WHAT WE’RE TRACKING THIS WEEK

28 April (Tuesday): Deadline for prequalified developers to submit comments on proposed guidelines governing SPV incorporation and project participation for renewable energy projects under the feed-in-tariff scheme.

Tomorrow will also mark the next session in the retrial of former Al Jazeera English journalists Mohamed Fahmy and Baher Mohamed.

LAST NIGHT’S TALK SHOWS

Lamees El Hadidy interviewed Minister of Social Solidarity Ghada Waly who is just back from Washington D.C. where she and Minister of International Cooperation Naglaa Al Ahwany signed a USD 400 mn agreement with the World Bank to support the government’s Karama and Takaful programs which are set to provide cash subsidies to 1.5 mn impoverished Egyptian families.

“Karama and Takaful were launched in November 2014 and thus far we have 112,000 beneficiaries from the programs. We are currently gathering data on the needs of families in the most impoverished areas of Egypt particularly Upper Egypt. Our plan is to add another 650,000 families within the next six months,” said Waly.

Youssef El Housseiny commented on an accident that caused a train on the new third Cairo Metro line to derail and crash into a wall. “Thank God the train was empty and there were no casualties. No one is quite sure what happened. What will Minister of Transportation, Hany Dahy, do now? We want the investigation to be transparent; the results have to be made public.”

“The Salafis get really angry when we criticize them on our program, so we have been doing our best not to hurt their feelings, but a few days ago we came across the recent video of Salafi leader Yasser El Borhamywhere he says that non-Muslims should not hold leadership positions, meaning Christians should not be members of cabinet, Christians should not be ministers as far as this man is concerned,” said El Housseiny.

“Mahlab loves Borhamy, he is now allowed to preach in our mosques, and the Salafis will once more be allowed to participate in the political process. Mr. Prime Minister, please watch this video. Do you want people with warped ideas like these to be part of the political process? Do you want them to be members of Parliament? Do you want them to preach in our mosques? If the answer to any of these questions is ‘Yes,’ then it means that the government has no problem with what he is saying.”

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SPEED ROUND

Ending Egypt’s currency black market brings new challenges: Egypt’s USD black market has almost completely dried up over the past two months, as noted by Reuters’ Stephen Kalin and Nadia El Gowely. However, importers and exporters have persistent complaints about a lack of liquidity. EFG Hermes economist Mohamed Abu Basha is quoted as saying, with regard to open letters of credit, “Since companies cannot really access the parallel market at large, your place on the central bank’s priority list becomes really important.” As we noted yesterday, the CBE has lowered commissions from 2.5% to 1.5% in order to help facilitate letters of credit. (Read)

Some banks violated the mandated USD deposit limits, CBE says: The CBE has issued a directive stressing that banks need to monitor internal USD transfers closely. Following the restrictions on USD deposits, the CBE said it noticed that some clients have deposited amounts larger than those allowed legally into multiple accounts, and then using internal transfers to move them into a single account. The CBE stressed on the importance of employing the “know your client” procedures with all registered accounts and said it will send regular inspection teams to banks. (Read in Arabic)

GB Auto denies interest in acquiring CDCM: GB Auto CEO Raouf Ghabbour has reporetdly denied claims that his company is interested in acquiring Cairo for Development and Cars Manufacturing (CDCM), the exclusive distributor of Peugeot automobiles in Egypt. Rumors of GB Auto’s interest in the company first emerged after Arabiya Istithmarat, CDCM’s parent company, discussed the possibility of selling its stake in the automobile assembler at its OGM, earlier this year. (Read in Arabic)

Public consultations on value-added tax to continue: Public consultations on the proposed VAT law will continue until the law is passed, the new head of the Tax Authority, Abdel Moniem Mattar said, noting that discussions had already included representatives of the Egyptian Federation of Industries and of chambers of commerce. Mattar did not make clear a timeline for the VAT’s issuance or implementation. (Read in Arabic)

Sugar war: producers call for a 15% tariff on raw sugar imports: Sugar producers have called for an additional tariff on raw sugar imports following the EGP 700 per ton tariff imposed on refined product, Al-Malreports. All sugar producers have agreed to imposing antidumping measures except for Savola, according to the Delta Sugar’s Chairman, Abdelhameed Salama. The original protectionist measures allowed Savola and the Egyptian Sugar and Integrated Industries Company (ESIIC) to import 700,000 tons of raw sugar. Salama says local producers want this quantity reduced to 600,000 tons. He believes the market is oversupplied to the tune of 600,000 tons per year. (Read in Arabic)

BG Egypt’s assets fit with Shell’s long-term bet –Interfax: BG’s offshore fields and the LNG plant are more attractive to Shell than they might look as they “fit well within the company’s desire to invest more in LNG and deepwater exploration,” Rachel Williamson writes for Interfax. Shell are in Egypt for the longer term, a former EGPC official believes, and are likely to commit more funds into the country. Although Shell has divested from its North African downstream business, there are no signs it is trying to get out of its Western Desert assets. One of the contentious issues with the acquisition remains the involvement in Israel; “any direct involvement of Shell in Israel… was not considered positive at all,” a consultant told Williamson, but Chatham House’s David Butter tempered that sentiment highlighting the economic potential: “That may be some sort of historical legacy … long before Israel’s emergence as the Qatar of the East Med.” (Read)

Second FSRU will be in Adabiya, not Sokhna; Gallant receives first commercial shipment:EGAS appears to be moving to spread risk by seeking to install a second floating storage and regasification unit (FSRU) not in Ain Sokhna Port, as originally planned, but in the Port of Adabiya, according to a report. The first vessel, the Hoegh Gallant, is already operating in Sokhna. EGAS had said two weeks ago it was debating between Sokhna and Adabiya as the site for the second vessel, which could be in place by year’s end after 3-6 months of infrastructure work at the port. In related news, Gen. Hisham Abu Senna, chairman of the Red Sea Ports Authority, confirmed that the Gallant has received its first commercial-scale shipment of LNG,Al-Mal reports. The Gallant had previously been running trials with a small-scale cargo it brought on board when it docked.

President Abdelfattah El Sisi issued a decree extending the state of emergency in areas of Northern Sinai beginning yesterday, 26 April, according to Al Mal. The decree involves the enforcement of curfews and delegating some the presidential authorities to the Prime Minister.

HSBC offers MAF EGP 3 bn loan: HSBC is offering the Majid Al Futtaim (MAF) Group an EGP 3 bn loan to finance its construction of the Almaza City Centre. MAF had increased its funding requirement from EGP 2.4 bn and two banking consortia and competing to provide the funding. Al Shorouk says MAF is expected to select its funding source sometime next month. (Read in Arabic)

Matariya unrest: Violence between police officers and locals in the working class neighborhood of Matariya appears to be spiraling out of control, reports Mada Masr. Colonel Wael Tahoun, the former head of the Matariya police station, was assassinated on Tuesday in retaliation for his alleged involvement in the murder of lawyer Karim Hamdy. The lawyer, who reportedly had strong ties with the outlawed Ikhwan, was found dead in his cell at the Matariya Police Station on 24 February. An autopsy report later revealed that Hamdy was tortured.

The Execution Battalion, a terrorist group with a history of violence against police officials, claimed responsibility for Tahoun’s murder on Wednesday in a statement on Facebook threatened further violence. Another lawyer, Imam Afifi, died last Wednesday, reportedly as a result of having been beaten at the Matariya police station two weeks earlier. Like Hamdy, Afifi was reportedly a Muslim Brotherhood sympathizer. Samuel Tadros, Egypt analyst and Senior Fellow at Hudson Institute’s Center for Religious Freedom, noted on Twitterlast week that the current unrest in Matariya is not solely attributable to the Ikhwan: “Not pure MB there, more of an amalgam. Its the place where Rifa’i Sorour lived and preached. This is his work.” In his monograph ‘Islamist vs. Islamist: The Theologico-Political Questions,’ Tadros goes on to note that Rifa’i Sorour was a driving force behind the founding of the Salafi Front, which readers may call recall were the group calling for a wave of ‘Muslim youth awakening,’ at the end of last year, to which only Matariya witnessed a large response. (Download the 121-page report ‘Islamist vs. Islamist’ by Samuel Tadros)

ICYMI: “I’ve never managed to grasp a decade’s main point until long after it was over. It turns out that I wasn’t supposed to spend my 20s frantically looking for a husband; I should have been building my career and enjoying my last gasp of freedom. I then spent my 30s ruminating on grievances accumulated in my 20s. This time around, I’d like to save time by figuring out the decade while I’m still in it. The modern 40s are so busy it’s hard to assess them. Researchers describe the new “rush hour of life,” when career and child-rearing peaks collide. Today’s 40ish professionals are the DITT generation: double income, toddler twins.” — ‘What you learn in your 40s‘ by Francophile Pamela Druckerman (the American author of the bestseller “Bringing up Bébé”)

CORRECTION: Waleed Abdel-Fattah is senior vice president and regional manager for Hill International, the international construction consulting firm, not of Hilton International. We misidentified Abdel-Fattah’s position in our pickup of a piece on the soft opening of the Nile Ritz Carlton, formerly the Nile Hilton. Ahram Online notes the property will formally open in July. Our apologies to Mr. Abdel-Fattah and h/t Tarek S.

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VIDEO

Former President Hosni Mubarak called in to Ahmed Moussa’s show on Sada El Balad last night. (Watch in Arabic, running time: 13:57) Ahram Online posted a summary of the call, saying “Mubarak reiterated that the army, headed by President Sisi, clearly ‘understands the sanctity of the national territory.’” (Read)

The only comment we have on it is that it is disappointing that of all television hosts, Mubarak would choose to speak to Ahmed Moussa.

Turkey-based Ikhwan satellite channel Mekamaleen hosted someone alleging that U.S. President Obama threatened Morsi with a coup, prompting Morsi to hang up on him. (Watch in Arabic, running time: 5:10) H/t Samuel Tadros’ timeline

Everyone is talking about the Anger Translator skit from the White House Correspondent’s Dinner featuring Keegan-Michael Key from Key and Peele and U.S. President Barack Obama. This particular writer found the skit more uncomfortable and cringeworthy than funny (despite enjoying some of Key and Peele’s skits — the two church ladies come to mind). Watching comedians constantly treat the U.S. president with kid gloves and devotion is a bit tiresome. (Watch, running time: 5:10)

EGYPT IN THE NEWS

The lead story on Egypt in the foreign press is a pickup of a Human Rights Watch press release alleging that Morsi’s trial was “Badly Flawed.” Unlike a number of HRW’s official statements, the release is rigorous and simply evaluates the case based on its actual merits and in accordance with Egyptian law. Still, look for the state to dismiss the criticism as judicial interference. HRW notes Under Article 40 of the Penal Code, prosecutors needed to prove that Morsy had “agreed with another on perpetrating the crime and [that] the crime [took] place on the basis of such agreement.” HRW is fairly balanced and honest when they acknowledge that Morsi referred to confessions from interrogations in an address to the nation on 6 December 2015 and that Essam El-Erian “called on supporters in television interviews and social media posts seen by Human Rights Watch to ‘surround the thugs’ and ‘arrest them all.” That said: “Morsy’s ties to those who called for confrontations do not amount to evidence of his criminal guilt, and prosecutors did not present evidence that he was complicit in decisions by his aides or party colleagues to send supporters to confront opposition protesters…” (Read Egypt: Morsy Trial Badly Flawed) The release has been picked up by American state-owned media outlet VOA as well as the Qatari Peninsula Online.

‘Sisi’s Egypt Pushes Migrants Into the Sea’: Ikhwan media is in overdrive to attempt to implicate Egypt in any way possible with the death of migrants attempting to cross the Mediterranean from Libya. In “Sisi’s Egypt Pushes Migrants Into the Sea,” which follows the new standard template of “Sisi’s Egypt ____ [insert horrible thing that has nothing to do with Sisi, repeat ad infinitum]” media hit pieces, Middle East Eye argues that life is so unbearable in Egypt that Syrian migrants are dying at sea rather than staying here in misery. Let us set aside, for a moment, if you will, that the ethnicities of migrants risking and often losing their lives at sea include Tunisians, Eritreans, Ethiopians, Egyptians and countless others, let us stop to consider a moment if there is any veracity to his claim.

The author notes, “Within days of the coup, these refugees became the brunt of Egyptian nationalist xenophobia, which linked them rightly or wrongly with the Brotherhood.” When you have a journalist working for a Qatari-funded Islamist publication such as Middle East Eye, who attempts to obfuscate the truth by using phrases like “rightly or wrongly.” one can safely assume that the accusation is “rightly.” What Middle East Eye is obliquely referring to without trying to tarnish the Ikhwan is that the group, following Morsi’s ouster, exploited Syrian refugees and orphans who depended on them for assistance to attend marches and rallies in which they did not necessarily support.

Unfortunately, individuals such as Youssef El Hosseiny of ONTV, among other members of Egypt’s media, did spend time inciting against Syrian refugees’ participation in such demonstrations, which was dangerous, irresponsible and inexcusable, and for which Hosseiny later backtracked. Before closing on this ugly article, a few facts: Migrants are using Islamist rebel-held Tripoli as their launching point. The rebels are backed by Qatar. Egypt is home to 133,862 Syrian refugees. Qatar meanwhile, despite funding an unending civil war in Syria, hosts a grand total of 181 Syrian refugees and asylum seekers. (Read Sisi’s Egypt Pushes Migrants Into the Sea. For further accusations that Egypt is exploiting the migrant crisis, see Ikhwan mouthpiece Middle East Monitor’s Security source: Egypt embroiled in illegal emigration across Libya.)

The FT’s Borzou Daragahi was out over the weekend with “Egypt’s ‘hanging judge’ accused of politicised verdicts,” a look at the career and recent verdicts of Judge Mohamed Nagui Shehata, which he uses to make the point that “Many legal experts believe he epitomises the deep flaws in Egypt’s opaque legal system, which provides little accountability over judges.”

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Electricity ministry seeks USD 520 mn to finance expansions
Al Borsa | 25 April 2015
The Ministry of Electricity is seeking USD 520 mn in financing due to OCI and GE for work completed as part of the ministry’s emergency plan. The ministry had already paid the two companies USD 1.14 bn as a first installment and has sought to provide the USD 520 mn since February. The companies are adding 3,630 MW of extra electricity generation capacity at a total cost of USD 2.5 bn. (Read in Arabic)

OIL & GAS

Petroleum Ministry owes EGP 100 bn to Finance Ministry
Daily News Egypt | 26 April 2015
A General Authority for Petroleum senior official said in a statement to Daily News Egypt that the oil ministry’s dues to the Finance Ministry amount to over EGP 100 bn. The official attributed this due to the authority paying the support of petroleum products annually. The official also said that petroleum agreements stipulate an interest rate on dues of the government’s foreign partners in the case of late payments, and the rate varies in each agreement. (Read)

BG to begin connecting the last of the 9A wells to production in May
Al Borsa (Print) | 26 April 2015
BG is set to begin connecting the last of the 9A wells to production in May, according to a source at EGAS. Upon completion, 60 mcf of gas are set to be added to the daily output. In total, the whole Phase 9A wells will increase production by 500 mcf of gas per day. Production from Phase 9B is set to begin in 2016, but BG is still renegotiating prices with EGAS, the source added.

TOURISM

Hotel investors request loan repayment extension from Tourism Ministry -Sinai hotels chamber official
Daily News Egypt | 26 April 2015
The Chamber of Hotels in Sinai requested an extension on the payment for overdue loans for the tourist projects established on lands allocated for tourism development until the end of 2015. An official in the Chamber of Hotels speaking to Daily News Egypt said that lower occupancies have affected construction rates over the last four years. (Read)

Misr Hotels to invest EGP 40 mn in Dahab Resort renovations
Al-Mal | 26 April 2015
Chairman and Managing Director of Misr Hotels Mustafa Saad revealed to Al-Mal that his company is planning to allocate EGP 40 mn to renovate its Dahab Resort. The renovations include creating a children’s playground, raising the standard of the chalets, adding more grass within the hotel’s perimeter, creating a golf course, and last but least doing some much-needed maintenance all around. Saad added that work will begin as soon as the company makes a choice on the contracting company that will be tasked with this project. On another note, Saad stated that he expects the Nile Ritz Carlton to be open for business sometime in July.

TELECOMS & ICT

Mobinil losses decline 80% in 1Q2015
Reuters | 26 April 2015
The mobile network operator said net losses eased 80% to EGP 35 mn compared with EGP 177 mn a year ago. (Read)

BANKING & FINANCE

CBE considering issuing extra measures to make mobile banking safer
Al Borsa | 26 April 2015
CBE is considering issuing new regulations to make mobile banking safer similar to the regulations issued for internet banking. The CBE is assessing the banks’ requests regarding the provision of the service on a case-by-case basis and ultimately aims to protect against money laundering and hacking. A new set of regulations is expected to be out in 2H2015, a source at the CBE told Al Borsa. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Taxi operators owe banks EGP 300 mn, banks discuss with finance ministry repayment mechanism
Al Borsa | 26 April 2015
Taxi operators under the government’s “white taxi” scheme owe banks EGP 300 mn. Taxi owners were handed a court decision allowing them to renew their licenses without having to prove that their installments have been paid on time. Bank are concerned that this might increase the losses of the programme further still as the incentive to repay the taxi loans was reduced and are currently discussing repayment options and coordinating with the Ministry of Finance. (Read in Arabic)

Dina Farms opens second branch in Smouha
Al Ahram | 25 April 2015
Dina Farms Market announced the opening of its second branch in the Smouha district of Alexandria on Sunday, reported Al Ahram. This is Dina Farms’ 19th branch in Egypt. The company plans to have 100 operating branches throughout Egypt within 4 years. Dina Farms will inaugurate an additional branch in the North coast region of Egypt in June, in time for the arrival of summertime vacationers. (Read in Arabic)

ON YOUR WAY OUT

Egypt is 135th out of 158 countries in the 2014 World Happiness Report following recording the second largest drops in average life evaluations after Greece from 2005-2007 to 2012-2014. Israel tops MENA countries at the 11th place and the UAE is the happiest Arab country at the 20th place while Syria is the least happy at 156th. A summary of the report can be found here or you can check out the report in full (in PDF).

Five people were hanged yesterday in Assiut after exhausting appeals of their death sentences, the Interior Ministry said. The sentences appear not to have involved individuals sentenced for political acts.

Mortada-watch: Lawyer Tarek El Awadi, director of the center for rule of law defense, claimed that he was threatened by an individual who warned him not attend Tuesday’s court session, where he is appealing a recent verdict of a one year long prison sentence. Celebrity lawyer and Zamalek Club Chairman Mortada Mansour had filed the original case against which El Awadi is appealing. Al Awadi is inviting other lawyers to take his side and stand against Mortada Mansour, who he claims is using his connections to put people behind bars. (Read in Arabic)

752 people have been discharged after treatment in hospital for gastrointestinal distress, probably due to contaminated drinking water, Ahram Online reported yesterday. The Ministry of Water Resources had previously denied the outbreak, which occurred in Sharqiya (a Nile Delta governorate), was related to an accident that dumped phosphate into the Nile in Upper Egypt, the newspaper noted.

Bombs hit two electricity pylons in southern Egypt: Two electricity pylons in Upper Egypt were targeted with explosives on Sunday, with damages estimated to cost nearly EGP 200,000. The pylons, however, are still working after some temporary repairs were made, Ahram Online reports.

International Business Times, quoting credibility-impaired DebkaFile, claims that Egypt is preparing for a ground, naval and air assault on Libya to target Daesh strongholds in the country. While Egypt would like to see military engagement in Libya in order to oust terrorists who have begun nesting in the lawless state, it would seem unlikely that Egypt would go it alone.

BY THE NUMBERS

USD CBE auction (Sunday, 26 April): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Sunday, 26 April): 7.71 (+0.01 from Saturday, 25 April)

EGX30 (Wednesday): 8,633.86 (-1.12%)
Turnover: EGP 228.3 mn (59% below the 90-day average)

WTI: USD 57.11 (-0.07%)
Brent: USD 65.35 (+0.11%)

TASI: 9,725.2 (+1.1%)
ADX: 4,666.4 (+0.8%)
DFM: 4,172.1 (+2.1%)
KSE Weighted Index: 434.8 (-0.3%)
QE: 12,040.1 (-0.1%)
MSM: 6,346.6 (-0.2%)