Arqaam Capital’s First Egypt Investor Conference in Cape Town

Thursday, January 18, 2018

Arqaam Capital, the specialist emerging and frontier markets investment bank, announces its first Egypt Investor Conference in Cape Town on 22-23 January at the Vineyard Hotel against the backdrop of an unprecedented level of change and structural reforms undertaken by the Egyptian government to ensure the long-term health of its economy, attract foreign investments and spur growth.

Radi El-Helw, Managing Director and Head of the Egypt office at Arqaam Capital, said: "We expect inflation to drop progressively over the coming months, reducing year on year inflation to as low as 13-14% by the middle of the year, which should allow the central bank to gradually reduce monetary policy rates. GDP growth is already rising, as corporates and consumers adapt to higher prices, the FX overhang has been lifted and services growth continues. Real GDP growth should accelerate to 5% in 2018, 5.5% in 2019 and 6.2% in 2020, above its long-term average."

Wafic Nsouli, Managing Director and Head of Equities at Arqaam Capital, commented: "The recovery will continue in 2018, several rate cuts should be positive for indebted companies and boost capex towards the end of this year. Currently investment climate indicators are still low, regulatory and bureaucratic reform are still lagging and exports are mostly rising on the back of previously unutilized capacities and limited opportunities to expand, with a need to tap new markets and exploit the full potential of existing ones. Stock valuations in Egypt still offer significant scope for further improvement as expectations for the next few years have been set too low especially for industrials and consumer stocks, while banks are more immune to the rate cycle than consensus anticipates, as they de-dollarize their balance sheets, improve their liability mix, increase loan-to-deposit ratios and are generally well matched for interest rate changes."

"We also expect Egypt to continue to be a part of the MSCI Emerging Markets Index despite some concerns following the drop in the number of constituents to two stocks that meet the normal criteria, below the minimum three, given the healthy IPO pipeline that will provide new index constituents, as well as some changes in the market that are resulting in more stocks become eligible for index inclusion, most recently Eastern Tobacco", he added.

Over the two days of the conference, Arqaam Capital will bring together the senior management teams of 23 listed companies from Egypt and more than 25 South Africa based investors for a series of high-value one-on-one and small group meetings. Participating companies are drawn from a wide array of sectors including financial services, telecommunications, industrials, utilities, materials, real estate and hospitality and healthcare and have a combined market capitalization of 20 billion dollars.