| IMF Reaches Staff Agreement to Disburse $2 Bn to Egypt The International Monetary Fund (IMF) said it had reached a staff-level agreement with Egypt to disburse another $2 billion from the country's $12 billion extended fund facility arrangement. The latest funds will bring the total disbursements under the program so far to about $10 billion. They will be available upon the IMF executive board's approval of a fourth review of the three-year program, the IMF said in a statement. The IMF team, which visited Egypt from October 18-31, said in its review that the country's economy "has continued to perform well, despite less favorable global conditions, supported by the authorities' strong implementation of the reform program." They specifically praised the increase in the country's GDP growth from 4.2 percent in the 2016/2017 fiscal year to 5.3 percent in the following financial year, which ended last June, as well as the decline in unemployment to below 10 percent. The IMF team said it expects Egypt to "aim at keeping general government debt on a clearly declining path and achieving a primary surplus of 2 percent of GDP" in the current fiscal year and beyond. Egypt's general debt has reached its highest level in June, recording EGP 3.7 trillion ($206.5 billion). The foreign debt has increased by 17.2 percent year on year at the end of June 2018 to reach $92.6 billion, with experts estimating that it could hike to $98.9 billion by the end of the year. Egypt's efforts to reduce its debts might prove to be a fine balancing act, as it has also borrowed from other institutions since its 2016 loan deal with the IMF. Earlier this month, the country signed a $3 billion financing deal with the World Bank. According to the central bank, in the ten years between 2019 and 2028, Egypt will work on paying off around $65 billion of its foreign debts, which represent about 68 percent of the country's medium and long-term loans. By the year 2054, Egypt will have paid medium and long-term loans valued at around $96.8 billion, $21.8 billion of which are loan interests. | | Govt Calls on Pharmaceutical Companies to Set New Prices for 5 Medicines Nile Pharma, a subsidiary of the state-run Holding Company for Pharmaceuticals (HoldiPharma), has called on its branches and distribution companies to set new price tags for five pharmaceuticals, to be sold at new prices with an increase of more than 100 percent. "New prices can soar by five times for some of the listed medicines," Nile Pharma said in a statement on Wednesday. Public Enterprise Sector Minister Hesham Tawfik had earlier asked the health ministry to increase prices of 400 medicines due to the huge losses incurred by their producers, which exceeded EGP 350 ($20) million per year. Tawfik had also revealed the ministry's plan to develop pharmaceutical companies in Egypt at an investment cost of around EGP 750 ($42) million as it aims to align 17 production lines with good manufacturing practice requirements. He said that under the new schemes, Holdipharma will be looking to quadruple its exports to meet the local market's demands. A slump in the Egyptian pound following its flotation in late 2016 has made it difficult for pharmaceutical companies in Egypt to import the ingredients required to produce medicines that millions of poor Egyptians depend on. Medicine prices have consequently soared, resulting in a shortage of a number of pharmaceutical drugs. Drug shortages have been a common trend since 2016, with the government attributing it to a hike in the US dollar exchange rate, given that the active pharmaceutical ingredients are purchased in foreign currency | Planning Minister Hala El-Saeed Egypt Targets 10% GDP Growth by FY2029/30: Minister Planning Minister Hala El-Saeed said that the government is seeking to achieve a growth rate of 10 percent in the country's gross domestic product by the end of the 2029/2030 fiscal year. Speaking to a conference held in Beirut, the minister added that the government aims to reach a growth rate of 5.9 percent in 2018/2019, to be gradually increased to 8 percent and then 10 percent by 2029/2030. Egypt's gross domestic product grew to 5.3 percent in the 2017/2018 fiscal year for the highest rate in a decade as the country showed signs of economic recovery amid the tough reforms it is enacting, including tax hikes and subsidy cuts as part of a $12 billion IMF loan deal. In early October, the World Bank forecast Egypt's growth to reach 5.8 percent in 2020, driven by the country's economic reform program. It predicted that growth would reach 5.6 percent in 2019, supported by private consumption, a continued recovery of the vital tourism sector and the new operations of recently discovered gas fields. Finance Minister Mohamed Maait also said in October that Egypt was targeting an economic growth of 8 percent by 2021/22. Egypt's economy has been hurt by years of turmoil following the 2011 popular uprising. | | Stock Market  Sarwa Capital's Stock Jumps as Orascom Investment Set to Acquire 30% of Shares The newly stock-listed Sarwa Capital's stock jumped by 10 percent in yesterday's session, as Orascom Investment Holding (OIH) said earlier in the day that it was looking to acquire 30 percent of the shares of the finance solutions company in November. Sarwa's shares, which made its IPO in mid-October, closed at EGP 6.17 ($0.34). OIH requested approval from the regulator to buy a non-controlling stake of 216 million shares of Sarwa at EGP 7.36 per share. If OIH only acquired between 144 million and 216 million shares, it would pay EGP 6.62 a share. Orascom Chief Executive Tamer El Mahdi told Reuters that the market price per share of Sarwa was very attractive and that Orascom had the liquidity to make the acquisition. Sarwa's shares, which sold at EGP 7.36 its IPO, fell by about 15 percent on the first day of trading on October 15. | | Egypt Kuwait Holding to Build $167.5 Mn Wood Factory Egypt Kuwait Holding Company said it will start construction of a wood factory in Upper Egypt's Minya governorate next March with investments worth EGP 3 billion ($167.5 million). The factory will span over 30 acres and is scheduled for completion by mid-2020, the company's CEO Moataz Al Alfi said in a conference on Wednesday. He added that his company is currently in talks with banks for an EGP 1 billion ($55.8 million) loan to finance the factory's construction, which he said is expected to generate revenue of $50 million during its first year of operations. Egypt Kuwait Holding company has $2.1 billion worth of diversified investments in the fields of fertilizers and petrochemicals, energy, insurance, manufacturing, information technology, transport and infrastructure. | | SAIBANK Puts 9-Month Loss Down to Tax Burdens on Debt Portfolio SAIBANK attributed the net losses it recorded in its financial results until September 30 to tax burdens on its portfolio of government bonds. The portfolio of government bonds held till maturity date saw $32.7 million in tax burdens, which came in excess of the $27.8 million net profit realized before tax, the bank said in a bourse filing. The bank recorded a net loss of $4.8 million during the first nine months of 2018 compared to a $28.7 million net profit in the same period a year ago. Financial results for the first six months of 2018 showed a net loss of $3.55 million versus $23.42 million in net profit in the corresponding period last year. The issuance of government bonds dragged worldwide, as debt investors were scared away by the volatility of emerging-market currencies. | | Alexandria Flour Mills' Profit in Q1 FY2018/19 Down by Over 50% Alexandria Flour Mills and Bakeries' earnings fell by 53.8 percent year on year in the first quarter of the 2018/2019 fiscal year, the company's financial indicators that were sent to Cairo's bourse showed on Wednesday. The flour milling company generated EGP 8.5 million ($475,000) in net profit during the three-month period, down from EGP 18.4 million ($1.02 million) in the same period of 2017. Sales in the first quarter also sagged to EGP 62.2 ($3.5) million from EGP 162.6 million ($9 million). The profit decline was attributed to the implementation of a new system of milling, coupled with a fall by 82 percent in volume of milled flour due to a decrease in the quota disbursed to bakeries. The company's revenues during the previous financial year decreased to EGP 341.4 million from EGP 1.2 billion in 2016/2017. The company's financial year starts on July 1 and ends on June 30 of every year. | | NileSat's Nine-Month Profits Plummet 20% on Lower Income Egyptian Satellite Co. (NileSat) reported a 20.4 percent decline in net profit for the first nine months of 2018, which was attributed by the company to a decrease in revenues. The company, which operates Egypt's commercial satellites, generated a net profit of $41.5 in the nine-month period, compared with $52.2 million in the same period a year ago. Revenues during the same period fell to $109.3 million from $118 million. NileSat earlier reported a decline in net profit for the first half of 2018 to $73.4 million, while topline amounted to $79.71 million. | | Misr Oils and Soap Profits Down 61% in Q1 FY2018/19 Misr Oils and Soap Company suffered a decline of 61 percent year on year in its profit during the first quarter of the 2018/2019 fiscal year, posting EGP 1.8 million (about $100,513) during the three-month period which ended in September, the company's audited financial results showed. A profit of EGP 4.8 million ($268,007) was recorded in the corresponding period of the 2017/2018 fiscal year, according to the company's bourse filing on Wednesday. Misr Oils and Soap Company financial results revealed that it has recorded a net profit of EGP 1.6 million ($90,985) from the beginning of July until the end of September, compared to EGP 5 million during the year-ago period. The company said in April it was targeting EGP 3.5 million ($195,367) in profits during the 2018/2019 fiscal year, against a target profit of EGP 1.5 million for the previous fiscal year. | | Sheeni Incurs Initial Losses of About $132,000 in Q1 FY2018/19 The General Company for Ceramic and Porcelain Products (Sheeni) said it has incurred an initial loss of EGP 2.35 million (nearly $131,606) during the first quarter of the 2018/2019 fiscal year. Sheeni had previously recorded profits of EGP 2.5 million ($141,645) in the corresponding period last year, the company said in a bourse filing. "In an attempt to overcome the company's losses, state-run Chemical Industries Holding Company is developing a three-pronged plan that includes the revamping of exhibitions to market products and raise revenues," Sheeni added. "The plan also includes qualifying employees to work in a similar system to the private sector by adopting a new philosophy based on sales revenues." Sheeni earlier announced that it had signed a deal with state-owned Holding Company for Tourism and Hotels to allow the latter to market and sell Sheeni's products through its outlets. The products include ceramic, sanitary ware and porcelain tableware. | | Region HSBC Eyes Doubling Its MENA Commercial Bank's Profits by 2023 HSBC expects to more than double profits of its commercial bank in the MENA region in the next five years, thanks to China's "Belt and Road" (B&R) initiative and plans by Gulf economies to diversify from oil, a senior bank executive said. "You have probably two of the biggest infrastructure programmes ever undertaken: the Middle East transformation programs and the B&R initiative. We are in many of the countries where this is being undertaken, so we are at the heart of it," Daniel Howlett, HSBC regional head of commercial banking in MENA region, told Reuters on Wednesday. In 2017, the commercial bank reported a profit of $199 million in MENA and $6.8 billion globally. The bank includes trade finance, cash management and capital financing. "The commercial bank's Middle East pipeline was better than ever, with clients looking for financing for cross-border mergers and acquisitions, projects, trade services, lending and other products," Howlett added. According to Howlett, Saudi Arabia, UAE, Kuwait and Qatar are among governments pushing ahead with plans to shift their economies away from a dependence on oil revenues. He said HSBC was pondering new businesses related to those plans in sectors such as education, infrastructure and private equity. He highlighted that UAE, Egypt and Kuwait are "stand out markets for growth." 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. | | Banque Misr Sells 2% Stake in Saudi Arabia's Samba for $370 Mn Egypt's Banque Misr has sold its 2 percent stake in Saudi Arabia Samba Financial Group for around $370 million, Reuters reported. However, the country's second largest lender will not be selling its stake in Cairo-Amman Bank, Vice Chairman Akef ElMaghraby told Reuters. In May, the state-run bank hired an international bank to manage a $500 million medium-term syndicated loan, in an effort to fund growth through low-cost debt. | | Hilton Appoints New Manager for Development in MENA Region Hilton has appointed a new general manager for the development in MENA region in a bid to strengthen the company's market dominance by introducing new brands and stepping into new markets and countries. Amir Lababidi will be joining Hilton from Mövenpick Hotels & Resorts, where he had been a vital component in leading the company's growth in Europe and the MENA regions, according to a company statement. Prior to joining Mövenpick, Lababidi served as an assistant manager of HVS, the Dubai-based global hotel consultancy and evaluation firm. US hospitality company Hilton forecasts a three-fold growth in its 40 hotels in MENA, with plans to reach more than 120 hotels in the next three to five years. | | Oil & Gas MIDOR Signs $1.2 Bn Loan to Finance Refinery Expansion State-owned company Middle East Oil Refinery (MIDOR) signed yesterday the final contract for a 10-year, $1.2 billion syndicated loan from Crédit Agricole, BNP Paribas and Italy's CDP, the petroleum ministry announced. The loan carries an interest rate of 6 percent and will be utilized in financing $2.2 billion worth of expansions at MIDOR's refinery. UAE's NBAD and Egypt's NBE provided financial consultation for the loan agreement. MIDOR operates a refinery over an area of 500 acres west of Alexandria, which produces nearly 25 percent of Egypt's consumption of oil products. MIDOR is 98 percent owned by the Egyptian General Petroleum Corporation (EGPC), while the remaining 2 percent is owned by the Suez Canal Bank. Minister of Petroleum Tarek El-Molla said the expansion of MIDOR's refinery will boost production of Butane, high-octane gasoline, jet oil, diesel, coal and Sulphur production to 7.6 million tons, up from 4.6 million tons. "This will reflect positively on the local market needs and helps achieve the ministry's vision to achieve self-sufficiency in oil products, in addition to generating dollar liquidity through exporting quality products," he added. "Securing the loan from a consortium of global banks reflects confidence in Egypt's investment climate and economic reform program." | | International Samsung Reveals Record-Breaking Q3 Profits South Korea's Samsung Electronics has revealed record profit for the third quarter as it capitalized on stronger global demand and a rise in revenues from its semiconductor unit that designs and manufactures chips for Samsung's products. However, the electronics group warned against a possible slowdown in the future. During the period between July and September, Samsung generated a net profit of 17.1 trillion won ($15.5 billion), up 20 percent from the same quarter in 2017. Operating profit in Samsung's smartphone division dropped 33 percent from the same quarter last year to 2.2 trillion won. The third-quarter sales rose year-on-year to reach $57 billion, but the company faces headwinds amid the roiling trade war between the US and China. The group expects profits to drop in the first quarter of next year and then to rebound amid improved business conditions, especially in the memory chips segment. It also said capex would decline this year to around $28 billion, compared with $38 billion a year earlier. Samsung has struggled to maintain high margins across its smartphone division as it faces increasing competition from Apple's iPhones, as well as cheaper phones made by Chinese rivals including Xiaomi. These record interim results came a day after the US rival Apple unveiled a new set of products. | | Automotive Auto Sales Jump 36% in First 9 Months of 2018: AMIC Total auto sales rose by 35.9 percent year on year in the first nine months of 2018 with 130,800 vehicles sold, compared with 96,200 in the same period a year earlier, according to figures issued by the Automotive Information Council (AMIC). Passenger car sales grew 38 percent in the nine-month period to 96,000 cars, up from 69,500 last year. Bus sales also rose 17 percent to 11,300 from 9,700 in the same period last year. Likewise, truck sales increased by 38 percent to 23,400 from 16,900. Sales of locally assembled vehicles increased by 18.3 percent, or 63,400 units, while sales of imported vehicles rose by 58 percent to 67,300. Chevrolet topped the chart in terms of sales, with a 22 percent market share, or 28,800 cars, followed by Hyundai with 18.5 percent, or 24,100 cars. Nissan came third with a market share of 15 percent, or 19,600 cars, followed by Renault with 7.8 percent and Toyota with 7.1 percent. The vehicles market saw a rebound in the first nine months of 2018, thanks to renewed demand for vehicles, especially passenger cars, said Head of Cars Dealers Association Ossama Abulmagd. He noted that sales dampened during the current quarter due to the rumors about an imminent fall in vehicle prices by early 2019 when tax on cars imported from the European Union reaches zero under the trade liberalization agreement signed between Egypt and the EU. Meanwhile, the trade and industry ministry formally requested last week that the EU allows Cairo to wait another 1-2 years before cutting to zero the duties on EU-assembled cars brought into Egypt. This comes while the government is seeking to further bolster its auto industry through the Automotive Directive that would offer assemblers incentives to move up the value chain into manufacturing. | | Sisi Sits Down with German Transport Minister for Possible Railway Renovation President Abdel Fattah El-Sisi received on Wednesday Germany's Federal Minister of Transport and Digital Infrastructure Andreas Scheuer to discuss renovation and development plans for the Egyptian railway system. "Egypt is looking forward to cooperating with the German side and making use of its pioneering expertise in renovating the railway sector and integrated eco-friendly transport systems," Egyptian Presidency Spokesman Bassam Rady said in a statement. During the meeting, El-Sisi presented the government's plans on the digitization of various sectors and expressed readiness to collaborate with the German side in developing integrated transport systems for passenger and freight trains, according to Rady. According to the Egyptian Railway Authority, about 1,000 train collisions occur in Egypt each year. In February, two trains collided in Beheira governorate in the Nile Delta, killing at least 15 people and wounding 40 others. However, the Egyptian government insisted it would spend heavily to renovate the dilapidated railway system, saying that developing the state's infrastructure marks a vital part of the country's economic reform program. | | Egyptian Electricity Signs Two Cable Deals Worth $21.8 Mn State-owned Egyptian Electricity Transmission Company signed on Wednesday two cable deals worth a combined value of EGP 390 ($21.8) million to supply and install ground cables in Cairo. The first contract, valued at EGP 290 (16.2) million, is signed with an alliance between Energya Power and Telecom Solutions and Energya Cables. It will be concluded in eight months and comprises XLPE cables on a turnkey basis. The second contract with Energya Cables - El Sewedy Helal, valued at EGP 100 ($5.6) million, stipulates that it supplies XLPE-type cables to connect Haram area's electricity transformer with Al-Dahab Island. It is scheduled to be concluded within four months. | | Electricity, Military Production Ministers Inaugurate Smart Meters' Production Lines Ministers of electricity and military production inaugurated on Wednesday a production line for smart prepaid electricity and water meters that has a capacity to produce 500,000 meters annually. The production line, located in military production ministry's El Maasara for Engineering Industries factory, will use a 50 percent Egyptian component in the production. The production line is part of Egypt's 2030 vision to transform the country's power into a smart grid. | | Prominent Journalist Hamdy Kandil dies at 82 Prominent Egyptian journalist Hamdy Kandil died late on Wednesday at the age of 82, local media said. Kandil was a celebrated journalist whose pan-Arab views earned him wide acclaim in the Arab world. He started his career in the 1950s as a writer for Egyptian magazine Akher Saa (Last Hour), worked for UNESCO in the 1970s and 80s and co-founded The Middle East Broadcasting Center, famously known as MBC, in 1987. Kandil also hosted a show in Egyptian television in the late 1990s which proved a big hit. He was a fierce critic of many Arab governments and co-founded the National Association for Change, which was headed by former U.N. nuclear watchdog chief Mohamed ElBaradei, shortly before the eruption of the 2011 revolution which unseated autocratic leader Hosni Mubarak. | | Ahly Hope History Repeats Itself in Champions League Final Against Esperance Record eight-time winners Ahly will be hoping history repeats itself when they meet Tunisia's Esperance in the first leg of the African Champions League final in Alexandria on Friday. Esperance have failed to beat Ahly since 2011, with the Red Devils proving too strong for their North African rivals. Ahly, who defeated Esperance 3-2 on aggregate in the 2012 Champions League final, look favorites to win another title, given their superior head-to-head record over the two-time champions. They won seven, drew six and lost only three games against Esperance in African competitions. Ahly will host the first leg at Alexandria's Borg El-Arab Stadium, which security officials said will be allowed to host up to 60,000 fans. The second leg takes place in Rades, Tunis a week later. The Cairo giants won the last of their record eight trophies in 2013. | | Egypt, S. Korea to Join Hands in Electronics Industry Egypt and South Korea have agreed to further enhance their mutual cooperation in the field of ICT and electronics design and manufacturing. Minister of Communication and Information Technology Amr Talaat held a meeting with his South Korean counterpart during the ITU Plenipotentiary Conference in Dubai, where they reviewed means of strengthening cooperation between both countries and exchanging expertise. Both ministers agreed that an expert delegation shall be dispatched from South Korea to Egypt in order to explore available opportunities for cooperation in the field of electronic design and manufacturing. Meanwhile, Samsung Electronics Egypt, a subsidiary of South Korea's electronics giant Samsung, said that investments of the company's TVs factory -- the first of its kind in MENA -- in the Upper Egyptian governorate of Beni Suef reached $270 million. Earlier this month, Samsung Egypt started delivering shipments of tablet devices as per the supply agreement it signed with the Egyptian education ministry. | | 2.6 Mn Pensioners Will Get Their Money Via ATMs Starting Today: Minister Pensions for about 2.6 million people will be released via ATMs starting today, the social solidarity minister said on Wednesday. Ghada Wali has directed heads of the Government Social Fund (GSF) for the public and private sectors to finalize the installation of the new pension system whereby the payment for November will begin as of today, according to a statement by the ministry. "Upon the new system, pensions will be released to 7.6 million beneficiaries with an estimated value of EGP 12.7 billion ($709 million)," Wali said. "Pensions transferred through banks, at a total value of EGP 3.7 billion ($207 million), will be released starting from November 10. | | Global Economy Turkey Says Food Price Inflation Will Likely Hit Almost 30% by Year-End The Central Bank of Turkey (TCMB) has said food price inflation is expected to hit 29.5 percent by the end of 2018 -- more than double its previous 13 percent forecast -- while the overall inflation is likely to reach 23.5 percent by year-end. "[TCMB] expects inflation to decelerate next year, falling to 15.2 percent by the end of 2019 and 9.3 percent by the end of 2020," Central Bank Governor Murat Cetinkaya told a news conference in Istanbul ahead of the release of the bank's quarterly inflation report, noting that the bank's official inflation target is 5 percent. "The rise in the forecast has been driven by the upward revision in the projections of lira-denominated import prices, food inflation and inflation at third quarter in 2018." The plunge of Turkey's local currency has led to price hikes on all fronts, with cost of food and fuel soaring and driving inflation to 25 percent in September, the highest in 15 years. Last week, the bank said it would keep its benchmark interest rate at 24 percent, with the lira still almost a third down against the US dollar since the start of the year. The bank would continue to use its all instruments to lower inflation and may introduce additional tightening in monetary policy if needed, Cetinkaya said. The figures are alarming for Turkish president Recep Tayyip Erdogan, who will face local elections next March, in which the cost of living is likely to gnaw on some voters' minds. The turmoil has initially been sparked by fears over Erdogan's influence over monetary policies. | |
