REBOUNDS NET FOREIGN DIRECT INVESTMENTS

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REBOUNDS NET FOREIGN DIRECT INVESTMENTS
THE WEEKLY
Thursday
15th Oct. 2015
Issue # 39
NET FOREIGN DIRECT INVESTMENTS
REBOUNDS
Egypt’s net foreign direct investments rose significantly by
54.7 % (Y/Y) in Fiscal Year (FY) 2014/2015 to register $ 6.4 billion,
the highest level since the 2011 revolution. The massive increase
follows fiscal and legislative reforms adopted by Egypt since the
beginning of FY 2014/15.
European Union investments topped the investment inflows in
FY 2014/2015 with $ 6.9 billion investments, where the United
Kingdom’s investments represented the highest share of 77.8%
with $ 5.4 billion investments, followed by Belgium ($ 663.8
million).
Inflows from Arab countries increased by 51.6 % (Y/Y)in FY 2014/2015 to $ 2.7 billion ,where the United Arab Emirates’
investments represented the highest share of total Arab countries’ inflows (52%) recording $1.4 billion, followed by Saudi
Arabia $ 649.1 million.
“Egypt is targeting $ 10 billion in foreign direct investment for the current financial year. The government hopes to cut
unemployment from 11.2 %to 10.6 % this financial year”
Ashraf Salman
Minister Of Investment
Egypt Independent
13th October 2015
IN THIS ISSUE...
Banking Sector Updates
Budget Deficit Reduction Measures
Egypt’s Economy Grew By 4.1 % In Fy2014/2015
Two New Exploration Licenses In The Egyptian Offshore
Egypt will receive a $ 3 billion loan from the World Bank
Net International Reserves Registered $16.3 Billion
A WORLD OF REAL POSSIBILITIES
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BANKING SECTOR UPDATES
The Central Bank of Egypt (CBE) released the latest updates about the performance of the banking sector thorough its
monthly bulletin that shows the following:
ITEM( EGP MILLION)
Securities & investments in TBs
Loan & discount balances for customers
Assets
Provisions
Total deposits
JUL-15
JUN-15
JUL-14
M/M %
Y/Y %
1,015,348
726,274
2,268,366
66,358
1,773,768
1,016,025
717,999
2,198,979
66,049
1,734,178
830,089
588,003
1,853,617
63,233
1,453,933
-0.1%
1.2%
3.2%
0.5%
2.3%
22.3%
23.5%
22.4%
4.9%
22%
Prime Minister Sherif Ismail announced on Saturday that the government has been tasked with reducing the budget deficit by
1.5 % annually.
“The government plans to reduce the energy subsidization to EGP 61 billion during the current fiscal year and to get rid of 70 % of
subsidies over the next five years, but will continue to ensure that the neediest people get assistance”
Sherif Ismail
Prime Minister
Al Watan News
10th October 2015
Investment Minister Ashraf Salman announced that Egypt’s economy grew by 4.1 % in FY2014/2015 and is projected to grow
by 5% to 5.2 % in FY 2015/2016.
The Italian oil and gas company (Eni) has been awarded two new exploration licenses in the
Egyptian offshore of the Mediterranean Sea, North El Hammad and North Ras El Esh. The company
was awarded a 37.5 % participating interest and operatorship in North El Hammad in partnership with
BP (37.5 %) and Total (25 %) and 50% participating interest in North Ras El Esh along with BP (50%)
which will act as an operator.
“These two new concession agreements follow the recent award of the deep water Karawan and North Leil
blocks, strengthening Eni’s presence in Egypt, a country of historic and strategic importance for the company, and
further relaunching its exploration activities after the recent and important successes of Nidoco NW and Zohr”
Eni’s Press Release
12th October 2015
Finance Minister Hani Qadri announced that Egypt will receive a $ 3 billion loan from the World Bank in installments over the
next three years to support the state’s budget.
Egypt signed a deal with France to buy two Mistral warships that each can carry 16 helicopters,
four landing craft and 13 tanks. The deal, estimated at about € 950 million, was signed in the presence
of the Egyptian President Abdel Fattah AL-Sisi and French Prime Minister Manuel Valls.
“France believes the world needs a strong and stable Egypt... we all have a common enemy, ISIS”
Manuel Valls
French Prime Minister
Yahoo News
10th October 2015
Egypt’s net international reserves continued to decline for three consecutive months to register $16.3 billion at the end of
September down from $18.1 billion a month earlier which is considered credit negative according to the global credit rating
agency Moody’s Investors.
“The drop reflects continued dependence of Egypt’s Balance of Payments on external donor support, which is credit negative for the
country’s external liquidity position”
Moody’s Investors
The Cairo Post
12th October 2015
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Egypt’s Central Bank Governor Hisham Ramez was chosen by the IMF and the World Bank as the best Central Bank Governor
Of The Year For Middle East And North Africa during their annual meetings held in Peru from 8-11 October. The choice of Ramez
was based on the measures he took to put Egypt on the right economic path.
“After some initial controls, which in the circumstances were reasonable, he [Ramez] has allowed the currency to ease, to create a
more open market and weaken the black market in dollars”
George Abed
Director For The Middle East And Africa At The Institute Of International Finance
Emerging Markets
9th October 2015
The Egyptian armed forces started the second phase of
the army’s operation “Martyr’s Right” in North Sinai, including
the commencement of various development projects and the
implementation of reconstructions in North Sinai in the cities
of Sheikh Zuweid, Arish, and Rafah, among others. On the 22nd
of September the armed forces announced the end of the
first stage that included the killing of over 500 militants and
destroying various terrorist refuges and weaponry storage
facilities in North Sinai.
An Egyptian court ruled to release Gamal and Alaa Mubarak, sons of former Egyptian President Hosni Mubarak, from prison
after completing their three-year sentences on embezzlement charges related to a case known as the “presidential palaces case”.
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EGYPT AT GLANCE
EXCHANGE RATES
13.00
12.00
11.00
15th Oct. 2015
W/W*
M/M
Y/Y
10.00
YTD
9.00
USD
7.91
1.28%
1.28%
10.33% 13.37%
8.00
EURO
9.06
2.98%
2.71%
-1.45%
-5.51%
7.00
Sterling Pound 12.24
2.11%
1.12%
6.76%
5.91%
6.00
5.00
* Compared to 8 of October 2015
tt
EGP per USD
EGP per Euro
EGP per Pound Sterling
11000
STOCK MARKET
10000
15th Oct. 2015
EGX 30
7,603.36
W/W*
M/M
Y/Y
YTD
1.5%
6%
-14.51%
-13%
tt
* Compared to 8 of October 2015
EGX
9000
8000
7000
6000
5000
EGX 30
TB’S AUCTION
EGX 70 (Rel.)
EGX 100 (Rel.)
INTEREST RATES
Current* Previous**
Auction Date
Maturity
Average Yield %
11 Oct 2015
91 Days
11.061
Overnight Deposit Rate
15 Oct 2015
182 Days
11.432
11 Oct 2015
266 Days
15 Oct 2015
357 Days
Overnight Lending Rate
8.75%
9.75%
9.25%
10.25%
-50 bp
-50 bp
11.446
Corridor Rate
9.25%
9.5%
-25 bp
11.537
* Since January 2015
** Since July 2014
FX-AUCTION RATES
Auction Date
US $
15th Oct. 2015
7.8301
8th Oct. 2015
7.7301
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Emil Eskander
[email protected]
Research Manager
Hemat El Masry
[email protected]
Senior Associate:
Sahar Ezz El Arab
[email protected]
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