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Sunday, 23 October 2022

High-interest CDs are all the rage + rare earths in Egypt get global attention

Banks are issuing high-interest CDs to help them cushion the impact of the CBE’s new reserve requirements. A number of banks have issued three -year certificates of deposit (CDs) at interest rates of between 13.5-15.0%, including QNB Al Ahli, Mashreq Bank, Banque Misr, National Bank of Egypt, Credit Agricole, and the Arab African International Bank, Bloomberg Asharq reports.

IN CONTEXT- Last month, the central bank bumped up its reserve requirement for all banks to 18% from 14%. The reserve ratio regulates how much capital commercial banks are required to hold in their reserves. “The rise in costs in light of the CBE's decision to increase the reserve ratio pushed banks to issue certificates with competitive returns to attract deposits exempt from the ratio,” one banking official is quoted as saying.

MEANWHILE- Rare earths in Egypt are getting attention after last week’s announcement that a “black sands” project, executed by a unit of Hassan Allam Holding for the military, had been completed. Fortescue Future Industries will send a team to Egypt to explore investments in our mining sector, with a particular interest in rare earth elements and minerals including silica, used to produce solar panels. (Statement)

Other things we’re keeping an eye on this morning:

  • Telecom Egypt said in an EGX filing that it has not received any official bids for its minority stake in Vodafone Egypt, publicly stating what a company source told us last week. Press reports had claimed that Qatar’s sovereign wealth fund is in advanced talks to buy up 20% of the company. (Disclosure, pdf)
  • Fintech startup PayMint could become the official payment platform for the soon-to-be-launched Egycomex commodities exchange after reportedly signing a partnership agreement with the EGX. (Al Mal)
  • French container giant CMA CGM has announced a new USD 500 / TEU overweight surcharge on containers heading from Egypt to the US and Canada that weigh more than 20 tons.

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