Today’s Top News & Analysis
CBE issues a new circular on recent exchange rate fluctuations
NBE and Banque Misr will soon cancel their high-yield CDs; BdC launches its own
House Budget & Planning Committee eyes a fund for Egyptian expats
Egyptian government to offer low-priced bread
GASC launches its first corn tender
Exports of building materials climbed 7% y/y in 11M 2022
Elsewedy Electric T&D to build a solar power station in Saudi Arabia
TSFE and Etisalat Misr tap microfinance in Egypt
MACRO
CBE issues a new circular on recent exchange rate fluctuations
The Central Bank of Egypt (CBE) issued a circular yesterday, discussing major updates regarding the situation on the FX market, here are our main takeaways:
· The CBE explained that the marginal strength in EGP after hitting an all-time low last Wednesday at EGP32.2/USD was on the back of foreign interest in Egyptian assets worth some USD925mn.
· Inflows from remittances and tourism recovery further supported the FX rate to settle near EGP29.6/USD.
· The interbank market reflected the aforementioned foreign interest, with daily volumes registering 20x the average volume in recent days.
· The banking sector covered more than USD2bn worth of importers’ requests over the prior three days.
· Banks are marketing for FX financial derivatives for their clients to hedge their FX risk.
· Net International Reserves (NIRs) upped USD470mn in December 2022 to USD34bn in spite of the payment of several external commitments. NIRs are at their best level since May 2022, covering 5.4 months of imports—well above international standards. (CBE)
NBE and Banque Misr will soon cancel their high-yield CDs; BdC launches its own
Having pulled liquidity out of the market and guided it away from dollarization, state-owned National Bank of Egypt (NBE) and Banque Misr (BM) are considering canceling their high-yield CDs (25% p.a. in 12 months and 22.5% p.a. monthly) within days. Proceeds from those CDs launched on 4 January 2023 reached some EGP300bn (NBE: EGP200bn, BM: EGP104bn). Meanwhile, Banque du Caire [BQDC] launched its own high-yield CDs with 25% p.a. in 12 months and 22.5% p.a. monthly. (Hapi Journal, Al-Borsa)
House Budget & Planning Committee eyes a fund for Egyptian expats
The House of Representatives' Budget & Planning Committee is studying the proposal to establish a fund that targets attracting the savings of Egyptians living abroad with a target value of EGP20bn as a possible substitute for foreign investors' hot money. (Al-Mal)
Egyptian government to offer low-priced bread
In an attempt to address high inflation, the Egyptian government will sell low-priced bread outside the subsidy program. To be applied on a trial basis starting Wednesday, 90-gram loaves will be priced at less than EGP1.0/loaf. (Reuters)
GASC launches its first corn tender
The General Authority for Supply Commodities (GASC) will launch a tender on 19 January for corn to be used for poultry feed. Financed by the International Islamic Trade Finance Corporation, shipping is set for 10-25 February. (GASC)
Exports of building materials climbed 7% y/y in 11M 2022
The Export Council for Building Materials, Refractories and Metallurgical Industries (ECBM) said that exports of building materials, refractories, and metallurgical industries rose by 7% in 11M 2022 to USD6.37bn. Copper and cement were the main contributors for the gain, where copper exports grew 17% to USD410mn, and cement exports grew 37% to USD602mn. Aluminum and steel exports, on the other hand, declined, where aluminum shrank by 12% to USD630mn, and steel and cast iron decreased 20% to USD1.3bn. (Zawya, Al-Mal: 1, 2)
CORPORATE
Elsewedy Electric T&D to build a solar power station in Saudi Arabia
Elsewedy Electric T&D, a subsidiary of Elsewedy Electric [SWDY], signed a contract to build a 300MW solar power station in Saudi Arabia for Al-Ghazala Energy Co. This USD176.1mn contract will be executed over 16.5 months in addition to 29 months for operations and maintenance. (Company disclosure)
TSFE and Etisalat Misr tap microfinance in Egypt
The Sovereign Fund of Egypt (TSFE) and Etisalat Misr established Erada Microfinance to finance micro and small businesses, aiming to provide “innovative financial products” for the expansion of small businesses. (SFE)
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