Egypt offers $820m worth of treasury bonds

Egypt offers $820m worth of treasury bonds
The headquarters of Central Bank is seen in downtown. (File: Reuters)
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Updated 01 March 2021

Egypt offers $820m worth of treasury bonds

Egypt offers $820m worth of treasury bonds

CAIRO: Egypt is offering treasury bonds worth EGP13 billion ($820 million) in a bid to finance the country’s budget deficit.

The Central Bank of Egypt on Monday announced that the value of the first offering amounted to EGP5 billion for a period of three years. The second offering would be EGP7 billion for a period of seven years and the third around EGP1 billion for a 15-year term.

The Egyptian Ministry of Finance recently announced the possibility of reducing the acceptable quantities of bids for bills and bonds on the public treasury, issued in local currency, until the end of the current fiscal year.

Egypt’s deficit rose to $2.8 billion in the July-September quarter, up from $1.4 billion in the same quarter of 2019, as the North African country felt the economic impact of the coronavirus disease (COVID-19) pandemic.

Revenues from tourism fell by almost 70 percent last year, while net foreign direct investment was down 31 percent year-on-year to $1.6 billion, Reuters reported in January.

In May, the International Monetary Fund (IMF) approved Egypt’s request for emergency financial assistance of $2.772 billion to combat the impact of the pandemic.

“The government of Egypt has responded to the crisis with a comprehensive package aimed at tackling the health emergency and supporting economic activity,” Geoffrey Okamoto, first deputy managing director of the IMF, said at the time.

“As the crisis abates, measures to lower the debt level would need to resume along with continued implementation of structural reforms to increase the role of the private sector to achieve higher and inclusive private sector-led growth and job creation, unlocking Egypt’s growth potential and entrenching resilience,” he added.


Barclays, RBS, HSBC, Credit Suisse fined 344m euros for forex cartel

Barclays, RBS, HSBC, Credit Suisse fined 344m euros for forex cartel
European Flags in front of the European Commission Headquarters building in Brussels. Shutterstock
Updated 6 sec ago

Barclays, RBS, HSBC, Credit Suisse fined 344m euros for forex cartel

Barclays, RBS, HSBC, Credit Suisse fined 344m euros for forex cartel
  • HSBC’s fine was the largest at 174.3 million euros

European Union antitrust regulators fined Barclays, Credit Suisse, HSBC and RBS a total of 344 million euros ($390 million) on Thursday for rigging the foreign exchange spot trading market.


UBS avoided a 94 million euro fine as it had alerted the European Commission about the cartel. The EU competition regulator said the cartel had focused on forex spot trading of G10 currencies.


HSBC’s fine was the largest at 174.3 million euros, followed by Credit Suisse at 83.3 million euros, Barclays at 54.3 million and RBS at 32.5 million.


Barclays, HSBC and RBS admitted wrongdoing in return for a cut in the penalty. RBS is now known as NatWest following a rebranding last year.


The fines are the latest to hit banks, which have received billions of euros in penalties worldwide over more than a decade for the rigging of benchmarks used in many day-to-day financial transactions.


“Today we complete our sixth cartel investigation in the financial sector since 2013 and conclude the third leg of our investigation into the foreign exchange spot trading market,” EU antitrust chief Margrethe Vestager said in a statement.


World food prices climb in November, stay at 10-year peak: FAO

World food prices climb in November, stay at 10-year peak: FAO
Image: Shutterstock
Updated 6 min 50 sec ago

World food prices climb in November, stay at 10-year peak: FAO

World food prices climb in November, stay at 10-year peak: FAO
  • Agricultural commodity prices have risen steeply in the past year

World food prices rose for a fourth straight month in November to remain at 10-year highs, led by strong demand for wheat and dairy products, the UN food agency said on Thursday.


The Food and Agriculture Organization’s food price index, which tracks international prices of the most globally traded food commodities, averaged 134.4 points last month compared with a revised 132.8 for October.


The October figure was previously given as 133.2.


The November reading was the highest for the index since June 2011. On a year-on-year basis, the index was up 27.3 percent last month.


Agricultural commodity prices have risen steeply in the past year, driven by harvest setbacks and strong demand.


The FAO’s cereal price index rose by 3.1 percent in November from the previous month and was 23.2 percent higher than its year-ago level, with wheat prices hitting their highest level since May 2011.


FAO said wheat prices were supported by concerns about unseasonable rains in Australia and uncertainty over potential changes to export measures in Russia.


The dairy price index posted the largest monthly rise, up 3.4 percent from the previous month.

“Strong global import demand persisted for butter and milk powders as buyers sought to secure spot supplies in anticipating of tightening markets,” FAO said.


Global sugar prices rose 1.4 percent on the month and was up nearly 40 percent year-on-year. “The increase was primarily driven by higher ethanol prices,” FAO said.


The meat price index posted its fourth consecutive monthly decline, shedding 0.9 percent on the month, while world vegetable oil prices fell 0.3 percent on October levels, but international palm oil prices remained firm, FAO said.


Rome-based FAO cut its projection of global cereal production in 2021 to 2.791 billion tons from 2.793 billion estimated a month ago, according to its cereal supply and demand outlook 


However, the expected world cereal output would still represent a record, FAO said.


“The month-to-month downgrade is primarily the result of an anticipated marginally smaller global coarse grains outturn, reflecting reduced forecasts for barley and sorghum production,” FAO said.


World cereal utilization in 2021/22 was forecast to rise by 1.7 percent above the 2020/21 level, hitting 2.810 billion tons.

FAO’s forecast for world cereal stocks by the close of seasons in 2022 stood at 822 million tons, up 2.9 million tons since November but still down 0.7 percent from opening levels. 


GCC economies to witness an aggregate growth rate of 2.6% in 2021, says World Bank

GCC economies to witness an aggregate growth rate of 2.6% in 2021, says World Bank
Updated 23 min 22 sec ago

GCC economies to witness an aggregate growth rate of 2.6% in 2021, says World Bank

GCC economies to witness an aggregate growth rate of 2.6% in 2021, says World Bank

RIYADH: Gulf Cooperation Council economies are likely to achieve an aggregate growth rate of 2.6 percent in 2021, according to the World Bank Gulf Economic Update issued on Thursday.

The report, titled “Seizing the Opportunity for a Sustainable Recovery”, attributed the rebound to stronger oil prices and the growth of non-oil sectors. 

It predicted the trend is likely to continue into 2022 as “OPEC+ mandated oil production cuts are phased out and higher oil prices improve business sentiment and attract additional investment.”

It added that the outlook in the medium term is subject to risks from slower global recovery, renewed coronavirus outbreaks, and oil sector volatility.

The report also identified large wage bills as a threat to the GCC economies. “With high population growth and limited options in the private sector, the wage bill has become unsustainable in some GCC countries, as it is a large part of government spending and of the economy overall,” said Issam Abousleiman, World Bank’s regional director for the GCC.

The average GCC wage bill has surpassed the Organization for Economic Co-operation and Development’s average over the past two decades, except in Qatar and the UAE, the report showed.

In the Kingdom, allowances for civil servants rose to SR148 billion ($39 billion) in 2019 from SR44 billion in 2016, forming more than a third of the Kingdom’s total wage bill.

Also, salaries and benefits allocation in Kuwait’s 2022 budget amounted to 55 percent of its total expenditure, while Oman’s wage bill has doubled in the past decade.


OPEC+ oil output decision in the balance as Omicron hammers prices

OPEC+ oil output decision in the balance as Omicron hammers prices
Image: Shutterstock
Updated 27 min 11 sec ago

OPEC+ oil output decision in the balance as Omicron hammers prices

OPEC+ oil output decision in the balance as Omicron hammers prices
  • Two OPEC+ sources said the group would discuss pausing the January increase as an option

OPEC and its allies will decide on Thursday whether to release more oil into the market or restrain supply amid big gyrations in crude prices, a US release from oil reserves and fears over the new Omicron coronavirus variant.


Brent has tumbled to about $70 a barrel, down from October’s three-year highs above $86.

Prices in November registered their biggest monthly decline since the start of the pandemic as the Omicron variant raised fears of a glut.


The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have resisted US requests for speedier increases in oil output to support the global economy.


Producers have said they did not want to hamper a fragile energy industry recovery with oversupply.


Under its existing pact, OPEC+ agreed to raise output by 400,000 barrels per day (bpd) each month, winding down record cuts agreed in 2020 when demand crashed because of the pandemic.


But market uncertainties leave its next move in the balance.


Two OPEC+ sources said the group would discuss pausing the January increase as an option, while two sources said they expected the 400,000 bpd rise to go ahead. One source even said he expected a cut in production, without giving any figures.


Russia and Saudi Arabia, the biggest OPEC+ producers, said before this week’s talks, which began with an online OPEC meeting on Wednesday, that there was no need for a knee-jerk reaction to amend policy.


OPEC+ experts said in a report seen by Reuters on Wednesday that the impact from Omicron was not yet clear, even though many countries were introducing lockdowns and other restrictions.


Even before concerns about Omicron emerged, OPEC+ had been weighing the effects of last week’s announcement by the United States and other major consumers that they would release emergency crude reserves to temper energy prices.


US President Joe Biden’s administration could adjust the timing of any release if prices dropped substantially, US Deputy Energy Secretary David Turk told Reuters on Wednesday.


OPEC+ forecast a 3 million bpd surplus in the first quarter of 2022 after the release of reserves, up from a 2.3 million bpd surplus previously forecast.


Last year, OPEC+ made record output cuts of 10 million bpd, equivalent to about 10 percent of global supply. It has scaled those back so cuts still in place now stand at about 3.8 million bpd.


However, OPEC+ has been regularly producing below its target level as some members have struggled to rebuild output, producing about 700,000 bpd less than planned in both September and October, the International Energy Agency (IEA) says.


Saudi Arabia seeks public opinion on hydrogen vehicles rules

Saudi Arabia seeks public opinion on hydrogen vehicles rules
Updated 34 min 42 sec ago

Saudi Arabia seeks public opinion on hydrogen vehicles rules

Saudi Arabia seeks public opinion on hydrogen vehicles rules

JEDDAH: Saudi Arabia is asking the public to give its views on the safety standards for hydrogen vehicles in the Kingdom.

The Saudi Standards, Metrology, and Quality Organization wants the public to participate in the poll through the government’s Public Consultation Platform, Istitlaa, ending on Dec. 16, 2021.

The regulations aim to define the basic requirements for the safety of hydrogen-powered vehicles, and ensure that conformity assessment procedures are followed during the placement of these vehicles in the Kingdom’s markets.

Hydrogen-powered vehicles must also comply with the requirements of the technical regulations for electric vehicles.

Saudi Arabia has already put itself on the path to adopting EVs and the Saudi Standards, Metrology, and Quality Organization has approved importing these vehicles.