The deadliest terrorist attack on Egypt in its modern day history will not driveinvestors out of the market, Renaissance Capital’s MENA CEO Ahmed Badr tells Bloomberg in an interview. While some foreign investors may shy away from new exposure to Egypt for the time being, “I don’t think we’re really going to see money coming out of Egypt significantly on the back of this [attack],” he said. “Egypt is the strongest reform story we have in the region at the moment and it’s actually starting to deliver results,” Badr added, pointing to strong results across the board in the earnings season just ended. The EGX rose 0.8% on Sunday and closed the day flat yesterday, seemingly unaffected by Friday’s terrorist attack on a North Sinai mosque that left more than 300 dead in its wake. Market activity, however, was largely driven by local investors, who “at this point have basically accepted that northern Sinai is going to remain unstable,” Badr said. “Thick skin might be one way of putting it but investors have accepted the fact that this is more of an isolated territory...and it shouldn’t have an effect on the fundamentals of the market.”

Total turnover on the EGX rebounded yesterday to EGP 1.5 bn, or about 50% above the trailing 90-day average, after posting an anemic EGP 833 mn on Sunday.

Badr’s sentiments were shared by several economists who spoke to veteran journalist Patrick Werr for Reuters. They take the view that the attack may only strengthen the notion that the country needs continued IMF support as agreed a year ago and the economy is likely to quickly shake off any negative repercussions. Tourists and investors seem unlikely to be deterred by the attack, said Arqaam Capital’s Reham El Desoki. “It’s so far away from South Sinai. There have already been other terrorist attacks in northern Sinai and they haven’t impacted European tourism or any other sort of tourism,” she added. A spokesman for Thomas Cook said that there had been no noticeable impact from the attack on demand for holidays in Egypt and that sales to Egypt on Monday were trending ahead of last year’s sales.

“The Sinai incident will likely underpin the IMF board view that Egypt needs continued support still further,” Pharos Holdings COO Angus Blair said, adding that the IMF board meeting is certain to approve the next USD 2 bn disbursement of the USD 12 bn IMF Extended Fund Facility in December. One of the key issues the board must consider instead will be whether Egypt implements a planned increase in energy prices early next year or next summer, said El Desoki.

Could the attack help lift a freeze on military aid from the US? “The 24 November attack on an Egyptian mosque in northern Sinai that killed at least 305 men, women and children is an example of why the United States must remain involved in the Middle East,” Department of Defense spokesperson Rob Manning said on Monday. “The United States must help partner nations build their own defense and police capacity to ensure [Daesh], Al Qaeda and like-minded groups cannot plan and carry out attacks,” he said. While the statement from the Pentagon does not mention the over USD 200 mn in military and other aid the US froze earlier this year (ostensibly on human rights grounds), it could at the very least open the conversation on unfreezing the aid.

The statements is one of a series by Egypt’s close allies promising further assistance following the attack. Most recently, President Abdel Fattah El Sisi discussed regional cooperation on counter-terrorism with UAE Defense Minister Sheikh Mohamed Bin Zayed on Monday, Ahram Online reports. Saudi Arabia’s Crown Prince had vowed on Sunday to intensify efforts to fight terrorism by the KSA-led Sunni Muslim military alliance, while Israeli officials noted that the cabinet will decide on how to “lend Egypt a hand” in the fight in Sinai. Officials fromacross the globe,including Pyongyang, continued toconvey their condolences to President El Sisi.

Here at home, the House of Representatives’ defense and constitution committees are preparing a bill to ensure the families of terror attack victims receive compensation through a special fund, Al Mal reports. MPs discussed the fallout from Friday’s attack and the government’s response actions during an emergency plenary session yesterday. House Speaker Ali Abdel Aal called on MPs to visit North Sinai and perform Friday prayers at the mosque that was attacked.

In related news, police foiled two separate attempted attacks on security checkpoints in the North Sinai’s city of Arish late Monday, killing three terrorists.

Investment Minister Sahar Nasr signed an MoU with the International Finance Corporation (IFC) yesterday that will see both sides cooperate on the development of a sustainable national strategy to attract more foreign investment to Egypt. The agreement was inked on the sidelines of the first day of the IFC’s two-day roundtable in Cairo focused on developing Egypt’s capital markets by strengthening corporate governance. Nasr name-checked projects including a guide for foreign investors, a corporate governance code, and the development of a transparency report. “Improving transparency and regulatory reform is vital to attract more investment into Egypt and spur economic growth,” IFC MENA Regional Director Mouayed Makhlouf said. “We hope this gathering will help further develop regulatory standards and enforcement practices, as well as technical solutions to allow for better disclosure by companies listed on the Egyptian Exchange.” The event is being co-hosted by Govern, the Rockefeller Brothers Fund, and EGID. The IFC had announced last month it was planning to invest USD 1.5 bn in Egypt in FY2018-19, with renewable energy projects topping its priorities.

CDCM pursues legal action against Peugeot: Arabia Investments, Development and Financial Investment Holding Company (AIND) announced yesterday that subsidiary Cairo For Development and Cars Manufacturing (CDCM) has formally started legal proceedings against Peugeot Citroen for unexpectedly ending their 41 year-old partnership. The group hired attorney Ashraf Yehia, an international arbitration expert, to take on the case. Last week, CDCM said it was trying to contact Peugeot to understand why it had terminated the contract, vowing to take legal action to protects its stakeholders’ rights and interests. This comes one day after the Peugeot-Citroen arm of Groupe PSA reportedly chose a consortium of Mansour Group and Dubai-based Scope Investment to be its licensed distributor of Peugeot vehicles in Egypt. The French car maker is expected to make a formal announcement within the month, as the Mansour Group is reportedly looking to begin trading in the brand by early 2018.

LEGISLATION WATCH- House gives preliminary nod to amendments to law governing nuclear power authority amid disagreement over clauses on autonomy and tax breaks: The House of Representatives’ general assembly gave a preliminary nod yesterday to amendments to the law governing the Nuclear Power Plant Authority (NPPA), postponing the final vote to a later session to make changes to clauses offering tax and customs breaks, Al Masry Al Youm reports. A number of House of representatives objected to the degree of autonomy the NPPA would be granted under the amended law. The amendments, which the Ismail Cabinet approved in September, place the authority within the Electricity Ministry’s domain, but give it full oversight and regulatory power over the nuclear power sector, in addition to its own independent budget.

MPs also disagreed over a controversial clause that exempts nuclear power plants from taxes and customs, including those on imported equipment and raw materials, as well as other duties related to project development and operations.

Foreign employees and workers are also exempt from paying taxes under the law, which sets tight restrictions on foreign hires. Their rights to repatriate profits are also enshrined in the legislation.

As for regulations governing the work of NPPA employees, the Electricity Ministry will issue new policies within six months of the newly amended law coming into effect. The old policies will remain in place in the meantime.

In related news, the Council of State appears to have concluded its review of a law regulating the nuclear industry and sent it over to the Ismail Cabinet for deliberation, Al Shorouk says. This comes as we wait for President Abdel Fattah El Sisi to set a date for Egypt to sign the contracts for the USD 30 bn Dabaa nuclear power plant with Russia’s Rosatom. The event should bring President Vladimir Putin to Egypt and may herald the return of direct air travel between Moscow and Cairo.

Polish tourists accounted for more than 121,000 of the 4.3 mn visitors Egypt welcomed in 2017, Polish Tourism Chamber head Paul Niewiadomski announced yesterday, Egypt Independent reports. That makes it the sixth-largest tourism market for Egypt, Niewiadomski said at the Polish Chamber of Tourism’s annual conference in Marsa Alam. Tourism Promotion Authority head Hisham El Demery had announced in August that Ukrainian and Polish tourist arrivals jumped 120% y-o-y in 1H2017, but had not provided the number of visitors from either country.

“Tourists appear to be coming back to Egypt’s plethora of attractions” after several years, Public Radio International’s Salma Islam says. While the tourism industry has yet to recover to pre-2011 levels, Egypt is “on course to welcome 8 mn tourists by year’s end,” according to the UN World Tourism Organization. The uptick in tourist activity — which can be seen in several cities across the country including Luxor — comes as the Tourism Ministry has been promoting alternative Red Sea destinations, offering incentives to tour operators, and flying in celebrities such as Lionel Messi for publicity. Islam also notes that many countries “traditionally deemed safe, like France, Germany and the UK, have also seen an increased number of terror attacks on their soil over the past two years.” This may have helped reduce tourists’ concerns about Egypt’s safety situation.

MOVES- Deutsche Bank has named Ahmed Shehab its new head of trade finance for financial institutions in the Middle East, North Africa and Turkey, Reuters reports. Shehab will be based in Egypt.

EFG Hermes, Sawiris Foundation commit north of EGP 50 mn to rebuild two Luxor villages: EFG Hermes signed an agreement with the Sawiris Foundation for Social Development yesterday, under which it plans to launch a EGP 53 mn comprehensive development plan for two Luxor villages, according to a press statement. Both densely populated villages suffer from high unemployment rate, poor infrastructure, and limited access to healthcare services.

Hamas is refusing to disarm and has instead “vowed to expand its military activities against Israel into the West Bank, The Associated Press reports. The group’s demilitarization was one of the main demands Palestinian President Mahmoud Abbas’ Fatah party made in the Egypt-mediated reconciliation agreement. However, a senior Hamas official says the group’s weapon arsenal is “not [up] for debate or talk.” The issue “threatens to derail” Egypt’s reconciliation efforts as disagreements between Fatah and Hamas continue to intensify, the newswire says. Following Hamas’ statement, an Egyptian security delegation arrived in Gaza yesterday to “bridge the gaps” between Hamas and Fatah in the reconciliation and power handover agreement, Xinhua reports.

Kenya mulls return to int’l bond market with USD 2 bn eurobond issuance in 1Q2018: The Kenyan government has tapped a number banks for pitches on the structure of a potential USD 2 bn eurobond offering in 1Q2018, sources familiar with the matter tell Bloomberg. “Kenya’s return to international capital markets would mark its first sale of foreign debt since a debut Eurobond in 2014,” the news website says, noting that proceeds from the sale would be used to plug Kenya’s budget deficit.

Israeli courts banned Uber from operating private car services in the country, Bloomberg reports. Uber’s standard platform has always been banned in Israel, which has laws barring drivers without a taxi license from accepting charges. The Uber workaround in their UberNight and UberDay services in Israel was essentially a reimbursement scheme where charges were defined under fuel and maintenance.