Egypt Independent: Economy-Main news http://www.egyptindependent.com//enhome_channel/Economy/rss.xml en Finance minister: Egypt considering $1.5 billion foreign bond as it repairs economy http://www.egyptindependent.com//node/2439165 <img src="http://www.egyptindependent.com///sites/default/files/imagecache/media_thumbnail/photo/2014/06/19/484151/217788_0.jpg" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><p>Egypt could tap international bond markets to raise up to $1.5 billion next year to shore up its finances and is open to agreeing an International Monetary Fund loan package if needed, Finance Minister Hany Kadry Dimian said on Thursday.</p><p>The Arab world&#39;s most populous country has been trying to repair an economy battered by political upheaval, street protests and militant violence since a popular uprising toppled autocrat Hosni Mubarak in 2011.</p><p>President Abdel Fattah al-Sisi&#39;s government has started implementing politically sensitive economic reforms such as slashing energy subsidies and raising taxes in a bid to narrow the budget deficit and gain the confidence of foreign investors.</p><p>Billions of dollars in grants, loans and petroleum products from Gulf Arab allies who backed Sisi&#39;s ouster of President Mohamed Mursi of the Muslim Brotherhood last year have kept the economy afloat and given the former army chief room for maneuver.</p><p>&quot;We are bringing the economy to the point of a strong take off and we are starting to see the signals,&quot; said Dimian in an interview for the Reuters Middle East economic summit.</p><p>&quot;It&#39;s a very difficult situation and our starting point is not an&nbsp;easy one but our main mission in this government is to rebuild the confidence in the Egyptian economy.&quot;</p><p>Dimian said initial economic reforms had gone smoothly but acknowledged that Egypt may need to seek foreign borrowing.</p><p>&quot;We are open to all different sources of financing with the magnitude that we choose and with the assessment to the appropriate timing that we can get into the market or to have access with the IMF,&quot; said Dimian.</p><p>&quot;I think we will go first to the international markets before tapping IMF resources. That would depend again on whether we have a guarantee or we just go on our own. So if we go on our own I expect that we will be ranging between $1 to $1.5 billion as a first batch and this is to test the markets.&quot;</p><p>Moody&#39;s raised Egypt&#39;s credit ratings outlook to stable from negative on Monday, citing a more stable political and security situation and signs of economic recovery.</p><p>A constitutional referendum in January and presidential elections in May this year, with parliamentary elections likely to be held by early 2015, had provided a reform roadmap and led to greater institutional stability, Moody&#39;s said.</p><p>Egypt&#39;s economic outlook has brightened in recent months. The economy grew 3.7 percent year-on-year in the fourth quarter of the fiscal year that ended in June, up from 2.5 percent the previous quarter. More recent economic indicators have pointed to a sequential pick-up.</p><p>&quot;I saw that Moody&#39;s have changed their outlook from negative to stable and I see it as quite insufficient to read the real situation of the Egyptian economy and they are still lagging behind the curve,&quot; said Dimian.</p><p>He predicted that over the next four or five years Egypt&#39;s budget deficit will ease to 8-8.5 percent of gross domestic product, after an initial target of 10.5 percent for 2014/15.</p><p>&quot;For next year, there will be very little decline and a rigidity because I have a constitutional obligation to increase spending on (the) health sector and education services and almost double them, and bring them up&nbsp;to 10 percent of GDP by the year 16/17,&quot; said Dimian.</p><p><strong>Hopeful of Big Investments</strong></p><p><span style="font-size: 1em; line-height: 1.5em;">Egypt introduced painful cuts in July, slashing energy subsidies by 40 billion Egyptian pounds ($5.6 billion), which triggered steep rises in the price of fuel and electricity. Fuel subsidies have in recent years cost Egypt&#39;s government around $15 billion a year, a fifth of the state budget.</span></p><p>The government has also introduced new taxes including a temporary, additional 5 percent tax rate on the wealthy over three years as it seeks to shore up its finances.</p><p>Dimian said the government plans to impose a value-added tax during the fiscal year that ends next June.</p><p>&quot;We have a timeline. We are working on it. Just after this interview I am having a big meeting with the sales tax authority and the Egyptian tax authority ....,&quot; said Dimian.</p><p>&quot;And very soon we will start to roll on social dialogue with the different interest groups. It&#39;s a bit early to give you an exact date.&quot;</p><p>A senior technocrat appointed to the finance ministry in 2007, Dimian worked alongside five finance ministers following the 2011 uprising that deposed Mubarak.</p><p>Dimian was the crucial point man in Egypt&#39;s negotiations with the IMF during Mursi&#39;s rule. Mursi failed to secure a $4.8 billion IMF loan while in office and was unwilling to impose the unpopular reforms that Sisi has set in motion.</p><p>Egypt hopes an economic summit in the Red Sea resort town of Sharm el-Sheikh in February will persuade investors that it offers stability and plenty of opportunities in a region gripped by war and Islamist militancy.</p><p>Dimian said he expected Egypt to sign investment deals worth about $5 billion ahead of the event.</p><p>&quot;We will be offering very attractive projects in a broad spectrum of sectors, be it in water desalination, in agriculture in the industrial sector or its sub sectors, be it in services such as river freight and transportation, in roads, in infrastructure like water treatment and solid waste treatment,&quot; he said.</p> Fri, 24 Oct 2014 07:15:00 +0000 Reuters 2439165 at http://www.egyptindependent.com sites/default/files/photo/2014/06/19/484151/217788_0.jpg Telecom Egypt official: Talks about market saturation with mobile services untrue http://www.egyptindependent.com//node/2439152 <img src="http://www.egyptindependent.com///sites/default/files/imagecache/media_thumbnail/photo/2014/04/26/484151/smal92012317241.jpg" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>Mohamed al-Nawawy, managing director and executive chief of Telecom Egypt, said the company applied in August 2009 for a mobile carrier license, but the then political regime postponed the issue for political reasons, which resulted later in continuous postponing.</div><div>&nbsp;</div><div>&ldquo;I will not recognize obtaining the license until I get it in my hand. Based on this, I will take measures. But where is the license? I had not received it yet,&rdquo; Nawawy said. &ldquo;Once the unified license was declared, I submitted feasibility study to the company board. I was authorized to pay LE2.5 billion for the license. I sent six letters to the National Telecommunications Regulatory Authority saying that the company is ready to pay for the license, but nothing happened. No one responded to our letters.&rdquo;</div><div>&nbsp;</div><div>Regarding importance of the fourth license, Nawawy said it targets &ldquo;increasing wealth of the Egyptian people as 80 percent of the company shares are owned by the people, while the 20 percent are owned by Egyptian and foreign shareholders. It&rsquo;s my duty to increase this wealth, which will never happen, if I own only eight percent of the market, while the remaining 92 percent are owned by the privately-owned mobile carriers. Secondly, It&rsquo;s a bigger profit for the company workers estimated at 50,000 employees.&rdquo;</div><div>&nbsp;</div><div>Telecom Egypt was the biggest service provider in the Middle East in 1998, according to Nawawy, however, it reached today the 30th rank due to being ruled out of competition.</div><div>&nbsp;</div><div>&ldquo;The gross domestic product of telecommunications sector reaches LE30 billion, while the national income of it reaches around LE10 billion, as the foreign partnership in the private sector companies reaches 72 percent, which is the rate that could be calculated through the average of the foreign partner&rsquo;s shares,&rdquo; Nawawy said, arguing that by simply adding together the three companies&#39; foreign share percentages, with Vodafone at 55 percent, Mobinil at 95 percent and Etisalat at 65 percent, and dividing by three, you could calculate the percentage of foreign-owned shares in the Egyptian mobile market.&nbsp;&ldquo;This is unique and unprecedented in the world.&rdquo;</div><div>&nbsp;</div><div>Asked over the market saturation and profit that the fourth license could yield, Nawawy said, &ldquo;I heard this before when the Emirati Etisalat entered the market with the third license. These sayings are usual by competitors. I believe this is untrue.&rdquo;</div><div>&nbsp;</div><div>According to Nawawy, the Egyptian market has a different demography. &ldquo;One third of the people is under 15 years old, second third is between 15-25 years old, while the last third is above 25 years old. The rate of increase in households reaches around half million families annually, which means that we will have five million new houses over ten years, which is the client that I will target. In addition, there is the basic client of Telecom Egypt, which installed the landlines for seven million houses. Once I get the license, I will head to these houses, which have an average of five individuals making a total of 35 million persons and that will create the competition. I will start off with our clients through convincing them with our mobile services based on the previous credibility.&rdquo;</div><div>&nbsp;</div><div>Concerning the voice services, Nawawy said they are not his main target. &ldquo;Of course I will try to get the biggest number of users, but the real future is for internet services and the broadband,&rdquo; adding that growth in the data transfer reaches 40 percent. He also added that Telecom Egypt will be keen on making the voice calls for free like it is abroad.</div><div>&nbsp;</div><div>Nawawy also indicated that the company is working on the fourth generation wireless technology and that the government declared in April that the 4G&rsquo;s frequencies will be available in a one year from now.</div><div>&nbsp;</div><div>Asked about joining the new unified telecommunications entity that will be established soon, Nawawy said, &ldquo;The decision to join or not is based on goals of the entity. If I found it will grant the mobile operators with the services I render, so what will be the benefit behind joining? What would be the benefit behind joining an entity that wants me to pay for establishing networks at places I already have network at so the other entity members, who are my competitors, would benefit from?&rdquo;</div><div>&nbsp;</div><div>Nawawy said that a company representative attend the preparatory meetings of the new entity to acknowledge the situation so if they took decision, it would be made on a true basis. However, attending the meeting should not indicate preliminary approval. &ldquo;The decision is for the general assembly and then the board. I&rsquo;m the managing director in the board. I will stick to what would be agreed on.&rdquo;</div><div>&nbsp;</div><div>Asked if the new entity would secure the Egyptian national security, Nawawy wondered if the national security cannot be protected without the entity. &ldquo;Aren&rsquo;t the security licenses that any company get a guarantee for the national security. Before the entity, Telecom Egypt couldn&rsquo;t establish any cables or extend infrastructure without necessary licenses from all sovereign authorities.&rdquo;</div><div>&nbsp;</div><div>In related news, Telecom Egypt will launch two international bids to import from one to six million SIM cards for mobile phones and from 11-45 million recharge cards for the fourth mobile carrier whose licence was approved by cabinet in September.</div><div>&nbsp;</div><div>A source from the company said arrangement are being made for the bid to import the recharge and SIM cards.</div><div>&nbsp;</div><div>&nbsp;</div><div><em>Edited translation from Al-Masry Al-Youm</em></div><div>&nbsp;</div> Thu, 23 Oct 2014 16:28:00 +0000 Al-Masry Al-Youm 2439152 at http://www.egyptindependent.com sites/default/files/photo/2014/04/26/484151/smal92012317241.jpg EGX30 ends Thursday on red down 0.17%, gains LE9.35 billion in a week http://www.egyptindependent.com//node/2439151 <img src="http://www.egyptindependent.com///sites/default/files/imagecache/media_thumbnail/photo/2013/12/26/484151/__sqwt_mwshr_blbwrs_lmy_tswyr_mhmd_mrwf_4_536.jpeg" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>The Egyptian stock exchange closed on a negative note with the benchmark index EGX30 slightly decreasing by 0.17 percent to record 8,797.29 points on a turnover of LE680 million.</div><div>&nbsp;</div><div><span style="line-height: 1.4;">While, the EGX30 was up 2.37 percent this week, the market capitalization gained&nbsp;</span><span style="line-height: 16.7999992370605px;">LE9.35 billion</span><span style="line-height: 1.4;">&nbsp;(</span><span style="line-height: 16.7999992370605px;">US$1.3 billion</span><span style="line-height: 1.4;">) to close at&nbsp;</span><span style="line-height: 16.7999992370605px;">LE495.9 billion compared to LE486.7 billion last Thursday.</span></div><div>&nbsp;</div><div>Egyptian and Arab retail investors closed as net sellers on Thursday recording LE38.4 million, and LE11.97 million respectively while foreign retail investors were net buyers recording only LE0.35 million.</div><div>&nbsp;</div><div>Meanwhile, foreign and Arab institutions were net buyers at LE13.7 million and LE51.4 million respectively as opposed to&nbsp;Egyptian institutions that were net sellers at LE15.1 million.</div><div>&nbsp;</div><div><em>*Correction: The closing EGX30 numbers were corrected in the headline and the body text.</em></div> Thu, 23 Oct 2014 14:05:00 +0000 Egypt Independent 2439151 at http://www.egyptindependent.com sites/default/files/photo/2013/12/26/484151/__sqwt_mwshr_blbwrs_lmy_tswyr_mhmd_mrwf_4_536.jpeg CAPMAS: Egypt's industrial production index up 4.6% in August http://www.egyptindependent.com//node/2439149 <img src="http://www.egyptindependent.com///sites/default/files/imagecache/media_thumbnail/photo/2014/10/23/484151/capmas.png" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>Egypt&#39;s Industrial Production index (without crude oil and petroleum products) increased 4.6 percent in August 2014, compared to July 2014, due to high operating rates after end of Ramadan month and Eid al-Fitr, according to Central Agency for public mobilization and statistics (CAPMAS).</div><div>&nbsp;</div><div>The monthly index decreased 7.3 percent in July 2014.</div><div>&nbsp;</div><div>Meanwhile, total index for manufacture of tobacco products reached 95.22 during August 2014 compared to 72.86 in July 2014, an increase of 30.7&nbsp;percent due to increased demand for</div><div>the product and full working shifts after Ramadan month, CAPMAS said in statement on Thursday.</div><div>&nbsp;</div><div>Moreover, total index for manufacture of machinery and equipment products reached 139.31 during August 2014 vs. 112.73 in July 2014, an increase of 23.6&nbsp;percent due to little increase in production rates, CAPMAS added.</div><div>&nbsp;</div><div>At the same time, total index for manufacture of motor vehicles, trailers and semi-trailers reached 207.16 during August 2014 compared to 136.05 during July 2014, an increase of 52.3&nbsp;percent due to increased demand for production and working full time (full shifts), CAPMAS showed.</div> Thu, 23 Oct 2014 13:55:00 +0000 Ibrahim Alsahary 2439149 at http://www.egyptindependent.com sites/default/files/photo/2014/10/23/484151/capmas.png