The Central Bank of Egypt Central Bank Sells Bonds Worth 'Double' Required Amount on Lower Yields The finance ministry, represented in the central bank, accepted during Monday's auction bids for its treasury bonds double the required value, lured by the continued decline in yields submitted by investors. Yields on the 3 and 7-year treasury bonds have declined to their lowest level since last August, central bank data showed. During yesterday's auction, the central bank accepted bids worth around EGP 3.27 billion, nearly double the required EGP 1.75 billion. Average yield on 7-year bonds reached 18.14 percent compared with 18.32 percent in the previous auction, while average yield on 3-year bonds amounted to 18.13 percent, marking its lowest level since July 2018. Yields on Egypt's treasury bills retreated in Sunday's auction, marking the first decline in nearly two-and-half months amid strong turnout by banks and other institutions. Egypt's financing needs in the 2018/2019 budget amount to around EGP 714.6 (nearly $40) billion, of which EGP 511.2 billion are secured from local debt instruments, while the remaining amount is obtained from the issuance of bonds and the IMF loan. Meanwhile, foreign holdings in Egypt's government debt instruments have amounted to $17.1 billion since the floatation of the pound in November 2016 until the end of July, which is $23.1 billion lower than their level at the end of March. The central bank has cancelled a number of bond auctions over the few last weeks as foreign investors shied away from the country's debt amid a global weak appetite for emerging market assets. | | Govt Denies Receiving Money from Investors to Cut Debt Egypt's cabinet denied on Monday that it had received money from investors to cut its domestic debt, which has reached its highest level at EGP 3.7 trillion ($206.5 billion) in June. "The government is committed to paying off all its debts without seeking illegal means to receive funds from investors. These are rumors aimed at withdrawing confidence in the Egyptian economy," a cabinet statement read. The country's external debts have increased by 17.2 percent year on year at the end of June 2018 to reach $92.6 billion, with Reuters estimating that it could hike to $98.9 billion by the end of the year. Egypt has borrowed heavily from abroad since it began an ambitious economic reform program in late 2016 when it signed a $12 billion three-year loan agreement with the International Monetary Fund. Earlier this month, the country signed a $3 billion financing deal with the World Bank. In the ten years between 2019 and 2028, Egypt will work on paying off around $65 billion of its foreign debts, which represent around 68 percent of the country's medium and long-term loans, according to a Central Bank of Egypt (CBE) report. By the year 2054, Egypt would have paid medium and long-term loans valued at around $96.8 billion, $21.8 billion of which are loan interests. | | Textile Industry Leader Laments Sector's Deterioration Deputy Head of the Higher Council for Textile Industry Magdy Tolba lamented on Monday the sector's domestic deterioration, which has affected its regional performance, calling for measures to improve the situation. He revealed that Egypt's textile industry exports declined by $1 billion in 2017, dropping to $2.7 billion from $3.7 billion. Tolba added that new regional competitors in the textile industry popped up in the past few years, namely Kenya and Alegria, in addition to long-time competitors Morocco and Tunisia. He called for more financing and loans to the textile industry as well as the training of human capital to be up to date with the latest technologies in the sector. Also on Monday, Public Enterprise Minister Hesham Tawfik said the country is working on improving the sector's infrastructure with investments of EGP 27 ($1.5) billion over the next two years. The minister added that the public sector dominates 75 percent of the market power. Egypt's cotton exports have increased remarkably in the 2017/2018 season, which ended in August, as they reached over 50,000 tons, up by nearly 37 percent from the previous year. Cotton exports in 2018/2019 are expected to rise by approximately 40 to 45 percent -- around 75,000 tons -- according to a Reuters report in July. | | Minister Hopes Investments in Insurance Sector Increase 43% by 2022 Public Enterprise Minister Hesham Tawfik said Egypt is looking to increase the insurance sector's investments by 43 percent to EGP 150 ($8.4) billion by 2022, compared to EGP 86 billion recorded in 2017. Tawfik said the sector's contribution to the GDP is only 1 percent, which he described as a 'modest figure', as the country looks to develop the ailing sector. The minister, who made his comments during the country's first annual insurance forum in the Red Sea resort of Sharm El Sheikh, said incentives such as new legislation and structural reforms will help boost the insurance sector. "In similar countries to Egypt, that sector contributes 3 to 4 percent of their GDPs," he added. | | Egypt's Rebar Steel, Cement Output Rises MoM in July Egypt's production of rebar steel and cement rose by 33.3 percent and 37.3 percent respectively in July, compared with figures recorded in June, according to central bank data. The country's steel production increased to 804,000 tons in July, from 603,000 tons in June, while cement production rose to around 4 million ton in July, compared with 2.9 million ton in June. July steel and cement sales increased by 6.7 percent 48.9 percent month-on-month, the data showed. However, the central bank also noted that average sale prices for steel and cement saw increases in July. The trade and industry ministry imposed last December final, five-year anti-dumping tariffs on imports of rebar steel from Turkey, China and Ukraine to protect local manufacturers after six months of enforcing temporary tariffs. | | Egyptalum's Q1 Profit Slips as Feedstock, Energy Costs Weigh Financial results of state-run Egypt Aluminum Company (Egyptalum) for the first quarter of 2018/2019 showed that its bottom line was hurt by a higher cost in production. The company's net profit in that quarter fell by more than 50 percent to record EGP 468 million ($26 million), from EGP 792 million ($44 million) in the same period a year earlier. The rise in costs offset the increase in revenues by 14 percent to EGP 3.63 billion, from EGP 3.10 billion in the first quarter of 2017/2018. A surge in the cost of the ammonia feedstock coupled with a rise in electricity prices weighed heavily on the company's results. Late in August, Minister of Public Enterprise Sector Hisham Tawfik gave directives to the Holding Company for Metallurgical Industries to conduct a study on the establishment of a solar power plant to supply energy-intensive plants in Upper Egypt, including an Egyptalum plant for which electricity constitutes one third of the total costs. | | HSBC Reports 28% Jump in Q3 Profits, Fueled by Asia Business HSBC has reported a higher-than-expected 28 percent increase in profits during the third quarter, which was attributed to gains from its Asia market. The bank's pre-tax profits rose to $5.9 billion in the three months to the end of September, up from $4.6 billion in the same period last year. HSBC's profits in Asia during that quarter grew by 13 percent to $4.45 billion. A better management of its expenses also contributed to the increased profits. Expenses for the quarter fell by 2.4 percent compared to the second quarter. Revenue for the third quarter also grew by 6.3 percent year on year, recording $13.8 billion. | | Cotton & Textile Holding Co. Plans to Minimize losses by 34% in 2019 State-Owned Cotton and Textile Industries Holding Company says it aims to cut its losses by 34.6 percent in 2019 to EGP 1.7 billion ($94.8 million) as the company undergoes restructuring efforts as part of the cabinet's plans to shrink losses of public companies or dissolve them. The company's losses, currently standing at EGP 2.6 billion ($145.1 million), have decreased from EGP 3 billion ($167.4 million) in the 2016/2017 fiscal year, head of the company Ahmed Mostafa told local media on Monday. According to Mostafa, the company has 65 percent of the market power in the fields of cotton ginning and textile weaving but that it is suffering because of old machinery that have been in use for the past 30 years. The company's debts have accumulated to EGP 16.6 billion ($927 million), with the majority of the money being owed to the National Investment Bank (NIB), debts that the company will have to settle as part of its restructuring process, according to Mostafa. The restructuring plan includes buying new machines, which will save 40 percent of electricity prices, 50 percent of chemicals used and 35 percent of water used. The company will finance the new machines and pay off some of its debts through selling some of its unused lands, which total 3.6 million square meters and their value is estimated at EGP 43 ($2.4) billion. According to recent statements by Minister of Public Enterprise Sector Hisham Tawfik, there are 26 public sector companies that are facing losses. They will be assessed for possible restructuring or even closure if restructuring efforts prove too costly. | | Real Estate  Inertia Holding Generates $156 Mn in Sales in Nine Months: CEO Egypt-based Inertia Holding Group posted EGP 2.8 billion (nearly $156 million) in sales during the first nine months of 2018 and aims to raise the figure to between EGP 3.8 billion ($212 million) and EGP 4 billion by the end of the year, the company's CEO said. "[Inertia] signed construction contracts worth EGP 550 ($30.7) million as part of an EGP 700 million ($39.1) by the end of 2018," Ahmed El Adawy told Mubasher website on Monday. With about EGP 20 ($1.1) billion in investments, the property developer is currently working on its project "Jefaira" on Egypt's northern coast over 5.5 million square meters. It will feature 14 neighborhoods as well as educational, tourism, medical and sports activities. "The project is expected to be delivered in 2020, 2021 and 2022," El Adawy said. As for Inertia's project in El Gouna Red Sea resort -- G Cribs -- the CEO said that the first phase has been already delivered while the second phase is under construction and set to be completed next year. "Inertia is also implementing another project in Sahl Hasheesh spreading over 140,000 square meters with EGP 450 ($25) million in investments," he added, noting that the project's second phase is scheduled for delivery next year. | Sisi during his meeting with CEOs of German companies Foreign Direct Investment Sisi Meets With CEOs of German Companies to Boost Cooperation President Abdel Fattah El-Sisi met on Monday with a number of CEOs of German companies that are already investing or willing to invest in various Egyptian markets, aiming to boost cooperation between both countries. El-Sisi, who is on a four-day visit to Germany, said the German CEOs praised bilateral cooperation and expressed keenness to invest in many fields, including construction and information technology among others. German investments in Egypt have reached $641.4 million through 1,103 companies, ranking the European powerhouse 20th among countries investing in Egypt, according to Minister of Investment and International Cooperation Sahar Nasr. El-Sisi arrived in Germany on Sunday to participate in the G20 Compact with Africa summit upon an invitation from German Chancellor Angela Merkel. The president is also scheduled to meet with Merkel in Berlin today. | | IBM to Buy Red Hat for $34 Bn, Marking 3rd Largest Tech Deal Ever Multinational Information Technology Company IBM has announced that it will acquire enterprise open source provider Red Hat for a record $34 billion, the company's largest acquisition to date and the third largest in the tech world. Red Hat, founded 25 years ago and based in North Carolina, was valued at about $20.5 billion at the end of trading on Friday, which means that the all-cash offer represents a roughly 60 premium. IBM has struggled for dominance in the tech industry in the past few years, with its share price falling by 30 percent over the last five years. "The acquisition of Red Hat is a game-changer," IBM CEO Ginni Rometty was quoted as saying by Red Hat website. "It changes everything about the cloud market." This is the third-biggest tech deal in the history of US tech, with the first being a $67 billion deal made by personal computer company Dell to buy EMC data storage. The second highest deal is the $37 billion spent by Semiconductor company Avago Technologies to buy and rename semiconductor giant Broadcom. | | About 1,260 State-Run Sites Allocated for Installation of E-payment Machines: Official The Egyptian government has allocated about 1,260 state-run sites for the installation of e-payment machines as part of its decision to end the reliance on manual transactions with governmental bodies by next January. "The government will provide 20 mechanized services before June 30, including eight services provided by the Real Estate Publicity Department (REPD) -- representing about 80 percent of the state's revenues," Ibrahim Sarhan, chairman of e-finance and a member of the committee overseeing the decision's implementation, told Al Mal newspaper on Monday. "The machines were tested in two locations which represent the largest number of daily payments at the branches of the registration office -- at an average rate of 3,000-4,000 payments per day." The finance ministry had announced in early September that the collection of government payments and dues are to be carried out electronically in various government bodies starting January 1. "Payments, including tax and customs dues which are over EGP 100,000 ($5,600), will only be made through e-payments -- excluding the checks that were written prior to this date," the ministry stated. The Egyptian government has been exerting efforts to "enhance financial inclusion and shift towards a cashless society." In September, the finance ministry announced a newly-designed website for financiers and registrars to pay their tax bills. Minister of Communications and Information Technology Amr Talaat said in late September that citizens would be provided with over 20 electronic services by 2019, including real estate, health insurance and car licensing services. All the services will be available through the soon-to-be-launched websites of government bodies. | | Competition Authority Appoints Team to Investigate Persistent Potato Shortage The Egyptian Competition Authority (ECA) has appointed a working group to look into the country's potato scarcity as well as the fluctuations in its prices in an effort to end the drawn-out saga by late November after the cultivation of a new potato batch. "The team will communicate and work closely with the relevant parties in order to accurately study its dimensions," Amir Nabil, head of the ECA, told local media on Monday. The supply ministry began on Wednesday to offer via its outlets various types of vegetables and fruit at lower prices than in the market in an effort to control price hikes, particularly potatoes as the local market continues to witness a shortage of the vegetable after its price had soared to unprecedented levels. The shortage was felt starting from early October as potato traders allegedly stashed the output in order to rake in enormous gains by hiking retail prices. The Potato Producers Association justified the increase in price by saying farmers had planted smaller crops this year after they were underpaid last year. It also cited climate change as one of the reasons affecting the crop's quality this year. According to some merchants in Giza, fresh potato prices are starting to become more stable, with prices ranging between EGP 11-12 (around $0.7) per kilo. However, Agriculture Minister Agriculture Minister Ezz Eldin Abu Setet called on Egyptians on Monday to boycott overpriced goods and products "in order to avoid creating a monopoly among traders," saying that merchants have "unjustifiably" raised prices. Egypt's potato exports doubled nearly twice last year and eight times over the past 11 years, according to data reported by the Central Agency for Public Mobilization and Statistics (CAPMAS). | | Egypt's Strategic Wheat Reserves Sufficient Until March 2019 Egypt has strategic reserves to cover wheat consumption until March 2019, the supply ministry said on Monday. Egypt, the world's largest wheat buyer, sees this as a safe level for inventory, Reuters quoted the ministry's spokesman Ahmed Kamal as saying. Bread has always been on top of Egyptians' staple food list, which results in a particularly high consumption of wheat. The General Authority for Supply Commodities bought 470,000 tons of wheat in a purchase tender on Friday, to be delivered between December 11 and 20. This included a 60,000 tons cargo of US wheat, its first purchase from the US in a tender since May 2017. The Egyptian purchase of the US supplies helped Chicago wheat extend its gains on Monday to reach a 10-day high. | | Egypt's Tumor Treatment Budget Will Double in 2019, Says Official Egypt's tumor treatment budget stands at EGP 2.5 billion (about $140 million) and the government aims to double it next year to reach EGP 5 billion ($279 million), an Egyptian official said. "The Health Insurance Organization (HIO) has increased its budget by about EGP 5 billion this year, particularly due to the increase in customer contributions and the additional taxes imposed on cigarettes," Abu Bakr El Mekkawy, head of the central department of therapeutic affairs at HIO, told local media on Monday. "It has also increased the number of contracts with external parties to provide better services to patients and offer modern drugs for a range of diseases." Ola Khorshid, an Oncology professor at the Egyptian National Cancer Institute, said on Monday that there are "more than 20,000 new cases of breast cancer annually in Egypt, 20 percent of which are detected late." The health ministry's budget is expected to surge by EGP 8 billion ($446 million) during the 2018/2019 fiscal year to reach EGP 63 ($3.5) billion versus EGP 55 billion in the previous year. | | Registry of Egyptians Abroad Begins Through Data from Passport Control, Civil Service A committee to create a database for all Egyptians working abroad will rely on data obtained from the country's passport control and the interior ministry's civil service records, Minister of Immigration Nabila Makram said on Monday. The ministry of communications and information technology will receive all information of the 10 million Egyptians estimated to be living abroad and digitize them into the database, Makram added. The minister previously denied that this move was meant to collect extra taxes from Egyptians abroad, adding that the database aims at integrating the country's foreign-based nationals into Egypt's 2030 vision. The 2030 vision is intended to bolster the Egyptian economy's competitiveness by measures such as lowering the country's debts and creating more jobs. | | Indonesian Plane Crashes into Sea, All 189 on Board Feared Dead Indonesian search and rescue officials have recovered some bodies from a passenger airliner that crashed into the sea on Monday with 189 people on board with likely no survivors. The plane tried to return to Jakarta minutes after take-off and it has now been revealed that it has previously suffered technical problems. Lion Air Flight JT 610 took off from Jakarta heading to an island off Sumatra, but lost contact just 13 minutes after take-off. Search units have also recovered ID cards, bags, mobile phones and other belongings. Lion Air's chief executive Edward Sirait told reporters the plane had suffered "a technical issue" on Sunday night but engineers had given it the all-clear to fly on Monday morning. "This plane previously flew from Denpasar to Jakarta," he said. "There was a report of a technical issue which had been resolved according to procedure." Sirait did not elaborate on the specific issue, and said he had no plans to ground the rest of Lion Air's fleet. | | Region Woman Blows Herself Up in Tunis, Giving Tourism No Respite A suicide bomber blew herself up in the heart of Tunisia's capital, an explosion that killed no one but is likely to damage the country' tourism that has only recently showed signs of recovery. At least nine people were injured in Tunis, according to the interior ministry, most of whom were in the Habib Bourguiba avenue in the middle of the city. The ministry has branded the blast a "terrorist explosion." Tunisia's industry of hospitality started to pick up of late after over three years of deterioration, thanks to two deadly terror attacks that took a toll on the sector. In March 2015, 21 were killed in an attack on Bardo Museum in Tunis. Thirty-nine people were gunned down in a Sousse beach resort a few months later. According to official date, Tunisian tourism revenues jumped 40 percent in the first half of this year, compared to the same period in 2017. Officials speculated this season would witness record-breaking eight million tourists. | | Politics Merkel Resigns as Party Leader, to Step Down as German Chancellor in 2021 German Chancellor Angela Merkel said it would not seek re-election in 2021 after stepping down as the leader of the country's ruling Christian Democratic Union (CDU) after 18 years. "The time has come to open a new chapter," Merkel stated in an address at her party headquarters on Monday. "As chancellor and leader of the CDU, I'm politically responsible for everything; for successes and for failures." Merkel, 64, has led the CDU since 2000 and became the first female and first East German to serve as Chancellor in 2005. Stepping down as CDU chairwoman further undermines her authority, especially after the CDU won its lowest vote share since 1949. Her decision also allows for a successor to build a profile prior to the next national election. Her preferred heir is CDU Secretary General Annegret Kramp-Karrenbauer. However, Health Minister Jens Spahn, a leading critic of the chancellor's open-door migration policies, has already announced his candidacy. | File photo of Hossam Hassan Egypt's All-Time Leading Scorer Hossam Hassan Takes Charge of Pyramids FC Big-spending Egyptian Premier League club Pyramids FC named the country's all-time leading scorer Hossam Hassan as their new coach on Monday, dismissing veteran Argentinean manager Ricardo La Volpe. Hossam's twin brother Ibrahim Hassan was also appointed the team's football director, Pyramids said on their official Twitter account. Earlier in the day, Hossam Hassan abruptly stepped down as the coach of Masry, whom he has led since 2015, turning them from a mid-table outfit to a top-four team. Under his guidance, the unfancied Masry reached the Egypt Cup final in 2016 and qualified for the African Confederation Cup semi-final this year before losing to DR Congo's Vita Club. Pyramids, who are owned by Saudi Arabia sports chief Turki Al-Sheikh, have spent big in the close season in an ambitious attempt to dethrone league holders Ahly, Egypt's most popular club. They lie fourth in the league table with 16 points from nine games. "I joined Pyramids because it's an ambitious club that wishes to win titles," Hassan, an iconic football figure in Egypt and Africa, said in a television interview. | |
