Arqaam Capital, a regional investment bank, seeks to break into the Egyptian market before the end of 2015 with a full range of financial services, including asset-management, investment banking, private property, and brokerage.
The bank, which has 700 global institutional clients, aims to attract $1bn in foreign direct investments to Egypt annually, with the launch of full operations in the upcoming period.
The decision was announced during round table discussions held by the executive administration of Arqaam, led by Chairman Sami Sindi, Chief Executive Officer Riad Meliti, Chief Operating Officer Dennis Wijsmuller, in addition to Radi El-Helw and Sherif Heshmat, who were recently hired to lead Arqaam’s financial intermediation operations in Egypt.
Sindi noted that Egypt is a primary market as it represents a viable opportunity that has been studied carefully from the economic and legal aspects during the last period. This is supported by political will and the government’s drive, which works to create a suitable environment for investment in the market, he added.
In response to a question on the timeframe allocated for pumping investments and operating in the Egyptian market, Riad Meliti said: “We can move faster if the government moves.”
Arqaam has a strong base of shareholders that includes Crescent Point, which is backed by Arqaam’s Chairman, Emirates NBD, the Social Insurance Institution in Kuwait, Qatar Insurance, the Swiss group Vontobel, besides prominent regional families and the executive administration.
Arqaam runs its operations through offices in several countries in the region, the most notable of which are Egypt and the UAE. Arqaam also seeks to operate the activities of an integrated investment bank in Saudi Arabia and Turkey soon, and expand to the Horn of Africa.
According to Meliti, Turkey and South Africa attract more than $50bn each for being present in the emerging markets with 50%, while Egypt’s represents only 1%, which makes it less attractive. This, however, holds great opportunities if the percentage rose, which is Arqaam Capital’s aim.
This plan needs to be supported by the government from different axis, most importantly by facilitating the exchange of the dollar, floating the currency completely, and withstanding the temporary difficulties resulting from the floating, so as to achieve the greatest benefit in the near future with the incoming investments.
He added that the government has to gradually lower income on government debt tools in order to direct part of the bank deposits as loans to the private sector to revive the economy.
Meliti requested that the government implement small and medium-sized projects in partnership with the private sector and venture capital.
On the other hand, Sindi said that Egypt also needs more privatisation operations to deepen the market and increase the volume of trade and capital in the market, in order to attract prominent companies to invest in Egypt, such as Fidelity Investments.
Sindi added that markets similar to Egypt, like the Indonesian market, offer tax advantages to companies listed in the stock market, without exemptions, with the aim of attracting companies to enlist in the market.
Meliti expects the Egyptian economy to achieve growth of 6% to 8% if the reforms the government is undertaking are quickly enforced.
With regards to the brokerage market in Egypt, which has the biggest investment number in Arqaam Capital, Rady El-Helw and Sherif Heshmat said that infrastructure works are taking place for operations, accounts, and auditing systems, and to attract human resources and invest in technology.
El-Helw added that they will work on attracting new investors and companies to join by marketing the Egyptian market.
Heshmat said that investing in technology is the aim of the mother company to create the convenient environment that would cover the needs of the Gulf and international institutions, as well as senior investors.
With regards to the public tender of Arqaam Capital, Sindi announced that his company recruited Rothschild as a financial advisor, in order to study all the options available for the company to attract funds that would be used in its expansion plan.
He also expressed his hopes that a decision would be made regarding these options next autumn, which may include public or private tender offers.