Thursday, 21 November 2019

Tharaa boss says Egypt’s SWF won’t crowd-out the private sector, aims to bring fresh capital into market

TL;DR

What We’re Tracking Today

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The question of the morning: Are we going to see a cabinet shuffle over the weekend? A change-up in cabinet that will see as many as 10 ministers exiting stage right is expected to be announced after President Abdel Fattah El Sisi returns from his trip to Berlin for the G20 Compact with Africa summit, well-connected MP Mostafa Bakry said, according to the local press. Bakry said the House of Representatives should be receiving the proposed changes to sign off before they are officially announced. House Speaker Ali Abdel Aal also said that parliament will likely hold an “extraordinary” meeting during its current recess, which many MPs suggest will be for the shuffle approval, according to Ahram Online. Masrawy, meanwhile, has a list of who’s allegedly in and out, citing an unnamed government official. Bakry said that Prime Minister Moustafa Madbouly will keep his job.

This is the latest in a drumbeat of rumors about a shuffle that we’ve noted this week, starting with discussions Sunday and Monday on the nation’s airwaves. And the rumblings come as the end-of-month deadline nears to make clear whether Tarek Amer is being reappointed or extended as governor of the Central Bank of Egypt or whether someone else will soon be signing Egypt’s banknotes.


The 2019 Investment for Africa Forum will take place this weekend at the new administrative capital. The conference will bring together African heads of state, investors, and global financial institutions to discuss investment initiatives on the continent.

The EBRD president will be in attendance on Saturday: President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti will be in town on Saturday to attend the conference, according to an emailed statement. Chakrabarti will hold talks with President Abdel Fattah El Sisi and Investment Minister Sahar Nasr during the day, and participate in a panel discussion.

Al Mashat in Beijing for Bloomberg New Economy Forum: Tourism Minister Rania Al Mashat will take part in three panel discussions and several meetings and interviews to talk tourism reform during her participation in the Bloomberg New Economy Forum, which kicks off today in Beijing, the cabinet said in a statement. Meetings with executives from China-based travel agency Ctrip are expected as the ministry gets ready to launch a campaign to promote Egypt as a destination through Chinese search engine Baidu, China’s WhatsApp equivalent Wechat, and Ctrip’s website.

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Talks between the US and China could reach a deadlock again due to disagreements over Beijing's demand that the US lift its tariffs on Chinese goods, while Washington won’t budge on its insistence that China make large purchases of American agricultural products, according to the Wall Street Journal. The Donald has threatened to ratchet up the tariffs even further if they fail to reach common ground for an agreement.

US markets turn red: The S&P 500 experienced its biggest loss in a month on the news, led by telecom firms and car manufacturers. Both the USD and oil rose. Bloomberg has more in its market wrap-up.

US investors are giddy over so-so earnings season: Businesses are getting more wiggle room from investors this year as investors cheer 3Q earnings that have fallen below expectations. Axios breaks down what this means.

enterprise

Yields on some of Lebanon’s USD bonds are now in “Venezuela territory,” rising to as much as 105% as a result of the ongoing political instability, according to Bloomberg. The yields rose 28 percentage points this week alone, and were as low as 13% prior to the protests that began five weeks ago. “With Lebanon viewed by many bond traders as a default waiting to happen, cash prices have become more important than yields as they factor in potential recovery rates. That’s inverted the government’s curve and distorted yields at the shorter end,” the news information service says.

Saudi financial regulators are monitoring credit flows to local investors after they relaxed lending limits to boost subscription for Aramco’s IPO, sources told Bloomberg. Riyal buyers are now able to borrow twice the amount to put towards Aramco shares, raising concerns that the private sector may be deprived of credit.

Saudi and Bahrain just completed their first blockchain transaction in a trade transaction between Saudi British Bank (SABB) and HSBC, Zawya reported. The blockchain-enabled process allowed the tracking and tracing of information as it moved between parties.

In other business miscellany:

  • Deutsche deploys robot army amid job cuts: Machine learning algorithms are being rolled out in Deutsche Bank as it cuts some 18k jobs over the next three years, Financial News reports.
  • US holds back on digital currency as China prepares to launch its digital yuan: The US is studying the idea of introducing a digital currency backed by the central bank but continues to hold back on actually developing one, Federal Reserve Chairman Jay Powell wrote in a letter to Congress this week. “While we are not currently developing a central bank digital currency, we have assessed and we continue to carefully analyze the costs and benefits of pursuing such an initiative in the US,” he wrote.
  • This might just become our new favorite unit of measurement: There are more “Davids” than there are women leading UK mutual funds: The UK has 108 men named David leading mutual funds, which is more than the total number of women occupying the same role, Bloomberg reports, citing data compiled by Morningstar. A total of 105 women hold the top leadership position in one of the UK’s 1,500 mutual funds, and account for a meager 17% of all people licensed to work in financial services.

Important things going on in the world:

  • Key impeachment witness points finger at Trump: The US ambassador to the EU Gordon Sondland has claimed that President Donald Trump tried to pressure the Ukrainian government into investigating Democratic politicians by holding up USD 400 mn in military aid. (The Associated Press)
  • Arab League to hold emergency summit on Israeli settlements: Arab League foreign ministers will gather for an emergency meeting on Monday to discuss the US position on Israeli settlements, which no longer considers them “inconsistent with international law.” (Reuters)
  • Israel might be heading into its third election since April: Benjamin Netanyahu’s main rival Benny Gantz has failed to assemble a government after four weeks of coalition talks, increasing the likelihood that the country will return to the polls for the third time since April (The Associated Press)

PSA- 500 Startups is launching the third edition of its Misk 500 Accelerator Program. The 14-week program will teach growth techniques and provide expertise to promising tech startups in the MENA region, along with seed-stage investment. You can find out more about the program here (pdf) and apply here.

Enterprise+: Last Night’s Talk Shows

President Abdel Fattah El Sisi’s final day in Berlin dominated the airwaves for a second day. El Sisi’s discussed Libya and illegal immigration in a meeting with German Chancellor Angela Merkel in Berlin before taking off to Cairo later in the evening. We have more on the Libya talks in this morning’s Speed Round section, below. Al Hayah Al Youm’s Khaled Abu Bakr also has his own recap of the full visit here (runtime: 7:56). El Sisi was in Berlin for the G20 Africa Compact conference.

Egyptian-German diplomacy: Abu Bakr phoned Egypt’s former ambassador to Germany, Mohamed Hegazy, who spoke of what the visit symbolizes (watch, runtime: 8:16). Hegazy said diplomatic proceedings, particularly El Sisi’s first meetings with German President Frank-Walter Steinmeier and Bundestag President Wolfgang Schäuble, show that relations have recovered after taking a hit following the June 2013 revolution. Following the revolution, the EU unanimously criticized the military’s seizure of power and the ousting of former President Mohamed Morsi. Hegazy also noted that El Sisi managed to balance his role acting as both Egypt’s and African Union’s (AU) president by presenting Egypt as a promising investment destination and showing Africa’s “best image.”

The former ambassador didn’t mention Germany’s growing interest in Libya, a subject discussed by El Sisi and Merkel yesterday. Again, more on this below.

Egypt has made good use of its one-year AU presidency, says El Feki: Egypt has improved its image both regionally and internationally through its one-year presidency of the AU, which is drawing to a close, diplomat Mostafa El Feki tells Yahduth Fi Misr’s Sherif Amer (watch, runtime: 3:39). El Feki’s rationale: The large number of international conferences El Sisi took part in as the face of the AU. What about quality? El Feki says no other AU president has brought social development and healthcare to the international discourse about Africa as much as El Sisi has done. Egypt’s initiative to eradicate hepatitis C on the continent is one shining example, the veteran politician reasons.

Also getting some airtime: Masaa DMC’s Ramy Radwan interviewed Parliamentary Affairs Minister Omar Marwan, who last week took part in the UN Human Rights Council’s periodic review of Egypt’s human rights record. Marwan said the report presented to the council by the government was seen as credible by most member states invited to the review to give their recommendations. He also said authorities are now sifting through 372 recommendations Egypt received during the meetings to decide which ones to adopt. The show’s YouTube channel uploaded the interview in snippets (here, here, and here). You can watch the part in which Radwan goes over the key points of the sit-down here (runtime: 2:30).

Speed Round

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Tharaa wants to engage with — not crowd out — the private sector -Soliman. The CEO of Egypt’s sovereign wealth fund, Tharaa, denied wanting to crowd out the private sector, telling Bloomberg that the fund wants to attract fresh capital to the market by engaging with private firms (watch, runtime: 6:04). Ayman Soliman told the news channel in a televised interview that Tharaa does not plan on buying out any private investors, nor will it compete for private investment opportunities unless businesses themselves invite the fund to help them scale up. The fund will create “its own class of assets” to bring to the market, but Soliman claimed that this will not crowd the market but instead make it more diverse.

Tharaa’s message to investors: Invest in Egypt now. Soliman promised investors access to exclusive asset classes, better valuations and higher returns in the future if they put their money into Egyptian equities. The market, he claimed, would become “very attractive” in the coming years if the country manages to secure more foreign direct investment.

If any military companies go to market, Tharaa probably won’t have anything to do with it, Soliman said. “I don’t know if the fund will have any role” in the potential process of listing military-owned companies on the EGX, but it could step in if there is agreement that it could add value in that step, he said.

Who’s interested in what Tharaa has to offer? Soliman told Bloomberg that he is focused on drumming up partnerships in the Gulf, noting that he has also been meeting investors from Egypt, Asia, and the West over the past 5-6 weeks. Most investors have expressed interest in fixed-income trades and are looking to pile into the equity or corporate debt markets. Saudi Arabia and Kuwait have “an appetite to invest in Egypt,” he said. Tharaa has already received seven offers from investors for potential partnerships in healthcare, pharma, and agricultural manufacturing ventures and is still in talks with Oman for cooperation, which Soliman expects to be completed by the end of this year, having already sealed a USD 20 bn investment platform with Abu Dhabi Holding Company.

The Electricity Ministry may exchange a combined-cycle power plant for a stake in Tharaa: The Electricity Ministry is looking into buying into Egypt’s Tharaa through an in-kind contribution worth the value of one of the Siemens / Orascom Construction / Elsewedy Electric combined-cycle power plants, after the ownership is transferred to the fund directly or one of its sub-funds, Planning Minister Hala El Said told Al Mal.

Tharaa is also cooperating with the Endowment Ministry and Internal Trade Development Authority (ITDA) to tap unexploited assets, ITDA head Ibrahim Ashmawy told the local press. The Supply Ministry, meanwhile, has identified 6 mn sqm of unexploited assets in 27 governorates owned directly by the ministry or through its affiliated bodies.

Egypt has seen improvement or stability in all six qualities of a sustainable market economy, the European Bank for Reconstruction and Development (EBRD) said in its annual Transition Report. The economy has become more competitive, better governed, greener, more resilient, and more integrated in the past year, while its inclusivity score remained unchanged from the 2018-19 report.

After being our trouble area in last year’s report, Egypt’s governance transition score jumped the most, rising to 4.83 from 4.68. However, when measuring progress since 1996, Egypt’s average governance score has declined, albeit at a slower pace than the 21 other countries that have also seen a drop in their governance scores over the period.

Our macroeconomic performance has improved: Real GDP growth reached 11-year highs in FY2018-2019, while inflation continues to decelerate and unemployment levels are falling “due to the sound implementation of economic and structural reforms.” Egypt’s fiscal position also continued to show improvement, despite a slightly widened current account deficit due to lower remittances and non-oil exports.

We also got props for “strong” progress on structural reforms, and the Tourism Ministry’s E-TRP reform program, which has boosted Egypt’s tourism competitiveness and attractiveness levels. The report notes that tourism revenues reached record highs of USD 12.5 bn in FY2018-2019.

Key priorities going forward: Improving private sector investments, keeping up structural reforms, and addressing water scarcity. The EBRD stresses that Egypt needs to continue lowering interest rates to spur private sector borrowing and investments, in addition to adequately implementing laws that support the private sector. A key priority for us in the coming year is pushing ahead with reform plans to consolidate what we’ve achieved so far, including pressing ahead with the state privatization program and reforming competition policies. The bank also says there is an “urgent need” to address water scarcity through desalination plants and rationing water consumption, among other solutions.

You can read the full report here (pdf) or check out the country profile on Egypt here (pdf).

IPO WATCH- Rameda gets nod for share listing, will go public before the end of the year –FRA: Rameda Pharma has received approval from the Financial Regulatory Authority (FRA) to go public on the EGX before the end of this year, FRA boss Mohamed Omran said at a press conference yesterday, according to Hapi Journal. Rameda had suggested in its intention to float (pdf), which dropped on 30 October, that it expected to close the transaction in 4Q this year, pending regulatory approval. There’s a bit more on the EGX website here.

Background: Rameda, formally known as the Tenth of Ramadan Pharma Industries and Reagents, will offer shares to both international institutional investors and domestic retail investors, we had previously noted. The company, Egypt’s fastest-growing pharma player, would be the second company to go public on the EGX this year after Fawry made its trading debut in August.

Advisors: HSBC and Investec are joint global coordinators and bookrunners for the international offering, while CI Capital is joint bookrunner. Inktank is investor relations advisor.

Education Ministry could reverse foreign ownership cap on schools as investors dig in their heels: Foreign investors who own stakes in Egyptian private schools are urging their embassies to discuss with the Education Ministry its imposition of an ownership cap on schools, according to a local newspaper. Several American investors are said to have voiced their concerns to senior government officials during AmCham’s US-Egypt Prosperity Forum earlier this week, and others have suspended investment plans following the decision.

Need background? We took a deep dive into the story in the first issue of Blackboard, our education weekly, earlier this month. You can read the full article here.

What did the ministry do? Education Minister Tarek Shawki announced two months ago that his ministry would limit foreign investors to holding a 20% stake in private and international schools. The cap applies to all foreigners, including dual-passport holders, funds, entities, and authorities. Investors are also now required to get prior approval before offloading stakes. Private school owners have urged the ministry to rethink its plans, fearing that the restrictions will stifle foreign investment in the sector.

Is a U-turn in the cards? The ministry has promised to reconsider the decision, and may move to either raise the ownership cap or abolish it completely. Sources told the newspaper that any decision on the matter will be left until after an expected cabinet reshuffle, which could come as early as this weekend. Shawki was one of two ministers singled out by House Deputy Speaker Soliman Wahdan in October as being in line to exit in a cabinet shuffle.

Egypt’s first sukuk issuance coming in 1Q2020? Egypt’s first sukuk issuance is expected to see the light of day before the end of 1Q2020, Financial Regulatory Authority (FRA) boss Mohamed Omran said at a presser yesterday, according to Al Mal. Omran did not disclose any further details on the expected issuance, but we know that two companies partially owned by the government had expressed their interest in June in issuing sukuk bonds to finance new projects this year. One of the companies said it will carry out the issuance through Sarwa Capital, which was granted the country’s first sukuk issuer license in July, and now has the green light to issue the sharia-compliant bonds through its sukuk arm, Sarwa Sukuk Company.

Green bonds also coming next year: Omran also said he expects the first green bond sale to hit the market sometime next year, saying that this is the “biggest challenge” for financial markets over the coming period. The FRA has put in place the regulatory framework for the bonds, he said.

Background: Sukuk and green bonds are among several new financial instruments that are expected to be introduced to the Egyptian market, and were allowed for under the executive regulations to the Capital Markets Act issued in July 2018. The market regulator had issued the regulations governing sukuk in April, which stipulate that issuances must be worth at least EGP 50 mn and be approved by a religious committee, among other requirements. The FRA had in August named 11 independent institutions to oversee issuances of green bonds, and decided earlier this month to slash service and inspection fees on the bonds. The government has previously hinted it may issue green bonds locally.

The company that will manage Egypt’s first commodities exchange will be set up before the end of the year, Internal Trade Development Authority (ITDA) head Ibrahim Ashmawy told the local press. The company was originally slated to start operations this month, having completed its feasibility study in October.

The company will be 80% owned by the private sector, while the government will hold the remaining 20% — but we’re still not sure on the exact division of the shares. From the private sector, Ashmawy said that EFG Hermes, CI Capital, and Beltone Financial are all on board to invest in the company. Meanwhile, there is a far longer list of state-owned organizations getting involved, with at least 11 entities apparently sharing just 20% of the equity — they range from ITDA and the General Authority For Supply Commodities to the Federation of Egyptian Industries, the EGX, MCDR and various holding companies and state banks. The company was originally expected to be formed as a joint venture, with the EGX holding a majority stake alongside another state entity.

The exchange will be launched 36 weeks after the company is established (so probably around August-September time, provided the company is up and running this year) with capital of EGP 100 mn.

Don’t expect to be trading futures anytime soon: Futures will not be offered on the exchange for the foreseeable future, Ashmawy said, meaning that investors will be limited to trading spot contracts for wheat, rice, sugar, iron and oil. Futures could be rolled out at a later point, but the government apparently wants to keep things simple at the start and raise awareness about the exchange, he said.

Background: The ministry and the EGX completed last month 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.

Gov’t creates “green channel” for whitelisted companies to expedite customs clearance process: The government began yesterday implementing a “green channel” system for a selected group of 75 whitelisted importers to enjoy expedited customs clearance, according to a Finance Ministry statement. The system will allow the whitelisted companies to have their goods pass through Egypt’s ports without their shipping containers undergoing inspection. The move is meant to cut down on customs clearance fees, which would also drive down the costs of imported goods on the market, and raise Egypt’s ranking in the World Bank’s Cross Border Trade Index.

Who made it onto the whitelist? The companies, which span several industries, include Arabian Food Industries (Domty), Schneider Electric, Lafarge Egypt, Samsung Electronics, General Motors, Nissan Motors, Pfizer, Halwani Bros, GASCO, Oriental Weavers, Arabian Cement, Unionaire, Youssef Allam Group, and Suez Bags, to name a few. The companies were selected based on the size of their imports, their source markets, and their history of compliance with customs regulations.

Background: The government has been working on a draft Customs Act that is designed to expedite customs clearance and provide customs breaks to incentivize local manufacturing. The bill would also broaden the Customs Authority’s discretion.

Medhat Khalil warns Raya Holding could delist from EGX in 2020: Raya Holding is considering delisting from the EGX, founder and CEO Medhat Khalil told Al Mal. Khalil is also quoted as saying he would pull back from IPOs of other subsidiaries in the future. (The newspaper also quotes Khalil as saying that Raya could delist Raya Data Center, but we believe Raya Contact Center, a comparatively new entrant to the EGX, is the company to which Khalil was referring.)

Raya had told Enterprise back in 2019 that it had no plans to delist from the exchange after a transaction that saw Khalil acquire an additional 27% of the company’s shares in a mandatory tender offer into which he had been forced by the regulator.

Now, Khalil has reportedly told Al Mal he doesn’t see the EGX as being attractive to issuers, citing low turnover and insufficient investment- and tax-incentives. The delisting could take place in 2020 if the company decides to go ahead with the move, the paper quotes him as having said.

Background: Raya and related companies continue to invest in Egypt (announcing or mulling commitments to an automotive assembly venture, electric vehicles, recyclables and the food business, among others, and landing funding from EBRD), but founder Khalil is still seething after having been ordered by the Financial Regulatory Authority in 2018 to submit an MTO for Raya or sell down his stake. The FRA argued at the time that Khalil and related parties controlled a combined 42% of the company — a level of control that triggers the requirement for an MTO under securities regulations. Khalil had asked the Justice Ministry to mediate in an ongoing dispute with the FRA over an EGP 11 mn fine with which he was hit in connection with the MTO.

REGULATION WATCH- Exec regs for Mineral Resources Act coming this month: The Council of State (Maglis El Dawla) should complete its review of the draft executive regulations for the Mineral Resources Act “within days” before referring it to cabinet for approval, a government source told Al Mal. The cabinet should sign off on the regulations by the end of this month or next, the source says. Industry players have lauded the recent amendments to the Mineral Resources Act for making Egypt’s mining sector more attractive for investors.

Background: Ratified in August, the amendments expand the size of concession areas, grant a new authority the power to issue licenses for areas of unlimited size, and allow companies to renew their licenses for more than one term. Separate contracts will be used for exploration and

excavation areas, and royalties will be capped at 20% of the value of annual production.

STARTUP WATCH- Trucking app Trella will make its Saudi debut any day now: Trella, the venture-backed Egyptian trucking marketplace that connects shippers to carriers, is set to make its debut in Saudi Arabia within the next few days, founding partner Omar Hagrass tells the local press. The trucking app expects to cover all freight-related services in the kingdom before the year is out, Hagrass says.

New investment round coming soon: Trella is expected to receive a fresh funding round from a group of investors, Hagrass said, without disclosing the anticipated amount of funding or who the investors are. The company will use the proceeds to add more services to its roster, fuel its geographical expansion, and hire more truck drivers. Trella had raised more than USD 600k in pre-seed funding from our friends at Algebra Ventures earlier this year.

STARTUP WATCH- Egyptian startups Nawah Scientific, Mumm win USD 215k in Jack Ma’s Africa Netpreneur competition: Cairo-based research and analytics platform Nawah Scientific was awarded a USD 150k grant after coming in second in Alibaba founder Jack Ma’s Africa Netpreneur Prize initiative, according to an emailed statement (pdf). Egyptian food delivery startup Mumm was also among the initiative’s ten finalists, and landed a USD 65k grant.

EARNINGS WATCH- Egyptian e-payments platform Fawry’s 9M2019 net profits recorded EGP 76.3 mn, up 47.7% from EGP 51.6 mn last year, according to a disclosure to the EGX.

El Sisi, Merkel agree to clamp down on foreign interference in Libya: President Abdel Fattah El Sisi agreed to reduce foreign intervention in Libya during a meeting with German Chancellor Angela Merkel yesterday, according to an Ittihadiya statement. The statement mentioned little specifics, but it appears that Merkel reiterated her administration’s recent call to end foreign intervention in the war-torn north African country. Both leaders have “agreed to coordinate efforts to resolve the situation in Libya in a comprehensive manner.. preserving the resources of the state and its institutions and restricting foreign intervention,” reads the statement.

Does this mean that Egypt will actually wind down its material support for General Haftar? Egypt — along with the UAE and France — are the three biggest foreign supporters of Libyan General Khalifa Haftar’s eastern forces, which are currently mounting an offensive against the UN-backed government of Fayez Al Serraj in Tripoli. Although both leaders agreed to “restrict foreign intervention,” it’s really not clear from the statement whether the Merkel meeting will result in an Egyptian policy shift towards Libya, or even what is meant by foreign intervention. Berlin — which backs Al Serraj’s government — will host in December an international conference aimed at resolving the conflict.

Also from Berlin: El Sisi discussed cooperation with German Minister of Economic Affairs and Energy Peter Altmaier, according to a separate Ittihadiya statement. Other meetings from El Sisi’s day in Berlin, where he attended the G20 Compact with Africa conference, included a sit-down Federal Ministry of the Interior, Building and Community Horst Seehofer.

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Egypt in the News

Egypt’s most notorious YouTuber is back in the headlines: Mohamed Ali — ex-army contractor, chain smoker, and attempted revolutionary — has said he wants to unite Egypt’s disparate opposition in London next month to organize against the government. “I am in contact with all political waves, the Muslim Brotherhood, liberals and the April 6 movement,” he told the Guardian, whose diplomatic editor gave him an open platform from which to pontificate.

Also getting attention in the foreign press:

  • Administrative capital taking inspiration from Kansas City? Local US media reports that an Egyptian delegation is in Kansas City to learn how authorities delivered some of their “smart city initiatives.”
  • Cairo’s ballet dancers: CNN talks to Ahmed Yehia and his wife Ania Ahcin Yehia about their lives at principal dancers of the Cairo Opera Ballet.
  • Egyptian man takes eco-living up a level: Euronews tells the story of Taymour El Hadidi, who constructed his house exclusively from recycled materials

Infrastructure

Egypt, Zaitoun Green Shipping discuss potential LNG fuel station in Damietta

Transport Minister Kamel El Wazir discussed with officials from Zaitoun Green Shipping potentially setting up an LNG refueling station for ships in the Damietta Port, according to Al Shorouk. No further details were provided.

Manufacturing

Galina-Agrofreeze to set up EGP 80 mn fruit concentrates factory

Galina-Agrofreeze is planning to invest EGP 80 mn in a new factory to produce fruit concentrates, Chairman Abdel Wahed Soliman tells Al Mal. No details were provided on the project’s timeline, location, or target markets, but Soliman said the company is planning to cover part of the cost through bank loans, and the remainder through export subsidies it is owed by the government. The company had requested EGP 7 mn in future tax breaks and EGP 10 mn in government-redeemable IOUs as part of settling some EGP 22.5 mn in overdue subsidies. The government recently began implementing its new export subsidy framework under which businesses will be given a 10% of the arrears “on the spot,” with the remainder coming through either tax breaks, industrial land discounts, or getting priority treatment in domestic manufacturing.

Health + Education

Egypt ranks 82 in the Global Knowledge Index 2019

Egypt is ranked 82nd in the Global Knowledge Index (GKI) 2019, rising 17 spots from 99 in last year’s edition, making it the most-improved country on the index this year. Our research, development, and innovation ranking rose 25 places, while our higher education performance jumped 10 spots. The GKI is a joint initiative between the United Nations Development Programme (UNDP) and the Mohammed Bin Rashid Al Maktoum Knowledge Foundation (MBRF) that reaks down the concept of knowledge into constituent components such as basic education, research, and the overall environment. Switzerland came in the top spot globally, while the UAE outperformed in the MENA region.

Law

ZH&P was local legal counsel to joint lead managers of Egypt’s eurobond issuance

Zaki Hashem & Partners acted as local legal counsel to the joint lead managers of Egypt’s USD 2 bn triple-tranche eurobond issuance, which went to market last week, according to an emailed statement. The joint lead managers were BNP Paribas, JPMorgan, Natixis, Standard Chartered, and Citigroup. Linklaters acted as international counsel to the managers.

My Morning Routine

*** My Morning Routine is on hiatus and returns next week.

Do you know of a business leader you’d like to see featured in My Morning Routine? We’re still taking suggestions for interesting people to feature in this popular column. If you’d like to recommend someone with an interesting day gig at an equally interesting company or institution in Egypt (or just someone you think our readers should really, really get to know) please email us on editorial@enterprise.press. Last week’s suggestions were awesome, so keep them coming

The Market Yesterday

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EGP / USD CBE market average: Buy 16.04 | Sell 16.16
EGP / USD at CIB: Buy 16.04 | Sell 16.14
EGP / USD at NBE: Buy 16.05 | Sell 16.15

EGX30 (Wednesday): 14,224 (-0.6%)
Turnover: EGP 595 mn (18% below the 90-day average)
EGX 30 year-to-date: +9.1%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session down 0.6%. CIB, the index’s heaviest constituent, ended down 1.0%. EGX30’s top performing constituents were Kima up 3.2%, Sidi Kerir Petrochemicals up 1.3%, and AMOC up 1.2%. Yesterday’s worst performing stocks were Egyptian Resorts down 2.6%, Juhayna down 2.0% and Heliopolis Housing down 1.8%. The market turnover was EGP 595 mn, and local investors were the sole net buyers.

Foreigners: Net short | EGP -5.7 mn
Regional: Net short | EGP -17.9 mn
Domestic: Net long | EGP +23.5 mn

Retail: 58.7% of total trades | 60.6% of buyers | 56.8% of sellers
Institutions: 41.3% of total trades | 39.4% of buyers | 43.2% of sellers

WTI: USD 57.11 (+3.44%)
Brent: USD 61.54 (+2.5%)

Natural Gas (Nymex, futures prices) USD 2.56 MMBtu, (+2.0%, December 2019 contract)
Gold: USD 1,474.20 / troy ounce (-0.0%)

TASI: 8,054 (+0.1%) (YTD: +2.9%)
ADX: 5,092 (+0.1%) (YTD: +3.6%)
DFM: 2,703 (+0.1%) (YTD: +6.9%)
KSE Premier Market: 6,311 (+0.1%)
QE: 10,336 (-0.0%) (YTD: +0.4%)
MSM: 4,085 (-0.0%) (YTD: -5.5%)
BB: 1,509 (+0.2%) (YTD: +12.9%)

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Calendar

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.

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.

25-28 November (Monday-Thursday): Intergovernmental Committee of Senior Officials and Experts (ICSOE) for North Africa, Aswan.

December: Belarus Industry Minister Pavel Utiupin will visit Egypt to discuss means of cooperation in the SCZone and plan for the seventh Egypt-Belarus Trade Meeting.

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.

February 2020: Higher Education Minister Khaled Abdel-Ghaffar will visit Minsk, Belarus.

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2018 Enterprise Ventures LLC.