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Tuesday, 7 June 2016

Khorshid announces three new free zones in the works, private sector investments to drop 75% next year

After saying on Sunday that she was in talks with the Finance Ministry to bring back investment incentives for free-zone companies, Investment Ministry Dalia Khorshid took it one step further to announce that the ministry is planning three new free zones. While Khorshid did not specify locations, Al Borsa is betting on Minya, Assiut, and Fayoum. Khorshid also said she was reviewing requests by investors’ associations from Taba and Nuweiba to be granted special economic zone status in the vein of the Suez Canal Zone.

Also coming out of Khorshid’s conference on Sunday was the announcement that she had begun tallying projects that could be funded from the SAR 60 bn Saudi-Egyptian Investment Fund signed during King Salman’s visit in April, Al Borsa reports.

Khorshid also revealed that the government had significantly reduced the projected levels of private sector investment in the economy next fiscal year due to “major challenges”, Al Borsa reports. Private sector investment in the FY2016-17 fiscal year is expected to fall to EGP 292 bn, down from 19% from EGP 360 bn this year. This comes as the government is projecting total investments (both private and public) to grow to EGP 531 bn, up from EGP 408 bn this year, suggesting significant state spending will continue next year.

Khorshid also confirmed that the Investment Ministry is amending clauses on acquisitions in the Capital Markets Law’s executive regulations, referencing a move to limit the market share of any one brokerage house or group of houses that share a corporate parent, which we noted last week. Further amendments also include minority shareholders regulations, which were not detailed in Al Ahram’s coverage.

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