Egypt has bought US wheat for the first time in four months, Bloomberg reported. US authorities “inspected 51,603 tons of wheat for export to Egypt in the week ended May 4, U.S. Department of Agriculture data showed on Monday. The last shipment to the country was in mid-January.” Egypt “probably bought that last week when we had the freeze and the weather concerns … There may be some issues bubbling up with other suppliers — Europe’s a little dry, Russia’s a little bit dry.” said Don Roose, president of US Commodities Inc. Egypt has not been a major buyer of US wheat recently, as supplies from countries including Russia, Ukraine and Romania proved more attractive.

M&A WATCH- Our friends at PICO are on a tear this week: PICO Group subsidiary Cheiron Egypt acquired a 50% stake in Sahara North Bahariya Ltd for USD 83 mn from EFG Capital Partners Fund III, sources close to the matter told Al Borsa on Tuesday. Cheiron reached financial close on the transaction earlier this week after winning approval from the state’s Egyptian General Petroleum Corporation. Sahara North Bahariya owns the North Bahariya oil concession in the Western Desert. The news comes on the heels of news that Cheiron also acquired 100% of Engie’s West El Burullus gas concession earlier this week.

INVESTMENT WATCH- Lekela Power, the pan-African renewable operator that is reportedly 60% owned by funds controlled by emerging markets private equity player Actis, will sign contracts for a USD 350 mn, 250 MW wind farm in the Gulf of Suez within two months, Actis Partner Sherif El Kholy says, according to Al Mal. Lekela’s website says it has nearly 1.3 GW of capacity “at the development and construction stages” in Egypt, South Africa, Ghana and Senegal.

INVESTMENT WATCH- The Egyptian Propylene & Polypropylene Company (EPPC) is planning to invest USD 1 bn in expansion during the first quarter of next year, Al Borsa reports. The expansion will be funded through a capital increase and debt instruments, Amwal Al Khaleej’s Cairo boss Karim Saada tells the newspaper. Amwal owns 16.4% of EPPC.

It is beyond time to clean up our act as another country bans imports of our produce: The Kuwaiti government has decided to suspend its imports of Egyptian lettuce, onions, and guava, citing high levels of pesticides, Kuwait’s Al Rai reported on Tuesday. Imports of other crops from Jordan and Oman were also halted for the same reason.

House’s third swing at the 10% hardship raise could be its last: The House of Representatives risks scrapping the 10% hardship raise for bureaucrats not covered under the Civil Service Act if it fails to reach quorum for a third time during today’s general assembly session to vote, as House laws stipulate, Ahram Gate reports. House Speaker Ali Abdelaal postponed the vote yesterday and once before last week due to lack of quorum. Behind the scenes, there’s a running conflict between some MPs and the government over the size of the raises. Luckily though, anddespite the objections within their ranks, MPs appears to have resolved their issues with the Ismail cabinet, according to Youm7,agreeing that it take the form of a specific EGP sum rather than a percentage of employees’ base salary, as they had earlier demanded.

Cabinet tops up ration cards for Ramadan: The Ismail cabinet agreed at its Tuesday meeting to allocate EGP 1 bn to top-up ration cards for welfare recipients for the month of Ramadan to EGP 35 from the standard monthly EGP 21 in a bid to ease some of the pressure caused by inflation on low-income earners and the poor. Among other decisions taken yesterday, ministers::

• Signed off on amendments to the Criminal Procedure Act meant to expedite legal proceedings.
• Approved Amendments to the Agricultural Actthat enforce stricter punishments of 1-2 years in prison and fines ranging from EGP 10k-50k for cotton ginners operating without the necessary permits.
• Okayed a KWD 100k (USD 328.6k) grant from the Kuwaiti Arab Economic Development Fund for agricultural development in North Sinai.

The government expects to complete its actuarial studies for the new UniversalHealthcare Act in two weeks’ time, Health Insurance Organization chief Ali Hegazy told the press on Tuesday, Al Mal says. The results of the studies were originally due in late April, according to previous statements by Health Minister Ahmed Rady, and are expected to kick-off preparations for the new bill, which has been approved by the Ismail cabinet and will be implemented first in the governorates of Suez, Port Said, and Beni Suef.

Egypt complains to world aviation body about in-flight laptop ban — at the same time the US is looking to take the ban global. The International Civil Aviation Organization (ICAO) met yesterday behind closed doors in Montreal after Egypt and the United Arab Emirates “complained their airlines had been unduly penalized by the decision to relegate laptops to the cargo hold on some flights due to security concerns.” Egypt won’t be getting a very sympathetic ear. An ICAO working paper seen by Reuters “threw its weight behind concerns that laptops are a greater security risk in the passenger cabin than in the hold, because of the threat that hidden explosives could be detonated manually.” In parallel, the body “has also asked its experts to weigh this against the safety risk of storing a larger number of flammable batteries unattended in a commercial aircraft's baggage compartment.” Bloomberg, meanwhile, reports that “anti-terrorist officials in the U.S. are considering expanding the restrictions on carrying electronic devices in airline cabins beyond the handful of Middle East airports currently covered.”

EARNINGS WATCH-Abu Dhabi Islamic Bank (ADIB) Egypt reported a consolidated net profit to EGP 73.7 mn in 1Q2017, a 38.5% y-o-y decrease from the EGP 119.8 mn recorded in 1Q2016, according to an EGX filing. Revenues were up 36% y-o-y to EGP 604 mn in 1Q2017.

Delek looking to list in London, maintains Egypt is a possible export market: Israel’s Delek Group, which operates the Leviathan gas field, is considering listing in London “to help further overseas expansion,” according to Bloomberg. Leviathan is set to begin providing gas to Israel and Jordan at the end of 2019 with export plans also including shipping the output to liquefaction plants in Egypt. The company may also ship via new pipelines to markets such as Italy and Turkey, Delek’s President Asaf Bartfeld said, adding that the options are still under discussion.

US President Donald Trump has fired the director of the Federal Bureau of Investigation, “abruptly terminating the leader of a wide-ranging criminal investigation into whether Mr. Trump’s advisers colluded with the Russian government to steer the outcome of the 2016 presidential election.” The move immediately prompted comparisons to the “Saturday Night Massacre” of 1973, in which then-president Richard Nixon “Nixon purged the Justice Department in the middle of the Watergate investigation.” The reverberations from this one could be significant, folks, and if you — like us — are a junkie for US politics, you’ll want to nudge up the volume on your office television today. Reuters and the AP have the facts. Reuters has a long roundup of reax quotes. But the best two pieces through which to get up to speed (as of dispatch) are in the New York Times: Primary coverage here and a dive into parallels to Watergate here.

MEETING NOTES- Enterprise spoke to World Bank’s Chief Economic Advisor for MENA Shanta Devarajan for an interview at his office in Washington, DC, last week. Key takeaways:

• On job creation: “The government doesn’t necessarily need to invest in job-creating sectors. The government needs to invest in policies and regulations that get the private sector to invest in job-creating sectors,” Devarajan said. It is about implementing the policies, not just introducing them, he added, stressing on competition policies to support the job-creating SMEs.
• On how effective raising interest rates would be to combat inflation, given Egypt’s largely unbanked population, Devarajan said, “It doesn’t matter whether most Egyptians don’t have bank accounts or not, because what’s going on with the fiscal deficit is that the banks are using whatever deposits they have to buy the bonds.” Interest rates go up as an incentive to buy bonds, and every government needs a monetary policy tool to help contain inflation, which Devarajan describes as a “one shot episode” in Egypt. Bottom line: It all boils down to the fiscal deficit, he says. “The inflation and high interest rates are symptoms.”
• On the US providing “loan guarantee authority for Egypt” in a spending bill approved last week, Devarajan said it is not likely to make Egypt borrow more, because Cairo is only borrowing at the moment to finance its fiscal deficit. And despite the interest rate differential, Devarajan was cautious on foreign borrowing: “Now they’re borrowing domestically at 8%, and now you might be able to borrow in world markets at 2%,” he said, but the foreign currency risk that comes with the 2% rate gives pause.
• On growth and oil prices: All oil-importing countries in MENA (such as Egypt) are growing faster in 2017 due to low oil prices and relative political stability. “Even if oil prices stay at USD 40-50 a barrel range, I think even the oil exporters will see a slight uptick in growth,” Devarajan said.
• Shale has set a USD 60 / bbl ceiling on oil prices: “[Oil prices have not gone down] because of the US shale. It’s the non-OPEC countries that are now determining the price of oil, effectively,” said Devarajan. “If you look at it, the thing is, US shale becomes profitable at about USD 60 a barrel. And the interesting thing about shale … is that you can turn on and off production in six months.” So if the price goes up to USD 60, there will be a flood of US shale production that could go up to 1 mn barrels a day, making USD 60 effectively the new ceiling for the market.