KTFA:

Samson:  Asia and Digital Finance... Headlines of the Closing Day of "Davos in the Desert"

27th October, 2022

The global debate and questions about the future of digital currencies and whether we will witness a complete transformation towards the digitization of currency and dealing with virtual money, and many aspects of its future are being traded and placed on the agenda of the third and final day of the sixth edition of the “Future Investment Initiative” forum in Riyadh under the slogan “Investing in Humanity” Enabling a new world order.

Digital payments

The forum began the first session of the third day to talk about transforming banking and investment businesses for a resilient economy, during which the CEO of the Saudi Export-Import Bank, Eng. Saad Al-Khalb spoke.

During the session, the discussion revolved around the fact that technology continues to affect banking and financial practices as the economy begins to transform in the post-Corona pandemic world, and its global economic consequences, and the World Bank’s assertion that two-thirds of adults around the world now make or receive their payments in the manner At the same time, the rise of small investors is transforming investment fields around the world.

The session touched on the trends of digitalization in investment and that existing banking services will remain, and what is its impact on the future of private investment and digital banking services, and how banks have responded to the changing habits between consumers and companies.

The CEO of the Saudi Export-Import Bank also referred to his country's role in providing logistic services and explained that the logistics initiative enables global trade through the use of capabilities because its geographical location is a strategic center linking three continents with an integrated system interconnected with Africa.

The last day will witness the holding of mini sessions on the rise of digital currencies "crypto" and the future of the African continent, with the participation of a number of speakers from China and Hong Kong to discuss the importance of partnership between China and the Middle East, and another session on the future of environmental and social governance.

China's back

During the past years, the Chinese economy was able to reach an unprecedented level of wealth and development, and its upward trajectory was to continue, but political pressures and the Corona virus crisis made it slow down.

At the forum, Mina Al-Araibi, editor-in-chief of the Emirati newspaper "The National", will discuss a number of Chinese and international business leaders in a session entitled "China is Back". It talks to them about how the Middle East can cooperate with China and consolidate its position as an important bridge linking East and West, and what is China's position in the new world order.

With the world going through endless crises, the forum discusses in a session entitled “How do investments behave during a market correction?” Is there anything investors can do to prepare during such times, and what can investors do to build resilience in all markets .

Future of trade

The forum discusses one of the most important topics, which is who will lead trade in the future? And the role of owners of small and medium-sized enterprises, which provide 70 percent of all jobs in OECD countries, and 50 percent of GDP in rich countries, and the updates they went through during the Corona period, which lost at least 70 percent of small businesses and medium-sized enterprises in 32 countries between 30 and 50 percent of their profits.

During the past two days, the forum sessions witnessed crowds with the attendance of 6000 participants from countries around the world and 500 speakers from different sectors. Its time on all economic and social levels.

On the sidelines of the sixth edition of the Future Investment Initiative, the National Center for Industrial Development signed a memorandum of understanding with Essar. The agreement aims to study the development of the integrated complex of iron flats in Ras Al-Khair Industrial City, which is the first industrial project to produce green iron in Saudi Arabia.   LINK

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Samson:  Putin warns the West: Whoever sows the wind reaps a storm, and this is our position on nuclear weapons

27th October, 2022

Russian President Vladimir Putin stressed, on Thursday, that the world is going through a historical turning point, the most dangerous and important since World War II, indicating that Russia does not need to launch a nuclear strike on Ukraine and it is useless, whether militarily or politically.

In a speech to the Valdai forum, Putin said, "The situation in the world is heading towards the worst scenario, as the West ignited the war in Ukraine and committed a number of systematic errors, ignoring the interests, values ​​and cultures of other countries."

He added that "the crisis affects everyone now, and there are no illusions... Humanity has two paths, either to move towards collapse or to work on a new system together."

"Events have pushed environmental issues into the background, at a time when these fundamental threats have not disappeared and the ecological imbalance remains a challenge for everyone," Putin noted.   LINK

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Samson:  Iraq supports Putin's call to change the structure of the United Nations and the Security Council

27th October, 2022

The Permanent Representative of Iraq to the United Nations, Muhammad Hussein Bahr al-Ulum, stated that Iraq supports the call of Russian President Vladimir Putin to think about changing the structure of the United Nations and the UN Security Council.

"Great efforts are being made to reform the United Nations. We support any reform of the United Nations and the Security Council. The United Nations International Committee is working in this direction," Bahr Al-Uloom said, on the sidelines of the IAEA Ministerial Conference.

On Thursday, at the Valdai International Forum, Russian President Vladimir Putin called for reflection on how the renewed structure of the United Nations and the UN Security Council would reflect the diversity of the world's regions. The Russian leader stressed that "more" will depend on regions such as Asia, Africa and Latin America in the world of tomorrow more than it does today in general. LINK

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Samson:  On charges of financial corruption, the director of Darbandikhan Electricity was arrested

27th October, 2022

The Sulaymaniyah Police Directorate announced, on Thursday, the arrest of the director of Darbandikhan electricity distribution in the province, on charges of financial corruption.

"Today, the director of electricity distribution in Darbandikhan district was arrested by a judicial decision, against the background of the disappearance of electric power transmission towers," Sulaimaniyah police spokesman Sarkot Ahmed said, in a press statement seen by Shafak News Agency.

He added, "He is currently detained under Article 316 of the Iraqi Penal Code, which deals with waste of public money."

He pointed out that "one of the organizations donated a number of electric power transmission towers to the Directorate of Electricity Distribution in Darbandikhan, but the director did not deal with them according to the legal contexts.  LINK

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Samson:  With the participation of Iraq.. The start of the meeting of Arab Ministers of Economy and Trade in Algeria 

28th October, 2022

The meeting of Arab economy and trade ministers began today, Friday, in the Algerian capital, with the presence of Iraq

And the official news agency stated, "The meeting of the Council of Arab Trade and Economy Ministers began in the Algerian capital, with the participation of Iraq

She added, "The ministers will discuss a number of works that have been prepared by the economic and social committees, including the rules of origin, the customs union, the Arab free trade zone, and the report of the Secretary-General of the Arab League  LINK

Samson:  What future awaits the Egyptian pound after the flotation?

28th October, 2022

The Egyptian pound took a new step towards complete liberalization against the US dollar, as the exchange rate of the Egyptian currency reached about 23 pounds for every dollar in local banks, whether state-owned or private.

Analysts and specialists differed in evaluating the downward movement of the Egyptian pound, and about whether it was a complete or managed liberalization subject to the control of the Central Bank, at a time when they agreed on a continuous decline in the value of the Egyptian currency.

On Thursday, October 27, Cairo announced the completion of the agreement with the International Monetary Fund at the expert level to obtain financing amounting to about $9 billion, including $3 billion directly from the Fund, in addition to $1 billion from the IMF’s debt fund. Cash, and $5 billion from development partner countries and various financing institutions.

Expected

Commenting on what happened, Rania Yacoub, a specialist in the Egyptian financial markets, believes that the decline of the Egyptian pound against its American counterpart is expected, especially with the Egyptian government ending the loan agreement, explaining that "the relationship between the pound and the dollar, down and up, will remain according to the forces of supply and demand until the end of next week."

Yacoub attributed this to the state of confusion in the economic environment today, as it included successive events between moving interest rates by 200 basis points, which is equivalent to two percent, or floating the local currency by liberalizing the exchange rate of the pound against the dollar, and finally completing the agreement with the International Monetary Fund. .

Yaqoub expected that commodity prices would witness a significant increase in the coming period following the decision to float, pointing out that "the prices during the last period were already inflated, given that importers were making their future deals at the price of the dollar, which ranges between 22 and 24 pounds for every dollar."

Reports by Bloomberg Agency last week indicated that the price of the US dollar may reach the level of 24 pounds for every dollar if Cairo implements a complete liberalization of exchange rates.

Orbit float

For her part, former Vice President of Banque Misr Sahar El-Damaty said that "the Central Bank of Egypt's announcement of a flexible exchange rate for the Egyptian currency against foreign currencies according to the forces of supply and demand came as a result of the demands of investors and specialists as one of the recommendations of the economic conference that was held this week."

Al-Damaty explained that “the direction of the Central Bank to deal with a flexible exchange rate according to supply and demand will be a managed liberalization subject to the control of the Central Bank, to avoid the effects and inflationary shocks, as it targets price stability,” considering that the exchange rate movements today “are not considered complete liberalization,” noting that "what supports this is raising interest rates by two percent to fight inflation, and then followed by government banks by issuing savings certificates at an interest rate of 17.25 percent to curb liquidity and provide indirect financial support to the owners of savings certificates, as pensioners and the family sector represent the most prominent investors in these certificates." 

The Central Bank of Egypt has moved interest rates by five percent since last March during three meetings, which began during an extraordinary session on March 21 by raising interest rates by one percent, then another decision in May to move by two percent. Then, price levels were stabilized for three consecutive meetings before raising interest rates again today, Thursday, to reach interest rates levels to 13.25 percent, 14.25 percent and 13.75 percent, respectively.

Inflation levels in Egypt reached a record level for the first time since 2018, after recording last September about 15 percent, compared to about 14.6 percent in August.

Increasing the interest rate on savings certificates

Meanwhile, government-affiliated banks issued savings certificates for a period of three years with an annual return of 17.25 percent, and the Assets and Liabilities Committee in the bank decided to increase the interest rate on the platinum certificate with a monthly return to become at a return of 16 percent annually instead of 14 percent, starting today for new or Renewed automatically, and Banque Misr raised today, Thursday, the interest rate for issuing the summit certificate for a period of three years, with an annual return of 17.25 percent.

Meanwhile, the non-deliverable contracts for the Egyptian currency for a period of three months declined further after the government committed to a flexible exchange rate system within the framework of an agreement with the International Monetary Fund. Every dollar, while there was little change today on the prices of Egyptian government bonds in dollars, according to "Reuters".

Inflation rates

For his part, a specialist in banking affairs, Hani Aboul Fotouh, said that “the Central Bank’s decision to raise interest rates, by 200 basis points, was a sudden and unexpected step during an exceptional meeting and surprised markets and analysts,” explaining that “the recommendations confirmed the flexibility of the exchange rate to reflect the market dynamics of supply.” And demand as a tool to absorb external shocks, and work to activate the derivatives market for currency and futures contracts as a hedging tool against the risks of exchange rate fluctuations, and to issue an index for the Egyptian pound denominated in some currencies for the most important trading partners and gold.”

Aboul Fotouh added that "the rate of domestic liquidity is high, as the volume of liquidity reached about 6.708 trillion pounds (289 billion dollars) at the end of last July, in addition to expectations that the inflation rate will continue to rise globally and locally with the secondary effects of supply shocks," noting that it had It leads to a rise in inflation rates on average during the fourth quarter of 2022.

Commodity price hike

For his part, the analyst in the Egyptian financial markets, Wael Al-Nahhas, said that “the prices of the Egyptian pound against the dollar will continue to decline until it reaches about 27 pounds for every dollar,” explaining that “the International Monetary Fund loan of 3 billion dollars will not meet the needs of importers and investors in The local market," noting that "the value of goods stuck in Egyptian ports as a result of the scarcity of the dollar has reached $20 billion."

On the impact of the currency’s decline and raising interest rates today on the markets and prices of commodities and products, Al-Nahhas said that “the Egyptian markets have been dependent for months on the strategic stockpile of commodities that have almost run out as a result of the goods stuck in ports due to the continuation of the documentary credit system by the Central Bank, before announcing relieve it today.

At the beginning of last March, the Central Bank of Egypt stopped dealing with collection documents in import operations and worked under the documentary credit system instead, with the exception of 15 basic commodities, which created a crisis among importers for their inability to provide foreign currency.

The decision caused an accumulation of goods inside Egyptian ports, and its effects began to be reflected on the local market, especially with regard to the scarcity of some goods and the tendency of traders to raise their prices in record rates across commercial sectors, before the Central Bank announced today easing the severity of the decision after its gradual cancellation of the instructions issued in the February 13, 2022 for the use of documentary credits in import financing operations until the completion of its complete cancellation in December 2022.

In an official statement, the Central Bank excluded shipments amounting to 500 thousand dollars instead of 5 thousand dollars from the documentary credits decision.

Commenting on this, Amr Al-Samdouni, Secretary of the International Transport and Logistics Division of the Cairo Chamber of Commerce said that "the decision to work with documentary credits up to $500,000 instead of $5,000 will lead to a major breakthrough in the exit of goods piled up in ports and thus revitalizing the markets."

Al-Samdouni added that "everyone who now has a container of less than $500,000 will be able to get it out of the ports and put it on the market," noting that "there were containers worth $10,000 and $50,000 that were idle and stored in the ports as a result of not opening a letter of credit for them, and therefore Every merchandise below $500,000 will leave the ports."

On prices, he explained, "There may be increases as a result of the rise in the exchange rate, but they will not be in large proportions," stressing that the rise in commodity prices during the last period "was not subject to economic criteria, but to the greed of traders."  LINK