President Abdel-Fattah El-Sisi inaugurated yesterday, the food industrial city “Silo Foods” in Sadat City

Newsletter

04 Aug 2021

For our top talks today, first, President Abdel-Fattah El-Sisi inaugurated yesterday, the food industrial city “Silo Foods” in Sadat City, and a number of other projects in the Delta citie. Silo Foods, built over 135 feddans, includes 10 factories for the production of 40 products with a combined output capacity of 470,000 tonnes per year.

Also, El-Sisi stated that it's time to increase the price of the subsidized bread adding that the country plans to raise the wheat storage capacity by 1.8 million tons in the next period, noting that the strategic reserve of wheat is sufficient for 6.5 months only.
Here it is worth mentioning that the state subsidizes a loaf of bread with about 53 billion EGP providing about 120 billion loaves of bread annually for the benefit of citizens.
Second, Egypt is expected to witness foreign inflows worth around 3 billion USD to 4 billion USD into the bond market in the second half of 2021. We believe that the portfolio flows are projected to see significant recovery over the coming six months if Egypt settled its debts with Euroclear Bank and if the country’s local-currency bonds got re-listed onto JPMorgan’s emerging-market sovereign bond index later this year.
It will be announced by October whether Egypt would be included in the index, which is expected to generate 1.4 billion USD to 2.2 billion USD in inflows into EGP-denominated debt.
Third, it is worth noting that the improvement in purchasing power conditions, supported by the calming of the effects of the Corona virus and the start of recovery cases in the market prompted Edita to achieve a significant boom in sales and profitability during the second quarter of this year.
The company achieved sales of 1.2 billion EGP during the second quarter of 2021, with a growth of 50% compared to the same period of 2020, during which it recorded about 769 million, while the net profit doubled by more than 7 times, by 782%, to reach 94 million EGP, compared to 10.7 million for the same period last year. It is noteworthy that the board of directors of Edita recently decided to increase the capital of its subsidiary in Morocco by 15 to 60 million MAD (105.8 million EGP), in order to finance the company's operations, increasing its contribution from 50% to 76%.
Equally important, the Nirk Railway Industries Factory plans to manufacture the first electric vehicle in the middle of next year and supply it to the Ministry of Transport.
The company aims to deepen and localize the railway industry in Egypt and to receive international companies who possess technology in the manufacture of railway vehicles and their accessories and produce them locally by up to 40%. The investment cost of the project is estimated at about 240 million USD.
Moving to investments talks, CDC Group revealed its intention to invest about 1 billion USD in the African continent this year.
Stressing on that Egypt was one of the countries that witnessed the injection of investments by the group in those years. Noting that the group's investments in Egypt local market currently amounted to about 300 million USD, adding that this value was distributed among a group of different deals, topped by the Alpha Medical Group deal worth 100 million USD. We believe this proves that Egypt is an attractive destination with many distinguished opportunities.
In the light of companies talks, Komen Insurance Brokerage Group has started its activities in Egypt, after its acquisition of MGM, and it plans to break into two new markets by next year. We strongly believe that the Egyptian insurance market is one of the most promising markets in the region, witnessing a remarkable development during the coming period.
However, the sector faces some challenges mainly are; the growth of insurance awareness and the increase in reliance on modern technology and the orientation of the state and the Egyptian economy towards digital transformation and financial inclusion, to attract a new segment of insurance customers through modern technological applications such as “mobile application”.
By the same token, Oden for Financial Investments intends to increase the size of the Equity Investment Fund (Kasab) to 200 million EGP as a first stage by the end of the current year 2021, in cooperation with the Saudi Kassab Corporation.
It is worth mentioning that the company intends to establish new investment funds during the coming period, in the fields of financing small projects and financial technology, in addition to the existing Egyptian Real Estate Fund.
Bouncing back to our latest COVID talks, the International Monetary Fund (IMF) is allocating 650 billion USD in special drawing rights (SDRs) to support emerging economies struggling with the impact of COVID-19 due to the increasing global concerns about the new delta variant.
It is threating to weaken the economic recovery, warning that vaccines alone would not ensure a smooth path to economic normalcy. As a result, rising concerns about the delta variant of COVID-19 look to be seeping into volatility markets adding that delta is also messing with oil prices, as the new variant’s impact on demand across the Asia-Pacific region made itself felt in a price drop following two weeks of gains. Also, the IMF is warning that widespread use of crypto assets in nations would threaten “macroeconomic stability” and harm financial integrity.