New ambassadors to DC, Tel Aviv, Holy See in wide-ranging shuffle. MCIT still trying to tame Telecom Egypt. Fitch affirms ratings. Cold shoulder to IMF? ERC inks solar farm deal for Sahl Hasheesh. Apache’s Eichler to retire, led growth in Egypt. Spotlights on new legislation.
WHAT WE’RE TRACKING TODAY
Maghreb will be at 7:00pm CLT today, while fajr will be at 3:09am CLT. And in Enterprise’s version of Ramadaniyat, today we ask: Have you been plagued by corporate iftar and sohour invitations yet?
The committee drafting a new Higher Education Law will meet today to discuss articles regulating private universities and the management of exchange and study abroad programs, said committee chairman Maged Al-Qamary of Kafr El Sheikh University. The law will also seek to strengthen ties between universities and industry, he added.
WHAT WE’RE TRACKING THIS WEEK
Cabinet is chipping away at its legislative backlog — see our spotlights, below, on the civil service and elections acts as well as coverage of the anti-terror law in our new Legislation + Policy section. Against that backdrop, we’re looking for movement this week on these fronts:
- Once again, the executive regulations for the new investment law are due “within days,” Investment Minister Ashraf Salman tells Al-Ahram in an interview getting the front page (digital) treatment this morning.
- A decree authorizing and funding a maintenance program for public schools this summer;
- A presidential decree approving a law that will raise pension benefits to retirees by 10% of their salaries. The move is expected to cost the state up to EGP 10 bn, according to Youm7, and should be announced this week.
LAST NIGHT’S TALK SHOWS
CBC Egypt aired the cooking program El Chef wa Mofeeda in place of Hona Al Asema, hosted by the titular but actually useless Mofeeda Sheeha, who this guest reviewer had previously stated was the unidentified and unidentifiable co-host next to Khairy Ramadan in a previous episode of Hona Al Asema. Now that the issue of her identity is resolved, we reserve the right to randomly switch back and forth by addressing her by her name, or not.
Amr Adeeb, meanwhile, previewed Monday night’s episode, saying that he will host in his studio Osama Ghazali El Harb, veteran politician and founder of the liberal Democratic Front Party. Adeeb plans on trying to reconcile El Harb with Sada El Balad television host Ahmed Moussa, who was hit with a two-year prison sentence resulting from the former’s lawsuit for slander. In an episode of his program, Ahmed Moussa accused Ghazali El Harb of receiving foreign funding and for conspiring against Egypt. It’s unknown if Adeeb plans or is able to have Moussa call in to his program on Monday night, but Adeeb has brokered similar reconciliation sessions, with the last one being between Ahmed Moussa and Youssef El Housseiny.
With regard to a small vigil held by women in front of Ittihadiya on Sunday calling for the release of protesters who were arrested in violation of the protest law, Adeeb made a remarkable call for the release of all female prisoners who were detained in contravention of said law. “Why wait until the Parliament convenes for this to happen? There’s no need to wait.”
Adeeb spent the rest of his program interviewing religious scholar Saad El Hilaly. Cue the glazing-over of eyes.
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Ambassadorial shakeup: President Abdel Fattah El Sisi has shuffled the ranks ambassadors and consuls at more than a dozen Egyptian diplomatic missions from Asia to the North America. The shuffle is front-page news across the media spectrum this morning, with coverage primarily being pickups of a statement issued tostate-run news agency MENA. Additional information can also be found on this Youm7 article. Highlights of the shuffle include:
- Yasser Reda becomes ambassador in Washington, DC, where he succeeds Mohamed Tawfik. Reda was previously Assistant Foreign Minister for Cabinet Affairs and has served in China, Cyprus, Iraq, Italy, and Germany.
- Hazem Khairat, the Foreign Minister’s advisor on diplomatic and consular affairs, becomes Egypt’s first ambassador to Tel Aviv in nearly three years; his predecessor was recalled in 2012 to protest Israel’s invasion of Gaza.
- Hatem Seif El Nasr has been tapped to become the next ambassador to the Holy See. Seif El Nasr was at the time of his appointment the country’s Assistant Foreign Minister for European Affairs.
- Foreign Ministry Spokesman Badr Abdelati becomes ambassador to Berlin; there was no word at press time who would be replacing Abdelati as spokesman in Cairo.
- Olfat Farah, the Foreign Minister’s advisor on cultural affairs, has been appointed Egypt’s Ambassador to Croatia.
- Sabry Magdy, the Foreign Minister’s advisor on African affairs, has been appointed Egypt’s Ambassador to Oman.
- Abdelrahman Salah, the Foreign Minister’s advisor on Arab Affairs, has been appointed ambassador to the Czech Republic.
- Sherif Shaheen, the Foreign Minister’s advisor on Financial and Administrative affairs, has been appointed as ambassador to Pakistan.
The news of Ambassador Hazem Khairat’s appointment as Egypt’s envoy to Israel is the top story on Egypt in the foreign press going into Monday morning, with the Israeli media and political leadership welcoming the move. Israeli Prime Minister Benjamin Netanyahu was quoted as saying: “This is an important piece of news. We appreciate it … It’s something that has been, that is deeply welcomed in Israel and I think it’s very good for cementing the peace that exists between Egypt and Israel.” In their take on the announcement, The Jerusalem Post notes that the Israeli Foreign Minister Haim Koren has become the first Israeli FM to offer Ramadan greetings to the people of Egypt in Arabic on their foreign ministry’s YouTube channel, (Watch in Arabic, running time: 28 seconds)
Is the Communications and IT Ministry moving against TE? In the latest gambit in MCIT’s bid to tame Telecom Egypt. Al-Borsa cites an anonymous source at the ministry as saying it has lodged a formal request with the National Telecommunications Regulatory Authority (NTRA) asking the regulator to formally look into “TE’s [alleged] monopolistic practices” in the ISP sector. The source told the paper the practices have helped Telecom Egypt subsidiary TE Data accumulate at 70% share of the market for internet access. The NTRA said it will also look in the more than 20,000 complaints it has received from TE Data’s customers, and TE has denied it has engaged in unfair business practices, the paper said. By day’s end, another faction at MCIT had taken to Al-Mal to deny — anonymously, of course — that the ministry had asked the regulator to investigate TE or TE Data. TE Data itself seems as aggrieved by the ongoing fight over market share and prices as are rival ISPs. A source at TE complained to Al-Borsa that MICT was unfairly pressuring TE Data to charge other ISPs lower prices for access to its national infrastructure. The TE source claimed MCIT and NTRA are giving the smaller ISPs preferential treatment and that their role should be purely of a policy / regulatory nature. Al Masry Al Youm reports that CIT Minister Khaled Negm is in a race against time to deliver the cheaper internet access rates he had promised would be in effect before month’s end. The publication says it obtained classified documents in which the NTRA urged TE to accept lower prices today and negotiate three-year agreements with ISPs at higher prices.
Fitch Ratings has affirmed Egypt’s Long-term foreign and local currency Issuer Default Ratings (IDR) at ‘B’ with a Stable Outlook. “Egypt’s ratings balance a high fiscal deficit and debt/GDP ratio, low import cover and recent volatile political history with low external debt and recent commitment to a wide-ranging economic reform programme. Fiscal consolidation, stronger growth and lower commodity prices will reduce the budget deficit, although it will remain large compared with peers,” Fitch said. Commenting on the political situation: “Political stability has improved under President Sisi … Nonetheless, significant sections of the population are disaffected, there are widespread grievances over some public services and there is serious sporadic violence in North Sinai. World Bank governance indicators have deteriorated in recent years and are below peers.”
Not so fast, says EK Holding: EK Holding sent a disclosure to the EGX denying the news that broke on Al Mal on Thursday, that South Valley Cement’s negotiations to acquire EK Holdings’ stake in the Building Materials Industries Company (BMIC) are on ice.
Cold shoulder to IMF? A reduction in foreign grants to Egypt forecast in the FY2015-16 budget does not mean Egypt will have to resort to IMF funding, a government source told Al Ahram. The decrease, in itself, is a good sign, the source added, as it shows that Egypt is willing to rely on its own resources. The source added that the government will have to increase its tax revenues from 15% of GDP into the 22-25% seen in other emerging markets.
ERC’s Sahl Hasheesh will be home to KarmSolar solar farm: Egyptian Resorts Company has inked a long-term land lease agreement to provide KarmSolar with around 50,000 sqm on which to build a solar energy installation in Sahl Hasheesh, the high-profile Red Sea community. The solar farm will have a minimum generation capacity of 2 MW and will cost USD 2.5 mn to build. “The agreement gives KarmSolar the right to use the land, for a period of 27 years, during which time ERC will be entitled to a 2% share of revenues earned through the feed-in tariff, as mandated by the FIT regulations,” company statement noted. KarmSolar is a private Egyptian company dedicated to providing innovative off-grid solar energy solutions.
MOVES- Apache Corporation announced the retirement of Rodney J. Eichler, executive vice president and executive advisor to the chief executive officer. According a company disclosure, Apache’s CEO said Eichler “was instrumental in building Apache’s position in Egypt’s Western Desert” and that his contributions included helping to build and shape the company’s position and significant growth in Egypt as the country manager. Eichler served in Egypt for 12 years and returned to Houston in 2011.
Shaker briefs El Sisi on electricity situation, Siemens project: It may be of little comfort to industrial consumers who have been effectively cut off, as we noted yesterday, but Electricity Minister Mohamed Shaker has confirmed the national grid had a 2.9 GW surplus during peak hours on Saturday, with 28.6 GW generated against consumption of just 25.7 GW. Ittihadiya confirmed the figure in its readout of a meetingbetween the minister and President Abdel Fattah El Sisi released yesterday. The statement says Shaker attributed an unspecified increase in generation capacity to both maintenance work and the addition of 1.6 GW of new capacity. Stations coming online in the next two months will add another 2.1 GW of generation capacity. Shaker also confirmed that his ministry has agreed to pay the Siemens-led consortium building three power station a 35% down payment of EUR 900 mn. The first, 4.4 GW Siemens power station will come online in December 2016, with all three to be up and running by May 2018, delivering 14.4 GW.
Ikhwan Watch: FJP Facebook page shares link suggesting that the Coptic Church is behind a recent government decision to end the broadcast of taraweeh prayers on external loudspeakers. (Read in Eshhad)
The FT says the world is now experiencing a New Oil Order that is “being shaped by one of the most dramatic price movements of recent times — a near halving since June 2014 — that has changed the corporate landscape for oil companies, created a windfall of lower energy costs for oil consumers and has huge implications for the economies of oil exporters.” Sign up here to follow the New Oil Order series, where the FT explores “the implications of this dramatic change.”
Saudi Leaks in context: Those of you digging into the Saudi Leaks — the 60k cables (and counting) leaked by Saudi dissidents / Houthis / Iran (take your pick) — may want to have a read through Marc Lynch’s take for the Washington Post’s Monkey Cage blog. Amid a wider discussion of why Lynch thinks the Saudi Leaks “might really matter” is this nugget: “The Saudi government seems to have acknowledged the authenticity of the documents in general but warns (probably correctly) that some fake documents may be included among the authentic ones. Assessing them isn’t made any easier by the way the documents have been released, as single pages of multi-page documents with much important contextual information missing. Information found in these documents needs to be kept in perspective: a Saudi diplomatic cable about, say, Qatari activism in Yemen could be accurate, it could be a diplomat’s speculation or it could be accurately reporting information from an intelligence source that is itself wrong. Poor reporting in an official document might be revealing about the perceptions of officials, but it could still be poor analysis or an unreliable guide to policy.”
“Do u know what Obama Coffee is? Black and weak.” Such is the ‘joke’ posted to Twitter — and then deleted within five minutes — by Judy Mozes, the wife of Israeli Interior Minister Silvan Shalom. AFP has more on the micro-flap. Barack can rest easy, though: It seems she doesn’t like her husband’s boss much, either.
Light bulbs for spooks: Customs officials at Cairo International Airport intercepted a shipment of made-in-China light bulbs with an extra feature: Built-in spy cameras, according to Ahram Gate.
SPOTLIGHT ON: Civil service act
The Civil Service act and its executive regulations are up for national debate: The Ministry of Planning, which has yet to issue final executive regulations for the Civil Service Law, has called for a national debate on Saturday on the law and its executive regulations. The act, which would govern everything from how civil servants are hired and promoted to when they can retire — including early retirement provisions — is set to go into effect on 1 July with the new budget year.
The general public can now discuss the proposed executive regulations through an online portal which provides an email and twitter hashtag to address the government. Youm7 has also created a service by which the public can engage with the Planning Ministry on the regulations.
The Executive Regulations consist of 22 articles outlining the requirements and standards for hiring in the civil service. The full text of the executive regulations and the law is here in Arabic. Highlights include:
- There will be formal grades and base salaries for civil services, with specified bonus compensation and pension benefits.
- The new regulations allow for retirement as early as age 50, while employees aged 55 who have participated in the health insurance plan for 20 years to be granted promotion and higher retirement benefits if they pull the pin early.
- The promotion system has also been streamlined, as under the new regulations an employee is eligible to be promoted to a new level every three years as opposed to a complex system whereby eligibility for first level promotions came after eight years and six for a second-level promotion.
- The promotions track will be suspended for employees who take long-term leave.
- Raise increments for all civil servants will be set at unified 5% for all agencies and ministries; previous practice had seen raises vary by agency of employment.
Controversies: The most controversial element of the new law is the exclusion of teachers, which outraged the Egyptian Teachers’ Association (ETA), Youm7 reports. ETA chief Abdel Nasser Ismail says the move places teachers at a significant disadvantage and will harm the education system. He’s calling on the Minister of Education to push for teachers to be included in the Civil Service Law.
A MESSAGE FROM PHAROS HOLDING
Alex Containers Beats Expectations with Impressive Set of Results in 11M FY15
Alexandria Containers and Cargo Handling recorded a net profit of EGP 775.1 mn in the 11 months ending May 2015, an impressive 64.2% y-o-y surge, mainly on the back of improvements in core operations and partially due to capital and FX Gains. The firm handled 932,559 containers at an average revenue of EGP 1,203 per container during the period, showing volume and revenue growth of 14.8% and 22.8% respectively and surpassing initial projections.
According to Pharos Research, the company is trading at an exceptionally low earnings multiple of 6.7x – based on 11M FY15 earnings and Tuesday’s closing price. As a result, Pharos believes a material upgrade in the company’s FV estimate is warranted. For more details click here.
SPOTLIGHT ON Parliamentary and Election Laws
Changes and approvals of electoral laws: The State Council has reviewed five draft laws governing parliamentary elections which will then go to the Legislative Reform Committee for approval. Among the most important of these is the law dividing the electoral districts of Greater Cairo and merging two electoral districts in Qena. As it stands, there are 205 electoral districts and according to Youm7, the move would not change the number of districts but would only affect the organization of the polling stations.
Also approved: Limits on campaign spending. Salah Fawzy, a member of the committee revising the elections laws, says a cap of EGP 500,000 will be placed on spending by independent candidates, while the advertising budgets of an electoral list of 15 affiliated candidates would be capped at EGP 2.5 mn. Lists of 45 candidates would have a ceiling of EGP 7 mn.
Rights and privileges of parliamentarians: While a number of politicians such as Bahaa El Din Abu Shaka, General Secretary of Al Wafd party, have praised the efforts of the State Council’s legislative committee, they have expressed concerns that these laws can be declared unconstitutional by the Supreme Constitutional Court and are not protected from appeals, which makes them fleeting at best and counter-productive at worst.
Act protecting Parliament from dissolution: A new piece of legislation would make it effectively impossible for the Supreme Constitutional Court to order a re-run of elections for the House of Representatives if the court should strike down any piece of electoral legislation after MPs are seated and the new House of Reps constituted. Judicial review of laws and regulations would be implemented in the following round of elections, Al Shorouk reports.
That last bit isn’t without its critics: Alaa Abed, a leader of the Free Egyptians (Masryoon Ahrar) Party says there would be no need for a law protecting parliament from dissolution if electoral legislation were (a) well-written in the first instance and (b) took into consideration the desires of political parties. Supporters of the law include Reform and Development Party chief Mohamed Anwar El Sadat, Al-Dostor says.
EGYPT IN THE NEWS
Al Jazeera journalist detained in Germany on Egypt’s request: Ahmed Mansour was detained on Egypt’s request according to the German public prosecutor’s office as reported by Reuters. Mansour was sentenced in absentia in Egypt to 15 years in prison on charges of torturing a lawyer in 2011 in Tahrir Square. (Read)
Saudi Wikileak cables allege Ikhwani Deputy Guide Khairat El Shater tried to ransom Hosni Mubarak to Saudi for USD 10 bn; Egypt, Sudan plotted assassination attempt on the life of the South Sudanese president: Ikhwani soapbox Middle East Eye reports that among the 60,000 documents comprising the alleged Saudi Wikileaks which have been released thus far, (of what is stated to be 500,000 documents in total) one such report claims to be a letter from Saudi Foreign Minister Saud al-Faisal, writing to the Saudi King, about a plan to kill the South Sudanese president Salva Kiir Mayardit. From MEE: “According to the document text, Egypt’s intelligence apparatus sent “three of its most dangerous agents” to stay in the upmarket Khartoum district of Garden City. “The aim of sending them to Khartoum is to formulate a joint plan with the Sudanese intelligence for the elimination and assassination” of Kiir and some of his aides, Faisal allegedly wrote. (Read) Another cable alleges that Khairat El Shater attempted to “ransom” the release of former president Hosni Mubarak for USD 10 bn to Saudi Arabia, but that this was later deemed “not a good idea,” as reported by Ahram Online. (Read)
The Farce Behind Morsi’s Death Sentence: Jon Lee Anderson in The New Yorker writes a scathing critique of Egypt’s political class in The Farce Behind Morsi’s Death Sentence. He concludes by issuing an appeal to reason: “Morsi should not be hanged or kept eternally in prison but allowed to leave into exile. He is no Ayatollah Khomeini, some kind of sage who might yet return to his homeland to rule like a Biblical wraith. Morsi will likely fade into obscurity in freedom, grow in stature in imprisonment, or soar to martyrdom if he is killed.” (Read)
The Economist joins the bandwagon and writes about the dilapidated state of Egyptian hospitals, noting that poor working conditions and minimal compensation led to having “more Egyptian doctors in Saudi Arabia than there are in Egypt’s primary-care system” with patients being the main victims as a result.
China’s economic influence in the Middle East has been growing steadily, but this means that clearer political stances will have to be made as well. “Bahrain, Egypt, Iran and Saudi Arabia all import more from China than from any other country. China is the top destination for exports from several countries in the region too, including Iran, Oman and Saudi Arabia. In April Qatar opened the Middle East’s first clearing bank to handle transactions in yuan,” The Economist writes about the closer ties between China and the Arab world now. Despite refraining from commenting on regional political developments, as “its economic interests grow, China may be sucked into the Middle East’s snake-pit politics, whether it likes it or not.”
Egyptian authorities will open the Rafah border crossing in both directions for three days between Tuesday and Thursday for humanitarian aid.
Gas deals with Egypt is not good for Cyprus, In-Cyprus says
In-Cyprus | 19 June 2015
“Gas development delays and low prices endanger Egyptian deals for Cyprus and Israel,” Charles Ellinas writes for In-Cyprus. “Global natural gas prices are falling and will continue to fall,” a senior executive at Union Fenosa Gas said stressing that Israel should take matters into its own hand to push gas exports as UFG is no longer willing to finance the pipeline connecting the Tamar field to Egypt. The problems are compounded with ambiguity surrounding the future of the Idku liquefaction plant with a report from EY indicating that “Egypt’s priority to supply gas to its local economy, combined with the shaky state of the country’s gas reserves, and its debt to the gas companies, will lead Royal Dutch Shell to sell British Gas’s (BG) liquefaction facility in Idku.” This would jeopardizes the deal signed with Leviathan. Ellinas adds that given Egypt’s reported gas purchase prices of USD 7-8 per mmBtu, the country will be making losses by as much as USD 3-4 per mmBtu. Similar problems would apply to Cypriot gas, he adds, given market developments and as long as LNG prices remain low, thereby endangering regional gas deals. (Read)
RWE promotes cooperation with Abu Dhabi, cuts costs
Business Times | 19 June 2015
RWE is promoting cooperation in renewable energy technology with Abu Dhabi, which is trying to hit climate targets, CEO Peter Terium said. RWE would be a natural partner to the Abu Dhabi-based investors, whom Terium did not name, with whom RWE is in talks with about possibly taking a stake of the company. “It’s about designing and operating a system, possibly also for other emirates, Egypt, other parts of the Arab world and up to northern Africa,” the CEO added. RWE is seeking a minority stake in solar and wind farms, grids, energy efficiency and the appropriate market design, Terium noted, adding that it could be done at project level or a joint venture. (Read)
Dana Gas to hold board meeting on 24 June, discuss Egypt projects
ADX Disclosure | 21 June 2015
Dana Gas sent the ADX disclosure to inform it that its next board meeting will be held on 24 June. The meeting’s agenda includes the assessment of progress in projects in Egypt, UAE, and Kurdistan and an update on the receivables from Egypt and Kurdistan. The board will also discuss the 2015 budget and ratifying the 2015 financial statements. (Read)
Water Resources and Agriculture ministries sign cooperation protocol with Ministry of Agriculture
Al Masry Al Youm | 21 June 2015
Ministers of Agriculture and Water Resources signed a cooperation protocol to utilize agricultural drainage pool water in aquaculture in the New Valley governorate. The latter added that the ministry begun digging artesian wells for its numerous activities, which led to a surplus of agricultural water supply that later had to be stored in pools. (Read in Arabic)
BASIC MATERIALS & COMMODITIES
Hanafi: Damietta grain logistics center documentation ready for review
Al-Mal | 21 June 2015
The final draft of the project plan for the international grain-handling and logistics center the Sisi administration wants to build in Damietta is ready for review by Cabinet and, afterward, the president, Supply and Domestic Trade Minister Khaled Hanafi said yesterday on the sidelines of an unrelated meeting. (Read in Arabic)
Russia’s Sistema offers to supply wheat to Egypt to be paid for in Rubles
Al Masry Al Youm | 21 June 2015
Egypt received an offer from Russia’s Sistema to supply it with wheat that would be paid for in Russian Ruble. Presumably, the wheat will be coming through Sistema’s RZ Agro Holding. Industry and Trade Minister Mounir Fakhry Abdel Nour is currently assessing the offer. Sistema is also looking to invest in tourism in the Red Sea area, Al Masry Al Youm reported. (Read in Arabic)
Arafa reports 9% top-line growth, slight dip on bottom line
Company statement | 21 June 2015
Arafa Holding, the EGX-listed fashion player that owns the Concrete brand and a significant stake in Italy’s Pal Zileri fashion label, reported consolidated revenues of USD 62.0 mn in 1Q2015, up 9% from the same period of last year. An emailed statement suggests profits dipped fractionally to USD 1.17 mn in the quarter just ended from USD 1.23 mn a year ago. The group’s luxury segment led top-line growth, with a 13.7% rise in revenues on the back of standout performances by local retailer Concrete and luxury garment factory Egyptian Fashion Garments SAE.
HEALTH + EDUCATION
Medical Syndicate calls for fairness in application of Medical Incentives Clause
Veto Gate | 21 June 2015
The Egyptian Medical Syndicate has called on the Health Insurance Organization (administrator of the country’s universal healthcare hospitals) to address complaints by medical practitioners working for the HIO alleging unfair distribution of bonuses under the incentives clause of the Medical Practitioners Law (Law 14/2014). They also allege that HIO has long-withheld bonuses due to a lack of funds, despite increased taxes on cigarettes and other funds which are allocated to the system. The EMS claims that these discriminatory policies are leading to a brain drain in the universal healthcare system (Read in Arabic)
REAL ESTATE + HOUSING
Urban Communities Authority allocates EGP 7.8 bn to Dar Misr
Amwal Al Ghad | 21 June 2015
The New Urban Communities Authority (NUCA) has allocated EGP 7.8 bn from the 2015-2016 budget to completing housing units in the mid-income housing project Dar Misr within the next fiscal year, according to NUCA vice president for development of new cities Kamal Fahmy. NUCA has been allocated a total of EGP 28 bn in the new state budget.
TELECOMS + ICT
4Mbps minimum internet speed by end of 2016
Amwal Al Ghad | 21 June 2015
The CIT Ministry aims to boost minimum internet speed to 4Mbps by the end of 2016. The Ministry’s strategy aims at achieving a 1Mbps minimum speed by the end of this month, and a 2Mbps minimum speed in January 2016, according to assistant CIT minister Khaled Sherif. He added that Egypt does not appear among the International Telecommunications Union’s countries likely to develop statistics because of slow internet connections. (Read in Arabic)
AUTOMOTIVE + TRANSPORTATION
Nag Hammadi Railroad crossing allocated extra EGP 105 mn
Al Mal | 21 June 2015
The Ministry of Local Development allocated an extra EGP 105 mn to the second phase of the Nag Hammadi railroad crossing construction, according to local development minister, Adel Labib. The construction will involve erecting a bridge for vehicles, as well as a bridge for pedestrians bringing the total cost of the project to EGP 245 mn. (Read in Arabic)
BANKING + FINANCE
CBE assessing initiative to support energy sector financing
Al Borsa | 21 June 2015
The CBE is assessing implementing an initiative to support financing energy projects, Al Borsa reported. The CBE will discuss with banks the financing structures of companies operating in the energy sector and will assess their vision for it. A CBE executive said the drivers behind the initiative are the low financing volumes being directed at energy companies due to the elevated risk levels. The exact details of the initiative are yet to be made public. (Read in Arabic)
NBE studies postponing installments from tourism sector clients for a year
Amwal Al Ghad | 21 June 2015
The National Bank of Egypt is studying postponing installments from non-performing loan clients in the tourism sector. The decision comes after the Central Bank of Egypt (CBE) extended the initiative to support the tourism sector for a third time by one year, ending in June 2016. (Read in Arabic)
AIB studies EGP 1 bn funding of government sectors
Al Borsa | 21 June 2015
The Arab Investment Bank is studying EGP 1 bn in funding to the energy, electricity and real estate sectors, according the AIB Chairman Hani Seif El Nasr. AIB aims to grow its loan portfolio by 25% to reach EGP 5 bn by the end of this year, from EGP 4 bn last year, he added. (Read in Arabic)
EBRD to lend QNB, Bank Audi USD 200 mn
Al Borsa | 21 June 2015
The EBRD intends to lend QNB USD 140 mn and Bank Audi-Egypt USD 60 mn to fund SMEs and support trade finance. USD 100 mn of QNB’s loan will go towards financing SME projects with the remainder to support the extension of letters of credit and guarantee and Bank Audi’s loan will be an even split. According to the chief of the EBRD, the bank is looking to expand its funding for the SME sector in Egypt. (Read in Arabic)
OTHER BUSINESS NEWS OF NOTE
FTA talks with Eurasian Economic Union to start 10 September
Ahram Gate | 20 June 2015
Free-trade talks between Egypt and the Eurasian Economic Union will start on 10 September 2015, Trade and Industry Minister Mounir Abdelnour confirmed on the sidelines of the St. Petersburg International Economic Forum. The Eurasian Economic Union, which came into being only last year, includes Russia, Armenia, Kazakhstan, and Belarus. EEU’s official site is here, and a fairly extensive Wikipedia entry on it is here. (Read in Arabic)
Shanghai Chamber of Commerce to sign MoU with EBA
Al Masry Al Youm | 21 June 2015
Shanghai Chamber of Commerce to sign MoU with Egyptian Businessmen’s Association, according to EBA spokesperson Mohamed Yousef. He added that the MoU is meant to strengthen ties and promote trade activity between the two countries. (Read in Arabic)
LEGISLATION + POLICY
Legislative Reform Committee reviewing the draft terrorism law
Youm7 | 21 June 2015
The Justice Ministry’s draft of the Terrorism Law has entered its final phase of approval and is being reviewed by the Legislative Reform Committee of the State Council. The new law, which consists of 52 articles in two parts, seeks to define terrorism and its associated activities, increasing the power of the state to combat it, and meting out harsher punishments. New additions to preexisting regulations include punishments of no less than five years in prison for those promoting or participating in terrorist propaganda in the internet and social media. The new law will also seek the death penalty for individuals or organization that finance terrorism. Definition of acts of terrorism are broad and are defined as any act of deliberate public disruption, opening the door for the inclusion of protests. (Read in Arabic)
New Franchises Law to come into effect in July
Al Ahram | 21 June 2015
A draft of a new law governing the application of franchises in Egypt will be completed by July, said Tarek Hamza, the head of the Ministry of Trade’s Errada Initiative. Speaking at a Business Climate workshop held under the auspices of the minister of trade, Hamza also spoke of Errada’s desire to conduct an impact assessment of the effects of this law, which would include proposals for possible alternatives to organize the franchise system. (Read in Arabic)
Tourism Chamber of Commerce calls for amending Chambers of Commerce Law
Al Shorouk News | 21 June 2015
The Tourism Chamber of Commerce called for the amendment of the presidentially-decreed Law 22 of the year 2015 governing the activities of the Chambers of Commerce, to allow the different chambers to invest their funds as they see fit. The chamber is also planning a legal mechanism governing e-visas, said chamber head Talib Al Minawy. (Read in Arabic)
EGYPT POLITICS + ECONOMICS
Finance Ministry allocated EGP 4 bn in emergency funding to government sectors
Al Borsa | 21 June 2015
Finance Minister Hany Dimian approved disbursing an additional EGP 4 bn in emergency funding to the Ministries of Supply, Electricity, Petroleum and Mineral Resources, and Transport. The General Authority for Supply Commodities, a Ministry of Supply body, has been allotted the lion’s share of the funds, receiving EGP 3.5 bn. A total of EGP 1 bn of these funds will be used to provide additional financial support for subsidized staple foods, all of which are available for purchase using ration cards. The Ministry of Petroleum and Mineral Resources has been allotted EGP 158.6 mn, which will be used to connect 74354 homes to the natural gas grid. (Read in Arabic)
Aboul-Fotouh’s initiative met with criticism from political parties
Ahram Online | 21 June 2015
Former soft-Islamist presidential candidate Abdel-Moneim Aboul-Fotouh’s political initiative suggesting early presidential elections has met with wide criticism. The initiative calls for appointing a consensual independent prime minister while a president is elected within the year. The initiative was rejected by the Egyptian Social Democratic Party, as well as the Democratic Alliance for Civil Forces. Al Wafd’s vice president Hossam El Khouly called the initiative “insane,” while secretary general of Al Nour party Shaaban Abd El Aleem said it would not find a “scope for discussion.” (Read)
ON YOUR WAY OUT
Rio-bound Egyptian swimmer beats own African record at US race. Twenty-year-old Farida Osmanbeat her own record time in the women’s 50-meter fly at a race in Santa Clara, California, on Saturday. The time of 26.08 saw Osman move up to twelfth-place in the world rankings this year. Osman, who finished forty-second in the 50 meter freestyle in the 2012 London Olympics, will contest the 2016 Rio de Janeiro Summer Olympics. The games get underway on Friday, 5 August 2016 (or about 410 days from now, by the time you’re reading this).
My, do we love land reclamation. So much it’s sometimes hard not to wonder whether we’ve reclaimed the entire Egyptian land-mass at least two-times over. This time around, the Sisi administration is looking to recondition 1 mn feddans out of an eventual total of 4 mn that will be earmarked to help the nation “manage population growth and sustainable agriculture” hand-in-hand. The issue was the subject of a sit-down between President Abdel Fattah El Sisi and Prime Minister Ibrahim Mahlab as well as Housing Minister Moustafa Madbouli, Al-Mal reports.
Vegetable prices have unexpectedly fallen since the start of Ramadan, reports Al Borsa. Vendors attributed this decline to drop in the demand of consumers who purchased all of their necessary food items in the week leading up to the holy month. That said, Vendors anticipate that both demand and prices will return to their normal levels by Tuesday of this week. Conversely, fruit prices have witnessed an overall countrywide increase, which has been caused in large part by a rise in temperature.
BY THE NUMBERS
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