**#2 We’ll call off bond sales anytime yields get out of hand –Maait: The Finance Ministry will continue to cancel auctions of domestic bonds so long as yields remain high, Finance Minister Mohamed Maait said on Tuesday. Calling off bond auctions is a crucial tool in Egypt’s bid to keep its debt service obligations in check going forward, Maait is quoted by the domestic press as having said. His remarks came after the Finance Ministrycalled off its fourth treasury bond auction in as many weeks on Monday. Would-be buyers were asking for yields as high as 20% on five- and 10-year treasury bonds, a trader said.

Egypt is looking to make it easier for foreign investors to get into bonds and will do a non-deal roadshow in Asia to drum up interest,Maait told Bloomberg in a separate interview. Maait has opened talks with Belgium’s Euroclear to facilitate the settlement of domestic debt for overseas investors, who can currently only access the debt market through a handful of local banks with licenses to operate as primary dealers. “Euroclear settles transactions in international and domestic securities in dozens of countries. Enlisting its services would make it easier for foreigners,” Bloomberg quotes the minister as saying.

Testing appetite in Asia: Officials will head to Asia as early as the week after next to test appetite for potential JPY- and CNY-denominated bonds (called “samurai” and “panda” bonds in the trade), Reuters’ Arabic service quotes Maait as having said. Stops will include Korea, China, Singapore, Malaysia and possibly Japan. Maait’s tip on the Asian roadshow comes less than two weeks after he suggested the government could look east for liquidity as yields on domestic debt got out of hand. The ministry is now looking for bankers to lead the Asian roadshow.

El Sisi to unveil debt reduction strategy in two weeks’ time: Speaking of debt, President Abdel Fattah El Sisi is set to announce within two weeks a four-year strategy to reduce Egypt’s debt to 70% of GDP, Maait said at a meeting with members of the French Chamber of Commerce yesterday, Al Mal reports. Maait had said earlier this month that his ministry is drafting a comprehensive debt control strategy that is set to be the cornerstone of the government’s fiscal policy agenda. The strategy would set limits on both internal and external borrowing in a bid to bring down overall public debt levels. The country’s foreign debt levels at the end of FY2017-18 stood at USD 92.64 bn.

**#3 FinMin shelves fuel hedging plan, shrugging off rising oil prices: The Finance Ministry has officially decided to shelve a plan to hedge against rising oil prices, Minister Mohamed Maait said yesterday. Officials had suggested earlier this month that the program might be shelved if oil prices were to stabilize, and Maait’s remarks come after Brent crude hit a four-year high this week on the back of OPEC’s latest decision against further output increases. Maait agreed that the spike in oil prices will have an impact on the state budget, but shrugged off the need for the fuel hedging program, saying the ministry is “managing the crisis.” A senior government official told us over the weekend that the Finance Ministry is expected to amend targets for Egypt’s FY2018-19 budget deficit to 8.6% of GDP from 8.4% of GDP, partially due to rising oil prices. The government had reportedly signed this month fuel hedging contracts with two international banks, widely believed to be JP Morgan and Citibank.

Real estate tax on mobile network towers isn’t new, but that doesn’t mean the state treasury doesn’t want to collect it: The real estate tax on sites used for mobile network towers is not new has already been in place since the issuance of the Real Estate Tax Law, Vodafone Egypt’s External Affairs and Legal Director Ayman Essam tells Al Mal. Essam told the newspaper that the is levied on the owner of the site used for the towers, but Vodafone has been paying the tax on behalf of site owners. A government source told us earlier this week that the treasury is looking to step up its collection of the taxes payable on sites used for mobile network towers and billboards, with the levy set at 10% of their rent value. According to the source, the tax will be payable retroactively until 2013. We noted specifically at the time that this is stepping up tax collection, not a new tax.

**#4 IPO WATCH- Retail tranche of CIRA IPO closes 18.9x oversubscribed: Appetite for the retail offering of private sector education outfit CIRA’s IPO was strong, with the EGX announcing that the offering of 14.5 mn shares, for which the subscription period ended yesterday, was 18.9x oversubscribed. Trading on the company’s shares is due to begin on 1 October. The institutional component of the IPO was 10.36x oversubscribed amid high international demand. CIRA is offering some 207 mn shares (c. 38% of the company) and had priced its IPO at EGP 6.00 per share, above the midpoint of the EGP 5.45 to EGP 6.30 per share range on which it had previously guided.

Advisers: EFG Hermes is sole global coordinator and bookrunner for the transaction. Al Tamimi & Co. is acting as the issuer’s local counsel, while Zulficar & Partners is domestic counsel to the underwriter. White & Case is international counsel to the issuer, while Gide Loyrette Nouel is doing duty for the global coordinator and bookrunner. Inktank Communications is serving as investor relations advisor to CIRA.

**#5 M&A WATCH- Saudi’s Elaj to complete acquisition of majority stake in TechnoScan in November: Saudi Arabia’s Elaj Group expects to complete its acquisition of a 75% stake in medical diagnostic imaging chain TechnoScan by November, CEO Walid El Sayed says. Elaj is in the “final stages” of talks with Gulf Capital to purchase its stake in TechnoScan, and the final agreement is pending a few minor procedures. Elaj has been on an acquisition spree in Egypt over the past several months. The Saudi group acquired the Alexandria International Hospital and Ibn Sina Specialized Hospital, and picked up a majority stake in Cairo Clinic Children’s Hospital, as well as stakes in clinical laboratory group Cairo Labs and the International Eye Hospital. Elaj is also reportedly looking to purchase a hotel in Cairo to turn it into a full-service specialized hospital.

ERC launches EGP 200 mn residential development in Sahl Hasheesh: Our friends at Egyptian Resorts Company (ERC) have launched a new residential project in the Red Sea resort town of Sahl Hasheesh. The Bay Village project — which will cost around EGP 200 mn to construct — will target local and foreign buyers in the second-home market, ERC said in a press release (pdf). The EGX-listed company expects to generate around EGP 390 mn from the sale of 185 residential units spread across nine building blocks constructed over 11,000 sqm. “The project further diversifies ERC’s product offering and establishes ERC as not just a master developer but also a leading real estate developer in the country,” said CEO Wael El Hatow. Construction on Bay Village should be complete by 2023.

Alex Port to issue “within days” tenders for advisors on USD 450 mn multipurpose platform: The Alexandria Port Authority (APA) will issue “within days” a number of global tenders for a consultant, developer, and operator for its USD 450 multipurpose platform, APA boss Medhat Attiya tells Al Mal. The JV between APA and the Suez Canal Economic Authority and Land and Maritime Transport Holding Company will be overseeing work on the facility and other projects in neighboring platforms around the Alex Port, according to Attiya. The new company will also focus a large portion of its efforts on increasing capacity for container and cargo handling to 1.25 mn tonnes a year.

Background: The JV was formed to oversee the building of the platform, previously a zombie project from the 2015 Egypt Economic Development Conference, after negotiations with China Harbour, which was originally meant to take on the project, reached a dead end.

**#6 Railway to buy 1,300 cars from Transmashholding under EGP 22 bn contract: The Egyptian National Railways (ENR) will buy 1,300 railcars from Russia’s Transmashholding under a final contract signed yesterday, according to a Cabinet statement. The Russian company will set up shop in Egypt maintain the rolling stock and train maintenance laborers for 15 years. The two sides are currently in talks over the details of a separate maintenance agreement. Cabinet had approved in August ENR’s agreement with Transmashholding. The agreement is set to be financed through a loan by a Russian-Hungarian banking consortium. Egypt will pay a total of EGP 22 bn to buy the cars and will receive the first batch within 14 months and the last car within 40 months from the start of manufacturing.

Transport Minister Hisham Arafat was all over the airwaves last night to discuss the agreement, which he told Masaa DMC (watch, runtime: 5:33 and runtime: 5:29) as a core element of the ministry’s aim to complete a significant overhaul of the railways by the end of 2020. Arafat also phoned into Yahduth fi Masr to talk about the agreement and its fine print (watch, runtime: 5:59).

Complaints from Egypt and other buyers have prompted Russia to slow grain exports as it steps up quality control inspections, Reuters reports. Russian watchdog Rosselkhoznadzor had announced earlier this month that it would institute new and tougher checks on wheat exports after a rise in complaints in the past three months about dropping quality standards. The authority said that shipments bound for Egypt, Ecuador, Vietnam, Sudan, Venezuela and Israel would require 5-10 days of inspection, but noted that the measures were not aimed at limiting exports, despite protests from traders that the measures are disrupting delivery schedule and overall sales. With the rouble trading at a six-week high, “exports are naturally declining,” said Russian Grain Union head Arkady Zlochevsky. “The toughening of checks, which can be interpreted as an informal and unofficial export limitation, is adding to this process.”

Russian grain exports could slow further in the weeks to come “as harvesting dwindles, stockpiles close to Russia’s main sea ports gradually decline, competition between exporters for high-quality crops rises and the storm season approaches,” analysts told the newswire.

Egypt’s main wheat buyer took 415k tonnes of Russian wheat in a tender last week. Egypt’s wheat imports are expected to total 12.3 mn tonnes at the end of FY2018-19, the USDA projects.

El Sisi addresses the UNGA: President Abdel Fattah El Sisi delivered yesterday his address to the 73rd United Nations General Assembly, in which he focused largely on the needs of developing regions that struggle with instability and an imperative to “revive” the UN’s role moderate an international order that balances between countries’ interests and responsibilities.

The president opened by pointing to the prevalence of the disintegration of nation states as a result of strife and sectarian conflict, saying that the Arab world is “one of the most vulnerable” regions to this phenomenon, which has bred terrorism and extremism. In that vein, El Sisi reiterated his calls for the restoration of state institutions in Syria and Yemen as part of political resolutions to their ongoing civil wars, and repeated Egypt’s firm stance against external intervention in these countries’ affairs.

El Sisi delved into human rights issues, the handling of which he said is “mismanaged” and politicized by the international community. Egypt’s vision of human rights rests on a broader foundation that sees the importance of giving all citizens an equal footing on the social, economic, and cultural fronts. He went on to say that Egypt has successfully taken “major strides” in promoting human rights, particularly through the empowerment of women and youth.

You can watch the full speech in Arabic or dubbed in English (runtime: 18:28).

Meetings on the sidelines: El Sisi met yesterday with UN Secretary General Antonio Guterres during the General Assembly meetings, according to an Ittihadiya statement. El Sisi also sat down with Jordan’s King Abdullah II to discuss bilateral ties and the two-state solution for Palestine based on the 1967 borders, on which they see eye-to-eye.

In other news from the US, Politico has obtained a copy of the State Department memo that justified the release of USD 195 mn in aid to Egypt that former SecState Rex Tillerson had ordered frozen. “Far from assuring lawmakers that Egypt is making progress on human rights, the ‘memorandum of justification’ laying out the decision amounts to a searing indictment of how Egypt’s government treats its citizens — describing extrajudicial killings, unfair trials, censorship and a generally repressive atmosphere,” the political news service reports. A State Department spokesperson told Politico that while Washington has “serious concerns about the human rights situation in Egypt … strengthened security cooperation with Egypt is important to U.S. national security.” You can read Secretary of State Mike Pompeo’s memo here (pdf).

**#7 The widely celebrated Egyptian writer, public intellectual and economics professor Galal Amin passed away yesterday, Al Mal reports. Amin, who was 83, was an outspoken commentator known for his critique of Egypt’s economic and cultural dependency on western countries. Galal published eight books over the course of a rich career, with his most widely acclaimed — Whatever Happened to the Egyptians? — diving into the political, economic, and social history of Egypt from 1950 to 1995.