The CBE is likely to keep the interest rates fixed and unchanged

Newsletter

18 Aug 2022

Today is the day, it’s interest rates day after El-Sisi appointing Tarek Amer as presidential adviser. The Central Bank of Egypt (CBE) is likely to keep the interest rates fixed and unchanged after the surprising changes and specially no one is assigned yet as the governor of the CBE. Last week, we expected that the CBE will resume its tightening cycle and raise rates for the third time since March when it meets this Thursday in a bid to curb down on inflation and support the EGP. We believed that the Monetary Policy Committee (MPC) will raise rates by around 0.5 bps to 100 bps. The overnight deposit rate currently stands at 11.25%, and the lending rate is 12.25%, while the main operation and disc. rates are at 11.75%. The bank’s monetary policy committee (MPC) has hiked rates by 300 bps since March, but chose to leave them unchanged during its latest meeting in June, after inflation in May came in below expectations. (Zilla Capital)

Hassan Abdullah and Hisham Ezz Al-Arab are closest to the position of Central Bank Governor.
During the past hours, the names of a number of prominent economic and banking figures known for their efficiency were mentioned to assume the position of Governor of the Central Bank, including Dr. Hala Al-Saeed, Minister of Planning and Economic Development, Dr. Rania Al-Mashat, Minister of International Cooperation, Hisham Okasha, President of the National Bank of Egypt, and Mohamed El-Atreby, President of the National Bank of Egypt. Egypt, Tarek Fayed, President of Banque du Caire, and Nidal Aser, Managing Director and CEO of the Egyptian Gulf Bank, along with Abdullah and Ezz El-Arab. (Hapi Journal)
The Central Bank of Egypt (CBE) collected 100 billion EGP from local banks in the weekly open market operations (OMO) auction at a fixed rate of 11.75%.
The offered bids amounted to 449.1 billion EGP, CBE’s data showed. Moreover, the auction’s maturity date is August 23^rd On August 15th, the CBE announced the issuance of treasury bonds (T-bonds) worth 11 billion EGP in an auction. (CBE)
Forget about inflation. Amid the rising commodity prices, some manufacturers are quietly shrinking their package sizes while maintaining prices.
Dubbed as “shrinkflation”, the phenomenon is accelerating globally and the Egyptian market is no exception. shrinkflation is not the only way ahead, as companies can have other options in meeting the ideal price point. There are multiple ways to reduce the costs before shrinking the product, from cutting the packaging costs to reducing shipping fees. Egypt's annual headline inflation recorded 14.6% in July 2022, compared to 6.1% in the same month of 2021. (Zilla Capital)
For our green energy talks, SCZONE, Toyota Tsusho ink MoU for renewable energy projects.
Chairman of the General Authority for the Suez Canal Economic Zone (SCZONE) signed a memorandum of understanding (MoU) with Toyota Tsusho Corporation, a member of the Japanese manufacturer Toyota Group, for cooperation in a set of projects pertaining to infrastructure and green energy. The protocol includes exploring cooperation in the fields of infrastructure, carbon neutrality, logistics, renewable energy, water, and green and blue hydrogen and ammonia. (Arab Finance)
Egypt executes 35 projects in Sharm El-Sheikh ahead of COP27.
The Egyptian government is executing 35 projects in Sharm El-Sheikh ahead of the UN Climate Change Conference 2022 (COP27). The projects include the development of the central garden according to sustainability standards, along with the launch of a group of green sustainable hotels, transition to electric transport, and switching to the use of new and renewable energy. It is worth noting that COP27 is set to take place in Sharm El-Sheikh from November 7th to 17th. (Arab Finance)
Egypt's trade balance deficit fell 35.8% to 2.6 billion USD in May 2022.
The deficit amounted to 2.61 billion USD in May, compared to 4.06 billion USD in the same period last year, supported by an increase in exports and a decline in imports. Egypt's total exports rose 18.3%, recording 4.01 billion USD in May, compared to 3.39 billion USD in the same month a year ago, while total imports fell 11.1%, to 6.62 billion USD, compared to 7.45 billion USD a year ago. (Hapi Journal)
Egypt’s manufacturing, extractive industries index grows 3.9% MoM in May.
Egypt's manufacturing and extractive industries index (excluding crude oil and petroleum products) rose 3.91% month-on-month (MoM) to 113.27 in May 2022 from 109.01 in April. The beverages industry index surged 30.2% MoM to 262.81 in May, while the food production industry index inched up 3.26% MoM to 151.66 in the same month. It is worth noting that the manufacturing and extractive industries index (excluding crude oil and petroleum products) declined by 8.77% MoM to 108.96 in April 2022. (CAPMAS)
Moving to our EGX and companies talks, FRA issues securitization bonds worth half a billion pounds to one of the consumer finance portfolios.
The Financial Supervisory Authority has approved the issuance of EFG-Hermes securitization company, nominal securitization bonds in exchange for financial rights and post-paid receivables belonging to a “consumer financing portfolio” amounting to 532.6 million EGP. This represented the second issue of EFG-Hermes' second securitization program, worth 2 billion EGP, allocated to consumer finance portfolios referred by Valu consumer finance company. (Al Mal)
Palm Hills Development achieves 558.5 million EGP in consolidated profits in the first half, an increase of 21%.
The company recorded total new sales of 10.7 billion EGP during the first half of this year, compared to 7.7 billion EGP, an increase of 38% on an annual basis. The growth in total sales is attributed to the increase in selling prices accompanied by a growth in the number of units sold during the period, as the number of units sold increased by 33% on an annual basis to reach 1,872,000 units during the first half of this year, compared to 1,408 thousand units sold during the same period last year. (EGX)