No elections until September, it seems. Naguib Sawiris testifies on behalf of AJE journos. USD 6 bn in GCC deposits arrive. Islam El Behery off air. Arabtec talking to banks on 1 mn homes project. Factories can’t import their own natural gas — yet. Nile Ritz Carlton to open next month.
WHAT WE’RE TRACKING TODAY
The World Green Economy Summit closes today in Dubai. Visit the official website here.
Also taking place today is the CBE’s Monetary Policy Committee meeting.
WHAT WE’RE TRACKING NEXT WEEK
28-29 April (Tuesday-Wednesday): MESIA Renewable Energy Trade Mission, Marriott Palace Hotel, Zamalek, Cairo. Registration details may be found here.
LAST NIGHT’S TALK SHOWS
The usual misery that is Wednesday’s talk shows was broken by an extended telephone interview between Al Kahera Al Yawm’s Rania Badawi and the controversial Islamic researcher Islam El Behery, who claimed that Al Kahera Wel Nas has chosen not to broadcast two new episodes of his program that were scheduled to air on Tuesday and Wednesday nights.
“Although I have not been notified of any official decision from the station’s management, I think the message is clear,” said El Behery. “There are 46 different lawsuits that have been filed against me, which must mean that I am more of threat to society than Daesh. Of course, I am much worse because I have used my mind and that’s a huge crime. Is this the freedom of expression that we hoped for after the 30th of June?”
Badawi pointed out to El Behery that it is not only Al-Azhar that is against him, but also many well-respected writers and religious authorities who disagree with his views.
“That’s fine, I have no problem with anyone who disagrees with my point of view, but just because you disagree with me doesn’t mean I should be silenced. Azhar is not the only religious authority in the country.”
Badawi retorted that: “We are a culture that cherishes its religion therefore your attack on our religious heritage is not going to be well received by many segments of the population. Couldn’t you have approached this in a different way that doesn’t directly insult the vast majority of Muslims in this country? There are people who are criticizing not what you say necessarily but how you say it,” said Badawi.
“I have said it before and I will say it again: I have never insulted the Qur’an, the Prophet or the sahaba. I am just trying to purify our religious literature of some of the catastrophic texts that are the cause of the terrorism that we see today. If you want to keep your heritage and keep Daesh, then good luck.”
El Behery then launched into a long tirade on how well-known books written by significant historical figures in Islam promote extremist thought and justify killing.
“If you put new covers on these books and put any random person’s name as the author, I guarantee you that any judge who reads the book will sentence its author to life in prison as he will be deemed a terrorist. Why are you angry with Daesh? They are simply following what is in these books. They are not misinterpreting anything but rather following it to the letter. This is the truth and Al-Azhar can no longer hid it. I have exposed them. People are no longer following blindly, they are reading, sharing and discussing. Game over,” said El Behery.
Shortly after El Behery went off air, Badawi read a statement from Al Kahera Wel Nas which said that El Behery’s program has been taken off air to preserve unity between Muslims and out of respect for Sheikh Al-Azhar and the wishes of the Egyptian people.
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SPEED ROUND
Egypt receives USD 6 bn from Saudi Arabia, UAE, Kuwait -Ramez: CBE Governor Hisham Ramez confirmed to Reuters on Wednesday that USD 6 bn in deposits have been received from Saudi Arabia, the UAE and Kuwait, with interest of 2.5% and maturities from 3-5 years. (Read in Reuters)
No elections before Ramadan -Parliamentary Affairs Minister: Parliamentary Affairs Minister Ibrahim El-Heneidy said on Wednesday that due to technical and security issues, parliamentary elections will not be held before Ramadan. “We are back to square one again and I do not expect the poll to be held anytime soon ahead of the holy Islamic month of Ramadan [which is scheduled to begin on 18 June],” Heneidy told reporters on Wednesday., as reported by Ahram Online. (Read)
Egypt solar lobby joins industry associations from 12 other countries to form international advocacy group: “The Global Solar PV Council, due to start by the end of the year, will allow ‘an exchange of experience, best practices and a global representation of interests,’ David Wedepohl, a spokesman for Germany’s BSW-Solar lobby, said Tuesday by e-mail to Bloomberg.” (Read in Bloomberg)
Arabtec confirmed yesterday it has engaged in talks with “with several local and international banks on financing the first phase of its project to build one mn housing units in Egypt,” Reutersreports. As concerns about the contract remain, Arabtec sent an official statement (pdf) to the DFM saying the company is “confident that the appropriate financing will be obtained according to the best conditions in fulfillment of the best interests of the Company and its shareholders” and that Arabtec reconfirms it will be signing a final contract for the first phase of the project with NUCA “at the earliest opportunity.”
No deals to import natural gas for industrial use, IDA says. No factory has yet been given the green light to directly import its own natural gas, says Industrial Development Authority head Maj. Gen. Ismail Gaber in what could be a veiled reference to the Dolphinus, which has proposed to reverse the Arish-Ashkelon pipeline. The IDA notes that it is responsible for providing existing factories with energy, but added that it has “a new vision” for factories that will be established in the future. IDA’s head noted that gas suppliers always notify factories before cutting supplies off. (Read in Arabic)
Stratfor produced a short analytical piece about Egypt’s natural gas sector, premised on the fact that “[Egypt’s] sluggish gas production in recent years has not been caused by a lack of reserves, but by price.” Given the low price Egypt paid IOCs for gas and having most of the reserves located in deep-water fields in the Mediterranean “the costs of producing Egyptian gas usually outweigh the revenues international oil companies make when Cairo forces them to sell the gas on the Egyptian market.” As financial terms and debt repayments were improved the amount of energy projects being sanctioned were increased. Stratfor believes the country will continue to need extra imports, suggesting that imports via pipelines from Israel and Cyprus present a more feasible solution than LNG cargoes. However, the piece fails to mention the bureaucratic hurdles hampering the Israeli gas sector and the lack of solid discoveries in some of the blocks of Cyprus’ EEZ.
Naguib Sawiris testified on behalf of former Al Jazeera journalists Mohamed Fahmy and Mohamed Baher during their retrial yesterday. Sawiris served as both character witness and ‘journalism explainer’ for the trial despite the objections of prosecutors. The trial has been adjourned to 28 April. (Read ‘Egypt’s top businessman Naguib Sawiris testifies at al-Jazeera trial‘ in The Guardian)
Investment Minister Ashraf Salman makes a bold assertion in the Wall Street Journal’s Frontiers blog, saying with regards to Egypt’s bureaucracy: “When do I expect to be compliant to international markets? I expect to see that 18 months down the road.” (Read ‘Egypt’s Investment Minister Vows to Tackle Country’s Bureaucracy‘ by Nicolas Parasie)
The FT’s David Gardiner drones on about how “Egyptian autocracy bodes ill for Arab region” in a front-page (digital edition) opinion piece for the salmon-colored paper remarkable only for coining the term “securocrats”. Similarly, David A. Graham’s “Egypt’s Revolution in Reverse“ for The Atlantic is readable only for it having drawn our attention to the fact that the storied magazine went live with a very interesting redesign the day before yesterday.
Nile Ritz Carlton to begin operations next month: The Nile Ritz Carlton on Tahrir Square is set for its soft opening in May, Waleed Abdel-Fattah, the regional manager at Hillton International said. The rehabilitation process of the hotel, formerly known as the Nile Hilton, were delayed a number of times due to ‘disruptions’ in nearby Tahrir Square. The project cost c. EGP 500 mn, according to Amwal Al Ghad. (Read in Arabic)
Ahmed Feteha writes for Bloomberg on the deteriorated relationship between the United States and Egypt with regard to the FMF program in ‘Egypt drops out of U.S. inner circle even as aid resumes.’ (Read)
Samsung’s factory in Beni Suef exports USD 500 mn worth of products annually, according to a representative of the company. The factory, which was inaugurated in 2013 and required a total investment of EGP 1 bn, produces LED screens for computers and televisions. On a related note, the Korean multinational expressed its willingness to participate in the establishment of a technical college in Egypt, provided that the government plays a leading role in its development, said the source.
Abraaj Capital is looking to invest in Egypt’s energy sector, managing director Amr Helal said at the Almal GTM conference, reportedly ruling out investments in real estate, according to Al Borsa.
El Sisi meets on energy, grey market goods: The president held two high-profile meetings yesterday that were the subject of overnight statements from Ittihadiya, both geared to show El Sisi is kicking the ball down the field on the economy. The most notable of the two was a sit-down with Oil Minister Sherif Ismail and Electricity Minister Mohamed Shaker at which the president reviewed short- and long-term energy plans, including Shaker’s confirmation that Egypt would add 3.6 GW in generating capacity to the national grid this year. The statement suggests Egypt will “overcome the energy crisis within two years, adding that designs are already underway for the construction of three power stations with a total cost of USD 12 bn, in addition to the agreement signed with Siemens to establish three other power plants, each with a capacity of 4.3 GW.” The three also discussed ongoing maintenance of generation facilities, the nation’s energy mix, the environmental impact of coal, and how to promote gas exploration. In a separate meeting yesterday with his Council of Economic Advisors, the president touched on job creation, but dwelt in particular on the need to clamp down on price gouging and low-quality imports sold on the grey market.
Tahya Masr to focus on social service projects -Abdellatif: Mahmoud Abdellatif, the veteran banker turned CEO of the Tahya Masr fund, said his fund will target healthcare projects and the upgrading of informal settlements. Specific healthcare projects will include mobile clinics and long-term hepatitis C medication schemes, as reported by Ahram Online from the Almal GTM conference. Abdel Latif also announced that procedures to divest the Da’am Masr fund are underway, with an aim to merge it with Tahya Masr to create a sovereign wealth fund or a major financial institution. Abdel Latif added that the prime minister’s decision to restructure the Fund’s executive committee, with Investment Minister Ashraf Salman as its chair, will help contribute to speeding up decision making and project completion, Al-Masry Al-Youmreports.
Also speaking at the Al Mal Finance conference was EFSA head Sherif Samy, who stated that most large-scale projects in Egypt fail to be creative in their financial structuring. Project backers need to make better use of mixes of debt, equity, and real estate financing, he said, going on to note that the Nilex (Egypt’s small-cap exchange) has failed to achieve its growth targets. Samy said a committee has been appointed to look at reducing listing fees to encourage companies to list on the Nilex. (Read in Arabic)
EFG Hermes gets green light for EGP 391.83 mn capital increase: EFG Hermes’ request to the EGX to hike its issued capital to EGP 3.3bn has been approved, according to an EGX statement Wednesday. (Read the EGX statement in Arabic)
Emaar Misr shareholders re-elected Mohammed Alabbar as non-executive chairman, according to a release sent to the EGX on Tuesday. (Read the statement in Arabic)
BNY Mellon announced it has “started picking Saudi Arabian equities to invest in ahead of the market opening in June,” Bloomberg reports. The bank’s Chief Investment Officer said “we are already doing bottom-up analysis of Saudi equities and have got our sights on several individual companies,”particularly taking note of “companies that stand to benefit from Saudi Arabia’s young population and consumer spending” including private healthcare.
Yemen- Airstrikes resume following Houthi attack, Houthis release detained Yemeni defense minister, U.S. concerned Iranian cargo ships carrying heavy weaponry for rebels: Following Saudi Arabia’s announcement on Tuesday that its coalition would be halting airstrikes in Yemen, Houthi rebels attacked a government military brigade, prompting a resumption of strikes, as reported by CNN. In a rare positive development, the Houthis released Yemeni Defense Minister Mahmoud al-Subaihi on Wednesday, after having captured him on 26 March. Meanwhile, U.S. Secretary of Defense Ash Carter said on Wednesday that it is possible that Iranian cargo ships heading to Yemen may be carrying advanced weapons for the rebels, as reported by the AP.
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A MESSAGE FROM PHAROS HOLDING
The EGX is teetering on the edge of bear territory. From a technical perspective, here’s why.
For far too many investors and traders — and almost all of our colleagues in the media — the EGX 30 is the only benchmark that matters. If it’s up, the market is beautiful. If it’s down, run for the hills. Their singular focus on one index that is dominated (at best) by the performance of three stocks is giving a false perception that ours is a “strong equity market.” Widening our scope to include the EGX 70 and the EGX 100 shows a much edgier picture: The EGX 100 is already testing a major support level, and the EGX 70 is on the downtrend.
What does this mean for investors? Keep a careful eye on bellwether Commercial International Bank (COMI). If it breaks the EGP 54 barrier on the downside, it’s a signal the market is weakening. If it breaks below EGP 51, all bets are off. If you’re following the EGX 30: Our view is that the index breaking the 8,400 support level will be negative for the entire market, and that anyone looking to open trading positions should wait for a break above 9,000.
Click here for our full analysis, including charts.
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EGYPT IN THE NEWS
While the title is slightly humorous, Michael Georgy’s piece on Kerdasa for Reuters has a quote buried at its end that offers a glimpse of Egyptian reality that one does not often find in the Western press: “Please don’t mention my name,” he told a Reuters reporter. “The Brotherhood are already boycotting my pharmacy because I don’t agree with their viewpoint. I don’t want to anger them even more. They are still around.” Also, no one seems to be able to decide exactly how many police officers were killed in the Kerdasa Massacre: Reuters’ piece on 20 April stated it was one officer, this piece by Georgy says it was 12; Ahram Online pegs the number at 14. (Read ‘Sisi’s crackdown on Islamists yet to win over Egyptian village‘)
Heather Murdock speculates on the Ikhwan’s political future in Egypt for state-owned media outlet Voice of America in ‘Death Knell or New Beginning for Egypt’s Muslim Brotherhood?’ Absent from the piece of course is what the Ikhwan themselves say about what they want for Egypt’s political future, namely: no reconciliation, putting Egypt’s political leadership on trial, presumably to execute. While Amr Darrag is quoted in the piece, never, it appears, does it arise to the author to ask Darrag on the Ikhwan’s vision for how their reintegration into Egypt’s political life would take place. (Read)
Egypt’s news in the news: The BBC has a roundup of media reaction to Morsi’s verdict, with the Egyptian media uniformly unsympathetic, and with the only regional media criticizing the outcome coming from Qatar and Iran. (Read ‘Little sympathy for Morsi in Egypt press‘)
Coline Schep, an analyst at Control Risks, a risk consultancy, examines the potential risks from Morsi’s verdict. Her assessment, in brief:
- “Frequent protests, though often limited in scale and duration, and low-level attacks seem likely to continue over the coming months.”
- “A mass uprising remains unlikely, however.”
(Read ‘After Morsi’s Sentencing, What Next For Egypt?‘ in Forbes)
Hazel Haddon writes for FP: ‘In Sisi’s Egypt, Blasphemy Is Still a Crime.’ (Read)
Commentary: The author is correct that in many ways, the plight of Christians has not materially improved in Egypt since Morsi’s ouster. But while the title places the burden and blame on the President, the content of the article itself plainly states that it is the people who are rising up in mobs to attack churches.
Yes, it is the role of leadership to enforce the rule of law and to guarantee that no one is a second-class citizen, but when the current administration has been subject to a relentless campaign of sectarian incitement by the Ikhwan, who explicitly painted Morsi’s ouster as a plot of the Coptic Church (a detail about which Western observers display a persistent amnesia) any major move to go ahead on the construction of churches simply confirms the Ikhwan’s narrative in the mind of many Egyptians and could lead to further destabilization and attacks on Christians and their property. The contradiction in the argument is laid bare in the following passage: “There’s an urgent need to pass a new houses of worship law, but it hasn’t happened,” said Mina Thabet, a researcher at the Egyptian Commission for Rights and Freedoms. “One church in Samalout in Minya has had a permit for restoration since 2004, but the government won’t do it because they’re scared of the extremists.”
The idea that extremists block the move is false; the bigotry that rejects the construction of churches is mainstream. While Western observers of Egypt are mainly concerned with the radicalization of Islamists following Morsi’s removal, the Egyptian government is concerned with what amounts to a softer but no less virulent radicalization of a very wide swathe of the population over the course of generations. That and nothing less is the dimension of the problem facing Egypt, and that is the country that the current administration has inherited. The depth and pervasiveness of this intolerance is not something that can be solved overnight, or in a year. At the same time, it would be easy to fall into the trap of insisting that Egyptians are not ready to recognize full citizenship of Christians while doing nothing about it, but this government has been incredibly active in trying to roll back decades of a poisonous ideology that has seeped into mainstream Egyptian society, and is already starting to face pushback. Some of those efforts are then attacked in the same breath in this article: “Thousands of independent mosques have been shut down, Muslim preachers without permits from the state have been banned from the pulpit…”
The issue is that these unlicensed mosques were never bastions of free, progressive Muslim thought, but were rather breeding grounds for extremism.
VIDEO
We hope that at Enterprise, we can help you win these kinds of contests: Portlandia – Did you read it?(Watch, running time:1:45)
While we’re at it, Portlandia gives perhaps the most accurate portrayal of office workers after a heavy lunch:Food coma. (Watch, running time: 1 minute)
Some context on yesterday’s tribute to Tawfiq Okasha: The best of Tawfiq Okasha speaking English: A compilation. (Watch in Arabic, running time: 2:46)
DIPLOMACY
In his meeting with Prime Minister Ibrahim Mahlab in Jakarta, the Cambodian Prime Minister Hun Sen said his country is preparing to send the foreign minister on a trip to Cairo and is considering opening an embassy in Egypt.
ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM
Government begins energy-saving LED street light replacement project
Al Masry Al Youm | 22 April 2015
The Egyptian government has allocated EGP 136 mn to execute the initial phase of its energy saving LED street light replacement project. This phase of the project entails the procurement and installment of 1 mn LED street lights, added the minister. This figure will rise to 3.98 mn LED street lights with the completion of the project, said the source. (Read in Arabic)
OIL & GAS
BP to begin investing in Egyptian gas project in 2015
Sputnik | 22 April 2015
BP’s CEO, Robert Dudley, said the company will begin investing in the gas project in Egypt in 2015. “The investment will start this year, and will bring on new gas…it could be as early as 2017,” Dudley announced, according to Sputnik. Peak production will be reached in 2019, where 30% of Egypt’s gas needs will be supplied through the project. Sputnik reports that BP’s CEO noted that “in the last six months Egypt cut through all of the red tape that is holding up the project. (Read)
BASIC MATERIALS & COMMODITIES
Bulgaria seeks investments in Egypt’s grain logistics hub
Al Ahram | 22 April 2015
Bulgaria is keen on the investing in the planned grain logistics hub in Damietta, according to the ambassador in Cairo, Roman Petrov. Petrov said his country wants to use the hub to expand the market for its wheat exports in Africa. Bulgaria is hoping it could export 4 mn tons of wheat annually to Africa. The Bulgarian Ambassador said he will invite Bulgarian business people to invest in the hub and in essential oils extraction. (Read in Arabic)
REAL ESTATE & HOUSING
Minister of Housing issues deadline for Dar Masr lottery winners
Dar Masr | 22 April 2015
The Minister of Housing announced that winners of the Dar Masr – a government-led middle-income residential project comprising 150,000 apartments- lottery must pay a 20% installment of the final unit price by April 30. Failing to do so will result in the individuals forfeiture of the property, added the minister. (Read in Arabic)
Abraj Misr signs 6 partnership agreements for “The Gate”
Al Borsa | 22 April 2015
Abraj Misr signed strategic partnership agreements with 6 companies on Wednesday for the development of its environmentally friendly “The Gate” project in El Nozha, Heliopolis. The 6 companies are: Hill International, Dimensions, IC Engineering, Johnson Controls, CSSE, and EMDEG The EGP 4.5 bn project has an area of 35,000 square meters and will take three years to complete, said Abraj Misr’s chairman, Aly Rabee. Additionally, “the Gate” is expected to create thousands of direct and indirect job, added the source. (Read in Arabic). Additional information on the project can be found in this video.
TELECOMS & ICT
TE signs optic-fibre deal with Noor
Al Borsa | 22 April 2015
Telecom Egypt (TE) signed a deal allowing Noor ADSL access to its optic-fibre cable network. TE is seeking to satisfy the demands of the Egyptian market and provide Egyptian with the best telecommunications service, CEO Mohamed El Nawawy said. Noor welcomed the signing of the deal expecting it to improve the quality of the service provided significantly. (Read in Arabic)
Summit and TE Data finish first phase of government’s cloud computing project
Amwal Al Ghad | 21 April 2015
Summit Technology Solutions and TE Data have completed the first phase of the government’s cloud computing project at a cost of EGP 15 mn. The project aims to use cloud computing to store citizens’ information and allow access to different government entities facilitating the provision of services. The next of the project is set to begin this year. (Read in Arabic)
ITIDA planning for expansions in Germany and England
Al Borsa | 22 April 2015
The Information and Communication Technology Development Agency (ITIDA) said it is mulling expansions in Germany and England through its bridge-building trip in July. ITIDA is bringing along a number of representatives from multiple technology companies to assess opening new markets. ITIDa is planning on another trip to either Qatar or Sudan before the end of the third quarter of the year. (Read in Arabic)
BANKING & FINANCE
AAIB participating in EEHC loan
Al Mal | 22 April 2015
AAIB is providing USD 50 mn of the USD 521 mn syndicated loan to the Egyptian Electricity Holding Company (EEHC). The loan goes towards financing the building of 1 GW power stations in Assiut by General Electric and OCI. Five other banks and financing the project including NBAD, Bank Audi, and Banque Misr amongst others. (Read in Arabic)
OTHER BUSINESS NEWS OF NOTE
HitekNofal signs EGP 8.4 mn bomb detector deal with the interior ministry
Al Borsa | 22 April 2015
HitekNofal has signed an EGP 8.4 mn deal to supply the Ministry of Interior with 28 explosives detection devices. The detection devices have the capability to detect explosives from four meters. The head of marketing at the company also said that HitekNofal is currently in negotiations to supply the Ports Authority with similar devices. (Read in Arabic)
EGYPT POLITICS + ECONOMICS
Environment affairs ministry sends committee to observe clean-up efforts in Qena
Al Borsa | 22 April 2015
The Ministry of Environmental Affairs has sent a committee to Qena to follow up on the government’s actions taken following the duping of 500 tons of phosphate in the Nile. The committee has taken water samples to assess the damage levels in the Nile. The ministry is also liaising with EGPC to assist in case if any oil spills appear onsite. (Read in Arabic)
ON YOUR WAY OUT
India participates in Egypt pharma exhibition: Over 50 companies from India participated in the Pharmaconex pharmaceuticals conference which took place in Cairo from 18-20 April. The Indian Charge d’Affairs Vishvas Sapkal inaugurated the Indian Pavilion in the exhibition on Saturday. (Read)
Former Pentagon spokesperson Rear Admiral John Kirby is set to be the new spokesperson for the U.S. State Department, replacing Marie Harf upon his upcoming retirement from the military, as reported by the AP.
‘A Concerned 8-Year-Old Citizen’ Writes Brutal Letter to Michelle Obama: An 8-year old boy, identified only by his first name Peter in The Weekly Standard, wrote a defiant letter to FLOTUS Michelle Obama in protest of her alleged plans to limit the amount of ketchup in American schools. “I have enjoyed learning about the great choices the USA has made … And then their was your husbands election. I think you should rethink your idea that takes us to one ketchup packet per meal.” (Read)
This video from A’alit Zizi (Zizi’s family) is dedicated to all the aspiring Egyptian entrepreneurs out there. (Watch in Arabic, running time: 3:55)
BY THE NUMBERS
USD CBE auction (Wednesday, 22 April): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Wednesday, 22 April): 7.71 (+0.06 from Tuesday, 21 April)
EGX30 (Wednesday): 8,629.49 (+0.63%)
Turnover: EGP 384.6 mn (32% below the 90-day average)
WTI: USD 56.51 (+0.62%)
Brent: USD 63.05 (+0.51%)
TASI: 9,572.3 (+0.1%)
ADX: 4,705.9 (+0.6%)
DFM: 4,133.1 (+0.3%)
KSE Weighted Index: 434.4 (+0.6%)
QE: 11,992.6 (+0.1%)
MSM: 6,350.8 (+0.3%)