{"id":584759,"date":"2023-04-05T00:00:00","date_gmt":"2023-04-05T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/04\/05\/this-morning-savers-pour-egp-41-bn-into-banque-misrs-new-cds-net-foreign-liabilities-deepened-in-february\/"},"modified":"2023-04-05T00:00:00","modified_gmt":"2023-04-05T00:00:00","slug":"this-morning-savers-pour-egp-41-bn-into-banque-misrs-new-cds-net-foreign-liabilities-deepened-in-february","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/04\/05\/this-morning-savers-pour-egp-41-bn-into-banque-misrs-new-cds-net-foreign-liabilities-deepened-in-february\/","title":{"rendered":"THIS MORNING: Savers pour EGP 41 bn into Banque Misr\u2019s new CDs + Net foreign liabilities deepened in February"},"content":{"rendered":"

Good morning, friends, and welcome to another packed news day. <\/span><\/p>\n

It\u2019s all about the macro picture this morning. <\/span>The non-oil economy contracted for a 28th <\/span>month running in March \u2014 and Goldman Sachs is sounding the alarm on our external financing gap. The problem, it says, isn\u2019t that we\u2019re importing too much \u2014 it\u2019s that we\u2019re not exporting enough.<\/span><\/p>\n

The ray of sunshine:<\/span> Sovereign wealth fund boss Ayman Soliman brings positive updates on <\/span>the privatization program as offers roll in for the state-owned hotels company and the pre-IPO fund looks to onboard another four state-owned firms. <\/span><\/p>\n

** SO, WHEN DO WE EAT? <\/span>We\u2019ll be breaking our fasts at 6:16pm CLT today. You have until <\/span>4:11am tomorrow morning to hydrate and grab a bit<\/span>e to eat.<\/span><\/p>\n

BUT FIRST-<\/span><\/p>\n

<\/a><\/span>Net foreig<\/span>n liabilities deepen again in February:<\/span> Egypt\u2019s net foreign liabilities rose<\/span> by <\/span>US<\/span>D <\/span>1.3 bn i<\/span>n February as continued pressure on the EGP pushed net assets further into the red, according to calculations based on central bank figures. Net foreign assets slipped to a n<\/span>egative USD 23.02 bn<\/span> from negative <\/span>USD 21.70 bn in January<\/span>. It\u2019s the second month in a row that net foreign liabilities deteriorated. <\/span>Commercial banks<\/span> were responsible for most of the decline, seeing their liabilities grow by USD 787 mn to stand at USD 13.8 bn<\/span>.<\/span><\/p>\n

Two years can make a big difference:<\/span> Net foreign assets stood a<\/span>t <\/span>USD 20.39 bn<\/span> i<\/span>n February <\/span>2021 before they began to decline. The outbreak of war in Ukraine in February 2022 accelerated the process as investors pulled bns of USD from our debt market and our import bill shot up, heaping pressure on the EGP and precipitating three devaluations. The currency has lost almost half of its value since last March.<\/span><\/p>\n

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<\/a><\/span>Robust appetite for high-yield CDs: <\/span>Savers have so far poured some EGP 41 bn <\/span>into Banque Misr\u2019s new fixed and declining-rate certificates of deposit, <\/span>Hapi Journal<\/a><\/span> quotes <\/span>bank chairman <\/span>Mohamed El Etreby as saying<\/span>. The NBE and Banque Misr introduced the <\/span>22% CDs<\/a><\/span> in the wake of the central bank\u2019s 200-basis-point rate hike last week. <\/span><\/p>\n

aiBank launches new CDs: <\/span>aiBank, a unit of EFG Hermes, introduced a new three-year <\/span>certificate with a fixed interest rate of 17.25% for monthly payouts, 17.5% for quarterly payouts, and 18.0% for annual payouts, according to its <\/span>website<\/a><\/span>. The minimum deposit is EGP 10k. <\/span>CIB<\/a><\/span> earlier this week said it was taking to market a 22%, three-year CD. The moves come after the central bank raised interest rates last Thursday by 200 bps.<\/span><\/p>\n

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<\/a><\/span>The FY 2023-2024 budget is with the House: <\/span>The cabinet on Monday forwarded next<\/span> year\u2019s budget to the House\u2019s Budget Committee <\/span>after approving<\/a><\/span> it last week. The committee will hold off discussing the document until after Finance Minister Mohamed Maait and Planning Minister Hala El Said deliver their budget statements on Tuesday. <\/span><\/p>\n

What we know about the budget: <\/span>The draft FY 2023-2024 budget puts social spending front and center amid a crunch on Egyptian households, with a 28% increase for social safety programs and significant rises for food and fuel subsidies. <\/span><\/p>\n

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<\/a><\/span>It\u2019s business as usual in the Suez Canal: <\/span>Traffic along the Suez Canal was not <\/span>disrupted by a minor scrape between two passing tankers yesterday, the <\/span>Suez Canal Authority<\/a><\/span> said.<\/span><\/p>\n

HAPPENING TOMORROW-<\/span><\/p>\n

The World Bank will release its latest MENA Economic Update: <\/span>Ominous<\/span>ly titled \u201cAltered Destinies,\u201d the multilateral lender\u2019s latest <\/span>regional growth report<\/a><\/span> will look \u201cin depth at how even temporary increases in the price of food can have lasting impacts across generations in terms of education, health and future income prospects.\u201d The World Bank downgraded its economic growth forecast for Egypt in the current fiscal year by 0.2 percentage points to 4.8% in its <\/span>most recent update<\/a><\/span> in October.<\/span><\/p>\n

THE BIG STORY ABROAD-<\/span><\/p>\n

<\/a><\/span>The int\u2019l press can\u2019t look away from the Trump indictment: <\/span>Donald Trump pleaded<\/span> not guilty to <\/span>34 felony counts in a Manhattan court, becoming the first former US president to be booked and charged with a crime. The Donald faces charges of falsifying business records to hide hush money he paid to two women to keep extramarital affairs out of the press ahead of the 2016 election. <\/span><\/p>\n

The story is everywhere this morning: <\/span>Reuters<\/a><\/span>| <\/span>AP<\/a><\/span>| <\/span>BBC<\/a><\/span>| <\/span>Wall Street Journal<\/a><\/span> | <\/span>Th<\/a><\/span>e Guardian<\/a><\/span> | <\/span>CNBC<\/a><\/span>| <\/span>ABC News<\/a><\/span> | <\/span>New York Times<\/a><\/span> | <\/span>Bloomberg<\/a><\/span>. <\/span><\/p>\n

AND- Finland is officially a NATO member: <\/span>Finland <\/span>became NATO\u2019s 31st member<\/a><\/span>yesterday after all 30 member states voted to ratify the country\u2019s membership, doubling the length of the military alliance\u2019s border with Russia. \u201cJoining NATO is good for Finland, it is good for Nordic security and it is good for NATO as a whole,\u201d Secretary General Jens Stoltenberg said. Finland applied to join NATO in May 2022 in hopes of bolstering its security following Russia\u2019s invasion of Ukraine. <\/span><\/p>\n

Sweden is still knocking at NATO\u2019s door: <\/span>Sweden\u2019s aspirations to join NATO are in the hands <\/span>of Hungary and Turkey, the two member countries yet to greenlight the move. (<\/span>Reuters<\/a><\/span> | <\/span>CNN<\/a><\/span>| <\/span>BBC<\/a><\/span>| <\/span>DW<\/a><\/span>| <\/span>AP<\/a><\/span>| <\/span>CNBC<\/a><\/span>| <\/span>NPR<\/a><\/span> | <\/span>FT<\/a><\/span>)<\/span><\/p>\n

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MARKET WATCH-<\/span><\/p>\n

The eye of the storm? Traders are concerned that the calm that has followed the recent <\/span>market turmoil isn\u2019t here to stay<\/span> and are preparing for further bouts of turbulence in the coming weeks, <\/span>Bloomberg reports<\/a><\/span>. Last month\u2019s banking crisis that saw the collapse of three US lenders and emergency takeover of Credit Suisse didn\u2019t produce the kind of turmoil seen in the lead-up to the 2008 meltdown but the wild swings have market watchers worried about what might be coming down the line amid uncertainty about interest rates and inflation.<\/span><\/p>\n

\u201cWe expect to see notable market swings also going forward<\/span>, as investors ponder where <\/span>central bank rates will end up, what will it take to bring inflation back to target, what will the costs be to the economy \u2014 and yes, also who will be the next casualties of higher rates,\u201d said a senior analyst at Nordea Bank<\/span>.<\/span><\/p>\n

CORRECTION-<\/span> In yesterday\u2019s story on DPI and Amethis\u2019 acquisition of a stake in Marcyrl <\/span>we <\/span>incorrectly stated that DPI owns a 33% stake in MNT Investments. The firm's ADP II fund has fully exited its 25% stake in the company, while ADP III has reduced its ownership from 8% to 5%. The story has since been updated <\/span>on our website<\/a><\/span>.<\/span><\/p>\n

CIRCLE YOUR CALENDAR-<\/span><\/p>\n

It\u2019s a brand new month.<\/span> Here are some economic indicators to look out for<\/span>:<\/span><\/p>\n