Reserves inching up FOREIGN reserves climbed to $15.53 billion in June, compared to $15.52 billion in May, Egypt's Central Bank stated Sunday. The increase is the third consecutive monthly increase. It came despite a decline in the value of foreign currencies, which compose the bulk of the reserves, by $0.5 billion in June 2012 to reach $10.9 billion. This has been made up for by the revaluation of the gold component of the reserves at the end of the fiscal year 2011/2012 to reach $3.3 billion from $2.7 billion in May 2012. According to CI Capital, a Kingdom of Saudi Arabia deposit of $1 billion was placed in May and June equally. Yet, "weak external sector performance and the instability associated with the presidential election run-off that was held in June led to further pound devaluation, which resulted in the reduction of foreign currency reserves in an effort to further support the currency," said the investment bank. In the short term we expect minimal additions to net international reserves unless the IMF loan is received," CI Capital added. Reserves increased at the end of April for the first time since the January 2011 uprising that toppled former president Hosni Mubarak. In May, Egypt's foreign reserves climbed again $302 million to stand at $15.52 billion. Inflation down EGYPT's urban consumer inflation declined to 7.2 per cent in the 12 months to June from 8.3 per cent in May, figures from the Central Agency for Statistics and Mobilisation (CAPMAS) showed Tuesday. Moreover, monthly urban inflation inched down 0.6 per cent in June 2012, compared to a decline of 0.2 per cent in May 2012. Statistics show that the slowdown in food price increases in June has contributed to the overall drop in inflation. Food inflation fell down to 9.2 per cent in the 12 months to June 2012 compared to 10.8 per cent in the 12 months to May 2012. The plunge in international food prices during the first quarter of 2012 and aggressive inventory sale amid weak demand explain benign inflation dynamics since early 2012," noted Hani Geneina, chief economist at Pharos Capital. Back to square one AN ADVISORY committee to the State Council issued a ruling stating that the contract of Madinaty Project, owned by Talaat Mustafa Group (TMG), is invalid, thus recommending the annulment of an opposite ruling by the Administrative Court last November. In November, the court asserted that the Madinaty deal was valid after all, but insisted that a committee revalue some of the land that had not been used since the company bought the site. While the recommendations of the committee are not binding, according to Beltone Financial they have "historically been congruent to subsequent court rulings." Hamdi El-Fakharani, the plaintiff, argues that the Madinaty contract is invalid because the land was not sold via public auction and as such the land should be withdrawn from TMG. Additionally, El-Fakharani argues that the unutilised portion of the land is 87 per cent of the whole land allocated for the project. Based on its meetings with the company's management, Beltone noted that the company believes that the possibility of withdrawing the land -- whether entirely or the unutilised portion only -- is virtually non-existent. The only risk, according to TMG's management, would be a possible revaluation of the unutilised portion, which they state amounts to less than 25 per cent of the total area. Furthermore, the company argues that in light of the current state of the economy, any possible revaluation of the unutilised portion of the land would not yield a different figure from the administrative authority's valuation in 2010. The first court ruling against Madinaty Project, which includes homes, hotels and golf courses, stirred a series of la suits against other real estate developers sending the whole sector into the doldrums. According to Beltone, a total of 17.3 million square metres have been withdrawn from 48 companies in the period 1 February 2011 to 30 April 2012. The date for a final ruling has not yet been confirmed but appeals by both El-Fakharani and TMG will be ruled on by the Administrative Court 7 November. TMG shares lost more than two thirds of their value in 2011, but have soared 60 per cent this year on hopes that the company's worst problems are over. Shares tumbled almost seven per cent Sunday after the ruling. Wheat galore EGYPT has surpassed its target for local wheat purchases by 70,000 tonnes and has a strategic supply of local and imported wheat for six months, stated the General Authority for Supply Commodities (GASC). Our target was three million tonnes and we did much better than that so we are currently in a comfortable position and in no rush to enter the international market," Nomani Nomani, vice chairman of GASC, told Reuters. Egypt procured only 2.6 million tonnes of local wheat last year compared with 3.7 million tonnes this year. Last month, Minister of Supply and Domestic Trade Gouda Abdel-Khaleq stated that local production of wheat this year is likely to increase by one million tonnes to reach 10 million tonnes compared to nine million tonnes last year. Mubarak sons trial put off THE CAIRO Criminal Court postponed on Monday the trial of Hosni Mubarak's sons, Alaa and Gamal, until 8 September. Gamal and Alaa Mubarak, with seven other men, were charged with violating stock market and Central Bank rules to make illegal profits through dealing in shares in Al-Watany Bank of Egypt. The court said it delayed the trial in order to allow the defence to review both documentation and witness testimony in relation to the charges. Both of Mubarak's sons deny all charges and their lawyer, Farid Al-Deeb, called for their release until the trial resumes in September. However, the court ordered they should remain in prison until the next hearing. Hosni Mubarak is currently serving a life sentence after being convicted last month of criminal responsibility in not preventing the killing of protesters during the 18-day 2011 uprising against his rule. Gamal and Alaa faced similar charges but both were acquitted.
