Tuesday,17 July, 2018
Current issue | Issue 1282, (11- 17 February 2016)
Tuesday,17 July, 2018
Issue 1282, (11- 17 February 2016)

Ahram Weekly


Al-Ahram Weekly

Reserves inching up

EGYPT’S net foreign reserves increased by $33 million to reach $16.478 billion in January, marking the fourth month in a row of increases to the reserves. The increase would have been larger but for the repayment of $700 million to the Paris Club of creditors at the beginning of the month. A $500 million loan received from the African Development Bank (AFDB) last month helped to cover the payment.

“The increase in the reserves, though still small, is an indicator of good management by the Central Bank that successfully coordinates with other banks to acquire and facilitate the provision of hard currency, as well as being an indicator of progressing FDIs [foreign direct investment] that have managed to step up, in accordance with the difficulties faced by the tourism sector on the back of the persisting insecurity incidents, as well as the global recession affecting the flow of trade in the Suez Canal,” Prime Securities commented in a note.

Egypt’s foreign reserves have been depleted since the 25 January Revolution, with revenues from both tourism and FDI dropping. The reserves, standing at $36 billion before the revolution, have been steadily falling, though they have been supported by Gulf aid received since July 2013.

Egypt is negotiating a $1 billion loan from the World Bank tied to the introduction of the new value-added tax (VAT). It is also negotiating a $1.5 billion loan with the African Export-Import Bank. Another $1 billion loan is to be received from China as part of the agreements signed during the Chinese president’s visit to Egypt last month. Saudi Arabia is also supposed to send Egypt a $500 million grant, as part of the $8 billion promised last month, in the form of investments and oil aid over the next five years.

AIB and Domty going public

THE STATE-RUN National Investment Bank has said it plans to offer a stake in its 91 per cent owned Arab Investment Bank (AIB) on the stock exchange. The announcement came as part of government plans to list shares in state-owned banks and companies on the stock market to produce further revenues.

Local cheese manufacturer Domty is also expected to float a stake in the company on the stock exchange next month in an offering that is expected to reap LE1 billion. The company, founded in 1989, is 70 per cent owned by the Al-Damaty family, with a Saudi investor owning the rest. The company has two factories in 6 October City and plans to start producing yoghurt and milk in cartons alongside its cheeses and juice.

Al-Ahly loses interest

AL-AHLY Capital, the investment banking arm of the National Bank of Egypt, has dropped its bid to buy CI Capital, a subsidiary of the Commercial International Bank (CIB). The decision, attributed to failing to agree on a timeframe to complete feasibility studies, came only hours after CIB said that Al-Ahly had submitted a non-binding offer to buy 100 per cent of its investment banking business for LE1 billion.

“Al-Ahly Capital has decided not to resume procedures for its acquisition bid and hopes that CIB achieves its goals in the interests of its stakeholders,” Al-Ahly said in a statement. CIB accepted a LE1 billion bid from Orascom Telecom Media and Technology (OTMT) in December, but the deal has not been finalised. CIB is supposed to receive the final offer to acquire CI Capital from next Thursday, when the due diligence process ends.

OTMT, owned by business tycoon Naguib Sawiris, plans to merge CI Capital with Beltone Financial, which it bought in November for almost LE650 million, to form the country’s largest investment bank.

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