masreya

THE WEEKLY
Thursday
21st Apr. 2016
Issue # 16
EUROPEAN INTEREST IN THE
EGYPTIAN MARKET
On the 17th of April, an Egyptian-French Presidential summit was held
in Cairo between President Abdul Fattah Al-Sisi and President François
Holland, who headed a high level delegation of parliament members
and 75 representatives of French companies. The two countries signed
a number of cooperation deals worth about EUR2 billion, including:
A grant agreement worth EUR68 million, provided by the European Union (EU), was signed with the French Development
Agency (AFD), to deliver natural gas to 1.5 million houses in 11 governorates nationwide, in addition to a loan agreement
worth EUR50 million to develop Egypt’s national electricity grid. The deals also include developing a military satellite
communication system for Egypt.
A protocol of cooperation was also signed between the US conglomerate General Electric (GE) and the Egyptian Electricity
Transmission Company worth USD250 million, where GE will supply advanced technologies to four Egyptian electricity grid
substations, with French components to represent 50% of the project.
10 letters of intent worth EUR308 million were also singed to build a wind farm in Suez Gulf, renovate the Heliopolis Tram
and establish a sludge treatment plant in Alexandria.
In a similar context, the Vice-Chancellor of Germany, Sigmar Gabriel, along with a delegation of 52 representatives from the
German business community arrived in Egypt last Saturday to explore investment opportunities in Egypt. The delegation also
met with the Head of the Suez Canal Authority, Mohab Mamish, to discuss the potential investments offered in the Suez Canal
Corridor project.
“France chose to accompany Egypt in its security
and economic development goals, so we can situate
bilateral relations within long-term projects”
“France is one of the most important trade partners
with Egypt and it represents a large market for
Egyptian exports. In return, Egypt provides French
companies with access to Arab and African markets”
Francois Holland
The French President
Aswat Masreya
18th April 2016
Abd El-Fattah Al-Sisi
The Egyptian President
Daily News Egypt
18th April 2016
IN THIS ISSUE...
Banking Sector Updates
New CBE Instructions
World Bank Loan
Zohr Field Starts Production in 2017
Trade Deficit Decreased
Telecommunication Sector Grew
A WORLD OF REAL POSSIBILITIES
1
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BANKING SECTOR UPDATES
The Central Bank of Egypt (CBE) released its monthly statistical bulletin
that tracked the performance of the Egyptian banking sector in January
2016, as shown in the following table:
EGP BN.
JAN-16
DEC-15
JAN-15
Y/Y
M/M
SECURITIES & INVESTMENTS IN T-BILLS
1,112.9
1,105.7
916.4
21.5%
0.7%
LOANS & DISCOUNT BALANCES
797.7
791.5
646.3
23.4%
0.8%
ASSETS
2,516.1
2,485.5
2,032.4
23.8%
1.2%
67
66.6
66.0
1.5%
0.6%
1,917.1
1,908.7
1,589.3
20.6%
0.4%
PROVISIONS
DEPOSITS
* Source: Central Bank of Egypt, Monthly Statistical Bulletin (March 2016)
In order to fulfill its adherence to Basel III requirements, the CBE has instructed banks to apply new capital conservation buffer
requirements, starting 2016. At this end, banks must set aside 0.625% of their capital as a first Capital Conservation Buffer (CCB),
to be raised gradually in the upcoming four years to reach 2.5% in 2019.
“Banks are required to use earnings to form CCB; however, they may use Tier 1 capital with the consent of the CBE”
The CBE Circular
The CBE Official Website
17th April 2016
According to Hafez Ghanem, World Bank Vice President for Middle East
and North Africa, the World Bank will provide Egypt with the USD1 billion first
tranche of a USD3 billion loan, once Parliament approves the government’s
economic reform program and the budget draft.
World Bank Premises
The Italian oil company, ENI, finished drilling the third well of Zohr field in the Shorouk Concession, an offshore natural gas field
located in the Mediterranean, and declared its intentions to drill three more wells and start production by 2017.
According to the Central Agency For Public Mobilization And Statistics (CAPMAS), Egypt’s trade deficit decreased by 24.8% to
reach EGP22.3 (Equivalent to USD2.9 billion*) billion in January 2016 compared with the same month last year due to the fall in
imports (mainly driven by a drop in international prices) by 21%, mainly due to the decrease in the value of iron and steel products
by 44.1%, cars by 42.8%, and wheat by 40.7%.
*1USD=EGP7.80505 as of 28th of January 2016
The Ministry of Communications and Information Technology announced achieving an annual growth rate of 7.3% in the
telecommunications sector during Q4 2015, reaching EGP14.2 billion compared to EGP13.2 billion in the corresponding period of
2014. Moreover, the cost of mobile and internet services declined by 9.5% and 39.7% respectively. The Ministry also declared the
decrease of mobile subscribers by 1.4%.
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EGYPT AT GLANCE
13
8.85
12
EXCHANGE RATES
11
10.02
10
W/W
M/M
Y/Y
YTD
8.85
0%
0%
16.4%
13.5%
10.02
0.4%
0.6%
23.1%
18%
Sterling Pound 12.70
1.4%
-0.6%
12.2%
10%
21st Apr. 2016
USD
EURO
12.70
9
8
7
6
5
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16
* Average Buy & Sell Prices For ALEXBANK
EGP per USD
EGP per Euro
EGP per Pound Sterling
10000
9000
EGX
STOCK MARKET
21st Apr. 2016
EGX 30
7,781.45
W/W
4.3%
8000
7,781.45
7000
6,568
5,949.11
M/M
Y/Y
YTD
6000
3.8%
-9.3%
9.8%
5000
4000
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16
EGX 30
TB’S AUCTION
EGX 70 (Rel.)
EGX 100 (Rel.)
INTEREST RATES
Auction Date
Maturity
17 Apr. 2016
91 Days
12.914
21 Apr. 2016
182 Days
14.015
17 Apr. 2016
273 Days
21 Apr. 2016
357 Days
14.101
14.412
Current* Previous**
Average Yield %
Overnight Deposit Rate
10.75%
Overnight Lending Rate 11.75%
9.25%
10.25%
Corridor Rate
9.75%
* at March 2016
11.25%
+150 bp
+150 bp
+150 bp
** at December 2015
FX-AUCTION RATES
Auction Date
US $
7th Apr. 2016
8.7800
5th Apr. 2016
8.7800
www.alexbank.com
3
Nile View, Aswan
T : +2 02 2399 2000 E : research@alexbank.com
Head of Research
Emil Eskander
emil.eskander@alexbank.com
Research Manager
Hemat El Masry
hemat.elmasry@alexbank.com
Senior Associate:
Sahar Ezz El Arab
sahar.ezzelarab@alexbank.com
Research:
Nahla Abdelazim
nahla.abelazim@alexbank.com
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