Tuesday, 15 September 2020

We apparently need to learn to be sociable again

TL;DR

What We’re Tracking Today

Good morning, friends. It’s another big news day replete with M&As, a spectrum auction that could, one day (maybe?) herald a slight improvement in mobile voice call quality (surely we’re not the only ones who find VoIP clearer than voice calls these days?), news of startup investments and more.

Meanwhile, it’s off to re-education camp for us — we’re going to need to learn how to be sociable again after the government yesterday announced a partial lifting of covid-19 restrictions on weddings, conferences, events, and other large gatherings. Daily covid cases have remained low over the past six weeks since falling dramatically in July, allowing the government to push ahead with easing more restrictions. We have the full rundown in this morning’s Speed Round, below.

The six-month freeze on loan repayments ends today: The Central Bank of Egypt (CBE) will not extend the six-month freeze on loan payments which expires today, according to a circular (pdf) published by the bank yesterday. The CBE instructed banks not to extend the initiative, introduced in March to ease pressure on borrowers through the covid-19 pandemic; lenders will instead review the financial positions of individual and corporate customers to assess whether they would be eligible for debt restructuring.

Foreign Minister Sameh Shoukry is in Greece today for talks, the Foreign Ministry said yesterday. The visit comes two days after the Greek government raised the prospect of bilateral talks with Turkey to dial back tensions in the EastMed.

Ten companies will meet with Internal Trade Development Authority head Ibrahim Ashmawy today to discuss the prospects of investment in several upcoming logistics projects, Hapi Journal reports.

We’ll know tomorrow the results of last week’s run-off elections for the Senate. The first round of voting last month saw 174 members elected to the newly-constituted upper chamber, and the run-off will determine the outcome in another 26. President Abdel Fattah El Sisi will appoint the remaining 100 members of the 300-seat Senate after the final results of the votes are announced.

The Food Export Council will hold a meeting on Thursday with Brazil’s ambassador to discuss increasing exports under the 2017 Mercosur Agreement, Youm 7 reports. Egyptian exports to Brazil have surged 74% in the three years since the trade agreement was signed.

UAE, Israel to sign normalization pact today: UAE Foreign Minister Sheikh Abdullah bin Zayed and Israeli PM Benjamin Netanyahu are in Washington today to sign a historic accord that will formally establish diplomatic relations between the former enemies.

It’s Fed day: The US Federal Reserve kicks off it’s two-meeting to review interest rates today. The bank may announce new three-year interest rate projections and elaborate on its recent break with tradition to allow inflation to shoot past 2% and unemployment to fall further than previously allowed, per CNN.


The exciting week for our fellow gadget nerds continues today with an Apple event kicking off at 7pm CLT today. Bloomberg’s Mark Gurman suggests we’ll see a new Apple Watch with an oxygen meter and an iPad Air that looks a lot like an iPad Pro — but no new iPhones until another event in October. Thanks, covid.

Sony made good yesterday on the launch of its A7C entry-level full-frame camera, which the gang at DPReview suggest is essentially an A7III compressed into a smaller (slightly pricey) package that shares DNA with its A6xxx series. Go watch Chris and Jordan chew it over, listen to Hugh Brownstone (the most thoughtful camera reviewer out there) or catch Fro Knows Photo.

Tomorrow you can expect Sony to talk PS5 while Nikon takes the wraps off two new lenses for its Z mount full-frame camera — and perhaps gives us a sneak peek at its anticipated Z6s and Z7s models.

And for us (sci-fi) nerds: Astronomers think they may have found signs of life on … Venus, of all places. Belay your “men are from Mars and women are from Venus” jokes from the derisible 1992 book and get this: Scientists think signs of phosphine gas in Venus’ upper atmosphere could speak to bacterial life on the planet, what has long been overlooked in our search for life beyond earth. The story is front page around the world: NYT | WSJ | BBC | FT | NatGeo | The Atlantic.


SIGN OF THE TIMES- The pandemic has rekindled debate over whether it’s time to move to a shorter workweek, but the catch is that some companies are cutting salaries in step with work hours. The Financial Times has a quick look at the subject worth considering if this is on your list of ideas for 2021 as we think through strategy and budget for next year.


The Health Ministry reported 168 new covid-19 infections yesterday, up from 153 the day before. Egypt has now disclosed a total of 101,177 confirmed cases of covid-19. The ministry also reported 13 new deaths, bringing the country’s total death toll to 5,661. We now have a total of 84,969 confirmed cases that have fully recovered.

The World Health Organization has promised Egypt 30 mn doses of the first covid-19 vaccine that safely hits the market, Youm7 reports, citing cabinet spokesman Nader Saad, who did not elaborate.

EgyptAir, UAE health firm to collaborate on PCR tests: EgyptAir and Aster Hospitals will work together to provide EgyptAir customers travelling to Cairo from the UAE with PCR tests, Al Shorouk reports.

Air Arabia will be operating daily flights between Abu Dhabi and Cairo starting 24 September, the airlines announced in a statement. The budget UAE carrier had begun operating flights connecting Abu Dhabi with Alexandria’s Borg El Arab airport and Sohag in July.

enterprise

Questions are again swirling over whether UBS and Credit Suisse could merge after “UBS chairman Axel Weber … mapped out a merger with Credit Suisse that would create a unified Swiss champion in wealth management and investment banking,” the Financial Times reports. No formal talks are underway, the salmon-colored newspaper adds.

The US tech slump has allowed Saudi Aramco to reclaim its spot as the world’s most valuable listed company — an accolade Apple had snatched from the oil giant in July, Bloomberg reports. Apple’s shares tumbled nearly 17% this month as the tech-dominated Nasdaq endured a sell-off, while Aramco’s shares are up 1.1% in September so far.

The Trump administration is set to review the potential agreement between Oracle and TikTok’s owner ByteDance ahead of the 20 September deadline, the Financial Times reports, citing unnamed officials familiar with the matter. ByteDance is seeking a “technical partnership” agreement with Oracle that would see the US tech firm take over the management of its user data and acquire a stake in its US unit.

enterprise

Have we already passed peak oil? Global demand for oil may have already peaked, leaving the fossil fuel industry facing a terminal decline, BP has said in its annual energy outlook. Two of its three energy scenarios over the coming three decades suggest that the covid-19 pandemic may have caused demand to peak in 2019, while the third envisions a world where climate change does not intensify, forecasting demand to plateau through the coming decade before declining from 2035.

SMART POLICY- Unilever could help drive down fossil fuel demand by committing to relying 100% on renewable or recycled carbon, instead of fossil fuels, in its cleaning products by 2030, the company said in a statement (pdf). The switch is part of the company’s EUR 1 bn “clean future” program to reduce its carbon footprint.

Yoshihide Suga is almost certainly Japan’s next premier after the governing Liberal Democratic Party elected him as its new leader in a landslide victory, according to the BBC. The country’s parliament will vote tomorrow to select a new leader to succeed Shinzo Abe, who stepped down late last month citing health reasons. Suga, who served as chief cabinet secretary under Abe and is considered one of his closest allies, is widely expected to stick with so-called ‘Abenomics’ — a set of economic policies that revolves around loose monetary policy and big government spending. The program saw Japan’s economy experience its longest run of post-World War II growth, and succeeded in lifting it out of its decades-long period of deflation.

An end to the eight-month blockade on Libyan oil exports may be in sight after eastern military commander Khalifa Haftar pledged a “full reopening of the energy sector,” the US embassy in Libya said in a statement on Saturday.

US ELECTION WATCH- Secret Agent Orange is sticking to his position that the wildfires sweeping the US’s West Coast has nothing to do with climate change. “It will start getting cooler — just you watch,” US President Donald Trump said during a campaign appearance after meeting with California state officials. “I don’t think science knows, actually.” Rival presidential candidate jumped on Trump’s dismissal of the scientists’ claims, calling the president a “climate arsonist,” the NYT reports. Reuters has footage (watch, runtime: 1:10)

Enterprise+: Last Night’s Talk Shows

The lifting of restrictions on weddings, conferences and funerals in public places was the topic of the night on the talk shows, with plenty of attention still given to the progress of settling building code violations nationwide.

Restrictions on mass gatherings eased: Al Hayah Al Youm Lobna Assal highlighted the cabinet meeting on resuming public gatherings amid covid-19, including conferences and weddings at hotels, provided they’re adhering to safety measures and not exceeding 50% capacity (watch, runtime: 4:52). Assal also spoke with cabinet spokesman Nader Saad to discuss the measures (watch, runtime: 8:35). Masaa DMC’s Eman El Hosary also had coverage (watch, runtime: 2:47). We have all the details in this morning’s Speed Round, below.

Covid-19 update: Assal also discussed the latest covid-19 statement from Health Minister Hala Zayed, who laid out a four-phase plan to confront a possible second wave of the pandemic. This includes providing some 320 treatment centers, medicines and supplies, preventing entry into the country without safety checks including PCR tests, and the provision of vaccines once they’re available (watch, runtime: 4:52),

As ever, the talking heads couldn’t help but chew over informal housing and buildings that otherwise violate the construction code.

The big news on this front: The 30 September deadline to file for settlements will not be extended, cabinet spokesman Nader Saad told Al Tasea Masaan’s Wael El Ebrashy (watch, runtime: 40:09), adding that enforcement officers will go after anyone who hasn’t filed paperwork to set things right by the end of this month. Other highlights on the topic from last night:

  • Electricity and water services will be cut for people who don’t sort out their paperwork by the deadline, Saad told Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 5:51).
  • The government has received some 1.1 mn settlement applications, and is expected to break the 2 mn mark by the deadline, Saad said.
  • Sharqiya Governorate has seen a 15-20% increase in settlements since the state began offering reduced fees on settlements (watch, runtime: 5:25) while Gharbiya Governorate has received 41k new applications (watch, runtime: 9:05).

Zamalek building restored: El Hekaya's Amr Adib spoke with Transport Minister Kamel El Wazir, who discussed the reparations made to Zamalek’s El Sharbatly building, which was damaged earlier this year due to the construction of the metro. The restoration cost around EGP 10-11 mn (the cost was apparently covered by the consortium overseeing the project)], and the building is now 100% safe, he said. El Wazir added that the Egyptian Company for the Management and Operation of the Metro has hit the point at which it no longer has the capacity to run other phases, suggesting the government could seek help from foreign management firms such as RATP Dev to run the metro’s fourth and fifth lines (watch, runtime: 3:57). Al Hayah Al Youm’s Lobna Assal also covered the news (watch, runtime: 4:29).

Speed Round

Gov’t to relax restrictions on mass gatherings from Monday: Public wedding celebrations, funeral prayers, expos, and some sports and educational activities will resume next week for the first time since March with all the customary precautionary measures in place, cabinet said in a statement yesterday. Large gatherings have been banned nationwide for the past six months to prevent the spread of the coronavirus. Decisions to allow gatherings with reduced capacity come as last week’s average daily infection rate last week fell compared to the previous week, Health Minister Hala Zayed said. Daily covid-19 cases have remained low over the past six weeks since falling dramatically in July, hovering between the 130-180 range since the start of September.

What the new decisions cover: Hotels and tourist establishments that have passed health and safety checks will be permitted, starting Monday, to host outdoor weddings with no more than 300 guests, and meeting and conference venues will be allowed to operate at 50% capacity or with no more than 150 attendees. Meanwhile, funeral prayers will resume at mosques that have open courts, and funerals in street tents will be permitted to operate provided they’re ventilated from all sides and adhere to capacity restrictions. Sporting clubs and youth centers will reopen swimming pools and day-care centers, and adult education and literacy courses will also be back in session. Training for second-division football teams will also be allowed to restart.

Sheeshas will still be banned at cafes until a covid-19 vaccine or other adequate treatment is found, cabinet spokesperson Nader Saad said.

Parents will get the chance to attend the annual ‘Welcome Schools’ expo, which will be held on 20-27 September at the Cairo Fair Zone in Nasr City. The Alexandria Book Fair, meanwhile, will be held on 1-10 October, becoming the first mass cultural event since the start of the pandemic.

Damietta isn’t hanging around: Damietta on Sunday took the lead and unilaterally began allowing wedding and event sites across the governorate, Governor Manal Awad announced. Cabinet spokesman Nader Saad said he was unaware if Awad had communicated her intention beforehand to the prime minister. At least two of us here at Enterprise have also been seeing a flurry of weddings being held over the past several weeks, including at outdoor venues and private homes, despite the general ban.

M&A WATCH- Is Telecom Egypt serious about a Vodafone Egypt takeover? Telecom Egypt (TE) could be about to thwart Saudi Telecom’s (STC) attempt to buy Vodafone Group’s 55% stake in Vodafone Egypt if a local press report yesterday is accurate. The story quotes sources allegedly close to the matter as saying that five banks are on board to finance the transaction. TE owns a 44.8% in the UK company’s Egypt arm and is able to counter any offer by STC with a bid of its own thanks to its shareholder agreement with the parent company. The lenders, which include Mashreq Bank and First Abu Dhabi (FAB), could help fund the transaction, which would see the state-owned landline monopoly merge its existing network WE with Vodafone. The company’s advisors — EFG Hermes and Citibank — are currently studying the potential acquisition.

TE’s debt burden might not be as much of a hindrance as some thought: Doubts have been raised about TE’s ability to buyout Vodafone’s stake due to its almost-EGP 17 bn debt pile. But sources said yesterday that the company could refinance its existing obligations under new terms, paving the way for a potential takeover.

STC is by no means out of the running: Reports that TE could move to purchase the stake came a day after an MoU signed between STC and Vodafone Group expired without an agreement “due to misalignment with relevant parties.” The talks became more complicated after STC reportedly asked to lower its initial USD 2.39 bn offer as its finances came under pressure due to slumping oil prices and the covid-19 pandemic. Discussions are still ongoing “to finalize the transaction in the near future,” Vodafone said in an update yesterday, adding that STC has “substantively” completed due diligence.

M&A WATCH- Ezdehar Egypt Mid-Cap Fund has acquired a minority stake in Al Tayseer Medical Holding Group, according to an Ezdehar statement (pdf). The statement does not disclose the exact size of the stake or the value of the acquisition. Al Tayseer  — which the Egypt-focused PE outfit began eyeing up earlier this year — has been pushing ahead with a EGP 700 mn expansion plan, including building a new hospital on the Banha-Mansoura road and upgrading its Zagazig Hospital to add 90 beds to its capacity.

Ezdehar is looking to help Al Tayseer invest more in its hospitals, and also its laboratories, according to the statement. Ezdehar founding partner Emad Barsoum had said last month that the firm — whose limited partners include the European Bank for Reconstruction and Development, the European Investment Bank, UK’s CDC Group, and the Netherlands’ FMO — has drawn down most of the funds committed to its midcap fund and was likely to make its final investment soon. It is unclear whether the final investment is the stake purchase in Al Tayseer. Barsoum said in August the firm is in the market to raise a further USD 200 mn to invest in midcap companies.

CORRECTION- 17 September, 2020

A previous version of this story incorrectly spelled Al Tayseer as Al Taisier. 

M&A WATCH- Upstart labs outfit Speed Medical signed a sale and purchase agreement to acquire Misr Laboratories in a transaction worth up to EGP 10 mn, according to a regulatory filing (pdf). The acquisition includes Misr Laboratories' eight branches across Beni Suef, Al Manial, and Atfih. Speed made an initial payment of EGP 1 mn on signing the contract, and will pay the remaining amount — which will be determined after it completes its due diligence and an audit of the next three month of sales. The total value of the agreement is capped at EGP 10 mn. The remaining payment is due by 16 December.

Background: This latest acquisition comes after Speed announced its takeover of City Labs in June, with a view to completing the acquisition of the network's 23 labs by the end of 2020. SPMD CEO Mahmoud Lasheen said the company also planned to open seven new medical labs worth EGP 12 mn in Alexandria this month, bringing the company's national branch count to 100.

enterprise

M&A WATCH- Nile Cotton Ginning board thinks IMEX offer price is low: Nile Cotton Ginning’s board of directors believe that IMEX International’s mandatory tender offer to purhcase at least 51% of the company’s shares at EGP 50 apiece is an undervaluation and needs an upward revision, according to an EGX filing (pdf). Shareholders balked at the valuation late last month, with top shareholder Samir Afifiy reportedly refusing to accept a price below EGP 70. The company’s worker’s union, which holds 7.06%, was amenable to IMEX’s price, since it exceeded the EGP 49 / share figure that was last offered by a group of unnamed investors looking to purchase the union’s stake.

Background: The company is at the center of a longstanding dispute after a 2011 court ruling sought to reverse the company’s Mubarak-era privatization, claiming the company had been undervalued. The investment dispute resolution committee reached a settlement last June that required Nile Cotton pay EGP 231.1 mn to the Holding Company for Construction and Development, allowing Nile Cotton’s shareholders to resume trading the company’s shares on the EGX after an eight-year hiatus.

CLARIFICATION – 16 September 2020

A previous version of this story said that the board had unanimously rejected the price offered by IMEX, and implied that the MTO could hit a stumbling block. Shareholders speaking to Enterprise and the local press this week said that they have subscribed to the ongoing MTO, and expect the offer to be successful and reach the minimum 50% required for execution.

The country’s four mobile network operators (MNOs) will submit bids on Thursday for new cellular frequencies being offered by the National Telecom Regulatory Authority (NTRA), Hapi Journal reports. Vodafone, Orange, WE, and Etisalat can bid for more than one allocation at once, sources told the newspaper. According to the sources, one of the MNOs already has spare frequencies on its network, leading NTRA to issue a decision allowing a maximum of three out of the four MNOs to receive spectrum. The offering includes spectrum with a minimum bid of USD 600 mn and a separate package for which the minimum bid is USD 300 mn.

In detail: The NTRA will sell a 40 MHz package for USD 600 mn and sell two 20-MHz packages for USD 300 mn each. Vodafone has reportedly got its eye on the 40 MHz offering while Orange, Etisalat and WE want 20 MHz each, which would leave one company empty handed.

Background: The MNOs have repeatedly asked the NTRA to provide access to more spectrum since 2017 when the regulator first launched 4G in the country. NTRA sold licenses for 4G frequencies for USD 1.1 bn and EGP 10 bn, asking that MNOs pay half the cost in greenbacks and half in EGP. Each provider was allocated spectrum between 5-15 MHz, with state-owned Telecom Egypt receiving 15 MHz, Orange and Etisalat both getting 10 MHz, and Vodafone receiving 5 MHz.

Egypt’s five largest listed real estate companies reported a combined drop in profits of around 31% in 2Q2020 as a result of the economic slowdown caused by the covid-19 pandemic, Reuters reports. Short of seeing a second wave of the pandemic, a rebound is likely by the end of the year or next year, the newswire adds, citing unnamed industry analysts.

What’s the damage? The combined profit of Talaat Moustafa Group (TMG), Palm Hills Developments (PHD), Sodic, Emaar Misr for Development, and Madinet Nasr for Housing and Development (MNHD) fell by 31% to EGP 1 bn in 2Q2020, compared to the EGP 1.47 bn they netted in the same period last year. Sodic, the country’s third-largest listed developer, was the worst hit, reporting a 77% y-o-y drop to EGP 40 mn in 2Q, on the heels of a nearly 83% drop in 1Q, the newswire notes.

Guess what’s to blame: “The coronavirus has led to a slowdown in initial sales and delayed deliveries, which affected real estate developers further” said Nemat Choucri, head of equity research and the real estate sector team at HC Brokerage. Tarek Shoukry, head of the Real Estate Development Chamber at the Federation of Egyptian Industries, said that the pandemic caused a “fear of buying” among customers.

Emaar alone in the black: Only Emaar Misr reported profit growth for the quarter, gaining nearly 13% y-o-y to reach EGP 365.7 mn.

But the slump may not last: Sodic, which attributed its decline in profits during the second quarter to covid-19 lockdown measures, also reported an uptick in sales cancellations in the second quarter — but said sales were coming back after lockdown measures were eased, with gross sales for the year returning to 2019 levels after a rebound in July.

STARTUP WATCH- US VC firm Openner to launch accelerator in Egypt: Washington, DC-based venture capital outfit Openner will establish an accelerator in Egypt and invest in 50 local startups, it said in a statement (pdf) early this morning. The statement doesn’t specify when the company will launch the accelerator or provide a target investment figure, but says that a number of Egyptian startups have requested direct and indirect financing from the firm. Since 4Q2016, Openner has invested USD 25 mn in more than 100 tech-focused US companies.

STARTUP WATCH- Egyptian healthtech startup Rology has raised USD 860k in a pre-series A funding round from HIMangel, Dubai Angel Investors, the Asia Africa Investment & Consulting, and Saudi’s Athaal Group, according to Waya. Rology plans to use the funding to expand its network to Saudi Arabia, Kenya and other markets in the region. The startup is currently working with around 90 hospitals in five countries. Rology aims to connect healthcare providers with remote radiologists from all over the world. The service offers 24/7 coverage and provides reports for non-urgent cases within 12 hours and emergency cases in 90 minutes.

STARTUP WATCH- Delivery solutions startup RoadRunner has raised a six-figure seed investment from an unnamed individual investor, Menabytes reports, without disclosing the exact figure raised. Unlike food delivery companies that partner with restaurants for a cut of each order’s value, RoadRunner uses its own network of salaried drivers and charges restaurants a fixed fee for every delivered order. CEO Khaled Taha said the business model has “helped us reach a fairly large number of transactions in a short time and positive gross profit as well on every single order.” The Cairo-based startup operates in Cairo, Tanta and Mansoura and is looking to expand beyond restaurants and offer services to pharmacies and other businesses, as well as individual customers.

Gold, steel, and cotton could eventually be on the menu for Egypt’s commodities exchange: The new Egyptian Commodities Exchange (Egycomex) could expand its tradable commodities to include non-food items such as gold, steel and cotton after trading begins in the first half of next year, exchange boss Ibrahim Ashmawy told Al Arabiya in an interview, without specifying a timeframe. Traders may initially be able to buy and sell wheat, oil, sugar, and rice, Ashmawy told us last week, but noted that these are not set in stone.

Background: The long-awaited exchange has been in the works since February 2018, when it was made possible after amendments made to the Capital Markets Act. The company that will operate the exchange is already up and running, with Ashmawy as its newly-appointed chairman. Shareholders in the company include the EGX, GASC, the Internal Trade Development Authority, private-sector investment banks Beltone, CI Capital and EFG Hermes, and several other state banks. Those shareholders are currently studying other options and will increase the number of tradable goods post-launch.

EARNINGS WATCH- Orascom Investment Holding (OIH) reported a EGP 49.9 mn loss in 2Q2020 after making a EGP 74.6 mn loss in the equivalent period last year, according to a company earnings release (pdf). Revenues came in at EGP 232.6 mn during the quarter, down from 273.8 mn in 2Q2019.

Egypt in the News

Foreign journalists seem to have mostly forgotten about Egypt this morning. The only piece of note: Al Monitor looks at the government’s recent moves to crack down on building violations.

Diplomacy + Foreign Trade

Leading coverage on the diplomatic front this morning: Kenya has done a U-turn on its decision to slap 25% tariffs on Egyptian exports. Kenya has proposed to extend the Comesa trade agreement until June 2021, backpedaling on its threat to leave the agreement and introduce 25% tariffs on Egyptian goods, according to Hapi Journal. Kenya is instead urging member states to agree to ratify a unified tripartite trade agreement between Comesa, the Southern African Development Community (SADC), and the East African Community, claiming that it's not feasible to conform to different commercial arrangements while holding multiple memberships in trade blocs.

In other Comesa news, the organization announced the launch of a new application that will allow clearing and forwarding agents to view current bond balance and active customs documents to facilitate the movement of trade between member countries and decrease costs, according to a press release (pdf).

Did Ethiopia make flooding in Sudan worse? Ethiopia’s unilateral filling of the Grand Renaissance Ethiopian Dam (GERD) directly contributed to the severe Blue Nile flooding that caused mass devastation in Sudan, Irrigation Minister Mohamed Abdel Aty said in statements to Al Shorouk.

All foreign forces must exit Libya if there is to be a political solution to the conflict, Foreign Minister Sameh Shoukry told his Russian counterpart Sergey Lavrov in a phone call yesterday.

General Khalifa Haftar, commander of the Libyan National Army, met with an Egyptian security delegation in Benghazi yesterday to discuss bilateral ties and the security situation in Libya, Al Masry Al Youm reports.

Tourism

Tourism associations are lobbying Misr Insurance to help cover new IATA letters of guarantee regulations

The tourism industry is lobbying state-owned Misr Insurance to cover the letters of guarantee tourism companies are required to submit to the International Air Transport Association (IATA), Federation of Tourism Chambers head Reem Fawzy tells the local press. The IATA issued new requirements last month for tourism companies to submit bank guarantees worth EGP 200k as insurance against the non-payment or cancellation of airline tickets instead of the previously accepted proof of insurance. Companies have been unable to fulfill new agreements due to a liquidity crunch in the industry that has struggled to get back on its feet since the outbreak of the pandemic.

Automotive + Transportation

Hill International and HJI Group to manage NAC Monorail project

The National Authority for Tunnels awarded (pdf) a consortium of Hill International and HJI Group Corporation the consultancy services contract for the new monorail lines connecting the new administrative capital and Sixth of October city. The consortium will oversee the implementation of the USD 4.5 bn project — which will extend a 54 km line between Nasr City and the new capital and a 42 km line from 6th of October to Giza — as well as manage and review the design for the monorail lines. US-based Hill International currently manages work on Cairo Metro Line 3, the Grand Egyptian Museum, and Cairo Light Rail. A consortium made up of Bombardier, Orascom Construction, and Arab Contractors signed a 30-year contract for the construction and maintenance of the lines last year.

Banking + Finance

CI Capital’s Souhoula provides installment payment option through retailers

CI Capital’s consumer finance arm Souhoola has signed contracts with six brick and mortar and online retailers to allow customers to pay for their purchases in installments, Souhoola CEO Hazem Madani said, according to Al Mal. The retailers include Jumia, Apple reseller Tradeline, and Saudi appliance store Raneen. Souhoola is also in talks with six unnamed universities and “advanced negotiations” with 15 health centers to offer installment plans for tuition fees and healthcare services, Madani added.

Mubasher gets license to market + sell fixed-income securities online

The Financial Regulatory Authority has awarded Mubasher Holding a license to market and sell fixed-income securities online through a new fund that will be set up by Azimut International in the coming two weeks, according to a company statement (pdf).

CIB Egypt renews ISO 22301 certification

CIB has had its ISO 22301-2019 certification from the International Organization for Standardization renewed for the third year in a row, according to Al Mal.

EgyLease negotiated EGP 400 mn loan with Banque Misr

EgyLease is in talks with Banque Misr for a EGP 400 mn loan to finance the company’s expansion plans, Chairman Iman Ismail told Al Mal.

Other Business News of Note

Empower Egypt looks to produce fertilizer, energy from sugar beet waste

Waste-to-energy company Empower is close to signing agreements worth a combined EGP 350 mn with three unnamed sugar beet processing companies to turn beet waste into energy and organic fertilizer, Chairman Hatem El Gamal told the local press. The company will buy land from the processors for its operations and plans to begin work by December. The Export Development Bank, Bank of Alexandria, and QNB have agreed to finance the facilities. Empower plans to sell the electricity under the independent power producer (IPP) framework, which allows private companies to directly sell power to consumers while paying the state a fee to use the national grid for transmission.

Italy’s Sopria Holding to set up supermarket chain in Egypt

Egypt has signed an agreement with Italy’s Sopria Holding to set up a new Italian supermarket chain in Egypt, the Supply Ministry said, without disclosing the name of the chain. The Italian company owns and operates Crai supermarkets. There were also no further details on the expected investment value or timeline. Sopria’s entry into Egypt will mark the first foray into the market for an Italian supermarket, and comes following a recent expansion to Switzerland and Malta.

Egypt Politics + Economics

El Sisi ratifies law closing tax loopholes for state debt purchasers

President Abdel Fattah El Sisi has signed into law a bill that closes loopholes that previously provided tax exemptions to some state institutions investing in state debt, according to a decree published in the Official Gazette. The House of Representatives had rubber-stamped the law before it adjourned for summer recess.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.70 | Sell 15.80
EGP / USD at CIB: Buy 15.70 | Sell 15.80
EGP / USD at NBE: Buy 15.72 | Sell 15.82

EGX30 (Monday): 11,034 (-0.5%)
Turnover: EGP 1 bn (11% below the 90-day average)
EGX 30 year-to-date: -21.0%

THE MARKET ON MONDAY: The EGX30 ended Monday’s session down 0.5%. CIB, the index’s heaviest constituent, ended down 0.9%. EGX30’s top performing constituents were Emaar Misr up 2.1%, EFG Hermes up 1.7%, and Orascom Investment Holding up 0.9%. Yesterday’s worst performing stocks were AMOC down 3.0%, Orascom Development Egypt down 3.0% and GB Auto down 2.6%. The market turnover was EGP 1 bn, and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -50.3 mn
Regional: Net long | EGP +5.5 mn
Domestic: Net long | EGP +44.8 mn

Retail: 76.1% of total trades | 76.7% of buyers | 75.5% of sellers
Institutions: 23.9% of total trades | 23.3% of buyers | 24.5% of sellers

WTI: USD 37.38 (+0.32%)
Brent: USD 39.61 (-0.55%)

Natural Gas: (Nymex, futures prices) USD 2.30 MMBtu, (-0.65%, October 2020 contract)
Gold: USD 1,965.40 / troy ounce (+0.09%)

TASI: 8,256 (+0.64%) (YTD: -1.59%)
ADX: 4,515 (+0.11%) (YTD: -11.05%)
DFM: 2,282 (+0.35%) (YTD: -17.45%)
KSE Premier Market: 5,877 (+0.39%)
QE: 9,872 (-0.05%) (YTD: -5.30%)
MSM: 3,684 (-0.20%) (YTD: -7.45%)
BB: 1,401 (+0.22%) (YTD: -12.96%)

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Calendar

September: The Egyptian Federation for Securities will hold elections for its board of directors after they were postponed in March due to the lockdown.

September: The General Authority for Investment (GAFI) will host a virtual meeting with the Arab-German Chamber of Commerce and Industry and some 120 German companies to discuss investment prospects in Egypt.

14-15 September (Monday-Tuesday): The Chemical Industries Export Council will organize a virtual conference to discuss export options for Egyptian chemical exporters in Kenya and Uganda.

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

Mid-September: Proposed time slot for UAE-Israel normalization agreement signing ceremony which will be held in Washington, US.

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

16 September (Wednesday): The last day for the final results of the senate elections to be announced.

17 September (Thursday): OPEC and its allies will meet to assess whether their recent vast oil production cuts have saved the market from the global glut.

20 September (Sunday): A Cairo administrative court is due to issue a ruling in a third-party lawsuit demanding the government block YouTube in Egypt for carrying an allegedly sacreligious video. The case is an infamous 2012-vintage lawsuit still wending its way through the courts.

20-27 September (Sunday-Saturday): Welcome Schools expo, Cairo Fair Zone, Nasr City.

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

24-25 September (Thursday-Friday): The European Union will discuss imposing sanctions on Turkey to limit the country’s ability to expand its search for oil and gas in contested eastern Mediterranean waters.

27 September (Sunday): Former Finance Minister Youssef Boutros Ghali to be retried on charges he squandered public funds in a case related to the printing of coupons for butane canisters.

28 September-3 October (Monday-Saturday): CIB PSA World Tour Finals, Cairo, Egypt.

End of September: Last chance to settle building code violations for illegal buildings.

1 October (Thursday): House of Representatives reconvenes for its sixth and final legislative session before elections for the house later in October or November.

1-10 October (Thursday-Saturday): Alexandria Book Fair, Kouta, Alexandria.

4 October (Sunday): Senate convenes for its first session.

6 October (Tuesday): Armed Forces Day.

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

17 October (Saturday): 2020-2021 academic year begins for K-12 students at state schools and students in public universities.

21-23 October (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

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

24-25 October (Saturday – Sunday) Polls open for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

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.

November: An Egyptian-Russian ministerial committee will meet to discuss trade and investment in Moscow.

2 November: Former Civil Aviation Minister Ahmed Shafik faces retrial at Cairo Court of Appeals in the so-called Aviation Ministry corruption case.

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

4-6 November (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

4-7 November (Wednesday-Saturday): Cityscape Egypt Expo, International Exhibition Center, Cairo

7-8 November (Saturday-Sunday): Polls open for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

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

15 November (Sunday): Egyptian Tax Authority’s online intro seminar on new electronic invoice system for first tranche of companies transitioning to e-filing program.

23-24 November (Monday-Tuesday): Reruns for Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

30 November (Monday): Final results will be announced for Parliamentary elections held in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

1 December (Tuesday): The IMF will conduct a first review of targets set under the USD 5.2 bn standby loan approved in June (proposed date).

7-8 December (Monday-Tuesday): Reruns for Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

14 December (Monday): Final results will be announced for Parliamentary elections held in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

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.

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship at the Giza Pyramids

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

26-28 January (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia

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 2021 (Monday): Sham El Nessim.

6 May 2021 (Thursday): National holiday in observance of Sham El Nessim.

12-15 May 2021 (Wednesday-Saturday): Eid El Fitr (TBC).

31 May-2 June 2021 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

1 June 2021 (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

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

26-29 June 2021 (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center

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

30 July-3 August 2021 (Thursday-Monday): Eid Al Adha, national holiday (TBC).

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