The Egyptian Prime Minister stated that changing the exchange rate increases the cost of electricity subsidies by 16 billion EGP annually

Newsletter

19 Jun 2022

The Egyptian Prime Minister stated that changing the exchange rate increases the cost of electricity subsidies by 16 billion EGP annually. Noting that stabilizing electricity prices will cost the government about 20 billion EGP annually, including 10 billion EGP in the second half of this year. The government was aiming to increase electricity prices starting next July, but the Egyptian president Abdel Fattah Sisi directed the government to postpone the price increase to ease the burden on citizens. Egypt announced in June 2020 that the electricity subsidy, during the years from 2020-2021 to 2024-2025, will amount to 78.6 billion EGP, by 26.7 billion EGP to support electricity destined for domestic consumption, and 22 billion EGP to support the industrial sector, in addition to 29.9 billion EGP for power stations that operate with natural gaz. (Bloomberg Asharq)

Siemens Mobility Egypt has signed a cooperation protocol with the Ministry of Education and the Chamber of Engineering Industries to set up an Industrial Engineering Center of Competence (CoC) in Zein El Abedin School.
The school will provide students with advanced learning experience through curricula and training based on the latest technological solutions. The three parties will collaborate to establish a Technical Education Reform program to upgrade the technical and vocational education and training (TVET) to become inclusive with high-quality long-term learning opportunities as per the international quality standards. (Arab Finance)
Egypt plans to turn into an advanced global logistics hub through benefiting from the South Korean expertise in artificial intelligence (AI), Minister of Finance Mohamed Maait stated.
The country shall deepen cooperation with members of the World Customs Organization for sustainable development and digitized customs system as per the international standards, Maait added in a meeting with the Ambassador of South Korea to Cairo Hong Jin-wook. For his part, the ambassador has praised the incentives and customs facilities offered by Egypt to south Korean investors. Jin-wook also stressed the South Korean companies' interest in boosting investment in Egypt, which is one of the best destinations for investments in Africa. (Arab Finance)
Egypt and Italy are jointly establishing six field silos in cooperation with the Italian government with up to EGP 367 million in investment, according to an official statement by the Egyptian Ministry of Supply and Internal Trade.
Four of the silos are being built in the governorate of El-Sharqia, while one is being established in El-Minya governorate and another in El-Menofia, Minister of Supply Ali El-Moselhi said during his meeting with the Italian Ambassador to Cairo Michele Quaroni. Each field silo is being set up with a capacity of 5,000 tons under the Italian-Egyptian Debt for Development Swap (IEDS) Program, El-Moselhi added. (Arab Finance)
Moreover, the minister and the ambassador have discussed the governance project for trading wheat with investments worth 52 million EGP and an execution rate of 60%.
For his part, Quaroni said that this cooperation would contribute to dealing with the food security issue. He also noted that the European Union (EU) has adopted a program to support neighboring countries with 225 million EUR, of which 100 million EUR are allocated for Egypt, to face food and materials inflation amid the Russian-Ukrainian war. (Arab Finance)
The Minister of Petroleum, Tarek El Molla, stated that Egypt has excess capacity to monetize Natural gas currently, pointing to the possibility of adding new stations if it is confirmed that the quantities produced from the new fields exceed the current liquefaction capacities.
Adding that Egypt and Israel will increase gas exports to Europe via Egyptian natural gas liquefaction facilities, as part of the European bloc's efforts to reduce dependence on Russian imports of gas and oil. Egypt is seeking to become a regional center for natural gas, and Egypt also has agreements with Cyprus and Greece regarding pipelines to supply gas to Egypt for the purpose of re-exporting it through Egyptian liquefaction facilities. (Al Mal)
The Minister of Trade and Industry Nevine Gamea stated that Russian investments are welcome in Egypt, inviting companies and businessmen in both countries to enter partnerships and carry out joint projects.
Trade exchange between Egypt and Russia has amounted to 4.7 billion USD in 2021, increasing by 5.1% year-on-year (YoY) from 4.5 billion USD. Egyptian exports to the Russian market have jumped by 14.7% to 591.7 million USD in 2021, compared to $515.6 million in 2020, Gamea noted. Meanwhile, the Russian exports to Egypt have increased by 3.9% YoY to 4.178 billion USD last year from 4.019 billion USD, she added. (Arab Finance)
Egypt’s trade balance deficit dropped by 39.7% to 2.26 billion USD in March 2022, compared to 3.74 billion USD in the same month of 2021.
The value of Egyptian exports jumped by 44.1% year-on-year (YoY) to 5.48 billion USD in March 2022 from 3.81 billion USD. The agency attributed this growth in exports to the increase in the value of some goods’ exports, including petroleum products, crude oil, fertilizers, and ready-made clothing by 128.6%, 74.1%, 90.8%, and 47%, respectively. Moreover, the value of Egypt’s imports amounted to 7.74 billion USD last March, growing by 2.6% from 7.55 billion USD in the corresponding month of 2021. The increase in imports value was driven by the uptick in some imports’ value, including raw materials of iron or steel which surged by 144.9%, along with plastics and corn that increased by 6.9% and 7.2% respectively. (CAPMAS)
On the global level, the Federal Reserve approved the largest rate hike since 1994 last week as it fought to regain the narrative amid soaring inflation and growing market turmoil.
Policymakers raised the benchmark rate by 75 basis points to a target range of 1.5-1.75%. Moreover, they would continue unwinding the Fed’s 9 trillion USD balance sheet, a show of force designed to regain the market’s faith that it’s serious about getting inflation under control. The central bank is “highly attentive” to inflation and will move “expeditiously” to tame prices, Fed chair Jay Powell said at the post-meeting presser. (Bloomberg)
Moving to our EGX and companies talks, AMAN for Microfinance, a subsidiary of AMAN Group, has entered into a partnership with Prime Investments-Asset Management to launch its first investment fund ‘AMAN YOUM-B-YOUM’, which offers saving accounts to all social segments with a daily return on investment (ROI).
The new fund is anticipated to receive over EGP 25 million worth of investments in the initial phase. The amount could be quadrupled to EGP 100 million in its first year. A subsidiary of Raya Holding for Financial Investments (RAYA), AMAN Group for Fintech solutions comprises three companies; AMAN Financial Services, AMAN Microfinance, and AMAN E-Payments. AMAN is among the first companies to obtain a license from the Financial Regulatory Authority (FRA) to establish a daily investment fund for consumers and enterprises.
Arab Moltaka Investments Company (AMIA) has signed a subscription agreement to join a consortium of investors holding shares in Expedition Investment, a company incorporated according to the laws of Mauritius.
The company has invested 50 million EGP in Expedition Investment for a stake that has not been disclosed yet. Arab Moltaka also pointed out that Expedition Investment’s preliminary non-binding acquisition offer for a 90% in Arabian Food Industries Company (Domty) (DOMT) is neither final nor binding and is contingent on the results of the due diligence and relevant approvals. It is worth noting that Arab Moltaka’s consolidated net profit excluding minority interest amounted to 16.902 million EGP in Q1 2022, down from 49.136 million EGP in the same quarter a year earlier. (EGX)
International Company for Leasing’s (Incolease) (ICLE) ordinary general meeting (OGM) has approved the signing of a finance lease agreement with Palm Hills Development Company (PHDC) and its subsidiary Palm Hills Middle East for Real Estate Investment.
It is worth noting that Incolease reported a 156.8% year-on-year (Y-o-Y) increase in net profit after tax, reaching 41.317 million EGP during the first quarter (Q1) of 2022. Incolease is an Egypt-based company engaged in the provision of customer service and personalized financial solutions. (Arab Finance)
Orascom Development Egypt (ORHD) (ODE) announced that the Egyptian Grievance Committee at the Egyptian General Authority for Investment and Free Zones (GAFI) has accepted a petition submitted by the company’s subsidiary Makadi Heights appealing against a land reduction decision.
Accordingly, the total land allocated to the Makadi Heights project will remain at 3.75 million square meters (sqm). The recent decision reversed a previous decision by the Egyptian Tourism Development Authority (TDA) to reduce the land plot allocated to Makadi Heights by 1.75 million sqm. (EGX)