Food and beverages companies might stand to benefit most from the coming of Investment Act: In the current economic climate and with the coming of the Investment Act, the food and beverage sector will be of most interest to foreign investors, writes Matt Smith for Thomson Reuters’ Islamic finance portal Salaam. This comes despite falling sales revenues from food companies such as Juhayna and Edita. “The biggest issue is falling volume sales because the consumer has been hurt, but companies, in general, know this is short-term pain for a longer-term gain of a recovery in consumption power in Egypt,” says Renaissance Capital analyst Mohamed Zein. Others, including CI Capital Asset Management’s Noaman Khalid, think it is time to make a move on the sector: “Asset prices are cheaper and you’ll be established in the country to benefit as the first mover when there is a recovery in the wages of the population and consumption increases,” he says.

Expect continued strong M&A activity in the sector: Current conditions might offer foreign investors an opportunity to acquire more established companies. “It could be one of the best times for M&A because during periods of severe cost inflation some smaller players are forced to exit the market,” says Zein. Furthermore, acquisition by other local companies was unlikely given that most food companies are family-run firms, according to Sigma Capital’s Kamila Bolbol. The fragmented nature of the food sector is already making it appealing. Kellogg Company acquired Egyptian cereal company, Mass Food Group back in 2015, and the state-owned National Company for Maize Products has a host of private-sector suitors right now.