Flash : Egypt & Kuwait, May 1st 2025
Kuwait, Warba Bank’s capital increase is closed ; Egypt, the IMF cautions on rate cuts.
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We aim here to bring you regular updates on factors and events impacting financial markets in the Middle East and North Africa region with an accent on foreign exchange and rates.
We also aim to bring reflections on certain topics and subjects, close to recent events, which we think are worth stopping on .
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Downtown Cairo .
Kuwait, Warba Bank’s capital increase is closed ; Egypt, the IMF cautions on rate cuts.
For many coming here in the Gulf and UAE in particular, security is an important part of the discussion. Much has been said about the climate in UK and London, where even in the best neighbourhoods, walking while chatting on the phone or taking a picture is taking a big risk. Recently, the police raided a flat in the city where they discovered over 50 000 phones in various stages of dismantling, hacking and all. I also discovered recently bicycle hijacking ! Two guys on a scooter stop a cyclist, threaten him with a hammer and speed away with the bicycle. Another one, three guys in SUV try to grab one , the cyclist managed to fend them off and they disappear ! The guys on the scooter were operating in full day light in Regent’s Park ! What next !
Kuwait :
Continuing on the capital increase of Warba Bank in Kuwait,
· The subscription has been closed , meaning they won’t need to open it to the public at large,
· The shares subscribed under rights issue, 78.05 %, or 1.7 bn shares out of 2.183 bn shares.
· Total number of shares subscribed, 7.67 bn , coverage by 351 %.
· Total number of shares subscribed, 9.37 bn shares.
· Total value of shares subscribed, 1.875 bn KD
· Total value of shares allocated, 436.7mn KD.
“ The rights issue of allocated shares ( 436.7 bn KD ) will be transferred to the bank’s capital account and the excess amount shall be refunded to the respective shareholders banking accounts within 5 business days starting tomorrow Tuesday 29th “.
Market wise, nothing much happened on the 29th but locals started to offer yesterday pushing the curve a bit lower , mostly shorted end . Nothing dramatic yet : 3mth eased by 10 fx points while the 1 year drifted lower to -250 from -215.
Potentially, there is 1.4 bn KD coming back to the market. For the record, as measured by the CBK, KONIA, Kuwait Overnight Interest Average Index , was 1.98 % yesterday with a volume of 223mn KD .
Egypt :
A few days ago, we were underlining the fact that despite the recent rate cuts , the yields proposed on the Treasury bills ( as for the bonds ) were not hugely attractive . Base deposit 25 %, 3mth yield above 27 % gross before 20% withholding.
This was echoed by Mr Jihad Azour, IMF Director for the Middle East, North Africa and Central Asia. The IMF said Egypt should tread carefully as it lowers its interest rates, due to global uncertainty wrought by President Trump’s tariff raises. They could also note that his comments on the Middle East are not helping : his desires for Gaza, how he could suspend aid to Egypt and also Jordan. And the latest, free passage for US ships through the Canal as a compensation for the attacks on Houthis in Yemen.
True , Egypt is only facing 10 % tariffs and doesn’t depend much on the US for trade but treasury bills’ portfolios are quite susceptible to change in risk perception . In April, foreigners sold on the secondary market 1.9 bn $ of bills ; can’t say though yet what they got ( or not ) through auctions.
Much progress has been made on inflation and further should come but there is still potential for large shocks.
Thank you
DC