WHAT WE’RE TRACKING TODAY

Happy fiscal new year: Today is the beginning of the state’s 2015-16 fiscal year. Government banks and the EGX are off, and President Abdel Fattah El Sisi is yet to approve a budget for the new fiscal year — a budget that looks like it may yet include fuel price hikes. More below.

The IMF announced at a few minutes after midnight today that Greece is “in arrears” (read: has defaulted) after failing to make a USD 1.7 bn payment that was due yesterday, making it the first developed nation to miss a payment to the IMF. EU finance ministers had rejected a request for a new bailout, with the European ministers set to meet on Wednesday to discuss the situation. Greek Finance Minister Yanis Varoufakis said to the Washington Post that he believes Greece has “excellent legal grounds” to resist any calls to leave the euro, saying that the Greek government could take its case to the European Court of Justice. (Read)

Apple has launched its all-you-can-consume Music service, which mixes Spotify with Pandora and throws in a 24/7 global radio station curated by real, live human beings for good measure. The first three months are free, then it switches to a USD 10 per month subscription. Spotify fuels late-night Ramadan editing at Enterprise, but we’re going to be trying out Music in the days ahead — if TE ever delivers us enough bandwidth to download the iOS 8.4 update we need to get the Music icon on our home screens. The WSJ tells you to think twice before signing up for a streaming service. Wired tells us Apple Music “probably won’t change everything.” Yahoo Tech has an illustrated guide on how-to install, but you probably don’t need the pictures, just connect to WiFi for the 218 MB download, then go to Settings > General > Software Update and download iOS 8.4. (Oh, and speaking of Spotify: Business Insider tells us that the 19-year-old daughter of Morgan Stanley’s CEO just released an album on the streaming service.)

Okay, when do we eat? Maghreb will be at 7:01pm today, while fajr will be at 3:13am, according to Islamic Finder.

WHAT WE’RE TRACKING NEXT WEEK

Emaar Misr will list on the Egyptian Stock Exchange “on or around July 5,” the company said, according to Reuters. The company was expected to list tomorrow (2 July) according to earlier statements.

The deadline for a nuclear accord between Iran and the P5+1 nations has been extended to Tuesday, 7 July, Politico reports, noting, “President Barack Obama warned Iran on Tuesday that it must stick to the framework” for a nuclear agreement as agreed upon earlier this year, and that if it decides it cannot abide by those terms, ‘that’s going to be a problem.’”

LAST NIGHT’S TALK SHOWS

Last night’s talk shows were dominated by coverage of the funeral of Prosecutor General Hisham Barakat and the speech that President Abdel Fattah El Sisi gave outside the Moushir Tantawi Mosque. In an emotionally charged statement, El Sisi stood next to Barakat’s family as he declared, “They will not break us. We lost a great man yesterday, but we will stand strong. We are going to apply the rule of law. The death sentences and life sentences will be carried out without delay.”

Dressed in black, Lamees El Hadidy said, “I never imagined that I would be in this position. Eulogizing this brave man who gave his life for his country. This is the first time that the President has spoken about the death sentences. He was very clear that there will be no pardons and no other arrangements made. He admitted that the judicial process in this country is very slow. We can’t spend 5-10 years in an endless series of trials and appeals. Only seven death sentences have been carried out thus far, six of them from military courts and only one in a civil court — the terrorist from Alexandria who threw people off the roof. That’s it. This is not enough. This is not justice.”

El Hadidy went on to note that the only thing that will put an end to terrorism is a strong economy: “Once again, we call on the government to step up the pace of reform and facilitate bureaucratic procedures for investors who believe in this country and are still willing invest their money here.”

The talk shows also included reporting from the scene of yesterday’s bombing in Sixth of October a few minutes before iftar.

“We have to be on a state of high alert from now on, all of us, not just the police. We all have to be very vigilant. Any suspicious vehicles must be reported. Where did all these explosives come from? It’s clear that some fresh money has come into the country,” said El Hadidy.

Her studio guests were prosecutors Mohammad Hammouda and Saber Ammar, who debated whether or not the Criminal Procedures Law should be amended. The current law, which has not changed since 1937, has recently come under attack because it allows trials to drag on for years.

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SPOTLIGHT ON Fallout from the assassination of Hisham Barakat

President Abdel Fattah El Sisi led the funeral procession for slain Prosecutor General Hisham Barakat in New Cairo on Tuesday. El Sisi remarked that “Swift justice is chained to laws,” promising to amend Egypt’s criminal code “within days” to “confront the developments we are facing,” according to a statement released by Ittihadiya and reporting by Ahram Online. According to the statement: “The President also spoke with a group of judges noting that the state does not interfere in the affairs of the judiciary, but that exceptional circumstances require the prompt drafting and issuing of the aforementioned legal amendments.”

El Sisi’s call was followed by the release of the full text of the much-discussed antiterrorism draft law, with some previously-unheard of provisions: the most critical of which is that the President may sign off on national security rulings without the defendant being granted an appeal, which may mean that the execution of the Brotherhood’s leadership, including former president Mohamed Morsi, may occur at any time after the draft law’s ratification. The draft law will be submitted to the Cabinet on Wednesday for approval.

Other notable articles from the draft counterterrorism act: Transitional Justice Minister Ibrahim El Heneidy tasked the Supreme Committee for Legislative Reform yesterday with revising the terrorism law within 24 hours. El Heneidy will present the draft to the Cabinet on Wednesday, reports Al Masry Al Youm. Al Watan acquired the full text of the draft, split into two parts: “substantive provisions” breaks down crimes and punishment, while “procedural provisions” explain the rules by which the courts manage proceedings. Among the key articles worth inspection:

• Article 4: The law has broad application: crimes committed on any land, air, or sea vehicle registered in Egypt or carrying its flag; if the crime is intended to harm an Egyptian at home or abroad, including embassies, diplomatic missions or institutions; if the victim is an Egyptian living domestically or internationally; or if the perpetrator is foreign or without nationality and residing in Egypt

• Articles 5-19 outline crimes of terror and their punishments, including: A 10-25 year sentence for any individual seeking to topple the regime or change the country’s constitution; no less than 10 years to anyone convicted of joining or participating with a terrorist group while aware of its goals; 25 years up to the death penalty for anyone who starts, organizes, manages or leads a terrorist group.

• Articles 20-37 detail the use of weapons, use of force to acquire vehicles, use of social media, buying / selling / manufacturing or importing of military or police uniforms and / or carrying military or police credentials. Expect an outcry over provisions that would mandate a 5 year sentence to anyone convicted of using social media or the internet to promote ideas or beliefs leading to terrorist acts, impede state officials, or communicate with terrorist groups

• Article 51 would give the president the right to impose a curfew, isolate or evict residents from an area should that area be exposed to an act of terror for a period no longer than 6 months

• Other articles include previously-mentioned provisions such as leaving the testimony of defendant’s witnesses to the ruling judge’s discretion, as well as the new provision of limiting the appeals process in criminal proceedings to only one appeal

A suspect in the assassination has been arrested: “A 23-year-old unemployed man,” according toAhram Online, who had posted on Facebook that the Giza Popular Resistance Brigades had committed the attack — a post which had later been taken down, followed by a denial from the group that they ran any social media accounts.

Political parties rally against terrorism: The nation’s political parties scrambled yesterday to burnish their nationalist credentials, with the New Wafd Party inviting factions from across the political spectrum to organize an anti terrorism conference. The invitation was met by several parties who’ve denounced violence and terrorism, including the Social Democrats, Tagammu, the Conference Party and the Independence Current. (Read in Arabic)

Two explosions went off yesterday as would-be bombers were traveling through Six of October’s second district. The two bombers ran into a road blocked by two tuk-tuk drivers engaged in a dispute, according toAhram Gate, with the swerving of their vehicle causing one of the explosives to go off prematurely and setting-off a second device. Both bombers were killed, as was an innocent bystander. The explosion took place near a police station in the vicinity of Nakheel Mall.

Media hyping-up unconfirmed reports of IEDs: Less dependable accounts of explosions surfaced regularly throughout the day yesterday, including an audacious account of 43 explosives set to destroy 4 electricity towers in Shorouk that was later proven untrue. Two electricity towers were hit in Banha,according to Al Masry Al Youm: two bombs destroyed one tower, and the third went off as forensics and explosives teams were scanning the area, injuring three security personnel. That story has not been independently confirmed. Youm7 joined in with a tale of an explosion in Ma’sara that went off prematurely seriously injuring its perpetrator. That story is also unconfirmed.

Further confusion surrounding news of Sadat Metro station closure: Following its brief re-opening last week after a nearly two-year closure, Sadat metro station was closed on Tuesday until further notice for security reasons, according to state-run news agency MENA and as reported by Mada Masr. Transport Minister Hani Dahy later called in to the TV show Mubasher Men El Asema saying the metro station will only be closed for 24 hours for maintenance; rumors the closure is for security reasons are untrue, Al-Shoroukquotes Dahy as saying.

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SPEED ROUND

The new state fiscal year begins today, but President Abdel Fattah El Sisi has rejected the proposed draft budget for FY2015-16, a government source told Al Borsa. The document was refused because of the large deficit projected, according to the source. El Sisi called for spending cuts and nixed spending increases on bonuses and compensation. The president also believes the budget should focus on reducing interest payments on debt as well as expanding non-tax government revenues. An informed source told Al Ahram that the government will continue operating under the FY2014-15 budget until a new one is approved.

There’s plenty of maneuvering going on in the background, particularly on energy pricing, including an indication that fuel prices are going to rise, after all despite consistent assertions to the contrary by senior Mahlab government officials all spring. The new budget includes EGP 20 bn in cuts to state spending on fuel subsidies, bringing that total line item down to EGP 60 bn, a government source told Al Masry Al Youm. Price hikes will hit gasoline, diesel and fuel oil, the newspaper reports. The subsidy cut will in part compensate for the 10% increase in pensions for both civilians and retired military personnel. The source added that the Mahlab government has no option but to reduce spending to curb the deficit.

…That news coincides with Investment Minister Ashraf Salman’s remarks that the government will raise fuel prices for industrial users starting 1 July. Salman said the government is repricing natural gas and electricity for factories. While some industries will see their input costs go up, Salman said glass producers, for example, will see their energy bill reduced. The Minister also denied that there is a natural gas shortage in power stations or heavy industry factories — noting that gas supplies suffice until 30 August. The supply disruption facing Ezz Steel and a two other factories are related to back dues the three owe to the Electricity Ministry, Salman remarked. The minister made no reference to the persistent gas shortages faced by fertilizer and cement producers, among other.

Egypt tourism pitch now a strategic national priority: The Tourism Ministry held its pitch yesterday for the new campaign to promote Egyptian tourism in global markets, we’re told. In view of recent domestic events, the pitch has taken on particular importance: Its implications extend far beyond the commercial sphere, with any tourism promotion campaign becoming (effectively) a nation-branding exercise for Egypt. With the campaign now positioned as a strategic imperative, the winning bid will require sales expertise, local insight and global reach to market Egypt to the world — and to extend our offering beyond the beach-and-culture staples that have become standard fare across multiple markets globally. We’ll be closely following the outcome of the pitch process and hope the Tourism Ministry both chooses wisely and acts quickly.

Not unrelated to the above: Zahi Hawass reminds everyone he’s Zahi Hawass: The bombastic former antiquities minister Zahi Hawass is back in the limelight in a profile by Phys.Org. Despite his insistence that “he is focused on writing and has no desire to return to his previous position as head of the country’s antiquities,” we’re not going to be he is truly ready to give up his Indiana Jones hat. He also has some interesting suggestions for helping out the Grand Egyptian Museum, having been plagued by delays and funding shortfall, as well as the state of antiquities in the country in general. (Read “Fallen Egypt archaeologist wants international Grand Museum“)

GB Auto to launch two SUVs, locally assembled Elantra: GB Auto, the nation’s largest passenger car assembler and distributor with a c. 30% market share, plans to release two new SUV models and a locally-manufactured Elantra by year’s end, according to an interview with Hyundai Franchise Director and GB Auto Executive Vice President Al-Mustafa Abdul Halim by Daily News Egypt on Tuesday. He also stated that the company has in a place a five-year plan to develop the domestic car assembly industry and expects the government’s support in light of the Egyptian-EU Association Agreement’s negative effect on local assembly. He reiterated that if the current situation where European, Turkish and Moroccan imports continue to dominate the market, that the local-assembly industry will be wiped out by 2019.

The FT has a special report on new trade routes in the Arab world. The report focuses predominantly on Saudi Arabia and Egypt’s investment in domestic infrastructure, noting that “The Suez Canal is being expanded and new ports such as King Abdullah Port bring the prospect of more trade, perhaps even within the region.” The headlining piece in the report is titled “Arab region expected to bounce back,” and includes a piece focused of the Suez Canal expansion. The landing page for the report is here, and the Special Report is here in full in pdf.

Vodafone Egypt did not ask the CIT Ministry to reduce Telecom Egypt’s network infrastructure prices, nor has it engaged in any negotiations with the company, CEO Ahmed Essam said. Essam added that Vodafone Egypt’s share of the internet market does not exceed 10%, which he calls an insignificant share when it comes to pricing power. 45% of Vodafone Egypt’s shares are owned by Telecom Egypt.

The Tripartite National Committee meets today in Cairo to complete executing the studies proposed by the international panel of experts to advise on the Grant Ethiopian Renaissance Dam’s (GERD)’s effect on Egypt and Sudan. The meetings will take place over three days, and will also include representatives from PRL and Deltares, said Irrigation Minister Hossam Mughazi, Al Mal reported.

Pensions were paid yesterday instead of on 10 July, said Social Solidarity Minister Ghada Waly, to facilitate people’s needs in Ramadan and Eid El Fitr.

Egyptians will face an EGP 1,000 fine for public littering, Giza Governor Khaled El-Adly told Youm7 on Monday, as sister publication the Cairo Post. Our take: We wish. And good luck with that.

Amnesty International has accused the Egypt of “jailing young activists to quell unrest under one of the toughest crackdowns in the country’s history” in a report titled “Generation of young activists imprisoned in ruthless bid to crush dissent,” Reuters reported. “By relentlessly targeting Egypt’s youth activists, the authorities are crushing an entire generation’s hopes for a brighter future,” said Hassiba Hadj Sahraoui, deputy director of the Middle East and North Africa programme at Amnesty International.The Ministry of Foreign Affairs rejected the report, as reported by SIS, calling Amnesty’s claims “lies” and criticizing the organization’s “double standards.” It also denied the systemic targeting of the youth and said Amnesty International’s “biased” report aids terrorism. A day earlier, Amnesty called the assassination of Hisham Barakat “a despicable, cowardly and cold-blooded act of murder.”

As America goes… Fresh off the news that the EGX squeaked out a 3% gain in the first half of 2015 is the WSJ’s view that “the stock market has shifted to neutral, and investors [in U.S. equities] don’t expect the rest of 2015 to be a joy ride.” As America goes, so goes the world, right? The Journal points to lackluster corporate earnings, sluggish U.S. growth, global fallout from Greek crisis and the looming threat of a U.S. rate cut. Throw in the complicating factors of our lovely regional and domestic security “challenges” and (for our GCC friends) low oil prices, and we have a winner of a second half coming our way.

Ebola makes a comeback in Liberia: The body of a dead Liberian man has tested positive for Ebola — the country’s first reported case since it was declared free of the disease, BBC reported.

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A MESSAGE FROM PHAROS HOLDING

Ezz Aldekhela Steel Confirms Energy Market Ripples

Ezz Aldekhela Steel (EZDK), Ezz Steel’s most profitable subsidiary, reported a standalone Net Loss of EGP 116 mn in 1Q15, compared to a Net Profit of EGO 144 mn in 1Q14. The plunge in the company’s bottom line comes despite a 0.5% y-o-y growth in sales and a dip in raw materials prices, with EZDK’s margins being pressured by rising electricity prices that started July 2014.

EZDK not only face an increase in electricity and natural gas prices, but must also contend with diminishing natural gas supply. EZDK officially announced in a disclosure that it is suffering from volatility in natural gas supply, a key input in its reduction process of iron oxide, and cannot project when such volatility will end given the prioritization in allocating natural gas to electricity generation. We remind readers that EZDK’s concerns fall in line with previous notes from Pharos Research with expectations that Q2 and Q3 of 2015 will continue to reflect margin pressures. To read more click here.
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EGYPT IN THE NEWS

In “Sisi is pushing Egypt to the brink,” the editor of Islamist-friendly Middle East Eye picks up Al Jazeera journalist Ahmed Mansour’s conspiracy theory that General Prosecutor Hisham Barakat was murdered by the state upon orders by President El Sisi. (Yes journalists have a hard time letting go of “the brink” that we have been standing on for what feels like millennia at this point.) Writing for the Huffington Post, David Hearst quotes an unnamed Ikhwani leader in exile who likens the assassination to that of the late Lebanese Prime Minister Rafic Hariri and calls for “the same level of investigation,” which would mean a UN Special Tribunal. As a brief historical aside, following Hariri’s murder, the Islamist group Hezbollah was suspected, and following a six-year investigation, four Hezbollah members were handed indictments. The parallel that Hearst and his Ikhwani reference are trying to draw to Hariri is therefore incredibly puzzling, and perhaps they are both simply unaware of how that affair all ended.

Hearst then goes on to say that Barakat’s death is “bad news” for President El Sisi and seems to implies thatall of us collectively hallucinated the protests from 1-3 July, as he claims “The mns who turned out on June 30 to denounce Morsi, were never again to appear on the streets of Egypt.”

Ghana Football Association (GFA) member / crackpot Kofi Manu accused Egypt of attempting to bribe GFA chief Kwesi Nyantakyi with USD 1 mn to throw the 2014 FIFA World Cup qualifier, but that Nyantakyi refused out of consideration of “the national pride and ego of Ghana.” (Read)

WORTH READING

In an encouraging development in the longer-term fight against extremism in Egypt, Al Azhar University has begun to revise its curriculum (following President Abdel Fattah El Sisi’s call for a religious revolution last January) to de-emphasize concepts condoning practices such as slavery and jizya tax, according to of Al-Azhar University President Abdul Hai Azab by Walaa Hussein for Al-Monitor. (Read: Al-Azhar rewrites curricula)

Bloomberg’s Ahmed Feteha profiles beneficiaries of Egypt’s newly implemented Takaful [solidarity] and Karama [dignity] cash transfer programs, an important step in replacing Egypt’s grossly inefficient subsidy system. “We are taking away product subsidies and turning it into cash support to poor families,” said Nevine El-Kabbag, head of the new programs. “Most of these subsidies, especially in energy, went to people who don’t deserve them — people who have cars and air conditioners.” (Read: Egypt’s handouts will save money and avert unrest, if they work)

SPOTLIGHT ON Israeli natural gas fields and the prospect of exports to Egypt

Israeli Energy Minister Yuval Steinitz presented terms of proposed gas compromise agreement with Delek and Noble to the Israeli public on Tuesday. The outline agreement would see Delek and Noble Energy retain ownership of Leviathan, the offshore gas field expected to supply Israel, Egypt and Jordan, according to Israeli Energy and Infrastructure Minister Yuval Steinitz at a press conference on Tuesday, as reported by YNet.

The draft compromise would require Delek to sell its entire stake in Tamar within six years, Noble to reduce its stake in Tamar from 36% to 25%, and both companies completely exiting from the two small gas fields Tanin and Karish within the space of 14 months. Israeli Prime Minister Benjamin Netanyahu had originally hoped to get the agreement approved swiftly, but was stymied by Economy Minister Aryeh Deri who refused to sign off on it out of concern of keeping the monopoly in place. As YNet puts it: “That in turn forced Netanyahu to go to the Knesset in order to give the government the required authorization … When this failed Netanyahu was left with little choice but to release the report to public.”

Steinitz expects the government to approve the proposed agreement within a month. Internal opposition in Netanyahu’s coalition government as well as the Knesset is exists due to worries over the potential for high future cost of gas to Israel’s domestic consumers, as Israel already has a relatively high cost of living. According to JTA, basic household goods are more expensive in Israel than almost everywhere in Europe, and average real estate prices are up c.60% over the past seven years. However, energy minister Steinitz attempted to reassure the Israeli public, saying the agreement includes “an export restriction, price restriction and ownership restriction,” that “Israel’s citizens will receive 70 percent, and the energy companies will receive 30 percent,” and that profits from the gas will earn the Israeli state c. USD 100 bn over the coming decades.

DIPLOMACY

Egypt signed the founding document of the Chinese Asian Infrastructure Investment Bank (AIIB) on Monday in Beijing. According to Zawya, delegates from the 57 founding countries gathered to sign the agreement governing the bank’s structure and policies. “The AIIB will have authorized capital of USD 100 bn, and Asian countries will contribute to up to 75% of the total capital. Each member will be allocated a share of the quota based on their economic size, according to the agreement.” (Read)

Foreign Minister Sameh Shoukry met with the Russian envoy to the Middle East to discuss regional security threats. The two parties discussed the developments in Libya and Syria, Al Ahram reported.

ENERGY

EGPC to import 520,000 tons of diesel to meet Ramadan demand
Al Mal | 30 June 2015
EGPC intends to import 520,000 tons of diesel to satiate market demand throughout Ramadan, sources told Al Mal. The source said that reserves in filling stations are secure, but that the extra amounts will be used to cover excess demand from the electricity sector. He added that long queues seen at the stations are due to motorists wanting to refuel their cars before iftar time and not because of any shortage. (Read in Arabic)

Government address energy production prospects from shale oil
Amwal Al Ghad | 30 June 2015
The Ministries of Petroleum and Electricity are coordinating to create a committee to assess producing energy from oil shale layers, Abu Bakr Ibrahim, the head of Ganope said. Abu Baker says the Red Sea area, Safaga, and the Nile Valley has significant oil shale layers. He added that signing an MoU with NREA on extracting new energy sources is also being considered. Ganope is also conducting seismic mapping to provide geological information and increase E&P activities. (Read in Arabic)

Environmental Affairs, Electricity Ministries assessing the efficacy of using biogas
Al Mal | 30 June 2015
The Ministries of Environmental Affairs and Electricity are assessing the efficacy of using biogas as a substitute for natural gas, Environmental Affairs Minister Khaled Fahmy said. Using biogas has already been trialled in over 800 villages and the government is now looking to price it nationally. Fahmy said a wider-scale usage of biogas could help the state reduce its energy expenditures. The two ministries’ recommendations regarding the pricing and usage of biogas will be forwarded to the supreme council for energy in order to reach a final decision on the energy source. (Read in Arabic)

SUCO commissions Enppi to prepare designs to bring three wells into production
Al Mal | 29 June 2015
SUCO, RWE’s JV in Egypt, has commissioned Enppi to finalise engineering designs to bring three wells into the production network. The project will connect the wells to a central processing unit, Al Mal says. The first well is 9 km away from the central unit, the second is 1.5 km away, and the third is being drilled currently to ensure maximum utilisation of the gas onsite. (Read in Arabic)

EGAS asks Red Sea Ports Authority to prepare a platform for the second FSRU in Ain Sokhna
Youm7 | 29 June 2015
Khaled Abdel Badie, the Chairman of EGAS, has asked the Red Sea Ports Authority to finalise preparations for the platform that is set to receive the second FSRU. The second platform will opposite the one where the Höegh Gallant is docked currently. Abdel Badie told Youm7 that the Red Sea Ports Authority will be finalising the dredging and preparation works to receive the second unit. EGAS has issued a tender for a second FSRU last May. (Read in Arabic)

INFRASTRUCTURE

Mahlab greenlights lifting station in Toshka
Al Shorouk | 30 June 2015
Prime Minister Ibrahim Mahlab and ministers of local development, housing, irrigation, and agriculture greenlit lifting station three, owned by the Emirati Al Dahra Agricultural Company. To ensure the efficiency of completing the New Valley Toshka project in the allotted eight months, the project has been split into four operations delegated to four contracting companies, according to Minister of Irrigation Hossam Mughazi. (Read in Arabic)

BASIC MATERIALS & COMMODITIES

Fava bean demand down 15% y-o-y
Al Borsa | 29 June 2015
Egypt’s demand for fava beans decreased by 15% y-o-y, Nasr Metwally, the head grains section at the Chamber of Commerce, said. Excess demand has kept prices steady at EGP 7 per kilo for the local product and EGP 4 for the imported fava beans. Egypt consumes a minimum of 400,000 tons of the beans each year. Metwally does not expect the annual demand decrease to be reversed despite the usually 25-30% spike that occurs during Ramadan. (Read in Arabic)

Ministry of Supply studies creating logistical zones
Al Shorouk | 30 June 2015
Minister of Supply, Khaled Hanafy, met with United Nations Industrial Development Organization (UNIDO) representative, Giovanna Ceglie, to discuss cooperation on establishing logistical zones for fruits and vegetables where they will be sorted and packaged. Produce can be sold at wholesale price to ensure lower prices for citizens. (Read in Arabic)

TELECOMS & ICT

Vodafone is spending EGP 3.5 bn to develop its networks in 2015
Amwal Al Ghad | 30 June 2015
Vodafone Egypt will spend EGP 3.5 bn on developing its networks in 2015, Amwal Al Ghad reported. The investment comes as part of Vodafone’s EGP 9.5 bn drive to develop its network infrastructure over three years. The company will self-finance the investment and has not yet tapped the EGP 4 bn credit facility agreement signed with seven banks last year. Vodafone Egypt spent the same sum on network improvements in 2014, we note. (Read in Arabic)

Workers launch petition campaign against Minister of Communications
Youm7 | 30 June 2015
Workers at Telecom Egypt’s Opera branch launched a petition campaign in support of the company’s stance against Minister of Communications and Information Technologies Khaled Negm. Workers sent a memo to Negm denouncing his decisions that, according to the workers, undermine the company’s welfare and favor consumers and other private companies over company employees. Workers demanded in the memo to meet with Prime Minister Ibrahim. (Read in Arabic)

AUTOMOTIVE & TRANSPORTATION

Nissan to produce new locally assembled cars in six months
Daily News Egypt | 29 June 2015
Nissan Motors will release a line of locally assembled cars to the Egyptian market over the next six months, according to Nissan Motors Senior VP of Africa, Middle East & India Region Christian Mardrus speaking to DNE on Tuesday. He added that the company plans to add one new authorized distributor by year-end. (Read)

Railroad Authority studies repricing train tickets
Al Shorouk | 30 June 2015
The Railroad Authority submitted a study suggesting raising the price of the air conditioned first and second class tickets, without affecting the other ticket prices, said Minister of Transportation Hani Dahy. The study suggests an EGP 20 increase on first class tickets, and EGP 10 increase on second class, both representing only 5% of total passengers on Egyptian railroads. (Read in Arabic)

BANKING & FINANCE

NBG continues Egypt operations unaffected by bank closure in Greece
Daily News Egypt | 29 June 2015
National Bank of Greece (NBG) is operating normally in Egypt without any changes despite bank closures in Greece, an anonymous source at the bank told Daily News Egypt. Greek banks will be closed until next Monday and imposed a EUR 60 daily limit on ATM withdrawals. NBG works under the CBE’s umbrella, the source added noting that “the bank’s branches in Egypt did not witness a turnout of clients withdrawing their deposits.” He stressed that NBG is sufficiently liquid and ready to meet any withdrawal demands in case they occur. (Read)

Accountability State Authority objects to 8 Ministry of Finance contracts
Al Shorouk | 30 June 2015
The Accountability State Authority (ACA) objected to eight contracts drawn up by the Ministry of Finance, the most important of which is tasking E-Finance with printing the smart fuel cards instead of casting a tender. E-Finance monopolizes the government electronic payment market, and is 70% owned by the National Investment Bank, 10% owned by the National Bank of Egypt, 10% owned by Banque Misr and 10% owned by the Egypt Banks Company. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

GAO objects to eight government agreements, including fuel smart card
Al Shorouk | 30 June 2015
The GAO objected to eight agreements signed by the Finance Ministry, Al Shorouk reported. Among the agreements of concern to the GAO was the granting to e-Finance the contract for the fuel smart cards. The Finance Ministry has responded to the GAO’s concerns, a source said, but is yet to hear back from the regulatory authority. (Read in Arabic)

Falcon loses Ain Shams security contract, renews with Cairo U.
Amwal Al Ghad | 29 June 2015
Ain Shams University cancelled its campus security agreement with contract, Amwal Al Ghad reported. The decision came following reviewing a report drafted by a committee tasked with assessing the impact of the agreement with Falcon. The university will now rely solely on Queen Group for security. Meanwhile, Cairo University has renewed its contract with Falcon for the coming academic year, according to AMAY and as reported by Egypt Independent.

Russian company to invest up to USD 20 mn in pharmaceutical industry
Al Mal | 30 June 2015
Russian company Biokad plans to invest USD 12-20 mn in Egypt’s pharma sector with a domestic partner, Biokad Vice President Denis Kovalev said. Kovalev did not name the Egyptian company in play, but said that it was one of the largest companies in Egypt’s private sector. Kovalev added that it would take “at least six months” for contract negotiations and legal procedures to be completed for the company to begin its operations in Egypt. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Justice ministry to keep an eye on the media
Youm7 | 30 June 2015
Justice Minister Ahmed Al-Zend formed a three-member Media Review Committee to monitor and review news content published by broadcast, audio and print media regarding the Ministry of Justice’s activities and its senior staff. The committee will also be monitoring social media for any posts worthy of further investigation. The committee will be sending a daily report to Al-Zend. (Read in Arabic)

REGIONAL

Israel has deported most of those intercepted in the latest protest flotilla attempting to reach Gaza, including Islamist and former Tunisian president Moncef Marzouki. Al Jazeera notes that while most of those detained following the seizure of the Freedom Flotilla III have since been deported, Al Jazeera cameraman Ammar Hamdan remains in Israeli custody at the time of this report. David Horovitz of the Times of Israel mercilessly mocks Marzouki’s priorities for having taken part in the flotilla when his own country of Tunisia is still reeling from Seifeddine Rezgui’s murder of 38 people, most of whom were foreign tourists, in Sousse on Friday.

The Independent highlights the bravery shown by Tunisians present at the attack, as some chased Rezgui while others formed a human shield to protect other tourists. The Telegraph notes that the 23-year old had travelled to Libya where he received training, and that some of those with whom he travelled with to Libya reportedly took part in the attack on the Bardo Museum in March, where 22 people were murdered.

Meanwhile, returning to the subject of Gaza, Daesh has explicitly threatened to topple Hamas in Gaza: On Tuesday, Daesh released a video statement challenging Hamas for control of Gaza, Reuters reports, with their terror group accusing Hamas has not been strict enough in their interpretation of sharia. “We will uproot the state of the Jews (Israel) and you and Fatah, and all of the secularists are nothing and you will be over-run by our creeping multitudes,” said a member of Daesh in the video message addressed to the “tyrants of Hamas.”

ON YOUR WAY OUT

Tunisia is expecting USD 515 mn in lost tourism revenues in 2015 following the terrorist attack in Sousse, the Tunisian Tourism Minister said. Last year, the Tunisian economy generated USD 1.95 bn from the sector, Al Ahram reported.

El Pais correspondent flees Egypt, allegedly under threat of arrest: Correspondent Ricard Gonzalez of Spanish daily newspaper El Pais said on Tuesday to Daily News Egypt that he was “forced to leave Egypt against [his] will” following notification that the Egyptian authorities were moving to arrest and try him. Gonzalez says he left two weeks ago and is still uncertain why the authorities would move against him, other than that his reporting was critical, and that he authored a book on the Ikhwan — one which he adds was not favorable to the outlawed group. The MFA has yet to comment, as reported by DNE.

Egypt’s M2 money supply was up 15.9% y-o-y at the end of May 2015 at EGP 1.72 tn, the CBE said on Tuesday.

AP source: US, Cuba to announce plan to open embassies: Following recent calls by US Senators advocating the move, US President Barack Obama is expected on Wednesday to announce that the United States and Cuba will officially reopen embassies in each country’s respective capitals, according to an unnamed senior official in Obama’s administration speaking to the AP on Tuesday. The AP notes that while the countries cut off diplomatic ties in 1961 after Fidel Castro came to power, the countries operated interests sections to maintain limited contact. Obama still faces resistance in the US Congress to repeal the embargo against Cuba. (Read in AP)

BY THE NUMBERS

USD CBE auction (Sunday, 28 June): 7.5301 (unchanged since Monday, 02 Feb)
USD parallel market (Sunday, 28 June): 7.69 (+0.01 from Sunday, 7 June, Reuters)

EGX30 (Tuesday): Market closed.

WTI: USD 59.47 (+1.95%)
Brent: USD 63.59 (+2.55%)

TASI: 9,086.9 (+0.3%)
ADX: 4,723.2 (+0.9%)
DFM: 4,086.8 (+1.1%)
KSE Weighted Index: 419.9 (+0.2%)
QE: 12,201.0 (+1.6%)
MSM: 6,426.6 (-0.1%)