Article IV consultations with the IMF are due to kick-off tomorrow in Cairo. The Sisi administration hasn’t asked for an IMF assistance package — indeed, the reforms already implemented exceed in many ways the IMF’s previous minimum ask — but has certainly appreciated the IMF’s acknowledgement that something is changing on the banks of the River Nile.

Is Egypt’s proposed commodities hub not yet ready for prime time? A well-reported Reuters piece by Maggie Fick says a meeting last week with senior government officials left industry players with significant open questions. Industry players are calling on Supply Minister Khaled Hanafi to release or commission detailed feasibility studies, noting the meeting last week didn’t involve so much as a PPT deck: “Industry insiders were not opposed to the idea of Egypt processing and storing more grain, but they said creating a mercantile exchange was more complicated and would fail unless the government could convince traders to take part. … the minister did not provide technical studies, a powerpoint presentation or even a map at last week’s meeting. He just asked for their support.”

LAST NIGHT’S TALK SHOWS

Last night was a slow on the talk-show front as several channels preempted their regularly scheduled programs to broadcast the opening ceremony of the Cairo International Film Festival live from the Citadel.

Notable on last night’s abridged lineup was OnTV’s Youssef El Housseiny, who hosted structural engineering expert Dr. Nabil Grace, the Director of the Center for Innovative Materials Research at Lawrence Technological University, near Detroit Michigan. Grace is among a group of renowned Egyptian scientists, most of whom reside abroad, who form President Abdelfattah El-Sisi’s Advisory Board of Egyptian Scientists. Grace discussed the Board’s Sunday meeting with Al-Sisi during which they presented recommendations on various topics including education, energy, infrastructure development and scientific research.

“Egypt is fortunate to have a President like Al-Sisi. The fact that he would dedicate so much time to a meeting like this is indicative of his genuine drive to see this country move forward,” said Grace.  “We are all extremely happy to be here so that we may be of value to our country and I have the utmost confidence that Egypt will achieve great things.”

Other participants on the Scientific Advisory Board include Ahmed Zuwail, Magdy Yacoub, Mohamed El-Erian, Farouk El Baz and Mohamed Ghoneim.

Amr Adeeb covered a variety of topics including rumors about the alleged air strike that may have wounded or killed Daesh leader Abu Bakr Al Baghdadi. Never missing an opportunity to take a stab at the Muslim Brotherhood, Adeeb pointed out that the airstrike (if it was real; the report remains unconfirmed) was a result of Daesh members selling each other out.

“Betrayal is nothing to them — Daesh, Ikhwan, anybody with a beard. They would sell out their own mothers if it suited their purposes. I know plenty of Brotherhood leaders by name that have struck deals with the government, turning in other members in exchange for their freedom. This is how they operate,” said Adeeb.

Also on Adeeb’s list of worries and grievances last night was the Minister of Local Development’s announcement that new electoral districts for Parliamentary elections will be announced within this week for the upcoming election, which will take place next March.

“I think we are about to witness the strangest elections in the history of the world,” said Adeeb.

SPEED ROUND

The EGX30 was down 0.5% yesterday to 9,373 on EGP 533 million in total turnover, about 26% off the 90-day average, as local investors locked in profits, sending blue chips down. KSA’s Tadawul and the Kuwait Stock Exchange each gained 0.4%, Qatar was up 0.7%, DFM added 1.1% and ADX was the big winner of the day, advancing 1.6%.

EFG Hermes, Barclays and Bank of America are said to be advising Nassef Sawiris and OCI NV on the dual listing of OCI’s construction business on the EGX and Nasdaq Dubai, Bloomberg’s Dinesh Nair and Sarmad Khan reported late last night. The listings, which could go ahead as early as 1Q15, would be under the name Orascom Construction Ltd.; the new company would hold all of OCI’s construction assets and its 50% stake in BESIX Group.

Oman is hosting America and Iran for a second, unscheduled day of nuclear talks ahead of the 24 November deadline for a “comprehensive” accord on Iran’s nuclear ambitions. US Secretary of State John Kerry and Iranian Foreign Minister Javad Zarif are both hands-on in Oman for the talks.

For more on Oman, go read “Silent Partner: How Oman Became the Middle East’s Indispensable Nation” in Foreign Affairs, which concludes with a call for the Sultan to make clear where his health stands: “Ultimately, it is Qaboos’ task to continue his decades-long record of responsible leadership by being transparent about what lies in store in the immediate future.” (Warning to non-subscribers: This will consume your one free article per month on the Foreign Affairs site).

WaPo’s editorial board may not love Egypt, but the newspaper certainly has something for the UAE. In a feature-length piece on the alignment of the UAE’s military and geopolitical interests with those of the United States, Rajiv Chandrasekaran (a senior correspondent and associate editor for the Washington Post who was previously bureau chief in Cairo) quotes the always-well-spoken Youssef Al-Otaiba thusly: “‘We’re different from our neighbors,’ said Yousef al-Otaiba, the UAE ambassador in Washington, who noted that his country has participated in every major U.S.-led coalition since the 1991 Persian Gulf War — save for the 2003 invasion of Iraq — joining Americans in Somalia, Kosovo, Libya and Afghanistan in addition to the ongoing air campaign against the Islamic State. ‘We’re your best friends in this part of the world,’ he said.” Read “In the UAE, the United States has a quiet, potent ally nicknamed ‘Little Sparta’”

Stunning images show 8,000 lit-up balloons at night demarcating the old division between former East and West Germany to mark the 25th anniversary of the fall of the Berlin Wall (Go read BBC)

The latest challenge to national union in the EU on the heels of the Scotland referendum comes in the form of an informal straw poll indicating that over 80% of Catalans want a referendum on independence from Spain, with 50% favoring secession (Read More)

صفحة الحوادث
(Editor’s Note: The “Crime Page” is a staple of the Egyptian press)

Qatar: It is unclear what more needs to happen to have the travesty that is the 2022 FIFA World Cup see a change of venue. Will the revelation over the weekend by The Guardian that North Korean slaves are being used to the build the World Cup facilities? Probably not. (Read More)

Turkey: Speaking of useless things, Erdogan has recently inaugurated his new 1,000-room palace built at a cost of USD 615 mn. USA Today points out this is equal to the cost of curing Ebola on a global scale. Pope Francis is scheduled to be the first guest received at the palace at the end of the month, in what one would hope would be an exorcism. (Read in USA Today and Vatican Insider)

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Net cost of Egypt’s energy subsidies stood at EGP 46 billion in 2013/2014, it seems, in first breakdown of this type we recall having seen
Al Masry Al Youm | Online – News | 09 Nov 2014
In what seems to us as somewhat surprising news, Egypt’s Minister of Finance Hany Dimian was quoted in Al Masry Al Youm saying that the net energy subsidies his ministry incurred during the fiscal year 2013/14 stood at EGP 46 bn. While the MOF effectively expensed a total of EGP 126 bn in energy subsidies on its budget, total income received from the petroleum sector in the form of income & sales taxes, customs and concession fees reached EGP 80 bn, EGP 50 bn of which were from the Egyptian General Petroleum Corporation (EGPC). This is particularly interesting as it is the first time we’ve seen energy subsidies reported on as a net figure and raises the question of how much would net energy subsidies be if revenues of the state-owned EGPC are factored in and not just their taxes. (Read)

OIL & GAS

Shell to confine new activity to Western Desert, will test ‘fracking’ in Egypt in test run with Apache
Daily News Egypt | Business | 09 Nov 2014
Shell Egypt Chairman Jeroen Regtien said at the Shell Technology Leadership Conference, held on Friday in Hurghada, that “Shell will not apply to any tenders for research and exploration in areas other than the Western Desert.” Shell Egypt received a concession for gas exploration in the Mediterranean 11 years ago, but was unable to find sufficient quantities to achieve material returns to cover investment expenditures in the research and exploration operations. The company abandoned the concession and returned it to the Egyptian government. In other company news, this month Shell will begin conducting a “mini experiment” to produce shale gas [Enterprise notes: hydraulic fracturing, if we’re reading this correctly] in the Apollonia region in the Western Desert in cooperation with Apache using advanced US technology to carry out the operations, according to Regtien. The shale gas project will run “2-3 years,” the chairman said. (Read)

MANUFACTURING

Oriental Weavers targets USD 14 mn in exports to Africa
Al Mal News | Online – Stocks & Companies | 09 Nov 2014
Oriental Weavers announced that it aims to penetrate new markets and boost sales in markets where it already has a presence. In a press release issued on Sunday, the carpet manufacturer stated that it hopes to boost its African export sales to USD 14 mn over the coming few years. (Read)

REAL ESTATE

Palm Hills reports 152% surge in 3Q net income, brings on subsidiary of UAE soverign wealth fund as investor
Reuters, EGX | Online | 09 Nov 2014
Leading real estate developer Palm Hills Developments reported a 152% jump in 3Q14 net profits to EGP 129.7 mn, propelled by a spike in sales, Reuters write yesterday. The wire service, among multiple other media outlets, also took note of the UAE’s Aabar Investments having taking a 5.1 stake in PHD, as disclosed in a statement to the EGX. Reuters pegged the value of the investment at c. EGP 285 mn, noting that “Aabar, a subsidiary of the United Arab Emirates’ sovereign wealth fund [IPIC] and run by the Abu Dhabi government, will have a representative on the board.”

PHD noted in a statement that “It is anticipated that Aabar will become a significant minority shareholder and will also aim to create value for Palm Hills Development by leveraging and building upon Aabar’s already sizable global portfolio of companies and relationships.”

IPIC recently entered a partnership with Nassef Sawiris to build a coal-fired power plant at a cost of c. USD 2.5 bn. (Read Results in Reuters, Aabar in Reuters,Results filing to EGX (PDF), Filing on Aabar to EGX (PDF))

BANKING

Credit Agricole’s profits fall 10% in 9M 2014
Amwal Al Ghad | Online – Money Markets | 09 Nov 2014
Credit Agricole reported a 10% dip in 9M14 earnings to EGP 457.2 mn compared with EGP 516.9 mn in same period in 2013. (Read)

NBE to raise its capital to EGP 17 Billion
Shorouk News | Print – News | 09 Nov 2014
The National Bank of Egypt (NBE) is planning to raise its issued and paid-in capital to EGP 17 billion from the current EGP 9.2 billion by utilizing its retained earnings, the bank’s executive committee member Hussein Refai was quoted saying in Egyptian daily Shorouk. It is worthy to note that NBE’s total equity stood at EGP 26 billion as of June 30, 2014 against a loan portfolio of EGP 114.7 billion and total assets of EGP 366.6 billion. The share capital increase would add to the bank’s ability to partake in the Egyptian government’s planned mega projects earmarked for the coming period.

Only Yemen ranks below Egypt in MENA financial inclusion league table; CBE deputy gov calls for greater financial inclusion
Al-Masry Al-Youm | 07 Nov 2014
A deputy governor of the Central Bank of Egypt noted at an electronic payments conference held last week in Cairo that greater financial inclusion will be difficult to achieve in Egypt under current market conditions. Gamal Negm made the remarks in a wide-ranging keynote address he delivered on behalf of Governor Hisham Ramez.

While not cited by Ramez or Negm, Enterprise notes that only 10% of Egyptians have access to the formal banking system and that less than 4% of Egyptians took a loan from a financial institution in 2011. On average, 24% of adults in low-income countries globally have accounts at banks or other financial institutions. Only Yemen ranks behind Egypt in MENA, per World Bank league tables. (Read story in Al-Masry Al-Youm, read World Bank League Table or Check World Bank database)

Raya chooses Beltone as IPO advisor for contact center
Al-Borsa | 09 Nov 2014
Al-Borsa newspaper cites unnamed sources as saying that Raya intends to list 20% of its wholly-owned subsidiary Raya Contact Center on EGX in an EGP 50 mn IPO, with Beltone Financial acting as financial advisor. The IPO would be likely concluded in 3Q 2015.

MERGERS & ACQUISITIONS

SEIG looks into action plan concerning mandatory tender offer verdict of Arab Dairy Products Company
Al Mal | Online – News | 09 Nov 2014
The Egyptian Saudi Investment Company (SEIG) will meet to look into its options concerning the verdict made by Egypt’s economic court that enforces a mandatory 100% tender offer of the Arab Dairy Products Company, reported sources to AL Mal. SEIG is considering all options including an appeal, an exit, selling part of its stake in the company or fully acquiring the company. It is worth noting that several companies had showed strong interest in acquiring a stake in the Arab Dairy Products Company, including Pioneers holding, which filed the lawsuit against SEIG for exceeding their maximum allotted share in the company. (Read)

OTHER BUSINESS NEWS OF NOTE

1 million feddans to be reclaimed, zoned for low-income housing
Al-Shorouk | 7 Nov 2014
“The ministry has developed a blueprint to illustrate ways of setting up integrated communities with complete services,” said Minister of Housing Mustafa Madboulion Friday, noting that the state has identified 1,158,000 feddans of land that can be re-zoned and developed as affordable housing in 10 areas, including Toshka and Abar, Toshka and Farafra, New Farafra, Sharq Al-Owainat, the Southeast part of Qattara, western Minya, Al-Maghara, East Siwa, and West Kom Ombo. (Read in Arabic)

Heikal calls for “Higher Council for Investments” to address investor gripes
Youtube, Al-Shorouk, Youm7 | Online – Video | 8 November 2014
Al-Tahrir tackled Egypt’s economy on the program “Salon Al-Tahrir,” where the program anchor Abdullah Al-Sannawy hosted a number of economic experts including Qalaa Holdings Chairman Ahmed Heikal. Among other issues, Heikal called for the establishment of a Higher Council for Investment that should be lead by the president Abdul Fattah El-Sisi and would be in charge of eliminating obstacles faced by investors, in light of an inefficient administrative bureaucracy. Heikal also called for a more hands-on and consistent approach to relations with Africa.

OCI to donate LE2.5 bln to “Long Live Egypt” fund
Arab Finance | News | 09 Nov 2014
Orascom Construction Industries (OCI) Chairman Nassef Sawiris said he has asked the Ministry of Finance to transfer EGP 2.5 bn (originally paid by OCI to the government as part of a tax settlement that has since been resolved in OCI’s favor) to the Long Live Egypt fund. (Read)

Kuwaiti investors threaten Egypt with lawsuit over land, accuse government of “lack of seriousness”
Daily News Egypt | Business | 09 Nov 2014
Kuwaiti investors who own 26,000 acres of land in Ayat, Giza, intend to file suit against Egypt in international courts. The International Holding Projects Group, which represents with its subsidiary companies the main contributor to the Kuwaiti side of the project, said that the consortium has decided to file an international suit against because of “unjustified disruption…and lack of seriousness” on the part of successive governments to resolve the fate of the Ayat area. The dispute dates back to 2002. (Read)

EGYPT POLITICS + ECONOMICS

Ratings agency Fitch to send delegation to Cairo by month’s end
Al-Mal | 06 Nov 2014
A team from Ratings agency Fitch will descend on Egypt late this month to begin a review of the country’s credit rating, scheduled to be published by year’s end. Fitch in June confirmed Egypt’s B- long-term rating with a Stable outlook. The next month, the agency noted that the Sisi administration’s fuel price hikes under the subsidy reform program were “positive” for the country’s credit profile. Meanwhile, Standard & Poor’s wrapped up a visit to Egypt last week for its similar review. (Read July Fitch note on subsidy cuts or Al-Mal in Arabic)

Egypt, worried about turmoil in Libya, joins the fray
The Christian Science Monitor | World | Middle East | 09 Nov 2014
Egypt is watching nervously as fractured Libya continues its descent into chaos, The Christian Science Monitor reports, and has been providing support to a renegade general fighting Islamist militias in that country. Egypt fears trouble along its nearly 700 mile border with Libya, as well as the potential for disaffected Egyptians to hone their skills in militant camps in its tumultuous neighbor. As Libyan factions war, Egypt, which promised not to intervene militarily, is joining Gulf allies in providing a mixture of public and covert assistance to favored groups. (Read)

Egypt rights groups fear government crackdown looms
Voice of America, Reuters | 09 Nov 2014
Some Egyptian human rights groups shredded documents on Sunday and instructed their staff to stay home as a government deadline approached for them to register under a Hosni Mubarak-era law they say seeks to shutter them. Egypt’s government says groups doing the work of non-governmental organizations (NGOs) but not registered as such must correct their status by Monday to comply with a 2002 law it is enforcing while it works on new legislation for the sector. Human rights groups say the push to enforce the old law aims to restrict their activities and funding, raising concerns that President Abdel Fattah al-Sissi’s government is rolling back freedoms won in the 2011 uprising that ousted Mubarak. (Read)

ON YOUR WAY OUT

The most disorganized profession rebels: Calling it “illegal” and “unconstitutional,” the Journalists’ Syndicate denounced a decision by the editors of seven independent newspapers to investigate how to form a private an industry association for privately-owned newspapers. Participants in the meeting included Al-Watan, Al-Masry Al-Youm, Al-Youm Al-Sabea, Al-Bawabah News, among others.

University student was not arrested for carrying a copy of 1984 — contrary to the assertion of Al-Masry Al-Youm. See an English translation of the story in AMAY’s Egypt Independent and then check out this Facebook post (via @checkdesk on Twitter)

Egypt, Greece, Cyprus pledge to boost energy cooperation, says Reuters, recapping a weekend of diplomatic activity (covered in detail in yesterday’s Enterprise)

Sphinx area re-opens to tourists: “Egypt will soon open to tourists the courtyard in front of the Sphinx, the colossal monument which has been under restoration for nearly four years, officials said on Sunday.”

Clampdown on satellite broadcasters in the offing? PM Ibrahim Mehleb met yesterday with the ministers of communications, justice and foreign affairs, as well as regulators, to discuss how to handle channels that “broadcast material which could harm Egypt’s system of values and traditions … and its religious beliefs.”

Egypt Crowned New World Champion in Karate: Egypt has been crowned as the new World Championship team after winning three gold medals, two silver medals and one bronze at the 22nd Karate World Championships in Bremen.”