THE WEEKLYISSUE 444TH DECEMBER 2017

Bank of

1

IN THIS ISSUE

Number Of Tourists Increases 55%

A New Initiative To Support Entrepreneurship

Finance Ministry Keeps Customs Exchange Rate Unchanged

Global Container Companies Resume Activities In Egypt

Natural Gas Production Climbs 18%

Government Supports Cement Exports

The Central Bank of Egypt (CBE) decided to lift limits on deposits and withdrawals of foreign currency for companies importing non-essential goods as of the 28th of November 2017. The move reflects the CBE’s confidence in the country’s foreign currency position, after the improvement in net foreign assets of the banking system, which recorded a surplus of USD10 billion in September 2017 compared to a USD11 billion deficit in December 2016.

The CBE also restored the ceiling on banks’ foreign-currency long position to 10% of their capital, effective the 1st of December 2017, after being cut to 1% in December 2012. The total long and short positions of foreign and local currencies should not exceed 20% of banks’ capital.

ReutersEnterprise29th November 2017

“The move is another sign that bank liquidity is improving as a result of Egypt’s USD12 billion, three-year IMF program and a currency flotation that halved the EGP’s value and helped crush the black market for the USD”

NEW REGULATIONS BY THE CENTRAL BANK

THE WEEKLYISSUE 444TH DECEMBER 2017

Bank of

2

John CassonBritish Ambassador in EgyptAhram Online24th November 2017

“The initiative represents a new pillar in the partnership UK is building with Egypt. With IFC and Flat6Labs we will give Egypt’s young entrepreneurs the finance, the advice and the exposure to turn Egyptian ideas into international solutions, and make them the champions of the future economy of Egypt”

The Central Agency for Public Mobilization and Statistics (CAPMAS) revealed that the number of tourists visiting Egypt increased in Q3 2017 by 55% compared to the same period last year, exceeding 2.3 million tourists. A government official previously mentioned that Egypt’s tourism revenues jumped 211.8% (Y/Y) to USD5.3 billion in the first nine months of 2017. The tourism sector is showing signs of recovery after being hit by the crash of a Russian plane over Sinai in 2015, with hopes to regain pre-2011 levels.

The British Embassy in Cairo launched a new initiative called “Egypt Starts” with a grant worth EGP47 million. The new initiative aims at providing young Egyptian entrepreneurs with training and financing (up to EGP450,000 per company) to help them apply their ideas. The initiative is powered by the accelerator program Flat6Labs, and in partnership with World Bank Group member, International Finance Corporation (IFC).

The Finance Ministry stated that it will keep the customs exchange rate unchanged at EGP16 per US Dollar for December. The Ministry added that the decision is consistent with the currency price stabilization in the past period.

THE WEEKLYISSUE 444TH DECEMBER 2017

Bank of

3

Hesham ArafatMinister of TransportationEgypt Independent28th November 2017

“The resumption of navigation activities reflects a growing international confidence in the currently ongoing development project implemented by the Egyptian government in the Suez Canal Economic Zone”

Global container companies Hapag Lloyd, Yang Ming, Mitsui, NYK and K-line stated that they will resume their navigation activities in the ports of East Port Said and Damietta in 2018 after suspending their activities last April. The five companies also vowed to inject new investments in the logistics field in Port Said and Damietta.

Natural gas production increased by 18% in September 2017 to record 3.2 million tons compared to September 2016, according to CAPMAS. The domestic natural gas consumption hiked to 3.7 million tons in September 2017 from 3.4 million tons in the same month last year. On another note, the Petroleum Ministry announced that the recently discovered Zohr gas field, located in the Egyptian Mediterranean Sea, will start production by the end of 2017 with an estimated capacity of 350 million cubic feet per day. Zohr’s production will rise gradually to approximately one billion cubic feet of gas per day by mid-2018.

The government decided to bear 50% of the transportation costs of cement exports in a bid to support this vital sector. The Egyptian government tends to support cement exports, especially those exported to Africa in order to consolidate bilateral relations with these countries.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

THE WEEKLYISSUE 444TH DECEMBER 2017

Bank of

EGYPT AT GLANCEEXCHANGE RATES

STOCK MARKET

T-BILLS AUCTION

INTEREST RATES

GLOBAL COMMODITY PRICES

CONSUMER PRICE INDEX AND MAJOR COMPONENTS

EGX30 14,220

782

1,818

14,184

785

1,765

11,631

468

1,095

7,464

358

765

EGX70

EGX100

USD

27TH NOV 17

27TH NOV 17

27TH NOV 17

4TH DEC 16

4TH DEC 16

5TH DEC 16

17.70

21.10

23.58

4TH DEC 17

4TH DEC 17

4TH DEC 17

17.70

20.99

23.82

5TH NOV 17

5TH NOV 17

6TH NOV 17

17.65

20.54

23.08

17.84

19.00

22.70

2ND JAN 17

2ND JAN 17

18.18

19.11

22.42

EUR

STERLING POUND

3RD DEC 17

3RD DEC 17

MATURITY (DAYS)

91

182

266

AVERAGE YIELD (%)

19.171

19.048

18.746

29TH NOV 17

29TH NOV 17 357 18.485

AUCTION DATE

OVERNIGHT DEPOSIT RATE

CURRENT*

18.75%

19.75%

19.25%

PREVIOUS**

16.75%

17.75%

17.25%

+200 bp

+200 bp

+200 bp

OVERNIGHT LENDING RATE

CORRIDOR RATE

BRENT CRUDE*

428.25 430.75

1,294.52 1,281.95

408.25

1,170.38

56.82

1,314.84GOLD**

WHEAT***

*AT JULY 2017

*USD/BARELLSOURCE: BLOOMBERG

**USD/OUNCE **USD/BU

**AT MAY 2017

WEIGHT INBASKET %

OCT2016

OCT2017

(INDEX)(JANUARY 2010=100)

Y/Y

HEADLINE- ALL ITEMS

FOOD AND BEVERAGES

TOBACCO AND RELATED PRODUCTS

CLOTHING AND FOOTWEAR

HOUSING, WATER, ELECTRICITY AND GAS

FURNISHINGS AND HOUSEHOLD EQUIPMENT

MEDICAL CARE

TRANSPORTATION

COMMUNICATIONS

RECREATION AND CULTURE

EDUCATION

HOTELS, CAFES AND RESTAURANTS

MISCELLANEOUS GOODS AND SERVICES

100%

18.37%

3.12%

195.78

136.88

98.56

256.12

155.52

109.41

39.92%

3.77%

2.43%

235.90

166.24

207.53

329.23

219.30

293.88

2.19%

6.33%

4.63%

370.82

172.67

246.00

464.24

209.06

294.16

5.41%

5.68%

4.43%

3.73%

142.04

151.47

231.85

136.46

177.58

205.11

292.51

163.01

30.82%

39.56%

25.19%

25.02%

13.62%

31.91%

21.07%

35.41%

11.01%

41.61%

19.58%

26.16%

19.46%

17.70

20.99

23.82

2ND JAN 17

63.84 64.27 54.94

465.00 4

14,572

14,572

787

1,842

442

1,274.53

63.36

6

8

10

12

14

16

18

20

22

24

26

Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

EGP per USD EGP per Euro EGP per Pound Sterling

© Copyright Notice. The Weekly is a publication of ALEXBANK. No part of this publication may be reproduced or duplicated without the prior consent of ALEXBANK. This publication constitutes a summary of published news, quotes and economic indicators. This material does not constitute analytical economic research nor should be treated as such. All charts and graphs are from publicly available sources or proprietary data. Any views expressed in this publication do not necessarily reflect the opinion of ALEXBANK. The news, views and quotes within this publication are gathered from sources deemed to be reliable but which have not been independently verified. ALEXBANK does not make any guarantee to the accuracy or reliability of such information. AlexBank shall not be liable for any losses or damages incurred or suffered as a result of using its publications in part or in their entirety.

El-Moez Street, Cairo, Egypt

www.alexbank.com Bank of

ALEXBANK RESEARCH ...SHARING KNOWLEDGE

5