Connect with us


Winners Rise Among Cairo Stocks as Egypt Starts to Cut Rates



  • Winners Rise Among Cairo Stocks as Egypt Starts to Cut Rates

Cairo-traded stocks ranging from real-estate to consumer-focused companies, industrials and banks are set to outperform local and emerging-market peers as interest rates drop, analysts and investors predict.

After the Egyptian central bank cut its key rate from a record level last week, investors are likely to scour the stock market to replace returns from high-yielding deposits. Companies will benefit from access to cheaper credit in the Arab world’s most-populous country.

Cairo’s benchmark EGX 30 index has advanced 1.7 percent following the central bank’s 100 basis point reduction in its key rate to 17.75 percent on Feb. 15, the first cut since the currency was floated in November 2016. Since then, the equities gauge has soared more than 70 percent.

Last week’s decision may be the first of several rate reductions as inflation slows, a cycle that will benefit companies “across the board,” says Mohamed Ebeid, joint chief executive officer at the investment bank division of EFG-Hermes Holding SAE. Industrial companies with investment plans will now start putting them into action, said Ahmed Abou El Saad, chairman at Rasmala Egypt Asset Management SAE in Cairo.


Egyptian lenders are likely to maintain high profit levels as an expected pick up in fees and commissions generated by increased lending offsets a gradual narrowing in the interest margins that have boosted earnings, according to Monsef Morsy, head of financials at the research arm of CI Capital Holding SAE in Cairo.

“This is a sign of the shift in monetary policy in Egypt, which is positive for banks,” Morsy said. “We should expect to see throughout 2018 and 2019 a pick up in loan volumes in working capital financing to the corporate segment, and then we should start to see a pick up in capex lending by the first quarter of 2019, when a further decline in rates and more stability in exchange rates are in place.”

Real Estate

Falling rates mean lower borrowing costs for developers and they have “a direct impact on profitability,” according to Tarek Abdel-Rahman, joint CEO of Palm Hills Developments SAE. It’s also likely that, as keeping cash on deposit becomes less appealing, funds will head to what has proved the favorite investment for Egyptians historically: real estate.

“The cycle of easing is starting and so you would find more cash outside the banking sector,” Abdel-Rahman said by phone from Cairo. “There will be more inflows in the real economy in general, and real estate will take a good portion of it.”

Consumer Stocks

While one cut in interest rates may not be enough for producers to resume expansion plans stalled by high borrowing costs, a cycle of reductions by the central bank would inject optimism into a sector hit hard by the plunge in the value of the pound.

“Cutting the interest by one percent isn’t a game changer, but it is positive to show that the cutting trend has begun,” said Ashraf Sharif, vice chairman and managing director of cheesemaker Obour Land for Food Industries. “When there is a decent fall in borrowing costs, it will help enhance our performance.” Lower rates for deposits will increase liquidity and purchasing power, “which will help create a recovery in the market,” he said.


“There are companies that are extremely leveraged and they’ll be able to get refinancing at lower levels,” said Abou El Saad of Rasmala Egypt Asset Management. “Companies working with heavy industries that have strong capex plans will see this is as a catalyst to start putting their growth and expansion plans into action.”

Abou El Saad favors companies “going for expansion” within the industrial and petrochemical universe, because the rate cuts “won’t be a one time event. It actually will boost these companies for years, rather than just a momentum-driven jump.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading

Crude Oil

Nigeria Pumps 236.2 Million Barrels in First Half of 2024



markets energies crude oil

Nigeria pumped 236.2 million barrels of crude oil in the first half of 2024, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

This figure represents an increase from the 219.5 million barrels produced during the same period in 2023.

In January, Nigeria produced 44.2 million barrels of crude oil while February saw a slight dip to 38.3 million barrels, with March following closely at 38.1 million barrels.

April and May production stood at 38.4 million barrels and 38.8 million barrels, respectively. June’s output remained consistent at 38.3 million barrels, demonstrating a stable production trend.

Despite the overall increase compared to 2023, the 2024 production figures still fall short of the 302.42 million barrels produced in the same period in 2020.

This ongoing fluctuation underscores the challenges facing Nigeria’s oil sector, which has experienced varying production levels over recent years.

On a daily basis, Nigeria’s crude oil production showed some variability. In January, the average daily production peaked at 1.43 million barrels per day (mbpd), the highest within the six-month period.

February’s production dropped to 1.32 mbpd, with a further decrease to 1.23 mbpd in March. April saw a modest increase to 1.28 mbpd, which then fell again to 1.25 mbpd in May. June ended on a positive note with a slight rise to 1.28 mbpd.

The fluctuations in daily production rates have prompted government and industry leaders to address underlying issues.

Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), has highlighted the detrimental effects of oil theft and vandalism on Nigeria’s production capabilities.

Kyari emphasized that addressing these security challenges is critical to boosting production and attracting investment.

Kyari also noted recent efforts to combat illegal activities, including the removal of over 5,800 illegal connections from pipelines and dismantling more than 6,000 illegal refineries.

He expressed confidence that these measures, combined with ongoing policy reforms, would support Nigeria’s goal of increasing daily production to two million barrels.

The Nigerian government remains focused on stabilizing and enhancing oil production. With recent efforts showing promising results, there is cautious optimism that Nigeria will achieve its production targets.

Continue Reading

Crude Oil

Oil Prices Steady Amid Mixed Signals on Crude Demand



Crude oil

Oil prices remained stable on Thursday as investors navigated conflicting signals regarding crude demand.

Brent crude oil, against which Nigerian oil is priced, settled at $85.11 a barrel, edging up by 3 cents, while U.S. West Texas Intermediate (WTI) crude dipped by 3 cents to $82.82 a barrel.

The stability comes as the U.S. economy shows signs of slowing, with unemployment benefit applications rising more than expected.

Initial claims increased by 20,000 to a seasonally adjusted 243,000 for the week ending July 1, prompting speculation that the Federal Reserve might cut interest rates sooner than anticipated. Lower rates could boost spending on oil, creating a bullish outlook for demand.

Fed officials suggested that improved inflation and a balanced labor market might lead to rate cuts, possibly by September.

“Healthy expectations of a Fed rate cut in the not-so-distant future will limit downside,” noted Tamas Varga of oil broker PVM.

However, rising jobless claims signal potential economic easing, which could dampen crude demand.

John Kilduff of Again Capital highlighted the impact of a slowing economy on oil consumption despite a significant drop in U.S. crude inventories last week.

Global factors also weighed on the market. China’s economic policies remain steady, though details are sparse, affecting investor sentiment in the world’s largest crude importer.

Meanwhile, the European Central Bank maintained interest rates, citing persistent inflation.

An upcoming OPEC+ meeting in August is expected to assess market conditions without altering output policy, according to sources. This meeting will serve as a “pulse check” for market health.

Overall, oil prices are caught between economic concerns and hopes of a rate cut, maintaining a delicate balance.

Continue Reading

Crude Oil

Oil Prices Slide on China Demand Concerns, Brent Falls to $83.73



Crude Oil - Investors King

Oil prices declined on Tuesday for the third consecutive day on growing concerns over a slowing Chinese economy and its impact on global oil demand.

Brent crude oil, against which Nigerian oil is priced, dipped by $1.12, or 1.3% at $83.73 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped $1.15, or 1.4%, to close at $80.76.

The dip in oil prices is largely attributed to disappointing economic data from China, the world’s second-largest economy.

Official figures revealed a 4.7% growth in China’s GDP for the April-June period, the slowest since the first quarter of 2023, and below the forecasted 5.1% growth expected in a Reuters poll.

This slowdown was compounded by a protracted property downturn and widespread job insecurity, which have dampened fuel demand and led many Chinese refineries to cut back on production.

“Weaker economic data continues to flow from China as continued government support programs have been disappointing,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial. “Many of China’s refineries are cutting back on weaker fuel demand.”

Despite the bearish sentiment from China, there is a growing consensus among market participants that the U.S. Federal Reserve could begin cutting its key interest rates as soon as September.

This speculation has helped stem the decline in oil prices, as lower interest rates reduce the cost of borrowing, potentially boosting economic activity and oil demand.

Federal Reserve Chair Jerome Powell noted on Monday that the three U.S. inflation readings over the second quarter “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target in a sustainable fashion.

This has led market participants to believe that a turn to interest rate cuts may be imminent.

Also, U.S. crude oil inventories provided a silver lining for the oil market. According to market sources citing American Petroleum Institute figures, U.S. crude oil inventories fell by 4.4 million barrels last week.

This was a much steeper drop than the 33,000 barrels decline that was anticipated, indicating strong domestic demand.

The International Monetary Fund (IMF) also weighed in, suggesting that while the global economy is set for modest growth over the next two years, risks remain.

The IMF noted cooling activity in the U.S., a bottoming-out in Europe, and stronger consumption and exports for China as key factors in the global economic landscape.

In summary, while oil prices are currently pressured by concerns over China’s economic slowdown, the potential for U.S. interest rate cuts and stronger domestic demand for crude are providing some support.

Market watchers will continue to monitor economic indicators and inventory levels closely as they gauge the future direction of oil prices.

Continue Reading