Moving forward with the eurobond issuance plan: The Finance Ministry has asked cabinet to approve its two planned eurobond issuances, sources told Reuters. “The first issuance would range between EUR 1-2 bn before the end of 2017. The second would range from USD 4-8 bn and would be in 2018.” Finance Minister Amr El Garhy told Bloomberg he expects the cabinet to approve the issuance in two to three weeks’ time. The minister spoke about “pockets of money” in Europe that are interested in Egyptian debt and said “we’re taking good advantage of the current market conditions as well as the progress in our current economic reform program.”

El Garhy also expressed some frustration at Moody’s not raising Egypt’s credit rating or even upgrading its outlook from stable. “It was a bit strange to say the least … In a year full of economic reform actions and very bold actions on all fronts, you don’t see anything, you don’t see any positive sign,” El Garhy said about Moody’s inaction.

Separately, El Garhy believes that inflation should drop to c. 15% by the end of the current fiscal year. In an interview on the economy with Youm7 editor Ahmed Yakoub, El Garhy said that the central bank’s interest rate policy has raised the cost of Egypt’s debt service this year to EGP 400-410 bn, up from a projected EGP 380 bn before the interest rate hikes. As for tax revenues, El Garhy expects these to come in at around EGP 605 bn in FY2017-18.

The nation’s banks appear to have “learned their lesson” and are working hard to cement their control of the FX market, Reuters’ Ihab Farouk writes. Before the float of the EGP last November, the central bank had tightened the regulations governing privately-owned FX bureaux in a bid to control the flow of FX in the black market during the USD shortage.

Exchange bureau employees tell the newswire’s Arabic service that banks alone now hold sway over FX rates, as privately-run bureaux’ work is now mostly driven by importers of non-essential goods, who aren’t always able to receive their financing through banks due to regulatory restrictions. With the FX crisis now a thing of the past, a number of local banks are now expanding geographically to offer accessible exchange services through their own bureaux. The National Bank of Egypt recently inaugurated two exchange branches, with plans to establish another 13 over the next six months; the state-owned giant is targeting 30 such outlets by mid-2019. Banque Misr has also so far set up 21 bureaux, a number it intends to more-than-double over the coming two years. These banks have reportedly also been poaching exchange bureau employees for their own operations, drawing them in with higher salaries and better job security and benefits, sources add.

Pharos Holding held its Egypt Banking Day event last week, which highlighted industry to international and local fund managers. Pharos COO Angus Blair gave a welcome speech that was followed by a panel discussion led by Head of Research Radwa El-Swaify. Panelists included CIB Consumer Banking CEO Ahmed Issa, EG Bank Head of Corporate Banking Ahmed Nagui, and Banque Misr Deputy Head of Retail Banking Hendy Fahmy. The event included a discussion on the role of the banking sector in financing large projects, in addition to the importance of banks in financing SMEs. Seven Egyptian banks and more than 40 fund managers participated in the event, which El-Swaify called “an excellent [chance] to exchange experiences among fund managers and to hold multiple discussions about the latest developments in the Egyptian banking sector and the economy.”

M&A WATCH- Beltone Financial is reconsidering its planned acquisition of microfinance firm Reefy, Beltone chairman Sameh El Torgoman told Al Mal. He says the acquisition of Reefy would require new preparations in a time when Beltone is looking to expand internationally and to strengthen its brokerage and investment banking arms. Beltone had planned to acquire 70% of Reefy for EGP 105 mn and received EFSA’s greenlight for the transaction in November 2016. El Torgoman notes that Beltone has not ruled out moving forward with the transaction, but that it will reconsider it in 2018. Pharos Holding was the independent financial advisor on the transaction.

M&A WATCH- For the “nth” time, analysts suggest TE could be forced to divest its stake in Vodafone Egypt as the state-owned giant enters the mobile market, rolls out 4G services.Stop us if you’ve heard this one before: Telecom Egypt may be forced to divest its full 45% stake in Vodafone Egypt because it needs the capital to help roll out 4G — and to avoid a conflict of interest as it enters the mobile phone market, sector analysts tell Reuters’ Arabic service. TE could make losses in the next four to five years, as it pays some USD 400 mn to establish its network, build infrastructure, and obtain licenses, according to EFG Hermes telecom analyst Omar Maher. TE also borrowed EGP 13 bn from a consortium of banks under an agreement signed in July to help fund its EGP 7.08 bn 4G license for which it has paid EGP 5 bn so far.

IPO WATCH- The Transport Ministry has reportedly abandoned a plan to list the Alexandria and Damietta Container and Cargo Handling companies on the EGX under the state’s IPO program. Sources tell Al Mal that both companies have enough available liquidity to finance planned expansions and upgrades without resorting to an initial public offering.

INVESTMENT WATCH- Home services marketplace FilKhedma announced closing a second investment round led by Algebra Ventures and Glint Consulting. “The investment will help attract more talent to its operations, development and marketing teams and significantly grow its user base,” FilKhedma notes. The value of the investment was not disclosed. In addition to Algebra and Glint, FilKhedma’s current shareholders include founder Omar Ramadan and Khaled Ismail’s KiAngel.

INVESTMENT WATCH- German and Polish investors have signed five agreements to invest a combined EUR 150 mn to open manufacturing facilities in Port Said. The plants will manufacture tractors, buses, irrigation systems, armored doors, steel locks and boats. Representatives from the unnamed companies met Prime Minister Sherif Ismail on Sunday to follow up on the agreements, according to Cabinet’s website.

Count on Parliament to ruin everything good — this time the proposed reform of the thanaweya amma high-school education system: House Education Committee chairman Gamal El Sheeha has all but signalled his opposition to the government’s plan to reform the outdated thanaweya amma secondary school education system. He struck all the familiar antagonistic tones in an interview with Al Ahram, where he said “he was unconvinced of the plan.” He even went to declare that the buck on education reform stops with the committee, adding that he plans to hold hearings the proposed system, which would do away with traditional exams and scoring systems in favour of a new GPA-based framework based on coursework and electronically-graded multiple choice exams. The proposed curriculum is intended to reduce the importance of rote memorization.

Planning Minister Hala El Said had a number of things to say at a national competitiveness council event yesterday about which you folks need to know this morning. Among the highlights:

A government “wage council” is coming: The establishment of the National Wages Council is awaiting ratification by the Ismail Cabinet, Youm7 reports. The council, which is expected to set new guidelines for pensions and minimum wages, among other things, is part of the Labor Act that will continue to make the rounds of the House next month. Remember the government’s muttering earlier this summer about a new private-sector minimum wage? Watch this space, folks.

The Ismail government sees unemployment falling to 9.5% over the next two years, Al Shorouk reports Planning Minister Hala El Said as having said in a speech yesterday in which she also repeated her ministry’s forecast of 5.3-5.4% GDP growth in the current fiscal year.

Gov’t to ditch paper cheques in November: El Said also noted that the National Payments Council’s decision to stop using bank cheques and cash payments for anything over EGP 20k by government entities will be implemented in November.

Egypt’s mediation effort on Palestine bears fruit as Hamas agrees to elections:Hamas agreed yesterday to dissolve its government in Gaza and hold general elections after mediation efforts by Egypt, the group said in a statement (you can read the full text here on AMAY). Hamas invited the 2014 Palestinian Unity Government to begin working from Gaza effective immediately and responded to Egyptians calls for dialogue with rival faction Fatah on the implementation of a 2011 agreement to form a new national unity government. Senior Fatah official Mahmoud Aloul tells Reuters the move “is a positive sign,” adding that “we in Fatah movement are ready to implement reconciliation.” Egyptian officials have been in talks with representatives from both factions over the past week. “There is apparently a wave of optimism this time because it seems that the Egyptians are more serious than before, and also because Hamas and Egypt’s ties are getting better, so Hamas is keen to keep these ties good with Egypt,” Gaza-based political analyst Talal Oukal tells Bloomberg.

Kuwait downgrades diplomatic ties with North Korea. Will regional US allies follow suit? Kuwait has given North Korea's ambassador a month to leave the country and will downgrade its diplomatic representation with Pyongyang, a senior Kuwaiti diplomat told AFP. The source also said North Korea’s diplomatic representation in Kuwait will also be reduced to a charge d'affaires and three diplomats. Besides stopping new visas for North Koreans and suspending all trade relations and flight links with Pyongyang, “Kuwait will also not renew the permits given to North Korean workers to re-enter the country after projects they are currently working on are completed ’within one or two years.’” AFP adds that Asian diplomatic sources told it that “South Korea and Japan have been putting pressure on Gulf states to stop employing North Korean workers because money they sent home was benefiting the regime.”

British authorities have reduced the country’s terror threat to “severe” from “critical,” after police yesterday apprehended a second suspect in the Friday bombing, BBC reports. Detectives have started questioning the two men, aged 21 and 18, who were detained in connection with the weekend attack on Parsons Green tube station in London, which left 30 injuries in its wake.

Maybe Wags can help you process this, Axe: Woman-run hedge funds outperform those run by men. Returns from hedge funds run by women were twice as high as those run by their female counterparts in 2017, according to the Financial Times. The HFRX Women index, which aggregates the performance of female hedge fund managers, has returned 9.95% in the first seven months of the year, while the HFRI Fund Weighted Composite index, a gauge of hedge funds across all strategies and genders, pulled 4.81%. These numbers make the best case we’ve ever read against the underrepresentation of women in the sector. “We definitely need more women in fund management, because we bring slightly different approaches to analysis and risk. Our diversity is complementary,” said Helena Morrissey, head of personal investing at the USD 1.1 tn Legal & General Investment Management.

***

COME WORK WITH US: We’re looking for bright, talented analysts and writers to join our team to work on the current Enterprise Morning Edition and new products we have in the pipeline. You’re likely an equities / macro / research analyst, IR professional or journalist, but we’re less interested in your formal education than we are in amazing writing and storytelling skills, intellectual curiosity, fluency with numbers and passion for business / finance / economics / politics. Bilingual candidates preferred (English-Arabic). A sense of humor is a must, as is healthy skepticism. We prefer Egyptian nationals, but can sponsor work permits for particularly talented foreign applicants. Want to get the conversation started? Send a great cover letter and an updated CV to editorial@enterprise.press. Emails and cover letters opening with “Dears” will be summarily deleted.

***