CAIRO: A stable economy and a sound political regime have contributed to Egypt’s role as a regional hub for Gulf investors in the Middle East and North Africa.
In a workshop entitled “Egyptian Gulf Investment, sponsored by Ahli United Bank Egypt, associates explained that the bank’s role is to encourage Gulf investments by materializing their projects through financing services.
“National clients are supported in reaching Gulf nations using Ahli United Bank Egypt’s services if they have exhausted their lending opportunities from local banks, said Omayma Farahat, senior general manager of corporate banking at Ahli United Bank Egypt.
Gulf investments that have proven to be successful in Egypt were relayed, focusing on Bitunil, a joint venture between GCC-based industrial conglomerates Al Zawil Group and Riyadh Cables, and El Benhawi Company, a private sector Egyptian entrepreneurship specialized in the building materials sector.
“The economic and political climate, population and business environment and location were the reasons why we decided to invest in Egypt, Hesham El Benhawi, chief executive officer of Bitunil said.
At the same time, a number of success stories in the telecoms, real estate and financial sectors have not been without impediments. Finance for industrial projects, the commitment of petroleum products feed stock to industrial projects and the declared plan for pricing and cutting back on subsidies on energy and petroleum products are all issues investors have to deal with.
Nevertheless, Gulf investors are keen on investing in Egypt as the “links between Egypt and the Gulf are manifested, they already know the Egyptian market and many were educated here, said Hassan Abdel-Hamid, general manager and head of private banking and wealth management at Ahli United Bank Egypt.
“Post 9/11 investors shied away from the UK and US, and following the Lebanese crisis last year, the focus on Egypt has increased, Abdel-Hamid said.
Furthermore, foreign investment was facilitated with the passing of new tax laws, positive economic indicators are attractive, the cost of real estate remains relatively low compared to other countries and Egypt is a window to penetrate the Common Market for Eastern and Southern Africa (COMESA) region, he said.
While Gulf investors are satisfied with their investments, research companies are struggling to collect information in a non-information based society. In the workshop entitled “Changing patterns of demand and supply for business information in Egypt sponsored by ISI Emerging Markets, research experts argued that the Egyptian legislation and culture as well as dealing with data-gathering in Egypt must be addressed.
“The inherited culture of secrecy and conspiracy theories has to change completely. Researchers have to educate information consumers about what information to expect, said Maher Asham, CEO of Egypt For Information Dissemination (EGID), a subsidiary of the Cairo and Alexandria Stock Exchange.
Egyptians suffer from the lack of and bad quality information. Even governmental entities, such as CAPMAS and the Central Bank of Egypt issue discrepancies in the same information because they use different methodologies. “The characteristics of financial information are speed, accuracy and methodology, Asham said.
Three years ago, listed companies were reluctant to publish their information, but recently this culture has changed. “Companies are motivated after [understanding] the advantages of disclosure, and penalties are being applied to those who refuse to publicize their information, Asham said.
To further promote this understanding, Egypt must work on its regulatory framework, including data-collection laws that have usually impeded work. A new law is currently in the works and will be presented to parliament soon. Also, there will be a shift in the way CAPMAS operates, giving data-providers more freedom to operate.
“The share of business information providers in Egypt may be small, but the need is huge, said Hoda Rashad, head of the Social Research Center at the American University in Cairo.
