Monday, 11 January 2016

Ah, the House of Representatives…


State insider elected Speaker of the House, Mortada monkeys with oath of office in epically long first session. (What We’re Tracking Today, Speed Round, Last Night’s Talk Shows)

Asian markets are down this morning, and it might be wise to expect news from Wall Street won’t help global sentiment this week. (What We’re Tracking)

PMI down for third month in a row, but rate of decline is slowed. (Speed Round)

Egypt has capacity to absorb USD 6 bn worth of investments in renewables through 2018, EFG Hermes says. (Speed Round)

Lobbying drive against import restrictions is getting zero traction. (Speed Round)

Business, state agencies piling onto El Sisi’s youth initiatives. (Spotlight)

By the Numbers


Ladies and gentlemen, we have parliament: The nation’s 596-member House of Representatives convened yesterday. MPs elected constitutional law professor Ali Abdel Aal as speaker of the house. A former prosecutor, Abdel Aal was previously a cultural attaché at the embassy in Paris and a lecturer on law at the police and military academies. Mahmoud Al-Sherif, the head of the ‘syndicate’ of Al-Ashraf (individuals who can trace their lineage directly back to the Prophet Muhammad), was elected first deputy speaker. Representatives will vote today some time after noon in a runoff to select a second deputy speaker. MPs Alaa Abdel Moneim and Suleiman Wahdan are facing off for the post. We have more coverage of the opening session of the House in Last Night’s Talk Shows and today’s Speed Round.

Finance Minister Hany Dimian will review the latest draft value-added tax legislation today at a meeting with the heads of the nation’s tax authorities. The gathering will also serve as a touch-base session on the FY2015 tax season, which began this month. The authority is hoping to net EGP 422 bn this tax cycle, Al Mal reports.

Foreign Minister Sameh Shoukry visits Germany today to bolster relations with the European nation.

It’s looking a bit bearish out there, ladies and gents: Asian shares are in the red again this morning as the trading week gets underway. Lower liquidity is adding to volatility this morning as Tokyo is closed, Reuters says, while the Wall Street Journal notes that regulators’ bids to prop-up the Chinese bourse is probably making things worse. This comes after a top advisor to the Chinese government predicted yesterday that “China will face great difficulty in achieving economic growth above 6.5 percent over the 2016-2020 period due to slowing global demand and rising labor costs at home.” Also: China is expected to announce new debt figures some time this week (it hasn’t specified a day yet); analysts are watching for signs that overall debt at state-owned enterprises continued to rise amid worries they have poor chances of ever repaying it.

And don’t expect much relief from Wall Street, Reuters warns, saying that the fourth-quarter earnings season that gets underway this week “could confirm something many investors may not want to hear: the U.S. economy may be doing well but corporate profits are in a recession.” JPMorgan Chase will report on Thursday, Citi on Friday. And in a sign of the outlook for the global commodities market, Bloomberg writes that the U.S. is looking at one of the most “bearish crop outlooks ever.”

Magical Thinking Moment #9,134: Don’t be afraid of the bears. We’re going to win USD 1.3 bn in the U.S. Powerball lottery and solve each and every retail investor’s problems…

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China’s TEDA is set to hold a press conference on Thursday to announce the launch of its USD 233 mn development on the North West Gulf of Suez Economic Zone.


Chinese President Xi Jinping visits Cairo on 20-21 January (that’s late next week), overlapping with the World Economic Forum’s annual meeting in Davos, which runs 20-23 January. The theme of the latter: “Mastering the Fourth Industrial Revolution.” They would really like you to know (we kid you not) that “We live in a fast-paced and interconnected world, where breakthrough technologies, demographic shifts and political transformations have far-reaching societal and economic consequences. More than ever, leaders need to share insights and innovations on how best to navigate the future.” Trenchant analysis, no?


Politics reigned last night as talk-show hosts had a field day pouring over the inaugural session of the House of Representatives, which carried on until past 2:00am CLT. Anchors criticized MPs for a host of reasons, particularly Mortada Mansour’s twist on the parliamentary oath. Mansour insisted on swearing to uphold “articles of the constitution” and not “the constitution” per se (he objects that the preamble to the document declares 25 January 2011 to have been a revolution). It caused a ruckus during the session — and secured the gentleman headlines and airtime, as usual.

Major talk shows covered constitutional law expert Ali Abdel Aal’s election as Speaker of the House. On CBC’s Hona El Assema, Lamees El Hadidy lauded how well he kept MPs “in check” and scolded them for being loud and chaotic, but, most importantly, for having used their phones during the session. “Shame on you people … This is the Egyptian’s House of Representatives, and you’re on your phones telling people to watch you on television? This is contempt towards the nation.” She urged parties to “discipline” their members to ensure more productive and orderly sessions. One can dream, Lamees.

Ibrahim Eissa on Al Kahera wal Nas wasn’t any kinder, comparing yesterday’s session to a flea market. “This performance shows how inexperienced the MPs are, and I cannot be optimistic about this House.” He went on to criticize the appointment of MPs who do not support the 25 January Revolution before moving on to other subjects. In the last 20 minutes of his show, Eissa hosted journalist Gamal Ghitas, who analyzed the composition of the House and backgrounds of the MPs.

Amr Adib called the first session a “farce” on a special episode of Orbit’s Al Kahera Al Youm. The episode aired in the wee hours of the morning, instead of its usual 9:30 pm slot, to report on the session, presumably not expecting it to go on for as long as it did. Adib echoed El Hadidy, saying that only in Egypt could you watch parliamentarians on their phones while in session. The House will become a circus if the speaker is not firm, he said.

“Hona El Assema” ran longer than usual in an attempt to cover the election of of deputy speakers, but El Hadidy called it quits before then, much like most of the MPs looked like they wanted to do during the session. She held several interviews with MPs, including the Free Egyptians’ Ayman Abo El Ela, who complained the session was running too long. Abo El Ela also had complaints about the food. Mohamed Anwar El Sadat also phoned in, saying we cannot judge the House based on the first, procedural session. MP Anisa Hassouna told El Hadidy she felt morally obligated to run for deputy speaker to represent the unprecedented number of women MPs. El Hadidy urged her to lobby: “This patriarchal society will not hand [us] anything; we have to fight for it.”

El Hadidy also hosted political analyst Moataz Abdel Fattah, who said while there were several MPs “to be proud of.” What’s with the chaos, then? A lack of unity and the urge to put on a show (we’re looking at you, Mansour). He stressed the importance of the House’s Ethics Committee in ensuring the “integrity and efficiency” of the sessions.

Adib hosted head of the Al Ahram Center for Political and Strategic Studies Diaa Rashwan, former Administrative Development Minister Hany Mahmoud and lawyer Mohamed Abou Shakkah. Mahmoud commended the percentage of women and Copts in the current House, calling it “Egypt’s first steps toward democracy.” Film director and MP Khaled Youssef phoned in telling Adib that social justice was at the on top of his priorities.


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An unprecedented 596 members of parliament convened on Sunday in a mammoth, 17-hour-long parliamentary session that was the first in over three years. The members (448 elected as independents, 120 party-based deputies and 28 presidential appointees, according to Ahram Online) have just 15 days to ratify over 330 pieces of legislation issued since the last parliament was dissolved in July 2013 after the ouster of former President Mohamed Morsi. But Sunday’s meeting was largely procedural. On the agenda: swearing in every member and electing a speaker and two deputies. Each member of parliament (MP) is obligated to read out the oath: “I swear by Almighty God to loyally uphold the republican system of Egypt, respect the constitution and the law, fully observe the interests of the people, and safeguard the independence of the nation and integrity and unity of its land.”

…At least that was the plan. Acting speaker Bahaa Abu Shoqa threatened to suspend the first session when the ever-controversial Mortada Mansour went off script during his swearing in. Mansour promised to uphold “articles of the constitution” and not its entirety. The constitution makes mention of the 25 January Revolution, but Mansour insists “25 January was an uprising, not a revolution.” The meeting continued when Mansour bent to the will of angry parliamentarians that he repeat the oath as written. But Mansour wasn’t the only one doing a little ad-libbing; some members reportedly added a “long live Egypt” to the oath. And in other never-a-dull-moment news, one member fainted and needed to be transferred to a clinic.

Constitutional law professor Ali Abdel Aal was elected speaker of the House with 69% of the votes cast, writes Al Masry Al Youm. Abdel Aal, who belongs to the Support Egypt bloc, beat out six other candidates — former Mubarak-era Minister of Social Solidarity Aly El-Moselhy, notorious media figure Tawfik Okasha, independent leftist Kamal Ahmed Mohamed, lawyers Khaled Abu Taleb and Eid Heikal and head of the Qalubiya Lawyers’ Syndicate, Mohamed Mahmoud El-Etmany — according to Ahram Online.

The majority of MPs agreed to continue with procedures to elect two deputy speakers, but not without a fight. A literal screaming match ensued between the speaker, who sought to postpone the proceedings to tomorrow, and other MPs over Article 117 of the constitution, which deals with the proceedings. You can watch the brawl here on Al Masry Al Youm (running time 1:07).

Some 15 members threw their hats into the ring (see a full list here), with 547 votes cast and five nullified. MP Mahmoud El Sherif won 345 of the votes, securing him the first seat as deputy. To determine the second deputy, a runoff will take place in another session after noon today between Alaa Abdel Moneim and Suleiman Wahdan, having secured the second-highest number of votes.

But don’t worry: It seems messy opening days aren’t just an Egypt thing. Venezuela’s parliament convened last week, and the Economist reports that “It was rowdy and disorganized. At one point it nearly degenerated into a brawl…”

Decline in business activity slows in December: Business conditions in Egypt’s non-oil private business sector worsened for the third month straight in December, albeit at a slower pace, according to the Emirates NBD PMI reading. The PMI posted 48.2 in December, up from the low of 45.0 in November. Output and new orders fell in December, and with new business from abroad also falling, purchasing activity was tempered. However, the data is encouraging, says Chief Economist at Emirates NBD Tim Fox, and it suggests that “the weak November survey was at least partly due to temporary factors impacting tourism and external demand. As such, it does not alter our view that the Egyptian economy will expand 4.2% y-o-y in FY2015/16.”

Urban consumer inflation was stable month-on-month in December at 11.1%, Reuters reports, citing state-run statistics agency CAPMAS.

EGAS inked agreements for 80 LNG shipments in 2016 worth a combined USD 2.5-3 bn, which will supply the national gas grid with 1 bn cubic feet of gas per day. The shipments are earmarked for both industry and power stations, a government source told Al Borsa. The supplies, which will be sourced from Sonatrach, Gazprom, Vitol and others, will be delivered to both of Egypt’s active FSRUs. The source claims that Egypt will maintain this level of gas imports next year despite phase one of the North Alexandria and Zohr fields coming online — adding 700 mn and 900 mn cubic feet per day respectively — due to maturing fields. Gas output dropped again at the start of this month to 4.1 bn cubic feet a day.

GAFI-owned Bedaya has launched a new USD 17 mn fund. Bedaya is Egypt’s first private-sector-led government fund and will support SMEs from various sectors in exchange for equity, according to Wamda. The new fund has a mandate to inject up to USD 6.3 bn in businesses but requires startups to have a minimum valuation of USD 2 mn to be eligible for funding. 60% of the fund’s investments go to ventures in remote areas to open up opportunities there. The one exception to the valuation requirement is if the startup is environmental as 15% of “Bedaya’s investments go to new renewable energy ventures that are implemented for the first time.”

Egypt’s renewable energy sector presents investment opportunities of at least USD 6 bn until 2018, EFG Hermes said in the build up to the World Future Energy Summit. The country is looking to add up about 8 GW of electricity-generating capacity, 5.5 GW of which will come from wind power and 2.5 GW from solar energy, leaving EFG Hermes to expect USD 6-7 bn in investments in the renewables sector. “We are bullish in the short to medium term on Egypt’s renewable energy projects. But it’s a matter of properly executing the first feed-in-tariff wave. The government’s implementation of the regulatory framework is one of the biggest challenges. Once the right implementation plan is in place, then it will be easy for international lenders to be fully comfortable with Egypt’s renewables sector,” said Bakr Abdel Wahab, Managing Director of Infrastructure Private Equity at EFG Hermes, according the statement carried by CPI Financial.

Coordinating monetary and fiscal policies and supporting SMEs are some of Egypt’s top priorities, the Coordinating Council suggests, according to Al Youm7. In their second meeting, the members of the Coordinating Council decided to move forward with a program to promote economic growth and structural reform. The council also said it will coordinate with members of parliament to expedite the passage of new laws, including the value-added tax act, and will work to implement the new Mineral Resources Law across outlying governorates. The council will also focus on implementing a new investment regime, in addition to enacting policies aimed at integrating the informal economy, Al Masry Al Youm reports.

Representatives of the World Bank, the African Development Bank and other development partners met on Sunday to discuss coordinating on providing technical aid to support the government’s economic program, sources tell Al Borsa. The meeting, which coincided with parliament’s first session, will be followed by more extensive ones to map out future development aid, add the sources.

Importers on the lobbying offensive — to no avail: The Construction Materials Division at the Federation of Chambers of Commerce has sent a memo to Trade and Industry Minister Tarek Kabil urging him to reconsider new non-tariff import restrictions, namely the new importers’ registry, Al Masry Al Youm reports. Chamber members argue that the registry’s new requirements, including accreditation by Egyptian and government-approved international agencies, will increase the costs of imported goods, necessitating more FX liquidity. They add that locally sourced materials cannot meet the demands of the construction industry. The Importers Chamber will hold a meeting today to draw up recommendations regarding import restrictions. The chamber’s head, Hamdy El Naggar, argued that the Central Bank of Egypt’s limits on USD deposits and raising the EGP cover on imports to 100% will lead to supply shortages and drive inflation, adding that these policies will not curb the FX crunch. This is expected to fall on deaf ears, as a banking sector source speaking to AMAY says the CBE will not budge from its course to limit import.

Real estate developer MNHD has seems to have landed the permissions it needs to amend the master plan of its EGP 30 bn Taj City development, according to an emailed statement. The company inked protocols with the Defense Ministry, the Cairo Governorate, the Urban Planning Authority and the General Authority for Roads and Bridges stipulating that MNHD help develop public roads and highway intersections in the areas surrounding the 3.5 mn sqm project, including the service axis running parallel to the Ring Road. Infrastructure work on the mix-use project has already begun. As for financing this and other projects, the company is looking into new loans or adopting a securitization process (similar to Amer Group’s), Al Mal reports. The company’s GM Ahmed El Hiteimy says the company has received offers from competing banks to provide it with up to EGP 875 mn since the protocols were signed.

If you’ve ever wondered what’s wrong with the nation’s cotton industry — if the constant drone of stories about an industry in crisis have become part of the background, becoming yet another barrier to getting up to speed — veteran finance writer Patrick Werr’s column this week is your starting point.

Al Borsa has published its updated car price list for January 2016, including price changes. The most expensive remains the 4700cc Toyota Land Cruiser at EGP 1.7 mn, while the cheapest is the 800cc Suzuki Maruti at EGP 46.5k. The biggest price jump comes courtesy of Volvo, with the 2L XC60 soaring EGP 104k to EGP 582k.

If you’re a subscriber and care about global energy prices, The Wall Street Journal has a nice five-year outlook on the U.S. oil industry — a type of mini-roundtable quoting three analysts. Read: “What Will the U.S. Energy Industry Look Like Over the Next Five Years?

Sean Penn’s interview with cartel boss Joaquin “El Chapo” Guzman is available at Rolling Stone magazine. Penn traveled to El Chapo’s jungle hideout in October, having later then forwarded the questions to be answered by video. “Of the many questions I’d sent El Chapo, a cameraman out of frame asks a few of them directly, paraphrases others, softens many and skips some altogether.” (Read El Chapo Speaks)

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

  • A man claiming allegiance to Daesh was charged on Saturday with attempted murder in the shooting of a Philadelphia police officer, Reuters reports. Edward Archer is accused of ambushing an officer in his squad car before midnight on Thursday. The Wall Street Journal writes (paywall) that Archer had visited Egypt and Saudi Arabia in recent years.

The Golden Globes were still airing live as we headed into the final 30 minutes of production on today’s issue. The Guardian is liveblogging the Ricky Gervais-hosted ceremony.

SPOTLIGHT on youth and SME development since Youth Day

President Abdel Fattah El Sisi declared 2016 the “Year of Youth” and announced a multi-pronged initiative meant to improve their lot and create 4 mn jobs. These centered on encouraging SME financing, improving education through a curriculum overhaul and providing them with 145k new housing units annually and land through the 1.5 mn feddan project, as we noted yesterday.

Policy makers have followed suit, with the Central Bank of Egypt (CBE) committing itself to facilitating new banking sector loans worth EGP 200 bn to 350k SMEs over the next four years — an initiative announced by President El Abdel Fattah El Sisi on Youth Day, reads a CBE press release (pdf). The CBE will set a 5% cap on interest rates for business with revenues of EGP 1-20 mn. The central bank will establish new mechanisms to guard against credit risk by formulating restructuring programs for defaulting companies. It will also support the Egyptian Banking Institute’s efforts to mentor entrepreneurs on financial management and advise the banking sector on loans to SMEs. Reuters has also picked up the story.

…To that end, the CBE is considering lowering the required reserve rate for banks to facilitate capping interest rates at 5%, a source tells Al Shorouk. Lowering the required reserve rate will account for the losses incurred on lending at the discounted level given banks usually extend loans at around 11%, according to the source.

The Industry and Trade Ministry — the CBE’s consummate partner in policy — joined the fray by signing an MoU to provide discounted insurance premiums on exports by SMEs with the Islamic Development Bank’s insurance arm, the Islamic Corporation for the Insurance of Investment and Export Credit, Al Mal reports.

Siemens will also be pitching in, as Prime Minister Sherif Ismail met with Siemens CEO Joe Kaeser to discuss developments on the Siemens Services Center, which is expected to train around 300 engineers and technicians. Siemens has committed to employing 100 of its training center graduates. Sherif hopes the center will help establish a highly competitive pool of talent for the Egyptian and regional market, Al Ahram reports. On a side note, the meeting reviewed progress on establishing an assembly and manufacturing plant for railway rolling stock and a factory for wind-power components.

Egyptian Knowledge Bank launched: Egyptian nationals will now have access to academic journals free of charge upon registration with their national ID number and mobile phone number, via the newly launched Egyptian Knowledge Bank, also part of Youth Day, according to SIS. The collection appears to have full access to Springer’s archives of journal articles, in addition to a number of other sources. We gave the site a quick test and after registration were able to immediately access scholarly articles as pdfs.


Coverage of the opening session of the House of Representatives pushed weekend terror attacks off the global front page this morning. Tamer El-Ghobashy’s piece for the WSJ and Reuters’ take are pretty representative of the line most correspondents are taking.

“‘Egypt was one of the most significant policy divides between the White House and the State Department and the Department of Defense,’” says Matthew Spence, a former deputy assistant secretary of defense for Middle East policy, in a c.5,900 word piece by Michael Crowley for Politico delving into the split inside the Obama administration on foreign policy, with a particular focus on policy toward Egypt, going as far back as January 2011. (Read ‘We Caved’)


Peter Schwartzstein and photographer Sima Diab paint a vivid, richly-reported picture of where the 1.5 mn feddan land reclamation project could fit into the nation’s food security network. Better yet: They literally criss-cross the nation to do it — ranging from wholesale market to desert farms to neighborhood vegetable hawkers. Solid reporting, great writing and beautiful photography in “Farming the Sahara.”


TV reporter makes four-year-old boy cry on camera: Whoever uploaded this particular copy had the foresight to have the video repeated five times. The video began making the rounds August of last year, but it perfectly captures how we felt watching parliament convene yesterday. (Watch, running time: 1:19)


Arab League foreign ministers strongly condemned yesterday what they called “aggressive and provocative actions” by Iran, at an emergency summit called by Saudi Arabia, AMAY reports. The story continues to make international headlines, such as the Financial Times’ “Cairo meeting raises pressure on Iran.”

Foreign Minister Sameh Shoukry will land in Germany today for an official state visit, the Foreign Affairs Ministry said. During the four-day visit, Shoukry will meet with a number of German officials, including his counterpart Frank-Walter Steinmeier.

El Sisi meets with Sudan’s foreign minister
President Abdel Fattah El Sisi met with Sudan’s Foreign Minister Ibrahim Ghandour yesterday to address advancing negotiations on the Renaissance Dam, according to a statement from Ittihadiya. El Sisi stressed the importance of taking serious steps towards the “Declaration of Principles”, which was signed in Khartoum in March 2015, while Ghandour affirmed Sudan’s commitment “not to cause any harm to Egypt’s water rights.” The statement did not touch upon the recent tussle over the issue of Halayeb, an issue Sudan is seeking regional arbitration on.

Egypt officially invited to OIC conference in Turkey
Turkey will invite Egypt to the 13th summit of the Organization of Islamic Cooperation (OIC) held in Istanbul on April 10-15 despite the strained relationship between Cairo and Ankara, Foreign Ministry Spokesperson Tanju Bilgiç said on Saturday. “Egypt, the term president of the OIC, would be naturally invited to the summit, but the decision regarding the level of its representation at the summit will be taken by Egypt’s own authorities,” said the spokesperson. Tensions have mounted between Turkey and Egypt since former President Mohamed Morsi was removed from office. (Read)


Egypt records surplus power of 5 GW on Sunday
Egypt’s total electricity production achieved a surplus of 5 GW on Sunday, according to a source at the Egyptian Electric Utility & Consumer Protection Regulatory Agency. The milestone was helped by regular deliveries of fuel by the Oil Ministry to power stations, the source adds. While low consumption during the winter season played a hand, it appears — based on the source’s statement — that the government’s emergency power strategy is bearing fruit. However, we find this a bit dubious in light of the 15-minute power cut in Cairo Airport (see On Your Way Out) and the confused look on some our editors’ faces as they came out of a two-hour power outage.  (Read in Arabic)

EETC to invest EGP 275 mn in power line development this year
The Egyptian Electricity Transmission Company will invest EGP 275 mn in developing new medium-tension power lines this year, according to a senior company source speaking to Al Mal. These investments will go into building 1,375 power lines by July 2016. The project represents a tiny fraction of the Electricity Ministry’s EGP 16 bn to build up power capacity this year. (Read in Arabic)


Iraq bans poultry imports from 24 countries, including Egypt
Iraq has extended a ban on imports of frozen and live poultry products to 24 countries, including imports from Egypt, Reuters reports. The ban follows concerns over avian flu threat and extends to eggs, feathers and “all products that use poultry or their products,” according to a government statement. (Read)


Higher paper prices threaten printing industry
A 20% increase in paper prices, on top of a shortage in supplies, is threatening the printing industry, says Waleed Ahmed, VP of the Chamber of Printing Industries at the Federation of Egyptian Industries. The cost of paper has gone up to EGP 9,000 per ton from EGP 6,800 per ton, he explains. Meanwhile, the Qena Paper Industry Co. provides only 30% of market demand, with the rest being imported, which adds to the domestic shortage, according to Ahmed. (Read in Arabic)


Abraaj-owned CMC to invest EGP 40 mn this year
Abraaj-owned hospital Cairo Medical Centre (CMC) is set to invest EGP 40 mn this year to increase the number of beds and import more equipment, Al Mal was informed. Abraaj had merged CMC with the Cleopatra Hospital and, according to a source, is assessing a number of medium-sized hospitals for another potential acquisition. (Read in Arabic)

AXA-Egypt lobbies for partnership with gov’t to provide universal health insurance
Insurance provider AXA-Egypt is looking to partner up with the government on rolling out health insurance services as part of the upcoming Universal Healthcare Insurance Act, Al Borsa reports. AXA’s CEO Hassan El Shabraweeshy is advocating for adopting a partnership model between the government and private sector when the law is implemented. He points to the systems of the UAE and Singapore as shining examples of public-private partnerships in providing universal healthcare. The law looks to provide much-improved healthcare by 2030. (Read in Arabic)


Egyptian hotels resort to arbitration as PEGAS Touristik delays payments
Egyptian hotels are resorting to international arbitration after Turkish tour operator PEGAS Touristik reportedly refused to pay amounts of more than USD 40 mn to Sharm El Sheikh hotel owners, Al Shorouk says. The newspaper adds that PEGAS has also not paid USD 42 mn in taxes and over USD 35 mn due to suppliers. The hotel owners say they filed a case at the Cairo Regional Centre for International Commercial Arbitration after complaints to the Tourism Ministry were unaddressed. Tourism Minister Hisham Zaazou reportedly refused to intervene, calling it a commercial dispute between private sector operators. (Read in Arabic)


ITIDA launches EGP 40 mn export subsidy program Export-IT
The Information Technology Industry Development Agency has launched the sixth export subsidy program, Export IT, with a budget of EGP 40 mn, Amwal Al Ghad reports. Companies interested in the export subsidy must register before 21 January and will receive a 10%-20% subsidy (on the added value of the export), depending on the size of the company and its earnings. (Read in Arabic)

NTRA to issue new SIM card distribution regulations
The National Telecommunications Regulatory Authority (NTRA) is issuing new restrictions on the sale of new SIM cards without consumer data collection, including reducing the number of licensed outlets to 2,800 from 18,000 and raising fines and revoking licenses for violators, Al Borsa reports. The NTRA is also finalizing the model contract governing SIM card distribution with mobile operators and distributors (which we noted last November), which will go into effect on 20 January. (Read in Arabic)


NBE injects EGP 50 mn to refinance struggling factories
National Bank of Egypt (NBE) said it injected EGP 50 mn to refinance struggling factories as of last December, Al Borsa reports. NBE has a strategy to support struggling businesses in collaboration with the Trade and Industry Ministry, according to the bank’s CEO. He notes that the central bank has held a number of meetings to address impediments to production and to help business rehire laid off employees and restore output levels. (Read in Arabic)

Misr Insurance pays Suez Steel EGP 150 mn in compensation
Misr Insurance paid Suez Steel EGP 150 mn for damages caused by machinery malfunctions, Al Borsa quotes Head of Insurance at Misr Insurance Hossam El Hefnawy as saying. The damages caused a significant drop in operating revenues, which is covered by Suez Steel’s insurance policy. (Read in Arabic)


EU could approve EUR 500 mn in funding to Egypt by March
The EU could approve EUR 500 mn in financial assistance to Egypt in March, EU Ambassador James Moran tells Al Borsa. EU countries will meet next month to discuss financial assistance packages to around 16 countries, including Egypt, according to Moran. He expects the amount allotted to Egypt to be EUR 500 mn or slightly higher, in line with the amount the EU has committed to over the past three years. (Read in Arabic)

Headline inflation unchanged in December, core inflation eases
Egypt’s annual urban consumer inflation registered 11.1% in December, unchanged from November, Reuters reports. On the other hand, core inflation eased to 7.23% in December, falling from 7.44% a month earlier.


El Sisi meets interior minister to discuss weekend’s terror attacks
President Abdel Fattah El Sisi met with Interior Minister Magdy Abdel Ghaffar to discuss the security situation in light of last weekend’s string of attacks. (Read in Arabic)


Saudi Arabia’s increased agricultural investments in Sudan could come at the expense of Egypt’s share of the Nile’s water, Walaa Hussein, editor-in-chief of the parliamentary news division at Rose al-Yusuf, warns in Al Monitor. In conjunction with Sudan’s participation in the Saudi-led intervention against the Houthis in Yemen, Riyadh has been encouraging Saudi investors to increase their exposure to Sudan. Egypt is reportedly concerned because Sudan is said to be using its entire allotment of the Nile’s water. Expanding agriculture areas in Sudan, as planned by some Saudi investors, could be disastrous to Egypt as a result, some experts say.

A power outage at a Cairo International Airport control tower yesterday delayed the takeoff of 15 flights for about 15-20 minutes, according to airport sources speaking to Al Mal.

A thousand times yes: In the wake of yesterday’s meeting of the House of Representatives, it seems apt to mention that President of the Reform and Development Party Mohammed Anwar Sadat wants to establish an academy for MPs to help them better conduct their legislative duties. Sadat told Al-Monitor that “the idea involves establishing an educational academy attached to the parliament building … and contracting with faculty members who specialize in the relevant disciplines such as law, constitution, finance, economy, etc.” While the idea is not without its detractors, several MPs have supported the initiative. “The idea is commendable … and I would be the first to enroll,” said MP Khaled Yussef, who represents the Kafr Shukr district of Qalyubia.

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USD CBE auction (Sunday, 10 January): 7.7301 (unchanged since Wednesday, 11 November)
USD parallel market (Sunday, 10 January): 8.58 (unchanged from Tuesday, 5 January)

EGX30 (Sunday): 6782.35 (-2.0%)
Turnover: EGP 338.2 mn (22% below the 90-day average)
EGX 30 year-to-date: -3.2%

THE MARKET ON SUNDAY: With global markets experiencing the worst opening week of a calendar year in almost 20 years, the EGX30 took a 2.0% tumble to 6782.35 just minutes into Sunday’s session. The World Bank cutting its growth forecasts for Egypt, the Emirates NBD PMI showing business activity declining in December and a series of violent attacks on tourists and security personnel over the weekend sent investors into a panic-stricken selling wave that left almost all notable constituents in the red. With a market turnover of EGP 338.2 mn, local investors were the sole net buyers. But EGX losses paled in comparison to international markets last week, with China’s Shanghai Composite already down 10% YTD. Regional markets largely followed suit, with Tadawul falling 2.2% and the DFM inching down 0.1%.

Foreigners: Net short | EGP -8.8 mn
Regional: Net short | EGP -3.8 mn
Domestic: Net long | EGP +12.6 mn

Retail: 86.8% of total trades | 87.0% of buyers | 86.6% of sellers
Institutions: 13.2% of total trades | 13.0% of buyers | 13.4% of sellers

Foreign: 4.5% of total | 3.2% of buyers | 5.8% of sellers
Regional: 3.6% of total | 3.1% of buyers | 4.2% of sellers
Domestic: 91.9% of total | 93.7% of buyers | 90.0% of sellers

WTI: USD 32.66 (-1.51%)
Brent: USD 33.06 (-1.46%)
Gold: USD 1,104.70 / troy ounce (+0.62%)

TASI: 6,090.9 (-2.2%)
ADX: 4,141.5 (+0.2%)
DFM: 2,963.8 (-0.1%)
KSE Weighted Index: 366.7 (-1.4%)
QE: 9,673.9 (-1.0%)
MSM: 5,365.2 (flat)


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

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