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00:00 We turn to Cairo, Mr. Mohamed Rida, CEO of Solid Capital, joins us to talk about market fluctuations.
00:06 Welcome Mr. Mohamed.
00:08 For the first time, the EGX 30 is testing its market levels, 20,400 points, and the profit margins have shown during the session.
00:18 But the question is, to what extent is the Egyptian market still forming performance for investors today,
00:26 despite the fear of rising inflation, and will it remain so for a long time?
00:33 Let's talk about the pattern we've seen in the last period in the Egyptian market,
00:39 the rise of 3 or 4 shares, 6 of the main index,
00:46 compared to the rest of the index, which is a bit far from the subject,
00:50 and it's even visible in the 70 index, which is fluctuating, and the main index is somewhere else.
00:55 The Egyptian market is under great pressure,
00:58 due to the rise in interest rates, which we're importing from outside,
01:02 from the rising of the US Federal Reserve, and today there are other statements
01:06 from the US Federal Reserve officials about other increases or increases in interest rates.
01:11 Of course, the Egyptian center, despite knowing that the rise in interest rates
01:15 won't be able to resist or face the currency's inflation or inflation,
01:21 but today it wants to maintain the balance, or the gap between the interest rates
01:27 and the dollar's interest rates, so that it can maintain the low level
01:32 of foreign investment in government funds.
01:35 To be clear, the amount of trading, or the value of trading,
01:39 we've seen in the last period, may be working in the same intermediaries,
01:43 some of the shares are present, and it's changing from the big shares to the big ones.
01:47 We've seen that when there are very strong increases, the first thing is the big shares,
01:51 then the next shares, then the small shares, then the intermediaries,
01:54 and then again the big shares.
01:56 Maybe all this, this pattern, wasn't present in the last period,
01:59 maybe it was more focused on the leading shares, or the main shares,
02:02 which are moving, or the shape of the trade.
02:05 So, the idea of importing new investment, or the new direction,
02:08 in terms of the stock exchange, may be difficult,
02:10 despite the rise in interest rates, and the candidate,
02:12 that there may be increases with the announcement of the central bank of Egypt,
02:15 that he's targeting 7% of inflation,
02:18 this will require a lot of effort, not only in terms of interest rates,
02:21 but also in other intermediaries, so that he can pull the currency out of the market more,
02:25 and try to control the inflation in the levels he announced.
02:29 Yes. We're still seeing the Arabs, maybe, who took the market away today,
02:32 Mr. Mohamed, in the process of rising,
02:34 while the foreigners and Egyptians are facing, maybe, during the process of selling.
02:39 Are we still making a bigger effort, in your opinion, on the Arabs,
02:45 during this period, in terms of how many acquisitions are coming from the companies,
02:50 and maybe the main shares, to support the market?
02:54 Let's speak clearly, most of the shares that the government owns,
03:01 whether direct or indirect, are targeted by unnatural companies,
03:05 and are targeted by acquisitions.
03:06 And this is very clear, today, I said at the beginning of the news,
03:09 the issue of Salat, or Kima, or others, and of course, the pressure that is put on this process.
03:13 Today, there is a very high demand, or a high demand, for foreign investors,
03:17 in specific countries, in the name of being on the schedule of the acquisition process,
03:22 on the main shares in some companies, and that they enter the capital markets.
03:26 So today, the Arabs, yes, their interest in this, of course,
03:29 maybe they are the investors of this period, we're talking about other levels,
03:32 we're talking about the definition of the acquisition process,
03:36 which is more related to the process of specifying the price of the currency,
03:39 or other things, with the review at the end of the year,
03:42 with other acquisitions, there are some news about the early elections,
03:47 or some political acquisitions that may be on the table,
03:50 all of this will have a very big role, maybe the Arab investor is more,
03:54 is more, a little bit more brave to enter the Egyptian market, in a stronger way,
03:57 the difference of the currency now, gives it a greater advantage,
04:00 because the amount of investments is greater, and the amount of acquisitions is greater,
04:04 but of course, the process of specifying the price of the currency,
04:07 or the stop at a certain level, is the biggest point of the difference,
04:10 in the process of major acquisitions, but on the process of trading,
04:13 and building a position, they are certainly interested in this matter during this period.
04:16 Okay, so we can say that the process of completing acquisitions,
04:20 as happened today, maybe for the Egyptian communications,
04:23 which was always the biggest candidate for the process of selling the share in Vodafone Egypt,
04:28 to the Qatar's sovereign fund, is dependent on the process of implementing the fund review,
04:33 and especially yesterday, we heard Mr. Mohamed, that the Ministry of Finance,
04:37 is maybe integrating the first review with the second,
04:40 and it is proceeding in the right way, as the Egyptian government wants,
04:44 with the International Monetary Fund.
04:46 Let me say that one of the most important files,
04:52 or the controversial file, in the process of reviewing the fund,
04:56 is the process of investigating the withdrawal of the state from some investments,
05:01 and this was done through the program of government subsidies,
05:03 which the state has used more than once, and has announced more than once,
05:06 at the level of the government-owned securities companies, the business sectors,
05:09 and some of the army's institutions, and other such things.
05:12 And of course, today, this investigation, we see that there was no progress in this file,
05:17 so maybe the delay in the process of reviewing is more related to this matter,
05:22 and unfortunately, the delay is due to the payments of the 3 billion,
05:27 which are supposed to be sold in advance,
05:29 and the other 9 billion are sold to the development partners,
05:32 and all this is due to this matter, and of course,
05:34 the idea that I can move from this file,
05:37 even some of the international financial institutions,
05:40 also have the idea of agreement,
05:42 so today we will talk about the changes that may be in the scene,
05:45 for the sake of the general organizational form within the country,
05:48 and we will also talk about the form of the seizure process,
05:51 and its progress, with the idea that we have reached a conviction
05:54 of the current currency price in front of the dollar, and the future, God willing.
05:58 Finally, your legacy for development,
06:00 you see that the share is performing well today,
06:02 after some of the deals that were made on it,
06:04 but a good rise in the share of Mr. Mohamed,
06:06 57% from the beginning of the year,
06:09 and within 12 months, more than 100% of the share of your legacy for development has risen.
06:13 How do you see its movements,
06:15 and on what basis is this rise in the share?
06:18 Let's talk about the stocks that have a very large level of performance,
06:25 in a slightly stronger financial way,
06:27 there is a development in terms of its activity and its returns,
06:32 we see a better development in terms of performance and future returns,
06:36 all this is a big step,
06:38 we see that most companies have a very large impact
06:41 on the effects of the currency, the dollar, and other such things,
06:45 and you can see that the companies have been able to deal with this gap in a great way,
06:49 they have put themselves in a very clear future strategy,
06:54 there is a real development in terms of the financial centers and the financial resources
06:58 that have been present in recent periods,
07:00 all this may support the direction,
07:02 I think that people always have this in this system,
07:05 which is always developing towards more and deeper projects,
07:08 and this is a future goal that will be achieved in the coming period.
07:11 Thank you Mohamed Rida, CEO of Solid Capital,
07:15 you were with us from Cairo.