Egypt’s unemployment rate declines to 7.3% in Q2-2021
For our hottest news of the day, Egypt’s unemployment rate declines to 7.3% in Q2 2021 compared to 7.4% in Q1 2021 and 9.6% in Q2 2020 according to the latest data provided by the Central Agency for Public Mobilization and Statistics (CAPMAS). The total number of employees fell by 0.6% to 29.1 million in the April-June period compared to 29.28 million in the January-March period. The development of the state’s mega-projects contributed to the fall in the unemployment rates. We believe the unemployment rate is set to fall further in the near future as the tourism industry recovers from covid travel restrictions particularly following the return of the Russian flights.
- Second, The Central Bank of Egypt (CBE) is set to offer treasury bonds (T-bonds) worth 11 billion EGP on behalf of the Ministry of Finance, with the first tranche to be offered through 91-day notes valued at EGP 6 billion and the second tranche to be offered through 273-day notes valued at 5 billion EGP.
Egypt has been witnessing strong capital inflows recently with the latest issuance oversubscribed 4.83x, the highest level of subscription in 2021 due to the attractiveness of the local debt to international investors with Egypt having one of the highest carry trades compared to other emerging countries. The proceeds from the issuance will be used to finance the state’s budget deficit.
- Third, Following news of Swvl’s highly-anticipated listing on NASDAQ exchange, the company is expected to turn profitable in 2024 with plans to expand operations to 30 cities in 20 countries.
Moreover, Swvl has plans to venture into other activities such as logistics, advertising, and financial services by the end of 2023 according to Youssef Salem, the company’s chief financial officer. The company expects revenue to surpass 1 billion USD by 2025 compared to 26 million USD recorded in 2020. Swvl currently has a network of 5,000 buses of which 3,000 are in Egypt.
- On another note, TAQA Power, a subsidiary of TAQA Arabia, has signed a memorandum of understanding (MoU) with the Germany-based MAN Energy Solutions, regarding a pilot project for producing green hydrogen locally to fuel tourist buses in Egypt.
The two companies will collaborate on conducting a feasibility study on employing electrolysis for a hydrogen production project over the next six months.
- Moving on to the M&As, Abu Dhabi Islamic Bank Egypt (ADIB) approves the mandatory tender offer (MTO) submitted by Tycoon Holding for the purchase of 90% of the shares of Alexandria National Company for Financial Investment for 6.25 EGP per share.
ADIB Egypt's total shareholding in the company is 84.99% with a direct stake equal to 9.04% and an indirect stake of 75.95%. In H1 2021, ADIB Egypt recorded a net profit of 680 million a 28% y-o-y increase from 530 EGP.
- By the same token, The Administrative Capital for Urban Development plans (ACUD) to offer shares in an initial public offering on the Egyptian Stock Exchange within the next two years.
ACUD’s currently has assets under management exceeding 3-4 trillion EGP with liquid assets worth more than 100 billion EGP. The Armed Forces own a 51% stake in ACUD with the remaining 49% stake held by the Ministry of Housing, Utilities, and Urban Communities.
- Equally important, Coca-Cola Hellenic Bottling Holdings BV (CCH Holdings), a wholly-owned subsidiary of Coca-Cola HBC, has reached an agreement to acquire up to 94.7% of Coca-Cola Bottling Company of Egypt S.A.E (CCBCE) from its major shareholders, the Coca-Cola Company (TCCC) and MAC Beverages Limited (MBL), for 427 million USD.
The acquisition marks Coca-Cola HBC’s entry to Egypt’s non-alcoholic ready-to-drink market, the second-largest in Africa. The company’s product portfolio includes Coca-Cola, Sprite, Fanta, Schweppes, Crush, and Dasani water.
- With regards to companies’ coverage, Ghabbour Auto (GB Auto) reported after-tax net profits of 673 million EGP in H1 2021 compared to 254 million EGP in H1 2020.
Total sales revenue jumped by 42.2% year-on-year (YoY) to EGP 14.09 billion during the January-June period of 2021 from EGP 9.91 billion. GB Auto is an Egypt-based automotive company, which operates in trading, distributing, and marketing all transportation means, including heavy trucks, semi-trucks, passenger cars, buses, agriculture tractors, and pick-ups.
- Finally, for Covid’s Watch, Egypt has received 766,400 doses of AstraZeneca vaccine under the COVAX Program in collaboration with the Global Vaccine Alliance (GAVI).
This is the third shipment of the 40 million doses of AstraZeneca vaccine Egypt is allocated to receive. Ministry of Health Spokesman confirmed the availability of AstraZeneca, J&J, Sinovac, Sinopharm, and Sputnik vaccines at the various vaccination centers across the nation.
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