expatriates voting “the number of egyptian expatriates€¦ · g x ˙˚˚ b ˙4 ˙˝ "v ....

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The Weekly

Week ending Sunday 18 May 2014

Issue : 20/2014

Expatriates Voting

• The Egyptian embassies abroad opened their doors for Egyptian voters to

cast their ballots in presidential elections which kicked-off on Thursday

15/05/2014. The vo"ng process for Egyp"ans overseas will con"nue un"l

Monday 19/05/2014 a%er extending it by 24 hours. Polls in Egypt will be

open 26-27 May.

• On a related note, the European Union canceled its observers mission for

Egypt's upcoming presidential vote, citing local "administrative"

obstacles that made it impossible for the bloc to send key equipment to

their team of monitors. Instead, EU would send a team that would have a

"more limited nature and scope of elections' observation, restricted only

to Cairo Governorate .

• For his part, Egypt's Presidential Elections Commission announced on

Sunday that the government released EU delegation’s equipment to help

in playing its role in Egypt.

“The number of Egyptian expatriates

casting their ballots so far in the May

presidential elections has exceeded the

number of expatriate voters in the

constitutional referendum in January”

The Supreme Election Committee Statement

Ahram Online 17 May 2014

"We still count on the full support of the

Egyptian authorities to facilitate the work

of the Election Assessment Team in the

fulfillment of its mission and provide the

necessary security"

EU Official


“Both parties affirmed their keenness for

the delegation to continue with its

mission”

Presidential Elections Commission

Statement


A Stable Outlook

• Standard & Poor's (S&P), the International rating agency, confirmed

Egypt’s long term and short-term foreign and local currency sovereign

credit ratings at 'B-/B' with a stable outlook. The agency expects official

donors to continue to provide Egypt with sufficient foreign currency

funds to manage short-term fiscal and external financing needs.

“In our forecast, Egypt’s net international

reserves will likely stabilise at more than

two months of current account payments

in 2014-2017”

“We could raise the ra,ngs in the next 12

months if political developments in Egypt

strengthen relations between the

1

The Weekly Week ending Sunday 18 May 2014

2

• S&P saw that the government’s finances are weak, expecting that the

net general government debt will surge at about 79 per cent of GDP in

2014 compared to 68 per cent in 2012 with a limited ability to raise

revenues or cut spending.

government and wider society and

improve external performance, including

net international reserves, thereby easing

external pressures”

S&P Statement

Daily News Egypt 17 May 2014

Banking Indicators

• According to a recently issued report tackled the performance of Egypt’s

banking indicators in February 2014*, monthly growth in loans recorded

the fastest rate since April 2013, increasing by 0.9 per cent on a monthly

basis and 6 per cent on a year on year basis.

MoM YoY

Total Loans 0.9% 6%

Corporate Loans 0.7% 4%

Retail Loans 1.5% 11%

• Deposits continued increasing as well on both monthly and yearly basis.

MoM YoY

Total Deposits 1.7% 17%

Corporate Deposits 1.5% 16%

Retail Deposits 1.8% 18%

• Loans to deposits ra"o kept its low level in January 2014, while

investments to assets ratio stayed high.

Dec-12 Dec-13 Jan-14

Loans to Deposits Ratio 47.4% 41.8% 41.7%

Investments / Assets 42.5% 43.6% 43.5%

* National Bank of Kuwait Capital MENA

“Banks operating in Egypt have shown

remarkable flexibility, partially attributed

to the drastic changes and reforms took

place in the banking sector through 2003

and 2004 that le. the banks with strong

capital and highly experienced managers”

The Banker Report

Al-Borsa Newspaper 18 May 2014

“FX Deposits grew by 3 per cent YoY in

February 2014 compared to 21 per cent

recorded in EGP Deposits”

“Loans to deposits ratio reflects muted

loan growth …. while investments to assets

ratio indicates a comparatively high yield

on government securities”

NBK Capital MENA 9 April 2014

EGX Perform Strong during 2013

• The annual report for the Egyp"an Stock Market in 2013 showed that

Egypt’s Stock Market achieved a growth rate of 24 per cent during 2013.

• The stock market slowed down during the first half of 2013 affected by

heightened turmoil and political polarization trends throughout the

country, where the main index EGX 30 retreated by 13 per cent, to regain

strong growth during the second half with 43 per cent, after the removal

of the Moslem Brotherhood from ruling. Other wider indices EGX 70 and

EGX 100 grew by 14 per cent and 15 per cent respec"vely.

“All sectors traded in the stock exchange

continued posting positive performance

during 2013 except for the non-banking

financial services sector, where the Food

and Beverages sector was the top

performer with 78 per cent followed by

Basic Resources and Banking sector (45 per

cent and 33 per cent ) respectively”

The EGX Annual Report 2013


3

Other Headlines

• The committee concerned with amending the parliamentary elections

law proposed a new draft election law to increase the number of

parliament members to 630 from 454 members where 600 members will

be elected while 30 will be appointed by the president. Only 10 members

of the 2012 parliament were appointed by the president out of the 454

members.

“The addi,onal seats [above the 450

person minimum] will better represent the

people, and replace some of the seats lost

with the dissolution of the Shura Council”

Ra’fat Fouda

Constitutional Expert


• The Interior Ministry announced that 40 terrorism cells were

dismantled as they were involved in attacks on army and police

personals, where some of them were in relation with Ansar Bayt Al

Maqdis and the Moslem Brotherhood Group.

“Over 800 were arrested in connec,on

with attacks on security forces and public

installa,ons since 1 April 2014”

Mohammed Ibrahim

Interior Minister

HC MENA Morning Bell 13 May 2014

• A number of revolutionary groups launched a campaign called (Against

You) calling for Egyptians to refrain from voting for the candidate Abd El-

Fattah Al-Sisi. The groups are the revolu"onary front, the 6th

of April

Youth Movement, Democratic Front, the Revolutionary Socialists,

Hakemohom and Moqawma Student Movement .

“Certain groups chose to back the

reformist politician (Hamdeen Sabahy) to

defend the revolution from counter

revolutionary forces”

Haitham Mohamadein

Revolutionary Socialists Leader


• A government-appointed committee tasked with assessing the

Brotherhood’s financial value, decided to freeze assets of 30 Muslim

Brotherhood figures, 12 associa"ons controlled by the Brotherhood and

several companies owned by Brotherhood figures including Sheikh Yusuf

Al-Qaradawi, Wagdi Ghoneim, and Al Jazeera broadcaster Ahmed

Mansour.

“The committee had found that the

administrations of the suspended NGOs

were wholly controlled by the Brotherhood

and used to finance illegal activities”

Ezzat Khamis

The Committee’s Head

Mada Masr 12 May 2014

• The Planning and Cooperation Minister, Ashraf Al-Araby stated that

Egypt’s economy is expected to grow at 1.5 per cent during the third

quarter of the current fiscal year 2013/14, where growth would be

driven by the two stimulus packages announced by the government.

“The economic growth rate for the full

2013/14 fiscal year was predicted to be

two per cent, while it could range between

3 and 3.5 per cent in the next year”

Ashraf Al-Araby

The Planning and Cooperation Minister


• The number of tourist arrivals declined to 755 thousand in March 2014

compared to 1.1 million a year earlier, a drop of 32.4 per cent , with

number of nights spent by tourists down by 43.6 per cent .

“Egypt is a safe travel destination for both

Arab and foreign visitors and will be even

safer after the country’s presidential and

parliamentary elections”

Hisham Zaazou

Minister of Tourism

Gulf Business 4 May 2014


4

• The Economic Ministerial Group, chaired by Prime Minister Ibrahim

Mahlab, issued a decision banning all governmental bodies from

importing products that have a local alternative. In the necessary cases,

the concerned ministers should give their approval first.

“This decision is a step to rationalize

government spending, but it will be

implemented temporary because

implementing the decision for a long time,

will result in competitiveness loss between

Egyptian and foreign industries”

Alaa El Sakty

Head of Badr city Investors Association Al youm 7 12 May 2014

• Egyptian Natural Gas Holding Company (EGAS) signed a deal with the

Norwegian company, Hoegh LNG, to rent one of the company’s floating

storage and regasifica"on units for 5 years to meet rising domes"c

demand for power. The unit will be docked at Ain Sokhna Port in Suez

Gulf with an estimated supply of 500 mcf/day and will start opera"ons

on 1 September 2014.

“This deal will help in providing the needs

of natural gas to the electricity sector and

will contribute in easing the increasing

loads and demands”

Gaber El Dosoky

Head of Egyptian Electricity Holding

Company

El Dostor 12 May 2014.

• Egypt’s Supreme Constitutional Court is expected to issue a ruling on 2

September 2014 about the cons"tu"onality of the newly issued

investment law that prevents appealing against state contracts by a third

party.

“Three separate appeals had been filed by

individual lawyers challenging the

constitutionality of the law”

Egypt Daily 19 May 2014


5

EGP Exchange Rates*

Egyptian Stock Market Indices

Macroeconomic Indicators FY 2011/2012*** FY 2012/2013*** 2013 (July-December)

Real GDP Growth Rates 2.2% 2.1% 1.2%

Budget Deficit (EGP Billion) 166.7 239.9 89.4

Budget Deficit as % of GDP 10.8% 13.8% 4.4%

Balance of Payments (USD Billion) -0.1 0.24 1.99

Gross Domestic Debt (EGP Billion) 1,155.3 1,446.6 1,651. 8

Gross Domestic Debt as % of GDP 74.9% 83.4% 80.6%

Average Headline Inflation 8.7% 6.9% 10.9%

Average Unemployment Rate 12.4% 13% 13.4%

*Average exchange rates on the last working day of the week in Egypt.

**Morgan Stanley Capital International Emerging Markets Index.

***Fiscal year ending 30 June.

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7.00 7.03 7.02 7.006.91 6.90 6.90 6.95 6.98 6.98 6.98 7.02 7.13

9.27 9.33 9.33 9.37 9.41 9.51 9.47 9.51 9.51 9.54 9.61 9.70 9.76

10.81 10.93 10.82 10.95 11.19 11.18 11.39 11.38 11.52 11.61 11.59 11.81 11.94

5.005.506.006.507.007.508.008.509.009.50

10.0010.5011.0011.5012.00

May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

EGP per USD EGP per Euro EGP per Pound Sterling

35

40

45

50

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

MS

CI

EM

EG

X

EGX 30 EGX 70(Rel.) EGX 100(Rel.) MSCI EM**

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