Monday, 24 February 2020

Will a strengthening EGP put pressure on corporate earnings?

TL;DR

What We’re Tracking Today

THE STORY OF THE DAY- The covid-19 virus appears to have become a global pandemic: Italian cities are on lockdown, Iran is struggling to curb infections and South Korea is shutting down schools and bracing for an economic slowdown:

  • Italy has put 10 cities on lockdown, sealing off the towns worst affected by covid-19 after the number of infections rose to more than 150, according to Reuters (link above). Currently the biggest outbreak of the virus in Europe, Italy has banned public gatherings including conferences and football matches and canceled the last two days of the Venice carnival.
  • Iran has the highest infection numbers in the wider region, Bloomberg reports, and its neighbors are closing off their borders.
  • South Korea’s business community is braced for the worst after an infected worker turned up at a Samsung plant. Six people have died in South Korea and more than 600 people have been infected, according to BBC.

The total number of cases worldwide is nearing 80k with almost 2.5k deaths, according to a live Bloomberg tracker. The story is front page news in the global business press, including the Financial Times and the Wall Street Journal.

Scientists are now concerned they don’t know how the virus is spreading: As the virus rapidly spread in Italy, Iran and South Korea, a World Health Organization spokesperson noted that “infections that are now emerging in people who haven’t traveled to China or come into contact with confirmed cases show it’s not clear how the virus is spreading.’”

Pundits think the global economy will “shudder as [the] coronavirus threatens the world economy,” the Wall Street Journal writes, quoting one business leader who described the impact of covid-19 on his business as a “once-in-a-generation event.”

The Dow could open down more than 400 points as the market gets its head around the extent of the contagion, CNBC reported near dispatch time this morning. Nasdaq and S&P500 futures also pointed to lower opens this morning. Oil prices are down 3%.

So where does Egypt stand? It’s a mixed bag, but mostly good (so far). There are no new cases in Egypt as of this morning, and the country’s one patient has tested negative for the virus for days now. Worth noting: A study in the British medical journal The Lancet found that while Egypt, Algeria, and South Africa “were at the highest risk [in Africa] of importing a COVID-19 case from China,” all three countries “have the most prepared health systems in the continent and are least vulnerable.”


EGP WATCH- The EGP rally against the greenback is still going strong, bringing it to EGP 15.49 yesterday. The currency has now risen 51 piasters so far in 2020. You can check out our breakdown of the rally and what it means for industry here.

Our friends at EFG Hermes are holding their annual One on One conference on 2-5 March at Atlantis, Dubai. The gathering is the world’s largest frontier- and emerging-market-focused investor conference.

Other dates for your diaries during the first week of March:

enterprise Located on the North West Corner of Somabay, lies Mesca Beach, stretched out onto 1.5km of silky sand. Mesca Beach is best known for its big tidal changes, shallow sandy waters and mounds of mangroves, in addition to the 7Bft Kite House, famously known as one of the best surfing spots on the planet. Combining luxury and adventure, the beach will be welcoming its very own Mesca Hotel, making its debut later this year.

It’s the final day of the G20 summit in Riyadh, where finance ministers and central bank governors focused on the global economic slowdown fueled by the covid-19 outbreak, but appeared to struggle to find common ground on a “coordinated response,” sources told Bloomberg. The communique from the summit only referenced the epidemic once. Delegates from 20 countries also talked about digital taxation, with the EU spearheading a drive to regulate Big Tech, while the US is still dragging its feet out of fear that taxing tech companies could hinder innovation, CNBC says. The final communique will be here once the summit wraps.

Meanwhile, central bank governors had the price growth challenge on their minds, with the US, Japan, and the EU discussing how aging populations are preventing inflation from meeting their 2% target despite stimulus measures, according to Reuters. The Fed is looking into allowing inflation to run above target to make up for the economic downturn.


Two Finland-based pension funds holding USD 108 bn are racing to hedge against global warming repercussions. The “Massive Risk” of climate change is driving the two funds to limit investments to companies that are seriously considering environmental, social, and governance aspects to reach the 2035 climate goals, Bloomberg reports. One fund, Varma Mutual Pension Insurance, has a plan to offload stocks with thermal coal exposure by 2025.


US Democrats are scrambling to keep up with Bernie Sanders in the primary election race after the senator won the Nevada Caucus by a landslide, earning some 48% of county convention delegates, Reuters reports. The results of the Nevada vote have placed Sanders as the frontrunner in the race to become the official party candidate in this fall’s presidential election. The possibility of having Sanders face off against Donald Trump is concerning to more centrist Democrats, who think the senator’s far-left policies would be a death sentence for the party’s “chances of winning back the White House and Senate and holding on to the US House of Representatives,” the Financial Times says.


Two must-reads about work to liven up your commute this morning to … work:

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*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: We look at the costs and benefits of the growth of Egypt’s high-end preschool industry.

Enterprise+: Last Night’s Talk Shows

It was a fairly uneventful night on the airwaves, save for a chat with EGX boss Mohamed Farid and updates on the Grand Ethiopian Renaissance Dam (GERD).

Unnamed energy company to IPO before Ramadan; financial services, chemicals companies after September -Farid: An unnamed energy company is expected to sell shares in an initial public offering before Ramadan, which will be observed toward the end of April this year, Farid tells Al Kahera Al Aan’s Lamees El Hadidi. Two other companies, one in the financial and payments sector and another in the chemicals sector, could go to market after September, Farid added.

The stock exchange is open for all as a channel for both saving and investing, Farid also said. There is a mistaken belief that only large investors have access to the market, but numbers don’t matter, the EGX chairman added. The bourse has been pushing to attract younger investors through online and television adverts (watch, runtime: 1:00). According to Farid, the majority of EGX investors are over 40 years old. You can watch Farid’s interview with El Hadidy here (runtime: 22:05).

Cairo, Addis Ababa, Khartoum reportedly receive GERD agreement draft: A draft agreement on the rules of filling and operating the Grand Ethiopian Renaissance Dam (GERD) expected to be signed before the end of the month has reportedly been sent to the Egyptian, Ethiopian, and Sudanese capitals, but authorities denied the news, Al Hadath TV’s Washington correspondent, Pierre Ghanem, told El Hadidi (watch, runtime: 6:17). The US Treasury Department and the World Bank, which recently stepped in to mediate the GERD dispute, were preparing the draft. Delegations from the three countries should be meeting on Friday to review the draft ahead of signing an agreement.

Gov’t focuses on raising awareness about the environment: Lobna Assal phoned the environment minister for a comment about a meeting yesterday with President Abdel Fattah El Sisi and efforts by the El Sisi administration to protect the environment and conserve natural resources (watch, runtime: 4:51). A recently launched presidential initiative, “prepare for green,” aims to raise environmental awareness in the country.

Speed Round

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Strengthening EGP to put pressure on corporate earnings -Pharos: Corporate earnings will come under pressure over the next four quarters as the EGP continues to strengthen against the USD, Pharos Holding’s head of research Radwa El Swaify wrote in a report. The research house forecasts the currency changing hands in the EGP 14.50 to 15.50 band against the greenback this year and predicts “a gradual weakness in earnings over the next four quarters” through both a direct impact and “indirect effects.” On that last bit, El Swaify suggests that when the “exchange rate was depreciating, consumers were rushing into buying to avoid higher cost in the near future. Now, that exchange rate is weakening, the purchase decision is postponed until prices find a bottom.”

In short: The appreciating currency is going to sap export sales and prompt consumers to hold back from major purchases as they wait to see whether prices have hit bottom.

Earnings may also be buffeted by macro headwinds: Cheaper commodity prices, slowing global trade or lower infrastructure spending in Egypt may place further pressure on corporate earnings. “We expect the market to continue to be trapped by these dynamics until the strength in the FX rate comes to a stop or global commodity prices find a floor,” the report says.

Corporate earnings had recovered to pre-float levels at the end of last year, with inflation decelerating rapidly, FX reserves reaching an all-time high, and economic growth clocking in at more than 5.6% in 2019, Bloomberg said in November.

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M&A WATCH- Sawiris eyes majority stake in state-owned Shalateen: Naguib Sawiris is in talks with the government to buy a 51% stake in state-owned Shalateen Mining, Reuters reports. No further details were provided, including the timeline of the negotiations and the expected value of the transaction.

Sawiris, who is the chairman of La Mancha Mining, has long been interested in getting in on Egypt’s mining industry. He last week flagged his interest in the government’s upcoming international gold exploration and production tender, telling Bloomberg that he is “willing to participate in any area that could be promising.” La Mancha is the biggest shareholder in Canada’s Endeavour Mining, which recently tried to acquire Centamin, currently the only gold producer in Egypt. Sawiris lauded the recently-announced executive regulations to the amended Mineral Resources Act as being positive for investors. The new regs will see gold mine operators pay the minimum 5% royalty, EGP 25k in rent each year per sq km, and income tax of 22.5%.

The government will start accepting bids for the tender during the first half of March, an official at the Egyptian Mineral Resources Authority told Reuters. Local press reports recently indicated that the government would issue the tender either at the end of February or by the beginning of March. The tender will be the first of its kind since the Mineral Resources Act was amended last year and the first for gold exploration since 2017. It will feature blocks in the Eastern Desert that will be offered in phases, each to be closed within four months of offering.

Meanwhile, Aton Resources’ mining license is still under review. Authorities are reviewing an economic feasibility study before the license receives final approval from cabinet and then the House of Representatives, Al Mal reports, quoting unnamed sources. Once approved, Aton will be exploiting the Eastern Desert’s Hamama region to extract gold under a 20-year license with an additional 10-year option period and would 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.

Beltone, Emirates NBD tapped to manage HHD secondary offering: Beltone Financial and Emirates NBD have reportedly been selected to manage the sale of a 25% stake in Heliopolis Housing & Development (HHD), Al Mal reports, citing unnamed sources close to the banks. The secondary offering will include allocating a 10% stake and management rights to a strategic private investor, while the remaining 15% stake will be sold on the EGX as part of the state privatization program.

Meanwhile, the deadline for companies to submit their bids for the 10% stake + management rights contract was yesterday. SODIC, BPE Partners, Palm Hills, and Saudi’s Dar Al Arkan are expected to have submitted bids. The company had requested that all companies submit their bids all on the same day to avoid leaks that could sway the company’s decision. HHD had said it would open all the submitted envelopes on the same day. Other companies that had shown interest include EFG Hermes, Emaar Misr, and Orascom Development Egypt (ODE), and Orascom Development.

Background: HHD had extended to February the deadline for investors to submit their bids, and had previously said it will take its secondary offering to market before May 2020. It also revealed some minor additional information regarding the naming of the chairman and managing director, as well as how many feddans it plans to sell in New Heliopolis.

BUDGET WATCH- FinMin adopts more ambitious debt-to-GDP targets in coming fiscal year: The Finance Ministry will aim to lower Egypt’s debt-to-GDP ratio to 79% during FY2020-2021, Minister Mohamed Maait said on the sidelines of a conference yesterday, Hapi Journal reports. The new figure is more ambitious than targets announced in the ministry’s preliminary budget statement in November, which forecast debt-to-GDP falling to 80%. The statement revealed that the ministry expects GDP to grow at a 6.4% clip in the coming fiscal year, up from a projected 6% in FY2019-2020. The jury is still out over whether the government will meet this year’s target: Preliminary figures announced last week showed that the economy grew at a slower 5.6% clip during the first six months of the fiscal year.

EXCLUSIVE- The ministry is also planning to reduce its ceiling for Egypt’s external debt-to-GDP ratio to 30% in the medium term, down from 37% in FY2018-2019, according to official documents reviewed by Enterprise. The ceiling will be reviewed and adjusted on an annual basis according to economic developments. The government began implementing last March a comprehensive debt strategy, which includes moving towards longer-term debt and imposing a cap on eurobond issuances.

Fertilizers could be subject to automatic pricing mechanism now, too: Separately, the ministry is working with the IMF to draft a strategy to boost government revenues. The proposals currently under study include pegging the cost of fertilizers to global prices — which the government began doing with oil prices last year — while creating a transitional safety net for small-scale farmers that own less than five feddans. The government would provide these farmers with financial support for three years, and would gradually reduce the amount handed out each year. The financing package is expected to cost EGP 5 bn, according to the documents.

Banque Misr eyes USD 250 mn loan for SME finance: Banque Misr is in talks with two unnamed international institutions for a USD 250 mn loan to increase its SME financing in Egypt, Chairman Mohamed El Etreby tells Bloomberg. The bank recently signed an agreement with the European Investment Bank to double its SMEs financing credit line to EUR 1 bn. Banque Misr is also expecting a boost in liquidity from the sale of a 45% stake of Banque du Caire in 1H2020 as part of the state privatization program.

Africa expansion plans coming along: Egypt’s second-largest state-owned bank is also moving ahead with its plans to expand its presence in Africa, which will see it opening either branches or representation offices in Somalia, Kenya, and Djibouti. El Etreby had said in November that Banque Misr received approval from the Central Bank of Egypt to set up rep offices in Somalia, Kenya, and Tanzania.

Alexbank lands USD 100 mn EBRD loan for SME finance: Alexbank has signed a cooperation agreement worth USD 100 mn with the European Bank for Reconstruction and Development (EBRD) to finance SMEs, the local press reports. Under the agreement, the EBRD will provide USD 50 mn in funding for SMEs, including an assistance package that will provide businesses with training and workshops. The remaining half of the loan will be disbursed under the EBRD’s Trade Facilitation Program which aims to boost foreign trade between EBRD countries by underwriting international trade transactions made by banks.

CBE eases debt repayment terms for financially distressed companies: The Central Bank of Egypt (CBE) will renegotiate debt repayment terms with individual companies seeking help through its initiative to support financially distressed firms, according to an official release (pdf). The CBE is scrapping a condition under the initiative requiring companies to pay 20% of their debts before June and 50% before the end of 2020, and will agree new repayment periods with each company according to its financial situation. "Discussions [with banks and companies] revealed that customers need to adjust payment periods and rates in order to properly save them from defaulting," the CBE said.

Financial leasing and factoring companies send a list of defaulters for CBE aid: Fifty-four leasing and factoring companies have sent data of their troubled clients to the Financial Regulatory Authority (FRA) and the CBE to seek debt relief help, Egyptian Factoring Association Chairman Gamal Muharram told Al Mal. An FRA committee is looking to pen criteria for choosing the customers who have defaulted for reasons beyond their control, excluding mismanagement, to help them recover by seeking help from the banking sector by including them in CBE's initiative to reschedule debt.

Background: The CBE had launched an initiative in December to exempt nearly 5.2k factories from accrued interest payments halt legal action against struggling factories to help boost medium sized domestic manufacturing. Since then, the CBE has waived EGP 48.5 bn-worth of debt and interest payments and tens of companies have submitted applications to receive this aid. The FRA had set up last month a committee to assess how non-banking financial services companies can be brought into the initiative.

CBE studying plan to hedge against bank investments in SMEs: The Central Bank of Egypt (CBE) and its newly established Credit Guarantee Company are planning a program to help banks hedge against risks incurred by holding stakes in private equity companies and funds that invest in SMEs, CBE Sub Governor Nermine El Tahry said, according to Al Mal. The program comes after the CBE issued regulations last year allowing banks to fulfil their mandatory quota of loans to SMEs by purchasing stakes in SME-oriented investment funds. Banks are required under a CBE initiative first launched in 2015 to dedicate a portion of their loan portfolios to lend SMEs at a subsidized 5% interest rate.

Correction: 24/02/2020

A previous version of this article incorrectly cited the CBE’s Export Credit Guarantee Company.

IPO WATCH- Emerald’s IPO retail component 17.7x oversubscribed: Retail investors have put in orders for 61.9 mn shares for Emerald Real Estate’s public offering on the final day of subscription yesterday, leaving the retail component 17.7x oversubscribed, reports Al Mal. The company had allocated 3.5 mn shares for the retail offering. The institutional component was, meanwhile, 1.3x oversubscribed, with orders placed for 89.1 mn shares from a total of 66.5 mn on sale. The Financial Regulatory Authority has published the prospectus (pdf) for the potential 28% sale.

LEGISLATION WATCH- House approves Data Protection Act, pending final signoff: The House of Representatives approved in a plenary session yesterday all articles of the Data Protection Act, and is due to cast a final vote at a later session, Al Shorouk reports. The law, which lays out the ground rules for how businesses use personal information collected online, was slated to pass the House last month, after having been delayed several times from an original 2018 date. The final draft of the legislation excludes banks from its stipulations, says the newspaper. We have previously noted that a House committee voted to exempt the Central Bank of Egypt and the Financial Regulatory Authority.

No word on controversial prison sentences: House reps were working to resolve a controversial article that would impose a six-month prison term on non-compliance, which the reps say could discourage investors. There was no mention of whether this was changed or revoked.

Other elements of the law: The bill enshrines users’ right to access their private data at any time as well as gives them the right to take legal action against parties responsible for data breaches and misuses of private information. The legislation also stipulates that a unit to protect personal data be established under the Information Technology Industry Development Agency whose members shall be selected by the Justice Minister and given powers of arrest. Check out our comprehensive breakdown of the legislation and how it may affect you and your business.

LEGISLATION WATCH- Real Estate Registry Act receives nod from House committee: The House Legislative Committee has greenlit amendments to the Real Estate Registry Act that would speed up procedures for citizens to register properties by setting a time limit and simplifying the registration process, reports Masrway. The House has been consistently nagging the government to introduce the bill, which only very recently received cabinet approval. House Speaker Ali Abdel Aal previously called on the government to fast track the bill amid criticism that the existing law defers from registering their properties due to the difficult procedures and the high costs. The changes should now be up for a final vote in a general assembly session before being signed into law by the president.

LEGISLATION WATCH- Draft Labor Act ready to enter House -Saafan: The draft Labor Act is ready to be introduced to the House of Representatives, Manpower Minister Mohamed Saafan said during a TV interview on Saturday (watch, runtime: 2:08) without providing a timeline. House Deputy Speaker Soliman Wahdan said last week that he expected parliament to finalize the legislation within the next three months. A draft of the legislation was last under parliamentary review in 2019 when it had received approval from the House Manpower Committee. The legislation includes provisions intended to encourage youth employment and create specialized courts to handle labor-related cases.

REGULATION WATCH- Industrial Development Authority branch directors will be allowed to grant conditional licenses to industrial investors following new amendments by the Trade Ministry to the executive regulations governing the Industrial Permits Act, according to a ministry statement (pdf). IDA chief Magdy Ghazi said that the authority’s branch directors, or whomever they delegate, will now be empowered to grant facilities temporary licenses until they complete their paperwork, provided the decision is published in the Official Gazette. Trade Minister Nevin Gamea said the decision was made to simplify the process of setting up facilities and make the sector more attractive for investors.

SCZone can now directly regulate its companies’ imports: Prime Minister Moustafa Madbouly has issued a decree putting the head of the Suez Canal Economic Zone (SCZone) In charge of setting regulations on goods imported by companies operating in the zone, government sources told the local press. The move is meant to streamline the movement of goods within the zone.

Security forces arrested yesterday two individuals accused of operating two unlicensed satellite channels, the Interior Ministry said. According to the ministry, the individuals were found in possession of banned books on the Ikhwan. They are being charged with violating the Investment Act, disseminating content and using broadcasting programming without the necessary licenses, and setting up satellite channels outside the Egyptian Media Production City without approval.

EARNINGS WATCH- Oriental Weavers profits increase 54% in 2019: Oriental Weavers posted net profits after tax and minority interests of EGP 775 mn in 2019, a 54% increase from the previous year, according to an EGX filing (pdf). Revenues fell 2.6% to EGP 10.1 bn during the period, down from EGP 10.4 bn from 2018.

CORRECTION- We incorrectly stated yesterday that the yield on 6-month t-bills fell 300 bps in an auction last Thursday. The yield actually fell 30 bps to 13.811%. The article has since been corrected on our website. H/t Mohamed W, Mostafa El B.

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Egypt in the News

Jews visiting Alexandria’s synagogue decades later aren’t sure whether to be hopeful or despondent: Last week’s homecoming for 180 Jews that were dispelled from Egypt back in 1956 was a bittersweet event combining a sense of loss with a twinge of hope, Declan Walsh and Ronen Bergman write for the New York Times. The group were taken to the recently renovated synagogue where they were overwhelmed by the restoration of the place of worship they frequented as children. Still, the story asks: Will the restored synagogues be opened to the public as Egypt embraces its Jewish heritage? Or will the renovations remain out of the public eye?

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There is a growing number of preschools acting as gateways for the country’s top international schools. But do they come at too high a cost? Ensuring that children are adequately prepared for a successful education while protecting their mental and emotional wellbeing is every parent’s top priority when searching for the right preschool. An increasing number of nurseries are shaping their programs to provide children with the best possible chances of accessing reputable international schools, including developing the necessary skills and temperament to conducting mock interviews to help then pass their preferred school’s assessment tests. They are invariably expensive and can be exacting for an infant, but many parents believe this is a price worth paying.

The top-end nursery sector may be small in size, but it’s lucrative and is growing. The German-teaching nurseries are not cheap. Treasure Island charges EGP 60k per year, Deutscher Kindergarten (DK) EGP 30k per year, and Der Deutsche Kindergarten (DDK) EGP 15k per year. Other nurseries that teach primarily in English — also with strong reputations for securing children places in the top schools — include Maadi’s Small Talk (EGP 70k per year), New Cairo’s Miracle Medley (EGP 50k per year), and Under 5 (EGP 35k per year year). Demand for all of these nurseries is already high yet continues to grow. Under 5 expanded from a single branch in 2003 to seven in 2015, serving 750 children and is on track for 1k children next year, according to founder Mona Marzouk. The founders of Small Talk and the German-teaching nurseries told Enterprise that they do not intend to open more branches so that they can supervise the nursery and maintain quality control themselves. As a result, they have waiting lists that are several times the size of their student body (60-80 children), and these continue to grow each year. All the nurseries mentioned above increase their fees annually by 10-15%.

The top international schools maintain that they do not favor any particular preschools: Officials from the German school Europa Schule Kairo (ESK) told Enterprise that they don’t inquire about or track which preschools students have attended, but only insist that they speak German and advise parents to enroll their children into a preschool that teaches the language if it is not spoken at home. Cairo American College said that it accepts applications from a wide variety of preschools but also doesn’t track or monitor which preschools their applicants may have attended. Choueifat International School said their only requirements for acceptance into their kindergarten class are that children be able to speak comprehensibly, follow simple instructions, and be toilet trained. The British International School in Cairo offered recommendations for which nurseries they believed were best, namely Playpedia, Rays and Fun Yard nurseries, but don’t require incoming students to have attended them.

Yet collaboration between the top schools and nurseries is already well underway: Under 5’s Nasr City branch since 2012 has made arrangements with the British Columbia Canadian International School, Dover American International School, and Choueifat, among others, in which representatives visit the nursery to “recruit” children ahead of the academic year, according to Marzouk, who told us that the initiative was instigated by the schools themselves. There are also financial incentives: Children are given up to 20% discounts on the school’s application fees (around EGP 10k), or have their registration fees (EGP 2k on average) scrapped. The schools, in turn, refer the children that didn’t make the cut back to the nursery for a three-month grace period, after which they can reapply to the school.

This referral system is also strong with German schools: The trend of schools and preschools bouncing referrals off each other is most apparent with the German preschools and schools. Enterprise spoke with a parent who asked to go by Israa, who was advised by nurseries she visited and other parents she consulted to enrol her child into an appropriate gateway nursery for the German school she was targeting. “I told them I wanted my son to attend Deutsche Evangelische Oberschule Kairo (DEO) or ESK because they’re cheaper than the American and British ones, and produce better students, disciplined, serious-minded and purposeful,” she said. “They told me then he has to go to Treasure Island nursery, DK or DDK.” Enterprise spoke with three other parents who had almost identical experiences, stating that they believed that their applications to these schools were viewed more favorably when they informed them that their children had attended Treasure Island. It’s worth noting however, that unlike their US and British counterparts, the German schools charge more for their preschool classes than they do for primary and secondary education.

Do the top-end nurseries deliver value? Foremost, they instruct only in the foreign language the nursery teaches. They adopt at least some aspects of internationally-accredited curricula. Most adhere to the Early Years Foundation Stage — loosely defined as teaching communication, literacy, and numeracy through games and play — but also develop their own by combining aspects of better-known learning practices. Under 5, for example, combines the Multiple Intelligences theory, Montessori, which emphasizes choice-driven play and movement during learning, and Jolly Phonics, which focuses on learning through phonetics. They also maintain teacher-to-child ratios of 4:1 or 6:1, as per the guidelines of the NAEYS. They typically offer spacious facilities, which can include play rooms and a garden, an in-house nutritionist and chef, CCTV, and top-brand play sets, toys, and disinfectant products.

Does admission to a particular preschool ensure enrollment in the target school? While there are no absolute certainties, many of the nurseries mentioned above boast remarkably high success rates, often over 90%. Small Talk saw their entire class of 2019 infant “graduates” enrol in top international schools, while Under 5’s Nasr City branch saw 28 of its 30 children achieve the same success that year; see breakdowns here (pdf), and here (pdf). A number of preschools say a portion of their success is “built-in” as they serve children from influential families or the expat community that are all but ensured a place in the school of their choice.

The pressure to place children in top schools by way of these nurseries is high, and can come at a human cost: Some parents Enterprise spoke with demonstrated not only a keenness but an urgency to enroll their children into these nurseries. One parent missed a spot in a top German-teaching nursery for her first son so applied for her second as soon as she found out she was pregnant. Another parent told a similar story. She enrolled her second child into a top nursery when he was just three weeks old, even though he would not attend the nursery for another two years. The first is currently fretting about the German schools’ assessment tests that are coming up in the next two months. In addition to competency tests, children are required to be independent and exhibit good manners. They should be able to take off and hang up their coats, for example, put their toys away in the right boxes, and eat mess-free without having to rely on a teacher. To this end, she pushed her second child to be potty trained around six months beyond what her pediatrician thought was reasonable.

A balancing act: Quantifying how much is too much to pay for a child’s physical, mental and emotional development, and their academic success, will always come down to the choice of the parent. From those who compel their children to take any step or perform any task necessary to secure a placement in a top school, to those who prefer their child to find their own way at their own pace, there is no shortage of nurseries ready to cater to any approach to child development.

Your top education stories over the past week:

  • Cairo for Real Estate Investments (CIRA) subsidiary Edu Systems International (ESI) has signed an agreement to manage the newly developed Sharm Prime School starting September 2020, where Russian will be the school’s official second language.
  • The Education Ministry is looking for domestic and international partners to construct 100 technical schools across the country by 2030.
  • The European University in Egypt has secured a EGP 70-80 mn bridging loan from SAIB Bank to help it pay for urgent contracting and construction expenses.
  • The number of public schools in Egypt rose 4k while the number of pre-university students rose 3.6 mn between the academic years 2015-2016 and 2019-2020, according to Education Ministry figures.
  • eSpace launched its new edWaves online educational and training platform during the Edu Gate exhibition and conference last week (pdf).

The Market Yesterday

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EGP / USD CBE market average: Buy 15.49 | Sell 15.59
EGP / USD at CIB: Buy 15.49 | Sell 15.59
EGP / USD at NBE: Buy 15.51 | Sell 15.61

EGX30 (Sunday): 13,688 (-0.2%)
Turnover: EGP 361 mn (38% below the 90-day average)
EGX 30 year-to-date: -2.0%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.2%. CIB, the index’s heaviest constituent, ended down 0.1%. EGX30’s top performing constituents were SODIC up 2.9%, TMG Holding up 1.7%, and EFG Hermes up 1.2%. Yesterday’s worst performing stocks were Telecom Egypt down 2.1%, Credit Agricole down 2.0% and Juhayna down 1.6%. The market turnover was EGP 361 mn, and regional investors were the sole net sellers.

Foreigners: Net Long | EGP +5.9 mn
Regional: Net Short | EGP -31.3 mn
Domestic: Net Long | EGP +25.5 mn

Retail: 68.4% of total trades | 69.9% of buyers | 66.9% of sellers
Institutions: 31.6% of total trades | 30.1% of buyers | 33.1% of sellers

WTI: USD 51.92 (-2.74%)
Brent: USD 56.82 (-2.87%)

Natural Gas (Nymex, futures prices) USD 1.86 MMBtu, (-2.26%, March 2020 contract)
Gold: USD 1,664.40 / troy ounce (+0.95%)

TASI: 7,982.95 (-0.31%) (YTD: -4.84%)
ADX: 5,041.86 (+0.17%) (YTD: -0.67%)
DFM: 2,717.80 (-0.72%) (YTD: -1.70%)
KSE Premier Market: 6,848.55 (-0.33%)
QE: 9,898.40 (-0.36%) (YTD: -5.06%)
MSM: 4,197.32 (+0.14%) (YTD: +5.43%)
BB: 1,668.66 (0.00%) (YTD: +3.63%)

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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.

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

23-29 February (Sunday-Saturday): 20 Egyptian companies will participate in the “Egyptian Trade Week” in Kampala, Uganda.

28-29 February (Friday-Saturday): Egypt Career Summit, The Greek Campus, Cairo, Egypt.

March: An international conference to market investment prospects in the Suez Canal Economic Zone.

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 (Friday-Sunday): 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 Investment Conference for the Suez Canal Economic Zone, 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.

24 March (Tuesday): The Annual Export Summit, Cairo, Egypt

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.

9 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 May (Saturday): An administrative court will look into an appeal by steel rolling mills to overturn a government’s decision to place import tariffs on steel rebar and iron billets. The hearing was postponed from 22 February 2020.

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

4-6 June (Thursday-Saturday): 2020 Africa-France Summit, Bordeaux, France.

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.