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00:00We know there's a deal in the offing from the JCC to help Bahrain. What strikes me about the IMF is instructive. It's very very clear and it sets a very very strong tenor about tax and deficits for Bahrain and beyond Bahrain. Absolutely. I don't think it's a surprise to see another DCC country basically embarking on reforms or the IMF saying that DCC countries need reforms like identify them. You've seen Saudi Arabia lead that the DNC and gone. You see we've seen Egypt two years ago start . So it's not a surprise for a country like Bahrain. However the most important thing and that's what the IMF is highlighting is that you actually need proper reforms real reforms rather than grants from the rest of the DNC which I don't think is going to happen anyway. No nothing's ever given for free. Only imagine that it'll come with some fairly hefty restrictions . You mentioned Saudi Arabia. I just wanna get your view. We've had these stories that the IPL will be shelved it won't happen . Who cares about the IPL. You can you can take people into the reds and you can extract a hundred billion dollars. And what gives in the Dada. Well I've talked about it relative to Dubai the valuations et cetera. People are saying you know it's looking expensive it's looking overdone. Would you agree or disagree. Well Saudi is expensive but it's expensive for a reason it's all positioning ahead of MSCI inclusion because don't forget that then every day that it is the largest liquidity event that's going to happen in the Middle East wherever it actually happened in the Middle East. It makes the GCSE relative because it's now going to become four and a half percent of MSCI go into in 2019 by the end of 2019 which means the gem investors cannot ignore it anymore. So that's why we've seen a lot of positioning from active funds. And then you're going to see the passive money coming and the active I presume go to the staple bread and butter they go to their banks they go good they go to the Matt Miller because it's actually what it's all across the board to be honest. So we've seen positioning all across the board even if the market is expensive if you look at the history always markets tend to run up significantly ahead of inclusion and then it corrects. Right. We think that there's going to be much more money flowing. Do you think that there's going to be a badly underestimated. I think we have. I think we have and also don't forget that the gym MONEY THAT'S WHAT I SAID THE GYM money hasn't come in. So global emerging markets funds the big money hasn't come into South yet. Let's let's take it to one of your big specialties which is Egypt this morning we waking up to a packet of cigarettes in dying time Cairo costs me 16 Egyptian pines as opposed to 14 Egyptian pines . Yes we're being told in part that we'll go to Health to fund the health system. But if I look at fuel price surge a cigarette this is really hitting the average Egyptian. So my question to you from the macro point of view is are they going to push the bandwidth of inflation higher. These are quite significant moves. Yes. And this is what we've said in the beginning of the year and when I basically said I think interest rates the central bank is going to try to manage interest rates as much as they can is because of another other wave of inflation that's coming in July which is through cigarettes not as much but of course the fuel the fuel prices. So if anything it's another bold move but it's the same reform agenda that the government has embarked on from day one. So if anything they're actually delivering. You would actually make the point that don't squander your opportunity you've got 100 million. You've got an education system CAC coming online. There's four companies that we understand are going to be IPO. Yes you will . You are working on one of these sectors would you care to tell me which one it is. I mean I've got some idea Eastern tobacco company that might be another slug come from that. What are you working on. Well what we're working on is actually private sector. So what we're working on one of the largest infrastructure is large construction plays in Egypt and that's supposed to come to the market was the end of this year. What's the appetite like out there from the international investment community for the IPO. It's it depends on. It depends on the investor type. So we're seeing the appetite today from emerging markets investors. We're seeing it from Frontier and Africa investors we're seeing it obviously from Mena but not yet from global emerging markets. Has Egypt got the capacity to sell for major stakes this year. They do have the capacity the question is if they're going to do it. So I'm a bit skeptical on the public side whether they're actually going to have enough time to do with no or not. And in terms of some of the calls you've broken it down quite nicely you talk about the consumer. You talk about a variety of plays there's consumer there's infrastructure so. So your biggest cause at the moment on on the consumer side because if the eye the consumer could take a hit in the side of the consumer the consumer is taking a hit as we speak. So I wouldn't actually go on Russian by consumer names today especially that they haven't really corrected that much. So Egypt is again is not cheap. What I would argue is that you actually need new names to come to the market and that's why ISE and others are trying to do that because anymore if Egypt is still lacking a bit of depth and that's why you see reflected liquidity liquidity is quite low in the market do you think that we've seen all of the stories of buy health care by education. I mean these are the retail stocks that were showing just at the moment but on the healthcare side for example Cleopatra hospitals and you know has has a busy expansion pipeline. I just wondered to what extent is there more bang for my buck in healthcare than there is for example a in the consumer play well again with when you look at health care when we look at something like your partner and again the promise that there are not many health care names that are on to play but it looks like your pathway is quite expensive today. So the market has actually reward the Q bathrobe for all these expansion plans that we're talking about. If anything I think is actually President .

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Bahrain Needs Proper Reforms, Renaissance Capital Says

Bahrain needs a comprehensive package of reforms to reduce its fiscal deficits over the medium term, the IMF said. Ahmed Badr, chief executive officer for the Middle East and North Africa at Renaissance Capital, weighs in on "Bloomberg Markets: Middle East." He also discusses Saudi stocks and Egypt's economy with Manus Cranny. (Source: Bloomberg)

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