Egypt

In the wake of a tragic train accident at the beginning of 2013, Egypt is looking to step up investment in its railways to improve safety, and upgrade infrastructure and rolling stock. Plans for the development of new tracks are also being implemented with international support.

Despite an uncertain political climate and a sluggish economic recovery, the long-term prospects of Egyptian banks are attracting attention from their Gulf counterparts. Two recently announced acquisitions have brought the sector back into the headlines on a positive note, helping offset a recent ratings downgrade.

The country’s first full post-revolutionary year has seen the first free presidential elections in Egypt’s long history, and signs of a recovery in GDP growth, but also the teething problems of a young democracy with serious economic challenges ahead. As a large and growing market, strategically located, with some important natural resources, and a tradition of economic liberalisation stretching back several decades, Egypt is an enticing prospect for many investors.

Discussions are continuing over the long-awaited potential introduction of a new mobile operator in Egypt, which has the potential to dramatically tighten margins in what is already a very competitive sector. If the agreement is concluded, incumbent operators may find themselves looking to further expand value-added services (VAS) to maintain revenue streams and margins.

Egypt benefits from a sizable supply of natural resources, including gas reserves that place it amongst the top three producers on the African continent. While a steep rise in domestic demand has increased pressure on producers, prompting a rethink in how the country uses its gas, new gas finds and temporary gas imports will help alleviate concerns.

Investor interest in Egyptian bonds and shares is on the rise as greater political stability and signs of economic recovery help stimulate confidence in the country.