| Egypt's Central Bank 'Will Move to Inflation Targeting': Official The Central Bank of Egypt (CBE) will start targeting inflation as part of its monetary policy, two years after the country floated its currency, Zawya reported Deputy Governor Lobna Helal as saying during a conference in Abu Dhabi on Tuesday. "We will move to inflation targeting, a flexible inflation targeting framework," said Helal, who also said that the country does not have any plans to resort back to its previous strategy of fixing the pound's exchange rate. Last month, official statistics body CAPMAS revealed that Egypt's annual urban consumer inflation rose to 16 percent in September from 14.24 percent in August. In June, Egypt's latest round of austerity measures included deep fuel and electricity subsidy cuts as well as increases in transportation prices. They came as part of the terms of a $12 billion International Monetary Fund loan program Egypt agreed to in late 2016. In November 2016, Egypt's central bank floated the pound currency, halving its value in attempts to ease a hard currency crunch. | | Oriental Weavers' Q3 Profit Weighed Down by Lower Exports, Higher Costs The earnings of carpet and rug manufacturer Oriental Weavers (OW) during the third quarter of 2018 were negatively impacted by a decline in exports and a rise in production costs, said investment bank Naeem in a research note. The decline in OW's exports was attributed to the products upgrade program that took two months and was organized by a key European client, said Naeem. Oriental Weavers' consolidated net profit for the third quarter of 2018 fell by 11.1 percent to EGP 110.1 ($6.1) million, from EGP 123.8 ($6.9) million. The company said on Thursday it posted a 27.1 percent year on year decline in consolidated net profit for the first nine months of 2018 to EGP 436.4 ($24.4) million, down from EGP 598.8 million recorded in the corresponding period of 2017. The nine-month net sales rose slightly by 0.7 percent to EGP 7.6 billion, up from EGP 7.5 billion. OW said in August it had recorded a 44 percent year on year drop in net income to EGP 115 million in the second quarter of 2018, while sales' revenues grew 5 percent year on year to reach EGP 2.5 billion. In April, the carpet manufacturer said it was targeting an 8 percent growth in its export revenues in 2018 in light of fresh export orders from customers in new and existing markets. It said in March it was planning to acquire assets worth EGP 147.6 million this year. | | Kahira Pharmaceuticals' Q1 Profits Rise on Strong Sales Kahira Pharmaceuticals said its preliminary financial indicators for the first quarter of the 2018/2019 fiscal year showed a rise in profits by 21.9 percent to EGP 31.2 million ($1.7 million), from EGP 25.6 million in the corresponding period a year ago. Net sales for the same period saw an increase to EGP 260 million ($14.5 million), from EGP 199 million in the first quarter of 2017/2018. The drug manufacturer's three-month profits were backed by a rise in revenues to EGP 263.6 million from EGP 201 million despite an increase in costs and general expenses, according to a company statement. The company also said it targets an increase in bottom line for the current fiscal year to EGP 99.7 million, up from EGP 88.5 million for the previous year. Meanwhile, a report issued by information technology company IMS Health earlier this week showed that pharmaceutical manufacturers operating in the local market recorded EGP 47.9 billion ($2.7 billion) in sales during the first nine months of 2018, a growth of 30.7 percent year on year. Pharmaceutical sales amounted to around EGP 6 billion ($335 million) in September with a growth rate of 31 percent year on year, bringing the total value of sales in the third quarter of 2018 to EGP 17.1 billion ($954 million). The government approved two successive rounds of increases in medications in May 2016 and January 2017, heeding calls from pharma companies which complained that manufacturers were incurring losses due to the rapid changes of economic conditions. | | Real Estate  Porto Group to Develop New Urban Project in Mostakbal City Egypt's real estate developer Porto Group, a subsidiary of Porto Group Holding, has signed a deal with El Mostakbal for Urban Development to establish "Porto City," its newest integrated urban project in the new city east of Cairo. "The agreement was signed as part of the company's expansion plan of developing new projects, adding to its achievements," Porto Group Chairman Mohamed Abdel Razek told local media on Monday. Through its newest 151-acre project, Porto Group will move ahead with its vision of creating modern and sophisticated urban communities that comprises recreational products to provide various means of relaxation and comfort, according to Abdel Razek. | | Real Estate Emaar Misr's Profits Rise 20.8% in 9M Profits of Emaar Misr for Development, the Egyptian arm of UAE's Emaar Properties, rose by 20.8 percent during the first nine months of this year compared to the same period in 2017, a company statement read. The company's net profits registered EGP 1.8 billion ($100.4 million) in the first nine months of 2018, up from EGP 1.5 billion in the same period last year. Emaar Misr's net profits in the third quarter of 2018 recorded EGP 657.6 million, up from EGP 479.4 ($36.7) million in the third quarter of 2017, a 37.2 percent increase. The company's revenues in the first nine months of this year increased by 8.6 percent to EGP 2.8 billion ($156.1 million), up from EGP 2.6 billion generated last year. | | Real Estate Amer Group Posts 15% Decline in Net Profits in 9M Egypt's developer Amer Group Holding has reported a 15 percent decline in its net profits during the first nine months of this year, affected by a drop in total revenues. The company achieved net profits of EGP 70.8 ($4) million during the aforesaid period, compared to EGP 83.7 ($5) million in the corresponding period in 2017, according to Amer Group's financial results that were released on Tuesday. Amer Group's revenues fell to EGP 1.31 billion ($73 million) versus EGP 1.6 billion in the year-ago period. The group had earlier reported a drop in profits of 13 percent in the first half of 2018 to reach EGP 55.08 ($3.1) million, compared to EGP 63.3 million in the prior-year period -- taking into account minority interests. | | Real Estate Al Ahly Launches $139 Mn Villa-Only Project in Mostakbal City Key developer Al Ahly for Real Estate Development (Sabbour) has launched "The Ridge," its latest villa-only community in Mostakbal City east of Cairo, with total investments of EGP 2.5 billion (around $139 million). On a plot of land totaling one million square meters and a built-up area of 400,000 square meters, The Ridge is set to feature eight types of elevations, offering a total of 1,400 units within the mixed-use urban community, Sabbour said in a statement. The project's first phase will be delivered in 2023. Located 30 kilometers east of Cairo, The Ridge is in close proximity to New Cairo city from the west and the New Administrative Capital from the east, as well as Cairo's International Airport. It will encompass two clubhouses and offers an array of units with sizes ranging between 260 and 380 square meters and varying modules, including standalone villas, twin houses and townhouses. Meanwhile, Ahmed Sabbour, managing director of the company, revealed that his company had achieved contract sales of EGP 5 billion ($279 million) by the end of last month, driven by a strong demand in the local market as well as the launch of new projects, he told Al-Mal newspaper. Sabbour also said the company is currently adopting a new expansion plan, in which the developer intends to extend its projects across a number of new cities, including New Alamein and New Mansoura cities. | | Mostakbal, Misr Italia in Tie-Up to Embark on Developments Worth $614 Mn El-Mostakbal for Urban Development has signed a partnership agreement with Misr Italia for Real Estate Investment to develop a mixed-ownership residential project over an area of 268 acres in "Mostakbal City" at investments worth EGP 11 billion (nearly $614 million), said El-Mostakbal Chairman Essam Nassef. El-Mostakbal is the owner and master developer for "Mostakbal City" project, located east of Cairo. "The company is keen on joining hands with serious real estate developers across various segments to capitalize on their capabilities, resources and solvency to achieve the company's vision and development plan for the project," Nassef told reporters. He noted that this synergy is part of a series of agreements that were successfully sealed by El-Mostakbal recently with a number of developers for the development of land plots in phases I and III of the project. The new partnership comes a day after El-Mostakbal signed an agreement with Porto Group to co-develop a mixed-use project, Porto City, in Mostakbal City. | | Beltone Says Sarwa Capital's IPO Prospectus Contained No Irregularities Beltone Financial said Tuesday that the prospectus for the initial public offering of consumer finance provider Sarwa Capital contained no irregularities, according to Reuters. The IPO of Sarwa Capital was managed by Beltone last month, but the share price fell sharply on its debut in the Cairo stock market in mid-October. Meanwhile, Beltone's board of directors approved on Monday a recommendation from the company's executive management to cancel the planned increase in issued and paid-in capital amid legal problems. The company earlier planned an increase in its capital by EGP 1 billion to EGP 1.338 billion ($74.7 million), up from EGP 338 million. This comes while Beltone is under scrutiny by the capital market regulator amid claims of violations made during the Sarwa Capital IPO. The Financial Regulatory Authority last Thursday banned Beltone's underwriting unit from operating for six months. It also imposed a fine on Beltone Securities through raising the value of insurance at the market regulator to EGP 50 ($2.8) million. | | Edita to Acquire Confindel Limited's 22% Minority Stake in Edita Confectionary Edita Food Industries is planning to acquire 22.27 percent of the shares of Cypriot company Confindel Limited in Edita Confectionary, one of its subsidiaries which it already owns a 77.7 percent stake in, CEO Hani Berzi told Al-Mal newspaper. Edita Confectionary is specialized in confectionaries and owns a 25,000 meter factory in the Upper Egypt governorate of Beni Suef with four production lines. The deal, which Berzi hopes will conclude before the end of the year, will be financed by Edita Food Industries' cash liquidity. Berzi added that the aim of the deal is to further expand the projects of Edita Confectionary, which is struggling to attract investments given that some of its foreign investors are reluctant to inject money into the country now. The CEO did not specify the amount of investments his company plans to make in Edita Confectionary, but said that it has recently pumped EGP 20 ($1.1) million to build a new production line that will be ready before the end of this year. Edita Food Industries has recently expanded into Morocco with $10 million in investments and will operate its first project there by the fourth quarter of 2019. The company's profits grew by 55 percent in the first nine months of 2018, registering EGP 200 ($11.2) million, up from EGP 129 million during the same period last year. | | Hilton Plans to Increase Hotel Capacity in Egypt by 40% Hilton Worldwide, the global hotel operator, is seeking to increase the capacity of its hotels in Egypt by 40 percent over the coming three years through the management of eight news hotels that are currently under construction and scheduled to be inaugurated in turns until 2022. Speaking exclusively to Al-Mal newspaper, Mohab Ghali, Deputy Head of Operations for Hilton in Egypt and North Africa, said the group currently manages 17 hotels in the country and intends to increase the figure to 25 in the coming three years. The group reached an agreement to manage the 420-room Hilton Giza Pyramids, which is located next to the new Grand Museum and scheduled to be opened in 2021. It also reached agreements to manage hotels in El-Gouna, Port Said, Sokhna, Maadi, Fifth Settlement and Damietta, according to the official. He also noted that the group has recently signed two memorandums of understanding with the prime minister for the management of two hotels in Al-Alamein and the North Coast. Ghali also said Hilton plans to raise the value of its room sales by 12-15 percent next year in light of market indicators and given the recent rise in prices. He highlighted an increase by 30 percent in Egypt's hotel occupancy rates. Hilton opened last February the new 593-room Hilton Cairo Heliopolis, as part of Hilton Worldwide's plan to expand in Egypt with 1,000 hotel rooms in 2018. The company has also confirmed plans to re-open the 247-room Towers Luxury Hotel as Africa's first Waldorf Astoria in Cairo later this year. | | ETA Exempts Re-Exported Packaging Products From VAT The Egyptian Tax Authority (ETA) has agreed to exempt the re-exported packaging products from the value added tax (VAT), reversing a decision to exclusively grant that exemption to imports of the same products. A large number of corrugated cardboard manufacturers as well as manufacturers of packaging materials had previously filed a complaint to the Federation of Egyptian Industries, saying they have been negatively affected by the state's temporary printing system. The temporary system stipulates that all imports of recycled packaging and cardboard materials are exempted from VAT, with manufacturers complaining that this decision resulted in a flood of imports to the country, affecting their business. Investments of corrugated cardboard companies in Egypt stand at about $10 billion and the number of employees in the industry exceeds 20,000 workers. | | HyperOne to Expand to New Assiut With $28 Mn Investments HyperOne, one of the largest hypermarket chains in Egypt, is looking to expand in New Assiut City with investments worth over EGP 500 ($27.9) million, CEO Mohamed El-Hawary told local media during a visit to the Upper Egypt city. HyperOne's new retail complex will be on an area of 55,000 square meters and will provide 2,500 direct job opportunities in addition to thousands of indirect job opportunities to the Minya governorate's youths, according to El-Hawary. The company is currently working on building a new branch in Sulaymaniyah City, located on Egypt-Ismailia Road, with investments worth EGP 500 ($27.9) million. At the beginning of the year, El-Hawary said his hypermarkets aim for EGP 6 billion ($334.7 million) in sales in 2018, which will be an increase of 11 percent compared to EGP 5.4 billion in sales recorded last year. | | International EFG Hermes Seeks to Go East in Further Expansion Investment bank EFG Hermes is looking to expand further east, possibly to Vietnam, as part of a wider expansion plan that saw it acquire a number of businesses in African and south-Asian countries, a bank official said. "We like to go to markets where there are high barriers to entry, a lack of international competition, so we want to be the big international fish in the pond," head of the bank's Frontier Markets Division Ali Khalpey told Reuters-affiliated website Zawya. He added that Vietnam is EFG Hermes' next potential target, which is a market that its frontier market research team led by Kato Mukuru is already covering. Khalpey said that Vietnam's population is rapidly growing and that the country had been "revolutionized" by opening up to foreign investment -- most notably from Japanese and Korean firms investing in its semiconductor industry. "You go to Saigon today and it's nothing like it was even five years go," Khalpey said. Last year, the investment bank acquired businesses in Pakistan and Nigeria, opened a representative office in Bangladesh and started a business from scratch in Kenya, according to Khalpey. Khalpey said that its Nigerian acquisition, which is still subject to regulatory approval, should be completed "in a few weeks", adding that it was a key market for the firm as the country has a population of 200 million and a $400 billion economy with many sectors under-represented on its stock exchange. | | Egyptian Companies Tap China for Agricultural Crops, Foodstuff Exports Twenty-six companies participating in Egypt's pavilion in the first China International Import Expo (CIIE) see strong export potential for their products in the Chinese market, said Mahmoud Safwat, Head of Agricultural Crops and Food Industries at the Export Development Authority (EDA). Most of these companies are operating in agricultural crops, food industries, fertilizers and aromatic plants, Safwat added. Safwat told state news agency MENA that the companies are currently exploring cooperation opportunities in China. "The idea of exporting products to China is unfamiliar to Egyptians, who are used to be importers of Chinese products," he added. "The focus is currently on the possibility of exporting citrus, dates and certain foodstuff." Prime Minister Mostafa Madbouly, who is accompanied by Minister of Trade and Industry Amr Nassar, is heading the Egyptian delegation to the exhibition. | | Capital of Emirates NBD's New Investment Fund Worth $5.5 Mn Capital of Emirates NBD-Egypt's investment fund will be EGP 100 ($5.5) million at inception, divided into 100,000 certificates at EGP 1,000 each, Al-Mal newspaper reported. The bank has subscribed to 5,000 certificates at a total value of EGP 5 million, according to the report. Emirates NBD-Egypt announced on Monday the launch of its first investment fund in the local market, "Mazid," with cumulative periodic return. A bank statement said it will be specialized in capital markets. "The fund was launched to stress the bank's leadership in the Egyptian market through offering available banking products that meet the various needs of different customers," the statement read. The EFG Hermes Group is managing the fund according to investment controls, while ratios are determined by the bank. The fund will invest in short-term debt instruments, said Mohamed Berro, CEO of Emirates NBD Egypt. He added that he expects the fund to be met with great demand by retail and corporate clients. Subscription to the fund will kick off on November 13 and run for two months. It may be closed after ten days in case it is fully covered. | Sisi speaks during the World Youth Forum Sisi Orders Formation of Committee to Review Controversial NGO Law President Abdel Fattah El-Sisi has commissioned the cabinet to form a committee to review a controversial law governing non-governmental organizations, he said at the World Youth Forum's concluding session yesterday. The committee will consist of representatives of the foreign and social solidarity ministries as well as other relevant governmental bodies, and will be tasked with preparing an amended version of the law. The committee, the president said, should review similar experiences in other countries and conduct a "comprehensive national dialogue in which various youth groups take part" before coming up with a new bill, which should later be approved by the parliament and El-Sisi. On Sunday, El-Sisi said the current law should be reconsidered when was asked about it during the four-day event in Sharm El-Sheikh. The president ratified the current law, which was passed by the parliament less than a year earlier, in May 2017 despite criticism from human rights groups which said the bill effectively bans NGOs. The law restricts the activity of NGOs to developmental and social work. It also requires them to get an approval from authorities if they receive more than EGP 10,000 ($550) in donations. | | Region Lebanese Tourism Minister Visits Egyptian Embassy to Reiterate Apology for Offensive Remarks Lebanon's tourism minister visited Egypt's Ambassador to Lebanon Nazih Al-Najari on Tuesday to reiterate his apologies for the disparaging remarks he made about Egypt. Avedis Guidanian said he appreciates the Egyptian-Lebanese relations, especially in the tourism sector, and underlined his respect for Egypt and its people, according to Lebanon's National News Agency. Guidanian had referred to Egypt as a "dirty place" while blaming what he described as negative media reports on Lebanon's lackluster tourism industry in an interview with Lebanon's The Daily Star newspaper. "I mean look at Egypt is there a place dirtier than it? People are louder than us, there is more traffic than here -- people live in graves, OK? But there is tourism because they know how to sell that country," he said. In a phone-in with Egyptian television show Sada El-Balad (The Country's Echo) on Monday, Guidanian said that he did not mean to describe Egypt as a dirty place, highlighting that no Lebanese person, including officials, can label the country as such. | | International Sisi Hopes GERD Filling Process Won't Affect Lives of Egyptians President Abdel Fattah El-Sisi said on Tuesday that while African countries had generally agreed to support developmental projects, including the Grand Ethiopian Renaissance Dam (GERD), such projects should not affect the lives of Egyptians amid worries the dam could reduce the country's share of Nile water. "We want to turn Ethiopia's good intentions into concrete agreements. However, we also need to consider that the process of the GERD filling will not affect Egypt's water quota from a technical point of view," El-Sisi said on the sidelines of the World Youth Forum (WYF) in Sharm El Sheikh on Tuesday. "The technical committees have not yet reached an agreement, but we want to ensure that GERD will not be exploited for political purposes and there are positive indicators regarding such matter that came from the new Ethiopian leadership." Ethiopia insists the dam will not affect the flow of the Nile once its reservoir is filled. Egypt fears that its share of the river water will dramatically decrease if the reservoir is filled in less than seven years. Meanwhile, Minister of Irrigation and Water Resources Mohamed Abdel Ati said on Tuesday that Egypt is in "urgent need of rationalizing its water usage in order to meet the population's needs of establishing new drinking water stations." In an interview with Extra News channel, Abdel Ati has stressed that "the use of modern methods of irrigation and agriculture is urgent and will indeed benefit the state and farmers alike." Earlier this year, the irrigation ministry decreed that only 750,000 acres of rice can be planted this year, down from 1,700,000 acres, as the country seeks to save around 3 billion cubic meters of water by restricting the cultivation of crops that need large amounts of water. | Egyptian Weightlifter Sara Samir Weightlifter Sara Samir Gives Egypt Three More Medals at World Championship Weightlifter Sara Samir won three more medals for Egypt at the World Championship in Ashgabat, Turkmenistan yesterday, clinching two silvers and one bronze. Samir won a silver medal in the 71 kg category after lifting 152 kg in the clean and jerk and a bronze in snatch after lifting 111 kg. She won another silver medal in the total results with 252 kg, 15 kg short of gold medalist Zhang Wangli of China. On Monday, Egypt's star Mohamed Ihab set a record after winning the gold medal in the men's 81 kg event, lifting 173 kg in the snatch. Ihab and Sara won bronze medals at the 2016 Olympic Games in Rio de Janeiro. | | Region Qatar Emir Shuns Saudi Praise in Annual Speech: Bloomberg Qatar's emir addressed the national assembly and discussed economic growth and plans for infrastructure projects but did not comment on efforts to end the Saudi-led boycott of his country or the Saudi crown prince's remarks on the resilience of Qatar's economy last month in Riyadh, Bloomberg reported. "While [Sheikh Tamim bin Hamad Al Thani] isn't known for grand public overtures, the speech also highlights what economists describe as Qatar's successful efforts to weather the impact of the embargo imposed by Saudi Arabia and three of its allies in June 2017," Bloomberg said in its report. The Qatari emir was more focused on plans to develop the country's infrastructure ahead of the 2022 FIFA World Cup finals, in addition to efforts to maintain its status as the world's biggest exporter of liquefied natural gas. In 2017, Saudi Arabia, the UAE, Bahrain and Egypt severed diplomatic and trade relations with Qatar, including closing land, air and sea links. They accused the tiny Arab Gulf state of supporting terrorist groups. However, Qatar denied the accusations, saying the boycott aims to "impinge on its sovereignty." | | Oil & Gas Rosneft's Q3 Net Profits Skyrocket Due to Soaring Oil Prices Russia's largest oil producer Rosneft almost tripled its third quarter net profits to 142 billion roubles ($2.2 billion), an increase of 250 percent, as higher crude output and prices outweighed impairments on downstream operations. Rosneft, which includes British Petroleum (BP) and Qatar among its shareholders, accounts for about 40 percent of Russia's oil output. The company increased daily oil production in the third quarter by 3.4 percent year on year. The company did not disclose its latest net debt figure, but analysts at Moscow brokerage BCS put it at $71.7 billion, down about 8 percent from the previous quarter. Also on Tuesday, Rosneft said that the Qatar Investment Authority (QIA) sovereign wealth fund would pay around €3.7 billion ($4.23 billion) for half of a 14.16 percent stake in the company, Reuters reported. The QIA would become the third-largest Rosneft shareholder as a result of the deal after the Russian government and British oil major BP, the company added. Trader Glencore would retain a 0.6 percent stake. | |
