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We have a packed issue for you this morning with the latest on Egypt’s standing following the global market sell off, loads of earnings updates, and more.
But first, The Central Bank of Egypt announced it will auction off one-year treasury bills worth EUR 600 million this morning at 11 AM. This marks the first sale of Euro-denominated t-bills since November, 2023.
“Hot money” flight comprised 8% of foreigner investor holdings at most, PM says
The clap:
Egypt’s Prime Minister Moustafa Madbouly noted in a presser last week that the “hot money” that went out of Egypt as international investors opted to liquidate their treasury bills amid a global equity sell off comprised between 7-8% of their total domestic holdings, Reuters reports.
The catalyst:
Analysts and bankers stated that foreign investors offloaded EGP treasury bills and changed the money into USD as a part of a broader move to reroute their capital to safer havens.
This comes after the US released its July jobs report, which showed a 4.3% uptick in unemployment rates, and led to global market hesitancy leading to the erasure of some USD 6.4 trillion from bourses the world over.
The analysts Reuters quotes noted that on the homefront, regional political tensions ( amid Israel’s war on Gaza) and worries about government finances drove the local sell-off, the news wire notes.
What they said:
“This issue was dealt with the utmost professionalism, it was dealt with by the Central Bank, which confirms that we are committed to having a flexible exchange rate and that the state does not interfere so that there are no negative repercussions,” Madbouly noted.
Egypt and UAE plan USD 3 billion oil logistics zone on the Mediterranean
The clap:
Egypt and the UAE inked a memorandum of understanding (MoU) on Thursday that could see both sides jointly establish a new logistics zone for the trade of petroleum products at the Port of Al-Hamra on the Mediterranean, according to a cabinet statement. The project is expected to have initial investments of up to USD 3 billion.
The details:
Per the MoU, both countries will study leveraging the UAE’s partnerships with Big Oil suppliers in the Fujairah Oil Industry Zone to offer competitive import advantages to the Egyptian General Petroleum Corporation.
When is this expected to materialize?
Establishment of the new petroleum zone “will take three years from the start of implementation,” an unnamed state official told Asharq Business, noting that
Egypt’s government expects to break ground on the project in 1H 2025 following the completion of technical and consulting studies.
Why this matters:
The Port of Fujairah is the world’s second-largest bunkering hub after Singapore, and saw bunker sales of some 7.4 million metric tons in 2023,
In other oil news:
Egypt settled USD 21 million of its arrears to UAE-based natural gas company Dana Gas during the first half of the year. The company’s dues stood at USD 60 million as of the end of June, Al Borsa reports.
AND:
Egypt’s Petroleum and Mineral Resources received the tenth shipment of its largest LNG tender in years, Mubasher reported yesterday. The shipment — exceeding 150,000 cubic meters of gas– comes as the government works to end supply shortages which had driven several fertilizer producers to shutter their doors twice in June at a collective daily price tag of EGP 187 million.
The clap:
Abu Dhabi Islamic Bank -Egypt (ADIB) saw its net income rise 111.2% YoY during the first six months of 2024 to over 4.57 billion.
Revenues:
The lender also swelled its net revenue from funds 80.8% YoY to EGP 7.04 billion.
This comes as income from Murabaha, Musharaka, Mudaraba and other similar incomes increased 62.1% YoY to EGP 7.99 billion during the period.
Claps Class – Islamic Banking:
- Mudarabas are income sharing agreements where banks provide loans in exchange for profits.
- Murabahas are financing agreements where banks finance purchases, adding a markup fee for injected funding.
- Musharakas are partnerships/equity sharing agreements where banks provide loans in exchange for equity.
Net fees and commission income:
The bank saw its net fees and commission income rise 14.8% YoY to EGP 971.6 million during the first half of the year.
Remember, this comes after a great Q1:
The lender saw its net profits rise 110% YoY in the first three months of the year to EGP 2.1 billion. Income from Murabha, Mudarba, Musharaka, and similar income increased by 82.6% YoY to reach EGP 7.01 billion.
The clap:
Canal Shipping Agencies (CSAG) reported an 87% YoY hike in its net income to EGP 638.62 million from the start of July 2023 till the end of June 2024, according to an EGX disclosure.
Topline:
The company’s revenues rose 24.8% YoY during the last fiscal year to EGP 101.55 million, compared to EGP 81.3 million during the same period last fiscal year.
Driving the growth:
The company’s profit and revenue hike comes on the back of increased returns on investment from its subsidiaries Port Said Container & Cargo Handling Co (PSCCHC) and Damietta Container & Cargo Handling Co (DCHC).
CSAG holds a 20.6% stake in PSCCHC, and a 20.01% share in DCHC.
Remember:
This comes despite a 7.4% YoY fall in Suez Canal revenues — to USD 5.8 billion — recorded in the first 9 months of 2023-2024.
The clap:
EGX-listed investment bank Prime Holding saw its net income fall 10.8% YoY to EGP 13.59 million during the first six months of the year, compared to EGP 15.2 million in the same period the year before.
Revenues:
The company’s topline grew 16.4% YoY to EGP 112.76 million during the period.
On a quarterly basis:
The firm recorded EGP 17.27 million in net profit in the first quarter of the year, up considerably from the EGP 195.7 thousand it had raked in the same period the year before. Its revenues also rose 124% YoY during Q1 2024 to EGP 45.43 million.
What else is clapping?
Egypt’s commodity exports to Saudi Arabia increased 13% YoY in the first half of 2024 to reach USD 1.58 billion, marking a five-year peak.
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