The US Federal Reserve’s Open Market Committee continuing their two days meeting which will end today
For our top talks today, the US Federal Reserve’s Open Market Committee continuing their two days meeting which will end today, during which the Fed is widely expected to announce it will taper its bond-buying program at a faster rate and telegraph a planned interest rate hike next year. The meeting comes after US inflation soared to its highest annual pace since 1982. It is worthy to mention that if the Fed failed to demonstrate a credible understanding of inflation and act accordingly in a timely fashion, the Fed can itself be the cause of unanchored inflationary expectations. This creates a dynamic that is much more powerful and problematic than the original catalyst for inflation, which, in this case, is a sudden deficiency of aggregate supply because of supply chain disruptions and labor shortages. As inflation becomes higher and more durable than it would have been otherwise, the danger increases not just of an unnecessary economic slowdown but also an outright recession. Historically, this has been the result of the Fed having to slam on the policy brakes in a late and disorderly attempt to regain control of its credibility and its inflation mandate. (Bloomberg)
- From the previous point, it is worthy to mention that the outcome of the Fed’s meeting could play into the Central Bank of Egypt’s calculations on interest rates here at home when its monetary policy committee meets tomorrow.
It is expected that the CBE will hold rates steady at its final policy meeting of the year due to uncertainty over foreign inflows and inflation. The current account deficit widened by almost two thirds during FY 2020-2021 to 18.4 billion USD due to falling tourism revenues and rising imports. It is expecting it to narrow to 4.0% of GDP during the current FY from 4.8% in 2020-2021. (CBE)
- In addition, Egypt’s House of Representative will discuss amendments to the stamp tax law increasing taxes for exiting the country and on a number of services and commodities.
The amendments aim to increase the country’s revenues after they took a hit with the ongoing COVID-19 pandemic, which has affected a number of Egypt’s economic sectors negatively. The fee for departing the country will be increased to EGP 100, but it will remain at 50 EGP for foreigners visiting the Red Sea governorate, South Sinai, Luxor, Aswan, or Matrouh. All items, including alcoholic beverages, purchased from duty free zones will see a tax increase from 2% to 3%, with a minimum value of 1.5 USD. Non-honorary members of the diplomatic and consular corps are exempted from paying this tax. The new amendments also impose a 5% tax on all soda drinks and 2% on durable goods. (Al-Mal)
- On the other hand, Egypt announced a set of tax exemptions aiming to support the industrial sector and boost economic growth.
Amendments were made to the Value Added Tax (VAT) Law under the directives of President Abdel Fattah Al-Sisi. The amendments include the suspension of tax on imported machinery and equipment for industrial production for one year. In addition, medicine, active substances in its production, serums, vaccines, and blood and its derivatives, will be VAT free. The amendments also exempt agricultural products from VAT, such as seeds, seedlings, vegetables and fruits produced locally. It also exempts the Suez Canal Authority services for ships transiting through it, including transit fees. Finance Minister Mohamed Maait said that the amendments aim to address some of the problems that emerged during the practical application of the provisions of this law. (Arab Finance)
- Equally important, Egypt is studying the production of a new Egyptian jab “EgyVax” in collaboration with private sector player Eva Pharma, the Supreme Council of Universities, and the Agriculture Research Center.
The new jab will undergo clinical trials before getting the green light for production. The higher education and agriculture ministries will work on producing the viral antigen for the vaccine, which will be manufactured at Eva Pharma’s industrial complex. The vaccine would later be manufactured by Eva Pharma, which is currently the local manufacturer of Sinovac vaccines. (Arab Finance)
- And for our EGX & companies talks, Marseilia Almasreia Alkhalegeya For Holding Investment (MAAL) has signed a partnership contract to develop a 150-acre land plot in the North Coast.
Under the partnership agreement, Marseilia Group will act as the real estate developer of the entire land plot of the project spanning 644,000 square meters (sqm), with a built-up area of 60%. The integrated project will feature residential, hospitality, and services units and will offer up to 385,000 sqm space for sale, with expected contractual sales of not less than 9.45 billion EGP. Marseilia Group’s share in the contractual sales would represent about 70%. The project will be implemented at a total investment cost of around 5 billion (EGX)
- Uber signed a partnership with Paymob, the leading digital payment service provider, to expand payment options on the Uber app, in a bid to financially integrate a broader base of Egyptian drivers and riders.
Under the deal, riders can now top up their wallets on the Uber app using various payment methods, allowing them to plan for their trips in advance. For more convenience, added payments remain valid with no expiration dates, so riders can request trips whenever they want without having to worry about carrying cash. (Arab Finance)
- Furthermore, Mazadat, the first of its kind in the MEA region, has kicked off in Egypt, bringing an innovative X2C auctioning and e-commerce platform.
The platform offers C2C and B2C services using a time-boxed auction, a fixed-price Buy-Now listing or a hybrid format. Mazadat develops and operates an African-flavored Arabic/English auctioning platform and ecommerce marketplace, which empowers businesses, organizations, entrepreneurs as well as private individuals to sell and buy, anything, used or new, by auction or directly, seamlessly through their mobile phones. (Arab Finance)
- Likewise, the mandatory tender offer (MTO) to acquire Sixth of October Development and Investment Company’s (SODIC) (OCDI) issued shares has been implemented.
The transaction has been executed on 304.62 million shares in SODIC at a value of 6.092 billion EGP. It is worth noting that SODIC was ranked the 36th on Forbes’ list regarding the top 50 real estate developers in the Middle East and North Africa (MENA) during 2021. (EGX)
- Also, the ordinary general meeting (OGM) of Madinet Nasr Housing and Development (MNHD) approved the acquisition of both MINKA Developments and EGYGAB Developments.
The total FV of the two companies, MINKA and EGYGAB, has been set by the IFA at around 232 million EGP, representing the maximum value that MNHD would pay to fully acquire both companies. Accordingly, the OGM has authorized MNHD’s chairman to negotiate with the shareholders in both companies over the final value of the acquisition transaction. It is worth noting that MNHD was ranked the 38th on Forbes’ list regarding the top 50 real estate developers in the Middle East and North Africa (MENA) during 2021. (EGX)
- The investment banking division of EFG Hermes (HRHO) has successfully concluded advisory on the strategic acquisition of a 100% stake in the Emirati health snacks company BMB Group carried out by the UAE-based Agthia Group.
EFG Hermes served as the sole buy-side financial advisor on the transaction. It is worth mentioning that in 2021, EFG Hermes has closed 32 transactions at a total value of around 7 billion USD, including 11 merger and acquisition deals (M&A) and 11 equity capital market (ECM) transactions. The company recently acted as joint bookrunner on the 4 billion AED listing of ADNOC Drilling on the ADX and as a joint bookrunner on the 2.7 billion AED listing of Yahsat on the ADX. (Arab Finance)
- Moreover, the investment banking division of EFG Hermes (HRHO) has successfully closed the issuance of senior unsecured short-term notes valued at 550 million EGP for the Hermes Securities Brokerage Company (HSB).
This marks the HSB's first issuance in 2021 and the third in an 2 billion EGP two-year program. EFG Hermes acted as the sole financial advisor, sole manager, book-runner, underwriter, and arranger on the issuance, while Zulficar and Partners serves as the legal counsel on the transaction. (Al-Mal)
- And finally, Alinma Investment has sold its 7.87% stake in Northern Upper Egypt Development and Agricultural Production Company (NUDAP) in exchange for 6.4 million EGP.
Alinma has sold 5 million shares in NUDAP at a price of 1.28 EGP per share, according to a bourse filing on Tuesday. It is noteworthy to mention that by the end of March 2021, the company recorded 4 million EGP net losses, compared to 42,290 EGP net profits in the year-ago period. (EGX)
Stay up to date
More Newsletter to Check
SUBSCRIBE TO NEWSLETTER
Subscribe to download our daily economics and business roundup
×
![]()