20 Jun 2021

CBE Keeps Interest Rates on Hold for 5th Consecutive Time

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The Central Bank of Egypt (CBE) kept interest rates unchanged for the fifth consecutive time at its monetary policy committee (MPC) meeting on Thursday, in line with forecasts.

The overnight deposit rate currently stands at 8.25 percent, and the overnight lending rate at 9.25 percent.

The CBE pinned its decision on the recent inflation readings, GDP growth levels and global economic recovery.

Egypt's annual urban consumer price inflation jumped to 4.8 percent in May, its highest level since December, and up from 4.1 percent in April.

"Annual headline inflation rates were affected by favorable and then unfavorable base effects during April and May 2021, reflecting the early impact of the outbreak of COVID-19 and its related containment measures on inflation readings during 2020," the CBE stated.

The impact of unfavorable base effects on inflation is expected to persist in the short term, it added.

Egypt recorded a 2.9 percent growth in the first quarter of 2021, up from 2 percent in the previous quarter.

The central bank said that up to the fourth quarter of 2020, growth continued to be backed by strong consumption, especially private consumption.

"The unfavorable contributions of gross domestic investments and net exports continue to subside … Sectoral GDP growth was supported by the positive contributions of trade, construction and communication," the CBE said.

Tourism and non-oil manufacturing, however, continue to hamper growth levels despite a recent upturn, the central bank added.

The central bank also cited that the global economy continues to see a recovery from the impact of the coronavirus pandemic, despite being uneven.

The CBE is targeting inflation of 7 percent (±2 percentage points) on average in the fourth quarter of 2022.


Business

Banque du Caire's Net Profit Rise 20% YoY in Q1 2021

Banque du Caire's net profits saw a 20 percent increase during the first quarter of the year, recording a net profit of EGP 1 billion ($63.9 million), compared with EGP 800 million during the same period in 2020.

In a statement, Banque du Caire said that the net income from fees and commissions rose by about 6 percent to reach EGP 461 million ($29.4 million), compared with EGP 433 million during the first quarter of 2020.

This rise in net income led to a 7 percent growth in operating revenues to reach EGP 3.1 billion, compared with EGP 2.9 billion in the comparative period last year.

Tarek Fayed, chairman and CEO of Banque du Caire, said that the continuous growth rates of the bank's business results are supported by the ambitious expansion plans and strategies pursued by the bank since the beginning of 2018, especially in the fields of digital transformation and electronic payment.

Ezz Steel's Q1 Exports Record 47% QoQ Increase

Ezz Steel's total exports for the first quarter of 2021 amounted to $269 million, $208 million of which were of flat steel, and $61 million were rebar coils.

In a bourse filing, the company said that this represents an increase of 47 percent compared with its exports during the fourth quarter of 2020, which amounted to $183 million, where $137 million were of flat steel, and $46 million were of rebar coils.

Ezz Steel turned to profitability during the first quarter of 2021, recording net profits of EGP 1.18 billion ($75.4 million), compared with losses of EGP 1.35 billion in the first quarter of 2020.

EDF Approves Program to Support Automotive Sector Within Govt's Initiative to Back Exporters

The government initiative for immediate payment of arrears to exporters will include for the first time a new program to support exports of vehicle spare parts, Minister of Trade and Industry Nevine Gamea stated.

The new seven-year program is approved by the Export Development Fund (EDF), Gamea added.

Per the initiative launched in November, exporting companies were offered debt-restructuring options via which 15 percent of the arrears owed to them by the EDF were retained in exchange for receiving the remaining 85 percent in one payment in 2020, instead of receiving the full payment in installments.

Egypt Kuwait Holding Co Appoints Reefy's Mashhour as Managing Director of Microfinance: Report

Egypt Kuwait Holding Company (EKH) has appointed the former head of microfinance company Reefy Mohamed Mashhour as the managing director of its microfinance activity.

Sources told Hapi on Thursday that Mashhour had officially assumed to role at EKH since mid-June.

He joined EKH months after he tendered his resignation in February as the chief executive of Reefy Microfinance Enterprise Services, after spending two years with the microfinance subsidiary of CI Capital Holding for Financial Investments. 

Mashhour holds vast banking expertise of over 30 years in Banque du Caire, Commercial International Bank (CIB) and the Arab African International Bank (AAIB).

His experience covers small and medium-sized enterprise financing and retail banking, among other areas.

EKH reported a 30 percent year-on-year jump in profit during the first quarter of 2021, posting $53.01 million in profit, up from $40.72 million in the same period last year.

Its revenues rose during January-March to report $178.64 million, compared with $152.32 million in the corresponding quarter of 2020.

Construction to Begin in New Alamein Towers Next Week: Minister

Egyptian Housing Minister Assem Al-Gazzar announced that the construction works of five towers in New Alamein would start next week in cooperation with the China State Construction Engineering Corporation (CSCEC).

This comes according to a ministry statement released on Thursday during the ceremony of completing the concrete works in the iconic tower in the central business district in the New Administrative Capital (NAC).

The NAC tower is the tallest in Africa, with a height of about 400 meters.

The minister added that the new towers include a 68-story tower and four others with a height of 56 stories each, and the project would take 39 months to be completed.

Al-Gazzar previously said that investment in the project is estimated at around $3 billion and is implemented in cooperation between the ministry, represented by the New Urban Communities Authority (NUCA), and the CSCEC, one of the largest contractors in the world.

AMOC Aims to Invest $14.5 Mn in FY2021/22

The board of directors of the Alexandria Mineral Oils Company (AMOC) approved the proposed capital budget for the fiscal year 2021/2022, with a total of EGP 227 million ($14.5 million).

In a bourse filing, the company said that the board of directors approved the proposed current planning budget for the fiscal year 2021/2022, which shows a net profit after tax of EGP 200 million ($12.7 million).

During the first nine months of the current fiscal year, the company achieved a net profit of EGP 103.31 million ($6.6 million), compared with losses of EGP 152.48 million during the same period last fiscal year. 

During the nine months, the company's sales declined to reach EGP 7.1 billion ($453.7 million) at the end of March, an 8.9 percent decrease compared with EGP 7.8 billion during the same period in the previous fiscal year.

Sinai Cement's Losses Rise 40% in Q1 2021

Sinai Cement Company's losses increased 40 percent year on year in the first quarter of this year.

In a bourse filing, the company said that it recorded losses of EGP 147.97 million ($9.4 million) from the beginning of January until the end of March, compared with losses of EGP 105.8 million during the same period last year.

The company's net sales rose during the first three months of 2021 to reach EGP 282.62 million ($18 million), compared with EGP 211.74 million during the same quarter of 2020, a 33.6 percent increase.

Sinai Cement's standalone losses rose to EGP 146.23 million ($9.3 million) from the beginning of January until the end of last March, compared with EGP 105.44 million during the same period the previous year.

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Readymade garments

Readymade Garment Exports Rise 36% YoY in 4M 2021

Egyptian exports of readymade garments (RMG) increased by 36 percent year on year during the first four months of 2021 to $588 million, compared with $433 million in the corresponding period of 2020.

The Readymade Garments Export Council (RMGEC) said yesterday that the sector's exports to the US increased by 35 percent during the four months, while exports to Europe increased by 5 percent.

It added that Egypt's exports of clothing to Arab countries increased by 297 percent year on year during the period from January to April, while exports to African countries increased by 56 percent, and the rest of the world saw a 13 percent increase.

The council previously said the increase in RMG exports is due to the expansion in the Arab and African markets.

Egypt's non-petroleum exports grew 11 percent year on year in the first four months of 2021 to $9.80 billion, up from $8.85 billion in the same period in 2020.

Stock Market

e-finance to Be Ready for IPO in Late Q3, Q4

Ibrahim Sarhan, chairman of the state-run e-finance, announced it would be ready for its anticipated initial public offering (IPO) by the end of the third quarter or in the fourth quarter of this year.

The announcement came during a video interview with Al Mal's CEO Level on Thursday.

Once it is ready, the lead manager will set the exact date for the IPO, depending on the state of the market, Sarhan added.  

He revealed that the government IPO committee has recently approved the fair value study of e-finance.

The company plans to utilize a portion of the funds raised from its anticipated IPO to finance its expansion plans in Africa, Sarhan said.

He added that e-finance is currently consulting with another firm to settle on the kind of services it would roll out to the African market.

Sarhan also said that employee stock options would be available when the company kicks off its IPO, allowing its employees to purchase shares in it.

Like other companies included in the government IPO program -- which has only seen the IPO of a 4.5 percent stake in Eastern Company -- e-finance's IPO's date was postponed several times.

In April, Minister of Public Enterprise Sector Hesham Tawfik said that he expects the government's IPO program to resume in the third quarter this year.

US Stocks Drop to Worst Since Feb on Friday

US stocks fell on Friday, with the S&P 500 seeing its worst week since February.

The S&P 500 dropped 1.3 percent to close at 4,166.45 points, marking its worst day in the index in a month, while the Dow Jones Industrial Average fell 1.6 percent to 33,290.08 points and the Nasdaq Composite slipped 0.9 percent to 14,030.38 points.

The drop comes amid unease over the Federal Reserve's signal that it may raise short-term interest rates twofold by late 2023, earlier than forecast.

The pan-European STOXX 600 lost 1.6 percent to post its worst day in five weeks.

In Egypt, the benchmark EGX30 slipped 0.15 percent on Thursday to close at 9,865.59 points.

The broader EGX70 EWI gained 2.73 percent to settle at 2,297.48 points, while the EGX100 EWI gained 2.01 percent to reach 3,226.45.

Net sales by foreign investors amounted to EGP 148.8 million ($9.5 million), while net purchases by Egyptian and Arab investors totaled EGP 102.3 million and EGP 46.5 million, respectively.

Egypt News

Air Canada Inaugurates Montreal-Cairo Route

Canadian largest domestic and international airline, Air Canada, operated on Friday its first non-stop service between Montreal and Cairo.

"Air Canada is pleased to offer its first scheduled flights to Egypt. We are strategically rebuilding our international network by adding new routes that support leisure and visiting friends and family travel," said Mark Galardo, Air Canada's senior vice president for network planning and revenue management.

"With few non-stop options to Egypt from North America, we see opportunities to launch new non-stop flights to Cairo from Montreal where there is an established Egyptian community," he added.

"We have also built convenient connections to and from our Cairo flights from across Canada and the US at our Montreal hub. This new route shows our commitment to rebuild our international network and our Montreal hub, which have been dramatically affected by the COVID-19 pandemic," Galardo said.

Canada's flag carrier is offering three weekly flights with three cabins of service: Air Canada Signature Class, Premium Economy and Economy class.

Egypt's Vice Minister of Tourism Ghada Shalaby said that the move would help expand tourism and investments between Canada and Egypt.

Egypt, Iraq Ink MoU in ICT

Egyptian Ministry of Communications and Information Technology (MCIT) and the Ministry of Communications of Iraq signed a memorandum of understanding (MoU) to support bilateral cooperation and exchange of experiences.

Egypt's Minister of CIT Amr Talaat said that the areas of cooperation include exchanging experiences to build a digital society, a participatory digital government, digital identity, geographic information systems and electronic signature, according to a cabinet statement released on Thursday.

Talaat added that cooperation between the two parties extends to human capacity building by utilizing specialized training institutes in both countries to provide training programs in the CIT field.

It was also agreed to cooperate in postal service provision through modern technical systems that achieve postal exchange, various postal freight services, international express mail, post office automation and postal coding, the Egyptian minister added.

Cooperation also includes the Arab digital content industry by exchanging experiences in documenting cultural heritage, digital libraries, technology incubators, innovation, entrepreneurship and mechanisms to support the efficiency of small and medium enterprises (SMEs).

4th COVID-19 Wave in Egypt Is Just 'Anticipation': Official

Presidential Adviser for Health and Preventative Affairs Mohamed Awad Tag Eldin said in a televised phone call that news about Egypt entering the fourth wave of the coronavirus pandemic is just "anticipation."

He added that the precautionary measures taken by Egypt and the vaccination campaign had positive effects, contributing to limiting the spread of the coronavirus.

"We still need to abide by social distancing and all the COVID-19 preventive measures to pre-empt the pandemic's fourth wave," he added.

Egypt to Establish Zone for Management, Trade of Foodstuffs and Commodities With France's Rungis

Egypt will establish a specialized zone for managing and trading foodstuffs and commodities with French Rungis at investments totaled €100 million ($118.6 million), Supply Minister Ali Mosselhi said on Saturday.

Mosseilhi said the zone, set to be established with leading wholesale markets company Rungis, would span over 119 feddans in Alexandria's Borg Al-Arab.

It will see the trade of fruits, vegetables, meat and other commodities. 

He said that the ministry is keen on leading a radical change in the internal trade system, contributing by around 20 percent to the country's national product. 

On wheat procurement, the minister said that around 3.427 million tons of wheat had been procured from local farmers since the beginning of the harvest season.

Ethiopia Suspends Visas on Arrival, e-Visas for All Passengers: EgyptAir

EgyptAir said it was notified of a decision by Ethiopia to temporarily suspend visas on arrival and e-visas for all passengers arriving at the country's capital. 

In a notice to travelers, EgyptAir said that Ethiopian immigration authorities have temporarily suspended the visas for all travelers arriving at Addis Ababa airport starting the midnight of 18 June. 

The reason behind the suspension remains unclear.

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GERD

Sudan to Be Most Affected If Legally Binding Agreement on GERD Is Not Reached: Minister

Sudan will be the most affected if a legally binding accord on the filling and operation of the disputed Grand Ethiopian Renaissance Dam (GERD) is not reached, Sudanese Foreign Minister Mariam Al-Sadiq Al-Mahdi said on Friday.

In a GERD-focused forum in Qatar's Doha, Al-Mahdi presented Sudan's logistical, technical support to Ethiopia from the start of the dam construction until the different stages of negotiations.

She also clarified Sudan's position over the dam, adding that she hopes the dam would be a factor of stability and cooperation between Egypt, Ethiopia and Sudan due to its capabilities.

Meanwhile, Head of the United States Central Command (CENTCOM) Kenneth McKenzie said in an exclusive interview on Friday that Ethiopia's actions towards the GERD issue were worrying.

"The GERD is very concerning to us. We recognize the unique importance of the Nile to Egypt not only culturally but also for water supply and for the general economy overall," he said.

Egypt is exercising "enormous statesmanlike restraint as it tries to find a political, diplomatic solution to this problem," McKenzie added.

AfDB Approves $98 Mn Loan to Finance 2nd Phase of Egypt's Electricity, Green Growth Support Program

The African Development Bank (AfDB) has agreed to provide €83 million ($98.47 million) to finance the second phase of Egypt's Electricity and Green Growth Support Program (EGGSP), according to a statement released by the bank.

The bank added that the loan is part of the support allocated in its budget to the Egyptian government to strengthen the infrastructure in the electricity sector, which is expected to support the private sector and speed up recovery from the coronavirus crisis.

The EGGSP aims to enhance the financial sustainability of the energy sector as well as governance, advancing the supply of clean energy and promoting green growth.

Egyptian Court to Look Into Ever Given's Lawsuit Today

The Ismailiya Economic Court will look today into the lawsuit of Ever Given, the container ship that blocked the Suez Canal in March.

The hearing was adjourned on May 29 until today to give more room for compensation negotiations as per requests from lawyers representing both the Suez Canal Authority (SCA) and the owner of the Ever Given.

In May, SCA Chairman Osama Rabie said that the authority had lowered the amount of compensation requested from Japanese firm Shoei Kisen Kaisha, which owns the Ever Given, from $916 million to $550 million.

Rabie said that the $550 million is to compensate the costs of the ship's refloating and the salvage process using tugboats and dredgers.

He also said that investigations into the grounding of the Ever Given revealed several violations by the company that owns the ship, including a failure to report the presence of dangerous and highly flammable cargo on board. 

The 400-meter, 224,000-tonne ship was stuck in the Suez Canal for almost a week after it ran aground due to high winds and a dust storm. 

World

Hardliner Ebrahim Raisi Wins Iran's Presidential Elections

Hardline Judge Ebrahim Raisi has been declared winner of Iran's presidential elections after a landslide victory in the vote that saw most influential moderates and conservatives barred from competing.
 
The 60-year-old Shiaa cleric won 62 percent of the votes, with 90 million counted since Friday, according to poll officials. 

He beat off competition from three other candidates in the election, including the former Central Bank Head Abdolnasser Hemmati and former Revolutionary Guard Commander Mohsen Rezaei.

Raisi is the country's top judge and is under US sanctions over alleged human rights violations, including previous executions of political prisoners.

He has vowed to reduce unemployment and remove US sanctions, which have had a heavy toll on the country's economy.

Although Raisi is set to have a significant influence on domestic policy and foreign affairs, Iran's Supreme Leader Ayatollah Ali Khamenei still has the final say on the country's matters.

Russia Ups Tax on Wheat Exports by 14% for June 23-29 Week

Russia, one of Egypt's biggest wheat suppliers, raised its tax on wheat exports, among other grains, to be $38.1 per tonne in the period from June 23 to June 29.

This increase makes the tax significantly higher -- 14.4 percent -- compared with the $33.3 imposed in the period from June 17 to June 22, the country's agriculture ministry announced on Friday.

Russia began imposing a tax on its wheat exports in mid-February to regulate domestic prices of the grain.

In related news, Supply Minister Ali Moselhy said yesterday that the government had procured around 3.43 million tonnes of local wheat from farmers.

Veteran Banker Neil Mitchell Resigns From Credit Suisse

Neil Mitchell, a veteran banker at Credit Suisse, has resigned to join Jefferies Financial, people familiar with the matter told Bloomberg yesterday.

Mitchell's resignation is the latest in a string of senior staff resignations from the Swiss bank.

He will be the managing director of capital markets at Jefferies starting September.

Last week, Credit Suisse's Head of Mergers and Acquisitions Greg Weinberger stepped down from his post to join Morgan Stanley later this year.

This comes in the wake of the scandals related to the Archegos Capital Management Fund and the Greensill Capital Company.

The bank has offered extra payments to some chief executives in an attempt to curb mass resignations.

Debswana Discovers World's 3rd Largest Diamond in Botswana

Debswana Diamond Company announced the discovery of a 1,098-carat stone in Botswana, which it said could be "the world's third largest gem-quality stone."

"This is the largest diamond to be recovered by Debswana in its history of over 50 years in operation," the company's acting Managing Director Lynette Armstrong said.

The company unearthed the stone on June 1, but Armstrong presented it to the African country's President Mokgweetsi Masisi two weeks later. 

Botswana's Minerals Minister Lefoko Moagi said that the newly discovered stone is yet to be named. 

An estimate of the stone's potential cost has not yet been released either.

The gem is slightly less heavy than the 1,109-carat Lesedi La Rona, the world's second largest diamond also discovered in Botswana in 2015.

The world's biggest diamond was the 3,106 carat Cullinan diamond, which was discovered in South Africa in 1905.

International Consortium Acquires 49% Stake in Aramco Crude Oil Supply

An international consortium of investors including EIG and Mubadala Investment Company completed its acquisition of a 49 percent stake in Aramco Crude Oil Supply Company, a recently established subsidiary of Saudi Aramco, for $12.4 billion.

The consortium includes a wide range of investors from North America, Asia and the Middle East. 

As part of the deal, Aramco Crude Oil Supply Company and Saudi Aramco entered into a 25-year lease and re-lease agreement for Saudi Aramco's crude oil pipeline network.

Aramco Crude Oil Supply Company will receive a tariff paid by Saudi Aramco for the quantities of crude oil that flow through the network.

Saudi Aramco will retain a majority stake of 51 percent in the new company.

UK Pound Touches Its Lowest in 2 Months

The UK pound fell as much as 0.9 percent to trade at $1.3795 against the US dollar on Friday, its weakest level since April 16, before slightly rebounding later.

A surge in coronavirus cases, a drop in retail sales and the Federal Reserve signaling that it would tighten its monetary policy sooner than expected all weighed down on the pound's value.

The Office for National Statistics on Friday reported a 1.4 percent month-on-month drop in retail sales in May after registering a 9.2 percent surge in April.

More than 11,000 new cases of COVID-19 were recorded on Thursday, the highest intraday level for almost four months.

The Fed policymakers expected two interest rate hikes to take place in 2023, earlier than what was previously projected in March, when they said that the rates would be maintained until at least 2024.

Sports

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Ronaldo's Snub Coincides With $5 Bn Drop in Coca-Cola's Market Value

Cristiano Ronaldo's removal of two Coca-Cola bottles during a Euro 2020 news conference last week saw the company lose more than $5 billion of its market value.  

It wasn't immediately clear if the drop was related to Ronaldo's snub of the carbonated soft drink as the Portugal star, who is known for his strict health lifestyle, held up a bottle of water instead, telling reporters to "drink water".

As of Thursday, Coca-Cola's stock price closed at $54.95, with its total market value going down from $242 billion to $236.9 billion, according to Yahoo Finance.

"UEFA has reminded participating teams that partnerships are integral to the delivery of the tournament and to ensuring the development of football across Europe, including for youth and women," the European governing body said in a statement.

Coca-Cola said in a statement that "everyone is entitled to their drink preferences".

On Wednesday, Italy midfielder Manuel Locatelli followed suit by moving Coca-Cola bottles aside while France midfielder Paul Pogba, a Muslim, removed a Heineken beer bottle from in front of him a day earlier during separate news conferences.

Ahly Put One Foot in Champions League Final With 1-0 Win in Tunis

Holders Ahly edged closer to a place in the African Champions League final for a second straight season after securing a precious 1-0 win away to Tunisian giants Esperance on Saturday.

Forward Mohamed Sherif netted the winner in the 67th minute when he ran onto a through pass from Aliou Dieng and slotted into an empty net after his initial shot struck the post.

Ahly produced a superb all-round display that kept Esperance at bay, with the hosts creating only one goal-scoring chance throughout the game.

"It is always tough to play against teams like Esperance but we respected them and their coaching staff and this respect was shown in our performance tonight," Ahly coach Pitso Mosimane told the post-match news conference.

"It is normal for Esperance to have an attacking game as they were playing at home in front of their fans. They wanted to achieve a positive result, but we were well-organized and managed to achieve an important victory. 

"However, we still need to secure our qualification in the second leg."

Ahly host Esperance in the second leg at Cairo's Al-Salam stadium next Saturday.

Science and Technology

Bitcoin Falls 7% to Worst Decline in 3 Weeks

Bitcoin price fell on Friday as much as 7 percent to $35,412, its worst decline since late May. 

Rival cryptocurrency ether also dropped more than 7 percent to $2,160.

In May, bitcoin dropped over 30 percent to hit a five-month low nearing $30,000 following China's ban on cryptocurrency.

Arab Markets
Egypt EGX30 9,865.59 -0.15%
KSA TASI 10,853.12 10,853.12
UAE ABU DHABI ADX 6,646.83 -0.75%
UAE DUBAI DFM 2,862.66 +0.80%
World Markets
US Dow Jones IA 33,290.08 -1.58%
NASDAQ-100 14,030.38 -0.92%
S&P 500 4,166.45 -1.31%
UK FTSE 100 7,017.47 -1.90%
Germany DAX 15,448.04 -1.78%
France CAC 40 6,569.16 -1.46%
Japan Nikkei 225 28,964.08 -0.19%
China HANG SENG INDEX 28,801.27 +0.85%
Currencies
US Dollar 15.60 15.70
Euro 18.62 18.75
Sterling 21.77 21.91
Saudi Riyal 4.16 4.19
UAE Dirham 4.25 4.27
Kuwaiti Dinar 51.72 52.18
Swiss Franc 51.72 52.18
Commodities
Oil Brent USD/bbl. 73.51 +0.59%
Wheat USD/bu.Mar 2020 665.75 +3.54%
Gold USD/t oz. 1,764.16 -0.53%
Gold Egypt LE/ oz. 27,605.94 -0.69%
Silver Egypt LE/ oz. 403.72 -0.35%

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