Youssef Elfar, CEO of Alnaeem Holding for Investments, asserted that the company was not affected negatively by the devaluation of the Egyptian pound witnessed after the Central Bank of Egypt (CBE) floated the currency. He traced this back to Alnaeem's availability of US dollars, in addition to the company's assets in the Gulf area that are denominated in dollars, highlighting that real estates price hikes supported the company's revenues. This is in addition to gains made by brokerage companies due to the devaluatio0,n as the volume of trading on the EGX expanded after the devaluation in local currency. Elfar revealed that 2018 is expected to witness a stronger performance for Alnaeem, especially since interest rates are expected to retreat, noting that the company has plans to launch new branches for brokerage in New Cairo and Upper Egypt, adding that before the end of 2017, there will be updates regarding Alnaeem real estate fund, in addition to mentioning that the company is in talks with the Financial Regulatory Authority (FRA) to reach a settlement in order to clinch the RECAP and Wadi Degla deals. In terms of creating communication between EGX and African stock markets, Alnaeem's CEO recommends that Egypt address decision makers to take steps forward in order to initiate cooperation between the EGX and the Johannesburg Stock Exchange (JSE), as it is considered the strongest exchange on the continent on which international investors are trading. Regarding Egypt's economic reform programme, Elfar expected that the intended results will gradually be visible during the coming years, noting that citizens have to overcome devaluation by seizing new job opportunities to raise their income in order to cope with a rising inflation rate. The company's capital is denominated in dollars…in these terms, has Alnaeem been affected by floatation? Alnaeem possesses cash dollars, in addition to the company's assets in the Gulf area that are denominated in dollars. That part of Alnaeem capital has not been affected by floatation. In contrast, the company's assets in Egypt, which are predominantly in Egyptian pounds, have been affected by floatation in terms of devaluation of local currency. However, increases of real estate prices supported the company's revenues. This is in spite of the fact that price hikes were not equivalent to devaluation in local currency. Moreover, our brokerage companies benefited from devaluation because the volume of trading on the EGX has been widened after devaluation of the local currency. I think the market has superb growth plans during the upcoming two years, in comparison to the situation before the devaluation, regarding trading volume. Furthermore, I think that listed companies have strong potential in the first quarter of the fiscal year 2018 as trading volume is expected to double. In this regard, I expect better performance during 2018, considering the Egyptian indices. Overall, Alnaeem has not been affected by floatation. In contrast, I think that the companies which have dollar loans are the economic entities most negatively affected by devaluation of the local currency. Has the company achieved its profit potential in 2017? During the nine months that ended in September 2017, the company achieved solid profits because of strong revenues from financial activities, and hikes in real state prices, in addition to that the Gulf Bank – in which we posses a share – has distributed dividends to shareholders. Generally, we remained cautious after the CBE's decision to raise interest rates after floatation. We expect interest rates to decrease in 2018, and consequently, we expect to witness economic improvement. That's why 2018 should witness stronger performance for Alnaeem. Do you have plans for vertical expansion? We are planning to launch new branches for brokerage in New Cairo and Upper Egypt. But, we have no vertical expansions abroad except for our existing activity in the Gulf region. What about updates of Alnaeem real estate fund? Before the end of 2017, there will be updates regarding Alnaeem real estate fund, but we are not authorised to announce them yet. Are there updates regarding your deals with RECAP Financial Investments and Wadi Degla for Real Estate Development? We call on the FRA to resolve the situation and reach a settlement in order to clinch the deal. In your view, how will the EGX receive the awaited initial public offerings (IPOs)? IPOs, especially governmental ones, will support building a new base of investors and increasing the volume of trading on the EGX. Thus, the government's new direction of treating the EGX as a financing tool is a perfect decision which would benefit companies, investors, and the Egyptian Exchange. How do you see dual-listing on EGX and Gulf stock markets? Dual-listing appeared in the past in order to offer liquidity for a company that has assets in two countries, as well as for a country which investors are interested in, while having shares in another country. It was of great interest before floatation, because of the money transfer problem that emerged and affected investors' transactions in Egyptian shares negatively. In this respect, dual-listing enabled investors to invest in Egyptian shares while abroad without facing problems with money transfer. This matter was obvious in foreign transactions through Commercial International Bank (CIB), as they reached the approved maximum of shares owned in CIB, that is estimated at 33% of the range of total shares. However, after the floatation, investors prefer owning shares in Egypt to owning them abroad. How can we achieve cooperation with African markets? South Africa has the strongest stock exchange on the continent, on which international investors are trading. Thus, I recommend that we address decision makers to take steps forward to initiate communication and cooperation between the EGX and the JSM. Finally, how do you evaluate the economic environment in Egypt in terms of the economic reform programme? The economic environment is reflected through the growth of Egypt's gross domestic product (GDP), which registered 5.2% this year, a rate that is considered the highest since 25 January 2011. The results of the economic reform programme will gradually be visible during the upcoming years. Citizens have to overcome devaluation by seizing new job opportunities to raise their income in order to cope with the local inflation rate. In this regard, I do not think that prices will drop, especially as the government shows a trend of cutting subsidies, which requires creating a budget that supports services provided to citizens, particularly health insurance and quality of education.
