Home > Insights > The Central Bank of Egypt signed an agreement ”new repurchase transaction” of 3.8 BN USD with a consortium of international banks including Citigroup.
Monday, 15 Oct 2018

The Central Bank of Egypt signed an agreement ”new repurchase transaction” of 3.8 BN USD with a consortium of international banks including Citigroup.


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Economic Outlook

Economic Outlook

  • The Central Bank of Egypt signed an agreement ''new repurchase transaction'' of 3.8 BN USD with a consortium of international banks including Citigroup, Credit Suisse AG, Deutsche Bank AG, First Abu Dhabi Bank and HSBC. The transaction aims to achieve CBE objective of enhancing its liability management by extending the duration of its debt structure.
  • Egypt net foreign reserves increased to 44.45 BN USD in September 2018, compared to 44.42 BN USD in August 2018. Foreign reserves have been climbing since Egypt agreed on a 12 BN USD three-year loan program with the International Monetary Fund (IMF) in November 2016, part of efforts to attract foreign investors and revive the economy.
  • Egypt has the potential to generate up to 53% of its electricity from renewable sources by 2030, according to a new report by the International Renewable Energy Agency (IRENA). The Renewable Energy Outlook in Egypt found that pursuing higher shares of renewable energy could reduce the country's energy bill by up to 900 MM USD annually in 2030.
  • UAE acquired about 72% of Saudi Arabia trade exchange with the GCC amounting to 5.26 BN SAR (1.4 BN USD) in July 2018. Trade exchange between the two GCC nations registered a 2.42 BN SAR surplus for the UAE after Saudi Arabia exports stood at 1.42 BN SAR, against 3.84 BN SAR in imports.
  • An agreement has been signed between Saudi Arabia and Indonesia that will allow Indonesian domestic workers to work again in Saudi Arabia. The two ministries also launched an electronic system for the employment of Indonesian laborers designed to assist and speed up the process of recruiting domestic workers, while protecting the contractual rights of all parties.
  • Sudan plans to raise up to 3 BN SDG (63 MM USD) to buy gold by selling certificates to the public. The certificates would be sold by a company affiliated with the central bank and is expected to have an annual yield of up to 30%.
  • Real estate market recorded 39,802 real estate transactions worth 162 BN AED in the first nine months of 2018 compared to 52,170 worth 204 BN AED in the same period last year. The decline in the value of real estate transactions is primarily on account of the decline in off-plan sales in 2018.
  • In UAE, the interest rates charged by the Emirates Inter-Bank Offered Rate (EIBOR) hit new highs of 30.7-48.6% across all terms since the beginning of 2018. The interest hike is attributed to the US Federal Reserve decision to raise interest rates more than one time since the beginning of this year which was recently in September.
  • Qatar is set to issue tender for the construction of a large-scale solar Photovoltaic (PVpower plant in an area west of capital Doha by the end of 2018. The 700 MW project is being structured as build-own-operate-transfer (Boot) venture for 25 years where the ownership will be transferred to Qatar General Electricity and Water Corporation (Kahramaa) after the end of the term.
  • Kuwait completed 37% construction of 7th Ring Road project. It aims to develop and upgrade the road network country wide, which is witnessing an unprecedented move in quality due to the efforts of all the workers who are doing their best to complete the road system and other infrastructure upgrades.
Political Events

Political Events

  • President Abdel Fattah El-Sisi received President of the Russian Republic of Tatarstan Rustam MinniKhanov stressing Egypt interest in strengthening the long-term cooperation with Russia, especially in the light of the development witnessed by Egyptian-Russian relations in recent years in various fields in general. The meeting discussed a number of issues of bilateral cooperation, the most important of which are the means of increasing trade exchange between the two sides.
  • Saudi Arabia Crown Prince Mohammed bin Salman has rejected US President Donald Trump comment that Saudi Arabia would not last more than two weeks without US help, arguing that the Gulf country, which came into existence much before America, can survive 2,000 years without facing any danger. However, Prince Salman played down any apparent rift with the US leader, saying relations between the two allies remained strong.
  • Through Shahama Municipal Center, Abu Dhabi City Municipality, had launched a restriction on boats and motorboats abandoned at the Fishermen's Port in Sadr City. The campaign reaffirms the keenness of the Municipality and its partners to protect the marine environment and preserve the modern appearance of Abu Dhabi City. Since the start of the campaign, the Municipality pulled away 17 boats, and boat owners moved 50 boats, showing their commitment to make the campaign a success.
  • Kuwait government highlighted the importance of the private sector participation in solving the unemployment crisis in parallel with the passing of laws that will achieve job stability for Kuwaiti employees of the private sector, ensure career growth and change the government system of employment.
  • In Kuwait, a delegation from the Ministry of Interior praised the security and the video surveillance systems at Kuwait Finance House (KFH). The systems are advanced and fully complied with the requirements and mechanism of the Ministry of Interior to regulate the process of linking the facilities subject to the provisions of Law No. 61 of 2015 and the Central Operations Room of the Ministry.
Stock Market

Stock Market

  • .QSI banking sector decreased led by Qatar National Bank (QNB). However, the real estate sector increased led by Barwa Real Estate Development and Ezdan Holding Group.
  • .ADI the banking sector decreased led by First Abu Dhabi Bank (FAB) and Abu Dhabi Commercial Bank (ADCB) as well as the real estate sector decreased led by Aldar Properties.
  • .DFMGI real estate sector decreased led by DAMAC Properties, Arabtec Holding and Emaar Properties. In addition, investments and financial services decreased led Dubai Investments as well as the banking sector decreased led by Emirates NBD and Dubai Islamic Bank (DIB).
Companies Transactions

Companies Transactions

  • Silicon Industries Corporation (SICO), Egypt first smartphone maker, is looking to enter the African market by the end of 2018 or early 2019 as it seeks to boost exports since it is a promising market and there is much less competition than in the Gulf. It aims to start selling phones in Kenya, Morocco, the Democratic Republic of Congo, South Africa, Nigeria, Mozambique and Ghana. It is expected to sell smartphones in a price range of 50-60 USD to African customers outside Egypt.
  • The Indian retail company Lulu Hypermarket is looking to pump 15 BN EGP investments into the Egyptian market within two years. The Abu Dhabi-based hypermarket chain has signed an agreement with the Egyptian Internal Trade Development Authority (ITDA) to build five outlets over 100,000 meters of land plots in Cairo with 10 BN EGP in investments. Lulu Hypermarket will also establish two logistic zones in Alexandria and Upper Egypt at a value of 5 BN EGP.
  • Egyptian investment bank EFG Hermes hopes to close a deal to acquire a Nigerian broker, Lagos-based Primera Africa, next month and is hoping to win IPO mandates in Saudi Arabia as it seeks new growth markets. Saudi Arabia could be a major growth market for EFG Hermes, which is the biggest investment bank in the Middle East but derives much of its business there from Egypt and UAE. The deal is expected to close in November subject to regulatory approval and certain conditions.
  • The Saudi Telecom Company (STC) will launch its in-flight Internet services during its participation in the GITEX Technology Week in Dubai. The service will be provided through ground towers for the first time in Saudi Arabia and will enable the companies to safely hold live in-flight video conferences, as well as communicating with those who are on ground with high speed and security.
  • Dubai-based Binghatti Developers, one of the leading real estate development companies in the UAE, signed its first sales agreement amounted 200 MM AED with Izdihar Real Estate Fund which is managed by Bank Muscat. The agreement comprises the acquisition of Binghatti Vista and Binghatti Sapphires, two of the best residential properties in Dubai Silicon Oasis.
  • In Dubai, Huawei, the leading global information and communications technology (ICT) solutions provider, has launched a series of all-new AI offering with the capabilities to drive industry development and intelligence and accelerate digital transformation. Huawei also released its AI Developer Enablement Program, which will help build an affordable, effective, reliable, and inclusive AI ecosystem.
  • Qatar National Bank (QNB) net profit increased 3.5% in Q3-2018, due to a rise in net interest income helped offset the squeeze from a weaker Turkish lira. QNB, which is 50% owned by sovereign wealth fund Qatar Investment Authority, in 2016 completed the acquisition of Turkey Finansbank. In 2018 around 15% of QNB assets and 14% of its loans relate to Turkey.
  • Qatar Airways may consider a fuel surcharge on tickets to help it return to profit among a regional dispute and rising oil prices. Qatar Airways reported in September 2018 a 252 MM QAR (69 MM USD) loss for the financial year ended March 31, citing a political dispute that has seen it banned from four Arab countries, and has suggested it could make a loss again.
  • National Bank of Kuwait (NBK) posted a net profit of 86.5 MM KWD (285.1 MM USD) in the Q3-2018, up from 73.7 MM KWD in Q3-2017. It posted a 17.5% rise in profit in Q3-2018, 14.3% rise in the first nine months of 2018, helped by higher interest rates and higher net income from Islamic financing. Big lenders such as NBK have benefited from increased spending on government-backed projects, supported by higher oil prices. It is expected that the corporate borrowing appetite will continue to improve in Kuwait as oil prices trade near a four-year high.
Sports and Culture

Sports and Culture

  • In Saudi Arabia, the top seeded tennis players Rafael Nadal and Novak Djokovic are set to make their first appearance in Saudi Arabia when they participate in the King Salman Tennis Championship at King Abdullah Sports City in Jeddah on 22nd December in 2018. Tickets will be available on Sauditicket.com.
  • Walmart Inc announced that its partnership with U.S. movie studio Metro Goldwyn Mayer (MGM) to create content for its Vudu video-on-demand service, which the retailer bought eight years ago. Under this partnership, MGM will create exclusive content based on their extensive library of iconic IP (intellectual property), and that content will premiere exclusively on the Vudu platform.The focus will be on family-friendly content that Walmart customers prefer.
  • Emirates Authority for Standardization and Metrology (ESMA) will be presenting innovative and smart initiatives aimed at enhancing safety and security concepts in the UAE and supporting the national economy. The innovative projects based on artificial intelligence techniques, Block Chin, and in line with the Authority strategy aimed at raising the quality of life indicators in the UAE for citizens, residents and visitors.

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