Podcast Center
Video Center
Webcasts
Resource Center
Events
August 26, 2013 at 09:04 PM
The volatile situation in Egypt is headline news and is changing rapidly with very little clarity on what the final outcome will be, and when it will be. And yet despite all that’s going on, the Egyptian stock market has remained almost eerily stable. While there has been some weakness, of course, “the damage hasn’t been that great,” said Larry Seruma, chief investment officer and managing principal of Nile Capital Management in New York, a firm that invests throughout the Middle East North Africa (MENA) region, Egypt included, “and the weakness has been far less than one would have expected.”
Seruma, like many investors, isn’t giving up on Egypt, where, he said, there are a number of very well run and well capitalized companies that have continued to perform despite the country’s many macroeconomic woes. He views the present crisis in Egypt as a step in the right direction in the country’s evolution since former president Hosni Mubarak was deposed. Rumors have been circulating that Mubarak may be released from captivity, “but I believe that the military will continue to hold onto power and that ultimately, we’ll see a better democracy in Egypt and a far better country than other Mubarak,” Seruma said.
Seruma also said he believes that the Muslim Brotherhood’s days are numbered. “Once the dust settles, I believe that they will go underground, or at any rate, not exist in the same way as before, and in the long run, that’s a good thing,” he said. Of course, the Muslim Brotherhood is the most dominant political group in Egypt and has been operating for around 80 years. And in the Egyptian election that took place a year ago, the Brotherhood did win 51% of the popular vote.
However, “the Brotherhood is clearly not the best party to rule Egypt. They don’t have strong economic ties, and although they were aggressive in pursuing their agenda, they clearly couldn’t govern, and they will always face resistance in Egypt,” said Seruma.
The Brotherhood was also not a favorite of countries like Saudi Arabia, Kuwait and the United Arab Emirates, which pledged a collective $12 billion to the military-backed government. This cash infusion has helped Egypt stabilize its finances, to a certain extent, Seruma said, and staved off its pressing need for a loan from the International Monetary Fund (IMF), negotiations for which were tense, to say the least, in the months before the onset of the hostilities.
