|
IN BRIEF
WTO expects quick recovery
for Sharm Al-Sheikh
The World Tourism Organization (WTO) predicts that the recent bombings
in Sharm Al-Sheikh will have only a short-term effect on tourism.
In its latest market intelligence report it noted the perceptible
shift in the market’s attitude regarding the threat of terrorism
over the past few years. Tourism has become more resilient as people
have come to accept higher levels of uncertainty than in past years,
it said.
Like most other emerging markets in the Mediterranean and the Middle
East, Egypt has experienced healthy tourism growth over the past
several years. Tourism grew 34.1 percent in 2004 with 8.1 million
tourists visiting the country despite continued regional instability.
According to the WTO report, various events have taken place that
would normally slow down Egypt’s tourism development, but on
each occasion, tourism experienced only a temporary slowdown and
went on to recover within a relatively short period of time. Given
this trend, the WTO predicts a low level of cancellations and a
resumption of new bookings within two to three months.
Bourse launches same-day trading
The Cairo & Alexandria Stock Exchanges (CASE) will adopt a new
system allowing the selling of securities traded earlier on the
same day. Approved by Egypt’s Capital Market Authority (CMA),
“same-day trading” is a part of efforts to upgrade the
performance of the stock market and help enhance liquidity. Customers
will be free to choose either the new same-day (T+O) trading system,
or the existing pre-defined (T+2) settlement system.
While the executive procedures are still being worked out, it has
been agreed that securities will be traded through a CMA-approved
brokerage that has deposited at least £E 5 million in the
clearing bank settling the transactions. The brokerage must inform
its clients of the potential risks and CASE must have a copy of
the contract signed by the brokerage and the client. The brokerage
can only trade 1/10,000 (one in ten thousand) of its securities
registered on the CASE. After the day’s trading session, MCSD
will inform CASE of the total volume of each of the broker’s
transactions. The CMA will stop a brokerage from trading under the
new system only when necessary to ensure the stability of the market
and to protect traders and clients.
CSFB to manage Telecom Egypt sale
The Ministry of Communications & Information Technology (MCIT)
selected CSFB, the investment banking unit of Credit Suisse –
Switzerland’s second-biggest lender, to manage the sale of
a stake in Telecom Egypt, the country’s only fixed-line operator.
CSFB won the Telecom Egypt contract over two local banks and seven
foreign banks, including Europe’s largest lender, HSBC Holdings
Plc, the third-biggest US bank, JPMorgan Chase & Co, and Morgan
Stanley, the world’s largest securities firm. According to
government officials, the divestment may raise up to $1 billion,
making it the largest sale of a state asset in Egyptian history.
The sale will be conducted through an initial public offering (IPO)
in Egypt, possibly together with global depositary receipts (GDRs)
to be traded in London and Gulf cities.
Electricity grids linked
President Hosni Mubarak has inaugurated the first phase of Egypt’s
largest power generating station in northern Cairo. The station
currently has a capacity of 750 megawatts and upon completion of
the second stage, its total production capacity will be equal to
that of the High Dam at 1,500 megawatts. As part of the unified
national electricity grid, the station is an important generator.
According to Minister of Electricity and Energy Hassan Younis, the
unified grid is still coming together. Sharm Al-Sheikh, Dahab, Nuweiba
and Taba have already been linked to the unified grid and all other
Sinai cities are expected to be linked to the grid by the end of
the year. The northern coast cities from Al-Arish to Marsa Matrouh
and Salloum have been linked to the New Valley and Baharia Oasis
unified grid and Cairo will be the hub of the electricity link between
the Arab Mashreq and Maghreb and the EU. Younis added that Egypt
has already linked its grid with Libya and the project is in progress
to connect with African countries.
Arab natural gas pipeline
nears completion
The first two phases of the Arab natural gas pipeline are 90 percent
completed, Minister of Petroleum Sameh Fahmy announced during a
meeting of the oil ministers of Egypt, Jordan, Syria and Turkey.
The project, which was initiated in 2003, aims at creating a natural
gas pipeline to connect the entire Arab region and Europe, via Turkey.
During the meeting, Egypt and Syria signed an agreement to set up
a company to implement the third phase of the project, which will
extend the pipeline from Jordan’s Rihab region to the Syrian
city of Homs and then to the Syrian-Turkish borders. Fahmy said
negotiations are currently under way to determine whether the company
should follow the BOT system or take the form of a private-public
partnership. The project is expected to be completed by 2007, ahead
of schedule.
In a separate development, the Egyptian Natural Gas Company (GASCO)
will receive approximately s50 million from the European Investment
Bank (EIB)’s Facility for Euro-Mediterranean Investment and
Partnership (FEMIP) to extend two gas pipelines that are part of
the national gas transmission system that delivers natural gas from
Egyptian gas production fields, both offshore and onshore, to destinations
throughout the country. The extension will help strengthen the gas
transmission system and transport natural gas to major power plants,
industries and domestic consumers.
EgyptAir adds to fleet
Boeing and EgyptAir have concluded contract negotiations for an
order of up to a dozen 737-800s. EgyptAir has placed a firm order
for six aircraft with purchase options for an additional six. The
deal is valued at $850 million, and constitutes a significant investment
in EgyptAir’s fleet renewal.
The national carrier will take delivery of its first 737-800 in
September 2006, with the remaining aircraft joining its fleet through
December 2009.
EgyptAir currently operates with four Boeing 737-500s, five 777-200s
and two 747-300s as well as a number of Airbus planes as part of
its mixed fleet. The airline operates 400 weekly flights from Cairo
and several Egyptian cities to more than 66 international destinations.
Post office takes a gamble
The National Postal Organization (NPO) has signed a d10 million
agreement with Intralot to develop a national lottery and gaming
service network. According to the terms of the contract, Intralot
will hold an 85-percent stake in the joint venture and will install
an online automated LOTOS platform system complete with a telecommunications
network, management software and monitors in post offices and other
sales points. The project is expected to begin in the first quarter
of 2006.
The NPO operates approximately 3,400 post offices around the country
employing 45,000 workers and managing 12 million active accounts
– more than 50 percent of the Egyptian market.
QIZ boosts clothing exports
Egyptian exports increased by 25 percent thanks in a large part
to the Qualifying Industrial Zone (QIZ) protocol signed on December
15, 2004 and initiated in February 2005. The boost is being attributed
to the increase in Egyptian clothing and textile exports to foreign
markets, which the QIZ helped make possible. Exporters expect ready-made
clothes shipments to increase to $1.5 billion in FY 2005-06 compared
with $850 million in 2004-05. However, if they are to maintain market
growth, exporters stress the need for providing good quality products
at competitive prices. They have also noted the necessity of marketing
companies to help familiarize them with the trends in international
markets.
Dubai firm to develop
Cairo suburb
Dubai-based Emaar Properties has entered the local real estate market
with a large-scale project in Egypt – a $4 billion, 4 million
square meter development on the outskirts of Cairo. The residential,
commercial and recreational “Cairo Heights” community
is being developed by Emaar Misr, a subsidiary of Emaar Properties
and Al Nasr Housing & Development Company, an affiliate of Housing
Tourism & Cinema Holding Company. The mixed-use community will
stretch over Cairo’s Mokattam suburb. It will have seven districts
and offer a variety of residential buildings as well as a town center,
a private clubhouse, hotels, restaurants, cafés, schools,
swimming pools, health-care facilities, retail centers and mosques.
Construction is due to begin later this year and is scheduled to
be completed in 2010.
Hotel awarded $15 million in lawsuit
Le Meridien Hotels & Resorts was awarded $15 million in damages
in its lawsuit against the Saudi Egyptian Company for Touristic
Developments (SEDECO), owners of the hotel formerly branded as Le
Meridien Cairo. The International Arbitration Tribunal ruled in
favor of Le Meridien, citing that the company’s management
contract was terminated prematurely without due course or legal
justification.
The hotel chain managed the former Le Meridien Cairo for 30 years
until its contract was terminated in August 2002. Legal evidence
presented during the tribunal demonstrated Le Meridien’s successful
hotel management and its adherence to the clauses of the contract,
which helped secure the verdict and compensation. Le Meridien still
manages two properties in Cairo – one near the Pyramids and
one in Heliopolis – as well as one in Luxor and Le Meridien
Makadi Bay on the Red Sea.
$1 billion for Israeli-Egyptian
power scheme
Egyptian businessman Hussein Salem and his Israeli partner, Yossi
Meiman, are initiating the construction of a $1 billion power plant
in Al-Arish to supply electricity to Israel and the Palestinian
Authority. The project will be the third joint project for the pair.
The power station will reportedly have a production capacity of
1,200 megawatts, which is equal to 10 percent of the current capacity
of the Israel Electric Corporation. Some of the electricity could
be used to power a desalination plant that would provide water to
the Gaza Strip to ease the severe shortage of drinking water. The
European Investment Bank, which has funded the pair’s other
endeavors, is expected to provide financing for the new project.
New U.S. ambassador appointed
US president George W. Bush has appointed a career diplomat to be
the next US ambassador to Egypt. Ambassador Francis Ricciardone
most recently served as the US ambassador to the Philippines. He
has also served in several other US diplomatic missions including
two tours in Turkey, where he was deputy chief of mission and chargé
d’affaires. Ricciardone has worked in Amman, London and Cairo,
in addition to serving on multinational military deployments in
the Sinai and along the Turkey-Iraq border. In Washington, he has
worked in the State Department’s intelligence branch, the Near
East bureau and as a manager. Besides English, Ricciardone speaks
Arabic, Italian, Turkish and French.
MIBank goes French
Société Générale Bank (SocGen) has acquired
a 69.7-percent stake in Misr International Bank (MIBank) for $420
million, beating out fellow French bank BNP Paribas. MIBank shareholders,
with a 69.7-percent stake in the company, agreed to sell their shares
to SocGen’s Egyptian arm, National Société Générale
Bank (NSGB). The combination of Egypt’s second and third largest
publicly listed banks is expected to total about £E 29 billion
in total assets, £E 25.8 billion in total customer deposits
and £E 13.9 billion in combined net loans.
EGPC issues $1.54 billion bond
The Egyptian General Petroleum Corporation (EGPC) issued a $1.54
billion bond to meet its financing needs until its exports of liquefied
natural gas (LNG) begin to produce returns. The bond proceeds will
also enable EGPC to maintain its desired levels of investment in
new and existing oil and gas developments as the net benefits from
gas exports increase. In addition, the bond issue will contribute
to Egypt’s balance of payments and help offset the impact the
bombings at Sharm Al-Sheikh are likely to have on foreign-exchange
earnings.
The issue was launched on July 14 and closed one week later, reportedly
well above the $1 billion target set by EGPC. The transaction had
three tranches, two of which were AAA-rated on the basis of separate
insurance wraps. The first is worth $400 million and carries a coupon
of 4.623 percent; the second is for $250 million, with a coupon
of 4.633 percent. Both mature in 2010. The third tranche is BBB-rated
and totals $903 million with a coupon of 5.265 percent and matures
in 2011.
Misr Cement denies takeover bid
Egypt’s Misr Cement (Qena) is denying reports that the world’s
top cement maker, Lafarge SA of France, is contemplating a takeover
bid worth $270 million. Qena notified the Cairo & Alexandria
Stock Exchanges (CASE) that the report was untrue, despite a report
by the independent business weekly Al-Mal that Hamdy Zenhom, general
manager for investment at National Bank of Egypt, said Lafarge was
attempting a buyout. Zenhom said a sale to the French company would
require approval from Egypt’s investment ministry, as 40 percent
of Qena is owned by the state.
If the deal were to take place, Lafarge would become Egypt’s
third-largest cement producer by capacity as it already controls
two other Egyptian cement makers, Beni Suef Cement Co. and Alexandria
Portland Cement Co. Qena accounts for an estimated 3.5 percent of
the nation’s total cement production capacity.
Exports jump 36 percent
Minister of Foreign Trade and Industry Rachid Mohamed Rachid announced
that total Egyptian exports increased by 36 percent, totaling $6
billion in FY 2004-05. He said the industry growth rate rose by
3.9 percent in the third quarter and total investments in the industrial
sector stood at £E 174 billion.
UK wheat approved for
import
The General Authority for Supply Commodities (GASC) has reached
an agreement to begin importing wheat from the UK. The agreement
between GASC and the Home Grown Cereals Authority (HGCA) obligates
both parties to do everything possible in order to facilitate trade
with UK exporters. Egypt imports between 6 million to 7 million
tons of wheat each year, but this is the first time the UK has been
added to the list of potential suppliers.
400 new Nile Valley villages
on order
The Egyptian government is completing a study on a mega-project
to develop the Nile Valley by building 400 new villages in the desert
hinterland. Over the next 10 years, it is expected that the villages
will be able to accommodate up to 5 million people and will boost
Egypt’s total arable land by approximately 0.5 million feddans.
In addition to residential areas, a number of commercial and industrial
projects will be established specifically to aid in job creation
for young people. The new communities are expected to extend up
to 10 square kilometers on both sides of the River Nile.
Egypt signs five oil and gas agreements
Egypt’s Janoob El-Wadi Oil Holding Company signed five oil
and gas exploration agreements totaling $109.5 million for 23 oil
wells with international oil companies from the US Australia, Japan,
Britain and India. Operations will be conducted in the Gulf of Suez
and the Western Desert.
Minister of Petroleum Sameh Fahmy stated that a total of 38 agreements
in the oil sector were signed this year with international companies
worth about $1.4 billion for some 149 wells.
Submit
your comment
Top
|
