Sunday, 3 January 2016

New import controls on consumer goods are coming


House of Representatives due to convene 10 January; half of El Sisi’s 28 presidential nominees are women. (Speed Round)

Finance Ministry still tinkering with value-added tax bill? (Speed Round)

Trade and industry Ministry will use new registry of “approved foreign manufacturers” to curb imports of consumer goods (Speed Round)

AmCham gets new chief executive as Fahmy moves to D.C. (Speed Round)

The January effect in global markets — and is there a similar effect in Egypt? (What We’re Tracking Today)

Oil Ministry will “deploy new strategy” to increase production in 2016 (Energy)

Acquisition of 46% of DBK Pharma to be completed in February (Health + Education)

Egypt received USD 1.5 bn from World Bank, AfDB on Thursday (On Your Way Out)

If you don’t understand what’s taking place in the “Maspero Triangle” urban renewal project, this is the piece for you (Worth Reading)

By the Numbers + With Egypt’s 5Y USD CDS spread at a two-year high, a risk compression trade is in sight


Does the January effect hold in Egypt? Reuters notes in its look at the week ahead that the fate of Wall Street in any given year is pretty highly correlated to how the exchanges do in January, saying the “January effect” is such that “the direction of January’s trading predicts the course for the year 75 percent of the time.”

Reuters, meanwhile, took a look at how 2015 panned-out for MENA markets and came away (very) cautiously optimistic that 2016 may not be as grim.

Globally, the WSJ writes that investors have low expectations of 2016 “after a year of disappointment in everything from U.S. stocks to emerging markets and junk bonds. Some see the past year as a bad omen. Two major stock indexes posted their first annual decline since the financial crisis, while energy prices fell even further. Emerging markets and junk bonds also struggled. Others view the pullback as a sensible breather for some markets after years of strong gains.”

Also worth a look: The WSJ’s Money Beat blog has a take on “global markets [in 2015] in nine charts.”

Does anyone out there have a “January effect” theory for Egypt? Email us at if you do and we’ll have a roundup of your views later this week.

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A Cairo appeals court will hear tomorrow (Monday, 4 January) Islam El Behery’s appeal against a one-year prison sentence for blasphemy.

The Egyptian Saudi Coordination Council is expected to meet on Tuesday in Saudi Arabia to sort out how to translate King Salman’s promise of investment and five-years petroleum products into an actionable program.

Thursday is a national holiday on the occasion of Coptic Christmas. Banks and markets are closed, as is the civil service.


The House of Representatives will convene for the first time on Sunday, 10 January (that’s one week from today). MPs will first elect a new speaker of the House, then move on to approving the full body of legislation passed by President Abdel Fattah El Sisi, who holds legislative powers until parliament convenes.

Also on 10 January: The Emirates NBD Egypt Purchasing Managers’ Index is released at 7:30am CLT. PMIs for the Emirates and KSA are due out this coming Thursday, 7 January. Egypt typically releases on the same day as the UAE and KSA, but Thursday is a national holiday.

Foreign affairs calendar: Chinese president Xi Jinping is due in Cairo in January for a state visit, and there were unconfirmed reports last month that President Abdel Fattah El Sisi would be making a state visit to Tokyo.


New year’s wishes and freedom of expression starred in last night’s episode of Lamis El Hadidy “Hona Al Assema” on CBC. El Hadidy opened with a list of her wishes for the country in the coming year: “I wish that the coming parliament will meet the people’s expectations,” she said, adding that her second wish was a better investment environment — and so on.

The anchor then raised the subject of Islam El-Behery, the Islamic researcher and TV presenter who is spending a year in jail for challenging traditional views of Islam. El Hadidy asked a tricky question: “How is it that President Abdel Fattah El Sisi demands the renewal of the religious discourse, while the law allows those who challenge those old views to be jailed? Isn’t it about time to change the law?”

El Hadidy later called novelist Ahmed Nagy (who was acquitted yesterday on charges he penned an obscene book for its, uhm, [redacted] content). Nagy, who published a chapter of his novel “The Use of Life” in the state-owned literary journal Akhbar Al-Adab, told El Hadidy he was happy that the court understood the importance of freedom of expression. El Hadidy drew parallels between Nagy’s case and that of El-Behery case, noting that the law as it stands allows the prosecution of creative individuals on thin pretexts.

Amr Adeeb opened his show in panic, screaming that the only threat facing Egypt now is the potential assassination of the president: “If I’m an intelligence officer, and I want to bring Egypt down, this is the move to do, and there are [foreign] intelligence officers who are trying to ruin our country,” Adeeb said. “But the president is travelling everywhere at ease. He goes to Farafra Oasis — everywhere. No. This is not okay. He has a whole nation depending on him. Beware, Mr. President. Be careful.”

On the economy: “The value of the Egyptian Pound will depreciate to reach EGP 9.50 to the USD, and we will not see more foreign investment coming to Egypt in this year,” Adeeb said without further explanation.

On Al Kahera Wel Nas, Cairo 360 host Osama Kamal opened his show commenting on the major news coming from Saudi Arabia, which executed yesterday 47 individuals (a number of them Shiite) convicted on terrorism charges. Kamal profiled the only Egyptian citizen among them, Mohamed Fathi Abdel-Ati, who was arrested by Saudi authorities in 2003.

Kamal then interviewed Minister of Local Development Ahmed Zaki Badr on the recent shakeup of the nation’s governors, with Badr shedding little insight on why some governors stay and why others go. “We try to pick individuals with strong management experience, and of course Army and Police Generals are first in line because of their diverse experience and strong management skills,” Badr said.

The minister also dodged questions about who’s to blame for the recent legal disputes between outdoor advertising agencies and the Cairo governorate, saying that both parties will sit down and reach a conclusion soon.


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House of Reps will convene 10 January, El Sisi announces 28 presidential appointees: President Abdel Fattah El Sisi called on the House of Representatives to hold its first session on Sunday, 10 January at 9 am. On Thursday, El Sisi also announced the names of his 28 appointees to the parliament, according to Al Masry Al Youm (we’ve posted the full list in English here, as provided by Ittihadiya). Not included was former interim President Adly Mansour. Out of those chosen by El Sisi, the youngest appointee is 28-year old Taekwondo Hall of Fame inductee and Peugeot HR Manager Caroline Maher, whereas the oldest is 77-year old lawyer Bahaa Abu Shokka. Sources told AMAY that Ittihadiya vetted 1,600 candidates and ended up with a list that has a 10% Coptic representation, is gender neutral, and includes people with professional experiences not represented within the elected MPs. Al Shorouk speculates that Serry Siam, a former advisor to the People’s Assembly’s speaker for 15 years who was appointed by El Sisi, is poised to become the House of Representatives’ speaker. However, Siam told Al Ahram he will not be running for the speakership.

The government is apparently still making major tweaks to the VAT law ahead of sending to the parliament for approval. Finance Minister Dimian met with auditors and experts to discuss their recommendations to the latest draft of the value-added tax act, which was completed on 2 December. These include re-instating tax appeal committees, taxing inventory instead of the six month grace period before implementation, exempting professional consulting services including accountants, lawyers, doctors and auditors from the VAT, and finally eliminating the 500K income minimum to be subject to the VAT — which now stands at 10-12%. These recommendations represent significant structural changes to the form of the VAT, despite reports in Al Mal that this is the final consultative meeting on the law.

A non-tariff barrier by any other name… Trade and Industry Minister Tarek Kabil ordered the establishment of a new registry of approved foreign manufacturers of consumer goods bound for Egypt. Goods from non-registered manufacturers will not be cleared through customs. Conditions for admittance to the new registry include stricter quality and safety standards and scores for impact on labor and the environment. Companies will have two months to sign up before the registry comes to effect, Al Shorouk reports. The move comes as part of new directives issued by Kabil to curb imports of “non-essential” consumer goods. Mohamed El Sewedy, head of the Federation of Egyptian Industries, who has long lobbied for stricter controls on consumer goods imports, welcomed the measures, Al Mal reports.

The Finance Ministry is also getting in on the act, forming four working groups that will help streamline processes at Egypt’s ports and customs offices. The working groups look at a one-stop shop policy for importers and exporters; make recommendations on current legislation and executive regulations; and look at how technology can improve inter-agency communications. The initiative aims to help grow exports by 10%, cut the budget deficit by 1.5%, and increase investments by boosting Egypt’s standing in international trade indices, said Assistant Finance Minister for Information Atef El Fekky. Committee members will include representatives from trade and industry, finance and the central bank.

I’ll see your committees and raise you a committee: Central Bank of Egypt Governor Tarek Amer and Finance Minister Hany Dimian agreed to form a committee to better coordinate on monetary policy, according to Al Masry Al Youm.

The CBE prefers financial assistance from the GCC to be through investment in government treasuries, rather than having them as deposits, a source told Al Borsa. The source did not give a specific reason behind the CBE’s declared preference. Egypt has already received USD 6 bn in deposits out of the USD 12.5 bn pledged at the EEDC by Saudi Arabia, Kuwait, the UAE, and Oman. Al Borsa quotes International Cooperation Minister Sahar Nasr in saying that Egypt is still in the negotiations phase with the UAE and Kuwait over their pledged financial assistance packages.

The central bank left the exchange rate unchanged in its last FX auction of the year. 2015 ended with the CBE’s auction rate held at EGP 7.7301 per USD 1.

“The general climate does not encourage investment, but I am optimistic,” Naguib Sawiris told Al Shorouk. Sawiris called on removing exchange rate restrictions as well as easing capital controls. Politically, he stressed on the strength of the Free Egyptians Party given its “independence” and said that Emad Gad’s resignation remains “frozen.” The news came as engineering professor Essam Khalil, a founding member of the Free Egyptians, was elected the party’s new leader in a landslide victory over challenger Mohamed El Beyaly, Ahram Online reports, netting 421 votes to El Beyaly’s 66. The FEP holds 65 seats in the House of Representative, giving it more votes than any other party; the FEP appear, however, ready to sit outside the various coalitions that are forming to back a pro-Sisi agenda.

In other “Sawiris news”: The Wall Street Journal has a solid take on the challenges OTMT has faced in North Korea, where it effectively lost control of subsidiary Koryolink late last year. The Journal’s take is at once a fairly exhaustive look at how Sawiris’ appetite for risk led him into a country in which people are reportedly executed by anti-aircraft fire “pour encourager les autres” — and at how the DPRK’s handling of the Sawiris case will impact its economic future. Writes the WSJ: “How North Korea resolves the dispute could bear on its plans to cultivate foreign investment to develop the moribund economy. In recent years, Pyongyang has created more than 20 special economic zones for investors and announced local regulations intended to reassure foreigners. … The setback for Mr. Sawiris … underscores the risk of doing business in North Korea, where foreign firms have complained that property and profits have been appropriated by the government.”

Fahmy moves to DC as American Chamber of Commerce in Egypt gets new CEO: Long-serving AmCham Egypt chief executive Hisham Fahmy stepped down on 1 January 2016 to relocate to Washington, DC, where a statement from AmCham notes that he will “overseeing the activities of AmCham Inc.; a mirror organization to AmCham Egypt and serving as advisor to the AmCham Egypt Board of Governors. He will be representing the wider interests of the business community as represented by the AmCham membership and promoting the strategic bilateral relationship among other endeavors.” Fahmy led more than 26 missions to the Washington, DC, and other points in the U.S. during his tenure, which saw AmCham’s member base grow from 900 in 1999 to more than 1,900 today. Fahmy is succeeded by Tamer El-Naggar, who was most recently CEO of TNS North Africa, an arm of the global market research company. El-Naggar’s bio is available for download here (.docx format).

Egypt Arrests 3 Facebook Admins Ahead of Jan. 25 Anniversary,” the Associated Press reports, in a story that is dominating coverage about Egypt in the global press heading into this morning, linking the arrest of the three — who allegedly have ties to Ikhwan — with last week’s clampdown on art spaces and a publishing house.

Because AIDSKofta wasn’t enough: Some guy made a car that he claimed would also fly and navigate along the Nile. “The Egyptian Monster” he called it. Queue social media. Enough said.

Entrepreneurship in 2016: MENA countries “collectively enjoy a startup ecosystem that is ‘almost exactly at the world average or very close to it,’” Wamda reports, citing the 2016 Global Entrepreneurship Index. The UAE is leading the way with startups there having raised USD 105 mn in disclosed deals successfully in 2015. Egypt had a good year as well, with KarmSolar signing a USD 17 mn deal for an off-grid solar power plant, “Yaoota and Wuzzuf raising a combined USD 4.4 mn while the exits of Fawry and Otlob totaled USD 112 mn.” Looking back on 2015, Wamda also lists the top 8 exits of the year that finished “with a bang” as a consortium was made up of Egyptian-American Enterprise Fund (EAEF), Helios Investment Partners and the MENA Long-Term Value Fund (MENA LTV) bought an 85% stake in Fawry for USD 100 mn.

S3aeedi geeks want attention, too: A group of Upper Egyptian developers and all ‘round tech fans want to start their own “ecosystem.” German government-funded has the story, headlined “Silicon Valley in Upper Egypt.” The group, S3Geeks, is on Twitter here and has a website.

Iranian protesters ransacked and set fire to part of Saudi Arabia’s embassy in Tehran on Saturday. Police subsequently ejected the protestors and put out the fires. The protesters were reportedly demonstrating against the execution of outspoken dissident Shia cleric, Sheikh Nimr Al Nimr, along 46 others, on Saturday by the Saudi authorities on terrorism-related charges.Sheikh Al Nimr had been a major voice of dissent against Saudi treatment of the country’s Shia minority.

If you want a fix on where oil prices are heading, look beyond OPEC and make a bet on whether you think producers will keep investing in maintenance and enhanced oil recovery techniques. That’s the WSJ’s fundamental conclusion as it notes that Russia, Brazil and Norway pumped significantly more last year than was projected by either the U.S. Energy Information Administration or the International Energy Agency. At the heart of the debate about whether we’ll see USD 75 oil by year’s end: “On the one hand, analysts say, low oil prices can cause oil wells to deplete more quickly, because companies spend less to maintain fields and enhance production from aging wells. On the other hand, producers have surprised investors in the past year with their ability to increase drilling efficiency and cut costs.”

There is really only one place to be an investment banker,” Business Insider declares, reporting that U.S. investment banks earned about half of all fee and commission income generated globally last year, or USD 35.6 bn out of the industry’s global fee wallet of USD 72.7 bn, according to figures from Dealogic. The figures cover “fees paid out by corporations and governments for equity and debt deals, syndicated loans, and mergers and acquisitions.” Six of the 10 top banks by IB fees and all of the top five are U.S.-based institutions, the website reports, while European firms earned 30% of the global share, “the lowest proportion on record.”

The Financial Times’ 2015 Quiz of the Year is out. Last year’s edition was one of the most popular links in January among Enterprise readers. The prize? “A year’s supply of Laurent-Perrier Cuvée Rosé awaits the winner of our latest cultural challenge.” Be quick, though: The newspaper warns that the prize “will be awarded to the first correct entry drawn at random from all entries received by the closing date of 5pm GMT on Thursday January 7 2016.” The email address to which to address your entry is at the bottom of the quiz page. And what’s this cuvée rosé of which the FT speaks? The paper calls it “an elegant champagne to enliven any occasion,” and, which says a bottle retails for about USD 80, notes it is “the most recognized rosé champagne in the world. It is also one of the few rosés still made by the saignée method.”

Other international headlines this morning that either carry implications for Egypt or that are simply worth noting in brief:

  • The FT’s Roula Khalaf writes in “The contradiction of Saudi-style austerity” that “A lavish welfare state that breeds indolence and apathy must one day come to an end,” adding that “Saudi officials say they are serious about embracing reform and slashing waste. But their plans contain contradictions that have yet to be resolved.” Among them: How to improve women’s participation rates in the workforce when they cannot drive and for how long the middle class and the business community will listen to the kingdom’s rulers going forward.
  • Don’t expect tensions between Russia and NATO to cool in 2016: “Russian President Vladimir Putin considers the aggressive expansion of NATO as a direct threat to the national security of Russia … [and] signed an official document updating Russia’s national security posture on Thursday.” CNN has more.
  • The Wall Street Journal looks at “15 CEOs to watch in 2016.” If you’re into playing armchair quarterback for companies in the global spotlight — from VW and Caterpillar to IBM and McDonald’s — this is the piece for you.
  • Erdoğan cites Hitler’s Germany as example of effective government,” writes the Guardian, saying the Nazi dictator was an example of an “effective presidential system.” The comments come as Erdoğan looks to enshrine a new presidential system in Turkey.

And if you’re a Game of Thrones fan, you’ll be waiting a while longer for Book Six. Series author George R.R. Martin didn’t finish the sixth and final installment of his best-selling series “on or before the last day of 2015. … You’re disappointed, and you’re not alone. My editors and publishers are disappointed, HBO is disappointed, my agents and foreign publishers and translators are disappointed,” he writes on his personal blog.


Hundreds disappear into secret detention in Egypt”: The Financial Times’ Heba Saleh’s kicker, quoting a senior official at the state-appointed National Council for Human Rights as saying: “There has been no reform or restructuring of the security services and as violence on the part of armed groups has increased, they have responded by both random and organised human rights violations. The situation now is far worse than at any preceding time.”

Why did Saudi Arabia start a strategic alliance with Turkey? And Why Egypt isn’t part of this alliance? Renowned Saudi columnist Khaled El Dakheel asks if Egypt is missing an opportunity to shape the region today in the London-based newspaper Al-Hayat. El Dakheel explains that the Kingdom is trying to build a strong alliance to stand against Iran ambitions in Syria and Iraq, and according to his views; Turkey is a pragmatic alley, not as paranoid as Cairo. “Egypt refused to join because the Muslim Brotherhood turned to a complex that defines its foreign policy.” This is not the only reason why Cairo is reluctant to join the alliance, the author says. “Egypt wants to lead the Arab countries, and we will welcome that once Cairo announces where it stands from Iran interference in the region.” El Dakheel concludes.

Coptic Egyptians play a walk-on part in the Economist’s “And then there were none,” but the piece on the out-migration of Christians from the Middle East is entirely worth reading this morning.

Meanwhile, the Independent reports that Egypt is losing GBP 120 mn a month as the U.K.’s ban on flights to Sharm continues, and a piece from the Los Angeles Times headlined “Egyptian government using same crackdown on dissent as before Arab Spring revolt” is getting fairly wide play in syndication


Making the “Maspero Triangle” tangible: Get past the standard Guardian verbiage about El Sisi and the need for projects “geared more towards the needs of citizens than the interests of private capital” and Jack Shenker (the paper’s former Cairo correspondent) and Ruth Michaelson turn in a balanced, compelling look at what was until recently the very amorphous proposal to redevelop the “Maspero Triangle” bordering Downtown. Or, as the authors put it: “Glass towers, modernist boulevards and elegant roof gardens … Can Foster + Partners’ vision for Cairo’s Maspero Triangle avoid the controversies of Egypt’s past megaprojects, and encourage a new era of urban design – and democracy?” For us, it’s less about “urban design” than it is a question of whether the current government can final set a template for state-led urban redevelopment. Read: “Norman Foster’s Cairo redevelopment has locals asking: where do we fit in?


What will be the biggest events this year? The Economist films presents some the most important events of the year – before they happen. For starters, keep an eye on the Olympics in Rio de Janeiro and the US Presidential elections. (Run time 31:24)

According to a tweet from China’s state-owned Xinhua news agency: “Entertainment used in N China prisons to relieve boredom, encourage prisoners to rectify behaviors”. (Run time: 0:29)


Uganda received the largest number of training grants from the Egyptian Agency of Partnership for Development (EAPD) in 2014-15, the Foreign Affairs Ministry said. In total, 102 Ugandan nationals participated in 31 different training courses throughout the year.


Oil Ministry to deploy new strategy to increase production in 2016
Oil Minister Tarek El Molla said the Ministry is planning to deploy a new strategy to increase the production of natural gas and crude oil in 2016. The strategy depends on issuing more E&P tenders in concession areas, in the Mediterranean and the Western Desert specifically, and engaging in more agreements with IOCs. El Molla did not provide any specifics, but said that a number of support and new wells will come into production in 2016.  (Read in Arabic)

BP shows “long-term potential” due to Egyptian exposure – Investorplace
BP has “strategic long-term opportunities” that could payoff as global demand is revived, Richard Band writes in Investorplace. Band points to BP’s increased exposure to natural gas by drilling in the Atoll field and in the West Mediterranean Deepwater Concession. “By consolidating natural gas interests in Egypt, it has natural gateway for shipping natural gas to Europe as well as Asia, where prices are significantly higher,” he adds. (Read)

Petrobel increases FY 2015-16 budget to increase exploration activities
Petrobel announced it is going to increase its budgeted expenditures in FY 2015-16 to USD 1.1 bn from USD 750 mn originally to accommodate exploration activities there were not budgeted for. The company also approved investment expenditures of USD 930 mn in FY 2016-17. The company is also working on establishing Petrosherouk, a company that will partner Eni in developing the Zohr field. (Read in Arabic)

Feed-in tariff companies will pay their end of cost-sharing agreement in installments
Feed-in tariff solar power companies will pay their remaining end of the cost sharing agreement with the government over three installments, according to a notice sent by the Egyptian Electricity Transmission Company (EETC). The 39 solar farm companies in Benban will pay these in March, June and September, Al Borsa reports. These companies—which have entered into cost-sharing agreements early last month—have struggled to obtain letters of guarantees from banks to cover 70% of their share, after having already paid 30% of their obligations worth a combined EGP 350 mn. They must submit these LGs by the end of January. Under the cost sharing agreement, they must pay for connecting their power to the national grid, including all the relevant infrastructure. (Read in Arabic)

EXA Solar requests EGP 500 mn loan from NBE for solar panel manufacturing complex
Germany’s EXA Solar requested a EGP 500 mn loan from the National Bank of Egypt (NBE) to build a solar panel manufacturing complex made up of seven factories. The company also plans on building training centers over the coming five years. The Industry and Trade Ministry had suggested that the sprawling 3 mn m2 complex be built in Ismailia’s “tech valley”. (Read in Arabic)


China awarded sixth Cairo Metro line?
Ahram Online cites a Transportation Ministry statement as saying that it has signed a memorandum of understanding that could see the Chinese Railway Construction Company build Cairo Metro’s sixth line. Line six, it says, would run 24 km and connect “Al-Khosos north of Cairo … [with] the southern suburb of Maadi.” (Read)


Egypt and Russia put wheels in motion to trade dairy and meat products
The Agriculture Ministry is coordinating with Russian veterinary authorities to begin exporting dairy products to and importing livestock from Russia. As it stands, seven Egyptian dairy producers have been cleared to export dairy, while the Ministry will send a delegation to inspect Russia’s meat industry to ensure quality and safety. The latter comes as part of the government’s drive to ensure that meat prices remain low which includes import agreements with Sudan, Ukraine, Ethiopia, and Spain. (Read in Arabic)


Acquisition of 46% of DBK Pharma to be completed in February
DBK Pharma is expected to complete the EGP 350 mn sale of a 46% stake in the company to an unnamed Saudi investor in February, according to Al Borsa. The company is currently amending its board composition and other administrative structures accordingly ahead of completing the transaction. The sale prompted the company to cancel its expected IPO, in addition to the company not meeting the requirements for an IPO at this time, said company sources.  (Read in Arabic)

EGP 200 mn military hospital to be built in Assiut
The governorate of Assiut is planning to build an EGP 200 mn military hospital to serve Upper Egypt, Al Borsa reported. The hospital will be built on a 9.8 feddan land plot and will include 200 beds initially, a number that is set to increase to 800. Assiut’s governor said the city will also redevelop and refurbish three hospitals starting from January. (Read in Arabic)

Education Ministry considers plans to outsource management of its underperforming facilities
The Education Ministry is considering plans to overhaul its poorest performing institutions and assets, including outsourcing their administration and operation to the private sector. The Ministry wants to maximize revenues from some of its more burdensome facilities which have been in hole financially, including the Education City project in 6th of October and the 140 feddan Ismailia Education Complex. Management of these programs may be reshuffled to other government bodies, but if it does decide to go with the private sector, we could be looking at another PPP tender announcement on the horizon. Last month the Ministry announced a EGP 15 bn PPP tender to develop schools — the first high-profile tender since it receiving cabinet approval for issuing tenders. (Read in Arabic)


The government’s mortgage finance fund excludes lowest incomes from funding
The government’s mortgage finance fund said it is going to exclude applicants reporting income levels below EGP 700 per month from funding, Al Shorouk reported. Mai Abdel Hamid, the head of the fund said some applicants are manipulating their incomes to deflate them significantly thereby prioritizing unit allocation to them. Abdel Hamid said the EGP 700 floor was set because this is the minimum mortgage rate that could be paid for units through the fund’s program. (Read in Arabic)


Shipments on a Nile cargo route linking Cairo and Damietta to begin in January
Shipments of strategic commodities between Damietta and Cairo via the Nile are expected to begin in January, Transport Minister Saad El Geyoushi told Al Borsa. El Geyoushi said his Ministry is liaising with the Supplies Ministry to transfer strategic commodities from the Damietta port to Cairo. The plan is utilize the Nile more and use for shipping 5% of Egypt’s cargo domestically. (Read in Arabic)


Ismail forms investment dispute settlement committee
Prime Minister Sherif Ismail formed a ministerial committee to settle investment disputes.
The committee is tasked with looking into settling contractual disputes in investment contracts where the state or any of its agencies are party to them. The committee will be headed by Ismail himself and includes a number of other ministers. (Read in Arabic)


Suez Canal Economic Zone Authority cuts red tape on forming companies
The General Authority for the Suez Canal Economic Zone (GASCEZ) cancelled what it called all “unnecessary procedures” for the establishment and licensing of new companies in the zone, in a bid to spur investments, according to a statement by its secretary general Naser Fouad. Fouad did not specify what these unnecessary procedures are. The decision was taken at GASCEZ’s inaugural meeting on Saturday, which was attended by its head Ahmed Darwish, and the ministers of Investment, Trade, and Transportation. Other decisions taken at the meeting include drafting a model contract for companies that plan to operate there, in addition to a number of other administrative decisions. GASCEZ was formed by presidential decree and cabinet approval last August to administer and manage Suez Canal Area Development Project. (Read in Arabic)


Kuwait Investment Authority postpones subsidiary’s IPO
Kuwaiti sovereign wealth fund KIA has the planned IPO of Kuwait Investment Company due to “market conditions,” KIA said in a statement on Thursday. KIA, which has about USD 500 bn in AUM, owns 76% of KIC. KIC manages both funds and a private equity portfolio. (Read)

“7,000 construction workers will die in Qatar before 2022 World Cup” –trade union
The website of the U.K.’s Chartered Institute has picked up a trade union’s broadside against Qatar, picking up on a report by the  the International Trade Union Confederation (pdf download). The fairly exhaustive, 37-page document tackles everything from the true cost in lives of Qatar’s 2022 World Cup to tackle the kafala labor system in the GCC, noting that “It is estimated that more than 40% of the world’s top 250 contractors are participating in projects in Qatar. Shareholders with investments in 14 different stock exchanges are exposed to the profits using modern day slavery under kafala.” (Read)


Egypt received USD 1.5 bn in aid financing from the World Bank and the African Development Bank last Thursday, said International Cooperation Minister Sahar Nasr. The funds have been deposited in the CBE’s accounts in New York, and will be administered by the Central Bank. The USD 1 bn from the World Bank and USD 500 mn from the AfDB are the first tranche of the WBG’s confirmed development policy financing and the AfDB’s USD 1.5 bn loan which have been received by Egypt. These funds will go into shoring up development project expenditures, with Nasr stating that USD 300 mn will fund the Housing Ministry’s infrastructure projects. Her comments come as she chairs the current round of talks of the Saudi-Egyptian Council in Riyadh for further economic aid from Saudi Arabia. She is joined at that meeting by Oil Minister Tarek El Molla and Housing Minister Mustafa Madbouly.

At least 15 people are confirmed dead after a Nile boat sank in Kafr El Sheikh on Thursday night. Weather and “overloading” are believed to have played a role in the tragedy. Prime Minister Sherif Ismail has ordered an investigation, Ahram Online reports.

Thought that most refugees in 2015 came from Syria? Think again. According to the International Organization for Migration, the greatest number of refugees in 2015 came from Iraq. CNN reports that about 3.2 mn people have fled their homes because of fighting between the Iraqi government and Daesh.

Move along, nothing to see here, TE says: Telecom Egypt (TE) denied news that its employees are on strike in demanding bonuses. Operations are ongoing normally, the company told the EGX.

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USD CBE auction (Thursday, 31 December): 7.7301 (unchanged since Wednesday, 11 November)
USD parallel market (Thursday, 31 December): 8.57 (unchanged from Sunday, 27 December)

EGX30 (Thursday): 7,006 (+0.4%)
Turnover: EGP 467,1 mn (7% above the 90-day average)
EGX 30 in 2015: -21.5%

THE MARKET ON THURSDAY: Egyptian equities extended their rally on Thursday to end 2015 on a positive note. In Thursday’s session, the EGX30 ended the year a modest 0.4% up on average volumes after its largest constituent, CIB, rose 0.9% while heavyweights TMG and EFG-Hermes declined. At a market turnover of EGP 467.1m, regional investors were the sole net buyers of the day.

Foreigners: Net short | EGP -22.2 mn
Regional: Net long | EGP +46.0 mn
Domestic: Net short | EGP -23.8 mn

Retail: 74.1% of total trades | 73.7% of buyers | 74.4% of sellers
Institutions: 25.9% of total trades | 26.3% of buyers | 25.6% of sellers

Foreign: 8.2% of total | 5.9% of buyers | 10.6% of sellers
Regional: 9.2% of total | 14.1% of buyers | 4.3% of sellers
Domestic: 82.6% of total | 80.0% of buyers | 85.1% of sellers


With Egypt’s 5Y USD CDS spread at a two-year high, a risk compression trade is in sight

Egypt’s five-year USD credit default swap (CDS) spread — which reflects the premium required to insure against sovereign default on a specific Eurobond issue — has sharply risen since end October 2015, reflecting both a corresponding surge in EM CDS spreads as well as Egypt-specific spread. Tap here to read more about why we think this is a key tactical indicator on which you should keep you eyes as you fashion your trading strategy this month.


WTI: USD 37.04 (+1.20%)
Brent: USD 37.28 (+2.25%)
Gold: USD 1,060.20 / troy ounce (+0.04%)

TASI: 6,911.8 (+0.1%)
ADX: 4,307.3 (+0.7%)
DFM: 3,151.0 (flat)
KSE Weighted Index: 381.7 (flat)
QE: 10,429.4 (-0.1%)
MSM: 5,406.2 (-0.7%)


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