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After six months, Egypt finally settles wheat fungus row

5 July 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

ABU DHABI (Reuters) – Egypt’s agricultural quarantine authority settled a months-long dispute on Monday over wheat import specifications that have hampered the country’s massive state purchasing programme ahead of an anticipated new buying season.

Egyptian quarantine authorities’ earlier refusal to let in wheat infected with even the slightest amount of ergot, a fungus that can lead to hallucinations and irrational behaviour in large quantities but at trace levels is deemed harmless to humans, wreaked havoc in the market for supplying the world’s largest wheat buyer.

The quarantine authority said a new ministerial decree would allow it to accept imported wheat shipments containing up to 0.05 percent ergot, finally ending a long-standing zero tolerance policy that has puzzled global trade.

“A ministerial decision was taken and 0.05 percent ergot tolerance will now be endorsed,” Ibrahim Imbaby, head of the quarantine authority told Reuters by phone.

Imbaby did not give more details.

The decision comes a day after the country appointed a new head for its state wheat-importing body — one of the most influential positions in the global wheat market, ahead of the impending import season set to start this month.

The resolution to the ergot row also comes as Egypt’s domestic wheat purchases are being questioned and the earlier announced 5 million-tonne Egyptian wheat procurement figure for the season could be revised, leading to a greater import need.

The country is in the middle of a government-led recount of locally purchased wheat after the unusually high local procurement figure of 5 million tonnes, as opposed to around 3.5 million tonnes in earlier years, prompted allegations of fraud from industry officials, traders and lawmakers.

If the local purchase numbers were misrepresented Egypt might have to buy more foreign wheat to meet domestic demand while contending with a dollar shortage that has already sapped the country’s ability to import, making a resolution to the ergot squabble ever more pressing.

The quarantine’s zero tolerance policy was at odds with the more commonly accepted international standard of up to 0.05 percent already endorsed by the ministry of supplies and state grain buyer, the General Authority for Supply Commodities (GASC).

“The ministerial decree was issued after a committee in the import and export surveillance authority was formed and pressurised the agriculture ministry to issue a new decree,” one Cairo-based trader said.

The affair, which resulted in several shipments of wheat turned away at ports, a sharply lower participation at GASC tenders and higher wheat prices, was thought to be finally nearing a resolution when Prime Minister Sherif Ismail intervened in late June and said the country would adhere to the common 0.05 level.

His comments were expected to be followed by a decree changing the old regulations that governed agricultural quarantines and stipulated a zero tolerance policy.

But a decree failed to materialise until Monday’s decision and the agriculture ministry has told Reuters it had been hampered by a months-old judicial order from the prosecutor general that had banned all ergot from entering the country.

The order had followed the rejection of a French wheat shipment belonging to trading firm Bunge late last year. The firm subsequently filed a lawsuit contesting the decision.

Imbaby did not make clear how that legal hurdle had been overcome.

And after months of conflicting statements from various Egyptian agencies, some European traders remain skeptical.

“We are being cautious….they’ve changed their position so many times over ergot,” one European trader said.

 

(By Maha El Dahan. Additional reporting by Gus Trompiz in Paris; Editing by Veronica Brown and Greg Mahlich)

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Egypt’s central bank says no ban on using debit cards abroad

30 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Debit cards linked to Egyptian pound bank accounts can be used outside the country in a “regular” way, the central bank said on Thursday, after instructions it sent to banks on Wednesday appeared to ban customers from using them abroad.

Although Wednesday’s letter suggested a blanket ban, the central bank said its instructions “only apply to individuals misusing debit cards to acquire large amounts of foreign currency without a clear reason for doing so, which saps banks’ foreign reserves”.

“The Central Bank of Egypt affirms the continued use of all cards, debit or credit, under existing limits set by each bank,” it said in a statement.

In the letter sent on Wednesday and seen by Reuters, the central bank had told bank chiefs: “Please ensure that debit cards, including pre-paid cards, issued in local currency by Egyptian banks are only used within the country.”

Central bank Governor Tarek Amer had initially denied the Wednesday directive existed, telling state news agency MENA on Thursday the rules on using debit cards abroad were unchanged.

“It is up to each bank to set limits on its clients’ usage of foreign currency abroad through debit cards linked to local currency accounts, but we need vigilance because some clients use debit cards to get large dollar amounts not intended for travel, tourism, or shopping,” he said.

The bank’s later statement acknowledged the instruction had been sent but said it applied only in some cases. Wednesday’s letter did not indicate that was the case, however.

Egypt depends on imports for everything from food to fuel but has suffered from a shortage of dollars in the banking system to pay for them since a 2011 uprising drove away tourists and foreign investors, crucial sources of hard currency.

Many import businesses now rely on the black market, where they can get hard currency for a higher price. The pound’s rate on the black market has weakened since the central bank devalued the Egyptian pound in March, at which time it was roughly in line with the official rate.

 

(By Ehab Farouk and Ahmed Aboulenein. Additional reporting by Mostafa Hashem; Writing by Ahmed Aboulenein; Editing by Catherine Evans)

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Egypt’s Beltone files lawsuit against heads of bourse and watchdog

26 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s Beltone Financial has filed a lawsuit against the heads of the Cairo stock exchange and Financial Supervisory Authority over the repeated cancellation of trades on its stock, according to two sources and a court document seen by Reuters.

Shares in asset manager Beltone jumped by more than 550 percent in three months after it was acquired by billionaire businessman Naguib Sawiris’s OTMT in November for 650 million Egyptian pounds ($73 million).

The price spike lifted Beltone’s market value to 4 billion pounds before the stock exchange, at the end of February, began to stop trades in the shares on an almost daily basis. The exchange referred to rules allowing such cancellations in cases where the head of the bourse considered that trades had taken place at unjustified prices.

Beltone’s share price stood at 7.34 pounds on Sunday, compared with 21.97 pounds in mid-April.

“Beltone filed a lawsuit before the Administrative Court against the head of Egypt’s stock exchange, in person, and against the chairman of the financial regulator,” said two sources who are close to the matter.

The lawsuit contests that the head of the stock exchange’s decisions were incorrect and an illegal abuse of authority.

The head of Egypt’s stock exchange, Mohamed Omran, was not immediately available for comment.

Sherif Samy, chairman of the Egyptian Financial Supervisory Authority, said that Beltone had filed a grievance with the regulator earlier this month.

“The decision of the commission did not come in its favour and that is why they are resorting to court, and that is the right of any party,” Samy said.

($1 = 8.8799 Egyptian pounds)

 

(Reporting by Ehab Farouk; Writing by Asma Alsharif; Editing by David Goodman)

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BP approves investment in Egypt gas field 15 months after discovery

20 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

LONDON (Reuters) – British oil major BP has approved investment in the first phase of developing the large Atoll gas field offshore Egypt, only 15 months after it first announced its discovery.

BP, which declined to give an investment figure for the project, said the field was on track to deliver its first gas in the first half of 2018, set to pump 300 million cubic feet a day of gas to the Egyptian market.

BP decided in November to fast-track the development of Atoll, estimated to contain 1.5 trillion cubic feet of gas and 31 million barrels of condensates.

The company is in a tight race with other oil and gas explorers in the region to develop the Mediterranean’s huge untapped fossil fuel reserves.

Italy’s ENI discovered the Mediterranean’s largest gas field, Zohr, last year and plans to bring the field on stream by the end of 2017.

BP’s decision to invest in the Atoll field is one of only a handful of go-aheads the oil major is expected to give this year as it seeks to save cash amid weak oil prices.

 

(Reporting by Karolin Schaps)

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Egypt’s Al Ahly Bank raises depositor rates after central bank hike

20 June 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egyptian Bank Al Ahly raised interest rates for account holders, an official at the bank said on Monday, becoming the first state-owned commercial lender to react to last week’s increase in benchmark borrowing costs.

Al Ahly – National Bank of Egypt’s retail banking arm – raised rates on deposits by 0.75 percent and on saving accounts by 1 percent, the official told Reuters.

Two of Al Ahly’s main competitors, Banque Misr and Commercial International Bank, are also expected to review depositor rates on Monday, officials at both banks said.

On Thursday, the central bank raised benchmark rates by 100 basis points to their highest levels in years, accelerating efforts to rein in surging inflation and ease downward pressure on the Egyptian pound.

 

 

(Reporting by Ehab Farouk; Writing by Amina Ismail; editing by John Stonestreet)

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Who is Hisham el Khazindar?

17 June 2016 Comments (0) Featured, Leaders, Middle East

Hisham el Khazindar

Hisham el Khazindar, Co-founder and Managing Director at Qalaa holdings shows what he, and Egypt, are made of.

Hisham el Khazindar has gone from being a graduate in Cairo to running one of the Middle East’s leading investment firms, picking up an MBA from Harvard and work experience at places like Goldman Sachs. But how did this graduate from the American University in Cairo end up running a billion-dollar organization? First, look to exactly what he achieved along the way.

The man with the M&A plan

After graduating from the American University in Cairo in 1996 with a BA in Economics, Khazindar aptly started his career with EFG Hermes, a leading investment bank in the Middle East and North Africa (MENA) region. He spent his first three years there advising on key cross-border Mergers & Acquisitions (M&As), as well as carrying out high-profile equity offerings. Much like someone not accustomed to letting a good opportunity go to waste, Khazindar seized the chance to take a temporary transfer at Goldman Sachs in London in 1999 that lasted two years, continuing his work on M&As.

Khazindar returned to EFG Hermes as an Executive Director, advising on M&As and Initial Public Offerings (IPOs) – however, he was yearning for more. In 2001, Khazindar decided that the best way for him to progress would be to complete an MBA at Harvard Business School and, after graduating, Khazindar did not spend much time doing nothing. In 2004 he co-founded Citadel Capital (now known as Qalaa Holdings) and is now Managing Director of a $9bn private equity firm that controls investments in industries as varied as mining, oil and gas, cement, agri-food, transportation and logistics.

Perhaps due to his phenomenal progress, Khazindar sits on several boards in the region, from electrical and wind energy companies to eyewear providers. The list goes on: in total, Khazindar serves as director to six other companies and sits on the board of eight more. As if this wasn’t enough, he’s also earnt accolades including Young Global Leader in 2013 and being listed in the top 100 Young African Leaders.

Not an Inexperienced Public Orator

Khazindar is not unaccustomed to speaking in front of large audiences, having spoken at an Egypt: The Future conference and even given a TEDx talk, a local version of TED talks, about Egypt’s next 20 years. When he spoke at the TEDx in his native Egyptian Arabic, he occasionally brought in his perfect command of English to explain his ideas and largely did so with the eloquent ability of any other TED talk. He spoke of the importance of maintaining a reputation in business and of having to explain away any negative stereotypes that people can have of businessmen or entrepreneurs. This is something, he joked, that doctors and engineers have no problem with (jobs considered very prestigious in parts of the Arab world). Continuing to talk of the importance of the changes in Egypt and the necessity of grasping opportunities, Khazindar is certainly thinking of the impacts of his choices today in 10 or 20 years’ time.

In an interview with the Oxford Business Group, Khazindar kept away from delving into politics as much as possible, but he was unambiguous when it came to economic policies that the government would need to implement in order for economic recovery and growth to occur. These were, in no particular order, signs of lasting stability, appointment of ministers with proven economic ability, a workable constitution and articulation of clear economic objectives. As the interview moved onto financing tools and energy subsidies, Khazindar goes on to talk about the importance of SMEs and direct cash programs.

The future’s bright, the future’s…

Evidently, Khazindar knows what he’s talking about, he isn’t afraid to say what he thinks and he won’t let one success distract him from the next. His thinking is long term, for the progress of not just the Egyptian nation, its people and government, but of the entire region too. Something that Khazindar is quick to highlight is Egypt’s economically advantageous geographical location in Africa, in the middle of the Arab world and across the Mediterranean Sea from Europe; markets, he adds, with 1bn, 400m and 700m people, respectively. With such a large workforce to drive the economic growth (almost one in four Arabs in the Arab world is an Egyptian), it’s hard to see a future that isn’t better for Egypt.

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Egypt’s central bank offers $120 million to cover pharmaceutical imports

17 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

CAIRO (Reuters) – Egypt’s central bank said it is offering $120 million in its regular currency sale on Tuesday to be used for imports of pharmaceutical products, manufacturing components, vaccines and related chemicals and infant formula.

Egypt’s economy has been hobbled by a shortage of foreign currency since a 2011 uprising drove away tourists and foreign investors. Dollars are rationed through weekly auctions imports of essential goods get priority.

The central bank, which has been keeping the pound artificially strong, devalued the currency on March 14 to 8.85 per dollar from 7.7301 and announced a more flexible exchange rate policy. It later strengthened the pound to 8.78 per dollar, where it has remained since.

A weaker currency has made it more expensive to import raw materials, and with the price of finished medicines fixed by the Health Ministry, some manufacturers have stopped making cheap generic medicines to staunch growing financial losses.

On Monday, Egypt raised the price cap on medicines that cost up to 30 Egyptian pounds ($3.38) by 20 percent in an effort to address drug shortages, the health minister said on Monday.

 

($1 = 8.8799 Egyptian pounds)

 

(Reporting by Asma Alsharif, editing by Larry King)

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Bassita helps fund social change through clickfunding

9 May 2016 Comments (3) Business, Featured, Middle East

Bassita

Bassita is an Egyptian startup company that created click funding, a new way for charities and campaigns to source funding.

If you have never heard of clickfunding before, then it’s probably because this highly innovative form of fund raising was only created 2 years ago. In 2014, an Egyptian startup company called Bassita was launched, and with it the concept of clickfunding was born. The name of the company comes from an Arabic word that means “simple,” and the idea of clickfunding is to make the creation of funds as simple as possible.

The clickfunding model works through the culture of social media, in which people constantly share and like articles, videos or images with other people. What Bassita does is create a short video highlighting a campaign or promoting a cause and a sponsor agrees to a certain number of shares or likes that must be met for it to then fund the campaign.

This means that people can directly help push a project toward being funded simply by clicking a “like” on Facebook or by sharing the video online. Co-founder, Alban de Ménonville states that, “It’s easy for the cybernaut – by clicking on an appealing project, she’s helping to fund change that is good for her community or society.”

This provides people with the opportunity to feel a connection to campaigns that they like and to feel that even a small action, such as sharing a video, can be a part of a genuine change.

bassita website

Clicking for change

The idea sounds so simple that it seems strange that nobody had thought of it before. But this is often the case with new ideas that become rapidly popular and important. A few years ago, the idea of crowd funding might have sounded like people asking for handouts, and yet businesses all across the world have successfully used the model. Social media has become increasingly political and major uprisings such as the Arab Spring were intrinsically linked to the use of outlets such as Facebook and Twitter. To harness the huge amount of activity that social media generates and to use viral videos in a fashion that generates real financing for important projects seems sure to succeed. After all, the overhead costs are small and the commitment of users is nothing more than clicking on “share” or “like.” The very first campaign that Bassita made a video for was a huge success. On September 1st, 2014, they created a video for a Baraka Optics campaign, which aimed to provide 1,000 underprivileged workers in Egypt with eyeglasses. Baraka Optics had agreed to fund this if Bassita got 10,000 views on Youtube, a target that was quickly met.

Since this opening campaign, Bassita has teamed up with UNICEF to help provide 1,000 new clean water connections to homes in Upper Egypt. In order to extend the way in which users can be involved, Bassita created a points-based system in which the target was 1.5 million points. People provided 1 point for viewing the video, 2 points for liking it, 3 points for sharing or re-tweeting it and 5 points for commenting on the video or tweeting about it.

There is a unique nature to these campaigns in how they give any person a chance to play a small role in helping to bring about positive changes. Ménonville said, “The clickfunding model can change the world. More than one million people are giving their clicks to help those who do not have access to water! Yes, our clicks count.”

Bassita’s UNICEF video was viewed 2 million times on Facebook within 3 days of being uploaded and the 1,000 water connections are already being built.

The men behind the clicks and the road ahead

The two men who created the Bassita idea are both French nationals who relocated to Cairo to launch their scheme. Alban de Ménonville and Salem Massalha felt that Africa provided a great opportunity for a young business and as Massalha is of Egyptian origin, the North African country became their new home. In an interview with Popout magazine, Ménonville said, “What we’ve managed to do in Egypt in one year is unthinkable in France, for example. Our team comes from diverse backgrounds, and that is our strength.”

As with many new ideas that become ubiquitous, the men behind the clickfunding idea believe that it will become a global concept that simply adapts its campaigns in relation to the different issues facing various places. Bassita has already won a Young Innovators Award and a 2015 Orange Prize for African Social Ventures.

Then in April of this year they won funding of 60,000 Egyptian Pounds from Injaz’s Startup Egypt prize. The future for clickfunding looks extremely promising and the team behind it all truly believes it can revolutionize advertising and ways in which we engineer social and environmental change. When asked about the Injaz award, co-founder Salem Massalha said, “This prize brings us one step closer to changing the world.”

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Egypt says foreign reserves rise to $17.011 bln at end-April

4 May 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s net foreign reserves rose to $17.011 billion at the end of April, the central bank said on Wednesday.

Reserves stood at $16.561 billion at the end of March.

Egypt had roughly $36 billion in reserves before an uprising in 2011 overthrew Hosni Mubarak and ushered in a period of political turmoil that scared away tourists and foreign investors, key sources of foreign exchange.

Last month the United Arab Emirates pledged $4 billion to Egypt, half in investments and the rest as a central bank deposit to support cash reserves.

 

(Reporting by Asma Alsharif; editing by John Stonestreet)

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Egypt’s CIB approves extension for Beltone Financial’s offer for CI Capital

28 April 2016 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt’s Commercial International Bank (CIB) approved a two-week extension for an offer by Beltone Financial to acquire its subsidiary CI Capital, CI Capital’s Chief Executive Officer Mahmoud Atalla told Reuters.

The offer was due to expire on Thursday.

“CIB approved Beltone’s request to extend the period of the offer to acquire CI Capital by two weeks, ending on May 12,” Atalla said.

In February, CIB signed a deal to sell investment bank CI Capital to Beltone, a unit of billionaire Naguib Sawiris’ Orascom Telecom OTMT.CA, for 924 million Egyptian pounds ($104 million) but the deal has stalled pending approval from Egyptian regulators.

Sawiris said at the time he planned to merge CI Capital with Beltone Financial, which OTMT bought last year, to create one of Egypt’s largest investment firms, but the deal has faced a series of delays.

The Egyptian Financial Supervisory Authority said this month that the deal was delayed pending the resolution of a court case and other issues, including a violation by Sawiris of pre-existing pledges to the EFSA.

Sawiris’s bid for CI Capital was also challenged in February when a unit of the state-owned National Bank of Egypt made a counter-offer. It later withdrew.

Sawiris later said the deal was being held up by national security concerns and criticised the state for meddling in business, adding that it discouraged investors.

 

 

(Reporting by Ehab Farouk; Writing by Asma Alsharif; Editing by Susan Fenton and Ed Osmond)

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