Sunday, 2 February 2020

GERD, coronavirus and Palestine: It’s a foreign-policy kind of morning.

TL;DR

What We’re Tracking Today

enterprise

The business community is mourning Khaled Bichara, who tragically passed away on Friday in a car accident on the Ring Road near El Remaya Square. Bichara was an iconic startup founder who went on to become CEO of Orascom Development Holding and co-founder and CEO of tech-focused investment firm Accelero Capital.

Bichara, 48, kicked off a storied career when he founded internet service provider Link Company a few years after graduating from AUC with a BSc in computer science. The company launched MSN Arabia in partnership with Microsoft at a time when “web portals” were cutting edge and went on the first tech-flavoured M&A rollup in Egypt before later becoming Mobinil’s ADSL arm.

A fixture in the Orascom empire and close associate of Naguib Sawiris, Bichara went on to lead the fixed line and portal business unit at Italy’s at Wind Telecomunicazioni, a subsidiary company of Sawiris’ Wind Telecom, where he later served as COO. Bichara was later CEO of Orascom Telecom and helped lead the USD 6.6 bn merger of Wind and VimpelCom, which created what was at the time the world’s fifth-largest mobile operator with some 174 mn subscribers.

Bichara was an enthusiastic supporter of young entrepreneurs and shared his experience in interviews and social media posts on best practices for startups in Egypt and abroad.

Members of the community wishing to pay their respects may do so at a funeral service scheduled for tomorrow (Monday) at St. Mark’s Cathedral, Heliopolis, at 12pm CLT. The family will receive condolences on the same day at the Virgin Mary Church, Zamalek, from 6pm CLT. He is survived by his wife Marianne and sons Sherif and Galal.


International stories dominate the headlines this morning, with news of a GERD agreement between Cairo and Addis Ababa, the global spread of a novel coronavirus and The Donald’s latest on the Israel-Palestine conflict dominating headlines. We have the rundown on all three stories in this morning’s Speed Round, below.

Investors’ federation to meet Maait this week to lobby for tax changes: Top representatives from the the Egyptian Federation of Investors Associations will be sitting down with Finance Minister Mohamed Maait this week to air their grievances about the country’s tax system, which is expected to be getting a face-lift soon with a new income tax law. The federation is looking to abolish real estate taxes on industrial land, which businesses have for years been lobbying for, as well as ending the practice of freezing investor bank accounts for late tax payments. The investors will also bring up the 0.25% levy on company toplines to fund the government’s new universal healthcare system. Members of the association say the fee should only be paid by businesses operating in governorates where the system has been rolled out.

News triggers to keep your eye on over the coming weeks:

  • The purchasing managers’ index for Egypt, Saudi Arabia and the UAE is due out this Tuesday 4 February;
  • Foreign reserves figures for January will be released on Tuesday 4 February;
  • Inflation figures for January are out next Monday, 10 February;
  • Look for plenty of international interest at the Egypt Petroleum Show, running 11-13 February;
  • The CBE will meet on Thursday, 20 February to discuss interest rates.

DEBT WATCH- Yields on short-term bonds rise: Yields on short-term government debt rose slightly during an auction on Thursday, according to CBE data. A EGP 10 bn tranche of 6-month bonds generated an average yield of 14.496%, up from 14.335% earlier last week. A second EGP 10.5 bn issuance of 12-month bonds had an average yield of 14.28%, up from 13.737% during an auction on 21 January.

Oh and … it’s Groundhog Day, meaning we have lots more winter in store if some overgrown rat somewhere sees its shadow. Still, it’s an excuse to direct our readers to the Bill Murray classic — thank us later if you haven’t seen it (catch the trailer here, runtime: 2:39).


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The UK finally leaves the EU (sort of): The UK has officially separated from the European Union after 47 years of membership and more than three years since the Brexit referendum, the BBC reports. The country will continue to follow EU rules while it negotiates a bilateral trade agreement, which the government claims could be finalized by the end of this year. Brexit would see the UK abandon a trade pact that saw Egypt and the European Union ease trade barriers on agricultural and manufactured products.

Egypt’s trade councils are pushing trade officials to speed up talks with UK officials to ink a post-Brexit agreement to replace the EU-linked pact before the year is out, head of the Textile Export Council Magdy Tolba said. The officials began early talks in late 2018 over a new agreement, at which time the UK was said to be looking to negotiate terms similar to those in the EU pact. Egypt has been angling for terms that would increase exports.

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Desperate for foreign currency, Lebanese banks are dumping gov’t bonds: Lebanon’s March Eurobond sank to record lows last week as local banks sold sovereign debt to overseas investors amid a race for foreign currency, the Financial Times reports. The USD 1.2 bn Eurobond due on 9 March has fallen 5 cents to 77 cents on the USD as fears grow that the government may default on its repayments. Analysts are now concerned that the government will face harsh restructuring terms imposed by the new foreign holders of Lebanese debt, and lose its ability to work with local banks to ease its debt burden.


In international miscellany:

  • Trump on verge of impeachment acquittal: Republicans look to have secured President Donald Trump a swift acquittal from his impeachment trial after the senate narrowly voted to block witness testimony, the New York Times reports. A final vote is scheduled to take place on Wednesday.
  • The US ramps up its travel ban: The Trump administration has added Nigeria, Eritrea, Kyrgyzstan, Myanmar, Tanzania, and Sudan to its travel ban, preventing citizens from these countries from applying for immigration visas, Reuters reports. US security officials said the governments had failed to comply with US information-sharing and security requirements. Nationals from Nigeria, Eritrea, Kyrgyzstan, Myanmar will still be able to apply for temporary visas for tourists, business travelers, students, and workers.

PSA- WhatsApp is no longer working on smartphones using legacy operating systems, including Android 2.3.7, iPhone iOS 8, and all older systems, the BBC reports. WhatsApp has said the move is necessary to ensure user security. Most users have no need to worry: Simply updating your operating system should mean you can continue using the service. But iPhone 4 users face a challenge, as their phones only support the iOS 7 system.

Enterprise+: Last Night’s Talk Shows

Chatter on the airwaves was very much focused on regional politics and the coronavirus outbreak. The talking heads zoned in on the Grand Ethiopian Renaissance Dam talks and the latest on the US’ Middle East peace plan. We have chapter and verse on both in this morning’s Speed Round, below.

Adib talks peace plan with Kushner: By far the most notable coverage of the Middle East plan was from El Hekaya’s Amr Adib, who sat down for a face-to-face interview with US President Donald Trump’s Middle East advisor Jared Kushner, who is said to be the plan’s chief architect. Kushner told Adib that he sees a “very high probability” the Palestinian leadership will “blow” their chance at accepting the plan, which would end up hurting the Palestinian people and the region (watch, runtime: 3:13 and runtime: 3:10).

Why should the Palestinians agree? Kushner says the plan would create a “fully contiguous” nation connected from top to bottom, double the amount of land Palestinian have available, and give them the right to pray in Al Aqsa mosque. You can watch several other snaps from the interview here, here, and here.

President Abdel Fattah El Sisi’s sit-down with the Palestinian leader on the sidelines of an emergency Arab League meeting received plenty of airtime: Masaa DMC (watch, runtime: 0:56), Min Masr (runtime: 3:20), and Al Hayah El Youm (runtime: 5:40).

Elsewhere, political scientist Moataz Bellah Abdel Fattah suggested that Egypt likely got its way in the GERD talks, seeing as it was the only country to sign the preliminary agreement prepared after last week’s negotiations in Washington, DC (watch, runtime: 7:56). We have the full story in this morning’s Speed Round.

Speed Round

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At long last, we have found common ground with our neighbors to the south on GERD: Egypt, Ethiopia, and Sudan have reached an agreement over the most pressing sticking points over the Grand Ethiopian Renaissance Dam (GERD), including the timeline for filling the dam’s reservoir in stages following four days of meetings in Washington, DC, according to a Foreign Ministry statement. The three countries’ foreign and water resources ministers also saw eye-to-eye on the dam’s filling and long-term operation during periods of drought and “prolonged dry years,” the US Treasury Department said in a statement. Treasury Secretary Steven Mnuchin and World Bank President David Malpass participated as “observers” in the negotiations.

Egypt was the only country of the three to sign an initial agreement drafted at the end of last week’s talks, which outlined the points that were accepted during the meeting, the ministry statement notes.

The details of the agreement reached between Cairo, Addis Ababa, and Khartoum remain unclear. Ethiopia had initially planned to fill the dam’s reservoir in 12 years, beginning this July. The statements do not clarify whether this timeline has been changed. The agreement will also outline mechanisms for cooperation and dispute settlement over the dam, the statements say, without providing further information on what these mechanisms would entail.

What’s next? The technical and legal teams from the ministries have been mandated with preparing a final contract covering the aforementioned agreements. The ministers will then meet again in Washington on 12 and 13 February to review the final agreement, with an eye to sign it by the end of the month, according to the ministry statement. Reuters and the Associated Press also had the story.

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Egypt halts flights to China, evacuates citizens in Wuhan as coronavirus declared int’l health emergency: The government has begun evacuating Egyptian expats in China’s Wuhan, where the outbreak of the coronavirus originated, Al Masry Al Youm reports, citing sources in the know. According to the sources, the citizens will be brought back to Egypt, where they will be quarantined for a period of 14 days to ensure they have not contracted the virus. This comes after the World Health Organization declared the virus outbreak a Public Health Emergency of International Concern on Thursday.

National flag carrier EgyptAir suspended all flights to and from China indefinitely as of yesterday, Reuters reports. Shipping lines in Egypt are still operating as usual, the local press reports. Although the WHO did not issue recommendations on travel or trade restrictions, the US has imposed a ban on entry for foreigners who have recently traveled to China, as has Australia. US and global airlines are also suspending flights to the world’s most populous nation in a bid to stem the spread of the virus.

The virus wiped out the US equity market’s gains on Friday, while European and Asian shares also dropped as the death toll continued to rise, according to the Financial Times. The S&P 500 has plunged 0.2% since the beginning of the year, while the Dow Jones is down 1%.

In China, the country’s top exchange-traded funds are up against one of their worst dives in years, despite markets being closed since 24 January in observation of the extended Lunar New Year holiday, the Wall Street Journal reported. Apple also closed down all stores and offices in the Asian country, according to Bloomberg.

Traders have been short selling oil futures as concerns that travel bans could threaten global demand for jet fuel and other petroleum products has resulted in a 52% jump in wagers against the black stuff, according to Bloomberg. Crude oil prices dropped 16% to USD 51 / bbl in January, making it the worst start to a year in three decades.

The worst is yet to come: The pandemic could even be worse than the global financial crisis and Great Recession of 2008, according to Moody’s, mainly because no one saw this one coming. The agency’s industrial metals price index, which the ratings agency says is an “often-reliable barometer of global industrial activity,” is already down by 7.1%. Forecasts that the global economy would grow 3.3% in 2020 are now uncertain in the wake of the pandemic, which has been dubbed a “black swan.”

The virus’ death toll has reached 304, while the total number of reported cases reached 14,380 at dispatch time, according to the New York Times.

El Sisi calls for direct Palestine-Israel talks as PA cuts off ties with Washington, Tel Aviv over peace plan: Palestine and Israel must engage in direct negotiations over a potential peace agreement between the two countries, President Abdel Fattah El Sisi said during a meeting with Palestinian Authority (PA) President Mahmoud Abbas yesterday, according to an Ittihadiya statement. El Sisi reiterated Egypt’s support for a two-state solution that would grant Palestine sovereignty, the statement says.

No details were provided on the two leaders’ discussions of the Trump administration’s Middle East peace plan, which Egypt had urged Palestine to “carefully consider.” The plan, released last week endorsed Israeli annexation of large parts of Palestine as a quid pro quo for giving USD 50 bn in investment to the Palestinian Authority and allowing them limited self-governance. Abbas said yesterday the PA has cut off all its ties, “including those relating to security,” with the US and Israel, according to Reuters.

The Arab League rejected the proposal as “unjust” following a meeting of foreign ministers in Cairo yesterday, saying in a statement that it would not cooperate with the US in any attempts to implement the plan. The League also warned Israel against unilaterally putting the plan into action, which the organization said would be an infringement of international law. Bloomberg also had the story.

The Israeli cabinet postponed a vote, originally scheduled for today, on whether to unilaterally annex West Bank settlements, according to Sky News Arabia. Reports in the Israeli press suggested that caretaker prime minister Benjamin Netanyahu is looking to annex the settlements before the upcoming election on 2 March.

INVESTMENT WATCH- Centamin to invest USD 190 mn in Sukari gold mine this year: Egypt-focused Centamin plans to invest USD 190 mn this year into its Sukari gold mine in the Eastern Desert, according to the company’s earnings report. The London-listed gold miner, which last month rejected a takeover bid by Canadian firm Endeavour, will spend USD 95 mn on revamping the site, USD 45 mn on a new waste management facility, and USD 50 mn on a 30 MW solar facility.

Background: News of the investment comes after Endeavour’s attempted takeover of Centamin failed last month. The Canadian company decided not to renew its failed USD 1.9 bn takeover offer for Centamin, citing a loss of confidence in Centamin’s evaluation and performance. Centamin said Endeavour’s proposal for takeover was inaccurate in its assessment of the company’s prospects and valuation. The deadline for an offer has since passed and Endeavour must wait another 6 months to renew its acquisition bid.

INVESTMENT WATCH- Elaraby Group will invest EGP 1 bn this year in expanding its production capacity in Egypt, Vice President Ibrahim Elaraby told Al Mal. The company will spend EGP 500 mn on a La Germania gas cooker factory that is estimated to produce 500k units each year. Another EGP 500 mn will be invested in three other factories to manufacture fans, motors, and washing machines. Elaraby said that the company also plans to grow sales to EGP 22 bn in 2020, up from EGP 20 bn last year.

M&A WATCH- FAB will keep Bank Audi employees on board if its acquisition goes through -banking sources: First Abu Dhabi Bank (FAB) intends to keep Bank Audi’s 1,700 employees if it closes ongoing talks to acquire the Lebanon-based bank’s operations in Egypt, industry sources told Masrawy. The acquisition talks, which separate sources previously told the newspaper should wrap up within three months, were confirmed by FAB last month. An agreement would see Audi offload USD 4.4 bn-worth of assets due to the ongoing financial crisis in Lebanon.

M&A WATCH- Pioneers Holding tap FACT financial advisors to conduct fair value assessment: Pioneers Holding has tapped Financial Advice Corporate Transactions (FACT) to conduct a financial evaluation of the company’s subsidiaries ahead of a mandatory tender offer (MTO) in the works since October, according to an EGX disclosure (pdf). The new appointment comes after Pioneers’ former advisor, Fincorp, was handed a three-month suspension by the Financial Regulatory Authority last week over an unrelated dispute.

IPO WATCH- CI Capital is reportedly the frontrunner to quarterback agriculture and commodities firm Cairo 3A’s IPO on the EGX, Al Mal reports. CI Capital co-CEO Hazem Badran told reporters last week that the investment bank is set to manage the EGP 1 bn IPO of an unnamed food company. Previous reports had suggested that Cairo 3A plans to IPO this year. Sources close to the company had previously said the offering would see both existing shareholders exiting and new shares on offer. No details have yet emerged on the expected size of the offering.

Cairo 3A would be one of four IPOs CI Capital has in the pipeline for this year. The bank is set to take charge of a secondary stake sale by the state-owned Abu Qir Fertilizers Company and manage Enppi’s initial public offering. Enppi and Abu Qir are among the 23 companies included within the government’s privatization program announced back in 2018. The group is also aiming to manage the listing of an education firm, which we believe will be Taleem for Consulting and Educational Services. Badran had previously said it would be listed within the coming two years.

EFG Hermes topped the EGX’s brokerage league table for January with a market share of 15.2%, according to EGX figures (pdf). Pioneers Holding came in second with a 11.7% market share, followed by CI Capital (10.5%), Pharos (6.9%), Naeem (5.9%) Arqaam (5.7%), and Beltone (4.9%).

The bourse is launching today the EGX70 Equal Weight Index (EWI), which allocates all listed companies an equal weight of c.1.43% of the index on the first day of each quarterly review. This will make the performance of each company within the index, which excludes EGX30 companies, of equal weight. The index will replace the traditional EGX70, and should allow index funds — or investment funds that track stock exchange indices — to better measure their performance, reads a statement from the EGX (pdf). The bourse also issued a short guidebook outlining its methodology (pdf).

The S&P 500 also has an equally-weighted counterpart that allocates each constituent 0.2%. MSCI also has several equally-weighted versions, including the MSCI USA Equal Weighted Index.

Egypt leapfrogs South Africa, Nigeria in startup investments: Total startup funding in Egypt in 2019 rose 215% y-o-y to hit USD 211 mn, according to Partech Africa’s 2019 report (pdf). Egyptian startups attracted the third-highest number of investments in Africa in terms of volume and value. Egypt surpassed South Africa in total fundraising for the first time and also edged out Nigeria by total number of investments. Throughout the year, 12 startups raised funding rounds worth USD 5 mn or more, the report says.

Fintech once again took the cake for the most attractive sector for investment, accounting for 54.5% of total investments worth a combined USD 1.1 bn, according to the report. Investments in online and mobile consumer services, including health technology, education technology, and e-commerce grew to account for 29.3% of total startup funding in the continent last year.

Four Egyptian companies have achieved “major” growth milestones last year, according to a PwC report (pdf) looking at LSE Group’s Companies to Inspire Africa report one year after its publication in January 2019. Solar energy company KarmSolar and agriculture company Cairo 3A Poultry, who signed a USD 90 mn contract with one another, were both flagged as having achieved notable expansions. E-payments firm Fawry also earned a spot on the list for its IPO last year, while Carbon Holdings was mentioned among the companies that entered into a JV or alliance. The PwC report says that 85 of the 360 companies profiled in last year’s LSE Group report have seen major growth.

LEGISLATION WATCH- Tax Authority considers expanding VAT exemptions: The Tax Authority is considering expanding the list of items that qualify for VAT exemption to include oil products, crackers, soaps, air conditioners, and residential and non-residential units, head of the authority’s central administration El Sayed Sakr said at a conference, according to the local press. VAT on production inputs used for already exempt products — including wheelchairs and vaccines — may also be taken out of the tax, in a move that the pharma sector has been angling for. Under the existing VAT Act, 57 goods and services are VAT-exempt, including tea, sugar, milk, utilities, banking services, medicines and some health services.

We can expect to get more clarity on the VAT amendments within the next 2-4 weeks: The Finance Ministry has kept its cards close to its chest so far, revealing only that paper manufacturers may be in line for a tax exemption and that the changes would try to ensure that more registered taxpayers file VAT returns and pay their taxes.

FinMin considers VAT invoice incentives: The ministry is also considering granting tax discounts to companies that submit VAT invoices, Minister Mohamed Maait said during the conference. Ministry officials were supposed to meet yesterday with a company specialized in promoting tax invoicing among companies.

Commissioners urge court to rule in favor of steel raw material tariffs: A report by the State Commissioners Authority yesterday urged a high-level administrative court to rule against steel rolling mills in their effort to overturn a government’s decision to place import tariffs on steel rebar and iron billets, reports Al Mal. The commissioners said that protectionist measures were needed as imports of those raw materials have recently increased significantly, taking a toll on the local industry. The rolling mills have been protesting the tariffs, which were imposed by the Trade Ministry last April for nearly a year. Some twenty-two of them said last week they will suspend production after using their remaining billet stocks in the next 20 days.

Background: When the ministry imposed the tariffs, which start at 25% for rebars and 16% for billets and planned to be gradually tapered over three years, steel rolling mills claimed that they are unable to compete due to the high prices of raw materials. They managed to get a lower administrative court to reverse the decision, but failed to get their efforts through to the High Administrative Court ― which is now deciding whether to back the tariffs, or side with the lower court. The High Administrative Court will be in session on Saturday, 22 February, at which time it would have reviewed the commissioners’ report before issuing a final verdict.

Supply Ministry further studies shift to cash subsidies: The Supply Ministry will hold public consultations to gauge opinion on the proposed system of doling out cash for food subsidy recipients in place of the current system of in-kind subsidies using ration cards, Supply Minister Aly El Moselhy told the local press. El Moselhy stressed that the shift to cash subsidies will not be an individual decision and that he plans to meet with MPs in the coming period to discuss how to make the move most beneficial for the Egyptian population.

Background: The current system is based on ration cards with points used to purchase bread and other basic items. The obvious rationale behind switching to cash subsidies is to hand out payments directly to beneficiaries rather than subsidizing suppliers. The move could help streamline the system both in terms of state finances and fair access to the mns who rely on subsidies. The Cash Subsidies Act, under which this new system would be governed, was sent to the House of Representatives back in July 2019. The act would revamp the country’s cash subsidy programs and provide the mechanism and basis for eligibility.

EARNINGS WATCH- Real estate company Heliopolis Housing and Development (HHD) posted net profits of EGP 351.3 mn in 2H2019, up from EGP 48.6 mn last year, according to the company’s financial statement (pdf). The company attributed the sixfold increase in profits to the sale of a plot of land to Zahraa El Maadi for Investment and Development for EGP 481 mn, according to a disclosure to the bourse (pdf). This boosted revenues to EGP 732.4 mn during the six months, up from EGP 383.3 mn in 2018. HHD has extended until February a deadline for bids to acquire a 10% stake in the company along with management rights.

MOVES- Sami Zaghloul (Linkedin) has been appointed chairman of the board at Orascom Development Egypt, succeeding Manal Hussein Abdel Razek, who submitted her resignation on Wednesday, according to a statement to the EGX (pdf). Zaghloul was formerly the executive director at the African Development Bank, representing Egypt and Djibouti. Zaghloul’s appointment came into effect yesterday.

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Egypt in the News

FGM in the spotlight as 12-year-old victim dies in Assiut: The death of a 12-year-old in Assiut this week after being a victim of FGM is bringing up all sorts of questions in the foreign press about the prevalence of the illegal practice in Egypt. Her parents and the doctor who performed the surgery have all been arrested and are awaiting sentencing. (The Associated Press | Reuters | Metro | The Independent | The Daily Mail).

Could the EastMed natgas reserves be the very reason our exports fail? A “global gas glut” may be emerging, threatening to continue driving down natural gas prices and challenging Cairo’s ambitions to emerge as a regional energy hub, Cyril Widdershoven writes for OilPrice.com. If prices land below LNG production costs at our liquefaction plants, “the nation will have a real issue,” says Widdershoven, who notes that the next few months will be decisive.

Also getting attention in the foreign press:

  • Egypt will receive extra air defense units from the US, a US State Department official tells Al-Monitor. The decision comes in spite of the recent political fallout from the death of US-Egyptian citizen Mostafa Kassem in Egyptain custody.
  • Egypt’s population will pass 100 mn next month. As we edge closer to the milestone, Reuters looks at how the growing population is increasing pressure on ordinary people’s need for housing and jobs.

Diplomacy + Foreign Trade

USAID, Al Mashat talk cooperation: International Cooperation Minister Rania Al Mashat met with USAID Egypt boss Sherry Carlin and the US Ambassador to Egypt Jonathan Cohen to discuss cooperation through the Egyptian American Enterprise Fund and USAID’s Prosper Africa program, the ministry said in a statement.

Energy

SDX to drill three wells in South Disouq, West Gharib between February and June

SDX Energy will drill three wells in its South Disouq and West Gharib concessions by the beginning of June, the company said in a statement. It will begin drilling the first exploration well in South Disouq by the end of February and complete it in April, while the drilling of a second well will start in late April-early May and finish in June. SDX will also begin drilling an exploration well in West Gharib, which it estimates could add 200-300 bbl/d of production.

Infrastructure

Polaris to invest EGP 300 mn in Bosla second phase this year

Industrial developer Polaris Parks will invest EGP 300 mn this year in the second phase of its Bosla SME complex, Deputy General Manager Bassel Shuaira said, according to Masrawy. The second phase will be comprised of 62 units and is expected to be delivered next year.

Health + Education

Future Pharma negotiating with banks to part-finance new EGP 500 mn factory

Future Pharma Industries (FPI) is negotiating several unidentified local banks to secure funding for a new EGP 500 mn factory, CEO Gamal El Leithy told the local press. SPE Capital, which acquired a 30% stake in FPI for EGP 500 mn, will part-fund the project, he said, without providing an exact figure. The factory will produce ampoules and eye drops, and is expected to be operational by 2022.

Real Estate + Housing

Jaz hotels to invest EGP 2.5 bn this year to build 4 hotels

Travco subsidiary Jaz Hotel Group is planning to invest EGP 2.5 bn this year to build four new hotels in the Red Sea Governorate, CEO Alaa Akel told the local press. The hotels will be in Hurghada, Safaga, and Marsa Alam, and will have a capacity of 1340 rooms.

Banking + Finance

Ora Developers to obtain EGP 1 bn loan in 1Q2020 to finance Zed Towers

Naguib Sawiris’ Ora Developers intends to obtain a EGP 1 bn loan during this quarter to finance Zed Towers, CEO Haitham Abdel Azim told Hapi Journal. The company is considering offers from several banks, he said without disclosing their names.

AT Lease obtains factoring license

AT Lease has received a final license to provide factoring services for SMEs, according to a bourse disclosure (pdf). Tarek Fahmy had said last year the company planned to begin offering factoring and leasing services the first quarter of this year.

Other Business News of Note

Americana Egypt to invest EGP 150 mn this year

Americana Egypt plans to invest EGP 150 mn this year in new outlets and branch development, Managing Director Mohamed Hassan said at a press conference last week. The company will spend EGP 90 mn opening 23 new branches of its food outlets — which include Hardee’s, KFC, Costa Coffee, and Pizza Hut — and a further EGP 60 mn on developing branches and upgrading management systems. The company plans to establish a branch in the new administrative capital by 2021, Hapi Journal quoted Hassan as saying.

Egypt Politics + Economics

Hisham Ashmawy receives second death sentence

An Egyptian court handed terrorist and former military officer Hisham El Ashmawy his second death sentence yesterday over an attack in 2014 that claimed the lives of 22 army soldiers near the Libyan border, according to Reuters. Another 36 defendants were also sentenced to death.

On Your Way Out

Recycling awareness at your door: The Environment Ministry and the National Council for Women are sending representatives door-to-door to advise women on the importance of recycling and the proper way to do it, according to Reuters. The one-year EGP 1 mn program aims to reach 1 mn women living in Greater Cairo, Giza and Fayoum.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.74 | Sell 15.84
EGP / USD at CIB: Buy 15.74 | Sell 15.84
EGP / USD at NBE: Buy 15.75 | Sell 15.85

EGX30 (Thursday): 13,918 (+1.1%)
Turnover: EGP 806 mn (28% above the 90-day average)
EGX 30 year-to-date: -0.3%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 1.1%. CIB, the index’s heaviest constituent, ended up 0.3%. EGX30’s top performing constituents were Telecom Egypt up 10.0%, Sidi Kerir Petrochemicals up 6.5%, and AMOC up 5.2%. Thursday’s worst performing stocks were Orascom Construction down 1.2%, Cleopatra Hospital down 1.2% and Ibnsina Pharma down 1.0%. The market turnover was EGP 806 mn, and domestic investors were the sole net buyers.

Foreigners: Net Short | EGP -22.9 mn
Regional: Net Short | EGP -5.1 mn
Domestic: Net Long | EGP +27.9 mn

Retail: 59.1% of total trades | 59.5% of buyers | 58.6% of sellers
Institutions: 40.9% of total trades | 40.5% of buyers | 41.4% of sellers

WTI: USD 51.56 (-1.11%)
Brent: USD 56.62 (-1.24%)

Natural Gas (Nymex, futures prices) USD 1.84 MMBtu, (+0.66%, March 2020 contract)
Gold: USD 1,587.90 / troy ounce (-0.08%)

TASI: 8,246.59 (+0.75%) (YTD: -1.70%)
ADX: 5,156.19 (-0.17%) (YTD: +1.58%)
DFM: 2,790.42 (-0.54%) (YTD: +0.92%)
KSE Premier Market: 7,033.48 (-0.37%)
QE: 10,422.01 (+0.01%) (YTD: +0.16%)
MSM: 4,079.29 (0.00%) (YTD: +2.46%)
BB: 1,657.63 (-0.09%) (YTD: +2.95%)

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Calendar

23 January-4 February: Cairo International Book Fair 2020, New Cairo International Exhibition and Convention Center, Egypt.

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

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

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

2 February (Sunday): Cairo Economic Court will issue its verdict on two Americana Egypt lawsuits, one looking into minority shareholder’s lawsuit against Fincorp Investment Holding as Adeptio AD Investments’ financial advisor for its mandatory tender offer (MTO) for Americana Egypt and the other is concerned with an appeal by Adeptio AD Investments against a Financial Regulatory Authority to submit a mandatory tender offer (MTO) for Americana Egypt.

3-5 February: The Arab-African International Forum, Jeddah, Saudi Arabia.

4 February (Tuesday): Court hearing for PTT Energy Resources’ USD 1 bn lawsuit against Egyptian government.

8 February (Saturday): Midterm break ends. Traffic in Cairo stinks once more.

9-10 February (Sunday-Monday): The the 33rd ordinary African Union (AU) Summit where Egypt will hand over the African Union presidency to South Africa

11-13 February (Tuesday-Thursday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

12-13 February (Wednesday-Thursday) (TBC): Egypt, Ethiopia and Sudan to meet in Washington, DC, to review final GERD agreement.

14-16 February (Friday-Sunday): A Euro-Mediterranean Organization for Economic and Development Cooperation delegation will visit Egypt to discuss cooperating in the field of organic cotton and home textiles

23 February (Sunday): Court session for Arabia Investments Holdings’ lawsuit against Peugeot. It was previously postponed to 24 November 2019 and then to 5 January 2020, and now 23 February.

23 February (Sunday): Court session for Amer Group, Porto Group compensation claim against Antaradous

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

March: South Korean business delegation to visit Egypt.

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

3 March (Tuesday): Business Today’s bt100 awards ceremony, Cairo.

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

7 March (Saturday): International Conference for Investment organized by Suez Canal Economic Authority, Al Galala City, Egypt

17-18 March (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

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

26 March (Thursday): Court session for Amer Group, Porto Group lawsuit against Antaradous.

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

12 April (Sunday): Easter Sunday.

20 April (Monday): Sham El Nessim, national holiday.

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

25 April (Saturday): Sinai Liberation Day, national holiday.

28-29 April (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

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

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

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

9-10 June (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

17-20 June (Wednesday-Saturday): 2019 Automech Formula car expo, Egypt International Exhibition Center, Cairo.

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

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

28-29 July (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

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

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

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

15-16 September (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

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

6 October (Tuesday): Armed Forces Day, national holiday.

29 October (Thursday): Prophet Mohamed’s birthday (TBC), national holiday.

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

4-5 November (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

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

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

15-16 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

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

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

25 December (Friday): Western Christmas.

1 January 2021 (Friday): New Year’s Day, national holiday.

7 January 2021 (Thursday): Coptic Christmas, national holiday.

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