Where is best to invest savings?

CAIRO – 2 May 2018: EFG Hermes Managing Director and Head of Research Ahmed Shams El-Din said that the best profitable way to invest savings is through distributing them among different investment sectors to diversify risks.

The National Bank of Egypt (NBE) and Banque Misr will start dispersing the original value of their 18-month certificates of deposit at 20 percent interest rates after the end of its tenure.

Both banks announced in November 3, 2016, following the flotation of the Egyptian pound, that they would offer 18-month certificates of deposit at 20 percent interest rates.

However they halted issuing these deposits in February 2018 and replaced them with new savings certificates with an annual return of 17 percent and 15 percent.

Shams El-Din advised people who would want to invest their savings to direct one third of their savings in the Egyptian tock market, whose main index EGX30 is expected to surpass 20,000 points in the coming six months amid the increased demand from foreign investors and in light of the reform program that is being implemented.

Among the most prominent sectors that Shams El-Din advises to invest in are the real estate, industrial and financial sectors.

He added that there are also “golden” opportunities to invest in small banks after cutting interest rates, as these banks achieved growth rates of 15-20 percent.

Concerning the rest of savings, he advised to put one third of them into an annual deposit in banks, and another one third in purchasing a three-year variable rate deposit.

In March, the Central Bank of Egypt (CBE) cut key interest rates by 100 basis points for the second time this year.

The overnight deposit rate was lowered to 16.75 percent from 17.75 percent, and the overnight lending rate was cut to 17.75 percent from 18.75 percent.

The cut came on the back of easing inflation that stood at 13.3 percent in March, down from 14.1 percent in February.