House passage of the ride-hailing legislation is a step forward for the industry -Uber Egypt GM. Uber Egypt GM Abdellatif Waked said the act, which passed the House of Representatives on Monday, is one of the first of its kind in the region and will help drive growth of his industry. Uber is “quite happy” with the changes to the law, particularly clauses on data sharing and privacy, he told us yesterday. Here’s why:

Ride-Hailing Apps Act won’t force companies to share real-time data with the government. The controversial Articles 9 and 10 now strike a balance between data privacy and national security, Waked said. The two articles, which have changed drastically from their initial form, now “provide a lot of details on preserving user data privacy,” he said, explaining that article 9 especially was “toned down a lot,” as clauses that would have given the government unrestricted access to real-time data were scrapped and replaced with others that mandate ride-hailing companies to make information accessible only upon request.

Clauses stipulating onshore data storage were also removed from article 10 after Uber managed to convince legislators that cloud storage is the much safer option recommended by global tech companies and experts. “We take national security very seriously, but we also take our user privacy very seriously,” Waked said. “Uber never provides any government with real-time access to customer data and we always fight to protect their privacy.”

(We were wrong yesterday in our assertion that the House had signed off on the act without amending articles 9 and 10. The final text of the act requires ride hailing companies operating in Egypt to retain local user data for 180 days and to make information available to state agencies when requested. We’ve updated yesterday’s story on our website accordingly.)

So, what about the white taxis? The act gives ride-sharing companies three months to come up with a strategy to incorporate white taxis into their fleets. Earlier versions of the act had given the prime minister authority to essentially force ride-sharing companies to abide by a single set of guidelines to add regular cabs to their service. “Now it’s in the hands of the companies,” Waked said. “Uber already works with taxis in other countries, so we’ll take our learnings from there and spend the next three months studying the best way to incorporate them, because to us, it’s an absolute necessity to maintain a certain level of quality and safety.”

As usual, the fine print will be in the executive regulations, which will set final licensing fees and fines, which Uber believes are too high. The most important among those are the high licensing fees of EGP 1,000 the law sets for drivers, according to Waked. “We will be working over the next two months to make sure that the executive decrees that are issued take the drivers’ side,” he said, stressing the importance of keeping the service both economically sensible for drivers and affordable for users. Waked also expects the regulations to adjust licensing fees that companies have to pay, which could hinder new players from entering the market after they jumped “in the last minute” to a maximum of EGP 30 mn in the final draft from EGP 10 mn initially. The fee is payable by operators every five years.

As for the identifier or symbol that drivers will have to display, “those will likely be inside the car… [and] are not new to the industry,” Waked said, explaining that more than 65% of Uber’s drivers work on a part-time basis using their own private cars and “don't necessarily want to brand themselves.”

Thinking along similar lines is Uber’s Dubai-based competitor Careem, which described the Ride-hailing Apps Act as a “a remarkable step for Egypt, Careem and our region,” in an emailed statement yesterday, the National reports. “It is the first time in any of Careem's operating markets that a regulatory framework for ride-hailing has emerged from a consultative legislative and parliamentary process.”

LEGISLATION WATCH- Prime Minister Sherif Ismail issued the executive regulations of the Universal Healthcare Act on Tuesday, according to a cabinet statement. The statement did not provide the final draft of the regs, but copies leaked by Al Ahram last month show that focus on the roles, jurisdictions and functions of the new healthcare regulators and how the system itself would be operated.

What we haven’t seen from the leaks is a clearly defined role for the private sector mapped out. Vice Minister of Finance Mohamed Maait had said that the role of the private sector would be clarified in the executive regulations.

Qalaa eying additional stake in Egyptian Refining Company: Qalaa Holdings announced yesterday that it is looking to increase its ownership of its greenfield Egyptian Refining Company (ERC) by acquiring or subscribing to additional shares in its subsidiary Orient Investment Properties, Qalaa said in a regulatory filing (pdf). ERC recently completed a project finance restructuring that saw the company take on new loans and equity commitments valued at around USD 500 mn, bringing the 4.2 mn tonne-capacity refinery’s overall cost to around USD 4.5 bn. The refinery is expected to go online by the end of 2018 or early 2019, with trial operations set to start as early as next month.

EARNINGS WATCH- CIB posts record first quarter earnings. Our friends at Egypt’s largest private-sector bank delivered a 17% y-o-y rise in net income to EGP 2.0 bn in 1Q2018 on revenues of EGP 4.2 bn (up 25% y-o-y). In comment on the results, management noted that top line and bottom line growth were more impressive when excluding the one off gains from the sale of investments in 1Q2018 and 1Q2017, which would bring both to 33%. Management attributed the growth to a surge in its local currency balance sheet and an impressive pick up in foreign currency lending. Furthermore, “CIB remains well-covered in terms of capital adequacy, as evident in its CAR surging to 18% by end of the first-quarter in 2018, comfortably above minimum regulatory requirements and sufficiently accommodating upcoming increases in minimum requirements in 2019, along with any unanticipated alterations in the macroeconomic environment.”

What’s the outlook? “We remain confident, in the Bank’s solid fundamentals to accommodate macroeconomic and regulatory developments, while reacting cautiously to interest rate movements in a way that does not forego the Bank’s profitability,” said management. The bank notes that it expects to see the impact of the two consecutive interest rate cuts this quarter on lending growth over the coming quarters. You can read CIB’s full earnings filing here (pdf).

EARNINGS WATCH- CI Capital reported a net profit after tax and minority interest of EGP 81.9 mn in 1Q2018, up 35% y-o-y, the company reported in its first earnings release since going public last month (pdf). Total revenues for the quarter jumped 34% y-o-y to EGP 542.1 mn. In comment on the firm’s maiden earnings, Group CEO Mahmoud Attallah noted that the CI is “clearly seeing signs” of an economic recovery that leaves it optimistic about its outlook for the rest of the year.

London-based private equity firm Alta Semper Capital opened yesterday a new regional office in Cairo, according to an emailed statement. The office will serve Egypt and the region through investments in the consumer and healthcare sectors. “There are many interesting investment prospects in Egypt to which we can apply our international experience,” said Managing Partner and CEO Afsane Jetha. Former CI Capital Director of Investment Banking Ahmed Rady will head the new office. Alta Semper had partnered with CI Capital Partners back in 2016 to acquire stake in healthcare products outfit Macro Pharma. The transaction was Alta Semper’s first investment in Egypt.

Alta Semper deserves credit: With all due respect to our friends in the Emirates: post the devaluation of the EGP, there is little economic rationale for buysiders, PE types, financial services companies, lawyers or other service providers to base their regional HQs out of Dubai.

M&A WATCH- B Investments kicking tires on multiple opportunities: B Investments has taken “serious steps” towards acquiring a controlling stake in an unlisted food and beverage company, founding partner Alaa Sabaa tells Youm7. Sabaa stopped short of disclosing the company’s name or the expected value and timeline of the transaction, but said it would be the first of many transactions B Investments is eyeing. The firm is also planning to buy a solar power plant in the Benban solar park, Sabaa said, without disclosing further details.

Meanwhile, Sabaa said his downtown re-development firm Al-Ismaelia for Real Estate Development could someday look at an EGX listing if it can create a portfolio of projects as successful as its development of the La Viennoise building in downtown Cairo, which was unveiled recently.

BUDGET WATCH- Parliament subcommittee to study fixed power prices for lowest consumption brackets: Electricity Minister Mohamed Shaker has reportedly agreed with Parliament's Budgeting Committee to form a subcommittee to study a proposal to leave power prices unchanged for the lowest consumption tiers in the next fiscal year, MP Yasser Omar tells Al Mal. MPs are suggesting that the ministry direct all proceeds from an upcoming increase to electricity bills in FY2018-19 towards subsidizing power for the lowest brackets, according to Omar, who says that the subcommittee will begin its work next week. Shaker had previously rejected the proposal, insisting that the 47% cut in electricity subsidies slated for July would impact all users, with bills rising by 30% for the lowest consumption bracket and 45% for the highest. Prices of power for industry are also expected to increase at the start of the new fiscal year.

Education could get larger budget? Meanwhile, a request to increase the earmark for education in next year’s budget has been tabled for discussion, Education Minister Tarek Shawky said in a statement yesterday after meeting with MPs, according to Al Shorouk. MPs had earlier this week announced plans to make an official request to the government to increase the amounts allocated to education and health in FY2018-19, particularly as the K-12 educational reform program and new Universal Healthcare Act launch this year. Leaked documents had said that the budget for healthcare would increase 12.5% y-o-y to EGP 61.81 bn in FY2018-19, while spending on education would grow 8% to EGP 115.66 bn.

MOVES- Prime Minister Sherif Ismail appointed Amir Nabil Ibrahim to head the Egyptian Competition Authority (ECA), Al Masry Al Youm reports. Ibrahim succeeds Mona El Garf, who resigned from her post in November to return to teaching. Ismail also formed a new ECA board comprised of the deputy head of the Council of State (Maglis El Dawla), the head of the Trade and Industry Ministry’s internal trade policies department, a representative of the Supply Ministry, and an economic and a legal expert.

MOVES- Finance Minister Amr El Garhy appointed Gamal Abdel Azim as the new head of the Customs Authority, Al Masry Al Youm reports. Abdel Azeem, who headed the Port Said Customs Department, succeeds Magdy Abdel Aziz, who moved on to become El Garhy’s advisor for customs affairs.

MOVES- Emirates NBD Egypt has hired Mohamed Berro as its new CEO, the bank announced in a statement on Tuesday. Berro, who is a member of the Emirates NBD Group Executive Committee, joins the bank from Abu Dhabi’s Al Hilal Islamic Bank, where he served as CEO for six years. He also held leading positions in several other banks, including the Arab Bank, Crédit Agricole CIB, and the National Bank of Kuwait.

FRA passes new rules for investment funds established by banks, non-banking financial services firms: The Financial Regulatory Authority (FRA) issued new regulations to govern the establishment of investment funds, FRA boss Mohamed Omran said in a statement yesterday carried by Youm7. The new regulations allow banks, micro financing firms, insurance companies, as well brokerage and securities firms to set up any type of investment fund apart from real estate, independently or with local, regional, or international partners, after obtaining FRA and central bank approval. They also stipulate that securities firms — which received the greenlight last month from FRA to establish mutual funds — need to have been in the market for at least three years to seek regulatory approval. Institutions also need to set aside a minimum EGP 5 mn for fund activities and provide at least 51% of that amount, according to Omran.

In related news, the FRA also signed off on new regulations that allow insurance companies to invest up to 40% of their available reserve in securities, up from 30% previously, FRA deputy head Khaled El Nashar tells Reuters’ Arabic service. Companies can choose to invest in listed or non-listed securities, according to the new regulations, which FRA’s board approved at the end of April.

The Donald withdraws US from Iran nuclear agreement: US President Donald Trump announcing last night that the US is withdrawing from the 2015 Joint Comprehensive Plan of Action (JCPOA) with Iran. In a statement last night, Trump called Iran agreement “one of the worst and most one-sided transactions the United States has ever entered into.” Trump said he would reinstate economic sanctions on Iran that would “target critical sectors of Iran’s economy, such as its energy, petrochemical, and financial sectors. Those doing business in Iran will be provided a period of time to allow them to wind down operations in or business involving Iran. Those who fail to wind down such activities with Iran by the end of the period will risk severe consequences,” read a White House statement. The withdrawal has everyone worrying of an of regional tension in the Middle East.

The move could represent the biggest break yet between the US and its Western allies. UK Prime Minister Theresa May, German Chancellor Angela Merkel, and French President Emmanuel Macron issued a joint statement that they would abide by the treaty, saying that it is "the best way of neutralizing the threat of a nuclear-armed Iran," DW reports.

Iran too insisted that the nuclear agreement is alive and well with the other four signatories. President Hassan Rouhani said that Iran will continue to work with the UK, Germany, France, Russia, but warned that it could step up enrichment if those talks do not yield results, Bloomberg reports.

The GCC is ecstatic: The governments of Saudi Arabia and the UAE both issued statements in strong support of the decision and calling on the international community to join the new policy shift.

Egypt said it would closely monitor the situation, according to a Foreign Ministry statement. Egypt reaffirmed the need for Iran to curb nuclear testing, while stressing the need for stability in the region.