00:00 Mr. Mohamed Kamal, a member of the board of the elite company for financial consultations on financial papers, joins us.
00:06 Mr. Mohamed, welcome to us and thank you for being here.
00:09 Today, we are talking about the level of the 18,030 points, but the liquidity is less than 2 billion.
00:16 It is clear that with the beginning of this week, we have seen the entry of foreigners, which is what brought us to this level.
00:22 How much can we maintain the 18,000 points in the remaining sessions of the week? And who will support this continuation?
00:31 Welcome, ladies and gentlemen.
00:34 As you said in your report, the market has been trying for a while to penetrate a very important point,
00:43 which is the 17,500 point. We were able to reach the 18,000 point.
00:52 I think there is a surge in the market and the entry of foreign investors,
01:01 although not at the same volume as we expect from foreign investors.
01:08 But there is an entry, it is clear that we are starting to see another entry or return of foreign investors.
01:14 I think the process of re-pricing the assets again may be the main driver of the Egyptian stock market.
01:21 As we saw at the end of the last quarter of last year, the main driver was the market and its rise to subsequent levels.
01:28 It was the re-pricing of assets after the 2 EGP or reduction of the value of the Egyptian pound in front of the dollar.
01:36 I think we can see the market in the coming period as the main driver,
01:41 especially with the revival of the government subsidies program and the intention to seize some of the government banks and banks.
01:51 And also the withdrawal of the state from some of its assets.
01:55 I think this will be a very important booster and an entry for the market in the Egyptian stock market.
02:01 We saw the important decisions after the inflation data, Mr. Mohamed,
02:06 which is the process of renting and raising the prices of electricity for the fifth time in a row.
02:12 How much did this give a kind of comfort to companies,
02:16 and specifically to those who are working in the industrial sector, in your opinion?
02:19 Of course, the idea of increasing the prices of electricity,
02:25 the government saw that with the increase in the current inflation rates,
02:31 this will greatly increase the burden and it may be a single circle.
02:35 When we increase the prices of inputs, whether electricity, gas or industrial inputs,
02:42 all of this ultimately returns to the end user.
02:46 As you mentioned in your report, Juhaina today increases its prices from 7% to 22%
02:53 because of the expenses or lack of currency availability.
02:57 She tries to increase the prices of products.
03:00 The one who bears this increase is not the producer, but the end user,
03:05 or the consumer in a more correct sense, is the one who bears the final cost.
03:10 And this increases the burden of inflation or an increase in inflation rates significantly.
03:15 I think the government saw that increasing the prices of electricity for the beginning of the coming year,
03:20 will not make a big increase in inflation rates.
03:27 Will the behavior of Juhaina in all the food sectors, in your opinion,
03:34 and will the increase in production inputs have a clear effect on the results of the third quarter
03:41 for many of the major Egyptian companies, in your opinion?
03:44 Of course. If we talk today as we always do, for example, we evaluate a company in a sector,
03:51 and a company comes to us and it is subject to a audit,
03:54 I re-calculate the prices of the companies in the same sector,
03:59 because I try to re-calculate the prices of these companies.
04:03 So, the same idea today, I have Juhaina today, one of the leading companies,
04:07 one of the largest companies in the market, it has a large share market,
04:10 so today, increasing its prices will make it more competitive,
04:13 but of course, the end of the day, we are talking about increasing prices
04:17 as a result of not having hard currency.
04:20 The same thing will be found in some companies,
04:22 whether the companies in the same sector in the Egyptian stock market,
04:26 or the companies operating in the Egyptian market.
04:29 So, today, of course, we expect to see the same increases on the competing companies,
04:33 or the existing food companies,
04:35 in order to be able to compensate for the currency differences in one way or another.
04:40 Yes, we see that Egypt is also giving the international institutions
04:45 the green light to issue Egyptian currency bonds.
04:49 This time, Mr. Mohamed, how much will this reduce, in your opinion,
04:54 the foreign currency sources that the government is trying to provide today?
05:01 And does this mean that we will see this green signal given to other international institutions
05:06 to issue Egyptian currency bonds, and not foreign currency?
05:10 Of course, as you have seen, the government's idea,
05:15 and according to the Minister of Finance's statements in some media outlets,
05:19 is that it is starting to change its plan to be long-term,
05:26 and at the same time, issuing Egyptian currency bonds,
05:29 which will cost much less than the hard currency,
05:33 because today, issuing hard currency bonds will cost, or will be a loss of two things.
05:38 A loss for interest, and at the same time,
05:40 a loss for the dollar in the event of a decrease in the Egyptian currency price.
05:44 So, today, we are facing greater losses.
05:46 So, the idea of issuing Egyptian currency bonds may be the least harm in the payment process.
05:52 Does this mean that the idea of a decrease in the Egyptian currency price
05:59 has become, perhaps, between the government and the market expectations,
06:05 a big difference between them, Mr. Mohamed?
06:08 Because all markets are starting to price down the currency.
06:11 Is this step moving the idea of government values to a new low?
06:17 In fact, the idea of reducing the currency price in front of the dollar
06:22 may be a complicated process, not an easy one.
06:26 It has political and social dimensions,
06:32 and it also has very big economic dimensions.
06:35 So, I think it's a complicated issue to the utmost extent.
06:38 Of course, the Egyptian government may be keen not to resort to reducing the value of the Egyptian pound in front of the dollar again.
06:46 But there are some economic issues that are being resolved,
06:49 or perhaps the period is being resolved, like these issues.
06:52 I think that in the near future, we may see, if the dollar currency is not available soon,
06:58 or perhaps in the last quarter of this year,
07:00 I think that there will be no possibility or no option
07:04 other than reducing the Egyptian pound in front of the dollar again in the near future.
07:09 We thank you, Mr. Mohamed Kamal, a member of the board of the Elite company for financial consultations.
07:14 You were with us from Cairo.
07:17 [MUSIC PLAYING]
Comments