Month: August 2018

– HC Securities & Investment has successfully acted as the exclusive financial advisor to Minapharm Pharmaceuticals and Chemical Industries S.A.E. (MIPH.CA) (www.minapharm.com) on the acquisition of an additional 15.76% of the share capital of its subsidiary Minapharm ProBioGen S.A.E., a company specialized in the R&D and manufacturing of biopharmaceuticals, in a transaction valued at EGP 95 Million. HC Brokerage acted as the broker for both the buyer and the seller.

Post the transaction, Minapharm Pharmaceuticals’ shareholding in Minapharm ProBioGen has increased to 75.01% from 59.25%.

• Egypt’s annual urban inflation decelerated to 13.5% in July from 14.4% in the previous month, while monthly prices increased 2.4% compared with a 3.5% increase in June, according to data published by the Central Agency for Public Mobilization and Statistics (CAPMAS). (Bloomberg, Reuters).

HC’s comment: The monthly inflation figure came higher than HC’s expectations of 1.5% on high food and beverage inflation of 2.1% m-o-m, contributing to 1.15% of the total monthly inflation figure, according to the published breakdown of total inflation, which highly mimicked urban inflation figures.

The second major contributor to the monthly inflation figure was housing and utilities, with prices rising 5.2% m-o-m following a 14.6% increase in the prices of electricity, natural gas, and other fuels products, contributing to 0.56% of the total monthly inflation figure. This was in addition to alcoholic beverages and cigarette prices rising 7.2% m-o-m after cigarette prices increased 7.6% m-o-m to contribute 0.34% of total monthly inflation.

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• Fitch Ratings has affirmed Egypt’s long-term foreign-currency and local-currency issuer default ratings (IDRs) at ‘B’ with a positive outlook, it said in a statement.

The ratings agency forecasts Egypt’s GDP growth at 5.5% in FY18/19 and FY19/20 and sees average inflation to drop to 11.6% in 2019, down from 13% in 2018. Fitch estimates general government debt-to-GDP to fall below 93.6% in FY17/18 from 103% in FY16/17, with further fiscal consolidation to reduce the figure to c88% in FY18/19 and c75% in FY22/23.

HC’s comment: fitch has revised the outlook on Egypt to positive from stable last January on improving macroeconomic stability from a fragile state. Affirming this outlook is a confirmation to the improving macroeconomic fundamentals, which should reflect positively on investor’s perception of Egypt’s risk profile, and should reflect in lower demanded yields on Egypt’s debt instruments.

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