Home > Insights > In line with expectations, the Central Bank of Egypt (CBE) Monetary Policy Committee (MPC) cut interest rates by 100 bps last Thursday
Monday, 30 Sep 2019

In line with expectations, the Central Bank of Egypt (CBE) Monetary Policy Committee (MPC) cut interest rates by 100 bps last Thursday


Insights MENA

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Economic Outlook

Economic Outlook

  • In line with expectations, the Central Bank of Egypt (CBE) Monetary Policy Committee (MPC) cut interest rates by 100 bps last Thursday. The CBE's overnight deposit and lending rates now stand at 13.25% and 14.25%, respectively. The main operation and discount rates are now 13.75%.
  • Tourist arrivals have increased 30% y-o-y in 2019. Arrivals reached 11.34 million visitors in 2018, leading to a 50% y-o-y increase in revenues to 11.4 BN USD throughout the year compared to 7.6 BN USD in 2017.
  • The National Tunnel Authority (NTA) will receive 32 new air-conditioned metro cars worth from Hyundai Rotem for Cairo Metro Line 3. NTA will receive the metro cars in batches from June to the end of 2020.
  • China is looking to double its investments in Egypt to 15 BN USD from 7 BN USD currently. China aims to strengthen trade between the two countries amid efforts to turn Egypt into a logistics and exports hub for Chinese products.
  • The Information Technology Industry Development Agency (ITIDA) has signed an MoU with French software developer Valeo to open two global shared service centers in Egypt. This reflects the international companies' trust in the investment environment in Egypt and strengthens Egypt position as a leading country in providing IT and value-added services.
  • In Saudi Arabia, the Ministry of Labor and Social Development has signed an MoU with six government agencies to provide 32,500 jobs to young Saudis in the agricultural sector.
  • Seventeen UAE companies have confirmed their investment in India infrastructure sector in the last 12 months which amounted to 75 BN USD.
  • UAE expects its economy to grow 2.4% in 2019, driven by faster growth in the oil sector compared to 1.7% in 2018. The central bank's forecast is more cautious than the International Monetary Fund projection of 2.8% growth in 2019, supported by public spending as well as external factors.
  • In Kuwait, the number of expatriates working in the private sector has slowed from around 7% in 2016 to 5.7% in 2017, and to only 2% in 2018 and 2019, according to official statistics. Noting that the increase was about 33,000 in 2018 and only about 24,000 in 2019.
Political Events

Political Events

  • Saudi Arabia formally announced that tourist visas will be issued for the first time to visitors from 49 countries around the world. By 2030, tourism is expected to contribute up to 10% of Saudi Arabia GDP, compared to only 3% today.
  • The Egyptian Foreign Ministry on Friday rejected a report recently issued by the Office of the United Nations High Commissioner for Human Rights (OHCHR) regarding Egypt, stating that it was full of allegations based on false assumptions. Stressing that the UN should investigate its accuracy and not base their assessment on assumptions which only promote impressions contrary to the reality of things.
Stock Market

Stock Market

  • Dana Gas, a leading gas company based in Sharjah, has repurchased 3.632 million shares on 22 September 2019 as part of the buy-back program previously approved by UAE Securities and Commodities Authority. The average price of purchase transactions stood at 0.948 AED per share.
  • The Tokyo Stock Exchange (TSE) is planning to persuade Saudi Aramco to list shares in Japan in the international element of its forthcoming IPO. Noting that Saudi Aramco has chosen SMBC Nikko Securities for its IPO, the first Japanese financial firm to grab a role in the mega deal.
Companies Transactions

Companies Transactions

  • Zooba, an Egyptian street food chain opened its doors in New York's Nolita district on Friday. The branch, for which Zooba raised 4 MM USD, is the first outlet in the dining chain's "long-term aim of spreading across the US like bessara on baladi bread," as the company put it.
  • Cairo-based e-commerce startup MaxAB has raised 6.2 MM USD in one of the MENA region's largest-ever seed rounds. The round was co-led by Beco Capital, 4DX Ventures, and Endure Capital, while 500 Startups, Outlierz Ventures, and other local investors participated.
  • EgyptAir and Germany Lufthansa have expanded their codeshare agreement to provide more air miles to their customers in both Egypt and Europe. Codesharing agreements involve an airline allowing the purchase of flight seats on flights operated by the code-sharing partner, and vice-versa.
  • Fitch Ratings has affirmed the long-term issuer default rating for Credit Agricole Egypt (CAE) at 'AA+' with a 'stable outlook'. The agency has also affirmed its rating for the National Bank of Egypt (NBE) at 'B+' with a stable outlook.
  • Saudi Acwa Power is planning to submit in "the coming weeks" an offer to the government to set up water desalination plants in coastal cities. This would be Acwa's first desalination venture in Egypt noting that the company is planning to invest around 3 BN USD in the sector this year.
  • The Holding Company for Tourism and Hotels (HOTAC) is studying four tender offers from companies hoping to renovate and manage the Shepheard Hotel. The company will officially begin its evaluation in the presence of the investors, adding that the offers came from two Kuwaiti investors, an Iraqi and a Saudi.
  • Saudi Arabia Samba Financial Group has issued 1 BN USD international notes under its 5 BN EUR Medium Term Note Program. The maturity date of the issuance is in five years, generating a 2.86% annual yield. The notes are listed on the Irish Stock Exchange.
  • In UAE, RAK Petroleum has announced a consolidated net comprehensive income of 65.7 MM USD in H1-2019 compared to a net comprehensive income of 166.4 MM USD for the full year 2018. RAK Petroleum's main assets are holdings in DNO, also listed in Oslo, and privately held Foxtrot International.
  • Qatar Petroleum has sold three cargoes of deodorized field condensate (DFC) cargoes via a tender for loading in November at premiums of 70-80 cents per barrel. JX Nippon and Shell likely bought the cargoes.
  • Kuwait Petroleum Corp (KPC) offered its full-range naphtha for December 2019 to November 2020 loading at 16 dollar a ton premium to Middle East quotes on a free-on-board basis. That is 2.50 USD a ton, or 18.5%, higher that the contract for December 2018 to November 2019, which sold at 13.50 USD a ton.
Sports and Culture

Sports and Culture

  • An Emirati has made history as the first Arab to reach the International Space Station, after blasting off from Kazakhstan. The Russian spacecraft carrying Hazzaa al-Mansoori from UAE, who was accompanied by Russia's Oleg Skripochka and NASA astronaut Jessica Meir, landed Wednesday after a six-hour trip.
  • Fan votes brought Liverpool striker Mohamed Salah to the fourth place in the Best FIFA Men's Player award list, according to results released by FIFA. Lionel Messi came in first place, claiming 2019's award with 46 points.

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