Month: July 2018

• Egypt’s passenger car sales rose c70% y-o-y to 11,593 cars in June compared to a c55% y-o-y increase to 10,994 cars in the previous month, according to a report by the Automotive Marketing Information Council (AMIC). Bus sales also rose c15% y-o-y to 1,314 buses, according to the report. (AMIC).

HC’s comment: Local passenger car (PC) sales grew c63% y-o-y to 32,981 cars in 2Q18, coming in c24% above HC’s estimate of 26,652 cars, with completely built-up (CBU) vehicle sales c64% above HC’s estimate, while completely knocked-down (CKD) vehicle sales were c10% lower than our forecast. Initial numbers from the AMIC report show Hyundai sales grew c98% y-o-y to 8,418 cars, c52% above HC’s estimate of 5,539 cars. This implies a market share of 25.5% for the quarter, which is 4.7 pp higher than HC’s estimate and 4.6 pp higher than a year earlier. Geely sales came in c85% lower than HC’s estimate (a c87% y-o-y drop) to stand at 78 cars, while Chery sales came in c16% lower than forecasted (c1% y-o-y drop) to stand at 1,226 cars in 2Q18. Mazda sales dropped c11% y-o-y to 214 cars, beating HC’s estimate by c18%. GB Auto’s (AUTO EY) total market share in 2Q18 stood at 30.1%, which is 1.3 pp above HC’s estimate, but 1.2 pp lower than a year earlier.

• The Egyptian government is targeting GDP growth of 8% by FY21/22 in its 4-year program, up from growth of 5.4% during FY17/18, according to the prime minister.

The government is also planning to reduce domestic debt to no more than 90% of GDP by the end of FY19/20, and further cut it to 80%–85% by the end of the program during FY21/22, he added. The country aims to reduce the budget deficit to 6% of GDP and achieve a surplus of 2% by the end of the program, and to reduce unemployment to 8% from 10.6% last fiscal year. The program also calls for eliminating subsidies and allocating the funds to those who absolutely need it, he added.

Some 85% of Egypt’s economic reform program has already been implemented, and the government will take urgent measures to support citizens and mitigate the burden associated with the reform program, according to the prime minister. (Bloomberg, Mubasher).

Egypt received the fourth USD2bn tranche of the International Monetary Fund’s (IMF) USD12bn Extended Fund Facility (EFF) on Friday, according to an unnamed senior official source. (Al Masry Al Youm).

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• Egypt reported a balance of payments (BOP) surplus of USD5.4bn in 3Q17/18, up from a surplus USD4.1bn a year earlier and USD0.5bn in the previous quarter, data posted by the CBE showed. (CBE).

HC’s Comment: Egypt’s capital and financial account registered net inflows of USD8.6bn, up from USD7.0bn in 3Q16/17. This increase was largely due to the issuance of Egyptian Euro bonds worth USD3.3bn in 3Q17/18, and an increase in long-term borrowings of USD3.1bn in 3Q17/18, compared with USD1.8bn a year earlier. Despite net foreign direct investments (FDIs) decreasing 2.2% y-o-y to USD2.2bn in 3Q17/18, they fully covered the current account deficit for the same period, which narrowed to USD1.9bn from USD3.7bn last year. Egypt’s trade balance deficit widened slightly to USD9.3bn from USD8.4bn a year earlier, mainly on the back of the non-oil trade deficit widening to USD8.0bn from USD7.2bn. The services balance recorded a surplus of USD865m in 3Q17/18, down from USD1.0bn a year earlier, mainly on increased payments.
Net unrequited transfers increased c77% y-o-y to USD6.5bn in 3Q17/18.

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