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Al-Ahram Weekly 5 - 11 August 1999 Issue No. 441 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 5 - 11 August 1999 Issue No. 441
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Focus Interview Features Travel Living Sports Time Out Chronicles People Cartoons Letters Banking for the poor
THE EGYPTIAN Amal Project, an Egyptian joint venture designed to provide small loans to low-income individuals, is expected to begin operating soon. Saudi Prince Al-Walid Ibn Talal has donated LE5 million to the capital of the planned Bank of the Poor. Total capital of the Egyptian project will be LE50 million.The very successful Grameen Bank of Bangladesh is the model for the Egyptian project which was originally proposed in 1996 by Al-Walid's father, Prince Talal Ibn Abdel-Aziz, brother of Saudi Arabia's King Fahd and head of the Arab Council for Childhood. The Amal Project is expected to benefit around 20,000 low-income Egyptian families during the next five years. Similar projects are currently being considered in Yemen and Lebanon.
CIB's profits soar
THE COMMERCIAL International Bank (CIB) has posted a 38 per cent increase in its net profit during the first half of 1999 compared with the same period last year. The bank enjoyed a net profit of LE176.2 million for the first six months of this year compared with LE127 million at the end of June 1998.Profits increased in spite of the decline in the bank's income from interest rates on treasury securities and a parallel increase in its tax provisions. The bank decided to reduce its investment in treasury bills and bonds following a new law passed last year which cancelled the preferential tax treatment that investors in treasury bills used to enjoy.
The bank has also increased its tax provisions to LE299.8 million compared to LE274.8 million a year ago in order to meet the increase in its tax obligations required by the same law.
CIB's total assets have grown to LE14 billion in 1999 from LE13.27 billion last year. CIB is ranked at the top of the list of Egyptian private sector banks in terms of its net worth.
Since its establishment in 1975, CIB has been a trend-setting player in the financial sector. It was the first Egyptian bank to float its shares in an Initial Public Offering (IPO), and the first three years ago to be listed in international markets through its Global Depository Receipts (GDR) issue.
In addition, CIB has been expanding its activities to include investment banking through its affiliate, the Commercial International Investment Company (CIIC), which itself has established a portfolio management company and a life insurance company.
Banking confidence
THE NATIONAL Bank of Egypt has sold its 24.32 per cent stake in Credit International d'Egypte (CIE) to the Credit Commercial de France (CCF). The deal, valued at about $18.4 million, increases CCF's share from 50.51 per cent to 74.83 per cent. Other shareholders in the bank include the German BHF-Bank which has 10 per cent. The remaining shares are being traded on the stock exchange.This is the second time that CCF has increased its stake in CIE. In 1997 CCF became the majority shareholder in the bank when it increased its share from 39 per cent to 50.51 per cent.
The move by CCF is intended to strengthen its presence in the Egyptian market in preparation for offering new banking services by the end of the year. It also reflects the bank's confidence in the Egyptian economy in general and the banking sector in particular, bank officials said.
Privatisation worries
THE GOVERNMENT'S decision, one week ago, to sell off 34 public sector companies in just two months has business and economic circles worried, reports Gamal Essam El-Din. Many stockbrokers and economic analysts expressed fears that privatising such a large number of companies in such a short time could cause a slump in share prices in the stock market.According to Mokhtar Khattab, a senior adviser to Minister of Public Enterprise Atef Ebeid, the government's plan offers two options: either selling off the 34 companies to anchor investors or floating their shares in the stock market. While the book value of these companies stands at LE2.9 billion, their market value is estimated at LE9.4 billion, Khattab said. The initiative will increase the number of privatised companies from 127 to 161.
The plan includes companies involved in chemical and drug production, contracting, shipbuilding, cotton ginning, food production, engineering and electrical industries.
Mohamed Abdel-Qader, an economic analyst at Cairo University, said the new initiative would be better off focusing on selling companies to anchor investors. "Since the market has been suffering from successive drops in share prices, it is not wise to float such a big number of companies at one time," he said.
