Central bank reserves are at their highest level ever. Provisional central bank data showed that net international reserves rose to a record-high of USD 36.036 bn at the end of July, from USD 31.305 bn at the end of June. CBE Governor Tarek Amer tells Al Mal that July saw an influx of USD 7.7 bn. He attributed the USD 4.7 bn net gain to both foreign inflows, which came in at USD 3.7 bn, and the banking system drawing in USD 4 bn. Egypt received a USD 1.25 bn tranche from the IMF loan in July. The previous peak in central bank reserves was in December 2010, closing that month at USD 36.005 bn. Reserves had dropped to a low of USD 19 bn in October of 2016, right before the EGP float the following month.

“Egypt’s reserves now cover almost eight months of imports, which adds credibility to the new currency regime,” CI Capital economist Hany Farahat tells Bloomberg’s Ahmed Feteha. The data show that Egypt is able to attract strong inflows, “implying the country’s currency problems are almost over,” he said. Prime Minister Sherif Ismail said the reserve level “means that the Egyptian economy has recovered,” the Associated Press reports. Uhm…

More than USD 13 bn has flowed into Egyptian T-Bills as of July 25, with yields soaring over 22 percent, according to Bloomberg. Foreigners snapped up debt totalling USD 3.5 bn in July. Most of the inflows go into the CBE’s repatriation fund, which backs expedited transfers of funds for foreign investors.

Capital Economics, meanwhile, says in a research note (pdf) that the CBE “has also been intervening in the foreign exchange market to prevent the EGP from appreciating, in the process rebuilding its FX reserves. This upwards pressure on the currency appears to be related to a jump in capital inflows, which we think it is likely to be temporary. Indeed, foreigners’ net purchases of Egyptian equities, which jumped immediately after the devaluation of the EGP late last year, have now started to fall.” As a result, the firm expects the EGP “to weaken modestly against the USD over the next few years.”

…All of this comes as World Bank Egypt Country Director Asad Alam said Egypt’s economic reforms are improving the country’s competitiveness and attracting new investments, according to Al Borsa. Alam says the central bank and government have achieved tangible successes in improving the business climate domestically and that the private sector is starting to see benefits from the reforms to energy policy and new legislation.

USD 2-4 bn eurobond issuance planned for 1Q2018: Egypt is a planning a eurobond issuance to the tune of USD 2-4 bn by 1Q2018, Finance Minister Amr El Garhy told the press on Tuesday, according to Reuters. No other issuances of that size can be expected in 2017, El Garhy added, despite reports last month suggesting that Egypt would be floating c. EUR 1-1.5 bn in bonds in September.

Government to switch entirely to electronic transactions by year’s end: Speaking at a presser held yesterday, El Garhy said the government plans to complete the transition from cash to electronic payments for all state- and budget-related transactions, which includes civil servants and public workers’ monthly salaries, by the end of 2017. The plan is expected to help the government better monitor its spending — which is expected to decline by c. 10% as a result of the switch — and also gradually reduce the budget deficit to a range of 3-3.5% by 2022, according to the minister. In the same vein, the government has also started consolidating different government bodies’ central bank accounts and has already agreed with the CBE to shut down 1,500 government-affiliated sub-accounts, he added.

Bankers, CBE to meet in two weeks to continue talks on central bank and banking acts: The Federation of Egyptian Banks (FEB) will be meeting with central bank officials in two weeks’ time to continue discussions of industry concerns regarding proposed amendments to the CBE and banking acts, unnamed bankers tell Al Borsa. Banks will each prepare a separate memo with their specific objections to present during the meeting, they add, explaining that the CBE is being responsive to their demands, but could still be “a little more flexible.” On Sunday, news from a meeting between the CBE and FEB suggested that the parties were heading towards a compromise on some contentious clauses in both acts, such as the central bank’s power to appoint members of a bank’s board of directors. Among the remaining thorny issues: term limits for bank MDs, the notion that the appointment of the CBE governor should not be subject to confirmation by the House of Representatives, and a mandatory “contribution” of 5% of each bank’s net profits to an industry development fund.

Listed food companies have seen their profits take a hit in 2Q2017 on the back of high inflation, interest rate hikes, and the declining purchasing power of consumers, says Reuters. Both top snackmaker Edita and dairy outfit Juhayna saw profits falls, and revenue increases at the two have come on price rises despite falling volumes.

Egyptian Financial and Industrial Company (EFIC) may call off the spinoff of subsidiary Suez Fertilizers, EFIC Chairman Ali El Sayad tells Al Borsa. Instead, the company will use increased export revenues in 2Q17 to fund its expansion. A fair value assessment by Pharos Holding and Misr Financial Investments Company have not been completed yet, says El Sayad. Suez Fertilisers was expected to list 40% of its shares on the EGX in 1Q17.

M&A WATCH- The Arab Company for Drugs Industries & Medical Appliances (ACDIMA) has reportedly acquired 100% of United Pharma IV for EGP 320 mn, Al Mal reports.

Housing Ministry gets a pass on the “single window” for sale of state land: The new Investment Act appears to have granted the New Urban Communities Authority (NUCA) an exemption from the “single window” for land sales, according to Al Borsa. The policy, which obliges different authorities to tender land in coordination with the General Authority for Investment and Free Zones, had been maintained in the new act, despite objections from other branches of government. NUCA had been one of the bodies that objected, saying it would delay tenders. As we noted back in May, the law would also allow the trade and CIT ministries to tender state land to the private sector. The new law would also restore sealed-envelope tenders, which were scrapped in the 2015 act now in force.

Thanaweya amma to be replaced by new system starting 2018-19: The traditional thanaweya amma high school system will be replaced by a new secondary education regime as of the 2018-19 academic year, Education Minister Tarek Shawki announced on Tuesday, Ahram Online reports. The new education system will part from traditional exams and scoring systems with a new GPA-based framework based on coursework and electronically-graded multiple choice exams. The curriculum is also getting a facelift and will reduce the importance of rote memorization, AMAY says. The ministry is also reforming primary education and will no longer be awarding primary-level education certificates to students after the sixth grade.

Resort tourism in KSA? Uh, sure — mocktails for all. Saudi Arabia’s Crown Prince Mohammed bin Salman announced the launch of an “international tourism project…to develop exceptional resorts on more than 50 natural islands between the cities of Amlaj and Al-Jawh.” The Saudi Press Agency says the project “will be a leading coastal destination, located on a number of virgin islands in the Red Sea,” and “will contribute to a qualitative shift in the concept of tourism and hospitality” in Saudi Arabia. The first phase includes “the development of the airport, the port, the development of hotels and luxury residences, the completion of facilities and infrastructure, and transport services.” The project’s fact sheet can be accessed here.

IMF data says electric cars aren’t just a fad. In a working paper, the Fund tracked the growth in electric car use against that of combustion engine motor vehicles and found that the connection runs almost parallel to the disruptive impact motor vehicles have had on the horse and carriage nearly a century ago. Using the horse-car parallel, the paper forecasts that by 2040 motor vehicles would mostly disappear in advanced economies and could comprise about a third of the fleet of all cars in emerging market and developing economies.

Want a glimpse of what you might be driving? We had the chance to check Tesla’s offerings recently and were impressed. And that was just a couple of weeks before the launch of the Model 3, of which Bloomberg has written: “Driving Tesla’s Model 3 Changes Everything:
We took one out for a spin, and have little doubt the age of electric cars has arrived.”