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Monday, 14 October 2019

Undeterred by protests, MENA fund managers plan to boost Egypt investments

MENA fund managers plan to boost their Egypt investments, seemingly undeterred by recent protests: MENA-based funds plan to increase their investments in Egypt, despite recent political protests, while keeping their exposure in the rest of the region unchanged, according to a Reuters poll. Five of nine managers polled said they would increase their investments in Egypt, citing improved economic indicators.

Rate cuts key: The Central Bank of Egypt’s monetary easing cycle was cited as a key factor encouraging fund managers to increase their exposure to Egypt, according to Vrajesh Bhandari, senior portfolio manager at Al Mal Capital. “Undoubtedly, [Egypt is] the most interesting story in MENA. The events in the last two weeks and the sharp market recovery is evidence that the risk-to-reward is very favorable,” he said. “If the rate cuts come in as expected, we think next year could be similar.” A previous poll by the wire service at the end of August noted that funds eyed increasing their investments in Egypt and UAE and decreasing allocations in Saudi Arabia.

No change to UAE, Saudi, Qatar, Turkey, Kuwait allocations: Meanwhile, fund managers said they were keeping allocations in the UAE, Saudi Arabia, Qatar, Turkey, and Kuwait equal. Bhandari said some investors are reducing exposure to the region in light of higher geopolitical risks and discouraging overall growth compared to other emerging markets.

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