THE WEEKLY TERRORIST ATTACKS ON COPTIC CHURCHES IN THIS ISSUE ISSUE TH APRIL, 2017

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1 TERRORIST ATTACKS ON COPTIC CHURCHES Two Coptic churches in Egyptian governorates, Tanta and Alexandria, were attacked by suicide bombers on Palm Sunday festival, where 48 people were killed, including seven police officers, and at least 120 injured. Following an urgent meeting with the National Security Council, Egypt s President, Abdel Fattah Al-Sisi, declared a three-month state of emergency which was ratified by the parliament on Tuesday. He also announced the establishment of a Supreme Council to Combat Terrorism and Extremism, which will be provided with wide-ranging authorities according to laws yet-to-be issued. Al-Sisi also ordered army troops to be deployed to protect vital infrastructure and warned of a long and painful war against jihadists. In response, the Egyptian Exchange Benchmark Index (EGX30) fell on Sunday and Monday by 1.55% and 0.42% respectively, before rebounding on Tuesday s session, where EGX30 index grew by 0.58%. The EGP exchange rate was not affected by the events as it is still hovering around EGP18.00 per USD during the week. Despite the deadly attacks, the Vatican confirmed Monday that Pope Francis visit to Egypt at the end of the month will go on as planned. IN THIS ISSUE The attack will only harden the determination of the Egyptian people to move forward on their trajectory to realize security, stability and comprehensive development Abdel Fatah Al-Sisi Egyptian President Reuters 9 th April 2017 Banks Increase Investments In Treasury Bills Annual Headline Inflation Increases GDP Growth Rate Slows Down MOF Reduces VAT On Imported Capital Goods Egypt And Kuwait Renew Oil Contracts Egypt is trying to curb terrorism through its state of emergency declaration. We must take exclusive measures to offer the needed cover to counter terrorism. The state of emergency gives the state institutions the flexibility to fight terrorism, which the government is trying to eradicate Sherif Ismail Prime Minister Alborsa News 11 th April

2 President Abdel Fattah Al-Sisi issued a presidential decree, on the 11 th of April, establishing three institutions to regulate Egypt s media industry (independent and state-owned). The Supreme Media Council to be authorized by banning any publication of inflammatory or foreign news that might affect Egypt s peace and stability. While the National Media Authority, scheduled to replace the Egyptian Radio and Television Union, will oversee state-owned audio-visual media, radio, and digital media institutions in a manner that guarantees their independence, professionalism and profitability. The National Press Authority will take charge of managing all state print news outlets and it is scheduled to replace the current Supreme Press Council. Annual headline inflation in urban areas increased to 30.9% in March compared to 30.2% in February. March registered the slowest pace in the annual rate since November, showing signs of stability. The Central Agency for Public Mobilization and Statistics (CAPMAS) attributed the rise in inflation rates to an increase of 7.1% in the prices of vegetables, 3.4% in meat and poultry prices, fish and seafood (10.6%), fruits (7.2%), and tobacco (7.3%). Inflation Rate (M/M) 4.85% 5.33% 4.35% 4.07% 5.00% 0.74% 0.25% 1.93% 0.61% 1.25% 1.40% 1.70% 2.81% 3.13% 2.63% 2.61% 1.95% 0.97% Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Headline CPI Core CPI Egypt s real Gross Domestic Product (GDP) growth rate decreased to 3.8% in Q2 FY 2016/17 compared to 4% in Q2 FY 2015/16. This is mainly attributed to the retreat in consumption after it had been a catalyst for economic growth as rapid price hikes hit consumers purchasing power. Egypt s trade deficit dropped by 37.1% to record USD2.34 billion in January down from USD3.72 billion in the same month of the previous year. This improvement is mainly attributed to the increase in Egyptian exports by 27.1% to register USD1.82 billion compared to USD1.43 billion. Additionally, imports reached USD4.16 billion compared to USD5.15 billion, decreasing by 19.3%. The hike in exports is due to the increase in value of some export goods, such as crude oil by 95.4%, fertilizers by 19.4%, pasta and food products by 9.3%, and fresh orange by 0.3%. On the other side, the decline in imports is explained by the price decreases of some products where motor vehicles declined by 36.4%, iron and steel by 27.5%, plastics by 27.1%, and wheat by 23.5% The Central Agency for Public Mobilization and Statistics (CAPMAS) Official Website 11 th of April

3 Egypt s Ministry of Finance (MOF) reduced the Value Added Tax (VAT) on imported machinery and equipment of capital goods to 5%. This step aims to support the domestic economy and national mega projects. It s worth noting that the current general VAT rate is 13%. The Central Egypt reported that banks operating in Egypt increased their investments in Treasury Bills (TBs) to EGP billion, which represent 74.4% of total outstanding TBs at the end of January 2017 (EGP billion) compared to EGP billion at the end of December Private banks investment in bills through January reached EGP252.6 billion (48.1%) of total bills. Meanwhile, public banks acquired EGP237.6 billion (45.2%). Specialized banks owned EGP10.2 billion (1.9%) of the outstanding balances of bills, while foreign banks branches in Egypt shared EGP25.4 (4.8%) billion The Central Egypt Daily News Egypt 9 th April 2017 Egypt and Kuwait have renewed two contracts to supply crude oil and petroleum. Accordingly, the Kuwait Petroleum Corporation (KPC) is to supply Egypt with 1.5 million barrels of petroleum products per year and 2 million barrels of crude oil per month. Based on the contracts, which last for three years, the crude oil will be refined in Egyptian refineries. Egypt will have a grace period of 180 days to pay for the shipments of fuel products and 270 days for crude oil Ministry of Petroleum Al Masry Al Yum 5 th April

4 EGYPT AT GLANCE EXCHANGE RATES USD EUR STERLING POUND Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 EGP per USD EGP per Euro EGP per Pound Sterling STOCK MARKET 14,000 12,967 12,000 10,000 EGX30 12,967 13,099 12,929 7,421 12,291 8,000 6,000 EGX ,000 2,000 EGX100 1,361 1,353 1, ,099 0 T-BILLS AUCTION CONSUMER PRICE INDEX AND MAJOR COMPONENTS AUCTION DATE MATURITY (DAYS) 91 AVERAGE YIELD (%) WEIGHT IN FEBRUARY FEBRUARY BASKET % (INDEX) (JANUARY 2010=100) Y/Y 12 TH APR HEADLINE- ALL ITEMS 100% % FOOD AND BEVERAGES 39.92% % 12 TH APR TOBACCO AND RELATED PRODUCTS 2.19% % INTEREST RATES CLOTHING AND FOOTWEAR HOUSING, WATER, ELECTRICITY AND GAS 5.41% 18.37% % 7.79% OVERNIGHT DEPOSIT RATE OVERNIGHT LENDING RATE CORRIDOR RATE *AT NOVEMBER 2016 **AT JUNE 2016 GLOBAL COMMODITY PRICES CURRENT* 14.75% 504 1,225 PREVIOUS** 6, ,099 FURNISHINGS AND HOUSEHOLD EQUIPMENT 3.77% MEDICAL CARE 6.33% TRANSPORTATION 5.68% COMMUNICATIONS 3.12% RECREATION AND CULTURE 2.43% EDUCATION 4.63% % 35.58% 28.81% 1.80% 16.26% 12.32% BRENT CUDE* GOLD** 1, , , , , HOTELS, CAFES AND RESTAURANTS MISCELLANEOUS GOODS AND SERVICES 4.43% 3.73% % 35.97% WHEAT*** *USD/BARELL **USD/OUNCE SOURCE: BLOOMBERG **USD/BU

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