US headline PPI inflation for December came in at 9.7%, a new record and just below the median forecast of 9.8%
So, first, US headline PPI inflation for December came in at 9.7%, a new record and just below the median forecast of 9.8%. The core measure was 8.3%, quite a jump from the prior 7.7% and above the 8.0% median forecast. While on US data, weekly jobless claims rose to 230,000, up from the prior reading of 207,000 and above the median projection of 200,000. Second, The United States is now running a 7% inflation rate, the highest in 39 years; Annual inflation is still accelerating and will remain high for the next few months; This hurts most the more vulnerable segments of the population; and It was avoidable. While inflation will come down in the course of 2022, it really matters to livelihoods how this happens. (Bloomberg and Financial Times)
- JP Morgan is expecting excess capacity in the Organization of the Petroleum Exporting Countries (OPEC) to fall through 2022, raising the risks of a sharp increase in crude prices to reach 125 USD a barrel this year, and 150 USD a barrel in 2023.
They mentioned a growing recognition in the market of weak global investment in supply. Oil prices hit their highest levels in two months on last Wednesday, supported by a supply shortage, with crude inventories in the United States, the world's largest consumer, falling to their lowest levels since 2018. OPEC's surplus production capacity will fall to 4% of total production capacity by the fourth quarter of 2022, from 13% in the third quarter in 2021. Moreover, the US investment bank added that the weak investment within the countries of the "OPEC +" group, and the increasing demand for oil after the Corona pandemic, may lead to a potential energy crisis. (JP Morgan)
- The 50-most funded startups in MENA have raised a total of around 3 billion USD in funding, with the top 10 startups securing 1.9 billion USD combined, as shown by the annual list of Forbes Middle East. Forbes Middle East's list has selected startups from nine MENA countries that were established no earlier than 2014 and have raised at least 15.5 million USD in total funding.
A total of 22 of the 50 startups are headquartered in the UAE, including four of the list's top five startups. The UAE-based cloud-kitchen operator Kitopi leads the list with 804 million USD in total funding, followed by Pure Harvest Smart Farms with 272 million USD and the streaming service STARZPLAY with 150 million USD. Meanwhile, the list features 12 startups from Saudi Arabia, seven from Egypt led by MaxAB with 62.5 million USD in total funding, and two from Kuwait. The Fintech and e-commerce startups are the most represented sectors, with 24 out of 50 entries. (Mubasher)
- Banks operating in the Egyptian markets have the highest rates of liquidity in the region. The announcement follows the Central Bank of Egypt’s decision to approve granting emergency liquidity for local banks.
The provision of emergency liquidity for central banks is one of the tools used to support and help banks face liquidity crisis on the short term. Earlier this week, the CBE approved a set of rules under which it would be able to provide emergency liquidity to local lenders. Under the new rules, banks can apply to receive emergency liquidity if they cannot get it from the interbank or financial markets. Emergency liquidity will be made available to solvent banks only and for a maximum period of 180 days. It will be priced at a premium of at least 5% above the overnight lending rate, the statement added. (Ahram Online)
- Egypt plans to develop industrial mining cities for the extraction of gold, copper, and phosphate. The Oil Minister Tarek El Molla said that the zones would extract and process gold in the Eastern Desert, phosphates in the Western Desert, and copper in Sinai.
In the same vein, el Molla noted that the ministry is working to establish a state-of-the-art certified gold refinery in Mersa Alam, south of the Eastern Desert. Establishing the new refinery aims to maximizing the added value from gold resources and up economic returns from gold production within the mine-to-market value chain. The area housing the gold refinery is thought to hold more than 1 million ounces of gold. The deposit could be worth up to 1 billion USD if estimates are proven correct. The area has an average gold concentration of 1.5 grams per ton of rock. Iqat Gold Mining Company, a joint venture company set up by the Egyptian Mineral Resources Authority and the military-owned Shalateen Mining Company, holds the concession. (Bloomberg Asharq)
- Moving to our investments talks, the National Marine Dredging Co (NMDC) has been awarded the dredging works project at the entrance to the navigation channel and the trench of the quay wall in Safaga Port in Egypt in exchange for around 79 million AED.
The project is expected to be carried out over eight months, according to a bourse filing on Thursday. It is noteworthy to mention that in August, the company won a 290 million AED project to deepen and develop the sea lane of Egypt's Damietta Port. (Mubasher)
- The Sovereign Fund of Egypt (SFE) plans to launch a renewable energy sub-fund in 2022, as part of its plan to support the green transition. The Egyptian government is reportedly planning to transfer ownership of the assets of both the New and Renewable Energy Authority (NREA) and the Hydro Power Plant Executive Authority (HPPEA) over to this new sub-fund, which will manage investments in climate-friendly projects.
Accordingly, SFE officials are studying reports from the NREA and the HPPEA on their assets and ongoing projects. In 2022, the sovereign fund plans on scaling up climate-friendly investments. It is currently backing several high-profile infrastructural projects, including a 2.5 billion USD plan to develop 17 new desalination plants and Egypt’s first-ever green hydrogen facility. (Al Borsa News)
- The Information Technology Industry Development Agency (ITIDA) has signed an agreement with the Centre for the Promotion of Imports from developing countries (CBI) in a move to support Egyptian IT outsourcing (ITO) exports to the European market.
The CBI of The Netherlands’ Ministry of Foreign Affairs offered a three-year program to support Egyptian IT small- or medium-sized enterprises (SMEs) in their export journey to the EU by offering technical assistance through a practical business export coaching project. (Arab Finance)
- Turing to our EGX and companies talks, Google uncovered the list of start-ups that will participate in the third edition of the Google for Startups Accelerator in the Middle East and North Africa, a three-month digital acceleration program targeting technology start-ups still in the seed and initial investment stages in the region.
Google selected two Egyptian enterprises are Orcas and Zida to join the three-month program. Orcas is a platform that provides high-quality services, educational materials, and assessments to students, in addition to allowing educational service providers to generate additional profits. As regards Zida, it supports local F&B businesses to enhance their relationships with customers by offering a seamless online ordering and delivery experience. (Arab Finance)
- Raya Holding for Financial Investments (RAYA) is seeking to complete its financial inclusion strategy by considering the establishment of a micro-insurance company under the umbrella of its subsidiary Aman Holding, Raya’s Chairman Medhat Khalil revealed.
The company is also targeting to achieve an annual growth rate of 35% to 40% in the non-banking financial sector in the coming three years, Khalil said. It is worth noting that Aman Holding is 76%-owned by Raya Holding, while the National Bank of Egypt (NBE) holds the remaining 24% stake. (Al-Mal)
- Tawfeer Market, the emerging online grocery retail startup, has raised half a million USD closing its seed round with contributions from Alexandria Business Angels Network. The quick commerce app, which started delivering groceries to customers in 2020, became an established brand in the Alexandrian community.
According to the co-founder and CEO of Tawfeer Market, Ahmad Fasseeh, the grocery retail market is enormous, exceeding 50 billion USD. Fasseeh added that Egypt's online grocery retail market share is still way below global averages and even behind other e-commerce sectors in Egypt. The future of online grocery retail in Egypt is expected to grow exponentially, leaving room for many players to fulfill different needs. (Arab Finance)
- Egyptian Chemical Industries (KIMA) (EGCH) is currently in talks with a number of banks to obtain a loan worth 250 million USD. The company will use the loan to finance the establishment of a new plant as an alternative to KIMA 1 in Aswan, Radwan highlighted, stressing that the plant will be eco-friendly.
In the same vein, KIMA is expecting to achieve operation revenues of 2 billion EGP in 2022. The company also targets the completion of the adjusted agreement with some banks regarding the restricting of an old loan in the first quarter (Q1) of 2022. Under the agreement, a loan worth 292 million USD and another of 1.9 billion EGP shall be restructured, along with cutting interest rate. (Al-Mal)
- Taaleem Management Services (TALM) posted a consolidated net profit attributable to the parent of 71.302 million EGP for the three-month period ended November 30th 2021. It is worth noting that the company’s consolidated net profit amounted to 58.11 million EGP in the September-November period of 2020.
Consolidated operating revenue reached 171.65 million EGP during the period starting September 1st until November 30th 2021, up from 134.79 million EGP in the prior-year period. On the other hand, Taleem Management Services reported a standalone net profit after tax of 20.89 million EGP for the three-month period ended November 30th 2021, down from 25.96 million EGP in the year-ago period. (EGX)
- e-finance for Digital and Financial Investments (EFIH) is planning to expand in African countries. The company is close to signing a contract with one of the African countries and is expected to disclose further details regarding this matter within the coming few months.
Moreover, e-finance revealed that it is nearing the signing of a contract in the transport sector to digitalize payments. It is worth noting that the company’s consolidated net profit recorded 374.8 million EGP during the January-September period of 2021, compared to 227.2 million EGP in the corresponding period of 2020. (Al-Mal)
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