Tag Archives: egypt
Improved economy and political stability boost Cairo property markets
All sectors of the Cairo real estate market have witnessed a positive performance and improved sentiment during the first three months of 2015 due to stronger confidence and investment appetite created by increased economic and political stability. A new analysis from international real estate firm JLL says that this confidence is most clearly illustrated by the recent announcement of the mega real estate project Cairo Capital which will serve as an extension for New Cairo and will draw the centre of gravity further to the East of the existing city. The report shows that residential sale prices have continued to increase across Cairo in the first quarter of the year with office rents increasing in New Cairo and retail rents edging further upwards over the past quarter. The hotel sector has also recorded improved performance with tourist numbers and hotel occupancy rates improving. The performance of both the tourism sector and other parts of the real estate market are expected to continue to benefit from increased levels of foreign investment into Egypt, committed at the recent Economic Summit in Sharma El Sheikh in March 2015. The report points out that Cairo’s residential market continues to recover with improved sales figures as a result of the recovering economic and political sentiment. Apartment and villa sale prices increased during 2015 across all the areas monitored by JLL as many residential developments have few units left and have increased prices accordingly. Performance in the rental sector remains more mixed, with some properties experiencing an increase while others are experiencing a reduction due to the unstructured nature of the rentals market in Egypt. An extra 31,000 units are planned to be delivered during 2015 of which 11,000 are in New Cairo and 19,000 are in the 6th of October. ‘The positive economic outlook arising from the Economic Summit is expected to result in additional investment in the residential sector, strengthening the market further in 2015,’ the report says. During the first quarter of the year some 250 units were completed in Al Rehab City, New Cairo, in addition to 640 units in the Zayed complex, increasing the current supply to around 106,000 units. A further 31 residential developments are expected to complete in the rest of 2015 ten of which will be in the second quarter, adding an extra 30,000 units to the current supply. The report points out that the Palm Hills Development is notable, with five of their developments planned to be delivered in the second quarter alone. ‘Despite this additional supply, the positive sentiment is expected to result in increased selling prices over the coming year,’ it adds. Cairo’s office market witnessed a slight improvement during the first quarter of 2015 as rental rates increased significantly in New Cairo due to relatively higher demand. Rental rates in Central Cairo and West Cairo remained unchanged. The major completion in the first quarter of2015 was Park Avenue located on the Cairo… Continue reading
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September’s Red-Hot Emerging Markets
By Nicholas A. Vardy, CFA With Ben Bernanke’s putting “tapering” on hold, the green light for a traditional fourth-quarter rally in emerging markets is on. Recall that the mere threat of tapering on May 22 had put emerging markets into a tailspin. The stock markets of formerly red-hot BRICs — Brazil, Russia, India and China — fell off a cliff, as sentiment soured on these economic powerhouses. Political unrest in Egypt, Turkey and Syria sent global investors scurrying for the safety and security of developed markets, the U.S. and Japan in particular. That all changed on Aug. 27 when emerging markets bottomed. The MSCI Emerging Markets Index has rallied 14.59% since then, and among the 40 global stock markets I monitor on a daily basis, 13 are up by double digits in September alone. That’s a huge turnaround — but not an unexpected one. I’d be hard pressed to recall many other episodes of such massive underperformance of emerging markets compared with the U.S. Following such a sharp rally, emerging markets are certainly overbought on a short-term basis. But with the Fed putting tapering on the back burner for now, I’m looking for a big fourth quarter in emerging markets. And in a liquidity-driven market, September’s top emerging-market performers are a good place to start. 1. iShares MSCI Thailand Capped ETF : +21.29% The iShares MSCI Thailand Capped ETF THD -2.36% has been one of the top-performing emerging-market exchange-traded funds (ETFs) of the past few years, soaring 39.98% in 2012 alone. But during this past summer’s drubbing of emerging markets, Thailand was hit harder than most. Between May 22 — the day the Fed announced the prospect of tapering — and hitting a its low on Aug. 27, the Thai ETF tumbled over 28%. But since then, the Thai market has rallied 23.49%. The triple whammy of a slump in the Thailand’s currency, the baht, economic growth screeching to halt, and fears of the Federal Reserve’s tapering plunged Thailand’s stock exchange firmly into a bear market. Indeed, Thailand’s economy hardly is ship-shape. Its economy contracted 0.3% between April and June, following a previous fall of 1.7% during the first quarter of 2013, putting the Thai economy officially into recession. That’s a stark contrast to last year’s strong economic growth of more than 6%. No wonder that even as the market has rallied, Goldman Sachs cut its rating for Thailand from overweight. 2. iShares MSCI Turkey ETF : +20.45% Turkey was the top-performing emerging market of 2012, with the iShares MSCI Turkey ETF TUR -1.36% soaring an eye-popping 65.58%. But the threat of imminent tapering and boisterous anti-government protests caused the Turkish market to plunge almost 32% between May 24 through Aug. 26. Since bottoming, however, the market has rallied 21.47%. The summer’s political protests caught investors off guard. Back in the 1990s, Turkey’s emerging market was a poster child for economic instability. Sure as day follows night, you could always count on Turkey’s stock market to blow up regularly. That all changed with a new pro-business Islamic government installed in 2001. The Turkish economy grew at an Asian Tiger-like average rate of 7.5% between 2002 and 2006, faster than any other OECD country. By 2012, Istanbul boasted an eye-popping 36 billionaires, putting it fifth in the world behind Moscow, New York City, London and Hong Kong. In November 2012, Fitch Ratings upgraded Turkey sovereign debt to “BBB-,” the lowest rung on the investment-grade level — the emerging market’s first investment-grade rating in 18 years. Moody’s followed in May 2103, and the Turkish market hit highs not seen in 25 years. 3. WisdomTree India Earnings : +15.27%. Few former emerging-market darlings have attracted more negative headlines over the past six months than India. One of my favorite contrarian indicators is to look at headlines … and bet the opposite. That strategy would have paid off in spades with India. Britain’s Economist magazine dedicated its Aug. 24 cover story to India’s fall from economic grace. Since bottoming four days later, the Wisdom Tree India Earnings ETF EPI -0.32% has rallied 20.15%. Since May 22, the Indian had market plunged 27.7%, hitting a low on Aug. 28. Political gridlock, a brake on economic reforms, and a plummeting rupee, have made the Indian stock market the worst-performing stock market in the world in 2013, down 17.4%. And that’s after it’s recent sharp rally. The appointment of Raghuram Rajan, a University of Chicago economist and former chief economist of the World Bank , as India’s central-bank chief has lit a fire under the rupee and the Indian stock market. Rajan is introducing reforms to address India’s most glaring weaknesses. But not all of Rajan’s actions bode well for this former emerging market high-flyer. On Friday, Rajan unexpectedly raised a key interest rate in an effort to quell inflation — the first increase since 2011. Disclosure: I hold the iShares MSCI Turkey ETF. Continue reading
