A recent report claims that there has been a decline in the corporate borrowing rate in the main stock index list, which reached its lowest level in two years due to an absence of political and economic stability. This instability has forced some companies to delay expansion plans or cancel them while waiting for the outcome of the electoral process. The rate of loans to companies listed on the Egyptian main EGX30 index dropped this October to 51 percent, the lowest level since January 2010, and the second-lowest rate in the Middle East after Lebanon, the report claims. The Palm Hills Company cancelled projects that were due to be implemented this year and in September, the report said. In addition, the company returned 90 feddans of land to the State to ease its corporate financial burden. In the first half of this year, Palm Hills recorded a net loss of 81.3 million EGP (U.S. $13.60 million). The company recorded a net profit of 191.4 million EGP (U.S. $32.03 million) in the same period last year. Total profits last year were 523.3 million EGP (U.S. $87.57 million). Lecico Egypt announced in July that it will indefinitely postpone its plans to begin implementing the second phase of the new tile factory in Burj al-Arab in Alexandria, instead of beginning operations at the end of next year. Lecico attributed the postponement to the lack of political and economic security in Egypt and the surrounding countries. The Egyptian pound against the U.S. dollar has been devalued 2.8 percent since the beginning of the year. The Central Bank also announced the shrinking reserves of its foreign exchange by as much as a third, or U.S. $24 billion.
