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USD CBE auction (Tuesday, 20 Sep): 8.78 (unchanged since 16 March 2016)
USD parallel market (Monday, 26 Sep): 12.87 (from 12.85 on Sunday, 25 Sep, Al Mal)

EGX30 (Monday): 7,974.8 (+0.9%)
Turnover: EGP 542.7 mn (25% above the 90-day average)
EGX 30 year-to-date: +13.8%

Foreigners: Net Short | EGP -53.6 mn
Regional: Net Long | EGP +86.0 mn
Domestic: Net Short | EGP -32.4 mn

Retail: 46.9% of total trades | 45.5% of buyers | 48.2% of sellers
Institutions: 53.1% of total trades | 54.5% of buyers | 51.8% of sellers

Foreign: 33.3% of total | 28.4% of buyers | 38.2% of sellers
Regional: 15.7% of total | 23.6% of buyers | 7.8% of sellers
Domestic: 51.0% of total | 48.0% of buyers | 54.0% of sellers

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PHAROS VIEW

MPC Maintains Rates: Implications and What Next?

The MPC maintained rates last Thursday noting that the inflation spike witnessed in August was caused by “transitory cost-push factors” rather than demand factors, meaning raising rates would not control inflation. We have noted that interest rate has not been an effective tool to control inflation as it is driven largely by the exchange rate from the importation bill. Concerns over weakened real GDP growth impacted the decision, in light of the current weakness in investment expenditure. Additionally, raising interest rates would add to the debt service burden, which currently represents c. 30% of fiscal expenses. We had noted that the Industrial Production Index depicts weak growth figures over the last three quarters, due to the FX shortage overhang. Tap here to read the full note, in which Head of Research Radwa El Swaify notes that devaluation should still happen — the questions are FX availability and the magnitude of devaluation.

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WTI: USD 45.69 (-0.52%)
Brent: USD 47.35 (+3.18%)
Natural Gas (Nymex, futures prices) USD 3.02 MMBtu, (+0.63%, Oct 2016 contract)
Gold: USD 1,341.80 / troy ounce (-0.17%)<br
TASI: 5,956.6 (+0.7%) (YTD: -13.8%)
ADX: 4,492.2 (-0.1%) (YTD: +4.3%)
DFM: 3,493.0 (0.0%) (YTD: 10.9%)
KSE Weighted Index: 352.1 (-0.2%) (YTD: -7.8%)
QE: 10,509.8 (+0.7%) (YTD: +0.8%)
MSM: 5,767.4 (0.0%) (YTD:+6.7%)
BB: 1,139.6 (+0.2%) (YTD: -6.3%)