The CBE kept the interest rates unchanged by 11.25% for deposit and 12.25% for lending

Newsletter

26 Jun 2022

As expected, the CBE kept the interest rates unchanged by 11.25% for deposit and 12.25% for lending, during its fourth meeting in 2022, in an attempt to monitor the developments of inflation numbers. The Central Bank of Egypt, in an extraordinary meeting in March, raised interest rates by 1% (100 basis points), in an effort to absorb the wave of inflation, and in order to attract foreign investments in dollars for government debt instruments, after billions of dollars came out after the Russian-Ukrainian crisis. Then, in May, it raised interest rates by 2% (200 points) to contain inflationary pressures. (Zilla Capital)

Egypt should attract more foreign direct investment (FDI) and increase exports to wean itself off the carry trade, according to the Minister of Finance Mohamed Maait.
However, Maait expressed concerns over the ramifications of hikes in interest rates and the impact on Egypt’s cost of debt services. Moreover, the minister said he has witnessed outflows from portfolio investments three times since 2018 and he is familiar with dealing with it. On June 9th, the United Nations Conference on Trade and Development (UNCTAD) announced in its World Investment Report 2022 that Egypt’s FDI dropped 12% year-on-year (YoY) to 5.122 billion USD in 2021. (Bloomberg)
The Media Center of the Ministry of Finance has ensured the stability of Egypt's food security, denying that minister Mohamed Maait mentioned the existence of a food crisis in Egypt during his participation in the Qatar Economic Forum.
The food security in Egypt is stable and the strategic reserves of food commodities are sufficient for 6 months. The minister called for concerted global efforts to eradicate the global food crisis. The finance ministry’s media centre maintained that Egypt is taking serious steps towards the achievement of self-sufficiency through major agricultural projects. Egypt has reclaimed more than 500,000 feddans of wheat, while another 500,000 are expected to be reclaimed next year. On June 12th, the Minister of Agriculture and Land Reclamation El-Said El-Qosair revealed that Egyptian agricultural exports reached a volume of 3.5 million tons (Mt) during the period from January 1st 2022 until June 11th. (Arab Finance)
The value of mutual agreements signed between private sector companies in Egypt and Saudi Arabia amounted to nearly 7.70 billion USD, Majid bin Abdullah Al Qasabi, the Saudi Minister of Commerce, noted.
Egyptian and Saudi private firms have penned 14 memoranda of understanding (MoU) in several fields; petroleum, renewable energy, green hydrogen, information technology (IT), electronic commerce (e-commerce), pharmaceuticals, infrastructure, and cybersecurity. It is worth noting that around 802 Egyptian companies invested 5 billion USD in the Saudi market, while 32 billion USD worth of investments were pumped in Egypt through 6,800 Saudi companies. (Mubasher)
Total trade exchange between Egypt and Saudi Arabia recorded 6.194 billion SAR at the end of April 2022, up 65.57% from the year-ago period, according to data released by the Saudi General Authority for Statistics (GAS) on June 23rd.
Saudi exports to Egypt increased to 4.137 billion SAR at the end of April 2022 from 2.705 billion SAR at the end of April 2021. Saudi imports from Egypt surged to 2.056 billion SAR April-end from 1.036 billion SAR in the same month a year earlier. During April, the total international trade of the kingdom amounted to 192.394 billion SAR. Furthermore, Saudi Arabia’s balance of trade registered 81.845 billion SAR at the end of April. On June 21st, Egypt and Saudi Arabia signed 14 investment agreements worth 7.7 billion USD. (Arab Finance)
More steps towards Europe, Minister of Trade and Industry Nevine Gamea has signed a memorandum of understanding (MoU) with Secretary-General of the Arab-German Chamber of Commerce and Industry Abdulaziz Al-Mikhlafi for the opening of a regional office of the chamber in Cairo.
With a five-year term, the agreement reflects a belief from the Egyptian and German governments in the importance of private sectors in both countries. We believe the main purpose of the opening of the new office is the representation of the Arab-German chamber in the commercial promotion and economic cooperation between Egypt and Germany. The new commerce chamber will undertake a set of activities to achieve its objectives including communications with counterpart Egyptian institutions and authorities and businessmen to establish commercial and investment communication channels between both countries. (Al Mal)
Moving to our EGX and companies talks, Hassan Allam Utilities, the investment, and development, an arm of Hassan Allam Holding, is holding a stake of around 25% of the new wind power project planned to be built in Suez Gulf and Gabal El Zeit.
The project will be executed in partnership with Saudi Arabia’s ACWA Power which holds 75% of the project. The project will be financed through a mixture of capital and long-term loans from development finance sources, including the International Finance Corporation (IFC), Asian Infrastructure Investment Bank, and the European Bank for Reconstruction and Development (EBRD), Wahba revealed. (Asharq Business)
The project will be among the biggest wind power projects in the world and will use turbines with blades that reach a height of around 220 meters.
Upon completion, the project would cut 2.4 million tons of carbon dioxide emissions annually and provide electricity to more than one million residential units. The financial closure of the project is expected to take place by the third quarter (Q3) of 2024. It is slated for commercial operations by the end of 2026. On June 21st, a deal was signed between ACWA Power and Egyptian Electricity Holding Co (EEHC) to generate clean energy from wind turbines with a capacity of 1,100 megawatts. (Asharq Business)
Alexandria Container and Cargo Handling Company (ALCN) has reported a 33.8% year-on-year (YoY) increase in net profit after tax during the period from July 1st 2021 until May 31st 2022.
The company’s profits after tax grew to 1.705 billion EGP in the 11-month period ended May 31st, compared to 1.274 billion EGP in the comparative period of fiscal year (FY) 2020/2021. Revenues amounted to 2.442 billion EGP in the 11-month period ended May 31st from 2.156 billion EGP in the same period the FY before. Alexandria Container is an Egypt-based company that specializes in containers and cargo handling in Egyptian ports. (Arab Finance)
El Nasr For Manufacturing Agricultural Crops (ELNA) has widened its net loss after taxes by 26.35% year-on-year (YoY) during the year starting from April 1st 2021 until March 31st 2022.
In the 12-month period ended March 31st 2022, ELNA’s net loss after taxes stood at 5.37 million EGP from 4.25 million EGP in the same period a year earlier. El Nasr for Manufacturing is an Egypt-based public shareholding company that operates in the food processing sector. It is primarily engaged in the dehydration, distribution, and export of agricultural crops, including onions and other vegetables. The company is also engaged in the manufacture and export of dehydrating equipment and machinery. (Al Mal)
Misr Chemical Industries Company (MICH) reported a 45.9% year-on-year (YoY) increase in net profits for the first 11-month period of fiscal year (FY) 2021/2022.
Net profits amounted to 188.83 million EGP in the period from July 2021 until May 31st 2022, compared to profits of 129.402 million EGP in the same period of FY 2020/2021. Misr Chemical Industries owns a manufacturing plant that produces a range of chemical products including liquid caustic soda, caustic soda flakes, liquid chlorine, hydrochloric acid, and bleaching powder. (EGX)