|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||8.74 - 9.44|
|52 Week Range||8.05 - 16.03|
|Beta (5Y Monthly)||0.44|
|PE Ratio (TTM)||18.48|
|Earnings Date||Apr 30, 2020|
|Forward Dividend & Yield||0.65 (7.06%)|
|Ex-Dividend Date||May 18, 2020|
|1y Target Est||12.98|
(Bloomberg) -- Egypt held interest rates steady on Thursday, counting on last month’s record cut being enough to support the economy without exposing its debt to an emerging market sell-off spurred by the coronavirus.The central bank maintained the deposit rate at 9.25% and the lending rate at 10.25%, according to a statement. Nine of 10 economists surveyed by Bloomberg had predicted a hold after authorities slashed 300 basis points at an emergency meeting on March 16.The Monetary Policy Committee said it “moved preemptively” to bolster businesses and households, and its prior cut “should support employment in these exceptional times, which is essential in order to avoid a prolonged slowdown in economic activity and help speed the recovery once the outbreak is contained.”Egypt, which has reported 850 cases of the virus including 52 deaths, is seeking to avert the outflows that have seen investors pull a record $83.3 billion from other developing-nation equity and debt markets in March. The North African nation’s currency has for now bucked the trend, posting the second-best global performance against the dollar this year.Keeping the pound strong will be a challenge, with Egypt’s main sources of foreign currency -- tourism, remittances and Suez Canal receipts -- all threatened by a combination of the virus and the oil-price crash. The government has implemented a nighttime curfew and other restrictions to stem the outbreak in the country of about 100 million people.Authorities may also be waiting to judge the impact of the pandemic on inflation, which was an annual 5.3% in February after topping 30% during the early stages of an International Monetary Fund-backed reform program.Since its 2016 devaluation, Egypt has become the Middle East’s fastest-growing economy and a darling for fixed-income investors, offering some of the highest real rates of return in the world.The central bank, still monitoring the impact of March’s cut, needs to track inflation for the next one or two months, “given the expected volatility in food prices as a result of the lockdown and irrational buying behavior,” said Radwa El-Swaify, head of research at Cairo-based Pharos Holding.The MPC is likely to be “very cautious” about any further cuts as it needs to “sustain some foreign investment in Egypt’s sovereign debt instruments,” she said.The central bank said it “closely monitors all economic developments” and wouldn’t hesitate to “utilize all available tools to support the recovery of economic activity, within its price stability mandate, supported by the previous macroeconomic reforms.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- After making its biggest-ever interest-rate cut, Egypt is likely to hold fire Thursday as it tries to ringfence its debt from an emerging-market selloff sparked by the coronavirus.While central bank Governor Tarek Amer has said there’s scope for another reduction if needed, nine of 10 economists surveyed by Bloomberg predicted the Monetary Policy Committee will maintain the key deposit rate at 9.25%. One analyst sees a cut to 8.25%. It slashed rates by 300 basis points in an emergency decision on March 16, calling it “appropriate support to domestic economic activity.”Egypt, which has reported 779 cases of the virus including 52 deaths, is seeking to avoid the battering taken by much of the emerging world. While investors pulled a record $83.3 billion from developing-nation equity and debt markets in March, Egypt’s pound has proven extremely resilient, notching the second-best performance globally against the dollar this year.“Unless we see a spike in new daily cases, we expect relative policy stability in the short term,” said Ahmed Hafez, head of research for the Middle East and North Africa at Renaissance Capital.Still, Egypt’s currency stability will be hard to maintain. The pound is up against the dollar this year but increasingly overvalued, according to investors.The Arab world’s most populous country gets much of its foreign currency from three main sources: tourism, remittances and revenue from the Suez Canal, all of which are threatened by a combination of the virus and the oil-price crash.“The pressure from lower foreign-currency current account flows could lead to some weakness in the pound versus demand for imports,” said Reham El Desoki, an independent economist in Cairo. Egypt, which is typically a net oil importer, though, could see significant budget savings from the collapse in crude prices.The North African country will also want to maintain its status as a darling for carry-trade investors. Even after last month’s rate cut, it offers one of the world’s highest real yields.At the same time, Egypt has managed to tame inflation that rocketed to over 30% during an International Monetary Fund-backed reform program -- in February the rate was 5.3%.The virus’s impact could go either way, Goldman Sachs Group Inc said this week. While a decline in economic activity would further depress demand, any hoarding or product scarcity caused by disruptions to the supply chain could spur price rises.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Unfortunately for some shareholders, the Suez (EPA:SEV) share price has dived 35% in the last thirty days. Even longer...
(Bloomberg Opinion) -- As Saudi Arabia and Russia engage in a war on oil prices, their mutual friend Egypt could fall victim to the fallout. The timing could hardly be worse for an economy already threatened by the global novel-coronavirus epidemic. As always, poor governance is likely to make a bad situation worse.Remittances, estimated by the World Bank to be worth $26.4 billion last year, make up roughly 10% of Egypt’s GDP. This vital source of hard currency comes mostly from Egyptians working in countries dependent on oil exports. A collapse in prices could lead to layoffs, placing downward pressure on remittances reaching Egypt’s banks.The coronavirus crisis is already affecting Egyptian expatriate workers returning to the Arabian Gulf from home visits. New restrictions require them to be tested for the virus in Egypt before they can go back to work. Huge crowds have assembled outside laboratories run by the health ministry, overwhelming the supply of test kits.The restrictions will likely grow more stringent as authorities in the Gulf states respond to reports of an outbreak on a Nile cruise ship.Even before the oil war, two other important pillars of Egypt’s economic growth—tourism and natural-gas exports—were wobbling from the impact of the virus crisis. With people everywhere canceling their travel plans for fear of contagion, the tourism sector was already bracing itself for a hit. Hossam Al Shaer, the head of Egypt’s chamber of tourism companies, says new bookings are down 70%-80% compared to the same period last year. The sector brought in over $12.5 billion last year, just under 5% of GDP.The epidemic has also reduced global demand for energy, a relatively new problem for Egypt, which has only recently become a significant exporter of natural gas. While oil prices have received the most attention, natural-gas prices have also dropped precipitously, accelerating a trend that began last November. While natural gas exports are relatively small valued at $1.2 billion in 2019, the sector has been an important draw for investors and increased production has allowed the government to save billions in hard currency that used to be devoted to imports.Yet another of the consequences of the epidemic, a slowing of global trade, will impact Egypt’s hard-currency earnings from tolls at the Suez Canal, further constricting the country’s access to dollars and adding to its current-account deficit.The final pillar of Egypt’s economic growth has been construction. Much of the growth in this sector has been due to debt-driven stimulus that the government has largely channeled through military-owned enterprises. These companies are contracted to undertake large infrastructure projects, ranging from expanding transportation links to building new cities like the new administrative capital on the outskirts of Cairo.To date, Egypt has been able to sell its debt to fixed-income investors quite easily, as it has been one of the best carry trades in the world. Large inflows have helped buoy the Egyptian pound against the dollar, adding handsomely to the returns investors have received over the already generous interest paid on Egyptian treasuries. But recent debt auctions failed to meet their sales targets, with only half the six-month treasury bills on offer sold as investors demanded higher interest rates.While Egypt has managed to stabilize and shrink its debt-to-GDP ratio, borrowing in the first half of the 2019-2020 fiscal year rose 12%. The central bank governor, Tarek Amer, recently boasted Egypt no longer needs lending from the International Monetary Fund since it can access funds from the private sector, but this may soon change. The combined effect of the epidemic and the oil war could increase the risk associated with lending to Egypt, adding to doubts that the country has the revenue to support growing levels of borrowing without support from multilateral agencies.Without such support, international investors in Egyptian capital markets may look to shrink their exposure in Egyptian debt. They will likely demand higher interest rates as the currency’s excellent performance over the past year is unlikely to be sustained. Government officials may believe Egypt is too big to fail, and that international assistance will be forthcoming if needed, however the generosity of international financial institutions may be limited as they seek to manage a global economic crisis.While no economy is impervious to the virus, Egypt’s vulnerability is accentuated by the government’s failure to support growth in the private sector, which has shrunk nearly every month since the IMF bailout in 2016. Depressed levels of consumption, already a drag on the private sector, are likely to be exacerbated by the crisis. As the military’s economic empire has expanded, thanks to unfair competitive advantages, private-sector competitors have been squeezed.It is an all-too-familiar Egyptian saga: Poor governance and rentier economic policies exacerbate economic challenges and leave the country highly vulnerable to external shocks. The twist in the tale this time is that Egypt's feuding friends are making matters worse.To contact the author of this story: Timothy Kaldas at KaldasTimothy@gmail.comTo contact the editor responsible for this story: Bobby Ghosh at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Timothy Kaldas is an independent risk adviser and nonresident fellow at the Tahrir Institute for Middle East Policy. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Recycling textiles, batteries and packaging will be the priority in a new plan to halve waste in the European Union by 2030, the head of the EU's "Green Deal" said on Tuesday. "It's not about forcing our citizens to go live in caves and eat grass, it's about ensuring a high level of comfort, of development in a new economy," said Timmermans, who is also vice-president of the European Commission, the EU's executive. This will ban all disposable plastics by 2040, including packaging for household and skincare products, disposable cutlery in fast food restaurants, plastic tea bags and confetti.
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...