Egypt’s Suez canal expansion to help revive ailing economy: analysts
ahead of the grand opening next week, trading firms are already seeking to cash in
Egypt’s opening of the “New Suez Canal” is expected to help boost the country’s GDP by 5 percent next year, a government official said, as Cairo struggles to balance its books after years of political turmoil following the 2011 uprising.
Ashraf al-Arabi, the planning minister, said that he expected the new stretch of canal would boost investor confidence.
Imad Hassan, an analyst, said that the canal’s opening will trigger a strong start for Egyptian stock indices, which he expects will see an unprecedented rise – despite a lack of strong market incentives and continued uncertainty about the capital-gains tax law.
And ahead of the grand opening next week, trading firms are already seeking to cash in while the country is in the investor spotlight. Mohamad Hussein, a securities manager in a Cairo-based firm, said that many Initial Public Offerings (IPOs) would be on show during the waterway’s opening.
Completed two years ahead of schedule, after a strict order from President Abdelfattah al-Sisi, the 72km stretch of waterway is expected to double the amount of ships than can pass through, and speed up shipping traffic through the crowded passage.
The original Suez Canal - a vital source of the Egypt economy - allows vessels to travel from Europe to Asia through the Sinai Peninsula.
The new stretch of waterway, set to open this month, is expected to more than double state revenues from the canal - $5.3bn to $13.2bn - by 2023.
On orders from President Abdelfattah al-Sisi, who took office last year, the canal was completed in a year - just a third of the original time slated.