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SA Chamber’s data shows business confidence waned in May

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JOHANNESBURG – South Africa’s business sentiment and conditions deteriorated in May, data from the South Africa Chamber of Commerce and Industry (Sacci) and Standard Bank showed.

Sacci’s business confidence index waned from 93.7 points in April to 93 points in May on the rand’s depreciation against the major currencies with the decline of the JSE all-share index, poor vehicle sales and depressed retail sales weighing further on sentiment.

Sacci chief executive Alan Mukoki said although business confidence was not at an ideal level, there was a positive mood coupled with hopes that President Cyril Ramaphosa would drive a positive growth of the economy.

“There are still uncertainties about physical electricity supply, and this factor alone has the highest and immediate impact on business, consumer and investor confidence. This, among several other factors, needs urgent attention,” Mukoki said.

“Public sector financial challenges at all levels of government as well as some state-owned enterprises also call for urgent remedies by the new administration.”

The local bourse endured a torrid month shedding more than 4 percent, with Naspers responsible for a quarter of the loss as it slumped 10 percent last month due to its biggest subsidiary, Tencent, plummeting 14 percent in local currency-terms as Chinese markets bore the brunt of trade-war escalations between the worlds two biggest economies.

Dave Mohr from Old Mutual Multi-Managers, in an investment note, said that May was a gloomy month for the JSE.

“In rand, the JSE All Share Index lost 4.8 percent in the month, which reduced 2019 returns to 7.1 percent. This is still ahead of cash, but over one year local cash has beaten equities,” Mohr said.

The National Association of Automobile Manufacturers of South Africa yesterday said new vehicle sales fell 5.7 percent on a yearly basis in May with 40 506 units sold compared to the 42 950 vehicles sold in May last year. Export sales were also down for the first time this year, declining 8.8 percent.

Meanwhile, the Standard Bank Purchasing Managers Index, which gauges private sector activity, slid back into contraction territory in May, following a slight expansion in April. The index declined from 50.3 the prior month to 49.3.

Standard Bank said businesses were hampered by a faster drop in new orders and a fourth successive fall in export sales, leading them to reduce output and cut back on purchases.

David Owen, economist at IHS Markit, which compiles the index, said firms however remained hopeful that the new government would bring some much-needed stability to the markets.

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“Future sentiment rose to the highest for 13 months, showing that there is still confidence in the South African economy.

“Nevertheless, recent PMI readings show that the government faces a difficult struggle to reignite growth this year,” Owen said.

The South African Revenue Service said last week that South Africa’s trade balance unexpectedly swung to a deficit in April, recording a gap of R3.4 billion against market expectations of a R1.6bn surplus.

BUSINESS REPORT

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Economy

Egypt, PRL sign train engines contracts worth $466.3M

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CAIRO – 16 November 2019: The Egyptian Railway Authority (ERA) signed with PRL (Progress Rail Automotives) a number of contracts worth $466.3 million after a meeting with President Abdel Fatah al-Sisi that took place last week.

The American company will supply 50 train engines over 22 months, carry out long-term maintenance for 41 engines by June 30, and upgrade 50 others within 30 months since the conclusion of the deal. The company will also provide maintenance services and spare parts for those 141 train engines for 15 years. The value of contracts will be secured through soft loans, except for $27 million that will be paid by ERA’s treasury.

In July, ERA endorsed the technical specifications of two passenger railcars to be supplied by Transmashholding in September. Those are part of a contract to supply 1,300 railcars. One of the railcars will be tested in Hungary, so it will be granted the safety certification by the European Railway Agency. The other will be tested in Egypt. Afterwards, the first batch of railcars in the contract will be delivered in accordance with the timeline set by both parties.

The contract states that 650 railcars will be supplied from Hungary, 500 will be delivered by Russia, and 150 will be manufactured by Egypt under the supervision of Transmashholding. An Egyptian locomotive factory will be established as part of a plan to localize the locomotive industry in Egypt and transfer the know-how to workers, technicians, and engineers in the sector. The factory will produce the 150 railcars and also provide maintenance services.

The representatives of ERA and Transmashholding agreed to hold further visits and meetings to study the possibility of cooperation in rail infrastructure, mobile rail, workshops, new lines, and maintenance of existing railcars.

In the same month, an official source told Egypt Today that ERA needs 12 rail test machines to detect and repair defects in railroads revealing that contracts to purchase eight of those are being finalized.

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ERA will receive four rail test machines worth €8.5 million by the end of 2020 supplied by an Austrian company with which a contract was signed a few months ago. The machines will enable the authority to better diagnose defects in the railroads which would increase the safety, and inhibit derailment accidents.

Egypt Today

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Economy

France-Africa Summit secretary general praises Egypt’s experience in infrastructure

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Investment Minister Sahar Nasr meets with Secretary General of France-Africa Summit 2020 Stephanie Rivoal Reminisces- press photo

CAIRO – 8 November 2019: Ambassador Stephanie Rivoal Reminisces, the Secretary General of France-Africa Summit 2020, has hailed Egypt’s experience in the infrastructure field mainly with regard to the the sustainable and smart cities as well as digitization which she said offers investment opportunities to the private sector.

During her meeting with Investment Minister Sahar Nasr, the French diplomat added that France prioritizes consolidating strategic relations with the African countries, topped by Egypt, the current president of the African Union.

The meeting is held on Friday as part of Reminisces’s current visit to Egypt to hold talks with the government on preparations for the anticipated summit, slated for June, 2020. This year’s summit will focus on the sustainable cities.

Several heads of state and government will address the summit and meetings among businessmen from all over the African continents will be held as part of the summit’s activities, Reminisces said.

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About 1,000 investors representing major, small and medium sized- businesses have been invited to the summit, Reminisces added.

Meanwhile, Nasr asserted Egypt’s keenness on developing cooperation with France at economic, development and investment levels.

She hailed successes achieved through the French investments in Egypt which she said hit 5.2 billion dollars with 160 French companies operating in the country.

Egypt Today

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Economy

Egypt urges World Bank, IMF to support regional integrity in Africa

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CAIRO – 18 October 2019: Minister of Investment and International Cooperation Sahar Nasr called on the World Bank and IMF to boost their support to Egypt in achieving regional integrity and intra-trade in Africa, a press release on Friday read.

Addressing the Intergovernmental Group of 24 on International Monetary Affairs and Development in Washington, Nasr called on the WB and International Monetary Fund to expand investments in the region.

The minister said that Egypt’s vision to face the slowdown in global economic growth and trade tensions is to achieve more economic integration and continue to take the path of reform to make our economies more competitive and attractive for investment, to achieve the aspirations of the world countries in growth and development.

Nasr explained that the Egyptian government has implemented a comprehensive economic and social reform program to promote sustainable growth, alleviate poverty, create good jobs, enable the private sector to promote growth, and provide opportunities for all sectors of society to participate in the economy, especially women and young entrepreneurs.

The Minister added that President Abdel Fattah al-Sisi, as the chairman of the African Union, has set the achievement of regional economic integration as a top priority.

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Nasr also discussed Wednesday with the World Bank the provision of $500 million for the pollution control and solid waste management project in Egypt.

Nasr added in a statement that Egypt is also discussing with the World Bank raising the level of partnership to support the health and education sectors in Egypt.

For his part, World Bank Vice President for the Middle East and North Africa Farid Belhadj affirmed that Egypt is a very important country for the bank’s fields of work.

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“Therefore the World Bank is keen to contribute effectively to the efforts exerted to achieve development in Egypt, especially in the field of infrastructure, in light of the economic and legislative reform that contributed to improving the investment climate in Egypt,”Belhadj explained.

Egypt Today

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