Tuesday,21 November, 2017
Current issue | Issue 1137, 28 February - 6 March 2013
Tuesday,21 November, 2017
Issue 1137, 28 February - 6 March 2013

Ahram Weekly

Briefs

Al-Ahram Weekly

Green light for QNB-NSGB deal

THE EGYPTIAN Financial Supervisory Authority (EFSA) has approved a new offer by Qatar National Bank (QNB) to acquire 100 per cent of the shares of the National Société Générale Bank (NSGB) rather than the planned 77 per cent.
The Doha-based bank published an advertisement in Monday’s newspapers inviting shareholders interested in selling their shares to the Qatari bank to start doing so on Tuesday for a 20-day period ending on 25 March.
The accepted offer is valued at $5.76 or LE38.21, which is the price agreed upon between QNB and Société Générale SA, owner of 77 per cent of NSGB. The offer puts the overall value of the bank at LE17.14 billion. The buyout is QNB’s biggest in its 48-year history and helps it to expand its network to almost 25 countries in the Middle East and North Africa region.
NSGB is Egypt’s second-largest privately owned lender, and it has a network of about 160 branches. It had assets of LE63.3 billion and loans of LE36.1 billion at the end of September, 2012.

Negative indicators

EGYPT’S economic growth in the second quarter of the 2012/13 fiscal year stood at 2.2 per cent compared to 2.6 per cent on the first quarter, but increased by 2.4 per cent during the first half of fiscal year 2012/13 compared to the same period last year.
A statement from the ministry of planning and international cooperation attributed the decline in growth rates to “security and political tensions” in the country. The statement also noted that total investment rose by 13.7 per cent to LE62.3 billion in the second quarter, up from LE49.3 billion in the previous quarter. When compared to the same quarter the previous year, investment showed a 6.7 per cent decline.
In another negative note, revenues from the Suez Canal fell in the first half of 2012/13 by 3.6 per cent.


Developing the Suez Canal

IN ORDER TO maximise benefits from the Suez Canal Zone, the government has started taking concrete steps towards executing the Suez Canal Development Project that aims at making the zone an international logistics and industrial centre, writes Nesma Nowar.
“There is no place in Egypt that has the same advantages as the Suez Canal area,” Tarek Wafik, minister of housing and urban communities, said this week at an event hosted by the German-Arab Chamber of Industry and Commerce.
Nonetheless, Wafik said the area was still performing well below its potential, adding that revenues from the Suez Canal amounted to around $5 billion a year, all from the fees paid by ships.
“When we compare this to similar places in Dubai and Singapore, it is nothing,” the minister said, pointing out that for each container going through the canal the country receives $80, while in other locations, such as Dubai, this figure could reach up to $400 due to the logistics services on offer.
Wafik said that the government was now setting up the legal structure of the new project. He said that a draft law regulating the authority for the development of the Suez canal would soon be presented to the cabinet for approval before being passed to parliament.
The project aims to increase canal revenues from the current $5.2 billion to $100 billion annually, in addition to creating about one million jobs. The Suez Canal contributes 12 per cent of Egypt’s GDP and seven per cent of the world’s sea trade passes through the canal.


The Turkish model

TURKEY has announced the removal of tariffs on all Egyptian exports to Turkey, and Turkish businessmen have expressed their desire to see the Free Trade Agreement between the two countries amended in order to accelerate the elimination of tariffs on Turkish products entering the Egyptian market, which is due to happen in 2020, writes Nesma Nowar.
The announcement came during a seminar organised by the Turkish-Egyptian Businessmen Association (TUMIAD) in collaboration with the Egyptian Business Development Association (EBDA) this week in Cairo.
EBDA Chairman Hassan Malek said that Turkey’s fast-growing economy had reached growth rates of 8.5 per cent and it was a successful model for Egypt to look at. He said that Turkey had reformed its financial sector, which in turn had helped encourage investment, increase exports, and trim domestic debt.
Meanwhile, Zaki Ekinci, TUMIAD chairman, said he expected Turkish investments in Egypt to increase from the current $1.5 billion to reach $5 billion, though he did not specify a target date. He also expected trade between the two countries to increase from $5 billion to some $10 billion, he said.
Entitled “the Success Story of the Turkish Economy and how to Exchange Economic Expertise between Egypt and Turkey,” the seminar explored how Turkey had been able to overcome its economic crises and move to macroeconomic stability.
Muhsin Kar, professor of economics at Turkey’s Necmettin Erbakan University, said that there had been key drivers of economic stabilisation, including an anti-inflationary programme with the assistance of the International Monetary Fund, tax reforms, financial sector reform, central bank independence, social security reforms, and issuing a foreign direct investment law.
He added that these structural reforms had gone hand-in-hand with efforts to fight corruption, build better infrastructure, achieve low inflation and improve the business climate. Kar also stressed the importance of political stability as one of the keys of economic success.
“Political stability is essential to make decisions effective in the economy,” he said, adding that as a result of the country’s reforms Turkey’s GDP growth rate had jumped from 1.5 per cent in 1997-2001 to 7.2 per cent in 2002-2006.

Baby food
THE DEPRECIATION of the Egyptian pound against the dollar is affecting the price of pharmaceutical products and baby formulas, Nesmahar Sayed reports. The Egyptian pound officially traded at LE6.76 a dollar this week.

While pharmaceutical products are produced in Egypt, “the effective material of any remedy is exported from abroad,” according to Ahmed Ghazali, senior field training supervisor at SIGMA pharmaceutical industry. The rise in the value of the dollar has affected hard currency liquidity of pharmaceutical companies, affecting their ability to import the needed materials, Ghazali said.
Ghazali pointed out that importers are now required to pay up front in cash the value of their imported material which is affecting the manufacturing process.
Ghazali was speaking at the 31st International Congress of the Egyptian Society for Neonatal and Preterm Care held in Marsa Alam in Egypt earlier this week.
The same thing applies to the cost of formulas for babies which also saw a hike in prices. According to Emad Philip, field operation manager at Nestle Egypt, baby food is imported and is not subject to the mandatory pricing from the Ministry of Health. Already the price of the formula increased from LE41.5 to LE45. “If the price of the dollar keeps increasing then we could reach a point where customers will not be able to buy our products,” Phillip said. With this in mind, he added, the aim in 2013 is to produce special formula tins for the Egyptian market.

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