DUBAI: After shunning Egypt for over a year because of political instability, Gulf investors are returning to the country, lured by signs that politics are settling down and by the opportunity to buy assets at beaten-down prices.
The interest of Gulf investors, who tend to be more familiar with Egypt’s political dynamics and business culture than Western investors, is a positive sign for the country’s economy, Reuters reported.
“There has been a renewed improvement in Gulf investor appetite for Egypt this year. This is not confined just to the financial industry — the pick-up has been across sectors,” Declan Hayes, managing director for transaction services at Deloitte Middle East, told Reuters.
Many Gulf investors think President Muhammad Mursi’s election has already started the process of solving key issues in trade and investment.
“The recent moves by the president to rejuvenate the military leadership and remove a potential political deadlock have created confidence,” Ahmed Badreldin, senior partner and co-head of large-capital private equity at Dubai-based Abraaj Capital, told Reuters.
“The visit to China is one such example of reinforcing the message that Egypt is open for business, and that investors’ rights will be maintained and preserved.”
One sign of improving business confidence is the rebound in Egypt’s stock market, which climbed this week to its highest level since June 2011, up 53 percent so far this year.
The easiest pickings for Gulf investors in Egypt appear to be banking operations put up for sale by European lenders. Sectors other than banking are also in play as Gulf investors anticipate Mursi’s government will beef up infrastructure projects.
“The interest is not confined just to the financial industry — the pick-up has been across other sectors including energy, oil and gas, consumer staples and in some cases, renewable energy-related investments,” Deloitte’s Hayes told Reuters.
Gulf investors see value in post-revolution Egypt
