TL;DR

Could oil really fall to the USD 10-20 range? Two global investment banks don’t see it as being out of the realm of the possible. (What We’re Tracking Today)

Central bank holds a sit-down with bank bosses on El Sisi’s SME drive. (Last Night’s Talk Shows, Speed Round)

Egypt could lose 10% or more of GDP as sea levels rise due to global warming, IMF warns. (Speed Round)

Orascom Construction to convert Assiut, West Damietta power plants to combined cycle. (Speed Round)

El Sisi meets defense, military intelligence chiefs + irrigation minister to discuss Ethiopia dam. (Speed Round)

Investment bankers are scrambling for a piece of the Saudi Aramco IPO. (Speed Round)

EMG denies participation in Israel-Egypt gas pact. (Energy)

Unilever Mashreq to invest EGP 460 mn in Egypt this year. (Manufacturing)

CBE assessing plans to “revive and restructure” the bond market. (Banking + Finance)

By the Numbers + CBE’s initiative should support SMEs, prop up bank margins

WHAT WE’RE TRACKING TODAY

Morgan Stanley thinks oil could fall into the USD 20s per barrel range, driven down in part by the depreciation of the Chinese renminbi. The firm made the call yesterday as Brent crude slid a further 6% to its lowest level since April 2004, and West Texas Intermediate slid to a new 12-year low. Morgan Stanley said a slowdown in Chinese has “added fears of slowing consumption to massive oversupply, even after a 70 per cent price drop over the past 18 months,” the FT noted, adding that, “while efforts to further weaken China’s currency could help shore up its export-focused economy, it would make imports of oil and other USD-priced commodities more expensive and would be likely to further hit demand.” The Morgan Stanley report notes that this “could lead to another round of commodity weakness and send oil into the USD 20s. USD 20-25 oil price scenarios are possible simply due to currency. … The USD and non-fundamental factors continue to drive oil prices.” Read more in the Financial Times or Bloomberg, with the latter adding to the story that Goldman Sachs also sees oil in the USD 20s, but because the finite capacity of storage tanks will mean some producers will simply have to stop pumping.

But wait, it could get worse: Reuters, meanwhile, says that while Barclays sees oil averaging USD 37 per barrel in 2017, Standard Chartered is predicting Armageddon, quoting the bank as saying: “Given that no fundamental relationship is currently driving the oil market toward any equilibrium, prices are being moved almost entirely by financial flows caused by fluctuations in other asset prices, including the USD and equity markets. We think prices could fall as low as USD 10 / bbl before most of the money managers in the market conceded that matters had gone too far.”

The General Authority for Free Zones and Investment (GAFI) will hold a board meeting today to discuss the business community’s objections to the Investment Law. Expect the current investment climate to be on the agenda, too, with issues including land tenders, industrial land development, and investment incentives, Al Borsa reports.

Finance Minister Hany Dimian will inaugurate a conference on implementing the value-added tax. Over three separate sessions, the conference will look into implementing VAT, possible structural changes to the tax and its executive regulations, Al Mal reports. This will be followed by the Egyptian Tax Society-organized workshop on applying the VAT to the services sector.

Foreign Minister Sameh Shoukry’s  is in Germany for a four-day visit that started yesterday. We’ll be keeping an eye out for details on the meetings.

And, finally, if like some of us here at Enterprise you’re a U.S. politics junkie, you can join us on the night / early morning shift today and watch Barack Obama’s final ‘State of the Nation’ address tonight (actually, Wednesday morning) at about 4am CLT.

WHAT WE’RE TRACKING THIS WEEK

Representatives from Arab development finance institutions arrived on Sunday for talks on support for Sinai. Among the institutions that have pledged to loan a combined USD 1.5 bn to Egypt for Sinai-based projects are the Kuwait Fund for Arab Economic Development, the Arab Fund for Economic and Social Development and the OPEC Fund for International Development. The reps will be in town until Thursday when International Cooperation Minister Sahar Nasr is expected to reveal more details.

On Thursday, China’s TEDA plans to announce the launch of its USD 233 mn development on the North West Gulf of Suez Economic Zone at a press conference. So far no word as to where or when on Thursday it will be held.

ON THE HORIZON

Chinese President Xi Jinping is set to land in Cairo at the end of next week (20-21 January). China’s Vice Minister of Foreign Affairs Zhang Ming met Egypt’s Foreign Minister Sameh Shoukry last week to prepare for Xi’s visit.

The Chinese president’s visit coincides with the World Economic Forum’s annual meeting in Davos on 20-23 January.

Also next week: Efma’s is holding its Banks of the Future in the Middle East conference on 18-19 January in Dubai. The gathering will tackle how banks need to adapt in what Efma says is an environment where “the economy is growing, the population is getting younger, yet international oil prices are declining.”

LAST NIGHT’S TALK SHOWS

The economy was finally back on the agenda (for a moment) after taking a backseat to discussions about the inaugural session of the House of Representatives.
CBC’s Lamees El Hadidy interviewed Banque Misr Chairman Mohamed El Etreby on the Central Bank of Egypt’s meetings with banks yesterday to discuss President Abdel Fattah El Sisi’s initiative to support SMEs. By phone, El Etreby reiterated that the CBE would exempt banks from the 10% reserve requirement when financing SMEs. “We could then put this amount [which would not have yielded interest had it been in reserve] in overnight deposits, earning a minimum of 9.25%, which, in addition to the 5% interest from the loan itself, will total up to 14.25% on the amounts financed.” He added that the CBE would cover a percentage in case of non-payment. “Banque Misr extended loans to 10,700 clients during the past seven months and spent EGP 330 mn; non-payment did not exceed 1% for micro projects,” he said, adding that the new decrees should be implemented by next week (The interview was significant enough that it’s crossed into the domestic print press; Al Mal has a summary here).

In last night’s “Ten Reasons” segment, Al Kahera wal Nas’ Ibrahim Eissa discussed why local products can’t compete with imported ones. The (mostly self-evident) points include: the cheaper cost of certain smuggled goods, better marketing on imports (celebrity endorsements included), a lack of local R&D and poor after-sale services. “Even our national football team wears T-shirts made by international brands; not a single team thought of wearing T-shirts made by Mahalla Weavers, for instance,” Eissa said. We wouldn’t either.

And now back to the parliamentary circus: El Hadidy was kinder to MPs today who earned brownie points with the host for “calmly” receiving and accepting the results of the deputy speaker elections (more in Egypt Politics + Economics). El Hadidy then whistled a vastly different tune than yesterday: “We should trust the MPs we have elected, and it is not fair to … already judge that this is a bad House.”

MP Mostafa Bakry called El Hadidy commending the decision to elect Wafdist Suleiman Wahdan as the second deputy speaker of the house. “The results are a sign of political maturity.” Bakry expects the House to start discussing and voting on the laws passed during the past two years within the next 48 hours after all the housekeeping is over.

Over on OSN, Amr Adeeb and Al Qahera Al Youm sometime-co-host Rania Badawy were not impressed. “The parliament was made to monitor state institutions and not for comedy,” said Badawy. Could have fooled us. Adeeb urged the MPs to snap out of the presidential spell under which they’ve fallen and start doing their jobs. “The relationship between the president and the parliament is an equal one … and the parliament should be a bogeyman that the president fears,” Adeeb added. Both hosts were incensed by parliament’s vote to stop airing sessions live, which seemed to be the only thing the House could agree on.

Two days after her husband Adeeb covered it, El Hadidy ran a segment on the siege of Syrian village of Madaya. Haytham El Maleh, head of the Legal Committee of the National Coalition for Syrian Revolutionary and Opposition Forces, told El Hadidy: “The system and its allies, especially Iran, have been starving Madaya village for the past seven months.”

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SPEED ROUND

The CBE amended on Monday its credit guidelines for banks to encourage them to lend to a wider range of clients, mitigating the risk of extending loans to a small number of large companies, Reuters reports. In a statement (pdf) published on its website, the CBE lowered the maximum amount banks can lend to a single client to 15% of their Tier-1 capital, from 20% previously. The CBE also cut the banking sector’s total investment in money market funds to 2.5% of their total deposits in local currency, down from 5%.

Banks have refused to register for value-added tax (VAT), Al Mal reports. The calls to have banks register for and become bound by VAT regulations baffles the sector, one source says, as the banking system as a whole was not bound by the sales tax to begin with. Tax Authority representatives reportedly say that having banks register is merely procedural and does not necessarily mean they will be bound to pay the tax. But banks are  still not satisfied, saying they don’t want to be left to seek an official exemption from the Finance Ministry later, the newspaper reports.

And while we’re on lending, the CBE also met with banking sector chairmen on Monday to discuss implementing the new SME financing directive, which could see banks provide EGP 200 bn over four years to SMEs, Al Borsa reports. Banking sector leaders presented their recommendations to the CBE. These include ways of reducing red tape in the credit application process, making it easier for SMEs to import, and providing land and utilities to qualified SMEs. In related news, the Federation of Egyptian Banks (FEB) is considering forming an SME-support fund, says head of the FEB’s SME Financing Committee, Hamdy Azzam.

Egypt could lose 10% or more of GDP due as sea levels rise due to climate change -IMF report: The IMF released a staff discussion note (pdf) on Tuesday outlining the financial implications of climate change; the release comes on the heels of the recently concluded COP21 climate change talks in Paris. With regard to Egypt in particular, the report warns: “Projected sea-level rise for countries nearer the equator exceeds the global mean. More generally, some small island states and coastal countries (Bangladesh, Cambodia, China, Egypt, Guyana, Mauritania, Suriname, Thailand, Vietnam) could lose 10 percent of GDP or more under high sea level scenarios.”

Orascom Construction (OC) has signed contracts to convert the Assiut and West Damietta power plants from simple to combined cycle, according to a company statement release. Both power plants will be completed on an EPC-plus-finance basis, with OC helping arrange a competitive financing package on behalf of the client. OC’s share of the project is USD 420 mn. The company has already completed the Assiut and West Damietta power plants in 3Q2015, and OC says converting them to combined cycle is expected to increase capacity by approximately 50% with no additional fuel intake. OC notes that it is “currently building in Egypt the two largest power plants in the world with a capacity of 4,800 MW each, and in 2015 connected 2,000 MW to Egypt’s national grid at Assiut, West Damietta and 6th of October.”

President Abdel Fattah El Sisi is expected to meet Saudi King Salman bin Abdulaziz in February to discuss the details of an agreement to supply Egypt with petroleum products for the next five years, Al Borsa quotes a senior official in the petroleum sector as saying. The agreement, which will detail the quantity shipped and the payment terms, will take the form of a commercial contract renewed every three months. A source at the Oil Ministry told Al Borsa earlier that Saudi Arabia would indeed resume supplying Egypt with fuel products starting February. The quantities scheduled for delivery in February and their value are yet to be agreed on, but the source says they will include gasoline, diesel, fuel oil and butane gas. The Egyptian General Petroleum Corporation (EGPC) will take account of its expected petroleum needs from February to April and present the figures to the kingdom, the petroleum sector source says. The Egyptian market’s monthly needs are estimated at 500k tons of diesel, 300k tons of butane, 150k tons of gasoline and 500k tons of fuel oil, according to data from the EGPC.

Egypt “suffering” from fuel subsidies -Oil Minister. Remarks made by Tarek El Molla at a conference yesterday are making international headlines after being picked up by the Associated Press, which quotes the oil minister as saying “I meant to show you this graph to let you feel the challenge and how Egypt is suffering from the subsidy. Can you believe that all of us coming today at this event in our vehicles and our cars, the government is subsidizing us?” The wire service quotes El Molla as suggesting that “money spent on fuel subsidies should ‘at least get reduced to a reasonable number by which this money can be directed to health care, education, that would help the development of the country.’”

The Electricity Ministry has allocated EGP 15.7 bn for investment in electricity transmission infrastructure over the next two years, Al Mal reports. The investments will be used to build new networks and refurbish existing ones in preparation for the new power stations that are reportedly expected to begin production. The ministry is also working on expediting linking Egypt’s power grid with Saudi Arabia’s and finalizing maintenance operations of existing power stations before the summer.

Ethiopia’s dam took center stage yesterday in a meeting between President Abdel Fattah El Sisi and top defense and intelligence officials, according to a readout on the meeting provided by Ittihadiya. El Sisi met with Defense Minister Sedki Sobhi, General Intelligence Directorate chief Khaled Fawzy and Irrigation Minister Hossam Moghazy to discuss the tripartite talks with Ethiopia and Sudan, saying that in a move to build trust, Ethiopia has invited Egypt and Sudan to visit the dam’s construction site. Moghazy confirmed that agreements would be signed in February with the two French consulting firms carrying out studies on the impact of the dam on downstream countries’ water shares, in line with the Declaration of Principles signed in Khartoum last March. The meeting follows a sit-down between El Sisi and Sudan’s Foreign Minister Ibrahim Ghandour on Sunday that dwelled on the dam. “Sudan’s interests are similar to Egypt’s and we will not allow anything to threaten both our and Egypt’s water security,” Ghandour said at the event. During both meetings, El Sisi stressed the importance of taking serious steps toward the Declaration of Principles.

GERD talks will also be the focus of the president’s trip to Addis Ababa, where he will take part in the26th African Union Summit, on 21-31 January, government sources tell Al Borsa. He is expected to hold a mini-summit with Ethiopian and Sudanese political leaders in attendance to push for increasing Egypt’s water share, in part by calling for more waterways to be added to the dam, the sources report.

Egypt is looking to borrow USD 1 bn in a concessional loan from a Chinese bank to finance sanitation work in the Nile Delta, according to Housing Minister Mustafa Madbouly, Ahram Online and Al-Borsa report. Madbouly signed a memorandum of understanding with Gezhouba Group Company, one of the largest Chinese construction companies, to build sanitation networks for 250 villages in the Menoufiya and Gharbiya governorates. The news comes as Cairo prepares for Chinese President Xi Jinping’s visit this month, with the cabinet reviewing last week a pipeline of potential Chinese investments in major infrastructure projects. Egypt also expects to receive a USD 200 mn grant from China as part of Xi’s visit, which International Cooperation Minister Sahar Nasr says will be invested in infrastructure, healthcare and Suez Canal development projects.

ADSL providers may sue Telecom Egypt over its refusal to lower fees to use its telecom infrastructure, with companies already retaining legal counsel ahead of the move, Al Borsa reports. This step comes after TE broke off talks to lower utilization fees and set what broadband companies call “arbitrary conditions” for lowering its tariffs. The suit, which the paper says would be filed in economic court, would be a sharp escalation in a case that has seen ADSL providers allege that TE’s monopoly over broadband infrastructure cost them 300k clients and EGP 100 mn in 2015 — to the advantage of TE subsidiary TE Data. That said, the companies could still turn to the National Telecommunications Regulatory Authority for arbitration, according to LINKdotNET Managing Director Waseem Arsany, Al Mal reports. TE’s control of infrastructure is responsible for reducing the end-user’s internet speed to 78% of the contracted amount, according to a Pharos report.

Families of Metrojet victims filing class-action suit against aircraft owner: Some 100 relatives of the victims of the Metrojet plane that crashed in Sinai in October are suing the American owner of the aircraft, Sputnik reports. The victims’ relatives have prepared a class-action lawsuit to the New York Court against the US leasing company International Lease Finance Corporation, which leased the aircraft to Metrojet. The claims seek USD 300k to USD 1.5 mn per victim, their lawyer says.

Tourism data since the crash is coming in, with CAPMAS reporting that the number of tourists visiting Egypt dropped 37.8% to 559k y-o-y in November, the month following the crash. Western European tourists made up 40% of travelers, while Eastern Europeans comprised 28.5%, 47% of whom were Russian citizens, Al Mal reports. Analysts had projected a decline of about 30%-35% if Russian tourists stopped arriving following the air disaster.

Bankers scramble for a piece of Aramco IPO: “Everyone is jumping up and down. There are probably hundreds of emails going around.” The Financial Times quotes unnamed investment bankers on the race for a piece of what’s still being touted as possibly the world’s largest IPO even after indications Aramco could be valued at USD 100 to USD 500 bn, depending on whether the offering is for the whole company or just its international arm. Some banks are “already pounding the pavements” in Saudi, and the newspaper says one banker believes a fee equivalent to 0.1% of the total offering (about what the investment bankers earned on the listing of KSA’s National Commercial Bank) would be fair. “Fees for private sector IPOs are closer to 1 per cent of [transaction] size,” the paper notes.

Over at the WSJ, Ahmed Omran and Summer Said argue that anyone saying the Aramco listing is in the USD 100-500 range is missing the point: The IPO could yet include some production assets, they say, citing an interview Omran landed with Aramco chief Khalid Al-Falih. They also speculate that a listing that includes only a fraction of production assets could make Aramco too big to list on the Tadawul. Omran writes that Al-Falih says there’s “no time frame for figuring out the best path. He said the kingdom was considering a partial listing on foreign stock exchanges.” Read the WSJ story, the transcript of Omran’s interview with Al-Falih, or a piece elsewhere in the Journal arguing that any IPO would have price-in the possible re-nationalization of Aramco in the future.

If you have an interest in Saudi and / or healthcare, you’ll also want to check out the latest from the FT’s Simeon Kerr, who traveled to Riyadh to report that “Riyadh plans radical surgery to rejuvenate Saudi health sector.”

Investors are questioning whether Shell is paying “too much” for its acquisition of BG after oil prices slumped to their lowest levels in almost 12 years, Bloomberg says. On the one hand, BG’s increasing reserves are a plus as they give Shell better access to develop them instead of injecting funds to explore new resources. Adding BG’s infrastructure will make Shell almost twice the size of Exxon Mobil, its nearest competitor in the production of liquefied natural gas. However, the oil price slump remains the biggest risk to the transaction, and Shell has not yet been able to convince all of its shareholders to vote to move it forward, Bloomberg adds.

Electrolux AB CEO Keith McLoughlin has retired following the collapse of the USD 3.3 bn agreement to buy General Electric’s household good business, Bloomberg reports. Replacing McLoughlin is Jonas Samuelson, who heads major appliance operations in Europe, the Middle East and Africa.

EGYPT IN THE NEWS

“What is Egypt expecting on Jan. 25 revolution anniversary?”: Sonia Farid writes on a long overdue question in Al Arabiya: What’s with the clampdown in the run-up to the anniversary of the 25 January demonstrations, given the population’s repeatedly demonstrated apathy and disgust for politics in general? A few quotes in particular stand out:

“I object to harsh security measures even if the Muslim Brotherhood and its supporters are calling for protests. And every violation on the part of security officers has to be properly investigated.” —Mounir Fakhry Abdel Nour, veteran cabinet minister and most recently Trade and Industry Minister.

“This is not the first time we hear concerns about the revolution’s anniversary and then nothing happens … Security forces are blowing the whole issue out of proportion, and I am positive nothing will happen since Egyptian people will not be deceived into taking part in protests organized by factions that plot against the state.” —Al Sayed El Badawi, chair of Al Wafd party.

“I find security precautions exaggerated, and I am worried that would make a lot of people angry, especially youths,” —Mohamed Sami, chair of Al Karama party.

“Saudi’s problem with a rogue dictator in Cairo”: Blogger Mohammad Pervez Bilgrami published a hit job op-ed on Egypt and El Sisi in Turkish newspaper Sabah, where he argues, uh, we’re not sure. He opens with the fairly bold statement that the Saudis have ended their relationship with El Sisi (?), which he says now leave them “willing to open a new era in relations with Turkey,” as if Saudi Arabia would otherwise be unable to simultaneously maintain diplomatic relations with Egypt and Turkey. Bilgrami seems to immediately retreat from this position, however, downgrading his initial claim to instead say the Saudis are “are now getting frustrated with El Sisi. They are looking for a change in Egypt, but they have not been able to come up with a formula that can be acceptable to the powerful military and the Muslim Brotherhood, which retains popular support among the country’s masses.” Keep blogging Bilgrami, you’ll get there one day.

WORTH READING

Behind Saudi Arabia’s bluster is a country that feels under grave threat: John Jenkins, former British ambassador to Saudi Arabia, Libya, Iraq, Syria and Burma, writes on the diplomatic flare up between Riyadh and Tehran. “If we think that a large part of the reason for states lashing out is the fear in which they exist, then doing something to address that fear is a large part of the answer. In this case, that principally demands showing that we mean to enforce the Iranian nuclear [agreement] rigorously — not hold off on additional measures against provocative missile testing (for instance) because the Iranians won’t like it (that’s the point)… ” (Read)

WORTH WATCHING

If you’ve never seen barnacle geese chicks leap off rocky cliffs, you may need to watch this immediately, as this may be the closest analogue in the animal world to watching Egyptians cross the street. Make sure to watch until the end because these little geese chicks are full of surprises, via BBC Earth. (Watch, running time: 4:16)

DIPLOMACY + FOREIGN TRADE

The US Customs and Border Protection has agreed to provide Egypt’s Customs Authority with technical support to facilitate regional trade, Al Ahram says. The UK’s Revenue & Customs has also expressed willingness to support Egypt’s Customs Authority, the head of the authority said.

ENERGY

EMG denies participation in Israel-Egypt gas pact
East Mediterranean Gas (EMG) denied it is part of the natural gas negotiations between Israel and Egypt, JPost reports. Commenting on the letter of intent signed between the Leviathan partners and Dolphinus to export as much as 4 bcm annually, EMG told Israel’s Energy Minister Yuval Steinitz it “finds it appropriate to inform [Steinitz] that it is not a party to those reported transactions … and was not included in any negotiations leading to such agreements.” EMG adds that it is neither engaged in discussions with Tamar nor with the Leviathan partners. (Read)

NREA to reach technical, financial agreement with Siemens for 2 GW wind farm this month
The New and Renewable Energy Authority (NREA) hopes to conclude negotiations with Siemens over technical and financial specifics of the latter’s 2 GW wind farm this month. Ongoing talks include working out the price of power generated and funding for the projects, in addition to ironing out cooperation between the two on technical studies and plans, an NREA source tells Al Borsa. NREA hopes to fund 60% of the project through development aid from international finance institutions and has reached a preliminary agreement with the CIB, Banque Misr and NBE to fund 30%. A more solid agreement is hoped to be reached by the end of the month. (Read in Arabic)

Oil Minister approves planning budget for three oil companies, reviews strategy
Oil Minister Tarek El Molla has approved the planning budgets for three state-owned companies for FY2016/17. Overseeing the Co-operation Petroleum Co., Misr Petroleum and the Assiut Oil Refining Company, El Molla is focusing on developing the strategy for handling and distributing petroleum products in the coming period, Al Borsa reports. The minister also stresses the importance of increasing the number of fuel stations and boosting their storage capacity and fitting transportation trucks with GPS systems and fuel tanks with automatic-tank-gauge consoles. (Read in Arabic)

President El Sisi ratifies EUR 40 mn loan from AFD for Kom Ombo solar plant
President Abdel Fattah El Sisi ratified a EUR 40 mn loan agreement with the French Development Agency to finance the 20 MW solar power plant in Kom Ombo — an agreement first signed at the EEDC last March with former International Cooperation Minister Nagla El Howany. The loan’s terms include a 24 month payment schedule at a 0.26% interest rate, reports Arabic Sputnik. (Read in Arabic)

MANUFACTURING

Unilever Mashreq to invest EGP 460 mn in Egypt in 2016
Unilever Mashreq will invest EGP 460 mn in Egypt in 2016, Amwal Al Ghad quotes the company as saying. The investments will be directed toward building a food processing plant in Alexandria. The company is also still working on expanding its house-care product plant in Sixth of October, which CEO Ashraf Bakry expects to be ready by mid-2016. (Read in Arabic)

China Glass inks agreement to build USD 200 mn factory in TEDA zone
Chinese glass manufacturer China Glass inked an agreement to build a USD 200 mn factory in the TEDA industrial zone North West of the Gulf of Suez, Al Borsa reports. The factory will produce flat glass sheets at a capacity of 363k tons annually, says TEDA CEO Wei Jianqing, half of which will be sold domestically and the other half exported to nearby markets. The China Glass feasibility studies indicate USD 175 mn have been allocated to the first phase, he adds, which includes buying land and establishing production lines and buildings. The project is expected to generate revenues of USD 163.9 mn in its first year. (Read in Arabic)

Electrostar injecting EGP 100 mn to increase production capacity
White-good maker Electrostar is injecting EGP 100 mn into increasing its production capacity in the coming year, according to Chairman Mohamed El Menoufy. The funds will be used to upgrade the company’s refrigerator manufacturing equipment, he adds. The new equipment will increase production capacity to up to 400k refrigerators annually from 160k currently. (Read in Arabic)

Importers lodge complaint to CBE, seek amendments to import restrictions
The importers section of the Federation of Chambers of Commerce has filed an official complaint to CBE Governor Tarek Amer requesting amendments to the recently imposed import restrictions. The amendments include adding exemptions allowing for the unrestricted import of raw materials and inputs used in the production of capital goods, according to Al Mal. The head of the Cairo branch of the organization went a step further, calling the restrictions on importing 50 goods “illegal.” He also warns that the restricted goods do not have domestic substitutes, Al Borsa reports.

HEALTH + EDUCATION

Saudi Arabia to recruit nurses, looks to Egypt
Saudi Arabia’s Health Ministry is “finalizing the employment of Egyptian, Sudanese and Pakistani female nurses to work in public health institutions,” the Saudi Gazette reports. The ministry is sending representatives to the three countries to hire the nurses and finalize the paperwork, which will be processed this week, says the ministry’s director for contracts. (Read)

Terre des hommes sets up project to protect school children in Upper Egypt
International children’s rights organization Terre des hommes (Tdh) has set up a new project to protect school children in Assiut, according to the Thomson Reuters Foundation. The project will address persistent violence against children in Upper Egypt. Tdh will work on raising awareness, training key stakeholders and implementing protective measures in schools. The situation is particularly dire in Assiut, with one UNICEF study showing that 67% of children surveyed there had experienced physical abuse and 86% psychological abuse in the past year. (Read)

REAL ESTATE + HOUSING

MNHD to break ground on Primera phase two, partner on non-residential projects in 1Q2016
MNHD plans to break ground on the second phase of its EGP 70 mn Primera compound in 1Q2016, says MNHD General Manager Ahmed El Hitemy. MNHD will also begin marketing this phase of the project during the quarter. Other projects in the pipeline for the company include teaming up with other developers for non-residential projects. The company is in talks with Saudi Arabia’s Al Hokeir Group to build a 100k sqm mall in its Tag Sultan project. The company will invest a total of EGP 170 mn on road and highway development in East Cairo as part of protocols inked with the Defense Ministry and other government bodies, which we touched on yesterday. The move paved the way for permissions to amend the master plan of Taj City, whose second phase saw reservations reach 10%. (Read in Arabic)

Arabtec moves forward with design work for 100k homes despite stalled negotiations
Arabtec’s stalled negotiations with the government over 13,000 homes in Obour have not hindered planning and design work on the EGP 23 bn first phase development of 100k homes, says an executive from the Architecture & Planning Group — the project’s designers. The executive implied that an agreement with the government approving the development of the 13,000 homes as part of the first phase is coming, something we’ve been hearing since last month. This appears to contradict a disclosure from Arabtec (pdf) last December that denies reports that it is requesting to expand the project beyond the 13,000 homes in Obour due to stalled negotiations over this and over repatriating its earnings from the project. Arabtec is anticipating earnings of EGP 30 bn from the first phase, he added. (Read in Arabic)

TOURISM

Tourism sector owes EGP 560 mn in electricity bills
The tourism sector in Sharm El Sheikh and Hurghada owes the Electricity Ministry a total of EGP 560 mn for electricity consumed from 2010 to 2016, a ministry official tells Al Mal. The Sharm El Sheikh tourism sector owes the Canal Company for Energy Distribution EGP 260 mn, according to company Chairman Mohamed El Sayed. In Hurghada, the dues amount to EGP 300 mn, according to sources within the Egyptian Electricity Holding Company, which  has agreed to restructure debts for tourism companies in both cities over the next six months, free of interest. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Customs duties on European cars under 1,300 cc officially removed
European cars with engines under 1,300 cc and spare parts for them are now fully exempt from customs as part of the EU Partnership Agreements inked in 2004, the Customs Authority says. We noted last week Al Borsa’s report that a source at the Finance Ministry said customs on cars with these specs would be lifted “within days.” Cars with engine sizes of up to 1,600 cc have also had their customs duties reduced to 16% from 40%. Cars with larger engine sizes had their customs duties reduced to 54% from 135%. By 2019, all customs duties on European cars will be removed, says Galal Ali, head of trade agreements at the Customs Authority. (Read in Arabic)

Customs Authority issues updated list of gov’t-guided prices on Mercedes cars
The Customs Authority issued a list of government-guided prices on Mercedes model cars released since early 2015. The list (published in Al Mal) could be part of a government plan to guard against what some agencies see as price gouging by automobile dealers, especially in light of the recent tariff reductions on EU cars. The issue reached its zenith last month when the Consumer Protection Agency held a sit down with distributors. Mercedes cars saw the highest jump in prices last month. (Read in Arabic)

BANKING + FINANCE

CBE assessing plans to revive and restructure the bond market, Al Mal says
The CBE is assessing plans to revive and restructure Egypt’s bond market, sources tell Al Mal. The central bank is expected to completely reform the market to widen its user base and allow dealings on all kinds of fixed-income instruments through dealers in the secondary market, according to the sources. Also on the table are changes to the primary dealer system and introducing new instruments, including sukuk. A decision by the CBE should be expected by February. (Read in Arabic)

PBDAC taps CBE for EGP 5 bn loan to support restructuring
The Principal Bank for Development & Agricultural Credit (PBDAC) has asked the CBE for a 10-year, EGP 5 bn facility, Amwal Al Ghad reports. The funds will be used to support the bank’s restructuring and revive its role in the field of economic development. CBE Governor Tarek Amer has reportedly expressed his support of PBDAC, a source adds. PBDAC is preparing to send a memo to the government and the CBE detailing its needs, including an EGP 3.5 bn capital increase to EGP 5 bn. (Read in Arabic)

IDBE to negotiate EGP 100 mn loan from SFD
The Industrial Development and Workers Bank of Egypt (IDBE) is looking to borrow EGP 100 mn from the Social Fund for Development, Al Borsa reports. The two parties have already begun negotiations for the loan, according to IDBE VP Hamdy Azzam. The loan will be used to finance SMEs and foster job creation. (Read in Arabic)

Beltone Financial completes 100% acquisition of Beltone IT
Beltone Financial has completed its full acquisition of Beltone IT after buying the rest of the company’s outstanding shares (55%) for EGP 77.6 mn, Al Borsa reports. The book value of Beltone’s investments in Beltone IT stands at EGP 107 mn, with its share of Beltone IT’s 3Q 2015 losses amounting to EGP 4.5 mn. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Titan’s Alexandria Portland Cement sued for its coal usage
Residents of the area surrounding Alexandria Portland Cement’s plant are suing the Titan-owned company for its usage of coal as fuel, Al Ahram reports. With the plant being near a residential area, the case says the coal usage adds to the health concerns of residents and calls for a cease and desist. The case is also calling for Prime Minister Sherif Ismail to rescind his approval of using coal as an input in plants located near residential areas. The previous iteration of the environmental law barred the industrial usage of coal near residential areas without exception, a clause that was reversed by decree. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Wafd’s Suleiman Wahdan elected as second deputy speaker of the House
Suleiman Wahdan, the candidate fielded by Al Wafd, was elected as the second deputy speaker of the House on Monday, Daily News Egypt reports, winning by four votes in a runoff election between himself and the Support Egypt coalition / pseudo-party candidate Alaa Abdel Moneim. 20 MPs didn’t bother showing up for the vote, Al Borsa reports, beginning what we hope will not be a trend of absenteeism. “The remaining procedures for the parliament are the discussion and adoption of a new code of conduct, as well as electing members and heads of the different internal committees, which are currently 19 committees and could increase,” DNE notes. Al Nour party’s Ahmed Khalil proposed a committee to amend the internal regulations of the parliament, Al Mal reports. Need more? Ahram Online has a bit of background on the speaker and his two deputies.

Investor associations opposed to paying real estate taxes on unused land
A number of investor associations and the Federation of Egyptian Industries (FEI) are opposed to paying real estate taxes on unused land attached to industry projects, Al Masry Al Youm reports. This is one of the biggest hurdles to investments, says Head of the Taxation Committee of the October City Investment Association Ahmed Rashed. Talks between the FEI and the Real Estate Tax Authority to mitigate some of these taxes are ongoing, says Head of FEI’s Taxation Committee Mohamed El Bahy. This comes as the Central Auditing Organization put the authority on notice, holding it responsible for issuing fines for delayed tax payments on declared assets. (Read in Arabic)

SPORTS

Egyptians just can’t escape bureaucracy: Basel’s Egyptian midfielder Mohamed Elneny’s transfer to Arsenal is still being held up by work permit and visa issues, according to ESPN FC. The agreement was meant to be finalized at the start of the week, but manager Arsene Wenger now expects it to go through by the end of the week.

ON YOUR WAY OUT

Self-awareness alert: The otherwise excellent Gamal Essam El Din from Ahram Online is forced to entertain the musings of MP Tawfik Okasha on the election of Ali Abdel Aal for the post of speaker of the House, with such amazing quotes as “the election of Abdel Aal was a ‎big mistake because he is an old guard figure who ‎represents an extension of the autocratic politics of the ‎former NDP and even further back, to 60 years ago.”

Turkey has arrested an Egyptian family of 12 attempting to cross into Syria to join Daesh, the AP reports. Egypt’s Foreign Ministry has issued a statement on the arrests, demanding to know the details of the case and the charges against the Egyptians. The family, which was arrested in the Adana province, includes three children. Egypt’s consul in Istanbul Bassam Rady confirmed the news on Monday, adding that Egypt will be demanding that Turkey deport the people back to Egypt, according to Ahram Online. It is still unclear how Turkish authorities knew the group was planning to join the Daesh fold.

A Swedish tourist wounded in the attack on the Hurghada Bella Vista hotel has been released from hospital, Al Arabiya quotes medical officials as saying. The attack left three foreign tourists injured. An elderly Austrian couple are still being monitored, but are said to be stable.

So long Major Tom: Music icon David Bowie has died at the age of 69 after an 18-month battle with cancer. The singer was known for a number of hits including Space Oddity, Let’s Dance, The Man Who Sold the World and of course Ziggy Stardust. His death comes just days after the release of his final album “Blackstar.” David Bowie’s final music video, Lazarus, may be viewed here (running time: 4:09).