Latest news with #RasElHekma


Zawya
6 days ago
- Business
- Zawya
Foreign portfolio investors return as Egypt's financial health improves
Despite receiving a reprimand from the IMF over delays in its privatisation programme, Egypt continues to draw strong interest from foreign portfolio investors. This is reflected in the $15 billion of inflows into local debt markets—particularly EGP-denominated treasury bills and bonds—since the flotation of the Egyptian pound in March 2024. These instruments offer high yields and are relatively insulated from foreign exchange risk. Investor sentiment toward Egypt has remained broadly positive in recent months, supported by a stronger foreign reserves position, the UAE's $35 billion investment in Ras El-Hekma, and progress on the IMF-backed reforms. Within the broader emerging markets (EM) allocation context, Egypt stands out as a relatively favourable trade. This is partly due to domestic developments but also reflects global macro trends. Two key shifts have worked in Egypt's favour since the onset of tariff tensions earlier this year: -A weaker US dollar, which typically boosts capital flows into EMs. -Lower oil prices, which benefit Egypt as a net energy importer. 'We maintain a positive fundamental credit view on Egypt,' said Fady Gendy, Portfolio Manager at Arqaam Capital. 'The country enjoys strong backing from bilateral partners, and there are potential new deals in the pipeline. For instance, Qatar and Kuwait may convert their central bank deposits into direct investments, alongside fresh inflows.' Investor confidence has also been buoyed by the IMF's fifth and sixth combined review of Egypt's support programme, as well as support from the EU and World Bank. However, the pace of privatisation of state assets remains a key concern, as it is central to the IMF program and critical for fiscal consolidation. On the hard currency side, Egypt's eurobonds have rallied significantly since the April 2 sell-off—triggered by US tariff reforms and the brief Israel-Iran conflict. 'Following the rally, yields have dropped, and Egypt now appears expensive—both historically and relative to similarly rated EM peers like Bahrain, Jordan, and some African sovereigns. We're waiting for more attractive entry points,' Gendy added. Dual strategy Meanwhile, foreign investors remain active in the local currency market, particularly in short-term EGP-denominated instruments, which offer net yields above 20%. These instruments are attractive due to their short duration and limited interest rate sensitivity. 'We view these as high-yielding, short-term carry trades. Entering now—before the Central Bank of Egypt (CBE) resumes its rate-cutting cycle—offers the potential to lock in gains, especially by extending into longer-dated bonds,' Gendy said. The CBE, which cut overnight interest rates in April and May for the first time in over five years, has since paused. However, markets anticipate up to 300 basis points (bps) of rate cuts in the second half of the year. As a result, foreign investors are pursuing a dual strategy: investing in short-term treasury bills (3, 6, and 12 months) to capture current high yields of 20–22%, while also positioning in 3- and 5-year bonds to benefit from potential price appreciation as rates decline. Mohamed Abu Basha, Head of Macroeconomic Analysis, at EFG Hermes, noted that while there were significant outflows during the Israel-Iran tensions, these have been fully reversed and that market has actually seen net inflows since the ceasefire was reached. 'With the Finance Ministry increasing its issuances, and the CBE slowing its pace of easing, yields have edged up slightly—by 40bps on average for short-end of the curve and 14bps for the longer end. When foreign participation in auctions dips, local investors typically tend to push for higher returns,' Abu Basha told Zawya. Foreign investors currently hold an estimated 25–30% of Egypt's local currency debt, according to Abu Basha. Looking ahead, tangible progress on privatization will be crucial—especially as Egypt aims to become a regular issuer in international markets, targeting $3–4 billion in annual issuance. 'While the lack of progress may not immediately impact the debt market, it's a key risk we're monitoring. Delays in asset sales could trigger a domino effect,' Gendy warned. 'Foreign investors have continued to add to their positions, and the EGP has appreciated. That seems to reflect confidence in Egypt's reserve position, especially after last year's Ras El Hekma deal as well as more recent improvement in the current account balance,' Basha said. Egypt plans to raise EGP 3.2 trillion ($65 billion) in the domestic debt market in FY 2025/26, up from EGP 2.7 trillion in the previous fiscal year, as the government seeks to refinance maturing debt and plug its fiscal deficit. (Reporting by Brinda Darasha; editing by Seban Scaria)


Zawya
6 days ago
- Business
- Zawya
Egypt's current account deficit records $13.2bln in 9 months: CBE
Arab Finance: The Egyptian economy witnessed remarkable developments during the first nine months of fiscal year (FY) 2024/2025, with current account deficit retreating by 22.6% to $13.2 billion from $17.1 billion in the same period of FY2023/2024, the Central Bank of Egypt's (CBE) data showed. However, the balance of payment (BoP) shifted from an overall surplus of $4.1 billion in the same period a year earlier to an overall deficit of $1.9 billion in the July 2024-March 2025 period. The shift was mainly due to a drop in the net inflows of the capital and financial account, registering $7.7 billion. This is compared to inflows of $20 billion in the corresponding period, which included the Ras El Hekma deal at $15 billion. Remittances of Egyptians working abroad hiked by 82.7% year-on-year (YoY) to $26.4 billion from $14.5 billion, while the investment income deficit declined by 13.4% to $12.2 billion from $14 billion. Tourism revenues jumped by 15.4% to $12.5 billion in the nine months, versus $10.9 billion. This was attributed to the pickup in the number of tourist nights to 134.3 million nights when compared to 116.4 million nights in the same period in FY2023/2024. Non-oil trade deficit increased by $4.3 billion to register $28 billion in the first nine months of FY 2024/2025, marking an annual rise from $23.7 billion. The surge was driven by a jump in the non-oil merchandise imports, which surpassed that of the non-oil merchandise exports. As for the Suez Canal activities, the transit receipts shrank by 54.1% YoY to record only $2.6 billion when compared to $5.8 billion. This was attributed to a 61.9% plunge in both the net to just 360.3 million tons, while the number of transiting vessels dropped by 44.8%. Such a drop was caused by the ongoing Red Sea tensions in maritime navigation, which forced several shipping companies to divert their shipping routes. Meanwhile, the capital and financial account registered a net inflow of $7.7 billion in the period from July 2024 to March 2025, against $20 billion a year earlier. Foreign Direct Investment (FDI) in Egypt recorded a net inflow of $9.8 billion in the first nine months of FY 2024/2025, lower than $23.7 billion in the corresponding period under the Ras El Hekma deal. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (


Daily News Egypt
7 days ago
- Business
- Daily News Egypt
Egypt's current account gap narrows, but overall BoP records deficit
Egypt's balance of payments recorded an overall deficit of $1.9bn in the first nine months of the 2024/2025 fiscal year, swinging from a $4.1bn surplus a year earlier, the central bank said on Monday. The shift was mainly driven by a drop in capital and financial account net inflows, which were recorded at $7.7bn compared with unprecedented inflows of $20bn in the corresponding period last year, which included the $15bn 'Ras El Hekma' investment deal. Despite the overall deficit, the current account deficit for the July-to-March period improved by 22.6% to $13.2bn from $17.1bn a year earlier. The improvement was heavily concentrated in the third quarter (Jan-March 2025), when the deficit narrowed by 69.3%. The improvement in the current account was supported by a surge in remittances from Egyptians working abroad, which rose 82.7% to reach $26.4 bn, compared to $14.5 bn in the same period last year. Tourism revenues also rose by 15.4% to $12.5 bn, while the investment income deficit retreated by 13.4% to $12.2 bn. However, these gains were partly offset by a sharp fall in Suez Canal receipts and widening trade deficits. Suez Canal transit receipts fell by 54.1% to just $2.6bn, down from $5.8bn, due to the ongoing Red Sea tensions that have forced several shipping companies to divert their routes. The canal's net tonnage dropped by 61.9%. The oil trade deficit widened to $10.3bn from $5.1bn, primarily due to a $4.8bn increase in oil imports to $14.5bn, driven by a surge in imports of natural gas. Oil exports declined by $430.5m to $4.2bn. The non-oil trade deficit increased to $28bn from $23.7bn, as a $10.3bn rise in non-oil merchandise imports outpaced a $6.1bn increase in non-oil exports. The rise in imports was concentrated in items such as wheat, soya beans, and car parts, while gold and ready-made clothes led the increase in exports. CAPITAL AND FINANCIAL ACCOUNT The capital and financial account registered a net inflow of $7.7bn, a significant drop from the $20bn recorded in the same period a year earlier. Foreign direct investment (FDI) in Egypt recorded a net inflow of $9.8bn, compared with $23.7bn in the corresponding period that was inflated by the Ras El Hekma deal. FDI into non-oil sectors registered a net inflow of $9.1bn, which included $4.3bn in greenfield investments or capital increases, $3.1bn in reinvested earnings, and $1.6 bn in real estate purchases by non-residents. FDI into the oil sector achieved a net inflow of $669.6 m, reversing a net outflow of $175.6m a year earlier. Portfolio investment in Egypt recorded a net inflow of only $2.1bn, compared with $14.6bn in the prior-year period.


Zawya
17-07-2025
- Business
- Zawya
Egypt: IMF expects limited EGP/USD fluctuation, closed official-parallel markets gap
Arab Finance: The Egyptian pound (EGP) to US dollar rate is expected to fluctuate within a limited range, with gaps between the official and parallel markets to remain closed, the International Monetary Fund (IMF) indicated in its latest report. Despite the increase in FX inflows due to the Ras El-Hekma deal, the IMF highlighted that high inflation differentials and widening current account deficit will likely keep generating depreciation pressures. The fund highlighted that the Central Bank of Egypt (CBE) applied a flexible exchange rate regime in March 2024, which continued to yield positive results. The CBE's policy closed the gap between the official exchange rate and the parallel market and eliminated the backlogs of unmet import demands, which boosted trading in the interbank market. The IMF noted that continuous vigilance will be necessary to ensure that this reform is consolidated further over time so that economic agents perceive the exchange rate as truly flexible. Moreover, the report underlined that the CBE did not intervene since the unification to influence the rate, except for select episodes of purchases for reserve accumulation under the program. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (


Zawya
15-07-2025
- Business
- Zawya
Egypt's Sky AD launches $1.62bln ‘Sky North' project in Ras El Hekma
Sky AD Developments, a subsidiary of UAE-based Diamond Group, has launched a new mixed-use coastal project, Sky North, in Ras El Hekma on Egypt's North Coast, with a total investment of 80 billion Egyptian pounds ($1.62 billion), the company's CEO AbdelRahman Agamy told Zawya Projects. The development spans 430 acres and will include a five-star hotel, residential units, retail zones, and a 50-acre Crystal Lagoon, Agamy said. The project will be implemented in five phases, with full delivery expected within four years. The company is targeting EGP 240 billion ($4.9 billion) in total sales revenues from the project. 'We are also planning a new development in West Cairo in the coming period,' Agamy added, without disclosing further details. Sky AD has invested EGP 99 billion ($2 billion) since 2021 and maintains a diverse portfolio of projects across the Ras El Hekma, New Administrative Capital and New Cairo. Key developments include Residence Eight, Capital Avenue, One Residence, and the Bluetree residential and commercial project in New Cairo's Golden Square. (1 US Dollar = 49.41 Egyptian Pounds) (Reporting by Eman Hamed; Additional reporting by Marwa Abo Al Majd; Editing by Anoop Menon) (