TL;DR

CIB said to accept OTMT’s final offer for CI Capital, Banque Misr reportedly lining up EGP 1 bn in acquisition finance. (Speed Round)

Car distributors stop taking new orders for select models as industry association warns of potential for foreign exodus (Speed Round)

Did Saudi give Egypt USD 1 bn in the past few days? (Speed Round)

GASC cancels yet another wheat tender, PM scraps new wheat subsidy program (Speed Round)

AfDB delegation pleased with progress in Egypt, commits to ramping up support. (Speed Round)

Mobinil will to become Orange next month? (Telecoms + ICT)

EGAS restarts Phase 9B talks + Shell in struggle to sell assets after BG acquisition. (Speed Round)

Netanyahu isn’t visiting Egypt — and may not have planned to in the first place. (Diplomacy + Foreign Trade)

Dana Gas net profit up, receivables and production from Egypt down. (Energy)

CBE gives EGPC USD 250 mn for LNG shipments + IOCs could pay contractors in EGP. (Energy)

Tax proceeds from Red Sea tourism down a whopping 80% + Italian bookings for summer plunge 90%. (Tourism)

By the Numbers

WHAT WE’RE TRACKING TODAY

Shell and BG Group officially merge today, facing a new battle to dispose of USD 30 bn in assets over the next three years as the industry’s very business model comes into question for some. (More in Speed Round, below).

The World Refining Association will hold the Egypt Downstream Summit & Exhibition today and tomorrow under the auspices of Oil Minister Tarek El Molla. The focus will be on expanding the nation’s refining and petrochemical export capacity.

WHAT WE’RE TRACKING THIS WEEK

The Egypt Energy Investment Summit runs 16-18 February (Tues-Thurs) at the Nile Ritz-Carlton, Cairo.

The president of Gabon is visiting Egypt from 17-19 (Weds-Fri) February ahead of the “Africa 2016: Business for Africa, Egypt and the World” conference taking place in Sharm El Sheikh on 20-21 February (Saturday and Sunday). Egypt, Ethiopia, and Sudan are set to meet for GERD talks on the sidelines of the conference, according to a statement from the Foreign Ministry. Foreign Minister Sameh Shoukry held discussions in Munich with Ethiopian counterpart Tedros Adhanom in preparation for the mini-summit, according to the statement.

Sometime this week, the Egyptian Capital Market Association will meet to talk bailouts for brokerages taking a hit from low trading volumes.

The Egypt Petroleum Show is ongoing this week at the Cairo International Convention Centre, Nasr City, under the auspices of the Ministry of Petroleum, and is set to conclude tomorrow.

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LAST NIGHT’S TALK SHOWS

It was a busy night for CBC Egypt’s Lamees El Hadidy, who fielded calls from former Capital Markets Authority chief Hani Sarie El Din, aired footage of a short interview with Oil Minister Tarek El Molla, and had an in-studio interview with Planning Minister Ashraf El Arabi.

Sarie El Din called in to give the general message the country is suffering from a lack of mechanisms to achieve national goals. He cited unemployment as an example where there is a clear intention to tackle the problem, but the issue remains one of implementation. He also noted a general problem with the budget deficit and dwindling foreign reserves, issues which he says require tough measures as well as transparency and public buy-in. (Watch in Arabic, running time: 4:48)

El Hadidy then aired footage of an interview with Minister of Petroleum Tarek El Molla from the Egypt Petroleum Show, with the segue that Egypt’s approach to its energy needs is an example of the government making good on its publicly-stated goals and execution. El Molla briefly discusses Egypt’s outstanding bill to IOCs, explaining the amount owed has gone up and down despite the government’s efforts to pay the debt down. El Molla also briefly explains that while lower oil prices are a boon for the state with regard to a lower subsidy bill, current prices make further investments in the oil and gas sector less rewarding for the oil companies. (Watch in Arabic, running time: 3:54)

El Hadidy talks with Planning Minister Ashraf El Arabi on the government’s program: El Hadidy then spent the bulk of her program hosting Minister of Planning Ashraf El Arabi in the studio, where the two discussed the government’s program set to be submitted to the House of Representatives, likely by the end of this month, as framed by El Hadidy.

But first, a brief message to remind viewers of the unbearably-awful state of our media: Immediately after introducing the minister and before beginning the interview, El Hadidy (or perhaps her producers) exhibited some questionable judgment by taking that particular moment to once again reiterate CBC Egypt’s statement regarding the 15-day suspension of her colleague and fellow presenter Khairy Ramadan’s often-trashy program. The statement takes meticulous care to extol the virtues of The People of Upper Egypt, “the source of the country’s dignity,” according to the statement.

The suspension has been ordered by the Chamber of Audiovisual Media while it investigates a segment from Ramadan’s program that originally aired two months ago and that has since gone viral. Setting aside the unspoken question as to just how one goes about investigating a television episode as if it were a crime scene, the episode in question involved Ramadan hosting in his studio some random who runs a Facebook page for Desperate House Husbands to anonymously complain about their wives, especially their alleged infidelities. The page’s admin, who speaks like a Cairo taxi driver, claimed on Ramadan’s program that a large number of women in Upper Egypt, as well as Egyptian women abroad, are unfaithful to their husbands, based on the stories relayed to him through his page. Any time one hears that Khairy Ramadan of all people has gone viral, it’s a good indication that something is terribly amiss, and the episode in question naturally generated an enormous amount of backlash from Upper Egyptians. When Egyptians often complain about the quality of our media, examples such as this are at least part of what they we’re referring to: sensationalistic smearing of individuals and entire groups of people simply for the attention it brings, i.e. Reham El Saeed’s raison d’être. (Watch the trashy segment in question that started it all, Arabic, running time: 5:34)

We now return you to your regularly-scheduled programming: El Hadidy’s interview with Minister of Planning Ashraf El Arabi began by his admission that the Civil Service Act’s recent defeat in the House of Representatives came as a surprise. That said: Rumors at the time that he submitted his resignation over the bill’s defeat were untrue. El Arabi went on to say an amended version of the bill was submitted to the House on Friday, where it will be reviewed and where El Arabi hopes it will be examined by a committee solely dedicated to the task. El Hadidy also used the opportunity to hold the minister to account for the difficult operating conditions facing the private sector, as well as a number of state-supported initiatives — everything from support of SMEs to going so far as saying the “one-stop investment shop” has not been effectively implemented. (Watch in Arabic, running time: 36:54)

Ibrahim Eissa on Al Kahera Wal Nas questioned what is actually meant when Egypt is referred to as a “modern, civil state.” Eissa said a modern state does not ask its citizens to endure police brutality or imprisonment for the sake of the country. He said we are instead heading in the opposite direction, laying the foundation of an autocratic-religious state, one in only Al Azhar may comment on religion; one in which all political issues are deferred to the presidency; and all security matters to the security establishment. (Watch in Arabic, running time: 2:22)

Another worthwhile segment was Eissa’s top ten factors behind the unprecedented turnout of thousands of doctors to the Egyptian Medical Syndicate’s emergency session, which we noted in yesterday’s issue. The syndicate’s complaints demands initially covered an instance of alleged police assault against doctors at Matareya Teaching Hospital and since grown to include calls for the sacking of the health minister. Of particular note: #7, the Matareya incident could have been handled correctly swiftly in the first place, but instead was further compounded by the alleged subsequent actions of the police. (Watch in Arabic, running time: 10:42)

SPEED ROUND

CIB has accepted Orascom Telecom Media and Technology’s (OTMT) final offer to acquire CI Capital, according to unnamed sources speaking to Reuters. “Sawiris made an initial offer worth [EGP] 910 mn [USD 116.22 mn] but in the final offer he made today the deal was worth a little more than that,” one of the sources said. Al Mal, meanwhile, says that it’s been told the final sticker price was EGP 940 mn and that OTMT is looking for financing to cover up to 40% of the acquisition price. Banque Misr is preparing an EGP 1 bn syndicated facility to finance the acquisition, another unnamed source tells Al Shorouk. Yesterday we noted OTMT had given word they would be submitting their binding offer for 100% of CI Capital’s shares in a disclosure (pdf) to the EGX.

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National mega-projects aren’t causing the FX squeeze, Investment Minister Ashraf Salman says, according to Al Mal. Only USD 1 bn was used in the Suez Canal expansion project to buy new equipment, he explains, and the machinery imported is being reused in the road network expansion project. Salman also expects the first tranche of the loan from the World Bank Group (WBG) to arrive imminently, given it was approved by the bank’s board. However, a separate source tells Al Mal that the government is withholding approving the loan agreement until it presents its reform program to the House of Representatives. The source explains that while the WBG has approved the loan and Egypt’s proposed reforms, the government is yet to begin implementing its program and has opted to not commit to receiving the funds before obtaining parliamentary approval.

Saudi Arabia gave Egypt USD 1 bn in the “past few days,” anonymous sources tell Al Mal. The sources did not specify the nature of the funds or give further details.

Ten automotive distributors have stopped taking new orders for high-demand products until further notice, Al Mal reports. The FX shortage has caused waiting lists to expand to almost a year, says El Masria Auto Chairman Shady Rayan, pointing out that distributors of both Mercedes and Jeep vehicles are among those no longer accepting new orders for many models. Others include local distributors of Volkswagen, Seat, Nissan, Honda, Toyota, Suzuki, Kia and Hyundai cars, each of whom has stopped taking orders for at least one model. Giza National Automotive, an authorized Mercedes dealer, expects its sales to drop by up to 50%, according to its GM, Yousri Ismail. Among the models for which new orders are not presently being taken, Al Mal says, are the Volkswagen Jetta, Jeep Renegade and Grand Cherokee, and Toyota Corolla. Al Mal has a JPG of the full list of car models for which distributors are no longer accepting reservations.

Auto industry gets no love from gov’t: The FX crisis could drive foreign players out of the Egyptian market, says the head of the Egyptian Auto Manufacturing Association (EAMA) Hussein Mustafa. He says GM closing its local assembly plant for a week sent a chill through the industry. EAMA had requested a crisis meeting with CBE Governor Tarek Amer to discuss the possibility of an initiative to make FX available to the industry, Mustafa tells Al Mal. Meanwhile, Adel Badeer,  head of the Transportation Manufacturers Division of the Federation of Egyptian Industries, complained that government officials he’s spoken to have washed their hands of the auto industry crisis. Badeer had contacted numerous government officials looking for support on ensuring LCs are processed in a timely manner, saying requests are taking two to three months in light of import restrictions that prioritize “essential goods.” The slowdown, he says, “is affecting assemblers and car importers alike.”

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Here we go again: After extending the deadline from Saturday, GASC cancelled yet another wheat tender on Sunday without giving a reason, “signaling that a weeks-long row with traders over shipping requirements hasn’t been resolved,” according to Bloomberg.

Prime Minister Sherif Ismail appears to have scrapped the new wheat subsidy program and approved buying April’s harvest at EGP 420 per ardeb (1 ardeb = 5.62 U.S. bushels) at a meeting with the deputy speakers of the House, Al Borsa reports. The move contradicted statements made last week by Agriculture Minister Essam Fayed and Supply Minister Khaled Hanafy, who both attended the meeting with House representatives, that claimed the government had already begun dispersing the EGP 1,300 per feddan payment under the new wheat subsidy program, which they both championed. Hanafy had promised a week before that they would scrap the new system after it was shot down by the House Agriculture Committee. At the meeting, MPs hailing mostly from Upper Egypt and the Delta criticized the new program, which they say places farmers at the mercy of a select few importers. It is unclear whether the old system will remain in place for subsequent growing seasons. Ismail also made the rounds with MPs from Sinai, Matrouh, and the Red Sea on Sunday, reiterating his government’s commitment to cutting red tape and reducing bureaucratic hurdles facing investments, while urging them to remain patient, Al Mal reports.

The African Development Bank (AfDB) appears to be pleased with Egypt’s development plan and is willing to step-up support, according to an emailed statement. A delegation of seven executives from the bank ended yesterday an eight-day visit to Egypt. The delegation met with President Abdel Fattah El Sisi and International Cooperation Minister Sahar Nasr, whose “robust country strategy” is set to guide AfDB’s cooperation with Egypt over the next few years. During the meeting, Nasr cited the “increase of Egypt’s financial portfolio [to USD 3 bn from USD 700 mn], half of which is allocated to support the budget and the other half to high-priority projects such as power plants, sanitation and other utilities,” according to an Ittihadiya statement. “AfDB is committed to step up its support to Egypt as reforms are designed and implemented in the coming years,” according to bank spokesperson Hau Sing Tse.

Arafa Holding’s Baird Group signed a licensing agreement with Marqee Brands for the right to operate UK-based fashion label Ben Sherman, which would see Baird design, manufacture, and distribute clothes under the Ben Sherman brand in seven stores in the UK and Ireland, according to a statement from Arafa Holding.

“Demand for Egyptian land and property far outstrips supply — and is genuine and not speculative – making the market soar, even through challenging times,” SODIC’s Managing Director Magued Sherif tells The Worldfolio in an interview. Sherif believes Egypt is rapidly evolving and maturing, making this the right time to invest

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Given we’ve heard this about 15x before, we’re not holding our collective breath, but: Word in the domestic press is that Mobinil will rebrand as Orange next month. The company is said to already be working to renovate its distribution network and has plans to announce a new “smart customer service center,” which Al Masry Al Youm’s source at the company claims will be “the first of its kind in Egypt.”

EGAS restarts Phase 9B negotiations: EGAS chief Khaled Abdel Badie is restarting negotiations with BG Group and Petronas over their Phase 9B project, Al Borsa reports. Abdel Badie says ongoing talks are in progress to ensure a mutually acceptable resolution is reached, noting that current talks involve negotiations over the price of gas produced. BG Group had announced in December that it was delaying bringing the Phase 9B wells on stream to mid-2016 at the earliest as receivables from Egypt continued to increase.

As expected, EGAS and EGPC are appealing the arbitration ruling in favor of the Israel Electric Corporation (IEC), Al Masry Al Youm reports. The ruling ordered the Egyptian companies to pay IEC USD 1.76 bn in damages due to disruption in gas supplies.

Shell faces USD 30 bn battle to sell assets after BG takeover: Shell is set to complete the takeover of BG Group today, facing a new battle to sell USD 30 bn in assets over the next three years as the oil market downturn drags on, reports the Telegraph. The GBP 35 bn (USD 50.77 bn) mega-merger was proposed well before the 70% collapse in the oil market slashed value across the sector, and Shell is under pressure to push through the disposals to maintain shareholder dividends even as profits plummet. In 2015, Shell reported its sharpest income decline in 13 years, with sales falling 97%, cutting profits 56% compared to 2014. Allianz Global Investors energy boss Chris Wheaton says Shell will only be able to sell off its oil and gas production assets to contribute at most 10% of the USD 30 bn total.

Only nine of 230 large oil and gas projects “awaiting a green light worldwide are ‘realistic candidates’ for approval this year,” the Financial Times writes, citing projections from Morgan Stanley as the paper suggests the industry’s business model is in question. Relax: Eni’s Zohr field is on the short list. “Companies that put their hopes in a strong rebound in oil ‘aren’t going to make it,” the newspaper writes, noting, “When executives from the large oil companies talk about the industry downturn, they generally frame it as a temporary condition. Because crude at below USD 30 per barrel is much too low to incentivise investment, they say, the oversupply in the oil market will correct, and prices will rebound to levels that will allow them to make respectable returns again.”

You most likely took your significant other out to Valentine’s Day dinner yesterday, braving horrid set menus, cheesy themes and bad floral decor galore as the price of not spending the night in the dog house, the MasterCard Love Index predicts. (Well, MasterCard predicts you went to dinner. The snark is on us.) Restaurants accounted for the largest share of transactions in Egypt on Valentine’s Day at 49%, even though it registered only 13% of total Valentine’s spending. Cards are beating flowers as well, with 4% of people buying cards compared to 1% buying flowers, according to the index. Regionally, Middle Easterners were found to be more likely to spend money on jewellery than any other region. They’re also spending more on travel and cards.

THE MACRO PICTURE

All eyes will be on mainland Chinese markets today as they reopen after a weeklong lunar new year holiday, Bloomberg reports. And since the markets were off during last week’s global turbulence, it looks like China isn’t squarely to blame for global volatility. Governor of the People’s Bank of China Zhou Xiaochuan chose a critical time over the weekend to clarify Beijing’s exchange rate strategy, the FT (paywall) reports. In an interview with Caixin magazine, Zhou dismissed speculation that Beijing would tighten capital controls and stressed that Beijing’s strategy did not include further devaluations to boost exports. “The bank will use a basket of currencies as a reference and appropriately manage any daily volatility in the renminbi against the dollar as well as using a wider range of economic data,” he said, adding that there “is no basis for devaluation.”

Also likely to drive markets this week: The U.S. Federal Reserve will release minutes of its January meeting on Wednesday. Expect them to be carefully scrutinized, with the Fed saying it has faith in the strength of the underlying U.S. economy just as markets continue to signal they think there’s risk of inflation. Also on Wednesday: U.S. industrial production data is due out, and consumer price index data will be out on Friday.

EGYPT IN THE NEWS

Egypt made brief appearances in a couple of stories yesterday, both to do with Israel.

In a rare move, Israeli Prime Minister Benjamin Netanyahu testified to the Supreme Court to defend plans to develop the Leviathan field after opposition parties and non-government organizations filed petitions to block it, Reuters reports. It should begin production by 2020 to supply bns of dollars worth of gas to Egypt and Jordan (and, possibly, Turkey and Europe). Critics argue that the control of the country’s gas reserves by one consortium (Texas-based Noble Energy and Israel’s Delek Group) will limit competition and keep prices high.

Netanyahu and Palestinian President Mahmoud Abbas agreed to cooperate to compile an EU report on freezing the peace process, EU foreign policy chief Federica Mogherini on her blog over the weekend. “We have decided to immediately work together on a report, which will include recommendations for relaunching the two-state perspective … in coordination with the UN Security Council and with the main regional actors: Jordan, Egypt, Saudi Arabia – on the basis of the Arab Peace Initiative.”

Our tweet of the day: via @rafat “Every orientalist cliche about Muslim/Arab world, by an Arab, in NYT no less, for white knights gawk over.” Hit up the original tweet for the link to the source story, which includes a word in its title that the algorithms won’t allow us to use. We recommend taking blood pressure medication prior to reading the story.

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DIPLOMACY + FOREIGN TRADE

Egypt has reportedly cancelled a visit by Israeli Prime Minister Benjamin Netanyahu to Cairo in March on the heels of comments made by the Israeli Minister of Energy Yuval Steinitz that Egyptian security forces flooded Hamas tunnels at the request of the Israeli government, Artuz Sheva reports, citing what it said was a report in Saudi media. Egypt appears to be far from pleased at Steinitz’s comments that flooding the tunnels “is a good solution to the southern security issues. While it is not a solution for a border that continues for 60-70 kilometers, if Sisi did so it was partly because we asked him to.”

The Times of Israel, however, is reporting that Netanyahu wasn’t scheduled to visit Egypt at all, an assertion confirmed by Ofir Gendelman, the Israeli PM’s spokesman for Arab media in a tweet yesterday: “Reports published today in the Arab media that claim that PM Netanyahu planned to visit Egypt soon are incorrect.”

President Abdel Fattah El Sisi met yesterday with a delegation from the US Atlantic Council that included former U.S. Secretary of State Madeleine Albright, former National Security Advisor Stephen Hadley, former U.S. Ambassador to Egypt Francis Ricciardone, and a number of researchers, according to an Ittihadiya statement. The meeting as the council works on recommendations for the next US administration on ways to deal with policy challenges in the Mideast. El Sisi reviewed domestic developments with the delegation and said “the completion of the legislative and constitutional frameworks concludes the transitional period.”

A Malaysian business delegation expressed interest in opening a Malaysian industrial zone in the Suez Canal Development Area following a meeting with the Suez Canal Development Area’s head Ahmed Darwish, Al Borsa reports.

ENERGY

Dana Gas increases net profit, decreases receivables, production from Egypt  
Dana Gas’ full year 2015 net profit increased 15% to USD 144 mn, the company announced. “The fall in revenue and gross profit was directly attributable to the sharp decline in world oil prices last year, as well as a 15% production decline in Egypt,” according to the press release. CEO Patrick Allman-Ward expects to see increases in production levels and resulting cash flows, particularly in Egypt. During the year, Dana Gas’ proven reserves in Egypt increased 41% to 83 mn barrels of oil equivalent. (Read)

IOCs negotiate paying contractors in EGP
International oil companies are negotiating paying service contractors in EGP instead of foreign currency or decreasing the contracted amount to be paid in foreign currency to 40% from 60%, Al Mal reports. The negotiations are underway due to the current USD shortage on the market, says SDX Energy (formerly Sea Dragon Energy Inc.) country manager Ahmed Moaz. The current FX shortage restricts the operations of small- and medium-sized companies, while limiting the growth of larger companies, he explains. (Read in Arabic)

CBE provides USD 250 mn to EGPC for LNG shipments
The CBE has allocated USD 250 mn to LNG shipments imported by EGPC, sources tell Al Borsa. The CBE will provide financing for eight LNG shipments, the source adds. EGPC requires around USD 700 mn monthly to provide total market demand for petroleum products and natural gas. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Egyptian food producers to gain from increase in halal food demand
“Egypt’s food and beverage industry is looking to expand its worldwide export footprint and leverage growing demand for halal products,” writes the Saudi Gazette, noting the participation of 167 Egyptian companies in the 21st edition of Gulfood in Dubai. Egyptian producers are well placed to seize the demand momentum for halal produce, a senior VP at Dubai World Trade Centre said. “New Egyptian product areas are emerging … For instance, meat and seafood preparations are Egypt’s fastest-growing export category, soaring 805% between 2010 and 2014 to reach [USD 8.8 mn]. The country is also gaining a foothold with cocoa exports, which are up 238% over the same period to [USD 148.5 mn].” (Read)

MANUFACTURING

Time to remove price controls on fertilizers, feedstock prices, says Abu Qir Fertilizers Chairman
The increasing cost of gas to fertilizer factories without a subsequent increase in the price of subsidized fertilizers caused AlexFert to operate for only four months last year, says head of the AlexFert independent union Saeed Ezz El Din. AlexFert was hit by reduced earnings at Abu Qir Fertilizers, a 15% stakeholder in AlexFert, according to Abu Qir Fertilizers chairman Saad Abo El Maaty. This is a good time to remove price controls on fertilizers and feedstock inputs, he adds, especially with the increase in supply to 24 mn tons when market demand is only 9.5 mn tons. (Read in Arabic)

REAL ESTATE + HOUSING

Deputy Housing Minister’s role in developing informal settlements expands
Housing Minister Mustafa Madbouly issued a decision expanding the policy-making role of his deputy in charge of informal settlements. Beyond developing policies and strategies, his role will now include zoning, licensing, and approving developments in neighborhoods classified as informal settlements. His responsibilities have been expanded to ensure residents have access to healthcare and basic goods and services Al Shorouk reports. (Read in Arabic)

TOURISM

German tour operators cancel flights to Marsa Alam, reroute to UAE destinations
German tour operators cancelled charter flights to Marsa Alam and rerouted them to Ras Al Khaimah, the UAE instead due to maintenance at the airport. Sources tell Al Shorouk that German tour operators were not notified that privately owned Marsa Alam Airport was undergoing maintenance. They’ve subsequently halted incoming flights on Mondays and Friday for the next three months. Al Shorouk also reports that Egyptian tour operators have been marketing UAE destinations as an alternative to Egyptian ones to limit their losses from relying entirely on Egyptian tourism. (Read in Arabic)

TDA leans toward suspending campaign in Italy after Regeni murder
The Tourism Development Authority is leaning toward suspending a promotional tourism campaign in Italy for one month until the results of the investigation into the murder of graduate student Giulio Regeni are revealed, Tourism Ministry sources tell Al Borsa. The decision follows a request by Tourism Ministry offices in Italy. JWT, which was contracted to launch the campaign, had no comment. (Read in Arabic)

Italian tourism bookings next summer season down 90%, says TDA
Bookings in Egypt by Italian tourists for the next summer season are down 90% compared to last year, according to the head of Foreign Tourism at the Tourism Development Authority Mohamed Abdel Gabbar. The authority has contracted Italian tourism company Meridiana to facilitate a weekly charter flight to Sharm El Sheikh from Milan as of March at EUR 112 per ticket and to add an additional flight in May at EUR 240 per ticket, he adds. (Read in Arabic)

Proceeds from tax on tourism activity in the Red Sea down 80%
Egypt has collected 80% less tax proceeds from tourism in the Red Sea since Russia halted flights to Egypt, Al Masry Al Youm reports. Occupancy rates across Red Sea resorts are very weak, the head of tax collection in the area said. He notes that EGP 12 mn in tourism tax proceeds were collected each month prior to the downturn. (Read in Arabic)

HOTAC looking to form joint stock company with NIB for Continental Hotel renovations
The Holding Company for Tourism, Hotels and Cinemas (HOTAC) is studying forming a joint stock company with the National Investment Bank (NIB) and the Egyptian General Company for Tourism & Hotels (EGOTH) to participate in the Continental Hotel renovations, according to company HOTAC Chairman Mervat Hataba. The cost of the development and renovations is estimated at around EGP 1 bn, she adds. EGOTH’s participation will include the land and building, while HOTAC and NIB have yet to decide on their financial share, according to EGOTH chairman Samir Hassan. EGOTH is waiting for demolition approval and financial compensation for store owners, he adds. (Read in Arabic)

TELECOMS + ICT

Telecom Egypt to invest in submarine cables every two years, says deputy CIT minister
Telecom Egypt (TE) is looking to invest in submarine communications cables, or a related industry, every two years, according to ICT deputy minister and TE board member Khaled Sherif. The current investments in the field are “satisfactory” and provide FX liquidity, he adds. TE recently established a subsidiary company in Singapore to expand in international services, says Sherif. This is the second company specializing in submarine communications after TE France was established to manage the TE North cable connecting Egypt to France, he adds. (Read in Arabic)

Vodafone launches Ready Business Meter in Egypt
Nervous about the performance of your business? How nervous? If it’s anything close to this young lady (run time: 0:23), then for the love God, get Vodafone’s new Ready Business Meter service, which has made its debut in Egypt. The business consulting service assesses the performance of businesses through user data, after which a Vodafone Business consulting team arrives to provide solutions, Al Mal reports.

BANKING + FINANCE

CBE considers expanding mortgage finance initiative to more expensive units
The CBE is considering expanding its mortgage-finance support initiative to more expensive houses, Al Borsa says. The CBE is assessing expanding the credit limit granted to over EGP 500k while increasing the interest rates to more than the current program’s cap of 8%. Sources say a number of banks, including NBE and Banque Misr, have agreed to increase the cap on financing to EGP 700k per client, if liquidity is made available. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

First phase of Giza Pyramids development project to cost EGP 51 mn
The first phase of the project to develop the Giza Pyramids area will cost EGP 51 mn, Al Borsa reports. The phase will involve setting up an on-site visitors’ center and opening a new entrance to the site on via the Fayoum road. Previous reports estimated the project is set to cost EGP 500 mn in total. (Read in Arabic)

LEGISLATION + POLICY

Efforts intensify to complete electronic payment, signing systems to establish companies, says investment minister
The Investment Ministry and the General Authority for Investments (GAFI) have intensified efforts to complete linking all government offices required to establish a company electronically, according to Investment Minister Ashraf Salman. The most recently connected office was the Social Solidarity Ministry’s social security office, he adds. The ministry is currently in talks with other government bodies to activate the electronic payment and signing systems to let investors to establish companies without visiting any GAFI branches. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Customs Authority meets with importers to discuss tariff hikes
Customs Authority chief Magdy Abdel Aziz defended the recent tariff hikes on 600 goods in a forum hosted by Al Borsa that included importers and traders. He criticized the IMF-mandated tariff reductions in 2008, implying that importers had been relying on a tariff reduction system that did not benefit Egypt and needed to change. He also criticized importers for price gouging and called on them to lower prices on goods. Importers at the meeting countered that the government’s policies are driving many of them to forge receipts to reduce tariffs. They also criticized the tariff policy as being non-inclusive and said it does not take importers’ needs into account. (Read in Arabic)

Prime Minister sets deadline to draft law forming food safety authority
Prime Minister Sherif Ismail set a deadline of 24 February for the cabinet’s services group to complete drafting a law forming and organizing a national food safety authority. The cabinet will hold a meeting on the law on the same day and send it to the Council of State before introducing the legislation to the House of Representatives. He also urged the ministers to pick up the pace of development of infrastructure, tourism, and environmental projects in outlying governorates, Al Mal reports.

Interior Minister lashes out against criticism of police service
Interior Minister Magdy Abdel Ghaffar chided critics as he opened the new Cairo Security Directorate building: “We are playing into our enemies’ hands by using the actions of a few misguided officers to attack the whole police institution,” said Abdel Ghaffar. The Interior Ministry has been under heavy criticism over the past month as a result of an alleged assault of doctors at the Matariya Hospital, accusations of involvement in the disappearance and murder of Giulio Regeni, and for the multiple cases of the forced disappearances of activists. (Read in Arabic)

Arab Organization for Industrialization mulls Egyptian industrial zone in Iraq
The Arab Organization for Industrialization (AOI) is looking into establishing an Egyptian industrial zone in Iraq, the organization announced in a conference with the Iraqi industry minister. The minister is visiting Egypt and AOI facilities as part of an Iraqi delegation. (Read in Arabic)

Finance Ministry planning new benefits, incentives for SMEs
The Finance Ministry is studying a new set of incentives and benefits to facilitate SME funding, Assistant Finance Minister Mohamed Moeit tells Al Masry Al Youm. These include easier payment terms on loans at reduced interest and extending social welfare benefits and tax breaks. (Read in Arabic)

ON YOUR WAY OUT

A court reversed the 15-year prison sentence handed to a police officer for killing activist Shaimaa Sabbagh during a march in January 2015, Reuters reports. The police officer will now face retrial.

Middle East e-commerce site Wadi.com raised USD 67 mn in Series A financing from a group of investors led by Saudi’s Al Tayyar Group in what Al Borsa is reporting is one of the largest Series A funding for an e-commerce company in the region. Wadi.com, a JV between Rocket Internet and MTN and backed by the Middle East Internet Group, was founded 10 months ago and operates an online marketplace platform that sells and delivers over 150k products in the UAE and Saudi Arabia. The funding should see Wadi leverage Al Tayyar Group’s logistics network to grow its shipping capabilities, according to Al Tayyar’s CEO Abdullah Bin Naser Al Dowad.

The Egyptian Business Association (EBA) and Unicef are partnering to launch a sustainable development corporate social responsibility (CSR) initiative, says head of the EBA’s CSR committee Nivine Abdel Khaleq, AMAY reports.