By Mohamed Ahmed
Mubasher Financial Services is preparing to address the Egyptian Financial Supervisory Authority (EFSA) seeking an investment funds management licence. The move comes under the company’s plan to expand its capital market activities in preparation for the transition to a holding company.
According to Ehab Rashad, Mubasher’s General Manager and Board Member, the company will request a licence for the management of investment funds. It follows EFSA accreditation of the extraordinary General Assembly Minutes, which included the approval to raise the company’s issued and contributed capital for the portfolio management company from EGP 3m to EGP 5m. This is in parallel with the authorised capital increase to EGP 50m.
The portfolio company was founded in March 2013, when it received EFSA approval. The company’s strategy is based on investors having a minimum of EGP 100,000 to open an account, and the company putting specific investment mechanisms based on the investor’s guidance. In the latter, investors can determine one investment pot, or allocate a percentage to each type.
Mubasher will hold a promotional tour in the Gulf during September, Rashad said, to attract financial portfolios after the president’s approval to postpone capital tax for two years. The significant decline of the market prices of shares are also set to be exploited, despite the market is currently going through very difficult circumstances.
Rashad said the company has succeeded in attracting financial portfolios owned by institutions as a major step in the company’s business development. This is because major institutions’ portfolios, whether private or government, require specific criteria, including: years of activity; size of expertise; and size of the managed portfolios, which are all major reasons for holding back the company’s ability to compete on all tenders issued now. He added that it will be different in the future with the company gaining more experience.
The company announced at the time of its establishment that it aims to reach a size of managed portfolios, during the first year, of $30m. However, Rashad refused to announce the value of portfolios currently managed by the company, one and a half year since it was launched.
On the other hand, according to Rashad, Mubasher has developed an ambitious plan aimed opening an extensive network of 30 branches across Egypt by 2017. This step came as investors, particularly in Upper Egypt, find it hard to reach the company directly or communicate with the work team, whether Account Managers or Managing Director. This is an important confidence factor in the integrity of the brokerage firms trading in securities.
He added that they plan to add three more branches before the end of the year. They include a branch in Heliopolis, and another in the Canal cities that will be under consideration for future investments in Egypt – while the third’s location is yet to be determined. This brings up the company’s branches to seven branches, other than the headquarters.
Rashad said that the end of the year is the company’s deadline for opening the three branches, and that only then the company’s commitment to implement its plans can be proven or disproven. The opening of the three branches is dependent on obtaining EFSA approval and providing the branches with the technological infrastructure, as well as the appointment of the working groups,
According to Rashad, the long-term expansion plan mainly depends on the country’s completion of the political road map by conducting parliamentary elections reaching a state of political stability. This is in addition to achievement of economic growth that would attract Arab and foreign investors to the local market.
The company has no intention to raise the paid-in capital of brokerage activity, which is of EGP 21m, Rashad said, as the mother company does not distribute dividends but reinvests again.
He added the most prominent aspects of spending are concentrated in the design of new technological applications that contribute to enabling customers to manage their portfolios better or receive orders in a more effective fashion. A new electronic application is to be launched soon in 70 countries, including Egypt, to facilitate communication between clients and work teams, Rashad said.
As for the establishment of the financial consulting firm with a capital of EGP 5m, he said that an application has been put to EFSA seeking the Managing Director’s licence. Starting a consulting activity would be a major step for the establishment of Mubasher Holding Company, with a capital between EGP 20m and EGP 50m. The company will include consulting, brokerage, and portfolio and funds management.
Rashad had earlier announced that the authorised capital of the holding company will be EGP 200m.
