CAIRO: The American Chamber of Commerce in Egypt hosted the head of the Egyptian Financial Supervisory Authority (EFSA) Sherif Sami Sunday to discuss recent developments about real estate funds and its impact on the sector and capital market, according to a statement released late Sunday.
Legislation regulating real estate funds and recent regulations issued by the EFSA concerning mutual funds were highlighted during yesterday’s meeting, organized by the American Chamber’s real estate committee, added the statement released on EFSA’s website.
Early in march, Egypt approved the amendment of the capital market’s executive bylaw according to the Minister of Investment’s decision Number 22 for 2014.
“EFSA was keen to amend the mutual funds bylaw in order to promote real estate funds through flexible regulations and establishment procedures,” Sami said.
EFSA also aims to complete and approve the first Egyptian measures for real estate assessment, along with preparing regulations for categorizing those responsible for the assessment within two months, Sami added.
He further noted that a real estate fund should be a closed joint stock in order to obtain the legal entity necessary to possess lands and assets for its activities.
“The total assets of investment funds in Egypt are valued at $1 billion,” Sami said in his speech at the 1st first annual conference for Mutual Funds held in Cairo on March 31. He called for increasing such funds in the near future.
“ The current situation in Egypt requires establishing various mutual funds, not only exchange traded funds (ETFs), so as to provide the necessary finance for small and medium enterprises (SMEs) which represent 70-75 percent of Egypt’s GDP,” he added.
The real estate sector is the main contributor to Egypt’s economic growth, affecting more than 90 industries. The sector represented 4.6 percent, roughly 80 billion EGP (U.S. $11.5 billion,) of Egypt’s GDP during fiscal year 2012/2013, and recorded a 5.9 percent growth rate, according to data from the Ministry of Housing.
Approximately 35 billion EGP was invested in the real estate sector last year, accounting for at least 8 percent of the country’s labor force, according to the ministry’s data.