(AFP Photo)
The amount of mortgage finance has fallen in the first half (1H) of 2014 to register EGP 280m, marking a 17.1% decrease, compared to a value of EGP 338m in 1H 2013, a report from the Egyptian Financial Supervisory Authority (EFSA) showed.
The total value of mortgage finance, granted by mortgage finance companies, amounted to EGP 4.46bn since the activity started in 2001.
The slump came despite a governmental attempt to stimulate the mortgage finance in February through launching the Central Bank of Egypt’s (CBE) mortgage finance initiative to finance low-income housing projects.
The CBE has allocated a total amount of EGP 20bn be sent to banks in the forms of deposits and low-income citizens who qualify to benefit from the programme will be lent the money at yearly interest rate of 7% to 8%.
Economics professor at Cairo University Fakhry El-Fekky commented that the effect of the CBE initiative is not felt yet, expecting that the mortgage finance activity will activate in 2H.
El-Fekky added that the recent low-income housing initiative would ease the sector and increase the demand on housing units. On 9 March, the armed forces, in cooperation with UAE’s Arabtec Construction Company announced plans to construct 1m residential units for low-income youth.
The project, which was announced by President Abdel Fattah Al-Sisi, then defence minister, falls under the umbrella of the “For Egyptian Youth” initiative, with the construction expected to begin in December 2014, and will be implemented in four stages over the next five years.
The EFSA report also noted that the number of approvals of new companies’ share issuances and capital increases in the first half of 2014 reached 1,732, with a total value of EGP 17.1bn, recording a 24% year on year growth.
According to the report, the market capitalisation of listed stocks recorded EGP 477bn by the end of June, marking an EGP 156bn increase, equivalent to 48.5%, from the preceding half. The total trading value of listed and delisted shares until the end of May registered EGP 201bn compared to EGP 107bn in the same period last year, recording an 87% increase.
With regard to insurance, premiums for life insurance has marked EGP 748m until the end of May, compared to EGP 478bn in the same period last year. The collected premiums in property insurance reached EGP 1.138bn, while the total value of collected insurance premiums increased by 29% compared to 1H 2013.
The report added that 11 private insurance funds were listed in 1H 2014, 3 of which have been recorded in June, whereas during that period the technical examination departments approved investments of EGP 3bn, down from EGP 3.7bn in 1H 2013.
