It is expected that Egypt inflation rate will exceed the maximum target of the Central Bank

Newsletter

10 Apr 2022

It is expected that Egypt inflation rate will exceed the maximum target of the Central Bank

For our top talks today, first, it is expected that Egypt inflation rate will exceed the maximum target of the Central Bank. The inflation rate in Egypt’s cities expected to reach around 10% to 11% for the month of March, noting that the acceleration in the rise is mainly related to the seasonality of entering Ramadan more than the recent developments in the interest rate and currency devaluation, whose effects will appear in a clear way. It is noteworthy that the inflation rate in Egyptian cities recorded 8.8% during February which was the highest in nearly 3 years, when it reached 9.4% in June 2019. The Central Bank of Egypt, in an extraordinary meeting last March, raised interest rates by 1% (100 basis points), in an attempt to absorb the wave of inflation, and to attract foreign investments in dollars for government debt instruments, after billions of dollars came out following the Russian-Ukrainian crisis. It is expected that the official inflation data for the month of March will be announced today, through the Statistics Authority and the Central Bank. (Zilla Capital)

Second, Egyptian exports of the building materials, refractory, and metallurgy industries sector have jumped by 29% during the first two months of 2021, according to the data by the Export Council for Building Materials, Refractory, and Metallurgy Industries (ECBM).
The UAE has acquired the lion’s share of the sector’s exports at a value of 221 million USD, up by 93% as compared to January and February 2021, followed by Canada which came in the second spot, with imports from Egypt soaring by 153% year-on-year (YoY) to 120 million USD. Meanwhile, the sector’s exports to Italy dropped by 13% YoY to 113 million USD in the two months ended February 28th, making it come in third place. (Al Borsa News)
Moreover, Egypt exports of cast steel increased by 4% YoY last January and February to 200 million USD from 192 million USD.
Cement exports surged by 142% to 104 million USD during the two months, versus 43 million USD in the same period of 2021. The country’s exports of aluminum recorded 138 million USD in the first two months this year, rising by 9% YoY from 126 million USD. On the other hand, Ceramic exports dropped by 16% to 26 million USD, as compared to January and February 2021. (Al Borsa News)
Abu Dhabi-based Al Nowais Group has submitted a proposal to the Egyptian Ministry of Electricity to merge its 500-megawatt solar power projects with the hydrogen projects planned to be carried out by the Abu Dhabi Investment Fund (ADIA) in Egypt.
A committee has been formed to study the proposal and inform the Cabinet of the study's results within at least a month. As per the proposal, the ADIA will be a partner in the hydrogen projects to be implemented for ammonia production. Once the proposal is approved, the merged projects will have a capacity of 100 megawatts, instead of 500 megawatts, with the possibility to be executed in two phases with a total capacity of 200 megawatts, they pointed out. The Emirati group had previously postponed the execution of the project due to the Covid-19 pandemic and higher costs of components and shipments. (Al Borsa News)
Next, the Egyptian Cabinet has approved the establishment of a free zone for the Egyptian Group for Multi-Purpose Terminals (EGMPT) at an estimated investment cost of 500 million USD.
The free zone will be set up for handling containers and general cargo on a 539,000-square-meter (sqm) terminal at Alexandria Port. Moreover, the project will be 100% financed by Egyptian investments. The Alexandria Port Authority, the Suez Canal Authority, the Holding Company for Maritime and Land Transport, and Alexandria Container and Cargo Handling Company (ALCN) are contributing to the project. (Arab Finance))
The Egyptian Cabinet has given final approval to the draft law regarding the amendment to some provisions of the Income Tax Act issued under Law No.91 of 2005.
Moreover, the Cabinet has approved the renewal action of Law No.79 of 2016 regarding the settlement of tax disputes. This comes in line with Article 38 of the state’s constitution, which encourages the improvement of the taxation system and the adoption of modern systems to offer an efficient and seamless experience of tax collection. Through the amendments, the government seeks to keep up with the developments witnessed by the Egyptian economy as well as to support investors and the investment process in the capital market. The amendments also provide an additional package of incentives to encourage investment in the Egyptian Exchange (EGX) through specialized funds. (Arab Finance)
The European Union (EU) has allocated an indicative sum of 100 million EUR to support food security in Egypt, according to a recent statement by the European Commission.
The funding comes as part of the newly announced Food and Resilience Facility initiative worth 225 million USD to help eight Arab countries. The initiative aims to mitigate the impact of the ongoing Russian invasion of Ukraine on the EU’s Southern Neighborhood partners. The facility will help the eight countries to tackle higher prices of food and commodities to meet short- and medium-term needs. Under the initiative, a sum of 5 million USD will be granted to Alegria, 25 million USD will be offered to Jordan, and an amount of 15 million USD will be given to Morocco. (Arab Finance)
Egypt has received 1.50 million doses of Pfizer COVID-19 vaccine from the US at the Cairo Airport on Wednesday, according to the Egyptian Minister of Higher Education and acting Minister of Health and Population Khaled Abdel Ghaffar.
The vaccines were provided to Egypt as per the COVAX initiative in collaboration with the Global Alliance for Vaccines and Immunization (GAVI), the minister added. The doses will be distributed to vaccination centers spread across the governorates. This comes as part of the government’s plan to offer diversified Covid-19 vaccines, in order to contain the pandemic. (Arab Finance)
Moving to our EGX and companies talks, Abu Dhabi-based Al Nowais Group has submitted a proposal to the Egyptian Ministry of Electricity to merge its 500-megawatt solar power projects with the hydrogen projects planned to be carried out by the Abu Dhabi Investment Fund (ADIA) in Egypt.
A committee has been formed to study the proposal and inform the Cabinet of the study's results within at least a month. As per the proposal, the ADIA will be a partner in the hydrogen projects to be implemented for ammonia production. Once the proposal is approved, the merged projects will have a capacity of 100 megawatts, instead of 500 megawatts, with the possibility to be executed in two phases with a total capacity of 200 megawatts. The Emirati group had previously postponed the execution of the project due to the Covid-19 pandemic and higher costs of components and shipments. (Al Borsa News)
Alpha Market Group is planning to invest around EGP 130 million to open new branches in 2022, according to the CEO Salah Farouk.
The group aims at opening five new branches in Greater Cairo this year, Farouk highlighted. The supermarkets chain operator has nine branches in Greater Cairo, he noted, adding that it seeks to have a presence in the governorates of Egypt in 2023. Moreover, he said that the group has completed the integrated restructuring process that began in 2019, and has launched the ERB system. (Al Mal)
EFG Hermes Holding’s (HRHO) board of directors has approved increasing issued capital by 973.07 million EGP through the distribution of 1-for-5 bonus shares.
Accordingly, the company’s issued capital shall increase to 5.838 billion EGP from 4.865 billion EGP. In 2021, EFG Hermes generated revenues of 6.1 billion EGP, rising by 12% year-on-year (YoY) to surpass the 6 billion EGP mark for the first time. Listed on both the Egyptian Exchange (EGX) and the London Stock Exchange (LSE), EFG Hermes has a presence in 13 countries, including the UAE, Saudi Arabia, Kuwait, Jordan, Oman, and Pakistan. (EGX)
The Egyptian Exchange (EGX) approved an application for converting 1.5 million of Egyptian Kuwaiti Holding’s (EKH) (EKHO) shares to be traded on US dollar, instead of EGP.
Accordingly, the number of the company’s shares traded on US dollar reached 667.107 million. The number of shares traded on EGP amounted to 459.778 million EGP. The EGX’s database will be updated of the recent changes as of April 10th. Egyptian Kuwaiti Holding is an Egypt-based investment company with a diversified portfolio of investments in sectors, including fertilizers and petrochemicals, energy, insurance, manufacturing, information technology, transport, and infrastructure. (EGX)
In addition, the Financial Regulatory Authority (FRA) has approved amendment to the price of an acquisition offer presented by Kandil Glass Company for 100% of the shares of the National Company for Glass and Crystal.
The per-share price of the deal was amended to 2.4 EGP from 2 EGP. It is worth noting that Kandil previously submitted an offer to purchase up to 15 million shares or a 100%-stake in the National Company for Glass and Crystal for 2 EGP per share. (EGX)
Misr Hotels Company (MHOT) is targeting a net profit after tax of EGP 23.518 million during the fiscal year (FY) 2022/2023.
The company seeks to achieve an operating income of 43.652 million EGP in FY 2022/2023. Misr Hotels is mulling over investing 1.788 billion EGP the next FY including acquisitions and rehabilitations of existing properties. It is worth noting that the company achieved a net profit before tax of 151.13 million EGP in the July-December period of FY 2021/2022, versus a net loss of 106.46 million EGP in the year-ago period. (EGX)