Egypt’s parliament passes $11 billion sovereign wealth fund

Egypt floated its pound currency in November 2016 under a three-year $12 billion IMF program tied to ambitious economic reforms. (AFP)
Updated 17 July 2018
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Egypt’s parliament passes $11 billion sovereign wealth fund

  • The fund will be eligible to participate in all economic and investment activities, including setting up companies and investing in financial instruments
  • Egypt floated its pound currency in November 2016 under a three-year $12 billion IMF program tied to ambitious economic reforms

CAIRO: Egypt is setting up a sovereign wealth fund with a capital of 200 billion Egyptian pounds ($11 billion), the state news agency said on Tuesday.
Former Public Enterprise Minister Khaled Badawi said in March that Egypt was discussing setting up a sovereign wealth fund to manage state companies it plans to list on the stock exchange.
The agency, MENA, did not specifically mention the privatization program, but said: “The fund aims to contribute to sustainable economic development through management of its funds and assets.”
The fund will be eligible to participate in all economic and investment activities, including setting up companies, investing in financial instruments, and other debt instruments in Egypt and abroad, the statement said.
The law, passed by parliament on Monday, approved a 5 billion Egyptian pound start-up capital for the fund called “Egypt Fund,” with 1 billion pounds to be transferred immediately from the treasury, MENA said.
Al-Borsa, a local financial newspaper, quoted Amr El-Gohary, a member of the parliament’s economic committee, as saying that the balance from the start-up capital will be paid over three years as part of the government investment plans.
MENA said the law allowed the president to transfer ownership of any unutilized state assets to the fund or any of its subsidiaries.
It gave no details of when it the fund was envisaged to reach 200 billion Egyptian pounds.
Egypt’s parliament last year passed a long-delayed investment law to streamline doing business in Egypt and to create incentives it hopes will bring back investors’ dollars after years of turmoil.
Egypt floated its pound currency in November 2016 under a three-year $12 billion IMF program tied to ambitious economic reforms, part of a bid to restore capital flows that dried up after its 2011 uprising drove away investors and tourists.


Australia overtakes Qatar as top global LNG exporter

Updated 45 min 24 sec ago
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Australia overtakes Qatar as top global LNG exporter

  • Australia shipped 6.79 million tons of LNG in November while Qatar exported 6.2 million tons
  • Australia has invested heavily in a number of LNG export projects over the last few years

LONDON: Australia has become the largest exporter of liquefied natural gas (LNG) in the world, overtaking Qatar for the first time, according to data published on Monday.

Australia shipped 6.79 million tons of LNG in November while Qatar exported 6.2 million tons, according to Refinitiv Eikon, the financial data arm of Thomson Reuters.

While LNG exports from Australia increased by more than 15 percent from the previous month, Qatar’s exports dropped by 3 percent.

Australia has invested heavily in a number of LNG export projects over the last few years. Just last month, the first LNG shipment left the country’s new offshore Ichthys project on the northwestern coast of Australia.

Analysts expect Australia will look to maintain its lead ahead of the Qataris.

“Competition between Qatar and Australia for the share of global LNG market is set to intensify further,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s global gas analytics in London.

“Australia has boosted its market share in recent years by bringing online a slew of LNG export projects. This is in stark contrast with the situation in Qatar where the export capacity has remained around 77 million tons per annum,” he said.

Ehsan Khoman, head of regional research and strategy at MUFG, in Dubai, said Australia has an advantage over Qatar due to it being geographically closer to major gas importers.

“The lower transportation freight costs will remain the backbone of Australia comparative advantage as an exporter vis-à-vis Qatar, given the country’s closer proximity to the largest LNG importers in Asia, namely, Japan, China and South Korea,” he said.

Rising LNG exports from US will add to the global market competition, he said.

“Going forward, the LG space is likely to undergo a major transformation driven by new supplies coming from the US, with our expectation of a three-way tug of war between the US, Australia and Qatar to intensify in the medium term for global leadership among LNG exporters, notably for a larger share of the key market in Asia.”

The data follows Qatar’s announcement last week that it would leave the Organization of Petroleum Exporting Countries (Opec) in early 2019 to focus on gas production.

Kumar said he expects Qatar to ramp up efforts to maintain its market position as competition grows from other exporters.

“Qatar has plans to vigorously defend its market share in the coming years as it is moving ahead with expanding the capacity of its Ras Laffan plant to around 110 million tons per annum by the end of 2025 or early 2026,” he said.