CAIRO - Egyptians have different views about investment opportunities after the January 25 revolution that ousted former president Hosni Mubarak. Stocks, gold, real estate and foreign exchange emerge as potential options for local investors, analysts say. "There's nothing compared to gold in this circumstance that can make better revenues," argued Rafiq Abbasy, the head of gold department at the Federation of Egyptian Chambers of Commerce. "Gold has been on the rise globally. The recent gains make gold the best choice for investors," Abbasy said. Globally, the bullion struck a record high at $1532.91 an ounce last week. Egypt's gold sovereign hovered above LE2,000 ($335.6) here. Although Abbasy forecasts the precious metal to fall slightly worldwide after these historic gains, he makes it clear that gold remains the best safe haven from inflation in the North African country. "It is the safest store of value for investors." Inflation in the most populous Arab country of 80 million people rose to 11.5 per cent in March from 10.7 per cent a month earlier, according to the State-run Central Agency for Public Mobilisation and Statistics (CAPMAS). Annual inflation stood at 21.1 and 16.2 per cent in 2008 and 2009 respectively, according to CAPMAS. Inflation reached a record high of 23.6 per cent peak in August 2008. Last week, the Central Bank of Egypt (CBE) kept overnight deposit and lending rates at 8.25 and 9.75 per cent respectively for the thirteenth time in a row. Therefore, keeping money at local banks is less attractive for investors who seek more gains, analysts say. The property market may be a better solution if land disputed with the Egyptian Government are put to an end, they add. "Buying real estate is a great risk these days. The market hasn't seen any actual declines after the January revolution. But in the long run, it is a good investment," said Mohamed Ashour, a real estate analyst at Cairo-based Naim Investments. "Property giants are under investigation by the Public Prosecution. Therefore, some companies might shut down anytime soon. The future of the property sector is vague and no one knows what may happen in the short and medium terms," Ashour explained. "Property firms are seen to face liquidity problems, putting their business into standstill," Mohamed Farag said, adding that the sector will attract investors if land disputes with the Government are finally settled. "Stock prices have fallen sharply since the eruption of the revolution. This is a golden opportunity for investors to make profits in the short, medium and long terms," Issa Fathi, the head of Alhorriya Securities, said, adding that stocks are the best investment option as local shares stand at very low prices. "Investors who keep their stocks for longer time will gain more as share prices pick up in the long term," Fathi said. In March, Mohamed Abdel Salam, the Chairman of the Egyptian Exchange, said after reopening the Bourse that fortunes were made at times of crisis. "Share prices will not stand at their very low levels now. They will pick up later on, so it is time for buying now," Abdel Salam said. According to him, experience proves that the best time to buy is the time of crises, when stocks bottom out. After Mubarak stepped down on February 11, experts said the US dollar would rise to LE6.25 versus the local pound. But the greenback rose less than expected to LE5.96 from LE5.9. "Some people thought the dollar would rise to record highs versus the Egyptian pound. It didn't happen. The dollar has been stable at around LE5.96 after the re-opening of banks in February," said Mohamed el-Abyad, the head of foreign exchange department at the Federation of Egyptian Chambers of Commerce. "There's less supply on market, but demand for the dollar is weak as well. The pound hasn't taken a blow as forecast before re-opening banks. They thought the pound would breach LE6.25 right after the revolution, but that didn't happen," el-Abyad added.
