Orascom Telecom Holding, following a five-year stint at EFG Hermes, including one year as vice president of the investment bank’s private equity division.

MOVES- Centamin CEO Andrew Pardey will retire after almost four years in the role, the company said last week. Pardey will stay on at the gold mining company for the next 12 months while it searches for a new CEO. His departure comes after a challenging 12 months for the company, which has struggled to increase the output of its Sukari gold mine in Egypt, the FT notes.

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Egypt in the News

Cybersecurity led the conversation on Egypt in the foreign press over the weekend: News of an alleged campaign to plant software in apps downloaded from the Google Play Store to track the movements of Egyptian rights activists and journalists is generating significant coverage (New York TimesRegisterArs TechnicaCyberscoop). Forbes, however, questions whether the move was actually led by the government, saying that its “amateurish” nature indicates that it may have been “a ‘false flag’ operation using Egypt as a foil.”

In other cyber news, Facebook has taken down two more pages based out of Egypt for “inauthentic” behavior, the company disclosed in a statement.

Other headlines to keep on your radar this morning:

  • Policy reforms are underway to balance austerity measures following recent demonstrations, says Ahmed Aboudouh in the Independent.
  • A protester from Damietta talks to the Independent about his reasons for taking to the streets in September.
  • The New York Times looks at tightened security measures in Egypt amid calls for renewed protests.

Energy

Egypt’s NREA to hike price of renewable electricity sold to EETC

The government will increase the price of electricity sold by the New and Renewable Energy Authority to the Egyptian Electricity Transmission Company (EETC) by EGP 0.11 per kWh to EGP 0.66 per kWh next year, sources from the Electricity Ministry told Al Mal. This is the penultimate increase under a plan to gradually increase prices to match the real cost of production. Prices were last hiked in August.

Corrected on 7 October 2019

Date was corrected to “next year” from “has increased” and article title to “hike” from “lowered.”

Egypt close to signing USD 300 mn contracts for solar power projects

The National Renewable Energy Authority (NREA) is close to inking contracts worth USD 300 mn for solar power projects with a total capacity of 250 MW during the FY 2019-2020 fiscal year, authority head Mohamed El Khayat told Al Shorouk. The NREA is currently studying requests from investors to implement 2.5 GW-worth of solar power projects, and three offers for 250 MW wind projects with EUR 260 mn in investments, El Khayat added. The authority is now working on linking three more Benban plants to the national grid, having already connected 29 over past years.

Health + Education

Nile Valley Company to develop 126 clinics, nine hospitals

The Health Ministry has reached an agreement with the Nile Valley Company to develop 126 main clinics, nine hospitals and one medical complex in Suez, Ismailia, Luxor and Aswan governorates, the local press reported. The move comes as the government prepares to roll out its universal health insurance scheme to other governorates across the country.

Real Estate + Housing

NUCA purchases 300 feddans in El Warraq for EGP 2 bn

The New Urban Communities Authority (NUCA) has purchased 300 feddans in El Warraq island in exchange for paying EGP 2 bn in compensation to the owners, a Housing Ministry official told Al Shorouk. The authority is still in negotiations with the owners to take over the rest of the land — estimated at an additional 200 feddans — amid plans by the state to develop the island.

Tourism

TUI Group interested in taking Thomas Cook’s shares in Egypt

German-based travel operator TUI Group is looking to acquire Thomas Cook’s share of the Egyptian tourism market, CEO Sebastian Ebel told Tourism Minister Rania Al Mashat on Wednesday, according to Egypt Independent. The company also wants to continue benefiting from Egypt’s charter flights incentive program, which provides discounts to airlines that make a certain number of flights per week.

Red Sea hotels want to hike prices by 9-15% this winter

Red Sea hotels and resorts want to raise accommodation prices by 9-15% in the coming winter season as demand rises, sources told the local press, attributing the proposal to rising energy prices over the past two years. Local companies are now trying to enter negotiations with foreign tour operators about hiking prices.

Automotive + Transportation

Egypt to receive 10 locomotives from GE in November

Egypt will receive 10 new locomotives from General Electric in November as part of a USD 575 mn agreement signed in 2017 to supply 100 new locomotives and refurbish another 81, Transport Minister Kamel El Wazir said, according to a cabinet statement.

Egypt Politics + Economics

Egypt releases foreign detainees, maintains arrests were legal

Egypt has released two Jordanian citizens, one Sudanese citizen, and one Dutch citizen who were detained during recent protests following requests from their respective embassies, the Public Prosecution Office said in a statement carried by Ahram Online. The Egyptian National Council for Human Rights (NCHR) had raised concerns about the legality of the arrests. An unnamed security source promptly dismissed the report, maintaining that all arrests were made according to the law.

Committee to study Tax Authority independence

Prime Minister Moustafa Madbouly has ordered that a committee be formed to study the restructuring of the Tax Authority into an entity independent from the Finance Ministry, Al Masry Al Youm reported. The move would place the authority under the supervision of the cabinet and include administrative and staffing changes as well as the introduction of modern technology, according to a copy of the decision seen by AMAY.

On Your Way Out

Some scenes from a new adaptation of Agatha Christie’s famous novel Death on the Nile will be filmed in Egypt, Egyptian Streets reports. The film, set in 1930s Egypt, is due to be released in October 2020. The first film adaptation of the popular crime mystery was in 1978, with scenes shot at the Old Cataract Hotel in Aswan, among other locations.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.23 | Sell 16.36
EGP / USD at CIB:
Buy 16.24 | Sell 16.34
EGP / USD at NBE: Buy 16.23 | Sell 16.33

EGX30 (Thursday): 14,218 (-1.1%)
Turnover: EGP 899 mn (30% above the 90-day average)
EGX 30 year-to-date: +9.1%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 1.1%. CIB, the index’s heaviest constituent, ended down 1.2%. EGX30’s top performing constituents were Egyptian Iron & Steel up 6.2%, Ezz Steel up 6.0%, and Cleopatra Hospital up 3.7%. Thursday’s worst performing stocks were Pioneers Holding down 3.8%, TMG Holding down 3.6% and CIRA down 3.5%. The market turnover was EGP 899 mn, and local investors were the sole net buyers.

Foreigners: Net short | EGP -8.2 mn
Regional: Net short | EGP -15.3 mn
Domestic: Net long | EGP +23.5 mn

Retail: 63.1% of total trades | 64.0% of buyers | 62.1% of sellers
Institutions: 36.9% of total trades | 36.0% of buyers | 37.9% of sellers

WTI: USD 52.81 (+0.7%)
Brent: USD 58.37 (+1.1%)

Natural Gas (Nymex, futures prices) USD 2.35 MMBtu, (+1.0%, November 2019 contract)
Gold: USD 1,512.90 / troy ounce (-0.1%)

TASI: 7,962 (+0.5%) (YTD: +1.7%)
ADX: 5,035 (+0.2%) (YTD: +2.5%)
DFM: 2,781 (+0.7%) (YTD: +10.0%)
KSE Premier Market: 6,165 (+0.8%)
QE: 10,313 (+0.0%) (YTD: +0.1%)
MSM: 4,026 (+0.0%) (YTD: -6.9%)
BB: 1,511 (-0.0%) (YTD: +13.1%)

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Calendar

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.

October: German businessman delegation will visit Egypt to discuss good projects in order to spend German funds into Egypt.

October: A delegation of 40-50 Saudi companies will visit Egypt to discuss increasing exports of Egyptian furniture.

7-10 October (Monday-Thursday): A Russian delegation will visit Cairo to attend a joint forum to discuss cooperation in various fields, including trade.

8-10 October (Tuesday-Thursday): A delegation of 20 Korean companies visits Egypt.

10-13 October (Thursday-Sunday): Big Industrial Week Arabia 2019, Egypt International Exhibition Center, Nasr City, Cairo.

20-24 October (Sunday-Thursday): German-Arab Chamber of Industry and Commerce’s ROI Week with ROI Institute, JW Marriott Hotel, New Cairo

22 October (Tuesday): Innovative Finance: A New Vision to Support Investment forum, venue TBD, Cairo.

23-24 October (Wednesday-Thursday): Intelligent Cities Exhibition & Conference, Hilton Heliopolis, Cairo.

23-24 October (Wednesday-Thursday): Russian-African Summit, Sochi, Russia.

23 October-1 November (Wednesday-Friday): CIB PSA Women’s World Championship, Great Pyramid of Giza, Cairo.

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 on the stock manipulation case, in which Gamal and Alaa Mubarak are involved, 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.

29-30 October (Tuesday-Wednesday): South Sudan Oil & Power (SSOP) Conference, Juba, South Sudan.

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): BiznEx Egypt 2019, Egypt International Exhibition Center, Nasr City, Cairo.

8-22 November: Egypt will host Under-23 Africa Cup of Nations 2019.

9 November (Saturday): Prophet Mohammed’s birthday, national holiday.

9-11 November (Saturday-Monday): Vested Summit, Sahl Hasheesh, Red Sea.

10-14 November (Sunday-Thursday): GeoMEast International Congress and Exhibition, Marriott, Cairo.

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

13-15 November (Wednesday-Friday): Africa Early Stage Investor Summit, Cape Town, 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.

22-23 November (Friday-Saturday): Invest in Africa 2019 conference, New Administrative Capital.

24 November (Sunday): Arabia Investments lawsuit against French Peugeot (after being postponed).

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

December: Egypt will host for the first time the Pack Process trade expo for the Middle East and African region.

December: Indian automotive delegation to visit Egypt.

3-6 December (Tuesday-Friday): Cairo WoodShow, Egypt International Exhibition Center, Nasr City, Cairo.

5-7 December (Thursday-Saturday): RiseUp Summit, American University in Cairo, New Cairo Campus.

8 December (Sunday): Pitch by the Pyramids, Giza Pyramids

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.

14-17 December (Saturday-Tuesday): World Youth Forum 2019, Sharm El Sheikh.

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.

March: The Middle East and North Africa Financial Action Task Force (MENAFATF) will visit Egypt to assess the progress of actions taken to combat money laundering and terrorist sponsoring activities.

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.

November 2020: Egypt will host simultaneously the International Capital Market Association’s emerging market, and Africa and Middle East meetings.

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