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Monday, 05 Aug 2019

The Central Bank of Egypt (CBE) launched the Cairo Overnight Inter-bank Average (CONIA)


Insights MENA

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Economic Outlook

Economic Outlook

  • The Central Bank of Egypt (CBE) launched the Cairo Overnight Inter-bank Average (CONIA), an interest rate benchmark that is effectively no-risk because of their very short tenors. The benchmark is meant to support the development of a more efficient domestic money market.
  • Egypt is planning to issue between 250-500 MM USD of Asian bonds in 2019/2020. The Finance Ministry was originally planning to issue between 500 MM USD and 1 BN USD of Asian bonds in order to reduce debt to 80% of GDP by 2022.
  • The Minister of Supply Aly Meselhy stated that Egypt plans to establish a commodity stock market by the end of 2019 and announced that this year will see the inauguration of a trade and logistics project in Gharbiya.
  • Saudi Arabia may cut prices for most of the crude grades it sells to Asia for a second straight month in September after Middle East benchmark prices weakened. The official selling price (OSP) for flagship Arab Light crude could drop by at least 50 cents a barrel, falling below a premium of 2 dollar a barrel for the first time in four months.
  • Saudi Arabia has launched a series of advanced smart applications to serve pilgrims, as part of its efforts to provide them with best services and facilitate their travel during the Hajj season.
  • Abu Dhabi hotel guest numbers have reached a record 1.2 million tourist in Q2-2019, a 6.8% increase compared to Q2-2018. The total room revenues also posted an 8.2% y-o-y increase in Q2-2019, while the total hotel revenues were 3.7% higher.
  • Dubai International Financial Centre (DIFC) welcomed more than 250 new companies in H1-2019. This has created over 660 jobs, boosted the Center's combined workforce to more than 24,000 individuals, and has resulted in the occupancy of 99% of DIFC-owned buildings.
  • Dubai came in fifth in the International Shipping Center Development Index (ISCDI) for the second consecutive year. Singapore topped the list for 2019, with Hong Kong second and London third and Shanghai fourth.
  • Total reserves at the Central Bank of Kuwait (CBK) increased by 25.91% y-o-y in 2018/2019 reaching 548.24 MM KWD (1.81 BN USD) compared to 435.43 MM KWD (1.43 BN USD) in 2017/2018.
Political Events

Political Events

  • The US Federal Reserve cut interest rates by 25 basis points, marking the first rate cut since 2008. Chairman Jerome Powell suggested that at least one more cut is likely to happen calling it a mid-cycle adjustment, noting that the beginning of a lengthy cutting cycle is not their perspective now, or outlook.
  • President Abdel Fattah El Sisi, Foreign Minister Sameh Shoukry, and intelligence chief Abbas Kamel met on last Thursday with White House advisor Jared Kushner to discuss the Trump administration's Israel-Palestine peace plan. El Sisi stated that Egypt supports reaching a peaceful solution that would see the establishment of a Palestinian state with East Jerusalem as its capital.
Stock Market

Stock Market

  • EFG Hermes topped the EGX's brokerage league table for July with a market share of 33.5%. CI Capital came in second with an 8.4% market share, followed by Beltone Financial (5.0%), Arqaam Securities (4.6%), and Mubasher Securities and Pharos Securities which each had a 3.4% market share.
  • Gulf stocks declined on Thursday after the U.S. Federal Reserve cut interest rates by 25 basis points. Central banks in Saudi Arabia, UAE and Qatar followed the move, cutting their rates by the same margin. Their currencies are pegged to the U.S. dollar and they follow the Fed on interest rate moves.
Companies Transactions

Companies Transactions

  • Prime Holding has acquired close to 10% of Al Tawfeek Leasing (AT Lease) in a transaction worth nearly 29 MM EGP (1.7 MM USD). Prime is planning to take an "activist shareholder" approach to AT Lease by presenting a business plan to the company's board to improve its share price.
  • The Financial Regulatory Authority (FRA) has approved Italy-based asset manager Azimut Group's acquisition of 100% of Rasmala Egypt Asset Management (REAM) from its parent company Rasmala Group.
  • Kuwait headquartered food delivery company, Carriage, has shut down operations in Egypt five months after launching. Germany's Delivery Hero acquired the company in 2017, but now reportedly wants to put all its resources in Egypt into Otlob because of the increasing competition from UberEats, Glovo, and others.
  • Minority shareholders in the Egyptian International Tourism Projects Company (Americana Egypt) are not happy with a buyout offer from main shareholder Adeptio AD Investments and will continue their fight with the company until it makes a suitable offer.
  • Al Jazira Takaful Taawuni Company has appointed FALCOM Financial Services as a financial adviser instead of Al Jazira Capital. The new adviser will manage the potential merger with Solidarity Saudi Takaful Company.
  • Saudi Arabia Samba Financial Group reported a 24.7% y-o-y profit decline in Q2-2019, recording 935 MM SAR (249 MM USD). Noting that Samba profit declined by 12.2% in Q2-2019 compared to 1.07 BN SAR (285 MM USD) in Q1-2019.
  • Abu Dhabi Financial Group (ADFG) has completed its merger with Shuaa Capital and increased its authorized capital to 2.54 BN AED (692 MM USD). The capital increase follows admission of 1.47 billion new shares on the Dubai Financial Market in favour of ADFG's parent company, Abu Dhabi Capital Management LLC.
  • Arada, a Sharjah-based real estate developer, has announced a partnership with Dubai Islamic Bank (DIB) to streamline the home ownership process for buyers of Arada properties.
  • Abu Dhabi Ports and Jiangsu Overseas Cooperation Investment Co (Jocic) have signed a five-year agreement with Industrial and Commercial Bank of China (ICBC) to make it easier and quicker for Chinese companies to do business at Khalifa Industrial Zone (Kizad), Abu Dhabi.
  • Industries Qatar (IQ), one of the region's industrial giants, announced its financial results for 2018/019 with net profit of 1.5 BN QAR (411.9 MM USD) and earnings per share of 0.24 QAR, compared to net profit of 2.5 BN QAR (686.6 MM USD) and earnings per share of 0.41 QAR for 2017/2018.
Sports and Culture

Sports and Culture

  • During the 6th Liwa Ajman Dates and Honey Festival 2019, UAE Space Agency highlighted the possibility of cultivating palm trees on Mars. The agency is planning to send palm tree seeds to the International Space Agency, which will perform experiments and send the seeds to Mars for cultivation.
  • Everton Football Club, an English professional football club based in Walton, Liverpool, have signed 19-year-old striker Moise Kean from Italian champions Juventus on a five-year deal. The transfer fee for the Italy international is expected to be around 43.75 MM USD.

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