Invest AD bullish on Egypt, Nigeria despite economic challenges

Abu Dhabi-based Invest AD said it is bullish on Egypt and Nigeria, two of the biggest economies in Africa despite economic challenges.


Friday, Jun 19, 2015

Abu Dhabi: Abu Dhabi-based Invest AD said it is bullish on Egypt and Nigeria, two of the biggest economies in Africa despite economic challenges.

Egypt’s economy went through turbulent times after the overthrow of the Hosni Mubarak government in 2011 and Nigeria has been facing a tough economic climate due to the slump in oil prices over the last few months.

Sherif M Salem, a portfolio manager at Invest Ad, an investment company owned by Abu Dhabi government, said it is positive about Egypt and Nigeria. “The macroeconomic fundaments in Egypt have improved and [the] political developments in Nigeria are positive. We are bullish on Egypt and Nigeria despite some challenges in both the markets.”

Egypt conducted a major economic summit in March where a number of foreign companies signed multibillion dollar deals to invest in Egypt, in its energy and retail sectors, to boost the economy.

This is in addition to the $12 billion (Dh44 billion) aid pledged by Gulf nations including Saudi Arabia, Kuwait and the UAE.

“We expect continuation of IPO [Initial Public Offering] activity in Egypt in the next few months. The country is in the process having [a] sixth IPO after having no IPOs for the past four years. Emaar Misr looks to be another successful one and has been already oversubscribed seven times.”

When asked about Nigeria, he said the drop in oil prices has negatively impacted the country, but there have been positive developments on the political front, with a smooth transition of power from one president to the other last month.

“With a new government coming in there is a hope that things can be fixed and the country can be put on [the] right track.”

“The stock market in Nigeria has been suffering because of the slow pace of developments, but if things improve quickly, Nigeria could potentially be one of the top performers in the region.”

A member of the Organisation of the Petroleum Exporting Countries (Opec), Nigeria is heavily dependent on oil revenues to carry out development projects and boost the economic growth. It pumps about two million barrels of oil every day.

The new president of Nigeria, Muhammadu Buhari said the country is in deep trouble and needs careful management to overcome the impact of low oil prices, slowing growth, high unemployment and the security threat from extremists Boko Haram.

As Egyptian and Nigerian economies slow down, Kenya has been benefiting with investors running African portfolios pumping in money to boost the economy.

“When there is a lack of catalyst to get investors to invest in Egypt and Nigeria, Kenya has been benefiting because it is the fourth largest in [terms of] size.”

By Fareed Rahman Senior Business Reporter

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