DEMAND for the long-term treasury bonds put up for subscription by Egypt's Ministry of Finance has been overwhelming. The Central Bank of Egypt (CBE) announced this week that demand for the T-bonds had outstripped supply by 4-1.
While the T-bonds issue is worth some LE500 million, the government received purchase requests amounting to over LE2.273 billion. Around 73 per cent of the requests were made by individuals and investment funds. After fulfilling all the orders submitted by individuals and funds only 6.99 per cent of the total was available for allocation to financial institutions and privately owned companies. Accordingly, LE104.95 million went to banks, LE24.167 million to insurance companies and private insurance funds, and LE4.195 million to the private sector.
The bonds, which mature in 2005, carry a 10 per cent interest rate. Investors will be able to register and trade their bonds in three months.
This is the third offering of government long-term bonds in around eight years. All are due to mature in the next millennium.
Cement crisis over
THE PRICE of cement has been brought under control following additional imports, reports Gamal Essam El-Din.
Public Sector Minister Atef Ebeid said this week that the government had finally managed to bring the high price of cement under control. He attributed the sharp rise in the price of cement in the last two weeks to a shortage in supply and a boom in construction during the summer months of July and August.
Addressing the People's Assembly's Housing Committee on Sunday, Ebeid said the current production of cement stands at 21 million tons while consumption is close to 24 million tons. "The gap between production and consumption has been closed by importing three million tons," said Ebeid.
In Egypt, he said, there are eight public sector cement production companies which, over the past four years, have increased production from 16 tons to 20.9 million tons. The volume of production, he added, will increase by two million tons next year. Ebeid also said that demand on cement in the country increases by eight per cent each year. This, he added, caused cement imports to climb from one million tons in 1994 to three million tons this year.
Ebeid said the cement market in Egypt is valued at LE5,000 million. "A market of such size is difficult to control. Right now, plans are under way to build additional cement factories in various areas to meet expected increased demand and prevent any future problems," Ebeid said.
