Interesting special report in this week’s Economist on Egypt, ranging from the country’s “natural advantages” to speculation regarding the eventual Presidential successor to the 82 year old and “visibly ailing” Hosni Mubarak.  In regards to the former, aside from fertile land (though desert takes up 95% of it) that it has used to grow its agriculture, mineral and hydrocarbon industries, Egypt’s “Suez Canal has provided a steady stream of revenue, against little outlay, by providing the shortest shipping route between Europe and Asia. Constantly widened to accommodate the growing size of vessels, the canal can now handle all but fully laden supertankers and giant bulk carriers. Revenues doubled in the boom from 2002 to 2008, hitting a record $5 billion that year. After a slump in 2009 they have started to climb again and look set once again to exceed $5 billion this year.”

   

Moreover as the above charts indicate, Egypt’s economy–once the victim of high taxes and state managed, central planning–continues to mature while public debt has fallen and foreign investment rises.  Additionally, robust domestic demand cushioned the effects of the global credit crunch, a promising sign if developed economies in fact embark on a prolonged flirtation with slow inflation.  And with roughly 40% of the 83m plus of its burgeoning population under the age of 18, the seeds for Egypt’s continued growth and consumption are in place, assuming policies to remove a startling number out of poverty are achieved.

One particularly enticing industry for investors is cement, of which Egypt is one of the world’s bigger producers.  Earlier this week Egypt’s Suez Cement group, the country’s largest listed cement maker by market value and a unit of the Italcementi group, reported a 4.8 percent increase in net sales to 3.4 billion pounds.  The firm supplies approximately 26 percent of Egypt’s market for grey cement and 42 percent for white cement.

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