Tuesday, 7 July 2020

Business was better in June + new covid cases at six-week low

TL;DR

What We’re Tracking Today

BIG BUSINESS NEWS OF THE DAY: Business conditions improved substantially in June, but private-sector activity was still in contraction mode, according to the IHS Markit purchasing managers’ index out yesterday. We have chapter and verse in this morning’s Speed Round, below.

A CLOSE SECOND: Traders are penciling in a more stable year ahead for the EGP, ZAR, and KES than the currencies of Ghana, Zambia, and Nigeria, Bloomberg says. All six major African currencies are not expected to sustain major depreciations over the coming 12 months as “the wall of global monetary and fiscal stimulus provides a backstop for riskier assets,” the business information service says.

The EGP has been rallying against the greenback since 23 June, strengthening to 16.02 yesterday after dipping to 16.12, according to CBE data (pdf).

BIG PERSONAL NEWS OF THE DAY for many of our readers and their families: The United States says foreign students need to transfer schools or leave the country if their college or university is moving to remote learning this fall. New international students whose schools move to fully online instruction won’t get visas, and “active students currently in the United States enrolled in such programs must depart the country or take other measures, such as transferring to a school with in-person instruction,” US Immigration and Customs Enforcement said in a statement (pdf) late yesterday. The story is getting wide coverage in the global press (The Verge | Reuters | Financial Times | CNN).

Among the schools that are moving to (just about) fully online: Harvard. Students attending Fair Harvard will nevertheless have to pay full tuition for the privilege of attending classes timezones and timezones away.

SIGN OF THE TIMES- Enjoy that “remote” Wall Street internship. “Zoom etiquette classes, digital job shadowing and online scavenger hunts await the thousands of students who begin Wall Street’s first year of virtual internships on Monday,’ the Financial Times notes.


Military Production Minister Mohamed Said El Assar passed away yesterday, aged 74, after battling cancer, Al Masry Al Youm reported yesterday. President Abdel Fattah El Sisi mourned the loss, writing on Twitter that El Assar was “one of the most sincere men to face challenges for our great homeland. At the forefront of men defending it at a unique and special moment in its history.” The Madbouly cabinet also offered condolences on Monday. Assar served as a member of the Supreme Council of the Armed Forces, which governed Egypt after the overthrow of President Hosni Mubarak in 2011.

El Assar’s passing is getting attention in the foreign press: Reuters | Al Arabiyah | RT | Sputnik.


It’s not just you — time does feel warped this year. This interactive story from Reuters explains why you’ve simultaneously felt like each day drags on for ages, but the past four months have whizzed by in the blink of an eye. In a nutshell: Our sense of time can easily be distorted by illusions, particularly since the human mind doesn’t have a hard-wired system to accurately keep track of time.

News triggers coming up over the next few days include foreign reserves figures for June, which should be out sometime this week, and inflation data for last month, which is due on Thursday.

COVID-19 IN EGYPT-

The Health Ministry confirmed 79 new deaths from covid-19 yesterday, bringing the country’s total death toll to 3,422. Egypt has now disclosed a total of 76,222 confirmed cases of covid-19, after the ministry reported 969 new infections yesterday. We now have a total of 21,238 cases who have fully recovered.

That’s the lowest single-day toll of new cases since 27 May when the Health Ministry reported 910 new infections. Reuters and Xinhua both picked up the news.

Air Arabia flights will be running between Egypt and Abu Dhabi starting 14 July. The budget UAE airline will operate flights between Alexandria’s Borg El Arab airport and Abu Dhabi International Airport (AUH) three times a week starting 14 July, as well as weekly flights between Sohag and AUH, according to an Air Arabia statement.

Air France has also resumed flights to Egypt, operating two weekly flights between Cairo and Paris, according to a statement picked by Youm7.

Some 3k tourists have visited Red Sea governorates since the international flight ban was lifted on 1 July, with 12 flights from Ukraine and Belarus landing in Sharm El Sheikh and seven others from the Eastern European countries and Switzerland touching down in Hurghada, Al Masdar reports.

Travellers journeying between Egypt and Greece will not be required to self quarantine, Tourism Minister Khaled El Enany said after a meeting with his Greek counterpart to discuss how the two countries are lifting lockdown measures, a ministry statement said.

Cairo’s iconic Al-Hussein Mosque near Khan El Khalili will reopen tomorrow, Al Ahram Gate reports. The mosque was closed on Thursday after worshipers failed to abide health and safety guidelines during prayers.

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ON THE GLOBAL FRONT-

India has become the third-worst hit country by the coronavirus, surpassing Russia after adding a record 23k cases yesterday, according to Johns Hopkins data. The country now has a total of 697k confirmed cases ahead of Russia with almost 687k but behind Brazil with 1.6 mn and the US with almost 3 mn.

WHO could be forced to rethink corona guidance after scientists insist the virus is airborne: The World Health Organization (WHO) is reviewing data presented by hundreds of scientists on Saturday that the coronavirus can be transmitted in the air, Reuters reports. The global health agency has maintained that the coronavirus is spread between people via droplets from the nose and mouth, but in an open letter 239 scientists claimed that smaller airborne particles can be breathed in. They’re calling on the WHO to review its recommendations.

Kuwait’s finances are in such desperate straits that it might have to start tapping its sovereign wealth fund for cash. With a budget deficit expected to reach 40% of GDP this year, a legislature that refuses to allow more public borrowing, and a rapidly depleting General Reserve Fund, Kuwait may soon be forced to turn to its Future Generations Fund as a source of cash, Bloomberg reports. The FGF is the world’s oldest and reportedly fourth-largest sovereign wealth fund.

Meanwhile, Saudi Arabia’s central bank governor says it’s “too early to tell” whether the kingdom will see a V-shaped economic recovery as it moves beyond lockdown. The purchasing manager’s index for KSA fell at a faster pace in June than in May, in contrast to Egypt (where the pace of contraction slowed) and the UAE (which rebounded, albeit with job losses).

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GLOBAL MACRO-

Mixed messages put VIX traders “in a bind”: The VIX index is continuing to flash red despite US stocks surging 40% since their nadir in March, putting VIX traders in the awkward position of having to second-guess two conflicting trends, according to Bloomberg. VIX futures, a measure of volatility in US equities, has remained above normal levels, pointing to continued investor fears of a resurgence of the coronavirus, uncertainty about the economic recovery and the November presidential election. Meanwhile, stocks have just come off their best quarter in 22 years, fuelled by record amounts of stimulus and hopes for a short, V-shaped recovery.

SOUND SMART- Called the “fear index” in some quarters, the VIX “represents the market’s expectation of 30-day forward-looking volatility.”

Capital might be flooding back to the developing world, but the risks of an EM debt crisis remain: Investors are becoming overly complacent about the risks of an emerging market debt crisis as global trade remains anaemic, commodity prices struggle to rebound, and the fate of tourism and travel remains in limbo, Megan Greene writes in the Financial Times. There remain significant questions about the ability of many EMs to service their debts given the huge uncertainties and the massive amounts of liquidity injected earlier this year by central banks around the world may not be enough for what lies ahead. “EMs remain in the eye of the storm, and both investors and the IMF need to be ready for the inevitable next wave of volatility,” she writes.


EGYPT BEYOND COVID-

From the Department of Why Does This Even Need To Be Said: Dar Al Ifta and Al Azhar have each issued statements telling Egyptians that women should not be blamed for [redacted] harassment after more than 100 women and girls accused one 22-year-old man of harassment and assault. The National’s Hamza Hendawi took note.

AND THE REST OF THE WORLD-

UK regulators have ordered the ‘Big Four’ accounting firms — Deloitte, PwC, EY and KPMG — to split their auditing operations by 2024, the Financial Times reports. In a move that stops short of a full overhaul of the sector, the Financial Reporting Council has ordered the firms to submit plans in October about how they will spin off their audit arms. The move comes in response to the collapse of construction giant Carillion in 2018, which prompted a series of reviews into the country’s auditing sector that recommended new regulations to increase competition and monitor behavior.

Uber will acquire Postmates in a USD 2.65 bn all-stock transaction after four years of on-and-off discussions, according to Bloomberg. Now with Uber Eats and Postmates under its belt, the acquisition should help Uber gain ground against food delivery platform DoorDash in the US market. Uber had previously been trying to acquire GrubHub but lost out to Europe’s Just Eat Takeaway.

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Ennio Morricone, Oscar-winning Italian composer and Spaghetti Western extraordinaire, has died, aged 91 in Rome, Italian news agency Ansa reported yesterday. A prolific composer, Morricone created some of the most iconic soundtracks in movie history, including The Good, The Bad and The Ugly, Once Upon a Time in America, and The Untouchables. Morricone won an Oscar in 2016 for his work on Quentin Tarantino’s The Hateful Eight.

Enterprise+: Last Night’s Talk Shows

The death of Military Production Minister Mohamed El Assar led the talk shows last night, with all of the talking heads devoting a segment to covering the news. El Hekaya’s Amr Adib (watch, runtime: 3:48), Al Kahera Alaan’s Lamees El Hadidi (watch, runtime: 2:14), Masaa DMC’s Eman El Hosary (watch, runtime: 1:34) and Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 1:42).

Health expert urges caution as covid-19 infections fall: El Hekaya’s Amr Adib spoke with Health Ministry adviser Sherif Wadih, who warned against the relaxation of precautionary measures against covid-19 in light of yesterday’s noticeable decline in the number of daily infections. Wadih said the decline doesn’t mean the virus has vanished, adding that people should continue to abide by the safety measures until the number of cases falls further (watch, runtime: 5:04).

A GERD agreement continues to be elusive: El Hekaya’s Amr Adib phoned Irrigation Ministry spokesperson Mohamed El Sebaei, who said that there is yet to be an agreement between the three countries because Ethiopia is still refusing to cede ground despite Egypt showing flexibility. The current round of negotiations are expected to come to a close this coming Friday or Saturday, he said (watch, runtime: 7:16). Al Kahera Alaan’s Lamees El Hadidi (watch, runtime: 12:04) also covered the negotiations.

Detained former student Ahmed Zaki: Adib read the public prosecutor’s statement on the detention of former AUC student Ahmed Bassam Zaki for four days. Zaki is being investigated amid allegations that he assaulted four girls, one of whom was under 18 (watch, runtime: 11:11). Al Kahera Alaan’s Lamees El Hadidi (watch, runtime: 1:33) spoke with Nihad Abu El Qumsan, the lawyer and head of the Egyptian Center for Women's Rights, who discussed the investigation procedures with the four girls (watch, runtime: 25:00). Masaa DMC’s Eman El Hosary (watch, runtime: 7:29), and Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 11:23) also covered the report.

Construction clampdown: El Hekaya’s Amr Adib spoke to Cabinet spokesperson Nader Saad about Prime Minister Moustafa Madbouly’s announcement yesterday that all residential construction in certain neighborhoods will be banned due to years of illegal construction. Saad said that the government would prepare a report within three months, and based on it prohibit construction in some areas (watch, runtime: 4:53). Masaa DMC’s Eman El Hosary spoke with Khaled Kassem, the Local Development Minister’s assistant, who also discussed the ministry’s decision to prohibit construction in some areas (watch, runtime: 8:44). Ala Mas’ouleety’s Ahmed Moussa also covered the report (watch, runtime: 1:22).

Speed Round

Speed Round is presented in association with

Business activity in Egypt began to stabilize in June after the calamitous plunge in May that came with the country’s covid lockdown, according to IHS Markit’s purchasing managers’ (PMI) index (pdf). Four months into the pandemic, business conditions in Egypt’s non-oil private sector remained uncertain in June: improving output and orders helped the PMI gauge edge up to 44.6 from 40.7 in May. That’s the highest reading seen since the Sisi administration introduced lockdown restrictions in March, but job losses accelerated to their quickest pace in four years. PMI readings above 50 suggest business activity is growing, while a reading below points to a slowdown.

Signs of stability: “June's PMI data gave some promising signs that the Egyptian economy is beginning to stabilize. Activity fell at the weakest pace in four months, supported by a similar easing to the decline in new business, said David Owen, economist at IHS Markit. The index collapsed to a record low of 29.7 in April, as business activity ground to a halt due to the lockdown.

Output and new orders rose to four-month highs but continued to decline due to weak demand and activity. Output got a boost as firms reported higher working hours and new orders from clients as the lockdown eased, but private sector activity remained sluggish mainly due to restrictions on tourism and travel.

Job cuts hit four-year high: Firms continued to actively cut jobs for the eighth consecutive month, bringing the rate of job losses to its fastest in four years. Businesses put the brakes on new hires and laid off staff to reduce running costs. Some also cut wages, causing staff costs to drop for the third month running.

There are indications that this could soon change: “Employment numbers still fell at an accelerated rate in June, although multiple signals suggest this will soon change,” Owen said. “Higher demand at some companies, increased backlogs and sentiment rising to a six-month high all point to firms hopefully restarting hiring in the near future.”

Purchasing activity: Firms continued to report a drop in purchasing activity, albeit at a slower rate than in May. However, some respondents were still suffering supply chain disruptions, with slower delivery times due to the curfew and port delays. Pricey medical materials and the appreciation of the USD led to a sharp increase in input costs. This combined with a sharp rate of inflation led to “a renewed uptick in overall cost pressures.” Output charges, meanwhile, dropped for again as firms continue to offer discounts to attract customers.

Outlook: Optimism for the future is now at the highest level so far in 2020. Businesses hope the gradual return of life will boost private sector demand and support employment going forward.

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M&A WATCH- STC completes due diligence on Vodafone Egypt, to announce intention mid-July: Saudi Telecom (STC) has concluded its due diligence on Vodafone Egypt ahead of its potential USD 2.4 bn acquisition of Vodafone Group’s 55% stake in the company, Masrawy reports, citing unnamed sources it says are familiar with the matter. The company will reportedly announce on 15 July, at 5pm Riyadh time, whether it will submit a purchase offer or request another extension. STC in April extended the purchase agreement beyond its initial 75-day shelf life by three months, citing “logistical challenges” caused by the pandemic.

Background: STC began due diligence in March after signing a non-binding MoU with Vodafone Group at the end of January to purchase its stake in Vodafone Egypt in a sale that would value the company at USD 4.4 bn. Telecom Egypt, which owns the remaining 45% of Vodafone Egypt, has a right of first refusal on the transaction but it remains unclear how it plans to proceed. The Financial Regulatory Authority said after the initial acquisition agreement that the Saudi company may be required to make a mandatory tender offer for 100% of the company if it goes ahead with the buyout.

M&A WATCH- NI Capital eyes Arabeya Online acquisition: State-owned investment bank NI Capital is in talks with Bank Audi to acquire its online brokerage arm, Arabeya Online, and is currently doing due diligence, Al Mal reports, citing unnamed sources. NI Capital is in negotiations over a potential purchase agreement with the Lebanese bank after three brokerages expressed interest in purchasing a majority stake earlier this year, according to the sources.

Advisors: NI Capital has tapped Zulficar & Partners as legal advisor, while Bank Audi has appointed Matouk Bassiouny and Hennawy as counsel.

Background: Bank Audi said earlier this year it was looking to offload its 100% stake in Arabeya Online shortly after announcing it was looking to sell its Egypt unit to First Abu Dhabi Bank. Sources familiar with the matter said in February that HC Securities & Investment, Cairo Capital Securities and a third unidentified company submitted bids for the brokerage. FAB put its acquisition of Bank Audi’s Egypt operations on hold in May, citing fallout from the coronavirus.

Egypt remained the most active venture capital market in MENA during 1H2020 with 25% of all transactions in the region, according to the 1H2020 update to Magnitt’s MENA Venture Investment Report. Egypt’s share remained unchanged from the startup platform’s full-year 2019 data, but edged up 2% from data collected during the first half of last year. The UAE, which ceded the top spot to Egypt in 2019 after seeing its share of the number of transactions fall 3%, regained some of this momentum in 1H2020 and is now tied with Egypt at 25%. Saudi Arabia came in third with a 18% share, followed by Oman (12%), and Jordan (6%). MENA startups inked 251 agreements for funding in 1H2020, down 8% by volume.

The UAE remains the top destination for venture funding with 59% of the total, while Egypt followed with 19% (up 7% from 2019). Egypt and Saudi Arabia were the only countries in the region to see an increase in total investment landed.

Overall, funding to MENA startups surged 35% y-o-y during the first half of the year to USD 659 mn due to a strong performance during 1Q 95% of the funding secured in the whole of 2019. When governments started imposing covid-19 lockdown measures in March, the level of funding dropped off substantially, falling 32% in 2Q compared to 1Q.

Vezeeta was the only Egyptian company to break the top five in value raised in 1H2020. The healthcare outfit made it to third place on the league table on the strength of the USD 40 mn series D round it closed in February. Two UAE-based companies topped the list: Emerging Markets Property Group (EMPG), which raised USD 150 mn in corporate stage funding, and cloud kitchen platform Kitopi, which secured USD 60 mn in a series B round.

Fintech is the most active industry, but real estate lands the cash: Fintech continued to come out on top as the most active startup space with the highest number of agreements, accounting for 16% of total transactions. E-commerce, with a 14% share, and delivery and transport, with 10% rounded up the top three. When measured by funding value, however, real estate takes the lead with 24% of the share of total funding, followed by e-commerce at 22%.

Read the summary (pdf) and full report (paywall).

PRIVATIZATION WATCH- HHD’s new development plan will be finalized this week: State-owned Heliopolis for Housing and Development (HHD) expects to finalize this week its new strategy to develop the company after scrapping plans to sell a stake with management rights earlier this year, Hesham Aboul Atta, the chairman of HHD’s parent company, the Holding Company for Construction and Development, told the local press. HHD will present the plan to Public Enterprises Minister Hisham Tawfik next week, Aboul Atta said.

What to expect: The plan will see HHD partnering up with other developers (presumably private sector players) for joint projects, Aboul Atta said, without providing further details.

Background: HHD scrapped its plans to offer a stake of up to 25% as part of the state privatization program in March, leading the company to decide it will work on a new development plan from within the company. The offering was initially set to include the sale of a 10% stake to a strategic investor, along with management rights, and another 15% on the bourse in a secondary sale. The tender for the 10% stake + management rights failed to attract bids in February.

House Defense and National Security Committee, National Security Council, army

LEGISLATION WATCH- House committee approves adding real estate taxes to unified filing platform: The House Planning and Budgeting Committee has approved a proposal from Rep. Mervat Alexan to include real estate taxes on the planned single tax filing platform that will be finalized after the under discussion Unified Tax Act passes the House, Al Mal reported. The platform had previously been expected to only allow taxpayers to file income tax, stamp tax and VAT returns. The House committee started discussing the bill earlier this week. It’s still unclear when the discussions will wrap up ahead of a final vote in the general assembly.

Naming and shaming tax evaders: The Planning Committee also approved amendments to the Unified Tax Act that would publicly publish the names of convicted tax evaders, Masrawy reported.

The House approved amendments to the law governing compensation for state-employed medical workers in light of the covid-19 pandemic, Masrawy reported separately. Doctors will now receive additional allowances of EGP 1,225 per month, dentists, pharmacists, veterinarians and physiotherapists will receive an extra EGP 875 per month, nurses, chemists and physicists will receive a EGP 790 top-up each month, and nursing and healthcare technicians will receive EGP 700 per month.

The House approved a draft law prohibiting army officers from seeking public office without approval from the Supreme Council of the Armed Forces, Al Masry Al Youm reported. The House Defense and National Security Committee also discussed the law regulating the National Security Council, which affirmed the army’s role in protecting the state and safeguarding its civil nature, Masrawy also reported. The international press is taking note: AFP | The National.

Religious Affairs Committee approves establishing charitable endowment fund: Parliament’s Religious Affairs and Endowments Committee has approved in principle a bill establishing a charitable endowments fund based in Cairo, according to Mubasher. The fund, which would fall under Prime Minister Moustafa Madbouly’s purview, will target a wide range of causes including infrastructure development projects, child poverty reduction and support for cultural institutions.

The Trade Ministry has started a review of its export subsidy program and could widen the list of goods eligible for state support, Hapi Journal reports, quoting unnamed exporters. The ministry is in talks with representatives from the building materials, construction, and chemicals and fertilizers industries to agree on which products should receive support from the government. The EGP 6 bn subsidies framework was supposed to be paying out fresh incentives this fiscal year, but faced backlash from businesses due to a lack of clarity.

The main sticking point is the government’s decision to compensate exporters via a mixture of cash, tax relief and grants. Under the new framework, exporters would receive 40% of their subsidies in cash, 30% in tax breaks and 30% in the form of grants to help them attend foreign exhibitions and acquire new land. Industry players want cash on the barrel head as was the case under the previous system, which saw the state fall behind in its payments.

DISPUTE WATCH- Court postpones ruling on Raya-FRA dispute as founder Medhat Khalil seeks settlement: The Cairo Economic Court has postponed a hearing that was scheduled for Sunday to look into an appeal by Raya Holding Chairman Medhat Khalil against a fine issued by the FRA for violating company ownership limits, the local press reports. This came after Khalil last week paid EGP 10 mn to the authority to seek a settlement. The court will convene on 8 September to decide whether to accept Khalil’s motion. A ruling in January imposed a EGP 110 mn fine on Khalil after he was found to have failed to pay an original EGP 11 mn fine. Khalil then appealed the verdict.

EARNINGS WATCH- Glaxo SmithKline’s local subsidiary reported profits of EGP 33.1 mn in 1Q2020 after having recorded loses EGP 7.5 mn in the first quarter of last year, according to a disclosure to the EGX (pdf).

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Egypt in the News

The foreign press is piling onto human rights stories with a focus on the arrest of health workers and journalists during the pandemic: Associated Press | Washington Post | Daily Mail | London Evening Standard.

A 24-year-old US citizen arrested last year for protesting in Tahrir Square has been released from prison and yesterday returned to the US. CNN, the Associated Press and ABC News have the story.

The Wall Street Journal has a piece on Egypt’s recent appeal to the UN to end the standoff over the Grand Ethiopian Renaissance Dam. “Going to the Security Council is almost a nuclear option from the Egyptian perspective,” the paper quotes Riccardo Fabiani, director of the North Africa Project at International Crisis Group. “It’s part of this policy of maximum pressure and diplomatic isolation that Egypt has been pursuing vis-a-vis Ethiopia.”

Also in the pages of the foreign press:

  • Authoritarianism, weak alliances and utopian visions of a religious based society are to blame for the Ikhwan’s downfall in Egypt, according to San Diego political science professor Ahmet T. Kuru’s most recent research published in the Conversation.
  • Stolen artifacts: A US man has been accused of attempting to smuggle hundreds of ancient Egyptian artifacts through JFK Airport in New York, the New York Post reports.

Diplomacy + Foreign Trade

Egypt has resumed cotton exports to India and Pakistan after a two-month hiatus as a precautionary measure amid the pandemic, Chairman of the Egyptian Cotton Exporters Association Nabil El Santaricy said, according to Al Mal. This comes as Egypt’s total cultivation area for the commodity will drop 22% this season to 183k acres, Masrawy reports, citing an unnamed source from the Cotton Arbitration and Testing General Organization.

President Abdel Fattah El Sisi met with Eritrean President Isaias Afwerki to discuss bilateral relations and the latest developments on the talks regarding the Grand Ethiopian Renaissance Dam (GERD), an Ittihadiya statement said.

Energy

Eni to finish production tests at North Hammad exploration well this week

Eni has begun production tests at the Bashrush exploration well in the Nile Delta where it recently discovered natural gas, Al Shorouk reports, citing an unnamed Egas source. Tests will be completed later this week, the source said. Eni last week announced the finding in its North Hammad exploration block and said that it would test for production with partners BP and Total.

Infrastructure

Egypt to offer 16k sqm of land in Upper Egypt to investors without charge

The government is offering more than 16k sqm of land in Upper Egypt without charge to investors as part of its plan to develop Upper Egypt’s governorates, according to Youm7. The plots are spread over 12 governorates and investors can book land online.

Basic Materials + Commodities

Abu Auf plans new EGP 75 mn coffee factory in Tenth of Ramadan industrial city

A subsidiary of commodity player Abu Auf is planning to set up a EGP 75 mn coffee plant in the Tenth of Ramadan City, CEO Ahmed Auf said, according to Hapi Journal. The planned 10k sqm plant will produce 5k tonnes of coffee beans a year.

Egypt approaches its local wheat procurement target

The Supply Ministry has purchased 3.5 mn tonnes of wheat from local farmers since the beginning of the local harvest season in April, state-owned Egyptian Holding Company for Silos and Storage Chairman Sherif Bassily told Mubasher. The ministry will end the procurement season in mid-July as it has nearly reached its 3.6 mn tonne target.

Real Estate + Housing

Madbouly says no new residential buildings in certain urban zones

The government will no longer permit residential construction in certain urban neighborhoods that have reached their maximum population density following over 40 years of indiscriminate urbanization, Prime Minister Moustafa Madbouly said yesterday, without naming the neighborhoods in question. Please (pretty please?) let Maadi be one of those.

Banking + Finance

Egyptian consumer finance firm Sarwa looks to set up transferable value fund

Sarwa Capital filed with the Financial Regulatory Authority (FRA) to set up a “transferable value” fund, a new type of fund through which it can transfer receivables, the local press reports. The market regulator had issued a decision last month allowing the creation of these funds, which are dedicated to providing liquidity to leasing, mortgage and consumer finance, factoring, and microfinance companies. The decision is designed to help these firms access liquidity. Our friends at ALC Alieldean Weshahi & Partners are legal advisors to Sarwa on the fund.

Export Development Bank granted factoring license

The Export Development Bank of Egypt has received a license from the Financial Regulatory Authority to offer factoring and registration services, according to Hapi Journal.

On Your Way Out

Thanos who? Covid-19 proved to be a much more vicious opponent in this short animated film created by Egypt’s Deadline Studios featuring heroes from movies, cartoons, and comics (watch, runtime: 08:12). When the superheros fail to fight covid-19, Captain America calls on the doctors, nurses, and scientists to save the day and for everyone else to do their part. Watch ‘til the end for a nice Egyptian rant.

The Market Yesterday

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EGP / USD CBE market average: Buy 16.01 | Sell 16.11
EGP / USD at CIB: Buy 16.01 | Sell 16.11
EGP / USD at NBE: Buy 16.03 | Sell 16.13

EGX30 (Monday): 11,088 (+1.2%)
Turnover: EGP 1.9 bn (127% above the 90-day average)
EGX 30 year-to-date: -20.6%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session up 1.2%. CIB, the index’s heaviest constituent, ended up 1.4%. EGX30’s top performing constituents were Sodic up 5.2%, Juhayna up 5.2%, and Orascom Development up 4.9%. Yesterday’s worst performing stocks were Cleopatra Hospital down 2.1%, Credit Agricole down 2.0% and Egypt Kuwait Holding down 1.1%. The market turnover was EGP 1.9 bn, and local investors were the sole net buyers.

Foreigners: Net short | EGP -97.0 mn
Regional: Net short | EGP -22.6 mn
Domestic: Net long | EGP +119.5 mn

Retail: 61.2% of total trades | 58.6% of buyers | 63.9% of sellers
Institutions: 38.8% of total trades | 41.4% of buyers | 36.1% of sellers

WTI: USD 40.59 (-0.15%)
Brent: USD 43.12 (+0.75%)

Natural Gas (Nymex, futures prices) USD 1.83 MMBtu, (+5.54%, August 2020 contract)
Gold: USD 1,794 / troy ounce (+0.22%)

TASI: 7,390 (+0.03%) (YTD: -11.9%)
ADX: 4,318 (+0.34%) (YTD: -14.92%)
DFM: 2,087 (+1.23%) (YTD: -24.50%)
KSE Premier Market: 5,627 (+0.05%)
QE: 9,196 (+0.10%) (YTD: -11.79%)
MSM: 3,511 (+0.08%) (YTD: -11.81%)
BB: 1,277 (-0.03%) (YTD: -20.68%)

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Calendar

12 July (Sunday): Postponed court session for the appeal filed by the Egyptian Resorts against the Tourism Development Authority

15 July (Wednesday): STC will reportedly announce at 5pm Riyadh time whether it intends to go through with its offer to acquire a controlling stake in Vodafone Egypt.

23 July (Thursday): 23 July revolution anniversary, national holiday.

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.

5 August (Wednesday): IHS Markit PMI for Egypt released.

11-12 August (Tuesday-Wednesday): Senate elections take place.

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.

8-9 September (Tuesday-Wednesday): Run-off Senate elections.

15 September (Tuesday): 2019-2020 academic year ends for Egyptian universities.

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.

8 October (Thursday): National holiday in observance of Armed Forces Day.

23-31 October (Friday-Saturday): Updated dates for El Gouna Film Festival, El Gouna, Egypt.

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.

25 January 2021 (Monday): 25 January revolution anniversary / Police Day.

28 January 2021 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

4 February 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

18 March 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

12 April 2021 (Monday): First day of Ramadan (TBC).

25 April 2021 (Sunday): Sinai Liberation Day.

29 April 2021 (Thursday): National holiday in observance of Sinai Liberation Day.

29 April 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

3 May (Monday): Sham El Nessim.

6 May (Thursday): National holiday in observance of Sham El Nessim.

12-15 May (Wednesday-Saturday): Eid El Fitr (TBC).

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

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

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