july 2014 (2) - gafi 2014.pdf · during july 2014, females accounted for 11.2 percent of new...

Monthly Report July 2014 Issue No. 7

Investment Monitor

Investment Monitor Monthly Report

July 2014

2014 Monthly Report - May 2014

Issue No. 7

Focusing on Investment News and Investment Indicators in Egypt

General Authority for Investment and Free Zones (GAFI)


Contents

Investments • New Establishments

• Distribution of New Establish‐ments by Sector

• New Establishments by Gender

• Legal Form of New Establishments

• Geographical Distribution of New Estab‐

lishments

• Estimates of New Job Creation by Occupa‐tion

• Estimates of New Job Creation by Gender

• Investments in New Establishments Distributed

by Nationality

Capital Market

• The Egyptian Exchange Indices

• Trading Aggregates

• Performance of different sectors

• Egyptians versus Foreigners

• Market Capitalization

• Bonds

Investment News in Egypt

• FDI jumps by 39% in Q3 FY 2013/14

• Minister of Investment: attracting Chinese in‐

vestments stimulates economic growth

• Arab businessmen on GAFI board of trustees

• British Petroleum injects USD 10 billion invest‐

ments within five years

• GAFI announces LACTIMED contest

Macro economy

• Growth Trends

• Inflation

• Interest Rates

• Net International Reserves

• Employment

2


FDI jumps by 39% in Q3 FY 2013/14

According to the Central Bank of Egypt, net FDI inflows increased by USD 238 million or 39.4 percent up to USD 1.840 billion during Q3 of FY 2013/14 compared to USD 1.602 billion during Q2 of FY 2013/14.

The volume of foreign investments, which entered Egypt during Q3 of FY 2013/14 amounted to USD 3.073 bil‐lion compared to investment exist of USD 1.232 billion, noted the monthly report of the Central Bank. Invest‐ments from the EU countries amounted to USD 1.968 billion, recording an increase of USD 283 million over Q2 and recording an increase of USD 1.013 billion over the corresponding quarter of FY 2012/13, which posted USD 955.7 million.

During Q3 of FY 2013/14, Arab investments declined by USD 47 million, amounting to USD 386.8 million com‐pared to USD 433.8 million during Q2 of FY 2013/14. Arab investments recorded a decline compared to the corresponding quarter of FY 2012/13, which posted USD 601.6 million.

Source: Al Bawaba News

Minister of Investment: attracting Chinese investments stimulates economic growth

The Ministry of Investment is keen on communicating with Chinese investors through their embassy in Cairo as China is a strong economic potential, the Minister of Investment, Ashraf Salman said.

"My meeting with the Chinese Ambassador and ten other ambassadors are expected to bring about very prom‐ising results in the investment sector in Egypt", Salman added.

It is worth mentioning that the Chinese investments in Egypt and the volume of trade exchange with it amounted to USD 10 billion, including USD 2 billion in Egyptian exports. Chinese investments cover the manu‐facturing, construction and service sectors in addition to potential investments of USD 1.05 billion in the Suez Gulf area and USD 500 million through the Chinese Egypt TEDA, which seeks to develop six square kilometers in the Economic Zone North‐West Suez Gulf. Phase one of the latter investment covers the development of twenty square kilometers. TEDA seeks to attract 150 to 180 companies to the zone, operating in car assembly, pharmaceuticals, plastics and petroleum products.

"Joint training programs are held annually between Egypt and China", the Chinese Ambassador to Egypt said. He explained that his country was keen on providing banking facilities to SMEs in Egypt in the form of facili‐tated loans whether through purely Chinese investments or joint projects with the Egyptian side. He explained that Chinese companies operating in Egypt are mostly concentrated in the West Suez Gulf area. The number of Chinese interests hit 648 projects in the CIT, construction, service, agriculture, tourism and manufacturing sec‐tor, the Ambassador concluded.

Source: Al Youm Al Sabea

1 Investment News in Egypt

Investment News in

Egypt

3


Arab businessmen on GAFI board of trustees

"The new composition of the board of trustees of the General Authority for Investment and Free Zones will in‐clude four Arab businessmen and a similar number of Egyptian ones in addition to two ministers and an invest‐ment manager to be decreed by the Prime Minister", revealed the Minister of Investment, Ashraf Salman.

The new structure of the GAFI board of trustees includes Dr. Hasan Fahmi (chair); Wafaa Sobhi and Alaa El‐Din Omar (vice chairs); Neveen Al Shafei; Hussien Sabor; Khaled Seri; Sherif Sami; Tarek Tawfiq, Kamel Saleh, Mo‐hamed Nageeb; Ahmed Al Sayyad and Rania Al Mashat (members).

Source: Mubasher

British Petroleum injects USD 10 billion investments within five years

British Petroleum has decided to resume its largest projects in Egypt following a three‐year suspension. The company plans to inject further investments in the gas sector totaling USD 10 billion within four to five years. The new production in Egypt will start in 2017, helping meet 25 percent of the domestic market's demand of natural gas, the company noted.

Meeting the Executive President of British Petroleum, the Prime Minister, Ibrahim Mehleb stated that the state supported all investment sectors, especially the exploration of oil and gas. He added that the reform procedures recently taken by the government seek to create investment‐conducive climate to encourage investors to inject new investments.


GAFI announces LACTIMED contest

In cooperation with the Chamber of Trade, Industry and Agriculture in Zahlah and Al Beqaa in Lebanon and ANIMA Investment Network, the General Authority for Investment and Free Zones organized a workshop in the Alexandria‐based Maritime Academy. The event was to announce the regional contest for innovative projects, which seeks to enhance the traditional dairy products in the Mediterranean countries.

The contest will be held in Alexandria and Beheira of Egypt; Al Beqaa and Baalbak of Lebanon; Thessalia of Greece; Sicilia of Italy and Benzert and Beja of Tunisia. The initiative, which is launched within the course of LACTIMED Project, seeks to enhance the dairy sector in the Mediterranean countries. The event held in Alexan‐dria was an opportunity to raise the potential participants' awareness of how to carry out effective, model and sustainable means of production in addition to needs to improve quality and manage relations with consumers.

Expected objectives and results of the LACTIMED project include the promotion and enhancement of model dairy products in the Mediterranean countries and the improvement of the capacity of producers and project owners through training. It also seeks to enhance dialogue between producers, subsidy organizations and ac‐tive national financial bodies.


Investment News in

Egypt

4


Growth Trends The economic growth rate stood at around 2.5 percent in Q3 of FY 2013/14 compared to some 2.2 percent during the

corresponding period of FY 2012/13.

Figure (1): Real GDP Growth

Source: Ministry of Planning

Inflation According to the data of the Central Agency for Public Mobilization & Statistics (CAPMAS), the change in the

monthly CPI inflation reached 3.3 percent in July 2014 compared to around 0.9 percent in July 2013.

Figure (2): Change in Inflation rate in Consumer Prices (Month on Month)

Source: CAPMAS

2 Macro economy

Macro econom

y

7

%

6.7 0.4

5.2

3.35.7

2.2 2.21.5

11.4

2.5

0

1

2

3

4

5

6Percent


Interest Rates The Monetary Policy Committee (MPC) decided, following its meeting on December 5, 2013, to maintain the over-

night deposit and lending rates at 9.25 and 10.25 percent respectively. It also decided to maintain the Repo. rate at

8.75 percent and the credit and discount rate at 8.75 percent.

Figure (3): Overnight Deposit and Lending Rates at the CBE

Source: Central Bank of Egypt

Net International Reserves At the end of July 2014, net international reserves held by the Central Bank of Egypt (CBE) stood at US$ 16.7 billion.

Net international reserves (NIR) imports coverage ratio stood at 3.4 months by the end of June 2014.

Figure (4): Net International Reserves Held at the CBE

Source: Central Bank of Egypt

Macro econom

y

%

8

USD bn


Employment According to the most recent labor force sample survey conducted by the end of Q1 of 2014, the unemployment rate

stood at 13.2 percent by the end of Q1 of 2013.

Figure (5): Unemployment in Egypt

Source: CAPMAS

Macro econom

y

9


New Establishments

In July 2014, a total 544 new companies were established by the Egyptian, Arab and Foreign private investors, com-

pared to 525 companies set up in July 2013. The daily average of new companies established in July 2014 reached 18

companies (109 per week on average).

Figure (6): Weekly Number of New Established Companies during July 2014

Source: GAFI Distribution of New Establishments by Sector In July 2014, the Services sector accounted for the bulk of new establishments, with 230 new companies. This was

followed by the Manufacturing sector (136 companies) Construction and Building (90 companies), CIT (34 compa-

nies), Agriculture (30 companies), Tourism (22 companies) and Financing services (2 companies).

Figure (7): Sectoral Distribution of New Establishments during July 2014

Source: GAFI

3 Investments

Investments

10

Company

79

157 149136

23

020406080

100120140160180

week 1 week2 week 3 week 4 week 5

companies

34

90

2

230

30 22

136

0

50

100

150

200

250companies


It is worth mentioning that the total issued capital of new establishments amounted to EGP 740 million in July 2014.

The Service sector attracted a total issued capital of EGP 225.1 million in July 2014. This was followed by the Manu-

facturing sector (EGP 214.5 million), Construction and Building (EGP 172.6 million), Agriculture (EGP 91 million),

Tourism (EGP 27 million), CIT (EGP 6 million) and Financial Services (EGP 4 million).

Figure (8): Sectoral Distribution of Issued Capital by New Establishments during July

2014

Source: GAFI

New Establishments by Gender During July 2014, females accounted for 11.2 percent of new establishments. On the other hand, males accounted for

85.7 percent of newly established companies during July 2014. Legal entities accounted for 3.1 percent of new estab-

lishments.

Figure (9): New Establishments by Gender during July 2014.

Source: GAFI

Investments

11

6.0

172.6

4.0

225.1

91.0

27.0

214.5

0.0

50.0

100.0

150.0

200.0

250.0

85.7%

11.2%

3.1%

Males

Females

Legal entities


Legal Form of New Establishments Limited liability companies had the largest share of newly established companies (35.8 percent) during July 2014,

followed by joint stock companies (31.8 percent), individual companies (19.7 percent), limited partnership companies

(7 percent) and joint venture companies (5.7 percent).

Figure (10): New Establishments Distributed by Legal Form during July 2014

Source: GAFI

Geographical Distribution of New Establishments During July 2014, a total of 544 companies were established with issued capital of EGP 740 million. At the level of

investment in specific governorates, Giza and Alexandria accounted for the bulk of new establishments, with six com-

panies each, followed by Cairo and Menya with five companies each.

Regarding the value of issued capital, Suez accounted for the largest share of issued capital invested in new companies

established during July 2014, with a total of EGP 21.4 million. This was followed by Monofeya with EGP 12.5 million

and Alexandria with EGP 6.5 million.

The following figure indicates geographical distribution of new establishments, issued capital, and numbers of new

jobs created during July 2014:

Investments

12

35.80%

31.80%

19.70%

7%

5.70%

Limited liability

Joint stock

Individual

Limited partnership

Joint venture


Table (1): Distribution of New Establishments by Location, Issued Capital and Esti

mated Jobs during July 2014

Source: GAFI

Investments

13


Estimates of New Job Opportunities by Occupation Newly established companies during July 2014 are expected to provide 4906 job opportunities for Egyptians, which

include 1570 blue collar jobs, 2790 white collar jobs, 169 agriculture jobs, 222 jobs in the engineering sector, 55 in the

health care sector and 100 jobs in the tourism sector.

Figure (11): Estimates of Job Creation in New Establishments Distributed by Occupation

during July 2014

Source: GAFI

Estimates of New Job Opportunities by Gender Males are expected to occupy 42.5 percent of these new job opportunities, while females are expected to account for

5.2 percent of jobs created. Some 52.3 percent of new jobs will be avail-able for either males or females.

Figure (12): New Establishments by Gender during July 2014

Source: GAFI

Investments

14

42.5%

5.2%

52.3%

Males

Females

Males/Females

2 790

169 22255 100

1 570

500

1 000

1 500

2 000

2 500

3 000

White collar Agriculture Engineering Medical Tourism Blue collar

Job opportunities


Investments in New Establishments Distributed by Nationality Egyptian investors accounted for the largest share in issued capital of new establishments during July 2014, having

standing at 82.8 percent whereas Arab and Foreign investors accounted for 15.1 percent and 2.1 percent respectively.

Figure (13): New Establishments by Nationality during July 2014

Source: GAFI

Investments

15

82.8%

15.1%

2.1%

Egyptians

Arabs

Foreigners


Market Indices Performance

EGX 30 index closed at 8,826 points, recording an increase of 8.14% during July 2014. EGX70 index posted 6.27% gains, while EGX 100 index rose by 7.2% and concluded the month at 628 points and 1,109 points, respectively.

Table (2): Egyptian Exchange Indices

Source: The Egyptian Exchange (EGX) Total Market

• The total value traded recorded LE 17.3 billion, while the total volume traded reached 2,535 million securities executed over 338 thousand transactions during July 2014.

• For the last month, (June 2014) the total value traded recorded LE 41.9 billion, while the total volume traded reached 5,639 million securities executed over 541 thousand transactions.

• Stocks trading accounted for 62.38% of the total value traded of the main market, while the remaining 37.62% were captured by bonds over the month.

• Nilex stock exchange recorded EGP 24.2 million worth of traded value and 15.7 million securities exe‐cuted over 5.123 transaction during the month.

Table (3): Total Market in July 2014

Source: The Egyptian Exchange (EGX)

4 Capital Market

16

Capital M

arket


Table (4): 10 Most Active Companies in Terms of Volume Traded (Main Market) during July 2014


Sectoral Performance

Banks sector and a positive fundamental highest return, at about 17.67%. As shown in the next Figure .

Figure (14): Sectoaral Performance during July 2014


17

Capital M

arket


Investors' Activity

Egyptians controlled 86.84% of the value traded during the month. Non‐Arab foreign investors accounted for

9.22%, while Arab investors captured 3.95%, after excluding deals. Non‐Arab foreign investors were net buy‐

ers, with a net equity of LE 466.55 million, and Arab investors were net sellers, with a net equity of LE 10.95

million, after excluding deals.

It is Worth mentioning that the non‐Arab foreign investors were net buyers, with a net equity of LE 794.92 mil‐

lion since the begining of the year. Meanwhile, Arab investors were net buyers, with a net equity of LE 2,510.62

million, after excluding deals.

Figure (15): Investors' Activity (foreigners and Egyptians) during July 2014


• During this month, the institutions accounted for 59.13% of the value traded, while the remaining 40.87%

were for the individuals.

• The institutions were net buyers during this month, with a net equity of 578.65 million, after excluding

deals.

Figure (16): Investors' Activity (individuals and institutions) during July 2014


18

Capital M

arket


Market Capitalization The total market capitalization of the listed stocks culminated at LE 501 billion at the end of this month, repre‐

senting an increase of 4.90% over the month, as depicted in the table below.

Table (5): Market Capitalization during July 2014

Source: Egyptian Exchange

Bonds Over the month, the total bonds' traded value amounted to LE 6,133 million, with a total trading volume of

5,825 thousand bonds, as depicted in the following table.

Table (6): Trading Aggregates of Bonds in July 2014

Source: The Egyptian Exchange

19

Capital M

arket


Published by General Authority for Investment and Free Zones (GAFI)

Prepared by:

Dr. Mona Farid Badran

Amr Abu El‐Ela

Ahmed Ismail

Asmaa Anis

Mona Emad

Ola Mamdouh

Translated by Tarek Fawzy

www.gafinet.org

Distributed in the Arab Republic of Egypt and abroad to individuals and institutions concerned with monitor‐ing the performance of investment in Egypt.

The information in this publication may be freely re‐used and reproduced provided appropriate credit is given to the source.


Previous Publications and Reports

Periodic Publications:

• English and Arabic Monthly Reports ( January– June 2014) • English and Arabic Quarterly Reports (Q1- Q4 2012/2013) ( Q1-Q3 2013/2014) • Macroeconomic Presentation until June 2014

• Ministry of Investment Annual Report (Ar.)

Non- Periodic Publications:

• Snapshot on the Egyptian Economy (November 2013) • Snapshot on the Egyptian Economy 2013 • Snapshot on the Egyptian Economy 2012 • Invest in Egypt 2010 • Egypt Macroeconomic Indicators in 2009

For more Reports and Studies, Visit the website of Ministry of Investment and General Authority of Investments and Free Zones http://www.investment.gov.eg http://www.gafinet.org

july 2014 (2) - gafi 2014.pdf · during july 2014, females accounted for 11.2 percent of new...

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