Source: Emirates Business 24/7 – 01 January 2009
Business confidence and risk tolerance of investors across the Middle East is likely to take a positive turn by the first quarter of 2009, feels a top official of ING Investment Management, that is planning to start raising capital for its recently-launched equities fund from February this year.
The company, which launched its first equities fund for Mena markets in November, is tapping sectors like telecom and utilities and is expecting a change in investor sentiment next year.
"From investment point of view it is the correct time to invest. We are currently using seed capital. For distribution, we would wait and begin from February, when, we believe, the perception and risk tolerance of investors would change," Farah Foustok, Chief Investment Officer, ING Investment Management, Middle East, told Emirates Business.
The company sees huge opportunity in the Middle East and Foustok said economy cycle here is different than the rest of the world. Heavy government spending in infrastructure and low public debt would help the region come out of the current phase sooner than other economies.
"Recession has affected the investor sentiment. But in Middle East, it's a different economic cycle than the rest of the world. What drives these economies is government spending unlike, say, the United States where it is consumer spending. The government plans to continue investing heavily in infrastructure. They have the power to grow and they would be spending their way through recession."
Low level of public debt is another positive that goes to the favour of markets in this region. "The ratio of debt to GDP in UAE is only 21 per cent, whereas it is 61 per cent in case of the US, and emerging markets have it at 31 per cent," she added.
From investment point of view ING unit is considering companies with a government backing, cash rich businesses and those in sectors like utilities and telecom as attractive.
The recession has changed the scenario for all including fund managers, said the investment officer.
In 2009, they will have to understand the significance of transparency and good governance.
Investors have turned very cautious, she said.
For corporates, the new year would be a year of survival and cost cutting would be the key, though that does not imply cut in jobs. "Businesses will look at survival and this means there is a room for consolidations particularly in banking sector. Consolidations would help improve balance sheets."
The company, which launched its first equities fund for Mena markets in November, is tapping sectors like telecom and utilities and is expecting a change in investor sentiment next year.
"From investment point of view it is the correct time to invest. We are currently using seed capital. For distribution, we would wait and begin from February, when, we believe, the perception and risk tolerance of investors would change," Farah Foustok, Chief Investment Officer, ING Investment Management, Middle East, told Emirates Business.
The company sees huge opportunity in the Middle East and Foustok said economy cycle here is different than the rest of the world. Heavy government spending in infrastructure and low public debt would help the region come out of the current phase sooner than other economies.
"Recession has affected the investor sentiment. But in Middle East, it's a different economic cycle than the rest of the world. What drives these economies is government spending unlike, say, the United States where it is consumer spending. The government plans to continue investing heavily in infrastructure. They have the power to grow and they would be spending their way through recession."
Low level of public debt is another positive that goes to the favour of markets in this region. "The ratio of debt to GDP in UAE is only 21 per cent, whereas it is 61 per cent in case of the US, and emerging markets have it at 31 per cent," she added.
From investment point of view ING unit is considering companies with a government backing, cash rich businesses and those in sectors like utilities and telecom as attractive.
The recession has changed the scenario for all including fund managers, said the investment officer.
In 2009, they will have to understand the significance of transparency and good governance.
Investors have turned very cautious, she said.
For corporates, the new year would be a year of survival and cost cutting would be the key, though that does not imply cut in jobs. "Businesses will look at survival and this means there is a room for consolidations particularly in banking sector. Consolidations would help improve balance sheets."
Gulf GDP to grow 2.5% in 2009
Source: Emirates Business 24/7 – 04 January 2009
The economies of the Gulf oil producers are expected to contract in nominal terms in 2009 because of lower crude prices but real gross domestic product is projected to record positive growth, according to an international analyst.
In real terms, the combined GDP of the six-nation Gulf Co-operation Council (GCC) will grow by about 2.5 per cent this year, nearly half the real growth achieved in 2008, said George Abed, Senior Advisor to the Managing Director of the Institute of International Finance (IIF).
In an interview with Emirates Business, Abed said the GCC's massive financial resources, high public spending and better investment climate would partly offset a steep decline in the hydrocarbon sector in 2009.
"Hydrocarbon real GDP for the region as a whole is expected to contract by about three per cent in 2009 as compared to a growth of 4.2 per cent in 2008," he said.
Abed's figures showed the overall GDP growth is projected at about 1.2 per cent in Saudi Arabia, 2.3 per cent in the UAE, 1.2 per cent in Kuwait, nine per cent in Qatar, and nearly five per cent in Oman and Bahrain. He said the non-oil real GDP would slow down in 2009 but is projected to remain relatively solid at about four per cent compared to six per cent in 2008.
He estimated non-hydrocarbon real growth at about 3.6 per cent in Kuwait, four per cent in Saudi Arabia, 4.2 per cent in the UAE, and about five per cent in Qatar, Oman and Bahrain. In 2008, nominal GDP jumped by nearly 30 per cent to smash through the $1-trillion mark for the first time mainly because of higher crude output, a sharp rise in oil prices and increased investments, Abed said.
In real terms, the combined GDP of the six-nation Gulf Co-operation Council (GCC) will grow by about 2.5 per cent this year, nearly half the real growth achieved in 2008, said George Abed, Senior Advisor to the Managing Director of the Institute of International Finance (IIF).
In an interview with Emirates Business, Abed said the GCC's massive financial resources, high public spending and better investment climate would partly offset a steep decline in the hydrocarbon sector in 2009.
"Hydrocarbon real GDP for the region as a whole is expected to contract by about three per cent in 2009 as compared to a growth of 4.2 per cent in 2008," he said.
Abed's figures showed the overall GDP growth is projected at about 1.2 per cent in Saudi Arabia, 2.3 per cent in the UAE, 1.2 per cent in Kuwait, nine per cent in Qatar, and nearly five per cent in Oman and Bahrain. He said the non-oil real GDP would slow down in 2009 but is projected to remain relatively solid at about four per cent compared to six per cent in 2008.
He estimated non-hydrocarbon real growth at about 3.6 per cent in Kuwait, four per cent in Saudi Arabia, 4.2 per cent in the UAE, and about five per cent in Qatar, Oman and Bahrain. In 2008, nominal GDP jumped by nearly 30 per cent to smash through the $1-trillion mark for the first time mainly because of higher crude output, a sharp rise in oil prices and increased investments, Abed said.
Mideast IPO activity dries up
Source: Reuters – 04 January 2009
Funds raised via initial public offerings in the Middle East fell sharply to just $22.4 million in October and November, compared to $6 billion in the year-ago period, due to poor investor sentiment amid the global downturn.
An Ernst & Young report issued on Sunday said only three IPOs came to market last October and November, compared to 10 in the same period in 2007.
The region did raise $13.4 billion through 55 IPOs from January to November, up 4.6 percent from the $12.8 billion generated for all of 2007, according to the report.
'Issuers are not willing to accept current market valuations and therefore scheduled IPOs coming to the markets are being delayed,' Phil Gandier, partner at Ernst & Young Middle East said in the report.
Saudi Arabia, the UAE and Egypt were the top three markets for IPOs in 2008, accounting for 78 percent, 10.3 percent and 4.7 percent respectively.
Gandier said it was difficult to predict when IPO activity would recover. 'Regional capital markets need to stabilise in order to re-build confidence and in order for IPO opportunities to re-emerge.'
During the first 11 months of 2008, 745 IPOs around the world raised $95.4 billion, compared with 1,790 IPOs over the same period in 2007 which raised $256.9 billion, the report said.
An Ernst & Young report issued on Sunday said only three IPOs came to market last October and November, compared to 10 in the same period in 2007.
The region did raise $13.4 billion through 55 IPOs from January to November, up 4.6 percent from the $12.8 billion generated for all of 2007, according to the report.
'Issuers are not willing to accept current market valuations and therefore scheduled IPOs coming to the markets are being delayed,' Phil Gandier, partner at Ernst & Young Middle East said in the report.
Saudi Arabia, the UAE and Egypt were the top three markets for IPOs in 2008, accounting for 78 percent, 10.3 percent and 4.7 percent respectively.
Gandier said it was difficult to predict when IPO activity would recover. 'Regional capital markets need to stabilise in order to re-build confidence and in order for IPO opportunities to re-emerge.'
During the first 11 months of 2008, 745 IPOs around the world raised $95.4 billion, compared with 1,790 IPOs over the same period in 2007 which raised $256.9 billion, the report said.
Gulf bourses fall ahead of Q4 results
Source: Kuwait Times – 12 January 2009
Most Gulf Arab stock markets fell yesterday in thin trading as investors awaited the release of expected weak company results, while falling oil prices clouded investor sentiment further.
Kuwait and Oman were the biggest losers both falling 1.39 percent. "People had high expectations about the government fund and nothing has happened," said Talal al-Loghani, portfolio manager, GCC, at Noor Finanical Investment Co in Kuwait. "We've seen dramatically low volumes today." Markets in the United Arab Emirates and Bahrain closed higher with Dubai rising by over 1 percent.
The announcement by the Dubai government to increase spending is definitely positive however, sentiment continues to be fragile in the market," said Rami Sidani, head of investment for MENA at Schroders. Dubai plans to raise spending 11 percent, despite facing its first budget deficit, a senior policy maker said on Saturday.
Egyptian indexes bounce at end of dismal year
Daily News Egypt
Egyptian stock markets gained ground for a second straight day on Wednesday, as foreign and local investors bought blue chip firms that appear cheap after being pummelled for most of the year, traders said.
The benchmark CASE 30 index ended the day 2.43 percent higher at 4,596.49 points, but shed 56.4 percent of its value in 2008, with many of its blue chip firms taking significant hits in the wake of the global financial crisis.
"It's a cheap market, and the international financial crisis is not directly affecting it... This is pushing investors to return to buying into the Egyptian market," said Mohamed Kotb, director of asset management at Naeem Brokerage.
Kotb added that an influx of foreign investors helped the index breach a key resistance level at 4,500 points.
Egyptian stocks received a battering this year, as foreign investors withdrew funds needed elsewhere in their portfolios.
Orascom Construction Industries (OCI) lost 55.6 percent of its value in the year, while fellow heavyweight Orascom Telecom (OT) fell 67.5 percent.
The two firms provided impetus to index gains on the last day of 2008, with OCI gaining 3.7 percent to LE 138.99 ($25.21) and OT adding 1 percent to end at LE 29.70.
Commercial International Bank was another notable gainer, up 2.66 percent to LE 37, in what was otherwise a flat market.
One trader said it was not unusual for the Egyptian market to receive an end-of-year boost.
It is not an indicator that we are going to keep going up," the trader said. "We are still the cheapest market in region, but there is still not much appetite."
The rival Hermes index .HRMS ended 1.91 percent higher at 427.18 points, while the broader CIBC index was 0.42 percent higher at 285.5 points.
The benchmark CASE 30 index ended the day 2.43 percent higher at 4,596.49 points, but shed 56.4 percent of its value in 2008, with many of its blue chip firms taking significant hits in the wake of the global financial crisis.
"It's a cheap market, and the international financial crisis is not directly affecting it... This is pushing investors to return to buying into the Egyptian market," said Mohamed Kotb, director of asset management at Naeem Brokerage.
Kotb added that an influx of foreign investors helped the index breach a key resistance level at 4,500 points.
Egyptian stocks received a battering this year, as foreign investors withdrew funds needed elsewhere in their portfolios.
Orascom Construction Industries (OCI) lost 55.6 percent of its value in the year, while fellow heavyweight Orascom Telecom (OT) fell 67.5 percent.
The two firms provided impetus to index gains on the last day of 2008, with OCI gaining 3.7 percent to LE 138.99 ($25.21) and OT adding 1 percent to end at LE 29.70.
Commercial International Bank was another notable gainer, up 2.66 percent to LE 37, in what was otherwise a flat market.
One trader said it was not unusual for the Egyptian market to receive an end-of-year boost.
It is not an indicator that we are going to keep going up," the trader said. "We are still the cheapest market in region, but there is still not much appetite."
The rival Hermes index .HRMS ended 1.91 percent higher at 427.18 points, while the broader CIBC index was 0.42 percent higher at 285.5 points.
Egypt Ratings Affirmed At FC 'BB+/B', LC 'BBB-/A-3' Despite Weakening External Demand
Source: Zawya – 30 December 2008
Standard & Poor's Ratings Services today affirmed its 'BB+/B' foreign currency and 'BBB-/A-3' local currency sovereign credit ratings on the Arab Republic of Egypt. The outlook on the ratings is stable.
As inflationary pressures ease, the sharp deterioration in external demand now poses the principal threat to Egypt's creditworthiness. Standard & Poor's expects economic growth to fall to around 5.5% in fiscal 2009 (ending June 30, 2009) and 4.4% in fiscal 2010, from an average of 7% in the past three years, because of a slowdown in tourist arrivals, static workers' remittances, and weakening demand for manufacturing exports.
Slower growth will, in turn, put pressure on public finances and we expect the general government deficit to widen slightly to 7.9% of GDP in fiscal 2009. We also expect Egypt's external position to weaken. Compounded by a fall in traffic passing through the Suez Canal, we believe the current account will register a deficit of 2% of GDP in fiscal 2009, widening to 3.4% in fiscal 2010, following years of surpluses. Inward foreign direct investment will likely decline (albeit from a strong 8% of GDP in fiscal 2008) while substantial net outflows from the debt and equity markets have already occurred.
However, Egypt is better placed to weather external shocks than it was before the cabinet, installed in mid-2004, launched its program of fiscal reform, banking sector consolidation and privatization, and the central bank simultaneously embarked on an overhaul of monetary policy. Though public finances remain weak, gross debt-to-GDP has maintained a steady downward trajectory, to 71% at end-fiscal 2008 from 105% in 2005. On the external side, the substantial build-up of central bank reserves and other foreign currency assets gives the monetary authorities greater capacity to mitigate the shock of falling external demand.
Strengthening institutional capacity along with improved credibility should allow the central bank to employ greater flexibility in managing the exchange rate. The exposure of the banking sector to the global financial crisis is limited, with external liabilities low and a loan-deposit ratio of just 54%. Crucially, the cabinet has built up considerable credibility and momentum since 2004, leaving Egypt relatively well placed to attract investment once external conditions improve.
However, the government will be reticent to see growth fall too sharply, because of the social impact. Consequently, the deeper and longer lasting the external slowdown, the more difficult it will be for the authorities to maintain reform momentum and prevent a more substantial reversal in the trend of fiscal consolidation.
The stable outlook reflects our belief that the Egyptian government will meet the challenge of weakening external demand without a substantial deterioration of public finances or veering from its commitment to economic reform. The outlook also reflects the improving credibility of the central bank and declining inflation which together should allow the authorities to dampen the impact of the external shock through employing greater exchange rate flexibility.
The ratings could come under pressure if fiscal discipline and commitment to reform weaken in the face of the slowdown in external demand. A disorderly process of presidential succession would also bring downward pressure on the ratings. The ratings could be raised over the longer term if the government demonstrates its ability to deliver on its target of steady reduction in the fiscal deficit, pays down the heavy debt burden, and maintains structural reform momentum.
Egypt's markets rise again on the back of OCI, OT
Source: Daily News Egypt – 04 January 2009
Egypt's main stock indexes advanced on Sunday, extending gains from the last days of 2008 as heavyweights Orascom Construction and Orascom Telecom were again buoyed by positive retail sentiment, traders said.
Orascom Construction Industries (OCI) made strong gains for the third straight trading day, ending 3.66 percent higher at LE 145.50 ($26.41).
Orascom Telecom (OT) also continued to rise significantly, up 4.43 percent to LE 31.81.
Local investors dominated trade, with 95 percent of all transactions. They were net buyers to the tune of LE 9 million, according to stock exchange data.
"All of the institutional and retail investors are building new positions," said Wafik Dawood from Naeem Brokerage. "The margins for all the brokerages were opened again today.
Dawood said volumes were unexceptional, but positive sentiment was in the ascendant.
"So far there is a positive sentiment among the retail investors. Institutions are still skeptical," he said.
The benchmark CASE 30 index gained 2.48 percent to 4,710.38 points, while the rival Hermes index added 2.13 percent and the broader CIBC index rose 2.77 percent to 293.4 points.
OCI bought two million of its own shares between Dec. 28 and 31, while OT purchased 23.6 million of its shares in the same period, the stock exchange said in a statement.
The OT purchase accounts for around 2.3 percent of all its shares. The OCI purchase is less than 1 percent of its equity.
Other firms to gain in decent volumes included Commercial International Bank, up 1.88 percent to LE 37.90, and Talaat Moustafa, which gained 2.29 percent to LE 3.13.
As inflationary pressures ease, the sharp deterioration in external demand now poses the principal threat to Egypt's creditworthiness. Standard & Poor's expects economic growth to fall to around 5.5% in fiscal 2009 (ending June 30, 2009) and 4.4% in fiscal 2010, from an average of 7% in the past three years, because of a slowdown in tourist arrivals, static workers' remittances, and weakening demand for manufacturing exports.
Slower growth will, in turn, put pressure on public finances and we expect the general government deficit to widen slightly to 7.9% of GDP in fiscal 2009. We also expect Egypt's external position to weaken. Compounded by a fall in traffic passing through the Suez Canal, we believe the current account will register a deficit of 2% of GDP in fiscal 2009, widening to 3.4% in fiscal 2010, following years of surpluses. Inward foreign direct investment will likely decline (albeit from a strong 8% of GDP in fiscal 2008) while substantial net outflows from the debt and equity markets have already occurred.
However, Egypt is better placed to weather external shocks than it was before the cabinet, installed in mid-2004, launched its program of fiscal reform, banking sector consolidation and privatization, and the central bank simultaneously embarked on an overhaul of monetary policy. Though public finances remain weak, gross debt-to-GDP has maintained a steady downward trajectory, to 71% at end-fiscal 2008 from 105% in 2005. On the external side, the substantial build-up of central bank reserves and other foreign currency assets gives the monetary authorities greater capacity to mitigate the shock of falling external demand.
Strengthening institutional capacity along with improved credibility should allow the central bank to employ greater flexibility in managing the exchange rate. The exposure of the banking sector to the global financial crisis is limited, with external liabilities low and a loan-deposit ratio of just 54%. Crucially, the cabinet has built up considerable credibility and momentum since 2004, leaving Egypt relatively well placed to attract investment once external conditions improve.
However, the government will be reticent to see growth fall too sharply, because of the social impact. Consequently, the deeper and longer lasting the external slowdown, the more difficult it will be for the authorities to maintain reform momentum and prevent a more substantial reversal in the trend of fiscal consolidation.
The stable outlook reflects our belief that the Egyptian government will meet the challenge of weakening external demand without a substantial deterioration of public finances or veering from its commitment to economic reform. The outlook also reflects the improving credibility of the central bank and declining inflation which together should allow the authorities to dampen the impact of the external shock through employing greater exchange rate flexibility.
The ratings could come under pressure if fiscal discipline and commitment to reform weaken in the face of the slowdown in external demand. A disorderly process of presidential succession would also bring downward pressure on the ratings. The ratings could be raised over the longer term if the government demonstrates its ability to deliver on its target of steady reduction in the fiscal deficit, pays down the heavy debt burden, and maintains structural reform momentum.
Egypt's markets rise again on the back of OCI, OT
Source: Daily News Egypt – 04 January 2009
Egypt's main stock indexes advanced on Sunday, extending gains from the last days of 2008 as heavyweights Orascom Construction and Orascom Telecom were again buoyed by positive retail sentiment, traders said.
Orascom Construction Industries (OCI) made strong gains for the third straight trading day, ending 3.66 percent higher at LE 145.50 ($26.41).
Orascom Telecom (OT) also continued to rise significantly, up 4.43 percent to LE 31.81.
Local investors dominated trade, with 95 percent of all transactions. They were net buyers to the tune of LE 9 million, according to stock exchange data.
"All of the institutional and retail investors are building new positions," said Wafik Dawood from Naeem Brokerage. "The margins for all the brokerages were opened again today.
Dawood said volumes were unexceptional, but positive sentiment was in the ascendant.
"So far there is a positive sentiment among the retail investors. Institutions are still skeptical," he said.
The benchmark CASE 30 index gained 2.48 percent to 4,710.38 points, while the rival Hermes index added 2.13 percent and the broader CIBC index rose 2.77 percent to 293.4 points.
OCI bought two million of its own shares between Dec. 28 and 31, while OT purchased 23.6 million of its shares in the same period, the stock exchange said in a statement.
The OT purchase accounts for around 2.3 percent of all its shares. The OCI purchase is less than 1 percent of its equity.
Other firms to gain in decent volumes included Commercial International Bank, up 1.88 percent to LE 37.90, and Talaat Moustafa, which gained 2.29 percent to LE 3.13.
Hermes is to establish mutual funds to invest in the telecom sector
Source: Daily News Egypt – 05 January 2009
The financial brokerage group in cooperation with the Egyptian Financial Group-Hermes Holding Company has decided to establish El-Barq mutual fund to invest in the telecommunications sector as it is the least affected by the financial crisis.
Many financial institutions have set up mutual funds to invest in the telecommunications sector in the Arab markets with expectations of growth propelled by increasing demand for mobile phones.
Wael Ziada, research manager of the Hermes Financial Group, said that the communications sector is one of the best sectors in the market and the least affected by the current financial crisis with the expectation of continued increase in the rates of growth, despite the economic slowdown, and expected profits of companies operating in the sector.
He also praised the establishment of mutual funds to increase investment in the telecom sector as it is a safe investment with a high volume of flows as well as cash distributions. He pointed out that it is extremely difficult to find such features available in any of the other sectors. And he expected the financial institutions to opt to establishing funds in the low- risk sectors as they represent a safe choice and an attractive opportunity.
Many financial institutions have set up mutual funds to invest in the telecommunications sector in the Arab markets with expectations of growth propelled by increasing demand for mobile phones.
Wael Ziada, research manager of the Hermes Financial Group, said that the communications sector is one of the best sectors in the market and the least affected by the current financial crisis with the expectation of continued increase in the rates of growth, despite the economic slowdown, and expected profits of companies operating in the sector.
He also praised the establishment of mutual funds to increase investment in the telecom sector as it is a safe investment with a high volume of flows as well as cash distributions. He pointed out that it is extremely difficult to find such features available in any of the other sectors. And he expected the financial institutions to opt to establishing funds in the low- risk sectors as they represent a safe choice and an attractive opportunity.
Plans to bring Proton assembly plant to Egypt underway, says minister
Source: Daily News Egypt – 07 January 2009
Proton is eyeing an Egyptian partner to establish a car assembly line.
Malaysia’s Proton auto brand may soon get labeled “Made in Egypt” after Egypt’s trade minister said company executives were mulling over establishing a car assembly plant in Egypt.
“Company officials are keen on investing in Egypt’s automotive and feeder industries, and a large delegation will visit Egypt in March to discuss means of cooperation,” said Rachid Mohamed Rachid, Egypt’s minister of Trade and Industry during his three-day visit to Malaysia, which ended Wednesday.
Rachid, who met with executives from Malaysia’s national carmaker Proton Holdings, said the company was eyeing an Egyptian partner to establish a car assembly line as well as develop an Egyptian state-run auto company to manufacture Proton cars in Egypt.
“I understand that they have in mind one or two possibilities [as part of the entry strategy] and that will be announced in the next few weeks,” he added.
In December, Proton first unveiled plans to assemble its cars in Egypt to tap its growing consumer market. The company, which operates in vehicle manufacturing, assembling, trading, and engineering, first launched Waja and Wira models in Egypt in 2001 and later brought in the Gen.2 hatchback in 2006. It has sold more than 5,000 cars in Egypt so far, according to Malaysian reports.
As of last September, Malaysia’s investment in Egypt leapt to $175 million.
“Countries like Egypt have an organically sustainable demand, which has even surged following a strong economic recovery that boosted consumer confidence levels and created a recent consumer boom,” pointed out Menatallah Sadek, consumer goods analyst at investment bank Beltone Financial, in a research note.
She explained that even if the project is “temporarily put on hold due to the scenario of a global slowdown,” it will remain on the long-term agenda.
Rachid also said that Proton executives showed interest in the ministry’s initiative to establish an auto feeder industrial zone in Egypt. The minister visited last Monday the Malaysian capital where he held trade and investment talks with the Malaysian prime minister, ministers of international trade and industry as well as domestic trade and works.
“In light of the current international economic crisis, it is becoming clear that growth over the coming 12 months will come from the emerging markets,” Rachid said in a press statement. “I believe that countries like Egypt and Malaysia have the potential of walking away from the current economic crisis with positive results. That is why it is important for us to work together to strengthen our trade and investments.”
Based on ministry records, bilateral trade surged to $585.1 million in 2007, up from $398 million in 2006. In the first nine months of 2008, bilateral trade stood at $572 million.
Egypt’s exports to Malaysia, which include crude fertilizers, minerals, and inorganic chemicals, almost doubled in 2007 to $88.9 million from 49.6 million a year earlier. In the period from January to September 2008, exports hit $92.1 million.
Meanwhile, imports from Malaysia grew to $496.2 million in 2007 up from $348.4 million in 2006. From January to September 2008 imports recorded $479.9 million. Egypt mainly imports processed oils, industrial machinery, wood, as well as textile yarn and fabric from Malaysia. Egypt is Malaysia’s second largest trading partner among African countries.
“There is an opportunity for us to really push bilateral trade as well as investment to a new level,” Rachid told reporters in Kuala Lumpur, explaining that trade agreements signed between both countries could further boost trade.
“Egypt could act as a gateway for countries in Africa and the Middle East. … Malaysia could give Egyptian products access to other markets in Asia. So the potential is huge.”
The two countries announced the formation of a Malaysia-Egypt Joint Trade and Investment Committee (JTIC) to promote trade, investment and economic cooperation.
Rachid said Malaysian companies had a big opportunity to participate in Egyptian projects, especially those related to infrastructure.
“One of the new areas of bilateral cooperation between our countries is through public-private projects, of which Malaysia is a leading country,” he explained.
He said Egypt is opening up its infrastructure sector to public-private arrangements, including roads, airports, ports, as well as utilities like water, sewerage and electricity.
Egypt announced an LE 15 billion ($2.73 billion) economic stimulus package for the 2008/09 fiscal year ending June 2009, out of which a big portion will be spent on infrastructure projects.
Rachid said this money would be spent by June and the government would assess the economic situation in April to decide if further measures were needed for the second half of 2009.
Malaysia’s investment in Egypt amounted to $60.6 million in 2007 up from $16.9 million in the preceding year, mostly in manufacturing and mining industries.
“We see the Egyptian market as being very well positioned to benefit from consumer demand upon its recovery from the global crisis and hedged by the export potential as it emerges as a ‘manufacturing hub’ for the region,” Sadek explained.
“Egypt’s low labor costs, various free trade agreements, and its geographical location support this new trend which we believe will be revolutionary for Egyptian industries.”
Egyptian investments in Malaysia as of last November totaled $6.19 million in six approved projects in the manufacturing sector, namely plywood, wooden furniture, and giftware.
Malaysia’s Proton auto brand may soon get labeled “Made in Egypt” after Egypt’s trade minister said company executives were mulling over establishing a car assembly plant in Egypt.
“Company officials are keen on investing in Egypt’s automotive and feeder industries, and a large delegation will visit Egypt in March to discuss means of cooperation,” said Rachid Mohamed Rachid, Egypt’s minister of Trade and Industry during his three-day visit to Malaysia, which ended Wednesday.
Rachid, who met with executives from Malaysia’s national carmaker Proton Holdings, said the company was eyeing an Egyptian partner to establish a car assembly line as well as develop an Egyptian state-run auto company to manufacture Proton cars in Egypt.
“I understand that they have in mind one or two possibilities [as part of the entry strategy] and that will be announced in the next few weeks,” he added.
In December, Proton first unveiled plans to assemble its cars in Egypt to tap its growing consumer market. The company, which operates in vehicle manufacturing, assembling, trading, and engineering, first launched Waja and Wira models in Egypt in 2001 and later brought in the Gen.2 hatchback in 2006. It has sold more than 5,000 cars in Egypt so far, according to Malaysian reports.
As of last September, Malaysia’s investment in Egypt leapt to $175 million.
“Countries like Egypt have an organically sustainable demand, which has even surged following a strong economic recovery that boosted consumer confidence levels and created a recent consumer boom,” pointed out Menatallah Sadek, consumer goods analyst at investment bank Beltone Financial, in a research note.
She explained that even if the project is “temporarily put on hold due to the scenario of a global slowdown,” it will remain on the long-term agenda.
Rachid also said that Proton executives showed interest in the ministry’s initiative to establish an auto feeder industrial zone in Egypt. The minister visited last Monday the Malaysian capital where he held trade and investment talks with the Malaysian prime minister, ministers of international trade and industry as well as domestic trade and works.
“In light of the current international economic crisis, it is becoming clear that growth over the coming 12 months will come from the emerging markets,” Rachid said in a press statement. “I believe that countries like Egypt and Malaysia have the potential of walking away from the current economic crisis with positive results. That is why it is important for us to work together to strengthen our trade and investments.”
Based on ministry records, bilateral trade surged to $585.1 million in 2007, up from $398 million in 2006. In the first nine months of 2008, bilateral trade stood at $572 million.
Egypt’s exports to Malaysia, which include crude fertilizers, minerals, and inorganic chemicals, almost doubled in 2007 to $88.9 million from 49.6 million a year earlier. In the period from January to September 2008, exports hit $92.1 million.
Meanwhile, imports from Malaysia grew to $496.2 million in 2007 up from $348.4 million in 2006. From January to September 2008 imports recorded $479.9 million. Egypt mainly imports processed oils, industrial machinery, wood, as well as textile yarn and fabric from Malaysia. Egypt is Malaysia’s second largest trading partner among African countries.
“There is an opportunity for us to really push bilateral trade as well as investment to a new level,” Rachid told reporters in Kuala Lumpur, explaining that trade agreements signed between both countries could further boost trade.
“Egypt could act as a gateway for countries in Africa and the Middle East. … Malaysia could give Egyptian products access to other markets in Asia. So the potential is huge.”
The two countries announced the formation of a Malaysia-Egypt Joint Trade and Investment Committee (JTIC) to promote trade, investment and economic cooperation.
Rachid said Malaysian companies had a big opportunity to participate in Egyptian projects, especially those related to infrastructure.
“One of the new areas of bilateral cooperation between our countries is through public-private projects, of which Malaysia is a leading country,” he explained.
He said Egypt is opening up its infrastructure sector to public-private arrangements, including roads, airports, ports, as well as utilities like water, sewerage and electricity.
Egypt announced an LE 15 billion ($2.73 billion) economic stimulus package for the 2008/09 fiscal year ending June 2009, out of which a big portion will be spent on infrastructure projects.
Rachid said this money would be spent by June and the government would assess the economic situation in April to decide if further measures were needed for the second half of 2009.
Malaysia’s investment in Egypt amounted to $60.6 million in 2007 up from $16.9 million in the preceding year, mostly in manufacturing and mining industries.
“We see the Egyptian market as being very well positioned to benefit from consumer demand upon its recovery from the global crisis and hedged by the export potential as it emerges as a ‘manufacturing hub’ for the region,” Sadek explained.
“Egypt’s low labor costs, various free trade agreements, and its geographical location support this new trend which we believe will be revolutionary for Egyptian industries.”
Egyptian investments in Malaysia as of last November totaled $6.19 million in six approved projects in the manufacturing sector, namely plywood, wooden furniture, and giftware.
Inflation slips to 18 pct
Source: Daily News Egypt – 11 January 2009
Egypt's urban inflation fell to 18.3 percent in December 2008 from 20.3 percent in November 2008 on the back of the drop in global commodity prices, according to an official statement on the Egyptian Stock Exchange.
Meanwhile, net foreign reserves reached $34.1 billion in December 2008, declining 0.9 percent from $34.41 billion in November 2008 and increasing by 7.7 percent compared to December 2007, the stock exchange website reported.
Meanwhile, net foreign reserves reached $34.1 billion in December 2008, declining 0.9 percent from $34.41 billion in November 2008 and increasing by 7.7 percent compared to December 2007, the stock exchange website reported.
Libya to invest $6 bln in oil facilities
Source: Bloomberg – 13 January 2009
Egypt and Libya will jointly invest $6 billion in a new refinery, expanding another and building 500 gas stations, the Egyptian Oil Ministry said in a statement on its website today.
Ali Al Shamekh, chairman of Libya Oil Holdings Ltd, a unit of the Libyan Investment Authority, met Egyptian Oil Minister Sameh Fahmy on Monday to discuss details of the plan, the statement said.
The new refinery will be able to process 250,000 barrels of oil a day, according to the ministry.
Libya also agreed to set up a new facility in the Assiut Petroleum Refining Co., one of Egypt’s nine existing refineries, to produce lighter crude products out of fuel oil.
Egypt has the largest refining industry in Africa with nine refineries that have a combined crude processing capacity of 726,000 barrels a day.
Ali Al Shamekh, chairman of Libya Oil Holdings Ltd, a unit of the Libyan Investment Authority, met Egyptian Oil Minister Sameh Fahmy on Monday to discuss details of the plan, the statement said.
The new refinery will be able to process 250,000 barrels of oil a day, according to the ministry.
Libya also agreed to set up a new facility in the Assiut Petroleum Refining Co., one of Egypt’s nine existing refineries, to produce lighter crude products out of fuel oil.
Egypt has the largest refining industry in Africa with nine refineries that have a combined crude processing capacity of 726,000 barrels a day.
Pioneers says cancels deal to buy brokerage
Source: Reuters – 13 January 2009
Egyptian investment bank Pioneers Holding said on Tuesday it has called off a deal to buy a stake in Egyptian Securities Brokerage and was studying other options.
The investment bank said in a statement the deal was cancelled after Egyptian Securities refused to transfer the management right to Pioneers Holding and sell it at least a 75 percent stake instead of 50 percent as agreed in October.
Pioneers Holding operates in Egypt, Saudi Arabia, the United Arab Emirates and Syria.
The investment bank said in a statement the deal was cancelled after Egyptian Securities refused to transfer the management right to Pioneers Holding and sell it at least a 75 percent stake instead of 50 percent as agreed in October.
Pioneers Holding operates in Egypt, Saudi Arabia, the United Arab Emirates and Syria.
Growth forecast cut to below 5.2 %
Source: The Egyptian Gazette – 14 January 2009
Egypt has trimmed its forecast for economic growth to below an annualised 5.2 per cent in the first six months of 2009, the Minister of Trade and Industry Rashid Mohamed Rashid,
Rashid said growth would fall below "previous expectations of 5.2 per cent" due to "sudden variables".All Egyptian business linked to foreign countries, such as tourism and investment, have been affected by the crisis more directly and rapidly than was expected, he added.
Rashid said growth would fall below "previous expectations of 5.2 per cent" due to "sudden variables".All Egyptian business linked to foreign countries, such as tourism and investment, have been affected by the crisis more directly and rapidly than was expected, he added.
Apache makes three ‘highly productive’ discoveries in Western Desert
Source: Daily News Egypt – 15 January 2009
The Apache Corporation, Egypt’s third-largest producer of hydrocarbons, on Wednesday announced it has discovered and tested three new oil and gas fields in the Western Desert, one of which is marked by unusually high oil productivity.
While it is too soon to say how much oil and gas these fields will turn out over their lifetimes, test drilling completed in late December suggested they could yield nearly 80 million cubic feet of natural gas and over 5,000 barrels of oil per day once operational, said the company’s executive vice president and general manager Rod Eichler.
Testing on one of the new fields, dubbed the Sultan 3X, suggested it could produce 5,021 barrels of oil and 11 million cubic feet of gas per day, according to a company statement.
The Ministry of Petroleum has granted a 25-year development lease for drilling this field, Eichler told Daily News Egypt.
The other two fields, known as Adam and Maggie, are both gas-condensate discoveries located on the firm’s existing Matruh development, north of the Sultan field. Company testing on both fields suggested that Adam will produce 28.5 million cubic feet of natural gas per day, and that Maggie will yield 40 million cubic feet of natural gas and 884 barrels of condensate per day.
Such rates of natural gas production are normal for the area, Eichler said, but the Sultan field showed an unusual abundance of oil.
“We were surprised with the oil productivity of this well,” he said. “With 1,000 barrels per day, I’d say, ‘Okay, that’s typical.’ But 5,000 barrels — that’s a significant rate out here.”
The company expects the Sultan field to begin production in February. The gas fields, however, will take longer, as they must be linked to the company’s natural gas facilities. They are expected to start by the end of the year, Eichler said.
Apache’s involvement in Egypt began in 1994, when it purchased a quarter of the Qarun concession in the Western Desert. Under state guidelines, the company works mostly through joint ventures with the Egyptian government, represented by the Egyptian General Petroleum Company, pumping about 116,000 barrels of oil and 520 million cubic feet of gas per day.
In 2007, Egypt contributed about 18 percent of Apache’s total production and accounted for 12 percent of its roughly 2.445 billion barrels of proved reserves, according to company documents. About 20 percent of the company’s over $9.9 billion in revenues that year came from Egypt.
The company also works in the United States, Canada, Australia, Argentina and in the United Kingdom’s North Sea.
In Egypt, revenues are divided about evenly between oil and gas. “They’re about fifty-fifty,” Eichler said.
While it is too soon to say how much oil and gas these fields will turn out over their lifetimes, test drilling completed in late December suggested they could yield nearly 80 million cubic feet of natural gas and over 5,000 barrels of oil per day once operational, said the company’s executive vice president and general manager Rod Eichler.
Testing on one of the new fields, dubbed the Sultan 3X, suggested it could produce 5,021 barrels of oil and 11 million cubic feet of gas per day, according to a company statement.
The Ministry of Petroleum has granted a 25-year development lease for drilling this field, Eichler told Daily News Egypt.
The other two fields, known as Adam and Maggie, are both gas-condensate discoveries located on the firm’s existing Matruh development, north of the Sultan field. Company testing on both fields suggested that Adam will produce 28.5 million cubic feet of natural gas per day, and that Maggie will yield 40 million cubic feet of natural gas and 884 barrels of condensate per day.
Such rates of natural gas production are normal for the area, Eichler said, but the Sultan field showed an unusual abundance of oil.
“We were surprised with the oil productivity of this well,” he said. “With 1,000 barrels per day, I’d say, ‘Okay, that’s typical.’ But 5,000 barrels — that’s a significant rate out here.”
The company expects the Sultan field to begin production in February. The gas fields, however, will take longer, as they must be linked to the company’s natural gas facilities. They are expected to start by the end of the year, Eichler said.
Apache’s involvement in Egypt began in 1994, when it purchased a quarter of the Qarun concession in the Western Desert. Under state guidelines, the company works mostly through joint ventures with the Egyptian government, represented by the Egyptian General Petroleum Company, pumping about 116,000 barrels of oil and 520 million cubic feet of gas per day.
In 2007, Egypt contributed about 18 percent of Apache’s total production and accounted for 12 percent of its roughly 2.445 billion barrels of proved reserves, according to company documents. About 20 percent of the company’s over $9.9 billion in revenues that year came from Egypt.
The company also works in the United States, Canada, Australia, Argentina and in the United Kingdom’s North Sea.
In Egypt, revenues are divided about evenly between oil and gas. “They’re about fifty-fifty,” Eichler said.
Circle Oil strikes oil in Egypt concession
Source: Daily News Egypt – 15 January 2009
United Kingdom-based Circle Oil says it has struck oil at one of its appraisal wells near the Gulf of Suez Basin. Circle said Thursday the onshore well in the North West Gemsa Concession, located about 300 KM southeast of Cairo, tested at an average of 5,785 barrels of oil per day and 7.8 million standard cubic feet per day of natural gas.
An assessment of the reserves has yet to be completed.
The find was Circle’s fifth in the last six wells drilled in the concession, in which it has a 40 percent stake. Operator Vegas Oil and Gas has a 50 percent stake while Premier Oil holds the remaining 10 percent.
Circle also has operations in Morocco, Namibia, Oman and Tunisia.
An assessment of the reserves has yet to be completed.
The find was Circle’s fifth in the last six wells drilled in the concession, in which it has a 40 percent stake. Operator Vegas Oil and Gas has a 50 percent stake while Premier Oil holds the remaining 10 percent.
Circle also has operations in Morocco, Namibia, Oman and Tunisia.
Edison says could sell part of Egypt gas field
Source: Daily News Egypt – 15 January 2009
Italy's second biggest power producer Edison SpA may sell a 25 percent stake in an Egyptian gas field, the company's chief executive said on Thursday.
Umberto Quadrino also said a 10 percent stake of Edison itself could be sold, confirming speculation that the company, jointly controlled by A2A and France's EDF, could be reorganized.
Edison shares rose this week on speculation financier Romain Zaleski may sell his stake to A2A or to both A2A and EDF.
"There is a chance that a 10 percent stake may be for sale in the near future and I don't see any problem to find buyers for this," Quadrino said, without giving any further details.
Quadrino said there had been discussions about selling a 25 percent stake in the offshore Abu Qir gas field, which Edison agreed to buy last year for $1.405 billion.
"If the price is good and it makes sense, why not?" he said. "No decision has been taken at this moment."
Quadrino said EDF was among parties that may be interested in buying the stake in Abu Qir, without giving details.
Edison has said the concession produces around 1.5 billion bcm of gas per year and 1.5 million barrels of oil, with a 20-year duration which could be extended another 10 years.
Umberto Quadrino also said a 10 percent stake of Edison itself could be sold, confirming speculation that the company, jointly controlled by A2A and France's EDF, could be reorganized.
Edison shares rose this week on speculation financier Romain Zaleski may sell his stake to A2A or to both A2A and EDF.
"There is a chance that a 10 percent stake may be for sale in the near future and I don't see any problem to find buyers for this," Quadrino said, without giving any further details.
Quadrino said there had been discussions about selling a 25 percent stake in the offshore Abu Qir gas field, which Edison agreed to buy last year for $1.405 billion.
"If the price is good and it makes sense, why not?" he said. "No decision has been taken at this moment."
Quadrino said EDF was among parties that may be interested in buying the stake in Abu Qir, without giving details.
Edison has said the concession produces around 1.5 billion bcm of gas per year and 1.5 million barrels of oil, with a 20-year duration which could be extended another 10 years.
China to boost investments in Egypt
Source: Daily News Egypt – 15 January 2009
China is planning to boost its investments in Egypt especially in the economic zone located Northwest Gulf of Suez where it will invest a total of $60 million through its Chinese-African fund established in 2007, reported Al-Masry Al-Youm.
The investment will go towards establishing a joint venture between Tida Egypt and the Chinese Fund to provide consulting services regarding agriculture, energy as well as telecommunications and infrastructure projects.
Furthermore, Tida Egypt has already secured financing from the Chinese government to construct a low-income housing compound in Ain Sokhna for the Suez workforce, reported Al-Masry Al-Youm.
Investment Minister Mahmoud Mohieldin met with Li Zhao, vice chairman of the International Cooperation Agency at the Chinese Ministry of Trade, to discuss investments in infrastructure projects in the area.
The investment will go towards establishing a joint venture between Tida Egypt and the Chinese Fund to provide consulting services regarding agriculture, energy as well as telecommunications and infrastructure projects.
Furthermore, Tida Egypt has already secured financing from the Chinese government to construct a low-income housing compound in Ain Sokhna for the Suez workforce, reported Al-Masry Al-Youm.
Investment Minister Mahmoud Mohieldin met with Li Zhao, vice chairman of the International Cooperation Agency at the Chinese Ministry of Trade, to discuss investments in infrastructure projects in the area.
Egypt gets third largest stake in African Investment Bank
Source: Daily News Egypt – 15 January 2009
African ministers of finance and economy approved Wednesday a new protocol, establishing the African Investment Bank and set out to examine the critical details pertaining to its management and operational aspects, reported the Pan African News Agency.
South Africa will get the largest share of the bank, totaling at least $4.4 billion as part of its shares in the new bank and Nigeria will receive the second highest number of shares worth $2.7 billion. Egypt will have some $2.1 billion worth of shares to be released once the bank begins its operations. Other shareholders include Algeria, Libya, Sudan, Angola, Tunisia and Kenya.
Libya, the bank’s host country, has indicated that the bank could be operational by November this year. The bank will have an initial capital of $4 billion, but its full capitalization is expected to be at $25 billion on full subscription, according to Farhat Bengdara, the governor of the Central Bank of Libya.
“This bank will be complimentary to the role of the African Development Bank (ADB). It will work in full consultation with the bank,” Bengdara, who heads the expert steering committee overseeing the implementation of the agreements setting the Bank, told PANA.
South Africa will get the largest share of the bank, totaling at least $4.4 billion as part of its shares in the new bank and Nigeria will receive the second highest number of shares worth $2.7 billion. Egypt will have some $2.1 billion worth of shares to be released once the bank begins its operations. Other shareholders include Algeria, Libya, Sudan, Angola, Tunisia and Kenya.
Libya, the bank’s host country, has indicated that the bank could be operational by November this year. The bank will have an initial capital of $4 billion, but its full capitalization is expected to be at $25 billion on full subscription, according to Farhat Bengdara, the governor of the Central Bank of Libya.
“This bank will be complimentary to the role of the African Development Bank (ADB). It will work in full consultation with the bank,” Bengdara, who heads the expert steering committee overseeing the implementation of the agreements setting the Bank, told PANA.
Egypt may decrease stimulus package
Source: Daily News Egypt – 15 January 2009
The Egyptian government may decrease the LE 15 billon economic stimulus package announced recently due to shortages in resources and a growing budget deficit, reported Al-Masry Al-Youm.
Egypt recently announced a LE 15 billion package ($2.73 billion) for the 2008/09 fiscal year ending June 2009 and just last week, Trade and Industry Minister Rachid Mohamed Rachid said Egypt may announce additional stimulus measures after it re-evaluates its economic situation in April.
Egypt recently announced a LE 15 billion package ($2.73 billion) for the 2008/09 fiscal year ending June 2009 and just last week, Trade and Industry Minister Rachid Mohamed Rachid said Egypt may announce additional stimulus measures after it re-evaluates its economic situation in April.
Egypt spending rises 53 pct
Source: Daily News Egypt – 16 January 2009
Finance Minister Youssef Boutrous Ghali said that Egypt’s total spending increased by 53 percent to LE 124.4 billion during the five months ending November 2008, compared to a total spending of LE 81.3 billion in the comparable period last year.
Total government revenue increased by 75.4 percent to LE 93.7 billion, which came on the back of a 40 percent increase in total tax revenues to LE 50 billion. Revenue from income tax rose 33.3 percent to LE 18.3 billion, helped by a 24.7 percent rise in corporate tax returns.
The Egyptian government’s spending on subsidies rose by some 154 percent in the first five months of the 2008/09 fiscal year which started in July, the state-run Middle East News Agency (MENA) reported.
Spending on subsidies reached LE 34 billion ($6.13 billion), MENA quoted a Finance Ministry report as saying, on the back of a rise in energy and food subsidies, which also posed a significant burden on the government’s ability to invest in areas such as education and healthcare.
Actual public spending on government investments increased 42.5 percent to LE 11.3 billion compared to the same period last year.
Employee salaries and benefits increased 19.9 percent to LE 28.6 billion, the ministry said. Egypt’s budget deficit stood at 3.1 percent of the estimated GDP.
Total government revenue increased by 75.4 percent to LE 93.7 billion, which came on the back of a 40 percent increase in total tax revenues to LE 50 billion. Revenue from income tax rose 33.3 percent to LE 18.3 billion, helped by a 24.7 percent rise in corporate tax returns.
The Egyptian government’s spending on subsidies rose by some 154 percent in the first five months of the 2008/09 fiscal year which started in July, the state-run Middle East News Agency (MENA) reported.
Spending on subsidies reached LE 34 billion ($6.13 billion), MENA quoted a Finance Ministry report as saying, on the back of a rise in energy and food subsidies, which also posed a significant burden on the government’s ability to invest in areas such as education and healthcare.
Actual public spending on government investments increased 42.5 percent to LE 11.3 billion compared to the same period last year.
Employee salaries and benefits increased 19.9 percent to LE 28.6 billion, the ministry said. Egypt’s budget deficit stood at 3.1 percent of the estimated GDP.
Budget deficit amounts to JD692m in 2008
Source: Jordan Times – 04 January 2009
The budget deficit was around JD692 million in 2008 or 5 per cent of the gross domestic product, according to an initial review of the budget’s actual figures. In the Budget Law for 2008, the deficit was estimated at JD826 million. The deficit could have been around JD387 million had it not been for major challenges which faced the treasury during the past three months, the cost of which amounted to around JD305 million. In the budget letter for 2009, the government projected a JD695 million deficit.
ASE Performance during 2008
Source: Amman Stock Exchange
Mr. Jalil Tarif Chief Executive Officer of the Amman Stock Exchange (ASE) said that the ASE achieved positive indicators despite the global financial crisis. During the year 2008 non-Jordanian investment kept their upward trend with a positive net balance, which is a testimony of trust in the Jordan Capital Market and an evidence of the increasing interest of investing at the ASE. The trading value, the number of shares traded, and the number of transactions increased during 2008, as well as the net income before tax of the public shareholding companies during the nine months of the year 2008.
The ASE statistics for the year 2008 showed that the ASE price index weighted by free float shares decreased by 24.9% reaching 2758 points, compared with 3675 points at the end of 2007. As for the price index weighted by market capitalization; it closed the year with 6243 points, a 17% decrease than the 7519 points at the end of 2007. Despite the decline in the shares prices during 2008; the ASE was less affected by the global financial crisis compared to other Arab and international exchanges.
Mr.Tarif added that the ASE price index increased by 30% during the first half of 2008, reached its all time high, this was due to the rise in the stock prices of some industrial companies especially the mining sector which came as a result of the increase of international prices of row materials which participated in the increase of the demand on their shares. Also share prices for a number of companies from different sectors increased due to the price increase of their products prices.
As for sectoral level, the price index declined for the Financial Sector by 29.7%, Services Sector by 17.7% and for Industrial Sector by 11.7%. Most of the sub-sectors indices witnessed a decline in their levels except for Food & Beverage sector and Mining & Extraction Industries sector, which increased by 7.5% and 1.6% respectively. Whereas Real Estate and Diversified Financial Services sectors price indices witnessed a dramatic decrease by 50.4%, 47.6% respectively.
The ASE indicators showed an increase in trading value by 65% compared to the year 2007, reaching JD 20.3 billion, the number of traded shares increased by 22% reaching 5.4 billion shares, and the number of executed transactions increased by 9% reaching 3.8 million compared with the year 2007. The turnover ratio increased slightly to 91.5% compared with 91.2% in 2007, and the number of companies listed on the ASE reached 262 companies compared to 245 companies by the end of 2007.
Tarif said that the ASE market capitalization reached JD25.4 billion a decrease by 13% compared with last year, constituting 226% of the GDP, which is one of the highest ratios that reflect the importance of the ASE in the national economy.
The non-Jordanian net investment marked an increase in 2008 by JD310 million against an increase by JD466 million in 2007. Also, Non Jordanian ownership increased by the end of November reaching 49.4% compared to 48.9% in the year 2007. Pre tax profits for public shareholding companies during the first nine months of the year 2008 witnessed an increase by 37.8% reaching JD1610 million compared to JD1168 million in the same period of 2007.
The ASE statistics for the year 2008 showed that the ASE price index weighted by free float shares decreased by 24.9% reaching 2758 points, compared with 3675 points at the end of 2007. As for the price index weighted by market capitalization; it closed the year with 6243 points, a 17% decrease than the 7519 points at the end of 2007. Despite the decline in the shares prices during 2008; the ASE was less affected by the global financial crisis compared to other Arab and international exchanges.
Mr.Tarif added that the ASE price index increased by 30% during the first half of 2008, reached its all time high, this was due to the rise in the stock prices of some industrial companies especially the mining sector which came as a result of the increase of international prices of row materials which participated in the increase of the demand on their shares. Also share prices for a number of companies from different sectors increased due to the price increase of their products prices.
As for sectoral level, the price index declined for the Financial Sector by 29.7%, Services Sector by 17.7% and for Industrial Sector by 11.7%. Most of the sub-sectors indices witnessed a decline in their levels except for Food & Beverage sector and Mining & Extraction Industries sector, which increased by 7.5% and 1.6% respectively. Whereas Real Estate and Diversified Financial Services sectors price indices witnessed a dramatic decrease by 50.4%, 47.6% respectively.
The ASE indicators showed an increase in trading value by 65% compared to the year 2007, reaching JD 20.3 billion, the number of traded shares increased by 22% reaching 5.4 billion shares, and the number of executed transactions increased by 9% reaching 3.8 million compared with the year 2007. The turnover ratio increased slightly to 91.5% compared with 91.2% in 2007, and the number of companies listed on the ASE reached 262 companies compared to 245 companies by the end of 2007.
Tarif said that the ASE market capitalization reached JD25.4 billion a decrease by 13% compared with last year, constituting 226% of the GDP, which is one of the highest ratios that reflect the importance of the ASE in the national economy.
The non-Jordanian net investment marked an increase in 2008 by JD310 million against an increase by JD466 million in 2007. Also, Non Jordanian ownership increased by the end of November reaching 49.4% compared to 48.9% in the year 2007. Pre tax profits for public shareholding companies during the first nine months of the year 2008 witnessed an increase by 37.8% reaching JD1610 million compared to JD1168 million in the same period of 2007.
Non-Jordanian Investments at the ASE during the Year 2008
Source: Amman Stock Exchange – 06 January 2009
The total value of shares that were bought by non-Jordanian investors during the year 2008 was JD4219.8 million, representing 20.8% of the overall trading value, while the value of shares sold by them amounted JD3910 million. As a result, the net of non-Jordanian investment during the year 2008 showed an increase by JD309.8 million, compared to an increase by JD466.2 million during the year 2007.
Arab investors purchases during 2008 were JD3233.4 million, or 76.6% of the overall purchases by non-Jordanians, while the value of non-Arab purchases amounted JD986.4 million, constituting 23.4% of the total purchases. Arab investors sales amounted JD3030.1 million, 77.5% of non-Jordanians total sales, while the value of non-Arab sales amounted JD879.9 million, representing 22.5% of the total sales by non-Jordanians.
The total value of shares bought by non-Jordanian investors during December 2008 was JD122.5 million, representing 24.6% of the overall trading value, while the value of shares sold by them amounted JD83.6 million. Thus, the net of non-Jordanian investment during December 2008 showed an increase by JD38.9 million.
Non-Jordanian ownership in companies listed at the ASE by end of December 2008 represented 49.2% of the total market value, 35.9% for Arab investors and 13.3% for non-Arab investors. At the sector level, the non-Jordanian ownership in the financial sector was 52.1%, in the services sector was 33.8%, and in the industrial sector was 53.3%.
Legal committee investigates collapse of brokerage firms
Source: Jordan Times – 13 January 2009
The Lower House Legal Committee on Monday continued its investigations into the collapse of hundreds of local brokerage firms last year.
To date, 310 cases have been filed at the State Security Court against these companies, Companies Comptroller Sabri Rawashdeh said at the meeting, which was also attended by Justice Minister Ayman Odeh, Industry and Trade Minister Amer Hadidi, Audit Bureau President Mustafa Barari and Central Bank of Jordan (CBJ) Governor Umayya Touqan.
"Although 1,302 companies are registered with the department, none of them is registered for the purpose of trading in foreign currencies," Rawashdeh noted.
He added that only 93 of the complaints were filed against companies registered with the department.
Rawashdeh also stressed that the Companies Comptroller Department is only authorised to register companies and not to issue licences.
Meanwhile, Touqan told the panel that the CBJ is responsible for registering financial corporations and money changers.
During the three-hour session, the head of committee, Deputy Mubarak Abu Yameen, said the absence of legislation regulating such companies was one of the main reasons behind this crisis.
A temporary law was issued last year as a result of the financial crisis which mostly hit small investors lured by brokers offering high returns on their investments.
The new legislation imposes stringent regulations on foreign exchange companies, requiring them to obtain a licence from the recently established Foreign Exchange Regulatory Commission.
Licence requirements include JD10 million in capital for privately owned firms and JD15 million for public firms, as well as a JD500,000 licence fee.
The companies in question were previously allowed to operate after registering with municipalities or commercial chambers as general or commercial services and were not subject to monitoring by the Central Bank of Jordan or the Amman Stock Exchange.
Authorities late last year seized assets worth around JD120 million, from the firms in question and referred 202 companies to the State Security Court prosecutor general.
Last November, the House decided to refer lawmakers' remarks regarding the crisis to the Legal Committee to study and identify those responsible for the crisis.
Arab investors purchases during 2008 were JD3233.4 million, or 76.6% of the overall purchases by non-Jordanians, while the value of non-Arab purchases amounted JD986.4 million, constituting 23.4% of the total purchases. Arab investors sales amounted JD3030.1 million, 77.5% of non-Jordanians total sales, while the value of non-Arab sales amounted JD879.9 million, representing 22.5% of the total sales by non-Jordanians.
The total value of shares bought by non-Jordanian investors during December 2008 was JD122.5 million, representing 24.6% of the overall trading value, while the value of shares sold by them amounted JD83.6 million. Thus, the net of non-Jordanian investment during December 2008 showed an increase by JD38.9 million.
Non-Jordanian ownership in companies listed at the ASE by end of December 2008 represented 49.2% of the total market value, 35.9% for Arab investors and 13.3% for non-Arab investors. At the sector level, the non-Jordanian ownership in the financial sector was 52.1%, in the services sector was 33.8%, and in the industrial sector was 53.3%.
Legal committee investigates collapse of brokerage firms
Source: Jordan Times – 13 January 2009
The Lower House Legal Committee on Monday continued its investigations into the collapse of hundreds of local brokerage firms last year.
To date, 310 cases have been filed at the State Security Court against these companies, Companies Comptroller Sabri Rawashdeh said at the meeting, which was also attended by Justice Minister Ayman Odeh, Industry and Trade Minister Amer Hadidi, Audit Bureau President Mustafa Barari and Central Bank of Jordan (CBJ) Governor Umayya Touqan.
"Although 1,302 companies are registered with the department, none of them is registered for the purpose of trading in foreign currencies," Rawashdeh noted.
He added that only 93 of the complaints were filed against companies registered with the department.
Rawashdeh also stressed that the Companies Comptroller Department is only authorised to register companies and not to issue licences.
Meanwhile, Touqan told the panel that the CBJ is responsible for registering financial corporations and money changers.
During the three-hour session, the head of committee, Deputy Mubarak Abu Yameen, said the absence of legislation regulating such companies was one of the main reasons behind this crisis.
A temporary law was issued last year as a result of the financial crisis which mostly hit small investors lured by brokers offering high returns on their investments.
The new legislation imposes stringent regulations on foreign exchange companies, requiring them to obtain a licence from the recently established Foreign Exchange Regulatory Commission.
Licence requirements include JD10 million in capital for privately owned firms and JD15 million for public firms, as well as a JD500,000 licence fee.
The companies in question were previously allowed to operate after registering with municipalities or commercial chambers as general or commercial services and were not subject to monitoring by the Central Bank of Jordan or the Amman Stock Exchange.
Authorities late last year seized assets worth around JD120 million, from the firms in question and referred 202 companies to the State Security Court prosecutor general.
Last November, the House decided to refer lawmakers' remarks regarding the crisis to the Legal Committee to study and identify those responsible for the crisis.
