Stories In Focus
Annual urban headline inflation jumps to 12.9% in November on increased unfavorable base effects, butane gas crisis, amid loosened monetary policy
Annual urban headline inflation jumps to 12.9% in November to continue its upward trend since September 2013, data by CAPMAS showed. Annual inflation jumped to 12.9% in November from 10.5% a month earlier, while monthly inflation fell slightly to 0.9% from 1.1% a month earlier. We had expected inflation to further pick up in November from October levels, again on unfavorable base effects and as a result of an expected increase in demand as monetary policy is significantly eased. In addition, the butane gas crisis had intensified in November, which most likely led to the increase in shelter price inflation during the month.
Maximum wage law will be applied to 8,500 government employees starting January
The commission in charge of applying the minimum and maximum wage laws decided to apply the maximum wage to 8,500 government employees starting from the position of general manager in January 2014, Al-Shorouk newspaper reported. This will apply to the public sector, which includes all ministries and governorates. The decision to apply the law to the petroleum, banking, and telecom sectors is still being studied. It was also announced that EGP9 billion will be saved from the maximum wage application, which will be used to fund the increase in minimum wages.
HDBK 3Q2013 results: Consolidated earnings jump 17% y-o-y, 79% q-o-q on strong revenue growth
Housing & Development Bank (HDBK EY, Price: EGP16.37, FV: EGP14.20, Hold, P/E FY2013e: 12.7x) released 3Q2013 consolidated results. Net income for the quarter came in at EGP96 million, rising 16.8% y-o-y and 78.7% q-o-q, driven by growth in operating income, which totaled EGP320 million (+8.3% y-o-y, +45.7% q-o-q). Investment income for the quarter grew more than seven fold y-o-y and 177% q-o-q to EGP33 million while income from housing projects went down 15% y-o-y but grew a significant 133.6% q-o-q to EGP145 million. Net interest income came in at EGP113 million, losing 13.7% y-o-y and 4.3% q-o-q. Annualized NIM reached 456 bps, down from 554 bps in 3Q2012 and 502 bps in 2Q2013 and lower than the bank’s four-quarter trailing average of 536 bps. Non-interest income in 3Q2013 totaled EGP207 million, up 25.8% y-o-y and doubling (+104%) q-o-q. The bank’s cost-to-income ratio was 41.8% in 3Q2013, slightly down from 41.9% in 3Q2012 but significantly lower than 59.6% in 2Q2013. Annualized ROAA reached 1.6% and ROAE 11.4%. Gross loans in September 2013 stood at EGP6.29 billion, fairly stable y-o-y and q-o-q, while customer deposits stood at EGP8.27 billion, growing 7.5% y-o-y and 1.8% q-o-q. This implies a gross LTD ratio of 76.1%. As of the end of September 2013 the bank’s total investment in government securities reached EGP3.51 million, accounting for 14.4% of total assets. The NPL ratio was stable on an annual basis at 7.7% but inched down from 8.2% in June 2013, while provisions coverage reached 100%, unchanged y-o-y but slightly up from 96% in June 2013. The bank’s CAR in September 2013 stood at 25.1% while its Tier-1 ratio stood at 23.9%.
Telecom Egypt studying the option of resorting to international arbitration against the Algerian government
Telecom Egypt (ETEL EY, Price: EGP13.6, FV: EGP16.85, Add, PE FY2013e: 9.0x) is studying the option of resorting to international arbitration against the Algerian government to receive compensation for the fixed-line project the company established there that cost it EGP450 million, said TE CEO Mohamed El Nawawy on the sidelines of the Cairo ICT. He also added that the results of the international arbitration against Mobinil and Vodafone Egypt regarding the interconnection rates dispute is expected to materialize in 1Q2014.
Djezzy receives final approval for 3G license, awaits results of the international arbitration against Algerian government
Global Telecom’s (GLTD LI, Price: USD3.25, FV: USD4.37, Buy-Risky, PE FY2013e: 16.7x) Algerian subsidiary Djezzy has received final approval for the 3G license in Algeria last month and has also received approval for foreign transfer to pay for the needed equipment to build the network, said GTH CEO Ahmed Abo Doma. He also confirmed that they are still waiting for the result of the international arbitration against the Algerian government, which should materialize in the second half of 2014. Djezzy’s cash balance currently exceeds USD2 billion, said GTH’s IR officer Mamdouh Abd El Wahab. He also pointed out that the company’s operations in 4Q2014 will be positively affected by the 3G services that began being offered last October.
Reuters: Egypt to hold constitutional referendum mid-January, says minister of administrative development
Ahram Gate: Egypt to offer a second EGP24 billion stimulus package in January 2014
Al Mal: National Bank of Egypt (NBE) to inject an additional EGP300 million in loans to the tourism sector before year-end, bringing total to EGP1.0 billion in 2H2013; NBE to consider refinancing loans to 30 clients in sector following the extension of the CBE’s initiative to support it
Company press release: Juhayna secures EGP500 million loan from the European Bank for Reconstruction and Development (EBRD) to finance expansion of dairy and juice production facilities, upgrade logistics and distribution network
Al-Masry Al-Youm: Ganoub El Wady Holding Petroleum Company (GANOPE) to hold oil exploration auction for 16 concessions in the Gulf of Suez, Eastern Desert, and Nile Delta in 1Q2014
Al Borsa: The Minister of Housing will propose to NUCA’s BoD facilities to investors who secured sizeable land plots in new cities; NUCA’s VP said the authority will extend the development schedule on large land plots by six months to one year and restructure delayed land liabilities
Al Borsa: SODIC aims to invest EGP3.3 billion in new investments over the upcoming period, says development manager Ayman Amer
Mubasher: The Consumer Protection Agency recommends that the NTRA force the three mobile operators to return to old prices and pay back EGP500 million to their customers
Arab News: Saudi Arabia deports nearly 150,000 illegal workers since November 3 amnesty deadline, Passport Department official says
Saudi Gazette: Minister of Water and Electricity Abdullah Bin Abdulrahman Al-Hussayyen signs contracts for water and sanitation projects at a total cost of over SAR388 million
Arab News: Saudi Arabia to increase its share capital in Jeddah-based Islamic Development Bank by USD1.2 billion to USD6.85 billion; the amount is to be paid over 20 years starting 2016
Statement to Tadawul: Yanbu National Petrochemical Company’s BoD recommends 2H2013 dividend of SAR2.00/share; if approved, total DPS for 2013 will be SAR3.00
Stories In Focus
Abu Dhabi may need to lower industry growth target by 2020
Abu Dhabi may not reach its target for industrial growth by 2020 and will need to lower it, Reuters quoted Ayman al Makkawy, director-general of the emirate's new Industrial Development Bureau (IDB), as saying on Monday. The original target was for industry to contribute 19% of the economy by 2020 and 24% by 2030. At present, it accounts for 5.9%. Most of Abu Dhabi's industrial GDP comes from government-owned operations in chemicals and base metals. Several new initiatives will be rolled out to encourage private-sector industry, al Makkawy said. This includes securing approval for gas supply from the government for new projects, stimulating downstream industries, and expansion of free zones, he said.
Emarat finalizes oil products term for 2014
UAE-based fuel retailer Emirates General Petroleum Corporation (Emarat) has finalized its term contracts to buy gasoline, jet fuel, and gasoil for delivery over 2014, Reuters quoted industry sources as saying. Emarat will buy about 700,000 tons of 95-octane gasoline and 65,000 tons of 98-octane gasoline from China's oil giant PetroChina, a Gulf-based source said. This is the first time PetroChina has settled a term deal with Emarat. PetroChina will likely supply the term cargoes from leased storage in the region, the source added. Emarat's gasoline term volumes for 2014 will rise 5% from this year's contract, although its spot requirements could drop next year as the company has transferred some of its pump stations in the northern emirates to ADNOC, the sources added.
Gulf News: Total value of infrastructure projects carried out by the Department of Municipal Affairs in Abu Dhabi stands at AED30 billion, official says
Firstpost: Etihad Airways to double number of flights between Abu Dhabi and five Indian cities: Delhi, Mumbai, Hyderabad, Bengaluru and Chennai, effective immediately
Bloomberg: Emaar to launch Vida Residence at The Hills in Dubai on December 14, 2013; project to include 136 serviced apartments to be showcased in Dubai, Abu Dhabi, Riyadh, and Singapore