Al-Sisi In Russia

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The Weekly

Week ending Sunday 17 August 2014

Issue : 32/2014

Al-Sisi In Russia

• On Tuesday 12 August, President Abdul Fa�ah Al-Sisi started a 2-day visit

to Russia where he met the Russian President Vladimir Putin and other

prominent Russian officials. The importance of the visit stems from the

fact that this is the first invitation Al-Sisi receives from a leader outside

the Arab world.

• Both leaders discussed the latest developments in the Arab world and

plans for improving cooperation between the two countries in different

fields including:

o Boosting bilateral trade as Russia would increase both wheat

exports to Egypt and its imports of agriculture products.

o Creating a free trade zone between Egypt, Russia, Belarus and

Kazakhstan.

o Setting up a Russian industrial hub in Egypt as part of its new Suez

Canal Axis Project.

o Developing military cooperation, as Russian official news agency

reported investigating the deliveries of high-tech Russian military

products to the Egyptian Army.

"Egypt has already increased (agricultural)

supplies to our market by 30 percent (and) is

ready to increase (supplies) by yet another

30 percent in the near future"

Vladimir Putin

Russian President

Reuters 12 August 2014

“Russia is supporting Egypt in its fight

against terrorism, especially in light of its

growing threats in the Middle East”

Vladimir Putin

Russian President

CNN 12 August 2014

"I would like to stress that the entire

Egyptian people are following my visit to the

Russian Federation and are expecting a lot of

cooperation between our countries.

Therefore, I believe we will meet the

expectations of the Egyptian people"

President Abdul Fattah Al-Sisi

Ahram Online 12 August 2014

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The Weekly Week ending Sunday 10 August 2014

2

Suez Canal Project

• The new Suez Canal Project is going to be financed through:

o Offering 5-year investment cer1ficates at a yearly yield of 12 per

cent for those issued in local currency and 3 per cent for dollar

dominated certificates, to be paid out every three months.

o The new certificates are going to be provided through public banks

next week and will be only sold to Egyptians.

o Certificates issued in local currency will be offered in three

categories: EGP10, EGP100 and EGP1,000, while those issued in US

dollars will be offered at mul1ples of $1,000.

o A syndicated loan to be granted by a number of Egyptian public and

private banks to the Suez Canal Authority to dig the new canal and

prepare the infrastructure needed for the project.

* ($1=EGP7.16505, €1=EGP9.599445, €1=$1.3401 )

“The yield on these certificates is currently

the highest in the Egyptian banking sector ..

the new certificates will be guaranteed by

the Finance Ministry and its first year yield

will be paid from the Suez Canal revenues”

Hisham Ramez

CBE Governor

Masrawy 16 August 2014

“The new certificates are going to be tax

free”

Ahraf Salman

Investment Minister

Al-Shorouk Newspaper 16 August 2014

Best Banks

• Finance Ministry announced the names of the top five banks in dealings in

government securi1es during 4Q FY 2013/2014:

T-Bills Primary Market T-Bonds Primary Market

1 National Bank of Egypt 1 Commercial International Bank

2 Misr Banque 2 National Bank of Egypt

3 Commercial International Bank 3 Misr Banque

4 Arab African International Bank 4 Arab African International Bank

5 Arab Bank 5 Misr Iran Bank

"Commercial banks will benefit from these

ratings to highlight its competitiveness in the

market, and foreign banks operating in

Egypt are more interested in these

assessments as a sign for the success of

those banks’ management "

Hani Kadri

Finance Minister

Al-Borsa Newspaper 17 August 2014

Other Headlines

• President Abd El Fattah Al-Sisi held talks with a US delegation from the

House of Representatives, where he met with the delegation head Darrell

Issa discussing the turmoil in Sinai and on Egypt’s borders with Libya. Al-

Sisi also discussed the ways to fight terrorism that might lead to more

military aid from the US to Egypt to be $1 billion in next year budget up

from $0.5 billion this year.

* ($1=EGP7.16505, €1=$1.3401)

“Our relationship is strong, ongoing, and will

strengthen in the upcoming period”

Darrell Issa

Head of US Delegation

Daily News Egypt 17 August 2014


3

• The Central Bank of Egypt (CBE) raised the maximum value of units that

can be financed through its mortgage finance ini1a1ve to EGP400,000

instead of EGP300,000. The CBE previously launched an ini1a1ve to boost

mortgage sector as it allowed EGP10 billion for banks to lend citizens at an

interest rate of 7 and 8 per cent for low and middle-income individuals

respectively.

* ($1=EGP7.16505, €1=EGP9.599445)

"This decision was attributed to the limited

number of units available at a price of

EGP300,000 in addi/on to the increasing

cost of building new units due to the increase

in prices of raw materials affected by raising

energy prices"

Mai Abdul Hameed

Head of Mortgage Finance Fund

AL-Shorouk Newspaper 16 August 2014

• Egypt's steel producers raised the monthly rebar prices by 4.2 per cent

in August to reach EGP5280 per tonne as a result to the government's

decision to raise the cost of natural gas, that is supplied to steel

factories, besides the hikes witnessed in the steel raw material billet

prices in the global market last month.

* ($1=EGP7.16505, €1=EGP9.599445)

“Producers have exaggerated the price

hikes….the energy increase is estimated at

EGP20 per tonne, meaning that producing a

tonne of steel rebars will cost EGP100

instead of EGP80 in terms of natural gas

consumption”

Ahmed El-Zeiny

Head of the Building Materials Division at

Cairo Chamber of Commerce


• Central Agency for Public Mobilization And Statistics CAPMAS declared

that unemployment rate slightly declined in 2Q 2014 by 0.1 per cent,

recording 13.3 per cent.

“The persistence of high unemployment

reflects an ongoing slowdown in economic

activity, especially in productive sectors such

as industry, tourism and construction”

CAPMAS Quarterly Report


• Nine people were killed on 14 and 15 August in Cairo after violent

clashes erupted between security forces and demonstrators who rallied

into streets across the country to mark the first anniversary of dispersing

Moslem Brotherhood’s sit-ins in Cairo (Rabaa & El Nahda sit ins). 18

people were injured and 193 were arrested in Cairo, Giza, Alexandria,

Suez, Kafr El-Sheikh, Beni Suef, Fayoum, Beheira and Suez governorates

during clashes.

“Some of those arrested were in possession

of weapons, and in one case a bag was

seized containing “six grenades and five

improvised explosive devices”

Interior Ministry Statement

Daily News Egypt 16 August 2014


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EGP Exchange Rates*

Egyptian Stock Market Indices

Macroeconomic Indicators FY 2011/2012*** FY 2012/2013*** 2013/2014 (July-March)

Real GDP Growth Rates 2.2% 2.1% 1.1%****

Budget Deficit (EGP Billion) 166.7 239.9 145

Budget Deficit as % of GDP 10.8% 13.8% 7.1%

Balance of Payments (USD Billion) -0.1 0.24 2.2

Gross Domestic Debt (EGP Billion) 1,155.3 1,446.6 1,708.1

Gross Domestic Debt as % of GDP 74.9% 83.4% 83.3%

Average Headline Inflation 8.7% 6.9% 10.7%

Average Unemployment Rate 12.4% 13% 13.4%

*Average exchange rates on the last working day of the week in Egypt.

**Morgan Stanley Capital International Emerging Markets Index.

***Fiscal year ending 30 June.

**** July/December 2013

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7.00 6.91 6.90 6.90 6.95 6.98 6.98 6.98 7.02 7.17 7.17 7.17 7.17

9.20 9.41 9.51 9.47 9.51 9.51 9.54 9.61 9.70 9.75 9.779.59 9.57

10.95 11.19 11.18 11.39 11.38 11.52 11.61 11.59 11.81 11.98 12.17 12.11 11.95

5.005.506.006.507.007.508.008.509.009.50

10.0010.5011.0011.5012.0012.5013.00

Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14

EGP per USD EGP per Euro EGP per Pound Sterling

35

40

45

50

400045005000550060006500700075008000850090009500

Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14

MS

CIE

M

EG

X

EGX 30 EGX 70 (Rel.) EGX 100 (Rel.) MSCI EM**

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Al-Sisi In Russia