Egypt’s current economic situation requires various kinds of mutual funds, EGX Chairman Mohamed Omran said on Monday, noting that direct investment funds have a significant role in supporting economic growth, attracting more savings and providing the needed resources for different sectors.
Omran made this statement during the first annual conference in Egypt discussing mutual funds, which kicked off on Monday under the title of “The Role of Mutual Funds in Supporting Egypt’s Economy”.
The event, organised by Money Cycle, came under the auspices of the Ministry of Investment, Industry and Foreign Trade, Egyptian Financial Supervisory Authority (EFSA), Egyptian Exchange (EGX) and Misr for Central Clearing, Depository and Registry Company.
A mutual fund is a scheme that allows investors to pool funds to buy securities to be sold to the public.
During his speech in the conference, head of the EFSA Sherif Sami stated that the total value of investment funds in Egypt amounts to $1bn.
The panelists of the conference agreed to develop the legislative climate, find new promotional mechanisms and encourage the listing of companies on the stock exchange in order to promote the mutual funds.
Sami noted that EFSA has amended the regulations in investment funds in a way that activates real estate funds in the Egyptian markets. “The amendments will facilitate the establishment of mutual funds,” Omran said.
Discussing stock exchange transactions, Omran pointed out that 75% of traders are individuals and 25% are organisations. He said he hopes that this ratio would change in the future to 60% organisations and 40% individuals.
Omran stressed that the Egyptian economy has promising opportunities to advance and grow in the coming period, “especially after the presidential and parliamentary elections”.
In order to decrease the high unemployment rates, Egypt’s growth rate should record 7% or 8% of GDP, Omran said.
Government and business leaders, along with more than 500 officials from commercial and investment banks in Egypt, gathered to discuss the importance of mutual funds, improving and managing them, exploring investment opportunities and finding mechanism for such funds.