06 Feb

This Stock Is Proof of How Much Egyptians Love Their Cigarettes

If money talks, the relationship between Egyptians and their cigarettes won’t be changing anytime soon.

Shares of Cairo-based Eastern Tobacco, which holds a monopoly on cigarette production in Egypt, have hit successive record highs, in both dollar and local-currency terms, after the company posted an increase of almost 161 percent in first-half profit.

Eastern Tobacco has been on an upward trend since Egypt let its currency float freely in November 2016 and started implementing an economic reform program to end a dollar shortage and narrow its budget deficit.

Since then, the stock has surged 373 percent, compared with 6 percent for the MSCI World Tobacco Index and 70 percent for Egypt’s benchmark gauge.

“The increase in profits is mainly due to pricing,” said Khaled Sadek, head of consumer and healthcare research at CI Capital. “They raised their ex-factory prices by about 40 percent compared to last year and they still have a big part of their inventory of raw tobacco from before the currency float which makes the cost low for them and the margins higher.”

Eastern Tobacco’s revenue in the first half increased 36 percent to 6.8 billion Egyptian pounds ($384 million), and costs rose 23 percent.

While the volume of sales fell between 7 percent to 10 percent since the price of cigarettes climbed in November, Chairman Mohamed Haroon sees them starting to return to normal in March, he said in an interview last week.

Mounting Gains

The new currency regime sent inflation to record levels and diminished the spending power of most Egyptians, but it also spurred the return of investor confidence and foreign inflows into the nation’s assets.

The tobacco producer became one of the most popular names among equity investors; it gained the most among the 30 members of the country’s EGX 30 index after Egypt Aluminium.

“Historically, people don’t stop smoking,” said Ahmed Hafez, the co-head of research at HC Brokerage in Cairo. “What happens usually is that they cut the number of cigarettes they smoke per day, and then they usually divert to the normal habits again. But we haven’t seen a prolonged impact on demand since price increases.”

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24 Jul

The top 10 wealthiest cities in Africa: AfrAsia Bank & New World Wealth

AfrAsia Bank and New World Wealth recently reviewed the 10 wealthiest cities in Africa by total wealth held.

“Total wealth” refers to the private wealth held by all the individuals living in each city. It includes all their assets (property, cash, equities and business interests) less any liabilities. We exclude government funds from our figures.

Top 10 Cities:

  • Johannesburg: Total wealth held in the city amounts to US$245 billion. Home to 18,200 millionaires (HNWIs), 970 multi-millionaires and 2 billionaires. Our figures for Johannesburg include Sandton. Major sectors in the city include: financial services (banks, accountancies, insurance), professional services (law firms), construction, telecoms and basic materials.
  • Cairo: Total wealth held in the city amounts to US$140 billion. Home to 8,900 millionaires, 480 multi-millionaires and 5 billionaires. Major sectors in the city include: real estate & construction, financial services and basic materials.
  • Cape Town: Total wealth held in the city amounts to US$135 billion. Home to 8,200 millionaires, 440 multi-millionaires and 2 billionaires. Major sectors in the city include: real estate, financial services (fund management), retail and tourism. Cape Town is also a second home hotspot for the wealthy with over 1,500 multi-millionaires living in the city during peak holiday months (many of these individuals are from outside South Africa).
  • Lagos: Total wealth held in the city amounts to US$120 billion. Home to 6,800 millionaires, 360 multi-millionaires and 4 billionaires. Major sectors in the city include: real estate & construction, telecoms, transport, financial services and basic materials.
  • Nairobi: Total wealth held in the city amounts to US$55 billion. Home to 6,800 millionaires and 280 multi-millionaires (no billionaires). Major sectors in the city include: financial services, real estate & construction, retail, tourism, FMCG, telecoms and basic materials.
  • Luanda: Total wealth held in the city amounts to US$48 billion. Home to 4,100 millionaires, 240 multi-millionaires and one billionaire. Major sectors in the city include: real estate & construction, transport and basic materials (oil & gas).
  • Durban: Total wealth held in the city amounts to US$46 billion. Home to 3,200 millionaires, 130 multi-millionaires and one billionaire. Our figures for Durban include Umhlanga, Ballito, Zimbali and La Lucia. Major sectors in the city include: real estate, finance, healthcare, construction, retail and transport.
  • Pretoria: Total wealth held in the city amounts to US$42 billion. Home to 2,600 millionaires and 110 multi-millionaires (no billionaires). Major sectors in the city include: basic materials, manufacturing and financial services.
  • Casablanca: Total wealth held in the city amounts to US$40 billion. Home to 2,300 millionaires, 110 multi-millionaires and 2 billionaires. Major sectors in the city include: basic materials, manufacturing and financial services.
  • Accra: Total wealth held in the city amounts to US$35 billion. Home to 2,300 millionaires and 100 multi-millionaires (no billionaires). Major sectors in the city include: basic materials, manufacturing and financial services.

Read More: African Business Central