Edita Food Industries announced the inauguration of its E08 factory in the Polaris Al Zamil district in Sixth of October and the commissioning of its new wafer line. Edita says the factory is its fifth and “is set to house around 11 new production lines. The factory will deploy state-of-the-art technology and is in compliance with international quality and safety standards, including HACCP, ISO 22000, ISO 9001, and ISO 18001.” Edita says it is also currently installing a new cake line at the facility with commercial production scheduled for August 2017. Chairman Hani Berzi says “the new factory will allow us to both expand our current product offering through the introduction of variants on existing products and, in parallel, give us the space we need to continue rolling out new products developed through the company’s in-house R&D department.” Edita also announced the start of commercial production of the new wafer line, which was marked with the launch of the latest entrant in its product lineup: Freska Fingers.

Arafa Holding has “no plans to inject any new investments in Egypt” in the coming period following the central bank’s decision to raise interest rates, Chairman and CEO Alaa Arafa told Al Shorouk. The cost of capital at the moment is not conducive to new investment, Arafa said, adding that no project can now be profitable given the mix of taxes, tariffs, and the high interest rate. The safest option now is to park funds in deposits, he added, stressing that the government needs to expand investment incentives if it wants to deliver on its economic goals. Arafa is the latest in a string of business leaders who have said they’re holding back on new capex given the prevailing interest rates after successive rate hikes.

More interest rate ripples as Naeem Holding will not extend subscriptions on its EGP 1 bn real estate fund for now because of the rate hike, the company said in a regulatory filing (pdf). The fund — the first of its kind in Egypt — is 1.3x oversubscribed, the company said.

The Ismail government has ordered the closure of market research firm Ipsos’ Cairo office, citing workplace health and safety violations, according to Reuters. A spokesman for the Manpower Ministry confirmed the ministry had ordered Ispsos closed in a decree handed down on 20 June. The spokesman also says the authorities have not yet carried out the closure. Amr Qais, managing director at Ipsos, told Al Mal that they hadn’t received an order of closure, that the company is currently still operating as usual. He added that Ipsos adheres to the highest standards of safety in the workplace. An anonymous source from the company had told Reuters that the government’s claims are “false.” Ipsos runs audience testing and opinion polls on Egyptian television networks.

Under cost pressure, the Oil Ministry has scaled back its target for the number of homes it will connect to the national natural gas grid in FY2017-18, aiming to hook up some 600k, down from a previously planned 1 mn, undersecretary for gas projects Mohamed Hassanein Radwan tells Youm7. The reduced target comes as the ministry faces rising cost pressure: Contractors to whom it grants concessions to connect and service homes are demanding higher connection fees given that up to 75% of their materials are imported. The ministry’s initial target of 1 mn homes was expected to cost EGP 4.2 bn. The Finance Ministry has allocated EGP 1.2 bn in the state budget for the current fiscal year to connecting homes to natural gas.

IPO WATCH- 10 state-owned companies will list under the government’s IPO program over the next three years, Investment and International Cooperation Minister Sahar Nasr said on Sunday, according to Al Mal. These companies will list 10-20% of their shares, which imply a cap of 20% on all state IPOs. The first of these companies to list, Enppi, appears to break with this mold as 24% of its shares will be listed. We had noted yesterday that state-owned Banque du Caire, which has been slated for an IPO, will cap its shares on offer at 20%.

IPO WATCH- The Egyptian Propylene & Polypropylene Company (EPPC) is expecting to rake in USD 300 mn from its planned IPO in 1Q2018, Karim Saada, country head of MENA private equity firm Amwal Al Khaleej, tells Daily News Egypt. EFG Hermes was tapped as the lead manager for the listing. The proceeds from the IPO should help EPPC expand production capacity at its petrochemicals plant to 600K tonnes annually from 290K tonnes.

INVESTMENT WATCH- Cairo Angels is investing in Egypt-based shipment platform Bosta, according to Forbes Middle East. The report did not disclose the investment value, but says it followed Numu Capital’s decision to invest in the startup. Bosta is a logistics tech company that allows customers to send and receive shipments and track them online. “We are very confident that Bosta can deliver a compelling solution to a very real problem that is clearly identifiable across emerging markets and beyond,” Cairo Angels chairman Aly El Shalakany is quoted as having said. Bosta is planning to expand regionally.

EFG Hermes Research announced it topped the leaderboard of Institutional Investor’s 2017 EMEA Investor Poll and came in second on the Thomson Reuters Emerging Markets Extel Survey. The investment bank also said it recently initiated coverage of Vietnamese banks, 11 Egyptian small and mid-cap stocks and introduced economic analysis on frontier markets, including Pakistan and Kenya, bringing the total number of regional equities covered to over 170. EFG Hermes says it is accommodating growing interest in frontier markets given the “low interest rates in developed markets and slow growth in emerging markets, coupled with improving political and economic conditions in frontier markets.”

The Egyptian Media Production City (EMPC) resumed broadcasting Al Hayat TV channels yesterday after the television network’s chairman Al Sayed Badawi repaid its debts to EMPC, Ahram Gate reports. EMPC had decided earlier this month to cut off services provided to the network, including electricity, due to EGP 20 mn in overdue payments, pushing the network to begin broadcasting from abroad. Al Hayat had issued a statement at the time alleging it had already paid its bills and that EMPC was was in fact indebted to the broadcaster.

Lobna Helal, Mona El Garf, Mona Zulficar make Forbes power list: CBE Deputy Governor Lobna Helal was ranked second on Forbes Middle East’s list of the 100 Most Powerful Arab Businesswomen. Egyptian Competition Authority chief Mona El Garf was placed 20th, and Zulficar & Partners founding partner and EFG Hermes non-executive chairperson Mona Zulficar is also on the list, coming in at number 23.

FDI to grow by 20% y-o-y in FY2017-18: Foreign direct investment to Egypt in FY 2016-17 is likely to have recorded USD 8-8.5 bn, Planning Minister Hala El Saeed projects, according to Reuters. El Saeed says the government is targeting 20% y-o-y increase in the FDI figures in FY2017-18. The official data for the whole fiscal year is not out yet.

Freezones are back in fashion under the new Investment Act, and the Investment Ministry has a strategy running through 2034 that will see more roll out nationwide, Investment and International Cooperation Minister Sahar Nasr told investors in Alexandria, according to a ministry statement. A public freezone is set to be established in each governorate, with a logistics center built for every port across the country. Private-sector-run free zones will also play a role in the strategy, Nasr said, with an emphasis on infrastructure and utilities projects. The state will offer 406 projects at freezones worth a total of USD 9.9 bn, she added, 71 of them in private freezones. Nasr also noted that SMEs will be welcome in freezones and emphasized that the Alexandria freezone will include a startup incubator.

Nasr also noted that the ministry’s investment map, which will outline the geographic distribution of some 600 priority projects, should be ready within the month, Al Borsa reports. The minister had previously said that the map would be out last week.

Meanwhile, Alexandria Governor Mohamed Sultan has submitted a request to the New Urban Communities Authority (NUCA) to allocate 700 feddans at the Borg El Arab freezone to the expansion of industrial installations there, according to Al Borsa.

60-40 split with gov’t on revenues from CFLD’s developments in new capital: Nasr also spoke of China Fortune Land Development Company’s (CFLD) project in the New Administrative Capital, saying that the government will retain 60% of revenues from CFLD’s projects there as part of a revenue sharing agreement with the company. As we noted last week, CFLD had pledged USD 13.5 bn over the next 10 years in developing the 14,000 feddan first phase of the new capital — an apparent reduction in the size of its initial pledge of USD 20 bn. USD 4 bn will be invested in the development of industrial parks in the new capital over the coming four years, an Ittihadiya statement picked up by Al Borsa had said.

Overhaul of bread subsidy system unlikely to change how much wheat Egypt imports: The Ismail government’s overhaul of its bread subsidy program is unlikely to lead to any significant change in how much wheat Egypt buys on the international market, traders and analysts tell Bloomberg. “Import demand will be the same as people still need to consume wheat and flour and Egypt’s bread consumption is one of the highest in the world,” CEO of Roots Commodities in Egypt Haitham Nouh said. “We expect import volumes to stay normal and any increase in wheat imports will only be a reflection of the increase in population.” Nouh also believes the political sensitivities underlying the bread subsidy program would mean that the pace of reforming the system will be gradual, and hence unlikely to impact wheat imports significantly. Last Wednesday, the Supply Ministry had announced it is ending subsidizing the production of flour and will only subsidize the production of bread beginning in August. A few days prior to announcing the decision the Supply Ministry said that it will increase wheat imports in FY2017-18 to 6.2 mn tonnes from 5.5 mn tonnes during the previous fiscal year.

Security forces’ attempts to clear state-owned land on El Warraq island in Giza have reportedly resulted in the death of one person there, in a story getting major pickup across both local and international news. The clashes erupted as the security forces moved to clear squatters and illegal building from the area, but were met with heavy resistance. Al Shorouk reports that police officers were injured in the clashes which were followed by a decision to halt the move to clear the settlers off the island indefinitely, according to a Giza governorate source. Prime Minister Sherif Ismail defended the evictions, saying it was the government’s right to seize unlawful developments on illegally occupied land. Ismail issued a decree forming a committee to investigate the events that took place, according to Al Shorouk.

Several tour operators believe Friday’s knife attacks in Hurghada will have negative repercussions on Egypt’s tourism industry, Al Shorouk reports. Some tourists staying at the hotels where the attacks took place have reportedly requested to leave, says Ali Okda, CEO of German tour operator FIT’s subsidiary Meeting Point. Hossam El Shaer, the president of Thomas Cook’s local agent, Bright Sky, said he expects German tourism in particular will take a hit. He denied, however, that any of his agency’s bookings have been canceled, telling Al Mal that it may be too early to properly gauge the international reaction.

Meanwhile, Egypt's State Information Service (SIS) issued a statement yesterday saying that the motives behind the knife attack have not yet been determined. SIS asserts that “the assailant is still being questioned by the investigation authorities … the authorities have not yet identified the nature of the attack and motives behind it.” The government’s PR arm also said that the English translation of the statement issued immediately after the attack “contained an error, falsely indicating that the attack is ‘a terrorist act,’ and the same error was in the statement French translation.” SIS says it fired the two freelance translators who prepared the statements.

Erdogan is hurting gas exploration in East Mediterranean to score political points at home: The inability of Greek Cyprus and Turkish Cyprus to reach an understanding in these latest round of talks does not bode well for natural gas exploration in the East Mediterranean, writes Cyril Widdershoven for Oil Price Magazine. This comes at a time when the gas exploration in the area is picking up, with oil majors Total and Eni presumably having begun offshore drilling as scheduled yesterday, not to mention talk of a possible gas export line between Israel and Turkey. The situation is made worse by the involvement of the Turkish Sultanate under potentate Erdogan, who is likely seeking to drum up national fervor of the issue to draw attention to the massive protests erupting in commemoration of last year’s failed coup to have him ousted. Ankara condemned drilling operations on Cyprus’ coast and threatened to take all necessary measures. Turkey has reportedly sent a frigate to the area, with as its sole purpose to monitor the West Capella, the drilling vessel used to drill on Block 11. For the record, Block 11 is close to Egypt’s Zohr field.

Washington Post claims the UAE orchestrated hacking of Qatari government sites: The UAE reportedly orchestrated the alleged hack of Qatar’s news agency, the event that (publicly, at least)sparked the whole Qatar Smackdown, the Washington Post reports, citing unnamed US intelligence sources. Intelligence officials reportedly confirmed to the newspaper senior members of the UAE government discussed the plan and its implementation on 23 May — a day before comments by the ruling Emir appearing to praise Iran and Hamas were aired on Qatar’s news agency. The officials said it remains unclear whether the UAE carried out the hacks itself or contracted it out. “The UAE had no role whatsoever in the alleged hacking described in the article,” the UAE’s ambassador to the US, Yousef al-Otaiba, said in a statement. “What is true is Qatar’s behavior. Funding, supporting, and enabling extremists from the Taliban to Hamas and Qadafi. Inciting violence, encouraging radicalization, and undermining the stability of its neighbors,” he added.

Unilever and Hormel Foods Corp will be vying to acquire the foods division of Reckitt Benckiser, according to a Reuters brief. Whomever outbids on this one is probably going to shell out in excess of USD 2.9 bn for the acquisition.