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00:00 We will now move to the analysis of the performance of the Egyptian market for August with my guest from Cairo, Mr. Wael Ainaba,
00:07 Vice President of Tycoon, the governor's administration and the investment fund.
00:10 Welcome, Mr. Wael.
00:13 Today is the time of the month, in conjunction with clear increases in the 30, 70 and 100 movement.
00:23 What are the most significant factors that pushed the index to hold above 18,800 points?
00:30 We have been trying to overcome the previous peak in 2018, which was 18,400 points.
00:40 What are the factors?
00:43 This month, we saw the talk about the entry of Egypt into the BRICS group.
00:47 This month, the fund agreed to postpone the first review until September.
00:53 Investors now hope that the first and second reviews will be postponed until September.
01:00 This will give a boost to the two payments that are required.
01:08 This will be a good sign for all investors around the world
01:12 to know that we are on our way to overcome the economic problem of the exchange rate.
01:17 These are things that motivated the market.
01:20 In addition, the market started to climb to the previous peak,
01:24 and it rose strongly, as we have seen, up to 18,800 points.
01:28 But we come to some concerns, and we say that the profit margin must be tested,
01:33 in order to check the health, strength and safety of the rise that has occurred.
01:36 I expect that the profit margin will be tested again,
01:42 and we will see that the market still has higher targets than this region.
01:47 We can see that the market is at 20,000 points this year.
01:50 Let's go to another factor, Mr. Wael, which is the expectations of a lower price for the Egyptian pound.
02:00 There are factors that require more flexibility in the exchange rate in order to comply with the economic reform program and other things.
02:07 The financial market considers that the Egyptian pound has 60% of the Egyptian savings,
02:14 aside from gold.
02:15 To what extent will this factor contribute to attracting more cash into the market?
02:21 The government is trying to find ways to get money from the dollar.
02:28 The last thing we heard today is the imposition of residence permits for residents in Egypt,
02:34 which amount to about $1,000, and the payment of the residence permits to those who are in the Egyptian pound,
02:39 provided that they are not sold to banks or other financial institutions.
02:45 Also, during the month, we saw some measures to provide salaries to foreign workers,
02:52 so that they can also get dollars.
02:55 The government is trying to find ways to get money from the dollar.
02:58 What I see in the coming period is that the central bank allows the importers to cover their deposits.
03:06 Most of the importers buy dollars from the black market and are available at the companies.
03:12 If the central bank allows them to cover their deposits,
03:16 which means that they will be able to get a profit for the central bank,
03:20 and the central bank will open their deposits,
03:22 this will be a very strong situation in the black market.
03:25 We see that the black market has started to decline in the last two weeks,
03:30 from the level of 42 pounds to 39 pounds.
03:34 I expect that this will be a solution.
03:37 The president himself said two months ago that he will not make a decision that will harm the citizens of Egypt.
03:44 We say that there may not be a cooperation in the understood sense,
03:49 but there may be a move towards the black market with the central bank,
03:55 and then find a dollar in the market to maintain the central bank's price,
04:00 so that it can make a balance in the coming period.
04:04 We will see all this in September, we have many events.
04:07 Let's see the last week of this month, Mr. Wael,
04:11 and continue talking about the government's refusal to sell its assets.
04:15 We saw the East company and the impact of the stock market on the news that the government's share of the sale will be exposed,
04:22 in order to obtain foreign currency and a market cap of 700 million dollars.
04:28 To what extent was this the only remaining option for the government today,
04:33 and did not resort to perhaps presenting a new company in the market?
04:39 The listed companies are already there, and have a price and a price history on the screen,
04:45 so we can say that this price is small or large.
04:48 Secondly, this is a measure of the government's measures,
04:52 also to increase our income from the dollar.
04:54 It is based on some principles, yes, it is a principle of profit,
04:58 but we are currently selling the necessary,
05:01 and if we get a dollar and the dollar's balance price starts to reach the black market and the banking market,
05:10 this will result in a lot of foreign and Arab money entering the Egyptian market.
05:16 The basic infrastructure is there, the readiness to accept investments is there,
05:21 all this will stop at the exchange rate.
05:23 If the balance price starts to rise, we will find a lot of money entering,
05:27 especially in the stock market.
05:29 Despite the rise in the stock market, which is a new number,
05:32 there are still weak points in the market,
05:35 we are in the middle of a weak market in Egypt,
05:37 between 6 to 7 times as a weak point.
05:40 Now the market is around us more than 15 times.
05:44 Despite the rise in the market and the index,
05:46 the prices are still low, and we can calculate this using the US dollar index.
05:52 Yesterday you brought a very nice report comparing the index with the Egyptian pound and the US dollar index.
05:59 Now the US dollar is still at its middle level,
06:02 it is not at a new level, it is still at its middle level,
06:06 and this indicates that the prices are still attractive to Arabs and foreigners,
06:09 because when they come to invest, they put in dollars and start investing in exchange rates in Egypt.
06:14 If the market is around 7 times,
06:19 what are the stocks that are also attractive to the market,
06:22 which are also profitable with the index?
06:24 Where do you see the more expensive stocks?
06:27 There are three sectors,
06:33 the banks sector, which is a very good example of the international commercial bank,
06:37 which is the one that leads the index and is the one that rises,
06:40 the financial services sector, such as Hermes, Peloton, Bioneers,
06:44 and the financial services companies, because in the event of the start of the inflow of money from Arabs and foreigners,
06:50 the market will witness new numbers,
06:53 whether on the index level or on the level of daily implementation,
06:56 and this will be a sign of the financial services companies.
06:59 The third thing is the real estate sector,
07:02 the real estate sector is still not expressing its original value at all,
07:06 if you look at the chart of Balmier's, or the city of Nassr, or the city of Mustafa,
07:11 or the city of Egypt, you will find that they are still at 2%,
07:15 some of their stocks are at 2%, and some of the stocks have started to move,
07:19 especially in Egypt, with the support of its announcement of selling the land,
07:23 which is the land of Heliopark, 7 million meters,
07:26 this can be a very large amount of money,
07:29 so it started to move on its own,
07:32 so I see that this sector is still very undervalued,
07:35 and it can be a big investment after the exchange rate between the banking market and the black market.
07:40 What is the Egyptian market going through in September?
07:44 If we look at the performance of the global markets,
07:47 and the continuation of what is happening with the central bank decisions on its head,
07:51 we know that the central bank decision is independent,
07:54 and Mr. Wael has a different vision for the decisions,
07:58 but to what extent will the external factors affect us?
08:01 The first thing I mentioned to you was that the reason for the support of the index
08:04 was the acceptance of the participation or the nomination of the participation of Egypt to the BRICS countries,
08:08 so the global news really affects the performance of the Egyptian stock market today.
08:13 Indeed, it is affected.
08:17 In September we have some very important things,
08:20 such as the first and second review of the Monetary Fund,
08:24 and we will wait for the classification of Egypt to see how we will deal with the dollar issue.
08:31 We will see all these things in September,
08:34 so I consider it a very important month,
08:37 but the vision of the investors,
08:40 because it precedes the market,
08:42 the market always precedes the event,
08:44 has started to be a little positive on solving these problems.
08:48 That is why we saw the new historical peak that we are achieving
08:51 by paying for the entry of money from Arabs, foreigners and the Egyptian central bank.
08:55 That is why my expectations are that we will exceed these areas and see 20,000,
09:00 because my expectations are that we will solve our problem in September with the fund,
09:05 and that the money and investments will start to be made in the market,
09:09 whether it is the stock market or the direct investment in the market.
09:13 Thank you for your time and analysis, my guest from Cairo, Mr. Wael Ainaba.
09:17 You are the deputy head of Tycoon, the management of the investment banks.