Sunday, 24 January 2016

MENA should welcome slower growth in China

TL;DR

Natural gas suppliers mull suspending contracts with Egypt as EGAS allegedly falls behind on payments. (Speed Round)

Egypt is seeking aid from the UAE, and Saudi has so far committed to fuel shipments only. (Speed Round)

Car prices aren’t going to fall as customs duties ease. (Speed Round)

MENA should welcome slower growth in China, EFG Hermes Head of Strategy Simon Kitchen writes in an exclusive piece for Enterprise. (Contrarian View)

El Sisi criticizes House for rejecting Civil Service Act. Bureaucrats, pensioners will receive January and February payouts without delay. (Speed Round)

Egypt’s Judiciary: Obstructing or Assisting Reform? (Worth Reading)

Lagarde running for second term as IMF chief. (Speed Round)

Tension in the run-up to the fifth anniversary of 25 January 2011. (Speed Round, Egypt in the News)

Egypt is in talks with Ethiopia on linking of power grids. (Energy)

40k tons of fish and meat languish in customs, risk expiration. (Basic Materials + Commodities)

By the Numbers

WHAT WE’RE TRACKING TODAY

The 13.5% rise in oil prices that began on Thursday could be “traders catching their breath,” Reuters reports. “For some of the analysts it had the hallmarks of a classic dead-cat bounce, a natural pause in the tailspin that had sucked prices below USD 30 a barrel for the first time since 2003 — with still lower lows lurking in the weeks ahead.”

We don’t know whether Ground Hog Day or Hot Tub Time Machine is the better analogy, but it’s hard not to think there’s a ripple in space-time when it’s January and we’re writing about Al-Jazeera reporting that a Tunisian prime minister has “appealed for patience after street protests,” having held a cabinet meeting “after imposing a nationwide curfew.” The story is making headlines in the BBC, and pieces by AFP and Reuters are getting wide international pickup.

Tomorrow is a national holiday in observance of the 25 January Revolution and / or Police Day. Enterprise will also taking the day off, but we’ll be back on Tuesday with our usual lineup.

The fourth Saudi-Egyptian Coordination Council meeting will begin today, with International Cooperation Minister Sahar Nasr expected to sign for the first tranche (EGP 250 mn) of a USD 200 mn grant from Saudi Arabia to help fund the 1.5 mn feddan project and other youth and development initiatives for women. The meeting will also look into preparations for the sixth and final meeting of the council, which is due to be attended by both President Abdel Fattah El Sisi and Deputy Crown Prince Mohamed Bin Salman, according to a government source speaking to Al Masry Al Youm.

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WHAT WE’RE TRACKING THIS WEEK

The 26th African Union Summit in Addis Ababa is taking place until 31 January. President Abdel Fattah El Sisi is set to hold meetings with Ethiopia and Sudan over GERD during the event. We haven’t seen anything as yet that suggests when the president may be holding those meetings.

The U.S. Federal Reserve’s Federal Open Market Committee is meeting on Tuesday and Wednesday. The Fed should release a statement on Wednesday at about 9pm CLT and the consensus appears to be that Fed chair Janet Yellen and her colleagues have limited options given the turmoil in the market at present. Its 2016 meeting calendar is here.

The Central Bank of Egypt’s Monetary Policy Committee meets on Thursday to discuss interest rates. Its 2016 meeting calendar is here.

ON THE HORIZON

From 1 to 3 February, Education for Employment is holding its regional meeting in Cairo.

And later that week, from 2 to 4 February, the Underground Infrastructure and Deep Foundations Egypt is also in Cairo for a conference about major underground projects in the city.

A CONTRARIAN VIEW

Why MENA should welcome slower growth in China

With the slowdown in Chinese growth playing a central role in everything from the global equities sell-off that’s been a characteristic of 2016 YTD through to the collapse of oil prices, one of the most common questions we’ve had of late is: What does it all mean for MENA? In the wake of Chinese President Xi Jinping’s visit to Egypt, Saudi Arabia and Iran, we asked Simon Kitchen, Head of MENA Strategy at leading regional investment bank EFG Hermes, to walk us through why he thinks we should ultimately welcome slower growth in China.

Two decades of strong growth in China has been good for the MENA region. Demand for energy has kept oil prices high, and high rates of saving in China have been as important as the U.S. Fed in keeping global borrowing costs low. Chinese factories have supplied MENA consumers with cheap household goods and, increasingly, affordable luxuries such as smartphones.

But China’s growth has been unbalanced. A cheap currency, slow wage growth and low interest rates supported an investment-led boom in China that created tens of mns of jobs (a precedent that Egypt could learn from today), bringing hundreds of millions out of poverty. Ultimately, though, China has over-invested, especially in the past 10 years, and fears of a sharp slowdown in the Chinese economy are rising.

MENA is not immune from the hangover — but if the region plays its cards right, it could emerge on the other side well positioned to capitalize on China’s shift toward a consumption-led economy. Tap here to read the full op-ed, written exclusively for Enterprise.

LAST NIGHT’S TALK SHOWS

Our daily Talk Show coverage is on a short hiatus. We’ll be back to on Tuesday.

SPEED ROUND

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Natural gas suppliers are considering suspending contracts with Egypt due to state-owned EGAS missing payment deadlines for LNG shipments amid a serious FX crunch, reports The Wall Street Journal. All companies with active supply positions have been impacted by the delays, with sources telling the Journal that the problems have been ongoing for three months. The LNG tanker British Sapphire was diverted to Brazil rather than discharging in Egypt, with traders saying the act was due to payment problems. “This is completely untrue,” EGAS Chairman Khaled Abdel Badie tells Reuters, saying deliveries were postponed until Egypt’s peak energy consumption period hits in August. Last November, EGAS officials announced that industrial companies in Egypt were being supplied with all of their natural gas needs, we have seen reports twice in the last two months that EGAS was “temporarily” reducing deliveries to industrial consumers by 10-15%. And while the Zohr discovery and the progress made toward exporting gas from Israel could improve the situation in the medium term, there’s plenty of turbulence for the state to grapple with in the meantime.

Egypt to ask UAE for financial assistance, Saudi Arabia commits to fuel shipments only: CBE Governor Tarek Amer has been in talks to urge UAE officials to buy Egyptian USD-denominated treasuries or extend Egypt a USD-denominated loan, a source told Al Mal. UAE talks aside, the source added that Saudi Arabia refused to invest in Egyptian debt or deposit funds at the CBE, but reiterated its commitment to continue fuel shipments and extend USD 3 bn in development loans.

Think car prices will fall this year with the decrease in custom duties? The CBE may have other plans, according to a report published by Al Borsa. The CBE is reportedly restricting auto importers’ abilities to secure trade financing to import vehicles, banking sources said, noting that this is part of the central bank’s “unpublicized policies.” Requests for letters of credit by suppliers, including GB Auto, Toyota Egypt and Nissan Egypt, to import vehicles have been postponed by banks, while requests to import car parts were accepted. The policy has not been publicized as making it public would violate free trade agreements, says Mena Sadek, GB Auto’s chief investments officer. With that development, a source told the newspaper that the price of imported cars is likely to rise and they will become more scarce, with prices of cars assembled locally dropping.

Could Misr Insurance be among state-owned companies for sale? Investment Minister Ashraf Salman implied as much when he said “a state-owned insurance company will be listed,” according to Al Masry Al Youm. He added that financial and industrial companies in three or four sectors would be up for grabs. The move, announced earlier in the month Ittihadiya, was positioned at the time as a means of shoring-up capital markets in light of the ongoing rout.

EFG Hermes is planning to build a portfolio of renewable energy investments in Europe and the Middle East, Bloomberg’s Anthony Dipaola writes. Bakr Abdel Wahab, an MD with the firm’s private equity arm, said the investment bank is targeting 1,000 MW in wind and solar assets in Europe over three years as “the regulatory environment in a handful of European countries is favorable and stable.” It is also looking at opportunities in Western European countries that already produce power and “can generate income immediately,” he adds. Abdel Wahab did not disclose how much money EFG Hermes is trying to raise. Closer to home, he said EFG Hermes is “closely looking at markets like Egypt and Jordan.”

MOVES- Former Governor of Alexandria Hani El Messeiry has been appointed as head of Orascom Housing Communities, sources told Al Mal.

President Abdel Fattah El Sisi sharply criticized the House of Representatives for failing to pass the Civil Service Act, describing the move as contrary to the mandated reform process. Speaking at the Police Day celebrations at the Police Academy, he urged MPs to consider their decisions carefully and pointed to the ailing civil service, which is staffed by 7 mn people “when only 1 mn are needed.” At the same event, the president offered tearful condolences to the families of security personnel killed in the line of duty.

Bureaucrats will be paid on time in both January and February despite the House’s refusal to pass the new Civil Service Act, according an emailed statement from Cabinet received on Friday. The statement came after Legal and Parliamentary Affairs Minister Magdy Al Agaty promised neither pensions nor salaries would be delayed, saying the government will work to mitigate any “negative effects” of the House of Representatives’ refusal to pass the civil service law, according to Al Ahram. January salaries will be paid in accordance with the Civil Service Act, a Finance Ministry source told Al Borsa. The government will go back to using the previous law (47/1978) once the Official Gazette publishes that the Civil Service Act has been abolished.

The government will reintroduce the act to the House following unspecified amendments, says cabinet spokesperson Hussam El Qawish, who said Cabinet accepts the House’s decision, but still views civil service reform as a priority. El Qawish made the remarks during a call-in with CBC’s Hona El Assema, Al Mal reports.

In the run up to the fifth anniversary of the 25 January Revolution, security forces have undertaken all the necessary precautions to stave off potential violence, says Interior Minister Gen. Magdy Abdel Ghaffar. He adds that the ministry expects protests, but stated “that these must be within the bounds of the law” and warned against attempts by the Muslim Brotherhood to attack security forces on that day. Leaders of political parties, including Al Wafd and Al Dostor, have urged young people to refrain from protesting on Monday, Al Shorouk reports. And while the government plans to release 100 activists today to take the edge off possible protests, four leaders of 6 April — a leading protest movement in the events of  25 January — will remain locked up, as the prosecution conveniently moved the hearing on extending their arrest to 30 January. The four were arrested on charges of membership in a subversive organization after organizing a protest. The Journalism Syndicate also called on the government to reveal the names of journalists who will be released today, Al Mal reports.

Several groups have either claimed — or been accused of — responsibility for an explosion that tore through an apartment in Giza on Thursday, killing seven police personnel and three civilians during a police anti-terror raid, according to Giza’s Emergency Prosecution Director Mohamed al-Tamawy, writes Aswat Masriyra. According to a statement on the Interior Ministry’s Facebook page: “Police had information that a group of Muslim Brotherhood members were preparing to carry out aggressive acts in the coming days using explosives and crude bombs.” The minister says the police raided the apartment on Thursday night where they found a number of bombs. Daesh affiliate Ansar Beit Al Maqdis claimed on social media that it was behind the attack, which it said was a trap to lure officers into a booby-trapped apartment. A separate militant group named Revolutionary Punishment also claimed the attack on its website, according to Al Ahram Online. Mokhtar Awad, a research fellow in the program on extremism at George Washington University’s Center for Cyber and Homeland Security, tells Vice that nearly all the Revolutionary Punishment’s assaults have occurred in Fayoum, which is a longtime Brotherhood stronghold, and suggested there could be an overlap between the group and the governorate branch of the Brotherhood. He adds, however, that due to the situation being a “melting pot of Islamist violence that’s been brewing for sometime,” members of the cell may have overlapped with Ansar Beit Al Maqdis, with both using the apartment to test explosives. “We can’t know for sure.”

In related news: “The region is facing exceptional and unprecedented conditions, requiring concerted efforts by the international community to overcome various challenges,” President Abdel Fattah El Sisi told U.S. Central Command chief Gen. Lloyd J. Austin in a meeting yesterday attended by Defense Minister Sedki Sobhi, according to an Ittihadiya statement. “Terrorism is a result of not stemming the flow of foreign fighters and the flow of money and arms to extremist groups in a number of countries in the region,” said El Sisi. Austin agreed on El Sisi’s “assessment of how events have unfolded,” with both sides pledging cooperation on anti-terror efforts.

Britain will nominate Christine Lagarde for a second term as the IMF’s managing director, according to Reuters. “At a time when the world faces what I’ve called a dangerous cocktail of risks, I believe Christine has the vision, energy and acumen to help steer the global economy through the years ahead,” Chancellor of the Exchequer George Osborne said in a statement.

Eurasia Group’s President Ian Bremmer is also lobbying for a second term for Lagarde. “The IMF has never had better leadership, and its board of directors should give her the chance to finish the work she has begun,” he argued in a piece he wrote for Project Syndicate. Bremmer says Christine Lagarde managed to “restore the Fund’s reputation” and describes her as “a leader dedicated to making the world a safer and more prosperous place.” Lagarde faces investigation in a corruption case dating to her time as France’s Finance Minister, when she signed off on a settlement involving the former chief of Adidas, who “received a large state payout for his dispute with a state bank.”

UAE real estate website Bayut.com’s owners, Emerging Markets Property Group (EMPG), have closed a USD 20 mn series C round, Wamda reported. Four months earlier, EMPG closed a USD 9 mn series B round. They did not name the series C investors, but said the funds came from “a fund which focuses on frontier and emerging markets with over USD 1 bn in assets under management.”

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

  • Greece’s Hellenic Petroleum agreed on Friday to buy crude oil from the National Iranian Oil Company, making it the first European refiner to begin trading with Iran after the lifting of international sanctions writes Reuters.
  • Michael Bloomberg is mulling a run for the U.S. presidency as an independent.

SPOTLIGHT on Chinese President Xi Jinping’s visit to Cairo

China’s President Xi Jinping was received officially at Ittihadiya on Thursday. Xi’s reception ceremony was broadcast live on national television (run time 09:20) after he and President Abdel Fattah El Sisi signed 21 bilateral agreements and MoUs to strengthen economic cooperation and finance Egyptian energy and electricity projects. Some 15 projects could be worth up to USD 15 bn, Xi told reporters. “The projects aimed to increase productive capacity in Egypt and included the electricity, transport and infrastructure sectors. Some have already been launched and others are still under discussion,” Xi said, according to Reuters.

China has signed a USD 1 bn financing agreement with the CBE and will lend USD 700 mn to National Bank of Egypt. Over 100 Chinese firms are set to invest as much as USD 2.5 bn in the Suez Canal Economic Zone, according to a statement from Ittihadiya. Reuters adds that the two leaders signed off on agreements that “span a raft of infrastructure investments including an agreement between Egypt’s Housing Ministry and a Chinese developer to work on the first phase of a new Egyptian administrative capital.”

Jinping also reportedly invited El Sisi to attend the next G20 Summit to be held in Hangzhou, China in September 2016, according to Ittihadiya.

Not signed: An agreement that would have seen the Aviation Industry Corporation of China (AVIC) invest in transportation projects including the domestic manufacturing of trains for the electric rail project in Tenth of Ramadan. Transport Minister Saad El Geyoushi has reportedly extended negotiations on the pact. Also absent from the list of signed projects, so far as we can tell: China Harbour’s proposed USD 500 mn investment in a new berth at Alexandria Harbor, where talks reportedly broke down on project financing.

Meanwhile, the Arab Academy for Science, Technology and Maritime Transport signed an MoU with China’s Satellite Navigation Center to cooperate on the development of satellite-assisted navigation technology. And a Chinese delegation will visit East Port Said today and see whether the auxiliary canal being dredged to the east of the port could be included in China’s China’s One Belt initiative

EGYPT IN THE NEWS

It’s all #25Jan all the time in international media coverage of Egypt, with everyone from the Telegraph (“This regime is more violent than Mubarak. There is no opposition now”) to the Wall Street Journal (“Egypt Moves to Head Off Popular Unrest”) getting in on the act.

One of the more interesting is Lauren Bohn’s ‘A Revolution Devours Its Children,’ which examines the lives of some of the more well-known imprisoned youth and their families, including Ahmed Douma, Esraa el-Taweel and others. Eric Trager, meanwhile, writes candidly for Foreign Policy about the power that the government faces in light of the looming 25 January. No, it isn’t protests. “Without the threat of the Brotherhood to unify the Sisi regime’s core power centers, latent tensions are now coming to the fore. The most obvious example is Sisi’s deteriorating relations with the business community,” writes Trager.

On a rather lighter note: Both the plot and the translation of Alaa Al Aswany’s “The Automobile Club of Egypt” have been panned by the Financial Times in its review this weekend.

WORTH READING

Egypt’s Judiciary: Obstructing or Assisting Reform? What has often been overlooked and largely poorly understood in the tumultuous events of the past five years is the role of the kingmaker: Egypt’s judiciary. Retired American federal prosecutor David E. Risley spent September 2010 to April 2015 in Egypt acting as a legal advisor during a period of time that witnessed not only sustained attacks on the judiciary by Morsi’s regime, but almost the complete overwhelming of a civilian legal system by the influx of cases resulting from the abolition of the Emergency Law and its associated courts. Already bogged down by a backlog of cases measured in terms of years, the new normal by which the judiciary faced led to what Risley characterizes as a move toward expediency and deferral of serious review of cases to the Court of Cassation by lower judges.

It’s in this context that Risley urges readers to view verdicts from lower courts that civilized, educated Egyptians — as well as the world at large — found repugnant, and which the Court of Cassation was left to deal with and reject. Risley warns against impulses toward revulsion and the temptation to paint the entire judiciary with the same brush, saying that doing so will only serve to isolate the best of Egypt’s judiciary, leaving them vulnerable to attacks on their independence.

Risley’s article is essential reading to fill in not only key gaps in understanding the events of the past five years, but as well as in understanding an institution that he argues is “the best hope for Egypt to transition to a stable, working democracy in which the constitutional rights of its citizens are protected.” (Read Egypt’s Judiciary: Obstructing or Assisting Reform?, c.5,000 words, Middle East Institute)

DIPLOMACY + FOREIGN TRADE

There are no developments in the status of Egypt’s relations with Iran, the Foreign Affairs Ministry’s spokesperson said, according to Al Ahram. Noting that Egypt stand with Saudi Arabia against Iranian meddling with Riyadh and other Arab countries’ domestic affairs, he added that diplomatic relations continue to be severed “for well-known reasons.” He also added that diplomatic relations with Turkey remain stalled due to Turkey’s attempts to intervene in Egypt’s internal affairs.

…That goes double for any rumored rapprochement with Turkey, according to the foreign ministry’s spokesperson Counselor Ahmed Abou Zeid, as reported by SIS.  “Ties will only witness progress if a significant change from Ankara’s side toward the situation in Egypt takes place,” according to Abu Zeid on Thursday in response to questions from reporters.

But something does seem to be going on with Turkey: Two diplomatic pushes between Egypt’s allies and Turkey are being simultaneously advanced, and both may be chalked up to energy-driven diplomacy: Cyprus and Turkish-occupied Northern Cyprus and Israel’s ongoing reconciliation with Ankara. Zvi Bar’el at Haaretz (paywall) writes ‘Gaza Is Final Obstacle in Israel-Turkey Reconciliation, but Egypt Is Caught Up in the Mix‘: “In practice, Gaza is turning into a hostage of the trilateral relations between Turkey, Israel and Egypt, and it is unclear what will lead to what. Will reconciliation between Egypt and Turkey precede that between Turkey and Israel, or will the process work in the reverse direction, in a way that is liable to anger Egypt? Israel promised Egypt not to do anything that could harm Egypt’s standing and interests. In other words, there will not be a unilateral lifting of the [Gaza border] closure.”

US trade delegation visiting for two days to explore opportunities in agriculture, energy: A trade delegation from Dakota is travelling to Cairo for a two-day visit at an unspecified date to explore an expansion in trade in agriculture and energy, according to a statement from the U.S. Embassy in Cairo on Thursday.

ENERGY

Schneider Electric to increase investments in Egypt by 10% in 2016
Schneider Electric is planning to increase its investments in Egypt by 10% this year, Daily News Egypt quotes the company’s regional head as saying. Schneider sees Egypt as one of its strategic markets that can help the company expand to other countries in the Middle East and North Africa. The company says it has built a customer care center in Egypt to serve Africa and is expanding its production in its Badr production plant, of which 20% of its output is exported to African countries. (Read)

Egyptian Refining Co. to start output in 1Q2017
Reuters reports that “the country’s largest refinery” will start trial production at the end of this year with a view to being fully operational in the first quarter of 2017. “We have completed so far 80 percent of the construction work and we will complete the rest in November then start trial operations before we start production in the first quarter of 2017,” the newswire quotes ERC MD Mohammed Saad as saying. (Read)

Electricity Ministry in negotiations with General Electric for wind power station
The Ministry of Electricity is in negotiations with General Electric (GE) to build a 150 MW wind power plant in either the Gulf of Suez or the West Nile Delta. Sources told Al Mal that GE is giving the government the liberty to pick its preferred location. The estimated cost of the project is EUR 150 mn and will most likely be carried out on a BOO basis, the sources noted. The Ministry is reportedly also stipulating that electricity from the project will bought at 4.06 cents per kWh and, if awarded the project, GE will refrain from bidding in future projects. (Read in Arabic)

Egypt approves EGP 1.5 bn loan from AFESD
President Abdel Fattah El Sisi issued a presidential decree putting into effect a loan agreement signed with the Arab Fund for Economic and Social Development in Kuwait dated 7 April 2015. The KWD 60 mn loan, equivalent to EGP 1.5 mn, will be used to finance the 650 MW West Cairo power station project. (Read in Arabic)

Egyptian delegations heads to Ethiopia to discuss linking power grids
An Egyptian delegation left for Ethiopia on Friday to discuss linking the power grids between both countries, Al Mal reports. The delegation, which is led by the head of the Egyptian Electricity Holding Company Gaber Desouky, will also discuss opening the Ethiopian market and providing incentives for Egyptian power and electric companies such as El Sewedy Electric and EGEMAC. The 2014 MIT Amicus brief we noted last week (pdf) states the GERD is expected to produce electricity far beyond Ethiopia’s current needs, implying at least the possibility they plan to export the energy. While compensation to Egypt for adverse effects from the GERD could come in some form of cheap energy exports, the report says that the infrastructure required for exports has yet to be built and would require approximately five years for construction, setting aside the time required to create a legal framework.

INFRASTRUCTURE

“Sahel” road will be opened in February
Arab Contractors said works in the Wadi El Natroun-Alamein road will be completed by February. The road, which connects Cairo to the North Coast, is being prepared to open as part of the first phase of the national road network’s projects. Amwal Al Ghad was told that the 135-km long road was redeveloped at a cost of around EGP 2 bn. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

French wheat prices well placed for Egypt’s first tender in 2016
French wheat prices are trading near their lowest levels since September, below Russian and U.S. competitors, Bloomberg’s Whitney McFerron writes. This was in time for Egypt’s first tender in 2016 to buy the grain. “French prices may also undercut Argentina, which supplied 120,000 tons of grain in Egypt’s last tender on Dec. 23,” McFerron writes. “Europe is probably the cheapest right now … If Egypt comes in, you’ve got to think Argentina competes again, but their prices have been bumped up a little bit,” a commodity risk manager explained. (Read)

40k tons of fish and meat languish in customs, risk expiration
Four meat import companies have sent an urgent request to the Agriculture Minister to intercede directly with the CBE to expedite FX for clearing 40k tons of fish and meat languishing in customs before they expire. It takes three months for these goods, which have a shelf life of six months, to reach Egyptian ports, and they stay in customs for around four to six weeks before clearing, leaving only one month before they expire to be sold, said Samir Soweilem, board member of the Meats and Poultry Division of the Chambers of Commerce. Cairo Chamber of Commerce member Sayed El Nawawy blames a lack of coordination between traders and government for the current state, as the government has little information on demand to set up a quota system for food imports. (Read in Arabic)

MANUFACTURING

New cement licenses are here at last
The Industrial Development Authority released the new terms and conditions for applying for the new cement licenses in nine governorates including Upper Egypt, Matrouh and South Sinai, Al Borsa reports. Dates for submitting bids for the new licenses will be from 10 February to 10 May, with approved applicants to be announced in July. Under these conditions, companies must have a minimum capital of EGP 50 mn and must submit LGs worth EGP 150 mn. Companies must build their own power plant to supply their factories and conduct environment impact studies. Only companies with a 25% market share can bid for two licenses. The price of these licenses will be withheld until 10 February. The government had been promising new cement licences to keep up with projected demand since last October. (Read in Arabic)

REAL ESTATE + HOUSING

NUCA looking to grow investments to EGP 40 bn in FY2016-17
NUCA is looking to increase its investments in FY2016-17 to EGP 40 bn, up from EGP 33.2 bn in FY2015-16. EGP 9.5 bn was spent in 1H2015-16 in addition to financing extending the infrastructure network into the first phase of the new administrative capital and the 1.5 mn feddan project. Investments into the new administrative capital will increase as the project progresses, sources tell Al Borsa, compared to EGP 5 bn invested this fiscal year. NUCA will depend on revenue from the sale of land and from proceeds from the planned factoring exercises of the USD-denominated receivables related to Bait Al Watan. Other projects in the Ministry’s line up includes 11 drinking water projects, and 84 wastewater projects in Assiut, which run the Ministry EGP 3.9 bn, Al Mal reports.  (Read in Arabic)

TELECOMS + ICT

Fawry targets up to 50% growth in 2016
E-payment and bill presentment firm Fawry is looking to grow 35-50% this year and will launch a new product for “small traders” in 2H2016, CEO Ashraf Sabry told the Daily News. Fawry sold a majority stake last year to a consortium including the Egyptian American Enterprise Fund, Helios Partners and and the MENA Long-Term Value Fund. (Read)

Tus-Holdings to provide assistance on building, operating technological zones
The ICT Ministry has inked a three-year renewable MoU with business park builder Tus Holdings to provide a consulting platform for building and operating technological zones in Egypt, announced ICT Minister Yasser El Kady. The announcement is in line with the launch of the government project to build tech-zones in multiple governorates. There are six tech-zones that will be built, added El Kady, and the state will provide the necessary infrastructure. The MoU includes providing the necessary assistance to build two zones before the end of 2016, which El Kady was previously quoted noting those zones were in Borg El Arab and New Assiut. (Read in Arabic)

BANKING + FINANCE

NBE in the market for an EGP 4.7 bn insurance policy against “political violence”
A number of insurers are bidding to insure National Bank of Egypt against “political violence,” sources told Amwal Al Ghad. The policy could pay up to EGP 4.7 bn and covers the bank’s assets and premises, the source added. Amwal Al Ghad said bids were presented last week and that the winning bid will be announced soon, without specifying an exact date. (Read in Arabic)

Mubasher establishes holding company with EGP100 mn in capital
Mubasher International plans to establish a holding company with an authorized capital of EGP 100 mn and issued capital of EGP 10 mn named Mubasher Holding for Financial Investments, says CEO Ehab Rashad, Mubasher reports. (Read)

EGYPT POLITICS + ECONOMICS

IDA, GAFI to issue tenders for up to 30 mn sqm of land
The Industrial Development Authority (IDA) will team up with GAFI to issue land tenders totaling 30 mn sqm in four cities beginning mid-February. The tenders, which will be in the cities of Tenth of Ramadan, Sadat, Borg El Arab and Port Said are expected to reel in EGP 16 bn in investments. Half of the land will be made available for industrial utility developers, according to a government source. This will make the IDA the second government body to issue land tenders with GAFI, after NUCA earlier this month, in a sign that the government is moving away from centralizing land permits with the Investment Ministry, in accordance with the Investment Act. Beyond easing intra-government tensions over the issue, these partnerships will be a mainstay until the planned and much-delayed one-stop-shop policy comes into effect by 1H2016, Al Borsa reports.

NATIONAL SECURITY

Gen. Ali Abouzeid replaced as commander of North Sinai Security District
Interior Minister Gen. Magdy Abdel Ghaffar replaced the head of the North Sinai Security District Gen. Ali Abouzeid with Gen. Said El Habbal. The move follows a string of terrorist attacks to take place since November, the most recent of which was an attack on a checkpoint in Al Arish early Thursday morning which led to the death of five security personnel (three of whom were officers). (Read in Arabic)

SPORTS

The Egypt national handball team defeated Algeria in their opening match of the 2016 African Cup of Nations being held in Cairo on Thursday. Egypt went on to defeat Nigeria on Friday and then Cameroon on Saturday in what’s looking like possibly the first Nations Cup win for Egypt since 2008, according to Ahram Online.

ON YOUR WAY OUT

President Abdel Fattah El Sisi called in to Al Qahera Wal Nas to lend his support for children’s magazine Nour in response the editor-in-chief’s desire to see government institutions back the magazine. He also briefly spoke about how the Tahya Masr fund would bring about a new beginning for Egypt. You can watch the clip here (run time 5:52).

Abu Bakr El Gindy was re-appointed as head of CAPMAS by presidential decree for a term running until 20 January, 2017.El Gindy has held the position since 2005, according to Al Masry Al Youm.

The travel ban on Egyptian businessman and newspaper owner Salah Diab was lifted on Saturday, Ahram Online reports. Diab, who is the cofounder of Al Masry Al Youm, was detained and had his assets frozen in November following charges of possessing a firearm and allegations of corruption.

The Townhouse Gallery, closed in a raid in December, is yet to re-open, Ahram Online reports, as bureaucrats appear to be playing a game of hot-potato.

Al Jazeera formally lodged a USD 150 mn claim against Egypt with the International Centre for Settlement of Investment Disputes last Wednesday, Al Borsa reports. Al Jazeera had filed a notification of dispute back in April against the shuttering of its offices after the overthrow of the Morsi government.

BY THE NUMBERS
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USD CBE auction (Thursday, 21 January): 7.7301 (unchanged since Wednesday, 11 November)
USD parallel market (Thursday, 21 January): 8.63 (unchanged since Tuesday, 19 January, Reuters)

EGX30 (Thursday): 5,713.35 (-1.09%)
Turnover: EGP 398.7 mn (15% above the 90-day average)
EGX 30 year-to-date: -18.45%

THE MARKET ON THURSDAY: The EGX30 inched down 1.1% on Thursday after a week of rattling global indices, several of which en­tered bear territory, with the EGX30 losing 2.5% over the week. The largest constituent, CIB, was down 0.6%. The top gainers were Amer, El Saeed Contracting and Palm Hills, while the worst performers were GB Auto, TMGH and SODIC. At a market turnover of EGP 398.7 mn, foreign inves­tors were the sole net sellers. Regionally, indices were in the red territory, with Abu Dhabi’s General Index down 0.8%, Dubai’s General Index 0.6% and Saudi’s TASI 0.1%. Globally, Germany’s Dax, France’s CAC 40 and UK’s FTSE 100 are currently up.

Foreigners: Net short | EGP – 66.7 mn
Regional: Net long | EGP + 17.7 mn
Domestic: Net long | EGP + 49.0 mn

Retail: 55.8% of total trades | 56.3% of buyers | 55.3% of sellers
Institutions: 44.2% of total trades 43.7% of buyers | 44.7% of sellers

Foreign: 15.3% of total | 8.4% of buyers | 22.3% of sellers
Regional: 7.6% of total | 9.4% of buyers | 5.7% of sellers
Domestic: 77.1% of total | 82.2% of buyers | 72.0% of sellers


WTI: USD 32.19 (+12.55%)
Brent: USD 32.18 (+14.52%)
Gold: USD 1,096.30 / troy ounce (-0.45%)

TASI: 5,463.6 (+0.1%)
ADX: 3,737.0 (-0.8%)
DFM: 2,622.0 (-0.6%)
KSE Weighted Index: 330.2 (-1.3%)
QE: 8,584.0 (-1.2%)
MSM: 4,867.0 (-0.5%)

 

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