Inflation falls in May: Annual urban consumer headline inflation fell to 29.7% in May, down from 31.5% in April, according to CAPMAS, while monthly urban inflation rate was unchanged from April at 1.7%. Food price inflation eased slightly, dropping to 41.1% in May. Annual core inflation eased to 30.57% in May from 32.06% in April, going up by 1.99% on a monthly basis from 1.10% in April, according to the CBE. A research note from Pharos Holding’s Ramy Oraby notes that the easing is “partly due to the favorable base effect from the corresponding period last year.

The drop in the headline annual rate was the first reversal since the EGP float last November, Tarek El Tablawy and Ahmed Feteha write in Bloomberg. “The drop in the annual figure in May is probably temporary, and is mainly driven by the stability of the exchange rate used to calculate customs … The stagnation of the monthly rate, however, shows that inflationary pressures are still there,” Arqaam Capital Senior Economist Reham El Desoki says. El Desoki expects says inflation could inch up again in June with the seasonal impact of Ramadan and could tick up again in July “as a result of expected increases in electricity prices and the effect of the increase in the rate of the new value-added tax.” The VAT is due to rise to 14% in 1 July from 13% today.

Electricity subsidies might still be with us beyond 2019: The government is considering extending its timeline for the phase-out of electricity subsidies by another two or three years instead of having them removed entirely by 2019, Electricity Minister Mohamed Shaker said, according to Reuters. The delay would be to reduce the burden of additional price increases, Ministry spokesperson Ayman Hamza says, explaining that the subsidies could remain in effect until 2021 or 2022. Shaker had said the government has not yet decided on the price hikes set to take effect on 1 July with the new state budget year, but said the government has ruled out leaving the prices unchanged.

INVESTMENT WATCH- The Ismail cabinet voted on Thursday to green-light a plan from Canada’s SkyPower to develop a 3 GW solar PV project. The USD 5 bn project was originally signed during the March 2015 Egypt Economic Development Conference, and was resurrected earlier this year.

The news came as the European Bank for Reconstruction and Development (EBRD) has approved a USD 500 mn framework to finance renewable energy projects in Egypt, the institution said in a statement. “The financing, approved by the EBRD’s Board of Directors on 7 June 2017, supports the development of private renewable energy projects under the Egyptian government's feed-in-tariff programme. That program aims to stimulate private investment in over 4 GW of wind and solar power.” EBRD’s board approved 13 projects under the same framework and three others are scheduled for discussion later this month. In total the 16 power plants would deliver 750 MW of solar photovoltaic capacity and are expected to reduce carbon dioxide emissions by 900k tonnes a year. “We have been working with the Egyptian authorities since 2014 to help them fulfil their ambitious goals in this area. We are delighted now to be in a position to commit very significant financing to projects, which we expect to start construction before the end of 2017. This progress is really a tribute to the Egyptian government’s sustained commitment to making the best use of their abundant solar and wind resources to move to a more diverse and sustainable energy sector,” said Harry Boyd-Carpenter, head of power and energy at EBRD.

INVESTMENT WATCH- Food discovery platform Elmenus has closed a USD 1.5 mn Series A funding round with an investment from Algebra Ventures, the company said in a statement (pdf). Our friends at Elmenus will use the funding “to build new features that facilitate for users to order their food online and will continue focusing on solving the bigger problem of dining decisions; using an AI-powered food recommendation engine on top of a social and visual experience that will help users make the best dining decision, every time,” said CEO Amir Allam. Algebra’s Ziad Mokhtar, who will join the company’s board of directors, said, “Considering that prior to our investment, Elmenus had seen only USD 60k in funds invested, the traction they’ve achieved — in terms of users, revenues, content — is impressive. With this investment, Elmenus is well-poised to grab a substantial stake in the digital food space which is dominated globally by the likes of Just Eat, Zomato, and Delivery Hero.”

Ride-sharing apps Uber and Careem were allegedly asked by the Sisi administration to divulge real-time user and driver data, writes Declan Walsh in an epic piece for the New York Times. He alleges that the government offered both companies incentives and advantages in exchange for sharing the data. Uber, “already reeling from accusations of overly aggressive business practices in the United States,” reportedly refused the request right away, but Walsh cites sources saying Careem held a number of meetings to entertain the idea, something the company has since denied. In any case, company attempts to avoid providing data may be moot: A bill now before the House of Representatives to regulate the industry contains provisions that would require servers be stored in Egypt — and that access be granted to relevant government bodies, writes Walsh.

One of the international companies that wants to build the Six of October monorail is under fire at home and abroad. Canada’s Bombardier faces a World Bank investigation of whether it engaged in or condoned bribery to land a USD 340 mn contract to supply railway equipment in Azerbaijan, the Globe and Mail reported this weekend. If the World Bank’s auditors determine Bombardier engaged in “corrupt practices” it could be banned from work on any project financed — in whole or in part — by the bank. None of the allegations against the high-profile aircraft and train maker have been proven. Meanwhile, the New York Times is reporting that production problems with Bombardier cars are one of the reasons that “New York City’s C train has become one of the low points in its subway system.” Bombardier is also reportedly facing problems with metro and streetcar projects in both Montreal and Toronto. Egyptian officials are yet to make an official announcement that a consortium including Bombardier has won the Six of October to Giza monorail project. The group was originally said to have won the contract in 2015, only to later find it faced competition from a Chinese group. The Transport Ministry was said in April to be on the verge of awarding Bombardier a contract to study the monorail project.

GASC insists zero-tolerance policy on ergot isn’t coming back: The General Authority for Supply Commodities (GASC) is adamant that Egypt’s zero-tolerance on ergot contamination in wheat imports is not about to make a return. GASC Vice Chairman Ahmed Youssef told Reuters on Saturday that the administrative court’s ruling of last Tuesday, which reinstated the Agriculture Quarantine Authority (the body that had imposed the zero-tolerance policy), was purely an administrative and procedural ruling and would have no real impact on policy. The news comes as Egypt bought 360k tonnes of wheat from Russia and Romania, Al Mal reports, bringing to about 500k tons Egypt’s total purchases in the last month. Egypt does not typically wheat import during the domestic harvest season, but Reuters suggests the buying spree is coming ahead of a possible policy showdown ahead of the next court session on Tuesday.

The Ismail government signed off on amendments to the Companies Act during its weekly meeting on Thursday, according to a statement. The amendments, which were first instituted by the Investment Ministry last month, would see companies required to make a first call for a general assembly at least 21 days in advance. The amendments also include a new clause governing sole proprietorships, which aims to encourage SMEs, in addition to putting in place a system to allow companies to be established electronically. Other key decisions taken during the meeting include:

• Agreeing to study the possibility of establishing a holding company to collect and recycle waste within three months;
• Approving amendments to the Civil Status Act to connect citizens’ national ID number with the services they are entitled to;
• Approving amendments to the law establishing the National Authority for Quality Assurance and Accreditation of Education;

President Abdel Fattah El Sisi arrives in Berlin today for what officials are describing as alargely business-focused visit, according to Al Masry Al Youm. The president’s packed agenda includes a speech at two-day G20 Africa Partnership Conference that kicks off tomorrow. He will also participate in a roundtable discussion with German Chancellor Angela Merkel and other African leaders on infrastructure investment in Africa and public-private partnership agreements. German executives will also be at the meeting, including Siemens CEO Joe Kaeser, who will brief attendees on his company’s partnership with the Egyptian government on energy projects.

EUR 207 mn’s worth of new agreements: El Sisi is expected to sign new agreements worth a collective EUR 207 mn during meetings with German business leaders, according to Investment and International Cooperation Minister Sahar Nasr, who’s accompanying the president.

Egyptian-German Business Forum to launch: The president will also kick-off the Egyptian-German Business Forum, with more than 150 German and Egyptian companies in attendance, Egypt’s ambassador to Berlin tells AMAY. The Forum will be co-headed by Egyptian Trade and Industry Minister Tarek Kabil and German Economic Affairs and Energy Minister Brigitte Zypries.

El Sisi will also be holding one-on-ones with Merkel and other officials including Vice Chancellor and Foreign Affairs Minister Sigmar Gabriel and the ministers of interior, economic affairs and energy, and economic cooperation and development.

We’ll also be on the lookout for an interview with El Sisi on German TV.

The House Legislative Committee is to begin discussion today of the handover of Tiran and Sanafir. The session will be headed by House Speaker Ali Abdel Aal, Youm7 says. MPs are expected to debate whether or not the agreement should be discussed by the House as a whole, since the Administrative Court had nullified it back in January, according to Al Mal.

Things appear to be moving forward regardless: The House’s majority bloc, the Support Egypt coalition, said in a Friday statement that MPs have the right to review the agreement. Representatives also plan to ask a number of senior state officials to testify before the Legislative Committee this week, sources tell the newspaper, adding that the agreement could be moving over to the House’s general assembly as early as next week.

The House is likely to sanction the agreement, officials also tell Al Shorouk. In parallel, there appears to be an effort by the state to present MPs with evidence backing the contention that the two islands are legitimately part of Saudi Arabia and should be handed over, Youm7 reports.

Is Sudan reconsidering its ban on Egyptian imports? Yes, according to Sky News Arabia, which cites unnamed sources as suggesting Sudan might backtrack on the ban it imposed on Egyptian imports last month. This comes one week after Sudanese Foreign Minister Ibrahim Ghandour met with his Egyptian counterpart and Egyptian President Abdel Fattah El Sisi for largely positive but inconclusive talks on issues including the ban, national security, and claims that Egypt had helped armed Sudanese rebels.

Tit for tat? Egyptian and Ethiopian diplomats have asked the UN’s Security Council to suspend the International Criminal Court’s arrest warrant for Sudanese President Omar Al-Bashir, who is accused of committing war crimes and crimes against humanity, Africa News claims.

Among the international news stories worth a look this morning:

Theresa May’s snap election backfires: British Prime Minister Theresa May lost her majority in parliament after her ruling Conservative Party failed to secure the “smashing victory” she was expecting in a snap election, the New York Times reports. The election, which was held less than two weeks before May is expected to begin negotiating Brexit terms, resulted in a “hung parliament” where no party has enough seats to control parliament. BBC breaks down what exactly a hung parliament means and what the road ahead looks like.

Trump accuses former FBI director of lying under oath after fiery congress testimony: US President Donald Trump accused former FBI director James Comey of lying under oath in the wake of Comey’s blockbuster Thursday testimony to the Senate Intelligence Committee, Reuters reports. Comey publicly accused Trump of trying to halt a federal investigation into former aide Michael Flynn’s alleged ties to Russia and said that Trump had asked him when he was first sworn in to “pledge loyalty to the president, an unusual request that would put in doubt the independence of the FBI,” the newswire says. The accusations are “devastating to President Trump,” says The Washington Post, as they make him out to be “a liar who sought to halt the federal investigation into a former top aide and putting him in dire legal peril.”