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| ROUND UP: The month at a glance |
POWER PRIVATIZATION MOVING:
The Egyptian Electricity Authority has called upon local and international
companies to prequalify for a tender for consultancy services in
the privatization of the nation’s electricity companies. The
EEA is ultimately seeking assistance in valuing, pricing and marketing
Egypt’s seven electrical power generation and distribution
companies. A ministerial committee approved the sale of 20 percent
of the state’s shares in those companies in late July. Prequalification
documents were due at the EEA before noon on Aug. 31.
TOURISM SLIPS IN MAY:
Egyptian tourism slipped in May, as arrivals fell 27 percent from
the same month the year before to 241,000, against a narrower year-on-year
loss of 14 percent in April to 297,000 arrivals. The trend, however,
is toward improvement. Tourist arrivals in March were 39 percent
lower than the year before; in February, 46 percent lower; in January,
35 percent lower; and in December, 52 percent lower.
PETROLEUM EXPORTS FALL:
Egypt’s petroleum exports fell sharply in June to $59 million
from $124 million in June 1997, the Cabinet Information & Decision
Support Center reported. Petroleum production for June fell to 24.9
million barrels in 1998 from 25.1 million barrels in 1997, leaving
Egypt with petroleum production for the fiscal year ended June 30,
1998, of 826,000 barrels per day, down from 853,000 barrels per
day in the previous fiscal year. Natural gas production for June
also fell, to 851,000 tons in 1998 from 868,000 tons in 1997, the
IDSC reported. But natural gas production for the 1997/8 fiscal
year still increased to 10.8 million tons from 10.6 million tons
the year before.
RESERVES SLIGHTLY DOWN:
Egypt’s net international reserves fell to $20.16 billion in
May from $20.19 billion in April, the Central Bank of Egypt reported.
Egypt’s net international reserves stood at $20.2 billion in
May 1997.
INFLATION STEADY AT 3.6%: Egypt’s year-on-year consumer price
index inflation held steady at 3.6 percent in June, unchanged from
May, wrapping up a fiscal year in which CPI inflation never topped
4.1 percent. Monthly CPI inflation for June was 0.1 percent, down
from 0.7 percent in May. CPI inflation in June 1997 was 4.8 percent.
TURKISH WHEAT BOUGHT:
Egypt bought a small quantity of Turkish wheat in late July in an
experiment that could lead to larger purchases. Samir El Shakankiri,
vice chairman of the General Authority for Supply Commodities, said
he had set up a committee headed by himself to follow the wheat
through the milling process. In comments directed at high-priced
U.S. suppliers, El Shakankiri said favorable results could lead
him to buy up to 1 million tons of cheaper Turkish wheat. Egypt
has not bought Turkish wheat since 1971. GASC typically imports
about 5 million tons of wheat a year, El Shakankiri said.
NEW AID STRUCTURE SEEN:
USAID has begun discussions with the Egyptian government to set
priorities for future aid spending in light of anticipated reductions
in economic assistance. USAID Egypt Director Richard Brown said
in July that his office has been charged with completing a new transition
strategy by the end of the calendar year. A reduction in U.S. economic
assistance to Egypt is seen as inevitable following a proposal by
Israel to phase out its economic aid. Brown said Egypt could expect
cuts in economic aid of around 10 percent a year over 10 years if
the Israeli model is followed.
EFG-HERMES GDR CLOSES:
The $57 million initial public offering by Cairo-based EFG-Hermes
Holdings, seen by some as a test of confidence in the Egyptian stock
market, closed five times oversubscribed in late July. The offer
of 4.8 million London-listed global depository receipts (two GDRs
per share) was priced, allocated and began trading at $11.75 per
GDR on July 28. The GDRs are trading over-the-counter in London.
The underlying shares just more than half of which are primary shares
were expected to be listed in Cairo within 90 days. Allocation broke
down as follows: 40 percent to investors in the U.K., 25 percent
to investors in the U.S., 25 percent to investors in the Gulf states
and 10 percent to investors in the rest of Europe.
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