Farid tells London fund managers to look for non-oil FDI boom: EGX Chairman Mohamed Farid met in London on Sunday with fund managers from 10 UK and US-based real-money investment funds including Fidelity, Metlife, and Aberdeen Standard, with an aggregate AUM of USD 3.9 tn for a roundtable debate organized by BNP Paribas.

The IPO pipeline for 2018 is looking “very strong” with planned IPOs from the pharma, chemicals, and real estate sectors, the bourse chief told participants. Farid told the investors that Egypt’s reform program “should be viewed as a transformation rather than stabilization story,” particularly when it comes to reforms in utilities such as electricity and fuel and state-controlled commodity markets such as that for wheat. He also said that “economic reform has reaped quick wins from portfolio investors on Egypt’s debt and equity markets, but the next phase should see the return of non-oil FDI investors who normally take longer to digest and embrace the new economic landscape.” The next phase for the country’s growth should center on structural changes aimed at prolonging the economic cycle to make “high GDP growth sustainable beyond a five-year cycle.”

Amendments to CBE and Banking Act could impose mid-term confidence votes on bank board of directors: It’s not just managing directors of banks who should be watching amendments to the CBE and Banking Act with a wary eye, but board members as well. The amendments will include provisions that impose mid-term confidence votes on banking sector board members, a source from the CBE committee drafting the amendments tells Al Borsa. The standard argument of “good governance” and “renewing new blood” is apparently the rationale.

Could there be changes made to articles governing term limits? The source implied that controversial articles which set a term limit to banking sector managing directors are being reviewed “to account for the needs of the banking sector.” While no specifics were given on what that means, the source suggested that governance provisions are being constantly reviewed in light of talks with the banking sector and the IMF. The resulting changes being made means that the bill will not be ready by December as originally planned, and the ball will probably get rolling sometime early next year, the source added.

The draft bill will also introduce regulations on electronic payments, said the source. Drafting these regulations is being conducted in collaboration with the ministries of finance and ICT and the CBE’s payments committee.

No word on: An industry development tax, a measure that is strenuously opposed by both non-government banks as well as folks who understand that an additional tax would chill investment across a range of sectors.

Emerging markets private equity giant the Abraaj Group is eyeing new investments in Egypt's education sector, Managing Partner and Global Head of Private Equity Mustafa Abdel-Wadood tells Al Borsa. Abdel-Wadood suggested the vehicles for follow-on investment will be education provider Tiba, which owns Thebes Language Schools, and Cairo For Investment & Real Estate Development. Abraaj had acquired a stake in Tiba back in 2015. Abraaj is also looking at opportunities in the Egyptian healthcare market through Cleopatra Hospitals Group, he added. Cleopatra Hospital had announced in September that it is planning to invest up to EGP 1 bn to bring its total capacity up to 1,000 beds.

The Universal Healthcare Act will cost EGP 600 bn to fully implement, said Vice Minister of Finance Mohamed Maait in an interview with Al Ahram on the new bill. The state will cover healthcare of citizens who will be unable to pay premiums into the system to the tune of EGP 200 bn, he added. The state will essentially pay the equivalent of 5% of the standard minimum wage to cover healthcare for each person who cannot afford to pay a premium into the system. This value will increase 7% annually, he added. The bill will set premiums for employers of 4% of each employee’s monthly salary. Employees will pay premiums of only 1% of their salary into the system. The state will deduct 3% of the cost of covering a breadwinner’s spouse and 1% for each child, Maait said. The state will also partially fund the system by allocating 10% of the sin tax on tobacco, Maait said, according to Al Borsa. The House of Representatives’ Healthcare Committee began a contentious debate on the act yesterday.

The UK reportedly plans on lifting its travel ban on Sharm El Sheikh as of February 2018, British tour operators told their Egyptian counterparts, unnamed industry sources tell Al Shorouk. According to the sources, 40 members of the House of Lords — the upper house of British parliament — have been lobbying the British government to lift the ban, saying that Egypt has carried through all the necessary security upgrades at the Sharm El Sheikh airport. The British companies also reportedly said they will be organizing more trips in the coming period to Egypt’s alternative destinations, including Hurghada, Luxor, and Marsa Alam, until the flight ban on Sharm El Sheikh is lifted.

EARNINGS WATCH- Edita Food Industries reported strong bottom-line growth during 3Q2017, with net profit growing 47.4% y-o-y to EGP 66.7 mn. Net revenue for the quarter was up 35.8% y-o-y to EGP 832.2 mn on the back of the macroeconomic turnaround which has seen consumers adjust to recent inflationary pressures, the company said in a statement (pdf). “We were particularly successful in absorbing inflationary shocks arising from the reform program and delivering consistent top-line growth while defending our market share,” Edita Chairman Hani Berzi said. Regional expansions and a 101.9% y-o-y increase in exports contributed to the bottom-line growth. Berzi believes the Egyptian consumer foods industry is at a turning point, saying that, “With the economy and consumer sentiment now turning the corner, we believe the worst is behind us. Our primary focus in the coming period will be to accelerate the recovery momentum and continue driving volumes and sales upward.” Also, the company launched in October its TODO Donut off the second line at its newly commissioned E08 plant; the product is the first mass-produced and packaged donut in Egypt. Tap or click here to read Edita’s full earnings release (pdf).

Beltone Financial recorded a net loss of EGP 22.9 mn in 3Q2017 against a net loss of EGP 1.8 mn a year earlier. Group revenues rose to EGP 132.8 mn compared to EGP 34.7 mn a year earlier, according to the company’s financial statements.

CI Capital has entered into an agreement with Al Rajhi Capital (ARC) that “provides access to the Saudi equity capital market to CI Capital’s client base. The new partnership will leverage both firms’ growing reach and the breadth of their offerings in both the Saudi & Egyptian equity markets.” The agreement is part of CI Capital’s plan to “conclude bilateral agreements with key financial institutions that will help create a solid regional platform.”

MOVES- The African Development Bank appointed Malinne Blomberg as the bank’s new Egypt Country Manager, Al Ahram reports. Blomberg, who replaces Leila Mokaddem, previously oversaw the bank’s irrigation and wastewater projects in west and central Africa, according to the newspaper.

Industry rejoices as Parliament looks to reprice gas, cut real estate taxes for factories: The House of Representatives’ Industry Committee is reportedly looking into reviewing gas prices for industries and canceling real estate taxes imposed on factories, following requests and complaints from industry figures, Al Shorouk reports. Egypt’s manufacturing sector has been pushing for years to lower prices the government sells them. After receiving promises from the government to so, no such pledge had been fulfilled, with EGAS officials saying in August that the Ismail cabinet will unlikely follow through on the promise. As for cutting real estate taxes, the Federation of Egyptian Industries (FEI) had previously discussed the proposal with the Finance Ministry, and had received Trade and Industry Minister Tarek Kabil’s blessing, according to FEI head MP Mohamed Elsewedy. Other business figures lauded the proposed moves, saying they would be a “lifeline” for factories that are only operating at half of their production capacity due to the burden of production costs and fees.

So much for the Saudi purge not impacting business in Egypt: Egypt’s banks have reportedly begun freezing transactions on accounts held by Saudi Arabian princes and officials arrested as part of an anti-corruption probe launched by Saudi Crown Prince Mohammed Bin Salman. As it stands, banks have frozen EGP 2.5 bn in loans for projects in Egypt extended to companies beneficially owned by these individuals. A consortium of banks have frozen a EGP 1.6 bn loan to Al Tayyar Group, whose primary shareholder Nasser Al Tayyar was caught up in the probe, Al Shorouk reports. A consortium led by Banque Misr froze a EGP 900 mn loan to Marasem International For Urban Development, a subsidiary of the Bin Laden Group. The move is part of a region-wide asset seizure and repatriation for the officials caught up in the Saudi investigation, Reuters reports. The UAE had asked its banks to provide account information on 19 people on the list. As we noted last week, a number of government and business officials had said the purge would not impact Saudi investments in Egypt.

Meanwhile, former (and to some still the incumbent) Prime Minister of Lebanon Saad Al Hariri declared that he was not being held in KSA against his will in a televised interview with Lebanon’s Al Mustaqbal TV (watch, runtime: 1:14:33, and pause at 48:10 for an awkward side-glance at an off-camera presence). He reopened the possibility that he may not formally resign when he returns to Lebanon in the next few days, saying that he announced the resignation to “shock” Lebanese politics into recognizing the dangers of Hezbollah. His interview comes as Saudi Arabia called for an urgent meeting of the Arab League in Cairo next week to discuss Iranian interference in the region, an official league source told MENA.

Foreign Affairs Minister Sameh Shoukry is currently conducting a regional tour to discuss the Lebanon problem among other issues. He met with Bahraini King Hamad Al Khalifa yesterday on the second leg of his tour where Yemen, Syria and Qatar were also discussed, according to a statement. Shoukry had earlier been to Jordan where discussions primarily focused on the Palestinian reconciliation agreement and the resumption of peace talks with Israel, Jordan’s Petra News Agency reports.

Mainstay General Electric is in danger of being booted from the Dow Jones Industrial Average as its share price continues to drop, according to Reuters. The company’s fate on the elite index could also be shaped by reductions to the company’s size as it sells off pieces of its business. GE’s removal from the Dow Jones “may not spark much immediate selling of the stock,” the newswire says, noting that the company retains a market value of USD 175 bn and may be kept on the index simply for its historic place.