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Tuesday, 28 June 2016

Managing the effect of Brexit on Egypt

EGX doing damage control after Brexit: The EGX issued a report containing financial information for all the companies traded on the bourse to give a “clear and objective” picture of the “real” position of the companies in the aftermath of Brexit. Bourse Chairman Mohamed Omran insists investors need to know the “truth.” He says the market remains healthy, especially as 73% of all traded companies on the EGX are trading at lower than 10x P/E and 7% between 10x-15x. The complete data can be viewed here.

Still, international funds will be more reluctant to inject funds into emerging markets, head of reserves management at the CBE Rami Aboul Naga told Al Ahram. Aboul Naga insists Brexit will not impact the CBE’s monetary policy, even though there might be some impact on equity markets. He says the CBE continues to adopt a very conservative management strategy with its reserves, focusing more on investing in government bonds and diversifying its currency sources, shielding against market fluctuations.

British investments aren’t going anywhere: The UK’s interest and strategy in Egypt did not change following the Brexit vote, British Ambassador John Casson told reporters. European Union funding to Egypt this year will not be impacted as budgetary appropriations for them have already been made, Al Shorouk quoted Casson as saying. The USD 25 bn in UK investments in Egypt will not be impacted either as they are independent from joint EU policy. If anything, the Egyptian British Chamber of Commerce (EBCC) believes exiting the EU will result in more British investments being channelled to Egypt, EBCC secretary general Taher El Sherif told Daily News Egypt.

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