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The Weekly
Week ending Sunday 17 August 2014
Issue : 32/2014
Al-Sisi In Russia
• On Tuesday 12 August, President Abdul Fa�ah Al-Sisi started a 2-day visit
to Russia where he met the Russian President Vladimir Putin and other
prominent Russian officials. The importance of the visit stems from the
fact that this is the first invitation Al-Sisi receives from a leader outside
the Arab world.
• Both leaders discussed the latest developments in the Arab world and
plans for improving cooperation between the two countries in different
fields including:
o Boosting bilateral trade as Russia would increase both wheat
exports to Egypt and its imports of agriculture products.
o Creating a free trade zone between Egypt, Russia, Belarus and
Kazakhstan.
o Setting up a Russian industrial hub in Egypt as part of its new Suez
Canal Axis Project.
o Developing military cooperation, as Russian official news agency
reported investigating the deliveries of high-tech Russian military
products to the Egyptian Army.
"Egypt has already increased (agricultural)
supplies to our market by 30 percent (and) is
ready to increase (supplies) by yet another
30 percent in the near future"
Vladimir Putin
Russian President
Reuters 12 August 2014
“Russia is supporting Egypt in its fight
against terrorism, especially in light of its
growing threats in the Middle East”
Vladimir Putin
Russian President
CNN 12 August 2014
"I would like to stress that the entire
Egyptian people are following my visit to the
Russian Federation and are expecting a lot of
cooperation between our countries.
Therefore, I believe we will meet the
expectations of the Egyptian people"
President Abdul Fattah Al-Sisi
Ahram Online 12 August 2014
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The Weekly Week ending Sunday 10 August 2014
2
Suez Canal Project
• The new Suez Canal Project is going to be financed through:
o Offering 5-year investment cer1ficates at a yearly yield of 12 per
cent for those issued in local currency and 3 per cent for dollar
dominated certificates, to be paid out every three months.
o The new certificates are going to be provided through public banks
next week and will be only sold to Egyptians.
o Certificates issued in local currency will be offered in three
categories: EGP10, EGP100 and EGP1,000, while those issued in US
dollars will be offered at mul1ples of $1,000.
o A syndicated loan to be granted by a number of Egyptian public and
private banks to the Suez Canal Authority to dig the new canal and
prepare the infrastructure needed for the project.
* ($1=EGP7.16505, €1=EGP9.599445, €1=$1.3401 )
“The yield on these certificates is currently
the highest in the Egyptian banking sector ..
the new certificates will be guaranteed by
the Finance Ministry and its first year yield
will be paid from the Suez Canal revenues”
Hisham Ramez
CBE Governor
Masrawy 16 August 2014
“The new certificates are going to be tax
free”
Ahraf Salman
Investment Minister
Al-Shorouk Newspaper 16 August 2014
Best Banks
• Finance Ministry announced the names of the top five banks in dealings in
government securi1es during 4Q FY 2013/2014:
T-Bills Primary Market T-Bonds Primary Market
1 National Bank of Egypt 1 Commercial International Bank
2 Misr Banque 2 National Bank of Egypt
3 Commercial International Bank 3 Misr Banque
4 Arab African International Bank 4 Arab African International Bank
5 Arab Bank 5 Misr Iran Bank
"Commercial banks will benefit from these
ratings to highlight its competitiveness in the
market, and foreign banks operating in
Egypt are more interested in these
assessments as a sign for the success of
those banks’ management "
Hani Kadri
Finance Minister
Al-Borsa Newspaper 17 August 2014
Other Headlines
• President Abd El Fattah Al-Sisi held talks with a US delegation from the
House of Representatives, where he met with the delegation head Darrell
Issa discussing the turmoil in Sinai and on Egypt’s borders with Libya. Al-
Sisi also discussed the ways to fight terrorism that might lead to more
military aid from the US to Egypt to be $1 billion in next year budget up
from $0.5 billion this year.
* ($1=EGP7.16505, €1=$1.3401)
“Our relationship is strong, ongoing, and will
strengthen in the upcoming period”
Darrell Issa
Head of US Delegation
Daily News Egypt 17 August 2014
The Weekly Week ending Sunday 10 August 2014
3
• The Central Bank of Egypt (CBE) raised the maximum value of units that
can be financed through its mortgage finance ini1a1ve to EGP400,000
instead of EGP300,000. The CBE previously launched an ini1a1ve to boost
mortgage sector as it allowed EGP10 billion for banks to lend citizens at an
interest rate of 7 and 8 per cent for low and middle-income individuals
respectively.
* ($1=EGP7.16505, €1=EGP9.599445)
"This decision was attributed to the limited
number of units available at a price of
EGP300,000 in addi/on to the increasing
cost of building new units due to the increase
in prices of raw materials affected by raising
energy prices"
Mai Abdul Hameed
Head of Mortgage Finance Fund
AL-Shorouk Newspaper 16 August 2014
• Egypt's steel producers raised the monthly rebar prices by 4.2 per cent
in August to reach EGP5280 per tonne as a result to the government's
decision to raise the cost of natural gas, that is supplied to steel
factories, besides the hikes witnessed in the steel raw material billet
prices in the global market last month.
* ($1=EGP7.16505, €1=EGP9.599445)
“Producers have exaggerated the price
hikes….the energy increase is estimated at
EGP20 per tonne, meaning that producing a
tonne of steel rebars will cost EGP100
instead of EGP80 in terms of natural gas
consumption”
Ahmed El-Zeiny
Head of the Building Materials Division at
Cairo Chamber of Commerce
Ahram Online 11 August 2014
• Central Agency for Public Mobilization And Statistics CAPMAS declared
that unemployment rate slightly declined in 2Q 2014 by 0.1 per cent,
recording 13.3 per cent.
“The persistence of high unemployment
reflects an ongoing slowdown in economic
activity, especially in productive sectors such
as industry, tourism and construction”
CAPMAS Quarterly Report
Ahram Online 16 August 2014
• Nine people were killed on 14 and 15 August in Cairo after violent
clashes erupted between security forces and demonstrators who rallied
into streets across the country to mark the first anniversary of dispersing
Moslem Brotherhood’s sit-ins in Cairo (Rabaa & El Nahda sit ins). 18
people were injured and 193 were arrested in Cairo, Giza, Alexandria,
Suez, Kafr El-Sheikh, Beni Suef, Fayoum, Beheira and Suez governorates
during clashes.
“Some of those arrested were in possession
of weapons, and in one case a bag was
seized containing “six grenades and five
improvised explosive devices”
Interior Ministry Statement
Daily News Egypt 16 August 2014
The Weekly Week ending Sunday 10 August 2014
4
EGP Exchange Rates*
Egyptian Stock Market Indices
Macroeconomic Indicators FY 2011/2012*** FY 2012/2013*** 2013/2014 (July-March)
Real GDP Growth Rates 2.2% 2.1% 1.1%****
Budget Deficit (EGP Billion) 166.7 239.9 145
Budget Deficit as % of GDP 10.8% 13.8% 7.1%
Balance of Payments (USD Billion) -0.1 0.24 2.2
Gross Domestic Debt (EGP Billion) 1,155.3 1,446.6 1,708.1
Gross Domestic Debt as % of GDP 74.9% 83.4% 83.3%
Average Headline Inflation 8.7% 6.9% 10.7%
Average Unemployment Rate 12.4% 13% 13.4%
*Average exchange rates on the last working day of the week in Egypt.
**Morgan Stanley Capital International Emerging Markets Index.
***Fiscal year ending 30 June.
**** July/December 2013
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7.00 6.91 6.90 6.90 6.95 6.98 6.98 6.98 7.02 7.17 7.17 7.17 7.17
9.20 9.41 9.51 9.47 9.51 9.51 9.54 9.61 9.70 9.75 9.779.59 9.57
10.95 11.19 11.18 11.39 11.38 11.52 11.61 11.59 11.81 11.98 12.17 12.11 11.95
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10.0010.5011.0011.5012.0012.5013.00
Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14
EGP per USD EGP per Euro EGP per Pound Sterling
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MS
CIE
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EG
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EGX 30 EGX 70 (Rel.) EGX 100 (Rel.) MSCI EM**