Tuesday, 12 November 2019

Egypt’s sovereign wealth fund exits ‘stealth mode’


What We’re Tracking Today

We don’t know whether to be grateful it’s already Tuesday, or to cry for all of the things that won’t get done in a shortened workweek.

Either way, the news this morning has us smiling: It’s a big day for business as the nation’s long-awaited sovereign wealth fund had a coming out of sorts yesterday: CEO Ayman Soliman told Bloomberg about a transaction that could see the SWF structure a transaction that will see it take a stake in the Siemens / OC / Elsewedy power plants and place the rest of the equity with international investors. The business community has long awaited the SWF’s first move, and this is a good start. The next step: Appointment of a financial advisor for the transaction as early as next week.

Also piquing our interest this morning: Bloomberg’s piece on the SWF name-checks us as the Middle East’s fastest-growing economy — and it looks like the government expects GDP to expand at a 6.4% rate in the next fiscal year. That’s better than the 6.0% rate expected this year, but down from an earlier projection of >7%.

Meanwhile, news of friends: Cleopatra Hospitals is eyeing what could be its first expansion outside Egypt, while Algebra Ventures and CVentures led a USD 1 mn series A funding round for Yodawy, Egypt’s largest online digital pharmacy benefits platform.

We have chapter and verse on all of this in this morning’s Speed Round, below.

A delegation from Chinese government’s influential consultative body wraps up its visit today. It has been in town to talk over Egypt’s participation in the Belt and Road Initiative, the local press reports. We have more on this in this morning’s Diplomacy + Foreign Trade, below.

The first iteration of the Egypt Economic Summit gets underway today at the Four Seasons Nile Plaza, according to a press release (pdf).

It’s interest rate week: The CBE meets on Thursday to review interest rates, with five of the six economists we surveyed last week predicting a rate cut.

Our friends at AmCham are hosting the US-Egypt Future Prosperity Forum a week from today. Prime Minister Moustafa Madbouly and US Foreign Commercial Service Assistant Secretary of Commerce for Global Markets & Director General Ian Steff will be among those speaking at the forum. Investment and International Cooperation Minister Sahar Nasr, Oil Minister Tarek El Molla, Planning Minister Hala El Said, and CIT Minister Amr Talaat will also participate in sessions throughout the event. You can check out the full agenda here.

PSA- We’re looking at something of a late-fall heat wave, with daytime highs of 33°C today through Thursday before the mercury falls to 25-27°C through the end of the month, according to our favourite weather app.

Somabay is home to five luxury resorts, a lively marina, and outlets for premium entertainment and relaxation. Somabay caters to diverse tastes with a common thread of well-being,
relaxation, and sheer enjoyment of life that is reflected in all its hotels & facilities.

Adnoc to take on WTI and Brent by launching new crude benchmark early next year: The Abu Dhabi National Oil Company (Adnoc) and nine major energy companies are planning to set up a new exchange to trade the world’s first Murban crude futures contracts, CNBC reports. Adnoc will partner with the Intercontinental Exchange (ICE) to establish the market as soon as early 2020 in a move designed to challenge the dominance of the two main light crude benchmarks, WTI and Brent. BP, Shell, Total and Petrochina are among those joining Adnoc in the venture.

Also for the oil and gas types among you this morning: Low oil prices and the growth of renewables are helping push African governments to relax terms in bids to make E&P activity more enticing, Reuters reports.

Regionally: Lebanon’s central bank says it has the liquidity to keep the market awash in greenbacks and has no plans to impose capital controls or give haircuts to account holders, Bloomberg reports. And Saudi Arabia has made good on a promise to give permanent residency to some foreigners.

Also worth knowing about this morning:

  • Chinese e-commerce giant Alibaba took in a record USD 38 bn on Singles Day yesterday — the largest single shopping day in the world. (CNBC)
  • The run of negative press continues for Uber: Uber founder Travis Kalanick dumped around 20% of his stake in the ride-hailing app (about USD 547 mn worth) after the expiration of his lock-up period, and CEO Dara Khosrowshahi is under fire after having compared the murder by Saudi operatives of journalist Jamal Khashoggi to mistakes the company made developing self-driving cars.
  • US stocks finished in the red yesterday after The Donald poured cold water on suggestions he was backing away from his trade war with China. Trump over the weekend denied agreeing to lift tariffs on some Chinese goods. (Associated Press)

Spending too much time at work isn’t just bad for you — it costs the global economy bns of USD, according to research from Rand Corporation (pdf). According to the report, individuals who are physically inactive “report, on average, a larger amount of working time lost due to presenteeism.” What they mean is simple: Too many of us are in the office far longer than necessary to get the job done. If we were more efficient in the workplace and worked longer hours as a result, we’d not just have more time in which to be physically active — we’d potentially live longer and be sick less often.

One in three of us lead sedentary lives, costing the world bns in lost GDP growth and seeing governments and people alike paying bns on healthcare that wouldn’t be necessary if we were all just a little bit more physically active.

Better still (for us as … individual human beings): The right kind of exercise can boost your memory and lower your dementia risk, even if you don’t start exercising until you’re older.

Enterprise+: Last Night’s Talk Shows

A handful of topics got the nation’s talking heads chattering last night. Among the highlights were the Finance Ministry’s new fiscal targets for FY2020-2021, and a late-night, one-hour talk with Naguib Sawiris.

Lamees spends an hour with Naguib: Al Kahera Alaan’s Lamees El Hadidi sat down with for an hour-long chat with Naguib Sawiris. During lengthy interview, Naguib praised the 2016 EGP float, and the central bank’s decision to cut interest rates over the past two months. He was however critical of the public sector crowding out private investment, and said Egypt has to decide where it stands on the economic spectrum.

Sawiris turns philanthropist? Sawiris repeatedly said that he wants to dedicate the rest of his professional life to “large-scale” charity work. You can watch the interview in full here: watch, runtime: 55:20.

The ministry's release of the FY2020-2021 preliminary budget statement won some airtime, with Al Hayah Al Youm’s Khaled Abu Bakr taking note (watch, runtime: 2:29). We have the story in this morning’s Speed Round, below.

Abu Bakr made sure to highlight economic praise we received from foreign news outlets after inflation recorded its lowest level in nine years, and hot money inflows into Egyptian treasuries increased (watch, runtime: 10:54).

Another late night mention of the ‘train ticket incident’: El Hekaya’s Amr Adib phoned Transport Minister Kamel El-Wazir for an update on the probe into the death of 23-year-old Mohamed Eid Attia, who is believed to have been forced to jump from the a moving train by a conductor disgruntled by the fact he wasn’t holding a train ticket (watch, runtime: 12:59). El Wazir said that the victim was ordered to leave the train after he refused to stop smoking and pay a fine for not having a ticket. The investigation is still running its course, he added.

AOI launches first smart electric bus route: El Hadidi reported that the Arab Organization for Industrialization has started running an electric bus route under an MoU signed earlier this year with China’s Shanghai Wanxiang Automotive, (watch, runtime: 3:19). The first M9 route will link Maadi to the Fifth Settlement. Commuters will pay their fares using prepaid smart cards scanned by a contactless machine. The move is part of the state’s digitization drive and the transition toward a “cashless economy.” Hona Al Asema’s Reham Ibrahim also took note (watch, runtime: 1:56).

El Sisi meets Chinese delegation: The news came during the second day of the Chinese Political Consultative Conference’s official visit to Egypt. Vice Premier Wang Yang met President Abdel Fattah El Sisi for talks yesterday, which was picked up by Masaa DMC’s Eman El Hosary (watch, runtime: 1:09) and Hona Al Asema’s Reham Ibrahim (watch, runtime: 1:24). We have the story in this morning’s Diplomacy + Foreign Trade, below.

Speed Round

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Egypt’s new sovereign wealth fund is looking to acquire a 30% stake in the Siemens / OC / Elsewedy power plants, the fund’s boss says, positioning the SWF’s interest in the three combined-cycle power plants in Burullus, Beni Suef, and the new administrative capital as “part of its drive to spur greater foreign participation in the Middle East’s fastest-growing economy.”

As many as six international investors have expressed interest in the transaction, which would see one or more of them carve up the rest of the equity in the plants, SWF CEO Ayman Soliman tells Bloomberg. A financial advisor for the transaction could be named as early as next week. Post-sale, the two shareholders could establish a joint venture that would then sign a power purchase agreement to sell the plants’ output to the government. The three 14.4 GW plants were co-built by Siemens, Orascom Construction, and Elsewedy Electric, and were inaugurated in July 2018.

Who are the six investors? Soliman stopped short of disclosing the names, but unnamed government sources told the press yesterday that Blackstone’s Zarou and Edra Power Holdings are in the race; they’re two companies that Electricity Minister Mohamed Shaker said back in May were interested in taking over the operation. Neither has formally confirmed their interest. Siemens, meanwhile, will be operating the plants until at least 2026, having signed an eight-year contract last September. Shaker said at the time that Siemens would continue to work alongside any new operator.

But it’s possible this isn’t yet cast in stone: Government sources told the local press yesterday that the SWF is studying other scenarios, including one in which it takes a 60-70% stake in the plants, leaving a minority stake for the private sector.

What’s the timeline? Soliman told Bloomberg the fund expects to finalize an agreement with investors by next year, while sources said the tariff at which the ministry will purchase electricity is expected to be agreed before the end of the current fiscal year in June. The tariff will factor heavily in determining the fair value of the shares, they added, suggesting that we may be waiting until the latter half of the year before we see any acquisition agreements.

The fund could in the future offer a stake in the plants on the EGX or an international bourse, Soliman said. The newly-appointed CEO did not provide further details, but said this would be one potential avenue for the fund to stimulate FDI inflows. Planning Minister Hala El Said had said last month that the SWF could set up several sub-funds to channel investment into the logistics, renewables, and manufacturing sectors.

BUDGET WATCH- FinMin says it’s targeting 6.4% growth, 6.2% deficit next fiscal year: The Finance Ministry is eyeing GDP growth of 6.4% in FY2020-2021, up from a targeted 6% for the current fiscal year, according to the ministry’s preliminary budget statement announced by cabinet yesterday. Local press reports had suggested last week that the ministry would pencil in 6.5% growth in next fiscal year’s budget, after initially forecasting GDP growing at a 7.2% clip. The ministry is also planning to narrow the overall budget deficit to 6.2% in FY2020-2021, from an expected 7.2% this fiscal year. On the public debt front, the ministry is expecting Egypt’s debt-to-GDP ratio to drop to 80%, as last week’s press reports had indicated.

How does this compare to current figures? Egypt’s economy grew by 5.6% in 1Q2019-2020. Economists polled by Reuters are expecting growth to come in at 5.7% in the next (2020-2021) fiscal year. The debt-to-GDP ratio stands at 90%, falling from a targeted 93% in FY2018-2019, while the deficit fell below the government’s target of 8.4% for the current fiscal year.

The ministry also plans to hold “national dialogue” (government-speak for consultations with a range of stakeholders) to talk about issues including cross-border trade, customs reforms, and accelerating spending on healthcare, education, and social housing, according to the statement.

The ministry was also out with its monthly report for September yesterday. Among the highlights were a slight improvement in y-o-y fiscal performance between July and August, a period during which the budget deficit was down to 1.3% of GDP from 1.6% in the same period last year. The ministry also achieved a primary budget surplus of EGP 2.3 bn in the period, up from EGP 1.9 bn in the corresponding two months of last year. Total revenues also grew at a faster pace (6.5% y-o-y) than total expenses (0.6%). Al Shorouk has a neat roundup of the key figures. You can also visit the report’s landing page here.

M&A WATCH- Cleopatra eyes regional expansion with potential acquisition of hospital company outside Egypt: Cleopatra Hospitals Group’s (CHG) board of directors has given its approval to the acquisition of up to 100% of an unnamed company that owns several hospitals in an Arabic-speaking country, CHG said in a regulatory filing (pdf). The transaction is still subject due diligence and a valuation, and talks with the potential seller are ongoing.

M&A WATCH- Ezz Dekheila launches MTO for Ezz Rolling Mills: Ezz Dekheila Steel presented yesterday a mandatory tender offer (MTO) to acquire 100% of Al Ezz Rolling Mills (ERM), according to a bourse disclosure. The MTO expires at the end of trading on 8 December, with the transaction set to close within five days of the MTO’s expiry. Ezz Dekheila’s offer would see the company buying ERM shares at EGP 23.07 apiece, or go the share swap route with every 51 shares of ERM swapped for 1 Ezz Dekheila share. The Financial Regulatory Authority had greenlit the MTO last week, paving the way for Ezz Dekheila Steel to acquire 89.9 mn shares in ERM to increase the parent company’s capital.

M&A WATCH- Italy’s Eni is not looking to acquire the Dana Gas’ assets in Egypt, Eni CEO Claudio Descalzi tells Bloomberg TV (watch, runtime: 7:14). Descalzi stressed that Eni is satisfied with its portfolio for the time being and plans to focus on developing current assets before biting off more. Dana Gas had received offers for buying its assets in Egypt and expects to make a decision on the sale after bidding closes by mid-November to focus its resources on its assets in Kurdistan. The company was looking to complete the sale in one transaction, but is also considering only a partial sale, which hinges on the offers presented.

STARTUP WATCH- Egypt’s Yodawy raises USD 1 mn in Algebra-led series A funding round: Yodawy, Egypt’s largest online digital pharmacy benefits platform, has raised USD 1 mn in a series A funding round led by our friends at Algebra Ventures and CVentures (a wholly-owned subsidiary of CIB), with the participation of angel investor firm ASI Ventures, according to a press release (pdf). It’s the latest in a string of investments Algebra has led this year, giving it today a portfolio that includes HolidayMe, Trella, Elmenus, iCommunity and Halan.

What’s Yodawy? The company, about a year old now, connects users to pharmacies, doctors, and insurance companies, allowing users to browse and order medication and other pharmaceutical products through a mobile app, with orders then being sent to the best matching pharmacy from a network of outlets. If a user’s medical insurance provider is part of the Yodawy network, its approval process is integrated into the digital order and dispatch.

The aim is to fill infrastructure gaps in the market for online medication ordering, pharmacy benefits and claims processing: Yodawy is working to increase the efficiency of procuring medication and processing claims, overcoming mismatches in supply and customer demand and allowing pharmacies to focus on providing a better in-store experience, while also collecting incremental revenues. Ultimately, it hopes to impact the whole sector, says co-founder and CEO Karim Khashaba.

STARTUP WATCH- Swvl plans launch in the Philippines, Indonesia and Bangladesh as expansion wave continues: Egyptian ride-hailing app Swvl plans to launch operations in Manila, Jakarta, and Dhaka by the end of next year, Shahzeb Memon, Swvl Pakistan’s general manager, told Reuters. The company launched in Pakistan’s Lahore in August, and quickly expanded to the capital, Islamabad, as well as Rawalpindi and Karachi. This is part of the company’s geographic expansion targets, including its plans to launch 50 buses in Lagos by mid-July, after having entered Kenya earlier this year. As of mid-September, Swvl was talking about launching in 10 or 20 new cities next year, with Dar es Salaam and Abidjan being of particular interest, as well as markets in South East Asia.

But will regulatory hurdles prove an impediment? Last week, a provincial government office in Pakistan informed Swvl and another similar service that they were operating without the necessary route permits and no-objection certificates from the government, according to Reuters. This follows news from the local Kenyan press last month that the company was reportedly defying orders from the country’s transport regulator to stop operations there, on the grounds that it doesn’t have the right permits needed to operate.

INVESTMENT WATCH- IFC could put USD 25 mn into Lorax SME PE fund: The International Finance Corporation could provide USD 25 mn to the Egyptian American Enterprise Fund’s Lorax Capital Partners, which is looking to raise USD 250 mn for its new SME-focused private equity fund, according to the local press. Lorax invests in a range of sectors in Egypt, and holds stakes in Sarwa Capital, Fawry, Misr Hytech, Orchidia, and Nermien Ismail Schools.

Egypt’s annual core inflation rose marginally in October to 2.7% from 2.6% the previous month, the CBE said yesterday (pdf). Annual headline inflation dropped to 2.4% last month, marking its lowest reading in nearly a decade, as we noted yesterday. Headline inflation accounts for a basket of goods and services in an economy while core inflation removes volatile products such as food and fuel. Reuters also had the story.

Last month’s inflation readings are fueling expectations that the Central Bank of Egypt’s Monetary Policy Committee will cut rates when it meets for the penultimate time this year on Thursday, 14 November. Our poll of economists last week had five out of the six calling either a half-point or a 100 bps cut. The CBE cut rates by 250 bps during the past two meetings, bringing the overnight deposit rate down to 13.25% and the lending rate to 14.25%. The main operation and deposit rates currently stand at 13.75%.

Speaking of the central bank: The (CBE) sold EUR 695 mn in one-year EUR-denominated treasury bills at an auction yesterday, official data showed (pdf). The bills were sold at an average yield of 1.434%, marginally lower than the 1.49% yield offered in a similar auction of EUR bills in August. The sale was 1.2x oversubscribed, with the CBE receiving bids amounting to EUR 851.5 mn.

LEGISLATION WATCH- The House of Representatives is due to vote on the Data Protection Act in a plenary session next week before sending it to President Abdel Fattah El Sisi for signature, according to Al Mal. Sources told the newspaper that some MPs are still trying to amend the controversial article that would impose a six-month prison term on non-compliance, which the reps say could discourage investors. The session should also see debate about who is exempt from the legislation after the ICT Committee agreed last week to give pass to the Central Bank of Egypt and the Financial Regulatory Authority.

Background: The 54-article bill lays out the ground rules for how businesses use personal information collected online. The bill, which was initially expected to be presented to the House last year, enshrines users’ right to access their private data at any time as well as give them the right to take legal action against parties responsible for data breaches and misuses of private information. The legislation also stipulates that a unit to protect personal data be established under the Information Technology Industry Development Agency whose members shall be selected by the Justice Minister and given powers of arrest. Check out our comprehensive breakdown of the legislation and how it may affect you and your business.

EARNINGS WATCH- Elsewedy Electric’s net profit dropped 22.2% to EGP 2.7 bn in 9M2019, down from EGP 3.5 bn during the same period last year, the company said in its earnings release (pdf). Revenues during the first nine months of 2019 increased 14.0% y-o-y to EGP 34.5 bn, which the company says was driven primarily by its turnkey projects segment, which compensated for a drop in revenues from the core wires and cables segment. The turnkey segment helped the company “consolidate our position as an industry leader, not solely in our core Egyptian market but across our expanding geographic footprint … with several EPC projects being rolled out across Egypt, the GCC and our new market of Tanzania providing a dynamic source of new value,” CEO Ahmed El Sewedy said. Elsewedy began commercial operations at its solar power plant in Aswan’s Benban park during 3Q2019, and has “moved beyond the mobilization phase” at its hydroelectric dam and power station project in Tanzania.

Oriental Weavers’ 3Q2019 net profits before tax increased 18.3% to EGP 160.4 mn, up from EGP 135.6 mn in the comparable quarter last year, according to a bourse disclosure (pdf). The company’s 9M2019 profits rose 36.9% to EGP 597 mn. Revenues during the third quarter of the year reached EGP 2.3 bn, while 9M2019 revenues dipped 0.2% y-o-y to EGP 7.583 bn.

Domty 3Q2019 net profits jump 47% y-o-y: Arabian Food Industries (Domty) reported 3Q2019 net profit of EGP 50.7 mn, compared to EGP 34.7 mn a year earlier, the company said in a bourse filing (pdf). Revenues came in at EGP 720.2 mn, compared to EGP 691.2 mn during the same period last year.

MOVES- Prime Holding has appointed Mohamed Othman as the head of the group’s project management department, according to a press release (pdf).

MOVES- Hani Abdel Latif (bio) has been appointed as non-executive chairman of the Arab Asset Management and Development (AAMD), succeeding Mohamed Ali Hussein Ali Elkalyouby, the company said in a statement to the EGX (pdf).


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Image of the Day

The Suez Canal has borne witness to 150 years of our history, and become a “lifeline”: The Suez Canal, which was first opened for navigation almost exactly 150 years ago, remains very significant to Egypt’s modern-day economy, having become “a lifeline for Egypt and countries around the world,” Suez Canal boss Osama Rabie tells AFP. This picture, which dates back to around 1860, shows workers building the canal — a process that took some ten years and was done with rudimentary tools. The canal has gone significant expansions since its 1869 inauguration, including the expansion dubbed the New Suez Canal, which was completed in 2015.

Egypt in the News

Leading the conversation in the foreign press this morning: Archaeologists have unearthed a large mummified animal from an excavation site south of the Sakkara pyramid in Giza, the Antiquities Ministry said yesterday. The ministry will announce more details on the creature — thought to be a lion or a lioness — following tests. The Associated Press and Sputnik both have the story.

Also in the foreign press: New York Times writer Michelle Green follows in the footsteps of 19th century female travelers, getting swept up in the mystique of ancient Egypt as she takes a dahabiya down the Nile. It’s an epically long piece sure to appeal to a certain segment of American society.

Worth Watching

Science and sightseeing come together to bring sustainable tourism to the Red Sea: As tourists continue to flock to the coral reefs of El Gouna, marine biologist Angela Ziltener is helping to guide their experience to ensure it is both enjoyable and sustainable, this CNN video shows (watch, runtime: 02:30). Ziltener’s primary aim is to protect the many Indo-Pacific bottlenose dolphins found in the area. She has spent years observing and researching them, with much of her work focused on their sleeping patterns. Ziltener has discovered that the sensitive creatures hunt in the ocean at night and come back to the coral reefs during the day to sleep — with one side of their brain actually staying awake. Making sure that tourists know how they can visit the coral reefs without disturbing the dolphins in their natural habitat is a crucial part of preserving the region’s diversity of marine life, she says.

Diplomacy + Foreign Trade

El Sisi, Madbouly talk Belt and Road with visiting Chinese delegation: President Abdel Fattah El Sisi held talks yesterday with Chinese Vice Premier Wang Yang, who is heading a delegation from China’s Political Consultative Conference on a three-day visit to Egypt, Ittihadiya said in a statement. Yang said that Beijing wants to increase Egypt’s role in its tn-USD Belt and Road Initiative, and further develop the Suez Canal economic zone. Prime Minister Moustafa Madbouly also met Yang for similar talks yesterday, a cabinet statement said.

Egypt’s exports from Qualifying Industrial Zones (QIZ) increased 14.3% to USD 760 mn in 9M2019, a Trade Ministry source told the local press. The increase was driven largely by textiles and readymade garment exports, which made up 97% of the total figure. Participants in the QIZ agreement, which Egypt signed with Israel and the US in 2004, enjoy access to the US market without tariffs provided they meet a minimum required amount of Israeli content. Twenty-six Egyptian companies have qualified for inclusion in the QIZ export agreement between January August, bringing the total number of companies under the agreement to 1,030.


Shell begins gas production from Silva field in Egypt’s West Delta concession

Shell began producing natural gas from its deepwater Silva well at the West Nile Delta field 9B earlier this month at a rate of 60-80 mcf/d, according to an Oil Ministry statement. The well is the third to come online at the field, after East Sfeir and East Swan which began production in October. The remaining three wells in the USD 600 mn 9B area are scheduled to begin production by March 2020.

Dana Gas collects USD 105 mn from Egypt

The UAE’s Dana Gas collected USD 105 mn from its Egypt assets in 9M2019, the company said in a statement (pdf). The Emirati company had received a total of USD 78 mn in payments from the government during 1H2019, reducing its outstanding receivables to USD 125 mn, the lowest level since 2011. Egypt has pledged to fully repay amounts owed to international oil companies by the end of 2019.

Egypt triples natgas exports from Idku to 1 bcf/d

Natural gas exports from the Idku liquefaction plant have more than tripled to 1 bn cubic feet/day (bcf/d), up from 300 mn cubic feet/day last month, an EGAS source tells the local press. The higher exports came after oversupply issues over the previous three months lessened and international prices stabilized. Exports were slashed by 80% between August and October on low global prices.


UAE company offers to establish USD 800 mn desalination plants in Egypt

An unnamed UAE company has proposed investing up to USD 800 mn to set up several desalination plants, with a total capacity of 500,000 cbm/d, Deputy Housing Minister Osama Hamdy told the local press. The government has established a committee to study the offer, which it will then present to the housing minister and the rest of Cabinet.

Basic Materials + Commodities

Egypt’s imported rice reserves suffice through the first week of February

Egypt has sufficient imported rice reserves to cover demand through the first week of February, Supply Minister Ali Moselhy said yesterday, according to Reuters. The minister has said that Egypt will put forward two tenders to buy rice from local suppliers.

Automotive + Transportation

VW interested in assembling nat-gas vehicles in Egypt

Volkswagen is interested in assembling natural gas-powered cars in Egypt, and is willing to increase its usage of locally-produced components, senior executives from the German company told Prime Minister Moustafa Madbouly in a meeting yesterday. The company would target the local market, but also export the surplus to foreign markets with which Egypt has trade agreements. The talks come as the finance and trade ministries work on Customs Act amendments that would give customs breaks for companies sourcing at least 10% of their components from the local market.

Suez Canal Authority maintains discounts for vessels from the Americas, Southeast Asia

The Suez Canal Authority (SCA) has renewed discounts on container ships and bulk carriers crossing the Suez Canal until June 2020. Bulk vessels travelling between the US Gulf, South America, and the Caribbean islands via the canal will see their 20-75% fee reduction in place, while those operating between South African, Mediterranean, and Black Sea ports will continue to benefit from breaks of 40-50%. A 45-65% discount to container ships en route to southern or southeast Asia from the US East Coast, meanwhile, will remain in place. The SCA has regularly been offering discounts to vessels passing through the canal in a bid to attract more traffic.

Banking + Finance

Marakez signs EGP 395 mn loan with Emirates NBD Egypt for new Ikea store

Fawaz AlHokair Group’s Marakez has signed a EGP 395 mn long-term loan agreement with Emirates NBD Egypt to finance a 20k sqm Ikea store at Mall of Arabia, NBD corporate banking head Amr Azab said. Marakez inked a long-term lease agreement last December with Al Futtaim Misr for Retail, which holds the franchise for the Swedish furniture retailer, to open an Ikea store in its flagship mall. A smaller outlet opened its doors earlier this year to serve customers until the large store debuts in 2020.

GB Auto’s Drive plans a second securitized bond issuance

GB Auto’s consumer finance arm Drive plans to move ahead with its second securitized bond issuance over the next year, the company’s Ahmed Osama tells the local press. Drive completed a EGP 425 mn issuance last week, marking the first such offering by a factoring company in Egypt.

Other Business News of Note

N-Sea wins Egypt, UAE contracts worth GBP 11.6 mn

Subsea inspection, maintenance and repair firm N-Sea has won a series of contracts in Egypt and UAE worth a combined GBP 11.6 mn, according to Energy Voice. In Egypt, N-Sea will complete saturation and air diving work, while in the UAE, the contracts involve work in Abu Dhabi and Sharjah in site investigations and jetty repairs.

Egypt Politics + Economics

House human rights committee head dismisses UN report on Morsi death

The head of the House Human Rights Committee yesterday dismissed a UN report that claimed that “brutai” prison conditions caused the death of former president Mohamed Morsi. Alaa Abed told the Associated Press that the findings were an attempt to tarnish the reputation of the government. “They are talking about Morsi, and they are trying to tell the world in a way or another that Morsi died due to prison conditions,” he said, claiming that he “had everything he needed” and lived in a “big room.” A UN report released at the weekend said that there was “credible evidence” that prison conditions led to Morsi’s death and that thousands of others remain at “severe risk.”

On Your Way Out

Environment agency files complaint against EGPC for polluting Ras Ghareb beach: The Red Sea regional branch of the Egyptian Environmental Affairs Agency is filing a legal complaint against the Egyptian General Petroleum Company (EGPC) for polluting the Ras Ghareb Corniche Beach, according to Egypt Independent. Prosecutors will determine whether the EGPC will be required to pay a fine or how to otherwise rectify the situation.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.08 | Sell 16.21
EGP / USD at CIB: Buy 16.09 | Sell 16.19
EGP / USD at NBE: Buy 16.09 | Sell 16.19

EGX30 (Monday): 14,770 (-0.2%)
Turnover: EGP 911 mn (25% above the 90-day average)
EGX 30 year-to-date: +13.3%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.2%. CIB, the index’s heaviest constituent, ended down 0.4%. EGX30’s top performing constituents were Egyptian Resorts up 5.5%, Oriental Weavers up 2.3%, and Ezz Steel up 1.8%. Yesterday’s worst performing stocks were AMOC down 4.3%, Sidi Kerir Petrochemicals down 3.9% and Orascom Construction down 2.1%. The market turnover was EGP 910 mn, and regional investors were the sole net sellers.

Foreigners: Net long | EGP +9.7 mn
Regional: Net short | EGP -26.6 mn
Domestic: Net long | EGP +16.9 mn

Retail: 49.4% of total trades | 46.6% of buyers | 52.1% of sellers
Institutions: 50.6% of total trades | 53.4% of buyers | 47.9% of sellers

WTI: USD 56.86 (-0.7%)
Brent: USD 62.30 (-0.3%)

Natural Gas (Nymex, futures prices) USD 2.64 MMBtu, (-5.5%, December 2019 contract)
Gold: USD 1,457.10 / troy ounce (-0.4%)

TASI: 7,922 (+0.6%) (YTD: +1.2%)
ADX: 5,087 (-0.1%) (YTD: +3.5%)
DFM: 2,673 (+0.5%) (YTD: +5.7%)
KSE Premier Market: 6,256 (+0.1%)
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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.

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.

17 November (Sunday): The share price for the Aramco IPO will be announced (expected).

18 November (Monday): AmCham’s US-Egypt Proposer Forum in Cairo. US trade delegation visits Cairo to discuss investments in health, energy and information technology as part of the gathering.

20-29 November (Wednesday-Friday): Cairo International Film Festival, Cairo Opera House, Egypt, Cairo, Egypt.

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.

23 November (Saturday): HHD extraordinary general assembly to approve the 10% stake + management request for proposal

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: A Chinese automotive company delegation will visit Egypt to sign an agreement with El Nasr Automotive Manufacturing Company

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 December (Tuesday): Emirates NBD / Markit PMI for Egypt released.

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

4 December (Wednesday): Subscription to the Aramco IPO will begin (expected).

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 December (Tuesday): Egypt Automotive summit, Nile Ritz Carlton, Cairo.

10-11 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

11 December (Wednesday): First day of trading on the Aramco IPO (expected)

12-14 December (Thursday-Saturday): 16 Egyptian real estate development companies will showcase their products at IPS Riyadh, Riyadh, Saudi Arabia

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

17-21 December (Tuesday-Saturday): 2019 Automech Formula car expo, Egypt International Exhibition Center, Cairo.

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.

February 2020: An Italian business delegation will visit Egypt to discuss investments in the Port Said industrial zone.

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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