The global economic concerns caused by the outbreak of the Corona virus have negatively affected global financial markets, including Egypt, which led to the decline of shares on the Egyptian Stock Exchange, to very low levels that do not reflect the quality of most of the assets traded in the Egyptian market, and there are many companies that were not affected negatively and maintain positions Financial is very strong and its market value never expresses this, so it is considered an exceptional opportunity to invest in it at that time.
On the other hand, the size of the insurance fund’s funds has approached one trillion pounds, but what is invested in the Egyptian Stock Exchange is only about 2% of the total of these funds, while it reaches about 28% as an average in the countries of the world, and it reaches 49% in the United States, and it holds treasury bills and bonds The government has the largest share of the insurance funds’ hoard, according to the Insurance and Pensions Law, which was issued in 2019, and specifies channels for investing insurance funds, the most prominent of which is investing no less than 75% of the reserves of funds in public treasury bills and bonds.
The Insurance Law also granted the right to reduce the proportion of investment in government bonds and bonds, on the proposal of the Chairman of the Commission, with the agreement of the minister concerned with social insurance and the Minister of Finance and in accordance with the rules and procedures determined by the executive regulations of the law in addition to diversifying the portfolio between the various investment tools, provided that it includes a percentage in social investments, on The return on investment should not be less than the actuarial discount rate.
The volume of funds invested from insurance funds since the law was issued in August 2019 has not witnessed any significant development yet, although the current period is a period of strong fluctuations in the capital markets, but the quality of the traded assets is very tempting, especially since the markets always revert to their level sooner or Sooner, which represents an exceptional investment opportunity for the funds of insurance funds in that period.
The economic analyst, Salah Haydar, said that the Egyptian financial market desperately needs more liquidity to quickly enter and invest in the current period, which is what the Egyptian Central Bank is working on during the coming period after President Sisi announced the allocation of 20 billion pounds to support the stock market, which is expected to be Medium to long-term investments that work to invest in good financial assets that are traded on the stock exchange, and given the availability of liquidity at the present time in abundance, we find that insurance funds and postal investments are the most abundant in liquidity at the present time.
He added that the Social Security Fund Law allocated 75% to invest in government treasury bills and bonds, and the rest is allocated to the return of the rest of the investments similar to the return of those bills. Given the size of the insurance funds invested in the stock market, we find that it does not exceed 3% of the total of that amount, so a decision is taken From the Insurance Authority to activate the mechanisms for investing insurance funds currently is very important, but there must be a mechanism regulating the operations of investing insurance funds, the most important of which is the existence of a committee of investment and insurance experts to set the investment determinants of these funds in the stock market.
“Haider” pointed out that the call to invest insurance funds in the stock market is not a risk of insurance funds in an unaware manner, but simply that there is a strong investment opportunity in the stock market with these declines and the insurance should raise the limits of the funds invested in the stock market to take advantage of those Declines and at the same time invest in assets with strong financial positions.
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