00:00 We ask about these negotiations. Mr. Isa Fathi, the member of the Cairo Company for the Negotiations of Financial Papers, joins us.
00:06 Mr. Isa, welcome to us and thank you for being here.
00:09 We entered the second session on the return of these profits to the Egyptian markets and we exceeded 17,800 points today after the decision on the increase in interest rates.
00:20 In your opinion, what improved the mood of investment again after this decision, despite the fact that the markets were calculating the process of depreciation,
00:28 especially the liquidity levels today, which are usually close to 3 billion pounds, and we are closing at 2.7 billion today.
00:36 What is your explanation for what happened during the two sessions after the central decision?
00:40 Greetings to you and the following workers.
00:45 We can say that the increase in the capital of Melbourne and the circulation of this increase
00:51 has had a magical effect since the paper started circulating, as we have seen since it was implemented.
01:01 Therefore, the markets have been filled with liquidity flowing from it to the markets,
01:07 whether those who exit it enter other markets or those who exit other markets enter it.
01:14 Therefore, there is a kind of optimism in the financial paper that may have compensated for the negative impact of the recent power company,
01:25 which had a negative and negative performance in the past period and had an impact on the level of the investors in the market.
01:35 So, when we look at it from the apparent point of view, we find that the increase in interest rates,
01:44 is naturally the opposite of the prices of financial assets.
01:48 But if we look at it from the perspective of investors, they see that despite the financial assets,
01:54 the expected returns are much higher than what can be expected from the banks' deposits,
02:02 and the previous loans were not able to stop the inflation of their money.
02:13 While the rise of financial assets is one of the possible reasons for this.
02:18 We have said this in several interviews before that financial assets have now become a means of preventing inflation.
02:27 Therefore, the result from the practical point of view, if we look at it from the perspective of expectation,
02:32 was a logical result that the expected returns are higher than the deposits in the coming period.
02:40 This is what led to the positive picture that we saw over the past two sessions.
02:46 Okay. Today, who is the most benefited from the sectors, in your opinion, Mr. Issa, from the process of raising interest rates?
02:53 We know that banks directly, their relationship with the process of raising interest rates, will be affected by this link.
03:01 But today, what are the other sectors that may have a positive or even negative effect due to this decision?
03:07 Banks, there was an expectation that this interest rate could be beneficial through what you buy from the treasury balance
03:20 and the treasury bonds in the coming period, so that the government will have to raise the interest rates of these financial documents and tools of the Deen.
03:29 This represents a very important percentage in the results of the operation of banks, and thus increases their profits.
03:37 We have seen this happen, for example, in most banks, especially in the International Trade Bank.
03:43 But on the other hand, there is another process, which is the process of borrowing, which may go through difficulties in terms of raising the cost,
03:52 and this may cause many economic units or even individuals to avoid borrowing in a way that is expanded.
04:02 Therefore, if there are companies, they may resort to increasing capital more than resorting to borrowing,
04:08 and this is considered that the property trading through loans may have a painful effect on companies in the coming period,
04:16 in light of the foggy situation in which the Egyptian economic scene is present.
04:21 This is the negative and positive side of this, but as I said before, the expected benefits of the remaining stocks in the coming period
04:32 have covered the negative impact of the issue of raising interest rates.
04:37 We see some securities stocks moving today, including Delta Securities, Mr. Zahisa.
04:42 In your opinion, will the securities companies have a negative impact on raising interest rates,
04:50 or will they benefit from the increase in the prices of securities?
04:54 Although most of the Egyptian securities companies, we may see, their investments will be in bonds and depositors.
05:01 This is the main point. The bonds and deposits are the source of income for these companies, as we said about banks.
05:11 Therefore, the government is the main contributor to the interest of these activities, whether insurance or banks.
05:20 Let's go back to the securities, which we see is also rising for the Central Bank, with 71 million dollars at the end of July.
05:30 We have reached 35 billion dollars, Mr. Zahisa.
05:32 It is clear that the rise in the gold market was also a major factor in this increase in securities.
05:38 We are talking about a rise of about 236 million dollars, which has reached more than 7 billion.
05:47 In your opinion, how much will the Central Bank be aiming to enhance the gold reserve during this period,
05:53 to benefit from the current prices and enhance foreign reserves?
05:58 We can say that the rise is closer to a record high because of the rise in the value of gold deposits
06:08 or gold deposits by the Central Bank at a time when it was rising in the international market.
06:14 More than that, real monetary contributions have been made to the Central Bank,
06:19 especially since 71 billion dollars is not the required amount for the Egyptian state.
06:25 If we look at the past months, we find that things are going between 34 and 35 billion dollars.
06:33 Therefore, there is no additional fund that we can rely on to solve the problem of the current exchange rate.
06:41 Especially since all the monetary funds that the Central Bank is relying on
06:46 have not been considered as unrealistic solutions to the problem.
06:56 In addition, the rise in the exchange rate has increased.
07:00 The problem is not the demand payment, but the cost payment.
07:05 The main source of this is the problem of the exchange rate and the lack of foreign currency
07:13 that is necessary for the importation of goods, whether for the consumers or for the consumers' consumer goods.
07:20 I think that the government can rely on the natural ability of the Central Bank
07:28 to be able to convert its dollars to gold in the coming period.
07:32 I think that its action in this regard is very limited.
07:35 But we have an investigation coming in August for the account of the International Monetary Fund
07:41 of approximately 847 million and 900 thousand dollars.
07:45 In your opinion, can we see a delay in this investigation by the government?
07:49 Or will you also resort to precautionary measures, in your opinion, Mr. Issa,
07:52 to pay this payment to the fund?
07:55 I think that the fund will not be prevented from paying this payment,
08:02 because the fund has also placed restrictions on the operation of this precautionary measure.
08:06 If the fund is going to pay this payment, I think that it will not prevent us from using it.
08:12 But this is why we find that this number is not shaken much.
08:16 Because if it was shaken, it could be withdrawn from it.
08:20 We know that a large part of this precautionary measure is in the hands of some Gulf countries.
08:26 It represents approximately 50% of this number.
08:31 Therefore, if we are going to close the fund, I think that the fund will not prevent us from using this number.
08:37 We thank you, Mr. Issa Fathi Al-Oudol, a member of the Cairo Company for the Transaction of Financial Papers.
