Sunday, 20 September 2020

Poll: Central Bank of Egypt to leave rates unchanged this Thursday


What We’re Tracking Today

9/20 marks the start of our birthday week here at Enterprise. On September 20, we wrote the first “zero issue” of what became your morning read — two more followed before we released issue 1 on 25 September 2014. Exactly 50 of you read it. Fast forward six years and we’re on track to have more than 160k unique readers this month between our email and web editions — with most of you coming back multiple times per week (bless you). This morning, for those of you keeping count at home, is issue #1,419…We’ll have more for you later this week on how we plan to celebrate our sixth year.

In the meantime, make our birthday awesome by checking out this tune. Yes, our distaste for techno-shaabi is well documented. Yes, we remain sure that Omm Kolthoum is spinning in her grave. But when your college-bound nephew celebrates the start of his engineering studies in London by dropping a track, you tend to have changes of heart.

Tap or click here to listen to Yoda by Khalaf on Anghami, better known as Aly Khalifa, nephew of our Grand Poobah and all-around awesome guy. Haven’t signed up for Anghami yet? Listen here on our website.

It’s interest rate week, ladies and gents — and we’re calling a ‘hold’. All 11 analysts and economists we surveyed expect rates to be left unchanged for a fifth consecutive meeting when the Monetary Policy Committee convenes this Thursday. We have the full results of our regular poll in this morning’s Speed Round, below.

Our newly-elected senators are getting a welcome party today and tomorrow at their new headquarters ahead of the first official session of the Senate, which is scheduled for two weeks from today, according to a cabinet statement. A total of 200 Senate members have been elected, with the 100 remaining spots in the 300-seat chamber set to be decided by President Abdel Fattah El Sisi.

Meanwhile, aspiring candidates for the upcoming parliamentary elections have until Saturday to submit their applications to the National Election Authority (NEA), reports Al Shorouk. The elections kick-off on 21 October when expats from the 14 governorates included in the first phase of voting go to the polls. We have the full breakdown here.

The cabinet’s decision to relax some restrictions on mass gatherings comes into effect tomorrow. Public wedding celebrations, funeral prayers, expos, and some sports and educational activities will resume — subject to some restrictions — for the first time since March after the government last week agreed to ease curbs on gatherings.

EFG Hermes’ virtual investor conference kicks off tomorrow and wraps next Thursday, 1 October. You can visit the conference website here.

The Arab-Brazilian Chamber of Commerce is hosting a webinar on Egypt-Mercosur trade today. The online conference is expected to discuss trade between Egypt and the South American economic bloc, and follows a meeting with the Food Export Council held last week with Brazil’s ambassador in Cairo.

Oriental Weavers chairman Mohamed Farid Khamis passed away on Saturday at the age of 80 following a long struggle with illness, the local press reports, citing a statement from the Egyptian Federation of Investors Associations (EFIA), over which he presided as chairman. Khamis died in the US while receiving treatment for an undisclosed illness. A prominent local brand, EGX-listed Oriental Weavers is an Egypt-based company that specializes in machine-woven carpets and rugs for the local and global market, with subsidiaries in the US and China. Khamis’ Orientals Group also operates Orientals Urban Development and Orientals Petrochemicals Company.

The Health Ministry reported 128 new covid-19 infections yesterday, down from 131 the day before. Egypt has now disclosed a total of 101,900 confirmed cases of covid-19. The ministry also reported 17 new deaths, bringing the country’s total death toll to 5,750. We now have a total of 88,666 confirmed cases that have fully recovered.

Covid-19 has made Egypt’s efforts to develop human capital all the more crucial: Egypt’s education and health reform programs funded by the World Bank could help the country to preserve improvements made to human capital development amid the covid-19 pandemic, Maria Laura Sanchez Puerta, the World Bank’s human development program leader in Egypt, writes in a blog post. The USD 500 mn project to reform the education system and the USD 530 mn healthcare program are supplementing the slight gains made over the previous decade: it is estimated that a child born in 2020 is likely to be 49% as productive as one enjoying complete education and full health, compared to the 48% productivity of a child born 10 years earlier. “The crisis created by the pandemic has made Egypt’s investments in human capital more crucial than ever — both to protect its fragile gains and spur its future generations onto greater productivity,” she writes.

EgyptAir is offering discounts of up to 20% for flyers who buy vouchers worth EGP 300-700 before 20 October, the company announced in a statement. The offer hands customers who buy a EGP 300 voucher a 10% discount on flight tickets, while a EGP 500 voucher carries a 15% discount and a EGP 700 voucher grants a 20% discount. The vouchers are valid for one year. The national flag carrier lost some EGP 3 bn in revenues during 2Q2020 when flights were grounded due the pandemic. The airline was operating at around 45% of its pre-covid capacity two months after flights were resumed at the beginning of July, but is still haemorrhaging EGP 600-700 mn every month.

International carriers are also getting a helping hand: Airlines operating at airports in the Red Sea, South Sinai and Marsa Matrouh governorates will be granted a 50% discount on landing and accommodation fees, and a 20% discount on ground services, the local press reports, citing a decision by Civil Aviation Minister Mohamed Manar published in the Official Gazette.

SIGN OF THE TIMES- Apparently, some people miss flying so much that airlines may begin offering a “flight to nowhere” that takes off and lands in the same destination, according to CNBC. The idea could help hard-hit air carriers like Singapore Airlines shore up revenues, while providing nostalgic passengers with the chance to fly for a few hours. Our only question is: Who actually enjoys flights?

enterpriseTake a moment to breathe in and watch the beauty around. It’s time for your mind to wander to beautiful places at Somabay and let nature work its magic.

MARKET WATCH- US stocks were down on Friday — with the Dow, Nasdaq, and S&P 500 all clocking losses of around 1%. The tech-heavy Nasdaq extended losses for a third day on news that the Trump administration was moving to block downloads of Chinese apps TikTok and WeChat, while the S&P 500 hit six-week lows due to the so-called “quadruple witching” — a quarterly event when all equity derivatives expire on the same day, Bloomberg says. Elsewhere, the pan-European Stoxx 600 was 0.7% lower on Friday as investors fretted about rising covid-19 cases in Europe.

The lack of a new iPhone model in Apple’s “underwhelming” product launch last week didn’t help the tech company’s nosediving market value, which has dropped 22.6% — or USD 532 bn — since its 2 September intraday record of USD 137.98 / share, CNBC said Friday. While Apple’s product launch last week — which showed off a revamped iPad, Apple Watch 6, Apple One subscription plan, but no new iPhone — is partially to blame, the iPhone maker’s stock has dropped in line with the sell-off on the Nasdaq.

Trump approves TikTok-Oracle agreement “in concept”: In an about-turn, The Donald yesterday announced that he had approved Oracle’s offer to take over TikTok’s US operations, Bloomberg reports. The US Commerce Department said Friday that it would move to ban the Chinese social media giant from the US as of today, but Trump yesterday said that he had given his approval to the agreement “in concept.” US companies would own 53% of the new TikTok Global company and Chinese investors 36%, satisfying US demands it be under American control, the Wall Street Journal reports, citing an unnamed source familiar with the pact.

US ELECTION WATCH- Women’s rights champion and Supreme Court Justice Ruth Bader Ginsburg (RBG) has died at 87, after spending 27 years on the US’ nine-member Supreme Court. The death of liberal RBG — the second woman ever to hold a seat on the court since its establishment — will allow US President Trump to appoint a replacement justice, expanding the court’s conservative majority 6-3. This could not only drastically change the outcome of upcoming Supreme Court hearings on issues such as gun control and voting rights, but also saddle a Biden presidency with a conservative-majority supreme court in the event of a Democratic win.

Enterprise+: Last Night’s Talk Shows

The talking heads followed the recent formula last night, with building codes and covid-19 getting airtime.

Sharqiya ups discount for settling building violations: Al Hayah Al Youm’s Lobna Assal phoned Sharqiya Governor Mamdouh Ghorab, who said that the governorate will now offer a 50% discount on fines paid to the government to settle building violations. The governorate initially cut fees by 20% under rules announced by Prime Minister Moustafa Madbouly earlier this month (watch: runtime: 5:57).

Higher Education Ministry rep talks covid-19 precautions in schools: Masaa DMC's Eman El Hosary phoned Adel Khattab, member of the Higher Education Ministry’s virus committee, who said that children under the age of five will not be required to wear a facemask in class due to the potential effects on the respiratory system, but instead they should wear face shields. Students will also not be required to wear protective equipment during sports activities, he said (watch: runtime: 7:36).

El Wazir on infrastructure projects in Upper Egypt: Ala Mas'ouleety's Ahmed Moussa phoned Transport Minister Kamel El Wazir, who said that the ministry is working to build 13 axes in Upper Egypt and pave all intersections as part of a EGP 36.7 bn plan that will eventually resurface all village roads in the region. The government spent EGP 2 bn during the last FY to develop roads in several governorates, and has allocated a further EGP 5.3 bn for the next phase of development, he said, adding that the ministry will also work on a tunnel under the Nile in Luxor, connecting the east and west banks of the river. El Wazir also said that the ministry is working to clean, disinfect and line the Luxor-Assiut El Kalabiya canal and Assiut-Abou El Nomros canal (watch: runtime: 24:51).

Madbouly announces Capital Gardens residential area outside NAC: Assal highlighted Prime Minister Moustafa Madbouly’s visit to the new administrative capital yesterday, where he announced that the government had started work on the Capital Gardens residential area, lying between the new administrative capital and New Cairo. The new area will serve as an extension to Badr City, and is being built due to the high demand for housing in the area, he said (watch, runtime: 2:21). Masaa DMC’s Eman El Hosary also covered the news (watch, runtime: 1:17).

Wafaa Bassim becomes first Egyptian woman on the UN Human Rights Committee: Assal phoned Wafaa Bassim, who on Friday was elected to the UN Human Rights Committee for a four-year term. Bassim said that she is the first Egyptian woman to sit on the committee, and attributed her election to strong Egyptian diplomacy. Bassim has previously served as Egypt’s permanent representative to the UN in Geneva, and was Egypt’s ambassador to Romania, Moldova, and the Holy See. She also served on the National Council for Women’s foreign affairs committee (watch, runtime: 8:02).

Speed Round

ENTERPRISE POLL- CBE expected to leave rates on hold when it meets this Thursday: The Central Bank of Egypt (CBE) will likely keep interest rates unchanged when its Monetary Policy Committee (MPC) meets this Thursday, according to an Enterprise poll. All 11 economists and analysts surveyed expect the MPC to leave rates on hold for the fifth consecutive meeting after its record 300 bps emergency cut in March.

Where rates stand currently: The CBE’s overnight deposit rate is at 9.25% and the lending rate is at 10.25%. The main operation and discount rates are both at 9.75%.

Don’t expect low inflation to prompt a resumption of the monetary easing cycle. Analysts say that the central bank is unlikely to be lured into cutting rates by low inflation, which fell to a 10-month low of 3.4% last month. “Our expectation is that the central bank will keep interest rates steady despite the decline in inflation,” said Mona Bedeir, senior economist at Prime Holding. “The central bank is reassured of its ability to achieve its inflationary goal and therefore its focus is on the stability of the exchange rate and the attractiveness of domestic debt instruments to compensate for the shortage of other foreign exchange sources of transfers.”

Most analysts are expecting inflation to tick up in the months ahead: Mohamed Abu Basha, EFG Hermes’ head of macroeconomic research, expects the annual inflation rate to average 5% in the coming months, with a slight uptick towards the end of 2020 due to the base effect. The recent doubling of an industry-support package of loans provided by the CBE to EGP 200 bn gives further impetus for a rate hold, Abu Basha added. Pharos’ head of research Radwa El Swaify and HC’s Monette Doss are of the same mind, with both expecting inflation to remain between 5-5.5% in the near future. El Swaify also expects the seasonal back-to-school uptick in inflation to raise the headline rate 1%. The central bank currently sees inflation averaging 6.2% in 4Q.

But then again, it might not: Renaissance Capital forecast in a research note last week that inflation will remain below the lower bound of the CBE’s 9% (+/- 3%) target inflation range through to the end of the year amid a continued slump in consumer demand.

Capital Economics, meanwhile, suggests that the CBE will keep rates on hold to support the EGP, which has rallied 1.6% against the greenback since the beginning of August. “Even though inflation will remain weak, that alone is unlikely to be enough to prompt policymakers to resume the loosening cycle … the CBE appears to have shifted back to supporting the currency,” James Swanston, MENA economist at the research firm, wrote.

The all-important carry trade: Despite the CBE having room to cut rates, the bank will want to maintain Egypt’s position as having one of the highest real interest rates in emerging markets, analyst Hani Abu El Fotouh suggests. Amid muted remittances and weak tourism, foreign inflows into government debt are currently Egypt’s largest source of hard currency, making the prospect of losing portfolio flows “much more” costly than any gains the economy would make from a rate cut, says Abu Bakr Imam, head of research at Sigma Capital. On the domestic front, real interest rates are well-balanced to help contain dollarization and alleviate the burden of debt servicing, El Swaify says.

This is particularly important when considering that the country’s banks have held a net foreign liability position since March, when foreign portfolio investors exited Egypt en masse, says Doss. “A larger scale rebound of foreign portfolio inflows would enhance interbank liquidity and result in cooling off T-bill yields from current levels.”

Vodafone Egypt, WE bid for new cellular frequencies; Orange, Etisalat opt out: Vodafone Egypt and Telecom Egypt’s WE (pdf) have submitted offers in the National Telecommunications Regulatory Authority’s (NTRA) tender for new cellular frequencies, Youm7 reports. No details were provided on the value of the two companies’ bids. Orange Egypt and Etisalat Misr did not bid in the tender. The NTRA is selling 40 MHz of bandwidth for USD 600 mn and another 20-MHz band for USD 300 mn, with the planned sale of a second 20-MHz band at a later date. Enterprise reached out to representatives from the NTRA, Orange and Etisalat, but none were available for comment.

Background: Mobile network operators have repeatedly asked the NTRA to provide access to more spectrum since 2017 when the regulator first launched 4G in the country. The NTRA sold licenses for 4G frequencies for USD 1.1 bn and EGP 10 bn, and each provider was allocated spectrum between 5-15 MHz. State-owned Telecom Egypt received 15 MHz, while Orange and Etisalat both got 10 MHz, and Vodafone received 5 MHz.

Gov’t turns to customs breaks to spur EV revolution: The government is cutting to 10% the total value of local content needed to qualify for customs breaks on components imported for locally-assembled cars, according to a presidential decree issued by President Abdel Fattah El Sisi this weekend. Under a 2018 decree, importers were able to claim customs discounts of up to 90% provided local content accounted for a minimum of 30% of the finished product. The decision last week lowered the threshold to 10%, and in a move designed to encourage local assembly of EVs, expanded the list of eligible importers to include companies involved in the manufacture and assembly of EVs.

So what’s covered? The discounts apply to imported components used in setting up EV charging or natural gas refueling stations, inputs brought in to outfit cars with dual-fuel, electric, or natural gas engines, or parts used to set up renewable energy plants. Importers of those components, which are currently subject to a 2% tariff, will be eligible for customs breaks on a sliding scale provided they’re engaged in domestic manufacturing or assembly. How much of a break the importers receive will depend on the percentage of locally-sourced inputs used in their final products.

Background on the natgas transition: The Sisi administration earlier this year announced a multi-year plan to convert or replace 1.8 mn cars to run on both gasoline and natural gas. Owners of vehicles over 20 years old will receive low-interest loans through the MSME Development Agency to purchase new dual-fuel vehicles as part of a EGP 1.2 bn package announced in August (those with younger vehicles will be able to access zero-interest finance).

Background on EVs: A new framework to encourage the use of EVs has also been in the works since last year under instructions from El Sisi. A cornerstone of this framework involves subsidies of around EGP 50k that will be doled out for the first 100k locally produced EVs. The first large-scale production operation is set to begin in 2021 under an MoU signed in June between the Metallurgical Industries Holding Company (MIH) and China’s Dongfeng Motor Corporation, and is expected to cost EGP 500 mn to get off the ground.

WANT TO DIVE DEEPER? Take a deep dive into the natgas conversion plan with our three-part series in Hardhat: part 1, part 2 and part 3. Or learn more about whether Egypt is ready for EVs in a recent edition of our weekly probe into everything infrastructure.

INVESTMENT WATCH- EFG-managed Vortex Energy sells controlling stake in GBP 500 mn UK solar energy portfolio: EFG Hermes-managed renewable energy investment company Vortex Energy has sold a controlling stake in its UK solar energy portfolio, Vortex III, to Malaysian utilities company TNB International, in an agreement that handed the portfolio an enterprise value of GBP 500 mn (USD 647 mn), the investment bank said in a statement. The Vortex III portfolio, which contains solar assets producing 365 MW of power, generated returns some 1.5x the size of Vortex Energy’s initial cash investment of GBP 470 mn (USD 607.8 mn) in 2017. The bank now wants to build a new Vortex IV renewables portfolio, potentially investing up to USD 600 mn in projects in Europe, Mexico, Chile and Australia, EFG’s head of asset management and private equity, Karim Moussa, told Bloomberg.

Vortex Energy was founded in 2015 to operate renewable energy assets across Europe and has since invested EUR 1.3 bn in equity and debt in wind and solar assets, according to Moussa. The company’s Vortex I and Vortex II portfolios were last year sold last to JPMorgan as the company divested a 49% stake from wind assets owned in Portugal, Spain, Belgium and France. Vortex III marks the investor’s third renewable exit since launching the platform.

Egyptian Cement is planning to inaugurate a EGP 4.5 bn cement factory in Sohag next year, CEO Ahmed Abou Hashima tells Hapi Journal. Abou Hashima, who also owns and runs Egyptian Steel and Egyptian Media Group, had said earlier this year that the opening of the Sohag factory was postponed because of the covid-19 pandemic, but had not provided details at the time.

The announcement comes as a growing oversupply crisis in Egypt’s cement industry is threatening to push as many as six producers out of the country. The supply glut — which began in 2016 but was worsened when the state inaugurated a USD 1.1 bn cement factory in Beni Suef in 2018 — has already seen the National Cement Company permanently shutter, with others such as Tourah Cement, and El Nahda Cement temporarily suspending their operations. Enterprise took a deep dive into the cement industry earlier this year, when prospects for the sector already looked bleak.


M&A WATCH- Texas-based National Energy Services enters Egyptian market with USD 21 mn purchase of Egypt’s SAPESCO: US-based MENA and Asia Pacific oilfield service provider National Energy Services Reunited (NESR) closed last week its USD 21 mn acquisition of Egypt’s Sahara Petroleum Services Company (SAPESCO), according to a press release (pdf) from Matouk Bassiouny & Hennawy, which advised NESR. The acquisition agreement, which was finalized in June, also saw SAPESCO receive an issuance of over 2 mn NESR shares based on a USD 10 per share conversion rate as well as a final earnout of up to USD 3 mn in cash. NESR agreed to settle or assume SAPESCO's long-term debt. The acquisition marks NESR’s entry into the Egyptian market, and brings SAPESCO's existing upstream services contracts in Saudi Arabia, the UAE, Libya, and Kuwait into its portfolio.

Advisors: Matouk Bassiouny & Hennawy and Freshfields Bruckhaus Deringer acted as legal counsel to NESR. PricewaterhouseCoopers (PwC) served as financial advisors to NESR while AMR & Partners Law Firm were legal advisors to SAPESCO.

Relaxed regs are the key to driving e-payments growth, says CIB boss: The growth of digital accounts, such as mobile wallets, in Egypt will only be achieved through the continued deregulation of the system, CIB Chairman Hisham Ezz Al Arab said during a webinar hosted by the Institute of International Finance (IIF) on Thursday. According to Ezz Al Arab, the rate of uptake for new mobile wallets has soared over the past few months, during which regulations have been relaxed to encourage a shift away from cash transactions. One key change brought about by covid-19? Customers are currently not required to visit a bank branch in person with their national ID and sign a pile of paperwork, which has simplified the process immensely, Ezz Al Arab noted.

“People — not just the millennial generation — want a simple way to interact with their banks. They want a way to feel safe when performing transactions with their money,” Ezz Al Arab said, noting that relying on digital channels is the best way to achieve that sense of security, particularly as the banking sector has historically been the most trusted place for personal data storage. Another key feature of mobile banking channels is the low cost, he says. Small clients, who are traditionally “ignored” in favor of bigger players, tend to cost more to incorporate into the banking system than the profits they bring in, simply due to the paperwork involved.

Ezz Al Arab stressed that financial inclusion is not a gift, but rather a right for every citizen that the country should be able to afford efficiently and at a low cost. Mobile phones now provide the perfect channel to do so, particularly as the mobile penetration rate in Egypt is extremely high and reaches segments of the population that is typically unbanked, such as those who live in rural areas. “Devices are the solution for financial inclusion,” he said.

The small player is still not entirely incorporated: Ezz Al Arab also discussed the digital identity component of banking, saying that a person or business’ digital identity provides a holistic snapshot of the individual, including their behavior. On that note, he noted that banks are still lagging behind in understanding small businesses because banks typically handle these businesses in the same way they would a large corporate client, rather than by understanding the full identity. “Unless banks move their lending model from the traditional corporate lending to behavior-based lending, a small business will choose to access financing from a supplier or offtaker who understands them rather than a bank — even if the cost is higher,” Ezz Al Arab said.

DEBT WATCH- CIB, NBE, Banque Misr sign EGP 5 bn syndicated loan agreement to finance Alexandria Port multipurpose terminal: The National Bank of Egypt, Banque Misr, and CIB signed a EGP 5 bn syndicated loan agreement with state-owned Egyptian Group for Multipurpose Terminals (EGMPT) to finance the construction of a multi-purpose terminal in Alexandria Port, according to a cabinet statement. The remaining EGP 2 bn needed for the EGP 7 bn terminal will be provided by EGMPT’s majority shareholders: The Alexandria Port Authority, Suez Canal Authority, Holding Company for Maritime Transport, and Alexandria Container and Cargo Handling Company. The terminal’s construction is already in progress and is expected to be completed by the end of 2021, said Transport Minister Kamel El Wazir.

Mobile phone imports drop by half as consumers postpone electronics purchases: The value of mobile phone imports dropped 51.4% y-o-y in 1H2020 to USD 362.37 mn, down from USD 746.18 mn last year, according to Capmas figures cited by Al Mal. January saw the biggest y-o-y tumble in imports, dropping 95.5% from January 2019. Imports remained consistently below 2019 indicators from February through June due to weak consumer demand caused by covid-19. Many consumers have chosen to put off new electronics purchases during the pandemic due to rising household costs and inflation, Cairo Chamber of Commerce board member Mohamed El Mahdi said. The shuttering of foreign electronics and spare parts suppliers for some three months at the height of the pandemic also contributed to the slowed figures, El Mahdi added.

Expect imports to slow even more as two new surtaxes come into effect: The government imposed a 5% “development fee” on the total cost of mobile phones after tacking on VAT and other taxes, which the House of Representatives approved in May. Just two months later, the National Telecom Regulatory Authority (NTRA) slapped an additional 5% import fee on mobile phone imports. Retailers were preemptively concerned that the NTRA’s fees could cause sales to contract further.

STARTUP WATCH- AI startup Elves raised USD 2 mn from Sawari Ventures and other unnamed investors in the follow-on investment we noted last week, according to Menabytes. The value of the investment had not been disclosed at the time. The digital assistance platform has now raised nearly USD 5 mn in pre-series A funding. Elves had previously raised USD 2 mn from Emaar, Kauffman Fellows Syndicate, and Dubai Angel Investors.

Learn more about how Elves has been focusing on expanding its machine learning capabilities from our podcast, Making It, where we interviewed co-founders Karim El Sahy and his business partner (and wife) Abeer El Sisi. The episode is available on our website, on Apple Podcast and on Google Podcast.

STARTUP WATCH- Egyptian e-payments startup Kashier Payments has raised an undisclosed amount of funding from a group of investors in a seed round led by Glint Ventures, the company said in an emailed statement. The company will use the proceeds to expand its operations, grow its workforce, and introduce new products, the company said. Founded in 2017, Kashier Payments is an online payment acceptance service that provides businesses with a unified platform to make and accept payments to and from customers, vendors and partners.

CABINET WATCH- Cabinet grants Cairo Opera House an entertainment tax exemption as venues reopen: The Madbouly Cabinet has approved a request to exempt the Cairo Opera House from paying an entertainment tax levied on its venues in Cairo, Alexandria, and Damanhour between July and September 2020, according to a statement. Theaters and cinemas were allowed to open their doors in late June at a maximum 25% capacity when the government moved to gradually end the lockdown that had been in place since March.

Also approved in yesterday’s cabinet meeting: A draft law to set up a website that will offer a one-stop-shop to eliminate middlemen for those wanting to go on ‘Umrah pilgrimage trips.


Enterprise is available without charge — just visit our English or Arabic subscription page, depending on which edition you would like to receive. We give you just about everything you need to know about Egypt, in your inbox Sunday through Thursday before 7am CLT (8am for Arabic), and all we ask for is your name, email address and where you hang your hat during business hours.

Egypt in the News

Women’s rights are leading coverage on Egypt in the foreign press this morning. Deutsche Welle says Egypt’s #MeToo movement has been “stifled” after witnesses to the 2014 Fairmont [redacted] case were charged “with vague crimes.” The crackdown on female TikTok users also continues to receive coverage, with public radio program the World recapping the arrests of at least nine women this year for posting content deemed immoral.

Elsewhere, tourism and Ancient Egypt are getting some ink: The country’s usually-bustling tourism hotspots are bracing for a tough winter season as the covid-induced slump looks to continue, writes Reuters. Meanwhile, National Geographic looks at how King Tut’s grandparents oversaw during their 38-year reign a prosperous and largely peaceful empire from 1391 to 1353 BC and were focused on monument building and artistic expression.

Diplomacy + Foreign Trade

Topping diplomatic coverage this morning: Egypt isn’t happy with an interview Turkish Foreign Minister Melvut Cavusoglu gave to CNN Turk. Cavusoglu claimed during the interview that following the 30 June revolution “there was no transition period in Egypt,” which the Egyptian Foreign Ministry denounced as baseless and “totally unrealistic.”

Meanwhile, Kenya and Egypt are still in talks over the 25% customs duty Kenya said it could impose on some Egyptian exports, an unnamed government source told Al Shorouk. Press reports indicated last week that Kenya backpedaled on its earlier threat to leave the Comesa trade agreement and impose the tariffs.

Egypt out of the running for WTO director general job: Abdel Hamid Mamdouh, Egypt’s candidate to fill the World Trade Organization’s (WTO) director general seat, is no longer being considered for the position, Reuters reports. This comes after Mamdouh, along with Mexico’s Jesus Seade and Moldova’s Tudor Ulianovschi, failed to secure enough votes to make it into the final round.

El Sisi, EU Council prez talk economic cooperation, regional diplomacy: President Abdel Fattah El Sisi and European Council President Charles Michel discussed the dispute in the Eastern Mediterranean and the conflict in Libya during a phone call on Thursday, according to an Ittihadiya statement. El Sisi also talked US-Egypt relations and the Israeli-Palestinian conflict with World Jewish Congress President Ronald Lauder, according to a separate statement.

Egypt to resume bean exports, under conditions: The government has reportedly agreed to end its suspension of beans and legumes exports, provided authorities review export requests on a case-by-case basis, Ahmed El Basha, head of the Cairo Chamber of Commerce’s agricultural products division, which had been lobbying to lift the ban, tells Masrawy. The Trade Ministry introduced a ban on beans and lentils in March to ensure sufficient supply amid the pandemic that has disrupted global trade.

The Egyptian Exporters Association "Expolink" has launched a digital platform to promote and market its “Made in Egypt” products, Hapi Journal reports, citing a statement by board chairman Khaled El Miqati. Exporters will be able to use the platform free of charge for one year to facilitate to help them access new markets, he said.


First Wizz Air, Air Cairo flights land in Borg El Arab and Sharm El Sheikh airports

European budget airline Wizz Air’s first Milan-Alexandria flight landed in Borg El Arab Airport on Thursday, according to a Civil Aviation Ministry statement. Thursday also saw the first Air Cairo flight from Armenia land in Sharm El Sheikh Airport since the covid-enforced hiatus on flights. Wizz Air will run three weekly flights between Alexandria and Milan on Tuesdays, Thursdays, and Saturdays, and Air Cairo will operate three weekly flights between Armenia and Sharm El Sheikh.

Telecoms + ICT

Egypt internet speed climbs six spots in Ookla Speedtest Global Index

Egypt climbed six spots in Ookla’s monthly Speedtest Global Index to rank 91 out of 177 countries in fixed broadband speed. The average download speed is now 31.38 mbps. The CIT ministry had said earlier this year it is investing USD 1.6 bn to improve internet speed, with the aim of reaching 20 mbps by the end of 2020, and 40 mbps by the end of 2021.

Banking + Finance

Egypt’s Fawry mulls launching emerging tech investment arm in 2021

Egyptian e-payment giant Fawry is considering establishing a new company to invest in emerging technology startups and firms, CEO Ashraf Sabry told Al Mal. The company will complete feasibility studies for the venture this year, and decide on whether to launch in early 2021, Sabry added. Fawry has opted out of joining arms with Disruptech, a USD 25 mn fintech fund set up by former Fawry CEO Mohamed Okasha.

Who’s in the market for debt: Hassan Allam, Ezz Steel, GASCO

Hassan Allam Properties is seeking to obtain a EGP 1.6 bn loan to finance various real estate projects under development, Al Shorouk reports, citing unnamed sources familiar with the matter. The National Bank of Egypt has presented the company with a financing offer for the loan, the report adds.

Ezz Steel is looking to increase its loans with a banking consortium from EGP 5.8 bn to 6.5 bn in exchange for extending its repayment period from six to eight years, Al Shorouk reports, citing unnamed sources familiar with the matter.

The Egyptian Natural Gas Company (GASCO) is in talks with several local banks to borrow USD 200 mn for expansion works at its Western Desert Gas Complex in Alexandria, Al Shorouk reports, citing unnamed sources familiar with the matter.


CORRECTION- 20 September 2020

An earlier version of this story incorrectly stated that Hassan Allam Construction — a subsidiary of Hassan Allam Holding (HAH) — is seeking a loan from the National Bank of Egypt. The correct company is Hassan Allam Properties, which is not a subsidiary of HAH. 

The Market Yesterday

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EGP / USD CBE market average: Buy 15.69 | Sell 15.79
EGP / USD at CIB: Buy 15.69 | Sell 15.79
EGP / USD at NBE: Buy 15.71 | Sell 15.81

EGX30 (Thursday): 11,051 (-0.3%)
Turnover: EGP 1.5 bn (33% above the 90-day average)
EGX 30 year-to-date: -20.9%

THE MARKET ON THURSDAY: The EGX30 ended Thursday’s session down 0.3%. CIB, the index’s heaviest constituent, ended down 1.1%. EGX30’s top performing constituents were GB Auto up 3.4%, Pioneers Holding up 3.3%, and CIRA up 2.9%. Thursday’s worst performing stocks were Sidi Kerir Petrochemicals down 2.6%, Telecom Egypt down 2.4% and Ezz Steel down 1.7%. The market turnover was EGP 1.5 bn, and foreign investors were the sole net sellers.

Foreigners: Net short | EGP -158.3 mn
Regional: Net long | EGP +39.6 mn
Domestic: Net long | EGP +118.7 mn

Retail: 68.2% of total trades | 70.7% of buyers | 65.7% of sellers
Institutions: 31.8% of total trades | 29.3% of buyers | 34.3% of sellers

WTI: USD 41.11 (+0.34%)
Brent: USD 43.15 (-0.35%)

Natural Gas: (Nymex, futures prices) USD 2.05 MMBtu, (+0.29%, October 2020 contract)
Gold: USD 1,962.10 / troy ounce (+0.63%)

TASI: 8,337 (+0.32%) (YTD: -0.61%)
ADX: 4,510 (+0.12%) (YTD: -11.13%)
DFM: 2,320 (+0.86%) (YTD: -16.06%)
KSE Premier Market: 6,009 (+1.28%)
QE: 9,942 (+0.01%) (YTD: -4.64%)
MSM: 3,647 (-0.40%) (YTD: -8.38%)
BB: 1,436 (+1.23%) (YTD: -10.86%)

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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.

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-Sunday): Welcome Schools expo, Cairo Fair Zone, Nasr City.

21 September (Monday): Government to relax some of the restrictions on mass gatherings.

21 September-1 October (Monday-Thursday): EFG Hermes’ second Virtual Investors Conference.

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.

December: The 110th regular session of the Egyptian-Iraqi Joint Higher Committee will be held under the chairmanship of the prime ministers of the two countries

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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