2023-08-28 20:49:38
Cairo, Egypt (CNN) — The relative improvement of the Egyptian economy’s indicators was reflected in the stock market’s performance, which recorded the highest level in its history during the Sunday and Monday sessions of this week, and foreign investments resumed pumping investments again with limited values after a continuous sale that lasted 18 months.
Capital market expert Ahmed Al-Sayed said that the main index of the Stock Exchange tried several times to break the historical level between 18200-18400 points during the last period, and succeeded at the beginning of this week in surpassing the highest level it achieved in 2018 during the Sunday session, achieving a historical level higher than 18500 points, and continued In the historic rise for the second consecutive session, and this was accompanied by a significant improvement in trading rates, exceeding 2 billion pounds (64.7 million dollars) per day.
The Egyptian Stock Exchange indices achieved a significant rise since the beginning of the year, as the main index EGX30 rose by 27.31% from the beginning of the year until the end of the Monday session, and the small and medium-sized companies index EGX70 jumped by 34% during the same period, and the market value increased to 1.260 trillion. EGP ($40.8 billion).
Al-Sayed linked, in exclusive statements to CNN in Arabic, the continued rise of the stock market to “new historical levels” during the coming period, to “the presence of incentives, both at the macroeconomic level, most notably a new movement of the pound’s exchange rate against the dollar and the International Monetary Fund’s approval of a new review of the loan terms for Egypt, And the improvement of the country’s credit rating or at the level of the financial market, the most prominent of which is the state’s progress in implementing the government offering program and selling assets, which is reflected in the increase in dollar revenues in the country, as well as the increase in liquidity in the Egyptian Stock Exchange.
The International Monetary Fund postponed its first review of the $3 billion loan it approved for Egypt, which was scheduled for last March. loan.
Ahmed Al-Sayed stated that “some foreign institutions are facing difficulty in transferring their profits abroad due to the foreign exchange shortage crisis, which prompts them to re-inject their profits again into the money market,” stressing “the need to expedite the implementation of the government’s offering program, to give confidence to investors that the state will complete its plans in Increasing the private sector’s contribution to the economy, and increasing the state’s dollar revenue.
The Egyptian government has previously announced a list of 32 government companies operating in various economic activities that it intends to sell to strategic investors or put on the stock exchange, as part of the “State Ownership Policy” document, which aims to raise the proportion of private sector investments out of total investments from 30% to 65% within the next three years.
In a related context, Egyptian President Abdel Fattah El-Sisi granted expanded tax exemptions to factories in order to attract industrial investments, to increase exports and reduce the import bill, as part of the state’s plans to overcome the foreign exchange shortage crisis in the country.
The Egyptian economy performed well during the fiscal year 2022/2023, as the growth rate reached 4.2%, the total deficit decreased to 6%, and the primary surplus of GDP increased to reach 164.3 billion pounds ($5.3 billion), according to data from the Ministry of Finance.
A member of the Board of Directors of the General Federation of Chambers of Commerce, Emad Kenawy, said, “Al-Sisi responded to the demands of investors and economists during the national dialogue sessions of the need to grant incentives to industrial projects to develop this sector in a way that achieves the state’s goals towards increasing the contribution of productive sectors to the gross domestic product to provide more job opportunities, and in At the same time, it reduced the import bill and increased Egyptian exports.”
Kenawy added, “Granting incentives and facilitating licensing procedures and establishing companies will be reflected in an increase in industrial investments in the near future, especially in light of the Egyptian market’s competitive advantages that encourage attracting local and foreign investments.”
The Egyptian president issued an incentive package for industrial projects that included exempting them from all types of taxes for up to 5 years with the aim of deepening the national industry, with the possibility of extending the exemption for an additional 5 years for a specific number of industries. In half the period specified for it, in addition to expanding the granting of the golden license to all projects aimed at deepening local industrialization.
Emad Kenawy, in exclusive statements to CNN in Arabic, praised linking the granting of incentives to industrial projects to achieving goals that contribute to the rapid development of the industrial sector, such as granting tax exemptions to strategic industries aimed at deepening the national industry, and restoring 50% of the value of industrial land in the event that the project is implemented in half the specified period. He said that this “encourages local and foreign companies to quickly start the project to provide the value of the land, which will quickly reflect on the national economy, and stimulate factories to increase Egyptian exports and reduce the import bill.”
Egypt has spent more than 50 billion Egyptian pounds ($1.6 billion) in support for exporting companies since October 2019, to encourage companies to expand their production and export activities, according to data from the Ministry of Finance.
A member of the Board of Directors of the General Federation of Chambers of Commerce believes that it is necessary to provide foreign exchange for industrial companies to import raw materials and production requirements to increase the production capacity of factories to meet the needs of the local market in a way that reflects the stability of prices, and at the same time provide surplus production to increase exports, while continuing to provide bank financing with interest. Maisarah to finance companies’ expansions during the coming period.
The Russian-Ukrainian war and high global inflation caused billions of dollars of indirect foreign investments to exit Egypt, increased its import bill, as well as a decline in Egyptians’ remittance rates abroad, which was reflected in the flow of foreign exchange into the country.
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