As if a mirror representation of the Egyptian property market, the Alexandria Real Estate Investment firm announced a nine fold increased profit during 2007 before the deduction of minority interest, totalling 1.47 billion Egyptian pounds according to a company spokesman. In 2006, the amount was 148.2 million pounds of net profit before minority interest.
However, Egyptian shares across the board declined slightly last Thursday when retail investors took profits on their shares held within medium cap and small cap companies, with a substantial number based in the property sector. Dina Negm of Delta Rasmala stated a common opinion, "All the small and medium caps are going down. . . It’s just profit taking by retail investors."
The Egyptian real estate market was not the only one to be hit by profit takers recently. Companies in other markets, particularly Taiwan and Hong Kong, lost considerable value when investors decided to cash in their shares.
Alexandria Real Estate Investments is simply following the trend of shaky and unsure investors looking to pull out of the market and take their profits while they can. With the mortgage market in the United States seemingly in turmoil with no end in sight, and the global credit crunch progressing along in the same manner, investors are increasingly less patient. As a prime example of companies taking hard hits in other markets, Alexandria is simply a representative of a prevailing trend.
Until global markets stabilise, Alexandria and other property investment firms may continue to take hits while investors sell their shares. It appears as though the news of increased profits and stability within each company on their own is not enough to overcome the growing doubts regarding the global markets and their specific levels of stability.
