00:00 We turn to Cairo, Mr. Isa Fathel, a member of the Cairo Company for the circulation of financial papers.
00:06 Welcome, Mr. Isa, and thank you for being here.
00:09 Continuous levels of earnings since the beginning of this week.
00:13 What does the 18,800 points breakthrough mean today?
00:17 And what about the 2.3 billion pounds surplus?
00:22 Are we continuing this rise?
00:26 Or could there be more earnings losses at the beginning of September?
00:33 Greetings.
00:35 The nature of the markets is that they are not moving in one direction.
00:41 There may be a rise, but it will leave it with low gaps
00:47 for the breathing, for the earnings, for news that may not be available at times.
00:54 This is the nature of the markets, but it is clear, as we have said before,
01:00 that the Egyptian stock exchange represents the most suitable space for investors
01:06 to invest in the stock exchange, because it is the easiest and at the same time
01:12 there are no logistical problems facing any investor in dealing with the stock exchange.
01:17 And as many of the guests said, the stock exchange is also a currency that is
01:21 capable of avoiding the risks of inflation, and therefore it has become more valuable
01:27 than the investor making a deposit for profit, even if it is high,
01:32 because it has proven that inflation consumes it a lot.
01:35 While the stocks, as we have seen, there are many stocks that have compensated
01:38 many investors, so that maybe by the end of the year,
01:42 with good profits and increased in percentage,
01:45 many of the stocks have increased more than 100% in the past period.
01:50 It is clear that we have already exceeded the point of the machine, which was 18,000,
01:56 now we have 18,800, and therefore at a stone's throw from 19,000,
02:03 it is likely that there will be a certain reduction in it,
02:06 but I think we will continue in this direction.
02:10 This also means that there is a reassurance that the issue of the exchange rate
02:14 is a matter of time, and therefore this in itself provides a feed
02:18 to the value of the stock, that it is being raised more,
02:21 because it will be formed with new prices, new exchanges,
02:25 which will lead to the values of the stocks seem to be cheap,
02:29 even with the current highs.
02:32 The Egyptian stock market is based on stocks, Mr. Issa,
02:36 but if we compare it with other markets, as we see today in China, for example,
02:41 where the government is seeking to support the market movements and its circulation,
02:45 the first decision it made was to restrict the stocks in the financial market.
02:50 How do we explain today the dependence of the Egyptian stock market on stocks
02:55 to move in the face of other markets?
02:57 Has this kind of stock market started to stop,
02:59 so that the value of the listed stocks is not increased
03:02 away from the process of new companies?
03:06 There is a difference, of course, between the Chinese market and the Egyptian market.
03:12 In the Egyptian market, the number of listed stocks is limited compared to the history of the stock market,
03:18 but in China there are thousands of listed stocks,
03:21 not 200 or 210 listed stocks that we have.
03:25 The second thing is that the next investments, as we understand,
03:30 will be mostly strategic investments, and therefore will not be a general investment,
03:35 as it was done in the 1990s for the public sector companies at that time.
03:41 Therefore, the stock market will be the easy look,
03:48 and not the billions of dollars that are said about these companies.
03:53 All of them will be companies in the strategic investment range,
03:57 because the state needs foreign criticism,
04:01 and therefore it will not be possible to welcome the Egyptian pound,
04:04 at least in the current perspective, until the end of 2024.
04:08 But there will be special investments, more than the state's investments.
04:13 Today, we see that the companies are starting to take some precautions
04:19 for the levels of inflation and the production costs, such as Domty and Juhaina.
04:25 In your opinion, Mr. Issa, how will the prices rise between 7 and 10 percent
04:31 and how will the company's sales decrease in the coming period and the acceptance of its products?
04:36 And how much will the company's profits be affected in the third quarter due to this decision?
04:42 I think these companies are taking advantage of the issue of raising costs,
04:48 because they raise the sales prices at a higher rate than the cost increase.
04:53 The proof of this is the profits they have made in the first half.
04:57 In the first half, we find that Domty has made, as I mentioned,
05:00 a growth of 127 percent in the first half's profits compared to the previous half.
05:06 This means that the sales prices, despite the decrease in sales,
05:09 have risen by this large percentage,
05:12 so the sales price increases at a higher rate than the cost rate.
05:16 The same thing is true for Juhaina.
05:18 During the first half, it increased by 75 percent compared to the half of last year's competition.
05:24 This means that they are raising the cost rate higher.
05:28 Therefore, they must be careful that the decrease in sales may not be a good thing in the long term.
05:36 Therefore, there must be an adjustment to raise the cost rate at the same rate,
05:41 not at a double rate.
05:43 I doubt that the cost has increased by 7 percent or 10 percent.
05:48 Of course, the increase in the cost rate will not exceed 3 percent.
05:51 This is what we will see in the fourth quarter.
05:53 This will result in a greater profit than a decrease in sales.
05:58 In the end, this will lead to a huge decline.
06:01 We are also watching Eurascom Construction after the announcement of the results that we saw, Mr. Isa.
06:08 How are we evaluating the movements of Eurascom Construction today
06:12 in light of the challenges facing the Egyptian economy and the company's ability to expand?
06:19 Despite the positive performance that we saw today, which was almost 200 percent in the second quarter,
06:26 is the company able to maintain its profits despite the challenges and the decline in the cost rate?
06:33 Eurascom Construction is a global company, not a local one.
06:40 Therefore, I don't think the cost rate will be a problem for it.
06:45 I think that the cost rate will be in the foreign currency.
06:50 Therefore, the work in the local market will be in the foreign currency,
06:54 since it is the main center here.
06:57 But most of its work is outside the country,
06:59 which is why its budget is in the foreign currency, not in the Egyptian pound.
07:04 We also saw a 200 percent increase in the foreign currency.
07:10 Therefore, the company is not afraid of this.
07:14 Therefore, the cost rate is a solved problem.
07:19 Thank you, Mr. Isa Fathouli, a member of the Cairo Company for the Transaction of Financial Papers.
07:25 You were with us from Cairo.
