Sunday, 11 October 2020

It’s a pleasantly quiet start to your post-long-weekend workweek

TL;DR

What We’re Tracking Today

Good morning, friends, and welcome to a new workweek. We hope your long weekend was as relaxing as ours was. It’s a light news day as we get back into the swing of things. Bonus: We have another long weekend the week after next as the nation observes the Prophet’s Birthday on Thursday, 29 October.

Set to dominate headlines this week: The IMF and World Bank’s (virtual) annual meetings, which kick off tomorrow and run until Sunday 18 October. The meetings, headlined “Supporting a Resilient Recovery,” will also focus on human capital, digital development, and poverty. Look for a coordinated response to covid-19 to be on the agenda.

Two chapters of the IMF’s carefully read World Economic Outlook are already out, covering the economic impact of “The Great Lockdown” and how to mitigate climate change. The WEO is typically published twice a year.

A two-day Regional Forum for Medical Insurance and Healthcare kicks off here at home today, where private and public sector players will gather to discuss health challenges amid the pandemic, according to Youm7. The forum is organized by the Insurance Federation of Egypt.

There’s just a week of campaigning left before voters go to the polls to elect a new House of Representatives. The campaign period will end next Sunday, 18 October — three days before expats from 14 governorates cast their ballots in the first round of voting on 21-23 October. The polls open for voters here at home on 24-25 October. Check out our calendar for a refresher on who votes when.

IT’S ALSO A BIG WEEK FOR: Gadget nerds. Apple will unveil as many as four new iPhones on Tuesday at its virtual “Hi, Speed” event, which you can stream live here. The business press is excited (WSJ | FT). Meanwhile, Nikon will until its much-awaited Z6 II and Z7 II mirrorless cameras on Wednesday — Nikon Rumors has an updated rundown on what you can expect.

And Fujifilm will unveil its X-S10 midrange mirrorless camera this week — it leaked over the weekend.

AND FOR SQUASH NERDS: The CIB Egyptian Squash Open kicked off yesterday and runs through Saturday at the New Giza Sporting Club and the Pyramids of Giza. It’s the first “platinum” level tournament since the PSA World Tour returned after a six-month break thanks to covid-19. Check out coverage on The Squash Site as well as the Egyptian Squash Federation’s site.


The Health Ministry reported 125 new covid-19 infections yesterday, up from 106 the day before. Egypt has now disclosed a total of 104,387 confirmed cases of covid-19. The ministry also reported 11 new deaths, bringing the country’s total death toll to 6,040. We now have a total of 97,643 confirmed cases that have fully recovered.

Covid has never gone away — we’re still in the first wave. That’s what Hossam Hosni, the head of the Scientific Committee to Combat Coronavirus, told talkshow host Sayed Ali, stressing that Egypt should look to the second wave now sweeping Europe as a warning. Hosni urged citizens to continue adhering to precautionary measures, especially as we head into flu season. While covid-19 has mutated to become less severe, he said, it is very contagious (watch, runtime: 5:54).

How bad are things in Europe? Grim enough that pundits are talking about the economic gains of this past summer now being erased. Canada is also in the midst of a second wave, with new restrictions coming into effect in Toronto, Ottawa and Peel.

No tourists visiting Egypt have tested positive for covid-19 in the past three months, according to Tourism Minister Khaled El Anany. Tourism has begun to slowly rebound since international flights resumed in July, with some 250k tourists visiting Sharm El Sheikh and Hurghada between July and mid-September.

Saturday marked the largest number of daily international and local flights operated by EgyptAir since the resumption of air travel, with 60 flights landing in 47 destinations, according to Youm7. This came a day after EgyptAir resumed flights between Alexandria and Dubai while also adding additional weekly flights to Muscat, Johannesburg, Kigali, and Entebbe. Meanwhile, Alexandria Airlines is set to resume flights between Cairo and southern Yemen this week, according to the National.

Citizens can now register their water meter readings online via an app to reduce footfall at customer service centers, according to a cabinet statement. The My Reading app is available in Arabic on Android and iOS. The Holding Company for Water and Wastewater had previously launched a separate app (Android | iOS) for online water bill payments, which was made available to residents of Cairo, Giza, Menoufia, Beheira, Kafr El Sheikh, Sohag, Alexandria, Red Sea, Matrouh, and South Sinai as a first phase and will be rolled out across the rest of the country in later stages.

The pandemic will likely push another 88-115 mn people — over 1.4% of the world’s population — into extreme poverty in 2020, setting us back to 2017-era levels of poverty, the World Bank said on Wednesday. The proportion of the global population living on less than USD 1.90 a day is expected to increase for the first time in two decades, hitting 9.1-9.4%. Pre-covid forecasts had the rate falling to 7.9% this year.

Meanwhile, the UN World Food Programme has been awarded the 2020 Nobel Peace Prize “for its efforts to combat hunger, for its contribution to bettering conditions for peace in conflict-affected areas, and for acting as a driving force to prevent the use of hunger as a weapon of war and conflict.”

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel will be announced tomorrow.

Davos 2021 won’t be held in Davos: The 2021 World Economic Forum (WEF) will take place in Lucerne, Switzerland instead of its usual hub Davos, the forum announced on Wednesday. The WEF had already been forced to push the summit to early summer due to covid-19 and announced last week that it will take place on 18-21 May in the lakeside town. A virtual “Davos Dialogues” meeting will take place during the week of 25 January.


HSBC thinks it’s time for a “great rebalancing” of investor portfolios, including moving away from government bonds and diversifying into commodities such as gold and inflation-linked bonds amid signs that the global recovery is starting to slow, CNBC reports, citing HSBC Global Asset Management’s quarterly outlook.

The US stock market’s biggest rally in three months has left analysts scratching their heads: The S&P 500 climbed 7.4% this past week, leaving observers struggling to explain the market’s buoyancy in the face of a pandemic and a presidential election, Bloomberg reports. Pundits have pointed to possible explanations, including an expected presidential victory for the Democrats, investors remaining in “buying mode” as equity purchases remain tried and true with stable yields thanks to Fed support, and indexes bouncing back from tech-led tumbles in September.

enterprise

Saudi’s sovereign wealth fund is looking to snap up an undisclosed stake in Abu Dhabi-based retailer Lulu Group and is in early-stage talks with founder Yusuff Ali, according to Hapi Journal, citing two sources close to the talks. One of the Middle East’s largest retailers, Lulu is already a significant investor in Egypt and plans to spend USD 1 bn to expand its operations here over the next three years.

US ELECTION WATCH- The Donald made his first public appearance yesterday since his covid-19 diagnosis, addressing supporters at the White House ahead of an anticipated return to the campaign trail this week, Reuters reports. King Cheeto’s physician said he is no longer a transmission risk, but stopped short of giving details of his current medical condition.

The second presidential debate between Trump and challenger Joe Biden has been scrapped after Trump balked at squaring off virtually, the AP reports.

Meanwhile, the White House-proposed USD 1.8 tn stimulus package fell flat at the House of Representatives, dashing hopes that Congress could pass aid before the November elections, reports the Financial Times. Despite almost doubling an amount Republicans proposed in late summer, the new package falls short of a USD 2.2 tn bill Democrats previously passed, leaving both camps unhappy, says CNBC.

enterprise

Meet Chris Khalifa, CEO and founder of Zooba, the first guest on season three of Making It, our podcast on how to build a great business in Egypt: Khalifa created Zooba with the aim of elevating Egyptian street food into a culinary export. With seven branches across Cairo, a New York outpost, and a franchise agreement to launch 20 branches in the GCC, the banker-by-training Khalifa turned an idea into a robust brand that has legs globally.

You already have a podcast player on your iPhone, or you can listen to the episode through our website (no download required). We’re also on Google Podcast | Anghami | Omny. Making It is on Spotify, but only for non-MENA accounts.

Enterprise+: Last Night’s Talk Shows

The airwaves were awash last night with coverage of President Abdel Fattah El Sisi’s inauguration of the Turathna handicraft exhibition, which features 620 artisans and entrepreneurs and more than 45 civil society organizations, Trade and Industry Minister Nevine Gamea told Kelma Akhira’s Lamees El Hadidi (watch, runtime: 8:05). The exhibition also has a pavilion dedicated to the government’s Upper Egypt development program, Local Development Ministry spokesperson Khaled Kassim told Al Hayah Al Youm’s Lobna Assal (watch, runtime: 9:45). Also taking note of the exhibition: Masaa DMC’s Eman El Hosary (watch, runtime: 5:50) and Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 14:56)

Businessman Salah Diab was released from detention yesterday following his arrest last month on charges he allegedly acquired the EGP 70 mn Queen Wooden Products Factory in 2013 in collusion with officials at the Suez Canal Bank, lawyer Farid El Deeb told Ahmed Moussa. Diab — the founder of Pico Group and Al Masry Al Youm newspaper — has had no connection with the company since 2013 and is therefore not responsible for the company’s alleged misuse of public land and building without licenses, El Deeb said (watch, runtime: 2:56).

GERD breakthrough soon? South Africa is still reviewing Egypt, Ethiopia, and Sudan’s reports on their last round of meetings on the Grand Ethiopian Renaissance Dam (GERD) but the three countries have not ceased diplomatic communication on the issue, Irrigation Ministry spokesperson Mohamed El Sibai told Hadrat Al Mowaten’s Sayed Ali. El Sibai separately noted that the flooding season should come to a close at the end of October, but may continue until mid-November since this year’s flooding was bigger than most years (watch, runtime: 5:27).

Speed Round

Inflation edges up slightly in September — but is still near record low: Egypt’s annual urban inflation accelerated to 3.7% in September, up marginally from 3.4% in August — the lowest level since 2005, according to calculations made from state statistics agency Capmas figures (pdf). Inflation has continued to ease over the past two months from 4.2% in July as food prices resume their decline on a monthly basis. Urban and rural food and beverage prices fell 3.5% y-o-y in September and 0.6% m-o-m.

The September reading is lower than what is typically expected, considering seasonal factors such as the reopening of schools, which usually drive monthly prices up 1% as schools reopen, Pharos head of research Radwa El Swaify told Enterprise. The annual headline rate is also well below the Central Bank of Egypt’s (CBE) inner band target of 6-12%, Elswaify points out.

The CBE is expected to release today the figure for September's core inflation, which strips out volatile items such as food and fuel. Annual core inflation increased to 0.8% in August, up from 0.7% in July. Core inflation recorded -0.2% on a monthly basis (compared with -0.4% in August 2019 and -0.1% in July).

Reminder: Too-low inflation could lead to IMF consultation: Economists suggested to Reuters last week that persistently low inflation figures could trigger consultations with the IMF later this year. Under the USD 5.2 bn stand-by facility Egypt had agreed to with the fund, authorities are to consult with IMF technical experts should the rate fall below 6% by the end of September, and with the executive board if it dips below 4%. The CBE is next scheduled to review interest rates on 12 November.

Foreign reserves inched upwards for the fourth consecutive month in September, rising to USD 38.43 bn from USD 38.37 bn in August, according to central bank figures released on Wednesday. The CBE has been consistently adding to its FX stockpile in the past four months, adding almost USD 2.5 bn after reserves dipped by some USD 10 bn during the height of the coronavirus-driven market panic earlier this year. Reserves declined to USD 36 bn in May from USD 45.5 bn in February after the central bank stepped in to cover portfolio outflows, debt repayments, and imports of commodities.

The government’s fuel pricing committee decided to leave fuel prices unchanged for the remainder of 2020, according to a cabinet statement. The decision, made at the committee’s final quarterly meeting of the year, leaves 95-octane at EGP 8.50 per liter, 92-octane at EGP 7.50, and 80-octane at EGP 6.25. Diesel remains at EGP 6.75 per liter while the price of mazut (heavy fuel oil) for factories will stay at EGP 3.9k per tonne. The committee decided against making changes to prices due to movements in global oil prices and changes in the USD-EGP exchange rate, the statement said. The price of Brent crude remained flat through 3Q closing marginally lower at the end of September, while the EGP gained more than 2% against the greenback during the three-month period.

The committee kept prices on hold when it last met in July, maintaining levels set following its EGP 0.25 cut in April. The fuel pricing committee was formed in 2018 and meets every quarter to review fuel prices, implementing a pricing mechanism which pegs prices to Brent crude and global exchange rates. The committee’s next meeting is scheduled for January 2021.

In related news, industries could also see their gas costs slashed by 10-20%, based on recommendations by a ministerial committee, Al Dostor reports, citing an Oil Ministry official. The committee reviews gas prices for factories every six months and has been under increasing pressure to reduce utility costs for industries in the wake of covid-19. Last month, government sources suggested gas prices could be lowered to at least USD 4/mmBtu from USD 4.50/mmBtu. The government had reduced prices twice in the past year: once last October and once in March as part of its stimulus measures to protect industry through the covid lockdown.

M&A WATCH– An unnamed Arab sovereign wealth fund is looking to acquire 75-100% of Ismailia Agricultural and Industrial Investments for as much as EGP 3 bn, the local press reports, citing sources close to the transaction. The fund is reportedly in the midst of due diligence and expects the transaction to go through by the end of the year.

Is there another bidder in the wings? Ismailia, which owns packaged meat and poultry brand Atyab, previously received an offer for a majority stake in its operations from UK investment fund Alta Semper for EGP 2.3 bn.

Look at this through the lens of food security in this time of covid: The domestic press says the Arab SWF is positioning the potential acquisition as a means of increasing Egyptian exports and supporting food security in both countries.

Egypt is among 18 countries facing almost USD 2 bn in combined US tariffs on aluminum sheet exports after an investigation determined products were being dumped in the US market. The US Department of Commerce found that the Aluminum Company of Egypt (better known domestically as Egyptalum) and other exporters have sold their products at a 10.42% discount. The Commerce Department has reportedly instructed US Customs and Border Protection to collect cash deposits from importers of aluminum from Egypt according to that rate. The tariffs come into effect immediately, but will be under review by the US International Trade Commission in February 2021.

The tariffs may not hit the industry too hard: Although Egyptian aluminum exports to the US have boomed in recent years — rising to USD 43.8 mn last year from just USD 47.5k in 2017 — they only account for 8% of Egypt’s global aluminum exports of USD 545 mn in 2019. The importance of the US as an export market has only lessened this year as covid-19 dealt a blow to foreign trade. A report by the General Organization for Export and Import Control picked up by Youm7 shows that the US accounted for only 1.2% of Egypt’s exports during the first seven months of the year after shipments plummeted 91%.

Background: The US launched its investigation into aluminum dumping last April after a petition filed by the US aluminum industry accused 18 countries, including Egypt, of the practice. Egypt has made its own moves to protect local production, launching an investigation into the potential dumping of aluminum imports after state-owned Egypt Aluminium began reporting losses.

Could we finally be approaching the end of the Damietta LNG saga? Talks have resumed between Union Fenosa Gas (UFG) and the Madbouly government that could potentially see the Damietta LNG plant reopen after eight years of inactivity, S&P Global reports, citing an Eni spokesperson. After a collapse in negotiations earlier this year, unnamed sources now say that the government has been pushing for “accelerated talks” to bring the facility back online following a five-year legal battle between the government and UFG — the joint venture between Eni and Spanish Naturgy — and a hiatus dating back to 2012 when the gas supply was shut off during political turbulence following the 2011 revolution.

What happened this year? The collapse in what was expected to lead to a breakthrough resolution between Naturgy, Eni, and the Egyptian General Petroleum Corporation (EGPC) came after a number of unspecified conditions outlined in a preliminary agreement in February were unmet. Covid-19 is likely a complicating factor. The agreement would have seen Naturgy exit its joint venture with Eni and pocket USD 600 mn for most of UFG’s assets outside Egypt. Naturgy’s equity in the facility would have seen the remaining three shareholders increase their stakes: Eni would own 50%, state-owned Egyptian Natural Gas Holding Company (EGAS) would take 40%, and EGPC would hold the remaining 10%. The agreement would have also resolved the USD 2 bn arbitration case brought by Naturgy against the government for cutting the gas supply, but the Spanish company U-turned following the collapse of the agreement, saying that it would continue to seek its 50% share of compensation.

The Damietta facility is a key component of our plan to become a regional natural gas hub: Liquefaction facilities at Idku and Damietta are both at the core of the government’s strategy to export LNG to Europe. Their continued closure presents a roadblock to exporting our natural gas bonanza, let alone to maximizing the potential of Israeli natural gas imports and the arrival of Cypriot natural gas from the Aphrodite field in the coming years.

LNG exports have collapsed through the pandemic: Egypt has only completed one LNG shipment since the onset of the pandemic as global spot prices collapsed to record lows of just 1.825/mmbtu in April — well below Egypt’s breakeven cost of just under USD 5/mmBtu. The situation may be finally beginning to abate: LNG price had risen above the breakeven price to 5.39/mmbtu as of 8 October, marking a potential opening for resumed exports. Shell and Total just last week committed to exporting 30 shipments of natural gas from the Idku liquefaction plant in 2021 worth a combined 4.5 mn cbm.

DEBT WATCH- Alexandria Petroleum going greener with USD 250 mn EBRD loan: The European Bank for Reconstruction and Development (EBRD) will provide state-owned Alexandria Petroleum Company (APC) with a USD 250 mn sovereign loan to partially finance USD 647 mn in water and energy efficiency upgrades at the company’s diesel refinery, according to an EBRD statement. The project will bring operations at the facility in line with European environmental safety standards and reduce emissions, the bank said. Raising the quality of fuel produced by the refinery will cut down on greenhouse gases, while the construction of a new wastewater treatment facility aims to lower the risk of seawater pollution and a new energy management system will help to reduce fuel consumption.

Speaking of development financing: The German Development Bank’s (KfW) Sanad Fund plans to grant a USD 30 mn loan to an unnamed local bank before the end of the year for on-lending to SMEs, Mohamed Morsy, Egypt manager of impact investor Finance in Motion, told Al Mal. Finance in Motion is a consultant to Sanad in Egypt. KfW is currently waiting for approval, Morsy said, without disclosing the name of the bank. The Sanad Fund has this year extended two USD 15 mn loans to Banque du Caire and the Export Development Bank of Egypt to on-lend to SMEs and agribusinesses.

enterprise

INVESTMENT WATCH- The European Investment Bank (EIB) is planning to commit USD 10 mn in equity to Egypt- and Jordan-focused Badia Impact Fund II, the EIB said in a press release. The venture capital fund, which has a USD 50 mn target size, will invest in “tech-oriented growth-stage” companies and SMEs across the EIB’s “Southern Neighborhood,” which includes Lebanon, Morocco, Palestine, and Tunisia. Emphasis, however, will be on innovative and high-growth startups and SMEs in Egypt and Jordan, the bank said.

Correction (11/10/2020): A previous version of this article incorrectly stated that Badia Impact Fund II invests in Israel.

STARTUP WATCH- Payroll management startup NowPay has raised USD 2.1 mn in seed funding from a group of Egyptian, US, UAE and Chinese investors led by Foundation Ventures and Endure Capital, according to a company statement (pdf). BECOCapital, 500 Startups, Plug and Play, 4dx Ventures, MSA Capital, EFG-EV Fintech, and Ebtikar also participated in the round. The funding will be used to enhance the company’s platform, grow its team and “establish its footprint in the MENA region and beyond.” NowPay, founded in 2019 to help employees manage their finances and organize advanced salary payments, last year raised USD 600k in a seed funding round led by Endure Capital and 500 Startups. The company now manages salaries “in excess of USD 100 mn with a 60% month-over-month growth rate,” according to co-founder and CEO Mostafa Ashour.

STARTUP WATCH- Disruptech to acquire minority stake in unnamed fintech startup: Former Fawry CEO Mohamed Okasha’s USD 25 mn fintech fund, Disruptech, will soon add a fourth startup to its portfolio year after closing a USD 500k investment in an unnamed fintech company by the end of October, Okasha told Al Mal. Disruptech earlier this year invested an unspecified six-figure sum in Egyptian startups Khazna and Brimore and led an investment round for e-commerce platform Fatura that raised over USD 1 mn. Disruptech is aiming to invest USD 5 mn in fintech startups in 2020 and USD 25 mn over the next five years.

Disruptech is planning to acquire minority stakes of 5-10% in 15-18 companies over the next three years as part of a three-stage investment strategy, Okasha said. Further financing would then be provided to its existing portfolio companies in the second stage of the fund’s strategy, which is expected to last up to two years. The third and final stage will see the fund exit from its investments.

STARTUP WATCH- CBE, state-owned banks found cash-management company: The Central Bank of Egypt (CBE) and state-owned Banque Misr, Banque du Caire, and the National Bank of Egypt have set up a new cash management company, EgyCash, to offer money transfer and ATM stocking services, according to a statement carried by Hapi Journal. The CBE will hold 35% of EgyCash, with the remaining stakes split between the three banks. The company will operate across the entire country, with a focus on rural and remote areas.

MOVES- Raya Holding has tapped Ahmed Khalil (LinkedIn) as the group’s CEO and managing director, according to a statement (pdf). Khalil has been with the group for 12 years, including five years at the helm of subsidiary Raya Restaurants and another four as CEO of Raya Smart Buildings.

Odile Renaud-Basso has been elected president of the European Bank for Reconstruction and Development (EBRD), succeeding Suma Chakrabarti, who stepped down in July after serving at the helm of the bank for eight years, the EBRD said in a statement. Renaud-Basso is currently the director-general at the French Treasury and will assume her new position later this year.

Ahmed El Khouly (Linkedin) has been appointed as the head of the treasury department at Egypt Post, according to Hapi Journal. El Khouly was previously the head of treasury at Ahli United Bank, the United Bank of Egypt, and the Housing and Development Bank.

The Holding Company for Mineral Industries has accepted the resignation of Egypt Iron and Steel’s chairman and members of the board and nominated Ali Bakheet as interim managing director, according to an EGX filing (pdf).

KUDOS- Our friends at Elsewedy Electric and Cleopatra Hospitals Group were named among the “Most Honored Companies” in Institutional Investor's 2020 emerging EMEA rankings. Elsewedy is ranked 3rd in the industrials sector, while CHG came in 2nd in the healthcare and pharma ranking.

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Image of the Day

Forget series B funding rounds and unspecified six figure sums for a moment: Here’s an Egyptian entrepreneur scouting his next move in the hustle and bustle of 1914 Cairo. Now that’s real grit. High definition restoration c/o: BabelColour.

Egypt in the News

Politics is the overarching theme in the foreign press’ coverage of Egypt this morning. Deutsche Welle picks up on sporadic demonstrations in rural areas in response to what it says are challenging economic conditions, while the Associated Press took note of the start of the trial of alleged serial [redacted] offender Ahmad Bassam Zaki, who was arrested during the summer after confessing to charges of serially blackmailing and abusing a number of women. Al Monitor, meanwhile, notes the recent carrying out of 15 death penalty sentences; 13 of the 15 were members of the terror organization Ajnad Misr.

Worth Watching

There are an estimated 14 mn metric tons of microplastics sitting on the ocean floor, and more than 35 times more floating on the ocean surface, CNN reports, citing a new study from Australia’s national science agency CSIRO. Microplastics form when plastic thrown into the ocean deteriorates and sinks to the floor, affecting deep ocean wildlife. Plastic pollution looks to only get worse, with an estimated 710 mn metric tons of plastic expected to pollute the environment by 2040, according to a study published in Science Magazine.

The solution (or at least part of it) … worms: Mealworms are able to digest and break down certain types of plastic components such as polystyrene and polyethylene while wax worms can degrade wax, according to Anja Brandon, a researcher at Stanford University. Mealworms get energy from breaking down the plastic components and eject the remaining chemicals, making them further useful in the feed industry where they are eaten by pigs and livestock. Brandon is trying to isolate the bacteria in mealworms’ stomachs that degrade plastics to scale them into bioreactors that can be used industrially, she explains in CNN’s Call to Earth (watch: runtime: 03:02).

Diplomacy + Foreign Trade

Topping diplomacy news this morning: Egypt’s maritime border demarcation agreement with Greece got signoff from President Abdel Fattah El Sisi yesterday, according to a decree published in the Official Gazette. The agreement, signed in August and ratified by the Egyptian and Greek parliaments, competes with a separate pact between Turkey and Libya last year for a joint maritime zone by expanding Greece’s territorial waters west into the Ionian sea. It led to a rift between Ankara and Athens, but both countries have been in talks recently to cool off tensions in the natural gas-rich area.

Also ratified by the president yesterday: A KWD 25 mn (c. USD 81 mn) facility from the Kuwait Fund for Arab Economic Development (KFAED) to fund the construction of a road that connects the tunnel running under the Suez Canal with Sharm El Sheikh.

Meanwhile on the trade front: Egypt’s citrus exports have fallen nearly 18% year-to-date due to trade disruptions caused by the pandemic. Head of the Central Administration of Agricultural Quarantine at the Ministry of Agriculture Ahmed Al Attar told Al Mal Egypt has exported some 1.4 mn tonnes of citrus fruits in 2020, compared to 1.7 mn tonnes during the same period last year.

Basic Materials + Commodities

Private sector buys 40k qintars of cotton under new auction system

Private-sector companies bought nearly 40k qintars of cotton since the launch of the state’s new auction-based cotton trading system, which began on 15 September and will end on 15 December, cabinet said in a statement. Companies from the private sector won all auctions held in Fayoum, Beni Suef, Beheira, and Sharqia since early September. The average selling price for the crops was EGP 1,805 per qintar in Beni Suef and Sharqia and EGP 2,050 in Fayoum.

Manufacturing

Arafa Holding’s UK subsidiary signs license agreement with Ted Baker

Arafa Holding’s UK subsidiary Baird Group has signed a license agreement with British luxury clothing company Ted Baker to manufacture and distribute menswear for three years in the UK, Europe and other markets, the company said in an EGX filing (pdf). Baird Group, which operates in 48 retail stores and 147 concessions in the UK and Europe, entered voluntary insolvency procedures in July due to poor retail sector conditions which were exacerbated by covid-19. The corporate voluntary agreement was approved by creditors in August.

Automotive + Transportation

Egypt in talks with Spanish lenders for USD 160 mn loans to buy sleeper trains

Egyptian National Railways (ENR) is in talks with unnamed Spanish lenders for a USD 160 mn loan to purchase six new sleeper train cars, Al Shorouk reports, quoting an unnamed source. The funding is part of a plan by ENR subsidiary Watania Sleeping Trains to overhaul sleeper trains in Egypt. Watania operates 101 sleeper train cars, most of which need upgrades.

Banking + Finance

FRA approves Americana’s EGX delisting

Americana Egypt’s request to delist 400 mn shares from the EGX has been approved by the Financial Regulatory Authority’s (FRA) Securities Registration Committee following its purchase by Adeptio, the local press reports. The company is now authorized to gradually delist shares from the EGX in one week intervals until 31 January, 2021. Americana Egypt is transferring ownership to the Emirati outfit, which last month purchased the 9.6% of the company that it did not already own at EGP 6.32 per share in a mandatory tender offer.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.66 | Sell 15.76
EGP / USD at CIB: Buy 15.65 | Sell 15.75
EGP / USD at NBE: Buy 15.67 | Sell 15.77

EGX30 (Wednesday): 11,327 (+1.6%)
Turnover: EGP 1.6 bn (42% above the 90-day average)
EGX 30 year-to-date: -18.9%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session up 1.6%. CIB, the index’s heaviest constituent, closed up 2.0%. EGX30’s top performing constituents were Heliopolis Housing and Development (+6.1%), GB Auto (+6.0%), and Sodic (+4.6%). Wednesday’s worst performing stocks were Elsewedy Electric (-2.5%), Porto Group (-0.6%) and Egypt Kuwait Holding (-0.4%). Market turnover was EGP 1.6 bn and regional investors were the sole net buyers.

Foreigners: Net Short | EGP -3.0 mn
Regional: Net Long | EGP +56.7 mn
Domestic: Net Short | EGP -53.7 mn

Retail: 77.3% of total trades | 79.8% of buyers | 74.9% of sellers
Institutions: 22.7% of total trades | 20.2% of buyers | 25.1% of sellers

WTI: USD 40.60 (-1.43%)
Brent: USD 42.85 (-1.13%)

Natural Gas: (Nymex, futures prices) USD 2.74 MMBtu, (+4.34%, November 2020 contract)
Gold: USD 1,926.20 / troy ounce (+1.64%)

TASI: 8,412.55 (+0.64%) (YTD: +0.28%)
ADX: 4,512.51 (+0.40%) (YTD: -11.10%)
DFM: 2,214.32 (+0.07%) (YTD: -19.91%)
KSE Premier Market: 6,372.82 (+0.75%)
QE: 10,032.13 (+1.00%) (YTD: -3.77%)
MSM: 3,604.21 (-0.11%) (YTD: -9.47%)
BB: 1,458.41 (+0.62%) (YTD: -9.43%)

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Calendar

October: Trade and Industry Ministry allocates SMEs seven industrial complexes.

10-15 October (Saturday-Thursday): Turathna 2020 exhibition for traditional handicrafts, Egypt International Exhibition Center, Nasr City, Cairo.

11-12 October (Sunday-Monday): Regional Forum for Medical Insurance and Healthcare, Cairo, Egypt.

12 October (Monday): The Egyptian Iron and Steel company general assembly would discuss demerging its mining and quarrying unit and restructure the company’s board of directors

12-18 October (Monday-Sunday): 2020 Virtual Annual Meetings of the International Monetary Fund and the World Bank Group.

10-17 October (Saturday-Saturday): CIB Egyptian Squash Open, New Giza Sporting Club / Pyramids of Giza.

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

18 October (Sunday): A court will hold a postponed hearing to look into an unpaid claims lawsuit by Syria’s Antradous against Mansour Amer’s Amer Group and Porto Group.

18-22 October (Sunday-Thursday): The annual Cairo Water Week event — which will be semi- virtual this year — will be held under the slogan “Water Security for Peace and Development in Arid Regions”

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.

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

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.

19-28 November (Thursday-Sunday): Cairo International Film Festival, Cairo Opera House, Egypt.

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.

December: IMF delegation visits Egypt to in first of two reviews ahead of disbursement of second tranche of USD 5.2 bn SBA.

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).

5 December (Saturday): A court will hold a postponed hearing to look into an appeal by Syria’s Anataradous against an arbitration ruling in favor of Amer Group and Amer Syria.

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.

9-10 December (Wednesday-Thursday): BiznEx, the international business expo in Egypt, venue TBD.

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.

25-29 January 2021 (Monday-Friday): The World Economic Forum’s “Davos Dialogues” will take place virtually

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.

6-18 February (Saturday-Thursday): Mid-year school break.

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).

18-21 May 2021 (Tuesday-Friday): The World Economic Forum’s annual meeting will be held under the theme of “The Great Reset” in Lucerne-Bürgenstock, Switzerland

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.

24 June 2021 (Thursday): End of the 2020-2021 academic year.

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).

1 October 2021-31 March 2022 (Friday-Thursday): Postponed Expo 2020 Dubai.

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