By Amira Salah-Ahmed
CAIRO: Hosni Mubarak stepped down as president of Egypt at 6 pm on February 11 after 18 days of nationwide protests that more or less paralyzed the economy, brought the stock market to its second lowest point in history and prompted tourists to flee the country.
The Egyptian pound steadily spiraled to its lowest point in six years and many small businesses have been hit hard.
But much of the sentiment over the past weeks has been that if people’s demands are met, if their political aspirations are fulfilled, that investors, tourists and businesses will want to be part of the “new Egypt” story.
Karim Helal, Group CEO of CI Capital, said: “I can’t believe I got to live to see this moment.”
With sounds of celebration roaring in the background, he added, “There’s too much excitement but the real work begins now, but at least we can start. I’m very positive about the future.”
Uncertainty remains over the next steps, both on the political front and for the economy.
Beltone Financial’s Angus Blair told Daily News Egypt, “The army has to realize that there has to be good microeconomic governance of Egypt.”
He cited major stresses on the economy, chief among which are food price inflation and funding the government. “The army cannot do this on their own, they have to choose people who can help them manage,” he added, pointing to bringing back former finance minister Youssef Boutros-Ghali as a possibility.
Blair said that unlike his outlook just hours before Mubarak stepped down, he is now more positive on the market. “The stock market will see marginal buying — though there will also be selling — but should rise.”
He’s also more positive on the Egyptian pound, which has taken a beating, and sees the pound firming slightly against other currencies.
The pound closed at 5.879 to the dollar on Thursday, little changed from Wednesday’s close of 5.8775 but stronger than the six-year low of 5.960 reached before the central bank entered the market on Tuesday.
A feared run on the banks never materialized when they reopened on Sunday, Feb. 6, with some reporting a net cash surplus.
Some investors remained confident throughout. Muhanad Awad, CFO of Al Hokair Group — undertaking the construction of Mall of Arabia — said earlier this week that the group’s “investments are safe in Egypt,” adding that they “just transferred cash to Egypt to boost equity for construction of projects here.”
What’s important to remember is that the fundamentals of Egypt as an investment destination remain unchanged: a massive consumer market of mostly youth, skilled labor with a lot of unrealized potential, a strategic geographic location — as well as control of the vital trade route through the Suez Canal — and ample tourism aspects to boot.
The nation’s youth — the human capital that has been talked about but little utilized —now has a renewed sense of ownership, has proven it can put its initiative to good use, feels motivated and united, and can now work towards a common goal that will bear fruit for the economy.
Gary Thayer, chief macrostrategist at Wells Fargo, told Reuters in the US after the announcement: “It looks like the stock market is taking the news well. One thing that has weighed on investor sentiment is that the price of oil would go up in the case of political turmoil and Mubarak’s leaving reduces that possibility.
“Crude oil prices declined on the news and we’re seeing gold come off a little bit. Treasuries are up a little bit.”
Many young Egyptians aware of the dire effects of a possible stock market crash rushed last week to form initiatives calling on people not to pull out of the stock market unnecessarily, while at the same time asking people to invest with even as little as LE 100.
Commercial International Bank launched with Istethmar Fund an initiative enabling all Egyptians to subscribe and support the Egyptian stock exchange by investing with as little as LE 67, by changing the minimum subscription units for first orders to 1 unit instead of the current minimum of 10.
This initiative will begin Feb. 13, subject to the reopening of the stock exchange on that day, and run until March 31. The bank will remove the subscription fees of 0.25 percent for Istethmar fund and non-CIB customers will be allowed to subscribe directly without opening a CIB account.
Commercial International Bank, the parent company of CI Capital, said it built on “youth initiatives calling on the Egyptian youth to stimulate and revitalize the national economy and support the stock market,” according to a statement.