The stakes are high for Egypt’s financial future as 2025 approaches. With uncertainty still lingering, we turned to three industry leaders to share their expectations on pressing topics such as M&A activity, debt flows, the all-important FX rate for the coming year, as well as key pieces of legislation and regulation now in the pipeline.

We convened a panel of leading financial experts at this year’s EnterpriseAM Finance Forum — we spoke to Ahmed Sobhy, chief investment officer at Banque Misr, Amr Helal, CEO of sell-side investment bank at CI Capital, and Kamel Saleh, managing partner and CEO of Grant Thornton to find out their thoughts about the road ahead.

Cautious optimism is returning to Egypt’s business landscape after a tough year. While “everyone was expecting the worst,” recent macro adjustments and a government shake-up currently offer “positive signs,” according to Sobhy. Saleh echoed the optimistic sentiment while acknowledging the many challenges ahead that need to be addressed. “Our clients are coming to us for advice related mostly to their challenges in realizing their ambitions in investing or in growing in Egypt,” Saleh said.

M&As will take some time to pick up pace, according to Helal. Despite the float of the currency, the expected surge in transaction flow hasn't occurred, but Helal insists this delay was anticipated. “It's no surprise to us,” he said, pointing out that it would take “two to three quarters” of monitoring before seeing significant movement. He expects a “meaningful pickup in dealflow” by 1Q 2025, as inbound inquiries are already on the rise — an encouraging sign for Egypt's capital markets.

Everyone’s holding out for the first domino to fall: The main hurdle to growth and investment inflows in Egypt is a pervasive lack of trust that has left everyone waiting for someone else to make the first move, Sobhy highlighted. This standoff is a major obstacle that needs to be overcome to reignite investment activity, according to Sobhy.

“We need to make the stock market a place where people want to invest,” Sobhy said, emphasizing the need for greater participation from pension funds and ins. companies. With less than 5% of Egypt's pension funds invested in the stock market — compared to 20% in other countries — he warned that this misallocation is diverting capital from productive sectors and reducing activity on the EGX. Sobhy argued that investing in the stock market, particularly through pension funds, is more beneficial than focusing solely on t-bills, which “feed the government deficit” without supporting long-term infrastructure projects.

“We need more targeted incentives,” Saleh said. “We really can't have a tax system that is taxing inflation because that erodes capital competence, and erodes equity,” he said, expressing hopeful caution that inflation could decline within a year but stressed the need for regulators to “act very, very quickly.”

What can bring in more investors to Egypt right now? “There is a lot of international interest in Egyptian assets today. That could be because they're cheap, and I get that people don't like the fact that your assets are cheap. But you have to start somewhere,” Sobhy said. The high risk premium attached to investing in Egypt makes assets cheaper, offering early investors a unique, albeit riskier, opportunity.

We have a great location and a strong labor force, according to Sobhy, pointing out Egypt's proximity to key markets like Europe and the surrounding MENA region. He also highlighted trends of friendshoring, “European companies are coming here to acquire smaller factories for export purposes, while Chinese companies, looking for lower tariffs on their goods, are choosing to manufacture in Egypt.” Sobhy also highlighted strong Gulf investment in Egypt’s tourism-focused real estate and noted that sectors like business services and Fintech, which leverage Egypt's human capital, have consistently thrived and are expected to continue doing so.

What USD rate are you using for next year’s budget? “Early 50s end of year next year. We want to make sure that we're ready for the slight devaluation. However, there are a lot of very positive headwinds for FX,” Sobhy said. “The implied rate in the IMF reports — which I think is way over the top — is 57 for 2025. We’re thinking around the 50 plus range. But these are hopes, not just predictions,” Saleh said.

Which sectors look promising today? Consumer-focused businesses are coming out of the economic challenges “in much better shape,” according to Helal, with local players gaining market share from multinationals. He also mentioned IT services, where companies “earn FX with a largely EGP-denominated cost base.” Helal is less optimistic about high-capex projects, especially those reliant on imports, due to longer payback periods and increased risk aversion during recovery.

Shifting our money from gold and real estate necessitates making financial assets more attractive and accessible, according to Saleh. “The ease of doing transactions and the cost of the transactions need to be looked at.” The uncertainty surrounding capital gains tax on the sale of shares, particularly taxing inflation-driven gains, is a significant deterrent to investment and needs to be looked at, according to Saleh.

“I would do away with the capital gains tax in its entirety,” Helal said, expressing doubt about the tax's ability to generate meaningful revenue. He argued that eliminating the tax could incentivize more companies to list on the stock market, “but obviously the listing has to have an economic viability,” Helal cautioned.

There’s a lot of liquidity in the market as a hedge against devaluation and inflation, Helal said. “I think more needs to be done to encourage those investors, especially as interest rates come down and the easy money from parking funds in treasuries or government securities fades, to increase their allocation to the stock market.”

We can’t expect foreign capital to flood our stock market before we do, Helal said, noting that “outside capital needs to see the local capital heavily invested in their home markets to feel a sense of security.” With continued domestic participation and the return of regional and international inflows, Helal believes trading activity could eventually surpass previous years, even in USD terms.

Where would you invest USD 500 mn today? “Long-term prospects for Egypt are very high, given our potential to export to Europe, to build industry, to serve Europe and the region and Africa,” Saleh said. Sobhy believes Egypt offers attractive long-term returns, particularly in sectors that leverage the country's competitive advantages. Sobhy cautioned against investing in low-value, consumption-based sectors that rely heavily on foreign capital, stressing that the focus should shift towards investment and exports rather than consumption.