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04:05 pm
Sunday 27 September 2020
I wrote – Yasmine Selim:
Within days, the map of investment tools that give the highest returns in Egypt changed after the Central Bank decided to cut interest rates and after the National Bank and Egypt suspended high-yield certificates.
During the Monetary Policy Committee meeting last week, the central bank surprised the banking market by cutting the interest rate by 0.5%, to 8.75% on deposits and 9.75% on loans.
The Central Bank’s decision comes after the National Bank and Egypt decided to stop issuing the savings certificate with a return of 15%, which used to give the highest interest rates in Egypt.
Until a while ago, investing in savings certificates was one of the best tools that gave returns to money, along with other investments such as gold and real estate, but with the low interest rate and the effects of the Corona virus, these data have changed.
Economic analysts who spoke with Masrawy say that investing in savings certificates is still adequate for current economic conditions, noting that some other investment tools are currently suffering from high risks, affecting the investment process.
According to Islam Mekdad, an expert at Prometia, a company specializing in corporate risk management and credit operations, the rates of savings certificates in banks continue to give an adequate return and are free of risk.
Lamasrawi said that the current yield on savings certificates ranges from 12 to 12.25%, which is an adequate yield, and given the low rate of price inflation, this yield is considered positive.
During the month of August, the annual inflation rate was registered at 3.6%, which is the lowest rate during 2020.
According to Miqdad, for example, Nasser Bank allows certification for people over 60, with an interest in the range of 15%, which is still a high-yield investment.
Mekdad advises people who have more money than they need and are willing to take the risk of loss, with mutual funds, indicating that there are many types depending on a person’s risk tolerance.
This is also recommended by Muhammad Abu Bakr, an economic researcher, who says that people should look for containers of savings with a relatively high yield to be able to collect their benefits in the long term, adding: “If a person is of middle income, it is preferable look for an investment fund to invest with relatively low risks and close returns. Permanent “.
According to Abu Bakr, people should diversify their investments so that the risks are lower, for example, one part of savings certificates and the other part in gold or something else, which indicates that the percentage of diversification of the investment varies according to the person’s orientation and willingness to take risks.
He adds to Masrawy that the rule says that if you get a higher return, you will have to take higher risks, and this is under normal circumstances, but under the current circumstances and the impact of the Corona virus on investment, the risks will be too high.
This rule applies to investing in gold, which is a type of speculation and high risk, because the factors that control it are many and volatile, but its returns are higher, according to Abu Bakr.
Islam Mekdad describes investing in gold as a way to hedge risks rather than investment, because it is associated with large costs, such as storing and verifying the type of gold that is bullion and not gold crafts.
International gold prices witnessed a rebound that spanned about 4 months, starting last April, to exceed the price of an ounce in early August, the $ 2000 level on world stock exchanges, reaching historical levels not reached before.
However, prices fell during the same month, fluctuating in the following period between 1900 and 2000 dollars, before witnessing a notable decline in recent days, breaking an ounce of 1900 dollars.
Real estate
According to Miqdad, the return on investment in real estate is based on two aspects, whether it is buying to sell and benefit from the difference or buying to rent.
He adds that the sale is currently paralyzed in the real estate market due to the fact that real estate developers provide facilities to investors, and the rental yield is lower than the yield of bank certificates currently.
Mekdad believes that renting can be a good solution for offices and businesses, but the impact of the Coronavirus has greatly affected demand.
Mohammed Abu Bakr considers that investing in real estate is a traditional market, with many price distortions and imbalances in supply and demand, and it could be a good investment in the medium or long term, not immediately.
Golden tips
Miqdad provides some advice to investors through Masrawy, as follows:
– You have a good amount of money and you have no knowledge of investing in the stock markets – the stock market – and bonds. Invest in savings certificates in banks.
– You don’t have money being young, go to the insurance companies, where they will deduct a part of your salary to insure you, for example, the risks of losing a job.
– An elderly person and has money to depend on to meet their living needs, look for savings certificates in banks that offer 15% interest to the elderly.
An elderly man with money in excess of his needs invested in mutual funds, but at a rate commensurate with his ability to bear risks and losses.
