Tuesday, 3 December 2019

In the wake of executive regulations, industry still has questions about export subsidies

TL;DR

What We’re Tracking Today

Industry incentives announcement coming tomorrow, Amer says: Prime Minister Moustafa Madbouly will unveil tomorrow a package of measures designed to support the state’s development plans, Central Bank of Egypt Governor Tarek Amer said yesterday during the African Economic Conference in Sharm El Sheikh. He also said that supporting private-sector companies in the industrial sector will be one of the central bank’s top priorities going forward. Amer and Investment Minister Sahar Nasr yesterday inaugurated the three-day conference, which brings together 500 African youth representatives, business leaders, policymakers and media professionals.

Speaking of incentives: Exporters are combing through copies of executive regulations governing how the government will give out some EGP 6 bn in export subsidies this fiscal year. It is, as you would expect, a bit of a moving target (one industry wants the head of the export subsidy fund to make clear in the next few days), but the regulations contain a number of good ideas. We have chapter and verse in this morning’s Speed Round, below.

It’s the next to last day for retail investors to subscribe to Rameda Pharma’s IPO, the retail component of which was 3.3x oversubscribed at the end of the third day of subscription yesterday, Al Mal reports. The company’s shares will debut on the EGX under the ticker RMDA on 11 December — that’s one week from tomorrow.

It’s the third and penultimate day of Cairo ICT. Yesterday saw several agreements signed at the conference, including an MoU that will see Tamweely Microfinance’s financing services available through Egypt Post. Other agreements from yesterday include one on providing WiFi at bus stops in Smart Village between Orange Egypt and the Smart Villages Development and Management Company, and another MoU between the Information Technology Industry Development Agency and NEC.

A forum on the use of nuclear power also got underway yesterday: Madbouly yesterday inaugurated the three-day forum, which looks at how nuclear energy can be used for power generation and desalination. Jordan is looking to sign an agreement with Egypt on extracting and exploiting uranium for energy production and the peaceful use of nuclear energy, Jordan Atomic Energy Commission Chairman Khaled Toukan told the local press on the sidelines of the forum.

Committee of Fifteen Ministers of Finance (F15) takes place in Sharm on Friday: The Finance Ministry and the African Union Commission are holding two days’ of preparatory meetings ahead of Friday’s F15 meeting, which will see ministers discuss the financial regulations and the African Union’s budget.

Stuff you can go to this week:

News triggers to keep your eye on in the coming days:

  • The purchasing managers’ index for Egypt, Saudi Arabia and the UAE is out this morning at 6:15am CLT.
  • Foreign reserves figures for November will be released tomorrow.
  • Inflation figures for November are out next Tuesday, 10 December.

enterpriseEnjoy unforgettable experiences in our golf course that looks over the sea, the first of its kind in the Middle East. The award-winning Cascades Championship Golf Course is the first championship course in the Middle East, designed by international legend, Gary Player.

Risky frontier-market debt is booming thanks to low interest rates in advanced economies: Investors are buying big into high-yielding frontier-market debt, indicating an increasing recklessness fueled by historically low interest rates in advanced economies and raising concerns about the debt load of developing countries, the FT says.

Meanwhile: Is the solution to fight fire with fire? Bloomberg notes the growing calls by finance chiefs for governments everywhere to ramp up deficit spending as a means to reverse the global slowdown — a problem caused, at least in part, by an economic system awash with debt.

Even if global growth does pick up next year, investors shouldn’t expect high returns, JPMorgan says. Bonds, currencies and commodities will not generate the kind of gains normally expected during a recovering economy, the US investment bank says, forecasting single-digit returns in investment-grade bonds — and most surprisingly — a 6% loss on commodities.

Bond ETFs aren’t doing too badly right now, though: In a sharp reversal of the norm, exchange traded funds linked to bond markets are proving more popular than their equity-linked equivalents as the costs of trading individual bonds increase, the Financial Times reports. In the first 10 months of the year, bond ETFs saw USD 191 bn of inflows, compared to less than USD 158 bn for stock ETFs, one London-based consultancy found.


Tax my tech? I’ll tax your wine … and your handbags. The Trump administration is threatening to impose 100% tariffs on French handbags, champagne and wine in retaliation for France’s tax on digital services, which the Financial Times says Washington believes “unfairly discriminates against American technology companies.” France has imposed a 3% levy on the revenues of digital companies that sell primarily online. See more in the Wall Street Journal and New York Times.

In global miscellany:

  • The Donald has declined to take part in an impeachment hearing on Wednesday at the House Judiciary Committee, although his lawyer has indicated he might be represented at future sessions. (Bloomberg)
  • Trump is attending a two-day NATO summit in London amid tensions in the military alliance. (Associated Press)
  • At least 180 people have been killed in Iran as the government has moved to “smother” the country’s largest bout of political unrest in 40 years. (New York Times)
  • Gulf monarchies are dialing down the rhetoric against Tehran, with indications coming from several quarters that direct communication is increasing and conciliatory gestures are being made. (Bloomberg)

Enterprise+: Last Night’s Talk Shows

It was a mixed bag of nuts on the country’s airwaves last night. Among the highlights: Egypt, Sudan, and Ethiopia’s first meeting of the second round of technical negotiations on the Grand Ethiopian Renaissance Dam (GERD), Egypt’s performance on global indices, and proposed amendments to the Personal Status Act.

Beyond the routine statements on the urgency of the matter, we don’t know much about yesterday’s GERD talks. That’s the takeaway from Al Kahera Alaan’s Lamees El Hadidi’s recap of Irrigation Minister Mohamed Abdel Aaty’s opening remarks at the meeting. The minister stressed that Egypt is already facing an annual water shortage, but is committed to cooperating with Ethiopia on a mutually satisfactory agreement for filling and operating the dam (watch, runtime: 3:31).

“Cautious optimism” is the prevalent theme on GERD: Hany Raslan, head of the Sudan and Nile Basin research division at Al‑Ahram Center for Political and Strategic Studies, told El Hadidi that Ethiopia is trying to keep its compromises to a minimum. He implied that the African country is “stirring up a lot of complications,” pointing to its side talks with other influential nations — including China, Italy, Germany and France — and its recent purchases of “large quantities” of weaponry. The outcome of the meeting going forward is thus largely unclear, especially considering this round is meant to focus on Egypt’s proposal for filling and operating the dam.

The two-day Cairo meetings are set to wrap up later today. Two subsequent meetings are scheduled for the end of December in Khartoum and early January in Washington, which is sponsoring the talks alongside the World Bank.

Egypt has advanced on several indices that measure sustainable growth — including rising four spots to 24th on the Climate Change Performance Index and several spots to 32nd in an index of renewable energy efficiency in the World Economic Forum’s Global Competitiveness Report. Al Hayah Al Youm’s Lobna Assal recapped the improvements, which were compiled in an infographic released by the Cabinet’s Information and Decision Support Center (watch, runtime: 3:04). Egypt has reportedly also improved its ranking in a budget transparency index, Hona Al Asema’s Reham Ibrahim said, without naming the index. We presume this is the biennially produced International Budget Partnership’s Open Budget Survey, but the 2019 edition is not yet available online (watch, runtime: 1:18).

The “let it rust” auto industry boycott campaign is back in the spotlight, with El Hadidi bringing on campaign spokesman Mohamed Sheta and Federation of Egyptian Chambers of Commerce’s auto division member Alaa El Saba to debate the efficiency of the campaign. El Saba noted that continued customs reductions and the EGP’s year-to-date appreciation have been the key drivers of car prices falling, but Sheta claimed that the campaign is ensuring these price drops are sustained (watch, runtime: 27:46).

Personal Status Act gets backlash over Al Azhar’s heavy influence: Elsewhere, House reps Solaf Darwish and Margaret Azer had a chat with Assal on Al Hayah Al Youm on the in-the-works Personal Status Act, which has been met with criticism on social media because the latest draft was drawn up by Al Azhar. Critics say that the country’s highest religious authority for doing legislative work that is beyond its purview. Both Darwish and Azer told Assal that the proposed act, which will cover matters of marriage, death, inheritance, child custody, etc, should be subject to wider public consultations (watch, runtime: 4:43 and runtime: 3:15).

Speed Round

Speed Round is presented in association with

Executive regulations for the nation’s new export subsidies framework have leaked, but industry still has questions: The executive regulations of the state’s new export subsidies framework, which were ratified by Prime Minister Moustafa Madbouly earlier this week, were circulated by the state-run Export Subsidy Fund to export councils around the country. The initial reaction from a number of industry councils is that the regulations stop short of defining some key terms and need to provide more on how the framework will be implemented. The regulations are meant to govern how EGP 6 bn allocated by the government at the start of the fiscal year will be spent to support exporters.

Click / tap here (pdf) for a copy of the regs that was received by the Food Export Council.

Industry councils are hoping for more clarity on key definitions as they sit down with officials including Export Subsidy Fund head Amany El Wassal, sources told the domestic press. Reports suggest that the final version of the regulations is different from that to which the councils had agreed in recent meetings with the fund. Agricultural Export Council executive director Hany Hussein said his council will not be sending out copies of the regs to businesses until they receive some clarity.

So, what’s unclear? For starters, the definition of the 40% value-added rate required for any export to be eligible for subsidies, a term that generally refers to local content that a manufacturer must include a product for it to be eligible.

The fine points on how annual allocations are paid out is also unclear. Subsidies will take the form of direct cash payments (40%), tax breaks (30%), and investments by the fund to improve Egypt’s “export infrastructure” (30%). The regulations don’t make clear how tax credits would work (including whether they could be deferred), nor do they make clear priorities for support for “export infrastructure” (which could include trade fairs, trade missions, and market research studies).

How will the exporters be paid? Exporters will be getting back a certain percentage of the total value of products they sell abroad. The exact percentage will depend on the industry and will increase as companies source more of their inputs locally. Freezone companies will be receiving 50% of the rate specified for their non-freezone counterparts. It’s unclear if payments will be made on a quarterly, yearly, or other basis.

How much will they be receiving? The percentages for three of the industries covered by the framework — food processing, engineering, and furniture manufacturing — made it to the local press yesterday. The breakdown is as follows:

  • Food processing: Subsidies of up to 10% of the value of their exports (5% for freezone companies) for players with >80% added value, to a total of EGP 950 mn for the industry this fiscal year.
  • Engineering: Subsidies of up to 10% of the value of their exports (5% for freezone companies) for players with >60% added value, to a total of EGP 900 mn for the industry this fiscal year.
  • Furniture: Subsidies of up to 10% of the value of their exports (5% for freezone companies) for players with >70% added value, to a total of EGP 50 mn for the industry this fiscal year (we’re waiting for confirmation on that EGP 50 mn figure, because it seems out of step with the other two industries).

More incentives: Subsidies will increase pro rata with export growth. Large and medium companies will get a 10% bump to the initial rate if they increase the value of their exports by 20-30% in a given year and 15% if they raise exports by over 30%. Smaller companies, meanwhile, will get an additional 20% and 30% for each respective scenario. The regs define small companies as those with a value of annual exports less than USD 1 mn, medium companies as those with USD 1-10 mn, and large companies with 10 mn or more.

Special incentives for food + textile companies and exporters in border governorates: Small and medium-sized exporters of food and textiles will qualify for additional subsidies if their total exports do not exceed certain thresholds. Small businesses with exports under USD 1 mn will be allocated an additional 2%, while medium companies exporting less than USD 10 mn will receive an extra 1%. It’s unclear based on media reports whether this extends to other sectors. There also appear to be some incentives (for food exporters, at least) based in Upper Egypt and border governorates including North and South Sinai, Red Sea, and Matrouh), which will be eligible for a 50% bump from the basic rate.

In related news, nine agreements to settle back dues owed under the old subsidy framework were inked yesterday. The agreements will see the signatory companies receive 20% of their overdue payments by the end of the month, another 20% during the first quarter of the upcoming fiscal year and the rest within three years, the finance and trade ministries said in a joint statement. The agreements were signed with each of Unilever Mashreq, Schneider Electric, Fresh Electric, Jotun, Oriental Weavers, Lotus Garments, T&C Garments, Herbal Family Group, and Giza Spinning and Weaving Company. The overall value of those agreements is reportedly EGP 1.4 bn, Vice Finance Minister Ahmed Kouchouk told Hapi Journal.

Background: Exporters are owed bns of overdue subsidies under the old subsidies framework. Settlements of the overdue payments have reportedly been moving forward since last September, in tandem with the launch of the new program.

Natgas exports from Israel’s Leviathan on schedule to hit Egyptian market in a few weeks: Delek Drilling and Noble Energy expect to begin supplying natural gas from the offshore Leviathan field to the Israeli market within three weeks, after which exports to Egypt and Jordan from the field will begin, Noble Energy Vice President for Regional Affairs Binyamin Zomer said at a conference, according to Reuters. According to Zomer, Noble and Delek — which operate the Leviathan and Tamar offshore fields — expect to kick off their natgas exports to Egypt “in the weeks right after” starting to supply gas to the local market.

How much gas are we getting? Alaa Arafa’s Dolphinus Holding had signed an agreement in October with Noble and Delek to amend their landmark 2018 gas import agreement to increase the supply of natural gas to Egypt by 34% to 85.3 bn cubic meters (bcm). The value of the agreement is now USD 19.5 bn, up from an original USD 15 bn. Exports from Leviathan will double to 60 bcm over 15 years and shipments from Tamar will fall to 25.3 bcm from 32 bcm. The first three years will see a total of 2.1 bcm sold annually, before growing to 6.7 bcm a year after that.

With regulatory and infrastructure hurdles out of the way, it looks like it’s smooth sailing from here on out. The timeline is consistent with Noble and Delek’s previous statements that indicated they would begin supplying gas to Egypt 2020. Trial gas shipments were originally supposed to begin in March 2019, with commercial sales beginning by the end of June, but capacity restrictions of Israel’s domestic pipeline network caused delays. A series of Delek-led tests on the EMG pipeline in July removed any doubts about its integrity, confirming that it is fit to transport up to 7 bcm of natural gas per year.

Egypt has also been working to resolve several arbitration cases raised against the country for breaching supply agreements in the wake of the 2011 uprising. The government paid a USD 500 mn settlement to Israel in June for cutting gas shipments in 2012, and is still facing a USD 1 bn lawsuit from Thailand’s PTT Energy Resources. The company claims that Egypt failed to meet gas deliveries and caused East Mediterranean Gas — in which it held a 25% stake — to fail to meet its contractual obligations to its customers.

M&A WATCH- Kenya’s regulators reviewing CIB bid to acquire stake in Kenyan bank: CIB’s application to acquire an undisclosed stake in Kenya’s Mayfair Bank Ltd. is currently being “analyzed” by the Competition Authority of Kenya, Bloomberg reports. Mayfair is that country’s fourth-smallest lender, the business information service says. CIB had disclosed its plans to acquire a stake in a then-unnamed bank in Kenya last month and had said at the time it was waiting on the necessary approvals before moving ahead with the acquisition. If CIB receives regulatory approval in Kenya and in Egypt, it would be the first Egyptian bank to take its business to Kenya, the news information service notes.

STARTUP WATCH- Raseedi raises USD 400k in seed funding: Cairo-based telecoms app Raseedi has raised USD 400k in a seed funding round led by 500 Startups with participation of Falak Startups and EFG-EV Fintech, according to Menabytes. The Android app helps dual SIM card users save money on cross-network charges by automatically detecting which card will make the cheaper call. Making calls to a phone on a different network can be up to five times more expensive, which Raseedi says has led to a growth in popularity of dual SIM phones. The company plans to use the investment to develop a function that allows users to recharge both SIM cards using Raseedi credit.

EARNINGS WATCH- Banque du Caire’s (BdC) net profits increased 66% y-o-y to EGP 3 bn in 9M2019, up from EGP 1.7 bn during the same period last year, according to Mubasher. The bank’s net interest income grew 33% y-o-y to EGP 6 bn during the first nine months of the year.

MOVES- President Abdel Fattah El-Sisi received yesterday the credentials of nine new ambassadors to Egypt. The ambassadors are:

  • Mohand Saleh Laajouzi (Algeria)
  • Nelson Manuel Cosme (Angola);
  • Sergei Terentiev (Belarus);
  • Antonio de Aguiar Patriota (Brazil);
  • Homer Mavrommatis (Cyprus);
  • Alfred Kalisa (Rwanda);
  • Renuka Damayanthie Rajapakse (Sri Lanka)
  • Jonathan Cohen (USA);
  • Shebba Shumbayaonda (Zimbabwe).

MOVES- Housing & Development Bank (HDB) Chairman Fathy El Sebai has resigned from his post for undisclosed reasons, Al Mal reports. El Sebai’s term as chairman was set to end in March.

MOVES- US-based Cisco Systems has appointed a new advisor for government and policy affairs whose work will focus on Egypt, the company’s North, West & Central Africa (NWCA) general manager Ayman El Gohary said, according to Al Mal.

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Worth Listening

Boy meets girl, boy and girl make Elves: When Abeer El Sisi’s mom told her to stay away from the black-clad rocker type guy at the end of the room during college freshman orientation, we’re sure she didn’t expect that her daughter would one day marry him. Years later, not only are Abeer and Karim El Sahy bonded through holy matrimony, but they also have a business between them as they balance between working, living, and raising a family together. Their union brought Elves to life, the AI-based digital concierge service provider that is meant to make your life easier. Enterprise’s executive editor Hisham talks to the husband-wife duo in the second episode of Making It and asked them about their business, and how they make things work. Listen here on our website or find us on Apple Podcast or Google Podcast.

Egypt in the News

It’s another relatively slow morning for Egypt in the foreign press, with no single topic leading the conversation. Among the headlines to skim:

  • Egypt’s vocational education gets a boost: Three newly-opened technology universities in New Cairo, Quesna, and Beni Suef form part of government efforts to develop the country’s vocational education system, offering higher academic qualifications, better training, and a closer match with the needs of the labor market, reports Al Fanar.
  • The tourists will still come: Tour operator Abercrombie & Kent predicts that Egypt will be one of 2020’s hottest tourist destinations, according to a piece in the Independent. European tourists have also ranked Hurghada among the top five winter destinations, according to the TUI Holiday Atlas Winter 2019/20.
  • But a British family did not enjoy their holiday in Hurghada, and their complaints are detailed in a typically understated feature in British tabloid the Sun, which has made a trope out of “we went on a holiday and had a bad time” stories.
  • Business as usual at Mada: Independent news outlet Mada Masr is resuming its work following the recent raid of their Cairo headquarters, an unnamed correspondent writes for Al Monitor.

Worth Reading

Research shows that entrepreneurs failing fast and failing forward is a myth: First-time entrepreneurs often fail, but the assumption that learned lessons will make the second attempt a sure-fire success often only leads to more failure, Francis Greene writes in the Wall Street Journal. His research shows that most of the time, entrepreneurs don’t in fact learn from their mistakes. On the contrary — if they fail once, they’ll likely fail again.

It’s a celebrated story when entrepreneurs fail again and again only to suddenly make it. But it’s easy to forget that this isn’t the norm. In the US, only about 50% of startups make it to their fifth birthday. Even fewer make it into adolescence or adulthood, according to Bureau of Labor statistics. When comparing failed entrepreneurs with new entrepreneurs, the newcomers have the same success rate even without the previous experience.

Entrepreneurs don’t actually learn their lesson: It’s not easy to pinpoint what went wrong with a failed business, especially when a seemingly innocuous flaw produces a butterfly-effect. But even when entrepreneurs do locate the problem they fail to recognize that times have changed. “A second attempt at a startup won’t face the same context as the first. There will likely be different market conditions, prices and relationships with suppliers,” Greene writes. Psychological barriers also present problems for people coping with failure: There is a tendency among many entrepreneurs to ignore personal failings, shift blame, and oversimplify the series of events that led to their business’ demise. Overcoming these barriers requires that people try to anticipate the reasons why their business might fail in the future — and to be honest with themselves about whether they have the right experience.

Diplomacy + Foreign Trade

Egyptian cotton exports rose by 120% between June and August to 190,400 qintars, up from 86,200 in the same period last year, according to the Central Agency for Public Mobilization and Statistics. India was the largest buyer of Egyptian cotton, importing 135,000 tonnes during the period.

Energy

Seven Egyptian, Russian companies compete for Dabaa site prep tender

Seven Egyptian and Russian companies have submitted bids to compete for the tender to prepare the site of the Dabaa nuclear power plant ahead of its construction, sources at the Electricity Ministry told Al Mal. Hassan Allam, Orascom Construction, Arab Contractors, and Petrojet, in addition to another unidentified Egyptian company and two Russian companies, have all placed bids for the tender, which was launched by Rosatom subsidiary Atomstroyexport, the sources said. The Russian state nuclear company is currently studying the proposals and will announce the winner by the end of December.

Egypt’s Benban solar part to be inaugurated in December

The Benban solar energy park in Aswan is slated for inauguration this month, sources from the Electricity Ministry told the local press. Benban was due for inauguration in November as USD 2 bn, 1.46 GW-worth of solar plants have already started commercial operations. Among the companies that built power plants in Benban include a consortium of Hassan Allam and TAQA Arabia as well as Scatec Solar, Elsewedy Electric, and Germany’s Ib Vogt, among others. Egypt aims to produce 20% of its energy needs from renewable sources by 2022 and 42% by 2035.

Infrastructure

Egypt to announce 6 October dry port contracts by the end of the year

The government will announce the winning consortium for the Sixth of October dry port by the end of December, according to the local press. The only two consortia competing for the tender are one comprising India’s Concord, Malaysia’s PSA, and Hasan Allam, and another made up of Schenker Egypt, 3A International, and Elsewedy Electric. Earlier reports had indicated the winning bid would be selected by the end of last month.

Construction on EGP 2 bn Menoufia logistics zone underway

Construction has begun on a EGP 2 bn smart logistics zone in Menoufia, according to the local press. The project is scheduled for completion within 30 months and will provide 5k jobs.

Manufacturing

Bargas’ Maher El Barwy, El Nasr Co ink MoU to set up new fertilizers factory

Liquefied gas producer Bargas owner Maher El Barwy and El Nasr Company for Fertilizers and Chemical Industries signed an MoU to set up a new factory at the state-owned company’s headquarters in Suez’s Attaka, El Nasr Vice President Waleed El Rasheed tells Youm7. The new 250k sqm facility, which will produce unspecified types of fertilizers and chemicals, is expected to cost USD 500 mn, El Rasheed said.

Health + Education

Nozha Hospital hopes to obtain licenses for New Cairo branch this month

The Nozha International Hospital Company expects to obtain licenses to establish a branch of Nozha Hospital in New Cairo before the end of the year, Chairman Hazem Sammour told the local press. The company aims to start construction of the EGP 400 mn hospital by early 2020 and complete it within four years, he said. The hospital will have a capacity of up to 100 beds, and will include intensive care and heart departments.

Real Estate + Housing

MBG Development plans EGP 10 bn new capital housing project

MBG Development plans to launch a EGP 10 bn, 100-feddan housing project in the new administrative capital in partnership with Gulf investors, Chairman Mahmoud Al Adel told the local press. Sales could begin next year. The development is one of several MBG projects in the new capital, with Boca Compound and Boca Capital Walk already under construction.

Karna Real Estate to invest EGP 500 mn in new capital medical mall

Karma Real Estate plans to invest EGP 500 mn in its “Inizio” medical mall project in the new administrative capital, Chairman Ahmed Mostafa said in a statement, according to the local press.

Tourism

Discovery Channel to produce Grand Egyptian Museum promotion videos

US-based TV network Discovery will be producing three promotional videos for the Grand Egyptian Museum (GEM), the Tourism Ministry said on Sunday, according to Ahram Online. The videos will be aired on the network’s Discovery Channel, TLC, and the Travel Channel — which operate in Europe, Latin America, Asia, Africa and the US. Tourism Minister Rania Al Mashat had previously said that the GEM’s expected official inauguration date is 4Q2020.

Telecoms + ICT

Egypt’s NTRA releases October mobile networks quality of service report

The National Telecommunications Regulatory Authority (NTRA) was out on Sunday with its monthly quality of service (QoS) report (pdf) on Egypt’s four mobile networks. Orange Egypt and Etisalat Misr fell back on the quality of their data services, while Vodafone Egypt and state-owned WE saw the highest prevalence of failed calls, according to a summary of key results courtesy of Hapi Journal. The QoS report was only recently introduced by the NTRA.

Automotive + Transportation

Elsewedy Electric to install intelligent transportation systems on six roads in Egypt

Elsewedy Electric is implementing a EGP 1.8 bn project to install intelligent transport systems on six roads in Egypt, according to the local press. Roads in Alexandria, Cairo, Ain Sokhna, Ismailia, Port Said, and Cairo-Suez will be fitted with the technology, which consists of a network of sensors and wireless devices that provide real-time traffic and weather information to drivers, enabling them to make better decisions and improving road safety.

GE to deliver first batch of locomotives to Egypt on Thursday

General Electric will deliver the first batch of 10 locomotives on Thursday, Transport Minister Kamel Al Wazir said, according to Al Mal. The USD 575 mn agreement signed in 2017 includes financing and supplying 100 new locomotives and refurbishing another 81. The US company is contracted to build the first 50 locomotives and deliver them over five batches. The remaining 50 will be manufactured in partnership with local companies.

Banking + Finance

Fawry in talks to set up bank transfer service for Egyptians in GCC

E-payments platform Fawry is in talks with local and regional banks to set up a bank transfer service for Egyptians living in the Gulf, Managing Director Mohamed Okasha tells Al Mal. The company is looking to initially establish the service in the UAE, Kuwait, and Saudi Arabia. The banks include the National Bank of Egypt, Bank of Alexandria, Banque du Caire, and ADIB. In other Fawry news, the platform is in negotiations with several companies to purchase minority stakes as part of a strategy to buy shares in businesses offering services that complement e-payments, Okasha tells Hapi Journal. The company is expected to complete two to three transactions in the coming months, Okasha added, without naming the targets.

Corplease plans EGP 2 bn securitized bond issuance

CI Capital’s Corplease is planning a EGP 2 bn securitized bond issuance in early 2020 to finance local expansion, sources close to the matter tell Al Mal. The company is reportedly in talks with local banks — including CIB, Arab African International Bank, and the National Bank of Egypt — to act as lead managers for the issuance.

Five banks launch electronic payment of mortgage installments

Five banks began on Sunday collecting mortgage payments electronically under the Central Bank of Egypt (CBE) and Mortgage Finance Fund’s initiative, according to the local press. The National Bank of Egypt, Banque Misr, Banque du Caire, CIB, and the Housing and Development Bank now allow borrowers with subsidized home loans to pay their installments through their mobile wallet or via ATM, eliminating the need to pay at the banks’ headquarters. The CBE is planning to expand the initiative to include 15 more banks and eight mortgage companies.

Egypt Politics + Economics

Egypt releases 61 defendants detained in September protests

Authorities have released 61 defendants who had been detained during the scattered 20 September protests, according to Al Shorouk.

Egypt launches new website for immigration authority

The government has launched a new website for the Passports, Immigration, and Nationality Administration, according to an Interior Ministry statement. The website is currently only available in Arabic, and can be used for 35 services, including nationality requests and immigration applications. The website also provides the physical locations of the administration’s offices across the country.

On Your Way Out

Experience Tut’s tomb through the wonder that is VR: As if a record-breaking Tutankhamun exhibit at London’s Saatchi Gallery wasn’t exciting enough, lucky attendees can don virtual reality gear and be transported to the Valley of the Kings to see a photorealistic version of the tomb as archaeologist Howard Carter would have uncovered it in 1922, with the experience narrated by actor Hugh Bonneville (of Downton Abbey fame). We’re not kidding: This is really happening, and Artnet has all the scoop.

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 16.05 | Sell 16.15

EGX30 (Monday): 13,538 (-1.8%)
Turnover: EGP 658 mn (8% below the 90-day average)
EGX 30 year-to-date: +3.9%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session up/down 1.8%. CIB, the index’s heaviest constituent, ended down 0.3%. EGX30’s top performing constituents were Credit Agricole up 0.5% and Egypt Kuwait Holding up 0.1%. Yesterday’s worst performing stocks were Egyptian Resorts down 6.2%, SODIC down 5.8% and Sidi Kerir Petrochemicals down 5.4%. The market turnover was EGP 658 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +62.5 mn
Regional: Net Short | EGP -93.3 mn
Domestic: Net Long | EGP +30.8 mn

Retail: 51.8% of total trades | 47.7% of buyers | 55.9% of sellers
Institutions: 48.2% of total trades | 52.3% of buyers | 44.1% of sellers

WTI: USD 56.11 (+0.27%)
Brent: USD 60.92 (+0.71%)

Natural Gas (Nymex, futures prices) USD 2.35 MMBtu, (+0.82%, January 2020 contract)
Gold: USD 1,467.80 / troy ounce (-0.10%)

TASI: 7,833.38 (-0.87%) (YTD: +0.08%)
ADX: 5,030.76 (-0.25%) (YTD: +2.35%)
DFM: 2,678.80 (-1.22%) (YTD: +5.89%)
KSE Premier Market: 6,661.78 (+0.43%)
QE: 10,182.12 (-0.10%) (YTD: -1.13%)
MSM: 4,075.11 (+0.25%) (YTD: -5.75%)
BB: 1,537.85 (+0.33%) (YTD: +15.00%)

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Calendar

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 (Sunday-Friday): 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.

1-4 December (Sunday-Wednesday): Cairo ICT 2019, 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.

2-4 December (Monday-Wednesday): African Economic Conference, Sharm El Sheikh.

2-13 December (Monday- Friday) The COP25 Climate Change Conference, Madrid

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).

11-12 December (Wednesday-Thursday): “Forum on peace and sustainability in Africa,” venue TBD, Aswan.

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.

5 January (Sunday): Postponed lawsuit hearing against Peugeot Automobile filed by Cairo for Development and Cars Manufacturing.

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.

1 February 2020 (Saturday): The administrative court will look into an appeal by Adeptio AD Investments against a Financial Regulatory Authority to submit a mandatory tender offer (MTO) for Americana Egypt.

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.

1 March 2020: A conference on “logistics and its impact on the movement of goods and industry,” venue TBD, Alexandria.

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.