UPDATE: Egypt’s business digest Aug. 15: EGX gains 21 bln EGP since announcement on IMF loan negotiations
The Egyptian Exchange - YOUM7 (Archive)

CAIRO: No more browsing from site to site, view the top business news stories on August 15 here:

 

EGX gains 21 bln EGP since announcement on IMF loan negotiations  

The market capitalisation of the Egyptian Stock Exchange has gained around 21 billion EGP ($2.3 billion) within the last three weeks since the government’s announcement to negotiate with IMF over the $12 billion loan.

Some Analysts predicted that the final announcement of the agreement on the loan will have more positive impact on the market, coinciding with the Central Bank of Egypt ‘s decision to cut the value of the EGP.

 

Egypt reconsiders grain mega project amid scandal investigation – REUTERS

Blumberg Grain said its mega project to store Egyptian grains was back in play, with the government to announce a final decision in two weeks, after earlier indications that plans had been shelved and the company might exit the country entirely.

The decision comes as Egypt, the world’s largest wheat importer, remains mired in controversy over its wheat supplies, with industry officials claiming that over 2 million tonnes of the 5 million tonnes of wheat procured locally in this harvest may exist only on paper.

If Egypt’s local wheat procurement numbers were misrepresented, it may have to spend more on foreign wheat purchases to meet local demand – even as the country faces a dollar shortage that has sapped its ability to import.

The grain logistics company has said the tracking and monitoring capabilities of its high-tech storage systems would crack down on the type of fraud seen in this year’s local procurement, which involves private silos sharply overestimating their wheat stocks to boost government payments.

Blumberg Grain completed the first phase of the project earlier this year, delivering 93 systems to process and monitor about a quarter of the country’s crop. But a series of bureaucratic hurdles prevented the sites from coming online in time for the procurement now under investigation.

Egypt’s supply minister said last month that the second phase, which includes an additional 300 storage systems, had been rejected by the state’s Holding Company for Silos and Storage.

Blumberg Grain nonetheless said it is now optimistic about the project moving forward following a meeting with the prime minister and despite the pending resolution of “modest issues that stand in the way”, Blumberg Grain’s CEO for the Middle East and Africa, David Blumberg, told Reuters this weekend.

“Given the high impact of this project, and the Sisi administration’s emphasis on combating corruption, the need to increase hard currency, and help farmers, we are confident that the Egyptian government will do everything in its power to ensure the rapid development of the entire shouna (storage site) network,” Blumberg said.

The company said however that if the second phase is not signed, it would halt plans to establish Egypt as its regional export hub and for a $250 million investment allocation for projects that include a manufacturing plant in East Port Said.

The plant would be the first located in Egypt’s much-touted Suez Canal Economic Zone, on which the government has pinned hopes of building a re-export hub that will draw badly needed hard currency but which has so far struggled to secure foreign investors.

A parliamentary fact-finding committee investigating the wheat procurement scandal is expected to deliver its final report to the head of parliament on Sunday, committee member Yasser Omar told Reuters.

Among the report’s recommendations is that all private storage areas include monitoring capabilities similar to those of the Blumberg sites in order to prevent a repeat of this year’s fraud, Omar added.

The minister of supplies said last month his ministry had finalised inspections at storage areas and that only 4 percent of the value of this year’s harvest was missing.

 

 

MIDEAST STOCKS-Gulf markets diverge, Egypt settles at 14-month high – REUTERS

DUBAI, Aug 15 Stock markets in Dubai, Qatar and Egypt climbed to multi-month highs on Monday but Saudi Arabia was dragged lower by banking shares vulnerable to economic pressures due to low oil prices.

Dubai’s index rose 1.0 percent to end at 3,602 points, just below technical resistance at its April peak of 3,605 points, as trading volume more than doubled from Sunday, a positive technical signal. Any break of resistance would point up to the October peak of 3,740 points.

Emaar Properties added 1.4 percent to 7.44 dirhams, taking its gains over the last week to 7.8 percent. The stock confirmed a break of resistance on the October peak of 7.01 dirhams, triggering a major reverse head & shoulders pattern formed by the highs and lows since August 2015 and pointing up in the very long term to around 9.75 dirhams.

The Gulf’s only listed exchange, Dubai Financial Market , gained 3.8 percent in its heaviest trade since May 3.

But builder Drake & Scull, the most heavily traded stock, dropped 3.7 percent after reporting a second-quarter net loss attributable to owners of the parent of 207.6 million dirhams ($56.6 million), versus a profit of 10.3 million dirhams a year earlier. EFG Hermes had forecast a quarterly loss of 11.4 million dirhams.

In Abu Dhabi, the index climbed 0.7 percent with main support from large-cap bank shares. National Bank of Abu Dhabi and Union National Bank each added 1.2 percent.

Qatar’s index recouped early losses to close 0.7 percent higher at a fresh nine-month peak of 11,128 points as most blue chips gained. Islamic lender Masraf Al Rayan added 1.5 percent and Ooredoo climbed 2.5 percent.

The index is now up 6.6 percent year-to-date as international funds have flowed into Qatari equities. But some shares, such as Qatar National Bank, which edged down 0.2 percent to 158.00 riyals on Monday, are now considered fairly valued. According to Thomson Reuters data, the mean target price of 10 analysts for QNB is 158.71 riyals.

EGYPT, SAUDI ARABIA

Cairo’s main index rose 1.2 percent to a 14-month closing high of 8,454 points. Arabian Cement jumped 4.1 percent in unusually heavy trade. The stock is owned to a large degree by international funds including Morgan Stanley Investment Management and Ashburton.

Commercial International Bank, another stock favoured by foreign investors, rose 3.2 percent, taking its gains over the last week to 5.2 percent.

The market’s index has advanced 2.0 percent since Egypt announced on Thursday that it had reached preliminary agreement on a three-year, $12 billion loan from the International Monetary Fund.

GB Auto, which rose 1.6 percent on Sunday after posting strong second-quarter earnings, dropped 2.4 percent on Monday.

In Saudi Arabia, the index failed to hold onto early gains and closed 0.3 percent lower as banking shares weighed on the bourse; heavyweight National Commercial Bank fell 0.5 percent.

Some analysts are concerned about the financial difficulties of major construction firm Saudi Oger, which could pressure suppliers around the sector and the banks which lend to them; financial website Maaal quoted unnamed economists as saying 300 billion riyals ($80 billion) of debt could be vulnerable.

Investors are also concerned by the pressures on liquidity at banks due to low oil prices. After King Salman on Sunday ordered a month’s extra pay for Saudi military and security personnel actively involved in military operations in Yemen, the central bank issued a statement on Monday saying this would not compromise the banking system in any way.

But the petrochemical sector was resilient after this week’s rise in oil prices, with the sub-index adding 0.2 percent as Brent oil futures traded over $47 a barrel.

 

Unemployment rate declines to 12.5% in 2nd quarter of 2016/2017 FY: CAPMAS

Unemployment rate in Egypt has declined to 12.5 percent in the second quarter of Fiscal Year of 2016/2017 (April to June), comparing 12.7 percent in the first quarter (January to March), according to a report from the Central Agency for Public Mobilization and Statistics (CAPMAS) Monday.

 

Agriculture Export Council calls for reconsidering decision of exportation ban on rice

The Egyptian Agriculture Export Council called for reconsideration the decision of banning to export rice, saying the lifting the ban would yield $400 million, said the council chairperson Abdel Hamid el Demerdash.

On August 11, Trade Minister Tarek Qabil decided to halt the exportation of rice outside the country to cover the domestic market’s needs and to keep prices stable, state T.V reported.

The decision comes “to curb all manipulation and fraud attempts by smugglers” after the price of Egypt’s main commodity soared to nine EGP ($1.7) per kilogram, said Qabil.

In its weekly meeting on Wednesday, the Egyptian Cabinet decided to purchase rice from farmers for 2,300 Egyptian pounds per ton, Youm7 reported.

 

Sisi to participate in Hangzhou-held G20 Summit

President Abdel Fatah al-Sisi will participate in China’s Hangzhou-held G20 Summit that due to be held in September, Youm7 reported.

The total of Chinese grants in Egypt has reached $169 million since 1992, while the soft loans for Egypt recorded $305.4 million, according to the latest data from the Egyptian Ministry of International Cooperation.

 

Egypt’s stock benchmark rises by 1.25% in midsession of Monday trading

Egypt’s exchange benchmark has risen by 1.25 percent in the midsession of Monday trading, led by Arab purchases, Youm7 reported. EGX 50 index went up by 0.86 percent, while EGX 20 index increased by 0.78 percent.

 

Egypt’s SODIC posts H1 net profit of 157.785 mln EGP

(Reuters) Egypt’s SODIC posts H1 net profit of 157.785 million Egyptian pounds versus 152.288 million in same period last year -statement Further company coverage.

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