The Central Bank of Egypt will offer treasury bills worth EGP 18.5 billion

Newsletter

28 Jun 2021

First of all, regards our macro talks, the Central Bank of Egypt (CBE) will offer treasury bills (T-bills) worth EGP 18.5 billion on Sunday on behalf of the Ministry of Finance. The first tranche of the T-bills will be offered through 91-day notes valued at EGP 10.5 bn, while the second tranche is worth EGP 8 bn and will be offered through 266-day notes. We believe that the issuance will be used most probably to finance the country’s budget deficit. Noting that state-run banks are the top purchasers of government debt instruments.
Also, the Central Bank of Egypt (CBE) has revealed that the total financial position of banks operating in the local market, other than itself, increased to about EGP 7.554 tn at March 2021 end compared to the EGP 7.022 tn recorded in December 2020, reflecting an increase of about EGP 532bn.

Second, for our investment talks, Egypt Minister of Trade and Industry noted that the establishment of the Russian industrial zone in the Suez Canal Economic Zone (SCZone) is an initial step for attracting many Russian companies to invest in Egypt focusing on the fields of construction, auto parts, machinery, and natural gas tanks. Egypt has plans to become an auto assembly hub. It is worth noting that the Egyptian government is keen to prove a favorable investment climate to attract foreign investments to the Egyptian market.
In addition, for the New Administrative Capital (NAC) investments, we have first Marota Developments that plans to establish a commercial project in the Downtown area with target investments of EGP 1 bn. Second, Contact Developments launched the Quan Iconic Tower project with total investments of EGP 1.5 bn, located in the Central Business District. It is worthy to mention that the new hub is a sound investment decision for small and large businesses, as well as homebuyers due to its wonderful location which falls strategically close to Cairo, Sokhna, and Ras Sudr, being the hub of everything governmental.
Moreover, regards our trade talks, the Egyptian-British partnership will open the way to increase Egyptian food exports. This could potentially increase food exports by 50% during the year. This is the beginning of strong bilateral trade and investment. We believe this is a relatively easy market to get into because their standard does not differ from the European standard. The UK’s online supermarket sector is expected to grow by 52% by 2023.
Regards today’s M&A talks, a subsidiary of Abu Dhabi’s sovereign wealth fund ADQ is waiting for the approval of the Financial Regulatory Authority (FRA) to launch a mandatory tender offer for up to 100% of Bausch Health’s unit in Egypt, Amoun Pharma. The total value of the awaited transaction is expected to hit EGP 10.3 bn. ADQ is looking to offer EGP 37.8 per share for a total of 272.2 million shares through its subsidiary Ultra Welfare Limited.
Moving to companies’ performance, Misr Chemical Industries achieved net profits of EGP 129.402 mn during the first 11 months of 2020/2021, up by 157.5% from EGP 50.257 million in the year-ago period. It is worth mentioning here that global chemical production (excluding pharmaceuticals) is expected to grow by 4.4% in 2021, which is above average for the years prior to the coronavirus pandemic. This growth should be seen predominantly in emerging markets by around 5.4 % in 2021. And specifically, in Egypt, the chemicals sector is one of the most stable and oldest segments, noting that there are some interesting trends when it comes to new integrated chemical projects, such as in fertilizers.
Finally, for Egypt COVID vaccine’s last current status updates, Egypt received its first shipment of the Russian-made COVID vaccine. Egypt got around 210,000 doses of Sputnik V under an agreement with Russia to deliver 10 million doses of the jab. Minapharm is also set to manufacture some 40 million doses of the vaccine per year, with the first to be rolled out in Q3-2021. Most importantly, the Egyptian Minister of Health and Population, Hala Zayed, announced that travellers who are fully vaccinated against COVID will not be required to present a negative PCR test certificate upon arrival to the country.