From Real Estate to Banking: 4 Ways to Invest in Egypt

Photo via Daily News Egypt

Whether through property or gold, investment helps young Egyptians manage their income, and speed up their journey towards financial independence. At a time of uncertainty, and global economic crises, many are struggling to keep up financially; those who know how to save and invest their money are often calmer than those who never considered investment.

In a fast-paced world of continuous economic fluctuations, turning one’s life-savings into an investment that he or she is confident about is becoming more important than ever. To ease the complexity of that decision, here are the most common types of investments in Egypt.

Real estate

The most popular expression about the advantages of real estate investment is that it never loses its value; if it does not increase, it will stay as it is. While Egypt suffers a high inflation rate, many have sought real estate as the most rewarding investment option. With ever-changing public needs and continuous development, the real estate market in Egypt has been booming for the past decade.

As the government and private sector continue to diversify construction plans in new cities, such as the New Administrative Capital, Alamein City, and Galala City, there are countless investment opportunities in both residential and commercial properties.

Gold

Buying gold has been a common practice in many Egyptian homes. In Egypt, there are two popular ways to invest in gold, by buying gold jewelry or buying gold bullion bars. Many women buy gold jewelry whenever they can afford it. It is a tool for beauty, and can also be a tool for her family’s salvation in case of a sudden financial crisis.

There are plenty of reasons to start investing in gold. However, for those who are new to the market, it can be tricky as one needs to keep following gold market indicators and the adverse effect of global events. Although investing in gold can be a favorable option for many, it can have dramatic downsides when its price fluctuates.

Bank Certificates of Deposit

Plenty of Egyptian children grow up hearing the phrase ‘ha’melak shahada fel bank’ (“I’ll register a certificate of deposit for you at the bank”) by their parents. Oftentimes, parents did so to ensure that when their children were old enough, they could deposit sums of money.

In Egypt, certificates of deposit are considered safe haven investments.

A certificate of deposit is a tool that allows clients to deposit a sum of money in the bank for a fixed period of time, such as one or three years, in exchange for interest from the bank. Upon redeeming one’s certificate of deposit, the customer receives the money he or she had originally invested plus an interest rate. The highest interest rates at Egyptian banks currently range between 11 and 14 percent.

Since they are one of the safest investment options, they are often the most commonly-selected for investment in Egypt.

Egyptian Stock Exchange (EGX)

In Egyptian Streets’ interview with EGX Executive Chairman Mohamed Farid, it was explained that, while certificates of deposit are safe investments, investing in the stock market yields higher returns due to a slightly higher risk.

Despite being uncommon among average Egyptians and small investors, EGX allows you to reap benefits when the Egyptian economy is growing. For beginners, it is recommended to start your investment journey with Exchange Traded Funds (ETFs). ETFs raise funds from individual investors by selling their shares, then use those funds to invest in different financial assets such as stocks, bonds, and commodities, to provide value to its own investors.