Egypt Financial Market Update
Egypt sells bonds worth $388m
The Egyptian central bank has said it has accepted offers worth EGP2.127bn ($388.46m) in an auction for reopened 5-year bonds worth EGP3bn, Reuters has reported. The bank, acting on behalf of the ministry of finance, has accepted offers between 11.05% and 11.59%.
Egypt plans to sell stakes in state-owned firms
Egypt's Investment Ministry plans to sell stakes of up to 49% in selected state-owned firms, Reuters has reported. Some of the firms are fully state-owned and some are majority state-owned. The ministry said that Egypt would retain a minimum 51% stake in all the firms. "I'm not really very much under any kind of pressure or in a hurry to get things on a fast track, because the kind of portfolio we have today is a profitable one," Investment Minister Mahmoud Mohieldin told the Reuters Middle East Investment Summit.
Egypt's extra spend to be 'off budget'
Egypt's plans to spend an additional EGP10bn ($1.8bn) would not increase the deficit target as any extra funds would be off-budget, according to the country's finance minister. 'The budget target is not changed,' Boutros Ghali told Bloomberg News. 'Additional spending is by economic authorities out of their own resources,' he said.
Egypt deficit at 9-10% of GDP, says minister
Egypt's Prime Minister Ahmed Nazif said stimulus spending will propel the country's budget deficit by 9-10% of gross domestic product in the financial year 2009/10, compared to 6.9% in 2008/9, Reuters has reported. Egypt had spent almost EGP15bn ($2.75bn) to boost the economy in the first half of 2009, and plans a second stimulus package worth EGP10bn, of which some EGP4bn had been spent, Nazif said.
Egypt to mull $1.8bn stimulus package
A new stimulus package worth 10 billion Egyptian pounds ($1.8bn) will be proposed at a conference of the ruling National Democratic Party at the end of this month, a government official told Reuters. 'The government will raise an additional 10 billion pounds to be spent on infrastructure projects such as road building and water treatment to create jobs,' an official with the Ministry of Economic Development told the news service.
Egypt plans core inflation index
Egypt's central bank has said it will introduce a core inflation index, a measure that usually strips out potentially volatile items, such as food and energy, Reuters has reported. The index aims to help make forecasts in the country, which has sought to bring down price rises that peaked at more than 20% in 2008. 'The core inflation index is a very important tool that sheds lights on reasons inflation rates went up,' according to Rania al-Mashat, head of monetary policy division at the central bank.
Egypt aims for 10% growth by 2012
The Egyptian government has said that a government plan for 2020 is expected to boost growth rates to 10% by 2012, Reuters has reported. The plan relies on economic growth being propelled by industrial and technological development, a spokesman at the Economic Development Ministry told the news service.
Egypt urban inflation up in September
Figures from Egypt's state-run CAPMAS statistics agency have shown that the country's annual urban inflation in September saw its first rise in ten months due to the rising cost of food and drinks, Reuters has reported. Urban inflation jumped to 10.8% in the year to September from 9.0% in the year to August. The main rise was seen in food prices, which jumped 3.7% on the month, while culture items gained 0.7%. Food and drink constitute the single largest category in the basket and have risen 23.6% since the start of the year.
Egypt to allow brokers to buy bonds
Egypt's Finance Ministry has announced its approval for brokerage firms to directly buy government bonds, in a bid to develop a secondary bond market for corporate and state debt, Reuters has reported. A secondary market would help in pricing debt and make bonds more attractive to buyers, thus making it easier for companies to raise funds. The creation of a bigger market should also help push down the cost of borrowing for both the government and corporations.
Egypt expects $10bn in foreign investment
Egyptian Investment Minister Mahmoud Mohieldin said he believes the government will attract about $10bn in foreign direct investment in the current fiscal year, up from $8.1bn the previous year, Bloomberg has reported. The government will promote 52 infrastructure projects to foreign investors, including Asian and Gulf Arab sovereign wealth funds, he said. The government expects growth of more than 5% in the fiscal year through June 30 and is drafting a law to encourage companies to invest in infrastructure, he added.
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