11 May 2021

Egypt's Annual Urban Headline Inflation Hits Its Lowest in 7 Months

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(Courtesy of Capital Economics)

Egypt's annual urban consumer price inflation fell to 4.1 percent in April, its lowest since September and down from 4.5 percent in March, the state-run statistics agency CAPMAS stated.

Monthly urban consumer price inflation, on the other hand, rose to 0.9 percent, up from 0.6 percent in March.

Head of Pharos Research Radwa El Swaify was quoted by Reuters as saying that April's annual urban headline inflation came in below expectations and had been predicted to remain steady at 4.5 percent, adding that current inflation levels remain subdued and below the central bank's target.

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

"This slowdown in the headline rate is likely to be just a blip as the fuel price hike and rising global food prices push up energy and food inflation. In addition, we think the pound is likely to weaken which will push up the price of imported goods," Capital Economics said in a note, expecting inflation to peak at around 6 percent in September, which would place it back within the CBE's target.

This expected hike in inflation will prompt the CBE to keep interest rates unchanged at least until the fourth quarter of 2021, the UK-based economic research agency said, echoing forecasts it has made in previous notes.

Annual core inflation, which excludes volatile food and energy costs, came in at 3.3 percent in April, compared with 3.7 percent in March, while monthly core inflation registered 0.7 percent, up from 0.5 percent, the Central Bank of Egypt (CBE) announced.

Egypt's annual nationwide consumer price inflation dipped from 4.8 percent in March to 4.4 percent in April, while its monthly reading rose from 0.6 percent to 1.2 percent.


Economics

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Foreign Holdings of T-Bills Slides Slightly to $19.9 Bn in Mar

Foreign investment in treasury bills (T-bills) edged down to $19.9 billion in March, compared with $20 billion a month earlier, Al Mal reported yesterday citing a monthly bulletin released by the Central Bank of Egypt (CBE).

Meanwhile, investment from public sector banks in T-bills reached EGP 327.7 billion ($20.9 billion) in March, up from EGP 292.5 billion in February.

Investment by private sector banks in T-bills hit EGP 349.9 billion ($22.3 billion), compared month on month with EGP 340.6 billion.

Banking Sector Loans Rose to $162 Bn in February: CBE

Egyptian banking sector loans increased by 1.6 percent to record EGP 2.54 trillion ($161.9 billion) in February, compared with EGP 2.5 trillion in January, the Central Bank of Egypt (CBE) announced yesterday.

According to a monthly bulletin, non-governmental loans in both local and foreign currencies recorded an increase of 1.33 percent to reach EGP 1.68 trillion ($106.9 billion) in February, compared with EGP 1.65 trillion in January.

Loans in local and foreign currencies directed to the industrial sector rose to EGP 511.9 billion ($32.7 billion) in February, compared with EGP 509.1 billion in January.

In the trade sector, loans in local and foreign currencies declined to EGP 178.2 billion ($11.4 billion) in February, compared with EGP 177.4 billion in January.

Meanwhile, banking sector deposits rose to record EGP 5.37 trillion ($342.7 billion) at the end of February, compared with EGP 5.28 trillion at the end of January.

Government deposits in local and foreign currencies increased to EGP 945.8 billion ($60.4 billion) in February, compared with EGP 920.4 billion in January.

Government deposits in local currency recorded about EGP 820.7 billion ($52.4 billion) at the end of February, compared with EGP 798.7 billion in January.

Non-governmental customer deposits in local and foreign currencies also increased to reach EGP 4.4 trillion ($280.8 billion) by the end of February, compared with EGP 4.3 trillion in January.

Furthermore, Egyptian President Abdel Fattah El-Sisi yesterday held a meeting with CBE Governor Tarek Amer, CBE Deputy Governor for Banking Stability Gamal Negm and CBE Deputy Governor for Monetary Stability Rami Abulnaga, to discuss the central bank's monetary and financial governance.

Amer emphasized the stability of Egypt's banking sector during the pandemic crisis, describing its ability to withstand shocks and risks as the result of high capital and liquid assets.

Business

EIPICO Net Profits Fall 5.9% YoY in Q1 2021

Egyptian International Pharmaceutical Industries Company's (EIPICO) consolidated net profit dropped 5.9 percent year on year to EGP 178.1 million ($11.4 million) in the first quarter of 2021, compared with EGP 189.1 million, the drug manufacturer announced in a statement to the bourse.

The company's consolidated revenue rose 5.7 percent year on year to EGP 813.8 million ($51.9 million), compared with EGP 770 million.

Meanwhile, EIPICO's standalone net profit hit EGP 167.2 million ($10.7 million) in the first quarter of this year, up from EGP 165.2 million in the same period a year earlier.

The company recorded EGP 798.4 million ($51 million) in standalone revenue, up from EGP 739.3 million.

Orascom Development Egypt Reports 377% YoY Jump in Q1 Profit

Orascom Development Egypt (ODE) has reported a 377.1 percent year-on-year rise in its net profits during the first quarter of 2021.

Net profits recorded EGP 438.5 million ($28 million) in the three months ending in March, compared with EGP 91.8 million in the same period in 2020, the company said in a bourse filing yesterday. 

Revenues jumped to EGP 1.5 billion ($93.2 million) in the first quarter, a 61.5 percent increase on the EGP 903.8 million recorded in the first quarter of last year.

The company attributed the increase to accelerated construction operations that led to real estate revenues of up to EGP 1.2 billion ($76.6 million), an increase of 156.2 percent on the first quarter of 2020.

ODE added that it aims to deliver 238 units this year, with main deliveries in Tawila, Ancient Sands and Cyan.

"Looking into 2021, visibility remains limited as demand may still be impacted by the ongoing fluid circumstances resulting from the pandemic and the timing of the vaccine roll-out," ODE said.

"For the remainder of the year, we are planning to continue accelerating our real estate construction to meet contractual dates, ultimately increasing the real segment’s revenues," it added.

Aman Signs Partnership Agreement to Provide Digital Services to PaySky Customers

Aman for Financial Services, a subsidiary of Raya Holding for Financial Investments, has signed a strategic cooperation protocol with Egyptian financial services company PaySky.

Under the agreement, PaySky will be able to provide electronic payment and collection services through Aman's network of more than 100,000 points of sale (POS) across Egypt and branches in more than 25 governorates.

Aman CEO Hazem Moghazi said he was pleased to be cooperating with PaySky.

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Cleopatra Hospitals Group Terminates Alameda Acquisition Deal

Cleopatra Hospitals Group said a conditional share sale and purchase agreement (SPA) for the acquisition of Alameda Healthcare in Egypt, and an operational merger of its hospitals and medical units, has been terminated.

In a statement to the bourse, Cleopatra said that negotiations regarding the agreement had come to an end.

Alameda Healthcare is the owner of Dar Al Fouad and As-Salam International hospitals and several medical labs.

Metallurgical Industries Holding Ends Talks on Sahara Group's Finance Offer

Egyptian Iron and Steel's (Hadisolb) parent company, Metallurgical Industries Holding (MIH), has terminated negotiations over an offer from Sahara Group to finance the development of Hadisolb's iron and steel plant, according to a bourse disclosure yesterday.

The company attributed the stop in negotiations to Sahara Group's failure to submit all the data it requested.

MIH said that it is continuing to implement extraordinary general assembly decisions related to liquidation of the steel plant.

Last month, Sahara Group said it had received preliminary approval from a foreign technical partner for the development of Hadisolb.

5 Egyptian Companies Among Most Powerful Arab Family Businesses in Middle East in 2021

Five Egyptian companies have made Forbes' 2021 list of the top 100 Arab family businesses in the Middle East.

Egyptian firm Mansour Group came in second on the list, after the Saudi Olayan Group.

Mansour Group operates in 100 countries and employs over 60,000 people. 

The group comprises six divisions: Mantrac, Mansour Financial, Manfoods, MMID, Man Capital and Al-Mansour Automotive, which is one of the largest General Motors dealers in the world, selling over 75,000 vehicles annually.

Egypt's Elaraby Group ranked 53rd on the list. The group manufactures and markets electronics and owns 16 companies, 26 industrial facilities and two hospitals. 

The remaining Egyptian companies to appear on the list were Hassan Allam Holding in 75th place, Memaar Al Morshedy in 82nd place and Orientals Group in 93rd place.

Edita Profits Up 25% in Q1 2021

Edita Food Industries saw a 25.3 percent increase in its net profits in the first quarter of 2021, the company said in a statement.

Edita reported profits of EGP 80.7 million ($5.1 million), compared with profits of about EGP 64 million in the first three months of 2020.

Revenues also rose 21 percent to EGP 1.2 billion ($74 million) during the January-March period, up from EGP 964.1 million in the first quarter of last year.

On a standalone basis, Edita's profits increased to EGP 100.2 million ($6.3 million) during the first quarter of this year, compared with EGP 95.2 million in the same quarter in 2020.

Raya Contact Center's Profits Down 80% YoY in Q1 2021

Egypt's Raya Contact Center reported an 80 percent year-on-year fall in net profits in the first quarter of 2021. 

Net profits slumped to EGP 2 million ($130,000), down from EGP 10.3 million in the first quarter of last year, the company said in a bourse filing.

Revenues fell 6.04 percent year on year in the first quarter, from EGP 193.9 million ($12.4 million) last year to EGP 182.9 million this year.

NAEEM Holding Losses Marginally Increase in Q1 2021

NAEEM Holding for Investments' losses rose about 0.19 percent year on year in the first quarter of 2021, according to a bourse filing yesterday.

The investment bank said that it had incurred losses of $1.512 million during the January-March period, up from losses of $1.509 million in the same quarter of last year.

The company's revenues, however, rose to $937,000 in the first quarter, compared with $830,260 in the first quarter of 2020.

In standalone business, NAEEM reported $1.4 million in losses, up from $1.1 million in losses in the first quarter of last year.

Prime Holdings Losses Decrease 35% During Q1 2021

Prime Holding for Financial Investments' losses declined 35 percent year on year during the first quarter of 2021, supported by revenue growth.

In a bourse filing, the company said that it recorded losses amounting to EGP 11.4 million ($724,665) during the January-March period, compared with losses of EGP 17.4 million in the same period last year.

The company's revenues increased to EGP 33.3 million ($2.1 million), a 970 percent increase on the EGP 3.1 million recorded in the first quarter of last year.

 

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Egyptian Govt Proposes 10% Cement Production Cut to Ease Market Glut

The Egyptian government has proposed that cement producers cut production by no less than 10 percent to support finances severely affected by an expanding market glut, two cement executives and a senior industry source told Reuters.

The anonymous sources said that Egypt's cement capacity has risen to somewhere between 85 million and 87 million tons annually in the last three years, following the inauguration of Beni Seuf plant, which produces 13 million tons annually. 

The cement executives said the proposed production cuts seem unfair to foreign-owned firms.

"It’s very welcome by the industry that there is some sort of intervention by the government," one of the executives said.

Stock Market

EGX30 Climbs 0.4%

The blue-chip EGX30 index climbed 0.4 percent on Monday to close at 10,686.03 points, extending a gaining streak that began last Wednesday.

The EGX30's turnover hit EGP 334.9 million ($21.4 million), and its heaviest constituent, Commercial International Bank (CIB), rose 0.47 percent to EGP 60.18.

Fawry jumped 2.05 percent to EGP 20.89 ($1.33), Talaat Moustafa Group gained 1.55 percent to EGP 5.70, Elsewedy Electric increased 0.59 percent to EGP 8.47, and Eastern Company rose 0.42 percent to EGP 12.04.

Meanwhile, EFG Hermes edged down 0.21 percent to EGP 14.11 ($0.90), and Abu Qir Fertilizers saw no change at EGP 19.85.

The broader EGX70 EWI added 0.29 percent to close at 2,135.42 points.

Net sales by foreign investors totaled EGP 50.1 million ($3.2 million), while net purchases by Arab and Egyptian investors amounted to EGP 44.6 million and EGP 5.5 million, respectively.

Egypt News

Egypt Receives 2 Mn Tons of Wheat From Local Farmers: Minister

Minister of Supply and Internal Trade Ali Moselhy said that the ministry has received 2 million tons of wheat from farmers, according to a statement released yesterday.

The wheat supply season in Egypt starts from mid-April and lasts for three months. Harvesting takes place at more than 450 sites.

The government is expecting to procure a total of 3.5 million tons of domestic wheat this season.

Meanwhile, Moselhy announced in a separate statement that bakeries will be open from 5am to 5pm on every day of the Eid al-Fitr holiday, with the exception of bakeries that have received a prior leave.

The minister added that mills have been instructed to provide three days of flour for each bakery during Eid.

Egyptian Railways Operating Extra Trains for Eid Holiday

The Egyptian Railway Authority began operating extra trains for the Eid al-Fitr period yesterday, with eight additional trains making daily trips to Upper Egypt lines until May 21 in order to meet high demand during the holiday.

Some trains are also operating with additional carriages during the same period.

The authority explained that passengers can book a maximum of four tickets each for additional trains and premium carriages up to 24 hours in advance of travel, provided that reservations are made from main stations using a national ID.

Egypt to Prepare Feasibility Study on Rapid Transport System for Buses on Ring Road

Egypt's transport ministry has signed a memorandum of understanding (MoU) with the Bus Rapid Transit on the Ring Road Alliance (BRT RR Alliance) to prepare a technical and economic feasibility study on a rapid transport system for buses on the ring road around Greater Cairo.

The global alliance is led by French company Transdev and its partners from Egyptian national companies, represented by Orascom, Mwasalat Misr and MCV, the transport ministry said yesterday.

The study will look at bus stations, an e-ticketing system, trip information platforms, and pedestrian crossings and waiting areas at stations, the ministry added.

Transport Minister Kamel Al-Wazir said that the project would help to reduce traffic on the ring road and absorb congestion at the entrances to Greater Cairo.

Egypt Post Wins Excellence Award From Universal Postal Union

Egypt Post has won a Universal Postal Union award for its excellence in serving express mail clients at the international level, after applying the highest quality standards and maintaining inquiry response and delivery times.

Egypt Post Chairman Sharif Farouk described the award as a clear embodiment of the Post's international role and said it affirms Egypt's leadership in postal services both regionally and internationally.

In a press release, Farouk said that the award was based on global, high-precision key performance indicators, which are measured by the Universal Postal Union and include responding to a minimum of 98 percent of inquiries on time.

Egypt Registers 1,150 New Coronavirus Cases, 68 Deaths

The Egyptian health ministry yesterday announced it had recorded 1,150 new coronavirus cases, bringing the total number of infections to 238,560.

The overall COVID-19 death toll hit 13,972, with 68 new fatalities reported on Monday.

The ministry also said 677 cases had fully recovered and left hospitals over the past 24 hours, bringing the total number of recoveries to 177,440.

Sports

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Sassi (L) celebrates the equalizer with Ahmed Zizo (courtesy of the Egyptian FA's Twitter account)

Zamalek Secure Late Draw With Ahly in Cairo Derby

Zamalek's Ferjani Sassi scored a superb late goal to earn his side a 1-1 Cairo derby draw with arch rivals Ahly in the Egyptian Premier League.

Ahly looked on course to complete the double over Zamalek, having defeated them 2-1 last month, when substitute Salah Mohsen broke the deadlock in the 73rd minute.

Mohsen latched onto a long ball from Amr El-Sulaya to break clear from the halfway line, round the keeper and slot the ball into an empty net.

However, Tunisia midfielder Sassi sent a superb curling effort home with 10 minutes remaining to prevent Zamalek from losing a second consecutive league derby.

Zamalek remained on top of the table with 45 points, four ahead of Ahly.

Defending champions Ahly, who are eyeing a sixth straight league crown, can pull two points clear on top if they win their two matches in hand.

World

Hamas Fires Rockets Into Israel as Tensions Escalate

The Gaza-based Hamas militant group yesterday fired rockets at Israel, with no immediate reports of damage or casualties, after issuing an ultimatum for forces to be withdrawn from two flash points in Jerusalem.

The rocket fire came after at least 300 Palestinians were injured at Jerusalem's Al-Aqsa Mosque on Monday, when Israeli riot police fired rubber bullets following evening prayers for a second time in recent days. At least 200 Palestinians were injured at the mosque in a similar incident on Friday, according to the Palestinian Red Crescent.

Warning sirens were heard in the city minutes after the deadline passed on a Hamas ultimatum to Israel to withdraw its forces.

Gaza's health ministry said yesterday that nine Palestinian citizens, among them three children, had been killed in Israeli air strikes in the Palestinian territory, without explicitly blaming Israel for their deaths.

Meanwhile, Egypt has condemned the Israeli forces' re-storming of Al-Aqsa Mosque and the targeting of locals and worshipers to expel them from the mosque's courtyards, the foreign ministry stated yesterday.

Egyptian Foreign Minister Sameh Shoukry and his Saudi counterpart Prince Faisal bin Farhan Al Saud yesterday discussed recent developments in Jerusalem during a phone call.

The pair affirmed their rejection of all illegal practices aimed at undermining legitimate Palestinian rights, the Egyptian foreign ministry announced in a separate statement.

Tensions have escalated in recent weeks due to Israeli restrictions on access to parts of the Old City during Ramadan, and the threat of eviction hanging over four Palestinian families in east Jerusalem to make way for Jewish settlers.

The US, EU and regional powers urged calm after days of escalating violence.

Egypt's foreign ministry on Saturday denounced efforts to displace Palestinian families from their homes in the Sheikh Jarrah neighborhood of East Jerusalem, describing the move as a violation of international humanitarian law.

UAE, Bahrain Establish Safe Travel Corridor Amid Pandemic

The UAE and Bahrain have adopted a safe travel corridor between the two countries for those who have been vaccinated against the coronavirus, starting from the first day of Eid al-Fitr.

The corridor will remove the need to quarantine upon arrival, according to Emirati news agency WAM.

Strict precautionary health measures must still be adhered to upon departure and arrival and are currently being updated to ensure that travel is safe.

In both countries, citizens and residents wishing to exempt themselves from the mandatory two-week quarantine will need to show that they have received the last dose of a COVID-19 vaccine.

Travelers can prove that they have received the last dose of a vaccine, as well as PCR test results, through the UAE's Al Hosn app and the BeAware Bahrain app.

Top Headlines of the Week

Arab Markets
Egypt EGX30 10,686.03 +0.40%
KSA TASI 10,322.68 +0.92%
UAE ABU DHABI ADX 6,209.43 -0.14%
UAE DUBAI DFM 2,696.03 +0.36%
World Markets
US Dow Jones IA 34,742.82 -0.10%
NASDAQ-100 13,401.86 -2.55%
S&P 500 4,188.43 -1.04%
UK FTSE 100 7,123.68 -0.08%
Germany DAX 15,400.41 +0.00%
France CAC 40 6,385.99 +0.01%
Japan Nikkei 225 29,518.34 +0.55%
China HANG SENG INDEX 28,595.66 -0.05%
Currencies
US Dollar 15.62 15.72
Euro 19.00 19.12
Sterling 22.03 22.18
Saudi Riyal 4.16 4.19
UAE Dirham 4.25 4.28
Kuwaiti Dinar 51.84 52.31
Swiss Franc 17.35 17.47
Commodities
Oil Brent USD/bbl. 68.32 +0.06%
Wheat USD/bu.Mar 2020 730.50 -4.10%
Gold USD/t oz. 1,834.93 -0.06%
Gold Egypt LE/ oz. 1,835.12 +0.25%
Silver Egypt LE/ oz. 27.31 -0.54%

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