Sunday, 4 October 2015

El Sisi maintaining pressure on cabinet economic group

TL;DR

El Sisi maintaining pressure on cabinet economic group (Speed Round)

Siemens angling for EUR 1.5 bn, 12-year maintenance contract (Speed Round)

Forget about Egypt-Turkey rapprochement, Erdogan tells Al Jazeera (Speed Round)

Army lab steps in the break testing backlog for chemical imports / exports (Manufacturing)

Three Egyptian universities ranked among top 800 globally (Health + Education)

Railway Authority receives EGP 1 bn offer from Chinese company to build two freight lines (Infrastructure)

Chamber of Commerce slams gov’t policy on imports / exports (Egypt Politics + Economics)

By the Numbers + Why a G1 currency crisis means you may want to short Egyptian equities

WHAT WE’RE TRACKING TODAY

Tunisian President Beji Caid Essebsi is set to arrive in Egypt today for a two-day state visit. The leaders will discuss bilateral ties as well as a host of regional issues, including the ongoing crisis in Libya. It’s Essebsi’s first visit to Egypt since his election in 2014.

WHAT WE’RE TRACKING THIS WEEK

The Markit / Emirates NBD purchasing managers’ index for Egypt is due out tomorrow, as are PMIs for KSA and the Emirates will drop the same day. The indices will be out at 7:30am CLT — just after we publish tomorrow. You can check the release here when it drops.

Tuesday, 6 October is a national holiday in observance of Armed Forces Day. Banks and markets will be closed.

Next Friday will mark the beginning of the three-day Annual Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) in Lima, Peru. Expect discussions to focus on the state of the global economy (China in particular) and the likely impact of a U.S. interest rate hike on emerging markets.

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LAST NIGHT’S TALK SHOWS

Saturday night’s episode of CBC Egypt’s Hona El Assema, led by Lamis El Hadidy, featured a heated discussion on the role of religion in Egyptian society between Culture Minister Helmy El Nimnimand Shaaban Abdelaleem, a prominent member of the Salafist Nour Party. The debate was sparked by the Culture Minister having called on Friday for “Egypt’s liberation from Salafism.”

Nimnim: “Al Nour party’s policies are unfriendly to both women and Copts. … I stand firmly against the idea of a theocratic state. That said, I am not against religiosity per se. … Despite their religiosity, the Egyptian people have rejected the establishment of a religious state throughout their country’s long history.”

Abdelaleem: “The minister’s statement reveal that he believes that Egypt is a secular country. It is inappropriate for a minister to make such politically charged statements.”

El Hadidy then transitioned to a discussion on of Cairo University’s decision to ban female professors from donning the niqab. “Professors that wear the niqab hinder my ability to learn,” said one student who was in favor of the decision.

The episode concluded with a telephone conversation with former Antiquities Minister Dr. Zahi Hawass, who discussed a recent theory surrounding the location of Queen Nefertiti’s tomb. “Nicolas Reeves’ theory is incorrect,” said Hawass, adding that “Nefertiti’s tomb is unlikely to be found in the burial chamber of Tutankhamun.”

Meanwhile, Osama Kamal, host of Cairo 360, discussed the importance of the October War with his guest Gen. Mahmoud Metwally. “The October War returned confidence to the militaries of Egypt and the Arab world,” explained Metwally. “The War of Attrition prepared the Egyptian military for the October War,” he added.

Watch this space for coverage of the premiere of Ibrahim Eissa’s program on Al Kahera Wal Nas, where he debuts on Sunday evening.

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El Sisi maintaining pressure on cabinet economic group: President Abdel Fattah El Sisi met yesterday with members of the Council of Ministers’ economic group, according to a readout on the meeting released by Ittihadiya to the local press. The statement specifically referred to a 20 September meeting that we had characterized as El Sisi ‘laying down the law’ to the ministers. Yesterday’s meetings touched once more on access to affordable goods for the poor and the need to limit imports to essential goods as a means of easing pressure on the EGP. In a departure from the president’s last meeting with the group, the gathering also discussed fiscal policy, the need to cut red tape for small business, priorities in agriculture and how to drive a recovery in the tourism sector. As was the case with the 20 September meeting, yesterday’s get-together is front page on Al-Ahram‘s digital edition this morning.

Electricity Ministry is expected to sign a EUR 1.5 bn 12-year maintenance contract with Siemens for its power plants in the new capital city, Burullus, and Beni Suef, within the coming days,Al Borsa reports. According to the Electricity Minister, the Siemens will be servicing all needs of the plants and their 36 generators, which will be producing a combined 14.4 GW. The move to a long-term maintenance contract with a proven international partner is welcome news after the “crash” maintenance program of the past several years to help address persistent power shortages.

Zulficar and Partners completes review of power purchase agreements: Law firm Zulficar and Partners has completed reviewing power purchase agreements (PPA) for private sector renewable energy producers. Electricity Ministry sources told Al Borsa that the contracts will be sent to the State Council for review before giving them final approval.

Petroleum Ministry looks to drive exploration activity nationwide: The Petroleum Ministry is gearing up to promote new exploration across Egypt, with an eye on Upper Egypt and the Red sea in particular, said Petroleum Minister Tarek El Molla. Officials will put new exploration rights on offer; are looking at amending exploration agreements to make them more attractive to investors; and will look to help improve labor pools in both areas.

Kellogg to build new Bisco Misr factory: The Kellogg Company is considering building a new production plant for its subsidiary, Bisco Misr, on an 80k sqm plot of land it owns in El Seyoof, Alexandria, to increase Bisco Misr’s production capacity, Al Mal says, citing unnamed sources. The sources added that Kellogg is still assessing the plant’s plan and does not yet have complete cost estimates. They added that Kellogg is also assessing merging Bisco Misr with Mass Food.


SPOTLIGHT on Erdogan’s comments on Egypt from his interview with Al Jazeera Arabic

It seems our pal Erdogan isn’t very interested in reconciling with Egypt, after all. From the Al Jazeera Arabic interview:

Erdogan: The Egyptian regime has exacerbated the situation in Gaza by restricting the movements of its people. This is a very dangerous development that demonstrates how Muslim brothers can treat each other poorly. The Islamic world should look at this situation with worry. The Palestinians see that the Arabs are not fulfilling their duties. The Arab League has failed to fulfill its purpose throughout its history and continues to fail in the present, unfortunately. With the exception of a few member states, the Arab League’s position vis-a-vis the Palestinians is similar to that of Egypt’s. The Egyptian regime’s position [regarding the Palestinians] is not just; its treatment of Gaza demonstrate this. If the Egyptian regime was just, it would not have abandoned its brothers in Gaza. But it has done just that.

Interviewer: What is Turkey’s position toward Egypt? Nearly the entire world has supported the coup in Egypt, except for President Erdogan. Are there ideas to re-evaluate the relationship with Egypt at this stage?

Erdogan: As long as I’m president, I will not normalize relations with the Egyptian regime as long as they repress Mohamed Morsi and his followers. I’m a president elected by its people and a democracy does not recognize a coup. Egypt is ruled by a person who orchestrated a coup against Morsi – who was appointed as the Field Marshal in his cabinet. Everything that is said against Morsi, I follow regularly.

I say this clearly: I am not convinced of these false allegations [against Morsi]. The Morsi that I know and have dealt with is not the person that they [the media] try to make him into. They say that he has certain relations with Qatar. Our Qatari friends say these claims against them and Morsi are incorrect. Unfortunately, there are a lot of fabricated claims against Morsi and his friends … If we believe in democracy, we must abide by its stipulations … Our problem is with the ruling regime. I regularly say this to my colleagues: I do not respect low-level talks between the two countries and I refuse to normalize talks between the two presidents. (Watch the interview dubbed in Arabic, running time 6 minutes, Erdogan’s comments on Egypt run until 30:40)


Despite a tweet that was alleged to belong to the Twitter account of former president Adly Mansour, (a claim that was later debunked, with its content described as “immoral” and a “trial balloon” in the Turkish and Armenian press), Egypt has yet to recognize the Armenian genocide, which begs the question: What is there left for Erdogan to say to convince Egyptian officials to holdout on such recognition, which we give already give implicitly, in hopes of a reconciliation with Turkey? Such recognition was needed while relations with Turkey were still amicable, and Erdogan’s adamant stance to freeze relations with Egypt, despite recent reports to the contrary, would seem to eliminate any reason for holding out calling the genocide exactly what it was.

The fugitive Qaradawi attended Saudi National Day celebrations at the Saudi embassy in Doha alongside the Saudi ambassador and the Qatari prime minister on Wednesday,Reuters reported. Qaradawi is the subject of an Interpol red alert, as Cairo seeks his extradition to face charges including incitement to violence. The hospitality extended to Qaradawi by the Saudi ambassador to Qatar Abdullah Bin Abdulaziz Al-Aifan has been noted by observers as part of Saudi’s shifting stance toward Islamists in its attempt to create a coalition against Iran.

A total of 126 Egyptians have so far been confirmed killed in last month’s Hajj stamped. A further 111 are missing, while 14 currently being treated for injuries in Saudi hospitals, according to an official Egyptian Hajj delegation, Al Ahram reports. Mokhtar Gomaa, Endowments Minister, will conduct a press conference to update the press on the latest developments on the Hajj stampede.

At last: Egyptian courts will no longer hold defendants in cages at trial following a decision by the Justice Minister Ahmed El Zend, lawyer Negad El Borai said. The story suggests the decision is in line with the constitution and penal code provisions and would further support the presumption of innocence until proven guilty, El Borai noted.

MOVES- Former EFG Hermes exec Shayne Elliott has been tapped to become ANZ’s next chief executive. Most reports note that Elliott faces challenges including a slowdown in Australia and New Zealand markets and fallout from the cooling Chinese economy.

Are you sure you want that VC money? “…we are in a world full of VCs, private equity, investment bankers, attorneys who love to promote ‘flipping’ companies because that’s how they make money. And there’s not many voices out there promoting the idea of holding onto and growing companies for life.” Inc magazine’s incomparable Bo Burlingham (author of Small Giants and Finish Big) on entrepreneurs who are having enough fun — and making enough money — that their exit strategy is to be “rolled out of their office on a gurney.”

Global Coffee Shortage Looms as Market Braces for Climate Change,” blares the Bloomberg headline atop a story that suggests the global coffee crop needs to increase by up to 50 mn bags over the next decade to keep pace with rising demand. To put that in perspective: That’s like adding another Brazil to the world’s ranks of producers, all while the industry prepares to be ravaged by climate change. Top industry execs will gather this week in Milan for the Global Coffee Forum to talk strategy, the newswire notes. Most at risk: The Arabica strain of coffee brewed at better coffee shops. Already, Vietnam — the world’s second-largest coffee exporter (who knew?) — has seen exports of the wonderful bean fall as much as 40%. Fortune magazine had a look at the topic earlier this year in more detail than Bloomberg.

Google is now Alphabet. And the latter doesn’t share Google’s explicit prohibition against “being evil.” Google’s IR page announced on Friday after the session’s close that the company has completed its transition, Jenner-style, into Alphabet. The Verge notes that Google’s maxim “Don’t be evil” has fallen by the wayside at Alphabet, where employees are instead exhorted to “do the right thing.”

CORRECTION: In Thursday’s issue, we mistakenly noted that the EBRD’s projects in Egypt totaled EUR 762 mn since 2014. The amount represents EBRD’s investment in Egypt since Egypt joined the bank in 1991. We regret the error.

EGYPT IN THE NEWS

FM Sameh Shoukry said that Russian intervention in Syria will “eliminate terrorism,”Youm7 reports, saying the comments were made on Al Arabiya’s “The Political Street” broadcast on Saturday. Shoukry claimed that Russia will deliver a “serious blow to Daesh in Syria and Iraq”. The minister further called for Iran to play a positive role in the Middle East and that a UN Security Council decision will be the deciding factor in the Yemen conflict. FM Shoukry’s comments were picked up by the foreign press yesterday evening, most of which are based on this report in Reuters.

Read that lost story against this: Veteran Saudi journalist Jamal Al Khashoggi, in an op-ed in Al Hayat titled ‘Is there anything worse?’ says that Saudi Arabia will not stand for an ally such as Egypt supporting Russian airstrikes. (Read in Arabic) CNN Arabic has picked up Al Khashoggi’s comments.

Former Al Jazeera journalist Mohamed Fahmy was recently featured on BBC’s Hardtalk. In the following segment, he is heavily critical of Canada’s Prime Minister Stephen Harper, who Fahmy says did not exert the same diplomatic efforts to secure his release as did Australian authorities for his colleague Peter Greste. (Watch, running time: 3:08)

Serious intention to raise funds to save Sekhemka Egyptian statue: The 4,000-year-old Sekhemka statue was sold at auction by Northampton Borough Council for GBP 15.76 mn to an anonymous buyer to finance an extension to the town’s museum and art gallery, as reported by the BBC. The UK’s Department for Culture Media and Sport said: “The purpose of the export deferral period is to allow a buyer the opportunity to save the Sekhemka statue for the UK, and ensure there will be public access.” The Egyptian government had called for a crowdfunding campaign to buy the statue, with Egyptian antiquities minister Mamdouh al-Damaty being quoted by the Independent as saying “The sale of the statue is an indelible stain on the museum’s reputation and is a moral crime against world heritage in general and the Egyptian heritage in particular.”

WORTH READING

Brookings’ Bruce Riedel writes an in-depth profile on “Washington’s favorite Saudi … the scourge of al-Qaida and Iran but no friend of those who want to see major reforms in the kingdom,” Crown Prince Muhammad bin Nayef, aka MBN.” Up until his accession to become the second in line to the throne, Riedel follows MBN’s upbringing, leadership progression, and his involvement within the security apparatus of Saudi Arabia. Riedel critically admits, however, buried near the end of his profile on Bin Nayef: “MBS [King Salman’s son Mohamed bin Salman] —who some sources say is not yet 30—will have a better chance of one day succeeding to the throne. Some speculate that MBN [Mohamed bin Nayef] will sooner or later get the boot himself to ensure MBS makes it to the top.” (Read)

DIPLOMACY

Yemen, Bahrain sever diplomatic ties with Iran: Yemen “has taken the decision to expel the Iranian ambassador to Yemen, withdraw the Yemeni envoy to Tehran and close down its diplomatic mission in Iran,” according to Yemeni state news agency Saba and as reported by Reuters on Friday. The decision was taken following the intercept and detention of an Iranian vessel loaded with weapons headed for use by Houthi rebels. Bahrain similarly recalled its envoy from Tehran on Thursday and asked for Iran’s top diplomat to leave Bahrain within 72 hours over internal interference in its affairs. Iranian state news agency PressTV attempted to spin the situation on Friday by saying that it was asking Bahrain’s envoy to leave Tehran, and denied allegations over interference in Bahrain. A statement from the Bahraini foreign ministry said that Iran was attempting to incite “confessional sedition”.

ENERGY

Petroceltic attracts interest for its Egyptian gas assets
Following the discovery of Eni’s Zohr supergiant gas field, Petroceltic revealed it has received unsolicited expressions of interest in some of its Egyptian assets as it holds two exploration licences 5km west of Zohr. The Irish Examiner reported that “while it would consider offers, [Petroceltic] does not generally see itself as a seller in terms of its Egypt-related portfolio.” The company also reiterated plans to raise extra in the coming months. (Read)

Sherif Ismail discusses cooperation, crude storage with KPC officials
Prime Minister Sherif Ismail met with the Kuwaiti Ambassador to Cairo Salem Al-Zamanan as well as representatives from the Kuwait Petroleum Corporation (KPC) to discuss enhanced energy cooperation. The parties agreed to have Kuwaiti crude stored at SUMED’s Suez facilities in order to use it to supply Kuwaiti sales to the Mediterranean. Using Egyptian refineries to refine 50-100k bbl of Kuwaiti crude per day was also discussed. The CEO of KPC also said his company is willing to partner in developing Egyptian refineries as well as in building new ones. (Read in Arabic or from state-owned Kuwait News Agency)

Electricity Ministry to receive 10% more fuel next year
EGAS will supply the Electricity Ministry’s power stations with 10% more fuel next year, a source told Al Shorouk. The Ministry and EGAS met to discuss the fuel quantities needed for the second half of the year. In response, the source said EGAS is not expediting the process to commission a third FSRU and said the specific date for that will hinge on the Electricity Ministry’s demand plan. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Co-op stores receiving additional supplies of vegetables in bid to bring down prices
The Supply Ministry has been increasing the supplies of vegetables to cooperatives at artificially low prices to 200 tons per day to bring down prices. In an interview with Al Ahram, Supply Minister Khaled Hanafi urged citizens to purchase their staples and food products from government affiliated co-ops, adding that this strategy had played a stabilizing role in tempering market prices for food essentials. (Read in Arabic)

MANUFACTURING

Government to assess welding cable dumping allegations
The Trade and Industry Ministry will begin looking into allegations that welding cables are being dumped into Egypt from China and Turkey, Al Masry Al Youm reported. Companies operating in Egypt have submitted complaints that some imported welding cables are being sold below market price and harming domestic industry. Egypt’s antidumping body said it is starting an investigation into the matter. (Read in Arabic)

Army-owned chemical labs to test import / export chemicals
Chemical labs and testing facilities run by the armed forces will be testing chemical samples slated for import or export, said Magd El Menzalawy, an FEI board member. The move was made in order to ease the backlog of tests to be undertaken by the Chemistry Administration and the General Organization for Export and Import Control (GOEIC) after the two failed to keep pace with rising demand for tests. Product has backed up in ports as a result. (Read in Arabic)

HEALTH + EDUCATION

Three Egyptian universities ranked among top 800
The Times Higher Education released its World university Rankings for 2015-2016, ranking the top 800 universities around the world according to “teaching, research, knowledge transfer and international outlook.” Three Egyptian universities made the rankings: Cairo University, Alexandria University and Suez Canal University, all within the bottom quartile. (View the index here)

REAL ESTATE + HOUSING

Azizi Developments to enter Egypt
Dubai-based property developer Azizi Developments plans to enter the Egyptian real estate market to form a real estate investment vehicle early next year, said its deputy chairman Mohsen Kamel. He also stated that the company is negotiating land purchases in New Cairo, Ain Sokhna, and North Coast. The firm is currently executing 24 projects in Dubai, all residential, worth a combined AED 4.5 bn. (Read in Arabic)

Ministry of Housing work in Ismailiya under 1.5 mn feddan reclamation project
The Central Authority for Construction has completed development work in the Al Amal village in Ismailiya (part of the 1.5 mn feddan land reclamation project) at a total cost of EGP 66.2 mn, according to Housing Minister Mostafa Madbouli. A project for agricultural tanks will be issued immediately, he added. The developments included a ring road surrounding the village, as well as inner roads, sewage and water treatment plants. (Read in Arabic)

TELECOMS + ICT

TE Data re-prices some internet services
Some of our readers may have noticed on Thursday night a redirect screen informing them that their ADSL package has changed. Those were the first of a series of changes coming to existing subscribers as the monopoly reprices packages for existing subscribers. The changes will likely to include discounts of up to 50 percent when a subscriber renews their subscription for six months. The local press has breakdowns of some of the expected changes.

INFRASTRUCTURE

Railway Authority receives EGP 1 bn offer from Chinese company to build two freight lines
An unnamed Chinese company has made an offer to the Egyptian Railways Authority to fund and construct two freight lines at and estimated cost of EGP 1 bn, Al Borsa reports. The first line would run from Robeky to Al Tibeen (a 30 km track at a cost of EGP 300 mn), while the second line would stretch from Al Manashy to Six October (70 km at a cost of EGP 700 mn. Egypt began prioritizing light and freight rail projects at EEDC in March, but has yet to break ground on any of the projects, including a high-speed link between Alexandria and Upper Egypt and a proposed Six October monorail. (Read in Arabic)

BANKING + FINANCE

EFG Hermes to reduce capital
EFG Hermes is reducing its capital by EGP 184.78 mn, Reuters reported. The capital reduction will be executed through the cancellation of treasury stocks, the company said. The company will have capital of EGP 3.074 bn after the move. (Read)

OTHER BUSINESS NEWS OF NOTE

McDonald’s announces plans to expand in 10 new governorates before 2020
The announcement was made at the fast-food giant’s opening ceremony for a new branch in Zagazig governorate, Youm7 reports. McDonald Egypt recently opened branches in Port Said, Mansour and Assiut and expects to invest up to EGP 1 bn in the next six. (Read in Arabic)

Agreement with Oriental Weavers can still be reached, ECA chief says
Egyptian Competition Authority (ECA) chief Mona Al Garf said it is still possible to reach a settlement agreement with Oriental Weavers despite the case having been referred to the Prosecutor General’s office. OW stands accused of anti-competitive practices on allegations it inked contracts that would prevent retailers from carrying its competitors’ products. Al Garf also claimed the ECA is investigating 27 other allegations of anti-trust violations. (Read in Arabic)

Italian trade delegation to visit Cairo next year, Italian Consulate announces
The Italian Consulate in Cairo announced on Saturday that a delegation of Italian companies will visit Egypt next year to discuss investment opportunities, Al Masry Al Youm says. In a workshop organized with the Leather Export Council of Egypt, Italy’s First Secretary said: “We’re certain that Egyptian companies will be important partners for Italy, especially in projects such as the Suez Canal.” (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Amr Hamzawy resigns as Masr Al Horreya Party president
Political scientist and human rights activist Amr Hamzawy announced on Saturday that we is stepping down as Masr Al Horreya Party president, saying the party had largely failed to make its case on the national stage. Mohamed Manza (secretary of the party’s politburo) and Secretary General Shaheer George announced their resignation as well. The statement notes that a board member meeting discussed the deteriorating general political atmosphere in Egypt that has produced a “new authoritarianism” which “subordinates political parties and the average Egyptian citizen”. A transitional committee, made up of active board members, will oversee the party’s work for the time being. (Read in Arabic)

Chamber of Commerce issues harsh criticism of government policy
Ahmed Al Wakeel, president of the Alexandria Chamber of Commerce and the Federation of Egyptian Chambers of Commerce, issued a criticism of the government’s economic policies in a press release yesterday. The release claims that the government fails to meet its external obligations, adopts failed and outdated policies are a result of relying on inaccurate data. The results according to the statement, was the continued stagnation of the macroeconomic climate, depletion of foreign currency, and a significant drop in tourism and exports. Alexandria’s chamber was joined by a statement from the Federation of Egyptian Chambers of Commerce, which according to Al Ahram, echoed the sentiments. The main criticism from both parties is that the government is misguided in its attempt to raise customs and imports tariffs. Alexandria’s chamber is currently conducting an examination on the effect these have had on investments in Egypt. (Read in Arabic)

Local Development and Environment Ministry work to end garbage problem nationwide; PM Ismail urges financial settlement with waste management companies
The Local Development Ministry and the Environment Ministry have been working on implementing a national strategy to combat excess refuse and garbage across the nation, through the development of biofuel factories and agricultural recycling facilities, said Local Development Minister Ahmed Zaki Badr. The strategy also seeks to facilitate access to proper garbage collection equipment by local communities. Aswat Masriya reported last week that Egypt faces international arbitration by waste management companies contracted to handle Egypt’s c.70 mn tons of garbage produced every year. The report notes that the Egyptian government owes 100s of mns of pounds in unpaid fees to the companies dating back to 2010. Prime Minister Sherif Ismail raised the issue of settling back dues during last week’s cabinet meeting.

Industry and Trade Minister calls for formation of business council with Uruguay
Egypt should form a business council with Uruguay, Trade and Industry Minister Tarek Kabil said. As a Mercosur member, business opportunities should begin to open up in Uruguay, Kabil noted. The Minister added that the Mercosur agreements should open new markets for Egyptian products. (Read in Arabic)

Housing Ministry planning a national strategy for informal settlements
The Housing Ministry is working on a national strategy to address the problem of informal settlements and incorporating that plan into the Egypt 2030 sustainable development strategy, said Housing Minister Moustafa Madbouly. “Extensive study and research is already underway, and we should have a strategy mapped out within three years,” Madbouly added, speaking at a meeting with German international development agency GIZ. Key to this strategy is the development of services to these settlements in the form of proper utilities. The Ministry had received a EUR 13 mn loan from GIZ to begin this program in nine neighborhoods around greater Cairo. (Read in Arabic)

NATIONAL SECURITY

Hellfire II missile sale to Egypt finalized: In a notice published by the US Department of Defense on 16 September and as reported by DefenceWeb last week, the US Army Contracting Command awarded Lockheed Martin a USD 357.8 mn contract to supply Hellfire II missiles to Egypt, Tunisia, Iraq, Pakistan and Indonesia, although there is no breakdown available on the allotment of missiles to each country. We first reported on the greenlight of the Hellfire sale in our 8 March issue.

Militants kill pro-army Sinai tribal leader outside Cairo: Tribal leader Khaled el-Maniee of the Sawarka tribe, who had vocally spoken in favor of the government and who had fled the peninsula for fears over his safety, was killed in the city of Obour outside of Cairo, according to unnamed security officials speaking to the AP on Friday. El-Maniee’s father and two brothers were similarly killed by militants back in 2011.

Police officer commits suicide following probe into Brotherhood links
An unnamed police officer deployed to guard who was at some point deployed to help guard Suez Canal has committed suicide after reportedly enduring significant psychological stress from repeated interrogations over his alleged connections to the Muslim Brotherhood. The officer reportedly shot himself at a rest house. (Read)

Daesh affiliate Wilayat Sina has claimed responsibility for launching rocket attacks at the Multinational Force of Observers (MFO)’s Al Gora Airport in Sinai, Muslim Brotherhood-linked Rassd News reports.

CSF conscript shot by smugglers in North Sinai -MOI: A police conscript was reportedly shot by smugglers in North Sinai, according to a statement by the Ministry of Interior on Friday. The incident took place on Thursday and the attackers were not identified and are still at large. (Read)

ON YOUR WAY OUT

Senior Islamic scholar Ahmed Karima calls for niqab ban for teachers at Al Azhar University following similar decision at Cairo University: Ahmed Karima, a senior Al Azhar University comparative Islamic jurisprudence scholar, called on university officials to prevent those wearing the niqab from teaching at the university in an ONTV interview on Saturday. Karima lauded Cairo University’s decision to ban teachers for wearing niqab while teaching science courses, saying that it does not conflict with shariah law, in addition to the Qu’ran mentioning nothing on the matter. (Read in Arabic)

Guess who’s back? Ahmed Fathy Sorour, former parliament speaker during the Hosni Mubarak era, was in attendance in Al Mahla criminal court as a criminal attorney on Saturday defending eight of his clients in a murder case, Al Masry Al Youm reports.

Zamalek SC beat Tunisia’s Etoile De Sahel 3-0 in second-leg of the CAF Confederations Cup semi-final on Saturday, but failed to advance to the finals with an aggregate score of 5-4 for Etoile. Zamalek needed four goals to advance, which would have been a historic win. The Tunisian team defeated Zamalek 5-1 in Tunisia last week. Mahmoud Abdel Moneim “Kahraba” scored twice and substitute Moustafa Fathy scored a goal in the 75th minute. Zamalek right back Hazem Emam’s shot hit the post just three minutes before the end of the game, which would have advanced the Meet Okba team to the finals. Cairo rivals Al-Ahly play the second-leg of their confederation semi-finals tomorrow against South African Orlando Pirates, needing two goals (or advance through penalty kicks) to advance to the finals after losing 1-0 in South Africa last week. (See the Zamalek game highlights here)

BY THE NUMBERS
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QUICK FACT: USD 4.9 bn in Egyptian remittances from Egyptians abroad in 3Q3 2014-15.


USD CBE auction (Thursday, 01 October): 7.7301 (unchanged since Sunday, 5 July)
USD parallel market (Thursday, 01 October): 8.03 (unchanged since Tuesday, 15 September, Reuters)

EGX30 (Thursday): 7,311 (-0.3%)
Turnover: EGP 271.8 mn (42% below the 90-day average)
EGX 30 year-to-date: -18.1%

Foreigners: Net Long | + 23.7 mn EGP
Regional: Net Long | + 3.7 mn EGP
Local: Net Short | – 27.4 mn EGP

Retail: 64.7% of total trades | 70.0% of buyers | 59.4% of sellers
Institutions: 35.3% of total trades | 30.0% of buyers | 40.6% of sellers

Foreign: 17.5% of total | 21.9% of buyers | 13.2% of sellers
Regional: 8.7% of total | 9.3% of buyers | 8.0% of sellers
Domestic: 73.8% of total | 68.8% of buyers | 78.8% of sellers


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PHAROS VIEW

Short equities as Egypt prepares to fight a G1 crisis

The Central Bank of Egypt is refraining from further easing despite obvious downside risks to growth and inflation. Why? In our view, there is only one plausible answer: The CBE is launching a preemptive strike against the so-called “G1 currency crisis”.

If Egypt is facing a G1 crisis, then Brazil could provide clues on the outlook for 2016. Brazil is in the middle of a G1 crisis. In 2015, the country is expected to suffer from its worst GDP contraction (e. -3%) in 25 years and the unemployment rate is at a 5-year high, mainly due to the plunge in commodity prices and the corruption scandal that marred Petrobras. Yet, despite the recession, the Central Bank of Brazil has already been raising policy rates for 2.5 years to combat the crash in the Real versus the USD (-35% in 2015YTD alone) and limit the pass-through of a weaker Real to consumer prices. During the process, MSCI Brazil plunged 50% y/y in USD terms to rank the third worst performing market during the period, after Greece (-66%) and Colombia (-52%).

This note is not intended to trigger panic among equity investors. Unlike Brazil, Egypt is a net beneficiary from lower international commodity prices. However, it is only meant to signalpotentially serious headwinds to equity investors in Q4-15/early 2016 if the Egyptian government and CBE decide to be ahead of the “crisis curve” by triggering a mini-recession in the near-term.

For more background and a full discussion of what a G1 crisis really is, click here.
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WTI: USD 45.54 (+0.80)
Brent: USD 48.13 (+0.44)
Gold: USD 1,136.60 / troy ounce (+2.06%)

TASI: 7,341.9 (-0.8%)
ADX: 4,520.0 (0.4%)
DFM: 3,619.4 (0.7%)
KSE Weighted Index: 386.6 (-0.5%)
QE: 11,453.1 (-0.1%)
MSM: 5,791.5 (0.1%)

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.