Thabat Fund Monthly Fact Sheet July 2020€¦ · and CIAM do not take any responsibility for decisions made on the basis on the content of this fact sheet. This fact sheet is made

Thabat Fund Monthly Fact Sheet July 2020

Fund Objective The fund aims to create a saving and investment vehicle that will invest in medium and long term fixed income instruments.

General Information Asset Manager CI Asset Management

Fund name CIB Thabat Fund Fund type Fixed Income fund Fund Manager Salah Madkour Alternate fund manager Base Currency EGP Key Dates: Fund launch 05 September 2011 Close of financial year 31 Dec Dealing: 08:30 to 12:00 every business day Valuation Day: Every business day Sharpe N/A Important information: This is a financial promotion and is not intended as investment advice. The information provided within is for use by professional investors and/or distributors and should not be relied upon by retail investors. All information prepared within has been prepared by CI Asset Management except where otherwise stated. Any views and opinions are those of CIAM at the time of going to print. CIB and CIAM are not responsible for any subsequent investment advice given based on the information supplied.

Major Asset Types* Treasury Bills

Treasury Bonds

Corporate Bonds

Time Deposits

Other mutual funds

Fund performance

Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 July-20

NAV (EGP) 160.71 163.56 192.99 231.74 282.19 313.96 Total Return since Inception

213.96%

YTD Annualized Return

19.48%

Monthly Annualized Return

11.24%

Asset Allocation

9M19/20 current account deficit narrows by 25.2% y-o-y to USD7.3bn, on pronounced improvement in 3Q19/20 (January-March 2020); Deficit down 39.2% y-o-y to USD2.8bn This performance is mainly due to the improvement in the non-oil trade balance deficit by USD2.2bn (to USD27.3bn), and the increase in current transfers by USD3.3bn (to USD21.5bn), supported by a 18.3% rise in workers’ remittances. The capital and financial account was negatively impacted by the COVID-19 pandemic, with 3Q19/20 recording a net outflow of USD1.1bn. However, 9M19/20 witnessed a net inflow of cUSD4.1bn. Net FDIs fel by 9% y-o-y in 9M19/20 (to USD5.9bn), on a 58.5% y-o-y drop in 3Q19/20.

Fitch Ratings affirms Egypt's long-term foreign-currency issuer default rating (IDR) at B+, with ‘Stable’ outlook The agency expects GDP to row at 2.2% in FY20/21, recovering to 5.5% in FY21/22 and sustaining at 5% thereafter, for the medium term. It also expects the current account deficit to widen to 5% in FY19/20, falling to 3.6% over the following two years. For the fiscal position, the agency sees Egypt’s budget deficit at 9.5% in FY19/20, narrowing to 8% in FY21/22.

Treausry Bills29.82%

Mutual Funds18.22%

Treasury Bonds54.60%

FY19/20 initial economic indicators show GDP growth of 3.8%, budget deficit of 7.8% of GDP, primary surplus of 1.8% of GDP, debt to GDP of 86.1%

Egypt mulls issuing up to USD7bn worth of Eurobonds in FY20/21 The government is looking to revive its external debt plan in FY20/21, after the recent global panic that took over global debt markets. Following the successful Eurobond in May, the government is considering issuing up to USD7bn in FY20/21, which could be USD denominated or EUR denominated. Floating bonds are also in the pipeline, however the timing is unclear. It is worth noting that Egypt is about to issue a USD500mn green bond, and is currently awaiting final approval to sell Shariah-compliant debt. The Islamic debt, such as sukuk, would be mainly directed towards Islamic banks and funds in Egypt and the Gulf.

Parliament approves new banking law ensuring monetary stability The new law is set to achieve a number of goals, namely ensuring Egypt’s banking system keeps pace with international standards of best practice and norms, as well as legal systems for the corresponding regulatory authorities worldwide. The law looks to maintain Egypt’s monetary and banking system stability, avoid financial crises, and raise, develop, and modernise the local banking system’s performance, while supporting its competitive capabilities. This would ensure that Egypt’s banks gain a competitive edge internationally and help achieve the state’s aspirations towards development and economic progress. The governance and independence of the CBE will also be enhanced under the new law, to ensure the achievement of its goals. This will take place in light of the constitutional controls for independent and oversight bodies.

Egypt’s fuel imports dip 76% y-o-y in Apr-20, amounting to USD209.235mn Fuel imports declined by USD671.3mn in Apr-20, recording USD209.235mn, down from USD880.53mn in Apr-19. The decline can be attributed to: i) crude oil imports, amounting to USD119.93mn in Apr-20 vs. USD277.33mn in Apr-19, ii) oil product imports falling by USD521.5mn y-o-y, standing at USD71mn in Apr-20, and iii) a USD40mn y-o-y decline in coal imports, amounting to USD17mn in Apr-20. Accordingly, the trade balance recorded a 45% y-o-y decline in the deficit, reaching USD2.36mn in Apr-20.

Government launches initiative to convert 147k vehicles to natural gas in three years for EGP1.2bn The initiative will include taxis and microbuses, in addition to private cars over 20 years old. A total of 240k diesel-powered microbuses will likely be replaced with natural gas ones in four years. A sum of EGP10bn will be allocated to replace 50k taxis over 20 years old over two years. Lower-interest financing programmes will be provided to the vehicle owners. The government initiative will also include building 366 gas stations for EGP6.7bn.

Minister of Planning: Government initiative to stimulate private consumption, support the local product aims to stimulate EGP100bn in spending activities This will be done through certain agreements with manufacturers and merchants to offer average discounts of up to 20% on consumer goods, along with an additional 10% discount for ration cards holders. Ration card discounts are estimated to cost the government EGP12bn, benefiting 64mn citizens. The initiative is expected to take place towards the end of July.

The information used to produce this fact sheet is based on sources that CIB and CIAM believe to

be reliable and accurate.

This information has not been independently verified and may be condensed or incomplete. CIB

and CIAM do not make any guarantee, representation or warranty and accepts no responsibility or

liability to the accuracy and completeness of such information. All that is stated herein is of an

indicative and informative nature as forward-looking statements and projections. Accordingly, CIB

and CIAM do not take any responsibility for decisions made on the basis on the content of this fact

sheet. This fact sheet is made for the sole use of CIB and CIAM’s customers and no part or excerpt

of its content may be redistributed, reproduced or conveyed in any form, written or oral, to any

third party without the prior written consent of CIB and CIAM. This fact sheet does not constitute a

solicitation or an offer to buy or sell securities or underlying asset classes.

Contacts

If in Egypt

CIB call center 19666

Email: [email protected]

Web: www.cibeg.com

Outside Egypt

Tel: +202-247512666

Fax: +202-24343434

Email: [email protected]