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Monday, 04 May 2020

Egypt places Second in MENA for the International Open Budget Transparency Survey


Insights MENA

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Economic Outlook

Economic Outlook

  • Egypt ranked 61 out of 117 countries in the International Budget Partnership’s Open Budget Survey in 2019. The Open Budget Index is the world's only independent, comparative measure that tracks government budget transparency. Countries covered by the Open Budget Survey are given a transparency score between 0 and 100, which the International Budget Partnership (IBP) uses to construct the index, ranking assessed countries. Egypt inched up four spots from 65th when the report last came out in 2017 and is now in the 2nd place regionally behind
  • MENA fund managers plan to increase their exposure to Egypt over the next three months. The majority of managers are optimistic about investing in Egypt despite the economic fallout caused by covid-19. Stressing that Egypt could avoid seeing its economy contract this year because of foreign reserves and credit lines with international financial institutions.
  • Egyptian banks’ Net Foreign Assets (NFAs) dropped 45% reaching 66 BN EGP (12.65 BN USD) in March 2020 compared to 358.78 BN EGP (23.08 BN USD) in February. The 162.12 BN EGP (10.42 BN USD) drop came as the covid-19 pandemic spurred capital outflows from the country and other Emerging Markets (EMs), which saw investors pulling a record 83 BN USD from EMs.
  • The Central Bank of Egypt (CBE) cuts interest on soft loans for tourism industry to 5% from 8%: The CBE is subsidizing loans from banks to tourism companies to help them cover wages, commitments to suppliers and maintenance expenses.
  • Moody's Investors Service cut Saudi Arabia outlook to "negative" from "stable" last Friday, citing higher fiscal risks for the Gulf nation due to the crash in oil prices, and uncertainty about the Saudi government's ability to offset the oil revenue losses and stabilize its debt in the medium term.
  • Saudi Arabia Central Bank foreign exchange reserves decreased in March 2020 at their fastest rate in at least 20 years, hitting their lowest level since 2011, while the country slipped to 9 BN USD budget deficit in Q1-2020 as oil revenue collapsed.
  • UAE is ranked second in the Arab world and among the top 20 financially strong emerging economies globally, according to The Economist's analysis of 66 countries. The report measures financial strength of countries based on their public and foreign debts, cost of borrowing and reserve cover. UAE is rated high on low cost of borrowing, followed by low public debt and reserve cover and foreign debt.
  • UAE is set to emerge among the world's most resilient economies in 2020 post-Covid-19, thanks to traditional and new sectors as well as rapid, decisive and innovative measures taken to contain the virus. Euromonitor International's Resilience Index has rated UAE third-resilient economy after China and Saudi Arabia, while Malaysia and India are the other two countries among the top five winners for post Covid-19 recovery.
  • The value of exports of national origin from Bahrain decreased by 1% to 579 MM BHD (1.53 BN USD) in Q1-2020 compared to 587 MM BHD (1.55 BN USD) in Q1-2019. On the other hand, the value of imports increased by 8% reaching 244 BN BHD (3.29 BN USD) in Q1-2020 compared to 1.157 BN BHD (3.06 BN USD) in Q1-2019.
  • The total value of Kuwait foreign reserves increased by 57% y-o-y to 12.42 BN KWD (39.96 BN USD) in February 2020 compared to 11.44 BN KWD (36.81 BN USD) in February 2019. On a monthly basis, Kuwait saw a 1.22% increase in the foreign reserve in February 2020 compared to 12.27 BN KWD (39.66 BN USD) in January 2020.
Political Events

Political Events

  • Texas and Georgia are the first US states that decided to reopen last Friday, despite warnings from public health experts that prematurely lifting restrictions could cause a spike in cases and deaths. Governors of other states, including New York and Washington, have signaled that lockdown measures will remain in place for at least the rest of the month.
  • Boeing has completed the first flight of the F-15QA fighter, the most advanced version of the jet ever manufactured. Developed for the Qatar Emiri Air Force (QEAF), the jet demonstrated its next-generation capabilities during its 90-minute mission.
Stock Market

Stock Market

  • EFG Hermes topped the EGX’s brokerage league table in April with a market share of 7%. CI Capital came in the second with a market share of 12.1% and Pharos came in third at 4.8%, followed by Pioneers (3.7%), Beltone (3.7%), Arqaam (3.3%), and Naeem (3.2%).
  • The Emirates Telecommunications Group Company PJSC (Etisalat Group) announced that the dividend per share (DPS) of 25 fils announced by the Group in its disclosure dated April 1st pertains to Q1-2020. The objective of the interim dividend for Q1-2020 is to boost liquidity of shareholders.

Note:  Weekly values are calculated on Thursday of each week.

Companies Transactions

Companies Transactions

  • At least six foreign and Egyptian investors have shown interest in acquiring a stake in Raya Holding's recycled plastic producer BariQ, including an Egyptian investment institution that seeks full ownership. Raya is receiving offers of interest for minority and majority stakes in BariQ, which plans to spend 300 MM EGP (19.29 MM USD) to establish new production lines and double its output capacity to 3.2 billion recyclable bottles per year.
  • Egypt-based blockchain email service provider Pravica has raised a 500,000 USD pre-seed funding round led by 500 Startups. Pravica, which was originally named Dmails, plans to use the funding to grow its team and expand its product by developing additional private communication tools.
  • The Commercial International Bank (CIB) has donated 80 MM EGP (5.1 MM USD) to the Egyptian Food Bank to support impacted families and businesses, 38.86 MM EGP (2.5 MM USD) to the Tahya Misr fund to help purchase 100 PCR testing machines and kits.
  • The Arab Petroleum Investments Corporation (Apicorp) has announced 500 MM USD funding package to help its clients in the energy sector cover shortfalls caused by the covid-19 pandemic and the collapse in oil prices.
  • Misr Phosphate Company has authorized capital of 100 MM USD for the new Abo Tartor Phosphoric Acid Project. The company has a total investment worth 1 BN USD in the project, which is located in the New Valley Governorate. A total of 65% of the investments would be funded by debt, with 35% coming through equity.
  • Qatar Petroleum, one of the world's biggest energy companies, plans a new wave of job cuts and spending reductions to cope with the drop in oil and gas demand which has hit global economies.
  • Abu Dhabi National Insurance Company (ADNIC) announced its financial results for Q1-2020 registering 1% increase in net profit amounted to 122.6 MM AED (33.37 MM USD) compared to Q1-2019. ADNIC’s performance was driven by a strong balance sheet and solid market position.
  • Brooge Petroleum and Gas Investment Co (BPGIC) has leased oil storage facilities in UAE to France's Total. The company is leasing six storage tanks in UAE emirate of Fujairah for six months and this could be renewed for another six months.
  • Yallacompare.com, the Middle East’s leading finance comparison site, has raised 4.25 MM USD of fresh capital from Kuwaiti stock exchange listed Gulf Insurance Group (GIG). GIG is amongst the largest and most diversified insurance groups in the Middle East and North Africa region.
Sports and Culture

Sports and Culture

  • The Department of Culture and Tourism of Abu Dhabi (DCT Abu Dhabi) has announced the launch of its new virtual exploration platform, #StayCurious, which will provide audiences worldwide with original education and entertainment content in one comprehensive hub. The platform gives audiences around the world a taste of the emirate’s unique ambiance and hospitality through an interactive 360-degree experience.
  • FIFA has proposed that teams should be allowed to make up to five substitutions per match, instead of the usual three, as a temporary measure to help cope with potential fixture congestion in the aftermath of the novel coronavirus outbreak. FIFA added that the substitutions would have to be made in a maximum of three slots plus the halftime interval.

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