WHAT WE’RE TRACKING THIS WEEK

The EBRD will hold its Annual Meeting and Business Forum on Thursday and Friday (14-15 May) in Tbilisi, Georgia. The bank will seek a mandate from shareholders to step up its response to persistent challenges in the transition economies that it serves.

Verdicts are expected in two separate trials against former president Mohamed Morsi on Saturday, 16 May: one for espionage and the other for his escape from prison in 2011.

ENTERPRISE IN ARABIC, ANYONE?

We’re hard at work crafting an Arabic edition of Enterprise. It’s in beta right now, just as the English edition was last fall, so we’ll be dispatching every other afternoon or so. If you or someone you know would like to sign up for a copy, drop us a note at editorial@enterprise.press and we’ll add you to the list. All we ask in return is that you pass on your feedback and be prepared for us to ask a question or two. Our plan is to ramp-up to a daily dispatch in the morning hours over the coming weeks.

LAST NIGHT’S TALK SHOWS

The three main topics of focus on Egyptian talk shows last night were President Abdel Fattah El Sisi’s visit to Moscow on Saturday to take part in Russia’s 70th Victory Day celebrations in remembrance of Germany’s surrender in 1945; a court’s confirmation on Saturday of the three-year verdicts against former president Hosni Mubarak and his sons originally received one year prior; and an overview on the government’s anti-drug campaign.
Lamees Al Hadidy of CBC Egypt was off for the evening, with Amr Khalil filling in, focusing his coverage on the first two aforementioned topics.

Egyptian state news reported on Saturday that prosecutors were attempting to determine if Mubarak and his sons have already served sufficient time on their previous conviction of using state funds for personal benefit, which would see their imminent release. The uncertainty over whether they’ll soon see release was picked up on by Amr Adeeb, with Youssef El Hosseiny of ONTV instead attempting to emphasize that no matter what happens, their record will not be cleared at best, while at the same time saying that if they end up serving time they should receive no special treatment. He also took some shots at Sada El Balad presenter Ahmed Moussa without mentioning him by name, saying that no television host should further accept call-ins to their programs by the former president following Saturday’s ruling.

Amr Adeeb launched a very aggressive “are you with us or against us” attack against footballer Mohamed Abou Treika, who on Thursday reportedly had his assets seized by the Central Bank for having ties to a tourism company with links to the outlawed Ikhwan. Adeeb noted that he had apparently been attacked on Twitter for attacking Abou Treika. Adeeb fired back by suggesting that Abou Treika has always avoided a public pledge to the Ikhwan to avoid losing his corporate sponsors.

“If you’re a man, say you’re a member. Tell us who you are. Are you with us or against us? There are plenty of people who won’t say either way, such as writer Fahmy Howeidy. Are you Ikhwani? If you are, it’s fine, just says so. Plenty of people took their masks off after January 2011, but there are some who we still don’t know about … There are people who like Sisi and those who want him dead. To which group do you belong?” Which makes this reviewer wonder: if Abou Treika is a member of the Ikhwan, why would he incriminate himself by publicly acknowledging membership in an organization which has been designated as a terrorist group?

Adeeb ended his program by bringing out almost the entirety of his crew — and the gang brought cake. Turns out it was the show’s fifteenth anniversary (seventeenth if you count the two years on the Orbit satellite channel). Adeeb gave an at-times teary-eyed thank you to everyone who worked behind the scenes on his program over the years. “This program wouldn’t have been anything without these people, who always stood by me and never sold me out.” He also thanked co-hosts Khaled Abu Bakr and Rania Badawy, both of whom were unable to attend, as well as fans of the program.

Following news that the state has allocated EGP 250 mn to fight citizens’ drug addictions, according to anannouncement by Prime Minister Ibrahim Mahlab, the topic was discussed on most programs yesterday.Ossama Kamal on Al Kahera Wal Nas spent his program on the problem of drug addiction, with an in-studio panelist noting that cocaine is making a comeback at after-parties. Youssef El Hosseiny likewise addressed the issue, but his coverage on the topic could have simply been replaced with a viewing of the trailer of the propaganda / exploitation film Reefer Madness, (Watch, running time: 1:38).

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SPEED ROUND

The CBE announced it is reducing the number of its weekly foreign currency auctions to threeas of this week. “Regular foreign exchange auctions were previously held on Sunday, Monday, Wednesday and Thursday. They will now be held only on Sunday, Tuesday and Thursday,” Reuters noted. On Thursday, the CBE said in a statement it had sold USD 300 mn that was “directed to cover pending backlog, due for payments, for the import of raw materials, production requirements and spare parts.” The sale was its biggest ever, Bloomberg noted, as the bank usually sells USD 40 mn at a typical auction. “The new FX auction policy caters to demand in a more flexible way,” EFG Hermes Research’s Mohamed Abu Basha told the wire service. Still, “the market needs to see an improvement in fundamentals of foreign currency inflows, namely higher income from foreign direct investment, tourism and portfolio flows, rather than just GCC deposits before gaining more confidence.”

EgyptAir pilots have withdrawn their threat of mass resignations in what the Pilots’ Association said was a move to protect the “interests of the company.” The decision followed the intervention of President Abdel Fattah El Sisi, reports say.

ICYMI (because we certainly did)- Ahmed Zayat wins Kentucky Derby: We have a soft spot for Ahmed Zayat, possibly because in a previous life he posed for the best-ever magazine cover smoking a very nice cigar after closing the landmark sale of Al-Ahram Beverages to Heineken. What’s he been up to since then? Raising horses, it turns out, including 2015 Kentucky Derby winner American Pharaoh, who put Zayat in the winner’s circle a week ago Saturday. The Associated Press has a wonderfully colorful story on Zayat, as does the New York Post. You can learn more about the Zayat Stables on its website, here.

Aramex, Orascom in talks for EGP 1 bn network of logistics centers: Aramex and Orascom have entered into talks with the Sisi administration to establish a network of logistics centers throughout the country for the distribution and storage of staple commodities, reports Al Mal. The centers will reportedly be established in areas owned by Ministry of Supply and Domestic Trade-affiliated authorities. (Read in Arabic)

The budget deficit rose to 9.4% of gross domestic product in the nine months to March 2015, the finance ministry said on Thursday as reported by Reuters, compared with 7.3% for the same period last year.

As we noted on Thursday from Al Borsa’s report regarding the World Bank’s USD 500 mn loan to improve access to housing and housing finance to low-income households, the World Bank’s release issued last week adds more details to the program. “This new Inclusive Housing Finance Program offers support to low-income households to help them get housing or housing finance. It is expected to reach 3.6 mn people, including many in the first to sixth income deciles, and generate an estimated 1.5 mn temporary construction jobs over a 5-year period, the life of the project.” (Read)

Ittihadiya and the office of the Prime Minister are exempt from articles 19 and 20 of the new civil service law, following a decree by President El Sisi, Al Mal reported. Employees at the two offices are no longer bound by article 19, which stipulated the regular procedures by which every government job is filled, or by article 20, which mandated that employees be given job of a similar grade to the one they held prior to their appointment once the term of the new one ends.

INTERVIEW- Egyptian Resorts Company Commercial Director Abu Bakr Makhlouf recently sat down with Daily News Egypt for an interview on the company’s Sahl Hasheesh development. “Sahl Hasheesh had an average occupancy rate of 85% over 2014 against a Red Sea average of about 65% … Total investments for this project amounted so far to EGP 5.3bn across many developments … After four years of stagnation, pent-up demand is really significant. We’re seeing heavy demand not just for potential land acquisitions, but from individual investors. We’ve recently sold 50 villas at our Jamaran development for a total of EGP 100 mn — that’s a full sell-out of Jamaran.” (Read)

As noted in our talk show review above, the government has confiscated the assets of footballer Mohamed Abou Treika for having links to Ashab Tours, a tourism company co-founded by Abou Treika and a member of the Ikhwan, according to an exclusive report by Al Watan as reported by Ahram Online. A number of Egyptian football players have publicly come out in support of Abou Treika.

Also noted in our talk show review, on Saturday, former president Hosni Mubarak and his sons had their previous sentences confirmed after being found guilty of diverting public funds originally intended for presidential palace renovations, as reported by the AP. The former president and his sons “were given the OK” to go home, reports CNN.

Egypt will issue one-year treasury bills worth USD 1.25 bn, according to the CBE. Reutersreported that “the finance ministry was the issuer and the bookkeeper was the central bank” and that the auction deadline is 11 May with the issue date the following day.

Lights out at ERTU: The Egyptian Radio and Television Union (ERTU) was responsible for the power outage that led to a loss of signal for all radio and television programs Saturday evening, Minister of Electricity Mohamed Shaker. In a phone interview with Al Aasema Channel, Shaker said: “Maspero officials failed to provide any alternatives for the power outage. A technical difficulty is behind the power outage in the Maspero building.” (Read in Arabic)

On Saturday, the Mahlab government announced its completion of phase 1 of the Khedival (downtown) Cairo renovation project, reports Al Mal. The government intends to revitalize downtown Cairo, transforming it into a tourist landmark.

Why Egypt’s conservative judiciary doesn’t always do Sisi’s bidding: “… legal experts caution against interpretations that dismiss these decisions as a product of pressure from the top — they say Egypt’s judges are following their own interests, in line with a culture that prioritizes stability and security. In some instances, political analysts say, the courts’ actions are even costly to the regime … According to Professor [Nathan] Brown, Egypt’s long and complex appeals system offers numerous opportunities for sentences to be reduced or dropped altogether. “As they work their way through the system, there will be opportunities for more professional and level-headed judges to have their say,” says Brown. (Read)

The Middle East’s tech sector needs younger political leadership, the World Bank’s Arab Voices blogsuggests. “In the past three decades, as Arab populations have become younger the average age of their leaders has continued to increase” noting that age is not necessarily the main challenge, but rather “the commitment and capacity of governments to support change.”

Government ownership may not be completely evil: That’s the question asked in the Washington Post’s Monkey Cage blog this weekend, which says well-managed state-owned companies such as SABIC and Etisalat prove that it’s not necessarily ownership, but willingness to clean up management and governance that makes the difference. “The ideologically-charged debate over privatization versus state ownership often overlooks something critical: the quality of state-owned enterprises. State control does not necessarily mean inefficiency. Partly or wholly government-owned firms, particularly in Europe, can be highly competitive. What matters is corporate governance: Efficient state-owned firms are usually set up like private companies, while inefficient ones are run like government bureaucracies.” Read ‘Can there be good Middle Eastern state-owned enterprises?‘

“A trickle, not a flood of foreign money is likely to enter Saudi Arabia’s stock market in coming months as the USD 575 bn bourse, the Arab world’s biggest, opens to direct foreign investment,” says Saudi-based Arab News, carrying quotes by EFG Hermes’ Mohamad Al-Haj. “Active money will probably flow in increments, and will depend on market valuations among other factors,” Haj said. (Read)

Mahlab in Sokhna: Following his inauguration of the Ain Sokhna Power Station on Wednesday, PM Mahlab popped by the Ain Sokhna port to visit the docked FSRU that is being fed LNG and supplies natural gas to the national grid. Al Masry Al Youm has pictures of the visit.

Israeli regulators have presented an alternative compromise agreement to antitrust chief David Gilo regarding Noble Energy and Delek Group’s stakes in the Leviathan offshore gasfield, according to Israeli business news site Globes in their confusingly-titled piece: “Regulators form final gas monopoly compromise” — confusing as no agreement has been made. According to unnamed sources speaking to Globes, the alternative compromise has already been rejected by Gilo. The new agreement would see loose price controls set on the price of natural gas in future contracts in lieu of forcing Delek and Noble Energy into competition by having them conduct separate marketing, in addition to rescinding the government’s demand for Noble to dilute its share in the Leviathan gasfield from 36% to 105. As of now, no agreement has been reached. (Read in Globes)

The UK’s Conservative Party secured a clear majority in the general election held on Thursday, despite a good deal of pundits predicting anything from a hung parliament to the end of Prime Minister David Cameron’s career. The conservative Telegraph revels in the inaccuracy of a number of predictions made, while the liberal Guardian focused their coverage on limited anti-austerity protests erupting following the Conservatives’ win.

Forbes examined the money behind the mega-industry that is international football. Real Madrid is the world’s most valuable team, according to their analysis, followed by Barcelona and Manchester United. Forbes produced a short video about the highest paid football players in the world, the top five ranked in USD 275 mn in total last year and the list is topped by Cristiano Ronaldo who made USD 79 mn (Watch, running time 02:17).

Al Jazeera America, its newsroom in turmoil, is now the news: After dismantling Current TV following the purchase of the channel for USD 500 mn from Al Gore, who then sued them for never actually paying him, who was then countersued, and after burning through untold amounts of money and talented journalists who have since abandoned a sinking ship, vanity news project Al Jazeera America has nothing but 30,000 viewers a night to show for its efforts, the NYT reports.

Yemen Updates: Saudi announces 5-day ceasefire starting on Tuesday, UN official accuses some Saudi-led coalition airstrikes of violating international law: Saudi Foreign Minister Adel al-Jubeir and U.S. Secretary of State John Kerry on Friday announced a five-day cease-fire in Yemen starting on Tuesday, 12 May, the WSJ reports, with an extension possible based on the response of the Houthi rebels. Meanwhile, U.N. Humanitarian Coordinator for Yemen Johannes van der Klaauw said in a statement on Saturday as reported by Reuters that “The indiscriminate bombing of populated areas, with or without prior warning, is in contravention of international humanitarian law … Many civilians are effectively trapped in Saada as they are unable to access transport because of the fuel shortage. The targeting of an entire governorate will put countless civilians at risk.”

Susan Sabet makes Business of Fashion 500. BOF, which leads coverage of the business side of the global fashion industry, named Pashion Magazine founder and publisher Susan Sabet to its BOF 500, the annual list of fashion pioneers and influencers from around the globe. She’s the only Egyptian ever to make the list, which apparently dropped late last year. A short bio of Sabet on the BOF site is here.

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A MESSAGE FROM PHAROS HOLDING

Are we heading for a major equity market rally in 2H2015?

It’s being billed as a “routine visit,” but the now-confirmed visit to Egypt of an IMF technical delegation in early June 2015 leaves us expecting a major equity market rally in the second half of this year — one that could push the EGX to our 2015 target of 10,500, if our interpretation of the chain of events is on target. We see the government in general (and the Central Bank in particular) selling an IMF facility to a skeptical opposition not as a necessity, but as a national right. And if past precedent is anything to go by, we anticipate both a further interest rate cut and devaluation of the EGP just prior to the delegation’s arrival, with the latter looking more like a managed float. Click here for more — including why the capital gains tax and limits on FX deposits might just make sense in this context.

BONUS CONTENT: Sell Ezz Steel on a brittle industry outlook. We have been bears on Ezz Steel (ESRS) since early 2014 on the back of domestic energy shortages; a global plunge in steel prices; and the likely cancellation of phase two of its DRI expansion. We remain sellers today and are cutting our fair value for ESRS shares to EGP 10.70: still prices look brittle on peaking Chinese demand, excess capacity in China, and the ramp-up of lower-cost capacity in Australia and Brazil — to say nothing of energy costs and availability in Egypt remaining dubious at best. Click here for more.

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WORTH READING

As Syrian are rebels begin making sweeping gains and winning strategic victories in the north of the country,Brookings’ Charles Lister explains why, in his view, Assad is losing the war. His reasons center around more unified rebel actions, a shortage of manpower and weak morale amongst Assad’s forces, weaker Russian and Iranian support to Bashar, apparent American support of FSA groups, and the rebels’ reliance on local connections and provincial identity. Lister warns that this new-found sense of unity within the ranks of Syrian rebels will still come at the cost of cooperating with Al Qaeda “thus facilitating its prominence.” Meanwhile:Syria Central banker says Iran weighs USD 1 bn credit line, (Bloomberg)

DIPLOMACY

President Abdelfattah El Sisi was in Moscow on Saturday to participate in the 70th anniversary of Russia’s Victory Day celebrations, as noted in our talk show review above. President El Sisi met with Russian President Vladimir Putin during the visit, where the two discussed enhanced bilateral cooperation on Egyptian agricultural exports to Russia, Russian tourism in Egypt, and followed up on the creation of a FTA between Egypt and the Eurasian Customs Union, according to an emailed statement from Ittihadiya. President El Sisi also met with a number of heads of state who were also in attendance for the Victory Day celebrations.

Minister of Tourism Khaled Ramy met with the Chairman of Abu Dhabi Tourism and Culture Authority, Sheikh Sultan bin Tahnoon Al Nahyan. “The visit also aimed to identify future steps to increase cooperation, and to take the strategic partnership between Abu Dhabi and Cairo to new heights, especially in the fields of tourism and culture,” a press release noted.

EGYPT IN THE NEWS

The lead story on Egypt in the foreign press on Saturday evening and leading into Sunday morning was news of a court upholding a verdict against former president Hosni Mubarak and his sons Alaa and Gamal Mubarak. Reuters notes at the top of their take on the story, however, that the three will likely not serve the three-year sentences in prison. CNN also focused on the fact that the former president will soon likely go free, (Read, autoplay video embedded).

Amos Hochstein, special envoy and coordinator for International Energy Affairs at the State Department, told Al-Monitor in a recent interview that the Obama administration is “working very closely with Egypt on their energy sector,” … to help the country deal with rolling blackouts. The United States is encouraging Egypt to integrate renewables and also to expand production and the import of natural gas to meet rising energy demand … According to him, Egypt … could increase its gas production by 25% in the next few years.” (Read)

Egypt gets a shout-out from fund managers with a focus on frontier markets in the Wall Street Journal’s Frontiers blog. ‘Frontier Reformers Promise Rich Returns for Patient Investors‘ takes note of recent economic reforms and sings from the standard hymnal on competitive advantages: “large, young and well-educated population … the demographics are fantastic … very low cost base.”

MENA Fund Manager has an overview of the Egyptian asset management industry, concluding by echoing a call that Cairo should position itself as a regional hub for African capital markets.

WHAT YOU CLICKED ON LAST WEEK

Aside from our photo of the week (depicting Erdogan’s reaction to someone not wanting to stick around for one of his harangues), the five most-clicked stories in Enterprise for the week of 3 May 2015 were:

• Egyptian graduates of world’s top universities meet El Sisi and a T20-produced video on Egypt 2030
• BBC Takeover: Bassem Youssef’s guide to the Middle East (BBC News)
• How western media would cover Baltimore if it happened elsewhere (Washington Post)
• Bake Rolz meets Beethoven (Edita, on Vimeo)
• Photos of the restoration of the Blue Mosque of Cairo (Aga Khan Foundation)

ENERGY, RENEWABLE ENERGY & SUBSIDY REFORM

Access Power to invest USD 600 mn in Egypt
Al Borsa | 06 May 2015
Access Power announced plans to invest USD 600 mn in Egypt over the next three years in renewable energy projects. The company is planning on generating 100MW from solar and wind powered plants next year using the feed-in-tariff. Access Power has already secured land for a solar power station project in Aswan and is set to sign an agreement for a wind farm in Suez in the next two weeks. According to Access’ CEO, the company is negotiating with international financiers including the IFC and EBRD to provide funding for its projects in Egypt. (Read in Arabic)

OIL & GAS

Bapteco’s Obayed field resumes production post-maintenance
Al Borsa | 06 May 2015
Production at Shell’s JV Bapetco’s Obayed field was halted due to maintenance operations, a source at EGAS told Al Borsa. The field produces 400 mcf per day and had operations restored on Thursday following a maintenance period that took place since 30 April. The EGAS source told Al Borsa that Obayed’s maintenance was delayed until the LNG cargoes arrived to Egypt in order to ensure regular gas supplies. (Read in Arabic)

Oil ministry to tender the import of butane and gasoline
Al Shorouk | 07 May 2015
The Ministry of Petroleum is set to issue a tender to import gasoline and butane for mid-this month to ensure supplies for the first quarter of FY2015/16 are present. Another tender for diesel and mazut will be delayed until the end of May. The ministry is currently waiting for the electricity sector to present its exact fuel demands for the year in order to issue another tender for them if needed – particularly as new power stations are expected to come online before the month’s end. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

Fruit and vegetable prices reduced by 20-25% at government outlets
Amwal Al Ghad and Al Mal | 07 May 2015 and 09 May 2015
Fruit and vegetable prices were reduced by 20-25% at government-owned outlets, Amwal Al Ghad reported. The price reduction was decreed by the supplies minister, Khaled Hanafy. Hanafy said the ministry is ready to flood the market with food items to ensure that prices remain low during Ramadan. (Read in Arabic) On Saturday, Hanafy reaffirmed his belief that fruit and vegetable prices would return to their normal levels in the near future. The minister attributed the spike in prices to annual harvest cycles. (Read in Arabic)

REAL ESTATE & HOUSING

Supplies ministry to tender 32 feddans in three governorates
Amwal Al Ghad | 07 May 2015
The domestic trade unit within the Ministry of Supplies announced it is tendering 32 feddans in three governorates for investment by the end of June. The ministry aims to create EGP 307.5 mn worth of investments on the allocated land. The land offered includes a 25 feddan plot in Assiut and a 5 feddan plot in Port Said. (Read in Arabic)

Finance Ministry requires banks to pay real estate tax on behalf of debtors
Al Mal | 09 May 2015
The Ministry of Finance has required banks to pay real estate taxes on behalf of clients that do not pay the money they owe for a housing unit, until a resolution is reached between the parties. That said, owners of the property will be responsible for the tax payments, once a resolution is reached with the bank. In light of their responsibility to pay real estate taxes, banks will be allotted 60 days to appeal the government’s valuation on property. The government determines the real estate tax that is owed on a unit, based on its valuation of the property. (Read in Arabic)

EGP 33 mn social housing project underway in Aswan
Al Mal | 08 May 2015
As part of the government’s countrywide social housing project, 11 residential building are under construction in Aswan at a cost of EGP 33 mn. Upon completion, the housing units will be distributed to citizens based on criteria which were previously outlined by the Ministry of Housing, reports Al Mal. In parallel, the government is also developing the drainage systems and  waterways of several Aswany villages at a cost of EGP 800,000. (Read in Arabic)

TOURISM

Travco to open four new hotels in 2015
Al Borsa | 07 May 2015
Travco announced it is opening four new hotels in Egypt in 2015 with an EGP 2.5 bn investment. This will bring up the total number of hotels operated by Travco to 49. The new hotels include the 1,300-room Jaz Makadi Aquaviva in Hurghada, which cost EGP 1.5 bn. Travco will also open two new hotels in Sharm El Sheikh as well as a 600-room hotel in Sahl Hashish. (Read in Arabic)

Tourism investor calls on government to impose tax on “cheap” hotel-owners
Youm7 | 09 May 2015
Dr. Atef Abdellatif, a member of the Marsa Alam and Sharm El Sheikh Investors’ Association, has called on the Egyptian government to impose a tax on hotel-owners who offer below market-prices to tourists. According to Abdellatif, these actions not only attract the wrong type of tourist to Egypt, but threaten the long-term future of the sector. “When the tourism industry recovers from the trauma it has suffered over the past four years, hotel owners will be unable to raise their prices to pre-revolution levels,” said Abdellatif. The government must take precautionary measures in order to protect the sector, concluded Abdellatif. (Read in Arabic)

12 mn tourist arrivals targeted in 2015, minister downplays operators’ losses
Al Mal | 07 May 2015
Khaled Ramy, the Minister of Tourism said he expects 11.5-12 mn tourists to have visited Egypt by the end of 2015. Ramy is happy with the current hotel reservation and occupancy rates saying they signal that the arrivals target will be reached. Ramy denied that tourism operators have been making significant losses insisting that the cumulative losses figure of USD 118 mn “is just reported in the media.” (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Railway accidents up 33.7% in 2014, CAPMAS says
Al Masry Al Youm | 07 May 2015
Railway accidents have increased by 33.7% y-o-y to 1,044 in 2014, according to CAPMAS. The accidents led to the death of 85 people and injured 68 throughout the year. CAPMAS attributed the increase in accidents to the worsening conditions of railway crossings. (Read in Arabic)

Egypt, European partners look to upgrade sewage and water systems in Upper Egypt
Al Borsa | 9 May 2015
The Egyptian government, in partnership with various European aid organizations and development funds, has allocated for EUR 275 mn for the execution of 65 potable water(89.1 mn) and sewage system (EUR 185.9 mn) projects in Upper Egypt. The projects are located in the governorates of Minya, Assiut, Sohag, and Qena, and are expected to benefit approximately 15 mn citizens, upon completion. Work on the projects is set to begin in the coming weeks and will take five years to complete, reports Al Borsa. (Read in Arabic)

29 air conditioned trains to be introduced within 2 years
Al Borsa | 09 May 2015
In an effort to improve services for its customers, the Egyptian National Railway (ENR) announced that it will issue a EUR 126 mn tender for the purchase of 6 diesel locomotives within the upcoming 4 months. The World Bank will reportedly provide the financing for the purchase. Additionally, ENR expects to receive 212 air conditioned passenger cars from SEMAF – the national railway equipment factory – throughout May. ENR will introduce the its initial fleet of air conditioned passenger cars to its operating fleet in June, with the goal of having 29 air conditioned trains under operation within two years.

EGYPT POLITICS + ECONOMICS

Ministry of Finance: State employees’ wages up 17.6% in past nine months
Youm7 | 09 May 2015
A report by the Ministry of Finance shows that wages for state employees increased 17.6%, or a total of EGP 143.3 bn in the 2014-2015 fiscal year (July 2014-March 2015). Minister of Planning Ashraf El Araby said that the rise in state employees serves as a great challenge facing administrative planning strategies. According to El Aaraby, 6.36 mn employees in 24,449 administrative units currently make up 26% (totaling EGP 207 bn) of total budget for the 2014-2015 fiscal year. (Read in Arabic)

SFD plans expansion of microfinance services in 2015
Amwal Al Ghad | 09 May 2015
The Social Fund for Development provided EGP 485 mn in financing for Egyptian microenterprise projects in the first quarter, benefitting 48,000 individuals, said Niveen Badr El Deen, vice president of the fund’s microfinance division. This is a sharp increase from the EGP 203 mn that was spent in the same period last year. The fund intends to offer new microfinance products to women and businesses involved in agricultural projects in 2015, added El Badr. The SFD will finance 1.2 EGP bn worth of projects, issuing approximately 120,000 loans, before the end of the year, concluded Badreldeen.

Ministers in dispute of next year’s budget -Al Mal
Al Mal | 07 May 2015
The cabinet’s economic group members are having severe disagreements over issues relating to FY2015/16’s budget, Al Mal reported. The disagreements arose following the finance ministry’s insistence on reducing the amounts of funds that get channeled to the ministries. Minister Hany Dimian asked the other ministers to review their outlays saying that the budget deficit went over 11%, surpassing the target of 10% of GDP. The final draft of the budget will not be passed on to the cabinet and the presidency until the end of the week. (Read in Arabic)

State Council approves creating committee to retrieve smuggled funds
Amwal Al Ghad | 06 May 2015
The State Council approved the creation of a committee responsible for retrieving Egyptian funds smuggled abroad. The committee will be headed by the prosecutor general and aims to return funds that were obtained illegally. The law has been sent to the Council of Minister for their approval. (Read in Arabic)

ON YOUR WAY OUT

The Egyptian National Circus’ lions have not been getting enough food rations, a trainer complained to Al Borsa. She blamed the recurrent attacks by the lions on the circus’ trainers on the food shortage.Commentary: In reality, wild animals in captivity may attack humans at any time, anywhere, as: “Wild animals behave instinctively and unpredictably. In more than 35 dangerous incidents since 2000, circus animals have run amok through streets, crashed into buildings, attacked members of the public, and killed and injured handlers,” according to Last Chance for Animals.

Two policemen were shot dead on Thursday “after exchanging fire with smugglers at the 10th border post in the village of Matalah in Rafah,” the MOI said in a statement quoted by Reuters.

The Finance Minister has issued new regulations to facilitate the application of real estate taxes and “solve any existing issues with the banking system,” reports Al Masry Al Youm, citing Tarek Farag, a tax advisor to ministry.

Ain Sokhna Port has received its first shipment of Spanish LNG aboard the vessel Colviger. The ship was carrying a load of 156,500 cubic meters, plus other goods. (Read in Arabic or in English)

BY THE NUMBERS

USD CBE auction (Thursday, 07 May): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Saturday, 09 May): 7.68 (+0.01 from Wednesday, 06 May)

EGX30 (Thursday): 8,742.42 (-0.16%)
Turnover: EGP 411.3 mn

WTI: USD 59.39 (+0.76%)
Brent: USD 65.39 (-0.23%)

TASI: 9,717.90 (-0.65%)
ADX: 4,554.88 (-0.24%)
DFM: 4,103.49 (-0.27%)
KSE Weighted Index: 431.45 (0.49%)
QE: 12,282.17 (-0.42%)
MSM: 6,317.66 (-0.55%)