Sea-change in relations as Saudi pledges SAR 60 bn investment fund, KSA private sector invests
Saudi private sector pledges bns in new investment, KSA and Egypt to operate SAR 60 bn investment fund. (Speed Round)
Blumberg Grain storage facilities will come online this month. (Speed Round)
Abraaj Group to move forward with Cleopatra Holding hospital listing. (Speed Round)
Italy recalls ambassador after Egypt refuses to hand over Regeni phone records. (Speed Round)
CIB shareholder files lawsuit against Amer over nine-year term limit for bank heads. (Speed Round)
Looks like the Russians aren’t coming back this year, says Russian tourism agency head. (Speed Round)
Apache allocates USD 1 bn in new investments in Egypt in FY2016-17. (Energy)
El Sisi orders army to operate steel plant to break ‘monopolies.’ (Manufacturing)
Suez Canal Authority agrees with Mitsubishi to develop Port Tawfik, Port Said. (Automotive + Transportation)
An “alien” structure in Egypt has British tabloids losing their minds. (On Your Way Out)
WHAT WE’RE TRACKING TODAY
Saudi King Salman’s visit to Egypt continues today amid expectations he will become the first Arab head of state to address the Egyptian parliament. The Saudi monarch’s trip has so far been marked by a sea change in approach to how KSA delivers aid to Egypt, prioritizing soft loans and putting the Saudi private sector in the driver’s seat. The toll so far: The two sides have agreed to form an SAR 60 bn investment fund and a laundry list of Saudi companies have pledged to step-up investment. As for potential deposits at the Central Bank of Egypt, there’s been no word so far other than a single-sentence leak to Al Mal. We have detailed coverage below.
We’re also keeping an eye on potential fallout from Italy’s decision to recall its ambassador for consultations in protest of what it sees as foot-dragging by Egypt in the investigation of the brutal murder of Italian graduate student Giulio Regeni. Italy’s move comes just a week before French President François Hollande is due to visit Cairo.
The German-Arab Chamber of Industry and Commerce was scheduled to receive a delegation of businessmen from Bavaria yesterday for meetings through 13 April, according to chamber CEO Rainer Herret.
Egypt is set to take part in the 13th Organization of Islamic Cooperation summit, which kicks off today and runs through 15 April in Istanbul.
The Information Technology Industry Development Authority’s market intelligence workshop series ‘Digital Transformation and New Models of Innovation’ also kicks off today at ITIDA Main Hall, Cairo.
WHAT WE’RE TRACKING THIS WEEK
The spring meetings of the International Monetary Fund and the World Bank kick off this weekend, running 15-17 April in Washington, DC. The big question for Egypt: Will the cabinet delegation attending use the occasion as an opportunity to open talks on an IMF facility to kickstart FDI? The agendas for the meetings are here.
Orascom Development Holding expects to announce its FY2015 results on Thursday, 14 April and will hold an analyst call at 1:30 pm CLT, according to a statement.
The two-day Egypt CIO Summit 2016 takes place tomorrow at the Nile Ritz Carlton.
On Wednesday, the conference “As Goes Egypt, So Goes the Middle East” takes place at Harvard Law School.
Also on Wednesday, the three-day café and restaurant equipment and furniture exhibition Cafex kicks off in Cairo.
ON THE HORIZON
A German economic delegation is expected to visit Cairo on 17-18 April. The delegation will be comprised of the Minister for Economic Affairs and Energy Sigmar Gabriel and representatives of 100 German companies and financial institutions. The delegation will meet President Abdel Fattah Al-Sisi and the ministers of industry, finance, foreign affairs and investments, according to DNE.
ARE YOU BASED IN THE GCC? Enterprise: The GCC Edition is now in beta, 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 firstname.lastname@example.org.
SPOTLIGHT ON: Saudi king visit to Cairo
President Abdel Fattah El Sisi and Saudi’s King Salman signed last night at Abdeen Palace an agreement to establish an investment fund worth SAR 60 bn, Al Mal and Reuters report. There was no detail in a statement from Ittihadiya as to who would be running the fund and it did not specify who would be making contributions, noting only that it would be “a Saudi-Egyptian investment fund with a capital of SAR 60 bn between the Saudi Public Investment Fund and entities under it and the government of Egypt and entities belonging to it.”
El Sisi and Salman also signed a number of agreements for Sinai development projects including a 90 km highway, a canal to transfer water to Sinai, and King Salman University. Also in the pipeline: developing 13 agriculture projects (the majority of them in Sinai). The Saudi Public Investment Fund will also establish a free-zone in Sinai under an agreement inked with Egypt’s Ministry of International Cooperation. The two sides also agreed to build a USD 2.2 bn, 2.25 GW power plant in Dairut, Upper Egypt. (Some of these projects had been mentioned during El Sisi’s call-in to Amr Adib’s program last month on Sinai Development.)
Saudi will make deposits at the Central Bank of Egypt, government sources reportedly told Al Mal, stopping short of specifying a value. The news doesn’t appear in any other outlet this morning.
Egypt, Saudi Arabia announce King Salman bin Abdulaziz Bridge on Friday, linking both countries: Saudi Arabia and Egypt renewed an agreement to build a bridge between Saudi Arabia and Egypt through Aqaba Bay during King Salman Bin Abdulaziz’s visit to Cairo, Reuters’ Arabic service reports. President Abdel Fattah El Sisi, who awarded the king Egypt’s Order of the Nile, announced at a joint press conference that the bridge would be named after the Saudi monarch, according to an Ittihadiya statement. The causeway, which is estimated to cost USD 3-4 bn, is a revival of an initiative abandoned in 1988 over damage it could cause to the Red Sea coral reefs and over security concerns, according to the Wall Street Journal. “The original idea was to boost the Egyptian economy through trade and tourism and open a new route for pilgrims visiting Muslim holy sites in Saudi Arabia,” according to the paper. Saudi Minister of Industry and Trade Tawfik Bin Fawzan raised the possibility of private sector involvement in financing the bridge at the Saudi-Egyptian Business Opportunity forum, adding that financing mechanisms for the bridge are still under exploration, Al Borsa reports.
Egypt and Saudi will sign a number of agreements on power generation during the visit, Al Mal reports. These include: cementing an MoU signed with the ACWA Power-Masdar consortium during the EEDC for a 2.2 GW combined cycle power plant in West Damietta and solar power plants in Benban and the West Nile producing 1.5 GW; a 500 MW wind farm in Ras Ghareb; and cementing another EEDC agreement signed with FAS Energy to develop a 2 GW solar power plant.
Saudi companies pledged to make significant new investments during the first days of the king’s visit, with a number of the announcements coming during the Saudi-Egyptian Business Opportunities Forum. The Saudi Egyptian Business Council will establish a company with capital of EGP 3 bn to create investment opportunities at the Suez Canal and conduct studies ahead of presenting them to investors, said council chairman Sheikh Saleh Kamel, Al Shorouk reported. Among the highlights of the private-sector announcements:
- The Savola Group plans to expand its retail investments in Egypt through its retail subsidiary Panda in cooperation with the Supply Ministry, Al Borsa reports. The company has also obtained 10,000 feddans to grow beet sugar for USD 45 mn.
- ACWA Power intends on investing USD 10-12 bn over the next five years to generate 10 GW in Egypt, according to a statement from company Chairman Mohammed Abunayyan, according to Al Shorouk. The Egyptian energy sector can attract up to USD 30 bn in investments over the coming five years, said Regional Manager Hassan Amin, on the back of the government’s plan to increase renewable energy’s share of total generated energy to 20% by 2022.
- Al Watania Poultry Company, an Egyptian-Saudi company that has a c. 45% share of the domestic poultry market, is looking to invest EGP 2 bn in Egypt over five years, said company representative Abdullah Bin Saud, according to a report by Amwal Al Ghad. The new investments bring the company’s total to EGP 5 bn, he added.
- Al Rajhi International is investing EGP 1.2 bn into the reclamation of 75k feddans in the Toshka project until 2020, announced board member Khalid El Malahy, Amwal Al Ghad reported. The company was previously contracted for the reclamation of 100k feddans, completing 25,000 with investments of USD 80 mn.
- Al-Batterjee Holding will invest EGP 60 mn in real estate development over the next year, said company Chairman Mazen Al Batterjee, Al Borsa reports. The company is interested in SCZone projects and is a 5% stakeholder in the investment company established by the Saudi-Egyptian Business Council.
The two sides signed a total of 17 agreements on Thursday, which Ahram Online says were in the field of agriculture, electricity, housing, trade and industry, prevention of corruption, and labour. “Other agreements included three joint programs in the fields of education, culture, and radio and television production,” according to the paper. Al Borsa has the roundup in Arabic. Reuters writes that Egypt signed development agreements with Saudi Arabia worth USD 590 mn, citing remarks by International Cooperation Minister Sahar Nasr said on Friday. The agreements were signed with the Saudi finance minister and covered building the King Salman University and nine housing projects in Sinai, the West Cairo power station, and the Kasr El Aini Hospital developments, Al Mal reports.
The state-run Saudi Press Agency puts the total number of agreements signed so far at 21, adding to the list separate framework agreements for cooperation in housing with Talaat Moustafa Group and the Egypt-Italy Investment Holding Group (which we’re presuming is Misr Italia Group), and an MoU between Saudi Aramco and SUMED (no further details on the latter were offered). You can catch SPA’s coverage here, here and here (Arabic).
In sum, Investment Minister Dalia Khorshid believes Saudi investments could double to USD 60 bn from USD 30 bn, after several Saudi companies began conducting feasibility studies on economic projects in Egypt, Al Mal reports. Over 5,000 companies operate in both countries, said Khorshid, with around 3,500 based in Saudi Arabia operating in Egypt, making Saudi Arabia Egypt’s biggest Arab investor and its second-biggest international investor.
A sea-change in relations? The visit and the structure of the agreements mark a shift in Saudi-Egypt relations in terms of support, with one businessman close to the matter telling Reuters, “Saudi Arabia will be making investments and soft loans. No more free money,” said the businessman. The new approach, prompted equally by low oil prices and frustration in the GCC with Egypt, will increase pressure for Egyptian officials to deliver on promises of an economic turnaround through the long-awaited infrastructure on mega-projects, according to the newswire. “This is a change in strategy. Return on investment is important to Saudi Arabia as it diversifies sources of revenue,” said the source.
Egypt and Saudi Arabia also signed a maritime borders delineation agreement which places the Red Sea islands of Tiran and Sanafir Island in Saudi Arabia’s territorial waters, according to a cabinet statement, Al Masry Al Youm reports. The move comes on the back of six years of negotiations, read the statement. Under the constitution, parliament must approve the treaty for it to pass. Reuters has coverage in English.
Evergreen story #2: Saudi-Egyptian Business Council Chairman Sheikh Saleh Kamel announced that the Egyptian government cleared 80% of obstacles facing Saudi investors, Amwal Al Ghad reported.
Evergreen story #3: The Saudi-Egyptian Business Opportunities Forum pledged to make progress on eight issues to promote trade and private sector growth in both countries, Al Borsa reports. These include: settling Saudi investor disputes in Egypt; pledging to reduce red tape for value-added industries; developing “information portals” to make it easier for legal migrants to make their way to KSA; developing a web portal and database on trade and business information in both countries to promote more M&A opportunities between Saudi and Egyptian companies; opening offices to guide business leaders through bureaucratic procedures; promoting joint scientific research and educational opportunities; expanding the roles of commercial attaches to promoting investment opportunities in both countries; and pledging to hold additional business forums to promote investments.
Blumberg Grain storage facilities to come online this month and “will be able to save the Egyptian government approximately USD 550 mn a year in wheat savings, value addition and additional labour benefits,” David Blumberg, CEO of Blumberg Grain Middle East and Africa, told Reuters The storage system will process and monitor a quarter of domestic crop from a hangar in Alexandria for the first time. Egypt could sign an agreement for a second network of storage sites by 1 May, allowing Blumberg to handle the country’s entire crop by 2018.
Dubai-headquartered Abraaj Group, the global emerging markets private equity outfit, looks set to take healthcare investment Cleopatra Holding to IPO, having submitted a request to list on the EGX with authorized capital of EGP 80 mn. Cleopatra Holding is looking to float 160 mn shares at a par value of EGP 0.5 per share. The company owns Cleopatra Hospital, Nile Badrawi Hospital, Al Shorouk Hospital, and Cairo Medical Center, according to Ahram Online, which picked up a report by state-run news agency MENA on the subject. Al Mal notes that EFG Hermes Investment Banking is leading the transaction.
The government is targeting a 43% reduction spending on fuel subsidies in its 2016-17 budget, Finance Minister Amr El Garhy said at a press conference on Saturday. EGP 35 bn was allocated toward fuel subsidy spending in the next fiscal year, down from EGP 61 bn this year. Falling oil prices will account for the bulk of the savings, while reforms to be enacted by the Oil Ministry will shave-off a further EGP 8-10 bn, said Deputy Finance Minister Ahmed Kouchouk, without specifying the nature of the reforms. (Prime Minister Sherif Ismail had stated that the government would spending on fuel subsidies by 30% of their mid-2014 levels over the next five years back in December.) Interest on the nation’s debts next year will grow to over 28% of expenditures to EGP 299 bn. The ministry is aiming to reduce domestic debt to 97% of GDP, down from 98% this year, according to El Garhy.
Okay, but are we signing up for an IMF facility? El Garhy said the government hasn’t yet made a decision to ask for an International Monetary Fund package, adding that it hasn’t yet been formally discussed by members of the cabinet delegation heading to the IMF and World Bank spring meetings this coming weekend, Al Shorouk reports.
The Central Bank of Egypt held an additional FX auction on Thursday in which it injected USD 118.7 mn of an intended USD 120 mn into the market, Reuters reported. The CBE holds its regular auction once a week on Tuesdays. The exchange rate was kept stable at EGP 8.78 per USD 1. Traders told Reuters on Thursday that the greenback was trading at 10.30 to 10.32 on the parallel market compared to 10.15-10.20 on Wednesday.
CIB shareholder Sha’ban Hameda filed a lawsuit on Thursday against Central Bank of Egypt Governor Tarek Amer and the presidency over the March decision setting a term limit of nine years for bank chiefs. The lawsuit calls for the decision to be repealed on the grounds that it is unconstitutional and constitutes abuse of power by the CBE governor, Al Borsa reports.
Italian Ambassador to Egypt Maurizio Massari was recalled to Rome for “an urgent evaluation” of the steps to be taken to “ascertain the truth about the barbaric murder of Giulio Regeni,” the Italian Foreign Ministry said in a statement on Friday. Egypt’s Foreign Minister Sameh Shoukry was not impressed with the move, saying on Saturday that it was at odds with Egypt’s transparent cooperation with Italy, according to Reuters. State-run MENA news agency said Shoukry called his Italian counterpart to express his “annoyance” with the political turn in dealing with the case.
…On Saturday, the deputy public prosecutor clarified that Egypt and Italy were in a tussle over phone records in the case. Egypt refused to hand over Regeni’s phone records, Mustafa Suleiman told a news conference in Cairo (watch, run time 36:26) as doing so would be unconstitutional. “This demand goes against the constitution and the law and is a crime for anyone who does it and we told [Italy] that the public prosecution is doing this itself [looking at phone records] and will give you the results.” The Italians had also apparently requested that Egypt hand over the phone records of residents of Regeni’s Dokki neighborhood, which was also refused on constitutional grounds, Suleiman added. Apart from these points, Egyptian and Italian authorities were working well to reach a resolution to the case, Suleiman stated. A team of Egyptian investigators had arrived in Italy and went over the Regeni case with Italian representatives on Thursday, ANSAmed said, in a delegation of “two Egyptian magistrates and four security officials reportedly came bearing a 2,000-page case report, including interviews with 200 witnesses with alleged connections to the victim.”
…Al Borsa is reporting that the decision to recall the Italian Ambassador was followed by Italy freezing projects and financial aid to Egypt, including the debt exchange program, logistics zones in eight governorates worth USD 45 mn, as well as a USD 45 mn loan to finance the Robky leather city infrastructure. Italy is Egypt’s largest European trading partner, with bilateral trade estimated at EUR 6 bn at the end of 2014. On the other hand, Al Mal quotes Tamer Abu Bakr Chairman of the Egyptian Italian Business Council as saying economic ties with Italy have been unaffected by the decision to recall the ambassador.
Russian tourists won’t be back this year, according to the deputy head of Russia’s Federal Agency for Tourism Roman Skory, TASS News Agency reported on Thursday. “Turkey will not be reopened this year for sure, and the latest events in Egypt showed that Egypt will most likely not be reopened either,” Roman Skory. “By way of example, Britain and a number of European countries do not rush to resume flights to Egypt either. Safety is the key issue, the number one problem,” he said. Russian parliamentarian Franz Klintsevich, the deputy head of the Duma’s Defense and Security Committee, had said talks to resume flights must be put on hold in light of the hijacking of an EgyptAir flight as Egyptians are not ready to ensure the security of Russian tourists, RT reports. Russian deputy foreign minister Mikhail Bogdanov expressed hopes on 25 March that flights to Egypt would be restored by the beginning of summer, according to state news agency TASS.
MOVES- Musical chairs at the state oil and gas companies: Oil Minister Sherif El Molla appointed EGPC head Mohamed El Masry as the new Chairman of EGAS. Replacing El Masry at EGPC’s helm is Tarek El Hadidi, according to Reuters.
Zulficar and Partners wins Egypt’s First Law Firms Tournament. The firm beat Matouk Bassiouny (4-0) and Baker & McKenzie (2-0) before relegating Alliance to second place in a final that saw Zulficar win 1-0. Says our correspondent: “Only one of our own players got a back injury and was carried away by a specialised ambulance dispatched for the occasion. Other than that, the atmosphere was unusually ‘cordial.’” H/t Firas El-S.
CORRECTION- Egypt recorded a net inflow of USD 2.5 mn from US ETFs, not USD 2.5 bn. We blame our tired eyes. H/t Ayah A.
THE MACRO PICTURE
The Financial Times (paywall) and the Wall Street Journal were channeling each other over the weekend, both picking up stories on emerging market outflows. Capital net outflows are set to hit about USD 500 bn in 2016, according to the Institute of International Finance (IIF) on Friday. And while EMs have rallied recently, we shouldn’t get too excited. “We are pessimistic because we see no improvement in the structural problems facing EMs. On the contrary, they are getting worse so there is nothing to feel good about,” said Hung Tran, the IIF’s director for capital markets. The WSJ is surprised “no big emerging country has gone bust as a result,” adding that the IMF in its semi-annual report says the current episode of capital outflows started in around 2010 and is comparable to similar ones in the 1980s and 1990s. “The reasons are multi-faceted, ranging from declining commodity prices to high interest rates designed to bring down inflation. Underlying that poor cyclical performance are the structural problems of excessive regulation, inadequate investment, state-directed bank lending and corruption, problems that afflict most emerging markets to varying degrees,” according to the WSJ.
Speaking of central banks: Former Fed Chair Ben Bernanke said there is too much reliance on central banks to solve the world’s problems in a discussion current Chair Janet Yellen held with three predecessors (Paul Volcker, Alan Greenspan, and Bernanke). Yellen brushed off suggestions that the Fed’s December rate hike was a mistake, according to the FT (paywall). And while Yellen continues to see some slack remaining for the U.S. job market, she says the economy shows “tremendous progress” despite Donald Trump’s continued talk of a “bubble.”
Just in case you thought we’d leave off on a high note: Moody’s cut the ratings on Friday for Chevron Corp. and Royal Dutch Shell Plc by one level to Aa2 while while Total SA had its ratings fall two rungs to Aa3, Bloomberg reports. Chevron will generate negative cash flow “amid rising debt for at least the next two years, while Shell will have elevated leverage following its acquisition of BG Group Plc,” Moody’s said. Prices are expected to stay low throughout the year and continue putting pressure on Total’s operating cash flows and credit metrics, Moody’s said.
EGYPT IN THE NEWS
In case you haven’t heard about this yet, USD 81 mn were stolen from Bangladesh’s foreign reserves and ended up in the Philippines’ financial system. Now, Bangladesh police say they found suspicious malware in the Bangladesh central bank’s computer systems that was sending information to Egypt, according to the Singapore-based Straits Times. The malware “allowed information to be sent to an e-mail address in Egypt for more than seven hours at the time of the theft … we sought help from our Egyptian counterparts to find out the real person who was using that IP address during that period,” an investigator said.
More wheat corruption: Reuters picked up an Al Watan piece on the rampant corruption in the wheat sector, citing an Interior Ministry official. “We discovered a hacking of the system. We discovered huge sums,” said Major General Hosni Zaki, assistant to the Interior Minister and head of an intelligence unit that investigates supplies of commodities. “If the crisis is not solved, leakage of subsidies will continue.” Some 210 cases of corruption were uncovered from January to April due to hacking in the smart card programme, with Zaki putting the cost of that graft at EGP 22.7 mn and saying it involved 2,017 smart cards. He said workers in the company that runs the smart card system, traders and government employees had been arrested due to the corruption, but did gave to further details. Reuters’ Eric Knecht first broke the story of corruption in the smart card program in an investigative piece for Reuters last month.
More than 300 migrants arrived to the Strait of Sicily from Egypt on “a packed boat,” Italy’s coast guard said, according to Reuters. “A spokeswoman for the Italian coast guard said migrants had arrived from Egypt in the past, but much less frequently than from Libya, which is about half as far away by boat … The migrants were from Syria, Egypt, Somalia, Eritrea, Ethiopia, Palestinian territory, Libya, Sudan and the Comoros Islands, the coast guard said in a statement.”
Can Egypt’s parliament learn from Israel’s Knesset? That’s the headline that sits atop an Al Monitor piece interviewing MP Sayed Farag, who announced last month a plan to put together a parliamentary delegation to visit the Israeli Knesset. The Q&A is your standard Israel-Palestine-Egypt peace process fare, but does have one gem that was largely unexpected from a member of the infamous House of Representatives. On the cabinet reshuffle, Farah said: “We should give the government a chance and grant ministers some time to solve citizens’ problems, and then hold them accountable if they go wrong. Changing the government only a few months after its assignment is useless … Do not punish [a minister] for his intellectual or political affiliations, but rather [judge him by] what he is offering citizens. Whether the minister is communist, Christian or pagan, what he is giving citizens is the most important.” It is yet unclear how well other MPs will take the Knesset visit, particularly after the Tawfik Okasha/Israeli ambassador dinner fiasco.
Reuters has done a short photo-essay-meets-expose on the ailing tradition of hand-dyeing in Egypt. A shortage of FX needed to purchase goods has taken its toll on the industry, which has seen both profits and worker numbers dwindle.
The sugar conspiracy. “In 1972, a British scientist sounded the alarm that sugar – and not fat – was the greatest danger to our health. But his findings were ridiculed and his reputation ruined… Prominent nutritionists combined with the food industry to destroy his reputation, and his career never recovered. He died, in 1995, a disappointed, largely forgotten man.” (Read: The sugar conspiracy)
IMAGE OF THE DAY
Batman v Superman, by Omar Hazem (View image)
SpaceX successfully lands their Falcon 9 rocket on a drone ship floating in the Atlantic on Friday, after four previous failed attempts. (Watch, no audio, running time: 39 seconds)
DIPLOMACY + FOREIGN TRADE
Speaker of the United States House of Representatives Paul Ryan led a delegation from the US Congress for meetings with Egyptian officials on Thursday, according to a statement from the US Embassy in Cairo. The delegation met with President El Sisi, who said Egypt is committed to its strategic partnership with the US, according to Al Masry Al Youm. Ryan’s delegation also met with House of Representatives Speaker Ali Abdel Aal and Foreign Minister Sameh Shoukry, Daily News Egypt said.
Apache allocates USD 1 bn in new investments in Egypt in FY2016-17
Apache Corp. has allocated USD 1 bn in new investments into Egypt in its FY2016-17 budget, Oil Minister Tarek El Molla announced, following a meeting with Apache CEO John Christmann in Cairo. The meeting also discussed development projects conducted by Apache’s JVs with EGPC Khalda Petroleum Company and Qarun Petroleum Company. (Read in Arabic)
BASIC MATERIALS + COMMODITIES
Russian food company given green light to export poultry to Egypt
Russian meat processor Cherkizovo has received a license from the Agriculture Ministry allowing it to export poultry products to Egypt. This followed inspections carried out in March to ensure the poultry houses adhered to halal regulations. Cherkizovo will start to ship poultry products to Egypt within two months and expects shipments to Egypt to comprise 15% of Cherkizovo Group’s total export volume in 2016. (Read)
Metro Markets will invest EGP 350 mn over two years
Metro Markets are investing EGP 350 mn over two years to finance expansions, open new branches, as well as upgrade existing branches, said HR director Tamer Gouda. The company is looking to boost sales 22% y-o-y to EGP 2.2 bn from EGP 1.8 bn by increasing the number Metro and Kheir Zaman branches to 50 by the end of the year. (Read in Arabic)
El Sisi orders army to operate steel plant to break monopolies
President Abdel Fattah El Sisi ordered the Engineering Authority of the Armed Forces to study opening a steel manufacturing plant, either as a sole proprietor or in partnership with the private sector, said the authority’s head Gen. Kamel El Wazeer. The move was meant to “stabilise the price of steel,” which he says has fallen under the control of monopolistic practices, especially in light of the extensive construction projects undertaken by the authority, El Wazeer tells Al Masry Al Youm. He added that army experts have identified a plant in Helwan and have begun preparing a feasibility study on bringing the plant to operational capacity. (Read in Arabic)
HEALTH + EDUCATION
Eva Pharma to set up USD 30 mn factory in Saudi Arabia
Eva said it began building a USD 30 mn factory in Saudi Arabia, Al Borsa reported. The company’s Chairman expects the factory to begin operations in 2018. The factory will focus on producing tablets, sterile products, and vials. The company currently operates three plants in Egypt and one in Ethiopia. (Read in Arabic)
REAL ESTATE + HOUSING
Metawee Group looking construct EGP 450 mn administrative building in New Cairo
Metawee Group is looking to construct an EGP 450 mn administrative building in New Cairo over an area of 5,000 sqm, company Chairman Mohamed Metawee told Al Borsa. The company has also applied for a 100-feddan land plot in the Ras El Hekma area in the North Coast from the Tourism Development Agency, he added. Metawee Group has completed 60% of construction on the La Vida compound in New Heliopolis with an investment cost of EGP 400 mn, added Metawee, noting that the project is scheduled to be completed in 2017. (Read in Arabic)
TELECOMS + ICT
Orange Egypt requests more 3G bandwidth
Orange Egypt has asked the CIT Ministry to allow access to additional spectrum to provide 3G connectivity, Al Borsa reported. The company is yet to receive a response from the regulator. AN Orange Egypt vice-president is quoted as saying the company plans on offering 4G (LTE) services this year, Al Borsa adds. (Read in Arabic)
Bibliotheca Alexandrina commissions Huawei to build massive computing platform
The Bibliotheca Alexandrina announced it selected the Huawei high-performance computing (HPC) solution to build a massive computing platform. “Huawei HPC solution uses extraordinary high-density FusionServer servers and employs high-speed InfiniBand (IB) for computing networks.” The Bibliotheca will partner with Huawei and the CIT Ministry to build a new HPC cluster. “The HPC cluster is meant to be deployed for specialized applications that require immense mathematical calculations, such as bioinformatics, data mining, physics simulation, weather forecast, drilling for oil and groundwater, and cloud computing.” (Read)
AUTOMOTIVE + TRANSPORTATION
Suez Canal Authority agreement with Mitsubishi Heavy Industries to develop Port Tawfik, Port Said shipyards
The Suez Canal Authority signed an MoU with Mitsubishi Heavy Industries to prepare a study on upgrades to the Port Said and Port Tawfik shipyards, as well as technical and feasibility studies on building a new shipyard with drydocks, Al Mal reports. The MoUs also include technical training, said Suez Canal Authority Chairman Mohab Mamish. (Read in Arabic)
BANKING + FINANCE
Four renewable energy companies apply for loans worth about USD 200 mn from NBE
Four renewable energy companies have applied for USD 50-60 mn loans from NBE, sources tell Al Borsa. The bank expects to make a decision on the loans within the month, the source added. The loans will be used to finance equipment and machinery to build solar power plants. NBE has issued EGP 14 bn in loans to the power sector over the last two years and is issuing EGP 2 bn in new loans by May, the source adds, noting that 70% of the recipients are government companies. (Read in Arabic)
LEGISLATION + POLICY
Industrial Development Authority announces bill to expedite industry permits
The Industrial Development Authority (IDA) announced a bill that cuts red tape on obtaining industry permits and shortens the time to obtain them to 30 days, Al Masry Al Youm reports. The bill’s draft has been presented to the cabinet for review ahead of introducing it to the House of Representatives, said IDA head Ismail Gaber at the Saudi-Egyptian Future of Business and Investment forum. (Read in Arabic)
EGYPT POLITICS + ECONOMICS
House of Representatives publishes its report on gov’t program
The House of Representatives published its report on the government’s national program. The 391-page report drawn up by the Committee to review the national plan gave a vote of confidence on the Ismail cabinet and the national agenda. The report, however, stipulates that the government adopt the report’s detailed recommendations on all seven pillars of the government plan and to amend the plan accordingly. The report also called on the government to give a detailed presentation on the Egypt Vision 2030 and its agenda for review, expand the roles of parliament and civil societies in bringing about the national agenda, and tasking the different House committees with periodically reviewing progress on the seven pillars. If you have the patience to dive into the report, Al Masry Al Youm has a copy here.
ON YOUR WAY OUT
Star Wars: Rogue One trailer released: Disney released the trailer for the next Star Wars film, Rogue One, on Thursday. Set to arrive in US theaters in December 2016, the film is another prequel, taking place shortly before the events of Episode IV: A New Hope of the original trilogy. The most recent Star Wars release, the Force Awakens, was the third-highest grossing film of all time by nominal figures, and the 11th highest-grossing film of all time adjusted for ticket price inflation, according to Box Office Mojo. Star Wars Episode IV, released in 1977, remains the second-highest grossing film adjusted for inflation. (Watch trailer, running time: 1:57)
On that note: British tabloids are freaking out over this image of a “mysterious star wars building” captured by Google Earth in Egypt. “The mystery images were taken in Egypt and appear to show a formation which resembles a space base,” the Mirror says, The Sun is “stumped,” and the “bizarre structure” left the Daily Mail wondering if “it has links to UFO research.”
USD CBE auction (Thursday, 7 April): 8.78 (unchanged since Wednesday, 16 March)
USD parallel market (Thursday, 7 April): 10.30 / 10.32 (compared to 10.15 / 10.20 since Wednesday 6 April, Reuters)
EGX30 (Thursday): 7,478.74 (+0.25%)
Turnover: EGP 582.1 mn (34% above the 90-day average)
EGX 30 year-to-date: 6.747%
THE MARKET ON THURSDAY: Egypt’s benchmark index inched up 0.3% as true EGX30’s largest constituent, CIB, climbed 1.1% on the day. The index’s top performers were Eastern Company, United Arab Stevedoring, and Oriental Weavers. On the flip side, the worst performers were SODIC, Elsewedy Electric, and Orascom Construction. At a market turnover of EGP 582.1 mn, local investors were the sole net sellers. Regionally, Saudi’s TASI, Dubai’s General Index, and Abu Dhabi’s General Index were up 0.7%, 1.0%, and 1.2%, respectively.
Foreigners: Net long | EGP + 2.8 mn
Regional: Net long | EGP + 8.3 mn
Domestic: Net short | EGP – 11.1 mn
Retail: 73.9% of total trades | 70.3% of buyers | 77.4% of sellers
Institutions: 26.1% of total trades | 29.7% of buyers | 22.6% of sellers
Foreign: 11.2% of total | 11.4% of buyers | 10.9% of sellers
Regional: 8.2% of total | 8.9% of buyers | 7.5% of sellers
Domestic: 80.6% of total | 79.7% of buyers | 81.6% of sellers
WTI: USD 39.72 (+4.64%)
Brent: USD 41.94 (+5.27%)
Gold: USD 1,243.80 / troy ounce (+1.48%)
TASI: 6,258.1 (0.7%)
ADX: 4,351.7 (1.2%)
DFM: 3,386.1 (1.0%)
KSE Weighted Index: 361.0 (1.0%)
QE: 10,164.8 (1.3%)
MSM: 5,609.7 (0.6%)
07-10 April 2016 (Thursday-Sunday): Cityscape Egypt Conference, Cairo International Convention Centre, Cairo
10 April 2016 (Sunday): ITIDA Market Intelligence Workshop Series: Digital Transformation and New Models of Innovation, ITIDA Main Hall, Cairo.
10-15 April 2016 (Sunday-Friday): 13th Organization of Islamic Cooperation summit, Istanbul, Turkey.
11 April 2016 (Monday): The Egypt CIO Summit 2016, Nile Ritz Carlton, Cairo.
13 April 2016 (Wednesday): The “ As Goes Egypt, So Goes the Middle East” conference, Harvard Law School, Cambridge, MA, USA
13-16 April 2016 (Wednesday-Saturday): Cafex, Cairo.
17-18 April 2016 (Sunday-Monday): German economic delegation visits Cairo.
31 March-22 April (Thursday-Friday): The Downtown Contemporary Arts Festival (D-CAF), various locations, 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.
10 May (Tuesday): Business News Foundation’s Third Annual Energy Conference: Energy and Sustainable Development, InterContinental Hotel Citystars Cairo. Register here.
16-17 May (Monday-Tuesday): Egyptian-Bahraini committee meets, Cairo.
25-26 May (Wednesday-Thursday): The Middle East and North Africa Solar Conference and Expo MENASOL 2016, Hyatt Regency, Dubai.
02-03 June (Thursday-Friday): The first annual EBRD Research Symposium on The Economics of the Middle East and North Africa, EBRD headquarters, London, UK.
06 October (Thursday): Armed Forces Day (national holiday)
27 November 2016 (Sunday): 2016 Cairo ICT Conference Group
04-06 December 2016 (Sunday-Tuesday): Solar-Tec Conference, Cairo International Convention Centre, Cairo