Pre-Trading Thoughts

Al Ahly Pharos

The Finance Ministry yesterday released its preliminary budget report: growth projection slashed again to 4.0%, inflation targets revised upwards to an average of 18.1%, and budget deficit to widen slightly by 0.1 percentage point to 7.3%.

The government is preparing to launch a USD1.1 billion program to implement the state ownership policy, and a document issued by the World Bank revealed that the government will obtain partial financing for the program worth USD250 million to cover the operating cost.

Minister of Finance said that Egypt will receive about USD20 billion from the disbursement of the second tranche of the Ras El Hekma project by the end of May, in addition to the expected inflows of c. USD1 billion from the World Bank, in addition to EUR1.07 billion from the EU and USD820 million from the IMF until the end of June.
Saudi Arabia’s Ajlan & Bros Holding has reportedly indicated its interest in developing an integrated tourism project in Ras Gamila in a letter to the government, unnamed sources said.

The export councils are seeking to establish export intermediation companies whose mission is to market Egyptian products in the foreign markets, instead of producing companies.

The Minister of Finance said that the government is trying to extend the maturity of some of its domestic debt held by public entities to alleviate some of the pressure on the state budget.

Misr Clearing Company is preparing to collect capital gains tax from investors after completing the tax base and collection system within two months, sources said, adding that the collection process will be carried out for the entire year 2023 and six months of 2014.

PHDC (FV: EGP7.11, OW) is co-developing a 420 feddan project in Sidi Heneish on the North Coast with Cleopatra Group whereby PHDC will be entitled to 67% of revenue as the developer and Cleopatra Group will be entitled to 33% of revenue as the land owner. The project is expected to generate revenue of over EGP100.0 billion within seven years.

The US President called for more than tripling the existing 7.5% tariff on Chinese steel and aluminum imports, new pressure on Mexico to prevent China from shipping metals to the United States via Mexican ports, and an investigation of Chinese subsidies for its shipbuilding industry.

Crude oil futures fell more than 3% Wednesday as the market dismissed the risk of a wider war between Israel and Iran that could disrupt supplies. June Brent futures were down USD2.73, or 3.03%, at settle at USD87.29/bbl.

GBCO announced the launch of a new JV (GSK) to manage the MG Motor dealership in Jordon. GSK is a partnership between GB Auto and the former MG Motors distributor in Jordon.

Beltone Financial Holding announced that its wholly owned subsidiary, Beltone Venture Capital, signed a partnership agreement with CI Venture Capital, a wholly owned subsidiary of Citadel International Holdings, an investment management firm in Abu Dhabi, to manage a USD30 million fund to back fast-growing startups.

OFH shareholders have responded to BINV’s MTO for a majority stake in the company, where owners of some 3.3 billion shares (a 69% stake in the company) responded to the offer. BINV will now need to complete the share swap.

Several banks have recently issued savings certificates for large clients, amid increased interest rates and increased competition to maintain more liquidity. The minimum amount for purchasing those new savings certificates ranges between EGP1 million and EGP10 million, and the fixed interest rate on these certificates ranges between 21% and 25.5% with a monthly exchange period.