By Sarah Daoud
CAIRO: “It seems like a better idea to start spending your money at local businesses instead of the stock market right now,” Ahmed Abdelaziz told Daily News Egypt.
Abdelaziz, a 21-year-old Egyptian university student, went on to explain that “the businesses will be here after any crisis and by helping them, this will allow our country to adapt to situations like the one we are in now.”
As Egypt finds itself in the middle of week three of protests, there have been many calls, especially among the youth who have brought on a new sense of change, to invest in the stock market when it reopens on Sunday.
The Egyptian stock market closed on Jan. 27, due to the turmoil in the country that saw protests demanding the removal of the current regime, but is set to resume trading on Feb. 13.
Facebook events have been created along with BBM and SMS messages being circulated around urging people to invest even as little as LE 100 to boost the economy and lessen the impact of investors selling their shares.
CI Capital is calling for investors not to sell as well as to invest more into the market. Commercial International Bank, the parent company of CI Capital, has established an investment fund that allows anyone wanting to invest to do so with as little as LE 67.
According to a statement, they are “building on youth initiatives calling on the Egyptian youth to stimulate and revitalize the national economy and support the stock market.”
Even as some remain quite optimistic about investing, others are a little more wary of the idea.
While talking to local business owner Rawy Rizk, he stated that the idea to spend money in businesses during these times seems to make more sense to him than in the stock market.
“When you invest in the stock market, you are only benefiting yourself, but by spending money at a local business, you are benefitting multiple people and that helps the economy even more,” he said.
Rizk went on to add that his business along with many others have been affected by the uprising and had to remain close for the past two weeks.
“We had to close our doors temporarily, but now we are back open. It’s hard though because there is no work and no people; everyone is scared to go out again,” he said.
“Investing in the stock market when it opens will decrease the impact of its fall, if you don’t know anything about the market and are just investing to try to help the economy, you’re throwing your money away,” said Hamed Hesham, a research analyst at Beltone Financial.
“There is a great deal of uncertainty going on with the government right now, but the economy will never stabilize unless the political situation is stable again so we should focus on the politics first and then the economy,” he added.
Hesham explains that he fears the youth might be throwing their money away because they are investing blindly and will probably lose their money due to that.
He advises, “If you don’t know anything about the stock market, don’t invest unless it’s through a professional fund or someone who knows what they are doing.”
Abdelaziz believes that investing in the stock market is a good idea, but not at the present moment where he sees businesses as a better way for Egyptians to spend their money.
“It seems as though a large number of investors are withdrawing out of our stock market, so spending in businesses first is better for us; we need to try to balance and support the stocks at a later time to uplift our economy and the value of our currency,” he explains.
Hesham noted that “institutions won’t re-enter the market at first because attraction is decreasing at the moment, but after a little while, they will slowly come back and invest once again.”
“In the end, any money you put into the market or businesses will help,” he added.
