Thursday 31st Mar. 2016 THE WEEKLY Issue # 13 AMBITIOUS PROGRAM TO REVIVE ECONOMY

On Sunday, 27th of March, Prime Minister, , presented the government’s program in front of parliament that aims at reviving the economy in the short term. The government plans to restore economic growth to reach 5%–6% at the end of FY 2017/2018, compared to 4.2% in FY 2014/2015, and reducing unemployment rates to be 10%–11% by FY 2017/2018 down from 12.7% in FY 2014/2015, in addition to cutting the budget deficit to 9%-10% of GDP by the end of FY 2017/18, compared to the current 11.5%. The program is also focused on seven key pillars; conservation of national security, empowering democracy, achieving social justice and equality, adopting a sound economic program, developing infrastructure, improving public services, and reinstating ’s role in the international arena.

“First, we are serious about the reform process on all levels; political, economic, social, environmental, and administrative, and we will cooperate, coordinate, and work closely with the House of Representatives to implement this” “Any economic reform will be accompanied by social protection programs, and any social program will not be applied without funding resources.” Sherif Ismail Prime Minister Government Statement 27th March 2016

IN THIS ISSUE... The CBE’s Governor Interview A Decline In Egypt’s Trade Deficit Financial & Technical Agreements with Commencing The New Administrative Capital’s Infrastructure Industrial License Draft Law

A WORLD OF REAL POSSIBILITIES www.alexbank.com 1 THE CBE’S GOVERNOR INTERVIEW During a televised interview held on the 26th of March, the Central Bank of Egypt (CBE)’s Governor, Tarek Amer, declared several statements concerning the financial sector’s developments including : The intention of offering a 40% stake in Arab African International Bank (AAIB) and 20% of Banque du Caire on the Egyptian stock market by the end of the year. The United Bank of Egypt, almost totally owned by the CBE with a stake of 99.9%, would be sold to a strategic investor during this year. Foreign Investments in treasury bills and bonds increased by USD500 million since the devaluation of the Egyptian pound almost two weeks ago, with expectations to see another USD15 billion to USD20 billion of foreign investments in treasury bills and bonds by the end of this year. The CBE has pumped USD22 billion into the market to clear import backlogs. The Dollar-denominated high-yield certificates “Belady”, recently introduced, targeting Egyptians living abroad, have so far attracted around USD150 million. Egypt is set to repay USD800 million to the Paris Club and the USD1 billion owed to by next July.

“There is no currency crisis, we have a crisis in the regulation of the currency market” “The Central Bank will soon make hard currency available for foreign companies to repatriate their profits. We will focus on them in the upcoming period to facilitate distribution of profits” Tarek Amer CBE Governor Ahram Online 27th March 2016

The Central Agency for Public Mobilization and Statistics (CAPMAS) reported, in its monthly bulletin for external trade, a decline of 4.8% in Egypt’s trade deficit in December 2015 to reach EGP31.25 billion compared to EGP32.82 billion during the same month of 2014. This improvement is mainly attributed to the decline in the value of imports by 6% to record EGP46.7 billion in December 2015 against EGP49.7 billion in the same month of the previous year.

The Minister of International Cooperation, Sahar Nasr, and the German Ambassador to Egypt, Mr. George Loy signed a technical cooperation agreement worth EUR25.38 million and a financial cooperation agreement for phase II of the Education Quality Support Program worth EUR10 million.

“The two agreements aim to finance significant projects that would serve citizens on the national level in the fields of energy, water resources administration, sanitation, and irrigation. I also call on the German side to support Egypt in the field of climate change” Sahar Nasr Minister Of International Cooperation Ministry Official Website 26th March 2016

www.alexbank.com 2 Minister of Housing, , announced the start of implementing the new administrative capital’s infrastructure in its first phase, where the implementation process was assigned to the Egyptian Company for Engineering Works at an investment cost of EGP28 million. “We have endless work in this project, and it is considered one of the largest and most important priorities that we are working on, as it will provide a huge investment and job opportunities to a large number of companies. We, as a nation, are able to complete this project on time” Mostafa Madbouly Minister Of Housing Youm 7 28th March 2016

The Minister of Industry and Foreign Trade, Tarek Qabil, declared that the Cabinet approved a draft law on facilitating the procedures of obtaining an industrial license that will cut the length of obtaining licenses to 30 days from the current duration of 634 days and overcoming bureaucracy in government entities.

“The law would also contribute to the activation of the CBE’s initiative to provide EGP200 billion for financing SMEs and enable these entities to benefit from available concessional financing” Tarek Qabil Minister Of Industry And Foreign Trade Daily News Egypt 24th March 2016

www.alexbank.com 3 EGYPT AT GLANCE

EXCHANGE RATES 13 12.68 12 11 10.00 10 st 8.88 31 Mar. 2016 W/W M/M Y/Y YTD 9 USD 8.88 0% 13.4% 16.8% 13.8% 8 7 EURO 10.00 1.1% 17.2% 22.0% 17.7% 6 5 Sterling Pound 12.68 1.7% 17.1% 12.6% 9.8% Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Average Buy & Sell Prices For ALEXBANK * EGP per USD EGP per Euro EGP per Pound Sterling

STOCK MARKET 10000 9000

8000 7,545.73

7000 6485 st EGX 31 Mar. 2016 W/W M/M Y/Y YTD 6000 5794.39 EGX 30 7,524.99 -0.3% 22.4% -17.6% 6.1% 5000 4000 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16

EGX 30 EGX 70 (Rel.) EGX 100 (Rel.)

TB’S AUCTION INTEREST RATES

Auction Date Maturity Average Yield % Current* Previous** 27 March 2016 91 Days 13.217 Overnight Deposit Rate 10.75% 9.25% +150 bp 31 March 2016 182 Days 13.683 Overnight Lending Rate 11.75% 10.25% +150 bp 27 March 2016 266 Days 14.260 Corridor Rate 11.25% 9.75% +150 bp 31 March 2016 364 Days 14.231 * at March 2016 ** at December 2015

FX-AUCTION RATES

Auction Date 22nd Mar. 2016 17th Mar. 2016 US $ 8.7800 8.7800

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