Egypt inflation seen retreating in October from record high

Newsletter

09 Nov 2023

Egypt inflation seen retreating in October from record high. Inflation had been accelerating steadily since June, when it reached a record high of 35.7%. The previous high of 32.95% was in July 2017. Egyptian inflation is expected to retreat in October from a record high of 38% in September as food price rises moderate, but Egypt’s battle with inflation seems far from over. Inflation had been accelerating steadily since June, when it reached a record high of 35.7%. The previous high of 32.95% was in July 2017. (Daily News)

Crude prices fell more than 4% yesterday, with Brent crude prices dipping to just USD 81.61 a barrel, marking its lowest price since July.
The oil market was responding to the release of weak trade data from China and renewed doubts about whether the Federal Reserve has finished raising interest rates. The dollar strengthened — potentially hurting oil demand by making the commodity more expensive for importers — after Federal Reserve Bank of Minneapolis President Neel Kashkari said it’s too soon to declare victory over inflation. He also said the risk of over-tightening monetary policy is preferable to doing too little, and that he’s concerned that inflation could tick up again. (Bloomberg)
An enduring period of interest rake hikes from across the pond is fuelling a “silent debt crisis” among many developing countries saddled with high foreign-currency debt piles,
World Bank deputy chief economist Ayhan Khose stated. More countries are feeling the pinch. The sovereign debt of almost one quarter of emerging and developing countries is now trading at distressed levels. In 2019, the proportion of EMs with distressed debt was less than 5%. (Financial Times)
Higher global interest rates plus a stronger USD over the past 18 months have made debt more expensive for developing economies to pay off, contributing to a sharp sell-off in emerging-market bonds.
Even though central bank rates are close to reaching their peak, investors have continued to remain on the sidelines on expectations that they will have to stay higher for longer, stymying the prospects of recovery for the asset class.(Bloomberg)
Egypt has the highest interest bill as a percentage of GDP globally and one of the world’s highest gross government debt-to-GDP ratios,
leading Bloomberg to list us as the second-most vulnerable country in the world to a debt crisis. Rising rates and the fallout from the war in Ukraine has heaped pressure on Egyptian bonds, with yields on Egyptian 10-year bonds surging 75% since the beginning of 2022. The bonds are now trading almost 2,150 bps above US 10-years. (Bloomberg)
Abu Dhabi’s wealth fund ADQ is reportedly mulling over acquiring up to a 30% stake in EGX-listed Egypt Aluminum from the Holding Company for Metallurgical Industries.
Metallurgical Industries is EgyptAlum’s largest shareholder with a 89.8% stake and has been trying to sell off shares in many of its companies and launch IPOs to raise money for the state’s privatization program. Although ADQ has not made an official offer, other Gulf entities and specifically Qatar are interested in grabbing a part of the company. (Al Mal)
Abu Dhabi Tourism Investments is developing 3 hotels in Egypt worth 5.5 billion EGP.
Yahya Qutb, CEO of Abu Dhabi Tourism Investments Company ADTIC, owned by the Abu Dhabi Fund for Development, said in an interview with Al Arabiya Business that the company is currently investing about 81 million USD, equivalent to 2.9 billion EGP, in renovating two of its hotels in Sharm El Sheikh and Hurghada, in addition to developing a hotel. A large building directly overlooking the Pyramids and the Grand Egyptian Museum, with investments exceeding 80 million USD, or about 2.6 billion EGP, bringing the total current investments in the three hotels to about 161 million USD. (Hapi Journal)
The stock exchange approves doubling the capital of the "banking company" to 331 million USD.
The Listing Committee at the stock exchange approved the listing of increased capital shares, both issued and paid, for the Arab International Bank, raising it from 157.5 million USD to 331 million USD. The increase amounts to $173.5 million, achieved through the issuance of 17.35 million shares, equivalent to 1.101746032 free shares for every original share before the increase, with a nominal value of 10 USD per share. (Al Borsa News)
"The Holding Company for Construction" evaluates "New Egypt" at approximately 20 billion EGP with the aim of selling it.
"The Ministry of Transportation" contacts "The Central Bank" to secure 25% of the contract for establishing the "Transmash" railway workshop. The Holding Company for Construction has assigned "INAI Capital," a government investment bank, to select an independent financial advisor to determine the fair value of the New Urban Communities Authority (NUCA) to sell it to a strategic investor. The evaluation has already been obtained. (Economy Plus)
The Ministry of Petroleum is collaborating with "Huawei" to operate oil fields using solar energy.
Ministry of Petroleum and Mineral Resources has signed three cooperation agreements with the global company "Huawei," according to a statement released today by the ministry. The three agreements include the utilization of solar energy solutions in operating oil wellheads, support for digital transformation, and the training of young leaders. The first agreement aims to establish cooperation between the ministry and the company to implement on-the-job training programs and develop the skills of selected personnel through a program for qualifying young and middle management leaders in the petroleum and gas sector. (Economy Plus)
"Saudi Arabia's Tamr" is nearing the acquisition of a 30% stake in an Egyptian pharmaceutical company.
The "Tamr Healthcare Group," one of Saudi Arabia's various suppliers of pharmaceuticals and medical supplies, is close to acquiring a stake of up to 30% in the Egyptian company "United Pharmacists." Noting that the American company "Amryisus Virgin," which owns approximately 50% of the shares of "United Pharmacists," has already agreed to sell 30% of the company to the Saudi "Tamr Healthcare Group" for up to 35 million USD. Additionally, the Egyptian company "Eva Pharma" has signed an agreement to build a pharmaceutical manufacturing complex in Saudi Arabia worth 500 million SAR. (Asharq Business)
Tatweer Misr, AAIB sign 3.5 billion EGP medium-term facility to accelerate construction of IL Monte Galala, Bloomfields.
Tatweer Misr, a prominent real estate developer in Egypt, has entered into a medium-term financing agreement valued at EGP 3.5 billion with the Arab African International Bank (AAIB) to accelerate the progress of two of its flagship projects: IL Monte Galala in Ain Sokhna and Bloomfields in Mostakbal City, located in eastern Cairo. According to the terms of the agreement, the Arab African International Bank will supply financial support to various banks operating within the Egyptian market. The bank will assume several roles, including being the primary financier, leading arranger, coverage guarantor, facilitation agent, and guarantee agent. (Daily News)
Euro-denominated T-bills tender attracts 781.7 million EUR in 28 offers: CBE.
The Central Bank of Egypt (CBE) has received 28 bids amounting to €781.7 million for its Euro-denominated treasury bills (T-bills) auction conducted on behalf of the Ministry of Finance. The auction had a total value of 645 million EUR with a one-year maturity, set to mature on November 5, 2024. The proceeds from this auction will be utilized to settle a prior T-bills tender that matured on November 8, 2022, and had a value of 695 million EUR. (Daily News)
Egypt, and Venezuela discuss cooperation opportunities in oil, petrochemicals
Egypt's Minister of Petroleum and Mineral Resources, Tarek El Molla, held discussions with the Venezuelan Minister of Foreign Affairs, Yvan Gil Pinto, and his accompanying delegation during their visit to Egypt to explore opportunities for strengthening cooperation in various domains. The meeting centered on identifying potential areas of partnership between the two nations, particularly in the fields of oil, gas, and petrochemicals. (Daily News)