Rasmala Egypt for asset management targets to increase the size of its assets to EGP 7.5bn by the end of 2017, a growth of 15.4% over assets under management (AUM) by the end of 2015. This comes in light of the company’s optimism about the Egyptian market and its ability to attract direct and indirect foreign investment, which motivates the company to focus on attracting financial institutions and different customers.
Ahmed Abou El-Saad, managing director at Rasmala Egypt, told Daily News Egypt in an interview that 2017 will see the results of the government’s economic reform procedures undertaken at the end of 2016. He pointed out that the government is still facing challenges, and it is necessary to deal with the current economic conditions to gradually resolve all problems related to investment.
How do investors see the economic situation in Egypt?
Investors are watching the economic performance of the country, and are putting the Egyptian market under the microscope to ensure the seriousness of the Egyptian government about moving forward with its economic reforms and resisting the people’s pressure, which is caused by the high rates of inflation. The completion of the government’s bold decisions will strengthen the confidence of investors in the Egyptian economy and thus, enhance cash flows generated from direct and indirect investment.
What is the fastest solution to stabilise the foreign exchange price?
Indirect investment is the fastest solution for attracting foreign currency that contributes to the stability of the foreign exchange price, through the foreign investors’ interest in injecting huge investments into treasury bills and bonds. This is in addition to paying attention to the Egyptian Exchange (EGX) by promoting new government initial public offerings (IPOs) which attract an important segment of investors who were unwilling to invest in the Egyptian market for a long time.
Is the EGX still capable of attracting large corporations?
The EGX has a lot of growth opportunities and is still capable of attracting institutions and new customers, especially as the current market capitalisation did not reach the minimum of the markets, which allow a lot of big investment funds to deal with it. The new IPOs will increase the market capitalisation of the EGX to be a fertile ground for major institutions.
Will 2017 see an inflow of direct investments?
Direct investments are required to revive the Egyptian economy and the increase of cash flow. The size of direct investments are expected to increase by the end of 2017, after being sure that the government will follow through with the economic reform programme compared to the previous year, which saw the depletion of those investments.
How does the Egyptian pound’s flotation impact the performance of investment funds?
The impact of the pound’s flotation decision on funds’ performances varied between equity funds, and money market and fixed income funds. Equity funds celebrated their outstanding performance, while money market and fixed income funds were negatively affected by the decision as a result of the effects of the flotation and increase in interest rates.
The money market and fixed income funds yields declined compared to other alternative opportunities in deposits and savings certificates, so they need some time to restructure investments in order to be able to compete and attract investors.
What are your expectations regarding the interest rates during the current year?
We expect the interest rates to stabilise during the first half of 2017, and to gradually decline during the second half of 2017, in case of the stability of the foreign exchange rate.
How do you evaluate the performance of the company in 2016?
Rasmala Egypt ended 2016 with an outstanding performance after the Arab Banking Corporation (ABC)—of which the equity fund is managed by the company—topped the list of Egyptian funds in terms of performance by achieving a 74.75% growth rate, in addition to its success in attracting new customers and its focus on the financial portfolio which contributed to the increase of AUM by 47.7% over 2016, to register EGP 6.5bn.
What is the company’s plan for 2017?
The company plans to increase the size of AUM to EGP 7.5bn by the end of 2017, which is an increase of 15.4%. The company also targets to attract different customers and to focus on major institutions, in addition to the existence of opportunities for non-traditional investment funds.
Rasmala is managing two funds in Egypt during the current period: the ABC Fund, and Banque Misr’s Exports Development Fund, which is a money market fund.