Sunday, 16 February 2020

Analysts are split on an interest rate cut this week

TL;DR

What We’re Tracking Today

Story of the Day #1- El Corona has officially landed in Egypt. We got a Valentine’s Day present in the form of the first identified case of coronavirus. Unconfirmed reports suggest the patient is a Chinese national who landed at Cairo International Airport and is now in quarantine. We have the full story in this morning’s Speed Round, below.

The global travel and luxury markets are being hammered as travelers stay home in fear of the virus, which is now officially called covid-19, and pundits are suggesting it could have a longer-term effect on the global economy.

The conference industry is taking it on the chin. Mobile World Congress, the world’s largest mobile industry gathering originally scheduled for Barcelona, was canceled last week. CP+, the high-profile photography industry gathering in Yokohama, has just followed suit.


Story of the Day #2- Analysts are split on whether you can expect a rate cut when the CBE’s Monetary Policy Committee meets this Thursday. Half of the economists surveyed in our interest rate poll (which you’ll find in this morning’s Speed Round, below) think the central bank will hold off on further cuts until later in the year, while the other half say the MPC could resume its easing cycle this week.


The House Planning and Budgeting Committee will finally begin discussing the unified tax law this week, according to the local press. The bill, which received cabinet approval back in October, would create a single platform for filing income tax, stamp tax and VAT returns.

(Don’t confuse that bill with the long-promised rewrite of the tax code, which would (among other things) close loopholes for foreign companies operating in Egypt and on which Finance Ministry Mohamed Maait has promised public consultations sometime this winter.)

Auto incentives package heading to the House this week? The Trade Ministry is putting the final touches on the government’s auto incentives package and will ship it off to the House of Representatives for review this week, Minister Nevine Gamea said, according to Al Mal. The House Industrial Committee is expected to begin its discussion of the bill at the end of February, the local press reports. The reproted “strategy” would be “quite different” from what was presented by previous ministers, Gamea added, noting that the plan would devote an entire pillar to develop the electric vehicle market as the government moves to cut down on the use of gasoline and diesel fuel.

From what we know so far, the bill to get the strategy up and running would give incentives to local assemblers to use more domestic components through customs breaks at a rate dependent on the percentage used. There is also some support within feeder industries and a clearer strategy for attracting FDI in the sector, head of the Industrial Development Authority’s domestic manufacturing department Alaa Salaheldin said in December. Salaheldin noted at the time that the framework would draw from previous iterations of the program, by which we had assumed he meant the scrapped automotive directive. You can read our primer here.

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The Minority Report wasn’t meant as an instruction manual: China’s biggest military technology company is setting up a national lab to create pre-crime-esque technologies that can predict where crimes might happen and intuit a person’s emotions, according to the Financial Times.

Egypt’s answer to Mother Teresa has been nominated for the 2020 Nobel Prize: Magda Gobran, aka Mama Maggie, has been nominated by several national and international institutions, including Canada’s Parliament, for her humanitarian work with underprivileged children, according to a statement by the Emigration Ministry.


IN MEMORIAM- The business community lost another member late last week when Crave co-founder Hazem El Dalati suddenly passed away. Hazem and his brother Fahed helped transform Egypt’s dining scene with the international fusion restaurant, which they set up through their Tourism Investment Company (TICO) back in 2004. The company operates Crave restaurants, a catering business, and a hospitality management arm.

Enterprise+: Last Night’s Talk Shows

No particular topic was driving the narrative on last night’s talk shows. The discovery of Egypt’s first covid-19 case — which happened on Friday and which we recap in full in Speed Round, below — earned some airtime, but wasn’t a focal point.

The government wants you to know it’s not hiding more covid-19 patients: Al Hayah Al Youm's Lobna Assal phoned Health Ministry Spokesperson Khaled Megahed, who confirmed that no other cases of the virus have been detected in Egypt (watch, runtime: 15:23). Min Masr’s Amr Khalil also reported the news, calling on viewers to refrain from spreading rumors and dramatizing the matter (watch, runtime: 5:30).

GERD negotiations wrap up in Washington: Assal also had a chat with Irrigation Ministry spokesperson Mohamed El Sebai, who said Egypt, Ethiopia, and Sudan have all had the chance to present their views on GERD during the US-sponsored talks that kicked off last November (watch, runtime: 5:26). The talks, which wrapped up on Thursday, are expected to culminate in a final agreement by the end of this month. We have more in this morning’s Speed Round.

Cabinet highlights record economic growth: The Cabinet’s Information Decision Support Center (IDSC) published yesterday an infographic showing that Egypt’s most recent annual economic growth rate on record, 5.6% in FY 2018-2019, is the highest in 11 years. Assal (watch, runtime: 5:04) and Khalil (watch, runtime: 1:58) both took note.

Egypt looks to AfDB for EGP 22 bn loan for Cairo-Cape Town connection: Authorities are in talks with the African Development Bank (AfDB) to borrow EGP 22 bn (c. USD 1.2 bn) to improve roads in upper Egypt as part of the plan to link Argeen on the Egypt-Sudan border to Khartoum for the proposed Cairo-Cape Town highway project, Transport Minister Kamel El Wazir told El Hekaya’s Amr Adib (watch, runtime: 8:03). The accident-prone Idku-Aswan highway, which would be part of the pan-African, will be getting a complete overhaul, El Wazir said.

Post authorities have uncovered the country’s “largest money laundering operation,” and have placed five employees of the post office in Matrouh under investigation, Egypt Post boss Essam El Saghir told Assal (watch, runtime: 5:53). Newly installed “advanced systems and solutions” at the post managed to track down a total of EGP 1.75 bn transfer to 25 different accounts opened in Matrouh from several Upper Egyptian governorates, including Luxor, Aswan and Assiut, El Saghir said, without going into the fine details.

Speed Round

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SURVEY- Analysts are split down the middle on whether the Central Bank of Egypt will resume its easing cycle when it meets on Thursday. Six out of 12 economists we polled last week expect the central bank’s Monetary Policy Committee (MPC) to cut rates by 50-100 bps and five forecast it to hold fire in the face of uncertainty surrounding the trajectory of inflation and the impact of the coronavirus. Mohamed Abu Basha, head of EFG Hermes’ macro unit, was on the fence about whether the CBE would cut or leave rates unchanged.

The CBE left rates on hold last month, citing a pickup in inflation, a rise in unemployment, and volatility in the oil market. This means that the overnight deposit rate remains at 12.25% and the lending rate at 13.25%. The main operation and discount rates both stand at 12.75%.

There’s a lack of agreement on how recent inflation figures will factor into the CBE’s decision. The five respondents predicting a cut said that the central bank would prioritize other concerns, given the fact that inflation remains within the central bank’s 9% (+/- 3%) target range. Rising food prices pushed inflation up to 7.2% last month, an increase of just 0.1 percentage points from the month before. Others — such as Beltone’s Alia Mamdouh — believe that it will wait until it sees signs of calming inflation before resuming the easing cycle.

And don’t forget last week’s suggestion that leaving rates where they stand would be good for the carry trade and, by extension, for Egypt’s foreign exchange position.

Deteriorating private sector business activity a source of concern for the CBE: The central bank is likely to react to last month’s poor PMI figures and cut rates in an attempt to support business activity, the dovish analysts contend. Non-oil private sector business activity sank to three-year lows last month, marking six consecutive months of contraction. “The fall in the PMI survey shows that the private sector needs some stimulus,” said the chairman of economic think tank Signet, Angus Blair, who predicts a 100 bps cut. Bassem Kamar, lead economist for the south and east Mediterranean at the European Bank for Reconstruction and Development, forecasts a 50 bps cut for similar reasons. “The central bank needs to encourage the private sector to invest in order to play the role assigned to it in economic growth and job creation, which requires a reduction of interest on lending to boost corporate capital expansion,” he said.

But the CBE will also have to weigh the potential fallout from the coronavirus: Several analysts said the central bank is not likely to risk cutting interest rates while the full impact of the coronavirus remains unknown. “I expect that the CBE will tend to stabilize until the study of the impact of the coronavirus on the investment climate and trade exchange with China,” said Sara Saada, senior economist at CI Capital. Some surveyed said there’s a risk of portfolio investment exiting emerging markets in light of the USD’s rise amid the fears of the virus, so holding off on a rate cut would make Egypt stickier.

There’s debate about just how much the trade disruption caused by the virus will affect inflation: Professor of Economics at Cairo University and former IMF and World Bank advisor, Fakhry El Fiky, warns that there is a risk of inflation being imported if trade with China slows. “If merchants in Egypt resort to storing Chinese goods and raising their prices, this will lead to an increase in inflation in the coming months,” he said. Hany Genena, head of research at Prime Holdings, played down the threat, suggesting that while local firms would experience “pressure” for the coming 1-3 months, there is little risk of inflation caused by businesses pushing up the prices of Chinese goods. “This will not lead to a sustained shock to inflation as demand is naturally low due to weak liquidity among consumers,” he said.

Are the CBE’s recent initiatives a substitute for a rate cut? El Fiky, who thinks the CBE will opt to leave rates on hold, said that doing so would not risk restricting business investment due to the recent support given by the central bank to the tourism, industrial, and real estate industries.

What does this mean for interest rates over the longer term? Amr El Alfy, head of research at Shuaa, said that the twin uncertainties of the coronavirus and rising inflation will likely mean that the central bank holds off on further cuts until the second half of the year, when it is likely to cut by 200 bps before 2021. However, he does not rule out the possibility of a cut in April. Pharos’ head of research Radwa El Swaify, who was among the analysts to forecast a hold this month, sees the central bank following a “calmer policy” through 2020. She believes the CBE will cut by 200-300 bps this year, with the cuts most likely coming in April, June and August. Abu Basha expects rates to fall by 150-200 bps by the end of the year, calling another cut “inevitable.”

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Egypt reported its first case of a covid-19 infection on Friday as the the Health Ministry confirmed that it had placed a foreign national in quarantine. The ministry notified the World Health Organization (WHO), which said the patient was found carrying the virus, but has so far not shown any symptoms and is stable. The ministry did not specify the person’s nationality or the port of entry through which they arrive in Egypt, but Youm7 claims it was a Chinese national who landed at an airport. Another 14 passengers who were onboard the same plane have also been placed under quarantine as a preemptive measure, the newspaper says, citing ministry sources. The case is the first in Africa and makes Egypt the 28th country the virus has reached.

The Chinese embassy in Cairo issued a statement saying that China is “cooperating with the international society including Egypt with an open, transparent and responsible attitude and would like to continue to strengthen our bilateral cooperation in order to safeguard the public health of the region.” The statement did not confirm the first case in Egypt was a Chinese national.

The House Health Committee is planning to summon Minister Hala Zayed for a briefing on measures to contain the virus, the local press reports, quoting parliamentary sources.

Coronavirus sees goods stacked up in Egyptian ports amid paperwork delays, supply shortage starting to bite: The Cairo Chambers of Commerce’s customs division is calling for the release of imported Chinese goods that are being held in Egyptian ports due to a slowdown in Chinese paperwork, according to Al Masry Al Youm. These delays might drive up prices as cheap Chinese goods become less available, former general importers division member at the Federation of Egyptian Chambers of Commerce told Al Monitor. Plastic and acrylic manufacturing company Rubex appears to already feel the pinch, saying in an EGX filing (pdf) they have been facing trouble importing raw materials from China and may have to turn to Europe, which will cause price increases.

Total cases worldwide now stand at >68.5k and the death toll has climbed to 1,655, only four of which are outside of China, according to a Bloomberg live tracker. The coronavirus also claimed its first victim outside of Asia after a Chinese tourist died in France yesterday, reports Bloomberg.

The arrival of the virus in Egypt is getting a lot of coverage in the foreign press: The Associated Press | France 24 | Deutsche Welle | Times of Israel | Asharq Al Awsat | Gulf News | Washington Post | Euro News | Arab News | Daily Mail

Aton Resources gets Egypt’s first new gold exploration license in 15 years: Egypt has approved an application from Vancouver-based Aton Resources for an exploitation license at Hamama, the company said in a statement (pdf). Aton will mine for gold in the Eastern Desert’s Hamama region under a 20-year license with an additional 10-year option period. The company will also retain rights to explore in the Abu Marawat concession area in the Arabian-Nubian Shield, north of Sukari mine, where existing player Centamin is operating. The government last awarded a gold mining license in 2005 to Centamin.

The approval is pending completion by the authorities of several procedures, including a review of an economic feasibility study, the local press says, quoting an anonymous industry source. A license can then be issued, but only after a bill makes its way through cabinet and the House of Representatives, the source said.

Testament to easier rules: Egypt’s last mining tender three years ago was met by lackluster investor appetite due to its uncompetitive commercial terms. More favorable terms under the executive regulations to the amended Mineral Resources Act have been provided, including paying the minimum 5% royalty on annual gold production. “This also underscores Egypt’s new commitment to developing its exploration and mining sector,” Aton CCEO Mark Campbell said.

Catalyst for upcoming tender? Egypt is reportedly planning to launch an international gold exploration tender by the beginning of March in the Eastern Desert, which will be the first mining tender since the Mineral Resources Act was amended last year and the first for gold exploration since 2017. “We eagerly look forward to participating in the upcoming exploration tender,” Campbell said. Centamin is currently the only company producing gold in Egypt from its Sukari mine and has seen its production up 8% in 2019. Reuters and Bloomberg both have the story.

Unemployment in Egypt fell to 8% in 4Q2019, down 0.9% y-o-y from 4Q2018, according to Capmas figures. Unemployment increased marginally on a quarterly basis from 7.8% in 3Q2019 and 7.5% in 2Q2019, which was the lowest figure recorded in a decade. This comes as non-oil business activity hit three-year lows and employment rates dropped for the third consecutive month in January, according to the latest purchasing managers’ index (PMI).

M&A WATCH- TE really wants everyone to know it has a right of first refusal in Vodafone-STC acquisition: Telecom Egypt (TE) confirmed in a regulatory filing (pdf) last week that it has the right of first refusal to the Saudi Telecom Company’s purchase of Vodafone Group’s 55% stake in Vodafone Egypt and that it has pre-emption rights to make a counteroffer. The state-owned landline monopoly said in the filing that it has the right to buy the stake itself, which would give it a 99.8% stake in Vodafone Egypt. The Egyptian Competition Authority (ECA) said last week it is looking into whether TE exercising its right of first refusal would run afoul of the competition act. TE already owns a mobile network operator in the form of We.

Could TE be bidding for the stake? TE is reportedly in the market for financing to put forward an acquisition offer, Masrawy reports, citing telecom industry sources. The notion does seem a bit far-fetched given the company’s current debt burden and liquidity constraints. TE hired a consortium of EFG Hermes and Citibank to advise on its options after the Financial Regulatory Authority said that STC would be required to submit a mandatory tender offer for TE’s 44.8% stake.

M&A WATCH- Raya approves sale of 31% stake in its transport arm: Raya Holding board of directors has agreed to sell a 31.16% stake in its Ostool Shipping Company to Paradigm Logistics for EGP 133 mn, according to an EGX filing (pdf). Raya will be selling 12.4 mn shares (half of its 62.3% stake), each priced at EGP 10.7, while the latest evaluation of Ostool shares were at EGP 3.34. The document makes no mention of whether Raya will retain management rights, which sources said last week was one of their conditions to agreeing to the sale.

Egypt hedged against rising oil prices this year, Maait confirms: Egypt took out hedging contracts to guard against rising oil prices during the current fiscal year, Finance Minister Mohamed Maait confirmed in an interview with Bloomberg. The government hedged “several times” this year and “will hedge again during the year if needed,” the minister said on the sidelines of the Egypt Petroleum Show last week. The minister said at the start of the fiscal year that the government was considering going back to the market but nothing has been heard since. This is the second consecutive year Egypt has hedged against oil market volatility after reportedly buying call options (a derivative contract that protects against rising prices by fixing the rate for specified period of time) from Citibank and JPMorgan in FY2018-2019.

Further hedging won’t be needed on current evidence as the coronavirus takes its toll on the oil markets. The International Energy Agency last week projected demand growth to slow to rates not seen since 2011 as consumption in China suffers under the weight of the coronavirus outbreak. The price of Brent has already fallen from just under USD 69/bbl to a low of USD 53/bbl since the start of the year, well under the USD 68/bbl average price the government used for its FY2019-2020 budget. Goldman Sachs last week said it sees the price remaining at around USD 53 until the end of the year due to the loss of around 4 mn bbl/d of Chinese consumption.

Egypt considering grain hedging: Maait said that the government was considering taking action to protect itself against rising grain prices, an option that has been floated before due to Egypt’s heavy dependence on wheat imports. Wheat is currently trading at USD 212 per metric ton, slightly under the USD 214 price assumed in the state budget.

Egypt officially became a net exporter of LNG last year, bringing our gas hub ambitions ever closer: Egypt’s imports of liquefied natural gas (LNG) fell to zero in 2019 and exported USD 1.24 bn-worth of LNG, marking a nearly 150% y-o-y increase, according to Capmas figures released on Thursday. Oil Minister Tarek El Molla had been saying since 2018 that Egypt’s LNG imports would come to an end as of October of that year, and that Egypt would begin exports by January 2019 as more output from gas fields is connected to the national grid. Crude oil and butane gas imports also dropped last year, while exports of petroleum products rose 4.5% y-o-y to reach USD 4.9 mn.

The milestone comes as doubts continue to loom over the viability of our current LNG selling prices. Earlier this year, El Molla said Egypt would sell gas at USD 5/mmBtu under long-term contracts in response to falling gas prices. Analysts have said the asking price may be too high for European markets and that our exports would face heavy competition in Asia.

In other gas news: Israel is slowing production from its Leviathan gas field to 60% of its capacity due to a malfunction in the field’s subsea pipeline, according to Reuters. Leviathan is one of two gas fields supplying natural gas to Egypt under the landmark USD 19.5 bn agreement Alaa Arafa’s Dolphinus Holding signed in 2018 with Delek Drilling and Noble Energy.

Egypt inks its first WestMed oil, gas exploration agreements: The Oil Ministry signed yesterday MoUs with five international oil companies — Royal Dutch Shell, Chevron, BP, Total, and ExxonMobil — for deepwater oil and gas exploration and production off its western Mediterranean coast, Minister Tarek El Molla told Sky News Arabia TV, according to Reuters. The agreements cover seven concessions, and will see exploratory drilling beginning early next year, El Molla said. No further details were provided.

The news came two days after the 2020 Egypt Petroleum Show wrapped. Here are the key takeaways from the final day:

Enppi, Petrojet, Technip, and ANOPC signed an agreement to set up a USD 2.5 bn mazut hydrocracking complex in Assiut, according to a ministry statement (pdf). The facility is expected to produce 2.8 mn tonnes of petroleum products annually, which will help cut down on Egypt’s imports.

EGPC gives greenlight to Emirati fuel delivery startup Cafu: Dubai-based fuel delivery app Cafu signed an MoU with the Egyptian General Petroleum Corporation (EGPC) at the conference that will see the EGPC “provide regulatory support” to the company in its entry to the Egyptian market, Cafu said in a statement (pdf). The company had announced its plans to expand to Egypt last week. No details were provided on the expected timeline or investment value.

Other agreements (pdf) signed on the final day of the conference:

  • The Egyptian Natural Gas Company (GASCO), Enppi, and Petrojet signed an MoU to expand GASCO’s Western Desert gas complex and boost the facility’s capacity to 1.5 bcf/d from 600 mcf/d.
  • The Suez Methanol Derivatives Company signed an MoU with the Egyptian Maintenance Company to construct a methanol derivatives facility in Damietta.
  • The Egyptian Natural Gas Holding Company (EGAS), Egyptian Drilling Co., and Vantage International signed MoU to begin a deep sea drilling training program.
  • The Egyptian Gas Services Company signed agreements with Clarkson Shipping Agency and the Sahara Petroleum services Company (SAPEsco) for the provision of support services for natural gas tankers, navigation and port transactions.

El Molla also held talks with the heads of ExxonMobil and Aramco, a ministry statement said (pdf).

In other oil news, SDX Energy has begun drilling the Salah well in South Disouq and is expected to reach a targeted depth of approximately 9k feet in late March/April, according to a company statement. The Salah well should connect to the same Kafr el Sheikh and Abu Madi formations that SDX Energy’s existing four wells are already extracting from. SDX plans to drill a new well in the same region upon conclusion of Salah’s drilling. The company also announced that it has plans to drill three wells in South Disouq, West Gharib between February and June, earlier this month.

Exporters owed less than EGP 5 mn in overdue subsidies will receive their full arrears without delay, Trade Minister Nevine Gamea said at a media roundtable yesterday, according to Hapi Journal. The trade and finance ministries will also be paying out over the next few days an additional 10% to larger exporters that were promised by Prime Minister Moustafa Madbouly last month, Gamea added.

According to Gamea, authorities have so far paid out EGP 924 mn to some 1100 companies, compensating them for bns of overdue subsidies under an old framework. Agreements have also been signed with 67 large companies that will see EGP 6 bn paid out over the coming five years as long as they commit to new investments.

REGULATION WATCH- Bourse enables ETF market makers to place orders without a minimum amount: The EGX has scrapped regulatory requirements for minimum order quantities for investments in exchange-traded funds (ETFs) in a bid to clear the way for smaller players to invest in the asset class, according to an emailed statement (pdf). The minimum was previously set at EGP 14k.

The Central Bank of Egypt (CBE) has shuffled its audit, management, and capital markets and banking reform committees. Financial Regulatory Authority boss Mohamed Omran will chair the audit committee, CBE Governor Tarek Amer will chair the management committee, and CBE Deputy Governor Gamal Negm will chair the investment and capital markets and banking reform committee. The CBE had also formed its new Monetary Policy Committee earlier this year.

GERD talks in the final stretch? Egypt, Ethiopia, and Sudan agreed last week to mandate the US Treasury Department and the World Bank to prepare a final agreement for the Grand Ethiopian Renaissance Dam (GERD) in hopes of signing the final contract by the end of the month, according to a joint statement out on Thursday. The three countries’ foreign and irrigation ministers reviewed in Washington, DC last week the progress made by their technical teams on ironing out the sticking points over the dam’s filling and operational timelines. An initial agreement reached earlier this month addressed how Ethiopia will operate GERD during periods of drought and “prolonged dry years,” and outlined mechanisms for cooperation and dispute settlement. Egypt was the only country of the three to sign the agreement.

STARTUP WATCH- Egypt’s first nano-financing loan provider, Pharos-backed Kashat, has officially launched, Menabytes reports. The app, which is a joint venture set up by our friends at Pharos Holdings and Pakistani tech firm Planet N Group, offers loans between EGP 100 and 1,500 and is meant to provide instant access to credit to the country’s large unbanked population.

STARTUP WATCH- Amman-based Liwwa has raised USD 6 mn in equity investment, which it will use to fuel growth in Egypt and Jordan. The fintech startup was founded in 2013 by Samer Atiani in Jordan and offers loans of up to USD 100k to qualifying small businesses, according to Menabytes. Liwwa recently expanded to Egypt and is looking at Turkey and Ethiopia. The company raised the equity in December in a round led by Dutch Entrepreneurial Development Bank FMO. 500 Startups Chris Larsen, Edgo VC, EFG-EV, and Wamda Capital also participated in the round.

MOVES- Our friends at ALC Alieldean Weshahi & Partners announced both physical and people moves in a note to clients, writing that they have moved into new digs in Dokki and named two new partners. “Our new premises are custom designed to accommodate our growing team of partners and lawyers and provide our clients a comfortable and inspiring place to do business — and to allow us to showcase our collection of modern Egyptian art,” Senior and Managing Partner Bahaa Alieldean writes.

Marwa El Khodary has been named partner at ALC Alieldean Weshahi & Partners. She was previously general counsel at an international pharma company and served at the International Finance Corporation, the Egyptian Ministry of trade, and with a major law firm in Dubai. A longtime friend of Enterprise, Marwa is a Cairo University law graduate and an alumna of the London School of Economics.

Bahaa Sholkamy has also been named partner. He was previously partner at a Cairo–based law firm with focus on sports law and complex commercial transactions.

The new partners were named as the firm rebrands to ALC Alieldean Weshahi & Partners, “a new brand that suits our fast-growing team and our status as the specialist firm on which you call for counsel on large, complex, high-stakes transactions and issues in Egypt and in the financial centres that matter to us all,” Alieldean wrote.

EARNINGS WATCH- CI Capital reports 46% increase in profits: CI Capital net profits increased 46% in fiscal 2019 to EGP 621.1 mn from EGP 425.3 mn the year before, according to an EGX filing (pdf). The company’s revenues also increased during the last year to EGP 2.5 bn from EGP 1.7 bn in 2018, rising by 47%.

Eastern Company reported a 9.25% increase in net profit in 2H2019, rising to EGP 2.2 bn from EGP 2 bn in 2018, according to a regulatory filing (pdf). Revenues in the same period increased by 7.5% to reach EGP 7.69 bn against EGP 7.15 bn last year. Eastern company’s fiscal year begins in July each year.

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Egypt in the News

Topping coverage of Egypt this morning (other than covid-19’s arrival): A British businessman was briefly detained in Hurghada for allegedly assaulting a police officer at the airport. He was released shortly thereafter. (Daily Mail | the Guardian)

Also getting considerable ink is the continued detention of Bologna University Graduate student Patrick Zaky, who was arrested earlier this month at Cairo International Airport. Several outlets are picking up wire copies of the story from the Associated Press. Meanwhile, the parents of murdered Italian researcher Giulio Regeni are pressuring the Italian government to intervene in Zaky’s case, reports the Guardian.

Energy

12 companies competing for tender to build 200 MW solar plant in Egypt’s West Nile Delta

As many as 12 local and foreign companies are bidding in a tender launched by the Egyptian Electricity Transmission Company (EETC) to build a 200 MW solar plant in the West Nile Delta, the local press reports, quoting unnamed sources. The company’s include the UAE’s Masdar and Alcazar Energy, Saudi Arabia’s Al Fanar, Acwa Power, and Abdul Latif Jameel, Lekela Egypt, Alcazar, Orascom Construction, and France’s EDF Renewables. The tender was originally for a 600 MW project, but the EETC decided to split it into several parts.

Banking + Finance

Dice Garments has signed a USD 5 mn medium-term loan contract from Qatar National Bank

Dice Garments has signed a USD 5 mn medium-term loan agreement with Qatar National Bank, according to a disclosure to the EGX (pdf).

Egypt Politics + Economics

Cairo court sentences Botrous Ghaly’s brother to 30 years for artifact smuggling

The Cairo Criminal Court sentenced Mubarak-era Finance Minister Youssef Boutrous Ghali’s brother to 30 years in jail and handed him a EGP 6 mn over two cases of smuggling ancient Egyptian artifacts into Europe, Ahram Online reports.

Sports

Egypt extends hosting CAF headquarters for another 10 years

Egypt signed last week a 10-year agreement with the Confederation of African Football to continue hosting its headquarters, according to a cabinet statement.

Egypt’s Zamalek FC wins African Super Cup

Zamalek FC earned the African Super Cup after defeating Tunisian club Esperance 3-1 on Friday, marking the fourth time for Zamalek to carry the title, Reuters reports.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.63 | Sell 15.75
EGP / USD at CIB: Buy 15.63 | Sell 15.73
EGP / USD at NBE: Buy 15.65 | Sell 15.75

EGX30 (Thursday): 13,859 (+0.1%)

Turnover: EGP 488 mn (18% below the 90-day average)

EGX 30 year-to-date: -0.7%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session up 0.1%. CIB, the index’s heaviest constituent, ended up 0.4%. EGX30’s top performing constituents were Dice up 3.1%, Porto Group up 2.5%, and Madinet Nasr Housing up 2.1%. Thursday’s worst performing stocks were Orascom Construction down 1.5%, GB Auto down 1.5% and Ibnsina Pharma down 1.3%. The market turnover was EGP 488 mn, and xx investors were the sole net buyers/sellers.

Foreigners: Net Long | EGP +77.8 mn
Regional: Net Short | EGP -35.9 mn
Domestic: Net Short | EGP -41.9 mn

Retail: 59.2% of total trades | 62.7% of buyers | 55.7% of sellers
Institutions: 40.8% of total trades | 37.3% of buyers | 44.3% of sellers

WTI: USD 52.05 (+1.23%)
Brent: USD 57.32 (+1.74%)

Natural Gas (Nymex, futures prices) USD 1.84 MMBtu, (+0.60%, March 2020 contract)
Gold: USD 1,586.40 / troy ounce (+0.48%)

TASI: 7,874.41 (-0.52%) (YTD: -6.14%)
ADX: 5,037.46 (-0.56%) (YTD: -0.75%)
DFM: 2,733.72 (+0.14%) (YTD: -1.13%)

KSE Premier Market: 6,898.36 (-0.17%)
QE: 9,846.93 (-1.07%) (YTD: -5.55%)
MSM: 4,128.49 (+0.50%) (YTD: +3.70%)
BB: 1,662.57 (+0.05%) (YTD: +3.25%)

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Calendar

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

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

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

19-21 February (Wednesday-Friday): Egyptian Chamber of Leather Industry will participate in the Lineapelle Milano International Trade Fair, Milan, Italy.

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

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

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 (Sunday): Egyptian Mining Day, Prospectors & Developers Association of Canada Convention, Toronto, Canada.

1 March (Sunday): 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.

5-8 March (Wednesday-Saturday): 25 Egyptian companies will participate in a forum on investment in startups in Saudi’s King Abdullah Economic City.

6-8 March: Arab Banking Forum, for heads of risk management in Arab banks, organized by the Union of Arab Banks,with the Central Bank of Egypt and the Federation of Egyptian Banks.

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.

24 September- 2 October (Thursday-Friday): El Gouna Film Festival, El Gouna, Egypt.

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.

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.

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.