IMF raised its forecast for the growth rate of the Egyptian economy, in the fiscal year ending 2020/2021, to 3.3%, compared to 2.8%
For our top macro talks today, first, the International Monetary Fund (IMF) raised its forecast for the growth rate of the Egyptian economy, in the fiscal year ending 2020/2021, to 3.3%, compared to 2.8%. It is noteworthy that the IMF had expected, in the report of the second and final review of the Egyptian economic reform program supported by the credit standby arrangement, which was revealed in late July, that the growth rate of the Egyptian economy would reach 2.8% in the fiscal year 2020/2021 and that it would rebound strongly to 5.2% in the year fiscal 2021/2022. Moreover, the World Bank had recently expected a rise in the growth rate of the Egyptian economy in the current fiscal year 2021/2022 to 5%, compared to 3.3% last fiscal year. (Source: IMF & World Bank)
- Second, on the other hand, regarding the rate of inflation; the IMF predicted that it would rise in Egypt during the current fiscal year 2021/2022 to about 6.3%,
compared to 4.5% in the last fiscal year 2020/2021, adding that it had recorded about 5.7% in the 2019/2020 fiscal year. The IMF data, issued yesterday, showed that the current account deficit decreased to about 3.7% in the current fiscal year 2021/2022, compared to 3.9% last fiscal year. The IMF also estimated a drop in unemployment rates to 9.2% in the current fiscal year, compared to 9.3% in the last fiscal year. (Source: IMF)
- Moreover, the hospitality sector in Cairo has witnessed gradual recovery during the third quarter (Q3) of 2021, however, the sector’s performance has not resumed its pre-COVID levels yet.
Hotels’ occupancy rates recorded 41% in August 2021, compared to 29% in the prior-year period, the report noted. This was driven by the taken measures by the Egyptian government in easing flight restrictions and allowing hotels to raise operational capacity to 70% from 50%, as well as higher vaccination rates in Q3-2021. (Source: JLL on Q3 2021 Real Estate Market)
- Equally important, the Egyptian Electricity Transmission Company has signed contracts to connect the Sheikh Zayed Monorail station to the national grid, with a total value of 270 million EGP, including two tracks with lengths of 17 km.
The contracts include connecting two lines extending over 17 kilometers with the national network. Under the first contract, one of the two lines will be executed by Egytech Cables, a subsidiary of Elsewedy Electric (SWDY), at a cost of up to 235 million EGP. The second contract has been signed with Egypt Cables to install fiber-optic cables on a turnkey basis to link a 2-kilometer line at a cost of 35 million EGP. (Source: Al-Mal)
- Moving to our companies talks, Nile City Investment Company intends to address 3 investment banks to promote the sale of a 10% stake in its shares to foreign investors, as part of reconciling the situation on the EGX.
The nominated 3 investment banks, namely "The Financial Group Hermes", "CI Capital" and "Beltone Financial", to choose one of them to promote the expected operation. It is noteworthy that "Nile City" recently addressed the Stock Exchange to extend the deadline granted to the company to adjust its situation for another 6 months to ensure its continued registration. The target share of the sale will represent part of the shares of the main shareholders in "Nile City Investments", namely the "Sawiris" and "Shobokshi" families, at 5% each. (Source: Arab Finance)
- Second, valU targets reaching 250,000 customers via platform by end-2022. Moreover, valU aims at providing non-banking financial services through offering large-scale installments with no interest on home appliances, education fees, or medical services.
The number of users benefiting from valU platform has reached about 100,000, with around 70,000 users using the platform on monthly basis. Nearly 420,000 clients in Tanmeyah Microenterprise Company obtained financing, noting that 70% of the transactions are carried out in cash. valU focus on offering financial services to youth as it recently launched “valU Ma’ak” for providing youth with financings for education fees or other needs. (Source: Hapi Journal)
- In the same fashion, Sherine Shahdy, director of the CDC Group - the United Kingdom Corporation for Impact Investment and Development Finance - in the local market, said that the group's total portfolio in Egypt is currently about 440 million USD, directed to 39 companies.
Noting that the group had invested 97 million USD during the past periods in the Benban solar energy project. She stressed that the Egyptian market is one of the most important investment destinations for the group during the coming periods, whether in the field of health care or otherwise. In a related context, Sherine Shahdi revealed that the CDC Group plans to invest more than 700 million USD in the coming years as part of its newly formed partnership with the DP World Group to support the commercial movement in the African continent, with the latter pumping about 1 billion USD at the same time. (Source: Al-Mal)
- Additionally, Orascom Investment Holding (OIH) has received the location of the sound and light show project at the pyramids area to commence development works. The development of the sound and light show project is expected to be complete in 2023.
It is worth noting that OIH previously signed a nine-year term loan agreement with the National Bank of Egypt (NBE) at a value of 311 million EGP to finance the development of the sound and light show project at the Pyramids of Giza. It is worth noting that the tourism sector in Egypt is one of the most important economic sectors and a major source of foreign currencies which encourages the NBE to support this sector on a permanent and growing basis. (Source: Al-Mal)
- Furthermore, Schneider Electric Egypt has signed a process OEM agreement with the Integrated Environmental Technologies and Oil Services Co (IETOS),
a company specialized in providing water treatment solutions and construction of water treatment plants. This partnership aims at manufacturing and providing the required components in developing water treatment plants and industrial digitalization. Moreover, this will strengthen the position of Schneider Electric in the Egyptian market. (Source: Arab Finance)
- And finally, for our EGX talks, the market capitalization of the Egyptian Stock Exchange recorded 733 billion pounds last August, representing 10% of GDP, down from 11% of GDP in July, and stable at levels in May and June of 10%.
The report indicated that the monthly return on the main stock index EGX30 recorded 4% in August, compared to 5% in July, -1% in June, and -1.6% in May. It is worth mentioning that the EGX30 has now posted gains seven straight trading sessions in a row. The EGX30 is back in the green for 2021 YTD after gaining 0.9% today. The index is now up 0.3% since the start of the year, but lags regional competitors including Saudi’s Tadawul (+32.8%) and both the ADX (+53.3%) and DFM (+11.9%) in the UAE. (Source: Ministry of Finance & EGX)
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