Is Inflation Transitory?🤔

Local Pickup🌇

Ibn Sina Injects EGP 120 Million into its Investment Arm “AIM”💉

Ibn Sina Pharma invested EGP 120 million in AIM, its newly established investment arm.

More details🧐 Mohamed Shawky, Director of Investor Relations at Ibn Sina Pharma said “AIM” was established as a direct investment arm, with several company subsidiaries falling under its umbrella.

Why is this important🤔 The investment in AIM comes with the goal of directing it to its subsidiaries, including “Ramp Logistics Services” & “Digi for Technology Services”, as well as a company to invest in the healthcare sector.

A Few More Earnings📈

GB Auto, SODIC, & other companies report their earnings.

Ghabbour Auto (AUTO)🚗 reported net profits of EGP 1.25 billion in the first nine months of 2021, a 57.4% YoY increase from EGP 794.77 million.

SODIC (OCDI)🏡 reported net profits of EGP 346.95 million in the first nine months of 2021, a 36.8% YoY decrease from EGP 549.45 million.

Palm Hills (PHDC)🏡 reported net profits of EGP 635.49 million in the first nine months of 2021, a 24% YoY increase from EGP 514.54 million.

Eastern Company (EAST)🚬 reported net profits of EGP 1.598 billion in Q1 of FY 2021/2022, a 37.7% YoY increase from EGP 1.16 billion. 

Al Ezz Dekheila (IRAX)🔩 reported net profits of EGP 3.23 billion in the first nine months of 2021, versus net losses of EGP 3.47 billion in the same period last year.

Integrated Diagnostics Holdings (IDHC)⚕️ reported net profits of EGP 1.15 billion in the first nine months of 2021, a 206% YoY increase from EGP 375.42 million.

MM Group (MTIE)📳 reported net profits of EGP 334.57 million in the first nine months of 2021, compared to EGP 299.78 million in the same period last year.

Orascom Investment Holding (OIH)📊 reported net losses of EGP 46.07 million in the first nine months of 2021, a 157.5% YoY increase from EGP 17.89 million.

Startup Spotlight💡 – KIWE Closes its First Financing Round📳

Fintech platform KIWE has closed its first investment round, led by dfin Holding with participation from EFG Hermes, Marakez for Development, & angel investors.

More on KIWE🧐 KIWE is a peer-to-peer money exchange app, allowing its users to transfer money instantly to each other.

Why is this important🤔 “Through this strategic consortium of investors, we target to catapult the growth of KIWE by deploying dfins’ tech-based financial services portfolio, utilizing EFGs’ ValU as a key payment method, & rolling out across Marakez’s portfolio of commercial & residential projects – a perfect fit to help drive our mission towards a stronger E-payments future,” KIWE said in a press release.

Headlines We’re Watching👀

  • Madinet Nasr (MNHD) Agrees to Capital Raise

Global Pickup🌎

Is Inflation Transitory?🤔

Inflation worries have been making global news every day recently, so let’s break down what’s been going on.

More details🧐 The U.S. Consumer Price Index rose 6.2% in October from a year earlier, its biggest one-year jump in 31 years. That is bad news for U.S. President Biden & the Federal Reserve.

Why is it bad news?🤔 One of the Fed’s, & Central Banks in general, key jobs is to keep price growth stable. The Fed had said to expect higher inflation in the near term as the economy gets back to normal, dubbing it “transitory inflation”.

What is transitory inflation?🤷‍♀️ Transitory simply means temporary, although exactly how long “temporary” means is unclear. Fed Chair Jerome Powell said that “it will not leave behind permanent or persistently higher inflation.”

This led to a wave of criticism on the Fed’s claims.
 
Inflation isn’t transitory, but the Fed’s credibility is🗣 
“It is not transitory,” said Mohamed El-Erian, chief economic advisor at Allianz. “I think the Fed is losing credibility,” El-Erian said

“Companies are charging higher prices [and] there’s more to come. Supply disruptions are lasting for a lot longer than anybody anticipated. Consumers are advancing purchases in order to avoid problems down the road — that, of course, puts pressure on inflation,” El Erian said.

He said that people shouldn’t forget that those on low incomes are the ones hardest hit by rising consumer prices.

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