NBE, Banque Misr offer 25%-yield CDs
NBE, Banque Misr offer 25%-yield CDs. State-run banks the National Bank of Egypt (NBE) and Banque Misr started selling a new one-year certificate of deposit (CD) at an annual interest rate of 25% which will be disbursed annually. The lenders also offered the same CD at an annual interest rate of 22.5% which will be disbursed monthly. This move is aiming to absorb liquidity in the markets to counter inflation, and it may be a preliminary step before witnessing some fluctuations in the Egyptian pound. It is worth noting that the two banks previously introduced one-year, 18% certificates of deposit (CDs) last year on the back of the first EGP devaluation in March, which were suspended months later on the back of high costs incurred by the banks. (Asharq Business)
- Egyptian pound tumbles to fresh record against US dollar.
The EGP fell today to breach the 26 / USD 1 mark at some banks. The currency has now fallen by over 30% against the greenback since late October when the central bank moved to a durably flexible exchange rate, and by over 66% since last March’s devaluation. This comes a few hours after the NBE and Banque Misr announced offering a new one-year certificate of deposit (CD) at an annual interest rate of 25%. In October 2022, the CBE said it would adopt a more flexible exchange rate policy to back macroeconomic stability and sustainable growth, devaluing the pound by over 16% from 19.67 per dollar to 22.85 in order to absorb the economic shock triggered by the Russian-Ukrainian war. (Zilla Capital & Al mal)
- Egypt’s private sector activity remains in contraction in December.
The S&P Global Egypt Purchasing Managers' Index (PMI) for the non-oil private sector shrank in December for the 25th straight month. The index rose to 47.2 in December from 45.4 in November, but was still below the 50 threshold that marks growth in activity. The sub-index for output improved to 44.8 from 40.8 in November and that for new orders rose to 45.5 from 41.4. It’s worth mentioning that the continued contraction came on the back of a surging inflation, a weaker EGP and import restrictions. (Zawya)
- Egypt's net foreign reserves rise for fourth straight month.
Egypt’s net foreign reserves (NIR) saw a fourth consecutive monthly increase in December, hitting over 34 billion USD, up from 33.5 billion USD in November. Egypt’s NIR increased in November, despite paying off 1.5 billion USD of foreign debt. International reserves stood at 33.523 billion USD at the end of November, growing by 121 million USD from 33.411 billion USD at the end of October. In December, the executive board of the International Monetary Fund (IMF) approved a 46-month 3 billion USD loan to Egypt under the Extended Fund Facility (EFF). (CBE)
- Foreigners residing in the country will not be charged in USD to book train tickets in the country.
The decision to charge foreigners for train tickets in USD, announced last week, will only apply to tourists. Here’s how much they’ll be charged: A price list published this week by the Egyptian National Railways Authority shows that tourists will be charged between 15 USD and 65 USD depending on the route and travel class. The move comes as officials continue to hunt for foreign exchange as Egypt looks to start emptying ports of backed-up goods. (Egypt Transport Ministry)
- Gov’t is hoping this will be the year its privatization strategy springs into action.
The state is looking to reduce its involvement in certain sectors of the economy as part of its newly finalized state ownership policy, which aims to more than double the private sector’s role in the economy to 65% and attract 40 billion USD in private investment by 2026. Public share offerings and stake sales to strategic investors will be a key part of seeing that policy through. The government had envisaged selling shares in as many as 10 state-owned companies on the bourse in 2022, either via IPOs or secondary stake sales — but market turmoil amid the fallout from Russia’s invasion of Ukraine saw those plans pushed back. (Zawya)
- The Madbouly government is ready to offer shares in four state-owned firms on the EGX and has eight more listings in the pipeline as it looks to reboot its privatization program.
The companies ready to be listed reportedly include Banque du Caire, Misr Life Ins, Egyptian Drilling Company, and Egyptian Linear Alkylbenzene Company (ELAB), which doesn’t disclose an expected timeline for the offerings. Egyptian Drilling Co. and ELAB have been in the lineup for the state IPO program since 2018, while Banque du Caire is a perennial IPO prospect. (EGX)
- Eight other state-owned companies will also offer shares on the EGX as part of the privatization program.
They apparently include: Oil Ministry-affiliated contractor Enppi, which has been on the privatization block since 2017, when CI Capital was tapped to quarterback its sale; Two refineries: Midor and Assiut Oil Refining Company, both of which have been discussed as potential sale prospects in recent years; Petrochem firms eMethanex, Ethydco and WAPHCO; Misr Life Ins. parent company Misr Ins and Alexbank. (EGX)
- Compass Capital offers to acquire up to 90% of Pachin.
Compass has submitted a non-binding offer to purchase between 51-90% of Pachin at EGP 30 a share, becoming the fifth company to express interest in acquiring the regional paint distributor since mid-2022. The final price will be set based on the due diligence on the targeted company. On December 26th, the FRA received an LoI from Eagle Chemicals regarding a non-binding offer to fully acquire Pachin at an indicative price of EGP 29.5 per share. (EGX)
- GlobalCorp closes 1.1 billion EGP securitized bonds end-2022.
GlobalCorp has closed the issuance of securitized bonds at a value of 1.1 billion EGP on December 29th. This marks the third issuance in the group’s history and the second to be concluded in 2022. It is worth noting that GlobalCorp previously announced the issuance of securitized bonds for the second time at a value of 1.284 billion EGP as part of an 5 billion EGP securitization program that is set to be closed by 2023. (Hapi Journal)
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