Egypt said to propose production cuts to ease cement glut

Egypt said to propose production cuts to ease cement glut
Egypt may cut cement production to ease a glut of the building material. (Supplied)
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Updated 10 May 2021

Egypt said to propose production cuts to ease cement glut

Egypt said to propose production cuts to ease cement glut
  • Capacity has risen to an annual 85 million to 87 million tons in the last three years

CAIRO: The Egyptian government has proposed that cement makers cut production by a baseline of 10 percent to shore up finances ravaged by an expanding market glut, two cement executives and a senior industry source said.
Egyptian cement capacity has risen to an annual 85 million to 87 million tons in the last three years following the inauguration of the 13 million ton-per-annum Beni Seuf plant owned by the military, even as sales fell to less than half that level, according to the executives.
The cement sector, where several international firms established a footing, is seen as an indicator of Egypt’s openness to outside investment.
The two executives — who spoke on condition of anonymity — said the proposed cuts seemed unfair on foreign-owned firms like their own with a longer presence in Egypt.
Egypt’s Ministry of Trade and Industry did not respond to a request for comment.
Under the formula proposed last month, each cement maker would cut production by a base amount of 10.52 percent. They would cut an additional 3.71 percent for each production line and 0.65 percent for each year they have been in operation, said one executive.
That would amount to a cut of at least 14 percent, and possibly more than double that for older and bigger plants, the person said.
It is unclear if the beginning of operation would be based on the age of the plant, the date it was privatised or when current investors took over, the executive added.
“It’s very welcome by the industry that there is some sort of intervention by the government,” said the second executive.
But he added: “We don’t think (the formula) is particularly fair, it’s biased toward some local players at the moment.”
The executives said cement makers have asked the government for clarifications and were waiting to hear back.
Foreign cement firms, including Germany’s HeidelbergCement , France’s Vicat, Switzerland’s LafargeHolcim , Greece’s Titan Cement and Mexico’s CEMEX , invested heavily in Egypt after a privatization drive that began in the 1990s. Local players set up their own plants later.
Another 2-million-ton plant will come on stream this year in Sohag, 400 km south of Cairo, its CEO and member of parliament Ahmed Abu Hashima told local media in September.
The plant, owned by Egyptian Cement Co., began trial production over the last few weeks and is due to start shipping soon, cement sources in Sohag said. Company officials did not respond to queries.
Cement companies complained of overproduction even before the Beni Suef plant was built.
Annual cement sales fell to 41.7 million tons in 2020 from 43.8 million tons in 2019, according to central bank statistics. It stood at 49.5 million tons in 2017, the last year before Beni Suef went online. Sales last year were hurt by the coronavirus pandemic.


Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable
Updated 15 min 52 sec ago

Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable

RIYADH: Fitch Ratings has revised Commercial International Bank (Egypt) S.A.E.’s (CIB) outlook to stable from negative while affirming the bank’s long-term issuer default rating at “B+” and viability rating at “b+.” 

According to the ratings firm, pressures on the domestic environment have eased since the end of the third quarter of 2020 moderating downside risks to Egyptian banks’ credit profiles.

It said this reflects improving foreign currency liquidity, with the banking sector’s net foreign assets reaching $3.5 billion in April 2021, a reversal of a net foreign liability position of $5.3 billion at the end of April 2020. This was supported by a strong increase in foreign holdings of Egyptian treasuries to $29 billion in May 2021.

Fitch expects real GDP growth to accelerate to 6 percent in 2022.


Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion
Updated 20 min 21 sec ago

Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion

CAIRO: Egypt’s domestic liquidity rose to EGP 5.36 trillion ($213.9 billion) at the end of June 2021.

According to the official data, liquidity grew by 1.9 percent monthly. Domestic liquidity increased by 18.3 percent annually, compared to EGP 4.53 trillion in June 2020.

The money supply rose during June to EGP 1.25 trillion, compared to EGP 1.22 trillion in May 2021.  Money supply includes deposits in local currency and cash in circulation outside the banking system.

Last November, the Central Bank of Egypt decided to reduce both the overnight deposit and lending rate and its main operation rate by 50 basis points, to 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

Last month, the central bank froze the interest rate for the fourth time this year.


Saudi Arabia reiterates its commitment to fight climate change

Saudi Energy Minister Abdulaziz Bin Salman. (REUTERS file photo)
Saudi Energy Minister Abdulaziz Bin Salman. (REUTERS file photo)
Updated 02 August 2021

Saudi Arabia reiterates its commitment to fight climate change

Saudi Energy Minister Abdulaziz Bin Salman. (REUTERS file photo)
  • Prince Abdul Aziz and Sharma discussed the framework of the circular carbon economy adopted by G20 leaders during Saudi Arabia’s presidency in 2020

RIYADH: Saudi Energy Minister Prince Abdul Aziz bin Salman recently held a meeting with COP26 President-designate Alok Sharma and discussed ways to enhance cooperation in confronting global climate change.
The Saudi minister highlighted the Kingdom’s qualitative initiatives to help reduce emissions and preserve the environment, foremost of which are the Saudi Green and Middle East Green initiatives.
Saudi Crown Prince Mohammed bin Salman launched these initiatives on March 27. These initiatives are aimed at reducing carbon emissions in the region by 60 percent through the use of clean hydrocarbon technologies and the planting of 50 billion trees, including 10 billion in Saudi Arabia.
The “green” initiatives, which are part of the Vision 2030 strategy, will place Saudi Arabia at the center of regional efforts to meet international targets on climate change mitigation, as well as help it achieve its own goals.
Prince Abdul Aziz and Sharma also discussed the framework of the circular carbon economy adopted by G20 leaders during Saudi Arabia’s presidency in 2020.
While the Gulf Cooperation Council (GCC) region has long been a leading global supplier of fossil fuels, renewables are complementing its own energy mix, offering eco-friendly alternatives such as clean hydrogen fuel to decarbonize and reduce gas emissions.
With around 70 to 90 percent of the Arabian Peninsula facing the threat of desertification, owing to past and ongoing human activities, massive afforestation, and land restoration initiatives hold hope for millions of hectares of degraded land.
Unfortunately, in a G20 meeting held in Italian city, Naples on July 22-23, energy and environment ministers failed to agree on the wording of key climate change commitments in their final communique after China and India refused to give way on two key points.
One of these was phasing out coal power, which most countries wanted to achieve by 2025 but some said would be impossible for them.
The other concerned the wording surrounding a 1.5-2 degree Celsius limit on global temperature increases that was set by the 2015 Paris Agreement.
Average global temperatures have already risen by more than 1 degree compared to the pre-industrial baseline used by scientists and are on track to exceed the 1.5-2 degree ceiling.
“Some countries wanted to go faster than what was agreed in Paris and to aim to cap temperatures at 1.5 degrees within a decade, but others, with more carbon-based economies, said let’s just stick to what was agreed in Paris,” said Italy’s Ecological Transition Minister Roberto Cingolani.
The G20 meeting was seen as a decisive step ahead of United Nations climate talks, known as COP26, which take place in 100 days’ time in Glasgow in November.


Saudi CITC pushes for more tech listings on Tadawul

Saudi CITC pushes for more tech listings on Tadawul
Updated 02 August 2021

Saudi CITC pushes for more tech listings on Tadawul

Saudi CITC pushes for more tech listings on Tadawul
  • The CITC is aiming to enhance the investment environment in the telecoms and IT sectors

RIYADH: Saudi Arabia’s Communications and Information Technology Commission (CITC) signed an initial agreement with the Saudi Stock Exchange pushing for more listing of technology operators in the Kingdom on the Saudi stock market.

The CITC is aiming to enhance the investment environment in the telecommunications and information technology sector, the postal sector and delivery applications, SPA reported.

Financial market listings provide greater investment opportunities and helps companies to expand and enter new markets, and develop products, CITC said.

It also contributes to strengthening corporate governance with a regulatory framework of high quality and institutional value.

This agreement comes in line with the Vision 2030 objectives aimed at making the Kingdom a leading global logistics platform and a connecting hub for the three continents.


Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA
Updated 02 August 2021

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA
  • Saudi banks and financial institutions lent SR79 billion for residential mortgages H1 2021

RIYADH: Residential mortgage financing in Saudi Arabia jumped by more than a quarter in the first half of the year even as new lending slowed in the second quarter, central bank data showed.

Saudi banks and financial institutions lent SR79 billion for residential mortgages in the first six months of 2021, up from SR62.1 billion in the same period last year, SAMA said in its monthly bulletin. The number of transactions increased 14.2 percent to 153,054 in the period.

The value of mortgages provided in the second quarter slid to SR31.1 billion riyals from SR49 billion in the first quarter as the supply of new properties fell amid changes to the building code.

“The number of contracts increased in the first half, but temporarily decreased in the past three months, but due to the reorganization of property evaluation by the Real Estate Fund, and the application of the new Saudi building code with the temporary ambiguity until it is well understood, and the lack of supply of ready housing units,” Mohamed AlKhars, a member of the housing program advisory board and the chairman of Innovest Property Co. told Arab News.

“I expect the volume of financing and the number of contracts to gradually increase in the fourth quarter of 2021,” he said.

Financing for villas accounted for 80 percent of residential real estate loans in the first half of the year, with 15.9 percent for apartments and the remainder for land, the SAMA data showed.

“Villas are still more desired by citizens and more available in the market, and apartment supply is still low now, as the developers are still focusing on building villas due to low interest in apartments which might continue for a while,” AlKhars said.

The mortgage market has seen stratospheric growth since SAMA began collecting the data in 2016 when a total of 22,259 real estate loans were issued. In 2019, that number jumped to 179,220 from 50,496 the previous year, before reaching 295,590 in 2020.