PMI: Non-oil business activity contracts for third month in a row: Private sector activity contracted for the third month in a row in November, but at a slower pace than the previous two months, according to the Markit / Emirates NBD purchasing managers’ index (pdf). The PMI rose to 49.2 in November from 48.6 in October, closely missing the 50 expansion mark. “The recovery in the headline PMI in November to a three-month high is encouraging,” Emirates NBD MENA economist Khatija Haque said. Declines in output, new orders, and export orders were behind the contraction.

Employment index falls: Some of the surveyed firms said they actively let staff go in response to falling demand. “Although the declines in output and new work were relatively modest, the employment index fell to its lowest level since March,” Haque said.

But sentiment was positive: “Overall sentiment was positive, with many companies hoping that market stability will encourage demand.”

Average yields on Egyptian treasury bills were stable on Thursday, the first auction after the country scrapped the repatriation mechanism. The average yield on one-year T-bills was 19.97%, compared to 19.92% at the last similar auction, while the average yield on 6-month T-bills was 19.98%, compared to 19.89% at the last auction, CBE data showed.

Speaking of the repatriation mechanism, IMF Mission Chief to Egypt Subir Lall praised the decision in remarks carried by state news agency MENA. Lall said the move was timely and critical to the advancement of the Madbouly government’s reform program. The mechanism played a key role in the first phases of the program, he noted, helping attract portfolio investment. Scrapping the mechanism sends the right message to investors, said Citibank Egypt's country treasurer, Mohamed Abdel Kader, underlining that Egypt has put the days of foreign currency shortages behind it and is now on the road to recovery.

IPO WATCH- Four international financial institutions are looking to buy stakes in Banque du Caire as soon as its IPO is announced, CEOTarek Fayed said on the sidelines of the Africa 2018 Forum in Sharm El Sheikh. Fayed said he expects the IPO to take place in 2019, but said the final timing would be subject to market conditions.

Look for EBRD to buy a stake: The European Bank for Reconstruction and Development (EBRD) is at top of the list of institutions looking to buy shares, Fayed said, confirming BdC and EBRD have already discussed a transaction. Fayed gave no details on the size of the stake the bank was planning to offer or name the three other banks interested. Egypt said in October it would postpone its share-sale program due to market volatility.

Background: EBRD Managing Director for the Southern and Eastern Mediterranean Janet Heckman told Enterprise last week EBRD has appetite for BdC. Heckman also noted that the bank plans to invest some EUR 1.2 bn in Egypt in 2019.

IPO WATCH- Zaki Hashem gets Enppi mandate: Zaki Hashem & Partners has been appointed as domestic counsel to Engineering Company for Petroleum & Process Industries (Enppi) in the latter’s upcoming local and international offering of shares, we’re told. The Enppi IPO is one of the pilot transactions for the state’s privatization program

M&A WATCH- Int’l bank may back Medhat Khalil’s take-private bid for Raya: An unnamed international investment bank could finance Medhat Khalil’s bid to take Raya Holding private, Khalil said, according to Masrawy. The bank is one of four financiers Khalil had approached since the Financial Regulatory Authority ordered him last October to mount a mandatory takeover for Raya or sell down his stake. Khalil has previously said he was seeking EGP 700-800 mn in acquisition finance. The news comes after Khalil requested a two-month extension on the 27 November deadline to complete the MTO.

INVESTMENT WATCH- Cairo-based Nawah Scientific has raised USD 1 mn in a pre-series ‘A’ funding round, Menabytes reports. The round was led by Endure Capital and joined by 500 Startups, Averroes Ventures and Egypt Ventures. Founded in 2015, Nawah bills itself as “the first, private, multidisciplinary research center in Egypt catering for natural and medical sciences” provides outsourced testing for researchers who do not have access to advanced gear.

INVESTMENT WATCH- The International Finance Corporation invested USD 1 mn in Vezeeta as a follow-on investment to a September series ‘C’ fundraising round in which the online platform raised USD 12 mn, it said in a statement. Vezeeta, an app that helps connect patients with physicians, aims to use the funding to strengthen its operations in Saudi Arabia, Egypt and Jordan as well as expand into other countries in the MENA region. The September series ‘C’ was led by Saudi Arabia’s STV.

ECM WATCH- Matouk Bassiouny & Ibrahim has closed a rights issue for Ajman Bank, the UAE-basedshariah-compliant lender, the firm said in a statement. The transaction raised nearly AED 420 mn in a fully-subscribed rights issue. Emirates NBD Capital was lead manager and sole bookrunner for the transaction, while Emirates NBD was lead receiving bank. Ahmed Ibrahim, managing partner at the firm’s Dubai office, led the transaction for Matouk Bassiouny & Ibrahim.

The Africa Forum 2018 in Sharm kicked off yesterday. Among the takeaways from the many announcements of the past 24 hours:

• EBRD is backing accelerators Falak, EFG-EV Fintech and Misr El Kheir, offering advisory support to each of them and their portfolio companies, the institution said in a statement (pdf).
• Falak Startups signed an MoU with Enara Capital to establish a startup accelerator and investment fund exclusively for clean technology startups, according to an Investment Ministry statement.
• Telecom Egypt inks data center and infrastructure agreement: Liquid Telecom is investing USD 400 mn (EGP 8 bn) in Egypt over the next three years in an agreement signed with Telecom Egypt, according to a statement from the Investment Ministry and a Liquid Telecom press release.
• Kitchener Drain rehab gets funding: The European Investment Bank and the Housing Ministry signed a EUR 213.9 mn agreement for the Kitchener Drain depollution project, according to Ahram. The drain passes through Dakahlia, Gharbiya and Kafr El Sheikh.
• The Suez Canal Authority inked two agreements to develop Ain Sokhna and West Port Said, according to a ministry statement.
• EGP 2.2 bn in financing for Sinai: Kuwait’s Fund for Arab Economic Development will finance sewage, desalination and agricultural wastewater projects in Sinai worth a combined EGP 2.2 bn, the Investment Ministry said yesterday. The fund has earmarked USD 1 bn to support development in Sinai through 2021, Al Mal reports.

LEGISLATION WATCH- House puts high prices and “monopolistic practices” in the crosshairs as state launches crackdown on price gougers: The House of Representatives is scheduled to discuss today proposed amendments to the Supply Affairs Law and the Egyptian Competition Act in a bid to curb the rising price of basic goods and commodities, Ahram Online reports. If passed, the amendments would grant sharper teeth to Supply Ministry, Consumer Protection Authority, and Interior Ministry inspectors “to help them discipline the local market” and crack down on what they see as high prices. The changes would also increase the fines imposed on traders found guilty of “hiding” strategic goods to drive up prices. The House legislative and economics committees, which have completed their review of the proposed amendments, said these changes are necessary to regulate prices after the reduction of subsidies and the EGP float led to some traders “exploiting” these reforms to “manipulate prices and double their profit margins.”

El Sisi, intelligence boss and top anti-corruption watchdog are backing the drive: The debate in the House comes after President Abdel Fattah El Sisi met with the head of the General Intelligence Directorate, the chairman of the Administrative Control Authority, Prime Minister Moustafa Madbouly and a host of ministers to discuss ensuring commodities remain available at affordable prices as well as “measures for market monitoring and consumer protection.” Read the full statement from Ittihadiya here (pdf).

Background: Inflation has accelerated for two consecutive months, with annual headline inflation rising in October to 17.5%, largely on the back of higher vegetable prices, despite the government’s efforts to ease price increases. President Abdel Fattah El Sisi has regularly directed his government to ensure basic goods are available at “reasonable prices” on the market. The Consumer Protection Act, which El Sisi had ratified in September, also sets a legal framework by which the government can impose price controls.

CABINET WATCH- Cabinet gives preliminary nod to Customs Act amendments: The Madbouly Cabinet has approved “in principle” amendments to the Customs Act, according to a statement. The amendments should create an expedited track for customs clearance, a ‘whitelist’ of trusted importers, and broaden the Customs Authority’s discretion. The government is expected to introduce the proposed changes to the House of Representatives “soon.”

Other decisions made at the cabinet table during the Council of Ministers’ meeting last week:

• Signing off on an EUR 148 mn facility for the Kitchener Drain depollution project from the EBRD (we have more above);
• Accepting a EUR 4.01 mn grant to support entrepreneurs in the agriculture, ‘clean’ and renewable energy, and arts and handicrafts industries;
• A USD 600k grant from the Korea-Africa Economic Cooperation development fund for a wastewater treatment plant in Abu Rawash;
• The Promoting Resilience in Desert Environments (PRIDE) project to improve the productivity of desert land reclaimed in rural areas around Marsa Matrouh.

LEGISLATION WATCH- Unified Building Code, temporary law on building code violations to be issued next month: The House of Representatives expects to pass the Unified Building Code and a temporary law on settling building code violations together sometime next month, House Housing Committee member Rep. Ismail Nasr El Din tells Al Shorouk. The executive regulations for the two bills will likely also be issued in January, according to Nasr El Din. Considering how long it has taken for these two bills to see the light, we’re not going to be holding our breath.

LEGISLATION WATCH- Expect amendments to the trademark law? The Internal Trade Development Authority is working on amendments to the trademark law, which it plans to send to the House of Representatives for review, said agency head Ibrahim Ashmawy, according to Al Ahram. The current law doesn’t require businesses to register a trademark for their activities and doesn’t identify a supervising body or fines or punishments, Ashmawy said. The amendments will aim to fix any shortcomings in the current law to protect investors and consumers alike from fraud.

Food exports are expected to decline 3% by the end of this year, rather than grow 10% as was expected at the beginning of the year, head of Egypt’s Food Export Council Hani Berzi said. According to Berzi, the decline comes on the back of a two-year delay in the release of export subsidy payments, which has made it difficult for companies in the food industries sector to compete in foreign markets. A lack of stability in Arab markets has also negatively impacted Egyptian food exports, Berzi said.

Italy showing Egypt love despite Regeni tensions: Investment Minister Sahar Nasr has signed a EUR 45 mn agreement with Italian Ambassador to Egypt Giampaolo Cantini to support training and technical programs for SMEs and financing for companies that need to purchase production inputs, according to a ministry statement. Italy is also backing the launch of an internship program known as the Youth Employment Program for El Roda Company for Agricultural Development, an Egyptian start up, in partnership with the European Union and The European Bank for Reconstruction and Development, according to a statement. The support comes despite renewed tension between the two countries as Italy presses the Egyptian government for answers over the death of Giulio Regeni.

MOVES- Public Enterprises Minister Hisham Tawfik has appointed Nabil Dweidar as the interim head of the Holding Company for Maritime and Land Transport, replacing Mohamed Youssef.