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ROUND UP: The month at a glance

GOVERNMENT NEGOTIATES GAS PRICE CUTS

International petroleum companies with natural gas concessions in Egypt – including the two largest, BG and Agip – agreed to charge the government less for natural gas. A new pricing schedule, which took effect in July, will save the government up to $250 million a year, Minister of Information Safwat Al Sherif said on September 18. The minister also said the companies had agreed to sell gas in local currency instead of dollars, in order to support the Egyptian pound.

OCI to increase capital by £E 150 million

Orascom Construction Industries announced September 28 that, in order to fund current projects, it will increase its paid-in capital by £E 150 million by reducing dividend payments. OCI spokesman Kevin Struve said that the company will distribute a share dividend for every four shares in late November, after the government approves the move. OCI’s current paid capital stands at £E 600 million, he said.

Central Bank injects $400 million

The Central Bank of Egypt injected $400 million into the market to meet banks’ demand for dollars and stabilize the Egyptian pound, Al Ahram reported on October 5. The daily said the Central Bank had made the decision a day earlier, after a meeting of 60 bank heads to discuss the shortage of US currency and its steady gain against the pound in recent months. The bank injected $248 million in September for the same reason.
Foreign currency transactions banned? An October 10 cabinet announcement briefly prevented citizens from making local transactions in foreign currencies. Officials said the decision, which banned Egyptians from using foreign currency to pay for services such as schools and apartments, was made to stop the emergence of a dual-currency economy.

July forex reserves down $2.9 billion

Egypt’s net foreign-currency reserves totaled $14.64 billion in July, down from $17.58 billion in July 1999, according to the Central Bank of Egypt’s monthly bulletin issued on October 10. The level of reserves is sufficient to cover 10 months’ worth of imports. Egypt’s current account deficit narrowed to $56.5 million in the fourth quarter of the fiscal year ending June 30, from $482 million in the third quarter. The improvement was due partly to a recovery in tourism and petroleum revenues.

July tourist arrivals up 6.9 percent

Tourist arrivals in Egypt reached 506,000 in July, up from 473,000 in July 1999, the Central Bank of Egypt said. Egypt received 5.8 million tourists in the 12-month period to July, up from 5.7 million tourists for the 12-month period ending June. Travel revenues for the whole year were at an all-time high of $4.3 billion, up from $3.2 billion for 1999. The positive trend, however, appears to be threatened by recent regional upheavals.

HSBC buys 50.3 percent of EBB

UK-based financial services group HSBC Holdings plc. has bought another 50.3 percent of shares in the Egyptian British Bank for approximately £E 500 million, HSBC Securities officials in Cairo announced on October 12. HSBC already held a 40-percent stake in the bank and the further purchase of 1.007 million shares has brought its total stake in the bank to 90.3 percent.

Government to buy 750,000 tons of local corn

The government will buy 750,000 metric tons of corn from local growers this year, up from 500,000 tons in 1999. Minister of Information Safwat Al Sherif announced that each ardeb (5.6 bushels) of corn would be bought from local growers at £E 90.

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