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| ROUND UP: The month at a glance |
CUSTOMS RATE CUT:
Egypt by presidential decree cut its top customs rate to 40 percent
from 50 percent in line with the nation's international trade commitments
and its goal of reducing burdens on Egyptian consumers, the nation's
semi-official newspapers reported in October. Egypt also implemented
tariff reductions of five and 10 percentage points across several
customs categories covering electrical appliances, trucks and household
goods. Tariffs have been cut to 40 percent from 45 percent and 50
percent and to 30 percent from 35 percent and 40 percent. The reductions
do not apply to tariffs on imported automobiles, the newspapers
reported.
DIPLOMATS FACE AUTO FEES:
Egypt decided in October to begin levying customs duties and sales
taxes on cars imported by diplomats. The decision, which applies
retroactively to diplomatic cars already in Egypt, including those
sold to Egyptian employees of diplomatic organizations, is expected
to raise between £E 200 million and £E 250 million,
Al Akhbar reported, quoting an unnamed source. Owners who refuse
to pay the duties will be fined and will have their vehicles confiscated,
the newspaper re-ported, but diplomats who don't want to pay the
fees will be allowed to reexport their cars.
INFLATION STEADY IN AUGUST:
Egypt's year-on-year consumer price index inflation for August was
unchanged from July at 4.3 percent, the government's main statistics
agency reported. Monthly CPI inflation for August was 0.3 percent,
up 0.2 percentage point from July, according to a recent report
issued by the Central Agency for Public Mobilization & Statistics.
Year-on-year CPI inflation in August 1997 was 4.1 percent. Year-on-year
CPI inflation has topped 4 percent in each of the past two reporting
months, after spending the first six months of 1998 below 4 percent.
MOBINIL ISSUES NEW SHARES:
The Egyptian Co. for Mobile Services (MobiNil), owner and operator
of Egypt's cellular telephone network, sold £E 400 million
in new shares to existing shareholders on Oct. 5. Shareholders of
record as of Oct. 4 were given the right to buy new shares equal
to two-thirds of their existing holdings at the par-value price
of £E 10 plus a £E 0.02 per share subscription fee.
The offer raised the company's capital to £E 1 billion from
£E 600 million, and was held as scheduled despite the suspension
for lack of a quorum of an extraordinary general assembly called
by MobiNil to discuss the issue. MobiNil shares had fallen in heavy
trade on rumors the rights issue itself had been delayed.
EGYPT OFFERS OCTOBER TBONDS:
Egypt's Ministry of Finance offered a third-straight monthly tranche
of £E 500 million in treasury bonds in October, despite comments
by the minister in mid-September that an October issue was unlikely.
The October bonds mature in 2005, carry a 10 percent coupon and
were to be al-located primarily to individuals and mutual funds.
The Ministry of Finance has said that it will regularly offer new
treasury bonds to secure the longer-term financing needed to re-structure
the nation's £E 150 billion domestic debt, the bulk of which
is financed by short-term treasury bills.
HELWAN BUYS INTO AMERIYAH:
Helwan Cement bought a £E 60 million, 5 percent stake in competitor
Ameriyah Cement in late September, moving the latter into the private
sector. Helwan's purchase of 1 million shares at £E 60 apiece
brought the state's holdings in Ameriyah below 50 percent, allowing
Ameriyah to come under the law governing private-sector companies.
The transaction, by enabling a private sector board-in-waiting elected
at an early summer general assembly to take control of Ameriyah,
should create greater management flexibility for the company. But
the transaction also raises questions about how the companies will
interact in a competitive environment once local production increases
to cover local demand. Ameriyah Cement is contemplating an issue
of global depository receipts in London.
USAID FUNDS DISBURSED:
The U.S. Agency for International Development announced in October
that it had transferred $336 million to the Egyptian government
after Egypt met USAID reform targets concerning privatization, customs
reform, environmental standards and health. Another $86 million
was expected to be disbursed by the end of the year, USAID said.
U.S. economic assistance to Egypt will likely be reduced by 5 percent
to $775 million in the coming year, and further reductions are considered
inevitable.
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