“A Managed Floating Exchange Rate is the most recommended option and the simplest to implement for the CBE at the moment”

Newsletter

05 Sep 2022

“A Managed Floating Exchange Rate is the most recommended option and the simplest to implement for the CBE at the moment” Said Aya Zuhier, Deputy Head of Research at Zilla Capital. She added that the Egyptian Pound is currently facing several burdens due to a decrease in foreign currency revenues as a result of the Russian-Ukranian Crisis and enforcing new measures to limit imports within the Egyptian economy which eventually cased a shortage in several goods and services within the economy and would also cause an increase in demand on foreign currency. Aya Clarified that the CBE may implement one of two strategies, Firstly, the recommended startagy is following a managed floating exchange rate, in order for the CBE to control the price of the EGP against the USD and limit both inflation levels and Foreign Currency Reserves. Secondly, the CBE could follow a Free Floating Exchange Rate to align with the demands of the International Monetary Fund as Egypt is willing to obtain a Second IMF loan in Order to be able to cover its balance deficit and debt payments. However, this option would increase inflation levels and have other negative concequences given the current decrease in forrign currency revenues. (Hapi Journal, Zilla Capital)

Egypt annually spends over EGP 100 million (approximately $5.2 million) to offer family planning methods for free or at lowered prices,as the country seeks to lower its population growth.
The figure does not include awareness raising campaigns, Hossam Abdel-Ghaffar, a spokesman for the country's Ministry of Health and Population, said in a TV interview with CBC channel. The country has established 5,043 medical units to provide reproductive health services nationwide, the spokesperson pointed out. Egyptian officials have repeatedly underlined the negative impacts of overpopulation on development efforts. The country's 103-million-plus population is estimated to grow to 153.7 million by 2050, which would require the state to double its infrastructure projects and development spending over the coming 30 years. The population has increased by 14 million in just the past seven years. In recent years, several steps have been taken to tackle the consequences of overpopulation. In 2020, Egypt launched a two-year initiative called "Two Is Enough" to encourage families to have fewer children. Last year, the health ministry began providing all forms of contraception to women free of charge. In late February, Egyptian President Abdel-Fattah El-Sisi launched the National Project for Developing the Egyptian Family, which tackles the health, social, family and economic dimensions of the crisis. The Egyptian president has repeatedly warned against the negative impacts of overpopulation, calling on the government to lower the growth rate in order to allow citizens to benefit from the fruits of development efforts. (Al Ahram)
The board of directors of Eastern Company has approved the new consumer sale prices on the company’s cigarette products.
The price hike was put into effect starting as of 4 September 2022, according to a stock exchange statement on Sunday. The price of the item Box 10 was raised to EGP 13, Cleopatra King Size to EGP 20.50, Cleopatra Soft Queen to EGP 21, and Boston/Belmont to EGP 22. Additionally, the company increased the price of the item Cleopatra Box (white - colors) to EGP 22, Cleopatra Super to EGP 23, Mondial (red – blue – silver) to EGP 23, Mondial Switch (menthol – blueberry) to EGP 24, Cleopatra Black to EGP 24, and Matossian Super to EGP 24. (Mubasher)
US Special Presidential Envoy for Climate John Kerry will visit Cairo on 7-8 September to continue ongoing discussions with government and private sector counterparts on accelerating global climate cooperation ahead of COP2.
Kerry's visit to Cairo is set to take place as Egypt continues intensive consultations with international partners to push for urgent climate action ahead of the 27th Conference of the Parties to the UNFCCC (COP27) that the country is hosting from 6-18 November in Sharm El-Sheikh. According to the press release, Kerry will also participate in the second edition of the Egypt-International Cooperation Forum (Egypt-ICF) 2022 and Meeting of the African Ministers of Finance and Environment, after his visit to Cairo, Kerry will head to Glasgow, United Kingdom on 9 September to engage business and NGO leaders on efforts to enhance global climate action and accelerate the clean energy transition, the released added. John Kerry, a former US Secretary of State 2013-2017, was appointed by President Joe Biden as the first US Special Presidential Envoy for Climate in January 2021. (Al Ahram)
Egyptian government affairs agency N Gage and sustainability consulting firm DCarbon entered into a partnership to help companies in Egypt and the Middle East and North Africa region to implement climate and sustainability pledges.
The partnership will help companies apply policies that lead to the realization of net-zero carbon goals. "The need for solutions that address the challenges we face globally on the climate and sustainability fronts is imminent and we share a genuine belief that sustainability today should transcend pledges, and that action towards climate change mitigation should top public and private policy agendas,” Chairman and CEO of N Gage Karim Refaat noted. "Driven by the momentum and impact of COP 27, I expect an exponential rise in financing towards climate change mitigation in Egypt and across the region by over 100%," Chairman of DCarbon Egypt Ehab Shalaby said. It is worth noting that the Egyptian city of Sharm El-Sheikh is set to host the 2022 United Nations Climate Change Conference (COP27) in November. (Arab Finance)
valU, a subsidiary of EFG Hermes Holding (HRHO), and PayTabs Egypt partnered with notchnco to unlock an outstanding WhatsApp shopping experience for valU’s clients.
Through this collaboration, valU aims to benefit from WhatsApp’s Application Programming Interface (API) for the first time in Egypt via an automated workflow developed by notchnco, while handling payments through PayTabs Egypt’s digital solutions. notchnco’s chatbot software for WahtsApp will give valU access to target different consumer groups with designed offers matching their interests. Currently operating in both Abu Dhabi and Cairo, notchnco seeks to utilize artificial intelligence (AI) and machine learning technologies to serve the customer’s experience through its patented omni-channel platform and humanized chatbot software. (Arab Finance)
Upon the directive of Grand Imam Ahmed El-Tayyeb, the Egyptian Zakat and Charity House recently sent tens of tons of foodstuffs and medicines to Sudanese residents who were affected by the devastating floods.
The aid shipment, which has already arrived, was sent in coordination with the Egyptian embassy in Khartoum by the Al-Azhar charity under the supervision of El-Tayyeb to support the country’s brothers in Sudan to overcome the repercussions of this ordeal. Flash floods triggered by heavy monsoon rains across much of Sudan have killed more than 100 people and injured nearly as many since the start of the rainy season in May. As many as 258,000 people have been affected by floods in 15 of Sudan's 18 provinces as downpours wrecked many villages and left tens of thousands of acres of land flooded, according to the UN. The aid to Sudan included tens of tons of flour, pasta, sugar and canned foodstuffs, as well as thousands of relief items, including mattresses, blankets, medicines and medical supplies. (Al Ahram)
Now to EGX and Company News The Financial Regulatory Authority (FRA) has approved publishing the disclosure form submitted by the General Company for Silos and Storage regarding a capital hike request.
The company will raise its issued and paid-up capital by EGP 25 million to EGP 125 million from EGP 100 million, according to an official statement on Sunday. The capital increase will be distributed over 2.5 million shares at a nominal value of EGP 10 per share. It is worth noting that during the period from July 2021 to May 2022, the EGX-listed firm registered EGP 103.03 million in net earnings, compared to EGP 94.27 million in the year-ago period. (Mubasher,EGX)
The Egyptian Exchange (EGX) has announced a block trading deal worth EGP 21.19 million on the shares of the Housing and Development Bank (HD Bank).
The block trading deal was implemented on 495,888 of HD Bank's shares, according to a bourse disclosure on Sunday. It is worth pointing out that in the first half (H1) of 2022, HD Bank reported higher consolidated net profits by 29.9% annually to EGP 1.30 billion, compared to EGP 1 billion, including minority shareholders’ rights. (Arab Finance, EGX)
Egypt’s Middle East Carbon Company plans to increase its export volume from carbon used in the iron and steel industry to $50 million by the end of this year, compared to $20 million in 2021.
The company’s chairperson, Walid Abu Raya, said the firm’s investments in Egypt exceeded EGP 500 million, highlighting that the factory’s presence in the free zone mandates exporting over 50% of production at least, according to a statement. He added that the factory exports about 80,000 tonnes a year out of 140,000 tonnes to the Middle East and Africa region, noting that the most prominent companies to which it exports are Bahrain Steel, Emirates Steel, Kuwait Steel, Sohar Steel, Oman’s Jindal Shadeed, in addition to Saudi Arabia’s Rajhi Steel and SABIC, and Foulath in Tunisia. (Mubasher,EGX)
The Abu Dhabi Islamic Bank-Egypt (ADIB Egypt) has received the Financial Regulatory Authority’s (FRA) approval to proceed with the capital raise procedures.
The FRA agreed to publish the disclosure form submitted by the bank to raise its issued and paid-up capital by EGP 1 billion to EGP 5 billion from EGP 4 billion. The capital increase will be distributed over 100 million shares at a nominal value of EGP 10 a share, according to a statement to the Egyptian Exchange (EGX) Sunday. The capital raise procedures cannot be completed before endorsing the previous EGP 2 billion capital hike in the commercial register. (Mubasher,EGX)