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We have a packed issue for you this morning filled to the brim with economy news, and a splash of earnings updates. Let’s jump in.
PMI narrows in July
Egypt’s Purchasing Managers’ Index (PMI) recorded 49.7 points in July 2024— the second highest level since 2021 —while seeing an 0.4% month-on-month (MoM) fall from the month before.
Refresher:
Last month’s figures showed a significant rise in sales volumes for locals non-oil companies, marking the first growth seen since August 2021. The index increased slightly then from 49.6 in May to 49.9 in June, staying close to the 50.0 threshold for growth.
For July:
The manufacturing and services sector witnessed an uptick in new orders, while the construction, wholesale, and retail sectors saw a decline, providing a mixed picture of the market.
Egypt hikes subsidized wheat prices
The Egyptian Ministry of Supply has increased both locally produced and imported wheat prices geared toward the production of subsidized bread by about 20%, bringing it to 13,750 EGP per ton this month, Asharq reports.
Details:
Mills have reportedly raised the price of flour supplied to bakeries to 16,000 EGP per ton starting from early August, up from the previous price of 11,800 EGP per ton, marking a 35% increase.
Remember:
The government set the price of subsidized bread to EGP 0.20 in June, up 4x from previous prices which had remained unchanged for three decades.Egypt produces 270 million loaves daily through 32,000 local bakeries across all governorates.
What they said:
The prices of subsidized local bread will not be affected, and the state budget will cover the increase, ensuring that the price of subsidized bread remains at 20 piasters per loaf for ration card holders, Asharq reports.
Non-governmental foreign currency deposits in Egyptian banks saw a USD 2.41 billion hike to USD 53.03 billion during 1H 2024. This marks a 4.78 % increase from the USD 50.61 billion recorded by the end of 2023, and the highest uptick so far this year.
For the banking sector:
Egyptian banks saw deposit inflows of USD 1.36 billion last June alone.
Demand:
The Central Bank of Egypt said the volume of demand for foreign currency-denominated deposits reached about USD 12.92 billion, while the volume of time deposits and savings certificates reached USD 40.11 billion.
Sidi Kerir Petrochemicals signed an agreement to establish a new firm — dubbed Alexandria Supply Chain Company— geared toward the import of liquid ethane gas (American shale gas).
Structure:
SIdpec and Gamma Construction will each hold a 25% stake in the company, while the Egyptian Petrochemicals Holding Company (ECHEM) will have a 15% share, the Ethylene and Derivatives Company will hold a 25 % share, and the Egyptian Natural Gas Company (GASCO) will have a 10% share.
Refresher:
SIDPEC joined the same three other companies to establish a company geared for the import of ethane gas in June, with capital of more than USD 600 million to be paid in three phases.
In other news for the group:
The companies are working together to build a USD 40 million pipeline that will carry liquefied ethane gas imported to Sidpec and Ethydco, a government told Enterprise.
What else is clapping?
Sharkia National Food (SNFC) recorded net losses of EGP 2.54 million in the first half of the year, compared to over 548,000 in the same period in 2023.
The government wants to increase Egypt’s natural gas production capacity to about 5 billion cubic feet per day by year’s end. This compares to current levels of about 4.6 billion cubic feet per day, Asharq reports, citing a state official.
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