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Central Bank Keeps Interest Rates Unchanged
- What: On Thursday evening, the Central Bank of Egypt decided to keep interest rates steady during its Monetary Policy Committee meeting. The overnight deposit and lending rates, along with the main operation rate, now stand at 24%, 25%, and 24.5% respectively.
- So What: Annual urban inflation dropped to 14.9% in June, down from 16.8% in May. But it’s still above the bank’s target of 7% (±2%) by Q4 2026. Central banks use interest rates to help control inflation — raising them tends to reduce spending and demand, which can ease price pressures.
- Now What: Markets are watching how this decision affects local debt and the exchange rate. Meanwhile, the central bank will keep an eye on inflation trends ahead of its next meeting in August.
Elsewedy’s Subsidiary to Build $100M Textile Plant
- What: El Sewedy Industrial Development, a subsidiary of industrial giant Elsewedy Electric (SWDY), has signed an agreement with Turkish textile company Bony to build a fully integrated textile factory in Egypt. The total investment is expected to reach $100 million.
- So What: The new factory in the special free zone of 10th of Ramadan City is expected to create around 2,500 jobs, with operations starting by late 2026.
- Now What: In a March interview with Al Arabiya Business, Ahmed Shoukry, Group CFO of Elsewedy Electric, said the company is already working on projects worth EGP 196 billion, with plans to add new ones worth around EGP 120 billion this year. The textile plant is part of this broader expansion strategy.
- What: ValU (VALU), the newly listed consumer finance company, has received preliminary approval from the Central Bank of Jordan to offer “Buy Now, Pay Later” (BNPL) services in the country.
- So What: This marks ValU’s first direct regional expansion outside Egypt and supports its strategy to grow its presence in the Middle East’s fintech space.
- Now what: According to Research and Markets, the BNPL market in the Middle East is worth around $5 billion in 2024, and is expected to grow to nearly $12 billion by 2030. Jordan is part of that fast-growing opportunity, giving ValU a strong entry point into an emerging market with big potential.
- What: Sidi Kerir Petrochemicals Company “SIDPEC” (SKPC) plans to raise its issued and paid-in capital from EGP 1.81 billion to EGP 2.26 billion by giving shareholders one free share for every four they own.
- So What: The move aims to strengthen SIDPEC’s financial position and support its future expansion. Bonus share distributions typically boost investor interest as they offer additional shares at no cost, even though they don’t increase immediate profits.
- Claps Class: Bonus shares don’t mean instant gains. They increase your number of shares while lowering the price per share, keeping your total investment value unchanged. But they often help improve stock liquidity and attract more trading activity.
- Now What: Egypt’s Financial Regulatory Authority (FRA) has approved the publication of SIDPEC’s disclosure report. The next step is to call an extraordinary general meeting to vote on the capital increase, which will be funded from the company’s 2024 earnings.
What else is clapping?
- United Housing Buys Back More Shares
United Housing & Development Company (UNIT) increased its treasury shares to 1.6% of its EGP 294 million capital after buying 34,560 shares on Wednesday.
The buyback is part of a self-funded plan to repurchase up to 3% of the company’s shares, aiming to support the stock price, which the company believes is undervalued.
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