Monday, 1 February 2016

Deodorant’s going to cost more as customs duties rise on “luxury goods”

TL;DR

Deodorant’s going to cost more as customs duties rise on luxury goods. (Speed Round)
Is Egypt out? Israel, Greece, Cyprus explore joint natural gas pipeline to Europe. (Speed Round)

DHL delays expansion at CAI on back of U.S. cargo restrictions, Al Othaim plans Egypt investments. (Speed Round)

Moody’s: Increased USD deposit caps will not ease bank liquidity + external aid is credit positive for Egypt. (Speed Round)

Labor Act under fire from business associations. (Speed Round)

BP to invest USD 777 mn in Gulf of Suez. (Energy)

Edita to complete new factory in 2016, concerned on currency -report. (Retail)

FLSmidth signs operation and maintenance agreement with Arabian Cement. (Manufacturing)

Auto manufacturers, CBE governor discuss auto-industry rescue plan. (Automotive + Transportation)

Some imports exempt from CBE’s 100% cash cover. (Egypt Politics + Economics)

By the Numbers

WHAT WE’RE TRACKING TODAY

The second Egyptian-Russian forum kicks off today. Trade Minister Tarek Kabil is meeting with Russian counterpart Denis Manturov and a delegation of 100 Russian companies. The two are expected to sign an agreement on an Egyptian-Russian-Emirates fund during the forum, according to Al Mal. Perhaps significantly: The newspaper reports that UAE Minister for State Sultan Al Jaber is due to attend the session on the fund as the Emirates’ representative. Also part of the delegation was manufacturer Russian Helicopters, which will meet with the Arab Organization for Industrialization to discuss a potential assembly plant in Egypt, Al Masry Al Youm reports.

Education for Employment will hold a networking and learning meeting on 1-3 February at the Four Seasons Nile Plaza. The nonprofit network’s aim is to create economic opportunity for unemployed youth in the MENA by providing them with training in vocational and professional skills in high demand by the local labor market — and connecting graduates to jobs.

The American presidential election cycle kicks into high gear today as the Iowa caucuses take place. Politico has more.

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WHAT WE’RE TRACKING THIS WEEK

Russia is expected to sign an MoU with Egypt for a Russian industrial zone in the Suez Canal on or before Tuesday.

Arts Mart Gallery is hosting the largest exhibition yet of renowned Egyptian artist Omar El Nagdi’s work. Omar El Nagdi — Fragments of a Luminary will feature 80 pieces of work by the iconic artist. The show will open with a reception on Friday, 5 February at 6:00 pm at the Arts Mart Gallery, Kilometer 28, Cairo Alexandria Desert Road, next to Dandy Mall.

An Italian business delegation headed by Economic Development Minister Federica Guidi will arrive this week to discuss investment opportunities and lay the groundwork for an Egyptian-Italian business summit sometimes this month.

ON THE HORIZON

The 2016 Solar Power North Africa Conference takes place in Cairo next week on 8-11 February.

LAST NIGHT’S TALK SHOWS

The controversial presidential decree to raise tariffs on imports (more in Speed Round) was the topic du jour on talk shows last night, with Lamees El Hadidy and Amr Adeeb taking slightly different stances on the matter. El Hadidy made the case for the measures in light of the FX crunch, saying foreign currency “goes to waste with the import of luxury items.” These “luxury” items include deodorant (don’t get us started), household appliances, apples and pet food. Adeeb wasn’t having it, saying we were on the way to a “global economic crisis” and that raising tariffs would only serve to harm the average citizen. Adeeb was so worked up he stopped short of angrily listing every single item on air.

Both El Hadidy and Ibrahim Eissa were riled up about a massive accident that saw at least 16 people killed in a multi-car pile-up near Beni Suef. And where does the blame lie? With the victims, of course. Head of the General Authority for Roads, Bridges and Land Transport Adel Turk told El Hadidy: “We cannot be quick to judge or blame it all on roads,” adding that fog and how ill-equipped “careless drivers” are in dealing with it were largely to blame.

Turk said the authority convenes every month and spends EGP 100 mn every year on road signs. Professor of Transport Engineering at Ain Shams University Osama Okail was quick to respond on the show, saying he has “been trying to reach the authority for months to no avail.” He also scoffed at the idea that the authority meets monthly: “They must be clandestine meetings.”

In other morose news, cartoonist Islam Gawish (more in Egypt in the News) was arrested on charges of running an unofficial webpage and using unlicensed software, but more likely due to his drawings critical of the government. Resident freedom-of-speech advocate Adeeb was livid as usual, saying the ‘trumped up’ charges were incomprehensible.

Assistant Minister of Interior for Media and Public Relations Abu Bakr Abdel Karim told El Hadidy that Gawish’s office in Nasr City was raided over the unlicensed software. And while Gawish running a website without a license was not necessarily a felony, it is “against the law.”

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SPEED ROUND

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It’s official… President Abdel Fattah El Sisi issued a decree increasing custom tariffs on some “luxury” items. Tariffs on nuts, including cashews, almonds and pistachios, are up to 20%, while avocados will be charged 30% and apples 40%. Custom tariffs on pet food have also been increased 40%, the same rate as will now be charged on cosmetics, deodorants, sports shoes, dental floss and home appliances. Al Masry Al Youm has the full list in Arabic and Reuters and Bloomberg have coverage in English. The Customs Authority has already begun implementing the new tariff rates, AMAY reports. These new rates are expected to bring in at least EGP 1 bn in revenue, said Customs Authority head Magdy Abdel Aziz. CBE Governor Tarek Amer said in an interview last month that he thinks Egypt can save up to USD 20 bn in “unnecessary” imports.

…and importers are, naturally enough, up in arms, saying they’re being made to feel as if the blame for the FX crunch rests squarely on their shoulders, says Head of the Importers Division at the Cairo Chamber of Commerce Ahmed Shiha, Al Mal reports. In contrast, Al Borsa is reporting that Head of the Federation of Egyptian Industries Mohamed El Sewedy has praised the decision, saying it will work to regulate the Egyptian market and support the economy and Egyptian industries. A Samsung-Egypt executive speaking to Al Borsa said that his company will abide by these regulations, but will have to assess the impact they will have on operations.

Moody’s says the Central Bank of Egypt’s move to raise USD deposit caps will not ease bank liquidity pressures since new USD deposits will still short of the demand to finance imports, according to the rating agency’s Credit Outlook for February (paywall). However, Saudi Arabia and China’s financial support are credit positive for Egypt as it will “support the country’s balance of payments, which lately have been under pressure from a widening merchandise trade deficit, weakness in tourism and lower deposit inflows and grants from the Gulf.” And while government grants mean an increase in future repayment obligations, the risks are somewhat mitigated by Egypt’s “low levels of total external debt of 15.4% of GDP at the end of the fiscal year that ended 30 June 2015 and general governmental external debt of 8.5% of GDP as of the same date.”

And while we’re on the CBE: The central bank plans to launch an initiative to encourage domestic lenders to offer long-term, lower-interest loans to finance new investments by industrial companies, Al Mal reports. The initiative, which is expected to be announced in days and will offer finance for 7-10 year terms, comes amid complaints by factory owners of a lack of bank lending to fund equipment and machine purchases. The move follows a meeting between CBE Governor Tarek Amer, banking heads and over 50 investors to discuss the issue.

Taking Egypt out of the equation? Israel, Greece and Cyprus will explore building a joint natural gas pipeline to Europe, Reuters reports. “Groups of specialists will be appointed to assess the pipeline idea, and plans are proceeding to create an undersea electricity cable to Europe,” according to Israel’s Prime Minister Benjamin Netanyahu. The announcement was made as the leaders of the three states met for their first tripartite summit in Nicosia on Thursday. Greece’s Prime Minister Alexis Tsipras said Athens could act as a bridge for the transfer of east Mediterranean gas to the rest of the European Union. However, former Director-General of the European Commission Michael Leigh is not convinced of the project’s viability. “It’s not feasible for commercial and political reasons … it’s pie in the sky,” he said. Egypt has firmed-up relations with both Greece and Cyprus in the past 18 months as part of its drive to reposition the nation as an energy hub for the Eastern Med through which both Cypriot and Israeli gas would be liquefied for export to Europe.

Tourist arrivals in Egypt fell 43.7% y-o-y in December to 440k tourists from 781k tourists a year earlier, according to CAPMAS, Al Masry Al Youm reports.

MOVES- Former Trade and Industry Minister Mounir Fakhry Abdel Nour and former Finance Minister Ahmed Galal will join Beltone Financial’s board of directors, reconstituted after the OTMT-Act Financial takeover. Naguib Sawiris will be a non-executive board member representing OTMT, Al Mal reports. The new board will be chaired by Sameh El Torgoman.

DHL has delayed its expansion plans at Cairo International Airport as the logistics company feels the pinch of U.S. restrictions on cargo from Egypt imposed after the Metrojet disaster, the company’s country head said. Operations in Egypt passed a TSA inspection last week, he adds. The halted Cairo Airport expansion aside, DHL said it is implementing EGP 800 mn worth of expansions in 1Q2016. (Read in Arabic)

Andalusia Group allocates USD 15 mn to El Nakhil Hospital expansion: The Saudi group aims to add 70 beds to bring total capacity to 170, says CFO Mohamed Abdel Rasool. Andalusia Group acquired a 51% stake in El Nakhil Hospital in 2009 and inaugurated the Andalusia Smouha Hospital in 2012, Al Mal reports.

Saudi-based Al Othaim Leisure and Tourism plans to invest USD 300 mn in Egypt over the next five years, says CEO Fahad Al Othaim. The company plans to launch two new projects in Cairo this year, Mubasher notes Al Othaim as saying.

Fintech startup Dopay has raised USD 2.4 mn in a pre-Series A funding round led by Techstars Ventures and Force Over Mass Capital, Wamda’s Rachel Williamson writes. Dopay offers payroll services for the unbanked and plans to use the funds to expand in Egypt and Ghana. The startup uses its cloud-based payroll service to help companies pay staff electronically.

Manpower Ministry faces mounting criticism over Labor Act: The Labor Committee of the Federation of Egyptian Industries (FEI) joined other associations in condemning the third draft of the Labor Act after a meeting on Sunday that included the Egyptian Businessmen’s Association, the Egyptian Tourism Federation and the Egyptian Federation for Construction and Building Contractors, Al Mal reports. The group criticized legislation for not being inclusive and not taking into account the business community’s recommendations on previous drafts of the act. It’s the second time the FEI and the EBA have condemned the draft law, which has now been declared final by Manpower Minister Gamal Soroor, who says it aims to grant more protections to workers, including provisions against arbitrary firing of employees. The act will establish new official channels for mediating disputes between workers and employers, said Soroor, who spoke on the legislation at an International Labour Organization ILO conference on Saturday. The minister says that the act, which he claims will be presented to the House of Representatives “soon”, is balanced and takes into account opinions from both sides. Also in the pipeline for the ministry is the new Labor Unions Act, which would better-regulate union leadership elections.

Medical Syndicate remains steadfast in closure of Matariya Training Hospital until police officers accused of assaulting doctors are referred to trial: The Interior Ministry suspended eight police officers pending investigations of their role in the alleged assault of physicians Ahmed Mahmoud and Moemen Abdel Azeem at the Matariya Teaching Hospital and subsequent alleged cover-up, according to MOI spokesperson Maj. Gen. Abdul Karim Abu Bakar as reported in a statement by the Egyptian Medical Syndicate on Sunday. As we noted yesterday, the doctors reported non-commissioned police officers had arrived at the hospital in the early hours of Thursday morning, with one demanding the falsification of medical reports. When the demands were not met, the police allegedly detained and beat the physicians in an operating room, then took them to Matariya police station. The Medical Syndicate’s leadership headed a delegation to the Prosecutor General’s office on Sunday to file an official complaint, with Ahram Online quoting a syndicate member as saying the shutdown will continue until the officers in question are brought to trial. In a background piece by Daily News Egypt, doctors said inadequate security at hospitals from angry patients is a systemic, nationwide issue.

Cairo U student at Hyperloop competition in Texas: Elon Musk’s SpaceX is sponsoring a two-day Hyperloop Pod Competition at Texas A&M University. About 120 college teams and three from high schools are at the competition to present their designs for the Hyperloop. Among those presenting is a team from Cairo University. Samar Abdel Fattah was the only member of the Cairo University four-person team who was able to secure a visa in time to attend the fair. “The Hyperloop is a brand new idea for everyone … There is no space program in Egypt, so it’s really hard to get feedback on your ideas. Now I have all of this energy,” Abdel Fattah told Bloomberg.

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

  • HSBC is imposing a global freeze on salaries and hiring in 2016 in an effort to cut costs by as much as USD 5 bn by the end of 2017, Bloomberg quotes a spokeswoman for the bank as saying yesterday. The Guardian has more.
  • Barclays and Credit Suisse are set to pay the biggest ever fines for dark pool trading, poised to settle federal and state charges that they misled investors, Reuters and Bloomberg report.

THE MACRO PICTURE

America’s 51-month IPO streak came to a grinding halt in January, with not a single offering being priced, Renaissance Capital says in a blog post.

Leading global economists now see a 20 per cent chance of the US falling into recession this year, and a diminishing likelihood of the Federal Reserve raising rates as previously thought,” the Financial Times (paywall) writes. A Financial Times survey of 51 economists cites last month’s market turbulence and disappointing economic reports out of the U.S. and China as the primary reasons behind the gloomy outlook.

It may be 2042 before we recover the losses from the coming stock market crash,” financial columnist Bill Bonner writes for Business Insider, saying that on the basis of cyclically adjusted price-to-earnings ratios, the S&P 500 has “been a worse deal only three times in the last 100 years. Those were just before the 1929 Crash… the dot-com bust in 2000… and right before the 2008 meltdown – hardly auspicious precedents.” The question isn’t whether we’re in a bear market, he says, but whether we’re entering a 20+ year downcycle.

The first big domino teetering? Oil-dependent Nigeria is in talks for concessionary loans worth USD 3.5 bn from the World Bank and African Development Bank (AfDB) to help finance a growing gap in its budget as crude prices sink, Bloomberg quotes Finance Minister Kemi Adeosun as saying. Discussions are ongoing, but a formal request has not yet been made to the World Bank for USD 2.5 bn and AfDB for USD 1 bn. The Financial Times (paywall) has a more in-depth look.

EGYPT IN THE NEWS

As we noted in Last Night’s Talkshows, cartoonist Islam Gawish was arrested yesterday over drawings critical of President Abdel Fattah El Sisi and the government, Mada Masr reports. A source at the Ministry of Interior tells Al-Bedaiah that Gawish, who is most known for his work with Al-Waraqa comics and who has about 1.6 mn followers on Facebook, was arrested for running a website and Facebook page without permits, publishing false news and the illegal possession of pirated software. Former ICT Minister Khaled Negm says no such crime exists, explaining that there is no legislation requiring ICT Ministry approval to run websites and social media pages, Al Mal reports. Gawish’s lawyer Mahmoud Othman tells Ahram Online, “Unofficially and verbally, I was told that Islam Gawish was accused of using [means of communication] to spread anti-regime cartoons.”

The story is picking up momentum in international media coverage of Egypt, with the New York Times’ Declan Walsh and Amina Ismail moving fast to file “Cartoonist Is Arrested as Egypt Cracks Down on Critics,” clarifying that Gawish was arrested at the offices of Egypt News Network, which is the entity accused of running without a permit. (The website was down at time of dispatch this morning.) The Associated Press also has the story.

Also making international headlines is yesterday’s massive, deadly car crash.

WORTH READING

On religious revivalists, the economic elite and the supply and demand of intellectual output: Against the backdrop of the ongoing Cairo International Book Fair, Sami Mahroum, Director of the Innovation & Policy Initiative at INSEAD, has a fascinating piece published last week on the two competing strands of Arab culture, religious revivalists versus the individualistic economic elite and the parallel disparity between the consumption and production of intellectual output.

“This cultural vacuum is most evident in the mismatch between the region’s reading habits and the response of its publishing industry. Egyptians, for example, read for an average of 7.5 hours per week, compared to five hours and 42 minutes in the United States. And yet in 2012, according to Abou-Zeid, the entire Arab world and its 362 mn inhabitants produced just over 15,000 titles, putting it in the same league as Romania (with a population of 21.3 mn), Ukraine (45.6 mn), or the American publisher Penguin Random House.” (Read The Lonely Arab Crowd)

IMAGE OF THE DAY

A cartoon drawn by 28-year old artist Iranian Atena Farghadani depicting members of the Iranian parliament as animals over their vote for a bill that would end the no-charge provision of contraceptives, rolling back Iran’s decades-long and highly successful family planning program (background on the program in this pdf). Atena is serving a 12-year prison sentence for the cartoon and is currently in solitary confinement, despite having suffered a heart attack following her hunger strike. Atena is pictured here, and the cartoon may be viewed here, both images via the BBC.

WORTH WATCHING

As Americans in Iowa “caucus” today to — bottom line — help winnow out the field of candidates vying to become president of the United States, we present Donald Trump debates Donald Trump. (Running time: 8:11)

DIPLOMACY + FOREIGN TRADE

President Abdel Fattah El Sisi met with UN Secretary General Ban Ki-Moon to discuss Egypt’s completed road map and enhancing cooperation in the Security Council, according to a statement from Ittihadiya. The president also sat down separately with Sudanese President Omar Bashir, Nigerian President Muhammadu Buhari and Ethiopian Prime Minister Hailemariam Desalegn during the African Union Summit. El Sisi and Desalegn reaffirmed their commitments to the Declaration of Principles of the Grand Ethiopian Renaissance Dam. El Sisi also discussed funding more programs and projects in Egypt with the President of the African Development Bank (AfDB) Akinwumi Adesina at the headquarters of the African Union. The president proposed that the AfDB fund joint ventures that serve several countries, particularly in the areas of transportation and agriculture. Adesina confirmed that the bank is looking to expand its activities in Egypt and is working with the government on implementing more development projects.

Indonesia has approved importing citrus from Egypt through the port of Jakarta, Al Borsa reports. Prior to the approval, exports were only allowed through other ports, costing Egyptian traders more money given the distance to the Indonesian capital.

ENERGY

BP to invest USD 777 mn in the Gulf of Suez
BP has allocated USD 777 mn toward its investment budget in Egypt this fiscal year up from USD 717 mn last year, says GUPCO (a BP JV) Chairman Abdel Ezz El Regal. The company was able to cut its spending down from USD 1.2 bn while achieving around 103% of its production plan last year, he added. The company’s average daily output is around 85,000 bbl per day, says Ezz El Regal, noting that the company is aiming to expand output to 90,000 bbl per day during 2016. (Read in Arabic)

Noble signs domestic agreement to supply gas from Leviathan, eyes Egypt next
Noble Energy and Israel’s natural gas companies have signed the first contract to supply natural gas from the Leviathan field to local electricity producer Edeltech Group, Bloomberg reports. The Leviathan partners will supply Edeltech with 6 bcm of gas over 18 years. “This deal marks a beginning. We are advancing more agreements with customers in Israel, Jordan, Egypt and Turkey,” says Delek Drilling CEO Yossi Abu. (Read)

Oil Ministry approves Trident, GANOPE E&P agreement
The Oil Ministry has approved a new USD 4.5 mn agreement between GANOPE and Trident Petroleum, says Oil Minister Tarek El Molla. The agreement entails drilling six exploration wells and a USD 500k signing grant. The concession lies in the Gulf of Suez, he adds. El Molla also says the agreement is one of 11 currently currently being processed with a minimum investment value of USD 446.5 mn. (Read in Arabic)

Electricity Ministry finalizing agreement with ABB to establish USD 100 mn transmission stations
The Electricity Ministry is negotiating with ABB Group to build three transmission stations worth USD 100 mn. The move is part of the ministry’s plan to boost transmission capacity to the national grid, which includes contracting El Sewedy Electric and El Nasr Transformers and Electrical Products with importing 100, 40 MV transformers for EGP 400 mn. (Read in Arabic)

INFRASTRUCTURE

Environment Ministry to issue five land tenders for waste-disposal projects
Five plots of land in the Cairo governorate will be tendered by the Environment Ministry to establish sorting, recycling and disposal of municipal, medical and industrial waste projects, says Environment Minister Khaled Fahmy. (Read in Arabic)

Fayoum governorate to issue EGP 175 mn infrastructure tender in March
The Fayoum governorate will issue a public tender for infrastructure and road work with an estimated value of EGP 175 mn, says Head of Housing Ahmed Abdullah. (Read in Arabic)

RETAIL

Edita to complete new factory in 2016, concerned on currency
Edita will complete its new, EGP 54 mn Sixth of October plant, launch 14 new products and expand its distribution network in 2016, sources tell Al Mal. Edita obtained the rights to manufacture 14 new products from international cake manufacturer Hostess and will export its products to 12 countries in the Middle East. Edita is concerned about the availability of foreign currency in 2016, which could be coupled with an EGP devaluation and a drop in the purchasing power of Egyptians. The issue could be exacerbated by the application of VAT, the source added. (Read in Arabic)

MANUFACTURING

FLSmidth signs operation and maintenance agreement with Arabian Cement
FLSmidth has signed an operation and maintenance agreement with Arabian Cement Company for its plant near Suez, Reuters reports. “The parties have agreed not to disclose the value of the contract, which covers five years of operation and maintenance of two production lines with a capacity of 6,000 tonnes per day each,” according to Reuters. The contract expires in 2021. (Read)

South Valley Cement allocates USD 19.5 mn to convert to coal
The South Valley Cement Company board has agreed to contract Chinese company CDI to convert its factory to use coal at a total cost of USD 19.5 mn. The conversion will take up to 15 months. The agreement also includes CDI importing spare parts for two years, funded by CIB. (Read in Arabic)

HEALTH + EDUCATION

No Zika virus cases in Egypt, Health Ministry says
There are no registered cases of Zika virus infections in Egypt, the Health Ministry said, according to Al Mal. The WHO designated Egypt as one of the countries with a climate that could aid the spread of the virus-carrying mosquitos, an issue on which the Health Ministry did not comment. (Read in Arabic)

Doctors Syndicate sends warnings to health minister, prime minister
The Doctors Syndicate sent two cease and desist warnings to Health Minister Ahmed Emad and Prime Minister Sherif Ismail, demanding the government obey a court verdict that increases compensatory payments from the government to doctors who become infected while working in state-run hospitals. (Read)

HIV infections not spreading among dialysis patients in Kafr El Sheikh, governor says
The spread of HIV among dialysis patients in Kafr El Sheikh is merely a rumour, the city’s governor says, denying reports to the contrary on social media. There has only been one case of HIV among patients, and all necessary precautions were taken to prevent its spread. All dialysis machines have been sterilized and their filters changed according to the normal protocol, he adds. (Read in Arabic)

REAL ESTATE + HOUSING

Rooya Group invests EGP 2 bn to complete real estate projects this year
Rooya Group are investing EGP 2 bn to complete real estate projects this year, says Chairman Hesham Shoukry. The projects include Telal El Sokhna, Stone Residence, Stone Park and expansions to Telal El Sahel, Hadaba October and two new projects in Marsa Alam, he notes. Rooya Group recorded sales of EGP 2.5 bn in 2015, the highest since 2011, Shoukry says in his interview with Al Mal. (Read in Arabic)

TOURISM

Tourism Ministry’s charter airline will seek early acquisition
The Tourism Ministry’s new USD 100 mn charter airline, which will be established in partnership with the private sector, is looking to acquire an established company to get of the ground faster, says Tourism Minister Hisham Zaazou. Some 80% of the company will be financed by the private sector, while other government entities involved will include the National Investment Bank, the Tourism Fund and EgyptAir, Al Borsa reports. On another note, Zaazou says Control Risks will begin evaluating security on Egypt’s airports next week, spending three months assessing three airports as part of the first phase.

AUTOMOTIVE + TRANSPORTATION

Egyptian auto association meets with CBE governor over auto-industry rescue plan
The Egyptian Automobile Manufacturers Association (EAMA) met with CBE Governor Tarek Amer and other monetary policy makers over the past few days to discuss an initiative to support the local auto industry, says EAMA Head Hassan Suleiman. The move follows the CBE raising the USD deposit caps to USD 250k, which will not do enough to help save the struggling industry, Suleiman adds. Beyond the FX crunch, the auto industry has been disrupted by government-guided prices issued on imported cars, he says. (Read in Arabic)

BANKING + FINANCE

NBE postpones debt installments for 20 tourism sector clients
National Bank of Egypt has agreed to postpone debt installments for 20 tourism sector clients, due until 30 June, says NBE board member Yehia Aboul Fetouh. The companies’ total outstanding balance is equal to around EGP 5 bn, he adds, while the installments up until 30 June are equal to around EGP 1.3 bn. NBE’s move is in line with the CBE’s directive to support the tourism industry, Aboul Fetouh noted. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

JWT Cairo in talks with parent to set up media, PR companies in Egypt
J Walter Thompson (JWT) Cairo is in talks with parent company WPP to set up media and PR companies in Egypt, Executive Chairman Hany Shoukry tells Al Mal in an interview. The media company will specialize in buying advertising space and in assessing, planning and optimizing advertising budgets. Shoukry hopes both companies could be set up in 1Q2016 and notes that JWT has managed to grow at least 15% in the past five years bar 2011. On a separate note, he says that the tourism promotion campaign was delayed to avoid spending the budgeted funds in the aftermath of the Metrojet flight crash in Sinai. The campaign will focus mostly on 27 main markets and will allocate 35-40% of its funds to digital media, he adds, saying that it aims to rebrand Egypt internationally. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

CBE issues new exemptions from 100% cash cover for some imports
The CBE has excluded the imports of medical equipment, spare parts and software and computer hardware from the 100% cash cover, a statement from the CBE read. The decision was welcomed by the General Division of Computer and Software at the Federation of Egyptian Chambers of Commerce, says head of the division Khalil Hassan Khalil, reports Al Mal.

Land tendering framework grants governorates a bigger role in land tenders
The Investment Ministry and governorates will implement a land tendering framework that gives  governorates a larger role in issuing land tenders, but will remain within the bounds of the Investment Act, according to Al Mal. The framework will allow governorates to form investment zones managed by boards of directors. Governorates will designate land for investment, while the Investment Ministry will appraise the land and set the type of investment agreement for the project. Land pricing will then be evaluated by land committees, which could be headed by a governor,Local Development Minister Ahmed Badr. The move follows calls by governorates and the Local Development Ministry to decentralize land tendering.

Egypt, Russia in talks over using national currencies in bilateral dealings
Egypt and Russia are in talks over using the EGP and RUB in dealings between the two countries, says speaker of the lower house of Russia’s parliament Sergey Naryshkin. “Currently, there are active negotiations on the possibility of using national currencies in mutual settlements in the area of ​​trade. If we talk about investments, there is a so-called project of the financing platform, the development of which is underway,” Naryshkin says, according to Sputnik. (Read)

ON YOUR WAY OUT

Roger Tamraz, a Cairo-born Lebanese-American bnaire is reportedly looking to buy English football club Bolton Wanderers FC. Tamraz is the CEO of Intra Investment Company and chairman of Netoil Inc, but despite some claims, he was not the governor of the Central Bank of Egypt in 1998; that was Mahmoud Salah Eldin Hamed.

Another way to get USD: Bank of Alexandria is trying to get its clients to withdraw transfers they receive in EGP instead of USD, Al Borsa reports. The bank is offering clients who agree to withdraw the funds in EGP the chance to enter lotteries and win cash and in-kind prizes.

Prime Minister Sherif Ismail held a meeting with several key ministers to assess the progress of upgrading railways in light of yesterday’s railway accident in Giza, which led to the death of 22 people when a train collided with a truck that was attempting to cross the tracks. Ismail also met the National Railways Authority chief Ahmed Morsi, who informed him that a committee on railway infrastructure safety had been formed along with a committee to investigate the accident, Al Mal reports.

A 28-year-old Italian student went missing in Cairo one week ago today on the anniversary of 25 January, the Italian Foreign Ministry revealed for the first time on Sunday. The brief statement did not give much in the way of detail other than to note that Giulio Regeni’s disappearance was reported within hours and that a direct line of communication has been established with Foreign Minister Sameh Shoukry. The Italian media seem to have their own suspicions of Regeni’s fate, if this photo accompanying some of their coverage is any indication. The story is starting to get some international play.

BY THE NUMBERS
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USD CBE auction (Sunday, 31 January): 7.7301 (unchanged since Wednesday, 11 November)
USD parallel market (Sunday, 31 January): 8.78 (0.06 since Wednesday, 26 January, Reuters)

EGX30 (Sunday): 5992,72 (+0.1%)
Turnover: EGP 524.3 mn (20% above the 90-day average)
EGX 30 year-to-date: -14.46%

THE MARKET ON SUNDAY: The EGX30, inched up 0.1% yesterday, with the top gainers being El Sewedy Electric, Juhayna and Eastern. The worst performers were Amer Group, Global Telecom and OTMT. Regionally, Dubai’s General Index was up 4.9%, Abu Dhabi’s General Index 3.7% and Saudi’s TASI 2.0%. At a market turnover of EGP 524.3 mn, local investors were the sole net buyers.

Foreigners: Net short | EGP – 7.9 mn
Regional: Net short | EGP – 38.4 mn
Domestic: Net long | EGP + 46.3 mn

Retail: 65.7% of total trades | 76.1% of buyers | 55.2% of sellers
Institutions: 34.3% of total trades | 23.9% of buyers | 44.8% of sellers

Foreign: 15.9% of total | 15.2% of buyers | 16.7% of sellers
Regional: 9.3% of total | 5.6% of buyers | 12.9% of sellers
Domestic: 74.8% of total | 79.2% of buyers | 70.4 of sellers


WTI: USD 33.28 (-1.01%)
Brent: USD 35.59 (-1.11%)
Gold: USD 1,117.80 / troy ounce (+0.13%)

TASI: 5,996.6 (+2.0%)
ADX: 4,054.4 (+3.7%)
DFM: 2,997.8 (+4.9%)
KSE Weighted Index: 353.4 (+2.5%)
QE: 9,481.3 (+2.3%)
MSM: 5,179.4 (+3.2%)

 

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. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank 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; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.