Egypt’s business digest Nov. 18: Egypt gold prices down on Fri., 21-k sold at 550 EGP per gram
An Employee Shows Gold Bangles To A Customer - REUTERS/Danish Siddiqui


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Egypt gold prices down on Fri., 21-k sold at 550 EGP per gram

Egypt gold prices witnessed a slight decline in local markets on Friday with a gram of 21-k reaching 550 EGP (about$37) per gram down from 555 EGP a day earlier, Youm7 reported

The decrease is attributed to “the drop in US dollar’s value against the Egyptian Pound,” Ihab Wassef, member of Gold Division of the General Union Chamber of Commerce told Youm7.

A gram of 18-carat gold reached 471.40 EGP per gram, he added.

The price of the Gold Pound (7 grams 24 carat) stood at 4,400 EGP, he added.


Budget deficit down to 76.8b EGP in 3Q of 2016: report

Egypt’s budget deficit during the period between July and September 2016 decreased to reach 76.8 billion EGP, Finance Ministry announced in a report Friday.

The drop represents 2.4 percent of the country’s gross domestic product (GDP), according to the report.

The state revenues during the same period decreased by 3.2 percent to reach 96.8 billion EGP, down from 100 billion EGP during the same period a year earlier, according to the report.

Total expenses rose to 172.2 billion EGP up from 170 billion EGP in the same period of the previous year, it said.


Egypt keeps key interest rates unchanged at MPC meeting

Egypt’s central bank kept its key interest rates unchanged on Thursday, two weeks after surprising markets with a 3 percent hike in its key rates.

The Monetary Policy Committee kept the overnight deposit rate at 14.75 percent and the overnight lending rate at 15.75 percent, as predicted by all 15 respondents in a Reuters poll.

The bank had already raised rates by a cumulative 550 basis points this year.

On Nov. 3, the central bank ditched its peg of 8.8 per dollar and hiked interest rates by 300 basis points to stabilise the newly floated pound. Its initial guide level was 13 to the dollar and on Thursday it allowed the pound to drift to about 15.75/16.00 per dollar

“Based on the targeted reserve money and the inflation outlook assessed in the extraordinary MPC meeting on Nov. 3, 2016, tightening monetary conditions was warranted,” the central bank said in a statement.

“At this juncture and given the balance of risks, the MPC judges that the key CBE rates are currently appropriate.”

Egypt has been struggling to revive its economy since a popular uprising in 2011 drove away tourists and foreign investors – both major sources of hard currency.

Last week, the country secured a $12 billion loan from the International Monetary Fund, on conditions it continues to push through painful economic reforms including imposing a value-added tax, cutting electricity subsidies and raising fuel costs.

The reforms contributed to a rise in Egypt’s core inflation, which jumped in October although annual urban consumer price inflation eased for the second consecutive month after hitting an eight-year high in August.

Yields on Egyptian treasuries jumped significantly in auctions following the surprise hike on Nov. 3 but later dropped as demand for government debt rose.

On Thursday, average yields on six-month and one-year treasury bills dropped significantly at an auction.

The 182-day treasury bill yield dropped to 17.716 percent from 18.469 percent at the previous auction, and the yield for the 357-day treasury bills dropped to 17.606 percent from 18.903 percent in a similar auction.


Egypt’s 1-year treasury bill yield drops to 17.606 pct at auction

(Reuters) – The average yields on six-month and one-year treasury bills dropped significantly at an auction on Thursday, central bank data showed.

The 182-day treasury bills dropped to 17.716 percent from 18.469 percent at the previous auction, and the yield for the 357-day treasury bills dropped to 17.606 percent from 18.903 percent in a similar auction.


EGX gained 24.6 bln EGP last week

The Egyptian Stock Exchange has gained 24.6 billion EGP by the end of last week’s transaction session.

The main EGX30 rose by 2.04 percent and EGX50 increased by 0.43 percent.


Egypt gains in record volume, Saudi underperforms peer markets

(REUTERS): Egypt’s blue chips carried the Cairo stock index to fresh eight-year highs in the heaviest trading volume on record on Thursday as foreign funds continued to flow in, while Saudi Arabia edged down in modest volumes.

The Cairo blue chip index jumped 2 percent as a record 770 million shares traded hands, bringing its gains to 32 percent since the Egyptian pound was floated on Nov. 3.

Bourse data showed foreign investors remained net buyers of Egyptian equities on Thursday to the tune of about $8 million; they have been net buyers every day since the float.

“The market rally is overdone, but there has been a structural change in the economy brought about by the flotation of the currency, and this has unleashed both foreign capital inflows as well as liquidity in the equity markets, which is encouraging,” said Kunal Damle, institutional sales broker at Bahrain’s Securities & Investment Co.

“The stabilisation of the pound around 15.50-15.75 to the dollar is also encouraging foreign buyers to buy shares.”

However the general market index closed up only 0.8 percent and declining stocks outnumbered gainers by 133 to 52, showing investors’ purchases were narrowly focused – a sign that the uptrend might soon stall.

Egypt Kuwait Holding jumped 9.8 percent. Earlier this week the diversified investment company, which invests primarily in fertilisers and petrochemicals, announced its third-quarter net profit came in at $12.1 million, a little more than double its profit in the prior-year period.

Analysts at Naeem Brokerage said in a note: “We continue to recommend EKHO as a buy – the medium-term outlook for EKHO continues to be positive (although the next few quarters could be impacted by Egyptian pound weakness), while commodity prices have been recovering.”

Abu Dhabi’s main index edged up 0.04 percent as Abu Dhabi Commercial Bank added 0.7 percent, after it gained 5.8 percent on Wednesday. But Union National Bank lost 0.5 percent after jumping 12.3 percent, and Abu Dhabi Islamic Bank was flat after rising 4.7 percent.

Speculation that ADCB and UNB might merge with each other, and that ADIB might merge with Al Hilal, flared again this week, although several bankers familiar with the industry in Abu Dhabi told Reuters that formal talks were not underway and the idea of any merger was still preliminary.

Dubai’s main index added 1.4 percent with activity focusing on smaller shares usually traded by local speculative investors. Investment firm Shuaa Capital soared 12.2 percent.

Dubai Financial Market closed 3.7 percent higher. Shares in the only listed exchange in the Gulf came under selling pressure earlier this week after index compiler MSCI said it planned to delete the stock from its standard index.


Saudi Arabia’s index edged down 0.3 percent to 6,629 points, stalling near technical resistance at the July peak of 6,703 points. Volume was the lowest in a week.

Some banks fell as investors booked profits; National Commercial Bank dropped 0.5 percent to 41.00 riyals, and is now roughly at par to the 42.14 riyal mean fair value of analysts polled by Reuters. The banking sub-index has soared 28 percent over the past 30 days.

The index has now gained for four straight weeks in what many analysts call a “relief rally” triggered by Saudi Arabia’s successful international bond sale and the government’s promise that it would soon settle its unpaid bills to the private sector.

But the market is now again starting to look more expensive than the MSCI emerging market index: it is at a 2017 price-to-earnings ratio of about 14.1 times, against roughly 13 times for MSCI’s index.

“There are potential headwinds in the near term which justify caution,” NCB Capital said in a note, citing this month’s OPEC meeting, the release of the government’s 2017 budget in December, and fourth-quarter corporate earnings.

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