Ranking of Mutually Exclusive Investment Projects: How Cash Flow Differences can solve the Ranking Problem

The discussion about the best method to be used in capital budgeting has been long and intensive. Differences between Net Present Value and Internal Rate of Return seem to cause everlasting problems, while especially the Internal Rate of Return often is neglected as an appropriate measure. A famous example of the problems caused by the different approaches is the ranking of mutually exclusive projects. The following paper is presenting an easy explanation, without introducing new and more complicated measures, but by simply explaining the nature of and differences between Net Present Value and Internal Rate of Return.Capital budgeting, internal rate of return, net present value, ranking problem, incremental approach, reinvestment rate

Profitability Analysis in the Egyptian Banking Sector

The paper is analyzing current problems of the Egyptian banking sector, which is dominated by public banks. The reported problems include a massive proportion of non-performing loans in the banks’ credit portfolios as well as significant profitability problems, especially in the public banks. Some empirical data is gathered using a bank-specific Return on Equity-Analysis. Results support the reported problems and also show some structural weaknesses of both public and private banks.Privatization, non-performing loans, return on equity analysis, banks, Egypt

The Effect of Mergers and Acquisitions on Bank Performance in Egypt

Recent economic reforms in Egypt have significantly improved its macroeconomic indicators and financial sector. Banks have witnessed significant merger and acquisition activity as a result of these reforms in attempts to privatize and strengthen the banking sector. This study measures the performance of Egyptian banks that have undergone mergers or acquisitions during the period 2002-2007. This is done by calculating their return on equity using the Basic ROE Scheme in order to determine the degree of success of banking reforms in strengthening and consolidating the Egyptian banking sector. Our findings indicate that not all banks that have undergone deals of mergers or acquisitions have shown significant improvements in performance and return on equity when compared to their performance before the deals. Furthermore, extensive analysis was performed yielding the same results. It was concluded that mergers and acquisitions have not had a clear effect on the profitability of banks in the Egyptian banking sector. They were only found to have minor positive effects on the credit risk position. These findings do not support the current process of financial consolidation and banking reforms observed in Egypt, and provide weak evidence to support their constructive role in improved bank profitability and economic restructure.Mergers and Acquisitions, Egypt, Banks, ROE, Performance Measurement, Reforms, ROA

Carry Trade with Maintained Currencies - A Risk and Return Analysis for the Egyptian Pound

The forward premium puzzle in the exchange rate market, resulting from the deviation and failure of interest rate parity, has awakened the interest of speculators to perform carry trade activities. Across literature the main risk associated and measured for carry trade has been the exchange rate risk and crash risk related to the relevant currencies used. But within the literature, the influence of maintained currencies on the carry trade results has not yet been covered. This paper analyzes the potential performance and the risk of carry trade strategies within a maintained exchange rate regime. For this analysis an empirical study of carry trade strategies applied between the EGP and other currencies has been used and compared to those with the USD as an example for a maintained exchange rate. Our risk and return analysis clearly shows a combination of high return and low risk for the maintained currency carry trade.Carry Trade Performance, Uncovered Interest Parity, Maintained Exchange Rates, Value at Risk

Comparative genome analysis and genome-guided physiological analysis of Roseobacter litoralis

<p>Abstract</p> <p>Background</p> <p><it>Roseobacter litoralis </it>OCh149, the type species of the genus, and <it>Roseobacter denitrificans </it>OCh114 were the first described organisms of the <it>Roseobacter </it>clade, an ecologically important group of marine bacteria. Both species were isolated from seaweed and are able to perform aerobic anoxygenic photosynthesis.</p> <p>Results</p> <p>The genome of <it>R. litoralis </it>OCh149 contains one circular chromosome of 4,505,211 bp and three plasmids of 93,578 bp (pRLO149_94), 83,129 bp (pRLO149_83) and 63,532 bp (pRLO149_63). Of the 4537 genes predicted for <it>R. litoralis</it>, 1122 (24.7%) are not present in the genome of <it>R. denitrificans</it>. Many of the unique genes of <it>R. litoralis </it>are located in genomic islands and on plasmids. On pRLO149_83 several potential heavy metal resistance genes are encoded which are not present in the genome of <it>R. denitrificans</it>. The comparison of the heavy metal tolerance of the two organisms showed an increased zinc tolerance of <it>R. litoralis</it>. In contrast to <it>R. denitrificans</it>, the photosynthesis genes of <it>R. litoralis </it>are plasmid encoded. The activity of the photosynthetic apparatus was confirmed by respiration rate measurements, indicating a growth-phase dependent response to light. Comparative genomics with other members of the <it>Roseobacter </it>clade revealed several genomic regions that were only conserved in the two <it>Roseobacter </it>species. One of those regions encodes a variety of genes that might play a role in host association of the organisms. The catabolism of different carbon and nitrogen sources was predicted from the genome and combined with experimental data. In several cases, e.g. the degradation of some algal osmolytes and sugars, the genome-derived predictions of the metabolic pathways in <it>R. litoralis </it>differed from the phenotype.</p> <p>Conclusions</p> <p>The genomic differences between the two <it>Roseobacter </it>species are mainly due to lateral gene transfer and genomic rearrangements. Plasmid pRLO149_83 contains predominantly recently acquired genetic material whereas pRLO149_94 was probably translocated from the chromosome. Plasmid pRLO149_63 and one plasmid of <it>R. denitrifcans </it>(pTB2) seem to have a common ancestor and are important for cell envelope biosynthesis. Several new mechanisms of substrate degradation were indicated from the combination of experimental and genomic data. The photosynthetic activity of <it>R. litoralis </it>is probably regulated by nutrient availability.</p

Модернізація банківської системи Єгипту через іноземні банки

The Egyptian economy is growing strongly. How much exactly, is – like the inflation figures – not quite clear. Different sources cite growth rates for the past two years between 5 % and 6 %. In such a fast growing economy one should expect a healthy banking system with good availability of credits, low default rates, the usual range of financing instruments and central bank rates acting as the interest benchmark. The reality, however, is quite different. The IMF gauges the availability of financing as low, as for example indicated by a sharp decrease of the ratio between loans to customers and assets; the default rates are still quite high (the government had to offload the massive 44 % share of non-performing loans (NPL) of Bank of Alexandria, before it could be sold to San Paolo IMI); private loan practices are sometimes bizarre (to get an overdraft facility customers have to deposit the equivalent amount in their account, despite a massive building boom there are almost no mortgage loans), while the corporate bond market is almost non-existent and a derivatives market still does not exist; and the private banks “are not necessarily responsive to central bank interest rate policies” as EFG Hermes analyst Reham el-Desoki delicately puts it. All this hints at major problems in the banking sector which necessarily have a negative impact on economic growth, inflation and the effectiveness of the central bank