The Central Bank of Egypt (CBE) is likely to hike interest rates when it meets on Thursday as inflation continues to run high

Newsletter

31 Jan 2023

The Central Bank of Egypt (CBE) is likely to hike interest rates when it meets on Thursday as inflation continues to run high. It’s expected that the CBE will raise the interest rates with around 100 to 200 basis points to curb inflation rates. The overnight deposit rate currently stands at 16.25% and overnight lending rate at 17.25%, while the main operation and disc. rates are at 16.75%. The CBE raised rates by 800 bps last year, including a higher-than-expected rate hike of 300 bps in December which was its biggest rate hike since 2016, before floating the EGP. The move came to curb inflation, which hit a fresh five-year high of 21.3% last month. It also preceded the latest devaluation of the EGP, which is now trading at around 29.94 to the greenback after starting the year at 24.70. (Zilla Capital)

It is expected that inflation will peak in 1Q 2023 at around 25% on average before retreating to around 16 to 18% in December 2023
Price hikes will be driven by the EGP depreciation and its ongoing impact on imports, expected fuel price increases, seasonal factors including Ramadan, and a potential hike to household electricity bills at the end of the fiscal year in June. That’s why, it’s predicted further tightening this year beyond next week’s meeting. On the other hand, The Federal Reserve is expected to continue to slow the pace of its interest rate hikes when it holds its two-day policy meeting on today and tomorrow. (Zilla Capital)
Egypt targets GDP growth of 5% in 2024: Madbouly
Egypt is planning to achieve gross domestic product (GDP) growth of 5% in 2024 and 6% in 2025, Prime Minister Mostafa Madbouly said. The government is also targeting a primary surplus of 2.1% in fiscal year (FY) 2023/2024, and raising this percentage to 2.5% in the future, Madbouly added. Moreover, he noted that the state seeks to cut the public debt to around 78% of GDP in FY 2026/2027. (Al Mal)
Egypt releases 794.7 million USD goods in 5 days
The Egyptian government has released 794.7 million USD worth of goods from ports during the period from January 24th to 28^th. These remarks came during a meeting headed by Prime Minister Mostafa Madbouly. The meeting tackled the current situation of bills of lading at ports, as well as the registered values under the advance cargo information (ACI) system. (Hapi Journal)
NBE, Banque Misr to stop issuing 25% CDs tomorrow
The National Bank of Egypt (NBE) and Banque Misr are set to stop the issuance of the certificates of deposit (CDs) with a 25% annual yield on Tuesday, January 31st. The largest two state-run banks’ proceeds of these CDs hit EGP 460 billion so far. The aim of issuing the certificate was to control inflation, attract foreign investments, and encourage dollar holders to convert it into local currency. (Arab finance)
Mashreq Bank received the central bank’s approval to issue one-year certificates of deposits (CDs)
The savings products will reportedly offer a 22.5% return with interest to be paid out monthly. The bank will also issue three-year CDs offering buyers a one-time payment of 19% on maturity, or opt for payments monthly (18.75%), quarterly (18.80%) or semi-annually (18.90%). CIB, QNB Al Ahli and Banque du Caire also launched high-interest CDs of their own as defensive measures to protect deposits. Expect all of the banks to pull their CDs from the market at the same time. (Al Mal)
EFG Hermes sets target price of Canal Shipping Agencies at EGP 25/share
EFG Hermes has set the target price of Canal Shipping Agencies (CSAG) at EGP 25 per share with a "Neutral" stock rating. In FY 2021/2022, the company recorded a net profit after tax of 185.54 million EGP, compared to 200.192 million EGP in FY 2020/2021. Canal Shipping is a subsidiary of the Holding Company for Maritime and Land Transport that provides marine port services and shipping services to international commercial fleets. (Al Mal)
UAE accounting startup Wafeq has raised 3 million USD in a seed round
The round led by Saudi VC Raed Ventures, with participation from Wamda Capital will help fund Wafeq’s expansion into Egypt while scaling its services in the Gulf. Wafeq is a Dubai-headquartered accounting platform looking to address the “unmet finance and accounting needs of small and medium businesses in the Middle East.” Its platform enables SMEs to manage accounting, e-invoicing, payroll and taxation. It aims to help companies to stay compliant with tax law and will soon meet the requirements of the Egyptian Tax Authority. Businesses currently use Wafeq to create more than 630k invoices every month totalling over 117 million USD. (WAYA)
Qatari state utility company Kahramaa has awarded Elsewedy Cables Qatar a 1.2 billion QAR (329.6 million USD), 30-month contract to establish a new underground transmission line
Elsewedy Cables Qatar shareholder Aamal announced. Elsewedy Cables Qatar is 73.4% owned by Qatari industrial group Senyar Industries Qatar Holding, which is 50% owned by Aamal. Ibnsina Pharma will distribute and market Sandoz’s over-the-counter pharma products in Egypt under a new agreement between the two firms. Sandoz is a division of Swiss pharma giant Novartis that sells generic pharma products and biosimilars. (Zawya)
TMG, GMG to open 2 new stores in Madinaty’s malls
Talaat Moustafa Group Holding (TMG Holding) (TMGH) inked a strategic partnership with UAE-based conglomerate GMG to open two new stores in Madinaty. Through the partnership, GMG will launch its home-grown concept Sun & Sand Sports, the Middle East’s largest sports retailer, at TMG Group’s newly launched mall All Seasons Park, and will open a Nike store at the highly sought-after Open-Air Mall. Spanning an area of approximately 1,600 square meters, the two stores are scheduled to open this year. (Arab Finance)