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.


China’s car sales decline deepens, road ahead bumpy

Updated 26 min 48 sec ago
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China’s car sales decline deepens, road ahead bumpy

  • ‘Car sales in January continued to decline, and there was no sign of improvement’
  • China has been grappling with slowing economic growth as well as the fallout of trade frictions with the US

SHANGHAI: China’s automobile sales in January tumbled 15.8 percent from a year earlier, the country’s top auto industry association said on Monday, as the world’s largest auto market hits the skids with the slump in sales extending to the seventh month.
China’s Association of Automobile Manufacturers (CAAM) said in an emailed statement to Reuters that sales dropped to 2.37 million vehicles last month. This follows a 13 percent drop in December and a 14 percent fall in November.
“Car sales in January continued to decline, and there was no sign of improvement. We estimate that February wholesales will also drop sharply” said Xu Haidong, CAAM assistant secretary general.
“The reason for the sales drop is still the slowing overall economy, and consumption decline in small and medium-sized cities” Xu said.
China has been grappling with slowing economic growth as well as the fallout of trade frictions with the United States, forces which contributed to its auto market contracting for the first time in more than two decades last year.
Beijing is now trying to persuade consumers to loosen their purse strings and has pledged to provide subsidies to boost rural sales of some vehicles and purchases of new energy vehicles.
“Q1 sales were good last year, so this year the industry expects to have negative growth in the first quarter” Yale Zhang, head of consultancy AutoForesight, said, but he predicts sales to gradually pick up in the next three quarters.
Industry executives also say China’s car sales in January and February tend to be affected by the Lunar New Year holiday, as consumers hold off on their car purchasing decisions around the festival.
The holiday’s dates change annually but tend to occur in either month. It took place in the first week of February this year.
China’s sales of new energy vehicles, however, continued to buck the trend, totaling 95,700 in January, a year-on-year increase of 140 percent, CAAM said.