TL;DR

Saudi Arabia’s deputy crown prince promises five years of oil aid as KSA looks to ramp up investment in Egypt and mulls buying Egyptian debt as an alternative to new deposits at the CBE (Speed Round)

48 hours of interest rate fun: The U.S. Fed is expected to raise rates today for the first time in six years; the CBE will review rates tomorrow (What We’re Tracking Today)

10 companies could IPO on the EGX in 1H2016, says bourse chief. (Speed Round)

Who will be the next Speaker of the House? (Speed Round)

4G internet by the end of 2016? (Speed Round)

Bloomberg offers-up Doomsday scenarios for 2016 (Speed Round)

NYT report says Egypt’s HepC program could serve as global “blueprint” (Worth Reading)

By the Numbers + CBE will face the moment of truth.

WHAT WE’RE TRACKING TODAY

It’s interest rate day: The U.S. Federal Reserve’s Federal Open Market Committee will wrap its two-day meeting today, issuing a statement at about 8pm CLT. The market expectation is that the Fed will raise interest rates for the first time since June 2006. How much of a hike? “Liftoff,” as it’s being called, will likely be in the 0.25 percentage point range. As you would expect, the story is the lead item in the global business press this morning. Reuters notes that rising inflation and a “strengthening labor market” should give the Fed confidence to hike rates. If you need to get up to speed this morning, these pieces from the mainstream business press are your starting points:

• Fed opens meeting to put an end to crisis era policy (Reuters)
• Fed Poised to Mark the End of an Era (Wall Street Journal)
• How the US Federal Reserve intends to raise rates and US industrial heartland frets as Fed rate rise looms (Financial Times, paywall)

As for what this all means for emerging markets, the WSJ reminds us that a rate hike would set EM policymakers off on a journey that will take more than a year. As most of our readers have argued since time immemorial, the Journal quotes UBS Wealth Management CIO Jorge Mariscal as saying “the notion you can just buy EM assets as a group is being challenged. Investors have to pick their spots.” The thesis that EM had “decoupled” from Western markets is dead, and emerging markets are on track to grow at about 4%, their weakest rate since 2009. Reuters, meanwhile, notes that “Fed rate hike to put pressure on emerging market corporates in 2016,” particularly for companies with USD debt and locally denominated revenues in weakening currencies. Rising U.S. rates and declining global energy and commodity prices are also prompting investors to consider pulling back from plays in Brazil, Russia, Turkey and South Africa. All of this comes as fund managers continue to flee EM, the Financial Times says, quoting one as noting that “This has been a miserable year for EM.” Net inflows from foreign investors into EM have fallen USD 66 bn to USD 285 bn this year, the FT notes.

Finally, consider reading Bloomberg’s “Here’s What the Fed Will Be Watching to See If Liftoff Worked.”

Closer to home: The Central Bank of Egypt’s Monetary Policy Committee will meet tomorrow to review interest rates. The gathering will be preceded by a meeting of the Coordinating Committee meant to allow cabinet members to coordinate fiscal and economic policies with the central bank’s monetary policy. Analysts largely say the outcome of the MPC meeting is too close to call.

The devil is in the details: The Ismail cabinet will hold its regular weekly meeting today. We’ll be looking for specifics on yesterday’s announcement that Saudi Arabia said it will help meet Egypt’s petroleum needs for the coming five years. If true, it would go some way toward easing Egypt’s FX crunch.

We can expect a bout of “unstable weather” with heavy rainfall along the northern coast, with the Egyptian Meteorological Authority (EMA) expecting this storm to last a week. Alexandria, Matrouh, and Al Saloom will bear the brunt of this nasty weather. Government bodies are on high alert, CNN Arabicreports.

Star Wars: The Force Awakens opens at the IMAX at American Plaza in Sixth of October City in Cairo today, along with France, Italy and the Scandinavian countries and a full two days before its release in the United States. You can book your ticket online here or call Vodafone’s directory at 2121 and have them do it for you. At the time of dispatch, the evening screenings were nearly fully booked, but there are plenty of decent seats available at the 10:15 am, 1:00 pm and 3:45 pm showings. But you have a job, you say. So? So what you’ve got a job.

WHAT WE’RE TRACKING THIS WEEK

Egypt expects to sign USD 1.5 bn in loan agreements, including the USD 500 mn facility the African Development bank approved yesterday and USD 1 bn from the World Bank. The Ismail government is looking to draw as much as USD 1 bn before year’s end. International Cooperation Minister Sahar Nasr said yesterday that the AfDB approved its USD 500 mn facility yesterday, according to Al Mal.

LAST NIGHT’S TALK SHOWS

Ahmed Moussa’s attack on film director Khaled Youssef has touched off a war between Egypt’s television between top TV presenters. Al-Nahar Khaled Salah, OnTV’s Gaber El Karmouty and many others demanded that Moussa apologize or face investigation by the Press Syndicate for defaming Youssef, who was recently elected to the parliament (watch). Other media celebrities including Lamis El-Hadidy and Amr Adeeb said the move against the renowned director doesn’t look like a coincidence, as lawsuits were filed to prevent Youssef from taking his seat in the House of Representatives. (Editor’s note: The wording we use to describe what Moussa alleges tripped the algorithms yesterday. The background is in yesterday’s report on our website.)

On the business front, Sherif Amer interviewed telecom magnate Naguib Sawiris on MBC Misr’s “Yahodith Fi Masr.” Sawiris said: “It appears that El-Sisi supports the free market. I was disappointing with the Salah Diab case, however.” Asked about Egypt’s economy, Sawiris said he expects conditions to improve in 2016. “I’m optimistic that the bureaucratic conditions in this country are at a boiling point,” Sawiris said. “I tell the Egyptian government: That’s all we [businessmen] are going to talk to them about.” On the FX crunch, Sawiris said the problem stems not from the exchange rate, but from the availability of the USD. Sawiris added that we have to eventually end all restrictions on the USD. “Our system is one of the most stupid on all levels,” Sawiris remarked.

Lamis El Hadidy’s main segment on CBC’s “Hona Al Assema” was an in-studio interview with movie director Dawood Abdel Sayed, whose latest film is “Out of the Ordinary.” El Hadidy did, however, extensively cover news of the “Islamic Coalition against Daesh” led by Saudi Arabia. What is Egypt’s interest in the coalition, Lamis asked. Emad Gad, researcher at Al Ahram Center, phoned in to the program and said: “To name it as an Islamic Coalition and for it to end as a sectarian one, could deepen the region’s wounds further.” Lamis noted that Iraq is not a Coalition member, to which Iraqi intellectual Ehsan al ShamlI phoned in and responded: “Iraq was not invited to the Coalition and is fighting terrorism on behalf of all Arab and Islamic countries.”

Ibrahim Eissa dedicated the first part of his show on Al Kahera Wel Nas, to ripping apart the proposed Islamic Coalition against Daesh. “Qatar, who is responsible for killing millions of Syrians, is going to combat terrorism?” Eissa emphatically asked. “Turkey? An ally of Daesh? Did somebody tell them that we’re fools?” Eissa further ripped the coalition, calling it a good rendition of a “Hollywood movie.”
On Orbit, Amr Adeeb and Rania Badawi addressed the same news, adding little to the debate.

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SPEED ROUND

Saudi Arabia’s King Salman has ordered the authorities in the kingdom to help Egypt with oil products for the next five years, Deputy Crown Prince Mohammed Bin Salman said in a statement released by the official Saudi Press Agency. The statement provides no further details on the oil aid. The news came after the second meeting of the Egyptian Saudi Coordination Council held in Cairo yesterday. Bin Salman said that the king had also directed that Saudi increase its investments in Egypt to more than SAR 30 bn (USD 8 bn), but the wording of the statement is vague. Given that Egypt had said in January 2015 that Saudi investment here topped EGP 71 bn, we wonder whether the statement is in promising USD 8 bn in new investment. The statement further notes that KSA will “support the traffic in the Suez Canal with the transit of Saudi ships.” The SPA readout on the meeting has been widely picked up by the domestic business press, while the official readout of a meeting between Bin Salman and President Abdel Fattah El Sisi has won front-page placement. The statement from Ittihadiya dwells in particular on discussions of security cooperation.

Meanwhile, Saudi Arabia also discussed helping Egypt by buying local debt instead of depositing cash Central Bank of Egypt, Bloomberg reports, citing an unnamed government as saying the two sides discussed Saudi purchases of Egyptian treasury bonds and treasury bills during Bin Salman’s visit. The offer has not been public yet, and the Prime Minister Sherif Ismail told reporters that “all options for Saudi supports remain on the table.”

Beyond the promise of new investments in the SPA release, no details of new Saudi investment in Egyptian megaprojects emerged yesterday from talks led by Prime Minister Sherif. The PM said discussions will resume in Saudi on 5 January 2016.

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Ten companies are ready to IPO on the Egyptian Exchange in the first half of next year, said bourse chief Mohamed Omran. The list includes several companies that had earlier requested permission to delay offerings meant to come to market in 2015, citing poor market conditions this year. Among those expected to list: Express for Integrated Solutions, Raya, Mobco, DBK Pharma, IT Synergy, and MB for Engineering and Contracting. We had previously reported that Reuters had crunched some numbers and estimated as many as 15 IPOs in 1H2016.

Who will be the next Speaker of the House? The two leading candidates include former foreign minister and Arab League boss Amr Moussa and current Justice Minister Ahmed El-Zend, says Ahram Online’s Gamal Essam El Din. The speaker is one of 28 members of the House of Representatives that El Sisi is expected to appoint in the coming week under article 101 of the constitution. The piece is worth a read, but we caution you that it quotes Tawfik Okasha rather liberally.

4G is expected towards the end of 2016: High-speed 4G wireless data service could go live in Egypt by the end of 2016, ICT Minister Yasser Al Kady said during a panel discussion at the Cairo ICT conference. Earlier reports had suggested 4G could come as early as mid-year. Mobinil CEO Yves Gauthier said that his company was preparing to offer the service, while Vodafone’s CEO Ahmed Essam said the ongoing switch to fiber optic cables nationally would speed the transition to 4G. In related news: Al Mal says the CIT ministry is planning to auction additional 3G spectrum in the first half of the new year.

The investigation committee looking into the Metrojet plane crash says it has “not ruled out any possibility” regarding the cause of the crash. “We didn’t reach a final conclusion yet. What we said [Monday] was a preliminary assessment that doesn’t rule out any possibility behind the crash,” Mohamed Rahma, the Ministry of Aviation spokesperson told Al Hayat TV news channel. As we noted yesterday, a preliminary report saying there was no sign of terrorism in the downing of the flight was widely ridiculed in the international press, prompting Rahma to note: “I believe we published a very balanced initial report, but the media was looking to create headlines out of it, so it misunderstood the investigation committee.”
Beltone Financial questions soundness of liberalizing fertilizer prices: Beltone Financial called into question the current cabinet-level debate on the liberalization of the nitrogen fertilizer, saying that it will have negative repercussions on the agricultural sector, Al Mal reports. The plan involves cutting subsidized natural gas to manufacturers, which currently costs them less than USD 4.5 per mmBtu. The Beltone report makes the case that the subsequent increase in fertilizer prices without guarantees that the government is able to subsidize fertilizers to farmers would hurt agricultural productivity and cut into farmers’ margins at the same time as global fertilizer prices are expected to rise to USD 400 per ton. Under the current system, the government provides manufacturers with subsidized natural gas in exchange for their agreeing to sell 50% of their production domestically at lower prices. As we noted in late November, the government is considering replacing this system to one where it purchases fertilizers from manufacturers at market prices and sells them to farmers at subsidized rates.

Gov’t imports squeezing private livestock companies out of the import market: A 28% drop in livestock import contracts by the private sector in December is a sure sign that private sector livestock importers are feeling the heat as the Supply Ministry ramps up imports and floods the market with subsidized product in a bid to mitigate the impact of inflation on low- and lower-middle income earners. The ministry is trying to bring meat prices down to the psychologically important threshold of EGP 50 per kg. Private-sector import contracts fell to 21.4K head of livestock this month, down from around 29.9K in November. This drop coincides with the government receiving a shipment of 3K head of cattle from Sudan, the first part of a EGP 1.3 bn deal to import 800k animals from Sudan (more on this in the Diplomacy and Foreign Trade section). The government is leveraging its ability to obtain letters of credit with ease — and benefitting from a 30% reduction in tariffs — to undercut private importers, said Ahmed Sakr, chairman of food importer Sakr Group. (Read in Arabic)

Al Azhar University President Abdel Hay Azab has resigned after a court rejected his request to stay in his position until the age of 65, Al Masry Al Youm reported.

A 2017 implementation date set for creating a free-trade zone in Africa may be “too optimistic,” trade experts told Bloomberg. “The indicative date is really a political decision, but realistically the negotiations will take much longer … What may be possible is some kind of framework agreement by 2017, and then the more detailed provisions on specific substantive issues will take much longer,” one expert noted. The COMESA, EAC, and the SADC group members had signed an agreement in Egypt last June to create a trade bloc covering 26 countries with a combined economy of about USD 1 tn as a precursor to a continent-wide agreement. “The lack of impetus to liberalize import tariffs, slow regulatory reforms and harmonization and countries reluctant to enter into investment protection agreements,” Bloomberg notes.

Aberdeen Asset Management is betting on Tunisia being able to honor its liabilities and is expanding its exposure to Tunisian bonds. “The country’s capacity and willingness to pay is still there … Despite the knee-jerk reaction, we feel comfortable with the underlying situation. Tunisia enjoys really good relations with the U.S. and the European Union,” An Aberdeen research analyst says noting that the government’s “resolve to boost growth and tackle corruption bolstered the fund house’s view the country’s debt is oversold.” The yield on Tunisia’s USD 1 bn bonds rose to 7.9% in December, heading for a fifth straight month of advances.

Deathmerchants rebrand: Imperial Tobacco Group Plc. will henceforth be known as Imperial Brands, Bloomberg reports, saying the cigarette make believes “the new name will better reflect Imperial’s ‘dynamic, brand-focused business.’”

It’s the end of the world as we know it (and I feel fine): What are the Black Swan scenarios of 2016? Daesh destroys oil supply pipelines in Iraq, depriving the world of around 3.5 mn bbl per day, violence erupts in the oil-rich region of the Niger Delta, Algeria descends into chaos on the death of its president, and there’s a coup in Venezuela. Crude hits USD 100 per bbl and then the Fed decides to counter by reversing its rate hike, Bloomberg posits in a very dystopian piece. The runners up for the potential disasters in 2016 are a Brexit (with the UK exiting the EU) and a cyber-attack taking down the financial system (a la Mr. Robot), with the main difference being that the attacks would not be to steal money, but would also finance terror and target countries’ critical infrastructure. 2016 could turn out to be a very scary year.

EGYPT IN THE NEWS

Egypt is second only to China for the title of most jailed journalists in the world -CPJ: The top international headline on Egypt this morning is it’s title of having the greatest number of imprisoned journalists in the world after China, according to the latest report by the Committee to Protect Journalists (CPJ). China comes in at first place with 49 journalists behind bars, the CPJ puts the number in Egypt at 23, and in third place is Iran with 19 journalists in jail. Ahram Online rightly notes that Egypt’s Journalist Syndicate actually puts the number much higher, at 32 (although Ahram Online mistakenly attributes the CPJ report to Reporters Without Borders). The Syndicates notes some of these cases are ostensibly due to other charges, which is why the CPJ may have left them out of their estimates. The number of imprisoned journalists also roughly correlates to the number of death sentences handed down last year (pdf), with China in the lead at an estimate of over one thousand (they do not release official statistics), Egypt at third place with 509 death sentences, and Iran at seventh place with 81 death sentences. (We understand mandatory sentencing for those tried in absentia may not reflect the actual number of people eventually put to death following retrials. Either way, we would like to note once more that having hundreds of people sentenced to death in the space of minutes — to the shock and disgust of the entire world — is simply wrong.)

Last night’s Republican debate saw presidential candidate Governor Lindsey Graham directly address the leadership of Egypt and Jordan with regard to fellow candidate Donald Trump’s remarks on Muslims: “Donald Trump has done the one single thing you cannot do. Declare war on Islam itself… This is a coup for them [ISIS], and to all of our Muslim friends throughout the world, like the King of Jordan and the President of Egypt, I am sorry. He does not represent us.” And with that we’d like our readers to know that we’re going to have a moratorium on Trump stories for the next little while, we’ll likely return to him at some point in the future. In any case, we’re simply tired of the man. (Read the full transcript of the debate here at the NYT)

Bassem Youssef gets upgrade: We understand that many of our readers like Bassem Youssef, as do some of us here, while others instead have fonder memories of some of his episodes, segments and supporting cast and writers as opposed to Youssef himself (The Qatar Song comes to mind as a matter of national consensus). However this particular writer is beginning to grow tired of the need to introduce him in every English-language publication as the “Jon Stewart” of something — usually Egypt, but Variety has now upgraded that to “the Jon Stewart of the Arab world.” “I hosted the International Emmys, and I think I did a good job,” Youssef says in the piece. And again, while we acknowledge many of our readers may agree with him, this particular writer viewed the performance as irritating and largely cringeworthy. (Watch, running time: 8:52)

WORTH READING

Public Health Experiment Brings Hepatitis Cures to Egypt’s Poor: Donald C. McNeil Jr. and Asmaa El-Zohairy published a thoroughly-researched report for the New York Times on Tuesday on Egypt’s agreements with Hepatitis C drug makers, framing it as one of the world’s largest ongoing public health experiments. The authors note “the arrangement in Egypt may serve as a blueprint not just for curing hepatitis around the world, but also for providing other cutting-edge medicines to citizens in poor countries who could never afford them. The experiment here is about a year old and, while still fragile, appears to be headed for success.” At time of dispatch, the article is among the top ten trending articles on the New York Times. (Read: “Curing Hepatitis C, in an Experiment the Size of Egypt“

DIPLOMACY + FOREIGN TRADE

President Abdel Fattah El Sisi met with the German Minister of Economic Cooperation and Development Dr. Gerd Müller on Monday, according to a statement from Ittihadiya. The two focused on drawing upon Germany’s experience in advanced technical education for future cooperation with Egypt in the field, as well as promoting SMEs and renewable energy. The two also discussed regional security issues, including terrorism and the need for political accord in Libya. El Sisi also reportedly lauded Germany’s position on accepting Syrian refugees.

Are beef and trade, a way out of the Sudan-Egypt beef? The first shipment of cattle — part of a EGP 1.3 bn trade agreement whereby Egypt would import 800K heads of cattle from Sudan — have arrived yesterday at Abu Simbel in Egypt. Present at the arrival of the 3K cattle was Sudan’s Trade Minister Salah Hassan and Egypt’s Supply Minister Khaled Hanafy, who stated that the imported cattle would distributed at cooperatives and these will provide enough supply to keep beef prices at or under EGP 50. He added that the deal was largest of its kind between the two countries. This coincided with the first day of the Egyptian-Sudanese Investment Summit. Sudan offers Egyptian investors a climate conducive to the needs of Egyptian investors by providing them with a number of benefits, including tax breaks on agricultural and animal goods investments, said Sudan’s investment Minister Al Moddathir Abdel Ghany, pointing to Sudan’s mining industry, which has 400 companies operating, and its animal resources sector. Egyptian direct foreign investments in Sudan ranks high among the top countries contributing direct foreign investments in Sudan, which are valued at USD 42 bn, Al Mal reports. We’re seeing the import deal and investment talks as part of a bilateral bid to ease diplomatic tensions between the two countries over the issue of Hala’ib, the Grand Ethiopian Renaissance Dam, and reports of abuses by Egyptian security against Sudanese citizens living and travelling in Egypt.

ENERGY

Petrojet to build USD 220 mn liquid bulk cargo terminal in Ain Al Sokhna port
Petrojet inked a final agreement with Sonker, a joint venture company between Amiral, EGPC, Misr Petroleum, and the Finance Ministry, to build a USD 220 mn liquid bulk cargo terminal in the Ain Al Sokhna port. Petrojet will handle the project on an EPC basis, which will be built on 400 sqm and will include installing 40 km of piping to connect the storage facilities to the terminal and national grid. The project is part of a liquid bulk cargo logistics center that we had reported on earlier allowing EGPC to import large amounts of liquid fuels in response to any demand increases or supply shocks. The first phase of the project has an estimated investment value of USD 3 bn. (Read in Arabic)

Electricity Ministry inks EGP 12 bn to supply steam generators producing 2 GW
The Electricity Ministry and the Egyptian Electric Holding Company (EEHC) inked a EGP 12 bn agreement with EGEMAC to supply the South Helwan steam power plant with three natural gas and HFO-powered steam generators—with a combined production capacity of 1950 MW. USD 1.2 bn went into funding the project. Primary lenders include the World Bank with USD 500 mn, the Islamic Development Bank with USD 450 mn, USD 70 mn from the OPEC Fund for International Development, and EGP 2 bn from the NBE. The plant is expected to begin operations in December 2017, with full operations launching in July 2018. The Electricity Ministry announced the signing of the agreement on 30 November, AMAY reports. (Read in Arabic)

**Further reading in Energy: Solar energy is sparking new business in Egypt, Al Monitor writes profiling SolarizEgypt, a start-up that designs, installs and commissions photovoltaic solar power systems.

INFRASTRUCTURE

Red Sea Governorate to issue EGP 50 mn infrastructure tender next month
The Red Sea Governorate will issue a tender to extend infrastructure into 220 feddans in Safaga next month, head of Housing at the Governorate Saeed Abdallah told Al Borsa. The governorate has allocated EGP 50 mn for the project and expects it to be completed within 16 months, he added. The space is part of the governorate’s development plan for the current fiscal year, which is divided into 40% tourism projects, 40% services projects, and 20% housing projects, he added. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Tetra Pak targets sales growth of up to 15% in 2016
Juice and milk pack manufacturer Tetra Pak-Egypt is targeting a sales growth of 10-13% in 2016, and selling 5 bn packs in over the coming five years, said its director of marketing Amr Yousef. He adds that if the company hits this mark, it would seriously consider opening another factory in Egypt. 40% of Egypt’s milk consumers have moved towards packaged milk, according to Tetra Pak’s 2015 Dairy Index Issue 8 (pdf). (Read in Arabic)

HEALTH + EDUCATION

USD 17 mn JICA grant for health projects
International Cooperation Minister Sahar Nasr inked a final agreement for a USD 17 mn grant from the Japanese International Cooperation Agency (JICA) to build outgoing clinics at the Cairo University Children Hospital at Aboul Reesh. In addition, the grant will be used to finance the re-equipment of the hospital with the necessary labs and materials, and will also help to reduce congestion inside the hospital and boost pediatric healthcare, she said. Nasr added that Egypt is also in negotiations with JICA for a USD 400 loan to expand the Borg El Arab airport, as well as increasing energy-use efficiency in three electricity transmission companies in three governorates. (Read in Arabic)

USAID allocates USD 57 mn to HEI Partnership Program
USAID has allocated USD 57 mn towards its Higher Education Initiative (HEI) Partnership Program with Egypt, said Mohamed El Sewedy, head of the Federation of Egyptian Industries, as reported by AMAY. The partnership’s duration is for five years ending in 2020, he added. The partnership program develops the long-term institutional capacity of Egyptian universities and technical colleges to generate the human capital needed to sustain economic growth and competitiveness. According to USAID’s factsheet (pdf) on the program, the HEI was launched in 2014, consists of a number of programs operating under its name, with some running until 2022 at a total combined investment of USD 104 mn for projects launched under its auspices starting from 2014.

REAL ESTATE + HOUSING

Saudi Arabia and Egypt to break ground on USD 122 mn housing projects
The Saudi Egyptian Construction Company (SECC), a joint venture between the Egyptian and Saudi governments, will break ground in January on a USD 122 mn project to develop 3K homes and hotel rooms in Cairo, Damietta and New Assiut, Al Ahram reports. The project is entirely Saudi-funded with Egypt putting up 100 feddan for the project. 30% of the project’s power will be solar, said the Darwish Hassanein, the company’s chief executive. (Read in Arabic)

TELECOMS + ICT

GPX launches second data center in Egypt
Global systems provider GPX launched, Cairo 2, its second data center in Egypt. Cairo 2 is the first fully redundant Tier 4 fault-tolerant infrastructure and an environment that provides 99.999% Service Level Agreement (SLA) to local clients seeking to co-locate in a state-of-the-art data center. (Read in Arabic)

GAFI and Academy of Scientific Research launch incubator for tech startups
The General Authority for Investments and Free Zones (GAFI) and the Academy of Scientific Research and Technology (ASRT) launched a tech startup incubator program on Sunday. The incubator program will offers tech entrepreneurs technical training, and business development consulting, in addition to providing them with networking opportunities with investors. The program is part of an effort by GAFI to support tech entrepreneurship, said GAFI’s deputy head Mona Zowba’. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Cabinet to assess allowing hybrid cars in Egypt before year’s end
The Environmental Affairs Ministry is going to present its assessment of allowing the import of hybrid vehicles to the cabinet within days and decision on them should be taken before 2015’s end, Al Borsa reported. Minister Khaled Fahmy said an environmental assessment of hybrids was completed recently, but talks with the ministries of Industry and Interior are ongoing regarding the vehicles’ import. Fahmy says besides the positive environmental impact, the ministry expects hybrids would reduce fuel consumption if widely adopted. (Read in Arabic)

EAMA to discuss gov’t pricing of auto cars next Thursday
Mitigating the effects of the FX crunch and dealing with the Custom Authority’s plan to issue price guidelines for automobiles will on the agenda at Thursday’s meeting of the Egyptian Automobile Manufacturers Association (EAMA). As we noted earlier in the month, the recent hike in car prices drew the ire of the Consumer Protection Agency (CPA), which held a sit-down with auto distributors to discuss the issue. The customs authority had also considered drawing up a pricing mechanism to curb rising prices. EAMA chief Hassan Suleiman fears that move might put off foreign car manufacturers. He also called on Raouf Ghabbour to join the Association to present a united front. Other items on EAMA’s agenda are the proliferation of counterfeit spare parts. (Read in Arabic)

Transport Ministry considers teaming with telecoms to help users recharge metro smart cards
The Transport Ministry is considering teaming with telecoms on a service that alerts users to recharge their Metro smart cards, which began being issued on Sunday. The Ministry will discuss implementing this system with telecoms this month, said Ministry spokesperson Ahmed Ibrahim. These smart cards allow users to prepay for multiple rides on the metro by up to EGP 100. The card, which sold in metro stations across Cairo, can be bought for EGP 10 and s valid for up to five years. The ministry is working with an unnamed French company to install 850 new gates that read both metro tickets and the smart cards at metro lines 1 and 2, AMAY reports. (Read in Arabic)

BANKING + FINANCE

Egypt collaborating with US to disrupt Daesh funding
The US and Egypt discussed ways to disrupt Daesh’s financial networks and isolate the terrorist organisation from the international financial system. US Treasury Department Assistant Secretary, Daniel Glaser, met with senior Egyptian officials from the CBE and Foreign and Interior ministries to discuss common strategies to limit Daesh’s access to the international financial system, Daily News Egypt reported. “We discussed future engagements and we are looking forward to our continued partnership with Egypt, so we can work together to destroy [Daesh],” Glaser said. (Read)

Orascom Development Holding (ODH) announced that its rights offering will increase its equity capital by CHF 133.8 mn before deducting transaction costs, according to a bourse statement. CHF 49.6 mn were raised from gross cash proceeds and CHF 84.2 mn from a conversion of a shareholder’s loan to equity. “11,866,779 new registered shares were offered at the offer price of CHF 11.28 per share, below the nominal value and at a slight premium to the 30 day Volume Weighted Average Price (VWAP),” the release noted. With Samih Sawiris purchasing nearly 4 mn shares for which rights were not exercised for CHF 44.7 mn, his ownership stake both personal and through controlled entities became 72.6% of all issued shares of the company. Following the completion of the rights issuance, ODH will have issued a total of 40.4 mn shares with a nominal value of CHF 23.20 each.

EFSA approves the creation of EGP 60 mn real estate fund
EFSA has approved the creation of a real estate fund with EGP 60 in capital, Al Borsa reported. The fund is set up by an alliance of the Egyptians Abroad Investment and Development Company, Pioneers Holding, and Misr Iran Development Bank. Following the issuance, Egyptians Abroad’s CEO expects the size of the fund to reach EGP 3 bn. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

State-owned Cotton Holding Company taps Warner Consulting for restructuring plan
The Cotton and Textile Industries Holding Company (CTIHC) will ink an agreement with Warner Consulting Group in January to help it restructure the company. This comes as Investment Minister Ashraf Salman continues to push for a restructuring of state holding companies. In an evergreen claim for state-owned companies, CTIHC also says it is surveying its unused land ahead of offering it for sale to private sector for new textile projects, said company Chairman, Ahmed Moustafa. The land will be used for new export-oriented investments and move manufacturing plants from residential areas to it, the company head added. (Read in Arabic)

LEGISLATION + POLICY

New draft drinking water law to be completed in January
The latest incarnation of the draft drinking water act will be completed next January, said the head of the Holding Company for Water & Wastewater Mamdouh Reslan. He didn’t provide details on the law beyond saying that it will organize the entire water system in the country and issuing stringent punishment on those charged with wasting water. A draft for the drinking had been ready and was out in the media since 2014, with local media sources expecting the President to approve it in March 2015. The draft then subsequently died in the news, and it is assumed it was scrapped. Under the old draft, all 28 water companies would be given three-year licenses to operate. The law would impose strict quality control measures and direct licensed companies to draw up investment plans to continuously upgrade and expand water infrastructure and access. It also imposed punishments of 20K and a prison sentence of 6 months for those using drinking water to wash streets and clean cars. Reslan also announced that a tender to import 1.2 mn water meters will be issued next month. (Read in Arabic)

NATIONAL SECURITY

France to provide Egypt with four warships, deliver Mistrals in 1H2016
Egypt will receive two Mistral-class helicopter carriers in 1H2016, André Parant the French Ambassador to Cairo said. Parant said France will also provide training to the carrier’s crew. He added that Egypt will also receive four warships, three of which will be built in Alexandria. Parant noted that Egypt already received three Rafale fighter jets, with three more to be delivered within weeks. (Read in Arabic)

ON YOUR WAY OUT

EBRD welcomes China, Lebanon as members: The Board of Governors of the European Bank for Reconstruction and Development (EBRD) approved China’s and Lebanon’s membership applications. “In a letter applying for membership of the EBRD, People’s Bank of China Governor Zhou Xiaochuan said the activities of the EBRD complemented efforts to support investment and economic connectivity in the regions which China is promoting as part of the One Belt and One Road Initiative,” the EBRD said. Lebanon sought membership of the EBRD in July 2015, saying Bank’s support would play an important role in developing sustainable economic growth in the country by strengthening key sectors of the economy and contributing to reforms.