Egypt’s sovereign wealth fund to raise authorized capital five-fold up to $62.15 billion

The fund plans to buy a stake of about 30 percent in power plants built by Siemens, which President Abdel-Fattah El-Sisi inaugurated last year, above. (AFP)
Updated 12 November 2019

Egypt’s sovereign wealth fund to raise authorized capital five-fold up to $62.15 billion

  • Egypt’s parliament passed a law allotting 5 billion Egyptian pounds of start-up capital for the fund last year
  • Abdel-Fattah El-Sisi: Egypt could dramatically expand the size of its new sovereign wealth fund to ‘more than several trillion pounds’

CAIRO: Egypt’s sovereign wealth fund is expected to increase its authorized capital to up to a trillion Egyptian pounds ($62.15 billion) from 200 billion pounds within three years, depending on investors’ appetite, the fund’s executive director said.
Last year, Egypt’s parliament passed a law allotting 5 billion Egyptian pounds of start-up capital for the fund, called the Egypt Fund, with 1 billion pounds to be transferred immediately from the treasury.
The law also allows the president, who picks the board of directors, to transfer the ownership of any unused state assists to the fund or to any of the fund’s assists or companies.
“We expect to increase our licensed capital within three years to a trillion pounds or less ... it all depends on the investors’ response and investment appetite,” said Ayman Soliman, the fund’s chief executive.
“The sectors we will work in include industry, traditional and renewable energy, tourism and archaeology,” Soliman said.
President Abdel-Fattah El-Sisi said last month that Egypt could dramatically expand the size of its new sovereign wealth fund to “more than several trillion pounds,” and that it “aims to contribute to sustainable economic development through management of its funds and assets.”
The fund plans to buy a stake of about 30 percent in power plants built by Siemens, Soliman said, adding that six international investors have expressed interest.
“So far, six companies submitted offers to the Electricity Holding company to buy shares in the Siemens power plant,” Soliman said.
The plants, billed at the time as the world’s biggest, were built by Siemens in a €6 billion ($6.61 billion) deal signed in 2015. El-Sisi inaugurated them last year.
In May, Electricity Minister Mohamed Shaker said that the government is considering selling the power plants to private investors, but talks were still at an early stage.


German economy stagnating despite signs of industrial rebound

Updated 16 December 2019

German economy stagnating despite signs of industrial rebound

  • Indicators at the start of the fourth quarter point to subdued private consumption even though disposable incomes continue to rise
  • Bundesbank says households’ real disposable income fell due to a slowdown in employment growth

BERLIN: The German economy is more or less stagnating, the economy ministry said on Monday, adding there are initial signs that an industrial recession could be coming to an end as orders stabilize.
The ministry also said in its monthly report that indicators at the start of the fourth quarter pointed to subdued private consumption even though disposable incomes continued to rise.
Consumption has helped keep Europe’s biggest economy humming by compensating for weak exports. Trade tensions this year pushed the German manufacturing sector into a recession but the overall economy narrowly escaped the same fate.
“Industrial production has probably not reached the trough,” the ministry said. “But orders and sales have stabilized at a low level. This suggests that industry has gradually stabilized and could pick up slightly in the New Year.”
There are fears that should the manufacturing sector continue to shrink; the slowdown could spread to an otherwise resilient services sector.
IHS Markit’s flash composite Purchasing Managers’ Index (PMI) for December on Monday confirmed the diverging trends: manufacturing activity slipped and services rose.
Markit said the rate of decline in new orders and exports was stabilizing, giving hope for the manufacturing sector.
The German central bank said last week that Germany faced another sluggish year despite a likely rebound in exports as households see their spending power shrink. The Bundesbank said households’ real disposable income fell due to a slowdown in employment growth.
It trimmed its growth forecast for this year to 0.5 percent and halved its prediction for 2020 to 0.6 percent.
In another grim sign for the economy, the BGA trade association said on Monday that wholesalers planned to cut investments and their tendency to hire new staff had decreased despite expectations that their nominal revenue will rise by 2.3 percent to €1.3 billion this year.