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The Weekly

Week ending Sunday 31 August 2014

Issue : 34/2014

Suez Canal Investment Certificates

• Through a press conference held on Sunday, Governor of the Central Bank

of Egypt (CBE) Hisham Ramez announced all details related to the Suez

Canal investment certificates, as follows:

Basic Information:

Maturity 5 Years

Categories EGP10, 100, 1000, mul)ples

$1000, multiples

Annual Return EGP Dominated Certificates: 12 per cent

Dollar Dominated Certificates: 3 per cent

Payment

Frequency

EGP 10,100: (accumulated return at the end of the period)

EGP1000,mul1ples : (3 Months)

Banks National Bank of Egypt - Misr Banks – Banque Du Caire – Suez

Canal Bank

Other Information:

• The law that would regulate the issuance of the certificates has been

approved by the Cabinet, referred to the President for approval within the

coming few days.

• The CBE released 6 million cer)ficates.

• Certificates would be issued inside Egypt and abroad only for Egyptian

individuals and companies.

• Egyptian Finance Ministry would guarantee the certificates.

• Banks would not be allowed to buy the certificates in order not to crowd

out normal clients.

• Certificates would not be tradable.

• Issuing banks would not get any commissions for issuance or delivering

returns.

"Suez Canal development project would

have great returns for the Egyptian

economy"

"I expect the Suez Canal investment

certificates to cover a large part of the

project’s investment cost "

"Delegates will be assigned to go to

schools to facilitate buying the new

certificates for students"

"First year returns will be paid from the

Suez Canal revenues, while the proceeds

of developing areas around the canal will

cover returns required to be paid in the

following years"

Hisham Ramez

CBE Governor

Youm7 31 August 2014

“Banks will extend working hours to 6 pm

during the first 2 weeks of issuing the

certificates due to the expected high

volume of purchases”

Hisham Ramez

CBE Governor

Al-Borsa Newspaper 31 August 2014

1

The Weekly Week ending Sunday 31 August 2014

2

• Banks can use the cer)ficate as collateral to lend its owners up to 90 per

cent of its value.

• Cer)ficates can be returned only a:er 1 year of purchasing them.

• The return on the certificate is fixed and would not be affected by

changes in CBE interest rates.

• There is no maximum amount of purchases.

• The certificate is tax free.

* ($1=EGP7.16505, €1=EGP9.4607, €1=$1.3188)

“New certificates would not impact the

volume of current bank deposits, which

recorded EGP1.129 trillion and is growing

by an average of EGP50bn. every 3

months”

Hisham Ramez

CBE Governor

Al-Ahram 31 August 2014

El-Omda’s Reconciliation Initiative

• Former Moslem Brotherhood member, Mohammed El-Omda proposed a

new reconciliation initiative between the current government and the

Moslem Brotherhood members, once he was released from prison last

week after one year in detention on charges of inciting violence last year

after the ousting of Mohammed Morsi.

• El-Omda’s initiative includes seven points: a return to the democratic

path; lifting the ban on the MB Group and the rest of the Islamists,

considering El-Sisi’s presidency as transitional period to build cooperation

between the MB and the army, amending both constitution and

parliamentary elections law, revoking protest law ,restoring the rights of

martyrs since the 2011 revolu)on by the formation of a neutral fact-

finding committee.

“I will propose my initiative to both Islamist

parties and to the presidency, with the help

of other public figures that have proposed

similar initiatives previously”

“I had not rejected Morsi’s legitimacy as

president, but the current circumstances in

Egypt force us to act accordingly”

Mohammed El-Omda

Former MB Member

Ahram Online 31 August 2014

Other Headlines

• A second round of negotiations between Egypt and Ethiopia concerning

the establishment of the Renaissance Dam was resumed on 25 August in

Sudan. The three countries agreed to use international consulting

companies to conduct studies on the impacts of the dam within the

coming six months. They also agreed on forming a committee made up of

national experts from each country to oversee the building of the dam,

abandoning Egypt’s condition to include international experts in the

committee.

“What can be understood from the results of

the talks is that Egypt is dealing with the

dam as a matter of fact, and that its

construction cannot be stopped”

Helmy El-Shaarawy

Former Director of the Arab and African

Research Centre in Cairo

Daily News Egypt 27 August 2014

• US Secretary of State John Kerry has stated that the US intends to deliver

10 Apache helicopters to Egypt soon, a deal which was frozen last year.

Kerry reaffirmed the US appreciation to the Egypt’s role in ceasing fire in

Gaza.

"Secretary Kerry informed Egyptian Foreign

Minister that the US intends to move

forward on deliveries of the Apache, which

we believe are a critical tool that will help

the Egyptian government in its

counterterrorism efforts"

A US senior State Department official

Al-Arabiya.net 30 August 2014

The Weekly Week ending Sunday 31 August 2014

3

• Qatar has requested recovering its $3 billion deposit in the Central Bank

of Egypt, which is going to be repaid in two installments in October and

November 2014.

* ($1=EGP7.16505, €1=$1.3188)

“Repaying the Qatari deposit will negatively

impact Egypt’s net international reserves

and the Egyptian pound’s value against

foreign currencies”

Ahmed Adam

Banking Expert

Misr Alarabiya 25 August 2014

• Federation of Egyptian Industries has declared that two cement

companies (Lafarge and Arabian Cement) have already started using coal

in cement produc)on using European energy mix (81 per cent coal, 10 per

cent recycled waste, 7 per cent Mazut, and 2 per cent gas). Suez Cement,

largest producer in Egypt, will incorporate coal in production in

September.

“Cement companies will be committed to

international environmental standards in

using coal”

Omar Mehana

Head of Cement Industry Division for the

Federation of Egyptian Industries Youm 7 27 August 2014

• Egypt’s gross domestic debt increased by 17.9 per cent y-o-y to EGP1.7

trillion in June 2014 (83.7 per cent of GDP), while external debt moved up

by 6.7 per cent y-o-y, reaching $46.1 billion in the same month (16.2 per

cent of GDP).

* ($1=EGP7.16505, €1=EGP9.4607, €1=$1.3188)

“Most of the increase in the external debt

came as a result of facilitated Gulf loans”

Monthly Bulletin

Ministry of Finance -August 2014

• The government is planning to allow the private sector to participate in

producing energy from renewable sources. A competitive tariff will be set

by the government to purchase the private-sector’s production in order to

boost private investments in that vital sector.

“Electricity Ministry is continuously

receiving offers from the private sector to

increase its investments in renewable energy

sector ”

Mahmoud Attia

Head of New & Renewable Energy Authority

Al-Mal Newspaper 31 August 2014

• The National Telecommunications Regulatory Authority’s (NTRA) board

has referred the final framework of the unified telecom license to the

Cabinet for approval.

“The move was not related to any decision to

contest upcoming parliamentary polls,

expected sometime later this year”

Mohamed Abdel-Latif

Al-Wasat Party's Acting Head

Anadolu Agency 28 August 2014

• Al-Wasat Party has withdrawn from the National Alliance to support the

Legitimacy, a bloc of Islamic groups that has been opposing the ouster

former President Mohammed Morsi. The party attributed that step to the

need to work under a wider umbrella that can include various political

forces.

The Weekly Week ending Sunday 31 August 2014

4

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

9.37 9.41 9.51 9.47 9.51 9.51 9.54 9.61 9.70 9.75 9.77 9.59 9.49

10.95 11.19 11.18 11.39 11.38 11.52 11.61 11.59 11.81 11.98 12.17 12.11 11.88

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