Where does capital go in times of crisis?

Al-Torgoman: Diversification of the investment portfolio is necessary, and gold is a safe haven

Resolving the debate between investment alternatives can be one of the controversial ideas, especially at a time when the question of which vessels are better is often raised in light of the crisis, with inflation rates rising to record levels and reaching 21.5% in Egypt last November, as a result the Ukrainian war, the supply chain crisis and the Corona epidemic. .

The local currency has faced many pressures as a result of these successive crises, which has prompted investors to look for the best investment vessels to preserve the value of money from rising inflation, so what is the best alternative?! Are bank investment certificates after the interest rate was raised by 3 percent last Thursday and will there be certificates with a yield of more than 20 percent?

Or stocks, which have risen brightly, especially as they trade below their fair value, despite being up around 70% from last July’s bottom, or gold and real estate, which are safe havens?

dr. Sameh Al-Torgoman, Chairman of the Board of Directors of Evolve Investment Company, said that gold should be part of every investor’s investment portfolio at this time to protect their money from inflationary pressures, which increase the investment demand for yellow gold. metal.

Randa: Equities have been the best performers among asset classes recently

He emphasized that gold is the best investment vessel in the world in the light of crises, and it is also known as a safe haven, especially because it helps preserve the value of money in case of fluctuations.

He noted that 2023 is the year of investment in gold, and the crisis creates great investment opportunities that must be taken advantage of.

Gold prices edged higher in local trading last Thursday and the ounce rose slightly in global markets, supported by a weaker dollar amid light trading due to Christmas celebrations, and prices traded in a narrow range, with investors awaiting economic data to give an indication of inflation rates and US central bank guidance regarding prices, interest rates over the next year.

Juerg Kenner, managing director and chief investment officer at Swiss Asia Capital, expected gold prices to rise to $4,000 an ounce in 2023, as interest rate hikes and recession fears keep markets volatile.

Money market expert: the most profitable sectors and companies that issue or own assets

He said the price of gold could reach between $2,500 and $4,000 sometime in 2023, according to what he told US news network “CNBC”.

This hypothesis is supported by what was announced last week by the World Gold Council, that central banks globally bought 400 tons of gold in the third quarter, which is almost double the previous record of 241 tons in the same period of 2018.

And a gram of 21-carat gold recorded a level of 1,760 pounds in Egypt last Thursday, while an ounce recorded a level of 1,815 dollars.

Randa Hamed, director of Okaz Asset Trading Company, said that the best type of investment in the current circumstances are stocks, as they are a good hedging tool so that the currency does not lose its value with a continued high rate of inflation, especially since it reflects all the variables.

Good: Gold and stocks are the best investment options

However, sector-to-sector variation in results was expected, and he believes the petrochemicals (fertilizers), banking, communications, technology and food sectors are still far from their targets.

She advised stock market investors to first look at the company’s financial statements, earnings and multiples, and indicated that the profitability multiplier of the main index EGX30 is 8.4 times, which is considered attractive compared to competing markets.

She explained that the stock exchange did the best business with investment certificates that were issued with an interest rate of 17.25 percent, because since the exchange rate liberalization in October last year, it has grown by 37 percent.

She also indicated that it is better than real estate due to excessively high prices and difficulty in liquidation.

And she asserted that despite optimistic expectations and the fact that gold is a safe haven, buying it at current prices is a risky gamble, especially since its price on a global level is under pressure from high interest rates and strict central bank policies, which may continue in 2023. , and locally its prices can be reviewed as soon as possible. The availability of dollars and the return of exchange rate flexibility.

Expectations that gold will reach a new record in 2023

And I expected further increases in the indicators in 2023, as happened in 2003 and 2016, and the indicators rose after the exchange rate was liberalized to more than 100% of its value to compensate for the fall in the value of the pound.

Mohamed Abdel-Hakim, head of research at Fleet Company, said the overall situation could fall due to the depreciation of the pound against the dollar, so it is advisable to invest in property and stay away from cash. The key lies in speed, that is, the speed of acquiring assets.

He pointed out that the Stock Exchange is the most active class with the possibility of quick acquisition, with most shares reflecting the appreciation of the dollar against the Egyptian pound.

An expert on financial markets said that defining a special strategy for all investors is “absurd”, because every investor has a strategy, but it is possible to predict the most profitable sectors, and they will definitely bet on export companies such as AMOC, Sidi Kerir, manufacturing companies fertilizers and others.

He added that the medical sector has a special nature, due to the presence of large offers in companies and some acquisitions of small companies for their restructuring, since the beginning of 2023 could witness many deals in this sector.

Fitch: Egypt’s real estate sector remains attractive for foreign direct investment

Mohamed Hassan, managing director of Bloom Securities Brokerage Company, said financial markets and gold are now among the best investment opportunities.

He pointed out that investment certificates are one of the best options for individuals who are afraid of risk and want fixed and stable income, such as the elderly.

He said the rise in gold prices locally, in a manner inconsistent with the yellow metal’s global performance, was driven by dollar speculation, with some turning to gold as an alternative to buying the dollar, especially since it doesn’t expose unless you have a fundamental reason to buy it. buy from banks.

In a recent report, Fitch Ratings confirmed that the Egyptian real estate market maintains its position as an effective destination for attracting foreign direct investment and that continued investment in the energy sector and in the field of public infrastructure will remain the main driver of growth in Egypt in the long run and create opportunities for companies in the area construction and heavy industry, as well as supporting industries such as transport, banking and financial services.

The agency emphasized that the general situation in the commercial real estate sector in Egypt is a strong incentive for investment in the market due to the continuous development and construction of 20 new cities, in addition to the development of 23 existing cities. New cities also provide potential investors with attractive opportunities and large real estate projects, including the administrative capital. New City, New Alamein City and New Mansoura City, to name a few.

I wrote – Fatima Salah, Rana Fouad and Nourhan Mamdouh