“Sweeping” anti-terror legislation dominates headlines for second day
TL;DR
- “Sweeping” anti-terror law dominates headlines for second day
- Amr Helal leaves Abraaj for Duet-CI Capital.
- Unemployment falls to 12.7% in 2Q, but are graduates really employable?
- Arla-Juhayna joint venture is still on despite press speculation to the contrary
- Google isn’t violating Egyptian antitrust legislation, competition watchdog claims
- President El Sisi’s mother passes away
WHAT WE’RE TRACKING TODAY
The Arab League will hold an emergency meeting today in Cairo following an appeal on Saturday by the internationally recognized government in Libya asking that Arab nations mount airstrikes against Daesh in Sirte, as reported by France24. Daesh recently put down a revolt in Sirte by Salafists who refused to swear allegiance, with the terror group seizing control of more neighborhoods and hanging the dead bodies of rival fighters from a bridge. Egypt was forced to abandon its push for a UN resolution authorizing an international intervention in Libya in February due to a lack of support from Western powers. Al Mal‘s coverage of the meeting, however, makes absolutely no mention of Libya, and instead says the meeting is about further committing the Arab states to the boycotting of Israel. Newsflash: We’re going to buy gas from Israel; time to accept the new reality, ladies and gentlemen.
A Hamas delegation headed by senior leader Ismail Haniyeh is due to visit Cairo today as part of a regional tour that also includes Iran and Saudi Arabia.
WHAT WE’RE TRACKING THIS WEEK
Irrigation Ministers from Egypt, Ethiopia, and Sudan are meeting in Addis Ababa on Thursday and Friday to discuss and set a final date for receiving the amended technical offers to assess the impact of the GERD.
ON THE HORIZON
The Future of Energy in Egypt summit, which is aims to create a framework that will see Egypt become one of the Middle East’s top five energy exporters by 2030, is getting ink in the domestic press these days (cf: Al-Shorouk and AMAY). A ‘who’s who’ of both the energy sector and the wider business community will meet for two days in Cairo at the end of this month to shape the future of Egypt’s energy sector. Confirmed speakers for the high-profile event include Energy Minister Mohamed Shaker, Naguib Sawiris, Governor of Alex Hany El-Messiry, New and Renewable Energy Authority chief Mohamed Sobki, the IFC’s Nada Shousha and SODIC CEO Dasha Badrawi, among others. Future Energy Corporation, the organizers of the invitation-only event set to run 31 August – 1 September in Cairo, tell us they plan to announce additional bold-name speakers in the days ahead.
LAST NIGHT’S TALK SHOWS
Amr Adeeb and Lamees El Hadidy remain off the air and will probably remain on vacation throughout August. Probably in Sahel. Probably spending time with this reviewer’s elderly aunt — who could say for certain, one way or another?
Rania Badawi, filling in for Adeeb on Al Qahera Al Youm, began her episode by expressing her condolences to President Abdel Fattah El Sisi on the passing of his mother on Monday, saying that there was no doubt that the President and his family were in the thoughts and prayers of Egyptians.
Magdy El Gallad, filling in for Lamees El Hadidy on CBC Egypt, took near the top of his program an unusually principled (for Gallad and the Egyptian media in general) stance on the arrest on Sunday of photographer Ahmed Ramadan, who works for the privately-owned Tahrir newspaper. Ramadan was arrested at the Police Academy Court on accusations of belonging to the outlawed Ikhwan as well as for being in the court without a permit. Ramadan was allegedly snitched-on by video journalist Amani El-Akhras from Youm7, a former colleague of Ramadan’s, as per Ahram Online. Ramadan was released on bail late Monday evening but investigations are still ongoing. (We have a bit more on the case in On Your Way out, below.)
El Gallad: “He’s not a member of the Ikhwan. But whether he is or he isn’t, I stand by him, and what happened to him was wrong.”
El Gallad later hosted in his studio El-Sayed El-Badawi, president of the liberal(ish) Al Wafd Party — a party which has made headlines for more than a decade now over internal power struggles and disarray. El Badawi treated El Gallad and viewers at home to a lengthy recount of both his history and that of the party — a recounting that was largely at odds with other accounts of the same events, as can be found here in an article dating back to 2011. As he continued, Gallad’s eyelids become noticeably heavier, and as the monologue continued, this reviewer accidentally fell into an angry nap, experiencing a nightmare laden with disturbing imagery of suffering, which may be viewed here (running time: 8:23; viewer discretion is advised).
After awakening, this reviewer moved on to Youssef El Housseiny on ONTV, who focused a large segment of his program on the challenges facing the residents and artisans of the port city of Domyat (also spelled as Damietta), long famous for its furniture-making industry. His correspondent Mina Makram spoke with a number of individuals on the street regarding rising costs of living, as well as challenges facing the furniture industry. Before the segment, Housseiny noted the government’s recently stated plans to turn Domyat into a “furniture city,” featuring large-scale factories as opposed to artisanal workshops and with an eye on expanded volumes for export. Residents for the most part dismissed the idea, saying that Domyat “already is a furniture city” and instead complained about more pressing needs. Namely, as Housseiny would later summarize, that small-time shop owners are being squeezed between rising input costs and lower sale prices offered to them by distributors for their finished work.
Ahmed Moussa on Sada El Balad featured retired Maj. Gen. Abdul Hamid Khairat, former deputy chief of State Security as his in-studio guest for an extended interview, with Khairat focusing his ire not only on Daesh, but on Salafists and Wahhabist ideology by name. Khairat said that Wahhabism is steeped in takfiri thought, to the feigned surprise of Moussa, who acted like he’d never heard of a Salafi before. Khairat stated that Daesh’s roots are in Salafist thought, and that Salafis are much worse for the country than the Ikhwan. Khairat emphasized that the media is responsible for informing voters as to the true nature of the Salafis so that they do not gain a foothold in the coming parliament.
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SPEED ROUND
The story of the day remains President Abdel Fattah El Sisi’s passage of a sweeping anti-terror law late on Sunday night / Monday morning. We have comprehensive coverage in today’s Spotlight section, after the Speed Round. This legislation will shape the nation’s security and civil liberties climates for years to come; we encourage you all to take a quiet moment to familiarize yourself with it and give thought to the ‘inherent’ trade-off between liberty and security. Or whether any bureaucracy on earth can get spending on security quite right.
In the wake of the agreement reached between the Israeli government and gas developers — an agreement still pending approval from the Knesset, which is in recess until 1 September — Globes lists potential customers that could cover the USD 6.5 bn cost to develop the Leviathan field. The first output option mentioned includes 7 bcm annually to Egypt through supplying 105 bcm of gas to BG’s LNG Idku plant “although so far no final agreement has been signed between BG and the Leviathan partners, mainly because of regulatory delays by the Israeli government.” Globes says the acquisition of BG by Shell could complicate matters due to other political considerations and interests. Other options include exporting to Turkey and Jordan as well as using the gas in power stations, to produce ammonia, to power energy intensive industry, and to fuel local transport in Israel.
Egypt’s official unemployment rate dropped to 12.7% in 2Q2015, CAPMAS said, as reported by Al Masry Al Youm. With the number of employed Egyptians increasing by 0.2% q-o-q to 24.3 mn, the unemployment rate fell to 12.7%, from 12.8% in 1Q2015 and 13.3% in 2Q2014. Reuters added that the unemployment rate for those aged 15 to 29 was 26%, jumping up to 44.6% for those holding a university degree or higher.
… Even at 12.7% unemployment, investors are unable hire skilled labor to fill vacancies,Investment Minister Ashraf Salman remarked. Salman conceded it is impossible to bar foreign investors from bringing in foreign employees, who are capped at 20% of a total project’s employees, as their access to quality labour remains hindered. For econ types, Salman is hinting at the existence of a big skills mismatch and structural unemployment tilting Egypt’s Beveridge curve rightwards. (If this sounds like gobbledygook, here’s a primer.) In simple terms: Just think back to all those horrible CVs you’ve received over the years. That.
MOVES– Amr Helal has left Abraaj Group after a high-profile run to lead the Duet-CI Capital Egypt Opportunities Fund, a USD 300 mn “private equity fund dedicated to investing in Egyptian businesses, injecting growth and buyout capital into the economy and partnering with leading entrepreneurs to create long term sustainable value.” A company statement issued yesterday quoted Helal as saying: “I am looking forward to joining Duet – CI Capital, a business which brings together a best in class alternative asset manager and a leading investment bank in Egypt. The combination of Duet’s and CI Capital’s resources, networks and track record with that of the team puts the Egypt Opportunities Fund at the forefront of investing in Egypt.” Other senior management at the fund include Seifallah Zoghbi, who joined earlier this year as an MD, the Duet Group statement says (pdf download). Duet is a global alternative asset manager with AUM of about USD 5.5. bn across hedge / long-only funds, private equity and real estate. The announcement has won extensive attention in the international trades; Reuters has also taken note, as has the domestic press.
The plans to create ArJu, the new cheese, butter and infant formula joint venture between Juhayna and Arla Foods, are moving forward, Juhayna said officially yesterday. The announcement came after media reports saying the JV was skidding after the assets of Juhayna chief Safwan Thabet were frozen.. Juhayna will control 51% of ArJu, with Arla Foods controlling 49%. The companies announced the agreement in late May (disclosure, English).
Meanwhile, it appears that Safwan Thabet’s assets are about as frozen as day-old Zabado in an outdoor koshk in August: Misr for Clearing, Settlement and Central Depository says it has not received orders to freeze Juhayna Chairman Safwan Thabet’s assets. Ezzat Khamis, who heads the committee charged with accounting for Ikhwan-owned assets, retorted that it was not his office’s role to inform MCSCD, but the CBE’s, which was informed of the committee’s decision days before the announcement of the asset freeze, Al Borsa reports. Khamis added that an official letter will be sent to the Finance Ministry by tomorrow; the ministry is being asked to coordinate the implementation of the freeze.
Google not violating Egyptian antitrust regulation, consumer watchdog says: Google’s AdSensehas not violated Egyptian antitrust regulations, the Consumer Protection Authority (CPA) said. A marketing company had filed an official complaint to the CPA claiming Google used its market position to block its AdSense services on the plaintiff’s website. The CPA found Google to have halted services lawfully and asked the plaintiff to resolve the issue with Google directly.
Tuktuk ban could extend to all Cairo neighborhoods: The three-wheeled vehicles are now banned from eight of 37 local districts in the capital city, says Cairo Governor Galal Moustafa, as reported by Al Mal. Tuktuks will be impounded on a first violation and released from impound only after the payment of an EGP 1,500 fine; a second offense will result in forfeiture of the vehicle. The newspaper claims a second phase of the ban is in the works and that tuktuks will eventually be banned across the capital city.
Four consortia are competing to Terminal 3 at Sharm El Sheikh Airport, a USD 445 facility, according to local press reports. Full funding for T3 has been secured from the Islamic Development Bank, as announced at EEDC in March.
EFSA’s board has issued amendments to the executive regulations of the Real Estate Finance Law. These new regulations address M&A activities and exiting investments in real estate financing companies, among other provisions, said Egyptian Financial Supervisory Authority chief Sherif Samy. (Read in Arabic)
“Saudi Arabia does not like borrowing … but the books are not balancing,” The Economist writes, describing the Kingdom’s attempts to sustain a steady cashflow in response to low oil prices and continued government spending. “The government plans to sell bonds each month until the end of the year, raising SAR 100 bn riyals in total. Economists reckon there will be further issuance in 2016, perhaps to foreign buyers,” the newspaper adds, before reaching the inevitable conclusion that in order “to provide an incentive for change, they will have to cut subsidies and public-sector jobs. That is a far harder sell than bonds.” Our take: From an Egyptian perspective, we see this is a significant constraint on Riyadh’s ability to continue supporting Cairo financially.
Soad Ibrahim Mohamed, the mother of President Abdel Fattah El Sisi, passed away on Monday, Ittihadiya announced. Prime Minister Ibrahim Mahlab cut short his trip to Luxor citing an emergency, which sources said was to attend the funeral services. Only family members were welcome to attend, the presidency said. Al Masry Al Youm published a profile of the President’s late mother. The cause of death was not immediately disclosed, nor was her age. The president was known to be very close to his mother: Speaking of his relationship with her during an interview with Al Kahera Wal Nas in October 2013, a teary-eyed El Sisi said: “I am very lucky to have her as a mother.”
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A MESSAGE FROM PHAROS HOLDING
Edita: Trading at a premium — and under watch for potential valuation upgrade
Edita Food Industries reported a 13.1% y/y jump in its Q2-15 revenues to EGP 514.8m, which pushed its H1-15 revenues to EGP 1,043.7m, versus EGP 905.9m in H1-14. Revenues were bolstered by the 6.2% increase in the average consumer price of Edita’s products, and, even more so, by the addition of three new production lines in H1-15 that pushed Edita’s total actual production to 26,832 tons in Q2-15, up from 24,015 tons during the same quarter a year earlier.
Despite the y/y surge in revenues, Edita’s net profit remained stable in Q2-15 at EGP 67.0m, mainly due to 1) additional costs associated with the ramp-up of the newly-added production lines, 2) one-off charges related to the company’s IPO, and 3) a 30.0% y/y increase in selling and distribution expenses in line with the company’s ongoing strategy to boost the ratio of direct to total sales to 50% by 2018 and expand its distribution footprint. Indeed, sales through retail and traditional channels accounted for 32% of total revenues in H1-15 versus 29% in H1-14. We view the shift to retail sales positively given that it cements the firm’s position as an attractive party in a potential value-accretive M&A transaction, which partly justifies that the stock is currently trading at a 20.8% premium to our DCF-based FV estimate. We’re also putting Edita under watch for a potential valuation upgrade — click here to learn why.
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SPOTLIGHT ON the new Anti-Terror Act
The new anti-terror law enacted late on Sunday by President Abdel Fattah El Sisi has been variously described as “tough” and “sweeping” by both the international and domestic press, albeit with rather different degrees of approval. In short, the law’s primary planks include:
- A more expansive definition of terrorism;
- The establishment of Special Courts to fast-track terror trials, which will be closed to the public. Any broadcast of court proceeding will be punishable by fines of no less than EGP 100K;
- The Special Court has the right to deport foreigners, restrict residency and activity, ban communications, restrict travel and impose house arrest. It may also compel individuals to enroll in rehabilitation programs for terms not exceeding five years. (We’re not lawyers, but our view is that the text doesn’t specify whether reeducation camps are for convicted terrorists or whether a terror suspect could be enrolled.)
- An apparent ban on questioning the use of force by security forces in terror cases or in cases of self-defense by a serving member of the police force;
- Sanctions including the death penalty for founders or leaders terror organizations and 10-year prison terms for rank-and-file members;
- Other offenses include inciting violence online or offline (5-7 years in prison), funding terrorism (25 years) and plotting with foreign entities (which, depending on the specific offense, carries terms of 25 years to life or the death penalty);
- Journalists who disseminate stories contrary to the official narrative will face fines of EGP 200k to EGP 500k.
- The office of the president is granted powers in the event of an attack or national disaster including closing off an area, imposing a curfew on it, or evicting its residents for a period of six months (renewable). These decisions require Parliamentary approval and must be brought to parliament within seven days of their issuance.
Reaction: Local and foreign human rights activists have denounced the law. The editor of the Islamist-leading Al Masryoon describes the days ahead as “black days,” BBC Arabic reports. Activists such asGamal Eid claim the law entrenches the state’s ability to crush dissenting voices, adding that the laws “mark the rise of the republic of darkness”. One of the Al Jazeera three, former Cairo bureau chief Mohamed Fahmy, tweeted: “The newly ratified terrorism law in Egypt cripples journalism & social media with its fluid interpretations & harsh penalties”.
Amnesty International’s statement on the law described the legislation as “extreme”, calling the powers it invokes as akin to those the 30-year-long state of emergency imposed by former ruler Hosni Mubarak. France 24 says that the law punishes journalists for conducting their work.
Prominent domestic media figures and other personalities defended the act, citing the precarious situation in which Egypt finds itself following the assassination of Prosecutor General Hisham Barakat and amid continued violence by Islamist terrorists including Daesh. Islamic scholar Ahmed Kamal Abu Bakrstated that the law would be a powerful deterrent to terrorism and its activities, while former Deputy Interior Minister Hussam Lasheen stated that laws should have been enacted earlier. Both were speaking in a piece from Youm7.
Journalist and former Member of the People’s Assembly Mustafa Bakry tweeted that “The law includes deterrent procedures to face terrorism.” Muhammad Abu Hamid, another former MP, wrote that the legislation “will help dry out the sources of terrorism and extremism”, BBC reports.
Tomorrow: We’ll have a spotlight on the draft media and press bill, another piece of legislation likely to serve as a lightening rod for discontent in the weeks ahead.
EGYPT IN THE NEWS
There is a controversy brewing around a senior official from Amnesty International and a potential conflict of interest regarding her meeting with Islamists, according to a report by the UK’s The Times on Monday (paywall). The story has since appeared in RT, which states that the individual in question denies being an Islamist and is “vehemently opposed” to raising money for “any organization that supports terrorism.” As of now, the story basically comes down to the individual in question holding a private meeting with an Ikhwan advisor in Egypt without informing Amnesty. We’ll keep an eye on the story to see what, if anything, develops, but if it runs deeper than this, it risks giving Amnesty’s opponents in Egypt a cudgel.
Life in an Egyptian prison: Al Jazeera English has acquired and published excerpts of letters sent by Egyptian photojournalist Esraa El Taweel to her family from prison, describing life in Al Qanater women’s prison. She refers to herself and her fellow inmates as the “living dead,” citing harsh living conditions including filthy cells, no more than a half-hour per week of family visits and humiliating strip searches. “Political prisoners,” the story notes, suffer significantly harsher conditions than to “criminal prisoners.” (Read)
The BBC covers the new “strict” anti-terrorism legislation released Monday. The article describes the Sisi administration’s “deadly crackdown” on the Muslim Brotherhood as well as instability in Cairo and “restive Sinai”. The Muslim Brotherhood’s dubious claim that “it is committed to peaceful activism” is mentioned along with Amnesty International’s announcement that such legislation will “crush all forms of dissent and steamroll over basic human rights”. Read)
ENERGY
ETHYDCO completes 92% of its Ethylene production project
Al Mal | 16 Aug 2015
The Egyptian Ethylene and Derivatives Company (ETHYDCO) announced it completed 92% of its expansion project to produce ethylene. The project, according to Chairman Abdel Rahman Zeid, has an investment cost of USD 1.9 bn. The project will increase the production of polyethylene and butadiene. By the end of the year, the expanded plant will begin trial operations, Zeid added. (Read in Arabic)
Chamber of Metallurgical Industries want factories’ power plant investment costs recuperated
Al Borsa | 16 Aug 2015
The Chamber of Metallurgical Industries submitted an official request to Industry and Trade Minister Mounir Fakhry asking him to allow steel plants to recuperate the investment costs of power stations they had built. The Chamber’s head, Gamal El Garhy, said Ezz Steel and Beshay Steel paid off the plants themselves and are now also being asked to pay extra fixed costs on top of their energy bills, essentially constituting a double charge. The fixed charge was presumed to be directed towards financing the power plants, but plants are still being charged for them after completion. The Electricity Minister had agreed to the manufacturers’ demand, but the Industry and Trade Ministry called for a technical, legal, and financial assessment of the situation. (Read in Arabic)
Renting excess capacities in refineries generates USD 9 mn in two months
Ahram Gate | 17 Aug 2015
EGPC is renting excess capacities in domestic refineries in order to improve efficiency and expand the refineries’ income generation capacities. At MIDOR, 1.7 mn bbl were refined for a private company, with EGPC being granted the right to purchase the refined products at preferential rates, resulting in savings of USD 4.2 mn. Using lighter inputs allowed refineries to expand production of middle distillates, saving the state USD 4.8 mn in import costs. Overall, EGPC estimates that this usage of the refineries has resulted in savings of around USD 9 bn in June and July of this year. (Read in Arabic)
Badr Petroleum Company to invest USD 415 mn this year
Al Borsa | 17 Aug 2015
Royal Dutch Shell is planning investments of USD 415 mn this fiscal year in its concessions in Egypt run by Badr Petroleum Company (BAPETCO). The investments are for development of fields, as well as exploration to increase oil and gas output. Emad Hamdi, president of BAPETCO, broke down the investment into USD 268 mn going to field development, USD 97 mn cost of operations, and USD 50 mn to dig new exploratory wells, as well as other costs. (Read in Arabic)
Cairo Solar completes construction of Aswan solar power station in two weeks
Al Borsa | 17 August 2015
Cairo Solar completed the building of a 100 KW solar power station in Aswan within the space of two weeks. Founder of Cairo Solar, Hisham Tawfik, said that the electricity purchase contracts are expected to be signed after the installation process is complete. He added that a contract has been signed with South Cairo Distribution Company to install four solar power stations of various capacities. (Read in Arabic)
INFRASTRUCTURE
PSEW contracts Dngo on USD 50 mn projects
Al Mal | 17 Aug 2015
The Port Said Engineering Works company, a subsidiary of the has inked two agreements with Dngo Contracting to complete two water plants in Saudi Arabia worth USD 50 mn, according to company chairman Mohamed Hagag. PSEW has also inked agreements to build EGP 25 mn water tanks in the Arish Cement Factory, as well as a EGP 95 mn ship fueling facility in Ain El Sokhna, he added. (Read in Arabic)
USD 600 mn loan negotiations with World Bank for infrastructure projects in Upper Egypt
Al Borsa | 17 Aug 2015
The Mahlab government has submitted an official request for a USD 600 mn loan from the World Bank to fund infrastructure projects in Upper Egypt. A government source told Al Borsa that ongoing negotiations with the World Bank are in its initial stages to determine installment payments and the nature of the proposed projects. The loan will go into developing Upper Egypt’s sewage system, road networks, and cooperation with Golden Triangle project that ties Safaga, Qena and Al Qaseer. (Read in Arabic)
MANUFACTURING
Alexandria Portland Cement begins trial operation in Beni Suef factory using alternative fuel
Al Mal | 16 Aug 2015
The Alexandria Portland Cement company have begun trial operations at its Beni Seif factory using coal and alternative fuel, according to sources within the company speaking to Al Mal. The company had allocated EGP 600 mn in investment towards converting the Beni Suef and Alexandria factories to run on refuse-derived fuel. (Read in Arabic)
SKF aims to increase sales by 25%
Al Mal | 17 Aug 2015
Swedish bearing and seals manufacturing company SKF is aiming to increase its sales in the Egyptian market by 25% in the coming year to reach EGP 125 mn, in addition to increasing its number of distributors, according to Egypt managing director Alaa Ragab. Annual average sales are estimated at EGP 100 mn, according to Ragab, highlighting that Chinese and Egyptian knock-off products are behind the 65% drop in sales. (Read in Arabic)
91 industrial projects greenlit in July
Amwal Al Ghad | 17 Aug 2015
The Industrial Development Authority greenlit a total of 91 industrial projects in July, at a total cost of EGP 1.8 bn, said Industry and Trade Minister Mounir Fakhry Abdel Nour. The projects will generate 5.8k jobs, added Abdel Nour, highlighting that the projects spanned 9 industries including 28 projects in the chemicals sector, 27 in foodstuffs and 25 engineering projects. (Read in Arabic)
HEALTH & EDUCATION
GlaxoSmithKline SAE shares plummet to 52-week low following release of 1H15 financials
Reuters and EGX | 17 August 2015
GlaxoSmithKline SAE reported a 1H15 net loss of EGP 103 mn on Monday, according to the EGX website. The company’s share price hit a 52-week low, closing at EGP 10.35, following the announcement.
Counterfeits account for 10-12% of total market for pharmaceuticals
El Watan | 17 Aug 2015
Counterfeits account for 10-12% of Egypt’s EGP 33 bn annual market for pharmaceuticals, according to a leading member of the Pharmacists’ Syndicate said. Ahmed Obaid, the syndicate’s deputy head, said poor inspection of regulation of Egypt’s 60,000 pharmacies and 107 pharmaceutical companies is to blame. Obaid also complained that the Ministry of Health needs to clamp down on the sale of expired medications. (Read in Arabic)
Ministry of Health revokes two pharmacy licenses, files cases against 15 others
Al Mal | 17 Aug 2015
In a surprise inspection by the Ministry of Health on pharmacies in Alexandria, the general authority for pharmacies inspected 759 pharmacies and 41 storages in the last month, based on orders by Magdy Hegazy, the Under Secretary of the Ministry of Health in Alexandria to intensify inspections on private and public pharmacies. 2 license were revoked. (Read in Arabic)
TOURISM
12 hotels in Taba and Nuweiba shut down in the last three months
Al Borsa | 16 Aug 2015
Low occupancy rates and increasing debts have caused nine hotels to shut down in the town of Taba and three hotels in Nuweiba in the past three months, Hani Gawish, member of the Tourism Investors Association in Nuweiba and Taba, told Al Borsa. This has led to a collapse in revenues and a hike in costs, with monthly expenses for large hotels exceeding EGP 1 mn and those of smaller hotels exceeded EGP 110k. Gawish added that Nuweiba’s occupancy rate did not exceed 7% and Taba’s did not top 17%, causing some of those hotels to close down permanently. The Hilton Nuweiba Coral Resort and the Tropicana Nuweiba Resort Hotel are among the hotels that have shut down indefinitely. (Read in Arabic)
TELECOMS & ICT
Etisalat increases number of branches in Egypt to 1,100
Daily News Egypt | 16 August 2015
Etisalat now has 1,100 branches and points of sale across Egypt, making it the largest mobile phone operator in terms of number of branches. The increase aims to expedite the process of buying new lines for customers in accordance to the new regulation by the National Telecommunication Regulatory Authority (NTRA), Hassan Samy, Chief Sales Officer at Etisalat Egypt, said. (Read)
AUTOMOTIVE & TRANSPORTATION
Gulf Air increases flights between Bahrain and Cairo
Company Statement | 17 Aug 2015
Gulf Air announced it is increasing flights between Bahrain and Cairo from 24 August. The number of weekly flights will be increased from 12 to 14 following successful negotiations between Egypt’s and Bahrain’s civil aviation authorities. The extra flights allow for improved connectivity to destinations including in Thailand and India from Cairo. (Read)
Holding Company for Roads to invest EGP 2 bn in housing projects
Al Mal | 17 Aug 2015
The Holding Company for Roads and Bridges received three offers to compete in a tender to build housing projects in Nasr City and Heliopolis with investments of EGP 2 bn. The company recently issued a tender to utilize land owned by the General Nile Company for Construction and Paving, a subsidiary of the Holding Company for Roads and Bridges, according to company president Ramzy Lasheen. (Read in Arabic)
Ministry of Transportation gives nod to USD 100 mn dry port in 10 Ramadan City
Al Mal | 17 Aug 2015
The Ministry of Transportation greenlit the first dry port project that includes a logistics center in the 10th of Ramadan City, with Prime Holding acting as financial advisor to the project. The ministry has postponed the 6th of October dry port project until the 10th of Ramadan dry port is completed, according to Prime Holding Vice Chairman Mohamed Maher. (Read in Arabic)
LEGISLATION & POLICY
El Sisi eases restrictions on foreign investment in Sinai
Al Borsa | 17 Aug 2015
Restrictions on foreign investment in Sinai have been eased following a decree by President El Sisi. Foreign investors are now allowed to own up to 100% of the shares of companies based in Sinai provided they obtain the approval of the ministries of interior and defense as well as that of Egyptian General Intelligence. The amendments also allow foreigners and Egyptians with dual citizenships the right to own real estate excluding the land upon which any structure is built. Most significantly, the amendments now give the President the right to exclude any area, including that of the Suez Canal Economic Zone, from the clauses of the Sinai Investment regulations altogether. The law also limits usufruct to non-Egyptians for no more than 50 years. (Read in Arabic)
EGYPT POLITICS + ECONOMICS
Export councils seek to review CBE policies, submit memorandum to Mahlab
Daily News Egypt | 16 Aug 2015
Five export councils are seeking a review of the CBE policies regarding currency issues and have submitted a memorandum with their suggested policy changes to Prime Minister Ibrahim Mahlab. The head of the Export Council for Building Materials said “the CBE’s policies wiped out the whole market rather than just eliminated the black market” and said the decisions will not help attract foreign investment. He also accused the CBE’s decisions of “destroying the economy” and said the bank refused to meet with the exporters. (Read)
Note: Even though the grievances are probably legitimate, the memorandum DNE mentions is a tad absurd given that, by law, the Prime Minister has no authority over the Central Bank, which is set up to handle monetary policy with some degree of independence.
SEBA inquires about delayed implementation of EEDC MoUs
Amwal Al Ghad | 17 Aug 2015
The Saudi Egyptian Businessmen Association (SEBA) has asked the GAO in Cairo about the reasons behind the delayed implementation of EEDC MoUs. SEBA is also looking to resolve the problems of Saudi companies operating in Egypt. So far, MoUs involving agricultural land presented by the Agriculture Ministry have not been activated even though the investors have already completed all the required technical and feasibility studies. (Read in Arabic)
NATIONAL SECURITY
EOD techs successfully disarmed an IED found at a military courtroom in Aswan on Monday, reports Ahram. Eye-witnesses report that the experts defused the bomb using a water cannon. For anyone interested in learning more about how a water cannon can be used to defuse an IED, check out thisvideo. For those of you that are more literarily inclined, Gizmodo provides a decent explanation here.
ON YOUR WAY OUT
Tahrir News photojournalist Ahmed Ramadan was arrested and released on a EGP 5k bondcovering the Mohamed Morsi trial on 16 August after Youm7 video editor Amany Al Akhras falsely accused him of being an Ikhwan member, Tahrir News reported. Security officials, who arrested Ramadan in the courthouse, allege that Ramadan did not have the required credentials. Ramadan told ElWatan, however, that security guards confiscated his photo equipment despite providing his identification card and credentials. Meanwhile, a Twitter hashtag launched by readers denounced the actions of the Youm7 editor.
Half of the 500,000 feddans added to the state’s 1 mn feddan agricultural land reclamation project are in the New Valley Governorate, said Agriculture Minister Dr. Salah Helal. A further 150,000 will be reclaimed in Farafra, while 100,000 will be developed in the area of East Oweinat. President Abdel Fattah El Sisi announced the 50% expansion of the reclamation project during his speech this past Sunday.
Misr Insurance sold its 3.84% stake in Bisco Misr to Kellogg at an average price of EGP 89.86 per share, an EGX disclosure showed.
BY THE NUMBERS
USD CBE auction (Sunday, 16 August): 7.7301 (unchanged since Sunday, 05 July)
USD parallel market (Sunday, 16 August): 7.91(+0.05 from Thursday, 13 August, Reuters)
EGX30 (Monday): 7,594.05 (-0.42%)
Turnover: EGP 453.5 mn (3% below the 90-day average)
WTI: USD 41.89 (+0.05%)
Brent: USD 48.74 (-0.91%)
TASI: 8,437.3 (-0.3%)
ADX: 4,631.3 (-0.9%)
DFM: 3,926.9 (-0.1%)
KSE Weighted Index: 412.5 (-0.8%)
QE: 11,734.7 (-0.9%)
MSM: 6,219.8 (-1.2%)