Egypt has steadfastly faced the Covid-19 crisis to become one of the few countries in the world capable of achieving a growth rate of 3.3% in 2021

Newsletter

24 Nov 2021

For our top macro talks today, first, Dr. Hala Al-Saeed, Minister of Planning and Economic Development stated that Egypt has steadfastly faced the Covid-19 crisis thanks to the reforms implemented since 2016, to become one of the few countries in the world capable of achieving a growth rate of 3.3% in 2021, and despite the economic repercussions of the Corona epidemic, economic growth is expected to rebound strongly to 5.6% in the 2021/2022 fiscal year. Al-Saeed stressed the importance of political stability as a condition that precedes investment, explaining that ending the state of emergency in all parts of Egypt is a reflection of the country’s stability and its attractiveness to international investment. Noting that Egypt managed to rise in the Doing Business Index for the year 2020 issued the World Bank ranked six places to reach 114 out of 190 countries. (Egypt Ministry of Planning and Economic Development)

Second, Dr. Rania Al-Mashat, Minister of International Cooperation, announced the approval of the Board of Executive Directors of the Asian Infrastructure Investment Bank, to finance development policies for Egypt with a value of 360 million dollars,
to support the state’s efforts to achieve recovery from the Corona pandemic and strengthen the economic and structural reform program. Thus, development partners (the World Bank and the Asian Infrastructure Investment Bank) have agreed to provide about 720 million USD, within the framework of financing development policies, at 360 million USD from each institution. (Mubasher)
And for the top talks abroad, the United States will release 50 million barrels of crude from the U.S. Strategic Petroleum Reserve to help cool oil prices, that will start hitting the market in mid- to late-December.
The release is being in made concert with other releases from strategic reserves by China, India, South Korea, Japan and Britain. The move is likely to draw the ire of the Saudi-led OPEC group of oil exporting nations, which has repeatedly ignored calls from the US and other countries to up supply as demand rebounds following the pandemic. (Reuters & Bloomberg)
Equally important, according to the Wall Street Journal, over his first term in office, Jerome Powell became arguably the most dovish chairman in the Federal Reserve’s modern history, giving priority to full employment in an era in which inflation seemed extinct.
In his second term, he may have to execute the reverse: giving priority to inflation at the risk of sacrificing jobs. The pivot could be painful for both Mr. Powell and President Biden. On Monday, Mr. Biden praised Mr. Powell for his commitment to “maximum employment” so that “American workers get steady wage increases after decades of stagnation, and…the benefits of economic growth are broadly shared.” Yet economic conditions have been substantially reordered in just the past year. Inflation, at 6.2%, is its highest in 31 years. While employment remains 4.2 million below its pre-pandemic peak, labor shortages are widespread, and wage growth is accelerating. All that threatens the Fed’s 2% inflation target. (Wall Street Journal)
Moreover, Turkey's lira nose-dived nearly 9% after President Tayyip Erdogan defended recent sharp rate cuts and vowed to win his "economic war of independence" despite widespread criticism and pleas to reverse course.
The lira tumbled to as low as 12.49 to the dollar, plumbing record troughs for an 11th straight session. It has lost 40% of its value this year, including a near 20% decline since the beginning of last week. Erdogan has applied pressure on the central bank to pivot to an aggressive easing cycle that aims, he says, to boost exports, investment and jobs - even as inflation soars to near 20% and the currency depreciation accelerates, eating deeply into Turks' earnings. (Reuters)
On the other hand, the Board of Directors of CMA CGM Group, the owner of the fourth global shipping line in the field of shipping and logistics, expected that the pressure on the effective shipping capacity of consumer goods that was observed since the summer of 2020 will continue until at least the first half of 2022.
Noting that the group will continue to invest in strengthening and modernizing the shipping and logistics network while strengthening its financial structure. During the third quarter of 2021, the group transported 5.5 million TEUs, a decrease of 2.5% compared to the third quarter of 2020, when global trade rebounded significantly after the end of the closures related to the repercussions of the Corona virus, and the impact on the congestion situation affecting port terminals and internal infrastructure, resulting in longer transit times for ships. (Reuters)
Moving to our EGX & companies talks, the Sixth of October Development and Investment Company (SODIC) has set the validity period of the UAE purchase offer for shareholders at ten working days, starting from November 24 and ending on December 7.
SODIC announced, on Monday, the issuance of the approval of the Financial Supervision on the offer submitted to acquire it by the Emirati Aldar Real Estate Company at a price of 20 EGP per share. The offer aims to purchase 320.5 million shares, representing 90% of SODIC shares as a maximum or 51% as a minimum, suspended at a cash price of 20 EGP per share. (Al-Mal)
By the same token, Jumia, the leading e-commerce platform in Egypt, Jumia Pay, and Valeo, the leading Buy Now and Pay Later (BNPL) platform in the Middle East and North Africa, have signed joint cooperation agreements
with the aim of providing the opportunity for Valeo to become a payment tool through the Jumia Pay platform that will allow Valeo to be present on the Jumia Pay platform and Jumia ebay. The partnership allows Jumia Pay to manage the payment operations of Valeo customers by technically linking the Valeo platform and Jumia Pay for electronic payment services. (EGX)
In addition, Egypt Education Platform (EEP) intends to expand in western Cairo by opening the “Hayat West” school within Mountain View iCity in Sheikh Zayed, on an area of 40,000 square metres.
Ahmed Wehbe, Executive Director of the "Egypt" platform for education, revealed that the process includes the opening of a new school during September 2022 under the name "Hayat West", which will be the first presence of the platform's "Hayat" Academy in western Cairo. It is noteworthy that the Misr Education platform had previously acquired a controlling stake from Option Travel, which operates in the private transportation sector, and was preceded by the acquisition of 4 schools in the Al-Rehab and Madinaty projects, in addition to launching the development and construction operations for a fifth international school in Al-Rehab city. (Al-Mal)
Also, Haitham Sabry, CEO of El Sewedy Capital, said that it is negotiating with local investors to enter into a partnership for the purpose of establishing a consumer finance entity.
He added that El Sewedy Capital intends to apply to the Financial Supervisory Authority in order to obtain a license to practice the activity before the end of this year, pointing out that it aims to complete the incorporation procedures and start the actual activity during the first months of next year. Moreover, Sabry indicated that El Sewedy Capital intends to inject initial investments in establishing a consumer finance company at a rate of 50 million EGP, in contrast to the partnership it is currently discussing with a strategic investor in the sector. (Al-Mal)
On the other hand, Hans Paints aims to increase its sales in the local market to 140 million EGP during the next year, compared to 40 million EGP by the end of 2021, through participating projects and agent outlets.
Hans' sales in the local market are divided into sales of projects being implemented by the government and the private sector, including "the Educational Building Authority, Armed Forces hotels, military works, a decent life initiative and others", in addition to sales of authorized merchants’ outlet. (Al-Mal)
And finally, for our EGX news, first, the share of e-finance for financial and digital investments rose by 11% since November 16 until the 22nd session of the same month, outperforming the technology and communications sector and the main stock indexes EGX30 and EGX70.
The performance indicators of the e-finance stock revealed high capabilities in facing the waves of profit-taking during the last weeks of the Egyptian Stock Exchange's trading. The stock showed a state of cohesion for long sessions that witnessed a general decline of various stocks and indices, while the stock was slightly affected by profit-taking operations in some sessions, to re-rise quickly again, in light of the great demand from foreign institutions. The stock continued its rise during the trading session on Monday, November 22, to close at EGP 18.83, up 1.9% during the session and 11% since the November 16 session. (EGX)
Second, the Prime Minister Dr. Mostafa Madbouly revealed the government's intention to offer 5 or 6 new companies on the Egyptian Stock Exchange before the end of the current fiscal year.
The Prime Minister stressed the government's awareness of the importance of increasing public companies' offerings in order to enhance the role of the stock market, develop, and revive the movement of capital flow and trading in the Egyptian Stock Exchange, and raise market capital to be more attractive to investors.