27 Nov 2022


Oil Drops for Third Straight Week

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Oil prices saw a third consecutive weekly drop last week, with Brent crude futures falling 4.6 percent and US West Texas Intermediate (WTI) dropping 4.7 percent, as China's COVID-19 outbreaks worsened and the EU saw no breakthrough on capping Russian oil prices.

For the day, Brent went down $1.71, or 2 percent, on Friday to settle at $83.63, while WTI declined $1.66, or 2.1 percent from Wednesday's close, to settle at $76.28 a barrel.

There was no WTI settlement on Thursday due to the US Thanksgiving holiday.

A meeting of EU government representatives scheduled for Friday evening to discuss a proposal setting the price cap on Russian oil at a range of $65-70 a barrel had been canceled amid disagreements between member states, Reuters reported citing EU diplomats.


Economics

EGP Will Remain Under Pressure Until Dollar Inflows Increase: Analyst

The Egyptian pound is expected to face continued pressure until more dollars are pumped into the economy, according to Carla Slim, MENA economist at Standard Chartered.

"The Egyptian pound will likely remain under pressure until more US dollar inflows from GCC [Gulf nations] and committed foreign direct investment materialises," Slim told Reuters on Friday.

The GCC nations pledged $22 billion to Egypt in April to help the country mitigate the economic repercussions of the Russo-Ukrainian war.

In addition, some economists shared mixed views on the current value of the pound.

"Fundamental valuation models suggest the pound is undervalued by as much as 10% at the moment," Farouk Soussa, MENA economist at Goldman Sachs, told Reuters.

Capital Economics Economist James Swanston, on the other hand, said that the pound needs to weaken to at least 25 per dollar to account for the inflation differential with Egypt's main trading partners.

The pound logged 24.50 against the dollar on Thursday.

The Central Bank of Egypt (CBE) devalued the pound by over 20 percent in two days at the end of October as it pledged a flexible exchange rate policy following a staff-level agreement reached with the International Monetary Fund (IMF) on a $3 billion Extended Fund Facility.

In March, the CBE devalued the pound by 16 percent on the back of the impact of the war in Ukraine.

The pound has shed around 56 percent of its value in the year to date, according to the CBE's figures.

Stock Market

Egypt's New Commodities Exchange to Start Trading Today

Egypt's commodities exchange (EGYCOMEX) will begin the first phase of its operations today.

Wheat will be traded on EGYCOMEX during this phase. The country's grain buyer, the General Authority for Supply Commodities (GASC), will offer wheat to mills on the exchange twice a week.

One of the goals of EGYCOMEX is to stabilize the prices of the traded commodities and to boost the strategic stock of goods.

In related news, Ibrahim Ashmawy, the head of Egypt's commodities exchange (EGYCOMEX) and the chairman of the Internal Trade Development Authority (ITDA) told Reuters that the country's current wheat reserves are sufficient for more than five months.

US Stocks Mixed at Close of Friday's Trade

Wall Street's main averages meandered Friday, with the Dow Jones Industrial Average adding 0.45 percent to close at 34,347.03 points and the blue-chip S&P 500 dipping 0.03 percent to settle at 4,026.12.

The tech-focused Nasdaq Composite dropped 0.52 percent to close at 11,226.36 points.

For the week, the Dow advanced 1.78 percent, the S&P 500 went up 1.53 percent, and the Nasdaq rose 0.72 percent.

Across the Atlantic, the pan-European Stoxx 600 ended 0.03 percent lower on Friday at 440.73 points.

Meanwhile, Egypt's blue-chip EGX30 index advanced 1.42 percent to close at 12,779.44 points on Thursday.

The index's turnover was EGP 1.29 billion ($52.6 million) and its heaviest constituent, Commercial International Bank (CIB), gained 1.99 percent to EGP 37.85.

The broader EGX70 EWI surged 4.37 percent to close at 2,516.52 points.

Business

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(Courtesy of Ministry of Communications and Information Technology on Facebook)

500 Global Pen Agreement to Open Office in Egypt

The Information Technology Industry Development Agency (ITIDA) signed a cooperation agreement with venture capital firm 500 Global on Friday to open the first office for the company in Egypt and Africa and operate the CREATIVA Innovation Hub in Giza.

Per the agreement, 500 Global will build the capacity of about 200 start-ups, in addition to establishing a fund to invest in start-ups in Egypt.

The term of the agreement is three years.

Egypt's communications and IT ministry aims to establish around 30 CREATIVA Innovation Hubs nationwide with investments exceeding EGP 5 billion ($203.8 million) to develop start-ups and support their capacity for growth.

Saudi's Mouwasat Suspends Acquisition of Al-Marasem Hospital

Saudi Arabia's Mouwasat Medical Services on Thursday suspended its acquisition of Egypt's Al-Marasem International Hospital Company, citing the latter's lackluster commitment to the deal.

The suspension also comes after Mouwasat could not finish carrying out its due diligence, it said in a filing for the Saudi exchange.

Mouwasat signed a non-binding MoU in May to buy 100 percent of Al-Marasem.

Orascom Construction's Profits Down 24% YoY in 9M 2022

Orascom Construction's consolidated net profits after tax and minority interests dropped 24 percent year on year during the first nine months of 2022 to $57.8 million, down from $76.1 million, according to a bourse disclosure yesterday.

Revenues, however, rose 20.1 percent to $3.05 billion in the nine-month period, up from $2.54 billion in the same period of last year.

In standalone business, the company saw its losses widen from $14.71 million to $23.6 million.

Egypt News

Egypt's GASC Buys 175K Tonnes of Wheat: Report

Egypt's General Authority for Supply Commodities (GASC) bought 115,000 tonnes of wheat on Thursday via private talks with suppliers, traders told Reuters.

Traders added that they believe an additional 60,000 tonnes of Russian wheat might have been bought.

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Emigration Minister Soha Gendi

Egypt Eyes Launching Expat Investment Company: Minister

Egypt is working on setting up an investment company for Egyptian expats to invest in local megaprojects, Emigration Minister Soha Gendi told Asharq Business yesterday.

The minister said that the company is expected to be established by next year, adding that it would be listed on the Egyptian stock market

The move comes as Egypt looks to add more sources of foreign currency.

Earlier this month, the government launched an initiative exempting Egyptian expats' personal vehicles from fees and customs when bringing them to Egypt in exchange for paying a deposit in foreign currency.

Qatar's Wealth Fund in Talks to Manage Egypt's Safaga Port: Report

Qatar Investment Authority, the country's sovereign wealth fund, is currently in negotiations with the Egyptian government to sign a contract to revamp and manage Safaga Port.

Per the contract, the authority will have a 25-year beneficial interest in the port, two sources familiar with the matter told Asharq Business on Thursday.

Owned by the General Authority for Red Sea Ports, the port is a natural gulf that is located in the Red Sea governorate, 60 kilometers south of Hurghada.

Egypt, Greece Sign MoU on Maritime Rescue; Turkey Objects

Egypt signed an MoU with Greece on Wednesday in the field of air and sea search and rescue in the eastern Mediterranean.

Turkey criticized Greece for signing the MoU, calling the move a "dangerous contradiction," in a foreign ministry statement, accusing Athens of putting refugees' lives in danger at present by pushing them to the Aegean Sea.

"Greece's attempt to draw up its domestic and foreign policy within the framework of opposing Turkey is a futile effort that will only harm it," said Turkish foreign ministry spokesman Tango Bilgic.

Greece and Turkey are both NATO members, but they have long-standing tensions related to several issues, including air space, energy resources and the status of some islands in the Aegean.

Egyptian Parliament Slams 'Arrogant' EU Parliament Resolution on Human Rights

The Egyptian parliament has voiced its complete rejection of a European Parliament resolution on human rights in the country, describing it as "arrogant."

The House of Representatives said in a statement that the resolution was blatant interference in Egyptian affairs and completely unacceptable. It also said the resolution was built on inaccurate and false allegations that reflect a biased and subjective view of the reality of the situation in Egypt.

In the resolution issued on Thursday, the European Parliament called for "the immediate and unconditional release of British-Egyptian human rights defender and peaceful activist Alaa Abdel-Fattah."

It also called on the Egyptian authorities to end arrests and trials of people accused of consensual adult sexual relations, including same-sex relations. Moreover, it condemned the censorship of civil society representatives.

In addition, it called on EU member states to support a rights monitoring mechanism at the UN Human Rights Council and demanded EU diplomats and officials highlight rights concerns in all high-level meetings with Egyptian officials.

The resolution claimed that a state of emergency has been in place in Egypt since 2017.

In its statement, the Egyptian parliament said that the state of emergency in Egypt had come to an end in October 2021 and has not been renewed since then.

Egypt has jumped 19 places on the Human Development Index for 2021 to reach number 97 out of 191, according to the 2021/2022 Human Development report released by the United Nations Development Programme (UNDP) in September.

President Abdel Fattah El-Sisi last year launched the country's first National Strategy for Human Rights, a long-term human rights strategy that the government says will boost the country's stance on human rights via the development of state policies and orientations aimed at maximizing rights and freedoms.

The country has been releasing thousands of pre-trial detainees over recent months.

Egypt Releases 30 Pre-Trial Detainees

Egyptian authorities announced on Thursday the release of 30 political activists in pre-trial detention, Tarek El-Awady, a member of the presidential pardon committee and a human rights lawyer, wrote on Twitter.

In recent months, over 1,000 pre-trial detainees have been released, including human rights lawyer Haitham Mohamadein. About 15 prisoners received presidential pardons, including political activist Hossam Monis.

In April, President Abdel Fattah El-Sisi reactivated the pardon committee and appointed new members.

Egypt, France Sign Deal to Upgrade Tanta-Mansoura-Damietta Railway Line

Egypt's National Railways Authority has signed an agreement with the French Development Agency (AFD) to upgrade the signaling and communication systems of the Tanta–Mansoura–Damietta railway line, the authority stated on Thursday.

The 119-kilometer railway line consists of a double-track line of 54 kilometers with 16 stations between Tanta and Mansoura and a single-track line of 65 kilometers with 19 stations between Mansoura and Damietta.

The deal is part of the Tanta–Mansoura–Damietta railway upgrading project, which also includes the doubling of the tracks from Mansoura to Damietta.

The project aims to improve the line's safety and shore up its capacity.

Egypt's Population Up by 250K in Less Than Two Months: CAPMAS

Egypt's population increased by 250,000 in 56 days, hitting a total of 104,253,275 people as of yesterday, stats body CAPMAS announced.

The statistics indicated that Egypt ranks first in the Arab world in terms of population, third in Africa, and fourteenth in the world.

The capital Cairo came at the top of the list of governorates in terms of population, with 10.2 million people. Giza came second with 9.4 million people, followed by Sharqiya with 7.8 million.

The government has been implementing campaigns aiming to reduce the birth rate per woman to two children, in attempt to curb overpopulation which has been weighing on the economy.

World

Rare Protests Erupt in Parts of China Over COVID Lockdowns

Protesters took to the streets on Friday in rare scenes in China's western Xinjiang region and some areas of the capital Beijing to demand the lifting of the country's strict lockdown measures under its zero-COVID policy.

Residents of Urumqi, Xinjiang's capital, chanted "End the lockdown!" after a Thursday fire killed 10 people in a high-rise building. Many social media users suspected that residents could not escape the fire in time due to the building's partial lockdown, a narrative that was denied by officials.

Meanwhile, a number of Beijing residents held small-scale protests, with some managing to pressure their local officials to lift lockdowns ahead of schedule.

At least 11 compounds had lifted their lockdowns earlier than planned by yesterday evening after residents complained, according to a Reuters tally of social media posts by residents.

China maintains that its zero-COVID policy is necessary to prevent overwhelming the healthcare system, continuing to defend it despite its economic toll and growing pushback.

Talks Postponed as EU Remains Split on Russian Oil Price Cap Deal

The European Union's member states remained split on Thursday on the Russian oil price cap agreement, with the Group of Seven's (G7) earlier proposal seen as too high by some and too low by others.

The talks will resume when "there is progress. There is no point in calling another meeting if there is no change," one EU diplomat was quoted as saying by Reuters on Thursday.

On Wednesday, the G7 nations convened to mull setting a price cap on Russian oil, eyeing a range of $65-70 a barrel.

"In principle, Poland supports the price cap on the Russian oil but the proposed level is extremely too high," Adrian Biernacki, a spokesman for the Polish representative to the EU, said on Thursday. Lithuania and Estonia back Poland.

Meanwhile, Cyprus, Greece and Malta argue the cap is too low.

Moreover, Russian President Vladimir Putin warned Thursday that Western plans to introduce oil price cap could have "grave consequences" for energy markets, speaking on the phone with Iraqi Prime Minister Mohammed Shia Al-Sudani.

Earlier this month, the G7 and Australia reportedly agreed to set up a fixed price, rather than a floating price pegged to the Brent crude oil price benchmark, when they finalize a price cap on Russian oil.

In September, the European Commission proposed the price cap on Russian oil as part of its eighth round of sanctions against Russia after the Kremlin's announcement of partial mobilization, annexation referendums in Russian-occupied areas of Ukraine and threats to use nuclear weapons. 

The price cap is set to begin on December 5 on crude oil and on February 5 on oil products.

The sanctions also included more measures against individuals assisting Putin's war efforts, as well as bans on trade.

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Twitter to Roll Out New Color-Coded Verification System Next Week

Elon Musk, new owner of Twitter, on Friday announced some planned changes to the authentication mark system, with gold, gray and blue categories depending on the user due to be rolled out within a week.

Musk said that companies will receive a golden verification mark, government accounts will receive a gray verification mark, and individuals, regardless of whether they are famous or not, will receive a blue verification mark.

"All verified accounts will be manually authenticated before check activates," he tweeted. "Painful, but necessary."

Earlier this month, Musk announced a new service under the name "Twitter Blue", according to which the company charged $8 a month for the verification mark service. The launch of the service led to a surge in impersonations by users, including some of prominent companies such as pharmaceutical giant Eli and Lilly, and was swiftly suspended.

Earlier this month, Musk fired 3,700 employees, or around half of Twitter's formerly 7,500 staff, citing a drop in ad revenues.

An additional 1,000 Twitter employees are reported to have later resigned of their own accord, leaving the company with around 2,700 employees.

Musk bought the social media giant for $44 billion in October.

Russia Renews Strikes on Freed Ukrainian City of Kherson

Ukrainian authorities said that 15 people were killed and 35 others were wounded in renewed Russian strikes on the freed city of Kherson in southern Ukraine on Friday.

"The Russian invaders opened fire on a residential area with multiple rocket launchers. A large building caught fire," said Yarovslav Yanushovich, head of the Kherson military administration.

The authorities had to evacuate residents of Kherson to Khmelnytskyi in western Ukraine.

Russia announced its withdrawal from Kherson two weeks ago in a major setback for Moscow. It had been the first major Ukrainian city to fall into its hands since February 24.

Meanwhile, NATO Secretary General Jens Stoltenberg pledged on Friday to help Ukraine defend itself against Russia "for as long as it takes" and to help the war-torn country transform its armed forces into a modern army by Western standards.

On Saturday, Ukraine launched an international aid program called "Grain from Ukraine," which aims to export $150 million worth of grain to countries most at risk of famine and drought.

Zelenskyy said that up to 60 ships will be sent from Ukrainian Black Sea ports to countries such as Sudan, Yemen or Somalia by the middle of next year under the initiative.

The grain summit, where the initiative was announced, was attended in-person by the prime ministers of Belgium, Poland and Lithuania and the president of Hungary. Germany and France's presidents and the head of the European Commission participated via video conference.

Sports

Mbappe Leads France to World Cup Round of 16; Saudi Arabia Lose to Poland

Kylian Mbappe scored twice as France beat Denmark 2-1 to become the first team to reach the World Cup knockout stage while Saudi Arabia were given a reality check following a 2-0 loss to Poland on Saturday.

At Qatar's Stadium 974, Mbappe stole the show with a virtuoso display as France made it two wins out of two.

He put them ahead with a fine finish after a one-two with Theo Hernandez but Andreas Christensen brought Denmark level with a far-post header from a corner seven minutes later.

Mbappe then netted from close range with four minutes remaining to send France to the last 16 as they top Group D with six points, three ahead of Australia, who beat Tunisia (1 point) earlier on Saturday.

Denmark also have a solitary point from two matches.

In Group C, Saudi Arabia's impressive start came to a halt after a defeat by Poland while Argentina recovered from their shock opening loss to revive their hopes with a 2-0 win over Mexico.

Although Saudi Arabia, who beat Argentina in a remarkable game last week, pegged Poland back with a relentless attacking game, it was the Europeans who snatched all three points with two goals from Piotr Zielinski and Robert Lewandowski either side of the interval.

Argentina needed second-half goals from talisman Lionel Messi and substitute Enzo Fernandez to down Mexico.

Poland top the tight group with four points, followed by Argentina and Saudi Arabia on three. Mexico lie at the bottom with a single point.

Arab Markets
Egypt EGX30 12,779.44 +1.42%
KSA TASI 10,938.75 -0.24%
UAE ABU DHABI ADX 10,528.49 -0.06%
UAE DUBAI DFM 3,305.27 -0.60%
World Markets
US Dow Jones IA 34,347.03 +0.45%
NASDAQ-100 11,226.36 -0.52%
S&P 500 4,026.12 -0.03%
UK FTSE 100 7,486.67 +0.27%
Germany DAX 14,541.38 +0.01%
France CAC 40 6,712.48 +0.08%
Japan Nikkei 225 28,283.03 -0.35%
China HANG SENG INDEX 17,573.58 -0.49%
Currencies
US Dollar 24.50 24.57
Euro 25.48 25.57
Sterling 29.68 29.78
Saudi Riyal 6.51 6.54
UAE Dirham 6.67 6.69
Kuwaiti Dinar 79.70 79.97
Swiss Franc 25.95 26.04
Commodities
Oil Brent USD/bbl. 83.63 -2.00%
Wheat USD/bu.Mar 2020 797.00 -2.03%
Gold USD/t oz. 1,754.93 -0.02%
Gold Egypt LE/ oz. 1,754.6 -0.05%
Silver Egypt LE/ oz. 21.61 +0.53%

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