Egypt’s deficit budget decreases to 4.4%

Egypt’s deficit budget decreases to 4.4%
Egypt’s overall budget deficit has decreased from 4.6% to 4.4%. (Reuters/File)
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Updated 15 February 2021

Egypt’s deficit budget decreases to 4.4%

Egypt’s deficit budget decreases to 4.4%
  • Finance minister and president discuss economic and financial performance indicators

CAIRO: Egyptian Finance Minister Mohamed Maait said that the overall budget deficit had decreased from 4.6 percent to 4.4 percent during the past seven months, compared to the financial indicators of the budget for the last fiscal year.

During a meeting with Egypt’s President Abdel Fattah El-Sisi, Maait discussed the follow-up of “economic and financial performance indicators” during the first seven months of the current fiscal year. He explained that this period had witnessed a primary surplus of LE18.1 billion ($1.16 billion) with an increase of 16 percent in revenues compared to an increase in expenditures of 12.4 percent.
Maait pointed to an increase in the rate and volume of government investments in diverse sectors, especially in infrastructure and services, in addition to an increase in expenditures supporting economic growth by about 23 percent, with a value of LE392 billion.
The minister noted that spending on national programs of social protection had risen by about 24 percent, at a value of LE144 billion.
Maait reviewed future expectations of what the financial and economic indicators of the overall budget would be by the end of the fiscal year 2020/2021 in light of the repercussions of the pandemic, in addition to economic reforms.
A spokesperson for the Egyptian presidency said that the meeting had also reviewed the results of the Ministry of Finance offering dollar bonds in international markets, worth $3.75 billion, in three tranches.

HIGHLIGHT

The latest developments related to the automation and development of the tax system were reviewed during the meeting, including the automation of tax procedures that were launched last month.

Maait had indicated the ministry’s success in the international issuance of bonds at interest rates that are considered the lowest to offer dollar bonds.
The latest developments related to the automation and development of the tax system were also reviewed during the meeting, including the automation of tax procedures that were launched last month.
This was in addition to reviewing the stages of developing the system to move to a new phase in tax administration, including the use of the electronic tax invoice and the electronic receipt system, as well as the restructuring and modernization of the system and tax authority.
El-Sisi has also directed expediting and completing the process of automating and developing all institutions and sectors of the Finance Ministry as planned.
This is to help in the governance of the financial system, in accordance with the best standards, including the customs sector, through the application of the prior information system and pre-release to reduce the customs release time and facilitate the movement of trade to and from Egypt.


Saudi PIF aims to invest $5bn in Oman

Saudi PIF aims to invest $5bn in Oman
Updated 19 sec ago

Saudi PIF aims to invest $5bn in Oman

Saudi PIF aims to invest $5bn in Oman

JEDDAH: Saudi Arabia’s Public Investment Fund is planning to invest SR18.7 billion ($5 billion) in Oman, according to a statement from the two countries.

The plan was announced after the visit of Saudi Crown Prince Mohammed bin Salman to his Middle East neighbor.

There are no details yet as to what industries or companies the money will be invested in.

The announcement comes after the two countries signed 13 memoranda of understanding, reportedly worth more than $30 billion and covering a number of sectors.

The agreements were signed by Omani companies fully owned by the sultanate’s investment authority, the Saudi Press Agency and Omani state TV reported on Monday.


US trade deficit shrinks as exports hit all-time high

US trade deficit shrinks as exports hit all-time high
Updated 44 min 24 sec ago

US trade deficit shrinks as exports hit all-time high

US trade deficit shrinks as exports hit all-time high

Trade deficit in the US shrank significantly in October as exports reached an all-time high of $223.6 billion. 

This reflected a monthly growth rate of 8.1 percent, according to a report from the US Census Bureau and the Bureau of Economic Analysis.

Trade could advance growth for the first time in over a year as the trade deficit slipped to $67.1 billion in October, a 17.6 percent drop compared to the previous month. 

The jump in exports was driven by rising shipments of goods, which grew 11.1 percent to hit $158.7 billion.

In particular, exports of industrial supplies and materials jumped $6.4 billion, while sales of capital goods went up by $3.1 billion. In addition, exports of services increased by $1 billion.

This indicated an improvement in the movement of goods and services after downturns caused by the pandemic, according to Reuters.

In a related development, the US is not expected to impose further lockdowns due to the country’s strong vaccination programs, the head of economists at the White House said. It is expected to weather omicron, the new coronavirus variant, Bloomberg reported.

Meanwhile, imports also reached a record high of $290.7 despite expanding by just 0.87 percent from a month earlier.

Imports of goods rose by $1.8 billion while foreign purchases of services experienced an uptick of $0.7 billion.


Emirates named World Class Airline at APEX awards

Emirates named World Class Airline at APEX awards
Image: Shutterstock
Updated 56 min 21 sec ago

Emirates named World Class Airline at APEX awards

Emirates named World Class Airline at APEX awards
  • It was awarded for its services, products, health, safety, and sustainability efforts

RIYADH: Emirates, the largest airline and one of two flag carriers of the UAE, has been named as World Class Airline at The APEX Official Airline Ratings awards. 

Emirates is one of the first airlines to be recognized in this new category at the APEX awards, the airline said in a statement.

It was awarded for its services, products, health, safety, and sustainability efforts, by independently verified and audited ratings from over a million air travelers.

In addition, Emirates was renewed as Five Star Airline by APEX, and also won its fourth APEX Passenger Choice Award for Best Entertainment at the APEX/IFSA Awards ceremony, the industry’s largest in-person event.

Emirates Airline President Sir Tim Clark, said: “I’m confident the World Class paragon will play a very important role in our industry, helping advance a focus on sustainability for the betterment of our world.”


Commodity trader Trafigura nearly doubles profit to hit record in 2021

Commodity trader Trafigura nearly doubles profit to hit record in 2021
Image: Shutterstock
Updated 08 December 2021

Commodity trader Trafigura nearly doubles profit to hit record in 2021

Commodity trader Trafigura nearly doubles profit to hit record in 2021
  • The COVID-19 pandemic roiled markets last year and saw a number of smaller competitors exit or reduce their business

Global commodity trader Trafigura Group hit a record net profit for a second year running in its 2021 financial year after a strong performance across divisions and significant energy market dislocations.


The Geneva-based firm posted a net profit of $3.1 billion for its financial year ending Sept. 30, almost double the previous year.


“Above all, the scale and resilience of our business benefited from a flight to quality, both in terms of customer relationships and financial liquidity,” Trafigura Chief Executive Jeremy Weir said in the annual report.


The COVID-19 pandemic roiled markets last year and saw a number of smaller competitors exit or reduce their business, allowing bigger players to step in and expand credit lines at banks.


Trafigura’s total earnings before interest, tax, depreciation and amortization (EBITDA) rose 13 percent to $6.9 billion. Its energy segment — mostly oil, refined products and natural gas — contributed 64 percent to the EBITDA.


Its metals and minerals division contributed 36 percent with an “exceptional year” for its copper team due to significant demand growth and a supply deficit.


Group revenue was $231 billion in 2021, up from $147 billion in 2020 when commodity prices crashed due to the COVID-19 pandemic.


The company had impairments of $709 million, down compared with $1.57 billion in 2020. The largest were at loss-making smelting company Nyrstar with $125 million, and at Corpus Christi port in Texas with another $158 million relating to right-of-use assets.


In addition, Trafigura’s income was reduced by a further $716 million after absorbing Puma Energy’s foreign exchange losses though this translated to a increase in group equity.


Trafigura agreed to buy Angola’s state oil firm Sonangol 31.78 percent stake in Puma Energy, a midstream and retain firm, with Trafigura’s stake rising to 93 percent.


Trafigura said the number of employee shareholders has been growing since it bought out the family members of founder and former CEO Claude Dauphin in 2020.

This year employee shareholders hit about 1,000 compared with 850 in 2020.


Pay-outs to employees hit a record of $1.1 billion, nearly double dividends in 2020 at $586 million. Group equity rose 36 percent to over $10 billion.


Its traded oil volume rose 25 percent year-on-year to 7 million barrels per day, growing across regions as global demand recovered with easing lockdowns while its traded non-ferrous metals rose 9 percent to 22.8 million tons and bulk minerals were up 8 percent to 82.7 million tons.


Crude oil volumes grew 22 percent, thanks in part to new offtake agreements in Canada, Latin America and West Africa and a deal to supply Britain’s Lindsey oil refinery.

It added that the Midland shale oil basin in Texas remained core to the business.


China Evergrande shares hit new low amid debt crisis; Kaisa misses pay date

China Evergrande shares hit new low amid debt crisis; Kaisa misses pay date
Image: Shutterstock
Updated 08 December 2021

China Evergrande shares hit new low amid debt crisis; Kaisa misses pay date

China Evergrande shares hit new low amid debt crisis; Kaisa misses pay date
  • Even in the case of a technical default, Kaisa and offshore bondholders would continue the discussions

China Evergrande Group’s shares hit a record low on Wednesday after a missed debt payment deadline put the developer at risk of becoming the country’s biggest defaulter, even as hopes of a managed debt restructuring calmed fears of a messy collapse.


So far, any Evergrande fallout has been broadly contained, and with policymakers becoming more vocal and markets more familiar with the issue, consequences of its troubles are less likely to be widely felt, market watchers have said.


Failure by Evergrande to make $82.5 million in interest payments due Nov. 6 on some US dollar bonds would trigger cross-default on its roughly $19 billion of international bonds, with possible ramifications on China’s economy and beyond.


While the 30-day grace period is over, Evergrande has not announced if the bonds have formally defaulted.


The developer did not immediately respond to a Reuters request for comment.


“Without the official announcement, the market will want to wait and see and not give up yet; otherwise Evergrande’s share and bond prices should have tumbled a lot more,” said Steven Leung, director of UOB Kay Hian in Hong Kong.


“The market also wants to wait and see what can be done with local government stepping in now,” Leung added, referring to the move by Evergrande’s home province to help contain the risk.


Evergrande was once China’s top property developer, with more than 1,300 real estate projects.

With $300 billion of liabilities, it is now at the heart of a property crisis in China this year that has crushed almost a dozen smaller firms.


Trading in shares of embattled smaller peer Kaisa Group Holdings was suspended on Wednesday, after a source with direct knowledge of the matter said it was unlikely to meet its $400 million offshore debt deadline on Tuesday.


Kaisa, China’s largest holder of offshore debt among developers after Evergrande, had not repaid the 6.5 percent bond by the end of Asia business hours, the person said, which could push the notes into technical default, triggering cross defaults on its offshore bonds totalling nearly $12 billion.


Kaisa declined to comment.


Bondholders owning over 50 percent of the notes in question sent the company draft terms of forbearance late on Monday, a source previously told Reuters.


Even in the case of a technical default, Kaisa and offshore bondholders would continue the discussions, two sources with knowledge of the matter said.

Evergrande’s shares, which have given up more than 20 percent this month, were down 6 percent in the afternoon at HK$1.72 — lowest since their November 2009 debut. The broader market was steady.


Its notes due last month, one of two tranches with a coupon payment deadline that passed on Monday, traded at 18.613 cents on the dollar, Duration Finance data showed, versus 18.875 from the close of Tuesday Asia hours.


Kaisa’s bond due April 2022 traded at 36.397, little changed from the day earlier but down from 37.89 last week.


The government has repeatedly said Evergrande’s problems can be contained and moves to boost liquidity in the banking sector along with the firm’s plans to forge ahead with a restructuring of its overseas debt have helped reassure global investors.


The provincial government of Guandong, where Evergrande is based, stepped in last week to help manage the fallout, reinforcing the view that its failure would be managed.