The CBE might prefer to act boldly! We believe that the Central Bank of Egypt is likely to raise interest rates by around 0.5% this Thursday

Newsletter

20 Jun 2022

The CBE might prefer to act boldly! We believe that the Central Bank of Egypt (CBE) is likely to raise interest rates by around 0.5% this Thursday, although we acknowledge the costs of high interest rates on the fiscal front. Higher commodity prices and a weaker EGP will push up Egypt’s import bill and cause the current account deficit to widen this year. Against this backdrop, policymakers at the CBE will continue to tighten monetary policy on Thursday. The overnight deposit rate currently stands at 11.25%, and the lending rate is 12.25%, while the main operation and disc. rates are at 11.75%. The CBE has hiked rates by 300 bps since March in a bid to curb rising inflation and bring foreign investors back into the local market. How rates change from here will depend on when inflation peaks and how high global rates go. (Zilla Capital)

The cooperation portfolio between Egypt and the African Export-Import Bank (Afreximbank) across all the sectors has reached a value of 6.5 billion USD, according to the Minister of Finance and President of the bank’s General Assembly Mohamed Maait.
The bank has achieved strong financial results in the past two years despite global challenges, as income surged 15% year-on-year (YoY) in 2021, Maait revealed. Public capital reached 2.6 billion USD to help member states cope with global shocks. Moreover, Maait noted that Afreximbank has financed the Fund for Export Development in Africa (FEDA) with 291.8 million USD to develop and automate the bank, which contributes to the promotion of governance and realization of objectives. The bank has provided African countries with 8 billion USD worth of credit facilities since March 2020 to help them address the economic and health impacts of Covid-19 pandemic, Maait said. (Arab Finance)
Egypt’s wheat imports from Russia surged 84% year-on-year (YoY) during the period from March until May.
The North African country received 1.056 million tons of wheat from Russia in the March-May period, compared to 573,213 tons in the same period a year earlier. During the period from January until May, Egypt’s total wheat imports declined by 24% YoY to 3.3 million tons, while wheat imports from Russia decreased by 30% YoY in the same period to 1.66 million tons. On June 16th, Egyptian Minister of Trade and Industry Nevine Gamea revealed that trade exchange between Egypt and Russia amounted to 4.7 billion USD in 2021, increasing by 5.1% YoY from 4.5 billion USD. (Reuters)
Oriental Weavers Carpets (ORWE) has become a member of the United Nations (UN) Global Compact, the largest voluntary corporate sustainability initiative aiming to improve sustainability efforts.
The company’s commitment to the 10 main principles of the Global Compact will pave the way for its long-term success. Moreover, this membership will enable the company to develop wider social benefits as per the UN sustainable Development Goals (SDGs). The company has been appointed as a founding member of the Africa Business Leaders Coalition (ABLC), a CEO-led initiative emanating from the UN Global Compact Africa Strategy 2021-2023, to support sustainable growth and development in Africa, with a focus on climate. (Arab Finance)
HSBC Egypt has launched Green Personal Finance (GPF) to support Egyptian retail customers’ efforts to realize the objective of net-zero carbon emissions.
The new product offers an interest rate discount on standard personal finance with flexible repayment plans. HSBC presents GPF exclusively for purchases of electric vehicles (EV) and solar panels for homes, along with installation expenses. It is worth mentioning that HSBC is anticipated to provide up to 1 trillion USD worth of sustainable financing and investment globally by 2030 to support the transition towards a net-zero economy. On June 7th, HSBC Egypt launched a 1 billion EGP technology entrepreneurs lending program for high growth tech entrepreneurs seeking international investments. (Arab Finance)
Minister of Higher Education and Scientific Research and Acting Minister of Health and Population Khaled Abdel Ghaffar has laid the groundwork for the New Tanta Oncology Center at a total cost of 1.62 billion EGP.
Located on a total area of 6,400 square meters (sqm), the new center will include all medical specialties related to diagnosis and treatment of tumors for all age groups. The new center is set to serve 15 million citizens through four buildings including the main building, as well as buildings of outpatient clinics, nuclear medicine, and radiation treatment, along with an administrative building. Furthermore, Tanta’s new oncology center will accommodate 266 beds and a complete department for radiation treatment. (Arab Finance)
Egypt’s Supreme Committee for the Management of the Epidemiology and Health Pandemic Crisis has decided to lift all the entry restrictions on Egyptians and foreigners to the country.
The cancelled restrictions were included in Article 7 of the committee’s decision no. 1 in 2021. During the meeting, Minister of Higher Education and Scientific Research and Acting Minister of Health and Population Khaled Abdel Ghaffar announced that around 86.6 million doses of various Covid-19 vaccines have been administered to citizens. A number of 4.5 million booster doses have been also provided, with approximately 57.5 million doses in storage, Abdel Ghaffar said. (Al Mal)
Moving to our EGX and companies talks, Banque du Caire (BDC) (BQDC) has raised its investment in the capital of the African Export-Import Bank (Afreximbank) by 82 million USD.
This brings the toral investments of BDC in the Afreximbank to around 115 million USD. Egypt will become one of the largest investors in the Afreximbank, which plays a pivotal role in reinforcing trade between Africa and the world, Chairman and CEO of BDC Tarek Fayed remarked. Moreover, Fayed noted that this step supports the bank’s expansion plan in Africa, as well as contributes to the implementation of several initiatives that boost the continent’s growth and development. It is worth noting that the Afreximbank has called its shareholders to bolster its capital with 6.5 billion USD, of which 2.6 billion USD will be paid to provide the necessary financing to deal with the impacts of Covid-19 and supply the required vaccines to African countries. (EGX)
Egyptian Transport and Commercial Services Company (ETRS) (EGYtrans) has signed a logistic services contract at a value of EGP 26 million with Kuehne + Nagel Ltd.
Under the contract, approximately 70 towers will be transmitted to the West Bakr – Vestas wind farm. The contract is expected to be carried out starting July 2022 for six months. EGYtrans is an Egypt-based company engaged in international sea, air, and land transportation services. The company offers a wide range of services such as import and export, general cargo handling, dry cargo handling, customs clearance, warehousing, packing, and specialized transportation. (Arab Finance)
Upper Egypt Mills Company (UEFM) is expected to achieve a standalone net profit of 65.875 million EGP in fiscal year (FY) 2022/2023, compared to a profit of 56.575 million EGP under the FY 2021/2022 budget.
The company’s operating revenues have been estimated at 853.81 million EGP in FY 2022/2023, up from 663.49 million EGP as per the FY 2021/2022 budget. Upper Egypt Mills is an Egypt-based company that operates within the fields of manufacturing, processing, import, export, warehousing, and distribution of different types of grains and grain derivatives. (CAPMAS)