CBE lifts caps on USD deposits and withdrawals: The central bank announced yesterday that it has lifted all previously-imposed restrictions on USD deposits and withdrawals for importers of non-essential goods. The central bank had set a deposit limit of USD 10k a day to a maximum of USD 50k a month (and a withdrawal limit of USD 30k a month) back in 2015 to control the flow of foreign currency at a time of severe shortage. “We saw it as appropriate to remove the caps today because the market has strengthened, our foreign-currency resources have increased,” CBE sub-governor Rami Aboul Naga tells Bloomberg.

“The move is another sign that bank liquidity is improving as a result of Egypt’s USD 12 bn, three-year IMF program and a currency flotation that halved the EGP’s value and helped crush the black market for USD,” Reuters notes. FX reserves have been on a steady rise since then, climbing to a high of USD 36.703 bn at the end of October. This continued improvement had prompted the CBE back in June to scrap all caps on overseas bank transfers, which had been set at USD 100k per client.

Analysts are nodding in agreement with the decision. Pharos Holding COO Angus Blair said the decision is “a confidence building measure that shows the private sector that things are back to normal.” The question now is, though, “whether this would have an impact on the exchange rate,” Naeem Brokerage’s head of research Allen Sandeep tells the newswire.

Is the government going to revisit its calculations on fuel subsidy cuts for FY2017-18? The Finance Ministry will review the impact of higher crude prices on Egypt’s fuel subsidy bill for FY2017-18, said El Garhy at the press conference, according to Al Mal. It is yet unclear whether the statement signals that the government may move to cut fuel subsidies again if global oil prices continue to grow. Both El Garhy and Oil Minister Tarek El Molla had said the government has no plans to cut fuel subsidies again this fiscal year. The IMF had noted that higher global energy prices and regional political insecurity were the biggest risks facing progress on the economic reform program. El Garhy stated that the government will look to the next OPEC meeting on extending production cuts.

Background: Oil prices have surged since the start of Egypt’s fiscal year, rising nearly 25% to a peak of nearly USD 59 last Friday.

OPEC ministers meet tomorrow (agenda here, pdf) and will hold a conclave with their non-cartel counterparts. Look for an agreement that OPEC and Russia will extend their production cuts into 2018, but with an option to review the agreement in June. CNBC has a rather solid look at how oil prices could move in response the meeting. While crude has been flirting with the USD 60 mark, a shorter extension or a delayed decision could see it retreat toward the mid USD 50s.

Egypt planning consecutive eurobond sales in 1Q2018 starting late January:Egypt’s first USD-denominated eurobond sale in 2018 will take place in late January or early February, with an EUR-denominated issuance to follow later in February or March, Finance Minister Amr El Garhy told Bloomberg in an interview. The EUR-denominated issue will have a tenure of 5-10 years, while the USD eurobonds will have tenures of five, 10, and 30 years, “but we might add a new tenure in order to deepen our yield curve,” the minister added. El Garhy had previously said that the USD-denominated issue will be worth EUR 3-4 bn and the EUR-denominated bond around EUR 1-1.5 bn. The ministry is now 2-3 weeks away from finalizing proposals for the structure of the sales, which are expected to go smoothly “because even the rate on Egypt’s existing bonds is tightening and interest rates are going down and that’s giving us a lot of momentum,” El Garhy said.

Emirates NBD’s asset management arm is still tipping Egyptian opportunities despite last Friday’s attack on Al Rawda Mosque in Sinai, said the lender’s head of asset management, Salman Bajwa, in an interview on Bloomberg on Tuesday (watch, runtime 3:31). Bajwa says the attack needs to be viewed as “an isolated incident” for now as macroeconomic indicators remain strong. What is crucial is that the President Abdel Fattah El Sisi’s administration remains steadfast on economic reforms despite potential for future terrorist attacks.

Negotiations over the return of UK flights to Sharm El Sheikh will not be impacted by the terrorist attack on Al Rawda mosque last Friday, British ambassador John Casson tells Al Mal. Casson said the UK government understands the “special nature” of security in North Sinai and how far removed the trouble is from the southern part of the peninsula — which begs the question: why is this still an issue for them? British MPs tell Egypt Today in an interview that they are “doing our best to pressure the government to allow tourism back to Sharm El-Sheikh.” A delegation of UK aviation experts and officials had visited Cairo last week to inspect security procedures.

CIB signs USD 100 mn subordinated loan agreement with IFC: CIB signed an agreement (pdf) with the International Finance Corporation (IFC) yesterday for a USD 100 mn subordinated loan that qualifies as tier-two capital under recently amended central bank regulations. The loan carries a 10-year maturity and will not cause any dilution to equity, but will “enhance CIB's already strong capital ratio from 18.05% to 19.10%,” supporting growth plans and hedging CIB from risk. The loan agreement is also in line with management’s current strategy “to explore and pursue all available avenues to ensure a sustainable, comfortable capital base that is less vulnerable to external factors.” Earlier this month, CIB signed a USD 100 mn subordinated loan agreement with the European Bank for Reconstruction and Development, which will also be added to its tier-two capital.

At the signing, IFC MENA regional director Mouayed Makhlouf reiteratedprevious statements that the institution will invest USD 1 bn in Egypt in 2017. The IFC’s Vice President of New Business Dimitris Tsitsiragos had said last month that this figure would increase to USD 1.5 bn in 2018.

In other IFC news, the corporation is investing EUR 15 mn in PE firm Mediterrania CapitalPartners’ Mediterrania Capital III fund and expansion into Egypt and West Africa, the IFC said in a statement on Tuesday. The fund, which will focus on small and mid-cap companies, will also invest in Algeria, Tunisia and Morocco. “We are expanding into new markets in Egypt and West Africa and are well placed to facilitate investment flowing from Europe to Africa to help investors capitalize on new growth opportunities,” said Albert Alsina, Founder and CEO of Mediterrania Capital Partners. Mediterrania Capital III is due to start operations at the end of November with EUR 103 mn at first close. Second closing is scheduled for July 2018 with a target of EUR 250 mn.

Speaking of CIB: The bank topped Forbes Middle East’s Top Egyptian Companies list, which was unveiled earlier this week, The UAE News reports. The bank was honored at Forbes’ Egypt 100 conference alongside the likes of Global Telecom Holding, Elsewedy Electric, Union National Bank of Egypt, Qatar National Bank, Arafa Group, Palm Hills Development, and Oriental Weavers. The selection process for the companies “comes in line with the global criteria followed for choosing the best 100 companies in the Arab world, including analysis of revenues, profits, market value, and assets,” Forbes Middle East’s Editor-in-Chief Khuloud Al Omian said.

The event also honored CBE Deputy Governor Lobna Helal, Social Solidarity Minister Ghada Wali, and Planning Minister Hala El Said among the 25 most powerful Egyptian women, Al Masry Al Youm reports. The Egypt 100 list also included a category for the 25 strongest Egyptian startups, with awards being presented to Eventtus, digital recruitment platform Wuzzuf, international shipping platform Edfa3ly, and online medical booking company Vezeeta.

M&A WATCH- Egyptian, Spanish funds in talks to acquire majority stake in Cairo Scan: Two unnamed private equity firms, one each from Egypt and Spain, are in talks to jointly acquire a majority stake in radiology provider Cairo Scan from Chairman and Managing Director Mohamed Abdel Wahab, sources close to the matter tell Al Mal. Abdel Wahab holds more than 40% of Cairo Scan, the sources said, refusing to provide further details. They added, however, that both funds intend to split the shares evenly once the transaction complete and are willing to buy up to 100% of Cairo Scan if other shareholders were to agree. Talks are expected to wrap up by year’s end. The potential transaction is the latest in a string of transactions in the industry, most prominently including an acquisition spree by Saudi Arabia’s Elaj Group.

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INVESTMENT WATCH- Mowasalat Misr to invest EGP 1 bn in Egypt bus fleet expansion during 2018: Private transport company Mowasalat Misr is investing EGP 1 bn in Egypt in 2018 to support its planned expansions, sources familiar with the matter tell Al Mal. Mowasalat, a 70%-owned subsidiary of the Emirates National Group, is planning to secure EGP 500 mn via loans from the Emirates NBD and Abu Dhabi Islamic Bank. The company is also planning to raise EGP 32 mn in capital through its shareholders to bring its total capital up to EGP 500 mn. Mowasalat had announced in July that it was planning to bring 500 buses into its fleet over the next two years to cover the Greater Cairo area after it launched AC- and WiFi-equipped buses in the capital over the summer.

Shipping lines alliance to return to East Port Said? An alliance of five shipping lines that had ceased East Port Said operations earlier this year to protest a hike in fees have agreed to return to the port, Suez Canal Authority chief Mohab Mamish said yesterday, Al Mal reports. The latest round of negotiations proved fruitful, said Mamish, who had been in Germany with Transport Minister Hisham Arafat over the last two days for talks with Hapag-Lloyd, K Line, Yang Ming Marine Transport, Mitsui O.S.K. Lines, and the NYK Group. It’s unclear how the officials managed to sway the alliance, which had announced in May that its return to the port was contingent on the government backtracking on the hike. Mamish said executives from the five companies reassured him that they have come to understand the need for the increase and the fact that it is offset by a number of incentives and discounts the authority extends to shipping lines.

Indian automaker Mahindra & Mahindra inaugurated its new Egypt headquartersyesterday, Al Borsa reports. The new premises will serve as the company’s regional office for North Africa, overseeing all operations including the manufacturing of cars, farming machinery and equipment, and building materials. We had noted in October that the Indian automaker was finalizing its entry back into the Egyptian market, with plans to launch vehicles that target the mid-income segment.

Egypt gained a whopping 23 places on Bloomberg’s Climatescope 2017 annual report to rank 19th out of the 71 nations assessed for progress made towards clean energy transition and on clean energy investment. “[Egypt’s] significant progress was largely due to the surge in clean energy investment to some USD 745 mn in 2016 from almost nothing in the preceding year,” the report said. Egypt is only MENA region country to make it to the Top 20 of the report apart from Jordan. Egypt’s Benban solar park, which aims to be the largest in the world, has drawn pledges of over USD 1.8 bn from international finance institutions this year.

France is proposing that the UN Security Council impose targeted sanctions on human traffickers operating in Libya, Reuters reports. The call comes after CNN aired a documentary earlier this month that allegedly showed “an auction of men to Libyan buyers as farmhands and sold for USD 400 each.” French Ambassador to the UN François Delattre says his country will help to prepare a list of individuals and entities responsible for the trafficking trade in Libya. “Some council members expressed support for the possibility of imposing targeted sanctions, while others backed the council first issuing a statement,” according to the newswire.

Egypt’s Foreign Ministry condemned the alleged slave auctions, saying in a statement yesterday that these abuses are a result of certain countries’ policies to close their borders to immigrants fleeing conflict zones. The ministry also praised the Libyan presidential council’s planned investigation of the auctions.

Other international highlights worth noting in brief include:

• Senior Saudi Prince Miteb bin Abdullah, once seen as a leading contender to thethrone, was freed after reaching a USD 1 bn settlement with Saudi’s anti-corruption authority, a Saudi official said on Wednesday, according to Reuters. Bn’aire investor Alwaleed Bin Talal is still imprisoned, but has received words of support from Bill Gates, Bloomberg supports.
• Kenyan President Uhuru Kenyatta was sworn in for a second term on Tuesday, Reuters reports. His rival Raila Odinga is contesting the elections swore he would have his own inauguration in December.
• North Korea fired what appeared to be an ICBM that landed close to Japan, officials said, according to Reuters. Analysts warn that this could mean in theory the country has the capability to hit the east coast of the continental US.