عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Egypt’s Industrial Sector Invigorated by Investment Regulation Reform

The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany
The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany
TT
TT

Egypt’s Industrial Sector Invigorated by Investment Regulation Reform

The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany
The Temple of Luxor is illuminated at night in Luxor city, south of Cairo, Egypt, November 27, 2015. REUTERS/Mohamed Abd El Ghany

A number of Egyptian companies established under the new investment law are leaning towards labor-intensive markets, but capital is flowing heavily into less operational undertakings, revealed recently published government data.

The fiscal annual report for 2017-2018 said newly established companies, which amount to 6,329, belong to the industrial sector.

With 28,400 jobs created, the report concluded that the industrial sector was the most capable of generating jobs.

Coming in second, a total of 1,213 construction companies provided 2,239 jobs, followed by the agricultural sector with 1,193 companies providing 4,946 jobs, and finally the service sector with 1,027 companies giving out 2,883 jobs.

However, service companies ranked first in attracting investment capital.

The investment law issued in October 2017 provides several incentives to attract investments to advance development and invigorate the Egyptian economy.

Updated regulations encourage investments operating in areas most in need of development.

Unemployment rates in Egypt have fallen in recent months, but remain close to 10%, falling in the second quarter to 9.9% from 10.6% in the first quarter of 2018.

Unemployment in Egypt has worsened since 2011, rising from 8.9% in the fourth quarter of 2010 to 11.9 in the first quarter of 2011, but recent economic growth rates have helped in its reduction.

Egypt’s gross domestic product grew by 5.3 percent in the 2017-18 fiscal year ending in June, the highest rate in 10 years, Planning Minister Hala al-Saeed said in July, in a further sign of recovery amid tough reforms and an IMF loan.

The country has been showing signs of recovery in recent months amid tough reforms including cuts to energy subsidies implemented by the government of President Abdel Fattah al-Sisi as part of a $12 billion IMF loan agreement aimed at luring back foreign investments.

In the cumulative estimate, from 1970 to 2018, the services sector was the repeatedly the most attractive for investment in terms of the number of companies.

The report reflects the dominance of small and medium enterprises in Egypt’s economic activity.

Most Viewed

 
 
Business

Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
TT
TT

Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.