Tuesday, 4 February 2020

Egypt takes its first step towards privatizing some military-owned companies

TL;DR

What We’re Tracking Today

It’s data day: The purchasing managers’ indexes for Egypt, Saudi Arabia and the UAE are out today at 6:15am CLT — you’ll find them here when they’re released. Meanwhile, the Central Bank of Egypt will release today its foreign reserves figure as of the end of January.

Egypt, Sudan, Ethiopia are in the home stretch of GERD agreement as technical talks get underway: A two-day meeting of technical and legal experts kicked off in Washington yesterday to continue talks on a draft agreement that would regulate the filling and operations of the Grand Ethiopian Renaissance Dam, a source tells Masrawy. The Egyptian, Sudanese, and Ethiopian foreign and water ministers — who agreed last Friday on key issues following four days of meetings in DC — mandated teams from their ministries to prepare a final contract covering those sticking points.

The ministers will meet again in Washington on 12 and 13 February to review the final agreement with an eye on signing it by the end of the month. The agreement is expected to outline mechanisms for cooperation and dispute resolution, a Foreign Ministry statement out on Friday said.

Closer to home, the first round of public consultations on the Local Administration Act begin tomorrow, Al Masry Al Youm reports, and will run for a 20-day period. The House of Representatives’ discussion of the act, which aims to decentralize local councils and organize district elections, was postponed in a plenary session in December after the Support Egypt coalition rejected the draft as it stood. It’s still unclear what the sticking points were.

District elections to slip to next year? President Abdel Fattah El Sisi said last September that local elections would be held in 2019 or early 2020, but that assumed the legislation would be passed in December. That deadline could now slip to 2021 given voters are heading to the polls late this year in elections for the House of Representatives and the newly reconstituted Senate.

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

  • Inflation figures will be published next Monday, 10 February;
  • The Egypt Petroleum Show runs 11-13 February;
  • The CBE will meet on Thursday, 20 February to discuss interest rates.

The death toll from the Wuhan coronavirus has now broken 425 and the Financial Times is openly musing that it has “put globalization in reverse” as worry about a pandemic spreads.

The coronavirus outbreak will cut global GDP growth by 0.1-0.3%, depending on when the rate of infections peaks, the Financial Times says, citing Goldman Sachs forecasts. A big part of the damage will come in the first quarter, with the bank estimating 2% to be “shaved off global growth at an annualised rate” due to a direct hit to China’s economy.” There will be “some lost output,” and recovery in subsequent quarters won’t necessarily make up for it, Goldman chief Asia economist, Andrew Tilton says.

China’s stocks saw their worst day since August 2015 yesterday as markets reopened after the Lunar New Year holiday, falling 9.1% before recouping some of the losses to close down 7.9%. The market performance comes despite the Chinese central bank injecting RMB 1.2 tn (USD 171 bn) into the financial system to contain the effect of the outbreak, its largest one-day open market operation since 2004.

China accused t US has been fanning the flames of worry over the outbreak, China’s foreign ministry claimed, pointing to Washington’s move to impose travel restrictions on China despite this not being a recommended move from the World Health Organization.

OPEC and its allies are discussing major oil production cuts by Saudi Arabia in response to the coronavirus, which has resulted in a sharp fall in crude prices amid lower demand from China, the world’s largest oil consumer, the Wall Street Journal reports. Oil prices rose on the news, but Brent still remains at around USD 56/bbl.

Egyptian expats who were evacuated from Wuhan have landed in Matrouh, where they will be under quarantine for 14 days, Aviation Minister Mohamed Manar said, according to Masrawy. Two Egyptian travelers who showed symptoms of the virus were prevented from leaving China, but the cases remain unconfirmed, reports Al Mal.


Democrats in Iowa are gathering for the first state-level vote in the race to see who from their party will face off against The Donald in this fall’s election. Results from the caucuses were delayed at dispatch time. Head over to the New York Times or Politico to follow the numbers as they come in. Pundits say it’s too close to call who among Bernie Sanders, Joe Biden, Elizabeth Warren and Pete Buttigieg is likely to fill out the top three.

enterprise

Asset managers are raking in the Benjamins: Salaries in the asset management industry rose 16.4% last year, beating out pay rises in investment banking, the Financial Times reports, citing figures from salary comparison site Emolument. Median pay in the industry (including bonuses) increased to USD 167k as the US equity surge boosted returns for funds. Investment banking staff saw a smaller 12.4% pay rise, but enjoyed a higher median salary of USD 218k.

JPMorgan’s share price is becoming a problem: Chairman and CEO Jamie Dimon has spent most of the bank’s profits over the past three years on buying back the company’s stock, fueling a surge in its share price and making buybacks increasingly unsustainable, according to the Wall Street Journal. The bank will have to make a decision to either slow repurchases amid declining profits, thus adding pressure on returns on stock price; or continue to buy and also put more pressure on the stock. Others who faced a similar situation in the past have yet to recover, including Citigroup and Bank of America.

Also worth knowing about this morning:

  • Lebanon is looking to slash interest rates and recapitalize banks as the country scrambles to pull itself out of its banking crisis, according to a cabinet committee statement. (Reuters)
  • The UAE is about to join the ranks of gas producing countries after a major discovery between Dubai and Abu Dhabi holding 80 tcf of reserves will be jointly developed by government-owned giant Abu Dhabi National Oil Company and the Dubai Supply Authority, UAE Prime Minister and Dubai Emir Sheikh Mohamed bin Rashid Al Maktoum said on Twitter. Bloomberg has more.

PSA- Brace yourselves for traffic jams: Public schools will be back in session as scheduled this Saturday. Education Minister Tarek Shawki denied reports that mid-year holidays could be extended as a result of the coronavirus outbreak, saying “there is no change in the time being,” according to Ahram Online.

Enterprise+: Last Night’s Talk Shows

The talking heads took a break yesterday from regional politics, and shifted gears to business and econ. On the agenda: The kickoff of a plan to list military-owned companies and Saudi Telecom Company’s (STC) bid to acquire Vodafone Egypt.

Sovereign Fund, Defense Ministry sign agreement on privatizing military companies: Al Hayah Al Youm’s Lobna Assal took note of a cooperation framework inked yesterday between the Sovereign Fund of Egypt and the Defense Ministry’s National Service Projects Organization that will pave the way for listing military-owned companies (watch, runtime: 3:30). We have chapter and verse in this morning’s Speed Round, below.

Lamees had some analysis of STC’s bid to acquire Vodafone: Al Kahera Al Aan’s Lamees El Hadidi phoned Shuaa Securities’ head of research Amr El Alfy and former vice minister of finance minister Amr El Monayer for their input on Saudi Telecom Company’s planned acquisition of a 55% stake in Vodafone Egypt (watch, runtime: 13:57).

The transaction would be subject to a 0.3% stamp tax and possibly a tax on capital gains, El Monayer said. The stamp tax will be paid regardless, equally by the buyer and seller, and calculated on the total value USD 2.4 bn value of the transaction. The capital gains tax, which stands at 22.5%, would only come into play if the seller is not incorporated in a country with which Egypt has an agreement to prevent dual taxation.

World Bank’s Mohieldin on coronavirus and the global economy: The impact of the coronavirus outbreak on China’s global growth will most certainly be felt by other markets, World Bank Group Senior Vice President Mahmoud Mohieldin told Al Hekaya’s Amr Abib (watch, runtime: 7:17). The outbreak came amid adverse political conditions and at a time when global economic growth is already weak, says Mohieldin.

Speed Round

Speed Round is presented in association with

PRIVATIZATION WATCH- Egypt takes its first step toward privatizing some military-owned companies: The Sovereign Fund of Egypt (SFE) and the National Service Products Organization (NSPO) signed yesterday a cooperation agreement that will see the fund market subsidiaries of military-affiliated NSPO to private investors, the cabinet said in a statement. The signing came after President Abdel Fattah El Sisi twice said we could soon see army-owned companies and assets sell stakes on the EGX as part of the state privatization program.

What’s next? The SFE and NSPO will be selecting assets and businesses likely to attract the interest of both local and foreign investors and add them to the fund’s portfolio of assets, Planning and Economic Development Minister Hala El Said was quoted as saying. The fund would then be responsible for conducting feasibility and valuation studies, and running roadshows for the prospective listings.

Army could be stepping out: The studies to determine the best utilization of the selected assets will be conducted with other financial advisors on board, and could in some cases lead to a complete sellout to the private sector. The fund would also be allowed to invest directly in those assets, provided it signs on a private sector partner.

The potential portfolio: According to NSPO’s website, the organization parents 32 companies operating in heavy and specialized industry, commodities and food manufacturing, agriculture, fisheries and livestock, quarrying and mining, contracting, and services including conference management. This includes Wataniya Company for Roads, which has worked on almost every major infrastructure project in recent years, and Egyptian Steel

Meanwhile, the Mogamma isn’t up for grabs quite yet: The sovereign fund is still waiting for the government to completely clear the Mogamma El Tahrir bureaucratic nightmare before having the building transferred to it for a planned overhaul, CEO Ayman Soliman told reporters following the signing. When the sovereign fund launched last year, it was reported that the government will transfer the site to its portfolio to shop for investors. The process to shut down El Mogamma, and relocate the government offices within it to new locations, began in 2016.

enterprise

M&A WATCH- IOCs bidding for Shell’s Egypt assets: Royal Dutch Shell has begun receiving offers from international companies for the upcoming sale of its onshore upstream assets in Egypt’s Western Desert, the local press reports, citing an unnamed industry source. The source did not say how many offers have been submitted so far, or which companies have expressed their interest in Shell’s Egypt portfolio. Shell is looking to close the sale, which could net as much as USD 1 bn for the company, by the end of the year.

Background: Shell had said back in October it is planning the divestment “in order to fully concentrate on growing its Egyptian offshore exploration and integrated gas business.” The company’s portfolio in the Western Desert includes stakes in 19 oil and gas assets including the Badr El Din and Obaiyed area, as well as the North East Abu El Gharadig, West Sitra, Bed 1 gas, and West Alam El Shawish concessions, according to the company website. Shell is not divesting from its offshore assets, downstream lubricants, or its share in Egyptian LNG.

Advisors: Shell has reportedly tapped investment bank Citi to manage the upcoming sale, sources close to the matter said in November. We have yet to see official confirmation of these reports.

M&A WATCH- Starch and Glucose Company shareholders approve Cairo 3A acquisition bid: The Egyptian International Tourism Projects Company (Americana Egypt) and Cairo Poultry yesterday approved an offer from Cairo 3A to purchase their holdings in the Egyptian Starch and Glucose Company (ESGC), according to three bourse disclosures (here and here — pdfs). Cairo 3A offered earlier this week to buy out three major shareholders in ESGC, including all of Americana Egypt’s 11.6 mn shares in the company, amounting to a 23.2% stake. Cairo Poultry, another major shareholder, also accepted 3A’s offer to acquire its 27.3% stake in the company (around 13.65 mn shares). The third shareholder, Americana Egypt’s parent company Americana Group, is yet to respond to an offer to purchase its 41% stake.

Cairo 3A offered to purchase the shares at a price ranging between EGP 8.98-10.18, valuing the combined 91.5% stake at between EGP 450-510 mn.

What’s next? The final price will be decided following due diligence, which will be completed by 9 April. Both Cairo Poultry and Americana Egypt will accept any price within this range and sell their holdings after Cairo 3A makes a mandatory tender offer by 12 April.

Shares rise on the news: Shares in the Egyptian Starch and Glucose Company rose 3.5% during trading yesterday, while Cairo Poultry gained 1.9%.

Automotive sales fell 5.7% to 183k units last year, down from 194k in 2018, Al Mal reported citing figures from the Automotive Marketing Information Council (AMIC), an industry association. Passenger car sales led the decline, falling 13% in 2019 from the previous year to 127k vehicles. Buses (+27%) and trucks (+9%) were bright spots last year. The report, which relies on self-reporting by member distributors, shows Chevrolet as top-selling overall brand in 2019 (including passenger car and commercial vehicle sales), accounting for 23% of total sales. Nissan came second capturing a 11.7% market share, followed by Hyundai at 9.7%. The market contraction came despite cuts to customs rates on automobiles assembled in the European Union and as the EGP strengthened against the greenback in the back half of 2019.

CBE to launch mortgage finance program next month: The Central Bank of Egypt (CBE) is finalizing its mortgage finance program with several banks ahead of launching it in March, Mubasher reports, citing unnamed sources in the know. The EGP 50 bn program announced in December will provide middle-income homebuyers with subsidized mortgages on houses valued at up to EGP 2.25 mn. Individuals earning between EGP 4.2k-40k a month and households with monthly income between EGP 4.7k-50k will qualify for the preferential 10% interest rate on their mortgages, CBE Deputy Governor Gamal Negm said in December. The new program is a continuation of a previous CBE initiative that ran from 2014 until January 2019.

Egypt to cut natgas prices to factories in 1Q2020, analysts say: Plunging natural gas prices and market oversupply are increasing the likelihood that the Egyptian government will cut gas prices to factories during the first quarter, analysts tell Reuters. The government has already recently lowered prices for certain industries and sources last month claimed that it could move to cut them by another USD 1.5-2/mmBtu by the start of the next fiscal year.

This may not be happening soon enough, suggests Pharos’ head of research Radwa El Swaify, who forecasts more cuts before the end of March due to slumping international prices and the strengthening EGP. “They have no choice but to cut costs by reducing the prices of electricity and gas,” she tells Reuters.

Falling prices: Global gas prices averaged USD 2.57/mmBtu last year, down from USD 3.15 over the past four years, and fell below USD 2 at the end of January.

Taking advantage of plentiful supply: Egypt’s supply of gas has swelled on record domestic production and the start of Israel gas exports last month. This, combined with the low international prices, makes it logical for the government to ease the pressure on industry and lower prices, said Mohamed Abu Basha, chief economist at EFG Hermes.

The government is already making a profit on the gas it sells to industry, giving it more than enough room to make reductions, HC Securities analyst Mariam Ramadan points out. The government spends less than USD 3/mmBtu on average on gas but sells it at more than USD 5 to most industries.

Right on cue, textile manufacturers ask for lower prices: Several textile companies have asked the government to lower the cost of natural gas to USD 3/mmBtu from USD 5 currently, according to Youm7. Textiles, Apparel, and Home Textiles Export Council Head Magdy Tolba said that energy constitutes 30% of their total manufacturing costs at current prices, which impacts the competitiveness of Egyptian exports against industry in other countries that only pay USD 2.5/mmBtu.

Israel mulls bumping up LNG exports from Egypt. Israel’s Delek Drilling will decide this year whether to expand its natural gas exports via Egypt’s LNG terminal or through a floating terminal, CEO Yossi Abu said, according to Reuters. Delek’s options on the table are either using the Idku LNG plant in Egypt to develop the Aphrodite gas field off Cyprus alongside their partner, Shell, or to build its own floating LNG terminal near Leviathan off Israel’s Mediterranean coast. The drilling company is currently in talks with banks to secure long-term funding of USD 2.5 bn through bank financing or bonds. Leviathan’s offshore gas field came online last month and has started to supply Egypt and Jordan.

Contrary to earlier reports in the Israeli press, the Egypt-Israel natural gas pipeline was not the subject of an attack earlier this week. Israeli Energy Minister Yuval Steinitz and Leviathan gas field’s corporate partners both said that there has not been any damage to the EMG pipeline that runs between Ashkelon and El Arish, and that gas flow has continued normally, according to the Times of Israel, putting to earlier reports. A separate report from the Associated Press suggests that terrorists attacked a natural gas line running to a cement plant in North Sinai.

STARTUP WATCH- Elmenus raises USD 8 mn in Algebra, Global Ventures-led series B funding round: Cairo-based food-tech startup Elmenus has raised USD 8 mn in a series B funding round led by our friends at Algebra Ventures and UAE-based venture capital fund Global Ventures, according to an emailed statement (pdf). Investors Tarek Sakr and Hamad Al Homaizi, who partially exited Kuwait-based classifieds platform 4Sale, also participated in the round. Elmenus also raised USD 1.5 mn from Algebra back in 2017, which was at the time one of the largest series A rounds in Egypt. The company was founded in 2011.

STARTUP WATCH- Online furniture marketplace Homzmart has raised USD 1.3 mn in seed round funding from China’s MSA Capital, the Oman Technology Fund (OTF), and Choueiri Group’s Equitrust, reports Menabytes. The B2C ecommerce platform, founded last year by former Jumia execs Mahmoud Ibrahim and Ibrahim Mohamed, will use the funding to expand its team and develop the company’s tech infrastructure. Homzmart aims to capture a slice of what Mahmoud estimates is a USD 60 bn regional market for furniture by connecting suppliers directly to consumers.

REGULATION WATCH- FRA accepts EGX proposal to extend short selling, settling margin position period to 6 months: The Financial Regulatory Authority (FRA) has approved a proposal from the EGX to extend the period custodians can short shares to six months instead of two, effective today, the bourse said yesterday. The market regulator has also agreed to extend to six months the time limit for traders to settle their margin trading positions. These extensions only apply to securities not included in the list of securities eligible for specialized activities, which the EGX updated yesterday. The EGX also updated its list of authorized brokerages and companies (pdf) whose shares you can short.

Background: The EGX and Misr for Central Clearing, Depository & Registry (MCDR) launched short selling on the bourse in December. Beltone and HC Securities were the first brokerages to complete a short selling transaction. The practice has yet to take off in Egypt, with analysts reporting only dozens of trades and some speculating that brokerages simply don’t know how the short selling system operates.

Is Egypt reviving a USD 2 bn zombie solar panel manufacturing project? A Chinese partner will reportedly be contracted in 1H2020 to build two facilities to produce solar panels with a combined annual capacity of 5 GW in Aswan and Zaafarana, government sources told the press. The sources made no mention of the expected investment cost and did not name the Chinese contractor, noting only that the project will be financed through Chinese banks.

This is likely the USD 2 bn facility which made headlines in 2018: The sources said that the project was previously touted as being capable of producing 5 GW-worth of panels a year, but further studies showed it could produce less. This hints that the project referred to here is the USD 2 bn integrated solar panel factory, for which the military production minister was planning in 2018 to award contracts to China’s Golden Concord Group (GCL). Talks with the Chinese side broke down later this year. It remains unclear whether GCL came back to the negotiating table or if the government found another prospective Chinese partner.

Abu Qir could make it onto Morgan Stanley’s EM index after it completes its planned secondary stake sale, according to Naeem Brokerage’s research unit, Al Mal reports. The fertilizer company is expected to offer a 20-30% stake on the EGX during 4Q2019-2020, with CI Capital on board to quarterback the transaction. Abu Qir would join several Egyptian companies already included in the investment bank’s index including CIB, Elsewedy Electric, and Eastern Company.

Gov’t settles overdue export subsidies with 31 companies: The trade and finance ministries have signed agreements with 31 foreign and local companies to settle outstanding export subsidy payments, the Trade and Industry Ministry said in a statement (pdf), without disclosing how much the companies were paid. This comes less than a week after Prime Minister Moustafa Madbouly ordered the Finance Ministry to begin paying the dues in February.

The government has so far paid out EGP 790 mn in overdue subsidies to 75 companies, and agreements have been signed with 67 other large companies that will see EGP 6 bn paid out over the coming five years as long as they commit to new investments. Of this, EGP 291 mn had been paid to 12 exporters by the end of last year, Trade Minister Nevine Gamea said yesterday.

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 a new EGP 6 bn framework the government had approved in June.

DISPUTE WATCH- Grievance committee rejects Adeptio’s cases against the FRA over Americana MTO dispute: The Financial Regulatory Authority’s (FRA) grievance committee has rejected Adeptio’s appeal against the market regulator’s decision to reject its mandatory tender offer (MTO) for a minority stake in the Egyptian International Tourism Projects Company (Americana) last November, according to a committee disclosure to the bourse (pdf). The committee said the financial advisor appointed to conduct the company’s fair value assessment had been in violation of fair evaluation practices. The committee also upheld (pdf) the FRA’s decision to require Adeptio to hire a new financial advisor to conduct a fresh evaluation, and submit a new MTO.

EARNINGS WATCH- CIB delivers record 4Q, FY2019 earnings: CIB posted record consolidated net profits of EGP 3.26 bn in 4Q2019, up 27% y-o-y from EGP 2.56 bn during the same quarter the year before, according to a company statement released overnight (pdf). The bank also delivered record a full-year bottom line of EGP 11.8 bn, up 23% y-o-y. Revenues for the quarter hit EGP 6.15 bn, rising 18% y-o-y, while full-year revenues came in 13% higher y-o-y at EGP 23.0 bn. Management said the strong growth figures came despite “vigorous competition over market funds” in the banking sector as a result of the Central Bank of Egypt’s 450 bps interest rate cuts delivered throughout the year.

Looking ahead: “We remain positive about the economic outlook and confident about CIB’s ability to ride out market variations in light of the expected continuation of the monetary easing cycle, drawing on its proven record of resilient balance sheet fundamentals and effective management besides its affluent capital buffer,” the bank’s management said. Read CIB’s full consolidated earnings release here (pdf).

Madinet Nasr Housing & Development’s (MNHD) net profit grew 5.6% in 2019 to EGP 1 bn in 2019, according to an EGX disclosure (pdf). The company posted consolidated revenues of EGP 2.2 bn during the year, while its presales grew to EGP 6.3 bn.

Worth Watching

We have the first ad for the Grand Egyptian Museum: International Cooperation Minister Rania Al Mashat dropped the first official ad for the Grand Egyptian Museum (GEM) on Instagram earlier this week. The ad will be broadcast on the Discovery Channel as part of the government’s GEM promotion campaign.

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The Macro Picture

Trade growth between emerging economies is flatlining: Expectations that sluggish growth in developed economies would stimulate intra-EM trade look to have been proven wrong as trade between emerging economies continues to flatline, Steve Johnson writes in the Financial Times. Although EM exports heading to other developing countries did leap from 24% in 1999 to 41% in 2013, they have since stagnated, and still stood at just 41-42% last year. This is despite the fact that EM economies have been expanding at a faster rate than those of developed markets, witnessing GDP growth of 4.6% a year compared to 2% in developed markets.

There are a host of possible reasons for this: Experts appear divided over whether the stagnation is the result of structural issues, such as the slowdown in Chinese growth, or whether it is cyclical. Some economists argue that with the global web of supply chains having been established in the 1990s, the barriers to intra-EM trade are too entrenched to be easily overcome. Others attribute the lack of growth to the weakness of EM currencies in recent years: while EMs have seen significant GDP growth compared to DMs, their share of global GDP in USD has largely stalled since 2013, when it stood at 39.2% after a rapid rise from 19.7% in 1999.

And there’s no consensus on whether it will pick up. If south-south trade is to occupy a larger proportion of global trade, there needs to be “positive reform momentum” in larger emerging economies to pull in more commodities from other EMs, argues strategist Maarten-Jan Bakkum. He is one of several economists to see the potential for strong intra-EM trade growth, partially catalyzed by the US-China trade war. The trade agreement currently being negotiated by Washington and Beijing may impact EM exports, however. And a reversal of globalization threatens to undermine outsourcing from DMs to EMs, as well as global growth as a whole. Meanwhile, many EMs may have also fallen into the “middle-income trap,” argues economist Thomas Costerg, in which a shift away from export-oriented models has impeded productivity.

Egypt in the News

The fourth anniversary of the murder of Italian PhD student Giulio Regeni is getting ink in an otherwise quiet morning for Egypt in the international press, with the Guardian reporting that Italian prosecutors are hoping that a parliamentary inquiry will produce new information.

Also getting attention in the foreign press:

  • Minya could soon be back on the global tourism map, says Voice of America, which ran yesterday a series of images of landmarks, and ongoing excavation and restoration works in the Upper Egyptian province.
  • The Guardian reviewed Egyptian-American writer Rajia Hassib’s second novel, which explores how Rose — an Egyptologist who left Cairo for a postdoc in New York — finds herself embroiled in the mysterious death of her sister, Gameela.
  • Regional rivalries: Egypt’s recent antagonisms with Turkey and Ethiopia is making our neighborhood an “arena for international competition,” says the Arab Weekly.

Energy

NREA awards Ras Ghareb 250 MW wind plant tender to Vestas

The New and Renewable Energy Authority (NREA) has awarded the tender to build Lekela Egypt’s EUR 260 mn, 250 MW wind plant in Ras Ghareb to Danish firm Vestas, sources in the Electricity Ministry told Al Mal. The final contract is expected to be signed this month after the NREA agrees terms with the company. Vestas’ bid was the only offer on the table after both Siemens Gamesa and Germany’s Senvion retracted their bids in October.

Infrastructure

Govt to build 1k EV charging stations in coming three years

The government will build 1k fast charging stations for electric vehicles in different parts of Egypt in the next three years, Public Enterprises Minister Hisham Tawfik said last week, according to Masrawy. This is one of a number of measures mentioned by Tawfik that will be introduced to stimulate the local manufacture of EVs. Public authorities, economic bodies, and public sector companies will be required to replace 5% of their fleet every year with electric cars, while the government will subsidize the costs of the first 100k locally-produced cars to the tune of EGP 50k per vehicle, on the condition that the cars are able to cover over 400 km per charge.

Manufacturing

Galina-Agrofreeze starts building its fourth factory in Egypt, to cost EGP 115 mn

Galina-Agrofreeze has broken ground on its fourth factory in Egypt, which is expected to cost EGP 115 mn and produce 10k tonnes of frozen fruits and vegetables a year, Chairman Abdelwahed Soliman told the press. The company has also recently completed its third factory, and is planning to inaugurate it in June, Soliman said.

Health + Education

Badr University signs hospitality training partnership with Switzerland’s BHMS

Cairo for Investment and Real Estate Development’s (CIRA) Badr University signed yesterday a partnership agreement with Switzerland’s Business and Hotel Management School (BHMS) to offer hospitality management training and degrees at the university, according to an emailed statement (pdf). The partnership will see Badr introducing a 3-year Bachelor’s degree and a 1-year professional diploma in hotel and tourism management this September, with later plans to introduce a Master’s degree. The agreement also includes opening a hospitality academy next year, and BHMS will help provide hospitality training at Badr’s planned Assiut campus in 2021.

Real Estate + Housing

NACCUD to resume land offering in Egypt’s new capital in July

The New Administrative Capital Company for Urban Development (NACCUD) intends to start the fourth offering of land in the new administrative capital to developers by the end of July, Chairman Magdy Amin told Hapi Journal. Amin’s remarks come after NACCUD President Ahmed Zaki Abdin saying last week that the company will suspend land sales in the capital until the government moves to the capital.

Banking + Finance

Misr Financial Investments to launch EGP 1 bn investment fund

Banque Misr’s investment arm, Misr Financial Investments, is planning to launch a EGP 1 bn investment fund during the coming months, the fund’s Managing Director Atef El Mahmoudi told Hapi Journal. Misr Financial Investments will hold a 10% stake in the fund, he said, adding that the prospectus has already been submitted to the Financial Regulatory Authority.

BdC in talks with EIB to on-lend EUR 90 to Egyptian SMEs

Banque du Caire (BdC) is in talks with the European Investment Bank to open a EUR 90 mn credit line to on-lend to local SMEs, reports the domestic press. State-owned banks, including BdC and the National Bank of Egypt, have been recently borrowing from foreign multilateral development banks to provide loans to SMEs as part of the government’s subsidized lending initiative.

On Your Way Out

Bill Gates is getting an Egyptian son-in-law: Egyptian equestrian Nayel Nassar got engaged on Thursday to Bill Gates’ oldest daughter Jennifer, who he met at Stanford University, Business Insider reports. Bill Gates seems to approve, saying that he is “completely thrilled” about the news on his daughter’s Instagram post.

The Market Yesterday

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

EGX30 (Monday): 13,878 (-0.1%)
Turnover: EGP 470 mn (25% below the 90-day average)
EGX 30 year-to-date: -0.6%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.1%. CIB, the index’s heaviest constituent, ended up 0.8%. EGX30’s top performing constituents were AMOC up 2.0%, Sidi Kerir Petrochemicals up 1.0%, and CIB up 0.8%. Yesterday’s worst performing stocks were Telecom Egypt down 6.4%, Juhayna down 1.9% and Heliopolis Housing down 1.8%. The market turnover was EGP 470 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +24.8 mn
Regional: Net Short | EGP -28.9 mn
Domestic: Net Long | EGP +4.1 mn

Retail: 57.0% of total trades | 50.2% of buyers | 63.7% of sellers
Institutions: 43.0% of total trades | 49.8% of buyers | 36.3% of sellers

WTI: USD 50.39 (+0.56%)
Brent: USD 54.68 (+0.42%)

Natural Gas (Nymex, futures prices) USD 1.82 MMBtu, (+0.05%, March 2020 contract)
Gold: USD 1,580.70 / troy ounce (-0.11%)

TASI: 8,112.69 (-0.55%) (YTD: -3.30%)
ADX: 5,076.67 (-0.77%) (YTD: +0.02%)
DFM: 2,771.31 (+0.18%) (YTD: +0.23%)
KSE Premier Market: 6,976.57 (-0.36%)
QE: 10,251.52 (-1.07%) (YTD: -1.67%)
MSM: 4,115.50 (+0.56%) (YTD: +3.37%)
BB: 1,662.50 (+0.17%) (YTD: +3.25%)

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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.

2-5 February (Sunday-Wednesday): A delegation of Swiss businesses will visit Egypt to discuss investment.

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

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.

2-5 March (Monday-Thursday): EFG Hermes’ 16th annual One on One conference, Atlantis, The Palm, Dubai.

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.

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. © 2020 Enterprise Ventures LLC.