IMF gives Egyptian economic reforms $2bn ‘stamp of approval’

An Egyptian baker is seen beside a vegetable market in Cairo, Egypt. (Reuters)
Updated 11 November 2017
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IMF gives Egyptian economic reforms $2bn ‘stamp of approval’

LONDON: The International Monetary Fund’s (IMF) agreement to provide $2 billion to Egypt as part of a three-year $12 billion loan agreement is a stamp of approval of economic reforms being pushed through under the terms of the deal, commentators said.
The latest payment, which remains subject to IMF executive board approval, will bring total disbursements under the agreement to $6 billion, Reuters reported.
In a statement released following a recent visit to Egypt the fund said, “Egypt’s economy continues to perform strongly, and reforms that have already been implemented are beginning to pay off in terms of macroeconomic stabilization and the return of confidence.”
“While the reform process has required sacrifices in the short term, seizing the current moment of opportunity to transform Egypt into a dynamic, modern, and fast-growing economy will improve the living standards and increase prosperity for all Egyptians.”
Last year, Egypt floated its currency and reduced energy subsidies as part of an ambitious economic reform program outlined under the terms of the loan.
Since then, the Egyptian pound has approximately halved in value and inflation has soared to record highs in what is widely acknowledged to have been a challenging adjustment period.
During a panel discussion on Egypt at the MENA Britain Trade Expo 2017 in London held Friday, Mohamed Farid Saleh, the executive chairman of the Egyptian Exchange, said resolving the fiscal deficit is “not something that can be achieved with a magic wand” but pointed to short-term gains, including easing in inflation moving forward.
Speaking to Arab News ahead of the session, he said economic performance had proved “resilient,” citing the 4.2 percent growth of the Egyptian economy in the fiscal year ending June 2017, exceeded projections of 3.5 percent.
“The reform measures took place despite difficulties on several fronts and the upcoming benefits and potential gains are evident.”
“The government of Egypt is committed to the reform plan to put Egypt on track when it comes to macro-economic settings and macro-economic balances,” he said.
Karim T. Helal, chairman of ADIB Capital, the investment banking arm of Abu Dhabi Investment Bank in Egypt, said the reforms have been difficult but necessary.
“The immediate-term effect has been very painful for the populace in terms of devaluation and the subsequent inflation,” he said.
“It’s a bitter pill to swallow but we had to do it and we are at least showing signs that things are finally heading the right way.”
He described the IMF’s announcement as a “stamp of approval” for Egypt’s progress under the terms of the agreement.
“The fact that the $2 billion has been released now will indicate to the international investment community that the plan put forward at the outset is actually going according to expectations and that Egypt has indeed delivered what it was supposed to deliver,” he said.
Rana Adawi, managing director of Acumen Asset Management, said that the decision came as no surprise in light of Egypt’s success in implementing the required reforms.
“It’s a vote of confidence from the international community that we are committed to change,” she said.
Despite the disturbance created by the currency devaluation last year, the benefits of the move are starting to be felt as businesses take the opportunity to move into the export market, Adawi said.
“The flotation of the Egyptian pound made the country become very competitive in some sectors,” she said.
“You can see the finances of small businesses in the industrial sector going from loss-making to profit-making as a result of the flotation.”
Speaking during the Egypt panel discussion, Helmy Ghazi, managing director and head of global banking at HSBC, said: “The substance of reforms in Egypt are actually quite impressive and we at HSBC are very confident in the outlook and the economic prospects for Egypt.”


CrowdStrike said to hire Goldman Sachs to lead IPO

Updated 20 October 2018
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CrowdStrike said to hire Goldman Sachs to lead IPO

  • IPO could come in first half of next year
  • CrowdStrike raised $200 million in June

NEW YORK: Cybersecurity software maker CrowdStrike Inc. has hired investment bank Goldman Sachs Group to prepare for an initial public offering that could come in the first half of next year, people familiar with the matter said on Friday.
CrowdStrike is aiming to be valued more than the $3 billion funding round assigned to it earlier this year, the sources added.
CrowdStrike’s IPO plans could still change, the sources cautioned, asking not to be identified because the matter is confidential.
CrowdStrike and Goldman Sachs declined to comment.
Sunnyvale, California-based CrowdStrike raised $200 million in June led by investors General Atlantic, Accel and IVP. Other major backers include CapitalG, an investment arm of Google’s parent company Alphabet Inc. and Warburg Pincus.
CrowdStrike uses artificial intelligence for its Falcon platform to prevent attacks on computers on or off the network.
CrowdStrike is trying to stand out from the hundreds of security startups that have sprouted in recent years, promising next-generation technologies to fight cyber criminals, government spies and hacker activists, who have plagued some of the world’s biggest corporations.
The recent crop of publicly listed cybersecurity companies have had a mixed stock performance. Zscaler Inc. went public in the spring and is trading 125 percent above its IPO price. Tenable Holdings Inc. is worth about 25 percent more than its IPO price. Carbon Black shares have been trading below their IPO price.
CrowdStrike was founded in 2012 by two executives who left security software maker McAfee, including George Kurtz, the startup’s chief executive.