Cameroon walked away with the African Cup of Nations championship after defeating Egypt 2-1 in what was a disappointing final for Egypt’s national team. Unlike previous games that saw the Pharaohs scoring in the last minutes, Mohamed Elneny — who sat out the last two games due to injury — scored in the 22nd minute (watch) on the back of strong play from Amr Warda and Mohamed Salah. The goal put Egypt at ease and the second half of the match saw the Pharaohs’ performance lose its luster. Cameroon managed to get two shots past goalkeeper Essam El Hadary at the 59th and 88th minutes. 44-year-old El Hadary, whose return to the national team for the championship brought back warm, fuzzy memories of Egypt’s last Afcon win in 2010, was named Best Goalkeeper for the fourth time in his career.

“They asked me to qualify for the Africa Cup of Nations and play it; they didn’t ask me to win it,” said head coach Héctor Cúper. In a piece by the Guardianwhich juxtaposes the downward spirals in the fortunes of both Cúper and the national team over the past few years, the head coach discusses what was at stake in the tournament, and how, even in second place, the team beat all the odds and resurrected his career.

Waiting for Godot: There is little evidence an economic recovery is underway, according to the Emirates NBD Egypt’s PMI reading, which registered 43.3 in January. “Egypt’s non-oil private sector began 2017 in the same way that it ended 2016, with economic conditions worsening again. Underpinning the downturn were ongoing reductions in output and new orders,” which fell for the sixteenth straight month. Average prices charged increased at survey-record pace and employment fell for the twentieth straight month as well. Jean-Paul Pigat, Senior Economist at Emirates NBD points to the silver lining in the report, saying it is “encouraging that the new ‘Future Output Index’ of the PMI suggests that firms have become increasingly optimistic on the economic outlook following November’s devaluation of the EGP.”

IPO WATCH- The government is reportedly considering increasing the percentage of Banque du Caire shares set to be listed to 30% from an initial plan of 20%, sources told Al Shorouk. The extra shares would be listed as GDRs in London to “attract foreign investors.” Banque du Caire had informed the EGX of its desire to list 562.5 mn shares at a par value of EGP 4 per share, giving it a market capitalization of EGP 2.25 bn. EFG Hermes and HSBC are managing the issuance and Baker & McKenzie are legal advisors.

In other news from capital markets: Local franchise The Bakery Shop (TBS) is looking to raise USD 30-40 mn to finance expansion plans, Al Mal reported. TBS hired EFG Hermes to manage the capital increase and is looking to add new shareholders. The chain currently operates 45 branches across Egypt with plans to add 10 new ones this year, Al Mal says. TBS, which began operations in 2008, also owns the Four Fat Ladies brand. The transaction has also been described as a possible IPO, so keep an eye on this one, folks.

Elsewhere this morning, the Union National Bank of Egypt has submitted documents to the EGX for an EGP 63.7 mn capital increase through issuing 11,375,000 shares at par value of EGP 5.6 per share. The capital increase brings the bank’s issued and paid-in capital to EGP 1.34 bn and will be financed from retained earnings. UNB Egypt is the local arm of Abu Dhabi-based Union National Bank.

Egypt’s foreign reserves rose to USD 26.363 bn in January, the CBE said in a statement, a gain of just under USD 2.1 bn as the proceeds from the USD 4 bn eurobond issuance were partially offset by a USD 700 mn payment to the Paris Club, Al Borsa reports. CBE Governor Tarek Amer had also said in early January that Egypt would be repaying a USD 1 bn loan from Turkey.

Sorry shipping lines, our reserves are good and we don’t need an advance on FX. The Suez Canal Authority has suspended negotiations with international shipping lines to collect shipping fees three years in advance in USD in exchange for reduced fees, SCA Chairman Mohab Mamish told Al Mal. The initiative, which was intended to shore up foreign reserves, is no longer necessary as the country’s economic conditions are improving, said Mamish.

1.2 mn Kramers purged as cabinet looks to make further moves on subsidies: Some 1.2 mn welfare cheats have lost access to state food subsidies rolls in phase one of a purge of the nation’s welfare rolls. The names removed were dead, duplicates and individuals living abroad, said Supply Minister Mohamed Ali El Sheikh. Phase two of the purge will begin once a joint cabinet committee finishes laying out eligibility guidelines for food subsidies, the minister said.Statements attributed to El Sheikh last month had put the target for the initial phase of the Kramer purge at 14 mn, which would make this a sharp decline. Sources from the supply ministry had expected phase two to cut 40 mn, the highest target announced to date.

The timing of the announcement comes as the government is expected to announce further subsidy cuts during the visit this week of an IMF committee. The move is designed to show progress on the Ismail government’s reform program as Egypt asks the fund to hand over the second payment under an IMF facility. Ittihadiya stressed yesterday that electricity subsidies will cost state coffers some EGP 65 bn, up from a budgeted EGP 30 bn this fiscal year, in a statement following a meeting between President Abdel Fattah El Sisi and Electricity Minister Mohamed Shaker. This could be seen as a precursor to an announcement on that front. Last week’s price hikes of subsidized goods was met with backlash, particularly from the House of Representatives, adding pressure to the government already stuck between a rock (popular unrest) and a hard place (IMF conditions).

We have a list of industries that will qualify for investment incentives granted under the proposed Investment Act, and it is as varied as one would expect. The list comes courtesy of Youm7, with highlights including:

• Industry, which we assume to mean manufacturing of any form;
• Mining;
• Desert reclamation and arid agriculture;
• Animal products;
• Transportation, logistics and storage;
• Oil and gas;
• Infrastructure development including telecoms, water and power utilities;
• Renewable energy projects;
• Recycling and waste-to-energy projects;
• Pharma and healthcare;
• Education;
• Information technology;
• Insurance and factoring;
• Honorable mentions: R&D for space and aeronautical industry (doesn’t hurt to aim high, we suppose).

EFG Hermes tops January brokerage league tables. EFG Hermes closed January 2017 with a 18.8% market share, followed by CI Capital (8.8%), Pioneers Securities (5.4%), Beltone (5.3%), and Sigma Securities (3.4%).

Is the government is looking to regulate tuition fees at int’l schools, again? Prime Minister Sherif Ismail announced the formation of a committee which will look into how international and private schools set tuition fees, according to a cabinet statement. The move comes in response to complaints of a sharp rise in private school tuition fees. The guidelines governing private and international schools will need to be restructured to ensure that schools comply with Education Ministry regulations, Ismail said. We don’t expect these statements to be welcomed by administrators of international schools, who have been trying to get out of the yolk of the Education Ministry and want to be regulated by the Investment Ministry after the Education Ministry had place International School of Choueifat and the American International School of Cairo under administrative and financial control last year.

Tourism Development Authority (TDA) head Hisham El Demery confirmed allegations that the authority is behind on payments to ad agency JWT, but said that the authority is not to blame (shocker, we know), according to Al Mal. El Demery also said the TDA is working on a payment schedule for German companies in preparation to launch a promotional campaign in Germany, Youm7 reported. As we noted last week, JWT chief Hany Shoukry said the agency has only received EGP 8.5 mn from what it’s owed for the This is Egypt campaign, and has had to pay some USD 24 mn out of pocket.

MOVES- Yasser Sobhi has reportedly left the Finance Ministry to join the International Monetary Fund as an expert advisor starting from mid-Feb, an unnamed source told Reuters. The newswire identifies Sobhi as the deputy finance minister for macro-fiscal policies, a role we know has been held by former World Bank economist Ahmed Kouchouk since March 2016, when Amr El Garhy became minister. The source said Sobhi, who has been with the ministry since 2005, will join the IMF fiscal policy unit working with Saudi Arabia’s Finance Ministry.

MOVES- Hussein Abd Rabo was appointed chairman and editor-in-chief of Al Borsa newspaper. The paper says Abd Rabo partnered in setting up Al Borsa in 2008 and was, most recently, the paper’s deputy editor-in-chief.

**Earnings watch: Credit Agricole Egypt reported a 24.2% y-o-y rise in net interest income to EGP 3.35 bn in FY2016 from EGP 2.70 bn the year before, the bank said in a statement. Net profit after tax rose to EGP 1.35 bn from EGP 1.04 bn in FY2015.

Al Azhar (carefully) rejects El Sisi’s move to modernize divorce law. More significantly this morning: The Associated Press’s excellent Hamza Hendawi picked up Al Azhar’s “carefully-worded statement” that openly rejects President Abdel Fattah El Sisi’s proposal that the House of Representatives take up legislation that would strip a man of the ‘right’ to verbally divorce his wife. Scholars say the practice has been uncontested since the seventh century and note that banning it will not help curb Egypt’s high divorce rates, as most cases are officiated and documented. El Sisi proposed the legislation during a televised address in January.

Cross-border M&A activity in the Middle East was “robust” in 2016, despite global activity taking a hit from political and economic events, according to Baker & McKenzie’s Cross-Border M&A Index. The Middle East’s position on the index hit 181.6 in 4Q2016, with the UAE topping the list as the most active in the region in both outbound and inbound investment. The value of inbound agreements in the region more than doubled to reach USD 10 bn, although the volume of agreements for the year remained unchanged at 29. The technology, energy, and utilities sectors accounted for half of the year’s largest deals, with the technology sector reaching USD 66.9 bn in deals. “The remarkable increase in cross-regional deal value and the steady flow of deals for 2016 bodes well for M&A in the coming year,” Corporate/M&A Partner Will Seivewright said. The law firm said last month it expects USD 2.5 bn in M&A activity in Egypt this year.

Egyptian national Abdullah Reda El Hamahmy, who allegedly attacked two soldiers with a machete near Paris’ Louvre Museum before being shot in the abdomen on Friday, is currently in custody in a hospital but is refusing to speak to investigators, Reuters reported. French investigators are working to determine whether El Hamahmy acted alone.

Sudan’s President Omar Al Bashir has threatened to resort to the UN Security Council if Egypt refuses to start negotiations over the Halayeb triangle. In an interview with Al Arabiya, Al Bashir insisted he believes the area is Sudan’s and should be ceded by Egypt. He also denied that Sudan is harboring any members of the Ikhwan but accused Egyptian intelligence of “supporting” opposition members in Sudan. Okay, skippy. You have a great day, now.

A US federal appeals court rejected the Justice Department’s request to immediately reinstate President Donald Trump’s travel ban on nationals from seven Muslim-majority countries, The New York Times reports. The Trump administration’s response is expected today.

New England Patriots come from behind to win (American) football Super Bowl once again: It looked like the Falcons would be the ones clipping the Pats’ wings as the Atlanta team opened a 28-3 lead — until the Patriots came back to win the game 34-28 in the first overtime period played in Super Bowl history. The New York Times has the blow-by-blow and ESPN has stats, game highlights and post-game analysis for hardcore fans. The good folks at SB Nation also have wall-to-wall coverage with more flair and snark than ESPN will ever muster.

CORRECTION- Due to a technical issue, we failed to post the full Weekend Edition column Beyond the Rubicon by Aly El Shalakany this past Friday. The issue has been fixed and the complete article, Show Me The Money, is available on our website now. We regret the error.

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Investor relations analyst wanted: Inktank Communications, the Cairo-based investor relations firm that works with both major EGX-listed companies and privately held groups (and parent company of this fine publication), is looking for two investor relations analysts. The positions entail working on everything from investor presentations, earnings releases, board material and client transactions to investor-focused press releases and correspondence. Outstanding English-language writing skills are a must. While we have a hiring preference for Egyptian nationals, applications from foreign candidates based in Egypt are welcome. Learn more about the position at inktankcommunications.com/careers or apply now with a cover letter and CV to [email protected].
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