Arabtec Holding's securing of a US$40 billion project to build houses in Egypt could open the floodgates for a wave of investments from the UAE, says the chief executive of the country's biggest investment bank.
Karim Awad, co-chief executive of EFG-Hermes Holding, was speaking after the UAE's largest listed construction company's revealed plans to develop 1 million homes over five years, spearheading a massive public housing programme in the country. The Dubai-listed builder's stock gained 1.67 per cent yesterday following the disclosure late on Sunday.
“It visibly demonstrates how the UAE is supporting the government of Egypt,” said Mr Awad on the sidelines of a conference hosted by the bank in Dubai. “If one investor comes in it gives confidence for other investors to start working. Regardless of what has been happening in the recent period, the Egyptian market still has 90 million people, still has a lot of human capital and a lot of industries offering huge potential to GCC companies.”
Ties between the UAE and Egypt have deepened in recent months after the UAE extended $6bn in support of the Arab world’s most populous country following a revolution and the removal of the former president Mohammed Morsi in July.
Saudi Arabia and Kuwait have also extended assistance as Egypt struggles with lacklustre growth and a dearth of investment.
Arabtec’s deal, believed to be the largest housing project in the Arab world, is viewed as a cornerstone of the government’s bid to provide affordable housing to Egyptians. As many as 16 million are estimated to have inadequate housing.
Sherif Samy, the executive chairman of the Egyptian Financial Supervisory Authority, said the deal went hand in hand with a “big push” the Central Bank was making by investing $1.5bn to improve access to mortgages.
The value of outstanding mortgages is equivalent to less than 1 per cent of GDP, compared to between 30 and 90 per cent in most OECD countries.
“The mortgages law is being reformed and I can see plenty of opportunities for local and regional players to come into the market to help with that,” he said.
Several other UAE companies have already stepped up activities in Egypt.
Emaar Properties’ Egyptian unit, Emaar Misr, announced last month it would spend up to 6 billion Egyptian pounds (Dh3.13bn) on a residential and commercial scheme in Cairo. The Dubai-based retail group Majid Al Futtaim plans to establish several commercial malls in the country over the next years.
“The announcement again highlights that GCC (ex-Qatar) support will continue to flow into Egypt for an extended period,” said EFG-Hermes in a note.
“We highlighted a number of times before that the strategic nature of Egypt’s regime change since 30 June will lead to the continued inflow of support of these countries to shore up Egypt’s ailing economy with more of the support channelled through investments.”
The housing deal was announced on Sunday by Field Marshal Abdel Fattah El Sisi as a plan to help solve Egypt’s housing problems.
“The news certainly came as a surprise and the market had no expectations of it,” said Mohammad Kamal, the research director at the Dubai-based bank Arqaam Capital.
“Instead of a knee-jerk reaction, the market will likely take time to digest the news in terms of its impact on growth and shareholder returns. It will also scrutinise execution risks involved in handling a project of this magnitude. Investors and analysts are looking forward to further disclosure, which may be released along with the company’s first quarter financials,” he added.
Arqaam Capital said in a note that it remains cautious on the project margins, working capital and execution risk.
tarnold@thenational.ae
with additional reporting by Shereen El Gazzar
Follow us on Twitter @Ind_Insights
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Cherry
Directed by: Joe and Anthony Russo
Starring: Tom Holland, Ciara Bravo
1/5
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
UAE currency: the story behind the money in your pockets
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
SERIE A FIXTURES
Saturday (All UAE kick-off times)
Lecce v SPAL (6pm)
Bologna v Genoa (9pm)
Atlanta v Roma (11.45pm)
Sunday
Udinese v Hellas Verona (3.30pm)
Juventus v Brescia (6pm)
Sampdoria v Fiorentina (6pm)
Sassuolo v Parma (6pm)
Cagliari v Napoli (9pm)
Lazio v Inter Milan (11.45pm)
Monday
AC Milan v Torino (11.45pm)
Country-size land deals
US interest in purchasing territory is not as outlandish as it sounds. Here's a look at some big land transactions between nations:
Louisiana Purchase
If Donald Trump is one who aims to broker "a deal of the century", then this was the "deal of the 19th Century". In 1803, the US nearly doubled in size when it bought 2,140,000 square kilometres from France for $15 million.
Florida Purchase Treaty
The US courted Spain for Florida for years. Spain eventually realised its burden in holding on to the territory and in 1819 effectively ceded it to America in a wider border treaty.
Alaska purchase
America's spending spree continued in 1867 when it acquired 1,518,800 km2 of Alaskan land from Russia for $7.2m. Critics panned the government for buying "useless land".
The Philippines
At the end of the Spanish-American War, a provision in the 1898 Treaty of Paris saw Spain surrender the Philippines for a payment of $20 million.
US Virgin Islands
It's not like a US president has never reached a deal with Denmark before. In 1917 the US purchased the Danish West Indies for $25m and renamed them the US Virgin Islands.
Gwadar
The most recent sovereign land purchase was in 1958 when Pakistan bought the southwestern port of Gwadar from Oman for 5.5bn Pakistan rupees.
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Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Ain Issa camp:
- Established in 2016
- Houses 13,309 people, 2,092 families, 62 per cent children
- Of the adult population, 49 per cent men, 51 per cent women (not including foreigners annexe)
- Most from Deir Ezzor and Raqqa
- 950 foreigners linked to ISIS and their families
- NGO Blumont runs camp management for the UN
- One of the nine official (UN recognised) camps in the region
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
Section 375
Cast: Akshaye Khanna, Richa Chadha, Meera Chopra & Rahul Bhat
Director: Ajay Bahl
Producers: Kumar Mangat Pathak, Abhishek Pathak & SCIPL
Rating: 3.5/5
