Fixed income trend continues in Egypt

16 Nov 2011

Two new fixed income products were launched in Egypt during October, as the country’s banks seek diversification. Al Ahly Fund Management rolled out its National Bank of Egypt Fixed Income Fund in October, while HC Securities is set to officially launch its Arab Investment Bank Fixed Income Fund III in November with an expected AUM of $4-5m. HC Securities’ fund will invest in fixed income products in Egyptian pounds within Egypt.

“This is the newest kind of fund in Egypt,” Omar Radwan, chief operating officer, asset management, HC Securities, told Mena FM. “We have had several launches of equity funds over the past 15 years along with money market funds. Now that there are more than 20 money market funds, banks find themselves looking for something different, and this is when they started launching fixed income funds.”
Like the HC Securities fund, Al Ahly’s National Bank of Egypt Fund is open to both institutional and retail investors with an objective of capital appreciation.
Radwan told Mena FM that he expects the fixed income trend to continue into 2012.
Over the past year, four dedicated fixed income funds have debuted on the Egyptian market, making up half of all funds launched in the country in 2011. There are now five fixed income vehicles in Egypt, including: the Al Watany Bank of Egypt Fixed Income Fund, the Bank of Alexandria Fixed Income Fund and the Commercial International Bank Fixed Income Fund, as well as the two more recent launches.
Radwan added that investor appetite is returning to Egypt, with money market funds starting to see new inflow activity.