Most of the market expectations believe that the MPC of the Central Bank will raise interest rates within 1% during its next meeting on September 22

Newsletter

18 Sep 2022

Most of the market expectations believe that the Monetary Policy Committee of the Central Bank will raise interest rates within 1% during its next meeting on September 22, but we think that the Central Bank will keep the interest rates fixed and unchanged. Zilla Capital expects that the CBE will keep interest rates unchanged in its meeting on Thursday for a number of reasons, firstly to try to push down inflation rates, especially since of the inflationary shock is caused by external factors that has already increased inflation rates in many nations. Zilla added that given the nature of the Egyptian economy; with its trade balance deficit and Public-Debt to GDP ratio, causes raising interest rates to have a minimal effect on inflation rates in Egypt. Zilla also added that raising interest rates will have a minimal effect on Foreign Direct Investments (FDIs) and that stable exchange rates and local currency stability are the most important contributing factors to the investment decision. In addition, Zilla added that raising interest rates decreases overall liquidity in the economy which will eventually control inflation but decrease appetite to investments in publicly traded companies. Finally, Zilla Capital stated that the dollar index has increased by 21% during 2022 and that the current USD to EGP exchange rate doesn’t reflect the real value of the EGP and that it must be devaluated further gradually. (Hapi Journal)

The Increase in Gas price levels will increase Price levels and affect production levels of fertilizers I Egypt, said the Egyptian Company for Finance and Industry.
The prime minister issued a decree to implement a new mechanism to set the price of natural gas supplied to nitrogen fertilizer plants, which includes a minimum of $ 4.5 / per million British thermal units, and the decision does not apply to consumers who have already signed long term contracts with these plants.The Egyptian Company for Finance and Industry stated that increase prices will eventually decrease its profitability and compatibility. (Hapi Journal)
Telecom Egypt, Egypt's first integrated operator of telecom services, has announced the completion of initial tests for the operation of eSIM chips on its networks.
These preparations come as part of Telecom Egypt's strategy to expand and provide the latest technological solutions and integrated services, to ensure providing the latest and most advanced technical squints, ensuring the improvement of services provided. The eSIM service allows customers to keep the line without having to place their SIM card in mobile devices, which contributes to saving the cost to the customer to obtain services and improve the customer's experience in using more than one line on the same mobile device. (Hapi Journal)
The Central Bank of Egypt (CBE) offered treasury bills (T-bills) at an aggregated value of EGP 30 billion through two tranches.
The first issue was valued at EGP 14.50 billion, carrying a 182-day maturity period until 21 March 2023, according to official data. The second auction stood at EGP 15.50 billion, holding a tenor of 364 days until 19 September next year. On 11 September, the central bank issued T-bills worth EGP 21.50 billion through two offerings. (Mubasher)
Rowad Tourism (Al Rowad) (ROTO) bought an additional stake in Lecico Egypt (LCSW) for EGP 1.978 million.
The transaction was executed on 204,000 shares at an average price of EGP 9.694 per share.Accordingly, Rowad’s stake in Lecico increased to 5.49% from 4.794%. Rowad is an Egypt-based public shareholding company that operates in the tourism (Mubasher)
The Egyptian government has offered a number of hospitals affiliated to the Ministry of Health to the private sector for investment.
This includes granting usufruct, management, or development rights.The hospitals offered for investment include the Coptic Hospital, Heliopolis Hospital, and Sheraton Hospital. Egypt aims to accelerate the growth rate by increasing the private sector’s participation in economic sectors; hence the state exits some activities and offers tax and customs incentives to attract foreign investments. (Arab Finance)
The global technology corporation IBM has been announced as technology partner of the 2022 United Nations Climate Change Conference (COP27).
The cooperation will be showcasing the role of technology and consulting in assisting business and government leaders to achieve organizational objectives in line with the sustainability goals, while abiding by regulatory demands without impacting profitability. For his part, Sameh Shoukry, COP27 President-Designate and Minister of Foreign Affairs, welcomed IBM as technology partner of COP27. Shoukry noted that technology plays a critical role in helping governments, companies, and organizations meet climate goals, highlighting IBM’s expertise in creating innovative solutions to push the climate agenda forward. COP27 will be hosted by the Egyptian government in Sharm El-Sheikh during the period from November 6th to 18th. (Arab Finance)
Ekuity B.V. acquired an additional stake in Tenth of Ramadan for Pharmaceutical Industries and Diagnostic Reagents (Rameda) (RMDA) for EGP 159.528 million.
The transaction included the purchase of 53.768 million shares in Rameda at an average price of EGP 2.97 per share. Ekuity’s stake increased in Rameda to 8.2% from 2.82%. Rameda is an Egypt-based pharmaceutical company that manufactures both human and veterinary pharmaceuticals. It operates three fully independent factories at its plant, including 20 production lines capable of producing a wide range of general medicinal forms. (Mubasher)
The board of directors of B Investments Holding (BINV) decided to discuss the unresolved legal issues included in the transfer notice it received from TotalEnergies Marketing Afrique (TEMA).
This decision was made after the legal counsel of B Investments advised on the validity of the transfer notice it received from TEMA, indicating that the notice included unresolved legal issues. Hence, the company noted that it would not respond to the transfer notice at this stage. On July 31st, B Investments Holding received a transfer notice from TEMA, in which the latter stated it received a “bona fide written offer” from Abu Dhabi’s ADNOC Distribution. (Mubasher)
Creative Industry Summit and Misr Italia Properties (MIP) signed an agreement that would see Cairo Business Park be the official sponsor and host of the summit’s 14th and annual festival.
Since 2014, the Creative Industry Summit has been celebrating achievements in the MENA region’s creative economy, by gathering thought leaders, entrepreneurs, and innovators across various fields. Hosting the event acts as a step toward realizing MIP’s vision of expansion as a holistic developer aiming at making a change in its customers’ lives through different developments including business complexes. Cairo Business Park is to become East Cairo’s hub for innovation and entrepreneurship for innovative thought leaders and budding entrepreneurs. (Waya Media)