Authorities downplay Wilayet Sina claim of terror attack as Russian charter goes down in Sinai
Russian charter crashes in Sinai. All 224 on board are dead. Egypt and Russia downplay possible terrorist involvement after vague Wilayet Sina claim. (Speed Round, Last Night’s Talk Shows)
Interest rates unchanged after Thursday’s central bank meeting (Speed Round)
New details on draft law establishing a regulator for the natural gas industry (Speed Round)
Export subsidy fund gets EGP 1 bn top-up (Speed Round)
Siemens could add 800 MW to EEDC agreement, reports progress on wind turbine blade plant (Energy)
Edfa3ly seeking USD 5 mn to finance regional expansion (Banking + Finance)
American Pharoah gallops into history (Speed Round)
Inside the CIA Red Cell (Worth Reading)
WHAT WE’RE TRACKING TODAY
News of the crash of a Russian charter flight in Sinai on Saturday leads our Speed Round. The story continues to develop, as both Russia and Egypt reject Daesh claims that the incident was a terror attack.
The run-offs for the first round of Egypt’s two-stage parliamentary election saw 21.7% turnout, the High Elections Committee (HEC) announced at a Friday press conference. “The turnout of these elections was not the lowest in Egypt’s parliamentary elections history,” said HEC head Ayman Abbas. The liberal-ish Free Egyptians Party turned in the best showing of any political party in the running, winning 41 seats, Ahram Online reports.
Turks will head to the polls in a general election today. Recep Tayyip Erdoğan once again hopes for a majority win for his AKP Party in the Turkish parliament as part of his bid to push through amendments to Turkey’s constitution to turn the country’s government into a presidential system. Erdoğan avoided forming a coalition government following elections in June when his goal of achieving such a majority was stymied by the win of Kurdish / secular party HDP. Ahead of today’s elections, the Turkish government seized two opposition news channels and two newspapers, putting them under the authority of the state. (Anyone want to guess at the international outrage that would have happened had that taken place in Egypt?) Two essential reads this morning are The Telegraph’s basic primer on the elections, and The Guardian’s profile on Selahattin Demirtaş, whose fiery speeches against Erdoğan we most recently noted earlier this month, and whose HDP may once again be essential to preventing Erdoğan’s AKP from reaching a majority. If the AKP majority is denied, the question then becomes: Does Erdoğan force a third election in his destructive quest for power, as suggested by Bloomberg and noted in our 26 October issue?
WHAT WE’RE TRACKING THIS WEEK
The Emirates NBD Purchasing Managers Index for Egypt, Saudi Arabia and the United Arab Emirates will drop on Tuesday, 3 November at 7:30am CLT here.
ON THE HORIZON
Conference to denounce blasphemy laws on Saturday, 7 November: A group of artists, media figures and intellectuals are set to hold a conference at the Journalist’s Syndicate on Wednesday to denounce the nation’s blasphemy laws and call upon the incoming parliament to remove relevant articles from the constitution. Among the more prominent figures set to take part in the conference are Ibrahim Eissa and Islam El Beheiry, AMAY reports.
LAST NIGHT’S TALK SHOWS
“Russia’s Transport Minister has categorically rejected reports that the the Russian airplane was hit by a surface-to-air missile, describing them as unreliable,” Hona El Assema host Lamis El Hadidy said at the top of her show last night, noting that “Egypt’s prosecutor general has agreed to allow Russia to take part in the investigation.”
Shortly afterward, Tourism Minister Hisham Zaazou called-in, saying, “I hope that this investigation finds that this tragedy was purely the result of a technical malfunction. If this proves to be the case, then I expect the tourism sector to recover quickly… Russian tourists are very important to Egypt’s economy: They made up close to 34% of visitors in 2014.”
Meanwhile, Amr Adeeb, lead host of Al Qahera Al Youm, took the opportunity to praise the Egyptian government for its quick and efficient response to the tragedy. “The Egyptian government’s response to the tragedy was exemplary. The Egyptian military, as usual, played an integral role in the effort.” The host then made sure to criticize the foreign governments and individuals who used the tragedy to criticize Egypt: “These dogs take every opportunity to tear Egypt apart, whenever they get the chance.”
On the other end of TV land, Osama Kamal, host of Al Kahera Al Youm’s Cairo 360, discussed the crash in a call with Cabinet spokesman Hossam Qawish.
Qawish: “The plane’s black box was found. Additionally, the bodies of 129 passengers were recovered and sent to the Zeinhom Morgue, where they will undergo DNA analysis… We have closely cooperated with our partners in Russia since the tragedy took place. High-level Russian government representatives are expected to arrive in Cairo tomorrow [Sunday] night to analyze findings from the black box.”
SPOTLIGHT on The crash of Flight KGL-9268: Knowns and unknowns
What we know: Basic facts surrounding the crash: Flight KGL-9268, an 18-year old Airbus A321-200 run by small Russian charter jet company Kogalymavia — aka Metrojet — bound for St. Petersburg from Sharm El-Sheikh, crashed near Hasna, Sinai on Saturday. The incident occurred some time after the flight disappeared from radar screens c. 22 minutes into its journey. The flight originated from Sharm El-Sheikh airport at 05:58 local Cairo time (03:58 GMT). All 224 on board were killed. The Guardian has one of the better roundups out there to date, and this piece on the same subject by Vox is very brief but solid. Flight Radar 24 tweeted a summary of the flight path and has the full flight data here.
What we don’t know: Why it crashed: Both black boxes have been successfully recovered, and Egyptian authorities are investigating the incident along with senior Russian officials who arrived in Cairo on Saturday, including Russia’s transport minister, emergencies minister, and the head of the Federal Air Transport Agency, Rosaviatsia, according to Russian state news agency TASS. France’s civil aviation safety agency is also sending a team to Egypt to assist with the investigation, as will Germany’s Federal Bureau of Aircraft Accident Investigation. Airbus will assist authorities in the investigation, the company said in a press release which referred to the incident as an “accident.”
The pilot did not request an emergency landing and reported no difficulties: “Communications between the pilot and the tower were very normal — no distress signals occurred. … All was normal; the plane disappeared suddenly off the radar without any prior warning,” Civil Aviation Minister Hossam Kamal said in televised remarks.
Sinai-based Daesh affiliate Wilayat Sina claimed responsibility for the crash hours after it was first reported in the media. The group issued a vaguely-worded statement (Arabic) that does not even attempt to state how they could have downed the plane. The statement says the attack was in retribution for Russian airstrikes in Syria, which would imply that Wilayat Sina has the ability to distinguish a Russian-chartered Airbus at an altitude of 30K feet in the sky and shoot it down. The widespread consensus among security experts is that the Daesh claim doesn’t hold water. Both Russian transport minister Maksim Sokolov and Brig. Gen. Mohamed Samir, the Egyptian Army’s spokesman, disputed Daesh’s claim. Shoulder-fired anti-aircraft weapons (MANPADS) — which Wilayat Sina has previously shown off in videos, and which may have filtered into Egypt from Libya or elsewhere in the region — would be unable to take out an aircraft operating at 30k feet. The Malaysian airliner downed over Ukraine at a similar altitude was brought down by a Buk system.
Launched in 1988, the Airbus A321 has good safety record, with only one reported case of fatalities prior to this incident.
Kogalymavia’s last major incident was four years ago, when three people were killed and 43 injured in 2011 after one of its planes caught fire while taxiing for take-off at Surgut International Airport in Russia.
Political leadership: President Abdel Fattah El Sisi offered his condolences to President Vladimir Putin, according to a statement from the Kremlin picked up by AMAY. The Russian president likewise offered his condolences to the families of the crash’s victims.
Airlines: The Egyptian Holding Company for Airports & Air Navigation (EHCAA) has yet to cancel or reroute flights to Sharm El Sheikh, as reported by Al Mal, but both Lufthansa and Air France KLM have decided to avoid flights over Sinai until the cause of the crash becomes clear. Emirates airlines have said they will also avoid flights over the peninsula until the cause of the crash is discovered.
Egypt’s tourism industry: Egypt will postpone the launch of its international tourism promotional campaign and has temporarily suspended its promotional campaign in Russia, reports Al Mal. According to May Azmy, a general manager at J. Walter Thompson (JWT) ad agency—which is running the campaign—the government has postponed a Tourism Ministry summit which was due to be held yesterday.
Magdy Azab, the chairman of tourism and hotel developer Pyramisa, told Al Mal that either potential cause of the crash — mechanical failure or terrorism — would have a devastating effect on the tourism sector. He predicts that if the results conclude that the culprit was a technical malfunction, then this will lead both Russian and Egyptian regulators to impose stricter safety measures and cancel affordable chartered flights, which would significantly reduce the number of Russian tourists—who make up 30-35% of tourists visiting Egypt. If the report concludes that it was terrorism, then this will lead European countries to issue travel bans, and would spell “an end to the sector as we know it,” says Azab.
Radical Islamists throughout the region: A number of radical Islamists took to social media to celebrate the downing of the plane, with some calling it divine retribution for Russia’s airstrikes in Syria. Others, such as Kuwaiti Salafi Abdulrahman Al-Nassar, wrote “Better they die in the crash than be raised Orthodox Christian.” (View tweet in Arabic)
The final word on the matter: “Until there is reliable evidence about the circumstances of what happened, there is no sense in putting forward and discussing any versions,” said Russian aviation regulator Rosaviatsia in a statement carried by the Guardian.
Surprising pretty much no one, the Central Bank of Egypt left rates unchanged on Thursday following a meeting of its Monetary Policy Committee, leaving overnight deposits at 8.75% and lending at 9.75%. It was the last meeting of Hisham Ramez’s tenure as governor; he will hand the reins to former National Bank of Egypt chairman Tarek Amer at the end of November.
Draft law on new natural gas regulator in the works: New details have emerged regarding a bill still in drafting that will, among other things, establish a regulatory authority for the natural gas market. The decision to begin drafting the law was approved by Cabinet last Wednesday, and applies to dealings in compressed natural gas (CNG) and liquefied natural gas (LNG). The law would see the state’s role reduced to that of a market regulator, with private sector players allowed to directly trade gas using the existing pipeline and network infrastructure. The new authority will report to the Oil Minister directly and will regulate the gas market and work on securing connectivity to the grid for third parties. The law will also apply to biogas and any form of unconventional gas as long as it is technically feasible to transport it safely through the existing network, Al Masry Al Youm reports. The timeline: It is as-yet uncertain whether the law will be drafted for President Abdel Fattah El Sisi to enact before he hands legislative power back to the House of Representatives.
The Finance Ministry has finished its list of exemptions under the value-added tax, and there are no surprises: Food products, dairy, education and health will all be exempted from the VAT, while taxes on cigarettes and alcohol will remain unchanged, Al Masry Al Youm reports. The tax is still expected to be in place before year’s end; the state hopes it will kick an additional EGP 30 bn annually into its coffers.
GB Auto halted assembly operations for 20 days in September and October, but came back online on Thursday. “GB Auto factories faced some turbulence in production during September and October due to delays of production input shipments which have led to the halting of production at some factories for 20 days,” Reuters said, quoting a statement sent to the EGX. Production inputs are now on hand and the factories are functioning normally. Meanwhile, GB Auto CEO Raouf Ghabbour said he wants to see the EGP drop to the EGP 10-10.50 per USD 1 range to match the drop recorded by emerging market currencies this year, Al Mal reported. The EGX had halted trading on GB Auto on Thursday following the news of the factory stoppage.
Oriental Weavers’ Mohamed Farid Khamis says Prime Minister Sherif Ismail has given his preliminary approval to a proposal banning the import of luxury goods for three to five years, Amwal Al Ghad claims. Reportedly on the list of soon-to-banned items: pet food, toys, and seafood. The proposal has passed on to Ittihadiya for a final decision.
The domestic press rumour mill is in overdrive spreading news that a wide-ranging gubernatorial reshuffle is in the pipeline. President Abdel Fattah El Sisi is reportedly unhappy with the performance of governors appointed by former Prime Minister Ibrahim Mahlab and what he sees as their failure to deal with recurring issues. Local Development Minister Ahmed Zaki Badr is reportedly assessing the performance of various governors. Al Masry Al Youm says Cairo, Giza, and Alexandria will be getting governors with proven experience in office in other cities, but that new candidates are being considered for the rest of the country.
Trade and Industry Minister Tarek Kabil made a splash in the press on Thursday, with announcements and statements including:
- The Export Subsidy Fund has been expanded to EGP 3.7 bn, up from the budgeted amount of EGP 2.7 bn, AMAY reports, citing comments from Kabil, who also announced that the formation of a committee to review export policies which will consist of Ministry officials and members of the export councils.
- Egypt to see an influx of Emirati investment –UAE’s Sultan Jaber: In a meeting with Trade and Industry Minister Tarek Kabil, UAE Minister of State Sultan Jaber said that Egypt will witness an influx of Emirati investment in the upcoming period, Al Ahram reports. Kabil announced that the first meeting of the UAE-Egypt Business Council will take place sometime in January.
- Haven’t we heard this song before? The Trade and Industry Ministry is forming a committee to reform licensing procedures and streamline the bureaucracy for manufacturers, said Kabil. The announcement came after a meeting with the Industrial Development Authority to discuss simplifying the process at the Industrial Registry and obtaining land from the government, AMAY reports.
- Is Kabil wading into the tiff between NUCA and GAFI? The trade and industry minister said on Thursday that it’s key to have a single government agency organize the sale of state land to the private sector. With scant mention of GAFI, Kabil noted there has been more coordination between NUCA, the Industrial Development Authority and the governorates to ensure land is properly allocated, particularly in Upper Egypt. His remarks came after a meeting with the Egyptian Union of Investor Associations, which highlighted the difficulty manufacturers have in accessing state land due to conflicts between government agencies over who’s in charge, AMAY reports. We’re reading the story in light of the very public power struggle between the Investment Ministry’s GAFI and the Housing Ministry’s NUCA over allocation of land to investors.
The EBRD issued a statement on Friday officially announcing that its board voted to make Egypt one of its countries of operations and a formal recipient of finance and other support provided by the Bank. We originally noted the upgrade of Egypt’s status on 30 September, citing a statement from Ittihadiya. (Read in Arabic)
The Health Ministry launched yesterday a campaign to vaccinate 24 mn children against measles and rubella at a cost of EGP 164 mn. The nationwide campaign, which targets children between the ages of the 9 months and 10 years, is expected to last three weeks and comes as cases of measles in Egypt nearly doubled to 5,027 year-to-date in 2015, Al-Ahram reports.
US contributes USD 45 mn toward entrepreneurship and employment programs in Egypt: USAID will invest USD 45 mn in two new programs to promote small business and career skills training, according to a statement issued by the US Embassy in Cairo on Thursday. The fund will help small businesses qualify and gain access to bank loans, develop new business ideas, and conduct market research.
Too hot for Enterprise: Ride-hailing service Uber and leading Cairo artist Ahmed Nady are separately tackling the problems women face safely accessing transportation — in cabs and the Metro. We’re leaving the story on our blog because use of the adjective in question will mean we’re not delivered to anyone’s inboxes this morning.
American Pharoah Gallops Into History: Ahmed Zayat’s American Pharoah won the Breeders’ Cup Classic on Saturday, making the horse the first to secure the “Grand Slam” of racing: the Kentucky Derby, the Preakness Stakes, the Belmont Stakes and the Breeders’ Cup Classic, the Wall Street Journal reports. The win marks the final race for American Pharoah, who now begins his stud career next year in Versailles, Kentucky.
EGYPT IN THE NEWS
Given that news of the Russian plane crash in Sinai is not simply the most-read story on Egypt in the foreign press this morning, but also the most-read news story in the world at the moment, we’ve cut Egypt in the News for the day to accommodate coverage of the crash in the Spotlight in the Speed Round, above.
Inside the CIA Red Cell: How an experimental unit transformed the intelligence community, Micah Zenko, Foreign Policy Magazine. Zenko writes on the CIA’s ultimate red team / B team (which also has its own A team / B team) to provide alternative analysis to the CIA, running under the mission statement, as set by former CIA Director George Tenet: “Tell me things others don’t and make [senior officials] feel uncomfortable.” According to former acting CIA Director Michael Morell: “For every seven duds, you get three brilliant pieces. So you have to learn to live with the duds and not try to smother [the Red Cell] with traditional oversight that would kill its creativity.” (Read)
Reham Said, the sewer of Egyptian media©, receives a painful and long overdue lesson in humility: Al Nahar’s Sabaya El-Kheir program, hosted by Reham Said, who has generously been called the “sewer of Egyptian media,” has been suspended, the BBC reports. The suspension came after at least 15 high-profile advertisers pulled out from sponsoring her program following an episode in which Said brought a young woman onto her program who was recently a victim of harassment and physical assault, only to turn around and blame her for provoking her assaulter as she was wearing a sleeveless shirt. Said is further alleged to have had her television crew steal private photos from the young woman’s phone and broadcast them to her audience.
…Following the episode, the hashtag Die_Reham [#موتي_يا_ريهام] began trending on Twitter in Egypt, as it would appear the entire nation has reached its breaking point with regard to how much more any of us can take of this miserable swamp monster. Some of us here at Enterprise have reservations even mentioning Said by name, as she, like so many other Egyptian television personalities, is clearly suffering from a pathological need for any sort of attention. However, our unquenchable desire to watch her be insulted has won out this particular internal debate. Watch an incredibly satisfying take down of Said as she called in to another program, starting off by telling the clearly incensed host “I don’t even know who you are.” This video is currently the second-highest trending video on YouTube in Egypt and been viewed 750K times thus far. (Watch in Arabic, running time: 2:26)
El Sisi attends Manama dialogue, meets with German Defence Minister: President Abdel Fattah El Sisi met with German Defence Minister Ursula von der Leyen in Manama, Bahrain on Saturday, Daily News Egypt reports. El Sisi was in Bahrain on the final leg of his Asia tour. In addition to the annual International Institute for Strategic Studies (IISS) Manama Dialogue, El Sisi also met with Bahrain’s King Hamad Bin Issa Al-Khalifa.
U.S. to send special forces to Syria, truce sought after peace talks: The United States will send c. 50 operators to act as advisers on the ground the Syrian rebels fighting Daesh, Reuters reports. The announcement came shortly before a press conference on Friday at the Vienna peace talks on Syria, which included representatives from a number of states including Egypt and for the first time, Iran.
…According to MFA spokesperson Ahmed Abu Zeid, nine main points were agreed upon in Vienna, including: “1. Syria’s unity, independence, territorial integrity and secular character is fundamental,” and “2. Syrian state institutions will remain intact.” German outlet DW quotes German Middle East expert Michael Lüders as dismissing points one and two as “wishful thinking.” He went on to say: “Syria as a central state has ceased to exist. The regime of Bashar al-Assad controls approximately 30 percent of Syrian territory, the rest having fallen prey to ‘Islamic State,’ the Nusra Front, which is the al Qaeda offshoot in Syria, and other Islamic fundamentalist groups.”
India looks to deepen its relationship with Egypt -Indian President Pranab Mukherjee: Following President Abdel Fattah El Sisi’s participation in the third India Africa Forum Summit, the office of the Indian presidency issued a statement calling for deepening of political and security cooperation, economic engagement, scientific collaboration and increased cultural and person to person exchanges, according to the Economic Times of India. “India greatly values its civilisational relationship with Egypt. India considers Egypt to be a major power in the region and a bridge between Asia and Africa,” Indian President Pranab Mukherjee is quoted as saying. Indian Prime Minister Narendra Modi and El Sisi also reportedly discussed the need to work together toward the goal of permanent representation on the United Nations Security Council for India and Africa. In a goodwill gesture, El Sisi pardoned two Indians who have been jailed in Egypt for 16 and 22 years, respectively, for unspecified crimes.
Höegh confident Egypt will remain a client for five years, maybe longer
The Höegh Gallant could serve Egypt for even longer than five years, “but it all depends on how quickly local reserves are developed,” Richard Tyrrell, chief executive of Höegh LNG Partners said. Reuters is quoting a government source in saying that Egypt will likely stop importing LNG by 2020 with the Zohr field expected to begin production in 2018. Whether Egypt reaches its target or not, there is no pressure on LNG importers as “not too many people are optimistic the gas price is going to be higher anytime soon – either LNG or natural gas,” an analyst at Clarksons Platou said. (Read)
First of three Siemens plants operational in September 2016; Siemens could expand EEDC agreement by 800 MW
Siemens has begun constructing the turbine bases for both the three power plants and its turbine blade factory, according to sources within the Ministry of Electricity, Youm7 reported. The three plants have a total capacity of 14.4 GW, the first of which will be ready in September 2016 with a capacity of 4.8 GW. Construction works for administrative buildings on-site have begun, the sources added. Siemens may also seek to expand the original terms of the USD 8.8 bn agreement first inked at the EEDC by an additional 800 MW of capacity, according to Siemens chief executive Joe Kaeser in an internal Siemens newsletter as reported by Reuters.
EGAS negotiates with Eni to speed up linking Shorouk discovery to national grid
EGAS is reported to be in talks with Eni officials to speed up connecting the new Zohr field to the national grid, a source told DNE. EGAS is discussing the production plan with Eni, but wants to speed up the process and increase the gas volume that will be pumped in the first phase of the project. First gas from the field is expected in 2017, and this coincides with the beginning of production from the first phase BP’s North Alexandria fields. By linking both project around the same time, EGAS believes this will help decrease the gap between local production and consumption. (Read)
Kuwait Energy wants to expand its operations in Egypt
Kuwait Energy plans to expand in Egypt and will be actively participating in more E&P tender offers in new exploration sites, said the company’s CEO Sara Akbar. Her statements follow a meeting with Petroleum Minister Tarek El Molla to review progress on the EGPC’s joint venture with Kuwait Energy in Sector – 9 Basra field, in which the EGPC has a 10%. (Read in Arabic)
Second FSRU operational before mid-month -EGAS chair
Egypt’s second FSRU is now being loaded with gas off the coast of Ain Sokhna ahead of beginning trial demonstrations by week’s end, said EGAS chairman Khaled Abdel Badei. The vessel will be supplying industrial consumers by mid-month. Offshore loading of the gas—which Al Ahram is reporting as the first in the history of the petroleum sector—was used as dredging for the unit’s berth in port has yet to be completed. (Read in Arabic)
Railway authority inks EUR 16mn import deal with Evraz
The Egypt Railway Authority (ERA) signed a EUR 16mn deal with Russia’s Evraz to import 5K tons of steel that will be used for the development of the country’s metro and railway line networks, reports Ahram. The steel, which will be imported over an 18 month period, will be used to develop approximately 18 km of rail. Additionally, a portion of the imported steel will be used in the construction of Line 4 of the Cairo Metro, adds the source. (Read in Arabic)
New Minya commences development of telephone network, looks to revamp sewage system
Development of New Minya telephone networks has begun, said head of the New Minya Municipality Mohamed El Qusry. The project is being undertaken in coordination with TE. In related news, the municipality is in the process of drawing up a plan for the development of its sewage networks. (Read in Arabic)
BASIC MATERIALS + COMMODITIES
France wins half of Egypt’s wheat tender as euro adds allure
French wheat won half of Egypt’s tender on the back of a weakening euro, Bloomberg reported, noting that the offer from Russia on the tender was not as competitive including freight, according to two unnamed traders knowledgeable on the matter. “The euro is near a three-month low against the dollar, boosting the attractiveness of grain from France, consultants at Agritel wrote in a report,” Bloomberg noted.
Banks provide financing to clear goods from customs
Egyptian banks have begun to provide their clients with necessary foreign currency to release EGP 3 bn worth of goods that have been held at customs as long as four months, reports Al-Ahram. These goods include perishable items, such as meat and butter, and pharmaceutical products. The CBE has ordered the banks pay late fees and other debts on behalf of its clients in order to lessen pressure on the country’s foreign reserves. In related news, Mohamed El Sewedy, head of the Federation of Egyptian Chambers of Commerce, said that banks were working to release raw material and other items used for manufacturing from customs. (Read in Arabic)
REAL ESTATE + HOUSING
NUCA begins waste recycling, compost production in five new cities
The New Urban Communities Authority has launched a large-scale project to recycle building material waste, garbage, and agricultural waste, said Kamal Fahmy, deputy head of NUCA. The building material waste comes after NUCA signed a cooperation protocol with the Arab Contractors to recycle their building material waste in 6 of October to produce various concrete materials. The authority has also begun producing compost from recycling agricultural waste in five new cities where the project was applied, including Obour, New Tiba, New Borg El Arab, Sadat, New Salhiya. (Read in Arabic)
AUTOMOTIVE + TRANSPORTATION
Lebanon looking to establish Beirut-Alexandria maritime route
Lebanon is assessing the possibility of developing a trade route between Beirut and Alexandria, Al Mal reported. Lebanon is also looking into connecting a Lebanese port to Port Said after the annual volume of trade between the two countries fell to USD 600 mn, compared to USD 1 bn earlier. (Read in Arabic)
BANKING + FINANCE
Egyptian startup Edfa3ly seeking USD 5 mn to finance regional expansion
Online shopper service Edfa3ly — which allows consumers in Egypt to make purchases through their site from online retailers such as Amazon and eBay, and then by credit card, cash on delivery, and Fawry — is seeking USD 5 mn to finance plans for regional expansion across North and East Africa as well as a number of GCC countries. The company’s co-founder and managing director says Edfa3ly is on track to make USD 15 mn in revenues and register 20-30% gross margins. Edfa3ly’s success “prompted the startup to launch sister brand Yashry last year, an ecommerce site with more than 100,000 products that depends on Edfa3ly’s logistics,” Disrupt Africa says. The company raised USD 150,000 in its seed round in 2013. (Read)
EGYPT POLITICS + ECONOMICS
Satirist Akram Hosni mocks state TV; ERTU President threatens to cut signal from MBC
The head of the Egyptian Radio and Television Union threatened to cut Gulf broadcaster MBC’s signal in Egypt after satirist Akram Hosni, better known as “Abu Hafeeza,” mocked Egyptian state television on Thursday, Youm7 reports. “MBC must release an official apology,” ERTU chief Essam El Amir said. Following in Bassem Youssef’s footsteps, Hosni had a ten-minute segment, including a three-minute song, that mocked state TV anchors for their on-air blunders. El Amir said that Hosni’s song attempted to “down Egyptian state TV”. (Watch Hosni’s song here in Arabic, and read El Amir’s comments here in Arabic)
United States delivers four F-16 fighter jets to Egyptian Air Force
The Egyptian Air Force received delivery of four F-16 fighter jets from the United States, marked by a ceremony on Thursday attended by US Ambassador Stephen Beecroft, Senior Defense Official Major General Charles Hooper, Air Marshal Younes al-Masri, and other senior Egyptian military officials, according to a press release from the US Embassy in Cairo. “The F-16 Block 52 aircraft are premier fighter aircraft capable of performing reconnaissance missions, air-to-ground attacks, and air-to-air engagement. In addition to the fighter aircraft, the United States will provide follow-on maintenance and training for Egyptian Air Force pilots and ground crews,” according to the statement.
Three security personnel injured during “tens-strong” Islamist protest in Sharqiya
Three security personnel were injured in clashes with “tens” of supporters of the Muslim Brotherhood in the Nile Delta governorate of Sharqiya, according to a security official said, as reported by Ahram Online. The clashes took place on Friday following the call by the Muslim Brotherhood for protests against the parliamentary elections.
Six security members injured in North Sinai blast
One police officer and five military personnel were injured in an explosion targeting an armoured security vehicle in the North Sinai city of El-Arish, according to state news agency MENA and as reported by Ahram Online. “Last week, the Egyptian Armed Forces spokesperson announced that the army had gained full control over the North Sinai areas of El-Arish, Rafah and Sheikh Zuwaid, Ahram Online reported.”
ON YOUR WAY OUT
We now know the details behind former Agriculture Minister Salah Helal’s arrest in September. Al Masry Al Youm said Helal solicited EGP 11.3 mn worth of in-kind “bribes” in order to facilitate the registration of a plot of land for Cairo 3A. Helal reportedly asked for memberships in sports clubs as well as a paid Hajj trip.
Oracle has denied the company is shutting down its offices in Egypt, according to a report in Youm7 citing Oracle Egypt head Basel Mubarak
Misr Spinning and Weaving Company workers continue strike for 11th consecutive day as government threatens to fire workers, AMAY reports. Manpower Minister Gamal Sorour threatened to fire workers currently on strike, labor union Kamal Mohamed told Al Watan on Wednesday.
BY THE NUMBERS
QUICK FACT: EGP 9.4 bn — the value of restricted and unrestricted stock in August 2015.
USD CBE auction (Thursday, 29 October): 7.9301 (unchanged since Sunday, 18 October)
USD parallel market (Thursday, 29 October): 7.50 (+0.20 from Tuesday, 27 October, Reuters)
EGX30 (Thursday): 7507.89 (+0.38%)
Turnover: EGP 507.8 mn (17% above the 90-day average)
EGX 30 year-to-date: -15.89%
Foreigners: Net Long | EGP +30.8 mn
Regional: Net Short | EGP -12.1 mn
Local: Net Short | EGP -18.7 mn
Retail: 61.5% of total trades | 60.8% of buyers | 62.2% of sellers
Institutions: 38.5% of total trades | 39.2% of buyers | 37.8% of sellers
Foreign: 22.6% of total | 25.7% of buyers | 19.6% of sellers
Regional: 8.8% of total | 7.6% of buyers | 10.0% of sellers
Domestic: 68.6% of total | 66.7% of buyers | 70.4% of sellers
For Ezz Steel, a 40% tariff is not a full hedge against deflation
In our latest macro update, we noted that Ezz Steel could be ranked as a beneficiary from a weaker EGP, due to its impact on raising import parity prices. Although the firm has indeed managed to raise its rebar prices during October by cc 5.0% and the share price has responded accordingly (+ 5.1% in October), we see the current selling prices as unsustainable even if 1) the government imposes an import tariff of 40% and 2) the EGP weakened to 9 per USD starting 2016 onwards. Tap here to find out why.
WTI: USD 46.59 (+1.15%)
Brent: USD 49.56 (+1.56%)
Gold: USD 1,141.70 / troy ounce (+0.03%)
TASI: 7,124.8 (+0.1%)
ADX: 4,322.0 (flat)
DFM: 3,503.8 (+0.5%)
KSE Weighted Index: 388.4 (-0.2%)
QE: 11,604.6 (-0.3%)
MSM: 5,928.2 (-0.1%)