Tuesday, 16 February 2016

Rock bottom? The pound slides to 9.00 against the greenback.

TL;DR

CBE raises USD deposit cap for exporters to USD 1 mn a month. (Speed Round)

EGP sinks to 9.00 against the USD in the parallel market. (Speed Round)

Banks are tightening limits on FX for travelers. (Speed Round)

Amid FX shortage, Egypt rejects soybean cargos for ambrosia fungus. (Speed Round)
Is a cabinet shuffle in the offing? Also: What’s on Ismail’s agenda for his address to the House. (Speed Round)

CIB accepts OTMT’s EGP 924 mn offer to acquire CI Capital; Beltone says it’s advising on M&A transactions worth more than EGP 60 bn  (Speed Round)

AfDB plans over USD 700 mn in development financing for Egypt this year. (Speed Round)

WBG to sign USD 500 mn Upper Egypt development loan agreement by year-end. (Egypt Politics + Economics)

Eni has already invested USD 4 bn to develop first phase Zohr gas field; Edison could make a Zohr-sized discovery soon. (Speed Round)

By the Numbers

WHAT WE’RE TRACKING TODAY

The Egypt Energy Investment Summit kicks off today at the Nile Ritz-Carlton, Cairo.

For those of you interested, the Grammys were still being broadcast as we prepared to dispatch. The New York Times has live coverage here.

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WHAT WE’RE TRACKING THIS WEEK

It’s all Africa, all the time heading into the weekend, with heads of state and members of cabinet from Egypt and across the continent descending on Sharm El-Sheikh for “Africa 2016: Business for Africa, Egypt and the World” running Saturday and Sunday (20-21 February) . Egypt, Ethiopia, and Sudan are set to meet for GERD talks on the sidelines of the conference.

ON THE HORIZON

Next week is looking packed already, with several conferences in the works:

  • 23-24 February: The fifth Euromoney GCC Financial Forum takes place at the Four Seasons Manama in Bahrain (press release here, conference website here).
  • 22-24 February: The Suez Canal Global Conference is being held at the JW Marriott Hotel.
  • 24 February: N Gage is holding its Customs Debates 2016 at the Four Seasons Nile Plaza.
  • The official opening of the Port Said side channel has been set for Wednesday, 24 February and will be attended by Prime Minister Sherif Ismail, according to head of the Suez Canal Authority Mohab Mamish. A number of projects in the Suez Canal Development Axis are being prepared to showcase during French President Francois Hollande’s visit in April, Al Masry Al Youm reports.

Prime Minister Sherif Ismail will present his government’s agenda to the House of Representatives in either late February or early March. AMAY says 27 February, citing a senior government source, but state news agency MENA said yesterday it would be later this month or early next, Ahram Online reports.

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LAST NIGHT’S TALK SHOWS

Permission to treat the witness as hostile? Lamees El Hadidy was at her passive aggressive best in her in-studio interview with Minister of Health Ahmed Emad, with whom she was visibly displeased for showing up late. “Is this because doctors are always late, or just ministers?” He replied the television program he was on immediately prior to hers went overtime. El Hadidy v Emad, 1-1.

El Hadidy questioned the minister on his perceived lack of involvement in the Doctors Syndicate’s ongoing dispute regarding the closure of Matariya Teaching Hospital after the alleged assault of two of its doctors by non-commissioned police officers seeking treatment. The syndicate’s demands have escalated in recent days to include everything from refusing the privatization of healthcare to Emad’s sacking from the ministry. In response to El Hadidy’s questioning, the minister rejected the notion that he didn’t agree to meet with the Syndicate, saying he invited them to meet and they refused. He then insisted he was not accountable to the Syndicate but only to the House of Representatives.

Emad also rejected that he agreed with the doctors’ decision to drop charges against their assailants, explaining “Doctors are afraid to spend the night in prison, that’s why they dropped the charges.” (The physicians in question were told by police they would have to spend the night at Matariya police station if they wished to pursue the case.) Despite the minister’s statement, which El Hadidy mentioned repeatedly, that the Syndicate’s decision to close down the hospital was harmful to the state, Emad was overall supportive of the position that doctors face workplace safety and security issues, “especially since 2011,” he noted. Emad said his plan is to install security cameras in every hospital as well as a permanent police presence; the Interior Minister is backing those moves, he said.

El Hadidy then gave Emad the full Egyptian talk show treatment by exposing him to Egyptians screaming at the tops of their lungs calling in to the program. One anomalous, reasonable-sounding individual called in to ask perhaps what El Hadidy and the health minister both had on their minds but were themselves unable to ask: Why is the health minister being held to account for the incident at Matariya Hospital and not the Minister of Interior? The question went unanswered. At other times, CBC showed a splitscreen with Emad speaking about recent improvements to public hospitals on one side while the other half of the screen aired footage of state hospitals in various states of disrepair.

Under questioning from El Hadidy, the health minister admitted there are 189 types of medicines currently unavailable in medical facilities — there are some more costly alternatives, but the ministry is working on a long term plan to get medicine back on the shelves without price increases.

El Hadidy closed the segment by making sure to get in her last dig at the minister: “Again, we wanted to have you with us for a longer amount of time, but you were late.”

Ibrahim Eissa on Al Kahera Wal Nas hosted two pundits discussing their expectations for Prime Minister Sherif Ismail’s program, which is due to be presented to the House of Representatives in the coming weeks. His guests included political researcher and popular talk show fixture Ahmed Kamal Beheiry, as well as Mohamed Zaki El Shimy, a member of the training and political education secretariat at the Free Egyptians Party.

Beheiry said he expected the prime minister would hit the basics — security, economy, politics, the media — while El Shimy said Ismail should get into and commit to specific targets on unpopular measures, such as the lifting of energy subsidies.

Eissa disagreed, saying “Do you really think the Prime Minister is going to get up there and say ‘I’m going to increase the price of electricity by so-and-so,’ again, and get into all the things they are going to raise prices on? I’d be surprised if his program receives 15 votes.”

El Shimy: “But the government is supposed to present its program with transparency … but if they just don’t want to so as not to upset people, that isn’t the right way-”

Eissa interjected: “He can go over it in broad strokes, but not get into detail so people don’t … [trails off]”

El Shimy: “If that happened and it works, I’ll applaud the government,” he said laughing. “As long as it gets done.”

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SPEED ROUND

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The Central Bank of Egypt has raised its cap on USD deposits by exporters to USD 1 mn a month as the FX shortage continues to cripple manufacturers’ ability to import production inputs, some of which are languishing at customs, Reuters quotes a central bank statement as saying. The statement, which Reuters corroborated with a CBE official, was sent to the newswire by a market source and has yet to be published on the CBE’s website. Al Borsa has what appears to be photographs of the statement. The CBE directive appears to set three conditions:

  • Deposits must be in line with the value of the imports the depositor handles;
  • The depositor has three months to produce receipts proving it exported goods or services at least equivalent to the value deposited;
  • Companies that fail to comply with the conditions could be black-listed in the banking sector.

The decision came after the EGP hit a fresh low against the USD on the parallel market, going for EGP 9 to USD 1, Reuters reports. “There is a huge rush over [USD] amidst weak supply on the part of exchange [bureaux]. People want to keep their [USD] as the crisis worsens,” one trader said. The official CBE auction rate remained unchanged at USD 1 per EGP 7.73. Importers have placed the blame for the drop squarely on the shoulders of the foreign currency exchanges, with the head of the Cairo Chamber of Commerce’s Importers Division, Ahmed Sheeha. say speculation on the parallel market is to blame, Al Borsa reports.

Meanwhile, the central bank appears to be tightening controls on the parallel market, conducting spot inspections at exchange offices to ensure they’re not dealing in the parallel market following the EGP’s plunge to 9 against the greenback, Al Masry Al Youm reports. The CBE had warned the FX bureaux it would shutter exchanges if the parallel market rate exceeded EGP 8.65 to the USD 1. FX exchanges have failed to maintain that rate ever since.

Banks are once more lowering the cap on the USD clients can purchase prior to traveling and limiting what they can spend abroad from EGP accounts using credit and debit cards, a review by Al Mal shows. HSBC-Egypt reduced its limits by 75% in one push, limiting retail customers who provide proof of travel to only purchases of just USD 250, Advance customers to USD 750, and Premier customers to USD 1,250. National Bank of Egypt has reduced the limit it allows to travelers by a third to USD 1,000. CIB is reportedly leaving branches to set limits at their discretion, noting that applicants need to submit proof of travel documents (visa and plane ticket) five days in advance. Almost all banks have added extra charges for using credit cards abroad. Banks are also reaching out to their clients to inform them: A member of our team received an SMS from NBE notifying them of policy changes on pre-travel purchases of FX. Al Masry Al Youm quotes a banking source as saying that the central bank hasn’t dictated new restrictions on handing out foreign currency, but continues its policy to limit the amounts it makes available to travelers and to prioritize the needs of those travelling for education and medical treatment.

And if you thought we have it rough: Egypt is one of five countries being “squeezed by currency pegs,” Bloomberg’s Maria Levitov writes. The street rate “is a better reflection of where a market-based rate should be … [showing] how domestic participants and individuals really feel about their currencies,” chief emerging-markets strategist at Commerzbank AG says. Who is doing worse than us? Nigeria, where the parallel market premium is 70%, Uzbekistan, where i’s 110%, and Angola, where you actually pay 136% more to buy foreign currency on the parallel market.

In a move that again telegraphs the FX shortage, Egypt’s agricultural quarantine authority rejected four 30,000-ton cargos of U.S. soybean for higher-than-permitted levels the ambrosia fungus, traders tell Reuters. “This is very rare in soybeans to have rejections like this, and I haven’t seen it happen in this manner before,” President of Medstar for Trading Hesham Soliman tells the newswire. “Egypt really needs the soybean for vegetable oil, and this is a large quantity that cannot be replaced in a short period of time,” he adds. Egypt cancelled several wheat tenders as traders were wary after the country rejected a 63,000-ton French wheat shipment. The moves have prompted wide speculation that the decisions to reject cargoes has been prompted by FX constraints.


Tarek Amer likely received feedback on the decision to raise the USD deposit cap at the cabinet economic committee meeting held earlier yesterday. In brief:

  • Prime Minister Sherif Ismail stressed the importance of economic and monetary policy reforms to improve the investment climate and “implementing the investment map” for all governorates;
  • His government is focusing on large-scale infrastructure projects as part of its plan to ramp growth up to a targeted 5.5-6%;
  • Cabinet has ordered a study on the restructuring of the Holding Company for Land Reclamation;
  • The PM was presented with the steps taken to simplify the investment process, including the Unified Investment Act and its executive regulations, which include the one-stop-shop system and creating a single government body in charge of issuing land plots for investment. (Read in Arabic)

Reports of a cabinet shuffle have resurfaced again, with 10 ministers — including “half of the cabinet economic group” — said to be in line for the axe as Prime Minister Sherif Ismail prepares to present the national agenda to the House, according to an unnamed “high-ranking government official” speaking with Al Masry Al Youm. The PM is expected to detail on the value-added tax and the subsidy reform program. Ismail is also expected to announce cabinet is raising the prices of public services including water, transportation and sanitation. (AMAY’s source says Ismail will address the House on 27 February; state-news agency MENA says PM will appear in parliament in “late February” or “early March,” per a report picked up by Ahram Online.)

The story doesn’t name the “half” of the economic group that is said to be headed for what Enterprise’s token eight-year-old calls “the head chop.” It does, however, speculate that any one of the ministers of health, agriculture, education, irrigation, antiquities and religious endowments could be shuffled out in the month of March. Not going anywhere, it claims: the ministers of international cooperation, housing, and social solidarity. All four of the so-called “sovereign ministers” (defense, foreign affairs, interior and justice) are also secure in their positions, the newspaper’s source suggests, adding that a “government body” is now vetting replacements for the outgoing ministers.

Calls for a cabinet shuffle have risen amid mounting criticism that the cabinet economic group has lost momentum on the reform process and failed to stem the FX crisis. The Federation of Egyptian Chambers of Commerce called last week for a merger of the ministries of investment and trade and industry. The health minister is under fire from the Doctors’ Syndicate over the Matariya issue, while civil servants continue to demand the resignation of the finance and planning ministers over the Civil Service Act. Meanwhile, the investment ministry is seen as having failed to move the ball forward on the one-stop investment shop and is engaged in a running battle with both the housing and industry ministries on who gets to run land tenders.


CIB confirmed it has accepted a final offer made by Orascom Telecom Media and Technology (OTMT) to acquire CI Capital for EGP 924 mn. OTMT will merge CI Capital with Beltone Financial.

Beltone Financial is managing around 10 M&A deals valued at more than EGP 60 bn across six industries, CEO Bassem Azab tells Reuters’ Arabic service in an interview. Azab adds that the company is planning to grow its assets under management to EGP 50 bn from EGP 30 bn this year, hinting that it is a buyer’s market now. The company will issue at least two more ETFs in 2016, he adds.

Eni already invested USD 4 bn in developing the first phase of the Zohr gas field, an Egyptian official tells Reuters. The phase includes the drilling of four wells. In total, Eni is expected to invest USD 12-16 bn in the field.

… Speaking of Zohr, a source at EGAS tells Al Shorouk that Italian E&P company Edison could be announcing a Zohr-sized discovery soon. It is awaiting the completion of seismic mapping at its concession adjacent to Eni and is expected to announce its results in 2H2016. This is one of the potential developments we had in our 2015 in review series and something we’re keeping a close watch on.

The African Development Bank (AfDB) plans to provide Egypt with development financing in excess of USD 700 mn this year, the bank’s resident representative in Egypt, Leila Mokaddem, tells Al Borsa. AfDB representatives are meeting with officials from a number of ministries, including the International Cooperation, to draw up a short list of candidates for AfDB funding this year, Mokaddem adds. AfDB President Akinwumi Adesina is set to meet with President Abdel Fattah El Sisi at the Business for Africa Summit in Sharm El Sheikh next week to discuss further advancing the bank’s role in development projects. By Al Borsa’s calculations, Egypt stands to receive a total of USD 1.2 bn if the AfDB funding comes through and Egypt closes a USD 500 mn World Bank Group facility; the latter, it says, is on hold until the House approves the Ismail government’s agenda.

MOVES- The African Development Bank (AfDB) has appointed Kevin Chika Urama and Maria Mulindi as advisors to AfDB President Akinwumi Adesina, according to an emailed statement. Urama will be senior policy advisor to the president on inclusive and green growth and Mulindi will act as senior advisor for civil society and community-based organizations.

The national power grid is under tremendous strain and is barely able to handle its current daily load, Electricity Minister Mohamed Shaker tells Al Mal. He adds that the ministry is in talks with Siemens to build a parallel grid and is pressing ahead with an EGP 16 bn emergency transmission capacity build-up, Shaker adds. The minister had told Al Mal earlier that the State Grid Corporation of China has the go-ahead for the parallel grid project, which will be 1,210 km long and represents 40% of the current grid, with an investment value of EGP 5 bn.

Shell officially completed the acquisition of BG Group yesterday in a deal worth about USD 50 bn. Speaking from Brazil on Monday, Shell CEO Ben van Beurden said the combined company will be “more attractive for shareholders,” “more resilient” to fluctuating oil prices, and “more predictable” for investors, writes the Wall Street Journal. Beurden’s chosen location for the announcement spoke volumes as to the importance of Brazil in the oil and gas field. But while the country “holds 15 [bn] barrels of proved oil reserves, second only to Venezuela in South America,” the scandal surrounding Petrobras (Shell’s main partner in Brazil) and the country’s political climate create a variety of hurdles.

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

  • Glencore reviving its LNG desk, poaches Noble traders: Glencore hired LNG traders from Noble Group to step up competition with rival trading houses including Vitol SA and Trafigura Group, Bloomberg writes. “New importers from Egypt to Jordan and Pakistan boosted LNG demand at a time when purchases from the world’s biggest buyers in Asia is slowing. LNG supply rose by 4 [mn] metric tons to 250 [mn] tons last year, and another 125 [mn] tons is under development, according to Wood Mackenzie Ltd., an industry consultant,” Bloomberg notes.
  • HSBC is warning that if the UK leaves the EU, it would shift 1,000 investment banking jobs from London to Paris, the Guardian reports. After the bank said it was keeping its headquarters in London and not relocating to Hong Kong, Chairman Douglas Flint says the “best answer” is to remain in a reformed Europe.

THE MACRO PICTURE

After European banks experienced what seemed like a relentless selloff last week, European Central Bank President Mario Draghi said the bank will “not hesitate to act” if oil and commodity price drops — as well as the ability of banks to pass on the ECB’s monetary policy — entail downward risks to price stability, Bloomberg reports. The FT (paywall) also has coverage.

More bad news out of China, as trade contracted much more than economists had anticipated last month, the FT (paywall) reports. Exports dropped 11.2% y-o-y in USD terms compared to forecasts of a 3.6% decrease. “China’s economy is in a cyclical downturn but it will probably take structural reforms to get Chinese growth back,” says Credit Suisse economist in Hong Kong Dong Tao.

EGYPT IN THE NEWS

It could take 20-25 years to enshrine democracy in Egypt — a relatively short time frame, President Abdel Fattah El Sisi said in an interview in French magazine Jeune Afrique, AMAY reports. He added that development is an important precondition for democracy to flourish, stating that achieving development will require improving education, combatting poverty and corruption, and ensuring human rights. He stated that the government had set a deadline of 2020-2030 to achieve its development goals. And on the  political scene, the president stated that the Egyptian government is unlikely to hold talks with the Muslim Brotherhood, adding that the Egyptian people would not allow it. On international policy, the president said Egypt had not been critical of Turkey, but will refuse any interference in its domestic affairs. Channeling that thought into a question on a possible intervention in Libya, El Sisi stated that it would be unlikely if the Libyans were reluctant. The actual Jeune Afrique interview is due out on newsstands around now, but isn’t yet on the magazine’s website, which carries only a teaser.

The Giulio Regeni case made international headlines again yesterday after Italy pressed Egyptian authorities to speed up their investigation into the Italian student’s death, the Wall Street Journal reports. For its part, the Interior Ministry “dismissed reports in Western media that Giulio Regeni was arrested by Egyptian security before his death,” Ahram Online quotes an official from the ministry as saying. The BBC also got on the bandwagon.

The Regeni case plays a bit part in the Financial Times’ look at how Italian Prime Minister Matteo “Renzi’s luck runs out as problems mount at home and abroad.”

The BBC has picked up the Khairy Ramadan debacle yesterday. Ramadan’s show “Momken” was suspended after a clip of a December interview with a Facebook page admin went viral over the admin’s comments that  “almost 30% of women, especially in Upper Egypt, have the tendency to be unfaithful.”

Finally, from the Dear Idiots folder, we have this gem from contributors to the Wall Street Journal: “…nascent civil wars are catching fire in Turkey, Egypt and South Sudan” from a commentary on U.S. President Barack Obama’s “failing Middle East policy.”

DIPLOMACY + FOREIGN TRADE

President Abdel Fattah El Sisi will be accompanied on his trip to South Korea in early March by an Egyptian business delegation including the heads of 23 companies due to meet with their South Korean counterparts at a business forum. The president is set to meet with the Korean president, prime minister and speaker of the parliament on his trip, according to Trade and Industry Minister Tarek Kabil.

President Abdel Fattah El Sisi met Japanese MP and head of the Egyptian-Japanese Parliamentary Friendship Association Yuriko Koike yesterday to talk boosting cooperation between the two countries in the fields of education, renewable energy, and technology. Koike reiterated the importance of El Sisi’s Japan visit later this month in strengthening bilateral relations between the two countries on the political, economic, and parliamentary levels.

Investment Minister Ashraf Salman met yesterday with a delegation of Japanese companies operating in Egypt for talks about expanding their investments here. The delegation was made up of car, electronics, energy, food and financial service companies, Al Masry Al Youm reports.

El Sisi also met with Eritrean Foreign Affairs Minister Osman Saleh to discuss bilateral relations across various fields, according to an Ittihadiya statement.

Kuwaiti Foreign Minister Sheikh Sabah Ahmed El Sabah and the deputy prime minister arrived in Cairo yesterday to head a delegation taking part in the 11th round of talks of the Egyptian-Kuwaiti Cooperation Committee, Al Masry Al Youm reports.

The Saudi cabinet approved a custom and tariff cooperation agreement signed with Egypt, Al Borsa reports.

ENERGY

32 companies qualify for second BOO system solar power plant
32 bidders have qualified for a tender to build, own, and operate (BOO) a 200 MW, EUR 200 mn solar power plant in the West Nile area in Minya, Al Mal reports. Qualifiers include ACWA Solar, AlFanar Electric Division, and Electricite de France (EDF). The company that lands the project will own the plant for 20-25 years, with the Egyptian Electricity Transmission Company (EETC) buying the produced energy under the feed-in tariff program. EETC and the NREA will act as project consultants. (Read in Arabic)

Production begins at EGPC’s Iraq concession
EGPC has begun production from its concession in Iraq at a rate of 5,000 bbl per day, EGPC Chairman Mohamed El Masry tells Al Shorouk. EGPC had signed an agreement with Kuwait Energy and Dragon Oil for oil research, exploration, and production in Iraq last March. The agreement, EGPC’s first beyond Egypt’s borders, made it a partner with the two companies in their Block 9 of the Iraqi licence in Basra.

Saudi Arabia supplies Egypt with three months worth of fuel products
The agreement with Saudi Arabia to deliver Egypt fuel products only runs for three months at a time and ends in April, says EGPC VP for operations Amr Moustafa, denying claims of a five-year agreement. Each 800k-ton shipment costs Egypt around USD 500 mn, bringing the total for the three-month agreement to 2.4 mn tons worth USD 1.5 bn. (Read in Arabic)

INFRASTRUCTURE

New Sharm El Sheikh airport terminal project shelved as tourism flow falters
The Egyptian Airport Company has put on indefinite hold plans to build a USD 457 mn terminal at the Sharm El Sheikh airport until tourism activity normalizes, says Chairman Adel Mahgoub. The terminal would have increased the airport’s capacity to 18 mn passengers, he adds. The project is now contingent on Russia and the UK lifting their travel bans to Sharm El Sheikh. (Read in Arabic)

HEALTH + EDUCATION

Health sector the most attractive to foreign investors in 2016, analysts say
Egypt’s health sector remains the most attractive to foreign investors in 2016, businessmen and analysts tell Al Borsa. With over 10 acquisitions and capital topups last year, the lion’s share of which went to Abraaj, foreign investment is directed toward hospitals and labs because they have profit margins that average 25%, with medical supplies and cosmetics ranging between 10% and 16%, says Ridge Capital analyst Ahmed Abdel Ghani. (Read in Arabic)

REAL ESTATE + HOUSING

PHD to co-develop beachfront North Coast land plot
Palm Hills Developments (PHD) signed a co-development agreement on a revenue-sharing basis with private landowners for a 134.6 feddan land plot in the North Coast. The project is located in Ras El Hekma on the North Coast, 65 km west of Hacienda White 1, with a beachfront of 411 sqm, according to an emailed statement. The project will be developed over seven years, and PHD will be responsible for all construction, development, infrastructure, marketing, and sales activities. Estimated revenue from the project ranges between EGP 2.5 bn and EGP 3.0 bn, of which PHD is entitled to 80%.

TELECOMS + ICT

TE announces nationwide fiber optic cable installment at phone centers amid a turbulent year
Telecoms Egypt (TE) will replace outdated copper cables with fiber optic cables at 106 phone centers across Egypt, according to an announcement on the company’s Facebook page, Al Mal reports. The move is part of a three year plan to upgrade its telecom infrastructure, which will cost EGP 4.5 bn in 2016.

AUTOMOTIVE + TRANSPORTATION

Transport Ministry needs EGP 200 bn over four years, says minister
The Transport Ministry is set to complete its portion of the government agenda within two days, with EGP 200 bn in projects allotted for the next four years, says Transport Minister Saad El Geyoushi. Projects will be financed through joint investments, domestic loans, or foreign long-term loans with low interest, he adds, noting that the ministry needs EGP 5 bn in emergency funding to complete this fiscal year’s plan. (Read in Arabic)

Bus sales grow on the back of public transport overhaul program despite gov’t dithering on payments
Sales of buses in Egypt have grown 5.3% in 2015 to 32,600 units, up from 30,900 units in FY2014, Al Mal reports. Sales of locally assembled busses have also witnessed a growth of 20% in FY2015 to 15,600 buses, while sales of imported busses fell 5.4% to 16,900. Suzuki was the top selling bus, followed by Chevrolet and Toyota. GB Auto Egypt’s Michael Mokhtar attributes the growth in overall sales to the overhaul of public transportation buses by the government, while attributing growth in sales of domestically assembled models to local assemblers being prioritized in receiving letters of credit. Mokhtar expects sales to grow in 2016, as the public transportation overhaul program expands to other governorates. GB Auto won a tender to import 150 buses for the Greater Cairo Public transportation Authority. But be careful what you wish for, as the authority reportedly hasn’t paid the Egyptian Automotive Manufacturing Company (EAMCO-Egypt) EGP 25 mn it owes for a shipment of 150 buses, prompting the company to withhold 25 buses from the contracted amount, Al Mal reports.

Japan makes development, maintenance offer for First, Second Metro lines
The Transport Ministry received an offer from Japan to develop and maintain the First and Second Metro lines, according to Transport Minister Saad El Geyoushi. The ministry also received a Chinese offer to build the Fifth Metro line, he adds, noting that the first phase of the Haram Metro will be implemented at the start of next year. (Read in Arabic)

LEGISLATION + POLICY

Gov’t presents Labor Bill to parliament by March
The Manpower Ministry will finish drafting the new Labor Bill next week, according to Manpower Minister Gamal Sorour. The draft will then be presented to the cabinet before being taken to  parliament. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

Civil Service Act continues to be used, MPs allege
A member of the House of Representatives has tabled a motion to question Prime Minister Sherif Ismail on what the MP claims is the continued implementation of the Civil Service Act despite its rejection by the House of Representatives. Rep. Mohamed Al Sadat, leader of the Reform and Development Party, said the continued implementation of the act was a “dangerous violation of the constitution.” His motion follows complaints by other MPs that salaries and hiring policies were continuing under the tenets of the scrapped legislation, Al Mal reports. In late January, the government stated it would introduce a placeholder law in the House to keep salaries flowing, but has yet to do so. It would appear that the cabinet, unaccustomed to being challenged by the legislative branch and caught off guard by the rejection, has been leaning for a speedy reintroduction of the act with Planning Minister Ashraf Al Arabi announcing on Sunday that the amended legislation was submitted to the House last Friday for review. In an interview with Lamees El Hadidy (watch here — we covered it in yesterday’s issue), Al Arabi said the Manpower Committee, which initially rejected the act, sent a 20-point critique of the legislation, primarily attacking its provisions on penalties, complaints by workers, and the exemptions that it grants certain government bodies.

WBG to sign USD 500 mn Upper Egypt development loan agreement by year-end
The World Bank Group (WBG) will sign off on a USD 500 mn loan to finance the Upper Egypt development project by the end of 2016, a source tells Al Borsa. The procedures are taking a time to prepare an adequate development program for Upper Egypt, the source says. WBG will conduct three field visits to assess the needs of the area and set the program’s agenda. (Read in Arabic)

Investors Associations head calls on gov’t to fix prices of goods subject to tariff hikes
Head of the Union for Investors Associations Mohamed Fareed Khamis is calling on the government to fix the prices of goods subject to a recent tariff hike to guard against price gouging, Al Mal reports. Goods that seen tariffs raised can be sourced locally and should not experience major prices increase, argues Khamis. On another note, Khamis argued in favor of a wealth tax, citing a previous proposal to impose a 2% surtax on annual income over EGP 5 mn, a 5% tax on income over EGP 20 mn, and a 7% tax on income over EGP 50 mn. (Read in Arabic)

CAPMAS: unemployment reached 12.77% in 4Q2015
Total unemployment in Egypt reached 12.77% in 4Q2015, according to the latest figures from CAPMAS, published in Al Borsa. Total youth unemployment, classified as those aged between 15  and 29, grew to 27.6%. (Read in Arabic)

Parliament completes drafting bylaws
The House of Representatives’ Parliamentary Affairs Committee has concluded and released the House’s bylaws. Among the most prominent clauses of the bylaws was increasing the number of legislative committees to 28 from 19. These include committees on ICT, SMEs, African affairs, anti-corruption, higher education, and social affairs.

Alexandria Court looks into removing Hisham Geneina from office
An Alexandria court will begin looking into a case for removing Hisham Geneina from his position as head of the Central Auditing Organization for making statements that “threaten national security,” Al Mal reports.

ON YOUR WAY OUT

CIB Chairman Hisham Ezz El Arab is a leading candidate to join Telecom Egypt’s board when it is reconstituted in mid-March, Al Mal reports. (Read in Arabic)

BY THE NUMBERS
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USD CBE auction (Sunday, 14 February): 7.7301 (Wednesday, 11 November)
USD parallel market (Monday, 15 February): 9.00 (+0.15 since Sunday, 14 February, Reuters)

EGX30 (Monday): 5,800.05 (+0.8%)
Turnover: EGP 298.8 mn (31% below the 90-day average)
EGX 30 year-to-date: -17.21%

THE MARKET ON MONDAY: The EGX30 inched up 0.8% to 5800.05 points yesterday, with shares worth EGP 298.8 mn changing hands. Retail, Arab, and foreign investors were net buyers while institutions and local investors were net sellers. Beltone Financial and Atlas For Land Reclamation were among the top gainers while Golden Pyramids Plaza and Golden Coast Company were the worst performers. Index heavyweight CIB gained 0.99%. Regional indices came in mixed, with the TASI up 2.4% and ADX 0.8% while the DFM dipped 0.2%.

 


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

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