HOUSE PANEL CONSIDERS $21.3 BILLION AID PACKAGE Source: Defense Daily International, May 26, 2006
The House Appropriations Committee is weighing a $21.3 billion spending package for foreign operations in 2007 this week that would fully fund foreign military aide to Israel and Egypt.
The House Appropriations foreign operations subcommittee backed the bill last week that cut about $2.3 billion from the overall foreign aid package proposed by the Bush administration. The full appropriations committee is expected to mark up the bill on Thursday.
"The proposal strikes a difficult balance among the competing priorities, while remaining fiscally responsible," said Rep. Jim Kolbe (R-Ariz.), chairman of the foreign operations spending panel.
The bill would match the Bush administration's $2.1 billion for military spending in Israel and $1.2 billion in military aid for Egypt. Rep. David Obey (R-Wis.), the top Democrat on the House Appropriations Committee, is expected to fight to cut some aid to Egypt over concerns about the nation's human rights record.
Lawmakers signaled some frustration with reconstruction in Iraq by scaling back that account to $522 million, a $227 million cut. All told, Iraq would still receive $8.2 billion in combined economic and military aid under the spending proposal.
Other military aid included in the bill: $1.8 billion for Iraq, $569 million for Afghanistan, $208 million for Jordan, and $100 million for Colombia.
EGYPT U.S. INSPECTORS PRAISE SECURITY MEASURES IN CAIRO INT. AIRPORT Source: Asia Africa Intelligence Wire, May 18, 2006
The U.S. Department of transport's security committee has praised the security measures applied at Cairo international airport to secure flights and check luggage.
Members of the committee Tuesday16/5/2006 inspected all terminals to see for themselves the security measures being applied to ensure security and safety of both flights and passengers.
For further information on Egypt-U.S. Relations (click here).
BANKS GIVE EGYPT HIGH MARKS FOR REFORM Source: Ministry of Investment, May 27, 2006
The investment bank JP Morgan has highlighted the Egyptian economy's positive development in a new report that notes Egypt recorded a large increase in net direct foreign investment (FDI), which rose to USD 3.9 billion in the first half of the current financial year (FY2005/06) from USD 2 billion in FY2003/04 and is expected to reach USD 5 billion by the end of 2005/06.
The Egyptian economy's expansion lies in its diversity and ability to accept many investments from promising sectors such as petroleum, tourism, building and construction, which recorded 12 percent growth in the current financial year.
The report also noted that the Egyptian bourse's performance topped global markets in 2005 and any downturn is temporary, based on economic principles.
The World Bank rated Egypt 6th in the world for progressing economic reforms implementation.
The report showed the developments recorded by the Egyptian economy in respect to the macroeconomy and structural reform:
EGP exchange stability compared to foreign currencies. One of the main reasons for this stability is foreign investment flowing into the Egyptian economy.
GDP expected to increase to 6 percent in the current financial year. The report expected GDP to rise to 6.5 - 6.9 percent in FY 2006/07.
Bank's positive developments especially the bank restructuring programme aiming to support the existing banks in Egypt and increasing the sector’s ability to offer credit and deal with the market's risks.
Offering Bank of Alexandria, which is considered the third largest public commercial bank. The bank received offers from 13 institutions, which shows the financial and the business' community’s trust in the Egyptian economy.
The report expected continuing surpluses in the current balance of payments account, resulting from increased exports of oil and natural gas, in addition to increase in tourism receipts.
Revenues from tourism are expected to reach USD 7.2 billion in 2006 compared to USD 6.4 billion in 2005, in addition to the number of tourists increasing to reach 9.6 million this year from 8.5 million, the report said.
Standard Chartered Bank
Standard Chartered Bank referred to the FDI increase resulting from international and local confidence in the Egyptian government's reforms; the substantial development Asset Management Programme; offerings in the banking sector; the new strategy adopted in the industry sector and investment incentives in the qualified industrial zones.
In addition to positive effects on the foreign investments' flow and the balance of payments, and its impact on revenue contribution to the government and contribution to reducing the budget deficit.
The report showed tax revenues increased in spite of the tax reductions, which spurred economic growth.
Moody's credit rating agency
Moody's credit rating agency upgraded its rating for the private sector's foreign financing risk for many countries raised Egypt's evaluation to Baa2 from Ba1 and says the outlook is stable in the long run.
The investment evaluation given to Egypt increased by two points from the last evaluation and exceeded other evaluations given to Jordon, Brazil, Turkey, Argentina, Columbia and Croatia.
The risks of the Egyptian private sector's foreign financing had decreased.
Moody's evaluation focuses on the government ability to manage external debt, and the commitment to interfacing the local and international economy.
The evaluation also refers to government fidelity for its external commitments and deepening the merging of the Egyptian economy in the international economy.
According to this evaluation, the Egyptian private sector will be able to raise financing in international markets more easily at lower cost.
BUDGET DEFICIT DECREASES Source: Al Masry Al Youm, May 27, 2006
The indicators for the first 9 months of the FY 2005/2006 depicted a decline in the budget deficit to reach LE 28.9 billion, compared to around LE 30.0 billion incurred the same period the last FY, thus representing 4.9% of GDP, compared to 5.6% of GDP for the same respective periods.
EFG-HERMES IS GRANTED THE SAUDI LICENSE Source: Gulf News & Zawya, 16 May 2006
The Capital Market Authority of the Kingdom of Saudi Arabia granted EFG-Hermes (AmCham Member) (link here) Saudi Arabia an investment banking license on the 15th of May 2006.
The Saudi market is by far, the largest financial market in the region representing around 70% of Egypt, Levant and GCC region's Investment Banking fee wallet (including brokerage and asset management).
"This is a significant milestone for EFG-Hermes in our journey to create the first truly regional and full service Investment Bank based in the Middle East. Through our very successful businesses in Egypt and the UAE, we currently address around 16% of the region's fee wallet and the addition of Saudi Arabia will increase our footprint to over 85%" said Mr Yasser El-Mallawany Chairman and CEO of EFG-Hermes.
Mr Hassan Heikal, co-Chairman and CEO added "the Saudi license is the most important addition to our regional expansion strategy and we are very excited about the opportunity it represents. The roll out plan for our operations in the Kingdom is well thought through and documented and we are now ready for the execution phase".
For Amcham’s Banking Sector Developments in Egypt New (click here).
EGYPT'S ORASCOM SEEKS BIGGER STAKE IN PARTNER HUTCHISON. Source: Globes, May 23, 2006
Egypt's Orascom Telecom (link here) is actively seeking to obtain the permission of Israel's Ministry of Communications to increase its stake in Partner Communications Ltd., says Orascom Telecom chairman and CEO Naguib Sawiris. He made the comment at the World Economic Forum on the Middle East in Sharm el-Sheikh in Sinai.
Sawiris added that Orascom Telecom also wanted to fully merge with Hutchison Telecommunications International Ltd., which owns 51.8% of Partner. He said Orascom Telecom was working towards this end, which he believed would take a long time to complete.
Orascom Telecom initially wants to increase its stake in Hutchison Telecommunications (link here) from 19.3% to 23%, which would indirectly increase Orascom's stake in Partner. That is subject to their approval, and there is a requirement in Israel to get approval from there, and we're working on that, he said.
In December 2005, Orascom Telecom bought 19.3% of Hong Kong-based Hutchison Telecommunications, the telecommunications arm of Hutchison Whampoa Ltd., for $1.3 billion. At the time, deal was constructed so that Orascom Telecom's indirect stake in Partner would not reach 10%, which would require the permission of Israel's Ministry of Communications. Under the deal between Orascom Telecom and Hutchison, Orascom has the right to increase its stake in Hutchison Telecommunications by 3.7% to 23%, which would give Orascom an indirect stake of 11.9% in Partner.
NOVODYNAMICS AND BIBLIOTHECA ALEXANDRINA SIGN RESEARCH PARTNERSHIP AGREEMENT Source: PR Newswire, May 24, 2006
NovoDynamics, Inc. (link here), an Advanced Image Discovery Company and the creator of the world's most advanced Arabic language optical character recognition (OCR) solution, announced today a research partnership with Bibliotheca Alexandrina (link here), the premier Library of Alexandria, Egypt, and a leader in library reference digitization.
The mission of Bibliotheca Alexandrina is to be a center of excellence in the production and dissemination of knowledge. In line with this mission, the organization is taking serious steps towards building a universal digital library.
A key challenge in digitizing its library is the conversion of its degraded Middle Eastern references into searchable computer text. In order to perform the conversion efficiently, Bibliotheca Alexandrina evaluated several computer software products that perform Arabic OCR.
After completing its analysis, Bibliotheca Alexandrina selected NovoDynamics' VERUS(TM) Professional product as one of its digitization solutions. "We performed initial comparison tests between multiple OCR products to determine which one offered the highest recognition accuracy and we were very impressed with VERUS' performance and NovoDynamics' drive for product excellence," stated Noha Adly, Bibliotheca Alexandrina's ICT and ISIS (International School of Information Sciences) Director.
Based on NovoDynamics' superior technology and Bibliotheca Alexandrina's significant expertise in library digitization, the two organizations established a research partnership in order to advance NovoDynamics' commercial products.
According to David Rock, President and CEO of NovoDynamics, "We are honored to be selected by the foremost library in the Middle East to accomplish the Library 's goal of digitizing its historical collection of Middle Eastern language texts. We are excited about the opportunity to collaboratively work with Bibliotheca Alexandrina to create exciting solutions for library digitization, document management, and document exploitation markets."
NovoDynamics offers both Standard and Professional editions of VERUS. VERUS Standard provides recognition support for Arabic, Farsi (Persian), Dari, and Pashto languages, including embedded English and French text; automatic language and font detection; the ability to view both original and cleaned versions of a page; and an integrated spell checker for fast text verification.
In addition to VERUS Standard features, VERUS Professional offers an application programming interface (API); distinguishes handwritten from machine printed pages; allows document images and their extracted text to be exported as PDF with hidden text files; and provides special plug-in technology that allows third-party machine translation products to be seamlessly integrated into the VERUS Professional environment.
REDEVELOPMENT PROJECT IN EGYPT BY EMAAR SUBSIDIARY Source: Mena Report, May 23, 2006
A Memorandum of Understanding (MoU) was signed on Monday to develop a new waterfront redevelopment project in the Egyptian city of Alexandria by a subsidiary of UAE-based Emaar (link here) Properties and Artoc Group along with Alexandrina Bibliotheca (Alexandria Library).
The MoU, signed by Emaar Misr for Development S.A.E. and Artoc Group (AmCham Member) (link here) for Investment and Development, marks the fifth major foray into Egypt for Emaar, according to Khaleej Times. The redevelopment project aims to provide a spectrum of facilities on 'Kouta Land', west of the library.
"It is truly an honor for Emaar to be working on this Bibliotheca Alexandrina redevelopment project," said Emaar Chairman Mohammed Ali Alabbar at the MoU signing ceremony in the resort town of Sharm El Sheikh in Egypt's.
Last year, Emaar announced the development of a 4 million square meter residential, commercial and recreation development in Cairo, as well as a 280 acre integrated community in Egypt's Smart Village. Smart Village features a hotel, residential apartments, a convention and exhibition center, commercial, office space as well as a shopping center.
Emaar is reportedly planning additional projects in Egypt in the future.
INTEL CAPITAL SIGNS TWO NEW WIMAX AGREEMENTS Source: TelecomWorldWire, May23, 2006
Intel Capital (link here), Intel Corporation's venture capital investment unit, has revealed it has signed two Wireless Interoperability for Microwave Access (WiMAX) agreements.
According to Intel Capital, the agreements are for an investment in Worldmax, a joint venture with Enertel Holding of the Netherlands, and in Orascom Telecom WiMAX Limited, a joint venture with Orascom Telecom of Egypt.
Orascom Telecom WiMAX Ltd will focus on obtaining suitable spectrum licenses for the deployment of WiMAX services in the Middle East and parts of Asia, while Worldmax will aim to deploy WiMAX services in the Netherlands. Enertel will provide an existing 80MHz at 3.5GHz spectrum license to support the new venture in the Netherlands and said the wireless broadband access service will complement current fixed-line broadband access services.
Worldmax will provide wireless access and services through agreements with resale channels, while Orascom Telecom WiMAX Ltd will introduce Internet connectivity to some people in the Middle East and other areas for the first time.
Intel Capital will act as the lead investor, with the new companies majority-owned by Orascom Telecom of Egypt and Enertel Holding respectively. It expects the investments to
be completed, following the receipt of certain approvals and the fulfilment and satisfaction of various condition precedents.
EGYPT BILLIONAIRE AIMS TO BUILD SATELLITE TV EMPIRE Source: Financial Times, May 22, 2006
Naguib Sawiris, Egypt's billionaire businessman hopes to become a new independent satellite television mogul in the Middle East, replicating his regional success in telecommunications.
The head of the Cairo-based Orascom Telecom Holdings, the region's largest mobile telephone operator, is already majority-owner in two satellite television stations, Melody music and Melody films. He is now starting a third entertainment channel dedicated to young audiences and has applied for a licence to launch a 24-hour satellite news channel for Egypt's domestic market.
Mr Sawiris is also expecting gradually to turn an Iraqi terrestrial general channel he owns into a broader regional satellite news channel to one day compete with the popular Qatar-based al-Jazeera and Saudi-owned al-Arabiya. The foray into satellite media, a field that, outside al-Jazeera, has been largely dominated by Saudis - Prince Waleed bin Talal, the high-profile international financier, has been building his own satellite media empire - appears to be driven by business as much as political motives.
"When I started Orascom, I started a regional activity, and I believe I can replicate the story in media," he said, on the sidelines of a World Economic Forum conference in the Egyptian Red Sea resort of Sharm el Sheikh. "Here (in the Middle East), most stations are family-owned, royal-owned or government-owned."
SAVOLA SIME EGYPT PURCHASE Source: ME Financial Newswire & Zawya, May 23, 2006
Cairo-based Savola Sime Egypt (link here), a subsidiary of the Saudi food conglomerate, Savola Group, acquired 70% in Alexandria-based plastics manufacturing firm. Abdel Raouf Mohammed Manaa, managing director of Savola Group and Savola Sime Egypt, stated that “We have completed an acquisition deal on 70% of New Marina Plast’s (link here) shares whereby the company is valued at EGP90 million (US$15.5 million)”.
In the coming days, the management of New Marina will be transferred to Savola, Manaa added. He noted that the acquisition came as part of an expansion strategy by which Savola Sime, a specialized producer of edible oils and packaging materials, aims to increase its stake in the plastics sector. The takeover would allow Savola Sime to benefit from the market positions, which New Marina Plast already holds in export markets in the Middle East and Europe.
Established in 1977, New Marina Plast is a private company that specializes in plastic injection molding. In line with a decision taken at the beginning of 2006, the shares of Savola Sime were de-listed on March 23 on the Cairo and Alexandria Stock Exchanges and began trading on the OTC market. The shareholders also decided to change the company’s name to Afia International Company.
IFC TO LOAN US$25 MLN FOR OIL & GAS PROJECTS IN PAKISTAN, EGYPT Source: Asia Pulse, May 26, 2006
The International Finance Corporation (link here), the private sector arm of the World Bank, has signed a US$25 million financing package for Rally Energy Corp to support upstream oil and gas projects in Pakistan and Egypt.
In Egypt, the mining and hydrocarbon sector plays a significant role in the country's economy, generating about 15 per cent of GDP, 37 per cent of export earnings, and the bulk of foreign investment.
However, oil exports from Egypt have been under pressure as production at oil fields has fallen and domestic consumption has increased.
EGYPT AND CANADA TO LAUNCH $3 BILLION JOINT VENTURES IN ENERGY SECTOR Source: Arab Press Digest, 16 May 2006
Egypt and Canada have almost completed negotiations on two petrochemicals and gas joint ventures in Egypt with a total cost of $3 billion, said Philip MacKinnon the Canadian ambassador to Egypt as quoted by the London-based daily Asharq al-Awsat on Tuesday.
MacKinnon added that Canadian investments in Egypt reached $400 million last year, in an investment climate that he characterized as safe and encouraging.
He did not reveal additional information on the two planned joined ventures in the energy sector when speaking at a signature ceremony for a memorandum of cooperation between the Canadian Chamber of Commerce in Cairo and the Egyptian general union of Chambers of Commerce.
Earlier in February, media reports had said that the Egyptian ministry of petroleum would embark on two large petrochemicals projects with investments of about $1 billion from the Egyptian private sector and Canada.
The Egyptian government's plans for boosting the petrochemicals sector in Egypt include a $9.5 billion petrochemical project in Kafr El Sheikh industrial zone in Egypt's northern Nile Delta. This project is considered the largest in the country.
Natural gas is likely to be the main source of growth in Egypt's energy sector for the foreseeable future thanks to recent gas discoveries. Average natural gas production in Egypt, which totaled about 3.6 billion cubic feet per day in 2004, is expected to rise to around 5 billion cubic feet per day by 2007.
TURKISH TEXTILE COMPANIES INVEST IN EGYPT Source: Turkish Daily News, May 19, 2006
The Turkish textile and ready-wear sector is seeking to invest in places where input costs are kept to a reasonable level, such as Egypt, with Menderes Tekstil, Calik Group and Abalioglu among the Turkish companies already active in the country.
Aegean Ready-Wear and Apparel Exporters Association (EHKIB) President Jak Eskinazi said Cairo had recently signed free-trade agreements with the EU and the United States under the (QIZ scheme), in the process attracting the Turkish textile sector, which is complaining about constantly increasing output costs in Turkey. Labor costs in Egypt average around $70 per month, while energy is one-third of what it is in Turkey.
For AmCham’s Textile & Clothing Industry Study (click here).
NUMBER OF KUWAITIS VISITORS TO EGYPT INCREASES 30% Source: MENAFN - 27/05/2006 & IPR Strategic Business Information Database, May 25, 2006
Egyptian officials said that Kuwaiti tourists accounted for 43,000 tourist nights in Egypt between January and April, a 30 percent year-on-year increase, Gulf News reported.
Middle Eastern travelers account for 20 percent of all visitors to Egypt.
Kuwait is the GCC's second largest tourism market for Egypt after Saudi Arabia.
The minister added that obstacles surrounding visas, property ownership and even public transportation have all been eliminated, fuelling increased interest in residential tourism offerings, new luxury resorts and recently introduced services.
A total of 8.6 million tourists visited Egypt in 2005, 1.7 million tourists came from the Middle East. Some 100.000 Kuwaitis visited Egypt last year, said the Minister, noting that Kuwait comes second after Saudi Arabia on the list of Gulf countries that favors Egypt as their best tourist destination. The Egyptian minister arrived in Kuwait Tuesday afternoon on a three-day visit for talks with Kuwaiti officials on means of boosting bilateral ties and promoting the coming Egyptian tourist summer season.
EGYPT HOPES FOR SAUDI RECORD Source: Middle East Travel and Leisure News Wire, May 20, 2006
Egypt is hoping to receive a record number of tourists from Saudi Arabia this summer. Last year, the number of GCC tourists visiting Egypt rose by 40%, helped mainly by more than 350,000 Saudi visitors.
So far this year, from January to April, just over 80,000 Saudis have holidayed in Egypt, and tourism officials in the North African nation are anticipating record numbers this summer to popular destinations such as Cairo and Alexandria.
Compiled by: Business Studies & Analysis Center E-mail: Studies@amcham.org.eg If you want to receive this bulletin on a regular basis, fill out this form
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