{"id":547585,"date":"2022-06-28T04:27:21","date_gmt":"2022-06-28T04:27:21","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/06\/28\/this-morning-good-news-for-the-auto-industry-more-on-gcc-investments\/"},"modified":"2022-06-28T04:27:21","modified_gmt":"2022-06-28T04:27:21","slug":"this-morning-good-news-for-the-auto-industry-more-on-gcc-investments","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/06\/28\/this-morning-good-news-for-the-auto-industry-more-on-gcc-investments\/","title":{"rendered":"THIS MORNING: Good news for the auto industry? + More on GCC investments"},"content":{"rendered":"

Two more work days to the long weekend, <\/strong>ladies and gentlemen. And so far, the news has been very positive this week, particularly on the FDI front, and now for the auto sector.<\/p>\n

THE BIG STORY here at home is a possible chink of light at the end of the tunnel for the <\/strong>local automotive industry<\/strong>, after Prime Minister Moustafa Madbouly directed his ministers, the central bank, and the banking sector to coordinate on setting up \u201ca mechanism for the orderly release of car shipments\u201d from ports. Local car dealers have faced challenges in recent months getting vehicles imported to the country, after a change in rules that required importers to get letters of credit (L\/Cs) in order to purchase non-essential goods.<\/p>\n

We also have more potential investments from our neighbors<\/strong>, with Finance Minister Mohamed Maait revealing that some USD 2-3 bn in potential FDI could be coming in from Qatar. Maait made a speech during the Amcham annual meetings,<\/strong> where he said that attracting local and foreign investors is a \u201cpresidential priority,\u201d according to a statement<\/a> by the Finance Ministry. More on that in today\u2019s Investment Watch.<\/p>\n

<\/a> We\u2019re getting Kudos for our GCC push: <\/strong>Gulf investments coming into the country will act as \u201cstabilizers for the EGP\u201d in the medium term, giving the currency upside potential towards the end of the year, Standard Chartered MENA economist Carla Slim told Bloomberg TV (watch, runtime: 5:25<\/a>). We\u2019ve received some USD 7 bn<\/a> of the more than USD 22 bn<\/a> pledged by our Gulf neighbors to support our economy, with the remainder expected to come through in coming months, Slim noted. The EGP is now trading at EGP 18.79 to the USD.<\/p>\n

This is particularly important as it has not been a great month for the EGX:<\/strong> After a slight reprieve that saw the benchmark index rise less than 0.1% at Sunday\u2019s close, the EGX30 fell by 2.0% yesterday with a turnover of EGP 828 mn (0.1% above the 90-day average). By our count, the index has now lost around 10% of its value in less than three weeks.<\/p>\n

As long as demand remains weak, we won\u2019t likely be seeing sales of stakes in <\/strong>state-owned companies on the bourse. <\/strong>Delays to public offerings in the state privatization program are down to weakness in demand on the EGX as well as global headwinds triggered by conflict in Ukraine, <\/strong>Public Enterprise Minister Hisham Tawfik suggested to Ahram Online<\/a> in an interview. \u201cThe EGX is currently not at its best,\u201d Tawfik said, adding that the offering of Eastern Company<\/a> in 2019, and of state-owned fintech firm e-finance<\/a> last year, had thrown up \u201csome structural issues in the local demand that need to be considered before resuming the program.\u201d<\/p>\n

Pay attention, advisors:<\/strong> It is \u201cthe job of investment banks that set the stake that will be offered for the private sector and the shares that will be offered\u201d to tackle those issues, he added.<\/p>\n

Egypt had hoped to sell shares in as many as 10 state-owned companies on the EGX in 2022,<\/strong> before Russia\u2019s invasion of Ukraine upended the global economy. It\u2019s hoped that stake sales will resume in September<\/a>, Tawfik said back in May.<\/p>\n

\n

THE BIG STORY ABROAD this morning continues to be shifting geopolitical tectonics in <\/strong>Europe<\/strong>, as the G7 summit continues against the backdrop of the Russian war on Ukraine and discussions to bring new members into the Nato security alliance to combat fears of aggression from Moscow. Here are the headlines leading the conversation:<\/p>\n