TL;DR

EGP sinks to as low as 9.75 against USD, reserves ‘up’ to USD 16.53 bn, El Erian says not to sweat the exchange rate. (Speed Round)

Airlines appear to reach repatriation of funds agreement with gov’t, CBE. (Speed Round)

Egypt was world’s #4 destination for cross-border greenfield investment in renewable energy in 2015. (Speed Round)

Egypt purchasing managers’ index worsens for fifth straight month, tourist arrivals down nearly 50% year-on-year. (Speed Round)

SODIC, Heliopolis Housing sign co-development agreement over 655 acres in New Heliopolis. (Speed Round)

Domty courts investors in the Gulf, Europe. (Speed Round)

South Korea signs financing worth USD 3 bn for Egypt, other MoUs. (Diplomacy + Foreign Trade)

Egyptian Refining Company to begin operations by year-end. (Energy)

Rejected Canadian wheat shipment re-exported to Europe. (Basic Materials + Commodities)

NBE borrows USD 700 mn from China Development Bank. (Banking + Finance)

By the Numbers

WHAT WE’RE TRACKING TODAY

Housing Minister Moustafa Madbouly is leading a delegation of officials from the Housing Ministry and the Defense Ministry in a visit to China today to meet with companies and banks involved and interested in mega projects in Egypt, Al Mal reports. Madbouly will meet with executives of the China State Construction Engineering Corporation to discuss the new administrative capital and the development of sewer systems in rural Egypt. He will also meet with executives from the China Railway Engineering Corporation and the China Metallurgical Group over the projects to build sports and recreational villages. Also on the agenda: sit-downs with the heads of the Export-Import Bank of China and the Industrial and Commercial Bank of China. The delegation will then head to Kazakhstan for more meetings.

Okay, forgive us our obsession with U.S. politics these days, but with the Republican field being led by Trump… Four U.S. states are holding Republican primaries or caucuses today, and Texas senator Ted Cruz has won in Kansas and at time of writing was leading in Maine. Politico called it a “huge, surprise win” that has the potential to breathe some life into his campaign. The Democrats are holding contests today, the New York Times reports.
Republicans are battling for 155 delegates in Kansas, Kentucky, Louisiana, and Maine, while Democrats are heading to the polls in Kansas, Louisiana, and Nebraska for 109 pledged delegates.

WHAT WE’RE TRACKING THIS WEEK

Institutional investors from across the globe will meet face-to-face with c-suite executives from some of the most compelling issuers in MENA at the 12th Annual EFG Hermes One on One 2016, Atlantis, The Palm, Dubai. The three-day gathering gets underway tomorrow.

The Retail Plus conference is set to take place in Cairo on Monday under the auspices of Supply Minister Khaled Hanafy and Planning Minister Ashraf Al Araby. The conference, which will spotlight the country’s retail opportunities and developments, will be attended by representatives of the European Bank for Reconstruction and Development and the Federation of Egyptian Industries, Al Mal reports.

Mobinil is expected to officially announce its transformation into Orange Egypt on Tuesday at a press conference, Al Mal reports. The conference, which will be attended by Orange CEO Stéphane Richard and Mobinil CEO Yves Gauthier, will also see the announcement of Orange Egypt’s first smart center.

ON THE HORIZON

The US Federal Reserve’s Federal Open Market Committee meets on Tuesday and Wednesday of next week. The Fed has been giving mixed signals on its plans for the meeting. Look for the Fed chair’s press conference scheduled for Wednesday evening our time, Wednesday afternoon in the US.

Wamda’s Mix N’ Mentor Cairo 2016 – Marketplace Edition, is taking place at The Greek Campus, Cairo on Thursday, 17 March. Register here.

** DO YOU WANT TO READ OUR GCC EDITION? **

We have recently launched the beta version of our Enterprise GCC edition, and are now publishing Sunday-Thursday at 3 am UTC/ GMT (7 am UAE, 6 am KSA, 5 am Cairo), give or take a few minutes. We’re in beta, after all. You can sign up via this link and may view the Enterprise GCC site online at gcc.enterprise.press. Comments, suggestions and criticisms are always welcome at editorial@enterprisemea.com.

LAST NIGHT’S TALK SHOWS

Our talk show roundup is on hiatus this week, back next week.

SPEED ROUND

Pressure is still mounting on Egypt to devalue the EGP as the currency weakens to its lowest levels on the black market rate to EGP 9.50 against the USD, according to Reuters, with Al Mal reporting a parallel market rate of EGP 9.75 as of Saturday. The CBE announced on Thursday that foreign reserve levels stood at USD 16.53 bn at the end of February, slightly higher than USD 16.48 bn in January. Egypt’s foreign reserves stood at about USD 36 bn before 2011.

Meanwhile, Mohamed El-Erian is saying we should stop focusing on the EGP as currency valuation is not the problem, according to Bloomberg. Egyptian officials should put less focus on the currency’s relative value, he says, as it is neither the main problem nor the main solution. The real problem in El-Erian’s view: “Egypt does not produce enough, needs continuous electricity, reform of the tax system and pro-growth measures to reduce the deficit.” El Erian, former CEO of Pimco and current chief economic advisor to Allianz, is a member of the so-called Coordinating Committee designed to allow cabinet and the Central Bank of Egypt to harmonize monetary and fiscal policy.

Egypt’s USD-denominated Belady certificates are “positive for banks, but insufficient to quell their liquidity pressure,” a report by Moody’s Investor Service suggests. Moody’s expects the bank’s foreign currency liquidity to continue to decline and it does not expect that the funds raised will be enough to meet business demand. “Even if, for example, 10% [of Egyptian expatriates’ remittances] were invested in the … certificates, the banks would only raise around [USD 2 bn], less than one month of imports.”

Egypt was the world’s number-four destination for cross-border greenfield investment in renewable energy last year, according to data crunched by the Financial Times, with just under USD 6 bn in investment pledged. Egypt closed the year ahead of Japan and behind India, the UK and Chile. Greenfield investment in renewable and alternative energy accounted for just over 40% of all total greenfield investment in Egypt last year. Greenfield FDI, which the FT defines as “crossborder investments in physical projects excluding M&A,” rise 9% last year to USD 713 bn, with the petroleum and real estate sectors attracting the lion’s share. Total greenfield FDI in renewable energy, though, was the fastest-growing category, climbing 73% to USD 76 bn.

Business conditions in Egypt worsened for the fifth month straight, according to the February reading of the Emirates NBD PMI (read in Arabic here). The index registered 48.1, unchanged from January’s reading. The rates of employment, output, and new work continued to decline in February, with client demand falling due to “fragile economic conditions.” The only sort of silver lining was that the rate of contraction in purchasing activity slowed down to a “negligible” rate in line with that for output and new orders during February. Emirates NBD’s Senior Economist Jean-Paul Pigat said the PMI reading “continues to reflect relatively subdued domestic demand conditions at the start of 2016, and is consistent with other official data we have on the real economy. Some encouragement can be taken from the New Export Orders component, which despite remaining below the neutral 50-level, is nevertheless showing a slower pace of decline than in previous months.”

SODIC and Heliopolis Housing have signed a co-development contract to develop a mixed-use project over 655 acres in New Heliopolis in East Cairo, according to a company statement released Thursday. The agreement gives SODIC 70% of revenues generated from the sale of residential units and Heliopolis Housing the rest. SODIC will also be entitled to 69.8% of the commercial / retail revenues while Heliopolis Housing will be entitled to the remaining 30.2%. Minimum guaranteed revenues for the 6,800 unit development are estimated at about EGP 5.01 bn, paid in annual, unequal installments. Total revenues are estimated at EGP 30.35 bn for the project, which is expected to be developed over 10 years. This is SODIC’s first revenue-sharing agreement, which SODIC’s new chief executive officer Magued Sherif told Enterprise would be a model that allows tier-1 developers to more rapidly rebuild land banks in key locations in Greater Cairo. DNE quotes from the release here.

Domty is courting investors in the Gulf and Europe for its IPO, Bloomberg writes. Domty is visiting the UK, the UAE, and potentially the US and South Africa to entice interest in the sale of 122.5 mn existing ordinary shares (or about 49% of the company’s outstanding share capital). The company set the indicative price range at EGP 8.80-9.20, Domty said in an emailed statement Wednesday, meaning it could be worth as much as EGP 1.1 bn. “It isn’t rocket science to tell anyone that the company is exposed to a high growth industry,” director of research at Naeem Brokerage Allen Sandeep tells Bloomberg. “The size is not that large to draw in huge amounts of money, but at the same time this could be the beginning of people taking new positions depending on the pricing.” EFG Hermes Investment Banking is sole global coordinator and bookrunner for the transaction, while Baker & McKenzie is international counsel to the issuer and Matouk Bassiouny is serving as local counsel. Akanar Partners is financial advisor.

Reuters is walking back its earlier report that Egypt would stop sending inspectors abroad to pre-clear contracted wheat shipments at ports of origin a development that — had it been true — would have “increased the risk of selling wheat to Egypt, according to traders, for fear of shipments being rejected upon arrival because of ergot.” The newswire quotes an Agriculture Ministry statement as saying, “The central administration of the agriculture quarantine will continue to send inspectors and experts to inspect imported wheat cargoes.”

Traders hoard rice as prices rise, gov’t wrings its hands without stockpiles: Unlike cooking oil, which has been in short supply due to the FX shortage, Egypt has plenty of rice — but it’s apparently not making its way into the hands of those who need it the most. The price the government pays for rice has surged by about 50% over the last two months as traders hoard supplies under the expectation that prices will rise further after the government fails to replenish its stockpiles, Reuters reports. Head of the rice committee at Egypt’s Agricultural Export Council Mostafa al-Naggari estimates Egypt has a surplus of over 1 mn tonnes of rice, but failure on the government’s part to stockpile has left it at the mercy of traders.

MOVES- American University in Cairo’s (AUC) Board of Trustees announced the appointment of the former US ambassador to Egypt Francis J. Ricciardone as the university’s next president. According to AUC’s press release, Ricciardone, who served as ambassador in Cairo from 2005 to 2008, is currently the vice president and director of the Rafik Hariri Center for the Middle East at the US-based Atlantic Council. He assumes office on 1 July.

The government approved the repatriation of 50% of British Airways (BA) earnings in Egypt, 25% of Air France’s, and 25% of Saudi Airlines’, in an agreement meant to avoid the airlines suspending EGP payments on tickets due to the overdue transfer of the funds, according to head of the Tourism Advisory Council’s aviation committee Gehad Al Ghazaly, Al Borsa writes. The government will allow the gradual repatriation of USD-denominated earnings by other airlines over a period of three to six months as part of a preliminary settlement reached with the Central Bank of Egypt, Al Ghazaly adds. The central bank will hash out the details of the arrangement on Monday, but Al Borsa goes on to say that foreign airlines will take priority over regional carriers. “The negotiations are going on with each company separately and the transfers are made using the official USD exchange rate for today,” he told Saudi-owned Al Arabiya television, Reuters reports. The Civil Aviation Ministry had reportedly said on Thursday that the airlines would be paid what they are owed in foreign currency over “the coming period,” Reuters went on to say. While both the ministry and Tourism Minister Hisham Zaazou have since confirmed a settlement, they make no mention of its particulars. BA and Lufthansa stated that the issue had been resolved but also gave no further details.

…Moving the problem somewhere else: Prime Minister Sherif Ismail has ordered Misr Petroleum to accept payments from airlines for services and products sold at the Cairo Airport in EGP. According to Al Masry Al Youm the decision comes into effect immediately and is valid for six months. Aviation industry operatives are also asking the government to issue a similar directive forcing EgyptAir’s ground services and maintenance to accept EGP-denominated payments.

Speaking of tourism (or lack thereof): The number of tourists visiting Egypt in January sunk 46% y-o-y after Russian tourism arrivals tumbled following the Metrojet crash and subsequent flight ban, according to official statistics body CAPMAS, Ahram Online reports. Some 363k tourists visited, with 35.2% from Western Europe, 28.6% from the rest of the Middle East, and 14.8% from Eastern Europe. “After the plane crash, over the past three or four months, we lost around USD 1.2 bn or USD 1.3 bn in revenues,” Prime Minister Sherif Ismail said in a televised interview last Monday. Relatedly, German travellers’ bookings for summer holidays in Egypt, Tunisia, and Turkey have dropped around 40% compared with a year ago, German travel association DRV said on Thursday, Reuters reports. But it’s not all doom and gloom: DRV President Norbert Fiebig tells journalists that “bookings for these destinations had significantly improved over the past two weeks and he expected a rally over the coming weeks.”

Reiterating Prime Minister Sherif Ismail’s statement last week, Tourism Minister Hisham Zaazou said the tourism sector lost EGP 10 bn since the Metrojet crash, speaking at a mass held for murdered Italian PhD student Giulio Regeni at the Saint Joseph Catholic Church in Cairo, according to Al Mal. Zaazou offered his condolences to Regeni’s family, but tacked on a quick rejection of claims that the Interior Ministry had anything to do with his murder.

Snackfood maker Edita released 4Q2015 results, posting a 32.7% y-o-y increase in net profit to EGP136.9 mn, according to disclosure to the EGX (pdf). Revenues were up 13.7% y-o-y to EGP 646.2 mn.

Emaar Misr’s net profit surged 104.5% y-o-y to EGP 855 mn in FY2015 from EGP 418 mn in FY2014, according to a regulatory filing (pdf). Revenues grew 24.3% y-o-y to EGP 3.2 bn from EGP 2.6 bn last year. Sales for the year were up 21.2% to EGP 8.6 bn.

THE MACRO PICTURE

China makes headlines again the morning, setting its fiscal deficit targets below expectations, the FT (paywall) reports. China aims to run a fiscal deficit at CNY 2.18 tn in 2016, or 3% of GDP, as it “faces a tough battle to keep its economy growing by at least 6.5 percent over the next five years,” Premier Li Keqiang said as he opened China’s annual parliament on Saturday, according to Reuters. China also bucked the trend and did not announce a target for increasing trade, Bloomberg writes, revealing “caution among Chinese officials about world trade this year,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong.

Across the pond, even though wages continue to stagnate, the US economy added far more jobs than expected in February, with Friday’s jobs report showing 242k more positions created, the FT (paywall) reports. The news drove US stocks to post one of the best rallies since 2014. But not so fast: While US shale rigs look like they’re nearing record lows, Rogers Holdings Chairman Jim Rogers tells Bloomberg’s Guy Johnson there is a “100% probability” that the US economy would be in recession within one year. (Watch, run time: 1:38)

And with sentiment on the US looking a little better last week, emerging markets rose in the wake of the excitement, with stocks and currencies posting their biggest weekly gains this year over the weekend, Bloomberg writes. Brazil’s stocks entered bull territory on Thursday, the currencies in Colombia and Chile each gained at least 1%, Indian stocks “capped the largest weekly increase since December 2011,” and Russian bonds rallied to the highest since 2014. Springboarding from that, Cambria Investment Management chief investment officer Meb Faber talks about why emerging markets are the “trade of a decade” with Bloomberg’s Matt Boesler. (Watch, run time 2:36)

EGYPT IN THE NEWS

Egypt-Israeli relations dominate foreign headlines on Egypt this morning. Roi Kais and Itamar Eichner write a piece titled Are Israel and Egypt getting Closer? for Israeli online publication Ynetnews, detailing what they claim are thawing relations between the two countries, despite the reaction to MP Tawfik Okasha’s dinner with the Israeli ambassador. The article mainly cites security issues presented by Daesh, Hamas, and Iran as being the cause for closer relations.

“It’s an ironic, incontrovertible fact that during the Muslim Brotherhood’s brief time in power, free speech flourished in Egypt,” Ursula Lindsey for the Nation in a piece that takes an extremely detailed and politicized look at Egypt’s cultural scene before, during, and after 25 January, particularly the more recent crackdown on dissidents.

WORTH READING

Warren Buffett’s annual letter to Berkshire Hathaway shareholders was published last week, (pdf) and has since generated a fair deal of commentary on his remarks, everywhere from Mitt Romney citing Buffett’s optimism on the American economy in Romney’s speech denouncing Donald Trump, (transcript available here) to this two-minute video from the Wall Street Journal reviewing the letter’s key points.

WORTH WATCHING

Footage capturing the moment Turkish police physically seized control of the country’s largest newspaper Zaman on Saturday. The EU issued a statement which seemed to imply that Turkey’s accession, an ethereal proposition at best, could be in jeopardy. (Watch, run time: 3 minutes)

DIPLOMACY + FOREIGN TRADE

Egypt signs several agreements and MoUs with South Korea, with one MoU for financing worth total value of USD 3 bn, Al Mal reports. Egypt signed the framework agreement detailing facilitated loans from the Export-Import Bank of Korea through the Economic Development Cooperation Fund, says International Cooperation Minister Sahar Nasr. The loans are divided into a USD 700 mn portion from the government for development projects and a USD 2.3 bn segment from the export credit agency for renewable energy transmission projects, adds Nasr.

President Abdel Fattah El Sisi met on Thursday South Korean President Park Geun-hye in Seoul to talk increasing Korean investments in Egypt, especially in the Suez Canal Development Project, according to an Ittihadiya statement. The pair attended the signing of several agreements between Egypt and South Korea, including MoUs to develop the Alexandria Port and establish an Egyptian-Korean University for Technology, a loan agreement between Egypt’s railways and the Export-Import Bank of Korea, and a project to develop the railway signal from Nag Hammadi to Luxor in Egypt. El Sisi also met with Prime Minister of South Korea Hwang Kyo-ahn and visited the South Korean parliament where he held a meeting with South Korea’s National Assembly speaker Chung Ui-hwa and a number of MPs.

El Sisi also met with representatives of major South Korean companies on Friday, according to an Ittihadiya statement. The president of LG Electronics said the company intends to expand activities in Egypt while a meeting with the president of Hyundai Heavy Industries Co. revolved around maritime transport projects to which the Korean company could contribute in the Suez Canal corridor. President of Doosan Heavy Industries & Construction talked developing the sewage system in Egypt and expanding in the energy sector. El Sisi called on SK Engineering & Construction to “urgently move ahead with its participation in the implementation of the Tahrir Petrochemical Complex in Ain El Sokhna” while the president of Hyundai Engineering and Construction expressed interest in Egypt’s railways. The president also visited Incheon City and its international port, where he witnessed the signing of a cooperation agreement between the South Korean Incheon Economic Zone and the Suez Canal Economic Zone, Al Mal reports.

ENERGY

Egyptian Refining Company to begin operations by year-end, Heikal says
The Egyptian Refining Company will begin operations by the end of the year, Qalaa Holdings’ Chairman Ahmed Heikal tells Al Masry Al Youm. The project is 82% complete and will be able to supply 60% of Egypt’s diesel needs once finished. The USD 3.7 bn project attracted financing from Qatar Petroleum, InfraMed Infrastructure, and a number of international investors besides Qalaa Holdings, Heikal added. (Read in Arabic)

BASIC MATERIALS + COMMODITIES

Rejected Canadian wheat shipment re-exported to Europe
The Canadian wheat shipment rejected by Egyptian agricultural quarantine authorities was re-exported to Europe, traders tell Reuters’ Arabic service. One trader said Egypt rejected appeals to approve the shipment and the ship carrying the wheat is heading toward Europe now. A media consultant working for the Agriculture Ministry had denied that the government rejected a shipment, which we reported two weeks ago.

Agriculture minister blames confusion over wheat tenders on gov’t dithering
The Agriculture Ministry plans to hire a foreign consultant to accurately determine whether wheat tenders adhere to standards, says Agriculture Minister Essam El Fayed, adding that official Egyptian experts are not up to the task. He blames these officials and a lack of coordination between the Agriculture Quarantine Authority, the General Organization for Export & Import Control, and the Organization for Standardization & Quality for the confusion behind the wheat tenders. He states that officials from these organizations failed to attend meetings to set standards for wheat tenders, and a follow up meeting between the ministers of health, agriculture, and trade failed to reach a consensus on the meeting. (Read in Arabic)

Egypt’s first agriculture commodities exchange launches in Kafr El Sheikh
Egypt’s first agricultural commodities exchange was launched on Friday in Kafr El Sheikh, Al Mal reports. As it stands, the exchange purchases goods from farmers at the market price and markets them primarily to the government, according the exchange’s chairman Abdel Moneim Gomaa. The second phase of the EGP 50 mn exchange will include the development of storage and sorting facilities for the goods, Gomaa adds. Commodities exchanges have been at the center of the Supply Ministry’s strategy, with Supply Minister Khaled Hanafy announcing last month that Middle East’s first global commodities exchange would be launched before the end of the year.

MANUFACTURING

Prime minister reaffirms importance of developing metal industry
Prime Minister Sherif Ismail stressed the importance of developing the iron and steel industries for their integral role in any construction or development project, and their employee-intensive nature, at a meeting with manufacturers on Thursday. (Read in Arabic)

REAL ESTATE + HOUSING

NUCA considers cancelling South Marina MoU with Saudi real estate company
The New Urban Communities Authority (NUCA) is considering cancelling the MoU with Saudi-based Al-Arabia Company for Real Estate Development to build the South Marina project. This follows the company’s request to extend its cash and in-kind payment to NUCA to 26 years from 10, with no adjustment to NUCA’s share. The tourism project includes a resort, hotels, water parks, a Bedouin village, scientific and cultural research centers and covers an area of 2,800 feddans. Investments are estimated at EGP 26 bn, with NUCA’s share at EGP 10 bn. (Read in Arabic)

TOURISM

PriceWaterhouseCoopers to act as financial consultant on new charter airline
PriceWaterhouseCoopers (PwC) has been contracted to act as financial consultant on the establishment of the Tourism Ministry’s USD 100 mn charter airline, Al Borsa reports. PwC’s report and details of the project, including its shareholding structure, will be announced in two months, says Tourism Minister Hisham Zaazou. The Tourism Ministry is in talks with the Civil Aviation Ministry to acquire one of its subsidiary airlines, Zaazou adds. He did not rule out talks over the acquisition of a privately owned airline, including Smart Aviation and Air Cairo. As we noted last month, the new airline, in which the private sector will hold a 80% stake, will seek an early acquisition.

Tourism authority to launch tourism campaign in Japan in April
The Tourism Development Authority (TDA) plans to launch a promotional campaign in Japan in April, Al Borsa reports. Culture Minister Helmy El Namnam is expected to be present at the launch in Osaka and Tokyo, considering 98% of Japanese tourists visiting Egypt come for the cultural and archeological attractions, says authority head Sami Mahmoud. Flights of Japanese tourists are expected to begin arriving sometime around mid-April, says head of International Tourism at the TDA Mohamed Adel Gabbar. He adds that the TDA is in talks with foreign carriers to begin running charter flights until a more regular flight route is established. (Read in Arabic)

TDA will reschedule land payments provided for developers who show “progress”
The Tourism Development Authority will postpone payments owed by tourism developers on land if they can demonstrate “progress” on the projects, says Tourism Minister Hisham Zaazou. He adds that developers who are “not serious” would receive no such accommodation. (Read in Arabic)

AUTOMOTIVE + TRANSPORTATION

Conflicting reports on electric monorail project cancellation
Conflicting reports have come out from the Transport Ministry on the status of the electric monorail project, Al Masry Al Youm reported on Thursday. On one hand, ministry spokesperson Ahmed Ibrahim said the project was too costly and that Transport Minister Saad El Geyoushi ordered a study into connecting the Ain-Shams–Suez rail to Tenth of Ramadan. Meanwhile, El Geyoushi said negotiations were halted due to the Chinese contractor, Aviation Industry Corporation of China (AVIC) refusing to manufacture the train in Egypt. On Tuesday, Al Masry Al Youm had reported that the project was scrapped and converted to a diesel line instead. However, AVIC’s representative in Egypt Ali Moussa said no meetings took place with El Geyoushi since the final agreement was sent to the ministry, noting that AVIC had already reduced the cost of the project to USD 1.5 bn from USD 2.1 bn.

Transportation Ministry signs MoU with Talgo to build high-speed rail infrastructure
Egyptian National Railways signed an MoU with Spanish manufacturer Talgo to build high-speed rails and trains, Amwal Al Ghad reports. Transportation Minister Saad El Geyoushi ordered the formation of a committee to follow up on the MoU and make sure it is implemented. (Read in Arabic)

Transport Ministry cancels MoU with Dongfang to develop Alexandria-Abu Qir rail line
The Transport Ministry cancelled an MoU with China’s Dongfang Electric Corporation to develop the Alexandria-Abu Qir rail line, by substituting the line’s diesel locomotives with modern electrical engines, Al Mal reports. The reason behind the cancellation was Dongfang’s insistence on funding the project through loans instead of direct investments by the company, says Transport Minister Saad El Geyoushi. The ministry will now tap into the state treasury to finance the project, El Geyoushi adds. (Read in Arabic)

Cairo Governorate approves issuing temporary licenses for car exhibitions
Cairo Governor Galal El Saeed approved issuing temporary licenses for car exhibitions in Cairo, Al Mal reports. These one-year, renewable licenses set prices at EGP 500 per sqm for exhibitions whose width does not exceed 15 m, EGP 750 per sqm for buildings of up to 25 m in width, and EGP 1,500 per sqm for buildings whose width exceeds 25 m. (Read in Arabic)

BANKING + FINANCE

NBE borrows USD 700 mn from China Development Bank
National Bank of Egypt (NBE) received a USD 700 mn loan from the China Development Bank to finance infrastructure projects, Reuters reports. The newswire quotes NBE’s Vice Chairman Mahmoud Montaser as saying that “the amount has entered the bank’s treasury in full and will be paid back over 8 years. It will have a grace period of 3 years.” (Read)

Arab African International Bank-led syndicate inks EGP 2.5 bn loan agreement with Food Industries Holding Company
A syndicate led by the Arab African International Bank has arranged a short-term loan worth EGP 2.5 bn for the Food Industries Holding Company, the bank said in a statement on Thursday. The group also includes Banque Misr, QNB, NBE, the Arab Bank, and Banque du Caire. The loan falls under the bank’s initiative to support the national economy, says Deputy Chairman Hassan Abdullah. (Read in Arabic)

OTHER BUSINESS NEWS OF NOTE

Seven clubs express interest in forming security firm with Misr for Central Clearing
Misr for Central Clearing, Depository, and Registry is currently establishing a security firm to secure sports pitches, says company Chairman Mohamed Abdel Salam. Seven clubs have reportedly expressed interest in participating, he adds. (Read in Arabic)

LEGISLATION + POLICY

VAT legislation includes provisions for e-commerce transactions
The Tax Authority plans to enforce new regulatory measures on e-commerce transactions in the value-added tax legislation to “ensure Egypt gets its fair share of tax revenues from them, which exceed EGP 1 bn,” says head of the Research Department at the Sales Tax Authority Salah Youssef. He refuted claims in media outlets that there was a study being conducted exploring taxing Facebook. (Read in Arabic)

Customs Authority seeks harsher penalties for evaders in the Customs Act
The Customs Authority is planning legislative amendments to the Customs Act that would see customs evaders jailed for up to five years. The authority also plans to introduce measures that would grant it greater supervisory authority over import documentation and allow it to confiscate goods in violation of customs directives. The move follows a ruling against articles of the act allowing the seizure of goods. The amendments are currently being reviewed by the finance minister, according to a Customs Authority source. (Read in Arabic)

Pharmacist Syndicate rejects outside involvement in drafting Pharmaceutical Authority Act
Head of the Pharmacists Syndicate Mohey Obeid denounced what he describes as the Trade and Industry Ministry’s involvement in drafting legislation that will form an authority to supervise the pharmaceutical manufacturing industry. The presence of the Trade Ministry’s Export Council of Medical Industries and the Pharmaceuticals Division of the Federation of Egyptian Industries in the drafting committee is unacceptable as their agendas run contrary to the syndicate’s. He threatened that the syndicate would form its own independent authority if need be. (Read in Arabic)

EGYPT POLITICS + ECONOMICS

GDP growth rate falls to 3.1% y-o-y in 1Q2015-16
GDP growth fell to 3.1% y-o-y in 1Q2015-16 from 4.5% in 1Q2014-15, according to a CBE report (pdf). Manufacturing contracted by a factor of -1.7% for the quarter, falling from a 12.7% growth rate in 1Q2014-15. Tourism, as expected, was one of the hardest hit sectors scoring a -9.1% rate, plummeting from a 50.1% growth rate in 1Q2014-15.

ON YOUR WAY OUT

Cape of good what? Head of the Suez Canal Authority Mohab Mamish is denying reports that ships are opting to navigate the Cape of Good Hope instead of paying the Suez Canal tolls following the drop in oil prices. Mamish is responding to a report by maritime trade analyst firm SeaIntel that showed cargo vessels are bypassing the Suez and Panama Canals for longer routes. Mamish insisted that the Suez Canal continues to be the unrivalled “major route for international trade” and that only 115 ships used an alternative route, according to Al Ahram.

Qatar-based broadcaster BeIN buys ‘Pulp Fiction’ owner Miramax, Bloomberg reports. The sellers include a unit of Qatar’s sovereign wealth fund and Colony Capital, run by bn’aire Thomas Barrack Jr., according to a statement from Wednesday. Terms of the acquisition were not disclosed

CALENDAR

07-09 March 2016 (Monday-Wednesday): The EFG Hermes 12th Annual One on One Conference 2016, Atlantis, The Palm, Dubai.

07 March 2016 (Monday): The Retail Plus Conference, Royal Maxim Palace Kempinski Hotel, Cairo.

15-16 March 2016 (Tuesday-Wednesday): US Federal Reserve’s Federal Open Market Committee meets. Fed chair will hold press conference.

17 March (Thursday): Wamda’s Mix N’ Mentor Cairo 2016 – Marketplace Edition, The Greek Campus, Cairo. Register here.

21-22 March (Monday-Tuesday): The Africa CEO Forum, Sofitel Abidjan Hotel Ivoire, Abidjan, Ivory Coast.

23-24 March 2016 (Wednesday-Thursday): Microfinance Egypt, Nile Ritz-Carlton, Cairo.

27 March (Sunday): Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development, InterContinental Hotel Citystars Cairo. Register here.

29-31 March 2016 (Tuesday-Thursday): Future Rail and Metro Egypt, Cairo.

13-16 April 2016 (Wednesday-Saturday): Cafex, Cairo.

25 April 2016 (Monday): Sinai Liberation Day (national holiday)

26-28 April (Tuesday-Thursday): Arabian Hotel Investment Conference, The Madinat Jumeirah, Dubai.

01 May (Sunday): Easter Holiday / Labour Day (national holiday)

02 May (Monday): Sham El Nessim (national holiday)

02-03 May (Monday-Tuesday): The Middle East Investment Summit 2016, Ritz-Carlton DIFC, Dubai.

06 October (Thursday): Armed Forces Day (national holiday)

27 November 2016 (Sunday): 2016 Cairo ICT Conference