Tuesday, 22 October 2019

Celebrate hump day with a bolus of IPO news — and a message from the IMF’s David Lipton

TL;DR

What We’re Tracking Today

The two-day Russia-Africa summit kicks off tomorrow in Sochi: Leaders from more than 50 African countries will gather at the Black Sea resort town to discuss strengthening economic ties with Moscow. The event, which will be chaired by President Abdel Fattah El Sisi (wearing his African Union hat) and Russian President Vladimir Putin, will feature panel discussions on issues ranging from Russian-African cooperation in energy, trade and infrastructure investment to collaboration in science, technology and digital security.

President Abdel Fattah El Sisi will also hold a highly-anticipated meeting with Ethiopian Prime Minister Abiy Ahmed to discuss the currently gridlocked talks over the Grand Ethiopian Renaissance Dam. We have more on this in this morning’s Diplomacy + Foreign Trade, below.

The Ruskies are expected to make some sort of announcement pertaining to the USD 7 bn Russian Industrial Zone (RIZ) in Egypt during the summit, Andrei Slepnev, director general of the Russian Export Center (REC), said in an interview with Russian outlet Ria. Some 55 Russian manufacturers have expressed interest in setting up shop in the zone, which is expected to produce USD 3.6 bn-worth of products by 2026.

Among the Egyptians due to appear on stage in Sochi are Investment Minister Sahar Nasr, CIT Minister Amr Talaat, Amani Abou-Zeid (wearing her African Union hat), Suez Canal Economic Zone boss Yehia Zaki, and Qalaa Holdings chief Ahmed Heikal.


A delegation of US companies will be in Cairo on 18 November to explore investments in the energy, health and information technology sectors as part of AmCham’s US-Egypt Proposer Forum, CEO Sylvia Menassa said, according to the local press. AmCham will also participate in a Washington conference focused on water issues on 30 October, and hold the ‘Prosper Africa Event’ on 7 November.

Other key dates to pencil into your agendas this week and next:

  • Cairo Water Week kicked off earlier this week at Al-Manara International Conference Center in New Cairo, under the title “Responding to Water Scarcity.” President Abdel Fattah El Sisi welcomed yesterday delegations in town to attend the conference, which will run until Thursday.
  • The Intelligent Cities Exhibition & Conference will take place at the Hilton Heliopolis on Wednesday and Thursday.
  • A B2B conference for German and Egyptian companies will take place on Monday, 28 October in Cairo. Click or tap here to register.
  • The US Federal Reserve will meet on 29-30 October to review key interest rates.

Cause for optimism in emerging markets as rate cuts offset trade tensions: Central bank stimulus is producing “patches of growth stabilization” in emerging markets, helping them withstand headwinds generated by the US-China trade conflict, portfolio managers at Templeton Emerging Markets Investment Trust wrote in a note yesterday. “We expect this trend to continue with rate cuts in a number of larger EMs, including India, Brazil, Russia and Mexico. Coupled with improving earnings expectations and relatively undemanding valuations and dividend yields, we believe the outlook for EM equities remains attractive,” they said. CNBC has more.

The same can’t be said for 2020 US earnings estimates. Analysts have cut combined S&P 500 earnings estimates in 2020 by 0.5% to USD 178.40 a share — the largest weekly drop since January, Bloomberg findings show. This comes despite solid quarterly earnings in the banking and healthcare sectors released last week, and projections for S&P 500 profits to grow 10% next year. But with last year’s 4Q slump fresh in the minds of investors, strong 2020 estimates will be needed to inspire confidence, analysts say. “For the market to meaningfully take a step to the upside, investors need to have greater conviction that you’re going to get high single digit or better earnings growth,” said Jeremy Zirin, head of Americas equities at UBS Global Wealth Management.

The Netherlands and Denmark top this year’s Melbourne Mercer Global Pensions Index, a global survey of 37 nations that assesses the best pension systems in the world, Bloomberg reports. The survey aims to assess whether each pension system leads to improved financial outcomes for retirees, its sustainability, and whether it engenders community trust. Australia, Finland, Sweden, Norway, Singapore, New Zealand, Canada and Chile all scored high, while the UK came in at 14th place and the US at 16th. Lagging behind are Japan, at 31, and Thailand, at the bottom.


With the “you break it, you buy it” principle in play: SoftBank to take control of WeWork. Japanese conglomerate SoftBank Group is on the verge of taking over troubled work space company WeWork, sources familiar with the matter have said. CNBC reports that SoftBank will inject bns in fresh capital and hike its stake to 70%. The agreement would value WeWork at between USD 7.5-8 bn on a pre-funding basis — a far cry from the USD 47 bn valuation it had sought in what turned out to be its “nightmare IPO.”

Lebanon passes emergency economic reforms as protesters hit the streets: Lebanese politicians yesterday approved a package of emergency economic reforms as demonstrators continued to take to the streets in protest at the government’s management of the economy. Prime Minister Saad Al Hariri announced in a televised speech yesterday that the government would cut the salaries of ministers and lawmakers in half, place a 2% tax on bank profits and reform the state-owned power sector in an effort to eliminate its budget deficit next year. The central bank will also cut USD 2.9 bn from its local-currency interest bill and charge lenders a one-off fee. The protests were initially sparked by a government proposal to place a tax on WhatsApp calls, which they scrapped last week in response to the public reaction. Reuters and Bloomberg have the story.

Bibi throws in the towel trying to form an Israeli government: Israeli Prime Minister Benjamin Netanyahu has for the second time since April failed to form a government, and will pass the baton to his Labour Party opponent Benny Gantz to try and break the political gridlock, CNN reports.

Trudeau’s Liberal Party on track to win Canadian general election: Canadian Prime Minister Justin Trudeau’s Liberal Party looks set to return to power as a minority government as results from yesterday’s federal election continued to trickle in at dispatch time this morning. The Globe and Mail has the breakdown of the election results.

Enterprise+: Last Night’s Talk Shows

Lamees El Hadidi owned the airwaves in her second night back after a prolonged hiatus. For context, remember she has returned with a regionally-themed show (Al Kahera Alaan), on a new network (Al Hadath TV, a subsidiary of Al Arabiya), and in a new format (two hours — one broadcast via satellite, one streamed online). El Hadidi, long seen by many in our community as the most astute of the talking heads when it comes to economics, didn’t disappoint last night, but remember: With a regional mandate, we’ll be seeing a lot less of Egypt out of Lamees.

As promised the night before, Lamees delivered an Egypt-focused talk with the IMF’s David Lipton, who was on-message as he stressed the standard talking points about Egypt’s relationship with the Fund, which wrapped this past weekend its annual meeting (alongside that of the World Bank) in DC. Egypt is, for the time being, we would suggest, the IMF’s poster child: We signed up for a reform program that ticked all of the IMF’s boxes, got funding to back it, and implemented it to the letter.

The question now: How are we working together going forward? Lipton, as you might expect, had no direct answer — by protocol, Egypt has to lead on that, and the Sisi administration has signalled we want to be pals, but it hasn’t said (exactly) how, only that it won’t be in a formal assistant program.

Interestingly, Lipton obliquely addressed popular discontent with reform programs, saying it is natural that Egyptians aren’t yet feeling relief after the reforms — the goal of the program was to stabilize and avoid a crisis, full-stop, he suggested. What people may not appreciate is how bad the situation could have become had there not been a program and had Egypt then had to grapple with runaway inflation or a deeper crisis leading to widespread lost jobs and a loss of confidence in the economy. A reform program is a success when it avoids all of this, which Egypt’s did.

When are consumers going to feel the benefits of the program? The economy needs to create mns of meaningful jobs, and this is only going to happen with a strong private sector. Business needs to be allowed to flourish, Lipton said — with internationally competitive export-oriented companies in particular need of support.

Lipton’s other key talking points with Lamees last night:

  • The IMF would be happy to work with Egypt again, although the “how” would obviously be different this time. The government needs to look at how to increase investment and job creation, both areas of interest to the Fund. Assistance can take many forms.
  • GDP growth at a 5.9% clip is in the cards for the current fiscal year;
  • Repayment of the USD 12 bn extended fund facility is on track to start from 2021 and Egypt, if it stays the course, should not have issues servicing its debt.

You can watch the full interview (dubbed in Arabic) here (watch, runtime: 23:30).

Lamees also noted last night that Saudi Arabia had renewed its deposits with the Central Bank, making it formal on the sidelines of the IMF annual meeting in DC. Also in Washington, Egypt and Kuwait inked agreements that will unlock the next phase of Kuwait’s USD 1.9 bn in development assistance for Sinai. We have more on this in this morning’s Speed Round, below.

Lamees’ regional segment focused on developments in Lebanon (where protests continue and the Lebanese Army directly confronted Hezbollah when it tried to ‘attack’ the protests — watch, runtime: 21:27). Her big non-economics / non-politics interview of the night was a sit-down with Egyptian national football team manager Hossam El Badri (watch, runtime: 2:06).

Lamees’ other half tip-toed into the consumer rights arena: El Hekaya’s Amr Adib rang up Electricity Ministry spokesman Ayman Hamza to discuss complaints about exaggerated and inaccurate electricity bills. Hamza stressed that citizens have the right to complain — and noted that the ministry has dumped its previously standard policy of pay now, appeal later (watch, runtime: 10:42).


Other messages to the masses from the talking heads last night:

  • President Abdel Fattah El Sisi is optimistic that Egypt, Ethiopia and Sudan will agree how to best use their shared water resources (Masaa DMC, watch, runtime: 1:25 and Al Hayah Al Youm, watch, runtime: 3:25).
  • The State Information Service is out with a statement on El Sisi’s visit to Russia this week for the Russia-Africa summit. Coverage by Hona Al Asema’s Reham Ibrahim was typical (watch, runtime: 2:30).
  • There’s no plan to impose new fees or to hike fares on ferries or other small watercraft in the Suez Canal zone cities, according to Al Hayah Al Youm’s Lobna Assal, channeling Suez Canal Authority boss Lt. Gen. Osama Rabie. (watch, runtime: 2:28)

Speed Round

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IPO WATCH- There’s plenty of chatter in the market this morning about IPOs, some on the near horizon, others further out.

At the head of the class is Rameda Pharma, which Al Mal cites unnamed sources as saying is on track to offer shares on the EGX as early as this year and as late as 1Q2020. Rameda had mulled a listing on the London Stock Exchange, the newspaper says, but ultimately decided that the Egyptian Exchange was the right venue for the transaction. If the listing goes through before the year is out, Rameda would be the second company to go to the EGX in 2019, after Fawry made its trading debut in August. Rameda was one of at least three Egyptian companies believed to have pulled IPOs last year amid the fallout from the Emerging Markets Zombie Apocalypse.

State-owned Misr Insurance + Misr Life Insurance could be ready to IPO by 2021: Pre-IPO workstreams at state-owned Misr Insurance may take longer than previously thought, our friend Basel El Hiny suggested in an interview with CNBC Arabia (watch, runtime: 03:35). El Hiny, chairman of the Misr Insurance Holding Company, said Misr Insurance could be ready to go to market by 2021, implying a slip of a few months from the indicative 2020 timeline he had outlined this past July. Misr Life Insurance’s IPO preparations remain on track and could be completed next year, El Hiny said. Each company is expected to offer up to 30% of its equity, he said, confirming a value figure suggested by the government committee managing the privatization program. The IPOs were postponed last year to give them more time to reorganize ahead of the transactions.

Jeans maker T&C plans to IPO on the EGX, seeking finance for USD 40-50 mn plant: Tolba Group’s jeans manufacturer T&C is looking to sell an undisclosed number of shares on the EGX to finance its expansion plans, including building a new USD 40-50 mn factory, Chairman Magdy Tolba told the local press. T&C is currently in the market for a financial advisor for the potential listing, Tolba said, without providing further details on the expected timeline for the process. The company is looking to set up its new facility either in Obour City, where it has an existing factory, or in 10th of Ramadan City.

Reality check- No indicative timeline for an IPO is a “deadline” until an ITF drops — and even then… Market conditions change, and no company wants to go out in a perfect storm to offer shares at fire sale prices. That’s to say nothing of the natural tendency of CEOs to get cold feet before a transaction — or that IPOs can be called off at the last moment — and frequently are. Sometimes, IPO ‘announcements’ outside the formal legal documentation (claims that company “x” is “preparing for an IPO”) are just trial balloons or tactics. Shocking, we know, yet the domestic press often fails to keep this in perspective, and we sometimes allow this to seep into conversation in the wider community.

INVESTMENT WATCH- UAE’s Dragon Oil to invest EGP 1 bn in newly acquired Gulf of Suez assets: Emirates National Oil Company’s (ENOC) subsidiary Dragon Oil is planning to invest up to EGP 1 bn over the next five years after acquiring BP’s stake in Egypt’s Gulf of Suez oil concessions, according to a cabinet statement. The investments will be directed towards increasing drilling activity to ramp up production in the concessions. Dragon Oil is planning to surpass the current 75k bbl/d production target and plans to maintain the higher output levels for 10 years.

The Oil Ministry has also granted regulatory approval for the company to acquire BP’s stake in the concessions, making Dragon Oil the Egyptian General Petroleum Corporation’s (EGPC) partner contractor in the Gulf of Suez Petroleum Company (GUPCO), a JV that was set up by BP and EGPC to undertake exploration and production operations in the area. The value of the transaction hasn’t been disclosed, but Reuters suggested earlier this year that it was in the region of USD 600 mn.

Background: BP’s GUPCO exit is part of the company’s strategy to clear off more than USD 10 bn in global assets over two years. The company will instead focus its work in Egypt on natural gas. Last February, it began natgas production from its Giza and Fayoum fields, part of the second phase of the three-stage West Nile Delta concession development project. The final phase of the project is expected to kick into gear later this year when the Raven field goes online.

SODIC has awarded construction contracts worth EGP 300 mn for its flagship SODIC East project, according to an emailed statement (pdf). Our friends at the upscale real estate developer broke ground last year on the project, which is its largest development in east Cairo, with construction underway and ahead of schedule on all launched phases. SODIC expects to begin delivering units in SODIC East as of November 2021. The master plan for the 655-acre development was designed by Massachusetts-based firm Sasaki.

Talks with operators for the development are also well underway with SODIC set to bring on Wellspring, an experiential teaching organization, to operate the camp site that will be included in its six-acre park. SODIC is also in “advanced talks” with other unnamed firms that will be responsible for the array of services that will be available in SODIC East, including schools, medical services, and entertainment facilities.

Egypt signs USD 1.9 bn-worth of financing agreements with Kuwait: Egypt signed yesterday two financing agreements with the Kuwait Fund for Arab Economic Development (KFAED), including one that will see KFAED dole out USD 1 bn over three years to finance the second phase of development plans in the Sinai peninsula, according to a cabinet statement. The two also signed a USD 86 mn agreement to fund the construction of a road that connects the tunnel running under the Suez Canal with Sharm El Sheikh. Investment and International Cooperation Minister Sahar Nasr and Kuwaiti Trade and Industry Minister Khaled Nasser Al Rawdan also signed a separate MoU to encourage investments across the two countries.

Separately, Kuwaiti Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah also met President Abdel Fattah El-Sisi to discuss bilateral relations and other regional matters, Ittihadiya said.

Wider ownership of EGP 100 mn company managing commodities exchange? The Supply Ministry will begin next week the procedures to set up the EGP 100 mn company that will manage the Egyptian Commodity Exchange, Supply Minister Ali El Moselhy tells Al Mal. The company will apparently be owned by the ministry, the EGX, the Federation of Egyptian Industries, Misr for Clearing, Depository & Registry, private and public sector banks, insurance companies, and private equity funds. The exact division of shares in the company will be decided by the end of this week, El Moselhy tells the newspaper. Previous reports had indicated the company would be a JV between the EGX and the Supply Ministry, with the EGX holding the majority of the equity.

Background: The ministry and the EGX had completed earlier this week the feasibility study for the Egyptian Commodity Exchange, where traders will be able to buy and sell futures contracts. The exchange will initially allow five commodities — flour, iron, oil, corn, and cement — to be traded. The establishment of the exchange was made possible under amendments to the Capital Markets Act, which were passed in February 2018 and paved the way for the introduction of new financial instruments.

Fitch Solutions expects the CBE to cut interest rates by 0.5% before the end of the year, and 1.5% in 2020, Masrawy said, citing a report. The data vendor arm of the ratings agency said that easing inflation and the two consecutive rate cuts in the US will encourage the CBE to persevere with its easing cycle. The CBE has cut rates by 350 bps so far this year, and 250 bps since August. The central bank’s Monetary Policy Committee will next meet on 14 November to review rates.

Fitch aren’t alone in predicting another cut. September’s shock fall in inflation led EFG Hermes to forecast a 100 bps cut in the upcoming meeting, while Beltone predicted that the MPC will reduce rates by 50-100 bps. Annual headline inflation plunged to 4.3% in September from 7.5% in August.

Local development ministry pushing plan to replace three-wheeled vehicles with gas-run minivans: The Local Development Ministry is reportedly pushing ahead with a recent decision to stop issuing licenses for tuk-tuks (we’d argue they already weren’t issuing them, full stop) and replace them with minivans that run on natural gas, Youm7 reports. The government is reportedly considering a program that would buy from owners tuk-tuks that have already been purchased and licensed; program participants would receive minivans in return and pay the price difference between the two vehicles using soft loans, according to Egypt Today. They will be able to operate the minivans using taxi licenses.

Keep this all in context: Last we checked, licensing was very much an Interior Ministry prerogative. The Local Development Ministry is in on the anti-tuk-tuk drive, but it’s not the only player at the table.

Before we smile in satisfaction, remember: These things create tens of thousands of jobs a year and are at present the only vehicles serving many peri-urban areas — to say nothing of being “last mile” transport linking informal settlements nationwide to transport hubs.

Background: The drive to phase out tuk-tuks has been in the works for a while, with the Industrial Development Authority ending licenses for tuk-tuk manufacturers and assemblers back in April. In March 2018, the Central Agency for Public Mobilization and Statistics (CAPMAS) reported that there were 99k licensed tuk-tuks in Egypt between 2014 and 2016, and over 3 mn operating without licenses.

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Image of the Day

The weird and wonderful World Solar Challenge 2019: No, this is not a Back to the Future-style nuclear-powered DeLorean, but a contestant in this year’s World Solar Challenge, in which vehicles powered by the sun compete in a 3000 km race in Australia. The event has been running biennially since 1987, and sees teams from around the world bring their (often highly futuristic) creations to race against one another. This image shows the IVE Engineering team’s vehicle, named Sophie 6s, which came all the way from Hong Kong.

Egypt in the News

It’s a mixed bag in the foreign press this morning, with no one subject dominating the conversation:

  • The Atlantic Council is late to the game on the protests: Last month’s demonstrations are an “alarm bell” for authorities that — if they continue — could have serious political and economic repercussions, political analysts Alessia Melcangi and Giuseppe Dentice write. (Atlantic Council)
  • Why did Egypt just release 80 members of Islamic Jihad? The decision was conditioned on the Palestinian militant group dialling back tensions with Israel and not interfering with an agreement between Hamas and Israel, Israeli journalist Shlomi Eldar writes. (Al Monitor)
  • The Egyptian Premier League: New board, same story. The Egyptian Football Association’s (EFA) Fifa-appointed board is facing the same problems as the old one, after the Al Ahly v Zamalek derby was scrapped indefinitely last weekend on security fears. The EFA is now facing off against Al Ahly, which is refusing to play any matches until the tie is rescheduled. (The National)
  • Tanoura for the soul: The sufi-inspired dance has become popular among the Egyptian youth, who see it not just a dance, but as a lifestyle, a heritage, and a soul-purifying experience. (Gulf News)

Worth Reading

Cryptocurrencies are now firmly on the radar of central banks: Facebook’s controversial plans to launch its Libra cryptocurrency has “spooked” central bankers, and driven home the message that if they don’t make their own digital currencies, someone else will, writes Brendan Greeley in the Financial Times. As a result, central banks all over the world are finally sitting up and taking notice of digital currencies, although their stance is far from unified.

Central banks are either closely tracking developments, or looking into launching their own currencies: Just last month, the meeting of the Council of Arab Central Banks and Monetary Agencies Governors gathered some 200 Arab bankers, central bank governors, ministers, economic experts, and Arab Monetary Fund officials in Cairo to discuss, amongst other things, the growth of digital currencies. Meanwhile, the People’s Bank of China is the first major central bank to be striding ahead with actually creating a cryptocurrency, which is “close to being out” after five years of research, according to Bloomberg. And a host of other central banks are also reportedly undertaking serious research in the field. But at the other end of the spectrum, the US Fed has said it is not actively considering establishing a digital currency, citing issues related to cybersecurity and insufficient demand.

This could involve sidelining commercial banks, which is risky business: Central bank currencies could follow two main tracks: wholesale and retail. Wholesale projects would seek to make payment flows within the existing financial system faster and cheaper, with access to the central bank digital currency being limited to financial institutions. Retail projects, however, would involve more of a systemic transformation, with the general public either having access to digital currencies issued through the central banks themselves, or through commercial banks that partner with them. But this is an altogether riskier proposition: If central banks sideline commercial banks, they threaten a key funding source for the real economy. They would also have to assume the risks and responsibilities of banking, including performing customer due diligence, supplying tax information, and adhering to anti-money laundering financing requirements.

Diplomacy + Foreign Trade

Shoukry calls for Russian mediation on GERD ahead of El Sisi’s meeting with Abiy Ahmed

President Abdel Fattah El Sisi and Ethiopian Prime Minister Abiy Ahmed are set to meet on the sidelines of the Russia-Africa summit this week to discuss the impasse over the Grand Ethiopian Renaissance Dam. Echoing Egypt’s request for international mediation, an editorial in the National yesterday calls on the two sides to work with allies to resolve the dispute and avoid a “potentially catastrophic” escalation. Ethiopia has so far rejected proposals to bring in a mediator.

FM says Russia could help with GERD: Foreign Minister Sameh Shoukry told RIA Novosti news agency yesterday that Russia could be the country to step in and help mediate the dispute due to its good relations with all three countries involved. Ittihadiya spokesman Bassem Rady previously said that it was hoped that the US would play an “instrumental role” in solving the dispute.

What the foreign press is saying about the summit: Reuters and the Associated Press are out with articles framing the summit in terms of great-power politics. The two-day event, which kicks-off in Sochi tomorrow, is a vehicle for Russia to step up economic and military ties with African states in a bid to compete with its Western rivals and China, they suggest. “For Moscow, the prize is greater political influence on a continent with 54 United Nations member states, sprawling mineral wealth, and potentially lucrative markets for Russian-manufactured weapons,” Tom Balmforth and Andrew Osborn write for Reuters. Cara Anna highlights in the AP the US’ dwindling engagement with the continent, a policy decision on which Russia is trying to capitalize.

Nasr talks private sector growth with OECD boss

Nasr talks private sector growth with OECD boss: Investment Minister Sahar Nasr and Organization for Economic Co-operation and Development (OECD) Secretary-General José Ángel Gurría held talks yesterday to discuss providing support to Egypt’s private sector and increasing foreign direct investment, the ministry said in a statement.

Energy

Egypt exported 172.8 bncf of natgas in FY 2018-2019 via 45 cargos from Idku

Egypt exported 45 cargos of natural gas carrying a total of 172.8 bcf from the Idku liquefaction plant in FY2018-2019, according to the Egyptian Natural Gas Holding Company (EGAS) (pdf). Egypt had hoped that returning Idku to full capacity would see exports increase to 1.13 bcf/d, but EGAS canceled several LNG tenders from the facility due to low bids and growing domestic demand. Idku’s natural gas exports fell by 80% between August and mid-October.

Basic Materials + Commodities

MAPCO to establish EGP 540 mn sorting and packaging plant by 2020

Produce exporter Mediterranean Agricultural Products Company (MAPCO) plans to establish a EGP 540 mn plant for sorting and packaging agricultural products by 2020, the company's export director Ashraf El Sehy told the local press. MAPCO will use the plant to export its products to Europe, East Asia, Russia, and China.

Manufacturing

Egypt’s gov’t plans to set up aluminum factory in Saudi Arabia or UAE

The Public Enterprises Ministry is mulling setting up an aluminum factory in either Saudi Arabia or the UAE through a partnership, Minister Hisham Tawfik told Al Mal. Egypt is eyeing these two countries in particular since they subsidize electricity. The facility will use bauxite sourced from Ghana for its raw material needs. No further details were provided on the plan, but the move would aim to help Ghana drift away from its high dependence on Chinese manufacturers, who purchase most of its massive bauxite reserves.

Tourism

EasyJet looking to step up investment in Egypt

EasyJet airliner and EasyJet Holidays are interested in stepping up business in Egypt starting from the coming winter season, CEOs Johann Lundgren and Garry Wilson told Tourism Minister Rania Al Mashat, according to Al Mal. The companies attributed their interest to increasing demand from their customers.

Egypt could add 20-30k new hotel rooms during 2019, 2020

Egypt has added 10-15k new hotel rooms so far this year and is aiming for a similar increase in 2020, Egyptian Tourism Federation boss Ahmed El Wassif told Reuters Arabic. The tourism sector has continued to recover over the past few years, with revenues surpassing 2010 levels to reach a record USD 12.6 bn in FY 2018-2019. “Tourism has recovered, but the sector is looking for more in terms of tourist numbers, revenues and market diversification,” he said. El Wassif also called for a tourism licensing law, which he believes will generate more investment in Egypt’s tourism sector.

Telecoms + ICT

Telecom Egypt to have 20 mn homes fiber-optic-supported by 2020

Telecom Egypt is planning to install optical fiber in 20 mn homes by 2020, CFO Mohamed Shamroukh said, according to Al Masry Al Youm. The company has already invested north of USD 3 bn to improve the country’s internet infrastructure, Shamroukh added. We noted in July that the state-owned landline monopoly has plans to spend EGP 17 bn through to 2020 to accelerate efforts to develop its infrastructure and improve its networks.

Banking + Finance

Sarwa Capital concludes EGP 776 mn Palm Hills securitized bond

Palm Hills and Sarwa Capital have closed a EGP 776 mn securitized bond backed by a portfolio of 582 delivered units at 11 of the real estate company’s developments, Sarwa said in a statement (pdf). This brings Palm Hills’ total issuances to EGP 2.4 bn. The bond was issued by Sarwa Securitization Company, while Sarwa Promotion & Underwriting acted as structuring advisor, and the lead manager and arranger of the transaction. The issuance was underwritten and co-arranged by Banque Misr, Arab African International Bank and Ahli United Bank, while our friends at ALC acted as legal advisors.

Banque du Caire launches mobile wallet app, QR Code features

Banque du Caire has launched a mobile wallet app, Qahera Cash, that allows users to pay bills, transfer money, and make online purchases from international retailers, according to Al Shorouk. The app is currently available for Android users, and will be available for iOS soon. BdC Chairman and CEO Tarek Fayed told us the bank applied for a license to be a digital acquirer bank through QR code to move ahead with its plans for financial inclusion. The Central Bank of Egypt had issued a directive in August (pdf) requiring banks to grow their active e-wallet users by at least 30% annually.

Other Business News of Note

NAT plans to auction shopping mall in Heliopolis metro station next year

The National Authority For Tunnels (NAT) plans to issue an auction for the design and construction of a shopping mall inside the Heliopolis metro station next year, according to Al Mal. The Transport Ministry inaugurated the metro station, which is the largest in the Middle East, on Sunday.

Legislation + Policy

House approves amendments giving gov’t control over Zewail city

LEGISLATION WATCH- House moves to give gov’t more control over Zewail city: The House of Representatives has given a preliminary nod to a bill that would give the government powers to elect the CEO and chairman of Zewail City of Science and Technology, as well as the city’s board of trustees, Al Ahram reported.

Law

Shalakany represents Suez Steel in import tariff case

Shalakany Law Firm successfully represented Suez Steel during the recent hearing that overturned the Cairo Administrative Court’s decision to suspend the import tariffs on iron billets and steel rebar, it said in a statement (pdf).

On Your Way Out

The Giza Zoo has received three newborn animals — a hippopotamus, a kudu, and an Arabian oryx, according to Egypt Today. The kudu and oryx are two species of antelopes. The oryx became extinct in the wild in the 1970s, prompting animal conservationists to begin breeding them in captivity. All three animals will soon be available to the public for viewing.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.14 | Sell 16.27
EGP / USD at CIB:
Buy 16.15 | Sell 16.25
EGP / USD at NBE: Buy 16.16 | Sell 16.26

EGX30 (Monday): 14,179 (-0.4%)
Turnover: EGP 438 mn (38% below the 90-day average)
EGX 30 year-to-date: +8.8%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.4%. CIB, the index’s heaviest constituent, ended down 0.6%. EGX30’s top performing constituents were Juhayna up 1.8%, Sidi Kerir Petrochemicals up 1.3%, and Madinet Nasr Housing up 1.0%. Yesterday’s worst performing stocks were Egyptian Resorts down 2.2%, Egyptian Iron & Steel down 2.2% and Oriental Weavers down 2.1%. The market turnover was EGP 438 mn, and foreigner investors were the sole net buyers.

Foreigners: Net long | EGP +12.5 mn
Regional: Net short | EGP -0.7 mn
Domestic: Net short | EGP -11.8 mn

Retail: 71.6% of total trades | 69.9% of buyers | 73.3% of sellers
Institutions: 28.4% of total trades | 30.1% of buyers | 26.7% of sellers

WTI: USD 53.37 (+0.1%)
Brent: USD 58.96 (-0.8%)

Natural Gas (Nymex, futures prices) USD 2.24 MMBtu, (+0.1%, November 2019 contract)
Gold: USD 1,487.80 / troy ounce (-0.0%)

TASI: 7,764 (-0.3%) (YTD: -0.8%)
ADX: 5,102 (+0.3%) (YTD: +3.8%)
DFM: 2,763 (+0.1%) (YTD: +9.3%)
KSE Premier Market: 6,271 (+0.3%)
QE: 10,396 (-0.2%) (YTD: +1.0%)
MSM: 4,016 (+0.0%) (YTD: -7.1%)
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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.

20-24 October (Sunday-Thursday) The 2nd Annual Cairo Water Week Conference, Al-Manara International Conference Center, New Cairo, Cairo, Egypt

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

21-25 October (Monday-Friday): Radiocommunication Assembly 2019, Sharm El Sheikh, Egypt

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

22 October (Tuesday): 20th Century Middle Eastern Art annual auction: Sotheby’s Gallery, London

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

23-24 October (Wednesday-Thursday): Russian-African Summit, Sochi City, 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 (Monday): B2B conference for German companies organized by the German-Arab Chamber of Industry and Commerce and the Bavarian Ministry of Economic Affairs, Regional Development and Energy, InterContinental Semiramis, Cairo.

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.

28 October- 22 November: World Radiocommunication Conference 2019, Sharm El Sheikh, Egypt

29-30 October (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review key interest rates.

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.

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

November: The government will host the Egypt Economic Summit with 40 speakers and experts across all economic fields to discuss the country’s vision post the IMF program.

November: British Egyptian Business Association’s Annual door knock mission, United Kingdom.

November: ITIDA to announce the winning bid in a tender to manage three new innovation centers.

3 November (Sunday): Real Estate Debate 2019 Conference – Catalysts for Growth in 2020, Cairo Marriott Hotel.

3-5 November (Sunday-Tuesday): Electrix 2019, Egypt International Exhibition Center, Nasr City, Cairo.

4-6 November (Monday-Wednesday): Egypt’s Chamber of Tourism Establishments will participate in the UK’s World Travel Market (WTM) event in London.

7 November (Thursday): AmCham will hold the Prosper Africa Event.

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.

12 November (Tuesday): Egypt Economic Summit, venue TBA.

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

14 November (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

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.

18 November (Monday): AmCham’s US-Egypt Proposer Forum in Cairo.

20 November (Wednesday): The Investment Ministry and the Islamic Development Bank will organize the “leaders for change” startup competition as part of the Fekretak Sherketak initiative, location TBD, Cairo, Egypt.

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)

25 November (Monday): Global Trade Matters international dialogue on climate neutrality, Marriott, Cairo.

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

1-4 December (Sunday-Wednesday): E-payment and Innovative Financial Inclusion Expo and Forum (PAFIX), Egypt International Exhibition Center, Nasr City, Cairo.

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 2020: 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.

4-5 March 2020 (Wednesday-Thursday): Women Economic Forum, Cairo.

25-26 March 2020 (Wednesday-Thursday): Mega Projects Conference, Egypt International Exhibition Center, Nasr City, Cairo.

23 April 2020 (Thursday): First day of Ramadan (TBC).

23-26 May 2020 (Saturday-Tuesday): Eid El Fitr (TBC).

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

30 June 2020 (Sunday): June 2013 protests anniversary, national holiday.

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

30 July 2020-3 August 2020 (Thursday-Monday): Eid El Adha (TBC), national holiday.

19-20 August 2020 (Wednesday-Thursday): Islamic New Year (TBC), national holiday.

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