Egypt’s annual headline inflation rate recorded 7.3% in October
For our top talks today, first, Egypt’s annual headline inflation rate recorded 7.3% in October, compared to 4.6% in the same month a year earlier and 8.0% in September 2021. Month-on-month (MoM), the consumer price index (CPI) rose by 1.7% to 118.0 points during October. It is worthy to mention that resurgent consumer demand, supply chain bottlenecks and rising energy costs are pushing prices higher around the world. Moreover, it’s US CPI day and, ahead of that, very hot PPI data out of China. Annual PPI inflation there came in at a notable 13.5% in October, the highest reading since 1995. This compares to a median forecast of 12.4% and last month’s 10.7%. (A-Mal)
- Second, the price of the dollar rose slightly against the major currencies during trading yesterday, Wednesday, after falling in the past three days,
as investors are reluctant to take risks ahead of the release of US inflation data that may shed some light on when the Federal Reserve may resort to raising interest rates. Economists polled by "Reuters" expect that consumer price index data, expected to be released later, will show prices rising at an annual rate of 4.3%, compared to the Federal Reserve's target level of 2%. The Federal Reserve - the US central bank - confirmed last week that it believes that the current high inflation is temporary, but many investors fear that playing down the price hike will lead to a costly policy error. (Reuters)
- Moreover, Egypt is expected to enjoy a “fresh economic face” by the end of the fiscal year (FY) 2021/2022,
where all ongoing projects to modernize and automate tax and customs systems will be completed and AI technologies will be integrated into government operations. Egypt aims to integrate informal activities in the domestic market, which represent 55% of Egypt’s total economy, into the formal economy. It is worth noting that the government is working on improving the investment climate, in addition to encouraging businesspersons to expand their projects in order to raise the private sector’s contribution in the country’s economy from 30% to 50% over the coming three years. (Egypt Ministry of Finance)
- Equally important, in response to the business community’s demands, the finance ministry has launched the fourth phase of the instant cash repayment system for exporters.
The new phase will allow exporters to obtain their dues from the Export Support Fund in order to provide the required cash liquidity to continue the production cycle. On the macroeconomic level, the ministry explained that Egypt was one of the top countries globally in terms of lowering the public debt-to-GDP ratio by 20% during the three years prior to the pandemic, recording 87.5% in FY 2019/2020, down from 108% in FY 2016/2017. Stressing that the government is adopting a medium-term strategy to continue the public debt downturn and bring it to 32% by the end of FY 2021/2022. (Al-Mal)
- Likewise, Luxor International Airport received yesterday the first flights of the Egyptian company coming from Sharm El Sheikh, carrying several nationalities.
It is noteworthy that the company will operate one flight per week every Wednesday during the winter season. The airport’s public relations team facilitated arrival procedures while applying all health and preventive controls to all passengers, as well as adhering to social distancing in order to preserve the safety and health of travelers and airport workers. (Arab Finance)
- Turning to our top talk abroad, the UAE Minister of State for Entrepreneurship and Small and Medium Enterprises Ahmed Al Falasi said at a conference in Dubai that his country aims to attract 20 emerging companies
from the so-called (unicorn) company by 2031. The Unicorn is a privately owned startup valued at more than 1 billion USD. And “unicorn” is a term given to emerging companies, and this term was used for the first time in 2013 by the American financial expert “Eileen Lee” in reference to the Silicon Valley companies that made a huge leap and the value of their shares exceeded the billion-dollar barrier. The most prominent unicorn companies are Uber, Xiaomi, Dropbox, Pinterest and Snapchat, and among the Arab companies are Souq.com and Careem. (Reuters)
- On the other hand, Abu Dhabi has proposed a regulatory framework that allows the inclusion of special purpose acquisition companies, or what is known as blank check companies,
which may open the door to deals directed to the Gulf that include companies of this type. This step will allow the listing of special purpose acquisition companies, and the framework will allow investors from outside the UAE to submit applications for approval to list their special purpose acquisition companies on the local stock exchange. (Reuters)
- And for our EGX & companies talks, Ghabbour Auto (GB Auto) has started to consider alternative sales strategies as the Egyptian government decided to ban the import of three-wheelers.
The company will work on identifying optimal adjustments to its product mix in order to protect the interest of its shareholders and mitigate the expected decline in performance. During the first quarter (Q1) of 2021, GB Auto recorded net profits of 349.52 million EGP, up from 216.15 million EGP in Q1-20, including minority shareholders’ rights. (Al-Mal)
- In the same fashion, Haitham Sadek, general manager and managing director of Danone Egypt and North Africa, said that the company's total investments exceed 1 billion EGP.
Adding that the effects of high freight prices and global supply chain confusion did not affect the company much, as it relies on 70% of local raw materials, while 30% is imported. He pointed out that the company aims to provide 100% of raw materials locally, in an attempt to reduce the negative effects of the high prices of raw materials globally. The company is interested in increasing its exports abroad in conjunction with the initiative to increase exports announced by the government, which will reach 100 billion USD in the coming year. (Al Borsa News)
- In addition, it seems that Telecom Egypt is the biggest winner from the offer received by Vodafone Group yesterday from its subsidiary “Vodacom” to transfer its 55% stake in Vodafone Egypt to Vodacom,
after announcing this morning the value of the potential deal, which amounted to 2.738 billion USD, an increase of about 14% of the value of the previous offer made by the Saudi Telecom Company, which amounted to 2.392 billion USD. With Vodacom’s commitment to all the terms of the amended shareholder agreement that was signed between the shareholders of Vodafone Egypt on June 7, 2021, Telecom Egypt retains many of the additional advantages and rights that it obtained in return for Vodafone Group obtaining the right to transfer the ownership of its stake in Vodafone Egypt within the Vodafone Group And it still has many options to ensure that it maximizes its investment. (Al-Mal)
- Furthermore, the African Export-Import Bank (Afreximbank) and the International Islamic Trade Finance Corporation (ITFC) have signed a 250 million USD agreement to provide funds to the bank to pay purchases of coronavirus vaccines and drive trade in Africa.
The ITFC facility will help strengthen the Bank's COVID-19 response program for countries in which both organizations operate, as well as secure commodities vital to the health of the local population and enable a faster return to economic activity. This facility will also enhance the Bank's ability to provide trade finance resources at a time of great need for export development and industrialization on the continent. (Al-Mal)
- Also, JUMO, the UK-based fintech company, plans to expand its footprints in Egypt. Earlier this month, the company announced raising 120 million USD in its latest funding round led by Fidelity Management & Research Company.
The funding round raised the company’s value to 400 million USD. The new fund will be used to scale its platform and fund an expansion to Nigeria and Cameroon. Currently, the platform is operating in in six African countries Ghana, Tanzania, Kenya, Uganda, Zambia and Ivory Coast, and Pakistan. JUMO would join a host of other fintech companies operating in Egypt, including Kashat, Khazna and valU as well as PayMob, Fatura, PayNas, Moneyfellows, ElGameya, and state-owned e-Finance. (Arab Finance)
- And finally, NHMC, working in the field of medical services, obtained approval from the New Urban Communities Authority, to allocate an area of 72 acres in the new city of El-Shorouk, for the purpose of establishing an integrated medical city.
The company is currently working on completing the licensing procedures, and it is expected that the construction work of the city will start in early 2022. (Al-Mal)
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