EGYPT: Business in Brief (EBIB)
monthly market news bulletin
Prepared by:
Mrs. Mehrechane Nayel,
Senior Economic and Trade Advisor
Royal Netherlands Embassy in Cairo
Economic Affairs & Development Cooperation Department
tel: +20-2-7368752, fax: +20-2-735 8736, website: www.hollandemb.org.eg
January 2006
EGYPT: Business in Brief (EBIB)
| monthly market news bulletin
Contents
1
Agriculture
2
Banking & Finance
3
Construction
4
Economy
5
Energy & Electricity
6
European Union
7
General
8
Insurance
9
Investment Promotion
10
New Cabinet
11
Oil & Gas
12
Parliamentary Elections
13
Pharmaceutical & Health
14
Privatization
15
Stock Exchange
16
Telecommunications
17
Textiles & Garments
18
Tourism
19
Transport
20
Water & Environment
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EGYPT: Business in Brief (EBIB)
| monthly market news bulletin
AGRICULTURE
WFP, Netherlands support Egypt in food subsidy
MIDDLE EAST NEWS, 13/12/05
The United Nations World Food Programme (WFP) has signed a cooperation
agreement with the Netherlands to support strengthening Egypt’s government
capacity and efforts for social reform, particularly in the food subsidy programme.
Under the agreement, the Netherlands will provide a grant of €500.000 over the
coming two years to enhance capacity within the government ministries to collect
data on vulnerability and analyze it so that it can be used in social policy reform.
BANKING & FINANCE
ING Starts Restructuring National Bank of Egypt (NBE)
AL-ALAM AL-YOUM, 21/12/05
The Vice Chairman of National Bank of Egypt (NBE) stated that ING was starting
to restructure the bank, particularly concerning risk management, human resources
and information technology. Restructuring is to be done in coordination with the
Central Bank of Egypt and in cooperation with the European Union.
CBE approves $49.5 million loan to support NBE acquisition of Tigariyoun
NOOZZ, 20/12/05
The Central Bank of Egypt/CBE has approved a LE 288 million loan ($49.5
million) to the National Bank of Egypt/NBE to support the state-owned bank’s
acquisition of the Bank of Commerce & Development/Tigariyoun. The amount is
intended to balance the provisions allocated to cover credit risks in Tigariyoun’s
loan portfolio.
German Bank finances €1 billion projects
AL-AHRAM WEEKLY, 08/12/05
The German Reconstruction Bank (KfW) agreed to finance a number of new
projects in Egypt within the Egyptian – German financial cooperation programme
of 2006.
CONSTRUCTION
EFS-Project develops two year strategy for Egyptian Mortgage Industry
NOOZZ, 18/12/05
Official at the USAID-sponsored Egypt Financial Services/EFS scheme have
developed the strategic plan for the Egyptian General Authority for Real Estate
Finance for two years from 2006-2008.
Egyptian European Real Estate Investment Company starts operation in
Egypt
NOOZZ, 14/12/05
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EGYPT: Business in Brief (EBIB)
| monthly market news bulletin
The new Egyptian European Company for Real Estate Investment has
recently been launched in Cairo with a capital of LE 55 million to carry out
construction of residential and tourism projects.
ECONOMY
Egypt’s economy realizes a genuine growth
MIDDLE EAST NEWS, 13/12/05
Morgan Stanley has recently issued a new report on the Egyptian economy in
which it mentioned that there is a real growth in the Gross Domestic Product
(GDP), referring to the government’s decision to liberate the exchange rate as the
main reason for the economy’s growth. The inflation rate dropped to 4.3% in July
2005, a matter which encourages investment in Egypt.
Third quarter growth
AL-AHRAM WEEKLY, 08-14/12/05
Government figures reveal higher growth rates and expectations of improved
economic performance. Overall growth during the first quarter of FY 2005/06
increased to 5.3% from 4.8% and inflation fell to 3.1% compared to 13.7% for the
same period last year. The Minister of Planning attributed the improved growth
mainly to 13% increase in oil and gas exports, but the positive indicators extended
beyond the sector, with the construction industry registering growth of 13.5%
compared to 3.4% during the same period last year.
ENERGY & ELECTRICITY
Siemens to construct power transmission plat in Sidi Krir
AL-AHRAM, 18/12/05
Siemens AG signed a new contract to construct a power transmission plant in Sidi
Krir in order to connect the Alexandria and West Delta power grid with Greater
Cairo. The $23 million contract implies construction of 500/220 kv plant with a
capacity of one MW.
Egypt saves $1.7 billion from Energy in first half of FY 2005/06
NOOZZ, 16/12/05
Egypt has achieved a surplus of $1.7 billion from re-pricing of natural gas over the
first six months of FY 2005-6 compared with a surplus of $1.6 billion a year ago
with a monthly average of $280 million.
EdF completes power plants sales
MIDDLE EAST ECONOMIC DIGEST, 09-15/12/05
Electricité de France (EdF) has completed the sale of its 100% stakes in the Port
Said and Gulf of Suez independent power projects (IPPs) to Malaysia’s Powertek
Berhad, a wholly owned subsidiary of Tanjong Energy Holdings. Under the $307
million transaction, which is expected to become effective in early 2006, Powertek
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will take full ownership of the two gas-fired facilities with capacity of 680 MW
each.
EUROPEAN UNION
Egypt & EU Activate Twinship Agreement
SIS, 14/12/05
Egyptian Prime Minister witnessed the signing of a €25 million deal to finance the
twinship program between Egypt and the European Union. The program aims at
upgrading state institutions and equipping them with up-to-date technology. The
program will upgrade the Naval Transport Authority, the General Authority for
Investment & Free Zones (GAFI) and the National Postal Authority.
EU supports Trade Enhancement Programme with LE 460 million
NOOZZ, 12/12/05
The EC Delegation to Egypt has allocated LE 460 million to finance Trade
Enhancement Programme (TEP) with the Egyptian Ministry of Foreign Trade &
Industry over the coming four years. The EU-funded TEP is mainly targeted at the
promotion of the Egyptian Trade Representation Department, supporting it with
about €20 million to promote its efficiency.
GENERAL
Suez Canal revenues reach $294 million in November
AL-AHRAM, 19/12/05
Suez Canal revenues hit $294.2 million in November, surging $24.1 million from
the same period of previous year.
Exports up to LE 21.7 billion in 5 months
AL-AHRAM, 04/12/05
Egypt’s exports increased by 14.4% during the period from January to May this
year, as they rose to LE 21.71 billion against LE 18.673 billion during the same
period of last year.
Trade Balance deficit up to LE 39 billion in a year
AL-WAFD, 01/12/05
A report by the Cabinet’s Information and Decision Support Center has affirmed
that the trade balance deficit went up by LE 39 billion last August, against LE 18
billion in August 2004. The report said the value of imports jumped to LE 75
billion against LE 49 billion during August 2005 and 2004 respectively. Exports,
however, increased by LE 4 billion only.
INSURANCE
State-owned insurers prepare for reorganization
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EGYPT: Business in Brief (EBIB)
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NOOZZ, 19/12/05
The Egyptian insurance industry is set to pass through a period of sweeping
restructuring in a move intended to prepare state-owned insurers for privatization.
NEW CABINET
Egypt’s PM Nazif asked to form new cabinet
AL-AHRAM, 21/12/05
Egyptian President has asked Prime Minister Ahmed Nazif to form a new cabinet.
Senior officials expect few changes in important economic ministries. A reshuffle
is a routine procedure after parliamentary elections, which ended on December 7.
OIL & GAS
Egyptian Liquefied Gas Exports Booming
SIS, 07/12/05
Egyptian exports of liquefied gas have greatly increased due to efforts made
by the three national liquefaction factories and the soaring global prices,
according to the head of the Egyptian Holding Co. of Natural Gas (EGAS).
EGAS has hammered out 11 agreements with international gas companies
since its establishment. Three more agreements would come into effect
soon with investments estimated at $595 million. Natural gas exploration
this year led to 12 new discoveries in the Mediterranean, Western Desert
and Delta regions.
PARLIAMENTARY ELECTIONS
Egypt Parliament sworn in
OXFORD BUSINESS NEWS, 21/12/05
In the aftermath of Egypt's sometimes-violent parliamentary elections, the new
deputies are now testing the political waters. The ruling National Democratic
Party (NDP) won 145 seats or 33.5% out of the 432 it ran for. The party then
swelled its ranks to 311 seats, or 71.9% of parliament, after admitting 166 of the
winning independent candidates to the party following the election. Meanwhile,
the banned Muslim Brotherhood won 55% of the seats it ran for, raising its share
of parliament from the 15 deputies it had after the 2000 election to 88, or 20% of
the assembly. Nine deputies were also elected from the secular Wafd, Tagammu
and al-Ghad parties and the results in six constituencies remain undecided,
pending court rulings. Many have seen the results as the beginning of a new
political period in Egypt, with the assembly likely to be the forum for much more
heated debate.
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EGYPT: Business in Brief (EBIB)
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PHARMACEUTICAL & HEALTH
Egypt – China cooperate in manufacturing medical herbs
MIDDLE EAST NEWS, 13/12/05
Egypt and China are to promote cooperation in the domain of medical herbs and
plants, exchange of expertise and conclusion of agreements in the field of drug
manufacturing. An agreement to this effect has been reached during a meeting
between Egypt’s Minister of Health & Population and Chief of the Supreme
Authority of Traditional Medicine in China.
PRIVATIZATION
Egypt to offer Bank of Alexandria for sale in January
AL-AHRAM, 22/12/05
The Egyptian government is committed to offering Bank of Alexandria, the
smallest of the state-owned banks, for sale in January.
Privatization proceeds hit LE 16.5 billion in 18 months
AL-AHRAM, 21/12/05
Proceeds from Egypt’s state asset management scheme (privatization) hit LE 16.5
billion during fiscal year 2004/05, ending on 30 June 2005, according to the
Egyptian Ministry of Investment. The figure includes LE 609 million of
uncollected funds.
Government to offer MIDOR to Stock Market Investors
AL-AHRAM, 14/12/05
The Egyptian government plans to offer more stakes in state-owned companies
through the stock market during the first quarter of 2006. The government plans
to offer part of the Middle East Oil Refinery (MIDOR) company in the stock
market soon. This will increase the number of petroleum companies trading in the
Cairo & Alexandria Stock Exchanges to three companies.
Telecom Egypt IPO kicks off
MIDDLE EAST ECONOMIC DIGEST, 02-08/12/05
The initial public offering (IPO) of shares in state-owned fixed-line monopoly
Telecom Egypt (TE) was launched on 29 November, offering investors the
opportunity to subscribe to 341 million shares over a two-week period. The
country’s largest ever IPO is being split into two equal tranches – one for public
and one for private investors – making up a total of 20% of TE’s share capital.
STOCK EXCHANGE
ABN AMRO cooperation with CASE
EGYPT INVEST NEWSLETTER, DECEMBER 05
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EGYPT: Business in Brief (EBIB)
| monthly market news bulletin
The Cairo and Alexandria Stock Exchange (CASE) has recently joined the World
Federation of Exchanges (WFE) and plans to attract more foreign investments. In
line with CASE’s ongoing plan to attract more FDIs, ABN AMRO-Bank together
with CASE, have agreed to issue Open Ended Certificates on the CASE 30 Index
which will be traded on international stock markets. ABNAMRO will issue
500.000 certificates in euros to be listed and initially traded on four international
markets (Swiss Exchange, Amsterdam Stock Exchange, Frankfurt Stock Exchange
and the Unified Borsa Italiana). These certificates will allow foreign investors and
international institutions to invest safely in the Egyptian stock market avoiding the
risk of foreign exchange currency fluctuations.
TELECOMMUNICATIONS
ITIDA sets grace period for alliances in E-Signature Certificates bids
NOOZZ, 21/12/05
Egypt’s Information Technology Industry Development Agency (ITIDA)
has set a grace period of three weeks for applicants for electronic signature
licenses to form alliances with foreign investors before the announcement
of license winners. Applicants included Advanced Computers Technology
Company, Misr Clearance Company, Egypt Trust, Security & Network
Services, ITT Soft and AVIT. The chairman of ITIDA has recently pointed
to an agreement with Egypt’s Minister of Communication & Information
Technology to grant only three licenses for e-signature certificates. The
agency has set the fees at LE 500 million per license.
TEXTILES & GARMENTS
Egyptian cotton Exports hit $108 million this season
ECONOMIC PRESS REVIEW, 08/12/05
Egypt’s cotton exports hit $108 million during the current cotton export season.
Egyptian cotton is being imported by 22 countries, chiefly India 24% and
Switzerland 23% followed by the United Arabs Emirates, China and Italy.
TOURISM
Tourists to Egypt up by 5%
MIDDLE EAST NEWS, 13/12/05
The Minister of Tourism announced that the number of tourists visiting Egypt is
expected to increase by 5% by the end of this year.
Strategy to channel LE 60 billion investments into Northwestern Coast
MIDDLE EAST NEWS, 13/12/05
The strategy which is currently being laid down envisages that the area could
absorb more than 1.5 million people during the next 15 to 20 years and attract
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local and international investments to work in this promising spot in the fields of
urban, tourist and agricultural development.
Al-Kharafi to invest $1.2 billion in Tourism Development in Marsa Alam
NOOZZ, 05/12/05
Kuwaiti’s Al-Kharafi Group plans to pump around $1.2 billion of fresh
investments into tourism development projects. The majority of the projects will
be in the Red Sea city of Marsa Alam and will include the construction of 44,000
hotel rooms.
TRANSPORT
Egypt is considers $120 million loan from Arab Economic Development Fund
AL-AHRAM, 22/12/05
Egypt is considering taking a $120 million from the Arab Fund for Economic and
Social Development to develop Hurghada International Airport.
Two container stations at Alexandria Port for LE 1.1 billion
AL-ALAM AL-YOUM, 19/12/05
An agreement was reached between the Ministry of Transport and the Chinese
company ((HBH)), which is specialized in maritime transport, in order to execute
a project for constructing two container stations at Alexandria & Dekhela ports,
with investment cost amounting to LE 700 million, in addition to other projects for
LE 400 million. The two container stations will be intermediary for Chinese
products to all countries of the world.
Egypt to hike Suez Canal fees in 2006
AL-AHRAM, 14/12/05
Suez Canal transit fees will be increased by 3% starting from 15 March 2006. The
Canal’s fees also went up by 3% in 2005, the first increase in nine years. Around
18,700 ships carrying 665 million tons are expected to generate record revenues of
$3.42 billion in 2005 up from $3.27 billion in 2004. The Canal is an important
source of foreign currency for Egypt, along with remittances from Egyptians
living abroad, tourism and oil exports.
A new low cost Aviation Company
MIDDLE EAST NEWS, 13/12/05
EgyptAir has decided to establish a new low cost aviation company. The
company will purchase eight new aircraft within the first half of 2006 as part of its
plan to increase the number of its planes to 60 by 2010. Furthermore, EgyptAir
has signed a deal to purchase 12 Boeing 737/00 passenger aircraft and is due to
receive some of those planes next year.
First Station for Fuelling Ships in PSEB with $50 million investments
AL-ALAM AL-YOUM, 11/12/05
A contract for setting up the first station for fuelling ships in Port Said West Bank
has been signed with $50 million investments. This project is being executed
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EGYPT: Business in Brief (EBIB)
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through a partnership between the Port Authority and the executing company
((Mashreq Company For Oil)) by virtue of concession right for land allotment.
The project stands over 210,000 square meters and the licence is valid for 25
years, subject to renewal, once the company abides by its commitments towards
the Port, in addition to paying LE 5000 annually, for the licence.
WATER & ENVIRONMENT
Egyptian – European agreement to develop water facilities signed
MIDDLE EAST NEWS, 06/12/05
Egypt and the EU signed an agreement by virtue of which the European Union
(EU) would offer €80 million to fund government projects to develop and expand
the clean drinking water network. The agreement directly boosts Egyptian
government efforts to implement the national plan to improve the management of
water resources.
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