Recent developments in the egyptian economy
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Recent Developments in the Egyptian Economy. Ministry of Investment Sep 2009. Growth & Investment. Source: Ministry of Economic Development. Unemployment Rate. Source: CAPMAS. 2. Growth & Investment. Comparative Sectoral Growth Rates (Semi annual).

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Recent Developments in the Egyptian Economy

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Recent developments in the egyptian economy

Recent Developments in theEgyptian Economy

Ministry of Investment

Sep 2009


Growth investment

Growth & Investment

Source: Ministry of Economic Development

Unemployment Rate

Source: CAPMAS

2


Growth investment1

Growth & Investment

Comparative Sectoral Growth Rates (Semi annual)

Source: Ministry of Economic Development

Quarterly Growth Rates

3

Source: Ministry of Economic Development


Recent developments in the egyptian economy

Public vs. Private Investments

Private Investment / Total Investment

Private investment as percentage of GDP

Private vs Public Investment

EGP Billion

4

Source: Ministry of Economic Development


Recent developments in the egyptian economy

Establishment of Corporations (Weekly)

Source: GAFI – Ministry of Investment


Recent developments in the egyptian economy

Establishment of Corporations (Monthly)

6

6

Source: GAFI – Ministry of Investment


Recent developments in the egyptian economy

Foreign Direct Investment

Source: Central Bank of Egypt

7

7


Recent developments in the egyptian economy

Fiscal and Monetary Policies

Fiscal Deficit/ GDP

Net International Reserves

8

Source: Ministry of Finance


Recent developments in the egyptian economy

Fiscal and Monetary Policies

YoY change in CPI

June 09


Recent developments in the egyptian economy

External Sector

Current Account

10

Source: Central Bank of Egypt


Recent developments in the egyptian economy

External Sector

Source: Ministry of Finance

Source: Central Bank of Egypt

11

Source: Ministry of Finance

Source: Central Bank of Egypt


Recent developments in the egyptian economy

Trading Indicators 2004 - 2008

Volume of Trading

Value of Trading


Recent developments in the egyptian economy

Risk & Return analysis for S&P Board Market Index- BMI

13


Recent developments in the egyptian economy

Egyptian Market since 2004

Annual Return

EGX30 Index

14


Recent developments in the egyptian economy

P/E Ratio & Market Capitalization


Recent developments in the egyptian economy

Net Portfolio Investments and Foreigners & Arabs Trading


Recent developments in the egyptian economy

The Asset Management Program

17


Recent developments in the egyptian economy

Financial Sector Reform Program

Phase I: 2005-2008

Reform

Objective

Improve the soundness and efficiency of the financial sector through comprehensive structural and financial reform, which would ultimately boost economic growth and development as well as enhancing competitiveness, and financial innovation.

Main Components of the Reform Program

  • Reforming the Banking Sector

  • Restructuring the Insurance Sector

  • Deepening the Capital Market

  • Developing a well-functioning Mortgage Market

  • Activating other Financial Services

Time Frame

2005-2008


Recent developments in the egyptian economy

Financial Sector Reform Program

Main Implemented Reforms of Phase I: 2005-2008

1- Reforming the Banking Sector

2- Restructuring the Insurance Sector

  • Merging six banks.

  • Settling 65% of public sector NPLs.

  • Privatizing Bank of Alexandria

  • Divesting 13 cases of public sector banks holdings in JV banks.

  • Merging Al-Shark and Egypt Re in Misr Insurance.

  • Establishing the Holding Company for Insurance.

  • Restructuring the boards of public insurance companies.

  • Establishing a State Fund for compensation

  • Amending the insurance law and allowing corporation to act as insurance brokers.

  • Raising the minimum issued capital to EGP 60 million for life and non-life insurance companies.

  • Reducing stamp duties on insurance policies for life, property and casualty insurance.

  • Introducing more flexibility to income recognition rules and regulations.

  • Reducing the registration fee to a maximum of EGP 2000 .

  • Establishing the Egyptian Mortgage Refinance Company.

  • Raising the maximum subsidy obtained from the Mortgage Finance Subsidy and Guarantee fund from EGP 10,000 to EGP 15,000.

  • Activating the role of insurance in mortgage finance activity.

  • Standardizing contracts of mortgage finance to facilitate the securitization process.

3- Deepening the Capital Markets

4- Developing a well functioning Mortgage Finance

  • Establishing a special registrar for qualified auditors at the CMA.

  • Introducing Margin Trading, Short Selling, Same Day Trading, Market Making Activity, and Securitization.

  • Issuing the legislative framework for organizing Acquisitions.

  • Issuing the new Egyptian Accounting Standards in compliance with the International Accounting Standards.

  • Issuing the legislative framework for combating insider trading.

  • Issuing regulations to organize and introduce investment funds, and organize exchange traded funds, money market funds and real estate funds.

  • Establish the Nile Stock Exchange (Nilex) for SMEs.


Recent developments in the egyptian economy

Financial Sector Reform Program

Impact of Reforms of Phase I: 2005-2008


Recent developments in the egyptian economy

Financial Sector Reform Program

Phase II: 2009 - 2012

Main Pillars of the Reform Program

  • Phase II of the program comprises generic and sector specific reform measures.

  • The generic reform measures aim at:

  • Increasing the efficiency of regulation and shifting it from a rule-based to a risk-based regulation to ensure the soundness of the financial system.

  • Improving access to finance.

  • Developing the financial culture.

  • Developing and deepening the markets through introducing new instruments and encouraging financial innovation.

  • The sector specific reform measures aim at:

  • Improving bank’s Efficiency for financing economic growth.

  • Developing and deepening the Insurance Market

  • Deepening and improving the efficiency of Capital Markets on both the equity and fixed income sides.

  • Further activation to, and increasing the efficiency of the Mortgage Market

  • Activating Financial Leasing and Factoring activities


Recent developments in the egyptian economy

GOE’s Stimulus Package

  • Measures aiming at boosting economic growth amid the international financial crisis and its negative implications on developing and emerging countries.

  • Availing and lowering the cost of credit

  • Reducing interest rates.

  • Exempting credit extended to SMEs from the reserve requirement.

  • Increasing public spending and subsidies

  • Investing EGP 30 bn in infrastructure projects (budget and PPP)

  • Sales tax exemptions of a magnitude of EGP 1 bn on capital goods.

  • Full Tariff exemptions on imported capital and 250 items of intermediate goods.

  • Increasing Export subsidies by EGP 2.6 bn.

  • Promoting investments

  • Revising measures that had an adverse impact on investments.

  • Intensifying promotional campaigns.

  • Supporting the Capital Markets

  • More flexibility on dealing on treasury stocks and tender offers

  • More flexibility in reporting financial investments by companies via amendment of the Egyptian Accounting Standard (in compliance with IAS).

  • 5. Legislative reforms


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