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Tuesday, 1 October 2019

Non-banking financial services set to attract investment and drive growth in Egypt

Beltone sees scope for growth in Egypt, looks to regional expansion: Egypt has become a hub for attracting investment, especially in fixed income, thanks to the attractiveness of its carry trade and the success of its economic reform program, Beltone Financial’s Executive Chairman Maged Shawky told Bloomberg TV (watch, runtime 04:11). With the region’s fastest growth rate and inflation now at its lowest point in six and a half years, Egypt remains a focus for Beltone even as the investment bank looks at regional expansion on the horizon, particularly as markets like Saudi Arabia and the UAE “can’t be ignored,” Shawky said.

Non-banking financial services will be a core engine of growth in Egypt and should attract inward investment over the next two to five years, along with consumer-related sectors and real estate, Shawky predicts. Beltone is increasingly orienting itself towards non-banking financial services in Egypt’s relatively un-banked population, he said. With declining interest rates opening up a lot of room for lending and enhancing purchasing power, these are the lines of business that will be flourishing in the coming period, he said.

Despite speculation, the finance industry is unlikely to see consolidation: Changes or difficulties in the industry have historically prompted discussions about potential M&A in the finance industry, but these ideas rarely materialize into actual plans, Shawky said. He stressed that Beltone is not looking at any potential mergers with other industry players.

Austerity has been tough, but financial easing is coming: The impact of declining inflation and interest rates will translate into lower prices in the coming period, Shawky said. He brushed off recent protests as being a natural response among the middle and lower class to the government’s economic reform program, but expects prices to continue falling as long as economic stability prevails.

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