CAIRO: As value has bled from the stock market, capital markets experts have begun to look at how they might pick up the pieces in order re-grasp the economic landscape and discover where to find value. Two speakers at one of the afternoon's sessions sought to address the issues surrounding the new debt and equity markets at a session entitled "Trends in Capital Markets Post Black September, on Monday at the Euromoney Conference. The workshop, that was sponsored by Naeem Brokerage, featured Naeem Board Member Hisham Tawfik and Naeem Regional Director of Research Mike Millar. Tawfik began by outlining the troubles surrounding the economic crisis, breaking them into economic problems and financial ones. The economic troubles, he explained, have largely to do with inflation. Inflation, in a macro sense, is on the rise because, he believes, because demand has exceeded natural supply capability. As a result, too, reaching natural supply capacity will hinder employment levels. "We have reached full employment level, he said. On top of the economic problems, Tawfik outlined the financial crises that led to the collapse of the capital markets. He stressed, though, that financial institutions have committed to seeing the economy through troubled waters. "Financial institutions and government all over the world will not let go and must support financial systems, he said. Mike Millar, who gave a lengthy slide presentation, cautioned the audience that the economy has entered a "lengthy recession. He noted that the current trend in the market is to pursue secure assets."People have been scrambling for liquidity, he said. Millar urged the audience to look out for the point at which assets become undervalued. "For those who come looking later on, he said, there will be some "attractive investments. Millar also took a more bearish approach towards inflationary issues. "I don't think inflation is dead yet, he argued. "Inflation, yes it's going to ease.. Maybe it can come down to mid-teens, but we don't see it coming down to single digits anytime soon. He also predicted "a barrage of new rules in the financial regulatory system. Both speakers warned that renewed foreign interest in the Egyptian markets may still be months away. "There will be more interest in the Egyptian markets by fund managers. I give it five to six months, said Tawfik. "People are going to be very inward looking to get their own house in order before looking overseas again, echoed Millar. Both agreed, though, that Egypt and other emerging markets would be at the forefront of a global economic comeback. "I think the impact of the emerging economies on the real economy, argued Millar, "They will be saviors.
