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Monday, 02 Mar 2020

Egypt to Launch an International Exploration Tender for Gold on March 15


Insights MENA

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Economic Outlook

Economic Outlook

  • Egypt will launch an international bid round for gold and mineral exploration on 15 March and will accept bids until 15 July. Investors will bid for exploration in the Eastern Desert over an area totaling 56,000 sq km noting that it is believed to be highly mineral-rich. Winning bids will be awarded within four months of the tender being launched.
  • Egypt and Ukraine offer the world's most attractive EM bonds with high real interest rates, improving geopolitical situations, and sweeping reforms. Noting that Egypt and Ukraine bond markets are among the most attractive across emerging markets.
  • The EGP appreciation may push the government's fuel pricing committee to lower prices when it meets in March 2020. The committee-maintained prices for all grades when it held its Q1-2020 meeting under a new pricing mechanism which took hold last year.
  • The US dollar decreased to a 20-week low against the Japanese yen last Friday after Federal Reserve Chair Jerome Powell suggested the Central Bank could cut interest rates in the wake of the coronavirus. Powell stated that the Central Bank will "act as appropriate" to support the economy in the face of risks posed by the coronavirus outbreak.
  • The Sovereign Fund of Egypt (SFE) is studying 10 military-owned companies to offer them co-investment. The evaluations come under an agreement the SFE signed last month with the military-affiliated National Service Products Organization (NSPO) to open up its subsidiaries for investors and address private sector complaints that the military is crowding them out.
  • The Saudi Arabian Monetary Authority (SAMA) reported an increase in assets by 54% in January 2020. Meanwhile, Saudi Arabia foreign reserves grew by 2.4% in January 2020 by 44.55 BN SAR (11.88 BN USD) reaching 1.88 TR SAR (501.1 BN USD) compared to 1.84 TR SAR (490.4 BN USD) in January 2019.
  • Saudi Arabia economy is expected to rebound in 2020 from the downturn in 2019. However, the weak global oil demand forecasts, which are now exacerbated by a coronavirus-related demand slowdown and barring foreign pilgrims from entering the kingdom, could hinder its recovery. In January 2020, the International Monetary Fund (IMF) had cited lower oil output when it lowered its forecast for the country’s 2020 growth to 9% from 2.2%.
  • UAE Fuel Price Follow-up Committee decided to lower gasoline and diesel prices, which include a 5% value-added tax (VAT), starting from March 2020. The per-liter prices of gasoline E-Plus 91 and Special 95 will be 1.97 AED (0.54 USD) and 2.04 AED (0.56 USD), respectively, while Super 98 will be priced at 2.16 AED (0.59). Meanwhile, the price of diesel will decline to 2.25 AED (0.61 USD) per liter in March, down from 2.40 AED (0.65 USD) in February 2020.
  • The Central Bank of the UAE gold reserve amounted to 31 BN AED (1.43 BN EGP) in January compared to 4.04 BN AED (1.09 BN EGP) in December 2019. The growth, the highest in several months, comes in line with the recent steady hikes in gold reaching 1,650 USD (6,060.45 AED) per ounce.
  • Kuwait inflation rate increased by 68% y-o-y to 115.3 points in January 2020 compared to 113.4 points in January 2019, according to Kuwait Central Statistical Bureau (CSB). The telecommunications sector was the key contributor to the consumer price index (CPI) growth by 4.40%, while prices of the housing services sector advanced by 0.86%.
Political Events

Political Events

  • Qatar Communications Regulatory Authority (CRA) announced the resumption of postal services with UAE, Saudi Arabia, Bahrain, and Egypt after being frozen since June 2017. This came after a meeting organized by the UN’s Universal Postal Union with the previously mentioned countries in Bern, Switzerland, at the end of January 2020.
  • Four people who had recently travelled to Egypt were diagnosed with the covid-19 virus over the weekend. The French health minister confirmed that two elderly French tourists had contracted the virus, and the Ontario government said that a Canadian man had tested positive. A fourth Taiwanese person who had travelled to Egypt and UAE was reported to have tested positive for covid-19.
Stock Market

Stock Market

  • Bahrain Al Salam Bank has just purchased 310,000 new treasury shares on the Dubai Financial Market (DFM) and Bahrain Bourse (BHB). The additional shares, acquired on February 25, bring the bank’s total holding of treasury shares to 3 million shares from 76.98 million shares, and represent 3.488% of issued share capital.
  • Shares of Saudi Aramco hit 50 SAR (8.66 USD) in intraday trade yesterday, the lowest since it began trading in December following a record initial public offering, as oil prices fell amid worries about the global spread of the coronavirus. The state-owned oil giant raised 29.4 BN USD in the world's biggest IPO, by selling 1.7% of the company.

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

Companies Transactions

Companies Transactions

  • El Nasr Mining Company will offer 97% in an initial public offering (IPO) on the EGX as part of the state privatization program. No details were provided on an anticipated timeline for the offering. El Nasr Mining is one of eight companies the Public Enterprises Ministry was choosing from to IPO on the EGX before the end of 2019/2020.
  • The Egyptian government has postponed the IPO of e-payments firm E-Finance to Q4-2020, citing delays valuing the company. The fair value report was originally expected to be completed at the end of January paving the way for the company to go public in April 2020.
  • Cairo-based software company Garment IO has raised 450,000 USD in seed funding from Egypt Ventures and accelerator 500 Startups. Garment IO will use the investment to expand its operations in Egypt, build its tech team and upgrade customer support, adding that the company has plans to launch their product in Jordan, Tunisia, Morocco, and Turkey.
  • The Saudi Hospitality Development Group, which represents Swiss International in the Middle East, has signed an exclusive contract valued at 03 BN EGP (450 MM USD) with Egypt Tharawat Investments to manage and invest in hotels and tourist resorts in the country.
  • Italy’s Eni and Spain’s Naturgy have reached an agreement with the Egyptian government that will see Naturgy exit Union Fenosa Gas (UFG), its joint venture with Eni. The agreement will grant Naturgy 37 BN EGP (600 MM USD) for UFG’s assets outside Egypt. It will now be 50% owned by Eni, 40% by Egyptian Natural Gas Holding Co. (EGAS) and 10% by the Egyptian General Petroleum Company (EGPC).
  • Nasdaq Dubai has welcomed the listing of five-year Sukuk issued by Islamic Development Bank (IsDB) at a value of 2 BN USD. The Sukuk is the largest by value to be listed on Nasdaq Dubai by IsDB, the multilateral lender which finances development in 57 member countries
  • Al Moammar Information Systems Co announced signing a credit facility agreement worth 45 MM SAR (11.9 MM USD) with Cisco Systems Finance International. The funding has a one-year term starting from the date of the first payment and is secured by a promissory note at 100% of the total value of the facility.
Sports and Culture

Sports and Culture

  • Liverpool's remarkable unbeaten run in the Premier League came to an end on Saturday night as Watford defeated them 3-0 at Vicarage Road. For the first time in 422 days, Liverpool has lost their first Premier League game of the season. Ismaïla Sarr scored two goals in the second half and relegation-battling Watford surprised the runaway league leaders 3-0. Nonetheless, Liverpool have become only the third team to go unbeaten for more than a year in the Premier League.
  • Dubai Culture and Arts Authority (Dubai Culture) has partnered with the region’s first pop-up cinema concept Films In A Box to bring films to a wider audience at the forthcoming Al Marmoom: Film In The Desert. The event, which is a platform to support emerging and established filmmakers both locally and regionally will take place between March 4 to 7 in Al Marmoom desert as part of the seventh edition of Dubai Art Season.

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