The Ministry of Planning and Economic Development announced the agricultural sector’s goals for 2021/2022
The Ministry of Planning and Economic Development announced the agricultural sector’s goals for 2021/2022, which are represented in increasing agricultural production at current prices to about 1.118 billion EGP, with a growth rate of more than 9%, compared to about 1.022 billion EGP expected in 2020/2021. In addition, increasing agricultural GDP at current prices by 11% to reach about 821 billion EGP in 2021/2022, compared to about 673 billion EGP in 2019/2020 and the expected amount in 2020/2021, which is 740 billion EGP. We believe the Corona pandemic showed the great importance that the agricultural sector occupies, as it contributed significantly to fulfilling the food needs of citizens without the emergence of bottlenecks in the markets.
- Second, it’s interest rate week here at home. The CBE will meet next Thursday to review interest rates. We strongly believe that the central bank will leave rates on hold, with inflation and rising global commodity prices weighing heavily on their decision.
The interest rates are expected to stabilize until the end of 2021. Noting that any action taken to cut interest rates shortly would pose a much greater risk of interest rate hikes for the rest of the year. It is worth mentioning also that with the CBE continuing to tighten its policies due to the COVID-19 pandemic, we think that the CBE is unlikely to back down from those policies, especially with the global economy in general being exposed to a lot of severe pressure.
- Third, Lafarge Egypt, a member of the global Holcim Group, and the German Agency for International Cooperation (GIZ) announced their partnership to implement a program to enhance the employment of young women through the implementation of gender diversity management in companies in the MENA on behalf of the German government.
Also, the Ministry of International Cooperation revealed that the volume of ongoing funds made available by multilateral and bilateral development partners to support the country’s strategy to develop the health care sector, improve services provided to citizens, and implement the third goal of the sustainable development goals: good health and well-being, amounts to 1.4 billion USD to implement 32 projects. In 95 locations covering all governorates of the Republic.
- Moving to companies talks, Fawry approved the purchase of the Commercial International Bank’s share in its subsidiary “Plus for Banking Services” in its session held on Sunday. Moreover, Fawry buys a similar share of Banque Misr worth 16.2 million EGP.
Fawry aims to raise its stake from 38% to 86% through acquiring the shares of the CIB Egypt with a total value of close to 32 million EGP. In addition, the company had entered the electronic food market by buying a minority stake in Elmenus, one of the largest platforms specialized in delivering food to homes in Egypt. It is worth mentioning that the company's shares have jumped 500% since it was traded in mid-2019.
- In the light of investment talks, Mubasher Capital Holding Company intends to establish 10 diversified investment funds during the next year 2022, after obtaining the establishment license from the Financial Supervisory Authority.
Noting that the company intends to issue these funds to work in new and different fields, however, some of them will be dedicated to investing in green bonds, stocks and treasury bills. Also, the company announced implementing full electronic management of managed assets for the first time in the local market. Moreover, Mubasher revealed its intention to complete a deal to acquire a company that manages an investment fund in stocks and treasury bills and bonds in the near future.
- By the same token, Abu Auf opens a new coffee production plant in the 10th of Ramadan City, with a capacity of 20,000 tons per year.
We believe the company is doing its best in providing the best possible high-quality products, both in the local market and foreign markets, especially that the company has succeeded in exporting its products to a large number of European countries such as England and Belgium.
- In the same fashion, DP World Sokhna has entered into a multi-year agreement with International Meat Capital, an Egypt-based private conglomerate, to restart the livestock facility starting from August 2021 at the Ain El Sokhna port.
We believe the facility will be a great example to become a Trade Enhancer and to help contribute to Egypt’s high-quality food security while supporting the growth of the economy and creating new jobs.
- Equally important, four national banks are getting ready to launch a fund for financing emerging small- and medium-sized enterprises (SMEs) in the fourth quarter of 2021mainly in the technology sector, namely NBE, Banque Misr, Banque Du Caire, and Suez Canal Bank.
It is worth mentioning that the fund will be established with 1 billion EGP in seed capital, which is targeted to reach EGP 2 billion over the coming period.
- Moving to our abroad talks, oil prices fell in global oil markets on Monday, amid concerns about the Chinese economy, noting that the growth of manufacturing activity fell sharply in the second largest oil consumer in the world, with the exacerbation of concerns about an increase in oil production from OPEC producers.
In addition, crude demand expectations are not on solid ground, and this may not improve until there is an improvement in the field of vaccines globally. Noting that factory activity growth in China fell sharply in July, with demand contracting for the first time in more than a year.
- Another key point needs to be highlighted is the new delta variant effects. Noting that the delta variant is threating to weaken the economic recovery. We believe the market concerns about the impact of the variant on the global economy are necessary, warning that vaccines alone would not ensure a smooth path to economic normalcy.
As a result, rising concerns about the delta variant of COVID-19 look to be seeping into volatility markets adding that delta is also messing with oil prices, as the new variant’s impact on demand across the Asia-Pacific region made itself felt in a price drop following two weeks of gains.
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