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Monday, 13 Jul 2020

Mars Wrigley to increase investments in Egypt over the next two years


Insights MENA

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Economic Outlook

Economic Outlook

  • Egypt annual urban inflation accelerated to 6% in June, edging up from a six-month low of 4.7% in May, according to the Central Bank of Egypt. Monthly figures remained subdued, with June’s figure coming in at 0.1%, compared to -0.8% in June 2019.
  • The New Administrative Capital Company for Urban Development (NACCUD) has cut the required down-payment for real estate developers on land in the new administrative capital to 10%, from an initial 20%. NACCUD will also be extending loan repayment schemes by one year as part of its incentive program.
  • Egypt imports of medicine, and surgical instruments & devices, have decreased 3% during the first four months of 2020 to record 802.7 MM USD compared to 1 BN USD during the same period last year attributing this decline to the repercussions of the novel Coronavirus.
  • The 11 BN AED project that will facilitate travel for commuters visiting the exhibition site of the World Expo 2020, was inaugurated on Wednesday by Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai. The route has seven stations including one interchange station with the Red Line, one Iconic Station at the site of Expo, three elevated stations and two underground stations. It is expected to serve 270,000 passengers.
  • Non-oil private sector businesses in Dubai increased in June 2020 as the region relaxed restrictions to stop the spread of Covid-19, signaling an end to the recent downturn across the emirate's economy. The seasonally adjusted IHS Markit Purchasing Managers' Index (PMI) reading for Dubai increased from 0 in May to the neutral 50.0 mark in June, to signal no change in overall business conditions at the end of Q2-2020.
  • Saudi Arabia initiatives and incentives in dealing with the challenges of the coronavirus pandemic have resulted in the creation of 2,516 jobs for Saudis, and investments worth 2 BN SAR (586.5 MM USD) in June through 118 new licenses.
  • Saudi Arabia spent more than 214 BN SAR (57 BN USD) on 142 initiatives to tackle the impact of the coronavirus in the Kingdom. Initial measures undertaken by the government to provide a buffer were followed up by a royal decree this month to extend the support to the public and private sectors and to investors.
  • Kuwait will disburse around 5 MM KWD (780 MM USD) to support Kuwaiti citizens employed in the private sector as part of efforts to soften the impact of the coronavirus pandemic. The Public Authority for Manpower will transfer sums to Kuwaiti business owners and private sector employees for six months effective from last month.
  • The total assets of banks operating in Kuwait decreased in April 2020, for the first time in six months, specifically since October 2019. Assets decreased by 48% in April 2020 to 72.44 BN KWD (235.76 BN USD) compared to 72.77 BN KWD (236.83 BN USD) in March 2020, according to the Central Bank of Kuwait (CBK).
Political Events

Political Events

[caption id="attachment_4741" align="aligncenter" width="1200"] A general view of an Emirates Airlines' Boeing 777-300ER aircraft being modified to provide additional cargo capacity with seats removed from the economy class cabin, following the outbreak of the coronavirus disease (COVID-19), in Dubai, United Arab Emirates in this undated picture obtained June 25, 2020. Emirates Airlines/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY.[/caption]
  • UAE is embracing the new travel normal, with the country's airlines flying to a wide range of destinations across the world. Dubai officially reopened to tourists on Tuesday, with several flying to the city on day one. Emirates, Etihad and flydubai have updated their flights network, with destinations ranging from cities in Europe and North America to Asia and Africa.
  • Bahrain and the US have reached an agreement to extend the validity of tourist visas granted to citizens of both countries from five to ten years, the Ministry of Foreign Affairs and the US Embassy have announced. This agreement is a reflection of the long and rich history of mutual cooperation, partnership, and friendship between Bahrain and the US.
Stock Market

Stock Market

  • The Egyptian Exchange (EGX) closed Thursday’s trading session on a negative note, pressured by foreign selloffs. The main EGX30 index fell by 54%, ending the session at 10,957 points. Meanwhile, the small- and mid-cap EGX70 EWI dropped by 4.2% to 1,477 points, while the broader EGX100 EWI slid by 3.73% to 2,289 points.
  • The main index of the Abu Dhabi Securities Exchange (ADX) increased by 48% or 20.70 points to stand at 4,316.18 points by the end of Sunday's trading session, reversing its downward performance on Thursday, 9 July. Turnover amounted to 55.35 MM AED (15.06 MM USD) after 30.97 million shares had been exchanged through 812 transactions.

Note: All values are calculated by last Thursday.

Companies Transactions

Companies Transactions

  • Mars Wrigley is planning to increase its investments in Egypt over the next two years with around 200 MM USD. Mars is also planning to expand its production lines at its factory in Sixth of October City. Meanwhile, Edita has put investment plans on hold until the pandemic subsides as it was planning to invest 750 MM USD in its operations in Egypt and Morocco but plans have been largely frozen due to declining sales and falling exports.
  • Minority shareholders in Americana Egypt have approved Adeptio’s offer price of 32 EGP per share under a proposed mandatory tender offer (MTO). This came after the Financial Regulatory Authority (FRA) approved the valuation methodology used by Adeptio’s financial advisor Ernst & Young but forced the Emirati outfit to up its offer price to account for the full value of the company.
  • Egyptian e-payments platform Fatora has raised 1 MM USD in its first funding round led by Disruptech and with participation from EFG Hermes and Cairo Angels. Fatora CEO Hossam Ali stated that the company is well positioned to provide transparent pricing and delivery data services for the wholesalers and retailers it connects and is seeking to shore up its tech infrastructure.
  • S&P Global Ratings has downgraded the credit rating of three Dubai real estate companies which are Emaar Properties, Emaar Malls and DIFC Investments due to increased economic pressures from the spread of Covid-19. UAE largest property firm, Emaar Properties, was downgraded to BB+ from BBB- with a negative outlook.
  • The Saudi British Bank (SABB) announced the first offering of Tier II SAR denominated Sukuk for private placement under its newly established local Sukuk program. Moreover, the issuance started on 6 July and will end on 28 July and is targeting experienced investors residing in Saudi Arabia. The underwriter of the issuance is HSBC Saudi Arabia.
  • Allianz Saudi Fransi Cooperative Insurance Company (Allianz SF) announced that a total of 5 million shares of the newly offered shares have been subscribed at a value of 375.04 MM SAR (99.98 MM USD). The remaining shares, totaling 2.495 million shares, will be reoffered to a number of institutional investors, where they will submit purchase offers.
  • Orient Insurance Co will delay launching its business in Saudi Arabia to the middle of 2022 due to the coronavirus economic impact and subsequent travel restrictions. The company was expected to start its branch operation in Saudi Arabia during 2020 after obtaining the necessary remaining official approvals.
  • Capital Intelligence (CI) has affirmed the long-term and short-term credit ratings of Al Imtiaz Investment Group at 'BBB' and 'A3', respectively, and lowered its outlook from Positive to Stable. The 'Stable' outlook shows that the performance and prospects of the company's operating subsidiaries and associates have been affected by the Coronavirus pandemic.
Sports and Culture

Sports and Culture

  • Almost 100 footballers and staff have tested positive for Covid-19 as Saudi football clubs resume training for the Prince Mohammed bin Salman Football League competitions. The Saudi Arabian Football Federation stated that 1,351 tests were carried out between June 21 and July 8, resulting in 50 players and 47 administrative staff testing positive.
  • World Team Tennis (WTT) started its three-week regular season on next Sunday, as the world of professional tennis moves forward in the United States during the Coronavirus outbreak.

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