Tuesday, 19 November 2019

Can would-be issuers now breathe a sigh of relief as Aramco pulls international marketing of IPO?


What We’re Tracking Today

It’s a reasonably quiet morning on the business / finance / econ news front in Egypt. The three big news drivers of the day:

#1- Talk of a cabinet shuffle is still in the air — or on the airwaves, if you prefer, a day after state newspaper boss Yasser Rizk brought up the notion on a certain talk show. Lamees El Hadidy picked up the topic last night on her show, adding impetus to the notion that something may be in the works. We have chapter and verse in this morning’s roundup of Last Night’s Talk Shows, below.

#2- The finance community is getting its head around Aramco having pulled the plug on foreign marketing of its IPO — an offering that had prompted many would-be issuers to hold back from late-in-the-year capital raising activities. Saudi Aramco has cancelled plans to take its IPO roadshow outside of the Gulf as foreign appetite falls far short of expectations, sources close to the matter told the Financial Times. The Saudi oil giant is reportedly no longer holding meetings with European investors and has canceled planned roadshows in the US, Asia and, finally, London. The book-building process — which is “all local now” — is expected to continue until 4 December, with the stock to price the following day.

Localizing the IPO means the government will have more influence over the company than if western investors were involved, Bloomberg says in a recap of the obvious.

The Aramco IPO visualized: Bloomberg is out with five charts that put the IPO into perspective.

#3- President Abdel Fattah El Sisi kicked off his trip to Berlin yesterday with a flurry of meetings with political and business figures alike. The president is in the German capital for the G20 Compact with Africa conference, which kicks off today, Ittihadiya said in a statement. El Sisi will represent the African Union during the event, which will also see Egypt’s Investment Ministry sign a EUR 154 mn loan to support renewable energy, water management, waste recycling, and technical education. Look for the visit to dominate the airwaves and the front pages of many newspapers today and tomorrow.

*** We also have a wide selection of industry news worth a skim this morning, with everything from infrastructure tender updates to the latest on short selling.

We should get a better idea tomorrow of whether to price in more rate cuts in the US of A this year: The US Fed’s minutes from its October meeting are set to be released tomorrow, and the market will be on the lookout for confirmation on whether the central bank is pausing its easing cycle, the Financial Times says. Fed Chairman Jay Powell indicated at the post-meeting presser last month that the so-called “mid-cycle adjustment” was now at an end, meaning that the bank was unlikely to make a fourth cut this year at its meeting, scheduled for next month.

Fed policy will stay “non-political,” Powell tells Trump: Fed Chairman Jay Powell told President Donald Trump that the Federal Reserve’s monetary policy will remain “non-political” despite the president’s constant public criticism of the central bank. Trump adopted a marked change of tone after the meeting, describing the encounter as “very good and cordial.” A Fed statement said that Powell’s comments “were consistent with his remarks at his congressional hearings last week,” and that they didn’t talk about his expectations for monetary policy going forward.

The trade of goods around the world has lagged over the past few months — and y-o-y growth is declining, according to the World Trade Organization’s (WTO) Goods Trade Barometer (pdf), which gauges momentum in global trade. The barometer reading for September came in at 96.6, a slight improvement from the previous 95.7 reading, but still short of the 100 that would indicate growth is in line with medium-term trends.

Which goods are particularly weak? Trade is lagging most in electronic components, raw materials, and air freight, data shows.

It’s not all bad news: The barometer for export orders, automotive products, and container shipping “have firmed up” to enter on-trend growth territory.

Going forward: “The latest barometer reading suggests that goods trade will likely remain below trend in the third quarter and into the fourth quarter,” the WTO says.

Among the international headlines you should know about this morning:

  • Leaked documents reveal attempts by the Ikhwan to form anti-Saudi alliance with Iranian intelligence: A trove of leaked documents obtained by the Intercept and the New York Times shows (among many other things) that the Muslim Brotherhood suggested to the Iranian Quds Force forming an alliance against Saudi Arabia during a 2014 meeting in Turkey.
  • HP turned down Xerox’s USD 33 bn acquisition offer, saying the offer bid was too low, but has made it clear it is not ruling out further discussions, according to the Wall Street Journal.
  • Air Arabia in bumper USD 14 bn Airbus purchase: Emirati budget carrier Air Arabia will buy 120 jets from Airbus in a huge USD 14 bn agreement finalized at the Dubai Airshow yesterday, Bloomberg reports. The order will allow the airline to expand its increase its routes in Southeast Asia and Africa. Slowed passenger growth and a drop in air cargo traffic are driving down sales of the biggest jets produced by Airbus and Boeing, according to the Wall Street Journal. The Middle East has had the lowest passenger growth rate around the world this year, and regional airlines Emirates, Qatar Airways, and Etihad Airways together make up to 10% of the two manufacturers’ backlogs.

Our first podcast, Making It, is launching this Friday. Get ready for the first episode, featuring a CEO whose business you may well pass by every day — and that has always had your stomach’s best interests at heart.

Want a sneak peek? Listen to our trailer here (listen, runtime: 2:02). You can also subscribe now on Apple Podcast.

Enterprise+: Last Night’s Talk Shows

An eventful night on the airwaves: The nation’s beloved talk show hosts continued to dwell on the Grand Ethiopian Renaissance Dam (GERD) negotiations and President Abdel Fatah El Sisi’s visit to Germany. The highlight of the night, however, came on Al Kahera Alaan as host Lamees El Hadidi looked into chatter on Sunday of an upcoming cabinet shuffle.

Lamees investigates cabinet shuffle speculation: El Hadidi asked whether rumors of an imminent cabinet shuffle — started by Akhbar Al Youm Chairman Yasser Rizk, who suggested on Sunday that up to 10 ministers could be on their way out — would bring about a fundamental change in government policy or result only in minor tweaks to the Sisi administration’s agenda.

El Hadidi spoke to political pundit Abdel Moneim Said. Said, who is also an advisor to the Egyptian Center for Strategic Studies and the CEO of Al Masry Al Youm, implied that shuffles based on ministerial performance are unlikely to result in substantial changes in policy direction. What we should turn to is research on good governance and rethink the abstract idea of a ministry, he said. Said also stressed the need for a less centralization and how the country should look to devolve power to our traditionally limited and underutilized local government.

You can watch Lamees’ phoneer with Said here (runtime: 10:25).

GERD also gets some airtime on Al Kahera Al Aaan: Lamees sat down for an interview with Ethiopian ambassador to Cairo Dina Mufti to talk about progress in the GERD talks. Mufti mostly echoed what he told El Hekaya’s Amr Adib earlier this week, but spoke in a much longer segment from a foreign affairs perspective (watch, runtime: 25:01).

Media’s focus on Abiy Ahmed war comments was a misrepresentation -Ethiopian ambassador: The media has “misconstrued” Ethiopian Prime Minister Abiy Ahmed’s statement last month about his country’s willingness to go to war, Mufti told El Hadidi. “He [Ahmed] was talking about the need for solving the case peacefully … without any war … without any conflict,” he said. Lamees also asked Mufti whether Ethiopia, with a dam now 69% complete, has been purposefully stalling the negotiations to establish de facto control over the Nile. “This is not the case,” Mufti said, adding that the fact that Ethiopia took the initiative and sent a delegation to Alexandria last summer to meet El Sisi proves otherwise.

GERD talks finally began showing signs of moving forward last weekend after Egypt, Sudan and Ethiopia were said to have reached the closest they have ever been to agreement on the timetable of filling the dam.

Travel diaries: Al Hayah Al Youm’s Lobna Assal, meanwhile, recounted El Sisi’s first day in Berlin, taking note of his meeting with German counterpart Frank-Walter Steinmeier and German Bundestag President Wolfgang Schäuble (watch, runtime: 6:52). We have more on this in Diplomacy + Foreign Trade, below.

Also getting some airtime: Prime Minister Moustafa Madbouly gave a keynote speech during yesterday’s AmCham-organized US-Egypt Prosperity Forum in Cairo. Madbouly noted that US investments in Egypt have witnessed 26% y-o-y growth so far into 2019, and the number of US companies has reached 1500 — operating in the sectors including oil and gas, renewables, manufacturing, and ICT. Assal was among those taking note (watch, runtime: 2:34).

ٍShehata isn’t the hero Egypt deserves, he’s the one it needs: No one can lead Egypt’s national football team better than former coach Hassan Shehata, football analyst Reda Abdel Aal tells Adib (watch, runtime: 3:26). Abdel Aal’s opening remarks when he phoned into El Hekaya come as the Pharaohs’ new coach, Hossam El Badry, led Egypt to two back-to-back draws against lower tier teams in the Afcon 2021 qualifying round.

Speed Round

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Tharaa mulls cooperation with Oman Investment Fund: Egyptian sovereign wealth fund Tharaa is in talks with the Oman Investment Fund to set up a partnership akin to the USD 20 bn investment platform it established with the Abu Dhabi Development Holding Company (ADDH), said Planning Minister Hala El Said, according to the local press. Tharaa CEO Ayman Soliman will reportedly kick off a roadshow of sorts in the GCC early next month to promote Egypt’s fund and probe other potential partnerships, according to El Said.

Tharaa and ADDH have already settled on the first five investments for their joint investment platform, and the relevant studies are currently underway, Soliman tells Al Mal. The five investment ventures are in the agriculture, financial services, logistics, real estate, and tourism sectors, he said.

As Tharaa pushes for regional cooperation, the selection process for domestic assets also begins: The government is currently looking at domestic assets to bring under Tharaa’s umbrella, and will set up sub-funds for specific sectors that have a wide range of assets and require their own branch of the sovereign wealth fund, El Said noted. Among the sectors currently under study is tourism, with the Public Enterprises Ministry looking at hotels in Cairo, Luxor, and Aswan. The Shepheard Hotel could be brought under Tharaa’s umbrella if its long-stalled development contract is not finalized within one month. All eligible assets will be selected within one month, according to El Said.

M&A WATCH- Is Al Madar back in the running to acquire Emisal Salts stake? A consortium of Kuwait’s Al Madar Finance & Investment Company and the Saudi Egyptian Industrial Investment Company (SEII) is considering whether to again bid for a stake in state-owned Emisal Salts after Egypt Kuwait Holding (EKH) withdrew its offer on Monday, according to Al Mal. The companies plan to approach Emisal’s shareholders with an offer above the current EGP 1 bn valuation — a more than 40% premium to the EGP 700 mn bid they lodged in June.

Has EKH has dropped its acquisition bid for good? EKH said yesterday that it had withdrawn its bid after shareholders failed to pledge a majority of shares in its tender offer. It’s unclear whether EKH is planning to come back with another offer. However, the National Bank of Egypt (NBE) — which holds a 49.8% stake — is reportedly now the only shareholder willing to offload. If true, that means no bidder is likely to get a majority stake. Several other minority shareholders originally agreed to sell their stakes, but later changed their minds when suggestions of a bidding war drove up their price expectations, according to reports in the domestic press. Al Madar is telegraphing in the press that it is willing to purchase NBE’s non-controlling stake.

Background: The Al Madar consortium was previously reproted to have been bidding against EKH for Emisal, but NBE (which is leading the sale process on behalf of other state-owned shareholders) turned down its offer and pursued talks with EKH. EKH then reportedly reached an agreement in July with NBE and the Chemical Industries Holding Company (CIHC), which owns 13.1% of Emisal, to acquire a 52.8% stake in the company. EKH submitted the tender offer back in February.

INVESTMENT WATCH- B Investments to invest EGP 200-300 mn in 1H2020: Private equity outfit B Investments Holding is considering investing EGP 200-300 mn in education, healthcare, or food and beverages during the first half of 2020, IR Director Omar El Labban told the local press.

B Investments also has its eyes on HHD management rights: According to El Labban, B Investments is one of the three companies that submitted a bid to acquire a 10% stake with management rights in Heliopolis Housing & Development (HHD). The private equity firm, which is managed by BPE Partners, is currently waiting on HHD to select the winning bid, which HHD said could happen as early as this month.

CBE sells USD 1.56 bn in 1-year USD T-Bills: The Central Bank of Egypt (CBE) sold yesterday USD 1.56 bn in 1-year USD-denominated T-bills, official CBE data shows. The bills carry an average yield of 3.587%, falling slightly from 3.87% in the last similar auction in June, which saw Egypt sell USD 715 mn worth of paper.

Yields are low in local currency auctions following rate cut: The CBE accepted EGP 687 mn-worth of subscription requests in a separate auction yesterday for EGP 3.75 bn-worth of five- and 10-year treasury bonds, CBE data showed (pdf). Yields fell by nearly 50 basis points for 10-year bonds to 13.797% from 14.225% in the auction for same-tenor bonds last week. Five-year bond yields also dipped to 13.837% from 14.296%. Three- and nine-months bills similarly fell by a close margin at an auction earlier this week.

The CBE’s Monetary Policy Committee cut interest rates by 100 bps in its meeting last Thursday, resuming its easing cycle. The move came as no surprise amid low inflation figures, and a worldwide trend toward stimulating growth. Analysts saw the cut as unlikely to dent the attractiveness of Egypt’s debt, particularly as the Fed also moved to cut rates and as Egypt’s real rates remain among the world’s highest.

Subsidized food prices to be reviewed every quarter -El Moselhy: Prices of commodities subsidized by ration cards will be reviewed every quarter in line with the EGP’s performance against the USD, Supply Minister Ali El Moselhy said yesterday, according to Bloomberg. It is clear when the ministry will introduce the new pricing mechanism. The announcement comes two days after El Moselhy said that prices of several subsidized foodstuffs would be lowered in December.

Background: The government last month reinstated around 1.8 mn people to the food subsidy rolls after they had been removed in the ministry’s effort to cut its subsidy budget. Around three-quarters of Egypt’s 100 mn-strong population rely on the government’s food subsidy program. El Moselhy’s statement yesterday came one day after state newspaper boss Yasser Rizk singled out El Moselhy as being at risk in an upcoming cabinet shuffle. Rizk blamed El Moselhy for allegedly mismanaging the reform of the subsidy card system.

LEGISLATION WATCH- House committee looks set to amend controversial Article 35 in Central Depository Act: The House Economic Committee has informally agreed to amend the controversial Article 35 of the Central Depository and Registration Act to include regulations on companies’ ownership structure, committee member Rep. Mohamed Badrawy told Al Mal. The amendment would outline the requirements instead of leaving the matter in the Financial Regulatory Authority’s (FRA) hands, the idea of which has previously ruffled feathers within the committee.

What’s all the fuss about? Members of the House Economic Committee have voiced concerns that proposed amendments to the act could have a negative impact on the securities market, singling out Article 35, which grants the FRA significant powers over companies licensed to provide clearing and depository services. Under Article 35, the regulator would determine the ownership structure of companies, set the conditions for board formation, and determine the minimum amounts of issued and paid-in capital. The FRA would also determine the conditions and procedures of licensing, while companies licensed for clearing and settlement of forward contracts would need to have a list of rules and procedures approved by the authority.

The committee is also set to lower the fines laid out in the act to EGP 200k from an original EGP 500k, and will remove articles the members of parliament see as “restricting freedoms,” Badrawy said, without providing further details. The committee will hold a final vote on the amendments this week before presenting the bill to the general assembly for discussion.

LEGISLATION WATCH- Parliament is a step closer to making rumormongering a criminal offense: House of Representatives Speaker Ali Abdel Aal has referred to the general assembly the proposed “anti-rumor law,” which was drafted by his deputy Soliman Wahdan, Al Shorouk reports. The legislation would introduce prison sentences of between six months and three years and fines of up to 100k for those found guilty of spreading disinformation. It’s not clear when the House will begin discussing the bill, whether it will first be referred to committee for debate, or when it will be put up for a vote.

How does parliament plan to identify “fake” news? The three-article bill would set up a cabinet-supervised body to identify, track, and address rumors and disinformation, a role we understand is already fulfilled by cabinet’s Information Decision Support Center (IDSC). The legislation is silent on how the government will actually determine what is “fake,” and doesn’t specify the powers that the supervisory body will have beyond “taking legal action internally and externally.”

Also from yesterday’s session: The House has signed off on 49 recommendations from MPs and passed them on to the Madbouly government for consideration. Many of the recommendations had to do with education and youth development. They include installing cameras in school classrooms to monitor teacher performance, exempting poor families from tuition fees, and renovating, expanding, or extending funds to youth centers (state-sponsored sporting clubs). Al Shorouk has the full list.

El Sisi kickstarts Berlin visit, drumming up business interest: President Abdel Fattah El Sisi and Investment Minister Sahar Nasr discussed Mercedes-Benz’s plans to cooperate with Egypt on rolling out electric and natural gas-powered public transport vehicles with Daimler Vice President Eckart Von Klaeden in Berlin yesterday, Ittihadiya said in a statement. The statement was otherwise scant on the details of the German auto manufacturer’s planned venture.

El Sisi meets German president: The president discussed strengthening economic ties with Germany, and regional affairs, with German President Frank-Walter Steinmeier, according to Ittihadiya.

Expect German partnerships with Military Production Ministry, AOI: El Sisi, Military Production Ministry Mohamed El Assar, and Arab Organization for Industrialization head Abdel Moneim El Terras also sat down yesterday with a delegation from the Federation of German Security and Defence to discuss cooperating in heavy industry, according to a separate statement. Other meetings between El Sisi and German officials included a sit-down with Bundestag President Wolfgang Schäuble.

The president landed in Berlin on Sunday for the G20 Compact with Africa High-Level Conference, which kicks off today in the German capital.


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The Macro Picture

Correctly implementing the African Continental Freetrade Agreement (AfCFTA) could unlock USD 3 tn-worth of growth across the continent, Baker McKenzie says. According to research from the law firm and Oxford Economics, countries need to double down on eliminating limitations related to infrastructure, resources, and other regional trade agreements that might undermine the efficiency of the continental agreement. AfCFTA, which came into force on 30 May, will create one of the world’s largest trade areas and aims to boost intra-regional trade, eliminating 90% of tariffs and allowing goods and services to move freely on the continent. The agreement also promises to increase intra-African trade by 52.3% and bring more FDI — which currently stands at less than a tenth of what goes into Asia — by offering would-be investors access to economies of scale and making export processes easier.

The agreement could also help prop up manufacturing GDP in Africa, and reduce African countries’ reliance on importing manufactured goods from Europe, China, and India, the research indicates. As it currently stands, the bulk of Africa’s exports are raw materials and other natural resources, while imports are concentrated in manufacturing products, industrial machinery, and transport equipment. Intra-African trade of manufactured products is weak and is largely comprised of re-exported goods originating from outside the continent, signaling that “African nations do not trade more with each other because of a misalignment between what various African countries need and what is produced on the continent,” says Virusha Subban, a partner at the law firm focused on customs and trade.

Growth across Africa from the agreement is doomed to be inequitable: Some countries in the continent appear to be in a better starting position to capitalize on the benefits of the agreement, the research shows. Countries that already have trade integration with neighboring countries and those with open economies stand to gain the most. Egypt, for example, has a “very limited” trade relationship with its African peers, despite having a much larger economy than others. “The results of our analysis show countries that have already been bold enough to create more open, business-friendly environments stand to make the biggest gains. The message should be that freeing up trade is going to be the big engine of African growth through the 2020s and the first movers have the biggest advantages,” says Baker McKenzie Partner Mattias Hedwall.

Egypt in the News

The possibility of the US imposing sanctions on Egypt for purchasing Russian arms is leading the conversation in the foreign press this morning: A senior US official has reiterated threats made last week by the secretary of state and defense minister to place sanctions on Egypt if it follows through with a USD 2 bn purchase of Russian fighter jets. “It puts them at risk of sanctions and it puts them at risk of loss of future acquisitions,” Assistant Secretary of State for Political-Military Affairs R. Clarke Cooper told reporters at the Dubai Airshow. The Associated Press, Reuters, Bloomberg, Sputnik, and The National all have the story.

Worth Watching

Are global investors becoming more gloomy? ‘Growth’ stocks, or those likely to generate returns in the future, have for a full decade “solidly” outperformed their ‘value’ counterparts. This remained true for the better part of the past decade, and almost ended a longstanding investor debate about which type of stock is better to own: Those of high-growth innovative companies or of established players more grounded in today’s business and economic cycle.

But just when everyone and their mothers were turning to growth stocks, the trend this year reversed, making way for two different market interpretations. Some watchers see it as a sign of optimism about prospects in value-driven industries and a sign of trust in the economy. Others, meanwhile, are catching a scent of global growth jitters and a pessimistic economic outlook, explains the Financial Times’ US finance editor Robert Armstrong (watch, runtime: 2:55).

Diplomacy + Foreign Trade

Nassar talks potential industry investments with US Commerce Dept.’s Ian Steff: Trade and Industry Minister Amr Nassar met with US Deputy Assistant Secretary of Commerce for Global Markets Ian Steff to talk potential US investments in Egypt’s industrial sectors, including automotive and automotive component manufacturing, according to a ministry statement. Nassar also pointed to potential investments in oil and gas, renewable energy, telecoms, and IT. US companies are “committed” to investing and expanding in Egypt, Steff separately said at the AmCham-organized US-Egypt Prosperity Forum yesterday, according to Al Mal.


South Korea’s GKC to break ground on USD 225 mn waste-to-energy plant next month

South Korea’s Global Knowledge Company (GKC) will break ground early December on a USD 225 mn waste-to-energy WtE power plant in Beheira, the CEO of the company’s MENA branch, Ihab Tahoun said. The plant is aiming to generate electricity from 600 tonnes of waste a day, and will be the first of 10 WtE plants GKC has in store for Egypt in the near-future, Tahoun added. Tahoun didn’t mention when the plant is slated for inauguration. Contracts to develop the plant were signed back in 2017, but GKC has since kept construction on hold until cabinet sets a feed-in tariff rate for WtE projects.


Hassan Allam-led consortium frontrunner in Sixth of October dry port tender

A Hassan Allam-Concord-PSA consortium appears to be the frontrunner in the Sixth of October dry port tender, having reportedly submitted a better technical offer than the Elsewedy Electric-led consortium, an unnamed source told the local press. Elsewedy partnered with Schenker Egypt and 3A International to bid on the project. These consortiums are the only two competing for the tender. The winning bid is expected to be announced this month. The 100-feddan project will comprise cargo zones, customs clearance offices, and multipurpose storage facilities linked to key seaports, and will be developed under a public-private partnership framework.

Egypt to announce details on Alamein-Ain Sokhna high-speed rail soon- minister

The Transport Ministry is close to completing studies of the high-speed electric rail connecting Alamein and Ain Sokhna via Sixth of October, and will announce details on the project soon, minister Kamel El Wazir said on Sunday, according to Al Mal. The ministry is currently considering bids from two consortiums of predominantly Chinese companies for the project, which is expected to cost between USD 7-8 bn 8. The first consortium comprises Arab Contractors, Orascom, China Railway Engineering Corporation (CREC), and China State Construction Engineering, while the second includes Samcrete, state-owned Petrojet, China Civil Engineering Construction Corporation (CCECC), and China Railway Construction Corporation Limited (CRCC). We noted earlier this year that French state-owned railway company SNCF and Germany’s Siemens are part of the second alliance. It is unclear if they have pulled out.


Raya Foods to invest EUR 7.5 mn over three years

Raya Holding subsidiary Raya Foods is planning to invest EUR 7.5 mn over the next three years to finance its expansion plans, Raya Group CFO Hossam Hussein tells the local press. Hussein did not disclose any details on the company’s planned expansions. The company is also planning on bringing online a new USD 2.5 mn frozen food production line at the beginning of 2020, and began trial operations on the line earlier this month, Hussein says.

Health + Education

Pharma producers seek further exemption from VAT but ministry rejects

Local pharma manufacturers are angling for a wider exemption from value-added tax (VAT) on their products, according to Ahram Gate. The manufacturers were granted VAT exemption in 2016 on active ingredients used in their products, but they now argue that the exemption does not cover other production input, such as paper and bottles. The Finance Ministry seems to be standing its ground on this one, saying that the pharma industry’s raw materials and active ingredients are indeed VAT-exempt, signaling that it will not allow for further concessions.


Thomas Cook’s debt to Egypt hit EUR 14 mn

Liquidated British tour operator Thomas Cook’s debt to Egypt is at EUR 14 mn, half of which are owed to its local operator, Blue Sky travel group, Blue Sky Chairman Hossam El Shaer said at a presser, according to Al Mal. Thomas Cook should be able to repay its debt once it sells off its assets, El Shaer said. The British company had abruptly announced its liquidation in September its total debt hit USD 1.7 bn, resulting in the cancellation of 25k reservations to Egypt booked up to April 2020.

Egypt’s Red Sea hotels’ occupancy rate reaches 75% this year

The occupancy rate at Red Sea hotels is at 75% so far this year, up from 65% last year, head of the Tourism Ministry’s hotels division Abdel Fattah El Aasy tells Reuters’ Arabic service. El Aasy expects the occupancy rate to rise further to 80-85% during the holiday season in December.

Telecoms + ICT

Communications Ministry cooperates with German, Japanese healthcare service providers

The Communications Ministry is cooperating with an unnamed German company to develop early detection technologies for some diseases, and a Japanese company to test pesticides, Minister Amr Talaat said at AmCham’s US-Egypt Prosperity Forum yesterday. The ministry is also working with several companies in China, Japan, the US, the UK, France, and Russia to boost startups and create youth jobs.

Also from the Amcham conference: The ministry will issue electronic smart cards to farmers next year to ensure they receive their entitled amount of fertilizer and pesticide subsidies, Talaat said. The program was announced in 2016, and is also meant to prevent corruption in the Agriculture Ministry, Al Monitor said at the time.

CIAF Leasing signs USD 161 mn agreement with Embraer for three aircraft

CIAF Leasing has agreed to buy three new E190 aircraft from aerospace firm Embraer for USD 161.4 mn, the Brazilian conglomerate announced in a statement yesterday. The agreement, signed during the Dubai Airshow this week, will see the planes delivered in 4Q2020. CIAF already has three Embraer planes in its fleet, two of which are leased to Jasmin Airways, the other with Air Cairo. CIAF Leasing is a joint venture between state-backed shareholders and US leasing company Aviation Capital Group.

Also from the airshow: EgyptAir has received the sixth A220-300 Airbus from Canada’s Bombardier as part of a contract that will see it receive 12 planes by 1H2020, the flag carrier said in a statement. The airliner also signed two agreements with Irish airplane leasing company AerCap for two Dreamliner B787-9 jets to join its fleet, as well as to receive seven of a total of 15 A320neo planes under an older contract, Al Mal reported.

Banking + Finance

FRA grants short selling licenses to 51 brokerages

The Financial Regulatory Authority has granted short selling licenses to 51 brokerage firms, an unnamed FRA official tells Reuters. We know from previous news reports that Pharos was among the latest to acquire the license in September, joining a growing list that also includes EFG Hermes, CI Capital, Prime Holdings, HC Securities, Cairo Capital Securities, Shuaa Securities, Arqaam, the Arab African International Securities, and Premiere Securities. Short selling could officially be introduced to the EGX as early as next month.


Egypt held to 0-0 draw with Comoros in Afcon 2021 qualifier

Egypt was held to a disappointing goalless draw in their Afcon 2021 qualifier with Comoros yesterday, King Fut reports. Chances were few and far between in an uneventful game that followed the Pharaoh’s 1-1 draw with Kenya last Thursday. Egypt currently sit in third place in the group with two points, equal with second-placed Kenya and behind group leaders Comoros with four points. The next ties will be played on 31 August 2020, when Togo travel to Egypt and Kenya host Comoros.

On Your Way Out

GIZ launches Egypt’s first insurance technology hackathon: German development agency GIZ is launching InsurHack, the first insurance technology “hackathon” in Egypt, through its insurance entrepreneurship platform InsurTech, according to an emailed statement (pdf). The competition, which runs from 28 November through 1 December, will see 10 teams coming up with business ideas and solutions for specific challenges in the insurance industry. The team will be competing for a EGP 100k cash prize and a fast-tracked selection process for the AUC Venture Lab incubator, in addition to other prizes.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.06 | Sell 16.18
EGP / USD at CIB: Buy 16.06 | Sell 16.16
EGP / USD at NBE: Buy 16.07 | Sell 16.17

EGX30 (Monday): 14,379 (-1.2%)
Turnover: EGP 535 mn (26% below the 90-day average)
EGX 30 year-to-date: +10.3%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 1.2%. CIB, the index’s heaviest constituent, ended down 1.0%. EGX30’s top performing constituents were Egyptian Resorts up 1.3%, Abu Dhabi Islamic Bank up 0.1%, and Ibnsina Pharma up 0.1%. Yesterday’s worst performing stocks were Orascom Investment Holding down 3.1%, Madinet Nasr Housing down 3.0% and TMG Housing down 2.6%. The market turnover was EGP 535 mn, and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -11.9 mn
Regional: Net long | EGP +6.0 mn
Domestic: Net long | EGP +6.0 mn

Retail: 47.8% of total trades | 48.1% of buyers | 47.5% of sellers
Institutions: 52.2% of total trades | 51.9% of buyers | 52.5% of sellers

WTI: USD 56.94 (-0.2%)
Brent: USD 62.44 (-1.4%)

Natural Gas (Nymex, futures prices) USD 2.55 MMBtu, (-0.8%, December 2019 contract)
Gold: USD 1,470.70 / troy ounce (-0.1%)

TASI: 8,000 (+0.9%) (YTD: +2.2%)
ADX: 5,046 (-0.3%) (YTD: +2.7%)
DFM: 2,682 (-0.9%) (YTD: +6.0%)
KSE Premier Market: 6,279 (+0.3%)
QE: 10,296 (-0.2%) (YTD: -0.0%)
MSM: 4,085 (-0.2%) (YTD: -5.5%)
BB: 1,501 (+0.2%) (YTD: +12.3%)

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

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.

19 November (Tuesday): G20 Compact with Africa High-Level Conference, Berlin, Germany.

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

1-6 December: Vietnamese trade delegation visits Egypt.

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

2-3 December (Monday-Tuesday): The irrigation ministers of Egypt, Sudan, and Ethiopia the second round of Grand Ethiopian Renaissance Dam negotiations in Washington, DC.

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

8-9 December (Sunday-Monday): The 6 th CEOs THOUGHTS 2019.

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.

February 2020: A delegation of Swiss businesses will visit Egypt to discuss investment.

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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