Inflation picks up with Egypt’s annual headline Inflation rate rising to 6.1% in July compared to 5.3% in the previous month
For our top news of the day, inflation picks up with Egypt’s annual headline inflation rate rising to 6.1% in July compared to 5.3% in the previous month. The rise in inflation rate is fueled by the rise in global food prices in addition to the increase in prices of fuel for the second time this year. However, the inflation rate remains consistent with the CBE’s inflation target of 7% (±2%).
- Second, The State-owned National Investment Bank (NIB) is heading towards liquidation as part of a reform plan agreed with the IMF last year.
The highly leveraged bank had already halted any funding and lending operations last January and aims to sell its assets within the next 18 months. NIB assets include stakes in a host of listed companies including but not limited to Abu Qir Fertilizers, MOPCO, and Sidi Keir Petrochemicals.
- Third, The Egyptian Ministry of State for Military Production establishes a joint venture with UAE’s M Glory Holding Company to manufacture pickup vehicles with a bi-fuel system under the name “EM”.
This comes as part of the state initiative to convert fuel powered vehicles to natural gas vehicles or electric vehicles in a bid to transition to cleaner energy sources. Production is expected to roll out in H1-2020 with an estimated production capacity of 12,000 vehicles per year.
- Moving on to our companies’ coverage, Edita Food Industries signs a medium-term loan agreement worth 150 million EGP with Credit Agricole Egypt.
The seven-year loan will be used to finance the purchase of Edita’s new bakery line which is scheduled to be operational during Q1-2021. Edita recently disclosed the financial results of H1-2021, recording net profits of 196.91 million EGP compared to 93.78 million EGP in H1-2020.
- Equally Important, Egypt-based fintech startup Dopay will offer its digital payroll solutions to Bank ABC corporate clients after obtaining an agent banking license from the Central Bank of Egypt (CBE).
The fintech startup provides payroll services to clients via its digital payroll and payment platform by allowing companies to pay their unbanked employees’ salaries in real-time. The CBE has been focusing on promoting financial inclusion in the population and the digital transformation of the economy.
- Furthermore, Banque Du Caire (BDC) is considering the establishment of an investment company focused on SME lending with a targeted capital of 500 million EGP according to Head of Investments at BDC Mohamed Ragai.
The potential investment vehicle aims to invest in SMEs in various sectors particularly the manufacturing industry with annual revenue in target companies not exceeding 50 million EGP. Moreover, the bank is also studying a number of investment opportunities, including companies and investment funds in the fintech sector.
- With Regards to the M&As, Marsa Marsa Alam for Tourism Development (MMAT) plans to sell off it’s 8.2% stake in El Ahram for Printing and Packing.
The proceeds of the sale are expected to finance the working capital of the business. Additionally, the board of directors agreed to assign the chairman of the board Shahinaz Mohamed Salim to sell off the MMAT’s stakes in other publicly listed companies. The proceeds of the sale are expected to finance the working capital of the business.
- On another note, The National Bank of Kuwait (NBK) is mulling over the possibility of delisting the bank’s shares from the Egyptian Stock Exchange (EGX).
The voluntary delisting decision is awaiting approval at the bank’s next extraordinary general meeting. The bank has also approved the appointment of Prime Capital as an independent financial advisor to assess the fair value (FV) of the business ahead of the possible delisting.
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