Home > Insights > Egypt has reached an agreement with the International Monetary Fund (IMF) for a 12 BN USD three-year funding facility to support a government reform program which is expected to cut the state funding gap and improve the Egyptian pound.
Tuesday, 16 Aug 2016

Egypt has reached an agreement with the International Monetary Fund (IMF) for a 12 BN USD three-year funding facility to support a government reform program which is expected to cut the state funding gap and improve the Egyptian pound.


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Economic Outlook

Economic Outlook

  • Egypt has reached an agreement with the International Monetary Fund (IMF) for a 12 BN USD three-year funding facility to support a government reform program which is expected to cut the state funding gap and improve the Egyptian pound.
  • Total value of real estate loans provided by Saudi banks in Q2-2016 decreased by 1% to reach 191.8 BN SAR compared to Q2-2015. However, real estate loans to individuals increased by 1.8% q-o-q to reach 108.2 BN SAR, but a 4% drop in loans to companies brought down the overall sector.
  • Oman's Consumer Price Index-based inflation in July 2016 recorded a 0.3% increase compared to June 2016 and a 1.3% increase compared to July 2015 due to 7.87% increase in transport and 0.88% increase in housing, water, electricity, gas and fuel set prices.
  • Qatar was reported as the second-largest producer of fertilizers in the GCC, producing 9.8 million tonnes of fertilisers which is more than 25% of the region's total production of 37.8 million tonnes of fertilisers.
  • Egypt has repaid dues of 7 BN USD in total to Qatar which the Gulf state had deposited to support the Egyptian central bank's foreign currency reserves after the 2011 revolution. The last instalment worth 1.02 BN USD was paid in July. This is in addition to repaying 250 MM USD out of 2 BN USD due to Libya.
  • Morocco's unemployment rate decreased to 8.6% in Q2-2016 from 8.7% in Q2-2015. Employment growth was mostly in the construction and services sectors adding 149,000 additional jobs to help offset 175,000 jobs lost in the agricultural sector due to a severe drought.  
  • Adopting low-cost energy-saving measures, Jordan could reduce its power bills by 30-40%. The measures include installing LED bulbs and improving the efficiency of heating and cooling systems in public buildings.
  • The Saudi Ministry of Labor and Social Development is focusing on total nationalization of jobs in the automobile sector which will start after Haj, and will be completed by 2017. It is worth mentioning that Saudi Arabia had previously nationalized 100% of jobs in the telecom sector as part of its Saudization plan.
  • Jordanian Cabinet approved the recommendations to boost medical tourism including; improving the investment environment, allowing private hospitals to generate alternative energy, allowing hospitals to expand to more than eight floors, as well as allowing hospitals to hire guest workers in 10% of the nursing positions in certain specializations.
  • In light of the current budget deficit of 2.4 MM KWD, Kuwaiti government announced that 100-120 MM KWD will be saved by raising fuel prices. In addition, Kuwait Central Bank issued 1 BN KWD in local bonds as the oil revenues generated for two months is not sufficient to pay the employees' salaries of 800 MM KWD each month.
  • In efforts to increase its non-oil revenues and develop the national economy, Saudi Arabia made a number of decisions which are expected to increase non-oil revenues by 512% as it reached 163.5 BN SAR in 2015, such as the application of entry tariffs for first time Haj and Umrah visitors, and new regulations for violations of visa, traffic and other laws, as well as the increase in the tariffs on municipal services related to advertising.
  • Oman's conventional banks recorded a 10.8% growth in aggregate personal loans which stood at 7,512.30 MM OMR on March 2016. It is worth noting that the aggregate personal loan portfolio of Omani banks constitutes 39.4% of total bank credit. 
Political Events

Political Events

  • A fire probably caused by an electrical fault killed twelve prematurely born babies on a maternity ward in a Baghdad hospital. Eleven or twelve other babies and 29 women were rescued and transferred to other hospitals.
  • The Kuwaiti Central Council of the Labor Union calls upon labor unions and NGOs to confront the Cabinet's decision to raise gasoline prices through which the government will burden the working class with the budget deficit.
  • One of Bahrain's Gulf Air aircraft, flight number GF155, suffered an engine failure shortly after take-off from the Philippines and landed again in Manila. However, all passengers on board were safely evacuated.
  • Lebanese protestors cut off the St. Simon road in Ouzai, an impoverished coastal strip located north of the Beirut airport, with burning tires to protest the dumping of industrial residue into the sea, which polluted the area and threatens the livelihoods of local fishermen.
  • Saudi Arabia stopped two ballistic missiles fired by Yemen's armed Houthi movement at the kingdom on Wednesday. This attack followed renewed air strikes by a Saudi-led military coalition in Sanaa, the Houthi-controlled Yemeni capital.
Stock Market

Stock Market

  • .TASI witnessed a significant increase in petrochemical sector led by SABIC and SAFCO. Moreover, banking sector increased led by Al Rajhi Bank and Alinma Bank.
  • .KWSE banking sector increased led by Ithmaar Bank. On the other hand, financial services sector declined led by Arabi Group.
  • .ADI real estate sector declined led by Aldar Properties
  • .DFMGI real estate sector increased led by Emaar Properties. On the other hand, banking sector declined led by Dubai Islamic Bank (DIB).
Index Watchlist
Weekly % Change
YTD% Change
Egypt
.EGX30
1.5%
19.6%
Construction & Materials
-0.6%
-15.3%
Telecommunication
-0.6%
54.2%
Banking
2.7%
25.6%
KSA
.TASI
-0.8%
-8.5%
Petrochemicals
4.0%
5.5%
Banks & Financial Services
1.0%
-12.8%
Telecommunication & Information
1.0%
-13.4%
Kuwait
.KWSE
0.7%
-2.1%
Banking
1.3%
-12.4%
Telecommunication
0.9%
0.5%
Financial Services
-0.7%
-5.4%
Real Estate
-0.1%
-11.2%
Industrials
2.2%
11.6%
Qatar
.QSI
2.6%
5.0%
Banking & Financial Services
2.4%
6.2%
Industrials
3.1%
3.7%
Real Estate
2.5%
18.9%
Telecommunication
3.8%
24.0%
UAE, Abu Dhabi
.ADI
0.0%
5.1%
Banking
0.0%
-3.7%
Telecommunication
0.3%
23.3%
Real Estate
-0.2%
20.2%
UAE, Dubai
.DFMGI
1.5%
11.9%
Banking
-0.1%
1.2%
Real Estate & Construction
3.2%
16.4%
Investments & Financial Services
1.8%
5.6%
Telecommunication
-0.6%
28.2%
Companies Transactions

Companies Transactions

  • GB Auto, an Egyptian auto distributor, more than quadrupled its Q2-2016 net profit to reach 123.75 MM EGP compared to 22.4 MM EGP in Q2-2015. Sales climbed by over 22% to reach 3.93 BN EGP in Q2-2016 from 3.21 BN EGP in Q2-2015.
  • UAE's Finance House has purchased 50,000 shares (10%) of its share capital at 1.78 AED per share, and is yet to buy an additional 30 million shares. Finance House recorded a healthy consolidated net-profit of 25.54 MM AED in Q1-2016, compared to 25.53 MM AED in Q1-2015.
  • Australia Post has bought a 4.5% stake in Aramex, the Dubai-based logistics firm for nearly 76 MM USD. It is the second significant purchase of Aramex shares by strategic investors after Dubai entrepreneur Mohamed Alabbar had led two investor groups in buying a combined 16.45% stake in Aramex last month.
  • In efforts to expand, Oman Air has signed a letter of intent with Dubai Aerospace Enterprise (DAE) to buy and lease back two new B737-800 aircrafts. The first of the two aircrafts was delivered in July and the second is expected to arrive at Muscat this month.
  • Investcorp, Bahrain-based alternative investment fund, reported a 45.1% decrease in its financial year's second-half net profit with net income of 39.2 MM USD, down from 71.4 MM USD a year earlier. However, its board had proposed paying a dividend of 24 cents per share for the financial year compared to 15 cents last year.
  • Kuwait Finance House (KFH), reported a 7% growth in SMEs portfolio of clients at the end of H1-2016. KFH announced that the credit limit of the Business Banking specialized in financing the small and medium-sized enterprises (SMEs) is around 300 MM KWD, indicating that Business Banking department at KFH offers services to over 2285 customers.
  • The Sharjah-based Air Arabia, the United Arab Emirates' only publicly listed airline, reported a 13.6% fall in Q2-2016 net profit. The firm made a net profit of 126.4 MM AED in Q2-2016, compared with a profit of 146.3 MM AED in Q2-2015.
  • Kuwait Finance House announced that it is interested in bidding for the Central Bank of Egypt's 99.9% share in the United Bank. The Central Bank of Egypt has previously announced its intention to sell its shares in the bank to a strategic investor. It is also worth mentioning that the Kuwaiti bank may start due diligence to buy the United Bank during this month.
  • Abu Dhabi National Energy Company (TAQA), a state-owned oil explorer and power supplier, reported a Q2-2016 net loss of 588 MM AED compared to a net loss of 421 MM AED in Q2-2015. The company was adversely affected by low oil prices and revenues from oil and gas fell to 1.04 BN AED in Q2-2016 versus 1.59 BN AED in Q2-2015.
  • Kuwait Food Co. (Americana), the operator of several restaurant franchises in the Middle East including KFC, reported a 31% increase in Q2 net profit to reach 9.03 MM KWD, up from 6.88 MM KWD in Q2-2015; however, the company did not provide any reason for the increase in profit.
Sports and Culture

Sports and Culture

  • Michael Phelps of the United States won the Olympic 200 meters' individual medley acting as the 22 nd gold medal of his career. He also became the first swimmer to win the same award in four consecutive Games.
  • The Saudi Ministry of Culture and Information announced that Saudi Arabia will soon have its own media production city. The city will include a special platform to produce artworks that will highlight the Kingdom's history, heritage, folklore and tolerance.
  • Egyptian weightlifter Sara Ahmed, the first female from Egypt to stand on the Olympic podium, lifted 255 kg in the women's 69 kg weightlifting competition to finish third with a bronze at Rio. It is worth noting that Sara Ahmed's bronze is Egypt's first weightlifting medal since 1948.
  • A new application launched two weeks ago by Saudi lawyer Nisreen Al-Issa called "Know Your Rights" has turned out to be a big hit with more than 20,000 people browsing it, and huge appreciation on the social media. The app educates women about their legal rights, and includes information such as steps to file a lawsuit, their custody of children, divorce and financial support, telephone numbers of lawyers, formats of lawsuits, court addresses, as well as debates and tips from lawyers for free.
  • Kuwait's Fehaid Al-Deehani won a gold medal for men's double trap making him the first Arab and the first independent athlete to get the gold at the Olympics this year. Deehani and seven other athletes competed in the Olympics in Rio as independents after Kuwait was suspended by the IOC.
  • The Lebanese Ray Bassil became the first Arab to compete for the women's trap shooting discipline at the Olympics; however, her performance in Rio de Janeiro failed to win a medal after she finished with an unsatisfactory score of 65 out of 75 and did not progress to the final.

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