The volume of foreign investments that entered Egypt in the third quarter of the 2011-2012 fiscal year was valued at $3.13 billion, according to a recent report issued by the Central Bank of Egypt.
Since $2.49 billion in investments exited the country during the same quarter, there was a net increase of $640 million in foreign investments, the bank said.
The report, published by the official Middle East News Agency (MENA) on July 9th, showed that European Union countries, led by the United Kingdom, had the highest total of investments, followed by the United States and other Arab countries.
"The upcoming period will witness foreign investors racing to enter Egyptian market, and the competition between foreign investors on one side and Arab investors on the other is going to be fierce," Dr. Shaher Abdullah, an economics professor at Ain Shams University, told Al-Shorfa.
Abdullah said investments from the Gulf will dominate the foreign investment arena.
"The Egyptian investment environment is by its very nature attractive to Gulf investors, especially Saudi, Kuwaiti and Qatari investors," he said.
He pointed to the substantial increase in the volume of Qatari investments -- from $3.4 million in the second quarter of the 2011-2012 fiscal year to $13.2 million in the third quarter -- as a sign of investors' eagerness to gain early ground.
"These projections are of course contingent on the stability of the political situation in Egypt," Abdullah said. "Signs of [stability] began to show with the resolution of the presidency crisis, which has transformed into normal political wrangling."
"President Mohamed Morsi's recurrent pledges to protect investment and [ease the investing process] gave the green light to investors who had been evaluating the situation in Egypt and its rate of risk," he said.
"Furthermore, President's Morsi's frequent appearances and expression of support for the security forces, including the army and the police, and his statement that the police are part and parcel of the security forces are evidence of his commitment to restore security, which is the biggest concern of foreign and domestic investors alike," he added.
Mahmoud Mansour, a member of the Egyptian Businessmen's Association, told Al-Shorfa, "Egyptian businessmen will be shouldering a great responsibility in the upcoming period, especially in view of the recent recession."
"The security issue was the primary deterrent and reason they refrained from entering into new projects," he said. "However, once a state of relative stability was achieved, their return began in earnest and a number of businessmen have in fact announced the formation of new economic conglomerates."
Mansour said he expects efforts will be made in the near future to draw Egyptian capital back to the country from abroad, remove obstacles facing Gulf investments and revive more than 1,500 shuttered Egyptian factories, which will in turn attract both foreign and domestic investment.
Stock market analyst Mohammed Fawaz told Al-Shorfa that despite the Egyptian economy's gloomy outlook the first half of this year, investments in the stock market remained relatively stable and within their normal averages, in contrast to the economy in general.
Global financial institutions such as Morgan Stanley kept the Egyptian stock exchange as a part of its stock market index without any adjustments, Fawaz added.
"This reflects confidence in the Egyptian markets, which are considered emerging markets," he said.
Previously, an estimated 12% of the total volume of investments which had entered Egypt between 2006 to 201l left the country, he said.
"Getting that percentage back is very possible and in fact assured merely if the financial markets maintain their current stability," Fawaz told Al-Shorfa.
There were eight new stock market deals during the 2011-2012 fiscal year valued at 4.2 billion pounds ($692 million), he said.
Fawaz attributed the relative stability of stock market investments to the fact investors are concentrating on long-term investments with assured profits.
Also, investors are taking advantage of profitable opportunities by entering and exiting the markets purely for profit, disregarding political conditions except as they relate to profit margins and opportunities, he said.